Turners Annual Meeting Presentation

1• 2019 ANNUAL MEETING
TURNERS AUTOMOTIVE
GROUP
2019 ANNUAL MEETING
18 September 2019

2• 2019 ANNUAL MEETING
Board of Directors
Grant Baker
Non-executive Chairman
Paul Byrnes
Non-executive Dep Chairman
Matthew Harrison
Non-executive Director
Alistair Petrie
Non-executive Director
Antony Vriens
Independent Director
John Roberts
Independent Director
Martin Berry
Independent Director

3• 2019 ANNUAL MEETING
Meeting Agenda
Presentations
•
Address from the Chair, Grant Baker
•
Address from the CEO, Todd Hunter
•
Address from Director, Martin Berry
Shareholder Discussion
Resolutions are per Notice of Meeting
•
Auditors’ Remuneration
•
Re-election of Grant Baker and Alistair Petrie
•
Approval of amended Constitution
General Business
Close of Meeting

4• 2019 ANNUAL MEETING
Chairman’s Presentation
Grant Baker

5• 2019 ANNUAL MEETING
Ten Years of Transformation
FY09-
FY14
•Business Bakery acquires 19.47%
•Grant Baker appointed Chair of
Dorchester Pacific
•Capital restructuring
•Strategic review and move towards
consumer insurance and lending
Acquisition of EC
Credit Control
Acquisition of
strategic stake in
Turners Auctions
FY13FY14
Acquisition of
Oxford Finance
Acquisition of 100%
of Turners Auctions
FY15
Acquisition of bolt on insurance and finance businesses
Acquisition Buy
Right Cars
FY16
Investment in MTF
FY17
Acquisition of
Autosure
FY18FY19
•Strategic Review
•Reducing complexity
•Building on
strengths

6• 2019 ANNUAL MEETING
Track record of building value through acquisition growth
CompanyDate
Acquisition
Price ($m)
NPBT at time of
Acquisition ($m)
NPBT for FY19
($m)
% Change
EC Credit Control
201217.83.66.3+75%
Oxford & Southern
Finance
2014122.911.1+283%
Turners Auctions
2014766.819.2+182%
Buy Right Cars
2016123.4-0.9(126%)
Autosure Insurance
2016344.68.2+78%

7• 2019 ANNUAL MEETING
A Transformed Business
As at March YE200920142019
Shareholder Equity ($m)1674226
Total Assets ($m)149127654
NPBT ($m)(18.3)4.929.0
Dividend per Share (cps)-5.017.0
Market Capitalisation ($m)1.8111197
Numbers adjusted for 1-10 share swap in 2016

8• 2019 ANNUAL MEETING
Strong Dividend Yield
Earnings and Dividend per Share (Cents)
33.0
24.7
25.5
29.3
26.3
10.0
13.0
14.5
15.5
17.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
FY15FY16FY17FY18FY19
Earnings per share [cents]Dividend per Share
•Dividend Policy Change: Increase in pay
out ratio to 60% to 70% of NPAT
•Turners pays quarterly dividends
•Gross dividend yield of 9.9% at indicative
price of $2.40 (as at 17/09/19)
•4.0m shares purchased during Share Buy
Back programme reducing issued shares
by 4.5%.
Dividends fully imputed from FY17 on

9• 2019 ANNUAL MEETING
Turners Today
#1
NZ’s largest buyer and
seller of vehicles
33
Locations in NZ from
Whangarei to Invercargill
9%+
Gross dividend yield within the
top 10 yielding stocks on NZX
6 mins
Turners sell 1 car every 6
minutes, which equates to
over 100 cars per day
200
We sell over 200 insurance
policies per day
900
We employ over 900 kiwis
across the business
40
We write over 40 consumer and
commercial loans per day in
Oxford Finance
$6m debt
Collecting over $6m per month of hard
to collect debt.

