TRA – 1H19 results conference call today at 9.30am NZST

www.turnersautogroup.co.nz

Company Announcement

27 November 2018

Analyst and investor conference call today at 9.30am NZST

To attend the conference call, participants will need to dial into one of the numbers below at least 5-10
minutes prior to the scheduled call time and identify yourself to the operator. When prompted, please
quote the conference code: 4182519.
Dial toll free from NZ: 0800 423 970
New Zealand local/other international calls:(not toll free) +64 9 9133 622
Dial toll free from Australia: +1 800 573 793
Dial toll free from United States/Canada : 0800 263 0877
Dial toll free from UK: 0800 358 6377

The results presentation is available on the NZX website and can also be streamed live during the call by
following this link: https://slideassist.webcasts.com/starthere.jsp?ei=1220949.
An online archive of the event will be available within 24 hours after the call and will be accessible for up
to 90 days after the call by clicking the link above.
If you have any queries regarding the results announcement or the conference call, please contact
Aaron Saunders on +64 27 493 8794.
ENDS
About Turners
Turners Automotive Group Limited is an integrated financial services group, primarily operating in the
automotive sector. www.turnersautogroup.co.nz.

For further information, please contact:
Todd Hunter, Chief Executive Officer, Mob: +64 21 722 818
Media Liaison and Assistance: Jackie Ellis, Mob: +64 27 246 2505

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HY19 Interim Results Presentation
Interim Results
Presentation
For six months ending
30 September 2018
Turners Automotive Group

2018 Annual Meeting Presentation
TURNERS: AN
INTEGRATED
AUTOMOTIVE GROUP
•Turners is the biggest seller of
used cars, trucks and machinery
in NZ. We finance them and
insure them for mechanical
breakdown, accident and loan
repayments with the best range
of products in the market.
•We also operate in the Debt
Management sector, leveraging
off our expertise in the finance
market.
I NEED TO FINANCE
AND INSURE MY
VEHICLE
I NEED TO REPAIR
AND SERVICE MY
VEHICLE
I NEED TO
SELL MY
VEHICLE
I NEED TO BUY A
VEHICLE

HY19 Interim Results Presentation
THE KIWI CAR ECONOMY
61%
of people ended up spending
less than $10,000 on their car,
80% were less than $20,000
3.85m
Light vehicles in the NZ vehicle fleet
3,462
Registered dealers
in NZ
14yrs
Is the average age of used
vehicle in NZ since 2013
10,250 EVs
As at Sept 2018, double the fleet size
from Sept 2017.
NZ Used
import sales
8.6% down
used imported car sales were
down to 76,000 for H1, the
decline is greater in Auckland
at 12%.
21 years
The average age light
vehicles were scrapped
from fleet was 22 years for
an import and 21 years for
NZ new
Source: NZTA, Ministry of Transport, MBIE, Turners Market Research Nov 17
Note 1. Dealer-to-public plus ex-overseas sales
3
74,666
New passenger and light
commercial vehicles sold into NZ
for 6 months ended Sept 18
90,000
Vehicles de-registered in H1
FY19 up 12%

HY19 Interim Results Presentation
HY19 OPERATING ENVIRONMENT
•Softening demand with pressure from increased
living and fuel costs
-Auckland used import sales down 12% on
same period last year
-NZ used import sales down 9%
-Decline in used imports market has continued
into second half of the year
• Margins on all used vehicles being impacted by
drop in demand and impact of supply chain issues
(Takata airbag recall and Stink Bug mitigation)
•Large numbers of new cars being pre-registered
•Expecting consolidation in the used car industry.
4
50,000
60,000
70,000
80,000
90,000
1H151H161H171H181H19
Ex-Overseas Registrations
First Half Financial Year
Ex-overseas registrations lower than record 1H18,
consistent with 1H17 which was highest on record.

