Eclipx Group Limited 1H17 Results Presentation and Agreement to Acquire Grays ecommerce Group

Transcription

1 Eclipx Group Limited 1H17 Results Presentation and Agreement to Acquire Grays ecommerce Group 4 May 2017 Doc Klotz Chief Executive Officer and Managing Director Garry McLennan Deputy Chief Executive Officer and Chief Financial Officer

2 Legal Disclaimer This Presentation contains summary information about Eclipx Group Limited (Eclipx) and its subsidiaries and their activities. The information in this Presentation does not purport to be complete. It should be read in conjunction with Eclipx s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange, which are available at The information contained in this Presentation is not investment or financial product advice and has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision, investors should consider the appropriateness of the information having regard to their own investment objectives, financial situation and needs and seek independent professional advice appropriate to their jurisdiction and circumstances. To the extent permitted by law, no responsibility for any loss arising in any way from anyone acting or refraining from acting as a result of this information is accepted by Eclipx, any of its related bodies corporate or its Directors, officers, employees, professional advisors and agents (Related Parties). No representation or warranty, express or implied, is made by any person, including Eclipx and its Related Parties, as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this Presentation. An investment in Eclipx securities is subject to investment and other known and unknown risks, some of which are beyond the control of Eclipx or its Directors. Eclipx does not guarantee any particular rate of return or the performance of Eclipx securities. Past performance information given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. This Presentation contains certain forward looking statements with respect to the financial condition, results of operations and business of Eclipx and associated entities of Eclipx and certain plans and objectives of the management of Eclipx. Forward looking statements can be identified by the use of forward looking terminology, including, without limitation, the terms believes, estimates, anticipates, expects, predicts, intends, plans, goals, targets, aims, outlook, guidance, forecasts, may, will, would, could or should or, in each case, their negative or other variations or comparable terminology. These forward looking statements include all matters that are not historical facts. Such forward looking statements involve known and unknown risks, uncertainties and other factors which because of their nature may cause the actual results or performance of Eclipx to be materially different from the results or performance expressed or implied by such forward looking statements. Such forward looking statements are based on numerous assumptions regarding Eclipx s present and future business strategies and the political, regulatory and economic environment in which Eclipx will operate in the future, which may not be reasonable, and are not guarantees or predictions of future performance. No representation or warranty is made that any of these statements or forecasts (express or implied) will come to pass or that any forecast result will be achieved. Forward looking statements speak only as at the date of this Presentation and to the full extent permitted by law, Eclipx and its Related Parties disclaim any obligation or undertaking to release any updates or revisions to information to reflect any change in any of the information contained in this Presentation (including, but not limited to, any assumptions or expectations set out in this Presentation). Statutory profit is prepared in accordance with the Corporations Act 2001 and the Australian Accounting Standards, which comply with the International Financial Reporting Standards (IFRS). Underlying profit is categorised as non-ifrs financial information and therefore has been presented in compliance with Australian Securities and Investments Commission Regulatory Guide 230 Disclosing non-ifrs information, issued in December All figures in this Presentation are A$ unless stated otherwise and all market shares are estimates only. A number of figures, amounts, percentages, estimates, calculations of value and fractions are subject to the effect of rounding. Accordingly, the actual calculations of these figures may differ from figures set out in this Presentation.

3 Agenda 1. 1H17 Highlights and acquisition of Grays ecommerce Group 2. Group performance 3. Segment performance 4. Financial performance 5. Agreement to acquire Grays ecommerce Group 6. Strategy and outlook 7. Appendices

