Karooooo Ltd. · NASDAQ:KARO
Karooooo — Q1 FY24 Earnings Presentation
28 slides from Karooooo's earnings presentation, Jul 20, 2023
Slide 1: Earnings Presentation Q1 FY24
Earnings Presentation Q1 FY24 1
Slide 2: Disclaimer
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
NASDAQ TICKER “KARO” JSE TICKER “KRO” 100% 100% 70.1% CARZUKA KAROOOOO LOGISTICS Founded in South Africa, now headquartered in Singapore 3
Slide 4: We think beyond connected vehicles & equipment
We think beyond connected vehicles & equipment WE ARE ON A MISSION TO BE THE LEADING OPERATIONS CLOUD 4
Slide 5: We digitally transform operations
WE DIGITALLY TRANSFORM OPERATIONS WE ADD HUGE WE IDENTIFY WE SOLVE VALUE TO THE DAILY TRENDS AND PROBLEMS OPERATIONS OF DEVELOP OUR CUSTOMERS SOLUTIONS Fleet & equipment management · Maintenance · Resource scheduling · Logistics & delivery operations management · Field worker management · Driver & v
Slide 6: Early start of a large & long-term growth opportunity
EARLY START OF A LARGE & LONG-TERM GROWTH OPPORTUNITY South Africa Southeast Asia Europe Africa- other On-the-ground (1) (1) (1) (1) operations are a >10M >100M >100M >10M massive opportunity and account for >40% (2) of global GDP 1,339,905 193,557 148,927 75,063 FY24 Q1 FY24 Q1 FY24 Q1 FY24 Q1 (1)M
Slide 7: Our culture
OUR CULTURE WE TAKE OWNERSHIP Close interaction with customers and deep understanding of business operations VERTICAL INTEGRATION SCALABLE SOLUTIONS Control of our distribution allowing Consistent investment in, and for fast adaptation with best results improvement on, our proprietary internal WORLD
Slide 8: Key differentiators
KEY DIFFERENTIATORS UNIQUE GO-TO-MARKET STRATEGY VERTICALLY GREAT INTEGRATED CUSTOMER BUSINESS EXPERIENCE MODEL WHY PROPRIETARY INTERNAL WE WIN ENTREPRENEURIAL MANAGEMENT CULTURE SYSTEMS USER FRIENDLY STRONG END-TO-END DISTRIBUTION OPERATIONS CHANNELS CLOUD 108,000+ Commercial Customers (Q1 FY23: 90
Slide 9: Global trends driving increased demand & adoption for our platform
GLOBAL TRENDS DRIVING INCREASED DEMAND & ADOPTION FOR OUR PLATFORM DIGITALISATION ESG COMPLIANCE 9
Slide 10: Our approach to ESG allows customers to effortlessly remain compliant
OUR APPROACH TO ESG ALLOWS CUSTOMERS TO EFFORTLESSLY REMAIN COMPLIANT WHILST BENEFITING OPERATIONALLY FROM THEIR ESG EFFORTS Reduced carbon footprint • Reducing fuel consumption • Transitioning to electric vehicles • Reducing cargo wastage • Carbon footprint reporting Robust compliance with rapidly
Slide 11: Asia: an underpenetrated, fragmented market with a massive TAM
ASIA: AN UNDERPENETRATED, FRAGMENTED MARKET WITH A MASSIVE TAM Our advanced cloud platform and robust service delivery positions us well to compete favourably in Asia Rapidly growing Many small Digitally savvy Strong cultures competitors customers 11
Slide 12: Asia: also a market with forward thinking companies driving change
ASIA: ALSO A MARKET WITH FORWARD THINKING COMPANIES DRIVING CHANGE Service delivery as Pioneering EV Data-driven supply a key differentiator adoption chain management • Data integrations for platform • 10,000 daily deliveries • Significant reduction in speeding development successfully managed event
Slide 13: Untapped network effect of our platform
UNTAPPED NETWORK EFFECT OF OUR PLATFORM We are aware of the much needed related services given our large data pool THE SCALE OF DATA ON OUR CLOUD IS VAST & GROWING (1) 155Bn + valuable data points monthly (1)For the month of May 2023 13
Slide 14: Investment highlights
INVESTMENT HIGHLIGHTS Our strong management, entrepreneurial culture and vertically integrated business model are core to our success. We have a proven track record of growth and profitability in varying macro-economic headwinds across regions. Entrepreneurial mindset with First-hand operational Agi
Slide 15: Financial performance for Q1 FY24
Financial performance for Q1 FY24 15
Slide 16: Karooooo has a decade-plus track record of strong revenue growth & robust earnings
