BAPCOR LIMITED — AGM Information 2016

Oct 20, 2016

2 0 1 6 A n n u a l G e n e r a l M e e t i n g C E O P r e s e n t a t i o n

Our Brands

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2

The material in this presentation has been prepared by Bapcor Limited (“Bapcor”) ABN 80 153 199 912 and is general background information about Bapcor’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 Bapcor’s current expectations, estimates and projections about the industry in which Bapcor operates, and beliefs and assumptions. Words such as "anticipates”, "expects”, "intends,", "plans”, "believes”, "seeks”, "estimates”, and similar expressions are intended to identify forward-looking 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 Bapcor, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward- looking statements. Bapcor cautions investors and potential investors not to place undue reliance on these forward-looking statements, which reflect the view of Bapcor 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. Bapcor 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.

1

FY2016 Highlights

2 FY2017 1[st] Quarter Update & Outlook 3 Strategy Update / Hellaby Offer 4 Q&A

$ million	FY2016(3)	FY2015(4)	Variance
Revenue	685.6	375.0	82.7%
Gross Margin %(1)	44.2%	41.4%	2.8
EBITDA	77.0	41.5	85.7%
NPAT	43.6	23.1	88.9%
EPS(2) (cps)	17.85	13.62	31.0%
Final dividend (cps)	6.0	4.7	27.7%
Full year dividends (cps)	11.0	8.7	26.4%

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Strong performance in all areas

• Very pleasing result with EPS growth of 31.0%

• Result reflects acquisition of ANA on 31 July 2015 (11 months of operations)

• Trade delivered strong result

 ANA performed in line with expectations

Note:

• 1 . Gross margin presented in line with statutory presentation. FY2015 includes a reclassification of freight expense from CODB to COGS.

• FY2016 and FY2015 EPS is based on the TERP adjusted weighted number of shares on issue during the year as per accounting standard AASB -133.

• FY2016 includes business acquisition transaction costs of $1.1M.

• FY2015 proforma results adjusted to write back $4.2M ($3.6M after tax) transaction costs related to acquisition of ANA.

Revenue Growth

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685.6
375.3 82.7%
341.6
306.3
284.3
11.5% 9.9%
7.7%
FY2012 FY2013 FY2014 FY2015 FY2016
Revenue ($ million) Revenue growth %
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EBITDA*

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77.0M
41.5M
36.0M
30.2M
22.7M
FY2012 FY2013 FY2014 FY2015 FY2016
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EPS
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NPAT*

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43.6M
23.1M
19.4M
16.0M
11.0M
FY2012 FY2013 FY2014 FY2015 FY2016
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17.85
13.62
11.9
11
8.7
FY2012 FY2013 FY2014 FY2015 FY2016
EPS Dividend
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GP%
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44.2%
43.7%
43.0%
42.2%
39.4%
FY2012 FY2013 FY2014 FY2015 FY2016
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Trade Same Store Sales Growth %

EBITDA / Sales %

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11.1% 11.2%
10.5%
9.9%
8.0%
FY2012 FY2013 FY2014 FY2015 FY2016
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Store Numbers

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750+
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4.6% 4.6%
3.9%
2.1%
1.4%
FY2012 FY2013 FY2014 FY2015 FY2016
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145
130
116
100 105
FY2012 FY2013 FY2014 FY2015 FY2016
Trade Other
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TRADE

• Revenue up 11.7%, with same store sales of 4.6%

• Added 15 stores in year to be 145 stores at June 2016.

• Supplier cost increases and general cost increases fully passed onto market

• EBITDA / Sales % continues to improve – now 12.4%

• Acquired Precision Automotive Equipment in April 2016

• Overall market conditions are steady – despite Perth and “spot fires”

RETAIL

• Solid sales, with Autobarn same store sales up 5.2%

• Added 48 stores – 350 stores at June 2016

• Acquisition Sprint (SA) in April accounted for 40 new stores

• 15 company owned stores

• EBITDA / Sales margin at 11.6%

• Market conditions stable

SPECIALIST WHOLESALE

• Comprises AAD, Opposite Lock and Bearing Wholesalers added March 2016

• Added 10 Opposite Lock – mainly store-in-store

• Selling prices did not fully recover devaluation of AUD

• Since June 2016, added Baxters auto electrical and Roadsafe Suspension & 4WD

	Revenue	EBITDA	EBITDA % Revenue
	FY2016 FY2015 % Change	FY2016 FY2015 % Change	FY2016 FY2015 Change
Trade	419.1 375.3 11.7%	51.8 44.3 17.0%	12.4% 11.8% 0.6
Retail	191.1 - -	22.2 - -	11.6% - -
Specialist Wholesale	103.4 - -	13.5 - -	9.8% - -
Unallocated / Head Office	(28.0) - -	(6.0) (2.8) -	- - -
Total	685.6 375.3 82.7%	78.1 41.5 88.5%	11.4% 11.1% 0.3

• Burson Trade continued growth in sales and EBITDA

• ANA solid result and excludes July 2015 (not part of Bapcor) which is traditionally a large profit month

• Group EBITDA includes impact of intercompany purchases profit in stock eliminations of $1.3M.

