Car Group Limited · ASX:CAR
Car — Shareholder Meeting (October 2019)
34 slides from Car's shareholder meeting presentation, Oct 25, 2019
Slide 1: 2019 AGM Presentation
2019 AGM PRESENTATION 25 October 2019
Slide 2: Disclaimer and Non-IFRS Information
Disclaimer and Non-IFRS Information Disclaimer Non-IFRS Financial Information The material in this presentation has been prepared by carsales.com Limited carsales' results are reported under International Financial Reporting (ASX: CAR) ABN 91 074 444 018 (“carsales") and is general background Standa
Slide 3: Long-term track record of delivering strong shareholder returns
LONG-TERM TRACK RECORD OF DELIVERING STRONG SHAREHOLDER RETURNS Carsales (CAR) Total Shareholder Return (TSR) v S&P ASX200 Total Return Index (AXNT) 1 600% carsales ASX200 500% 363.7% 400% 300% 121.6% 200% 100% 0% 1 Total Shareholder Returns (TSR) includes dividend and share price appreciation from
Slide 4: FY19 Highlights
FY19 HIGHLIGHTS Market leadership and diversification continue to deliver growth. Reported revenue Domestic highlights International highlights • Robust revenue performance in core • Strong international growth with look Up 11% to $418m Dealer (+7% on pcp**) and Private (+4%) advertising segments. t
Slide 5: Carsales Today
CARSALES TODAY carsales is the #1 online automotive advertising business in Australia, with a growing global presence in Asia and Latin America. AUSTRALIA INTERNATIONAL ASIA LATIN AMERICA • #1 online automotive • #1 online automotive classifieds business in classifieds businesses in South Korea Braz
Slide 6: Key Operational Highlights
KEY OPERATIONAL HIGHLIGHTS carsales is one of the largest digital automotive advertising businesses in the world. >1 billion user sessions 2.47x more time spent on carsales.com.au than nearest competitor per annum on all carsales sites around the world¹ in Australia² >32,500 car dealer >144,000 insp
Slide 7: Group Financial Review
GROUP FINANCIAL REVIEW 7
Slide 8: Strong track record of sustained growth
STRONG TRACK RECORD OF SUSTAINED GROWTH Well positioned to continue delivering long term shareholder value through world-class capability, exposure to international growth markets and investment in new products and services. Revenue ($m) Adjusted EBITDA ($m)* Adjusted NPAT ($m)* CAGR CAGR CAGR 13% 1
Slide 9: Summary Revenue & EBITDA Performance
SUMMARY REVENUE & EBITDA PERFORMANCE Revenue Year Ending Full Year Growth 30 June 2019 FY18 FY19 $'s % • Full year revenue up 11% on pcp. strengthened go-to-market proposition. Revenue • Resilient results from our Dealer, Online Advertising 296.8 300.1 3.3 1% Private and ‘Data, Research & • Excellen
Slide 10: Adjusted EBITDA Margin Performance
ADJUSTED EBITDA MARGIN PERFORMANCE Core Adjusted EBITDA margins expanded but were offset by investments in early stage domestic and high growth 1.0% (1.3%) international investments. 52.0% (0.4%) (1.0%) 50.3% • Adjusted EBITDA* margins moved from 52.0% in FY18 to 50.3% in FY19, with domestic core bu
Slide 11: Look Through Summary
LOOK THROUGH SUMMARY Increasingly significant contribution from International portfolio. International now contributes more than 22% of look through revenue and 16% of look through EBITDA. International look through revenue and EBITDA grew 39% and 29% respectively in FY19. Look Through Revenue ($m)
Slide 12: Adjusted Net Profit After Tax Summary
ADJUSTED NET PROFIT AFTER TAX SUMMARY Year Ending $A Millions Growth 30 June 2019 FY18 FY19 % • D&A increased by $4.5m reflecting full year impact of Total revenue 376.9 417.5 11% acquired underlying D&A from SK Encar ($1.9m) and the Total operating expenses 180.8 207.4 (15%) impact of increased dep
Slide 13: Debt and Cash Flow
DEBT AND CASH FLOW Cash Flow** (column) and conversion from EBITDA to cash (line) 250.0 Reported Leverage Ratio* 201.6 140% (Net Debt/Annualised EBITDA ***) 200.0 179.9 167.5 120% 154.5 142.2 150.0 100% FY18 2.00 100.0 100% 100% 101% 98% 92% 80% 50.0 FY19 1.94 60% 0.0 40% FY15 FY16 FY17 FY18 FY19 Ca
Slide 14: Carsales Australia
CARSALES AUSTRALIA 14
Slide 15: Extending our Australian market leadership
EXTENDING OUR AUSTRALIAN MARKET LEADERSHIP Average Daily Unique Audience Market Share* carsales Competitor 1 Competitor 2 Competitor 3 + 1.51x + 1.55x + 1.67x + 1.75x + 1.78x Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 *Nielsen Ratings average daily unique audience per quarter 15
Slide 16: Dealer Performance Summary
DEALER PERFORMANCE SUMMARY Dealer revenue up 7% to $153.9m Depth Reporting $153.9 $144.0 $133.5 $123.8 $112.9 ($m) FY15 FY16 FY17 FY18 FY19 • Solid growth in core Dealer advertising revenue driven by higher used car leads volumes. • Reflected the ongoing strength of the used car market and 7% growth
Slide 17: Private Performance Summary
