Slide 1: Pendragon PLC 2022 Full Year Results
PENDRAGON PLC 2022 FULL YEAR RESULTS 22ND MARCH 2023
Slide 2: Agenda
Agenda 1. Introduction Bill Berman 2. Financial review Mark Willis 3. Operating highlights & strategy update Bill Berman 4. Summary & outlook Bill Berman 2
Slide 3: Our purpose, strategic vision & values
Our purpose, strategic vision & values Driving beyond the possible Transform automotive retail through digital innovation & operational excellence Drive our Unite as One innovation Do the right Enjoy the thing journey 3
Slide 4: Diversified assets & unique advantages
Diversified assets & unique advantages Pendragon Vehicle UK Motor Pinewood Management (PVM) New, OEM approved / standalone Market leading Dealer Fleet & contract hire provider. used vehicle sales & aftersales. Management System (DMS) & end- Overview Partners for 20 OEM brands to-end omnichannel capa
Slide 5: Our strategy
Our strategy Strategy 1. Unlock value 2. Disrupt 3. Grow & diversify in UK Motor used cars Pinewood Accelerate digital innovation Re-brand Digital product extension Drive operational excellence & best Deliver material existing order Differentiate value proposition practice pipeline Build flexible ac
Slide 6: FY22 performance overview
FY22 performance overview • Continued investment in strategic initiatives driving performance • Invested more than ever before in Pinewood, maximising benefits to external Operating customers & UK business highlights • New processes & products in UK Motor driving improved productivity & strong margi
Slide 7: Financial review
Financial review 7
Slide 8: Key metrics: a far more efficient store estate since strategy launch in FY20
Key metrics: a far more efficient store estate since strategy launch in FY20 Gross Gross Underlying Underlying Revenue operating profit before Net debt profit margin % costs tax £3,620.0m £457.2m £(358.7)m £23.3m FY22 +4.9% vs FY21 +3.6% vs FY21 £57.6m (145 stores) 12.6% +10.4% vs FY21 -£26.4m vs FY
Slide 9: Financial review: Income statement
Financial review: Income statement • Revenue increase of 4.9%: ― Like for like revenue increase of 6.7% ― Increases in new, used & aftersales revenue Income Statement (£m) FY 2022 FY 2021 % Change • Strong gross margins: ― Strong growth in new margins Revenue 3,620.0 3,449.9 4.9% ― Reduced used marg
Slide 10: Financial review: Cashflow
Financial review: Cashflow Summary Cashflow (£m) FY 2022 FY 2021 • Net debt reduction of £26.4m vs FY21 to £23.3m (FY21: £49.7m) Underlying Operating Profit 98.5 116.3 Depreciation and Amortisation 33.5 36.1 • £116.7m cash generated from operations with strong trading driving Share Based Payments 3.
Slide 11: Financial review: Balance sheet
Financial review: Balance sheet • Further strengthening of balance sheet Balance Sheet (£m) ― £55.4m Increase in net assets from £225.6m at Dec-21 to £281.0m at Dec-22 Dec-21 Change Dec-22 Property 233.7 217.6 16.1 Plant & Equipment 26.8 24.2 2.6 • £18.7m Increase in property, plant & equipment Good
Slide 12: Operating highlights & strategy update
Operating highlights & strategy update 12
Slide 13: UK Motor
UK Motor • Previously reported Franchised UK Motor & Car Store divisions are now combined to reflect the new group-wide omni-channel approach to used car retailing • Significant capital Investment in facilities: ― Developments in BMW, JLR, Porsche, Mercedes & CarStore • Both new & used volumes impac
Slide 14: Improved GPUs compared to historical averages
