MultiChoice : FY24 AGM booklet (2024)

Group Performance

Overview

The financial year to 31 March 2024 (FY24) saw the culmination of four years of strategic planning, with MultiChoice Group (MultiChoice or the group) now fully operational in its three core segments, namely video entertainment (linear broadcasting and streaming video on demand), interactive entertainment (sports betting and igaming), and fintech (payments, financial services and insurance). Showmax, SuperSportBet and Moment all launched successfully during the year, showing strong initial user traction.

On the back of inflationary pricing across our markets and in a year that included the premiere of Shaka Illembe and four World Cup events, the group was able to deliver positive organic revenue growth of 3% despite the severity of the macro and consumer headwinds impacting the business. The group also outperformed on cost optimisation once again, delivering ZAR1.9bn in cost savings against an initial target of ZAR0.8bn (and a revised target of ZAR1.0bn), and tactically reducing set-top box subsidies by ZAR1.5bn YoY.

As a result of management's timely interventions, the group delivered FY24 segmental profitability in line with its guidance, with margins in South Africa in the mid-twenties range (>26%), Rest of Africa increasing trading profit to ZAR1.3bn (48% YoY growth), Showmax posting trading losses of ZAR2.6bn which came in below the ZAR3.0-4.0bn guided range, and Irdeto delivering a trading margin of 23%.

Volatile and weaker local currencies, power challenges in markets like South Africa, and a weak consumer environment due to rising inflation and high interest rates have created an extremely challenging environment for the group's customers and operating segments. Nonetheless, to navigate the current economic downturn and position the business for future upside, the group will further accelerate its cost saving programme (with a target of ZAR2.0bn for FY25) and reduce capital outlays, prioritise customer retention, leverage popular sports renewals, develop its local content pipeline further and leverage promising traction in its new platforms and services.

Headline figures

Subscriber growth is typically more muted in a year that follows the FIFA World Cup, but FY24 came in below trend as the subscriber base declined YoY in the face of a deteriorating macro and consumer environment. Despite the typical resilience of pay-TV in a downturn, many of our would-be customers cannot afford to consistently pay for our product or choose not to subscribe when power availability is unreliable.

The group has largely focused on its 90-day subscriber metric since listing in order to provide shareholders and market observers with a subscriber metric that looks through the monthly volatility in the subscriber base. However, management is increasingly managing the business on the basis of active subscribers to optimise retention and activity rates from month-to-month in a low growth environment. As a result, the group is focusing and commenting on active subscribers rather than 90-day active subscribers but will continue to disclose both metrics for continuity.

The group's 9% decline in active subscribers was mainly due to a

13% decline in the Rest of Africa business as mass-market customers in countries like Nigeria had to prioritise basic necessities over entertainment, while the South African business showed more resilience with a 5% decline. Showmax, which re-launched in February, is showing encouraging early traction - it delivered record single-month growth in March 2024, with the paying subscriber base growing 16% from the migrated base at relaunch to year-end.

Despite a disciplined approach by the group towards inflation-led pricing, the combination of foreign exchange headwinds and a lower subscriber base resulted in a net decline in group revenues of 5% to ZAR56.0bn (+3% organic). Subscription revenues were 7% lower (+2% organic) and advertising revenues followed a similar trend (-7% reported, +3% organic), both impacted by the weaker naira. Irdeto delivered 17% topline growth, boosted by a weaker ZAR against the USD (+7% organic). The DStv Insurance business maintained strong momentum, with premiums up 35%.

Weaker subscriber trends and foreign exchange pressures flowed through to group trading profit which was down 21% to ZAR7.9bn (+24% organic). The commencement of the Showmax investment cycle reduced the group's trading profit by ZAR1.4bn. Nonetheless, the group was able to generate positive operating leverage on the back of a 3% organic increase in revenues against a 1% organic decrease in operating expenses.

Adjusted core headline earnings, the board's revised measure of the underlying performance of the business which now includes losses on cash remittances after tax and minorities, declined by 20% to ZAR1.3bn as higher realised hedging gains and a narrower gap between the official and parallel naira rates in FY24 relative to the prior year were more than offset by weaker trading profitability.

Despite taking significant steps to control costs and protect cash flows, the increased cash flow investment in Showmax, notably through ZAR1.4bn in additional trading losses and ZAR1.7bn in platform technology advances, and the impact of weaker currencies on profitability resulted in the group's free cash flow declining by 79%

to ZAR589m. Other cash flow movements included a 4% decline in capex due to tighter capital allocation, offset by a 6% increase in finance lease repayments due to foreign exchange, and an 8% increase in cash taxes paid due to a higher top-up payment required in South Africa versus FY23.

