Nutun Limited · JSE:NTU
Nutun — Transaction Capital — H1 2023 Earnings Presentation
63 slides from Nutun's earnings presentation, May 2023
Slide 1: Results Presentation for the half year ended 31 March 2023
Slide 2: Contents
Contents 1 Performance overview Slide 03 2 Nutun Slide 15 3 WeBuyCars Slide 22 4 Gomo Slide 28 5 SA Taxi Slide 31 6 Conclusion Slide 37 presentation 7 Appendix Slide 39 for the half year ended 31 March 2023
Slide 3: Performance overview
01 Performance overview Results for the half year ended 31 March 2023
Slide 4: Transaction Capital group structure
Transaction Capital group structure Strategic transformation has taken the group into new related segments & significantly expanded addressable market 100%¹ 74.2% Combines its unique WeBuyCars is a trusted Mobalyz houses our credit, technology, data & analytics principal trader of used insurance & f
Slide 5: Operating context
Perf orm anc e overvie w Operating context Business models well positioned in relation to structural elements in local & global environment Personal vehicles Consumer environment Shifts in SA used vehicle market in last 6 months ◉ SA unemployment rate remains elevated ◉ Recovery in new vehicle sales
Slide 6: Nutun performance overview
Perf orm anc e overvie w Nutun performance overview Positive momentum in strategic growth initiatives capturing emerging opportunities Strong momentum in advancing diversification of revenue streams Accelerating historical growth trajectory Revenue contribution highlights: ◉ Core continuing earnings
Slide 7: WeBuyCars performance overview
Perf orm anc e overvie w WeBuyCars performance overview Continues to disrupt used vehicle market through innovative mobility products Leading private commuter mobility platform in SA Continued increase in F&I penetration | Consumer sales growth | Lower dealership sales ◉ Market share growth strategi
Slide 8: SA Taxi performance overview
Perf orm anc e overvie w SA Taxi performance overview Lower than expected earnings resulting from shifts in minibus taxi operating environment Factors impacting minibus taxi industry over past 3-years ◉ Improbable/unpredictable black swan events Expected recovery of industry has not materialised • I
Slide 9: SA Taxi restructure and rebasing for future growth
Perf orm anc e overvie w SA Taxi performance overview Restructure of SA Taxi business model | Rebasing for future growth Recalibrating business | Rebasing for future growth TOTAL MARKET Finance market contracted Action Outcome Progress Environmental pressures minibus 1. Lower origination levels 40
Slide 10: Group performance overview
Perf orm anc e overvie w Group performance overview Core earnings from continuing operations Core earnings per share from continuing operations attributable to the group1 attributable to the group1 HY2023 HY2023 HY2022 restated HY2023 HY2022 restated Return on equity² 46% 48% R353 million R648 m
Slide 11: Key performance drivers
Perf orm anc e overvie w Key performance drivers Business models remain relevant & resilient despite impact of prevailing macroeconomic headwinds Strong earnings growth Continues to gain market share Rebasing for growth R1.9 billion R631 million 71 928 71 020 R17.1 billion 9.0% Revenue1 Cost price o
Slide 12: Group portfolio mix
Perf orm anc e overvie w Group portfolio mix Earnings diversification shifting towards capital light revenues Composition of earnings attributable to Transaction Capital 49% 11% 43% 25% 33% 45% SA Taxi Nutun 2023 2022 2021 WeBuyCars GEO 1% 40% 24% 29% Total earnings | HY2023 Earnings attributable to
Slide 13: Balance sheet funding & liquidity
Perf orm anc e overvie w Balance sheet funding & liquidity 1. Continued support from debt funders required to sustain SA Taxi’s ongoing Diversification by funding structure, instrument & geography lending operations ◉ Existing facilities remain available | New facilities under negotiation ◉ Debt cov
Slide 14: Group's ESEG performance update
Perf orm anc e overvie w Group's ESEG performance update Continued progress in embedding ESE in organisational culture Group highlights ◉ Facilitated the rehabilitation & education of 113 000 debtors (both consumers & SMEs) valued at R228 million, facilitating their ◉ Hosted first ESEG investor road
Slide 15: Nutun
02 Nutun Results for the half year ended 31 March 2023
Slide 16: Nutun environment & market context
