2015 Full Year Results - AP Eagers...2015 Full Year Results Presentation! • Record statutory basic...

February 2016

2015 Full Year Results Presentation

•  Record statutory profit before tax $121m up 18%

•  Record net profit after tax $87.0m up 13%

•  Record statutory (basic) EPS 47.6 cents an increase of 11% from prior year

•  Record fully franked final dividend of 20 cents for a record FY dividend of 32 cents up 19%

•  Record results from core Car Retailing segment

•  Full year contributions from acquisitions made in 2014

•  $5.5 million non-cash goodwill write down in Truck Retailing segment

•  Gains from sale of property and investments

•  Strong balance sheet with stable debt and gearing levels.

2015 Full Year Highlights

23/02/2016

2015 Full Year Results Presentation!

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

1,100,000

1,200,000

1,300,000

2009 2010 2011 2012 2013 2014 2015

Historical National Vehicle Sales

All Other Brands

Honda Total

Subaru Total

Volkswagen Total

Mitsubishi Total

Nissan Total

Ford Total

Hyundai Total

Mazda Total

Holden Total

Toyota Total

National Vehicle Sales

23/02/2016


ACT2%

NSW33%

NT1%QLD

20%

SA6%TAS

2%

VIC27%

WA9%

Total Australian Market Share by State (VFACTS)

Total market: 1,155,408 (2014: 1,113,224) -‐ Up 3.8%

•  Record sales with 2015 new vehicle market up 3.8%

•  Correct balance between supply and demand.

•  Strong growth in luxury brands

•  Retail industry evolving following GFC, manufacturing exits, and retailer consolidation :- creating some risks and many opportunities.

Australian New Vehicle Sales – 2015

23/02/2016


•  80% of cars sold in Australia are imported from Japan, Thailand, Korea and EU Countries.

•  Manufacturers have long planning horizons and diversified exposures;

•  Product and production planning based on 3-7 year cycles.

•  Most manufacturers pursuing global common vehicle platform strategies.

•  Generally large product runs based on supply of a common product to multiple markets.

•  Manufacturer distribution margins can wear some of the adjustment.

•  Product specification can and does adjust to maintain price point.

•  Australian market relatively accessible and marketing is cost effective, but highly competitive.

•  Vehicle prices remain consistent with recent years.

Exchange Rate Impact

23/02/2016


29%

22%18%

12%

8%

5%6%

New Vehicle Sales (VFACTS) by Country of Origin

Japan

Thailand

EU Countries

Korea

Australia

USA

Other

Total market: 1,155,408 vehicles

20

40

60

80

100

120

Dec-1

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Monthly 5 Years: AUD / JPN

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1,000

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-14

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15

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n-1

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-15

Dec-1

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Monthly 5 Years: AUD / KRW

-

0.50

1.00

Dec-1

0

Mar-

11

Ju

n-1

1

Sep

-11

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1

Mar-

12

Ju

n-1

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n-1

4

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-14

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4

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15

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n-1

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-15

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Monthly 5 Years: AUD / EUR

10

20

30

40

Dec-1

0

Mar-

11

Ju

n-1

1

Sep

-11

Dec-1

1

Mar-

12

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4

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-14

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15

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n-1

5

Sep

-15

Dec-1

5

Monthly 5 Years: AUD / THB

Exchange Rates

23/02/2016


-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

La

st P

ric

e

90 Day Bank Bill Rate

Affordability

23/02/2016


12%3%

36%

25%

22%

2%

APE Used Vehicle Sales by StateTotal 26,399 + 3.7% (20,324 retail)

Retail Cars -‐ NSW

Retail Cars -‐ NT

Retail Cars -‐ Qld

Retail Cars -‐ SA

Auction -‐ Qld

National Trucks

22%

5%

50%

19%

4%

APE New Vehicle Sales by StateTotal 51,231 + 13.9% (4.4% of National Market)

Cars -‐ NSW

Cars -‐ NT

Cars -‐ QLD

Cars -‐ SA

National Trucks

APE Vehicle Sales 2015

23/02/2016


2015 Full Year Highlights - Financial

23/02/2016


•  Record statutory basic EPS of 47.6 cents, an increase of 11%.

•  Fully franked final dividend of 20 cents for a record full year dividend of 32 cents.

•  EBITDA (excluding impairment) increased to $163m up 18%.

