Autocanada Inc. · TSX:ACQ
Autocanada — Investor Presentation (November 2006)
18 slides from Autocanada's investor presentation, November 2006
Slide 1: Investor Update
Investor Update November 2006
Slide 2: Presentation Agenda
Presentation Agenda Business overview Financial review Outlook and growth strategies
Slide 3: 31/10 Tax Announcement
31/10 Tax Announcement No impact on operating business No change to current distribution policy Target 85% payout ratio on annual basis No impact on growth strategy Balance sheet strength provides flexibility $20 million cash + $50 million acquisition line of credit Minimal long-term d
Slide 4: Now 16 Dealerships in 6 Provinces
Now 16 Dealerships in 6 Provinces Yukon Nunavut N.W.T. EDMONTON Sherwood Park Hyundai “Open GRANDE PRAIRIE Point” opened in Grande Prairie Chrysler Nov. 06 Newfoundland and Subaru North Labrador Grande Prairie Hyundai EDMONTON Crosstown Chrysler Manitoba PRINCE GEORGE Capital Dodge Northland Dodge T
Slide 5: Large and Growing Market
Large and Growing Market Canada outperforming U.S. Canadian new vehicle sales up 2.9% in Q3 AutoCanada brands selling well DaimlerChrysler sales up 0.8% in Q3 Hyundai sales up 10.4% in Q3 Growth strongest in core Western Canadian market Both manufacturers have strong 2007 product offer
Slide 6: The Dealership Advantage
The Dealership Advantage Dealership Groups: Manufacturers: 4 income streams 1 income stream Multiple brands 1 brand Variable cost structure Fixed cost structure Low capital requirements High capital requirements Require high product volumes Consumer demand independent to keep uni
Slide 7: AutoCanada Outperforms
AutoCanada Outperforms AutoCanada vs. Industry Average Annual new vehicle sales / dealership: 802 vs. 450 Used vehicle sales ratio: 90 / 100 new vs. 60 / 100 new Absorption rate: 95% vs. 70% Higher finance and insurance margins due to volume buying Based on full-year 2005 results
Slide 8: Retail Sales
Retail Sales units 25 New Retail Used Retail 20 17,240 +42% 15 13,588 13,477 8,045 11,045 9,905 6,085 9,542 10 6,535 5,038 6,245 4,789 4,126 4,926 5 2,997 9,195 2,335 7,503 6,942 6,007 5,416 5,116 2,591 3,248 0 2001 2002 2003 2004 2005 2005 Pro Forma 30/09/2005 30/09/2006
Slide 9: Revenue
Revenue $ millions 700 $627.8 +44% New Vehicle Used Vehicle 26.5 600 Parts & Service 67.6 $517.6 500 F&I $485.6 26.8 22.7 $395.5 56.5 54.3 180.1 400 16.0 $358.5 $324.1 49.8 128.9 16.2 155.2 13.3 39.0 300 $227.1 44.5 106.1 92.6 $177.3 8.8 87.1 200 7.1 26.3 353.6 18.8 62.1 45.7 279.7 279.2 223.6 100 1
Slide 10: Gross Profit
Gross Profit $ millions 125 New Vehicle +54% Used Vehicle Parts & Service 100 F&I $90.7 $84.2 $76.4 24.7 75 25.4 21.2 $57.3 $54.8 $48.9 14.6 50 29.0 15.5 25.4 11.7 23.7 $33.5 19.5 $24.4 8.4 17.6 16.2 17.0 25 6.8 12.5 14.5 11.2 8.5 8.8 7.4 8.2 5.1 19.0 20.8 19.0 3.6 14.7 13.6 8.8 11.4 6.6 0 2001 2002
Slide 11: Adjusted EBITDA
Adjusted EBITDA $ millions 25 $22.2 20 $18.2 +24% $16.1 15 $13.0 $10.5 10 $9.2 $9.6 $7.1 5 0 2001 2002 2003 2004 2005 2005 30/09/2005 30/09/2006 Pro Forma 1. 2005 results are for Canada One Auto Group (CAG) the Fund’s predecessor 2. 2006 results represent a compilation of results for CAG for the per
Slide 12: Distributable Cash
Distributable Cash May 11 - Sept. 30, 2006 $ / unit Distributable cash generated per unit $0.525 / unit Cash distributions declared $0.39 / unit Payout ratio since inception 74.3% On-track to meet target 85% distribution ratio on annual basis
Slide 13: Growth Strategy Update
Growth Strategy Update 1. Acquire existing franchised auto dealerships Acquired Victoria Hyundai in October ‘06 Enhances geographic and brand diversification Increases new car sales by approximately 460 units Adds 10 service bays Balance sheet strength and fragmented industry provide numer
Slide 14: Growth Strategy Update
Growth Strategy Update Recent Development DaimlerChrysler has increased AutoCanada concentration cap from 5% to 8% of total Canadian market Provides potential to sell 6,000 more new D/C vehicles Represents 7 more dealerships
Slide 15: Growth Strategy Update
Growth Strategy Update 2. Continue growing same-store sales and profits Same-store sales up 3.8% in Q3 and 2.6% y.t.d. Adding 23 service bays at Grande Prairie and Prince George dealerships Increasing no. of technicians and operating hours at other dealerships Service expansion projects to b
Slide 16: Growth Strategy Update
Growth Strategy Update 3. Open new dealerships (“Open Points”) Opened Sherwood Park Hyundai in Edmonton on Nov. 15th Expected to increase new car sales by 600 units Adds 10 service bays 2nd “open point” under construction toward Q1 ‘07 opening 3rd has building approval and is expected to o
Slide 17: Key Strengths
Key Strengths Proven business model and growth strategy Portfolio of leading brands targeted to local markets Demonstrated ability to identify, integrate and enhance acquisitions Western Canada focus Balance sheet capacity Experienced, incentivized management team
Slide 18: U.S. Publicly Traded Franchised Automobile Dealerships
U.S. Publicly Traded Franchised Automobile Dealerships (in millions of stated currency, except for Unit Price, or as otherwise noted) (4) Price Market Price / Earnings EV / EBITDA Dividend (1) (2) (3) (3) (3) (3) Nov. 17, 2006 Cap. EV 2006E 2007E 2006E 2007E Yield Asbury Automotive Group, Inc. C$ $2