10• 2019 ANNUAL MEETING
•
Continued progress on simplifying the business is delivering benefits
•
FY19 underlying performance flat on prior year as market headwinds in
used import vehicle sector and impairments on MTF non-recourse
lending adversely affected result
•
Excluding impairments, generated a record NPBT result of $33.6m
•
Addition of Martin Berry to the Board in 2019
•
Independent external Board review, highlighting strength of the Board
and identifying areas for further improvement
•
Prudent management of shareholders’ funds – new $25m, 3 year Bond
Programme to support funding for growth
•
Commenced in-depth strategic review and identification of future
strategy.
•
Investment in Collaborate Corp (post year end transaction)
Board Report For FY19
“This Board has had to deal
with fundamental and
challenging issues in recent
times and has come out of that
period stronger and in better
shape. That progress also
creates the opportunity to
challenge current processes
and adapt for the challenges
ahead from a stronger footing.“
Jim Quinn
(Governance and Advisory Services)

11• 2019 ANNUAL MEETING
•
CUSTOMER-CENTRIC: Focus on customer needs is essential
•
DATA AND TECHNOLOGY: Big data and technology are changing how and where we do business.
•
REGULATION AND COMPLIANCE across all our businesses is increasing.
•
ONLINE EXPERIENCE: More of the customer experience is transitioning online particularly for
finance and insurance
•
AGGREGATOR AND COMPARISON SITES are proliferating
•
INDUSTRY CONSOLIDATION is inevitable and we are in the midst of this right now.
•
DISRUPTION FROM ALTERNATIVE OWNERSHIP MODELS which could see people moving away from
owning one, two or more cars per household, to flexible ownership and subscription models.
Market Dynamics and Trends

12• 2019 ANNUAL MEETING
Our Future Opportunity
•
Our strength is in retail and we are the largest
and most trusted brand in the industry
•
Large retail market with sizeable forward
demand due to NZ’s ageing fleet
•
Simplification of our business will enable
greater efficiencies, de-risk our business and
offer a higher return on invested funds
•
We are well positioned to benefit from
changing market dynamics, including customer
demand for digitisation

13• 2019 ANNUAL MEETING
We are moving forward with a capital efficient growth strategy, with an increased focus on
Turners’ core auto retail business.
Our Strategy
FOR OUR KEY STAKEHOLDERS
THIS MEANS...
•
Sharpen our focus on
meeting customers needs
•
Improving the efficiency of
our business
•
Reducing cyclical swings in
our business, especially
around credit
•
Increasing the returns we
deliver to our shareholders
THIS WILL ENABLE US TO...
•
Significantly increase
market share in the core
business of Auto retail
•
Participate in new and
innovative auto adjacent
opportunities
OUR STRATEGY IS TO....
•
Simplify the business
•
Accelerate growth in a
capital efficient way
•
De-risk by focusing on our
core business and
strengths

14• 2019 ANNUAL MEETING
CEO’s Presentation
Todd Hunter

15• 2019 ANNUAL MEETING
The Kiwi Car Economy
3.85m
Light vehicles in the New Zealand vehicle fleet
953,000
Cars in the light vehicle fleet that are 20 years or older
1.12m
Used cars were traded in FY19 (down 1% YoY)
18.5 years
Average age light vehicles were scrapped in FY19
(19.5 years for imports, 17.5 years for NZ-new)
16,000
EVs registered in New Zealand to August 2019

16• 2019 ANNUAL MEETING
NZ Used Car Market Still At Strong Historic Levels
•After a period of growth used car sales
have plateaued.
•Underlying demand still strong with
more cars exiting the fleet (cost of
repairs increasing, stricter WoF
regime)
•Mar 2020, all vehicles imported into
the country required to have ESC,
impact in sub $8k budget segment.
•Margins have recovered from low
point Oct/Nov 2018.
•Less than 10% of Turners volume
comes from used imports
Source: NZTA – Used Car Change of Ownership Stats
Annual registrations of used, ex-overseas vehicles
Annual changes in used vehicle ownerships
0
50,000
100,000
150,000
200,000
250,000
010203040506070809101112131415161718
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
010203040506070809101112131415161718

17• 2019 ANNUAL MEETING
FY19 Year At A Glance
EXPANSION OF NATIONAL
RETAIL NETWORK
MANAGED HEADWINDS IN
IMPORT MARKET
REBRANDING OF BUY RIGHT
CARS
INCREASED REFERRER
NETWORK
INTEGRATION OF TURNERS
FINANCE INTO OXFORD
FINANCE
HIGHER QUALITY LENDING
IMPROVED INSURANCE LOSS
RATIOS
NEW BOND ISSUE TO
SUPPORT GROWTH FUNDING
COMMENCED GROUP
STRATEGY REVIEW

