Autotrader Group Plc · LSE:AUTO
Autotrader — Investor Day (September 2022)
100 slides from Autotrader's investor day presentation, Sep 6, 2022
Slide 1: Investor Day 2022
INVESTOR DAY 2022 6 September 2022
Slide 2: Disclaimer
DISCLAIMER Thi s document has been prepared and i ssued by and i s the sol e responsi bi l i ty of Auto Trader Group pl c (the “Company”). I t compri ses the wri tten materi al s for a presentati on concerni ng the Company. Thi s document and i ts contents are di rected onl y at and may onl y be com
Slide 3: Auto Trader Summer 2022 product video
Subsection Title Auto Trader Summer 2022 product video INVESTOR DAY 2022
Slide 4: Aims for today
AIMS FOR TODAY To demonstrate that our classified marketplace is structurally advantaged To share our underlying market assumptions for the mid-term To outline our platform strategy, and work on the enablers for digital retailing To explain what digital retailing means for Auto Trader, and share a p
Slide 5: Presenters today
PRESENTERS TODAY NATHAN COE CATHERINE FAIERS JAMIE WARNER CHRIS KELLY CHIEF EXECUTIVE CHIEF OPERATING CHIEF FINANCIAL CHIEF TECHNOLOGY OFFICER OFFICER OFFICER OFFICER Awaiting photo BEX CLARK IAN PLUMMER BEN SMITH JON DAVIES GROUP SALES DIRECTOR COMMERCIAL DIRECTOR PRODUCT DIRECTOR HEAD OF STRATEGY
Slide 6: What we will cover
WHAT WE WILL COVER TIMING TOPIC PRESENTERS 1.00 – 1.15 Introduction Nathan Coe, Chief Executive Officer Our strategic focus areas 1.15 – 1.45 Bex Clark, Group Sales Director A structurally advantaged classified Jon Davies, Head of Strategy marketplace 1.45 - 2.15 Enablers that strengthen the marketp
Slide 7: Introduction
Subsection Title Introduction Nathan Coe, Chief Executive Officer INVESTOR DAY 2022 7
Slide 8: We have delivered consistent growth since IPO
We have delivered consistent growth since IPO KEY FINANCIAL METRICS SINCE IPO Auto Trader Group plc Revenue Operating profit Operating profit margin Earnings per share Total shareholder return 1 £m £m % pence Vs. FTSE 350 2 £500 £350 80% 30.00 300 286 70% 25.61 £450 £433 £304 £300 70% 25.00 250 £400
Slide 9: We have delivered on most of the horizons outlined at the 2018 CMD
We have delivered on most of the horizons we outlined at the Capital Markets Day in 2018 What we said we would deliver at the CMD What we have delivered Checklist ENHANCE THE CORE › Add core listing products › Regular product launches › c.70% of customers has access to our data tools, +45 % pts sinc
Slide 10: We have delivered new products to market to support our customers
We have delivered new products to market to support our customers NEW PRODUCTS SINCE 2018 Excludes products in the deal builder journey New product Introduced Retailer department Benefit to retailers Increased finance penetration through Dealer Finance 2018 Sales, F&I communication of finance offers
Slide 11: We have enhanced our consumer proposition through product innovation and content
We have enhanced our consumer proposition through product innovation and content PRICE FLAGS AND MONTHLY EV ELECTRIC APP YOUTUBE ADMIN FEES GIVEAWAY VEHICLE HUB ENHANCEMENTS CHANNEL >2m >1m 17m >750k entries to date views in FY22 app downloads subscribers Sources: Auto Trader, Apple App Store, YouTu
Slide 12: Driving change together. Responsibly.
We deliver on our purpose through five key strands OUR PURPOSE Driving change together. Responsibly. DELIVERED THROUGH… Classified Enabling Stronger Inclusive Environmentally marketplace digital partnerships culture friendly choices growth retailing 12
Slide 13: Our culture is fundamental to the success of our business
Our culture is fundamental to the success of our business KEY PEOPLE METRICS OUR CULTURE IS DRIVEN BY OUR GLASSDOOR REVIEW RATING 2 2022 PEOPLE June 2022, score out of 5 5 • Our employee-led networks d r iv e o u r c u l t u r e – e . g . , 4.5 95% of employees are proud 4 to work for Auto Trader 3.
