Slide 1: A.P. Eagers 2015 First Half Results
For personal use only A.P. Eagers 2015 First Half Results August 2015 Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved.
Slide 2: 2015 Half Year Highlights
2015 Half Year Highlights For personal use only • Record PBT $59.5m up 29.5% • Record NPAT $44.1m up 32.2% • Record Basic EPS 24.5 cents up 31.0% • Record Full Franked interim dividend of 12.0 cents up 33% • Strong results from core Car Retailing segment • Strong results from car retail acquisitions
Slide 3: Australian New Vehicle Sales - June YTD 2015
Australian New Vehicle Sales - June YTD 2015 For personal use only • June YTD up 3.3% • Correct balance between supply and demand. • Retail industry evolving following GFC, manufacturing exits, and retailer consolidation :- creating some risks and many opportunities. • Generational change creating a
Slide 4: Affordability
Affordability For personal use only CommSec Report 16 March 2015 Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 4
Slide 5: Exchange Rate Impact
Exchange Rate Impact For personal use only • 80% of cars sold in Australia are imported from Japan, Thailand, Korea and EU Countries. • Manufacturers have long planning horizons and diversified exposures; - Product and production planning based on 3-7 year cycles. - Most manufacturers pursuing globa
Slide 6: Exchange Rates
Exchange Rates For personal use only YTD New vehicle Sales (VFACTS) AUD/THB Monthly 5 Years - 578,427 Country of Origin 40 30 7% 5% 20 Japan 29% 8% Thailand 10 EU Countries 0 12% Korea Australia AUD/EUR Monthly 5 Years 1.0 USA Other 0.5 17% 22% 0.0 AUD/JPY Monthly 5 Years 120 Sep 13 to Feb 14 Avg =
Slide 7: Affordability
Affordability For personal use only 90 Day Bank Bill Rate 9.00 8.00 7.00 6.00 5.00 % 4.00 3.00 2.00 1.00 0.00 Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 7
Slide 8: 2015 Full Year Highlights - Financial
2015 Full Year Highlights - Financial For personal use only • Record statutory basic EPS of 24.5 cents an increase of 31%. • Fully franked interim dividend of 12 cents up 33%. • EBITDA increased to $77.5m up 24%. • Record statutory PBT increased by 29.5% to $59.5m • Cash flow from operations of $50.
Slide 9: Financial Summary
Financial Summary For personal use only $ Million 1H 2015 1H 2014 Change Revenue 1639.5 1375.8 Up 19% EBITDA 77.5 62.7 Up 24% EBIT 70.9 56.9 Up 25% PBT 59.5 46.0 Up 29% PAT 44.1 33.3 Up 32% Cash from operating 50.0 42.8 Up 17% activities NTA/share 2.61 2.38 Up 10% Net gearing excluding 23.2% 25.8% D
Slide 10: Balance Sheet - Summary
Balance Sheet - Summary For personal use only 30/06/15 $m • New vehicle inventory and receivables CA-CL (excl. held for sale) 101.4 funded by bailment debt. Freehold Property (incl. held for sale) 272.4 • Parts and most used vehicle inventory is balance sheet funded. Other Non Current Tangible 329.1
Slide 11: Earnings Per Share
Earnings Per Share For personal use only EPS 1H2015 Bridge 27.0 0.4 (0.3) 24.5 C 25.0 0.6 e 5.1 n 23.0 t s 21.0 p e 18.7 r 19.0 S h 17.0 a r e 15.0 IH2015 1H2014 Operational InterestExp. Investment Dilution MTAI,Other interest) Income, (net of Result AHG Friday, August 28, 2015 © 2015 AP Eagers Limi
Slide 12: Financial Trends – PBT Underlying
Financial Trends – PBT Underlying For personal use only 80.0 76.3 Operating Earnings PBT Underlying 70.1 70.0 61.1 61.9 59.0 60.1 57.8 58.5 60.0 54.2 52.1 50.0 45.3 46.1 44.2 41.2 42.0 40.6 $ million 38.2 37.2 40.0 35.6 36.4 32.8 33.8 28.3 27.9 30.0 25.2 24.9 23.5 23.3 20.0 16.6 9.6 10.0 - 2008 2008
Slide 13: Financial Trends – Operating Margin
Financial Trends For personal use only Operating Margin 5.0% Operating Earnings Margin % Linear (Operating Earnings Margin %) 4.6% 4.7% 4.6% 4.5% 4.4% 4.3% 4.1% 4.0% 4.0% 3.9% 3.6% 3.5% 3.4% 3.0% Includes AHG dividend from 2012. 2.5% 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H2015 Friday, August
Slide 14: Financial Trends – EPS Statutory (Basic)
Financial Trends For personal use only EPS Statutory (Basic) 50.0 June 1H December 2H 45.0 43.0 Gov't stimulus 24.3 40.0 36.4 34.0 35.0 GFC/Lehman Bros 18.2 17.7 30.0 25.5 24.4 Cents 25.0 21.0 13.0 13.4 24.5 20.0 10.4 18.2 18.7 15.0 16.3 9.8 10.0 12.5 1.7 11.0 10.6 8.1 5.0 0.0 2008 2009 2010 2011 20
Slide 15: Financial Trends – Dividend
Financial Trends For personal use only Dividend 30.0 27.0 Interim Dividend Final Dividend 25.0 23.0 20.0 20.0 Cents per share 16.0 18.0 15.0 15.0 12.4 12.8 11.6 13.0 8.6 8.8 10.4 10.0 7.6 8.2 6.6 7.2 7.2 8.0 6.2 5.6 4.8 4.4 4.8 4.0 12.0 5.0 3.6 3.8 3.0 3.4 8.0 9.0 2.4 7.0 4.4 4.4 4.4 4.6 5.6 2.6 2.8
Slide 16: Segment Results
Segment Results For personal use only Car retailing $m • Strong car retailing in Qld & NSW with positive -20.0 0.0 20.0 40.0 60.0 80.0 contributions from acquisitions. Strong trading in parts and service businesses. Car Retailing 31.1 47.7 Truck Retailing 3.4 Truck retailing 0.8 • Challenging new an
