Karooooo Ltd.

Welcome and thank you for joining Kourou's Q4 and full year's FY23 results webinar. I'm Carmen, the Group Chief Strategy and Marketing Officer, and together with Hu Xin, our Group Chief Financial Officer, we'll be taking you through our performance, growth, and future plans. Our team, led by our CEO and founder, Zach, is committed to delivering on our strategic goals and creating long-term value for all of our stakeholders. All shareholders and investors are advised to read this disclaimer. We will be reviewing all three of Carew's business units in today's webinar, namely CarTrack, Carzuca and Carew Logistics. Karoo is not just embracing the future of operations, we are helping define it. We understand that mobility is core to all operations and see the large value in not just connected vehicles and equipment, but in connected teams and data-driven decision-making. By leading the way with innovative solutions and bold new practices, we are on a mission to be the leading operations cloud. We envision a world where operational frictions are eliminated and businesses can operate in a seamless, efficient and safe way that enables them to achieve more with less. But achieving this is becoming significantly more difficult for operators. They're running 24-hour operations. Their customers' expectations are increasingly leading to more complicated jobs that span multiple teams and departments. Their employee expectations are also increasing. Everything needs to be in real time. New regulations keep popping up. Costs are skyrocketing. There's new technology emerging daily. Teams are using more tools than they can remember. There's an overwhelming amount of data available, little of which is leading to actionable, real, tangible insights. Things have become complex and they are unmanageable without a simple, but not simplistic, solution like ours. Throughout our 17 years in the industry, we have a strong track record of identifying trends early and understanding how we can build a solution that will benefit customers. We solve a large amount of independent as well as interconnected challenges for customers, from fleet and equipment management and maintenance to delivery operations and field worker management, from risk management and compliance to resource scheduling and vehicle procurement. By digitally transforming operations and offering tools that help guide our customers in navigating their challenges, we add strong value to their daily operations. Karoo plays in massive, interconnected, and largely untapped global markets. According to analyst estimates, operations account for over 40% of global GDP. We have a huge runway ahead of us. Businesses are becoming more aware that IoT data is critical to improving their operations, and operations are increasingly more cross-functional, meaning the interdependencies between the problems we solve are expanding, along with the opportunity ahead of us. We are only at the start of a large, long-term growth opportunity. Globally, Carew saw a 19% increase in the number of commercial customers using its cloud platform. As of Q4 FY23, we helped over 105,000 small to large businesses across diverse industries optimize their operations, and we continue to see no customer or industry concentration risk. Customers have adopted our solution in varying ways, but all rely on our platform for their operations. The vast diversity in geographies, customers, and applications of our platform speak to our strong ability to create a sticky solution and localize to market needs in a scalable manner. Our strong track record of profitably growing at scale is best explained through an understanding of our fundamental business culture and principles that Zach took to market in 2004. Firstly, we are fully vertically integrated. From sales to technical installations, R&D to customer care, we do it all ourselves. This has given us in-depth, tangible knowledge of the day-to-day operational challenges our customers face. This means that we have been building operational software that links different business units and solves complex problems since we were founded. We also know that not all data is useful and it's the ability to link data from different sources and managing to communicate that in a simple to understand and execute way that makes a difference. Most importantly, we ensure our technology is setting a business's Most importantly, we ensure our technology is setting a business up for success today, tomorrow, and all days ahead. Our technology does not just focus on detecting problems and remedying the damages. It also focuses on tackling the root cause of challenges to prevent them from occurring in the first place. Secondly, we built scalable solutions. We went to market with a solution that solved 80% of all customers' problems and did not focus on developing a niche product for a specific industry or customer. This has helped us because building for scale rather than customizing forced us to learn how to distribute successfully at scale across different regions and through different macroeconomic environments. We've also learned that customers need to have everything in one place and understand that alone we are unlikely to provide all the data needed to fully contextualize a business. So, we've ensured our platform has open APIs and have built an ecosystem that truly addresses the needs of a business. This increases our platform stickiness and future-proofs our solution as customers' needs evolve. And finally, we focus on delivering a world-class customer experience. When we launched our fleet management solution, we went straight to cloud and we were the first to market allowing customers the convenience of choosing a location and time for their IoT installations. This customer centricity has helped build strong foundations for our business. Today, we consistently invest in and improve on our proprietary internal systems and tools that empower us to exceed our customers' expectations. We see many companies beginning to struggle once they reach a certain scale as they cannot efficiently manage so many moving