The group remitted USD184m from Nigeria during FY24 (FY23: USD132m)

at a weighted average rate of NGN1044:USD (FY23: NGN684:USD). In the process, it incurred remittance losses of USD59m (ZAR1.1bn), compared to USD132m (ZAR2.4bn) in FY23, when there was a greater divergence between the official and parallel exchange rates. The group held USD39m in cash in Nigeria at year-end, down from USD104m at end FY23, a consequence of consistent focus on remitting cash and the impact of translating the balance at the weaker NGN.

Net interest costs increased by ZAR350m to ZAR1.4bn as a result of a higher average debt balance in FY24, following the draw down of the second tranche of the term loan of ZAR4bn in October 2023.

The group's share of equity-accounted losses increased by 23% to ZAR0.6bn. This increase was due to higher net losses in KingMakers, driven by the impact of a weaker NGN and the launch of the SuperSportBet operations in South Africa, and the inclusion of the group's share of equity-accounted losses from Moment, which became operational during FY24.

The group held ZAR7.3bn in cash and cash equivalents at 31 March 2024, and retained access to ZAR4.1bn in undrawn group borrowing facilities. The group's ZAR12.0bn term loan is now fully drawn down, with total group net debt including transponder leases of ZAR16.5bn at the end of the year representing a leverage ratio of 1.53x (FY23: 1.08x) and an interest coverage ratio of 7.95x (FY23: 12.76x).

As at 31 March 2024, the group's hedge position provided cover of around nine months of its USD exposures, at an average forward rate of 18.75.

The group incurred a number of non-cash charges during the year including ZAR4.6bn in losses on the translation of non-quasiinter-group loans between MultiChoice Africa Holdings B.V. and MultiChoice Nigeria Limited, a ZAR1.2bn impairment charge on the group's Technology Modernisation programme, and the recognition of the ZAR2.7bn fair value of the Comcast put option relating to its 30% shareholding in Showmax (estimated in terms of IFRS 9 - Financial instruments). This has left the group with a negative equity balance of ZAR1.1bn at year-end. This has no impact on the liquidity of the group.

Operational Performance Review

General entertainment content (M-Net)

MultiChoice remains the largest producer of original content on the African continent, which is notable at a time when international streamers and broadcasters are slowing down or stopping local content production in our markets to prioritise sustainable streaming economics in their core markets. The group produced in excess of 6 500 hours of local content in FY24, while continuing to license some of the best international content available globally through long-term content partners.

Six years in the making, Shaka Ilembe was the highlight of the year, launching on Mzansi Magic in June 2023 to become Africa's biggest TV series. Filmed entirely on location in South Africa, Shaka Ilembe was created through the skills and contributions of over 8 000 people. The premiere episode attracted over four million views and comfortably

ranked as the year's top-performing show, obtaining an audience share of over 45% in its time slot.

Other developments for the M-Net team during the year included:

• Navigating the US actors' and writers' strikes, which delayed some studio productions, with M-Net leveraging strategic choices, strong selections and precise scheduling to support loyal audiences.
• Strengthening our in-house production department, including post-production services (trailer creation, online and offline editing, final mixing and subtitling), content optimisation, and centralised dubbing services across linear and streaming platforms.
• Airing three successful co-productions on linear, namely Reyka season 2, Devil's Peak and White Lies, which were produced in collaboration with international partners at Fremantle, Canal +, and
  Abacus Distribution and BBC Studios-owned Lookout Point.
• Airing a further three co-productions on our streaming platform, namely Spinners, Original Sin: My Son The Killer, and Catch Me a Killer.
• Adapting the first local version of global hit The Bridge to create a breakout reality success in Die Brug on kykNET, delivering record live and Catch Up audiences from October 2023.
• Launching regionally focused telenovelas for the mid-market such as Umkhokha: The Curse and Gqeberha: The Empire as the multi-award winning The River ended its six-year run, having spawned regional adaptations in Kenya, Angola and Nigeria.
• Introducing fresh talent and engaging mass-market customers with DStv Access's inaugural original telenovela, Sibongile & The Dlaminis.
• Extending the group's focus on local content channels by introducing Maaddii Abol in Ethiopia, Pearl Magic Loko in Uganda and Maningue Magic Kool in Mozambique, while also producing content in Africa's fourth most spoken language, Oromo.
• Delivering captivating unscripted hit series like Mutale Mwanza, Divas & Hustlas and Kampala Crème, as well as scripted series such as Zari, Kuga Munu, Junior Drama Club, Damalie, and 10 Tamanga Street on our East and Southern African group-owned channels.