18• 2019 ANNUAL MEETING
FY19 ResultsSnapshot
NPATA–isnetprofitaftertaxandtaxadjustedaddbackofamortisedacquisitionintangiblesIE.Autosureportfolios inforceandcustomerrelationships.
REVENUE
$336.6m+2%
ADJUSTED NPBT
(excluding BRC brand write down)
Record $33.6m
NET PROFIT BEFORE TAX
$29.0m-7%
SHAREHOLDERS’EQUITY
$226.4m
as at 31 Mar 19
NET PROFIT AFTER TAX
$22.7m-3%
FINAL DIVIDEND 5.0 cps
FY19 Dividends
17.0cps
NPATA
$24.3m-3%
EARNINGS PER SHARE
26.2cps -10%
0
100
200
300
400
FY15 FY16 FY17 FY18 FY19
Revenue (NZ$m)
2H
1H
0
5
10
15
20
25
FY15 FY16 FY17 FY18 FY19
Net Profit After Tax (NZ$m)
2H
1H

19• 2019 ANNUAL MEETING
FY19 Sector Results
Auto
Retail
Finance &
Insurance
Debt Management
FY19 REVENUE
0
10
20
30
40
50
FY15FY16FY17FY18FY19
$M
SECTOR OPERATING PROFIT
0
100
200
300
400
FY15FY16FY17FY18FY19
$M
SECTOR REVENUE
Automotive RetailFinance and InsuranceDebt Management
Auto
Retail
Finance &
Insurance
Debt Management
FY19 OP PROFIT

20• 2019 ANNUAL MEETING
Board and Management Collaboration
•
EC Credit Control rebrand
•
Oxford Finance rebrand
•
Assistance and advice in area of comprehensive
credit reporting
•
Key customer visits and meetings in NZ and
Australia leveraging networks
•
Regular Advisory board contributions for Buy
Right Cars and EC Credit Control
•
Regular meetings outside of board meetings
with Appointed Insurance Actuary
•
Substantial time commitment through strategy
review process
•
Sub-committee attendance for Bond
Program
•
Full board review of Oxford strategic review
documents
•
Significant contribution in area of digital
marketing and strategy
•
Specific contribution in Innovation
investment for Collaborate Corp
•
Property due diligence
•
RBNZ meetings regarding insurance
appointed actuary regime

21• 2019 ANNUAL MEETING
Strategy Update

22• 2019 ANNUAL MEETING
STRENGTH OF
TURNERS BRAND
COMPLEXITY OF
EXISTING
BUSINESS
GROWTH OF NZ’S
AGEING VEHICLE
FLEET
DEMAND FOR
DIGITISATION
Primary Drivers Behind Our Strategy

23• 2019 ANNUAL MEETING
Strategic Pathways
Simplify the Business
De-Risk the BusinessGrow the Business
•Continue strategy of
writing higher quality
loans
•Early adoption of
comprehensive credit
reporting
•Focus on loan origination
rather than underwriting
credit risk
•Active engagement
with regulators
•Expand auto retail footprint
•Shift marketing investment
into digital platforms
•Leverage data analytics to
buy and sell smarter
•Evolve the customer
experience in person and
online
•Look for innovation
and disruptive
opportunities
•
Single brand strategy for Auto
Retail
•
Single brand and system
strategy in finance and
insurance
•
Run down non-core life
insurance products
•
Strategic review for business
units where we don’t hold
dominant market position

24• 2019 ANNUAL MEETING
Simplify: Consolidating To One Brand In Auto Retail

25• 2019 ANNUAL MEETING
Simplify: Strategic Review Of Business Units
Undertaking a review of non-core businesses with lower synergies to the core autobusiness.
•Capital intensive growth model
•Profits from captive business are deferred
•Reduces channel conflict
•Jardens are mid-divestment process and expecting
NBIOs from potential buyers by end of September.
•High return capital business
•Non-auto therefore lower alignment
with auto-centric strategy
•Strategic review likely in next 12-24
months
SHORT TERMREVIEW
MEDIUM TERMREVIEW

26• 2019 ANNUAL MEETING
EXPAND RETAIL FOOTPRINT
•
Continue to expand our footprint in high potential
locations across the country.
•
A proportion of reserves from Turners’ Insurance
business has been allocated to support the retail
expansion and assist in better utilisation of capital in
the business.
•
We are starting to see positive gains from the
ongoing optimisation of our retail network, both
relocating existing branches and opening new
locations.
Grow: Improve The Customer Experience
Turners Cars
TurnersCommercia
Owned Properties -$45m Invested
Whangarei (8,000m2)Turners Cars
North Shore Cars (8,500m2)Turners Cars
Mt Richmond Auckland (10,500m2)Turners Cars
Roscommon Road Auckland (10,000m2) Turners Trucks (DPL)
Porirua (17,000m2)Turners Cars (DPL)
Palmerston North (1,850m2)Turners Trucks
Christchurch (9,000m2)Turners Damaged

