Nutun Limited · JSE:NTU
Nutun — Transaction Capital — FY2023 Earnings Presentation
45 slides from Nutun's earnings presentation, November 2023
Slide 1: Presentation: Year ended 30 September 2023
Presentation For the year ended 30 September 2023
Slide 2: Introduction
Introduction Results for the year ended 30 September 2023
Slide 3: Contents
Contents 1 Introduction 02 2 SA Taxi 07 3 Gomo 13 4 WeBuyCars 15 5 Nutun 19 6 Conclusion 24 7 Appendix 28
Slide 4: Burning questions
Introduc tion Burning questions Intr oduc tion How did Q1 management get SA Q4 Will there be a Taxi so wrong? rights issue? What is the Are WeBuyCars & Q2 contagion risk Q5 Nutun still growth from SA Taxi? companies? What is the funding status in SA Taxi & What does value Q3 will it require more Q6
Slide 5: Holding company commercial view and simplified balance sheet
Introduc tion Transaction Capital Q2 SA Taxi contagion risk? | What is the risk of default? Intr oduc tion Holding company | Commercial view Q4 Will there be a rights issue? | No rights issue contemplated Simplified balance sheet1 Income statement PREF SHARES (2027)2 R489 m MANAGEMENT FEES FROM SUBS
Slide 6: Performance overview
Introduc tion Performance overview Intr oduc tion R16.4 billion 6 387 Gross loans & Loans originated 30 141 851 R4.1 billion6 R2.4 billion R1.7 billion advances 7% 30% Stock days Number of vehicles Revenue CX Services1 CE Services2 FY2022: R15.4bn FY2022: 9 178 20% sold 13% 39% >100% 3%
Slide 7: SA Taxi
SA Taxi Results for the year ended 30 September 2023
Slide 8: Environment & market context
SA T ax i Environment & market context Q1 How did management get SA Taxi SA T ax i Despite industry-wide structural shift, minibus taxis remain indispensable to South Africa’s economy so wrong? Business model change Continued pressure on minibus taxi Consumers under pressure resulting in Business st
Slide 9: SA Taxi financial performance
SA T ax i SA Taxi financial performance SA T ax i Operating metrics remain under pressure given taxi industry affordability constraints Core earnings2 >100% to -R575m (FY2022: R369m) 78.8 1 600 1 500 16.0 1 400 50.6 R14bn R15.4bn R16.4bn 1 300 Core earnings¹ (Rm) Gross loans & advances 45.5 14.0 1
Slide 10: Restructure of SA Taxi business model
SA T ax i Restructure of SA Taxi business model SA T ax i Restructure of SA Taxi business model | Path to stabilisation Action HY23 Strategy FY23 Strategy Lower loan origination levels with a move away from ◉ 0 new ◉ 400 new 1 new minibus taxis to only pre-owned vehicles to create ◉ 180 QRT (fully r
Slide 11: Restructure of SA Taxi balance sheet
SA T ax i Restructure of SA Taxi balance sheet Q3 What is the funding status in SA Taxi & will SA T ax i Restructure of SA Taxi balance sheet | Path to stabilisation it require more capital from TC? Action FY23 Strategy ◉ Balance sheet restructure is critical to SA Taxi’s sustainability due to asset
Slide 12: Proposed SA Taxi structure (simplified)
SA T ax i Proposed SA Taxi structure (simplified) SA T ax i All stakeholders are in agreement that the business should continue operating SA Taxi SA Taxi Servicer Holdings Development Finance Fundamental principle of proposal Debt: R0.67 billion Debt: R4.5 billion Unencumbered No external capital re
Slide 13: Gomo
Gomo Results for the year ended 30 September 2023
Slide 14: Gomo market positioning
Gomo market positioning Going forward Gomo positioned as a capital-light servicer following successful proof of concept phase G om o Gomo | Principal | Proof of concept phase ◉ Launched (Jan 2022) fulfilling need for finance & insurance solutions of older vehicles at the lower end of the pre-owned v
Slide 15: WeBuyCars
WeBuyCars Results for the year ended 30 September 2023
Slide 16: Used vehicle market context & environment
