Inchcape Plc · LSE:INCH
Inchcape — Investor Presentation (March 2023)
24 slides from Inchcape's investor presentation, March 2023
Slide 1: Investor Presentation March 2023
INVESTOR PRESENTATION March 2023
Slide 2: Inchcape: Group overview
2 Inchcape: Group overview Our business Our differentiators Our financials Distribution focus Global scale ROCE c.90% of 6 continents profit >40 markets c.25% Vehicles & Parts Technology Cash conversion Strong automotive brands Digital & Analytics leader >60% Leading global automotive distributor Sp
Slide 3: 2022 headline financials
3 2022 headline financials Topline Profitability Cash Shareholders Revenue Operating margin Free Cash Flow Adjusted EPS £8.1bn 5.1% £380m 72.0p +15% £373m £(378)m 28.8p (2021: 22.5p) Organic growth (YoY%) PBT Net debt1 Dividend per share (proposed) Figures are stated before adjusting items, and on t
Slide 4: Considerable opportunities for an ambitious Inchcape
4 Considerable opportunities for an ambitious Inchcape Distribution Excellence Vehicle Lifecycle Services Annual new car volumes (units) Vehicle lifecycle value profit split2 90m 17m New market opportunities Large markets; e.g. China, typically US, UK, 75% Currently insourced Brazil, underserved by
Slide 5: Distribution deals & OEM opportunities have accelerated
5 Distribution deals & OEM opportunities have accelerated 2010 2016 2017 2018 2019 2020 2021 2022 2023 to date Number of 0 2 2 3 3 5 5 5 12 deals Revenue - c.£400m c.£100m c.£250m c.£150m c.£200m c.£200m c.£2.3bn c.£100m added1 New OEMs - 1 2 2 1 0 3 7 1 New markets - 3 0 3 2 2 3 1 1 1: Shows revenu
Slide 6: Derco Acquisition
@ Inchcape DERCO” | ACQUISTION =
Slide 7: Derco: at a glance
7 Derco: at a glance Existing portfolio: key facts Headquarters: ~4,500 4 11 Santiago, Chile colleagues markets OEM brands #1 player in Chile, Peru and Bolivia1 #3 player in Colombia1 150k £2.2bn 329 new vehicles revenue (2022) locations; distributed ~30% operated by Derco2 Chile Peru Colombia Boliv
Slide 8: Significant progress towards our strategy & growth ambitions
8 Significant progress towards our strategy & growth ambitions Strong topline Margin Distribution Shareholder growth upside consolidation value creation prospects Increases exposure to Derco is margin accretive Significantly increases 20+% EPS accretion from higher growth markets for the Group Inchc
Slide 9: Significant portfolio shift towards Distribution
9 Significant portfolio shift towards Distribution Revenue mix Profit mix 36% 50% 4% 18% 30% 78% 43% 13% 27% 92% 29% 22% 72% 9% 73% 53% 40% 89% 27% 25% 20% 57% 7% 22% 15% 28% 22% 27% 11% 8% Inchcape Inchcape Derco Inchcape Inchcape Inchcape Derco Inchcape 2016A 2022A 2022A Enlarged 2016A 2022A 2022A
Slide 10: Bringing mobility to the world's communities
Inchcape 10 BRINGING MOBILITY TO THE WORLD’S COMMUNITIES – FOR TODAY, FOR TOMORROW & FOR THE BETTER
Slide 11: Investment case: well-positioned to deliver significant value
11 Investment case: well-positioned to deliver significant value Attractive shareholder Consolidation returns opportunities Margin Strong organic expansion Dividend payout: 40% growth We are the leader with c.2% Track record of share share of global distribution buybacks Leverage our global scale to
Slide 12: Appendix
@ Inchcape APPENDIX
Slide 13: Capital allocation policy: highly attractive and disciplined
13 Capital allocation policy: highly attractive and disciplined 1) Invest in the 2) Dividends 3) Value 4) Share business accretive M&A buybacks Capex for organic Policy: Disciplined Consider growth and 40% annual payout approach to appropriateness of technological of basic EPS valuation share buybac
Slide 14: Accelerate strategic framework
