Car Group Limited · ASX:CAR
Car — carsales.com — FY2017 Earnings Presentation
39 slides from Car's earnings presentation, Aug 9, 2017
Slide 1: Full year results presentation
For personal use only Full year results presentation YEAR ENDED 30 JUNE 2017
Slide 2: Disclaimer and non-IFRS information
Disclaimer and non-IFRS information For personal use only Disclaimer The material in this presentation has been prepared by carsales.com Limited (ASX: CAR) ABN 91 074 444 018 (“carsales") and is general background information about carsales’ activities current as at the date of this presentation. Th
Slide 3: Table of contents
Table of contents For personal use only Key Highlights 4–5 Reported Group Financial Performance 6 – 12 carsales Domestic 13 – 17 carsales International 18 – 22 Outlook 23 – 24 carsales – beyond the first 20 years 25 – 34 Appendix 35 – 39 3
Slide 4: Key Highlights
For personal use only Key Highlights TO 30 JUNE 2017 4
Slide 5: FY17 highlights
FY17 highlights ADJUSTED NPAT* Up 8%REPORTED to $119m. REVENUE REPORTED EBITDA ADJUSTED NPAT* For personal use only Up 8% to $372m. Up 4% to $177m. Up 8% to $119m. Excluding Finance Excluding Finance segment up 13%. segment up 7%. FINANCIAL HIGHLIGHTS • Solid full year results. Excluding Finance and
Slide 6: Reported Group Financial Performance
Reported For personal use only Group Financial Performance TO 30 JUNE 2017 6
Slide 7: Financial overview
Financial overview A$ Millions Growth • Solid growth in revenue rising to $372.1m, up by 8% on pcp. Year Ending 30 June 2017 FY16 FY17 $'s % For personal use only • Excluding Finance and Related Services, revenue growth of 13% and Revenue EBITDA growth of 7%. Online Advertising 240.7 269.1 28.4 12%
Slide 8: Segment performance
Segment performance Data, Research Subtotal Finance and Total Online Advertising International and Services carsales Group Exc F&RS Related Services carsales Group A$ Millions FY16 FY17 $'s % FY16 FY17 $'s % FY16 FY17 $'s % FY16 FY17 $'s % FY16 FY17 $'s % FY16 FY17 $'s % For personal use only Total
Slide 9: Strong track record of financial performance
Strong track record of financial performance For personal use only Revenue EBITDA Adjusted NPAT* $m $m $m 372.1 176.5 170.3 119.1 344.0 110.5 311.8 154.3 101.8 138.4 95.5 120.1 83.5 235.6 215.1 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 • Once again carsales continues
Slide 10: EBITDA margin performance
EBITDA margin performance EBITDA margin impacted by Stratton and growth in adjacent and international businesses For personal use only • Reported Group margins declined from 49.5% in FY16 to 47.4% in FY17, 0.6% (1.8%) with domestic core business margin increases offset primarily by growth in 49.5% e
Slide 11: Look through revenue and EBITDA performance
Look through revenue and EBITDA performance Look Through Revenue Look Through EBITDA For personal use only $m $m 360.2 182.9 171.4 329.6 14.8 43.9 156.0 301.7 11.4 34.1 140.4 29.5 9.6 245.4 119.7 215.2 4.7 16.1 2.4 1.0 316.3 168.1 159.9 295.5 272.2 146.4 135.7 229.3 212.8 118.7 FY13 FY14 FY15 FY16 F
Slide 12: Reported debt and cash flow
Reported debt and cash flow Continued strong operating cash flows Improved credit metrics Reported Leverage Ratio For personal use only Reported Operating Cash flow* (column) and conversion from (Net debt / Annualised EBITDA**) $m EBITDA to cash (line) 140.0 FY17 0.87 124.8 120% 119.5 120.0 100.0 10
Slide 13: carsales Domestic (Australia)
carsales For personal use only Domestic (Australia) TO 30 JUNE 2017 13
Slide 14: Domestic revenue performance - Summary
Domestic revenue performance - Summary A$ Millions Growth For personal use only Year Ending 30 June 2017 FY16 FY17 $'s % Revenue Dealer 123.8 133.5 9.7 8% Private 51.1 65.0 13.9 27% Display 65.8 70.6 4.8 7% Total Online Advertising 240.7 269.1 28.4 12% Data, Research and Services 35.9 39.3 3.4 10% F
Slide 15: Domestic revenue performance by category: Dealer and Private
Domestic revenue performance by category Dealer Dealer revenue up 8% on pcp to $133.5m $m For personal use only Millions $150 Solid growth in revenue primarily driven by yield improvements, reflecting $133.5 the impact of lead price tiering and other pricing initiatives. The introduction $123.8 of f
Slide 16: Domestic revenue performance by category: Display and Data
Domestic revenue performance by category Display $m Display revenue up 7% to $70.6m For personal use only $80 $70.6 Recorded solid revenue growth of 7% on pcp, which was a pleasing result in $65.8 a highly competitive market. Our insights and analytics capability is being $58.7 $60.6 integrated with
Slide 17: Domestic revenue performance: Finance and Related Services
Domestic revenue performance by category Finance and Related Services Revenue Finance and Related Services Revenue For personal use only A$ Millions Variance down 12% to $55.4m Year Ending 30 June 2017 FY16 FY17 $'s % Challenging year with previously described volume capacity Core finance 43.6 42.2
Slide 18: carsales International
For personal use only carsales International TO 30 JUNE 2017 18
Slide 19: International Portfolio
International Portfolio “carsales is the number one online For personal use only automotive classified network operating across the Latin American region” International Highlights A$ Millions Growth • Very strong growth in SK Encar underlying revenue and EBITDA up 29% and 32% respectively. Year Endi
Slide 20: Asia – Underlying Results
Asia – Underlying Results SK ENCAR Financials (49.9% Owned - Equity Accounted by CAR) For personal use only 12 months to 12 months to Growth Pro-Forma (100%) 30 June 2016 30 June 2017 KRWb KRWb % Underlying revenue* 30.0 38.7 29% Underlying EBITDA* 15.6 20.5 32% Very strong underlying performance wi
