Motus Holdings Limited · JSE:MTH
Motus — FY2021 Earnings Presentation
47 slides from Motus's earnings presentation, September 2021
Slide 1: Annual results presentation
Annual results presentation audited summarised results for the year ended 30 June 2021
Slide 2: Agenda
Agenda 1 Diversified 7 Current trading 13 Innovation at work automotive business activity levels 2 Trading environment 8 Financial highlights 14 Digital journey 3 Management responses 9 15 Utilisation of available Financial overview to the trading environment cash and funding resources 4 The South A
Slide 3: Diversified automotive business
Osman Arbee Ockert Janse van Rensburg Diversified automotive business Provider of service, 3 maintenance & extended warranty plans 1 Importer & distributor of Distributor, wholesaler & passenger retailer of parts & accessories 8 vehicles, LCV, parts & panels 6 Provider of fleet management services W
Slide 4: Trading environment
Osman Arbee Ockert Janse van Rensburg Trading environment Challenges in SA − Economic outlook remains challenging with low economic growth; − Consumer confidence is fragile with reduced disposable income; − Deteriorating fiscal position; − High unemployment and rising poverty levels; − Political & s
Slide 5: Trading environment (cont.)
Osman Arbee Ockert Janse van Rensburg Trading environment (cont.) Other geographies − UK & Australian economies recovering at a faster pace; − Good govt. stimulus & financial support (UK: Furlough and Australia: Job Keepers Fund); − UK: Minimal impacts post Brexit; − UK: Successful vaccination roll-
Slide 6: Management responses to the trading environment
Osman Arbee Ockert Janse van Rensburg Management responses to the trading environment 3. Conversion of inventory & rental 2. 4. de-fleets Maintain cost Active into cash structure & stakeholder strict financial engagement discipline (incl. investors & funders) 1. 5. Flexible Focused risk & agile mana
Slide 7: The South African vehicle market & our share
Osman Arbee Ockert Janse van Rensburg The South African vehicle market & our share South African vehicle market Actual calendar year Actual calendar year Projection calendar year Projection FY2022 2019 2020 2021 2022 536 612 vehicles 380 206 vehicles 430k - 450k vehicles 450k - 470k vehicles Our con
Slide 8: Vehicle unit sales
Osman Arbee Ockert Janse van Rensburg Vehicle unit sales % 8% Units 2021 2020 change 20% New 119 933 112 833 6% % New - South Africa 86 304 81 246 6% vehicles sold - UK 24 212 22 912 6% 2021 - Australia 9 417 8 675 9% 72% Pre-owned 108 700 95 945 13% - South Africa 81 900 71 439 15% - UK 21 518 18 6
Slide 9: Revenue streams
Osman Arbee Ockert Janse van Rensburg Revenue streams % Rm 2021 2020 change Sale of new vehicles 40 167 32 979 22% Sale of pre-owned vehicles 22 266 17 751 25% Sale of parts 16 002 13 617 18% Rendering of services 8 770 9 070 (3%) Total revenue 87 205 73 417 19% 1% 20% 35% 36% Revenue Revenue Operat
Slide 10: Current trading activity levels
Osman Arbee Ockert Janse van Rensburg Current trading activity levels Import and Retail Retail Financial Aftermarket Rental Distribution SA International Services Parts Performing at Performing at Performing at Performing at Performing at Performing at 90% 80% >100% 50% 85% >100% of pre Covid-19 of
Slide 11: Financial highlights
Osman Arbee Ockert Janse van Rensburg Financial highlights Revenue 19% EBITDA 30% Operating profit 78% R87 205 million R5 302 million R3 795 million (2020: R73 417 million) (2020: R4 082 million) (2020: R2 136 million) (2019: R79 711 million) (2019: R4 806 million) (2019: R3 620 million) Profit b
Slide 12: Financial highlights (cont.)
Osman Arbee Ockert Janse van Rensburg Financial highlights (cont.) Free cash flow Return on Weighted average generated from operations invested capital# cost of capital# R5 904 million 14,8% 9,5% (2020: R3 004 million) (2020: 6,4%) (2020: 9,8%) (2019: R3 061 million) (2019: 13,5%) (2019: 10,7%) Net
Slide 13: Financial overview
Osman Arbee Ockert Janse van Rensburg Financial overview Extracts from Statement of Profit or Loss for the year ended 30 June 2021 % 2021 2020 change Revenue (Rm) 87 205 73 417 19 Operating profit (Rm) 3 795 2 136 78 Operating margin (%) 4,4 2,9 Comments − Revenue improved by 19% mainly due to: − im
Slide 14: Financial overview (cont.)
