Slide 1: 2011 Interim Results
2011 Interim Results 28 July 2011 Creating the ultimate customer experience for the world’s leading luxury and premium automotive brands
Slide 2: Interim Results – André Lacroix, Group Chief Executive
2011 Interim Results 28 July 2011 André Lacroix Group Chief Executive Creating the ultimate customer experience for the world’s leading luxury and premium automotive brands
Slide 3: Good earnings growth and robust cash generation
Good earnings growth and robust cash generation Revenue Operating profit* Return on sales* 3.5 151.1 5.0 4.6 4.5 160.0 3.4 3,298 4.0 150.0 3.3 140.0 131.8 4.0 3,095 123.7 3.1 Sales £bn 3.2 130.0 3.1 120.0 3.0 £m 3.0 2,930 % 110.0 2.9 2,786 100.0 87.4 2.0 2.8 90.0 2.7 80.0 1.0 2.6 70.0 2.5 H1 2008 H1
Slide 4: Revenue in line with our expectations
Revenue in line with our expectations Sales YoY% Q1 2011 Q2 2011 Half year 2011 (0.6)% (10.2)% (5.3)% Group (2.0)% (2.0)% (2.0)% UK (23.7)% (25.7)% (24.7)% Europe Group Chief Executive Australasia 16.8% (27.6)% (5.4)% North Asia 17.0% (30.4)% (6.7)% South Asia (27.1)% (25.5)% (26.3)% Russia 21.4% 24
Slide 5: Operational focus on gross margin, cost and cash
Operational focus on gross margin, cost and cash H1 2011 H1 2010 ∆ £m £m Revenue 2,929.9 3,141.9 (6.7)% Gross profit 435.5 461.6 (5.7)% Group Chief Executive Gross margin 14.9% 14.7% 0.2ppt Costs (303.7) (336.0) (9.6)% Operating profit* 131.8 125.6 4.9% ROS 4.5% 4.0% 0.5ppt Interest & JVs (5.0) (8.4
Slide 6: Significant cost reduction: 9% overall and 4% underlying
Significant cost reduction: 9% overall and 4% underlying 9% reduction overall 4% underlying reduction 350 Group Chief Executive 340 5 330 320 332 (17) 310 (6) £m 300 (10) 290 320 280 304 270 260 H1 2010 Inflation Restructuring H1 2011 Pension one-off Variable cost H1 2011 Actual Underlying reduction
Slide 7: Broad based EBIT margin progression
Broad based EBIT margin progression Return on sales* H1 2009, H1 2010 & H1 2011 YoY Change 3.2% Group 4.0% +50 BPS 4.5% 4.6% Australasia 5.5% +100 BPS 6.5% Group Chief Executive 4.7% North Asia 8.8% +90 BPS 9.7% 9.8% South Asia 8.7% +60 BPS 9.3% 2.0% UK 2.8% +50 BPS 3.3% 2.5% Europe 3.4% -80 BPS 2.6
Slide 8: Full year guidance on supply restrictions unchanged
Full year guidance on supply restrictions unchanged Supply situation Impact on Inchcape TMC global production YoY Δ Full year expected loss of sales Mar Apr May Jun Group Chief Executive - Europe 1 month (20) S Asia 1½ months % y-o-y (40) N Asia 2 months (60) Australia 3 months (80) RoW Not material
Slide 9: Confidence in the Group’s earnings growth potential
Confidence in the Group’s earnings growth potential • 10.1% PBT growth and 4.5% ROS • Solid performance expected in 2011 • Exciting structural growth prospects • Interim dividend announced of 3.6p per share, in line with our progressive dividend policy Group Chief Executive H1 Revenue H1 RoS* H1 PBT
Slide 10: Financial performance – John McConnell
Financial performance 28 July 2011 John McConnell Group Finance Director Creating the ultimate customer experience for the world’s leading luxury and premium automotive brands
Slide 11: Summary profit & loss account
Summary profit & loss account H1 2011 H1 2010 Change £m £m % Sales 2,929.9 3,095.2 (5.3)% Operating profit* 131.8 123.7 6.5% Group Chief Executive Net financing costs (3.9) (8.5) (54.1)% Profit before tax* 126.8 115.2 10.1% Tax rate (%) 26.0 28.9 (2.9)ppt Basic adjusted EPS (p) 19.6 17.2 14.0% * Bef
Slide 12: Impact of currency on operating profit
Impact of currency on operating profit* H1 2011 2010 @ actual 2011 @ 2010 2011 @ actual Impact exchange rates actual rates exchange rates Australasia 37.4 30.8 33.9 3.1 Europe 18.8 10.9 10.9 - Group Chief Executive North Asia 18.5 20.2 19.0 (1.2) South Asia 17.3 12.9 13.6 0.7 Russia and EM 8.6 28.1
Slide 13: Segmental performance
Segmental performance H1 2011 H1 2010 Change % £m £m Sales Distribution 1,168.7 1,355.7 (13.8)% Retail 1,761.2 1,739.5 1.2% Group Chief Executive 2,929.9 3,095.2 (5.3)% Operating profit Distribution 87.7 91.2 (3.8)% Retail 51.1 40.6 25.9% Central costs (7.0) (8.1) 13.6% 131.8 123.7 6.5% Operating ma
Slide 14: Group: underlying trading profit
Group: underlying trading profit 160.0 3.8 0.5 4.3 7.5 9.8 (7.9) 130.0 Group Chief Executive (3.7) (7.3) 13 8 .8 £m 13 1.8 132.0 100.0 H1 2010 Romanian land Australian 2010 underlying Russia & UK Australasia North Asia Europe Sout h Asia H1 2011 report ed report ed impairment propert y sale Emerging
