Vertu Motors Plc · LSE:VTU
Vertu Motors — FY2024 Earnings Presentation
32 slides from Vertu Motors's earnings presentation, May 2024
Slide 1: Analyst and Investor Presentation: Year End Results
1 Analyst and Investor Presentation Year End Results For the year ended 29 February 2024
Slide 2: Vertu Advantages: our investment case
2 Vertu Advantages: our investment case Scale Benefits Customer Lifecycle Cost Optimisation Maximise Returns • Stable, experienced management • Full sales and aftersales offering to • In-house systems developed to • Active portfolio management with capacity to manage further increase capture of life
Slide 3: At A Glance
At A Glance © % ) & 6a fA frowns rovewe £4.7bN en 10.9% pat £34.6m "A E57.0m alte £15.2m 218,350" vero £54.0M Iwelve Months Endes (F¥23: £4.0bn) (Fv23: 11.2%) (F239; £32.5en) (F¥23: £54.3m) (F¥23: £11.9m) (F¥23: 195,551) (F¥23: Net Debt £75.3m) 29 February 2028 Fy24 47 Fy2t 25 Group FYB 28 Revenues
Slide 4: Strategic Update
4 Strategic Update Robert Forrester CEO
Slide 5: Consistent Group Strategy
5 Consistent Group Strategy Mission & To aim for every dealership To deliver an outstanding Vertu Motors to be the most admired Values to be the best retailer in their customer motoring experience and respected dealer group in the respective town or city through honesty and trust automotive industry
Slide 6: Sector Trends – Some near term uncertainty
6 Sector Trends – Some near term uncertainty Electrification Agency Distribution Governance • VETS (Vehicle Emissions Trading Scheme) • Some Manufacturers have confirmed they will • FCA review into automotive finance from January 2024 not follow agency distribution route announced January 2024 • 22%
Slide 7: Digitalisation – Scale advantages and tech leadership
7 Digitalisation – Scale advantages and tech leadership Omni-channel Development Data Pay Later Online Check-in • Online service bookings • Dedicated data team in place • Deferred payment solution for • Customer adoption of check-in optimisation increasing productivity service customers online for s
Slide 8: Financial Performance
8 Financial Performance Karen Anderson CFO
Slide 9: FY24 Financial KPIs
FY20 3.1 FY21 2.5 FY22 3.6 FY23 4.0 Revenue £’bn FY24 4.7 FY24 Financial KPI’s FY20 24 FY21 25 FY22 81 FY23 39 FY24 Adjusted PBT £’m 38 FY20 (5) FY21 48 FY22 44 FY23 54 FY24 57 Free Cash Flow £’m FY20 0.60 FY21 0 FY22 1.70 FY23 2.15 FY24 2.35 Dividend per share (pence) 9
Slide 10: Income Statement
10 Income Statement Year Ended 29 February Revenue: Record revenues achieved with £’m (unless otherwise stated) 2024 2023 % Change acquisitions/disposals leading to £404m rise and 7.9% growth in Core Group revenue Revenue 4,719.6 4,014.5 17.6% Gross profit 516.1 448.4 15.1% Gross Margin: New Vehicle
Slide 11: Profit Bridge – Adjusted PBT
11 Profit Bridge – Adjusted PBT Core Group Gross Profit Movement: +20.5m 70.0 13.2 (14.8) 60.0 10.0 (9.7) 50.0 7.0 (12.0) 40.0 4.8 30.0 20.0 39.3 37.8 10.0 0.0 FY23 Adjusted New vehicles New fleet & Used vehicles Aftersales Core Group Finance costs Acquisitions, FY24 Adjusted PBT commercial operatin
Slide 12: Management of cost headwinds
12 Management of cost headwinds 12 months ended 29 February Salary Cost Variance £’m £’m 2024 2023 Variance Variance % Additional headcount 5.1 Salary cost 220.0 214.2 5.8 2.7% NMW and rate increase 2.6 Vehicle and valeting costs 45.6 38.0 7.6 20.0% Investment in Accident Repair Centres 1.1 Marketin
