Bapcor Ltd · ASX:BAP
Bapcor — Investor Day (November 2022)
74 slides from Bapcor's investor day presentation, Nov 22, 2022
Slide 1: Bapcor Investor Day Presentation
ASX Announcement 22 November 2022 Bapcor Investor Day Presentation Bapcor Limited (ASX:BAP) will be holding an Investor Day in Melbourne today, 22 November 2022, commencing at 10.00am (AEDT). Participants not attending in person can join the Investor Day virtually via the following link: https://mac
Slide 2: The Road Ahead - Better Than Before
INVESTOR DAY PRESENTATION The Road Ahead - Better Than Before 22 NOVEMBER 2022 1
Slide 3: Safety first
Safety first Evacuation briefing, 80 Collins Street Melbourne 2
Slide 4: Welcome and introduction
Welcome and introduction Noel Meehan CEO and Managing Director 3
Slide 5: Presenting & attending today - our executive team
Presenting & attending today - our executive team Noel Meehan Steve Drummy Martin Storey CEO and Managing Executive General Executive General Director Manager – Trade Manager – New Zealand Stefan Camphausen Craig Magill Tim Cockayne Chief Financial Officer Executive General Executive General Manager
Slide 6: Asia Pacific's leading provider of vehicle parts, accessories, equipment, service and solutions
We are Asia Pacific’s leading provider of vehicle parts, accessories, c.$1.8B 1,100+ 5,000+ FY22 REVENUE LOCATIONS IN TEAM MEMBERS equipment, service and AUSTRALIA, NEW ZEALAND AND solutions THAILAND Australia's leading trade Industry leaders in Services New Zealand’s Premium parts and Trusted provi
Slide 7: Bapcor's investment proposition
Bapcor’s investment proposition Our markets are strong and Our business is defensive and Our people are our most Our team is passionate about continue to grow resilient important asset delivering for our customers • Ongoing pipeline of organic • 80% of revenue in trade and • Organisational structure
Slide 8: Our automotive aftermarkets remain strong, resilient and offer organic growth
Our automotive aftermarkets remain strong, resilient and continue to offer good organic growth opportunities Average Australian Vehicle Age1 Australian number of Vehicles2 AUS CAR PARC (Years) ('M) > No. of vehicles – 20m 11 10.9 21.8 > New cars sold p.a. – 1.1m 22 10.6 > Ave. age of vehicles – 11 y
Slide 9: Bapcor's transition to Zero Emission Vehicles
Bapcor’s transition to Zero Emission Vehicles Current state of the Australian EV market › Timing of ZEV take-up is fluid due to availability, cost, infrastructure, PROJECTED EV SHARE OF CAR PARC IN 20301 government policies, evolving technologies and consumer behavior › There are 24 ZEV models avail
Slide 10: Bapcor's approach to leadership in the ZEV market
Bapcor’s approach to leadership in the ZEV market › Aspiration to also be a market leader in the supply of ZEV parts and technologies to the automotive aftermarket › Initiation of “Project Zero”, applying a One Bapcor approach › Recent initiatives and research identifies opportunities across our in
Slide 11: Our Asia Pacific footprint
Our Asia Pacific footprint THAILAND 6 6 NT 13 4 4 5 QLD 186 49 46 91 WA 81 16 20 45 Trade ACT SA 7 Specialist Wholesale 84 3 2 2 17 11 56 Retail NSW Other (Licensee) 184 VIC 58 41 85 203 63 43 97 NZ TAS 219 19 76 12 131 8 1 10 Hard-to-replicate footprint provides competitive advantage 10
Slide 12: Our journey so far…
Our journey so far… Burson founded Burson Group Expansion of Burson Group By Garry Johnson 50th Limited becomes Bapcor into and Ron Burgoine anniversary in Victoria, Lists on the ASX Bapcor Limited Asia Australia 1971 2014 2015 2016 2017 2018 2019 2020 2021 2022 Acquisition of Acquisition of Acquisi
Slide 13: Creating a unique automotive aftermarket ecosystem
… creating a unique automotive aftermarket ecosystem … Consumer Service Australia/ Thailand/ NZ Trade Retail SUPPLY CHAIN Wholesale Manufacturers Vertically integrated network and specialist go-to-market channels creating competitive advantage 12
