Leading the Transition to Car Subscription - Investor Presentation March 2021 - Carly Car Subscription
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Leading the Transition to Car Subscription Investor Presentation March 2021
Disclaimer
The material herein is a presentation of non- information that might reasonably be required looking statements are reasonable, such
specific background information about the to complete a detailed assessment of Carly statements involve risks and uncertainties
current activities of Carly Holdings Limited Holdings. and no assurance can be given that actual
(Carly Holdings or the Company). It is results will be consistent with these forward-
Individuals should conduct their own
information given in summary form and does looking statements. The presentation must
investigation of investment and financial
not purport to be complete. be considered in the light of these
parameters relevant to their personal
uncertainties and investments in Carly
All persons should seek appropriate requirements for investment purposes. The
Holdings should be considered as
professional investment advice in reviewing presentation may contain forward looking
speculative in nature.
or considering this presentation and all other statements regarding the intentions of the
information with respect to Carly Holdings, its Company, and these will be affected by The presentation is not a prospectus or
business, financial performance and many other factors beyond the control of similar disclosure document and does not
operations. Neither the provision of this the Company. constitute an invitation to apply for shares in
presentation nor the information contained Carly Holdings or ASX:CL8.
Forward-looking statements include, but are
therein, or any associated communication to
not limited to, statements concerning Carly
any person should be taken as constituting
Holdings’ planned strategies and programs
financial advice regarding the purchase or
and other statements that are not historical
dealing of shares in Carly Holdings. This
facts. Although Carly Holdings believes that
presentation does not purport to provide all
its expectations reflected in these forward-
2
Carly Holdings Overview
The Company The Ideal Solution Market Opportunity
Carly Holdings is innovating in the Carly, Australia’s first flexible car subscription 38% of Australians* would
rapidly evolving automotive and service launched in March 2019. consider subscribing to a car
mobility markets in Australia. rather than purchasing or
A monthly recurring payment covers all expenses,
leasing.
Major shareholders include leaders just add fuel.
in the automotive industry SG Fleet, New car sales have been
The use of a car without the long-term burden
Turners Automotive and RACV declining and dealer profit
of debt or ownership; Carly offers a more flexible
margins are being squeezed.
alternative to finance or outright purchase.
Consumers and businesses are
Industry Experience Uniquely Positioned wary of long-term debt.
Car subscription adoption has
10+ years’ experience operating We enable the existing $55 billion p.a. auto industry to
been accelerating during
DriveMyCar, Australia’s largest derive a new source of revenue from their vehicles
COVID-19.
peer-to-peer car rental platform. by providing a complete car subscription solution.
*Carly commissioned Omnipoll survey (June 2020)
Leveraging proprietary technology Our capital light business model means we invest in
and extensive industry partnerships. technology and marketing, not in purchasing
vehicles.
3
What is a Carly Car Subscription?
A fast, flexible and low-risk way for individuals and businesses to
access quality new or used vehicles online for 30 days+
The key benefits of Carly Subscription are:
● one simple monthly subscription fee includes registration,
insurance, maintenance and roadside assistance costs
● exclusive car use
● no break fees
● no upfront deposits
● minimum 30 day term and cancel with 30 days notice
● ability to switch the vehicle to suit changing needs
● not a long-term financial commitment or debt
The subscriber simply covers the cost of fuel and tolls
Carly business customer
Lust Liquor, Sydney
4
Key milestones $1m strategic investment from NZ
auto leader Turners Automotive
DriveMyCar expands fleet over
20% with 101 Subaru Imprezas Hyundai chooses Carly for
car subscription in Australia
Launched in
Carly Holdings receives $1m Sydney SG Fleet invests
DriveMyCar enters
strategic investment from RACV $2.2m in Carly Holdings
into agreement with
UBER
DriveMyCar expands Subaru Custom Fleet 60% Subscription $
deal with 105 new vehicles monetises fleet via increase since COVID-19
DriveMyCar impact
2016 2017 2018 e 2019 2020
DriveMyCar delivers 54% New deal with Peugeot Carly & iMotor Carly Carly powers launch of
booking growth with significantly expands develop dealer launches in car subscription in NZ
Subaru and UBER DriveMyCar fleet website subscription QLD for Turners Automotive
integration
DriveMyCar launches car rentals DriveMyCar launches third and Suttons Motors supply vehicles
for UBER in VIC & QLD largest campaign with Subaru to Carly and DriveMyCar
5
The way people
access cars is
changing rapidly
38% 59% 10% 10%
Shift from Car Rise in use of Automotive Uptake of Multiple
Ownership to Access Subscription Services Industry Disruption Mobility Solutions
Ownership is increasingly From mobile phones to New car sales are in decline, Individuals and businesses of
being seen as a burden as it on-demand movies and food, dealer profit margins are all sizes are seeking a range
is inflexible and requires subscription offers shrinking and customers are of mobility solutions to match
long-term financial an attractive and effective being refused credit. The their lifestyle or commercial
commitment. People value solution to accessing a range auto industry knows it must requirements, which can vary
access to cars that meet of products with a simple evolve its offering. hourly, daily or monthly.
their needs at a recurring payment.
particular time.
