Analyst and investor conference call today at 10.00am NZST

Company Announcement

27 November 2019
www.turnersautogroup.co.nz

Analyst and investor conference call today at 10.00am 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: 2897103
Dial toll free from NZ: 0800 453 197
New Zealand local/other international calls:(not toll free) +64 9 886 2846
Dial toll free from Australia: +1 800 502 593

The results presentation will be released to the NZX and can also be streamed live during the call by
following this link: https://slideassist.webcasts.com/starthere.jsp?ei=1268549
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 9 580 9361.
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: 021 722 818
Media Liaison and Assistance: Jackie Ellis, Mob: 027 246 2505

---

HY20
Results
Presentation
For the sixmonthsending
30 September 2019
1••HY20 RESULTSPRESENTATION

Agenda
1.Results summary
2.Business update
3.Financial results
4.Segment results
5.Summary and Q&A
2• HY20 RESULTS PRESENTATION

3• HY20 RESULTS PRESENTATION
Results
Summary

HY20 Results overview
4• HY20 RESULTS PRESENTATION
•Focus on organic growth in underlying
earnings
•Underlying NPBT+11% to $14. 8m
•NPBT down 12% to $14.8m (HY19
NPBT of $16.8m includes gain on sale
of property of $3.5m)
•Revenue $171m +1%
•Earnings per share 12.4cps -18% (due
to gain on sale for property in HY19)
•Continued retail optimization of Auto
Retail footprint into new markets +
optimizing existing sites
•Strong system integration strategy
in finance and insurance
•Insurance distribution broadening
•Planned Carly NZ launch in Q1
CY20
•Continued investment in 3D’s of
digital, data and disruption
FinancialsOperationsGrowth
•Auto retail: Improving retail sales
leading to market share increase
partially offset market decline
•Finance: Successful de-risking of
Oxford
•Insurance:MBI Claims ratio
improved to 68%
•Credit: 22% increase in NZ
Corporate debt referred

HY19:HY20Revenuebridge
•Auto Retail increase from higher unit sales of
“owned” stock (up 6% YoY)
•Finance revenues have grown as a result of
directing Turners origination into Oxford
•Insurance reflects property gain in HY19 of $3.0m,
fewer policies sold as higher risk vehicles re-priced
and fewer used cars sold in the market
•EC Credit revenue increased off improved
commissions from higher corporate debt load in NZ
5• HY20 RESULTS PRESENTATION
Revenue increased from $168m to $171m

HY19:HY20Net profit before tax(NPBT)bridge
6• HY20 RESULTS PRESENTATION
•Auto Retail result affected by fewer consignment
vehicles sold in HY20, and drop in used import
margins.
•Finance driven by writing higher quality new
business and the resulting improved arrears
performance
•Insurance result from HY19 includes $3.0m one –off
gain from property sale. Good gains in claims ratios
have offset reduced policy sales
•EC Credit improvement driven by better cost control
and commissions from increased debt load from
corporate NZ clients
NPBT decreased from $16.8m to $14.8m

Reconciliation: NPBT to underlyingNPBT
•Plan for FY20 has been on growing earnings
organically
•Property gain on sale of $3.5m in FY19 relates
to the sale of 133 Roscommon Road ($3.0m
Insurance + $0.5m in Auto Retail)
•Legal and Advisor costs relate to strategic review
process for Oxford Finance
$MillionsHY20HY19Var
Profit before tax actual14.816.8(12%)
Oxford strategic review costs(0.2)-
IFRS 16 Lease Accounting
changes
0.2-
Sale of property -3.5
Underlying operating result14.813.311%
7• HY20 RESULTS PRESENTATION

HY19:HY20Underlying NPBT bridge
Underlying Profit Before Tax
8• HY20 RESULTS PRESENTATION
•Auto Retail reduction in import margins and lease
consignment units in context of a softer market
•Finance improvement in arrears from growth in
higher quality lending
•Insurance reduction in claims ratios
•EC Credit higher commissions from improved NZ
corporate debt load
Underlying PBT increased from $13.3m to $14.8m