Slide 14: Growing a diversified and resilient business
… and growing a diversified and resilient business FY14 FY15 FY16 FY17 FY18 FY19 FY20 1 FY21 1 FY22 1 Revenue ($’m) 342 375 686 1,014 1,237 1,297 1,463 1,762 1,841 EPS (cents) 11.9 13.6 17.9 24.4 31.0 33.4 30.2 38.3 38.8 EBITDA ($’m) 36.0 41.5 77.0 117.4 150.0 164.6 217.1 279.5 291.5 EBIT ($’m) 31.6
Slide 15: Market & Trading Update
Market & Trading Update Market Trading Overall continued positive Ongoing positive revenue growth market momentum: year-to date - Trade and Wholesale markets with robust Temporary margin compression growth expected as price adjustments lag - Lower market growth currently accelerated input cost with
Slide 16: The building blocks for growth
The building blocks for growth Organic and inorganic growth is Complement strong brands with Harness the power of in Bapcor’s DNA, alongside an ongoing private label collaboration through One improved capital allocation penetration Bapcor to drive intercompany framework sales Better than Before to i
Slide 17: Natural evolution of strategy, with unchanged focus on our customers
Natural evolution of strategy, with BETTER unchanged focus on Culture THAN BEFORE our customers CUSTOMER Efficiency Strategy ONE BAPCOR Building on our strong foundations, to further improve performance, reduce risk and underpin continued growth 16
Slide 18: Environmental, Social and Governance
Environmental, Social and Governance POSITIVELY IMPACT ENVIRONMENTAL ETHICAL SUPPLY GOOD GOVERNANCE – OUR COMMUNITY SUSTAINABILITY CHAIN/PROCUREMENT SUPPORTING AND DEVELOPING OUR PEOPLE › Stakeholder engagement › Efficiently use our resources › Ethical sourcing and › Live our values supply chain tra
Slide 19: Bapcor's Health, Safety & Wellbeing Program
Bapcor’s Health, Safety & Wellbeing Program INVESTING IN A ONE BAPCOR SAFETY CULTURE AND PROGRAM SAFETY PERFORMANCE - TRIFR TO MATCH THE SCALE AND 31 MATURITY OF OUR BUSINESS 30.13 Improving, 29 but more to do › Investing in specialist safety resources 27 and uplifting capability aligned with the sc
Slide 20: Bapcor Values
WE DO THE RIGHT THING We are open, honest and respectful. We do what we say and say what we do. WE ARE IN IT TOGETHER We’re all part of the Bapcor family. We support each other, include everyone and have fun along the way. WE GIVE A DAMN We care about what we do and are proud of how we do it. We are
Slide 21: Agenda
Agenda PERFORM 10.00 – 11.15 TRANSFORM 11.30 – 12.30 Business Fundamentals Our People - Merryl Dooley Trade - Steve Drummy Supply Chain - Abdul Jaafar Wholesale – Craig Magill Technology - Morris Lieberman Retail – Tim Cockayne Better than Before Introduction – Noel Meehan New Zealand – Martin Store
Slide 22: Trade
PERFORM Trade Steve Drummy Executive General Manager 21
Slide 23: Trade overview
Trade overview Building on the strong foundations of our Burson heritage › Portfolio of market-leading brands and businesses › Burson, Precision and Blacktown Auto Spares in Australia & Burson Thailand › Burson is the largest and most established business, focused on the distribution of non-discreti
Slide 24: Trade
Trade 6 Our strong and sustainable business fundamentals WHERE WE COME FROM Burson 210 4 › Independent trade customer focused business Blacktown/ 8 16 49 › Trade expertise, history and local relationships Precision 17 58 › Track record of delivering results whilst growing Thailand 6 63 3 our network
Slide 25: Trade
Trade Our growth pipeline remains exciting and strong – enabling us to win WHERE WE PLAY › Whole-of-Trade: independent and chain motor repairers › Burson: Solid foundations with continued organic growth opportunity › Precision: World leading brands, complete workshop setup › Blacktown Auto Spares: D
Slide 26: Wholesale
PERFORM Wholesale Craig Magill Executive General Manager 25
Slide 27: Wholesale overview
