Slide 1: A.P. Eagers 2014 Full Year Results Presentation
For personal use only A.P. Eagers 2014 Full Year Results Presentation March 2015 Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 1
Slide 2: 2014 Full Year Highlights
2014 Full Year Highlights For personal use only • Record statutory profit after tax up 20%. • Record statutory basic EPS of 43.0 cents an increase of 18%. • Record underlying EPS up 21%. • Fully franked dividend of 18 cents for a record FY dividend of 27 cents up 111% over 4 years. • Car retailing p
Slide 3: National Vehicle Sales
National Vehicle Sales For personal use only 1,200,000 1,100,000 1,000,000 Other 900,000 Honda 800,000 Subaru VW 700,000 Mitsubishi 600,000 Nissan 500,000 Ford 400,000 Hyundai Mazda 300,000 Holden 200,000 Toyota 100,000 - 2008 2009 2010 2011 2012 2013 2014 Monday, March 02, 2015 © 2015 AP Eagers Lim
Slide 4: Affordability
Affordability For personal use only Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 4
Slide 5: Exchange Rate Impact
Exchange Rate Impact For personal use only • 79% of cars sold in Australia are from Japan, Thailand, Korea or EU Countries. • Manufacturers have long planning horizons and diversified exposures; - Product and production planning based on 3-7 year cycles. - Most manufacturers pursuing global common v
Slide 6: Exchange Rates
Exchange Rates For personal use only New vehicle Sales (VFACTS) - 1,113,224 Country of Origin 40 AUD/THB Monthly 5 Years 7% 30 5% 20 30% Japan 9% 10 Thailand 0 EU Countries Korea 12% Australia 1.00 AUD/EUR Monthly 5 Years USA Other 0.50 17% 20% AUD/JPY Monthly 5 Years 0.00 120 100 80 AUD/KRW Monthly
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 Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 7
Slide 8: 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 9: 2014 Full Year Highlights - Financial
2014 Full Year Highlights - Financial For personal use only • Record statutory basic EPS of 43.0 cents an increase of 18%. • Fully franked final dividend of 18 cents for a record full year dividend of 27 cents. • EBITDA increased to $138m up 13%. • Underlying NPBT increased by 22% to $106.2m • Cash
Slide 10: Financial Summary - Statutory
Financial Summary - Statutory For personal use only $ Million 2014 2013 Change Revenue 2,858.1 2,672.8 Up 7% EBITDA 138.1 122.3 Up 13% EBIT 124.9 109.9 Up 14% PBT 102.8 86.7 Up 19% PAT 76.7 64.0 Up 20% Cash from operating 98.1 76.0 Up 29 % activities NTA/share 2.38 2.34 Up 2% Gearing excluding 24.3%
Slide 11: Balance Sheet - Summary
Balance Sheet - Summary For personal use only 31/12/14 $m • New vehicle inventory and related CA-CL (excl. held for sale) 82.3 receivables funded by bailment debt. Freehold Property (incl. held for sale) 278.1 • Parts and most used vehicle inventory is balance sheet funded. Other Non Current Tangibl
Slide 12: Asset Fair Value Adjustments (before tax)
Asset Fair Value Adjustments (before tax) For personal use only $ Million 2013 2013 Balance Sheet - Freehold Property (1.7) +3.2 - Investments +1.3 +22.8 Profit or Loss - Investments 0 0 - Freehold Property (0.6) 0 - Intangible Assets 0 0 Total (1.0) +26.0 Monday, March 02, 2015 © 2015 AP Eagers Lim
Slide 13: Earnings Per Share
Earnings Per Share For personal use only EPS FY2014 Bridge 46.0 2.5 (0.6) 44.0 43.0 C e n 42.0 0.8 t 1.1 s 2.9 40.0 p e 38.0 r 36.4 36.0 S h 34.0 a r e 32.0 FY2013 FY2014 Operational InterestExp. Dilution Investment MTAI,Other Profit on interest) Income, (net of Sale Result AHG Monday, March 02, 201
Slide 14: Financial Summary - Cashflow
Financial Summary - Cashflow For personal use only Cashflow Full Year 2014 148.4 180.0 21.8 160.0 28.4 140.0 43.0 120.0 100.0 1.1 83.5 $ Million 80.0 60.0 40.0 38.4 0.4 23.8 12.1 20.0 0.0 -20.0 -40.0 Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 14
Slide 15: Financial Trends
Financial Trends For personal use only 140.0 132.0 Operating Earnings (EBITDA) 118.9 120.0 113.2 106.2 PBT Underlying 96.3 100.0 87.3 76.2 78.4 80.0 74.5 65.9 $ million 61.1 61.7 60.0 50.1 46.8 40.4 40.0 36.8 40.0 26.2 20.0 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 Operating Earnings is EBITD
Slide 16: Financial Trends
