Nutun Limited · JSE:NTU
Nutun — Transaction Capital — H1 2023 Earnings Presentation
63 slides from Nutun's earnings presentation, 2023
Slide 1: Transaction Capital
Transaction Capital SS
Slide 2: Contents
Contents 1 Performance overview Slide 03 2 Nutun Slide 15 3 WeBuyCars Slide 23 4 Gomo Slide 29 5 SA Taxi Slide 32 6 Conclusion Slide 38 presentation 7 Appendix Slide 40 for the half year ended 31 March 2023
Slide 3: Performance overview
01 Performance overview Results for the half year ended 31 March 2023
Slide 4: Transaction Capital group structure
Transaction Capital group structure Strategic transformation has taken the group into new related segments & significantly expanded addressable market 100%¹ 74.2% Combines its unique WeBuyCars is a trusted Mobalyz houses our credit, technology, data & analytics principal trader of used insurance & f
Slide 5: Operating context
Per for m anc e ov er v i ew Operating context Business models well positioned in relation to structural elements in local & global environment Personal vehicles Consumer environment Shifts in SA used vehicle market in last 6 months ◉ SA unemployment rate remains elevated ◉ Recovery in new vehicle s
Slide 6: Nutun performance overview
Per for m anc e ov er v i ew Nutun performance overview Positive momentum in strategic growth initiatives capturing emerging opportunities Strong momentum in advancing diversification of revenue streams Accelerating historical growth trajectory Revenue contribution highlights: ◉ Capital-light CX rev
Slide 7: WeBuyCars performance overview
Per for m anc e ov er v i ew WeBuyCars performance overview Continues to disrupt used vehicle market through innovative mobility products Leading private commuter mobility platform in SA Continued increase in F&I penetration | Consumer sales growth | Lower dealership sales ◉ Market share growth stra
Slide 8: SA Taxi performance overview
Per for m anc e ov er v i ew SA Taxi performance overview Lower than expected earnings resulting from shifts in minibus taxi operating environment Factors impacting minibus taxi industry over past 3-years ◉ Improbable/unpredictable black swan events Expected recovery of industry has not materialised
Slide 9: SA Taxi performance overview: restructure of business model
Per for m anc e ov er v i ew SA Taxi performance overview Restructure of SA Taxi business model | Rebasing for future growth Recalibrating business | Rebasing for future growth TOTAL MARKET Finance market contracted Action Outcome Progress Environmental pressures È minibus ~250 000 taxi profitabilit
Slide 10: Group performance overview
Per for m anc e ov er v i ew Group performance overview Core earnings from continuing operations Core earnings per share from continuing operations attributable to the group1 attributable to the group1 HY2023 È È HY2023 HY2022 restated HY2023 HY2022 restated Return on equity² 46% 48% R353 million R6
Slide 11: Key performance drivers
Per for m anc e ov er v i ew Key performance drivers Business models remain relevant & resilient despite impact of prevailing macroeconomic headwinds Strong earnings growth Continues to gain market share Rebasing for growth R1.9 billion R631 million 71 928 71 020 R17.1 billion 9.0% Revenue1 Cost pri
Slide 12: Group portfolio mix
Per for m anc e ov er v i ew Group portfolio mix Earnings diversification shifting towards capital light revenues Composition of earnings attributable to Transaction Capital 49% 11% 43% 25% 33% 45% SA Taxi Nutun 2023 2022 2021 WeBuyCars GEO 1% 40% 24% 29% Total earnings | HY2023 Earnings attributabl
Slide 13: Balance sheet funding & liquidity
Per for m anc e ov er v i ew Balance sheet funding & liquidity 1. Continued support from debt funders required to sustain SA Taxi’s ongoing Diversification by funding structure, instrument & geography lending operations ◉ Existing facilities remain available | New facilities under negotiation ◉ Debt
Slide 14: Group's ESEG performance update
Per for m anc e ov er v i ew Group's ESEG performance update Continued progress in embedding ESE in organisational culture Group highlights ◉ Facilitated the rehabilitation & education of 113 000 debtors (both consumers & SMEs) valued at R228 million, facilitating their ◉ Hosted first ESEG investor
Slide 15: Nutun
02 Nutun Results for the half year ended 31 March 2023
Slide 16: Environment & market context
N utun Environment & market context Global digital business services | Structural elements support industry relevance & growth 3 shifts reshaping the digital global Structural elements support the services landscape SA a preferred destination for outsourced services4 outsourced services industry in