While the group continues to invest behind its content portfolio, content spend measurement is embedded in all decision-making. This ensures ROI and cost per minute appropriateness and consistency across platforms, efficient windowing strategies, and also supports contract renegotiations and cost savings initiatives. Key management, staffing structures and processes were reviewed and refreshed during the year, while Showmax's content needs are all now catered for centrally

through the new Content Hub, which was formed to optimise resource allocation.

Sports content (SuperSport)

SuperSport's headline broadcasts during the year included the men's Rugby World Cup in France, the men's Cricket World Cup in India, a second world-class SA20 season in South Africa, AFCON, the FIFA Women's World Cup in New Zealand and Australia, as well as the women's Netball World Cup in Cape Town. The latter two events were showcased across DStv and GOtv under the broader flagship "Here for Her" campaign.

The FY24 renewal cycle was a busy one, with several renewals or extensions secured, including the UEFA Champions League, La Liga, SA Rugby, the men's and women's IPL, Tour De France, World Athletics Championships, ICC Cricket tournaments and Indian cricket, the PGA Tour and Open Championship Gold, the US Open tennis and the UFC.

Highlights from SuperSport's packed FY24 production schedule included:

• The broadcasting of 34 490 live events during the year (FY23: 24 899).
• A dramatic series of victories enabled the Springboks to win the Rugby World Cup for the fourth time and set the stage for the Chasing the Sun 2 documentary. The event itself reached more than 8.5m linear viewers on SuperSport channels (+88% vs. 2019) and 0.8m unique users on DStv Stream.
• A semi-final match between Nigeria and South Africa in AFCON, with 3.6m viewers tuning in; the highest on SuperSport to date.
• Cricket World Cup tournament viewership surpassing internal targets, with the 2023 iteration attracting 4.1m viewers, an increase of 47% compared to 2.8m in the 2019 World Cup.
• The SA20 cricket tournament seeing the first ever UHD originated broadcast in Africa, with the SA20's average linear audience up
  23% YoY.
• The 2023 Netball World Cup being successfully delivered by a 120 all-female production crew, as a world first, including in-house training for the eight months leading up to the showpiece.
• The Comrades Marathon showing an 81% increase in its linear audience (OTT +13%), with the event available for viewing across all packs, including DStv Access.
• The successful production and broadcast of the ICC Women's T20 World Cup during 2023, as well as the India 2023/2024 cricket tour to South Africa.

SuperSport Schools more than doubled its registered user base in FY24, up from 375 000 in FY23 to 794 000 by the end March 2024. The fast-growing platform displayed more than 49 000 hours of live programming across 43 different sports codes, 900 school sport festivals and events, more than 1 100 schools, and over 14 500 teams. SuperSport Schools also achieved a major milestone by delivering the first fully automated, AI-produced, live linear television broadcasts for DStv Channel 216 at the Jenny Orchard Invitational Basketball tournament.

On the technical front, the introduction of internet protocol technology (IP 1) to our outside broadcast (OB) vans allowed us to create a cinematic, full-frame, wireless electronic news gathering camera for SA20. A second internet protocol technology OB van (IP 2) was added to SuperSport's fleet in February 2024, with the world-class and UHD-ready OB van completing its first production in April 2024 during a DStv Premiership match between SuperSport United and Polokwane City.

Similarly to the general entertainment business, SuperSport continues its efforts to retain and extend rights to popular sports, while renewing rights deals at competitive but sustainable rates.

South Africa Pay-TV (MultiChoice South Africa)

The South African economy continues to endure severe economic pressure, with consumers under financial distress due to the cost-of- living squeeze from high inflation and interest rates. Consistent loadshedding through FY24 created an environment where customers without backup power were reluctant to subscribe to our service due to the uncertainty of whether they would be able to watch. The net effect was increased pressure on subscriber numbers, activity and viewership, with active subscribers down 5% to 7.6m at year-end.

