Karooooo Ltd. · NASDAQ:KARO
Karooooo — Q3 FY2023 Earnings Presentation
25 slides from Karooooo's earnings presentation, Jan 20, 2023
Slide 1: Earnings Presentation Q3 FY23
Earnings Presentation Q3 FY23 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
MOBILITY IS CORE TO ALL OPERATIONS We think beyond connected vehicles & equipment 4
Slide 5: Our mission: leading on-the-ground operations cloud
OUR MISSION To establish the leading on-the-ground operations cloud 5
Slide 6: We solve problems by digitally transforming on-the-ground operations
WE SOLVE PROBLEMS BY DIGITALLY TRANSFORMING ON-THE-GROUND OPERATIONS Fleet & Logistics & Field Worker Video ESG Risk Warehouse Secure Vehicle Competitively Equipment Delivery Management Based Safety Compliance Mitigation & Other Buying & Priced Management Operations & Reporting Systems Selling Insur
Slide 7: Karooooo services small to large enterprise customers across diverse industries
KAROOOOO SERVICES SMALL TO LARGE ENTERPRISE CUSTOMERS ACROSS DIVERSE INDUSTRIES 100,000+ Commercial Customers (Q3 FY22: 87,000+) NO CUSTOMER OR INDUSTRY CONCENTRATION RISK 7
Slide 8: 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 9: Early stage of a large & long-term growth opportunity
EARLY STAGE OF A LARGE & LONG-TERM GROWTH OPPORTUNITY Mobility is core to all on-the-ground operations South Africa Southeast Asia Europe Africa- other On-the-ground Operations A massive opportunity (1) (1) (1) (1) >100M >100M >10M >40% >10M (2) of global GDP 1,289,532 175,158 140,589 73,327 FY23 Q3
Slide 10: 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) 120Bn+ valuable data points monthly (1)For the month of November 2022 10
Slide 11: Financial performance for Q3 FY23
Financial performance for Q3 FY23 11
Slide 12: Karooooo's cash generation & robust earnings
KAROOOOO’s CASH GENERATION & ROBUST EARNINGS COMPARABLY UP 27% UNALTERED Free Cash Flow Earnings per Share Q3 FY23 ZAR 4.70 Q3 FY23 ZAR 171M Q3 FY22 ZAR 4.72 Q3 FY22 ZAR 134M UP 20% UP 42% Earnings per Share Free Cash Flow YTD Q3 FY23 ZAR 14.59 YTD Q3 FY23 ZAR 434M YTD Q3 FY22 ZAR 12.17 YTD Q3 FY22
Slide 13: Consistently strong organic growth with prudent capital allocation discipline
KAROOOOO’s HISTORY OF CONSISTENTLY STRONG ORGANIC GROWTH WITH PRUDENT CAPITAL ALLOCATION DISCIPLINE Scale Growth WHY WE WIN Subscribers Revenue 000s ZAR M • End-to-end all inclusive IoT Operations Cloud • Operational technology partner with high 1,679 930 customer ROI 1,600 859 1,526 1,543 1,470 801
Slide 14: Robust business model and cash position
KAROOOOO’s ROBUST BUSINESS MODEL AND CASH POSITION Net Cash on hand ZAR M Strong unit economics 799 819 Cartrack’s Robust operating margins Debtor’s Days Consistently beaten Rule of 40 (1) ▲ 3% 31 Quality balance sheet Q3 FY23 Strong cash position As of Nov 202 1 As of Nov 202 2 Q3 FY22: 34 days A C
Slide 15: Performance by business segment
PERFORMANCE BY BUSINESS SEGMENT KAROOOOO 100% 100% 70.1% NASDAQ “KARO” JSE “KRO” KAROOOOO CARZUKA LOGISTICS Q3 FY23 YTD FY23 Q3 FY23 YTD FY23 Q3 FY23 YTD FY23 Q3 FY23 YTD FY23 Composition of Total Revenue 86% 88% 8% 7% 6% 5% Revenue (ZAR M) 930 2,591 804 2,280 72 187 54 124 Revenue Growth (%) 29% 29
