Slide 1: Pendragon PLC 2021 Full Year Results
PENDRAGON PLC 2021 FULL YEAR RESULTS 23rd MARCH 2022
Slide 2: Agenda
Agenda 1. Introduction Bill Berman 2. FY21 performance overview & divisional highlights Bill Berman 3. Financial Review Mark Willis 4. Group strategy update Bill Berman 5. Outlook & Guidance Bill Berman 2
Slide 3: FY21 performance overview
FY21 performance overview 3
Slide 4: FY 2021 Performance Overview
FY 2021 Performance Overview • Strong progress with strategy to “transform automotive retail through digital innovation and operational excellence” Operating • Disciplined strategic delivery driving productivity improvements and Highlights stronger margins, supported by market tailwinds • New sales
Slide 5: Divisional operating highlights
Divisional operating highlights 5
Slide 6: Franchised UK Motor
Franchised UK Motor • Strong performance driven by impact of initiatives and beneficial market conditions • Like-for-like volumes outperforming market in represented franchises and in Used vehicles • Cost reduction programmes and store closures delivering significant benefit, with costs down £60.0m
Slide 7: Pinewood
Pinewood • Product developments to enable Group digital capabilities, deliver finance products online and facilitate digital payments • Achieved accreditation as first certified system by BMW UK, and 2nd globally Revenue: Underlying Operating Profit: International users: +9.4% to £24.4m £12.5m, up 3
Slide 8: CarStore
CarStore • Volumes up 26.0%, outperforming market up 11.7% • Used GPU of £1,221, up £356 compared to FY21 • CarStore brand relaunched in December 2021 with a highly differentiated proposition Revenue: Underlying Operating Profit: Used GPU: +60.4% LFL £1.6m £1,221 (+59.9% total reported) (FY20: loss
Slide 9: Leasing
Leasing • High margin on disposals, historical residual values benefitting from increased used vehicle prices Revenue: Underlying Operating Profit: +4.2% to £89.9m £17.5m, up 31.6% (FY20: £13.3m) 9
Slide 10: Financial review
Financial review 10
Slide 11: Key metrics: FY21
Key metrics: FY21 Gross Gross Underlying Underlying Revenue operating profit / (loss) Net debt profit margin % costs before tax £3,449.9m £441.3m £(325.0)m2 £49.7m FY21 +18.0% vs FY20 +24.9% vs FY20 12.8% £83.0m (149 stores) (+35.0% LFL) +5.8% vs FY20 -£50.7m vs FY20 (+27.1% LFL) -6.6% vs FY19 -27.1
Slide 12: Financial summary: Income statement
Financial summary: Income statement • Revenue increase of 18.0% ― Like for like revenue increase of 27.1% Income Statement (£m) ― Outperformed New & Used markets FY 2021 FY 2020 % Change • Strong gross margins ― Improved margins in new, used and aftersales Revenue 3,449.9 2,924.6 18.0% ― Benefit fro
Slide 13: Financial summary: Cashflow
Financial summary: Cashflow • Net debt reduction of £50.7m vs FY20 Summary Cashflow (£m) • £99.5m cash generated from operations with strong trading driving FY 2021 FY 2020 cash inflows Underlying Operating Profit 116.3 45.9 Depreciation and Amortisation 36.1 43.7 • Working capital outflow of £41.2m
Slide 14: Financial summary: Balance sheet
Financial summary: Balance sheet Balance Sheet (£m) Dec-21 Dec-20 • Increase of £98.9m in net assets from £126.7m at Dec-20 to £225.6m at Dec- 21 Property 217.6 222.8 Plant & Equipment 24.2 46.6 • Reduction in property Goodwill 150.3 150.3 ― Disposal of excess property together with depreciation Oth
Slide 15: Group strategy update
Group strategy update 15
Slide 16: Recap: Our vision
Recap: Our vision “Transform automotive retail through digital innovation & operational excellence” 16
Slide 17: Recap: Our strategy
Recap: Our strategy Strategy 1. Unlock value in 2. Grow & diversify 3. Disrupt Franchised UK Motor Pinewood used cars Accelerate digital innovation Digital product extension Re-brand Drive operational excellence & Deliver material existing order Differentiate value proposition best practice pipeline