Wholesale overview Innovating and growing our product and network portfolio › Importer, aggregator and distributor for all of Bapcor; and industry leader supplying market leading brands across specialized categories › Highly entrepreneurial culture built and maintained through our acquisition and in
Slide 28: Wholesale
Wholesale Our strong and sustainable business fundamentals 4 46 WHERE WE COME FROM 20 › Individual specialist business heritage with strong 11 market positions built on quality products and brands 41 › Foundations of Truckline and Wano completed and 2 8 well positioned to scale and lead the market i
Slide 29: Wholesale
Wholesale Our growth pipeline remains exciting and strong – enabling us to win WHERE WE PLAY › Strong specialist market positions with growth trajectory across all categories › Import, aggregate and distribute branded and private label product internally and externally › Technically based specialist
Slide 30: Retail
PERFORM Retail Tim Cockayne Executive General Manager 29
Slide 31: Retail overview
Retail overview Capturing the market opportunity via organic growth and operational excellence › Strategically positioned retail portfolio providing solution-based consumer experiences with significant organic runway › Realignment of brand and network across owned and franchised stores in metro and
Slide 32: Retail
Retail Our strong and sustainable business fundamentals 5 WHERE WE COME FROM Total Owned Franchised 91 › Completed network re-alignment via Autobarn 136 93 43 45 closures, franchise rationalisation and AutoPro/ Sprint/ 148 12 136 56 re-branding into metro and regional Opposite Lock 85 › Introduced c
Slide 33: Retail
Retail Our growth pipeline remains exciting and strong – enabling us to win WHERE WE PLAY › Full retail offer providing an end-to-end solution for customers in metro and regional Australia › Large format metro stores and smaller format regional stores › Pricing architecture realignment completed wit
Slide 34: New Zealand
PERFORM New Zealand Martin Storey Executive General Manager 33
Slide 35: New Zealand overview
New Zealand overview Building on our market leading positions with continued innovation and growth › Integrated trade and specialist wholesale group with comprehensive national coverage › Attractive market structure as we service a complex car parc › Strategic portfolio of “hero” and “own brand” pro
Slide 36: New Zealand
New Zealand Trade Total 76 BNT, Truck & Trailer, Autolign 82 North Island SWG 12 HCB, JAS, Precision Our strong and sustainable business fundamentals Equipment Other 131 Battery Town, Shock Shop (Licencee) 38 Lower North Island WHERE WE COME FROM › Leading trade and wholesale distribution brands wit
Slide 37: New Zealand
New Zealand Our growth pipeline remains exciting and strong – enabling us to win WHERE WE PLAY › Serving the automotive, commercial and marine trade markets with the most comprehensive aftermarket parts and equipment offer in NZ › Our customers include service workshops, specialist auto electrical p
Slide 38: Summary
PERFORM Summary Noel Meehan CEO and Managing Director 37
Slide 39: Questions & Answers
PERFORM Questions & Answers 38
Slide 40: Break
PERFORM Break 39
Slide 41: Agenda
Agenda PERFORM 10.00 – 11.15 TRANSFORM 11.30 – 12.30 Business Fundamentals Our People - Merryl Dooley Trade - Steve Drummy Supply Chain - Abdul Jaafar Wholesale – Craig Magill Technology - Morris Lieberman Retail – Tim Cockayne Better than Before Introduction – Noel Meehan New Zealand – Martin Store
Slide 42: Our People
TRANSFORM Our People Merryl Dooley Chief People and Culture Officer 41
Slide 43: Our people
Our people WHERE WE COME FROM EMPOWERING OUR FRONT LINE › We have 5,500 passionate team members – large employer THE PAST THE FUTURE across diverse businesses and geographies CORPORATE LEADERSHIP CUSTOMERS › Values-led culture › Somewhat fragmented systems and processes Front Line Team Members › Som
Slide 44: Sustainable transformation requires a dual focus on performance and health
