Slide 1: 2012 Interim Results
2012 Interim Results 31 July 2012 Engineered for Growth
Slide 2: Interim Results – André Lacroix, Group Chief Executive
2012 Interim Results André Lacroix Group Chief Executive Engineered for Growth
Slide 3: Robust revenue and earnings growth
Robust revenue and earnings growth Revenue Operating profit* Return on sales* 3.2 5.0 4.5 3,095 3,109 4.3 150.0 138.4 4.0 3.1 140.0 4.0 2,930 125.7 3.0 130.0 123.7 3.1 2.9 120.0 3.0 £bn % £m 2,786 110.0 2.8 2.0 100.0 2.7 87.4 90.0 1.0 2.6 80.0 2.5 70.0 0.0 H1 2009 H1 2010 H1 2011 H1 2012 H1 2009 H1
Slide 4: Four consecutive quarters of Group revenue growth
Four consecutive quarters of Group revenue growth Group LFL APAC / EM LFL 15.0% 35.0% 13.1% 30.0% 28.1% 10.0% 7.5% 25.0% 20.8% 4.1% 20.0% 5.0% 1.4% 15.0% 12.9% 1.0% 9.4% 0.0% 10.0% 8.2% 7.2% -0.8% -1.9% 5.0% 1.2% -5.0% 0.0% -5.0% -10.0% -9.3% -10.0% -11.9% -15.0% -15.0% Q3 10 Q4 10 Q1 11 Q2 11 Q3 11
Slide 5: +10% OP increase driven by strong growth in APAC / EM
+10% OP increase driven by strong growth in APAC / EM Group H1 OP 3yr CAGR 16.6% APAC / EM H1 OP 3yr CAGR 21.2% 160 +10.1% 120 +11.3% 138.4 102.8 140 123.7 125.7 100 92.4 120 81.8 80 100 87.4 57.8 80 60 60 40 40 20 20 0 0 H1 09 H1 10 H1 11 H1 12 H1 09 H1 10 H1 11 H1 12 UK H1 OP 3yr CAGR 23.8% Europe
Slide 6: APAC / EM now more than two-thirds of Inchcape Trading Profit
APAC / EM now more than two-thirds of Inchcape Trading Profit APAC / EM % Group Revenue APAC / EM % Group Trading Profit 60.0% 70.0% 54.1% 68.4% 50.8% 67.8% 49.1% 68.0% 50.0% 44.6% 66.3% 66.0% 40.0% 64.0% 30.0% 62.0% 61.2% 20.0% 60.0% 10.0% 58.0% 0.0% 56.0% 2009 2010 2011 H1 2012 2009 2010 2011 H1 2
Slide 7: Positive Group operating leverage: ROS +20 BPS
Positive Group operating leverage: ROS +20 BPS* Group Analysis H1 ROS Regional Analysis H1 ROS GM 14.4% -50 BPS YoY North Asia: 10.2% +50 BPS Record OP • Strong pricing power performance in distribution markets offset by increased new vehicle contribution / mix effect, South Asia: 10.2% +90 BPS comp
Slide 8: Confidence in the Group's earnings growth potential
Confidence in the Group’s earnings growth potential • Revenue growth of 6%, OP growth of 10%* and ROS of 4.5% • PBT back to peak level achieved in 2008 • Exciting growth prospects ahead • Interim dividend announced of 4.0p per share, in line with our progressive dividend policy and up 11% YOY H1 Rev
Slide 9: Interim Results – John McConnell, Group Finance Director
2012 Interim Results John McConnell Group Finance Director Engineered for Growth
Slide 10: Summary profit & loss account
Summary profit & loss account H1 2012 H1 2011 Change £m £m % Sales 3,108.7 2,929.9 6.1% Operating profit 138.4 131.8 5.0% Net financing costs 4.0 3.9 (2.6)% Profit before tax 134.2 126.8 5.8% Tax rate (%) 26.0 26.0 - Basic adjusted EPS (p) 20.9 19.6 6.6% Note: All numbers at actual exchange rates 10
Slide 11: Impact of currency on operating profit
Impact of currency on operating profit H1 2012 2011 @ actual 2012 @ 2011 2012 @ actual Impact exchange rates actual rates exchange rates Australasia 33.9 34.4 35.1 0.7 Europe 10.9 10.9 10.3 (0.6) North Asia 19.0 24.9 25.6 0.7 South Asia 13.6 17.2 17.5 0.3 Russia and EM 25.9 25.4 24.6 (0.8) Total ove
Slide 12: Segmental performance
Segmental performance H1 2012 H1 2011 Change % £m £m Sales Distribution 1,274.8 1,168.7 9.1% Retail 1,833.9 1,761.2 4.1% 3,108.7 2,929.9 6.1% Operating profit Distribution 98.7 87.7 12.5% Retail 51.6 51.1 1.0% Central costs (11.9) (7.0) (70.0)% 138.4 131.8 5.0% Operating margin Distribution 7.7% 7.5
Slide 13: Group: Trading profit
Group: Trading profit 160.0 1.2 1.7 3.9 6.6 (1.3) (0.6) £m 130.0 15 0 .3 13 8 .8 100.0 H1 2011 North Asia South Asia UK Australasia Russia & Emerging Europe H1 2012 M arkets All numbers at actual exchange rates 13
Slide 14: Distribution: Trading profit
