Eagers Automotive Limited · ASX:APE
Eagers Automotive — FY2017 Earnings Presentation
38 slides from Eagers Automotive's earnings presentation, Feb 21, 2018
Slide 1: 2017 Full Year Results Presentation
For personal use only 2017 Full Year Results February 2018 Presentation 2017 Full Year Results Presentation 21/02/2018 1
Slide 2: 2017 Full Year Highlights
2017 Full Year Highlights For personal use only • Statutory profit before tax $135.6m, down 4% • Record underlying profit before tax $140.8m, up 2% • Statutory (basic) EPS of 50.3 cents, a decrease of 9% • Record full year dividend of 36 cents, up 3% • Record results from VIC / TAS / NSW Hunter / NT
Slide 3: National Vehicle Sales
National Vehicle Sales Historical National Vehicle Sales For personal use only 1,300,000 1,200,000 1,100,000 All Other Brands 1,000,000 Mercedes Benz Kia 900,000 Honda 800,000 Subaru 700,000 Volkswagen 600,000 Mitsubishi Nissan 500,000 Ford 400,000 Hyundai 300,000 Mazda 200,000 Holden Toyota 100,000
Slide 4: Australian New Vehicle Sales – 2017
Australian New Vehicle Sales – 2017 For personal use only Total Australian Market Share by State • New vehicle market up 0.9% (VFACTS) ACT 2% • 3rd record year in a row WA 8% • WA down 2.5%; ACT down 1.5%; NSW down 0.1% NSW 33% VIC 28% • VIC up 4.0%; SA up 1.0%; • QLD remains static SA QLD NT 1% • L
Slide 5: Exchange Rates / New Vehicle Sales by Country of Origin
Exchange Rates New Vehicle Sales (VFACTS) For personal use only by Country of Origin 5% 4% 5% 29% Japan Thailand 15% Germany England Rest of Europe Korea 7% Australia USA 3% Rest of World 25% 7% Total market: 1,189,116 vehicles 2017 Full Year Results Presentation 21/02/2018 5
Slide 6: Affordability
Affordability For personal use only 2017 Full Year Results Presentation 21/02/2018 6
Slide 7: APE Vehicle Sales - 2017
APE Vehicle Sales - 2017 APE Used Vehicle Sales by State For personal use only APE New Vehicle Sales by State Total 60,249 + 2.1% (5.1% of National Market) Total 24,081 +0.7% (est. 1.0% of National Market) 4% 3% 5% 10% 13% 5% 21% 3% 5% 17% 4% 24% 42% 44% Cars - NSW Cars - NT Cars - QLD Retail Cars -
Slide 8: 2017 Full Year Highlights - Financial
2017 Full Year Highlights - Financial For personal use only • Statutory (basic) EPS of 50.3 cents, a decrease of 9% • Record fully franked final dividend of 22.5 cents, up 2% • Record underlying(1) net profit before tax of $140.8m, up 2% • Cash flow from operations increased to $145.0m, up 32% • Con
Slide 9: Financial Summary
Financial Summary For personal use only $ Million 2017 2016 Change Revenue 4,058.8 3,833.2 Up 6% EBITDA 176.7 179.8 Down -2% EBIT 160.2 165.8 Down -3% PBT 135.6 141.4 Down -4% PAT 98.2 105.5 Down -7% Cash from operating activities 145.0 109.8 Up 32% NTA/share 2.49 2.44 Up 2% Net gearing excluding ba
Slide 10: Balance Sheet - Summary
Balance Sheet - Summary For personal use only 2017 • New vehicle inventory funded by bailment ($M) debt CA - CL (excl. held for sale) 80.7 • Parts and most used vehicle inventory is balance sheet funded Freehold Property (incl. held for sale) 306.6 Other Non Current Tangible Assets 66.8 • Increased
Slide 11: Earnings Per Share
Earnings Per Share For personal use only EPS Bridge 56.0 55.4 5.4 55.0 54.0 6.3 1.7 53.0 0.8 52.0 Cents 0.9 51.0 50.3 2.7 50.0 49.0 48.0 0.2 47.0 2016 Operational Restructuring AHG Profit on Sale SOH, Tax expense Dilution 2017 Result Costs Investment Property / Impairment, (net of interest) Investme
Slide 12: Financial Summary – Cashflow Comparison
Financial Summary – Cashflow Comparison For personal use only Cash Flow Bridge 250.0 190.6 24.6 200.0 21.0 68.0 150.0 37.5 34.3 $ Million 3.0 90.1 100.0 50.0 17.6 10.8 - Operating Earnings is EBITDA Underlying excluding profit/loss on sale of assets and 2017 Full Year Results Presentation 21/02/2018
