ABOUT CARTRACK STRATEGY REVIEW FINANCIAL PERFORMANCE SEGMENT PERFORMANCE OUTLOOK AND QUESTIONS

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2 AGENDA ABOUT CARTRACK STRATEGY REVIEW FINANCIAL PERFORMANCE SEGMENT PERFORMANCE OUTLOOK AND QUESTIONS 2

3 ABOUT CARTRACK 3

4 A LOW-RISK FINANCIAL MODEL AND PROVEN TRACK RECORD Compound 6-yr annuity revenue growth of 26% pa Cash conversion 100% Audited recovery rate 91% Annuity revenue 93% of total revenue Strong customer retention with a life cycle of more than 64 months RoE 55% RoA 27% Industry leading EBITDA margin 50% pa Industry leading operating profit margin 34% pa 4

5 A ROBUST OPERATING MODEL CAPITALISING ON ACCELERATED GROWTH Economies of scale Strong customer retention with a life cycle of more than 64 months Large rapidly growing subscriber base supported by a proven ability to distribute Highly scalable business model and technology platform Vertical integration supports margins 5

6 NUMBER OF SUBSCRIBERS ACCELERATED SUBSCRIBER GROWTH Y-O-Y +28% FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 HY 18 HY 19 6

7 R MILLION ANNUITY REVENUE GROWTH Y-O-Y +27% HY18 HY19 Annuity revenue 7

8 GROWTH DRIVERS A significant unaddressed market Driver safety Driver security Insurance telematics Regulatory compliance requirements Workforce optimisation Reducing fleet cost and optimising efficiencies 8

9 SOURCE OF BUSINESS Existing clients Dealerships Corporate sales Insurance Direct marketing OEM s 9

10 BARRIERS TO MARKET Economies of scale Device-as-a- Service Infrastructure for safety and security Long lead time to deliver competitive software platform Trust Distribution 10

11 CRIME STATISTICS IN SOUTH AFRICA 11

12 STRONG PROGRESS WITH GLOBAL DIVERSIFICATION Annuity Revenue 6% 26% FY14 HY19 94% 74% South Africa Rest of world 12

13 NEW ACCOUNTING STANDARDS With adoption of the new accounting standards, comparisons to HY18 are not entirely comparable HY18 Previous accounting standards did not adequately align revenue with associated costs and depreciation, hence distorted year-on-year profit comparisons for highgrowth companies like Cartrack HY19 New accounting standards better align reporting of Cartrack s results to it s competitors and will allow for substantially improved year-on-year comparison due to depreciation now aligning revenue over the life expectancy of the installation 13

14 NUMBER OF SUBSCRIBERS ACCELERATING GROWTH IN SUBSCRIBERS Net additional subscribers for every six months since listing Y-O-Y +50% Feb 15 Aug 15 Feb 16 Aug 16 Feb 17 Aug 17 Feb 18 Aug 18 Revenue lags subscriber growth the full benefit follows in the financial year after the initial sale 14

15 AGE OF OUR ACTIVE SUBSCRIBER BASE AS AT HY19 Accelerated growth no longer has a negative impact on earnings with the new accounting standards Less than 1 year: 300, 000 (35,3%) More than 1 year and less than 2 Years: 217, 000 (25,5%) 73,3% More than 2 years and less than 3 Years: 106, 000 (12,5%) More than 4 Years: 227, 000 (26,7%) Total 850, 000 (100%) 15

16 MARGIN EXPANSION INITIATIVES Significant upgraded proprietary customer centric platform will allow improved operational efficiencies to deal with accelerated growth Improving operational efficiencies Lowering the cost of customer acquisition 16

17 WHAT WE OFFER INVESTORS 17

18 STRATEGY REVIEW 18

19 A CONSISTENT STRATEGY USING SMART TRANSPORTATION KEY STRATEGIC PRINCIPLES Vigorous subscriber acquisition Continuous innovation Margin management through vertical integration Strong cash flow TO BE AN INTEGRAL PART OF CUSTOMERS LIVES Disciplined capital investment 19

20 AMONG THE LARGEST TELEMATICS COMPANIES GLOBALLY EUROPE ASIA PACIFIC AMERICAS AFRICA MIDDLE EAST 849,772 subscribers 24 countries 5 continents 20

21 GLOBAL CONNECTED-CARS Source: 21

22 THE CARTRACK CONNECTED CAR BUSINESS MODEL 22

23 WE SHARE OUR REVENUE WITH OUR PARTNERS 23

24 WHAT WE DO STRATEGIC DRIVER data and technology SCALABLE PROPRIETARY SAAS PLATFORM Mobile apps 3G to 4G Software integration New front end Platform improvements DATA MANAGEMENT Regulatory compliance Fleet Management Insurance Telematics Mobile asset solutions Workforce optimisation Stolen Vehicle Recovery Road Assistance Driver safety 24

25 DEVICE-AS-A-SERVICE Security Stolen vehicle and recovery technology Driver hours ELD USA DTL - Thailand 25

26 FINANCIAL PERFORMANCE 26

27 ROBUST HY19 PERFORMANCE GEARED FOR GROWTH Subscribers 849, % Annuity revenue R710 million +27% Operating profit R263 million +32% EPS 57,9 cents +24% Interim dividend 18 cps 27

28 THE NEW IFRS STANDARDS Revenue and costs are now aligned The group now treats cash sales in the same manner as rental sales The capitalised cost of unit and incremental acquisition costs will now depreciate over a period of between 12 to 60 months, which is now in line with the expected life cycle of a unit Similarly, revenue recognised over a period of between 12 to 60 months is now in line with the expected life cycle of a contract 28

29 R MILLION REVENUE GROWTH Total revenue Y-O-Y +22% Annuity revenue Y-O-Y +27% HY18 HY19 Revenue Annuity revenue 29

30 R MILLION EBITDA GROWTH Y-O-Y +29% HY18 HY19 30

31 CONSISTENT INDUSTRY LEADING MARGINS Gross margin % EBITDA % Operating profit % 90% 80% 78% 81% 80% 82% 80% 70% 60% 50% 40% 30% 49% 50% 46% 46% 43% 35% 34% 32% 33% 34% 20% 10% 0% HY19 31

32 CENTS EARNINGS AND DIVIDENDS Y-O-Y +24% HY18 HY 19 EPS DPS 32

33 STRONG BALANCE SHEET POSITIONED FOR GROWTH Strong cash generation Clean, uncomplicated Balance Sheet Increases in PPE New asset class Contract asset Inventory levels geared for growth Clean debtors book 33 days Gearing for organic growth 33

34 R 000 CASH GENERATED AND UTILISATION Clear dashed items represents HY18 comparatives 34

35 SEGMENT PERFORMANCE 35

36 SEGMENT PERFORMANCE SUMMARY Key metrics and growth percentages South Africa Africa Other Europe Asia Pacific & ME United States ZAR R 000 Change R 000 Change R 000 Change R 000 Change R 000 Change Subscribers ( 000) % 55 (2%) 79 23% 61 43% 1 68% Annuity Revenue % % % % % EBITDA % % (11%) % (2 762) (27%) 36

37 OUTLOOK & QUESTIONS 37

38 A ROBUST OUTLOOK Well-positioned for growth and strong operating results Demand for telematics data continues to increase Exciting new applications Continued and significant investment in technology and capacity Lucrative growth opportunities across all channels Double digit annuity revenue and subscriber growth expected for the foreseeable future Target dividend cover of between 2 and 4 times HEPS, to be effective for FY19 38