Autotrader Group Plc · LSE:AUTO
Autotrader — FY2020 Earnings Presentation
40 slides from Autotrader's earnings presentation, Jun 25, 2020
Slide 1: Full year results presentation
Full year results presentation Year ended 31 March 2020 25 JUNE 2020 = AutoTrader
Slide 2: Disclaimer
Disclaimer Not for publication, transmission, distribution or release, directly or indirectly, in or into any jurisdiction in which the publication, transmission, distribution or release of this document would be unlawful. By attending the meeting where this presentation is made (including via elect
Slide 3: Strategic highlights
Strategic highlights our marketplace by the end of the financial year. Through the year there was an average of over 31,000 EY We successfully monetised our new car proposition with over 1,000 retailers paying to advertise new cars on 4 physical new cars advertised on our platforms We successfully l
Slide 4: Financial highlights
Financial highlights 44% +6% 70% +6% +3% £126m Revenue: up 4% to £368.9 million (2019: £355.1 million). Trade revenue up 6% to £324.3 million (2019: £304.6 million) Operating profit: up 6% to £258.9 million (2019: £243.7 million) Operating profit margin: up 1% point to 70% (2019: 69%). Operating cos
Slide 5: Operational highlights
Operational highlights +5% +1% +6% +4% 853 Cross platform visits: up 3% to 50.8 million per month on average (2019: 49.1 million). Our share of cross platform minutes increased to over 75% (2019: 73%) which was 9x larger than our nearest competitor (2019: 5x larger) Retailer forecourts: the average
Slide 6: Financials
Financials = AutoTrader
Slide 7: Revenue
Revenue Revenue (£m) Year ended 31 March 2020 is shown as 2020 roars @ ) 368.9 355.1 3301 22.5 281.2 2018 2019 2020 Trade =Consumer services = Manufacturer & Agency | Trade revenue comprises { 2020: Retailer (£312.1m); Home Trader (€8.3m); Othe) | 2019: Retailer (£293.0m); Home Trader {£10.2m); Othe
Slide 8: Stock and retailers
Stock and retailers ARPR levers Physical car stock and retailer forecourts Growth in Average Revenue Per Retailer per month (&) Y-on-Y average @®@ @Q H Cx) retailers »o > @D “a OS & OS live physical car stock 500 Ci 9%) & impactot new or which does not 480 impact stock lever 4 15,000 121 460 440 g @
Slide 9: Costs, FTEs and capital expenditure
Costs FTEs (including contractors)?! —~ @ © © Costs (£m) Year ending 31 March 2020 is shown as 2020 “oe oe o eo po | i ~ 108.8 112.3 113.2 2018 2019 2020 om © Marketing as a % of revenue a © 4.9% 5.0% alata eee 4.7% 2018 2019 2020 55.8 Capital expenditure (excluding acquisitions) (£m) 2018 2019 2020
Slide 10: Profit and cash flow
Profit and cash flow Operating profit (£m) Year ended 31 March 2020 is shown as 2020 — @ © © 70% 67% 69% 243.7 PED) 221.3 2018 2019 2020 mmm Operating profit --- Operating profit margin Operating profit includes the Group's share of profit from Joint ventures: 2020: £3.2m; 2019: £0.9m, 2018: Enil =
Slide 11: Income statement
Income statement 2019 Year-on-year £ million % Revenue 355.1 4% Administrative expenses (112.3) (1%) Share of results of joint ventures 0.9 256% Operating profit 243.7 6% Finance costs - net (10.2) 27% Profit on disposal of subsidiary - 8.7 (100%) Profit before taxation 251.5 242.2 4% Taxation (46.4
Slide 12: Net bank debt and capital allocation policy
Net bank debt and capital allocation policy Reconciliation of net bank debt") (£m) 3071 265.5 Leverage 2) (1.5) (25.3) (0.7) (2.9) (6.4) (0.5) (69.8) (64.7) (62.0) 275.4 Capital allocation policy * OntApril 2020 the Company announced its intention to conduct a non-pre-emptive placing of up to 5% of
Slide 13: COVID
ON = I COVID = AutoTrader
