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2008 Annual Stockholders’ Meeting
2Copyright 2006, All Rights Reserved
ForwardForward--Looking StatementsLooking Statements
Certain statements contained in this presentation are forward-looking statements. Forward-looking statements typically use words such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,”“estimate,” “project,” “positioned,” “strategy,” and similar expressions. These are based on assumptions and assessments made by our management in light of experience and perception of historical trends, current conditions, expected future developments and other factors that we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation: competition; product demand; the economy; credit markets; the ability to hire and retain qualified employees; consumer debt levels; inflation; weather; raw material costs of our suppliers; energy prices; war and the prospect of war, including terrorist activity; availability of consumer transportation; construction delays; access to available and feasible financing; and changes in laws or regulations. Forward-looking statements are not guarantees of future performance and actual results; developments and business decisions may differ from those contemplated by such forward-looking statements, and such events could materially and adversely affect our business. Forward-looking statements speak only as of the date made. Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results may materially differ from anticipated results. Please refer to the Risk Factors section of AutoZone’s Form 10-K for the fiscal year ended August 30, 2008 for more information related to those risks. In addition to the financial statements presented in accordance with Generally Accepted Accounting Principles, AutoZone has provided metrics in this presentation that are not calculated in accordance with GAAP. For a reconciliation of these metrics, please see AutoZone’s press release in the Investor Relations section at www.autozoneinc.com.
3Copyright 2006, All Rights Reserved
OverviewOverview
America’s #1 auto parts/accessories retailer and a leading distributor
Annual sales $6.5 billion*
4,122 stores in 48 states and Puerto Rico**
150 stores in Mexico**
Founded in 1979
Listed on NYSE: AZO since 1991
Included in S&P 500 since 1996
• Q1 FY 2009 Trailing 4 Quarters
** As of November 22, 2008
4Copyright 2006, All Rights Reserved
OverviewOverview
Sell automotive maintenance and repair parts, accessories
Specialize in two customer segments:
Retail “Do-It-Yourself” (DIY)
Commercial delivery to
professional technicians
All stores are company-owned
and operated – no franchises
5Copyright 2006, All Rights Reserved
Strategic Priorities!Strategic Priorities!
U.S. Retail (DIY)Commercial (DIFM)MexicoALLDATA
2008 Sales by Strategic Priority
83%
5%
12% U.S. Retail
U.S. Commercial
Other
6Copyright 2006, All Rights Reserved
The AutoZone PledgeThe AutoZone Pledge
AutoZoners always put customers first!
We know our parts and products.
Our stores look great!
We’ve got the best merchandise at the right price.
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AZO: Record SalesAZO: Record Sales(FY ending August) (000’s)
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
'97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08
10-yr CAGR = 7%
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(FY ending August) ($) TOTAL EPS GROWTH*
AZO: Record EPSAZO: Record EPS
*Comparable EPS
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
'97 '98 '99 '00 01* '02 '03 '04 '05 '06 '07 '08
10-yr CAGR = 21%5-yr CAGR 14%
9Copyright 2006, All Rights Reserved
Strong financial resultsStrong financial results
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Operating Cash Flow (000s)
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Strong financial resultsStrong financial results
0%
5%
10%
15%
20%
25%
30%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Return On Invested Capital
24.0% in 2008
11Copyright 2006, All Rights Reserved
Industry PerspectiveIndustry Perspective““DoDo--ItIt--YourselfYourself”” Auto AftermarketAuto Aftermarket
Do-It-Yourself” Auto AftermarketU.S. Industry size: $39 Billion*Industry growth: 4.1% ten year CAGR*
AutoZone:AutoZone DIY sales: $5.4 Billion** AutoZone DIY position: #1AutoZone DIY market share: 13%
*Source: AAIA 2007/2008 Factbook**FY 2008 U.S. Retail Sales
12Copyright 2006, All Rights Reserved
10 year CAGR 4.1%
* Source: Total per AAIA 2007/2008 Factbook
DIY Industry GrowthDIY Industry Growth$
Bill
ions
24
26
28
30
32
34
36
38
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
5 year CAGR 3.96%
13Copyright 2006, All Rights Reserved
Source: Ward’s Automotive Yearbook through 1999,R.L. Polk Company data 2000 through 2006
0
25
50
75
100
125
150
175
200
225
250
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
Veh
icle
s (i
n M
M's
)
OKV's <7 years
1.0
1.5
2.0
2.5
3.0
3.5
79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07
Mile
s dr
iven
(Tr
illio
ns)
Source: USDOT Federal Highway Administration website
Increasing Vehicle Count, Increasing OKVs
Miles Driven Increasing
The USDT has reported a 3.5% decline thru October 2008. In fact, every month in 2008 has been negative
Opportunity: Positive LongOpportunity: Positive Long--Term TrendsTerm Trends
14Copyright 2006, All Rights Reserved
DIY Growth Initiatives DIY Growth Initiatives
New Stores“The Right Product In The Right Place”“Great People Providing Great Service”Effective & Efficient Marketing
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Current National U.S. Footprint Current National U.S. Footprint (New Store Additions)(New Store Additions)
1
5
1
2
14
38
66
512 105
59
95
22
2350
197 131
75
150
84 90 171
185
73
157
82
116
438
58
32
10
18
6
38
66
140
48
16
58
15
57
114
211
27
107
34
1
48
6
23
PRPR17
AutoZone is the only Auto Parts Retailer with stores across the U.S.