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Extracts from Statement of Profit or Loss for the year ended 30 June 2021 (cont.) % Rm 2021 2020 change Operating profit 3 795 2 136 78 Net finance costs (543) (1 116) (51) Net foreign exchange losses (383) (13) >100 Once-off restructu
Slide 15: Financial overview: Earnings & dividends
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Earnings & dividends % 2021 2020 change Earnings (Rm) 2 098 306 >100 Headline earnings (Rm) 2 145 550 >100 Weighted average number of shares (million) 182 186 (2) Earnings per share (cents) 1 153 165 >100 Headline earnings per share (c
Slide 16: Key income statement items history
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) 2019 2020 2021 Key income statement items history Returned 87 205 to 79 711 2019 levels 3 795 73 417 3 620 2 860 2 610 2 136 2 098 1 868 541 306 Operating Profit Attributable Revenue profit before tax profit 16
Slide 17: Operating profit performance 2021 versus 2019
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Operating profit performance I 2021 versus 2019 Import and Retail and Retail Financial Aftermarket Distribution Rental SA International Services Parts Performing at Performing at Performing at Performing at Performing at >100% 82% >100
Slide 18: Business segment overview - Import and Distribution
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Business segment overview - Import and Distribution % change HY1 2021 HY2 2021 2021 2020 2020 unaudited pro forma audited audited audited Revenue (Rm) 9 687 9 996 19 683 17 411 13 Operating profit (Rm) 421 491 912 827 10 Operating marg
Slide 19: Import and Distribution (cont.)
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Business segment overview - Import and Distribution (cont.) Channel sales split Controllable market share Sales - dealer channel Sales - car rental channel − Controllable market share (passenger & LCVs) maintained at ~16%. 9% 23% Forwa
Slide 20: Business segment overview - Retail and Rental
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Business segment overview - Retail and Rental % change HY1 2021 HY2 2021 2021 2020 2020 unaudited pro forma audited audited audited Revenue (Rm) 35 965 34 997 70 962 59 898 18 Operating profit (Rm) 740 1 017 1 757 332 >100 Operating ma
Slide 21: Retail and Rental (cont.)
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Business segment overview - Retail and Rental (cont.) South Africa Retail revenue increased by 17% & operating profit by Car rental operating profit increased mainly due to: 119% mainly as a result of increased vehicle sales volumes of
Slide 22: Retail and Rental: UK and Australia
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Business segment overview - Retail and Rental (cont.) United Kingdom Retail revenue increased by 24% & operating profit by 667% mainly as a result of: − improved performance of both passenger & commercial dealerships; − government supp
Slide 23: Business segment overview - Financial Services
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Business segment overview - Financial Services % change HY1 2021 HY2 2021 2021 2020 2020 unaudited pro forma audited audited audited Revenue (Rm) 1 054 965 2 019 2 173 (7) Operating profit (Rm) 467 437 904 931 (3) Operating margin (%)1
Slide 24: Business segment overview - Aftermarket Parts
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Business segment overview - Aftermarket Parts % change HY1 2021 HY2 2021 2021 2020 2020 unaudited pro forma audited audited audited Revenue (Rm) 3 773 3 522 7 295 6 050 21 Operating profit (Rm) 266 293 559 322 74 Operating margin (%) 7
Slide 25: Statement of Financial Position as at June 2021
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Statement of Financial Position as at 30 June 2021 Rm % Assets 2021 2020 change Goodwill and intangible assets 1 546 1 671 (7) Property, plant and equipment 7 024 7 784 (10) Right-of-use assets 2 132 2 279 (6) Investments in associates
Slide 26: Net working capital as at June 2021
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Net working capital as at 30 June 2021 % Rm 2021 2020 change Inventories 16 528 20 179 (18) Trade and other receivables 4 136 4 040 2 Trade and other payables (14 007) (14 896) (6) Provisions and derivatives (1 492) (808) 85 Total 5 16
Slide 27: Statement of Financial Position (cont.)
