2022 priorities

Continue to grow by:

• Investing in technology to drive digitisation and support customer service and experience.
• Optimising the dealership footprint, aligned to OEM strategies, and refine the multi-franchise dealership model.
• Growing our pre-owned vehicle market share.
• Improving brand representation with selective bolt-on acquisitions.
• Be the leading car rental service provider in the Southern African market by providing outstanding customer service, value for money and an innovative product offering.
• Ensuring market leadership, focusing on revenue recovery, new products and technology-driven innovation and improvements.
• Investing in initiatives (waste and water recycling) to reduce our carbon footprint, continuing commitment socio-economic development and deepening the maturity of our governance processes across our footprint.
• Ongoing investment in the development of our people.

Our channels to market

We are well-positioned to engage with our customers across the physical and digital sales channels of their preference and continue to aspire to position ourselves at the forefront of each accordingly.

2022 performance

We have made good progress in responding to the disruption of the traditional dealership model, with ongoing investment in innovation and technology to improve our digital capabilities and grow market share.

Global supply chain disruptions and the Russia-Ukraine conflict has contributed to constrained vehicle availability. In South Africa, increased power outages, civil unrest and rising fuel prices and interest rates will hamper economic growth over the short term.

The pace of digital adoption and innovation continues to accelerate across the automotive industry, with the vehicle purchasing process evolving into a multi-entry format in which customers’ unique engagement demands must be met. This omni-channel approach has shifted demand for some services to digital channels, reshaping how vehicles are marketed, distributed and sold. Our investment in improving digital channels will enable us to meet customers wherever they are on the purchasing journey, in the way they choose to engage.

The de-fleeting of rental vehicles to the Auto Pedigree network of 67 dealerships ensures that we have a reliable source of pre-owned vehicles, in the right condition and at the right price. The slow recovery of the car rental industry, whose de-fleets provide significant volumes of pre-owned vehicles to dealerships, and ongoing supply chain challenges have resulted in a general shortage of vehicles, including pre-owned, which we are sourcing from a variety of suppliers, where these vehicles meet our standards.

We have expanded the Auto Pedigree Service Centres from five pilot service centres to a network of 10 and intend to grow our footprint by another third during 2023. We aim to offer all vehicle owners access to affordable, high-quality vehicle service and maintenance. We will focus on optimising processes and systems in the short term and further expansion for the medium term.

The car rental industry has been the most heavily impacted by the COVID crisis. Recovery has been slow to return to pre-COVID levels, but momentum is expected to improve in the near term. As vaccination rollouts have accelerated globally and travel restrictions have been lifted, both leisure and business international travel has increased. We have embarked on a number of initiatives to ensure that renting a vehicle with Motus is more convenient and faster to do in each of our customer touchpoints. We are streamlining processes, reducing operational requirements and leveraging automation, data accuracy and customer self-serve capabilities. This will allow us to offer a differentiated service in a highly competitive market.

The geographical spread and good service offering of our UK operations, together with improvements in customer experience has supported good margin growth, despite the availability of new vehicles being impacted by global supply chain disruptions. Our UK Commercial business is the largest DAF vehicle distributor and a key OEM partner in the UK, which has allowed us to leverage our fleet offering, and grow and maintain customer loyalty.

In Australia, we represent 20 of the 59 OEMs, where these OEMs represent 63% of total new vehicle sales in the market. This, together with our existing dealership footprint and the strategies implemented at the start of the COVID-19 crisis, will support our growth with regional expansion and bolt-on acquisitions that strengthen our market position and representation of brands that are operating in Australia.

We invest in reducing our negative impact on the environment where possible and have installed solar PV systems and waste and water recycling systems at key dealerships and car rental branches. Our new multi-franchise dealership in Menlyn uses liquid energy display (LED) technology, with the payback period estimated between three and three and a half years. Light sensors in the showrooms dim the lighting depending on the amount of daylight available, avoiding unnecessary electricity usage. Occupancy sensors shut down air-conditioning units in empty showrooms and other facilities. The grid-tied solar PV system is approximately 150 kilovolt-amperes, which can be extended in the future. The PV system is also tied into the generator, saving fuel when the generator is in use. Energy eff icient water heat pumps and air-conditioning systems have also been installed.

We will continue to monitor global NEV trends and OEM developments so that when policy changes are implemented in the countries where we operate, we will have the infrastructure for NEVs in our dealerships. In the UK, where NEV adoption is already supported, we have installed charging points at a number of our sites and NEVs comprise around 9% of our vehicle sales. Our retail brand representation in the UK enables us to learn from the NEV developments in this market, placing Motus at an advantage to capture the NEV market in South Africa and Australia when demand increases.

Read more about the Group’s environmental and social priorities.

Integration and optimisation

We assess our dealership footprint regularly to respond to developments in our operating environment and to reduce operating costs. The multi-franchise dealership model has been successfully implemented, with 45 multi-franchised operations in South Africa, including our flagship multi-franchise dealership in Menlyn, Pretoria. We are continuing to refine the model and implement standardised processes where appropriate.

We will continue to expand our dealership footprint in the UK and Australia through carefully selected bolt-on acquisitions that introduce additional brands in areas close to existing dealerships.

The key objectives of our digitisation strategy are categorised into three priorities:

• Enhance customer experience: our ability to offer an omni-channel engagement method to customers.
• Create uniformity and efficiency: consolidate functionality and capability to enhance customer experience.
• Reduce third-party dependency: improve time to market for enhancements while reducing costs.

We have developed an orchestration layer that provides the foundation for integration into a range of systems. This allows us to align across systems and processes, while ensuring connectivity that enhances customer experience and convenience.

	HY1 2022  unaudited^		% change on  HY1 2021  unaudited^		HY2 2022  pro forma*		% change on  HY2 2021  pro forma*		2022 audited		2021 audited		% change on 2021 audited
Revenue (Rm)	36 269		1		37 940		8		74 209		70 962		5
Operating profit (Rm)#	892		20		1 314		29		2 206		1 761		25
Operating margin (%)#	2,5				3,5				3,0		2,5

^	HY1 numbers are unaudited and were released in the interim published results for the six months ended 31 December 2021.
*	HY2 numbers are unaudited and derived from deducting the HY1 results from the annual published results for the year ended 30 June 2022.
#	2021 has been adjusted for the re-presentation to include share of results in associates and joint ventures.

Revenue is up 5% with increased revenue contributions from Retail South Africa, Import dealers and the Car Rental business, offset by reduced revenue contributions from pre-owned vehicle sales and the international operations.

The Retail and Rental segment sold 88 929 new units (2021: 82 919 new units) and 88 942 pre-owned units (2021: 104 459 pre-owned units) during the year. In South Africa, the segment sold 58 003 new units and 67 884 pre-owned units (2021: 49 290 new units and 77 659 pre-owned units), this was 18% up on the prior year for new vehicles when the market was up by 10%. Internationally, we sold 30 926 new units and 21 058 pre-owned units (2021: 33 629 new units and 26 800 pre-owned units), down 8% on the prior year for new vehicles.

Operating profit increased by 25% with increased operating profit contribution from all businesses.