•  Underlying net profit before tax increased by 19% to $126.4m.

•  Cash flow from operations of $84.6m.

•  Financial strength and flexibility increased - EBITDA/Interest Cover 7.6 times (2015) - EBITDA/Interest Cover 6.2 times (2014).

$ Million 2015 2014

Revenue 3,246.4 2,858.1 Up 14%

EBITDA 163.1 138.1 Up 18%

EBIT 142.3 124.9 Up 14%

PBT 121.0 102.8 Up 18%

PAT 87.0 76.7 Up 13%

Cash from operating activities 84.6 99.2 Down -‐15%

NTA/share 2.95 2.38 Up 24%

Net gearing excluding bailment debt 19.6% 24.3% Down -‐19%

Change

Financial Summary

23/02/2016


•  New vehicle inventory funded by bailment debt.

•  Parts and most used vehicle inventory is balance sheet funded.

•  AHG and Smart Group investments valued at $279.4m.

•  Substantial property portfolio underwrites the company’s financial position.

•  NTA increased by 24% to $2.95 per share

2015 $'m

CA -‐ CL (excl. held for sale) 162.2

Freehold Property (incl. held for sale) 249.2

Other Non Current Tangible Assets 77.5

Investments 281.8

Intangible Assets 160.8

Non Current Debt (209.0)

Other N/C Liabilities (Deferred tax, and provisions) (19.5)

Balance Sheet - Summary

23/02/2016 2015 Full Year Results Presentation!

Asset Fair Value Adjustments (before tax)

23/02/2016


43.0

10.6 0.9

1.4 7.4

0.9 47.6

30.0

35.0

40.0

45.0

50.0

55.0

60.0

NPA

T Prior

Perio

d

Ope

ratio

nal

Result

AHG

Investment

(net of

interest)

Profit on

Sale

Prop

erty /

Investments

MTA

I,Im

pairm

ent,

Other

Income,…

Dilutio

n

NPA

T Cu

rren

tPerio

d

Cents p

er Share

EPS Bridge

Earnings Per Share

23/02/2016


23.8

-

145.8 21.4

39.9

54.4

10.7 29.4

14.3 12.1

37.5

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

$ M

illio

nCash Flow Bridge

Financial Summary - Cashflow


40.4

65.961.1

76.2 74.5

96.3

113.2118.9

132.0

154.4

36.840.0

26.2

50.146.8

61.7

78.4

87.3

106.2

126.4

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

$ m

illio

n

Financial Trends: Underlying PBT

Operating Earnings (EBITDA) PBT Underlying

Operating Earnings is EBITDA Underlying excluding profit/loss on sale of assets andOperating Earnings is EBITDA Underlying excluding profit/loss on sale of assets and

Opera&ng Earnings is EBITDA Underlying excluding profit/loss on sale of assets and from associates. It includes AHG dividend. PBT Underlying excludes business acquisi&on costs, GST tax refunds and fair value adjustments rela&ng to freehold property assets, goodwill and investments

Financial Trends – Underlying PBT


3.4%

3.9%

3.6%

4.6%

4.1%4.0%

4.3%

4.4%

4.6%4.8%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Percentage

Operating MarginOperating Earnings Margin % Linear (Operating Earnings Margin %)

Includes AHG dividend from 2012

Opera&ng Earnings is EBITDA Underlying excluding profit/loss on sale of assets and from associates. It includes AHG dividend.

Financial Trends


8.111.0 10.6

12.516.3

18.2 18.7

24.5

1.7

13.410.4

13.0

17.718.2

24.3

23.1

0.0

10.0

20.0

30.0

40.0

50.0

60.0

2008 2009 2010 2011 2012 2013 2014 2015

Cen

ts

EPS Statutory (Basic)June - first 6 months December - second 6 months

Government

stimulus

GFC/

Lehman Bros

9.8

24.4

21.0

25.5

34.036.4

43.0

47.6

Financial Trends


3.0 3.4 3.6 3.8 4.4 4.4 4.4 4.65.6

7.08.0

9.0

12.0

3.63.8 4.0

4.8

7.2

4.4

8.0 8.2

10.4

13.0

15.0

18.0

20.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Cen

ts p

er

Sh

are

Dividend

Interim Dividend Final Dividend

7.2 7.68.6

11.6

8.8

12.4 12.8

16.0

20.0

23.0

27.0

32.0

6.6

Financial Trends


Segment Results

Car retailing Record car retailing in Qld & NSW with positive contributions from acquisitions. Strong trading in parts and service businesses. Truck retailing Challenging new and used heavy truck trading conditions. Property Lower income offset by gain on sale of property and lower interest costs. Investment Dividend income and further unrealised gains on revaluation of investments.

