Turners Automotive Group Ltd · NZX:TRA
Turners Automotive — Shareholder Meeting (September 2018)
25 slides from Turners Automotive's shareholder meeting presentation, Sep 26, 2018
Slide 1: Turners Automotive Group Limited 2018 Annual Meeting
For personal use only Turners Automotive Group Limited 2018 Annual Meeting 2018 Annual Meeting Presentation
Slide 2: Our Opportunity: The NZ Automotive Sector
OUR OPPORTUNITY: THE NZ AUTOMOTIVE SECTOR For personal use only 164,000 153,000 3.85m Light vehicles in the NZ vehicle fleet 9,000+ EVs used cars were imported into NZ in year ended Mar 18 New passenger and light commercial vehicles sold into NZ in year ended Mar 18 9,752 as at the end of August 201
Slide 3: FY18: Net Profit After Tax Up 33%
FY18: NET PROFIT AFTER TAX UP 33% For personal use only REVENUE NET PROFIT AFTER TAX 350 25 300 20 250 15 200 $Millions $Millions 150 10 100 5 50 0 0 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 GROUP REVENUE Up 32% to $330.5m NPAT Up 33% to $23.4m 2018 Annual Meeting Presentation 3
Slide 4: FY18: Full Year Dividend Up 7% to 15.5 cps
FY18: FULL YEAR DIVIDEND UP 7% TO 15.5 CPS For personal use only DIVIDEND EARNINGS PER SHARE 18 35 16 30 14 25 Cents per share 12 Cents Per Share 10 20 8 15 6 10 4 5 2 0 0 FY14 FY15 FY16 FY17 FY18 FY14 FY15 FY16 FY17 FY18 FULL YEAR DIVIDENDS Up 7% EARNINGS PER SHARE up 15% to 29.3cps 15.5 cents per
Slide 5: Share Price Is Undervalued
SHARE PRICE IS UNDERVALUED For personal use only • Share price undervalued on core metrics • Board and management continue to invest personally Analyst A Analyst B • Feedback centres around three core themes - Complexity of Turners business and strategy 12 month target 3.29 3.35 - Concern about the
Slide 6: Diversified Funding Enabling Growth
DIVERSIFIED FUNDING FY18 Borrowings by Source For personal use only ENABLING GROWTH Bank 18% • $30M capital raise in Oct 17 • Convertible Bonds of $26M mature Sept 2018. Equity 40% • Growth in Securitisation Warehouse reflects growth in Securitisati finance book and substitution on of corporate bank
Slide 7: Turners: An Integrated Automotive Group
TURNERS’ AN For personal use only INTEGRATED AUTOMOTIVE GROUP I NEED TO FINANCE AND INSURE MY VEHICLE • Turners is the biggest seller of cars, trucks and machinery in NZ. We finance them and insure I NEED TO BUY A I NEED TO REPAIR them for mechanical breakdown, VEHICLE AND SERVICE MY accident and lo
Slide 8: Todd Hunter, Chief Executive Officer
For personal use only Todd Hunter Chief Executive Officer 2018 Annual Meeting Presentation
Slide 9: FY18 Year at a Glance
FY18 YEAR AT A GLANCE 350.0 REVENUE For personal use only 300.0 250.0 Millions • Integrated Buy Right Cars into the group 200.0 150.0 • Integrated three separate finance operating entities into single 100.0 entity under the Oxford Finance brand 50.0 • Successfully merged existing insurance business
Slide 10: FY18 Sector Results
FY18 SECTOR RESULTS For personal use only DebtFY18 REVENUE $M SECTOR REVENUE Manageme 350 Automotive Retail the largest nt 300 contributor: 68% revenue and 250 41% Operating Profit 200 Finance & 150 Insurance Annual trends reflect Auto Retail 100 acquisition and organic growth 50 0 FY15 FY16 FY17 FY
Slide 11: FY18 Operating Environment
FY18 OPERATING ENVIRONMENT For personal use only • Used vehicle market continuing to grow: Total Used Vehicle Sales o Used cars in line with previous year Financial Year o Used trucks up 5% YOY 1,600,000 o Damaged and end of life up 11% YOY 1,400,000 1,200,000 • New car registrations (passenger and
Slide 12: Strategic Imperatives for FY19
STRATEGIC IMPERATIVES FOR FY19 For personal use only CUSTOMER FIRST: • Keep developing ‘Customer First’ culture across all businesses • Improve the quality of customer experience – both in-person and online QUALITY LENDING: • Continue transition to higher quality, more profitable lending UTILISE WEA
Slide 13: Automotive Retail: FY19 Key Focus Areas
