BUILDING A BETTER AA 21 st February 2018 AGENDA New Strategy - - PowerPoint PPT Presentation

BUILDING A BETTER AA

21st February 2018

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AGENDA

New Strategy Financial Overview Q&A

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VISION FOR THE AA

OPERATIONAL & SERVICE EXCELLENCE HIGH PERFORMING CULTURE

Putting service, innovation and data at the heart of the AA

ROADSIDE

Innovate & grow

INSURANCE

Invest to accelerate growth

4

Business Review – bottom-up Leadership – fresh talent at exec level Employee Engagement – first review Product Innovation – new team Tech and Data – full audit Customers – extensive understanding Insurance – deep dive

FIRST 150 DAYS

Strategic Review

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Key Strengths: Market leader Trusted brand Loyal customer base Strong service ethos Committed employees Prognostics & member data Patrol & dispatch technology Nascent Insurance growth

THE AA IS UNIQUELY PLACED TO SUCCEED

Sources: Old Street Data Sciences “Brand tracker” for consumer, Q4 2017, direct purchase of breakdown cover; FY17 B2B manufacturer share figures; GfK Financial Research Survey 6 months to September 2017

60% 40%

Consumer Roadside

Roadside market share

B2B Roadside

Insurance brand consideration

#1 for motor insurance #6 for home insurance 3.3m

35% 65%

9.9m

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CLEAR SUCCESSES, BUT CHALLENGES REMAIN

Progress since IPO Remaining challenges

New business growth in Road membership Improved pricing capability App roll-out and engagement Breakdown telematics launched Core dispatching system installed Core membership system being rolled out Improved patrol service levels Growth in motor Insurance Competitive landscape & increasing regulatory scrutiny Emerging automotive trends Need for continuous product innovation Restricted operational flexibility Remaining legacy systems and data infrastructure Failure to optimise on potential

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Maintaining current profitability will require reduced investment in:

• Sales and marketing
• Product development
• Customer service
• Insurance growth

The net of these activities would be:

• Declining Roadside membership
• Flat Insurance portfolio

LONG-TERM GROWTH OVER SHORT-TERM PROFIT

LIMITED RUNWAY IN SHORT-TERM PROFIT WE HAVE THEREFORE CHOSEN LONG-TERM GROWTH

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ROADSIDE

OPERATIONAL & SERVICE EXCELLENCE HIGH PERFORMING CULTURE

Putting service, innovation and data at the heart of the AA

ROADSIDE

Innovate & grow

INSURANCE

Invest to accelerate growth

9

Paid new members up 23% since FY15 Customer loyalty at a high

• Retention at 82%
• 1.3m customers with us for 10 + yrs.
• Strong ‘call & save’ capabilities (Stay AA)
• 100% retention of major B2B accounts over past 3 yrs. combined with Lex Autolease win

Increasing digital engagement

• Online sales up by more than a 1/3rd
• 1/3rd of members registered for the App and 30% use at breakdown
• Connected Car JV with European Clubs and Car Genie launch

Ongoing implementation of core member systems

SIGNIFICANT PROGRESS MADE

ROADSIDE

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MEMBERSHIP FLAT AT BEST

FY15

• Yr. End

CHANGES TO MEMBERSHIP HOLDINGS, FY15-18

Free to paid members Paid new members Member outflows

The business worked hard to stabilise membership in FY17 after many years of decline:

• Closing gap on new / renewal prices
• Pricing sophistication in Stay AA
• Investment in brand
• CRM improvements

Outflows greater than inflows Inflows greater than outflows Outflows greater than inflows

However, despite continued growth in paid new business in FY18, overall membership did not grow:

• Winding down of ‘free to paid’ membership
• Increased renewal price transparency
• Price rises to cover IPT increases and inflation
• Activity to reduce double cover
• Increasing competitive activity and market

channel shifts

3.39m 3.33m 3.34m 3.29m

FY16

• Yr. End

FY17

• Yr. End

FY18

• Yr. End

ROADSIDE

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ACTIONS MOVING FORWARD

5 4 3 2 1

Transform our breakdown service to be fully connected Market to grow our base with younger segments Ongoing innovation to resolve breakdowns Drive digital adoption and broader member engagement Membership systems investment to drive retention

ROADSIDE

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• 1. OPPORTUNITIES IN THE CHANGING