68.8

3.5

14.8

10.6

0.4

4.7

102.8

98.0

-3.3

16.3

61.1

-48.4

-2.8

121.0

-50.0 -25.0 - 25.0 50.0 75.0 100.0 125.0

Car Retailing

Truck Retailing

Property

Investment

Eliminations*

Unallocated Corporate

Net Profit Before Tax

$ million

Segment Contributions

2014

2015

Operating Earnings is EBITDA Underlying excluding profit/loss on sale of assets and

Elimina&ons include inter-‐segment transac&ons and asset fair value adjustments not recognised in the P&L


•  Record results with profit contribution up 42% on prior year.

•  Record results for QLD and NSW dealership operations.

2015 $'m

2014$'m

Revenue 2,884.7 2,470.4

Segment Profit before Tax 98.0 68.8

Total Assets 732.8 657.1

Total Liabilities 476.0 438.0

Net Assets 256.8 219.1

PBT/Revenue 3.4% 2.8%

RONA (after tax) 26.9% 22.5%

Segment Results – Car Retailing


•  Segment represents 10.6% of revenue and 4% of net assets.

•  Includes goodwill impairment of $5.5 million.

•  Challenging new and used truck trading conditions.

2015 $'m

2014$'m

Revenue 345.1 374.2

Segment Profit before Tax (3.3) 3.5




PBT/Revenue -‐0.9% 0.9%

RONA (after tax) -‐13.8% 6.1%

Segment Results – Truck Retailing


•  Sale of Newstead and Fortitude Valley properties.

•  Overall impact of revaluations neutral.

•  No property assets held for sale.

•  Cash from property sales will be received in 1H 16.

2015 $'m

2014$'m

Revenue 27.9 29.9


Revaluation surplus/deficit before tax

0.1 (2.3)




RONA Trading (after tax) 4.9% 6.2%

RONA incl revaluations (after tax)

6.1% 6.5%

Segment Results – Property


•  Further revaluation gains adding to substantial asset balance driving overall return.

•  Profit before tax excludes unrealised gains on investments.

•  Realised profit on sale of SIQ shares in 2015.

2015 $'m

2014$'m

Revenue 13.8 12.1


Revaluation surplus/deficit before tax

46.2 1.3




RONA Trading (after tax) 5.3% 5.8%

RONA incl revaluations (after tax)

26.5% 6.3%

Segment Results – Investments


Group Strategy

23/02/2016


Innovation & Complimentary Services update

23/02/2016


23/02/2016


Portfolio approach to solve the consumer pain points

23/02/2016


ZOOPER MASTER BRAND

WITHOUT STRAPLINE

WITH STRAPLINE

used cars

You can’t go wrong.


used cars



Logos

Sub Brand logo example

Brand Logo example

used cars



used cars



There will be a library of logos for any kind of business you would be working within Carzoos, be it finance, service or online.

ZOOPER MASTER BRAND

WITHOUT STRAPLINE

WITH STRAPLINE

23/02/2016


ZOOPER MASTER BRAND

WITHOUT STRAPLINE

WITH STRAPLINE

23/02/2016


Zooper Consumer Benefits

23/02/2016


Zooper Used Car Centers: - Cardiff (NSW) & Brendale (QLD)

23/02/2016


Zoopercars.com.au user experience (UX) built with mobile first best practice. Goes live May 1, 2016.

23/02/2016


23/02/2016


The first truly ‘consumer centric’ Auto Finance brand

23/02/2016


used cars



used cars



Logos

Sub Brand logo example

Brand Logo example

used cars



used cars



There will be a library of logos for any kind of business you would be working within Carzoos, be it finance, service or online.

Relaunch Carzoos to reflect new contemporary & sophisticated brand positioning

23/02/2016


A completely NEW WAY to buy and sell

23/02/2016


23/02/2016


Hi we’re Carzoos, and right now we’re looking for Mobile Inspectors to help us launch an entirely new way

to buy and sell cars.

This is more than just an awesome automotive job, it’s your chance to get on the ground floor and become the mobile

superhero of a game-changing company.