AUTOMOTIVE For personal use only RETAIL FY19 KEY FOCUS AREAS • Optimise for retail customers • Deliver a better customer experience in-store and online • Investment in property and recruitment, training and development • Redirection of Turners Finance loans into Oxford Finance in 2H19 13 2018 Annual
Slide 14: Auto Retail - Progress on Key Initiatives
AUTO RETAIL - PROGRESS ON KEY INITIATIVES For personal use only • Introduced Net Promoter Score measure Customer focused • 63% promoters, 25% passive, 12% detractors so far • Web traffic to www.turners.co.nz up 8.5% Aug YTD to 1.15 Online and digital experience million users, NZ’s second most popula
Slide 15: Auto Retail: Pipeline of Property Opportunity
AUTO RETAIL: PIPELINE OF PROPERTY OPPORTUNITY For personal use only PROPERTY ACTIVITY 2018 TO DATE AUCKLAND Porirua – Turners Cars branch relocated from Seaview Whangarei Turners Cars x 2 Buy Right Cars x 10 Whangarei – land acquired in high retail zone, existing Auckland Tauranga branch to be r
Slide 16: Finance and Insurance: FY19 Key Focus Areas
FINANCE AND For personal use only INSURANCE FY19 KEY FOCUS AREAS • Streamline the customer experience by making it quicker and easier • Use data analytics and automated services to make better lending decisions • Continue to re-position finance ledgers towards higher quality lending • Continued focu
Slide 17: Finance and Insurance - Progress on Key Initiatives
FINANCE AND INSURANCE - PROGRESS ON KEY INITIATIVES For personal use only 508 495 465 455 450 437 429 437 422 Improve lending quality by tightening credit criteria Apr16-Sep16 Oct16-Mar17 Apr17-Sep17 Oct17-Mar18 Apr18-Aug18 OFL Average Veda MTF Average Veda • Electronic ID and address verification a
Slide 18: Credit Management: FY19 Key Focus Areas
CREDIT MANAGEMENT For personal use only FY19 KEY FOCUS AREAS: • Investing in sales resource in Australia to build our corporate debt base • Attract and load higher quality debt • Use technology to improve efficiencies • Use data to improve results for customers eg Collections Scorecard • Integrate w
Slide 19: Credit Management - Progress on Key Initiatives
CREDIT MANAGEMENT - PROGRESS ON KEY INITIATIVES For personal use only • Corporate debt load up 13% Aug YTD Corporate debt load • Key wins in NZ - Contact Energy and QBE Insurance new clients, ACC renewed for 3 years, increase in debt load from banking clients • New BDM hired in key Australian market
Slide 20: Outlook
OUTLOOK For personal use only • On track for FY19 guidance of NPBT $34 million to $36 million • Challenging Q1, but much improved Q2 • Investments in people and property to deliver in H2 • Focus on organic growth • Confidence in guidance and long term growth prospects of the business FY19 NPBT guida
Slide 21: Shareholder Discussion
For personal use only SHAREHOLDER DISCUSSION 2018 Annual Meeting Presentation
Slide 22: Resolutions
RESOLUTIONS For personal use only • RESOLUTION 1: That Staples Rodway be reappointed as auditors of the Company and that the Directors be authorised to fix the auditors’ remuneration. • RESOLUTION 2: That Martin Berry, who was appointed by the Board as a Director on 17 August 2018 and retires from o
Slide 23: Voting
VOTING For personal use only Resolution FOR AGAINST PROXY DISCRETION Auditor’s remuneration 35,526,170 6,492 534,084 Election of Martin Berry 35,419,004 39,342 587,140 Re-election of Antony Vriens 35,475,741 27,101 537,140 Re-election of Paul Byrnes 35,490,679 61,677 495,179 Increase in Directors’ r
Slide 24: Other Business, Close of Meeting, Contact
OTHER BUSINESS For personal use only CLOSE OF MEETING CONTACT Todd Hunter CEO Turners Limited T: 64 21 722 818 E: todd.hunter@turners.co.nz 24 2018 Annual Meeting Presentation
Slide 25: Disclaimer
DISCLAIMER For personal use only Turners Automotive Group the (company) is solely responsible for the content of this document. This document is not an investment statement or prospectus and does not constitute an offer of securities. This document or any other written or oral statements made by, or
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