BAPCOR LIMITED — Interim / Quarterly Report 2017

Feb 15, 2017

H1 FY2017 Results Presentation

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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.

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3 4 5 6

H1 FY2017 Results Highlights H1 FY2017 Result Details Hellaby Update Strategy Update FY2017 Outlook Q&A

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1

H1 FY2017 Result Highlights

2 H1 FY2017 Result Details 3 Hellaby Update 4 Strategy Update 5 FY2017 Outlook 6 Q&A

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$ million	H1 FY2017 (3)	H1 FY2016	Variance
Revenue	435.1	324.4	34.1%
Gross Margin %(1)	45.0%	43.5%	1.5pp
EBITDA – pro-forma	49.2	34.5	42.5%
NPAT – pro-forma(2)	27.8	19.3	44.0%
NPAT – statutory	25.3	19.3	30.7%
EPS(3) (cps) – pro-forma	10.64	7.98	33.4%
EPS(3) (cps) – statutory	9.66	7.97	21.2%
Interim dividend (cps)	5.5	5.0	10.0%

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• Very pleasing result with proforma EPS growth of 33.4%

• H1 FY2017 result reflects full 6 months of ANA acquisition versus 5 months in H1 FY2016, plus the benefit of optimisation projects

• All business segments delivered strong results

• Acquisitions in FY2016 and H1 FY2017 are progressing smoothly and at least to business plan

• Pro-forma EBITDA and NPAT excludes the after tax effect of Hellaby transaction costs and the benefit to finance costs due to capital raised. Pro-forma EPS is based on proforma NPAT but includes shares issued as part of the capital raising Notes:

• for the Hellaby acquisition. 1 . Gross margin presented in line with statutory presentation. H1 FY2016 includes a reclassification of freight recoveries and expense.

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

  2. H1 FY2017 proforma NPAT excludes acquisition costs of $3.5M and includes interest / tax adjustments of ($1.0M) all related to the Hellaby acquisition

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Revenue EBITDA * EBITDA margin
11.3%
685.6 77.0 11.1% 11.2%
10.5%
361.3 42.5
9.9%
435.1 49.2
306.3 341.6 375.3 324.4 30.2 36.0 41.5 34.5
FY2013 FY2014 FY2015 FY2016 1H FY2017 FY2013 FY2014 FY2015 FY2016 1H FY2017 FY2013 FY2014 FY2015 FY2016 1H FY2017
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NPAT * EPS growth * Dividends per share
43.6 33.4%
31.0%
6.0
24.3
19.1% 4.7 Final
Interim
27.8
19.3 23.1 19.3 5.0 5.5
16.0 4.0
FY2013 FY2014 FY2015 FY2016 1H FY2017 FY2015 FY2016 1H FY2017 FY2015 FY2016 FY2017
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• Based on proforma results where appropriate

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	Revenue	EBITDA	EBITDA % Revenue
	H1 FY2017 H1 FY2016 % Change	H1 FY2017 H1 FY2016 % Change	H1 FY2017 H1 FY2016 pp Change
Trade	230.4 202.9 13.6%	30.9 23.4 32.0%	13.4% 11.5% 1.9pp
Retail	117.8 82.5 42.9%	15.0 10.6 42.5%	12.8% 12.8% 0.0pp
Specialist Wholesale	97.3 43.2 125.3%	10.6 4.3 144.8%	10.9% 10.0% 0.9pp
Unallocated / Head Office	(10.4) (4.2) (150.6%)	(7.0) (3.6) (95.1%)	67.1% 86.1% (19.1)pp
Segment Total	435.1 324.4 34.1%	49.5 34.7 42.7%	11.4% 10.7% 0.7pp
Normal acquisition costs		(0.3) (0.2) (94.9%)
Total	435.1 324.4 34.1%	49.2 34.5 42.5%	11.3% 10.6% 0.7pp

• All trading Business segments performed very well

• Burson Trade in particular outstanding result

• ANA solid result and excludes July 2015 (not part of Bapcor)

• Group EBITDA includes H1 FY2017 v H1 FY2016 incremental impact of intercompany purchases profit in stock eliminations of $1.1M. Total expensed in H1 FY2017 is $1.8M

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• 156 stores at the end December 2016, up 11 from June 2016 and 20 since December 2015.

