Slide 1: Half year results presentation
Half year results presentation Six months ended 30 September 2019 7 November 2019 1
Slide 2: Disclaimer
Disclaimer IMPORTANT: The following applies to this document, the oral presentation of the information in this document by Auto Trader Group plc (the “Company”) and/or any person on behalf of the Company, and any question-and-answer session that follows the oral presentation (the “Information”). By
Slide 3: Financial highlights
Financial highlights + 6% Revenue: up 6% to £186.7 million (H1 2019: £176.8 million) + 9% Operating profit: up 9% to £131.4 million (H1 2019: £120.6 million) 70% Operating profit margin: up 2% points to 70% (H1 2019: 68%). Operating cost growth of 2% + 14% share Earnings and distribution: Basic EPS
Slide 4: Operational highlights
Operational highlights Cross platform visits: up 4% to 51.2 million per month on average (H1 2019: 49.3 million) and we have grown our share of + 4% minutes amongst our full competitor set to over 75% (H1 2019: 72%). Advert views were down 6% at 233 million per month on average (H1 2019: 247 million
Slide 5: We are making good progress against our strategy
We are making good progress against our strategy Horizon 3 Horizon 2 Horizon 1 Core Adjacent Future We look to continually enhance our Become to new cars what we are in Help consumers transact online core through: used • Vehicle Check enables increasing online • core listing prominence Develop a mor
Slide 6: Financials
Financials = AutoTrader
Slide 7: Revenue
Revenue Number of retailer forecourts (1) Y-on-Y % (1%) (0%) 1% Revenue (£m) Six months ended 30 September 2019 is shown as H1 2020 13,213 13,153 13,316 Year-on- 7% 7% 6% year growth H1 2018 H1 2019 H1 2020 186.7 176.8 (22%) 165.0 9.0 11.5 15.9 Average Revenue Per Retailer (ARPR) (£) (1) 9.0 15.2 5%
Slide 8: Product remains the largest lever of ARPR growth whilst stock continues to be a headwind
Product remains the largest lever of ARPR growth whilst stock continues to be a headwind as expected ARPR levers Physical car stock and retailer forecourts Growth in Average Revenue Per Retailer per month (£) Y-on-Y average 0% (1%) 1% retailers £152 £125 Y-on-Y average (£) £148 1% 2% 10% live physic
Slide 9: Costs
Costs FTEs (including contractors)(2) Y-on-Y % (1%) (2%) (1%) Costs (£m) Six months ended 30 September 2019 is shown as H1 2020 Year-on- 818 802 798 4% 2% 2% year growth 55.1 56.2 57.1 H1 2018 H1 2019 H1 2020 3.3 (27%) 4.6 4.5 Marketing as a % of revenue 14.1 15.6 11% 14.6 5.3% 5.4% 5.2% 9.2 10.1 10
Slide 10: Profit and cash flow
Profit and cash flow Operating profit (£m)* Cash generated from operations (£m) Six months ended 30 September 2019 is shown as H1 2020 Six months ended 30 September 2019 Year-on- 9% 10% 9% 9% 2.7 (2.6) 3% year growth 3.3 (0.3) (1.8) 68% 70% 67% 131.4 132.7 131.4 120.6 109.9 H1 2018 H1 2019 H1 2020 O
Slide 11: Income statement
Income statement H1 2020 H1 2019 Year-on-year £ million £ million % Revenue 186.7 176.8 6% Administrative expenses (57.1) (56.2) (2%) Share of results of joint ventures 1.8 - n.m Operating profit 131.4 120.6 9% Finance costs – net (3.7) (6.1) 39% Profit before taxation 127.7 114.5 12% Taxation (24.5
Slide 12: Net external debt and capital allocation
Net external debt and capital allocation Reconciliation of net external debt (1) (£m) Capital allocation • The Group’s capital allocation policy outlined in the 1.2x 1.1x 2019 full year results remains unchanged Leverage (2) • The Group will continue to invest in the business 307.1 132.7 (0.9) (1.3)
Slide 13: The UK car market and our position
The UK car market and our position 13
Slide 14: The UK market continues to be challenging as new and used car transactions decline
The UK market continues to be challenging as the volume of new and used car transactions decline New car registrations (1) Used car transactions (2) (11.0%) (3.7%) (2.6%) (3.1%) (0.9%) (2.9%) (1) Society of Motor Manufacturers & Traders (SMMT) – 12 month rolling total (2) DVLA transaction data – 12
Slide 15: Used car prices have decreased marginally in the period
