Turners Automotive Group Ltd · NZX:TRA
Turners Automotive — Investor Presentation (September 2019)
31 slides from Turners Automotive's investor presentation, Sep 2, 2019
Slide 1: Turners NZX Retail Investor Evening September 2019
For personal use only Turners NZX Retail Investor Evening September 2019
Slide 2: Key Points
Key Points For personal use only • Large market with sizeable forward demand • Generating strong sustainable profits with excellent dividend yields • Focus on simplification and capital efficient growth • Strong brand, in expansion mode Todd Hunter CEO 2 • NZX RETAIL INVESTOR ROADSHOW PRESENTATION
Slide 3: Market Update
For personal use only Market Update 3 • NZX RETAIL INVESTOR ROADSHOW PRESENTATION
Slide 4: The used car market is large with good forward demand
The used car market is large and there are is good forward demand For personal use only 3.85m 953,000 Light vehicles in the The number of cars in the light vehicle 1.13 m New Zealand vehicle fleet that are 20 years or older used cars were traded to the year fleet ended 31 March 2019 down 1% on year
Slide 5: Highlights & Divisional Review
For personal use only Highlights & Divisional Review 5 • NZX RETAIL INVESTOR ROADSHOW PRESENTATION
Slide 6: A quick look back in time
A quick look back in time… As at March YE 2012 2013 2014 2015 2016 2017 2018 2019 For personal use only Shareholder Funds ($m) 24 33 74 121 130 169 214 226 Total Assets ($m) 74 104 127 329 367 557 652 654 NPBT ($m) -1.5 -0.1 4.9 19.0 21.6 24.6 31.0 29.0 EPS (cents) (9.1) 9.0 20.4 32.8 24.7 25.5 29.3
Slide 7: FY19 results snapshot
FY19 results snapshot For personal use only Revenue (millions) Revenue Shareholders’ Equity 400 350 $336.6m +2% $226.4m as at 31 Mar 19 300 250 2H 200 150 1H Net Profit Before Tax 100 Final Dividend 5.0 cps 50 $29.0m -7% Total FY Dividend 17.0cps 0 FY15 FY16 FY17 FY18 FY19 ($33.6m excl BRC brand wri
Slide 8: Strong dividend yield will be ongoing
Strong dividend yield will be ongoing For personal use only • Dividend Policy Change: Increase in pay out ratio Dividend per Share (Cents) to 60% to 70% of NPAT Note – Dividends fully 18.0 imputed from FY17 on • Reminder we pay quarterly dividend 16.0 17.0 15.5 14.0 14.5 • FY19 full year dividend of
Slide 9: Balance sheet
Balance sheet For personal use only $000s FY19 FY18 • Reduction in cash balances due to Cash and cash equivalents 15,866 25,145 investment of insurance reserves into Financial assets at fair value 66,252 53,378 longer dated term deposits Finance Receivables 290,017 289,799 Inventory 38,859 38,596 •
Slide 10: Strategic Review
For personal use only Review Strategic
Slide 11: Primary drivers
Primary drivers For personal use only Strength of Complexity of Growth of NZ’s Demand for Turners brand existing business ageing vehicle fleet digitisation 11 • NZX RETAIL INVESTOR ROADSHOW PRESENTATION
Slide 12: Industry-leading brand
Industry-leading brand For personal use only With over 50 years in the market, we are the largest and most-trusted brand in the industry. Brand awareness in 90% the New Zealand 45% View Turners as the most trustworthy used car dealer in New market Zealand Turners 90% Turners 45% 2 Cheap 60% Other 21
Slide 13: Summary of our plan
Summary of our plan… For personal use only Our strategy is to… • Simplify the business • Accelerate growth in a capital efficient way A capital efficient • De-risk by focusing on our core business and strengths growth strategy This will enable us to… for Turners • Significantly increase market share
Slide 14: Focus on a single brand strategy
Focus on a single brand strategy For personal use only Leverage our strong brands, remove complexity and play to strength in auto retail. Consumer brands Wholesale/B2B brands 14 • NZX RETAIL INVESTOR ROADSHOW PRESENTATION
Slide 15: Buy Right Cars brand change out completed in May
Buy Right Cars brand change out completed in May For personal use only 15 • NZX RETAIL INVESTOR ROADSHOW PRESENTATION
Slide 16: Strategic review of business units