Sustainable transformation requires a dual focus on performance and health BETTER THAN BEFORE PERFORMANCE ORGANISATIONAL › Define our purpose HEALTH › Align our team members The operational and The way we work together › Simplify our training, talent commercial settings in our as an organisation tha
Slide 45: Supply Chain
TRANSFORM Supply Chain Abdul Jaafar EGM – Supply Chain 44
Slide 46: Supply chain
Supply chain WHERE WE COME FROM › Traditional supply chain model managed at business unit level › Establishment of Bapcor’s first state-of-the-art centralised distribution facility in Victoria › Network expansion of centralised distribution, with the build of our new Distribution Centre Queensland ›
Slide 47: Supply chain - our current network
Supply chain - our current network Distribution Centre Businesses DCV Burson, Precision, AAD, Autopro, Autobarn, Opposite Lock, Toperformance, Bearing Wholesalers* Welshpool AAD, Autopro, Autobarn Hemmant Burson Willawong AAD, Autopro, Autobarn Redbank Burson, Autopro, Autobarn, OL, Federal Batterie
Slide 48: A new strategic direction for our supply chain
A new strategic direction for our supply chain Key to Our Lessons Learnt Supply Chain Centralised Changing Customer The Right Stock, Success is Our Post-Pandemic Ecosystem Functions Demands In Stock People Engaged and Global supply chain End-to-end Best-in-class Critical shift towards Inventory pass
Slide 49: DCV and DCQ update
DCV and DCQ update › Emergency order fulfillment rate of >99% through DCV in recent weeks, and significant uplift in supply rates across all consolidated DC’s nationally › Improved last mile visibility to our network › DCV: on track to operational steady-state • Bearing Wholesalers successfully tran
Slide 50: Technology
TRANSFORM Technology Morris Lieberman Chief Technology Officer 49
Slide 51: Technology
Technology WHERE WE COME FROM › Acquisition of many successful individual businesses with own IT and systems approach › Various existing & acquired platforms and systems had become an impediment to One Bapcor enablement of our front line teams › Creating a new One Bapcor Technology & Digital functio
Slide 52: Digitalising Bapcor empowers our stakeholders
Digitalising Bapcor empowers our stakeholders CUSTOMERS TEAM MEMBERS COMMUNITY SUPPLIERS › Initial digital priority driven by ‘Customer Value’ lens › Progress on our Digital opportunities to be aligned with approach Better Than Before priorities › Key projects and investment have included: › Fit-for
Slide 53: Better than Before
TRANSFORM Better than Before Noel Meehan CEO and Managing Director 52
Slide 54: The opportunity ahead of us
The opportunity ahead of us Bapcor’s portfolio of businesses has a track record of strong performance, with growth opportunities ahead Bapcor has grown rapidly via acquisitions, but has not leveraged the scale opportunities of a fully integrated business Bapcor currently operates with limited Group
Slide 55: Where we are going
Where we are going From To Our businesses Stand-alone businesses with limited cross-unit Strong businesses that collaborate to generate synergies value for customers and Bapcor Separate business unit economics Full value-chain economics and incentives Our operating model Distinct operating procedure
Slide 56: The Road Ahead – Better Than Before: Bapcor's strategic transformation
The Road Ahead – Phase 1: Diagnostics BETTER THAN BEFORE “Better Than Before”: Bapcor’s strategic transformation Phase 2: Commitment › Better than Before launched in July › Multi-phase transformation to enable additional, sustainable growth Timeline: › Phase 1: Diagnostics (complete) › Phase 2: Deta
Slide 57: Better than Before program goal of > $100m Net EBIT Benefit
Better than Before program goal of > $100m Net EBIT Benefit, enhanced ROIC & organisational health Better than Before Net EBIT Benefit: ~ $100m › Goal to realise at least $100m net EBIT Benefit in FY25* from Better than Before 15-25% program 35-45% ~100m › Further improved Return on 35-45% Invested
Slide 58: Commercial Excellence