Slide 14: The impact of COVID-19 and our response
The impact of COVID-19 and our response Looking after our Supporting our Protecting our people customers business = AutoTrader
Slide 15: Looking after our people
Looking after our people * Our priority is to ensure our people are safe. We have always been focused on the wellbeing of our colleagues, but this has been more important during the crisis. * We transitioned seamlessly to working from home from the 17 March. The resilience of our people and technolo
Slide 16: Supporting our customers
Supporting our customers We provided free advertising to retailers from 1 April and throughout the lockdown period. This has been followed by a period where a 25% discount was applied. * We extended the credit terms for customers to pay their March invoice, so our invoices were not a cash flow burde
Slide 17: Protecting our business
Protecting our business = AutoTrader We reduced discretionary spend, in particular marketing We utilised the Coronavirus Job Retention Scheme for just over 25% of employees. We intend to repay this in time. The Executive Directors agreed a 50% reduction in salary and to forego bonuses earned in rela
Slide 18: Audience has come back into market, cars selling and prices stable
As audience has come back into market, cars have been selling on Auto Trader and prices have remained stable Cross platform visits and live cars on site 600 550 = 500 S 8 Ss 2 ra & 450 6 6 @ 2 = 400 Stock offer Retailers 350 implemented reopened Lockdown started 300 $o bb a va > YP © oe em go yo 3g
Slide 19: Customer numbers have seen some small impact from COVID-19
Customer numbers have seen some small impact from COVID-19 Total retailers and live stock per retailer 13,500 13,000 12,500 12,000 Total Retailers 11,500 11,000 10,500 10,000 So PS 2 OS DP PPO OS © oP PP PP Ph oh ih oh WP? WP aS PP VPP a oP GP Pg PB WF —Total Retailers = AutoTrader Live Stock per Re
Slide 20: April - June 2020 trading
April - June 2020 trading Key performance indicators YoY % Apr-20 YoY % 1-21June Average retailers (0%) 13146 (1%) 12,920 Live car stock (‘000) 1% 546 12% 487 Daily cross platform visits (m) (13%) 1.2 (32%) 24 Revenue and Operating profit April May June (estimate)* June (estimate) Q1 2021 (estimate)
Slide 21: Outlook
Outlook = AutoTrader
Slide 22: We have continued to make progress on our longer-term strategy
We have continued to make progress on our longer-term strategy HORIZON 3 HORIZON 2 HORIZON 1 a an Core Adjacent Future We look to continually improve our Our new car marketplace has the Facilitate an easy way for core by: largest choice of stock for buyers. consumers to sella vehicle through * Evolv
Slide 23: Outlook for July 2020 onwards
Outlook for July 2020 onwards * Following a period of reduced revenue through which we supported our customers, we will return to full rates from 1 July 2020. Based on current trends we would expect July retailer revenue to be down by mid-single digits on the same month last year. * Total Group cost
Slide 24: Q&A
Q&A = AutoTrader
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Slide 26: Cashflow statement
Cashflow statement Profit before tax 251.5 Depreciation & amortisation 6.5 Share-based payments charge (exc NI) 3.4 Profit on sale of subsidiary - Share of profit from joint ventures (3.2) Finance costs - net 7.4 Other non-cash items (0.1) Changes in working capital - Cash generated from operations
Slide 27: Five year record
Five year record 2020 2019 2018 2016* £ million £ million £ million i £ million Trade 324.3 304.6 281.2 . 236.4 Consumer Services 28.3 28.0 29.8 : 30.3 Manufacturer & Agency 16.3 22.5 191 4 14.9 Revenue 368.9 355.1 3304 311.4 281.6 Costs (113.2) (112.3) (108.8) (108.3) (112.0) Share of profit from j