• Revenue up 13.6%

• Same store sales growth >5.0%

• EBITDA up 32.0% and EBITDA % up 1.9 percentage points (GM% and CODB% improvements) – includes benefits of optimisation projects

• Acquisition of Precision Automotive April 2016 going well

• 8 stores in WA have solid sales but operating in very competitive environment

• Main national competitor growing its dedicated trade network

• Customer loyalty program “Alliance” has made good progress

• People development has been and will continue to be a key priority

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Store numbers
156
145
130
116
105
100
FY2012 FY2013 FY2014 FY2015 FY2016 1H FY2017
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Gross Profit margin
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46.0%
45.1%
43.7%
43.0%
42.2%
39.4%
FY2012 FY2013 FY2014 FY2015 FY2016 1H FY2017
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Revenue and "Same Store" growth
419.1
375.3
341.6 > 5%
306.3
284.3
4.6% 4.6%
230.4
3.9%
2.1%
1.4%
FY2012 FY2013 FY2014 FY2015 FY2016 1H FY2017
$M Same Store growth %
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EBITDA margin

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13.4%
12.4%
11.8%
10.5%
9.9%
8.0%
FY2012 FY2013 FY2014 FY2015 FY2016 1H FY2017
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• Total Autobarn stores up 5 since June 2016 to 119. Company owned stores up by 8 to 23 (includes 3 store buy-backs), consistent with strategy to grow the total number of stores.

• Revenue up 42.9%, includes Sprints and an additional month of ANA businesses (July 2016) compared to H1 FY2016

• Autobarn same store growth for H1 FY2016 was 2.8%.

• EBITDA up 42.5% to $15.0M

• Retail EBITDA margin of 12.8% consistent with previous year

• Competition has been very aggressive with price discounting and promotional activity

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• Specialist Wholesale has grown significantly with the purchase of;

• Bearing Wholesalers (acquired March 2016)

• Roadsafe (acquired August 2016)

• Baxters (acquired August 2016)

• MTQ (acquired November 2016)

• Annual revenue run rate now in excess of $230M

• Good progress in growing level of “home brand” intercompany sales

• Some sales loss due to customers being competitors to Bapcor business

• Total EBITDA up 144.8% and EBITDA % to sales up 0.9 percentage points

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1 H1 FY2017 Result Highlights 2 H1 FY2017 Result Details 3 Hellaby Update 4 Strategy Update 5 FY2017 Outlook 6 Q&A

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• Revenue growth of 34.1% delivered by

		Trade up	13.6%
		Retail up	42.9%
		Specialist Wholesale up	125.3%
	Same Store sales growth

• Burson Trade >5%

• Autobarn 2.8%

• Gross margin % up 1.5 percentage points

• Reflects the benefits of the optimisation projects

• Trade up 1.0pp compared to H1 FY2016 and consistent with H2 FY2016. Retail margins up due to optimisation program and conversion of company owned service workshops to franchise. GM% in Specialist Wholesale up 4.0pp due to business mix and improved margins at AAD.

• GM% is a continuous focus across all segments

• CODB as a % of sales up 0.9 percentage points  Increase in CODB mainly reflects change in business mix, and the higher number of corporate owned retail stores.

• Includes additional corporate management costs consistent with larger business, and elimination of intercompany sales and profit in stock.

• Trade CODB% down 0.9% due to the prior year including additional costs related to WA start-ups and costs related to Brisbane DC

• Proforma NPAT up 44.0%  EPS up 33.4%

	Pro forma, $ million	H1 FY2017	H1 FY2016	Change
	Revenue	435.1	324.4	34.1%
	Gross Profit	195.7	141.0	38.8%
	Margin (%)	45.0%	43.5%	1.5pp
	CODB	(146.6)	(106.5)	37.6%
	CODB (%)	(33.7%)	(32.8%)	(0.9)pp
	EBITDA	49.2	34.5	42.5%
	EBITDA (%)	11.3%	10.6%	0.7pp
	Depreciation and Amortisation	(6.0)	(4.9)	23.5%
	EBIT	43.2	29.6	45.6%
	Finance Costs	(3.4)	(1.9)	85.0%
	Profit Before Tax	39.7	27.8	43.0%
	Income Tax Expense	(11.9)	(8.5)	40.5%
	NPAT	27.8	19.3	44.0%
	NPAT (%)	6.4%	6.0%	0.4pp
	EPS(1) (CPS)	10.64	7.98	33.4%
	Acquisition costs / adjustments	(2.6)	-	(100.0%)
	NPAT - statutory	25.3	19.3	30.7%

Notes:

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

2. Allocation of freight expense included in CODB as per proforma accounts rather than COGS

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 Working capital

• Working capital favourable excluding acquisitions due to improved trade debtors and trade creditor days.

• Total H1 FY2017 working capital represents 13.0% of annualised revenue compared to 13.5% June 16

• Capex and Acquisitions

• Capex mainly reflects investment in new stores, purchase of motor vehicles, IT development and front of store refurbs

• Other business acquisitions includes Baxters, Roadsafe and MTQ

 Net cash generated (before Hellaby transaction)

• Tax paid includes an amount of $5.3M relating to the FY2016 financial year

• Excluding acquisitions of businesses of $29.4M, cash generation was positive after payment of dividends.

