Morgans Conference October 2015
Financial Trends PBT Underlying 80.0 76.3 70.0 60.0 Operating Earnings PBT Underlying 52.1 54.2 59.0 57.8 61.1 61.9 70.1 60.1 58.5 $ million 50.0 40.0 30.0 32.8 28.3 40.6 38.2 35.6 36.4 25.2 24.9 23.5 23.3 44.2 27.9 33.8 37.2 41.2 42.0 45.3 46.1 20.0 16.6 10.0 9.6-2008 2008 2H 2009 2009 2H 2010 2010 2H 2011 2011 2H 2012 2012 2H 2013 2013 2H 2014 2014 2H 2015 Operating Earnings is EBITDA Underlying excluding profit/loss on sale of assets and from associates. It includes AHG dividend. PBT Underling excludes business acquisition costs, GST tax refunds, and fair value adjustments relating to freehold property assets, investments and intangible assets. 12
Financial Trends Dividend 30.0 Interim Dividend Final Dividend 27.0 25.0 23.0 Cents per share 20.0 15.0 10.0 5.0-6.6 6.2 5.6 4.8 2.4 3.0 3.4 3.6 12.8 11.6 12.4 8.6 8.8 7.6 7.2 7.2 8.0 8.2 3.8 4.0 4.8 4.4 2.4 2.6 2.8 3.0 3.4 3.6 3.8 4.4 4.4 4.4 4.6 20.0 16.0 18.0 15.0 13.0 10.4 12.0 7.0 8.0 9.0 5.6 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 15
Strategy (FOCUS: GROW EPS & PAY LARGER DIVIDENDS) Exceed stakeholder expectations customers, employees, partners (manufacturers), shareholders and community. Growth by selective acquisition Development of enhancements and complimentary services Business Optimisation continuous improvement in processes and systems.. 4
APE Vehicle Sales 2014 A.P Eagers New Vehicle Sales Total 44,966 + 5.5% (4.0% of National Market) A.P. Eagers Used Vehicle Sales Total 25,447 + 8.8% (Retail used 19380) 23% 5% 46% Cars - Qld Cars - NT Cars - NSW Cars - SA National Trucks 23% 3% 33% Retail Cars - Qld Retail Cars - NT Retail Cars - NSW Retail Cars - SA Auction - QLD National Trucks 20% 6% 29% 9% 3% 2014 New Vehicles 1 : 0.43 Retail Used Vehicles (Excludes Auctions) 2005 New Vehicles 1 : 0.23 Retail Used Vehicles 5
Growth Timeline Revenue 3,500,000 3,000,000 Revenue Acquisitions, Organic Growth and Disposals Eagers Mitsubishi $ A 0 0 0 ' s 2,500,000 2,000,000 1,500,000 1,000,000 500,000 - Bridge Toyota May 05 Bayside Honda/Kia Feb 06 Brisbane Motor Auctions Mar 06 Austral Audi/ Citroen Dec 06 Hidden Valley Ford/ Aug 06 Kloster Motor Feb 07 Surfers City Holden Aug 07 Bill Buckle Auto Mar 08 Bayside Honda/Kia Aug 09 Caloundra City Autos April 10 Adtrans Oct 10 Western Star Trucks Sydney Nov 10 Eblen Mar 11 Daimler Benz Trucks Adelaide Aug11 City Peugeot Oct 11 Bill Buckle Audi April 11 Infiniti Centre Brisbane Feb 212 AHG Initial Strategic Investmen t July 12 Northern Beaches Land Rover Jaguar Mar 13 Main North and Unley Nissan/ Renault Sept 13 Hidden Valley Ford/ Jun 13 Reynella May 14 Kedron July 14 Ian Boettcher Motors July 14 Craig Black Oct14 Volvo Sunshine Coast July 14 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 H12015 HY 15 2015 2014 6
Growth Timeline PBT underlying 120.0 100.0 PBT Underlying Acquisitions, Organic Growth and Disposals Eblen Mar 11 Eagers Mitsubishi $ A 0 0 0 ' s 80.0 60.0 40.0 20.0 0.0 Bridge Toyota May 05 Bayside Honda/Kia Feb 06 Brisbane Motor Auctions Mar 06 Austral Audi/ Citroen Dec 06 Hidden Valley Ford/ Aug 06 Kloster Motor Feb 07 Surfers City Holden Aug 07 Bill Buckle Auto Mar 08 Bayside Honda/Kia Aug 09 Caloundra City Autos April 10 Adtrans Oct 10 Western Star Trucks Sydney Nov 10 Daimler Benz Trucks Adelaide Aug11 City Peugeot Oct 11 Bill Buckle Audi April 11 Infiniti Centre Brisbane Feb 212 AHG Initial Strategic Investmen t July 12 Northern Beaches Land Rover Jaguar Mar 13 Main North and Unley Nissan/ Renault Sept 13 Hidden Valley Ford/ Jun 13 Reynella May 14 Kedron July 14 Ian Boettcher Motors July 14 Craig Black Oct14 Volvo Sunshine Coast July 14 2015 2014 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 H12015 7
Income Opportunity Franchised Dealership NEW CAR SALES: + Accessories + Finance + Insurance + Car Care + Trade-In USED CAR SALES: + Accessories + Finance + Insurance + Car Care + Trade-In VEHICLE SERVICE: - Value add products i.e. Tyres, wheel alignments, batteries, wiper blades. VEHICLE REPAIR: - Warranty (Manufacturer pays) and Non Warranty (Customer pays) - Internal reconditioning of Used Cars PARTS SALES: - Internal (Service, warranty repair, non-warranty repair, accessories) - External (Retail dealership direct to customer) - External (Wholesale / Trade large distribution centres deliver to customers) - Hard parts (Panel) + Mechanical parts TARGET BASED INCENTIVES: - Volume, Market Share, Franchise Standards, Customer Satisfaction 8
Used Car Market 3 Major Global Trends Stage 1 Disruption: Big Box / Fixed Price Stage 2 Disruption: Tech Fuelled Disruption No Dealership Model 9
The big are getting bigger! Source: Carmax Investor Relations Presentation, May 2015 10
And there is a new frontier of competition fuelled by technology. Wall Street Journal, May 31 2015 Fortune.com, July 20 2015 Techcrunch.com, May 27 2015 11
More Used Car Sales leads to more New Car Sales *1 RTA NSW Data. VFACTS NSW Share Assumption 12
2016 and Beyond New Format - Shopping Centres - Stand alone branded Carzoos sites Improved customer benefits Improved customer experience New independent finance brand to complement Carzoos New Private to Private offering within Carzoos (Peer to Peer) Supported by Carzoos aims to become the largest purchaser of private used vehicles Success in the above leads to Carzoos becoming the largest seller of used vehicles nationally
The Next 12-24 Months Complete Land Rover, Jaguar and Volvo move from Fortitude Valley to Newstead Improve truck retailing division Continue Used Car expansion with AP Eagers existing franchised outlets Launch new stand alone Carzoos direct model Launch new branded products to support Carzoos direct model Acquire 2-3 new acquisitions More Used Car Sales leads to more New Car Sales 14