Karooooo Ltd. · NASDAQ:KARO
Karooooo — Q1 FY25 Earnings Presentation
34 slides from Karooooo's earnings presentation, Jul 19, 2024
Slide 1: Earnings Presentation Q1 FY25
Earnings Presentation Q1 FY25
Slide 2: Disclaimer
DISCLAIMER Forward-Looking Statements The information in this presentation (which includes any oral statements made in connection therewith, as applicable) includes “forward-looking statements.” Forward-looking statements are based on our beliefs and assumptions and on information currently availabl
Slide 3: Karooooo Logistics
NASDAQ TICKER “KARO” JSE TICKER “KRO” 100% 74.8% KAROOOOO LOGISTICS Founded in South Africa, now headquartered in Singapore 2
Slide 4: Karooooo Snapshot
KAROOOOO SNAPSHOT 2,100,000+ 4,300+ Subscribers Employees 124,000+ 23 SINGAPORE (HQ) Commercial Customers Operating Countries 170bn+ Rule of 60 Monthly data points beaten1 3 (1) Cartrack revenue growth for the period of 12 months + adjusted EBITDA margin for the period of 12 months sum to greater th
Slide 5: Physical Operations Power What We Do
PHYSICAL OPERATIONS POWER WHAT WE DO Automotive 2022 Automotive 2032 Physical operations (1) Allied Market Research 4 (2) Management estimate
Slide 6: A Massive Market with Tons of Problems to Solve
A MASSIVE MARKET WITH TONS OF PROBLEMS TO SOLVE ACCIDENTS, DAMAGED VEHICLE, MACHINERY & CARGO, OTHER SAFETY ASSET MAINTENANCE RELATED ISSUES RESOURCE SCHEDULING & FUEL, TYRE & OTHER COST SHARING MANAGEMENT CUSTOMER EXPECTATIONS, BILLING & COMPLIANCE & ADMIN TRANSPARENCY WORKER PRODUCTIVITY & DISPATC
Slide 7: Simplify the Decision Making of Physical Operations
SIMPLIFY THE DECISION MAKING OF PHYSICAL OPERATIONS 6
Slide 8: Where Do I Place My Time, Energy & Resources
SLASH FUEL COSTS EMPOWER WORKERS PREVENT ACCIDENTS REDUCE DOWNTIME EXTEND ASSET LIFESPANS WHERE DO I PLACE EXONERATE DRIVERS INCREASE VISIBILITY MY TIME, ENERGY & INCREASE CONTROL RESOURCES SO THAT INCREASE PRODUCTIVITY INCREASE PROFITABILITY I CAN ______? SCALE MY OPERATIONS ENSURE COMPLIANCE REDUC
Slide 9: Our Platform Brings Everything into One Place
OUR PLATFORM BRINGS EVERYTHING INTO ONE PLACE TO TRANSFORM DECISION MAKING Safety Vision SAFE • PRODUCTIVE • PROFITABLE Delivery Cost Centralised platform for simplified decision making Management In-field Specialized In-Field worker Delivery Operational Cost Services Sensors Safety management manag
Slide 10: We Make Our Customers' Lives Easy
WE MAKE OUR CUSTOMERS’ LIVES EASY Safety Vision GEOGRAPHICALLY Delivery Cost DISPERSED Management In-field Specialized Services Sensors ACROSS INDUSTRIES & SEGMENTS Dashboards EV ESG Car Sharing AND BUSINESSES OF ALL SIZES Compliance Keyless Risk Tech Management WITH VEHICLES, ASSETS, MACHINES & MOB
Slide 11: The Power of Decluttered Decision Making
THE POWER OF DECLUTTERED DECISION MAKING BEFORE AFTER Leading medical lab Manual mapping, distance Importing jobs via API, selecting calculating, capacity, restraint and time matching, clustering, available drivers, reviewing optimized schedules and clicking 1,200% sequencing, tabling, assigning. se
Slide 12: The Power of Proactive Decision Making
THE POWER OF PROACTIVE DECISION MAKING BEFORE AFTER Leading Connected No visibility of issue and magnitude. In cabin buzzer activated once Operations Platform vehicle starts idling until no longer stationary. -42,000+ Reduction in idling hours Low-impact education and Actionable real-time data. coac
Slide 13: The Power of AI-Charged Decision Making