4 01 1H17 Highlights and agreement to acquire Grays ecommerce Group

5 1H17 Highlights 5 RESULTS $ million (unless stated) 1H16 1H17 Growth HIGHLIGHTS New Business Writings (NBW) 1 AUMOF 2 (closing) 406 1, ,113 13% 14% 1H17 NPATA of $31.2m, up 20% on 1H16 AUMOF increased $259m (14%) to $2.11bn whilst maintaining NPATA margins and high credit quality NBW increased 13% to $458m - reflects new account wins and growth across all segments VUMOF 3 (units) Net Operating Income (NOI) 92, , % 28% Vehicles financed or managed up 13%; now exceeds 104,000 vehicles Continued strength in used vehicle market supported by population growth in Australia and NZ Australia continues to deliver strong economic growth with commodity prices lifting, exports volumes rising and visitor arrivals at record highs NPATA 4 Cash EPS 5 (cents) ] ] % 9% Right2Drive increased number of hires in 1H17 by 88% across 20 branches; synergy realisation and integration of Onyx car rentals on track with the second half seasonally stronger than first half Cash EPS 11.8c, up 9.1% on 1H16. Fully franked final dividend of 7.50 cps paid on 7 July 2017 Dividend per share (cents)] ] % We re-iterate our FY17 guidance at 18% to 21% increase in NPATA over FY16 excluding any contribution from Grays ecommerce Group 1. NBW excludes sale and leaseback agreements totaling $14.1m in 1H16 and $8.7m in 1H17 2. AUMOF is assets under management or financed, includes balance sheet and principal and agency (P&A) funded assets 3. VUMOF is vehicles under management or financed, includes fleet managed vehicles which are not financed 4. NPATA is net profit after tax and tax adjusted add back of intangibles 5. Cash EPS is defined as each period's NPATA divided by the total weighted number of ordinary shares on issue for that period. Total shares on issue increased in FY16 and 1H17 due to take-up of Eclipx's dividend reinvestment plan and the issuance of shares for the acquisition of Right2Drive.

6 Grays ecommerce Group Transaction Overview 6 Transaction Overview GEG background Strategic rationale Eclipx agrees to acquire 100% of the shares in Grays Ecommerce Group (ASX: GEG, Grays) by way of a scheme of arrangement (rounded) Eclipx shares issued for every Grays share with Grays shareholders to own ~15.1% of ECX post acquisition 1 Implies a transaction value of $178.9m 2, equivalent to a Pro Forma acquisition FY17E (Jun) PE of 9.7x 3 Grays' Board has unanimously recommended the transaction and Caledonia (Private) Investments Pty Limited, which, with its associates, has a relevant interest at the date of this announcement in 18,399,533 Grays shares (14.43%), intends to vote the shares in favour of the proposed Scheme, in the absence of a superior proposal and subject to the independent expert concluding (and continuing to conclude) that the Scheme is in the best interests of Grays shareholders. Grays is made up of four operating businesses: Plant & Equipment Auction: Australia's largest online plant and equipment marketplace Auto Auction: rapidly growing online auto auction marketplace targeting consumers GraysWine: online and telesales wine auction business Other Consumer: includes jewellery, furniture, art, outdoor; currently being rationalised Grays had a cost to income ratio of ~86% (FY16A) and announced an operational restructure in February 2017 to rationalise its least profitable consumer businesses Eclipx intends to grow Plant & Equipment Auction and Auto Auction (collectively expected to represent almost 90% of FY18 (Sep) net revenue), restructure and monetise certain consumer segments and significantly reduce corporate overheads by leveraging Eclipx infrastructure Diversifies Eclipx earnings into a complementary high growth and capital light adjacency Opportunity to cross-sell Eclipx finance and/or insurance products to Grays' auto and commercial equipment purchasers Adds proprietary online vehicle and commercial equipment disposal channel and competencies to further enhance Eclipx's residual value outcomes Leverage Grays' 750,000 active users to enhance growth for Right2Drive, CarLoans.com.au and Eclipx's other consumer and digital brands Eclipx is targeting $20m full run-rate synergies (anticipated to be achieved within months). The transaction is targeted to be high single digit percentage EPS accretive for Eclipx shareholders at full-run rate synergies. Grays is targeted to deliver approximately $23 25m EBITDA in FY18 (Sep). This includes phasing of 70-80% of run-rate synergies in FY18 (Sep) 1. Based on 128,787,043 ordinary shares on issue in Grays on a fully diluted basis (which assumes the vesting and exercise of 1,309,732 performance rights) and Eclipx issuing 47,083,121 shares to Grays shareholders and 265,300,492 Eclipx ordinary shares on issue as at the date of this announcement 2. Transaction value calculated as 47,083,121 Eclipx shares multiplied by Eclipx's adjusted last closing share price (closing Eclipx share price on 3 May 2017 of $3.80. Eclipx shares issued to Grays shareholders will not be entitled to receive Eclipx's interim 1H17 dividend of 7.5 cents per share 3. Based on an illustrative FY17E (Jun) Pro Forma NPATA ($18.5 million) for Grays, which includes targeted full run-rate pre-tax synergies of $20 million per annum. This is an illustrative earnings figure that also assumes the full Grays restructure had occurred as at 1 July 2016

