Slide 1: Pendragon PLC 2020 Full Year Results
PENDRAGON PLC 2020 FULL YEAR RESULTS 24TH MARCH 2021
Slide 2: Agenda
Agenda 1. Introduction Bill Berman 2. FY20 performance overview & divisional highlights Bill Berman 3. Group strategy update Bill Berman 4. Financial review Mark Willis 5. Summary & outlook Bill Berman 2
Slide 3: Operational improvements drive robust financial performance
Operational improvements drive robust financial performance • Outstanding response from team, adapting to changing restrictions Pandemic • Accelerated development of digital capabilities response • Streamlined the business, realising material efficiency gains • Underlying profit before tax £8.2m (FY
Slide 4: FY20 performance overview
FY20 performance overview 4
Slide 5: H1: Managing the pandemic and adapting to new environment
H1: Managing the pandemic and adapting to new environment Context • Government mandated closure of all UK dealerships from 23rd March until 1st June • Ensure health and wellbeing of customers and associates Objectives • Protect cash position • Safely reopen locations • Rapid and decisive action take
Slide 6: H2: Strong recovery and managing further disruption
H2: Strong recovery and managing further disruption Context • Strong performance following re-opening • Maximise opportunity from pent-up demand Objectives • Implement structural changes to the organisation to deliver efficiency gains • Transform ability to operate digitally • Implemented organisati
Slide 7: Divisional operating highlights
Divisional operating highlights 7
Slide 8: Franchised UK Motor
Franchised UK Motor • Significant changes to operating model to provide safe physical environments Franchised • Rapid development of digital & fulfilment capabilities UK Motor • Completed review of store estate and cost restructure • H1 materially impacted by COVID-19, strong performance recovery in
Slide 9: Pinewood
Pinewood • Pinewood’s revenue proved resilient, down just 4.7% • Proactive support to customer base during first national lockdown Software – • 20% increase in international market users Pinewood • Multiple platform enhancements rolled-out: ― eLearning to support home working ― Integrated, secure on
Slide 10: Car Store
Car Store • Significant performance improvement in Car Store, despite pandemic • Improved operating controls and stock management Car Store • Rapid development of digital & fulfilment capabilities • Improved margins: FY20 GPU £865 vs £391 in FY19 • Underlying operating loss of £1.2m (FY19: loss of £
Slide 11: Leasing
Leasing • Increased underlying operating profit of £13.3m (H1: £4.7m, H2: £8.6m, FY19: £12.8m) • Lower levels of new business and lower disposals in H1 as a result of pandemic Leasing • Reduction in fleet size of 10.6% vs FY19 • FY performance driven by strong recovery in H2 ― Increase in extension
Slide 12: US Motor
US Motor Disposal of US Motor Division • Close to completion of the disposal of the US Motor sites, with expected proceeds of US Motor £107m before tax: ― Los Angeles disposal completed January 2021, for £16.3m ― Total current proceeds from the completed US Motor site disposals of £95.1m ― Agreement
Slide 13: Group Strategy update
Group Strategy update 13
Slide 14: Our vision
Our vision “Transform automotive retail through digital innovation and operational excellence” 14
Slide 15: Strategy
Strategy 1. Unlock value in 2. Grow and 3. Disrupt standalone Franchised UK Motor diversify Pinewood used cars • Accelerate digital • Digital product • Re-brand innovation extension • Differentiate value • Drive operational • Deliver material proposition excellence & best existing order • Scale the