 Hellaby transaction

• Cashflow includes proceeds related to capital raising for Hellaby acquisition less transaction costs paid.

$ million	H1 FY2017
Cash flows excluding Hellaby associated cash flows
EBITDA	45.6
Change in working capital	5.3
Capital expenditure (excluding new stores)	(5.2)
Operating Cash Flow	45.7
Store acquisition andgreenfields (1)	(13.5)
Business acquisitions	(29.4)
Financingcosts Tax Paid	(2.3) (15.2)
Dividend paid Other	(14.8) 0.7
Cash generated excluding Hellaby acquisition cash flows	(28.8)

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Hellaby associated cash flows
Capital raising 181.3
Transaction costs paid (6.2)
Net cash inflow from Hellaby transaction 175.1
Opening cash on hand 22.4
Cash acquired 0.8
Borrowing repayments (134.0)
Net cash movement 146.3
Closing cash on hand 35.5
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 Net Debt/Cash

• Net debt at June 2016 is positive $20.7M[(1)] .

• Excluding equity raising and Hellaby transaction costs, net debt would be $158.8M

• Represents annualised leverage ratio of 1.6X on an annualised FY17 EBITDA basis

 Dividends

• Interim dividend declared for FY2017 of 5.5 cents per share fully franked, up 10%. This represents 60.5% of statutory NPAT.

• Record date 17 March 2017

• Pay date 21 April 2017

• Dividend reinvestment plan to be implemented effective for the FY2017 interim dividend

• 1.5% discount to 10 day trading VWAP commencing 27 March 2017

Notes:

$ million	Dec 2016	Jun 2016
Cash	35.5	22.4
Trade and Other Receivables	100.7	87.8
Inventories	194.4	163.0
PP&E	43.0	36.2
Deferred Tax Assets	25.9	20.6
Intangible Assets	381.2	348.9
Other Assets	4.3	4.5
Total Assets	785.0	683.4
Trade and Other Payables	139.6	121.5
Tax Liabilities	4.0	6.2
Provisions	69.2	39.5
Borrowings	14.2	148.2
Other	0.6	1.8
Total Liabilities	227.6	317.2
Net Assets	557.4	366.2

1. Net debt adds back $0.6M of prepaid borrowing fees which is included in the Borrowings amount.

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1 H1 FY2017 Result Highlights 2 H1 FY2017 Result Details 3 Hellaby Update 4 Strategy Update 5 FY2017 Outlook 6 Q&A

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Automotive

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Resource Services

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Footwear

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2016
27 September	Bapcor announces takeover offer for Hellaby
2017
13 January	Offer Unconditional
23 January	Bapcor nominated Directors appointed to Hellaby Board
31 January	Passed 90% shareholding
7 February	Offers closes at 95.5% of shares
8 February	Compulsory acquisition of remaining shares commences
8 March 24 January to 1 February	100% ownership. Delisting from NZX Transition commences – meeting with Hellaby Management
7-8 February	Business Plan Reviews – internal communications
14 February	Organisation changes – business segments report to Bapcor CEO
16 February to end of June	Transition continues including development of optimisation program

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Board
CEO
Business
Support
Segments
Burson Trade
EGM Finance Human Strategic
Resources Development
CFO
EGM EGM
Retail
Business
EGM
Legal Systems
(IT)
Specialist
Wholesale
COO
Warehouse &
Distribution
EGM
Hellaby Auto
EGM
Resource
Services Group
EGM
Footwear
EGM
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$NZD million	Actual	Hellaby Guidance provided Dec 16
Sales	$385.8m	$383m to $388m
EBITDA	$20.6m	$18m to $19m
EBIT	$12.5m	$10m to $11m
NPAT(1)	$39.9m	$38.5m to $39.5m

$NZD million	Sales	EBITDA	EBIT
Automotive	$145.6m	$14.1	$12.8m
Resource Services	$124.2m	$6.4m	$1.4m
Footwear(2)	$63.6m	$0.6m	($0.7)m
Equipment	$53.0m	$2.4m	$2.0m
Elims/Head Office	($0.6)m	$(2.8)m	($3.0)m

Notes:

1. Includes gain of $34M on sale of equipment

2. Includes restructuring costs of $2.7m

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A$ million

million
Revenue EBITDA NPAT** # shares pre capital raising # shares post capital raising EPS EPS % Increase	Bapcor H1FY2017 Indicative FY17 Bapcor 435.1 880.0 49.2 101.0 27.8 57.0 246.3 23.1 29.6%	HellabyEstimated Annualised Proforma FY2017*
		Hellaby Auto Hellaby HO Subtotal Automotive Hellaby RS and F'Ware Total
		290.0 1,170.0 395.0 1,565.0 30.0 (3.0) 128.0 27.0 155.0 72.0 78.0 277.6 25.9 12.1%

ROI on Hellaby Investment exceeds Bapcor WACC

• Hellaby at 100% ownership had it been held for 12 months.