HY19 Interim Results Presentation
HY19 HIGHLIGHTS AND KEY EVENTS
5
RETAIL FINANCE & INSURANCE EC CREDIT CONTROL
•Retail sales through Turners Cars
up 3% v 1H18
•Expansion of national retail
network through relocations,
renovations and opening of new
sites (Porirua, New Plymouth,
Wellington City)
•Buy Right Cars has increased its
market share; unit sales up 9%

•Oxford Finance new consumer
lending up 23% to $52m
•Turners Finance origination fully
committed to Oxford Finance
from September 2018
•Good progress in repositioning
Oxford Finance to lower risk
lending
•Insurance claims loss ratios have
improved from 69% to 65%
•Securitisation warehouse funding
limit has been increased to
$200M
•Dialler technology has delivered
significant increase in outbound
activity, up 96%, leading to a 20%
increase in customer connects
•Increased resource in Australia
with objective to build EC Credit
Control corporate customer base

HY19 Interim Results Presentation
6
HY19 RESULTS SNAPSHOT
Year on year improvement in revenue and profit
Revenue $168.3m, +3%
Net Profit Before Tax $16.8m, +18%
Net Profit After Tax $12.9m, +28%
NPATA $13.7m, +26%
Shareholders’ Equity $217.3m as at 30 Sep 18
Q2 Dividend 4.0 cps Total HY Dividend 8.0cps
Earnings Per Share 15.19cps (HY18 13.36cps, +14%)

0
50
100
150
200
250
300
350
FY15FY16FY17FY18FY19
Millions

REVENUE
2H
1H
0
5
10
15
20
25
FY15FY16FY17FY18FY19
Millions

NET PROFIT AFTER TAX
2H
1H
NPATA – is net profit after tax and tax adjusted add back of amortised acquisition intangibles IE. Autosure portfolios
inforce and customer relationships

HY19 Interim Results Presentation
HY18: HY19 PROFIT BEFORE TAX BRIDGE
7
•Turners Group improvement in retail sales &
market share, however commercial business
soft
•Buy Right Cars impacted by old stock clearance
and reduced margins due to challenging import
market conditions (demand, stink bug and
Takata airbag recall.)
•Finance result materially impacted by
impairment in the MTF non-recourse channel
•Insurance result reflects improvements in
underlying business particularly in claims
management, and property profits ($3.4m)
•EC Credit down due to loss of key Australian
corporate client and reduction in unredeemed
voucher liability release

HY19 Interim Results Presentation
RECONCILIATION: NPBT TO UNDERLYING NPBT
8
•Property sale and lease back in line with
Turners’ property strategy

•Total “unredeemed voucher liability” for
ECCC stands at $1.7m as at 30 Sept 18

•Prior year revaluation of shareholding in
MTF shares to adjusted market value

•Prior year reduction in BRC earnout
consideration and interest payable based
on reduced profit achievement.
$000s HY19 HY18 Var
Underlying Operating Result 13,256 12,864 3%
Other Adjustments
Sale of 133 Roscommon Road 3,457 0
EC Voucher liability 84 241
Turners Group - MTF shares 0 589
BRC Earn out adjustment 0 550
Total 3,541 1,380
Profit before tax 16,797 14,244 18%

HY19 Interim Results Presentation
BALANCE SHEET
•Reduction in cash balances due to
investment of insurance reserves into longer
dated term deposits
•Growth in Finance Receivables resulting in
increased borrowing
•Inventory has grown from import purchase
brought forward
•Property, plant and equipment includes
acquisition of two development sites
•Insurance contract liabilities increase reflect
growth in Autosure policy sales
9
$000s HY19 HY18
Cash and cash equivalents
24,085 69,472
Financial assets at fair value
55,272 10,965
Finance Receivables
290,091 269,229
Inventory
42,877 42,143
Property, Plant and Equipment
35,122 23,736
Other Assets
39,903 35,300
Intangible Assets
170,843 171,527
TOTAL ASSETS
658,193 622,372
Borrowings
330,291 306,786
Other Payables
28,010 29,721
Deferred Tax
17,614 20,044
Insurance Contract Liabilities
49,920 46,749
Other Liabilities
15,011 18,336
TOTAL LIABILITIES
440,846 421,636

HY19 Interim Results Presentation
FUNDING MIX
10
Securitisati
on
Banking
Syndicate
MTF
Corporate
& Property
[incl Bond]
Inventory
BORROWINGS BY UTILISATION
As at 30 Sept 2018
•Banking syndicate (BNZ & ASB) established May 2018
•Securitisation funding facility limit extended to $200m November 2018
Borrowings
$Millions Limit Drawn Undrawn
Receivables – Securitisation (BNZ) 150 134 16
Receivables - Banking Syndicate (ASB/BNZ) 70 44 26
Receivables – MTF 70 55 15
Corporate & Property [incl Bond] 88 78 10
Inventory (ASB) 30 19 11
Totals 408 330 78

HY19 Interim Results Presentation
Auto Retail
Finance &
Insurance
Debt
Manageme
nt
HY19 REVENUE
HY19 SECTOR RESULTS
11
Auto Retail
Finance &
Insurance
Debt
Manageme
nt
HY19 OP PROFIT
Annual trends reflect acquisition vs
organic growth.

