Historic STI incentive outcomes The table below provides a summary of performance against targets over the past few years, as well as an explanation of circumstances relating to FY23. Historic STI stretch awards FY20 FY21 FY22 FY23 Revenue ■ ■ ■ ■ Core headline earnings ■ ■ ■ ■ Free cash ow ■ ■ ■ ■ Subscriber growth South Africa ■ ■ ■ ■ Subscriber growth Rest of Africa ■ ■ ■ ■ Showmax user base growth ■ ■ ■ ■ Insurance policy growth N/A N/A N/A ■ ■ Missed threshold ■ Hit threshold ■ Hit target ■Hit stretch FY23 context: • Target setting: FY23 budgets were set as the world exited the COVID-19 pandemic and although the economic environment was uncertain, improvements in trading conditions were expected when setting targets. This did not prove to be the case and the impact of permanent high stages of loadshedding in South Africa (and in other southern Africa markets intermittently), elevated in ation levels and rising interest rates created a strained economic environment for the group to operate in. • Outcomes: Notwithstanding this material adverse environment versus target assumptions, the group performed well operationally during FY23, exceeding 90-day subscriber targets in South Africa and the Rest of Africa. This was supported by solid growth from the FIFA World Cup and continued success of the group’s local content portfolio. Showmax paying user growth did not meet target levels, in uenced by the weaker SA environment and executive management spending a signi cant portion of their time on the Comcast, NBCUniversal and Sky partnership announced in March 2023. The Insurance business continued to grow in new and traditional products and met their stretch target. This operational performance, together with annual price increases and the ZAR translation bene t on USD segments, resulted in the stretch target being met on revenue growth. Despite this revenue bene t, core headline earnings was only met at threshold due to weaker SA margins and an increased investment in Showmax. Free cash ow fell well short of the FY23 target on the back of lower trading pro t and a higher working capital investment. This investment comprised sports rights renewals prepayments and early supplier payments due to a signi cant nancial system upgrade that went live on 1 April 2023. 1 Background continued Corporate governance review Phuthuma Nathi Investments (RF) Limited Integrated annual report 2023 102 Remuneration report continued
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