Slide 1: For personal use only
For personal use only © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 February 2008
Slide 2: 2007 Preliminary Final Report
For personal use only 2007 Preliminary Final Report Financial results for year ending 31 December 2007 Investor Presentation 29 February 2008 © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 February 2008
Slide 3: Highlights
Highlights For personal use only • Revenue increased by 43% • Trading NPBT increased by 84% • NPAT increased 11% • Substantial growth in revenue and margin from existing business – additional EBIT of $12.3m. • New acquisitions diversify markets and make a significant contribution – additional EBIT o
Slide 4: Automotive Market
Automotive Market For personal use only Australian New Vehicle Sales - Top 10/ Total 1200000 Other VW 1000000 Subaru Hyundai 800000 Nissan Honda 600000 Mitsubishi Mazda 400000 Ford 200000 Holden Toyota 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Market record of 1.05 million new car units an
Slide 5: Market Highlights
Market Highlights For personal use only • Queensland market increased by 10.4% compared to national average of 9.1%. • NSW and NT markets also strong at 9.1% and 7.2% growth respectively. • Toyota dominance increasing in volume market - 22.5% market share. • Substantial decline (6%) in Ford market s
Slide 6: National vehicle fleet is approaching million (car parc)
National vehicle fleet is approaching 15 million (car parc) For personal use only All vehicle registrations 15 mn other vehicles passenger & SUVs 10 5 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: ABS, ANZ Bank © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 Februar
Slide 7: Petrol has skyrocketed. Other car running costs are keeping pace with inflation
Petrol has skyrocketed. Other car running costs are keeping pace with inflation For personal use only Consumer Price Indexes Indexes 1989-90=100 230 Auto fuel 210 190 All C PI 170 150 130 auto servicing 110 auto parts 90 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 Source: ABS, ANZ Bank © 2007 AP Ea
Slide 8: New cars are now cheaper, more affordable
New cars are now cheaper, more affordable For personal use only Consumer Price Indexes 170 Indexes 1989-90=100 All C PI 160 150 140 130 120 110 New car prices 100 90 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 Source: ABS, ANZ Bank © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 February
Slide 9: Operational Highlights
Operational Highlights For personal use only Existing Growth • Improved automotive • Kloster Motor Group retail profit margins. acquisition. • North Lakes development • Adtrans Group 22.4% complete. strategic holding. • Newstead dealership • Surfers City Holden property rationalisation. acquisition.
Slide 10: 2007 Operational Highlights
2007 Operational Highlights For personal use only Acquired Kloster Motor Group, Newcastle on 28 February 2007 for $27m, plus related property $36m – trading above expectation. © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 February 2008
Slide 11: 2007 Operational Highlights
2007 Operational Highlights For personal use only © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 February 2008
Slide 12: Klosters
Klosters For personal use only • Continued to trade strongly, EBIT for 10mths including property of $9.9m. • Optimisation of dealership and property holdings. – BMW development. – Other niche brand dealership developments. • Strong management team retained. • Base for further growth in NSW market. ©
Slide 13: Adtrans Group Investment (22.4% holding)
Adtrans Group Investment (22.4% holding) For personal use only • Major Australian truck retailer and the leading South Australian car retailer. • December 2007 (6mths) Net Profit increased by 29.7% to $5.6 million. • Improved truck sales as a result of Euro 4 emissions standards and increased freigh
Slide 14: Surfers City
Surfers City Acquisition of Surfers City Holden, Saab and Hummer at Southport on the Gold Coast settled on 17 August 2007 – immediately earnings accretive For personal use only © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 February 2008
Slide 15: Surfers City Holden
Surfers City Holden For personal use only • Continued strong performance EBIT of $1.2m for 4.5mths. • Good demographic market for Holden product. • Base for further growth and synergies on the Gold Coast. © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 February 2008
Slide 16: Bill Buckle Auto Group
Bill Buckle Auto Group For personal use only © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 February 2008
Slide 17: Bill Buckle Auto Group
Bill Buckle Auto Group For personal use only © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 February 2008
Slide 18: Bill Buckle Auto Group
Bill Buckle Auto Group For personal use only • $14m to acquire Bill Buckle Auto Group. • $22m to acquire related property assets. • Turnover $170m, 180 staff, 4,000 new / used vehicles per annum National Market Share 2007 Growth Toyota 22.5% +10.7% Subaru 3.7% + 2.5% VW 2.6% +27.0% Audi 0.7% +25.2%
Slide 19: Group Financial Results
Group Financial Results For personal use only 2007 Change • NPBT from trading Total Revenue $1,675m +43% increased by 84%. Trading (before Sale of Property & • EBIT margin from trading Associates Profit) improved to 3.6% from 3.0% EBITDA $65.9m +63% in 2006. Including Associate Profits • Decline in