Slide 14: Three areas to our strategy which build on and support each other
There are three areas to our strategy which build on and support each other DIGITAL RETAILING PLATFORM Our strategic focus areas Classified marketplace: A structurally advantaged classified marketplace CLASSIFIED MARKETPLACE Auto Trader platform: Enablers that strengthen the marketplace and facilita
Slide 15: Digital retailing is incremental and complementary to our core marketplace
Digital retailing is a major transition but will be incremental and complimentary to our core marketplace, extending our runway for growth Digital cannibalised the Digital retailing builds on our core marketplace print business and has a long runway for growth PRINT DIGITAL DIGITAL RETAILING 1977 20
Slide 16: Our business is in good health, with strong fundamentals
Our business is in good health, with strong fundamentals setting us up for future growth #1 We are the UK’s largest and most trusted automotive marketplace #2 We have built deeper partnerships than we have ever had with retailers and new customer groups #3 ARPR per month has grown 8.5% p/a since 201
Slide 17: A structurally advantaged classified marketplace
Subsection Title A structurally advantaged classified marketplace Be x Clar k, G r o up Sale s Dir e cto r J o n Da v ie s, H e ad o f Str a te gy INVESTOR DAY 2022 17
Slide 18: DIGITAL RETAILING PLATFORM CLASSIFIED
DIGITAL RETAILING PLATFORM CLASSIFIED MARKETPLACE 18
Slide 19: A structurally advantaged classified marketplace
INVESTOR DAY 2022 Subsection Title A structurally advantaged classified marketplace A strong core classified Supportive structural marketplace, with runway trends for continued growth 19
Slide 20: Car buyers know our brand and trust it
Given our heritage in UK automotive, car buyers know our brand and trust it PROMPTED AWARENESS - ACROSS NEW AND USED 1 TRUST 2 Auto Trader vs. marketplace competitors – March 2022 Auto Trader vs. marketplace competitors – March 2022 100% 70% 65% 90% 88% 60% 80% 70% 50% 60% 40% 50% 45% 44% 30% 40% 30
Slide 21: We are the first choice destination for car buyers in the UK
We are the first choice destination for car buyers in the UK FIRST CHOICE CONSIDERATION – ACROSS NEW & USED 1 Auto Trader vs. consumer auto brands – March 2022, n=1,000 90% 80% 70% 61% 60% 50% 40% 30% 20% 11% 10% 9% 9% 10% 6% 6% 5% 5% 5% 0% Sources: Auto Trader Brand Tracker, March 2022 1 Questions
Slide 22: We remain the largest automotive marketplace in the UK
We remain the largest automotive marketplace in the UK AUDIENCE & STOCK, FY22 AVERAGE Size of bubbles = share of cross platform average mins 60,000 50,000 40,000 Total Visitis (000s) 30,000 20,000 10,000 0 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 Stock Sources
Slide 23: Our network effect model is stronger than ever
Our network effect model is stronger than ever Best car buying experience Demand side Supply side (FY22) (FY22) c. 14k retailers Extensive Our core Largest c. 590m cross platform choice of CLASSIFIED network volume of minutes per month c. 87% of UK car MARKETPLACE effect trusted in-market >75% marke
Slide 24: We have grown ARPR at mid-high single digits each year since IPO
We have grown ARPR at mid-high single digits each year since IPO, despite a challenging market backdrop COMPARING ARPR WITH USED CAR TRANSACTIONS AND NEW CAR REGISTRATIONS FY15-FY22 ARPR New car registrations (m) Used car transactions (m) £2,210 2.74 8.20 2.67 7.94 7.82 7.87 2.52 7.69 8.5% CAGR 2.44
Slide 25: ARPR has grown through product contribution and price increases
ARPR has grown through increasing product contribution and consistent price increases, underpinned by strong return on investment ARPR LEVERS SINCE 2015, PER MONTH Excludes COVID-related discounts £140 £120 £100 £80 £60 £40 £20 £0 -£20 -£40 -£60 -£80 Price Lever Stock Lever Product Lever FY15 FY16 F
Slide 26: We take 3.5-4.5% of retailer gross profit in sales
We take 3.5-4.5% of retailer gross profit in sales and less of the wider retailer gross profit pool Estimated retailer gross profit pools 1 Estimated Auto Trader yield % FY18-FY22, £bn FY18-FY22, ranges shown (excludes FY21 due to discounts) £13.2 £11.3 £11.5 £11.4 £11.2 £3.6 New Used Total £3.6 £3.
