BAPCOR LIMITED — Investor Presentation 2016

Apr 18, 2016

==> picture [532 x 62] intentionally omitted <==

Investor Day 19[th] April 2016

==> picture [552 x 320] intentionally omitted <==

==> picture [139 x 42] intentionally omitted <==

==> picture [103 x 33] intentionally omitted <==

==> picture [70 x 24] intentionally omitted <==

==> picture [81 x 26] intentionally omitted <==

==> picture [92 x 17] intentionally omitted <==

==> picture [152 x 46] intentionally omitted <==

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

Disclaimer

==> picture [208 x 29] intentionally omitted <==

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.

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

2

PROGRAM FOR TODAY

	9.30 am	Presentation by Senior Executive
		Tour Burson Trade Warehouse
	11.00 am	Travel by bus
		Visit Burson Trade Heidelberg store
	12.30 pm	Visit ANA Nunawading – tour DC
	1.15 pm	At ANA Nunawading – lunch and Optimisation Projects presentation
	2.45 pm	Visit Autobarn Nunawading, including Opposite Lock
		Drive via Midas Blackburn
	4.00 pm	Return to Preston by 4pm
3	Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

3

AGENDA

==> picture [208 x 29] intentionally omitted <==

==> picture [789 x 348] intentionally omitted <==

----- Start of picture text -----

1 Executive Management Team
2
Strategy
3 Outlook & Proposed New Company Name
----- End of picture text -----

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

Executive Management Team – Burson Group

Chief Executive Officer & Managing Director	Darryl Abotomey
Chief Financial Officer	Greg Fox
Chief Executive Officer - ANA	Paul Dumbrell
• GM – Retail Brands	Peter Tilley
• GM – Operations	Grant Jarrett
• GM – Australian Aftermarket Distributors (AAD)	Gordon Bennett
Executive General Manager – Burson Trade	Craig Magill
• GM – Merchandising & Procurement	Andrew Schram
• GM – Sales & Marketing	Damien Hill
• Human Resources Manager	Peter Ruffy
GM – Strategic Business Development	Mat Cooper

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

==> picture [208 x 29] intentionally omitted <==

==> picture [797 x 371] intentionally omitted <==

----- Start of picture text -----

1 H1 FY2016 Result Highlights
2 Strategy
3
Outlook & Proposed New Company Name
----- End of picture text -----

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

==> picture [842 x 83] intentionally omitted <==

BURSON GROUP STRATEGY

5 year vision

==> picture [588 x 86] intentionally omitted <==

----- Start of picture text -----

Specialist,
Vehicle Parts and Supporting the Excelling in
Knowledgeable
Accessories Industry Customer Service
Staff
----- End of picture text -----

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

15

Key Highlights of the Burson Group

==> picture [184 x 73] intentionally omitted <==

==> picture [592 x 319] intentionally omitted <==

----- Start of picture text -----

The leading Australian owned automotive aftermarket business which spans the supply chain

Market Leader The leading Australian supplier of automotive aftermarket parts, accessories and service

Group distribution platform has significant scale and competitive position – over 600 locations Australia
Scale
wide

Specialist wholesale, trade, retail, independents and service.
• Each core segment has clearly defined, focused strategy and targets.
Core Business
Segments • Knowledgeable experts in each core segment.
• Supported by a comprehensive infrastructure.

Growth Significant opportunity to continue expansion in each core segment.

Resilient Industry Continues to grow in line with population and cars on road
----- End of picture text -----

8

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

Strategic Rationale of Group Structure

==> picture [184 x 73] intentionally omitted <==

Burson Group’s growth strategy covers the core supply chain areas.

==> picture [615 x 271] intentionally omitted <==

----- Start of picture text -----

Parts and
“Trade” Parts
Parts Manufacturer Parts Wholesaler Components End Vehicle Owner
Installer
Distributor
Original Equipment
Vehicle Manufacturer Manufacturer Dealer
Workshops
Specialist
Do-It-For-Me
wholesalers & Trade Distributors Chain Workshops
(DIFM)
Importers
Independent
Parts Manufacturer
Workshops
Do-It-Yourself
Retail Distributors
(DIY)
----- End of picture text -----

