Motus Holdings Limited · JSE:MTH
Motus — Investor Day (June 2022)
61 slides from Motus's investor day presentation, Jun 10, 2022
Slide 1: Investor Day – 10 June 2022
Investor Day – 10 June 2022
Slide 2: Investor Day Agenda
Investor Day I Agenda Session 1 9:00 – 9:15 Welcome Osman Arbee Session 2 9:15 – 9:50 Innovation and technology Kerry Cassel Session 3 9:50 – 10:20 Dealerships: Retail South Africa Corne Venter Session 4 10:20 – 10:40 Importers Niall Lynch 10:40 – 10:55 Break Session 5 10:55 – 11:30 Aftermarket Part
Slide 3: Innovation & Technology
Innovation & Technology Kerry Cassel CEO – Mobility Solutions & Head: Innovation and Technology
Slide 4: Introduction
01 Introduction Market overview
Slide 5: The evolution of the market
The evolution of the market • Digitisation of our industry has shifted IT from a support function in our businesses to a Key Business Enabler. • The omnichannel experience will play a key part of the wider purchasing process – we must meet our customers wherever they are on the purchasing journey an
Slide 6: Motus’ IT Response
02 Motus’ IT Response
Slide 7: Enabling the business
Enabling the business Enablement through: 1. Networks & Applications 2. Digitisation 3. Business Insights & Data 4. Innovation Capability 7
Slide 8: Networks and Applications
03 Networks and Applications
Slide 9: Networks and Applications
Networks and Applications Networks • Network throughput increased 337% in the past two years • Network upgrade (SDWAN) - 245% increase in network capacity and 35% reduction in cost • Our strategy regarding Cybersecurity is premised on the NIST1 Cybersecurity Framework – an internationally recognised
Slide 10: Networks and Applications
Networks and Applications Applications • We initiated 2 digitisation projects in the last 12 months. Deployment of both (Phase 1) is planned for June 2022. • 5 significant ERP implementations are currently in progress which will re-platform the business onto the latest technology. • We experimented
Slide 11: Digitisation
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Slide 12: Our digitisation portfolio
Our digitisation portfolio Harbour Aftermarket process car parts Car buying process process Car rental process Car servicing Car sales process process Challenge: Multiple stakeholder Challenge: touch-points & Parts picking efficiency & on-demand manufacturing handovers of Challenge: Challenge: for s
Slide 13: Business Insight & Data
05 Business Insight & Data
Slide 14: Business Insights & Data
Business Insights & Data Exploring further opportunities for monetisation of data focused on: • Re-capturing lost sales opportunities • Upselling & cross selling opportunities • Developing usage-based products • Developing preventative maintenance predictors • Leveraging proprietary data sets & anal
Slide 15: Innovation Capability
06 Innovation Capability 1. mx Process 2. Innovation Portfolio 3. mx Events & Community 4. Innovation Blitz
Slide 16: mx process I Added fuel & remove friction
mx process I Added fuel & remove friction 16 17 Motus Holdings Limited Investor Day – 10 June 2022
Slide 17: Innovation Portfolio
Innovation Portfolio 21 concepts are in development across the 3 phases. 100% of the initiatives within the portfolio have a core digital component. 17 Portfolio as at 31 March 2022
Slide 18: Culture of Innovation
Build your skills and confidence, check out the the latest business You will be invited to cool & related trends and online exciting events with local & training global thought leaders 03 04 oa Learn about the exciting Build your Attend our process of refining ideas skills events ‘As amx community m
Slide 19: mx Events & Community
mx Events & Community • 40% of digitally connected Motus employees are members on the mx platform representing all divisions within Motus. • In addition, we have hosted multiple events in the last year covering a range of topics from Artificial Intelligence, Futuring and E-Commerce. • Our guest spea
Slide 20: Innovation Blitz Video
Innovation Blitz Video 20
Slide 21: Thank you
Thank you
Slide 22: Retail: South Africa
Retail: South Africa Corne Venter CEO – Retail: South Africa
Slide 23: Motus owned and independently owned
23 * Motus owned and independently owned
Slide 24: Disruptors of the traditional dealership model
Disruptors of the traditional dealership model =” > Aftermarket ea > Guidelines \ il Autonomous \ allowing customers to fj [ capabilities will aS service vehicle at any ] \ transform shared } service provider. ~~ mobility. \ Y 7 pclae atte —_ f : WY Electric Vehicles impacting the \ [ and Hybrid veh
Slide 25: Electric vehicles