27• 2019 ANNUAL MEETING
Growth In Footprint From ~147,000m2 To ~220,000m2 In Next
Two Years Through Opening Nine New Sites
North Shore - AKL Re-opening of Turners’ Auto-Retail flagship store July 20198,524m
2
DunedinRe-opening of Turners’ Auto-Retail flagship store Dec 20199,025m
2
Westgate - AKL Part of wider Auckland expansion June 20208,500m
2
Mt Richmond - AKL Processing and Retailing June 202010,300m
2
Christchurch West Turners Auto-Retail expansion 202010,000m
2
PukekohePart of wider Auckland expansion 202110,000m
2
NelsonPart of the regional expansion strategy 20218,000m
2
RotoruaPart of the regional expansion strategy 20218,000m
2
TimaruPart of the regional expansion strategy 20218,000m
2
Committed branches

28• 2019 ANNUAL MEETING
•
Purchased old Placemakers site
•
Increased footprint from 6,500m2 to
8000m2
•
High profile corner site
•
Higher % of retail sales at new site,
more finance deals, higher margins
on owned inventory
•
3 months to June 85% increase in
operating profit Jun YTD
Branch Re-location – Whangarei (Owned Site)

WHANGAREI
NEW SITE

30• 2019 ANNUAL MEETING
•
Leased site
•
High profile corner site on busy
arterial of 4,600m2
•
180+ car site
•
First presence in New Plymouth
•
Captured 15% of the local
market inside 6 months
•
Strengthened our conviction
around organic growth and
demonstrates the value of the
Turners brand.
New Branch – New Plymouth

NEW
PLYMOUTH

32• 2019 ANNUAL MEETING
•
Owned and developed site in car
precinct of Wairau Valley
•
High profile site on Archers Road
8,500m2
•
300+ car site
•
High yard to building ratio
•
Opened late July
Relocation – North Shore (Owned Site)

33• 2019 ANNUAL MEETING
Digital, Data
And Disruption
Martin Berry

34• 2019 ANNUAL MEETING
Context: The Past, Present and Future of Automotive Sales
HISTORICALLY
Physical store
“Consumers will
come to us”
THE PAST
E-research
“Online browse”
RECENT PAST
Multichannel
“Many consumers shop
across channels”
THE PRESENT
Omnichannel
Relevant products and
services anywhere”
THE FUTURE
Ecosystem
“A market tailored ecosystem
of products and services”

35• 2019 ANNUAL MEETING
Digital The Key To The Customer Purchase Journey
AWARENESS
SEARCH
RESEARCH
PURCHASE
ADVOCACY
Dominant Channel
Digital
Digital
DigitalDigitalPhysical
Customer Used Car Purchase Journey
95%
Of vehicle buyers use
digital as a source of
information*
70%
Of people use
YouTube as part of
their car buying
process*
66%
Are undecided and
open to which model
they will buy*
78%
Find Social Media
useful when deciding
on their car
purchase*
44%
Have shared vehicle
related content with
their network on
social media*
*Facebook (2018), Google (2018)

36• 2019 ANNUAL MEETING
Building An Omnichannel Experience Fuelled By Digital
•
Hired a leading digital
agency, firing up Turners
social channels
•
Shifting majority of offline
marketing spend into
online
•
Reviewing Turners
online/mobile assets
•
Exploring content creation
and influencer marketing
campaigns
•
Building attribution and
tracking models
•
Reviewing CRM capability
to support seamless
customer experience on
and offline
•
Reviewing sales training
and incentives to support
an omnichannel strategy
•
Continuing to expand our
retail footprint
•
Exploring alternative
retail formats, i.e. pop-up
stores.
Seamless Customer Experience

37• 2019 ANNUAL MEETING
And Powered by Insight Through Big Data & Analytics
Auction data
Listings (67k), Bidders (120k bidders)
Vehicle data
Test drives (38k), sales prices, valuation
requests (47k)
Web data
Searches (20m), page views (29m), saved
searches (6k), watchlists(180k)
Autosure data
Claims data on vehicle (36k claims
lodged in LTM)
Finance data
Vehicles that are financed (10k loans for
cars LTM)
Have Engaged KPMG Data Analytics Team

