Inchcape Plc · LSE:INCH
Inchcape — H1 2005 Earnings Presentation
21 slides from Inchcape's earnings presentation, August 2005
Slide 1: Peter Johnson, Group Chief Executive
Peter Johnson Group Chief Executive
Slide 2: Australia
Australia Operating profit* £16.1m; up 13.4% • Market up by 5.4% on last year’s record • Subaru outperformed the market – Achieved highest ever market share of 3.8% – Strong Liberty and Impreza sales • Melbourne Retail continues to perform well – Increased new and used unit sales – Higher aftersales
Slide 3: Australia continued
Australia continued Operating profit* £16.1m; 13.4% • Sydney Retail restructure complete – Return to profitability • AutoNexus has grown profits – Further investment as customer base develops * Before exceptional items
Slide 4: Belgium
Belgium Operating profit* £8.3m; up 3.8% • Market down by 0.7% • Toyota/Lexus market share increased to 5.0% – RAV4, Yaris and Hilux in run out • Supply constraints resolved • Introduction of diesel derivatives – Passenger car market over 70.0% diesel * Before exceptional items
Slide 5: Greece
Greece Operating profit* £7.8m; down 6.0% • Market down 7.2% • Toyota/Lexus market share at 8.5% – Various Toyota models in run out – No diesel benefit – Athens network reorganisation • Tough trading conditions in Athens and Salonica – Slow build up of sales for new dealership • Costs tightly contro
Slide 6: Hong Kong
Hong Kong Operating profit* £13.0m; up 10.2% • Consumer confidence still recovering • Profits up 10.2% including one off property profit of £0.9m • Adjusted margins of 10.6% compared to 9.9% in 2004 • Toyota/Lexus achieved market share of 34.4% – Corolla, Alphard and Hiace supply constraints * Befor
Slide 7: Singapore
Singapore Operating profit* £34.6m; up 21.8% • Operating margins up at 9.4% from 8.4% in 2004 • Market up 18.2% – Increased levels of COEs – Over 19,000 vehicles sold for Toyota/Lexus in H1 • Launch of Lexus GS 300 and higher taxi sales • Toyota/Lexus market share 29.9% * Before exceptional items
Slide 8: Singapore continued
Singapore continued Operating profit* £34.6m; up 21.8% • Enlarged Toyota car parc • Continued investment in aftersales infrastructure – Two further satellite centres – Capacity increased by over 5.0% • Customer service at record levels * Before exceptional items
Slide 9: United Kingdom
United Kingdom Operating profit* £15.0m; up 7.9% • UK Retail achieved encouraging like for like profit growth – In a more difficult market • Improved business processes – Used car sales up 6.8% – Higher finance and aftersales contribution • Improvement in operating margins – Positive impact of recen
Slide 10: United Kingdom continued
United Kingdom continued Operating profit* £15.0m; up 7.9% • Inchcape Automotive – Some disruption caused by workshop refurbishment and production efficiency issues – Focus on strengthening management and improving processes • Inchcape Fleet Solutions performed well – Development of Fleet Management
Slide 11: Other
Other Operating profit* £14.3m; down 5.3% • Finland – Profitability declined in the period • Baltics – Promising start to the year • Poland – Market down resulting in slow start for new BMW businesses * Before exceptional items
Slide 12: Other continued
Other continued Operating profit* £14.3m; down 5.3% • Balkans – Encouraging growth in operating profits, up 43.8% on last year – Increased sales volumes to over 3,400 units – High growth rate markets, particularly Romania • Toyota in Guam, Subaru in New Zealand and BMW in Chile all increased sales a
Slide 13: Future growth plans
Future growth plans • Focused on: – Expansion with selected manufacturer partners – In, or adjacent, to markets where we already have a scale business – Creating vertically integrated import and retail businesses, or scale retail opportunities in contiguous territories • Well proven business model a
Slide 14: Core market growth plans
Core market growth plans • Expansion opportunities in UK, Australia and Greece • Largest independent retailer in the UK for Mercedes-Benz – Represent c.8.0% of their national sales volumes – Expected to sell c.6,000 new units in 2006 • Further development with BMW – New facilities in Croydon and Tun
Slide 15: Core market growth plans continued
Core market growth plans continued • Australia – Proven retail expertise • Expect to sell c.14,000 units in Sydney and Melbourne in 2005 – Broaden Retail footprint • Awarded Hyundai franchise for the city area of Sydney • Multi-franchise business along the East Coast • Greece – Will improve current
Slide 16: New market growth plans
New market growth plans • Eastern Europe – Vertically integrated Import and Retail business created for Jaguar and Mazda in Latvia, similar to that achieved in Estonia • Balkans – Continued investment in Retail – Significant expansion planned in Romania
Slide 17: New market growth plans continued
New market growth plans continued • Russia – Scale retail opportunities in Moscow or St Petersburg • China – Market increasingly attractive • Far greater focus from OEMs on developing quality retail networks
Slide 18: Future growth strategy
Future growth strategy • Future of Group aligned to Retail capabilities – Current world class performance – International recruitment • Confident of delivering future growth strategy
Slide 19: Prospects
Prospects • Australia – Market expected to remain strong for remainder of 2005 – Subaru’s model line up to be strengthened further – Outlook remains positive • Belgium – Market conditions expected to be little changed in H2 • Greece – Market will continue to be: • Lower than 2004 • Extremely competi
Slide 20: Prospects continued
Prospects continued • Singapore – Trading conditions are strong – More COEs issued in 2005 than 2004 • UK – Full year market forecast to fall between 4.0% and 5.0% – UK Retail’s positive start to the year expected to continue • Other – Full year anticipated to be better than 2004 • Confident that 20
Slide 21: Inchcape
Inchcape Interim results presentation • 1 August 2005