HY17 RESULTS PRESENTATION

Transcription

1 1 HY17 RESULTS PRESENTATION

2 TABLE OF CONTENTS About Cartrack 3 Business trends 4 Strategy overview 6 Segmental performance 13 Financial review 19 Outlook 28 Annexures 32

3 ABOUT CARTRACK A leading global telematics company Consistent growth in profitability Represented in 24 countries Resilient, annuity-based business > subscribers High cash generator Proven, scalable technology platform Diversified & balanced subscriber base 3

4 Business trends

5 BUSINESS TRENDS Global growth universal needs with low penetration Government regulatory requirements for road safety, road planning, pollution levies, toll fees, general tax collection and driver regulations Insurance telematics Our platform for growth Consolidation within industry OEM partnerships for in-field hardware maintenance and service support OEM partnerships to use our software-as-a-service platform Autonomous cars Stronger SVR demand in high crime countries Data analytics and value-added products and services Barriers to entry increasing due to high demand for rentals, leaps in technology development and requirement for substantial recovery infrastructure 5

6 Strategy Review

7 OUR STRATEGY DRIVING SHAREHOLDER VALUE Shareholder value Robust subscriber and revenue growth Value add through data and innovative technology Sustainable profit margins Strong cash flow and disciplined capital allocations Low penetration in high growth market 7

8 GROWTH STRATEGY STRATEGIC INITIATIVES Sustainable revenue & subscriber growth, generating strong margins & returns 8

9 GROWTH STRATEGY STRATEGIC INITIATIVES Sustainable revenue & subscriber growth, generating strong margins & returns Accelerated investment in R&D Product evolution and features Data analytics Complete in-field business solutions 9

10 GROWTH STRATEGY STRATEGIC INITIATIVES Sustainable revenue & subscriber growth, generating strong margins & returns Accelerated investment in R&D Customer acquisition model 10

11 GROWTH STRATEGY STRATEGIC INITIATIVES Sustainable revenue & subscriber growth, generating strong margins & returns Accelerated investment in R&D Customer acquisition model Retention model 11

12 GROWTH STRATEGY STRATEGIC INITIATIVES Sustainable revenue & subscriber growth, generating strong margins & returns Accelerated investment in R&D Customer acquisition model Retention model Scalability 12

13 Segmental performance

14 SOUTH AFRICA A SOLID PERFORMER HY 17 PERFORMANCE Revenue +16% Subscribers +18% Operating profit +14% OUTLOOK AND INITIATIVES Continued strong subscriber growth and market penetration Low penetration in SA market Launching low LSM telematics offering South Africa H Actual H constant currency H Actual % change Actual % change constant currency Revenue % 16% Cost of sales % 2% Gross profit % 19% Other income % 23% Net operating foreign exchange gain % 40% Operating expenses % 15% Operating profit % 23%

15 AFRICA-OTHER OPERATIONALLY SOUND HY 17 PERFORMANCE Revenue -7% Subscribers +4% Operating profit -35% OUTLOOK AND INITIATIVES Maintain strong performance in local currency despite headwinds Improve penetration and collections Africa-Other H Actual H constant currency H Actual % change Actual % change constant currency Revenue % 7% Cost of sales % 28% Gross profit % 3% Other income % 420% Net operating foreign exchange gain % -238% Operating expenses % 16% Operating profit % -17%

16 EUROPE STRONG GROWTH IN COMPETITIVE ENVIRONMENT HY 17 PERFORMANCE Revenue +41% Subscribers +23% Operating profit -26% OUTLOOK AND INITIATIVES Targeted investment in distribution channels Strong subscriber growth Europe H Actual H constant currency H Actual % change Actual % change constant currency Revenue % 17% Cost of sales % -1% Gross profit % 22% Other income % -96% Net operating foreign exchange gain % -134% Operating expenses % 47% Operating profit % -29%