7 What is Grays ecommerce Group? 7 One of Australia's largest online marketplaces Business to Business (B2B) Business to Consumer (B2C) #1 online auctioneer nationally, #18 globally by traffic, servicing enterprise, SME, government, finance and resource industries Specialising in valuation and sale of industrial and commercial assets, plant & equipment and vehicles FY16 gross sales A$483m 1 A leading online marketplace Servicing consumer categories such as wine, hardware, whitegoods, homewares, jewellery, consumer electronic and peripherals FY16 gross sales A$84m 1 Leading online marketplace for Australian businesses and consumers in FY16 $567m FY16 Sales 38.5m Visitors 4.3m Auction bids 750,000 Active users 1. GEG market announcement

8 Grays' strategic fit with Eclipx 8 Distribute Eclipx Finance and Insurance products to Grays' auto purchasers Grays is rapidly growing auto sales 7k 11k 19k 29k providing a new distribution channel for Eclipx F&I products FY14 FY15 FY16 FY17E Optimise disposal of Eclipx's end of lease vehicles Grays auctions vehicles to consumers online, attracting retail prices/margins providing an additional high-margin platform to sell Eclipx's end of lease vehicles Proven success Distribute Eclipx financing products to Grays' commercial equipment purchasers Grays sells ~$350m non-auto equipment p.a. allowing Eclipx to leverage its equipment finance expertise Continued growth of R2D (and other consumer brands) leveraging Grays' customer base Grays has active consumer database of over 750,000 and a national physical presence presenting cross-promotion opportunities and capacity to accelerate R2D branch expansion

9 02 Group performance

10 Eclipx continues to grow all its segments and diversify earnings 10 HIGHLIGHTS 14% growth in AUMOF to $2.1bn has been achieved whilst delivering a 20% growth in NPATA to $31.2m Strong asset growth (23%) and profit growth (115%) in the Consumer segment reflects significant expansion by CarLoans and Right2Drive in their market segments and are a positive reflection of the group s diversification strategy $144m (10%) growth in Commercial (AU & NZ) Fleet Assets and 6.6% growth in NPATA is a result of significant growth in fleet market-share in Australia and New Zealand despite competitive conditions Increased scale in AU and NZ Commercial has delivered improved operating leverage in fleet and NPATA growth of 6% and 8% respectively $ million $ million 1H16 Actual 1H16 Actual 1H17 Actual NPATA 1H17 Actual Growth pcp AU Commercial 953 1, % NZ Commercial % AU Consumer % Eclipx 1,854 2, % Growth pcp AU Commercial % NZ Commercial % AU Consumer % Eclipx % NPATA/Avg AUMOF % 3.01% 1. Average AUD/NZD exchange rate 1H and 1H , Spot AUD/NZD exchange rate 1H and 1H NPATA / Avg AUMOF is NPATA divided by the average Assets Under Management or Financed for the respective period

11 New customer wins have positioned Eclipx for growth 11 1 New account wins create a strong sales pipeline and future Highlights 2 AUMOF growth Significant new account wins in a competitive operating environment over last two years driving continued AUMOF growth in 1H17 Impact of FY15 & FY16 new account wins on AUMOF New business wins from new and existing customers underpin future years receivables and revenue growth Forecast AUMOF 70% of net operating income is realised throughout the life of a lease providing confidence in future years earnings Operating leverage and increased scale will enable supply chain improvements and delivers on acquisition synergies 32 3 Resulting in above market growth in New Business 4 1 Which builds scale and enhances operating leverage H15A 1H16A 1H17A 1H18F Closing AUMOF ($m) 229 NBW ($m) New Business Writngs ($m) AUMOF ($m) CAGR +13% 458 CAGR +12% ,675 1,854 2,113 1H15 1H16 1H17 1H15 1H16 1H17 1. NBW excludes sale and leaseback agreements totaling $39.8m in 1H15, $14.1m in 1H16 and $8.7m in 1H17

12 AUMOF growth and revenue diversification drives NPATA increase 12 1 NOI increases driven by AUMOF growth 2 increased consumer revenue AUMOF & NOI ($m) Consumer NOI ($m) 90.0 NOI Growth +28% Growth 127% ,854 2,113 1H16 1H AUMOF ($m) Net Operating Income 3 and increased profit on used vehicles 4 delivers a 20% increase in NPATA 1H16 1H17 End of Lease Profit ($m) NPATA ($m) Growth +15% 17.4 Growth +20% H16 1H17 1H16 1H17

