CAR GROUP LIMITED — AGM Information 2010

Oct 24, 2010

carsales O com Itd

Annual General Meeting - 26th October 2010

RedBook.com.au

INTRODUCTION

carsales O com Itd

Performance Update & Outlook

Operational Performance

• Strong automotive enquiry volumes up 28% on pcp.
• Strong double digit automotive private ad volume growth on pcp.
• Automotive inventory reaches 200,000 cars online. Average time to sell reduced slightly over the year.
• New car inventory grew by over 60% on pcp.
• Robust second half display advertising conditions, with Mediamotive growing 31% on pcp for the full year.
• Solid growth performances from all other non automotive verticals.
• Continued delivery of new product.

MarketDynamics

• Under 1 million new cars sold in calendar 2009, but 2010 in better shape. Record June sales of 108,722 vehicles*
• Mobile beginning to see some scale with the strong take up of new devices.
• Continued clear leader by all metrics.
• Migration of revenue from print to online continued through out the year, particularly with the closing of Trading Post print edition.

Robust Operating Revenue growth to \$123.1m, up 28% on pcp

• EBITDA up 48% on pcp to \$64.5m, with EBITDA margins expanding from 46% to 52%
• Operating cashflow of \$50.4m, up 54% on pcp
• Full Year EPS of 18.6 cents per share, up 40% on pcp (H2 FY2010 10.4 cents up 33% on pcp)
• Final FY2010 dividend of 8.3 cents per share declared (H2 FY2009 7.8 cents per share)
• Completely paid down the 30 Jun 2009 long term interest bearing liability of \$18.7m
• Capex spend in line with Prospectus forecast of \$2.1m
• Headcount rose from 255 to 300 full time equivalents

OPERATING REVENUE

	\$ A M i	l l io ns	Gr ow	h t
Fu l l Ye En d ing 3 0 Ju 2 0 1 0 ar ne	F Y 2 0 0 9	F Y 2 0 1 0	\$ 's	%
Op ing Re t er a ve nu e
On l ine A dv is ing t er	8 2. 9	1 0 7. 7	2 4. 8	3 0 %
Da & Re h ta se ar c	1 3. 0	1 5. 4	2. 4	1 8 %
To l Op ing Re ta t er a ve nu e	9 9 5.	1 2 3. 1	2 2 7.	2 8 %
Op ing Ex t er a p en se s	5 2. 2	5 8. 6	6. 4	1 2 %
E B I T D A	4 3. 7	6 4. 5	2 0. 8	4 8 %
E B I T D A Ma in rg	4 6 %	5 2 %
D & A	2. 1	2. 3	0. 2	1 0 %
E B I T	4 1. 6	6 2. 2	2 0. 6	5 0 %
Ne In Ex t te t re s p en se	0. 7	0. 2	( 0. ) 5	( 1 % ) 7
Pr f i Be fo Ta t o re x	4 0. 9	6 2. 0	2 1. 1	5 2 %
Inc Ta Ex om e x p en se	1 0. 2	1 8. 8	8. 6	8 4 %
Ne Pr f i A f Ta t t te o r x	3 0. 7	4 3. 2	1 2. 5	4 1 %

EBITDA NPAT

CAGR 44.2%

CAGR 65.7% CAGR 64.4%

Source: Carsales

Revenue Segment Performance

	\$ A M i	l l io ns	Gr ow	h t
Fu l l Ye En d in 3 0 Ju 2 0 1 0 ar g ne	F Y 2 0 0 9	F Y 2 0 1 0	\$ 's	%
Op ing Re t er a ve nu e
De ler a	4 9. 4	6 1. 8	1 2. 4	2 5 %
Pr iva te	1 6. 5	2 3. 6	7. 1	4 3 %
D isp lay	1 7. 0	2 2. 3	5. 3	3 1 %
Se De ler & Da ice ta a rv s	1 3. 0	1 5. 4	2. 4	1 8 %
in To l Op Re ta t er a g ve nu e	9 5. 9	1 2 3. 1	2 7. 2	2 8 %

• Consistent market conditions for Dealer continued throughout H2, with enquiry volumes remaining strong.
• Private performed exceptionally well driven by solid volume growth particularly in H2 and across all verticals.
• Improved market conditions for display advertising in H2 along with ongoing continual enhancement of our internal capability, meant that we were able to grow our display revenue at over 50% in the second half compared to 9% in the first half.
• Dealer and Data services continued to perform well enhanced by new product releases such as LiveMarket which performed above expectations.

