Car Group Limited · ASX:CAR
Car — carsales.com — FY2019 Earnings Presentation
42 slides from Car's earnings presentation, Aug 21, 2019
Slide 1: Full Year Results Presentation
For personal use only FULL YEAR RESULTS PRESENTATION YEAR ENDED 30 JUNE 2019
Slide 2: Disclaimer and Non-IFRS Information
DISCLAIMER AND NON-IFRS INFORMATION For personal use only Disclaimer Non-IFRS Financial Information The material in this presentation has been preparation of such statements, actual carsales' results are reported under prepared by carsales.com Limited (ASX: results may vary in a material manner. Int
Slide 3: Contents
CONTENTS For personal use only Key Highlights 4–6 Financial Review 7 – 13 carsales Australia 14 – 19 carsales International 20 – 26 Strategy Update 27 – 32 Outlook 33 – 34 Appendix 35 – 41 3
Slide 4: FY19 Highlights
FY19 HIGHLIGHTS For personal use only Market leadership and diversification continue to deliver growth. Reported revenue Domestic highlights International highlights • Robust revenue performance in core • Strong international growth with look Up 11% to $418m Dealer (+7% on pcp**) and Private (+4%) a
Slide 5: carsales Today
CARSALES TODAY For personal use only carsales is the #1 online automotive advertising business in Australia, with a growing global presence in Asia and Latin America. AUSTRALIA INTERNATIONAL ASIA LATIN AMERICA • #1 online automotive • #1 online automotive classifieds business in classifieds business
Slide 6: Key Operational Highlights
KEY OPERATIONAL HIGHLIGHTS For personal use only carsales is one of the largest digital automotive advertising businesses in the world. >1 billion user sessions 2.47x more time spent on carsales.com.au than nearest competitor per annum on all carsales sites around the world¹ in Australia² >32,500 ca
Slide 7: Group Financial Review
For personal use only GROUP FINANCIAL REVIEW 7
Slide 8: Strong Track Record of Sustained Growth
STRONG TRACK RECORD OF SUSTAINED GROWTH For personal use only Well positioned to continue delivering long term shareholder value through world-class capability, exposure to international growth markets and investment in new products and services. Revenue ($m) Adjusted EBITDA ($m)* Adjusted NPAT ($m)
Slide 9: Summary Revenue & EBITDA Performance
SUMMARY REVENUE & EBITDA PERFORMANCE Revenue Year Ending For personal use only Full Year Growth 30 June 2019 FY18 FY19 $'s % • Full year revenue up 11% on pcp. strengthened go-to-market proposition. Revenue • Resilient results from our Dealer, Online Advertising 296.8 300.1 3.3 1% Private and ‘Data,
Slide 10: Adjusted EBITDA Margin Performance
ADJUSTED EBITDA MARGIN PERFORMANCE For personal use only Core Adjusted EBITDA margins expanded but were offset by investments in early stage domestic and high growth 1.0% (1.3%) international investments. 52.0% (0.4%) (1.0%) 50.3% • Adjusted EBITDA* margins moved from 52.0% in FY18 to 50.3% in FY19,
Slide 11: Look Through Summary
LOOK THROUGH SUMMARY For personal use only Increasingly significant contribution from International portfolio. International now contributes more than 22% of look through revenue and 16% of look through EBITDA. International look through revenue and EBITDA grew 39% and 29% respectively in FY19. Look
Slide 12: Adjusted Net Profit After Tax Summary
ADJUSTED NET PROFIT AFTER TAX SUMMARY For personal use only Year Ending $A Millions Growth 30 June 2019 FY18 FY19 % • D&A increased by $4.5m reflecting full year impact of Total revenue 376.9 417.5 11% acquired underlying D&A from SK Encar ($1.9m) and the Total operating expenses 180.8 207.4 (15%) i
Slide 13: Debt and Cash Flow
DEBT AND CASH FLOW For personal use only Cash Flow** (column) and conversion from EBITDA to cash (line) 250.0 Reported Leverage Ratio* 201.6 140% (Net Debt/Annualised EBITDA ***) 200.0 179.9 167.5 120% 154.5 142.2 150.0 100% FY18 2.00 100.0 100% 100% 101% 98% 92% 80% 50.0 FY19 1.94 60% 0.0 40% FY15
Slide 14: carsales Australia
For personal use only CARSALES AUSTRALIA 14
Slide 15: Extending Our Australian Market Leadership
