Bapcor Ltd · ASX:BAP
Bapcor — H1 FY2023 Earnings Presentation
41 slides from Bapcor's earnings presentation, Feb 16, 2023
Slide 1: 1H23 Results Presentation
BAPCOR LIMITED (BAP.ASX) 1H23 RESULTS PRESENTATION 16 FEBRUARY 2023
Slide 2: Agenda
Agenda PERFORM 01 1H23 Group Highlights 02 Segment Results 03 1H23 Financial Summary TRANSFORM 04 Better Than Before 05 Outlook 06 Questions & Answers 2
Slide 3: We are Asia Pacific's leading provider of vehicle parts, accessories, equipment, service and solutions
We are Asia Pacific’s leading provider of vehicle parts, accessories, c.$1.8B c.1,000 5,000+ FY22 REVENUE LOCATIONS IN TEAM MEMBERS equipment, service and AUSTRALIA, NEW ZEALAND AND solutions THAILAND Australia's leading trade Industry leaders in Premium parts and Services New Zealand’s Trusted prov
Slide 4: The automotive aftermarkets remain strong, resilient and continue to offer attractive growth opportunities
The automotive aftermarkets remain strong, resilient and continue to offer attractive growth opportunities Average Australian Vehicle Age1 Australian number of Vehicles2 AUS CAR PARC (Years) ('M) > No. of vehicles – 20m 11 10.9 21.8 > New cars sold p.a. – 1.1m 22 10.6 > Ave. age of vehicles – 11 yea
Slide 5: 1H23 Group Highlights
PERFORM 1H23 Group Highlights Noel Meehan CEO and Managing Director 5
Slide 6: 1H23 Group Highlights
1H23 Group Highlights Progress in line with expectations Robust operational Board renewal progressed Continued and targeted Ongoing focus on capital performance, in line with • Kate Spargo expansion of store network efficiency previous updates • Brad Soller • 31 additional company- • Overall invento
Slide 7: 1H23 Key Performance Indicators
1H23 Key Performance Indicators REVENUE EBITDA1 EBIT1 NPAT1 EPS $1,000.8M $146M $100M $62M 18.3 cents 11.2% vs 1H22 6.7% vs 1H22 4.5% vs 1H22 2.3% vs 1H22 2.3% vs 1H22 13.3% vs 1H21 0.5% vs 1H21 -6.9% vs 1H21 -11.7% vs 1H21 -11.7% vs 1H21 1H23 1H23 PAYOUT RETURN ON CASH NET LEVERAGE DIVIDEND RATIO I
Slide 8: Health, Safety and Wellbeing of our team members remains a key focus
Health, Safety and Wellbeing of our team members remains a key focus INVESTING IN ONE BAPCOR SAFETY CULTURE AND PROGRAM TO MATCH THE SCALE AND MATURITY OF OUR BUSINESS SAFETY PERFORMANCE - TRIFR1 › Health, Safety and Wellbeing capability and resources investment has continued in 1H23 30.13 Improving
Slide 9: Segment Results
PERFORM Segment Results Executive General Managers 9
Slide 10: Segment Overview
Segment Overview › Diversified business structure enabling record Group revenue of $1.0b, with strong growth in all Australian segments › Healthy long-term EBITDA margins, with strong performances in Trade and Wholesale partially offsetting temporary margin compression in Retail and New Zealand Reve
Slide 11: Segment Overview
Segment Overview THAILAND Asia Pacific Footprint 6 6 NT Revenue by type 12 4 4 4 10% QLD 182 50 46 86 10% WA 77 17 20 40 ACT SA 7 77 3 2 2 17 10 50 NSW 179 VIC 56 44 79 80% Trade 202 63 45 94 Specialist Wholesale Non discretionary – Trade & Wholesale NZ Retail TAS 219 Non discretionary – Retail 18 O
Slide 12: Trade
Trade Revenue EBITDA › Australia’s leading distributor of vehicle parts and equipment solutions to Trade customers via the $374M $60M Burson, Precision and Blacktown Auto businesses; +14.9% vs 1H22 +15.1% vs 1H22 emerging Burson footprint in Thailand +18.1% vs 1H21 +4.9% vs 1H21 › Good top-line grow
Slide 13: Specialist Wholesale
Specialist Wholesale EBITDA › Importer, aggregator and internal distributor for all of Bapcor; and industry leader supplying market $50M leading brands across specialised categories in +6.9% vs 1H22 Australia Revenue +11.6% vs 1H21 $378M › Solid revenue & EBITDA growth over 1H22 with +10.7% vs 1H22
Slide 14: Retail
