Inchcape Plc · LSE:INCH
Inchcape — Investor Presentation (July 2022)
23 slides from Inchcape's investor presentation, July 2022
Slide 1: Investor Presentation July 2022
INVESTOR PRESENTATION July 2022
Slide 2: Inchcape: Group overview
Inchcape 2 Inchcape: Group overview Our business Our differentiators Our financials Distribution focus Global scale ROCE c.90% of >40 markets profit 6 continents >25% Vehicles & Parts Technology Cash conversion Strong automotive brands Digital & Analytics leader >60% Leading global automotive distri
Slide 3: First half 2022 headline KPIs
Inchcape 3 First half 2022 headline KPIs Topline Profitability Cash Shareholders Revenue Operating margin Free Cash Flow Adjusted EPS £3.9bn 5.2% (1H21: 3.8%) £224m 35.0p +12% £184m £439m 7.5p Interim +17% YoY Organic growth (YoY%) PBT Net cash Dividend per share Figures are stated before adjusting
Slide 4: Considerable opportunities for an ambitious Inchcape
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, unders
Slide 5: Distribution deals have accelerated over the past 5 years
Inchcape 5 Distribution deals have accelerated over the past 5 years 2010 2016 2017 2018 2019 2020 2021 Today Number of 0 2 2 3 3 5 6 deals Revenue - c.£400m c.£100m c.£250m c.£150m c.£200m c.£350m added New OEMs - 1 2 2 1 0 5 New markets - 3 0 3 2 2 3
Slide 6: Derco Acquisition
DERCO ACQUISITION
Slide 7: Derco: at a glance
Inchcape 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 £2.0bn 329 new vehicles revenue (2021) locations; distributed ~30% operated by Derco2 Chile Peru Colom
Slide 8: Inchcape + Derco: a highly strategic and accretive acquisition
Inchcape 8 Inchcape + Derco: a highly strategic and accretive acquisition 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
Slide 9: Proposed acquisition of Derco: deal summary
Inchcape 9 Proposed acquisition of Derco: deal summary ▪ Derco: LatAm’s largest independent automotive distributor ▪ A family-founded and family-owned private company ▪ Derco 2021 revenue of £2.0bn; LTM1 revenue: £2.2bn ▪ Acquisition for £1.3bn (enterprise value). c.6x1 EV/EBITDA based on a normalis
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: Inchcape: well-positioned to deliver significant value
Inchcape 11 Inchcape: well-positioned to deliver significant value Attractive Consolidation shareholder returns opportunities Margin expansion Dividend payout: 40% Strong organic growth We are the leader with c.1% Track record of share share of global distribution buybacks Leverage our global scale
Slide 12: Appendix
Inchcape 12 APPENDIX
Slide 13: Accelerate strategic framework
Inchcape 13 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 14: Inchcape: the leading automotive distributor
Inchcape 14 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 an
Slide 15: Capturing more of the lifetime value of a vehicle
Inchcape 15 Capturing more of the lifetime value of a vehicle Vehicle Lifecycle Value Three opportunities in focus Timeline New vehicle import 1. 2021/ 22 Digital first, multi-brand, Lifetime 1st sale used car platform profits % B2C 25% 2. Digital Parts Platform 2023/ 75% 2nd sale 24 Digital platfor
Slide 16: A strategic Responsible Business framework
Inchcape 16 A strategic Responsible Business framework Planet People Places Practices ▪ Mapping the risks and ▪ Prioritising safety ▪ Positively impacting ▪ Strengthening our opportunities of and wellbeing local communities governance policies, climate change ▪ Creating an inclusive and ▪ Supporting
Slide 17: Extending Inchcape's global leadership in automotive distribution
Inchcape 17 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
Slide 18: A strong and growing platform + deep OEM relationships
Inchcape 18 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: M
Slide 19: Complementary market footprint and brand portfolio
Inchcape 19 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
Slide 20: Strategic acquisition with attractive recurring synergies
Inchcape 20 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 ▪ Dite
Slide 21: ...and significant revenue synergy opportunities
Inchcape 21 …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 ▪ Le
Slide 22: Impact on Inchcape Group revenue
Inchcape 22 Impact on Inchcape Group revenue Regional mix Business mix 36% 19% 15% 11% 76% 69% 15% 1.1 12% 51% 40% 31% 24% Inchcape Derco Inchcape Inchcape Derco Inchcape 2021A1 2021A 2 Enlarged 2021A 1 2021A 2 Enlarged Europe + UK Asia Australasia Americas & Africa Distribution Retail 1: 2021 reven
Slide 23: Consolidation: plotting the landscape of opportunity
Inchcape 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