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

9

Group Business Structure

==> picture [184 x 73] intentionally omitted <==

==> picture [729 x 356] intentionally omitted <==

----- Start of picture text -----

CURRENT
#1 or #2 Industry Category specialists in parts programs
STATUS
SPECIALIST
Brake Engine +
(Wholesale) Target
Annualised
Suspension Bearings + $200M
Turnover $115M
Cooling Gaskets +
Trade focussed “parts 25% AUS Target 143 Stores
TRADE professionals” supplying Home 200 10% home brand
workshops brands Stores
35% AUS Target AUS Target 113 AB Stores
Premium Retailer of
RETAIL Home 200 120 64 OL stores
Automotive Accessories
brands AB Stores OL Stores (incl SIS)
14% home brand
Service the independent parts stores via the Over
INDEPENDENTS extensive supply chain capabilities and brand 200 235 stores
Stores
support
Currently
Experts at scheduled car servicing at Strategic
SERVICE 140 140 stores
affordable prices Review Stores
----- End of picture text -----

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

10

Group Support Structure

==> picture [184 x 73] intentionally omitted <==

==> picture [422 x 325] intentionally omitted <==

----- Start of picture text -----

World Class, efficient and effective, support functions
Human
Resources
Supply Chain
Business
Systems (IT)
Financial
Services
Business
Support
----- End of picture text -----

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

11

==> picture [842 x 83] intentionally omitted <==

CORE BUSINESS CHANNELS

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

12

Service

==> picture [184 x 73] intentionally omitted <==

Experts at scheduled car servicing at affordable prices

• Core focus on;

• Routine service for vehicles, including logbook service, warranty repairs

• Breakdown repairs

• Currently 140 stores – predominately franchised.

• Aus has in excess of 30,000 workshops

• Midas has strategic partnership with Virgin Velocity & Red Bull Racing Australia

• Trial Opposite Lock store within-store underway

Strategic Review to be undertaken as to potential for business and best focus

==> picture [217 x 145] intentionally omitted <==

==> picture [218 x 134] intentionally omitted <==

==> picture [84 x 50] intentionally omitted <==

==> picture [92 x 30] intentionally omitted <==

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

13

Trade - Burson Auto Parts

Australia’s leading trade focused automotive aftermarket parts distributor

• Core focus on distribution of auto parts to independent and chain mechanic workshops throughout Australia for routine servicing of vehicles, and do-ityourself vehicle owners;

• Supply routine service such as filters, brake pads, oil, spark plugs

• Supply breakdown parts – water pumps, starter motors, alternators

• Distributes over 500,000 stock keeping units from in excess of 1,000 suppliers to 30,000 customers via 143 stores nationally with 1,500 knowledgeable employees and over 700 delivery vehicles.

• Operates an extensive distribution network – unique scale of inventory range and extensive distribution network is difficult to replicate

• Complete range of workshop equipment to fit out and maintain a workshop.

• Alliance program to support independent workshops to grow their business.

==> picture [142 x 27] intentionally omitted <==

==> picture [184 x 73] intentionally omitted <==

==> picture [232 x 150] intentionally omitted <==

----- Start of picture text -----

Target
200
Stores
by
Current
2021
143
Stores
----- End of picture text -----

==> picture [207 x 149] intentionally omitted <==

14

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

Specialist Wholesale

==> picture [184 x 73] intentionally omitted <==

• Category expertise – being the most knowledgeable in the category.

• 1 or #2 in the category.

• Sources and imports own branded, extensive range of products, supported by locally sourced premium brands.

• Predominately “own brands”

• Supply to the entire industry

• Also sells complementary products

==> picture [232 x 150] intentionally omitted <==

----- Start of picture text -----

Target
$200M
Turnover
Current
$115M
(annualised)
Turnover
----- End of picture text -----

==> picture [325 x 156] intentionally omitted <==

----- Start of picture text -----

Brake – hydraulics,
Suspension +
Friction, Rotors
Bearings Gaskets +
Engine Cooling +
----- End of picture text -----

==> picture [86 x 33] intentionally omitted <==

==> picture [104 x 33] intentionally omitted <==

==> picture [105 x 37] intentionally omitted <==

==> picture [107 x 25] intentionally omitted <==

==> picture [210 x 33] intentionally omitted <==

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

15

Retail - Autobarn

==> picture [184 x 73] intentionally omitted <==

Australia’s premium full service retail accessories store

• Positioned as the first choice destination for both the everyday consumer and the automotive enthusiast.

• Every store has fitment capabilities to make shopping and installing parts easier

• Knowledgeable and experienced staff in every store differentiating it from the competition

==> picture [232 x 150] intentionally omitted <==

----- Start of picture text -----

AUS
Target
200
Stores
Current
113
Stores
----- End of picture text -----

• Full service offer;

• Network Development

• Product Management

• POS/Computer Management

• Marketing

• Learning and Development / Training

• Store Financials / Insights

• Operational support via Retail Field Team

• Mix of franchised and company owned

==> picture [102 x 46] intentionally omitted <==

==> picture [206 x 154] intentionally omitted <==

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

16

Retail - Opposite Lock

==> picture [184 x 73] intentionally omitted <==

Australia’s widest range of 4WD accessories

• Specialist 4x4 automotive part and accessory stores

• Extensive private label bar work program, designed and engineered by local team. Range includes: bullbars, sidesteps, side rails and rear bars

• Newly developed private label suspension program

• Integrated supply chain distributing from Melbourne, Brisbane, Perth, Sydney and Townsville.

