MIX TELEMATICS LIMITED - MiX Telematics Announces Financial Results for First Quarter of Fiscal Year 2019

Release Date: 02/08/2018 08:00
Code(s): MIX
 
Wrap Text
MiX Telematics Announces Financial Results for First Quarter of Fiscal Year 2019

MIX TELEMATICS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/013858/06)
JSE share code: MIX  ISIN: ZAE000125316
NYSE share code: MIXT
(“MiX Telematics” or “the Company” or “the Group”)


MIX TELEMATICS ANNOUNCES FINANCIAL RESULTS FOR FIRST QUARTER OF FISCAL YEAR 2019


An explanation of non-IFRS measures used in this press release is set out in the Non-IFRS financial measures section. A
reconciliation of these non-IFRS measures to the most directly comparable IFRS measures is provided in the financial tables below,
which accompany this press release.

References in this announcement to “R” are to South African Rand and references to “U.S. Dollars” and “$” are to United States
Dollars. Unless otherwise stated, MiX Telematics has translated U.S. Dollar amounts from South African Rand at the exchange rate
of R13.7255 per $1.00, which was the R/$ exchange rate reported by Oanda.com as of June 30, 2018.

First Quarter Highlights:
• Subscription revenue of R390 million ($28.4 million), an increase of 18.4% year over year, on a constant currency basis
• Net subscriber additions of over 15,000 bringing the total base to 691,922 subscribers, up 11% year over year
• Operating profit of R68 million ($4.9 million), up 58% year over year
• Adjusted EBITDA of R126 million ($9.2 million), up 35% year over year
• Adjusted EBITDA margin of 27.7%, up 460 basis points compared to the prior year quarter

Midrand, South Africa, August 2, 2018 - MiX Telematics Limited (NYSE: MIXT, JSE: MIX), a leading global provider of fleet and
mobile asset management solutions delivered as Software-as-a-Service (“SaaS”), today announced financial results for its first quarter
of fiscal year 2019, which ended June 30, 2018.

“The first quarter marked a very strong start to the fiscal year. Subscription revenue grew more than 18% on a constant currency basis
and adjusted EBITDA margin of close to 28% expanded over 450 basis points year-over-year,” said Stefan Joselowitz, Chief Executive
Officer of MiX Telematics. “Our results were driven by ongoing robust demand globally from our premium fleet customers, across
all verticals. MiX is well positioned to deliver against our long-term goals given our differentiated portfolio of products, a growing
pipeline of global opportunities, and multiple levers to generate further margin accretion.”

Financial performance for the three months ended June 30, 2018
Subscription revenue: Subscription revenue was R390.4 million ($28.4 million), an increase of 16.4% compared with R335.4 million
($24.4 million) for the first quarter of fiscal year 2018. Subscription revenue increased by 18.4% year over year on a constant currency
basis. Subscription revenue benefited from an increase of over 66,000 subscribers, representing an increase in subscribers of 10.6%
from July 2017 to June 2018. Subscription revenue also benefited from an increase in average revenue per user.

Total revenue: Total revenue was R456.8 million ($33.3 million), an increase of 12.6% compared to R405.7 million ($29.6 million)
for the first quarter of fiscal year 2018. Total revenue increased by 14.4% year over year on a constant currency basis. Hardware and
other revenue was R66.4 million ($4.8 million), a decrease of 5.5% compared to R70.3 million ($5.1 million) for the first quarter of
fiscal year 2018.

Gross margin: Gross profit was R305.8 million ($22.3 million), as compared to R271.5 million ($19.8 million) for the first quarter
of fiscal year 2018. Gross profit margin was 66.9%, consistent with the prior year’s first quarter.
Operating margin: Operating profit was R67.7 million ($4.9 million), compared to R42.9 million ($3.1 million) for the first quarter
of fiscal year 2018. Operating profit margin was 14.8%, compared to 10.6% for the prior year’s first quarter. The margin expansion
was attributable primarily to revenue growth leveraging our fixed overhead and ongoing cost management initiatives. Operating
expenses of R238.0 million ($17.3 million) have increased by R6.5 million ($0.5 million) since the first quarter of fiscal 2018. Despite
the 12.6% revenue increase described above, the increase in operating costs was limited to 2.8%.

Adjusted EBITDA: Adjusted EBITDA, a non-IFRS measure, was R126.4 million ($9.2 million) compared to R93.9 million
($6.8 million) for the first quarter of fiscal year 2018. Adjusted EBITDA margin, a non-IFRS measure, for the first quarter of fiscal
year 2019 was 27.7%, compared to 23.1% for the comparative prior year period. The company reported a 28.7% Adjusted EBITDA
margin in the fourth quarter of fiscal 2018, including a 1.3% uplift related to hardware sales not repeated in the current quarter.

Profit for the period and earnings per share: Profit for the period was R14.4 million ($1.1 million), compared to R33.9 million
($2.5 million) for the first quarter of fiscal year 2018. Earnings per diluted ordinary share were 2 South African cents, compared to 6
South African cents in the first quarter of fiscal year 2018. For the first quarter of fiscal year 2019, the calculation was based on diluted
weighted average ordinary shares in issue of 586.6 million compared to 567.0 million diluted weighted average ordinary shares in
issue during the first quarter of fiscal year 2018.

