Vertu Motors Plc · LSE:VTU
Vertu Motors — H1 FY2023 Earnings Presentation
30 slides from Vertu Motors's earnings presentation, October 2022
Slide 1: Analyst and Investor Presentation – Interim Results
Vertu Motors plc Analyst and Investor Presentation Interim Results For the six month period ended 31 August 2022
Slide 2: Agenda
Agenda 2 First Half Highlights – Robert Forrester CEO First Half Financial Results – Karen Anderson CFO Strategic Update, Outlook & Summary – Robert Forrester CEO Interim Results FY23
Slide 3: At A Glance
At A Glance 3 Interim Results FY23
Slide 4: H1 FY23 Highlights – Continued execution against strategic goals
H1 FY23 Highlights – Continued execution against strategic goals 4 Portfolio Management Digitalisation Financial Colleague Focus Expansion with Toyota with Continued development of the Growth in revenues: Group now the fourth Vacancies substantially reduced commencement of operations in the West tec
Slide 5: H1 FY23 Financial KPI’s
FY19 H1 1.6 FY20 H1 1.6 FY21 H1 1.1 FY22 H1 1.9 Revenue £’bn FY23 H1 2.0 H1 FY23 Financial KPI’s FY19 H1 18 FY20 H1 17 FY21 H1 5 FY22 H1 52 FY23 H1 28 Adjusted PBT £’m FY19 H1 11 FY20 H1 16 FY21 H1 66 FY22 H1 64 FY23 H1 23 Free Cash Flow £’m FY19 H1 173 FY20 H1 170 FY21 H1 171 FY22 H1 223 FY23 H1 24
Slide 6: Financial Results
Financial Results Robert Forrester Karen Anderson CEO CFO
Slide 7: Income Statement
Income Statement 7 6 months ended 31 August £’m (unless otherwise stated) 2022 2021 % Change Revenue 1,999.7 1,924.1 +3.9 Gross profit 223.7 223.1 +0.3 Gross margin % 11.2% 11.6% - 0.4 Government support (rates and CJRS) - 5.6 - Operating expenses (192.4) (173.3) +11.0 Adjusted1 operating profit 31.
Slide 8: Profit Bridge
Profit Bridge 8 Core Group Gross Profit Movement: - £2.7m 70.0 7.7 1.0 (15.8) 60.0 50.0 2.0 1.1 0.1 (15.3) 1.2 40.0 (5.6) 30.0 0.6 (0.6) 51.8 20.0 28.1 28.2 10.0 0.0 H1 FY22 New vehicles New fleet & Used vehicles Service Parts Accident & Forecourt Core Group Government Finance costs Acquisitions & H
Slide 9: Costs – inflationary headwinds
Costs – inflationary headwinds 9 6 months ended 31 August Salary Cost Variance £’m £’m 2022 2021 Variance Pay awards 4.8 Salary cost 108.4 99.8 8.6 Additional headcount 2.6 Vehicle and valeting costs 18.5 17.5 1.0 NMW and NIC rate increase 2.0 Marketing costs 18.5 17.7 0.8 Commissions & bonuses (0.8
Slide 10: Costs – Energy
Costs – Energy 10 Contract Position Purchasing Strategy Energy Saving Capital Investment Group fixed price electricity New energy purchasing strategy ‘War on waste’ initiative targets £1.5m further investment in supply contract at below current developed improved colleague behaviours to replacement
Slide 11: Strong Free Cash Flow
Strong Free Cash Flow 11 Net cash flow from operating activities: £39m 50 14.9 0.9 0.8 (7.8) 45 40 (7.8) 35 30.0 (7.8) 30 25 23.2 (10.1) 20 15 (11.4) 10 5 1.7 0 Operating profit Depreciation & Working capital Share based Interest & Net sustaining Lease principal Free Cash Flow Acquisitions and Divid
Slide 12: Capital Allocation Discipline
Capital Allocation Discipline 12 Net cash position of £17.8m at 31 August 2022 (net of £12.4m used vehicle stocking loan utilisation) Tangible net assets of £244m (tangible net assets per share 71.2p) Significant firepower available to invest of c.£100m Investment in growth Return to Shareholders Ac
Slide 13: Balance Sheet
Balance Sheet 13 31 Aug 2022 31 Aug 2021 28 Feb 2022 £’m £’m £’m Current Assets: New vehicle stock levels rising Intangible assets 107.5 101.5 105.2 Retirement benefit asset 5.1 7.9 9.1 Vehicle Inventory Right of use assets 74.6 81.2 78.3 Tangible assets 31 Aug 2022 28 Feb 2022 Variance 261.7 246.9
Slide 14: Strategic Update
Strategic Update Robert Forrester Robert Forrester CEO CEO
Slide 15: Consistent Group Strategy
Consistent Group Strategy 15 Mission & Vertu Motors to be the most admired and Values To aim for every dealership to be the best To deliver an outstanding customer motoring respected dealer group in the automotive retailer in their respective town or city experience through honesty and trust industr
Slide 16: Vehicle Sales: UK Market Trends
Vehicle Sales: UK Market Trends 16 New Vehicles Used Vehicles Market: Six months to June 2022 UK used vehicle UK vehicle registration forecast 20221 transactions2 3.53 million 1.60 million 8.3% on last year 2.8% on 2021 registrations 12.8% on pre-pandemic 2019 35.4% on pre-pandemic levels Monthl