Slide 17: Environment & market context | Collection services in SA
N utun Environment & market context | Collection services in SA Consumer sector remains strained | Structural elements support industry relevance & growth in SA ~24% ~40 million ~27 million Credit active consumers² 1 3 in Consumers non-performing2 of credit-active consumers are Adults¹ in SA ~36.1%
Slide 18: Nutun market positioning | Diversified business model
N utun Nutun market positioning | Diversified business model Diversified by service, geography, sector, client & mandate Suite of digital business CX Services CE Services services as trusted partner 41% Specialised to global client base Specialised Retail 56% 43% lending 10% Retail lending CE Servic
Slide 19: Nutun market positioning | Diversified business model
N utun Nutun market positioning | Diversified business model Expanded total addressable market | Diversified by service, geography, sector, client & mandate RETAIL & E-COMMERCE UTILITIES SPECIALISED LENDING TIER 1 BANKING 7 SECTORS PUBLIC SECTOR INSURANCE TELCOS 19
Slide 20: Nutun financial performance
N utun Nutun financial performance Strong financial performance | Growth rate exceeding historical levels Core earnings2 ◉ Ç 26% to R208m (HY2022: R165m) ◉ TC’s attributable portion Ç 15% to R189m (HY2022: R164m) 75.9 Revenue3 Ç 50% to R1.9bn (HY2022: R1.3bn) 69.1 ◉ Foreign currency contribution Ç t
Slide 21: CE Services | Acquisition of NPL portfolios as principal
N utun CE Services | Acquisition of NPL portfolios as principal Growth trajectory to support future positive performance Collection multiple vintage performance1 as at 31 March 2023 7 429 6 876 2019 1.3 0,8 2.1 R 404m 5 883 book debts acquired (Rm) 2020 1.2 1,3 2.5 R 483m Cost price of purchased Ran
Slide 22: Nutun strategic priorities
N utun Nutun strategic priorities Global digital business services offers distinct avenues for growth Leverage South African ZAR denominated resources, data, technology & analytical capabilities to drive local & global growth, across customer lifecycle in various sectors Customer experience manageme
Slide 23: WeBuyCars
03 WeBuyCars Results for the half year ended 31 March 2023
Slide 24: Used vehicle market context & environment
W eBuyC ar s Used vehicle market context & environment New vehicle sales recovered to pre COVID-19 levels | High demand for affordable used vehicles SA’s vehicle parc1 is Ç despite new vehicle sales È over last 10 years Shift from new to used vehicles ~11.1 million vehicles1 > Vehicle parc growth, r
Slide 25: Used vehicle market context & environment
W eBuyC ar s Used vehicle market context & environment Structural market conditions support resilience of used vehicle industry Structural elements supporting used Vehicle prices in SA vehicle sector remain positive VEHICLE PRICING INDEX (VPI) & CONSUMER PRICE INDEX (CPI)1 ◉ 23% of households use pe
Slide 26: WeBuyCars operational performance
W eBuyC ar s WeBuyCars operational performance Continue to gain market share | Margin pressure | Reduction in ASP1 CAGR HY2021 – HY2023: ASP1 per vehicle È 2% Vehicles bought Ç 29% Vehicles sold Ç 31% ◉ Agile business model & quick stock turn allowed rapid response to market change Vehicle bays Ç 48
Slide 27: WeBuyCars financial performance
W eBuyC ar s WeBuyCars financial performance Margin pressure in HY2023 impacted performance | Positioned to deliver stronger results in HY2023 CAGR HY2021 – HY2023: Core earnings1 È 22% to R316m (HY2022: R406m) Core earnings1 Ç 11% EBITDA Ç 20% Core earnings1 attributable to the group È 22% to R234m
Slide 28: WeBuyCars strategic growth priorities
W eBuyC ar s WeBuyCars strategic growth priorities Strategic positioning & initiatives continue to yield positive results Ç Market share through geographical expansion, e-commerce, brand awareness & technology enhancements Grow into existing infrastructure ◉ Ç Operational efficiencies & Ç sales volu
Slide 29: Gomo
04 Gomo Results for the half year ended 31 March 2023
Slide 30: Used vehicle market context & environment
Gom o Used vehicle market context & environment Strong growth in number of used vehicles sold & financed Structural shift to finance older used vehicles4 Vehicle sales in SA Ç 9+ years 31% New vehicles1 Used vehicles1 0-2 years 35% Ç13% 0 -2 years 7% 44% financed 2 39% financed 3 Ç 13% Y-o-Y finance
Slide 31: Gomo market positioning
