Eagers Automotive Limited · ASX:APE
Eagers Automotive — FY2020 Earnings Presentation
36 slides from Eagers Automotive's earnings presentation, Feb 24, 2021
Slide 1: FY20 Results
2 4 F e b r u a r y , 2 0 2 1 FY20 RESULTS Keith Thornton I Chief Executive Officer Sophie Moore I Chief Financial Officer Martin Ward I Advisor to the Board & CEO
Slide 2: CEO Succession
CEO SUCCESSION Orderly leadership transition that will enable continued execution of our Next100 Strategy Martin Ward transitioning Keith Thornton appointed to new role as adviser to CEO the Board & CEO 18 years with Eagers including as COO since 2017 Responsibility for the company’s Extensive opera
Slide 3: Financial Highlights FY2020
FINANCIAL HIGHLIGHTS FY2020 Group delivered strong underlying operating profit result through disciplined focus on cost base & strategic priorities Decisive Action Underlying Operating Profit Corporate debt net of cash at COVID-19 Response: Before Tax from continuing 31 December 2020 - Accelerated r
Slide 4: Strategic Highlights
STRATEGIC HIGHLIGHTS Strategic priorities accelerated despite market conditions and COVID-19 business disruption Next100 progress Cost out Leveraging current market conditions to Significant annualised cost reductions of accelerate Next100 Strategy $100m Strong momentum with fixed price pre- Achieve
Slide 5: Agenda
AGENDA 1. MARKET CONTEXT 2. STRATEGIC PRIORITIES 3. FINANCIAL RESULTS 4. OUTLOOK 5. Q&A 5 5 || EE A AGG EE R R SS A AUU TT O OMMO O TT II V V EE FF YY 2 200 R R EE SS U U LL TT SS
Slide 6: Market Context
eqadcels .. qutomotive MARKET CONTEXT
Slide 7: Market Context & Performance
MARKET CONTEXT & PERFORMANCE Eagers Automotive has a track record of outperformance through challenging external conditions ‒ COVID-19 driving unprecedented fluctuations in market conditions New Car Sales – Market vs Eagers Automotive ‒ Outperformance against national new car market and increase in
Slide 8: New Vehicle Markets & Growth
NEW VEHICLE MARKETS & GROWTH Consolidating and strengthening our scale & geographic diversity to sustain leading market position Market Share Market Opportunity State Market Share – Strong market positions across national footprint QLD 12.9% with significant growth WA 23.1% potential in largest NT &
Slide 9: Strategic Priorities
eqadcels .. qutomotive STRATEGIC PRIORITIES
Slide 10: Next100 Strategy
NEXT100 STRATEGY Providing integrated mobility solutions for the next 100 years OPTIMISE DEVELOP GROW Engage our customers, Deliver optimised vehicle Reinvest with Redefine our workforce Support innovation everywhere finance solutions discipline Online. At the airport. In shopping Our workforce: re-
Slide 11: Global Impact of COVID-19
GLOBAL IMPACT OF COVID-19 Rapid onset of pandemic & impact on global automotive supply chain has driven rebalance between supply & demand in Australian market COVID-19 - Global uncertainty Initial Shock - Rapid reduction in demand - Key focus on surviving the crisis Social Restrictions - Government
Slide 12: Government Stimulus Packages
GOVERNMENT STIMULUS PACKAGES Saved around 2,000 jobs and enabled a faster recovery from historical trading lows in April and May Value distribution – FY201 CONTEXT OBJECTIVES Significant industry headwinds pre COVID-19: Survive the initial economic shock triggered 3% 2% by Government imposed lockdow
Slide 13: Catalyst for Change
CATALYST FOR CHANGE Current market conditions driving temporary and structural change enabling acceleration of our Next100 Strategy – Reallocation of consumer spending driven by travel restrictions and government stimulus Demand – Change in personal transport choices and increase in flexible work ar
Slide 14: Engage Our Customers, Everywhere
ENGAGE OUR CUSTOMERS, EVERYWHERE Acceleration of property strategy provides platform to implement omni-channel retail approach – Agreements to acquire $211.5 million of strategically Acquire located leased sites executed in FY20 ($105m completing strategically prior to 31 December 2020) located site
Slide 15: Redefine Our Workforce
REDEFINE OUR WORKFORCE Delivering a superior customer experience on a more sustainable and productive cost base FUND – Traditional dealership model built around one role for each stage of the customer experience – We are re-designing the roles and responsibilities of our workforce to provide a super
Slide 16: Deliver Optimised Vehicle Finance Solutions
DELIVER OPTIMISED VEHICLE FINANCE SOLUTIONS Despite challenging operating conditions our strategy remains unchanged ensuring we are well positioned for a re-bound in 2021 Financial Services Toolkit driving Showroom Process Transformation 2020 HEADWINDS ‒ Increased mortgage redraw activity Panel Stra
Slide 17: Support Innovation