In terms of subscriber mix, the premium customer tier (which includes the Premium and Compact Plus bouquets) declined by 8%, with the Premium bouquet remaining far more stable than Compact Plus given focused retention efforts and the progression in the Premium base towards a more stable core cohort of subscribers. The Compact base, much like the Compact Plus base, is most exposed to the challenges in

the macro-economic environment with the mid-market customer tier down 9% as a result. Having delivered consistent growth in recent years, the mass market tier declined by 2%, due to pressure in the Family base, as well as the impact of loadshedding and reduced decoder subsidies.

Given the challenging environment, the South African leadership team prioritised customer retention and cash generation during the year through the following initiatives:

• Shifted focus from 90-day active subscribers to active subscribers, with volatility in the base managed more pro-actively and leading to flat YoY ARPU's.
• Reintroduced equated subscribers to emphasise subscriber economics, with open windows used to prompt upgrades.
• Grew the contract base 6% YoY.
• More than halved decoder subsidies (-57% YoY or ZAR0.9bn).
• Drove pricing discipline across all offerings, with the average SA price increases of 5.6% following inflation in order to support ARPUs against weaker subscriber activity and ZAR depreciation.
• Stepped up the focus on piracy together with Irdeto, with targeted investments to reduce revenue leakage and a greater emphasis on public awareness and education.
• Continued the drive towards operational efficiencies to protect margins by removing a further R1.0bn in costs, including content cost savings, ongoing process improvement and vacancy freezes, as well as an overall reduction in discretionary spend.
• Relaunched DStv Stream with a new look and feel and seamless sign-up journey (closing active base up 3x on FY23), launched Extra Stream to support customers (similar in size to DStv Stream at year-end), and drove the uptake of DStv Internet fixed-wireless LTE (active base up almost 2x on FY23).

Although a 3% decline in subscription revenues weighed on the segment's total revenues (-2% to ZAR33.6bn), the above interventions, coupled with flat ARPUs as inflationary pricing offset mix and activity pressures, enabled the group to meet its mid-twenties margin guidance for South Africa with a trading margin of 26.2%.

Advertising

South African TV advertising revenues came under pressure from the impact of weak macro trends on marketing budgets and TV ratings, and ongoing competitive pressures from digital online channels. Despite these challenges and given strong organic growth in advertising sales in the Rest of Africa, the DStv Media Sales team delivered organic growth of 3% by leveraging popular sports events, bringing in new clients to TV via its small and medium enterprise initiatives, and driving uptake of the group's digital and OTT advertising channels and innovative solutions such as dynamic ad insertion. Reported advertising revenues were down 7% given translation headwinds from a weak naira.

Insurance

NMSIS, the group's insurance business, maintained strong growth momentum. Benefiting from a refined go-to-market process for its new products, in-force policies grew by more than 0.5m to 3.3m at year-end. Gross written premiums were up 35%, reaching almost ZAR1bn, while profit after tax increased ~50% YoY to close to ZAR0.3bn. NMSIS launched a device care plan in December 2023, which provides customers with a comprehensive maintenance plan for their full decoder environment, while the group's non-device lines have grown quickly to approach ~30% of the total book at end FY24.

Rest of Africa Pay-TV (MultiChoice Africa)

FY24 presented the toughest set of macro-economic conditions for the Rest of Africa business since 2016. The official and parallel naira exchange rates reached peaks of N1600:1USD and N1900:USD respectively in February 2024, with several other African markets also experiencing extreme foreign exchange depreciation. This resulted in a translation impact for the segment's USD revenues of 32%. High double-digit inflation in many of the group's core markets has led to immense pressure on customer spending power. This, combined with the benefit of the FIFA World Cup and Nigerian elections in the FY23 base, resulted in the active subscriber base falling by 1.2m to 8.1m at end FY24.

Pressure at the bottom end of the market, where subscribers have been most affected by the negative macro conditions, contributed to an improved subscriber mix in FY24, with the premium tier down 9%, the mid-market tier up 13% on the back of focused retention activities and the mass-market down 20%.

Against this challenging backdrop, RoA sought to mitigate the financial impact by supporting ARPUs through:

• Maintaining strict pricing discipline, implementing price increases at or around inflation, including early price increases in Tanzania and Ghana and two price increase in Nigeria to track inflation that exceeded 30%.
• Launching Supa+, a higher-tier GOtv package that includes sport content such as the English Premier League at a higher price point, and Familia Mais (Family Plus) in Angola with a stronger content offering to encourage customer upgrades.
• Launching DStv Stream across all markets, selling through fixed broadband telcos and direct-to-consumer, and GOtv Stream as a supplementary rather than stand-alone service.

