2 Cheap Cars Group Limited · NZX:2CC
2 Cheap Cars — NZ Automotive Investments — FY2023 Earnings Presentation
19 slides from 2 Cheap Cars's earnings presentation, May 29, 2023
Slide 1: FY23 Results Presentation
FY23 results Presentation NZ AUTOMOTIVE INVESTMENTS FULL YEAR FINANCIAL RESULTS TO 31 MARCH 2023 29 May 2023 1
Slide 2: Important Notice & Disclaimer
IMPORTANT NOTICE & DISCLAIMER This presentation is given on behalf of NZ Automotive Investments Limited (NZAI) (NZX:NZA). Information in this presentation is for general information purposes only and is not an offer or invitation for subscription or purchase of, or a recommendation to invest in NZAI
Slide 3: Agenda
Agenda 1. Chair address | Michael Stiassny, Chair 2. Business overview | Paul Millward, CEO 3. Financial results | Haydn Marks, CFO 4. Business update | Paul Millward, CEO 5. Outlook 6. Q+A NZ AUTOMOTIVE INVESTMENTS | FY23 INVESTOR PRESENTATION 3
Slide 4: FY23 Summary of key results
FY23 Summary of key results Revenue and income NPAT FY23 Underlying NPAT Q4 UNDERLYING NPAT $82.7M $1.3M $2.0M * $0.8M * up 25% from $66m down ($1.3m) from $2.6m up 18% from $1.7m up (representing 40% of full (includes $1.0m restructuring & year profit) non-recurring costs) Dividend Underlying EPS O
Slide 5: FY23 Business overview
FY23 Business overview • Board reset the Company foundations to focus on core vehicle retail business. • Appointed commercially-focused CEO Paul Millward in January 2023. • Optimised pricing and promotion delivered gross margin expansion in Q4 and improved underlying profitability for FY23. • Total
Slide 6: Resetting to deliver sustainable profits
Resetting to deliver sustainable profits Rebuild • Developed clear, commercially‐focused road map • Appointed new auditors • Secured trade finance facility (change over imminent) Singular focus • Vehicle retail business – 2 Cheap Cars • Decision taken to run down NZ Motor Finance loan book and act a
Slide 7: Improving profitability
Improving profitability Improving gross margins are driving profit increase +4% +87% Gross margins up from 17% to 21% in the past 3 months …. driving improved profitability NZ AUTOMOTIVE INVESTMENTS | FY23 INVESTOR PRESENTATION 7
Slide 8: Financial results
Financial results NZ AUTOMOTIVE INVESTMENTS | HY23 INVESTOR PRESENTATION 8
Slide 9: FY23 Financial results
FY23 Financial results FY23 FY22 Change Compared with FY22: Revenue and income 82.7 64.2 29% • Revenue and income up 29% to $82.7m, driven by Sundry income 0.0 1.7 (98%) Total revenue and income 82.7 66.0 25% increased sales volumes and inflationary impacts. Contribution margin 14.8 12.6 18% • Contr
Slide 10: FY23 Cash flow
FY23 Cash flow Compared with FY22: NZD m Cash flow summary FY23 FY22 Change • Net cash flow (excluding loan book lending) increased Net cash flow ex. loan book lending 10.9 0.6 10.3 by $10.3m to $10.9m on the back of EBITDA result and Net loan book lending 2.7 (3.1) 5.7 reducing inventory levels. Ne
Slide 11: FY23 Financial position and funding
FY23 Financial position and funding Compared with FY22: NZD m • Inventory turnover improved, dropping from 86 days to 57 Balance sheet summary FY23 FY22 days. Cash equivalents 3.8 3.8 Inventories 8.4 13.0 • Optimal inventory level expected to be $10.5m on current Loan receivables 3.9 6.8 Other asset
Slide 12: Business update
Business update NZ AUTOMOTIVE INVESTMENTS | HY23 INVESTOR PRESENTATION 12
Slide 13: Our strategy
Our strategy 1. Supply chain 2. Retail 3. Gross margin 4. Digital to 5. Customer leadership footprint to win expansion deliver experience Expand our Hub car National dealership Increase financial Refine full end-to-end Deepen connection with processing to unlock footprint for wider reach penetra
Slide 14: Business update: 2 Cheap Cars
Business update 2 CHEAP CARS VEHICLE SALES AND REVENUE 13 8,367 • • Total vehicle sales up 6%. Revenue up 29% on the prior period. Dealerships Cars sold in FY23 • Sales of digital origination accounted for 17% of total sales. • F&I penetration 26% for FY23. March 2023 has seen acceleration to 29%. 1
Slide 15: Growth opportunity
Growth opportunity Electric & hybrid electric vehicles (EV/HEVs) NZAI has a focused EV/HEV strategy and is well positioned to meet increasing demand 68,543 EV/HEV sales grow to 43% of total sales in Q4 Government’s Clean Car regime Electric vehicles on the road in NZ up 89% pa 2 Cheap Cars in a cred
Slide 16: Outlook
Outlook NZ AUTOMOTIVE INVESTMENTS | HY23 INVESTOR PRESENTATION 16
Slide 17: Outlook FY24
Outlook FY24 Action plan The Company is seeing demand for vehicles and finance and insurance remain strong, driven by its own clearer value proposition, immigration and the Government’s Clean Car regime. Vehicles sold by 2 Cheap Cars fulfil a basic and essential need. Therefore, despite the economic
Slide 18: Q+A
Q+A NZ AUTOMOTIVE INVESTMENTS | HY23 INVESTOR PRESENTATION 18
Slide 19: Thank you
Thank you 102 Mays Road, Onehunga, Auckland 1061 www.nzautomotiveinvestments.co.nz | Ph: +64 9 869 3330 19
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