BAPCOR LIMITED — Investor Presentation 2021

Jun 27, 2021

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ASX/Media Announcement Bapcor Limited (ASX:BAP)

28 June 2021

Updated 5-year strategic targets

Bapcor Limited routinely updates its five-year strategic targets and publishes them to the market. The updated targets were to be presented at our investor day on 24[th] June 2021 which unfortunately had to be postponed due to COVID restrictions. Therefore the updated strategic targets are being announced today.

Further elaboration on Bapcor’s strategy and strategic targets will be provided at the next Investor Day – currently planned for Wednesday 28 July 2021.

Bapcor is Asia Pacific’s leading provider of vehicle parts, accessories, equipment, services and solutions, with a network of over 1,000 locations across Australia, New Zealand and Thailand.

Ends

Authorisation:

This announcement was authorised by Darryl Abotomey, CEO & Managing Director.

For further information:

Darryl Abotomey Managing Director and CEO Bapcor Limited +61 419 838 059 +61 3 9914 5555

Noel Meehan CFO Bapcor Limited +61 3 9914 5555

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Bapcor Strategy Update

28[th] June 2021

Bapcor routinely updates its 5 year strategy and targets. In this update;

• Physical store targets have increased in all segments

• Supply Chain & Technology strategy detailed

• Asia strategy expanded with the addition of Tye Soon

• Expanded on Environmental, Social & Governance (“ESG”) commitment

• Own brand targets increased in all segments

The strategy will be elaborated on at the Bapcor Investor Day – currently planned for Wednesday 28 July 2021 (COVID dependent!)

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Asia Pacific’s Leading Supplier of Vehicle Parts, Accessories, Service and Solutions

Unique in Australasia - cover ALL on road vehicles – cars, truck, bus & trailer

	•		Founded in 1971 as Burson Auto Parts	Key Statistics	($AUD)*
	•		Listed on ASX April 2014 and became Bapcor Group in 2015
				Revenue	~ $1.7 Billion
	•		Asia Pacific operations spanning the sale and distribution of
			vehicle parts, accessories, automotive equipment, servicing	Market Cap	~ $3.0 Billion
Overview			and solutions
	•		Specialist focussed businesses	EBITDA: Net Debt	< 1.0 X
	•		Vertically integrated between wholesale, trade/retail & service.	Interest Cover	>10.0 X
	•		Greater than 80% of business is trade related
				Locations	> 1,000
		•	Proven track record of growth	Team Members	~5,000
		•	Resilient industry	* As at June 2021
Investment Highlights		•	Clear and consistent strategy
		•	Numerous continuing growth opportunities
		•	Strong cashflow and capacity to support growth

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Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions

H1 FY21 revenue contribution

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Revenue Australia's leading trade focused $314m automotive parts distributor (34%) c. $1.7 billion Premium parts and accessories retailer $198m including automotive service centres (21%) > 1,000 locations in Australia, New Industry leaders in specialist product $328m Zealand and categories (35%) Thailand Services New Zealand’s trade, service $86m and specialist wholesale automotive (9%) segments ~ 5,000 Team members Trusted provider of premium-quality OE, Note: Revenue % contribution aftermarket parts, accessories and excludes Asia and Head Office. workshop equipment The above percentages do not add up to 100% due to rounding.

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Trade
Specialist Wholesale THAILAND
Retail
NT 6
12 6
3 3 6
QLD
224
112
WA VIC 49 63
87 210
13 31 43 62 51 97
SA
ACT
95 7
14 17 64 3 2 2
NEW ZEALAND
NSW 215
197
TAS 53 54 90 73 8 134
19
6 3 10
AUS CAR PARC
No. of vehicles 20m
New cars sold p.a. 1.1m1.1m
Ave. age of vehicles 10 yrs
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• No. of vehicles 20m

• • New cars sold p.a. 1.1m1.1m • Ave. age of vehicles 10 yrs • Ave. annual growth c.2% p.a.

"Underlying growth in every region”

THAI CAR PARC

• No. of vehicles 20m • New cars sold p.a. 1.1m • Ave. age of vehicles 10 yrs • Ave. annual growth c.4% p.a.

NZ CAR PARC

• No. of vehicles 5m

• • New cars sold p.a. 150k • Ave. age of vehicles 14 yrs • Ave. annual growth c.3% p.a.