FY2010 Segment Revenue

Note - Dealer includes Cars, Bikes, Marine, Industry and RV

Strong Cashflows

Capex in line with Prospectus forecast

• Repaid all long term debt
• Dividend payout ratio at 80% of Net Profit After Tax
• Shares Issued reflect options exercised and 350,000 shares issued on ASX listing
• Share Issue cost reflects the capitalised cost of the ASX listing

Operational Metrics

Pleasing automotive enquiry volume growth of 28% on pcp

• Dealer enquiry growth performed well with used volumes growing slightly faster than new.
• Overall H2 FY2010 lead volume growth remained robust but as projected the comparative growth on pcp was lower in H2 as a result of significant changes made to carsales.com.au in H2 FY2009.

• Robust growth in private enquiry volumes continued throughout the year.

• Automotive inventory volumes of just over 200,000 up ~31% on FY2009 levels.

• New car inventory volumes grew 63% on pcp, as manufacturer production levels improved and flowed through to dealer stocking, the impacts of Clarity in Pricing became clearer to the trade, demand for new cars improved and increased focus of the sales force on new car dealer acquisition.
• Private and dealer used inventory grew by 37% and 15% on pcp respectively.

Automotive Enquiry Volumes

Source: Carsales

Industry Landscape

• Clear leadership in consumer traffic extended throughout the past 12 months to 30 June 2010*:
• 75% of all time spent looking at automotive classified websites was done on a carsales owned site.
• carsales Total Time on Site at a publisher level up 22% on pcp, and Page Impressions up 16% on pcp, again demonstrating the continued strength of consumer preference.
• Page Impressions generated in September 2010 on the .mobi and iPhone applications were greater than those generated by both Fairfax and News Corp Automotive Ad Networks desktop sites (see the chart below).

Page Impressions – Mobi & iPhone Apps**

Traffic Metrics – June 2009*

Traffic Metrics – September 2010*

* Source: Nielsen Online Market Intelligence, Automotive Ad Networks, June 2010 & June 2009

** Source Nielsen Online Site Census, Google Analytics, Nielsen Online Market Intelligence, Automotive Ad Networks (Fairfax & News only) August 2009 to September 2010.

Industry Landscape – Automotive Classifieds

Online Automotive Classifieds Market Share by Revenue (CY08 & CY09)

Our market share continues to expand as the market continues to grow

Source: Frost & Sullivan – Calendar years 2006, 2007, 2008 and 2009. Revenue apportioned to online segment of print focussed businesses are estimates only. Automotive classification includes bikes.

Industry Landscape – Display

Online Automotive & Addressable Display Market Share (FY2010)

We have a big opportunity in display with plenty of growth potential

Performance Outlook

Trading ConditionsUpdate

Areas of Operational Focus inFY2010

• Private ad volumes consistent throughout the first quarter of FY 2011 despite the price increase from the 2nd of September on automotive standard ad's from \$50 to \$60 per ad.
• In line with other mainstream media markets, display advertising conditions have remained buoyant overall and we expect strong H1 pcp growth given the relative weakness of H1 FY 2010.
• Dealer is performing in line with internal expectations. New car dealer acquisition is going well and will be further supported by new product expected to be launched in Q2 FY2011.
• Dealer and Data services have shown moderate growth throughout the first quarter. Livemarket customer acquisition remaining solid.
• Capex spend to remain at FY2010 levels of ~\$2.5m.
• Continue the evolution of the non automotive market with the launch of a number of new industry sites.
• Ongoing focus on new car dealer customer and inventory acquisition.
• Continue to aggressively develop and extend existing product offerings particularly in dealer and private over the next twelve months.
• New channels such as mobile will continue to evolve and grow as will our product offerings.
• Further investment in headcount to support product development and growth, particularly in the areas of sales and technology.
• Leverage the Oztion acquisition with current business assets in the general classifieds and ecommerce market.