As a result of the positive change in the mix and the impact of the business interventions mentioned above, ARPUs improved by 13% on an organic basis. Foreign exchange weakness resulted in a 10% reduction in reported ARPUs. With Rest of Africa revenues up 10% in organic terms, but down 13% on a reported basis to ZAR19.7bn, the segment implemented extraordinary measures to reduce costs and shift focus from subscriber growth to profitability and cash flows in the short term:

• Investment in decoder subsidies was scaled back significantly
  (-46% YoY or ZAR1.3bn), leading to lower volumes but better-quality new customers. The lower investment was due to increasing selling prices on boxes, unbundling satellite dishes from decoders and selling each separately, unbundling content (e.g. one month's "free" subscription) from decoders, and the further renegotiating of decoder prices with suppliers.
• Cost savings of over ZAR400m were driven by content savings in general entertainment, sports, free-to-air and third-party channels, by reducing marketing in markets like Nigeria and Angola, and by delaying non-critical spend and hiring.

These interventions enabled the Rest of Africa business to increase trading profit by 48% YoY to ZAR1.3bn in FY24. In terms of regional operational performance:

• Western: the Nigerian economy and consumers faced persistent challenges through FY24. The removal of fuel subsidies, sharp currency depreciation with the official naira halving in value, inflation climbing to over 30%, and higher emigration of the middle and upper class drove an 18% YoY decline in active subscribers (FY23: +13%), and reduced Nigeria's contribution to Rest of Africa revenues from 44% to 35%. Ghana saw a similar subscriber trend given an inflation rate that is still above 20%.
• Eastern: these markets remain highly competitive, particularly in the DTT segment, where lower end subscribers were most impacted by macro pressure. On the back of macro challenges, active subscribers closed down 7% YoY (FY23: +3%). Ethiopia performed well, while the pressure on the Kenyan shilling, down 17%, necessitated two price increases which brought the total increase for the year to 9%.
• Porto: this region followed a similar trend to Eastern, with active
  subscribers down 8% (FY23: +7%). The Angolan kwanza was under significant pressure, with the average rate 70% weaker and the business having to manage static pricing due to delays in regulatory approval for price increases.
• Southern: reported a 10% decline in active subscribers YoY
  (FY23: +6%). Zimbabwe performed well, whereas Zambia was impacted by high inflation, power shortages, delays in salary payments to government employees and a 20% weakening of the Zambian kwacha which necessitated an additional price increase mid-way through the year.

Sub-Saharan Africa SVOD (Showmax)

FY24 represented a pivotal year for Showmax. Having officially concluded the partnership with Comcast in April 2023, the long-awaited relaunch took place in February 2024. The launch included several notable achievements:

• Launching across 44 markets in sub-Saharan Africa, initially focusing marketing efforts on South Africa and Nigeria, with markets like Kenya and Ethiopia to follow in FY25.

• Transitioning the entire tech stack to Peaco*ck's world-class platform (which is 4K/HDR and ATMOS ready) and customising it for localised requirements e.g. support for low-bandwidth devices and data-saving options and functionality.
• Migrating ~100% of the eligible customer base to the new Showmax platform, with 88% these accounts reactivated in the seven weeks to year-end.
• Closing the Showmax 1.0, Diaspora and Pro offerings with minimal net impact on the year-end base.
• Relaunching the General Entertainment lean back and mobile offerings with a significant ramp-up in local content alongside NBCUniversal's leading international slate.
• Launching the new English Premier League mobile-only package, offering Africa's 250m+ Premier League fans affordable access to
  380 live games annually, plus bespoke content.
• Rebranding and reinvigorating the Showmax brand and logo, with a new app look and feel.
• Finalising local partnerships with leading telcos (e.g. MTN in South Africa), banking and retail partners to support distribution.
• Localising pricing in nine core markets, with compelling new price points across its footprint.
• Delivering a record number of monthly subscriber adds in March 2024, with the base growing by 16% from relaunch to year-end.

Alongside local content from M-Net, Mzansi Magic, Africa Magic and Maisha Magic, Showmax ramped up its local content in FY24, streaming 59 original movies and series in SA, Nigeria, Kenya and Ghana (FY23: 48), of which 14 were released post February 2024 to support the Showmax relaunch. Popular shows that drove up viewership included Tracking Thabo Bester, Koek, The Mommy Club, Youngins, Red Ink, Adulting, Outlaws and Real Housewives of Durban in South Africa, Cheta'm, Real Housewives of Lagos, Dead Serious, Wura and Flawsome in Nigeria, and Single Kiasi and Second Family in Kenya.

