Kyalami Surface Business Plan — Market Analysis

Market size, the growing parc of premium vehicles, demand drivers and the addressable job volume.

Section 8 of 31

Market Analysis

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A R1.2bn national market narrows to a R503m serviceable opportunity, of which the Company targets 8.3% by Year 5, a demanding share that the plan does not disguise.

Bottom-up market sizing

The market is built from the vehicle parc upward. South Africa has approximately 13.4m registered vehicles, of which roughly 8.0m are light passenger vehicles. The addressable population is not all of them: appearance protection is bought almost exclusively for vehicles under six years old above a value threshold of roughly R350,000, and the premium segment above R650,000 accounts for the substantial majority of spend.

Table 10. Bottom-up market build, annual South African spend

Attachment rates are management estimates informed by international benchmarks discounted for South African penetration. Average prices are stated at retail including VAT.

Segment	Addressable vehicles	Annual attachment	Average price	Annual market
Paint protection film	360,000 premium	3.2%	R24,000	R276m
Ceramic coating	760,000 premium and upper-mid	3.5%	R8,500	R226m
Colour-change wrap	760,000 premium and upper-mid	0.5%	R30,000	R114m
Window film	1,500,000 addressable	5.0%	R2,900	R218m
Commercial livery	28,000 vehicles per annum	n/a	R7,200	R202m
Professional paint correction	Premium parc	n/a	n/a	R180m
Total addressable market				R1,216m

The serviceable available market applies two filters. Geographically, Gauteng, the Western Cape and KwaZulu-Natal together account for approximately 71% of the premium vehicle parc. By channel, the professional studio segment, as distinct from informal, mobile and dealer-accessory fitment, accounts for approximately 58% of spend. The resulting serviceable available market is R503m.

Figure 1. From a R1.2bn national market to a R503m serviceable opportunity

The serviceable obtainable market is the Company’s own FY32 revenue, not an estimate of what it could theoretically reach.

The share implied by the plan is aggressive and should be tested

FY32 revenue of R42.0m represents 8.3% of the serviceable available market. For a two-studio operator, in a market whose largest incumbents are single-site businesses, that share would make the Company one of the two or three largest professional appearance-protection operators in South Africa within five years of opening its first bay.

Management believes this is achievable precisely because the market is so fragmented, 8.3% of a market with no operator above 4% is a different proposition from 8.3% of a consolidated one. But it is a strong claim, and an investor should treat it as one of the two or three assumptions most worth independent diligence.

Demand drivers and seasonality

Demand is driven by new premium vehicle deliveries, by the used premium market, by discretionary income and by referral. It is strongly seasonal. November runs approximately 67% above January: bonuses are paid, vehicles are delivered ahead of the December holiday period, and owners protect vehicles before long-distance coastal travel on chip-heavy roads. January is the weakest month of the year by a wide margin, as school fees and post-festive contraction remove discretionary spending entirely.

Figure 2. The studio must be staffed for a peak it cannot store

Installer capacity is a fixed monthly cost. Seasonal troughs cannot be recovered later because unsold installer-hours expire. This is the structural reason the business is utilisation-driven.

The seasonal profile has a direct consequence for the operating model. Because installer capacity cannot be stored, the Company plans for January and February to be filled with commercial livery and fleet work, which is contracted, less seasonal and schedulable in advance. This is the principal reason fleet work is retained in the mix despite its lower margin.