Profit for the period includes a net foreign exchange loss of R0.2 million ($0.02 million) before tax. A net foreign exchange loss of
R5.0 million ($0.4 million) was recorded in the first quarter of fiscal year 2018. The Company’s effective tax rate for the quarter was
78.7%, compared to 14.0% for the first quarter of fiscal year 2018. Ignoring the impact of net foreign exchange gains and losses, and
related tax consequences, the tax rate which is used in determining adjusted earnings below, was 28.4% compared to 30.8% in the
first quarter of fiscal year 2018. The tax impact in respect of foreign exchange movements is set out in the reconciliation of adjusted
earnings in the financial tables which accompany this press release.

On a U.S. Dollar basis, and using the June 30, 2018 exchange rate of R13.7255 per U.S. Dollar, and at a ratio of 25 ordinary shares to
one American Depositary Share (“ADS”), profit for the period was $1.1 million, or 4 U.S. cents per diluted ADS.

Adjusted earnings for the period and adjusted earnings per share: Adjusted earnings for the period, a non-IFRS measure, was
R48.7 million ($3.6 million), compared to R30.7 million ($2.2 million) for the first quarter of fiscal year 2018 and excludes a net
foreign exchange loss of R0.2 million ($0.02 million). During the first quarter of fiscal year 2018, a net foreign exchange loss of
R5.0 million ($0.4 million) was recorded. Adjusted earnings per diluted ordinary share, also a non-IFRS measure, were 8 South
African cents, compared to 5 South African cents in the prior year comparative period.

On a U.S. Dollar basis, and using the June 30, 2018 exchange rate of R13.7255 per U.S. Dollar, and at a ratio of 25 ordinary shares to
one ADS, adjusted earnings for the period was $3.6 million, or 15 U.S. cents per diluted ADS.

Statement of financial position and cash flow: At June 30, 2018, the Company had R225.6 million ($16.4 million) of net cash and
cash equivalents, compared to R290.5 million ($21.2 million) at March 31, 2018. The Company generated R22.8 million ($1.7 million)
in net cash from operating activities for the three months ended June 30, 2018 and invested R78.3 million ($5.7 million) in capital
expenditures during the quarter, including investments in in-vehicle devices of R57.3 million ($4.2 million), leading to negative free
cash flow, a non-IFRS measure, of R55.5 million ($4.0 million) for the first quarter of fiscal year 2019, compared with negative free
cash flow of R64.0 million ($4.7 million) for the first quarter of fiscal year 2018. The Company utilized R19.1 million ($1.4 million)
in financing activities in the first quarter of fiscal 2019, which included dividends paid of R16.9 million ($1.2 million). The Company
utilized R30.0 million ($2.2 million) in financing activities in the first quarter of fiscal 2018. The cash utilized in financing activities
in the first quarter of fiscal 2018 included the repurchase of 5.0 million ordinary shares, which resulted in a cash outflow of
R18.7 million ($1.4 million) and dividends paid of R11.3 million ($0.8 million).

Business Outlook
MiX Telematics has translated U.S. Dollar amounts in this Business Outlook paragraph from South African Rand at the exchange rate
of R13.1760 per $1.00, which was the R/$ exchange rate reported by Oanda.com as of July 30, 2018.
Based on information as of today, August 2, 2018, the Company is issuing the following financial guidance for the full 2019 fiscal
year:

•    Subscription revenue - R1,624 million to R1,645 million ($123.3 million to $124.8 million), which would represent subscription
     revenue growth of 13.2% to 14.7% compared to fiscal year 2018. On a constant currency basis, this would represent subscription
     revenue growth of 13.5% to 15.0%. This constant currency growth is unchanged from our previous guidance.

•    Total revenue - R1,864 million to R1,895 million ($141.5 million to $143.8 million), which would represent revenue growth of
     8.8% to 10.7% compared to fiscal year 2018. On a constant currency basis, this would represent revenue growth of 9.1% to
     10.9%. This constant currency growth is unchanged from our previous guidance.

•    Adjusted EBITDA - R526 million to R545 million ($39.9 million to $41.4 million), which would represent an increase in
     Adjusted EBITDA of 19.0% to 23.3% compared to fiscal year 2018.

•    Adjusted earnings per diluted ordinary share of 31.2 to 33.2 South African cents based on 587 million diluted ordinary shares in
     issue, and based on an effective tax rate of 28% to 31%. At a ratio of 25 ordinary shares to one ADS, this equates to adjusted
     earnings per diluted ADS of 59 to 63 U.S. cents.

For the second quarter of fiscal year 2019 the Company expects subscription revenue to be in the range of R401 million to R406
million ($30.4 million to $30.8 million) which would represent subscription revenue growth of 14.8% to 16.2% compared to the
second quarter of fiscal year 2018. On a constant currency basis, this would represent subscription revenue growth of 15.1% to 16.6%.

The key assumptions used in deriving the forecast are as follows:
•    Growth in subscription revenue and subscribers are based on expected growth rates related to market conditions and takes into
     account growth rates achieved previously.

•    Achieving hardware sales according to expectations. Hardware sales are dependent on the volumes of bundled solutions selected
     by customers.

•    An average forecast exchange rate for the 2019 fiscal year of R13.0900 per $1.00.

The forecast is the responsibility of the board of directors and has not been reviewed or reported on by the Company’s external
auditors. The Company’s policy is to give guidance on a quarterly basis, if necessary, and does not update guidance between quarters.

The information disclosed in this “Business Outlook” section complies with the disclosure requirements of paragraph 8.38 of the JSE
Listings Requirements, which addresses profit forecasts.

Quarterly Reporting Policy in respect of JSE Listings Requirements
As a NYSE listed company, we have adopted a quarterly reporting policy. As a result of such quarterly reporting the Company is, in
terms of paragraph 3.4(b)(ix) of the JSE Listings Requirements, not required to publish trading statements in terms of paragraph
3.4(b)(i) to (viii) of the JSE Listings Requirements.

