Turners Automotive Group Ltd · NZX:TRA
Turners Automotive — HY21 Earnings Presentation
29 slides from Turners Automotive's earnings presentation, Nov 25, 2020
Slide 1: HY21 Results Presentation
HY21 For personal use only Results Presentation For the six months ending 30 September 2021 1 ••HY21 RESULTS PRESENTATION
Slide 2: Disclaimer
Disclaimer For personal use only Turners Automotive Group the (company) is solely responsible for the content of this document. This document is not an investment statement or prospectus and does not constitute an offer of securities. This document or any other written or oral statements made by, or
Slide 3: Agenda
Agenda For personal use only 1. HY21 Results 2. Segment results 3. The business in context 4. FY21 Focus + outlook 3 • HY21 RESULTS PRESENTATION
Slide 4: HY21 Results overview
HY21 Results overview For personal use only Financials Key Drivers for HY21 Q3 Update • NPBT $18.7m +26% • Effectively a 5-month trading period in • Auto retail: demand better than HY21 due to lockdown expected and margin improvement • NPAT $13.4m +25% • Used vehicle supply constrained due on owned
Slide 5: HY21 Results
For personal use only 1 HY21 Results 5 • HY21 RESULTS PRESENTATION
Slide 6: HY21 Results snapshot
HY21 Results snapshot Revenue For personal use only 400 Revenue Shareholders’ Equity 300 Millions 2H $147.5m -14% $231m as at 30 Sept 20 200 1H 100 Underlying Net Profit Before Tax Q2 Dividend 4.0 cps 0 $13.1m -11% Projected FY Div 17.0cps FY16 FY17 FY18 FY19 FY20 FY21 Net profit after tax Net Profi
Slide 7: HY20: HY21 Revenue bridge
HY20: HY21 Revenue bridge For personal use only Revenue decreased from $171m to $148m • Revenue reflects material impact of L4 /L3 lockdown in April & May impacting Auto Retail, Finance and Insurance sales • NZ used car market has recovered since lockdown however due to new car supply constraints su
Slide 8: HY20: HY21 Net profit before tax (NPBT) bridge
HY20: HY21 Net profit before tax (NPBT) bridge For personal use only NPBT increased from $14.8m to $18.7m • Auto Retail result underpinned by stronger commercial business and improved margins on owned inventory • Finance driven by writing higher quality new business and the resulting improved arrear
Slide 9: Reconciliation: NPBT to underlying NPBT
Reconciliation: NPBT to underlying NPBT For personal use only • HY21 reflects a 5 month “effective” trading $Millions HY21 HY20 Var period, on a like for like basis this would be circa 6% ahead of H120. Profit before tax actual 18.7 14.8 26% • Property adjustment includes IFRS 16 Oxford strategic re
Slide 10: Dividend Payments and Policy
Dividend Payments and Policy For personal use only Earnings and Dividend per Share (Cents) 18.0 Dividends fully imputed from FY17 on • Q2-21 dividend declared at 4.0 cents per share 16.0 17.0 17.0 fully imputed, bringing declared dividends for 14.0 15.5 FY21 to 8.0 cps 14.5 14.0 12.0 13.0 • FY21 Pro
Slide 11: Balance sheet
Balance sheet For personal use only $Millions HY21 HY20 Cash and cash equivalents 18.9 14.6 Financial assets at fair value 65.1 63.4 • Reduction in inventory value reflects reduced Inventory 29.8 36.5 availability of Japanese imports Finance receivables 300.7 285.7 Property, plant and equipment 53.6
Slide 12: Funding mix
Funding mix For personal use only Borrowings Borrowings by Utilisation ($Millions) $Millions Limit Drawn Undrawn As at 30 September 2020 Receivables – Securitisation (BNZ) 230 182 48 Receivables – Banking Syndicate Corporate (ASB/BNZ) 60 43 17 & Property Receivables – MTF Inventory 7 7 - $70m Corpor
Slide 13: Segment Results
For personal use only 2 Segment Results 13 • HY21 RESULTS PRESENTATION
Slide 14: HY21 by segment
HY21 by segment For personal use only $Millions Automotive Retail Finance Insurance Credit Revenue 96.1 (17%) 23.2 2% 21.1 (5%) 7.0 (29%) Segment Profit 7.8 6% 7.6 18% 4.5 74% 3.0 (17%) 14 • HY21 RESULTS PRESENTATION
