BAPCOR LIMITED — AGM Information 2015

Oct 25, 2015

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2015 Annual General Meeting Chief Executive Officer’s Presentation

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BURSON 2015 AGM PRESENTATION

Australia’s Leading Provider of Aftermarket Parts, Accessories and Services.

Disclaimer

The material in this presentation has been prepared by Burson Group Limited (“Burson”) ABN 80 153 199 912 and is general background information about Burson’s activities current at the date of this presentation. The information is given in summary form and does not purport to be complete. Information in this presentation, including forecast financial information should not be considered as advice or a recommendation to investors or potential investors and does not take into account investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate.

Persons needing advice should consult their stockbroker, solicitor, accountant or other independent financial advisor.

The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about and observe such restrictions.

This presentation does not constitute, or form part of, an offer to sell or the solicitation of an offer to subscribe for or buy any securities, nor the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issue or transfer of the securities referred to in this presentation in any jurisdiction in contravention of applicable law.

Certain statements made in this presentation are forward-looking statements. These forward-looking statements are not historical facts but rather are based on Burson’s current expectations, estimates and projections about the industry in which Burson operates, and beliefs and assumptions. Words such as "anticipates”, "expects”, "intends,", "plans”, "believes”, "seeks”, "estimates”, and similar expressions are intended to identify forwardlooking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors, some of which are beyond the control of Burson, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward- looking statements. Burson cautions investors and potential investors not to place undue reliance on these forward-looking statements, which reflect the view of Burson only as of the date of this presentation. The forward-looking statements made in this presentation relate only to events as of the date on which the statements are made. Burson will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances or unanticipated events occurring after the date of this presentation except as required by law or by any appropriate regulatory authority.

BURSON 2015 AGM PRESENTATION

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Presentation Contents

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FY2015 Highlights

Introduction to ANA FY2016 1[st] Quarter Update Strategy and Outlook Integration and Optimisation of Aftermarket Network Australia

BURSON 2015 AGM PRESENTATION

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Australia’s Leading Provider of Aftermarket Parts, Accessories and Services.

Operational & Strategic Highlights FY2015

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  Burson now operating in all states and territories in Australia with continued store expansion during FY2015 of 14 stores to 130. Current store total 133.

• 3 new stores in Western Australia

• 6 new stores in Queensland

• 4 new stores in New South Wales

• 1 new store in South Australia

•  Supplier price increases successfully passed through to customers in H2 FY2015

 

• 8,000 sqm Brisbane DC established and operating since July 2015

 

27 front-of-store enhancements completed to grow walk in sales

 

Inventory cleansing program conducted reducing slow moving and obsolete inventories by $3M

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• Continued people development / regional management expansion

 

Signed agreement for the purchase on Metcash Automotive Holdings with transaction completed 31 July 2015. Successful Entitlement Offer in June & July 2015.

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Australia’s Leading Provider of Aftermarket Parts, Accessories and Services.

Proforma Financial Highlights in FY2015

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Comparison to FY2014 Proforma Results

•  Same store sales growth of 4.6% •  Revenue $375 million – up 9.9% •  Gross margin % 43.7% - up 0.7

•  EBITDA margin 11.1% – up 0.6 •  NPAT $23.1 million – up 19.1%

•  Earnings per share – up 19.1%

•  Underlying net debt down $15M since June 14  Working capital to sales 11%

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Australia’s Leading Provider of Aftermarket Parts, Accessories and Services.

Summary of Key Performance Indicators

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Store Numbers

Store expansion continues – ahead of FY2015 prospectus forecast of 124 stores

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130
116
105
100
FY2012 FY2013 FY2014 FY2015
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Revenue and “Same Store” growth

Store expansion together with strong like for like sales growth driving revenue growth

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375.3
341.6
306.3
284.3
4.6%
3.9%
2.1%
1.4%
FY2012 FY2013 FY2014 FY2015
Revenue ($ million) Like for like growth %
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Gross Profit Margin

Continued improvement reflecting margin improvement initiatives

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43.7%
43.0%
42.2%
39.4%
FY2012 FY2013 FY2014 FY2015
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EBITDA Margin

Outcome of growth and improvement initiatives

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11.1%
10.5%
9.9%
8.0%
FY2012 FY2013 FY2014 FY2015
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Australia’s Leading Provider of Aftermarket Parts, Accessories and Services.

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Introduction to ANA

• Burson Group acquired Metcash Automotive Holdings (since renamed Aftermarket Network Australia or ANA) for $283M effective 1 August 2015.

• The acquisition is approximately 20% EPS accretive on a full year proforma basis*

• ANA is a wholesaler and distributor of automotive parts and accessories to a marketing network of 416 stores (under the Autobarn, Autopro, Carparts, Opposite Lock, ABS and Midas brands) as well as ~3,000 other aftermarket customers through its wholesale business.

