AA Business Overview

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Jonas Gerard Warner
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1 AA Business Overview

2 FY5 Trading Market leading roadside assistance division is the core of the business 2 Roadside Assistance Insurance Services Driving Services AA Ireland Highlights Segment EBITDA % 75% 359m 84m 20m 5m Leading provider across the UK 3.8m personal members and 9.6m B2B customers 3,000 dedicated patrols, reaching an average of 0,000 breakdowns per day No. market share ( c.40%) High personal member retention rate (80% in FY5) Leading UK insurance broker Offers Motor, Home, Travel and other specialist insurance policies Significant cross sell to existing personal members and B2B customers 8% 4% 3% Provides educational driver awareness courses, fleet management and professional driver training Largest driving school in the UK 2 (AA and BSM brands) Leading branded breakdown provider and leading insurance broker in Ireland is defined as profit after tax as reported adjusted for depreciation, amortisation, net finance costs, taxation, exceptional items, acquisition earn-out costs, items not allocated to a segment and profit on sale of joint ventures. Items not allocated to a segment relate to transactions that do not form part of the on-going segment performance and include transactions which are one-off in nature. 2 By total UK driving pupils. 3 Y&R Brand Asset Valuator Survey (204).

3 A trusted brand - the UK s 4th Emergency Service 3 UK s top 5 most trusted brands () Which? total test score (204) major providers. 75% 72% Highest test score for a major provider from Which? every year since % 3. AA RAC Green Flag Widely recognised and trusted brand with over 00 years of operating history and high level of customer satisfaction September 204: AA Recommended provider in Which? survey for both consumer and manufacturer cover Ninth consecutive year AA has held Which? accolade AA is still the mainstream breakdown provider of choice Which Breakdown Services survey, September 204 Source: Company information, BrandAsset Valuator 204. Excludes charities and armed forces.

4 Leading positions in a large roadside market with significant barriers to entry 4 Large and resilient roadside market... Relatively stable market with defensive characteristics Strong customer engagement Attractive customer demographics Recession-resilient product with high recurring income with significant barriers to entry AA has significant economies of scale Over 3,000 patrols Over 3 million customers and 3.7 million breakdowns attended annually and led by the AA Overall UK Roadside Assistance market share Green Flag 7% Other 3% RAC 28% AA 42% B2B market share (Warranty provision as % of all new cars in UK) Other 33% AA 67% Sophisticated deployment systems Significant investment required from a new entrant in information and logistics systems B2B relationships The AA has 9.6m B2B customers Partner of choice for major OEMs Significant start-up costs for new entrants Source: Industry sources (January 205).

5 Large personal membership base with high retention levels and a proprietary database of information 5 Large personal membership base with a loyal customer following Number of personal members who have been an AA member for:,500, ,000 > 0 years >20 years 3.8m Personal members Stable membership over medium/longer term UK recession had no material impact on membership Proprietary long-standing database of c.20.6m individuals provides competitive advantage particularly for cross-selling of products Sophisticated customer rating and pricing capability based on proprietary information Personal Members demonstrate loyalty to the brand with an average tenure of approximately 2 years c..5 million Personal Members have been with the AA for more than 0 years Of which 800,000 have been Personal Members for more than 20 years Stable personal member retention rate in FY5; 80% Management focus in FY4 & FY5 on retention of existing profitable members Personal membership retention rate defined by reference to the number of customers renewing at the point of invitation.

Partner of choice for major B2B clients 6 Selected B2B client base by length of relationship and type of customer Added Value Accounts Fleet & Leasing Companes Car Manufacturers No.

6 Partner of choice for major B2B clients 6 Selected B2B client base by length of relationship and type of customer Added Value Accounts Fleet & Leasing Companes Car Manufacturers No. of years AA customer >0 Long standing relationships with major car manufacturers 204 new contract wins include Volkswagen Group (including Audi), Porsche and Hyundai Largest customer, Lloyds Banking Group, renewed its contract in February 204 for an additional 5 years Other recent contract renewals include Bentley, Ford, Honda and Jaguar Land Rover

7 Leading market positions in ancillary divisions 7 The broker of choice for underwriters... Long history of offering motor and home insurance to members and non-members # market share in UK Driving services market Driving services market share (January 205) Built on strength of AA brand and consumer trust in it Significant scale and high market share % More than 2.m policies currently in force in UK Motor insurance: 636,000 policy sales in FY5 Other 89% Home insurance: 90,000 policy sales in FY5 Home Services offering includes cover for emergencies such as defective plumbing, blocked drains and power loss as well as boiler breakdown Also offer Travel & other insurance types Value-adding broker underwriting panel supported by proprietary data from the roadside assistance business AA/BSM is largest driving school in the UK Highly fragmented space Source: Industry sources.

8 Significant cash flow generation with exceptional cash conversion rates Cash flow generation ( m) Net cash flow from operating activities before tax and exceptional items % 02.4% 00.% 20% 90% % % 00 FY3A FY4A FY5A 2 Cash Conversion 0% Increasing EBITDA y-o-y Favourable working capital dynamics as a function of upfront payments by customers Note: Financial year end is 3 Jan (i.e. represents the month period to 3 Jan 205). is defined as profit after tax as reported adjusted for depreciation, amortisation, net finance costs, taxation, exceptional items, acquisition earn-out costs, items not allocated to a segment and profit on sale of joint ventures. Items not allocated to a segment relate to transactions that do not form part of the on-going segment performance and include transactions which are one-off in nature. 2 Cash Conversion is defined as net cash flow from operating activities before tax and exceptional items as a percentage of. 3 Net cash flow from operating activities before tax and exceptional items is defined as the cash generated from operating activities before returns on investments and servicing of finance, taxation, capital expenditure and financial investments and acquisitions and disposals.

9 Segment summary financials 2 9 ( m) Roadside Assistance margin (%) % 48.9% 49.3% Insurance Services margin (%) % 60.0% 58.9% FY3A FY4A FY5A Revenue 0 FY3A FY4A FY5A Revenue Driving Services AA Ireland margin (%) % 2.5% 27.7% margin (%) % 37.9% 38.2% FY3A FY4A FY5A Revenue Note: Financial year end is 3 Jan (i.e. represents the month period to 3 Jan 205). is defined as profit after tax as reported adjusted for depreciation, amortisation, net finance costs, taxation, exceptional items, acquisition earn-out costs, items not allocated to a segment and profit on sale of joint ventures. Items not allocated to a segment relate to transactions that do not form part of the ongoing segment performance and include transactions which are one-off in nature. 2 During the year ended 3 January 205, our Media Business was transferred from Driving Services to Roadside Assistance. As a result, the results for the year ended 3 January 204 have been restated to show the results of Media within the Roadside Assistance segment. The results for the year ended 3 January 203 have not been restated. 0 FY3A FY4A FY5A Revenue

AA plc Preliminary Results for the year ended 31 January 2015

25 March 2015 AA plc Preliminary Results for the year ended 31 January 2015 Robust performance; strategy for transformation and proposed refinancing Intention to recommend dividends with respect to the