9• HY20 RESULTS PRESENTATION
Business
Update

Key themes
#1 Continue to grow market share
Growth plans combined with used car market
consolidation will see continued market share growth
#2 Underlying used car market still
robust
Used car markets have shown resilience through down cycles
and long term low interest rate environments combined with old
cars needing to be replaced will underpin demand
#3 Oxford: successful de-risking
Focus on using new technology and credit data to
originate & approve better quality loans
#4 Investing in property
Delivered new North Shore site with 3 more branches in
development due for opening in CY20, and 5 more branches in
planning phase
#5 Investing in technology
We will continue to make material investment in
technology which gives us a market-leading advantage +
innovative auto adjacent opportunities (egCarly)
10• HY20 RESULTS PRESENTATION

4.00%
4.50%
5.00%
5.50%
6.00%
6.50%
7.00%
Apr 12
Jul 12
Oct 12
Jan 13
Apr 13
Jul 13
Oct 13
Jan 14
Apr 14
Jul 14
Oct 14
Jan 15
Apr 15
Jul 15
Oct 15
Jan 16
Apr 16
Jul 16
Oct 16
Jan 17
Apr 17
Jul 17
Oct 17
Jan 18
Apr 18
Jul 18
Oct 18
Jan 19
Apr 19
Jul 19
Oct 19
Rolling 3 Month Average
#1-Continue to grow used car market share
11• HY20 RESULTS PRESENTATION
•Continue to optimise existing branch network for
retail customers eg. Whangarei re-location,
Dunedin Mar-20
•Still significant opportunity for some large
consignment customers to direct more vehicles
into retail channels
•Footprint expansion gets us closer to customers and
delivers margin improvement
•Further market consolidation positive for Turners
(6% drop in dealer numbers Sept 19 v Sept 18)
•Improving customer experience helping drive up
market share -Average Net Promoter Score for HY20
at 68 (HY19 at 49)
North Shore
in wind
down mode
Whangarei,
New Plymouth,
Wellington
City, North
Shore on
stream
Turners Retail Market Share (3 Month Rolling Average)

#2 -Underlying used car market still robust
12• HY20 RESULTS PRESENTATION
•Overall NZ used car market down 2.5% and sales
of used imports down 6% as at Sept 19
•ESC feature mandatory on all new and used
imported cars coming into NZ from Mar 2020
•Turners sales volumes are supported by consistent
supply from consignment vendors egLease
companies who have leased cars 3 years earlier
•Low interest rate environment combined with
replacement of older cars should see the used car
market remain resilient
•20+ year age cohort continues to grow...now 2.5x
level it was in 2008
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
2000200220042006200820102012201420162018
Vehicles
Fleet year
Figure 2.10a : Light fleet age structure
20+ years
15-19 years
10-14 years
5-9 years
0-4 years
NZ Vehicle Fleet Statistics -2018

#3 -Oxford: successful de-risking
13• HY20 RESULTS PRESENTATION
Focus on better quality borrowers leading to improvement in arrears and performance
Improving Customer CreditScores
Comparison of new consumer lending HY19 v HY20
350
400
450
500
550
600
1H172H171H182H181H192H191H20
Avergae customer VEDA
credit score
Average Equifax Credit Score for New Business by
Month
Oxford Finance
Consumer Lending ($ Millions)HY20HY19Var
New business49.546.23.3
Arrears1.22.2-1.0
31+ Arrears0.250.84-0.59
Arrears %2.4%4.8%-2.4%
31+ Arrears %0.5%1.8%-1.3%

#4 -Investing in property
Committed branches
North Shore -AKLOpened August 2019August 20198,524m2
DunedinRe-opening larger format of Turners’ Auto-Retail flagship store March 20209,025m2
Westgate -AKLPart of wider Auckland expansion June 20208,500m2
Mt Richmond -AKLPart of wider Auckland expansion August 202010,300m2
Other branches added as sites with acceptable profile and cost base are identified
Christchurch Turners Auto-Retail expansion 202010,000m2
PukekohePart of wider Auckland expansion 202110,000m2
NelsonPart of the regional expansion strategy 20218,000m2
RotoruaPart of the regional expansion strategy 20218,000m2
TimaruPart of the regional expansion strategy 20218,000m2
Focus on growing footprint into new markets and optimizing existing sites for better customer experience.
14• HY20 RESULTS PRESENTATION