Retail Revenue EBITDA › Full-offer retailer and service centre providing leading omni-channel customer experience through $220M $35M the Autobarn, Autopro, CarParts, Opposite Lock, +11.5% vs 1H22 +4.9% vs 1H22 Midas and ABS brands across Australia +5.4% vs 1H21 -11.5% vs 1H21 › Revenue 11.5% and EBI
Slide 15: New Zealand
New Zealand Revenue EBITDA › Integrated trade and specialist wholesale group of businesses providing leading parts and equipment $86M $13M solutions across New Zealand -0.3% vs 1H22 -16.4% vs 1H22 +0.2% vs 1H21 -16.0% vs 1H21 › Strong same store sales leading to stable revenue, despite reduced servi
Slide 16: Supply Chain
Supply Chain Network › Further improvement in supply rates supporting progress in increasing inventory turns Distribution Centre Victoria (DCV) › Emergency order fulfilment rates averaging ~99% through 1H23 › Bearing Wholesalers and Federal Batteries successfully transitioned in 1H23 with New Distri
Slide 17: 1H23 Financial Summary
PERFORM 1H23 Financial Summary Stefan Camphausen CFO 17
Slide 18: Income Statement
Income Statement $M 1H23 1H22 % change › Strong revenue growth of 11.2%, benefitting from REVENUE 1,000.8 900.1 11.2% resilience in the Australian automotive aftermarket EBITDA 146.3 137.2 6.7% and robust same-store sales in all segments Depreciation and amortisation (46.8) (42.0) 11.6% EBIT 99.5 95
Slide 19: Cash Flow
Cash Flow $M 1H23 1H22 EBITDA 146.3 137.2 › Operating Cash Flow increased to $99.2m, up 4.1% Operating Cash Flow 99.2 95.2 compared to previous year Cash conversion % 67.8% 69.4% Interest Transaction/ transformation/ restructuring costs (5.9) (6.5) (4.1) (5.9) › Cash conversion of 67.8%, up from ear
Slide 20: Balance Sheet
Balance Sheet $M 31-Dec-22 30-Jun-22 › Pro-Forma net debt at 31 December 2022 of CCCCCC $329.1m and leverage ratio of 1.45x well within Cash 41.9 80.2 Trade and other receivables 227.8 209.8 debt capacity Inventories 561.7 538.7 PP&E 120.1 106.9 › Sound financial position provides Bapcor with Other
Slide 21: Dividends
Dividends DIVIDENDS (CPS) 21.5 › Fully franked interim dividend of 10.5 cents per share, 20.0 up 5% compared to 1H22 17.5 15.5 17.0 › 1H23 payout ratio of 57.5% 11.5 13.0 9.5 11.0 › Record date: 28 February 2023 11.0 9.5 8.5 8.7 7.5 › Payment date: 17 March 2023 6.0 4.7 › Dividend reinvestment plan
Slide 22: Better Than Before
TRANSFORM Better Than Before Noel Meehan CEO and Managing Director 22
Slide 23: Better Than Before - the opportunity ahead
Better Than Before - the opportunity ahead Bapcor’s portfolio of businesses has a track record of strong performance, with growth opportunities ahead Bapcor has grown rapidly via acquisitions, but has not leveraged the scale opportunities of a fully integrated business Bapcor currently operates with
Slide 24: Better Than Before: multi-phase transformation to enable additional, sustainable growth
PHASE 1 DIAGNOSTICS Better Than Before: multi- BETTER THAN BEFORE phase transformation to enable additional, PHASE 2 sustainable growth COMMITMENT Bapcor holds a strong position in an attractive market with resilient results and sustained growth: › However, there is still room for improvement across
Slide 25: Better Than Before program with ambitious targets, enabled by targeted investments
Better Than Before program with ambitious targets, enabled by targeted investments › Unchanged goal of: › Transformation Kick-Start one-off opex of $7.6m to date, in line with previous update › >$100m Net EBIT Benefit › Initial capital expenditure expected in 2H23, in line › >12% Return on Invested
Slide 26: Better Than Before – our emerging scorecard
Better Than Before – our emerging scorecard Health Performance Customer Process Organisational Transformation Capital & Customer focus Internal efficiency health uplift returns Our ambition The best place to Achieve at least Create value by Be the first choice for Maximising work within the $100M Ne
Slide 27: Better Than Before – by the numbers