W eBuyCars Used vehicle market context & environment W eBuyCars Q5 Is WeBuyCars still a growth company? Structural market conditions support resilience of used vehicle industry Structural elements supporting used vehicle sector remain positive Vehicle price inflation1 ◉ Demand for more affordable us
Slide 17: WeBuyCars financial & operational performance
W eBuyCars WeBuyCars financial & operational performance W eBuyCars Continues to gain market share in tough operating environment ~21% Vehicle bays ~18% Core earnings¹ attributable to group (Rm) E-commerce sales ~27% (Volumes) ~14% Core earnings (Rm) ~22% ~30% Vehicles sold EBITDA (Rm) Vehicles boug
Slide 18: WeBuyCars unique positioning in used vehicle market
W eBuyCars WeBuyCars unique positioning in used vehicle market W eBuyCars Dealer | Groups & Independent ◉ Stockholders with inventory on balance sheet ◉ >3 000 dealers ◉ Dealership groups affiliated to OEMs • Limited brand optionality & pricing flexibility private commuter private commuter ◉ Indepen
Slide 19: Nutun
Nutun Results for the year ended 30 September 2023
Slide 20: Environment & market context | CX services
Environment & market context | CX services Structural elements support industry relevance & growth Nutun NUTUN CX services clients Structural elements UK support the outsourced services industry in SA1 USA ◉ Low-cost ZAR-based infrastructure South Africa ◉ High unemployment | Supply of diverse labou
Slide 21: Environment & market context | Collection services in SA
Environment & market context | Collection services in SA CE services | Nutun acts as a principal acquiring & then collecting on NPL portfolios in South Africa Nutun ~40.7 million Adults¹ in SA ~27.05 million Credit active consumers² 1 in 3 Consumers non-performing2 ~24% of credit-active ~37% (2022:
Slide 22: CE Services | Acquisition of NPL portfolios as principal
CE Services | Acquisition of NPL portfolios as principal Q2 What is the contagion risk from SA Taxi? Nutun 7 224 7 650 Carrying value of purchased book debts 19% to R5.0bn (FY2022: R4.2bn) 5 025 6 370 4 208 Investment into ◉ Deployed capital conservatively 3 441 SA NPL portfolios • Current market
Slide 23: Nutun financial performance
Nutun financial performance Q5 Is Nutun still a growth company? Strong financial performance Nutun Revenue contribution highlights 58% 1 000 40% 47% Foreign currency Core earnings2 10% to R479m (FY2022: R434m) FY2023 31% contributing R1.9bn Revenue ◉ TC’s attributable portion 7% to R436m (FY2022
Slide 24: Conclusion
Conclusion Results for the year ended 30 September 2023
Slide 25: Burning issues
Burning issues Conc lus ion ◉ Underestimated impact of COVID on taxi industry | Expected a quick & full recovery How did ◉ Underestimated extent of change in Q1 management get SA macro on operators Taxi so wrong? ◉ Slow to respond ◉ Inefficiencies in business ◉ WeBuyCars & Nutun adequately cover hol
Slide 26: Unlocking shareholder value
Unlocking shareholder value Conc lus ion 1. Moving from operational 2. Return to 3. Founder lead 4. Remove holding 5. Drive group to a hands-on, entrepreneurial & managed company debt & simplicity active investment roots unlock full value holding company of assets Imperative in FY2024 remains to res
Slide 27: Q&A
Q&A Results for the year ended 30 September 2023
Slide 28: Appendix
Appendix Results for the year ended 30 September 2023
Slide 29: Contents
APPENDIX Contents 1 Balance sheet funding 30 2 SA Taxi 33 3 WeBuyCars 37 4 Nutun 40 5 Glossary 42
Slide 30: Balance sheet funding
APPENDIX Balance sheet funding Results for the year ended 30 September 2023
Slide 31: Diversified debt funding strategy | TC group overview
Appendix Diversified debt funding strategy | TC group overview Appendix WeBuyCars (all entities which make up the GEO) FY2023 balance R2 billion R4.7 billion R1.4 billion R0.5 billion outstanding R9.2bn of assets; R4.7bn of IBLs ◉ Net debt at TC ~R1.1bn ◉ Supported by R6bn assets ◉ Senior debt on Go