Slide 16: Cartrack attractive unit economics
CARTRACK ATTRACTIVE UNIT ECONOMICS Lifetime Value of Low Cost of Acquiring a Strong Comparative (1) Customer Relationships Customer (2) Benefits from ▲ Economies of Scale Q3 FY23 Q3 FY23 Gross Profit Margin on Subscription Revenue >9x Operating Profit Margin 72% 28% LTV to CAC Q3 FY22: 69% Q3 FY22:
Slide 17: Cartrack record Q3 net subscriber additions
CARTRACK RECORD Q3 NET SUBSCRIBER ADDITIONS ▲ 27% 78,593 70,916 60,470 61,776 59,911 57,251 55,587 41,626 42,139 16,800 7,032 FY21 FY22 FY23 FY21 FY22 FY23 FY21 FY22 FY23 FY21 FY22 FY23 Q1 Q2 Q3 Q4 100,000+ COMMERCIAL CUSTOMERS 120BN+ DATA POINTS COLLECTED MONTHLY 17
Slide 18: Cartrack consistently growing quality revenue
CARTRACK CONSISTENTLY GROWING QUALITY REVENUE UP 16% UP 19% SaaS Subscription Revenue Growth Revenue Growth Q3 FY23 ZAR 771M Q3 FY23 ZAR 804M Q3 FY22 ZAR 663M Q3 FY22 ZAR 677M UP 17% UP 17% SaaS Subscription Revenue Growth Revenue Growth YTD Q3 FY23 ZAR 2.211M YTD Q3 FY23 ZAR 2.280M YTD Q3 FY22 ZAR
Slide 19: Extending decade-plus track record of execution
CARTRACK EXTENDING DECADE-PLUS TRACK RECORD OF EXECUTION Scale Growth Profitability (1) Subscribers SaaS Subscription Revenue Operating Profit 000s ZAR M ZAR M ▲ 14% ▲ 16% ▲ 6% 771 222 1,679 663 209 1,470 198 567 1,246 Q3 FY21 Q3 FY22 Q3 FY23 Q3 FY21 Q3 FY22 Q3 FY23 Q3 FY21 Q3 FY22 Q3 FY23 PROVEN AB
Slide 20: Growing subscriber base with traction in South East Asia
CARTRACK CONTINUES TO GROW SUBSCRIBER BASE WITH POSITIVE TRACTION IN SOUTH EAST ASIA Q3-on-Q3 ‘000s Subscribers Q3 FY21 Q3 FY22 Q3 FY23 Change SOUTH AFRICA 962 1,141 1,290 13% ASIA, MIDDLE EAST, USA 115 138 175 27% EUROPE 108 124 141 14% AFRICA- OTHER 62 67 73 9% TOTAL 1,246 1,470 1,679 14% Q3 FY23
Slide 21: Robust operating metrics investing for future growth
CARTRACK ROBUST OPERATING METRICS INVESTING FOR FUTURE GROWTH Long-term Q3 FY21 Q3 FY22 Q3 FY23 Targets (1) Research & Development as a % of SaaS Subscription 4% 5% 6% 4-6% Revenue Sales & Marketing as a % of SaaS Subscription Revenue 12% 12% 14% 17-19% General & Administration as a % of SaaS Subscr
Slide 22: Outlook for 2023 remains unchanged
CARTRACK OUTLOOK FOR 2023 REMAINS UNCHANGED YTD Q3 FY21 FY22 FY23 FY23 Outlook Number of subscribers (000s) 1,306 1,526 1,679 1,700 – 1,900 Cartrack’s SaaS Subscription Revenue (ZAR M) 2,209 2,566 2,211 2,950 – 3,100 Cartrack’s Adjusted EBITDA margin (1) 49% 47% 48% 45% – 50% (1) Adjusted EBITDA mar
Slide 23: Carzuka & Karooooo Logistics continue to gain traction
CARZUKA & KAROOOOO LOGISTICS CONTINUE TO GAIN TRACTION Carzuka Karooooo Logistics Revenue Revenue (1) ZAR M ZAR M ▲ 32% ▲ 11% 54 72 65 41 50 28 24 32 18 24 9 3 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 ROBUST QUARTER-ON-QUARTER GROWTH (1) Karoooo
Slide 24: EPS Reconciliation
EPS RECONCILIATION Q1 FY23 Q2 FY23 Q3 FY23 YTD FY23 CARTRACK 5.13 5.18 5.19 15.50 CARZUKA (0.15) (0.26) (0.54) (0.95) KAROOOOO LOGISTICS (0.02) 0.01 0.05 0.04 TOTAL 4.96 4.93 4.70 14.59 24
Slide 25: Questions
YN A KAROOOOO Questions