Slide 1: Pendragon PLC 2020 Half Year Results
PENDRAGON PLC 2020 HALF YEAR RESULTS 29TH SEPTEMBER 2020
Slide 2: Agenda
Agenda 1. Introduction Bill Berman 1. H1 FY20 COVID-19 update & performance overview Bill Berman 3. Group strategy recap Bill Berman 2. Financial review Mark Willis 4. Summary & outlook Bill Berman 2
Slide 3: Introduction
Introduction • Outstanding response from team Pandemic • Demonstrated strong operational resilience response • Developed capabilities and streamlined the business First-half • H1 underlying loss before tax £31.0m (H1 FY19 loss: £32.2m) performance • Closing net debt £46.0m (FY19: £119.7m) • Strong p
Slide 4: H1 FY20 COVID-19 update & performance overview
H1 FY20 COVID-19 update & performance overview 4
Slide 5: Managing the pandemic (1/2)
Managing the pandemic (1/2) Context • Government mandated closure of all UK dealerships from 23rd March until 1st June • Ensure health and wellbeing of customers and associates Objectives • Protect cash position given trading impacts • Safely reopen locations at the beginning of June • Rapid and dec
Slide 6: Managing the pandemic (2/2)
Managing the pandemic (2/2) • 20 service centres remained open, initially to support key workers, up to 125 opened during May • Group accelerated development of its digital and fulfilment capabilities: ― Online payment functionality ― Click & collect ― Home delivery Actions (cont…) • Pinewood and PV
Slide 7: Divisional H1 operating highlights (1/2)
Divisional H1 operating highlights (1/2) • Significant changes to operating model to provide safe physical environments • Rapid development of digital & fulfilment capabilities • Pinewood’s revenue proved resilient, down 4.5% • Materially impacted by lock-down period • Discount offered to support cu
Slide 8: Divisional H1 operating highlights (2/2)
Divisional H1 operating highlights (2/2) • Significant performance improvement in Car • Pendragon Vehicle Management (PVM) saw Store prior to pandemic through improved a reduction to its fleet size of 2.3% vs H1 operating controls and stock management FY19 • Improved gross margins and operating cost
Slide 9: Strong performance in July & August
Strong performance in July & August Underlying PBT July and August, 2019 vs. 2020 £m +19 • Material year on year profitability improvement in the first two months of H2 FY20 7 • Gross margin for the two month period of 11.9%, up from 10.2% in 2019, used gross margin rates at 8.9% vs. 6.5% • Signific
Slide 10: Group Strategy recap
Group Strategy recap 10
Slide 11: Our vision
Our vision “Transform automotive retail through digital innovation and operational excellence” 11
Slide 12: Strategy
Strategy 1. Unlock value in 2. Grow and 3. Disrupt standalone Franchised UK Motor diversify Pinewood used cars • Accelerate digital • Deliver material • Re-brand innovation existing order • Differentiate value • Drive operational pipeline proposition excellence & best • Geographic • Scale the physic
Slide 13: Pendragon's advantages
Pendragon’s advantages 1. Unlock value in 2. Grow and 3. Disrupt Franchised UK diversify standalone used Strategic Motor Pinewood cars pillars • Leaner cost base & improved efficiency • Advanced digital • Vertically integrated • Intragroup supply capabilities assets and scale for standalone • Contro
Slide 14: Financial targets
Financial targets Delivered from an Transformative plan to Targeting a c.2% Capital expenditure improved cost base restore and improve underlying PBT margin averaging c.£45m p.a. following FY20 underlying profitability by 2025 from 2021 – 2025 restructuring PBT Performance, FY19 Actual PBT Performan
Slide 15: Financial review
Financial review 15