Slide 17: Strategy (Focus: Grow EPS & Pay Larger Dividends)
Strategy (FOCUS: GROW EPS & PAY LARGER DIVIDENDS) For personal use only Exceed stakeholder expectations – customers, employees, partners (manufacturers), Growth by selective shareholders and community. acquisition Development of enhancements and complimentary services Business Optimisation – continu
Slide 18: Strategy – Business Optimisation
Strategy (FOCUS: GROW EPS & PAY LARGER DIVIDENDS) For personal use only Business Optimisation – Short Term 1H • Replacement and repair opportunities continue from 60,000 hail damaged vehicles in SEQ. • Strong benefits from Ian Boettcher Motors acquisition and integration. • Strong Management perform
Slide 19: Previous Parts Warehouse
Previous Parts Warehouse For personal use only Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 19
Slide 20: New Parts Facility
New Parts Facility For personal use only Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 20
Slide 21: New Parts Facility
New Parts Facility For personal use only Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 21
Slide 22: New Parts Facility
New Parts Facility For personal use only Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 22
Slide 23: New Parts Facility
New Parts Facility For personal use only Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 23
Slide 24: New Volkswagen
New Volkswagen For personal use only Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 24
Slide 25: Austral Volkswagen, Newstead
Austral Volkswagen, Newstead For personal use only Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 25
Slide 26: New & Existing Volkswagen
New & Existing Volkswagen For personal use only Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 26
Slide 27: Existing Land Rover, Jaguar & Volvo
Existing Land Rover, Jaguar & Volvo For personal use only Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 27
Slide 28: Existing Land Rover, Jaguar & Volvo
Existing Land Rover, Jaguar & Volvo For personal use only Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 28
Slide 29: Jaguar Land Rover, Newstead
Jaguar Land Rover, Newstead For personal use only Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 29
Slide 30: Benefit from Property Sales
Benefit from Property Sales For personal use only • Financial strength and flexibilty with surplus cash to fund growth via quality acquisitions • Delayed property settlement proceeds will deliver significant free cash over next 2 years 2016 2017 Stage 1 - 44 Ipswich Rd/ 33 Jurgens Street, Woolloonga
Slide 31: Strategy (Focus: Grow EPS & Pay Larger Dividends)
Strategy (FOCUS: GROW EPS & PAY LARGER DIVIDENDS) For personal use only Exceed stakeholder expectations – customers, employees, partners (manufacturers), Growth by selective shareholders and community. acquisition Development of enhancements and complimentary services Business Optimisation – continu
Slide 32: Strategy – Enhancement & Complimentary Services
Strategy (FOCUS: GROW EPS & PAY LARGER DIVIDENDS) For personal use only Development of Enhancement & Complimentary Services – Medium / Long Term • MTAI Insurance (27 yrs. old, APE 21%) – Operating company sold to Suncorp (August 2014) • www.carsguide.com.au (3.5 yrs. old, APE 7.5%) • www.carzoos.com
Slide 33: For personal use only
For personal use only Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 33
Slide 34: Global Trends In Used Cars
For personal use only Global Trends In Used Cars Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 34
Slide 35: Used Car Market – Major Global Trends
Used Car Market – 3 Major Global Trends For personal use only Stage 1 Disruption: Stage 2 Disruption: ‘No Dealership’ Model Big Box / Tech Fuelled Disruption Fixed Price Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 35
Slide 36: The big are getting bigger!
The big are getting bigger! For personal use only Source: Carmax Investor Relations Presentation, May 2015 Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 36
Slide 37: A new frontier of competition fuelled by technology
And there is a new frontier of competition fuelled by technology. For personal use only Wall Street Journal, May 31 2015 Fortune.com, July 20 2015 Techcrunch.com, May 27 2015 Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 37
Slide 38: Mandate to deliver compelling branded customer experiences
At the heart of these trends is a serious mandate to deliver compelling branded customer experiences. For personal use only Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 38
Slide 39: For personal use only
For personal use only Link: Link: https://www.youtube.com/watch?v=kwSHSVcfibQ https://www.youtube.com/watch?v=lgS7fT0S-NY Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 39
Slide 40: Why used cars?