Slide 27: Comparison to other marketplaces shows headroom for growth
A comparison to other marketplaces illustrates there is headroom for growth ESTIMATED YIELD % IN CONTEXT Ranges shown to account for different years, different business models apply 20% 16-19% 14-19% 18% 16% 14% 8.5-12% 12% 8-10% 10% 7-9% 6-9% 8% 6% 3.5-4.5% 4% 2-3% 2% 0% Sources: Company accounts,
Slide 28: Our pricing power is strong with further product lever runway
Our pricing power is strong and there is further growth runway in our product lever PRODUCT PENETRATION FY22, including indicative growth runway over mid-term 67% 67% 55% 44% 31% 6% Managing Customers (Paid Dealer Finance (Eligible) Retailers with Vehicle New Car Paying Retailers Package Penetration
Slide 29: Our core classified business strength
• We are the UK’s largest and most trusted automotive Our core marketplace, and the first brand car buyers turn to classified • Our core marketplace network effect has never been stronger business • We have grown ARPR at mid-high single digits despite a stock headwind in FY19-21 strength • Our prici
Slide 30: A structurally advantaged classified marketplace
INVESTOR DAY 2022 Subsection Title A structurally advantaged classified marketplace A strong core classified Supportive structural marketplace, with runway trends for continued growth 30
Slide 31: The UK population will grow, and we expect more car drivers
The UK population will grow, and we expect more car drivers over the next decade ASSUMPTION 1: MORE PEOPLE & ASSUMPTION 2: EXCLUSIVE ASSUMPTION 3: NEW CARS > MORE DRIVERS ACCESS TO A CAR SCRAPPAGE ON S for eca st for p op u l a t i on , Au t o Tr a d er Consumer research, nationally DVLA actuals and
Slide 32: We expect the car parc to continue to grow over the next decade
As a result, we expect the car parc to continue to grow over the next decade GB CAR PARC DVLA historic data, Auto Trader forecast Forecast '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '24 '25 '26 '27 '28 '29 '30 '31 '32 Year
Slide 33: The speed at which the UK car parc turns is unlikely to slow
We believe the speed at which the UK car parc turns is unlikely to slow and could in fact accelerate Factors that drive a faster transaction Factors that drive a slower transaction rate rate 1. Electric vehicles early in their technology 1. Continued lower new car supply and less cycle the average r
Slide 34: Finance will evolve with more products and higher penetration on used cars
We believe finance will evolve with more products and higher penetration on used cars NEW CAR FINANCE PENETRATION PERSONAL CONTRACT HIRE USED CAR FINANCE PENETRATION 2012 to 2022 (Jan-Jun 22), private NCRs only Broker PCH volumes and as a % of new 2012 to 2022 (Jan-Jun 22), retailer to car registrat
Slide 35: The car parc will become increasingly electrified
The car parc will become increasingly electrified EV NEW CAR REGISTRATIONS & PARC PROJECTIONS UK new car sales & GB parc Sales of new petrol and diesel cars to end in the UK by 2030 100% Forecast 95% 93% 90% 90% 81% 80% 72% 70% 63% 60% 54% 50% 45% 40% 34% 35% 31% 30% 26% 25% 22% 20% 17% 18% 14% 12%
Slide 36: We have invested in our EV content
We have invested in our EV content to ensure we are the #1 destination for car buyers looking to go electric EV CHARGING ELECTRIC MONTHLY EV ELECTRIC EV COST OF EV CHARGING INFORMATION ON SCEPTICS GIVEAWAY VEHICLE HUB OWNERSHIP MAP FULL PAGE CAMPAIGN ADVERT Source: Auto Trader 36
Slide 37: Best placed to help car buyers navigate the buying journey
We are best placed to help car buyers navigate the increasingly complex buying journey OUR CONSUMER VALUE PROPOSITION Choice L ast t im e consum er Next t im e t hey b uy • Widest choice of stock b ought a car ( 2 01 9 ) a car ( 2 02 3 ) • Retailers panel of lenders / funding providers P et r ol , d
Slide 38: Our retailer value proposition supports all types of retailers
