Slide 1: 2011 Results
2011 Results 13 March 2012 Engineered for Performance
Slide 2: André Lacroix, Group Chief Executive
André Lacroix Group Chief Executive Engineered for Performance
Slide 3: Robust EPS growth of 11%
Robust EPS* growth of 11% Revenue Operating profit* Return on sales* 260.0 244.4 5.0 4.2 6.4 240.0 225.5 3.8 4.0 6.2 220.0 3.1 5,885 6.0 5,826 200.0 175.2 3.0 £m 5.8 5,584 180.0 % £m 160.0 2.0 5.6 5.4 140.0 1.0 5.2 120.0 100.0 0.0 5.0 2009 2010 2011 2009 2010 2011 2009 2010 2011 -1.0% +8.4% +0.4ppt
Slide 4: Resilient revenue performance despite challenging supply and trading conditions
Resilient revenue performance despite challenging supply and trading conditions Sales YoY% H1 2011 H2 2011 Full year 2011 (5.3)% 3.8% (1.0)% Group (2.0)% (4.3)% (3.1)% UK 22.2% Europe (24.7)% (7.5)% Australasia (5.4)% 2.1% (1.9)% North Asia (6.7)% 7.5% 0.6% South Asia (26.3)% (13.5)% (20.3)% Russia
Slide 5: Strong operational leverage and cash conversion
Strong operational leverage and cash conversion 2011 2010 ∆ £m £m Revenue 5,826.3 5,885.4 (1.0)% Gross profit 856.1 880.9 (2.8)% Gross margin 14.7% 15.0% (0.3ppt) Costs (611.7) (655.4) 6.7% Operating profit* 244.4 225.5 8.4% ROS* 4.2% 3.8% 0.4ppt Cash generated from operations* 251.2 279.3 Cash conv
Slide 6: Group margin increased by 40 BPS
Group margin increased by 40 BPS 2011 - 2010 Return on sales* 2009, 2010 & 2011 YoY Change 3.2% Group 3.8% +40 BPS 4.2% 5.0% Australasia 5.4% +10 BPS 5.5% 6.4% North Asia 7.9% +180 BPS 9.7% 10.2% South Asia 9.7% -90 BPS 8.8% 2.2% UK 2.6% +30 BPS 2.9% 2.8% Europe 3.2% -20 BPS 3.0% 1.0% Russia & Emerg
Slide 7: Significant cost reduction since 2008
Significant cost reduction since 2008 4 9 7 16 12 (7) £m (47) (9) (16) 686 652 655 (43) 612 2008 Adj* Romania Inflation Cost 2009 Inflation Romania Australia Cost 2010 Inflation Pension & Cost 2011 Land Reduction Land Prop Reduction A&P Reduction Since 2008 c£100m cost reduction At actual currency *
Slide 8: Self help measures have strengthened the Group's productivity
Self help measures have strengthened the Group’s productivity # Sites* Head Count*** 300 15,500 15,314 293 290 15,000 280 269 14,500 270 265 13,935 13,920 259 14,000 13,707 260 13,500 250 240 13,000 230 12,500 2008 2009 2010 2011 2008 2009 2010 2011 Overheads as % of sales** Profit per employee (£k)
Slide 9: Confidence in the Group's earnings growth potential
Confidence in the Group’s earnings growth potential • 4.2% ROS in 2011, +40 BPS YoY • PBT increase of £14m and EPS growth of 11% • Recommend a final dividend for 2012 of 7.4p • Solid performance expected in 2012 • Exciting structural growth prospects ahead PBT (£m) ROS % ROCE 250.0 4.5% 4.2% 25.0% 2
Slide 10: John McConnell, Group Finance Director
John McConnell Group Finance Director Engineered for Performance
Slide 11: Summary profit & loss account
Summary profit & loss account 2011 2010 Change £m £m % Sales 5,826.3 5,885.4 (1.0)% Operating profit* 244.4 225.5 8.4% Net financing costs* 13.7 9.8 (39.8)% Profit before tax* 227.7 214.0 6.4% Tax rate (%) 26.0 29.1 (3.1)ppt Basic adjusted EPS (p) 35.5p 32.0p 10.9% * Before exceptional items Note: A
Slide 12: Impact of currency on operating profit
Impact of currency on operating profit* Full year 2011 2010 @ actual 2011 @ 2010 2011 @ actual Impact exchange rates actual rates exchange rates (£m) Australasia 62.5 50.4 55.3 4.9 Europe 27.8 23.5 24.0 0.5 North Asia 34.0 43.9 42.0 (1.9) South Asia 36.1 24.9 26.0 1.1 Russia and EM 31.8 57.4 54.1 (3
