Karooooo Ltd. · NASDAQ:KARO
Karooooo — Q2 FY23 Earnings Presentation
26 slides from Karooooo's earnings presentation, October 2022
Slide 1: Earnings Presentation Q2 FY23
Earnings Presentation Q2 FY23 1
Slide 2: Disclaimer
DISCLAIMER Forward-Looking Statements The information in this presentation (which includes any oral statements made in connection therewith, as applicable) include s “forward-looking statements.” Forward-looking statements are based on our beliefs and assumptions and on information currently availab
Slide 3: Carzuka, Karooooo, Logistics
NASDAQ TICKER “KARO” JSE TICKER “KRO” 100% 100% 70.1% CARZUKA KAROOOOO LOGISTICS Founded in South Africa, now headquartered in Singapore 3
Slide 4: We think beyond connected vehicles & equipment
We think beyond connected vehicles & equipment 4
Slide 5: To establish the leading on-the-ground operations cloud
To establish the leading on-the-ground operations cloud 5
Slide 6: We solve problems by digitally transforming on-the-ground operations
WE SOLVE PROBLEMS BY DIGITALLY TRANSFORMING ON-THE-GROUND OPERATIONS Fleet & Logistics & Field Worker Video ESG Risk Warehouse Secure Vehicle Competitively Equipment Delivery Management Based Safety Compliance Mitigation & Other Buying & Priced Management Operations & Reporting Systems Selling Insur
Slide 7: Investment Highlights
INVESTMENT HIGHLIGHTS Early stage of a large & growing Multiple levers for expansion Decade-plus track record of profit & addressable market • Transformative products enhancing customer growth at scale acquisition • Strong customer acquisition consistently growing our • Mobility is core to all opera
Slide 8: Early stage of a large & long-term growth opportunity
EARLY STAGE OF A LARGE & LONG-TERM GROWTH OPPORTUNITY Mobility is core to all on-the-ground operations A massive opportunity (2) of global GDP 1,227,586 164,791 136,483 71,153 FY23 Q2 FY23 Q2 FY23 Q2 FY23 Q2 IoT DATA IS KEY TO IMPROVING OPERATIONS (1)Management’s best estimate based on market resear
Slide 9: Untapped network effect of our platform
UNTAPPED NETWORK EFFECT OF OUR PLATFORM THE SCALE OF DATA ON OUR CLOUD IS VAST & GROWING (1)For the month of September 2022 9
Slide 10: Robust & consistently profitable business model
ROBUST & CONSISTENTLY PROFITABLE BUSINESS MODEL SaaS ARR growth ZAR M End-to-end all inclusive IoT cloud software platform Compound annual growth rate Relevant, up-to-date, continuous improvements, seamless integrations, easy-to-use, customer facing technology USD 174.1M (1) Expanding distribution n
Slide 11: Performance for Q2 FY23
YN A KAROOO00 Performance for Q2 FY23
Slide 12: Karooooo's record earnings & cash generation
KAROOOOO’s RECORD EARNINGS & CASH GENERATION Earnings per Share Profit for the period Q2 FY23 ZAR 4.93 Q2 FY23 ZAR 155M Q2 FY22 ZAR 3.85 Q2 FY22 ZAR 123M Cash Generated from Free Cash Flow Operating Activities Q2 FY23 ZAR 240M Q2 FY23 ZAR 106M Q2 FY22 ZAR 169M Q2 FY22 ZAR 17M RESILIENT BUSINESS MODE
Slide 13: Karooooo's strong growth at scale
KAROOOOO’s STRONG GROWTH AT SCALE (1) Revenue Profit Adjusted EBITDA ZAR M ZAR M ZAR M ▲ ▲ ▲ Strong unit economics 859 377 Robust operating margins 659 (2) 551 155 289 298 Consistently beaten Rule of 40 129 123 Strong balance sheet Strong cash position Q2 FY21 Q2 FY22 Q2 FY23 Q2 FY21 Q2 FY22 Q2 FY23
Slide 14: Karooooo's robust cash position
KAROOOOO’s ROBUST CASH POSITION Net Cash on hand ZAR M 1 001 854 718 554 Q2 FY23 Q1 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q2 FY22: 34 days BOLSTERED BY STRONG FREE CASH FLOW GENERATION NOTWITHSTANDING INVESTMENT FOR SUSTAINABLE GROWTH 14
