Slide 1: 2015 Interim Results
2015 INTERIM RESULTS 30 JULY 2015
Slide 2: 100 Days Listening & Learning
100 DAYS Listening & Learning IN THE BUSINESS Spending time with our stakeholders 2
Slide 3: Our Winning Business Proposition
OUR WINNING BUSINESS PROPOSITION UNIQUELY POSITIONED IN A GROWTH INDUSTRY 3
Slide 4: New CEO – A Fresh Perspective
NEW CEO – A FRESH PERSPECTIVE INITIAL OBSERVATIONS Observing through a B2B & Customer Centric lens 4
Slide 5: Top-line and Margin Growth
TOP-LINE AND MARGIN GROWTH REVENUE H1 OPERATING MARGIN % +6.3% CCR 4.8 +1.3% ACR 4.6 4.7 4.4 4.5 4.5 4.4 OPERATING PROFIT 4.2 4.0 +6.3% CCR 3.8 +5.6% ACR 2012 2013 2014 2015 20 BPS OF OPERATING MARGIN EXPANSION Note: All numbers and growth rates pre exceptional items and property profits 5
Slide 6: Results Overview
RESULTS OVERVIEW
Slide 7: Summary Profit & Loss Account
SUMMARY PROFIT & LOSS ACCOUNT H1 2015 H1 2014 CHANGE CHANGE £M £M ACR CCR Sales 3,378.4 3,336.0 1.3% 6.3% Operating profit 159.2 168.0 (5.2)% (4.9)% Underlying operating profit 159.2 150.7 5.6% 6.3% Profit before tax 153.0 162.1 (5.6)% (6.1)% Tax rate (%)* 24 24 - - Basic adjusted EPS (p) 25.4 27.1
Slide 8: Gross Margin and Overhead Analysis
GROSS MARGIN AND OVERHEAD ANALYSIS GM 14.3% STABLE YoY Balanced value drivers mix effect Aftersales margin remained strong OVERHEADS 9.6% OF SALES, -10 BPS YoY* Fixed cost leverage Continued cost discipline *Note: H1 2014 included a property disposal profit of £17.3m. YoY change excludes this from t
Slide 9: Positive Group Mix Effect +20 bps
POSITIVE GROUP MIX EFFECT +20 BPS H1 REGIONAL MARGIN ANALYSIS GROUP +20 BPS Australasia 6.8% -20 BPS North Asia 10.5% -30 BPS UK 2.8% -20 BPS South Asia* 9.4% -30 BPS Emerging mkts 4.3% +90 BPS Europe 3.4% +10 BPS * South Asia H1 2014 trading margin excludes property disposal profit 9
Slide 10: Group Trading Profit
GROUP TRADING PROFIT Reported Growth -5.0% Underlying Growth +5.1% 185 180 175 179.9 0 170 (17.3) 9.2 170.9 165 1.1 1.1 160 162.6 (1.9) (1.2) 155 150 H1 2014 Property H1 2014 Europe Australasia South Asia UK North Asia Emerging H1 2015 reported profit underlying Markets reported Note: All numbers at
Slide 11: Net Finance Costs
NET FINANCE COSTS H1 2015 H1 2014 £M £M Bank and loan interest 0.7 0.6 Stock holding interest (9.3) (9.3) Interest on private placement notes (1.5) (1.4) Pension interest net 2.2 2.6 Other 1.6 1.0 Interest excluding mark to market (6.3) (6.5) FV on private placement 7.6 13.0 FV on cross currency int
Slide 12: Impact of Currency
IMPACT OF CURRENCY REVENUE -5.0% OPERATING PROFIT* -0.7% *Note: H1 2014 included a property disposal profit of £17.3m. YoY change excludes this from the prior year base 12
Slide 13: Cash Flow
CASH FLOW H1 H1 H1 H1 H1 H1 OPERATING CASH FLOW 2015 2014 FREE CASH FLOW 2015 2014 NET CASH 2015 2014 £M £M £M £M £M £M Operating profit 159.2 168.0 Operating cash flow 138.0 201.3 Free cash flow 64.8 148.3 Depreciation / amortisation 24.0 22.0 Net interest (7.7) (7.4) Share issue - 0.9 Other non ca
Slide 14: Guidance – Full Year 2015
GUIDANCE – FULL YEAR 2015 Tax rate Interest cost 24% c£14m (excl. mark to market) Capital Net cash expenditure c£130m £85m 14
Slide 15: Committed to Cash and Capital Discipline
COMMITTED TO CASH AND CAPITAL DISCIPLINE Capex investment Key H1 investments Pandan Singapore to drive growth Dire Dawa Ethiopia and pricing power BMW/MINI Tonbridge Maximise Interim dividend 6.8p shareholder returns up 7.9% YoY £200m returned to shareholders Efficient capital since July 2013 throug
Slide 16: Business Update
BUSINESS UPDATE
Slide 17: Better Product Availability in H2
BETTER PRODUCT AVAILABILITY IN H2 BMW / MINI Land Rover / Mercedes Engaging with Jaguar Benz our customers Consistent pipeline of excellent vehicles from our brand partners Subaru Toyota / Lexus VW / Audi / Porsche Toyota Euro 6 vehicles launching in H2 17
Slide 18: Driving Customer Conversion with Digital
DRIVING CUSTOMER Personalisation CONVERSION WITH DIGITAL Visual reminder Group-wide Inchcape Rich content Digital Standards driving customer traffic to Retail centres - and Aftersales centres Instant call for action Personalisation with rich media content Warranty with click-through maintenance serv
Slide 19: South Asia Stronger H2
SOUTH ASIA STRONGER H2 H1 guaranteed COE price pressure taken, positioned RATIONAL PRICING IN SINGAPORE for a stronger H2 POST APRIL 80,000 75,000 SINGAPORE: DE-REGISTRATIONS 70,000 65,000 H1 2015 60,000 46k units 55,000 +75% YoY 50,000 07/01/15 26/02/15 17/04/15 06/06/15 26/07/15 Note: CAT A COE bi
Slide 20: North Asia on Track for a Strong Year
NORTH ASIA ON TRACK FOR A STRONG YEAR Multi-year diesel commercial vehicle (DCV) replacement scheme driving growth in Hong Kong H1 HONG KONG NEW VOLUME: MARKET Total Market +12% SHARE PC +3% +340 BPS CV & Taxi +35% 20
Slide 21: Australasia Outperforming the Market
AUSTRALASIA OUTPERFORMING THE MARKET SUV GROWTH PREMIUMISATION PRODUCTS H1 +14% OF DEMAND Better H2 Subaru (Market +3%) Premium / Luxury availability Brands growing faster than the market 21
Slide 22: UK Premium and Corporate Sales Driving Growth
UK PREMIUM AND CORPORATE SALES DRIVING GROWTH UK Premium Brand Portfolio taking share NEW ONLINE Investing (IT / Sites) to support growth PLATFORM H1 LEADS PCP financing shortening the replacement cycle +24% YoY 22
Slide 23: Emerging Markets Resilient Performance
EMERGING MARKETS RESILIENT PERFORMANCE NEW TOYOTA DIRE DAWA FACILITY IN ETHIOPIA >50% Car Parc growth in the past 5 years Opened January 2015 New car trends down YoY in South America, growth in other value drivers Eastern Europe: Solid H1 performance 23
Slide 24: Russia Trading as Expected
RUSSIA TRADING AS EXPECTED MARCH 2015 EXPECTATIONS OUTCOME DEMAND • Rouble devaluation increasing local prices and impacting demand • Aftersales resilience • Premium / Luxury brand resilience • Higher Used car demand MARGIN OPPORTUNITY Russia less attractive as a push market, improving supply-demand
Slide 25: Europe in Control in Greece
EUROPE IN CONTROL IN GREECE Limited balance sheet exposure Defensive Aftersales Relative strength, local competition lack our scale Total Europe region: 6% of 2014 trading profit LONG TERM Replacement cycle growth in Greece, driven by the aged Car Parc (av. age 14yrs) 25
Slide 26: Looking Ahead
LOOKING AHEAD
Slide 27: 2015 Outlook
2015 OUTLOOK Good visibility across our markets and value drivers ROBUST UNDERLYING Better product availability in H2 CONSTANT CURRENCY Aftersales – Service and Parts, to benefit from PERFORMANCE growth of the high retention 1-5 year Car Parc EXPECTED across the majority of our markets IN 2015 Opera
Slide 28: Conclusion
CONCLUSION Strong fundamentals A fresh perspective: Customer centricity & B2B focus Revenue & margin growth in H1 Stronger CCR H2 performance expected 28
Slide 29: Appendix
APPENDIX
Slide 30: Definitions
DEFINITIONS LIKE-FOR-LIKE The following are excluded from like-for-like sales: This currently covers the 1. Businesses that are acquired, from the date of following countries: acquisition until the 13th month of ownership The Balkans China 2. Businesses that are sold or closed 3. Retail centres that
Slide 31: Short and Long Term Momentum
SHORT AND LONG TERM MOMENTUM REVENUE £BN +1.3% OPERATING PROFIT £m +5.6% 3.5 +6.3% CCR 170 +6.3% CCR 3.3 150 3.313 3.336 3.378 159.2 3.1 147.5 150.7 3.109 130 137.6 2.9 2.7 110 H1 2012 H1 2013 H1 2014 H1 2015 H1 2012 H1 2013 H1 2014 H1 2015 % PROFIT BEFORE TAX £m OPERATING MARGIN % 160 +5.7% 4.8 +20
Slide 32: Capex Investment
CAPEX INVESTMENT Capacity expansion £30m • UK • Australia • Singapore Greenfield expansion £5m • Ethiopia • Australia IT upgrades £28m Maintenance capex £22m Total £85m 32
Slide 33: Impact of Currency on Operating Profit
IMPACT OF CURRENCY ON OPERATING PROFIT 2014 @ ACTUAL 2015 @ 2014 2015 @ ACTUAL H1 2015 (£M) IMPACT EXCHANGE RATES ACTUAL RATES EXCHANGE RATES Australasia 43.5 45.2 42.3 (2.9) Europe 11.4 10.6 9.5 (1.1) North Asia 29.1 35.0 38.3 3.3 South Asia 36.8 20.1 20.6 0.5 Emerging Markets 21.7 21.4 21.7 0.3 To
Slide 34: Broad Geographic Spread – Truly International
BROAD GEOGRAPHIC SPREAD – TRULY INTERNATIONAL United Kingdom R Australasia South Asia North Asia Europe 41.3% of '15 Group Revenue 18.3% of '15 Group Revenue 6.5% of '15 Group Revenue 10.8% of '15 Group Revenue 8.3% of '15 Group Revenue 22.5% of '15 Group Trading 24.8% of '15 Group Trading 12.1% of
Slide 35: Disclaimer
DISCLAIMER The information and opinions contained in this presentation are provided as at the date of the document. Certain statements in this presentation, particularly those regarding the future prospects of Inchcape plc (“Inchcape”), returns, pricing, acquisitions, divestments, industry growth or