BAPCOR LIMITED — Investor Presentation 2017

Jul 25, 2017

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Bapcor Limited

(ASX: BAP)

ASX Release

26[th ] July 2017

Bapcor Acquisition of Hellaby – Optimisation Benefits Presentation

Attached is a document that will be presented at the Bapcor investor briefing on 26 July 2017 at 10.30am as previously announced.

Ends

For further information, please contact:

Darryl Abotomey Gregory Fox Managing Director and CEO Chief Financial Officer and Company Secretary +61 419 838 059 +61 417 562 891 +61 3 9914 5555 +61 3 9914 5555

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Investor Conference Call Presentation. Acquisition of Hellaby Holdings – Optimisation Program 10.30 am, 26th July 2017

Disclaimer

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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Contents of Presentation

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Hellaby Holdings Head Office Costs

Bapcor Optimisation Program – synergy benefits

Note: all numbers are AUD

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Hellaby Holdings Head Office Costs

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Bapcor Optimisation Program – synergy benefits

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Hellaby Holdings Group Office Costs

• Hellaby Holding Ltd group office costs were approx. $6m to $7m per year

• Over the last six months as Bapcor has transitioned Hellaby businesses into the Bapcor group. The head office costs have been progressively reduced.

• The Hellaby group office staff have been very co-operative in the transition.

• By October 2017, the costs will have been reduced to retained costs of approx. $1.5m pa

• Of the $1.5m, $1m are considered ongoing, with the head office building subject to potential subleasing or cancellation of lease (runs to March 2021).

• This reduction in costs is separate to the optimisation benefits that Bapcor expect to achieve as detailed in the rest of this presentation .

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Hellaby Holdings Head Office Costs

Bapcor Optimisation Program – synergy benefits

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Optimisation Program Process

• In assessing major acquisition opportunities, Bapcor has traditionally not assessed any material amounts of synergies into the returns to justify the acquisition.

Announcements of expected returns in acquisitions exclude any material synergy benefits.

• Since acquiring Hellaby Holdings in January 2017, management has been transitioning the Hellaby businesses into Bapcor group. This includes understanding the business and looking at opportunities to optimise the new Bapcor group.

• Late April all automotive business units managers (~45) met to discuss optimisation opportunities. This was an amazingly powerful and motivating session.

• Around 75 opportunities were identified across the group (the majority emanating from the Hellaby acquisition)

• These have been consolidated down to nine categories.

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Optimisation Program Process (continued)

• Each project has been allocated to be led by one of the Group Leadership Team (“GLT”).

• Business units are now working through delivering each project

• Some projects are reasonably straightforward

• Some projects will be implemented over a number of years.

• Benefits over the next three years have been estimated.

• Not all projects have financial outcomes that can be quantified.

• Each project has a specific goal, deliverable and timeframe.

• Each month the progress of the projects are reviewed by the GLT and Board.

• The projects do not include warehouse consolidation opportunities – these are being reviewed separately.

• Excludes reduction in Hellaby head office costs as referred to early in presentation.

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Optimisation Benefits - Summary Categories

	#	Project / Area
	1	Intercompany Sourcing / product substitution
	2	Direct Procurement / Buy Better
	3	Freight Negotiation
	4	Indirect Procurement
	5	Increased End User Sales – range expansion
	6	Increased Direct Sourcing / home brand
	7	Strategic Growth
	8	People Development
	9	Shared Services

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Estimated Identified EBIT Benefits

	Year	Low	High
FY18		$2m	$3m
FY19		$3m	$4m
FY20		$3m	$5m
Total EBIT benefit		$8m	$11m
Less retained HO costs		$1m	$1m
Net EBIT benefit		$7m	$10m

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Optimisation Benefits

• Bapcor had indicated during the acquisition it expected earnings per share from the acquisition of the Hellaby automotive business to be in low double digit on a proforma annual basis.

• The optimisation benefits are in addition to the returns previously indicated, which would result in an indicative annual eps growth in the low 20’s by FY20.

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Other matters

• Bapcor will announce its FY17 results at 2.30pm on Wednesday 23[rd] August 2017.

• The process to divest non core assets is underway – announcements will be made at an appropriate time.

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Thank You

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