Slide 1: FY 2023 Results
@ Inchcape RESULTS. 5 March 2024 .
Slide 2: Agenda
Agenda RESULTS OVERVIEW: Duncan Tait, Group CEO RESULTS REVIEW: Adrian Lewis, Group CFO STRATEGIC PROGRESS: Duncan Tait, Group CEO 2
Slide 3: Results Overview
RESULTS OVERVIEW DUNCAN TAIT GROUP CEO 3
Slide 4: Inchcape FY 2023 results Key takeaways
Inchcape FY 2023 results Key takeaways Strong financial and Substantial strategic Inchcape remains well operating performance progress positioned for future growth 4
Slide 5: FY 2023: A strong financial and operating performance
FY 2023: A strong financial and operating performance FINANCIALS FINANCIALS: CASH & RETURNS: £11.4bn £502m 84.8p £498m 26% 33.9p Revenue PBT EPS FCF ROCE DPS 2022: £8.1bn 2022: £373m 2022: 72.0p 2022: £380m 2022: 41% 2022: 28.8p FINANCIALS OUR PEOPLE: FINANCIALS PLANET: FINANCIALS CUSTOMERS: 28% 31%
Slide 6: FY 2023: Substantial strategic progress, Inchcape well positioned for growth
FY 2023: Substantial strategic progress Inchcape well positioned for growth STRATEGIC DEVELOPMENTS GROWTH OUTLOOK Contract wins and bolt-on acquisitions Derco progress FY 2024 Medium to long term 15 distribution contracts Integration Another year of growth, Expecting to return to won and 3 acquisi
Slide 7: Results Review
RESULTS REVIEW ADRIAN LEWIS GROUP CFO 7
Slide 8: FY 2023: a strong performance
FY 2023: a strong performance Topline: Profitability: Balance sheet Shareholders: Revenue Operating margin and cash flow: Basic EPS Free Cash Flow £11.4bn 5.8% £498m 84.8p +70 bps from FY 2022 with 74% FCF conversion +18% from FY 2022 +41% +12% £502m 0.8x 33.9p +35% from FY 2022 +18% from FY 2022 To
Slide 9: Group revenue bridge
Group revenue bridge Strong growth from Distribution and acquisitions DISTRIBUTION ORGANIC GROWTH 16% 29% £11.4bn M&A 21% Europe 3% 41% 16% & Africa Retail reported 7% APAC growth Americas £8.1bn Group organic growth of 12% FY22 FY23 9
Slide 10: Group adjusted operating margin bridge
Group adjusted operating margin bridge Growth from strong Distribution performance 5.8% Distribution +70bps Increased mix 5.1% Retail Derco accretion + Synergies Decreasing mix Operating leverage Used car headwinds Property disposal FY22 Op Margin: 6.9% Op Margin: 1.7% FY23 +70bps (40)
Slide 11: Americas Distribution: Resilience in a challenging market
Americas Distribution: Resilience in a challenging market Revenue £m Operating profit £m 3,746 262 33% 1,480 39% 110 of Group of Group adjusted Revenue 2022 2023 operating profit 2022 2023 Adjusted Organic operating growth: +32% +7% margin: 7.4% 7.0% FY 2023 revenue: FY 2023 operating margin: Region
Slide 12: APAC Distribution: Outstanding performance
APAC Distribution: Outstanding performance Revenue £m Operating profit £m 2,826 2,341 235 25% 35% 163 of Group of Group adjusted Revenue 2022 2023 operating profit 2022 2023 Adjusted Organic operating growth: +2% +16% margin: 7.0% 8.3% FY 2023 revenue: FY 2023 operating margin: Regional outlook: G
Slide 13: Europe & Africa Distribution: Accelerated operating performance
Europe & Africa Distribution: Accelerated operating performance Revenue £m Operating profit £m 2,521 132 2,048 22% 20% 90 of Group of Group adjusted Revenue 2022 2023 operating profit 2022 2023 Adjusted Organic operating growth: +30% +21% margin: 4.4% 5.2% FY 2023 revenue: FY 2023 operating margin:
Slide 14: Retail: A resilient performance
Retail: A resilient performance Revenue £m Operating profit £m 48 20% 6% 2,354 40 2,264 of Group of Group adjusted Revenue 2022 2023 operating profit 2022 2023 Adjusted Organic operating growth: +10% +3% margin: 2.1% 1.7% FY 2023 revenue: FY 2023 operating margin: Divisional outlook: Robust volume
Slide 15: Income statement
Income statement Net interest expense higher £m (unless otherwise stated) FY 2023 FY 2022 reflecting shift in capital structure and elevated interest rate Revenue 11,447 8,133 environment Adjusted Operating Profit 669 411 Adjusting items include acquisition and integration costs, Adjusted Net Financ
Slide 16: Net Finance Costs
Net Finance Costs £168m Medium term outlook 70% fixed GBP corporate debt facilities in a higher interest rate environment 5 year debut bond, brings some stability to interest costs Net Interest: £77m £77m RCF renewed and increased to £900m, with extended maturity to 2028 Deleveraging over ti
