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AutohomeAnnual Report 2022
CONTENTS
1 Our Operational Highlights
17 International Highlights
2 Our Strategy
20 Our People. Our Culture.
3 The Evolution of our Strategy
26 Directors’ Report
4 Chair and CEO Letter
30 Corporate Governance
8 What We Do
8 Our Markets
9 Our Australian Business
13 Australian Highlights
16 International Businesses
30
Sustainability Report
32
Our Board
34
Our People and Culture
Chair’s Message
36
Remuneration Report
56
Other Directors’ Report
Disclosures
60
Auditor’s Independence
Declaration
62
Financial Statements
131 Directors’ Declaration
132 Independent Auditor’s Report
138 Shareholder Information
140 Corporate Directory
Founded in 1997, carsales.com Ltd (ASX: CAR) is the number one online automotive classifieds
business in Australia with a growing global presence in Asia and the Americas. carsales.com Ltd also
operates a number of market leading websites in non-automotive verticals including motorcycles,
boats, caravans, trucks and heavy machinery.
We seek to empower our customers, making buying and selling vehicles as easy as possible for
everyone – consumers, dealers and manufacturers alike. Headquartered in Melbourne, Australia
carsales employs over 1700 people across the world and is a member of the S&P/ASX100.
carsales Annual Report 2022
OUR OPERATIONAL HIGHLIGHTS
(FY22 METRICS COMPARED TO FY21 UNLESS OTHERWISE STATED)
1.3 billion
Total sessions
46 thousand
2.1 million
Subscribed dealers
Vehicles online
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Launched Select
Great place to work®
carsales’ digital retail
product in August 2021
Awarded for the fifth consecutive
year
385 thousand
Cars inspected by Encar
6% increase
In employee engagement
per our Employee
Opinion Survey
Nifty Fifty
Trader Interactive
Innovation award for
digital retail product
Carbon Neutral
In our Australian
Operations
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carsales Annual Report 2022
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OUR STRATEGY
Our Purpose
Make Buying and Selling A Great Experience
Our Strategic Pillars
Digital
Marketplaces
Grow our leadership in
digital marketplaces
Value-added
Services
Build a compelling
ecosystem of services
that support our
customers through
the buying, selling and
ownership of vehicles
Future
Horizons
Leverage consumer
insights and emerging
industry trends
to explore new
opportunities
Our Drivers
Data
People
Technology
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carsales Annual Report 2022 THE EVOLUTION OF OUR STRATEGY
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Y
1997
carsales domain
name registered
2005
carsales acquires
PBL Media’s
websites
2006
carsales hits
100,000
cars online
2009
carsales lists
on the ASX
2010
carsales hits
200,000
cars online
2015
Launched digital
trade-in product
Instant Offer
2014
Acquired 49.9%
stake in Encar
(Korea)
2013
Launched
ecommerce platform
tyresales.com.au
2013
Acquired 30% stake
in webmotors (Brazil)
2016
Launched vehicle
inspection service
RedBook Inspect
2016
Acquired controlling
stake in chileautos
(Chile) and soloautos
(Mexico)
2017
Acquired remaining
stake in Encar
2020
Launched
mobility-as-a
service transport
aggregator Placie
2022
Acquired remaining
stake in Trader
Interactive*
2021
Launched buy online
service Select
2021
Acquired digital
tyre wholesaler
tyreconnect
2021
Acquired 49% stake
in non-auto
marketplace group
Trader Interactive (US)
* Transaction due to complete in late Q1/early Q2 of FY23
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carsales Annual Report 2022AUDITOR’S INDEPENDENCE DECLARATIONCHAIR AND CEO LETTERWHAT WE DOOUR MARKETSOUR AUSTRALIAN BUSINESSAUSTRALIAN HIGHLIGHTSOUR INTERNATIONAL BUSINESSINTERNATIONAL HIGHLIGHTSOUR PEOPLE. OUR CULTURE.DIRECTORS’ REPORTCORPORATE GOVERNANCESUSTAINABILITY REPORTOUR BOARDOUR PEOPLE AND CULTURE CHAIR’S MESSAGEREMUNERATION REPORTOTHER DIRECTORS’ REPORT DISCLOSURES
CHAIR AND CEO LETTER
Pat O’Sullivan
Non-Executive Chair
Cameron McIntyre
Managing Director and CEO
FY22 has been a transformational year for carsales as
we celebrate our 25th anniversary. We have delivered
outstanding results despite ongoing disruptions and
volatility caused by COVID-19. The acquisition of the
remaining 51% of Trader Interactive in North America is
an incredibly exciting evolution of our international growth
strategy and strengthens carsales’ position as a truly global
leader in digital vehicle marketplaces. From a group
strategy perspective, we are committed to delivering on
our purpose of making ‘buying and selling a great
experience’ across all our marketplaces. COVID has
accelerated digitisation, which is creating new growth
opportunities for carsales as we strive to bring more and
more of the vehicle buying journey online. At the start of
the pandemic, carsales adopted three core decision making
principles which it continues to abide by: supporting our
customers, protecting our people and driving the long term
objectives of the company. This has enabled us to emerge
as a stronger business which is reflected in the breadth
of opportunities in front of us as we move into FY23.
Industry context
Automotive and non-automotive vehicle inventory levels
continue to be impacted by supply chain constraints,
primarily due to ongoing semi-conductor chip and other
component shortages, freight costs, production and
logistics constraints. As a result, used car prices have risen
at unprecidented rates and we expect inventory levels to
be an ongoing challenge for the next 6-12 months at least.
With less new cars being sold, there have also been fewer
trade-ins, driving more competition for used car supply
between dealers. Despite these challenges as well as the
impact of inflation and rising interest rates, we have
continued to see robust levels of demand in all our key
markets, reflecting the resilience of marketplace business
models through economic cycles.
Trader Interactive Acquisition and
Capital Raising
During the course of the last 12 months we have become
even more excited about the value of the Trader Interactive
business and its growth potential. As a result we chose to
exercise our call option in June to acquire the remaining
51% of Trader Interactive for US$809m or approximately
A$1,172m. Trader Interactive is a leading platform of
branded non-automotive marketplaces in the United
States, providing digital marketing solutions across the
commercial truck, recreational vehicle, power sports and
equipment industries. Trader Interactive is a clear leader in
large markets that have upside from both a digital adoption
and monetisation perspective. Culturally, there is strong
alignment between the carsales and Trader Interactive
teams and we have demonstrated an excellent track
record of delivering shareholder value by diversifying into
international markets. Moving to 100% ownership will
enable shareholders to capture the significant upside
potential in the Trader Interactive business.
We successfully executed a $1,207m accelerated
non-renounceable entitlement offer to fund the transaction
which was very well supported by our retail and institutional
shareholders. We anticipate completing the deal late in the
first quarter or early in the second quarter of FY23.
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carsales Annual Report 2022
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FY22 has been a transformational year for the
company as we celebrate our 25th anniversary.
We have delivered outstanding results despite
ongoing disruptions and volatility caused
by COVID-19.
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carsales Annual Report 2022
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CHAIR AND CEO LETTER CONTINUED
The growth in our media business has also been very
pleasing this year. Our strategy of diversifying into more
native ad placements as well as into non-automotive
segments is paying dividends and is reflected in our third
consecutive half year of double digit revenue growth. From
a dealer perspective, there is strong momentum with our
digital car buying experience, carsales Select and we are
making steady progress in developing our value proposition
for both consumers and dealers alike. With rising interest
rates it is important for dealers to be able to showcase their
finance offerings to potential car buyers to differentiate
their vehicles from those of their competitors and our
finance offering has continued to make good progress
and has excellent momentum heading into FY23.
International
Our international growth strategy continues to deliver.
We have an enviable portfolio of assets, which are key
pillars of our long term growth strategy. Our three largest
international assets in South Korea, the United States and
Brazil continue to demonstrate impressive growth profiles,
with each delivering double digit growth in revenue and
EBITDA in FY22.
In South Korea, we had another outstanding year from a
business performance perspective, with constant currency
revenue up 17% and Adjusted EBITDA up 16%. The key
strategic focus areas of the business are to increase
the penetration of Guarantee Inspection, Dealer Direct
and Home Delivery products and the business has been
successful in growing all three of these in the last
twelve months.
In the US, we have delivered excellent constant currency
revenue and Adjusted EBITDA growth of 11% and 16%
respectively. This reflects a very strong performance in
RVs, a good and improving result in Powersports and flat
growth in Trucks due to ongoing inventory issues. There is
significant upside potential for the business, particularly
under 100% carsales ownership moving forward.
In Brazil, the business has performed very strongly over
the last twelve months and has increased its market
leadership and grown its number of dealer customers.
The business has executed a regional expansion program
which will grow the brand in regions outside of Sao Paulo
and Rio de Janeiro where the webmotors brand has not
been as strong over the coming financial year. There is
significant long term financial upside if we execute this
plan well.
In Chile, business conditions and financial performance
have started to improve with inventory growing strongly.
Mexico remains challenging with new car sales and
inventory levels still remaining suppressed.
Financial Performance and Capital
Management
The Group’s results reflect the strength of our business
model and core value proposition. The Group delivered
excellent growth across our three primary financial metrics
of Adjusted Revenue, Adjusted EBITDA and Adjusted NPAT,
demonstrating the continued strength of our Australian
and International businesses. FY22 Adjusted Revenue was
up 16% on pcp to $510m, driven by solid performance
in our Australian business and excellent growth in our
International businesses. Adjusted Earnings Before Interest,
Tax, Depreciation and Amortisation (EBITDA) was up
7% to $272m with EBITDA margins of 53%. The earnings
performance reflects the ongoing strength of our business
model as the company continues to utilise its operating
leverage and exercise strong cost discipline, whilst
continuing to invest in key growth projects.
Adjusted Net Profit After Tax (NPAT) increased 27%
to $195m driven by our EBITDA growth and the profit
contribution from our 49% ownership of Trader Interactive.
The Board has declared a final FY22 dividend of 24.5c per
share bringing total dividends paid to shareholders for
FY22 to 50.0c per share for the year.
From a balance sheet perspective, the Trader Interactive
acquisition will be partly funded by replacing debt at the
Trader Interactive level with debt at the carsales level. We
are looking to increase our facility size from $900m to
$1,400m which provides us with ongoing funding flexibility
post completion of the acquisition. We expect to maintain
a strong balance sheet post acquisition with leverage of
approximately 2.7x net debt to EBITDA. We will also retain
our existing dividend payout policy of 80% of Adjusted NPAT.
Operational Highlights
Australia
Growth has accelerated in our Australian business which
is predicated on our ability to continuously innovate and
deliver product improvements for consumers, dealers and
manufacturers.
A good illustration of this is the continued development,
enhancement and growth of our private seller value
proposition through the traditional private sell process
as a well as our ‘Instant Offer’ selling option for consumers.
Volumes have grown strongly in each of these areas, with
units sold increasing by more than 16% in FY22, a result
of continued user improvements, a strong trust and safety
environment, enhancements to our pricing engine, adding
more dealers to the Instant Offer platform, expanding
the range of cars covered by Instant Offer and developing
consumer awareness through our recent advertising
campaigns. We only see continued upside potential over
the next few years for this area of our business, particularly
given it is digitising the sale of vehicles which is becoming
increasingly attractive for consumers.
6
carsales Annual Report 2022 Our people
Our success is directly attributable to the capability,
loyalty and culture of our team. I am proud that our people
continue to remain highly engaged, showing resilience and
determination in what has been another challenging year.
In a highly competitive talent market, we have remained
focused on retaining our incredibly talented people as well
as continuing to attract new talent to support our growth.
As a business we have always prided ourselves on our
inclusive work environment. This has enabled us to
successfully introduce a new way of working this year,
providing our people the autonomy to choose where they
do their best work – office, hybrid or anywhere. This
approach has seen many added benefits for our people
and the business, including providing us access to even
wider and more diversified talent pools outside of our
traditional office locations.
A few highlights from the last year include:
on climate change and this year we achieved carbon
neutral status in our Australian business operations.
Our focus now turns to achieving this in our international
businesses as well as providing the best available
information for our consumers to make environmentally
friendly vehicle purchases, to support Australia’s transition
to an electric vehicle future.
The Audit Committee has overseen the competitive tender
for carsales’ external auditor and has reappointed PwC.
The Board Risk Committee continues to focus on identifying
and monitoring our key risks as a business. As an online
vertical marketplace business, cybersecurity and protecting
customer and consumer data are critical focus areas for
carsales. We continue to invest heavily in our security
infrastructure to ensure the integrity of our customer
data and provide policies, training and education to our
employees on responsible data use and cyber security.
We cannot become complacent in this area and will
continue to invest to ensure we keep pace with the
changing risk management and security landscape.
• Being recognised as a Great Place to Work® for the fifth
consecutive year;
• Maintaining our Workplace Gender Equality Agency
(WGEA) Employer of Choice for an eighth consecutive year
and becoming a certified Family Inclusive Workplace™;
• Being named as an Australian Association of Graduate
Employers (AAGE) Top Graduate Employer; and
• Achieving a 6% uplift in overall employee engagement
in our 2022 employee opinion survey.
Towards a successful FY23
We are incredibly proud of our achievements in FY22 and
even more excited about the year ahead as we move to
100% ownership of Trader Interactive. Thank you to our
wonderful carsales people who are responsible for all
we have achieved in the last twelve months. And finally,
on behalf of the board, thank you to our customers and
shareholders for their continued support and we look
forward to working with you all in FY23.
Governance
Environmental, Social and Governance (‘ESG’) issues are
rightly taking a more prominent role in the corporate
world and community more broadly. We take these matters
very seriously and as a result have recently established
a new Sustainability Board Sub-Committee to oversee the
Group’s ESG strategy. We are dedicated to building an
environmentally friendly business that has a strong social
conscience. We are focused on reducing carsales’ impact
Pat O’Sullivan
Non-Executive Chair
Cameron McIntyre
Managing Director and CEO
We are dedicated
to building an
environmentally
friendly business that
has a strong social
conscience.
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carsales Annual Report 2022
WHAT WE DO
carsales.com Ltd is the #1 online automotive marketplace business in Australia with a growing global presence in Asia and
the Americas. carsales.com Ltd also operates a number of market leading websites in non-automotive verticals including
motorcycles, boats, caravans, trucks and heavy machinery.
Our aim is to make buying and selling vehicles a great experience. We achieve this by leveraging our consumer
audience and technology platform to bring together dealers, consumers and Original Equipment Manufacturers
(OEMs) in one environment.
OUR MARKETS
carsales built its name in Australia but over the last 10 years we have increasingly become a global player. Our global
markets have a combined population of 750 million people and car sales volumes of approximately 25 million per annum.
The markets we have entered have been carefully selected based on criteria including macroeconomic attractiveness,
digital maturity and market dynamics. We leverage our world-class technology and intellectual property to accelerate
the growth in these businesses and have a strong track record of delivery.
Our recent acquisition of Trader Interactive, has allowed us to deepen our exposure to the very attractive non-automotive
vehicle markets in the US including caravans, powersports, trucks and commercial equipment.
Expected completion
Sep 2022
8
carsales Annual Report 2022 OUR AUSTRALIAN BUSINESS
In Australia, we are market leaders in online classifieds in a number of industries including cars, motorbikes, boats,
trucks and commercial equipment.
Our ecosystem
Dealers
>6K dealers
Sell direct
to dealer
Technology platform
for dealers
Consumer
enquiries
>1m ads/year
Our classifieds websites
Instant Offer
>500K ads/year
20bn+ ad impressions
Sell
28m visits/month
>100 advertisers
Consumers
OEMs
Buy
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carsales Annual Report 2022AUDITOR’S INDEPENDENCE DECLARATIONOUR AUSTRALIAN BUSINESSAUSTRALIAN HIGHLIGHTSOUR INTERNATIONAL BUSINESSINTERNATIONAL HIGHLIGHTSOUR PEOPLE. OUR CULTURE.DIRECTORS’ REPORTCORPORATE GOVERNANCESUSTAINABILITY REPORTOUR BOARDOUR PEOPLE AND CULTURE CHAIR’S MESSAGEREMUNERATION REPORTOTHER DIRECTORS’ REPORT DISCLOSURES
OUR AUSTRALIAN BUSINESS CONTINUED
Dealers
DEALER BUSINESS
Our dealers are key stakeholders and a critical part of carsales’ success. Our more than
6,000 dealers advertise over 1 million new and used vehicles per year on which they receive
over 3 million enquiries from consumers.
Our proprietary inventory and lead management technology platform, called AutoGate, allows
dealers to:
• manage, publish and promote inventory items to our network of websites;
• receive and manage enquiries from consumers; and
• analyse and understand their market by accessing digital insights and reporting from carsales.
Our dealer community
Value-added
Services
• Pricing and valuation tools
• Photography
• Web Services
> 6,000
dealers
Inventory
Promotion
• Depth (ranking)
• Media solutions
• Main Event
> 1m items
published
annually
> 3m customer
enquiries sent
to Autogate
> 28m website visits / month
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carsales Annual Report 2022 Consumers
PRIVATE BUSINESS
Approximately 5 million consumers visit our network of websites every month – that’s
~20% of the Australian population! We aim to make buying and selling a great experience
for our consumers.
A private seller on carsales can choose to run the sales process by themselves, utilising our
suite of value-added tools including pricing analysis and vehicle inspections. Alternatively,
they can sell directly to dealers through our Instant Offer program which facilitates a quick
sale at a transparent price.
Our private seller platform
Post an ad
Hide your
personal number
from buyers
Tools to help
you price your
car to sell
Get car information
you won’t find
anywhere else
Build buyer
confidence with a
vehicle inspection
OR
Instant Offer
We sell it for you
If you don’t have the time to sell your car, we can sell it fast for you.
We price the car, our dealer network buys it.
Get your price
We collect the car
Get paid fast
Enter in your details and answer
a few questions to get your
official Instant Offer
You can drop off your car
for free or we’ll pick it
up for you
Payment is made the
next business day,
once the car is collected
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carsales Annual Report 2022AUDITOR’S INDEPENDENCE DECLARATIONAUSTRALIAN HIGHLIGHTSOUR INTERNATIONAL BUSINESSINTERNATIONAL HIGHLIGHTSOUR PEOPLE. OUR CULTURE.DIRECTORS’ REPORTCORPORATE GOVERNANCESUSTAINABILITY REPORTOUR BOARDOUR PEOPLE AND CULTURE CHAIR’S MESSAGEREMUNERATION REPORTOTHER DIRECTORS’ REPORT DISCLOSURES
OUR AUSTRALIAN BUSINESS CONTINUED
OEMs
MEDIA BUSINESS
The quality and quantity of our audience has made carsales the number one destination to buy
new and used cars.
We help our 100+ OEMs to achieve their goals by ensuring they’re reaching consumers at each
stage of the vehicle buying journey. We do this by leveraging our editorial program, our online
new car showroom as well as specialised audience targeting in our listings environment.
Our media offering
Building Brand
Awareness
Gaining
Consideration
Converting
Into
Buyers
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Homepage buyout
Model showcase
New car showroom
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AUSTRALIAN HIGHLIGHTS
Multiple Domestic Growth Opportunities
Marketplaces
Dynamic Pricing
carsales has extended its lead as the most
preferred website to buy and sell cars
in Australia.
Our dynamic pricing strategy aims to better align
the price charged with value delivered. This has
enabled us to charge more for higher priced
cars where the value we deliver is very strong,
resulting in a significant uplift in private ad yield.
Most Preferred Website1
Private Ad Yield ($)
#2
carsales
40%
31%
2.6x
12%
6.7x
6%
145
125
105
85
65
45
25
FY21
FY22
FY16
FY17
FY18
FY19
FY20
FY21
FY22
Media & Membership
Dealer Finance
We are executing on our strategy to diversify our
media customer base and improve our mobile
and native advertising products.
Helping dealers to increase their finance
penetration through integrated finance
placements on carsales is a key priority.
Media Revenue ($m)
Dealer Finance Listings
29
26
23
24
21
H2 FY20
H1 FY21
H2 FY21
H1 FY22
H2 FY22
H1 FY21
H2 FY21
H1 FY22
H2 FY22
1. Study conducted by independent research agency, Nature Pty Ltd, “market brand health tracker June 2022”. If you had to choose one tomorrow,
which one would you most prefer for buying or selling a new / used car?
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carsales Annual Report 2022AUDITOR’S INDEPENDENCE DECLARATIONOUR INTERNATIONAL BUSINESSINTERNATIONAL HIGHLIGHTSOUR PEOPLE. OUR CULTURE.DIRECTORS’ REPORTCORPORATE GOVERNANCESUSTAINABILITY REPORTOUR BOARDOUR PEOPLE AND CULTURE CHAIR’S MESSAGEREMUNERATION REPORTOTHER DIRECTORS’ REPORT DISCLOSURES
AUSTRALIAN HIGHLIGHTS CONTINUED
• Demand for a fully online buying experience is increasing and in response we launched online buying service
‘carsales Select’ in August 2021
• More than 2,000 cars are currently listed on the Select platform and time to sell is approximately 2x faster
than a standard listing
• Trade-in pricing has now been integrated into Select and dealer finance is being integrated now
Pre-negotiated
price
Certified
inspection report
Instantly
reserve online
7-day money-back
guarantee
3-month limited
warranty
Using carsales’ pricing
algorithm to ensure
pricing is competitive
Car accompanied by
Inspection & Facts+
Report and
imperfection photos
carsales holds
refundable
reservation fee and
listing is de-listed
Instils confidence
by replicating test
drive experience
Showcase dealer
statutory
warranties
Ref:DSH352004
Dealer inspection report
Date completed: 02/03/2021
$60,990
$3,510
Dealer Demo
WA - Distance from me?
$60,990
$3,510
$60,990
$3,510
$60,990
$3,510
Dealer Demo
WA - Distance from me?
Dealer Demo
WA - Distance from me?
Dealer Demo
WA - Distance from me?
Money back guarantee
Money back guarantee
Money back guarantee
Money back guarantee
• Instant Offer provides a fast, convenient and transparent way for people to sell their car. Consumers can sell their car
quickly at a price offered by carsales, and drop-off at one of our participating dealers
• FY22 transaction volume grew 19% vs pcp, and we released our new pricing engine which allows broader and more
accurate pricing of cars, improving conversion
Key Sales Funnel Steps
Growth Drivers
FY22 Quarterly volumes
Consumer
acquisition
to offer
Increase volume: Improve brand
awareness through above the line
advertising to target a broader
audience
Offer to
acceptance
Improve pricing model: Evolve
our machine learning capability to
optimise our pricing engine
Acceptance
to sale
Dealer Experience: Manage
the Net Promoter Score (NPS)
of dealers to ensure consumers
are satisfied at the dealership
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Q1 FY22
Q2 FY22
Q3 FY22
Q4 FY22
carsales Annual Report 2022 Demand for a fully online buying experience
is increasing and in response we launched
our online buying service ‘carsales Select’
in August 2021
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carsales Annual Report 2022AUDITOR’S INDEPENDENCE DECLARATIONOUR INTERNATIONAL BUSINESSINTERNATIONAL HIGHLIGHTSOUR PEOPLE. OUR CULTURE.DIRECTORS’ REPORTCORPORATE GOVERNANCESUSTAINABILITY REPORTOUR BOARDOUR PEOPLE AND CULTURE CHAIR’S MESSAGEREMUNERATION REPORTOTHER DIRECTORS’ REPORT DISCLOSURES
INTERNATIONAL BUSINESSES
We have an international portfolio of market-leading, fast-growing businesses
that present a significant long-term growth opportunity.
• Market leading platform of non-automotive
marketplaces across RV, powersports, truck
and equipment industries in the US
• Clear market leader in automotive classifieds
in South Korea with a strong track record of
growth over the last 7 years
• Non-automotive classifieds are less digitally
• Strategy is to increase the penetration of
mature than automotive markets, meaning the
business is well positioned to capture upside
from further dealer penetration, monetisation
and synergies across its key verticals
premium services for dealers, consumers
and OEMs. Key growth drivers include
Guaranteed inspection, Dealer Direct
and Home Delivery products
14m
763k
23m
152k
Monthly visits
Published inventory
Monthly visits
Published inventory
• No.1 position in the large Brazil automotive
• Chileautos is a profitable and strong
market, with very strong growth over
the last 4 years since the major recession
in Brazil ended
• Substantial growth opportunity given the size
and immaturity of the market. Key growth
drivers include increased dealer and consumer
penetration particularly in areas outside
Sao Paulo and Rio. Dealer Finance is also
a significant revenue opportunity
number one player in the Chile market with
a strong growth trajectory through increased
penetration and monetisation of dealers
• Mexico is an earlier stage investment.
The focus is to grow market leadership
28m
407k
8m
133k
Monthly visits
Published inventory
Monthly visits
Published inventory
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carsales Annual Report 2022 INTERNATIONAL HIGHLIGHTS
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In June 2022, we exercised the call option over the remaining 51% stake
in Trader Interactive with completion expected in late Q1/early Q2 of FY23
FY22 key highlights
• Excellent financial performance with constant
currency Adjusted Revenue and EBITDA up 11% and
16% respectively
• Good progress in enhancing our technology and product
capability, highlighted by the launch of an end-to-end
digital retailing product on cycletrader.com
• Grown our audience market leadership position in RVs
• Increased our customer base by 7% and improving
and Powersports and strong progress in closing the gap
in our Commercial verticals
inventory levels
Published Inventory (000)1
Subscribed Dealers (000)
500
400
300
200
100
0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
RV
Power Sports
Trucks
Equipment
RV
Power Sports
Trucks
Equipment
Jun-21
Jun-22
Jun-21
Jun-22
1. Monthly Unique Listings
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carsales Annual Report 2022AUDITOR’S INDEPENDENCE DECLARATIONOUR STRATEGYCHAIR AND CEO LETTERWHAT WE DOOUR MARKETSOUR AUSTRALIAN BUSINESSDIRECTORS’ REPORTCORPORATE GOVERNANCESUSTAINABILITY REPORTOUR BOARDOUR PEOPLE AND CULTURE CHAIR’S MESSAGEREMUNERATION REPORTOTHER DIRECTORS’ REPORT DISCLOSURESOUR OPERATIONAL HIGHLIGHTS
INTERNATIONAL HIGHLIGHTS CONTINUED
Excellent FY22 performance, achieving double-digit revenue growth and
continued expansion of key products and services
FY22 key highlights
• Good growth in our consumer audience
• Digital trade in product, Dealer Direct, continued to grow
strongly supported by a growing number of buyers
and sellers
• Excellent growth in the number of cars inspected through
our “Guarantee” inspection program
Visits (m)
Dealer Direct Volume
Guarantee Inspection Penetration
+5%
+56%
+12%
50%
40%
30%
20%
10%
0%
FY21
FY22
Jun-21
Jun-22
Jun-21
Jun-22
300
250
200
150
100
50
0
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carsales Annual Report 2022 I
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webmotors’ growth accelerated in FY22 driven by the continued enhancement
of our consumer and dealer value proposition
FY22 key highlights
• Inventory and dealer volumes increased significantly with
private volumes doubling and dealer volumes up 30% vs.
pcp. Regional expansion plan continued successfully with
~750 new dealers signed. Total subscribed dealers are
approximately 18,000
• Excellent growth in our value added CRM and
training products
• Increased monetisation with revenue per dealer
up 28% vs. pcp, with increasing contribution
from listing depth products which is becoming
a material contributor
Inventory (000)
Dealer Yield
Subscribed Dealers (000)
500
400
300
200
100
0
+39%
+28%
+4%
20
15
10
5
0
FY21
FY22
FY21
FY22
Jun-21
Jun-22
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carsales Annual Report 2022AUDITOR’S INDEPENDENCE DECLARATIONOUR STRATEGYCHAIR AND CEO LETTERWHAT WE DOOUR MARKETSOUR AUSTRALIAN BUSINESSAUSTRALIAN HIGHLIGHTSOUR INTERNATIONAL BUSINESSOUR PEOPLE. OUR CULTURE.DIRECTORS’ REPORTCORPORATE GOVERNANCESUSTAINABILITY REPORTOUR BOARDOUR PEOPLE AND CULTURE CHAIR’S MESSAGEREMUNERATION REPORTOTHER DIRECTORS’ REPORT DISCLOSURESOUR OPERATIONAL HIGHLIGHTS
OUR PEOPLE. OUR CULTURE.
269
1001
people joined the
carsales group
graduate program
applications
91%
50%
of our people would
recommend carsales
a great place to work
of promotions and internal
appointments went to
female team members
93%
138
of our people feel
genuinely supported
to make use of flexible
working arrangements
mentors and mentees
across two Mentor
Program intakes
3,125 hours
of formalised training sessions and professional
development workshops delivered to
2,191 attendees globally
300
AI
Hackathon
Over 300 #wearecarsales
Award nominations across
the carsales group
203 participants,
18 projects
20
carsales Annual Report 2022 Things that make us incredibly proud
Over the past year, we have worked hard to deliver
on our goal of being a destination for talent by continuing
to attract and retain incredible people. We have been:
• Great Place to Work® certified for five consecutive years;
• A Workplace Gender Equality Agency (WGEA) Employer of
Choice and certified Breastfeeding Friendly Workplace for
eight consecutive years;
• An Australian Association of Graduate Employers (AAGE)
Top Graduate Employer in 2019, 2020 and 2022; and
• Most recently we became a Family Inclusive Workplace™
and were named on the 2022 AAGE Top Intern Programs
list, placing 5th across all of Australia.
Additionally, our Australian business operations were
recently certified carbon neutral under the Australian
Government’s carbon-neutral certification program
Climate Active.
Many of these accolades have been achieved through
our people being surveyed and sharing their experiences
of working at carsales, which makes them particularly
meaningful.
Be a big part of something big
One of the best things about carsales is that our people get
to be a big part of something big. We may be a global
ASX100 business, but we’re still small enough for everyone
to be heard, work on projects with meaning and make real
impact. Our uniqueness comes from having the rare
combination of being able to provide all the benefits of a
big tech company – being growth, security and resource –
coupled with the feeling of a small organisation, which gives
agility, opportunity and autonomy to our people. Our
openness to new thinking coupled with our flat structure
and accessible leadership team means that every good idea
can become a reality.
For the past 25 years we’ve backed our people to make
new ideas happen and have created an environment in
which every team member has the chance to do work that
delivers significant customer value. We aim to provide our
people with a dynamic workplace experience which
transcends a mere list of perks and benefits.
This, in conjunction with our caring and inclusive culture,
is what we believe sets us apart and makes us a great
place to work. Whether we are talking about our people,
our customers or our community, the initiatives and
programs that we run considers whether what we are
doing is going to be equally accessible to all. Why do
we do it? Not only is it the right thing to do, but we know
that if our team feels cared for and a sense of belonging,
then so will our customers.