Financial Trends For personal use only Operating Margin 5.0% Operating Earnings Margin % Linear (Operating Earnings Margin %) 4.6% 4.6% 4.5% 4.4% 4.3% 4.1% 4.0% 4.0% 3.9% 3.6% 3.5% 3.4% 3.0% 2.5% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Includes AHG dividend from 2012. Monday, March 02, 2015 © 2
Slide 17: Financial Trends
Financial Trends For personal use only EPS Statutory (Basic) 50.0 December 2H June 1H 43.0 45.0 Gov't stimulus 24.3 40.0 36.4 34.0 35.0 GFC/Lehman Bros 18.2 17.7 30.0 24.4 25.5 Cents 25.0 21.0 13.0 13.4 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 2012 20
Slide 18: Financial Trends
Financial Trends For personal use only Dividend 27.0 30.0 23.0 Final Dividend Interim Dividend 20.0 25.0 16.0 20.0 Cents Per Share 18.0 12.8 11.6 12.4 15.0 15.0 8.8 13.0 8.6 7.6 6.6 7.2 10.4 10.0 6.2 5.6 8.2 4.8 7.2 8.0 4.8 4.4 5.0 3.8 4.0 3.4 3.6 9.0 2.4 3.0 7.0 8.0 4.4 4.4 4.4 4.6 5.6 2.6 2.8 3.0
Slide 19: Segment Results
Segment Results For personal use only $m Car Retailing -50.0 0.0 50.0 100.0 150.0 Strong and consistent used car results, Car Retailing 57.5 improved NSW performance, contribution from 68.8 acquisitions. Gain on sale of business. Truck Retailing 8.4 3.5 Truck Retailing 15.5 Property Very weak used t
Slide 20: Car Retailing Segment
Car Retailing Segment For personal use only FY2014 FY2013 $m $m • Consistent operational results. Revenue 2,470 2,251 • Increased asset base reflects acquisition in July and October Segment Profit before tax 68.8 57.5 hence only partial profit contribution. Total Assets 657.1 542.0 Total Liabilities
Slide 21: Truck Retailing Segment
Truck Retailing Segment For personal use only FY2014 FY2013 $m $m • Segment represent 13% of Revenue 374.2 410.8 revenue, 7% of net assets. • Very weak used truck trading Segment profit before tax 3.5 8.4 results. Total Assets 146.1 138.2 • Used truck values declined substantially impacting Total Li
Slide 22: Property Segment
Property Segment For personal use only FY2014 FY2013 • Sale and leaseback of Cardiff & Hamilton $m $m properties in Newcastle, and St Mary’s Rental Income 29.9 28.9 property in Adelaide. Segment Profit before tax 17.1 12.3 • W’Gabba property recognised as Revaluation (2.3) 3.2 deferred settlement sa
Slide 23: Investment
Investment For personal use only FY2014 FY2013 $m $m • Segment adjusted to only include Revenue 12.1 10.0 Available for Sale Investments, consistent Segment Profit before tax 9.3 7.4 with June 2014 Half Year Report. Revaluation 1.3 22.8 surplus/(deficit) (b/tax) Total Assets 234.4 195.2 Total Liabil
Slide 24: Strategy (Focus: Grow EPS & Pay Larger Dividends)
Strategy (FOCUS: GROW EPS & PAY LARGER DIVIDENDS) For personal use only Exceed stakeholder expectations – Growth by selective customers, employees, acquisition partners (manufacturers), shareholders and community. Development of enhancements and complimentary services Business Optimisation – continu
Slide 25: Strategy: Business Optimisation
Strategy (FOCUS: GROW EPS & PAY LARGER DIVIDENDS) For personal use only Business Optimisation – Short Term • Replacement and repair opportunities continue from 60,000 hail damaged vehicles in SEQ. • Strong benefits from Ian Boettcher Motors acquisition and integration. • Blacks acquisition benefits
Slide 26: 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 27: 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 yrs old, APE 7.5%) • www.carzoos.com.au
Slide 28: APE Vehicle Sales 2005
APE Vehicle Sales 2005 For personal use only Retail New 1 : 0.23 Retail Used Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 28
Slide 29: 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 30: Leading US Automotive Retailers Market Capitalisation
For personal use only Leading US Automotive Retailers Market Capitalisation *2 -*3 Autonation $6.3bn - $7.0bn Penske $3.8bn - $4.3bn Carmax $10.2bn - $14.2bn *1 RTA NSW Data. VFACTS NSW Share Assumption *2 As at 6 October 2014 *3 As at 26 February 2015 Monday, March 02, 2015 © 2015 AP Eagers Limited
Slide 31: For personal use only
For personal use only Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 31
Slide 32: Used car buying you can't get wrong.