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Statement of Financial Position as at 30 June 2021 (cont.) Rm % Liabilities 2021 2020 change Core Debt (2 528) (5 794) (56) Floorplans from financial institutions (873) (1 648) (47) Lease liabilities (2 449) (2 658) (8) Contract Liabil
Slide 28: Statement of Cash flows
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Statement of Cash flows for the year ended 30 June 2021 Rm 2021 2020 0 Cash generated from operations before movements in net working capital 5 335 3 788 Movements in net working capital 1 778 333 Cash generated by operations before in
Slide 29: Cashflow waterfall: Generation and utilisation
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Cashflow waterfall I Generation and utilisation 1 778 (657) Rise Fall Total 142 (694) (Rm) (170) (485) (312) (487) - - - - 4 450 5 904 5 335 Cash generated Movements in Net finance Dividend income Taxation Free cash flow Net capital Re
Slide 30: Gearing
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Gearing (total including floorplans) 9000 60% 70% Funding 63% 8000 56% 60% 7000 51% − Net debt to equity is 28% (2020: 60%) 50% 6000 − Net debt is lower than 30 June 2020 mainly due to: 5000 40% − lower working capital & vehicles for h
Slide 31: Facilities and debt covenants
Osman Arbee Ockert Janse van Rensburg Financial overview (cont.) Facilities and debt covenants 10,9 2,2 R15,3bn R8,4bn <3 times unutilised unutilised funding funding facilities facilities (including floorplans) (excluding floorplans) 0,8 42% 54% 3,6 >3 times of debt is of debt long-term is fixed (in
Slide 32: Strategic objectives
Osman Arbee Ockert Janse van Rensburg Strategic objectives Drive innovation Enhance Improve financial technology performance solutions Ensure Invest in market human leadership capital and ESG initiatives 32
Slide 33: Business model supporting strategic objectives
Osman Arbee Ockert Janse van Rensburg Business model supporting strategic objectives OEM’s partner of choice due Strong operating performance Employ over 16,700 people to a superior route to market: - Revenue up 19% - 73% black representation representing: in SA - Operating profit up 78% - 24 OEMs i
Slide 34: Acquisitions
Osman Arbee Ockert Janse van Rensburg Acquisitions The group acquired the following businesses since 1 July 2020, for a total purchase consideration of R543 million: Acquisition Jurisdiction Effective Transaction ownership Renault South Africa 100% Buy-out of 40% minorities Midas stores South Africa
Slide 35: Our people
Osman Arbee Ockert Janse van Rensburg Our people − Transformation – progression on prior year: SA Black representation 2021 2020 Top management 36% 30% Senior management 53% 40% Middle management 47% 45% Junior management 68% 65% − Accelerated internal training programmes. − Detailed succession plan
Slide 36: Innovation at work
Osman Arbee Ockert Janse van Rensburg Innovation at work Motus is striving to create South African solutions that solve South African challenges! Our focus is on: − Promoting a culture of innovation to develop innovators; − Engaging a growing community of innovators - 3,900 employees; − Enabling inn
Slide 37: Digital journey
Osman Arbee Ockert Janse van Rensburg Digital journey Our digital journey has received heightened focus. Dealers Focus on the path between digital marketing and the integration to physical delivery of vehicles: – Search engines – All Motus vehicles – Finance application – Physical dealership – Websi
Slide 38: Utilisation of available cash and funding resources
Osman Arbee Ockert Janse van Rensburg Utilisation of available cash and funding resources Acquisitions Bolt-on acquisitions are being Capex Standard capex & upgrades considered locally & internationally Estimation: R500m - R700m – Aftermarket Parts ~R800m Including multi-franchise developments: – IT
Slide 39: Motus value creation during the year
Osman Arbee Ockert Janse van Rensburg Motus value creation during the year Total dividend Share Growth in share Achieved EE Improved black declared per share repurchases of price of 205% targets DP representation 415 cents per share 6,5 million shares at 73% black to 42% 30 June 2021: R93,34 an aver
Slide 40: Prospects
Osman Arbee Ockert Janse van Rensburg Prospects − In the past 18 months we have stabilised the business & produced outstanding financial results supported by strong cash flows. − We scaled our business activities to adapt to the new economic circumstances in a sustainable & responsible manner. − Our
Slide 41: Thank you!
Our heartfelt condolences to the families, friends & colleagues of our 27 employees (24 due to COVID-19) who sadly lost their lives during the financial year. We would like to extend our appreciation & gratitude to Phumzile Langeni, Keneilwe Moloko & Janine Jefferies for their commitment & service t
Slide 42: Appendices
Appendices a" Motus
Slide 43: Resilient business model
Resilient business model 1 2 3 4 5 6 7 Diversified Integrated Unrivalled High free Varied Organic Highly automotive business scale in cash flow income growth experienced business model South Africa generation streams trajectory team 1. Diversified (non-manufacturing) business in the automotive 5. In
Slide 44: Business segment overview
Business segment overview Import and Retail and Financial Aftermarket Distribution Rental Services Parts − Exclusive South African importer of − South Africa − Developer & administrator of innovative − Distributor, wholesaler & retailer of Hyundai, Kia, Renault & Mitsubishi − Represents 24 OEM’s veh
Slide 45: Vision: Where are we going?
Vision: Where are we going? − One Motus; − Provider of leading mobility solutions; − Nurture strong relationships with all stakeholders; − Drive disruption, competitive edge & value add via innovation & investment in digital platforms; − Leverage our integrated business model; − Create value for emp
Slide 46: 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 47: 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 consolidated results for the year ended 30 June 2021. The directors of Motus Holdi