LANDSCAPE

Trend Our View Opportunities for the AA Connected Car

• In 10 yrs. embedded connectivity could reach more than

60%1; remainder open to device market

• B2B/C breakdown

prediction and resolution Electric / Hybrid Vehicle Growth

• Penetration currently <3% and forecast to rise to c10% by
• 20212. Impact on car reliability unclear; key ‘self induced’

faults (e.g. tyres, locked out) unchanged

• New electric / hybrid

services for fleet and consumers Changing Ownership

• Vehicle ownership still increasing3; shift to deeper financing in

2nd hand car market; significant reductions to ownership would

• nly materialise over the long term (10 + yrs.) centered on

urban areas

• New B2C finance
• fferings – building on

existing financial services business Autonomous Vehicles

• Full automation 10 + yrs. away with penetration forecast to

remain <30% by 20304

• B2B and mobility

solutions, capitalising on AA scale

• 1. Internal estimates; 2. OC&C forecasts; 3. Department for transport 2016 data; 4.KPMG

Now 10 + yrs.

ROADSIDE

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• 1. CONNECTED CAR – MOVING THE AA

‘BEYOND BREAKDOWN’

PREDICTION DIAGNOSTICS Solving customer problems when they break down Predict Prevent Protect

ROADSIDE

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What we believe What we have learnt

Will drive membership growth Early signs of strong appeal with target customers Will drive engagement / retention Highly engaging app experience

• 20% of users log in daily
• Average app session >3mins

Will protect and grow B2B business Significant interest from B2B partners with discussions in progress Will drive down operational costs Predicts up to 1/3 of breakdowns

• 1. CONNECTED CAR – WHAT WE BELIEVE

AND WHAT WE HAVE LEARNT

Car Genie launched Aug 17 5,000 connected devices - now in all regions of the UK Car Genie cars range from 1 month to almost 20 years old

ROADSIDE

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• 1. CONNECTED CAR – PLAN

FY19 - 20 FY20

ADOPT

FY21 onwards

INNOVATE

FY20/21

SCALE

FY19/20 Substantial Connected Car roll-out, identifying:

• Member impact
• Operational benefits
• Distribution models

Integrate into membership proposition Develop version 2

• f proposition –

Consumer, B2B, Insurance Develop platforms for embedded data streams Mass adoption of connected membership Scale through prognostics as a service for B2B partners

ROADSIDE

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c20%

AA share of drivers within segment with B2C cover

• 2. MARKET TO GROW OUR BASE WITH

YOUNGER SEGMENTS

Source: Old Street Data Sciences UK Driver Segmentation

‘Get me back on track’ Younger – Avg. 41 Less emotional AA history TV; Magazines; Internet ‘Just fix it for me’ Younger – Avg. 37 Need new reasons to buy AA direct TV; Internet; Cinema ‘Be there if I need you’ Older – Avg. 68 Strong connection with AA Open direct mail; read newspapers

c60%

AA share of drivers within segment with B2C cover

16%

c30%

AA share of drivers within segment with B2C cover

24% % of Driving Public % of Driving Public % of Driving Public

Grow

21%

Stretch Maintain (historical focus)

Freedom Seekers Retiring to the Easy Life Life’s too Short

ROADSIDE

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• 3. ONGOING INNOVATION TO RESOLVE

BREAKDOWNS

B2B Example: Customer’s car cannot be repaired – we solve the problem at the roadside & keep them moving

• 1. Patrols DVLA check & initiate

driver insurance instantly via tablet or iPhone

• 3. Patrol takes customer to

nearest dealer to collect replacement car

• 4. AA team coordinate the end-

to-end vehicle repair and return process between dealers, repair centres and customers

• 2. Patrols select a relevant

replacement vehicle

• 5. Replacement car sorted

in less than 30mins versus c120mins today

ROADSIDE

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DIGITAL BREAKDOWN REPORTING & TRACKING

As % B2C Breakdowns

• 4. DIGITAL ADOPTION - BREAKDOWN

0% 10% 20% 30% 40% 50% FY16 Q1 FY16 Q3 FY17 Q1 FY17 Q3 FY18 Q1 FY18 Q3 Reported on App Tracked on App Tracked Online