Slide 13: Financial Trends – Underlying PBT
Financial Trends – Underlying PBT For personal use only Financial Trends: Underlying PBT 100.0 Operating Earnings (EBITDA) * PBT Underlying ** 88.5 90.0 85.4 82.9 80.8 80.0 78.1 76.3 70.1 70.9 72.5 68.0 66.6 68.3 70.0 61.1 61.9 59.0 57.8 60.1 58.5 $ million 60.0 54.2 52.1 50.0 44.2 45.3 46.1 40.6 41
Slide 14: Financial Trends – Operating Margin
Financial Trends – Operating Margin For personal use only Operating Margin Operating Earnings Margin % Linear (Operating Earnings Margin %) 5.0% 4.8% 4.6% 4.6% 4.5% 4.4% 4.5% 4.3% 4.1% 4.0% 4.0% Percentage 3.9% 4.0% 3.5% 3.6% 3.0% 2.5% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 * Operati
Slide 15: Financial Trends - EPS
Financial Trends - EPS For personal use only EPS Statutory (Basic) June - first 6 months December - second 6 months 60.0 55.4 50.3 50.0 47.6 43.0 40.0 29.2 36.4 24.9 Government 34.0 23.1 stimulus Cents 30.0 24.3 25.5 18.2 24.4 17.7 21.0 20.0 13.0 GFC/ 13.4 Lehman Bros 10.4 24.5 26.2 25.4 9.8 10.0 18
Slide 16: Financial Trends - Dividend
Financial Trends - Dividend For personal use only Dividend 40.0 Interim Dividend Final Dividend 36.0 35.0 35.0 32.0 30.0 27.0 25.0 22.5 23.0 22.0 Cents per Share 20.0 20.0 20.0 18.0 16.0 15.0 15.0 12.4 12.8 13.0 11.6 8.8 10.4 10.0 8.6 7.6 8.2 6.6 7.2 7.2 8.0 4.8 4.4 13.0 13.5 4.0 12.0 5.0 3.6 3.8 8.
Slide 17: Segment Results
Segment Results For personal use only Car retailing Segment Contributions Record results in VIC and TAS 2016 2017 operations and NSW Hunter region, 160.0 challenging market conditions impacted 141.4 SA and QLD. Strong trading in parts and 140.0 135.6 service 120.0 104.6 Truck retailing 100.0 Record
Slide 18: Segment Results – Car Retailing
Segment Results – Car Retailing For personal use only 2017 2016 ($M) ($M) • Segment Underlying profit before tax of $89.6m (excludes $5.2m of one-off Revenue 3,661.6 3,449.7 and re-structuring costs), down from $100.2m in 2016 (excludes $4.4m of GST refunds) Segment Profit before Tax 84.4 104.6 • Re
Slide 19: Restructure - Car Business Operations
Restructure - Car Business Operations For personal use only • Car Segment results impacted by the restructuring of 7 underperforming and unsustainable business operations • 2017 result included • $5.2 million of costs associated with restructure of 7 businesses • $4.5 million of trading losses assoc
Slide 20: Segment Results – Truck Retailing
Segment Results – Truck Retailing For personal use only 2017 2016 ($M) ($M) • Record results in 2017, divestment of Sydney Truck Centre. Significantly Revenue 381.7 363.8 improved return on assets Segment Profit before Tax 9.0 6.3 • Segment represents 9.5% of revenue and 2.0% of net assets Total Ass
Slide 21: Segment Results – Property
Segment Results – Property For personal use only 2017 2016 ($M) ($M) • Divestment of 5 properties sold in 2017, 2 unused and 2 non-core and 1 to rectify a Revenue 27.5 30.3 complicated lease Segment Profit before Tax 26.6 17.4 • Revaluation gain of $5.6m, including Revaluation surplus/deficit $0.2m
Slide 22: Segment Results – Investments
Segment Results – Investments For personal use only 2017 2016 ($M) ($M) • Substantial asset balance providing stable returns Revenue 14.5 14.4 Segment Profit before Tax 14.5 14.8 • Profit before tax excludes unrealised revaluation loss on investments Revaluation surplus/deficit (22.9) (38.8) before
Slide 23: AHG Investment
AHG Investment For personal use only • 78,968,429 shares (23.8%) valued at $287.4m at $3.64 (31/12/17) • Unrealised revaluation loss of $22.9m in investment segment $3.64 (Dec17) v. $3.95 (Dec 16) • 12.65m new shares acquired in 2017 costing $48.5m plus 3.74m new shares acquired in 2018 costing $13.