parts. Our proprietary internal systems allow us to remain extremely streamlined in servicing our customers as we grow at scale, ensuring we maintain our strong customer centricity and efficiencies. Constant innovation is our status quo. We always ask, is there a better way to do this? We do not believe that because it was the right way to do things two years ago, it is still the right way of doing things today. And finally, we work with our customers to guarantee our solution fits into their business and is easy to implement across all stakeholders. This ensures strong uptake and long-term stickiness as customers very quickly feel the strong ROI of our solution. Fundamentally, our foundations have allowed us to successfully differentiate ourselves for strong execution and we consistently build for the future. We are forward-looking and are building a sustainable business that will benefit stakeholders for the generations to come. In summary, we win for the following reasons. We have unique go-to-market strategies. We challenge the status quo and focus on solving problems. We place full focus on providing a great customer experience. Customers know they can rely on our solution as the backbone of their operations. Our culture is entrepreneurial. Our teams take ownership, are innovative, and remain agile to adapt to different market conditions. We have a user-friendly end-to-end operations cloud. It's easy for customers to derive huge value from our platform. We have strong distribution channels. We can reach small to large customers across varying industries and geographies, regardless of where they are in their digitalization journey. We have proprietary internal management systems. Our teams and business units speak to each other to ensure we can continue to successfully scale at large. Our business is also vertically integrated. All components of our operation are aligned towards the same goal. Fundamentally, we deliver a high ROI for customers and customers rely on our platform to run their month to month, day to day, hour to hour operations. For many, the uptime of our platform is more important than the uptime of any other software their business is using. Whilst there is a lot of noise in the world, there are three key trends that have gained strong sustained momentum and are driving huge need and adoption for our platform. Firstly, digitalization. Companies of all sizes and across all industries are looking for ways in which they can reinvent their business with technology. They understand that to remain competitive, they need full visibility of their operations. They know that they need to leverage data and contextualize insights to meet the speed of quick decision-making required in today's world. Then ESG. Companies and consumers are looking to do better. And companies are looking to go far beyond just reducing their carbon emissions. They're looking at increasing vehicle lifespans, switching to electric vehicles, increasing their community impact with better service delivery. Customers are asking us to show them how to use our solution to bridge the historical divide between drivers, teams and managers to boost morale and safety within their business. And lastly, compliance. Businesses and regulators are looking for increased transparency and compliance is spreading across all operations teams and industries. Governments are implementing and enforcing more laws around work times and other safety or well-being metrics and penalties for non-compliance to legislation are increasing. We have seen these shifts intensify over the years globally and now we see that companies are embracing change and determined to be great at them. Asia is full of rapidly growing emerging markets, making the opportunity for Karoo huge. Each market remains largely underpenetrated and fragmented, with no single large nor comprehensive provider. Populations in these markets are digitally savvy, and technology is widespread even in small, remote towns. Whilst the opportunity is large, it is important to note that Asia is full of strong cultures that vary dramatically between markets. It's a place where it is critical to have hands on the ground to understand all local nuances and localize effectively. We believe by positioning our global headquarters in Singapore, we are positioned well for success. Companies are also looking for partners they can rely on for their business, and they are learning quickly to think about return rather than just focusing on cost. We see many large and small businesses come to us for our reliable, easy-to-use platform as well as our strong customer centricity and support. Our advanced cloud platform and robust service delivery sets us up well to compete favorably in Asia. Whilst there is a portion of the market that is only beginning their digitalization journey, there is also a large portion of the market paving the way with sophisticated needs. Companies understand the value our platform provides and rely on our analytics to deliver on their missions. These companies are doing much more than just looking at GPS. Companies care about their service delivery. A tourism company uses our solution to ensure their passengers are transported safely, on time and also receive the full trip they were sold. Sophisticated reporting alerts managers when drivers deviate from their prescribed routes, leave tourism sites too quickly or make any unexpected stops. With our platform, they have brought down their speeding events significantly and ensured all trips run according to schedule. They understand that our solution is a core product to their reputation, risk management, and brand. Businesses are also forward-thinking. A short-term rentals company has fully adopted EV and uses our solution to optimize their charging schedules, our advanced engine diagnostics and other telemetry data to establish effective maintenance schedules that neither overshoot or undershoot services, leading to a huge reduction in overall maintenance costs whilst extending vehicle lifespans. With vehicle productivity metrics, they know where to house each vehicle and are