Motus Holdings Limited · JSE:MTH
Motus — FY2019 Earnings Presentation
33 slides from Motus's earnings presentation, Jun 30, 2019
Slide 1: First annual results presentation 30 June 2019
First annual results presentation 30 June 2019
Slide 2: Agenda
Agenda 1. Unbundling and listing 2. Key investment highlights 3. Performance against objectives 4. Context 5. Financial highlights 6. Overview 7. Business segment overview 8. Financial overview 9. Strategic update 10. Prospects 2 2 Preliminary summarised audited consolidated results for the year end
Slide 3: Unbundling and listing
Unbundling and listing Prior to the listing , the Motus unbundling was underpinned by: ˃ Enhanced strategic focus, independence & flexibility ˃ Improved operational efficiency through reduction of complexity, duplication & costs over time ˃ Focused capital allocation & funding structures ˃ Improved
Slide 4: Key investment highlights
Key investment highlights Diversified (non-manufacturing) business in the automotive sector with a leading position in South Africa and selected 1 international presence mainly in the United Kingdom (UK), Australia and limited presence in South East Asia and Southern and East Africa Fully integrated
Slide 5: Performance against objectives
Performance against objectives Solid results against FY19 objectives Strategic objectives Results > Being the OEM’s partner of choice for a superior route-to market: representing 22 OEM’s > South African retail market share 18,9% Drive market leadership > Exceptional customer service > Expanding fin
Slide 6: Performance against objectives
Performance against objectives Solid results against FY19 objectives Strategic objectives Results > Monitoring local & international industry trends- visits to Silicon Valley, Berlin & Cape Town > Innovation hub set up: Innovation – focused on innovation & development of products & services – drive
Slide 7: Context
Context ˃ Global and local economic and political environments are unstable ˃ No or marginal economic growth ˃ Weakening of global economy weighs down on emerging markets ˃ All markets are competitive, unpredictable and tough South Africa (revenue 67% and operating profit 90%) Weak economic environm
Slide 8: Context (cont.)
Context (cont.) United Kingdom ˃ Brexit & growing geopolitical uncertainties ˃ UK market down 5,7% for FY2019 ˃ Vehicle market remains unstable & competitive ˃ DAF distribution is advantageous as vehicles are manufactured in the UK ˃ Market size 2,6 million new vehicles p.a. Australia ˃ Economy has
Slide 9: Financial highlights
Financial highlights 30 June 2019 Revenue Operating Normalised Normalised 3,5% profit 1% headline earnings 7% HEPS 11% R79 711 R3 620 R2 137 1 090 cents million million million per share Operating margin 4,5% (June 2018: 4,7%) (June 2018: R1 991 million) (June 2018: 986 cents per share) Dividend Cas
Slide 10: Overview
Overview ˃ Solid results in challenging trading conditions ˃ Revenue improved by 3,5%: – enhanced by price increases & acquisitions – revenue from pre-owned vehicles up 11%, new vehicles down 2% – volumes reduced due to market contraction & “down buying” – “down buying” is an advantage for Motus – S
Slide 11: Business segment overview
Business segment overview Import Retail Motor-Related Aftermarket and Distribution and Rental Financial Services Parts ˃ Exclusive South African importer of ˃ Annually retail >130 000 new & > ˃ Developer and distributor of ˃ Distributor, wholesaler and retailer of Hyundai, Kia, Renault and Mitsubish
Slide 12: Business segment overview (cont.) - Income diversification
Business segment overview (cont.) Income diversification Revenue 70% Retail and Rental 21% Import and Distribution Segment Revenue* June 2019 and 2018 7% Aftermarket Parts 2% Motor-Related Financial Services Operating Profit 41% Retail and Rental 44% Retail and Rental 25% Motor-Related Financial 23%
Slide 13: Import and Distribution
Business segment overview (cont.) Import and Distribution % 2019 2018 change Revenue (Rm) ① 18 949 19 501 (3) Operating Profit (Rm) 810 788 3 Operating margin (%) 4,3 4,0 ① - HY1 and HY2 of 2018 as well as HY1 of 2019 have been re-presented due to a reallocation of certain eliminations that were pre
Slide 14: Retail and Rental
Business segment overview (cont.) Retail and Rental % Review 2019 2018 change > Revenue improved by 3% despite lower sales volumes assisted by: Revenue (Rm) ② 65 041 62 850 3 – acquisitions in the UK & Australia Operating Profit (Rm) 1 578 1 687 (6) – pre-owned vehicle sales increasing by 11% Operat
Slide 15: Retail and Rental (cont.)
Business segment overview (cont.) Retail and Rental (cont.) Review ˃ United Kingdom revenue up & operating profit down: – Brexit uncertainties impacted the operations – DAF commercial & Pentagon passenger divisions performed well – Mercedes commercial division has been under pressure due to: • once
Slide 16: Motor-Related Financial Services
Business segment overview (cont.) Motor-Related Financial Services % Review 2019 2018 change ˃ Revenue growth stable mainly due to: Revenue (Rm) 2 172 2 166 0 – increased service & maintenance revenue Operating Profit (Rm) 937 899 5 – higher client penetration through digital marketing of value Oper
Slide 17: Motor-Related Financial Services (cont.)
