Car Group Limited · ASX:CAR
Car — Investor Day (December 2021)
60 slides from Car's investor day presentation, Dec 7, 2021
Slide 1: carsales Investor Day
carsales Investor Day 7 December 2021 Welcome International Sustainability Australia Financial Summary Q&A Session
Slide 2: Disclaimer and Non-IFRS Information
Disclaimer and Non-IFRS Information 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. International Financial R
Slide 3: Disclaimer and Non-IFRS Information
Disclaimer and Non-IFRS Information What is IFRS and non-IFRS financial presented is sourced directly from financial slides, appendices and in footnotes of information? information prepared in accordance with all presentations in order to allow the reader to relevant accounting standards and has bee
Slide 4: Purpose of Today
Purpose of Today 1 Overview of long term growth opportunities and how we will execute on these 2 Meet Trader Interactive CEO Lori Stacy and hear about their strategic priorities and growth opportunities 3 Discuss trends and factors affecting our industries 4 Present our ESG key focus areas 5 Meet th
Slide 5: Today’s Agenda
Today’s Agenda Time Topic Presenter(s) 9:00 Welcome to the carsales Investor Day Cameron McIntyre 9:10 carsales International Paul Barlow, Lori Stacy and SB Kim 9:40 Sustainability Nicole Birman, Jo Allan, Jason Blackman and Kane Hocking 9:50 carsales Australia Ajay Bhatia and Mark Cripsey 10:15 Fin
Slide 6: Today’s Speakers
Today’s Speakers Cameron McIntyre Lori Stacy Paul Barlow Nicole Birman William Elliott Jason Blackman Chief Executive Officer CEO - Trader Interactive Managing Director – General Counsel & Chief Financial Officer Chief Information Officer International Company Secretary SB Kim Mark Cripsey Jo Allan
Slide 7: carsales’ Investment Proposition
carsales’ Investment Proposition 1 2 3 4 5 6 Clear leadership Significant High growth Globally scalable Valuable data Highly profitable, in the markets we domestic growth international technology assets and strong cash flows, operate in opportunities portfolio platform and insights capability robust
Slide 8: carsales is a Global, Diversified Business
carsales is a Global, Diversified Business carsales is a geographically diverse multi-industry business Look-through Revenue Contribution by Market1 Look-through Revenue Contribution by Industry1 Australia International Auto Non-auto $600m $600m $500m $500m 22% 37% $400m $400m $300m 11% $300m 5% $20
Slide 9: With Large Addressable Markets
With Large Addressable Markets carsales operates in large addressable markets, that have been accelerated by COVID-related digitisation Core International Emerging Opportunities Non-Marketplace Dealer Private Media US Korea LatAm Digital Digital Dealer Data & Tyres Advertising Seller Advertising Non
Slide 10: Market Trends are Driving Opportunity
Market Trends are Driving Opportunity carsales operates in markets with strong demand and increasing digital penetration upside Strong Automotive Demand Surging Demand for Lifestyle Assets Increasing Digital Penetration Car usage has become the preferred Demand for lifestyle assets has accelerated D
Slide 11: Other Industry Themes
Other Industry Themes Electric Vehicles (EV) The Agency Model Supply Chain Environmental considerations are driving Typically, dealers buy new car stock from Supply run-rate of new vehicles has slowed EV adoption, with some regulators looking vehicle manufacturers (OEMs) and are free due to semicond
Slide 12: Multiple Large Domestic and International Growth Drivers
Multiple Large Domestic and International Growth Drivers Australia International Dealer, Data Research & Private Domestic Korea US LatAm Media Services Seller Investments Auto Non-Auto Automotive (DR&S) Market Auto Dealer Extension into Premium ad leadership, Traditional Consistent volume, yield & d
Slide 13: carsales International
carsales International Welcome International Sustainability Australia Financial Summary Q&A Session
Slide 14: carsales’ International History
carsales’ International History Having established leading marketplaces in Australia, we have grown our footprint by leveraging our technology and expertise into new, large and fast- growing international markets 2021 2017 2016 2013 2014 2015 Acquired 49% of United States non-auto classifieds busine
Slide 15: Track Record of Strong Growth