Slide 15: Distribution: underlying trading profit
Distribution: underlying trading profit 2011 Trading margins H1 2011 reported 87.7 Group reported: 7.5% +80 BPS South Asia (3.7) South Asia: 9.3% +60 BPS Europe (6.9) Europe: 3.2% -80 BPS UK 0.4 Group Chief UK:Executive 17.6% +400 BPS North Asia 0.5 North Asia: 9.7% +90 BPS Russia & Emerging Markets
Slide 16: Retail: underlying trading profit
Retail: underlying trading profit 2011 Trading margins H1 2011 51.1 Group: 2.9% +60 BPS Russia & Emerging Markets 8.3 Russia and Emerging Markets: 2.8% +180 BPS Group Chief Executive UK 3.9 UK: 3.0% +40 BPS Australasia (0.7) Australasia: 3.6% -40 BPS Europe (1.0) Europe: (0.1)% -100 BPS H1 2010 40.6
Slide 17: Regional analysis: Underlying trading profit
Regional analysis: Underlying trading profit H1 2010 H1 2011 Russia and Emerging Markets Russia and Emerging 12% Markets Australasia Australasia 19% 23% Group Chief Executive 24% UK 24% £132.0m £138.8m North Asia UK North Asia 14% 25% 14% Europe South Asia South Asia 14% Europe 10% 13% 8% * Note: tr
Slide 18: Cash flow
Cash flow Operating cash flow H1 2011 H1 2010 Free cash flow H1 2011 H1 2010 Net cash H1 2011 H1 2010 £m £m £m £m £m £m Operating profit 131.8 123.7 Operating cash 73.0 104.5 Free cash flow 18.8 69.6 flow Depreciation / amortisation 16.0 23.3 Net interest (2.3) (4.8) Acquisitions (19.6) - Working ca
Slide 19: Net financing costs
Net financing costs H1 2011 H1 2010 £m £m Bank and loan interest (1.1) (0.5) Stock holding interest 6.3 7.0 Interest on private placement notes 1.8 1.6 Group Chief Executive Pension interest net (0.4) (0.2) Other including capitalised interest adj. (2.2) (1.9) Interest excluding mark to market 4.4 6
Slide 20: Guidance – Full Year 2011
Guidance – Full Year 2011 • Tax rate 26% • Interest cost c £12m Group Chief Executive (excl. mark to market) • Capital expenditure £110m • Net cash c £130m 20
Slide 21: Business outlook & strategic update
Business outlook & strategic update André Lacroix Group Chief Executive Creating the ultimate customer experience for the world’s leading luxury and premium automotive brands
Slide 22: Vision and Customer 1st strategy remain firmly in place during the recovery
Vision and Customer 1st strategy remain firmly in place during the recovery To be the world’s most customer centric automotive retail group Group Chief Executive STRENGTHEN EXPAND Superior customer value Consolidation in high proposition through margin / high growth Inchcape Advantage areas 22
Slide 23: Primary focus on organic growth through strong operational discipline on Top Five Priorities
Primary focus on organic growth through strong operational discipline on Top Five Priorities Customer 1st strategy to create differentiation Group Chief Executive Commercial initiatives to grow revenues ahead of competitors Cash initiatives to grow profit and operating cash faster than revenue Brand
Slide 24: 2011 Outlook
2011 Outlook • Continuation of an uneven global economic recovery. • Weaker second half: • Temporary supply restriction in Asia, Australia and Europe • Challenging market conditions for Executive Group Chief New cars in Greece and the UK. • Strong demand for premium and luxury vehicles in Russia and
Slide 25: UK Retail
UK Retail Record EBIT margin performance 2011 TIV est.* FY estimate: 1.9m, -6% vs. 2010 2011 H1 • Continued to grow market share through superior Inchcape Advantage Customer 1st processes and upgraded websites. achievements • Capitalised on strong new product launches (Audi A6/A7, BMW 6 series coupé
Slide 26: Europe
Europe Resilient performance despite temporary supply restrictions and challenging conditions in Greece Belgium Greece 2011 TIV est.* FY estimate: 567k, -5% vs. 2010 FY estimate: 90k, -37% vs. 2010 2011 H1 • Successfully established clear Toyota brand positioning: strength • Maintained market leader
Slide 27: South Asia
South Asia Margin progression despite significant market decline and supply restrictions Singapore 2011 TIV est.* FY estimate: 40k, -24% vs. 2010 2011 H1 • Gained maximum benefit from new product launches (Lexus CT200h, Suzuki Swift). achievements • Deepened segment penetration with new variantsChie
Slide 28: Ave Car Age (in Years)
Singapore Car Market Certificate of Entitlement (COE) has 10-year life span After 10 years, customer must renew their COE or scrap the car 000’ vehicles 8 2012-2015 CAGR 25.1% 7 ry 6 o ve rec Ave Car Age (in Years) t rke Total Industry Volume (TIV) a 5 Group Chief Executive M Average Age of Car (Yea
