Turners Automotive Group Ltd · NZX:TRA
Turners Automotive — NZX Virtual Investor Event 2023
26 slides from Turners Automotive's conference presentation, May 10, 2023
Slide 1: NZX Virtual Investor Event
For personal use only NZX Virtual Investor Event May 2023 Todd Hunter – Group CEO 1 • NZX VIRTUAL INVESTOR EVENT - TURNERS AUTO GROUP
Slide 2: Disclaimer
Disclaimer Turners Automotive Group the (company) is solely responsible for the content of this document. This document is not an investment For personal use only statement or prospectus and does not constitute an offer of securities. This document or any other written or oral statements made by, or
Slide 3: We love cars
For personal use only We love cars 3 • NZX VIRTUAL INVESTOR EVENT - TURNERS AUTO GROUP
Slide 4: History of Turners Automotive Group
History of Turners Automotive Group Turners has been formed through the 2014 merger of New Zealand's largest vehicle and machinery retailer, Turners Auctions, and leading consumer finance and insurance business, Dorchester For personal use only 1967 Turners Auctions was established in 1967 when Tu
Slide 5: Overview of Turners Automotive Group
Overview of Turners Automotive Group NZX and ASX listed business with over 50 years of heritage 700+ kiwis employed and 4,500 shareholders FY22 For personal use only $51.9m revenue 54th largest $18.0m profit company on NZX 12% of auto loan market by free float market cap FY22 FY22 $40.4m revenue $24
Slide 6: Building a strong and sustainable business with a proven track record
Turners building a strong and sustainable business with a proven track record… For personal use only Total NPBT/NPAT over 3 year period ($m) Aggregate dividends paid over 3 year period (cps)* 120.0 0.6 0.57 109.6 100.0 0.5 0.47 84.7 79.2 80.0 63.7 0.4 60.0 45.5 41.9 0.3 40.0 0.23 20.0 15.1 0.2 - 0.1
Slide 7: We operate to a simple formula
For personal use only We operate to a simple formula 7 • NZX VIRTUAL INVESTOR EVENT - TURNERS AUTO GROUP
Slide 8: Quality environment + customer experience = outcomes for shareholders
For personal use only Quality Quality Quality environment + customer = outcomes for our for our experiences shareholders people 8 • NZX VIRTUAL INVESTOR EVENT - TURNERS AUTO GROUP
Slide 9: Quality Environment – team engagement scores at all time high
Quality Environment – our team engagement scores at all time high For personal use only Peakon Employee Engagement Scores 9.5 • Having a strong culture and an engaged team is very important to us, particularly in a service based retail business and at a time when recruitment and retention is 9 chall
Slide 10: Our customer experience is market leading, but the job is not finished
Our customer experience is market leading, but the job is not finished… For personal use only 10 • NZX VIRTUAL INVESTOR EVENT - TURNERS AUTO GROUP
Slide 11: Delivering strong returns for shareholders despite the challenges
We are delivering strong returns for shareholders despite the challenges… For personal use only Dividend per Share ($) 0.25 0.23 0.23 COVID impacted year 0.20 • Proven track record of delivering strong, sustainable and 0.20 growing dividends in the business 0.17 0.155 0.15 0.145 0.14 • Directors hav
Slide 12: HY23 Results
2 HY23 Results For personal use only 12 • NZX VIRTUAL INVESTOR EVENT - TURNERS AUTO GROUP
Slide 13: HY23 Results snapshot
HY23 Results snapshot Revenue 400 For personal use only 350 300 Revenue Shareholders’ Equity 250 Millions $185.3m +11% $266.7m as at 30 Sept 2022 200 2H 150 1H 100 EBIT Q2 Dividend 5.0 cps 50 $26.1m +2% Projected FY Div 23.0cps 0 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Net Profit Before Tax Net profit af
Slide 14: Diverse and resilient earnings base
The business has a diverse and resilient earnings base For personal use only Operating Profit Contribution by Segment ($m) 30.0 • All three auto related businesses grew 2.1 1.4 materially from pre-pandemic levels. 25.0 6.3 5.8 • Credit management has been significantly 3.0 20.0 3.1 impacted by reduc
Slide 15: Segment Overview
3 Segment Overview For personal use only 15 • NZX VIRTUAL INVESTOR EVENT - TURNERS AUTO GROUP
Slide 16: Regulatory changes driving drop in used car market sales
Regulatory changes driving drop in used car market sales… NZ Used Car Change of Ownerships (000s) For personal use only 1,200 40,000 35,000 • Government regulation Clean Car Standard and Clean Car Discount 1,000 continuing to constrain the supply of used vehicles in NZ NZ Used car Market Transations
Slide 17: Auto Retail division
Auto Retail division Branch expansion and retail optimisation key areas of focus Turners brand becoming synonymous with used car sales For personal use only 100 • Market share gains through brand promotion and retail optimisation initiatives. 90 80 • New branches performing well- Nelson and Rotorua
Slide 18: Finance division
Finance division Improving credit quality and maintaining margin key focus areas given environment For personal use only Average Credit Score Average Centrix • Growth has moderated as quality and margin become higher auto loan portfolio score priorities. • Our borrower “quality” metrics continue to
Slide 19: Insurance division
Insurance division Growing market share and focus on digital distribution For personal use only Mechanical Breakdown Insurance Loss Ratio Performance • Market share gains continuing to provide robust policy sales despite challenging market conditions. 66% • Risk pricing continues to be refined • Dig
Slide 20: Credit management
Credit management Debt load growing as economic conditions deteriorate For personal use only Consumer Arrears Trend • Consumer arrears are on the increase to 11.8% of the credit active population (11.3% in Mar-22) • Debt load up for EC Credit Control in FY23 v FY22 and expecting this to gather pace
Slide 21: Outlook
4 Outlook For personal use only 21 • NZX VIRTUAL INVESTOR EVENT - TURNERS AUTO GROUP
Slide 22: Some challenges, but we are in a strong position
There are some challenges, but we are in a strong position… Competitive advantages… For personal use only Challenges • Cost of living impact on consumer confidence • High trust brands in our stable • Rapidly increasing interest rate environment • Biggest buyer and seller of cars in NZ • New car supp
Slide 23: Outlook – FY23 Guidance
Outlook – FY23 Guidance For personal use only • Latest guidance issued early March-23 where we reiterated guidance given at the HY23 results announcement. • The company is now on track for FY23 profit before tax to be at least $44.0m (FY22: $43.1m). • Trading in Q423 has seen no significant change t
Slide 24: Key Messages
Key Messages For personal use only 1. Continue to produce robust and reliable earnings, despite macro challenges Following a number of strategic initiatives, and focus on de-risking, Turners continues to produce reliable and consistent earnings and a sustainable dividend yield. Auto and Insurance ar
Slide 25: We love cars
For personal use only We love cars 25 • NZX VIRTUAL INVESTOR EVENT - TURNERS AUTO GROUP
Slide 26: Contact
Contact Todd Hunter For personal use only Group CEO T: 64 21 722 818 E: todd.hunter@turners.co.nz Aaron Saunders Group CFO T: 64 27 493 8794 E: aaron.saunders@turners.co.nz 26 • NZX VIRTUAL INVESTOR EVENT - TURNERS AUTO GROUP
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