better able to predict demand for their business planning and vehicle purchasing. They were able to effectively launch a vehicle delivery solution with our infield service tools, giving them a game-changing differentiator, and they have redefined what customers expect from rental companies. Businesses are also data-driven. A FMCG business doing over 10,000 daily deliveries understands the value of data and contextualizing it across different business units. Using our platform, all teams now have full and unified visibility of the entire business process. Real-time analytics and communication has enabled them to slash the number of steps in their delivery process, saving them thousands of hours across their fleet daily. With sophisticated APIs into their ERP and other tools, they have connected their entire operation. The queuing downtime of a vehicle as a result of inefficient warehousing strategies has been minimized. Driver wages are now accurately calculated. Safety has skyrocketed through gamified safe driving plans. Idling and unproductive fuel usage has been conquered. The business has seen dramatic savings from the increased productivity across their fleet and warehouses, as well as peace of mind knowing their drivers are representing the company in a strong professional light. Karoo has a large untapped network effect opportunity generated from its platform, with over 125 billion valuable data points generated monthly. In South Africa alone, we have around 10% of all vehicles on the road, giving us a huge runway for adding increased benefits for our customers. Customers are benefiting as we are personalizing their experiences and providing them with tools to improve decision making and increase their efficiencies. For example, a company can now benchmark their operations against others in their industries. Predictive analytics of historical data are not only leading to improved customer loyalty, but allow us to develop new products and services to expand on our platform. To summarize, we believe our strong management, entrepreneurial culture and vertically integrated business model have led to our proven track record of growth and profitability in varying macroeconomic headwinds across regions. We innovate through an entrepreneurial approach that prioritizes customer needs, utilizing our hands-on experience and skills, and being adaptable in both planning and execution. We offer a strong value proposition that is easy to prove to customers. Our customer churn remains low as customers see we are consistently delivering on new value-enhancing solutions whilst maintaining a stable ARPU. They trust us. We are able to pass on the benefits of economies of scale to our customers as we successfully execute whilst maintaining prudent capital allocation. Carew has a strong financial foundation. The ability to control prices and maintain high operating profit margins, solid unit economics, and a history of sustained growth at scale has resulted in a robust balance sheet and resilient business model. We have ample runway for growth. I will now pass over to Hu Xin, who will take us through our financial performance. Thank you.

We will now talk through Carew's financial performance for Q4 FY23. Please note that all comparisons are against Q4 FY22, unless otherwise stated. The performance of Q4 has been strong and our cash generation continues to bolster from our profitable SaaS business model. As expected, after substantial investment for future growth in all segments, operating profits and earnings per share for the quarter rose by 60% and 51% respectively. Year-to-date operating profit increased by 26% to R882 million and earnings per share increased by 27% to R19.29. This is the result of our prudent and strategic investment growth strategy. Free cash flow up by 54% in this quarter and 44% on a year-to-date basis. This result was achieved despite the group's strategic investment in expansion, brand building, and customer acquisition for long-term growth. Considering the strong earnings and free cash flow, clean and unleveraged balance sheet, we are pleased to declare a record dividend of US$0.85 per share. The dividend will be paid to the shareholders in July 2023. We are confident that this will not impact our growth. We view our business and report our performance into three segments, namely CarTrack, Kazooka and Karoo Logistics. our total revenue increased by 24% to R916 million at the end of Q4 and R3,507 million on a year-to-date basis. CarTrack grew its revenue by 16% to R796 million at the end of Q4 and 17% to R3,076 million on a year-to-date basis. Operating profit for the year increased by 28%, to RM915 million and operating profit margin stood at 30%. CarTrack's year-to-date EBITDA margin at 47% is in line with Karu's planned investment for future growth and management guidance range for 2023. Kazuka's steady expansion continues to justify our belief in the sustainability of its agile, data-enhanced and highly scalable business model. It is also a testament of Carew's customer-centric innovation in solving unique mobility needs. Kazuka delivers RM64 million in revenue at the end of Q4 and RM251 million year-to-date. While it is at an operating loss, as we continue to invest in the infrastructure and brand building, we will also focus in refining our internal processes to improvise the efficacy and being pragmatic in our spending. Once the revenue is more than RM300 million per quarter, we believe the business will turn profitable. Karoo Logistics delivers significant growth generating RM56 million in revenue at the end of Q4 and RM180 million on a year-to-date basis. Karoo Logistics shows an encouraging operating profit of RM5 million and an operating profit margin of 3% for the year. Its focus on delivery as a service has gained momentum while it continues to integrate into CarTrack platform to expand its customer base. All segments are seeing strong traction, with the benefit of our strategic investment beginning to show. Our profitable SaaS business model continues to bolster our cash flow generation ability, with net cash on hand up by 