EXTENDING OUR AUSTRALIAN MARKET LEADERSHIP For personal use only Average Daily Unique Audience Market Share* carsales Competitor 1 Competitor 2 Competitor 3 + 1.51x + 1.55x + 1.67x + 1.75x + 1.78x Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 *Nielsen Ratings average daily unique audience per quarter 15
Slide 16: Dealer Performance Summary
DEALER PERFORMANCE SUMMARY For personal use only Dealer revenue up 7% to $153.9m Depth Reporting $153.9 $144.0 $133.5 $123.8 $112.9 ($m) FY15 FY16 FY17 FY18 FY19 • Solid growth in core Dealer advertising revenue driven by higher used car leads volumes. • Reflected the ongoing strength of the used ca
Slide 17: Private Performance Summary
PRIVATE PERFORMANCE SUMMARY For personal use only Private revenue up 4% to $82.1m Instant Offer $78.9 $82.1 $65.0 $51.1 $43.0 ($m) FY15 FY16 FY17 FY18 FY19 • Solid growth in core advertising products driven by pricing optimisation and increased premium uptake. • Strong growth in carfacts product, re
Slide 18: Display Performance Summary
DISPLAY PERFORMANCE SUMMARY For personal use only Display revenue down 13% to $64.1m Refreshed new car offering CAGR 1% $72.9 $73.9 $67.9 $62.8 $64.1 ($m) FY15 FY16 FY17 FY18 FY19 • Display advertising revenue down 13%, albeit with a much improved run rate in Q4. • Reflects challenging advertising e
Slide 19: Data, Research & Services Performance Summary
DATA, RESEARCH & SERVICES PERFORMANCE SUMMARY For personal use only DR&S revenue up 2% on pcp to $43.2m Vehicle Appraisal Solutions $42.2 $43.2 $39.3 $35.8 $33.0 FY15 FY16 FY17 FY18 FY19 • H2 revenue growth impacted by intentional exit of low margin products and contracts. Underlying revenue growth
Slide 20: carsales International
For personal use only CARSALES INTERNATIONAL
Slide 21: International Summary
INTERNATIONAL SUMMARY Consolidated Entities For personal use only Constant $A Millions Growth International - reported results Currency Summary FY18 FY19 $'s % (%)** • Excellent progress in our international expansion strategy Revenue translating into an increasingly significant revenue and SK Encar
Slide 22: carsales Asia – SK Encar (Korea)
CARSALES ASIA – SK ENCAR (KOREA) For personal use only Pro-Forma (100%)* FY18 FY19 PCP Financial commentary: KRWb KRWb % Reported revenue 43.8 49.5 13% • Good performance in first full year of ownership. Reported EBITDA 21.4 24.3 13% • Good growth across all key revenue channels of Dealer, Private a
Slide 23: SK Encar's Growth Opportunity
SK ENCAR’S GROWTH OPPORTUNITY Large Market Opportunity Australia South Korea For personal use only GDP Annual Car Sales1 Subscribed Dealers Monthly Site Visits1 ($A trillion) (m) (000) (m) Growth Opportunities • Economic / structural: South Korea is the world’s 12th 2.4 12.1 largest economy, has a h
Slide 24: carsales Latin America – Webmotors (Brazil)
CARSALES LATIN AMERICA – WEBMOTORS (BRAZIL) For personal use only Pro-Forma (100%) FY18 FY19 PCP Financial commentary: BRLm BRLm % • Outstanding financial performance in FY19 as Webmotors Underlying revenue* 138.5 186.8 35% consolidates its position as the clear no.1 automotive vertical classified s
Slide 25: Webmotors' Growth Opportunity
WEBMOTORS’ GROWTH OPPORTUNITY Substantial Market Opportunity Australia Brazil For personal use only GDP Annual Car Sales1 Subscribed Dealers Monthly Site Visits1 ($A trillion) (m) (000) (m) Growth Opportunities 2.7 13.3 13.7 • Economic / structural: Brazil is the world’s 8th largest 2.2 25.1 24.0 ec
Slide 26: carsales Latin America
CARSALES LATIN AMERICA For personal use only Inventory 1 Page Views 2 +8% • Revenue growth primarily driven by dealer FY18 FY19 PCP +1% volume growth and yield expansion. CLPm CLPm % CHILE Reported revenue 2,416 2,821 17% • EBITDA margin impacted by investment in Reported EBITDA 858 865 1% marketing
Slide 27: Strategy Update
For personal use only STRATEGY UPDATE
Slide 28: carsales Strategy
CARSALES STRATEGY For personal use only OUR PURPOSE: We empower people to move freely through our world-leading marketplaces Value added services Digital marketplaces Future horizons We are focused To build a compelling ecosystem To grow our global leadership Leveraging consumer insights and of serv
