Motus Holdings Limited · JSE:MTH
Motus — FY2020 Earnings Presentation
39 slides from Motus's earnings presentation, Sep 16, 2020
Slide 1: Annual results presentation
Annual results presentation for the year ended 30 June 2020
Slide 2: Agenda
Agenda 1 Resilient business model 8 Financial overview 2 Business segment overview 9 Sustainability 3 Trading context 10 Strategy 4 Response to the COVID-19 crisis 11 Prospects 5 Impact of COVID-19 per segment 6 The South African vehicle market and our share 7 Financial performance features 2
Slide 3: Resilient business model
Osman Arbee Ockert Janse van Rensburg Resilient business model 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) and Australia and limited presence in South East Asia and S
Slide 4: Business segment overview
Osman Arbee Ockert Janse van Rensburg Business segment overview Import and Retail and Financial Aftermarket Distribution Rental Services Parts − Exclusive South African importer of Hyundai, − Retail > 110 000 new vehicles & >75 000 − Developer & administrator of innovative − Distributor, wholesaler
Slide 5: Trading context
Osman Arbee Ockert Janse van Rensburg Trading context COVID-19 has negatively impacted economies throughout the world, coupled with political & economic situations which remain unstable & a contracting vehicle market − Economic outlook remains challenging; − Consumer & investor confidence is depress
Slide 6: Response to the COVID-19 crisis
Osman Arbee Ockert Janse van Rensburg Response to the COVID-19 crisis Group wide salary Cost reductions Assistance reductions for across all from OEMs & 1 Strategic flexibility & agility employees earning categories, suppliers over R250 000 p.a. including deferral of property rentals 2 Cash preserva
Slide 7: Response to the COVID-19 crisis - Health and safety of our people
Osman Arbee Ockert Janse van Rensburg Response to the COVID-19 crisis - Health and safety of our people − Sadly, five Motus employees have succumbed to the virus. − 538 employees have tested positive, with 93% recovered. No customers have been impacted on our premises. − Compliance with all Dept. of
Slide 8: Impact of COVID-19 per segment
Osman Arbee Ockert Janse van Rensburg Impact of COVID-19 per segment Impact on the vehicle market − South African new vehicle sales slumped 98% in April & 68% in May year-on-year. Import and Retail − Projected calendar year contraction of over 30% for 2020. Distribution Our response − Engaged with O
Slide 9: Impact of COVID-19 per segment (cont.)
Osman Arbee Ockert Janse van Rensburg Impact of COVID-19 per segment (cont.) Impact on car rental market − Significant car rental market contraction. Rental Our response − Reduced car rental fleet by 35% (7 000 vehicles). − Rightsized operations by closing 19 outlets & reducing the rental workforce
Slide 10: Impact of COVID-19 per segment (cont.)
Osman Arbee Ockert Janse van Rensburg Impact of COVID-19 per segment (cont.) Impact on Financial Services Financial − Protected by annuity income streams in the medium term. Services − Reduced income from financial institution JVs. Our response − Extended service intervals under service & maintenanc
Slide 11: Impact of COVID-19 per segment (cont.)
Osman Arbee Ockert Janse van Rensburg Impact of COVID-19 per segment (cont.) Impact on the Aftermarket Parts Aftermarket − Reduced demand for accessories & parts. Parts − Down-trading from premium products to more affordable alternatives. Our response − Provided parts to essential service vehicles (
Slide 12: The South African vehicle market and our share
Osman Arbee Ockert Janse van Rensburg The South African vehicle market and our share South African vehicle market South African vehicle market (calendar years) (financial year) Actual Actual 2019 2019 536 626 vehicles 542 441 vehicles Projection Actual 2020 2020 350k – 380k vehicles 441 586 vehicles
Slide 13: Financial performance features
Osman Arbee Ockert Janse van Rensburg Financial performance features Revenue Operating Earnings Headline earnings Free cash flow profit per share per share generated from R73 417 R2 136 165 cents 296 cents operations million million per share per share R3 004 (June 2019: R79 711 million) (June 2019:
Slide 14: Financial overview
Osman Arbee Ockert Janse van Rensburg Financial overview Extracts of Statement of Profit or Loss for the year ended 30 June 2020 % Rm 2020 2019 change Revenue 73 417 79 711 (8) Operating profit 2 136 3 620 (41) Operating profit % 2,9 4,5 Net finance costs (1 116) (774) 44 Profit before tax and restr
Slide 15: Financial overview (cont.)
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Once-off items impacting performance Earnings were negatively impacted as a result of once-off costs & a deferred tax asset write-down. Goodwill & other intangible Property impairments, Deferred tax asset Retrenchment costs asset impai
Slide 16: Financial overview (cont.)
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Extracts of Statement of Profit or Loss for the year ended 30 June 2020 (cont.) % Rm 2020 2019 change Profit before tax 541 2 610 (79) Income tax expense (356) (714) (50) Effective tax rate 68,6% 27,6% Profit for the year 185 1 896 (90
Slide 17: Financial overview (cont.)
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Earnings % Rm 2020 2019 change Operating profit 2 136 3 620 (41) Earnings 306 1 868 (84) Headline earnings 550 1 977 (72) Weighted average number of shares (million) 186 196 (5) Earnings per share (cents) 165 953 (83) Headline earnings
Slide 18: Financial overview (cont.)
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Operating profit diversification Retail and Rental Import and Distribution Aftermarket Parts Financial Services Operating 14% profit 25% Segment Segment 41% 39% Operating Profit* Operating Profit* June 2020 June 2019 13% 34% 13% 20% 18
Slide 19: Business segment overview - Import and Distribution
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Business segment overview - Import and Distribution % change % change HY1 2020 HY1 2019 HY2 2020 HY2 2019 2020 2019 % change Unaudited unaudited pro forma pro forma audited audited 2019 audited Revenue (Rm) 10 158 4 7 253 (21) 17 411 1
Slide 20: Business segment overview - Import and Distribution (cont.)
