Chair's Address and CEO Presentation to 2025 Annual Meeting

PO Box 6159
Wellington 6141
New Zealand
DX SP21009
Level 6
57 Courtenay Place
Te Aro
Wellington
Telephone: 04 384-9734
Email: cmc@colmotor.co.nz
Website: www.colmotor.co.nz



CHAIR’S ADDRESS TO THE 107
TH
ANNUAL MEETING


Ladies and Gentlemen,

I want to talk to you today about our 30 June 2025 year financial results, address
matters of governance, comment on an aspect of our market and cover the all-
important ‘people’ aspects of our business.

Financial Results
Under the prevailing circumstances, your Company performed well over the past year,
posting a trading profit after tax of $17.9 million on turnover of just over one billion
dollars.

Both turnover and profit after tax were slightly down on the prior year. This reflected
the challenging environment for all of our key market segments of light vehicles, heavy
trucks, and tractors. On the strength of this result, the Board felt confident in declaring
a full year dividend of 35 cents per share, which equated to 64% of that $17.9 million
trading profit after tax.

Yes, these results were well short of our stellar performance in the immediate post
Covid period, but for good reason. The New Zealand economy inevitably had to pay
the bills for that period, the country fell into negative growth and with a high-interest-
rate environment, our markets, indeed our business, was not immune to the flow-on
effects of that depressed economy.

We indicated at the time that monthly trading was “tough” in an over-supplied vehicle
market that came with a very high inventory carry and high interest rates. Make no
mistake, our trading world had changed significantly.

Your Management responded well to these challenges. The results of the last two
years have proven that having a strong balance sheet and being able to react quickly
meant we could address the cost of doing business at a grass roots level. This
enabled the Company to weather what will hopefully be the worst of New Zealand’s
economic storm. In his presentation, Alex will talk more about the road ahead and
other initiatives that have underpinned our resilient performance.

Governance
I would like to move on to some important governance matters.

Shareholders will have questions about the level of the proposed increase in the
Directors’ Fees and the related pool of funds we are asking you to support at this AGM.
Outwardly, it is a substantial increase that the requires an appropriately detailed
explanation.

It is very important we have an eye to the future structure of the Board. This requires
attention to the skills and experience that sit around the table and the culture of the
Board, which in my personal view is one of the best boards I have ever worked with.
There are changes coming over the next year or two that will see both myself and
Graeme Gibbons retire. The fact is, a very substantial amount of long-term industry
experience will transition off the Board by November 2028.

The Board therefore believed that introducing a third, highly experienced independent
director at an early stage will significantly assist with that transition. This brings with it
the inevitable cost of adding a non-executive director. As we move forward, a decision
will need to be made whether the Board stays at seven versus six directors. At this
point, we feel this is the right approach to assist in the transition over the next couple
of years at least.

From a purely practical aspect, we also have the cost effect of Stuart Gibbons moving
out of his management position but remaining as a Director. This has the effect of
needing to fund six non-executive directors, rather than only four, from the approved
pool of funds. As the now sole executive director, John Hutchinson does not receive
a directors’ fee.

To put this in perspective, funding the two additional non-executive director costs
account for 80% of the increase sought for approval by the resolution. The two-yearly
review of fees we traditionally carry out accounts for the balance of the increase.

We have followed the same process the Company has used for many years. We use
the independent, external Strategic Pay survey of directors’ fees for similar sized
companies in terms of number of people, market capitalisation and turnover. CMC
usually aligns to the midpoint of that survey and this year our recommendations are
approximately 90% of that midpoint, as the market has moved quite considerably.

The Board would appreciate your support for the resolution that will be put before you
later in the meeting.

CRD Reporting
The next governance matter I want to address is Climate Related Disclosures (CRD).
Many of you will have read the Climate Statement section of the Annual Report and
asked yourself “what is this all about and why are we producing it?”

Other affected boards have been asking the same question and the subject has
recently been in the media as a result of welcome changes to the CRD regime
announced by the responsible Minister, Scott Simpson.