17 ASIA PACIFIC & ME BUSINESS CASE PROVEN HY 17 PERFORMANCE Revenue +147% Subscribers +203% Operating loss -24% OUTLOOK AND INITIATIVES Further investment in operating capacity Strong growth in greenfields projects Positive profitability in line with business case, as evidenced in Singapore ASIA PACIFIC & ME H Actual H constant currency H Actual % change Actual % change constant currency Revenue % 105% Cost of sales % 196% Gross profit % 92% Other income % 1141% Net operating foreign exchange gain % -683% Operating expenses % 42% Operating profit % -60%

18 UNITED STATES REGULATIONS SPUR DEMAND OUTLOOK AND INITIATIVES Offices opened in California and executive team in place Estimated 3.1 million vehicles still require ELD telematics (Driscoll & Associates 2016) to comply with regulations Sales to commence in November 2016 The Group will benefit from operating in a highly technology driven society 18

19 Financial Review

20 SALIENT FEATURES 19% subscriber growth 18% revenue growth 80% gross profit margin 30% operating profit margin 12% increase in EBITDA 6% increase in EPS R212 million cash generated from operating activities Investment in operating capacity and distribution channels Currency impacts (R19 million) excluding which EPS increased by 16% 20

21 ROBUST SUBSCRIBER GROWTH Total active units Growth in Fleet vs SVR HY 17 0 Fleet SVR Other Total HY16 FY16 HY17 120% 100% 80% 60% 40% 20% 0% New sales cash vs rental 66% 73% 83% 34% 27% 17% FY 15 FY 16 HY 17 Subscriber base by geography 4% 9% 10% 77% SA Africa - Other Europe Asia and Middle East Cash Rental 21

22 USD/ZAR CURRENCY IMPACT 17,0 16,5 16,0 Procurement of manufacturing components for FY 17 Consolidation of international operations affected by Rand appreciation (R3 million negative impact) 15,5 15,0 14,5 Increased cost of sales - R16 million negative impact 14,0 13,5 Ave USD/ZAR H H H ,0 22

23 STRONG BALANCE SHEET POSITIONED FOR GROWTH No gearing Clean debtors book debtors days 31 Adequate stock levels for 6 9 months of trading Current ratio 1.0 Quick ratio 0.7 Cash generated from operating activities of R212 million 23

24 R million A CONSISTENTLY HIGH CASH GENERATOR 300 Net cash from operating activities Acquired CTM which resulted in additional inventory An increase in debtors days Decrease in debtors days Increase in creditors Annuity business with strong revenue visibility All growth financed internally HY 17 Strong track record of returning excess cash to the shareholders 24

25 R '000 CASH GENERATION AND UTILISATION Impacts on cash flow More rentals more capex Currency impact (26%) - higher cost of sales, stock holding value and capitalised rentals Monthly unit sales have accelerated by > 25% Investment to increase distribution in established and greenfield operations Accelerated R&D spend Cash at 1 March 2016 Cash from operating activities Capitalised rentals Capitalised other fixed assets Dividends paid Cartrack North East minority interest Other cash payments and receipts Cash at 31 August

26 R 000 CAPITAL INVESTMENT CASH FLOWS Capitalised rentals H1 16 H2 16 H1 17 Capitalised other fixed assets 26

27 Cents per share DIVIDEND POLICY AND DIVIDENDS FY 15 FY 16 HY 15 HY 16 HY 17 H1 17 dividend cover of 1.25 times HEPS, against target of times The revised dividend policy to be effective for FY17 - dividend cover of times HEPS Management s expectations are that the final dividend cover for FY17 will be between 1.75 and 2.5 times HEPS. 27

28 Outlook P 28 I Strictly private and confidential

29 CARTRACK S TECHNOLOGY HISTORY 2004 Launch Stolen Vehicle Recovery services (SVR) 2009 Launch FM incorporating SVR 2010 Launch evolved 2007 SaaS platform Launch Fleet Management (FM) 2013 Launch Flash product 2014 Launch Insurance telematics 2015 Launch Prisoner Tracking Subscriber base 2016/17 Launch mesh radio frequency for data and SVR In process: Data analytics Field technology partner of choice SaaS platform for OEMs

30 A ROBUST OUTLOOK Well positioned for growth and strong operating results Monthly sales significantly higher than before stronger demand book Accelerated investment in technology and software platforms Investment in expert data analytics capability Focus on positioning the business as an intrinsic technology partner Reap benefits from current investment in distribution in 2018 More value added services to existing customer base Double digit normalised EPS targeted for