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With our team members, safety and our customers always at the core of what we do

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Drive expansion of network footprint – physical and online

• Grow existing store sales

• Develop our network footprint

• Grow absolute number of stores

• Roll out improved concepts to differentiate against our competitors

• Provide customers with online offering to supplement physical stores

• Geographic expansion in Asia

Supplement market leading brands with Bapcor own brand products

• Moving closer to the manufacturer where capability exists and consistent with Trade and Retail strategies

• Capture more margin and develop internal capability

• Implement in-field marketing resource to promote brands

Realise benefits and efficiencies of the Bapcor Group

• ESG  develop and deliver deep commitments

• Invest in key systems, digital solutions & data driven analytics

• Procurement  utilise Bapcor’s scale to deepen supply relationships and financial benefits

• Leverage group logistics capability  deliver operational excellence and optimise supply chain benefits

• Cohesive brand architecture  effective marketing spend

Invest in our team members

• Enhance organisational capability by investing in our team member’s development

  • Establish structured learning and development across the group

  • Invest in key functional capabilities – sales excellence, pricing, procurement, product capability, brand management

  • Invest in leadership development

  • Expand online training and development

  • Be an employer of choice

• Utilise group company store networks to reach customers  increase addressable market

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Business Fundamentals Strategic Pillars Current Strategic Priorities
Drive expansion of network Grow existing network
Market leader
footprint – physical and online footprint
Supplement market leading Optimise supply chain
brands with Bapcor’s own
Resilient Industry
brand products
Invest in new and upgraded
technology
Realise benefits and
Integrated operating model efficiencies of the Bapcor
Group Expand into Asia
Proven track record Invest in our team members Good Citizen Through ESG
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Business Segment	Number of locations – June	Number of locations – June	Indicative store expansion	Indicative Relocations /
	2021(1)		growth p.a.	Refurbishments p.a.
Bapcor Trade		200	10 - 12	5-6
Bapcor New Zealand		73	2-3	3-5
Bapcor Retail
– Autobarn	133 Autobarn		c. 12	c. 8
– Autopro	104 Autopro		c. 8	c. 4
	75	CarParts
Specialist Wholesale
- Light Commercial (WANO)		17	c. 5
- Heavy Commercial (Truckline)		32	c. 5
- Electrical (JAS)		17	c. 5

(1) Excludes various businesses

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• Moving from 13 DCs in VIC to one located in Tullamarine

• Retail segment successfully transitioned

• Expected opex benefit of $10m in FY23 and reduction in working capital of $8m

• Strong investment in ‘state of the art’ technology

• Phase I –

• Victorian DC • 50,000m[2] warehouse

• consolidation

• Goods to Person (GTP) technology – GTP pick 600 lines per hour, previous 600 lines per day

• Tier 1 Warehouse Management System

• Improved freight efficiencies / carbon emission reductions / energy utilisation

• Replicate the Victorian DC in Queensland

  • Approx. 43,000m[2] vs 50,000m[2] in Victoria

• Phase II – Approx. 43,000m vs 50,000m in Victoria Potential • Ability to consolidate 7 Queensland DCs

• Queensland DC consolidation • Project initiated and property EOI underway

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• Infrastructure/common technology

• ERP rationalization

• Warehouse management systems

• Data warehouse

• Safety management system

• Time & Attendance

• Customer Facing

• Retail point of sale

• Customer Relationship Management

• Online Workshop Booking System – “ENJI”

• Digital Transformation

• Upgrading parts catalogue

• Upgrade eCommerce platform – trade (B2B) & retail (B2C)

• Workshop support system

• Data Warehouse / Data Analytics

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• Established in 1933, Tye Soon is the most prominent independent automotive parts distributor in South East & North East Asia.

