Karooooo Ltd. · NASDAQ:KARO
Karooooo — Q3 FY24 Earnings Presentation
24 slides from Karooooo's earnings presentation, Jan 15, 2024
Slide 1: Earnings Presentation Q3 FY24
Earnings Presentation Q3 FY24 1
Slide 2: Disclaimer: Forward-Looking Statements
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: Carzuka, Karooooo Logistics, Cartrack ownership structure
NASDAQ TICKER “KARO” JSE TICKER “KRO” 100% 100% 70.1% CARZUKA KAROOOOO LOGISTICS Founded in South Africa, now headquartered in Singapore 3
Slide 4: Setting the Path for Tomorrow
SETTING THE PATH FOR TOMORROW THINKING BEYOND CONNECTED VEHICLES AND EQUIPMENT 4
Slide 5: Karooooo is a constant driving force for every km travelled
KAROOOOO IS A CONSTANT DRIVING FORCE FOR EVERY KM TRAVELLED, EVERY MINUTE WORKED WE CONTINUE DRIVING STRONG VALUE-ADDING PRODUCT INNOVATION AND ENHANCEMENT QUARTERLY COMPLIANCE AND ESG WORKFORCE & ASSET MANAGEMENT AND OPTIMISATION DRIVER & WORKER SAFETY AND WELLBEING REAL-TIME VISIBILITY OF VEHICLES
Slide 6: Robust AI cameras pioneer safety and risk management
ROBUST AI CAMERAS PIONEER SAFETY & RISK MANAGEMENT IN EVERY OPERATION MINING MASS BUS TRANSPORTATION CORPORATE -59% IN FATIGUE & DISTRACTION WITH UP TO 41% REDUCTION IN FATIGUE INCREASED WORKER RETENTION WITH OVER 1,400 HIGH-RISK SAFETY AND DISTRACTION FOR LEADING BUS CLOUD-BASED ACCIDENT EVIDENCE E
Slide 7: Over 113,000 customers power their operations
OVER 113,000 CUSTOMERS POWER THEIR NO INDUSTRY OR CUSTOMER CONCENTRATION RISK OPERATIONS AI AND MACHINE LEARNING ENHANCED USING OUR 170 BN+ VALUABLE DATA POINTS COLLECTED MONTHLY WITH STRONG NETWORK EFFECTS CLOUD PLATFORM 7
Slide 8: The Cartrack DNA fuels hard-to-replicate differentiators
THE CARTRACK DNA FUELS HARD-TO-REPLICATE DIFFERENTIATORS KEY DIFFERENTIATORS WHY BEST-IN-CLASS TALENT CHOOSES US UNIQUE CULTURE INNOVATION & CREATIVITY VERTICAL INTEGRATION OWNERSHIP & ENTREPRENEURSHIP TEAM WITH A ABILITY TO EXECUTE ON LONG-TERM EASY-TO-USE SOLUTIONS AGILITY & ADAPTABLE MINDSET BUIL
Slide 9: Financial Performance for Q3 FY24
Financial Performance for Q3 FY24 9
Slide 10: Decade-plus strong track record of growth at scale
KAROOOOO HAS A DECADE-PLUS STRONG TRACK RECORD OF GROWTH AT SCALE UP 17% UP 20% (1) Subscription Revenue ARR Q3 FY24 ZAR 904M Q3 FY24 ZAR 3,711M Q3 FY23 ZAR 772M Q3 FY23 ZAR 3,097M UP 31% UP 35% Operating Profit Earnings Per Share Q3 FY24 ZAR 275M Q3 FY24 6.34 Q3 FY23 ZAR 209M Q3 FY23 4.70 (1) ARR i
Slide 11: High cash conversion and strong financial discipline
KAROOOOO’S HIGH CASH CONVERSION AND STRONG FINANCIAL DISCIPLINE ZAR M ZAR M Earnings Total Earnings and Free Cash Flow Free Cash Flow ZAR231 million was invested in 199 the development 178 of the South 171 162 158 162 African central 156 157 155 147 150 office 113 1,244 1,009 106 97 74 68 Q4 FY22 Q1
Slide 12: 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 ZAR M (1) USD18.6m dividend paid 1,137 Healthy (2) Strong unit economics USD26.3m dividend paid 1,001 966 Debtor’s Days 30 799 854 (1) 819 782 Robust operating margins 718 (2) 664 651 Unleveraged balance
Slide 13: Earnings per share after making provisions for Carzuka
KAROOOOO’S EARNINGS PER SHARE AFTER MAKING PROVISIONS FOR CARZUKA UP 35% EPS Growth ZAR EPS Reconciliation Q3 FY24 6.34 6.34 (1) Q3 FY23 4.70 FY22 FY23 Q1 FY24 Q2 FY24 Q3 FY24 5.61 5.09 4.96 4.93 4.72 4.70 4.70 CARTRACK 16.57 20.61 5.40 5.89 6.96 3.90 3.85 CARZUKA(2) (0.40) (1.42) (0.39) (0.42) (0.7
Slide 14: Cartrack extends decade-plus track record of execution excellence