13 03 Segment performance

14 Overview of segments 14 Australia Commercial New Zealand Commercial Australia Consumer Description Vehicle leasing and management Commercial equipment finance Vehicle fleet leasing and management Used vehicle retail sales Online consumer vehicle finance Consumer novated leasing Vehicle rental replacement to eligible 'not at fault' drivers Operating lease Operating lease Secured loan (against vehicle) Product offering Finance lease Finance lease Novated lease Fleet management/value-added services Fleet management/value-added services Medium term car rental Telematics/FBT management Used vehicle retail sales Brands Total VUMOF: 51,736 Total VUMOF: 30,254 Total VUMOF: 22,270 VUMOF as at 31-Mar-17 (50% of Eclipx's VUMOF) (29% of Eclipx's VUMOF) (21% of Eclipx's VUMOF) - Funded Fleet: 33,031 - Funded Fleet: 17,778 - Funded Fleet: 22,270 - Managed Fleet: 18,705 - Managed Fleet: 12,476 - Managed Fleet: nil 1H17 NBW $215m (11% Growth pcp) $93m (8% Growth pcp) $150m (19% Growth pcp) 1H17 Closing AUMOF $1,058m (11% Growth pcp) $445m (10% Growth pcp) $609m (23% Growth pcp) 1H17 NOI $58.8m (5% Growth pcp) $21.2m (15% Growth pcp) $35.0m (127% Growth pcp) 1H17 NPATA $18.9m (6% Growth pcp) $5.4m (8% Growth pcp) $6.9m (116% Growth pcp)

15 Australia Commercial 15 New account wins underpin a 11% growth in NBW Comments 6% NPATA growth and profit margin maintained from: 11% growth in AUMOF and new business writings from pipeline of new account wins in Government and corporate segments. ECX is leveraging it s key competitive differentiators in telematics and medium/heavy commercial vehicle expertise NOI margin reflects ECX winning an increased share of lower yielding Government and high credit quality corporate business against a competitive backdrop Increased end of lease revenue per vehicle achieved from further improvements in end of lease sales results Marginal increase in overheads due to recruitment of additional sales and relationship executives The significant growth of the book continues to reduce the age of the fleet where depreciation expense in the early part of a lease exceeds the amount allocated from the monthly rental. This situation reverses in the latter half of a lease. (refer Appendix 3) New business growth in Commercial Equipment Finance reflects asset wins in health, education, legal and financial services segments $ million 1H16 Actual H17 Actual AU Commercial - AUMOF & NPATA ($m) ,058 Grow th pcp New Business Writings - Fleet % New Business Writings - Equipment % New Business Writings % AUMOF (closing) 953 1,058 11% VUMOF (units) 44,668 51,736 16% NOI % NPATA % NOI/Avg AUMOF 11.9% 11.3% NPATA/Avg AUMOF 3.8% 3.6% Outlook Continued strong growth in AUMOF, competitive advantage in funding supported by sale of ancillary products including Telematics Investments in technology and process improvement is expected to underpin greater customer satisfaction and further operating cost efficiencies 1H16 AUMOF (closing) 1. NBW excludes sale and leaseback agreements totaling $14.1m in 1H16 and $8.7m in 1H17 1H17 NPATA

16 New Zealand Commercial 16 Strong growth in New Zealand fleet business Comments 8% NPATA growth from: Eclipx has established a leadership position in NZ fleet market whist delivering a 10% growth in AUMOF and maintaining NOI margin Online origination platform to 125 franchised motor vehicle dealers across a range of brands Recent Kaikoura earthquake impacted delivery of some new vehicle orders Continued favourable conditions in 2 nd hand car market with improved distribution and end of lease vehicle sales $ million (AUD) 1H16 Actual 1H17 Actual New Zealand - AUMOF & NPATA ($m) Grow th pcp New Business Writings % AUMOF (closing) % VUMOF (units) 29,325 30,254 3% NOI % NPATA % NOI/Avg AUMOF 9.5% 9.5% NPATA/Avg AUMOF 2.6% 2.4% Outlook Expect continued new business growth from new origination channels leveraging online quotation and credit approval technology Growth in cross-sell of ancillary products including Telematics is expected to support continued growth in Net Operating Income in FY H16 1H17 AUMOF (closing) NPATA 1. Average AUD/NZD exchange rate 1H and 1H , Spot AUD/NZD exchange rate 1H and 1H