Autonomy to choose
One of our key learnings from the COVID-19 pandemic
was that our people can work from anywhere successfully
- which is why we now give our Australian and New Zealand
team members the autonomy to choose their working
location. Our people have three working options:
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carsales Annual Report 2022AUDITOR’S INDEPENDENCE DECLARATIONOUR STRATEGYCHAIR AND CEO LETTERWHAT WE DOOUR MARKETSOUR AUSTRALIAN BUSINESSAUSTRALIAN HIGHLIGHTSOUR INTERNATIONAL BUSINESSINTERNATIONAL HIGHLIGHTSDIRECTORS’ REPORTCORPORATE GOVERNANCESUSTAINABILITY REPORTOUR BOARDOUR PEOPLE AND CULTURE CHAIR’S MESSAGEREMUNERATION REPORTOTHER DIRECTORS’ REPORT DISCLOSURESOUR OPERATIONAL HIGHLIGHTS
OUR PEOPLE. OUR CULTURE. CONTINUED
We believe in creating a culture where our people can do
their best work, irrespective of their physical location. We
recognise that some of us do our best work in an office
setting, and some of us work best from somewhere else.
The reason Autonomy to Choose works for us is because
of the trust that we have in one another.
To ensure that we can still nurture the human connection
that we all care about so much, we bring our whole team
together in-person at various points throughout the
year for companywide events. These events are a great
opportunity to collaborate and learn from each other,
foster team connection, and get together for some relaxed,
social fun.
An added benefit of Autonomy to Choose is that because
there is no longer a requirement to work from an office,
our team members have the opportunity to work from
overseas for periods of time. This is particularly beneficial
to those who have family living overseas. We’ve also seen
some team members permanently relocate regionally and
interstate, and it’s opened up our ability to hire incredible
talent outside of the cities where our offices are located.
The response from our team since implementing Autonomy
to Choose has been overwhelmingly positive. In our March
2022 Employee Opinion Survey, we saw a 6% uplift in our
overall engagement score. Other highlights included:
• “I would recommend carsales as a great place to work”
91% favourable response (+7% YoY)
• “We are genuinely supported if we choose to make use of
flexible working arrangements” 93% favourable response
(+13% YoY)
• “We have enough autonomy to perform our jobs
effectively” 92% favourable response (+7% YoY)
22
As we move forward as a team – whether we work together
in-person, virtually or a mix of both – we know that it’s
crucial that we’re mindful of others and continue to be
inclusive of everyone, no matter where they choose to
work from. To support our leaders through this transition
and ensure we reset as we move forward, our people
managers have been undertaking a bespoke training
program called Leading for Inclusion and Belonging. This
training addresses how we can continue to foster a sense
of inclusion and belonging in geographically dispersed
teams and helps our leaders think about how their
leadership style may need to adapt to ensure that our
teams continue to perform at their full potential.
Investment in our people
This year, we were proud to introduce an Employee Share
Plan (ESP) for all permanent Australian team members.
We want our people to be able to share in the success and
growth of carsales. Our ESP is a matched plan which allows
team members the opportunity to sacrifice pre-tax salary to
purchase carsales shares, and this investment is matched
by the company. 63% of eligible team members opted into
our ESP in year one. This result shows us that our people
believe in our business and what we are collectively
working towards.
In early 2022 we welcomed our fifth cohort of Technology
graduates into the business, and we were recognised
as a Top Graduate Employer for the third time by the
Australian Association of Graduate Employers. Our
program gives graduates broad carsales experience
and provides formal mentoring and support from our
talented leaders who are passionate about investing in
their development. We were also pleased to see all our
2021 graduates be offered permanent roles within carsales
at the conclusion of their 18-month graduate program.
carsales Annual Report 2022 product innovation for our customers is another
reason why they are so important to us.
We have continued to embed our behaviours into
everything we do through the #wearecarsales Awards.
These quarterly awards are peer nominated and designed
to recognise those living our carsales behaviours and
bringing them to life. Throughout the year we received
over 300 nominations across the carsales group and
celebrated 20 worthy winners – five per quarter.
In 2022, we announced three members of the carsales
team as recipients of our annual CEO Scholarship – two
from Australia and one from Chile. The CEO scholarship
is open to all team members globally and is an opportunity
to receive a grant to complete a further education or
learning opportunity of their choice. This year’s winners
will be undertaking a wide range of learning opportunities
including Graduate Certificates in Marketing, Professional
Certificates in Digital Transformation and courses in Design
Strategy and Service Futures.
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As we continue to operate in a tight talent market, we
explore new and alternate pathways to attract highly
talented individuals to carsales. One of the ways in which
we are fostering a pipeline of digital talent is through
internships – both at the early and mid-career level.
This year we welcomed 13 interns through three
different programs:
• The Victorian Government’s Digital Jobs program
– which aims to build the state’s digital workforce
by training and upskilling mid-career Victorians
so they can transition into digital careers;
• CareerSeekers - a non-profit organisation supporting
refugees and asylum seekers, who are either mid-career
or university students, to transition into professional
careers in Australia; and
• The Monash University Industry Based Learning (IBL)
program - providing undergraduate IT students with
work opportunities in a corporate setting, allowing
them to develop sought-after employability skills.
Of the interns who have completed their internships
to-date, 100% have resulted in permanent employment
opportunities within carsales. This demonstrates that
investing in internships is proving to be a successful
talent pathway for us. We were also thrilled to learn that
carsales was named on the 2022 Australian Association
of Graduates Employers Top Intern Programs list, placing
in the top five employers across Australia.
Our annual hackathon this year was AI themed with 203
team members across the globe working on 18 different
projects. We’re passionate about hackathons because
they bring our people together to collaborate, invent,
innovate, experiment with new ideas and learn.
Seeing many hackathon ideas develop into tangible
The Victorian Digital Jobs Program gave me the opportunity to pivot my career, explore and
deep dive into the world of Tech and Product Management. Securing a Product Management
internship with carsales is a greatly desired position to be in, and I feel so fortunate to be
here. As soon as I joined I felt welcomed and part of the carsales family, and have been
well supported in my career journey thus far. Working within the Retail team helped setup
a strong foundation of knowledge and experience, and I was able to explore the many facets
of Product Management. It felt great adding value and contributing to projects, even at this
early stage of my new career path. To my delight I was offered a permanent position and
look forward to continually learning and developing my career within the Dealer tribe with
such skilled and wonderful group of people.
— Rose Peart, Associate Product Manager
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carsales Annual Report 2022AUDITOR’S INDEPENDENCE DECLARATIONOUR STRATEGYCHAIR AND CEO LETTERWHAT WE DOOUR MARKETSOUR AUSTRALIAN BUSINESSAUSTRALIAN HIGHLIGHTSOUR INTERNATIONAL BUSINESSINTERNATIONAL HIGHLIGHTSDIRECTORS’ REPORTCORPORATE GOVERNANCESUSTAINABILITY REPORTOUR BOARDOUR PEOPLE AND CULTURE CHAIR’S MESSAGEREMUNERATION REPORTOTHER DIRECTORS’ REPORT DISCLOSURESOUR OPERATIONAL HIGHLIGHTS
OUR PEOPLE. OUR CULTURE. CONTINUED
Women in Tech
Our Women in Tech group is made up of females
across the carsales group in technical, non-technical
and general business roles. The group has gone from
strength to strength with the introduction of our
new Women on the Move program. The goal of this
program is to provide practial skills development
workshops covering personal brand, career goal
setting, optimising strengths, communicating with
assertiveness, generating influence, and building
networks and visibility.
The Women in Tech group has also attended external
events such as the recent Girls In Tech conference
and we have re-signed as a sponsor of the Go Girl
Go For IT conference – a free one-day technology
conference for girls in years 5-12 across Australia.
We look forward to continuing to support initiatives
such as these which aim to encourage students to
pursue a career in technology.
Diversity, Equity and Inclusion
We continue to foster a workplace that values diversity,
equity and inclusion and are proud to have scored a 95%
favourable response to the Diversity statements posed in
our March 2022 engagement survey. In 2022 we were
awarded the WGEA Employer of Choice citation for a
further two years. We have been awarded the citation every
year since 2015 and are one of only 120 organisations in
Australia to hold it at present. Our CEO, Cameron McIntyre,
has continued to lead our efforts in this space as a WGEA
Pay Equity Ambassador and board member for Inclusive
Australia. We are also proud to have maintained 40%
female representation at the Australian Senior Leadership
Team level.
In addition, we remain a Best Practice Breastfeeding
Friendly Workplace and a business that is inclusive
and welcoming of the LGBTIQA+ community via the
Welcome Here Project. We have continued to celebrate
important events such as International Women’s Day
and International Day Against Homophobia, Biphobia,
Interphobia and Transphobia with guest speakers who
inspire and educate our people.
This year, we also became a certified Family Inclusive
Workplace™ for the first time. Family Friendly Workplaces™
is a partnership between Parents At Work and UNICEF
Australia to improve work life wellbeing, inclusion and
equity outcomes for families by introducing a set of six
certifiable standards for employers. Our certification
submission outperformed the cohort in five of the six
standards. Achieving this accolade recognises that our
policies, practices, guidelines, leadership and culture
support our people regardless of what stage of life they
are at in their family. We are thrilled to be one of the first
70 organisations to be certified as a Family Inclusive
Workplace™ in Australia.
24
carsales Annual Report 2022 Climate Active certified
This year, our Australian business operations were
certified carbon neutral under the Australian Government’s
carbon-neutral certification program Climate Active. Climate
Active curates what is considered one of the world’s most
rigorous carbon neutrality certifications programs and
this achievement solidifies our commitment to minimising
environmental impact, reducing emissions, and
championing positive climate action.
We achieved carbon neutrality by offsetting 100% of our
Australian carbon emissions by investing in four important
carbon offset projects. As a global business, our approach
to carbon offsetting is to support a mix of community,
conservation, and renewable energy projects both locally
and internationally. In Australia, it was important for
carsales to align with a project that provides environmental,
cultural, economic and social benefits to the Traditional
Custodians of our lands - the Aboriginal and Torres Strait
Islander communities. The Karlantijpa North Savanna
Burning project does just this by combining traditional
knowledge with innovative techniques to reduce emissions
associated with savanna fires.
Overseas, we have invested in two conservation projects
being NIHT Topaiyo REDD+ and Pacajai REDD+. The former
conserves endangered tropical rainforests in Papua
New Guinea, which is Australia’s closest neighbour and
a country with whom Australia shares a rich history and
strong bilateral relationship. The latter is helping to reduce
deforestation in the Amazonian rainforests of Brazil.
Brazil is a country that we have had close ties to since
2013 when we acquired a 30% stake in webmotors.
From a renewable energy perspective, we have invested
in the Midilli Hydroelectric Power Plan in Turkey. This
project demonstrates our commitment to supporting
low emission electricity generation. This is important
to us given the continued rise of electric, hybrid and low
emission vehicle sales around the globe and the role that
we play in partnering with manufacturers, dealers and
consumers as this transformation takes place.
We are taking a number of steps towards reducing
emissions, which includes developing a detailed emissions
reduction strategy with time-bound targets. Our head office
building in Melbourne is also certified carbon neutral
through the National Australian Built Environment Rating
System (NABERS). We continue to work with our building
owners and landlords around Australia to explore ways that
we can continue to reduce our energy consumption and
waste impact. We also intend to be strategic when looking
at any future tenancies in terms of their location and
proximity to public transport and ensuring they have
high NABERS base building ratings.
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Commmunity
We are proud to have continued our partnership with
CS in Schools for a third consecutive year. CS in School’s
mission is to create sustainable change in Australian digital
technical education by providing a complete DigiTech
pathway for secondary students and developing teacher
confidence in relation to delivering digital technology
classes. Our team enjoy volunteering their time to support
this cause, and we were thrilled to be recognised by CS
in Schools at their 2021 awards night as their Supporter
of the Year.
We have also continued to mentor students via the Monash
Postgraduate Industry Experience mentoring program,
and this year for the first time have supported headspace’s
Work and Study support program. headspace provides
early intervention mental health services to 12-25 year-olds,
and we have volunteered our time by participating in mock
interviews with their clients who are being supported to
find employment opportunities.
Our partnership with Swinburne University has also
continued through our sponsorship of a second female
student to undertake a degree in Computer Science and
Information Technology at Swinburne University through
our carsales Foundation Women in IT scholarship. Similarly,
our partnership with The Smith Family has continued and
we have sponsored seven school children around Australia
through the Learning for Life program and raised much
needed funds for their Christmas Appeal.
25
carsales Annual Report 2022AUDITOR’S INDEPENDENCE DECLARATIONOUR STRATEGYCHAIR AND CEO LETTERWHAT WE DOOUR MARKETSOUR AUSTRALIAN BUSINESSAUSTRALIAN HIGHLIGHTSOUR INTERNATIONAL BUSINESSINTERNATIONAL HIGHLIGHTSDIRECTORS’ REPORTCORPORATE GOVERNANCESUSTAINABILITY REPORTOUR BOARDOUR PEOPLE AND CULTURE CHAIR’S MESSAGEREMUNERATION REPORTOTHER DIRECTORS’ REPORT DISCLOSURESOUR OPERATIONAL HIGHLIGHTS
DIRECTORS’ REPORT
Your Directors present their report
on the consolidated entity (referred
to hereafter as the Group or carsales)
consisting of carsales.com Ltd and
the entities it controlled at the
end of, or during, the year ended
30 June 2022 (FY22).
Operational and Financial Review
Principal Activities
carsales is the leading digital automotive and non-
automotive vehicle marketplace in Australia, with a
growing global presence in Asia, Latin America and
North America. We are the go-to place to buy and
sell cars, bikes, boats, trucks, caravans and much more
across our network of sites.
Our key services, customers and geographies for
continuing operations include:
Online Advertising Services
carsales’ Online Advertising Services can be broken into
two key product sets – classified advertising and display
advertising services.
• Classified advertising allows our private and dealer
customers to advertise automotive and non-automotive
goods and services for sale across the carsales network.
This segment includes products such as subscriptions,
lead fees, listing fees and priority placement services
(depth products).
• Display advertising involves carsales’ corporate
customers, such as automotive manufacturers
and finance companies, placing display advertising
for their brand or vehicle on carsales’ websites.
These advertisements typically display the product or
service offerings of the corporate advertiser as banner
advertisements, video content or other sponsored links.
Data, Research and Services
This segment comprises a diverse range of solutions for
our customers including software as a service, research
and reporting, valuations, appraisals, website development
and hosting and photography services.
International
carsales has multiple operations in overseas countries
through subsidiaries, equity accounted associate
investments and available-for-sale financial assets
as set out below (subsidiaries unless otherwise stated):
carsales Asia
• South Korea – Encar.com. This is our major business
in this segment. Encar.com is the market leading
digital automotive classified business in South Korea
(100% owned).
• Redbook Asia – provides automotive data services
in New Zealand, Malaysia, Thailand and China.
carsales Americas
carsales operates digital non-automotive marketplaces
in the United States and Canada through its subsidiary
Trader Interactive. carsales owned 49% of Trader Interactive
during FY22 but has recently exercised a call option to
acquire the remaining 51% which will complete in late Q1/
early Q2 of FY23. carsales also operates digital automotive
marketplaces in Brazil, Mexico and Chile. carsales owns 30%
of webmotors S.A., our operating entity in Brazil and equity
accounts this interest accordingly. carsales owns 100% of its
operating entities in Mexico and Chile.
carsales Investments
This segment comprises our standalone investments in the
consumer and wholesale tyre markets, vehicle inspections
and mobility as a service. The subsidiaries included in this
segment are tyresales.com.au, tyreconnect, Redbook
Inspect and Placie.
In addition the Group has investment stakes in Plenti Ltd,
PromisePay Pte Ltd and MX51 Pty Ltd, all of which are
accounted for as financial asset investments. These three
businesses provide innovative fintech products to
consumer and commercial customers.
carsales is the leading digital automotive
and non-automotive vehicle marketplace in
Australia, with a growing global presence in
Asia, Latin America and North America.
26
carsales Annual Report 2022 Review of Results and Operations
$A Millions
Growth
Adjusted Revenue
Total operating expenses
Adjusted EBITDA
EBITDA margin
Depreciation & amortisation
EBIT
Net finance costs
Profit Before Tax
Income tax expense
Profits from associates
Fair Value Revaluation
Non-controlling interests (NCI)
Adjusted NPAT
Adjusted Earnings per share (cents)
Final Dividend per share (cents)
Summary of Reported Results
Reported Revenue
Reported EBITDA
Reported NPAT
Reported Earnings per share (cents)
FY21
437.8
183.6
254.2
58%
31.9
222.3
13.9
208.4
59.4
4.3
-
(0.5)
152.8
61.5
22.5
427.2
241.5
130.7
52.6
FY22
509.5
237.8
271.7
53%
38.6
233.1
13.8
219.3
64.1
40.0
0.2
(0.6)
194.8
69.0
24.5
509.1
269.9
160.8
56.9
$'s
71.7
(54.2)
17.5
-
(6.7)
10.8
0.1
10.9
(4.7)
35.7
0.2
(0.1)
42.0
7.4
2.0
81.9
28.4
30.1
4.3
%
16%
(30%)
7%
-
(21%)
5%
1%
5%
(8%)
826%
-
(26%)
27%
12%
9%
19%
12%
23%
8%
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Financial Summary
In FY22, the Group achieved Reported Revenue growth
of 19%, Reported EBITDA growth of 12% and Reported
Net Profit After Tax (Reported NPAT) growth of 23%
compared to the year ended 30 June 2021 (FY21 or
the prior comparative period (pcp)). In FY22, the Group
achieved Adjusted Revenue growth of 16%, Adjusted
EBITDA growth of 7% and Adjusted Net Profit After
Tax (Adjusted NPAT) growth of 27% compared to FY21.
The Directors believe the additional information on
International Financial Reporting Standards (IFRS)
measures included in this report is relevant and useful
in measuring the financial performance of the Group.
In particular, the presentation of ‘Adjusted Revenue’,
‘Adjusted EBITDA’, ‘Adjusted NPAT’ and ‘Adjusted earnings
per share’ provides the best measure to assess the
performance of the Group by excluding certain non-
recurring or non-cash items relating to rebates, M&A
costs, restructuring, financing, investments and acquired
intangible amortisation from the reported IFRS measures.
A reconciliation of reported net profit to adjusted net profit
is set out in Note 4(b).
Key drivers
Adjusted Revenue growth of 16% reflects the continued
strength of the Group’s operating model through all
economic environments. Adjusted EBITDA growth of 7%
reflects this excellent revenue performance combined with
a good balance of investing in key strategic growth areas
while sensibly managing discretionary costs. Adjusted
NPAT was up 27% which reflects the EBITDA growth
as well as the contribution from Trader Interactive’s profit
throughout the year.
27
carsales Annual Report 2022AUDITOR’S INDEPENDENCE DECLARATIONOUR STRATEGYCHAIR AND CEO LETTERWHAT WE DOOUR MARKETSOUR AUSTRALIAN BUSINESSAUSTRALIAN HIGHLIGHTSOUR INTERNATIONAL BUSINESSINTERNATIONAL HIGHLIGHTSOUR PEOPLE. OUR CULTURE.CORPORATE GOVERNANCESUSTAINABILITY REPORTOUR BOARDOUR PEOPLE AND CULTURE CHAIR’S MESSAGEREMUNERATION REPORTOTHER DIRECTORS’ REPORT DISCLOSURESOUR OPERATIONAL HIGHLIGHTS
DIRECTORS’ REPORT CONTINUED
Adjusted Revenue
Online Advertising
Dealer
Private
Media
Data, Research and Services
Carsales investment
Asia
Americas
Adjusted Revenue
Adjusted EBITDA
Online Advertising
Data, Research and Services
Carsales investment
Asia
Americas
Adjusted EBITDA
EBITDA Margin
Online Advertising Services
• Overall Adjusted Revenue for the segment was up 11%,
reflecting excellent growth in our key Dealer, Private and
Media businesses, recording double digit revenue growth
in each segment in H2. Adjusted EBITDA growth of 9%
is lower than revenue growth due to receiving a ~$6m
wage subsidy via the JobKeeper program in FY21.
Excluding this impact, margins have grown which
reflects good cost management whilst continuing to
invest in key growth projects.
• Dealer Adjusted Revenue was up 6% on pcp to $183.8m
reflecting both solid growth in revenue from traditional
transactional revenue products (particularly leads), a
resilient result for premium listing and depth products
and the growth in our dealer finance product. We have
continued to provide a compelling return on investment
for our dealer customers throughout FY22.
• Private revenue was up 26% on pcp to $69.4m reflecting
strong growth in private ad volumes and yield and
increasing penetration of our Instant Offer product.
• Media revenue was up 15% to $54.5m which is testament
to the execution of our strategy to diversify our product
and customer portfolio.
28
Segment Review
$A Millions
Growth
FY21
FY22
$’s
276.9
174.1
55.3
47.5
42.8
27.1
84.3
6.7
307.7
183.8
69.4
54.5
44.1
56.5
95.4
6.0
437.8
509.5
182.3
198.4
28.6
1.0
43.1
(0.8)
28.8
(1.9)
48.1
(1.6)
254.2
271.7
30.8
9.7
14.1
7.0
1.3
29.4
11.1
(0.7)
71.7
16.0
0.2
(2.9)
(5.0)
(0.8)
17.5
%
11%
6%
26%
15%
3%
109%
13%
(11%)
16%
9%
1%
(292%)
12%
(100%)
7%
58%
53%
-
(5%)
Data, Research and Services
Data, Research and Services revenue was up 3% to $44.1m,
reflecting the continued demand for our Data, Research
and Services from OEMs, dealers and corporate customers.
There was solid growth from our core Redbook data
business which continued to grow volume and yield.
Segment Adjusted EBITDA was up 1% on pcp reflecting
continued prudent cost management and operating
cost leverage.
carsales International
carsales Asia
carsales Asia revenue was up 13% to $95.4m primarily
reflecting the performance of the Encar.com business in
South Korea. Revenue growth in South Korea was driven by
the increased uptake of the Guarantee vehicle inspection
service, more vehicles listed on the site and increasing
penetration of the Dealer Direct (online trade-in) product.
Lower growth in Adjusted EBITDA of 11% reflects growth in
underlying margins, offset by brand marketing investment
in the online trade in market which should deliver long term
shareholder value.
carsales Annual Report 2022 carsales Americas
The Company holds controlling interests in online
automotive advertising companies operating in Chile and
Mexico. Combined constant currency revenue growth of
7% in the region reflects good growth in Chile offset by
weakness in Mexico. Revenue growth rates in all countries
have been impacted by constrained inventory since the
onset of COVID-19, but there are positive signs of recovery
in Chile, whilst Mexico remains challenging. Combined
losses in the region of $1.6m in FY22, reflecting continued
investment to grow our customers, product and audience.
The Group holds equity stakes in Trader Interactive
(49%) and webmotors (30%). These businesses are not
consolidated for accounting purposes, and accordingly the
revenue and EBITDA contributions are not included in the
financial performance above. Nevertheless, we will provide
some commentary on the underlying performances of the
businesses as they do materially contribute to our net
profit results. In June 2022, we announced that we would
be exercising our call option to acquire the remaining 51%
of Trader Interactive for US$809m. This will complete in
late Q1/early Q2 FY23.
Trader Interactive constant currency revenue was up
11% to $195.5m primarily reflecting the excellent growth
in dealer volume, dealer yield and private ads. All sites
are consistently delivering strong audience traffic growth
on pre-COVID levels. Excellent constant currency growth
in Adjusted EBITDA of 16% reflects the strong operating
leverage potential of the business as it continues to
build scale.
webmotors recorded strong underlying constant currency
revenue growth of 26% on pcp reflecting the continued
expansion of dealer numbers and website traffic as well
as an increasing contribution from finance revenues.
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carsales Annual Report 2022AUDITOR’S INDEPENDENCE DECLARATIONOUR STRATEGYCHAIR AND CEO LETTERWHAT WE DOOUR MARKETSOUR AUSTRALIAN BUSINESSAUSTRALIAN HIGHLIGHTSOUR INTERNATIONAL BUSINESSINTERNATIONAL HIGHLIGHTSOUR PEOPLE. OUR CULTURE.CORPORATE GOVERNANCESUSTAINABILITY REPORTOUR BOARDOUR PEOPLE AND CULTURE CHAIR’S MESSAGEREMUNERATION REPORTOTHER DIRECTORS’ REPORT DISCLOSURESOUR OPERATIONAL HIGHLIGHTS
CORPORATE
GOVERNANCE
SUSTAINABILITY
REPORT
carsales is committed to being ethical, transparent and
accountable in everything we do.
At carsales, we take our ability to have a positive impact on
society extremely seriously.
We believe this is essential for the long-term performance
and sustainability of our Company and supports the
interests of our shareholders and other stakeholders.
The Board of Directors is responsible for ensuring that
the Company has an appropriate corporate governance
framework to protect and enhance Company performance
and build sustainable value for shareholders.
carsales is pleased that many of its shareholders are
interested to learn more about the Company’s approach
to governance, and its social and environmental impact.
To this end, carsales has published its 2022 Sustainability
Report, available on our Corporate Governance page of
our investor website at https://shareholder.carsales.com.
au/governance/.
This corporate governance framework acknowledges
the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations (ASX
Principles and Recommendations) and is designed to
support our business operations, deliver on our strategy,
monitor performance and manage risk. Our FY22
Corporate Governance Statement addresses the
recommendations contained in the fourth edition
of the ASX Principles and Recommendations and is
available on our website at https://shareholder.carsales.
com.au/governance/.
This report outlines the Company’s approach to assessing,
mitigating and managing a range of social, environmental
and governance ESG risks, which is overseen by the
Company’s Board and managed by the carsales’ Executive
Leadership Team. It provides insight into our unique
culture, how we attract and retain the very best talent,
and seek to have a positive impact on our industry and
community. Finally, while we have a low environmental
impact as an online business, it addresses the Company’s
environmental efforts.
30
carsales Annual Report 2022 At carsales, we
take our ability to
have a positive impact
on society extremely
seriously. carsales is
pleased that many
of its shareholders
are interested to
learn more about the
Company’s approach
to governance,
and its social and
environmental impact.
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carsales Annual Report 2022AUDITOR’S INDEPENDENCE DECLARATIONOUR STRATEGYCHAIR AND CEO LETTERWHAT WE DOOUR MARKETSOUR AUSTRALIAN BUSINESSAUSTRALIAN HIGHLIGHTSOUR INTERNATIONAL BUSINESSINTERNATIONAL HIGHLIGHTSOUR PEOPLE. OUR CULTURE.OUR BOARDOUR PEOPLE AND CULTURE CHAIR’S MESSAGEREMUNERATION REPORTOTHER DIRECTORS’ REPORT DISCLOSURESOUR OPERATIONAL HIGHLIGHTS
OUR BOARD
Pat is the Chair of the carsales Board of Directors, a position he has held since 2019, having been a Director
of the Company since 2007.
Pat is a member of The Institute of Chartered Accountants in Ireland and Australia, and a graduate of the
Harvard Business School’s Advanced Management Program.
Pat is currently the Chair of the Board of Technology One Limited and SiteMinder Ltd and a non-executive
director of The Little Company of Mary Health Care Limited.
Previously Pat was the Chief Operating Officer and Finance Director of Nine Entertainment Co Pty Limited
(formerly PBL Media Pty Ltd), a position he held from February 2006 until June 2012. He also served as
a Director and Company Secretary of Nine Entertainment Co Pty Limited and was Chair of Ninemsn.
Patrick O’Sullivan
Non-Executive Chair
Pat brings immense financial, regulatory and governance expertise to the Board, and was the Chair of the
Audit and Risk Management Committee prior to being appointed as Chair of the Board. Pat also provides
the Board with valuable insights relating to operations of global companies.
Cameron was appointed Managing Director and CEO of carsales.com Ltd in 2017. Prior to this,
Cameron held the positions of Chief Operating Officer (from October 2014), and Chief Financial Officer
and Company Secretary for the previous seven years, including for the IPO of the Company in 2009.
Cameron has over 29 years’ of finance and operational experience.
Cameron holds a degree in Economics from La Trobe University, Melbourne, is a graduate of the
General Management Program at Harvard Business School and is a Fellow Certified Practising
Accountant (FCPA).
Cameron brings unparalleled knowledge of the business and significant experience in strategy,
mergers and acquisitions and management to the Board.
Wal has more than 35 years’ experience in supplying computer services to the automotive industry
and was Chair of the Company’s Board from its inception until August 2015.
Wal holds a Bachelor of Science degree in Business Administration from the University of Alabama
(United States). He was recognised with the Medal of the Order of Australia for his services to the
Australian Automotive Industry in the 2016 Queen’s Birthday Honours.
Wal brings to the Board consummate knowledge of the IT needs of the automotive industry as well
as his extensive knowledge of the business, having been a driving force from its founding.
Kim has more than 30 years’ of experience as a CEO and senior executive in a range of marketing and
media companies including Southern Star Entertainment, PBL and Ninemsn and Reading Room Inc
(bookstr.com) of which she was CEO and founder.
Kim is currently a Non-Executive Director of Invocare Limited, Infomedia Limited, SiteMinder Limited
and the Sax Institute, a national not-for profit leader in promoting the use of research evidence in
health policy. She was formerly a Non-Executive Director of Marley Spoon AG and WPP AUNZ until the
completion of its takeover by WPP PLC in April 2021. She has also served as a Fellow of the University
of Sydney Senate.
Kim holds a Bachelor of Arts from the University of Sydney and a Graduate Diploma in Library
Information Science from UTS.
Kim provides an abundance of experience and knowledge in the marketing, media and entertainment
industries. Kim also has extensive experience on ASX listed Boards, including as Chair of Remuneration
Committees and is the Chair of the Company’s People & Culture Committee.
Cameron McIntyre
Chief Executive Officer
and Managing Director
Wal Pisciotta OAM
Non-Executive Director
and Co-Founder
Kim Anderson
Non-Executive
Director
32
carsales Annual Report 2022 Edwina holds a Bachelor of Laws and Bachelor of Arts from Sydney University, practising commercial
law before transitioning into the automotive industry. Edwina has worked in the automotive industry
since 2003 as Managing Director until 2020 and is currently the Executive Chair of the Phil Gilbert
Motor Group.
Edwina has held numerous Industry Advisory positions including NSW Chair of the Hyundai Dealer
Council from 2010 to 2015. She is currently on the Board of the peak industry body representing
franchised new car dealers in Australia, the Australian Automotive Dealer’s Association and joined the
Board of emerging digital fintech Till Payments in December 2021.
Edwina Gilbert
Non-Executive Director
Edwina brings significant OEM knowledge along with executive experience operating dealerships with
a digital first marketing approach and has deep operational and commercial acumen. Edwina has
chaired the Company’s Risk Committee since it was established in January 2019.
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Kee Wong
Non-Executive Director
Kee is an entrepreneur with a Bachelor of Engineering (Hons.), a Graduate Diploma in Computing and
an MBA. Kee was awarded a Fellow of Monash University in 2010 and Distinguished Alumni in 2014. He
has started several businesses and has made investments across a number of industries which include
technology services, retail, food and beverage, trading and property.
Kee was a senior executive at IBM running part of its e-business group in the Asia Pacific region,
including Australia and New Zealand. He is founder and managing director of e-Centric Innovations, an
IT/Management consulting firm operating in Australia, Malaysia and Singapore. Kee is currently a
Non-Executive Director of the Australian Institute of Company Directors and InvoCare Limited and is
the Chair of the Company’s Sustainability Committee.
Kee expands the Board’s knowledge of technology and product, and enhances the entrepreneurial
spirit of the Board, as well as providing valuable insight into markets outside of Australia in which the
Company operates.
David has over 25 years’ experience as a partner of PwC, including 5 years as the Chief Operating Officer
of PwC Assurance where he was responsible for managing the firm’s largest business unit, and 5 years
practicing in the firm’s Indonesian office, where in addition to his responsibility as an audit partner he
was responsible for the firm’s IT platform.
David has extensive experience working with companies in the technology, infocoms and entertainment
and media industries, having been the lead audit partner for clients including Network Ten, APN News
& Media and Yahoo during his time with PwC.
David Wiadrowski
Non-Executive Director
David holds a Bachelor of Commerce from the University of NSW and is currently a Non-Executive
Director of oOh!Media Ltd and Life 360 Inc and Chair of WageSplitter Pty Ltd.
In addition to his outstanding financial credentials, David brings strong commercial acumen to the
Board, derived from his extensive experience at PwC and board roles.
Steve has 30 years’ experience in the innovation and services industries, including more than
25 years’ experience in supplying computer services to the automotive industry.
Steve holds a Bachelor of Business degree from Monash University and is an experienced board
Director. He is currently Chief Executive Officer at Pentana Solutions Pty Ltd.
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Nicole is an experienced General Counsel and Company Secretary with 20 years’ experience in the
law, primarily working with online businesses and intellectual property.
Nicole holds a Bachelor of Laws (Hons) and Bachelor of Arts from Monash University. Before joining
carsales, Nicole was in-house legal counsel for Medibank Private Ltd and REA Group Ltd. Prior to
this Nicole worked for Minter Ellison, one of Australia’s premier legal firms.
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Steve Kloss
Alternate Non-Executive
Director
Nicole Birman
Company Secretary
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33
carsales Annual Report 2022
OUR PEOPLE AND CULTURE CHAIR’S MESSAGE
Dear Shareholders,
On behalf of the Board, I am pleased to present the
Remuneration Report for the year ended 30 June 2022
(FY22).
The business has again delivered strong financial growth
during FY22 and the Board remains committed to taking
a remuneration approach that enables us to attract,
motivate and retain the best talent that is aligned to
long-term shareholder value creation.
Company performance
The Company has again produced strong results in FY22,
summarised as follows:
• 19% Reported Revenue growth, 12% Reported EBITDA
growth and 23% NPAT growth.
• 36% Look through revenue growth and 25% look through
EBITDA growth on a constant currency basis.
• 69.0 cents Adjusted Earnings Per Share (EPS) from
continuing operations, up 12% compared to the
prior year.
• 77% Total Shareholder Return (TSR) in FY22.
Executive KMP Changes in FY22
In March 2022, the Company announced changes to its
leadership structure which reflects the increasing profile
of its international businesses and delivery of Australian
growth opportunities.
As part of these changes, the Board was pleased to appoint
Paul Barlow to Managing Director – carsales Australia on
1 April 2022. Paul has assumed responsibilities for all
carsales’ Australian operations. Paul is a highly experienced
leader and has a proven track record of strong
performance during his 13 years with the Company.
William Elliott, carsales’ Chief Financial Officer, assumed
responsibility for carsales’ Investments from 1 April 2022,
which includes Tyresales, TyreConnect, Redbook Inspect
and iMotor. This expanded portfolio provides further
breadth and growth opportunities for William, as well as
increased focus for the Investments area of the business.
The Board was pleased to be able to make these changes
following Ajay Bhatia’s, formerly MD – carsales Australia,
resignation in March 2022. These changes are a testament
to the depth of talent we have in the business and the clear
succession plans we have in place.
Remuneration Outcomes
The FY22 remuneration outcomes align with the strategic
objectives and performance outcomes of the Company
for the fiscal year. The Board’s approach to remuneration
ensures alignment between employee and shareholder
outcomes. No discretion, either positive or negative,
has been applied by the Board.
Below is a summary of Fixed Remuneration, STI and
LTI outcomes:
FY22 Remuneration Changes
• Managing Director & Chief Executive Officer
Cameron McIntyre’s fixed remuneration remained
unchanged in FY22.
• Chief Financial Officer, William Elliott, received a
22.2% increase on 1 July 2021, better aligning his fixed
remuneration to market in accordance with his continued
strong performance in the role. On 1 April 2022, William
received a 9.1% increase, recognising additional
responsibility for areas of carsales Investments, including
Tyresales, Tyreconnect, Redbook Inspect and iMotor.
• Whilst MD – International, Paul Barlow received a 4.9%
increase on 1 July 2021, reflecting strong performance
in the role and better market alignment. In April 2022,
upon commencement of his new role as MD – carsales
Australia, Paul received a further 23.1% increase,
recognising an increase in his role and responsibilities
and reflecting his industry skills and experience.
• In FY22, the Board also reviewed the Executive KMP
Short Term Incentive Plan design and introduced an
accelerator to the financial component of that plan.
This was designed to drive outperformance in financial
achievement, over and above the Company’s 5-year CAGR
growth rate. This is aligned with shareholder outcomes,
and rewards Executive KMP for delivering even stronger
financial results.
FY22 STI
• Financial (70% of the plan) – The Company has delivered
a strong result for shareholders, exceeding target
for look through revenue and delivering on target
performance for look through EBITDA. 119% achievement
for the financial objective measure resulted in an 83%
payment outcome.
• Strategic (30% of the plan) – A measured scorecard
outcome of 67%, resulting in a 20% achievement for the
strategic objectives measure was achieved.
• A total outcome of 103% payout was achieved compared
to an FY21 STI outcome of 100% payout.
34
carsales Annual Report 2022 Our focus remains on continuing to
engage, motivate and retain Executives in
a highly competitive talent market, whilst
also aligning with shareholder interests.
FY20-22 LTI
• Financial (70% of the plan) – Achieved solid performance
for look through revenue and strong CAGR growth
in Adjusted EPS, resulting in 79.5% achievement
for the measure and a 55.7% vesting outcome
of performance rights.
• Strategic (30% of the plan) – A scorecard outcome of 67%
was achieved for the measure, resulting in 20% of options
vesting under the plan.
• A total vested outcome of 75.7% was achieved compared
to an FY19-21 outcome of 30%.
When assessing strategic objectives in both the LTI and STI
plans, the Board uses a scorecard of three key measures:
on-time delivery, on budget, and a positive contribution to
the bottom line.
We believe this approach fairly recognises the outcomes
and value creation that our Executive KMP’s and leadership
team have delivered for the business and shareholders.
Company culture
We would like to acknowledge the exceptional talent we
have throughout the business, and our appreciation for
the strong leadership and engagement of our Executive
team, who continue to deliver great outcomes each year
for our shareholders.
The Company’s culture continues to strengthen with
increased engagement levels and we are proud to be
recognised again as a Workplace Gender Equality Agency
Employer of Choice, a certified Great Place to Work® in
Australia, an AAGE Top Intern program employer, Top
Graduate Employer and a certified Family Inclusive
Workplace™. The strength of leadership and culture
within the Company is a credit to the Group.
Committee priorities for FY23
The People and Culture Committee will continue to
closely monitor the effectiveness of the Executive KMP
remuneration framework. Our focus remains on continuing
to engage, motivate and retain Executives in a highly
competitive talent market, whilst also aligning with
shareholder interests.
As always, we welcome your feedback on our Remuneration
Report and look forward to discussions with many of you
over the coming year.
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Yours sincerely
Kim Anderson
Chair of the People and Culture Committee
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carsales Annual Report 2022AUDITOR’S INDEPENDENCE DECLARATIONOUR STRATEGYCHAIR AND CEO LETTERWHAT WE DOOUR MARKETSOUR AUSTRALIAN BUSINESSAUSTRALIAN HIGHLIGHTSOUR INTERNATIONAL BUSINESSINTERNATIONAL HIGHLIGHTSOUR PEOPLE. OUR CULTURE.DIRECTORS’ REPORTCORPORATE GOVERNANCESUSTAINABILITY REPORTOUR BOARDREMUNERATION REPORTOTHER DIRECTORS’ REPORT DISCLOSURESOUR OPERATIONAL HIGHLIGHTS
REMUNERATION REPORT 2022
In this Report
1 Who is Covered in this Report
2 Summary of the Executive KMP Remuneration Framework
3 Remuneration Outcomes and Link to Performance
4 Remuneration Governance
5 Executive KMP Statutory Remuneration Disclosure
6 Executive KMP Service Agreements
7 Executive KMP Equity Disclosures
8 Non-Executive Director Fees
36
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Independent Audit of the Report
The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations
Act 2001.
1. Who is Covered in this Report
This remuneration report details the performance and remuneration of Key Management Personnel (KMP), comprising
Non-Executive Directors and members of the Executive Leadership Team (herein referred to as Executive KMP) who had
the authority and responsibility for planning, directing, and controlling the activities of the Company during FY22.
1.1 Key Management Personnel
As detailed in the People and Culture Commitee Chair’s opening letter, the Board was pleased to appoint Paul Barlow to
Managing Director – carsales Australia on 1 April 2022. As a highly experienced leader, Paul assumed responsibilities for
all carsales’ Australian operations.
William Elliott, carsales’ Chief Financial Officer, assumed responsibility for carsales’ Investments, which includes Tyresales,
TyreConnect, Redbook Inspect and iMotor, on 1 April 2022. This change provides further breadth to William’s role, as well
as increased focus for the Investments area of the business.
The Board were pleased to be able to make these changes to the Executive KMP following Ajay Bhatia’s, formerly MD –
carsales Australia, resignation. Ajay ceased as a KMP on 1 April 2022 and commenced gardening leave until July 2022.
The Company’s KMP in FY22 are listed in the table below:
Name
Non-Executive Directors
Patrick O’Sullivan
Walter Pisciotta
Kim Anderson
Edwina Gilbert
Kee Wong
David Wiadrowski
Steve Kloss
Executive KMP
Cameron McIntyre
Paul Barlow
William Elliott
Ajay Bhatia
36
Position
Term as KMP
Non-Executive Chair
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director (Alternate)
Managing Director (MD) and Chief Executive Officer (CEO)
Managing Director – carsales Australia (from 1 April 2022)
Managing Director – International (until 31 March 2022)
Chief Financial Officer (CFO)
Managing Director – Australia (ceased as KMP 1 April 2022)
Full year
Full year
Full year
Full year
Full year
Full year
Full year
Full year
Full year
Full year
Part year
carsales Annual Report 2022 2. Summary of the Executive KMP Remuneration Framework
2.1 Executive remuneration strategy and link to Company performance
When designing remuneration plans and making decisions within our remuneration framework, we are guided by our
remuneration principles which support the execution of our business strategy.
The strategic measures for our Company’s remuneration plans are taken from areas of focus from our Company
Global Positioning Strategy (GPS) 2022 strategy. This ensures we align priorities across the wider company in both
remuneration and strategy.
Purpose: Making buying and selling a great experience
Delivered through three strategic pillars:
Enabled by:
Grow digital
marketplaces
Build value-added
services
Seek future
mobility horizons
Our
people
Best-in-class
data
Best-in-class
technology
Underpinned by our Remuneration Principles
Market competitive
Ensure the Company has the flexibility to attract, motivate and retain high-calibre
talent in a competitive market.
Alignment
The alignment of Executive KMP and Senior Executive interests with those of shareholders’ and our
customers are paramount to business success. We believe in a pay for performance culture and
through this encourage Senior Executives to build and maintain a reasonable shareholding.
Link to Company strategy
Our focus is on value-add objectives that contribute to achieving our purpose so that we reward
what truly impacts business growth.
Reward the right outcomes
We encourage responsible decision making that is made in the best interests of our customers and
shareholders and align reward outcomes accordingly.
Reinforcing business goals and objectives via our Remuneration Framework
Remuneration Component
Alignment to performance
Alignment to principles and strategy
Fixed Remuneration (FR)
Comprises base salary and superannuation.
Short-Term Incentive (STI)
Annual incentive opportunity.
Delivered as 75% cash and 25%
deferred performance rights for
a 12-month period, subject to
continued service.
Long-Term Incentive (LTI)
Granted in 70% performance rights
and 30% options with a three-year
vesting period for FY20-22.
Granted in 100% Performance rights
for FY21-23 and FY22-24.
Set at a market competitive level in relation to
the scope, complexity, capabilities and individual
performance in the role.
Provides recognition for day to day, operational
activities in the role.
Set to attract, retain and engage the best people
to design and lead the delivery of our strategy.
Performance assessed using a Group
Performance scorecard against:
• Financial measures (70%) – Look through
EBITDA and Look through revenue,
weighted equally.
• Strategic measures (30%) – Pre-determined
projects, business and people objectives.
Linked to the Company’s key strategic priorities
which directly contribute towards the execution
of long-term strategy each year.
The 25% of the award that is deferred
into equity supports Executives’ alignment with
shareholder interests, as well as Executive
retention.
Performance assessed against:
• Financial measures (70%) comprising
Targeting profitable, sustained growth in
revenue and shareholder wealth creation.
Cumulative Annual Growth Rate (CAGR) for:
Look through revenue and Adjusted NPAT
(FY20-22), Adjusted EPS and Relative TSR
(FY21-23 and FY22-24).
The three-year vesting period encourages
consideration of long-term decision making
and value creation, as well as operating as a
retention tool.
• Strategic milestone measures (30%) including
International revenue growth, growth in
Australian non-classified automotive products
and projects that address development in the
auto industry.
With a significant portion of potential
remuneration based on carsales equity,
the Board provides alignment between the
interests of Executives with shareholders.
Non-monetary benefits: Employees are provided with salary continuance insurance cover. It is not allocated on an individual basis.
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carsales Annual Report 2022
REMUNERATION REPORT 2022 CONTINUED
To ensure remuneration is market competitive to retain high-calibre talent, the Company will seek advice from external
remuneration consultants on an as needs basis to benchmark Executive KMP remuneration against relevant peers, being
ASX listed companies that are relative in size, structure and industry to that of carsales. The Company accepts that while
this peer group is small, it is the most relevant group from which the competition for talent arises. Increasingly, the
Company also considers global competitors for talent to be relevant, but has focused on companies with an Australian
presence for the purpose of this remuneration framework in the current year.
In FY22, the Board engaged Ernst & Young (EY) and Mercer Consulting as its independent Remuneration Advisors.
While carsales sought input from EY and Mercer Consulting, no remuneration recommendations, as defined by the
Corporations Act 2001, were provided by our Remuneration Advisors. External advice is used as a guide only and does
not serve as a substitute for Directors’ thorough consideration of remuneration outcomes.
2.2 Remuneration Mix (percentage of total remuneration)
Within the remuneration framework, a focus has been on strengthening the levels of performance-based remuneration.
As such, our remuneration mix (at maximum) includes at least 50% in the form of variable remuneration.
The figure below shows the remuneration mix at maximum opportunity for FY22, comprising Fixed Remuneration, STI cash,
STI deferred and LTI granted.
The actual remuneration mix will vary based on Group and individual performance each year.
2.3 Timeline for Delivery of Remuneration
The diagram below provides a summarised timeline of when the FY22 remuneration opportunity is delivered.
Fixed Remuneration
Base salary/Super (100%)
Short-Term Incentive
Cash (75%)
Deferred performance
rights (25%)
Long-Term Incentive
Performance rights/
Options (100%)
Performance Year
Year 1
Year 2
Year 3
38
Fixed RemunerationMD & CEOMD carsales AustraliaCFOSTI CashSTI DeferredLTI27%30%10%11%33%42%33%14%42%28%9%21%carsales Annual Report 2022 3. Remuneration Outcomes and Link to Performance
One of the key principles of the Company’s remuneration framework is to align Executive KMP remuneration outcomes
with Company performance. This section provides a summary of the Company’s five-year financial performance outcomes
and the link to remuneration outcomes over this period.
3.1 Company Five-year Financial Performance
The Company’s financial performance over the past five years along with how that performance has translated to shareholders
in the form of earnings per share (EPS) and total shareholder return (TSR) is demonstrated in the graphs below.
Remuneration Performance Measures
Look through1 Revenue2 ($m)
Look through EBITDA ($m)
Adjusted EPS and KMP remuneration
700
600
500
400
300
200
100
0
CAGR 8%
580
36%
521
35%
462
488
28%
32%
426
23%
77%
72%
68%
65%
64%
FY18
FY19
FY20
FY21
FY22
400
350
300
250
229
200
20%
CAGR 9%
324
32%
300
30%
249
25%
266
27%
150
100
50
0
80%
75%
73%
70%
68%
FY18
FY19
FY20
FY21
FY22
)
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t
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(
S
P
E
d
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t
s
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A
j
80
60
40
20
0
69.0
61.5
56.4
52.4
53.4
FY18
FY19
FY20
FY21
FY22
10
8
6
4
2
%
o
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a
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carsales Domestic
carsales International
carsales Domestic
carsales International
Adjusted EPS
KMP % of Adjusted NPAT
Other Performance Metrics
Dividend and payout ratio
Share price year end ($)2
Cumulative TSR (last 5 years)
)
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(
S
P
D
60
50
40
30
20
10
0
100
25.0
47.0
47.5
50.0
90
20.0
44.2
45.5
19.8
18.4
17.5
%
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80
70
60
15.0
15.1
13.5
10.0
5.0
0.0
FY18
FY19
FY20
FY21
FY22
FY18
FY19
FY20
FY21
FY22
100%
80%
60%
40%
20%
0%
77%
76%
56%
15%
47%
22%
FY18
FY19
FY20
FY21
FY22
Dividend
per share
Dividend payout
ratio (%)
Five-year Incentive Outcomes
Share price
carsales
ASX200 Total Returns
Executive KMP Remuneration Outcomes
STI outcome (average % of maximum)
LTI vesting outcome (% of maximum)
FY18
85.3%
72.9%
FY19
31.9%
49.4%
FY20
28.0%
76.0%
FY21
100.0%
30.0%
FY22
103.1%
75.7%
1. carsales “look through” methodology: For equity accounted associates and consolidated subsidiaries, add the total revenue or EBITDA for the
period of ownership within the reporting period multiplied by the % ownership over the period. Some “look through“ numbers involve the
disclosure of non-IFRS information. Look through revenue and EBITDA includes 49% of Trader Interactive in each period to show the
performance of the business on an underlying basis. TyreConnect revenue and EBITDA is excluded.
2. No adjustment has been made for the potential dilutive impact for the issue of 35.3 million shares that occurred in FY21 as part of a capital
raise for the purchase of 49% of Trader Interactive.
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carsales Annual Report 2022
REMUNERATION REPORT 2022 CONTINUED
3.2 Executive KMP Realised Remuneration Snapshot – FY22
The table below provides actual amounts received by the Executive KMP for FY22. This table is an additional disclosure to
those required under the Australian Accounting Standards and the Corporations Act 2001. It has been provided to assist
shareholders in understanding realised outcomes.
Name
Executive Director
Cameron McIntyre
Other Senior Executives
Paul Barlow
William Elliott
Year
FY22
FY21
FY22
FY21
FY22
FY21
Former Senior Executives
Ajay Bhatia5
FY22
FY21
Total FY22
Total FY21
Other
$
Cash STI
earned2
$
Vested
deferred
STI3
$
Vested
LTI4
$
Total
$
1,280,348
1,241,325
389,202
96,864
1,556,227
868,620
4,725,777
3,706,809
Fixed
remun-
eration1
$
1,500,000
1,500,000
685,000
619,500
562,500
450,000
-
-
-
-
-
-
385,731
345,945
278,223
243,750
642,454
850,000
3,389,954
3,419,500
573,004
-
573,004
-
549,141
525,000
2,493,443
2,356,020
108,467
33,039
76,425
13,713
164,607
50,961
738,701
194,577
207,931
128,685
-
19,301
1,387,129
1,127,169
917,148
726,764
-
225,199
1,764,158
1,241,805
1,929,206
1,651,160
8,959,260
7,211,902
1. Fixed remuneration earned in the financial year (base salary and superannuation). Pro rata fixed remuneration figures provided for Paul Barlow
and William Elliott in accordance with their newly appointed roles and associated new remuneration effective 1 April 2022. Ajay Bhatia resigned
from the business with his last day as KMP being 1 April 2022. From this date Ajay commenced gardening leave that concluded in July 2022.
A further breakdown of Ajay’s remuneration following termination is provided in section 5.1.
2. Cash STI earned in relation to performance under the STI plan during the financial year. A prorata STI figure has been provided for Paul Barlow
and William Elliott, reflecting their change in remuneration effective 1 April 2022.
3. Vested deferred STI is the value of deferred STI earned as a result of performance in the prior financial year, subject to a restriction period that
ends in August 2022. The STI value is calculated as the number of rights that vested multiplied by the 30 June 2022 closing share price (30 June
2021 closing share price for the FY21 financial year).
4. Vested LTI is the value of performance rights and options that vest in August 2022. Values are calculated as the number of rights and options
received multiplied by the 30 June 2022 closing share price (30 June 2021 closing share price for the FY21 financial year), less the exercise cost
of converting options to shares. For example, FY22 is reported as the FY20 LTI grant which vest in August 2022. William Elliott did not participate
in the FY20-22 LTI plan because he was not in the CFO role at the time of the grant.
5. Ajay Bhatia ceased to be KMP effective 1 April 2022. From this time, Ajay remained on gardening leave concluding on 29 July 2022. The ‘Other’
column includes the gardening leave and all other payments that were expensed in FY22.
3.3 Fixed Remuneration Outcomes
Fixed remuneration is generally positioned between the median and the 75th percentile of the relevant market, which
allows flexibility required to attract and retain high calibre Executives. The annual fixed remuneration entitlements of the
Executive KMP for FY22 is set out below:
Name
Cameron McIntyre
Paul Barlow
William Elliott
Ajay Bhatia
Annual fixed remuneration from
1 July 2021 to 31 March 2022
$
1,500,000
650,000
550,000
850,000
Annual fixed remuneration from
1 April 2022 to 30 June 2022
$
1,500,000
800,000
600,000
n/a
Actual fixed remuneration paid to members of the Executive KMP is shown in the remuneration tables in section 3.2
of this report.
A benchmarking exercise was undertaken in FY22. Mercer Consulting were engaged to extract market data based on
outcomes from an agreed ASX-listed peer group. This peer group consisted of 23 ASX-listed companies that were selected
with consideration to organisation size and industry. Market data was presented in accordance with appropriate job size
of each role, allowing for a relevant market review to be undertaken.
40
carsales Annual Report 2022 In the FY22 annual review, effective 1 July 2021, there was no change made to the CEO’s fixed remuneration.
Whilst in the former role of MD – International, Paul Barlow received an increased fixed remuneration of 4.9% on 1 July
2021 to position him competitively to market and in accordance with strong performance in the role. On 1 April 2022,
upon commencement of the role of MD – carsales Australia, Paul received a 23.1% increase, recognising the increased
accountability in his role, along with Paul’s broad business knowledge and extensive skillset. William Elliott, the Company’s
CFO received a 22.2% increase on 1 July 2021, better aligning his fixed remuneration to market in accordance with his
continued strong performance in the role. On 1 April 2022, William received a 9.1% increase, recognising additional
responsibility for areas of carsales Investments, including Tyresales, Tyreconnect, Redbook Inspect and iMotor.
3.4 Short-Term Incentive Plan – Key Features and Outcomes
The key features of the STI plan for the year ended 30 June 2022 are detailed in the table below.
Feature
Description
Performance
period
STI Opportunity
Approach
Eligible Executive KMPs participate in the annual STI plan with an earning opportunity that is ‘at
risk’ subject to specific pre-determined Group measures being met. All performance measures
chosen support the delivery of our strategy and create sustainable value for all stakeholders.
Aligned with the financial year, 1 July 2021 to 30 June 2022.
The STI opportunity varies in accordance with role size, complexity and direct accountability.
Market benchmarking references are also taken into consideration. The STI Target opportunity
represents expected performance for the Group. The maximum (capped) opportunity represents
outstanding levels of performance. Executive KMP capped levels, referenced as a percentage of
Fixed Remuneration (FR) are:
Role
CEO
Other Executive KMP
Target STI1
110.4%
Between 60.0% to 83.5%
Maximum STI2
149.0%
Between 87.5% to 112.8%
Delivery of
award
Performance
measures and
weightings
The STI award is delivered 75% in cash and 25% in equity (performance rights) that is deferred for
an additional 12 months subject to a continued service condition. No dividends are payable until
the performance rights vest into ordinary shares at the conclusion of the 12-month hold period.
The STI plan incorporates both financial and non-financial performance measures. The performance
measures and their relative weightings are:
Category
Financial
Non-financial
Measures
Adjusted look through revenue
Adjusted look through EBITDA
Strategic objectives
People & Culture
Weighting
35%
35%
20%
10%
Performance
threshold and
maximum
These measures are calculated on a constant currency basis to remove the effect of fluctuations
in FX rates when assessing performance outcomes.
A minimum performance threshold must be achieved in the performance period prior to any
award vesting. The threshold and maximum performance for FY22 have been set as follows:
Measure
Look through revenue
Look through EBITDA
Threshold
3.0% growth
3.0% growth
Maximum
12.0% growth
12.0% growth
1. The Target STI opportunity is represented as a percentage of fixed remuneration. In FY22 the Board introduced an accelerator to the financial
component of the STI Plan. This was designed to drive outperformance in financial achievement, over and above the Company’s 5-year CAGR
growth rate. This change aligns with shareholder outcomes and rewards Executive KMP for delivering even stronger financial results.
2. FY22 maximum STI is capped at 135% of the target opportunity.
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41
carsales Annual Report 2022
REMUNERATION REPORT 2022 CONTINUED
Feature
Selection of
Performance
Measures
Approach
Financial Measures:
Adjusted Look through revenue
Adjusted look through revenue is the ordinary
revenue from continuing operations reported for
the consolidated Group, adjusted for the
ownership percentage held by the group of
consolidated subsidiaries, and adding in the
Group’s ownership share of the underlying
revenue for equity accounted associates.
Adjusted Look through Earnings
Before Interest, Tax, Depreciation and,
Amortisation (EBITDA)
Adjusted look through EBITDA is the Group
earnings before interest, tax, depreciation
and amortisation, adjusted for the ownership
percentage held by the group of consolidated
subsidiaries, and adding in the Group’s
ownership share of the underlying EBITDA
for equity accounted associates.
Link of
performance
and reward
Non-financial measures within the plan recognise the importance of key strategic priorities
and employee engagement in achieving business transformation. The Board decides on
pre-determined strategic performance objective targets at the beginning of the performance
period, which are linked to our longer-term strategy and value creation for our shareholders.
The strategic objective outcomes are provided within the STI outcomes section of the report.
For each measure, there is a minimum threshold of performance required which needs to be met
before any pay-out is awarded for that portion of the STI.
An incremental scale applies in accordance with achievement of financial measures, with the
intention to motivate and fairly reward exceptional performance outcomes. The achievement
of non-financial performance measures is assessed through a rating scale, with Satisfactory
performance allocated 50%, Above Expectations allocated 75% and Exceptional allocated 100%.
Maximum 150%
(Financial)
Maximum 100%
(Non-financial)
Target 100%
(Financial)
Threshold 50%
(Non-financial)
Threshold 25%
(Financial)
Minimum 0%
Threshold
Stretch
Financial
Non-financial
Cessation of
employment
If an Executive KMP ceases employment with the Company prior to any awards being paid, unless
the Board determines otherwise, the Executive KMP will forfeit any awards to be paid for the
performance period.
42
carsales Annual Report 2022 Performance outcomes against STI Measures for FY22
STI outcomes are calculated using a performance scorecard with 70% weighting on financial measures and 30% weighting
on non-financial measures. All outcomes are measured on Group performance.
The Board’s assessment of the Executive KMP’s performance in the 2022 financial year is outlined below.
Measure
Weighting
Threshold
Actual
Performance
Payout
(as a % of
Maximum)
Commentary
Adjusted look
through
revenue
Adjusted look
through
EBITDA
Strategic
Media Strategy
Global
Integration
People
Engagement
and Sentiment
35%
$537m
$580m
48%
• Strong performance achieved,
well above threshold
35%
$309m
$324m
35%
• Target performance achieved
10%
10%
10%
Exceeds
Expectations
10%
• Key customer data and self-serve
technology platforms were
delivered on time and on budget,
which support current and future
media revenue growth
• Did not implement the specified
services due to operational and
strategic reasons. As such,
objective was not achieved
Does not meet
expectations
0%
Exceeds
Expectations
10%
• Achieved an EOS rating of 78%,
above target of 71%
• Recognised as a Workplace
Gender Equality Agency Employer
of Choice, and certified as a Great
Place To Work®
Total
100%
103%
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43
carsales Annual Report 2022
REMUNERATION REPORT 2022 CONTINUED
Overall STI Financial Outcomes
The following table provides the FY22 STI outcomes awarded to Executive KMP. Under the FY22 STI plan, 25% of
the awarded STI is provided in equity with vesting deferred for an additional 12 months, subject to a continued
service condition.
2022
Cameron McIntyre
Paul Barlow
William Elliott
1. Number of performance rights to be awarded is based on the 20 trading day VWAP up to and including 30 June 22
Actual STI
awarded
$
1,707,131
514,308
370,964
75%
Cash
$
1,280,348
385,731
278,223
Number of
performance
rights awarded1
22,653
6,825
4,923
STI
Target
$
1,655,400
498,723
359,723
25%
Deferred
in Equity
$
426,783
128,577
92,741
STI actual
as a %
of STI
Target
%
103%
103%
103%
2021 Deferred STI Outcome
The 2021 deferred STI will qualify to vest upon release of this Annual Report to the ASX by the Board. The table below
provides the award value based on the accounting Black Scholes valuations, as well as the cash value to each Executive
KMP of their STI based on the 30 June 2022 share price.
2022
Cameron McIntyre
Paul Barlow
William Elliott
DSTI value
(Black Scholes)
DSTI value
(30 June 2022 share price)
Vested
$
437,244
121,855
85,858
Vested
%
100%
100%
100%
Vested
$
389,202
108,467
76,425
Vested
%
100%
100%
100%
3.5 FY20-22 Long-Term Incentive Plan – Key Features
Feature
Approach
Description
Opportunity
Eligible Executive KMPs participate in the LTI plan, with an opportunity that is ‘at risk’ subject
to specific pre-determined Group performance measures being met over a three-year period.
The plan is designed to align Executive KMPs interests with those of shareholders.
The LTI opportunity reflects accountabilities and influence over the Company’s long-term
performance within each role. Market benchmarks are also referenced in determining the LTI
opportunity. The maximum face value of LTI that can be granted, referenced as a percentage
of Fixed Remuneration (FR) is:
Role
CEO
Other Executive KMP
Maximum (cap)
94.7% of Fixed Remuneration
Between 29.0% and 40.0% of Fixed Remuneration
Performance is measured over three financial years. The expiry date of the award is fifteen years
from the grant date.
Performance
and vesting
period
44
carsales Annual Report 2022 Feature
Approach
Delivery
The number of performance rights and options granted for the FY20-FY22 plan are allocated as
follows: Seventy percent (70%) of the opportunity is granted as performance rights (PRs), with
vesting subject to financial performance measures and ongoing service. The remaining thirty
percent (30%) is granted as options, with vesting subject to strategic objectives being met and
ongoing service. No dividends are paid during the performance period, until the rights or options
vest and are exercised.
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Allocation
approach
Performance
measures and
weightings
In FY21 the Board decided to simplify the FY21-23 LTI plan to have only one equity vehicle, rather
than two. As such, one hundred percent (100%) of the opportunity in FY22 will be granted as
performance rights (PRs), with vesting subject to financial metrics and strategic objectives being met
as well as ongoing service. No dividends are paid during the performance period, until the rights vest.
The number of performance rights and options granted are calculated as follows:
$ Fixed
Remuneration
(FR)
(At time
of grant)
x
Award face value
(% FR)
÷
$ Share price
(Performance rights)
=
Number of PRs
(70% of Award)
$ Black Scholes price
(Options)
=
Number of Options
(30% of Award)
The share price used was the Volume Weighted Average Price of the Company’s ordinary shares for
the 20 trading days up to and including 30 June 2022.
The performance measures and their relative weightings are:
Category
Financial
(PRs)
Strategic
(Options)
Measures
Look through revenue
Adjusted EPS
Growth in international business performance metrics that
reflect the strategic importance of this segment to the Group
as a whole
Trust and brand metrics that represent the importance of
reputation to the Group’s success
Domestic business milestones that indicate successful
implementation of the Group’s strategic roadmap
Weighting
35%
35%
10%
10%
10%
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45
carsales Annual Report 2022
REMUNERATION REPORT 2022 CONTINUED
Feature
Approach
Performance
Threshold and
Maximum
A minimum performance threshold must be achieved in the performance period prior to any award
vesting. The threshold and maximum performance for FY20-22 and other currently operating LTI
plans (for further information) have been set as follows:
Year
FY20-22
FY21-23
FY22-24
Measure
Look through revenue
Adjusted EPS
Relative TSR
Adjusted EPS
Relative TSR
Adjusted EPS
Threshold
3.0% CAGR
3.0% CAGR
Maximum
10.0% CAGR
10.0% CAGR
50th percentile 75th percentile
10.0% CAGR
50th percentile 75th percentile
10.0% CAGR
3.0% CAGR
3.0% CAGR
Financial metrics used exclude corporate activity (such as acquisitions) made after the AGM notice
date, with the exception of any disposal of businesses or acquisitions of additional equity stakes in
any existing businesses, where the CAGR targets will be altered to maintain the underlying CAGR
growth rates targeted for the financial year. The Board retains discretion to adjust the CAGR growth
rates to include the impact of any strategically important acquisitions made during the performance
period, such that management is not materially advantaged or disadvantaged from entering into
further acquisitions when it is in shareholders’ interests to do so.
Strategic Targets: The release of targets that were used to assess performance will be provided
upon completion of each three-year performance period, due to competitive advantage information
being withheld.
Vesting
Schedule
Performance Level
Financial
Below Threshold
Between Threshold and Maximum: Both Look through
revenue and Adjusted EPS
Strategic
Not achieved
Partial achievement
Full achievement
Vesting %
0%
From 25% to 100%
0%
50%
100%
46
carsales Annual Report 2022 Feature
Approach
Selection of
Performance
Measures
Malus and
Clawback
Ceasing
Employment
Hedging Policy
Financial Measures:
Adjusted EPS
Adjusted EPS is defined as earnings per share calculated
by dividing the Adjusted NPAT attributable to equity holders
of the Company during the relevant period by the weighted
average number of ordinary shares outstanding during the
relevant period. The Board also retains discretion to alter
the Adjusted EPS hurdle in exceptional circumstances to
ensure there is no material advantage or disadvantage
due to matters outside management’s influence that
would materially affect Adjusted EPS.
Look through revenue
Look through revenue is the ordinary
revenue from continuing operations
reported for the consolidated
Group, adjusted for the ownership
percentage held by the group of
consolidated subsidiaries, and adding
in the Group’s ownership share of
the underlying revenue for equity
accounted associates.
The Board believes that the chosen measures ensure alignment of LTI vesting outcomes to
shareholder interests. In determining the financial measures’ targets, the Board considers the
historical revenue and earnings performance of the Company, forward looking market consensus
revenue and earnings expectations, the overall purpose of the award and the long-term best
interests of the Company. Based on these factors, the Board believes that the growth targets
that have been set are appropriate in all the circumstances.
Non-financial measures within the plan recognise the importance that key strategic priorities and
people engagement have in achieving ongoing business transformation and evolution. The Board
has selected pre-determined strategic performance objectives which are linked to the Company’s
long-term strategy and are therefore key in improving long-term financial performance and value
for our shareholders. Key factors in determining these outcomes are delivery on time, on budget
and contribution to the bottom line.
For the FY21-23 and the FY22-24 plans, the Board has retained Adjusted EPS as a performance
measure to support alignment with company specific financial outcomes, whilst introducing Relative
Total Shareholder Return (RTSR) as a new market based performance measure, to enhance
alignment of Executive remuneration outcomes with that of shareholders. Additionally, there
are three international peer companies in the peer group (full listing of peer group provided in the
2021 Notice of Annual General Meeting documentation on the Company’s Investors web page).
If the Board, in its reasonable opinion, determines that a plan participant has engaged in any
of the following conduct, the Board may declare that all, or some, of the participant’s options
or performance rights held under the plan are forfeited:
(a) Cessation of employment, other than for special circumstances, redundancy or by mutual
agreement between the Board and the participant;
(b) Material breach of the participant’s obligations to the Company or a Subsidiary;
(c) Behaviour that brings the Company or Group into disrepute.
Executive KMPs who leave the Company have 30 days from their date of departure to exercise any
vested options they may have, unless such departure is under adverse conditions. In exceptional
circumstances, and at the Board’s discretion, Executive KMPs may be allowed to retain unvested
options (from current prior year operating LTI plans) and performance rights in a future period
when they vest. This would be subject to testing against performance criteria.
The Company’s Equity Plan specifically prohibits a plan participant from entering into any scheme,
arrangement, agreement (including options and derivative products) or other hedging transaction
under which the participant may alter or limit the economic benefit or risk to be derived from
options, irrespective of future changes in the market price of any Company shares. Where a plan
participant enters, or purports to enter, into any such scheme, arrangement or agreement without
prior authorisation from the Company, such options will immediately lapse.
O
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47
carsales Annual Report 2022
REMUNERATION REPORT 2022 CONTINUED
Feature
Approach
Change of
Control
While the Board maintains discretion in relation to unvested options and performance rights, the
default treatment for unvested options subject to performance conditions is that a pro-rata number
will vest based on the extent to which applicable performance conditions have been satisfied.
For unvested options and performance rights subject to only continuing service conditions,
the pro-rata number will vest based on the proportion of the period that has lapsed.
There are currently three years of unvested LTI awards with performance periods that include the 2022 financial year.
Financial year of grant
FY20-22
FY21-23
FY22-24
Performance period
1 July 2019 – 30 June 2022
1 July 2020 – 30 June 2023
1 July 2021 – 30 June 2024
Performance year to
determine vesting
FY22
FY23
FY24
Vesting dates
August 2022
August 2023
August 2024
FY20-22 Performance outcomes against LTI Measures
LTI performance and awarded outcomes
The Board’s assessment of performance against the FY20-22 LTI performance measures is outlined below.
Measure
Financial
Look through revenue1
Weighting
Performance
outcome
Vesting
outcome
Commentary
35%
Achieved
22.4%
Adjusted EPS
35%
Achieved
33.3%
Strategic
International revenue growth
10%
Full
achievement
10%
• Solid performance with 6% CAGR
achieved across the LTI period.
Key item preventing a higher growth
rate was the decline in media revenue
• Strong CAGR growth of 10% in Adjusted
EPS which reflects solid revenue growth
and good cost control
• Strong double digit revenue growth
across the international portfolio
supported by excellent performance
in Korea and Brazil over the last
three years
Maintain brand preference
and trust metrics at
June 2019 levels
50% of automotive dealers
using depth product by
30 June 2022
10%
Not achieved
0%
• Brand preference and trust metrics
10%
Full
achievement
remain strong, however the objective
was not achieved and as such did
not vest
• 50% of our dealers are now using
our depth products to enhance
their offerings
10%
75.7%
Total
100%
1. Look through revenue for LTI purposes excludes the impact of Trader Interactive and TyreConnect acquisitions.
48
carsales Annual Report 2022 4. Remuneration Governance
The Board has ensured robust governance processes are in place for remuneration matters within the Company.
The below diagram provides a summary of the remuneration governance framework.
Board
The Board takes guidance and reviews recommendations from the People and Culture Committee and makes
decisions on remuneration strategy and outcomes for Executive KMP and Non-Executive Directors.
People and Culture Committee
The People and Culture Committee reviews recommendations made by management where appropriate and
makes recommendations to the Board on remuneration and other terms of employment applicable to Executive
KMP and Non-Executive Directors. In addition, the People and Culture Committee will facilitate an efficient
mechanism for examination of the selection and appointment practices of the Company as well as cultural,
diversity and inclusion practices.
Management
The CEO makes recommendations
to the People and Culture
Committee on performance
and remuneration outcomes for
direct reports.
Management may attend Committee
meetings as required, however do not
participate in formal discussions or
decision making involving their own
remuneration.
Independent remuneration
advisors
The People and Culture Committee
may engage independent
remuneration advisors if needed
to assist the Board in making
remuneration decisions.
Any advice is used as one of
many factors taken into
consideration by the Board.
Other Board committees
The Risk Management Committee
and Audit Committee may advise
the People and Culture Committee
on relevant risk and reputation or
relevant financial outcome matters
that arise.
Further information on the purpose and duties of the People and Culture Committee is contained in its Charter,
which is available from the Company’s investor website: https://shareholder.carsales.com.au/charters.
4.1 Engagement with shareholders and proxy advisors
Members of the Board have proactively engaged with several of its largest shareholders throughout the year.
Meetings with proxy advisors have also occurred to try to ensure they have a good understanding of the Company’s
remuneration structure and decisions, and are in a position to provide insightful advice to their clients. The Company
views these meetings as an opportunity to receive valuable feedback on issues of importance to its shareholders and to
ensure it is across the trends being seen in the market.
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Over the course of FY22, representatives of the Company met with the following proxy advisors:
C
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T
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E
C
H
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I
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• Ownership Matters;
• CGI Glass Lewis; and
• ACSI – Australian Council of Superannuation Investors.
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49
carsales Annual Report 2022
REMUNERATION REPORT 2022 CONTINUED
5. Executive KMP Statutory Remuneration Disclosure
5.1 Accounting based benefits
The table below has been prepared in accordance with the requirements of the Corporations Act 2001 and relevant
Australian Accounting Standards. The figures provided under the share-based payments columns are based on accounting
values and do not reflect actual cash amounts received by members of the Executive KMP in FY22.
Short-term benefits
Post
Employ-
ment
Long-
term
benefits
Share-based payments
Name
Executive Director
Cameron McIntyre
Year
FY22
FY21
Salary and
fees
$
Cash STI
$
Super-
annu-
ation
1,476,432
1,280,348
23,568
1,478,306
1,241,325
21,694
William Elliott
Other Senior Executives
Paul Barlow
FY22
FY21
FY22
FY21
Former Senior Executives
Ajay Bhatia1
FY22
FY21
Total KMP FY22
Total KMP FY21
661,432
597,806
538,932
428,306
385,731
345,945
278,223
243,750
624,778
828,306
3,301,574
3,332,724
549,141
525,000
2,493,443
2,356,020
23,568
21,694
23,568
21,694
17,676
21,694
88,380
86,776
Long
Service
Leave
$
Deferred
STI
$
LTI
perform-
ance
rights
$
LTI
options
$
23,595
39,462
50,387
6,526
27,300
17,181
416,269
296,893
4,645
262,235
680,644
395,480
120,473
75,799
85,878
49,107
43,566
104,399
44,961
50,100
1,036
53,627
355
5,044
Other
$
Total
$
-
-
-
-
-
-
3,521,750
4,119,146
1,286,193
1,205,796
999,217
815,182
(11,553)
26,865
89,729
90,034
92,463
115,410
715,083
502,551
(258,804)
237,529
126,616
1,072,672
(54,187)
93,847
(48,151)
547,998
573,004
-
573,004
-
1,532,518
1,848,651
7,339,678
7,988,775
1. Ajay Bhatia ceased to be KMP effective 1 April 2022. From this time, Ajay remained on gardening leave concluding on 29 July 2022.
The ‘Other’ column includes the gardening leave and all other payments that were expensed in FY22.
6. Executive KMP Service Agreements
All Executive KMP have service agreements determining fixed remuneration (cash salary and superannuation), and
performance based variable reward, comprising STI opportunity and participation in the Company’s LTI Plan.
They have no fixed employment terms and no special termination payment conditions. All agreements provide for
dismissal due to gross misconduct. The termination notice period is six months by either party and there is a six month
non-compete period.
7. Executive KMP Equity Disclosures
7.1 STI and LTI payments (cash, options and performance rights) achievement against
maximum entitlement
All Executive KMP received grants that were equal to or less than their maximum potential STI entitlements. The relative
proportions of remuneration which are linked to performance and those that are fixed based on the accounting values
table in section 5.1 are as follows:
Cash salary and
superannuation
2022
%
2021
%
43
57
58
79
37
52
57
47
At risk – STI
At risk – DSTI
At risk – LTI
2022
%
2021
%
2022
%
2021
%
2022
%
2021
%
36
30
28
36
31
29
30
29
12
9
9
6
6
6
6
6
9
4
5
(21)
26
13
7
18
Name
Executive Director
Cameron McIntyre
Other Senior Executives
Paul Barlow
William Elliott
Former Senior Executives
Ajay Bhatia
50
carsales Annual Report 2022 O
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7
.
carsales Annual Report 2022
REMUNERATION REPORT 2022 CONTINUED
Notes to table on previous page:
1. $0.00 exercise price represents performance rights.
2. Percentage of the available grant that vested in the financial year.
3. Percentage of the available grant that was forfeited due to not meeting the service and performance criteria set.
4. When exercisable, each option is convertible into one ordinary share upon payment of the exercise price by the option holder, provided that the
option holder complies with the rules of the carsales.com Ltd Employee Option Plan. Performance rights will automatically be converted to one
ordinary share upon the vesting date provided the holder complies with the rules of carsales.com Ltd Employee Option Plan.
5. No options and performance rights will vest if the conditions are not satisfied, hence the minimum value of the options and performance rights
yet to vest is nil. The value of the options and performance rights yet to vest has been determined as the amount of the grant date fair value of
the options and performance rights that is yet to be expensed. Options and performance rights not exercised expire at the earliest of (a) the
expiry date applicable to the option or performance rights, (b) 30 days post the employee ceasing to be employed by carsales.com Ltd, (c) where
EPS or RTSR vesting conditions are not met at the relevant date, or (d) where there has been a special circumstance, then within 90 days after
that special circumstance has occurred or as specified by the Board.
Further information on the options and performance rights is set out in Note 26 to the financial statements.
7.3 Shares provided on exercise of options and performance rights
Details of ordinary shares in the Company provided as a result of the exercise of options by each member of the
Executive KMP are set out below.
Number of
ordinary shares
issued on
exercise of
options and
performance
rights during
the year
Date of exercise
of options and
performance
rights
Value at
exercise date*
$
Cost to exercise
options
$
Net benefit
$
Aug-21
182,534
4,565,666
2,641,388
1,924,278
Aug-21
Sep-21
Aug-21
1,672
26,316
4,641
41,984
649,216
116,141
-
391,319
58,692
41,984
257,897
57,449
Aug-21
48,632
1,216,544
684,808
531,736
Name
Executive
Director
C McIntyre
Other Senior
Executives
P Barlow
P Barlow
W Elliott
Former Senior
Executives
A Bhatia
* The value at the exercise date of options and performance rights that were granted as part of remuneration and were exercised during the
year has been determined as the intrinsic value of the options and performance rights at that date.
7.4 Equity holdings
The number of shares in the Company held during the financial year by Executive KMP, including their personally related
parties, are set out below. There were no shares granted during the reporting period as compensation.
Name
Executive Director
C McIntyre
Other Senior Executives
P Barlow
W Elliott
Former Senior Executives
A Bhatia
52
Received during
the year on the
exercise of
options/rights
Balance
1 July 2021
Other changes
during the year
Balance
30 June 2022
328,392
182,534
(177,632)
333,294
91,638
5,014
27,988
4,641
(15,815)
(2,368)
103,811
7,287
69,095
48,632
(46,053)
71,674
carsales Annual Report 2022 7.5 Shares under option and performance rights
Unissued ordinary shares of carsales.com Ltd under option at the date of this report are as follows:
Date options/rights granted
Oct-16
Oct-17
Oct-18
Oct-19
Oct-19
Oct-19
Oct-19
Oct-20
Aug-21
Feb-22
Expiry date
Oct-31
Oct-32
Aug-36
Oct-34
Oct-34
Oct-35
Oct-35
Oct-35
Aug-22
Aug-24
Issue price
of shares
$
$12.23
$11.41
$14.87
$0.00
$13.54
$0.00
$13.54
$0.00
$0.00
$0.00
Number under
options
69,961
28,442
51,449
-
95,843
-
148,871
-
-
-
394,566
Number under
performance
rights
-
-
-
56,672
-
73,412
-
161,491
58,697
190,727
540,999
No option or performance rights holder has any right under the options or performance rights to participate in any other
share issue of the Company. No options or performance rights have been issued post 30 June 2022.
7.6 Shares issued on the exercise of options and performance rights
The following ordinary shares of carsales.com Ltd were issued during the year ended 30 June 2022 on the exercise
of options granted under the carsales.com Ltd Employee Option Plan. No amounts are unpaid on any of the shares.
Date options and performance rights exercised
Aug-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Feb-22
Mar-22
Issue price
of shares
$
$0.00
$11.41 - $14.87
$11.41 - $14.87
$0.00
$11.41 - $14.87
$11.41 - $14.87
$11.41 - $14.87
$12.23
Number
of shares
14,461
304,344
62,370
8,519
9,608
10,070
22,377
1,818
8.Non-Executive Director Fees
Non-Executive Directors receive fees within an aggregate Directors’ fee pool limit, which is periodically proposed for
approval by shareholders. The maximum payable to be shared by all Non-Executive Directors currently stands at
$2,000,000 per annum. The current base remuneration pool was approved by shareholders at the Annual General
Meeting held on 29 October 2021.
Fees and payments to Non-Executive Directors are determined by the demands that are made on their time, as well as
their responsibilities. The annualised fees paid to the Board are below the $2,000,000 pool approved by shareholders.
No changes to fees were made in FY22.
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53
carsales Annual Report 2022
REMUNERATION REPORT 2022 CONTINUED
The following fee table applies:
Appointment
Chair fee
Base Director fee
Committee Chair fee
Committee Member fee
1 January 2021
fee table
$
370,000
147,000
35,000
15,000
Minimum Shareholding Requirements
The Company requires all Board members to hold the equivalent of one year’s base Director’s fees in equity after
24 months’ Board membership. All Board members currently meet this requirement.
8.1 Accounting based benefits
The table below has been prepared in accordance with the requirements of the Corporations Act 2001 and relevant
Australian Accounting Standards. The figures provided under the share-based payments columns are based on accounting
values and do not reflect actual cash amounts received by Non-Executive Directors in FY22.
Short-term
benefits
Post
Employ-
ment
Long-
term
benefits
Share-based payments
Salary
and fees
$
Cash
STI
$
Super-
annuation
$
Long
Service
Leave
$
Deferred
STI
$
LTI
perform-
ance
rights
$
LTI
options
$
Other
$
Total
$
FY22 346,432
FY21 333,345
FY22 147,273
FY21 144,749
FY22 183,584
FY21 176,712
FY22 192,727
FY21 190,411
FY22
171,393
FY21 158,448
FY22
183,584
FY21 171,589
1,224,993
1,175,254
-
-
-
-
-
-
-
-
-
-
-
-
-
23,568
21,773
14,727
13,751
18,358
16,788
19,273
18,089
17,139
15,053
18,358
2,774
111,423
88,227
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
370,000
-
355,118
-
162,000
-
158,500
-
201,942
-
193,500
-
212,000
-
208,500
-
188,532
-
173,501
-
201,942
-
-
174,363
- 1,336,416
- 1,263,482
Name
Year
Non-Executive Directors
Patrick O’Sullivan
Walter Pisciotta
Kim Anderson
Edwina Gilbert
Kee Wong
David Wiadrowski
Total FY22
Total FY21
54
carsales Annual Report 2022 8.2 Share holdings
The numbers of shares in the Company held during the financial year by each Director of carsales.com Ltd, including their
personally related parties, are set out below.
Name
Non-Executive Directors
P O'Sullivan
W Pisciotta
K Anderson
E Gilbert
K Wong
D Wiadrowski
S Kloss (Alternate)
Balance
1 July 2021
Other changes
during the year
Balance
30 June 2022
26,597
8,499,990
18,229
31,394
14,626
10,000
2,774,500
-
(221,071)
-
666
-
102
-
26,597
8,278,919
18,229
32,060
14,626
10,102
2,774,500
8.3 Other transactions
Conflicts and transactions with KMP are handled in accordance with the Board Charter available at
http://shareholder.carsales.com.au/Investor-Centre/.
(i) Directors of carsales.com Ltd
W Pisciotta and S Kloss are shareholders of Pentana Solutions Pty Ltd, which has a commercial relationship with the
Company. Mr Pisciotta and Mr Kloss were absent from all Board discussions related to any commercial arrangement
of Pentana Solutions and only those directors who are independent of Pentana Solutions were involved in the approval
of the agreement. The total amount paid by carsales to Pentana Solutions Pty Ltd in FY22 was approximately $1,754,843.
E Gilbert is a Director of automotive dealerships which utilised the Group’s services under terms and conditions no more
favourable than dealing with other customers at arm’s length in the same circumstances. The total amount paid to carsales
by automotive dealerships of which E Gilbert is a Director in FY22 was approximately $803,497. E Gilbert did not receive
any additional benefits to her dealerships from her participation on the Company Board.
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55
carsales Annual Report 2022
OTHER DIRECTORS’ REPORT DISCLOSURES
Directors
The following persons were Directors of carsales.com Ltd during the financial year and up to the date of this report
unless indicated otherwise:
Pat O’Sullivan
Non-Executive Chair
Cameron McIntyre Managing Director
Wal Pisciotta
Non-Executive Director
Kim Anderson
Non-Executive Director
Edwina Gilbert
Non-Executive Director
Kee Wong
Non-Executive Director
David Wiadrowski Non-Executive Director
Steve Kloss
Alternate Non-Executive Director
The number of full Board meetings attended, and sub-committee meetings attended where a Board member is a
member of that sub-committee are set out below:
Director name
Full scheduled meetings of
directors
Short teleconference
meetings of directors
Ad hoc meetings of
directors
A
1
Pat O’Sullivan
1
Cameron McIntyre
1
Wal Piscotta
1
Kim Anderson
1
Edwina Gilbert
1
Kee Wong
1
David Wiadrowski
Steve Kloss (alternate director)
1
A = Number of meetings held during the time the director held office during the year
B = Number of meetings attended
A
11
11
11
11
11
11
11
11
B
11
11
10
11
11
11
11
11
B
1
1
0
1
1
1
1
0
A
5
5
5
5
5
5
5
5
B
5
5
3
5
5
5
4
2
Director name
David Wiadrowski (Chair)
Kim Anderson
Edwina Gilbert
Director name
Edwina Gilbert (Chair)
David Wiadrowski
Kee Wong
Director name
Kim Anderson (Chair)
Edwina Gilbert
Kee Wong
Wal Pisciotta
56
Number of Audit Committee
meetings during tenure
3
3
3
Number of Audit Committee
meetings attended
3
3
3
Number of Risk Management
Committee meetings
during tenure
3
3
3
Number of People and Culture
Committee meetings
during tenure
3
3
3
3
Number of Risk Management
Committee meetings attended
3
3
3
Number of People and Culture
Committee meetings attended
3
3
3
1
carsales Annual Report 2022 Dividends – carsales.com Ltd
Dividends paid to members during the financial year were as follows:
Final fully franked dividend for the year ended 30 June 2021 of 22.5 cents (2020: 25.0 cents)
per fully paid ordinary share paid on 18 October 2021 (2020: 7 October 2020).
Interim fully franked dividend for the year ended 30 June 2022 of 25.5 cents (2021: 25.0 cents)
per fully paid share paid on 19 April 2022 (2021: 21 April 2021)
2022
$’000
2021
$’000
63,527
61,523
72,068
135,595
61,597
123,120
At the end of the financial year the Directors have recommended the payment of a fully franked final ordinary dividend
of $85,958,000 (24.5 cents per share) to be paid on 17 October 2022 out of retained earnings at 30 June 2022.
Significant changes in the state of affairs
During the financial year the Company continued to deliver on its strategy both domestically and internationally.
Further details are set out in the Operational and Financial Review on page 26.
Matters subsequent to the end of the financial year
On 27 June 2022, the Group announced that it had exercised its call option to acquire the remaining 51% in Trader
Interactive LLC and the launch of an approximately AUD $1,207.0 million fully underwritten pro-rata accelerated
renounceable entitlement offer (with retail rights trading) to fund the acquisition.
The entitlement offer was completed in July 2022, resulting in the issue of 68,001,706 additional ordinary shares and
cash raised of AUD $1,182.0 million (net of transaction costs).
On 8 July 2022, the AUD $651.0 million drawn down amount was repaid to the Tranche A and Tranche B financiers.
No other matters or circumstances have occurred subsequent to period end that have significantly affected, or may
significantly affect, the operations of the Group, the results of those operations or the state of affairs of the Group or
economic entity in subsequent financial years.
Insurance of officers
During the financial year, carsales.com Ltd paid a premium to insure the Directors and officers of the Company and
its Australian-based controlled entities. The contract of insurance prohibits disclosure of the nature of the liability and
the amount of the premium.
Indemnification of Directors and officers
All current Directors and officers are indemnified under a deed of indemnity, insurance and access.
Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where
the auditor’s expertise and experience with the Company are important. Details of the amounts paid or payable
to the auditor (PwC) for non-audit services provided during the year are set out below.
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57
carsales Annual Report 2022
OTHER DIRECTORS’ REPORT DISCLOSURES CONTINUED
As PwC has been the company’s external auditors for many years, consistent with best corporate governance practices,
the Board undertook a tender for the Company’s external audit provider during FY22.
The Board established a selection committee consisting of two independent Non-Executive Directors and three
members of the Company’s management team. Four firms were invited to participate in the tender, and three firms
submitted responses. Responding firms provided a written proposal and participated in an oral presentation with
the selection committee. At the conclusion of the process, the selection committee recommended the re-appointment
of PwC. This recommendation was accepted by the Board and PwC has been re-appointed as the Company’s
external auditor.
The Board of Directors has considered the position and, in accordance with advice received from the Audit Committee,
is satisfied that the provision of the non-audit services is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services
by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act
2001 for the following reasons:
• all non-audit services have been reviewed by the Audit and Risk Management Committees to ensure they do not impact
the impartiality and objectivity of the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants.
During the year the following fees were paid or payable for non-audit services provided by the auditor of the parent entity:
Other assurance services
Due diligence services
Other assurance services
Total remuneration for other assurance services
Taxation services
Tax compliance services, including review of Company income tax returns
Total remuneration for taxation services
Total remuneration for non-audit services
2022
$’000
250,700
126,498
377,198
2021
$’000
697,175
57,320
754,495
149,004
149,004
136,000
136,000
526,202
890,495
58
carsales Annual Report 2022
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set
out on page 60.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191, issued by the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts in
the Director’s Report. Amounts in the Director’s Report have been rounded off in accordance with that Class Order to
the nearest thousand dollars or, in certain cases, to the nearest dollar.
Auditor
PwC continues in office in accordance with section 327 of the Corporations Act 2001.
Corporate governance report
As allowed under the ASX Corporate Governance Principles and Recommendations (Fourth Edition) the Company has
included its report on compliance with the principles in the year to 30 June 2022 in the Corporate Governance section
of the Investor Centre on the carsales website. The full report can be found at the following URL: https://shareholder.
carsales.com.au/governance/.
This report is made in accordance with a resolution of Directors.
Pat O’Sullivan
Chair
Melbourne
14 August 2022
Cameron McIntyre
Managing Director and CEO
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59
carsales Annual Report 2022
AUDITOR’S INDEPENDENCE DECLARATION
Auditor’s Independence Declaration
As lead auditor for the audit of carsales.com Limited for the year ended 30 June 2022, I declare that to the best of my
knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(b) no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of carsales.com Limited and the entities it controlled during the period.
Lisa Harker
Partner
PricewaterhouseCoopers
Melbourne
14 August 2022
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
60
carsales Annual Report 2022
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61
carsales Annual Report 2022
FINANCIAL STATEMENT CONTENTS
CONSOLIDATED FINANCIAL STATEMENTS
OTHER ASSETS AND LIABILITIES
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Basis of preparation
Key estimates and judgements
Corporate information
KEY PERFORMANCE
1. Segment information
2. Revenue from contracts with customers
3. Other income and expenses
4. Earnings per share
5.
