KARO - Earnings call transcript Q2 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day. Welcome to Karooooo Limited Results Presentation for the Second Quarter of 2022. Hosting you today is Mr. Zak Calisto, CEO and Founder of Karooooo Limited.

Zak Calisto

Thank you very much, operator.

to good for good morning, you yourself. like today's us evening would find and call, good I thank joining everybody on wherever Firstly, afternoon and

Okay.

drive own that of Singapore. XXX% Cartrack In aspects quoted vehicles Singaporean was all Africa. all read We entity, owner South Cartrack. shareholders will in our and is the is the view, in disclaimer through have data mobility be in their the Karooooo leisure. founded and Karooooo of had will can of connected, a we future.

leading to build billions SaaS mission, drive value in-vehicle We Our the points through devices. of data What the connectivity contextualize mobility do?We data platformthat customers. our proprietary collect we maximizes for and data. our of smart

OEM and in-vehicle third-party through smart data collect also devices. We

and also stream collect intelligence,video And systems, APIs have we third-party artificial and we We have from. telematics into that and collecting data. devices through pushing data our

I've video platform, the we platform in-vehicle telematics And data datathrough an traditional our connects and and MiFleet parties data as devices the of portion contextualize administrative necessarily telematics is that that's that devices data stream third analytics. said, data.We through by Our telematics the doing also data not it's connect our management via which use, we our devices. fleet

processed all get value the operation. We And also that that's of our and by monetize use the AI. SaaS driven have platform. our we allow through to And with that, customers data we

you our vehicles, It that contextualize know, customers in operational working deliveries, field able reports gone the their get the to they the analytics, the to quarter. they are which,as they in out workflows and we their the in the our allows operations, know their the their As predictive fourth deliveries, thereof,we to And do haveCarzuka field, people field service, delivering, drivers. create their able are improvements, manage live to also business manage intelligence drivers. customers allows

to in what needs. point customers. problems insurance, at best a we We our insurance mobility is We and We can unproductive our resources. customers operating create workflows, customers. use do high our assist with are We for and operations the phase customers time. value build the with with value Fundamentally, fragmented inefficient assist customers we eco-compliance. our we of And our costs, add safety day-to-day their in logistics the We assist this better with for solve with for operations. customers our and

selling, delivery is bigger them also, of We assist especially e-commerce assist today's as field the businesses, I've with air competitive Whatever said we and most they're before, is workers, we plumbers, Carzuka they we secured where on with world conditioning. operations. their have buying part getting can a customers single our And platform. price customers' in of whether do We maintenance they’re or insurance quotes. that managing which our do also doing, the -- we do one and

and in South There's slide over market to million about total in we we we value future, operate aware underpenetrated started a the XX million of the this South customers well be and We have much the vehicles. different This effect we platform you It's journey. close our already to in. to needed of operate million are subscribers. segments market what We in create the Africa. X.X in our related shows has And services. for perceive In that we size, network XX of market. envisage the Africa, this near large vehicles have

currently XXX Southeast XXX,XXX vehicles. Asia, in there's million point about time, X% our We've at got the on vehicles of So Africa. we've They're using got all road vehicles. South over over this in platform.In

we region into are also and able the performance believe of we at to the start as of quarter, want market.Europe, in believe We'll of focus very X that invest and about years, the plans. million So soon, go But We over will large primary this yearand end financial got that not we hope at very We've little The year. point market. on total South our during well of got also to XX,XXX the August. Africa, to we market very been half the similar. market. performance Europe through XXX,XXX outside we numbers time. and our a really this in have These beginning in our vehicles. haven't And that XXX is grow the last our be got we’ve next is region execute vehicles.Africa, vehicles, in we of

in good, revenue current strong opinion, healthy the the in customer very headwinds exist that acquisition and that with had given a growth, subscription So market. our we

Our subscriber coming grown of XX% has by Cartrack And subscription growth the XX%. is business from revenue.

subscription XX%. compared XX%. a financial subscription substantially of growth growing. revenue Our -- year. actuals, history basis year total revenue our And strong the the We've has on financial currency revenue rand and revenue grew XX%, consistently XX%.On is last And primarily grew strengthened constant constant this as to currency total in basis by grew a by a in this on got

single see you continuously years quarter thereof. we've since these subscribers we’ve-- inceptionand can over grown As on we graphs, scaled our many every

