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SABC Parliamentar Y Presentation SABC Parliamentar y Presentation May 2011 Chairperson’s Opening Statement Although challenging, the past fiscal has seen the enterprise attain major achievements for the SABC Board Stability • Approved Corporate Calendar • Approval of Corporate Plan • Commenced with recruitment procedures for Executives: o GCEO o Internal Audit o Human Capital Services o Commercial Enterprises o Head of Marketing SABC Parliamentary Presentation May 2011 2 Chairperson’s Opening Statement Governance • All risk policies in place • High level of compliance with Government Guarantee (GG) requirements • Strong response to AG Report • Corporate plan and performance contracts for executives complying with Government requirements in terms of policies • Audit of performance has commenced • SABC Annual report (FY09/10) completed and submitted in time, with no audit qualifications • Corporate Plan (FY11‐14) completed according to AG specification and submitted on time • Shareholder Compact (FY10/11) completed and submitted to DoC SABC Parliamentary Presentation May 2011 3 Chairperson’s Opening Statement Financial • Revenue o Revenue has grown by R1.2b over the past three years, translating to 26% growth • Expenses o Expenses have increased by R506m over the past three years, translating to 9% increase. The percentage expense increase is significantly lower compared to the percentage growth in revenue • Cash position for the past three years o Cash and cash equivalents have increased by R624m for the past three years translating to 4 249% SABC Parliamentary Presentation May 2011 4 Chairperson’s Opening Statement Financial • Profit & Loss o Net Losses have decreased by R705m over the past three years translating to 78% operational improvement. o The projected profit increase for the next three years, from 2011 ‐ 2014 is R294m, translating into 96% growth. 5 Chairperson’s Opening Statement Strategic Goals Achieved: • Turnaround Strategy approved and well on its way in implementation • Improved financial position of the enterprise • Plan of action established to address the recommendations contained in the AG Report • The Board has adopted a set of Corporate Pillars that informs the SABC’s Strategic Focus areas and operational plans • Revised operating model and structure developed and being considered by the Board • Performance contracts signed with all Executives for the 2012 fiscal SABC Parliamentary Presentation May 2011 6 Chairperson’s Opening Statement Strategic Goals Achieved: • Full risk management policies and strategies completed • More stable labour relations with good communication channels established • Digital media division established • DTT infrastructure rollout approved • Increased coverage to SABC services through the activation of low power transmitters . Some of the areas to have recently benefited from this mandated SABC project, include: Philippolis and Villiers in the Free State Province, Indermark in the Limpopo Province and Genadendal in the Western Cape SABC Parliamentary Presentation May 2011 7 Chairperson’s Opening Statement Stakeholders • Briefing to all political parties on Local Government Elections has been completed • Consultations with The Ministry of Sport & Recreation and the Portfolio Committee on Sport as well as engagement with sporting bodies on the development of a new sport strategy for the SABC • Commercial relationships stabilised • International content suppliers relationships stabilised • Local content relationships improving • Re‐commissons have been taking place • New RFP Book is being finalised and will be fully funded • Residual payments to artists are being finalised • Residual payments to RISA, NORM and SARREL have been agreed, pending final arbitration SABC Parliamentary Presentation May 2011 8 Chairperson’s Opening Statement Broadcasting Successes •FIFA 2010 Soccer World Cup •Delivery on language and local content mandate •Celebration of 150 years of the arrival of Indians to South Africa •India/South Africa cricket tournament •Cricket World Cup •Commenced coverage of Local Government Election campaign period •Re‐launched digital media platforms •SABC is also an award winning broadcaster, collecting the most awards at the 2010 SAFTA Awards as well receiving a number of international awards SABC Parliamentary Presentation May 2011 9 SABC Programming Delivering on Developmental State Objectives Developmental SABC Content Theme Programming Imperatives Economic/Social Policy Programming that showcases the social agendas facing our • Kumbula’ekhaya and Public Service society and tries to address some of the challenges • News & Current Affairs Delivery encountered therein. Also highlighting the progress made • Shift on delivery of public services as well as the challenges still • One