For personal use only Why used cars? Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 40
Slide 41: APE Vehicle Sales 2014
APE Vehicle Sales 2014 For personal use only A.P Eagers New Vehicle Sales A.P. Eagers Used Vehicle Sales Total 44,966 + 5.5% (4.0% of National Market) Total 25,447 + 8.8% (Retail used 19380) Cars - Qld Retail Cars - Qld 5% 3% Cars - NT Retail Cars - NT Cars - NSW Retail Cars - NSW 23% 23% 33% Cars -
Slide 42: More Used Car Sales leads to more New Car Sales
For personal use only More Used Car Sales leads to more New Car Sales *1 RTA NSW Data. VFACTS NSW Share Assumption Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 42
Slide 43: Strategy (Focus: Grow EPS & Pay Larger Dividends)
Strategy (FOCUS: GROW EPS & PAY LARGER DIVIDENDS) For personal use only Exceed stakeholder expectations – customers, employees, Growth by selective partners (manufacturers), acquisition shareholders and community. Development of enhancements and complimentary services Business Optimisation – continu
Slide 44: Growth Timeline – Revenue
Growth Timeline – Revenue For personal use only Acquisitions, Organic Growth and Disposals 3,500,000 Revenue Eagers Mitsubishi 3,000,000 Eblen Bayside Caloundra Subaru City Autos Northern 2,500,000 Honda/Kia Mar 11 Feb 06 April 10 Beaches Infiniti Reynella Land Rover Centre Subaru Brisbane Adtrans J
Slide 45: Growth Timeline – PBT underlying
Growth Timeline – PBT underlying For personal use only Acquisitions, Organic Growth and Disposals 120.0 Eagers PBT Underlying Eblen Mitsubishi Subaru 100.0 Mar 11 Bayside Daimler Reynella Honda/Kia Benz Subaru Kloster Caloundra Northern Feb 06 Trucks 80.0 City Autos Beaches May 14 Motor Adelaide Apr
Slide 46: AHG Investment
AHG Investment For personal use only • 60,904,350 shares held @ 30/06/2015 19.9% • AHG investment valued at $243m @ 3.99 (30/06/15) • No change in shares invested in 2015 • AP Eagers average cost per share $3.05 • 2015 Fully Franked after tax dividends - March $5.48m (2014 $4.47m) - Oct $7.92m (2014
Slide 47: The Next 12-24 Months
The Next 12-24 Months For personal use only • Complete Land Rover, Jaguar and Volvo move from Fortitude Valley to Newstead • Improve truck retailing division • Continue Used Car expansion with AP Eagers existing franchised outlets • Launch new stand alone Carzoos direct model • Launch new branded pr
Slide 48: Forward-Looking Statements
Forward-Looking Statements For personal use only This document may contain forward-looking statements, forecasts and estimates made by the Company (forward-looking statements), including the anticipated future performance of the Company and the market in which it operates. These forward-looking stat
Slide 49: Appendix
For personal use only Appendix Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 49
Slide 50: A.P. Eagers Company Profile
For personal use only A.P. Eagers COMPANY PROFILE Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 50
Slide 51: AP Eagers Today (June 2015)
AP Eagers Today (June 2015) For personal use only • 102 year old automotive retail group founded in 1913 • 58 years as a listed public company – dividend paid every year • A.P. Eagers owns $272m of prime real estate • Represents all 12 of the top 12 selling vehicle brands in Australia and 27 car bra
Slide 52: AP Eagers Volume Car Brands
AP Eagers Volume Car Brands For personal use only Represents 12 of the top 12 selling volume car brands in Australia Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 52
Slide 53: AP Eagers Luxury Car Brands
AP Eagers Luxury* Car Brands For personal use only Represents 8 of the top 9 selling luxury car brands in Australia * Luxury is defined as luxury vehicle selling more than 500 units annually (V Facts) Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 53
Slide 54: AP Eagers Truck and Bus Brands
AP Eagers Truck and Bus Brands For personal use only Representing 12 truck and bus brands Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 54
Slide 55: Revenue by State / % of Group Revenue
Revenue by State / % of group Revenue (2015 Annual Estimate) For personal use only AP Eagers $3.4 billion revenue $0.15bn (5%) $1.82bn (44%) $0.0bn $0.63bn (23%) $0.66bn (22%) $0.15 BN (6%) $0.0 BN Friday, August 28, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 55
Slide 56: Income Opportunity Franchised Dealership
Income Opportunity Franchised Dealership For personal use only NEW CAR SALES: + Accessories + Finance + Insurance + Car Care + Trade-In USED CAR SALES: + Accessories + Finance + Insurance + Car Care + Trade-In VEHICLE SERVICE: - Value add products i.e. Tyres, wheel alignments, batteries, wiper blade