Strategic review of business units For personal use only We are undertaking a Short term review Medium term review review of non-core businesses with lower synergies to the core auto business. • Capital intensive • High return capital growth model business • Profits from captive • Non-auto therefore
Slide 17: Improve the customer experience
Improve the customer experience For personal use only Turners Auto Group Owned Properties Expand our retail footprint Whangarei (8,000m2) Turners Cars Continue to expand our footprint in high potential locations North Shore Cars (8,500m2) Turners Cars across the country. Mt Richmond Auckland (10,500
Slide 18: Growth in footprint through opening 9 new sites
Growth in footprint from ~147,000m 2 to ~220,000m2 in next 2 years through opening 9 new sites For personal use only Committed branches North Shore - AKL Re-opening of Turners’ Auto-Retail flagship store July 2019 8,524m2 Dunedin Re-opening of Turners’ Auto-Retail flagship store Dec 2019 9,025m2 Wes
Slide 19: Branch Re-location – Whangarei (Owned site)
Branch Re-location – Whangarei (Owned site) For personal use only • Purchased old Placemakers site • Increased footprint from 6,500m2 to 8000m2 • High profile corner site • Higher % of retail sales at new site, more finance deals, higher margins on owned inventory • 3 months to June 85% increase in
Slide 20: For personal use only
For personal use only
Slide 21: New Branch – New Plymouth
New Branch – New Plymouth For personal use only • Leased site • High profile corner site on busy arterial of 4,600m2 • 180+ car site • High yard to building ratio 21 • NZX RETAIL INVESTOR ROADSHOW PRESENTATION
Slide 22: For personal use only
For personal use only
Slide 23: Relocation – North Shore (Owned site)
Relocation – North Shore (Owned site) For personal use only • Owned and developed site in car precinct of Wairau Valley • High profile site on Archers Road 8,500m2 • 300+ car site • High yard to building ratio • Opens late July 23 • NZX RETAIL INVESTOR ROADSHOW PRESENTATION
Slide 24: New Branch – Hamilton
New Branch – Hamilton For personal use only • High profile corner site across from The Base • 5,000m2 • 200+ car site • Opens in August • Turners Cars branded site • Utilises stacked containers for brand statement 24 • NZX RETAIL INVESTOR ROADSHOW PRESENTATION
Slide 25: For personal use only
For personal use only
Slide 26: Adjacent opportunities
Adjacent opportunities For personal use only Turners has a strong balance sheet, large customer base and rich data Turners Group assets which put it in a unique position to partner and invest to Leverage scale, harness the changing market brand, data assets and network dynamic. Provide capital Partn
Slide 27: Innovation - Investment in Collaborate (CL8.ASX)
Innovation - Investment in Collaborate (CL8.ASX) Overseas For personal use only • Invested AUD$1 million for 12.13% stake in Collaborate Corp (CL8.ASX) • Turners appoint a director to the Collaborate board. • Want to understand alternative ownership models • Collaborate’s core business centres aroun
Slide 28: Summary
Summary For personal use only • Large market with sizeable forward demand • Generating strong sustainable profits with excellent dividend yields • Focus on simplification and capital efficient growth • Strong brand, in expansion mode 28 • NZX RETAIL INVESTOR ROADSHOW PRESENTATION
Slide 29: Questions
For personal use only Questions 29 • NZX RETAIL INVESTOR ROADSHOW PRESENTATION
Slide 30: Contact
Contact For personal use only Todd Hunter - CEO T: 64 21 722 818 E: todd.hunter@turners.co.nz Aaron Saunders - CFO T: 64 274938794 aaron.saunders@turners.co.nz 30 • FY20 INVESTOR ROADSHOW PRESENTATION
Slide 31: Disclaimer
Disclaimer For personal use only Turners Automotive Group the (company) is solely responsible for the content of this document. This document is not an investment statement or prospectus and does not constitute an offer of securities. This document or any other written or oral statements made by, or
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