Slide 1: 2010 Results Presentation
2010 Results Presentation 8th March 2011 Powering ahead 1
Slide 2: André Lacroix, Group Chief Executive
André Lacroix Group Chief Executive Powering ahead 2
Slide 3: Robust earnings growth
Robust earnings growth Revenue Operating profit* Return on sales* 260.0 240.5 5.0 225.5 6.4 6,260 3.8 3.8 4.0 6.2 210.0 3.1 5,885 175.2 6.0 3.0 £m 5.8 160.0 % £m 5,584 5.6 2.0 5.4 110.0 1.0 5.2 5.0 60.0 0.0 2008 2009 2010 2008 2009 2010 2008 2009 2010 +5.4% +28.7% +0.7ppt Profit before tax* Underlyi
Slide 4: Revenue growth ahead of expectations
Revenue growth ahead of expectations Sales H1 Revenue YoY% H2 Revenue YoY% Full year YoY% 11.1% ( 0 .2 ) % Group 5 .4 % Australasia 54.0% 18 .4 % 3 5 .1% North Asia 48.7% 2 9 .1% 3 7 .9 % South Asia (37.3)% ( 2 5 .1) % ( 3 2 .2 ) % UK 10.2% ( 6 .2 ) % 1.9 % Europe 4.6% ( 3 1.6 ) % ( 13 .4 ) % Russia
Slide 5: Strong operational leverage
Strong operational leverage 2010 2009 ∆ £m £m Revenue 5,885.4 5,736.7 2.6% Gross profit 880.9 853.2 3.2% Gross margin 15.0% 14.9% 0.1ppt Costs (655.4) (668.6) (2.0)% Operating profit* 225.5 184.6 22.2% ROS 3.8% 3.2% 0.6ppt Interest & JVs (11.5) (21.2) (45.8)% PBT* 214.0 163.4 31.0% Cash generated fr
Slide 6: Group margin increased by 60 BPS
Group margin increased by 60 BPS Return on sales* 2009 & 2010 Change 3.2% Group +60 BPS 3.8% 5.0% Australasia +40 BPS 5.4% 6.4% North Asia +150 BPS 7.9% 10.2% South Asia -50 BPS 9.7% UK 2.2% +40 BPS 2.6% 2.8% Europe +30 BPS 3.2% Russia and 1.0% +270 BPS Emerging 3.7% Markets 2009 2010 Scale position
Slide 7: Cost restructuring update
Cost restructuring update 590 Positions removed 15 Sites closed • 410 in UK • 10 in UK • 50 in Singapore • 1 in Belgium • 30 in Belgium • 4 in Rest of the world • 20 in Greece • 80 in Rest of the world Gross cost reductions of £30m expected in 2011 7
Slide 8: Confidence in the Group's earnings growth
Confidence in the Group’s earnings growth • Stronger than expected 2010 PBT performance • Strong cash conversion: improved financial position • Board committed to a progressive dividend policy: • Reflect underlying earnings generation • Will take account of growth opportunities, financial position a
Slide 9: Financial Results
Financial Results John McConnell Group Finance Director Powering ahead 9
Slide 10: Summary P&L
Summary P&L 2010 2009 Change £m £m % Sales 5,885.4 5,583.7 5.4% Operating profit* 225.5 175.2 28.7% Net financing costs 9.8 20.8 (52.9)% Profit before tax* 214.0 155.1 38.0% Tax rate* (%) 29.1 28.0 1.1ppt Basic adjusted EPS (p)** 32.0p 27.1p 18.1% Dividend per share (p) 6.6p - - 38% increase in prof
Slide 11: Segmental performance
Segmental performance 2010 2009 Change % £m £m Sales Distribution 2,455.9 2,427.0 1.2% Retail 3,429.5 3,156.7 8.6% 5,885.4 5,583.7 5.4% Operating profit* Distribution 170.5 137.6 23.9% Retail 77.6 56.4 37.6% Central costs (22.6) (18.8) 20.2% 225.5 175.2 28.7% Operating margin* Distribution 6.9% 5.7%
Slide 12: Group: underlying trading profit
Group: underlying trading profit 9.2 7.3 250.0 30.1 (7.5) 225.0 14.1 200.0 17.3 2 4 8 .3 2 4 8 .1 £m 175.0 (19.8) 19 8 . 2 (0.8) 150.0 2009* South Asia Europe Australasia North Asia Russia & EM UK 2010 underlying Romanian land Australian 2010 reported impairment property sale All numbers at actual e
Slide 13: Distribution: underlying trading profit
Distribution: underlying trading profit 2010 Trading margins 2010 reported 170.5 Group reported: 6.9% +120 BPS Australian property sale 7.3 Romanian land impairment (7.5) 2010 underlying 170.7 Group underlying: 7.0% +120 BPS Russia & EM 21.4 Russia and Emerging Markets: 10.3% +830 BPS UK 2.6 UK: 17.
