SANTOVA

Analyst Presentation 15th May 2014

Santova

Specialist Supply Chain Solutions

Opportunities And Future Strategy

Strategic Initiatives

Performance In The Context of The Logistics Industry

Introduction To Santova Group

Annual Financial Results Analysis 2014

Statement of Purpose

“ Businesses want more authority over operational costs.” The application of an effective supply chain management

strategy that targets silo optimization without sacrificing end-to-end visibility and control.

Innovative global supply chain solutions that result in clients

achieving and sustaining competitive differentiation.

Client – centric, recognise that our clients’ needs are unique.

In tune with constantly changing

trends and dynamics in the market place.

Ensure flexibility, innovation and

delivery on assurances.

GROUP STRUCTURE

Santova Ltd (South Africa)

Santova Logistics (South Africa)

Santova NVOCC

(South Africa)

Santova Financial Services

(South Africa)

Supply Chain Management Advisory

Services (International Division)

Santova Logistics

(Hong Kong)

Santova Patent Logistics

Offices (Mainland China)

Santova Logistics

(United Kingdom)

W.M. Shipping (United Kingdom)

Santova Logistics

(Netherlands)

Santova Express (South Africa)

Schiphol Rotterdam Heathrow Brentwood

In addition to our Own Santova Offices, our International

Network of exclusive partners Spans 5 Continents with over 450 offices

Durban, Johannesburg, Cape Town, Port Elizabeth,

Pietermaritzburg, Sasolburg

Santova Logistics

(Australia)

Felixtowe

Birmingham

Bristol

Specialist Supply Chain Solutions

Customs & Excise Clearing

Freight Forwarding

Quality Control

Warehousing & Distribution

Inventory Management

Supply Chain Management

Services

IT Systems & Integration

Insurance Procurement &

Packaging Financial Services

INTEGRATED STRATEGIC LOGISTICS MANAGEMENT

SOLUTIONS

TRADITIONAL CLEARING & FORWARDING BUSINESS MODEL

Intelligent Solution “Solution Based”

Commodity “Rate Based”

Warehousing & Delivery

Customs & Excise Clearing

Freight Forwarding

High Visibility Staff Dependent

Low Visibility Low Risk Reduced Total

Supply Chain Cost

Co

mp

on

en

ts

Imp

act

High Risk Process and Technology Driven

Management of independent functions

Assembling, integrating and managing activities into key supply chain processes rather than managing individual functions.

INTERNATIONAL SUPPLY CHAIN LOGISTICS BUSINESS

Domestic Multiple Geographies

[Client Logo] Private and Confidential

Supply Chain Management Landscape

Information Flow EDI Transparency Measurement Statistics Reports Real-Time Visibility Process Automation

Performance Management

Raw Materials Supplier Manufacturer Retailer Consumer

Goods Goods Goods Goods

Reverse Logistics

Reverse Logistics

TYP

ICA

L C

HA

LLEN

GES

TY

PIC

AL

OP

PO

RTU

NIT

IES

• Strategic Sourcing • Quality Controls at

Source • Price Tagging at

Source

• Supplier Performance Management

• Integrated Available to Promise (ATP)

• Consolidations

• Production Planning • S&OP • WMS Management • Supply Chain Audit • Cross docking

• Inventory Optimisation • Distribution Network

Optimisation • Optimal Channel Selection • VAS at source

• Demand Planning • Accurate

Forecasting

• Inferior Quality • Stock Availability • Cash Flows • High Logistics Costs

• Short Shipments • Late Deliveries • Poor Communication

• Limited Visibility • Excess Inventory • Insufficient Inventory • Slow Response

• Expensive Distribution • Lack of Agility • High barrier to new

market entry

• Demand Variability • POS Data Accuracy

SCM

TO

OLK

IT • Channel Strategy Development

• Supplier Scorecards/Metrics • Supply Chain Risk Mitigation • Defining & Structuring Managed

Services or KPI’s

• Inventory Management/Optimisation • Distribution Network Planning • Cost to Serve Analysis • Fleet Mix Modelling & Optimisation