First and foremost, we know our Shareholders want the Board and Management to
remain focused on the financial strength and performance of the Company. That
underpins the return you receive on your investment and is unashamedly our number
one priority when acting in the best interests of the Company.

We do however have the responsibility to ensure the Company meets all of its
reporting responsibilities in a changing and challenging regulatory and legislative
environment.

CMC has executed a comprehensive risk management process for many years. This
process has been the home of our considered analysis and view of any potential
climate risk, earthquake risk and possible severe weather risk. We have regularly
thought through these issues and done so well ahead of the CRD reporting
requirements.

The CRD regime was an extensive and mandated requirement for disclosure by
specified listed companies and others but it came without reference to providing real
value. It also forced potential and unnecessary liability on directors to ensure
adherence. It is therefore not surprising it has been revisited after consultation and its
requirement removed for many companies like CMC.

On behalf of the Board, I want to thank June Gibbons for the exemplary work she has
done in the CRD space. This has been a significant task that required a studied
commitment to detail in an evolving reporting environment. She has done the
Company a real service in this regard.

Strategic Direction
I will share some thoughts around our strategic market priorities. We have always felt
that ‘less is more’ when it comes to strategic direction. We never ‘bet the ranch’ on
major strategic initiatives, preferring always to build on the proven core capabilities we
have as a business. The JAC trucks initiative is a good example of this, where we
have used our skill set to enter a category of the market we did not previously compete
in (Light electric and diesel trucks).

There has been an interesting new shift in market dynamics going on in the New
Zealand vehicle market for some years now and we have joined it in a measured way.

The arrival of many new Chinese sourced brands and products in the light vehicle
market is a continuing ‘feeding frenzy’. These brands are all looking for property and
facility representation and make no mistake, many of these are very good products,
are value for money and the best will survive and thrive, but there will be casualties.
They cannot all survive in a small vehicle market like New Zealand.

We do have the JAC brand and a BYD dealership in New Plymouth but our exposure
is somewhat limited. The next five years are going to be very interesting in this space
and will continue to bring challenges to the industry. There is an air of certainty that
we will need to occupy a place in the Chinese sourced market. A second outcome
would be our existing brand partners continue to adapt, evolve and rise up to meet the
market’s evolution and the opportunities new technologies bring. Most likely both
scenarios will play out.

Our People
It is important to recognise the Dealer Principals who have left or are leaving us this
year. We often and quite rightly talk about our DPs as being the most important cog
in our organisational design.

The DP walks that challenging line of meeting the market share aspirations of the
brands they represent, the customer care requirements of those brands and the need
to return to CMC a necessary return on shareholder funds.

Over and above those three essentials, they lead our dealership teams in their local
communities in a public facing role.

We have been well served by many professional and successful DPs over a very long
period of time. Right now, we are going through a significant period of change, as
some of our long serving DPs move on to their well-deserved retirements.

In no particular order, I would like to thank Keith Allen, who worked his way up from
the parts department as a ‘junior’ to become the DP of Fagan Motors in Masterton.
Keith joined CMC in 1982 and enjoyed many years as a top performing dealer, winning
many annual performance awards for his rural dealership.

Another very successful rural dealer to retire this year was David Wills from Ruahine
Motors in Waipukurau. David has had a very long 32-year career in the industry,
spending 13 of those years at Ruahine Motors and he is another annual award winner
on many occasions. David continues to assist us by mentoring some of our new DPs.

In the Dealer world they don’t come much bigger in personality than the next one I
want to thank, John Luxton from Avon City Motors in Christchurch. John, or more
correctly Lux, seems to know everyone in New Zealand. At one of his farewell
functions (and he’s had a few) the story was told that he and John Hutchinson were in
Wellington at a meeting when the first Christchurch earthquake struck - they were
stranded but not for long. After a quick phone call from Lux, the two Johns were on a
private jet with the directors of Fulton Hogan bound for Christchurch.

John served CMC over 35 years, beginning in 1989 as Fleet Sales Manager at
Hutchinson Motors in Christchurch, then becoming the DP at Te Awamutu, then at
Invercargill and finally back to Christchurch - a significant contribution to our Group.

I mentioned earlier that Stuart Gibbons decided to step away from his management
role at the Group Office and remain a Director of the Company. Stu began his career
at CMC in Morrinsville as an apprentice technician and more recently was the DP at
Lower Hutt, then called Stevens Motors. Stu led the strategy and design phase of our
Wellington Region hub and spoke representation plan that saw Capital City Motors
established in Lower Hutt, with branches and service facilities now throughout
Wellington and the Kapiti Coast.

And finally, someone who is the quiet achiever who never seeks the limelight but has
done and continues to do a fantastic and highly professional job for CMC. Our GM
Finance, Paul Stevenson, will retire at the end of the year. Mr “never wrong with the
numbers” has been one of those hugely reliable and vitally important employees the
Company is fortunate to have had. On the Board’s behalf, I want to wish him well in
his retirement.


Outlook
To finish my address today, I want to provide a qualified comment on where the current
half year looks to be heading. I will then leave it to Alex to talk about our forward view
of the market generally, our related expectations for the Company in the next year and
the initiatives he is leading with his team to take the Company forward.

Suffice to say the Board is pleased with the results the Company posted in tough
times. In the event we may be starting to enjoy improving market conditions and
economic growth, we are well placed to capitalise on these.

The half year to date has been encouraging by starting on a positive note. What looks
to be an improving market will play out one way or other in the remaining two months
still to run of this first half of the financial year. It is too early to make a prediction or
provide an update that carries certainty, but unlike my address to last year’s annual
meeting, there do appear to be ‘green shoots’.


Ashley Waugh
Chair
The Colonial Motor Company Limited

7 November 2025

---

Report from the Group
Chief Executive
Alex Gibbons
107
th
Annual Meeting
7 November 2025

Game plan
1.Big picture new vehicle market overview
2.New cars
3.Used cars
4.Trucks & Truck Related Parts
5.Tractors & equipment
6.CMC trading outlook
7.June will discuss how Group Office supports dealerships
8.Sebastian (Seb) will discuss ongoing advancements in business intelligence and analytics
9.Video
10.Questions – general business

New Vehicle Market Complexity and Competition
CHINAUSAJAPANAUSTRALIA
NEW ZEALAND
1.4B people
155 brands
31M units
registered
200K
units/brand
340M people
38 brands
16M units
registered
420K
units/brand
27M people
74 brands
1.2M units
registered
16K
units/brand
5M people
60 brands
130K units
registered
2K
units/brand
124M people
49 brands
3.7M units
registered
76K
units/brand
Source: Deloitte Automotive (annual unit registrations)

New Vehicle Market (Registrations)
0
5000
10000
15000
20000
25000
Jan-19
Jun-19
Nov-19
Apr-20
Sept-20
Feb-21
Jul-21
Dec-21
May-22
Oct-22
Mar-23
Aug-23
Jan-24
Jun-24
Nov-24
Apr-25
Sept-25
NZ Total Registrations
0
10,000
20,000
30,000
40,000
50,000
NZ Registrations by Segment and Powertrain
BEV
Hybrid/PHEV
ICE
(petrol/diesel)
Passenger
SUV
Light Commercial
Source: MIA, 30 June 2025
Reduced
registration
volatility

New Car Market
•Flat market
•Increased competition
•Margin pressure
•Complex product mix
(EV, PHEV, ICE)
FY 2024/25Business Focus Outlook
•Gradual recovery
•New entrants will continue
to arrive
•Margin pressure
unchanged
•Complexity of the product
mix unchanged
•Customer service excellence
•Capitalise on new data and
analytics capabilities, including
AI
•Dealership management and
leadership programs
•Support franchise partners
•Monitor the market for new
opportunities

New Product
Ranger Super Duty
New CX5E-Transit rangeRanger Hybrid
Our brand partners
continue to announce and
deliver an array of new
vehicles for the New
Zealand Market. Just a few
examples are represented
here.

New Dealership: Manukau Autos
•Mitsubishi has a balanced model range with a core strength in the passenger/SUV segments.
•While early days, Manukau Autos has hit the ground running – well done to Jason and the Team.

Success Story: Group used car sales
In 2023 we set three objectives:
1.Improve the resilience, profitability
and capability within the used car
business.
2.Achieve growth through supporting
existing dealerships.
3.Ensure the used car business
remains complementary to new
vehicles.
All three objectives are being achieved

Used Car Market
•Variable market
•Reduced flow of Japanese
used imports driving an
increase in demand for locally
sourced used cars
•Small independent used
dealerships appear to be
finding life increasingly tough
FY 2024/25Business Focus Outlook
•Variable market
•No change in Japanese import
dynamics
•Large players competing for
locally sourced used inventory
•As new vehicle demand
improves segments of the
used market could soften
•Continue investing to develop
the resilience and scale of
operations
•Develop new digital tools to
drive used vehicle integration
and capability Group-wide
•Maintain balance to ensure
used cars continue to
complement new car
operations

Trucks & TRP (Truck Related Parts)
FY 2024/25Business Focus Outlook
•Challenging market
•New truck demand is
expected to remain subdued
•Lower interest rates and rising
consumer confidence will
eventually drive increased
freight volumes
•Lead the market by standing with
customers through all economic
conditions
•Reduce inventory ahead of the
introduction of new models
•Build the JAC light-duty-truck
opportunity now integrated into
Southpac and their service
network
•Grow the TRP brand and
business
•Declining market
•Lower freight volumes
delaying fleet replacements
•High inventory costsdue
tocarrying additional trucks to
support customers/business
through model changes

Tractors & Equipment
•Market in recovery
•Clearing inventory
•Cost pressure driving demand
towards lower specification
tractors
FY 2024/25Business Focus Outlook
•Improving market
•Increasing confidence within
the rural sector
•Continuation of demand for
lower specification tractors
•Concentrate on the core
heavy tractor business
•Continue investing in the
delivery of a first class
customer service both at
dealership and on-farm
•Integrate insights and
analytical tools developed
for the car business into
Agricentre

Outlook: Q1 FY 2025/26
Q1- Cautious optimism
•First quarter trading has resulted in a positive start to the new financial year, with trading
trending in the right direction.
•The market and economy remain patchy and the Company continues to observe a two tier
recovery between rural/metro markets.
•Lower interest rates and a degree of buoyancy in the agricultural sector can only be seen as a
positive sign for New Zealand.
•Cautious optimism, a good start but three quarters remain.

Supporting our Dealerships

Healthy
internal
competition
Carrots and
Sticks
Plain English
Respect
people’s time
Respect
people’s
expertise
Communicate
at different
levels of the
dealership
How we promote change in a decentralised business
Communicate
the why

Threads that bind dealerships together
The "CMC Way"
concept
GoSafe Health &
Safety Guide
Internal Audits
Comparatives
H&S Audits
Dealership
Management System
& IT Infrastructure
GoSafeH&S App
Leveraging AI
Clear Expectations
ReviewTools in common

Our analytics & reporting tools
Under present market conditions, it has never been more
important to understand our business and our customers.
CMC has developed industry leading comparative
reporting tools over the past three years to analysethe
performance of our automotive businesses.
This data is shared across our dealership group to
facilitate relevant and informed decision making.
Sebastian Black (CA)
Chief Financial Officer

Supporting our dealers
Our Dealer Principals sit in the drivers seat of their
businesses. Our aim is to ensure that they have
access to the best possible suite of tools for success.
The Benefits are Tangible
•Engagement and understanding has improved.
•New and Used vehicle departments have
increased salesvolumes.
•Workshop capacity has become an opportunity.
•Productivity per person has increased.
Data Analytics
External Industry Experts
Dealership Strategy
Planning
Departmental Manager
Training
Approach

Threads that bind dealerships together
The "CMC Way"
concept
GoSafe Health &
Safety Guide
Internal Audits
Comparatives
H&S Audits
Dealership
Management System &
IT Infrastructure
GoSafeH&S App
Leveraging AI
Clear Expectations
ReviewTools in common