Santova Limited · JSE:SNV
Santova — FY2023 Earnings Presentation
27 slides from Santova's earnings presentation, Jun 6, 2023
Slide 1: Analyst Presentation
Analyst Presentation 6 June 2023
Slide 2: The Santova Group
THE SANTOVA GROUP Santova is an international technology-based trade solutions specialist focused on assisting companies to differentiate themselves from their competitors through multi-dimensional innovative global trade solutions. Specialising in Technology-Driven International Trade Solutions The
Slide 3: Global B2B Ecommerce Marketplace
GLOBAL B2B ECOMMERCE MARKETPLACE To hedge ourselves through diversification and capitalise on a rapidly transitioning market to e-commerce sales, we have made the bold decision to introduce a new proposition to the market. ▪ In April 2023, the Group completed a ‘soft launch’ of Sekida, its e-commerc
Slide 4: Unique Characteristics
UNIQUE CHARACTERISTICS Highly entrepreneurial Non-asset based business Next generation technology culture model •Innovative technological applications, automation of operational processes, •Thrives on change and is driven by •Specialist provider of innovative global multi-dimensional interfaces and
Slide 5: Drivers of Earnings Growth
DRIVERS OF EARNINGS GROWTH ▪ Culture - conducive to operationalising strategy ▪ Multinational non-asset based business model, variable cost structure ▪ Technology - automation of operational processes ▪ Architecture - structure, people, workflow processes, and systems
Slide 6: Introduction
INTRODUCTION ▪ No post covid turnaround in South Africa’s economic prospects nor an improvement in SA’s risk rating. ▪ Worked hard at harnessing the opportunities that a ‘post-Covid’ market presented. ▪ New business development initiatives, talent management programs, optimising our global network,
Slide 7: Africa
AFRICA NPAT up by 77,4% to R63,1 million (2022: R35,6 million) ▪ SA’s socio-eco-political and governance challenges, corruption vulnerabilities, and the unprecedented energy crisis continue to weigh on economic growth. ▪ ‘Rationalisation’ and/or consolidation strategies were common within the indust
Slide 8: Europe
EUROPE NPAT down by 23,4% to R56,0 million (2022: R73,1 million) ▪ The Group’s operations in both Germany and the Netherlands have delivered impressive earnings in the face of headwinds. ▪ In the previous year Germany benefited from a once off extraordinary transaction in the amount of R10 million.
Slide 9: United Kingdom
UNITED KINGDOM NPAT up by 53,3% to R58,6 million (2022: R38,2 million) ▪ Our operations in the United Kingdom (“UK”) delivered solid earnings growth. ▪ Falling freight rates, high energy prices, the rising cost of living and a tightening of monetary policy to curb rising inflation, resulted in a dif
Slide 10: Asia Pacific
ASIA PACIFIC NPAT up by 46,4% to R42,4 million (2022: R29,0 million) ▪ The Asia Pacific region remains an attractive growth zone. ▪ With China having strong trade and tourism linkages with Asia, the opening of China in the latter part of last year also fueled the rebound in levels of economic activi
Slide 11: North America
NORTH AMERICA ▪ Price earnings multiples of target companies in the United States are at exceptionally high premiums. ▪ The Group acquired a small third-party logistics business, A-Link Freight Inc. The business is based in Los Angeles, not far from the LA International Airport, which is the seventh
Slide 12: Client analysis
Client analysis ▪ New client revenue by region ▪ Client distribution ▪ Number of new clients ▪ Growth in number of transactions
Slide 13: New Client Revenue by Region
NEW CLIENT REVENUE BY REGION March 2022 – Feb 2023 New Client NEW CLIENTRevenue REVENUE Region Revenue % Asia Pacific R6 498 771 10,84% Europe R16 485 025 27,49% United Kingdom R12 480 482 20,81% Africa R24 508 484 40,87% Total R59 972 763 100,00% A hedge in economic slowdowns, a significant ‘booste
Slide 14: Client Distribution
CLIENT DISTRIBUTION March 2022 – Feb 2023 Rank Client Industry Total Gross Profit % of total Accumulative 1 Electronics R9 942 692 1,52% 1,52% 2 Pharmaceuticals R8 666 320 1,32% 2,84% 3 Apparel R8 452 446 1,29% 4,14% 4 Chemicals R7 542 714 1,15% 5,29% 5 Kitchenware, toys R7 193 985 1,10% 6,39% 6 Ele