Slide 32: Diversified debt funding strategy | SA Taxi
Appendix Diversified debt funding strategy | SA Taxi Appendix Pass through structures Warehousing facilities Private structured finance Traditional corporate funding FY2023 balance SATIF SATDF/SATS outstanding R4.9 billion R3 billion R3.4 billion R4.7 billion R0.7 billion Debt investors 23 debt inve
Slide 33: SA Taxi
APPENDIX SA Taxi Results for the year ended 30 September 2023
Slide 34: Environment & market context
Appendix Environment & market context Appendix Structural shift in industry SA Taxi’s interest rates Commuter mobility 8.25% 100% 97% Vehicle prices Repo rate5 SA Taxi fleet Average distance FY2022: 6.25% operating per vehicle R577 800 ~R8 284 Toyota Hiace (diesel) price¹ Impact on monthly Since
Slide 35: Environment & market context
Appendix Environment & market context Appendix Minibus taxi industry is defensive & growing despite challenging environment Monthly supply¹ Monthly demand² less than Total SA Taxi’s market supply total application ~1 600 ~8 445 Total Addressable Market FY2022: ~1 450 FY2022: ~9 691 >250 000 Minibus
Slide 36: SA Taxi operational performance
Appendix SA Taxi operational performance Appendix SA Taxi operator profile ~1.2 51 years 5 years ~29% Credit profile of loans on book Vehicles Average age Average age of Loans originated per customer of customer vehicle to repeat customer 84 months 6.6% 53 months Average loan term Credit loss ratio
Slide 37: WeBuyCars
APPENDIX WeBuyCars Results for the year ended 30 September 2023
Slide 38: WeBuyCars operational performance
Appendix WeBuyCars operational performance Appendix Continues to disrupt used vehicle market through innovative mobility products Continued increase in F&I penetration | Consumer sales growth | Lower dealership sales 79.0% Leading private commuter mobility platform in SA 71.4% 62.7% ◉ Market share g
Slide 39: WeBuyCars national footprint
Appendix WeBuyCars national footprint Appendix Vertically integrated e-commerce & physical infrastructure E-commerce platform ◉ 100% data driven processes | Proprietary pricing algorithms ◉ Online solution allows to buy, exchange or finance vehicle & offers F&I products 7 Limpopo 22% 21% (FY2022: 29
Slide 40: Nutun
APPENDIX Nutun Results for the year ended 30 September 2023
Slide 41: CE Services | Acquisition of NPL portfolios as principal
Appendix CE Services | Acquisition of NPL portfolios as principal Appendix Collection multiple vintage performance1 as of 30 September 2023 2019 1.4 0.8 2.2 R 1 064m Estimated Remaining Collections (ERC) 6% to R7.7bn supporting strong annuity cash flows & predictable growth book debts acquired (Rm
Slide 42: Glossary
APPENDIX Glossary Results for the year ended 30 September 2023
Slide 43: Glossary
Glossary AI Artificial intelligence CX Services Customer experience management services ASP Average selling price COVID-19 The novel Coronavirus & the disease it causes AUM Assets under management CPS Cents per share AUS Australia A vehicle inspection certification providing information on the mecha
Slide 44: Glossary
Glossary HEPS Headline earnings per share SATDF SA Taxi Development Finance LSM Living Standards Measure SATIF SA Taxi Impact Fund Nutun Previously branded ‘Transaction Capital Risk Services’ SATS SA Taxi Securitisation Non-performing consumer loan portfolios acquired by Nutun to be SDGs Sustainable
Slide 45: Disclaimer
DISCLAIMER This presentation may contain certain "forward-looking statements" regarding beliefs or expectations of the TC Group, its directors & other members of its senior management about the TC Group's financial condition, results of operations, cash flow, strategy & business & the transactions d