Slide 29: Australia Key Focus Areas
AUSTRALIA KEY FOCUS AREAS For personal use only Key Strategic Objectives FY20 Focus Areas • Grow ROI for dealers on core transactions • Marketing and site optimisation to drive increase in traffic, leads and products yield Dealer • Increase penetration and usage of listing • Increased adoption of pr
Slide 30: International Opportunity in Context
INTERNATIONAL OPPORTUNITY IN CONTEXT For personal use only The international opportunity is significant for carsales. We have market-leading websites in countries with large addressable markets. 33m cars sold per year Site 1.5 2.8 carsales position #1 #1 #1 #1 #1 #2 5 GDP (AUD trillion)1 2.20 2.38 0
Slide 31: International Key Focus Areas
INTERNATIONAL KEY FOCUS AREAS For personal use only Key Strategic Objectives FY20 Focus Areas • Increase dealer penetration and yield • Grow dealer penetration and expand guarantee product • Increase penetration and usage of listing depth volume through launch of c.8 new branch complexes Korea produ
Slide 32: Global Platform
GLOBAL PLATFORM For personal use only LATAM Tech Hub carsales continues to invest in its global technology (Santiago) platform to drive future international growth. A global technology platform that operates across verticals and geographies will facilitate speed to market for new product, ongoing co
Slide 33: FY20 Outlook
For personal use only FY20 OUTLOOK
Slide 34: Performance Outlook
PERFORMANCE OUTLOOK For personal use only Group Outlook We assume a gradual recovery in Australian automotive market conditions across the year, supported by lower interest rates, an improved lending environment, a recovering property sector and recent tax changes. We have seen a solid start to the
Slide 35: Appendix
For personal use only APPENDIX
Slide 36: Overview of carsales Non-IFRS Financial Information
OVERVIEW OF CARSALES NON-IFRS FINANCIAL INFORMATION For personal use only What is IFRS and non-IFRS financial information presented is sourced directly presentations in order to allow the reader to information? from financial information prepared in clearly reconcile between the IFRS and non- accord
Slide 37: Reconciliation of Reported to Adjusted NPAT
RECONCILIATION OF REPORTED TO ADJUSTED NPAT Year Ending Full Year Growth For personal use only 30 June 2019 FY18 FY19 $'s % Reported NPAT (continuing operations) 182.3 133.2 (49.1) (27%) Expense Adjustments Restructure cost* - 1.3 FY18 Bad Debt Write-off* - 2.2 Interest Adjustments Option Discountin
Slide 38: Adjusted Financials
ADJUSTED FINANCIALS For personal use only $A Millions FY18 FY19 Growth % Year Ending 30 June 2019 Reported Adjustments Adjusted Reported Adjustments Adjusted Reported Adjusted Total revenue 376.9 - 376.9 417.5 - 417.5 11% 11% Total operating expenses 180.8 - 180.8 212.3 (4.9) 207.4 (17%) (15%) EBITD
Slide 39: carsales Look Through P&L Analysis
CARSALES “LOOK THROUGH” P&L ANALYSIS For personal use only FY18 FY19 Growth Look Look Look % Owned Days Owned Reported Underlying % Owned Days Owned Reported Underlying Reported % Underlying % Through Through Through % Revenue carsales International WebMotors 30% 365 Equity Acc'ted 53.8 16.1 30% 365
Slide 40: AASB Leases Adoption
AASB 16 LEASES ADOPTION For personal use only $A Millions Year Ending AASB16 FY19 30 June 2019 FY19 Adjustments Re-stated Total revenue 417.5 - 417.5 Adjusted EBITDA Online Advertising 158.4 4.8 163.3 Data, Research and Services 25.5 - 25.5 carsales Asia 32.0 2.4 34.5 carsales Latin America (5.9) 0.
Slide 41: Stratton Finance – Discontinued Operations
STRATTON FINANCE – DISCONTINUED OPERATIONS For personal use only Year Ending $A Millions Variance 30 June 2019 FY18 FY19 $'s % Core Finance 46.5 37.1 (9.4) (20%) Other products 22.0 19.9 (2.1) (10%) Total Revenue 68.5 57.0 (11.5) (17%) Cost of sales 18.5 16.6 1.9 10% Gross Profit 50.0 40.4 (9.6) (19
Slide 42: For personal use only
For personal use only 42