Improved GPUs compared to historical averages • Focus on maximising margin on both new & used vehicles, underpinned by strategy: ― Record high new GPU at £2,719 ― Used GPU £1,607, well above historical levels as strategic gains underpin performance (2011-2018 avg: £947) New GPU: Used GPU: £2,719 £1,
Slide 15: Unlock value in UK Motor (1 of 4)
FY22 delivery / Unlock value in UK Motor (1 of 4) FY23 plans Omnichannel strength & advanced digital operating model (1 of 2) Unlock value Finance & Menu pricing exhibit in UK Motor Sales+ Insurance Accelerate digital innovation ✓ ❑ Insurance product ✓ ❑ Variable APRs by automation finance balance D
Slide 16: Unlock value in UK Motor (2 of 4)
FY22 delivery / Unlock value in UK Motor (2 of 4) FY23 plans Omnichannel strength & advanced digital operating model (2 of 2) Unlock value Appraisal & valuation capabilities exhibit Acquisition, management & in UK Motor pricing platform Accelerate digital innovation ✓ ❑ Market-based pricing augmente
Slide 17: Unlock value in UK Motor (3 of 4)
FY22 delivery / Unlock value in UK Motor (3 of 4) FY23 plans New processes & products to drive margin Unlock value in UK Motor Reconditioning Aftersales Used guarantees Accelerate digital innovation ✓ ❑ Revised stock ✓ ❑ Productivity ✓ ❑ Tailored & tiered allocation improvements guarantees driving D
Slide 18: Unlock value in UK Motor (4 of 4)
FY22 delivery / Unlock value in UK Motor (4 of 4) FY23 plans Lead UK launch partner for BYD Unlock value in UK Motor BYD Accelerate digital innovation ✓ ❑ World’s largest new energy vehicle manufacturer Drive operational excellence ✓ ❑ Go-live on 15 March with ‘ATTO 3’ th ✓ & best practice ❑ Two lau
Slide 19: Disrupt used cars (1 of 4)
Disrupt used cars (1 of 4) FY22 delivery Market leading omnichannel / hybrid customer proposition Disrupt Further proposition used cars revision Re-brand ✓ ❑ All Group stock to unlock marketplace Differentiate value ✓ ❑ Greater scale than proposition pureplay competitors Build flexible acquisition &
Slide 20: Disrupt used cars (2 of 4)
FY22 delivery / Disrupt used cars (2 of 4) FY23 plans Physical assets to support the omnichannel customer proposition Disrupt used cars Stores CarStore Direct Re-brand ✓ ❑ Evans Halshaw ✓ ❑ Ten new locations live fulfilment for SYC; Click & Differentiate value proposition ✓ ❑ Rebrand of existing Col
Slide 21: Disrupt used cars (3 of 4)
Disrupt used cars (3 of 4) FY22 delivery Successful launch of market-leading proposition Disrupt Proposition used cars Impact launch Re-brand ✓ ❑ Integrated omni- ✓ ❑ Digital traffic up >60% channel campaign YoY Differentiate value proposition ✓ ❑ Prime-time TV ✓ ❑ New customer advertising acquisiti
Slide 22: Disrupt used cars (4 of 4): Digital disruptors
Disrupt used cars (4 of 4) Comparison vs. HY22: Maintained market leading omnichannel capability vs. digital disruptors Digital Fulfilment Enquiry Sale Aftersales Other Reserve & Regulated Non- MOT & Trustpilot Live Enquiry Cash Finance Part- Sell Your Click & Home Brand book products regulated serv
Slide 23: Pinewood
Pinewood • Further growth in user numbers ― Growth accelerated in H2, from flat in H1 to 4% growth for FY with growth in UK&I. ― Total users at 31.7k ― 13% increase in international users to record high 6,400 ― Entry into new markers in Singapore & Middle East ― Adoption of direct sale model in Asia
Slide 24: Grow & diversify Pinewood
