Car Group Limited · ASX:CAR
Car — carsales.com — H1 FY20 Earnings Presentation
40 slides from Car's earnings presentation, Feb 12, 2020
Slide 1: Half Year Results Presentation
For personal use only HALF YEAR RESULTS PRESENTATION HALF YEAR ENDED 31 DECEMBER 2019
Slide 2: Disclaimer and Non-IFRS Information
DISCLAIMER AND NON-IFRS INFORMATION For personal use only Disclaimer Non-IFRS Financial Information The material in this presentation has been preparation of such statements, actual carsales' results are reported under prepared by carsales.com Limited (ASX: results may vary in a material manner. Int
Slide 3: Contents
CONTENTS For personal use only Key Highlights 4–6 Financial Review 7 – 13 carsales Australia 14 – 18 carsales International 19 – 22 Strategy Update 23 – 31 Outlook 32 – 33 Appendix 34 – 40 3
Slide 4: H1 FY20 Highlights
H1 FY20 HIGHLIGHTS For personal use only Reported revenue • Delivered growth across Domestic and International businesses • Expanded Group Adjusted EBITDA1 margin to 50%, whilst continuing to invest for UP 5% the future • Performance shows resilience of Australian business and significant growth $21
Slide 5: Key Operational Highlights
KEY OPERATIONAL HIGHLIGHTS For personal use only carsales is one of the largest digital automotive advertising businesses in the world >420,000 2.3x >33,000 ~ 12 million cars more time car dealers leads Australian Member cars in spent on carsales.com.au on all carsales sites around on all carsales s
Slide 6: Delivering Long-Term Shareholder Value
DELIVERING LONG-TERM SHAREHOLDER VALUE For personal use only 1. 2. 3. Clear industry leader Significant domestic High growth in Australia growth opportunities international portfolio in our core business and value with strong M&A track record with a trusted iconic brand added services 4. 5. 6. Valua
Slide 7: Group Financial Review
For personal use only GROUP FINANCIAL REVIEW 7
Slide 8: Strong Track Record of Sustained Growth
STRONG TRACK RECORD OF SUSTAINED GROWTH For personal use only Well positioned to continue delivering long-term shareholder value through world-class capability, exposure to international growth markets and investment in new products and services. Revenue ($m) Adjusted EBITDA ($m)1 Adjusted NPAT ($m)
Slide 9: Increasing International Contribution Driving Growth
INCREASING INTERNATIONAL CONTRIBUTION DRIVING GROWTH For personal use only • International now contributes more than 23% of look-through revenue and 18% of look-through EBITDA. • International look-through revenue and EBITDA grew 14% and 25% respectively in H1 FY20. Look-through 1 Revenue ($m) Look-
Slide 10: Summary Revenue & EBITDA Performance
SUMMARY REVENUE & EBITDA PERFORMANCE For personal use only Half Year Ending $A Millions Growth Revenue 31 December 2019 H1 FY191 H1 FY20 $'s % • First half revenue up 5% on pcp. • Solid underlying Data, Research Revenue and Services result excluding exit • Solid results from our Dealer and of some l
Slide 11: Good Expansion in Domestic and International Margins
GOOD EXPANSION IN DOMESTIC AND INTERNATIONAL MARGINS For personal use only • Good growth in overall margin, driven by expansion in Domestic Core and International businesses, whilst continuing to invest for longer term growth. • Adjusted EBITDA1 margins increased from 49.3% in H1 FY19 to 49.8% in H1
Slide 12: Adjusted Net Profit After Tax Summary
ADJUSTED NET PROFIT AFTER TAX SUMMARY For personal use only Half Year Ending $A Millions Growth 1 31 December 2019 H1 FY19 H1 FY20 $'s % • D&A increased by $2.5m due to increased depreciation of Total revenue 204.9 214.1 9.2 5% software assets and other growth capex - this investment Total operating
Slide 13: Strong Cash Flow and Robust Balance Sheet
