Slide 1: H1 2018 Results
H1 2018 RESULTS 26 JULY 2018
Slide 2: Stefan Bomhard, Group Chief Executive
STEFAN BOMHARD GROUP CHIEF EXECUTIVE
Slide 3: H1 2018 Highlights
H1 2018 HIGHLIGHTS Stable underlying Distribution Delivery on Continuing focus on earnings strength Ignite shareholder returns PBT at constant Distribution Four new business wins ROCE of 28% 2 currency +2% y-o-y ex c.90% of profit in Central America, DPS growth +13% property profit1 Guam, Colombia,
Slide 4: Distribution Driving Performance
DISTRIBUTION DRIVING PERFORMANCE OFFSETTING RETAIL CHALLENGES H1 2018 % chg % chg Excluding property profit gain (CCR) in H1 17 PBT CCR growth +2.0% Revenue £4,614m +3.8% +6.8% £5m Trading Profit contribution from Central America acquisition PBT £179.5m -8.5% -2.9% Strong growth in Distribution PBT
Slide 5: Evolving the Inchcape Footprint
EVOLVING THE INCHCAPE FOOTPRINT DISTRIBUTION C.90% OF TRADING PROFIT TRADING PROFIT: REGIONAL TRADING PROFIT: CHANNEL POSITIONS INCHCAPE 27% 21% Australasia WELL FOR: 11% 21% Emerging 71% Markets Distribution 89% 29% 16% UK/Europe Retail Growth 42% Asia 33% 29% 11% 2014 H1 2018 2014 H1 2018 EM mix +
Slide 6: Distribution an Attractive Business
DISTRIBUTION AN ATTRACTIVE BUSINESS GREATER EXPOSURE ACROSS THE VALUE CHAIN 6
Slide 7: Kenya – JLR Contract Win
KENYA – JLR CONTRACT WIN 8TH DISTRIBUTION DEAL IN THE LAST 24 MONTHS DEAL CONSIDERATIONS OEM PARTNER OF CHOICE IN ACTION Contract awarded to Inchcape Over 24 months awarded contracts in Thailand, Colombia and Kenya Enhances Inchcape’s East Africa platform alongside Ethiopian business Inchcape now re
Slide 8: Richard Howes, Chief Financial Officer
RICHARD HOWES CHIEF FINANCIAL OFFICER
Slide 9: Summary Income Statement
SUMMARY INCOME STATEMENT H1 2018 H1 2017 CHANGE CHANGE CCR EX £M £M ACR CCR C. AMERICA* Revenue 4,614 4,443 +3.8% +6.8% +5.5% Operating profit 193.2 207.4 (6.9)% (1.2)% (4.0)% Profit before tax 179.5 196.2 (8.5)% (2.9)% Profit before tax ex PP** 179.5 186.9 (4.0)% +2.0% (0.4)% Reported Profit before
Slide 10: Distribution H1 Performance
DISTRIBUTION H1 PERFORMANCE H1 2018 H1 2017 CHANGE CHANGE Strong underlying profit growth, CCR EX £M £M ACR CCR C. AMERICA* driven by Asia Central American acquisition profit Revenue 2,109 2,012 +4.8% +9.0% +6.1% accretive (£5m) Yen tailwind in Australasia £13m Trading 180.9 160.6 +12.6% +20.8% +17.
Slide 11: Distribution Trading Profit Bridge
DISTRIBUTION TRADING PROFIT BRIDGE £15M £0M £181M £2M £14M £161M £11M H1 17 Trading Profit Translational FX Australasia * UK & Europe Asia Emerging H1 18 Trading Profit Markets ** Note: * Regional profit growth at CCR; Australasia includes £13m transactional FX gain y-o-y; ** Emerging Markets includ
Slide 12: Retail H1 Performance
RETAIL H1 PERFORMANCE H1 2018 H1 2017 CHANGE CHANGE UK and Australia markets difficult £M £M ACR CCR Strong Russia growth, driven by Ignite Revenue 2,505 2,431 +3.1% +4.9% Aftersales Gross Profit +5% CCR Trading profit 23.0 60.2 (61.8)% (61.3)% UK Retail c.5% of Group profit Trading margin % 0.9% 2.