Slide 13: Portfolio Development – Acquisitions and Disposals
13 Portfolio Development – Acquisitions and Disposals Helston Acquisition Other Growth Pruning • Acquisitions in FY23 dominated by • Rowes acquisition of Honda operations in • The Group ceased operations in several £115m Helston acquisition. Fully South West (Oct-23) locations as part of pruning act
Slide 14: Balance Sheet
14 Balance Sheet 29 Feb 2024 28 Feb 2023 £’m £’m • Defined benefit pension remains in surplus and fully funded on actuarial basis: no cash contributions. LDI, investment strategy Intangible assets 131.2 130.8 adopted to hedge risks Retirement benefit asset 2.5 3.2 • Property portfolio at depreciated
Slide 15: Record Free Cash Flow generated
15 Record Free Cash Flow generated Facilities Drawn Cash Flow 12 Months Ended £’m Net Debt at 29 February 2024 £’m £’m 29 February 2024 5 year acquisition facility (from December 2022) 93.0 43.3 Operating profit 56.0 20 year mortgage facility (from December 2020) 10.7 10.7 Depreciation, amortisation
Slide 16: Capital Allocation Discipline
16 Capital Allocation Discipline Full Year Tangible Net 1 2 FY24 Net Capital Repurchased Net Debt Gearing Dividend Cash Assets Expenditure Shares Cost £235.0m £54.0m 35% £20.4m £7.8m £7.5m Investment in growth Return to Shareholders Acquisitions and Growth Reinvest in Operations Dividends Share Buyb
Slide 17: Market Trends
17 Market Trends Robert Forrester CEO
Slide 18: Group Vehicle Sales Performance
18 Group Vehicle Sales Performance Like-for-Like Vehicle Volume year to 29 February 2024 Like-for-Like Vehicle Volume year to 29 February 2024 Core Group Gross Profit Per Unit £ FY24 Group Like-for- UK % Change Group Like-for- Volume 2 like % Change (SMMT) 1 like v SMMT % 1,920 New retail car and bi
Slide 19: Fleet & Commercial
19 Fleet & Commercial Like-for-Like Vehicle Volume year to 29 February 2024 Sales Channels in Fleet sector Sales Channels in Group Leasing/Contract Hire: • Group supplied nearly 45,000 vehicles in the fleet and Preferred Dealer Network to large leasing companies commercial channel in FY24 (c.41,000
Slide 20: Group Aftersales Performance – Gross profit up in all major channels
20 Group Aftersales Performance – Gross profit up in all major channels (L4L) Like-for-like Accident & Service Parts Fuel Forecourt Total FY24 v FY23 Smart Repair Revenue1 (£’m) 169.2 213.8 23.9 11.8 418.7 Revenue1 Change % 6.2% 11.0% 21.8% (15.1%) 8.6% Gross profit (£’m) 123.5 47.0 14.0 0.9 185.4 G
Slide 21: Service
21 Service Resource Benefits of Retention Vehicle Health Check (VHC) Service Sales Mix FY24 FY23 Core Group % +/- Number of Technicians < 3 years > 3 years £'m £'m Employed (L4L) Retail 77.0 72.7 5.9% Warranty 21.3 18.6 14.5% 35% 65% Internal 37.9 36.6 3.6% Total Labour Sales 136.2 127.9 6.5% £284 £
Slide 22: Parts & Accident Repair Centres
22 Parts & Accident Repair Centres Parts • Core Group year on year revenues up 11.0% and gross profit up £3.8m vs prior year • Parts sold through service gross profit up £2.0m vs prior year aided by VHC performance • Inhouse Retail Parts sales hub generating additional revenue for the Group through
