Motorcycle Holdings Ltd. · ASX:MTO
Motorcycle — H1 FY2019 Earnings Presentation
24 slides from Motorcycle's earnings presentation, Feb 26, 2019
Slide 1: Interim Financial Results – December 2018
MOTORCYCLE HOLDINGS LIMITED For personal use only Interim Financial Results – December 2018 MotorCycle Holdings
Slide 2: Disclaimer and Important Information
Disclaimer and Important Information For personal use only Disclaimer and Important Information • This presentation may contain certain unaudited financial information in relation to MotorCycle Holdings Limited (MTO). As such, it has not been subject to an audit or an audit process or otherwise inde
Slide 3: Agenda
Agenda For personal use only 1 Results Overview 2 Financial Results 3 Trading Conditions 4 Operational Review 5 FY2019 Outlook MotorCycle Holdings 3
Slide 4: 1. Results overview
For personal use only 1. Results overview MotorCycle Holdings
Slide 5: 1. Results Highlights
1. Results Highlights For personal use only Underlying EBITDA increased to $10.4m, up 19.5% (2018: $8.7m) Underlying EBITDA margin of 6.0% slightly down (2018: 6.2%) Sales revenue of $172.8m, up 24.1% (2018: $139.3m) Comparable sales declined by 9.1%, in line with market Growth in total moto
Slide 6: 1. Divisional Performance Summary
1. Divisional Performance Summary For personal use only New Motorcycles Revenue up 3% Gross profit down 13% Used Motorcycles Revenue up 25% Gross profit up 25% Retail accessories Revenue up 45% and parts Gross profit up 48% Servicing Revenue up 10% and repair Gross profit up 9% Finan
Slide 7: 2. Financial Results
For personal use only 2. Financial Results MotorCycle Holdings
Slide 8: 2. Record revenue of $172.8m due to Cassons/MCA
2. Record revenue of $172.8m due to For personal use only Cassons/MCA H1 Group Revenue up 24.1% ($M) 302 235 209 162 Second 173 164 115 Half 149 104 First 173 Half 139 121 105 2013 2014 2015 2016 2017 2018 2019 MotorCycle Holdings 8
Slide 9: 2. Profit and Loss Summary
2. Profit and Loss For personal use only Summary $ Million 1H FY 19 1H FY18 % Change Sales 172.8 139.3 24.1% • Total sales of $172.8 million, up 24.1% Cost of sales -122.2 -101.0 • Gross profit margin of 29.3% Gross Profit 50.7 38.3 32.4% Gross Profit margin 29.3% 27.5% • Cost of Doing Business $40.
Slide 10: 2. Balance Sheet and Dividends
2. Balance Sheet and Dividends For personal use only Capital Structure $ Million Cash at bank $5.1 million 1H FY 19 1H FY18 • Inventory decrease of $3.6 million Cash and Cash Equivalents 5.1 2.5 reflects better stock management Trade and Other Receivables 7.0 6.8 Inventories 83.8 87.4 • Net leverage
Slide 11: 3. Trading conditions
For personal use only 3. Trading conditions MotorCycle Holdings
Slide 12: 3. Cyclical downturn impacts new motorcycle unit sales
3. Cyclical downturn impacts new For personal use only motorcycle unit sales Industry new motorcycle sales MTO new motorcycles sales up 4.2% down 11.3% 117,557 113,011 110,787 112,587 106,220 101,114 9,575 9,089 53672 53396 50908 53084 7,538 51008 Second 47942 4146 4643 6,484 6,415 Half 6,016 3507 2
Slide 13: 3. Used motorcycle unit sales rise in flat market
3. Used motorcycle unit sales rise in flat For personal use only market QLD Dealer used motorcycle sales MTO used motorcycle sales decreased 1.0% increased 19.9% 8,179 7,102 6,726 6,441 6,559 6,495 7,221 6,055 6,393 3284 5,888 5,890 4256 3320 5,335 3122 3071 3230 3603 2860 Second 3140 Half 2872 2741
Slide 14: 3. Harley Davidson continues to struggle
3. Harley Davidson continues to struggle For personal use only Harley unit sales down 24% vs total Australian Road Bike market decline of 13.8% MTO comparative sales down 11.5% for the half, gaining market share Harley is the biggest profit contributor to business Rebate targets have been lo
Slide 15: 4. Operational review
For personal use only 4. Operational review MotorCycle Holdings
Slide 16: 4. Cassons
4. Cassons For personal use only Cassons trading in line with expectations More aggressive approach to driving sales and clearing stock through better pricing impacted margins Slight increase in 3rd party sales Management strengthened Bell helmets added to the portfolio, adding significant
Slide 17: 4. MCA
4. MCA For personal use only Used bikes sold through 4 MCA stores with an additional 2 expected to start trading by end of financial year Searching for new MCA sites but nothing in pipeline at the moment Profit well above last year due to wage savings in stores MotorCycle Holdings 17
Slide 18: 4. Dealerships
4. Dealerships For personal use only Acquisition opportunities in current challenging market Particular focus on NSW and Vic to increase geographic spread Cost savings Continue to grow used bike sales MotorCycle Holdings 18
Slide 19: 4. Finance JV
4. Finance JV For personal use only Formed finance JV with Allied Credit Allied Credit is a major industry player in motorcycle finance Business performing according to expectations, however profit below expectations due to changes in revenue recognition Syndication expected to be complete b
Slide 20: 4. Hayne Royal Commission
4. Hayne Royal Commission For personal use only The Hayne Royal Commission has made a number of recommendations including: Removal of POS exemption for dealers to hold Australian Credit Licenses All of our dealerships are already held accountable under legal agreements with our financiers to com
Slide 21: 5. FY2019 Outlook
For personal use only 5. FY2019 Outlook MotorCycle Holdings
Slide 22: 5. FY2019 focus
5. FY2019 focus For personal use only Improve the Current Network Improve profitability of existing dealerships Continue to grow used motorbike sales through existing dealerships Reduce cost base to reflect current trading conditions Grow Identify new sites for MCA stores Increase used mot
Slide 23: 5. Trading Outlook
5. Trading Outlook For personal use only Market continues to be challenging Potential for consolidation in current trading environment Focussed on productivity, cost reductions and increasing profitability MotorCycle Holdings 23
Slide 24: MotorCycle Holdings
For personal use only MotorCycle Holdings Motorcycle Holdings Investor Presentation
MotorCycle Holdings — H1 FY2019 Earnings Presentation on 6ix