Combined Motor Holdings Limited · JSE:CMH
Combined Motor — Investor Presentation (April 2019)
21 slides from Combined Motor's investor presentation, April 2019
Slide 1: Presentation to analysts
Presentation to analysts April 2019
Slide 2: Group Financial Highlights
GROUP FINANCIAL HIGHLIGHTS 2
Slide 3: Headline Earnings and Dividends per Share
HEADLINE EARNINGS AND DIVIDENDS PER SHARE Compound growth over 7 years ➢ Earnings – 14% ➢ Dividends – 22 % 3
Slide 4: Return on Shareholders' Funds (%)
RETURN ON SHAREHOLDERS’ FUNDS (%) 4
Slide 5: Net Asset Value per Share (cents)
NET ASSET VALUE PER SHARE (cents) 5
Slide 6: Operating Margin
OPERATING MARGIN <CMH VAI) 4.2% 3.9% 3.6% 3.7% 3.3% 3.1% 2.9% 2.6% iI | | 2012 +2013 2014 2015 2016 2017 2018 2019
Slide 7: CMH Shares Traded
CMH SHARES TRADED Years ended 28 February 2019 2018 2017 2016 2015 Volume of shares traded ('000) 11,900 15,924 11,977 24,319 8,168 Value of shares traded (R'000) 323,364 383,281 206,038 396,872 101,395 Average price per share traded (cents) 2 717 2 407 1 720 1 632 1 241 Year-end market price (cents
Slide 8: Year-End Share Price and PE Ratio
YEAR-END SHARE PRICE AND PE RATIO 8
Slide 9: Segment Profit Contribution
SEGMENT PROFIT CONTRIBUTION 2019 2018 2017 2016 2015 % % % % % Retail motor 65 70 65 66 68 Car hire 16 19 21 18 16 Financial services 13 10 12 14 16 Corporate services / other 6 1 2 2 - 100 100 100 100 100 9
Slide 10: Industry New Vehicle Sales
INDUSTRY NEW VEHICLE SALES SALES (‘000 UNITS) - CALENDAR YEAR ➢ National vehicle sales - decreased 1,3% ➢ CMH vehicle sales - increased 1,9% 10
Slide 11: Segment Analysis – Retail Motor
SEGMENT ANALYSIS – RETAIL MOTOR GROUP NEW UNIT SALES BY MANUFACTURER (%) * Compared to volume dealers Land Rover, Jaguar and UD Truck produce approximately 4 times the revenue per unit and Volvo 2 times the revenue per unit. 11
Slide 12: Retail Motor Focus
RETAIL MOTOR FOCUS ➢ Volumes ➢ use digital technology to increase sales volume through existing customer base, and new customers ➢ marketing drive ➢ customer service ➢ top quality offering ➢ Margins ➢ Improve gross margins using manufacturer incentive schemes ➢ Merge smaller franchises into existing
Slide 13: Retail Motor Focus
RETAIL MOTOR FOCUS ➢ Acquisitions ➢ Cash resources available ➢ 3 dealerships added, 1 in pipeline ➢ Testing the water ➢ SAM (service all makes) ➢ UCB (used car buyers) 13
Slide 14: Car Hire Focus
CAR HIRE FOCUS ➢ Proud 10-year trend of profit increase interrupted: ➢ decline of 30% in profit on sales of retired fleet ➢ fleet size slightly reduced ➢ utilization and average daily hire rate remain stable ➢ economic decline – reduced corporate hires, and replaced with in-bound tourism, and vehicl
Slide 15: Car Hire Focus
CAR HIRE FOCUS ➢ Technology ➢ self-service, touch-screen check-out / in ➢ electronic documentation production and storage ➢ cost savings ➢ Brand awareness – market share – trust shown by international tour operators 15
Slide 16: Financial Services
FINANCIAL SERVICES ➢ Restructure ➢ Develop own-branded products, reduce “middle man” costs ➢ Sales penetration 16
Slide 17: Black Economic Empowerment
BLACK ECONOMIC EMPOWERMENT ➢ Group scorecard rating - level 8 6 ➢ Car hire scorecard rating - level 3 2 ➢ CMH First Fleet Solutions - level 3 2 ➢ Both Car Hire and First Fleet have 51% black ownership ➢ Group scorecard adversely affected by motor manufacturers from which the majority of procurement
Slide 18: Peer Comparison
PEER COMPARISON CMH Motus Super P/E ratio 6,9 10 10,3 Dividend yield 8,6 2,6 0,0 18
Slide 19: Prospects
PROSPECTS ➢ Re-organization of Gateway / Cornubia dealerships completed – renewed focus ➢ Improved penetration by Ford expected – supply problems caused 19% market share loss (800 new and 400 used units) – now resolved ➢ Launch of new models ➢ Evogue Range Rover launched in May – most affordable mod
Slide 20: Prospects
PROSPECTS ➢ Carshop – Used car sales platform ➢ creating as many leads as major competitors ➢ Solid balance sheet – minimal intangible assets ➢ Strong cash flow generation ➢ Experienced, stable management team ➢ 35% profit underpinned by car hire, financial services and corporate services 20
Slide 21: Prospects
PROSPECTS ➢ Franchises for powerful brand names – Ford, Nissan, Toyota, Mazda, Volvo, Land Rover etc ➢ Track record of profit, dividends and ROE over many years The missing ingredient….. revenue boost, driven by economic growth 21
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