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• Distributes one of the largest portfolios of top-tier global brands of genuine & aftermarket automotive parts

• The business is headquartered in Singapore and listed on the Singapore Securities Exchange (TYE)

• Operate c.60 locations across South East and North East Asia;

Country	Legal entity name	Operations	Branches
1. Singapore	Tye Soon Limited	European & Japanese parts exporter	2
2. Malaysia	Naga Jaya Group	Parts wholesaler (90%) and distributor to workshops (10%)	15
3. Australia	Imparts Group	European parts specialist distributor	20
4. South Korea	Sejong Parts Plus Limited Liability Company	European parts specialist distributor	20
5. Thailand	Pal Everts Co., Ltd	Japanese parts distributor	1
6. Hong Kong	TSC Enterprise (HK) Ltd	European & Japanese parts – resellers and workshops	1

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22.3% 23.9% Key brands
Malaysia
Australia
FY19
South Korea
7.2% revenue [1] :
SG$222.0M Singapore
Thailand
18.1%
11.1%
Other
17.4%
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Note: 1. Based on 31 December fiscal year end

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Ethical supply chain / procurement

Ethical sourcing, forging strong supplier relationships and enhanced transparency

2020 Modern Slavery Report Lodged

Good governance

Upholding our values and code of conduct, prioritising health and safety, training and developing our team members, and fostering a diverse and welcoming workplace

Pay fair share of tax in all jurisdictions

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Positively impact our community

Engaging stakeholders and supporting the communities in which we operate

Environmental sustainability

Efficiently use resources, optimise our fleet and reduce waste

Reduce carbon footprint through DC consolidations

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5 Year Strategy (updated June 2021)
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Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions. 260 40% >90 1012 56	Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions. 260 40% >90 1012 56	Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions. 260 40% >90 1012 56	Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions. 260 40% >90 1012 56	Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions. 260 40% >90 1012 56	Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions. 260 40% >90 1012 56	Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions. 260 40% >90 1012 56	Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions. 260 40% >90 1012 56	Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions. 260 40% >90 1012 56	Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions. 260 40% >90 1012 56	Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions. 260 40% >90 1012 56	Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions. 260 40% >90 1012 56					45%	45%
			260	1012		56		40%		>90		23		35		45%
	Trade Trade focussed “parts professionals” supplying workshops in Australia & New Zealand		AUS Stores Target Currently 200	- AUS New Stores p.a.		- AUS Store Refurbishments / Relocations p.a.		AUS Own Brand Target Currently 29%		NZ Stores Target Currently 73		- NZ New Stores p.a.		- NZ Stores Refurbishments / Relocations p.a.		NZ Own Brand Target Currently 31%
	Specialist Wholesale (Ex. Commercial Vehicles)	#1 or #2 Industry category specialists in parts programs	A$600m AUS Turnover Target Currently c.$A480m	A$50m NZ Turnover Target Currently c.$A35m		65% Own Brand Target Currently 52%
	Commercial Vehicles - Light (<20t) H (>20t) The only choice for commercial vehicle parts and accessories		40 Light Locations Target Currently 17	c.5 New Light Locations p.a.		A$120m Light Turnover Target Currently c.$A60m		50 Heavy Locations Target Currently 32		c.5 New Heavy Locations p.a.		A$220m Heavy Turnover Target Currently c.$A120m
	- eavy
	Retail	Australia's premium retailer of automotive accessories – supplying the independents: parts, accessories	200 Autobarn Stores Target Currently 133	c.12 New Autobarn Stores p.a.		c.8 Autobarn Store Refurbishments / Relocations p.a.		200 Autopro Stores Target Currently 104		c.8 New Autopro Stores p.a.		c.4 Autopro Store Refurbishments / Relocations p.a.		45% Own brand Target Currently 32%
& 4WD Service Reliable & trusted car servicing at affordable prices Suortin the indeendents		& 4WD	(85 Company Owned)					plus 75 CarParts
	Service Reliable & trusted car servicing at affordable prices Suortin the indeendents		500 AUS Workshops Target	165 NZ Workshops Target		80% Intercompany Sourcing Target				2
Asia ppg p Bringing automotive aftermarket parts to Asia	ppg p		Currently 105	Currently 134
	Asia Bringing automotive aftermarket parts to Asia		Thailand >60 Locations target	Thailand A$100m Turnover target		Total Asia A$500m Turnover target
			Currently6	Currently $A4m		Currently $A4m + Tye S		oon $A200m

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Market fundamentals and appropriate opportunities continue to drive growth;

• Continued expansion of core businesses

• The only “specialist” focussed aftermarket distributor in Asia Pacific – difficult to

• replicate

• Expand market penetration

• Focussed category leadership

• Most Efficient & Optimised Supply Chain

• Solid financial position

• THE leading Asia Pacific vehicle parts business

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THANK YOU

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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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