1

James Mullins

Finance Director

Contents

Background and experiences Developing Cambria The FD role and business complexity Driving Cambria

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James Mullins – CV

Manchester University, BA in Accounting and Finance Chartered Accountant (ACA) in 2001 Joint Insolvency Examination Board (JIEB) exams in 2005 8 years Grant Thornton in the automotive service team. Including Audit,

CF, Restructuring, Secondment at FCE Cambria May 2007 to date

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Experiences and lessons learned

Audit – learning the trade, entrepreneurs, development, controls Corporate Finance – business plans, cash flow modelling, raising finance, stakeholder

management, advisory, due diligence, disposals, acquisitions, MBO’s Captive Finance house – secured lending, external stakeholders views on businesses,

internal workings at OEM Restructuring – cashflow, cost reduction, banking covenants, options assessment Stakeholder advisory – managing agendas and personalities, presenting options and

recommendations Accelerated M&A – value preservation, risk management, stakeholder management Insolvency – security structures and pecking order, technical requirements, mechanics of

insolvency, risks of buying businesses from insolvency Growing and developing a business – Acquisition, Integration, Operation AIM listing - Equity markets, process and perspectives

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Developing Cambria

27 Dealerships 42 Franchises 17 Brand partners 9 Acquisitions completed

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Our Strategy

To establish geographic regions with Primary Manufacturer Brand Partners representing minimum of three, maximum of 10 locations with the exception of ultra luxury partners

To grow organically through brand extension and self-financed acquisition to create a £1 billion turnover Group

Regional structure with stand alone autonomous dealerships able to make locally based entrepreneurial decisions - no Head Office

Each region to have the capacity to be developed into £200m turnover business in the medium term

Balanced brand portfolio. Currently: Volume 55%; Premium and Luxury 40%; Motorcycle 5%

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Group development July 2006 – April 2013

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3 Franchises 1 Franchise 15 Franchises 4 Franchises 4 Franchises 4 Franchises 2 Franchises 4 Franchises 2 Franchises 2 Franchises 3 Franchises2 Locations 1 Location 11 Locations 4 Locations 0 Additional sites 4 Locations 1 Location 2 Locations 1 Location 1 Location 1 Location

Mar-11

Addition of 1 Site and 2 franchises

August 08- September 09

Addition of franchises

Oct-09

Acquisition of 4 dealerships from

Insolvency

Feb-10

Acquisition of D&F Trading Ltd

Jan-08

Acquisition of 4 dealerships from

Insolvency

Dec-09

Acquisition of 1 dealership from

Insolvency

Jan-13

Addition of 1 Site and 3 franchises

Jul-06

Acquisition of Swindon

Aug-07

Acquisition of Thoranmart Ltd

Dec-07

Acquisition of Summit Auto

Group

September 11- March 12

Addition of 1 Site and 2 franchises

Combined Losses pre acquisition c.£9.9mTotal Invested in acquisitions at completion inc property £34.5mTotal Goodwill paid £346kTotal Share Capital raised £10.8m

Buy-and-Build

Acquisition

IntegrationOperation

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Buy-and-Build

Acquisition• Balanced brand portfolio• Primary brand partners• Retained the focus on underperforming assets

with turnaround opportunity• Zero legacy costs (pensions, onerous leases etc)• Will consider the purchase of earnings

enhancing assets with the right Brand Partners

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Buy-and-Build

Integration• Implement Group DMS• Implement Group financial and operational

processes and controls• Restructuring plan if required• Standardise supplier contracts where beneficial• “Buddying” system to hand hold through

integration process

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Buy-and-Build

Operation• Cambria Digital lead generation• Cambria Academy• Guest Connect Centre• GRM strategy• Operational reviews

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Driving Cambria

Role of the FD

Financial Control and

reporting

Risk Management

Company Secretary

Legal

Property

ITHR Banking and

financing relationships

Board of Directors

Business Development

Shareholders

Other stakeholders

Professional Advisors

Our Strategy

To establish geographic regions with Primary Manufacturer Brand Partners representing minimum of three, maximum of 10 locations with the exception of ultra luxury partners

To grow organically through brand extension and self-financed acquisition to create a £1 billion turnover Group

Regional structure with stand alone autonomous dealerships able to make locally based entrepreneurial decisions - no Head Office

Each region to have the capacity to be developed into £200m turnover business in the medium term

Balanced brand portfolio. Currently: Volume 55%; Premium and Luxury 40%; Motorcycle 5%

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Complexity of the Business model – Maximising revenue streams

New Car Sales

Used Car Sales

Finance and

Insurance

Warranty

ServiceBodyshop

Parts Retail

Parts Trade

Fleet Sales

Commercial Sales

Motability

Complexity of the Business model – Control of the Working Capital

New Car Stock

Used Car Stock

Demonstrator Stock

Finance Debtors

Manufacturer Debtors

Car Fleet Debtors Parts Stock

Returns to supplier

Parts Trade Debtors

Service Warranty Debtors

Service Fleet Debtors

Bodyshop Debtors

Complexity of the Business model – Complying with Regulation

FSA

HSE Trading Standards

Employment Law

Optimising the return – “The ingredients”

Optimal Return

An Entrepreneurial

Leader

Industry Leading Tools

A Daily Framework

Group Reporting Operational Reviews

On-site Trading Reviews

Changing Behaviour

Communication

The Cambria ‘Tool Box’

