Nutun Limited · JSE:NTU
Nutun — Transaction Capital — FY2022 Earnings Presentation
79 slides from Nutun's earnings presentation, November 2022
Slide 1: Transaction Capital Results Presentation FY2022
Transaction Capital ULTS Presentation For the year ended 30 September 2022 YEARS ASALISTED ENTITY
Slide 2: Transaction Capital group structure
Transaction Capital group structure Growing earnings base & expanding total addressable market through vertical integration & entering adjacent markets GLOBAL DIGITAL BUSINESS SERVICES MOBILITY PLATFORM Combines its unique technology, data & analytics WeBuyCars, SA Taxi & GoMo enable private & publi
Slide 3: Infinite possibilities
Infinite possibilities A Transaction Capital Company 3
Slide 4: Contents
presentation Contents for the year ended 30 September 2022 1 Performance overview Slide 05 2 Nutun Slide 14 3 Mobility Slide 23 4 WeBuyCars Slide 28 5 SA Taxi Slide 35 6 Conclusion Slide 41 7 Appendix Slide 43
Slide 5: Performance overview
01 Performance overview Results for the year ended 30 September 2022 7th Place | Merit award 10th Place | Share Price Performance Top Rated Top 10 ranking of EY’s Sunday Times Top 100 Companies 2022 • Most Accessible Senior Management Integrated Reporting Awards 2022 Excellence in Chartered Governan
Slide 6: Transaction Capital 10-year performance
Perf orm ance ov erv i ew Transaction Capital 10-year performance FY2022 core continuing earnings per share growth in line with long-term growth track record since listing in 2012 FY2022 vs FY2021 FY2022 Strong earnings Core continuing Core continuing Dividend earnings¹ Return on equity² Return on a
Slide 7: Key performance drivers
Perf orm ance ov erv i ew Key performance drivers Consistent earnings growth demonstrates defensiveness & relevance of business models GLOBAL DIGITAL BUSINESS SERVICES MOBILITY PLATFORM High earnings growth High earnings growth Earnings below FY2021 R3.0 billion R1 442 million 130 177 125 812 R15.4
Slide 8: Group portfolio mix
Perf orm ance ov erv i ew Group portfolio mix Earnings diversification, yielding high growth | Shifting towards capital light revenues Composition of earnings attributable to Transaction Capital 8% 7% 24% 43% 27% 41% <1% WeBuyCars 15% Nutun 2022 2021 2020 <1% SA Taxi GEO 70% 33% 32% Total earnings |
Slide 9: Operating context
Perf orm ance ov erv i ew Operating context Highly relevant business models, well positioned in relation to structural elements in local & global environment Personal vehicles Consumer environment Commuter shift from passengers to first ◉ SA unemployment rate remains elevated time vehicle owners ◉ “
Slide 10: Nutun performance overview
Perf orm ance ov erv i ew Nutun performance overview Positioned for strategic growth initiatives to capture emerging opportunities Accelerating historical growth trajectory | High growth potential Nutun delivers a range of global digital business services: ◉ Robust performance in FY2022 from two mai
Slide 11: WeBuyCars performance overview
Perf orm ance ov erv i ew WeBuyCars performance overview A provider of innovative mobility products in favourable market Leading private commuter mobility platform Structural elements support business model in SA’s large & resilient used vehicle market ◉ Continues to disrupt used vehicle ownership &
Slide 12: SA Taxi performance overview
Perf orm ance ov erv i ew SA Taxi performance overview Lower than expected earnings | Driven by closure of Toyota plant post KZN floods & minibus taxi industry constraints Performance below FY2021 levels Positioned as mobility platform ◉ Loan applications exceed historical levels Sustainably expandi
Slide 13: Group's ESEG performance update
Perf orm ance ov erv i ew Group's ESEG performance update Significant progress in embedding ESE in organisational culture Group highlights Consolidated 3 Johannesburg premises ◉ Hosted two ESEG investor roadshows | Ensuring proactive engagement with investors into 1 new green building | Reducing on
Slide 14: Nutun
02 Nutun Results for the year ended 30 September 2022
Slide 15: Global digital business services
Nut un Global digital business services Provides broad range of digital business services across customer lifecycle to global client base Pro-actively explore opportunities for local & global growth, across customer lifecycle in various sectors Customer experience management services (CXM services)