HY19 – focus on growth of existing
businesses after period of sustained
acquisition activity

Strong performance from Insurance,
offsetting headwinds in the second
hand vehicle market and repositioning
of finance portfolio towards lower risk,
higher quality lending

Balance between transactional income
from Auto Retail and annuity income
from Finance & Insurance.
0
5
10
15
20
25
HY16HY17HY18HY19
$M
SECTOR OPERATING PROFIT
0
50
100
150
200
HY16HY17HY18HY19
$M
REVENUE

HY19 Interim Results Presentation
AUTOMOTIVE RETAIL
Revenue 111.8m -1.5%, Op Profit $8.0m -8.6%
12
TURNERS GROUP
REVENUE $79.6M, DOWN 6%. OP PROFIT $7.5M, UP 1.4%

•Continuing increase in fixed price sales (cf auction or
tender) - up 3% YoY, with sales to end users at 68% of all
car purchases
•Owned fleet reduced to 48% from 50% in H1 FY18 due to
increase in consignment units.
•Damaged vehicle revenue up 9% in 1H19 off the back of
new agreements with insurance businesses to sell write-
off vehicles
•Continued expansion of physical footprint with benefits
to be delivered in second half (New Plymouth and
Wellington City)
•Redirect of Turners Finance into Oxford Finance, piloted
in July with full transition completed in September.
Wellington City Branch

HY19 Interim Results Presentation
13
Hamilton Buy Right Cars : The first Buy Right Cars site outside
of Auckland
BUY RIGHT CARS
REVENUE $32.2M, UP 11%. OP PROFIT $0.5M, DOWN 63%
•New branch opened in Hamilton in September...performing
above expectation.
•Gross margins per vehicle down 20% to $1,926 per vehicle
due to clearance of old stock and market conditions
•Focus on increasing the proportion of NZ New cars sold vs
imports (higher margin and quicker turn)
•Decrease in Average Days In Inventory to 152 days (1H18:
182 days)
•Finance penetration remains at market leading levels 45%
YTD
•Turn around taking longer than expected due to market
conditions
AUTOMOTIVE RETAIL
Revenue 111.8m -1.5%, Op Profit $8.0m -8.6%

HY19 Interim Results Presentation
AUTOMOTIVE RETAIL
EXPANSION & PROPERTY STRATEGY
•Opened three new sites at end of 1H19 – Hamilton BRC, Wellington City Turners, New Plymouth Turners in start
up phase
•Lease or buy options considered on merit
•Sold 133 Roscommon Road, Wiri to Argosy Property for $8.6M to provide funds to complete North Shore and
Whangarei developments
•Developing in-house expertise

14
Wellington City Turners Cars
New Plymouth Turners cars
Buy Right Cars Hamilton

HY19 Interim Results Presentation
FINANCE
Revenue 21.6m +21%, Op Profit $5.4m -2%
15
•Good progress on repositioning towards lower
risk borrowers through tightening of credit
policy with particular focus on affordability
assessments
•Total instalment arrears tracking at 2.6% (1.0%
at end-Sept 2017)
•Impairments on higher risk lending categories
has been worse than expected.
•Turners Finance loans redirected into Oxford
away from MTF new lending at $7.7m at end of
Sept
•Consumer lending through dealer channels up
23% to $52m.
0.00%
2.00%
4.00%
6.00%
8.00%
Oxford FinanceTurners FinanceMTF NR
Consumer Payment Arrears by Finance Book
Sep-17Sep-18
300
350
400
450
500
1H162H161H172H171H182H181H19
Average Customer VEDA
credit score

Improving Customer Credit Scores
Oxford FinanceMTF

HY19 Interim Results Presentation
INSURANCE
Revenue $25.7m +15%, Op Profit $6.4m +144%
16
•Improvements in loss ratios across all insurance products.
Combined loss ratio 65% (1H18: 69%)
•MBI loss ratio at 76% (1H18 at 78%)
•Re-pricing for risk has been extensively rolled out across the
network
•Investment income up 37% to $1.36m off the back of Turners
property strategy
•Project to rebuild core origination system has started and is
tracking well for delivery Q1 FY20, which will enable more
agile product design and delivery
•Focus on training and development helping to win new
originators
•Result includes gain on sale in property of $3m
Mechanical
Breakdown
Insurance
Asset
Protection
Payment
Protection
Extended
Warranty
Life
Net Written Premiums by Policy Type
First Half FY19

