Slide 1: 2013 Interim Results
2013 Interim Results 2 August 2013
Slide 2: André Lacroix, Group Chief Executive
André Lacroix Group Chief Executive
Slide 3: Record H1 PBT with double digit earnings growth
Record H1 PBT with double digit earnings growth Revenue Operating profit* 153.7 Operating Margin* 3.5 3,313 4.8 4.6 150.0 137.6 4.6 4.5 3.3 140.0 131.8 4.4 3,095 3,109 130.0 123.7 4.4 3.1 £bn £m % 2,930 120.0 4.2 4.0 2.9 110.0 4.0 2.7 100.0 3.8 H1 2010 H1 2011 H1 2012 H1 2013 H1 2010 H1 2011 H1 2012
Slide 4: APAC / EM: Strong market share positions across small and medium size markets
APAC / EM: Strong market share positions across small and medium size markets H1 2013 Trading Profit • APAC / EM for Inchcape primarily UK & Europe represents high quality distribution 30% and vertically integrated operations in 21 small and medium size markets APAC / EM 11x Vertically Integrated
Slide 5: Record H1 Trading Profit
Record H1 Trading Profit Group H1 Analysis Regional Margin Analysis GM 14.3% -10 BPS YoY North Asia 10.5% +30 BPS Record OP • Strong pricing power performance on new vehicles in distribution markets offset by South Asia 8.9% -130 BPS competitive pressures in the UK and Russia • Used car margin press
Slide 6: Flat underlying H1 LFL cost base
Flat underlying H1 LFL cost base 58 15 (7) (124) 6 686 (6) £m 613 (7) 318 310 2008 Adj* Inflation Non LFL Cost 2012 H1 2012 Inflation Non LFL Property Cost H1 2013** Reduction Profit Reduction Continued discipline: H1 cost reduction offsets inflation * 2008 Adj reflects a £25m increase for the Musa
Slide 7: Confidence in the Group's earnings potential
Confidence in the Group’s earnings potential • Record H1 PBT of £147m, +10.7% YoY • Robust performance expected in 2013 • H1 2013 dividend of 5.7p, up 43% YoY • Share buyback programme announced, £100m over 12 months H1 Revenue (£m) Operating Margin % PBT (£m) 3.5 3,313 5.0 4.6 160.0 147.0 4.5 3.3 3
Slide 8: Confidence in the Group's cash generation
Confidence in the Group’s cash generation Share buyback programme, £100m over 12 months • Priority to invest organically, working capital and capex • Retain the capacity for bolt-on M&A opportunities • Targeted capital structure of retaining a net cash position provides scope for a return of surplus
Slide 9: John McConnell, Group Finance Director
John McConnell Group Finance Director
Slide 10: Summary profit & loss account
Summary profit & loss account H1 2013 H1 2012** Change £m £m % Sales 3,312.9 3,108.7 6.6 Operating profit* 153.7 137.6 11.7 Net financing costs* 6.7 4.6 (45.7) Profit before tax* 147.0 132.8 10.7 Tax rate (%)* 25.0 26.1 -110 BPS Basic adjusted EPS (p) 22.9 20.7 10.6 * Pre exceptional items ** H1 201
Slide 11: Impact of currency on operating profit
Impact of currency on operating profit* 2012 @ actual 2013 @ 2012 2013 @ actual H1 2013 (£m) Impact exchange rates actual rates exchange rates Australasia 35.1 42.0 42.0 - Europe 10.3 10.0 10.4 0.4 North Asia 25.6 27.3 28.0 0.7 South Asia 17.5 14.8 15.4 0.6 Russia and EM 24.6 32.8 33.3 0.5 Total ove
Slide 12: Segmental performance
Segmental performance H1 2013 H1 2012** Change £m £m % Sales Distribution 1,287.8 1,274.8 1.0 Retail 2,025.1 1,833.9 10.4 3,312.9 3,108.7 6.6 Operating profit* Distribution 115.6 98.7 17.1 Retail 51.5 51.6 (0.2) Central costs (13.4) (12.7) (5.5) 153.7 137.6 11.7 Operating margin Distribution 9.0 7.7
Slide 13: Group: trading profit
Group: trading profit Reported Growth +11.2% Underlying Growth +7.1% 180.0 6.2 6.9 2.5 160.0 2.4 0.8 0.1 Trivett £4.2m 140.0 £m (2.1) 160.9 167.1 150.3 120.0 100.0 H1 2012 South Asia Europe UK North Asia Russia & Australasia H1 2013 Property H1 2013 Emerging Underlying Profit Reported Markets Note:
Slide 14: Distribution: trading profit
Distribution: trading profit H1 2013 H1 2013 Underlying Trading margins 115.6 Reported Property 6.2 Distribution* 8.5% +80 BPS Profit H1 2013 Russia and Emerging Markets* 11.7% +200 BPS 109.4 Underlying Russia & Australasia 7.9% +140 BPS Emerging 5.1 Markets North Asia 10.5% +30 BPS Australasia 4.3
Slide 15: Retail: trading profit
