INTEGRATED ANNUAL REPORT FOR MULTICHOICE SOUTH AFRICA HOLDINGS (PTY) LTD AND PHUTHUMA NATHI INVESTMENTS (RF) LTD

LEADERSHIP AND STRATEGY REVIEW BY THE CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO) Overview South Africa is and continues to be an attractive market within the MultiChoice group. DStv is a household name, and the considerable support we enjoy from our customers ensures that we retain a solid market position. Despite tough economic conditions and an uncertain political climate, we achieved growth of more than half a million subscribers and now serve 7.4m (FY2018: 6.9m) households in the country. Performance We achieved sustained growth in the mass market, while growth in the compact market was more subdued. The premium market saw a decline in subscribers for the year. The average revenue per user (ARPU) declined from R335 to R322 due to the impact of absorbing a value-added tax (VAT) increase, from 14% to 15%, and the continued subscriber mix change to the mass market. However, improved retention management and cost control contributed to sustained profitability. Trading profit is comparable with the prior reporting year at R10.3bn (FY2018: R10.4bn). We remain focused on optimising cost structures to maintain our margins. Free cash flow was R7.3bn. This represents a R900m increase compared with the prior year. Capital investments increased to R1.7bn (FY2018: R1.46bn). MultiChoice South Africa’s total tax contribution in FY2019 amounted to R6.9bn (direct R2.8bn and indirect R4.1bn), making us one of the largest taxpayers in South Africa. Product enhancements We continue to enhance our product offering to deliver the best customer experiences. During FY2019, we refined our bouquet structure to ensure we can serve different market segments, and match price and value propositions accurately. We repositioned and expanded our family offering to include new general entertainment and selected sport at that bouquet level. Our customers are the cornerstone of our business. We are committed to delivering exceptional experiences at every touchpoint Tim Jacobs Chief financial officer Calvo Mawela Chief executive officer 22  MultiChoice South Africa Holdings Proprietary Limited integrated annual report 2019