35%

AA Members have registered with the App

45%

Member breakdowns are tracked on web & app

20%

Member breakdowns do not involve a call

ROADSIDE

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USE OF MEMBER BENEFITS (MOBILE APP) # of unique monthly users

• 4. DIGITAL ADOPTION – MEMBER ENGAGEMENT

20,000 40,000 60,000 80,000 100,000 120,000 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18

ROADSIDE

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NEW RETENTION CAMPAIGN IMPACT, %

Improvements in systems – full deployment of new membership system CATHIE Increased sophistication in renewal pricing & proactive retention – targeted approach Further improvement in ‘call & save’ reactive retention (Stay AA) – workflow and

• rganisational changes
• 5. MEMBERSHIP SYSTEMS - INVESTMENT

TO DRIVE RETENTION

1 yr 2 - 4 yrs Control Test

Customer tenure MORE CAMPAIGNS CAN BE TESTED FASTER AND MADE SMARTER WITH OUR NEW CRM SYSTEMS

+2ppt +1ppt

ROADSIDE

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Returning membership to growth by FY21 50% members registered on App 20% reduction in breakdowns calls into the contact centres

RETURNING ROADSIDE TO GROWTH BY FY21

Plus additional upside from Connected Car

ROADSIDE

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INSURANCE

OPERATIONAL & SERVICE EXCELLENCE HIGH PERFORMING CULTURE

Putting service, innovation and data at the heart of the AA

ROADSIDE

Innovate & grow

INSURANCE

Invest to accelerate growth

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New 5 yr. growth plan Proven management team Powerful brand Scope for growth with members and non members

• 3.3m members, only 9% with

AA motor insurance

Ability to underwrite in-house Best-in-class data and analytics Highly efficient cost base

FUNDAMENTALS FOR GROWTH

Source: GfK Financial Research Survey 6 months to September 2017

MOTOR INSURANCE – CUSTOMER REPORTED CONSIDERATION AND SHARE

Brands that underperform Consideration Brands

• utgrowing

Consideration

Brand Consideration (%) Share of new business (%)

Admiral Direct Line Hastings Direct

INSURANCE

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Returned motor portfolio to growth - now at over 600k policies Insurer hosted pricing (IHP) leading to more competitive net rates from the panel Successful launch of in-house insurer (AAUICL) - now at over 400k policies across home and motor

STRONG PROGRESS MADE

0% 10% 20% 30% 40% 50% 60% 500 520 540 560 580 600 620 640 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Aug-17 Nov-17 AAUICL Panel Share Motor Policies (000)

MOTOR INSURANCE POLICIES & AAUICL PANEL SHARE

AAUICL Panel Share Motor Policies

INSURANCE

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3

ACTIONS MOVING FORWARD

2 1

Broaden underwriting footprint Drive more competitive premiums New Insurance innovation

INSURANCE

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AA INSURANCE QUOTE REQUESTS, %

Underwriter currently does not offer quotes to never-members and younger customers Significant number of quote requests from never-members and younger segments Therefore sizeable opportunity to broaden

• ur underwriting footprint

Proven learnings from member data portable to ensure profitable underwriting of these new types of customer Brings new customers to the AA - Roadside cross-sell opportunities

• 1. BROADEN FOOTPRINT TO INCLUDE NEVER-

MEMBERS AND YOUNGER CUSTOMERS

6% 7% 87% Members Ex-Members Never- Members 65% 35% Over 25 Under 25

Source: Internal quotes across channels for w/c 6th Feb 2018

INSURANCE

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In-house underwriter launched 2 yrs. ago

• Provides more competitive premiums where it has proprietary data
• Creates a strong platform to drive more competitive premiums for a broader set of

customers

Continued insurer hosted pricing (IHP) roll-out and improved data & analytics

• Provides the opportunity for more competitive premiums from the panel
• Five of our large panel members now have IHP capability and have seen significant

growth since launch

This will require investment of c£20-25m from PLC cash

• 2. DRIVING MORE COMPETITIVE PREMIUMS

INSURANCE

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Uniquely poised to collect driving data through Connected Car prior to insuring Integrated Roadside and Insurance

• ffer would allow compelling

telematics economics and leading customer offer Opportunity to develop proposition to drive growth with young driver segments

• Potential to explore Driving School

proposition (84k pupils in FY18)