Slide 15: HY21 by segment
HY21 by segment For personal use only Auto retail • Covid recovery and cost management • Margin improvement through supply initiatives and supply constraints • Continued optimisation for retail eg. new sites in Westgate, Dunedin Finance • Finance continued focus on targeting high quality borrowers,
Slide 16: Automotive retail
Automotive retail For personal use only Revenue 96.1m -17%, Segment Profit $7.8m +6% • Margins on “owned” fleet has increased in Q2 due to a Auto Retail Operating Profit*: number of buying improvement initiatives and tight Change vs pcp (%) supply of used cars nationally. 100% 0% • Diversified sourc
Slide 17: Finance
Finance Revenue $23.2m +2%, Segment Profit $7.6m +18% For personal use only Receivables growth since FY20 month by month 310 300 • Improvement continues for volume, margin and risk 290 280 270 • Post lockdown lending very strong with Q2 up 32% on 260 Q2 FY20 250 • Premium Tier business growing stron
Slide 18: Insurance
Insurance For personal use only Revenue $21.1m -5%, Segment Profit $4.5m +74% • Policy sales rebounded strongly, in-line with used car Gross Written Premium FY21 v FY20 ($000s) market 4.0 • Claims loss ratios continue to improve (due to better 3.5 underwriting, less movement in lockdown) 3.0 2.5 • G
Slide 19: Credit management
Credit management For personal use only Revenue $7.0m -29% Segment Profit $3.0m -17% Debt Collected HY20 to HY21 ($000s) • Total debt load down 58% to $56m, mainly due to large NZ corporate customers pulling back on collections actions during Covid-19 to manage reputational risk • Debt load from maj
Slide 20: The business in context
For personal use only 3 The business in context 20 • HY21 RESULTS PRESENTATION
Slide 21: Building quality …
For personal use only Building quality … 21 • HY21 RESULTS PRESENTATION
Slide 22: Quality of earnings and dividends
Quality of earnings and dividends TRA has a dividend yield of 7.3% the NZX* For personal use only * Source: NZX; Based on rolling 12 month gross div (net div + imps) divided by share price at 20 November 2020. 22 • HY21 RESULTS PRESENTATION
Slide 23: Businesses are well positioned for the "new norm"
Businesses are well positioned for the “new norm” For personal use only Auto Retail Insurance • Used cars have demonstrated resilience • Annuity earnings helpful in lockdown • Geographical diversification • Premium taken up front • Diversified sources of supply • Improving technology and distributio
Slide 24: Resilient and well placed for an uncertain environment
Resilient and well placed for an uncertain environment For personal use only COVID was a stress-test, but we exceeded expectations 1. Used car market is resilient 2. Diversified business 3. High “trust” brands 4. Digital is a competitive advantage 5. Strong and sustainable yield 24 • HY21 RESULTS PR
Slide 25: FY21 Focus + Outlook
For personal use only 4 FY21 Focus + Outlook 25 • HY21 RESULTS PRESENTATION
Slide 26: Our focus for FY21 - by business
Our focus for FY21 - by business For personal use only Auto Retail • Stock acquisition • Continue to invest in promoting the Turners brand - build market share • Retail optimisation – Exit Penrose and launch Westgate, Mt Richmond Finance • Keep improving credit quality through data driven risk prici
Slide 27: FY21 outlook
FY21 outlook For personal use only The business has demonstrated strong levels of resilience despite lockdowns in April, May and August. The business has positive momentum and current trading provides optimism heading into 2H21…. • Guidance given at ASM in September that FY21 NPBT to be in the range
Slide 28: Questions
For personal use only Questions 28 • HY21 RESULTS PRESENTATION
Slide 29: Contact
Contact For personal use only Todd Hunter CEO Turners Automotive Group Limited T: 64 21 722 818 E: todd.hunter@turners.co.nz 29 • HY21 RESULTS PRESENTATION
Turners Automotive Group — HY21 Earnings Presentation on 6ix