Slide 23: Brand and Marketing – Top English dealership brand
23 Brand and Marketing – Top English dealership brand Prompted Brand Awareness of 1 57% in England 1 Source YouGov survey April 2024 EXCELR8 Motorsport Bristol Street Motors and Macklin Motors sponsor EXCELR8 Motorsport drivers in the The Group currently has British Touring Car Championship (BTCC) O
Slide 24: Current Trading & Outlook
24 Current Trading & Outlook Current Trading Outlook • Improving new vehicle supply, weak retail demand • March and April 2024 trading performance slightly ahead of Board’s expectations particularly for BEV • Like-for-like new retail vehicle volumes ahead of • ZEV target achievement likely to drive
Slide 25: Group Well Positioned
25 Group Well Positioned Group stable, well-capitalised and asset backed Firepower to further expand operations and scale Digitalisation gathering pace in impact, benefiting customers and productivity People-focus provides talented, motivated colleagues to serve customers Group excited to benefit fr
Slide 26: Definitions of key terminology
26 Definitions of key terminology Core: Comparison against FY2023 Dealerships that have traded for the full period of March 2022 to February 2023 and March 2023 to February 2024 Like-for-like: Dealerships that have comparable trading periods in two consecutive financial years, only the comparable pe
Slide 27: New Retail Vehicle Trends
27 New Retail Vehicle Trends H1 H2 H1 H2 H1 H2 H1 H2 FY2021 FY2021 FY2022 FY2022 FY2023 FY2023 FY2024 FY2024 Selling price per unit [1] (£) 19,789 19,980 21,423 22,539 24,062 24,191 25,906 25,338 Gross profit per unit [1] (£) 1,436 1,714 1,688 2,205 2,105 2,246 2,170 2,019 Margin (Group) [1] 6.7% 7.
Slide 28: Fleet and Commercial Vehicle Trends
28 Fleet and Commercial Vehicle Trends H1 H2 H1 H2 H1 H2 H1 H2 FY2021 FY2021 FY2022 FY2022 FY2023 FY2023 FY2024 FY2024 Selling price per unit (£) 21,494 23,494 23,850 24,874 24,109 25,730 27,085 28,196 Gross profit per unit (£) 679 834 878 1,046 988 1,049 1,160 1,296 Margin (Group) 3.8% 4.1% 4.2% 4.
Slide 29: Used Vehicle Trends
29 Used Vehicle Trends H1 H2 H1 H2 H1 H2 H1 H2 FY2021 FY2021 FY2022 FY2022 FY2023 FY2023 FY2024 FY2024 Selling price per unit (£) 15,141 15,454 16,194 19,951 19,861 20,328 21,580 20,425 Gross profit per unit (£) 1,386 1,458 1,657 1,844 1,560 1,468 1,535 1,296 Margin (Group) 9.2% 9.4% 10.2% 9.2% 7.9%
Slide 30: Vehicle Volumes Sold
30 Vehicle Volumes Sold FY24 vs FY23 FY24 vs FY23 Total units sold +/- % Like-for-like units sold +/- % 25,470 26,949 Used Trade +5.2% Used Trade +13.5% 26,799 30,581 81,336 82,561 Used Retail Used Retail +4.7% 79,691 (2.0%) 86,437 23,050 +13.5% 23,495 New Fleet & Agency Car New Fleet & Agency Car 2
Slide 31: Dealership Portfolio
31 Dealership Portfolio 188 sales outlets Ford Total Group 21 Bristol Street Motors 20 Macklin Motors 1 Vertu Motors Carrs Vauxhall 16 15 1 Nissan 12 10 2 Hyundai 11 8 3 Peugeot 11 9 2 Volume Renault 8 7 1 Citroen 7 7 89 MG SEAT/Cupra 4 3 3 3 1 Skoda 3 3 Kia 3 1 2 Mazda 2 1 1 Total Volume 101 86 13
Slide 32: Disclaimer
32 Disclaimer This presentation contains forward looking statements. Although the Group believes that the estimates and assumptions on which such statements are based are reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond the Group’s control. Th