Slide 1: 2012 Results
® Inchcape 12 March 2013 IN THE AUIOMOIIVE INDUS TIRY
Slide 2: André Lacroix, Group Chief Executive
André Lacroix Group Chief Executive
Slide 3: Record PBT, strong EPS growth of 12%
Record PBT, strong EPS growth of 12% Revenue Operating profit* Return on sales* 6.2 6,085 300.0 4.3 261.9 4.5 4.2 5,885 6.0 5,826 244.4 3.8 5.8 5,584 250.0 225.5 5.6 £m £m 3.5 % 3.1 5.4 200.0 175.2 5.2 5.0 150.0 2.5 2009 2010 2011 2012 2009 2010 2011 2012 2009 2010 2011 2012 +4.4% +7.2% +10 BPS Prof
Slide 4: Six consecutive quarters of Group LFL revenue growth
Six consecutive quarters of Group LFL revenue growth Group LFL (FY 2012 +4.6%) APAC / EM LFL (FY 2012 +12.0%) 15.0% 13.1% 35.0% 28.1% 7.5% 30.0% 10.0% 25.0% 4.1% 3.2% 5.0% 20.0% 1.4% 1.3% 15.0% 9.4% 8.2% 8.4% 0.0% 7.2% 6.3% 10.0% -0.8% 5.0% 1.2% -5.0% 0.0% -10.0% -5.0% -9.3% -10.0% -15.0% -15.0% -11
Slide 5: Profit increase driven by robust growth in APAC / EM and UK
Profit increase driven by robust growth in APAC / EM and UK Group OP: 3 year CAGR +14.3% 280 261.9 260 244.4 240 225.5 220 £m 200 175.2 180 160 140 120 100 2009 2010 2011 2012 APAC / EM OP: +18.6%* UK OP: +11.8%* Europe OP: -16.3%* 198.1 70.0 35.0 200.0 65.2 65.0 60.4 28.6 27.8 177.4 30.0 180.0 60.0
Slide 6: Positive Group operating leverage: ROS +10 BPS
Positive Group operating leverage: ROS +10 BPS 2012 Group Analysis ROS 2012 Regional Analysis ROS GM 14.4% -30 BPS YoY North Asia 10.2% +50 BPS Record OP • Strong pricing power performance in distribution markets offset by: South Asia 9.1% +30 BPS • Increased new vehicle contribution / mix effect, c
Slide 7: 18% cost reduction since 2008
18% cost reduction since 2008 (9) (47) (43) £124m of cost reduction (pre-inflation) since 2008 At actual currency Note: Pre exceptional items * 2008 Adj reflects a £25m increase for the Musa acquisition 7
Slide 8: Self help measures continue to improve the Group's productivity
Self help measures continue to improve the Group’s productivity # Sites* Overheads (£m)** 280 700 275 269 655 265 652 270 650 260 612 613 265 259 260 600 255 250 550 245 240 500 2009 2010 2011 2012 2009 2010 2011 2012 Overheads as % of sales** Profit per employee (£k)*** 12.0% 11.7% 25 19.1 20.0 11.