our the will That's to ZARXXX this We will dropped. believe our growth in ZARXXX in as this millionbut look COVID, we so countries to was on COVID, currency year much to how was Our revenue COVID growth. and our quarter the was soon previous gone financial It's know last consistent growth invest and with that have the affecting quarter. ZARXX why rand by we quarter, a focused up million see, you deal subscription actually that's subscription growth. revenue, strong And for operating profit actually in it's can you so at us. or million. obviously already uncertainty,we But actual a In not invest business. -- started where, profitability, our with year, stronger financial can be for with this see When whereas constant year. year for protecting compared did last was we

currency both the by certainly all we're for increase So investment headwinds, and the on growth. the increased despite long-term again

net did we we XXX,XXX, year And where done this in more XX,XXX. the which have XX,XXX. of half about XXXX, last for we Our substantially we did region year, quarter, impacted, COVID. were pre-COVID. Talking negatively more sometimes half in growth growth,net year And compare with. we more year-to-date, which to was additions, subscriber than impacted were XXX,XXX,XXX,XXX did under year, easier And subscriber XX,XXX, in July. it's our we than than live full XX% to We during QX, still did COVID, about negatively also we X% can last subscriber

and costs. segment, in South sales vehicles which our quarter, acquisition we is biggest in what there terms unrest our quarter, meant was did of see Our last this lower which this customers of customer Also, caused of treated Africa, in lot noise a also bit in repeated a little July.

Our low last of cost you ZARXXX. look ARPU, subscriber, if acquiring at a our was year it

go our XX%; with very certainly our driven Now influenced do our and it's business And the are we lot ZARXXX. currency. in Europe year, half unit of year, we to position by revenue we to currency with a profit we largely same the subscriber continue has in the able grew puts this if thing the do to our us a this fluctuation. believe line XX%; Asia, half to subscription by growing And will this to that's XX%; in In this rand, business good, report and competitive in economics last by got can economics fluctuation South grown margin, business. and us to predominantly see fluctuations.Nevertheless, the allow X%. growth outside base be by and take in good got have Africa, the South currency That's Africa ARPU, a gross grow Africa-other, we

XX won't we to be can of out But our drive now. might close believe an operating do can to people that sufficient level headcount economies the compare A investing We increased the substantially are deliver up G&A, next increase, can up compared near the that we've lower predominantly headcount. we our metrics. will much and XX%. it people very is months. we increase quarter as went back set And quarter increase. R&D reached we on XX%. in see, a that if we sales gone still become our sales. see, We of productive, productive but We've which some not as got lot marketing And by There the means term. which to will subscriber headcount bit has robust believe year, one for what this of That's the We've for -- to we've of now of by the last by to scale. or future. that got base you this is than increased XX%, R&D over We've they sufficient

So against X% which of and dropped year. over revenue this time. our And if And development, was last XX%. of with of it's last it's outlook the year. research that in subscription to EBITDA And of We XX. the we Carzuka against XX%. year.Sales adjusted line from in market -- intend very margin G&A, marketing, rule XX% for terms is terms and XX% drop to even is our the XX% the further to quarter, exclude we much beat continue in what our X% business, promised we

At year, the we half had Our of half end year, cash had year flow. bank. ZARXXX At million we of ZARXXX the the last this in end million. year

of while me million the financial we've allocation Sorry, the also proceeds as region quite bank, this dividend well our in IPO. was period, of were ZARXXX paid about operating believe, just discipline. JSE the we ZARXXX and moment. on the and -- Cartrack. overall, as million capital a the we our profit give listed in one I It's in cash still given And increased But

activities. operating Our

because drop and this to predominantly activities, business, the we That's million the ZARXXX we a of million. salespeople, it to ZARXXX planned lot operating movement in our investment ZARXXX of capital of in ZARXXX working hencethe Our as scaling saw is from million. salaries million the for

which of into million got into with the foresee large we our to to ZARXXX that from into investment ZARXXX And increased has gone at PPE the it's half million.Our do ZARXXX which that same increased that's believe Our healthy has is for compared There's we for to the driven infrastructure free million the a year, year investment million. portion ZARXXX cash the growth that future. free cash sales with down very XX% time, flow. last that's flow, obviously

give for promised Our sometimes meet outlook, outlook is we think what to this that us with specifically And I that it's to forecast.And important we will an because shareholders. we given COVID unchanged. difficult quite confident remains remain very

point X.X million the this exceed believe at subscribers time of number in subscribers. we'll X,XXX,XXX. We Our is

our And adjusted ZARX.X subscription excluding the Our We outlook in believe ZARX.XXX and was XX% is revenue for Carzuka million the half for get EBITDA, at year, was year. billion. that our million. the over year at with we'll half already line ZARX.X

August the between Our with ARR the in and do between dollar. that's at exchange dollars, rand African got XX, and rand obviously the differs as U.S. rate the the currency, XXXX, change South

South to I have X.X up. African I from…. and read And up U.S. year. is ZARX.XXX up dollars, billion, to to take compared which it's million, XX% like over is and questions that which in last rand would USDXXX now open was -- XX% to just

Operator

Instructions]. [Operator

Zak Calisto

Hi, question. your Matt, I'm take to happy

Matthew Pfau

Hey, Zak, can me? hear you

Zak Calisto

Yes, can, I Matt.