Gom o Gomo market positioning Aims to disrupt & capture market share in under-penetrated used vehicle F&I sector Gomo mobility solutions R454 million 2 230 72 months Gross loans Number of loans Average loan term & advances on book at origination HY2022: R35 million HY2022: 142 HY2022: 71 ~R204 000 9
Slide 32: SA Taxi
05 SA Taxi Results for the half year ended 31 March 2023
Slide 33: Environment & market context
SA T ax i Environment & market context Structural elements support minibus taxi industry resilience Minibus taxi is the largest & most vital mode of transport within integrated public transport network Minibus taxi Ç >16% since 2013¹ PUBLIC 84% ◉ Preferred form of transport due to accessibility & fl
Slide 34: Environment & market context
SA T ax i Environment & market context Minibus taxi industry is indispensable to economic activity | Macroeconomic environment & lower commuter mobility impacting industry profitability Vehicle prices SA Taxi’s interest rates6 Fuel prices including fuel levies Commuter mobility R544 700 Fuel prices
Slide 35: Vehicle mobility analytics applied to manage credit & insurance risk
SA T ax i Vehicle mobility analytics applied to manage credit & insurance risk Minibus taxi industry is indispensable to SA’s productivity but environment & lower commuter mobility impacting industry profitability Lockdown Lockdown levels in 2020 Risk-adjusted lockdown levels in 2021 levels in 2022
Slide 36: SA Taxi financial performance
SA T ax i SA Taxi financial performance Operating metrics remain under pressure given taxi industry affordability constraints 51.2 Core earnings2 ◉ È 77% to R63m (HY2022: R275m) ◉ TC’s attributable portion È 77% to R52m (HY2022: R226m) 38.1 34.2 10.2 Net interest margin at 9% (HY2022: 11.8%) 11.9 11
Slide 37: SA Taxi credit performance
SA T ax i SA Taxi credit performance Focus on improving credit quality at origination & managing performance on existing loan book Gross loans & advances Ç 10% to R17.1bn ◉ Toyota vehicle prices Ç ~6% R13.2bn R15.6bn R17.1bn ◉ Number of loans originated È 26% | Value È 23% 16.3 • Preserving credit q
Slide 38: Conclusion
06 Conclusion Results for the half year ended 31 March 2023
Slide 39: Key take-aways
C oncl usi on Key take-aways Divisions positioned to Margin pressure experienced in Balance sheet benefit from structural HY2023 reflected in earnings È socio-economic realities Balance sheet remains Should be considered against high sufficiently capitalised Delivering good commercial comparator bas
Slide 40: Appendix
07 Appendix Results for the half year ended 31 March 2023
Slide 41: Appendix contents
Contents 1 Capital management Slide 42 2 Nutun Slide 45 3 WeBuyCars Slide 48 4 SA Taxi Slide 54 Appendix 5 Glossary Slide 60 Results for the half year ended 31 March 2023
Slide 42: Diversified debt funding strategy
Appendi x Diversified debt funding strategy Diversification by funding structure, instrument & geography Diversification by debt investor category & capital pool 11% 22% 24% 12% Warehousing facilities 37% On-balance sheet & syndicated 30% Securitisation & pass-through Institutional investors 8% Priv
Slide 43: Diversified debt funding strategy | TC group overview
Appendi x Diversified debt funding strategy | TC group overview Entity WeBuyCars (all entities which make up the GEO) HY2023 balance R2 billion R4.4 billion R1.6 billion R0.4 billion outstanding 52% mortgage finance Composition ~8% ~18% ~6% ~2% Debt investors 13 debt investors % Holding 12 debt inve
Slide 44: Diversified debt funding strategy | SA Taxi
Appendi x Diversified debt funding strategy | SA Taxi Debt structure Pass through structures Warehousing facilities Private structured finance Traditional corporate funding HY2023 balance SATIF SATDF/SATS outstanding R5.4 billion R2.7 billion R0.6 billion R2.3 billion R4.9 billion Composition ~34% ~
Slide 45: Nutun
APPENDIX Nutun Results for the half year ended 31 March 2023
Slide 46: Global digital business services | Major international peers
Appendi x Global digital business services | Major international peers Combines unique technology, data & analytics to provide broader range of digitally enabled business services as trusted partner to global client base USA Revenue Concentrix $6.3bn Sitel $4.0bn Europe Revenue TTEC $2.4bn Accenture
Slide 47: Unique technology, data & analytics competencies
Appendi x Unique technology, data & analytics competencies Enabling intelligent digital business services Master Data Universe (MDU) - Distribution of monthly collections per enriched data on employment risk segment¹ each individual Master Data Universe 45% 1% Other Data is current, >12 million >15
Slide 48: WeBuyCars
APPENDIX WeBuyCars Results for the half year ended 31 March 2023
