Inchcape Plc · LSE:INCH
Inchcape — H1 2006 Earnings Presentation
54 slides from Inchcape's earnings presentation, Aug 3, 2006
Slide 1: Inchcape Interim results presentation
Inchcape Interim results presentation • 3 August 2006 NOTES
Slide 2: Barbara Richmond, Group Finance Director
Barbara Richmond Group Finance Director NOTES
Slide 3: Group financial highlights
Group financial highlights • Sales up 8.1% to £2.44bn • Trading Profit up 10.4% to £120.4m • Headline EPS* up 17.8% to 18.5p • Cash flow per share up 224.5% to 33.1p • Dividend up 56.3% to 5.0p * Pre exceptional items NOTES
Slide 4: Sales
Sales H1 H1 % % Change 2006 2005 Change constant £m £m currency Distribution 1,305 1,213 8 4 Retail 1,135 1,044 9 9 Total 2,440 2,257 8 6 NOTES
Slide 5: Change in sales
LFL Growth Acquisitions Currency DRetail (Distribution
Slide 6: Group trading profit analysis
Group trading profit analysis* H1 H1 % % Change 2006 2005 Change constant £m £m currency Distribution 92 88 5 1 Retail 28 21 33 33 Total 120 109 10 7 * Excludes central costs NOTES
Slide 7: Change in trading profit
Change in trading profit £m NOTES
Slide 8: Segmental results
Segmental results* Sales £m Distribution ROS Sales £m Retail ROS 1400 8.0% 1200 3.0% 1200 7.0% 1000 2.5% 6.0% 1000 800 2.0% 5.0% 800 4.0% 600 1.5% 600 3.0% 400 1.0% 400 2.0% 200 0.5% 200 1.0% 0 0.0% 0 0.0% H1Proforma H1 2004 H1 2005 H1 2006 H1 Proforma H1 2004 H1 2005 H1 2006 2003 2003 * At constant
Slide 9: Group sales and trading profit
Group sales and trading profit* Sales Trading Profit 2006 * Before central costs NOTES
Slide 10: Australia
Australia A$m A$m ROS Sales 50 Trading Profit 6.0% 900 45 800 5.0% 40 700 35 600 4.0% 30 500 25 3.0% 400 20 300 2.0% 15 200 10 1.0% 100 5 0 0 0.0% H1 2003 H1 2004 H1 2005 H1 2006 H1 2003 H1 2004 H1 2005 H1 2006 Proforma Proforma NOTES
Slide 11: Belgium
Belgium !m Sales !m Trading Profit ROS 450 14 3.5% 400 12 3.0% 350 10 2.5% 300 8 2.0% 250 200 6 1.5% 150 4 1.0% 100 2 0.5% 50 0 0 0.0% H1 2003 H1 2004 H1 2005 H1 2006 H1 2003 H1 2004 H1 2005 H1 2006 Proforma Proforma * NOTES
Slide 12: Greece
Greece ROS !m 350 Sales !m 14 Trading Profit 6.0% 300 12 5.0% 250 10 4.0% 200 8 3.0% 150 6 2.0% 100 4 1.0% 50 2 0 0 0.0% H1 2003 H1 2004 H1 2005 H1 2006 H1 2003 H1 2004 H1 2005 H1 2006 Proforma Proforma NOTES
Slide 13: Hong Kong
Hong Kong HK$m Sales HK$m Trading Profit ROS 1800 200 12.0% 1600 180 10.0% 160 1400 140 1200 8.0% 120 1000 100 6.0% 800 80 600 4.0% 60 400 40 2.0% 200 20 0 0 0.0% H1 2003 H1 2004 H1 2005 H1 2006 H1 2003 H1 2004 H1 2005 H1 2006 Proforma Proforma NOTES
Slide 14: Singapore
Singapore S$m Sales S$m Trading Profit ROS 120 10.0% 1200 9.0% 100 8.0% 1000 7.0% 80 800 6.0% 60 5.0% 600 4.0% 40 400 3.0% 2.0% 20 200 1.0% 0 0 0.0% H1 2003 H1 2004 H1 2005 H1 2006 H1 2003 H1 2004 H1 2005 H1 2006 Proforma Proforma NOTES
Slide 15: United Kingdom
United Kingdom £m £m ROS Sales Trading Profit 900 25 3.5% 800 3.0% 700 20 2.5% 600 15 500 2.0% 400 1.5% 10 300 1.0% 200 5 0.5% 100 0 0 0.0% H1 2003 H1 2004 H1 2005 H1 2006 H1 2003 H1 2004 H1 2005 H1 2006 Proforma Proforma NOTES
Slide 16: UK Retail
UK Retail £m Sales £m Trading Profit ROS 25 3.0% 800 700 2.5% 20 600 2.0% 500 15 400 1.5% 10 300 1.0% 200 5 0.5% 100 0 0 0.0% H1 2003 H1 2004 H1 2005 H1 2006 H1 2003 H1 2004 H1 2005 H1 2006 Proforma Proforma NOTES
Slide 17: Other
Other £m Sales £m Trading Profit ROS 400 18 7.0% 16 350 6.0% 14 300 5.0% 12 250 10 4.0% 200 8 3.0% 150 6 2.0% 100 4 50 1.0% 2 0 0 0.0% H1 2003 H1 2004 H1 2005 H1 2006 H1 2003 H1 2004 H1 2005 H1 2006 Proforma Proforma NOTES