SalesMarket Tracker

I – Control

BCA Auction View

C It Now

Cambria Web Sites

Postcode tracker

Contact At Once

Social Media

Enquiry Builder

Guest Connect

BDM Voice

F&I Internet Tracker

Cambria Academy

Marketing Delivery

Group F&I Deals

After-sales Cambria LCS

EVHC

BDM Voice

Electronic Clocking

Service Plans

1 Link

Group Supplier Deals

Daily Processes

Daily Processes

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Group Control - Local Contact Strategy

TABLE REMOVED FOR CONFIDENTIALITY

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Group Control - Vehicles displayed on the web

TABLE REMOVED FOR CONFIDENTIALITY

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Group Control - Enquiries

TABLE REMOVED FOR CONFIDENTIALITY

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Group Control - Sales DOC

TABLE REMOVED FOR CONFIDENTIALITY

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Group Control - After-sales DOC

TABLE REMOVED FOR CONFIDENTIALITY

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Group Control - Vehicle Stock Control

TABLE REMOVED FOR CONFIDENTIALITY

Used car stock ROI

Days in Stock prior to sale

Gross profit per unit

1 to 30 days £894

31 to 60 days £707

61 to 90 days £258

Over 90 days (£78)

Days in Stock prior to sale

Annualised return on investment

1 to 30 days 226%

31 to 60 days 62%

61 to 90 days 13%

Over 90 days -2%

Average dealer 85% ROI Top performing dealers 150% ROICambria Group 120%

Features of best performers: Used cars = investment Plan for the life of the car in line with stocking matrix - ROI Speculative cars are restricted Stocking time limits adhered to

Highest ROI cars <30 days in stock Under £5k Over 5 years old

29Source: 2013 AM franchised dealer report

Monthly Operations Reviews

General Management

Sales Management

Service Management

Parts Management

Business Management

Branch Financial

Controllers

On-site Operational Reviews

On Site ReviewNew Car SalesPerformance vs Manufacturer contract YTD (current campaign position)Sales Performance by sales exec - Group League Tables (inc Service Plans)Enquiry Management - Guest Connect - BDM Calls - Enquiry Builder - Ebbon DacsService Department Guest List from previous day workshop activityManufacturer F&I Renewal dataEbbon Dacs Data Quality for New Enquiries from last 7 daysReview New Stock position and consignment fundingForward order bank3 deal files month-end delivered - see deal file master listShowroom - detail / what are the offers?New Marketing offers - On and Off LineManufacturer CS program results by individual SE

Used Car Sales Sales Performance by sales exec - Group League Tables (inc Service Plans)Used Stock Position - Ageing order to month endDigital Review - Description, pricing, positioningFive car - would I buy this.?. Presentation and pricing3 deal files month-end delivered Auction Performance prior month / current flashShowroom - detail / what are the offers?Marketing offers - current and plannedContact 2 guests at random from prior week (One purchase, one lost sale)

Dealership F+ISales Performance by sales exec - Performance Management documentFSA paperwork random checkReview current supplier offers

Service DepartmentLocal Contact Strategy reviewTechnician monthly performance - Labour Analysis and review documentsEVHC - Has every vehicle had a VHCService Plan PerformanceManufacturer CS program results by individual SARecovery Rate TrackersWarranty - 3 jobcard review, evidence of self audit in the monthFuture booking work mix10 job card individual recovery review1 Link Performance stats month and YTD (volume, response times and uninvoiced)Marketing offers - current and planned - Local IndependantsData Quality

Parts DepartmentPerformance vs Manufacturer contractStock holding ageing and profile (net movement on prior review)Check PDR process integrity inc awaiting creditSurcharge stock review10 line stock check, evidence of perpetual checks ongoing

Finance and AdminWEEKLY STOCKS AND DEBTORS REVIEWCurrent month forecastReview minutes of debt meetingsCheck bankingVehicle stock check reconciliation

Health and SafetyReview most recent report from Marcus Smith

Changing Behaviour – Pay Plans

Pay Plans

Sales Associates

Technicians

Service Front-end team

Management

Changing Behaviour - Measuring Technician Performance

TABLE REMOVED FOR CONFIDENTIALITY

Key Themes for developing the existing business – Playing the margins– Return on investment– Simple things every day

“Aggregation of Marginal Gains”

“...you can’t make a 100% improvement in 1 area but you can make a 1% improvement in 1000 areas...”

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8 potential steps to 2% aspiration

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2% ROS

Underlyin

g PBT

2012

New ca

rs - m

argin re

cover

y

CV and fleet

Volumes to prev

ious year

Used Adve

rtising p

er unit a

lignmen

t

Used unit v

olumes

Used F&

I pen

etrati

on

Servic

e reco

very r

ate

Tyre a

nd Oil m

argin m

anage

ment

Parts M

argin m

anag

emen

t

Aspirational

Future

PBT0

0.5

1

1.5

2

2.5

3

3.5

3.1

Summary

FD role is multi-faceted, have to be able to wear a number of hats

Group growth has been delivered with structure albeit opportunistic

Fire power available to continue adding single and multiple dealerships of varying size

Controlling the business is a daily affair in order that it can be driven

Aggregation of Marginal Gains mean that there are still opportunities for

the enhancement of the existing business

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James Mullins

Finance Director