17 Australia Consumer 17 Significant market opportunities for Eclipx Comments 116% increase in NPATA to $6.9m due to: Right2Drive (R2D) delivers a 88% increase in vehicle hires pcp driven by increased promotional activity and expansion of the R2D branch network (20 Branches across Australia and NZ) Right2Drive Net Promoter score measured at 85 for 1H17 Successful integration of Onyx car rentals into Right2Drive with performance exceeding acquisition metrics CarLoans increasing its NPATA from: Significantly increasing in New Business Writings by 33% as a result of increasing the number of lead source channels from 4 to 12 Lowering the average cost of acquisition by upgraded search engine marketing optimisation Increasing settlement conversion rate by 48% pcp Significant new novated wins for FleetPartners and FleetPlus driving a 16% increase in new business writings $ million 1H16 Actual 1H17 Actual Grow th pcp New Business Writings % AUMOF (closing) % VUMOF (units) 18,362 22,270 21% NOI % NPATA % NOI/Avg AUMOF 6.3% 11.9% NPATA/Avg AUMOF 1.3% 2.4% Outlook Expansion of R2D branch network planned during 2H17 Launch new car buying service to drive increased cross-sell of finance and insurance products and deliver increased value for our customers Continue to increase cross-sell of consumer products into our existing commercial customer base

18 04 Financial Performance

19 Delivering on our guidance 19 Highlights 20% growth in NPATA to $31.2m exceeding market guidance due to strong performance in Fleet and recent acquisition of Right2Drive 30% increase in net operating income before end of lease and impairment reflects continued growth in fleet assets together with strong growth in diversified consumer businesses (CarLoans.com.au and Right2Drive) 15% increase in end of lease income is positive re-affirmation of the Group s multichannel disposal capability Amortisation of intangibles - intangible assets ($2.3m) and software ($1.3m) Eclipx has increased NOI and NPATA margins by diversifying its revenue streams whilst increasing its share of high credit quality, lower yielding corporate and government business Increase in overheads reflects costs relating to Right2Drive together with increased investments in the Right2Drive branch network and recruitment of additional fleet sales and relationship executives Outlook Strong new business pipeline from new Fleet customer wins in FY15-16 together with the Right2Drive car rental acquisition and strong growth in CarLoans provides ongoing growth opportunities across the Group Launch of new Georgie car buying service expected to create increased financing and insurance opportunities for CarLoans.com.au Increased penetration of insurance and telematics in Fleet delivers superior value to customers enhancing margins and improving customer retention Technology investments and scale efficiencies to deliver further cost/income reductions $ million 1H16 1H17 Net operating income before EOL and impairment End of lease income (EOL) Net operating income before impairment Impairment (1.6) (1.9) Net operating income Total operating expenses (49.5) (66.9) PBITA before significant items Restructure costs 2 (1.8) (0.3) PBITA Interest on corporate debt (3.6) (4.1) PBTA Amortisation of intangible assets (2.5) (3.6) PBT Tax expense (9.6) (11.6) NPAT Amortisation and impairment of intangible assets (post-tax) Restructure costs (post-tax) NPATA New Business Writings Closing AUMOF 1,854 2,113 NOI/Avg AUMOF 9.9% 11.1% Cost/Income 55.0% 58.2% NPATA/Avg AUMOF 2.9% 3.0% 1. End of lease income includes 207 impaired vehicles sold in 1H17 for more than their provision where Eclipx held $0.5m of impairment provisions as at 30 September The net benefit to end of lease income was $0.5m. Provisions are held at an individual vehicle level and write-backs are matched to specific vehicle losses. 2. Restructure costs consist of exceptional non-recurring items not reflecting ongoing operations 3. NBW excludes sale and leaseback agreements totaling $14.1m in 1H16 and $8.7m in 1H17

20 Strong asset and credit quality 20 Continuous improvement in risk analytics Credit impairment has remained low during 1H17 supported by growth in Government and large Corporate business 90+ day arrears is 15 bps of on-balance sheet lease receivables as at 31 March no material increase over historical trends Significantly diverse customer exposure Credit approval is independent of the sales teams Residual value management Used car prices maintained over the long term despite the reduction in import tariffs on new cars Fleet is diversified across manufacturer and vehicle type Statistical models using 29 years of operating experience in Australia and New Zealand to set residual values on operating leases Full market valuations are undertaken monthly on the complete operating lease portfolio against third party sales and valuation databases Disposal trends are monitored on an ongoing basis for end of lease disposal optimisation Residual value setting is independent of the sales teams

21 Significant cash resources available for future growth 21 Highlights cash flow $37m increase in net corporate debt was used to: Acquire Onyx car rentals on 15 th November 2016 ($9.1m) Invest in the expansion of the R2D branch network and the accompanying growth in R2D receivables ($16.3m) Support the growth in lease assets as customer receipts are received and are awaiting distribution to ECX funders ($12.5m) $6.8m in capex was invested into customer portals, fleet systems and acquisition related costs Dividend payment of $15.4m was paid on 20 January 2017 after adjusting for the dividend re-investment plan $ million 30-Sep Mar-17 Assets Cash and cash equivalents Restricted cash and cash equivalents Trade and other receivables Leases 1, ,422.1 Inventory, PP&E and other assets Intangibles Total assets 2, ,375.7 Liabilities Trade and other liabilities Borrowings 1, ,526.9 Other liabilities Total liabilities 1, ,701.9 Net assets Highlights balance sheet Eclipx has continued to experience strong growth in warehouse funded leases to $1.42bn Balance sheet assets now total $2.376bn with net assets of $673m 1. Corporate debt is net of $64m invested into warehouse notes by Eclipx as at 31 March Includes customer payments transferred to restricted cash pending future vehicle servicing and distribution to investors in ECX warehouse funding vehicles 3. Includes movement in working capital, non-cash items and credit support invested into lease receivables

22 Diversified funding profile 22 Funding Summary 31-Mar-17 $ million Drawn Undrawn Total Eclipx-funded (warehouse facilities) 1, ,225 Eclipx-funded (asset-backed security) Total (ex. P&A) 1, ,512 Third-party funded Total (inc. P&A) 2, ,275 Corporate debt Total 2, ,575 Highlights Most diverse and competitive funding platform in the market which leverages warehouses, ABS and third-party funders to provide earnings visibility and predictability Eclipx has re-positioned its funding to facilitate potential changes from APS 120 in 2018 including diversifying lower rated financing from major trading banks to non-bank financiers Successful $330m ABS issue completed in December 2016 Increased corporate facility to $300m and increased tenor to 3/5 years completed in 2016 providing capital for growth Eclipx-funded (warehouse facilities) 44% Borrowings as at 31-Mar-17 Eclipx-funded (asset-backed security) 13% Third-party funded 33% Outlook New ABS market issue being considered in NZ subject to market conditions Eclipx has $350m in available financing resources for growth including unrestricted cash ($66m) and undrawn committed facilities ($284m) available from banks together with Principal and Agency funding agreements with 20 financiers Eclipx has access to diverse range of funding options which provides funding certainty, headroom for growth and a clear point of differentiation Corporate debt 10%

23 05 Agreement to acquire Grays ecommerce Group

24 What is the revenue model of Grays? 24 Grays sources vendors and buyers. and earns a margin on sales volume Corporations SMEs Government Consumers to buy and sell a diverse range of products Leading online platform/marketplace Capital light business model MANUFACTURING & ENGINEERING MINING FY16A (Jun) GEG results Volume ~A$567m AUTOMOTIVE CIVIL & CONSTRUCTION Margin Revenue ~18% ~$102m AGRICULTURE TRANSPORT Cost-to-income % ~86% FORKLIFTS, WAREHOUSING & LOGISTICS AVIATION & MARINE EBITDA ~$14.3m

25 Grays plant and equipment auction overview 25 Overview FY16 (Jun) gross sales of $349m Largest online auction marketplace in the Asia Pacific region for used plant and equipment Provides auction, valuation and project management services for corporates, SMEs, government agencies, insolvency practitioners and banks Specialising in the efficient valuation and sale of industrial and commercial assets, plant & equipment Strategic attraction High growth, profitable standalone Delivers ECX new opportunities to finance plant and equipment for corporates and SMEs Leverage large customer base and branch locations (e.g. Right2Drive) 60+ industry categories (unmatched by competitors) MANUFACTURING & ENGINEERING AGRICULTURE FORKLIFTS, WAREHOUSING & LOGISTICS CIVIL & CONSTRUCTION TRANSPORT AVIATION & MARINE Significant national presence across 40 locations in Australia and NZ

26 Grays auto auction overview 26 Overview FY16 (Jun) gross sales of $134m Focus on $8,000 - $15,000 segment Vehicles sourced from car dealerships, finance companies, direct corporates and government entities Rapidly growing - over 13,500 vehicles sold in 1H FY17 with approx. 29,000 vehicles expected to be sold in FY17 Investing in new yards, people and technology Online platform Strategic attraction Rapidly growing auto sales Additional channel to market finance, insurance and warranty products to both successful auto purchasers and under-bidders Improving awareness and online user experience Complementary channel to ECX's existing vehicle disposal channels 7k 11k 19k 29k FY14 FY15 FY16 FY17E

27 Existing ECX division New ECX division What is Eclipx s strategy for Grays? 27 Current GEG GEG under ECX ownership Significant cost base supporting existing auction-based product set with low economies of scale and public company infrastructure #1 REORGANISE #2 OPTIMISE B2B Auto Auction Plant & Equipment Auction (non-auto) Plant and Equipment Auction Plant & Equipment Auction (non-auto) Core Home (AV/IT) GROW / FOCUS GROW Wine Auto Auction GROW / MONETISE B2C Core Home (AV/IT) Consumer Wine MONETISE Non-Core Home (other) Non-Core Home RATIONALISE Corporate High cost base Corporate Combined head office of GEG and ECX RATIONALISE / ELIMINATE

28 Eclipx unlocks value in Grays for all shareholders 28 Illustrative Pro Forma FY2017 (Jun) earnings bridge 1 Total run-rate synergies targeted within months. Includes ECX revenue synergies, elimination of ECX/GEG duplicated costs and restructuring benefits Non-core B2C run-down (1.8) Based on $179m acquisition value 2, implies Pro Forma transaction FY17E P/E of 9.7x 3 (7.9) Synergies Targeting total run-rate synergies of c.$20 million p.a. Full run-rate synergies targeted to be achieved within 12 to 24 months post completion Eclipx management team have a detailed implementation plan to execute on delivering the targeted synergies. The implementation plan and quantum of targeted synergies have been independently reviewed 14.4 (6.1) 18.5 Guidance Eclipx is targeting approximately $23 25m EBITDA from Grays in FY18 (Sep), under Eclipx ownership This includes phasing of 70-80% of run-rate synergies in FY18 (Sep) Financial impact FY17E (Jun) GEG guidance EBITDA Discontinued revenue from restructured B2C Total synergies (excl. oneoff costs) FY17E (Jun) Run-rate Pro Forma EBITDA Depreciation and net interest Income tax FY17E (Jun) Run-rate Pro Forma NPATA Targeting high single digit percentage EPS accretion for Eclipx shareholders at realisation of full run-rate synergies Implied transaction value of $179m 2 is equivalent to a Pro Forma acquisition FY17 (Jun) PE of 9.7x 3 1. Bridge reflects illustrative Grays FY17E (Jun) earnings as though full Grays restructure had occurred as at 1 July 2016 and full run-rate synergies from 1 July Transaction value calculated as 47,083,121 Eclipx shares multiplied by Eclipx's last closing share price on 3 May 2017 of $ Based on an illustrative FY17E (Jun) Pro Forma NPATA ($18.5 million) for Grays, which includes targeted full run-rate pre-tax synergies of $20 million per annum. This is an illustrative earnings figure that also assumes the full Grays restructure had occurred as at 1 July 2016

29 06 Strategy and outlook

30 ECX Strategy 30 STRATEGY ACHIEVEMENTS Grow our presence in fleet Significant new account wins will continue to underpin future growth as newly won customers transition to ECX Diversification into Government and highly rated Corporate sectors Continue to build sales and distribution resources Grow our presence in the consumer market Expand online presence in vehicle procurement, distribution, financing and insurance Expand presence in vehicle rental market with specific focus on the accident replacement segment Leverage funding expertise to create competitive advantage New specialised funding facilities for Government and Large Corporates Securitisation bond issues diversify funding, lower costs and reduce capital requirements Clean Energy Funding provides competitive advantage in pricing lower emission vehicles Utilise technology and scale efficiencies and cross sell to increase revenue Diversify into adjacent markets Use Telematics to build a competitive advantage in real time fleet analytics and vehicle cost management Continued diversification of end of lease disposal and re-leasing channels Leverage scale to support cost efficiencies and supply chain improvements Commercial equipment finance Consumer motor vehicle finance Medium term car rental Proposed Grays ecommerce Group acquisition Expansion of the Group s digital asset base

