Turners 2024 Annual Meeting

TURNERS ANNUAL MEETING
18 September 2024

1. TITLE SLIDE
Good morning everyone.
My name is Grant Baker and I am the chairman of Turners.
Welcome and thanks for joining us at the 2024 annual meeting of shareholders of
Turners Automotive Group.
A few housekeeping matters before we begin...
In the case of a fire, please exit from the doors you came through head into the foyer
and down the escalators and the fire wardens will direct you from there.
Bathrooms are outside the room here on the right.
The Notice of Meeting and 2024 Annual Report and financial statements have been
circulated and made available to shareholders. A quorum is present and therefore I
declare the meeting open.

2. BOARD OF DIRECTORS
Now I’d like to introduce my fellow directors - Matthew Harrison, Alistair Petrie, John
Roberts, Lauren Quaintance and Antony Vriens,
Also at the table with us are Todd Hunter, our CEO and Aaron Saunders, the
company’s CFO.
There are also a number of our senior managers and staff here today. Welcome to
you all.
Also in attendance today are the company’s auditors, Staples Rodway, legal advisors
Chapman Tripp and other advisors. Thank you to all these firms that provide valuable
services to Turners.

3. MEETING AGENDA
Today you’ll hear presentations from myself and Todd covering our business
direction, the opportunities available to us and the progress we are making.
Following the presentations, there will be an opportunity for discussion and any
questions you may have.
We’ll answer questions on the resolutions at the time they are proposed, and there
will be a further opportunity at the end of the meeting to ask any other general
questions about the company and our operations.

5. CHAIR’S ADDRESS – DELIVERING ON OUR PLAN
FY24 has been another record result for the business and importantly we are doing
what we say we will do.
We’re delivering on our plan for growing this business and creating value for
customers, employees and of course our shareholders.

6. TURNERS CONTINUE TO BUILD A STRONG TRACK RECORD
We’ve shown this historic perspective before, and it is important to reflect on the
progress we’ve made.

For the most recent three year period we’re really proud of the fact that we’ve
delivered almost $97M in after tax profits. That’s an increase of 37%.

We’ve also paid 71.5 cents in dividends for every share in the company, which is up
40% on the prior three year period.

For me as a substantial shareholder, this is a fantastic outcome. The best news though
is that there is more to come for Turners, and we are very focused on future growth.

7. A RECORD RESULT AND POSITIONED FOR FUTURE GROWTH
FY24 has been yet another proof point for Turners. Despite headwinds in the
economy, the business has demonstrated resilience, and our people have kept
delivering.

Regardless of the economy, patchy customer demand and very challenging interest
rates, the business has continued to grow. 3 out of our 4 business are materially
ahead of the previous year.

The value of having a diversified business with a balance of activity and annuity
revenues continues to be a strength, albeit the market doesn’t seem to value this as
highly as we would like.

8. HEADLINES
These headlines from the FY24 results announcement in May capture our
performance very well. Turners Motors on in Slowdown being my particular favourite!

The summary is that while many consumer and retail businesses struggle Turners is
outperforming.

9. FY24 RESULTS SNAPSHOT
I’m not going to spend time on the FY24 results as these have been well covered by
Aaron and Todd in May when we announced.

However I will say our compound annualised growth rate over the last 7 years sits at
11%, which is a very impressive track record.

10.WE OPERATE TO A SIMPLE FORMULA
We do try to operate this business to a simple formula...these simple concepts do
work very well for us.

11.FORMULA
If we provide a quality environment and conditions for our people, this will give us
the best chance of providing a quality experience for our customers, and this should
lead to quality outcomes for you, our shareholders.

I wanted to drill into each of the parts of the equation a little further.

12. FORMULA PROOF POINTS
We achieve very high levels of employee engagement and combined with our
employee share scheme gives us one of Turners’ super powers. We are very proud
that we now have 53% of our team as owners in the business.
Being customer driven is one of our core values, and we’ve won the most trusted
brand in the used car category for the 5th year running, and we’ve delivered growing
dividends now for 10 years, footnote except for 2020 when were a little conservative
given the pandemic.
The combination of our highly engaged team, and great customer experiences
underpin the returns we can deliver to you (and me) as shareholders.

13. DIVIDEND GRAPH
These are the sort of dividend graphs that Chairs and CEOs love to show their
shareholders.
We’ve also introduced a Dividend Reinvestment Plan in FY24 and plan to continue
offering this going forward. The yield on our shares continues to be one of the best
on the NZX and we offer quarterly dividends which is a nice point of difference.

14. ACCOLADES
Whilst we might not be seeing the share price we think we deserve, we have received
some third party endorsement of our achievements over the last year. We entered
the NZX50 in December 2023 which has been a goal for us since 2017. This is a
significant and major milestone for the business.

Todd was awarded the CEO of the Year award at the INFINZ awards in May. We were
selected as a finalist in the NZ Diversity Awards recently and just last week we won a
NZ Marketing Award for Excellence in long team marketing strategy for Tina from
Turners.
It is great to see our people and the business being recognised for the progress we
have made.

15. NEW PROFIT TARGET
Having successfully met our FY24 target a year early, and remaining on track for our
FY25 $50m target, we have also updated our profit target to $65m NPBT by FY28.
Our FY25-FY28 growth is underpinned by the following key areas:
New branches, and more sales through these branches drives growth in Auto Retail.
Headwinds in finance will become tail winds and we’ll start growing the loan book in
a more material fashion.
Insurance growth will come from direct and digital distribution.
Credit will deliver growth as low pandemic level arrears return to a more long term
run rate level.
Like last year this gives some indication on what the growth pathway looks like which
we think is useful for shareholders.

16. POSITIONING OURSELVES FOR FUTURE GROWTH
We have talked previously about our level of confidence in our organic growth plan.
We are executing well and there is still plenty of runway for delivering on this plan.
We know the brand, systems, technology and people in Turners are a powerful combo
and we have been giving thought to adjacent opportunities to used cars for further
growth.
In the last month we have made two investments in companies that operate in
adjacent markets being Insurance and Vehicle servicing and repairs. Let me tell you a
little more about these now.

17. MY AUTO SHOP
We have recently purchased 50% of My Auto Shop a vehicle repair platform with more
than 300 MTA approved repairers, as well as a mobile repair offering from a fleet of
My Auto Shop branded mobile mechanics
Richard and Andy who started the business have done an impressive job of building a
strong customer proposition with nearly 3,000 4.9 star google reviews.
Vehicle servicing and repairs is a $3b business in NZ, and has been a gap in the Turners
offering. We buy and sell vehicles, we can insure and finance those vehicles too, and
now we can to offer to service and repair vehicles. The potential lifetime value of our
customers to us has increased substantially.”
The investment made strategic sense right across the Turners Automotive Group of
businesses. Vehicle repairs is a big business in NZ.
It is highly fragmented and this is an opportunity to help develop a provider of scale
in this market, delivering a significantly better customer experience. This fits well with
our mission to consolidate and scale right across the auto business, and to
significantly enhance the customer experience in the markets we operate in.

18. QUASHED
We have also made a strategic investment of $1 million in Quashed, which is an
innovative online insurance platform. Quashed allows consumers to easily compare,
shop and manage insurance policies from multiple insurers across motor, contents,
home, pet, and life insurance.
Insurance is something that everyone needs and is clearly complementary to our core
business of selling used cars.
We want Kiwi consumers to be protected and Quashed enables this through the
effortless comparison of a multitude of policies, pricing and features.
The fairness, ease and simplicity that Quashed brings to insurance is very aligned with
how we think about our own customer proposition.

As part of our investment we have a commercial agreement established between
Quashed and Turners for customer referrals.

19. WRAP UP
A couple of comments to wrap up.
This business has a very attractive yield.
Our track record speaks for itself and there is more to come.
The business has stood up incredibly well to the challenges of the economy, interest
rates and changing regulation. Our Auto Retail business has been a stand out
performer and we know our Finance division will start ramping up as interest rate
headwinds become tail winds.
We have a special culture in the Turners business. Very customer focused, highly
engaged and with 53% of our team owning shares this only super charges the “care”
factor.
Before I hand over to Todd I’d like to acknowledge the efforts of our team, from our
Board of Directors, through to our operational teams who deliver day in day out for
our customers, and for our shareholders. This group of people have been totally
committed, are always prepared to go above and beyond. We are very lucky to have
such a talented and hard working group of people in this business. I will now hand
over to Todd.
[HAND OVER TO TODD]

20.CEO’S PRESENTATION
Good morning everyone great to be with you all! Let me kick things off with a few
slides about what we are seeing in the used car market.

21.REGULATORY CHANGES DRIVING DROP IN USED CAR MARKET
I think I would use the words “bouncing along the bottom” to summarise the car
market at the moment. New cars being impacted in a material way as they tend to be
more discretionary. Overall used car volumes April to August this year are tracking
inline with last year which does support our position that used cars are a much more
resilient market. However I think the overall trend is that we see demand continue to
strengthen for lower value cars as the economy has deteriorated and consumers have
been impacted. They still need vehicles but are spending less because they can afford
less.

22.DEALER NUMBERS
The overall trend is clear in that there are significantly less registered dealers now
than there were 5 years ago. There tends to be a reasonable correlation between
dealer numbers and used imports coming into the country. Our expectation is that
these dealer numbers will continue to drop and that ultimately this is a business
where scale will win.

23.BUSINESS DIVISIONS

24. FY24 BY SEGMENT
FY24 was a great year with 3 out of 4 businesses showing material growth against
FY23 and Finance obviously being impacted by the interest rate environment.
We expect the composition of profits in FY25 to look somewhat different to this
picture with particularly Finance producing higher levels of profit as interest margins
start to expand again.

27.AUTO RETAIL
Our brand is strong, we have continued to improve the way we source vehicles, we
are driving efficiencies particularly in how quickly we can bring vehicles to sale and
then sell them, and opening more branches is critical to our continued success. To be
able to grow profits 130% over the last 5 years has been a phenomenal result.

28.BRANCH EXPANSION
We continue to expand our network through expanding existing operations or
opening in new territories.
We know the combination of the additional footprint we have committed to bring
additional opportunities to source vehicles, which will lead to additional sales.
What I would like you to understand though is that growing our unit sales and market
share is not just about opening in more places...it is about the brand investment we
have made, the sourcing we are doing, the operational improvements to increase the
speed of processing, the people we have doing an excellent job for our customers,
the investment in data and technology. We feel it is a very strong position for us and
one that is very difficult to replicate.

29.ENTERING A BUILD PHASE
Our pipeline of branch expansion projects is building really well. We have certainly
seen more opportunity come to market as interest rates and holding costs increase.
We have delivered Timaru and Napier during FY24 and FY25 is very much a build year
as we have a number of developments on the go.
Also Just a reminder that we now own 15 of our sites all on balance sheet at cost of
$115M.

30. PROPERTY UPDATE
This is a very exciting plan coming together in the Christchurch region. Our current
single branch in Christchurch will become 3 separate sites across the city
progressively over the next 18 months.
Shands Road we started work in August on the redevelopment of the building and
we should be completed in the next 6 months or so.
Moorhouse Ave we hope to start work on this project in the next few weeks and
should be finished in the middle of next year.
Wairakei Road we hope to start before the end of the year with construction
finishing Jul/August next year.
Tauranga Tauriko is a new commercial site where we will sell trucks and machinery
and operate our damaged vehicle business from. This is due for completion in the
next month and the development has gone very well.

37.FINANCE
We have weathered the interest rate shock in Oxford Finance, we have firmly and
resolutely focused on borrower quality and margin, and once market conditions
improve we will be back into growth mode. We are in a strong position given the
quality of the loan book and the controlled origination we get from Turners and our
direct channel. We expect to see FY25 profits materially ahead of FY24.

39.NET INTEREST MARGIN
NIM has stabilised and is starting to grow again and should gather pace as the Reserve
Bank does what it should do. Aaron and our finance team have done a great job of
managing our swap profiles and taking advantage of some dips in rates and we should
see NIM expand further in as the year develops.

40.QUALITY OF FINANCE
Quality continues to improve in the loan book and as you can see with the average
credit scores of loans originated in the H2 set a new high level and premium (super
prime) borrowers making up 56% of the loan book. In more recent months premium
borrower lending has been 60% of new originations.

41.QUALITY LENDING STRATEGY
It is no surprise that with our focus on bringing better quality borrowers into the loan
book our arrears levels have outperformed the broader market. The most recent
Centrix auto loan market arrears numbers were 6.3% with our consumer arrears
tracking at well less than half these rates.
We also continue to carry an additional economic uncertainty provision buffer of $2M
over and above BAU arrears provisioning.

42.INSURANCE RETURNS IMPROVING
Insurance is a well tuned business and our team have delivered excellent growth over
the last 5 years at 130%. Our distribution networks remain vitally important, but we
have laid the groundwork for a direct to consumer offer.
We have replaced our core insurance system on time and on budget in the last year
and put in place the building blocks for a direct to consumer offer which will target
the 50% of used cars bought and sold between private individuals.

44.INSURANCE RETURNS IMPROVING
Claims continue to be well managed. Claims cost inflation being offset by less frequent
claims. Managing claims ratios is also very much about your risk pricing and we have
introduced new layers of risk pricing over the last year to ensure we are pricing
correctly for the risk we are taking. More recently we are also seeing evidence that
claims inflation has peaked.

45.CREDIT MANAGEMENT
In Credit Management our business is recovering, the tightening economy is
supportive of growth and our payment bank is being rebuilt.
The debt value loaded is up 14% year on year and this has led to an increase in debt
collected as well.
NZ wide credit metrics continue to deteriorate and are now the worst they have been
in the last 7 years, which should see debt load levels increase over coming years.
47. CENTRIX DATA
This is data from credit bureau Centrix. More than 12% of NZ consumers are now in
arrears well above pre-pandemic levels. With the economic environment expected to
deteriorate further, we expect debt load levels to increase as a result.

49.FUNDING
Turners is a conservatively funded business. I think it is useful to think about what we
use funding for. We borrow for the finance book, buying property and buying
inventory to sell through the Auto retail business.
Things to note in funding are that we have brought in two additional funders one bank
Westpac and one non-bank ACC to bring further diversification and capacity. We are
geared in a conservative way and we have sufficient funding capacity to support our
committed branch expansion plans.

50. ADRIAN ORR
For those of you who watched the most recent MPS press conference you would have
seen an example of how pervasive Tina has become when Adrian Orr quoted Tina at
the end of his press conference....as Tina says the internet is everywhere!

52. SEGMENT OUTLOOK
A few comments about how the business has been trading in the first part of the year
and our outlook. FY25 is playing out largely as we had anticipated at the end of FY24.
In Auto Retail we are very focused on completing our new branch developments on
budget and on time. We will continue to push hard for the transition of wholesale to
retail and see upside coming from this strategy. Consumers are demanding lower
priced vehicles and an overall fall in demand is having the expected impact on
margins. This is exactly what we had anticipated. Overall sales volumes are tracking
ahead of FY24
In finance we are seeing the expected improved performance from Oxford in FY25 as
a result of lower than expected impairments and credit losses and improvements in
interest margin. We still think it is the right thing to maintain our credit discipline
given the downturn still has some time to play out.
In Insurance our Earned premium is holding up very well and claims ratios are stable.
And finally in Credit Management our payment bank is rebuilding as debt load
increases from the tightening economic conditions and the resultant impact on
consumer arrears.

53. OUTLOOK
Pleasingly despite the environment we are operating in we are expecting a record first
half performance with HY25 ahead of HY24.
We can also confirm that we are on track for exceeding the $50M NPBT goal by the
end of FY25. The obvious caveats remain in that there are still risks with the rate of
recovery in the overall economy and consumer demand.
I will now hand back to Grant for discussion in relation to the annual report or today’s
presentations.
[HAND BACK TO GRANT]

54.SHAREHOLDER DISCUSSION
Are the any questions on the presentation or results?
There will be an opportunity to ask questions about each resolution as they are put
to shareholders to vote.
If you have a question please feel free to direct it to any one of the panel up here.
Could you clearly state your name if you are a shareholder, or, if you are a proxy
holder or corporate representative, please state the interest you represent.

55.RESOLUTIONS
I would now like to move to the resolutions before the meeting. These were notified
in the Notice of Meeting and explanatory notes have been provided.
Voting on each of the resolutions in the Notice of meeting will be by way of poll.
Baker Tilly Staples Rodway, the company’s auditors, will act as scrutineers.
Please use the voting paper you used in the mail or were given when you registered
for this meeting,
If you do not have a voting paper, you will be able to request one from scrutineers
when the voting takes place.
Only shareholders, proxy holders or corporate representatives of a shareholder may
vote on today’s resolutions.

56.RESOLUTIONS
Resolution 1
The first resolution is to record the re-appointment of Staples Rodway as auditors of
the Company and authorise the directors to fix the auditor’s remuneration.
Are there any matters for discussion or questions from the floor?
I would like to move this motion. Do I have a seconder? Thank you.

Resolutions 2, 3 and 4: Re-election of Directors
The next two resolutions are in regards to director elections for Antony Vriens and
Alistair Petrie.
We believe that having Directors with relevant industry, commercial and governance
skills is essential for the continuing success of the Turners’ group. Diversity of thought
in particular and broader commercial acumen, are also taken into consideration by
the Board when reviewing Board positions.
We currently have Directors with hands on experience in the finance, insurance and
debt management sectors as well as Directors with expertise in governance and very
diverse experience and entrepreneurial skills in sales, digital marketing and
communications and business growth.
To make things run a little more efficiently I will ask Antony and Al to come up and
address the meeting in support of their election.
[Antony to address meeting]
Are there any questions for Antony
[Al to address meeting]
Are there any questions for Al
OK thanks for that everyone we will now deal with the specific resolutions...
Resolution 2 is in relation to the re-election of Antony Vriens who retires by rotation
and has offered himself for re-election. Are there any questions?
I would like to move this motion. Do I have a seconder? Thank you.
Resolution 3 is in relation to the re-election of Alistair Petrie who retires by rotation
and has offered himself for re-election. Are there any questions?
I would like to move this motion. Do I have a seconder? Thank you.

57. VOTING
Many shareholders, who are not attending this meeting have voted by proxy.
I wish to advise that proxies have been received for 22,096,871 shares representing
24.8% of total shares on issue.
Please complete your voting paper by ticking “FOR”, “AGAINST” , or “ABSTAIN” in the
appropriate place on the form and ensure you have signed the form. Please do not
tick the “DISCRETION” box.
If you have any difficulty, or do not have a voting paper, please raise your hand and
someone will assist you.
Once everyone has finished voting, scrutineers will collect the voting papers.
[3 minute pause]
Scrutineers will now collect the voting papers. Could shareholders please pass their
voting papers to the scrutineers?
The results of today’s voting will be posted to the NZX as soon as possible.

58.OTHER BUSINESS AND CLOSE OF MEETING
That brings the formal part of the meeting to a close.
Is there any other business shareholders would like to discuss in regards to today’s
presentations or Turners’ progress?
I therefore call the 2024 annual meeting of shareholders closed.
Thank you all for your attendance today.
I would like to invite you to join Board and management for refreshments.