Retail: trading profit H1 2013 Trading margins H1 2013 51.5 Retail 2.5% -30 BPS Australasia 2.6 Australasia 3.3% -80 BPS Europe 0.2% +30 BPS Europe 0.2 UK 3.0% -20 BPS Russia and Emerging Markets 1.3% -60 BPS UK (0.3) Russia & Emerging (2.6) Markets H1 2012 51.6 40.0 45.0 £m 50.0 55.0 Note: Pre exce
Slide 16: Regional analysis: trading profit
Regional analysis: trading profit H1 2012 H1 2013 Russia and Emerging Markets Russia and 16% Emerging Markets Australasia 17% Australasia 23% 26% £150.3m £160.9m UK UK 25% 24% North Asia 17% North Asia 17% Europe Europe South Asia 6% South Asia 7% 12% 10% Note: Pre exceptional items. H1 2013 exclude
Slide 17: Cash flow
Cash flow Operating cash flow H1 H1 Free cash flow H1 H1 Net cash H1 H1 2013 2012 2013 2012 2013 2012 £m £m £m £m £m £m Operating profit* 153.7 137.6 Operating cash flow 87.7 77.2 Free cash flow 6.7 12.0 Depreciation / amortisation 20.2 16.4 Net interest (5.9) (9.7) Share issue 6.8 2.5 Working capit
Slide 18: Net finance costs
Net finance costs H1 2013 H1 2012* £m £m Bank and loan interest 1.1 1.3 Stock holding interest (10.4) (8.0) Interest on private placement notes (1.4) (2.3) Pension interest net 2.7 0.4 Other including capitalised interest adj. 0.6 1.7 Interest excluding mark to market (7.4) (6.9) FV on private place
Slide 19: Guidance – Full Year 2013
Guidance – Full Year 2013 Tax rate 25% Interest cost (excl. mark to market) c £16m Capital expenditure £110m Net Cash c £180m* * Pre share buyback 19
Slide 20: Business update and outlook
Business update And outlook
Slide 21: Inchcape Customer 1st Strategy
Inchcape Customer 1st Strategy STRENGTHEN EXPAND Creating an Superior customer incredible Selective customer value proposition investment in high experience for the through Inchcape best car brands in margin / high Advantage the world growth areas 21
Slide 22: Operational discipline on Top Five Priorities
Operational discipline on Top Five Priorities Customer 1st strategy to create differentiation Commercial initiatives Growing Growing to grow revenues ahead of market aftersales competitors share Controlling Selective Cash initiatives Improving to grow profit and operating working capital margin cash
Slide 23: 2013 Outlook
2013 Outlook • UK replacement cycle, confidence improvement and OEM initiatives support new car H2 outlook. Continued pressure on vehicle margins • H2 Europe new car market to remain weak, broadly in-line with H1 • Singapore set to be slightly down in H2 ahead of a recovery 2014 onwards • Hong Kong
Slide 24: Strong 2013 model line-up
Strong 2013 model line-up Land Rover / VW / Audi / BMW / MINI Jaguar Mercedes Benz Subaru Toyota / Lexus Porsche Z4 Range Rover A Class Forester Auris Golf H1 3 Series GT F Type E Class Rav 4 A3 Sportback MINI Paceman Cayman X5 Range Rover Sport CLA Outback Diesel Auris Wagon RS6 H2 4 Series S Class
Slide 25: UK: Record H1 OP
UK Record H1 OP 2013 TIV est. FY estimate: 2.2m, +7.6% vs. 2012 2013 H1 • LFL sales +7.9% • UK car parc < 3 years old now growing, supporting aftersales • Upgraded facilities opened at VW Wirral and Swindon • Online service booking facility rolled out across further brands • Vehicle margin pressure
Slide 26: Europe
Europe Resilient performance Belgium Greece 2013 TIV est. FY estimate: 541k, flat vs. 2012 FY estimate: 55k, -6% vs. 2012 2013 H1 • Market share +20bps year on year • Market share +110bps year on year • Successful Rav 4 marketing campaign • Head office relocation in 2012 has continued • No 1 Aftersa
Slide 27: South Asia
South Asia Resilient performance Singapore / Brunei 2013 TIV est. FY estimate*: 34k, -10% vs. 2012 2013 H1 • Modernisations of the flagship sites: Toyota World and Lexus Boutique • Car parc aged further to circa 6 years old • Positive de-registrations for 10 consecutive months to June 2013 supportin
Slide 28: North Asia
North Asia Record H1 OP Hong Kong / Macau / Guam / Saipan 2013 TIV est. HK FY estimate: 46k, +6% vs. 2012 2013 H1 • Hong Kong H1 TIV +15.8%, driven by tax incentive change on 1st April • Market share leadership in all 4 markets • Robust performances in Guam & Saipan 2013 H2 • Leverage new model laun