6
Carly website
*NEW*
Homepage
Results page
Car details page
7
A start-up with
a head start 38%
Carly is a first-mover in the Australian
Carly has strong market DriveMyCar operates in key
car subscription market; leveraging potential: rental markets:
the experience, partnerships and
● No dominant competitors ● Long-term car rental
proprietary technology developed by
● 59% of Carly Holdings ● Rideshare rental
DriveMyCar, Australia’s first and
revenue
largest peer-to-peer car rental platform ● Accident replacement rental
● Significant industry
● 10+ years’ experience
partnerships
● Over $10.4m paid to owners
● Over 466,000 rental days
delivered
Car subscription has been identified as a larger opportunity with fewer
competitors than car rental and is the primary focus for Carly Holdings
in the future
8
Subscription fills a large
gap in the mobility market 5.22
months
Average subscription
period (Dec 2020)
Cost
Car Share
1 hr – 1 day Car Rental
1 – 14 days
Car Subscription
30 days – 1 year Outright Purchase &
Long-term Finance
1+ year
Time
9
Carly connects subscribers with
suppliers of vehicles
Supply Marketing Demand
Automotive manufacturers Online discovery
Families
Automotive dealers Insurance
Contractors
ID verification
Fleet management companies Relocators
Sales
Corporate fleets Experience Seekers
Fleet mgt
Strategic partners De-riskers
Payments
Millennial Nomads
Data analysis
Gen Xers
Silver Surfers 65+
Carly does not compete with the automotive industry, Carly enables the industry to evolve and survive
10Car subscription
market potential
The new and used car sales market in
Australia is valued at $55 billion p.a
AFR - Apr 2020
38% 59% 10% Car Subscription Market
of Australians ‘Probably Would’ of all new vehicle
would consider a or ‘Definitely sales in the US and
Penetration Potential
car subscription Would’ be Europe could be via (Value of cars on subscription as a
for their next interested in car vehicle subscription proportion of new and used car sales)
vehicle subscription in programs by
the US 2025 - 2026
Carly commissioned OmniPoll
research conducted (Jun 2020).
JD. Power Mobility Disruptors ©
2018 J.D. Power (Jun 2018).
Frost & Sullivan: Future of Vehicle
Subscription-Business Models and
1% 5% 10%
Opportunities in North America &
Europe, 2025 (Oct 2018). $550m $2.75b $5.5b
11The right time for Car Subscription
Many businesses have been severely
impacted by COVID-19, however Carly 76% MAR 2020
increased revenue as people sought Growth in subscribers
lower risk, vehicle access solutions that do Subscription growth continued DEC 2020
despite COVID-19 and
not require long-term financial commitment. movement restrictions
89% MAR QTR 2020
Growth in subscription
transaction value DEC QTR 2020
Growth since the period prior to
COVID-19 restrictions
It’s likely that COVID-19-related concerns about strength of the
economy will accelerate the shift to car subscription.
12Car subscription grows despite COVID-19
COVID-19 lockdown
Rental and Subscription Receipts Lock down impacts car rental
and rideshare rental
$900,000
$800,000
$700,000
$600,000 Consistent growth of
$500,000 Carly Car Subscription
$400,000 Exceeds pre-COVID 19
$300,000 revenue
$200,000
$100,000
Mar Qtr 19 Jun Qtr 19 Sep Qtr 19 Dec Qtr 19 Mar Qtr 20 Jun Qtr 20 Sep Qtr 20 Dec Qtr 20
Carly Subscription Drive My Car Rideshare Rentals
5.22 months 20 months
Avg retention period (Dec 2020) Longest subscription period
13The auto industry and consumers
realise the value of Car Subscription
“ CARLY, the Australian car subscription provider
has had all-time record subscription sales in the
quarter to June 2020 in spite of, or possibly
because of, the challenging sales numbers in the
‘conventional’ car market.
The company says that the number of live Carly car
subscriptions increased by 43 percent during the
June 2020 quarter.
“Like many businesses, Carly had to deal with the
impact of COVID-19 during the June 2020 quarter
but it proved resilient and achieved the highest
quarterly growth in subscriptions since the
”
beginning of FY20.”