KAROOOOO HAS A DECADE-PLUS TRACK RECORD OF STRONG REVENUE GROWTH & ROBUST EARNINGS UP 20% (1) UP 24% ARR Revenue Q1 FY24 ZAR 3,409M Q1 FY24 ZAR 997M Q1 FY23 ZAR 2,851M Q1 FY23 ZAR 801M UP 3% UP 3% Operating Profit Earnings Per Share Q1 FY24 ZAR 224M Q1 FY24 5.09 Q1 FY23 ZAR 217M Q1 FY23 4.96 (1) ARR
Slide 17: Karooooo's robust business model and strong balance sheet
KAROOOOO’S ROBUST BUSINESS MODEL AND STRONG BALANCE SHEET Net Cash on hand ZAR M 1,137 Strong unit economics 966 854 Healthy Robust operating margins Debtor’s Days Unleveraged balance sheet ▲ 18% 28 Strong cash conversion Q1 FY24 Q1 FY23 Q4 FY23 Q1 FY24 Q1 FY23: 33 days FREE CASH FLOW GENERATED ZAR1
Slide 18: Karooooo's EPS reconciliation
KAROOOOO’S EPS RECONCILIATION FY21 FY22 FY23 Q1 FY24 CARTRACK 16.91 16.57 20.61 5.40 CARZUKA 0 (0.40) (1.42) (0.39) KAROOOOO LOGISTICS 0 (0.07) 0.10 0.08 TOTAL 16.91 16.10 19.29 5.09 18
Slide 19: Cartrack extending decade-plus track record of execution excellence
CARTRACK EXTENDING DECADE-PLUS TRACK RECORD OF EXECUTION EXCELLENCE Scale Growth Profitability Subscribers Subscription Revenue Operating Profit 000s ZAR M ZAR M 834 248 1,758 1,717 793 232 1,679 771 224 222 1,600 733 221 1,543 707 1,526 209 1,470 663 670 1,409 1,366 628 198 606 1,306 1,246 567 574
Slide 20: Cartrack continues with decade-plus track record of strong SaaS revenue growth
CARTRACK CONTINUES WITH DECADE-PLUS TRACK RECORD OF STRONG SaaS REVENUE GROWTH UP 18% UP 18% UP 20% (1) Subscription Revenue Revenue ARR Q1 FY24 ZAR 834M Q1 FY24 ZAR 853M Q1 FY24 ZAR 3,401M Q1 FY23 ZAR 707M Q1 FY23 ZAR 724M Q1 FY23 ZAR 2,845M 98% OF CARTRACK’S REVENUE IS SUBSCRIPTION REVENUE (1)ARR
Slide 21: Cartrack improves operating profit despite strong investment for growth
CARTRACK IMPROVES OPERATING PROFIT DESPITE STRONG INVESTMENT FOR GROWTH UP 16% UP 5% UP 10% Gross Profit Operating Profit Adjusted EBITDA Q1 FY24 ZAR 600M Q1 FY24 ZAR 232M Q1 FY24 ZAR 392M Q1 FY23 ZAR 517M Q1 FY23 ZAR 221M Q1 FY23 ZAR 357M CARTRACK HAS STRONG VISIBILITY OF FUTURE SaaS REVENUE 21
Slide 22: Cartrack's customer acquisition unit economics
CARTRACK’S CUSTOMER ACQUISITION UNIT ECONOMICS Lifetime Value of Low Cost of Acquiring a Strong Benefits from (1) Customer Relationships Customer (2) Economies of Scale ▲ 95% Q1 FY24 (3) Gross Profit Margin based only on Subscription Revenue >9x Commercial Customer 71% LTV to CAC Retention Rate Q1 F
Slide 23: Cartrack's strong subscriber unit economics
CARTRACK’S STRONG SUBSCRIBER UNIT ECONOMICS 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 2,264 2,363 Q1 2,093 2,070 FY21 FY22 FY23 FY24 880 1,002 OpEx 660 718 ARPU (ZAR) 154 151 155 160 Subscr
Slide 24: Cartrack continues to grow subscriber base & ARR
CARTRACK CONTINUES TO GROW SUBSCRIBER BASE & ARR WITH ENCOURAGING TRACTION IN SOUTHEAST ASIA ARR ZAR M ▲ 20% Q1 Q1 Q1 Q-on-Q ‘000s Subscribers FY22 FY23 FY24 Change 3,401 SOUTH AFRICA 1,064 1,184 1,340 13% 2,845 2,491 ASIA, MIDDLE EAST, USA 125 156 194 24% EUROPE 114 133 149 12% AFRICA- OTHER 63 70
Slide 25: Cartrack operating metrics
CARTRACK OPERATING METRICS FY21 FY22 FY23 Q1 FY24 Subscription Revenue Gross Profit Margin 72% 70% 73% 71% 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% 21
Slide 26: Cartrack's outlook for 2024
CARTRACK’S OUTLOOK FOR 2024 FY21 FY22 FY23 Q1 FY24 FY24 Outlook Number of Subscribers (000s) 1,306 1,526 1,717 1,758 1,900 – 2,100 Cartrack’s Subscription Revenue (ZAR M) 2,209 2,566 3,004 834 3,400 – 3,600 Cartrack’s Operating Profit Margin 32% 27% 30% 27% 28% – 31% SOLID START TO OUR 2024 FINANCIA
Slide 27: Carzuka & Karooooo Logistics continue to gain traction
CARZUKA & KAROOOOO LOGISTICS CONTINUE TO GAIN TRACTION Carzuka Carzuka Karooooo Logistics (1) Karooooo Logistics (1) Revenue Operating Profit Revenue Operating Profit ZAR M ZAR M ZAR M ZAR M 82 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 72 FY22 FY22 FY22 FY22 FY23 FY23 FY23 FY23 FY24 62 65 56 64 54 5 50 (3) (3) (4)
Slide 28: Questions
YN A KAROOOOO Questions