35% at the end of the year at R966 million. During the year, R72 million are invested in the development of South African Central Office and R50 million are invested in the working capital of Kazuka. In Q3, cash dividend of $18.6 million was paid to the shareholders. Depters turnover days continue to show improvement to 31 days alongside with prudent provisioning to weather off strong economic headwinds in some of the markets we are operating. We have strong unit economics, robust operating margins, a strong balance sheet and cash position, and have consistently beaten the rule of 40. We remain confident that our track record of success, especially our ability to generate healthy cash flow, is sustainable. Our earnings per share increased by 51% to RM4.70 in Q4 and 26% to RM19.29 on a year-to-date basis. The increase is the result of positive revenue growth and improved profitability during the year, despite the impact from the dividend withholding tax of RM27 million. We will now focus on CarTrack, the underlying assets to Karoo's success. CarTrack continues to prove its ability to scale in varying macroeconomic conditions. Overall, subscribers grew at scale by 13%. to RM1,717,077. And in this quarter, subscription revenue grew to RM793 million and operating profit rose to RM248 million. Our track records of strong annual compounding growth and financial discipline can be seen in our performance. On a year-to-date basis, CarTrack's subscription revenue grew 17% to RM3,004 million and our operating profit grew 28% to a record R915 million. Our operating profit and operating profit margin were negatively impacted this financial year as we expensed upfront a bigger portion of our cost of acquiring a subscriber in our cloud than in previous year. With mentioning, our SaaS ARR for the year grew by 19%. As CarTrack continued with strong SaaS revenue growth, CarTrack's total revenue grew 17% to RM3,077 million. CarTrack's total subscription revenue represents 98% of total revenue, in line with our SaaS business model. The strong performance of CarTrack was largely supported by demand of small to large enterprises to improve compliance functions and to digitally transform their business to become more efficient and competitive. As CarTrack continues to have great visibility of future revenue, our realization of economies of scale continue to demonstrate our ability to expand our margin. Gross profit for Q4, up by 27% to R568 million, and gross profit margin improved from 65.4% to 71.4% compared to Q4 last year. On a year-to-date basis, Gross profit up by 22% to R2222 million and gross profit margin improved from 68.4% to 71.6% compared to last year. Operating profit for Q4 up by 61% to R248 million and operating profit margin improved from 22.5% to 31.1% compared to the same quarter last year. On a year-to-date basis, operating profit up by 28% to R915 million and operating profit margin improved from 27.1% to 29.7% compared to last year. Adjusted EBITDA up by 23% to R371 million and adjusted EBITDA margin improved from 44.2% to 46.6% compared to Q4 last year. On a year-to-date basis, Adjusted EBITDA up by 19% to RM1,456 million and adjusted EBITDA margin improved from 46.6% to 47.3%. Car track low cost of acquiring a customer, high customer lifetime value and retention rate, as well as strong benefits from economy of scale, results in our leading unit economics. Our LTV to CAC is over 9. We have strong profit margins, with our gross profit margin on subscription revenue is 73%, and our operating profit margin is 30%. While we will remain prudent with our capital allocation, we are well-precision to continue to scale our business. Over the years, CarTrack has maintained a steady ARPU and average cost of acquiring a subscriber. ARPU for the year was RM155. CarTrack's average lifetime revenue per subscriber increased to 9,323 rand this year. The average cost of adding a subscriber to our cloud in this year was 2,264 rand, and in Q4, it was 2,148 rand. Taking 9,323 rand and subtract the 2,264 rand give us a headroom of 7,059 rand per subscriber. From the RM7059, we incurred the cost to service a subscriber over 60 months, which allowed us to derive a very strong operating profit margin. The headroom has remained steady. CarTrack continued to expand in all geography. In South Africa, despite challenging trading conditions due to national power outage, subscriber grew by 11% as we seen strong customer demand for our value proposition. In Asia, the Middle East and USA, subscriber grew by 28% as the pace of car tracks expansion into Southeast Asia moved ahead of historical growth rates. Considering that Southeast Asian economies only began to open up towards the end of Q1, we are pleased with the traction gained in this region. As the second largest contributor to the group revenue, Southeast Asia presents the group's most compelling growth opportunity in medium to long term, Europe saw a healthy growth of 13% and remain a region we aim to allocate more resources in order to drive more rapid growth. Africa others maintain its momentum with 8% increase in subscribers. On a year-to-date basis, our ARR increased 19% to 3,235 million RAM, which is at a good trending as we continue to grow our subscriber base and ARR. Car tracks continue to have robust operating margins, and our trends are in line with the long-term financial goals set up upon our listing in 2021. Research and development as a percentage of subscription revenue are 6%, in line with our long-term target of 4-6%. We will be increasing capital allocation into sales and marketing to drive growth, whereby we expect sales and marketing as a percentage of subscription revenue to increase from the current 13%, to be within our long-term target of 17% to 19%. We also expect general and admin as a percentage of subscription revenue to drop from 22%, as we experience increased economy of scale, whereby it will fall in line with targets of 12% to 16%. Our adjusted EBITDA as a percentage of subscription revenue at 48% will continue to improve to be in line with our targets of 50% to 55%, as we remain pragmatic in