• Export customers in New Zealand, South Africa, Saudi Arabia, Philippines, Mongolia, Dubai, UAE, with further extension possible

• Franchised network

• Currently 64 stores - 54 stores, 10 store in-store (Autobarn and Midas) and some stockists

==> picture [97 x 55] intentionally omitted <==

==> picture [232 x 150] intentionally omitted <==

----- Start of picture text -----

AUS
Target
120
Stores &
Stockists
Current
64
Stores
----- End of picture text -----

==> picture [234 x 176] intentionally omitted <==

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

17

Independents

==> picture [184 x 73] intentionally omitted <==

Servicing the broader independent sector

• Core focus on;

• Full merchandise range supply to independents and dealers

==> picture [162 x 92] intentionally omitted <==

----- Start of picture text -----

Currently Supplying
235
Stores
----- End of picture text -----

• Retail and Trade mix

• Catalogue and advertising support

• No frills, low cost structure, pay for service

==> picture [144 x 60] intentionally omitted <==

==> picture [163 x 51] intentionally omitted <==

==> picture [146 x 48] intentionally omitted <==

==> picture [234 x 176] intentionally omitted <==

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

18

==> picture [208 x 29] intentionally omitted <==

1 Executive Management Team 2 Strategy

3 Outlook & Proposed New Company Name

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

FY2016 H1 Result Highlights

==> picture [208 x 29] intentionally omitted <==

$ million	H1 FY2016	H1 FY2015	Variance
Revenue	322.2	185.0	74.1%
Gross Margin %(1) EBITDA	44.0% 34.5	43.2% 19.8	0.8 74.1%
						~~Strong~~ ~~performance~~
NPAT EPS(2) (cps)	19.3 7.97	10.9 6.41	77.9% 24.3%			~~in all areas~~
Interim dividend (cps)	5.0	4.0	25.0%

• Strong result underpinned by continued steady growth in Burson Trade, and ANA performing well. Both businesses are ahead of expectation.

• Results include 5 months ANA trading which was acquired on 31 July 2015.

• Total company EPS growth ahead of ANA acquisition business case.

Note:

1. Gross margin presented consistently with historical presentation and excludes freight expense. Statutory accounts gross margin includes freight expense

2. H1FY2016 and H1FY2015 EPS is based on the TERP adjusted weighted number of shares on issue during the year as per accounting standard AASB -133. EPS calculated on “pre TERP adjusted” weighted average shares is 7.98 CPS H1FY2016 and 6.64 CPS H1FY2015, a 20.2% increase.

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

20

Outlook

==> picture [208 x 29] intentionally omitted <==

• 3[rd] quarter FY16 has continued strongly – same store sales – BT 4.5%. AB 4.0%

•  Burson Trade to maintain steady growth. Continue to add new stores and the benefit of the improved margins offset by competitive pricing

•  ANA to continue to track in line with expectations during H2 FY2016. Warehouse sales strong, AAD impacted by currency.

•  Optimisation Projects progressing well – main benefits begin flowing in FY2017.

•  Completed the acquisitions of Precision Equipment and Bearing Wholesalers.   Acquiring Sprint Auto Parts South Australia – 40 franchisees, dealers and company stores. Further acquisitions anticipated.

•  Expecting full year NPAT in the range of $41.5M to $43.0M.  Full year FY2016 NPAT guidance would result in proforma EPS between 17.04 cps and 17.66 cps representing annual EPS growth of between 24.5% and 29.0%.

21

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

Proposed New Group Name

• To recognise the evolution of the Group

• Remove confusion and conflict around the tradition business of Burson Trade and the Group

• It is proposed to rename the Group to:

22

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

Proposed New Group Name

• To recognise the evolution of the Group

• Remove confusion and conflict around the tradition business of Burson Trade and the Group

• It is proposed to rename the Group to:

==> picture [560 x 205] intentionally omitted <==

• Will now proceed through the process including obtaining shareholder approval via a General Meeting.

23

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services

==> picture [208 x 29] intentionally omitted <==

Thank You

24

Australasia’s Leading Provider of Aftermarket Parts, Accessories and Services