STRONG CASH FLOW AND ROBUST BALANCE SHEET For personal use only Cash Flow2 (column) and conversion Capital expenditure ($’m) • Excellent conversion from EBITDA to cash from Adjusted EBITDA3 to cash (line) flow demonstrates the attractive working capital profile of the business. 140.0 20 +22% 114.4 1
Slide 14: carsales Australia
For personal use only CARSALES AUSTRALIA 14
Slide 15: Dealer Performance Summary
DEALER PERFORMANCE SUMMARY For personal use only Dealer revenue up 6% to $79.4m carsales Epic Car Sale CAGR 8% $75.1 $79.4 $69.2 $64.6 $58.8 ($m) H1 FY16 H1 FY17 H1 FY18 H1 FY19 H1 FY20 • Breadth of product offering and resilience of used car business underpinned solid Dealer performance. • Used car
Slide 16: Private Performance Summary
PRIVATE PERFORMANCE SUMMARY For personal use only Private revenue up 7% to $44.3m New tyresales website CAGR 16% $44.3 $41.5 $37.0 $30.7 $24.4 ($m) H1 FY16 H1 FY17 H1 FY18 H1 FY19 H1 FY20 • Solid growth in core private advertising revenue driven by pricing optimisation, increased premium uptake and
Slide 17: Display Performance Summary
DISPLAY PERFORMANCE SUMMARY For personal use only Display revenue down 5% to $28.8m My Feed CAGR -2% $34.5 $35.8 $31.6 $30.3 $28.8 ($m) H1 FY16 H1 FY17 H1 FY18 H1 FY19 H1 FY20 • Challenging advertising environment has persisted due to subdued new car market. • Display advertising revenue down 5%, al
Slide 18: Data, Research & Services Performance Summary
DATA, RESEARCH & SERVICES PERFORMANCE SUMMARY For personal use only DR&S revenue flat on pcp to $21.8m New LiveMarket CAGR 6% $21.9 $21.8 $20.6 $19.2 $17.4 ($m) H1 FY16 H1 FY17 H1 FY18 H1 FY19 H1 FY20 • H1 revenue growth impacted by intentional exit of low margin products and contracts. Underlying r
Slide 19: carsales International
For personal use only CARSALES INTERNATIONAL
Slide 20: Asia – SK Encar (Korea)
ASIA – SK ENCAR (KOREA) For personal use only Impressive performance given challenging macroeconomic conditions and new car advertising environment $A Millions Growth Constant • Key revenue growth drivers: H1 FY19 H1 FY20 $'s % Currency (%) • Increased uptake of Guarantee vehicle inspection service,
Slide 21: Latin America – webmotors (Brazil)
LATIN AMERICA – WEBMOTORS (BRAZIL) For personal use only $A Millions Growth Constant Strong first half growth as webmotors Underlying H1 FY19 H1 FY20 $'s % Currency (%) consolidates its position as the clear no.1 Revenue4 31.7 41.1 9.4 30% 29% automotive vertical classified site in Brazil EBITDA4 13
Slide 22: Latin America
LATIN AMERICA Strong growth in Mexico, performance in Chile and Argentina impacted by macro conditions For personal use only Visits 1 Leads 1 $A Millions Growth Constant +12% +19% • Solid growth in key operational metrics of Currency (%) traffic and leads. However, revenue growth H1 FY19 H1 FY20 $'s
Slide 23: Strategy Update
For personal use only STRATEGY UPDATE
Slide 24: carsales Strategy
CARSALES STRATEGY For personal use only OUR PURPOSE: We empower people to move freely through our world-leading marketplaces Value added services Digital marketplaces Future horizons We are focused To build a compelling ecosystem To grow our global leadership Leveraging consumer insights and of serv
Slide 25: Australia Key Focus Areas
AUSTRALIA KEY FOCUS AREAS For personal use only Key Strategic Objectives FY20 Focus Areas • Marketing and site optimisation to drive increase in traffic, leads and • Grow ROI for dealers on core transaction yield products • Increased adoption of promote automation and education of Dealer • Increase
Slide 26: Dealer Finance Product
DEALER FINANCE PRODUCT For personal use only Dealer Finance Product Dealer listings Private listings Private listings <$20K >$20K • Dealer finance represents a significant opportunity for customers and carsales. The annual value of Current listing automotive finance contracts in Australia is c.$35 v
Slide 27: Fuel Discount Offer Drives Membership