14 Accelerate strategic framework Our Growth Drivers Distribution Excellence Vehicle Lifecycle Services Our Enablers Culture and Digital, Data & Efficient Scale Capabilities Analytics Operations Responsible Business
Slide 15: Inchcape: the leading automotive distributor
15 Inchcape: the leading automotive distributor Our competitive advantages: ▪ The global leading distributor: >40 markets across six continents ▪ Long-term relationships, and several new exciting partnerships, with global OEM brands ▪ A plug-and-play distribution platform: unique digital and data an
Slide 16: Vehicle Lifecycle Services: exploring new opportunities
16 Vehicle Lifecycle Services: exploring new opportunities Vehicle Lifecycle Value Three opportunities in focus Progress since 2021 CMD Timeline 1. 2021/ 1. bravoauto rolled-out to all 22 three Distribution regions B2C 2. Digital Parts 2023/ 2. Further developed our 24 Digital Parts Platform Platfor
Slide 17: Excellent progress across our Responsible Business pillars
17 Excellent progress across our Responsible Business pillars Planet People Places Practices ▪ Good progress towards ▪ Launched Inclusion & ▪ Partnerships supporting ▪ Active promotion of our our Scope 1 & Scope 2 Diversity and Women prosthetics charities in whistle-blower hotline CO2 emissions targ
Slide 18: Extending Inchcape's global leadership in automotive distribution
18 Extending Inchcape’s global leadership in automotive distribution [Accelerate strategy in action Inchcape acquires LatAm’s largest independent ▪ Step-up in scale of distribution business automotive distributor Significantly expands Inchcape’s position in highly attractive and fast growth markets
Slide 19: A strong and growing platform + deep OEM relationships
19 A strong and growing platform + deep OEM relationships Current Derco aggregate market share1 Years of distribution relationship markets 18% 46 4 17% 17% 40 3 14% 23 1 12% 22 3 16 2 15 3 14 3 14 2 2014 2016 2018 2020 2021 6 2 OEM brands 8 10 10 11 11 6 1 Current markets 4 4 4 4 4 2 1 1: Market sha
Slide 20: Complementary market footprint and brand portfolio
20 Complementary market footprint and brand portfolio Markets Derco Inchcape Typical brand structure Passenger vehicles Luxury brands ✓ Chile Premium brands ✓ Commercial vehicles Niche brands ✓ Peru Mainstream brands ✓ Colombia Entry-level brands ✓ ✓ Bolivia Inchcape present in 8 additional countrie
Slide 21: Strategic acquisition with attractive recurring synergies
21 Strategic acquisition with attractive recurring synergies… Proven track record of integration Organisation ▪ Efficiencies of combined organisation ▪ Indumotora in 2016 ▪ Back office (leveraging Inchcape’s global and regional platforms) ▪ Rudelman in 2018 ▪ Mercedes-Benz in 2019/20 ▪ Ditec in 2022
Slide 22: …and significant revenue synergy opportunities
22 …and significant revenue synergy opportunities Enhancing Distribution Excellence VLS opportunity Finance & Insurance Network benefits Digital & data Vehicles in operation2 ~1.4m Products % ~0.25m >5x 101 54 39 Inchcape Inchcape Americas Americas + Derco ▪ Leverage broader ▪ Leverage ▪ Leverage ▪
Slide 23: Consolidation: plotting the landscape of opportunity
23 Consolidation: plotting the landscape of opportunity Typical distribution markets1 Number of 17m 17m 17m independent distributors Middle East >170 OEM Other Latam & operated OEMs >500 Africa (NSCs) (potential) APAC >250 Inchcape Independent OEM distributors Partners Europe >220 (existing) Inchcap
Slide 24: Drivers of our financial performance
24 Drivers of our financial performance Distribution Excellence Vehicle Lifecycle Services Organic M&A New opportunities Revenue Volume Acquisitions & contract-wins bravoauto ▪ Exposure to higher growth markets ▪ Expand OEM relationships ▪ Used volumes & Aftersales ▪ Volumes c.10% below historic lev