Slide 14: Retail: underlying trading profit
Retail: underlying trading profit 2010 Trading margins 2010 77.6 Group: 2.3% +50 BPS Russia & EM 8.7 Russia and Emerging Markets: 1.6% +90 BPS UK 6.6 UK: 2.4% +30 BPS Australasia 3.4 Australasia: 3.9% - BPS Europe 2.5 Europe: 0.5% +130 BPS 2009 56.4 £m 25.0 50.0 £m 75.0 100.0 All numbers at actual e
Slide 15: Regional analysis: underlying trading profit
Regional analysis: underlying trading profit 2009 2010 Russia and Emerging Markets Russia and Emerging 5% Australasia Markets 16% Australasia 19% 22% UK 24% North Asia £198.2m 10% UK £248.3m 22% North Asia 14% Europe 14% South Asia Europe South Asia 28% 11% 15% * Note: underlying trading profit excl
Slide 16: Cash flow
Cash flow Operating cash flow 2010 2009 Free cash flow 2010 2009 Net cash 2010 2009 £m £m £m £m £m £m Operating profit** 225.5 175.2 Operating cash flow 274.3 336.7 Free cash flow 192.9 192.7 Depreciation / amortisation 41.5 35.6 Net interest (10.2) (32.9) Share issue 0.2 234.3 Working capital 38.6
Slide 17: Net financing costs
Net financing costs 2010 2009 £m £m Bank and loan interest 1.1 (4.2) Stock holding interest (13.2) (9.2) Interest on private placement notes (3.7) (7.8) Pension interest net 0.7 5.6 Other including capitalised interest adj. 3.3 (6.1) Interest excluding mark to market (11.8) (21.7) FV on private plac
Slide 18: Impact of currency on operating profit
Impact of currency on operating profit* Full year 2010 2009 @ actual 2010 @ 2009 2010 @ actual Impact exchange rates actual rates exchange rates Australasia 37.9 53.1 62.5 9.4 Europe 28.6 29.0 27.8 (1.2) North Asia 19.9 33.7 34.0 0.3 South Asia 55.9 33.6 36.1 2.5 Russia and EM 5.0 33.2 31.8 (1.4) To
Slide 19: Exceptional items
Exceptional items £m 2010 Cash Non cash Asset impairment (4.0) - (4.0) Goodwill impairment (5.5) - (5.5) Restructuring costs (12.4) (9.0) (3.4) TOTAL (21.9) (9.0) (12.9) All numbers at actual exchange rates 19
Slide 20: Guidance – Full Year 2011
Guidance – Full Year 2011 • Tax rate c.29% • Interest cost £12-£15m (excl. mark to market) • Capital expenditure £135m • Net cash c.£100m 20
Slide 21: Business update and outlook
Business update and outlook André Lacroix Group Chief Executive Powering ahead 21 21
Slide 22: Our vision and strategy remain firmly in place during the recovery
Our vision and strategy remain firmly in place during the recovery To be the world’s most customer centric automotive retail group STRENGTHEN EXPAND Superior customer value Consolidation in high proposition through margin / high growth Inchcape Advantage areas 22
Slide 23: Primary focus on organic growth through Top Five Priorities
Primary focus on organic growth through strong operational discipline on Top Five Priorities Differentiated strategy Commercial initiatives to grow revenues ahead of competitors Cash initiatives to grow profit and operating cash faster than revenue Balanced focus on commercial initiatives and cash i
Slide 24: 2011 Outlook
2011 Outlook • Continuation of an uneven global recovery • New cars in 2011 • Continued growth in Hong Kong, Australia, New Zealand, South America, Africa, smaller Asian markets and Finland • Recovery in Russia and the Baltics • Lower demand in Greece, Singapore, UK and Belgium • Used car demand wil
Slide 25: UK Retail
UK Retail Strong profit and operating margin progression 2011 TIV est. FY estimate: 1.9m, -6% vs. 2010 2010 • Continued to grow market share through superior Inchcape Advantage Customer 1st processes and capitalised on strong new achievements product launches. • Further developed Aftersales with pro
Slide 26: Europe
Europe Margin progress despite challenging conditions Belgium Greece 2011 TIV est. FY estimate: 567k, -5% vs. 2010 FY estimate: 120k, -15% vs. 2010 2010 • Customer-centric handling of Toyota recall refreshed database • Customer-centric handling of Toyota recall refreshed database and achievements an
Slide 27: South Asia
South Asia Resilient 9.7% operating margin despite significant market decline Singapore 2011 TIV est. FY estimate: 40k, -24% vs. 2010 2010 • Launch of Toyota Wish, Crown, Altis facelift, Camry Hybrid, Lexus RX270 and the Suzuki Kizashi achievements • Leading hybrid segment growth with Toyota and Lex
Slide 28: North Asia
North Asia Toyota the fastest growing brand in 2010 Hong Kong 2011 TIV est. FY estimate: 40k, +7% vs. 2010 2010 • Increased market share as we leveraged industry leading Hybrid technology and new product launches: Toyota Prado, Previa, achievements Noah, Ractis, Mazda6 and Jaguar XJ • Established Le
Slide 29: Australasia