As the market evolves, our retailer value proposition supports all types of retailers Franchise retailers OUR RETAILER VALUE PROPOSITION Most effective sales channel • Most buyers • Across new, used, all vehicle types Independent retailers • Compelling ROI • Ability to expand geographical area of in
Slide 39: These changes are structurally supportive to Auto Trader
These changes are structurally supportive to Auto Trader MARKET ASSUMPTIONS OPPORTUNITIES FOR AUTO TRADER MORE CARS, GOOD TRANSACTION RATE Solid supply and demand expected over mid term MORE EVs Increased confusion – greater need for marketplace comparison NEW & EXISTING MANUFACTURERS Opportunity to
Slide 40: Enablers that strengthen the marketplace and facilitate a digital transaction
Subsection Title Enablers that strengthen the marketplace and facilitate a digital transaction Cathe r ine Faie r s, Chie f O pe r ating O f f ic e r Chr is Ke lly, Chie f T e c hno lo gy O f f ic e r INVESTOR DAY 2022 40
Slide 41: DIGITAL RETAILING PLATFORM CLASSIFIED
DIGITAL RETAILING PLATFORM CLASSIFIED MARKETPLACE 41
Slide 42: Key enablers are required to create seamless journeys as sectors digitise
As sectors digitise, key enablers are required to create seamless journeys – we can perform this role in automotive retail KEY ENABLERS FOR ONLINE RETAIL Examples from other sectors Key enabler Clothing Groceries Travel Automotive retail LIVE STOCK INFORMATION Keeping inventory up to date across sys
Slide 43: We have built out our platform to strengthen our core marketplace
We have spent time building out our platform to both strengthen our core marketplace and enable digital retailing PLATFORM Integrations Technology across the services industry CLASSIFIED MARKETPLACE Unique data 43
Slide 44: Outstanding technology fundamentals our customers rely on
We have outstanding technology fundamentals which our customers rely on CLOUD DATA PRODUCT DELIVERY PEOPLE INFRASTRUCTURE PLATFORM PLATFORM AND CULTURE PLATFORM • H ost ed i n Googl e C l ou d • M oder n b ig d at a • Over 500 soft wa r e • O v er 3 00 t echnol ogists an d d epl oy ed t o mu l t i p
Slide 45: Auto Trader Connect is foundational for a seamless digital retailing journey
Auto Trader Connect is foundational for a seamless digital retailing journey across all sales channels THE AUTO TRADER PLATFORM Schematic Auto Trader Group External customers § C on su mer web si t e a n d apps § R et ai l er § D eal er • R et ai l er s an d t h i r d par t y • OEM s a n d ca p t i
Slide 46: Auto Trader Connect video
Subsection Title Auto Trader Connect video INVESTOR DAY 2022
Slide 47: Integrations with third parties across the industry
We have integrated with third parties across the industry to offer unique services to our customers INTEGRATIONS ACROSS THE INDUSTRY Not exhaustive Auto Convert Auto Trader Connect SOFTWARE PROVIDERS LENDERS & BROKERS FUNDERS >120 lender/broker >70 integrations All major funders integrations Source:
Slide 48: Our data is best in class
Our data is best in class, combining retail back valuations with actionable market intelligence RETAIL BACK VALUATIONS UNIQUE MARKET INTELLIGENCE All data at a vehicle or retailer level L argest O b ject iv e D ail y ob serv at ion d at a up d at es Days to Market Buyer Market p ool sell supply dema
Slide 49: Our data is increasingly embedded as the industry standard
Our data is increasingly embedded across the whole sector as the industry standard AUTO TRADER DATA IN THE UK AUTOMOTIVE INDUSTRY: EXAMPLES Not exhaustive RETAILERS INSURANCE Use our valuations, Use our valuations data supply & demand to improve quotes, data to source and reduce fraud and retail inv
Slide 50: Our platform approach provides services very difficult to replicate