31 ECX Outlook 31 Continued growth in adjacencies and new products Continued development of in-car telematics and analytics to provide increased value to customers including driver workplace safety monitoring, improved fleet management and lower fleet costs to our customers. This has proven to be a key competitive differentiator for Eclipx. Continued focus on growth in Consumer segment with innovative financing and insurance offerings Leverage Eclipx digital assets and capabilities to develop best in class customer solutions Strong growth trajectory in FY17 Despite ongoing competition in fleet, Eclipx expects to continue increasing its Assets Under Management or Financed supported by a growing pipeline of new business Strength in the used car market expected to underpin stable end of lease profits in FY17 CarLoans and Right2Drive are expected to deliver strong growth in the Consumer segment in FY17 We will continue to update the market on the progress of the Grays ecommerce Group transaction Financial guidance Reaffirm guidance of between $65.5m and $67m FY17 NPATA, an increase of 18 21% on FY16 excluding any contribution from Grays

32 07 Appendices

33 Appendix 1 Consolidated income statement 33 $ million 1H16 1H17 Net operating income before end of lease income and impairment End of lease income Net operating income before impairment charges Fleet impairment Credit impairment (1.6) (1.9) Net operating income Employee benefits expense (34.0) (44.6) Occupancy expense (3.0) (4.5) Technology expense (3.2) (4.8) Depreciation expense (1.2) (2.0) Other operating expenses (8.1) (11.1) Total operating expenses (49.5) (66.9) PBITA before significant items Restructure costs 1 (1.8) (0.3) PBITA Interest on corporate debt (3.6) (4.1) PBTA Amortisation of intangible assets (2.5) (3.6) PBT Tax expense (9.6) (11.6) NPAT Amortisation and impairment of intangible assets (post-tax) Restructure costs (post-tax) NPATA Restructure costs consist of exceptional non-recurring items not reflecting ongoing operations

34 Appendix 2 Consolidated balance sheet 34 $ million 30-Sep Mar-17 Cash and cash equivalents Restricted cash and cash equivalents Trade and other receivables Finance leases Inventory - motor vehicles Operating leases reported as property, plant and equipment Total current assets Property, plant and equipment Operating leases reported as property, plant and equipment Deferred tax assets Intangibles Finance leases Total non-current assets 1, ,691.9 Total assets 2, ,375.7 Trade and other liabilities Borrowings Derivative financial instruments Provisions Total current liabilities Trade and other liabilities Borrowings 1, ,219.3 Provisions Deferred tax liabilities Derivative financial instruments Total non-current liabilities 1, ,274.4 Total liabilities 1, ,701.9 Net assets Contributed equity Reserves Retained earnings Total equity

35 Appendix 3 Illustrative example of operating lease net depreciation 35 Continuous improvement in risk analytics The net depreciation line in the Eclipx P&L relates to operating leases and consists of two elements: Principal recovery - the principal component of the finance repayment received from the customer amortising using the customer interest rate Depreciation expense the depreciation of the asset from the initial financed amount down to the residual value over the contractual term of the lease using the straight-line deprecation method As illustrated in the adjacent chart the net impact to the P&L in the 1st half of the term is negative as depreciation expense is greater than the principal recovered, in the 2nd half of the term this reverses to be positive This is a timing difference and is P&L neutral over the contractual life of a lease This effect has implications at a portfolio level: If the portfolio is growing (new business writings exceeds run-off) the portfolio on a weighted average basis is less seasoned and net depreciation will be negative (left side of chart) If the portfolio is declining (new business writings are insufficient to replace the run-off) the portfolio on a weighted average basis is more seasoned and net depreciation will be positive (right side of chart) The above illustrative example is based on the following assumptions: 7% customer interest rate $40,000 financed amount 48 month term Principal recovery exceeds depreciation expense $15,000 residual value Depreciation expense exceeds principal recovery

36