Slide 13: Segmental performance
Segmental performance 2011 2010 Change % £m £m Sales Distribution 2,357.4 2,455.9 (4.0)% Retail 3,468.9 3,429.5 1.1% 5,826.3 5,885.4 (1.0)% Operating profit Distribution 172.0 170.5 0.9% Retail 89.8 77.6 15.7% Central costs (17.4) (22.6) 23.0% 244.4 225.5 8.4% Operating margin Distribution 7.3% 6.9%
Slide 14: Group: underlying trading profit
Group: underlying trading profit 14.8 260.0 7.5 8.0 (7.3) 4.5 240.0 0.1 (10.1) (3.8) 261.8 £m 248.1 248.3 220.0 200.0 2010 reported Romanian land Australian 2010 underlying South Asia Europe Australasia UK North Asia Russia & 2011 reported impairment property sale Emerging Markets All numbers at act
Slide 15: Distribution: underlying trading profit
Distribution: underlying trading profit 2011 Trading margins 2011 reported 172.0 Distribution reported: 7.3% +40 BPS North Asia 8.0 Russia & Emerging Markets 3.5 Distribution underlying: 7.3% +30 BPS Australasia 2.1 North Asia: 9.7% +180 BPS UK 0.4 Russia and Emerging Markets: 9.7% -60 BPS Europe (2
Slide 16: Retail: underlying trading profit
Retail: underlying trading profit 2011 Trading margins 2011 89.8 Retail: 2.6% +30 BPS Russia & Emerging Markets 11.3 Russia and Emerging Markets: 2.6% +100 BPS UK 4.1 UK: 2.6% +20 BPS Europe (1.2) Europe: (0.2)% -70 BPS Australasia (2.0) Australasia: 3.2% -70 BPS 2010 77.6 70.0 80.0 90.0 100.0 £m Al
Slide 17: Regional analysis: Underlying trading profit
Regional analysis: Underlying trading profit 2010 2011 Russia and Emerging Markets Russia and Emerging 16% Australasia Markets Australasia 22% 21% 21% UK £248.3m £261.8m 22% North Asia North Asia 14% 16% UK 23% Europe South Asia South Asia Europe 10% 11% 15% 9% * Note: trading profit excludes centra
Slide 18: Cash flow
Cash flow Operating cash flow 2011 2010 Free cash flow 2011 2010 Net cash 2011 2010 £m £m £m £m £m £m Operating profit* 244.4 225.5 Operating cash flow 244.7 274.3 Free cash flow 98.1 192.9 Depreciation / amortisation 33.5 41.5 Net interest (9.5) (10.2) Share issue 0.6 0.2 Working capital (6.0) 38.6
Slide 19: Net financing costs
Net financing costs* 2011 2010 £m £m Bank and loan interest 3.3 1.1 Stock holding interest (13.6) (13.2) Interest on private placement notes (3.9) (3.7) Pension interest net 1.4 0.7 Other including capitalised interest adj. 1.5 3.3 Interest excluding mark to market (11.3) (11.8) FV on private placem
Slide 20: Exceptional items
Exceptional items £m 2011 2010 Restructuring costs (13.4) (12.4) Goodwill impairment - (5.5) Impairment of property, plant & equipment - (4.0) Operating exceptionals (13.4) (21.9) Finance exceptional items* (10.9) - Total exceptional items (before tax) (24.3) (21.9) * Greek Government Bonds impairme
Slide 21: Guidance – Full Year 2012
Guidance – Full Year 2012 • Tax rate 26% • Interest cost c £12m (excl. mark to market) • Capital expenditure £130m • Net Cash c £180m 21
Slide 22: Business update and outlook
Business update and outlook André Lacroix Group Chief Executive Engineered for Performance
Slide 23: Inchcape Customer 1st Strategy
Inchcape Customer 1st Strategy To be the world’s most customer centric automotive retail group STRENGTHEN EXPAND Superior customer value Consolidation in high proposition through margin / high growth Inchcape Advantage areas 23