38• 2019 ANNUAL MEETING
Illustrative Example Of Key Insights Generated
Mazda 3 / Axela
- 2015 MY
- 20,000 km’s
- White color
- 2.0 litre engine
- Retail: $15,000
- Days on book
Key Benefits:
- Better margins
- Faster Inventory turn
- Happy customers
Forecast can sell 50 units in next 90 days
RESULTINSIGHTANALYTICS
DATA

39• 2019 ANNUAL MEETING
Disrupt: Strengthening The Turner’s Ecosystem Via Innovation
BUYSELL
SUBSCRIBERENT
FINANCEINSURE
FIXASSIST
TURNER’S ECOSYSTEM
Criteria for Investment/ Partnership
•Must fit within our automotive ecosystem
•Turners brand is logical and can be
leveraged
•Strong interest in ‘capital lite’ platform/
aggregator type models
•Must significantly improve the way
customer needs are met
•Must help to reduce operating costs
•Helps mitigate potential threats and
provide optionality on innovative and
disruptive opportunities
PARTNERSHIPS, PLATFORMS, INVESTMENTS, NEW MODELS

40• 2019 ANNUAL MEETING
Example: Recent Investment In Collaborate (Cl8.ASX)
BUY
LEASE
SUBSCRIBE
RENT
OWNERSHIP MODELS
Subscription Based Services Are Growing:
•AirBnB, Netflix, etc have help to disrupt
traditional ownership models with
subscription-based services now accounting
for 10% of monthly household expenditure
•It is estimated that by 2025, 10% of all car
sales will be via a subscription-based service
Collaborate (Cl8.ASX)
1+1 = 3
•Core expertise and focus on subscription
services enabling us to offer an innovative and
differentiated proposition into the NZ market
•Strong brand, large customer-base, data and
capital that can help scale Carly.

Outlook and Focus

42• 2019 ANNUAL MEETING
FY20 Focus
Auto retail
•Expand footprint
•Invest in digital
and social
marketing
channels
•Leverage data
analytics
Insurance
•Focus on auto-
retail insurance
•Look for
partnership
opportunities to
increase
distribution
•Run downnon-
core life insurance
products
Finance
•Short term strategic
review
•Continue to focus
on risk pricing
•API
development
to broaden
distribution
Credit
•Medium term
strategic review
•System integration
to improve debt
load process
Adjacent
opportunities
•Launch vehicle
subscription in NZ
•Investigate, assess
and invest in other
opportunities

43• 2019 ANNUAL MEETING
•
Main focus on organic growth
•
Expecting industry to consolidate further over 2019/2020
•
Impact of ESC change will impact smaller dealers and very low priced vehicles
•
Confidence in strategy and long terms prospects for the business
•
Oxford sale process tracking to plan
FY20 Outlook
All business divisions tracking ahead of budget and ahead of FY19 at end of Q1

44• 2019 ANNUAL MEETING
Shareholder Discussion

45• 2019 ANNUAL MEETING
ORDINARY RESOLUTIONS:
•
RESOLUTION 1: That Staples Rodway be reappointed as auditors of the Company and
that the Directors be authorised to fix the auditors’ remuneration.
•
RESOLUTION 2: That Grant Baker, who retires by rotation and has offered himself for re-
election, be re-elected as a Director of the Company.
•
RESOLUTION 3: That Alistair Petrie, who retires by rotation and has offered himself for re-
election, be re-elected as a Director of the Company.
SPECIAL RESOLUTION:
•
RESOLUTION 4: To amend the Company’s constitution in the form and manner described
in the explanatory notes, with effect from the close of the Annual Meeting.
Resolutions

46• 2019 ANNUAL MEETING
Voting
Resolution: Proxies FORAGAINSTPROXY
DISCRETION
Auditor’s remuneration20,721,34025,5001,610,256
Re-election of Grant Baker20,356,427395,2811,619,520
Re-election of Alistair Petrie20,117,268335,1281,918,877
Amendment of Constitution20,328,20888,2971,944,302
Total proxies received in respect of 22,371,228 shares representing 26.2% of total
shares on issue.
Voting on each resolution will be by way of poll.

47• 2019 ANNUAL MEETING
CONTACT
Todd Hunter
CEO Turners Limited
T: 64 21 722 818
E: todd.hunter@turners.co.nz
Other Business
Close Of Meeting

48• 2019 ANNUAL MEETING
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:
•
Uncertainties relating to government and regulatory policies;
•
The occurrence of catastrophic events with a frequency or severity exceeding our estimates;
•
The legal environment;
•
Loss of services of any of the company’s officers;
•
General economic conditions; and
•
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.
Disclaimer