Slide 16: Environment & market context: global digital business services
Nut un 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 is preferred destination for outsourced services4 outsourced services industry in
Slide 17: Global digital business services | Major international peers
Nut un 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 $5.3bn Sitel $2.2bn Europe Revenue TTEC $2.3bn Accenture $5
Slide 18: Environment & market context | Collection services in SA
Nut un Environment & market context | Collection services in SA Structural elements support industry relevance & growth in SA | Consumer sector remains strained 25% ~40 million Adults¹ in SA ~27 million Credit active consumers² 1 3 Consumers non-performing2 in of credit-active consumers are ~37.3% (
Slide 19: Nutun market positioning | Diversified business model
Nut un Nutun market positioning | Diversified business model Expanded total addressable market | Diversified by service, geography, sector, client & mandate Suite of digital business services as trusted partner CE Services CXM Services to global client base 39% Retail CE Services 52% Specialised Spe
Slide 20: Nutun financial performance
Nut un Nutun financial performance Demonstrated strong financial performance | Accelerating historical growth rate Core earnings2 ◉ 36% to R434m (FY2021: R320m) ◉ TC’s attributable portion 28% to R409m (FY2021: R320m) ◉ Pre-provision profit 22% 73.0 69.1 70.6 Revenue3 26% to R3.0bn (FY2021:
Slide 21: CE Services | Acquisition of NPL portfolios as principal
Nut un CE Services | Acquisition of NPL portfolios as principal Growth trajectory to support future positive performance Collection multiple vintage performance as at 30 September 2022 7 224 6 370 2018 1.5 1.1 2.6 R639m 5 181 book debts acquired (Rm) 93 2019 1.3 1.0 2.3 R1 064m Cost price of purchas
Slide 22: Nutun strategic growth priorities
Nut un Nutun strategic growth priorities Global digital business services business offers distinct avenues for growth Leveraging its low-cost infrastructure & technology, Nutun provides broader range of digitally enabled business services as trusted partner to global client base in SA, Australia & U
Slide 23: Mobility
03 Mobility Results for the year ended 30 September 2022
Slide 24: Mobility environment & market context
Mobi l i t y Environment & market context Strategically placed to capture emerging opportunities across private & public commuter mobility sectors Positive shift towards used vehicles, with Minibus taxi is largest & most vital mode of passengers becoming first time vehicle owners 1 transport within
Slide 25: Environment & market context: mobility platform addressable market
Mobi l i t y Environment & market context Consumer used vehicle finance, insurance & allied mobility services materially increases SA Taxi’s TAM & provides opportunity to diversify risk exposure MOBILITY PLATFORM ADDRESSABLE MARKET Private commuter mobility Public commuter mobility >11 000 000 Vehic
Slide 26: Environment & market context: demand vs supply
Mobi l i t y Environment & market context Demand materially exceeds supply in underserviced market segment | Facilitates high quality credit Private commuter mobility Public commuter mobility Monthly demand² Monthly supply¹ Less than Monthly demand² Total market supply USED VEHICLES ~1 450 NEW PRE-O
Slide 27: Used vehicle market context & environment
Mobi l i t y 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% ~515 000 ~1.2 million 0 -2 years 7% 42% financed 2 40% f
Slide 28: WeBuyCars
04 WeBuyCars Results for the year ended 30 September 2022
Slide 29: Mobility Platform | Private commuters
W eBuyCars Mobility Platform | Private commuters Enables mobility of private commuters in SA Growing earnings base through market share gains, e-commerce penetration & improved unit economics Market share gains ◉ Physical expansion through additional supermarkets | Varying in size & structure based
Slide 30: Used vehicle market context & environment
W eBuyCars Used vehicle market context & environment Strong growth in used vehicle sales volumes | New vehicle sales recovered to pre COVID-19 levels SA’s vehicle parc1 is despite new vehicle sales over last 10 years Shift from new to used vehicles ~11.2 million vehicles1 Vehicle PARC growth, re
Slide 31: Used vehicle market context & environment