Track Record of Strong Growth The carsales international portfolio has delivered strong look-through revenue and earnings growth International Look-through Revenue (AUDm)1 International Look-through EBITDA (AUDm)1 2 2 Encar webmotors LatAm Trader Interactive Encar webmotors LatAm Trader Interactive
Slide 16: With Significant Upside to Come
With Significant Upside to Come carsales Operates In Enormous Addressable Markets1 Where Dealer Gross Margin Take-rates Are Lower2 Annual Transaction Volume (m) Take-rate % of Gross Margin 14% % of gross margin taken per item 7x 45 40 12% Benchmark 35 10% 30 8% 25 20 6% 15 4% 10 FY16 2% 5 FY13 FY14
Slide 17: How We Will Execute
How We Will Execute 1 Grow customers and 1 Re-orient Encar from a 1 Increase dealer 1 Traffic and lead growth audience classifieds site to a penetration and vehicle trading platform monetisation 2 Dealer acquisition 2 Increase share of 2 Increase penetration and Increase the contribution advertising
Slide 18: United States – Trader Interactive
United States – Trader Interactive Welcome International Sustainability Australia Financial Summary Q&A Session
Slide 19: Summary
Summary History Trader Interactive Financial Performance (USDm)8 Founded in Norfolk, Virginia, with c.380 employees TI operates classifieds websites across four key segments in the US, with a focus on Recreational Vehicles (RVs), motorcycle, truck and equipment industries Adjusted Revenue Adjusted E
Slide 20: Strategy
Strategy Expanding our market leadership and enhancing the buying and selling experience for dealers and consumers Market New Products Value Proposition Digital Leadership and Services and ROI Retailing Grow our leadership in RV Deploy new products and Offer the most Seamlessly connect all and Power
Slide 21: Large Addressable Markets
Large Addressable Markets Recreational Commercial Total Powersports Equipment Vehicles (RVs) Trucks Key Brand Annual sales volume 15m 0.75m 1.5m 10m 2.5m x Average unit price $35k $32k $10k $35k $60k = Annual sales value $516bn $24.5bn $16bn $335bn $140bn x Marketing % of sales 0.6% 2% 2% 0.5% 0.5%
Slide 22: Strong Market Dynamics
Strong Market Dynamics Sales Volumes in Our Consumers are Increasingly Dealers are Increasing Their Markets are Increasing Searching Online Digital Advertising Spend Sales volumes in our markets have Our traffic growth shows that consumers The digital share of dealer advertising achieved 6% CAGR sin
Slide 23: Industry and Inventory Dynamics
Industry and Inventory Dynamics Recreational Vehicles (RVs) Powersports Commercial Trucks Equipment COVID-related increase in domestic tourism Similar to RVs, COVID has driven Chip shortages have driven There is strong underlying demand for has had positive impact on the RV industry increased demand
Slide 24: Growth Opportunities
Growth Opportunities 1,200 139 123 Inventory levels across the TI 800 Despite significantly lower sites have declined nearly 40% inventory levels, we have been compared with pre-COVID levels1 400 able to achieve 13% revenue (inventory shown in thousands) growth (USDm)2 0 Pre-COVID Today CY20 LQA As
Slide 25: Partnership Opportunities
Partnership Opportunities International Strategic Themes Synergy Key Focus Areas Technology Platform 1 Services • Image processing • Telephony We have a best in class global technology platform that is • User generated video • Messaging standardised across verticals and geographies • Fraud detection
Slide 26: Korea - Encar
Korea - Encar Welcome International Sustainability Australia Financial Summary Q&A Session
Slide 27: Summary
Summary Encar Encar History History Revenue Growth Contribution Strategy by Product and Opportunity March 2014: acquired 49.9% of leading Korean auto classifieds Since 2014, Encar has shown consistent growth primarily driven by the strong business SK Encar for $126mil contribution from value added s
Slide 28: Strategy
Strategy Re-orienting Encar from a classifieds model to a fully online car transaction platform Guarantee Cars Encar Home Dealer Direct Digital Retailing Provide consumers with Offer consumers Enable consumers to Seamlessly connect all total piece of mind of car inspected used cars at a easily sell
Slide 29: Encar Video
Encar Video To view the video shown at the carsales Investor Day please click the following link: https://shareholder.carsales.com.au/2021-investor-day/ 29 Welcome International Sustainability Australia Financial Summary Q&A Session
Slide 30: Growth Opportunity – Guarantee