carsales O com Itd

New Products Released Since Jul 1 2010

RedBook.com.au

Mobile

Web - caravancampingsales

Web - farmmachinerysales

Web - constructionsales

Web - plantmachinerysales

Web - trucksales

carsales com Itd

Web - Autogate UI

	AUTOGATE							Support: 1300 728 800 support@carsales.com.au		HomeTown AutoGroup Account Manager:
m	Leath Versions -	Perpents Settings =	Manufacturers =		798		Dearch	Leads $\frac{1}{2}$	ь Search term		П
them - leath								mustang	10,00 kg	Texturities	995 PA 12
	All vehicles										C help for this page
	All Vehicles New Vehicles	Used Versions								add vehicle	$\bullet$
Make	FILTER RESULTS BY	Health Check	Published on			Published Status		Status
	Vehicle Make 뇌	Any 뇌	Any Service	킈	Any		킈	Aty	킈
Keyword											co
	Displaying 1 - 20 of 687 results (30) vehicles not published on Carseles) Block R.A.	Description	Regn	Page: 12245678910 Nod Photos	Kima.	Printer	Leads	Yiews	Apt	Results per page [ 20 m] Program
ø	10810105938TC01_6	2007 MITSUBISHI TRITON ML MY07 GLX	TC0108	0	40000	20000	ö	ù	٠
冒	10810110287C01_6	2007 MITSUBISHI TRITON ML MYST GLX	TC0131	O.	35000	20000	ø	o	4
п	108101104TC01_12	2007 MITBUBISHI TRITON ML MYG7 GLX	TC0112	o	55000	20000	$\theta$	$\alpha$	٠
置	1081011094TC01_10	2007 MITSUBISHI TRITON ML MY07 GLX	TO0110	۰	25000	20000	o	o	٠
п	1081011125TC01.4	1997 MITSUBISHI LANCER CE GLXI	TC04CSU	۰	20000	20000	o	D.	٠
в	10910101755TC01_11	2007 MITSUBISHI TRITON ML MY07 GLX	TOO!!!	o	30000	20000	o	D.	٠
ø	10910105846TC01_8	2007 MITSUBISHI TRITON ML MYG? (N.Y.	TO0108	ö	40000	20000	ö	ö	٠

carsales ocom Ital

Web - SSE Industry & RV's

1. Edit Ad	Step 2. Optional Extras 3. Pay Please select optional extras	4. Receipt			'Mandatory Field	Shopping Cart
						\$109 Premium Ad
						\$109 Total Incl. GST
	Upgrade to a Premium ad for greater visibility				more info v	Preview Ad
A View sample	\$79 Yes I want to upgrade to a premium ad	- Priority listed large ad * 15 photos and slide show	· Advertise until sold · Unlimited changes				B. Preview
	Add PrivacyProtect for \$15 for increased security				more info v
	Yes I want to increase my security for only \$15 We offer the opportunity to protect your personal contact details. PrivacyProtect' is a simple way of concealing your personal phone number, while still being able to receive phone calls to your mobile or landline. Please enter the contact number you wish to direct all enquires to mobile □ 0409702852		Your own private number	Remain Anonymous	Easy Sebap
	Other Number → 0438506789 M I agree to the PrivacyProtect Terms & Conditions
$\left - \right $	For greater exposure, advertise in Deals on Wheels				more info v
	Yes I want to advertise my equipment on Deals on Wheels S90 Please select one of the following Magazine Size: 1/15 page advertisement (add just \$90) 1/8 page advertisement (add just \$172) Please enter a Magazine description for your advertisement.			1/15 Page Color Advertisement

Web – LiveMarket Release 1.9

	Appraising Performance		Stocking	LiveBook	Reporting	Bettings		Help
Bupply and Demand Region EVA-AL	m
Refine List
49 Make: AUSTIN	Model: All Models	æ	Clear
Page 1 of 1								Vehicle 1 - 9 of 9
		Averages		Market (as at 10-Oct-2010)		Dealership
Vehicle 1968 AUSTIN 1800	Price \$6,000	Kms. 100.000	Listings o	Sold. ٠	Days Supply 60	Listings Ö	Sold 0/60	View Stock
1952 ALISTIN 101	$\sim$	$\sim$	$\circ$	O.	n/a	0	0/60	٩
								т.
1954 AUSTIN A	٠	×.	o	ö.	n/a	ö	0/60	R
1962 AUSTIN A/40 FARINA	×	$\mathbf{a}$	$\circ$	G.	n/a	o	0/60	ë
1962 AUSTIN CAMBRIDGE	٠	×	o	o	nia	o	0/60	$\mathbf{Q}_\mathrm{c}$
1929 AUSTIN SEVEN	×	$\alpha$	$\theta$	G.	nla	ö	0/60	×
1960 AUSTIN CAMBRIDGE	٠	×	$\circ$	٥	n/a	٥	0/80	٩
	٠	$\sim$	$\circ$	G.	n/a	ö.	0/60	z
1960 AUSTIN A/40 FARINA

carsales O com Itd

Marketing Initiatives

Marketing Initiatives - Offline

Print

Wheels, Motor, Top Gear, BRW, Mother and Baby, Unique Cars...

