Vertu Motors Plc · LSE:VTU
Vertu Motors — FY2023 Earnings Presentation
35 slides from Vertu Motors's earnings presentation, Feb 28, 2023
Slide 1: Vertu Motors plc Year End Results
Vertu Motors plc Analyst and Investor Presentation Year End Results For the year ended 28 February 2023
Slide 2: Vertu Advantages: our investment case
Vertu Advantages: our investment case 2 Scale Benefits Customer Lifecycle Cost Optimisation Maximise Returns • Stable, experienced • Full sales and aftersales • In-house systems to improve • Active portfolio management management with capacity to offering to increase capture of process efficiency an
Slide 3: At A Glance
At A Glance 3 Final Results FY23
Slide 4: Agenda
Agenda 4 Financial Performance Karen Anderson Operational Performance and Strategic update Robert Forrester Q&A Final Results FY23
Slide 5: Financial Performance
Financial Performance Robert Forrester Karen Anderson CEO CFO
Slide 6: FY23 Financial KPIs
FY19 3.0 FY20 3.1 FY21 2.5 FY22 3.6 Revenue £’bn FY23 4.0 FY23 Financial KPI’s FY19 24 FY20 24 FY21 25 FY22 81 Adjusted PBT £’m FY23 39 FY19 21 FY20 (5) FY21 48 £’m FY22 44 Free Cash Flow FY23 54 FY19 168 FY20 169 FY21 182 Assets £’m FY22 237 Tangible Net FY23 224 Final Results FY23 6
Slide 7: Income Statement
Income Statement 7 Year Ended 28 February Gross Margin: strong pricing disciplines in constrained supply environment continues to £’m (unless otherwise stated) 2023 2022 % Change underpin margins in New and Used vehicle sales: Revenue 4,014.5 3,615.1 11.0% gross profit per unit remain above historic
Slide 8: Profit Bridge – Adjusted PBT
Profit Bridge – Adjusted PBT 8 • Strong new car, fleet and commercial margins increased gross profit • Used vehicle gross profit per unit reverted to more normal levels following exceptional FY22 • Growth in gross profit in all aftersales channels • Cost pressures evident with inflation and normalis
Slide 9: Management of cost headwinds
Management of cost headwinds 9 12 months ended 28 February Salary Cost Variance £’m £’m 2023 2022 Variance Pay awards 6.7 Salary cost 214.0 199.9 14.1 Additional headcount 9.1 Vehicle and valeting costs 38.6 35.3 3.3 NMW and NIC rate increase 2.6 Marketing costs 36.2 36.0 0.2 Commissions & bonuses (
Slide 10: Balance Sheet
Balance Sheet 10 28 Feb 2023 28 Feb 2022 £’m £’m • Defined benefit pension remains in surplus and fully funded on actuarial basis: no cash contributions Intangible assets 129.9 105.2 • Property portfolio at depreciated historic cost with Retirement benefit asset 3.2 9.1 disposals expected at above b
Slide 11: Record Free Cash Flow generated
Record Free Cash Flow generated 11 Cash Flow 12 Months Ended Facilities Drawn 28 February 2023 £’m Net Debt at 28 February 2023 £’m £’m Operating profit 42.0 5 year acquisition facility (from December 2022) 93.0 43.3 Depreciation, amortisation and impairment 32.4 20 year mortgage facility (from Dece
Slide 12: Capital Allocation Discipline
Capital Allocation Discipline 12 Full Year Tangible Net 1 2 FY23 Capital Repurchased Net Debt Gearing Dividend cash Assets Expenditure Shares cost £224.1m £75.3m 45% £23.8m £6.0m £5.9m Investment in growth Return to Shareholders Acquisitions and Growth Reinvest in Operations Dividends Share Buyback
Slide 13: Capital Allocation: Maximising returns from substantial property portfolio
Capital Allocation: Maximising returns from substantial property portfolio 13 Before: Dunfermline Ford Rapid Fit Active portfolio management • Group has net book value £306.6m of freehold and long leasehold property stated at historic cost less depreciation of £43.7m • Multi-franchising activity max