Through our platform approach, we are providing our customers with a unique set of services which are very difficult to replicate BENEFIT TO AUTO TRADER RETAILERS COMPETITIVE MOAT Access to powerful Product set more embedded in Technology technology solutions that retailer processes and services str
Slide 51: Break
Subsection Title Break Ple ase r e tur n in f if te e n minute s INVESTOR DAY 2022 51
Slide 52: Adding a transactional capability to Auto Trader and our retailer tools
Subsection Title Adding a transactional capability to Auto Trader and our retailer tools I an Plumme r , Co mme r c ial Dir e c to r Be n Smith, Pr o duct Dir e cto r INVESTOR DAY 2022 52
Slide 53: DIGITAL RETAILING PLATFORM CLASSIFIED
DIGITAL RETAILING PLATFORM CLASSIFIED MARKETPLACE 53
Slide 54: Adding a transactional capability to Auto Trader and our retailer tools
INVESTOR DAY 2022 Subsection Title Adding a transactional capability to Auto Trader and our retailer tools Why digital New vehicle Deal builder retailing? Why us? digital retailing 54
Slide 55: Shift towards consumers buying more online
Over the past decades, there’s been a shift towards consumers buying more online ONLINE SALES AS A PROPORTION OF RETAIL SPEND (%) ONS (UK) 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Actual Projection ba
Slide 56: Retail categories move online because of benefits for retailers and buyers
Retail categories move online because there are benefits for both retailers and buyers IMPACT OF ONLINE ON PHYSICAL RETAILERS e.g., travel, fashion Increased sales due to Cost reduction and time Yield management increased reach saving for retailers Breakdown of geographical Detail Visibility of pric
Slide 57: Car buyers are increasingly doing more jobs online
This trend is happening in automotive retail; car buyers are increasingly doing more of their car buying jobs online £ TEST RESERVE & DELIVERY/ DRIVE/INSPECT CHOOSE FINANCE PAY DEPOSIT COLLECTION VALUE & SELL APPLY FOR SETTLE SEARCH/FIND A CURRENT CAR FINANCE TRANSACTION CAR RESERV ED 57
Slide 58: Historic buying journey
Historic buying journey Jobs done: OFFLINE ONLINE £ TEST RESERVE & DELIVERY/ DRIVE/INSPECT CHOOSE FINANCE PAY DEPOSIT COLLECTION VALUE & SELL APPLY FOR SETTLE SEARCH/FIND A CURRENT CAR FINANCE TRANSACTION CAR RESERV ED 58
Slide 59: Current buying journey
Current buying journey Jobs done: OFFLINE ONLINE £ TEST RESERVE & DELIVERY/ DRIVE/INSPECT CHOOSE FINANCE PAY DEPOSIT COLLECTION VALUE & SELL APPLY FOR SETTLE SEARCH/FIND A CURRENT CAR FINANCE TRANSACTION CAR RESERV ED 59
Slide 60: Future buying journey
Future buying journey ü Better conversion Jobs done: ü Quicker days to sell OFFLINE ONLINE ü Cost saving in time/people ü Haggle free journey £ TEST RESERVE & DELIVERY/ DRIVE/INSPECT CHOOSE FINANCE PAY DEPOSIT COLLECTION VALUE & SELL APPLY FOR SETTLE SEARCH/FIND A CURRENT CAR FINANCE TRANSACTION CAR
Slide 61: Consumer research: car buyers want to do more jobs online
Our consumer research backs this up - car buyers want to do more of their jobs online CONSUMER RESEARCH, n=2,000, SEPTEMBER 2021 Which of these tasks have you done online or would you like to do online? I've done this online I haven't done this online but would like to I haven't done this online and
Slide 62: Car buyers will start by choosing the right car
Car buyers will start by choosing the right car (rather than finance or retailer) CONSUMER RESEARCH, n=2,002, JULY 2022 What buyers know at the start of their buying journey (multiple choice) 40% Car 36% Budget 35% Retailer 31% 30% Other 25% 21% 20% 20% 17% 15% 13% 13% 10% 7% 5% 0% Few makes/ models
Slide 63: Our approach to digital retailing is car first
Our approach to digital retailing is to be car first and to enable any retailer to do more online OUR APPROACH TO DIGITAL RETAILING Summary CAR FIRST We believe that most car buyers will continue to start with the car We believe that most car buyers want a combination of online and offline experienc