Better Than Before – by the numbers WHAT WE’VE DONE 120+ 690+ 350+ 5,000+ Team members with Initiatives assessed since Change management Team members affected initiative ownership inception milestones by BTB 16 290+ 170+ 3,400+ Specific OHI initiatives Initiatives progressed Participants completed M
Slide 28: 1H23 Better Than Before execution update
1H23 Better Than Before execution update Overall program Kick-off of pilot Specific incentive plan Appointment of EGM moved forward from initiatives in for Better Than Before Strategy & planning to Procurement in 2H23: being established: Transformation with implementation & • Deeper & more • Bapcor-
Slide 29: Outlook
Outlook Noel Meehan CEO and Managing Director 29
Slide 30: Outlook
Outlook Robust performance in 1H23 with Ongoing focus on growth in revenue and profit and operational health, safety and improving intra-period capital wellbeing as well as team efficiency member development Bapcor continues to expect and training a solid underlying1 performance in FY23 with slight
Slide 31: Thank you & Questions and Answers
Thank you & Questions and Answers 31
Slide 32: Appendix / Reconciliations
Appendix / Reconciliations 32
Slide 33: Statutory to Pro Forma reconciliation
Statutory to Pro Forma reconciliation H1 FY23 Consolidated › The table reconciles the pro forma results to the statutory results $M Statutory DC Consolidation Transformation Tax Pro-Forma Revenue 1,008.8 1,000.8 EBITDA 137.8 0.9 7.6 146.3 › These tables are subject to rounding D&A (48.0) 1.2 (46.8)
Slide 34: Leverage and segment reconciliation
Leverage and segment reconciliation › The following tables reconcile statutory to pro forma net debt, statutory EBITDA to pre-AASB16 EBITDA and the Net Leverage calculation Consolidated Consolidated Consolidated $M 30 Dec 22 30 Jun 22 $M H1 FY23 H1 FY22 $M H1 FY23 H1 FY22 Cash and cash equivalents 4
Slide 35: ROIC reconciliation
ROIC reconciliation › The following tables reconcile P&L and balance sheet to the Return on Invested Capital calculation Consolidated $M H1 FY23 H1 FY22 Proforma EBIT 198.5 189.1 Proforma EBIT after tax (A) 138.9 132.3 Proforma Net Debt (268.1) (205.3) Equity (1,092.3) (1,067.4) Total (B) (1,360.3)
Slide 36: Debt facilities and maturity profile
Debt facilities and maturity profile > Debt facilities and maturity profile provide Bapcor with financial flexibility to implement BTB, pursue acquisition opportunities and invest in growth $329.1M >$100.0M ~2.5 years 1.45x PRO FORMA NET DEBT UNDRAWN COMMITTED AVERAGE REMAINING NET LEVERAGE RATIO FA
Slide 37: Our unique automotive aftermarket ecosystem
Our unique automotive aftermarket ecosystem Consumer Service Australia/ Thailand/ NZ Trade Retail SUPPLY CHAIN Wholesale Manufacturers Vertically integrated network and specialist go-to-market channels creating competitive advantage 37
Slide 38: Bapcor Values
WE DO THE RIGHT THING We are open, honest and respectful. We do what we say and say what we do. WE ARE IN IT TOGETHER We’re all part of the Bapcor family. We support each other, include everyone and have fun along the way. WE GIVE A DAMN We care about what we do and are proud of how we do it. We are
Slide 39: Environmental, Social and Governance
Environmental, Social and Governance POSITIVELY IMPACT ENVIRONMENTAL ETHICAL SUPPLY GOOD GOVERNANCE – OUR COMMUNITY SUSTAINABILITY CHAIN/PROCUREMENT SUPPORTING AND DEVELOPING OUR PEOPLE › Stakeholder › Efficiently use our › Ethical sourcing and › Live our values engagement resources supply chain › H
Slide 40: Disclaimer
Disclaimer The material in this presentation has been prepared by Bapcor Limited (“Bapcor”) ABN 80 153 199 912 and is general background information about Bapcor’s activities current at the date of this presentation. The information is given in summary form and does not purport to be complete. Infor
Slide 41: Asia Pacific's leading provider of vehicle parts, accessories, equipment, service and solutions
Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions