ANNUAL GENERAL MEETING 5 June 2019
IMPORTANT INFORMATION This presentation contains “forward -looking statements” which are prospective in nature and are not based on historical facts, but rather on current expectations and projections about future events. Such statements are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as “plans”, “expects” or “does not expect”, “is expected”, “is subject to”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements, including business, economic and regulatory changes as well as the risks set out in the Company’s annual report and accounts, which can be found on its website (www.theaaplc.com/investors). Such forward-looking statements should therefore be construed in the light of such factors. Neither the Company, nor any of its associates or directors, officers or advisers, provides any representation, assurance or guarantee that the events expressed or implied in any forward- looking statements in this announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with its legal or regulatory obligations (including under the Market Abuse Regulation, the Listing Rules and the Disclosure Guidance and Transparency Rules), the Company is not under any obligation to update, revise or correct any forward- looking statements, whether as a result of new information, future events or otherwise. No statement in this presentation should be construed as a profit forecast or relied upon as a guide to future performance. 1
INTRODUCTION
Introduction Business performance and outlook AGENDA Annual General Meeting voting 3
BOARD OF DIRECTORS AND COMPANY SECRETARY John Leach Simon Breakwell Andrew Blowers Mark Brooker Chairman Chief Executive Officer Senior Independent Director Non-Executive Director Suzi Williams Cathryn Riley Steve Barber Nadia Hoosen Non-Executive Director Non-Executive Director Non-Executive Director Chief Legal Officer and Company Secretary (Board support) 4
AA INVESTMENT HIGHLIGHTS One of the UK’s most trusted commercial brands Market leadership position High recurring revenue with strong cash generation Excellent standards of service delivery Partner of choice for B2B customers Mature market with significant barriers to entry 5
FY19 REVIEW Solid operational progress across key strategic initiatives in Roadside and Insurance Successful renewal or extension of all targeted B2B contracts including LBG; new contract win with Arval and JLR mobility Continued strong cash conversion S&P ratings reaffirmed; effective maturity of debt extended to 2022 Well positioned to execute our strategy and deliver our medium-term growth targets Putting service, innovation and data at the heart of the AA 6
BUSINESS PERFORMANCE AND OUTLOOK 7
DELIVERING OUR STRATEGIC PLAN – ONE YEAR IN Accelerate Growth FY21/22 via Differentiation Roll-Out and FY20/21 Roadside membership growth Scale Innovation Insurance EBITDA growth Invest in FY19 New AA marketing Foundations Further new product innovations Membership stabilisation New B2B services embedded New strategy New product launches into the base Improved business and New management team New B2B service and product operational efficiencies investments New brand marketing campaign Highly engaged and performing Continued insurance investment company Insurance growth acceleration and growth Service resilience improvements Continued employment engagement IT stabilisation improvements People engagement improvements 8
OUR SERVICE EXCELLENCE IS OUR BEDROCK – WHICH? 2018 REVIEW REPAIRED AT THE ROADSIDE THIRD-PARTY COVER OVERALL SCORE 78 75 72 69 Green Flag 66 66 TOP 5 OEM-BRANDED COVER PROVIDED BY AA 1 2014 2018 2014 2018 2014 2018 Green Flag 91% (1 st ) 84% (2 nd ) 80% (3 rd ) 73% (4 th ) 72% (5 th ) Sources: Which? Recommended Breakdown Provider June 2018 9 Notes: (1) Overall Which? score relating to carmaker-branded cover
WE ARE THE PARTNER OF CHOICE FOR THE AUTOMOTIVE INDUSTRY SELECTED B2B CLIENT BASE BY LENGTH OF RELATIONSHIP AND TYPE OF CUSTOMER Financial Institutions & Partnerships Fleet & Leasing Companies Car Manufacturers No. of years 0 – 5 5 – 10 >10 AA customer 10
MOVING BEYOND BREAKDOWN THROUGH SMART INNOVATION TODAY WE HAVE ADDITIONAL ONLINE DIGITAL OPTIONS BREAKDOWNS VIA DIGITAL JOURNEYS VIA VOICE THE AA APP VIA THEAA.COM CHANNELS Remote Resolution Opportunity Today Q1 2019 Q2-Q3 2019 REMOTE RESOLUTIONS DIGITAL REPORTING SMART BREAKDOWN ONWARD MOBILITY SERVICE MAINTENANCE AND REPAIR 11
DELIVERING INSURANCE GROWTH Drive more Broaden New competitive underwriting Insurance premiums footprint Innovation 12
VISION FOR THE AA 13
DELIVERY TARGETS FOR FY20 EBITDA growth Greatly improved free cash flow generation of c£80m in FY20 New products and services across Roadside and Insurance New marketing and branding campaign to be launched this year Insurance books growing B2C membership stabilising Further and continuous operational efficiencies rooted in maintaining service excellence Further employee engagement improvement Putting service, innovation and data at the heart of the AA 14
Before asking your question, please give your name and state whether you are a shareholder, proxy or corporate representative. QUESTIONS If you are a proxy or corporate representative, please state your name and the name of the shareholder you are representing. 15
AGM VOTING
PROXY VOTES RECEIVED PRIOR TO MEETING % Issued Share % Votes For & % Votes Resolution Capital Voted Discretionary Against (including withheld) 100.00% 0.00% 77.28% 1. Report and Accounts Directors’ Remuneration Report 2. 88.15% 11.85% 77.28% 100.00% 0.00% 77.28% 3. Final Dividend 4. Elect Mark Brooker 100.00% 0.00% 77.28% 100.00% 0.00% 77.28% 5. Elect Steve Barber 6. Re-elect John Leach 99.95% 0.05% 77.28% 99.99% 0.01% 77.28% 7. Re-elect Simon Breakwell 8. Re-elect Andrew Blowers 99.84% 0.16% 77.28% 100.00% 0.00% 77.28% 9. Re-elect Cathryn Riley 10. Re-elect Suzi Williams 97.26% 2.74% 77.28% 17
PROXY VOTES RECEIVED PRIOR TO MEETING (CONTINUED) % Issued Share % Votes For & % Votes Resolution Capital Voted Discretionary Against (including withheld) 100.00% 0.00% 77.28% 11. Appointment of the Auditor 12. Remuneration of the Auditor 99.99% 0.01% 77.28% 97.22% 2.78% 77.28% 13. Political Donations 14. Authority to Allot Shares 97.24% 2.76% 77.28% 56.25% 43.75% 77.28% 15. Authority to Allot Further Shares 16. Disapplication of Pre-Emption Rights* 97.27% 2.73% 77.28% 99.75% 0.25% 77.28% 17. Authority to Purchase own Shares* Reduced Notice for General Meetings 18. 98.69% 1.31% 77.28% (other than Annual General Meetings)* * Special resolution 18
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