• Business Process Definition and Re-engineering

• Demand Driven Planning • Business Case Development • Project Management

Ensuring Supply Chain Strategy is aligned to Business Strategy

HISTORICAL PERFORMANCE

0.00

5.00

10.00

15.00

20.00

25.00

2.90

12.29

15.82

18.00

22.12

Ce

nts

2010 - 2014

Diluted Basic Earnings Per Share

2010 2011 2012 2013 2014

0.00

2.00

4.00

6.00

8.00

10.00

6.02 5.07

7.48

9.68

7.35 7.90

Mu

ltip

le

2009 - 2014

Price Earnings Ratio

2009 2010 2011 2012 2013 2014

0

10,000

20,000

30,000

40,000

50,000

6,853

23,216

30,063

33,809

40,014

Mill

ion

s

2010 - 2014

Profit Before Tax

2010 2011 2012 2013 2014

SANTOVA PERFORMANCE OVER TIME

0.00

5.00

10.00

15.00

20.00

25.00

12.70

22.10

23.80 23.10 24.20

Pe

rce

nta

ge

2010 - 2014

Operating Profit Margin (%)

2010 2011 2012 2013 2014

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

61.90

66.00 73.70

92.12

108.20

145.00

Ce

nts

2009 - 2014

Net Asset Value Per Share

2009 2010 2011 2012 2013 2014Market Capitalisation R 241 698 600 vs.

Underlying value of offshore subsidiaries

United Kingdom Private Company Price Index 3Q 2013

Current pre-tax PE ratio (Enterprise Value/EBITDA) is 12.1 for ‘trade buyers’

of private companies and 9.1 for ‘private equity buyers’.

0

5000

10000

15000

20000

17087

7722

2148 3052 777 M

illio

ns

Global Offices

Profit After Tax Feb 2014

South Africa United Kingdom Hong Kong Europe Australia

5

25% 7% 10% 3%

-100%

-50%

0%

50%

100%

150%

200%

250%

5% 62%

204%

81%

-52% Pe

rce

nta

ge

Global Offices

Year on Year Growth Profit After Tax Feb 2013 vs. Feb 2014

South Africa United Kingdom Hong Kong Europe Australia

Excluding costs of UK acquisition 26%

0

200

400

69

297 358

218

130 Tho

usa

nd

s

Global Offices

Return Per Employee Profit After Tax Per Employee Feb

2014

South Africa United Kingdom Hong Kong Europe Australia

Costs of listing and acquisitions have an effect

CONTRIBUTION BY GEOGRAPHY

South Africa 56% Offshore 44%

Gross Margin (%) (Turnover/Gross Billings) South Africa United Kingdom Netherlands Hong Kong Australia

4,7% 16,1% 14,7% 18,8% 10,6%

South Africa 5% Offshore 56%

385,896

1,220,659

3,179,056

1,085,017 1,405,980

1,707,644

995,067

2,092,847

6,111,746

8,187,509

1,431,180 1,787,390

8,724,659

5,971,047

17,643,718

3,575,608

3,718,864

7,520,780

3,878,947

14,762,601

11,580,675

1,756,393

7,618,841

8,093,052

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Un

its

MAR 2012 - FEB 2014

SHARE TRADE VOLUMES

Trade Volumes

Linear (Trade Volumes)

Management and staff 20,2% Total number of shareholders 1 433 No. of shareholders holding 58% of the Company 23 No. of shareholders holding 82% of the Company 136

Liquidity – until 2013 shares were tightly held Limited publicity – low profile Bottom of the growth curve – “Small cap vulnerability” Limited understanding of the Business Model

0

100

200

30 80 81

106

172

Ce

nts

Financial Year End

Closing Share Price At Year End

2010 2011 2012 2013 2014

Unique characteristics; A non-asset based business ‘favouring’ a variable cost structure;

In a relatively short period of time established strategic offices globally;

Transformed during a ‘flat’ 6 year economic cycle into sophisticated business model whilst at

the same time generating significant year-on-year growth in earnings, internationally.