Slide 24: Customers rate us STARS on their Carzoos experience
Customers rate us 5 STARS on their Carzoos experience For personal use only Carzoos Carsales TrustScore (0-10) 9.1 7.5 Source: Trustpilot.com as at February 19th 2018. 2017 Full Year Results Presentation 21/02/2018 24
Slide 25: CARZOOS
CARZOOS For personal use only 2017 Full Year Results Presentation 21/02/2018 25
Slide 26: Flexible Land and Building Portfolio
Flexible Land and Building Portfolio For personal use only • 40 Properties (QLD / NSW / VIC / SA) owned $307m (35%) • 173 Leased Properties nationwide approx. value $566m (65%) • Average lease expiry 3 years 3 months • (Adjusted to reflect $ value) Average lease expiry 3 years 6 months • Automotive
Slide 27: BNE Auto Mall, Brisbane Airport
BNE Auto Mall, Brisbane Airport For personal use only 2017 Full Year Results Presentation 21/02/2018 27
Slide 28: Outlook and Strategy
Outlook and Strategy For personal use only • Complete portfolio adjustments related to underperforming operations • Grow EPS from (2016 & 2017) acquisitions inline with historical trends • Continue to redevelop and reorganise our inner City Brisbane facilities to provide improved long term solutions
Slide 29: Outlook and Strategy
Outlook and Strategy For personal use only • Take advantage of value added acquisition opportunities as they present themselves • Carzoos continues to be a focus as we refine the business model to ensure scalability benefits can be realised and maximised in the mid-term • Continue to invest in alter
Slide 30: Disclaimer
Disclaimer For personal use only • The information in this document (information) does not contain all information necessary for investment decisions, is not intended to be an offer, invitation or recommendation with respect to shares, is not financial product advice, and is intended to be general b
Slide 31: Appendix
For personal use only Appendix 2017 Full Year Results Presentation 21/02/2018 31
Slide 32: A.P. Eagers Company Profile
For personal use only A.P. Eagers COMPANY PROFILE 2017 Full Year Results Presentation 21/02/2018 32
Slide 33: AP Eagers Today (December 2017)
AP Eagers Today (December 2017) For personal use only • 105 year old automotive retail group founded in 1913 (January 2018) • 61 years as a listed public company – dividend paid every year • A.P. Eagers owns $307m of prime real estate • Represents all 20 of the top 20 selling vehicle brands in Austr
Slide 34: AP Eagers Volume Car Brands
AP Eagers Volume Car Brands For personal use only Represents 10 of the top 10 selling volume car brands in Australia 2017 Full Year Results Presentation 21/02/2018 34
Slide 35: AP Eagers Luxury Car Brands
AP Eagers Luxury* Car Brands For personal use only Represents 10 of the top 11 selling luxury car brands in Australia * Luxury is defined as luxury vehicle selling more than 500 units annually (V Facts) 2017 Full Year Results Presentation 21/02/2018 35
Slide 36: AP Eagers Truck and Bus Brands
AP Eagers Truck and Bus Brands For personal use only Representing 11 truck and bus brands 2017 Full Year Results Presentation 21/02/2018 36
Slide 37: Revenue by State / % of group Revenue
Revenue by State / % of group Revenue For personal use only AP Eagers $4.06 billion revenue $0.15bn (4%) $1.83bn (45%) $0.0bn $0.66bn (16%) $0.78bn (19%) $0.44bn (11%) $0.20bn (5%) 2017 Full Year Results Presentation 21/02/2018 37
Slide 38: Income Opportunity Franchised Dealership
Income Opportunity Franchised Dealership For personal use only NEW CAR SALES: + Accessories + Finance + Insurance + Car Care + Trade-In USED CAR SALES: + Accessories + Finance + Insurance + Car Care + Trade-In VEHICLE SERVICE: - Value add products i.e. Tyres, wheel alignments, batteries, wiper blade