Zeda Limited · JSE:ZZD
Zeda — Investor Day (March 2023)
40 slides from Zeda's investor day presentation, Mar 13, 2023
Slide 1: Capital Markets Day 2023
CAPITAL MARKETS DAY 2023 13 MARCH 2023
Slide 2: Agenda
AGENDA SPEAKER TIME 01 INTRODUCTION Ramasela Ganda Group Chief Executive Officer 8:30 – 9:00 02 BUSINESS OVERVIEW Litha Nkombisa Executive: Commercial (Rental) 9:00 – 9:30 Q&A SESSION Tlhabi Ntlha Executive: Leasing Operations 9:30 – 10:00 TEA BREAK 10:00 – 10:30 03 STRATEGY OVERVIEW Ramasela Ganda
Slide 3: Introduction
INTRODUCTION 01
Slide 4: Evolution of the Business
EVOLUTION OF THE BUSINESS 2022 2020 2015 2009 1995 Mid Listed on 1980s Integrated the Main 1982 mobility Board of Budget brand the JSE 1980 strategy Avis Luxury Connected 1969 Replacement Collection cars Subscription comprising 1967 Largest Avis business Luxury licensee Cars, Used Car outside US. (c
Slide 5: Integrated Mobility
INTEGRATION MOBILITY 1 700 brand ambassadors Average Fleet utilisation 230 000 Fleet 14 Dealerships fleet 79.1% under 32 000 management Digital platforms B/S 19 000 76 Corporate branches 70:30 Wholesale to Retail, Customer agreement to a vehicle 1:1 25 Agencies and Sub-licensee this fluctuate to 65:
Slide 6: Zeda aspiration, vision and purpose
ZEDA ASPIRATION Drive greater adoption of usership economy Customer VISION Trusted mobility Value Innovation solutions provider proposition leading in its chosen PURPOSE markets Connecting HOW WE WIN HOW HOW WE humanity WEWIN WIN ESG Employee Value proposition Operational excellence Zeda Capital Mar
Slide 7: Drive the Usership Economy
DRIVE THE USERSHIP ECONOMY Vehicle usership in South Africa remains low Factors that drive 29% of consumers plan to convert to usership compared to other countries: usership: models for their next vehicle: Leasing market penetration Consumer awareness Vehicle 4% subscription 4 000 60,0% 3 541 52,3%
Slide 8: Business Model
BUSINESS MODEL Fund Right Buy Right Structure appropriate Price, model for the business 1 2 Right mix Cost Scale TCO Value Added Product Connected car Car Sales Safety Timing Cost saving Intelligent Size of defleeted fleet 5 3 Fuel Management Best Price Second gross 4 Effective Management Utilisatio
Slide 9: Committed to Best-in-Class ESG Practices
COMMITTED TO BEST-IN-CLASS ESG PRACTICES Reduce environmental impact Demonstrate positive social impact Integrated ESG Strategy Carbon emissions Water recycling Hybrid vehicles Safety Diversity, Management Equity and Inclusion Renewable energy Rain harvesting Environment Social Adopt sound governanc
Slide 10: Business Overview
BUSINESS OVERVIEW 02
Slide 11: Rental Value Chain
RENTAL VALUE CHAIN Customer Fleet Disposal needs Through Avis Car Sales analysis Retention Loyalty and rewards program Demand & fleet planning Forecast demand by segment Fleet required based on TCO Fleet management Accident & damage management Out of service management Salvage management Acquisition
Slide 12: Rental Offering
RENTAL OFFERING Comprehensive offering Across a range of vehicle types With a diversified customer base Self-drive Corporate Commercial Insurance Driven Passenger Light delivery partners: financial services Waivers travel replacement services vehicles vehicles services Delivery & Telematics Car seat
Slide 13: Rental Value Drivers
RENTAL VALUE DRIVERS Forecasting Cost per accuracy vehicle Rental days by Time to repair No. of vehicles segment damage Vehicles Capital outlay Utilisation required (debt) Demand & Place orders Vehicles are Vehicles are Vehicle uptime Vehicles fleet planning with OEM delivered rented out is managed