HY19 Interim Results Presentation
CREDIT MANAGEMENT
Revenue $9.3m – 9% Op Profit $3.1m -10%
17
•Continue to increase debt load from key NZ corporate accounts
at expense of competitors (debt load up 24%)
•Collections scorecard developed and being used with banking
customers
•Increased level of resource in Australia to lift corporate debt
load (under penetrated)
•Auto Dialler technology performing well and creating
significant lift in productivity (see chart)
•Result includes $0.1m unredeemed voucher release ($0.4M
FY18), we expect this to be the run rate level of release moving
forward
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
0
200000
400000
600000
800000
1000000
1200000
1H181H19
Number of Call Connects

Outbound calls

EC Credit Control Call Performance
Outbound CallsDebtor Connects
96% increase in outbound calls, leading to
a 20% increase in customer connects

HY19 Interim Results Presentation
2H19 OUTLOOK
•The business has shown some resilience through tough market conditions through Q1 and bounced back
strongly in Q2 and the diversified revenue streams have really demonstrated their value through the first
half of this year.
•However, market conditions, particularly in the used import market, remain challenging and pressure is
being placed on vehicle margins.
•Within the key market of Auckland we have seen a material reduction in demand which we attribute to the
cost pressures being experienced by many people across the Auckland region in fuel prices, rents, and other
household costs.
•A potential downside impact of 5 - 10% to forecasted pre-tax profits if current market conditions persist.
•Strong balance sheet position and share price dynamics result in Directors’ decision to undertake On-Market
Share Buyback programme of up to 5% of shares on issue.
•We expect the market to come back into demand and supply balance through 2019 with Turners very well
placed to participate in industry consolidation that will inevitably arise.
18

•AUTO RETAIL – lift finance attach rate through training
and development, establish new branches into operating
rhythm, managing inventory levels, complete property
projects, cost and sales volume focus.

•FINANCE – implement comprehensive credit reporting,
introduce automated tools for affordability assessments,
continue shift towards lower risk lending

•INSURANCE – continue re-pricing for risk, replace retail
policy selling system, run claims as efficiently as possible,
continue investment in dealer upskilling

•CREDIT MANAGEMENT – corporate customer acquisition
Australia, utilise collections scorecard, target higher debt
load from existing SME customers
19
KEY FOCUS FOR 2H19
•AUTO RETAIL – develop and extend retail footprint,
deliver better digital and mobile customer experience,
building data tools to understand demand, develop new
sourcing opportunities

•FINANCE – Extend distribution through use of APIs and
partnerships, grow direct lending, further automate the
credit decision process

•INSURANCE – increase distribution, launch new products
and deliver on retail system development, optimise
repair network
deliver on policy renewal opportunity
•CREDIT MANAGEMENT – Australian corporate customer
acquisition, MYOB / XERO integration, further enhance
collections scorecard
KEY FOCUS FOR FY20

HY19 Interim Results Presentation
Contact:

Todd Hunter
CEO Turners Limited
T: 64 21 722 818
E: todd.hunter@turners.co.nz
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HY19 Interim Results Presentation
DISCLAIMER
Turners Automotive Group the (company) is solely responsible for the content of this document. This document is not an investment
statement or prospectus and does not constitute an offer of securities.
This document or any other written or oral statements made by, or on behalf of, the company may include forward-looking statements that
reflect the company’s current views with respect to future events and financial performance. These forward-looking statements are subject to
uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other factors
include, but are not limited to:
I.Uncertainties relating to government and regulatory policies;
II.The occurrence of catastrophic events with a frequency or severity exceeding our estimates;
III.The legal environment;
IV.Loss of services of any of the company’s officers;
V.General economic conditions; and
VI.The competitive environment in which the company, its subsidiaries and its customers operate; and other risks inherent in the company’s
industry
The words “believe,” “anticipate,” “investment,” “plan,” “estimate,” “expect,” “intend,” “will likely result,” or “will continue” and other
similar expressions identify forward-looking statements. Recipients of this document are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of their dates. The company undertakes no obligation to update or revise any forward-
looking statements, whether as a result of new information, future events or otherwise.

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