TRANSFORM Commercial Excellence Steve Drummy / Tim Cockayne 57
Slide 59: Commercial excellence levers
Commercial excellence levers Analytical pricing Digital / e-commerce › Investments to drive traffic and UI/UX › Optimise price setting at micro-segment level upgrades to increase conversion rate using analytics from millions of transactions Digital / Analytical › › Lift proportion of digital sales a
Slide 60: Commercial excellence: opportunities
Commercial excellence: opportunities Optimise price setting Improving pricing disciplines Linking discounts to value Analytical pricing Increase share in key Enabling improved sales accounts force performance Key accounts and salesforce 59
Slide 61: COGS & Operational Excellence
TRANSFORM COGS & Operational Excellence Martin Storey / Abdul Jaafar 60
Slide 62: COGS & Operational excellence levers
COGS & Operational excellence levers Category management Increase internalisation Supply chain optimisation External spend › Consolidate supplier spend › Increase proportion of › Optimise offshore › Consolidate vendors for across the business for internal sales (wholesale to warehouse network extern
Slide 63: COGS & Operational excellence: opportunities
COGS & Operational excellence: opportunities Streamline spend flows Ensure best price per sku Category management and internalised sales Improve inventory Consolidating external positioning Consolidating shipments suppliers Supply chain and external spend 62
Slide 64: Financial and Capital Framework
Financial and Capital Framework Stefan Camphausen CFO 63
Slide 65: Investment required to enable Better Than Before
Investment required to enable Better Than Before 1) “Transformation Kick-Start”: early-phase Opex of ~$20-25m (~70-80% in FY23, and balance in FY24) One- Off ‐ Interim critical capabilities support Net EBIT benefit phasing ‐ Transformation infrastructure profile of Better than Overall Before Outcome
Slide 66: Capital Management Framework
Capital Management Framework OPERATING CASHFLOW Improved cash realisation SUSTAINABLE CAPITAL STRUCTURE DIVIDENDS DEBT OBLIGATIONS CORE CAPEX GROWTH CAPEX Sustainable payout ratio of 50-60% Relating to bank debt and lease Expenditure to sustain normal Expenditure allocated for growth and (based on c
Slide 67: Summary
Summary Noel Meehan CEO and Managing Director 66
Slide 68: How we will deliver
How we will deliver Build deeper capabilities in select Create transformation capability Deploy a consistent Bapcor Way areas that drive value across Bapcor › Build central capabilities that benefit › Accelerate implementation and One › Introduce standard operating processes to across Bapcor (e.g. p
Slide 69: Confidence in executing Better Than Before
Confidence in executing Better than Before We have a diverse talented group of leaders and passionate team members in the business with proven track record We are building on Bapcor’s strong foundations, and the transformation is a natural evolution of Bapcor’s business model and maturity We have a
Slide 70: Our Perform & Transform strategy will deliver
Our Perform & Transform strategy will deliver For all of our stakeholders, A financially stronger A business set up for built on an unwavering business with better sustained, long-term focus on customers, and earnings performance and success driven by our team higher capital efficiency members AND W
Slide 71: Thank you & Questions and Answers
Thank you & Questions and Answers 70
Slide 72: Appendix
Appendix ee Bapcor .
Slide 73: Disclaimer
Disclaimer The material in this presentation has been prepared by Bapcor Limited (“Bapcor”) ABN 80 153 199 912 and is general background information about Bapcor’s activities current at the date of this presentation. The information is given in summary form and does not purport to be complete. Infor
Slide 74: Asia Pacific's leading provider of vehicle parts, accessories, equipment, service and solutions
Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions