Slide 1: FY 2022 Results
FY 2022 RESULTS 23 March 2023
Slide 2: Duncan Tait, Group CEO
DUNCAN TAIT GROUP CEO
Slide 3: Agenda
3 Agenda 1 2022 Overview 2 2022 Results 3 Derco acquisition & Strategic progress 4 Looking ahead
Slide 4: 2022 strategic highlights
2022 strategic highlights Great results; strong Accelerate strategy; Completed a performance across all executing on two exciting transformational acquisition regions growth opportunities: + continued portfolio shift towards distribution Excellent Free Cash Flow ▪ Distribution Excellence generation
Slide 5: Excellent progress across our Responsible Business pillars
5 Excellent progress across our Responsible Business pillars Planet People Places Practices ▪ Good progress towards ▪ Launched Inclusion & ▪ Partnerships supporting ▪ Active promotion of our our Scope 1 & Scope 2 Diversity and Women prosthetics charities in whistle-blower hotline CO2 emissions targe
Slide 6: Continued positive momentum
6 Continued positive momentum FINANCIALS CASH & RETURNS Revenue PBT FCF ROCE DPS £8.1bn +18% £373m +50% £380m 41% 28.8p 2021: £6.9bn 2021: £249m 2021: £274m 2021: 28% 2021: 22.5p PEOPLE PLANET CUSTOMERS 22% 24% 1.8% 671 Women in Senior reduction in Scope 1 BEV sales as Reputation.com Leadership posi
Slide 7: Adrian Lewis, Acting Group CFO
ADRIAN LEWIS ACTING GROUP CFO
Slide 8: 2022 headline financials
8 2022 headline financials Topline Profitability Cash Shareholders Revenue Operating margin Free Cash Flow Adjusted EPS £8.1bn 5.1% £380m 72.0p +15% £373m £(378)m 28.8p (2021: 22.5p) Organic growth (YoY%) PBT Net debt1 Dividend per share (proposed) Figures are stated before adjusting items, and on t
Slide 9: 2022: a great set of results
9 2022: a great set of results 2022 2021 FY H2 H1 FY H2 H1 Revenue £8.1bn £4.2bn £3.9bn £6.9bn £3.3bn £3.6bn Organic growth (YoY%) +15% +19% +12% +20% +7% +37% Operating margin % 5.1% 4.9% 5.2% 4.1% 4.4% 3.8% PBT £373m £189m £184m £249m £128m £121m Figures are stated before adjusting items, and on t
Slide 10: Distribution revenue: continued strong performance
10 Distribution revenue: continued strong performance Revenue (£bn) £5.9bn +17% Americas ▪ Excellent performance across all major markets £1.5bn +32% ▪ Meaningful contribution from M&A £4.7bn (Ditec & Simpson Motors) £0.9bn Europe & Africa £2.0bn +30% ▪ Gained market share across key markets £1.6bn
Slide 11: Distribution profit: growth across all regions
11 Distribution profit: growth across all regions Operating profit (£m) 5.3% 6.2% Americas ▪ Robust demand amid vehicle supply shortages 363 supported pricing and margins ▪ Positive contribution from M&A and contract-wins 110 7.4% 246 Europe & Africa ▪ Topline improvement drove higher profitability
Slide 12: Retail: solid performance amid supply constraints
12 Retail: solid performance amid supply constraints Revenue (£bn) Operating profit (£m) 1.6% 2.1% Revenue supported by gradually improving vehicle supply Normalising vehicle profitability in the second-half £48m £2.3bn +10% £2.2bn 2023 (Agency model): expect a £35m c.£200m revenue reduction due to
Slide 13: Income statement
13 Income statement FY £m 2022 2021 (unless otherwise stated) Adjusted Operating Profit 411 281 Interest costs increased due to higher cost of financing Adjusted Net Interest (37) (33) Tax rate above historic levels Adjusted Profit Before Tax 373 249 (~25%) due to country-mix of profit Underlying Ta
Slide 14: Another year of excellent free-cash flow generation
14 Another year of excellent free-cash flow generation Net cash/ (debt) bridge (£m) 2022 Free-cash flow = £380m £274m in 2021 92% (407) FCF conversion Cash paid (522) Net Debt acquired Figures are stated before adjusting items, and on the basis of continuing operations. Net cash/ debt excludes lease
Slide 15: Capital allocation policy: remains unchanged
15 Capital allocation policy: remains unchanged 1) Invest in the 2) Dividends 3) Value accretive 4) Share business M&A buybacks Capex for organic Policy: Disciplined Consider growth and 40% annual payout approach to appropriateness of technological of basic EPS valuation share buybacks investment (a