Slide 14: Leasing Value Chain
LEASING VALUE CHAIN Fleet Disposal Customer Through Avis Car Sales needs analysis Fleet Selection Advisory on vehicle based on TCO Vehicle selection Sale and Leaseback Lifecycle CO2 Emissions Control management Service authorisation Maintenance authorisation Fleet planning Key account management & a
Slide 15: Leasing Offering
LEASING OFFERING Comprehensive offering Across a range of vehicle types With a diversified customer base Full maintenance Traffic fine Operating Passenger Motorcycles Light delivery Mining Agriculture Healthcare lease management lease vehicles Fast moving Construction Distillery Managed Telematics S
Slide 16: Leasing Value Drivers
LEASING VALUE DRIVERS Cost per Cash collected vehicle upfront Application, No. of vehicles Costs over time mileage, TCO Vehicles Capital outlay Cash & contract required (debt) liabilities Customer Place orders Vehicles are Vehicles are Service / Vehicles contract secured with dealers delivered lease
Slide 17: Car Sales Value Chain
CAR SALES VALUE CHAIN Customer needs Cash receipt considered at acquisition Fleet stock Rental de-fleet (12 months old) Leasing de-fleet (~45 months old) Trade-ins Sale of stock Buy-ins Average stock days trade Average stock days retail Elasticity in retail Channel selection Condition assessment Ret
Slide 18: Competitive Advantage
COMPETITIVE ADVANTAGE Breadth Experienced Systems Scale Integrated Safe Long- Global of offering and qualified Process operation Secured standing brands Ambassadors Relation- ships Zeda Capital Markets Day 2023 18
Slide 19: Strategy Overview
STRATEGY «@ OVERVIEW —
Slide 20: Key Strategic Priorities
KEY STRATEGIC PRIORITIES GROW expanding and evolving product proposition strategic GROW THE grow partner- leasing ships BUSINESS book FIX OPTIMISE Optimise balance sheet BBBEE Portfolio review STRATEGY FIX OPTIMISE Digitise and Cost automate containment processes culture Dual brand strategy ESG Zeda
Slide 21: Fix: Portfolio Review
FIX Portfolio Dual BBBEE Review Brand Under Plan to Opportunities of performing address • market segment operations/ the Black • Product product and/or Ownership differentiators offering Legislatives imperatives in different regions; Economic condition Fix and return to sustainable financial positio
Slide 22: Grow Pillars and Industry Attractiveness
GROW PILLARS Zeda’s Zeda’s How we use technology to connect humanity Base Offering Product evolution Digital Transformation Customer Operational Product Short-term Pillars Intimacy Excellence Leadership rental Fleet Mobility- management as-a- Ancillaries CONNECTED CAR/MOBILITY PLATFORM -as-a-service
Slide 23: Financial Framework
FINANCIAL FRAMEWORK 04
Slide 24: Capital Allocation Framework
CAPITAL ALLOCATION FRAMEWORK Principles for allocating available capital Invest organically to protect and grow market share Acquire technology to digitise business processes 1 2 talent and skill in data analytics, machine learning and artificial strategic partnerships to intelligence enable partici
Slide 25: Financial Strategy
FINANCIAL STRATEGY Financial Management R Income Balance Cash Statement Sheet Flow • Revenue growth • Debt to Equity • Cash from operations • EBITDA margin • Loan to value • Cash from financing • Interest cover • Net Debt to EBITDA • Net working capital • Net profit growth • Return on Invested Capit
Slide 26: Revenue Categories