THE POWER OF AI-CHARGED DECISION MAKING -32% 1. In-cabin audible alert so driver can correct their behavior in real-time FATIGUED DRIVING -35% 2. Video of event automatically uploaded to SEATBELT NOT ON cloud for manager’s review -13% 3. Coaching completed and logged alongside behaviour MOBILE PHONE
Slide 14: The Power of Factual Decision Making
THE POWER OF FACTUAL DECISION MAKING BEFORE AFTER R1,105,560 He said, she said leading to drawn Accident footage requests for In savings in 5 months out investigations, unpaid claims, evidence-based decisions. increased insurance premiums and demotivated drivers. ~$61,000 In 5 months HE SAID Huge in
Slide 15: Strong Track Record of Successful Big Bets
STRONG TRACK RECORD OF SUCCESSFUL BIG BETS WITH DISCIPLINED CAPITAL ALLOCATION 2024 MASSIVE ROOM TO TAP INTO OUR DATA & NETWORK EFFECTS 2,000,000 subscribers Launch of 2022 Next-Gen 100,000 Vision commercial New JHB customers office 2023 2021 Launch NASDAQ IPO proprietary network ZA Launch of 2020 V
Slide 16: Why Karooooo
WHY KAROOOOO FOUNDER-LED BUSINESS • Shareholder gains and losses are in direct proportion to the Founder/CEO • Management have an owner-oriented mindset and listed company experience GEARED FOR ORGANIC • Customer-centric culture with 95% commercial customer net retention GROWTH • Strong implementati
Slide 17: Financial Performance for Q1 FY25
Financial Performance for Q1 FY25
Slide 18: Karooooo Continues Subscription Revenue & Earnings Growth
KAROOOOO CONTINUES DELIVER ON ITS STRONG TRACK RECORD OF SUBSCRIPTION REVENUE & EARNINGS GROWTH Subscription Revenue Operating Profit Earnings Per Share Q1 FY25 ZAR 964M Q1 FY25 ZAR 300M Q1 FY25 ZAR 7.17 Q1 FY24 ZAR 836M Q1 FY24 ZAR 224M Q1 FY24 ZAR 5.09 STRONG CUSTOMER ACQUISITION EXPERIENCED IN Q1
Slide 19: Decade-Plus Track Record of High Cash Conversion
DECADE-PLUS TRACK RECORD OF HIGH CASH CONVERSION ZAR M ZAR M Total Earnings and Earnings Free Cash Flow Free Cash Flow 225 ZAR304 million 215 was invested in 199 the development 178 of the South 171 (1) 162 158 162 161 African central 156 157 155 147 150 office 1,684 113 106 1,253 97 (1) 83 74 68 Q4
Slide 20: Karooooo Accelerates Earnings Per Share
KAROOOOO ACCELERATES EARNINGS PER SHARE 7.17 EPS Growth 6.81 ZAR 6.34 Q1 FY25 7.17 5.61 5.09 Q1 FY24 5.09 4.96 4.93 4.72 4.70 4.70 3.90 3.85 3.61 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY22 FY22 FY22 FY22 FY23 FY23 FY23 FY23 FY24 FY24 FY24 FY24 FY25 19
Slide 21: Karooooo's EPS Reconciliation
KAROOOO’S EPS RECONCILIATION Q1 FY25 6.94 Q1 FY24 5.40 (1) Q1 Q2 Q3 Q4 Q1 ZAR FY22 FY23 FY24 FY24 FY24 FY24 FY24 FY25 16.59 20.61 24.77 5.40 5.89 6.96 6.52 6.94 (0.42) (1.42) (1.40) (0.39) (0.42) (0.75) 0.16 0 (0.07) 0.10 0.48 0.08 0.14 0.13 0.13 0.23 Q1 FY25 0.23 Q1 FY24 0.08 KAROOOOO CONTINUES TO
Slide 22: Robust Business Model Backed by Strong Clean Balance Sheet
KAROOOOO HAS A ROBUST BUSINESS MODEL BACKED BY A STRONG AND CLEAN BALANCE SHEET Net cash on hand plus cash in bank fixed deposits ZAR M 1,137 1,001 966 950 Strong unit economics 922 854 (1) 819 799 718 782 Robust operating margins (2) 664 651 554 Unleveraged balance sheet Q1 FY25 Strong cash convers
Slide 23: Cartrack Extends Decade-Plus Track Record of Execution
CARTRACK EXTENDS DECADE-PLUS TRACK RECORD OF EXECUTION EXCELLENCE Subscribers Subscription Revenue Operating Profit 000s ZAR M ZAR M 2,047 960 1,972 930 295 289 287 1,908 900 1,833 858 1,758 834 252 1,717 1,679 793 248 771 232 1,600 224 733 221 222 1,526 1,543 707 209 1,470 1,409 663 670 198 1,366 6