7 AUG 2020 | Go Auto News
3 SEP 2020 | The Carousel
14Media Coverage
Sophia Lust Liquor Sunrise A Current Affair
Consumer Case Study Business Case Study Carly featured on Sunrise Carly featured on A Current Affair
Featured on A Current Affair
After Carly was featured on
Sunrise and A Current Affair, Featured on Sunrise
the number of people searching
for Carly on Google increased
dramatically
15Carly in the News
Car Subscriptions soaring Subscribing to a car could help you survive the
pandemic and save on your finances
Tax win for Carly subscribers The $700 million fleet management group SG
Fleet has taken a stake in Carly
Australians are swapping their
Netflix Style Car Subscription Company Reboots
wheels for car subscriptions
Car subscriptions are revving up Hyundai pairs with Carly car subscription service
Genesis Chooses Carly for Car Subscription in
Carly has joined forces with
Australia
one of Victoria’s leading
automotive groups
16of Australians would consider Australians’
38% subscribing to a car rather than
purchasing or leasing
attitudes towards
47%
of people with children would consider
subscribing to, rather than purchasing Car Subscription
their next car
Interest in Car Subscription has increased
since COVID-19...
69% + 50% indicated they’d prefer a
no-strings-attached car
GEN Z MILLENNIALS
(18-24 yrs) (25-34 yrs) subscription option Of those considering are more likely to
car subscription,
42% consider a subscription
now compared to
6 months ago.
31% of people
46%
Carly commissioned Omnipoll* would consider
survey (Jun 2020) surveyed were
car subscription and…
extremely or very
worried about their
financial situation due
* Survey conducted in June 2020 by OmniPoll amongst a national sample of 1228 people aged 18+.
to the pandemic.
Of these...
24% are more likely to
choose it NOW
Respondents were drawn from the online consumer panel managed by Lightspeed Research, OmniPoll’s
online partner. Sample quotas were set for each state, city and regional area, by sex and age. To reflect the
overall population distribution, results were post-weighted to Australian Bureau of Statistics data (Census
2016) on age, highest level of schooling completed, sex and area.
17ATO Product Ruling
Carly has secured a product ruling from the Australian Taxation Office that provides a clear framework for
Carly subscribers using cars for business or work purposes to claim tax deductions.
The ATO Product Ruling is exclusive to Carly and does not apply to any other car subscription offerings.
Carly is the only car subscription offering that can currently provide certainty of tax deductibility on car subscription payments.
Benefits for Carly’s customers
Businesses that use Carly can claim the full dollar amount of the Subscription Fee as
a deduction if the cars are used in carrying out business and/or provided to employees
for their usage.
Businesses that reimburse employees can claim a deduction for the full dollar amount
of all the Subscription Fees reimbursed to employees for the period of the subscription,
as long as the car is used for business.
Individuals can claim Subscription Fee payments as a deduction in their income tax
return if the vehicle is being used for business or work purposes.
The Product Ruling (PR 2020/11) is only a ruling on the application of taxation law. It is only binding on the
ATO if the Scheme is implemented in the specific manner outlined in the product ruling. 18
18Experience delivers
lower risk and higher
conversion
Competitors compensate by charging large upfront fees that restrict
customer uptake or ignore risk altogether.
The experience of completing over 4,000 monthly recurring vehicle
transactions means that Carly can deliver:
LOWER HIGHER MORE
fraud risk customer high quality
conversion ratio subscriptions
Developed by Carly, peerpass>> is used to
Other subscription providers do not have the experience, knowledge
verify customers and reduce risk.
or technical capability to reduce risk the way that Carly can deliver
through peerpass>> It’s effectiveness has been proven through year-
on-year lower Claims Loss Ratios than most
*The effectiveness of the PeerPass platform enabled the achievement of a lower than traditional rental companies*
industry average Claims Loss Ratio for its insurance policy in 2019/20 and continuing
into 2020/21. 19Industry leading partnerships
Rentals for rideshare drivers and Supply of new Mitsubishi,
Supply of new and
the first accident replacement Renault, KIA, Subaru,
ex-lease vehicles
rental solution for Uber Nissan vehicles
Carly launched the first Integrated subscription DriveMyCar is preferred car
manufacturer subscription functionality developed for rental provider for fleet
service in Australia I-Motor’s 700 dealer websites management clients
No. 3 Carly Holdings shareholder.