Wish you’d been there for the launch of Uber, Air BNB or even Google? Well, now you could become a part of

the next big thing.

The way people buy and sell cars hasn’t really changed in 100 years. Until now.

Gone are the yards crammed with sheet metal.Gone are the plaid-suit wearing, shonky dealers. Gone are

the hassle and haggle. Gone is the fear.

Carzoos retail stores will be a place where people can BUY FEARLESS and SELL FEARLESS.

And you could be the superhero, cape-wearing, mechanical genius of our shiny new Carzoos Flagship store - smack-bang in one of the most bustling

shopping centres in Brisbane.

In many cases, as you head out in your dedicated Carzoos van for a mobile inspection, your friendly

and comforting encyclopaedic knowledge of everything car will be our customer’s first experience of what it truly means to buy and

sell fearless.

OK, so let’s talk nuts and bolts.We’re offering seriously competitive,

experience based packages.

So…if you have no problem saying -“I can help you with that”, then we

need to talk. Full and part-time positions are ready to go.*

You’ll be…

Conducting ‘nit-picky’ 150 point inspections.

Ticking every box of the State Roadworthy Regulations

Documenting and photographing vehicles for advertising and appraisals

Detailing our cars for photography

Providing support and intel for our retail buddies back at the Carzoos store

Sharing your boundless knowledge and giving our customers the confidence they crave

Generally being awesome all day, everyday.

You’ll need…

A valid Certificate 3 Mechanical Automotive Trade + Current AIS Examiner Licence

A valid manual Drivers Licence and Safe Driving Record

A minimum 3-5 years relevant automotive mechanical experience Ninja level people skills, communication skills and a love of teamwork.

MOBILE INSPECTOR WANTED AN ENTIRELY NEW TYPE OF AUTOMOTIVE CAREER

Send your confidential application to:

Antoinette YerburyGeneral Manager - Sales & Marketing

[email protected] or

Wade HerrmanGeneral Manager Fixed Operations


[email protected]

PH: 07 3608 7169

Only those eligible to work in Australia need apply.No Agencies please.

Hi we’re Carzoos, and right now we’re looking for Retail Store Buddies to help us launch an entirely new

way to buy and sell cars.

This is more than just an awesome sales job, it’s your chance to get a job you’ll love on the ground floor of a

game-changing company.

Wish you’d been there for the launch of Uber,Air BNB or even Google? Well, now you could become

a part of the next big thing.


Gone are the yards crammed with sheet metal. Gone are the plaid-suit wearing, shonky dealers. Gone are the

hassle and haggle. Gone is the fear.


Sleek, high-tech and crewed by friendly, help-obsessed store buddies like you. And you won’t find us on the

magic mile. Carzoo’s Flagship store will be smack-bang in one of the most bustling shopping centres

in Brisbane.

You won’t need to be aTop-Gear-host-car-guru, but being a fan of

the 4-wheel world will help.

We can get you up to speed with everything you need to know. All our

tech including our in-store device, shiny new interactive website and customer mobile app have all been designed to make your job and your customer’s

experience completely fearless.

What you will need is a natural positivity. Not just glass half full, but glass overflowing, fountain-like.

We’re all about taking the fear out of buying andselling cars and you’ll be the first friendly face in that

process - your customer’s buddy on the road tripto fun and fearless.

You’ll be greeting customers, conducting research, co-ordinating mobile inspections, buying cars, selling cars and finding cars. We need people like you who can talk the talk, fill the tank, drive the car - the new

Carzoos way.

OK, so let’s talk nuts and bolts.We’re offering attractive packages for the right buddies

who make the best impression.(No tyre kickers please).

So…if you have no problem saying - “I can help you with that”, then we need to talk.

Full and part-time positions are ready to go.*

RETAIL STORE BUDDIES WANTEDAN ENTIRELY NEW TYPE OF SALES CAREER



[email protected]

[email protected]

PH: 07 3608 7169

*Includes weekend hours based on a 14-day rotating roster. Only those eligible to work in

Australia need apply. No Agencies please.

CARZOOS

Hi we’re Carzoos, an exciting new AP Eagers start-up, and right now we’re looking for a Chief Experience

Manager to help us launch an entirely new way to buy and sell cars.

This is more than just an awesome sales management job, it’s your chance to get a job you’ll love on the

ground floor of a game-changing company.