Slide 20: Financial Trends
Financial Trends For personal use only © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 February 2008
Slide 21: Financial Trends
Financial Trends For personal use only © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 February 2008
Slide 22: Existing Business – Financial Results
Existing Business – Financial Results For personal use only • Strong economic and Change 2007 automotive retail markets. • Improved margins for New, Trading (Before Sale of Property & Associate Profits) Used and Service activities. • Parts margins declined due Total Revenue $1,364m +14% to higher pr
Slide 23: New Business – Financial Results
New Business – Financial Results For personal use only 2007 • Acquisition of Kloster Motor Trading (Before Sale of Property & Group (10mths) and Surfers Associate Profits) City Holden (4.5mths). Total Revenue $310m • Equity investment in Adtrans Group Limited. EBITDA $12.1m EBIT $11.1m Other Share o
Slide 24: Group Balance Sheet - Summary
Group Balance Sheet - Summary For personal use only 2007 Change • Working capital $m increased in line with Working Capital 62.2 +27% acquisitions. Investments 24.9 +1382% • Adtrans investment. PP&E 332.1 +38% • PPE reflects Intangibles 60.9 +131% acquisitions & property Non Current 133.8 +28% reval
Slide 25: Corporate Borrowings
Corporate Borrowings For personal use only 2007 Change • Borrowing increase $m primarily due to bailment Current - Bailment 188.2 +58% finance associated with Inventory Finance acquisitions. Non – Current $133.8 +28% Total Borrowing $322.0 +42% • Limited change in Total Gearing 51.5% +6% gearing. (D
Slide 26: Group Cash Flow - Summary
Group Cash Flow - Summary For personal use only • Cash from sale of surplus 2007 property in 2006, $m supplemented with debt Cash from operations 36.7 and cash from operations Purchase of PP&E (63.3) used to fund 2007 Investment in Adtrans (11.2) acquisitions. Business acquisitions (36.1) • Cash fro
Slide 27: Franchise Automotive Retail Segment
Franchise Automotive Retail Segment For personal use only • Net profit ratio 1.9% 2007 compared to 1.7% industry Revenue $1,674.5m average. • Return on net assets 15.4% Profit before tax $33.7m Total Assets $406.0m Total Liabilities $249.2m Net Assets $156.8m PBT/Revenue 1.9% RONA (after tax) 15.4%
Slide 28: Property Segment
Property Segment For personal use only • Property returns similar to 2007 comparable property Rental Income $24.1m entities. Profit before tax $8.5m • Substantial revaluation Revaluation surplus (a/tax) $19.6m surplus $77m (before tax) Total Assets $313.8m in 2 years. Total Liabilities $167.5m Net A
Slide 29: 2008 Developments – Dealership Optimisation
2008 Developments – Dealership Optimisation For personal use only • Dealership optimisation – City Peugeot relocated to site adjacent to Metro Fortitude Valley. – City Mitsubishi combined on Eagers Windsor site. – Subaru franchise added to Torque Brendale. – Three Parts distribution locations consol
Slide 30: 2008 Developments - Property
2008 Developments - Property For personal use only • Property Opportunities – Further North Lakes, Qld site development. – Sunshine Coast, Qld facility for Audi/Citroen. – Robina, Qld property secured for dealership cluster development. – Re-zoning potential for Woolloongabba, Qld property holdings.
Slide 31: North Lakes
North Lakes For personal use only © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 February 2008
Slide 32: Robina
Robina For personal use only © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 February 2008
Slide 33: 2008 Developments - Acquisitions
2008 Developments - Acquisitions For personal use only • Bill Buckle Auto Group – Brookvale, Sydney location. – Toyota, Audi, Subaru and Volkswagen franchises suited to demographic. – Completion expected 31 March 2008. • Further opportunities under evaluation. © 2007 AP Eagers Limited. All Rights Re
Slide 34: Strategy
Strategy For personal use only 1. Optimisation of existing dealerships and related property portfolio. 2. Acquisition of suitable dealerships and related property to integrate into business model. Further consolidation of a fragmented industry. 3. Build organisational capability to support expected
Slide 35: Outlook
Outlook For personal use only • Interest rate pressure – RBA likely to tighten policy until key indicators respond. • Strong employment especially in Qld & WA. • Potential for 2 speed market – Qld & WA remain strong other States decline. © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 Febr
Slide 36: 2007 sales growth came from a sales recovery in NSW and Vic, plus strong growth in Qld
2007 sales growth came from a sales recovery in NSW and Vic, plus strong growth in Qld. For personal use only New automotive sales, states 30 '000 vehicles sold per month (trend) NSW 25 Vic Qld 20 15 WA 10 SA 5 Tas ACT 0 NT 98 99 00 01 02 03 04 05 06 07 08 Source: ABS © 2007 AP Eagers Limited. All R
Slide 37: Outlook
Outlook For personal use only • Interest rate pressure – RBA likely to tighten policy until key indicators respond. • Strong employment especially in Qld & WA. • Potential for 2 speed market – Qld & WA remain strong other States decline. • “Green” focus changing product and brand mix. • Strong AUD/U
Slide 38: For personal use only
For personal use only © 2007 AP Eagers Limited. All Rights Reserved. Friday, 29 February 2008