Slide 18: Pendragon's advantages
Pendragon’s advantages Strategic priorities 1. Unlock value in 2. Grow & diversify 3. Disrupt Franchised UK Motor Pinewood used cars • Leaner cost base & • Advanced digital • Vertically integrated improved efficiency capabilities assets & capabilities • Intragroup supply scale • Control of the • Exp
Slide 19: 1. Unlock value in Franchised UK Motor
FY21 1. Unlock value in Franchised UK Motor delivery Omnichannel strength & advanced digital operating model Unlock value in Acquisition, Website Franchised UK Motor Sales+ management & functionality pricing platform Accelerate digital innovation ✓ ❑ Payment with ✓ ❑ Consistent & ✓ ❑ Automated, mark
Slide 20: 1. Unlock value in Franchised UK Motor
FY21 1. Unlock value in Franchised UK Motor delivery New products & processes to drive margin Unlock value in Guarantee Preparation & Trade Franchised UK Motor revision rectification optimisation Accelerate digital innovation ✓ ❑ Introduced 3-year ✓ ❑ Reduced time to ✓ ❑ Digital auctions product pre
Slide 21: 1. Unlock value in Franchised UK Motor
FY21 1. Unlock value in Franchised UK Motor delivery Right-sized & sustained cost reduction Unlock value in Headcount Senior / regional Franchised UK Motor Store closures efficiencies structure Accelerate digital innovation ✓ ❑ 15 stores with no ✓ ❑ Market impacts / ✓ ❑ Maximise aftersales / roadmap
Slide 22: 1. Unlock value in Franchised UK Motor
1. Unlock value in Franchised UK Motor FY22+ plans Substantial upside opportunity from in-development / future initiatives Preparation & Sales+ Aftersales rectification ❑ Multiple future ❑ Cosmetic ❑ Multiple value levers releases opportunities Unlock value in Franchised UK Motor Finance & New EVs i
Slide 23: 2. Grow & diversify Pinewood
FY21 2. Grow & diversify Pinewood delivery Group omnichannel enabler Grow & diversify Pinewood ✓ ❑ Website functionality ✓ ❑ Sales+ Digital product extension ✓ ❑ Acquisition, management & pricing platform Deliver material existing order pipeline ✓ ❑ Digital valuations / payments ✓ ❑ Aftersales Geogr
Slide 24: 2. Grow & diversify Pinewood
FY21 2. Grow & diversify Pinewood delivery International growth & global OEM certification Grow & diversify Pinewood International growth OEM certification Digital product extension ✓ ❑ 24% international user growth YoY ✓ ❑ BMW UK certified status Deliver material existing ✓ ❑ Strong pipeline ✓ ❑ Re
Slide 25: 3. Disrupt used cars
FY21 3. Disrupt used cars delivery Disrupt used cars Re-brand ✓ ❑ Research supported retention of CarStore brand Differentiate value ✓ ❑ New brand identity & logo proposition ✓ ❑ New tone of voice Scale the physical estate ✓ ❑ Updated physical assets ✓ ❑ Omnichannel / hybrid customer journey 25
Slide 26: 3. Disrupt used cars
FY21 3. Disrupt used cars delivery Market leading omnichannel / hybrid customer proposition Disrupt used cars Soft-launch completed Re-brand ✓ ❑ New website: buy / finance / PX ✓ ❑ End-to-end personal advisor Differentiate value ✓ ❑ 123-point inspection proposition ✓ ❑ Home delivery / collection Sca
Slide 27: 3. Disrupt used cars
FY21 delivery 3. Disrupt used cars & FY22 plans Physical assets to support the omnichannel customer proposition Disrupt used cars ✓ ❑ Chesterfield in April ❑ Warrington Re-brand ❑ Borehamwood Differentiate value ❑ Small-format expansion, underpinned by proposition hub & spoke network Scale the physi
Slide 28: CarStore Customer Journey Video
FY21 3. Disrupt used cars delivery CarStore Customer Journey Video 28
Slide 29: Digital disruptors
FY21 3. Disrupt used cars delivery Market leading omnichannel capability vs. digital disruptors Digital Fulfilment Enquiry Sale Aftersales Other Reserve & Regulated Non- MOT & Live Enquiry Cash Finance Part- Sell Your Click & Home Brand book products regulated service chat form purchase purchase exc