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Business segment overview - Import and Distribution (cont.) − Forward cover for the short term − Hyundai & Kia have forward cover to March 2021 at average rates of: − R16,80: Euro; & − R15,70: US Dollar. − Renault does not take forward
Slide 21: Business segment overview - Retail and Rental
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Business segment overview - Retail and Rental % change % change HY1 2020 HY1 2019 HY2 2020 HY2 2019 2020 2019 % change unaudited unaudited pro forma pro forma audited audited 2019 audited Revenue (Rm) 34 265 7 25 633 (22) 59 898 65 041
Slide 22: Business segment overview - Retail and Rental (cont.)
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Business segment overview - Retail and Rental (cont.) South Africa Retail operating profit declined by 53% due to: − decline in sales volumes of 12%, − change in the mix of vehicles sold, − reduction in profitability of premium branded
Slide 23: Business segment overview - Retail and Rental (cont.)
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Business segment overview - Retail and Rental (cont.) United Kingdom Retail revenue decreased by 44% in the last quarter resulting in operating profit reducing by 138% mainly as a result of: − reduced volumes of 18%; − poor performance
Slide 24: Business segment overview - Financial Services
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Business segment overview - Financial Services % change % change HY1 2020 HY1 2019 HY2 2020 HY2 2019 2020 2019 % change unaudited unaudited pro forma pro forma audited audited 2019 audited Revenue (Rm) 1 126 (1) 1 047 1 2 173 2 172 - O
Slide 25: Business segment overview - Aftermarket Parts
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Business segment overview - Aftermarket Parts % change % change HY1 2020 HY1 2019 HY2 2020 HY2 2019 2020 2019 % change unaudited unaudited pro forma pro forma audited audited 2019 audited Revenue (Rm) 3 433 5 2 617 (18) 6 050 6 442 (6)
Slide 26: Statement of Financial Position as at June 2020
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Statement of Financial Position as at 30 June 2020 % Rm 2020 2019 change Goodwill and intangible assets 1 671 1 273 31 Property, plant and equipment 7 784 7 198 8 Right-of-use assets 2 279 - >100 Investments in associates and joint ven
Slide 27: Net working capital as at June 2020
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Net working capital as at 30 June 2020 % Rm 2020 2019 change Inventories 20 179 19 069 6 Trade and other receivables 4 040 4 744 (15) Floorplans from suppliers (6 511) (5 619) 16 Trade and other payables (8 385) (9 716) (14) Provisions
Slide 28: Statement of Financial Position as at June 2020 (cont.)
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Statement of Financial Position as at 30 June 2020 (cont.) Rm % Liabilities 2020 2019 change Core Debt (5 794) (4 777) 21 Floorplans from financial institutions (1 648) (1 841) (10) Lease liabilities (2 658) - >100 Contract Liabilities
Slide 29: Statement of Cash flows
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Statement of Cash flows Rm 2020 2019 0 Cash generated from operations before movements in net working capital 3 788 4 819 Movements in net working capital 333 (636) Cash generated by operations before interest, tax paid and capital exp
Slide 30: Statement of Cash flows (cont.)
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Statement of Cash flows (cont.) Rm 2020 2019 Free cash flow generated from operations 3 004 3 061 Net capital expenditure – vehicles for hire (795) (318) Cash generated by operations 2 209 2 743 Net cash outflow from the acquisitions a
Slide 31: Reconciliation of debt
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Reconciliation of debt Rm % Reconciliation of debt 2020 2019 change Core interest-bearing debt 5 794 4 777 1 017 Floorplans from financial institutions 1 648 1 841 (193) Lease Liabilities 2 658 - 2 658 Debt movement per statement of fi
Slide 32: Gearing (total including floorplans)
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Gearing (total including floorplans) Funding 72% 74% 63% 63% − Net debt to equity is 60% (June 2019: 56%) 60% 56% 51% − Debt (excluding floorplans) is 21% higher mainly due to working capital requirements & acquisitions − Current net d
Slide 33: Facilities and debt covenants
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Facilities and debt covenants 6,2 R7,6bn R5,8bn Covenant <3 times Covenant >3 times 3,6 Relaxed Covenant Relaxed Covenant unutilised unutilised <4,5 times >2,5 times banking banking 2,2 facilities facilities 1,4 (including floorplans)
Slide 34: Sustainability
Osman Arbee Ockert Janse van Rensburg Sustainability Remain committed to enabling socio-economic growth, creating employment & making a difference in our communities. Corporate social commitments COVID-19 contributions − Operating in an environmentally conscious & − Contributed R4m to the Solidarity
Slide 35: Strategy
Osman Arbee Ockert Janse van Rensburg Strategy Drive innovation Adapt to the changing Ensure market Invest in human capital Deliver stakeholder through improved trading environment leadership & change management value technology Agile & entrepreneurial Grow market share & Develop & empower Enhance f
Slide 36: Prospects
Osman Arbee Ockert Janse van Rensburg Prospects − We have a sound balance sheet, supported by strong cash flows. − We have a management team that demonstrates integrity, agility & an unbreakable entrepreneurial spirit. − Our revised short-term focus is to anticipate the “new normal” that will exist
Slide 37: Thank you!
Motus Thank you!
Slide 38: 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 39: Pro forma Disclaimer
Pro forma Disclaimer To provide a more meaningful assessment of the Group’s performance for the year, pro forma information has been included under the segment performance section in the preliminary summarised audited results for the year ended 30 June 2020, and this accompanying presentation in the