** Bapcor FY17 Annualised NPAT excluding Hellaby represents low end of guidance range of $57M to $59M

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A$ million

Funding Requirement Equity Purchase Price Net Debt Transaction Costs Total Sources of Funds Bapcor Equity Raising Acquisition Bridge / Other facilities Total Net Debt EBITDA Forecast leverage ratio	334 72 13 419 181 238 419 400 156 2.6X Includes Hellaby Auto, Footwear and Resource Services

Estimated Hellaby Transaction Costs FY2017 H1 H2 Total Expense 3.5 5.0 8.5 Equity 4.3 0.2 4.5 Total 7.8 5.2 13.0	Estimated Hellaby Transaction Costs FY2017 H1 H2 Total Expense 3.5 5.0 8.5 Equity 4.3 0.2 4.5 Total 7.8 5.2 13.0
Expense Equity Total
	H1 H2 Total
	3.5 5.0 8.5 4.3 0.2 4.5
	7.8 5.2 13.0

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1 H1 FY2017 Result Highlights 2 H1 FY2017 Result Details 3 Hellaby Update 4 Strategy Update 5 FY2017Outlook 6 Q&A

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TRADE		Trade focussed “parts professionals” supplying workshops	Trade focussed “parts professionals” supplying workshops			Target 25% Own brands		AUS Target 200 Stores 156	AUS Target 200 Stores 156		NZ Target TBD Stores 54	NZ Target TBD Stores 54
RETAIL Premium Retailer of Automotive Accessories AUS Target 120 OL Stores . Target 35% Own brands AUS Target 200 AB Stores . 4WD & Vehicle Accessories NZ Target TBD OL Stores . NZ Target TBD Retail 119 84 1
INDEPENDENTS		Supplying the independent parts stores						Target Over 200 Stores			NZ Target TBD
SPECIALIST WHOLESALE #1 or #2 Industry Category specialists in parts programs AUS Target A$500M Turnover NZ Target TBD Turnover $A 315 $NZ 58
SERVICE			Experts at scheduled car servicing at affordable prices					AUS Target TBD 139			NZ Target
									139		TBD	26
RSG			Specialist international services					Strategic Review
FOOTWARE			NZ Largest footwear retail group					Strategic Review

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• Bapcor views the vehicle market with distinct segmentation

• Expansion and growth is targeted in the green segments which Bapcor either today participates in or has plans to participate in

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• Global Car / Euro Car – have been separated recognising the Aust market as it exists for parts today

• Industry / Heavy – intended to capture non motor vehicle commercial combustion application

• Small Truck – up to 10T

• Commercial Heavy – Truck and trailer over 10T

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• Core areas of Retail, Trade, and Specialist remain the key focus. There continues to be a strong growth pipeline in each of these sectors based upon our current market offers and distribution footprint.

• Further segments are separated where either as a result of the customer or application there are unique considerations. To be competitive in

these segments requires a specific focus

• Industrial

• Mining

• Defence

• Marine

• Government / Fleet

• Workshop Equipment

• Bapcor businesses participate in these sectors to varying degrees and expect to extend that participation

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• Bapcor is vertically integrated through our specialist supply chain, optimising distribution channels

• Further opportunities for optimization of these supply channels moving forward with a number of categories capable to expansion (eg. Electrical application)

Wholesale Specialists

Consumer Markets

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Supplies
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1 H1 FY2017 Result Highlights 2 H1 FY2017 Result Details 3 Hellaby Update 4 Strategy Update 5 FY2017 Outlook 6 Q&A

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• FY2017 will continue to deliver business and profit growth

• Continued underlying growth in Trade and Retail

• Store rollouts

• Margin focus, including benefits of the optimisation program

• Acquisitions of Baxters, Roadsafe and MTQ

The Bapcor Business FY17 full year NPAT excluding the acquisition of Hellaby and related transaction costs is expected to be in the range of $57M to $59M. (previous guidance $54.5M to $56.7M).

• The inclusion of the three Hellaby businesses of Auto, Footwear and Resource Services is estimated to increase NPAT in H2 FY2017 by a further $8M to $12M before transaction costs and significant items

• FY2017 EPS including Hellaby is estimated to increase by at least 35%

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Thank You

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Proforma NPAT reconciliation

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