Slide 64: We will initially offer two digital retailing consumer journeys
We will initially offer two digital retailing consumer journeys DIGITAL RETAILING AT AUTO TRADER: TWO KEY CONSUMER PROPOSITIONS Deal builder Buy online Part-exchange, reservation, online PRODUCTS Vanarama finance application Used or new vehicle on cash, PCP or VEHICLES New vehicle lease HP RETAILERS
Slide 65: A truly differentiated digital offering in the UK
This will mean we have a truly differentiated digital offering in the UK Auto Marketplace 2 Online retailers Largest choice Price transparency e.g., Price flags, Price guide on some but not price flags and admin fees admin fees vehicles, no admin fees New and used vehicles Test drive available from
Slide 66: Adding a transactional capability to Auto Trader and our retailer tools
INVESTOR DAY 2022 Subsection Title Adding a transactional capability to Auto Trader and our retailer tools Why digital New vehicle Deal builder retailing? digital retailing 66
Slide 67: Deal builder is an expansion of our core marketplace
Best omnichannel journey for car buyers PLATFORM Deal builder is an Largest volume expansion of our core Largest choice of of car buyers marketplace, and sits vehicles available CLASSIFIED MARKETPLACE trusting Auto on the foundations we for digital retailing Trader’s online have been building journe
Slide 68: Extending our core video
Subsection Title Extending our core video INVESTOR DAY 2022 68
Slide 69: A better core marketplace for consumers and retailers
A better core marketplace for consumers and retailers, regardless of how they choose to buy and sell Price Indicators Market Extension • Better quality adverts – more • Price transparency (incl. admin CONSUMER fees) • Increased vehicle choice information / specification BENEFITS • Live stock availab
Slide 70: Key products brought together in our deal builder journey
To help solve common consumer pain points we have developed key products, and are bringing them together into our ‘deal builder’ journey KEY CONSUMER PAIN POINTS AUTO TRADER PRODUCTS • Car is advertised but has already been sold Reservations • Car advertised for different prices on different website
Slide 71: Deal builder video
Subsection Title Deal builder video INVESTOR DAY 2022
Slide 72: Deal builder offers control and more qualified leads
Deal builder offers car buyers control and retailers a much more qualified lead DEAL BUILDER Summary • Addresses multiple consumer pain points CONSUMER • More transparent BENEFITS • Increased control, do as much of the process online as they wish • Much more highly qualified buyers RETAILER • Time a
Slide 73: We saw the first completed deal go through in August
We saw the first completed deal go through in August THE FIRST SALE Reserved at 1:15am Wednesday morning Collected the next day 73
Slide 74: We've taken a long-term approach to enable this
We’ve taken a long-term approach to enable this RETAILER PART-EXCHANGE FOCUS VALUATIONS FINANCE PAYMENTS The quickest Focus on specific Monthly valuation Single lender Offline payments approach sub-set of retailers estimate In-store and online Auto Trader powered Available to any retailer automotive
Slide 75: Progress along our deal builder digital retailing milestones
We are making progress along our deal builder digital retailing milestones DIGITAL RETAILING MILESTONES Deal builder Market Guaranteed Auto Trader Finance Auto Convert Reservations Extension part-exchange Connect application acquisition beta launched launched beta launched launched beta launched Jul
Slide 76: Retailer digital retailing video
Subsection Title Retailer digital retailing video INVESTOR DAY 2022
Slide 77: A unique opportunity for a partner to help grow revenue and reduce costs