IT and supply chain capability is enabling Santova to compete on a ‘playing field’ that is typically ‘reserved’ for multi-national ICONS;

The unique business model makes it difficult if not impossible to compare Santova to any other

South African listed logistics business;

SANTOVA and THE INDUSTRY

FINANCIAL RESULTS

ANALYSIS February 2014

FINANCIAL HIGHLIGHTS

22.1% increase in total Billings to R3.221 billion

Operating Margin increased from 23.1% to

24.2%

26.9% increase in Operating Income to

R51.8 million

40.6% increase in HEPS from 17.62 to 24.77

cents per share

34.2% increase in NAV from 108.4 to 145.5

cents per share

Final dividend of 3.25 cents declared – a 30%

increase

INFLUENCING FACTORS

Internal/Technical

• No acquisitions or disposals during the year

• IFRS 10 Deconsolidation of Guardrisk Cell Captive

• Inclusion of WM Shipping for a full 12 months

• Completion of 1st WM Shipping warranty period

• Rejuvenated performances from Hong Kong and Netherlands

• Continued strong contribution from Financial Services

• Consolidation and centralisation of certain divisions

External/Market

• FOREX - the weakening of the rand

• The Economy in SA and the effect on trade volumes – low GDP growth

• Significant competition and pressure on margins particularly in SA

FOREX EFFECT

13

14

15

16

17

18

19

• In SA majority on revenue is invoiced in Rands but underlying calculation is based on the imported cost of goods and transport in US$

• Decline in trade volumes as importers react to weaker rand

IMPACT Opposing Effects on

Revenue

ZAR/GBP

2013 2014 Move %

USD

Closing 8.84 10.79 1.95 22%

Average 8.36 9.97 1.61 19%

GBP 2013 2014

Closing 13.37 17.98 4.61 34%

Average 13.26 15.74 2.48 19%

REVENUE ANALYSIS

86% 14%

65% 35%

TOTAL

Fin Serv HO Logistics HK UK Neth Aus Rand

BILLINGS

2013 8,658 1,680 2,395,175 28,015 98,077 85,634 123,241 2,637,920

2014 8,967 2,635 2,757,269 29,048 203,981 179,668 115,969 3,221,519

4% 57% 15% 4% 108% 110% -6% 22%

SOUTH AFRICA OFFSHORE

2013 100% -2% 5.1% 13.7% 18.0% 15.5% 11.5% 6.7%

2014 100% -1% 4.7% 18.8% 16.1% 14.7% 10.6% 6.7%

- 1.0% -0.4% 5.0% -1.9% -0.8% -1.0% -

REVENUE/BILLINGS MARGIN

REVENUE

2013 8,658 -33 121,260 3,846 17,632 13,283 14,194 176,651

2014 8,967 -24 129,410 5,447 32,802 26,457 12,250 214,357

4% 0% 7% 42% 86% 99% -14% 21%

OPERATING MARGIN ANALYSIS

TOTAL

Fin Serv HO Logistics HK UK Neth Aus Rand

SOUTH AFRICA OFFSHORE

2013 924 1,675 4,773 320 377 685 542 9,296

2014 74 5,211 6,399 702 535 1,756 441 15,118

-92% 211% 34% 119% 42% 156% -19% 63%

2013 6,396 19,670 80,635 3,399 10,951 11,340 11,568 142,067

2014 5,378 28,617 81,336 3,107 22,087 23,354 10,867 174,228

-16% 45% 1% -9% 102% 106% -6% 23%

2013 2,667 -18,511 43,903 882 6,918 2,535 2,904 40,810

2014 3,629 -24,366 52,851 2,541 10,803 4,709 1,619 51,772

36% 32% 20% 188% 56% 86% -44% 27%

2013 31% 36% 23% 39% 19% 20% 23.1%

2014 40% 41% 47% 33% 18% 13% 24.2%

10% 5% 24% -6% -1% -7% 1.1%

OTHER INCOME

ADMIN EXPENSES

OPERATING PROFIT

OPERATING MARGIN

EARNINGS RECONCILIATION

2014 2013 %

Cents Cents

Reported - Basic earnings per share 22.42 18.06 24.1%

Reported - Headline earnings per share 24.76 17.62 40.5%

Approximate - Normalised Headline earnings per share 22.85 17.07 33.9%

2014 2013

Earnings Reconciliation R'000 R'000

Reported – Basic Earnings 30,587 24,688

Impairment of goodwill 3,131 -

Loss on disposals of plant and equipment 85 122

Derecognition of Financial Liability - (713)