Slide 15: Client Analysis: New Clients and Transactions
CLIENT ANALYSIS March 2022 – February 2023 New CLIENTS NEW Clients Transactions TRANSACTIONS Number % Number Region 2022 2023 Region 2022 2023 % Increase increase Increase increase Africa 911 987 76 8,34% Africa 20 047 22 236 2 189 10,92% Asia Pacific 1 657 2 062 405 24,44% Asia Pacific 14 284 14 51
Slide 16: Outlook - The Year Ahead: Trading environment
OUTLOOK - THE YEAR AHEAD Trading environment ▪ The growth of the global economy will be slow this year before showing signs of a rebound early next year. ▪ Inflation should ease in Europe, wage growth is expected to increase, which together with low levels of unemployment, should result in an improv
Slide 17: Outlook - The Year Ahead: Impact on earnings growth
OUTLOOK - THE YEAR AHEAD Potential impact on earnings growth ▪ The United Kingdom has raised corporation tax from 19% to 25%. This will impact on earnings going forward. ▪ The Group has made the decision to ‘grass roots’ two new operations, one in Vietnam and the other in Chicago. The costs of both
Slide 18: Focus Going Forward
FOCUS GOING FORWARD ▪ An increasingly varied and unpredictable environment, requires resilience built on agility, flexibility and adaptability. ▪ This will have to be facilitated through digitisation or access to data and digital technology that is purpose- built. ▪ The Group will continue to invest
Slide 19: Financial Results
Financial Results For the period ending February 2023
Slide 20: 2023 in Perspective
2023 IN PERSPECTIVE Key highlights: ▪ Revenue and interest income increased 7.9% to R668.0mil ▪ Net profit after tax increased 23,8% to R210.7mil ▪ Offshore earnings of 72.7% ▪ Operating margin improved by 6.0% to 43.0% ▪ HEPS increased 22.1% to 154.83 cps ▪ NAV increased 34.4% to R7.51 per share
Slide 21: 2023 Statement of Profit or Loss: Analysis
2023 STATEMENT OF PROFIT OR LOSS: ANALYSIS 2023 2022 Move R'000 R'000 % BILLINGS 6,424,353 6,418,867 0.1% Decrease in freight rates offset by increase in file volumes. Growth in logistics revenue across most regions, with the exception of REVENUE 654,379 611,022 7.1% Europe (Africa +26%, AP +38%, UK
Slide 22: 2023 Operating Context: Forex
2023 OPERATING CONTEXT: FOREX 2023 2022 Movement Weighted R'000 R'000 % average Mvmt AVERAGE EXCHANGE RATES Primary Operating Currencies Euro EUR 17.41 17.35 0.3% 0.1% Pound Sterling GBP 20.23 20.36 (0.6)% (0.2)% US Dollar USD 16.70 14.85 12.5% (0.2)% Weakening Rand against major operating Australia
Slide 23: 2023 Statement of Financial Position: Analysis
2023 STATEMENT OF FINANCIAL POSITION: ANALYSIS 2023 2022 Move R'000 R'000 % Cash and cash equivalents 491,968 270,805 82% Strong cash position with 93.8% of cash held offshore. Current tax assets 1,107 724 53% Deferred tax assets 21,570 15,155 42% Financial assets at FV through P/L 7,657 8,352 (8)%
Slide 24: 2023 Financial Ratios
2023 FINANCIAL RATIOS 2023 2022 Move R'000 R'000 % - Billings/revenue margin 10.4% 9.6% 0.8% Decrease in freight rates lowering recoverable disbursements and increasing margin. With the growth in revenue, the Group’s continued focus on technology has allowed - Operating margin 43.0% 37.0% 6.0% scala
Slide 25: 2023 Trade Receivables: Credit Quality Analysis
2023 TRADE RECEIVABLES: CREDIT QUALITY ANALYSIS 2023 2022 Movement R'000 R'000 % Trade receivables 676,484 733,212 (7.7)% Increase in SA debtors aligned to higher levels of trading, partially offset by lower - South Africa 439,137 392,182 12.0% freight rates. - Offshore 237,347 341,030 (30.4)% Lower
Slide 26: 2023 Cashflow Analysis
2023 CASHFLOW ANALYSIS 2023 R'mil CASH ON HAND 221.2 - 2023 492.0 - 2022 270.8 ANALYSIS OF MAJOR CASH FLOW MOVEMENTS 221.1 Strong cash generation as working capital was returned as a result of the decline Net cash generated from operations 275.1 in shipping rates in the current year. Repurchase of t
Slide 27: The Santova Group
The Santova Group An international, technology-based trade solutions specialist www.santova.com