#5 -Investing in technology
15• HY20 RESULTS PRESENTATION
•Committed to create competitive advantage from technology
investments
•Technology team 29 FTE (Applications 16, Infrastructure /
Operations 13)
•Early adopters of Agile, DevOps methodologies implemented FY19
(includes automated deployment of software releases)
•Key business areas with major gains include;
•Operational and management reporting through dashboards
and business intelligence
•Significant process automation via operational mobile apps
•Rapid delivery of systems to react to revenue opportunities,
competitor activity, regulation changes, innovation
•Development of APIs (computer interfaces for services and
products)to position for growth
0.0
1.0
2.0
3.0
4.0
5.0
6.0
FY16FY17FY18FY19HY20
Group IT Spend ($Millions)
CapexOpex

Summary of ourstrategic plan(May 2019)
Our strategy isto...
•Simplify thebusiness
•Accelerate growthin a capital efficientway
•De-risk by focusing on our corebus iness and strengths
This will enable usto...
•Significantly increase market share in the core business of Auto retailand
•Participate in new and innovative auto adjacentopportunities
For our key stakeholders thismeans...
•Sharpen our focus on meeting customersneeds
•Improving the efficiency of ourbusiness
•Reducing cyclical swings in our business, especially aroundcredit
•Increasing the returns we deliver to ourshareholders
16• FY19 RESULTS & STRATEGY
PRESENTATION

Progress on Strategicplan
Autoretail
•North Shore
development
complete
•Digital marketing
spend increasing
•NPS tracking up
•Data project
initiated on vehicle
profitability
Insurance
•Build distribution
through
partnerships and
API development
•Prioritise auto
products
•Use technology to
automate claims
process
Finance
•Oxford strategic
review completed
•Continue to
develop
competitive
advantage with
AutoApp
•Focus on high
quality origination
Credit
•Integration to
SME accounting
platforms
•Build on debtor
scorecard
•Use technology to
drive efficiencies
in collections
process
•Launch plans under
development for
Carly NZ
•Continue to
investigate, assess
and investin other
opportunities
17• HY20 RESULTS PRESENTATION
Adjacent opportunities

18• HY20 RESULTS PRESENTATION
Financial
Results

HY20 Results snapshot
Revenue
Net profit aftertax
Revenue
$170.7m+1%
Shareholders’Equity
$220m as atSept19
Underlying Net Profit BeforeTax
$14.8m+11%
Q2 Dividend 4.0cps
ProjectedFY Div17.0cps
Net Profit BeforeTax
$14.8m-12%
H1 Earnings PerShare
12.4cps
(FY1915.2cps,-18%)
Net Profit After Tax
$10.7m-17%
0
100
200
300
400
FY15FY16FY17FY18FY19FY20
Millions
2H
1H
0
5
10
15
20
25
FY15FY16FY17FY18FY19FY20
Millions
2H
1H
19• HY20 RESULTS PRESENTATION

Capital ManagementandDividends
Earnings and Dividend per Share (Cents)
10.0
13.0
14.5
15.5
17.017.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
FY15FY16FY17FY18FY19FY20
Projected
•DividendPolicy Change in May 2019: Increase
in pay out ratio to 60% to 70% of NPAT
•4.0m shares purchased during Share Buy Back
programme (Dec 18 to Sept 19) reducing
issued shares by 4.5% at an average price of
$2.32
•Projected FY20 fully imputed quarterly dividends
Q1 @ 4.0c per share –paid Oct-19
Q2 @ 4.0c per share –payable Jan-20
Q3 @ 4.0c per share –payable Apr-20
Q4 @ 5.0c per share –payable Jul-20
•Gross dividend yield of 9.4% at indicative price
of $2.53 (includes imputation credits)
Dividends fully imputed from FY17 on
20 • HY20 RESULTS PRESENTATION