Slide 16: FY20 strategy delivery (1/2)
FY20 strategy delivery (1/2) 1. Unlock value in 2. Grow and 3. Disrupt standalone Franchised UK Motor diversify Pinewood used cars • Pinewood digital • Digital products • Pinewood digital capability built: capability embedded embedded in division ― Sales+ in division ― Finance online ― Insurance pro
Slide 17: FY20 strategy delivery (2/2)
FY20 strategy delivery (2/2) 1. Unlock value in 2. Grow and 3. Disrupt standalone Franchised UK Motor diversify Pinewood used cars • Store & Organisation • Growth in • Warranty product & restructure International users price revisions concluded. c.£37m • Value proposition annual benefit planning • W
Slide 18: FY21 strategy milestones (1/2)
FY21 strategy milestones (1/2) 1. Unlock value in 2. Grow and 3. Disrupt standalone Franchised UK Motor diversify Pinewood used cars • Pinewood digital • Digital products • Pinewood digital capability to-be to-be built: capability to-be embedded in division ― Further phases: embedded in division Sal
Slide 19: FY21 strategy milestones (2/2)
FY21 strategy milestones (2/2) 1. Unlock value in 2. Grow and 3. Disrupt standalone Franchised UK Motor diversify Pinewood used cars • Operational • Deliver material • Brand re-launch excellence & best existing order • Digital journey practice: pipeline revisions ― Preparation • Complete 1st new ― F
Slide 20: Pendragon's advantages
Pendragon’s advantages 1. Unlock value in 2. Grow and 3. Disrupt Franchised UK diversify standalone used Strategic Motor Pinewood cars pillars • Leaner cost base & • Vertically integrated improved efficiency • Advanced digital assets and • Intragroup supply capabilities capabilities scale for standa
Slide 21: Financial performance & targets
Financial performance & targets Delivered from an Transformative plan to Targeting a c.2% Capital expenditure improved cost base restore and improve underlying PBT margin averaging c.£45m p.a. following FY20 underlying profitability by 2025 from 2021 – 2025 restructuring Underlying PBT Performance,
Slide 22: Financial review
Financial review 22
Slide 23: Key metrics: FY20
Key metrics: FY20 Gross Gross Underlying Revenue (loss) / profit Net debt profit margin % before tax £1,218.3m £135.3m £(31.0)m £46.0m H1 11.1% -50.4% vs FY19 -42.5% vs FY19 +3.7% vs FY19 -£73.7m vs FY19 £1,706.3m £217.9m £39.2m £100.4m H2 12.8% -16.8% vs FY19 -8.2% vs FY19 +148.1% vs FY19 -£19.3m v
Slide 24: Financial summary: Income statement
Financial summary: Income statement • Revenue decline of 35.1% (25.5% down LFL) ― H1 -50.4% Income Statement (£m) ― H2 – 16.8% FY 2020 FY 2019 % Change ― Driven by pandemic impact and estate reductions Revenue 2,924.6 4,506.1 -35.1% • Strong gross margins Gross profit 353.2 472.7 -25.3% ― Improved n
Slide 25: Financial performance by quarter
Financial performance by quarter Underlying PBT by Quarter & Full Year, 2019 vs. 2020 £m 27.3 FY19 FY20 12.8 11.9 8.2 3.0 -2.8 -2.3 -16.4 -29.4 -28.7 Q1 Q2 Q3 Q4 Full-Year • Pre-pandemic, in January and February 2020, performance was ahead of last year and the Group’s budget: ― Jan & Feb combined £5
Slide 26: Financial summary: Cashflow
Financial summary: Cashflow Summary Cashflow (£m) FY 2020 FY 2019 • Net debt reduction of £19.3m vs FY19 Underlying Operating Profit 45.9 26.7 Depreciation and Amortisation 43.7 44.7 • Debt reduction benefiting from VAT deferral benefit of c.£30m Share Based Payments 1.2 0.6 Non-underlying Items -10
Slide 27: Financial summary: Balance sheet