Growth Opportunity – Guarantee Guarantee cars are highly valued by consumers, yield 5x more than standard ads and increase dealer gross margin Guarantee Market Growth Strategy and Opportunity Korean dealers are less sophisticated than dealers in Western Encar has opened 36 inspection sites on-site a
Slide 31: Growth Opportunity – Encar Home
Growth Opportunity – Encar Home Encar’s home delivery service builds on inspection services, moving more of the buying process online Digital Retailing Market Growth Strategy and Opportunity In recent years, consumer demand for a fully online purchasing Encar will continue to invest in the product t
Slide 32: Growth Opportunity – Dealer Direct
Growth Opportunity – Dealer Direct Demand for online trade-in products are increasing in Korea Dealer Direct Performance The Trade-in Market Market Opportunity and Strategy Trade-ins are more common in Korea There is a significant opportunity for online Transaction volumes have grown significantly w
Slide 33: Sustainability Panel
Sustainability Panel Jo Allan Nicole Birman Jason Blackman Kane Hocking Chief People Officer General Counsel & Chief Information Officer Investor Relations Company Secretary
Slide 34: Sustainability Vision
Sustainability Vision Our Sustainability Vision carsales is committed to being a responsible Environment Our People business and taking action on environmental, social and governance issues This is critical to ensure the ongoing success and sustainability of the business Our We have a comprehensive
Slide 35: Sustainability Pillars – Key Focus Areas
Sustainability Pillars – Key Focus Areas Environment People Community Taking action on climate risk Promote diversity and inclusion Supporting our local communities Goal to be carbon neutral in Australian Improve gender diversity in the historically Make a difference to the communities operations by
Slide 36: Sustainability Pillars – Key Focus Areas
Sustainability Pillars – Key Focus Areas Customers Innovation Governance Cybersecurity and data privacy Drive a culture of innovation Robust risk management framework Protecting customer and consumer data is a Significant change is taking place in the Committed to a strong corporate governance criti
Slide 37: carsales Australia
carsales Australia Welcome International Sustainability Australia Financial Summary Q&A Session
Slide 38: Our Australian Business is Strong
Our Australian Business is Strong Consistent Audience Growth Driving Clear Market Leadership Our pay-per-lead model requires us to deliver more carsales Competitor 1 Competitor 2 Competitor 3 Lead over #2 traffic, leads and sales opportunities to dealers Unique Audience1 Total Sessions2 By continual
Slide 39: Multiple Domestic Growth Drivers
Multiple Domestic Growth Drivers The Australian market has multiple significant growth opportunities Digital Digital Dynamic Media & Dealer Retailing Trade-ins Pricing Membership Finance Demand for a digital car Consumer demand for a fast Better aligns the price We are implementing a We facilitate d
Slide 40: Digital Ads Segments Performing Well
Digital Ads Segments Performing Well Strong strategy execution positions the domestic business for continued growth going forward Dealer Growing Consistently Core Private is Accelerating Media Has Returned to Growth Continued market leadership supporting Volume and yield increases, dynamic pricing I
Slide 41: COVID Has Increased Digital Demand
COVID Has Increased Digital Demand Research Trade-in Finance Transaction Digitisation: Med-High Digitisation: Low Digitisation: Low Digitisation: Low Car research is largely As the trade-in process Dealer’s used cars finance Researching and finalising conducted online occurs during the penetration i
Slide 42: Opening New Addressable Markets
Opening New Addressable Markets Australia Auto – Emerging Digital Opportunities Market Digital Retailing Digital trade-in Finance Commissions Product Dealer Finance Annual transaction volume1 1.0m 2.25m 2.0m (B2C - used) (trade-in + C2C) (B2C) x Addressable share 15%2 20%2 5%2 = Total addressable vo
Slide 43: The Rise of Digital Car Retailing
The Rise of Digital Car Retailing COVID-19 has accelerated the willingness of consumers to buy and sell used cars online Demand for a full digital retail We have conducted research We have launched carsales Select, a experience is growing to understand the drivers new digital used car offering 37% o
Slide 44: Instant Offer