CARTRACK EXTENDS DECADE-PLUS TRACK RECORD OF EXECUTION EXCELLENCE Scale Growth Profitability Subscribers Subscription Revenue Operating Profit 000s ZAR M ZAR M 1,908 900 295 1,833 858 1,758 834 1,717 1,679 793 252 771 248 1,600 232 733 224 1,526 1,543 707 221 222 1,470 209 670 1,409 663 198 1,366 62
Slide 15: Cartrack extends decade-plus track record of EPS growth
CARTRACK EXTENDS DECADE-PLUS TRACK RECORD OF EPS GROWTH 6.96 ZAR 5.89 5.40 UP 34% 5.18 5.20 5.12 5.11 (1) 4.85 (1) (1) 4.03 3.96 3.73 (1) Q3 FY24 6.96 Q3 FY23 5.20 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY22 FY22 FY22 FY22 FY23 FY23 FY23 FY23 FY24 FY24 FY24 EARNINGS BENEFITTING FROM STRONG ECONOMIES OF SC
Slide 16: Cartrack top and bottom line growth
CARTRACK CONTINUES WITH DECADE-PLUS TRACK RECORD OF TOP AND BOTTOM LINE GROWTH UP 17% UP 14% UP 20% (1) Subscription Revenue Revenue ARR Q3 FY24 ZAR 900M Q3 FY24 ZAR 919M Q3 FY24 ZAR 3,695M Q3 FY23 ZAR 771M Q3 FY23 ZAR 804M Q3 FY23 ZAR 3,090M UP 33% UP 29% (2) UP 14% Operating Profit Adjusted EBITDA
Slide 17: Cartrack demonstrates its ability to expand margins
CARTRACK DEMONSTRATES ITS ABILITY TO EXPAND MARGINS UP 19% UP 33% UP 29% (1) Gross Profit Operating Profit Adjusted EBITDA Q3 FY24 ZAR 672M Q3 FY24 ZAR 295M Q3 FY24 ZAR 447M Q3 FY23 ZAR 564M Q3 FY23 ZAR 222M Q3 FY23 ZAR 346M UP 3% UP 4% UP 6% (1) Gross Profit Margin Operating Profit Margin Adjusted
Slide 18: Cartrack leading unit economics
CARTRACK LEADING UNIT ECONOMICS Lifetime Value of Low Cost of Acquiring a Strong Benefits from (1) Customer Relationships Customer (2) Economies of Scale ▲ 95% Q3 FY24 Gross Profit Margin based only on Subscription Revenue >9x Commercial Customer 75% LTV to CAC Retention Rate Q3 FY23: 72% WELL POSIT
Slide 19: Cartrack's strong subscriber unit economics continue
CARTRACK’S STRONG SUBSCRIBER UNIT ECONOMICS CONTINUE Average Cost of adding a Subscriber to our cloud (1) Average Cost of Acquiring a Subscriber takes into account vehicles for new & existing customers ZAR 2,363 2,264 2,231 Q1 Q2 Q3 2,160 2,093 2,070 FY21 FY22 FY23 FY24 FY24 FY24 880 1,002 ARPU (ZAR
Slide 20: Subscriber base and ARR growth, traction in Southeast Asia
CARTRACK CONTINUES TO GROW SUBSCRIBER BASE & ARR WITH ENCOURAGING TRACTION IN SOUTHEAST ASIA ARR (1) ZAR M ▲ 20% Q3 Q3 Q3 Q-on-Q 3,695 ‘000s Subscribers FY22 FY23 FY24 Change SOUTH AFRICA 1,141 1,290 1,447 12% ASIA, MIDDLE EAST, USA 138 175 221 26% EUROPE 124 141 161 15% 3,090 AFRICA- OTHER 67 73 79
Slide 21: Cartrack operating metrics
CARTRACK OPERATING METRICS YTD Q3 FY21 FY22 FY23 2024 Subscription Revenue Gross Profit Margin 72% 70% 73% 72% Research & Development as a % of Subscription Revenue 5% 6% 6% 6% Sales & Marketing as a % of Subscription Revenue 11% 13% 13% 14% General & Administration as a % of Subscription Revenue 22
Slide 22: Cartrack's outlook for 2024 remains unchanged
CARTRACK’S OUTLOOK FOR 2024 REMAINS UNCHANGED YTD Q3 FY21 FY22 FY23 2024 FY24 Outlook Number of Subscribers (000s) 1,306 1,526 1,717 1,908 1,900 – 2,100 Cartrack’s Subscription Revenue (ZAR M) 2,209 2,566 3,004 2,592 3,400 – 3,600 Cartrack’s Operating Profit Margin 32% 27% 30% 29% 28% – 31% YTD Q3 2
Slide 23: Karooooo Logistics continues to gain traction
KAROOOOO LOGISTICS CONTINUES TO GAIN TRACTION Karooooo Logistics (1) Karooooo Logistics (1) Revenue Operating Profit ZAR M ZAR M 91 8 7 72 62 56 5 54 41 2 2 28 1 24 18 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY22 FY22 FY23 FY23 FY23 FY23 FY24 FY24 FY24 FY22 FY22 FY23 FY23 FY23 FY23 F
Slide 24: Thank You
YN A KAROOOOO Thank You