Car Group Limited · ASX:CAR
Car — carsales.com — FY2020 Earnings Presentation
46 slides from Car's earnings presentation, Aug 19, 2020
Slide 1: Full Year Results Presentation, Year Ended 30 June 2020
For personal use only FULL YEAR RESULTS PRESENTATION YEAR ENDED 30 JUNE 2020
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 Response to COVID-19 & Emerging Trends 7–9 Financial Review 10 – 16 carsales Australia 17 – 22 carsales International 23 – 27 Strategy Update 28 – 36 FY21 Trading Observations 37 – 39 Appendix 40 – 46 3
Slide 4: FY20 Highlights
FY20 HIGHLIGHTS • Delivered growth across Domestic and International businesses despite the impact of COVID-19 in H2 For personal use only • Reported financial metrics lower than pcp2 primarily due to COVID-19 dealer support package • Expanded Group Adjusted EBITDA1 margin to 55%, whilst continuing
Slide 5: Market-Leading Operational Metrics
MARKET-LEADING OPERATIONAL METRICS For personal use only carsales is one of the largest digital automotive advertising businesses in the world ~ 760,000 cars time to sell ~ 31 million ~ 1 billion for sale reduced by 34% leads sessions around the world at any point In Australia compared to on all car
Slide 6: Extending Our Australian Market Leadership
EXTENDING OUR AUSTRALIAN MARKET LEADERSHIP For personal use only carsales is consolidating its market leadership position in Australia 1. Daily Unique Audience1 2. Monthly Avg. time on site2 3. Total sessions3 +1.72x +2.15x +2.91x +1.69x +1.71x +2.29x 37m +2x FY18 FY19 FY20 FY18 FY19 FY20 carsales C
Slide 7: Response to COVID-19 and Emerging Trends
For personal use only RESPONSE TO COVID-19 AND EMERGING TRENDS 7
Slide 8: Carsales' Response to COVID-19
CARSALES’ RESPONSE TO COVID-19 For personal use only Our Australian customers and people have endured an extremely difficult FY20, first through the severe bushfire season and later the global pandemic. Throughout the pandemic, the business has been focused on three priorities: 1. Protecting our peo
Slide 9: Trends Emerging from COVID-19
TRENDS EMERGING FROM COVID-19 Strong growth in car ownership demand and traffic to our platform through COVID-19 is attributable to three broad factors For personal use only 1. Online migration has 2. Alternative transport 3. Government accelerated options initiatives Key observations from a recent
Slide 10: Group Financial Review
For personal use only GROUP FINANCIAL REVIEW 10
Slide 11: 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. Adjusted Revenue1 ($m) Adjusted EBITDA1 ($m) Adjusted
Slide 12: Increasing International Contribution Driving Growth
INCREASING INTERNATIONAL CONTRIBUTION DRIVING GROWTH • International now contributes more than 24% of look-through1 revenue and 19% of look-through1 For personal use only EBITDA. • International look-through1 revenue and EBITDA grew 13% and 20% respectively in FY20 despite the impact of COVID-19 in
Slide 13: Summary Revenue & EBITDA Performance
SUMMARY REVENUE & EBITDA PERFORMANCE Full Year Ending $A Millions Growth Revenue For personal use only 1 30 June 2020 FY19 FY20 $'s % • Full year Adjusted Revenue2 up 1% • Solid underlying Data, Research Adjusted Revenue 2 on pcp. and Services result excluding exit of some low margin contracts, Onli
Slide 14: Good Expansion in Domestic and International Margins
GOOD EXPANSION IN DOMESTIC AND INTERNATIONAL MARGINS Good growth in overall margin from 52% to 55%, driven by expansion across all segments, For personal use only particularly in the Domestic core business. 0.4% 54.8% 2.0% 0.1% 0.2% 52.2% FY192 Adjusted Domestic Core Business Other Domestic Investme
Slide 15: Adjusted Net Profit After Tax Summary
ADJUSTED NET PROFIT AFTER TAX SUMMARY For personal use only Full Year Ending $A Millions Growth 1 • D&A increased by $4.8m due to increased depreciation of 30 June 2020 FY19 FY20 $'s % 2 building fit outs, software assets and other growth capex - Adjusted Revenue 417.5 423.1 5.6 1% this investment s
Slide 16: Strong Cash Flow from Operations and Robust Balance Sheet
