Fleet Management and Logistics Investor Day 2012 Jacqui Carr divisional CEO
Divisional Structure Shared Services FINANCE CREDIT AND RISK IT OFFICE SERVICES MARKETING HUMAN CAPITAL SHARED SERVICES EQSTRA FLEET MANAGEMENT HYPER CAR EQSTRA RISK SOLUTIONS GPS TRACKING SOLUTIONS AMASONDO FLEET SERVICES CLOVER CONTRACT EQSTRA FLEXI LOGISTICS EQSTRA WORKSHOPS EQSTRA PANELSHOPS EQSTRA FLEXI RENT EQSTRA CONNECT EQSTRA EXPRESS QUICK CAB SPECIAL PROJECTS 2
Strategic Focus Areas Core business growth strategy remains unchanged being annuity leasing, maintenance and operational services of all on road vehicle classes to corporate clients in South Africa, and the rest of Africa 95% of revenue generating assets remain pure leasing assets Limited investment into logistics underpinned by annuity contracts Differentiation by evolving to broader full fleet management solutions : Tangible benefits through growing suite of value added products Scale and efficiencies to drive down costs 3
Market Overview Challenging economic conditions Flat leasing performance Reduction in fleet sizes and extension of replacement cycles of corporate fleets Impact of national transport strike Shift towards service based products - pro-active fleet management solutions Reduction in prime overdraft rate - direct impact on both revenue and profit Aggressive competition from traditional competitors and new entrants Anticipated changes in IFRS that affects lease accounting 4
How the fleet management division has evolved over the past 5 years Differentiation by continuing to evolve leasing products towards a full-fleet management solution Realigned business units to optimise efficiencies and provide a focussed approach Continue to work on ROI solution and drive down cost of ownership over time Focus on adding real value to all stakeholders 5
Our competitive positioning Ability to extract value from the entire value chain by a total solutions offering Managed products gaining recognition and improves financial ratios The move into the logistics arena will further leverage our service offering Ability to service all vehicle classes The acquisition of the GPS Tracking business has proved beneficial Implementation of Microsoft ERP system will further enhance operational efficiencies 6
Operational overview Fleet size: Leased products 17 915 Value added products 59 570 Total staff compliment: +- 910 employees BBBEE Level 3 ISO 9001 Compliant 7
Operational Overview Marginal increase in leasing book (FY2012) Strong growth in annuity, value added products (57%) Solid performance of Hypercar, including secondary income from insurance and warranty products Increased activity in municipal tenders Closure of manufacturing business unit and ongoing consolidation of workshop infrastructure in support of Clover contract 8
Financial Highlights June 2012 Rm 2012 2011 % ch Revenue-generating assets 2 804 2 576 8.9% Inventories 53 44 20.5% Other assets 282 213 32.4% Operating assets 3 139 2 833 10.8% Revenue 2 161 1 911 13.1% EBITDA 988 913 8.2% Operating profit 357 316 13.0% Net finance costs (137) (130) 5.4% Profit before taxation 219 186 17.7% PBT margin 10.1% 9.7% EBITDA to net finance costs 7.2x 7.0x Growth of R100m in leasing asset base results in a PBT loss of approximately R11m in the first year of lease period 9
Logistics : rationale Diversify dependence on vanilla leasing by offering supply chain solution (medium to long term) Leverage off existing group customers in Contract Mining Evolve Clover SA contract over medium term into primary and secondary distribution Increase secondary income opportunities off leasing asset base 10
Major clients 11
New contracts concluded in past period Renewal of Clover SA contract for ten years effective 1 July 2012 SAB Miller conversion from value added services to full service leasing on a phased approach City of Johannesburg outsource of managed services on commercial fleet effective 1 November 2012 Transnet interim contractor on commercial vehicles pending total outsource in 2013/2014 Phase in of leasing on corporate fleets including : Schindler Basil Read Robert Bosch AC Nielsen Medical Research Council Neotel 12
The Year Ahead Growth and leverage of new product development into the existing customer base Organic growth of revenue generating assets into prospective customers Growth in Logistics revenues Optimisation of supplier management Conversion onto Microsoft ERP operating system Successful rollout of COJ and Transnet contracts 13
14 QUESTIONS?