Slide 16: Attractive financial characteristics to drive further growth
16 Attractive financial characteristics to drive further growth Group FCF ROCE conversion Leverage 2022 41% 92% 0.6x performance c.25% 60-70% Cash generation to support Derco dilutive Normalising towards due to intangibles historic range bolt-on M&A Free Cash Flow (FCF) conversion calculated as free
Slide 17: Derco Acquisition
DUNCAN TAIT DERCO ACQUISITION
Slide 18: Accelerating growth with a transformational acquisition
18 Accelerating growth with a transformational acquisition Inchcape Americas CEO Transaction recap Romeo Lacerda Acquired Derco on 31 Dec 2022 Total enterprise value of c.£1.3bn, mixture of cash and equity ▪ Del Río family 9.3% stake in Inchcape (c.£300m) ▪ Juan Pablo Del Río appointed to the Board
Slide 19: Highly complementary market footprint and brand portfolio
19 Highly complementary market footprint and brand portfolio Markets Derco Inchcape Typical brand structure Passenger vehicles Luxury brands ✓ Chile Premium brands ✓ Commercial vehicles Niche brands ✓ Peru Mainstream brands ✓ Colombia Entry-level brands ✓ ✓ Bolivia Inchcape present in 8 additional c
Slide 20: First 80 days progressing well; focused on the future
20 First 80 days progressing well; focused on the future The first 80 days… Key focus areas ▪ Appointed the new Americas Executive Team 11) >£40m recurring synergies Organisation, Operations, Technology ▪ Excellent cultural alignment supporting integration process 2) Opportunities for revenue 2 syne
Slide 21: Significant progress towards our strategy & growth ambitions
21 Significant progress towards our strategy & growth ambitions Strong topline Margin Distribution Shareholder growth upside consolidation value creation prospects Increases exposure to Derco is margin accretive Significantly increases 20+% EPS accretion from higher growth markets for the Group Inch
Slide 22: Strategic Progress
DUNCAN TAIT STRATEGIC PROGRESS
Slide 23: Bringing mobility to the world's communities
23 Inc hc ap e BRINGING MOBILITY TO THE WORLD’S COMMUNITIES – FOR TODAY, FOR TOMORROW & FOR THE BETTER
Slide 24: Inchcape is on an ambitious growth journey
24 Inchcape is on an ambitious growth journey The leading automotive Expanding the reach of our Our digital and distributor in a highly plug-and-play data capability is a fragmented global market global distribution significant competitive platform advantage Uniquely positioned to Growth ambition De
Slide 25: Considerable opportunities for an ambitious Inchcape
25 Considerable opportunities for an ambitious Inchcape Distribution Excellence Vehicle Lifecycle Services Annual new car volumes (units) Vehicle lifecycle value profit split2 90m 17m New market opportunities Large markets; e.g. China, typically US, UK, 75% Currently insourced Brazil, underserved by
Slide 26: Distribution Excellence: accelerating our growth
26 Distribution Excellence: accelerating our growth A huge opportunity… …to leverage our capabilities… …and drive further growth Global Distribution 17m TAM Progress since 2021 CMD ▪ Increased our exposure to higher growth markets New market opportunities ▪ Extended our leadership in Digital & Data
Slide 27: Continuing to transform our approach to digital, globally
27 Continuing to transform our approach to digital, globally CMD focus areas Future Digital eXperience Platform: Complete omni-channel purchasing, and ownership our digital touchpoint experience for new and used vehicles Data Analytics Platform: Every action optimised by proprietary analytics drivin
Slide 28: Distribution deals & OEM opportunities have accelerated
28 Distribution deals & OEM opportunities have accelerated 2010 2016 2017 2018 2019 2020 2021 2022 2023 to date Number of 0 2 2 3 3 5 5 5 12 deals Revenue - c.£400m c.£100m c.£250m c.£150m c.£200m c.£200m c.£2.3bn c.£100m added1 New OEMs - 1 2 2 1 0 3 7 1 New markets - 3 0 3 2 2 3 1 1 1: Shows reven
Slide 29: Significant portfolio shift towards Distribution