Slide 13: Retail Trading Profit Bridge
RETAIL TRADING PROFIT BRIDGE £60M £51M £9M £1M £9M £6M £23M £24M H1 17 Trading Prior year Underlying H1 17 Translational FX Australasia (ex UK & Europe Emerging H1 18 Trading Profit property profit Trading Profit property profit) Markets Profit (Australia) Note: Regional profit growth at CCR 13
Slide 14: Value Driver Disclosure
VALUE DRIVER DISCLOSURE AFTERSALES AND VEHICLES GROSS PROFIT MIX GROSS PROFIT YoY YoY (£M) CHANGE CHANGE H1 2018 CCR Ex Acqn* Vehicles 402.4 +9.3% +7.5% Vehicles 63% Aftersales 37% Aftersales 237.2 +7.0% +5.2% Note: *Acqn. refers to Central America acquisition in March 2018, YoY is CCR 14
Slide 15: Income Statement Review
INCOME STATEMENT REVIEW H1 2018 H1 2017 2018 £M £M £M GUIDANCE Trading profit 203.9 220.8 INTEREST COST Central costs (10.7) (13.4) Unchanged guidance Operating profit 193.2 207.4 Operating margin 4.2% 4.7% c.£31m Includes BOE announced interest rate Net finance costs (13.7) (11.2) increase Profit b
Slide 16: Operating & Free Cash Flow
OPERATING & FREE CASH FLOW H1 H1 H1 H1 FCF CONVERSION ON TRACK FOR OPERATING CASH FLOW 2018 2017 FREE CASH FLOW 2018 2017 NORMAL STRONG FULL YEAR LEVELS £M £M £M £M WORKING CAPITAL Operating profit* 193.2 207.4 Operating cash flow 200.8 252.0 H1 2018 Some expected unwind Depreciation / amortisation
Slide 17: Capital Allocation
CAPITAL ALLOCATION DISCIPLINED APPROACH Excess cash post CUMULATIVE CASH RETURNS capex, working capital, dividend Share buyback (cumulative) £1,056M Dividends (cumulative) Value-accretive M&A opportunities Plus +5% H1 PBT CAGR £47M (’11-18) Remaining excess FCF distributed 2011 2012 2013 2014 2015 2
Slide 18: Ignite Update
IGNITE UPDATE
Slide 19: Ignite Initiatives Update
IGNITE INITIATIVES UPDATE SUPPORTING OUR GROWTH Medium-term Aim H1 2018 Update Deliver full potential of revenue To outperform the market Aftersales H1 gross profit growth +7%1 streams: Aftersales Deliver full potential of revenue To achieve 1:1 ratio of Used to New Russia Used H1 gross profit >
Slide 20: Looking Ahead
LOOKING AHEAD
Slide 21: 2018 Outlook
2018 OUTLOOK - Continued Distribution momentum - Benefit from Subaru launches Regions - Potential continued Ethiopia disruption - Year-on-year Retail vehicle margin pressure easing into H2 with easier comparatives - Consolidation of Central America acquisition - Synergy and trading improvements expe
Slide 22: Investment Proposition
INVESTMENT PROPOSITION GROWTH AND CASH RETURNS Distribution at our core: A highly cash generative and sustainable business model Strong and increasing weighting to high growth markets Ignite strategy driving organic performance ahead of market growth Continued consolidation a material driver of valu
Slide 23: Appendix
APPENDIX
Slide 24: Multi-Layered Growth Proposition
MULTI-LAYERED GROWTH PROPOSITION ANNUAL RETURN CONSIDERATION MARKET Inchcape market growth expectations DRIVERS ORGANIC Supported by increasing exposure to EMs GROWTH OPERATIONAL Revenue stream optimisation EXCELLENCE Global cost efficiencies ATTRACTIVE TOTAL CONTRACT Strong balance sheet,
Slide 25: Regional TIV Summary
REGIONAL TIV SUMMARY REGION 2015 Actual 2016 Actual 2017 Actual 2018 Est Australia 4% 2% 1% 1% UK 6% 2% (6)% (5)% Greece 7% 4% 12% 19% Belgium 2% 8% 3% 0% Eastern Europe 6% 19% 14% 10% Singapore 66% 41% 5% (15)% Hong Kong 10% (21)% 6% 0% South America* (12)% (1)% 7% 8% Russia (36)% (11)% 12% 14% Not
Slide 26: Group Operating Profit
GROUP OPERATING PROFIT £207M £9M £3M £193M £5M £6M £15M £12M £22M H1 17 Operating Prior year Translational FX Australasia (ex UK & Europe Asia Emerging Markets Central H1 18 Operating Profit property profit property profit) Profit (Australia) 5.2% 1.5% 10.9% 5.3% 4.2% MARGIN -100 bps * -100 bps +160
Slide 27: Disclaimer
DISCLAIMER The information contained in this presentation in relation to Inchcape plc (“Inchcape”) and its subsidiaries (the "Inchcape Group") has been prepared solely for use at this presentation. It should not be used for whole or in part for any other purpose. The presentation is not directed to,