Inchcape Plc · LSE:INCH
Inchcape — Investor Presentation (2025)
26 slides from Inchcape's investor presentation, 2025
Slide 1: Medium Term Plan Investor Narrative
MEDIUM TERM PLAN INVESTOR NARRATIVE
Slide 2: Medium term target: deliver >10% EPS CAGR to 2030
Inchcape 2 Medium term target: deliver >10% EPS CAGR to 2030 Supported by a clear investment case: The leading global automotive …with an attractive financial …driving shareholder value Distribution pureplay… profile… ▪ Long-term, diversified OEM ▪ Growth driven by market ▪ Clear dividend policy por
Slide 3: Our pillars to drive diversified growth: Scale and Optimise
Inchcape 3 Our pillars to drive diversified growth: Scale and Optimise Scale: 230 Distribution contracts across c.40 8 acquisitions since 2019, driving market Market-leading technology capabilities diverse markets share gains and growth Optimise: Non-core asset disposals, raising Disciplined OEM and
Slide 4: Medium term targets: 2025 – 2030, through-the-cycle
Inchcape 4 Medium term targets: 2025 – 2030, through-the-cycle Key value drivers: Driving returns Disciplined capital Delivering and growth: allocation: shareholder value: Market outperformance 3%-5% organic volume CAGR Dividends 40% of EPS >10% EPS CAGR c.6% + dividends Resilient operating £2.5 bil
Slide 5: Growth: organic volume CAGR of 3% - 5%
Inchcape 5 Growth: organic volume CAGR of 3% - 5% Growth Drivers: Volume Growth Target: Inchcape TAM: broadly flat to 10.8m in 2024 Organic volume CAGR 3.0% 1.2% 3% - 5% Market growth: 1% - 2% Market outperformance: 2% - 3% 1.6% M&A 2019 2024 Value-accretive acquisitions Source: IHS, Inch TIV define
Slide 6: Operating margins: Resilience through-the-cycle
Inchcape 6 Operating margins: Resilience through-the-cycle Product areas Gross Profit Gross Operating costs Operating Operating margin Margin margin target Revenue contribution Profile Optimise Key drivers 7% Vehicles: c.85% Employees Tailwinds: Revenue contribution* ▪ Economies of scale Property 10
Slide 7: Cash generation: £2.5bn, 100% PAT conversion rate
Inchcape 7 Cash generation: £2.5bn, 100% PAT conversion rate Our track record of Free Cash Flow generation1: Cash Generation Guidance: 100% FCF:PAT conversion 500 Capital-light Working capital 400 operating model optimisation leveraging third party in newly acquired dealer networks businesses 300 20
Slide 8: Our disciplined capital allocation policy
Inchcape 8 Our disciplined capital allocation policy Dividends Committed to on-going 40% annual share buybacks payout of basic New £250m programme adjusted EPS for FY 2025 Value accretive M&A Potential to invest in bolt-on acquisitions Net debt to adjusted EBITDA limit of 1x (pre IFRS16)
Slide 9: Medium term targets: 2025 – 2030, through-the-cycle
Inchcape 9 Medium term targets: 2025 – 2030, through-the-cycle Key value drivers: Driving returns Disciplined capital Delivering and growth: allocation: shareholder value: Market outperformance 3%-5% organic volume CAGR Dividends 40% of EPS >10% EPS CAGR c.6% + dividends Resilient operating £2.5 bil
Slide 10: Reference Materials
REFERENCE MATERIALS Strategy and operating model slides
Slide 11: What is Automotive Distribution
11 What is Automotive Distribution 1 2 3 Product planning – pricing, range, Logistics – shipping, importation Brand and marketing – online & offline spec and inventory management and warehousing media awareness, demand generation 4 5 6 Channel management – third party Retail – online and offline Val
Slide 12: The transformation of Inchcape to a pureplay Distributor
The transformation of Inchcape to a pureplay Distributor Number of Distribution OEM Number of Distribution Annualised Distribution Distribution Volumes Partners Markets Revenues 38 £9.3bn 68 340k 23 150k £3.4bn 20 2016 2024 2016 2024 2016 2024 2016 2024 Distribution is our core strategic focus: Capi
Slide 13: Our technology enables our differentiated offering
Our technology enables our differentiated offering Enables Inchcape to: More Customers + ▪ Deliver a seamless Improved Efficiencies customer experience ▪ Outperform for our OEMs + ▪ Attract the best people Higher Growth 13
Slide 14: Our technology capabilities across the value chain
