BAPCOR LIMITED — Interim / Quarterly Report 2015

Feb 10, 2015

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• Results Presentation - H1 FY2015

(6 months to December 2014)

12[th] February 2014

BURSON H1 FY2015 RESULTS PRESENTATION

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 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 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 H1 FY2015 RESULTS PRESENTATION

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Agenda

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H1 FY2015 Result Highlights, Outlook & Strategy Recap H1 FY2015 Result Details Q&A

BURSON H1 FY2015 RESULTS PRESENTATION

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H1 FY2015 Result Highlights, Outlook & Strategy Recap

2 H1 FY2015 Result Details

3 Q&A

BURSON H1 FY2015 RESULTS PRESENTATION

H1 FY2015 Results vs H1 FY2014 Proforma

$ million	H1 FY2015 Actual	H1 FY2014 Proforma	Variance
Revenue	185.0	168.7	9.7%
Gross Margin %(1)	43.2%	43.2%	-
EBITDA	19.8	17.7	11.9%
NPAT	10.9	9.5	14.3%
EPS(2)(CPS)	6.64	5.81	14.3%

• Record result as Burson continues to deliver steady growth.

• NPAT represents 49.8% of full year prospectus forecast. H1 FY2014 was 49.0% of FY2014 full year.

• Resilience of automotive aftermarket parts distribution allows Burson to operate with predictable growth and financial results.

Note:

1. Per management accounts presentation. Statutory accounts GM% includes freight expense from DC to store

2. Assumes 163.6 million shares on issue for the full year

BURSON H1 FY2015 RESULTS PRESENTATION

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Financial Highlights – H1 FY2015

Comparisons are to H1 FY2014

•  121 stores

•  Same Store Sales growth of 4.3%

• •  Revenue $185 million – up 9.7%

•  Gross margin 43.2% - steady - constrained by competitor activity

• •  EBITDA margin 10.7% – up 0.2% •  NPAT $10.9 million – up 14.3%

•  Earnings per share – up 14.3%

• Dividend declared 4.0 cps

•  Net debt = $56M

• Debt Leverage Ratio down from 1.75X to 1.47X

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Operational & Strategic Highlights in H1 FY2015

  Continued store expansion, 5 stores since June to 121

• 4 acquisitions QLD (2) and NSW (2)

• 1 Greenfield in NSW

  Supplier price increases passed through to customers . Majority of increases H2 FY2015

  Additional cost recovery price increase implemented in January 2015 Gross Margin impacted by competitor activity

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   

• WA expansion options being pursued. Expect to have stores in Perth during H2 FY2015 Brisbane DC lease has been entered into and will be operational by end FY2015

• Front-of-store enhancement program to grow walk in sales in progress; - 17 performed to date

• 32 will be completed by June 2015

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Store Enhancement Program

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BEFORE

AFTER

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BURSON H1 FY2015 RESULTS PRESENTATION

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Strategy and Outlook

Expand store network

• On track to exceed FY2015 prospectus forecast of 124 stores. Since 30 June 2014 have added 1 greenfield in NSW and integrated acquisitions in NSW (2) and Qld (2) taking store network to 121.

• Continuing to work on a range of acquisition and greenfield developments opportunities across Australia including Vic, NSW, ACT, Qld and WA.

• Establish Brisbane DC to support Qld & Northern NSW

• 175 store target by 2019

Increase existing store revenue

• Benefit from resilient demand for automotive aftermarket parts distribution

• Maintain high level of customer service through continued development of people and systems

• Focused on sales from electronic and online platforms, increase “walk-in” store sales, chain workshop sales and inventory range

• Supplier terms, proportion of parts distributed with Burson’s own brands, and developing direct

• Increase existing sourcing relationships

• store earnings

Trading in FY2015 continues to be strong and Burson is confident that its FY2015 NPAT will be consistent with its 2014 prospectus.

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• 1 FY2014 Result Highlights, Outlook & Strategy Recap

2

FY2014 Result Details

• 3 Q&A

BURSON H1 FY2015 RESULTS PRESENTATION

Summary Income Statement

• Revenue growth of 9.7% delivered by

• Same Store Sales growth of 4.3%

• Impact of FY2014 new stores 3.9%

• Impact of H1 FY2015 new stores 1.5%

 Gross margin % growth constrained

• GM% steady compared to H1 FY2014 due to competition

• 2015 price increases may assist GM% growth

• CODB as a % of sales down 0.2%

• Some scale efficiencies as top line grows

• Brisbane DC start up in H2

• Depreciation as a % of sales up 0.1%

• Reflects FY2014 investment made in IT systems store refurbishments and relocations

• NPAT up 14.3%

• EPS up 14.3%

• H1 FY2014 proforma to Statutory are only for public company costs and financing structure.