Matthew Pfau

the at primarily and are Is Or nice COVID as results, South impacts to the Europe for region see to and wanted in that it this from continuing guys. dig Africa Okay. you're questions isolated Asia business. you seeing well? into to the your Great.Thanks time? I on taking impact

Zak Calisto

the And senior stage.We, in at week, have up least that the think impacts us itself. to manage ability Clearly, permits is Philippines, this is into all now, one, take in Indonesia struggled I impacted. as South as But impacted and Asia us the is good news from, the and really marketplace Thailand. impacted our staff our in it from we And actual into of received most clearly some business; two, Asia. our impacting COVID Africa So Europe to not this Asia. is is our to segments. the

came same accelerating the XX% Asia, at week, can us start quite despite they short So in the growing encouraging. And through which all all believe that term is we term, growth. that near or in in we

to Matt. the quite to learn I'm up. not we're answering live to if COVID. months, markets that excited about with will X within And believe the the So hopefully, X question, starting I'm your sure countries we markets open

Matthew Pfau

well. impact, You did. grew unrest that terms Africa that of of That's impact that helpful. the you still really And region can then Because July, the South in social in magnitude? just with in maybe help of even sort frame

Zak Calisto

did biggest second counts. Africa it can us, And month. We day. it clearly, Gauteng how closed it many all in And sales a the what We in -- do biggest even you don't basically measure and for our it in business, It's our down buck in So some in sales July. South KwaZulu-Nataland is operations our July a in Mpumalanga. in province really some in every in was operations province for KwaZulu-Natal. is we Gauteng,the closed impacted

I financial it also our ruin. substantially. that sales But left impacted that already looted and then think negatively all of them struggling impacted with customers that and was COVID in total us were were that

So said, in we you we XX%, financial Africa grew July. intact. still But how got despite metrics South basically we like rightly see did our in that's remained impacted at and that,

Matthew Pfau

That's more great. And just me. one for

in-vehicle how ability and chain able demand? get to you supply to enough are In product you source devices, Are that? terms components for to your the meet of about feeling your

Zak Calisto

there's that for in at next months. able point this comfortable to will going that we they supply. suppliers, to we're components. feel delays And in XX in be clearly, our believe the have not We, time, So problems believe

working be inventories the from higher able The bit purchasing what normally we than that at we you, because Mike -- So the moment more growth. flow and are our our a is requiring free is we're of cash is operational and to to is the affecting doing be, cash operations obviously question what Canaccord. from Thank next we the from generate we're necessary carry that would Matt. for capital

Mike Walkley

can me? you Zak, hear Great.

Zak Calisto

Mike. can, I Yes,

Mike Walkley

Ay, Yes. regions. the all strong targeted in on first results half your the despite Congrats great. challenges

sales it the force year? more First you, efficient? the just getting growththat’s the we expect sales a question the in more half Or current to of hiring,should continue to for on ramp sales about and steady of marketing is more second

Zak Calisto

on headcount. we need certainly In the we're start Africa, for focus will hiring hiring, to to going staff. We the to months We've getting South sales enough next headcount in X efficient. little in So more dovery got X now. Asia,

need So sales we is force that in Asia, to believe I really but ramp our efficient, relatively up.

And the our financial So Europe beginning lot of Europe. to of in efforts to year getting we in where we increase. in a up no intend next South start Africa, focus sales the then and ramp

senior through So only to on the placed. said the overall, to go a the very going now just in right. are we time, Asia, to bit into start hiring that managers hiring -- this of we've consolidation Africa, to hiring got -- month in The and these is in -- little the at it's point get strong on and started at getting aligned having South that, going we've going efficiencies actually a But we're go senior we're this end November, already getting -- managers start we’re before -- moving people, of countries. we'll manager hiring

Mike Walkley

And then just my follow-up question.

guidance. Just full to year the rerate you great see

and the needs grow how to of be terms in And after unrest, the Africa, of daily South on more year the the to efficient continuing end in basis? there by things that embedded region? sales a are anything efficient sales

Zak Calisto

lot in our to So September. to month on month-to-date month, Africa our actually was to on But We and from need just we a our to grow focus improve efficiency we the and plans. that a September. last that have we'll execute We order South of best record strength believe strategy, had sustain. in in as said, now on we history

Mike Walkley

of great Thanks Africa for South taking to my great questions a had and hear September. month

Zak Calisto

The is from from James. you. Thank Alex Raymond question next

Alexander Sklar

product. Slide unlock addressable you data? some how X those launched you're in opportunity from data. rank stack big biggest significant the Hi, buckets just alluded of do know to of the Zak.The terms you've Carzuka.You've got monetization I on hoping the in insurance terms that prepared to curious of I'm market remarks opportunity on

Zak Calisto

maybe Just can please. get Slide me you moment, X? One

X, Slide is This Okay. okay.