Slide 14: Market Trends
Market Trends Robert Forrester CEO
Slide 15: Group Vehicle Sales Performance
Group Vehicle Sales Performance 15 Like-for-Like Vehicle Volume Year to 28 February 2023 Gross Profit Per Unit £ 2,246 FY2023 Group Like-for- UK % Change Group Like-for- 2 1 Volume like % Change (SMMT) like v SMMT % New retail car and bikes 33,727 (3.6%) (1.9%) (1.7%) 1,418 Motability 11,029 28.4% 8
Slide 16: Group Aftersales Performance – Gross profit up in all channels
Group Aftersales Performance – Gross profit up in all channels (L4L) 16 Like-for-like Accident & Service Parts Fuel Forecourt Total FY23 v FY22 Smart Repair 1 Revenue (£’m) 159.5 189.2 20.1 13.9 382.7 1 Revenue Change % 5.8% 10.0% 24.1% 75.7% 10.4% Gross profit (£’m) 117.8 42.3 10.7 0.9 171.7 Gross
Slide 17: Benefits of an ageing car parc for aftersales
Benefits of an ageing car parc for aftersales 17 FY23 Age of vehicle on date of Mix of work in Average invoice • Average age of vehicle in Group workshops 4.7 service or repair service departments value £ years (FY22: 4.5 years) 0-1 Years 8% 205 • Over 27% of total Group gross profit generated 1-2 Y
Slide 18: Strategic update
Strategic update Full Year Results FY21
Slide 19: Consistent Group Strategy
Consistent Group Strategy Mission & Values 19 Vertu Motors to be the most admired and To aim for every dealership to be the best To deliver an outstanding customer motoring respected dealer group in the automotive retailer in their respective town or city experience through honesty and trust industr
Slide 20: Building a sustainable business since 2006
Building a sustainable business since 2006 20 Environmental Social Governance • £3.3m investment in solar • High levels of colleague • Strong Values culture panels satisfaction • Stable management and Board • 100% renewable energy in 2023 • Community programmes with tone set from the top • £1.2m LED
Slide 21: FY23 Highlights – Continued execution against strategic goals
FY23 Highlights – Continued execution against strategic goals 21 Colleague and Growth Digitalisation Ancillary Businesses Customer Focus Successful completion of the substantial Continued development of the Vacancies reduced Businesses complementing the retail Helston acquisition technological platf
Slide 22: Growth – Helston acquisition, integration progressing as planned
Growth – Helston acquisition, integration progressing as planned 22 Integration: • Rebranding of the dealerships and their integration to Group websites complete • All dealerships now migrated to Group standard sales, finance and reporting systems. Colleague training is well advanced on Vertu proces
Slide 23: Growth delivered – BMW North acquired December 2020
Growth delivered – BMW North acquired December 2020 23 Rolling 12 months cumulative PBT £’m (BMW Division) 6.3 6.5 6.3 5.5 5.6 5.7 5.3 5.6 5.5 5.6 5.2 5.3 4.4 4.4 4.6 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb 2021 2022 2022 2023 2023 2023 2023 2023 2023 2023 2023 2023 2023 2023 202
Slide 24: Digitalisation – Vertu Insights launches Q1 FY24
Digitalisation – Vertu Insights launches Q1 FY24 24 Development of a new market leading used vehicle optimisation platform: Builds upon the “Vertu Valuations Engine” which has driven the move to consistent part exchange and ‘Sell My Car’ valuations online and instore in FY23. • New, scalable data mo
Slide 25: Digitalisation – Service Self Check In
