Slide 1: 2016 Results
® Inchcape . 2016 RESULTS 1 MARCH 2017
Slide 2: 2016 Highlights
2016 HIGHLIGHTS Continued Strong Strong cash Scale earnings Emerging Markets generation Distribution growth performance acquisition in FY DPS +14% South America Growing from a strong, diversified base 2
Slide 3: Delivering on our Ignite Strategy
DELIVERING ON OUR IGNITE STRATEGY Robust profit growth for Aftersales and Used Vehicles First scale Distribution acquisition in > 20 years, and entry into Thailand - stronger OEM relationships Good start to the multi-year objective of leveraging our scale Customer journey mapping completed and new i
Slide 4: Track Record of Earnings Growth
TRACK RECORD OF EARNINGS GROWTH SUPPORTING TOTAL SHAREHOLDER RETURNS EPS* +11% CAGR DPS +13% CAGR 23.8p 59.6p 20.9p 20.1p 52.1p 50.2p 17.4p 43.5p 14.5p 39.1p 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Note: * adjusted EPS, pre exceptional items 4
Slide 5: Summary Income Statement
SUMMARY INCOME STATEMENT 2016 2015 CHANGE CHANGE £M £M ACR CCR Sales 7,838 6,836 14.7% 7.6% Operating profit* 359 325 10.6% 0.2% Profit before tax* 349 312 12.0% 1.3% Tax rate (%)** 25.2 24.0 -120 bps Basic adjusted EPS (p) 59.6 52.1 14.4% Dividend per share (p) 23.8 20.9 13.9% Fixed cost review Goo
Slide 6: Financial Disclosure Changes
FINANCIAL DISCLOSURE CHANGES TO ALIGN WITH IGNITE STRATEGY Gross profit by Four geographic regions value driver Asia, Australasia, Vehicles and Aftersales UK & Europe, Emerging Mkts Reporting aligned with the Ignite Leveraging our strategy: ‘Deliver full potential on scale in Asia and all our revenu
Slide 7: Distribution
DISTRIBUTION 2016 2015 CHANGE CHANGE TRADING PROFIT MIX £M £M ACR CCR Revenue 3,398 2,897 17.3% 5.1% EM UK & Trading profit 283 267 6.0% (5.0%) Europe Trading margin % 8.3% 9.2% -90 bps Asia 43% of Group 73% of Group Revenue Trading profit Note: All numbers at actual exchange rates 7
Slide 8: Retail
RETAIL 2016 2015 CHANGE CHANGE TRADING PROFIT MIX £M £M ACR CCR EM Revenue 4,441 3,939 12.7% 9.6% Trading profit 106 88 20.4% 16.4% UK & Europe Trading margin % 2.4% 2.2% +20 bps 57% of Group 27% of Group Revenue Trading profit Note: All numbers at actual exchange rates 8
Slide 9: New Value Driver Disclosure: Aftersales and Vehicles
NEW VALUE DRIVER DISCLOSURE AFTERSALES AND VEHICLES GROSS PROFIT MIX GROSS PROFIT YoY (£M) CHANGE 2016 CCR Vehicles 679 0.2% Aftersales 400 4.0% GROUP Total 1,079 1.5% Vehicles 62.9% (-1.0% YoY) Aftersales 37.1% (+1.0% YoY) Aftersales leading growth in 2016 9
Slide 10: Group Operating Profit
GROUP OPERATING PROFIT Group Growth +11% +£11.8m +£10.6m (+13%) 360 +£8.2m (+25%) Australasia 359.1 350 (YoY +£3.3m Emerging (+9%) 340 profit Markets £m growth) Central (+3%) +£0.5m UK & Europe 330 Asia 320 324.7 2015 2016 310 8.6% 2.4% 6.9% 7.2% 4.6% Margin -70 bps -10 bps +50 bps -20 bps -10 bps N
Slide 11: Australasia
AUSTRALASIA RESILIENT PERFORMANCE DESPITE CURRENCY HEADWINDS NEW MARKET SHARE RECORD SUCCESSFUL LAUNCH TRANSACTIONAL FX for new generation Subaru Volume +8% H1 16: Yen GM neutral Subaru Impreza Market Share +20 bps (4.0%) December 2016 H2 16: Yen GM adverse REVENUE +5% TRADING PROFIT +1% 7.2% Margin
Slide 12: Asia