our operating expense. We have met our 2023 outlook with number of subscribers stood at 1.7 million, CarTrack subscription revenue recorded at RM3,004 million and adjusted EBITDA margin of 47%. We are happy with the progress we have made for the year. Our guidance for CarTracks Outlook for year 2024 are number of subscriber between 1.9 to 2.1 million. The wide range is because of the volatility and macroeconomic environment. As you may be aware, we publish our subscriber numbers on our website and as at the end of April, we have reported the subscriber to be over 1.75 million. Subscription revenue outlook for 2024 is between 3,400 to 3,600 million rand and operating profit margin between 28% to 31%. Kazuka and Karoo Logistics continue to scale and bolster Karoo's revenue growth. Both segments show good progress with strong year-to-date revenue growth of 273% and 154% respectively. In combination with its intuitive e-commerce platform, Kazuka has made significant progress expanded its physical showroom, adding steadily strategic hubs across South Africa and building its brand. Karoo Logistics will continue to integrate into CarTrack's platform, enabling CarTrack customers to manage and enhance their logistic capacity with ease. I would like to thank everybody for joining us today, and will now open the floor to Q&A with our group CEO and founder, Mr. Zach Calisto.

Good evening or good morning wherever you are. It's Zach speaking over here. I'm just going to read out the questions. So the first question I've got is from Kerem from William Blair. Can you discuss the importance of the OEM partnerships with BMW and Mercedes and are there more in the pipeline? I've seen on many occasions before that eventually the OEMs, they will have their own telematic solutions and they'll have their own platforms. Their own platforms will be very much about the diagnostics of the vehicle and the safety of the vehicle. And our platform is really about helping customers with the operations and with things outside the diagnostics. But clearly, we also do the diagnostics. And this is just an example where we now get the data from the OEM devices and that data then goes into our platform. Are there any other in the pipeline? We are talking to all the other European motor manufacturers. We are in final testing with some, and I believe by the end of Q2, we are probably adding about another five OEM brands onto the portfolio. We do see the go-to-market strategy with this only really adding value to us by FY 2025, as we're currently doing the integrations into BMW and Mercedes, but then we've also got to get the distribution right. And this obviously is a long-term project and a long-term partnership. Another question from Kim at William Blair. What are your expectations for Asia region in FY24? It's clearly, you know, we've got two months into the region. Clearly, Asia in March and April has outperformed any of the other regions in terms of percentage growth. And we clearly are employing people and building our distribution capacity. And that is our focus at this point in time is just building that capacity to distribute. And like everything, it's not always easy to build that capacity. It takes a lot of effort, a lot of energy, a lot of trial and error. And we're very busy with that. And we're quite content with the traction we've seen. Next question from Miles Farie. What is Carew's current staff complement and what percentage do you expect to increase in FY24? As at the end of February 23, our staff was just over 4000 staff and we probably intend finishing off the year with about 4800 staff members. The next question also from Mars Free. Are you having any difficulties in filling staff vacancies in Southeast Asia and Europe? You know, the reality is filling staff vacancies is never easy. If you do find somebody that finds it easy, please, you know what I mean, let them come and teach us what the recipe is. But it's always difficult, especially if you want to do it in the way we've traditionally grown our business, which is very much financial discipline, making sure that the staff are trained, that you build up the staff. And it's never easy. But that's what we've been doing for many years now. The next question from Park Lane. Zach, how are you thinking about the seasonality of net subscriber additions throughout the coming year when you consider the trends that you've seen start in first quarter of FY24? So if we look at the first two months of Q1, it's very much in keeping with our expectations. We've added about over 40,000 net subscribers in two months. So I think we're having a relatively good quarter Q1. And typically over a decade plus of history, what we normally find is Q1 is traditionally a difficult quarter and Q4 is a difficult quarter. And that's predominantly because of all the public holidays that you get at the end of the year and that you get in April. you know you either have the Christian holidays or the Jewish holidays or the Muslim holidays but there's a tremendous amount of holidays and festivities in Q1 so it's normally a weaker quarter and hopefully we'll have a better Q2 and a Q3 quarter. Next question from Histro Georgia Can you give us more details of the partnership with NEM and WMC this year? What value proposition does CarTrack do for both OEMs, given that they've got their proprietary telematics service? I think that question's been partially answered on Kiram's question. Our value proposition is really that we, for instance, have got in Europe, there's compliance now where every single vehicle, sedan vehicle, that is owned by a company, they're going to have to have a tachograph built into it. The purpose of that is that the governments do not want to see any company vehicle being driven by more than four hours by one person. And that was supposed to come into play in Q4 of last year. It's now been postponed to Q2 of this year. We're the only company in Europe that's actually been approved, and that's why they've postponed it, because they want to get more of our competitors to have their technology approved. And clearly, there will be