Slide 24: Cartrack Experiences Record Q1 Net Subscriber Additions
CARTRACK EXPERIENCES RECORD Q1 NET SUBSCRIBER ADDITIONS ▲ 78,593 75,910 75,256 75,484 61,776 63,340 60,470 57,241 55,587 40,375 42,139 38,471 16,800 FY22 FY23 FY24 FY25 FY22 FY23 FY24 FY25 FY22 FY23 FY24 FY25 FY22 FY23 FY24 FY25 Q1 Q2 Q3 Q4 23
Slide 25: Cartrack Continues Strong SaaS Revenue Growth
CARTRACK CONTINUES WITH DECADE-PLUS TRACK RECORD OF STRONG SaaS REVENUE GROWTH Subscription Revenue Revenue Q1 FY25 ZAR 960M Q1 FY24 ZAR 981M Q1 FY24 ZAR 834M Q1 FY23 ZAR 853M 98% OF CARTRACK’S REVENUE IS SUBSCRIPTION REVENUE 24
Slide 26: Cartrack Extends Track Record of EPS Growth
CARTRACK EXTENDS DECADE-PLUS TRACK RECORD OF EPS GROWTH AT SCALE 6.96 6.94 6.52 ZAR 5.89 5.40 5.18 5.20 5.12 5.11 (1) 4.85 (1) (1) 4.03 3.96 (1) 3.73 Q1 FY25 6.94 Q1 FY24 5.40 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY22 FY22 FY22 FY22 FY23 FY23 FY23 FY23 FY24 FY24 FY24 FY24 FY25 EARNINGS CONTINUE TO
Slide 27: Cartrack Demonstrates Ability to Maintain High Margins
CARTRACK DEMONSTRATES ITS ABILITY TO MAINTAIN HIGH MARGINS AND WIN Gross Operating Adjusted Profit Profit EBITDA(1) Q1 FY25 ZAR 713M Q1 FY25 ZAR 287M Q1 FY25 ZAR 453M Q1 FY24 ZAR 600M Q1 FY24 ZAR 232M Q1 FY24 ZAR 392M Gross Profit Operating Profit Adjusted EBITDA Margin Margin Margin(1) Q1 FY25 73%
Slide 28: Cartrack's Leading Unit Economics
CARTRACK’S LEADING UNIT ECONOMICS Lifetime Value of Low Cost of Acquiring a Strong Benefits from (1) Customer Relationships Customer (2) Economies of Scale ▲ LTV to CAC Commercial Customer Retention Rate Q1 FY24: 71% WELL POSITIONED TO CONTINUE SCALING (1) The product of our subscription revenue gro
Slide 29: Cartrack's Strong Track Record of Subscriber Unit Economics
CARTRACK’S STRONG TRACK RECORD OF SUBSCRIBER UNIT ECONOMICS CONTINUES Average Cost of adding a Subscriber to our cloud (1) & ZAR 2,370 2,264 2,255 Q1 2,093 2,070 FY21 FY22 FY23 FY24 FY25 949 OpEx 880 932 ARPU (ZAR) 154 151 155 160 159 660 718 Subscriber contract life 60 60 60 60 60 cycle (Months) Av
Slide 30: Cartrack Continues to Grow Subscriber Base & ARR
CARTRACK CONTINUES TO GROW SUBSCRIBER BASE & ARR WITH SOLID TRACTION IN SOUTHEAST ASIA ARR (1) ZAR M ▲ Q1 Q1 Q1 Q-on-Q ‘000s Subscribers FY23 FY24 FY25 Change 3,864 3,401 1,184 1,340 1,550 16% 2,845 156 194 238 23% 133 149 174 17% 70 75 85 14% 1,543 1,758 2,047 17% As at May 2022 As at May 2023 As a
Slide 31: Cartrack's Consistent Operating Metrics
CARTRACK’S CONSISTENT OPERATING METRICS Q1 FY22 Q1 FY23 Q1 FY24 Q1 FY25 Subscription Revenue Gross Profit Margin 72% 72% 71% 74% Research & Development as a % of Subscription Revenue 5% 6% 6% 6% Sales & Marketing as a % of Subscription Revenue 14% 13% 14% 15% General & Administration as a % of Subsc
Slide 32: Karooooo Logistics Gains Adoption by Large Enterprise Customers
KAROOOOO LOGISTICS CONTINUES TO GAIN ADOPTION BY OUR LARGE ENTERPRISE CUSTOMERS SEEKING TO SCALE THEIR E-COMMERCE OPERATIONS Karooooo Logistics (1) Karooooo Logistics (1) 101 Revenue Operating Profit 93 ZAR M 91 ZAR M 13 Q1 FY25 101 Q1 FY25 13 Q1 FY24 62 72 Q1 FY24 5 8 62 7 7 54 56 5 41 28 2 2 24 1
Slide 33: Karooooo's Outlook for 2025 Remains Unchanged
KAROOOOO’S OUTLOOK FOR 2025 REMAINS UNCHANGED FY22 FY23 FY24 Q1 FY25 FY25 Outlook Number of Subscribers (000s) 1,526 1,717 1,972 2,047 2,200 – 2,400 Cartrack’s Subscription Revenue (ZAR M) 2,566 3,004 3,523 960 3,900 – 4,150 Cartrack’s Operating Profit Margin 27% 30% 30% 29% 27% – 31% Karooooo’s Ear
Slide 34: Q&A
Q&A