1 FY2016 Highlights

2 FY2017 1[st] Quarter Update & Outlook

3 Strategy Update / Hellaby Offer

4 Q&A

Since 30th June 2016;

• Company store roll out has continued with Trade up 7 stores to 152 and Autobarn company stores up 4 to 20, with total Autobarn stores at 117.

• Solid same store sales growth in 1[st] qtr of FY2017 with both Burson Trade and Autobarn exceeding Strategy the same stores growth of 4.5%.

• All business segments in line with or exceeding EBIT budgets / expectations.

• Specialist Wholesale has added:

• Baxters - auto electrical

• Roadsafe – 4WD & suspension

• MTQ Engine Systems acquisition agreement entered into

 

FY2017 will continue to deliver business and profit growth

• Growth in Trade and Retail

• New stores – circa 40

• Full 12 months trading from former ANA businesses

• Inclusion of full 12 months Bearing Wholesalers, Sprint Auto Parts and Precision Automotive Equipment

• Acquisitions of Baxters, Roadsafe, and MTQ Engine Systems

• Optimisation benefits of between $5M and $7M (as per previous advice)

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
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• Consistent with previous guidance we expect NPAT to increase between 25% to 30% compared to FY2016 (excluding the impact of Hellaby takeover offer).

1

FY2016 Highlights

2 FY2017 1[st] Quarter Update & Outlook

3

Strategy Update / Hellaby Offer

4 Q&A

Hellaby Holdings

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• Total Hellaby revenue in FY2016 was NZ$795M and EBITDA of $47M

• Post acquisition the Resource Services and Footwear divisions would most likely be divested.

• Automotive Group had FY2016 revenue of NZ$260M and EBITDA $27M.

• The Automotive distribution business of BNT and the specialist wholesale businesses fit well with the Bapcor businesses. (refer next slide)

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• The Hellaby acquisition is preferable to alternative strategies to enter the New Zealand market.

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 Automotive and commercial truck replacement parts  54 Branches across NZ

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• Steering and Suspension

• 9 Branches  22 Outlets – Shock Shop

• Diesel fuel injection

• 5 branches (4 Aust, 1 NZ)

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 Auto Electrical Wholesale  NZ Based

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• Batteries

• 8 NZ Locations

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• Batteries

• 3 eastcoast Aust Locations

• Electrical and Rotating Electrical  22 Branch Locations

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• Engine Management

• 5 Aust Locations

 Commercial Tyres  New Zealand

 Commercial Truck and Trailer  New Zealand

TimeLine

• Offer Document issued to shareholders

• Target statement and Independent Expert Report

• OIO decision (if required)

• Offer Closes*

• Offer Completion after satisfaction of conditions

21 October 2016

by 4 November 2016

• 9 December 2016

• 20 December 2016

• by 29 January 2017

• Assumes no extension of offer close date

																					CURRENT STATUS	CURRENT STATUS	CURRENT STATUS	CURRENT STATUS	CURRENT STATUS	CURRENT STATUS	CURRENT STATUS	CURRENT STATUS	CURRENT STATUS	CURRENT STATUS	CURRENT STATUS
	TRADE						Trade focussed “parts professionals” supplying			Target 25% Home									AUS Target 200								152 Stores
							workshops			brands										Stores						10% home brand
	RETAIL						Premium Retailer of Automotive Accessories 4WD & Vehicle Accessories			Target 35% Home brands										Target 120 AUS Target 200 AB Stores						117 AB Stores 67 OL stores (incl SIS) 14% home brand
																				OL Stores
							Supplying the independent parts													Target Over
	INDEPENDENTS						stores via the extensive supply chain													200								235 stores
							capabilities and brand support													Stores
							#1 or #2 Industry Category specialists							in	parts					programs
	SPECIALIST WHOLESALE						Brake Suspension Cooling Engine Bearings Gaskets					Auto New			Electrical Target $200M Turnover 4WD Category													Annualised $160M
	SERVICE					Experts at scheduled car servicing at affordable prices								Strategic Review														143 stores

Thank You

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