Slide 49: WeBuyCars | market positioning
Appendi x WeBuyCars | market positioning Competitive advantages Proprietary data Well-known, reputable & trusted brand ◉ Leveraging ~20 years of vehicle, price, consumer ◉ In industry where trust & customer satisfaction has been low & other data with AI & machine learning ◉ Effective advertising cam
Slide 50: Used vehicle market context & environment
Appendi x Used vehicle market context & environment Used vehicle industry is large & highly fragmented, with various operating models Dealer | Groups vs Independent ◉ Stockholders with inventory on balance sheet private commuter private commuter ◉ >3 000 dealers (~2 100 franchised) Stockholder ◉ Dea
Slide 51: Global listed peers
Appendi x Global listed peers WeBuyCars business model unique in SA with comparable international peers Europe 2022 Asia Pacific 2021 Revenue Vehicles sold Revenue Vehicles sold (US$) (‘000) (US$) (‘000) P 6.0bn2 650 F 254m5 1.5 1 M 3.4bn 2 231 F 8.1bn2 n/a E 1.0bn3 65 South Africa 2022 Revenue Vehi
Slide 52: WeBuyCars stacks up well against comparable international peers
Appendi x WeBuyCars stacks up well against comparable international peers Profitability surpasses comparable peers, supported by efficient inventory management & effective advertising spend E-commerce & physical E-commerce & physical E-commerce & physical Business model Stockholder Stockholder Stock
Slide 53: WeBuyCars national footprint
Appendi x WeBuyCars national footprint Vertically integrated e-commerce & physical infrastructure E-commerce platform ◉ 100% data driven processes | Proprietary pricing algorithms ◉ Online solution allows to buy, exchange or finance vehicle & offers F&I products 7 Limpopo 20% 14% (HY2022: 24%) >10 0
Slide 54: SA Taxi
APPENDIX SA Taxi Results for the half year ended 31 March 2023
Slide 55: Environment & market context
Appendi x Environment & market context Minibus taxi industry is defensive & growing despite challenging environment Monthly supply¹ less than Monthly demand² Total SA Taxi’s market supply total application ~1 620 ~9 360 Total Addressable Market HY2022: ~1 800 HY2022: ~10 100 >250 000 Minibus Taxis N
Slide 56: Environment for minibus taxi operators
Appendi x Environment for minibus taxi operators Minibus taxis are the preferred mode of public transport due to accessibility & reliability Lower LSM consumers spend ~40% of monthly household income on public transport fares Commuter trips via bus & rail often travel first & last KM utilising minib
Slide 57: SA Taxi market positioning
Appendi x SA Taxi market positioning Vertically integrated business model Proportion of customers classified SA Taxi Finance as previously financially excluded ~79% Proportion of customer base Average score 17.1 billion 36 963 ~1.2 Score below which at which SA Taxi Gross loans Loans Vehicles tradit
Slide 58: SA Taxi market positioning
Appendi x SA Taxi market positioning Vertically integrated business model Telematics utilised for insurance underwriting, premium pricing & prevention & detection of loss events SA Taxi Protect >31 000 Majority financed Cell captive Insurance clients choose to be through Guardrisk clients insured by
Slide 59: SA Taxi operational performance
Appendi x SA Taxi operational performance SA Taxi operator profile Credit profile of loans on book ~1.2 50 years 5.4 years 82 months 5.6% 48 months ~9 357 ~657 Vehicles Average age Average age of Average loan term Credit loss ratio Average remaining Applications Loans originated per customer of cust
Slide 60: Glossary
08 Glossary Results for the half year ended 31 March 2023
Slide 61: Glossary
Glossary ASP Average selling price CPS Cents per share AUS Australia A vehicle inspection certification providing information on the mechanical DEKRA report & technical status of the vehicle B2B Business-to-business (vehicle dealerships) DFI Development finance institution B2C Business-to-consumer E
Slide 62: Glossary
Glossary LSM Living Standards Measure SATIF SA Taxi Impact Fund Nutun Previously branded ‘Transaction Capital Risk Services’ SATS SA Taxi Securitisation Non-performing consumer loan portfolios acquired by Nutun to be NPL portfolio SDGs Sustainable Development Goals collected as principal Open market
Slide 63: Disclaimer
DISCLAIMER This presentation may contain certain "forward-looking statements" regarding beliefs or expectations of the TC Group, its directors & other members of its senior management about the TC Group's financial condition, results of operations, cash flow, strategy & business & the transactions d