plenty of sedans which will require this technology because a lot of these sedans do belong to companies. And even above that, there's other services that we can supply that the OEMs are not geared to supply certain services. Next question from Rudy Faneke. What threats, challenges, and opportunities does the shift to electric vehicles pose for CarTrack? and we're very fortunate really that we are at the moment you know that we are in singapore so singapore is probably in the top five leading countries with electric vehicles and we're very close to the infrastructure of electric vehicles and we are developing technology to deal with this This will give us the advantage that once it takes bigger momentum in Europe and specifically in South Africa, you know, we'll have the technology that today we really give into the Singaporean customers, we'll be able to, you know, to scale that technology into other regions. next question from alex can you talk about our subscriber growth attended in march april relative to q4 how did it look on a geographic basis so i think alex for the question has partially been answered on a geographic basis clearly asia continues to be our strongest region in growth but what's encouraging is we saw a strong recovery in south africa predominantly as we have geared ourselves to operate in a more difficult environment and predominantly that's been caused by the power outages, the traffic lights that don't function, the delays and so it's encouraging what we're seeing in Q1. The next question from Matthew at Confluence Impact Fund, please can you comment on ARPU for car track by region? We've got a very steady ARPU if you take Europe, South Africa, the rest of Africa, very steady. Asia's ARPU is significantly higher than in any other region. But the reason for that is that we've got a huge base of customers in Singapore, where doing business in Singapore is also much more expensive than in other regions. So as indonesia philippines thailand malaysia gets bigger those are foods will trend to be very similar to south africa and the other the other regions we operate in the next question from alex how are you thinking about sales and marketing hiring fy24 within the context of your outlook uh clearly this is a focus area you know it's the hiring It's the training. It's the retention. It's, you know, it's what we've been doing. And it hasn't been easy. I think what we saw in FY23, it was post-COVID, you know, it was like the world had been reshuffled in terms of talent, whether it's R&D talent, whether it's sales staff, whether it's administrative staff. So that's all starting to settle quite nicely. And hopefully we'll be able to find our feet and be able to expedite the hiring and the training and get stronger year by year. The next question is from Kutsia. In relation to the unit occurrence where lifetime revenue less cost of acquisition of a supply allows you roughly 7,000 excess of acquisition. What is the current lifetime cost to service the customer as this created between administration quotient and sales and marketing to resell rolling over customers? Lifetime cost. So I'm not going to read your question twice or three times. I'm just going to speak because sometimes you've got to read these questions a few times to fully understand what you're asking. Fundamentally, you know, if we look at the unit economics of a subscriber, what we've got the ARPU, we've got the average life cycle expectancy, which is 60 months. You multiply those two and you get the revenue that you envisage or estimate to get from one vehicle on your platform. From there, you deduct your cost of getting that vehicle onto the cloud, and that gives you the 7,000 grand. Then we've got what we call the average cost to service a customer, which is in the region of about 60 Rand, which gives you, you know, 60 Rand times 60 is another 3,600 Rand. And that gives you an estimated numbers to give you in that will lead you then to your operating profit. Obviously, with that, there's also the technical operating profit is the amount of money that you are investing in the expansion of your distribution. But fundamentally, that is the unit economics. And that's one of the tools that we use in measuring the unit economics per subscriber, per vehicle on the platform. The next question from Abdul Akin. You have gone at it once that you achieve steering because you could quarterly revenue will be able to achieve break even. When do you expect to achieve this? Could you provide us a timeline? Abdul, the reality is that we've developed new technology, but we are still facing quite a lot of teething problems, operational problems, and just the normal problems that most business have as startups. So while I would like to feel that we will get to that 300 million relatively quickly in the biggest scheme of things over the next four to six or seven quarters, it could be earlier. It's very difficult for me to give you a timeline at this stage. Kazuka revenue dropped, dipped 11% in Q4. What were the reasons behind this? The reasons behind those is the long holidays, the increase in interest rates, so affordability did drop. But I think fundamentally our real issue there was us just slowing down the amount of staff, fixing our mistakes, and to get ready to rebuilding Q1 that we're currently doing. So it's a little bit of growing, fixing, growing, fixing. It's just a part and parcel of the way we've organically always built our businesses. The next question from Mohamed. What is the real impact from power outages to the business? I think fundamentally, you know, we're not an island, so we rely heavily on the telecom infrastructure. And as all South Africans know, telecoms, the quality of telecoms has dipped because of the outages. Traffic lights becoming also a very big part and a problem, not only for us, but for our customers. We've got just in South Africa, we've got approximately 2000 people on the roads between salespeople and technical people. And all of that really impacts our operations. Then obviously we've got the, you know, the diesel that we produce. use on a monthly