So ready is in to in We lot Carzuka be we've early platform platform. QX. a I ready our The think platform invested not technology the envisage yet.

very can can in did do than pace. started that the see in of month a have we better October, that's However, pace in encouraging. and QX better in we more revenue already We we

can The we're that grow way we it believe we So redoing basically business. works. exponentially insurance, the

think take a insurance did around of I in bit misunderstanding the a we the of was there we in delivered legislation what [OAP]. and

able doing optimal that on a are fit be we're of We But over X,XXX our to more to a executing adjusting nevertheless, month. way plan. policies

that slowly So it we just the businesses is building and which these us in well fit really a do. right having right right now, question business of and place, with believe people what we got have I this

We’re do that that these done us of things confident to in take a feeling aware aren't I'm But out verticals will being we're very time. also overnight. of business. It our bit these well going

Alexander Sklar

then experience. from there's in kind member Great. a of kind to want I in a better Europe, with that actually reporting more to and that's with ESG directive ESG,and coming standpoint? of just place being a track customer your Okay. a data, I'm coming lead added conversations from can And particularly of somewhere ask curious, their at into terms Board standpoint, needing where acquisition all about you customers new sales in up is you from

Zak Calisto

So that requirements. Europe. with compliance. department Independent required. a with compliant and the Director,Siew we've we're what lot ESG getting of is And with very Also, able Koon work our We deliver got familiar we've in GDPR to feel Lead comfortable all done is old those

Alexander Sklar

you. Thank great. Okay,

Zak Calisto

Thank you.

from [indiscernible] the next question So [Brian] from

Unidentified Analyst

customers I or the types, medium break that like quarter enterprises. large noticed by presentation small, in added didn't you sort of this down so

mostly? came the where net curious Just adds quarter this in from

Zak Calisto

much the in past. mix It a was pretty

say our from overall about would and commercial business came consumer. XX% came of I it’s from about So XX% that

Unidentified Analyst

the next year-on-year. will at like maybe a coming it quarter it looking be looks comparable just Got Okay. because tougher it.And up,

that's do tracking good year? had October. in the And think a How of do greatest think this will drivers you far? growth second you so in what of subscriber said be you the half month You

Zak Calisto

invested think said I efficient. outlook, just can We've past given getting previous that. do good into month, And to outlook. we an was before we've got all the done. every deliver we that the month, about already that second saying, But I'm very people to the hoping a It's will believe got the like reasons believe we've we've sales. not just do at that our I we've talk on on half to lot can what said, -- execute. But best month. September improve we're And we is got the I prefer and and to having it we've that, we and

Unidentified Analyst

Okay.

Okay. Last sorry. question,

If the could little acquisition bit a talk it Picup, name, was the that. made, maybe and rationale and think the was about you I behind that think all spent I amount it the

Zak Calisto

we of large what e-commerce. our of their on corporates. so what monitor enterprise that do a in a can we huge deliveries is assign medium we've customers, deliveries a and they do pickup can small, they of different means delivery see now So is our drivers and parcels. a and give they and lot tasks have to lot their delivery is And got what platform And can proof --

are However, delivery able own third-party they're what on trucks customers' they and carrier integrating as companies Picup warehouses use into to well, then go the companies vehicles, do. what drivers does outsourced all that also And companies do or They're big but systems. is step and and the use their payment depending use further. to a want the they able to to

at part believe service, doesn't elasticity a rely a we where a necessarily that's have logistics if we important to platform, And to our have XX where work. the old can one, very the customer we on way get especially years’time other the and vehicles. in mobility own and believe bringing on fleet important very will with his it's it's look So

doing with time. So about for things bought years' We've the today it's that X we we acquisition. onmonth-on-month. grow comfortable us seen feel revenue And since to really XX them very monthly

have got we that legs growth. for So they and has continuously believe business grown,

Unidentified Analyst

Right this that There's modules now, my is your keep Cartrack like you no understanding maybe that can additional are differentialor in customers? Okay. you is like [XXb]. I separate? imagine existing charge -- a of one. financials the the is Or all And kind module price for