Slide 18: Net interest, taxation and dividend
Net interest, taxation and dividend H1 H1 2006 2005 Net interest cost 0.6 2.4 Tax rate (%) 21.7 25.5 EPS (p) 18.5 15.7 Dividend per share (p) 5.0 3.2 Cash flow per share (p) 33.1 10.2 Dividend cover – Earnings 3.7 4.9 – Cash 6.7 3.2 NOTES
Slide 19: Cash flow and net debt
Cash flow and net debt Operating cash flow Free cash flow Net cash £m £m £m Operating profit 110.0 Operating profit flow 199.4 Net cash 01.01.06 158.0 Depreciation / 12.5 Net interest (1.0) Free cash flow 154.3 Amortisation Dividends (29.6) Working Capital 76.9 Taxation (26.5) Share buyback (34.0) M
Slide 20: Pensions
Pensions • New pension funding rules • Triennial valuation of Inchcape UK and Inchcape Motors Pensions’ pension schemes • Schemes’ funding programme agreed ! £32m one off contribution made in March 2006 ! £13.2m one off contributions for 2007 to 2009 ! £7.5m one off contributions in 2010 and 2011 NO
Slide 21: Financial summary
Financial summary • Economic resilience in Distribution from broad geographical base • Strong overall sales growth in retail • Margin improvement in retail 50 bps • Cash resources and balance sheet to fund strong pipeline of opportunities NOTES
Slide 22: André Lacroix, Strategic and operational review
André Lacroix Group chief Executive Strategic and operational review NOTES
Slide 23: Strategic Agenda: Summary
Strategic Agenda: Summary 1 Vision: To be the world’s most customer centric automotive retail group 2 Levers: Strengthen Expand Customer centric In existing, emerging operational excellence and new markets 3 Enablers: Build capability in people and systems Disciplined allocation of capital Balance s
Slide 24: Strengthen and expand
Strengthen and expand Strengthen Expand • Distribution • Acquisition • Retail • Greenfield NOTES
Slide 25: Strengthen - Distribution
Strengthen - Distribution Key Markets Sales Trading Profit ROS ROS YOY % YOY % % YOY Australia 5.3 7.7 6.4 10bps Continental Europe 26.2 17.6 4.4 (30)bps Asia (8.9) (13.5) 9.2 (50)bps ROW (4.8) 50.0 9.1 330bps Total 4.4 1.1 7.0 (30)bps NOTES
Slide 26: Australia - Distribution
Australia - Distribution H1 Performance drivers • Record Subaru share at 3.9% • Effective marketing programmes • Expansion of AutoNexus • Margin improvement to 6.4% NOTES
Slide 27: Australia - Distribution
Australia - Distribution H2 Key initiatives Launch of new facelift Liberty/Outback Launch of Tribeca More special Editions Campaigns NOTES
Slide 28: Asia - Distribution
Asia - Distribution H1 Performance drivers • Challenging trading conditions • Dominant share position • Economic strength of distribution model ! Hong Kong 36.1% ! Singapore 29.7% NOTES
Slide 29: Asia - Distribution
Asia - Distribution H2 Key initiatives Singapore – New model launches Hong Kong – 40th Anniversary Marketing Campaign NOTES
Slide 30: Europe - Distribution
Europe - Distribution H1 Performance drivers • New Toyota / Lexus models in Europe • Market share improvement in Belgium, Greece and Balkans • Good margin management NOTES
Slide 31: Europe - Distribution
Europe - Distribution H2 Key initiatives Toyota Aygo New Toyota/Lexus models Toyota Rav 4 Lexus IS Toyota Yaris NOTES
Slide 32: Strengthen - Retail
Strengthen - Retail Sales Trading ROS ROS YOY % Profit % YOY YOY % Australia 9.5 60.2 4.3 150bps Continental Europe 14.6 (25.0) 1.0 (50)Bps UK 6.1 49.1 2.8 80bps Total 8.7 33.3 2.5 50bps NOTES
Slide 33: Australia - Retail
Australia - Retail H1 2006 Performance drivers • Solid LFL sales growth of 2.6% • Productivity improvement • Record ROS of 4.3% H2 Key initiatives Relocating Subaru retail centre Subaru Tribeca NOTES