Continued opportunity for further expansion
Note: Added 185 stores in FY 2008.
Total 4,240 Stores as of 8.30.2008
2Copyright 2006, All Rights Reserved
““The Right ProductThe Right Product””
Every category update completed for 2nd year in a rowEvery Category: a category sponsor and a category captain+ $300 million in parts and products in 2 yearsMAP Process: Leverages millions of look ups for the right placementEnhanced HUB best practices
3Copyright 2006, All Rights Reserved
High Quality Parts and ProductsHigh Quality Parts and Products
Critical AreasProduct InnovationCoverage – especially late model applications
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““Great People / Great ServiceGreat People / Great Service””
We’re optimistic about 2009 (Commercial and Retail)
Focusing on Great People Providing Great Service
a. Continual improvement in Customer Satisfaction Scores
b. Enhanced trainingc. Selling the complete jobd. New Transaction processe. ASE certificationf. “Hire the best” initiativeg. Continual systems enhancementsh. Appropriate marketing messages
around value proposition
5Copyright 2006, All Rights Reserved
Industry PerspectiveIndustry Perspective““DoDo--ItIt--ForFor--MeMe”” Commercial Auto AftermarketCommercial Auto Aftermarket
“Do-It-For-Me” Auto AftermarketU.S. Industry size: $52 billionIndustry growth: +4.2% ten year CAGR*A highly fragmented market
AutoZone:AutoZone DIFM sales: $754 million**DIFM market share: 1.3%
*Source: AAIA 2007/2008 Factbook** FY 2008 U.S. Commercial Sales
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10 year CAGR 4.2%
•Source: Total per AAIA 2007/2008 FactbookPrices quoted at Wholesale prices
$ B
illio
nsDIFM Industry GrowthDIFM Industry Growth
34
36
38
40
42
44
46
48
50
52
54
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
5 year CAGR 3.64%
7Copyright 2006, All Rights Reserved
Q1 Commercial HighlightsQ1 Commercial Highlights
# ofCommercial
Programs
Domestic AutoZone Stores:New 2,240
% increase in programs vs. LY 2%1st
QuarterDomestic Commercial Sales: $170.6($ millions)% increase in sales 1.8%
8Copyright 2006, All Rights Reserved
Commercial Growth InitiativesCommercial Growth Initiatives
Enhancing our products and services to achieve first call status for targeted customersDeveloping a premier selling organizationImproved parts assortment and availabilityExpanding the number of Commercial programs supported by enhancements to the service modelSupporting with a great marketing program
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Commercial PromotionsCommercial Promotions
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Grow AutoZone de MexicoGrow AutoZone de Mexico
• Abundance of old cars• Shortage of quality parts, few organized chains• 150 AutoZone stores mainly along US border*• U.S. model successfully translates to Mexico• Challenges – supply chain, economy• Opportunity for continued, profitable, prudently paced expansion
•As of November 22, 2008
11Copyright 2006, All Rights Reserved
Grow ALLDATAGrow ALLDATA
• 70,000+ current repair shopsubscribers• Leading provider of manufacturers’service and repair information, shopmanagement software and customerrelations tools for the auto repair andcollision industries• Introduced ALLDATA Collision in
2007 and subscriber base now includes ~2,000 accounts
12Copyright 2006, All Rights Reserved
Strong Financial DisciplinesStrong Financial DisciplinesContinued EPS growthContinued EPS growth
Grow Retail SalesRefinement of Parts CoverageDeploy inventory more effectively across network with specific emphasis on utilizing Hub network more effectively Invest in AutoZoner training and retentionMake sure our stores look greatMake sure we put our customers first in everything we doCustomer service will continue to be our key point of differentiation
Grow Commercial SalesOnly 12% of domestic sales & 1.3% market share todayContinue focus on building best-in-class B2B selling organizationFocused on profitable growth
Prudently paced growth in MexicoRelentless focus on managing costs
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