FUEL DISCOUNT OFFER DRIVES MEMBERSHIP For personal use only With c.6m members there is a significant opportunity for carsales to better engage our member base to create new and relevant meaningful products to benefit consumers. carsales Fuel Discount Offer • An engaged member base allows us to incre
Slide 28: Instant Offer Growth
INSTANT OFFER GROWTH For personal use only • Instant Offer provides a fast and convenient option for consumers to sell their car on carsales. The product generates a substantial premium yield for carsales compared to a standard advertising product. • In May 2019, we implemented improvements to our u
Slide 29: International Key Focus Areas
INTERNATIONAL KEY FOCUS AREAS For personal use only Key Strategic Objectives FY20 Focus Areas • Grow dealer penetration and expand guarantee product • Increase dealer penetration and yield volume through launch of c.8 new branch complexes (*update • Increase penetration and usage of listing depth Ko
Slide 30: SK Encar Guarantee and Inspection Product
SK ENCAR GUARANTEE AND INSPECTION PRODUCT For personal use only The SK Encar Guarantee product confirms: 1. The car exists at the dealership 2. The car has not been involved in any accidents1 3. The specifications of the car are advertised correctly • For consumers, the Guarantee provides peace of m
Slide 31: Webmotors Finance Product
WEBMOTORS FINANCE PRODUCT For personal use only • Finance revenue is now a material contributor to webmotors, comprising ~15% of revenue, and growing rapidly. 1 2 3 4 • Growth driven by a digital integration with Santander bank, which allows seamless credit assessment, including approval into Cockpi
Slide 32: FY20 Outlook
For personal use only FY20 OUTLOOK
Slide 33: Performance Outlook
PERFORMANCE OUTLOOK For personal use only Group Outlook Consistent with our guidance at the AGM in October 2019, we anticipate Group Revenue, Adjusted EBITDA2 and Adjusted NPAT2 growth to be solid in FY201. Domestic business performance in January has remained solid, with the exception of display ad
Slide 34: Appendix
For personal use only APPENDIX
Slide 35: Overview of carsales Non-IFRS Financial Information
OVERVIEW OF CARSALES NON-IFRS FINANCIAL INFORMATION For personal use only What is IFRS and non-IFRS financial information presented is sourced directly presentations in order to allow the reader to information? from financial information prepared in clearly reconcile between the IFRS and non- accord
Slide 36: Reconciliation of Reported to Adjusted NPAT
RECONCILIATION OF REPORTED TO ADJUSTED NPAT For personal use only Half Year Ending $A Millions Growth 31 December 2019 H1 FY191 H1 FY20 $'s % Reported NPAT (continuing operations) 58.5 71.2 12.7 22% Expense Adjustments Restructuring and M&A transaction costs 2 - 2.0 Interest Adjustments Option Disco
Slide 37: Adjusted Financials - Continuing Operations
ADJUSTED FINANCIALS - CONTINUING OPERATIONS For personal use only $A Millions H1 FY191 H1 FY20 Growth % Half Year Ending 31 December 2019 Reported Adjustments Adjusted Reported Adjustments Adjusted Reported Adjusted Total revenue 204.9 - 204.9 214.1 - 214.1 5% 5% Total operating expenses 103.9 - 103
Slide 38: carsales Look-Through P&L Analysis
CARSALES “LOOK-THROUGH” P&L ANALYSIS H1 FY191 H1 FY20 Growth % Look Look Look For personal use only % Owned Reported Underlying % Owned Reported Underlying Reported Underlying Through Through Through Revenue carsales International webmotors 30% Equity Acc'ted 31.7 9.5 30% Equity Acc'ted 41.1 12.3 n/
Slide 39: Stratton Finance – Discontinued Operations
STRATTON FINANCE – DISCONTINUED OPERATIONS For personal use only Half Year Ending $A Millions Variance 31 December 2019 H1 FY19 H1 FY20 $'s % Core Finance 19.4 15.8 (3.5) (18%) Other products 11.5 6.9 (4.7) (41%) Total Revenue 30.9 22.7 (8.2) (27%) Cost of sales 9.9 5.0 4.9 49% Other expense 69.2 21
Slide 40: For personal use only
For personal use only 40