• 3. NEW INSURANCE INNOVATION

INSURANCE

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2m+ motor and home polices by end FY23 9-14% EBITDA CAGR FY19-23

STEP-CHANGED GROWTH IN INSURANCE BUSINESS

Short term EBITDA hit from investment to fund growth

INSURANCE

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OPERATIONAL AND SERVICE EXCELLENCE

OPERATIONAL & SERVICE EXCELLENCE HIGH PERFORMING CULTURE

Putting service, innovation and data at the heart of the AA

ROADSIDE

Innovate & grow

INSURANCE

Invest to accelerate growth

31

CALL HANDLING SERVICE LEVELS %, FY18 CALL TO ARRIVE TIME, FY18

Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18

OPERATIONAL RESILIENCE

OPERATIONS Measures the time taken from customer breakdown call to Patrol arrival Measures the % of breakdown calls answered within 20 seconds

Peaks in demand created high levels of workload volatility Drives reliance on 3rd party garaging both for Roadside Assistance and for Recovery - service quality impacted Investment in front-line resources

• including Patrols - reducing use
• f 3rd party garaging on difficult

days Stability and more flexibility in

• ur Contact Centres improving
• perational resilience

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Leadership

• New team in place
• Management restructure underway

Investing in Contact Centres

• +200 staff (H1)
• Cross-training to improve demand

handling

Investing in Roadside Operations

• +25 Roadside Patrols
• +40 Recovery Patrols
• Investment in training

Engagement

• Listening to our front line teams

DELIVERING SERVICE EXCELLENCE IN FY19

CALL HANDLING SERVICE LEVEL %, FY19 TARGETS CALL TO ARRIVE TIME, FY19 TARGETS

Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19

OPERATIONS

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CONTINUOUS IMPROVEMENT IN COSTS

Investment in FY19 positions us to target absorbing inflation in FY20/21 through continuous improvement drive Contact Centres

• Drive app usage in breakdown
• Deflect routine admin calls online
• Implement ‘end to end’ case management and ‘next best action’ techniques
• Cross-skill teams to improve resilience during high demand

Road Operations

• Enhance proposition on ancillary sales - 10% improvement
• Improve drive times - dispatch and traffic based routing technology
• Improve roadside repair rate - more granular task-based performance measurement and training
• Reduce garaging - targeted patrol recruitment and utilisation improvements
• Improve flexibility and utilisation - new roster for Recovery Patrols

OPERATIONS

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10% pa increase in ancillary sales Maintain improvement in roadside repair rate Aim to absorb inflation in FY20 and FY21 Improve consistency of call to arrive time at 45mins Improve consistency of call handling at 80% in 20s

IMPROVEMENTS IN CUSTOMER SERVICE

OPERATIONS

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HIGH PERFORMING CULTURE

OPERATIONAL & SERVICE EXCELLENCE HIGH PERFORMING CULTURE

Putting service, innovation and data at the heart of the AA

ROADSIDE

Innovate & grow

INSURANCE

Invest to accelerate growth

36

3-year planning process

• Focus on delivery
• Clear accountabilities
• Operational improvements embedded

Organisational design – review conducted New leadership – internal communications Engagement survey – first in five years

RECENT FOCUS

CULTURE

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DELIVERED IN THREE PHASES

Phase 1

Enhanced Roadside products Step-change CRM capabilities Connected Car – Roll-out Insurance Growth – Phase 1

Phase 2

Connected Car – Road, Insurance and B2B – new propositions in market Insurance Growth – Phase 2

Phase 3

Fully utilising our data and digital offering to deliver connected, integrated Roadside and Insurance propositions

Continuous Operational Improvements Continuous Cultural Change

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New Strategy Financial Overview Q&A

AGENDA

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INVESTMENT IN OUR KEY PRIORITIES IN FY19

FY19 £m OPEX CAPEX COMMENTS Roadside 8 14

• Market to grow our base with younger segments
• Membership systems to drive retention
• Ongoing innovation to resolve breakdowns
• Drive digital adoption and broader member engagement
• Transform our breakdown service to be fully connected

Insurance 10 5

• Broaden underwriting footprint
• Driving more competitive premiums
• Build improved digital and connected car offers

Operational and service excellence 7

• Improvement to leadership structure
• Investment in contact centres
• Front-line engagement drive
• Continuous cost and service focus