Slide 28: Appendix: Products
Appendix: Products = AutoTrader
Slide 29: Embedding our data and insight into the automotive ecosystem
We are embedding our data and insight into the automotive ecosystem, with three products made available through our packages Retail Check Gives retailers the broadest, most accurate view of the market, helping them make better and faster pricing decisions on cars they are considering buying and for
Slide 30: Independent advertising package structure
Independent advertising package structure Starter Engage your buyers through the essentials of modern online retailing Relative prices between package levels: = AutoTrader Basic Stand out and encourage engagement through trust and transparency 7 =I Starter +16% Standard Advanced Improve visibility o
Slide 31: We have a market leading consumer experience
We have a market leading consumer experience Relevance sort order Saving car buyers time by showing search results more relevant to them. Allows adverts to be viewed by more engaged buyers, boosting response Price Indicator We added ‘Fair’ and ‘Higher’ price indicators to help consumers understand i
Slide 32: Our new car marketplace
Our new car marketplace is continuing to grow 1,000 retailers were paying for the product at March 2020 Over 31,000 physical new cars were advertised on our platforms Generating over 41 million full page advert views for retailers in 2020 We have the largest new car marketplace in the UK Network eff
Slide 33: Appendix: Market
Appendix: Market = AutoTrader
Slide 34: The automotive ecosystem
The automotive ecosystem = AutoTrader Gs 1.8m SCRAPPED 1.2m>5 Sle Contract hire deals LO 2.2m C20 TRANSACTIONS Consumers Insurance, warranty and finance 0.9m —> NEWCARSALES 3.7m 0.9m lo EXCHANGE eerdilers 5.5m — ola TRADEUSED CARSALES 1.0m Sources: New car registrations - SMMT; DVLA used car transac
Slide 35: Share of minutes
(1) Share of minutes is a custom metric based on ComScore minutes (MM) and is calculated by dividing Auto Trader’s total minutes volume by the entire custom-defined competitive set’s total minutes volume. ComScore MMX® Multi-Platform, Total Audience, Custom-defined list includes: Auto Trader, Gumtre
Slide 36: 2020 was already a challenging year for our customers
2020 was already a challenging year for our customers, which was then compounded by the Covid-19 crisis in March Used car transactions ") Oo ® 9.0 ~° aw ea ° Number of used cor transactions (m) N ~ ° an 65 6.0 2018 2019 (i) DVLA transaction data - 12 month rolling total = AutoTrader YoY change in th
Slide 37: The UK car parc continued to grow through 2019
The UK car parc continued to grow through calendar year 2019. The average time people hold their car for has increased to 3.5 years UK Car Pare Frequency of transactions (years) Total number of transactions (millions) 36.0 3.0 m@NCRs sUCTs 35.0 2.0 34.0 6 5 10 = 3.5 3.5 3.53.5 Ss 35 z 33.0 a fi 4 34
Slide 38: New and used transactions - long term
New and used transactions - long term New and used car transaction year-on-year growth 2004 Ions since New and used transact . ae ag ae ae ae ae 2 ° ° 9 2 YyIMoJ6 JD8A UO IDaA. (w) suonoDsup.] 109 pasn Jo JeqWAN 2 4 ° o N 3S Sy a 2 3 a ai (wi) suoiDysiBed 4V0 Meu JO JEQUITIN 15% 45 15 Calendar year
Slide 39: Physical car stock on site - long term
Physical car stock on site - long term 600 500 400 300 Live physical car stock ('000) 100 2007 = AutoTrader 16% 2008 2% 2009 9% 8% 2% 1% 1% (3%) (10%) 2010 2011 2012 2013 2014 2015 2016 Financial year Growth —=Live cars 3% 2017 1% 2018 2% 2019 4% 2020 20% 15% 10% 5% 0% Year-on-year growth (5%) (10%)
Slide 40: a
a AutoTrader