Reported - Headline Earnings 33,803 24,097

Fair Value Gain on Remeasurement of Financial Liability (5,171)

Recognition of Financial Liability due to Lease Termination 584

Forex Loss on Revaluation of Financial Liability 1,979 (753)

Approximate - Normalised Headline earnings 31,195 23,344

FINANCIAL POSITION - Key movements

Influencing Factors

• 22.1% Increase in Billings

Results

• 30% or R111.8 mil increase in Trade Receivables from R369 mil to R481 mil

• Funded by: – 11% Increase in Trade Payables

– 51% increase in Short Term Borrowings

• 34% or R4.61 increase in closing ZAR/GBP exchange rate

• R14 mil increase in Intangible assets to R123.9 mil

• R22.5 mil increase in Foreign Currency Translation Reserve

CORRELATION Cash flow inverse relationship

Billing/Debtors/Borrowing/Cash Flow

2014 2013 2012 2011 2010 2009 2008

Cash Flow

Borrowings

Debtors

Billings

CASH FLOW AND FUNDING

Cash on hand increased 31% from R28.1 million to R36.8 million at year end of which 75% is held offshore – trend will continue/offshore operations are cash generators.

Cash utilised in operating activities totalled R27 million versus net cash generated of R29.1 million in the prior year, this is consistent with:

Working capital requirements as a result of 22.1% increase in billings in 2014 versus 1.3% in 2013.

The credit terms provided to clients versus those granted from SARS.

In order to fund this growth the Group increased local facilities from R249 million to R300 million during the current year.

Group has in total R131 million unutilised financing facilities at year end.

CREDIT QUALITY

Credit Collection remains a core competency of the Group

Centrally managed at Head Office and South African Book is 85%-90% insured via credit underwriters

2014 2013 2012 2011 2010 2009 Avg

Trade receivables 434,600 326,314 250,922 196,709 170,937 203,846

Provision for impairments 2,266 993 1,447 2,447 2,858 2,970

0.5% 0.3% 0.6% 1.2% 1.7% 1.5% 1.0%

Amounts Written Off 53 345 372 770 324 530

0.01% 0.11% 0.15% 0.39% 0.19% 0.26% 0.2%

Past Due - More than 30 days 7,997 7,412 8,693 5,622 16,423 12,163

2% 2% 3% 3% 10% 6% 4%

SANTOVA LOGISTICS (SOUTH AFRICA) TRADE AND OTHER RECEIVABLES

FINANCING REVENUE

2014 2014 Interest Effec 2013 2013 Interest Effec

TOTAL Financing Inc/(Exp) % TOTAL Financing Inc/(Exp) %

ASSETS

Trade receivables 480,738 328,191 25,489 8.6% 368,931 262,694 17,159 7.3%

LIABILITIES

ST Borrowings (208,321) (208,321) (12,030) 7.0% (137,829) (136,146) (8,282) 6.6%

NET MARGIN 13,459 1.6% 8,877 0.7%

2014 2014

TOTAL Financing

Revenue 214,357 21,232

Other income 15,118

Depn & Amort (3,476)

Admin Exps (174,228)

Operating profit 51,771 21,232

Interest received 4,559 4,257

Finance costs (16,316) (12,030)

Profit before tax 40,014 13,459

2014 2013 2012

% Financing Financing

36% 15,560 15,121

15,560 15,121

166% 1,599 899

45% (8,282) (8,132)