Day Leader facing our economy • Special Assignment Through expansion of the transmitter network citizens previously without broadcast services will gain services and therefore information Creating Economic Skills development, with a particular focus on skills that will • Hip 2b2 Growthand Job Creation aid the growth of South Africa and its citizens such as • Ispani Science and Technology • Matrics Uploaded • Ek Se La Le La Reducing Poverty Levels Through educational programming focused on Public, • Living Land Formal and Early Childhood development; as well as • Mother of all Professions information knowledge building, citizens are provided with • Shift content that informs, educates and entertains. Delivery • Make Your Move thereof is on television, radio, internet and outreach • La Familiar • Public Service Announcements SABC Parliamentary Presentation May 2011 10 SABC Programming Delivering on Developmental State Objectives Developmental SABC Content Theme Programming Imperatives Spurring Rural Provision of programming that focuses on the • Illitha Lethi Development and developmental challenges facing rural communities, as well • The Fallen Reform as assisting these communities on the up liftment of their • La Familiar lives and those of their communities • Moferefere Lenyalong • Walala Wasala • Public Service Announcements Improving Health Sector Driving awareness of health issues beyond HIV & Aids. • Shift Focused on both prevention, cure and management as well • Teen Convictions as prompting healthy living lifestyles • Soul City • Addictions • Tshisa • Sport Programming Improving Education Provision of educational support through broadcasting as • Matrics Uploaded Sector well as provision of education support material at an • Open University outreach level • In Debt Crime Highlighting the social challenges plaguing our communities • Streets of Mamguang which result in crime as well as the justice services offered • Sokhulu & Partners aimed at reducing and prosecuting those responsible • Solving It • 90 Plein Street • Democracy Game Shop • Public Service Announcements SABC Parliamentary Presentation May 2011 11 Agenda 1 Financial Overview 2 Turnaround Strategy 3 Business Review 4 Governance Review 5 Enterprise Strategy SABC Parliamentary Presentation May 2011 Year End Forecast ‐ 31 March 2011 14 SABC Ltd, Income Statement 2011/12 Detailed Explanation and Analysis between the GG targets and the FY GG Budget Variance % change 2011-2012 Financial Budget R'000 R'000 R'000 Revenue Advertising Revenue 4,563,048 4,233,210 329,838 -7.8% The budget compiled by the Group Sales and Marketing Team indicates the following: The Advertising market is soft due to the challenges being posed by the Multi Media Platform, the advent of the Internet and Mobi advertising. The impact of these new entrants has lead to the market fragmentation, has and continues to affect the SABC negatively.The compilation of the advertising revenue targets by the interim board did not consider these challenges. Sponsorship Revenue 828,362 655,003 173,359 -26.5% The compilation of the Sponsorship targets is incorrect. The targest that were compiled in 2009 by the Interim Board inflated the growth in this sector of revenue and double counted the increase by R70m Trade Exchange 104,000 235,755 -131,755 55.9% TV Licence fees 968,000 909,334 58,666 -6.5% The compilation of the TV Licence revenue by the Interim Board assumed an increase in TV Licence. However the draft PSB Bill indicated that the TV Licence will be abolished. The SABC did not make the request for the increase to the Shareholder due to this. As the PSB Bill is still under consideration by the Shareholder, the SABC will be submitting a request for the TV Licence increase. The R59m is the impact of the non-increase for the last 2 years. Government Grants 191,000 135,194 55,806 -41.3% No additional government grant funding obtained Other Revenue 132,000 -76,412 208,412 272.7% Content & Commercial Explo 0 89,000 -89,000 100.0% Total Revenue & Other Income 6,786,410 6,181,084 605,326 -9.8% 16 Expenses Employee Compensation & Benefits -1,422,000 -1,606,001 184,001 11.5% Current budget based on reduction of headcount and conversion to Cost to Company packages but also accommodates filling key vacancies. The current total costs of employee benefits is made up as follows: The GG targets: R1.5 billion less R122m (being the reduction strategy currently being implemented plus the new vacancies requested by the business of R108m. The employee cost also include the impact of the Post Retirement Medical Aid and the impact of the Pension Fund Actuarial losses/ (gains) which the GG targets did not take into account. 28.0% The value of these employee benefits is R47m Amort. & Imp. Prog, Film, & Sports -36.9% -2,008,000
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