Income tax
6. Reconciliation of profit after income tax to
net cash inflow from operating activities
FINANCING AND RISK MANAGEMENT
7. Borrowings
8. Changes in assets and liabilities arising
from financing activities
9. Financial assets and liabilities and fair
value management
10. Financial risk management
EQUITY
11. Contributed equity
12. Reserves
13. Dividends
63
64
65
67
68
68
68
69
72
74
75
77
83
84
85
87
90
95
96
99
14. Trade and other receivables
15. Property, plant and equipment
16. Leases
17. Intangible assets
18. Payables and provisions
GROUP STRUCTURE
19. Interests in other entities (including
Trader Interactive)
20. Business combination
21. Parent entity financial information
22. Deed of cross guarantee
23. Related party transactions
100
101
103
106
110
111
119
120
121
124
ITEMS NOT RECOGNISED
24. Events occurring after reporting period
125
OTHER
25. Remuneration of auditors
26. Share-based payments
27. Other significant accounting policies
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT TO
THE MEMBERS OF CARSALES.COM.LTD
SHAREHOLDER INFORMATION
CORPORATE DIRECTORY
126
127
129
131
132
138
140
62
carsales Annual Report 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the Year Ended 30 June 2022
Continuing operations
Revenue from contracts with customers
Total revenue from continuing operations
Expenses
Costs of sale
Sales and marketing expenses
Service development and maintenance
Operations and administration
Earnings before interest, taxes, depreciation and amortisation
Depreciation and amortisation expense
Finance income
Finance costs
Changes in fair value of put options
Share of net profit from associates accounted for using the equity method
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Remeasurement of post-employment benefit obligations
Movement in net investment hedge (net of tax)
Movement in cash flow hedge (net of tax)
Items that will not be reclassified to profit or loss:
Changes in financial assets at fair value (net of tax) through other
comprehensive income
Other comprehensive income for the year
Total comprehensive income for the year
Profit for the year is attributable to:
Owners of carsales.com Ltd
Non-controlling interests
Total comprehensive income for the year is attributable to:
Owners of carsales.com Ltd
Non-controlling interests
Notes
2
2022
$’000
2021
$’000
509,077
509,077
427,164
427,164
3
19(c)
5(a)
(50,026)
(87,640)
(34,849)
(66,623)
269,939
(46,691)
477
(17,720)
289
17,176
223,470
(62,016)
161,454
30,105
(919)
-
(14,004)
(21,266)
(72,532)
(34,067)
(57,809)
241,490
(40,218)
608
(19,291)
-
3,946
186,535
(55,323)
131,212
(12,279)
251
17,575
25,593
12,372
2,139
27,554
33,279
189,008
164,491
160,816
638
161,454
188,370
638
189,008
130,704
508
131,212
163,983
508
164,491
Earnings per share for profit from continuing operations, attributable
to the ordinary equity holders of the parent entity:
Basic earnings per share
Diluted earnings per share
Notes
2022
Cents
2021
Cents
4
4
56.9
56.8
52.6
52.5
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
63
F
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E
carsales Annual Report 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2022
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Derivative assets
Inventory
Total current assets
Non-current assets
Investments accounted for using the equity method
Financial assets at fair value through other comprehensive income
Property, plant and equipment
Right-of-use assets
Deferred tax assets
Intangible assets
Other receivables
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Lease liabilities
Borrowings
Current tax liabilities
Provisions
Contract liabilities
Total current liabilities
Non-current liabilities
Other payables
Lease liabilities
Borrowings
Other financial liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained earnings
Non-controlling interests
Total equity
Notes
2022
$’000
2021
$’000
14
9
19(c)
19(d)
15
16
5
17
14
18
16
7
18
16
7
9
5
18
11
12
117,452
74,741
5,526
3,222
200,941
917,648
36,896
14,654
56,475
17,215
603,320
13,968
1,660,176
1,861,117
48,758
8,061
113
36,717
10,996
11,022
115,667
1,241
56,370
649,626
1,153
18,994
4,657
732,041
847,708
1,013,409
284,004
46,755
33,658
-
364,417
55,953
49,529
12,815
55,614
17,841
597,105
10,317
799,174
1,163,591
38,674
6,636
35
19,849
9,962
10,627
85,783
771
56,716
43,195
1,172
31,775
3,678
137,307
223,090
940,501
769,959
(1,865)
243,466
1,849
1,013,409
755,357
(21,440)
204,819
1,765
940,501
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
64
carsales Annual Report 2022 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Year Ended 30 June 2022
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
C
O
N
S
O
L
I
D
A
T
E
D
Balance at 1 July 2021
Profit for the year
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Remeasurement of post-employment
benefit obligations
Movement in cash flow hedge (net of tax)
Items that will not be reclassified to profit or loss
Changes in financial assets at fair value (net of
tax) through other comprehensive income
Total comprehensive income for the year
Transfer of gain on disposal of equity
investment at fair value through other
comprehensive income to retained earnings
Transactions with owners in their
capacity as owners:
Contributions of equity upon exercise
of employee share options
Contributions of equity net of transaction
costs and tax
Increase in share-based payment reserve
inclusive of tax
Dividends paid to company shareholders
Dividends paid to non-controlling interests
Transactions with non-controlling interests
Balance at 30 June 2022
Attributable to owners
of carsales.com Ltd
Notes
Contributed
equity
$’000
755,357
-
Reserves
$’000
(21,440)
-
Retained
earnings
$’000
204,819
160,816
Non-
controlling
interests
$’000
1,765
638
Total
equity
$’000
940,501
161,454
-
-
-
30,105
(919)
(14,004)
-
-
-
-
-
-
30,105
(919)
(14,004)
-
-
12,372
27,554
-
160,816
-
638
12,372
189,008
11
11
12
6,120
(1,436)
-
9,918
-
-
769,959
-
(13,426)
13,426
-
-
-
-
-
-
-
-
6,120
(1,436)
5,690
-
-
(243)
(1,865)
-
(135,595)
-
-
243,466
-
-
(549)
(5)
5,690
(125,677)
(549)
(248)
1,849 1,013,409
65
carsales Annual Report 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSKEYPERFORMANCEFINANCING ANDRISK MANAGEMENTEQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONT.
For the Year Ended 30 June 2022
Balance at 1 July 2020
Profit for the year
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations
Remeasurement of post-employment benefit
obligations
Movement in cash flow hedge net of tax
Movement in net investment hedge net of tax
Items that will not be reclassified to profit
or loss
Changes in financial assets at fair value (net of
tax) through other comprehensive income
Total comprehensive income
for the year
Transactions with owners in their
capacity as owners:
Contributions of equity upon exercise of
employee share options
Contributions of equity net of transaction
costs and tax
Increase in share-based payment reserve
inclusive of tax
Dividends paid to company shareholders
Dividends paid to non-controlling interests
Transactions with non-controlling interests
Balance at 30 June 2021
Attributable to owners
of carsales.com Ltd
Notes
Contributed
equity
$’000
149,817
-
Reserves
$’000
(56,253)
-
Retained
earning
$’000
197,235
130,704
Non-
controlling
interests
$’000
763
508
Total
equity
$’000
291,562
131,212
(12,279)
251
25,593
17,575
2,139
(12,279)
251
25,593
17,575
2,139
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,279
130,704
508
164,491
11
11
12
4,563
591,117
-
9,860
-
-
755,357
-
-
-
-
-
-
4,563
591,117
3,633
-
-
(2,099)
(21,440)
-
(123,120)
-
-
204,819
-
-
(210)
704
1,765
3,633
(113,260)
(210)
(1,395)
940,501
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
66
carsales Annual Report 2022 CONSOLIDATED STATEMENT OF CASH FLOWS
For the Year Ended 30 June 2022
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
C
O
N
S
O
L
I
D
A
T
E
D
Cash flows from operating activities
Receipts from customers (including GST)
Payments to suppliers and employees (including GST)
Income taxes paid
Net cash inflow from operating activities
Cash flows from investing activities
Payment for investment in non-controlling interests, associates and
subsidiaries (net of cash acquired and loans to associate)
Investment in term deposits with maturity greater than 3 months
Proceeds from financial instruments held for investing activities
Proceeds from sale of/(payment for) financial assets at fair value through
other comprehensive income
Payments for property, plant and equipment
Payments for intangible assets
Interest received
Proceeds from sale of property, plant and equipment
Dividends received from associates
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from issues of shares and other equity securities
(net of transaction costs)
Proceeds from borrowings
Repayment of borrowings
Payment of loan establishment fees
Principal elements of lease payments
Deposits paid for leases
Proceeds from financial instruments held for financing activities
Dividends paid to company shareholders
Dividends paid to non-controlling interests
Interest paid
Net cash inflow/(outflow) from financing activities
Effects of exchange rates on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
Notes
2022
$’000
2021
$’000
549,461
(282,938)
(62,880)
203,643
471,703
(214,852)
(56,347)
200,504
6
19(c)
13
19(b)
(849,036)
(14,593)
54,472
25,385
(7,882)
(40,391)
477
511
-
(831,057)
4,930
716,403
(112,141)
(699)
(7,836)
(2,166)
-
(125,677)
(549)
(10,175)
462,090
(18,892)
-
-
(2,169)
(4,570)
(28,780)
608
236
2,217
(51,350)
591,844
-
(500,298)
(2,364)
(8,242)
(2,223)
2,450
(113,260)
(210)
(11,343)
(43,646)
(1,228)
(166,552)
(1,441)
104,067
284,004
117,452
179,937
284,004
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
67
carsales Annual Report 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSKEYPERFORMANCEFINANCING ANDRISK MANAGEMENTEQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
30 June 2022
Basis of preparation
carsales.com Ltd is a for-profit entity for the purpose of preparing the financial statements. The consolidated financial
statements incorporate the assets and liabilities of all subsidiaries of carsales.com Ltd (‘Company’ or ‘parent entity’) as at
30 June 2022 and the results of all subsidiaries for the year then ended. carsales.com Ltd and its subsidiaries together are
referred to in this Financial Report as ‘the Group’ or ‘the consolidated entity’.
These general purpose financial statements:
(i) Have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board and the Corporations Act 2001.
(ii) Comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB).
(iii) Have been prepared on a going concern basis.
(iv) Have been prepared under the historical cost convention except for the revaluation of financial assets and liabilities
(including derivative instruments) measured at fair value through other comprehensive income.
Amounts in the financial statements are presented in Australian dollars with all values rounded to the nearest thousand
dollars, or in certain cases, the nearest dollar, in accordance with the Australian Securities and Investments Commission
Corporations Instrument 2016/191.
Key estimates and judgements
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the Group’s accounting policies.
The estimation uncertainty is predominantly related to the fair value measurement and recoverable amount assessments
for intangible assets (Note 17), the fair value measurement of acquired intangibles and their useful lives for equity
accounted investments (Note 19), financial assets and liabilities at fair value through other comprehensive income (Note 9)
and trade receivables (Note 14).
Other areas with a level of estimation includes deferred tax assets relating to tax losses, uncertain tax positions
and Research and Development (R&D) claim (Note 5).
Corporate Information
carsales.com Ltd (the ‘Company’) is a company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
carsales.com Ltd
Level 4, 449 Punt Road
Richmond Vic 3121
The Financial Report was authorised for issue by the Directors on 14 August 2022. The Directors have the power to amend
and reissue the Financial Report.
All press releases, Financial Reports and other information are available at our shareholders’ centre on our website:
www.carsales.com.au. For queries in relation to our reporting, please call +61 (3) 9093 8600.
These financial statements have been streamlined where key information is grouped together for ease of understanding
and readability. The notes include information which is required to understand the financial statements and is material and
relevant to the operations, financial position and performance of the Group. Information is considered material and
relevant if, for example:
• the amount in question is significant because of its size or nature;
• it is important for understanding the results of the Group;
• it helps to explain the impact of significant changes in the Group’s business – for example, acquisitions; or
• it relates to an aspect of the Group’s operations that is important to its future performance.
68
carsales Annual Report 2022 KEY PERFORMANCE
This section provides information that the Directors consider most relevant to understanding performance and
shareholder returns for the year and summarises the accounting policies, judgements and estimates relevant to
understanding these line items.
1. Segment information
Accounting policy
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker has been identified as the Chief Executive Officer (‘CEO’).
Management has determined the operating segments based on the reports reviewed by the CEO that are used to
make strategic decisions.
The Group’s operating segments are determined firstly based on location, and secondly by function, of the Group’s
operations. Effective for the year ended 30 June 2022, the Group has a new reporting segment called “Australia –
carsales Investments” which comprises the stand-alone investments in tyresales, Tyreconnect, RedBook Inspect and
Placie. The rationale behind changing operating and reporting segments is to better align with the operating group
structure and to separate stand-alone investments that have similar economic characteristics. Retaining these
businesses within the previous segment view could potentially misrepresent the underlying performance of the
higher margin core marketplace businesses. The Group has also aggregated investments in the USA, Chile, Mexico
and Brazil into one segment called Americas. The prior year comparatives have also been restated to reflect this.
The Group principally operates in five business segments which are described below:
Operating
segment
Nature of operations and primary source of
revenue
Geographical
location
Australia – Online
Advertising Services
Online Automotive Classifieds and Display Advertising
services.
Australia – Data,
Research and Services
Automotive Data Services including software, analysis,
research and reporting, valuation services, website
development, hosting and photography services.
Australia
Australia
This segment also includes display and consumer
advertising related to these divisions.
Australia – carsales
Investments
Online Tyre Retail and Wholesale, Mobility Services and
Inspection Services.
Australia
Americas
Asia
Online Automotive Classifieds, Display Advertising
services and Automotive Data Services.
Brazil, Chile, Mexico and
United States of America
Online Automotive Classifieds, Display Advertising
services and Automotive Data Services.
South Korea, Malaysia,
Thailand, China and Indonesia
F
I
N
A
N
C
A
L
I
S
T
A
T
E
M
E
N
T
S
C
O
N
S
O
L
I
D
A
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E
D
N
O
T
E
S
T
O
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H
E
C
O
N
S
O
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I
D
A
T
E
D
K
E
Y
I
F
I
N
A
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C
A
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A
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E
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E
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P
E
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F
O
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A
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E
69
carsales Annual Report 2022FINANCING ANDRISK MANAGEMENTEQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
1. Segment information continued
Segment analysis
Australia
– Online
Advertising
Services
$’000
307,208
195,878
Australia
– Data,
Research
and
Services
$’000
44,068
28,792
Australia
– carsales
Investments
$’000
56,489
(1,877)
Americas
$’000
5,957
(1,640)
Asia
$’000
95,355
48,786
(14)
-
-
17,190
-
204,495
17,013
30,852
940,051
446,973
Total
$’000
509,077
269,939
(46,691)
(17,243)
289
17,176
(62,016)
(638)
160,816
1,639,384
17,215
117,452
87,066
1,861,117
2022
Segment revenue
EBITDA
Depreciation and amortisation
expense
Net finance costs
Changes in fair value
of put options
Share of net profit/(loss)
from associates accounted
for using the equity method
Income tax expense
Non-controlling interests
Profit for the year
attributable to owners
of carsales.com Ltd
Segment assets
Deferred tax assets
Cash and cash equivalents
Unallocated assets
Total assets
70
carsales Annual Report 2022 F
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S
O
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D
N
O
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O
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O
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Total
$’000
427,164
241,490
(40,218)
(18,683)
3,946
(55,323)
(508)
130,704
784,224
17,841
284,004
77,522
1,163,591
*Australia
– Online
Advertising
Services
$’000
268,652
172,328
*Australia
– Data,
Research
and
Services
$’000
40,392
25,943
Australia
- carsales
Investments
$’000
27,138
974
Americas
$’000
6,686
(815)
Asia
$’000
84,296
43,060
(111)
-
-
4,057
-
222,641
16,930
3,317
78,331
463,005
RESTATED**
2021
Segment revenue
EBITDA
Depreciation and amortisation
expense
Net finance costs
Share of net profit/(loss)
from associates accounted
for using the equity method
Income tax expense
Non-controlling interests
Profit for the year
attributable to owners
of carsales.com Ltd
Segment assets
Deferred tax assets
Cash and cash equivalents
Unallocated assets
Total assets
* Revenue includes the impacts of the COVID-19 Dealer Support Package. Refer Note 2 for details.
** Balances for year ended 30 June 2021 have been restated with the change to operating segments.
Segment assets are measured in the same way as in the financial statements. Segment assets include goodwill, trade and
other receivables, brands, customer relationships, property, plant and equipment, right-of-use assets, financial assets at
fair value through other comprehensive income and investments accounted for using equity method. Unallocated assets
include intangible and other assets utilised across multiple segments. All unallocated assets are assessed by the chief
operating decision maker at a consolidated entity level.
Liabilities are not reported to the chief operating decision maker by segment. All liabilities are assessed at a consolidated
entity level.
71
carsales Annual Report 2022FINANCING ANDRISK MANAGEMENTEQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
2. Revenue from contracts with customers
Accounting policy
The group derives revenue from the transfer of goods and services over time and at a point in time in the following
product and reporting segment. Amounts disclosed as revenue are net of returns, agency commissions, trade
allowances, rebates and amounts collected on behalf of third parties. Where services have not been provided but
the Group is obligated to provide the services in the future, a contract liability is recognised.
Type of revenue
Reporting segment
Recognition criteria
Dealer leads
Online Advertising (Dealer)/
Americas/Asia
Dealer listings
Online Advertising (Dealer)/
Americas/Asia
Listing depth
products
Online Advertising (Dealer/
Private)/Americas/Asia
Private listing
Online Advertising (Private)/
Americas/Asia
Bundled products
Online Advertising (Dealer)/
Americas/Asia
Sponsorship
advertising
Online Advertising (Media)/
Americas/Asia
Performance
advertising and
contracts
Online Advertising (Media)/
Americas/Asia
Subscription services Online Advertising (Dealer/
Media)/Data, Research and
Services/Americas/Asia
Sale of goods
carsales Investments
Inspection services
carsales Investments/Asia
R&D tax rebate
Online Advertising
Lead revenues are recognised at a point in time upon
delivery of the lead to the dealers’ lead management
system.
Dealer listings usually have a definite end date to the
advertisement and where they do not, an average duration
is calculated. Revenues are recognised over the period
during which the listing is displayed on the carsales
network.
Transaction value is allocated to customer service
obligations based on the fair value and revenue is
recognised over the period during which the product
is displayed on the carsales network.
Private listings remain effective until the consumer
removes the advertisement. Revenues are recognised over
the average number of days advertisements are displayed
(based on historical trends).
Includes the combination of dealer advertising products
and corporate media services under one single contractual
price. Whilst the products are bundled, each individual
service has its own distinct performance obligations and
stand-alone selling prices (used to determine the fair value
of each service). Revenue is recognised over time as
performance obligations are fulfilled.
Revenues from sponsorship advertising are recognised in
the period over which the advertisements are placed or
displayed, depending on the type of contract.
Revenues from performance advertising and performance
contracts are recognised when the performance measure
occurs and is generated (e.g. cost per click).
Subscription revenues are recognised over the
subscription period.
Revenues are recognised at a point in time when goods
have been provided to a customer.
Revenue from vehicle inspection services are recognised
when the inspection service is performed.
The research and development claim of the Company
gives rise to a tax offset and this tax offset is recognised
as other income.
72
carsales Annual Report 2022 F
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Disaggregation of revenue from contracts with customers
The Group derives revenue from the transfer of goods and services over time and at a point in time in the following
major segments:
2022
Dealer
Private
Media
Total revenue from
external customers
Revenue is recognised:
At a point in time
Over time
RESTATED*
2021
Dealer
Private
Media
Total revenue from
external customers
Revenue is recognised:
At a point in time
Over time
Australia
– Data,
Research
and
Services
$’000
Australia
– carsales
Investments
$’000
Americas
$’000
Asia
$’000
Total
$’000
Australia
– Online
Advertising
Services
$’000
183,314
69,391
54,503
307,208
44,068
56,489
5,957
95,355
509,077
169,770
137,438
7,928
36,140
56,489
-
495
5,462
42,694
52,661
277,376
231,701
Australia
– Data,
Research
and
Services
$’000
Australia
– carsales
Investments
$’000
Americas
$’000
Asia
$’000
Total
$’000
Australia
– Online
Advertising
Services
$’000
166,333
55,303
47,016
268,652
40,392
27,138
6,686
84,296
427,164
150,624
118,028
7,970
32,422
27,138
-
507
6,179
27,291
57,005
213,530
213,634
* The allocation of revenues for the year ended 20 June 2021 between the group’s operating segments have been restated to align with the
new operating segments.
As part of a Dealer Support Package offered to customers in response to COVID-19 during FY21, carsales provided a
100% rebate for all fixed and variable fees for Victorian Metropolitan dealer customers incurred during Stage 4 lockdown
(6 August 2020 – 27 October 2020). The total support provided to dealers was $10.6 million. Revenue above is net
of these rebates.
73
carsales Annual Report 2022FINANCING ANDRISK MANAGEMENTEQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
3. Other income and expenses
Accounting Policy
(i) Defined benefit obligations
ENCARSALES.COM Ltd, the Group’s subsidiary in South Korea, operates a defined benefit plan, under which
amounts to be paid as retirement benefits are determined by reference to a formula based on employee’s earnings
and years of service. The defined benefit asset or liability comprises the present value of the defined benefit
obligations, less past service costs and actuarial gains and losses not yet recognised and less the fair value of plan
assets out of which the obligations are to be settled. The cost of providing benefits under the defined benefit plan
is determined using the projected unit credit method. The discount rate used in calculating the present value of
defined benefit obligations is determined by reference to market yields at the end of the reporting period on
high quality corporate bonds of a term consistent with the term of the post-employment benefit obligations.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding net interest,
and the return on plan assets, are recognised immediately in the statement of financial position with a
corresponding debit or credit to reserves through OCI in the period in which they occur.
Remeasurements are not reclassified to profit or loss in subsequent periods. Past service costs are recognised
in profit or loss on the earlier of:
• the date of the plan amendment or curtailment; and
• the date that the Company recognises restructuring-related costs.
(ii) JobKeeper
Receipts from the Australian JobKeeper program are accounted for as government grants and are included
in personnel expenses as a contra amount. There are no unfulfilled conditions or other contingencies attached
to these grants.
(iii) Finance costs
Fees paid on the establishment of loan facilities are recognised net against the loan and amortised on a straight-line
basis over the term of the facility. Borrowing costs incurred for the construction of any qualifying asset are
capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale.
Other borrowing costs are expensed. The unwinding of the discount on put option liabilities are recognised as a
finance expense.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over
the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for
each period.
Total profit before income tax includes the following specific expenses:
Employee benefits
JobKeeper grants
Defined benefit expense – ENCARSALES.COM, Ltd.
Interest – borrowings
Interest – leases
Other finance costs
Hedging costs
Amounts reclassified to income statement from Cash Flow Hedge Reserve
Total finance costs
74
2022
$’000
96,109
-
1,562
9,378
1,563
3,119
-
3,660
17,720
2021
$’000
96,577
(6,048)
1,415
8,450
1,577
2,929
1,541
4,794
19,291
carsales Annual Report 2022
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4. Earnings per share
Accounting Policy
Basic earnings per share is calculated by dividing:
• the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than
ordinary shares;
• by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account:
• the post income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares; and
• the weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
Options and performance rights granted to employees under the carsales.com Ltd Employee Option Plan are
considered to be potential ordinary shares and have been included in the determination of diluted earnings
per share to the extent to which they are dilutive. The options and performance rights have not been included
in the determination of basic earnings per share. Details relating to the options are set out in Note 26.
(a) Reported earnings per share
Earnings per share for profit attributable
to the ordinary equity holders of the Company:
Reported profit attributable to equity holders
of the Company
Weighted average number of ordinary shares
Dilutive impact of options
Dilutive impact of performance rights
Total weighted average number of ordinary shares
used in EPS calculation
Reported earnings per share/cents
Basic earnings
per share
Diluted earnings
per share
2022
2021
2022
2021
160,816,000
282,482,797
-
-
130,704,000
248,343,705
-
-
160,816,000
282,482,797
85,592
336,695
130,704,000
248,343,705
156,884
379,307
282,482,797
56.9
248,373,705
52.6
282,905,084
56.9
248,879,896
52.5
75
carsales Annual Report 2022FINANCING ANDRISK MANAGEMENTEQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
4. Earnings per share continued
(b) Adjusted earnings per share*
Reported profit attributable to equity holders
of the Company
Add: Dealer Support Packages (net of tax)
Add: restructuring and M&A transaction costs (net of tax)
Add: hedge close-out and FX
Add: one-off tax adjustment
Add: acquired intangibles amortisation (net of tax)
Add / Less: fair value revaluations (net of NCI)
Add: Trader Interactive non-recurring costs
Adjusted profit attributable to equity holders of the
Company for continuing operations
Adjusted earnings per share/cents for continuing
operations*
Basic earnings
per share
Diluted earnings
per share
2022
2021
2022
2021
160,816,000
321,000
1,327,000
3,222,000
-
23,050,000
(339,000)
6,431,000
130,704,000
7,456,000
1,459,000
4,793,000
1,306,000
6,662,000
400,000
-
160,816,000
321,000
1,327,000
3,220,000
-
23,050,000
(339,000)
6,431,000
130,704,000
7,456,000
1,459,000
4,793,000
1,306,000
6,662,000
400,000
-
194,828,000
152,780,000
194,828,000
152,780,000
69.0
61.5
68.8
61.4
* The Directors believe the presentation of “adjusted earnings per share” provides a useful measure to assess the performance of the Group by
excluding significant one-off items of income and expense to arrive at an adjusted profit measure which reflects the underlying financial
performance of the Group.
76
carsales Annual Report 2022 5. Income tax
Accounting Policy
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses. The current income tax charge is calculated on
the basis of the tax laws in the countries where the Company’s subsidiaries and associates operate and generate
taxable income. The Group establishes provisions where appropriate on the basis of amounts expected to be paid
to tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the
deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction
other than a business combination that at the time of the transaction affects neither accounting nor taxable profit
or loss. Deferred income tax is determined using tax rates (and laws) that are expected to apply when the related
deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax
liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in controlled entities where the Company is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future. Where there are current
and deferred tax balances attributable to amounts recognised directly in equity, they are also recognised directly
in equity.
The Group parent entity, carsales.com Ltd, and the controlled entities in the tax consolidated group account
for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax
consolidated group continues to be a standalone taxpayer in its own right.
Adoption of Voluntary Tax Transparency Code
On 3rd of May 2016, the Australian Treasurer released a Voluntary Tax Transparency Code (the TTC). The TTC
recommends additional tax information be publicly disclosed to help educate the public about large corporate
compliance with Australia’s tax laws. The Group fully supports the TTC and signed up to it from the financial year
ended 30 June 2019. Accordingly, the income tax disclosures in this Note include all relevant recommended
additional disclosures of Part A of the Code.
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carsales Annual Report 2022FINANCING ANDRISK MANAGEMENTEQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
5. Income Tax continued
Key Assumption/Accounting Estimates
Deferred tax assets relating to tax losses
The Group recognises deferred tax assets relating to carry forward tax losses to the extent there are sufficient
taxable temporary differences relating to the same taxable authority and the same subsidiary against which the
unused tax losses can be utilised. However, utilisation of the tax losses also depends on the ability of the entity
to satisfy certain tests at the time the losses are recouped.
Uncertain tax positions
The Group applies its current understanding of the tax law to estimate tax liabilities where the ultimate tax position
is uncertain. When the tax position is ultimately determined or tax laws change, the actual tax liability may differ
from this current estimate.
Research and development (R&D) claim
The research and development claim available to the Company is estimated in the accounts because a full
assessment of the position cannot be made by the year end. It is the policy of the Company to only bring to account
that preliminary portion of expenses that is reasonably expected to be claimable at period end.
(a) Income tax expense
Current tax
Adjustments for current tax of prior periods
Deferred tax
Adjustments for deferred tax of prior periods
Deferred income tax expense included in income tax expense comprises:
Increase in deferred tax assets
Decrease in deferred tax liabilities
2022
$’000
65,120
(684)
(2,517)
97
62,016
(678)
(1,839)
(2,517)
2021
$’000
61,920
(1,564)
(5,079)
46
55,323
(3,247)
(1,832)
(5,079)
78
carsales Annual Report 2022
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(b) Numerical reconciliation of income tax expense
Profit from continuing operations before income tax expense
Tax at the Australian tax rate of 30.0% (2021 – 30.0%)
Tax effect of amounts which are not deductible/(taxable) in calculating taxable income:
Non-assessable income (R&D tax offset) (a)
Share options (b)
Sundry items
Non-deductible amortisation
Adjustment for prior periods
Current year losses for which no deferred tax has been recognised or tax losses written off (c)
Tax relating to net profit from associates (d)
Other assessable income
Income tax differential (effect of foreign tax rates) (e)
Income tax expense
2022
$’000
223,470
67,041
2021
$’000
186,535
55,960
(395)
(1,523)
3,084
1,098
(587)
1,591
(5,153)
-
(3,140)
62,016
(315)
(597)
1,809
1,438
(1,517)
1,420
(1,184)
1,126
(2,817)
55,323
(c) Amounts recognised directly into equity
Aggregate current and deferred tax arising in the reporting period and not recognised in the income statement or other
comprehensive income but directly (credited) or debited to equity:
Current tax – (credited) directly to equity
Net deferred tax – debited/(credited) directly to equity (f)
2022
$’000
(31)
9,913
9,882
2021
$’000
(588)
(13,870)
(14,458)
Explanation of key tax items:
(a) Group’s utilisation of research and development tax incentives.
(b) Amount relating to the provision of equity incentives.
(c) Amount relating to tax losses for which a deferred tax asset has not been recognised. The majority of these
losses may be carried forward for between 5 and 10 years. Also includes amount relating to the write-off of tax
losses for which a deferred tax asset had previously been recognised.
(d) The Group’s share of associates’ results taken up in Group results, net of tax expense.
(e) The Group’s profits are taxed at prevailing statutory rates which vary to the Australian statutory tax rate (as
noted in the table below).
(f) Related to equity incentives, capitalised equity raising costs and cross-currency interest rate swap.
79
carsales Annual Report 2022FINANCING ANDRISK MANAGEMENTEQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
5. Income Tax continued
Statutory tax rates:
Country
Australia
New Zealand
Malaysia
China
Thailand
South Korea
USA
Argentina
Chile
Mexico
(d) Effective tax rate
Profit before income tax expense (A)
Income tax expense (B)
Effective tax rate (B/A)
2022
30%
28%
24%
25%
20%
22%
21%
35%
27%
30%
2021
30%
28%
24%
25%
20%
22%
21%
35%
27%
30%
2022
$’000
223,470
62,016
28%
2021
$’000
186,535
55,323
30%
The effective tax rate for 2022 was affected by tax relating to net profit from associates, without which the effective tax rate
for the year would have been 30%.
The effective tax rate for 2021 was affected by net non-deductible items relating to the terminated cross-currency swaps,
without which the effective tax rate for the year would have been 28%.
Tax losses
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit
2022
$’000
29,287
9,203
2021
$’000
23,525
7,451
The unrecognised tax losses were incurred by loss making subsidiaries that are not likely to generate taxable income in the
foreseeable future.
80
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E
(e) Deferred tax assets
The balance comprises temporary differences attributable to:
Employee
benefits
$’000
3,328
Employee
Share
Trust
$’000
2,109
Doubtful
debts
$’000
658
Expense
accruals
$’000
4,511
Intan-
gibles
$’000
(3,079)
Tax
losses
$’000
2,219
Derivatives
$’000
-
Total
Other
$’000
$’000
8,095 17,841
219
965
(363)
(1,760)
540
-
(919)
-
-
-
-
-
(81)
3,466
-
2,155
-
295
-
2,751
-
(2,539)
(56)
2,163
-
1,077
678
-
-
-
(246) (1,165)
(2)
(139)
8,924 17,215
3,758
1,910
733
703
(1,693)
2,155
4,254
3,884 15,704
(397)
153
(75)
3,808
(1,386)
-
46
(33)
3,328
-
2,109
-
-
658
2
-
-
1,142
3,247
(4,254)
3,069
(1,139)
-
-
-
4,511
-
(3,079)
62
2,219
-
-
-
29
8,095 17,841
At 1 July 2021
(Charged) /
credited to profit
or loss
Credited /
(charged) directly
to equity
Exchange
differences
At 30 June 2022
At 1 July 2020
(Charged) /
credited to profit
or loss
Credited /
(charged) directly
to equity
Exchange
differences
At 30 June 2021
Deferred tax assets expected to be recovered within 12 months
Deferred tax assets expected to be recovered after more than 12 months
2022
$’000
10,375
6,840
17,215
2021
$’000
10,977
6,864
17,841
Certain liability balances are shown as part of deferred tax assets, as they originate in the same jurisdiction as, and can be
offset against, other deferred tax assets. The liability balance for intangibles shown as part of deferred tax assets relates
to in-house developed and capitalised software in Australia.
81
carsales Annual Report 2022FINANCING ANDRISK MANAGEMENTEQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
5. Income Tax continued
(f) Deferred tax liabilities
The balance comprises temporary differences attributable to:
At 1 July 2021
Charged/(credited) to the profit or loss
Charged/(credited) directly to equity
Acquired intangibles
Exchange differences
At 30 June 2022
At 1 July 2020
Charged/(credited) to the profit or loss
Charged directly to equity
Acquired intangibles
Exchange differences
At 30 June 2021
Intangibles
$’000
16,766
(1,839)
-
(1,366)
(827)
12,734
Fair Value
Investment
$’000
4,911
-
(309)
-
-
4,602
Derivatives
$’000
10,098
-
(8,440)
-
-
1,658
Withholding
Tax
$’000
-
-
-
-
-
-
15,564
(1,832)
-
3,529
(495)
16,766
-
-
4,911
-
-
4,911
-
-
10,098
-
-
10,098
Total
$’000
31,775
(1,839)
(8,749)
(1,366)
(827)
18,994
15,564
(1,832)
15,009
3,529
(495)
31,775
2021
$’000
11,930
19,845
31,775
-
-
-
-
-
-
2022
$’000
3,498
15,496
18,994
Deferred tax liabilities expected to be settled within 12 months
Deferred tax liabilities expected to be settled after more than 12 months
82
carsales Annual Report 2022
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D
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S
T
O
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H
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C
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O
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I
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6. Reconciliation of profit after income tax to net cash inflow from
operating activities
Profit for the year
Depreciation and amortisation
Non-cash employee benefits expense – share-based payments
(Gain)/loss on disposal of assets
Net finance related costs
Share of net profit from associates accounted for using the equity method
Bad debts written-off/(recovered)
Changes in fair value of put options
Building refurbishment incentive income
Adjustments relating to purchase of non-controlling interests and subsidiaries
Foreign exchange differences
Change in operating assets and liabilities:
(Increase)/decrease in trade debtors
(Increase) in inventory
Decrease/(increase) in deferred tax assets
Increase in trade creditors and other liabilities
Increase/(decrease) in contract liabilities
Increase in provision for income taxes payable
(Decrease) in deferred tax liabilities
Increase in other provisions
Net cash inflow from operating activities
2022
$’000
161,454
46,691
2,098
(145)
17,243
(17,176)
182
(289)
(584)
-
-
(10,219)
(2,256)
129
7,410
395
596
(2,903)
1,017
203,643
2021
$’000
131,212
40,218
3,001
260
18,683
(3,946)
(401)
-
(597)
(323)
208
4,037
-
(2,690)
5,306
(426)
1,785
(1,248)
5,425
200,504
83
carsales Annual Report 2022FINANCING ANDRISK MANAGEMENTEQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
FINANCING AND RISK MANAGEMENT
This section provides information about the capital management practices of the Group, the Group’s exposure and
management of various financial risks and explains how these affect the Group’s financial position and performance.
7. Borrowings
Accounting policy
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in the profit or loss over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised net against the loan and amortised on a straight-
line basis over the term of the facility.
Borrowings are derecognised from the consolidated statement of financial position when the obligation specified in
the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability
that has been extinguished or transferred to another party and the consideration paid, including any non-cash
assets transferred or liabilities assumed, is recognised in other income or other expenses.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement
of the liability for at least 12 months after the balance sheet date.
Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that
is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed
in the period in which the expense is incurred.
Current borrowings
Non-current borrowings
2022
$’000
113
649,626
649,739
2021
$’000
35
43,195
43,230
At 30 June 2022 carsales.com Ltd had a syndicated revolving loan facility and established a $900.0 million debt facility
under a Common Terms Deed (CTD) documentation structure as follows:
Facility
Tranche A
Tranche B
Total
Commitment
$’000
690,000
210,000
900,000
Drawn
at close
$’000
441,000
210,000
651,000
Maturity
date
5 July 2024
4 July 2023
Seven financiers are part of the syndicate and each of these financiers entered into a bilateral facility agreement with
the Company under the CTD documentation structure. The syndicate comprises National Australia Bank Limited (NAB),
Australia and New Zealand Banking Group Limited (ANZ), Hongkong and Shanghai Banking Corporation Limited (HSBC),
Westpac Banking Corporation (WBC), Commonwealth Bank of Australia (CBA), MUFG Bank Limited and Bank of China
(BOC).
Borrowings under this loan facility bear interest at a floating rate of BBSY Bid plus a margin, with margin based on
a net leverage ratio of the Group. The Group has complied with all debt covenants throughout the reporting period.
On 8 July 2022, the $651.0 million drawn down amount was repaid to the Tranche A and Tranche B financiers.
84
carsales Annual Report 2022
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S
O
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N
T
The Group has access to the following undrawn borrowing facilities at the end of the reporting period:
Floating rate
– Expiring within one year
– Expiring within two to five years
2022
$’000
-
249,000
249,000
2021
$’000
-
855,000
855,000
Bank guarantee facility
Guarantees in respect of bank facilities drawn down but not included in the accounts of the Group are $4.0 million
(2021: $2.4 million).
8. Changes in assets and liabilities arising from financing activities
The table below shows cash and non-cash changes in assets and liabilities for which cash flows were, or will be, classified
as financing activities in the Consolidated Statement of Cash Flows.
Liabilities from
financing activities
Other financial
liabilities/assets
2022
Opening balance
Borrowings
$’000
(43,230)
Lease
liabilities
$’000
(63,352)
Other
financial
liabilities
$’000
(1,172)
Derivative
(liabilities)/
assets
$’000
33,658
Lease
deposits
$’000
10,464
Net cash flows from financing activities
Acquisitions – leases
Modification – leases
Fair value through OCI (net of tax)
Fair value through P&L
Foreign exchange adjustments
Other changes
Closing balance
(604,262)
-
-
-
-
-
(2,247)
(649,739)
7,836
(7,617)
(1,652)
-
-
354
-
(64,431)
-
-
-
(243)
289
-
(27)
(1,153)
-
-
-
(33,658)
-
-
-
-
2,166
-
-
-
-
(505)
-
12,125
Total
$’000
(63,632)
(594,260)
(7,617)
(1,652)
(33,901)
289
(151)
(2,274)
(703,198)
85
carsales Annual Report 2022EQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
8. Changes in assets and liabilities arising from financing activities
continued
Liabilities from
financing activities
Other financial
liabilities/assets
Borrowings
$’000
(544,244)
Lease
liabilities
$’000
(60,971)
Other
financial
liabilities
$’000
-
Derivative
(liabilities)/
assets
$’000
(14,179)
Other
finance
receiv-
ables/
(payables)
$’000
(899)
Lease
Deposits
$’000
8,443
Total
$’000
(611,850)
500,298
-
-
-
-
8,242
(4,263)
(6,487)
270
-
-
-
-
-
-
-
-
-
-
716
(43,230)
(143)
-
(63,352)
-
(1,172)
(1,172)
(4,772)
-
-
-
-
52,609
-
-
33,658
2,322
-
-
-
(1,423)
-
-
-
-
2,223
-
-
-
-
508,313
(4,263)
(6,487)
270
(1,423)
-
52,609
(202)
-
10,464
(345)
(456)
(63,632)
2021
Opening balance
Net cash flows from
financing activities
Acquisitions – leases
Modification – leases
Termination – leases
Finance costs
Fair value through OCI
(including tax)
Foreign exchange
adjustments
Other changes
Closing balance
86
carsales Annual Report 2022 9. Financial assets and liabilities and fair value measurement
Accounting Policy
Derivatives
Classification of derivatives
The Company designates derivatives as hedging instruments in respect of foreign currency risk and interest rate risk
in fair value hedges, cash flow hedges, or hedges of net investments in foreign operations as appropriate. Hedges
of foreign exchange risk on firm commitments are accounted for as cash flow hedges.
Derivatives are only used for economic hedging purposes and not as speculative investments. However, where
derivatives do not meet the hedge accounting criteria, they are classified as ‘held for trading’ for accounting
purposes and are accounted for at fair value through profit or loss. The hedges are presented as current assets
or liabilities to the extent they are expected to be settled within 12 months after the end of the reporting period.
Cash flow hedges
Cash flow hedges are accounted for as follows: the fair value gain or loss associated with the effective portion of the
derivative is recognised initially in other comprehensive income (cash flow hedge reserve – CFHR) and then recycled
to the income statement in the same period that the hedged item affects the income statement. Any ineffective
portion of the gain or loss on the hedging instrument is recognised in the income statement immediately.
Hedge effectiveness
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective
effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging
instrument.
For the cross-currency swaps, the Company enters into hedge relationships where the critical terms of the hedging
instrument match exactly with the terms of the hedged item. Therefore, it has adopted a 1:1 ratio. The Company
therefore performs a qualitative assessment of effectiveness. If changes in circumstances affect the terms of the
hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument,
a hypothetical derivative method is used to assess effectiveness.
For the interest rate swaps that have similar critical terms as the hedged item, such as reference rate, reset dates,
payment dates, maturities and notional amount, as all critical terms matched during the year, the economic
relationship was 100% effective.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost, less
the loss allowance. Due to the short-term nature of the receivables, the carrying amount is assumed to approximate
their fair value. The balance of trade and other receivables are disclosed in Note 14.
Financial assets at fair value through other comprehensive income
Refer Note 19(d) for the accounting policy on financial assets at fair value through other comprehensive income.
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87
carsales Annual Report 2022EQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
9. Financial assets and liabilities and fair value measurement continued
Financial assets and liabilities that are carried at fair value are measured by the following fair value measurement hierarchy:
Level 1: the fair value of financial instruments traded in active markets (such as publicly traded derivatives and equity
securities) is based on quoted market prices at the end of the reporting period;
Level 2: the fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates.
If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2; and
Level 3: if one or more of the significant inputs is not based on observable market data, the instrument is included
in level 3.
Financial asset/liability
Financial assets measured at fair value through OCI
Quoted equity instruments which are listed on the Australian Securities
Exchange (“ASX”) (i)
Derivative financial assets (ii)
Unquoted financial assets (iii)
Financial liabilities measured at fair value through profit or loss
Other financial liabilities (iv)
Level
2022
$’000
2021
$’000
1
2
3
3
10,455
5,526
26,441
35,267
33,658
14,262
(1,153)
(1,172)
(i) During the year, the Group sold its investment in iCar Asia, refer to Note 19 for more details.
(ii) The balance at 30 June 2022 represents forward foreign exchange contracts held for the purpose of hedging the Trader
Interactive purchase. The forward exchange contracts are valued at the present value of future cash flows based on
the forward exchange rates at the balance sheet date.
(iii) Investments in unquoted financial assets are measured at fair value through other comprehensive income and
includes PromisePay Pte Ltd, mx51 Group Pty Ltd and other equity investments, refer Note 19(d). The fair value of the
investments in PromisePay Pte Ltd and mx51 has been calculated after strategic investors injected capital into the
businesses during the year. The fair value of other equity investments is based on capital contributions and adjusted
for independent valuation performed by the fund managers on a quarterly basis.
(iv) Other financial liabilities are put option liabilities which are based on a contractual multiple of future earnings of an
acquired subsidiary for a defined period and were valued at financial year end based on forecast of earnings for the
acquired subsidiary.
88
carsales Annual Report 2022 F
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a) Derivative assets and liabilities
At June 2022, the Group holds forward foreign exchange contracts for USD with a total notional value of $1,213.4 million
and a maturity of September 2022. These contracts are designated as a cash flow hedge to protect against foreign
exchange fluctuations relating to purchase of the remaining 51% of Trader Interactive (refer note 24). Unrealised hedge
gains and losses are recognised in the cash flow hedge reserve net of tax.
In May 2021, the Group entered into forward foreign exchange contracts for USD with a total notional value of $812.8
million and a maturity of December 2021. These contracts were designated as a cash flow hedge to protect against foreign
exchange fluctuations relating to the initial investment in Trader Interactive and unrealised hedge gains and losses were
recognised in the cash flow hedge reserve net of tax. In August 2021, the forward contracts were settled resulting in a net
cash inflow of $54.5 million. The net gain was recycled from the cash flow hedge reserve and the effective portion was
capitalised to the investment in Trader Interactive. The ineffective portion ($2.0 million) was recognised in the income
statement in net finance costs.
In the prior year, the Company also closed out its AUD:KRW Non-Deliverable Cross-Currency Swaps resulting in a net cash
inflow of $4.8 million. During the year, $5.7 million (2021: $4.8 million) was recycled from the cash flow hedge reserve
to the income statement as a finance cost.
The following tables detail information regarding forward foreign exchange (FX) contracts and the cross-currency interest
rate swaps designated in cash flow hedge or net investment hedge relationships at the end of the reporting period and
their related hedged items. All derivative assets and liabilities were closed out as at 30 June 2022.
Carrying
amount of
hedging
instrument
Assets/
(Liabilities)
$’000
Current
notional
amount
$’000
Change in
value of
hedging
instrument
$’000
Change in
value of
hedged
item
$’000
Ineffec-
tiveness
$’000
CFH
Reserve
opening
balance
before tax
Dr/(Cr)
$’000
Movement
in CFH
Reserve
Dr/(Cr)
$’000
Closing CFH
Reserve
before tax
Dr/(Cr)
$’000
-
-
-
-
-
11,376
(5,688)
5,688
1,213,375
1,213,375
5,526
5,526
(28,132)
(28,132)
(28,132)
(28,132)
(2,029)
(2,029)
(33,658)
(22,282)
28,132
22,444
(5,526)
162
Carrying
amount of
hedging
instrument
Assets/
(Liabilities)
$’000
Current
notional
amount
$’000
Change in
value of
hedging
instrument
$’000
Change in
value of
hedged
item
$’000
Ineffec-
tiveness
$’000
CFH
Reserve
opening
balance
before
tax Dr/(Cr)
$’000
Movement
in CFH
Reserve
Dr/(Cr)
$’000
Closing
CFH
Reserve
before
tax Dr/(Cr)
$’000
-
-
-
-
812,845
812,845
33,658
33,658
33,658
33,658
33,658
33,658
-
-
-
19,156
(7,780)
11,376
-
19,156
(33,658)
(41,438)
(33,658)
(22,282)
89
2022
Cash flow
hedges
Cross-
currency
interest rate
swap
Forward
foreign
exchange
contracts
Total
2021
Cash flow
hedges
Cross-
currency
interest rate
swap
Forward
foreign
exchange
contracts
Total
carsales Annual Report 2022EQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
10. Financial risk management
Accounting Policy
For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at
call with financial institutions, other short-term highly liquid investments with original maturities of three months or
less that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in
value and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the consolidated
statement of financial position.
The Company’s exposure to interest rate risk is discussed below.
The Group’s activities expose it to a variety of financial risks: foreign exchange risk, price risk, credit risk, interest rate risk
and liquidity risk. The Group’s overall risk management program focusses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses different methods
to measure different types of risk to which it is exposed.
Risk management is the responsibility of the Head of Tax, Treasury and Risk and the Chief Financial Officer (CFO) and
follows approved policies of the Board of Directors. They identify, evaluate and hedge financial risks in close cooperation
with the Group’s operating leaders.
(a) Market risk
(i) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures,
primarily with respect to the Brazilian Real (BRL), the South Korean Won (KRW), the Mexican Peso (MXP), the US Dollar
(USD), the Chilean Peso (CLP) and the Argentinian Peso (ARS). Foreign exchange risk arises from future commercial
transactions and recognised assets and liabilities denominated in a currency that is not the functional currency of the
relevant group entity.
Risk management policy
Hedging contracts are sometimes used to manage foreign currency exchange risk. The Company has a treasury strategy
and a treasury policy and will actively hedge any major known commitments using forward exchange contracts. Trading
and dividend cash flows between associates, subsidiaries and the Group are not hedged unless the cash flows are
significant and the amount and future payment date are certain.
Material arrangements in place at reporting date
In June 2022, the Group entered into forward foreign exchange contracts for USD with a total notional value of
$1,213.4 million and a maturity of 30 September 2022. These contracts were entered into to protect against foreign
exchange fluctuations relating to the acquisition of the remaining 51% interest in Trader Interactive, which will be completed
in FY23 (refer to Note 24 for more details). They have been designated as a cash flow hedge for accounting purposes.
90
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N
T
Material exposures and sensitivity
The analysis below reflects management’s view of possible movements in relevant foreign currencies against the Australian
dollar. The table summarises the range of possible outcomes that would affect the Group’s net profit and equity as a result
of foreign currency movements (excluding derivatives):
Impact on profit:
AUD to KRW
AUD to BRL
AUD to MXP
AUD to CLP
AUD to ARS
AUD to USD
Net Movement
Impact on equity:
AUD to KRW
AUD to BRL
AUD to MXP
AUD to CLP
AUD to ARS
AUD to USD
Net Movement
Hedge Sensitivity
(+5% to -5%)
(+5% to -5%)
(+5% to -5%)
(+5% to -5%)
(+5% to -5%)
(+5% to -5%)
(+5% to -5%)
(+5% to -5%)
(+5% to -5%)
(+5% to -5%)
(+5% to -5%)
(+5% to -5%)
2022
$’000
-5%
1,096
261
(123)
69
(13)
417
1,707
21,333
2,771
(1,048)
201
(98)
40,814
63,973
2021
$’000
-5%
1,052
193
(124)
9
(38)
n/a
1,092
21,408
2,551
(897)
248
(30)
n/a
23,280
2022
$’000
+5%
(1,096)
(261)
123
(69)
13
(417)
(1,707)
(21,333)
(2,771)
1,048
(201)
98
(40,814)
(63,973)
2021
$’000
+5%
(1,052)
(193)
124
(9)
38
n/a
(1,092)
(21,408)
(2,551)
897
(248)
30
n/a
(23,280)
There are no active hedges at 30 June 2022. In the prior year, management calculated the impact on the balance sheet for
the year as a result of a +/- 5% variance change in the forward foreign exchange contracts held, noting the position would
decrease by $58.0 million or increase by $64.2 million respectively.
(ii) Price risk
The Group’s exposure to equity securities price risk arises from the 9.5% of Plenti Group Ltd held by the Group and
classified in the balance sheet as a financial asset at fair value through other comprehensive income (see Note 19(d)).
Changes in the fair value are recognised directly in other comprehensive income as an irrevocable election was made
by the Group on adoption of AASB 9 Financial Instruments. A movement in the value of this asset upwards or downwards
by 5% would increase or decrease the carrying value by $0.5 million with a corresponding debit or credit recognised in
other comprehensive income.
Other than the investments above, the Group is not exposed to significant price equities risk.
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carsales Annual Report 2022EQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
10. Financial risk management continued
(b) Credit risk
Credit risk of the Group arises predominantly from outstanding receivables from customers and from its financing
activities, including deposits with financial institutions.
Risk management policy
It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures,
which may include an assessment of their financial position, past experience and industry reputation, depending on the
amount of credit to be granted.
Receivables balances are monitored on an ongoing basis. The Group applies the AASB 9 simplified approach to measuring
expected credit losses which uses a lifetime expected loss allowance for all trade receivables. To measure the expected credit
losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. The expected
loss rates are based on the payment profiles of sales over a period of 24 months before reporting date and the
corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current
and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables.
Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and
financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted by carsales.com Ltd.
Material arrangements in place at the reporting date
The net trade receivables balance at 30 June 2022 was $44.3 million (2021: $39.3 million). See below for the aging profile
of net trade receivables.
2022
$’000
Expected
loss rate
0-0.5%
1%
2.5-5%
7.5-10%
50-80%
80-100%
Gross
Receiv-
ables*
35,163
8,378
798
298
427
461
45,525
Note
14
Loss
allowance**
68
58
31
38
100
950
1,245
Gross
Receiv-
ables*
36,233
2,463
585
295
196
2,119
41,891
2021
$’000
Expected
loss rate
0-0.5%
1.0%
2.5-5.0%
7.5-10%
50-80%
80-100%
Current
More than 30 days past due
More than 60 days past due
More than 90 days past due
More than 120 days past due
More than 180 days past due
Total
* Gross receivables includes unapplied credits.
** Loss allowance is calculated on gross receivables balance excluding unapplied credits.
The loss allowance for trade receivables as at 30 June reconciles to the opening loss allowance as follows:
Opening loss allowance as at 1 July
Increase in loss allowance recognised in profit or loss during the year
Receivables written off during the year as uncollectible
Closing loss allowance at 30 June
2022
$’000
2,633
576
(1,964)
1,245
Loss
allowance**
29
24
29
22
118
2,411
2,633
2021
$’000
2,925
476
(768)
2,633
Trade receivables are written-off when there is no reasonable expectation of debt recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with
the Group, and a failure to make contractual payments for a period greater than 180 days past due. Impairment losses
on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts
previously written-off are credited against the same line.
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T
Material exposures and sensitivity
The Group’s maximum exposures to credit risk at balance date in relation to each class of recognised financial assets
is the carrying amount of those assets.
(c) Interest rate risk
The consolidated entity’s exposure to the cash flow risk of changes in market interest rates relates primarily to cash
at bank and long-term borrowings. Cash and cash equivalents draw interest at variable interest rates.
Risk management policy
carsales.com Ltd has a Board-approved treasury policy and treasury strategy for the management of interest rate risk.
The Board keeps the decision to actively hedge interest rate risk under regular review. Any derivative contracts will be
entered into solely for interest rate risk and currency risk management and no speculative hedging is permitted under
the policy.
Material arrangements in place at the reporting date
The Group has $651.0 million (2021: $45.0 million) variable rate borrowings at a weighted average interest rate of 1.8%
(2021: 1.6%). The borrowings are periodically contractually repriced every three months and to that extent are also
exposed to the risk of future changes in market interest rates.
Material exposures and sensitivity
The following table summarises the sensitivity of the Group’s financial assets and financial liabilities to interest rate risk.
At 30 June 2022
Financial assets
Cash and cash equivalents
Financial liabilities
Variable rate borrowings
Total increase/(decrease)
At 30 June 2021
Financial assets
Cash and cash equivalents
Financial liabilities
Variable rate borrowings
Total increase/(decrease)
Interest rate risk
-100 bps
+100 bps
Carrying
amount
$’000
Note
Profit
$’000
Other
equity
$’000
Profit
$’000
Other
equity
$’000
117,452
(1,261)
(1,261)
1,261
1,261
7
(649,532)
5,973
4,712
5,973
4,712
(5,973)
(4,712)
(5,973)
(4,712)
284,004
(1,754)
(1,754)
1,754
1,754
7
(43,195)
4,407
2,653
4,407
2,653
(4,407)
(2,653)
(4,407)
(2,653)
93
carsales Annual Report 2022EQUITYOTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
10. Financial risk management continued
(d) Liquidity risk
Prudent liquidity risk management entails maintaining sufficient cash and marketable securities, the availability of funding
through an adequate amount of committed credit facilities and the ability to close out market positions.
Risk management policy
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities. The Group maintains borrowing facilities to enable the Group to borrow funds
when necessary.
Material arrangements in place at reporting date
Borrowings (Note 7)
Lease liabilities (Note 16)
Less: cash and cash equivalents
Less: term deposits (Note 14)
Net debt
2022
$’000
649,739
64,431
(117,452)
(14,593)
582,125
2021
$’000
43,230
63,352
(284,004)
-
(177,422)
Material exposures – Contractual maturities of financial liabilities
The following table sets out the Group’s exposure to liquidity risk. The amounts disclosed in the table are the contractual
undiscounted cash flows.
At 30 June 2022
Non-derivatives
Non-interest bearing payables
Variable rate borrowings
Fixed rate borrowings
Lease liabilities
Other financial liabilities
Total non-derivatives
At 30 June 2021
Non-derivatives
Non-interest bearing payables
Variable rate borrowings
Fixed rate borrowings
Lease liabilities
Other financial liabilities
Total non-derivatives
0–12
Months
$’000
Between 1
and 2 years
$’000
Between 2
and 5 years
$’000
Over 5
Years
$’000
Total
contractual
cash flows
$’000
Carrying
amount
liabilities
$’000
48,758
-
119
9,379
-
58,256
1,241
213,400
98
8,655
1,153
224,547
-
449,233
-
20,820
-
470,053
-
-
-
34,576
-
34,576
49,999
662,633
217
73,430
1,153
787,432
49,999
649,532
207
64,431
1,153
765,322
0–12
Months
$’000
Between 1
and 2 years
$’000
Between 2
and 5 years
$’000
Over 5
Years
$’000
Total
contractual
cash flows
$’000
Carrying
amount
liabilities
$’000
38,674
-
46
8,239
-
46,959
-
-
-
7,656
-
7,656
771
45,163
-
17,729
1,172
64,835
-
-
-
38,557
-
38,557
39,445
45,163
46
72,181
1,172
158,007
39,445
43,195
35
63,352
1,172
147,199
Net fair value of financial assets and liabilities
The net fair value of cash and cash equivalents, non-interest bearing monetary financial assets and non-interest bearing
financial liabilities of the consolidated entity approximates their carrying amounts. There are no off-balance sheet financial
instruments in place.
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EQUITY
This section provides information about the capital management practices of the business.
11. Contributed equity
Accounting Policy
Ordinary shares are classified as equity.
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in
proportion to the number of, and amounts paid on, the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy is entitled to one
vote, and upon a poll, each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
Incremental costs directly attributable to the issue of new shares, options or performance rights are shown in equity
as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or
options or performance rights for the acquisition of a business are not included in the cost of the acquisition as part
of the purchase consideration.
Movement in ordinary fully paid shares during the period
Balance at 1 July 2021
Issue of shares and exercise of options and performance rights under the carsales.com Ltd
Employee Option and Share Plan
Dividend Reinvestment Plan
Less: transaction costs arising on share issues
Deferred tax recognised directly in equity
Balance at 30 June 2022
Balance at 1 July 2021
Exercise of options and performance rights under the carsales.com Ltd Employee Option Plan
Dividend Reinvestment Plan
Capital raised
Less: transaction costs arising on share issues
Deferred tax recognised directly in equity
Balance at 30 June 2021
Number of
shares
281,966,582
450,847
428,040
-
-
282,845,469
245,613,817
540,755
513,916
35,298,094
-
-
281,966,582
$’000
755,357
6,120
9,918
(1,190)
(246)
769,959
149,817
4,563
9,860
600,068
(12,787)
3,836
755,357
Information relating to the carsales.com Ltd Employee Option Plan, including details of options and performance rights
issued, exercised and lapsed during the financial year and options and performance rights outstanding at the end of the
financial year, is set out in Note 26.
95
carsales Annual Report 2022OTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
12. Reserves
Nature and purpose of reserves
The share-based payments reserve is used to recognise the fair value of options and performance rights issued
and vested.
Exchange differences arising on translation of the foreign operations are taken to the foreign currency
translation reserve, as described in Note 27 and accumulated within a separate reserve within equity. The reserve
is recognised in profit or loss when the net investment is disposed of.
The Group had put options over some of its non-controlling interests. The amount that may become payable under
the option on exercise is initially recognised at the present value of the redemption amount within other financial
liabilities with a corresponding charge directly to equity in the NCI acquisition reserve. The liability is subsequently
accreted through finance charges up to the redemption amount that is payable at the date at which the option first
becomes exercisable.
The Group also had a cash flow hedge reserve and net investment hedge reserve. Refer to Note 9 and 10 for
more details.
96
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T
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Q
U
I
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Y
(a) Reserves
Balance at
1 July 2021
Items that may be
classified to profit or loss
Exchange differences on
translation of foreign
operations
Remeasurement of
post-employment benefit
obligations
Movement in cash flow
hedge (net of tax)
Items that will not be
reclassified to profit
or loss
Changes in financial
assets at fair value (net of
tax) through other
comprehensive income
Total comprehensive
income for the year
Transfer of gain on
disposal of equity
investment at fair value
through other
comprehensive income
to retained earnings
Transactions with
owners in their
capacity as owners:
Increase in share-based
payment reserve
inclusive of tax
Transaction with non-
controlling interests
Balance at
30 June 2022
Share-
based
payment
$’000
Foreign
currency
trans-
lation
$’000
Post-
employ-
ment
benefits
$’000
Financial
Asset
FVOCI
$’000
NCI
acquisi-
tion
$’000
Cash
flow
hedge
$’000
Other
Reserves
$’000
Total
Reserves
$’000
33,467
(25,045)
(125)
3,786
(40,686)
12,184
(5,021)
(21,440)
30,105
-
-
-
-
(919)
-
-
-
-
-
-
-
-
-
12,372
-
30,105
(919)
12,372
-
5,690
-
-
-
-
-
(13,426)
-
-
-
-
-
-
-
-
-
-
-
(243)
-
-
(14,004)
-
-
-
30,105
(919)
(14,004)
-
(14,004)
-
-
12,372
27,554
-
-
-
-
(13,426)
-
-
5,690
(243)
39,157
5,060
(1,044)
2,732
(40,929)
(1,820)
(5,021)
(1,865)
97
carsales Annual Report 2022OTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
12. Reserves continued
Share-
based
payment
$’000
Foreign
currency
trans-
lation
$’000
Post-
employ-
ment
benefits
$’000
Financial
Asset
FVOCI
$’000
NCI
acquisi-
tion
$’000
Cash
flow
hedge
$’000
Net
invest-
ment
hedge
$’000
Other
Reserves
$’000
Total
Reserves
$’000
29,834
(29,493)
(376)
1,647
(38,587)
(13,409)
(848)
(5,021)
(56,253)
-
-
-
-
-
-
(12,279)
-
-
-
16,727
251
-
-
-
-
-
-
-
-
2,139
4,448
251
2,139
3,633
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,099)
-
-
25,593
-
-
-
-
848
-
-
25,593
848
-
-
-
-
-
-
-
-
-
-
-
-
-
(12,279)
251
25,593
17,575
2,139
33,279
3,633
(2,099)
(5,021)
(21,440)
33,467
(25,045)
(125)
3,786
(40,686)
12,184
Balance at
1 July 2020
Items that may be
classified to profit or loss
Exchange differences
on translation of
foreign operations
Remeasurement of
post-employment
benefit obligations
Movement in cash flow
hedge (net of tax)
Movement in net
investment hedge
(net of tax)
Items that will not
be reclassified to
profit or loss
Changes in financial
assets at fair value (net
of tax) through other
comprehensive income
Total comprehensive
income for the year
Transactions with
owners in their
capacity as owners:
Increase in share-
based payment
reserve inclusive of tax
Transaction with
non-controlling
interests
Balance at
30 June 2021
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13. Dividends
Accounting Policy
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the entity, on or before the end of the financial year but not distributed at balance date.