Distribution: Trading profit 2012 Trading margins H1 2012 98.7 Group: 7.7% +20 BPS North Asia 6.6 North Asia: 10.2% +50 BPS South Asia 3.9 South Asia: 10.2% +90 BPS Russia & Emerging Markets 1.6 Russia and Emerging Markets: 9.7% -20 BPS UK 0.3 UK: 19.3% +170 BPS Europe: 3.8% +60 BPS Europe (0.6) Aus
Slide 15: Retail: Trading profit
Retail: Trading profit 2012 Trading margins H1 2012 51.6 Group: 2.8% -10 BPS Australasia 2.0 Australasia: 4.1% +50 BPS UK 1.4 UK: 3.2% +20 BPS Europe (-) Europe: (0.1)% - BPS Russia & Emerging Markets (2.9) Russia and Emerging Markets: 1.9% -90 BPS H1 2011 51.1 25.0 50.0 75.0 All numbers at actual e
Slide 16: Regional analysis: Trading profit
Regional analysis: Trading profit H1 2011 H1 2012 Russia and Emerging Russia and Emerging Markets Markets Australasia 16% Australasia 19% 24% 23% £138.8m £150.3m UK UK North Asia 25% North Asia 25% 14% 17% South Asia Europe Europe South Asia 10% 8% 7% 12% 16
Slide 17: Cash flow
Cash flow Operating cash flow H1 2012 H1 2011 Free cash flow H1 2012 H1 2011 Net cash H1 2012 H1 2011 £m £m £m £m £m £m Operating profit 138.4 131.8 Operating cash 77.2 73.0 Free cash flow 12.0 18.8 flow Depreciation / amortisation 16.4 16.0 Net interest (9.7) (2.3) Acquisitions - (19.6) Working cap
Slide 18: Net financing costs
Net financing costs H1 2012 H1 2011 £m £m Bank and loan interest (1.3) (1.1) Stock holding interest 8.0 6.3 Interest on private placement notes 2.3 1.8 Pension interest net (1.0) (0.4) Other including capitalised interest adj. (2.7) (2.2) Interest excluding mark to market 5.3 4.4 FV on private place
Slide 19: Guidance – Full Year 2012
Guidance – Full Year 2012 • Tax rate 26% • Interest cost c £10-12m (excl. mark to market) • Capital expenditure £100m • Net cash c £200m 19
Slide 20: Business update and outlook
Business update and outlook André Lacroix Group Chief Executive Engineered for Growth
Slide 21: Inchcape Customer 1st Strategy
Inchcape Customer 1st Strategy 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 21
Slide 22: Operational discipline on Top Five Priorities
Operational discipline on Top Five Priorities Customer 1st strategy to create differentiation Commercial initiatives to grow revenues ahead of competitors Cash initiatives to grow profit and operating cash faster than revenue Brand portfolio of the world’s leading premium and luxury automotive brand
Slide 23: 2012 Outlook
2012 Outlook • Robust H1 performance, ahead of expectations • In H2 the Group will continue to benefit from its strong global footprint: “Right economies, right brands, right categories” • Demand for premium / luxury vehicles expected to outperform the industry in the UK • New car demand expected to
Slide 24: Strong 2012 model line-up
Strong 2012 model line-up BMW / MINI Land Rover / Jaguar Mercedes Benz Subaru Toyota / Lexus VW / Audi H1 3 Series B Class Impreza Prius PHV Up! MINI Roadster SL Class XV Prius + Beetle M Class LX Q3 H2 1 Series 3dr Range Rover A Class BRZ Yaris HSD A3 3dr 6 Series Gran Coupe XF Estate CLS Shooting
Slide 25: UK Retail
UK Retail Record ROS 2012 TIV est. FY estimate: 1.98m, +2% vs. 2011 2012 H1 • H1 LFL +3.0% achievements • Continued to grow market share through superior Inchcape Advantage Customer 1st processes • Capitalised on strong new product launches (Audi A1 Sportback, BMW 3 Series, Lexus GS, VW UP!, Porsche
Slide 26: Europe
Europe ROS improvement despite challenging trading conditions Belgium Greece 2012 TIV est. FY estimate: 528k, -15% vs. 2011 FY estimate: 60k, -39% vs. 2011 2012 H1 • Strengthened Toyota brand positioning: strength of Hybrid • Launched new models: Hilux SC, RX 450h achievements as better alternative
Slide 27: South Asia
South Asia Strong revenue and profit growth Singapore 2012 TIV est. FY estimate: 37k, -7.5% vs. 2011 2012 H1 • Benefitted from new product launches (Prius C, Camry, Suzuki Swift Sport & Lexus GS) achievements • Outperformed Aftersales market through expansion of customer contact activities to grow e
Slide 28: North Asia