Conference Call Information
MiX Telematics management will also host a conference call and audio webcast at 8:00 a.m. (Eastern Daylight Time) and 2:00 p.m.
(South African Time) on August 2, 2018 to discuss the Company’s financial results and current business outlook:

•    The live webcast of the call will be available at the “Investor Information” page of the Company’s website,
     http://investor.mixtelematics.com.
•    To access the call, dial +1-888-394-8218 (within the United States) or 0-800-980-520 (within South Africa) or +1-323-701-
     0225 (outside of the United States). The conference ID is 7581568.
•    A replay of this conference call will be available for a limited time at +1-844-512-2921 (within the United States) or +1-412-
     317-6671 (within South Africa or outside of the United States). The replay conference ID is 7581568.
•    A replay of the webcast will also be available for a limited time at http://investor.mixtelematics.com.

About MiX Telematics Limited
MiX Telematics is a leading global provider of fleet and mobile asset management solutions delivered as SaaS to customers managing
over 691,000 assets in approximately 120 countries. The Company’s products and services provide enterprise fleets, small fleets and
consumers with solutions for safety, efficiency, risk and security. MiX Telematics was founded in 1996 and has offices in South Africa,
the United Kingdom, the United States, Uganda, Brazil, Australia, Romania, Thailand and the United Arab Emirates as well as a
network of more than 130 fleet partners worldwide. MiX Telematics shares are publicly traded on the Johannesburg Stock
Exchange (JSE: MIX) and MiX Telematics American depositary shares are listed on the New York Stock Exchange (NYSE: MIXT).
For more information visit www.mixtelematics.com.

Forward-Looking Statements
This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act
of 1995, including without limitation, statements concerning our financial guidance for the second quarter and full year of fiscal 2019,
our position to execute on our growth strategy, and our ability to expand our leadership position. These forward-looking statements
reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information
currently available to us and on assumptions we have made. Actual results may differ materially from those described in the forward-
looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, those
described under the caption “Risk Factors” in the Company’s Annual Report on Form 20-F filed with the Securities and Exchange
Commission (the “SEC”) for the fiscal year ended March 31, 2018, as updated by other reports that the Company files with or furnishes
to the SEC. The Company assumes no obligation to update any forward-looking statements contained in this press release as a result
of new information, future events or otherwise.

Non-IFRS financial measures
Adjusted EBITDA
To provide investors with additional information regarding its financial results, the Company has disclosed within this press release,
Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA and Adjusted EBITDA margin are non-IFRS financial
measures, and they do not represent cash flows from operations for the periods indicated, and should not be considered an alternative
to net income as an indicator of the Company’s results of operations, or as an alternative to cash flows from operations as an indicator
of liquidity. Adjusted EBITDA is defined as the profit for the period before income taxes, net finance income/(costs) including foreign
exchange gains/(losses), depreciation of property, plant and equipment including capitalized customer in-vehicle devices and right-
of-use assets, amortization of intangible assets including capitalized in-house development costs and intangible assets identified as
part of a business combination, share-based compensation costs, restructuring costs, profits/(losses) on the disposal or impairments of
assets or subsidiaries, insurance reimbursements relating to impaired assets and certain litigation costs.

The Company has included Adjusted EBITDA and Adjusted EBITDA margin in this press release because they are key measures that
the Company’s management and Board of Directors use to understand and evaluate its core operating performance and trends; to
prepare and approve its annual budget; and to develop short- and long-term operational plans. In particular, the exclusion of certain
expenses in calculating Adjusted EBITDA and Adjusted EBITDA margin can provide a useful measure for period-to-period
comparisons of the Company’s core business. Accordingly, the Company believes that Adjusted EBITDA and Adjusted EBITDA
margin provides useful information to investors and others in understanding and evaluating its operating results.

The Company’s use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider this performance measure
in isolation from or as a substitute for analysis of our results as reported under IFRS. Some of these limitations are:
•    although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced
     in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new
     capital expenditure requirements;
•    Adjusted EBITDA does not reflect changes in, or cash requirements for, the Company’s working capital needs;
•    Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
•    Adjusted EBITDA does not reflect tax payments or the payment of lease liabilities that may represent a reduction in cash available
     to the Company; and
•    other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness
     as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including
operating profit, profit for the period and the Company’s other results.

Adjusted Earnings and Adjusted Earnings Per Share
Adjusted earnings per share is defined as profit attributable to owners of the parent, MiX Telematics Limited, excluding net foreign
exchange gains/(losses) net of tax, divided by the weighted average number of ordinary shares in issue during the period.

The Company has included Adjusted earnings per share in this press release because it provides a useful measure for period-to-period
comparisons of the Company’s core business by excluding net foreign exchange gains/(losses) from earnings. Accordingly, the
Company believes that Adjusted earnings per share provides useful information to investors and others in understanding and evaluating
the Company’s operating results.

Free cash flow
Free cash flow is determined as net cash generated from operating activities less capital expenditures for investing activities. The
Company believes that free cash flow provides useful information to investors and others in understanding and evaluating the
Company’s cash flows as it provides detail of the amount of cash the Company generates or utilizes after accounting for all capital
expenditures including investments in in-vehicle devices and development expenditure.