High performing culture 1

• Review of rewards and benefits
• New Learning & Development plan to build expertise
• Organisational design that promotes accountability

26 19

OPEX investment expected to be c£20m pa in FY20 and FY21

40

(7) (5) 9 (26) 6 (9) (5) (12)

FY18 TO FY19 TRADING EBITDA BRIDGE

Trading EBITDA guidance for FY19 £335-345m, adjusted EPS c15p

390-395 335-345 £m

FY18

Revenue holdings decline in B2C and B2B Increase in IPT Insurance upside Opex initiatives for growth Strategic projects inc. AA cars One-off adjustments & releases Non-recurring tax benefits Central costs including additional pension charge

FY19

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FORWARD GROWTH EXPECTATIONS TO FY23

REVENUE CAGR FROM FY19 TRADING EBITDA CAGR FROM FY19 Roadside Assistance 2-5% 3-6% Insurance Services and Insurance Underwriting 6-9% 9-14% Group 3-5% 5-8%

Excludes additional upside from Connected Car

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CAPEX GUIDANCE

Notes: *Excludes capex accrual of £5m **Solvency capital for growth of underwriter of c£20-25m to be funded by AA plc and is excluded from the breakdown above. £m FY19 FY20 FY21 COMMENTS IT transformation 31 4

• IT transformation capex in relation to CRM

implementation for existing members Additional IT and new initiatives 12 18 22

• App and digital development, connected car

integration and investment in insurance business Connected car 7 7 7

• Roll-out of connected car product including

additional product and systems development Growth capex 19 25 29 IT maintenance 20 20 20

• Higher than FY18 due to additional IT

maintenance and improvement investment Finance lease capital repayments net of proceeds from sale of fixed assets 25 25 25

• In line with FY18

Property & equipment 10 10 10

• In line with FY18

Maintenance capex 55 55 55 Total capex 105* 84 84

• Depreciation

charge of c£70m in FY19 and c£90m in FY20 and FY21

• Annual

maintenance capex £55m from FY19

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(24) (23) (17) (110) (128) (8) (10) 12 10 10 55

FY19 A LOW POINT IN FCF DUE TO INVESTMENTS – SIGNIFICANT NORMALISED CASH GENERATION

335-345 c107 c276

Normalised level of capex spend expected to deliver free cash flow to equity in excess of £80m in FY20 and over £100m pa from FY21

Higher capex funded through internal funds Debt interest costs projected to decrease to c£115m (current punitive swap arrangements terminate in FY19) No additional financing requirements in FY19

c20

£m Underlying adjustments

FY19 Trading EBITDA Cash tax Pension contributions Working capital & exceptionals Net cash flow from

• perating

activities Capital expenditure Debt interest Other finance interest Acquisitions & disposals FY19 Free Cash flow Transformation & capex add back Swap costs eliminated in FY19 Acquisitions & disposals Working capital & exceptionals FY19 Normalised Free Cash Flow

44

Dividend policy Changed to reflect operation of WBS gating covenant and investment plans Proposal of 2p per share per year until profit and cash flow enables a policy change Dividend proposal FY18: Expected 1.4p final giving total of 5p per share FY19: Expected split 0.6p interim and 1.4p per share final

DIVIDENDS

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£250m £500m £700m £250m £500m £570m £138m

Senior Term Facility Class A3 notes Class A5 notes Class A6 notes Class A2 notes Class B2 notes Cash

Gross debt: £2,770m

Interest rate 5.71%1 4.25% 2.88% 2.75% 6.27% 5.50% Effective maturity 2021 2020 2022 2023 2025 2022

DEBT STRUCTURE FOLLOWING JULY 2017 REFINANCING

Key metrics H1 18 FY19E Net debt/EBITDA2 6.7x 7.8x Run rate cash interest cover3 2.7x 2.5x Financial covenants H1 18 Class A FCF to DSCR4 (covenant > 1.35x) 3.1x Class B FCF to DSCR4 (covenant > 1.0x) 2.2x

Notes: 1 Fixed interest rates with LIBOR hedged for Senior Term Facility: to 31/7/18 fixed at 5.71%; 31/7/18 to 31/1/19 fixed at 8.42%; 1/2/19 to 31/7/21 fixed at 2.75% 2 Total Net debt, including finance leases net of cash, to Trading EBITDA for the last 12 months 3 Run rate cash interest: Trading EBITDA 4 Free cash flow: debt service cover ratio 5 Total group cash as at 31 July 2017