•Reduction in cash balances due to investment
of insurance reserves into longer dated term
deposits
•Inventory value managed down in Auto retail with
focus on faster turn
•Changein Finance Receivables reflects growth in
Oxford offset by rundown in MTF non-recourse
ledger
•Property, plant and equipmentincrease due to
development of new sites in Whangarei, North
Shore and Mt Richmond purchase.
•Right of Use Asset and associated Lease
Liabilities arise from adoption of IFRS-16
$MillionsHY20HY19
Cash and cash equivalents
14.624.1
Financial assets at fair value
63.455.3
Inventory
36.442.9
Finance receivables
285.7289.1
Property, plant and equipment
52.635.1
Other Assets
37.939.9
Right of use asset
26.8
Intangible assets
166.6170.8
Total Assets
684.0657.2
Borrowings
319.6330.3
Other payables
34.931.8
Deferred tax
11.117.3
Insurance contract liabilities
51.949.9
Lease liabilities
34.6
Other Liabilities
11.811.5
Total Liabilities
463.9440.8
Balancesheet
21• HY20 RESULTS PRESENTATION

Fundingmix
$MillionsLimitDrawnUndrawn
Receivables –Securitisation(BNZ)
184 166 18
Receivables –Banking Syndicate
(ASB/BNZ)
60 3723
Receivables –MTF
23 23 -
Corporate & Property [inclBond]
95 83 12
Inventory(ASB)
30 11 19
Totals
392 320 72
Borrowings
Borrowings byUtilisation($Millions)
As at 30Sept2019
•Increase in Securitisation Warehouse reflects Turners Cars
origination directed into Oxford and away from MTF
•Securitisation funding facility limit at$200m (including capital
contribution from TRA), expect to extend this in Q1 CY20
Inventory
Securitisation
Banking
Syndication
MTF
22• HY20 RESULTS PRESENTATION
166
37
23
83
11
Receivables - Securitisation $166Receivables - Banking Syndicate $37
Receivables - MTF $23Corporate & Property [incl Bond] $83
Inventory $11

23• HY20 RESULTS PRESENTATION
Segment
Results

HY20 by segment
24• HY20 RESULTS PRESENTATION
$MillionsAutomotive RetailFinanceInsuranceCredit
Revenue115.94%22.86%22.2(13%)9.97%
Profit7.3(8%)6.520%2.6(51%)3.617%
Underlying profit7.1(5%)6.419%2.614%3.617%

25• HY20 RESULTS PRESENTATION
HY20 by segment
AutoRetail
•Growing retail market share
•Business becoming more inventory efficient
•Continued optimisation for retail
Finance
•Finance continued focus on targeting high quality borrowers
•Continue to make investments in digital and system integration
CreditManagement
•Significant share increase in NZ Corporate debt collection
•SME focus: integrated with key systems (eg.Xero / MYOB)
Insurance
•Good progress in building out distribution
•Keep improving underwriting standards to reduce risk

Automotiveretail
Revenue 115.9m +4%, SegmentProfit $7.3m-8%
Underlying Segment Profit $7.1m -5%
26• HY20 RESULTS PRESENTATION
•BuyNow(retail sales) up 1% YoY from new branches (New Plymouth and
Whangarei offset by temporary closure of North Shore)
•Inventory value reduced by 15% to $36.5m (Sept 18 -$42.9)
•Unit sales of owned stock up 6%, however margin per unit down 11%,
locally sourced margins are up but import margins continue to track down
due to supply chain costs and adverse currency movements.
•Less consignment stock from lease vendors as we cycled off a strong
return period in HY19 (1,000 units less in HY20).
•$500k of cost reduction initiatives implemented in Turners Certified in H1
FY20
•Damaged vehicle units up 3% in FY20
•Average Net Promoter Score (customer experience measure) for HY20 at
68 (HY19 at 49)
•Gold Winner of NZ Quality Service Awards Used Car Dealership category
2019 and 2020
Auto Retail Breakdown HY19to HY20($Millions)

Finance
•Improvement in quality of new business written
continues
•3 –tier risk pricing model working well with 25% of new
business at premium tier, better risk for reward model.
•Turners Cars lending starting to ramp up well $24m in
new business H1YTD
•No. of intermediaries giving 5+ deals per month has
increased by 100% YoY, and have deactivated 17 dealers
originating lower quality loans
•Consumer arrears percentage improved from 9% (HY19)
to 8.2% (HY20)
•Consumer loans originated in HY20 has a total arrears
percentage of 2.4%, which is a 50% improvement
compared to HY19
Revenue $22.8m +6%, Segment Profit $6.5m +20%
Underlying Segment Profit $6.4m +19%
HY19 to HY20 Receivables Bridge
MTF –Motor Trade Finance
OFL –Oxford Finance Limited
TF –Turners Finance
27• HY20 RESULTS PRESENTATION