Nutun Environment & market context Global digital business services | Structural elements support industry relevance & growth 3 shifts reshaping the digital global Structural elements support the services landscape SA a preferred destination for outsourced services4 outsourced services industry in S
Slide 17: Collection services in SA market context
Nutun Environment & market context | Collection services in SA Consumer sector remains strained | Structural elements support industry relevance & growth in SA ~24% ~40 million Adults¹ in SA ~27 million Credit active consumers² 1 3 in Consumers non-performing2 of credit-active consumers are ~36.1% (
Slide 18: Nutun market positioning
Nutun Nutun market positioning | Diversified business model Diversified by service, geography, sector, client & mandate Suite of digital business CX Services CE Services services as trusted partner Specialised 41% Specialised to global client base Retail 56% 43% lending lending Retail 10% CE Service
Slide 19: Nutun financial performance
Nutun Nutun financial performance Strong financial performance | Growth rate exceeding historical levels Core earnings2 ◉ 26% to R208m (HY2022: R165m) ◉ TC’s attributable portion 15% to R189m (HY2022: R164m) 75.9 Revenue3 50% to R1.9bn (HY2022: R1.3bn) 69.1 ◉ Foreign currency contribution to
Slide 20: CE Services: acquisition of NPL portfolios
Nutun CE Services | Acquisition of NPL portfolios as principal Growth trajectory to support future positive performance Collection multiple vintage performance1 as at 31 March 2023 7 429 6 876 2019 1.3 0,8 2.1 R 404m 5 883 book debts acquired (Rm) 2020 1.2 1,3 2.5 R 483m Cost price of purchased Rand
Slide 21: Nutun strategic priorities
Nutun Nutun strategic priorities Global digital business services offers distinct avenues for growth Leverage South African ZAR denominated resources, data, technology & analytical capabilities to drive local & global growth, across customer lifecycle in various sectors Customer experience managemen
Slide 22: WeBuyCars
03 WeBuyCars Results for the half year ended 31 March 2023
Slide 23: Used vehicle market context & environment
W eBuyCars Used vehicle market context & environment New vehicle sales recovered to pre COVID-19 levels | High demand for affordable used vehicles SA’s vehicle parc1 is despite new vehicle sales over last 10 years Shift from new to used vehicles ~11.1 million vehicles1 Vehicle parc growth, reple
Slide 24: Structural market conditions support used vehicle industry
W eBuyCars Used vehicle market context & environment Structural market conditions support resilience of used vehicle industry Structural elements supporting used Vehicle prices in SA vehicle sector remain positive VEHICLE PRICING INDEX (VPI) & CONSUMER PRICE INDEX (CPI) 1 ◉ 23% of households use per
Slide 25: WeBuyCars operational performance
W eBuyCars WeBuyCars operational performance Continue to gain market share | Margin pressure | Reduction in ASP1 CAGR HY2021 – HY2023: ASP1 per vehicle 2% Vehicles bought 29% Vehicles sold 31% ◉ Agile business model & quick stock turn allowed rapid response to market change Vehicle bays 48%
Slide 26: WeBuyCars financial performance
W eBuyCars WeBuyCars financial performance Margin pressure in HY2023 impacted performance | Positioned to deliver stronger results in HY2023 CAGR HY2021 – HY2023: Core earnings1 22% to R316m (HY2022: R406m) Core earnings1 11% EBITDA 20% Core earnings1 attributable to the group 22% to R234m R
Slide 27: WeBuyCars strategic growth priorities
W eBuyCars WeBuyCars strategic growth priorities Strategic positioning & initiatives continue to yield positive results Market share through geographical expansion, e-commerce, brand awareness & technology enhancements Grow into existing infrastructure ◉ Operational efficiencies & sales volume
Slide 28: Gomo
04 Gomo Results for the half year ended 31 March 2023
Slide 29: Used vehicle market context & environment
G om o Used vehicle market context & environment Strong growth in number of used vehicles sold & financed Structural shift to finance older used vehicles4 Vehicle sales in SA 9+ years 31% New vehicles1 Used vehicles1 0-2 years 35% 13% 0 -2 years 7% 44% financed 2 39% financed 3 13% Y-o-Y financ
Slide 30: Gomo market positioning