Slide 29: North Asia
North Asia Margin progression despite supply restrictions in Q2 Hong Kong 2011 TIV est.* FY estimate: 40k, +7% vs. 2010 2011 H1 • Continued to build market share in the MPV segments with strong marketing campaigns on Noah, Previa, Wish and Alphard. achievements • Established significant share in new
Slide 30: Australasia
Australasia Stable profit despite Q2 supply restrictions Australia Distribution Australia Retail 2011 TIV est.* FY estimate: 940k, -9% vs. 2010 2011 H1 • Maintained strong market share (of 4%) and operating profit • Leveraged new model launches and special editions (Subaru achievements despite signi
Slide 31: Russia
Russia Strong operational leverage with profit growth of 84% 2011TIV est.* FY estimate: 2.4m, +26% vs. 2010 2011 H1 • Strong sales performance driven by disciplined Inchcape Advantage KPI management and new product launches. achievements • Grew Used car performance with ‘Approved’ programmes and sal
Slide 32: Emerging Markets
Emerging Markets Strong operational leverage: 160BPS EBIT margin improvement The Baltics The Balkans Poland South America Africa China 2011 TIV est.* FY estimate: 38k, +51% FY estimate: 130k, flat FY estimate: 19.5k, flat Chile: 320k, +10% vs. 2010 Data not available 13.4m, +12.7% vs. vs. 2010 vs. 2
Slide 33: Update on our expansion strategy
Update on our expansion strategy Russia Completed purchase of Musa Motors and opening of new site for BMW/Jaguar-Land Rover in July China: 3S site under construction due to complete Q4 2011 Shaoxing Group Chief Executive China: Porsche retail franchise awarded. 3S site under Nanchang construction, c
Slide 34: Capex investment in 2011
Capex investment in 2011 March June guidance guidance Capacity expansion £57m £41m Chile Peru Russia Poland Group Chief Executive Greenfield expansion £26m £20m JLR Shaoxing Porsche UK Standards upgrade £16m £13m UK Singapore IT Upgrades £19m £19m Maintenance capex £17m £17m £135m £110m Leveraging o
Slide 35: Exciting growth prospects
Exciting growth prospects Global TIV Global Car Parc +33% +17% Group Chief Executive million million Source: Global Insight Source: JD Power Growth Growth opportunities opportunities across across the value chain the value chain 35
Slide 36: Our primary focus remains organic growth management
Our primary focus remains organic growth management Hong Kong Singapore China 38k At Peak 15% 53k 133% 74% 17m At Peak 47% 2010 Growth % to 2010-15 2010 Growth % to 2010-15 2010 Growth % to 2010-15 TIV historic peak growth TIV historic peak growth TIV historic peak growth Group Chief Executive Austr
Slide 37: Inchcape uniquely positioned to take advantage of key global trends
Inchcape uniquely positioned to take advantage of key global trends Strongest players Broad based will lead industry global recovery consolidation Group Chief Executive Car Parc Structural growth growth in both led by wealth the fast Technology will creation in growing and create value and APAC/Emer
Slide 38: Increasing car penetration and premiumisation
Increasing car penetration and premiumisation • The emerging middle classes will be the driver of growth in Asia-Pacific and Emerging Markets Group Chief Executive • 21 of Inchcape’s 26 markets are in APAC and the Emerging Markets • Inchcape has scale, +700m people from the Emerging management exper
Slide 39: Uniquely positioned for growth in high margin premium sector and fast growing APAC / Emerging Markets
Uniquely positioned for growth in high margin premium sector and fast growing APAC / Emerging Markets Group Chief Executive Inchcape % Inchcape % Inchcape GDP growth TIV growth Car parc markets Revenue Trading profit CAGR CAGR growth 2006-10 2006-10 2010-15 2010-15 CAGR (Source: Global Insight) 2010
Slide 40: Appendices
Appendices Creating the ultimate customer experience for the world’s leading luxury and premium automotive brands
Slide 41: Appendix V – 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 42: Broad geographic spread – truly international
Broad geographic spread – truly international United Kingdom (MLP) R Australasia South Asia North Asia Europe 36.1% of ’10 Group Revenue 17.5% of ’10 Group Revenue 6.3% of ’10 Group Revenue 7.3% of ’10 Group Revenue 14.8% of ’10 Group Revenue 22.5% of ’10 Group Trading 25.2% of ’10 Group Trading 14.
Slide 43: Creating the ultimate customer experience for the world’s leading luxury and premium automotive brands
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