FY22 delivery / Grow & diversify Pinewood FY23 plans Group omnichannel enabler & standalone growth Grow & diversify Pinewood Group omnichannel enabler Growth & pipeline Digital product extension ✓ ❑ Vyne open banking payments ✓ ❑ Singapore & Middle East market entry ✓ ❑ Sales+ ✓ ❑ 13% international
Slide 25: Leasing
Leasing • High margin on disposals; residual values benefitting from increased used vehicle prices • Supply constraints impacting fleet size. Strong order bank of over 2,100 orders • Opportunity for growth in EV lease market ― C.40% of current order banks is EV & Hybrid vehicles Revenue: Underlying
Slide 26: Summary & outlook
Summary & outlook 26
Slide 27: Summary & outlook
Summary & outlook • Delighted with the scale of delivery & value creation across the Group in FY22 • Omnichannel capabilities & advanced digital operating model, alongside revised operational execution, are market leading in the UK Excellent progress & • Cross-functional team continues to maintain a
Slide 28: Q&A
Q&A 28
Slide 29: Analyst guidance
Analyst guidance • New car supply expected to continue to gradually ease in FY23, though this is dependant on further reduction of supply constraints. Used car supply expected to remain tight following 3 years of lower new car sales • Improved volume & initiatives expected to drive GP growth to more
Slide 30: Appendix – Divisional financial summary
Appendix – Divisional financial summary 30
Slide 31: UK Motor
UK Motor UK Motor (£m) % Change FY 2022 FY 2021 % Change LFL Revenue 3,536.2 3,332.7 6.1% 7.0% Gross Profit 415.7 397.3 4.6% 5.6% Operating Costs (346.6) (309.9) 11.8% 13.2% Operating Profit 69.1 87.4 -20.9% -20.6% Gross Margin % 11.8% 11.9% -0.2% -0.1% Operating Margin % 2.0% 2.6% -0.7% -0.7% New (
Slide 32: Software – Pinewood
Software – Pinewood Software - Pinewood (£m) FY 2022 FY 2021 % Change Revenue 25.4 24.4 4.1% Gross Profit 22.7 22.5 0.9% Operating Costs (11.7) (10.0) 17.0% Operating Profit 11.0 12.5 -12.0% Gross Margin % 89.4% 92.2% -2.8% Operating Margin % 43.3% 51.2% -7.9% 32
Slide 33: Leasing – Pendragon Vehicle Management
Leasing – Pendragon Vehicle Management Leasing – Pendragon Vehicle Management (£m) FY 2022 FY 2021 % Change Revenue 83.7 89.9 -6.9% Gross Profit 24.4 22.0 10.9% Operating Costs (4.5) (4.5) 0.0% Operating Profit 19.9 17.5 13.7% Gross Margin % 29.2% 24.5% 4.7% Operating Margin % 23.8% 19.5% 4.3% 33
Slide 34: UK Motor - Aftersales
UK Motor - Aftersales Aftersales Market - UK Car Parc 10.0m 8.9m 8.8m 9.0m 8.5m 8.3m 8.1m 8.0m 7.8m 7.7m 8.0m 7.6m 7.6m 7.5m 7.2m 7.1m 7.1m 7.1m 7.0m 7.2m 7.0m 6.8m 6.9m 7.0m 6.7m 6.6m 6.4m 6.1m 6.0m 5.8m 6.0m 5.3m 5.3m 5.0m 4.7m 4.7m 4.0m 3.0m 2.0m 1.0m - 0-3 years 4-6 years 7-10 years 11-15 years
Slide 35: UK Motor - New: UK New Car Registrations
UK Motor - New UK New Car Registrations Market Average / Natural Level 1.96m Forecast 1.79m Forecast 2.40m 2.04m 2.03m 2.48m 2.34m 2.54m 2.69m 2.63m 2.26m 2.37m 1.63m 1.94m 1.65m 1.99m 2.31m 2.13m 1.61m 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 •
Slide 36: UK New Car Market
UK New Car Market Registrations 3.0m 2.0m Fleet Fleet Fleet Forecast Fleet Fleet Forecast Fleet 1.0m Retail Retail Retail Retail Retail Retail 0 2017 2018 2019 2020 2021 2022 2023 2024 Retail Fleet Forecast 36
Slide 37: Financial Summary – 3 Year View
Financial Summary – 3 Year View Underlying Operating Profit Underlying Profit Before Tax £116.3m £98.5m £83.0m £57.6m £45.9m £8.2m FY20 FY21 FY22 FY20 FY21 FY22 Underlying Earnings Per Share £150.0m Net Debt and Net Debt: Underlying EBITDA Ratio 0.8 £100.0m 0.3 5.0p £50.0m 0.1 3.2p £100.4m 0.6p £49.