Wish you’d been there for the launch of Uber, Air BNB or even Google? Well, now you could become a part of

the next big thing.


Gone are the yards crammed with sheet metal. Gone are the plaid suit wearing, shonky dealers. Gone are the

hassle and haggle. Gone is the fear.


Sleek, high-tech and crewed by friendly, help-obsessed store buddies like you. And you won’t find us on the

magic mile. Carzoo’s Flagship store will be smack-bang in one of the most bustling shopping

centresin Brisbane.

You won’t need to be a Top-Gear-host-car-guru, but being a fan of the 4-wheel world will

help.

We can get you up to speed with everythingyou need to know. All our tech including

our in-store device, shiny new interactive website and customer mobile app

have all been designed to make your job and your customer’s experience

completely fearless.

What you will need are ninja-level people skills combined with an uncanny sixth sense for what your

customer really needs and wants.

We’re all about taking the fear out of buying and selling cars and you’ll be responsible for making sure every

second of your customers experience with us isn’t just fearless…it’s amazing.

You’ll also be inspiring staff, facilitating stock and managing the delivery process and really just be all

over every aspect of the sales experience – we need people like you who can talk the talk, fill the tank and

drive the car…the new Carzoos way.

OK, so let’s talk nuts and bolts. This is a major opportunity to turbo charge your career in the group. We’re offering a very attractive package for the right

applicant who knows how to make an impression.(No tyre kickers please)

So…if you have no problem saying - “I can help you with that”, then we need to talk.

CHIEF EXPERIENCE MANAGER WANTED AN ENTIRELY NEW TYPE OF SALES MANAGEMENT CAREER




Andrew Bunce General Manager Carzoos

[email protected] [email protected]

PH: 07 3608 7169*Carzoos Flagship Store will operate according to Centre Opening

Hours. Flexible rotating roster. Only those eligible to work in Australia need apply. No Agencies please.

CARZOOS

A new way of automotive customer service.

23/02/2016


This document may contain forward-looking statements, forecasts and estimates made by the Company (forward-looking statements), including the anticipated future performance of the Company and the market in which it operates. These forward-looking statements are based on certain key expectations and assumptions of known and unknown risks, uncertainties and other factors, which are deemed reasonable when made but may or may not prove correct. Actual events are difficult to predict and may depend upon factors that are beyond the Company’s control. Therefore, actual results, may turn out to be materially different from any future results, performance or achievements express or implied by such forward-looking statements. Forward-looking statements only speak as of the date of this document and no representations are made as to the accuracy or fairness of such forward-looking statements. The Company disclaims any obligation to update any forward-looking statements, to reflect any change in the Company’s expectations with regard thereto, or any change in events, conditions or circumstances on which any such statement is based.

Forward-Looking Statements

23/02/2016


Appendix

23/02/2016


A.P. Eagers

COMPANY PROFILE

23/02/2016


•  103 year old automotive retail group founded in 1913

•  58 years as a listed public company – dividend paid every year

•  A.P. Eagers owns $249m of prime real estate

• Represents all 12 of the top 12 selling vehicle brands in Australia and 27 car brands in total along with 12 truck / bus brands

•  3,600 employees 110+ dealership locations in QLD, NT, NSW, VIC and SA

•  19.9% ownership of Automotive Holdings Group ($275m*)

•  7.5% ownership of www.carsguide.com.au ($2.25m)

*31/12/15

A.P. Eagers Today (December 2015)

23/02/2016


Represents 10 of the top 10 selling volume car brands in Australia

A.P. Eagers Volume Car Brands

23/02/2016


A.P. Eagers Luxury* Car Brands

* Luxury is defined as luxury vehicle selling more than 500 units annually (V Facts) * Infiniti (574 units) and Maserati (519 units) increase this segment from 9-11 brands in 2015)

#

# Starts March 2016

Represents 10 of the top 11 selling luxury car brands in Australia

23/02/2016


A.P. Eagers Truck and Bus Brands

Representing 12 truck and bus brands

23/02/2016


Revenue by State / % of group Revenue - $3.25bn

23/02/2016


$0.0bn

$1.67bn (51%)

$0.67bn (20%)

$0.61bn (19%)

$0.15bn (5%)

$0.15bn (5%)

$0.0bn

Income Opportunity Franchised Dealership

23/02/2016


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