Slide 9: Confidence in the Group's earnings growth potential
Confidence in the Group’s earnings growth potential • PBT increase of £22.6m and EPS growth of 12% • 4.3% ROS and 22.3% ROCE in 2012 • Dividend payout ratio increased from 30% to 40% • 2012 dividend of 14.5p, up 32% YoY • Robust performance expected in 2013 PBT (£m) ROS % ROCE % 270.0 4.5% 4.2% 4.3%
Slide 10: John McConnell, Group Finance Director
John McConnell Group Finance Director
Slide 11: Summary profit & loss account
Summary profit & loss account 2012 2011 Change £m £m % Sales 6,085.4 5,826.3 4.4 Operating profit* 261.9 244.4 7.2 Net financing costs* 11.8 13.7 13.9 Profit before tax* 250.3 227.7 9.9 Tax rate (%) 24.6 26.0 (1.4)ppt Basic adjusted EPS (p) 39.7p 35.5p 11.8 * Pre exceptional items Note: All numbers
Slide 12: Impact of currency on operating profit
Impact of currency on operating profit* 2011 @ actual 2012 @ 2011 2012 @ actual (£m) Impact exchange rates actual rates exchange rates Australasia 55.3 66.8 67.2 0.4 Europe 24.0 17.9 16.8 (1.1) North Asia 42.0 52.0 52.8 0.8 South Asia 26.0 34.4 35.1 0.7 Russia and EM 54.1 44.5 43.0 (1.5) Total overs
Slide 13: Segmental performance
Segmental performance 2012 2011 Change £m £m % Sales Distribution 2,511.5 2,357.4 6.5 Retail 3,573.9 3,468.9 3.0 6,085.4 5,826.3 4.4 Operating profit Distribution 194.0 172.0 12.8 Retail 86.1 89.8 (4.1) Central costs (18.2) (17.4) (4.6) 261.9 244.4 7.2 Operating margin Distribution 7.7% 7.3% 0.4ppt
Slide 14: Group: trading profit
Group: trading profit 290.0 11.9 10.8 270.0 9.1 £m 4.8 280.1 250.0 261.8 (11.1) (7.2) 230.0 2011 Russia & Europe UK South Asia North Asia Australasia 2012 Emerging Markets Note: Pre exceptional items All numbers at actual exchange rates 14
Slide 15: Distribution: trading profit
Distribution: trading profit 2012 Trading margins 2012 194.0 Distribution 7.7% +40 BPS North Asia 10.8 North Asia 10.2% +50 BPS South Asia 9.1 South Asia 9.1% +30 BPS Australasia 8.6 Australasia 6.9% - UK 0.3 UK 19.3% +20 BPS Russia & Emerging 0.2 Russia and Emerging Markets 9.0% -70 BPS Markets Eur
Slide 16: Retail: trading profit
Retail: trading profit 2012 Trading margins 2012 86.1 Retail 2.4% -20 BPS UK 4.5 UK 2.8% +20 BPS Australasia 3.8% +60 BPS Australasia 3.3 Europe (0.4)% -20 BPS (0.2) Russia and Emerging Markets 1.4% -120 BPS Europe Russia & Emerging (11.3) Markets 2011 89.8 70.0 80.0 90.0 £m Note: Pre exceptional it
Slide 17: Regional analysis: trading profit
Regional analysis: trading profit 2011 2012 Russia and Russia and Emerging Markets Emerging Markets Australasia 15% Australasia 21% 21% 24% £261.8m £280.1m UK North Asia 23% 16% UK 23% North Asia 19% Europe South Asia 6% Europe 10% South Asia 9% 13% Note: Pre exceptional items All numbers at actual
Slide 18: Cash flow
Cash flow Operating cash flow 2012 2011 Free cash flow 2012 2011 Net cash 2012 2011 £m £m £m £m £m £m Operating profit* 261.9 244.4 Operating cash flow 249.2 244.7 Free cash flow 93.8 98.1 Depreciation / amortisation 33.4 33.5 Net interest (17.6) (9.5) Share issue 10.1 0.6 Working capital (4.7) (6.0
Slide 19: Net finance costs
Net finance costs* 2012 2011 £m £m Bank and loan interest 2.9 3.3 Stock holding interest (18.0) (13.6) Interest on private placement notes (4.4) (3.9) Pension interest net 2.1 1.4 Other including capitalised interest adj. 0.8 1.5 Interest excluding mark to market (16.6) (11.3) FV on private placemen
Slide 20: Exceptional items
Exceptional items £m 2012 2011 Restructuring costs (17.3) (13.4) Closure of defined benefit pension schemes 19.7 - Loss on deemed disposal of JV (1.2) - Operating exceptionals 1.2 (13.4) Finance exceptional items* - (10.9) Total exceptional items (before tax) 1.2 (24.3) * 2011 Greek Government Bonds
Slide 21: Guidance – Full Year 2013
Guidance – Full Year 2013 Tax rate 25% Interest cost (excl. mark to market) c £16m Capital expenditure £110m Net Cash c £150m 21
