Understanding Phuthuma Nathi Letter from the Phuthuma Nathi chair Dear shareholder On behalf of the Phuthuma Nathi board, I feel privileged to once again report back to our Phuthuma Nathi share scheme shareholders through our FY23 integrated annual report. I like to take the time to remind our readers each year that we have 76 961 black shareholders in the Phuthuma Nathi scheme (2022: 78 515), with the scheme holding a 25% direct investment in MultiChoice SA. This means that the individuals, stokvels and black-owned companies in our Phuthuma Nathi share scheme own an indirect investment in MultiChoice SA through a holding structure that is ef cient and cost effective. On page 14, we update our historic return on investment summary so that you can better understand how to think about your returns on your Phuthuma Nathi shares. As you may have heard elsewhere, past performance is no guarantee of future performance, meaning that just because our scheme has done exceptionally well for shareholders over time, does not mean that it will necessarily continue to do so. But we sincerely hope to continue to deliver great value for our shareholders, as does the MultiChoice SA organisation. MultiChoice SA has paid a total amount of ZAR16.4bn in dividends since Phuthuma Nathi’s inception. An investor in the Phuthuma Nathi 1 scheme would have earned around 33% annual return on their initial investment, with roughly 17% of that coming from capital growth and the remainder from dividend payments. MultiChoice SA has managed to retain its dividend, albeit at a slightly lower level which reЄects t˛e ˨nfort˨nate realitˬ ˆo˨t˛ ʴfrican businesses and citizens fin˗ o˨rsel˩es inʡ The year in review Our integrated annual report unpacks the MultiChoice SA operational performance for FY23 on page 54 and the nancial performance on page 65. In short, the MultiChoice SA team has done exceptionally well to steer the ship through an increasingly challenging economic and consumer environment. We all know how tough it has become for South Africans in recent years and these underlying issues were compounded in the current year by the severe and sustained escalation in loadshedding. Our country is in crisis and it has unfortunately started to negatively impact MultiChoice SA. MultiChoice SA was able to sustain subscriber growth in FY23, with the 90-day active subscriber base growing by 3% YoY. However, subscription revenues were down 4% over the same period due to deteriorating subscriber activity and reconnection rates as a direct result of loadshedding and economic pressure on customers affecting their ability to afford pay-tv services. Overall, MultiChoice SA revenues were also down 3% as growth in advertising revenues normalised this year. Although MultiChoice SA continued to work hard to manage its cost base to offset revenue pressure, its trading margins and free cash ows came under some pressure. Despite these challenges, MultiChoice SA still managed to declare a dividend, albeit at a slightly lower level. If you exchanged a portion of your Phuthuma Nathi shares for MultiChoice Group shares in FY20, or have bought MultiChoice Group shares directly through the JSE and would like to better understand more about the broader group’s performance, I recommend visiting the MultiChoice Group website for its full integrated annual report and other nancial reporting information. www.investors.multichoice.com/ reporting-and-results-overview Phuthuma Nathi Investments (RF) Limited Integrated annual report 2023 8
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