Slide 24: Operational discipline on Top Five Priorities
Operational discipline on Top Five Priorities Customer 1st strategy to create differentiation Commercial initiatives to grow revenues ahead of competitors Cash initiatives to grow profit and operating cash faster than revenue Brand portfolio of the world’s leading premium and luxury automotive brand
Slide 25: 2012 Outlook
2012 Outlook • Continuation of an uneven global recovery • Demand for new cars down in the UK and Europe • Solid growth for new cars in APAC and Emerging Markets • Robust used car demand • Aftersales resilient, with focus on upsell and customer retention • Some pressure on gross margin and moderate
Slide 26: Strong 2012 model line-up
Strong 2012 model line-up BMW / MINI Land Rover / Jaguar Mercedes Benz Subaru Toyota / Lexus VW / Audi 3 Series Range Rover A Class Impreza Yaris HSD Up 1 Series 3dr XF Estate B Class XV GT 86 Beetle 6 Series Gran Coupe XF Facelift M Class BRZ Prius PHV Q3 MINI Roadster SL Class Prius + A1 5dr CLS S
Slide 27: UK Retail
UK Retail Record operating margin 2012 TIV est. FY estimate: 1,885k, -3% vs. 2011 2011 • LFL sales +1.6% versus a market down 4.4% achievements • Continued to grow market share through superior Inchcape Advantage Customer 1st processes and capitalised on strong new product launches • Further develop
Slide 28: Europe
Europe Profit resilience despite challenging conditions Belgium Greece 2012 TIV est. FY estimate: 528k, -15% vs. 2011 FY estimate: 60k, -39% vs. 2011 2011 • Market share leader for petrol engine vehicles • Maintained market leadership position despite temporary supply restriction achievements • Incr
Slide 29: South Asia
South Asia Robust Operating Margin 8.8%, TIV c70% below peak Singapore 2012 TIV est. FY estimate: 40k, flat vs. 2011 2011 • Gained maximum benefit from new product launches achievements • Deepened segment penetration with new variants (RX270 and Camry Sportivo special edition) • Outperformed Aftersa
Slide 30: North Asia
North Asia Market leadership, Triple Crown Award for the 20th Year Hong Kong 2012 TIV est. FY estimate: 44k, +5% vs. 2011 2011 • Continued to build market share in the MPV segments with strong marketing campaigns on Noah, Previa, Wish and achievements Alphard • Established significant share in new m
Slide 31: Australasia
Australasia Resilient financial performance, despite supply restrictions Australia Distribution Australia Retail 2012 TIV est. FY estimate: 1,030k, +2% vs. 2011 2011 • Against a backdrop of supply disruption from Q2 onwards the • Leveraged new model launches and special editions (Subaru achievements
Slide 32: Russia
Russia Strong market growth, operating profit +41% 2012 TIV est. FY estimate: 2.8m, +4% vs. 2011 (+12% ex scrappage) 2011 achievements • Robust sales performance driven by disciplined Inchcape Advantage KPI management and new product launches • Grew Used car performance with ‘Approved’ programmes an
Slide 33: Emerging Markets
Emerging Markets Strong market growth – operating profit growth of 74% The Baltics The Balkans Poland South America Africa China 2012 TIV est. FY estimate: 45k, +22% FY estimate: 135k, flat FY estimate: 25k, +2% Chile: 11.5k, +7% vs. 2011 Data not available 1.1m, +15% vs. 2011 vs. 2011 vs. 2011 vs.