Slide 17: Group Vehicle Sales Performance
Group Vehicle Sales Performance 17 Like-for-Like Vehicle Volumes – 6 month period ended 31 August 2022 Gross Profit Per Unit £ Group Like- Group Like- H1 FY2023 H1 FY2022 for-like % UK % Change for-like v 2,105 1 Units Units Change (SMMT) SMMT % Retail 16,561 17,813 (7.0) (2.8) (4.2) 1,418 Motabilit
Slide 18: Group Aftersales Performance
Group Aftersales Performance 18 Accident Like-for-like H1 Service Parts & Smart Forecourt Total FY23 v H1 FY22 Repair 1 Revenue (£’m) 80.5 93.3 9.8 6.7 190.3 1 Revenue Change % 4.8% 8.6% 30.4% 93.1% 9.6% Gross profit change (£’m) +1.2 +2.0 +1.1 +0.1 +4.4 2 Gross Margin % 74.8% 22.5% 53.2% 5.9% 45.6%
Slide 19: Digitalisation
Digitalisation 19 Used Car Analytics Online Reservation Concierge Service Wiperblades.co.uk Interim Results FY23
Slide 20: Colleague Focus
Colleague Focus 20 Engagement and Retention Training and Development • UK labour shortages reducing, with Group • Pace of sector change drives need for vacancy levels improved over the Period (500 to enhanced training and skills development 400) • Group has significant investment in apprentice • Col
Slide 21: Current Trading & Outlook
Current Trading & Outlook 21 Current Trading Outlook • Full year results expected to exceed current market • Tightness of vehicle supply expected to continue expectations well into 2023 • Supply constraints remain evident and volatile • Vehicle margins anticipated to remain strong impacting new, fle
Slide 22: Summary
Summary 22 Group well-capitalised and asset backed Significant firepower to expand operations and scale Digitalisation gathering pace in impact, benefiting customers and productivity People-focus provides talented, motivated colleagues to serve customers Group excited to benefit from pace of change
Slide 23: Definitions of key terminology
Definitions of key terminology 23 Core: Comparison against H1 FY2022 Dealerships that have traded for the full period of March to August 2021 and March to August 2022 Like-for-like: Dealerships that have comparable trading periods in two consecutive financial years, only the comparable period is mea
Slide 24: New Retail Vehicle Trends
New Retail Vehicle Trends 24 H1 H2 H1 H2 H1 H2 H1 FY2020 FY2020 FY2021 FY2021 FY2022 FY2022 FY2023 Selling price per unit [1] (£) 18,355 18,726 19,789 19,980 21,423 22,539 24,062 Gross profit per unit [1] (£) 1,418 1,524 1,436 1,714 1,688 2,205 2,105 Margin (Group) [1] 7.1% 7.4% 6.7% 7.9% 7.3% 9.5%
Slide 25: Fleet and Commercial Vehicle Trends
Fleet and Commercial Vehicle Trends 25 H1 H2 H1 H2 H1 H2 H1 FY2020 FY2020 FY2021 FY2021 FY2022 FY2022 FY2023 Selling price per unit (£) 20,662 20,518 21,494 23,494 23,850 24,874 24,109 Gross profit per unit (£) 603 683 679 834 878 1,046 988 Margin (Group) 3.4% 4.0% 3.8% 4.1% 4.2% 4.8% 4.7% Like-for-
Slide 26: Used Vehicle Trends
Used Vehicle Trends 26 H1 H2 H1 H2 H1 H2 H1 FY2020 FY2020 FY2021 FY2021 FY2022 FY2022 FY2023 Selling price per unit (£) 14,517 14,637 15,141 15,454 16,194 19,951 19,861 Gross profit per unit (£) 1,172 1,244 1,386 1,458 1,657 1,844 1,560 Margin (Group) 8.1% 8.5% 9.2% 9.4% 10.2% 9.2% 7.9% Margin (Core
Slide 27: Vehicle Volumes Sold
Vehicle Volumes Sold 27 Total units sold FY23 H1 vs FY22 H1 Like-for-like units sold FY23 H1 vs FY22 H1 +/- % +/- % 16,705 16,891 (16.0%) Used Trade (17.6%) Used Trade 13,765 14,195 48,948 Used Retail 49,697 (13.4%) Used Retail (15.2%) 41,491 43,022 11,695 New Fleet & Agency Car 11,609 (12.2%) New F
Slide 28: Net Debt
Net Debt 28 Facilities Drawn Facilities Drawn at 31 Aug 22 at 31 Aug 22 at 28 Feb 22 at 28 Feb 22 £’m £’m £’m £’m 5 year acquisition facility (from February 2019) 62.0 44.0 62.0 44.0 20 year mortgage facility (from December 2020) 11.7 11.7 12.7 12.0 1 year working capital facility (from May 2021) 48
Slide 29: Dealership Portfolio
Dealership Portfolio 29 Bristol Street Vertu Outlets Motors Macklin Motors Motors Ford 20 19 1 160 sales outlets Vauxhall Hyundai 15 12 14 9 1 3 Nissan 11 9 2 Renault 9 8 1 Peugeot 8 6 2 Volume 85 Citroen SEAT 6 4 6 4 Skoda 4 4 Kia 3 1 2 MG 3 2 1 Mazda 2 1 1 Total Volume 97 82 13 2 59 Honda 14 14 Vo
Slide 30: Disclaimer
Disclaimer 30 This presentation contains forward looking statements. Although the Group believes that the estimates and assumptions on which such statements are based are reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond the Group’s control. Th