Pinewood Technologies Group Plc · LSE:PINE
Pinewood Technologies — Pendragon — Investor Presentation (September 2020)
34 slides from Pinewood Technologies's investor presentation, September 2020
Slide 1: Pendragon Group Strategy Investor Presentation
PENDRAGON GROUP STRATEGY INVESTOR PRESENTATION SEPTEMBER 2020
Slide 2: Introduction
Introduction • Pendragon announces its vision and associated strategy to: “Transform automotive retail through digital innovation and operational excellence” • The strategy is underpinned by a comprehensive review of both external market dynamics and business performance by individual division • The
Slide 3: Leadership team & Board: Now stabilised, providing highly valuable skills and experience
Leadership team & Board: Now stabilised, providing highly valuable skills and experience Executive Board Non-Executive Directors Bill Berman, CEO & Interim Chairman • Executive leadership of the Board. Driver of Mike Wright Nikki Flanders Group strategy and development • Previously President and COO
Slide 4: Agenda
Agenda 1. Division overview & outlook 2. COVID-19 3. Group strategy 4. Financial targets 5. Summary 4
Slide 5: Division overview & outlook
Division overview & outlook 5
Slide 6: Franchised UK Motor
Franchised UK Motor Franchised UK Motor (e.g., Stratstone / Outlook Evans Halshaw) ‘V-Shaped’ recovery in new vehicle sales is forecast New, and OEM Overview approved used, vehicle New Car Forecast1, Jan 2020 New Car Forecast1, Jul 2020 sales and aftersales. 000s 000s -3% +1% -31% +27% Partners for
Slide 7: Standalone used cars
Standalone used cars Standalone used cars Outlook Used impact not likely to be as severe as new Currently operating Overview under the Car Store Relative cost Supply New finance Strong start banner, digitally-led used vehicle sales to UK • Less expensive form of • Supply expected to be • Access to f
Slide 8: Pinewood
Pinewood Pinewood Outlook Software business providing Overview a dealer management system (DMS) to the Group and other UK / international Shift to omni-channel supports software growth customers1 • As car dealerships shift to omni-channel propositions to meet consumer demands and trends, software, s
Slide 9: Pendragon Vehicle Management
Pendragon Vehicle Management Pendragon Vehicle Management (PVM) Outlook Fleet and contract hire Overview Medium-term prospects positive for leasing provider. Source of used vehicles for UK Motor / Used Car proposition • Enterprise leasing volumes are expected to grow at a CAGR of 4%1 • Technological
Slide 10: PVM: A stable, high-performing asset and will continue to contribute on a steady-state basis
PVM: A stable, high-performing asset and will continue to contribute on a steady-state basis Key Performance Indicators Market Headroom Opportunity UK New Vehicle Leasing Market1, 2017 – 2019 000s 2018 2019 Change 1,600 1,439 1,452 1,434 1,400 279 286 286 1,200 Revenue £57.3m £64.4m +12.4% 32 28 23
Slide 11: The landscape
The landscape Consumers Competitors • Seismic shifts in the adoption of new digital • Highly fragmented sector. >12,500 dealers of which and low-touch activities during lockdown 50% stock <20 cars, 93% <100 • Before the pandemic, 36% of 2020 car buyers • Pendragon opportunity to use scale & technolo
Slide 12: COVID-19
COVID-19 12
Slide 13: COVID-19: Sector impact
COVID-19: Sector impact Impact of COVID-19 on UK automotive retail • Social distancing measures and Government restrictions led to a closure of all retail sites on March 23 rd, for Pendragon and all UK peers • Cost cutting measures were implemented by many across the sector including making use of t
Slide 14: COVID-19: Pendragon's response
COVID-19: Pendragon’s response 1. Protect cash • Received UK government support: 85% of employees were furloughed; business rates holiday to 2021; VAT deferral position • OEM / funding partners provided stocking finance support • c.200 senior leaders took an average 20% voluntary pay reduction • Cap
Slide 15: Group strategy
Group strategy 15
Slide 16: Our vision
Our vision “Transform automotive retail through digital innovation and operational excellence” 16
Slide 17: Strategy
Strategy 1. Unlock value in 2. Grow and 3. Disrupt standalone Franchised UK Motor diversify Pinewood used cars • Accelerate digital • Deliver material • Re-brand innovation existing order • Differentiate value • Drive operational pipeline proposition excellence & best • Geographic • Scale the physic
Slide 18: 1. Unlock significant value in Franchised UK Motor (1/3)