PRIVATE PERFORMANCE SUMMARY Private revenue up 4% to $82.1m Instant Offer $78.9 $82.1 $65.0 $51.1 $43.0 ($m) FY15 FY16 FY17 FY18 FY19 • Solid growth in core advertising products driven by pricing optimisation and increased premium uptake. • Strong growth in carfacts product, reflecting importance of
Slide 18: Display Performance Summary
DISPLAY PERFORMANCE SUMMARY Display revenue down 13% to $64.1m Refreshed new car offering CAGR 1% $72.9 $73.9 $67.9 $62.8 $64.1 ($m) FY15 FY16 FY17 FY18 FY19 • Display advertising revenue down 13%, albeit with a much improved run rate in Q4. • Reflects challenging advertising environment as a result
Slide 19: Data, Research & Services Performance Summary
DATA, RESEARCH & SERVICES PERFORMANCE SUMMARY DR&S revenue up 2% on pcp to $43.2m Vehicle Appraisal Solutions $42.2 $43.2 $39.3 $35.8 $33.0 FY15 FY16 FY17 FY18 FY19 • H2 revenue growth impacted by intentional exit of low margin products and contracts. Underlying revenue growth of ~9% in FY19 excludi
Slide 20: Carsales International
CARSALES INTERNATIONAL
Slide 21: International Summary
INTERNATIONAL SUMMARY Consolidated Entities Constant $A Millions Growth International - reported results Currency Summary FY18 FY19 $'s % (%)** • Excellent progress in our international expansion strategy Revenue translating into an increasingly significant revenue and SK Encar 26.0 61.0 35.0 135% n
Slide 22: Carsales Asia – SK Encar (Korea)
CARSALES ASIA – SK ENCAR (KOREA) Pro-Forma (100%)* FY18 FY19 PCP Financial commentary: KRWb KRWb % Reported revenue 43.8 49.5 13% • Good performance in first full year of ownership. Reported EBITDA 21.4 24.3 13% • Good growth across all key revenue channels of Dealer, Private and Display. FY19 Reven
Slide 23: SK Encar's Growth Opportunity
SK ENCAR’S GROWTH OPPORTUNITY Large Market Opportunity Australia South Korea GDP Annual Car Sales1 Subscribed Dealers Monthly Site Visits1 ($A trillion) (m) (000) (m) Growth Opportunities • Economic / structural: South Korea is the world’s 12th 2.4 12.1 largest economy, has a high GDP per capita, a
Slide 24: Carsales Latin America – Webmotors (Brazil)
CARSALES LATIN AMERICA – WEBMOTORS (BRAZIL) Pro-Forma (100%) FY18 FY19 PCP Financial commentary: BRLm BRLm % • Outstanding financial performance in FY19 as Webmotors Underlying revenue* 138.5 186.8 35% consolidates its position as the clear no.1 automotive vertical classified site in Brazil. Underly
Slide 25: Webmotors' Growth Opportunity
WEBMOTORS’ GROWTH OPPORTUNITY Substantial Market Opportunity Australia Brazil GDP Annual Car Sales1 Subscribed Dealers Monthly Site Visits1 ($A trillion) (m) (000) (m) Growth Opportunities 2.7 13.3 13.7 • Economic / structural: Brazil is the world’s 8th largest 2.2 25.1 24.0 economy with strong grow
Slide 26: Carsales Latin America
CARSALES LATIN AMERICA Inventory 1 Page Views 2 +8% • Revenue growth primarily driven by dealer FY18 FY19 PCP +1% volume growth and yield expansion. CLPm CLPm % CHILE Reported revenue 2,416 2,821 17% • EBITDA margin impacted by investment in Reported EBITDA 858 865 1% marketing, talent and product i
Slide 27: FY20 Outlook
FY20 OUTLOOK
Slide 28: Performance Outlook - AGM
PERFORMANCE OUTLOOK - AGM Group Outlook We assume a gradual recovery in Australian automotive market conditions across the year, supported by lower interest rates, an improved lending environment, a recovering property sector and recent tax changes. We have seen a solid start to the year in Q1 in ou
Slide 29: Appendix
APPENDIX
Slide 30: Overview of carsales Non-IFRS Financial Information
OVERVIEW OF CARSALES NON-IFRS FINANCIAL INFORMATION What is IFRS and non-IFRS financial with all relevant accounting standards and has Why does carsales disclose non-IFRS information? been subject to either review or audit by financial information in its half year carsales’ external auditors (PwC).
Slide 31: Carsales Look Through P&L Analysis
CARSALES “LOOK THROUGH” P&L ANALYSIS FY18 FY19 Growth Look Look Look % Owned Days Owned Reported Underlying % Owned Days Owned Reported Underlying Reported % Underlying % Through Through Through % Revenue carsales International WebMotors 30% 365 Equity Acc'ted 53.8 16.1 30% 365 Equity Acc'ted 67.8 2
Slide 32: Reconciliation of Reported to Adjusted NPAT
RECONCILIATION OF REPORTED TO ADJUSTED NPAT Year Ending Full Year Growth 30 June 2019 FY18 FY19 $'s % Reported NPAT (continuing operations) 182.3 133.2 (49.1) (27%) Expense Adjustments Restructure cost* - 1.3 FY18 Bad Debt Write-off* - 2.2 Interest Adjustments Option Discounting Unwind 0.3 0.4 Optio
Slide 33: Adjusted Financials
ADJUSTED FINANCIALS $A Millions FY18 FY19 Growth % Year Ending 30 June 2019 Reported Adjustments Adjusted Reported Adjustments Adjusted Reported Adjusted Total revenue 376.9 - 376.9 417.5 - 417.5 11% 11% Total operating expenses 180.8 - 180.8 212.3 (4.9) 207.4 (17%) (15%) EBITDA 196.1 - 196.1 205.2
Slide 34: 34
34