	Pro forma, $ million Revenue	H1 FY2015 185.0	H1 FY2014 Proforma 168.7	Change 9.7%	H1 2014 Statutory 168.7
	Gross Profit	79.9	72.8	9.7%	72.8
	Margin (%)	43.2%	43.2%		43.2%
	CODB	(60.1)	(55.1)	9.0%	(54.6)
	Margin (%)	(32.5%)	(32.7%)		(32.4%)
	EBITDA Margin (%)	19.8 10.7%	17.7 10.5%	11.9%	18.2 10.8%
	Depreciation and Amortisation	(2.5)	(2.1)	18.2%	(2.1)
	EBIT Finance Costs	17.3 (1.8)	15.6 (1.9)	11.1% 4.4%	16.1 (13.4)
	Profit Before Tax	15.5	13.7	13.2%	2.7
	Income Tax Expense	(4.0)	(4.2)	10.8%	(0.8)
	NPAT	10.9	9.5	14.3%	1.9
	Margin (%)	5.9%	5.6%		1.1%
	EPS(1) (CPS)	6.64	5.81	14.3%	1.16

Notes:

1. Assumes 163.6 million shares on issue for the full year

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Traditional H1 / H2 NPAT Split

	H1	H2	Full Year	% H1
FY2013 - proforma	7.2	8.8	16.0	45.0%
FY2014 - proforma	9.5	9.9	19.4	49.0%
FY2015*	10.9	11.0	21.9	49.8%

• Burson’s H1 FY2015 NPAT split is slightly ahead of the H1 FY2014 proforma NPAT split and well above H1 FY2013 split. This provides confidence in the full year prospectus forecast after taking account of costs associated with the start up of Brisbane DC and Greenfield store developments.

• H1 FY2015 actual, full year based on FY2015 prospectus forecast

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Summary of Key Performance Indicators

Store Numbers

Store expansion continues – ahead of prospectus forecast and well positioned to meet or exceed 2015 forecast

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121
116
105
100
FY2012 FY2013 FY2014 H1 FY2015
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Revenue and “Same Store Sales” growth

Store expansion together with strong same store sales growth driving revenue growth

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341.6
306.3
284.3
4.3%
3.9%
2.1%
1.4%
FY2012 FY2013 FY2014 H1 FY2015
Revenue ($ million) Like for like growth %
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Gross Profit Margin

Continued improvement reflecting margin improvement initiatives

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43.0% 43.2%
42.2%
39.4%
FY2012 FY2013 FY2014 H1 FY2015
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EBITDA Margin

Outcome of growth and improvement initiatives

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10.5% 10.7%
9.9%
8.0%
FY2012 FY2013 FY2014 H1FY2015
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Summary Cash Flows

 Working capital

• Working capital approx. 11% of sales

• Continuation of inventory investment at store level

• Trade debtors collection strong

• Trade creditor days 90+

 Capex and Acquisitions

• Capex in H1 FY2015 includes front of store upgrades, store refurbishments, motor vehicle purchases and IT investment

• Capex lower than H1 FY2014 due to nature of store relocations and IT projects in H1 2014

Pro forma, $ million	H1 FY2015 Actual	H1 FY2014 Proforma
EBITDA	19.8	17.7
Change in working capital	(3.5)	0.8
Operating free cash flow	16.3	18.5
Capital expenditure excluding new stores	(2.3)	(4.2)
Business acquisitions and greenfield stores(1)	(3.9)	(7.2)
Net free cashflow (before financing, tax and dividends)	10.1	7.1
Cash conversion	51.0%	40.1%

• New stores spend in H1 FY2015 represents 5 new stores. H1 FY2014 included 11 new stores and 2 store mergers.

• Acquisitions and Greenfield stores include inventory

Note:

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Summary Balance Sheet

 Net Debt

• Closing net debt of $56.1 million*, down $7.0 million since June 2014

• Leverage 1.47x LTM proforma EBITDA

• Current undrawn banking facilities of $55 million that can be used to fund acquisitions

 Dividends

• As per prospectus, no final dividend in respect of FY2014

• Interim dividend declared for H1 FY2015  Fully franked 4 cents

• Record date 19 March 2015

• Pay date 9 April 2015

• Full year dividend target ratio 65% of NPAT

• Confidence in full year forecast has resulted in slightly higher proportion of full year dividend being paid as an interim dividend.

$ million	Statutory Dec 2014	Statutory June 2014
Cash	8.9	10.9
Trade and Other Receivables	30.2	32.4
Inventories	73.6	69.1
PP&E	19.7	19.4
Deferred Tax Assets	10.6	10.8
Intangible Assets	99.4	97.4
Other Assets	0.3	0.3
Total Assets	130.0	240.3
Trade and Other Payables	53.6	57.4
Tax Liabilities	3.1	0.1
Provisions	13.5	12.5
Borrowings	64.5	73.3
Total Liabilities	134.7	143.3
Net Assets	108.0	97.0

• Excludes capitalized borrowing costs

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FY2014 Result Highlights, Outlook 1 1 FY2014 Result Highlights & Strategy Recap 2 FY2014 Result Details

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Q&A

BURSON H1 FY2015 RESULTS PRESENTATION

Questions?

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