Financial summary: Balance sheet Balance Sheet (£m) • Reduction in property ― Sale & leaseback of Porsche Stockport Dec-20 Dec-19 ― Disposal of excess property Property 222.8 237.8 • Plant and equipment reduction from disposals and ongoing depreciation Plant & Equipment 204.0 231.3 • Reduction in go
Slide 28: Summary & outlook
Summary & outlook 28
Slide 29: Outlook
Outlook • Improved performance YTD to February 21, during lock-down. • Cautiously optimistic about the economic outlook Outlook • Well positioned to respond to any opportunities or challenges • Confident in making further progress with our new strategy 29
Slide 30: Appendix – Divisional financial summary
Appendix – Divisional financial summary 30
Slide 31: Franchised UK Motor
Franchised UK Motor Franchised UK Motor (£m) FY 2020 FY 2019 % Change % Change LFL Revenue 2,591.8 3,730.8 -30.5% -26.4% Gross Profit 289.8 371.6 -22.0% -18.3% Operating Costs -271.3 -358.6 -24.3% -20.9% Operating Profit 18.5 13.0 42.3% 13.2% Gross Margin % 11.2% 10.0% 1.2% 1.1% Operating Margin % 0
Slide 32: Software - Pinewood
Software - Pinewood Software - Pinewood (£m) % FY 2020 FY 2019 Change Revenue 22.3 23.4 -4.7% Gross Profit 20.5 21.5 -4.7% Operating Costs -8.4 -8.1 3.7% Operating Loss 12.1 13.4 -9.7% Gross Margin % 91.9% 91.9% 0.0% Operating Margin % 54.3% 57.3% -3.0% 32
Slide 33: Car Store
Car Store Car Store (£m) % Change FY 2020 FY 2019 % Change LFL Revenue 88.5 270.3 -67.3% -35.1% Gross Profit 7.3 10.9 -33.5% -9.2% Operating Costs -8.5 -36.1 -76.6% -43.2% Operating Loss -1.2 -25.2 95.2% 84.8% Gross Margin % 8.2% 4.0% 4.2% 1.3% Operating Margin % -1.4% -9.3% 7.9% 3.8% 33
Slide 34: Leasing – Pendragon Vehicle Management
Leasing – Pendragon Vehicle Management Leasing – Pendragon Vehicle Management (£m) FY 2020 FY 2019 % Change Revenue 86.3 87.7 -1.6% Gross Profit 17.6 17.1 2.9% Operating Costs -4.3 -4.3 0.0% Operating Profit 13.3 12.8 3.9% Gross Margin % 20.4% 19.5% 0.9% Operating Margin % 15.4% 14.6% 0.8% 34
Slide 35: US Motor
US Motor US Motor (£m) FY 2020 FY 2019 % Change % Change LFL Revenue 157.9 422.3 -62.6% -15.1% Gross Profit 23.3 56.7 -58.9% -5.8% Operating Costs -20.1 -44 -54.3% 36.0% Operating Loss 3.2 12.7 -74.8% -62.1% Gross Margin % 14.8% 13.4% 1.3% 1.5% Operating Margin % 2.0% 3.0% -1.0% -3.2% 35
Slide 36: Franchised UK Motor - Aftersales
Franchised UK Motor - Aftersales Aftersales Market - UK Car Parc 10.0m 8.8m 8.8m 9.0m 8.5m 8.1m 8.0m 8.0m 7.5m 7.6m 7.6m 7.3m 7.2m 7.1m 7.1m 7.1m 7.0m 7.2m 6.8m 7.0m 6.7m 6.4m 6.1m 6.0m 5.8m 6.0m 5.6m 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 11-15 years 15 years + 201
Slide 37: Franchised UK Motor - New: UK New Car Registrations
Franchised UK Motor - New UK New Car Registrations Market Average / Natural Level 1.83m Forecast 2.13m Forecast 2.40m 2.04m 2.03m 2.48m 2.69m 2.34m 2.54m 2.63m 2.26m 2.37m 1.63m 1.94m 1.99m 2.31m 2.13m 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 • The UK new
Slide 38: UK New Car Market Registrations
UK New Car Market Registrations 3.0m 2.0m Fleet Fleet Fleet Fleet Fleet Forecast Fleet Forecast 1.0m Retail Retail Retail Retail Retail Retail 0 2015 2016 2017 2018 2019 2020 2021 2022 Retail Fleet Forecast 38
Slide 39: Financial Summary – 3 Year View
Financial Summary – 3 Year View Underlying Profit Before Tax Underlying Operating Profit £47.8m £76.2m £26.7m £45.9m £8.2m 2018 2019 2020 (£16.4m) 2018 2019 2020 Underlying Earnings Per Share Net Debt and Net Debt: Underlying EBITDA Ratio 1.1 0.9 0.8 2.8p 0.6p £126.1m £119.7m £100.4m 2018 2019 2020