SUPPORT INNOVATION Integrated technology solutions enhance customer experience and drive growth in Pre-Owned Vehicle business Key Enablers to Drive Pre-Owned Vehicle Business Growth 17 | EAGERS AUTOMOTIVE FY20 RESULTS
Slide 18: Reinvest with Discipline
REINVEST WITH DISCIPLINE Simplification post AHG merger to focus on core business with the financial stability to pursue future growth opportunities AHG Merger Non-Core Divestments Created size and scale Refrigerated Logistics divestment completed June 2020 Exceeded synergy target ahead of schedule
Slide 19: Financial Results
eqadcels .. qutomotive FINANCIAL RESULTS
Slide 20: Summary P&L
SUMMARY P&L $ MILLION FY20 FY192,3 Revenue from continuing operations1 8,749.6 5,817.0 Underlying operating EBITDAI from continuing operations1 284.2 163.2 Underlying Underlying operating PBT from continuing operations1 209.4 100.4 Specific items reported below underlying profit1 70.7 (163.7) Statut
Slide 21: Statutory to Underlying EBITDAI & PBT – FY20
STATUTORY TO UNDERLYING EBITDAI & PBT – FY20 Depn & Interest $ MILLION EBITDAI Impairment PBT Tax Expense NPAT Amort Expense Underlying Continuing Operating1 284.2 (39.8) (35.1) 209.4 (69.0) 140.4 Impairment - (80.7) (80.7) 24.2 (56.5) Govt Wage Subsidy Income COVID-19 133.8 133.8 (40.1) 93.6 Brand
Slide 22: Segment Results
SEGMENT RESULTS Continuing operations Car retailing Underlying Operating Contribution1 Strong performance on pcp despite COVID-19 impact on trading in April (excl. AASB 16) 209.4 and May and 3-month VIC lockdown. Performance driven by full year 199.4 contribution from AHG, cost reductions and higher
Slide 23: Non-Cash Asset Fair Value Adjustments
NON-CASH ASSET FAIR VALUE ADJUSTMENTS Holden exit, restructuring initiatives and property revaluations $10.0m Impairment charges of $90.7 million in FY20 relating to: $6.4m – Impairment: Holden exit & other restructuring activities $80.7 million – impairment of leased assets for Holden properties wi
Slide 24: Strong Balance Sheet
STRONG BALANCE SHEET Effective management of net working capital plus strong liquidity FY20 FY191 Mvmt Mvmt – Effective working capital management, greater returns on a leaner $m $m $m % base. Continue to maintain substantial equity in used vehicles Inventory 1,026 1,459 (433) (29.7%) Bailment finan
Slide 25: Property Portfolio
PROPERTY PORTFOLIO Rebalancing our property portfolio post AHG merger 3,000 – APE’s flexible portfolio comprises both owned and leased property – 35 properties owned at Dec-20 valued at $356m, up $103m on pcp (Dec-19: $253m). Additional 4 properties acquired in Jan-21, lifting 2,500 value of portfol
Slide 26: Outlook
eqadcels .. qutomotive OUTLOOK
Slide 27: Outlook
OUTLOOK Disciplined focus on accelerating our Next100 Strategy Strong – Flexible balance sheet and strengthened liquidity financial – Well positioned to withstand any short-term & localised COVID-19 impacts position – Simplified business post divestments, focused on core automotive retail model Favo
Slide 28: Thank You
THANK YOU 28 | EAGERS AUTOMOTIVE FY20 RESULTS
Slide 29: Q&A Questions?
Q&A QUESTIONS? 29 | EAGERS AUTOMOTIVE FY20 RESULTS
Slide 30: Disclaimer
DISCLAIMER The information in this document (information) does not contain all information necessary for investment decisions, is not in tended to be an offer, invitation or recommendation with respect to shares, is not financial product advice, and is intended to be general background information o
Slide 31: Appendix
APPENDIX 31 | EAGERS AUTOMOTIVE FY20 RESULTS
Slide 32: Statutory to Underlying EBITDAI & PBT – FY19
STATUTORY TO UNDERLYING EBITDAI & PBT – FY19 2,3 Depn & Interest $ MILLION EBITDAI Impairment PBT Tax Expense NPAT Amort Expense Underlying Continuing Operating1 163.2 (26.6) (36.2) 100.4 (31.1) 69.3 Impairment - - - (244.9) (244.9) 10.7 (234.2) Gain on consolidation of AHG 65.1 - - 65.1 - 65.1 Gain
Slide 33: AASB 16
AASB 16 Reduction in PBT of $16 million during the period 2020 20191 Mvmt Mvmt $m $m $m % Impact Impact Impact Impact Lease Liability (1,270.9) (1,192.6) (78.4) 6.6% Right of use asset 801.1 1,008.51 (207.4) (20.6%) Lease Receivable 215.3 - 215.3 N/A Deferred tax asset 79.9 55.31 24.6 44.5% EBITDAI
Slide 34: Definitions
DEFINITIONS Non-IFRS Financial Information AHG is defined as Automotive Holdings Group Limited EA is defined as Eagers Automotive Limited (formerly AP Eagers Limited) EBIT is defined as earnings before interest and tax EBITDA is defined as earnings before interest, tax, depreciation and amortisation
Slide 35: Definitions
DEFINITIONS Non-IFRS Financial Information Significant items are items that are non-recurring in nature, individually material or do not relate to the operations of the existing business. R efer to slides 10 (HY20) and 31 (comparative financial information) of this Investor Presentation for a breakd
Slide 36: eqgcels ..
eqgcels .. qutomotive