basis because we're not getting electricity from Eskom. In our new building that is going to be totally environmentally friendly. We're going to be running on solar and on gas and our waters are also going to be from Boals. So hopefully we're going to be more self-sufficient in the next building. Next question from Sebastian. um as the business pivots to ex south african markets will you try to maintain the rp in u.s dollar terms or will you be targeting bizarre 150 price points I don't think we necessarily intentionally target any price point. The way we really price ourselves is really about unit economics. So the 150 Rand that we talk about in 2023 is a very different 150 Rand that we spoke about in 2005. And so fundamentally, it's all really is how do we get... and get our business to have great operating profit margins without being too greedy. And I think our current operating profit margin range is very healthy. And if we can get those at continuously at 150 range, then so be it. So we run our business model really about operating profit given our unit economics and given our LTV to CAC. Those are two of our fundamental principles tools that we need to use to measure our business. Next question from Rudy Panika. Regarding Karzuka, in Q4 revenue was lower than prior quarters. Was it deliberate? I think that's been answered, Rudy. So I think Rudy's question has been answered. I'll move over to David Eberhardt. Could you give us a sense of the Q4 2023 balance sheet investment in Karzuka, inventory PV obligations? What do you expect us to go and get the scale? So, you know, Karzuka, we put in during the whole financial year, we put in 50 million rand. And it's predominantly working capital, which obviously includes inventory. We believe that once we get scale and even if we have invested a billion rand into it, we've got two things we can easily get financed, banks to finance us, which all banks are willing to do, but we've decided to use our own cash. And we believe that given the ability for us to trade the vehicles at the speed we can trade them at and the gross profit margins, we'll have a great return on investment for the shareholders. The lease obligations, we obviously will do that in a very prudent manner. And as we scale, we'll analyze each lease obligations. But I think fundamentally, we'll be mindful of our investment and we'll be mindful of our investment and the return on the investment for our shareholders. The next question from Gregory, is growth through acquisition to build a network and network effect possible and something you would entertain? You know, clearly we would entertain anything that makes sense. So if there was something that we could purchase or acquire, you know, to build onto our business or bolt onto our business, we would do it. But we're also very conscious that our strength is to grow through organic growth. And we are also very cautious to, you know, a lot of opportunities do land out on our table, which we turn down because the effort to get the culture right in that target company could actually derail us and make us lose focus for many months or even years to get the integration right. So we have turned down quite a few opportunities. The next question is from Dan Billis. How impactful were power outages in Q1, please? Will you focus on dividends rather than another acquisition? So I think partly the question Dan's been answered. Will we focus rather on dividends or acquisition? I think fundamentally at this point in time, if it was actually up to me, we'd actually the best way to deliver value to our shareholders is actually to do share buybacks. But given our low liquidity, it doesn't make sense. So, and given our balance sheet, and given that we are still able to grow, we're generating a substantial amount of free cash flow on a monthly basis, we thought it was just prudent to return to shareholders, you know, 85 cents, US cents per share. The next question from Khan Ho. Do you see the impacts of challenging macronutrient conditions on your additions of subscribers? The number of new additions in South Africa in February quarter 23 is only 25,000. Is it sustainable additions going forward? And will the additions in South Asia start to ramp up? So, as I've mentioned before, we've had a very big two months. In the first two months, you know, we've gone over additional 40,000 just in the first two months. We've seen good growth also in South Africa, in Southeast Asia, in Europe. And clearly all these macroeconomic conditions do affect us. And a lot of the time it's really just about us adapting to the new challenges. And while we are agile and we're quite fast, sometimes it does take a bit longer than what we expected. So I see as we've given guidance for FY24, I feel very comfortable that even with these current macroeconomic conditions, that we should be able to meet the guidance that we've given. Next question from Chris. With South Africa continuing at 76% of car tests and subscriber base, how are you managing the load-shifting challenges? I think I've addressed that. Next question, Miles Burry. What volume of subscribers are required to reduce GNA to 12% to 16% Well, I think, Myles, to answer that is we could drop our G&A relatively quickly. The reality is we continue to build on our back office to be able to deal with future growth. So it's not going to happen just yet. But as we get more and more market penetration, then I believe it will be very quickly that will drop from current levels down to 12, 16%. And that can easily happen over a period of four to five years. And it happens relatively quickly. But at this stage, we are more focused on building the backbone, the support infrastructure for growth. Then I've got a question from Cornelius. Your returns on capital have been declining over the past five years. COVID played a part. What's management long-term return on capital? Well, it depends how you measure this, Cornelius. So we could take all the cash that we've got on our balance sheet and pay it all out as a dividend. And then all of a sudden, our return on equity will be extremely high. So