Investor Contact:
Brian Denyeau
ICR for MiX Telematics
ir@mixtelematics.com
+1-855-564-9835

August 2, 2018

JSE sponsor
Java Capital Trustees and Sponsors Proprietary Limited


MIX TELEMATICS LIMITED
CONDENSED CONSOLIDATED INCOME STATEMENT
                                                       South African Rand               United States Dollar
                                                   Three months Three months       Three months Three months
                                                          ended           ended           ended            ended
                                                        June 30,       June 30,         June 30,        June 30,
Figures are in thousands unless otherwise stated           2018            2017            2018             2017
                                                      Unaudited      Unaudited        Unaudited      Unaudited
Revenue                                                 456,822         405,662           33,283         29,555
Cost of sales                                          (151,062)       (134,132)         (11,006)        (9,772)
Gross profit                                            305,760        271,530           22,277          19,783
Other (expenses)/income - net                               (12)         2,943               (1)            214
Operating expenses                                     (238,024)       (231,559)         (17,342)       (16,870)
    -Sales and marketing                                (46,856)        (48,979)          (3,414)        (3,568)
    -Administration and other charges                  (191,168)       (182,580)         (13,928)       (13,302)
Operating profit                                         67,724         42,914             4,934          3,127
Finance income/(costs) - net                                155         (3,485)               11           (254)
    -Finance income                                        2,678          2,001             195             146
    -Finance costs                                        (2,523)        (5,486)           (184)           (400)
Profit before taxation                                   67,879         39,429             4,945          2,873
Taxation                                                (53,445)        (5,523)           (3,894)          (402)
Profit for the period                                    14,434         33,906             1,051          2,471

Attributable to:
     Owners of the parent                                14,434         33,837             1,051          2,466
     Non-controlling interests                                 *            69                 *              5
                                                         14,434         33,906             1,051          2,471


*     Amounts less than R1,000/$1,000


MIX TELEMATICS LIMITED
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                    South African Rand       United States Dollar
                                                   June 30,   March 31,     June 30,      March 31,
Figures are in thousands unless otherwise stated       2018       2018         2018           2018
                                                   Unaudited    Audited    Unaudited      Unaudited
ASSETS
Non-current assets
Property, plant and equipment                        433,474    334,038       31,582         24,337
Intangible assets                                    924,645    898,527       67,367         65,464
Deferred tax assets                                   38,867     40,717        2,832          2,967
Capitalized commission assets                         48,951         —         3,566             —
Total non-current assets                           1,445,937   1,273,282     105,347         92,768
Current assets
Assets classified as held for sale (Note 7)           17,058     17,058        1,243          1,243
Inventory                                             67,603     57,013        4,925          4,154
Trade and other receivables                          379,577    286,406       27,655         20,867
Taxation                                              21,906     30,373        1,596          2,213
Restricted cash                                       22,178     20,935        1,616          1,525
Cash and cash equivalents                            256,374    308,258       18,679         22,459
Total current assets                                 764,696    720,043       55,714         52,461

Total assets                                       2,210,633   1,993,325     161,061        145,229
EQUITY
Stated capital                                       846,405    846,405       61,667         61,667
Other reserves                                        35,916    (51,614)       2,617         (3,760)
Retained earnings                                    744,538    722,380       54,245         52,631
Equity attributable to owners of the parent        1,626,859   1,517,171     118,529        110,538
Non-controlling interest                                  12          10           1              1
Total equity
                                                   1,626,871   1,517,181     118,530        110,539

LIABILITIES
Non-current liabilities
Deferred tax liabilities                             123,649     82,658        9,009          6,022
Provisions                                             2,322      2,132          169            155
Recurring commission liability                         4,045         —           295             —
Capitalized lease liability                           31,154         —         2,270             —
Total non-current liabilities                        161,170     84,790       11,743          6,177
Current liabilities
Trade and other payables                             351,075    350,519       25,576         25,538
Capitalized lease liability                           10,867         —           792              —
Taxation                                               5,154      2,832          376            206
Provisions                                            24,715     20,283        1,801          1,478
Bank overdraft                                        30,781     17,720        2,243          1,291
Total current liabilities                            422,592    391,354       30,788         28,513

Total liabilities                                    583,762    476,144       42,531         34,690
Total equity and liabilities                       2,210,633   1,993,325     161,061        145,229


MIX TELEMATICS LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                              South African Rand                      United States Dollar
                                                          Three months Three months               Three months Three months
                                                                  ended         ended              ended           ended
                                                                June 30,      June 30,           June 30,        June 30,
Figures are in thousands unless otherwise stated                    2018         2017               2018            2017
                                                               Unaudited    Unaudited          Unaudited      Unaudited
Cash flows from operating activities
Cash generated from operations                                    22,027       20,562             1,605           1,498
Net financing income                                               1,569        1,511               114             110
Taxation paid                                                       (838)      (3,749)              (61)           (273)
Net cash generated from operating activities                      22,758       18,324             1,658           1,335
Cash flows from investing activities
Capital expenditure                                              (78,306)     (82,344)           (5,705)         (5,999)
Proceeds on sale of property, plant and equipment                     41          581                 3              42
Decrease in restricted cash                                          305           35                22               3
Increase in restricted cash                                         (728)        (603)              (53)            (44)
Net cash used in investing activities                            (78,688)     (82,331)           (5,733)         (5,998)
Cash flows from financing activities
Share repurchase (Note 9)                                             —       (18,666)                —          (1,360)
Dividends paid to Company’s shareholders (Note 10)               (16,906)     (11,292)           (1,232)           (823)
Payment of lease liability                                        (2,194)          —               (160)             —
Net cash used in financing activities                            (19,100)     (29,958)           (1,392)         (2,183)
Net decrease in cash and cash equivalents                        (75,030)     (93,965)           (5,467)         (6,846)
Net cash and cash equivalents at the beginning of the period     290,538      356,333            21,168           25,961
Exchange gains/(losses) on cash and cash equivalents              10,085       (5,209)              735             (379)
Net cash and cash equivalents at the end of the period           225,593      257,159            16,436           18,736