1. Unlock significant value in Franchised UK Motor (1/3) • Embed finance & insurance products across all digital channels by year end • Develop a used vehicle acquisition and management 1. Accelerate platform to improve current part exchange / Sell Your digital Car journeys innovation • Utilise data
Slide 19: 1. Unlock significant value in Franchised UK Motor (2/3)
1. Unlock significant value in Franchised UK Motor (2/3) • Improved vehicle preparation efficiency and salesforce effectiveness 2. Drive operational • Digital capability and improved execution to drive finance and insurance penetration levels excellence & best practice • Significant aftersales and w
Slide 20: 1. Unlock significant value in Franchised UK Motor (3/3)
1. Unlock significant value in Franchised UK Motor (3/3) • Restructured regional leadership team 3. Operate from a lean • Store closures / efficiency gains resulting in 1,400 roles being removed, driving c.£37m annual benefit and efficient cost base • Further cost opportunities available to improve
Slide 21: 2. Grow and diversify Pinewood (1/3)
2. Grow and diversify Pinewood (1/3) • Deliver existing orders over the next 18 months 1. Deliver material • Growing scale in international user base existing order pipeline • Existing orders add c.80% to current international base and c.10% to total base 21
Slide 22: 2. Grow and diversify Pinewood (2/3)
2. Grow and diversify Pinewood (2/3) • Existing orders unlock further opportunity with a) dealer groups and b) OEMs to be the single in-market DMS provider 2. Geographic expansion • Conversations ongoing • Significant growth potential in international users in next 3-5 years 22
Slide 23: 2. Grow and diversify Pinewood (3/3)
2. Grow and diversify Pinewood (3/3) • Deliver product extension (e.g., used platform) capability, via a cross-functional taskforce, to enable Pendragon 3. Digital product • Sell enhanced capability to existing / new Pinewood extension customers • Explore enabling turn-key digital retail for others
Slide 24: 3. Disrupt standalone used cars (1/3)
3. Disrupt standalone used cars (1/3) • Existing branding not appropriate (i.e., Store) for a digitally-led proposition 1. Re-brand • Revise brand, launch, and implement across existing sites 24
Slide 25: 3. Disrupt standalone used cars (2/3)
3. Disrupt standalone used cars (2/3) • Determine revised customer proposition and operating model to underpin repositioned branding 2. Differentiate • Clear operational separation of the business unit from the value all others in the UK, whilst benefitting from Group proposition synergy • Embed dig
Slide 26: 3. Disrupt standalone used cars (3/3)
3. Disrupt standalone used cars (3/3) • Build an additional 8 physical locations, differentiated vs. today, over the period to 2024 3. Scale the physical • Gain further share of addressable market that totals estate c.3m vehicles p.a. • CapEx per site of c.£7.5m. Phasing: 1 in 2021, 1, 2, 4 26
Slide 27: Pendragon's advantages
Pendragon’s advantages 1. Unlock value in 2. Grow and 3. Disrupt Franchised UK diversify standalone used Strategic Motor Pinewood cars pillars • Leaner cost base & improved efficiency • Advanced digital • Vertically integrated • Intragroup supply capabilities assets and scale for standalone • Contro
Slide 28: Milestones: An ambitious but achievable plan
Milestones: An ambitious but achievable plan 1. Unlock value in Franchised 2. Grow and diversify 3. Disrupt standalone UK Motor Pinewood used cars • Complete right-sizing • Hire change team & embed • Deliver material existing order governance pipeline • Conclude re-brand planning 2020 • Enable digit
Slide 29: Financial targets
Financial targets 29
Slide 30: Financial targets
Financial targets Delivered from an Transformative plan to Targeting a c.2% Capital expenditure improved cost base restore and improve underlying PBT margin averaging c.£45m p.a. following FY20 underlying profitability by 2025 from 2021 – 2025 restructuring PBT Performance, FY19 Actual PBT Performan
Slide 31: Summary
Summary 31
Slide 32: Summary
Summary • We are well positioned with three strategic priorities for growth and transformation 1. Material opportunity to unlock value in franchised UK motor by: ― Accelerating digital innovation; Our ― Driving operational excellence and best practice; and, strategy… ― Cost control. 2. Accelerate Pi
Slide 33: Appendix
Appendix 33
Slide 34: Appendix: DMS functionality
Appendix: DMS functionality CRM Easy and secure lead management KPI Sales reporting Prepare and Realtime execute sales visual contracts dashboard of faster than KPIs ever before One fully integrated DMS Accounting Aftersales Automated Advanced and fully booking compliant algorithms, accounting drag