Slide 30: Outlook & Summary
Outlook & Summary 30
Slide 31: Outlook
Outlook • Performance over the first two months of FY22 has been good • Underlying profit in January and February ahead of 2021 • Supply constraints expected for 2022 Outlook • Board conscious of inflationary cost pressures and mindful of the further impact that the conflict in Ukraine may have on b
Slide 32: Summary
Summary • Pleased with the scale of delivery across the Group, in the first full year since our strategy was launched Excellent • Cross-functional team continues to maintain a high pace of change progress & upside • Remain confident in the opportunity that our strategy provides, and how opportunity
Slide 33: Appendix
Appendix 33
Slide 34: Analyst modelling guidance
Analyst modelling guidance • Both new and used margins are expected to reduce during the course of 2022 from extraordinary levels achieved in 2021. • New car supply currently expected to start to ease in H2, but dependant on supply constraints reducing. • GP: combination of increased volume and init
Slide 35: Franchised UK Motor
Franchised UK Motor New (£m) Used (£m) Aftersales (£m) % Change % Change % Change FY 2021 FY 2020 % Change FY 2021 FY 2020 % Change FY 2021 FY 2020 % Change LFL LFL LFL Revenue 1,362.4 1,208.0 12.8% 14.1% Revenue 1,566.9 1,157.5 35.4% 41.9% Revenue 261.9 226.3 15.7% 18.9% Gross Profit 99.9 79.1 26.3
Slide 36: Software - Pinewood
Software - Pinewood Software - Pinewood (£m) FY 2021 FY 2020 % Change Revenue 24.4 22.3 9.4% Gross Profit 22.5 20.5 9.8% Operating Costs (10.0) (8.4) 19.0% Operating Loss 12.5 12.1 3.3% Gross Margin % 92.2% 91.9% 0.3% Operating Margin % 51.2% 54.3% -3.0% 36
Slide 37: CarStore
CarStore Car Store (£m) % Change FY 2021 FY 2020 % Change LFL Revenue 141.5 88.5 59.9% 60.4% Gross Profit 12.9 7.3 76.7% 74.3% Operating Costs (11.3) (8.5) 32.9% 34.5% Operating Loss 1.6 (1.2) n/a n/a Gross Margin % 9.1% 8.2% 0.9% 0.7% Operating Margin % 1.1% -1.4% 2.5% 2.2% 37
Slide 38: Leasing – Pendragon Vehicle Management
Leasing – Pendragon Vehicle Management Leasing – Pendragon Vehicle Management (£m) FY 2021 FY 2020 % Change Revenue 89.9 86.3 4.2% Gross Profit 22.0 17.6 25.0% Operating Costs (4.5) (4.3) 4.7% Operating Profit 17.5 13.3 31.6% Gross Margin % 24.5% 20.4% 4.1% Operating Margin % 19.5% 15.4% 4.1% 38
Slide 39: US Motor
US Motor US Motor (£m) FY 2021 FY 2020 % Change Revenue 28.6 157.9 -81.9% Gross Profit 4.0 23.3 -82.8% Operating Costs (5.1) (20.1) -74.6% Operating Loss (1.1) 3.2 n/a Gross Margin % 14.0% 14.8% -0.8% Operating Margin % -3.8% 2.0% -5.9% 39
Slide 40: Franchised UK Motor - Aftersales
Franchised UK Motor - Aftersales Aftersales Market - UK Car Parc 10.0m 8.8m 8.8m 9.0m 8.5m 8.3m 8.1m 8.0m 7.8m 8.0m 7.6m 7.6m 7.5m 7.3m 7.2m 7.1m 7.1m 7.1m 7.0m 7.2m 7.0m 6.8m 6.9m 7.0m 6.7m 6.4m 6.1m 6.0m 5.8m 6.0m 5.6m 5.3m 5.3m 5.0m 4.7m 4.4m 4.0m 3.0m 2.0m 1.0m - 0-3 years 4-6 years 7-10 years 1
Slide 41: Franchised UK Motor - New
Franchised UK Motor - New UK New Car Registrations Market Average / Natural Level 1.90m Forecast 2.13m Forecast 2.40m 2.04m 2.03m 2.34m 2.48m 2.54m 2.69m 2.63m 2.26m 2.37m 1.94m 1.99m 1.65m 2.31m 1.63m 2.13m 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 •
Slide 42: UK New Car Market
UK New Car Market Registrations 3.0m 2.0m Fleet Fleet Fleet Fleet Fleet Forecast Forecast Fleet Fleet 1.0m Retail Retail Retail Retail Retail Retail Retail 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 Retail Fleet Forecast 42
Slide 43: Financial Summary – 3 Year View
Financial Summary – 3 Year View Underlying Profit Before Tax Underlying Operating Profit £83.0m £116.3m (£16.4m) £45.9m £8.2m £26.7m FY19 FY20 FY21 FY19 FY20 FY21 £200.0m Underlying Earnings Per Share Net Debt and Net Debt: Underlying EBITDA Ratio 1.1 £150.0m 0.8 £100.0m 0.3 5.0p £50.0m £119.7m £100