MIX TELEMATICS LIMITED
OTHER FINANCIAL AND OPERATING DATA
                                                                           South African Rand                United States Dollar
                                                                       Three months Three months         Three months Three months
                                                                              ended            ended            ended          ended
                                                                            June 30,         June 30,         June 30,       June 30,
 Figures are in thousands except for subscribers                               2018              2017            2018           2017
                                                                          Unaudited         Unaudited       Unaudited      Unaudited
 Total revenue                                                               456,822           405,662         33,283         29,555
  Subscription revenue                                                       390,389           335,367         28,443         24,434
  Hardware revenue                                                            56,531            56,972          4,119          4,151
      Driver training, installation and other revenue                          9,902            13,323            721            970
 Adjusted EBITDA                                                             126,442            93,880          9,211          6,840
 Cash and cash equivalents                                                   256,374           290,161         18,679         21,140
 Net cash (1)                                                                225,593           257,159         16,436         18,736
 Capital expenditure incurred                                                 82,744            79,124          6,029          5,764
      Property, plant and equipment expenditure                               64,123            54,606          4,672          3,978
      Intangible asset expenditure                                            18,621            24,518          1,357          1,786
 Total development costs incurred                                             34,108            33,175          2,485          2,418
  Development costs capitalized                                               17,245            16,656          1,256          1,214
  Development costs expensed within administration and other
  charges                                                                     16,863            16,519          1,229          1,204
 Subscribers (number)                                                        691,922           625,602        691,922         625,602

(1)  Net cash is calculated as being net cash and cash equivalents, excluding restricted cash.

Notes to condensed consolidated income statement, statement of financial position, statement of cash flows and other financial
and operating data

1. Accounting policies
  The condensed consolidated statement of financial position, income statement and statement of cash flows included in these financial
  results have been prepared in accordance with International Financial Reporting Standards (“IFRS”) accounting policies. The
  accounting policies are consistent in all material respects with those applied in the preparation of the consolidated financial statements
  for the year ended March 31, 2018 except for the adoption of IFRS 9 Financial Instruments (“IFRS 9”), IFRS 15 Revenue from
  Contracts with Customers (“IFRS 15”) and IFRS 16 Leases (“IFRS 16”) during the quarter under review.

Adoption IFRS 9, IFRS 15 and IFRS 16:
IFRS 9 is effective for the Group from April 1, 2018.

IFRS 15 permits a modified retrospective cumulative catch-up approach for the adoption, which the Group has decided to apply. Under
this approach, the Group has recognized transitional adjustments in retained earnings on the date of initial application (i.e. April 1, 2018),
without restating the comparative period. Under the practical expedient, the new requirements were only applied to contracts that were
not completed as of April 1, 2018.

IFRS 16 applies to annual reporting periods beginning on or after January 1, 2019, but can be early adopted. Given that the Group
applied IFRS 15 from April 1, 2018, the Group decided to early adopt IFRS 16 from this date.

The Group has chosen to apply the ‘simplified approach’ on adoption of IFRS 16 that includes certain relief related to the measurement
of the right-of-use asset and the lease liability at April 1, 2018, rather than full retrospective application. Furthermore, the ‘simplified
approach’ does not require a restatement of comparatives.

Refer to Note 2.1.1.2 of our consolidated financial statements for the year ended March 31, 2018 for further details on the adoption of
the above mentioned standards.
Summary of the impact at April 1, 2018 of adopting IFRS 9, IFRS 15 and IFRS 16:

                                                                                          South African Rand       United States Dollar
 IFRS 9 Assets                                                                                (R3.2 million)            ($0.2 million)
      Trade and other receivables                                                             (R3.2 million)            ($0.2 million)

 IFRS 15 Assets                                                                               R46.5 million              $3.4 million
      Capitalized commission assets                                                           R45.3 million              $3.3 million
      Trade and other receivables (1)                                                          R1.2 million              $0.1 million

 IFRS 16 Assets                                                                               R29.9 million              $2.1 million
      Property, plant and equipment                                                           R30.6 million              $2.2 million
      Trade and other receivables (2)                                                         (R0.7 million)            ($0.1 million)

 Total Assets                                                                                 R73.2 million              $5.3 million

 IFRS 15 Liabilities                                                                           R8.7 million              $0.6 million
      Recurring commission liability (non-current)                                             R4.0 million              $0.3 million
      Trade and other payables (3)                                                             R4.7 million              $0.3 million

 IFRS 16 Liabilities                                                                          R31.9 million              $2.3 million
      Capitalized lease liability (non-current)                                               R23.3 million              $1.7 million
      Capitalized lease liability (current)                                                    R8.8 million              $0.6 million
      Trade and other payables (2)                                                            (R0.2 million)           ($0.01 million)

 Deferred tax liabilities                                                                      R7.9 million              $0.6 million
 Total liabilities                                                                            R48.5 million              $3.5 million


 Net increase in equity                                                                       R24.7 million              $1.8 million

(1) Contract assets related to fixed escalations.
(2) Reversal of lease prepayment and lease accruals under IAS 17 Leases. These have been reflected in the measurement of the lease
    liability under IFRS 16.
(3) Includes the current portion of additional recurring commission liability of R2.9 million ($0.2 million) and increase in liabilities
    related to contracts with customers due to significant financing adjustments of R1.8 million ($0.1 million).

