Slide 1: 2016 Interim Results
2016 INTERIM RESULTS 28 JULY 2016
Slide 2: H1 2016 Highlights
H1 2016 HIGHLIGHTS Good New £100m Strong cash Distribution performance share buyback generation contract win across our over the next and continued for Jaguar portfolio of 12 months balance sheet Land Rover markets strength in Thailand H1 EPS +9% YoY 2
Slide 3: Attractively Positioned
ATTRACTIVELY POSITIONED TRADING PROFIT MIX DIVERSIFIED VALUE DRIVERS New & Used Vehicles F&I Service Parts Cash Generative Business Model with Strong Balance Sheet 3
Slide 4: Consistency of Performance
CONSISTENCY OF PERFORMANCE REVENUE +11.2% OPERATING PROFIT* +6.5% £3,756m £169.5m £159.2m £3,378m £3,336m £150.7m £147.5m £3,313m £137.6m £3,109m H1 2012 H1 2013 H1 2014 H1 2015 H1 2016 H1 2012 H1 2013 H1 2014 H1 2015 H1 2016 Note: * pre exceptional items and property profits of £17.3m in 2014 and £
Slide 5: H1 2016 Financials
H1 2016 FINANCIALS
Slide 6: Summary Profit & Loss Account
SUMMARY PROFIT & LOSS ACCOUNT ROBUST PROFIT GROWTH H1 2016 H1 2015 CHANGE CHANGE £M £M ACR CCR Sales 3,756.2 3,378.4 11.2% 9.6% +1.6% Operating profit 169.5 159.2 6.5% 3.3% +3.2% Profit before tax 165.0 153.0 7.8% 4.2% Tax rate (%)* 25.8 24.0 -180bps Basic adjusted EPS (p) 27.6 25.4 8.7% Dividend pe
Slide 7: Distribution
DISTRIBUTION H1 2016 H1 2015 CHANGE CHANGE TRADING PROFIT MIX £M £M ACR CCR Revenue 1,462.5 1,322.4 10.6% 6.2% +4.4% EM Europe Trading profit 134.3 124.9 7.5% 3.6% +3.9% UK* North South Trading margin % 9.2% 9.4% -20 bps Asia Asia 39% of Group 73% of Group Revenue Trading profit Note: All numbers at
Slide 8: Retail
RETAIL H1 2016 H1 2015 CHANGE CHANGE TRADING PROFIT MIX £M £M ACR CCR Revenue 2,293.7 2,056.0 11.6% 11.9% (0.3%) Trading profit 49.4 46.0 7.4% 6.7% +0.7% EM UK Trading margin % 2.2% 2.2% - Europe 61% of Group 27% of Group Revenue Trading profit Note: All numbers at actual exchange rates 8
Slide 9: Group Revenue Growth
GROUP REVENUE GROWTH Group Growth +11% +£168m (+12%) 3,700 3,756 UK +£103m (+47%) 3,600 +£90m South (+18%) Asia 3,500 (YoY £m +£50m Emerging revenue -£67m (+8%) Markets 3,400 growth) (-18%) +£34m (+12%) Australasia 3,378 North Asia Europe 3,300 H1 2015 H1 2016 3,200 Note: All numbers at actual excha
Slide 10: Group Trading Profit
GROUP TRADING PROFIT Group Growth +7% +£12.8m (+62%) 180 (YoY profit -£10.7m +£5.9m South 183.7 175 Asia growth) (-28%) (+14%) 170 +£5.5m 170.9 -£1.7m £m +£1.0m (+25%) Australasia North Asia (-4%) 165 (+11%) Emerging UK Europe 160 Markets 155 H1 2015 H1 2016 150 9.3% 2.4% 3.3% 4.6% 7.2% 10.4% 4.9% T
Slide 11: Overheads and Gross Margin
OVERHEADS AND GROSS MARGIN VEHICLES VALUE DRIVER MIX EFFECT OVERHEADS 9.5% Fixed cost Site / IT OF SALES, -10 bps YoY leverage investments Gross Margin Bridge 14.4% 14.2% 14.3% (-30bps) 14.0% (-20bps) +20bps 13.8% 14.0% 13.6% 13.4% 13.2% 13.0% H1 2015 Vehicles Mix New Margin Aftersales Margin H1 201
Slide 12: Profit & Loss Review
PROFIT & LOSS REVIEW H1 2016 H1 2015 £M £M 2016 GUIDANCE Trading profit 183.7 170.9 Tax rate Central costs (14.2) (11.7) 25% Net interest (4.5) (6.2) Profit before tax 165.0 153.0 Tax (42.6) (36.7) Interest cost up to £13m Tax % 25.8 24.0 Minority interest (MI) (3.7) (3.6) (excl. mark to market) Pro
Slide 13: Operating & Free Cash Flow
OPERATING & FREE CASH FLOW H1 H1 H1 H1 OPERATING CASH FLOW 2016 2015 FREE CASH FLOW 2016 2015 2016 GUIDANCE £M £M £M £M Operating profit 169.5 159.2 Operating cash flow 134.8 138.0 Capital expenditure Depreciation / amortisation 26.2 24.0 Net interest (5.2) (7.7) up to £85m Working capital (62.8) (4
Slide 14: Capital Allocation
CAPITAL ALLOCATION DISCIPLINED APPROACH • Capex and Working Capital 01 Organic investment • Key H1 investments: Singapore and UK Selective M&A leveraging • Contract win - JLR Thailand 02 our unique position • Focused on Distribution • 40% dividend payout ratio £300m returned to shareholders 03 Maxim
Slide 15: Business Update
BUSINESS UPDATE
Slide 16: Distribution and Retail
DISTRIBUTION RETAIL Strong new vehicle trends: revenue and Robust New & Used vehicle profit growth across majority of markets revenue trends. Lower Vehicles & higher Aftersales gross margin Gross margin expansion Car Parc growth supporting Aftersales 73% of trading profit 27% of trading profit 16
