Slide 1: First half 2020 results
First half 2020 results 30 July 2020
Slide 2: Duncan Tait, Group CEO
Duncan Tait Group CEO
Slide 3: Gijsbert de Zoeten, Group CFO
Gijsbert de Zoeten Group CFO
Slide 4: Income statement
Income statement Change yoy% Covid-19 had a material impact £m (unless otherwise stated) 1H20 1H19 Reported Constant FX Organic • Topline outperformance vs market Revenue 3,019 4,725 (36)% (35)% (29)% volumes Operating profit 28 180 (84)% (84)% • Market closures had a significant Operating margin %
Slide 5: Distribution
Distribution Change yoy% Results hit by wide-spread market closures £m (unless otherwise stated) 1H20 1H19 Reported Constant FX Organic • Geographic diversification helped Revenue 1,730 2,421 (29)% (27)% (29)% support performance Operating profit 46 160 (71)% (71)% • Positive operating profit albeit
Slide 6: Distribution operating profit bridge
Distribution operating profit bridge 160 58 24 11 18 46 3 1H19 Asia Australasia Europe Americas & Africa Translation FX 1H20 operating profit operating profit NB. figures above are quoted in £m First half 2020 results – 30th July 2020 6
Slide 7: Retail
Retail Change yoy% The two key markets impacted by prolonged closures £m (unless otherwise stated) 1H20 1H19 Reported Constant FX Organic Revenue 1,289 2,304 (44)% (43)% (30)% • UK and Russia (>90% of the segment’s sales) impacted by >10 weeks of Operating profit (18) 20 (188)% (190)% closures % mar
Slide 8: Cash flow: very effective inventory management
Cash flow: very effective inventory management Net cash bridge (£’m) Supported by collaboration with OEMs Free-cash flow = £(5)m vs £25m in 1H19 • Lower operating profit offset by strict 22 12 working capital discipline, and reduced 28 capex and taxes 13 38 32 • Inventory management in collaboration
Slide 9: Liquidity update: strong balance sheet
Liquidity update: strong balance sheet Liquidity position further strengthened Net cash £103m £(187)m £(210)m £89m • Liquidity of >£1,000m vs £889m in Dec-19 Total Liquidity £889m £600m >£700m >£1,000m • Collaboration with OEMs has supported the liquidity position during market lockdowns 530 • Repai
Slide 10: Covid-19 update: key market status
Covid-19 update: key market status 7th April 21st May Status today Australia Asia-Pac Market status (today) Hong Kong • Open: 30 markets Singapore • Closed: 3 markets Belgium Greece Europe Romania Russia UK Chile Americas & Africa Colombia Peru Open Costa Rica Key: Closed Ethiopia Group (open market
Slide 11: Sales trend gradually improving as markets reopen
Sales trend gradually improving as markets reopen Group organic revenue growth (yoy%) development 1Q20 Apr-20 May-20 Jun-20 1Q20: (6)% (18)% 2Q20: Aftersales sales growth (51)% c.20% above Vehicles (59)% (76)% • Jan-Feb: performance • Markets representing c70% • Markets representing c60% • Markets (
Slide 12: Market context for cost-restructuring
Market context for cost-restructuring Inchcape markets: new car volume evolution IHS Automotive forecasts (July) (29)% 14% 2019 2020 2021 First half 2020 results – 30th July 2020 12
Slide 13: A leaner organisation, fit for focused growth
A leaner organisation, fit for focused growth 2019-PF1 Overhead Restructuring overheads savings costs £855m >£90m c.£70m Following significant Reducing headcount (10%), Process well-underway Retail disposals third-party spend and footprint rationalisation c.50% of savings retained when Cash-cost c.£
Slide 14: Digital: continuing our investment
Digital: continuing our investment Key digital milestones in 1H20 • Digital leads drove > 9,000 orders • Increased efficacy of digital marketing • Completed testing on multi-brand & language platform Current digital priorities • Omni-channel: roll-out Melbourne-trial to other markets • Analytics: us
Slide 15: M&A: alive to the consolidation opportunity
M&A: alive to the consolidation opportunity Establishing a strong platform in a new geography Platform deal Strategic move to enter a new geography and leverage our global scale e.g. Indumotora (2016) & Rudelman (2018) – Americas OEM Partner Leveraging existing regional infrastructure Smaller scale
Slide 16: Capital allocation: maintaining our discipline
Capital allocation: maintaining our discipline 1 2 Invest in the business Dividends Capex for organic growth and To be resumed when appropriate technological investment Policy: 40% annual payout of basic EPS Retain focus on portfolio optimisation (pre exceptionals) Strong balance sheet 4 3 Net debt
Slide 17: Outlook: continued resilience
Outlook: continued resilience Market outlook Strategic focus • Markets remain dynamic • Continue to outperform market volumes • Underlying strength of recovery is unclear • Becoming leaner and stronger • Possibility of a second-wave • Capitalising on opportunities 2020 outlook: Too early to provide
Slide 18: Duncan Tait, Group CEO
Duncan Tait Group CEO
Slide 19: Investment proposition: growth and cash returns
Investment proposition: growth and cash returns Distribution at our core: A highly cash generative and sustainable business model Strong and increasing weighting to higher growth markets supports our diversification Ignite strategy driving organic performance ahead of market growth Continued consoli
Slide 20: Initial thoughts: Covid-19, the great accelerator
Initial thoughts: Covid-19, the great accelerator Drive Globalise Deliver the Dial-up use of consolidation in processes ‘Inchcape data & digital distribution & smart centres Way’ Drive insights, Help existing, Use shared Accelerate efficiencies and and new, services and development growth partners g
Slide 21: Q&A
Q&A
Slide 22: Appendix
Appendix
Slide 23: Supporting our communities
Supporting our communities Europe APAC Americas Provision of vehicles Public awareness campaign Vehicle support for the to Red Cross in early stages of outbreak Ministry of Health First half 2020 results – 30th July 2020 23
Slide 24: Segmental restatements
Segmental restatements Old New AS REPORTED REVISED DISCLOSURE Distribution Retail Group Distribution Retail Group 1H19 FY19 1H19 FY19 1H19 FY19 1H19 FY19 1H19 FY19 1H19 FY19 Revenue Revenue Asia 865.8 1,681.9 865.8 1,681.9 Asia 784.1 1,522.5 81.7 159.4 865.8 1,681.9 Australasia 500.5 1,036.3 185.1 3