The dividends were proposed / payable as follows:
Interim dividend paid for the half year ended 31 December – fully franked at the tax rate
of 30%
Final dividend proposed / paid for the year ended 30 June – fully franked at the tax rate
of 30%
Dividends paid in cash or satisfied by the issue of shares under the dividend
reinvestment plan
Paid in cash
Satisfied by issue of shares
Proposed but not yet paid or issued
Interim dividend paid for the half year 31 December
Final dividend declared / paid for the year ended 30 June
The group has $15.7 million of franking credits as at 30 June 2022 (2021: $20.4 million).
FY 2022
$’000
FY 2021
$’000
72,068
61,597
85,958
158,026
63,527
125,124
67,764
4,304
85,958
158,026
56,713
4,884
63,527
125,124
Cents per
share
25.5
24.5
Cents per
share
25.0
22.5
Dividend Reinvestment Plan (DRP)
The carsales.com Ltd DRP will be maintained for the 2022 final dividend, offering shareholders the opportunity to acquire
further ordinary shares in carsales. The DRP will not be offered at a discount and the price will be calculated using the daily
volume weighted average sale price of carsales.com Ltd shares sold in the ordinary course of trading on the ASX during
the five days after, but not including, the Record Date 19 September 2022. The last date for shareholders to nominate
their participation in the DRP is 5:00pm (AEST) on 20 September 2022. Shares issued under the DRP will rank equally with
carsales.com Ltd existing fully paid ordinary shares. Shareholders eligible to participate in the DRP are currently limited
to those whose registered address on the carsales.com Ltd share registry is in Australia or New Zealand.
Eligible shareholders who wish to participate in the DRP can make their elections online at www.computershare.com.au/
easyupdate/CAR or complete the DRP form, which will be sent to shareholders for completion and submission to
Computershare Investor Services Pty Ltd (carsales share registry). Further information can be obtained from
Computershare on 1300 850 505.
99
carsales Annual Report 2022OTHER ASSETS AND LIABILITIESGROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
OTHER ASSETS AND LIABILITIES
This section provides information on other balance sheet assets and liabilities that do not materially affect performance or
give rise to material financial risk.
14. Trade and other receivables
Accounting Policy
(a) Classification of trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course
of business. They are generally due for settlement within 30 to 45 days following the provision of advertising, data
services and sale of goods and therefore are all classified as current.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less the loss
allowance. Details about the Group’s impairment policies and the calculation of the loss allowance are provided
in Note 10.
(b) Accrued income
Services provided in the current reporting period are recognised on an accrual basis. Settlement is generally within
30 days.
(c) Other receivables
These amounts generally arise from transactions outside the usual operating activities of the Group. Interest is not
charged and collateral is not normally obtained.
The other classes within trade and other receivables do not contain impaired assets and are not past due. Based on
the credit history of these other classes, it is expected that these amounts will be received when due.
Other non-current receivables include deposits paid in relation to long-term property leases by ENCARSALES.COM Ltd.
(d) Fair value and credit risk
Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fair value.
Information about the impairment of trade receivables and the Group’s exposure to credit risk, foreign currency risk
and interest rate risk can be found in Note 10.
Current assets
Trade receivables
Loss allowance (see Note 10)
Trade receivables
Accrued income
Other receivables
Term deposits*
Prepayments
Trade and other receivables
Non-current assets – other receivables
*Term deposits are short term in nature with the average period being 6 months.
100
2022
$’000
45,525
(1,245)
44,280
955
5,585
14,593
9,328
74,741
13,968
2021
$’000
41,891
(2,633)
39,258
624
2,850
-
4,023
46,755
10,317
carsales Annual Report 2022 15. Property, plant and equipment
Accounting Policy
Property, plant and equipment is stated at historical cost less accumulated depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. All other repairs and maintenance expenses are charged to the profit or loss
during the financial period in which they are incurred.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included
in the consolidated statement of comprehensive income.
Depreciation on assets is calculated using the straight-line method to allocate their cost, net of their residual
values, over their estimated useful lives, as follows:
• Motor vehicles
3 – 5 years
• Plant and equipment
3 – 10 years
• Leasehold improvements 3 – 10 years or minimum lease period if shorter
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101
carsales Annual Report 2022GROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
15. Property, plant and equipment continued
Plant and
equipment
$’000
Motor
vehicles
$’000
Leasehold
improvements
$’000
3,401
2,083
(29)
(2,012)
(34)
3,409
528
896
(188)
(480)
(11)
745
8,886
5,195
(145)
(3,252)
(184)
10,500
Total
$’000
12,815
8,174
(362)
(5,744)
(229)
14,654
15,434
(12,025)
3,409
2,081
(1,336)
745
27,878
(17,378)
10,500
45,393
(30,739)
14,654
3,068
2,103
(5)
(1,713)
(52)
3,401
819
211
(134)
(361)
(7)
528
9,914
2,330
-
(3,224)
(134)
8,886
13,801
4,644
(139)
(5,298)
(193)
12,815
14,022
(10,621)
3,401
1,663
(1,135)
528
23,475
(14,589)
8,886
39,160
(26,345)
12,815
Year ended 30 June 2022
Opening net book amount
Additions
Disposals
Depreciation charge
Exchange differences
Closing net book amount
At 30 June 2022
Cost
Accumulated depreciation
Net book amount
Year ended 30 June 2021
Opening net book amount
Additions
Disposals
Depreciation charge
Exchange differences
Closing net book amount
At 30 June 2021
Cost
Accumulated depreciation
Net book amount
102
carsales Annual Report 2022
16. Leases
The Group leases properties (commercial office premises and retail properties), motor vehicles and equipment.
The Group’s leases are typically for fixed periods between two to fifteen years and may include extension options.
Lease terms are negotiated on an individual lease basis and may contain a wide range of different terms and
conditions. None of the Group’s lease agreements impose any covenants, however leased assets may not be used
as security for borrowing purposes.
Payments made under operating leases, less any incentives received from the lessor, were previously charged
to profit or loss on a straight-line basis over the period of the lease pursuant to the requirements of AASB 117.
In applying AASB 16, a right-of-use asset representing the right to use the underlying asset and a corresponding
lease liability representing the obligation to make lease payments are recognised at the date at which the leased
asset is available for use by the Group.
Right-of-use assets are measured at cost comprising the following:
• the initial measurement of the lease liability;
• any lease payments made in advance of the lease commencement date less any incentives received;
• any initial direct costs; and
• an estimate of any costs to dismantle and remove the asset at the end of the lease.
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the
earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses
the right-of-use assets for impairment when such indicators exist.
At the lease commencement date, the Group measures the lease liability at the present value of the lease payments
unpaid at that date, discounted using the interest rate implicit in the lease where that rate is readily available or
using the Group’s incremental borrowing rate at the time the lease was entered into.
Lease payments included in the measurement of the lease liability consist:
• fixed payments less any incentives receivable;
• variable payments based on an index or rate;
• amounts expected to be payable under a residual value guarantee; and
• payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability is reduced for payments made and increased for interest incurred.
The liability is remeasured to reflect any reassessment or modification, or if there are changes to in-substance fixed
payments. When the lease liability is remeasured, a corresponding adjustment is made to the value of the right-of-
use asset.
Deferred tax accounting
Lease payments are generally deductible whilst interest and depreciation expenses on these leases remain non-
deductible. As a result, a net deferred tax asset has been recognised in relation to the temporary differences arising
from the right-of-use assets and lease liabilities.
Depreciation on assets is calculated using the straight-line method to allocate their cost, net of their residual values,
over their estimated useful lives, as follows:
• Properties
Expected lease period
• Motor vehicles
Contractual lease period
• Leased plant and equipment
Contractual lease period
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103
carsales Annual Report 2022GROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
16. Leases continued
Key Assumption/Accounting Estimates
Extension and termination options are included in a number of the Group’s property leases. The extension and
termination options are exercisable only by the Group and not by the respective lessor. In determining the lease
term, which forms part of the initial measurement of the right-of-use asset and lease liability, management
considers all facts and circumstances that create an economic incentive to exercise an extension option, or not
exercise a termination option. Extension options (or periods after termination options) are only included in the lease
term if the lease is reasonably certain to be extended (or not terminated).
The following factors are normally the most relevant when assessing the extension options on the property lease:
• If there are significant penalties to terminate (or not extend), the Group is typically reasonably certain to extend
(or not terminate).
• If any leasehold improvements are expected to have a significant remaining value, the Group is typically
reasonably certain to extend (or not terminate).
• Otherwise, the Group considers other factors including historical lease duration and the costs and business
disruption required to replace the leased properties.
Most extension options in properties have been included in the lease liability because the Group could not replace
the assets without significant cost or business disruption.
The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to
exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or change in
circumstances occurs, which affects this assessment and that is within the control of the lessee Group.
Right-of-
use
Properties
$’000
Right-of-
use Motor
vehicles /
Equipment
$’000
55,080
8,017
2,190
(8,838)
(358)
56,091
534
287
12
(451)
2
384
Total
$’000
55,614
8,304
2,202
(9,289)
(356)
56,475
96,541
(40,450)
56,091
2,985
(2,601)
384
99,526
(43,051)
56,475
Right-of-use assets:
Year ended 30 June 2022
Opening net book amount
Additions
Remeasurement of lease modification
Depreciation charge
Exchange differences
Closing net book amount
At 30 June 2022
Cost
Accumulated depreciation
Net book amount
104
carsales Annual Report 2022
Year ended 30 June 2021
Opening net book amount
Additions
Terminations
Remeasurement of lease modification
Depreciation charge
Exchange differences
Closing net book amount
At 30 June 2021
Cost
Accumulated depreciation
Net book amount
Lease Liabilities:
Year ended 30 June
Opening lease liabilities
Additions
Terminations
Remeasurement of lease modification
Lease payments
Interest charge
Exchange differences
Closing lease liabilities
At 30 June
Current lease liabilities
Non-current lease liabilities
Total lease liabilities
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S
O
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A
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D
N
O
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S
T
O
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H
E
C
O
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S
O
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I
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A
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D
K
E
Y
I
F
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A
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A
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M
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P
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F
O
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A
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M
A
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U
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Y
O
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H
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S
Right-of-use
Properties
$’000
Right-of-use
Motor
vehicles/
Equipment
$’000
52,063
4,025
(236)
6,487
(7,007)
(252)
55,080
898
238
-
-
(602)
-
534
Total
$’000
52,961
4,263
(236)
6,487
(7,609)
(252)
55,614
89,689
(34,609)
55,080
2,934
(2,400)
534
92,623
(37,009)
55,614
2022
$’000
63,352
7,617
-
1,652
(9,399)
1,563
(354)
64,431
8,061
56,370
64,431
2021
$’000
60,971
4,263
(270)
6,487
(9,819)
1,577
143
63,352
6,636
56,716
63,352
105
carsales Annual Report 2022GROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
17. Intangible assets
Accounting Policy
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net
identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries
is included in intangible assets. Goodwill is not amortised. Instead, goodwill is tested for impairment annually,
or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost
less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount
of goodwill relating to the entity sold. Goodwill is allocated to cash generating units for the purpose of impairment
testing.
Computer software
Software includes capitalised development costs being an internally generated intangible asset.
Capitalised development costs are recorded as an intangible asset and amortised from the point of which the asset
is ready for use on a straight-line basis over four years. Internally capitalised labour costs are treated as an investing
cash outflow in the consolidated statement of cash flows.
Research expenditure is recognised as an expense as incurred. Costs incurred on development projects (relating to
the design and testing of new or improved services) are recognised as intangible assets when it is probable that the
project will, after considering its commercial and technical feasibility, be completed and generate future economic
benefits and its costs can be measured reliably. The expenditure capitalised comprises all directly attributable costs,
including costs of materials, services, direct labour and an appropriate proportion of overheads. Other development
expenditures that do not meet these criteria are recognised as an expense as incurred.
Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Brands and customer relationships
Acquired brands represent the value of brands in acquired subsidiaries and businesses that are separately fair
valued at the date of acquisition from the remaining goodwill. Acquired brands are amortised over a 10-year period.
Acquired customer relationships have a finite useful life and are carried at fair value at acquisition date less
accumulated amortisation and impairment losses. Amortisation is calculated using the straight-line method to
allocate the cost of the asset over its estimated useful life, which is between 7–12 years.
The following intangible assets have finite lives and are subject to amortisation on a straight-line basis. The useful
lives for these assets are as follows:
• Computer software
• Brands
• Customer relationships
4 years
10 years
7–12 years
• Other (domain names and database)
5–10 years
106
carsales Annual Report 2022
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Q
U
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O
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H
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A
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B
I
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I
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I
E
S
Year ended 30 June 2022
Opening net book amount
Additions
Transfer/measurement period adjustments
Disposals
Amortisation charge
Exchange differences
Closing net book amount
At 30 June 2022
Cost
Accumulated amortisation and impairment
Net book amount
Year ended 30 June 2021
Opening net book amount
Additions
Disposals
Goodwill impairment
Amortisation charge
Exchange differences
Closing net book amount
Computer
software
$’000
Brands and
customer
relationships
$’000
Other
intangible
assets
$’000
49,410
41,490
(498)
(4)
(23,272)
(376)
66,750
66,110
1,184
(3,909)
-
(8,318)
(2,646)
52,421
1,577
6
(1,122)
-
(119)
(127)
215
Goodwill
$’000
480,008
19,240
3,868
-
-
(19,182)
483,934
Total
$’000
597,105
61,920
(1,661)
(4)
(31,709)
(22,331)
603,320
484,454
(520)
483,934
159,917
(93,167)
66,750
88,182
(35,761)
52,421
4,902
(4,687)
215
737,455
(134,135)
603,320
Computer
software
$’000
Brands and
customer
relationships
$’000
Other
intangible
assets
$’000
Goodwill
$’000
477,633
11,294
-
(520)
-
(8,399)
480,008
39,439
29,504
(444)
-
(18,782)
(307)
49,410
65,684
9,934
-
-
(7,858)
(1,650)
66,110
389
1,122
-
-
(259)
325
1,577
Total
$’000
583,145
51,854
(444)
(520)
(26,899)
(10,031)
597,105
At 30 June 2021
Cost
Accumulated amortisation and impairment
Net book amount
480,528
(520)
480,008
117,084
(67,674)
49,410
95,088
(28,978)
66,110
6,043
(4,466)
1,577
698,743
(101,638)
597,105
107
carsales Annual Report 2022GROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
17. Intangible assets continued
(a) Impairment testing
Key Assumption/Accounting Estimates
Goodwill and intangible assets that have an indefinite useful life are allocated to a cash-generating unit (‘CGU’) or
a group of CGUs and are tested annually for impairment. Other assets are tested for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable, which includes carsales’
interests in associates. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount.
Both value in use and fair value less cost to sell valuation methods have been employed in determining the
recoverable amounts of CGUs. Both methods are predicated on cash flow projections which necessitates the
adoption of assumptions and estimates.
The key assumptions and estimates used in management’s calculations primarily relate to:
• Five or 10-year cash flow forecasts sourced from internal budgets and long-term forecasts;
• terminal value growth rates applied to the period beyond the five to 10-year cash flow forecasts; and
• post-tax discount rates, used to discount the cash flows to present value.
The cash flow projections have been:
• derived from management forecasts based on next year’s budgeted result, with the remaining years based on
management forecasts; and
• compiled using a combination of past experience, current performance and market position as well as structural
changes and economic factors which have been derived based on external data and internal analysis.
Each of these assumptions and estimates are based on a ‘best estimate’ at the time of performing the valuation.
However, increases in discount rates or changes in other key assumptions, such as operating conditions or financial
performance, may cause the recoverable amount of CGUs to fall below their carrying amounts, resulting in an
impairment loss being recognised.
Cash generating units
Goodwill is allocated to the Group’s cash generating units (CGUs) which are then tested annually to determine whether
they have suffered any impairment. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or
groups of assets (cash generating units).
108
carsales Annual Report 2022 F
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A segment and CGU-level summary of the goodwill allocation is presented below.
Australia – Online Advertising Services Segment
Australia – Data, Research and Services Segment
tyres CGU (Australia – carsales Investments)
Mexico
Chile
Americas Segment
South Korea
RedBook International
Asia Segment
2022
$’000
86,421
15,941
20,058
4,112
13,914
18,026
343,089
400
343,489
483,935
2021
$’000
82,552
15,941
818
3,817
16,092
19,909
360,388
400
360,788
480,008
Key assumptions
As well as management cash flow projections, other key assumptions for each significant CGU are detailed as follows:
CGU
Australia – Online Advertising Services
Australia – Data, Research and Services
tyres CGU (Australia – carsales Investments)
Chile
South Korea
Valuation
method
Value in use
Value in use
Fair value less
costs to sell
Value in use
Fair value less
costs to sell
Years of
cash flow
projection
5
5
10
5
10
Terminal
growth rate
Post-tax
discount rate
2022
2.3%
2.3%
2.3%
2.7%
2.0%
2021
2.0%
2.0%
n/a
3.1%
2.5%
2022
8.8%
8.8%
10.7%
11.3%
10.7%
2021
8.4%
8.4%
n/a
9.2%
9.5%
Impact of reasonable possible changes in key assumptions
The Tyreconnect (Australia – carsales Investments CGU) business was acquired on 1 July 2021 and carsales has only owned
this business for 12 months at balance date. As such the Tyres CGU has minimal headroom at 30 June 2022, however no
impairment is required and a reasonably possible change in key assumptions would result in an
insignificant impairment.
The Directors and management have considered and assessed reasonably possible changes for the key assumptions
and have not identified any instances that could cause the carrying amount of the other CGUs to exceed their
recoverable amount.
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carsales Annual Report 2022GROUPSTRUCTUREITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
18. Payables and provisions
Accounting Policy
Payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year
that are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within
12 months after the end of the period in which the employees render the related service. They are recognised in
respect of employees’ service up to the end of the reporting period and are measured at the amount expected to
be paid when the liabilities are settled. The liability for annual leave is recognised in the provision for employee
benefits. All other short-term employee benefit obligations are presented as payables.
Other long-term employee benefit obligations
The liability for long service leave and annual leave that is not expected to be settled within 12 months after the
end of the period in which the employees render the related services is recognised in the provision for employee
benefits and measured as the present value of expected future payments to be made in respect of services
provided by employees up to the end of the reporting period using the projected unit credit method. Consideration
is given to expected future wage and salary levels, experience of employee departures and period of service.
Expected future payments are discounted using market yields at the end of the reporting period on high-quality
corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future
cash outflows.
Bonus plans
The Group recognises a liability and an expense for bonuses based on a formula that takes into consideration the
profit attributable to the Company’s shareholders after certain adjustments as well as other metrics set out in the
Remuneration Report. The Company recognises a provision where contractually obliged or where there is a past
practice that has created a constructive obligation.
Trade and other payables
Trade payables
Accrued expenses
Other payables
Total trade and other payables
Provisions
Employee benefits – current
Employee benefits – non-current
Other provisions – current
Other provisions – non-current
Total provisions
2022
$’000
10,986
34,010
3,762
48,758
9,879
1,269
1,117
3,388
15,653
2021
$’000
8,397
26,224
4,053
38,674
9,870
1,161
92
2,517
13,640
Contingent liabilities
The Group and the parent entity from time to time may incur obligations arising from litigation or other contracts entered
into in the normal course of business. Neither the Group nor the parent entity have any material contingent liabilities
where the probability of outflow in any settlement is greater than remote as at 30 June 2022 or 30 June 2021 other than
the associates’ contingent liabilities as set out in Note 19(c).
Other commitments
The Group has other contractual commitments of $3.1 million at 30 June 2022 (2021: $4.1 million).
110
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GROUP STRUCTURE
This section explains aspects of the group structure, such as our portfolio of associate accounted investments and
acquisitions and how these have affected the financial position and performance of the Group.
19. Interests in other entities
(a) Material subsidiaries
(i) Subsidiaries
Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies,
generally accompanying a shareholding of more than half of the voting rights. The existence and effect of potential
voting rights that are currently exercisable or convertible are considered when assessing whether the Group
controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. The purchase
method of accounting is used to account for the acquisition of subsidiaries by the Company. Subsidiaries disposed
of are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with
the policies adopted by the Company.
Non-controlling interests in the results and equity of subsidiaries are presented separately in the consolidated
statement of comprehensive income, consolidated statement of changes in equity and consolidated statement
of financial position respectively.
(ii) Employee Share Trust
The Group has formed a trust to administer the Group’s employee share scheme. This trust is consolidated,
as the substance of the relationship is that the trust is controlled by the Group.
The Group’s principal subsidiaries at 30 June 2022 are set out on the next page. Unless otherwise stated, they have share
capital consisting solely of ordinary shares that are held directly by the Group and the proportion of ownership interests
held equals the voting rights held by the Group. The country of incorporation or registration is also their principal place
of business.
111
carsales Annual Report 2022ITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
19. Interests in other entities continued
Ownership
interest held
by the Group*
Ownership
interest held
by non-
controlling
intersts
Place of
business/
country of
incorporation
Australia
Australia
Australia
Australia
New Zealand
China
Name of entity
Webpointclassifieds Pty Ltd
Equipment Research Group Pty Ltd
Discount Vehicles Australia Pty Ltd
Automotive Data Services Pty Ltd
Auto Information Limited
RedBook Automotive Services (M) Sdn Bhd Malaysia
RedBook Automotive Data Services
(Beijing) Limited
Automotive Data Services (Thailand)
Company Limited
tyresales Pty Ltd
Auto Exchange Holdings Pty Ltd
Automotive Exchange Pty Ltd
carsales.com Investments Pty Ltd
carsales Holdings Pty Ltd
carsales.com Ltd Employee
Share Trust
carsales North America Holdings Pty Ltd
(formerly “carsales Finance Pty Ltd”)
RedBook Inspect Pty Ltd
carsales Latam Pty Ltd
carsales Mexico SAPI de CV
carsales Chile SpA
Chileautos SpA
carsales Foundation Pty Ltd
carsales Argentina Pty Ltd
Demotores Holdings LLC
Thailand
Australia
Australia
Australia
Australia
Australia
Australia
Demotores Chile SpA
Demotores S.A.
ENCARSALES.COM, Ltd
AS1 Holdings Pty Ltd
Appraisal Solutions Pty Ltd
CS Motion Technologies Pty Ltd
CS Motion Development Pty Ltd
Tyreconnect Pty Ltd
Transport Ventures Pty Ltd
carsales Tyre Holding Pty Ltd
carsales Holding US, LLC (USA)
Australia
Australia
Australia
Mexico
Chile
Chile
Australia
Australia
United States
of America
Chile
Argentina
South Korea
Australia
Australia
Australia
Australia
Australia
Australia
Australia
United States
of America
2022
%
100.0
100.0
100.0
100.0
100.0
100.0
2021
%
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
80.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
97.3
100.0
100.0
100.0
100.0
100.0
80.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
97.3
100.0
-
-
-
100.0
-
2022
%
-
-
-
-
-
-
2021
%
-
-
-
-
-
-
Principal
activities
(1)
(2)
(1)
(2)
(2)
(2)
Operating
Segment
(i)
(ii)
(i)
(ii)
(v)
(v)
-
-
-
-
-
-
-
-
-
20.0
-
-
-
-
-
-
-
-
-
-
-
-
2.7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20.0
-
-
-
-
-
-
-
-
-
-
-
-
2.7
-
-
-
-
-
(2)
(2)
(3)
(4)
(1)
(4)
(4)
(5)
(4)
(6)
(4)
(1)
(4)
(1)
(7)
(4)
(4)
(1)
(1)
(1)
(4)
(2)
(1)
(1)
(3)
(4)
(4)
(4)
(v)
(v)
(iii)
(i)
(i)
(iv)
(v)
n/a
(iv)
(iii)
(iv)
(iv)
(iv)
(iv)
n/a
(iv)
(iv)
(iv)
(iv)
(v)
(i)
(ii)
(iii)
(iii)
(iii)
(iii)
(iii)
(iv)
* The proportion of ownership interest is equal to the proportion of voting power held.
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Principal activities
(1) Classified advertising
(2) Data and research
(3) Online retail
(4) Holding company
(5) Share trust company
(6) Vehicle inspection services
(7) Trustee company
Operating segment
(i) Australia – Online Advertising Services
(ii) Australia – Data, Research and Services
(iii) Australia – carsales Investments
(iv) Americas
(v) Asia
(b) Non-controlling interests (NCI) for continuing operations
Set out below is summarised financial information for each subsidiary that has non-controlling interests which are
material to the Group. The amounts disclosed for each subsidiary are before intercompany eliminations.
For the year ended 30 June 2022
Summarised balance sheet
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Accumulated NCI
Summarised statement of comprehensive income
Profit for the year
Other comprehensive income
Total comprehensive income
Profit for the year allocated to NCI
Dividends paid to NCI
Summarised cash flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
2022
$’000
44,183
5,589
(9,346)
(1,697)
38,729
1,849
1,050
-
1,050
638
(549)
7,865
(2,529)
(2,607)
2,729
2021
$’000
43,388
3,211
(6,206)
(424)
39,969
1,765
1,020
-
1,020
508
(210)
4,790
(1,322)
(3,449)
19
113
carsales Annual Report 2022ITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
19. Interests in other entities continued
(c) Interests in Associates
Accounting Policy
Associates are all entities over which the Group has significant influence but no control or joint control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are
accounted for using the equity method of accounting, after initially being recognised at cost. The Group’s investment
in associates includes goodwill identified on acquisition. Acquisition-related costs of acquiring an interest in an
associate are capitalised.
The Group’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share
of post-acquisition other comprehensive income is recognised in other comprehensive income. The cumulative
post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable
from associates are recognised as reduction in the carrying amount of the investment.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other
unsecured long-term receivables, the Group does not recognise further losses unless it has incurred obligations or
made payments on behalf of the associate.
At each reporting date, the Group determines whether there is objective evidence that the investment in the
associate or joint venture is impaired. If there is such evidence, the Group recognises the loss as share of profit
of an associate or joint venture in the Consolidated Statement of Comprehensive Income.
On 1 September 2021, the Group acquired 49% of Trader Interactive LLC and promissory notes for $813.8 million
(excluding transaction costs and hedging impacts). Trader Interactive is a leading platform of branded marketplace in the
United States, providing digital marketing solutions and services across the recreational vehicle, powersports, commercial
truck and equipment industries. The acquisition was funded through a combination of a $600.0 million fully underwritten
pro-rated accelerated renounceable entitlement offer and an upsize of the Group’s existing debt facilities.
On 27 June 2022, the Group exercised its call option to acquire the remaining 51% interest in Trader Interactive for
USD$809.0 million. The acquisition is to be funded via a fully underwritten 1 for 4.16 pro-rata accelerated non-renounceable
entitlement offer and upsizing of carsales debt facility from A$900.0 million to A$1,400.0 million. Refer Note 24 for further
details on equity raising.
The acquisition remains subject to conditions, which are expected to be completed in late Q1 or early Q2 FY23.
Name of entity
Webmotors S.A.
Skedgo Pty Ltd
Trader Interactive LLC
Place of business / country
of incorporation
Brazil
Australia
United States of America
2022
%
30.0
20.6
49.0
2021
%
30.0
20.0
-
Nature of
relationship
Associate
Associate
Associate
Measurement
method
Equity method
Equity method
Equity method
% of ownership interest
114
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Name of entity
Webmotors S.A.
Skedgo Pty Ltd
Trader Interactive LLC
Total equity accounted
investments
Quoted fair value
2022
$’000
-
-
-
2021
$’000
-
-
-
Carrying amount
2022
$’000
58,191
2,358
857,099
2021
$’000
53,581
2,372
-
Share of profit/(loss)
2021
$’000
4,057
(111)
-
2022
$’000
5,090
(14)
12,100
-
-
917,648
55,953
17,176
3,946
(i) Movement in the carrying amount of significant equity accounted investments.
For the year ended 30 June 2022
Carrying amount at 1 July 2021
Acquisition of investment using equity method (cash)
Acquisition of promissory notes receivable (cash)*
Transaction costs capitalised
Gain on acquisition hedge (net of tax)
Share of profit for the year
Amortisation expense relating to fair value adjustments
(net of tax)
Foreign exchange impact –
other comprehensive income
Dividends receivable
Carrying amount at 30 June 2022
Trader Interactive LLC
49% ownership $’000
-
794,708
19,084
15,849
(36,101)
28,092
Webmotors S.A. 30%
ownership $’000
53,581
-
-
-
-
5,478
(15,992)
51,459
-
857,099
(388)
1,776
(2,256)
58,191
* The Group acquired 49% of interest bearing promissory notes in the entity to the value of $19.0 million at the acquisition date, which will be
extinguished upon completion of the acquisition of the 51% remaining interest in Trader Interactive.
For the year ended 30 June 2021
Carrying amount at 1 July 2020
Share of profit for the year
Amortisation expense relating to fair value adjustments (net of tax)
Foreign exchange impact –
other comprehensive income
Dividends received
Adjustment to dividends
Carrying amount at 30 June 2021
Webmotors S.A. 30%
ownership $’000
48,842
4,439
(382)
(478)
(2,217)
3,377
53,581
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carsales Annual Report 2022ITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
19. Interests in other entities continued
(ii) Summarised financial information for significant associates
The tables below provide summarised financial information for the associate that is material to the Group. The information
disclosed reflects the amounts presented in the financial statements of the relevant associate and not the Company’s
share of those amounts.