W eBuyCars Used vehicle market context & environment Structural market conditions support used vehicle industry resilience Vehicle prices in SA VEHICLE PRICING INDEX (VPI) & CONSUMER PRICE INDEX (CPI)1 10% 5% 0% (5%) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Index - new (rate)
Slide 32: WeBuyCars financial performance
W eBuyCars WeBuyCars financial performance Continue to outperform against several key metrics | Well placed to build on long-term track record of growth Strong growth rate Core earnings1 41% to R762m (FY2021: R541m) CAGR FY2020 – FY2022: Core earnings1 59% Core earnings1 attributable to the grou
Slide 33: WeBuyCars operational performance
W eBuyCars WeBuyCars operational performance High growth business | Well placed to build on long-term track record of growth CAGR FY2020 – FY2022: E-commerce sales (Volume) 100% Vehicles bought 46% Record monthly volumes Vehicles sold 46% ◉ Favourable structural market conditions Vehicle bays
Slide 34: WeBuyCars strategic growth priorities
W eBuyCars WeBuyCars strategic growth priorities Favourable structural market conditions | Strategic initiatives continue to yield positive results with amplified opportunities Vehicle supermarket | Mbombela Market share through geographical expansion, e-commerce, 77% (HY2021: 92%) brand awareness
Slide 35: SA Taxi
05 SA Taxi Results for the year ended 30 September 2022 World Finance Sustainability Awards in category of Most Sustainable Inaugural social bond issuance on JSE’s sustainable segment Company in the Mobility Industry Social bond of the year award 2022 Environmental Finance
Slide 36: Mobility Platform | Public & private commuters
SA T ax i Mobility Platform | Public & private commuters Enables mobility of public & private commuters in SA Entering adjacent markets | Expanding total addressable market & growing earnings base ◉ Remain selective in taxi operators ◉ Enter consumer vehicle & vehicle variants, supportive of mobilit
Slide 37: SA Taxi environment & market context
SA T ax i Environment & market context Minibus taxi industry is defensive in a challenging environment | Industry is indispensable to economic activity Environment & lower commuter mobility impacting industry profitability Vehicle prices Fuel prices including fuel levies SA Taxi’s interest rates6 19
Slide 38: SA Taxi financial performance
SA T ax i SA Taxi financial performance Operating metrics remain under pressure | Disrupted vehicle supply (Toyota plant shut down) & slower collection ratios recovery Core earnings2 50.6 ◉ 26% to R369m (FY2021: R499m) ◉ TC’s attributable portion 26% to R304m (FY2021: R413m) 45.2 45.5 Net intere
Slide 39: SA Taxi credit performance
SA T ax i SA Taxi credit performance Improved credit quality | Credit metrics remain above target range Gross loans & advances 9% to R15.4bn ◉ Toyota vehicle prices 6.6% R12.2bn R14.0bn R15.4bn ◉ Number of loans originated 7% | Value 14% 26% 20% 21% • Preserving credit quality • Focused on e
Slide 40: SA Taxi strategic growth priorities
SA T ax i SA Taxi strategic growth priorities Serving public & Entering Expanding total private mobility adjacent addressable market & ecosystem markets growing earnings base GoMo ◉ Disrupting vehicle ownership in SA ◉ Capture market share in an under-penetrated used vehicle F&I sector ◉ Bespoke off
Slide 41: Conclusion
06 Conclusion Results for the year ended 30 September 2022
Slide 42: Key take-aways
Concl usi on Key take-aways Strong operational performance Divisions positioned to benefit from Strategic positioning of divisions Earnings in line with historical structural socio-economic realities WeBuyCars & SA Taxi growth rates Delivering good commercial returns & ◉ Enables mobility of private
Slide 43: Appendix
07 Appendix Results for the year ended 30 September 2022
Slide 44: Appendix contents
Contents 1 ESEG update Slide 45 2 Capital management Slide 53 3 Nutun Slide 57 4 WeBuyCars Slide 59 Appendix 5 SA Taxi Slide 65 Slide 76 for the year ended 30 September 2022 6 Glossary
Slide 45: ESEG update
07 Appendix ESEG update Results for the year ended 30 September 2022
Slide 46: Commitment to delivering shared value
Appendi x Transaction Capital’s commitment to delivering shared value Delivering shared value Our societal purpose is: ◉ Our business model operationalises commitment to sustainable & inclusive growth • Consistently generating good commercial returns for clients & industry value chains To promote st