Summary of the impact on the first quarter of fiscal 2019 of adopting IFRS 9, IFRS 15 and IFRS 16:
Other than a R1.8 million ($0.1 million) increase in finance costs primarily as a result of IFRS 15 significant financing activity interest
expense and IFRS 16 capitalized lease liability interest, the impact on each line item in the condensed consolidated income statement
for the first quarter of fiscal 2019 was not material.

The only adjustment to the statement of cash flows was an outflow of R2.2 million ($0.2 million) in respect of lease liability payments
being recorded in cash flows from financing activities as a result of the adoption of IFRS 16. This outflow was previously accounted for
as an operating lease expense and included under cash generated from operations.

The results have not been audited or reviewed by the Group’s external auditors.

2. Presentation currency and convenience translation
   The Group’s presentation currency is South African Rand. In addition to presenting these condensed consolidated financial results for
   the quarter ended June 30, 2018 in South African Rand, supplementary information in U.S. Dollars has been prepared for the
   convenience of users of these financial results. Unless otherwise stated, the Group has translated U.S. Dollar amounts from South
   African Rand at the exchange rate of R13.7255 per $1.00, which was the R/$ exchange rate reported by Oanda.com as of June 30,
   2018. The U.S. Dollar figures may not compute as they are rounded independently.

3. Earnings per share/ADS data
                                                                   South African Rand              United States Dollar
                                                               Three months Three months       Three months Three months
                                                                      ended          ended            ended           ended
                                                                    June 30,       June 30,         June 30,        June 30,
                                                                       2018           2017             2018             2017
                                                                  Unaudited      Unaudited        Unaudited       Unaudited
 Earnings per share
     Basic (R/$)                                                        0.03           0.06                #              #
     Diluted (R/$)                                                      0.02           0.06                #              #
 Earnings per American Depositary Share
     Basic (R/$)                                                        0.64           1.50             0.05           0.11
     Diluted (R/$)                                                      0.62           1.49             0.04           0.11
 Adjusted earnings per share
     Basic (R/$)                                                        0.09           0.05             0.01              #
     Diluted (R/$)                                                      0.08           0.05             0.01              #
 Adjusted earnings per American Depositary Share
     Basic (R/$)                                                        2.16           1.36             0.16           0.10
     Diluted (R/$)                                                      2.08           1.35             0.15           0.10
 Ordinary shares ('000)(1)
    In issue at June 30                                              564,625        558,499          564,625         558,499
    Weighted average                                                 564,465        562,552          564,465         562,552
    Diluted weighted average                                         586,627        567,033          586,627         567,033
 American Depositary Shares ('000)(1)
    In issue at June 30                                               22,585         22,340           22,585          22,340
    Weighted average                                                  22,579         22,502           22,579          22,502
    Diluted weighted average                                          23,465         22,681           23,465          22,681

#      Amounts less than $0.01

(1)    June 30, 2018 figure excludes 40,000,000 treasury shares held by MiX Telematics Investments Proprietary Limited (“MiX
       Investments”), a wholly owned subsidiary of the Group. June 30, 2017 excluded 40,000,000 treasury shares held by MiX
       Investments and 5,015,660 shares repurchased by the Company under the share repurchase program (Note 9).


4. Reconciliation of Adjusted Earnings
Reconciliation of Adjusted Earnings to Profit for the Period
                                                                   South African Rand              United States Dollar
                                                               Three months Three months       Three months Three months
                                                                      ended          ended            ended           ended
                                                                    June 30,       June 30,         June 30,        June 30,
Figures are in thousands unless otherwise stated                       2018           2017             2018             2017
                                                                  Unaudited      Unaudited        Unaudited        Unaudited
Profit for the period attributable to owners of the parent            14,434         33,837            1,051           2,466
Net foreign exchange losses                                              231          4,992               17             364
Income tax effect on the above component                              34,082         (8,161)           2,484            (595)
Adjusted earnings attributable to owners of the parent                48,747         30,668            3,552           2,235

Reconciliation of earnings per share to adjusted earnings per share
Basic earnings per share (R/$)                                          0.03           0.06                #               #
Net foreign exchange losses                                                #           0.01                #               #
Income tax effect on the above component                                0.06          (0.02)               #               #
Basic adjusted earnings per share (R/$)                                 0.09           0.05             0.01               #

#     Amount less than R0.01/$0.01


5. Reconciliation of Adjusted EBITDA to Profit for the Period
                                                                        South African Rand                  United States Dollar
                                                                    Three months Three months           Three months Three months
                                                                           ended            ended                ended           ended
                                                                         June 30,         June 30,             June 30,        June 30,
Figures are in thousands unless otherwise stated                            2018              2017                 2018             2017
                                                                       Unaudited         Unaudited           Unaudited         Unaudited
Adjusted EBITDA                                                          126,442            93,880              9,211             6,840
Add:
Net profit on sale of property, plant and equipment and
intangible assets                                                             22               333                  2                24
Decrease in restructuring costs provision                                     22                —                   2                 —
Less:
Depreciation (1)                                                         (40,659)          (34,476)            (2,962)           (2,512)
                (2)
Amortization                                                             (16,095)          (14,564)            (1,173)           (1,061)
Impairment of product development costs capitalized                            —               (95)                —                 (7)
Equity-settled share-based compensation costs                             (2,008)           (2,146)              (146)             (156)
Increase in restructuring costs provision                                      —               (18)                —                 (1)
Operating profit                                                           67,724            42,914              4,934            3,127
Add: Finance income/(costs) - net                                             155            (3,485)                11             (254)
Less: Taxation                                                            (53,445)           (5,523)            (3,894)            (402)
Profit for the period                                                      14,434            33,906              1,051            2,471

        Includes depreciation of property, plant and equipment (including in-vehicle devices and right-of-use assets). The adoption of
(1)
        IFRS 16 during the period resulted in depreciation of right-of-use assets of R2.3 million ($0.2 million) being recorded in the
        three months ended June 30, 2018.
(2)     Includes amortization of intangible assets (including product development costs and intangible assets identified as part of a
        business combination).