ASIA CHALLENGING HK, PARTIALLY OFFSET BY STRONG SINGAPORE STRONG CHALLENGING MARKET ASIA PERFORMANCE ENVIRONMENT IN HONG KONG COMBINATION IN SINGAPORE Gross profit growth Mkt volume -21% Leveraging our across all value drivers regional scale Market share leadership REVENUE -1% TRADING PROFIT -9% 8.6
Slide 13: UK & Europe
UK & EUROPE STRONG TOP-LINE GROWTH IMPROVED UK PERFORMANCE STRONG PROFIT GROWTH Growth across all value drivers IN EUROPE Good profit growth for Used and Aftersales Broad based 2016 performance UK (ex IFS) profit +4% YoY REVENUE +12% TRADING PROFIT +6% 2.4% Margin (-10 bps) Note: All numbers at cons
Slide 14: Emerging Markets
EMERGING MARKETS STRONG BROAD-BASED PERFORMANCE PROFIT GROWTH ACROSS IMPROVING TREND IMPROVING RUSSIA ALL EM REGIONS IN SOUTH AMERICA PERFORMANCE Chile & Peru Luxury Vol* 2015 trading loss £2.0m SOLID PROFIT GROWTH H1 -1% YoY 2016 trading profit £0.4m IN ETHIOPIA H2 +21% YoY REVENUE +10% TRADING PRO
Slide 15: Overheads and Gross Margin
OVERHEADS AND GROSS MARGIN GOOD FIXED COST LEVERAGE OVERHEADS 9.2% Fixed cost Site / IT OF SALES, -50 bps YoY leverage investments Gross Margin Bridge 15.0% 14.5% 14.5% (40 bps) 14.0% 14.0% (20 bps) +10 bps (20 bps) 13.5% 13.8% 13.0% 2015 Australia FX Vehicles Mix New Car Margin Aftersales Margin 20
Slide 16: Fixed Cost Review Update
FIXED COST REVIEW UPDATE £35m total cost • Leveraging our global scale £25m 2016 cost Cash phased • Eliminating cost duplication 2017 & 2018 • Consolidating support functions Pay back • Addressing uneconomic sites expected over 2 years 16
Slide 17: Income Statement Review
INCOME STATEMENT REVIEW 2016 2015 £M £M £M 2017 GUIDANCE Trading profit 388.6 354.7 Central costs (29.5) (30.0) Interest cost Operating profit 359.1 324.7 up to £19m Operating margin 4.6% 4.7% (excl. mark to market) Finance charges / JVs (9.7) (12.6) Profit before tax 349.4 312.1 Tax (88.0) (74.9) T
Slide 18: Operating & Free Cash Flow
OPERATING & FREE CASH FLOW OPERATING CASH FLOW 2016 2015 FREE CASH FLOW 2016 2015 2017 £M £M £M £M GUIDANCE Operating profit 359.1 324.7 Operating cash flow 386.0 328.4 Underlying capital Depreciation / amortisation 52.9 48.5 Net interest (11.7) (17.4) expenditure Working capital (21.9) (32.8) Taxat
Slide 19: Ignite Strategy Update
IGNITE STRATEGY UPDATE
Slide 20: Strategic Update
STRATEGIC UPDATE GOOD PROGRESS IN YEAR ONE Performing well against each objective Confident in the long-term potential to drive value creation from each one Strategic objectives link and strengthen each other Improved disclosure to gauge performance against 20
Slide 21: 50 Years of Partnership with Toyota Group in 2017
50 YEARS OF PARTNERSHIP WITH TOYOTA GROUP IN 2017 Relationships in 16 markets and across four continents Delivering long-term sustainable growth 21
Slide 22: Become the OEM's Partner of Choice
BECOME THE OEM’S PARTNER OF CHOICE RELATIONSHIP PERFORMANCE QUALITY Increasing the quality Consistently delivering of relationships we have our OEMs targets across our OEMs Mapped relationships by market by brand Understanding OEM targets regionally and globally 2016 Established development teams to
Slide 23: Strong OEM Relationships a Strategic Enabler
STRONG OEM RELATIONSHIPS A STRATEGIC ENABLER INVEST TO ACCELERATE GROWTH 23