STRONG CASH FLOW FROM OPERATIONS AND ROBUST BALANCE SHEET For personal use only Cash Flow2 (column) and conversion Capital expenditure ($’m) • Excellent conversion of EBITDA to cash from Reported EBITDA to cash (line) flow demonstrates attractive working capital profile of the business, good cash 23
Slide 17: Carsales Australia
For personal use only CARSALES AUSTRALIA 17
Slide 18: Australia FY20 Key Focus Areas
AUSTRALIA FY20 KEY FOCUS AREAS Key Strategic Objectives FY20 Focus Areas For personal use only • Grow ROI for dealers on core transaction products Marketing and site optimisation to drive increase in traffic, leads and yield • Increase penetration and usage of listing depth Increased adoption of Pro
Slide 19: Dealer
DEALER For personal use only Dealer Adjusted Revenue1 up 10% to $168.7m +10% Depth Revenue CAGR ($m) 153.9 168.7 146.4 (reported) 21% FY19 FY20 • Breadth of product offering and resilience of used car business FY15 FY16 FY17 FY18 FY19 FY20 underpinned solid Dealer performance. • The used car lead vo
Slide 20: Private
PRIVATE For personal use only Private revenue down 5% to $77.8m -5% Instant Offer optimisation Net promoter score1 Lead to sale conversion1 ($m) +5.8x +33% 82.1 77.8 FY19 FY20 • Solid growth of 7% in H1 and a decline of 17% in H2. Growth in H1 reflective of growth in core private business, Instant O
Slide 21: Media
MEDIA For personal use only Media Adjusted Revenue2 down 22% to $50.2m VFACTS reported new car sales1 -14% -22% 1.13 1.18 1.18 1.20 1.10 0.95 ($m) FY15 FY16 FY17 FY18 FY19 FY20 64.1 49.0 New car sales in FY20 declined 14% on pcp. 50.2 (reported) Programmatic inventory sales volume2 FY19 FY20 + 4.2x
Slide 22: Data Research & Services
DATA RESEARCH & SERVICES For personal use only DR&S Adjusted Revenue1 flat on pcp to $43.3 It’s Odometer Day! +0% Update the odometer reading for your Mazda in your carsales garage to find out how much it's worth and more We'll keep you updated on your car’s demand... ($m) 39.3 43.2 43.3 (reported)
Slide 23: Carsales International
For personal use only CARSALES INTERNATIONAL
Slide 24: International FY20 Key Focus Areas
INTERNATIONAL FY20 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 South volume through launch of 8 new branch complexes • Increase penetration and usage of depth products Kor
Slide 25: Asia – Encar (South Korea)
ASIA –ENCAR (SOUTH KOREA) Impressive performance given challenging macroeconomic conditions For personal use only $A Millions Growth Constant • While South Korea has clearly been impacted by COVID-19, FY191 FY20 $'s % Currency (%) economic activity to date has been significantly less impacted than m
Slide 26: Latin America – Webmotors (Brazil)
LATIN AMERICA – WEBMOTORS (BRAZIL) For personal use only Pro-forma $A Millions Growth Constant Strong underlying growth rates as webmotors 100% FY19 FY20 $'s % Currency (%) consolidates its no.1 market position. H2 Revenue1 67.8 74.6 6.8 10% 17% impacted by COVID-19. 1 EBITDA 29.3 30.4 1.1 4% 10% •
Slide 27: Latin America
LATIN AMERICA Strong growth in Mexico, performance in Chile and Argentina impacted by macro conditions For personal use only Visits 2 Leads 2 $A Millions Growth Constant -9% • Weaker results in Chile driven by +15% macroeconomic challenges posed by the Currency (%) CHILE FY191 FY20 $'s % pandemic an
Slide 28: Strategy Update
For personal use only UPDATE STRATEGY
Slide 29: 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 30: Australia FY21 Key Focus Areas
AUSTRALIA FY21 KEY FOCUS AREAS Key Strategic Objectives FY21 Focus Areas For personal use only • Grow ROI for dealers on core transaction • Launch dealer ratings on details pages to improve lead conversion products • Expand usage of recurring, no-touch promote products Dealer • Increase penetration
Slide 31: Dealer Key Focus Areas
DEALER KEY FOCUS AREAS For personal use only Dealer Finance Integration • Significant focus area given the annual value of the automotive finance market in Australia is c.$35b. • Integrated finance listings on carsales to increase awareness of a dealer’s finance offering. Finance provided by • Succe
