Bapcor Limited (ASX: BAP) is the Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions. The company operates across multiple business segments, including Retail, Trade, Wholesale, and Specialist Networks, servicing a wide range of customer bases from general mechanics to DIY enthusiasts. Bapcor Limited was listed on the ASX on 24 April 2014 at an issue price of AUD 1.95 per share.
Financial Performance
In the financial year ended 30 June 2024, Bapcor delivered revenue of $2.037 billion and EBITDA of $268.4 million. Moving forward, management has set performance targets for over 5% revenue CAGR and more than 10% EBITDA CAGR by FY30. The company also plans to lift its Return on Invested Capital (ROIC) from 9.5% to over 13.5%.
Bapcor’s capital management strategy remains disciplined, emphasising maintaining a robust balance sheet, enhancing cash flow efficiencies, and carefully allocating investment capital. Debt levels are well managed, providing ample flexibility for future strategic initiatives. Furthermore, the company aims to decrease its inventory-to-sales ratio from 26.4% to below 25%.
Growth Pipeline
Bapcor’s growth strategy centres on six clear imperatives, which are maximising shareholder value, stabilising Retail operations, consolidating leadership in the Australian trade sector, closing the competitive gap in New Zealand, accelerating store network expansion, and digitalising its business operations. The company is targeting to expand its East Coast network, develop white space territories, increase its own-brand penetration, and strengthen its equipment business offerings.
Retail improvements include focusing on brand differentiation for Autobarn and Autopro, rebalancing product assortments, improving the customer loyalty program (already boasting over 1.4 million members), and enhancing the e-commerce experience. In Trade, the company aims to grow margins through supply chain optimisation and expanding new store capabilities. In New Zealand, efforts are directed at optimising the network and strengthening core brand penetration.
Strategic Development
The Retail division, particularly Autobarn and Autopro, is a major focus for revitalisation following years of underperformance. COVID-19 had provided a temporary uplift, but post-pandemic market dynamics exposed imbalances in product ranges and inconsistent store experiences. Remediation efforts include reworking store layouts, optimising product offerings towards non-discretionary categories, and strengthening store-level capabilities. Bapcor has already seen positive early impacts from its new Autobarn website, which has improved online conversion rates.
Meanwhile, the Wholesale segment, which internal sales had historically burdened, is undergoing restructuring to eliminate internal conflicts, sharpen customer focus, and strengthen its owned brand portfolio. Strategies include shifting category management closer to the end-customer, exiting non-core brands, and improving external customer engagement across reseller markets.
Supply chain efficiency remains a cornerstone of Bapcor’s ambitions for growth. The company is moving towards a unified supply chain model, transitioning from decentralised networks to optimised hubs. Innovations such as Offshore Consolidation Centres (OCCs), Micro Fulfilment Centres (MFCs), and co-shared hub stores are being introduced to bring products closer to customers, reduce touchpoints, and enhance stock visibility.
Industry Context
The automotive aftermarket sector remains resilient, supported by favourable industry fundamentals. Australia’s registered vehicle parc is forecast to grow by approximately 2% annually between 2025 and 2028, while New Zealand’s is expected to expand at around 1% per annum. Importantly, the average age of vehicles remains elevated, 11 years in Australia and 14 years in New Zealand, underpinning consistent demand for replacement parts and servicing.
Although electric vehicles (EVs) are growing in popularity, internal combustion engine vehicles still represent over 96% of the Australian car parc, ensuring that traditional aftermarket demand will remain strong for the foreseeable future. Additionally, consumers are increasingly shifting away from OEM-branded parts towards more cost-effective aftermarket solutions, aligning well with Bapcor’s expanded product range and customer base.