Slide 47: Commitment to delivering shared value: ESE framework
Appendi x Transaction Capital’s commitment to delivering shared value Economic, Social & Environmental (ESE) Framework Economic impact Social impact Facilitating economic development & growth We hire inclusively Nutun drives economic growth by promoting credit ESE We contribute to employment market
Slide 48: Economic impact
Appendi x Economic impact Transaction Capital focuses on traditionally under-served market segments where it can make a meaningful social impact supports economic growth & development We drive economic growth by promoting credit We contribute to consistent & sustainable We empower SMEs (who might ot
Slide 49: Social impact
Appendi x Social impact Our people ◉ Our people are the foundation of our ability to engage meaningfully with our clients, innovate We invest in our people’s potential in respective markets, leverage technology & data, & create shared value for our stakeholders ◉ We engage & reward employees to enge
Slide 50: Environmental impact
Appendi x Environmental impact We understand our important role in promoting climate resilience Emission targets ◉ Early adopted IFRS ISSB Sustainability & Climate Change Disclosure ◉ Supporting the Paris Agreement’s aim to limit Standards as well as JSE Sustainability Disclosure guidance. Good prog
Slide 51: Governance updates
Appendi x Governance updates Policy & disclosure enhancements Remuneration ◉ Transaction Capital continues to enhance disclosure of targets linked to remuneration, to facilitate transparent discussions ◉ An additional ESEG hurdle will be added into the long-term incentive (LTI) scheme this year. The
Slide 52: Early adoption of the IFRS & JSE Sustainability Disclosure Standard
Appendi x Early adoption of the IFRS & JSE Sustainability Disclosure Standard ◉ To standardise reporting we have adopted: ◉ These form a comprehensive ◉ We believe these standards converge, The draft IFRS ISSB The JSE’s Sustainability global baseline of simplify & standardise the sustainability Sust
Slide 53: Capital Management
07 Appendix Capital Management Results for the year ended 30 September 2022 22 Social bond of the year award 2022 Environmental Finance
Slide 54: Diversified debt funding strategy
Appendi x Diversified debt funding strategy Group liquidity position remains robust, underpinned by a conservative debt structure Diversification by debt investor category & capital pool Diversification by geography 10% 23% 14% 1% Local 9% International Institutional investors 24% Rest of Africa Ban
Slide 55: Diversified debt funding strategy | Continued
Appendi x Diversified debt funding strategy | Continued Private structured finance On balance sheet Debt structure Pass through structures Warehousing facilities (majority international DFIs) & syndicated loans FY2022 balance outstanding R5.9 billion R1.9 billion R6.8 billion R6.8 billion Compositio
Slide 56: Adequate access to liquidity
Appendi x Adequate access to liquidity Enables execution on organic & acquisitive growth opportunities WeBuyCars Assets R40.3 billion R21.2 billion R7.5 billion R5.6 billion Total Assets Total Assets Total Assets Total Assets R14.7 billion R4.2 billion R1.9 billion Inventories Net Loans & Advances P
Slide 57: Nutun
07 Appendix Nutun Results for the year ended 30 September 2022
Slide 58: Unique technology, data & analytics competencies
Appendi x 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
Slide 59: WeBuyCars
07 Appendix WeBuyCars Results for the year ended 30 September 2022
Slide 60: WeBuyCars | market positioning
Appendi x 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 cam
Slide 61: Used vehicle market context & environment
Appendi x 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 ◉ Dea
Slide 62: Global listed peers
Appendi x Global listed peers WeBuyCars business model unique in SA with comparable international peers Europe 2021 Asia Pacific 2021 Revenue Vehicles sold Revenue Vehicles sold (US$) (‘000) (US$) (‘000) P 4.7bn2 597 F 254m5 1.5 1 M 3.4bn 2 231 F 8.5bn2 n/a E 746m3 50 South Africa 2022 Revenue Vehic
Slide 63: WeBuyCars stacks up well against comparable international peers
Appendi x 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 Stock
Slide 64: WeBuyCars national footprint
Appendi x 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 27% 21% (FY2021: 28%) >10 0