Slide 17: Excellent free cash flow generation
Excellent free cash flow generation Net Cash / (Debt) bridge(£m) FY 2023 dynamics: £498m adjusted free cash flow 74% adjusted operating profit conversion Supported by net working capital inflow of £155m - Derco inventory reduction offset by normalisation Acquisitions elsewhere c.£506m invest
Slide 18: Derco: Transforming our business
Derco Transforming our business Integration progressing well – organisational, operational and technological Foundation of revenue synergies in place in the Americas and other regions Operating margins at top end of 5% to 7% range delivered, pre-synergies Successful completion of c.£200m excess inve
Slide 19: Capital allocation policy: A disciplined approach
Capital allocation policy: A disciplined approach, short term focus on deleveraging 01: 02: 03: 04: Invest in the business Dividends Value accretive M&A Share buybacks Capex for organic growth Policy: 40% annual payout Disciplined approach to Consider appropriateness and technological of basic EPS (
Slide 20: Strategic Progress and Outlook
STRATEGIC PROGRESS AND OUTLOOK DUNCAN TAIT 20
Slide 21: Why Inchcape is winning with our mobility company partners
Why Inchcape is winning with our mobility company partners Inchcape is a key element of the mobility company value chain We manage Through consistent Supported by our Proven by our delivery of Distribution digital and data long track record the cost of Excellence on a analytics capabilities of perfo
Slide 22: Global scale and growth through distribution deal momentum
Global scale and growth… …through distribution deal momentum Annualised Distribution revenue from acquisitions since 2016 2016 2023 4,000 29 41 3,000 Markets Markets 2,000 20 60 1,000 Mobility partner Mobility partner relationships relationships 0 2016 2023 22
Slide 23: Distribution Excellence – on-going success
Distribution Excellence – on-going success Driven by contract wins and acquisitions Americas APAC Europe & Africa Further market share gains – Increased exposure New frontiers in Africa and scaled Americas proposition to substantial market strategic progress in Europe Bolivia Thailand Kenya Ecuador
Slide 24: Derco: Transforming our business
Derco Transforming our business Increases our global market share Delivers margin enhancement Derco is an Significant strategic benefits excellent business with exciting Drives value across the Group growth prospects 24
Slide 25: Vehicle Lifecycle Services
Vehicle Lifecycle Services Compelling opportunity to unlock long term value Our VLS opportunity Digital Parts Platform Used Car Excellence Strategic importance in capturing Australia gaining further traction Reducing scale of bravoauto value through a vehicle’s to its profitable core, given focus li
Slide 26: Digital and Data – our key differentiator
Digital and Data – our key differentiator Further traction on all fronts Key focus areas: Development of strategic digital roadmap – Digital eXperience Platform: driving performance and efficiency in our our digital touchpoint markets Next generation of DXP – with improved Data Analytics Platform: f
Slide 27: Responsible Business: Good progress on each pillar
Responsible Business Good progress on each pillar Planet People Places Practices Good progress towards our Inclusive Leadership Programme Over 30 programmes delivered Successfully integrated our Scope 1 & Scope 2 CO2 delivered to 650+ leaders across Safe Mobility and Social practices within new emis
Slide 28: Inchcape investment proposition
Inchcape investment proposition Driving scale and diversification Global market Differentiated On-going Track record of leadership in business model: investment in delivering high levels Automotive asset-light and growth opportunities: of returns and Free Distribution: with digitally-enabled, with o
Slide 29: FY 2023: Substantial strategic progress, Inchcape well positioned for growth
FY 2023: Substantial strategic progress Inchcape well positioned for growth STRATEGIC DEVELOPMENTS GROWTH OUTLOOK Contract wins and bolt-on acquisitions Derco progress FY 2024 Medium to long term 15 distribution contracts Integration Another year of growth, Expecting to return to won and 3 acquisi
Slide 30: In the Driving Seat: Our Distribution Model
IN THE DRIVING SEAT: OUR DISTRIBUTION MODEL 23 May 2024
Slide 31: Q&A
Q&A