Instant Offer Digital trade-ins are an enormous opportunity for carsales and will be critical to digital retailing Performance Track-record Execution Strategy Volumes have recovered to 2.5x pre-COVID levels Key Sales Funnel Steps Growth Drivers Increase volume: Improve brand awareness through above
Slide 45: Dealer Finance
Dealer Finance Increasing finance penetration for dealers is a significant opportunity and we are making good progress We Have Signed Multiple Lenders Pre-approval is Now Live Revenue is Accelerating We have signed a large panel of lenders and We have launched pre-approval with our The commercialisa
Slide 46: Dynamic Pricing
Dynamic Pricing Our dynamic pricing strategy aims to better align the price charged with value delivered Dynamic Pricing Phase 1 Dynamic Pricing Phase 2 carsales has delivered strong yield growth from tiered pricing of its private Change the ad creation process to ask for the consumer’s location lis
Slide 47: Media & Membership
Media & Membership Executing on our strategy is driving an increase in core marketplace revenue growth Increase contribution from Implement Customer Build cookieless persistent Build self-serve media non-automotive Data Platform (CDP) customer profiles buying platform We have improved We are in the
Slide 48: Tyres
Tyres The tyre market is large, digitally under-penetrated and our wholesale and retail offerings are well-positioned to gain market share Tyres Investment Thesis Update on tyreconnect Synergies 1. The Australian tyre market is large, highly attractive and digitally immature • In Q1 FY22, we acquire
Slide 49: Financial Overview
Financial Overview Welcome International Sustainability Australia Financial Summary Q&A Session
Slide 50: Strong Track Record Of Financial Performance
Strong Track Record Of Financial Performance Our strategic plan supports continued trajectory as a growth company Look-through Revenue (AUDm)1 Look-through EBITDA (AUDm)1 543 315 Trader Trader 450 Interactive 261 Interactive 413 424 237 385 220 207 326 179 FY17 FY18 FY19 FY20 FY21 FY21 PF 2 FY17 FY1
Slide 51: Our Capital Management Approach
Our Capital Management Approach Robust balance sheet provides continued flexibility to invest for growth as well as exploring new partnerships and acquisitions Good balance of earnings growth and investment in new Strong operating model and disciplined cost management opportunities to create deliver
Slide 52: New Financial Segment Reporting Structure
New Financial Segment Reporting Structure From H1 FY22, we will include a new reporting segment called “carsales Investments” which comprises standalone investments of Tyres, RedBook Inspect and Placie New Reporting Segments Reconciliation of Existing Structure To New Structure We have made some min
Slide 53: New Reporting Segments
New Reporting Segments $ in 'millions FY17 FY18 FY19 FY20 FY21 • The information adjacent reflects the restated segment Adjusted Revenue information that will be used to present carsales’ H1 FY22 Dealer 133.0 142.8 151.6 165.4 174.1 results. Private 36.8 41.8 44.8 43.7 55.3 Media 72.9 73.9 64.1 50.2
Slide 54: FY22 Outlook
FY22 Outlook We re-iterate our FY22 outlook statement provided at the AGM. 54 Welcome International Sustainability Australia Financial Summary Q&A Session
Slide 55: Summary
Summary carsales@)com ltd
Slide 56: Key Takeaways
Key Takeaways Our addressable markets have expanded by COVID accelerating digital adoption Revenue growth is accelerating in our domestic online advertising segments Our international businesses are exposed to enormous addressable markets of more than $2.5bn These opportunities position us well for
Slide 57: Q&A Panel
Q&A Panel Cameron McIntyre Lori Stacy Paul Barlow Nicole Birman William Elliott Jason Blackman Chief Executive Officer CEO - Trader Interactive Managing Director – General Counsel & Chief Financial Officer Chief Information Officer International Company Secretary SB Kim Mark Cripsey Jo Allan Ajay Bh
Slide 58: Appendix
Appendix Welcome International Sustainability Australia Financial Summary Q&A Session
Slide 59: New Reporting Segments
New Reporting Segments Reported Adjusted $ in 'millions FY17 FY18 FY19 FY20 H1 FY21 FY21 FY17 FY18 FY19 FY20 H1 FY21 FY21 Revenue Dealer 133.0 142.8 151.6 143.1 77.9 166.3 133.0 142.8 151.6 165.4 85.6 174.1 Private 36.8 41.8 44.8 43.7 22.8 55.3 36.8 41.8 44.8 43.7 22.8 55.3 Media 72.9 73.9 64.1 49.0
Slide 60: Welcome International Sustainability
Welcome International Sustainability Australia Financial Summary Q&A Session