Slide 15: Safety in Karooooo's cash flow generation
SAFETY IN KAROOOOO’s CASH FLOW GENERATION Operating Activities Investing Activities: PPE Free Cash Flow(1) ZAR M ZAR M ZAR M Includes telematics devices still to be installed 240 ▲ Strong Revenue Generation 169 152 134 ▲ 12 106 Strong Earnings Growth > Strong Cash Flow 17 Q2 FY22 Q2 FY23 Q2 FY22 Q2
Slide 16: Increasing Karooooo's presence across industries
INCREASING KAROOOOO’s PRESENCE ACROSS INDUSTRIES SERVICING SMALL TO LARGE ENTEPRISE CUSTOMERS 16
Slide 17: Performance by business segment
PERFORMANCE BY BUSINESS SEGMENT KAROOOOO NASDAQ “KARO” 100% 100% 70.1% JSE “KRO” KAROOOOO CARZUKA LOGISTICS Q2 FY23 Composition of Total Revenue 90% 6% 4% Revenue (ZAR M) 859 753 65 41 Revenue Growth (%) 30% 16% >100% n/a1 Operating Profit/(Loss) (ZAR M) 218 223 (6) 1 Operating Profit Growth (%) 23%
Slide 18: Cartrack consistently growing quality revenue
CARTRACK CONSISTENTLY GROWING QUALITY REVENUE Subscription Revenue Subscription Revenue Revenue as a % of Total Revenue Growth Growth Q2 FY23 ZAR 733M Q2 FY23 ZAR 753M Q2 FY23 97% Q2 FY22 ZAR 628 M Q2 FY22 ZAR 650M Q2 FY22 97% CARTRACK HAS GREAT VISIBILITY OF FUTURE REVENUE 18
Slide 19: Cartrack extending decade-plus track record of execution
CARTRACK EXTENDING DECADE-PLUS TRACK RECORD OF EXECUTION Subscribers Subscription Revenue Profit 000s ZAR M ZAR M ▲ ▲ ▲ 733 1 600 628 163 1 409 129 127 542 1 175 Q2 FY21 Q2 FY22 Q2 FY23 Q2 FY21 Q2 FY22 Q2 FY23 Q2 FY21 Q2 FY22 Q2 FY23 PROVEN ABILITY TO SCALE IN VARYING MARKET CONDITIONS 19
Slide 20: Cartrack record Q2 net subscriber additions
CARTRACK RECORD Q2 NET SUBSCRIBER ADDITIONS ▲ 70,916 61 776 60 470 59,911 57 251 55 587 41,626 42 139 16 800 7,032 FY21 FY22 FY23 FY21 FY22 FY23 FY21 FY22 FY23 FY21 FY22 FY23 Q1 Q2 Q3 Q4 20
Slide 21: Cartrack continues to expand
CARTRACK CONTINUES TO EXPAND Q-on-Q ‘000s Subscribers Q2 FY21 Q2 FY22 Q2 FY23 Change Subscribers 903 1,094 1,228 12% Subscribers 110 132 165 25% Subscribers 102 118 136 16% Subscribers 60 65 71 10% POSITIVE TRACTION IN SOUTHEAST ASIA 21
Slide 22: Cartrack attractive unit economics
CARTRACK ATTRACTIVE UNIT ECONOMICS Lifetime Value of Low Cost of Acquiring a Strong Comparative (1) Customer Relationships Customer (2) Benefits from ▲ Economies of Scale LTV to CAC Q2 FY22: 72% Q2 FY22: 28% WELL POSITIONED TO MATERIALLY INCREASE INVESTMENT FOR GROWTH (1) The product of our subscrip
Slide 23: Cartrack robust operating metrics investing for future growth
CARTRACK ROBUST OPERATING METRICS INVESTING FOR FUTURE GROWTH Long-term Q2 FY21 Q2 FY22 Q2 FY23 Targets (1) Research & Development as a % of Subscription Revenue 5% 6% 6% 4-6% Sales & Marketing as a % of Subscription Revenue 10% 13% 14% 17-19% General & Administration as a % of Subscription Revenue
Slide 24: Cartrack outlook for 2023 remains unchanged
CARTRACK OUTLOOK FOR 2023 REMAINS UNCHANGED FY21 FY22 HY23 FY23 Outlook Number of subscribers (000s) 1,306 1,526 1,600 1,700 – 1,900 Cartrack’s Subscription Revenue (ZAR M) 2,209 2,566 1,440 2,950 – 3,100 Cartrack’s Adjusted EBITDA margin (1) 49% 47% 50% 45% – 50% (1) Adjusted EBITDA margin is a non
Slide 25: Carzuka & Karooooo Logistics gaining momentum
CARZUKA & KAROOOOO LOGISTICS GAINING MOMENTUM Carzuka Karooooo Logistics Revenue Revenue (1) ZAR M ZAR M ▲ ▲ 65 41 50 28 24 32 18 24 9 3 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 STRONG QUARTER-ON-QUARTER GROWTH (1) Karooooo acquired 70.1% of Picup in September
Slide 26: Questions
YN A KAROOO00 Questions