IMPERIAL HOLDINGS

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IMPERIAL HOLDINGS

• 
  
  CAR RENTAL TOURISM
  DIVISION

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Car Rental And Tourism Division

• Welcome
• Introduce Team
• Overview Osman Arbee
• Imperial / Europcar Dawn Jones
• Tempest / Sixt Leslie Matthews
• Auto Pedigree Kobus Davidtz
• Tourism Springbok Atlas Paddy Vella

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Products and Services Offered

• Car rental
• 4x4 and motor homes rentals
• Used car sales
• Tourism
• - Coach operations
• - Scheduled tours
• - Incentive groups
• Panel shops 90 internal work
• Chauffeur Drive customers include
• - SAA Voyager
• - BHP Billiton
• - Anglo American
• Executive Carport Managing valet parking (OR
  Tambo Airport)

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Challenges facing the Car Rental Industry

• Over traded market (12 concessionaires by July
  2008)
• Pricing pressure Industry realised 7 increase
  
• Car rental cost inflation
• - New car prices
• - Flat used car prices
• - Exchange rates
• - Interest rates
• - Fuel costs
• - Increase in airport operating costs
• - High CPI driving up labour costs
• - Accident costs and vehicle thefts

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Industry Market Share
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Operational Statistics

• Average fleet 15 400
• - High 17 600
• - Low 13 400
• Average fleet value R1.3 billion
• Van Truck Fleet Average 1 046
• Average utilisation cars 70
• Motor vehicle price increases 7 (8.6 including
  mix)
• Cars sold to Auto Pedigree 86
• Leases and buybacks 14
• Used cars sold (Auto Pedigree) 4 649 ( 6
  months)
• Number of coaches and vehicles 150

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Company Overview
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Experience in Car Rental
Imperial Car Rental - 29 years Est.1979
Europcar - 11 years Est.1997 (SA)

• Total business experience gt 2100 years
• Senior management gt 60 years
• Management gt 840 years

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Organisational Infrastructure

• More than 130 locations
• Represented in SA, Botswana, Namibia, Swaziland,
  Lesotho, Zambia, Mozambique, Zimbabwe
• Vehicles are kept for 12 months/ 40 000kms
• Trading at all major airports
• Ranked 1 or 2 at each airport
• More than 1 000 permanent and 400 outsourced
  staff
• IT systems (Impress) integrated but needs
  enhancements to improve flexibility.

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Merger
Pre June 2007
Current Brand
Mid 2009
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Why the Merger

• Optimisation of fleet
• Branch integration
• Improved productivity
• Global brand for domestic customers
• Increased product offering
• Economies of scale enable IT operational
  investments
• Access to global best practices
• Increased inbound volume
• Seasonal synergies

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Why Europcar?

• No. 1 brand in Europe
• 1.5 billion Euros in revenue
• 42 million rental days
• 220 000 vehicles
• Extensive global reach
• Vanguard alliance (National /Alamo Enterprise)

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Particulars of the Deal

• Long term franchise agreement with Europcar
  International
• Negotiated favourable franchise fees
• Inbound supplier agreement with National/Alamo
• Access to global corporate customer base
• Access to global partnerships (e.g. BA,
  Lufthansa, Easyjet.com, American Airlines)
• Rights to expansion in Africa
• Expansion opportunities in van rental
• Access to Europcar knowhow, standards and
  experience

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Post Merger Where to?

• Exploit inbound and outbound customer base
• Grow replacement and internet business
• To be best-in-class by
• - Investing in and implementing new IT systems
• - Re-engineer processes and procedures i.e.
  internal and customer facing
• - Attract, train and retain the best people
• Increase selling prices and manage costs

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Customer Base
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New Opportunities

• National / Alamo inbound business
• Exploit E-commerce and internet opportunities
• Replacement market
• Inbound business travellers via Europcar global
  corporate relationships
• Grow outbound business
• FIFA World Cup 2010
• Growth in tourism emerging markets
• Revenue management dynamic pricing
• Van rental opportunity
• Expansion in Africa

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Tempest Car Hire
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Our Business

• Reputable brand
• Tempest manage the SIXT brand
• Strong Network 37 branches
• Strong internet channel
• Not reliant on preferred agreement for
  volumes
• Alliance with low cost airlines
• Substantial database 250 000 names
• Good BEE credentials
• Lower depreciation costs
• Ideally placed to launch a new product

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Our Opportunities

• Dominate as low cost car rental company
• Differentiate between the 2 brands in our
  division
• Own the credit card market in S.A. and
  reduce credit customers
• Capture emerging market
• Cut costs in business
• Growth in domestic leisure travel
• Maximize internet channel
• Immediate benefit from rate increases
  coupled with lower holding costs
• Reduce Broker business and save commissions

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Marketing
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The Business in 12 Months Time

• 70 of business on credit cards or lodge
  cards
• Internet based reservation channels
• Telesales environment as opposed to standard
  sales practices
• Basic service delivery only not full
  service offering
• 6 motor vehicle groups (from 14)
• Entry level vehicles and people carriers only
• 9 20 month old vehicles (de-fleets from
  Group)
• Initially set fleet at 3 000 vehicles

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Profit Drivers in the Business

• Economic growth
• Rental days
• Revenue per day
• Volumes of rental agreements
• Utilisation of fleet
• Yield management

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Car Rental Business Where are we !