North Asia Record Operating Profit Hong Kong 2012 TIV est. FY estimate: 43k, +2% vs. 2011 2012 H1 • Capitalised on strong new product launches (Prius C, Auris HV, Wish, Lexus GS, RX, & LX) achievements • Favourable pricing evolution from new car product mix (Lexus & Jaguar Land Rover) • Market share
Slide 29: Australasia
Australasia Record volume, revenue and underlying OP performance Australia Distribution Australia Retail 2012 TIV est. FY estimate: 1,080k, +7% vs. 2011 2012 H1 • Successful launches of Subaru Impreza and XV following • Leveraged new model launches achievements normalisation of supply from FHI • Boo
Slide 30: Russia and Emerging Markets
Russia and Emerging Markets Revenue growth of 13% in H1 Revenue (£m) Underlying OP (£m) 700 30 640.1 25.9 600 564.7 24.6 25 500 476.0 437.1 20 400 16.1* 15 300 10 200 100 5 3.4 0 0 H1 09 H1 10 H1 11 H1 12 H1 09 H1 10 H1 11 H1 12 3 Year CAGR +14% 3 Year CAGR +94% * H1 10 excludes £7.5m Romanian land
Slide 31: Russia
Russia Revenue growth of 9% in H1 2012 TIV est. FY estimate: 2.75m, +4% vs. 2011 2012 H1 • Leveraged new model launches (BMW 3 Series, Audi Q3, Lexus GS & Volvo V40) achievements • Utilised reminder call programme to drive higher customer loyalty • Continued focus on innovative campaigns to drive hi
Slide 32: Emerging Markets
Emerging Markets Revenue growth of 18% in H1 The Baltics The Balkans Poland South America Africa China 2012 TIV est. FY estimate: 39k, +5% FY estimate: 121k, FY estimate: 25k, +2% Chile: 11.5k, +7% vs. 2011 Data not available FY estimate: 1.1m, vs. 2011 -10% vs. 2011 vs. 2011 (Luxury) Peru: 2.5k, +8
Slide 33: Capex investment in 2012
Capex investment in 2012 March July guidance guidance Capacity expansion £33m £19m Chile Peru Russia Poland Australia Greenfield expansion £20m £16m Mercedes Jiujiang Porsche Nanchang Porsche UK Standards upgrade £31m £22m UK Singapore IT Upgrades £26m £25m Maintenance capex £20m £18m £130m £100m Fu
Slide 34: Structural growth ahead
Structural growth ahead Engineered for Growth
Slide 35: Strong growth forecast in global car market
Strong growth forecast in global car market Global TIV Global Car Parc +28% 101 +22% 97 1,157 93 1,094 88 984 1,017 1,054 82 951 79 million million 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Source: IHS Automotive (Global Insight) Source: LMC Automotive (JD Power) Growth opportuniti
Slide 36: Uniquely positioned to take advantage of global growth
Uniquely positioned to take advantage of global growth Strongest players Cyclical recovery Broad with 20based out of 26 will lead industry 5 global trends global recovery consolidation markets below TIV* historic peak +28% Car Parc** +22% Car Parc Structural growth growth in both led by wealth the f
Slide 37: Inchcape scale exposure to fast growing APAC / Emerging Markets
Inchcape scale exposure to fast growing APAC / Emerging Markets Inchcape % Inchcape % Inchcape Average GDP growth TIV growth CAGR Car parc growth markets Revenue Trading profit EBIT % CAGR 2012-17 2012-17 CAGR 2012-17 2009-11 2009-11 2009-11 (Source: IMF) (Source: IHS Automotive (Global Insight)) (S
Slide 38: Inchcape is Engineered for Growth
Inchcape is Engineered for Growth • Robust H1 PBT back to peak performance and a strong balance sheet • APAC / EM now c70% of Group trading profit • Attractive business model, highly cash generative • Scale player with strong share positions • Strategic route to market for OEM partners (Distribution
Slide 39: Appendices
Appendices Engineered for Growth
Slide 40: 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 41: Broad geographic spread – truly international
Broad geographic spread – truly international United Kingdom (MLP) R Australasia South Asia North Asia Europe 35.3% of ’11 Group Revenue 17.4% of '11 Group Revenue 5.1% of '11 Group Revenue 7.4% of '11 Group Revenue 13.8% of '11 Group Revenue 23.1% of ’11 Group Trading 21.1% of '11 Group Trading 9.9
Slide 42: 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 43: Engineered for Growth
Engineered for Growth © Inchcape 2012. 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 com