Insurance
•Combined loss ratio 60% (H1 FY19: 63%), MBI loss ratio at
68% (H1 FY19at72%).
•All dealers transitioned to new retail policy generation system
which has provided further opportunity to manage portfolio
risk.
•Continued review of dealers portfolio performance for risk
pricing and review of incentives andrebates.
•Culture and conduct review completed
•General Gross Written Premium down 6% to $17.5m as a result
of market conditions and focusing on lower risk portfolios and
vehicles.
•MARAC distribution agreement signed resulting in 20% increase
to dealer network and $2m additional annual GWP from Q4 FY20
•Prior year includes gain on sale from investment property of
$3.0m
CCI Product hasdiscontinued
Revenue $22.2m -13%, Segment Profit $2.6m -51%
Underlying Segment Profit $2.6m +14%
28• HY20 RESULTS PRESENTATION

Creditmanagement
•Total debt load up 17% to $133m, NZ corporate debt
load up 22% to $105m
•Commission earned from debt collected up 21% to
$4.5m.
•Xero and MYOB integration completed, 150+
customer connections expected to grow
significantly
•Contact centre retention improved significantly
Revenue $9.9m +7% Segment Profit $3.6m +17%
Underlying Segment Profit $3.6m +17%
Debt Collected HY19to HY20($Millions)
29• HY20 RESULTS PRESENTATION

30• HY20 RESULTS PRESENTATION
Key focus for2H20
AutoRetail
Continue to optimise footprint for retail, deliver better digital and
mobile customer experience, building data tools to understand
demand, develop new sourcingopportunities.
Finance
Continue pricing for risk, extend distribution through use of APIs and
partnerships,automate more of the credit decision process
Insurance
Increase distributionthrough APIs, launch new products through
delivery ofretail system development, optimise repairnetwork.
CreditManagement
Australian corporate customer acquisition, MYOB / XERO
integration, further enhance collectionsscorecard.

31• HY20 RESULTS PRESENTATION
Summary
& Q&A

HY20 Results overview
32• HY20 RESULTS PRESENTATION
•Focus on organic growth in underlying
earnings
•Underlying NPBT+11% to $14. 8m
•Revenue $171m up +1%
•Earnings per share 12.4cps -18% (due to
gain on sale for property in FY19)
•Continued retail optimization of Auto
Retail footprint into new markets +
optimizing existing sites
•Strong system integration strategy
in finance and insurance
•Insurance distribution broadening
•Planned Carly NZ launch in Q1
CY20
•Continued investment in 3D’s of
digital, data and disruption
FinancialsOperationsGrowth
•Auto retail: Improving retail sales
leading to market share increase
partially offset market decline
•Finance: Successful de-risking of
Oxford
•Insurance:MBI Claims ratio
improved to 68%
•Credit: 22% increase in NZ
Corporate debt referred

Outlook
33• HY20 RESULTS PRESENTATION
•Continued focus on organic growth and growing auto retail market share
•Expecting used car industry to consolidate further over 2019/2020
•Impact of Electronic Stability Control as a mandatory feature for all imported vehicles from March 2020 will
impact smaller dealers and very low priced vehicles
•Retail optimisation to continue
•Focus on quality and distribution in finance and insurance
•The Board is not expecting any significant one-off gains or losses in H2
FY20 net profit before tax guidance of $28.0m to $30.0m

34• HY20 RESULTS PRESENTATION
Question
s
34• HY20 RESULTS PRESENTATION

Disclaimer
35• HY20 RESULTS PRESENTATION
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 inthe 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 forwardlooking
statements, whether as a result of new information, future events or otherwise.

Contact
ToddHunter
CEO TurnersLimited
T: 64 21 722818
E:todd.hunter@turners.co.nz
36• HY20 RESULTS PRESENTATION