Supply of rental fleet in key Rideshare rental program for
Carly platform powers Turners
locations Peugeot vehicle range
Subscription in New Zealand
Accident replacement rental
solution developed for RACV Supplier of near new vehicles Supply of new vehicles
insurance customers
No. 2 Carly Holdings shareholder. Experiential marketing campaigns
Demand referral agreement and for launch of Impreza and XV
supply of vehicles featuring over 200 vehicles
20Turners Automotive launch car
subscription in New Zealand, powered by Carly
The key benefits of Carly Subscription are:
● Follows on from AUD $1M in investment from Turners
Automotive Group - the largest seller of cars in NZ
● The platform was launched in September 2020 as
Turners Subscription - ‘Powered by Carly’
● Technology licensing and service fee income
Carly provides: Turners manages:
Subscription Platform Software Fleet Management & Operations
Customer Service Marketing
21SG Fleet strategic investment,
vehicle supply and B2B
referral partnership
● SG Fleet invested A$2.2 million in Carly Holdings in November 2019
● A dominant player in fleet management and leasing, SG Fleet manage
over 140,000 vehicles and supply Carly and DMC with vehicles
● The B2B collaboration enables SG Fleet to offer subscription services
to its customers and derive a new revenue stream, and provides
Carly with access to business and government demand channels
● Ongoing development of this partnership provides an opportunity to
further leverage SG Fleet’s operational experience and auto
industry relationships
22The first subscription service to
partner with a manufacturer and
their dealer network
● Hyundai is the third largest car brand in Australia
● Working with Carly to offer a co-branded subscription
offering for its vehicle range
● Includes participation of Hyundai dealer network to provide
broad market coverage
● Supported by Hyundai-funded marketing campaign
● Provides a new way for consumers to access Hyundai
vehicles
● Delivers both supply and demand for Carly
23Improving subscription
plan economics
REVENUE SHARE
Increase in average Carly revenue share
from new subscription plans*
2.1% New subscription plans were launched on 1 Sep 2020.
The 2.1% increase will support improvements in profit
margin in future quarters
AVERAGE RETENTION PERIOD
5.0 5.2 4.4%
Longer retention periods decrease customer
acquisition and vehicle handover costs
Months Months
Jun 2020 Dec 2020
*Old plan vs new plan based on average vehicle value and subscription plan split Sep Qtr 2020
24Upselling to Higher Price Subscription Plans
Through sales and marketing initiatives, Carly upsold
a higher proportion of customers from ‘Entry’ to SEPTEMBER QUARTERS
YEAR ON YEAR
‘Medium’ subscription plans, resulting in revenue
and margin improvements.
2019 62% 22% 16%
ENTRY MEDIUM LARGE
2020 44% 46% 10%
ENTRY MEDIUM LARGE
25Revenue and margins
are improving
Upselling to higher value subscription
COMPARISON OF QUARTERLY RESULTS plans, as well as increases in average
AVERAGE SUBSCRIPTION VALUE COST OF SALES GROSS MARGIN end user prices supported by lower
SEP cost of sales, have driven material
2019 $799 $169 $93 increases in revenue and gross margin.
DEC 5% 15% 25.8%
2020 $839 increase $143 decrease $117 increase
*All values are per month, per vehicle excluding GST
26Improving insurance metrics
YEAR ON YEAR 7 MONTHS
CLAIMS PER 4.8 4.2 3.7 2.6
10,000 DAYS Rental only Rental + Rental + Subscription
Subscription Subscription only
April 18 – Mar 19 April 19 – Mar 20 April 20 – Oct 20 April 20 – Oct 20
Improvements to the performance of the motor fleet insurance policy have been achieved due to
substantially lower claims arising from Carly’s subscription model vs. the traditional car rental model.