Electric vehicles uYilo eMobility Program, a multi-stakeholder, collaborative program that aims to foster and facilitate e-mobility in South Africa, states: Electric cars sold from 2013 to mid-2021 Sales in South Africa Sales in Europe + 710 BEVs + 336,000 BEV's + 690 PHEVs 147% yoy a 300 a * 5,116
Slide 26: EV Constraints
PF EV Constraints Several key constraints have limited both the widespread adoption and local production of EVs in South Africa to date. Battery replacement Taxation + EV batteries on average are guaranteed for 8 years or 160 000km. + EVs are stil heavily taxed at 25% import tax vs. ICE at 18% + Rep
Slide 27: Changing customer behaviour
Traditional Purchases J Changing customer behaviour + The digital adoption in our industry has accelerated. + Motus identified that the customer search and transacting behaviour is fast evolving. + Customers do not always want to follow the linear vehicle purchase journey. - Customers now want to en
Slide 28: motus.cars
PF motus.cars Why motus.cars + Create a significant lead generator for the wider group. Introduce a digital sales journey and over time provide the ability to conclude full transactions online. + Offer flexibility as digital journey remains parallel to the existing traditional sales journey. - Evolv
Slide 29: Digitisation
A Digitisation The key objectives in our digitisation strategy can be categorized as follows: Enhance + Offer customer omni-channel engagement. customer . experience + Sales support tools offered to assist customer. + Integration will reduce duplication and enhance experience. Create uniformity & +
Slide 30: Architecture, Technology, Data and Analytics
Architecture, Technology, ; 6 | Customer Data and Analytics : oe — é System “NX . Collation of Customer and Vehicle Data in a central ‘ Aggregators IntelliApp : ~ The orchestration A - Leverage GetWorth’s data technology and machine 4 layer provides direct learning capabilities to extract insights f
Slide 31: Thank you
Thank you
Slide 32: Importers
Importers Niall Lynch CEO – Hyundai
Slide 33: Importers I Key statistics
Importers I Key statistics Hyundai Kia Renault Mitsubishi Total Duration of the exclusive distribution relationship (years) 22 24 30 15 Total sales since start of distribution to December 2021 (units) 672 726 269 556 323 512 25 824 1 291 618 Average sales per annum (units) 37 000 25 000 25 000 3000
Slide 34: New vehicles I Average finance value
New vehicles I Average finance value 40% 35% 2019 2022 34% 35% 29% 30% 25% 20% 20% 16% 14% 12% 12% 15% 9% 10% 7% 7% 5% 5% 0% R0k-R200k R200k - R300k R300k - R400k R400k - R500k R500k - R600k R600k + 81% of new vehicles financed for < R500k 34 Reference: NAAMSA - Absa Vehicle and Asset Finance BULLET
Slide 35: Total Passenger Market Share Segments I 2021
Total Passenger Market Share Segments I 2021 calendar year Total Passenger Market Category Volume Share Total 5 Door Hatch 127 233 40,5% 23,6% Motus 5 Door Hatch 43 606 34,3% Total SUV & Crossover 128 507 41,5% Motus SUV & Crossover 26 363 20,5% Total Other 58 038 18,0% 76,4% Motus Other 4 163 7,2%
Slide 36: Dealer Representation I 2021 calendar year
Dealer Representation I 2021 calendar year 78% Motus Independent Motus Share Brand Owned Dealers Total of Dealer 72% Sales Hyundai 53 53 106 Kia 35 33 68 Renault 24 62 86 40% Mitsubishi 10 38 48 30% Total 122 186 308 Hyundai Kia Renault Mitsubishi 36
Slide 37: Customer Journey Map
Customer Journey Map Website Visits Lead Generation Users are directed to the Digital leads are received by relevant website. dealer staff in a matter of Motus importer sites currently seconds and the customer is generate 9,5 million visits per contacted. annum. Users view an advert Lead Sale/Delive
Slide 38: How Hedging Works
How Hedging Works January - Sales demand planning 1 - Purchase forward cover for order 2 February - Submit indicative order 3 April - Confirm the order Timeline example 4 June - Production month (open the Letter of Credit) 5 • Focus on buying currency below the costing rate July - Shipment & payment
Slide 39: After Sales
After Sales Hyundai Kia Renault Mitsubishi Total Total sales since inception 672 726 269 556 323 512 25 824 1 291 618 Warranty vehicle parc at December 2021 172 053 80 510 100 225 8 528 361 316 S&M plan vehicle parc at December 2021 135 806 59 709 65 124 10 027 270 666 Annual workshop vehicle throug
Slide 40: New Model Launches I 2022
New Model Launches I 2022 Month Hyundai Kia Renault Mitsubishi January Staria Multicab Sorento & Carnival February Tucson Clio 5 March Grand Creta April i30 N & Kona N July Creta PE* & Staria Panelvan Triber Express August Triton Single Cab September Sportage Xpander October Palisade PE* Carens Traf
Slide 41: Electric Vehicles I What does the future look like?