G om o Gomo market positioning Aims to disrupt & capture market share in under-penetrated used vehicle F&I sector Gomo mobility solutions R454 million 2 230 72 months Gross loans Number of loans Average loan term & advances on book at origination HY2022: R35 million HY2022: 142 HY2022: 71 ~R204 000
Slide 31: SA Taxi
05 SA Taxi Results for the half year ended 31 March 2023
Slide 32: SA Taxi environment & market context
SA T ax i Environment & market context Structural elements support minibus taxi industry resilience Minibus taxi is the largest & most vital mode of transport within integrated public transport network Minibus taxi >16% since 2013¹ PUBLIC 84% ◉ Preferred form of transport due to accessibility & fl
Slide 33: Minibus taxi industry economic pressures
SA T ax i Environment & market context Minibus taxi industry is indispensable to economic activity | Macroeconomic environment & lower commuter mobility impacting industry profitability Vehicle prices SA Taxi’s interest rates6 Fuel prices including fuel levies Commuter mobility R544 700 Fuel prices
Slide 34: Vehicle mobility analytics applied to manage credit & insurance risk
SA T ax i Vehicle mobility analytics applied to manage credit & insurance risk Minibus taxi industry is indispensable to SA’s productivity but environment & lower commuter mobility impacting industry profitability Lockdown Lockdown levels in 2020 Risk-adjusted lockdown levels in 2021 levels in 2022
Slide 35: SA Taxi financial performance
SA T ax i SA Taxi financial performance Operating metrics remain under pressure given taxi industry affordability constraints 51.2 Core earnings2 ◉ 77% to R63m (HY2022: R275m) ◉ TC’s attributable portion 77% to R52m (HY2022: R226m) 38.1 34.2 10.2 Net interest margin at 9% (HY2022: 11.8%) 11.9 11
Slide 36: SA Taxi credit performance
SA T ax i SA Taxi credit performance Focus on improving credit quality at origination & managing performance on existing loan book Gross loans & advances 10% to R17.1bn ◉ Toyota vehicle prices ~6% R13.2bn R15.6bn R17.1bn ◉ Number of loans originated 26% | Value 23% 16.3 • Preserving credit q
Slide 37: Conclusion
06 Conclusion Results for the half year ended 31 March 2023
Slide 38: Key take-aways
Conc lus ion Key take-aways Divisions positioned to Margin pressure experienced in Balance sheet benefit from structural HY2023 reflected in earnings socio-economic realities Balance sheet remains Should be considered against high sufficiently capitalised Delivering good commercial comparator base
Slide 39: Appendix
07 Appendix Results for the half year ended 31 March 2023
Slide 40: Appendix contents
Contents 1 Capital management Slide 41 2 Nutun Slide 45 3 WeBuyCars Slide 48 4 SA Taxi Slide 54 Appendix 5 Glossary Slide 60 Results for the half year ended 31 March 2023
Slide 41: Capital management
APPENDIX Capital management Results for the half year ended 31 March
Slide 42: Diversified debt funding strategy
Appendix Diversified debt funding strategy Diversification by funding structure, instrument & geography Diversification by debt investor category & capital pool 11% 22% 24% 12% Warehousing facilities 37% On-balance sheet & syndicated 30% Securitisation & pass-through Institutional investors 8% Priva
Slide 43: Diversified debt funding strategy: TC group overview
Appendix Diversified debt funding strategy | TC group overview WeBuyCars Entity (all entities which make up the GEO) HY2023 balance R2 billion R4.4 billion R1.6 billion R0.4 billion outstanding 52% mortgage finance Composition ~8% ~18% ~6% ~2% Debt investors 13 debt investors % Holding 12 debt inves
Slide 44: Diversified debt funding strategy: SA Taxi
Appendix Diversified debt funding strategy | SA Taxi Debt structure Pass through structures Warehousing facilities Private structured finance Traditional corporate funding HY2023 balance SATIF SATDF/SATS outstanding R5.4 billion R2.7 billion R0.6 billion R2.3 billion R4.9 billion Composition ~34% ~1
Slide 45: Nutun
APPENDIX Nutun Results for the half year ended 31 March 2023
Slide 46: Global digital business services: major international peers
Appendix Global digital business services | Major international peers Combines unique technology, data & analytics to provide broader range of digitally enabled business services as trusted partner to global client base USA Revenue Concentrix $6.3bn Sitel $4.0bn Europe Revenue TTEC $2.4bn Accenture
Slide 47: Unique technology, data & analytics competencies