Slide 65: SA Taxi
07 Appendix SA Taxi Results for the year ended 30 September 2022 World Finance Sustainability Awards in category of Most Sustainable Inaugural social bond issuance on JSE’s sustainable segment Company in the Mobility Industry Social bond of the year award 2022 Environmental Finance
Slide 66: Environment for minibus taxi operators
Appendi x Environment for minibus taxi operators Minibus taxis are the preferred mode of public transport due to competitive pricing, accessibility & reliability Lower LSM consumers spend ~40% of monthly household income on public transport fares Commuter trips via bus & rail often travel first & la
Slide 67: Vehicle mobility analytics applied to manage credit & insurance risk
Appendi x 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 68: SA Taxi market positioning
Appendi x SA Taxi market positioning Vertically integrated business model Proportion of customers classified SA Taxi Finance as previously financially excluded ~75% Proportion of customer base Average score 15.4 billion 36 068 ~1.2 Score below which at which SA Taxi Gross loans Loans Vehicles tradit
Slide 69: SA Taxi market positioning: SA Taxi Direct
Appendi x SA Taxi market positioning Vertically integrated business model SA Taxi Direct ◉ SA Taxi Direct sells new minibus taxis & QRTs >R1.0 billion ◉ SA Taxi’s QRTs: Vehicle turnover per year • Rebuilt to a high-quality FY2022: R1 487m | 46% • Trusted product in the minibus taxi industry • Prov
Slide 70: SA Taxi market positioning: SA Taxi Protect
Appendi x SA Taxi market positioning Vertically integrated business model Telematics utilised for insurance underwriting, SA Taxi Protect premium pricing & prevention & detection of loss events >31 000 Majority financed Cell captive Insurance clients choose to be through Guardrisk clients insured by
Slide 71: SA Taxi market positioning: Auto Repairs
Appendi x SA Taxi market positioning Vertically integrated business model SA Taxi Auto Repairs ~28 500m² >4 450 >75% Workshop Minibus taxis Credit recovery rates facilities rebuilt per year on repossession, FY2021: ~24 000m² FY2021: >3 600 refurbishment & resale ~56 ~575 ~56 Refurbishment Employees
Slide 72: SA Taxi market positioning: Auto Parts
Appendi x SA Taxi market positioning Vertically integrated business model SA Taxi Auto Parts Manage cost of claim ◉ Import & locally procure new parts from source at low cost ◉ Salvage used parts from vehicles not economically viable to repair ◉ Manage credit losses & cost of insurance claims SA T
Slide 73: SA Taxi market positioning: transaction-based account
Appendi x SA Taxi market positioning Vertically integrated business model | Ultimate intention to combine telematics, rewards, finance & credit into transaction-based account for operators SA Taxi transaction-based account SANTACO & SA Taxi delivering sustainable benefits to SA Taxi clients & the in
Slide 74: SA Taxi operational performance
Appendi x SA Taxi operational performance SA Taxi operator profile Credit profile of loans on book ~1.2 50 years 4.7 years 78 months 5.7% 55 months ~9 690 ~765 Vehicles Average age Average age of Average loan term Credit loss ratio Average remaining Applications Loans originated per customer of cust
Slide 75: GoMo market positioning
Appendi x GoMo market positioning Aims to disrupt & capture market share in under-penetrated used vehicle F&I sector GoMo mobility solutions R241 million 1 132 71 months Gross loans Number of loans Average loan term at & advances on book origination R208 463 8% 31 Average origination Take up rate Go
Slide 76: Glossary
07 Appendix Glossary Results for the year ended 30 September 2022
Slide 77: Glossary
Glossary A vehicle inspection certification providing information on the mechanical AUS Australia DEKRA Report & technical status of the vehicle B2B Business-to-business (vehicle dealerships) EBITDA Earnings Before Interest, Taxes, Depreciation, & Amortisation B2C Business-to-consumer ESE Economic,
Slide 78: Glossary
Glossary Open market Minibus taxi operator not previously an SA Taxi client TAM Total addressable market taxi operator Additional gross margin earned on value-added products & allied services Product margin TC Transaction Capital including finance, insurance, tracking & other revenue QRT SA Taxi’s f
Slide 79: 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