RadioEvents

Launch of our new TVCs focusing on 'real people, real results'.

Media: Free to Air, Subscription & Sponsorships

Outdoor

MCG, Etihad Stadium, Large Format, Buses & Trams, Regional Taxi Tops

Remuneration Report

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

"That the Remuneration Report that forms part of the directors' report of the Company for the financial year ended 20 June 2010 be adopted."

Proxies

In respect of this item of business, the following proxies have been received:

o	i f n a v o u r	9 0 2 1 7 6 6 7 1 , ,
o	i t a g a n s	8 3 7 4 5 1 ,
o	/ d i d t o p e n u n r e c e	2 3 4 9 3 5 5 , ,
o	b i d t a s a n e	1 3 4 2 1 9 7 , ,

Re-Election of Adrian MacKenzie as Director

Operational PerformanceTo consider and, if thought fit, pass the following resolution as an ordinary resolution:

"That Mr Adrian MacKenzie, being a Director of the Company who retires by rotation, and being eligible under the Company's constitution, is reelected as a Director of the Company."

Proxies

In respect of this item of business, the following proxies have been received:

M	o k t a r e	i f n a v o u r	2 2 9 3 1 6 7 1 5 , ,
D	y n a m o	i i c s t a g a n s	0 0 1 6 6 1 6 7 , ,
	o	/ d i d t o p e n u n r e c e	2 3 0 0 0 3 5 , ,
	o	b i d t a s a n e	1 6 2 4 6 3 9 , ,

Appointment of Kim Anderson as Director

Operational PerformanceTo consider and, if thought fit, pass the following resolution as an ordinary resolution:

"That Ms Kim Anderson, having been appointed by the Directors as a Director of the Company on 16 June 2010, and being eligible under the Company's constitution, is approved as a Director of the Company."

Proxies

MarketIn respect of this item of business, the following proxies have been received:

D n y	a m o	i c s i f n a o r v u	1 7 9 2 9 7 1 0 4 , ,
	o	i t a g a n s	1 4 6 2 1 7 ,
	o	/ d i d t o p e n n r e c e u	2 3 5 0 7 0 3 , ,
	o	b i d t a s a n e	7 1 0 0 0 ,

Appointment of Graham Brooke as a Director

Operational PerformanceTo consider and, if thought fit, pass the following resolution as an ordinary resolution:

"That Mr Graham Brooke, having been appointed by the Directors as a Director of the Company on 16 June 2010, and being eligible under the Company's constitution, is approved as a Director of the Company."

Proxies

MarketIn respect of this item of business, the following proxies have been received:

D n a y o	i m c s i f n a o r v u	1 7 6 8 1 0 4 8 9 , ,
o	i t a g a n s	2 3 5 6 7 6 5 , ,
o	/ d i d t o p e n n r e c e u	2 3 5 0 0 0 3 , ,
o	b i d t a s a n e	3 4 7 7 6 7 ,

Amendment to Constitution : Dividends

Operational To consider and, if thought fit, pass the following resolution as a special resolution:

"That Articles 27, 28 and 29 of the Constitution of the Company be amended as set out in the Notice of Annual General Meeting dated 21 September, 2010."

Proxies

In respect of this item of business, the following proxies have been received:

• ^oin favour 179,364,969
• Dynamics ^oagainst 105,362
• ^oopen / undirected 2,340,493
• ^oabstained 54,200

Grant of Options to Managing Director

Operational To consider and, if thought fit, pass the following resolution as a special resolution:

"That, for the purpose of ASX Listing Rule 10.14 and for all other purposes, approval be and is hereby given to the grant of 500,000 options over shares in the Company to Mr Greg Roebuck, exercisable at \$4.90 each, in accordance with the Company's Share Option Plan and the Company's long term incentive arrangements as set out in the Explanatory Memorandum accompanying the Notice of Annual General Meeting dated 21 September, 2010."

Proxies

MarketIn respect of this item of business, the following proxies have been received:

D	n a m y o	i c i s f n a v o u r	1 7 4 0 6 8 2 5 6 , ,
	o	i t a g a n s	1 0 2 8 8 2 3 , ,
	o	/ d i d t o p e n n r e c e u	2 2 7 7 8 4 3 , ,
	o	b i d t a s a n e	1 0 7 0 2 0 6 , ,

We thank you for your attendance today.