For the year ended 30 June 2022
Total current assets
Total non-current assets
Total current liabilities
Total non-current liabilities
Net assets
Group's share in %
Group's share in $
Goodwill and capitalised transaction costs
Acquired intangibles (net of tax)
Share-based payments recognised directly in equity
Promissory notes receivable acquired
Foreign exchange impacts
Carrying amount
Revenue
Profit from continuing operations
Other comprehensive income
Total comprehensive income
carsales’ share
Profit from continuing operations
Foreign exchange impacts – other comprehensive income
Total comprehensive income
Trader Interactive LLC
49% ownership $’000
52,604
17,192
(18,018)
(606,717)
(554,939)
49.0%
(271,920)
902,424
207,900
(3,300)
20,267
1,728
857,099
Webmotors S.A. 30%
ownership $’000
62,150
63,123
(45,064)
(198)
80,011
30.0%
24,003
31,001
3,187
-
-
-
58,191
158,639
24,695
-
24,695
12,100
51,459
63,559
92,726
16,966
-
16,966
5,090
1,776
6,866
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Total current assets
Total non-current assets
Total current liabilities
Total non-current liabilities
Net assets
Group’s share in %
Group’s share in $
Goodwill and capitalised transaction costs
Acquired intangibles (net of tax)
Carrying amount
Revenue
Profit from continuing operations
Other comprehensive income
Total comprehensive income
carsales’ share
Profit from continuing operations
Foreign exchange impacts – other comprehensive income
Total comprehensive income
Dividends receivable/received from associates and joint venture entities
(iii) Contingent liabilities in respect of associates
Contingent liabilities – associates
Contingent liabilities relating to liabilities of Webmotors S.A. for which the Company is
severally liable
Contingent liabilities relating to liabilities of Trader Interactive LLC for which the Company
is severally liable
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ownership $’000
47,026
39,387
(18,501)
(235)
67,677
30.0%
20,303
29,829
3,449
53,581
62,796
13,526
-
13,526
4,057
(478)
3,579
2,217
2022
$’000
2021
$’000
186
-
209
n/a
117
carsales Annual Report 2022ITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
19. Interests in other entities continued
(d) Financial assets at fair value through other comprehensive income
Accounting Policy
Investments are designated as financial assets at fair value through other comprehensive income if they do not
have fixed maturities and fixed or determinable payments, and management intends to hold them for the medium
to long-term. The Group has irrevocably elected to account for investments which are not held for trading at fair
value through other comprehensive income. These are strategic investments and the Group considers this
classification to be more relevant. Financial assets that are carried at fair value are measured by the fair value
measurement hierarchy referred to in Note 9.
On disposal of these equity investments, any related balance with the FVOCI reserve is reclassified to retained
earnings.
Key Assumption/Accounting Estimates
The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions
existing at each balance date. Refer to Note 9 for details of the valuation techniques used to value the investment.
% of ownership
Carrying amount
2022
%
-
9.5
18.4
3.3
n/a
2021
%
11.4
9.5
7.9
3.8
n/a
2022
$’000
-
10,455
4,101
4,409
17,931
2021
$’000
13,601
21,666
2,237
2,002
10,023
36,896
49,529
2022
$’000
49,529
1,313
(26,698)
698
12,054
36,896
2021
$’000
40,718
2,169
-
(409)
7,051
49,529
Name of entity
Quoted financial assets
iCar Asia Limited
Plenti Group Ltd (formerly ‘RateSetter Australia Pty Ltd’)
Unquoted financial assets
PromisePay Pte Ltd
mx51 Group Pty Ltd
Other equity investments
Total financial assets at fair value through other
comprehensive income
At 1 July
Acquisition of financial assets at fair value through other comprehensive income
Sale of financial assets at fair value through other comprehensive income
Exchange differences recognised through other comprehensive income
Gain recognised through other comprehensive income
At 30 June
118
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(i) iCar Asia Limited
On 11 February 2022, the Group sold its interest in iCar. The sale resulted in cash received of $26.7 million and the $13.4
million gain on disposal was recycled from the Financial Asset FVOCI reserve to retained earnings. The Group utilised
capital losses to offset the tax payable on the gain resulting in a nil tax payable.
(ii) PromisePay and mx51 Group
Following the finalisation of a business restructure, the Group has interests in both PromisePay Pte Ltd and mx51
Group Pty Ltd. The Group reviewed the valuation of its interest in both entities. Refer to Note 9 for details of the
valuation approach.
(iii) Other equity investments
This balance relates to investments in unlisted US based venture capital fund assets.
20. Business combination
On 1 July 2021 carsales.com Ltd acquired 100% of Transport Ventures Group, which consists of Tyreconnect Pty Ltd and
its holding company Transport Ventures Pty Ltd. Tyreconnect is a B2B tyre distributor with a specialisation in servicing the
OEM car dealership market. Its supply network includes tyre manufacturers and third-party wholesaler distributors, with
a footprint throughout Australia.
(a) Purchase consideration
Cash paid
(b) Details of net assets and liabilities acquired
Cash and cash equivalents
Trade and other receivables
Plant and equipment
Software
Inventory
Customer relationships
Trade and other payables
Provisions
Borrowings
Current tax receivable
Deferred tax liabilities
Net identifiable assets acquired
Goodwill
Net assets acquired
$’000
19,739
Fair value recognised
on acquisition
$’000
344
3,120
279
1,104
966
1,184
(4,074)
(228)
(1,910)
69
(355)
499
19,240
19,739
The goodwill is attributable to the workforce and synergistic benefits that are expected to be created by this acquisition.
The goodwill is not expected to be deductible for tax purposes.
119
carsales Annual Report 2022ITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
20. Business combination continued
(c) Acquired receivables
The fair value of trade and other receivables include trade receivables which are expected to be collected in full.
(d) Acquisition related costs
Acquisition related costs of $0.2 million have been accounted for as expenses within consultant and contractor expenses
and operations and administration expenses in the period in which they were incurred.
(e) Revenue and profit before tax from continuing operations
From the date of acquisition, Transport Ventures Group contributed $31.0 million of revenue and $0.5 million loss to
the profit before tax from continuing operations of the Group.
There were no material acquisitions in the prior year.
21. Parent entity financial information
Accounting Policy
The financial information for the parent entity, carsales.com Ltd, has been prepared on the same basis as the
consolidated financial statements, except as set out below:
Investments in subsidiaries are accounted for at cost in the financial statements of carsales.com Ltd. Dividends
received from subsidiaries are recognised in the parent entity’s profit or loss, rather than being deducted from the
carrying amount of these investments. Investments in subsidiaries are tested for impairment whenever changes in
events or circumstances indicate that the carrying amount may not be recoverable. Such events may include receipt
of dividends. Refer to Note 17 for details of impairment accounting policies.
In addition to its own current and deferred tax amounts, carsales.com Ltd also recognises the current tax liabilities
(or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from
controlled entities in the tax consolidated group.
The entities have also entered into a tax funding agreement under which the wholly owned entities fully
compensate the company for any current tax payable assumed and are compensated by the company for any
current tax receivable and deferred taxes relating to unused tax losses or unused tax credits that are transferred to
carsales.com Ltd under the tax consolidation legislation.
The funding amounts are determined by reference to the amounts recognised in the wholly owned entities’ financial
statements. Assets or liabilities arising under tax funding agreements with the tax consolidated entities are
recognised as amounts receivable or payable to other entities in the Group. Any difference between the amounts
assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to
(or distribution from) wholly owned tax consolidated entities.
Where the parent entity has provided financial guarantees in relation to loans and payables of subsidiaries for no
compensation, the fair values of these guarantees are accounted for as contributions and recognised as part of the
cost of the investment.
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2022
$’000
2021
$’000
73,890
1,619,823
1,693,713
18,852
771,242
790,094
903,619
769,959
26,289
107,372
903,619
113,067
111,434
286,669
1,026,041
1,312,710
211,068
190,063
401,131
911,579
755,357
39,746
116,476
911,579
109,986
146,206
Financial year entered
into agreement
30 June 2015
30 June 2015
30 June 2015
30 June 2015
30 June 2015
30 June 2015
30 June 2015
30 June 2015
30 June 2015
30 June 2016
30 June 2016
30 June 2017
30 June 2018
30 June 2018
30 June 2021
30 June 2021
30 June 2022
30 June 2022
30 June 2022
30 June 2022
30 June 2022
(a) Summary financial information
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Issued capital
Reserves
Retained earnings
Total equity
Profit for the year
Total comprehensive income
(b) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2022 or 30 June 2021.
22. Deed of cross guarantee
The following controlled entities have entered into a Deed of Cross Guarantee:
Company
carsales.com Ltd
carsales Holdings Pty Ltd
carsales North America Holdings Pty Ltd (formerly carsales Finance Pty Ltd)
Auto Exchange Holdings Pty Ltd
Automotive Data Services Pty Ltd
carsales.com Investments Pty Ltd
Discount Vehicles Australia Pty Ltd
Equipment Research Group Pty Ltd
Webpointclassifieds Pty Ltd
carsales Latam Pty Ltd
carsales Foundation Pty Ltd
carsales Argentina Pty Ltd
Automotive Exchange Pty Ltd
AS1 Holdings Pty Ltd
Tyresales Pty Ltd
Appraisal Solutions Pty Ltd
carsales Tyre Holding Pty Ltd
Transport Ventures Pty Ltd
Tyreconnect Pty Ltd
Programmatic Holdings Pty Ltd
CS Motion Holdings Pty Ltd
The companies that are party to this deed guarantee the debts of the others and represent the ‘Closed Group’ from the
date of entering into the agreement. These wholly-owned entities have been relieved from the requirement to prepare a
Financial Report and Directors’ Report under Class Order 98/1418 (as amended) issued by the Australian Securities and
Investments Commission.
121
carsales Annual Report 2022ITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
22. Deed of cross guarantee continued
(a) Consolidated statement of comprehensive income
Revenue from continuing operations
Revenue from contracts with customers
Revenue from continuing operations
Expenses
Operating expenses
Earnings before interest, taxes, depreciation and amortisation
Depreciation and amortisation expense
Finance income
Finance costs
Fair value in put options
Dividends income
Profit before income tax
Income tax expense
Profit from continuing operations
Total comprehensive income for the year
2022
$’000
2021
$’000
391,568
391,568
324,750
324,750
(173,043)
218,525
(25,331)
996
(18,193)
289
4,371
180,657
(52,906)
127,751
140,426
(144,730)
180,020
(31,538)
995
(19,181)
-
2,471
132,767
(48,344)
84,423
112,157
122
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(b) Consolidated statement of financial position
Set out below is a consolidated statement of financial position as at 30 June 2022 of the Closed Group.
Consolidated statement of financial position
Current assets
Cash and cash equivalents
Trade and other receivables
Derivative assets
Inventory
Total current assets
Non-current assets
Investments accounted for using the equity method and subsidiaries
Financial assets at fair value through other comprehensive income
Property, plant and equipment
Right-of-use assets
Deferred tax assets
Intangible assets
Other receivables
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Current tax liabilities
Provisions
Contract liabilities
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Lease liabilities
Deferred tax liabilities
Derivative liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
2022
$’000
2021
$’000
42,075
56,833
5,526
3,222
107,656
537,689
36,896
4,349
38,076
15,226
158,734
793,072
1,584,042
1,691,698
37,142
3,303
29,560
9,036
4,216
83,257
-
649,533
45,017
6,615
1,153
1,069
703,387
786,644
905,054
769,959
27,021
108,074
905,054
238,862
40,441
33,658
-
312,961
537,689
49,529
5,194
41,810
15,086
123,436
13,905
786,649
1,099,610
26,122
3,366
13,034
8,036
3,707
54,265
37,723
43,195
48,220
15,009
-
1,014
145,161
199,426
900,184
755,357
41,870
102,957
900,184
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carsales Annual Report 2022ITEMS NOTRECOGNISEDOTHERDIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
23. Related party transactions
The Group has identified the parties it considers to be related and the transactions conducted with those parties. Other
than those disclosed below, no other related party transactions have been identified.
(a) Key Management Personnel compensation
Short-term employee benefits
Deferred short-term employee benefits
Post-employment benefits
Long-term employment benefits
Share-based payments
2022
$
7,593,015
715,083
199,803
89,729
78,466
8,676,096
2021
$
6,683,998
502,551
175,003
90,034
1,620,670
9,072,256
(b) Transactions with other related parties
The following transactions occurred with related parties, the nature of which are described in the Remuneration Report.
Sale of goods and services to related parties
Purchase of goods and services from related parties
2022
$
1,282,428
1,731,952
2021
$
1,458,813
775,180
All transactions were made on normal commercial terms and conditions, at market rates and includes transactions with
associates.
(c) Outstanding balances arising from sales/purchases of goods and services
The following balances are outstanding at the end of the reporting period in relation to transactions with related parties:
Current receivables (sale of goods and services)
Other related parties
Current payables (purchase of goods and services)
Other related parties
2022
$
2021
$
83,115
98,070
12,718
73,093
There is no allowance accounted for impaired receivables in relation to any outstanding balances, and no expense has
been recognised in respect of impaired receivables due from related parties.
124
carsales Annual Report 2022 ITEMS NOT RECOGNISED
This section of the notes provides information about material items that are not recognised in the financial statements
as they do not yet satisfy the recognition criteria.
24. Events occurring after the reporting period
On 27 June 2022, the Group announced that it had exercised its call option to acquire the remaining 51% in Trader
Interactive LLC and the launch of an approximately AUD $1,207.0 million fully underwritten pro-rata accelerated
renounceable entitlement offer (with retail rights trading) to fund the acquisition. The acquisition remains subject
to conditions, which are expected to be completed in late Q1 or early Q2 FY23.
The entitlement offer was completed in July 2022, resulting in the issue of 68,001,706 additional ordinary shares
and cash raised of AUD $1,182.0 million (net of transaction costs).
On 8 July 2022, the AUD $651.0 million drawn down amount was repaid to the Tranche A and Tranche B financiers.
No other matters or circumstances have occurred subsequent to period end that have significantly affected, or may
significantly affect, the operations of the Group, the results of those operations or the state of affairs of the Group
or economic entity in subsequent financial years.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
OTHER
This section provides information on items which require disclosure to comply with Australian Accounting Standards and
other regulatory pronouncements, however, are not considered critical in understanding the financial performance or
position of the Group.
25. Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms:
(a) PricewaterhouseCoopers Australia
Audit and other assurance services
Audit and review of Financial Reports
Due diligence services
Other assurance services
Total remuneration for audit and other assurance services
Taxation services
2022
$
2021
$
820,590
250,700
126,498
1,197,788
477,000
697,175
57,320
1,231,495
Tax compliance services, including review of Company income tax returns
Tax consulting and tax advice on mergers and acquisitions
Total remuneration for taxation services
149,004
-
149,004
136,000
-
136,000
Other services
Other services
Total remuneration for other services
Total remuneration of PricewaterhouseCoopers Australia
(b) Network firms of PricewaterhouseCoopers Australia
Audit and other assurance services
Audit and review of Financial Reports
Total remuneration for audit and other assurance services
-
-
1,346,792
-
-
1,367,495
217,014
217,014
144,000
144,000
Taxation services
Tax compliance services, including review of Company income tax returns
Total remuneration for taxation services
Total remuneration of network firms of PricewaterhouseCoopers Australia
-
-
217,014
18,722
18,722
162,722
Total remuneration for PricewaterhouseCoopers
1,563,806
1,530,217
(c) Non-PwC audit firms
Audit and review of Financial Reports
Tax compliance services
Total remuneration for Non-PwC audit firms
Total auditors’ remuneration
296,529
22,382
318,911
13,818
19,897
33,715
1,882,717
1,563,932
It is the Company’s policy to employ PwC on assignments additional to their statutory audit duties where PwC’s expertise
and experience with the Company are important. These assignments are principally tax advice and due diligence reporting
on acquisitions, or where PwC is awarded assignments on a competitive basis. It is the Company’s policy to seek
competitive tenders for all major consulting projects.
126
carsales Annual Report 2022
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26. Share-based payments
Share-based compensation benefits are provided to employees via the carsales.com Ltd Employee Option Plan.
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit
expense were $2,097,675 (2021: $3,001,000).
Employee Option Plan
Set out below are summaries of options and performance rights granted under the plan:
2022
Exercise
price
Grant date
Options
Oct 2016
Oct 2017
Oct 2018
Oct 2019
Total options
Weighted average exercise price
$12.23
$11.41
$14.87
$13.54
Performance rights
Oct 2018
Oct 2019
Aug 2020
Oct 2020
Aug 2021
Feb 2022
Total performance rights
Weighted average exercise price
Total of plan
Weighted average exercise price
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Opening
balance
Granted
during the
year
Exercised
during the
year
Expired or
lapsed
during the
year
88,221
51,491
426,452
285,056
851,220
$13.94
152,563
153,938
14,461
201,820
-
-
522,782
$0.00
1,374,002
$8.64
-
-
-
-
-
-
-
-
-
-
58,697
226,533
285,230
$0.00
285,230
$0.00
(18,260)
(22,588)
(369,739)
-
(410,587)
$14.56
(8,519)
-
(14,461)
-
-
-
(22,980)
$0.00
(433,567)
$13.79
-
(461)
(5,264)
(40,342)
(46,067)
$13.67
(144,044)
(23,854)
-
(40,329)
-
(35,806)
(244,033)
$0.00
(290,100)
$2.17
Closing
balance
69,961
28,442
51,449
244,714
394,566
$13.33
-
130,084
-
161,491
58,697
190,727
540,999
$0.00
935,565
$5.62
Vested
and
exercis-
able at
30 June
69,961
28,442
51,449
-
149,852
$12.98
-
-
-
-
-
-
-
$0.00
149,852
$12.98
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carsales Annual Report 2022DIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
26. Share-based payments continued
2021
Exercise
price
Grant date
Options
Oct 2015
Oct 2016
Oct 2017
Oct 2018
Oct 2019
Total options
Weighted average exercise price
$10.24
$12.23
$11.41
$14.87
$13.54
Performance rights
Oct 2017
Oct 2018
Feb 2019
Aug 2019
Oct 2019
Aug 2020
Dec 2020
Total performance rights
Weighted average exercise price
Total of plan
Weighted average exercise price
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Opening
balance
Granted
during
the year
Exercised
during
the year
Expired or
lapsed
during
the year
Closing
balance
Vested and
exercisable
at 30 June
45,610
218,110
295,990
445,532
139,245
1,144,487
$13.13
186,281
159,387
-
19,784
82,335
-
-
447,787
$0.00
1,592,274
$9.43
-
-
-
-
148,871
148,871
$13.54
-
(235)
-
-
73,412
14,461
201,820
289,458
$0.00
438,329
$4.60
(44,599)
(115,344)
(236,201)
-
-
(396,144)
$11.52
(124,827)
-
-
(19,784)
-
-
-
(144,611)
$0.00
(540,755)
$8.44
(1,011)
(14,545)
(8,298)
(19,080)
(3,060)
(45,994)
$13.22
-
88,221
51,491
426,452
285,056
851,220
$13.94
(61,454)
(6,589)
-
-
(1,809)
-
-
(69,852)
$0.00
-
152,563
-
-
153,938
14,461
201,820
522,782
$0.00
(115,846) 1,374,002
$8.64
$5.25
-
88,221
51,491
-
-
139,712
$11.93
-
-
-
-
-
-
-
-
$0.00
139,712
$11.93
The estimate of the weighted average share price at the date of exercise of options exercised regularly during the year
ended 30 June 2022 is estimated to be approximately $24.92 (2021: approximately $20.80).
The weighted average remaining contractual life of share options and rights outstanding at the end of the period was
9.72 years (2021: 9.11 years).
The establishment of the carsales.com Ltd Employee Option Plan was undertaken under a prospectus lodged with ASIC
in 2000. Staff eligible to participate in the plan are those invited by the Board of Directors.
Options and performance rights are granted under the plan for no consideration with conditions including a vesting period
and expiry date. Senior Executives’ vesting conditions, including EPS targets, are noted in the Remuneration Report on
page 36.
Options and performance rights granted under the plan carry no dividend or voting rights. When exercisable, each option
is convertible into one ordinary share in return for payment of the option’s exercise price. Each performance right is
convertible into one ordinary share for $0.00 exercise price, upon satisfaction of all vesting requirements.
128
carsales Annual Report 2022 Fair value of options and performance rights granted
The fair value of the performance rights was determined using a Black Scholes model for those rights with non-market
based vesting conditions and using the Monte Carlo method for those rights with market-based vesting conditions.
The model inputs for performance rights granted during the year ended 30 June 2022 included:
Grant date
Share price at grant date
Fair value
Term
TSR rank
Expected price volatility of the Company’s shares
Expected dividend yield
Risk-free interest rate
21 Aug 21
Non-Market Based
$21.20
$20.66
1.00
n/a
43%
3%
1%
25 Feb 22
Market Based
(35%)
$20.40
$14.31
2.35
6 out of 32
28%
3%
1%
25 Feb 22
Non-Market Based
(65%)
$20.40
$18.31
2.35
n/a
44%
3%
3%
The expected price volatility is based on historical volatility adjusted for any expected changes to future volatility due to
publicly available information. No performance rights have a cost to exercise.
27. Other significant accounting policies
(a) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements
are presented in Australian dollars, which is carsales.com Ltd’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in the consolidated statement of comprehensive income.
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carsales Annual Report 2022DIRECTORS’DECLARATIONINDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT.
30 June 2022
(iii) Group companies
The results and financial position of foreign operations (none of which has been restated for a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency
as follows:
• assets and liabilities for each consolidated statement of financial position presented are translated at the closing rate
at the date of that balance sheet;
• income and expenses for each consolidated statement of comprehensive income are translated at average exchange
rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated at the dates of the transactions); and
• all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities and of
borrowings are recognised as other comprehensive income. When a foreign operation is sold or any borrowings forming
part of the net investment are repaid, a proportionate share of such exchange differences are recognised in the
consolidated statement of comprehensive income as part of the gain or loss on sale where applicable.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities
of the foreign operation and translated at the closing rate.
(b) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case, it is recognised as part of the cost of acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included with other receivables or payables in the consolidated
statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flow.
(c) New and amended Accounting Standards and Interpretations
(i) New and amended Accounting Standards and Interpretations issued and effective
The Group has not adopted any new or amended Accounting Standards and Interpretations this year that have had
a material impact on the Group or the Company.
(ii) Accounting standards and Interpretations issued but not yet effective
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2022
reporting periods and have not been early adopted by the Group. These standards are not expected to have a material
impact on the entity in the current or future reporting periods and on foreseeable future transactions.
130
carsales Annual Report 2022 DIRECTORS’ DECLARATION
In the Directors’ opinion:
(a) the financial statements and notes set out on pages 62 to 130 are in accordance with the Corporations Act 2001,
including:
(i) Complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements.
(ii) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its performance
for the financial year ended on that date.
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
The basis of preparation confirms that the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Managing Director and CEO, and Chief Financial Officer required
by section 295A of the Corporations Act 2001.
Cameron McIntyre
Managing Director and CEO
Melbourne
14 August 2022
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carsales Annual Report 2022INDEPENDENT AUDITOR’SREPORT TO THE MEMBERSOF CARSALES.COM LTDSHAREHOLDERINFORMATIONCORPORATEDIRECTORY
INDEPENDENT AUDITOR’S REPORT TO
THE MEMBERS OF CARSALES.COM LTD
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of carsales.com Limited (the Company) and its controlled entities (together the Group)
is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial performance for the
year then ended
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
• the consolidated statement of financial position as at 30 June 2022
• the consolidated statement of comprehensive income for the year then ended
• the consolidated statement of changes in equity for the year then ended
• the consolidated statement of cash flows for the year then ended
• the notes to the consolidated financial statements, which include significant accounting policies and other explanatory
information
• the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the financial report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act
2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
132
carsales Annual Report 2022 F
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Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
report as a whole, taking into account the geographic and management structure of the Group, its accounting processes
and controls and the industry in which it operates.
Materiality
• For the purpose of our audit we used overall Group materiality of $11.2 million, which represents approximately 5% of
the Group’s profit before income tax from continuing operations.
• We applied this threshold, together with qualitative considerations, to determine the scope of our audit and the
nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial report
as a whole.
• We chose Group profit before income tax from continuing operations because, in our view, it is the benchmark against
which the performance of the Group is most commonly measured and is a generally accepted benchmark.
• We selected a 5% threshold based on our professional judgement, noting that it is within the range of commonly
acceptable profit related thresholds.
Audit Scope
• Our audit focused on where the Group made subjective judgements; for example, significant accounting estimates
involving assumptions and inherently uncertain future events.
• carsales.com Limited operates across five reporting segments, being Australia - Online Advertising Services, Australia -
Data, Research and Services, Australia - carsales Investments, Americas and Asia, as described in note 1 of the financial
report. Its head office function is based in Melbourne, Australia.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial report for the current period. The key audit matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Further, any commentary on the outcomes of a particular audit procedure is made in that context. We communicated
the key audit matters to the Audit Committee.
133
carsales Annual Report 2022SHAREHOLDERINFORMATIONCORPORATEDIRECTORY
INDEPENDENT AUDITOR’S REPORT TO
THE MEMBERS OF CARSALES.COM LTD CONTINUED
Key audit matter
Carrying value of intangible assets for South Korea
(Refer to note 17 Intangible assets)
The Group’s intangible assets included $483.9 million of goodwill and $52.4m of brands and customer relationships at 30
June 2022. The South Korea cash generating unit (CGU) contains $343.1 million of goodwill and $43.7 million of brands and
customer relationships. Goodwill was required to be tested for impairment in accordance with Australian Accounting
Standards.
In order to test for impairment of goodwill, the Group prepared an impairment model which forecast cash flows,
discounted to their present value. The valuation method used to test for impairment was fair value less costs to sell for the
South Korea CGU.
The carrying value of intangible assets for South Korea was a key audit matter given it was financially significant to the
Group and there were judgements and assumptions involved in estimating the cash flow forecasts and other key
assumptions, particularly discount rate and terminal growth rate.
How our audit addressed the key audit matter
We performed the following procedures, amongst others:
• Tested the mathematical accuracy of the calculations made in the impairment model.
• Compared the forecast cash flows used in the impairment model with the FY23 budget.
• Assessed the historical accuracy of the Group’s cash flow forecasts by comparing prior budgets to actual performance.
• Assessed the appropriateness and supportability of the cash flow forecasts by considering the key factors upon which
they were based and the underlying drivers for growth.
• Compared growth rate assumptions used in the impairment model to historical results and economic and industry
forecasts.
• Assessed the allocation of assets and liabilities to the CGU.
• Considered whether it would be possible to determine a reliable estimate of the amount obtainable in an arm’s length
transaction between knowledgeable and willing parties, by determining fair value less costs to sell.
• With the assistance of our internal valuation experts, we assessed the discount rate and terminal growth rate used
in the impairment model by comparing them to market data, comparable companies and industry research.
• Considered the disclosures made in note 17, in light of the requirements of Australian Accounting Standards.
134
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Key audit matter
Acquisition of Trader Interactive LLC
(Refer to note 19(c)) Interests in associates and note 24 Events occurring after the reporting period)
On 1 September 2021 the Group acquired 49% of Trader Interactive LLC (“Trader Interactive”) for $794.7 million (excluding
transaction costs and hedging impacts) and 49% of promissory notes receivable for $19.1 million. The transaction was
accounted for in accordance with AASB 128 Investments in Associates as an equity accounted investment.
The Group undertook a preliminary notional purchase price allocation (PPA) exercise in order to calculate the Group’s
share of Trader Interactive’s profit and the make-up of the investment carrying value, including fair value adjustments.
On 27 June 2022, the Group exercised its call option to acquire the remaining 51% in Trader Interactive for $1,172 million
and the transaction is expected to complete late in the first quarter of FY23.
The acquisition was funded by an entitlement offer which was completed in July 2022, resulting in the issue of 68,001,706
additional ordinary shares and cash raised of $1,182 million (net of transaction costs).
Equity accounting for Trader Interactive and the subsequent announcement of the acquisition of the remaining 51% are
considered to be a key audit matter as both transactions are significant to the Group and there were judgements and
assumptions made in estimating the preliminary notional fair value of acquired intangible assets and the resulting
amortisation expense, which formed part of carsales’ share of Trader Interactive’s profit for the year.
How our audit addressed the key audit matter
We performed the following procedures, amongst others:
• Read the sale and purchase agreements and considered the adoption of equity accounting for the initial 49% interest as
at 1 September 2021 and the timing of recognition of the remaining 51%, as an event subsequent to 30 June 2022.
• Evaluated the preliminary notional PPA including accounting for the acquisition hedge gain, capitalised transaction costs
and the valuation and useful life of acquired intangible assets.
• Tested the mathematical accuracy of the calculations made in the PPA.
• With the assistance of our internal valuation experts, we assessed the valuation methodologies and key assumptions
determined by the independent valuer and adopted by management, to value acquired intangible assets and estimate
their useful lives in order to calculate amortisation expense.
• Assessed the reasonableness of the Group’s share of Trader Interactive’s profit after tax for the ten months from
transaction date to 30 June 2022.
• Considered the disclosures made in note 19(c) and note 24, in light of the requirements of Australian
Accounting Standards.
Other information
The directors are responsible for the other information. The other information comprises the information included in the
annual report for the year ended 30 June 2022, but does not include the financial report and our auditor’s report thereon.
135
carsales Annual Report 2022SHAREHOLDERINFORMATIONCORPORATEDIRECTORY
INDEPENDENT AUDITOR’S REPORT TO
THE MEMBERS OF CARSALES.COM LTD CONTINUED
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in
the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free
from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part
of our auditor’s report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 36 to 55 of the directors’ report for the year ended 30 June
2022.
In our opinion, the remuneration report of carsales.com Limited for the year ended 30 June 2022 complies with section
300A of the Corporations Act 2001.
136
carsales Annual Report 2022 Responsibilities
The directors of the Company are responsible for the preparation and presentation of the remuneration report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.
PricewaterhouseCoopers
Lisa Harker
Partner
Melbourne
14 August 2022
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137
carsales Annual Report 2022SHAREHOLDERINFORMATIONCORPORATEDIRECTORY
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 30 June 2022.
A. Distribution of equity securities
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Class of equity security
Ordinary shares
Shares
No. of holders
11,456
6,291
772
472
77
19,068
Options and
performance
rights
No. of holders
1
15
2
16
1
35
Redeemable
preference
shares
No. of holders
-
-
-
-
-
-
Convertible
notes
No. of holders
-
-
-
-
-
-
There were 569 holders of less than a marketable parcel of ordinary shares. There were no redeemable preference shares
or convertible notes outstanding.
B. Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
BNP PARIBAS NOMS PTY LTD
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