Slide 32: Private Key Focus Areas
PRIVATE KEY FOCUS AREAS Providing our car buyers with better insights and greater confidence is a key focus area for FY21 For personal use only • carsales has a 2.2x lead over our nearest competitor when measuring trust1 and a 3.5x lead over our nearest competitor when measuring Trust & Safety Insig
Slide 33: Data, Research & Services Key Focus Areas
DATA, RESEARCH & SERVICES KEY FOCUS AREAS Providing a personalised experience for our members during each stage of the ownership journey will For personal use only be key to driving long-term loyalty • There is a significant opportunity for us to expand the scope of our engagement with our 6M member
Slide 34: International FY21 Key Focus Areas
INTERNATIONAL FY21 KEY FOCUS AREAS For personal use only Key Strategic Objectives FY21 Focus Areas • Open new Guarantee sites in strategic locations and continue • Increase penetration and usage of Guarantee increasing utilisation by enhancing efficiency at sites to allow South product inspection of
Slide 35: South Korea Key Focus Areas
SOUTH KOREA KEY FOCUS AREAS For personal use only Dealer Direct Home Delivery • Dealer Direct is a similar product to carsales’ Instant Offer. The • The Home Delivery product was launched in July 2019, which brings consumer lists their car and multiple dealers participate in a 24- the entire searchi
Slide 36: Brazil Key Focus Areas
BRAZIL KEY FOCUS AREAS For personal use only Support & Innovation Through COVID-19 Regional Expansion Plan • In support of Brazilian automotive dealers, webmotors helped • Throughout the year webmotors pushed into regional locations reduce short term operating costs and allowed extended credit outsi
Slide 37: FY21 Trading Observations
For personal use only FY21 TRADING OBSERVATIONS
Slide 38: FY21 Trading Observations
FY21 TRADING OBSERVATIONS For personal use only Overall Summary • COVID-19 continues to create uncertainty in our operating environment • While lockdowns in most regions have been lifted, Metro Melbourne and Regional Victoria are currently in stage 4 and 3 lockdowns and localised lockdowns in other
Slide 39: Specific Trading Observations
SPECIFIC TRADING OBSERVATIONS For personal use only Given the continuing uncertainty due to COVID-19, we are not providing specific guidance on our financial expectations for FY21. We do, however provide the following current trading observations. Australia • Dealer: • In July 2020, overall lead vol
Slide 40: Appendix
For personal use only APPENDIX
Slide 41: 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 42: Reconciliation of Reported to Adjusted NPAT
RECONCILIATION OF REPORTED TO ADJUSTED NPAT For personal use only FY191 FY20 $A Millions Revenue EBITDA NPAT Revenue EBITDA NPAT Reported Financials (continuing operations) 417.5 212.9 132.1 395.6 202.0 119.9 Dealer Support Package2 - - - 27.5 27.5 19.3 2 Restructuring and M&A transaction costs - 1.
Slide 43: Adjusted Financials - Continuing Operations
ADJUSTED FINANCIALS - CONTINUING OPERATIONS For personal use only FY191 FY20 Growth % $A Millions Reported Adjustments Adjusted Reported Adjustments Adjusted Reported Adjusted Revenue 417.5 - 417.5 395.6 27.5 423.1 (5.2%) 1.3% Total operating expenses 204.6 (5.0) 199.6 193.6 (2.3) 191.3 5.4% 4.2% EB
Slide 44: Carsales Look-Through P&L Analysis
CARSALES “LOOK-THROUGH4” P&L ANALYSIS FY191 FY20 Growth % Look Look Look $A Millions % Owned Reported Underlying5 % Owned Reported Underlying5 Reported Underlying5 For personal use only 4 4 4 Through Through Through Adjusted Revenue2 carsales International Brazil 30% Equity Acc'ted 67.8 20.3 30% Equ
Slide 45: Impact of AASB Leases Adoption
IMPACT OF AASB 16 LEASES ADOPTION FY19 FY20 For personal use only Excluding AASB16 Including Excluding AASB16 Including $A Millions AASB16 Adjustment AASB16 AASB16 Adjustment AASB16 1 Adjusted Revenue 417.5 - 417.5 423.1 - 423.1 1 Adjusted EBITDA Online Advertising 158.4 4.1 162.6 164.0 4.2 168.3 Da
Slide 46: For personal use only
For personal use only 46