Slide 1: IMS and strategy update
2017 IMS and strategy update THE LEADING AUTOMOTIVE ONLINE RETAILER Pendragon PLC 2017 1
Slide 2: Pendragon PLC businesses
Pendragon PLC aA Businesses > UK Motor Sale/Servicing of vehicles in the UK Software Software solutions for retailers US Motor Sale/Servicing of vehicles in the US Leasing Vehicle leasing and fleet in the UK Ne Pendragon PLC 2017
Slide 3: We believe this strategy will provide more reliable and sustainable earnings
“We believe this strategy will provide more reliable and sustainable earnings” Used Cars and Aftersales Servicing • Invest in capacity and leadership to double used car revenue over 5 years to 2021. UK New car business • Allocate capital in our premium brands only where we see strong future prospect
Slide 4: Quarter 3 trading financial highlights compared to the prior year
Quarter 3 trading financial highlights compared to the prior year All figures stated on a like for like basis • Revenue grew by 3.7% in the period with used revenue growth of 18.1%. For the year to date our revenue has grown by 6.7% with used revenue growth of 21.1%. • New gross profit reduced by 20
Slide 5: Quarter 3 trading financial highlights (continued)
Quarter 3 trading financial highlights compared to the prior year (continued) • During the period we completed the acquisition of Chevrolet Puente Hills, California for a consideration of £17.7m. This will be immediately earnings enhancing. • Overall in the quarter, underlying like for like profit b
Slide 6: Financial and strategy update
Financial and strategy update THE LEADING AUTOMOTIVE ONLINE RETAILER Pendragon PLC 2017 6
Slide 7: Sector Focus: Used Cars
Sector Focus Used Cars Selling of all non-new vehicles Pendragon PLC 2017 7
Slide 8: Strategy summary
Strategy summary • We remain committed to our strategic goal to double used car revenue over the five years to 2021 and in order to maintain growth in our used car and aftersales business we will continue to invest in capacity across the UK in both of these areas. • In order to enhance and accelerat
Slide 9: Used Summary
Used Summary • Used market share growth continues to be a key strategic % Last Year L4L priority for the Group. Used like for like revenue grew by 18.1%. Gross profit (including the impact of pre- Revenue 18.1% registration and demonstrator sales) is up 2.1% for the year to date in spite of a reduct
Slide 10: Sector Focus: Aftersales
Sector Focus Aftersales Service, maintenance and repair of vehicles Pendragon PLC 2017 10
Slide 11: Aftersales Summary
Summary • 0-6 year car parc forecast to continue growing until 2020 • Grow aftersales by investing in capacity across the UK, selling more vehicles, retaining more customers and outperforming the market • Utilise our online fulfilment platform to improve our experience for customers and drive effici
Slide 12: Aftersales Summary
Aftersales Summary % Last • Aftersales is our largest profit contributor. Year L4L • Gross profit fell by 3.0% in the period on a like for like Revenue -2.3% basis, albeit with one less working day. Gross Profit -3.0% • Overall year to date gross profit is up 3.0%. Gross Margin % -0.4% • The Group i
Slide 13: UK New Car business and US Motor Group
Sector Focus UK New Car business and US Motor Group Selling of new vehicles (1st registration) Pendragon PLC 2017 13
Slide 14: New Cars and US Motor Group
New Cars • We are conducting a strategic review of the premium brands to evaluate by manufacturer the investment appeal of their franchise proposition • We will review capital requirements by manufacturer and only allocate capital where we see strong prospects for reliable returns US Motor Group • T
Slide 15: New Summary
New Summary % Last • New gross profit fell by 20.7% in the period on a like for Year L4L like basis and by 10.2% for the year to date on a like for like basis. During Q3 total UK market registrations fell by Revenue -9.5% 8.9% whereas retail registrations fell by 8.5%. On a year to date basis total
Slide 16: Software business (Pinewood.co.uk)
• Our Software business (Pinewood.co.uk) is a unique asset in our industry with a global opportunity. • It is an online fulfilment platform for the sale and servicing of vehicles for retailers and manufacturers. • We are placing this asset at the heart of our business as a strategic priority and as
Slide 17: H1 2017 & FY2017 guidance Profit Bridge
H1 2017 & FY2017 guidance Profit Bridge £m £100.0 4 £90.0 4 £80.0 4 £70.0 + ] | £60.0 e169) “#8” sea8p 460.0) | £50.0 4 £5.20 (£8.0). $3.0 £40.0 Es) —f£0.7— “E6= = £30.0 4 £20.0 | —20w £48.5 £10.0 + H1 2017 H12016 Aftersales © Used Used MarginNew VolumeNew Margin Direct Indirect Software Leasing —In
Slide 18: 2018 Guidance Assumptions
2018 Guidance Assumptions Area Sub-Area Comments Expectation of a further decline in H1 of 2018, with H2 flat in New Revenue 2018. Overall market back 2.7% New Margin Margin back to normalised levels Used Revenue Expectation of at least double digit growth Used Margin Returning to H1 2017 used gross
Slide 19: We believe this strategy will provide more reliable and sustainable earnings
“We believe this strategy will provide more reliable and sustainable earnings” Used Cars and Aftersales Servicing • Invest in capacity and leadership to double used car revenue over 5 years to 2021. UK New car business • Allocate capital in our premium brands only where we see strong future prospect