Slide 16: Key metrics – H1 FY20
Key metrics – H1 FY20 Underlying Estimated Revenue Gross Net debt COVID-19 loss before profit profit tax impact £1,218.3m £135.3m -£31.0m £46.0m £44.1m -50.4% -42.5% +3.7% -£73.7m 16
Slide 17: Financial summary: Income statement
Financial summary: Income statement Income Statement (£m) • Revenue decline of 50.4% driven by COVID-19 pandemic and H1 2020 H1 2019 % Change business disposals and closures Revenue 1,218.3 2,455.6 -50.4% • Strong gross margins, driven by improved used car margin performance Gross Profit 135.3 235.2
Slide 18: Pandemic impact on financial performance
Pandemic impact on financial performance Underlying PBT by Quarter, 2019 vs. 2020 Estimated impact on H1 Underlying PBT, 2020 £m £m 13.1 -2.3 -2.3 -2.8 44.1 -31.0 2019 2020 -26.4 -29.4 H1 2020 Estimated COVID-19 Impact Estimated H1 Q1 Q2 H1 provision Underlying PBT 2020 Adjusted Underlying PBT • Pre
Slide 19: Financial summary: Cashflow
Financial summary: Cashflow Summary Cashflow (£m) • Net debt reduction of £58.3m vs HY19 (FY19: £119.7m, down £73.7m) H1 2020 H1 2019 Underlying Operating Loss (10.8) (10.7) • Net debt reduction benefiting from timing benefits Depreciation and Amortisation 22.2 22.6 ― Debtor reductions c.£45m Share
Slide 20: Financial summary: Balance sheet
Financial summary: Balance sheet Balance Sheet (£m) Jun-20 Dec-19 Jun-19 • Reduction in property from sale & leaseback of Porsche Stockport Property 230.7 237.8 233.9 • Plant and equipment reduction from reduced CapEx and ongoing depreciation Plant & Equipment 215.5 231.3 223.9 Goodwill & Intangible
Slide 21: Summary & outlook
Summary & outlook 21
Slide 22: Summary & outlook
Summary & outlook • Strong year-on-year improvement in underlying profit expected in Q3 • Uncertainty remains for Q4: ― New car market expected to be challenging ― Potentially weaker economy post government support removal Summary & ― Risk of further COVID-19 outbreaks and further lock-down outlook
Slide 23: Appendix – Divisional financial summary
Appendix – Divisional financial summary 23
Slide 24: Franchised UK Motor
Franchised UK Motor Franchised UK Motor (£m) % Change H1 2020 H1 2019 % Change LFL Revenue 1,067.1 1,999.2 -46.6% -44.5% Gross Profit 108.9 182.2 -40.2% -39.5% Operating Costs (127.0) (189.9) +33.1% +31.3% Operating Loss (18.1) (7.7) -135.1% -1,084.6% Gross Margin % 10.2% 9.1% +1.1% +0.9% Operating
Slide 25: Software - Pinewood
Software - Pinewood Software - Pinewood (£m) H1 2020 H1 2019 % Change Revenue 8.5 8.9 -4.5% Gross Profit 7.8 7.9 -1.3% Operating Costs (1.9) (1.4) -35.7% Operating Profit 5.9 6.5 -9.2% Gross Margin % 91.8% 88.8% +3.0% Operating Margin % 69.4% 73.0% -3.6% 25
Slide 26: Car Store
Car Store Car Store (£m) % Change H1 2020 H1 2019 % Change LFL Revenue 43.1 170.8 -74.8% -41.4% Gross Profit 2.9 5.3 -45.3% -6.2% Operating Costs (4.6) (24.4) +81.1% +62.6% Operating Loss (1.7) (19.1) -91.1% -82.4% Gross Margin % 6.7% 3.1% +3.6% +2.6% Operating Margin % -3.9% -11.2% +7.3% +8.7% 26
Slide 27: Leasing – Pendragon Vehicle Management
Leasing – Pendragon Vehicle Management Leasing – Pendragon Vehicle Management (£m) H1 2020 H1 2019 % Change Revenue 31.1 42.8 -27.3% Gross Profit 6.7 8.4 -20.2% Operating Costs (2.0) (2.1) +4.8% Operating Profit 4.7 6.3 -25.4% Gross Margin % 21.5% 19.6% +1.9% Operating Margin % 15.1% 14.7% +0.4% 27
Slide 28: US Motor
US Motor US Motor (£m) % Change H1 2020 H1 2019 % Change LFL Revenue 68.5 233.9 -70.7% -32.1% Gross Profit 9.0 31.4 -71.3% -33.6% Operating Costs (10.6) (28.1) +62.3% +15.2% Operating Loss (1.6) 3.3 -148.5% -162.5% Gross Margin % 13.1% 13.4% -0.3% -0.3% Operating Margin % -2.3% 1.4% -3.7% -3.2% 28