Used car buying you can’t get wrong. For personal use only Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 32
Slide 33: For personal use only
For personal use only Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 33
Slide 34: For personal use only
For personal use only Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 34
Slide 35: www.carzoos.com.au 2014
www.carzoos.com.au 2014 For personal use only • Like for like used vehicle units up 6% • Carzoos people, process and procedure and strong market conditions produced a 50% profit up lift • Three physical locations rebranded to Carzoos • 8,700 used vehicles sold as Carzoos used cars in 2014 (45% of AP
Slide 36: www.carzoos.com.au 2015
www.carzoos.com.au 2015 For personal use only • Investing in improved new website for launch late 2015 • Investing in alternative used car channels to market for launch late 2015 • Expand Carzoos brand within AP Eagers (45% increasing to TBD) Monday, March 02, 2015 © 2015 AP Eagers Limited. All Righ
Slide 37: For personal use only
For personal use only Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 37
Slide 38: 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 39: Growth Timeline – Revenue
Growth Timeline – Revenue For personal use only Acqusitions, Organic Growth and Disposals 3,500,000 Revenue Eagers Eblen Mitsubishi 3,000,000 Bayside Subaru Caloundra Honda/Kia Mar 11 City Autos Feb 06 Reynella April 10 Northern 2,500,000 Subaru Beaches Brisbane May 14 Bill Adtrans Land Motor Rover
Slide 40: Growth Timeline – PBT Underlying
Growth Timeline – PBT Underlying For personal use only Acqusitions, Organic Growth and Disposals 120.0 Eagers PBT Underlying Eblen Mitsubishi Subaru Mar 11 100.0 Bayside Reynella Honda/Kia Subaru Caloundra Feb 06 Daimler May 14 City Autos Benz Brisbane Kloster April 10 80.0 Trucks Northern Kedron Mo
Slide 41: Employee Engagement
Employee Engagement For personal use only • Record employee engagement 2014*1 • Record low staff turnover improved from 53% (2006) now below 25% (2014) • Compares with USA Nationally 36% (2014) *2 • Increased investment in: » Future Leaders » Leadership Program » F & I Academy » Car Care Academy » C
Slide 42: The Next 12-24 Months
The Next 12-24 Months For personal use only • Continue integration of Ian Boettcher Motors and The Black Group, + $230m t/o for 2015 • Relocate Land Rover, Jaguar and Volvo to Newstead, parts to Eagle Farm • Improve truck retailing division • Continue Carzoos expansion internally and externally • De
Slide 43: 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 44: Appendix
For personal use only Appendix Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 44
Slide 45: AP Eagers Today (Feb 2015)
AP Eagers Today (Feb 2015) For personal use only • 102 year old automotive retail group founded in 1913 • 57 years as a listed public company – dividend paid every year • A.P. Eagers owns $278m of prime real estate • Represents all 12 of the top 12 selling vehicle brands in Australia and 27 car bran
Slide 46: 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 Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 46
Slide 47: 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) Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 47
Slide 48: AP Eagers Truck and Bus Brands
AP Eagers Truck and Bus Brands For personal use only Representing 11 truck and bus brands Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 48
Slide 49: Revenue by State / % of group Revenue
Revenue by State / % of group Revenue (2014 Annualised) For personal use only AP Eagers $2.8 billion revenue $0.15bn (5%) $1.24bn (44%) $0.0bn $0.65bn (23%) $0.61bn (22%) $0.16 BN (6%) $0.0 BN Monday, March 02, 2015 © 2015 AP Eagers Limited. All Rights Reserved. 49
Slide 50: 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 ie Tyres, wheel alignments, batteries, wiper blades.
Slide 51: Income Opportunity Franchised Dealership
Income Opportunity Franchised Dealership For personal use only The Income from the operational performance of the dealership, along with financial incentives for achieving target volume, market share and customer satisfaction indices combined, result in a manufacturer's “Economic Model” which funds