Slide 34: Europe - Retail
Europe - Retail • Progress on Sales and Profit performance in all markets but France • France portfolio restructuring • Greece retail turnaround underway ! Like for like sales up 24.6% NOTES
Slide 35: UK - Retail
UK - Retail H1 Performance drivers • Record ROS of 2.8%, 80 bps ahead of last year • LFL trading profit up 34.9% to £18.3m • UK Dealer Group of the year 2006 H2 Key initiatives • Integrate Lind acquisition • Focus on profitable LFL sales growth NOTES
Slide 36: Expansion
Expansion H1 2006 Capital Commitments £m Acquisition 120 Greenfield 28 148 NOTES
Slide 37: Major acquisitions
Major acquisitions • Lind Automotive Holdings Limited - £110.4m • Keystar Motors Pty Limited - £9.1m NOTES
Slide 38: Lind, UK
Lind, UK • 21 retail centres in contiguous scale territories • Enhances geographic coverage in South East of England • Excellent brand fit Key: ! Lind ! Inchcape NOTES
Slide 39: Lind, UK
Lind, UK Retail centres !! Brand Partner No. of sites Locations BMW 5 Chelmsford, Colchester, Ipswich, Norwich, Maidstone MINI 3 Colchester, Ipswich, ! ! Norwich Volkswagen 4 Chelmsford, Colchester, !!! ! Harold Wood, Southend on Sea !!! Audi 4 Canterbury, Crawley, ! Maidstone, TonBridge !! Honda 3
Slide 40: Lind, UK
Lind, UK NOTES
Slide 41: Keystar, Australia
Keystar, Australia • Extends retail presence in Australia • Entry into fast growing Queensland market NOTES
Slide 42: Keystar, Australia
Keystar, Australia Retail centres Brand Partner No. of sites Locations Kia 2 Morayfield, Rothwell Hyundai 2 Morayfield, Rothwell Mitsubishi 1 Morayfield Subaru 2 Morayfield, Rothwell New acquisition ! sales sites • service sites NOTES
Slide 43: Keystar, Australia
Keystar, Australia NOTES
Slide 44: Greenfield
Greenfield • Russia • Belgium • Romania • Australia • Singapore NOTES
Slide 45: Russia car market
Russia car market • Largest car market in Central and Eastern Europe • New units forecast to reach 1.8m by 2010 • Foreign brands up by 55% in H1 • Strong demand for Toyota brand NOTES
Slide 46: Independence Group
Independence Group • Leading Moscow automotive retail group • Joint venture to be 51% Inchcape 49% Independence • Circa £19m investment planned by JV • Opening at the end of 2007 NOTES
Slide 47: Waterloo, Belgium
Waterloo, Belgium NOTES
Slide 48: Bucharest, Romania
Bucharest, Romania NOTES
Slide 49: Melbourne, Australia
Melbourne, Australia NOTES
Slide 50: Hino trucks, Singapore
Hino trucks, Singapore NOTES
Slide 51: Outlook – short term
Outlook – short term • Distribution – New Models – Supply improvement in Asia • Retail – LFL profitable growth – Benefits of new acquisitions • Despite challenging trading conditions, well placed to achieve year on year growth NOTES
Slide 52: Outlook – medium term
Outlook – medium term Confident of continued progress in 2007 and beyond Strengthen Expand • Focus on customer service and • Impact of 2006 Greenfield productivity improvement operations • Strong pipeline of new models • Benefit of 2006 Acquisitions • No taxi sales in Singapore • Opening of 2 retail
Slide 53: Disclaimer
Disclaimer The information provided in this presentation is accurate as of the date on which it was released. It will not be updated in the light of any new information or events except in the form of subsequent presentations or statements by"Inchcape. The information in the presentation contains fo
Slide 54: Inchcape
Inchcape Interim results presentation • 3 August 2006 NOTES