52% 8,877 7,888

VALUE ADDED

VALUE ADDED STATEMENT 2014 2014

for the year ended 28 February 2014 Billings Basis Revenue Basis

R'000 % R'000 %

Billings to Clients 3,242,212

Revenue from Clients 236,026

Paid to Suppliers and Agents 868,145 49,762

Value Created 2,374,067 186,264

Value Distributed

Employees 110,311 5% 110,311 59%

Government/Regulators 2,197,474 93% 9,671 5%

Financial Institutions 20,723 1% 20,723 11%

IT Service Providers 7,092 0% 7,092 4%

Shareholders 3,411 0% 3,411 2%

Asset replacement 7,681 0% 7,681 4%

Profits retained for future 27,375 1% 27,375 15%

2,374,067 100% 186,264 100%

Strategic Initiatives

Globalisation Santova is capitalising on globalisation, “new ideas, new opportunities, network”, across geographies and cultures.

Client Centricity We have unique customer-value focused relationship management structures in place, managing and controlling the relationships.

Diversification We duplicate revenue streams, across businesses, geographies and currencies, “Critical mass, bulking, improved margins”.

Strategic Growth Strategy Continuously balancing growth through organic growth and acquisitions - America’s, Europe, West and East Africa.

End-To-End Global Supply Chain Management Solutions We have a presence across multiple geographies and cultures, assembling, integrating and managing activities into key supply chain

processes rather than managing individual functions.

Information Technology We have intelligent supply chain software packages and are advancing in mobile technologies – tablets and smartphones.

Multiple Businesses The Group constitutes multiple business units and has numerous new business opportunities, “businesses within business”.

Internal Optimisation Year in and year out we continue to evolve into a leaner cost structure and process optimisation without losing operational efficiency

Talent – Intellectual Capital We invest in and develop the right talent. Multiple disciplines, an innovative aptitude and skills across all components in the supply chain.

Proximity To Source And Market We focus on greater proximity to source, ensuring market intelligence, ‘intimacy’, agility and flexibility - Value added services at source.

MARKET OPPORTUNITIES

FUTURE STRATEGY

The world is moving from regional economies (‘clusters’) to a networked and digital economy (globalised). New global business models Innovative e-commerce Interconnectivity between interdependent markets Complex worldwide networks.

90% of respondents believe that ‘new business models require supply chain innovation’. 91% of respondents to GE’s Global Innovation Barometer 2013 agreed that innovation is a strategic priority for

their companies. “

“51% felt that their supply chain and logistics functions don’t innovate regularly enough, often due to company culture, lack of skills and fear of change.

GE’s Innovation barometer labels this ‘Innovation Vertigo’ or ‘an uneasiness with the pace of change and confusion over the best path forward’.

Barloworld’s Supplychainforesight 2013 Survey GE’ s Global Innovation Barometer 2013

It’s not simply about moving goods from one point to another, its now about a high degree of know-

how and comprehensive logistics resources

Proximity And Specialised Services: international foot print a necessity

Decentralisation is becoming a common strategy for locating resources closer to demand and supply – kitting, global direct-ship, pack for store, built-to-order, merge in transit and cross docking solutions are growing.

Cash Flows: e-commerce driven efficiencies Order-to-delivery and order-to-cash cycles are affecting the client’s cash flows

Supply Chain The Differentiator: demanding sophistication, top management attention

It is no longer companies that are competing with one another, it is the supply chains of which they are part of that are now competing.

End-to-End Control: sophisticated software packages and expertise

Most importers and exporters do not have sufficient control over the entire supply chain from door to door, nor the

in-house expertise to manage the process. The application of the appropriate metrics is a challenge.

Internationalisation: competitive forces encouraging global mobility

Clients moving into new markets for the first time - worldwide sourcing and selling in multiple markets. Requiring operations and logistics solutions across geographies and an understanding of the intricacies of offshore markets.

Competitors: barriers to entry

Domestic based logistics companies face difficulties in adopting Information communication technology systems and applications due to the lack of human and financial resources

Thank You