Slide 21: Latin America – Underlying Results (Webmotors)
Latin America – Underlying Results WebMotors Financials (30% owned - Equity Accounted by CAR) 12 months to 12 months to Growth Although Brazilian economic conditions remain challenging the Pro-Forma (100%) 30 June 2016 30 June 2017 economy experienced positive growth in Q3 FY17 after contracting for
Slide 22: Latin America – Underlying Results (soloautos)
Latin America – Underlying Results soloautos Financials (65% owned – Consolidated by CAR) For personal use only 2 Oct 2015 to 12 months to Growth 30 June 2016 30 June 2017 MXPm MXPm % Given the size of the market opportunity in Mexico our strategy is to invest in the business to establish market lea
Slide 23: Outlook
For personal use only 23 Outlook
Slide 24: Performance outlook
Performance outlook For personal use only carsales Domestic Outlook Domestic core business performance in July has remained solid. We expect our domestic adjacent businesses to continue to build scale and breadth consistent with FY17 and our premium listing and depth products to continue growing wel
Slide 25: carsales – beyond the first 20 years
carsales – For personal use only beyond the first 20 years 25
Slide 26: An experienced Executive Leadership Team
An experienced Executive Leadership Team For personal use only Cameron McIntyre Anthony Saines Paul Barlow Ajay Bhatia Lisa Sheehan Managing Director & CEO Managing Director Commercial Managing Director International Managing Director Consumer Chief People Officer 10 years 9 years 8 years Business -
Slide 27: Leveraging the consumer auto cycle
Leveraging the consumer auto cycle carsales will continue to innovate, build & grow its offering across the Consumer Auto cycle to support its 4.7m membership base every step of the way. For personal use only BUY OWN 4.7m members SELL 27
Slide 28: Consistent and optimised investment in our brands
Consistent and optimised investment in our brands The marketing investment strategy has further increased the leadership position of carsales. Achieved through the combination of sporting partnerships, targeted brand content via digital channels and a continued focus on performance marketing. For pe
Slide 29: Clear market leadership
Clear market leadership The cornerstone of our business is our market leading automotive classifieds sites, creating a springboard for future growth. For personal use only Australia’s Australia’s most preferred most visited 4x more preferred than 2x the traffic (across desktop, our nearest competito
Slide 30: Our domestic business – Setting up for future success
Our domestic business – Setting up for future success To reflect the evolving needs of our customers we have brought together all of our Australian customer-facing operations into two divisions: Commercial and Consumer. For personal use only Our Customers Strategic Opportunities • Commercial (Dealer
Slide 31: Expanding our core services - Consumer
Expanding our core services - Consumer We will continue to expand our core services by maximising uptake of new and existing products through analytics, insights and further strengthening our membership base. For personal use only Private ad price tiering Premium/depth listings for private sellers E
Slide 32: Expanding our core services - Commercial
Expanding our core services - Commercial We will continue to evolve our core advertising and data solutions to bring more opportunities for our commercial customers to meet their business objectives. For personal use only Enhancing depth/premium Actionable insights & analytics Tailored advertising s
Slide 33: Expanding our adjacent markets
Expanding our adjacent markets There is ample opportunity to scale our adjacent services across our existing consumer base of buyers and sellers – providing confidence to transact and a frictionless experience. For personal use only Secure payment option via Redbook Inspections for buyers and Post M
Slide 34: carsales' International opportunity
carsales’ International opportunity Long term revenue opportunity Number of cars sold (millions per year) 3 For personal use only FY17 Revenue 2 Rev opp / 30 GDP 1 Revenue Opportunity A$1,127m FY17 Rev Market (A$ billion) (A$ million) (A$ million) Chile 25 Australia $1,568 $267.2 Argentina 20 Mexico
Slide 35: Appendix
For personal use only Appendix TO 30 JUNE 2017 35
Slide 36: Overview of carsales non-IFRS financial information
Overview of carsales non-IFRS financial information What is IFRS and non-IFRS financial information? For personal use only • IFRS financial information is financial information that is presented in accordance with all relevant accounting standards. • Non-IFRS financial information is financial infor
Slide 37: Reconciliation of Reported to Adjusted NPAT
Reconciliation of Reported to Adjusted NPAT A$ Millions Growth For personal use only Year Ending 30 June 2017 FY16 FY17 $'s % Reported NPAT 109.3 109.5 0.2 - Gain on sale of business (1.0) - Gain on associate dilution (1.0) (0.3) Associate fair value revaluation loss - 7.1 SK Encar one-off tax gain
Slide 38: carsales “Look Through” P&L analysis
carsales “Look Through” P&L analysis FY15 FY16 FY17 Days Look Days Look Days Look % Owned Owned Reported Underlying Through % Owned Owned Reported Underlying Through % Owned Owned Reported Underlying Through For personal use only Revenue carsales International iCar Asia 22.9%, 20.3% 365 Equity Acc't
Slide 39: For personal use only
For personal use only