Combined Motor Holdings Limited · JSE:CMH
Combined Motor — FY2023 Earnings Presentation
22 slides from Combined Motor's earnings presentation, May 2023
Slide 1: Financial Presentation 2023
FINANCIAL : | PRESENTATION 2023 COMBINED MOTOR HOLDINGS
Slide 2: Group Financial Highlights
GROUP FINANCIAL HIGHLIGHTS GROUP FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED 28 FEBRUARY 2023 2023 2022 % Change Total assets (R’000) 4,976,881 3,778,740 31.7 Cash resources (R’000) 761,876 817,739 (6.8) Net asset value per share (cents) 1,690 1,484 13.9 Revenue (R’000) 12,434,375 11,167,798 11.3 Operat
Slide 3: Macro
MACRO • Challenging economic environment - rising interest rates - prime rate - January 2022 – 7.50% - March 2023 – 11.25% - volatile exchange rate - fuel price increases - worsening power cuts - poor governance - lack of decisive leadership • On the positive side - “end” of Covid - increase in tour
Slide 4: Group Overview
GROUP OVERVIEW • Revenue increase driven by: - higher new vehicle volumes in second half - vehicle price increases (used – first half, new – second half) - car hire growth • Dealership upgrades in conformity with manufacturer standards • Electricity-replacement costs - generators and diesel - solar
Slide 5: Group Overview
GROUP OVERVIEW • goodwill impaired - R17.6 million – under-performing dealership which has been restructured • exceptional return on shareholders’ funds – 37% • sound balance sheet • strong cash flow generation • dividend proposed – 240 cents vs 225 cents 4
Slide 6: Group Income Statement
GROUP INCOME STATEMENT GROUP INCOME STATEMENT 2023 2022 R'000 R'000 Revenue 12,434,375 11,167,798 Cost of sales -10,037,459 -9,097,650 Gross profit 2,396,916 2,070,148 Gross profit % 19.3 18.5 Other income 26,094 16,963 Goodwill impaired -17,671 0 Selling and operating expenses -1,631,927 -1,480,965
Slide 7: Operating Margin
OPERATING MARGIN 6.4% 7.0% 6.0% 5.4% 5.0% 4.1% 4.0% 4.0% 3.7% 4.0% 3.0% 2.0% 1.0% 0.0% 2018 2019 2020 2021 2022 2023 6
Slide 8: Cash Resources (R'million)
CASH RESOUCES (R’million) 900 818 800 755 762 700 676 660 600 500 400 373 300 200 100 0 2018 2019 2020 2021 2022 2023 7
Slide 9: Black Economic Empowerment
BLACK ECONOMIC EMPOWERMENT • Group scorecard rating - level 4 • Car Hire scorecard rating - level 2 • CMH First Fleet Solutions - level 2 • Both Car Hire and First Fleet have 51% black ownership qualification • Group scorecard adversely affected by motor manufacturers from which the majority of proc
Slide 10: CMH Shares Traded
CMH SHARES TRADED 2023 2022 2021 2020 2019 2018 Volume of shares traded ('000) 9,830 12,162 11,227 9,147 11,900 15,924 Value of shares traded (R'000) 277,718 283,365 145,439 191,500 323,364 383,281 Average price per share traded (cents) 2,825 2,330 1,295 2,093 2,717 2,407 Year-end market price (cent
Slide 11: Annualised Returns
Annualised Returns Annualised returns with dividends reinvested to 31 December 2021* Period p.a Return R1000 Growth Inflation p.a 3 years 12.51% R1,424 4.18% 5 years 14.21% R1,943 4.35% 10 years 18.62% R5,516 5.01% *Data provided by Profile data 10
Slide 12: Segment Profit Contribution
SEGMENT PROFIT CONTRIBUTION 2023 2022 2021 2020 2019 2018 % % % % % % Motor retail / distribution 44 66 86 57 64 70 Car hire 43 23 -2 17 17 19 Financial services 12 11 12 17 14 10 Corporate services / other 1 0 4 9 5 1 100 100 100 100 100 100 11
Slide 13: Motor Retail / Distribution: Industry New Vehicle Sales
MOTOR RETAIL / DISTRIBUTION 2023 2022 2021 2020 2019 R’000 R’000 R’000 R’000 R’000 Segment profit before taxation 273,789 336,069 202,437 150,049 185,762 INDUSTRY NEW VEHICLE SALES – CALENDAR YEAR • National market (passenger & light commercial) up 14.6% • Market share gains - Suzuki - Mitsubishi -
Slide 14: Industry New Vehicle Sales
INDUSTRY NEW VEHICLE SALES SALES (‘000 UNITS) - CALENDAR YEAR 600 545 PROJECTED 530 522 502 500 438 400 347 300 200 100 0 2018 2019 2020 2021 2022 2023 13
Slide 15: Segment Analysis – Retail Motor
SEGMENT ANALYSIS – RETAIL MOTOR GROUP NEW UNIT SALES BY MANUFACTURER (%) Nissan Suzuki Ford Haval Toyota / Lexus Chery Mazda Honda Isuzu Stellantis Mitsubishi Renault Jaguar / Land Rover Trucks Mahindra Volvo 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 2023 2022 *Stellantis – Opel,
Slide 16: Motor Retail / Distribution
MOTOR RETAIL / DISTRIBUTION • During financial year • national sales (P + L/C) up 11.4% • dealer sales component up 7.8% • CMH sales up 12.4% • Volatility of motor retail evident • first seven months • low new vehicle supply continued • Covid shortage of components • Toyota shut-down • car hire oper
Slide 17: Motor Retail / Distribution
MOTOR RETAIL / DISTRIBUTION • Parts and service improved 10% • shortage of critical parts persists • impact of new brands is increasing • Mandarin Parts Distributors • steady year, supply affected by Covid in China • 28 independent franchisees • Rokkit – digital marketing • abreast with developments
Slide 18: Car Hire
CAR HIRE 2023 2022 2021 2020 2019 R’000 R’000 R’000 R’000 R’000 Segment profit before taxation 268,587 115,945 -5,103 45,178 48,290 • Continued stellar performance since Covid lockdown • Principal drivers • daily hire rate vs fleet holding cost • utilization rate • volume increases – market share op
Slide 19: Financial Services
FINANCIAL SEVICES 2023 2022 2021 2020 2019 R’000 R’000 R’000 R’000 R’000 Segment profit before taxation 73,046 56,159 28,046 44,638 41,425 • Relates to finance JVs and insurance underwriting • Higher level of financeable business generated • Improved interest rate margin • Lower claims rate, more re
Slide 20: Prospects
PROSPECTS The year ahead is likely to be tough. • Environment driven by: • power outages • infrastructure failure • violent crime • high youth unemployment • endemic corruption • Economic factors • impact of nine interest rate increases on affordability • weakened currency • cost of electricity-repl
Slide 21: Prospects
PROSPECTS • Strong executive management team • Deep industry knowledge • Proven track record • Years of collective experience • Sound financials, systems • strong, conservative balance sheet • positive cash flow • proven processes / systems 20
Slide 22: Thank You
FINANCIAL : | PRESENTATION 2023 COMBINED MOTOR HOLDINGS
Combined Motor Holdings — FY2023 Earnings Presentation on 6ix