Significant headroom above financial covenants

Blended cost of debt significantly reduced to 4.52% following pay down of £98m of STF in July 2017 No immediate refinancing requirements

• weighted average maturity just over 5 years

Working Capital Facility (undrawn) of £75m in place Rating: A notes BBB-; B2 notes B+

5

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CAPITAL STRUCTURE IS LOWER RISK THAN TRADITIONAL STRUCTURES

Resilient and low risk balance sheet

Evergreen rolling structure: spread out maturity profile allows the company to refinance itself on a continuing basis All instruments are easy to refinance – strong credit profile and investment grade rating attracts institutional and real-money investors Very remote risk of a financial covenant breach

Paving the way for constant value creation over time Whole Business Securitisation

Credit enhancing characteristics of the Whole Business Securitisation (WBS) Attractively priced and long-dated bonds paying fixed interest rates No amortisation – all cash is available to the business

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Net debt Equity Year 1 Net debt Equity Year 5 Net debt Equity Year 3

NATURAL DELEVERAGING – OFFERS ACCRETION TO THE VALUE OF EQUITY OVER TIME

Value creation does not require significant EBITDA growth

Significant deleveraging potential, generating equity value creation over time

EV: £3.3bn(1) EV: £3.3bn EV: £3.3bn

(1) Illustrative enterprise value of £3.3bn

The AA is effectively an equity for debt swap over time Annual cash flow accounts for a significant portion of existing equity value Simply maintaining the cash flows will generate significant equity value The projected growth in the business

• ffers significant further accretion to

equity holders over time

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SIGNIFICANT PROTECTION AFFORDED TO EQUITY HOLDERS

• Covenant-light structure, with only one maintenance Debt Service Coverage Ratio (DSCR)

covenant associated with the Class A Notes

• This covenant, which effectively is an interest coverage ratio, is set at 1.35x: with c.£100m
• f annual interest cost for the Class A Notes (fixed in nature), Class A Free Cash Flow

would need to more than halve before any breach could potentially occur(1)

• As such, the risk of default remains very low(2)

(1) Based on latest reported Class A FCF DSCR ratio in July 2017 of 3.1x (2) Class A FCF DSCR would have to fall below 1.1x before an Event of Default could be triggered

Covenant-light structure

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Investment to secure future growth from low base Cash conversion as strong as ever Dividend policy change Low risk, flexible capital structure Equity protected by undemanding covenants Debt to equity benefit for shareholders from deleveraging

REBUILDING ON A ROBUST BASE

Investment for future growth and shift of value to equity

50

VISION FOR THE AA

OPERATIONAL & SERVICE EXCELLENCE HIGH PERFORMING CULTURE

Putting service, innovation and data at the heart of the AA

ROADSIDE

Innovate & grow

INSURANCE

Invest to accelerate growth

51

New Strategy Financial Overview Q&A

AGENDA

52

DISCLAIMER

This presentation contains “forward-looking statements” which are prospective in nature and are not based on historical facts, but rather on current expectations and projections about future events. Such statements are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as “plans”, “expects” or “does not expect”, “is expected”, “is subject to”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward- looking statements, including business, economic and regulatory changes as well as the risks set out in the Company’s annual report and accounts, which can be found on its website (www.theaaplc.com/investors). Such forward-looking statements should therefore be construed in the light of such

• factors. Neither the Company, nor any of its associates or directors, officers or advisers, provides any representation, assurance or guarantee that

the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with its legal or regulatory obligations (including under the Market Abuse Regulation, the Listing Rules and the Disclosure Guidance and Transparency Rules), the Company is not under any obligation to update, revise or correct any forward-looking statements, whether as a result of new information, future events or otherwise. No statement in this presentation should be construed as a profit forecast or relied upon as a guide to future performance.

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IR TEAM CONTACTS

Jill Sherratt Head of Investor Relations +44 207 395 7301 +44 779 113 7738 Jill.Sherratt@theaa.com Zeeshan Maqbool Investor Relations and Corporate Finance Manager +44 773 879 0402 Zeeshan.Maqbool@theaa.com Lisa Shailer IR Assistant +44 207 395 7442 Lisa.Shailer@theaa.com