6. Reconciliation of Adjusted EBITDA Margin to Profit for the Period Margin
                                                                                                         Three months      Three months
                                                                                                                ended             ended
                                                                                                              June 30,          June 30,
                                                                                                                 2018              2017
                                                                                                            Unaudited         Unaudited
Adjusted EBITDA margin                                                                                          27.7%             23.1%
Add:
Net profit on sale of property, plant and equipment and intangible assets                                        0.0%              0.1%
Decrease in restructuring costs provision                                                                        0.0%               —
Less:
Depreciation                                                                                                    (9.0%)            (8.4%)
Amortization                                                                                                    (3.5%)            (3.7%)
Impairment of product development costs capitalized                                                               —               (0.0%)
Equity-settled share-based compensation costs                                                                   (0.4%)            (0.5%)
Increase in restructuring costs provision                                                                         —               (0.0%)
Operating profit margin                                                                                         14.8%             10.6%
Add: Finance income/(costs) - net                                                                                0.0%             (0.8%)
Less: Taxation                                                                                                 (11.6%)            (1.4%)
Profit for the period margin                                                                                     3.2%              8.4%
7. Assets Classified as Held for Sale
  The assets classified as held for sale relate to the property owned by the Central Services Organization, a division of MiX Telematics
  International Proprietary Limited. No impairment loss was recognized on reclassification of the property as held for sale as the fair
  value (estimated based on the recent market prices of similar properties in similar locations) less costs to sell is higher than the carrying
  amount. Management anticipate that the sale will be completed by the end of fiscal 2019.

  8. Reconciliation of Free Cash Flow to Net Cash Generated from Operating Activities

                                                                  South African Rand                        United States Dollar
                                                              Three months    Three months                Three months Three months
                                                                     ended           ended                ended             ended
                                                                   June 30,        June 30,             June 30,          June 30,
  Figures are in thousands unless otherwise stated                    2018             2017                2018               2017
                                                                 Unaudited        Unaudited           Unaudited          Unaudited
  Net cash generated from operating activities                      22,758            18,324               1,658             1,335
  Capital expenditure                                              (78,306)          (82,344)             (5,705)           (5,999)
  Free cash flow                                                   (55,548)          (64,020)             (4,047)           (4,664)



9. Share Repurchase
  As of May 23, 2017, the MiX Telematics Board approved a share repurchase program of up to R270 million ($19.7 million) under
  which the Company may repurchase its ordinary shares, including American Depositary Shares (“ADSs”). The Company may
  repurchase its shares from time to time in its discretion through open market transactions and block trades, based on ongoing
  assessments of the capital needs of the Company, the market price of its securities and general market conditions. This share repurchase
  program may be discontinued at any time by the Board of Directors, and the Company has no obligation to repurchase any amount of
  its securities under the program. The repurchase program will be funded out of existing cash resources.

  No purchases were made under the share repurchase program during the first quarter of fiscal year 2019.

At June 30, 2018, the following purchases had been made under the share repurchase program:

  Figures are in thousands unless otherwise stated                                                        South African Rand
  Period                      Total number of        Average           Shares canceled        Total value of shares    Maximum value of
                                    shares          price paid         under the share        purchased as part of     shares that may yet
                                repurchased        per share (1)         repurchase           publicly announced       be purchased under
                                                                          program                   program              the program
  Month
  June 2017                      5,015,660            3.72               5,015,660                     18,666                  251,334
                                 5,015,660                               5,015,660                     18,666                  251,334

  Figures are in thousands unless otherwise stated                                                      United States Dollar
  Period                      Total number of        Average           Shares canceled       Total value of shares  Maximum value of
                                   shares           price paid         under the share       purchased as part of   shares that may yet
                                repurchased        per share (1)         repurchase          publicly announced     be purchased under
                                                                          program                  program              the program
  Month
  June 2017                      5,015,660             0.27               5,015,660                    1,360                   18,311
                                 5,015,660                                5,015,660                    1,360                   18,311

(1)   Including transaction costs.

Subsequent to the repurchase, the shares were delisted and now form part of the authorized unissued share capital of the Company.

10. Dividend Paid
    In respect of the fourth quarter of fiscal year 2018 which ended on March 31, 2018, a dividend of 3 South African cents (0.2 U.S.
    cents) per ordinary share was declared during the period and paid on June 4, 2018. In respect of the fourth quarter of fiscal year
    2017, a dividend of 2 South African cents or 0.1 U.S. cents per share was paid on June 19, 2017.

11. Contingent Liabilities
    Service agreement
    In terms of an amended network services agreement with Mobile Telephone Networks Proprietary Limited (“MTN”), MTN is entitled
    to claw back payments from MiX Telematics Africa Proprietary Limited in the event of early cancellation of the agreement or certain
    base connections not being maintained over the term of the agreement. No connection incentives will be received in terms of the
    amended network services agreement. The maximum potential liability under the arrangement is R42.6 million or $3.1 million. No
    loss is considered probable under this arrangement.