Business segment overview (cont.) Motor-Related Financial Services (cont.) Review ˃ Continue to focus on: – innovation of new products & services – growing fleet management business – building synergies within the vehicle retail businesses – financial discipline & cost containment – developing marke
Slide 18: Aftermarket Parts
Business segment overview (cont.) Aftermarket Parts % 2019 2018 change Revenue (Rm) 6 442 5 974 8 Operating Profit (Rm) 496 447 11 Operating margin (%) 7,7 7,5 Review ˃ Revenue & operating profit increased by 8% & 11% respectively, mainly due to: – Benefits from vertical integration of suppliers (ma
Slide 19: Financial overview: Statement of Profit or Loss
Financial overview Statement of Profit or Loss for the year ended 30 June 2019 % Rm 2019 2018 change Revenue 79 711 77 001 3,5 Operating profit 3 620 3 593 1 Operating profit % 4,5 4,7 Profit on sale of properties, net of impairments 15 617 Net foreign exchange losses (14) (43) Net finance costs (77
Slide 20: Quality of earnings
Financial overview (cont.) Quality of earnings % Rm 2019 2018 change Operating profit 3 620 3 593 1% Headline earnings 1 977 1 991 -1% Normalised headline earnings 2 137 1 991 7% Weighted average number of shares (million) 196 202 -3% Normalised headline earnings per share (cents) 1 090 986 11% Revi
Slide 21: Statement of Profit or Loss (cont.)
Financial overview (cont.) Statement of Profit or Loss for the year ended 30 June 2019 % Rm 2019 2018 change Profit before tax and IFRS 2 charge 2 770 3 210 (14) Issue of shares at a discount to a Black Economic Empowerment partner and (160) - modification of share appreciation rights Profit before
Slide 22: Statement of Financial Position at 30 June 2019
Financial overview (cont.) Statement of Financial Position at 30 June 2019 Rm June June % Assets 2019 2018 change Goodwill and intangible assets 1 273 1 230 3 Property, plant and equipment 7 198 6 786 6 Investments in associates and joint ventures 258 348 (26) Vehicles for hire 3 385 3 924 (14) Inve
Slide 23: Net working capital at June 19
Financial overview (cont.) Net working capital at 30 June 2019 Rm June June % 2019 2018 change Inventories 19 069 15 633 22 Trade and other receivables 4 744 4 821 (2) Floorplans from suppliers (5 619) (4 597) 22 Trade and other payables (9 716) (8 838) 10 Provisions and derivatives (898) (288) >100
Slide 24: Statement of Financial Position: Liabilities and Equity
Financial overview (cont.) Statement of Financial Position at 30 June 2019 Rm June June % Liabilities and Equity 2019 2018 change Net Debt (4 777) (4 580) 4 Interest bearing floorplans from financial institutions (1 841) (1 320) 39 Contract Liabilities (service and maintenance plans) (2 818) (2 724)
Slide 25: Statement of Cash flow
Financial overview (cont.) Statement of Cash flow June June Rm 2019 2018 Cash generated from operations before movements in net working capital 4 819 4 607 Movements in net working capital (636) 2 141 Cash generated by operations before interest, tax paid and capital expenditure on vehicles 4 183 6
Slide 26: Statement of Cash flow (cont.)
Financial overview (cont.) Statement of Cash flow June June Rm 2019 2018 Cash generated by operations before capital expenditure on vehicles for hire 3 061 5 380 Net capital expenditure – vehicles for hire (318) (1 079) Cash generated by operations 2 743 4 301 Net cash outflow from the acquisitions
Slide 27: Revenue and Operating profit
Financial overview (cont.) Revenue and Operating profit Revenue (Rm) 33% foreign 79 711 77 001 66 129 65 538 2016 2017 2018 2019 10% foreign Operating profit (Rm) 3 620 3 593 3 339 3 292 2016 2017 2018 2019 27 27 Preliminary summarised audited consolidated results for the year ended 30 June 2019 MOT
Slide 28: Gearing and funding
Financial overview (cont.) Gearing (total including floorplans) Funding 72% ˃ Liquidity position is strong 63% 63% 56% ˃ R7,5 billion unutilised banking 51% facilities ˃ 61% of Group debt is long-term in nature ˃ 39% of the debt is at fixed rates, excluding floorplans 8 081 5 900 7 754 7 690 6 618 H
Slide 29: Strategic update
Strategic update Independence and balance sheet capacity as a separately listed entity Well positioned to: ˃ maintain leading retail market share in SA (selling 1 in 5 new vehicles) ˃ grow in selected international markets Aim to sustain: ˃ best-in-class earnings (integrated business model allows fo
Slide 30: Prospects
Prospects ˃ The Group has produced solid financial results for the year under challenging trading conditions ˃ South Africa’s socio-political and economic outlook is fragile which impacts sentiment, economic activity and the volatility of the Rand ˃ UK markets will be uncertain until Brexit is resol
Slide 31: Thank you
Thank you 31 31 Preliminary summarised audited consolidated results for the year ended 30 June 2019 MOTUS HOLDINGS LIMITED
Slide 32: Disclaimer
Disclaimer This presentation is confidential and is being provided for information purposes only to existing and prospective investors in Motus Holdings Limited (“Motus”). No representation or warranty, expressed or implied, is made as to the accuracy or completeness of the information contained her
Slide 33: www.motuscorp.co.za
1 Van Buuren Road cnr Van Dort and Geldenhuis Streets Bedfordview 2008 South Africa Tel: +27 (0)10 493 4335 www.motuscorp.co.za