REVENUE CATEGORIES 2022 2021 9 000 000 8 000 000 7 000 000 6 000 000 5 000 000 4 000 000 3 000 000 2 000 000 1 000 000 0 Car sales revenue Car rental revenue Car leasing revenue Commissions and Total other Zeda Capital Markets Day 2023 26
Slide 27: Costs
COSTS 2022 2021 80% 73% 70% 67% 60% 50% 40% 30% 20% 9% 9% 8% 7% 10% 4% 4% 3% 1% 2% 1% 2% 1% 2% 1% 1% 1% 2% 1% 0% Cost of sales Mo tor vehicle Sales and Other office Rental Licence fees Staff costs Net loss on Operating Other expenses advertising expenses expenses rental and lease charges operating l
Slide 28: A Strong Set of Results
A STRONG SET OF RESULTS Revenue (Rm) EBITDA (Rm) Rental Operations Operating Profit/(Loss) (Rm) Average Fleet EBITDA Margin Leasing Operations Operating Margin Fleet size 2019 2020 2021 2022 Rental 46,558 42,647 34,860 18,700 Leasing 30,337 27,011 20,262 32,357 24% 26% 22% 29% 34% 9% 11% 3% 11% 16%
Slide 29: Comparison of Income Earning Assets
COMPARISON OF INCOME EARNING ASSETS Financial Assets 25 538 7 851 Goodwill & Intangibles 8 656 Other Non-Current Assets 3 509 618 Leasing Vehicles 126 - Finance Lease 95% Inventory 3 812 73% 38 414 Income Rental Vehicles Earning Income Assets Earning Assets Working Capital/Other Assets 2 244 - Cash
Slide 30: Capital Structure
CAPITAL STRUCTURE As at 30 September 2022 Financing split (Rm) Short Term Floorplan funding and other debt Long Term Secured 5% Total: Net Overdraft 4,624 Debt: Equity 1 674 28% 41% FY22 54% 4,317 (307) Long-Term debt 2 716 41% Short-Term debt FY22 Net Debt 72% 59% 1 908 Net debt Equity 28% FY22 Gro
Slide 31: Funding Facilities - Strategy 2023 to 2025
FUNDING FACILITIES - STRATEGY 2023 TO 2025 (Rm) Total Facilities Utilization Headroom 8,000 7,000 6,000 2,700 5,000 4,000 7,300 3,000 4,600 2,000 1,000 - Zeda Capital Markets Day 2023 31
Slide 32: Conclusion
CONCLUSION 05
Slide 33: Peer Group
PEER GROUP Business overview No Southern Africa player is an exact comparable peer based on lines of business and operating model. However, there are two South American players that are comparable. Holding entity Rent Lease Sell v Zeda Capital Markets Day 2023 33
Slide 34: What Success Looks Like
WHAT SUCCESS LOOKS LIKE ROE target ~25% to 30% Customer satisfaction Dividend policy ratio~ 20% index CSI > 95% CSI ROE to 30% of NOPAT (resumes Net promoter score in FY2024) NPS> 70% ROIC > WACC Customer Maximise Experience Shareholder Net Debt to EBITDA value Reputational track index Employee enga
Slide 35: Thank You Q&A
Of Connecting humanity THANK YOU Q&A
Slide 36: Annexure
ANNEXURE 06
Slide 37: Board of Directors
BOARD OF DIRECTORS Lwazi Bam (Chairman) Executive Chairman Directors Independent Non-Executive Director Ramasela Ganda CA(SA) Thobeka Ntshiza CA(SA) Chief Executive Officer Financial Director Non- Executive Directors Sibani Mngomezulu Yolanda Miya Donald Wilson Dr. Ngao Motsei Independent Non-Execut
Slide 38: Leadership Team with Diverse Skills
LEADERSHIP TEAM WITH DIVERSE SKILLS collective 274+ years of commercial 44 Average age years experience Ramasela Ganda CA(SA) CEO Thobeka Ntshiza CA(SA) Dave Porteous Tlhabi Ntlha CA(SA) Litha Nkombisa Tumi Ramoganyaka Kiruben Pillay Financial Director Chief Operations Executive: Executive: Commerci
Slide 39: The Journey
THE JOURNEY Integrated mobility strategy FY2020 FY2021 FY2022 • Closure of non-profitable businesses: • Integrated Leasing, RAC & • Fixed underperforming operations Truck Rental & Point to Point Car Sales (shared services & synergy unlock) (Mozambique) • Footprint rationalization: 19 rental • Introd
Slide 40: Thank You
Of Connecting humanity THANK YOU