• PAST
• Multi brands
• All brands competing in all markets
• Duplicating staff, location, fleet and marketing
  costs
• No operational and IT synergies
• Overlap in business

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Car Rental Business Where are we going!
FUTURE
IMPERIAL/EUROPCAR TEMPEST
Product Premium brand Full service Low cost Limited service
Pricing Full price Service leader Discounted price Cost leader
Fleet Full range - new cars Limited range older cars
Growth in business Corporates In Bound Out Bound Internet Replacement business New low cost airline market Credit card and internet business Film business Leisure market
Improve efficiencies by investing in IT and
re-engineering processes
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Profitability enhanced by

• Definitive pricing strategy
• Yield management to optimise utilisation
• Focus on efficiencies
• Continuous cost saving drives
• Risk management internal controls
• Improved supplier management
• Aggressive growth in volume
• Investment in technology

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• Company Overview

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Overview

• Over 25 years in the business
• Extensive knowledge and experience in the
  motor industry
• Over 65 branches
• Largest second hand car dealer network in the
  country
• gt212 Sales people
• Total retail sales
• - 75 rental vehicles
• - 25 trade-ins and buy-outs.
• Total sales (80 retail and 20 wholesale)
• Trusted and reliable
• Offer value for money and low mileage vehicles

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Value Added Services

• You Ring - We Bring
• - doorstep" test drive and inspection
• - Online finance application
• Value added products
• - Easy finance
• - Top Up insurance cover
• - Road side/medical assistance plan
• - Paint protection
• - Credit Life
• - Mechanical motor plan

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Overview

• Purchase vehicle of choice
• - telephonically
• - SMS to Auto Pedigree direct
• - website
• - up-to-date inventory management

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Online Finance Application

• Tailor made packages
• - MFC
• - All major banks

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Our Strengths

• Countrywide coverage gt 65 branches
• Virtual network
• - Furniture retail stores eg Ellerines
• 1-stop shop value added services
• - Advertising
• - In house retail store magazines
• Extensive TV coverage
• Low-cost ofering
• Brand strength

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Unit Sales and Prospects

• 2008 2007 2006
• 6 mts 12 mts 12 mts
• Retail Units 4 649 7 223 7 935
• Wholesale Units 853 2 340 1
  994
• Total Units 5 502 9 563 9 929
• Revenue (R000) 547 383 803 050
  817 248
• Average selling price (R) 99 488
  83 975 82 309
• LOOKING AHEAD
• New car price increases will assist used car
  market
• Volumes should grow by 5 to 8
• Back-end income sustainable into foreseeable
  future
• Cheap imports and an oversupply of used vehicles
  in the markets will cause pricing pressures
• Expense inflation higher than sales inflation
  putting pressure on margins
• Virtual branches country wide

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• Company Overview

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Overview

• Coach and Tour operator established in 1946
• 6 Locations in South Africa and Namibia
• Representation in 5 overseas countries
• Services throughout Southern and Eastern Africa
• 150 vehicles
• 250 employees

• Alliance partners
• Botswana
• Zambia
• Zimbabwe
• Mozambique
• Tanzania
• Kenya

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Our Business

• Touring services
• Schedule tours (guaranteed departure tours)
• Tailor made tours (Group, FITs, Special interest
  travel)
• Special events, incentives, conferences
• Transport services
• - Coach charter
• - Special contract transport
• - Airport shuttle services
• - Game viewing
• Clients from across the world
• Specialist operating divisions
• Comprehensive Insurance and Indemnity

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Our Industry

• Make up of industry
• Fragmented industry made up of small operators
• Springbok Atlas is one of a handful of major
  players in tourism and transport sectors
• Growth industry
• - Tourism made up 8.1 of GDP in 2007
• - Contribution to economy grew by R22 billion
  from 2006 to 2007 (SA TOURISM data)
• Future
• - E-commerce Internet
• - Traditional inbound tourism
• - Continued growth in core markets UK/Europe
  and America
• - Emerging international market India, China
  and Middle East
• - Emerging domestic market
• Major Events (2010 etc)
• Business tourism

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Statistics
Fleet 150 vehicles
Book Value R56 million
Capacity 4 300 seats
Kilometers traveled 9.1 million per annum
Fuel consumed 2.3 million liters per annum
Passenger days 1.1 million per annum
Market share
Tourism 8 10
Charter 18 20
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Strengths How we meet challenges

• Strong brand and image
• Proven capabilities and performance
• Leader in SA tourism and coaching industries
• Management stability and expertise
• National infrastructure
• Diversified product range (genuine complete DMC)
• Wide client base
• Strong established relationships with key clients
• Alliances with major suppliers
• Purchasing power

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Future Growth and Profitability

• TOURISM BUSINESS
• Improve margins
• Capitalise on opportunities in a growth industry
• New alliances to capture new markets
• - Middle East, India and China
• - USA market
• Internet business
• CHARTER BUSINESS
• 2010 and tourism growth
• Contract transportation
• Grow with local sports and business events
• OVERALL
• Bolt on acquisitions in related industries

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Financial Summary Half Year Results 2008

• Car Rental Division
• Revenue (R 000) 566 771 1 335 888
• Revenue Growth 16 22
• Revenue Days Growth 11
• Revenue per Day Growth 5
• Profit before Interest and Tax (R 000) 138
  549 187 187
• PBIT Margin 24
  14
• PBIT Growth
  16
  12
• Average Net Assets (R 000) 1 062 257 1
  460 626
• Average Return on Invested Capital
  19 18
• Gearing - Current 84
  74
• - Going forward 100
  100

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Car Rental and Tourism Division

• QUESTIONS?