Slide 24: Invest to Accelerate Growth
INVEST TO ACCELERATE GROWTH SCALE DISTRIBUTION ACQUISITION Owned Sales & Service sites (independent) Attractive business, creating a scale Distribution presence 11 (6) 16 (7) COLOMBIA in South America for long- standing partners 4 (4) Accretive to earnings in PERU Year 1 and enhances Group operating
Slide 25: Structural Growth Potential
STRUCTURAL GROWTH POTENTIAL GOOD TIMING FOR SOUTH AMERICAN EXPANSION 2016E – 2021E TIV CAGR CHILE New Automotive consumers +3.3% as middle classes expand Stabilising / improving PERU commodity price environment +7.5% Greater political stability - COLOMBIA supportive of investment +6.2% and growing c
Slide 26: Aftersales Success
AFTERSALES SUCCESS Express services implemented July 2016 at Mercedes-Benz Warrington - Detailed mapping of site processes to optimise efficiency - Two technicians per vehicle while customer waits Opportunities - Roll out across more UK sites and brands - Global: remove more capacity constraints and
Slide 27: Used Vehicles Success in the UK
USED VEHICLES SUCCESS IN THE UK 2016 UK Used Gross Profit +26% YoY 2016 OPPORTUNITIES - Dedicated Used - Improving pricing sales teams models - Reduced UK stock - Improving digital position presence - Retailing high quality - Continuation of PCP returns high-quality PCP returns to sell 27
Slide 28: Leverage Global Scale
LEVERAGE GLOBAL SCALE Annualised procurement savings DRIVING of £7m identified in 2016 EFFICIENCY FROM (IT, Media, Property, Consumables) OUR 29 MARKETS Leveraging our scale in Asia and COST BASE Europe, fixed cost review Bonus structure change BETTER 70:10:20, local : one-up : Ignite REVENUE AND SH
Slide 29: Lead in Customer Experience
LEAD IN CUSTOMER EXPERIENCE MAPPING THE CUSTOMER JOURNEY… DIGITAL SHOWROOM OWNERSHIP EXPERIENCE EXPERIENCE EXPERIENCE Identifying areas to improve (systems, processes, people) 29
Slide 30: Enhancing Our Digital Capabilities
ENHANCING OUR DIGITAL CAPABILITIES New digital offers for vehicles in Australia and Singapore Successful trial for service reminder automation with Salesforce.com Service Reminder Next Tuesday 15 Minutes Snooze Dismiss 30
Slide 31: Looking Ahead
® Inchcape LOOKING a
Slide 32: 2017 Outlook
2017 OUTLOOK Portfolio of markets support growth opportunity RESILIENT - Increased Emerging Markets presence CONSTANT - Slower New Vehicle trend expected in some markets CURRENCY PERFORMANCE Leveraging scale & cost review to enhance profitability EXPECTED Continued growth in Aftersales and Used Vehi
Slide 33: Conclusion
CONCLUSION Predominantly Distribution in Strongly cash Asia Pacific & generative Emerging Markets business model Driving performance for our partners and Significant growth creating value for opportunities from shareholders our Ignite strategy 33
Slide 34: Appendix
® Inchcape APPENDI a
Slide 35: New Geographical Breakdown
NEW GEOGRAPHICAL BREAKDOWN AUSTRALASIA UK & EMERGING (NO CHANGE) EUROPE MARKETS Australia Belgium Argentina New Zealand Bulgaria Chile Estonia Colombia ASIA Finland Djibouti Brunei Greece Ethiopia China Latvia Peru Guam Lithuania Russia Hong Kong Luxembourg Macau Macedonia Saipan Poland Singapore Ro
Slide 36: 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