14 Our technology capabilities across the value chain 1 2 3 4 5 6 Product Logistics Brand & Channel Retail Value-added Planning Marketing Management Services DAP - vehicle DAP - Parts AI DXP: DXP & DAP: DXP: DXP & DAP in S&OP: optimisation c.60%+ increase in c.50% order take c.40%+ initial Singapore
Slide 15: Our OEM portfolio – diversified, scaled and prestigious
Our OEM portfolio – diversified, scaled and prestigious Japan Europe China USA Selected OEM brands that Inchcape distributes passenger and commercial vehicles. Categorisation based on HQ origin. 15
Slide 16: Our opportunity for growth and outperformance
Inchcape 16 Our opportunity for growth and outperformance TAM: 10.8m, ~£325bn Our scale opportunity: 25 markets TAM where we have <10% share Inchcape Share Ambition: 10% Revenue: ~£32bn 44 markets Inchcape share: 3% new potential markets Revenue: ~£9.7bn ~3x Group Size
Slide 17: Distribution contracts – key dynamics
17 Distribution contracts – key dynamics Key drivers Key measures Future of success: of success: opportunities: ▪ Our value proposition ▪ Market share gains ▪ Conversion of in-house to independent distribution ▪ Global scale ▪ Volume growth ▪ Transition from competitor ▪ Network effect ▪ Customer sa
Slide 18: Key commercial and financial characteristics in Automotive Distribution
Key commercial and financial characteristics in Automotive Distribution KEY COMMERCIAL CHARACTERISTICS: Formal contract length 1 to 5 years INCOME STATEMENT Exclusivity Exclusive import rights for new vehicles & parts Revenue Recognition ▪ recognised on inventory sale to third parties (dealers or co
Slide 19: Inchcape's financial profile in Distribution
19 Inchcape’s financial profile in Distribution Inchcape Distribution: £9.3billion 15% -18%* c.6%* c.100% Revenue Gross Margin Adjusted FCF:PAT Operating Margin conversion Growth Driver: Market volumes Vehicles: ▪ Organic growth ▪ Working capital Market share • Supply / demand ▪ Market share ▪ Capit
Slide 20: Distribution commercial models – how we operate
20 Distribution commercial models – how we operate Distribution Gross Margin of 15%-18%* Examples: Distribution Adjusted Operating Margin of 5%-7%* Retail OM of 1%-2%* Colombia – typical ▪ Brand: Mercedes ▪ Annual units: c.3k 1. Typical Distribution markets ▪ Third Party sites: 12 ▪ Inchcape sites:
Slide 21: Managing multiple OEMs in a market
21 Managing multiple OEMs in a market Shared Retail Network Dedicated teams: Product Brand OEM Integration CRM Pricing Leveraged infrastructure: Warehouse Storage Technology Office Logistics Importation Legal Shared Responsible Business Leadership Operations HR / Finance / foundation – Legal global,
Slide 22: Our growth drivers in Distribution – OEM contracts
Illustrative purposes only. Revenue and adjusted operating profit ranges stated on a per annum basis 22 Our growth drivers in Distribution – OEM contracts Average per contract contribution of contracts won, 2022 – 2024 (44 contracts) Y1 Y3 Y5 Typical Contract profile Market share Negligible 1% At le
Slide 23: Working capital – key elements
23 Working capital – key elements Numbers quoted based on FY 2024 continuing operations basis £1.9bn £(1.6)bn £(0.1)bn Inventory Inventory financing Net trade receivables (Vehicles, Parts) (OEMs and Banks) & trade payables ▪ Inventory profile split: c.80% new ▪ Mix of direct OEM trade terms ▪ Receiv
Slide 24: Industry Working capital cycle
24 Industry Working capital cycle Key: Inventory flow Cashflow OEM Distributor Stock Holding Shipping 30-60 days Dealers Consumers Transit time 30-90 days Stock Production Holding; Order 1.5 Months Bank OEM Bank terms Bank 30-90 Days 0-30 30-150 0-30 Pre-Production days days days Inchcape Inventory
Slide 25: Our cash generative model drives value for shareholders
25 Our cash generative model drives value for shareholders Key elements: Operating Working D&A Interest & Tax Capital FCF profit capital Growth in line Corporate debt, expenditure conversion c.6% of sales Generally, neutral with revenue Inventory finance, Distribution is capital- Guidance of 100% on
Slide 26: Our robust financial profile in Distribution
26 Our robust financial profile in Distribution 15-18% c.6% Gross Margins Operating Margins Capital Allocation policy: ▪ Organic investment ▪ Dividends ▪ Value-accretive acquisitions c.100% 25%-30% ▪ Share buybacks, as appropriate FCF:PAT conversion ROCE Within leverage limit of 1x net debt: adjuste