Digitalisation – Service Self Check In 25 Digital Self-service check in for enhancing service customer journey: • Kiosks introduced in FY23 and now operational in all Group outlets (excluding Helston) • Interactive and efficient customer journey, high levels of customer satisfaction to date, provide
Slide 26: Ancillary Businesses
Ancillary Businesses 26 • PBT: £2.8m • PBT: £0.5m • Over 3,500 vans sold in FY23 with • Now been in operation for over 20 ‘Vision 500’ target to grow to 6,000 years but significantly impacted by per annum by FY26 lockdown measures • Customers interact over phone with • Over 800 vehicles delivered in
Slide 27: Current Trading & Outlook
Current Trading & Outlook 27 Current Trading Outlook • Trading profit above prior year levels in March and April • Improving new vehicle supply and robust Group order 2023 aided by acquisition performance bank • Like-for-like new vehicle volume growth delivered with • Tightness of used vehicle suppl
Slide 28: Summary
Summary 28 Group well-capitalised and asset backed Firepower to further expand operations and scale Digitalisation gathering pace in impact, benefiting customers and productivity People-focus provides talented, motivated colleagues to serve customers Group excited to benefit from pace of change and
Slide 29: Definitions of key terminology
Definitions of key terminology 29 Core: Comparison against FY2022 Dealerships that have traded for the full period of March 2021 to February 2022 and March 2022 to February 2023 Like-for-like: Dealerships that have comparable trading periods in two consecutive financial years, only the comparable pe
Slide 30: New Retail Vehicle Trends
New Retail Vehicle Trends 30 H1 H2 H1 H2 H1 H2 H1 H2 FY2020 FY2020 FY2021 FY2021 FY2022 FY2022 FY2023 FY2023 Selling price per unit [1] (£) 18,355 18,726 19,789 19,980 21,423 22,539 24,062 24,191 Gross profit per unit [1] (£) 1,418 1,524 1,436 1,714 1,688 2,205 2,105 2,246 Margin (Group) [1] 7.1% 7.
Slide 31: Fleet and Commercial Vehicle Trends
Fleet and Commercial Vehicle Trends 31 H1 H2 H1 H2 H1 H2 H1 H2 FY2020 FY2020 FY2021 FY2021 FY2022 FY2022 FY2023 FY2023 Selling price per unit (£) 20,662 20,518 21,494 23,494 23,850 24,874 24,109 25,730 Gross profit per unit (£) 603 683 679 834 878 1,046 988 1,049 Margin (Group) 3.4% 4.0% 3.8% 4.1% 4
Slide 32: Used Vehicle Trends
Used Vehicle Trends 32 H1 H2 H1 H2 H1 H2 H1 H2 FY2020 FY2020 FY2021 FY2021 FY2022 FY2022 FY2023 FY2023 Selling price per unit (£) 14,517 14,637 15,141 15,454 16,194 19,951 19,861 20,328 Gross profit per unit (£) 1,172 1,244 1,386 1,458 1,657 1,844 1,560 1,468 Margin (Group) 8.1% 8.5% 9.2% 9.4% 10.2%
Slide 33: Vehicle Volumes Sold
Vehicle Volumes Sold 33 FY23 vs FY22 FY23 vs FY22 Total units sold Like-for-like units sold +/- % +/- % 29,681 (14.0%) Used Trade 30,054 (10.3%) Used Trade 25,514 26,950 86,949 (10.1%) Used Retail 88,772 (7.0%) Used Retail 78,208 82,561 20,993 +6.6% 21,187 New Fleet & Agency Car SMMT (3.6%) New Flee
Slide 34: Dealership Portfolio
Dealership Portfolio Enlarged Bristol Street Vertu 34 Macklin Motors Helston Group Motors Motors Ford 20 19 1 189 sales outlets Vauxhall 16 15 1 Hyundai 12 9 3 Peugeot 11 6 2 3 Nissan 11 9 2 Volume Renault 9 8 1 Citroen 7 7 90 SEAT 4 4 Skoda 4 4 Kia 3 1 2 MG 3 2 1 82 Mazda 2 1 1 Total Volume 102 84
Slide 35: Disclaimer
Disclaimer 35 This presentation contains forward looking statements. Although the Group believes that the estimates and assumptions on which such statements are based are reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond the Group’s control. Th