Showmax revenues for the year grew by 22% (+22% organic) to ZAR1.0bn, while trading losses increased to ZAR2.6bn. These losses came in below the expected range of ZAR3.0-4.0bn, with some opex and depreciation shifting into FY25 given the February 2024 launch, and FY25 likely to see incremental trading losses on FY24 given a full-year of operational costs. As noted previously, 30% of Showmax's funding needs will be contributed by Comcast group companies.

Technology (Irdeto)

Strong execution enabled Irdeto to grow market share and deliver a 7% organic increase in revenue through external customers across video entertainment, gaming and connected transport, while reported revenues grew by 17% due to the USD to ZAR translation benefit. Disciplined cost management supported a 23% trading margin, despite one-off restructuring costs during the year.

Internal revenues generated from group companies reduced year-on- year primarily because FY23 was marked by higher than usual shipment and subscriber volumes due to the FIFA World Cup. The reduction of decoder subsidies in the linear business during FY24 also had an effect.

Key highlights during the year included:

• Becoming the largest provider of managed security for video services globally for the first time, with a 22% market share compared to 20% and 18% for the next two largest operators (per Omdia).
• Further strategic wins such as a new managed services agreement with Foxtel in Australia.
• Increasing the size of the commercial and residential piracy teams in South Africa, investing in technology solutions to further safeguard DStv Stream content, and improved public awareness through programmes with Partners Against Piracy.
• Consolidating its streaming aggregation platform services under the "Irdeto Experience", which offers a holistic solution to deploy OTT and hybrid video platforms at reduced total cost and time to market.
• Launching Unbotify (focused on behavioural biometric analysis for bot detection in video games using AI) and Watermarking (protecting game builds from leaks by overlaying an invisible watermark to the game pre-release) in its gaming division.
• Shipping its first keyless solutions to leading customers, including one of the largest fleet operators in the US market, resulting in the connected transport division's revenues more than doubling YoY.

Sports betting and interactive entertainment (KingMakers)

Although BetKing Nigeria was negatively impacted by poor macroeconomic conditions, KingMakers delivered a robust performance in terms of organic growth and operational execution. Key performance outcomes in FY24 included the following:

• Drove further growth in the online business in Nigeria, with monthly active online users up 37% YoY and online gross gaming revenues up
  26% YoY in constant currency.
• Delivered organic growth in total gross gaming revenue of 5% YoY, but reported revenue of USD147m, came in 26% lower than FY23 due to the impact of the weaker naira.
• Launched new products into Nigeria, notably BetKing Casino and BetKing FootballGO, a virtual football sportsbook service.
• Delivered positive EBITDA of USD2m, up marginally YoY, with a net loss of USD40m as a result of foreign exchange losses.
• Retained a cash balance of USD113m at end December 2023 (or USD108m at parallel rates).

Following a beta launch in December 2023, KingMakers fully launched the SuperSportBet business in South Africa in January 2024, with the platform experiencing strong user uptake. With SuperPicks and the PlayBook preview show already live in South Africa on SuperSport, we have pushed pre-game shows and live feed integration to leverage the SuperSport platform in driving uptake and engagement on SuperSportBet. SuperSportBet features a fully-fledged sportsbook and casino product suite, as well as virtual and other igaming products. User uptake has been further supported by our official betting partnership with local soccer clubs, Kaizer Chiefs and Orlando Pirates.

Fintech (Moment)

After being founded during FY23, Moment officially launched its operations in FY24. Moment played a vital role in the Showmax relaunch, stepping up to fill a critical payments gap by facilitating payments across a large footprint. Not only did it provide significant bespoke solutions to optimise flows for the Showmax platform, but in January 2024 Moment also began taking on MultiChoice's payment volumes for DStv at scale.

To date, Moment has:

• Started taking local and cross border card payments in 44 Showmax markets.
• Begun processing DStv payments in South Africa, already accounting for >30% of payment volumes.
• Secured critical licenses in South Africa, with licensing underway in other core markets.
• Built an extensive pan-African network that will be enabled for MultiChoice across FY25.
• Joined real-time payment networks in 18 countries, including South Africa, and is currently piloting instant payment and account activation for DStv with beta users.
• Launched completed partnership agreements with MultiChoice Group entities.