Used car prices have decreased marginally in the period Like-for-like price increase 0.3% 2.4% 3.5% (0.6%) 14,000 16.0% 14.0% 12,000 12.0% 10,000 10.0% 8.0% 8,000 6.0% 6,000 4.0% 4,000 2.0% - 2,000 (2.0%) - (4.0%) Jun Jul Sep Dec Jan Jun Jul Sep Dec Jan Jun Jul Sep Dec Jan Jun Jul Sep May Mar May Ma
Slide 16: We are growing our audience with most of our visits coming organically
We are growing our audience with most of our visits coming organically Cross platform visits Autotrader.co.uk (1) Split of unpaid vs. paid cross platform visits - (Average pcm - million) Autotrader.co.uk (1) 60.0 (2%) 0% 4% H1 2018 H1 2019 H1 2020 50.0 Non- paid % Paid % 93% 93% 91% 40.0 30.0 Advert
Slide 17: Our position as market leader has strengthened in the period
Our position as market leader has strengthened in the period Share of minutes as measured by comScore (1) Total minutes spent in September 2019 (millions) (2) H1 2018 H1 2019 H1 2020 707 Auto Trader 69% 72% >75% Gumtree/ Ebay Ebay, Motors Gumtree, Motors 19.3% 17.4% 11.1% Combined CarGurus 89 Piston
Slide 18: Product update
Product update = AutoTrader
Slide 19: Products launched through our April event have been well received
Products launched through our April event have been well received Vehicle Check Text Chat Vehicle Check enables retailers to check the provenance of vehicles they might Text Chat gives buyers the ability to text be looking to source. The checks also provide consumers with a greater level of retailer
Slide 20: Our new car proposition is growing its audience and delivering value for retailers
Our new car proposition is growing its audience and we are delivering value for retailers 33,000 New cars on site per month 19m New car advert views in the first half 1.6m Consumers viewed a new car advert in September 20
Slide 21: Outlook
Outlook YQ a
Slide 22: We have acquired KeeResources and Dealer Auction continues to progress well
We have acquired KeeResources and Dealer Auction continues to progress well Sell faster. Buy smarter. Provides a unique vehicle data set that Our joint venture with Cox underpins our platform Automotive Provides data to a range of customers in the On track to transact approximately industry includin
Slide 23: 2020 full year outlook
2020 full year outlook • In the first half, we have seen stronger than expected revenue growth from retailers, underpinned by product innovation. We expect good ARPR growth to continue, albeit with a slightly increased headwind from stock. • We anticipate the average number of retailer forecourts to
Slide 24: Appendix
Appendix = AutoTrader
Slide 25: Cashflow statement
Cashflow statement H1 2020 H1 2019 £ million £ million Profit before tax 127.7 114.5 Depreciation & amortisation 3.3 4.5 Share-based payments charge (excluding NI) 2.7 2.6 Share of profit from joint ventures (1.8) - Finance costs - net 3.7 6.1 Other non-cash items (0.3) - Changes in working capital
Slide 26: KeeResources impact
KeeResources impact • KeeResources annual revenue and Operating profit for their financial year ending December 2018 was £5.5m and £0.8m respectively • 75% of KeeResources revenue, relating to non-Manufacturer customers will sit within Other, within our Trade segment, which does not impact ARPR. The
Slide 27: The automotive ecosystem
The automotive ecosystem Pal Manufacturers = AutoTrader oo Dispose Wholesalers aw New car leasing Car owners Newand used car =a sales Retailers Part-exchange im Banks, lenders and brokers es Car buying Coed schemes ‘s Insurers, underwriters and comparisons sites Source Dispose 27
Slide 28: Auto Trader advertising package structure
Auto Trader advertising package structure Starter Basic Standard Advanced Premium Improve visibility of your stock Boost your ad views with our Enjoy the greatest share of desktop ad Engage your buyers through Stand out and encourage on mobile and drive more ad bonus slot in search views through pri
Slide 29: Notes
Notes = AutoTrader 29
Slide 30: Notes
Notes = AutoTrader 30
Slide 31: a AutoTrader
a AutoTrader