29 Significant portfolio shift towards Distribution Revenue mix Profit mix 36% 50% 4% 18% 30% 78% 43% 13% 27% 92% 29% 22% 72% 9% 73% 53% 40% 89% 27% 25% 20% 57% 7% 22% 15% 28% 22% 27% 11% 8% Inchcape Inchcape Derco Inchcape Inchcape Inchcape Derco Inchcape 2016A 2022A 2022A Enlarged 2016A 2022A 2022
Slide 30: Vehicle Lifecycle Services: exploring new opportunities
30 Vehicle Lifecycle Services: exploring new opportunities Vehicle Lifecycle Value Three opportunities in focus Progress since 2021 CMD Timeline 1. 2021/ 1. bravoauto rolled-out to all 22 three Distribution regions B2C 2. Digital Parts 2023/ 2. Further developed our 24 Digital Parts Platform Platfor
Slide 31: bravoauto: focused on execution in new markets
31 : focused on execution in new markets Business model Digital first, multi-brand, used 2022: live across nine markets car platform (B2C) UK Poland Belgium Latvia Estonia Romania Australia Thailand Colombia USPs Leverages existing infrastructure 2023: rolling-out to more markets Globally scalable m
Slide 32: Drivers of our financial performance
32 Drivers of our financial performance Distribution Excellence Vehicle Lifecycle Services Organic M&A New opportunities Revenue Volume Acquisitions & contract-wins bravoauto ▪ Exposure to higher growth markets ▪ Expand OEM relationships ▪ Used volumes & Aftersales ▪ Volumes c.10% below historic lev
Slide 33: Looking Ahead
DUNCAN TAIT LOOKING AHEAD
Slide 34: Summary & 2023 outlook
34 Summary & 2023 outlook Fantastic Transformational 2023 execution acquisition outlook ▪ Profit growth across all ▪ Accelerated our shift ▪ Mindful of changeable regions + excellent cash- towards Distribution + economic environment generation reduced Retail ▪ Performance to date inline with expecta
Slide 35: Investment case: well-positioned to deliver significant value
35 Investment case: well-positioned to deliver significant value Attractive shareholder Consolidation returns opportunities Margin Strong organic expansion Dividend payout: 40% growth We are the leader with c.2% Track record of share share of global distribution buybacks Leverage our global scale to
Slide 36: Q&A
36 Q&A
Slide 37: Appendix
@ Inchcape APPENDIX
Slide 38: 2023 Group context and considerations
38 2023 Group context and considerations Revenue £2.2bn £10.1bn £(0.2)bn Other considerations £8.1bn Net interest: c.£110m 2 Tax rate: 2022 Acquisitions: Agency: 2022 c.27-28% Reported Distribution Retail1 Adjusted Net capex % of sales: Operating profit £411m Neutral <1% Operating profit margin 5.1%
Slide 39: Group Financial Position post Derco acquisition
39 Group Financial Position post Derco acquisition Dec-22 Dec-21 Non-current Assets £2.6bn £1.5bn Intangibles £1.2bn £0.4bn £700m intangibles on acquisition of Derco Current Assets £4.4bn £2.1bn £800m inventory from Derco Inventory £2.4bn £1.1bn (£200m higher than the level agreed within the terms o
Slide 40: 2022 restatements for new segmental disclosure
40 2022 restatements for new segmental disclosure To support the change to our revised segmental disclosure we have provided the breakdown for 2022 under both the historic reporting structure, as well as the new reporting structure. Old New AS REPORTED REVISED DISCLOSURE Distribution Retail1 Group D
Slide 41: Strategic framework
41 strategic framework Our Growth Drivers Distribution Excellence Vehicle Lifecycle Services Our Enablers Culture and Digital, Data & Efficient Scale Capabilities Analytics Operations Responsible Business
Slide 42: Inchcape: the leading automotive distributor
42 Inchcape: the leading automotive distributor Our competitive advantages: ▪ The global leading distributor: >40 markets across six continents ▪ Long-term relationships, and several new exciting partnerships, with global OEM brands ▪ A plug-and-play distribution platform: unique digital and data an
Slide 43: Global distribution: plotting the landscape of opportunity
43 Global distribution: plotting the landscape of opportunity Typical distribution markets1 Number of 17m 17m 17m independent distributors Middle East >170 Other OEM OEMs Latam & operated >500 (potential) Africa (NSCs) APAC >250 Inchcape Independent OEM distributors Partners Europe >220 (existing) I