MultiChoice, along with other founding backers, contributed to Moment's Seed+ funding round in the group's fourth quarter of FY24. Moment raised an additional USD USD22m of funding in the round which closed in May 2024, with MultiChoice contributing USD8m of the ~USD19m received as of end March 2024. New external participants in the round placed a post-money valuation on the business of USD82m. MultiChoice owned a 29.6% full-diluted stake as at year-end.

Other disclosures

Technology Modernisation programme

The Group has been on a multi-year Technology Modernisation (Tech Mod) programme aimed at upgrading the Group's digital, customer, billing, payments, partnerships and data capabilities. To date, it has successfully developed and implemented four of the six core Tech Mod modules, being an Automated Digital Marketing module to support improved customer value management journeys and automated campaigns, a business Partnership module, a DStv for Business module and a Field Sales and Services module to support improved customer experience and data collection in Rest of Africa.

The Tech Mod programme as a whole has, however, been overtaken by an extremely challenging consumer, macro-economic and foreign exchange rate environment which has necessitated a change in business

requirements. A complete refocus of the business on profitability and cash generation has triggered a major cost and capex review. As part of this process, management have recently conducted an in-depth review of the costs to successfully complete and implement the remainder of the Tech Mod programme against the strategic, operational and financial needs of the group. As the time, costs and management focus to complete the remaining Tech Mod modules was deemed to be too high for the business to absorb in the current environment and, taking into account the functionality of the group's current technology stack and plans to incorporate partner technologies and AI and automation in the business, the group has opted to discontinue the programme.

This decision has resulted in the group booking an impairment charge of R1.2bn in FY24 against the capitalised cost of this project, represented mainly by the cost of project architects, software developers, project managers, software testers, consultants and other project specialists over the project period. The project also has onerous contracts, against which the group has raised a provision of R136m at year-end.

Nigeria non-quasiinter-group loan

The material depreciation of the NGN through the course of FY24 has resulted in an increase in foreign exchange translation losses on the non-quasi equity component of the USD-denominatedinter-group loan between MultiChoice Africa Holdings B.V. and MultiChoice Nigeria Limited. These losses, which are non-cash in nature, amounted to ZAR4.6bn in the consolidated income statement (FY23: ZAR2.4bn).

Nigeria tax settlement

In February 2024, the group announced that it had reached a settlement with the Nigerian Federal Inland Revenue Service (FIRS) in relation to the tax assessments raised in April 2021 on MultiChoice Nigeria Limited (MCN) and in June 2021 on MultiChoice Africa Holdings BV (MAH).

The parties (FIRS, MCN and MAH) concluded a 'without prejudice or precedent' agreement in full and final settlement of all matters in dispute. In terms of the agreement, MCN and MAH agreed to pay a total tax amount of NGN35.4bn (~USD37.3m), to be offset against the security deposits and good faith payments previously made.

Share transactions

During FY24, the group repurchased 5.3m shares in the market worth ZAR482m at an average share price of ~ZAR91 per share. These shares will be allocated for future share incentive awards and will not be cancelled by the group. At the end of March 2024, a total of 1.9m shares at an average price of ~ZAR116 per share remain unallocated for future use.

Subsequent events

Canal+ mandatory offer

The group entered into a Cooperation Agreement with Groupe Canal+ SA (Canal+) in relation to Canal+'s mandatory offer for the group. This followed a ruling by the Takeover Regulation Panel (TRP) of South Africa, which required Canal+ to pursue a mandatory offer after it acquired an interest of more than 35% in MultiChoice Group.

In relation to the mandatory offer:

• Canal+ submitted an offer of R125 per share in cash (an earlier non-binding intention to offer of R105 was rejected).
• MultiChoice Group constituted an independent board of directors, which appointed The Standard Bank of South Africa Limited as an independent expert (IE) to review the terms of the offer and express a "fair and reasonable" opinion as required by the Takeover
  Regulations. The opinions are contained in the Combined Offer Circular mentioned below.
• Following the posting of a Firm Intention Announcement (FIA) on
  8 April 2024, the Combined Offer Circular was distributed on 4 June 2024. In the intervening period, Canal+ increased its shareholding in the group from 35.01% to 45.20%.

Dividend

In view of the group's commitments under the Cooperation Agreement with Canal+, as published in the Combined Offer Circular on 4 June 2024, the question of a dividend declaration does not arise for FY24.

Outlook

The group has acted quickly to optimally position the business to weather the foreign exchange crisis that has developed across its core markets, while simultaneously ensuring that its long-term strategic initiatives are not compromised. In the short term, the group has prioritised cash generation over growth.

