MultiChoice Group: Strategy playing out against tougher than expected macro backdrop

Despite unprecedented external headwinds, most notably currency depreciation which has reduced trading profit by close to ZAR7bn over the last 18 months, MultiChoice delivered various positive operational outcomes through active interventions for the six-month period ended 30 September 2024 (1H FY25 or the half):

• A lower subscriber attrition rate in the linear pay-TV subscriber base versus the six-month period ended 31 March 2024 (2H FY24) in both South Africa and Rest of Africa.
• Showmax paying subscriber base increased 50% YoY, excluding discontinued services.
• SA trading profit margin was maintained in the low 30s in the seasonally stronger first half (31%).
• Cost optimisation efforts delivered ZAR1.3bn in savings, with full year stretch target increased to ZAR2.5bn from the ZAR2.0bn set at the beginning of the financial year.
• In addition to the group’s cost savings programme, decoder subsidies were reduced by a further ZAR0.4bn across South Africa and Rest of Africa.
• Free cash flow and adjusted core headline earnings both positive despite external macro and currency headwinds, as well as the Showmax investment cycle.
• Positive momentum maintained in DStv Stream and Extra Stream, DStv Internet, DStv Insurance, and the group’s sports betting and fintech investee businesses.
• Liquidity position remains strong with ZAR10.1bn in total available funds.
• Transformative insurance deal with Sanlam Life Insurance Limited (Sanlam) nearing completion in the post balance sheet period – the group will recognise an accounting gain in the range of ZAR2.6bn to ZAR3.3bn.
• Meaningful progress made on the Canal+ transaction with the merger control filing submitted to the South African Competition Commission on 30 September 2024, and engagements with other regulatory authorities underway.
• Taking all developments and initiatives into account, the group anticipates resolving the negative equity position by the end of November this year.