Appendix Unique technology, data & analytics competencies Enabling intelligent digital business services Master Data Universe (MDU) - Distribution of monthly collections per enriched data on employment risk segment¹ each individual Master Data Universe 45% 1% Other Data is current, >12 million >15 m
Slide 48: WeBuyCars
APPENDIX WeBuyCars Results for the half year ended 31 March 2023
Slide 49: WeBuyCars market positioning
Appendix WeBuyCars | market positioning Competitive advantages Proprietary data Well-known, reputable & trusted brand ◉ Leveraging ~20 years of vehicle, price, consumer ◉ In industry where trust & customer satisfaction has been low & other data with AI & machine learning ◉ Effective advertising camp
Slide 50: Used vehicle market context & environment
Appendix Used vehicle market context & environment Used vehicle industry is large & highly fragmented, with various operating models Dealer | Groups vs Independent ◉ Stockholders with inventory on balance sheet private commuter private commuter ◉ >3 000 dealers (~2 100 franchised) Stockholder ◉ Deal
Slide 51: Global listed peers
Appendix Global listed peers WeBuyCars business model unique in SA with comparable international peers Europe 2022 Asia Pacific 2021 Revenue Vehicles sold Revenue Vehicles sold (US$) (‘000) (US$) (‘000) P 6.0bn2 650 F 254m5 1.5 1 M 3.4bn2 231 F 8.1bn2 n/a E 1.0bn3 65 South Africa 2022 Revenue Vehicl
Slide 52: WeBuyCars stacks up well against international peers
Appendix WeBuyCars stacks up well against comparable international peers Profitability surpasses comparable peers, supported by efficient inventory management & effective advertising spend E-commerce & physical E-commerce & physical E-commerce & physical Business model Stockholder Stockholder Stockh
Slide 53: WeBuyCars national footprint
Appendix WeBuyCars national footprint 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 20% 14% (HY2022: 24%) >10 00
Slide 54: SA Taxi
APPENDIX SA Taxi Results for the half year ended 31 March 2023
Slide 55: Environment & market context
Appendix Environment & market context Minibus taxi industry is defensive & growing despite challenging environment Monthly supply¹ less than Monthly demand² Total SA Taxi’s market supply total application ~1 620 ~9 360 Total Addressable Market HY2022: ~1 800 HY2022: ~10 100 >250 000 Minibus Taxis NE
Slide 56: Environment for minibus taxi operators
Appendix Environment for minibus taxi operators Minibus taxis are the preferred mode of public transport due to accessibility & reliability Lower LSM consumers spend ~40% of monthly household income on public transport fares Commuter trips via bus & rail often travel first & last KM utilising minibu
Slide 57: SA Taxi market positioning
Appendix SA Taxi market positioning Vertically integrated business model Proportion of customers classified SA Taxi Finance as previously financially excluded ~ 79% Proportion of customer base Average score 17.1 billion 36 963 ~1.2 Score below which at which SA Taxi Gross loans Loans Vehicles tradit
Slide 58: SA Taxi market positioning: insurance
Appendix SA Taxi market positioning Vertically integrated business model Telematics utilised for insurance underwriting, premium pricing & prevention & detection of loss events SA Taxi Protect >31 000 Majority financed Cell captive Insurance clients choose to be through Guardrisk clients insured by
Slide 59: SA Taxi operational performance
Appendix SA Taxi operational performance SA Taxi operator profile Credit profile of loans on book ~1.2 50 years 5.4 years 82 months 5.6% 48 months ~9 357 ~657 Vehicles Average age Average age of Average loan term Credit loss ratio Average remaining Applications Loans originated per customer of custo
Slide 60: Glossary
08 Glossary Results for the half year ended 31 March 2023
Slide 61: Glossary
Glossary ASP Average selling price CPS Cents per share AUS Australia A vehicle inspection certification providing information on the mechanical DEKRA report & technical status of the vehicle B2B Business-to-business (vehicle dealerships) DFI Development finance institution B2C Business-to-consumer E
Slide 62: Glossary
Glossary 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 NPL portfolio SDGs Sustainable Development Goals collected as principal Open market
Slide 63: 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