12. Taxation
    Section 11D Allowances relating to tax assets recognized
    MiX Telematics International Proprietary Limited (“MiX International”), a subsidiary of the Group, historically claimed a 150%
    allowance for research and development spend in terms of section 11D (“S11D”) of the South African Income Tax Act No. 58 of
    1962 (“the Act”). As of October 1, 2012, the legislation relating to the allowance was amended. The amendment requires pre-
    approval of development project expenditure on a project specific basis by the South African Department of Science and Technology
    (“DST”) in order to claim a deduction of the additional 50% over and above the expenditure incurred (150% allowance). Since the
    amendments to S11D of the Act, MiX International had been claiming the 150% deduction resulting in a recognized tax benefit.
    MiX International has complied with the amended legislation by submitting all required documentation to the DST in a timely
    manner, commencing in October 2012.

   In June 2014, correspondence was received from the DST indicating that the research and development expenditure on certain
   projects for which the 150% allowance was claimed in the 2013 and 2014 fiscal years did not, in the DST’s opinion, constitute
   qualifying expenditure in terms of the Act. MiX International, through due legal process, had formally requested a review of the
   DST’s decision not to approve this expenditure. While approvals were obtained for a portion of this project expenditure as a result
   of a further review performed by the DST in February 2017, we continue to seek approval for the remaining projects and as such the
   legal process is ongoing. In addition to the approvals that were subject to the legal process, further approvals have been obtained for
   certain project expenditure, relating to both current and prior financial years. However, at period end, an uncertain tax position
   remains in relation to S11D deductions in respect of which approvals remain pending.

   Since the introduction of the DST pre-approval process, the Group has recognized in the income statement cumulative tax incentives
   in addition to the incurred cost of R21.3 million ($1.6 million) in respect of S11D deductions, of which R0.8 million ($0.1 million)
   was recognized in the quarter ended June 30, 2018. R18.5 million ($1.3 million) relates to deductions in respect of development
   project expenditure which has been approved by the DST. R2.8 million ($0.2 million) relates to an uncertain tax position in respect
   of projects where approvals have not yet been received from the DST. If the Group is unsuccessful in this regard, the Group will not
   recover the R2.8 million ($0.2 million) raised at June 30, 2018.

13.Dividend Declared
   On July 31, 2018, the Board declared in respect of the first quarter of fiscal year 2019, which ended on June 30, 2018, a dividend of
   3 South African cents (0.2 U.S. cents) per ordinary share to be paid on Monday, August 27, 2018.

   The details with respect to the dividends declared for ordinary shareholders are as follows:
   Last day to trade cum dividend                               Tuesday, August 21, 2018
   Securities trade ex dividend                                 Wednesday, August 22, 2018
   Record date                                                  Friday, August 24, 2018
   Payment date                                                 Monday, August 27, 2018

   Share certificates may not be dematerialized or rematerialized between Wednesday, August 22, 2018 and Friday, August 24, 2018,
   both days inclusive.

   Shareholders are advised of the following additional information:
    • the dividend has been declared out of income reserves;
    • the local dividends tax rate is 20%;
    • the gross local dividend amounts to 3 South African cents per ordinary share;
    • the net local dividend amount is 2.4 South African cents per ordinary share for shareholders liable to pay dividends tax;
    • the issued ordinary share capital of MiX Telematics is 604,625,369 ordinary shares of no par value; and
    • the Company’s tax reference number is 9155/661/84/7.

   The details with respect to the dividends declared for holders of our ADSs are as follows:
   Ex dividend on New York Stock Exchange (NYSE)               Thursday, August 23, 2018
   Record date                                                 Friday, August 24, 2018
   Approximate date of currency conversion                     Monday, August 27, 2018
   Approximate dividend payment date                           Tuesday, September 11, 2018


14. Development costs historical data
    The table below sets out development costs incurred and capitalized for each of the last eight quarters including the period ending
    June 30, 2018.


                                                                  South African Rand
                                                                  Three months ended
 Figures are in thousands (Unaudited)
                   June 30, March 31, December 31,              September       June 30,   March 31, December 31,            September
                                                                      30,                                                           30,
                       2018          2018             2017           2017          2017            2017           2016            2016
 Total
 development
 costs incurred      34,108        30,488           32,336          34,167       33,175           32,152        36,696           36,034
 Development
 costs
 capitalized         17,245        16,543           15,996          16,148       16,656           17,268        20,415           21,028
 Development
 costs expensed
 within
 administration
 and other
 charges             16,863        13,945           16,340          18,019       16,519           14,884        16,281           15,006

                                                             
                                                             United States Dollar
                                                              Three months ended
 Figures are in thousands (Unaudited)
                   June 30, March 31, December 31,           September     June 30,   March 31,   December September 30,
                                                                   30,                                 31,
                     2018         2018             2017           2017        2017        2017        2016         2016
 Total
 development
 costs incurred     2,485         2,221           2,355           2,489      2,418        2,342       2,673        2,625
 Development
 costs
 capitalized        1,256         1,205           1,165           1,176      1,214        1,258       1,487        1,532
 Development
 costs expensed
 within
 administration
 and other
 charges            1,229         1,016           1,190           1,313      1,204        1,084       1,186        1,093


For more information please visit our website at: www.mixtelematics.com


Registered office
Matrix Corner, Howick Close, Waterfall Park, Midrand


Directors
RA Frew* (Chairman), SB Joselowitz (CEO), SR Bruyns* (Lead Independent Director), PM Dell, F Futwa*, IV Jacobs*,
F Roji-Maplanka*, CWR Tasker, AR Welton*
* Non-executive

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