it really is, we could easily pay a much higher dividend and get a better return. I think the ROE that we've got currently is extremely healthy and we're very conscious of it. In terms of having no cash on our balance sheet, which is traditionally what we did have when we were only under JSC, we used to give out all the cash, then our returns would be very much in line with those days. Next question from Prashant. How do you view our ecosystem shifting with a huge investment line to go into AI in the next years? Will the ecosystems become more favourable or less for us? And clearly, so at the moment, AI is a big buzzword and AI will continue to grow in leaps and bounds. We have got quite a lot of machine learning in our algorithms that we do with our data. We have got AI as well. Clearly, the AI we're seeing at the moment is really good and it's very impressive. And obviously, over time, a lot of this AI will filter into companies like ourselves, and we certainly have got a roadmap for it. but we're also not rushing into it because we want to understand it a bit better so that our investment in ai is done correctly so i think we will we will speed up or invest further into ai we just need the dust to settle and i think in the next 12 to 24 months we'll be evaluating how we will use some of the AI that's in the market in our own business intelligence reports. So we are discussing it and I don't believe it will be a difficult thing to incorporate onto our platform. The next question from Kano, can you discuss more about the economics of logistics business pickup? What's the market size? Who are the competitors? And what's the long-term goal profitability margin? So at this point in time, we saw profitability margin of about 3%. We believe that can come up to 5%, 6%. But I think the real play is actually to get the logistics stack onto our platform where our customers can do all their long distance and their last miles through using one single platform. And that's what we're working on. And that is what I believe is really scalable and really profitable because that takes us into a SaaS environment as opposed to a delivery as a service environment. So at the later stage, our customers won't necessarily use pickup. They can use Any of these crowdsource delivery platforms, we're not very specific that they use pickup. We're more about looking after our customers so that they can leverage on all these other technologies to help them grow their businesses. The next question from David Everall. What are you going to do with cash? Isn't the time to do buybacks? I think I've answered that. You know, buybacks aren't really for us at this point in time, given our low, you know, we haven't got a high liquidity. So it doesn't make sense. Next question coming from Patrick O'Reilly. What is your opinion on South Africa as a viable investment destination, given the many adverse challenges the country is facing? So Patrick, my view, I was, you know, I'm South African. I was brought up in South Africa. Since a child, I've always seen headwinds. I've always seen South Africa in turmoil. I mean, nothing we see today is that different to when I was a child, 14 years old. I think the problems are different, but they're still problems. You know, we dealt with other headwinds. These are other headwinds, but I think we've got a resilient economy. I would strongly recommend that anybody that understands South Africa and wants to invest in South Africa, it's a good destination to invest. Clearly, South Africa has got a lot of nuances and it's best suited for people like me. like ourselves, South Africans, to deal with these headwinds. But certainly strong governance, corporate governance, a strong economy, despite all these other challenges. Next question from Sandile. Can you maintain the current payout ratio into 2024? Well, if we, Sandeeli, our pre-cash flow conversion to earnings per share conversion is extremely high. The factor of that is predominantly how fast we grow. The guidance we've given for FY24 was based that we are expecting macroeconomic headwinds. And given that, it's still very much a guidance that will still grow at double digit numbers, which is very healthy. And I certainly believe that our payout ratio could be maintained at 2024. But clearly, I don't make a decision. That is a board decision whether we pay dividends or not. But in my mind, we certainly believe we'll have the cash to do it. The next question from Sandeeli, at which point can we expect investment in growth to cease? Sandeeli, given our large opportunity and given all, you know, it's really sometimes I get up in the morning and I feel that, you know, we really are just a startup. There's so much opportunity. There's so much to do. I really cannot answer that question at this point in time. I think that was the final question. I want to thank everybody for joining us. There's a question that just came through Kotsu. How did you manage to keep CapEx relatively low while growing at this rate? Kotsu, we've got quite a strong history of looking at our capital allocation in a very disciplined way. And I think it's sometimes, you know, we are so disciplined that we could be growing much faster had we not been so disciplined and had we thrown more money at sales and marketing and just grown a bit more wildly. So it really is our discipline. It's our organic way of growing that's allowed us, you know, the capex to be quite low. Having said that, What we also saw in FY23 is that, which obviously affected our operating profit negatively, was that in the bundled sales, a bigger portion than we had seen in prior years was actually expensed up front and less was capitalized. In other words, the shareholders will get the benefit over the next four years and they took a bigger punch in operating expenses this year. Despite that, we still got 30% operating profit and we still did in car track 950 million rand in operating profit. I think that's the last question. I want to thank the audience for listening in and please feel free to contact Investor Relations should you have further questions. Thank you.