YEAR ON YEAR 10 MONTHS
CLAIMS/
LOSS RATIO
71% 61% 25% The Claims/Loss Ratio
Rental only Rental + Rental + is a measure of the value of insurance
Subscription Subscription
claims vs premium paid. As car subscription
April 18 – Mar 19 April 19 – Mar 20 April 20 – Jan 21
accounts for 59% of total rental and subscription
receipts (Dec Qtr 2020) the lower incidence of claims
resulting from the car subscription model is having a
significantly positive impact on the Claims/Loss Ratio
27Carly’s
competitive advantage
10+ years experience in the industry
Substantial industry partnerships Direct and licensing income
Online customer acquisition Industry enabler, not a competitor
Capital light business model Mass market proposition
Proprietary technology platform PeerPass verification platform
No deposit and no long-term ATO Product Ruling
financial commitment
28FY21 Growth Opportunities
White Label Opportunities
Business & Government
Carly will leverage the capability developed to launch
Hyundai subscription in Australia, and Turners Carly will leverage the relationship with SG Fleet
Subscription in New Zealand, to pursue platform to offer subscription to its customers and will
licensing opportunities with automotive focus on acquisition of business and corporate
manufacturers, dealers and new market entrants customers
Referral Partnerships Electric, Hybrid & Hydrogen Vehicles
Car subscription is a simple online proposition Subscription is an ideal model to introduce
that is suited to customer referrals from aligned consumers and businesses to new vehicle
companies. Carly will expand on existing technologies in a low risk and flexible way that
referral relationships with ServCorp, Student alleviates initial concerns about driving range,
VIP, I-Motor and Hyundai battery life and depreciation
29Corporate Structure
As at 29 January 2021
Board, management
Shares on issue 56.5 m* and related parties Other
Options on issue 4.3 m* shareholders
23.8%
Market capitalisation $9.9 m 27%
Cash at bank 31 Dec 2020 $1.325 m
Top Shareholders
Willoughby Capital Pty Ltd 24.7%
SG Fleet Management Pty Limited 19.6%
20.7%
Turners Automotive Group Limited 8.8%
28.5%
Top 20 (ex-Board,
RACV Investment Holdings Pty Ltd 2.6% management
Substantial
Top 20 Shareholders 76.2% and related parties)
shareholders with
Number of Shareholders 729 board nominees
30Carly Holdings Board of Directors
Chris Noone Robbie Blau Todd Hunter Adrian Bunter Stephen Abolakian Michelle Vanzella
Chief Executive Officer Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director
and Director
Chris has led the evolution Robbie is CEO of ASX-listed Todd is the Group CEO of Adrian has over 25 years’ Stephen is an accomplished Michelle has an extensive
of Carly Holdings since company SG Fleet. He has Turners Automotive, a New experience in accounting, executive with experience combination of customer,
2014 and forged significant experience in the Zealand based integrated finance and corporate across property development, marketing, digital, data and
transformative automotive fleet management and automotive financial service advisory. He is an finance, capital raising and commercial legal skills built
partnerships with Uber, leasing industry. Previously, group. Todd is a strong and executive director of operations. He is the up across multiple
RACV and Hyundai, SG Robbie founded Nucleus experienced senior Venture Advisory, one of Managing Director of Hyecorp industries including
Fleet and Turners Corporate Finance in South executive, with a Australia’s leading Property Group. Hyecorp is technology, retail, property
Automotive. He has been Africa in 1999, where he background in marketing, specialist technology, associated with Willoughby and financial services. She
responsible for advised a listed entity Super sales and accounting in media and Capital, Carly Holding’s practiced Corporate and
development and launch of Group Limited, on corporate both large global and telecommunications largest shareholder. Stephen Commercial Law at Allens
many innovative advisory and strategic domestic businesses. He is financial advisory firms. has a Bachelor of Economics and has held senior
companies that have projects. He also worked as a Chartered Accountant Adrian is a member of the from USYD and holds a executive positions with
defined the digital market a commercial attorney for 5 and has worked with (EY, Executive Committee of Diploma of Financial Markets iconic brands including
in Europe, Asia and years at Werksmans Microsoft and NZ Post. leading angel investing from FINSIA Westfield, Suncorp and
Australia incl. Hasbro Attorneys. group, Sydney Angels & is AAMI.
Interactive, Vodafone and a director of 8common
ninemsn. Ltd.
Paul Morris
Strategic Advisor
Paul has had a long and distinguished career in the automotive industry in Australia and Europe working in senior strategy, operational and sales roles with Inchcape and other leading
companies. Most recently he was Chief Operating Officer of the ASX- listed Automotive Holdings Group Limited, Australia’s largest automotive retailer
31Why invest in Carly Holdings?
Consumers & businesses are ready Car Subscription is gaining traction
Access to vehicles is increasingly preferred to Carly has grown steadily since launch in
ownership. Carly provides flexible and cost- March 2019 and has secured partnerships
effective ways to access vehicles instead of with leading automotive industry players.
relying on traditional car rental, outright purchase Average subscription period is 5.22 months
and long-term finance. 38% of Australians would
consider subscription for their next car.
The automotive industry is ready Carly is best placed to win
The automotive industry is ready. The industry Over 10 years experience in an adjacent
is experiencing enormous challenges - market, industry partnerships, capital-light
manufacturers and dealers must evolve to business model, proprietary technology
survive. and a market-leading car subscription
offering, already on a growth trajectory.
Carly Holdings is creating new ways to access Carly Holdings is the only ASX-listed business
vehicles that consumers and businesses are focusing on the sizeable car subscription
demanding in a $55 billion p.a. market opportunity in Australia and New Zealand
32W: www.carly.co/investors
E: shareholder@carly.co
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