Slide 34: Expansion in 2012
Expansion in 2012 • Capacity expansion £33m • Chile • Peru • Russia • Poland • Australia • Greenfield expansion £20m • Porsche Nanchang • Porsche UK • Standards upgrade £31m • UK • Singapore • IT Upgrades £26m • Maintenance capex £20m Capex predominantly in APAC and Emerging Markets 34
Slide 35: Structural Growth
Structural Growth Engineered for Performance
Slide 36: Strong growth forecast in global car market
Strong growth forecast in global car market Global TIV Global Car Parc +30% 98 +16% 94 988 1,018 1,051 90 960 84 905 932 75 78 million million 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2016 Source: IHS Automotive (Global Insight) Source: LMC Automotive (JD Power) Growth Growth opportuni
Slide 37: Uniquely positioned to take advantage of global growth
Uniquely positioned to take advantage of global growth Strongest players Broad Broadbased based will lead industry global globalrecovery recovery consolidation Five global trends Car Parc Structural growth growth in both led by wealth the fast creation in growing and Technology will APAC/Emerging ad
Slide 38: Inchcape exposure to fast growing APAC / Emerging Markets
Inchcape exposure to fast growing APAC / Emerging Markets Inchcape % Inchcape % Inchcape GDP growth TIV growth Car parc markets Revenue Trading profit CAGR 2011-16 CAGR 2011-16 growth CAGR 2006-11 2006-11 (Source: EIU) (Source: IHS Automotive (Global Insight)) 2011-16 (Source: LMC Automotive (JD Pow
Slide 39: Engineered for Performance
Engineered for Performance • Performance track record in all cycles • Performance consistency through operational discipline on Top 5 Priorities • Performance management with industry leading processes • Performance advantage for customers with ever better cars and customer service • Performance ahe
Slide 40: Engineered for Performance
® Inchcape Engineered for Performance
Slide 41: Appendices
Appendices Engineered for Performance
Slide 42: 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 43: Broad geographic spread – truly international
Broad geographic spread – truly international United Kingdom (MLP) R Australasia South Asia North Asia Europe 35.3% of ’11 Group Revenue 17.4% of '11 Group Revenue 5.1% of '11 Group Revenue 7.4% of '11 Group Revenue 13.8% of '11 Group Revenue 23.1% of ’11 Group Trading 21.1% of '11 Group Trading 9.9
Slide 44: Distribution: trading profit, margin
Distribution: trading profit, margin Trading profit* Trading margin* 2011 2010 2011 2010 £m £m % % Australasia 42.7 47.9 6.9 7.3 Europe 24.3 26.9 3.7 3.8 North Asia 43.4 34.0 9.7 7.9 South Asia 26.0 36.1 8.8 9.7 UK 6.9 6.5 19.1 17.6 Russia and Emerging Markets 30.1 19.1 9.7 7.4 172.0 170.5 7.3 6.9 B
Slide 45: Retail: trading profit, margin
Retail: trading profit, margin Trading profit* Trading margin* 2011 2010 2011 2010 £m £m % % Australasia 12.6 14.6 3.2 3.9 Europe (0.3) 0.9 (0.2) 0.5 UK 53.5 49.4 2.6 2.4 Russia and Emerging Markets 24.0 12.7 2.6 1.6 89.8 77.6 2.6 2.3 Before exceptional items All numbers at actual exchange rates 45
Slide 46: 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
Slide 47: Engineered for Performance
Engineered for Performance © Inchcape 2012. All rights reserved. Proprietary and confidential information. No unauthorised copying or reproduction. Inchcape and the Inchcape logo are the registered trademarks of the Inchcape Group. The information contained in this presentation has been obtained fro