There is a unique opportunity for a partner to help grow revenue and reduce costs through technology and automation RETAILER VALUE PROPOSITON Deal builder Car buyers want it Those that offer digital retailing will gain share Rational Our digital retailing products allow retailers to expand It will m
Slide 78: Retailers focused on used car growth, other revenue and cost control
Retailers are focussed on used car growth, other sources of revenue and cost control RETAILER COST SPLIT LONGER-TERM STRUCTURAL FACTORS Varies by retailer type For retailers in the mid term Percentage of Estimated retailer Costs cost base cost, FY22 Lagging impact of suppressed new car People costs
Slide 79: Our products create value across a retailer's business
Our products create value across a retailer’s business and opportunity exists to increase our share of operating expenses PROFIT DRIVERS IMPACT OF DIGITAL RETAILING AUTO TRADER PRODUCT Increase penetration in existing Prominence markets Sales volume and stock turn Compete in new markets Market Exten
Slide 80: Retailers, consumers and Auto Trader will all benefit
In summary, retailers, consumers and Auto Trader will all benefit from this transition For car buyers For digital retailers › More choice › Increased sales › More transparency › Operational › More control efficiencies › Increased confidence › Increased GPU › Quicker process › Improve car buyer › Bet
Slide 81: Adding a transactional capability to Auto Trader and our retailer tools
INVESTOR DAY 2022 Subsection Title Adding a transactional capability to Auto Trader and our retailer tools Why digital New vehicle Deal builder retailing? Why us? digital retailing 81
Slide 82: Our new vehicle influence has grown over the past few years
Our new vehicle influence has grown over the past few years, despite stock pressures KEY NEW VEHICLE METRICS: CURRENT POSITION VS. PRE-PANDEMIC June 2019 vs. June 2022 Pre-pandemic (June 2019) Current (June 2022) 42k 5.7m 5,668, 41,916 868 227 34k 33,93 1.4 8 -40% +57% +265% +164% +512% 3.6m 3,604,
Slide 83: We acquired Autorama to enhance our new vehicle proposition
We acquired Autorama to further enhance our new vehicle proposition KEY MARKET TRENDS BENEFITS TO AUTO TRADER • E x is t in g m a n u f a c t u r e r s a r e l o o k in g t o • Enables car buyers to purchase new g o d ir e c t t o c o n s u m e r u s in g a g e n c y c a r s o n l in e agreements •
Slide 84: Autorama has good relationships across its customer base
Autorama has good relationships across their customer base EXISTING NEW ENTRANT FUNDERS MANUFACTURERS MANUFACTURERS (Not exhaustive) (Not exhaustive) Source: Autorama 84
Slide 85: Combining Auto Trader and Autorama to support manufacturers and leasing companies
By combining Auto Trader and Autorama we will be able to support manufacturers and leasing companies at scale OUR PROPOSITION TO OEMs AND LEASING COMPANIES Summary EFFICIENT ROUTE RETENTION OF PRICING TO MARKET EXISTING BOOK INTELLIGENCE PCH 1 offers available on Auto Tailored online eCommerce Prici
Slide 86: Testing driving traffic into the Autorama buy online journey
We are starting to test driving traffic into the Autorama buy online journey TARGETED ADVERT IN RELEVANT PRODUCT CUSTOMISE ONLINE FINANCE COMPLETED AUTO TRADER SEARCH DETAILS PAGE LEASE APPLICATION AND ORDER AUTOMATED CREDIT CHECK 86
Slide 87: Priorities in new vehicle leasing
We will increasingly leverage our scale to reduce acquisition cost and grow the business profitably PRIORITIES IN NEW VEHICLE LEASING FY23 and mid term CONSUMER CONSUMER SALES VOLUME PROFIT JOURNEY ACQUISITION COST Small scale tests £5-7m loss 1 due to driving traffic into investment in Largely unch
Slide 88: Significant growth potential for Autorama
There is significant growth potential for Autorama through increasing share and market recovery 2016 (free supply) Total car and van market 3.07m 2021 (supply constrained) Total car and van market 2.00m -35% vs. 2016 Mid 2020’s Expectation that Estimated leasing market PCH will continue Estimated le