Australasia Strong earnings recovery Australia Distribution Australia Retail 2011 TIV est. FY estimate: 1,040k, +0.5% vs. 2010 2010 • Maintained market share of 3.9% • Strong operating profit achievements • New Subaru brand campaign: All 4 the Driver • Strong performance on New and Used vehicle sale
Slide 30: Russia
Russia Well positioned for the market recovery 2011TIV est. FY estimate: 2.2m, +15% vs. 2010 2010 achievements • Drove customer service improvements with Inchcape Advantage process roll-out • Focus on growing Aftersales business, reaching every customer via Reminder Call Program and offering every v
Slide 31: Emerging Markets – Eastern Europe
Emerging Markets – Eastern Europe Strong profit increase despite uneven market recovery The Baltics The Balkans Poland 2011 TIV est. FY estimate: 29k, +16% vs. 2010 FY estimate: 129k, flat vs. 2010 Luxury FY estimate: 19.5k, flat vs.2010 2010 achievements • Return to profitability despite weak marke
Slide 32: Emerging Markets – Rest of the world
Emerging Markets – Rest of the world Strong profit increase despite uneven market recovery South America Africa China 2011 TIV est. Chile: 320k, +10% vs. 2010 Data not available 13.4m, +12.7% vs. 2010 Peru: 132k, +10% vs. 2010 2010 achievements • Strong earnings recovery as we benefitted • Record pr
Slide 33: China: Roll out of our expansion strategy
China: Roll out of our expansion strategy Lexus Shanghai – Jun 09 Goal 20 sites by 2016 in 4/5 regional markets Toyota Shaoxing – Jan 07 Lexus Shaoxing – Jan 08 Investment Approximately £10m per site Jaguar Land Rover Shaoxing – Dec 10 (showroom) (3S site under construction) Brands Inchcape luxury a
Slide 34: Capex investment in 2011
Capex investment in 2011 • Capacity expansion £57m • Chile • Peru • Russia • Poland • Greenfield expansion £26m • JLR Shaoxing • Porsche UK • Standards upgrade £16m • UK • Singapore • IT Upgrades £19m • Maintenance capex £17m Leveraging our strong balance sheet to strengthen our competitive position
Slide 35: Global footprint uniquely positions Inchcape for future growth
Global footprint uniquely positions Inchcape for future growth Inchcape in 21 fastest-growing economies moving forward Inchcape % % Inchcape GDP growth TIV growth Car parc markets Inchcape Trading CAGR CAGR growth Revenue profit 2010-15 2010-15 CAGR 2006-10 2006-10 (Source: IMF) (Source: Global 2010
Slide 36: A unique position in the global car industry
A unique position in the global car industry • Proven business model in global premium car market • Differentiated Customer 1st strategy with operational discipline to grow revenue ahead of competition and profit and operational cash faster than revenue • Well positioned to take advantage of excitin
Slide 37: Powering ahead
® Inchcape Powering ahead
Slide 38: Appendices
Appendices Powering ahead 38
Slide 39: Definitions
Appendix V – Definitions Definitions Like-for-like The following are excluded from like-for-like sales: 1. Businesses that are acquired, from the date of acquisition until the 13th month of ownership 2. Businesses that are sold or closed 3. Retail centres that are relocated from the date of opening
Slide 40: Broad geographic spread – truly international
Broad geographic spread – truly international United Kingdom (MLP) R Australasia South Asia North Asia Europe 36.1% of ’10 Group Revenue 17.5% of ’10 Group Revenue 6.3% of ’10 Group Revenue 7.3% of ’10 Group Revenue 14.8% of ’10 Group Revenue 22.5% of ’10 Group Trading 25.2% of ’10 Group Trading 14.
Slide 41: Distribution: trading profit, margin
Distribution: trading profit, margin Trading profit* Trading margin* 2010 2009 2010 2009 £m £m % % Australasia 47.9 26.7 7.3 5.6 Europe 26.9 30.2 3.8 3.8 North Asia 34.0 19.9 7.9 6.4 South Asia 36.1 55.9 9.7 10.2 UK 6.5 3.9 17.6 13.0 Russia and Emerging Markets 19.1 1.0 7.4 0.4 170.5 137.6 6.9 5.7 *
Slide 42: Retail: trading profit, margin
Retail: trading profit, margin Trading profit* Trading margin* 2010 2009 2010 2009 £m £m % % Australasia 14.6 11.2 3.9 3.9 Europe 0.9 (1.6) 0.5 (0.8) UK 49.4 42.8 2.4 2.1 Russia and Emerging Markets 12.7 4.0 1.6 0.7 77.6 56.4 2.3 1.8 * Before exceptional items All numbers at actual exchange rates 42
Slide 43: Disclaimer
Disclaimer The information and opinions contained in this presentation are provided as at the date of the document. Certain statements in this presentation, particularly those regarding the future prospects of Inchcape plc (“Inchcape”), returns, pricing, acquisitions, divestments, industry growth or
Slide 44: Powering ahead
Powering ahead © Inchcape 2010. All rights reserved. Proprietary and confidential information. No unauthorised copying or reproduction. Inchcape and the Inchcape logo are the registered trademarks of the Inchcape Group. The information contained in this presentation has been obtained from company so