Slide 17: Strategic Update
STRATEGIC UPDATE ADAPTING TO LEVERAGE OUR STRENGTH EXAMPLES Australian Salesforce.com marketing-engine pilot going live in August 1st OEM global strategy and performance discussion held H1 2016 Global and local procurement teams in place: global headcount expanded by four 17
Slide 18: Delivering the Full Potential
DELIVERING THE FULL POTENTIAL ON ALL OUR REVENUE STREAMS Multiple options to drive better Aftersales asset utilisation Extended PDI* outside 30min opening hours customer hours “Express service” Extending opening to Internal work completed 2-3 technicians work suit local demand before customers arriv
Slide 19: Delivering the Full Potential: Used Cars
DELIVERING THE FULL POTENTIAL ON ALL OUR REVENUE STREAMS: USED CARS RIGA, LATVIA HYDE, UK Used Car space addition Dedicated ‘Approved Audi’ site 19
Slide 20: Thailand Contract Win
THAILAND CONTRACT WIN JAGUAR LAND ROVER DISTRIBUTION Entry into our 27th Long-standing Links to both Investing market: A small but and successful to accelerate growth & developing luxury partnership with JLR Become the OEM’s partner car market spanning 46 years of choice 20
Slide 21: Regional Performance Review
REGIONAL PERFORMANCE REVIEW
Slide 22: Australasia
AUSTRALASIA STRONG H1 PERFORMANCE OUTPERFORMING SUV & NON-MINING TRANSACTIONAL FX WITH SUBARU STATES DRIVING GROWTH H1: Yen GM neutral Subaru Volume +11.1% SUV Volume +11.4% H2: Yen GM adverse Market Share +30 bps New South Wales +7.3% H1 LFL REVENUE +10% H1 TRADING PROFIT +13% 7.2% Margin (+40 bps)
Slide 23: North Asia and South Asia
NORTH ASIA SOUTH ASIA VEHICLE MARKET DECLINE STRONG REVENUE & PROFIT GROWTH WEAKER CONSUMER AND GROWTH ACROSS VALUE DRIVERS CORPORATE CONFIDENCE Profit growth led by Vehicles (Hong Kong Mkt Vol –28%) but supported by all SOLID AFTERSALES PERFORMANCE MARKET SHARE - Inchcape HK Car Parc >150k units LE
Slide 24: UK: Operational Improvements on Track
UK OPERATIONAL IMPROVEMENTS ON TRACK Strong New Vehicle volume, GM% decline Operational 2016E TIV and site investments Uncertainty post Improved Used Vehicle performance to support EU referendum long-term Robust Aftersales performance growth Flat YoY from +2% H1 LFL REVENUE +10% H1 TRADING PROFIT -4
Slide 25: Emerging Markets and Europe
EMERGING MKTS EUROPE STRENGTH FROM OUR DIVERSIFICATION SOLID PERFORMANCE BROAD BASED GROWTH Greek vehicle market +8% Positive revenue trends across Market share 11.7% (+50 bps) all EM countries in H1 Belgian vehicle market +7% STRONG PERFORMANCE IN EASTERN Strong performance in Finland EUROPE – Roma
Slide 26: Strength from our diversified portfolio
Strength from Broad based Ignite strategy Distribution our diversified growth across narrowing in on contract win for portfolio of our five value opportunities & Jaguar Land markets drivers pilots starting Rover in Thailand 26
Slide 27: Looking Ahead
LOOKING AHEAD
Slide 28: 2016 Outlook
2016 OUTLOOK Attractive local level drivers across our revenue RESILIENT streams and some of our markets CONSTANT CURRENCY Difficult trading environment in Hong Kong and uncertainty post EU referendum in UK PERFORMANCE EXPECTED Growth in Aftersales: Expansion in 1-5 year Car Parc IN 2016 across the
Slide 29: Conclusion
CONCLUSION Continuation Strong cash Predominantly of our track generation, Diversified Distribution in record of new £100m profit streams APAC & EM delivering buyback growth announced 29
Slide 30: Appendix
APPENDIX
Slide 31: Definitions
DEFINITIONS LIKE-FOR-LIKE The following are excluded from like-for-like sales: EMERGING MARKETS COVERS THE FOLLOWING COUNTRIES: 1. Businesses that are acquired, from the date of acquisition until the 13th month of ownership The Balkans China 2. Businesses that are sold or closed The Baltics Africa 3
Slide 32: Cash Flow
CASH FLOW H1 H1 H1 H1 H1 H1 OPERATING CASH FLOW 2016 2015 FREE CASH FLOW 2016 2015 NET CASH 2016 2015 £M £M £M £M £M £M Operating profit 169.5 159.2 Operating cash flow 134.8 138.0 Free cash flow 43.2 64.8 Depreciation / amortisation 26.2 24.0 Net interest (5.2) (7.7) Share buy back (59.3) (50.0) Wo
Slide 33: * Inchcay
* Inchcay : _ ‘ | ee Fe i ; j y oe avy Je “ : in } =a af . *