Slide 22: Business Update
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Slide 23: Inchcape Customer 1st Strategy
Inchcape Customer 1st Strategy STRENGTHEN EXPAND To be the Superior customer world’s most Selective value proposition customer centric investment in high through Inchcape automotive margin / high Advantage retail group growth areas 23
Slide 24: Operational discipline on Top Five Priorities
Operational discipline on Top Five Priorities Customer 1st strategy to create differentiation Commercial initiatives Growing Growing to grow revenues ahead of market aftersales competitors share Controlling Selective Cash initiatives Improving to grow profit and operating working capital margin cash
Slide 25: 2013 Outlook
2013 Outlook • We expect the Group’s solid performance in the service, parts and used vehicle categories (60% of GP) to continue • Inchcape’s brand partners will continue to outperform and the Group will benefit from its broad geographic spread • Replacement cycle driven growth expected in the UK, A
Slide 26: Strong 2013 model line-up
Strong 2013 model line-up Land Rover / VW / Audi / BMW / MINI Jaguar Mercedes Benz Subaru Toyota / Lexus Porsche X5 Range Rover A Class Forester Auris Golf 3 series GT Range Rover Sport CLA Outback Diesel Auris Wagon A3 Sportback 4 Series F Type E Class Rav 4 RS6 Z4 S Class Corolla SQ5 I3 IS Cayman
Slide 27: UK Retail
UK Retail Record operating margin 2013 TIV est. FY estimate: 2,085k, +2% vs. 2012 2012 achievements • LFL sales +5.0% • Record trading margin of 2.8%, +20bps year on year • Continued to grow market share through superior Inchcape Advantage Customer 1st processes and capitalised on strong new product
Slide 28: Europe
Europe Resilient performance despite challenging trading conditions Belgium Greece 2013 TIV est. FY estimate: 525k, -3% vs. 2012 FY estimate: 55k, -6% vs. 2012 2012 • Successful launches of the Toyota Yaris Hybrid and • Launched new models: Toyota Yaris HSD and Hilux SC achievements Lexus RX • Head
Slide 29: South Asia
South Asia Strong Revenue and OP growth despite challenging trading conditions Singapore 2013 TIV est. FY estimate: 34k, -10% vs. 2012 2012 achievements • Benefitted from new product launches and improved supply • Market share improved year on year by 110bps • Aftersales retention improved through e
Slide 30: North Asia
North Asia Record OP, Triple Crown Award for the 21st Year Hong Kong 2013 TIV est. FY estimate: 45k, +4% vs. 2012 2012 achievements • Launched new models: Toyota Prius C, Wish, 86, Lexus GS 450h and Jaguar XJ 3.0 SC • Land Rover volume increased 95% year on year in 2012 • Continued growth in Aftersa
Slide 31: Australasia
Australasia Strong revenue growth and record profitability Australia Distribution Australia Retail 2013 TIV est. FY estimate: 1,145k, +3% vs. 2012 2012 • Successful launches of XV, Impreza and BRZ and • Leveraged new model launches and special editions achievements improved supply • Improved service
Slide 32: Russia and Emerging Markets
Russia and Emerging Markets Challenging Year in 2012 Revenue (£m) Operating Profit (£m) 1,262.5 1,300.0 1,220.5 60.0 54.1 1,200.0 1,056.0 50.0 43.0 1,100.0 39.3* 40.0 1,000.0 868.7 30.0 900.0 800.0 20.0 9.2* 700.0 10.0 600.0 0.0 2009 2010 2011 2012 2009 2010 2011 2012 3 Year CAGR +13.3% 3 Year CAGR
Slide 33: OP decrease driven by new car margin pressure, unfavourable forex and inflation
OP decrease driven by new car margin pressure, unfavourable forex and inflationary pressure on cost Russia & Emerging Markets profit bridge 2011 OP £54.1m Negative Forex (£1.5m) Strong aftersales growth and Gross profit decrease on New Vehicles (£12.6m) capacity expansion are Gross profit Increase o
Slide 34: Russia