Given ongoing uncertainty around economic recovery across the globe and the group's operating footprint and the opportunity to further "right-size" the business for a changing consumer environment, the group has accelerated its a multi-year cost reduction programme with the target for FY25 increased to ZAR2bn. These targets have been embedded in the group's budgets and within the personal objectives of key executives to drive delivery.

The group will also continue its efforts to drive growth in focused areas, notably Showmax, Moment, SuperSportBet, DStv Insurance, DStv Internet and DStv Stream, while working hard to retain its DStv and GOtv customers and support their activity rates through FY25.

Directorate

The group appointed two new directors to the board during FY24, with their elections approved by shareholders at the group's 2023 AGM. Andrea Zappia and Debbie Klein bring deep international pay-TV and SVOD experience to the board, and their appointments are in line with the nomination committee's strategy to continually refresh the board and ensure that it has the requisite experience and diversity of skills and thinking to support the business in a rapidly changing video entertainment environment. Their contributions to both the MultiChoice Group and Showmax boards since joining have been invaluable.

The group also announced in September 2023 that its chairman at the time, Imtiaz Patel, would be stepping down from his role in April 2024. Elias Masilela succeeded Imtiaz as chairman with effect from 23 April 2024. Imtiaz will continue to provide support and advice to the board and the group executive team through a consulting agreement to ensure that the group does not lose out on his expertise and experience. The Board thanks Mr Patel for his extraordinary service and sacrifices during his tenure as Chair and wishes Mr Masilela every success in his new role.

Corporate social responsibility

As a level 1 B-BBEE rated business, the group continues to play its role as a responsible corporate citizen. ESG targets have formally been included in long-term incentives for management to heighten the focus on sustainability and governance in the group. These objectives include external measures, as well as targets where the group can use its platform to make a real difference on the African continent. These targets include supporting the local broadcasting industry, development of woman's and schools' sports and supporting global initiatives in Africa such as the Earthshot Prize.

The group continues to provide investment into the MultiChoice Innovation Fund to support local entrepreneurs, and into the Sports Development Trust, which largely invests in sporting infrastructure in disadvantaged areas. FY24 saw further investment of ZAR267m (FY23: ZAR209m) into the two trusts.

Preparation of the summary consolidated financial statements

The preparation of the summary consolidated financial statements was supervised by the group's chief financial officer, Mr Tim Jacobs CA(SA).

The group operates in 50 countries in sub-Saharan Africa through MultiChoice (excluding markets outside of Africa through Irdeto's global presence), resulting in significant exposure to foreign exchange volatility (largely due to revenues earned in local African currencies against a meaningful proportion of the cost base being US dollar denominated). This can have a material impact on reported revenue and trading profit metrics, as well as core headline earnings given the group's hedging activities, and adjusted core headline earnings given losses on cash remittances in the Nigerian market.

Where relevant in this report, amounts and percentages have been adjusted for the effects of foreign currency to better reflect underlying trends and sustainable operational performance. These adjustments (non-International Financial Reporting Standards (IFRS) performance measures) are quoted in brackets as organic, after the equivalent

metrics reported under IFRS (organic results also exclude acquisitions and disposals when applicable). A reconciliation of additional non-IFRS performance measures (certain revenue, cost and trading profit metrics in constant currency, excluding the effects of changes in the composition of the group and excluding the impact of non-recurring and/or non-operational items from the group's sustainable operational performance, core headline earnings and adjusted core headline earnings and free cash flow, together with certain measures used in the calculation of debt and operating leverage ratios, being net debt, EBITDA, revenue YoY organic % change and operating expenses YoY organic % change) to the equivalent IFRS metrics is provided in note 14 of these summary consolidated financial statements. These non-IFRS performance measures constitute pro forma financial information in terms of the JSE Limited Listings Requirements.

The group's external auditor has not reviewed or reported on forecasts included in the summary consolidated financial statements. The audit report of the group's external auditor is included on page 23 and the reasonable assurance reports on non-IFRS measures are included on pages 27 and 29. The auditor's report does not necessarily report on all the information contained in the summary consolidated financial statements. Shareholders are therefore advised that, in order to obtain a full understanding of the nature of the auditor's engagement, they should obtain a copy of the auditor's report together with the full consolidated annual financial statements, available on the group's website at http://www.investors.multichoice.com/annual-results and at its registered office.

On behalf of the board