Electric Vehicles I What does the future look like? • No Government assistance. 25% Import duties, ad-valorem, etc. applies to all EV imports. • Infrastructure challenges - charging stations and reliable electricity supply. • Most brands are adding an EV or plug-in hybrid as part of their line-up, b
Slide 42: Thank you
Thank you
Slide 43: Aftermarket Parts
Aftermarket Parts Malcolm Perrie CEO – Aftermarket Parts
Slide 44: Composition of Aftermarket Parts
Composition of Aftermarket Parts Part Categories Wear parts - service Mechanical failure Crash parts Each vehicle has ~ 30,000 parts Translates to ~ 2,000 moving parts 44
Slide 45: South African market I The numbers game
South African market I The numbers game Car parc 12 million vehicles 3,000 model variants 1,500 platform variants Parts 30,000 parts per vehicle Amounts to 90 million different parts Active 2,000 active Amounts to 1,500 Amounts to wear wear parts 6 million active platform 3 million active parts per
Slide 46: What is the Aftermarket?
What is the Aftermarket? • Replacement Parts post the sale of the vehicle The • The OES1 market – generally captive by the OEM’s Aftermarket • The independent aftermarket • The non-OEM participants White 2nd Hand Motus Motus Aftermarket Parts Box (Used) • The “biggest” market in replacement market •
Slide 47: Global trends and market opportunity
Global trends and market opportunity Market The EV Vertical Distributor Revolution Integration Consolidation • Driven by ESG and government • Increased requirement for investment • Distributors looking for full channel legislation in working capital margin control • Different players entering market
Slide 48: Motus Aftermarket model I Revenue & margin streams
Motus Aftermarket model I Revenue & margin streams Stream 1 Stream 2 Stream 3 – Aggregate product – Wholesale distribution – Retail Functions Functions Functions 1. Source components from multiple sources to: 1. Source product to store & distribute to resellers 1. Source products from “own” wholesal
Slide 49: The Aftermarket value chain
The Aftermarket value chain R 100 Cost + Margin R 900 Minimise Cost – Own and Maximise margin Digitisation 49
Slide 50: Digitisation journey
Digitisation journey In development Enabled by >30% WIP 100% end-to- end EDI AutoCat Autocat catalogue connectivity 100% 100% EDI EDI 50
Slide 51: The impact of EV on vehicle parc
The impact of EV on vehicle parc Globally Locally • Quicker uptake in 1st world versus emerging • Slower uptake as a result of: markets • Affordability and price disparity of EV vs ICE • Impact specifically of drive line components – • Poor electrical infrastructure engine, gearbox (~25% of current
Slide 52: EV erosion of SA car parc
EV erosion of SA car parc The EV revolution will have a limited impact on aftermarket parts as a result of long-life for ICE vehicles, coupled with the growing market for EV parts. 52
Slide 53: Opportunities
Opportunities Far East United Kingdom – Further expansion into “Aggregator” – Further expansion into wholesale & market retail channels – Supply chain optimisation driving – UK eCommerce market efficiency Market: 35 million ICE car parc Australia − Specialised distribution South Africa (similar to A
Slide 54: Sustainability & Innovation
Sustainability & Innovation 3D Printing Robotics • For slow moving, exotic parts • Assist in picking and binning • No inventory • Use of “Ketty Bot” • On demand manufacture • Will improve productivity • Reduce personnel movement • No waste • Under investigation • Currently in use at Beekman in R&D 5
Slide 55: Thank you
Thank you
Slide 56: Financial guidance
Financial guidance Ockert Janse van Rensburg CFO – Motus Holdings Limited
Slide 57: Guidance for year ending June 2022
Guidance for year ending 30 June 2022 Operational performance exceeding expectations. Projection Actual Percentage Earnings for the year to 30 June 2022 for the year to 30 June 2021 range R3 040 million to Attributable profit R2 098 million 45% to 55% R3 250 million 1 730 cents per share to Earnings
Slide 58: Guidance for year ending June 2022 (continued)
Guidance for year ending 30 June 2022 (continued) Share buy-backs (millions) Unbundling to 30 June 2021 1 July 2021 to 30 June 2022 Total number of ordinary shares in issue (opening balance) 202 189 Total shares bought back & cancelled (16) (12) Conversion of deferred ordinary shares into ordinary s
Slide 59: Guidance for year ending June 2022 (continued)
Guidance for year ending 30 June 2022 (continued) Projection Actual Debt covenants for the year to 30 June 2022 for the year to 30 June 2021 Requirement Net Debt: EBITDA Below 1,2 times 0,8 times Less than 3 EBITDA: Net Interest Above 15 times 10,9 times Greater than 3 Motus has healthy cash generat
Slide 60: Thank you
Thank you
Slide 61: 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