Slide 89: Longer-term we expect to make more profit per car sold
Longer-term, as we are doing more work for the sale, we expect to make more profit per car sold USED CARS NEW CAR LEASE (AUTORAMA) Auto Trader estimated margin per car sold Auto Trader estimated margin per car sold WITHOUT DEAL BUILDER £90-£120 70% c. £75 £1,100 20-30% c. £275 Per car x Operating =
Slide 90: Financials and summary
Subsection Title Financials and summary Na tha n Co e , Chie f Exe c utiv e O f f ic e r J a mie War ne r , Chie f Financia l O f fice r INVESTOR DAY 2022 90
Slide 91: Digital retailing is incremental and complementary to our core marketplace
Digital retailing is a major transition but will be incremental and complimentary to our core marketplace, extending our runway for growth Digital cannibalised the Digital retailing builds on our core digital print business marketplace and has a long runway for growth PRINT DIGITAL DIGITAL RETAILING
Slide 92: Strong execution history launching sticky new products
We have strong execution history in launching new products which are incredibly sticky PROMINENCE PRODUCT ADOPTION RATE PRODUCT RETENTION RATE % retailers with package above standard % retailers maintain product uptake. Retail Check and Retail Accelerator 35% 100% 30% 90% Digital retailing opportuni
Slide 93: Taking retailers, manufacturers and consumers on a journey
We need to take retailers, manufacturers and consumers on a journey that more of the car buying journey can be completed online A NEW NETWORK EFFECT MODEL RETAILER SEGMENTATION An example retailer shown on the outside of flywheel, all data illustrative Excludes non-car and Ireland One additional dea
Slide 94: Digital retailing revenue will be more transactional
Digital retailing revenue for both new and used vehicles will be more transactional than our core marketplace DIGITAL REVENUE DIGITAL RETAILING REVENUE Revenue type Revenue type • 96% of retailer revenue is • >80% of revenue is expected to be transactional with pricing subscription likely to be link
Slide 95: Deal builder doubles our long-term revenue opportunity
We believe deal builder doubles our long-term revenue opportunity at a consistent Operating profit margin USED CARS NEW CAR LEASE (AUTORAMA) Auto Trader estimated margin per car sold Auto Trader estimated margin per car sold WITHOUT DEAL BUILDER £90-£120 70% c. £75 £1,100 20-30% c. £275 Per car x Op
Slide 96: Clear financial reporting, breaking out Autorama results
We want to make our current financial reporting clear and will break out Autorama results GROUP AND SEGMENTAL FINANCIALS Group resul t s ( £ m ) A uto T rad er resul t s ( £ m ) A utoram a resul t s ( £ m ) Tr ad e c.10% of vehicles are C on su mer Veh i cl e & Accessor y Sal es taken on balance she
Slide 97: Three areas to our strategy which build on and support each other
There are three areas to our strategy which build on and support each other DIGITAL RETAILING PLATFORM Our strategic focus areas Classified marketplace: A structurally advantaged classified marketplace CLASSIFIED MARKETPLACE Auto Trader platform: Enablers that strengthen the marketplace and facilita
Slide 98: Six key takeaways
SIX KEY TAKEAWAYS Our classified marketplace continues to have runway for growth, supported by structural tailwinds Our platform is now powering many of our retailer’s businesses which strengthens our core and is a key enabler for digital retailing Digital retailing revenue will be incremental as re
Slide 99: Q&A
Subsection Title Q&A INVESTOR DAY 2022 99
Slide 100: Presenters today
PRESENTERS TODAY NATHAN COE CATHERINE FAIERS JAMIE WARNER CHRIS KELLY CHIEF EXECUTIVE CHIEF OPERATING CHIEF FINANCIAL CHIEF TECHNOLOGY OFFICER OFFICER OFFICER OFFICER Awaiting photo BEX CLARK IAN PLUMMER BEN SMITH JON DAVIES GROUP SALES DIRECTOR COMMERCIAL DIRECTOR PRODUCT DIRECTOR HEAD OF STRATEGY