Russia Challenging trading performance 2013 TIV est. FY estimate: 3.0m, +2% vs. 2012 2012 achievements • Market share growth in St. Petersburg and Moscow with most brand partners • Grew Aftersales retention through focus on reaching every customer via Reminder Call Program and offering every visitor
Slide 35: Emerging Markets
Emerging Markets Challenging trading performance The Baltics The Balkans Poland South America Africa China 2013 TIV est. FY estimate: 41k, +2% FY estimate: 111k, FY estimate: 276k, Chile: 354k, +5% vs. Data not available 14.9m, +5% vs. vs. 2012 flat vs. 2012 +2% vs. 2012 2012 2012 Peru: 200k, +5% vs
Slide 36: Attractive structural growth prospects in Russia and Emerging Markets
Attractive structural growth prospects in Russia and Emerging Markets 9% China 8% Increasing car penetration driving high TIV growth 7% Asia-Pacific TIV CAGR 2012-17 6% Africa E Europe 5% 4% South America Russia 3% 2% N America & W Europe 1% 0% 0 100 200 300 400 500 600 700 Car Penetration (Car Parc
Slide 37: Capex investment in 2013
Capex investment in 2013 • Capacity expansion £38m • Chile • Peru • Russia • Ethiopia • Greenfield expansion £5m • Porsche Nanchang • Mercedes Jiujiang • Standards upgrade £20m • UK • Singapore • IT upgrades £27m • Maintenance capex £20m • Total £110m 37
Slide 38: M&A Update
® Inchcape IN THE AUIOMOIIVE INDUS TIRY
Slide 39: Australia: Trivett Automotive Group
Australia Trivett Automotive Group Acquisition multiples • Australia’s leading premium & luxury • 5.6x 2012 EBITDA automotive group • 4.4x 2012 EBITDA ex • Calendar 2012 revenue £390m, property* EBIT £12m (ROS 3.1%) *adjusted for notional rent on freeholds • ROS target of 3.5% in medium term • Robus
Slide 40: Outlook
® Inchcape IN THE AUIOMOIIVE INDUS TIRY
Slide 41: Strategic partner in the global automotive value chain
Strategic partner in the global automotive value chain Distribution Manufacturer • Inchcape provides a trusted, highly professional and well financed route to market for leading car brands OEMs Distributor • Exclusive national sales and (Vehicles & Parts) marketing company • Vertically Integrated Re
Slide 42: Sustainable growth
Sustainable growth Global TIV Global Car Parc +25% +20% million million Source: IHS Automotive (Global Insight) Source: LMC Automotive (JD Power) Growth opportunities in all categories: New, Used, F&I, Service & Parts Growth opportunities across the value chain * TIV – Total Industry Volume (number
Slide 43: Inchcape scale exposure to fast growing APAC / Emerging Markets
Inchcape scale exposure to fast growing APAC / Emerging Markets TIV growth CAGR Car parc growth % Inchcape Trading profit GDP growth Inchcape % Inchcape 2012-17 CAGR 2012-17 Trading profit Margin % CAGR 2012-17 markets Revenue 2012 (Source: IHS Automotive (Source: LMC 2012 2012 (Source: IMF) (Global
Slide 44: Global premium automotive group, partner to the world's leading car brands
Global premium automotive group, partner to the world’s leading car brands Right Markets: Right Categories: >70% profits Five distinct from Asia Pacific revenue streams & Emerging offering growth / Markets defensive mix Right Brands: Right Financials: 90% of profits Attractive growth from 6 leading
Slide 45: Appendix
® Inchcape IN THE AUIOMOIIVE INDUS TIRY
Slide 46: Definitions
Definitions Like-for-like The following are excluded from like-for-like sales: 1. Businesses that are acquired, from the date of acquisition until the 13th month of ownership 2. Businesses that are sold or closed 3. Retail centres that are relocated from the date of opening until the 13th month of t
Slide 47: Broad geographic spread - truly international
Broad geographic spread - truly international United Kingdom (MLP) R Australasia South Asia North Asia Europe 35.1% of ’12 Group Revenue 19.2% of '12 Group Revenue 6.3% of '12 Group Revenue 8.5% of '12 Group Revenue 10.1% of '12 Group Revenue 23.3% of ’12 Group Trading 24.0% of '12 Group Trading 12.
Slide 48: 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