31 International Offices Angola Botswana Hong Kong Indonesia Kenya Malaysia Malawi Mozambique Namibia New Zealand Nigeria Philippines Poland Portugal Rwanda Singapore South Africa Spain Swaziland Thailand Tanzania UAE USA Zimbabwe

32 Annexures

33 CARTRACK AT A GLANCE A leading global provider of Fleet Management, Stolen Vehicle Recovery and Insurance Telematics A diversified subscriber base with active subscribers as at HY 17 and offices in 24 countries Amongst the top telematics companies globally A leader in a very large and underpenetrated global market A trusted leader in the stolen vehicle and recovery industry with an audited recovery rate of 94% Recovered in excess of stolen vehicles since inception Strong visibility of earnings due to the annuity based business model A benchmark and consistent leader in the global Telematics industry 33

34 OUR PROMISE TO CUSTOMERS c Putting you in control Real time tracking with sophisticated management reports Use of both GSM and RF technologies as a platform Unit health checks Proactive monitoring of all tracking devices Value added services Various Products and VAS to meet your needs Life Time Warranty Life time maintenance warranty offered on Hardware Systems and server uptime Systems built with the most advanced technologies Back up servers in South Africa, Holland, UK and Singapore Support 24/7/365 operation Access to Fleet onsite training and support centre Recovery Independently audited 94% recovery rate Dedicated in-house recovery teams Technicians Dedicated in-house technicians to install at a location of your choice 34

35 OUR CUSTOMERS CHALLENGES c High Fuel Costs Wasteful Vehicle Idling Timecard Falsification Excessive Overtime Excessive Maintenance Costs Excessive Mileage Poor Driver Behaviour Unproductive Drivers Unauthorised Vehicle Use Vehicle Theft 35

36 WHAT WE OFFER CUSTOMERS Increased fleet productivity Increased workforce efficiency Reduced operational costs Increased customer service Increased safety and security Increased revenue 36

37 CARTRACK CORE SOLUTIONS PER PRODUCT c 37

38 CARTRACK SOUTH AFRICA ROI CUSTOMER CALCULATOR FLEET MANAGEMENT R R191 Expected minimum ROI/month 1066% R R391 Total Expected Saving = 1, R R R1 Total Cost = R280 38

39 KEY SECURITY SERVICES AND FEATURES Lifetime Warranty 8 39

40 KEY CARTRACK FLEET MANAGEMENT REPORTS c Trip Reports Fuel Efficiency Report Fuel Card Management Geo-fence Reports Operating Hours Toll road Management Driver Scorecard Speeding Report Idling Report 40

41 WHAT WE OFFER INVESTORS Globally, a high growth industry Proven and scalable technology platform A large and diversified subscriber base Experienced management Annuity-based earnings model Strong recurring earnings profile A proven track record of profitability Strong financial metrics Strong cash generation & cash conversion Low gearing 41

42 R million A HIGHLY SUSTAINABLE AND PREDICTABLE MODEL Revenue growth Consistent ratios % 84% 84% 84% % 70% % 50% 40% 30% 43% 46% 35% 34% 42% 30% % 10% HY 17 0% HY17 Annuity revenue Revenue Annuity revenue % EBITDA % Operating profit % Diversified base present in 24 countries, fleet management as well as SVR product offerings Secure annuity-based model 84% of revenue Longevity and predictability - average customer lifecycle approximately 60 months Scale few companies globally have a subscriber base > contracts High profit margins 42

43 SEGMENTAL GROWTH R 000 H1 16 H1 17 % change Segmental growth for 2015 and 2016 Revenue South Africa % Africa other (7)% Europe % Asia and Middle East % USA - - Total % Profit before tax South Africa % Africa other (37)% Europe (27)% Asia and Middle East (5 547) (4 183) 25% USA (1 217) - Total % EBITDA South Africa % Africa other (33)% Europe % Asia and Middle East (4 913) (1 068) 78% USA (1 217) - Total % 43 43