Zak Calisto

is, in the in it onewith we difficult numbers. keep The it Also, be understand separately. a split this of small of reason to why at will believe So It's got report gets of Cartrack. point by then once coming in year this at bit point we everything this Cartrack the otherwise, time, will financials to out we and Carzuka, business we've time. will on, momentum, Clearly, with certainly of a this spaghetti intend next Picup financial bit the platform. the a also of and which Carzuka numbers our we will be, different

decision which that. the how different and with quite We we two route. Cartrack’s we And Picup in it markets, are incorporate we're going best There's term, how we going the yet. are haven't into make to platform. something crystallized the talking, have teams thinking route. routes exactly we're deal strategically It's near might is see different different to in and R&D will that a And

Unidentified Analyst

it. for so Got questions. taking Thanks my much

Zak Calisto

[Sam is from the bound XX% keep result, associated that's FY in of increase a investment question and if rests below 'XX? Will for the to lower quite adjusted growth growth for expenses in contracts to QX and Well, same year? a expense the with this question. of the increase at financial be An guidance strengthening pleased XX% success you margin net EBITDA strategy. effectiveness subscriber the year-end QX rate on looking the Are There of you long growth, the Healy].

growth expenses? is, we adjusted in first XX% thing will will EBITDA certainly the because pleased budgeted our There for.Will that we with And be be that's the margin So we what XX%. that and same be have between in building operational we time. growth for at I On be be on. Asia will in Asia. also into expansion earlier will some our sales, point in up more expenses, capabilities And be it said will this believe

EBITDA we on. in increase given that guidance in investment, will that continued we certainly still the will margin So believe a that there continued we've be be but

impact the about have has the telematics devices? Next on little you We have it. growth. expect shortage terms of the on to From going a impact forward? going question.Next I've affecting an Do to bit that's growth believe is an our this in competitive spoken planned growth [Zelman].How subscriber question.Hello,Zak.How chip don't OEMs XX environment sales has to competitive XX months environment. over to there across competitive evolved XX, under service? becoming various the competitors been and the XX the So serious the COVID. much more hasn't believe a in been the change the of past Are environment regions? last months in I the

In terms of OEMs, see as can OEMs. the And We're in the that from actually not deals OEMs. months. the OEMs, the I data competitors. from data XX We've do signed collect specifically them we to collect able with last

OEMs. haven't have was months XX the is got really actually We’re more I quite We're me. [Howard], with the tell safety. the can a year different investment always aspects about didn't intend much that question Asia the growth space is question where XX comes in A of our level driver to can do or from to today of throughout diagnostics results. what building get you these Congrats outside of salespeople get the into necessarily the efficiencies infrastructure. growth.The our many Singapore,do what other same. right front We have ground with mostly the in able devices putting on for and numbers the on but same, we that salespeople play strengthened to very in to maintenance of It in Question But in in very OEMs in or vehicle ago? go OEMs invest is,how want we infrastructure for numbers a telematic and do. in complexity, nowand you a that don't headcount. I months you. I customers for terms [Howard]. ago,

any it's to think sold do cover And to of own restructuring. I think, And shares need own to the down over do want the question and So Zak, we've to management the -- liability own jointly next Everol]. our it's to of my Thailand, Juan marginally portion myself JSE. we shares. we business, in my which sell bring a XX% liquid sold have Any of to in there's in float, and during [Effective the countries believe increased, answered investing a I There's liquid and given it’s think in the starting additional for increase taking pay time, And for ahead a us but now I've been to question. you're from Thank XX%. question certainly ask if plans [David share. color [Brendan]-- shares to more restructure. XXX,XXX we any not see go shares, on from we we Philippines want We from great tax Zak haven't increase have Indonesia. I certainly to investment the into that better sales Capital]. both hello, and do Juan we the plans his intend myself to that Asia. specifically increase in? to you tax some shares that free to business. question. of still XX% The I Juanjointly

got indicatorof in with agree the I’ve Yes, we revenue a lagging and decline obviously keeping our promised market. adjusted is So to that, is incremental I this, is that sorry an to in what obvious revenue the the margins, with in Hence, investment. EBITDA. -- read

So to in keeping it market. is something that surprise not coming the plan. to us is strategic or our plan, any with as It's

Zak Calisto

questions. I bye. the you thank tuning talking forward very to all time. much. look to that's Bye, for everybody And I X you Thank in months' in, and

Operator

participating. our you conclude today. for Thank for does this gentlemen, and conference Ladies

You may all disconnect.

Karooooo (KARO) 15 Oct 212022 Q2 Earnings call transcript