Slide 29: Record H1 OP in Russia and Emerging Markets
Record H1 OP in Russia and Emerging Markets H1 2013 Trading Profit Split Russia 18% Other EM 82% Revenue (£m) Trading Profit (£m) 700.0 664.7 30.0 27.1* 25.9 24.6 640.1 650.0 25.0 600.0 20.0 16.1* 564.7 15.0 550.0 10.0 500.0 476.0 5.0 450.0 0.0 H1 2010 H1 2011 H1 2012 H1 2013 H1 2010 H1 2011 H1 2012
Slide 30: Russia
Russia Challenging trading performance 2013 TIV est. FY estimate: 2.8m, -5% vs. 2012 2013 H1 • Luxury and premium brands outperforming local and mass market brands • Competitive vehicle margin pressure • New Rolls Royce site opened in St. Petersburg 2013 H2 • New Moscow city centre site to open: fra
Slide 31: Emerging Markets
Emerging Markets Strong financial performance The Baltics…. The Balkans… …Slight increase of New car …Demand for New cars remained demand….Solid revenue and operating challenging…Inchcape delivered a solid growth from the launch of new models financial performance driven by share and control on cost
Slide 32: Emerging Markets
Emerging Markets Strong financial performance Africa… Peru… …Solid economic growth in Ethiopia …Strong performance in H1….strong growth …Inchcape delivered another strong in luxury segment which was up 27%... performance …continue to benefit from a Opened new BMW flagship facility in Lima… strong Af
Slide 33: Australasia
Australasia Record H1 OP Australia Distribution Australia Retail 2013 TIV est. FY estimate: 1,145k, +3% vs. 2012 2013 H1 • Strong 7.9% H1 trading margin • Trivett acquired and consolidated from • Supported by the successful launch of the 1st March. Performance on track new Forester as well as a more
Slide 34: Strategic Update
Strategic Update Capex Investment • Capacity expansion £38m • Chile • Peru • Russia • Ethiopia • Greenfield expansion £5m • Porsche Nanchang • Mercedes Jiujiang • Standards upgrade £20m • UK • Singapore • IT upgrades £27m • Maintenance capex £20m • Total £110m 34
Slide 35: Structural growth ahead
Structural growth ahead
Slide 36: Global premium automotive group, partner to the world's leading car brands
Global premium automotive group, partner to the world’s leading car brands Right Markets: Right Categories: 70% of profits Five distinct from Asia Pacific revenue streams & Emerging offering growth / Markets defensive mix Right Brands: Right Financials: 90% of profits Attractive growth from 6 leadin
Slide 37: Strong growth forecast in global car market
Strong growth forecast in global car market Global TIV* Global Car Parc** +24% +20% 99 1,116 95 1,074 91 1,033 86 962 995 80 82 930 million 2012 2013 2014 2015 2016 2017 million 2012 2013 2014 2015 2016 2017 Source: IHS Automotive Source: LMC Automotive Growth opportunities in all categories: New, U
Slide 38: Scale exposure to fast growing APAC / EM markets
Scale exposure to fast growing APAC / EM markets TIV growth CAGR Car parc growth % Inchcape % Inchcape Trading profit GDP growth Inchcape 2012-17 CAGR 2012-17 Revenue Trading profit Margin % CAGR 2012-17 markets (Source: IHS Automotive (Source: LMC H1 2013 H1 2013 H1 2013 (Source: IMF) (Global Insig
Slide 39: Engineered to deliver sustainable growth
Engineered to deliver sustainable growth • Broad based revenue growth in all categories: vehicles, service & parts • Record H1 PBT with double digit earnings growth • 70% of Group trading profit in fast growing economies of APAC / EM • 70% of Group trading profit in high margin Distribution / VIR bu
Slide 40: Appendix
Appendix
Slide 41: 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 until the 13th month of t
Slide 42: Broad geographic spread - truly international
Broad geographic spread - truly international United Kingdom (MLP) R Australasia South Asia North Asia Europe 35.1% of ’12 Group Revenue 19.2% of '12 Group Revenue 6.3% of '12 Group Revenue 8.5% of '12 Group Revenue 10.1% of '12 Group Revenue 23.3% of ’12 Group Trading 24.0% of '12 Group Trading 12.
Slide 43: 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