• Core focus on;

• Retailing parts & accessories (Autobarn, AutoPro, Opposite Lock & Carparts)

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• Service workshops (Midas, ABS)

• Wholesale Operations (ABG distribution, ATAP, IBS, Partco, MCB & Garrmax)

• Stocks over 130,000 SKU’s with 10 Distribution Centers (50,000 sqm’s)

• Business Size;

	End Network Sales ANA Sales Locations (2) (1)
Retail	$400m $70m 331
Service	$110m $20m 140
Wholesale/sales to franchisees	– $180m 10
	$510m $270m 481

• Australia’s largest automotive aftermarket franchise network

Includes sales recorded in franchise stores (1) Franchise fees, marketing, company store sales, supplier rebates (2) *on a terp adjusted basis using broker consensus forecasts for 12 months ending 30 June 2015 for BAP and MAH audited accounts for twelve months ending 30 April 2015

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Australia’s Leading Provider of Aftermarket Parts, Accessories and Services.

Automotive Aftermarket Supply Chain

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The acquisition of ANA was strategically compelling and aligned with Burson Group’s growth strategy – complementary to trade business with minimal overlap and provides additional avenues for growth

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Parts and
“Trade” Parts
Parts Manufacturer Parts Wholesaler Components End Vehicle Owner
Installer
Distributor
Original Equipment
Vehicle Manufacturer Manufacturer Dealer
Workshops
Wholesaler and Do-It-For-Me
Trade Distributors Chain Workshops
Importer (DIFM)
Independent
Parts Manufacturer
Workshops
Do-It-Yourself
Retail Distributors
(DIY)
BAP pre ANA BAP following ANA acquisition
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Australia’s Leading Provider of Aftermarket Parts, Accessories and Services.

Burson Group including ANA

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• The Brands of the Group now comprise;

TRADE

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RETAIL

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SERVICE

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WHOLESALE

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BURSON 2015 AGM PRESENTATION

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Australia’s Leading Provider of Aftermarket Parts, Accessories and Services.

FY16 – 1[st] Quarter

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• Completed the acquisition of ANA on 31[st] July 2015.

• Transition is proceeding smoothly

• ANA is operating largely stand-alone until optimisation review completed

• • Delivering expected results

• Added three stores in Burson Trade, including opening first store in ACT.

• Sales up approx. 9% YOY in Burson Trade and 6% in ANA.

• Solid start to year, with same store sales;

• Burson Trade at 3.9%

• ANA Autobarn stores at 3.7 %

• Margins continue to be under competitive pressure but holding slightly ahead of FY2015 full year. • Direct import margin not yet recovered in marketplace

• Unsustainable competitive discounting buying business

BURSON 2015 AGM PRESENTATION

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Australia’s Leading Provider of Aftermarket Parts, Accessories and Services.

Integration & Optimisation Process

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• Integration Process underway:

• Currently largely as a stand alone businesses

• • Achieve synergies where appropriate.

• Strategy reaffirmed for each segment within the business.

• 15 Optimisation Plan Projects being established. Areas include Procurement, freight, marketing, intercompany sales, price/margin, warehouse, network plan, inventory, supply chain.

• Planned Investor Day after FY16 half year results to update on plan.

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BURSON 2015 AGM PRESENTATION

Australia’s Leading Provider of Aftermarket Parts, Accessories and Services.

Burson Group Strategy

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Australia’s leading provider of aftermarket parts, equipment, accessories and services.

• Continue to strengthen our Trade presence in a resilient market.

• National store network and customer service offering of extensive parts range and availability, delivery speed, and knowledgeable staff.

• Burson Auto Parts  On track to 175 stores by 2019.

• Focused on growing sales from existing stores, electronic and on-line platforms, increasing “walk in” store sales, chain workshop sales and inventory range.

• Improve cost of sales and proportion of “value” brands .

• Wholesale, distribution and franchised focused marketing network

• Expand the wholesale and distribution offering.

Aftermarket Network Australia

• Increase same store sales, sales penetration and store profitability

• Grow the franchise networks

• 331 “Retail focused” stores under Autobarn, Autopro, Opposite Lock and Carparts

• 140 service workshops under Midas and ABS

• Gain benefits of recent acquisitions and simplify processes and systems

• Support franchise and independent businesses

Optimisation

• Opportunity to assess conversion of stores to maximize strategic position

• Optimise synergies between the two businesses along the entire supply chain:  Procurement, distribution, support services, sales, value brands

BURSON 2015 AGM PRESENTATION

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Australia’s Leading Provider of Aftermarket Parts, Accessories and Services.

Outlook

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Burson Auto (excluding ANA)

• Full year NPAT outlook for Burson excluding the ANA business is to grow NPAT by low double digit percentage

• Target approximately 140 stores by 30 June 2016 (currently at 133 stores)

• Expect same store sales growth of between 3% and 4% with reasonably steady margin

• Competitive pressures exist but overall market opportunities remain favourable

ANA

• FY2016 will include 11 months trading of ANA – similar run rate to FY15

• Wholesale business impacted by exchange rate, offset by higher volumes in distribution business

GROUP

• FY16 EPS growth percentage – mid teens

• Consistent with previous announcement of annualized 20%

• ANA will be included for 11 months – from 1 August 2015

BURSON 2015 AGM PRESENTATION

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Australia’s Leading Provider of Aftermarket Parts, Accessories and Services.

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Thank You

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Australia’s Leading Provider of Aftermarket Parts, Accessories and Services.