Slide 1: 2009 Annual Results
2009 Annual Results 10 March 2010
Slide 2: André Lacroix, Group Chief Executive
André Lacroix Group Chief Executive 2
Slide 3: Strengthened industry leading position during the downturn
Strengthened industry leading position during the downturn • Swift and responsive management of unprecedented downturn • Improved competitive position with focus on: • Cost / cash initiatives • Customer service / market share performance • Resilient financial performance: • Record operating cash flo
Slide 4: Swift response to manage an unprecedented global downturn
Swift response to manage an unprecedented global downturn Oct 2008 Nov 2008 Apr 2009 • Group-wide • Changed • Successful Rights streamlining of management Issue to re-establish management focus bonus metrics from balance sheet on Top 5 Priorities economic profit to strength with operating cash flow
Slide 5: 2009 like for like operating expense reduction of c.£70m
2009 like for like operating expense reduction of c.£70m 9.5% 2009 like for like cost reduction c.£70m 740 20 73 0 720 710 700 28 680 23 660 660 11 9 640 620 600 2008 M usa & Others Adj 2008 Employee costs A&P Occupancy costs Other 2009 Bridge calculated in constant currency 5
Slide 6: Working capital reduction of £176m
Working capital reduction of £176m Inventory Working capital 1,200 1,084 300 253 1,000 250 800 773 200 660 £m £m 600 150 400 100 77 57 200 50 0 0 Q4 08 Q2 09 Q4 09 Q4 08 Q2 09 Q4 09 Stock cover target of 1.5 months achieved 7 months ahead of plan * Management definition of Working Capital: inventory
Slide 7: Balanced focus on cost / cash flow and customer service / market share
Balanced focus on cost / cash flow and customer service / market share Improved customer service across the Group Growing market Growing share aftersales New vehicle demand Resilient aftersales weak but share growth now c.50% of gross in most markets profit Controlling Selective capital Improving ma
Slide 8: Record operating cash flow generation
Record operating cash flow generation Sales Operating profit* Cash flow from operations 7,000 400 400 6,057 6,260 337 5,584 £m at actual rates 6,000 350 350 293 4,842 300 265 300 5,000 4,120 4,488 241 237 3,793 250 214 250 4,000 189 175 187 195 184 3,414 172 189 3,113 200 200 164 151 3,000 124 150 1
Slide 9: Financial Results
Financial Results John McConnell Group Finance Director 9
Slide 10: Summary P&L
Summary P&L 2009 2008 Change £m £m % Sales 5,583.7 6,259.8 (10.8) Operating profit * 175.2 240.5 (27.2) Net financing costs 20.8 52.0 (60.0) Profit before tax* 155.1 190.7 (18.7) Tax rate (%) 28.0 25.9 2.1ppt Basic adjusted EPS (p)** 2.7 5.0 (2.3)p * Before exceptional items ** Adjusted to reflect t
Slide 11: Segmental performance
Segmental performance 2009 2008 Change % £m £m Sales Distribution 2,427.0 2,654.7 (8.6) Retail 3,156.7 3,605.1 (12.4) 5,583.7 6,259.8 (10.8) Operating profit* Distribution 137.6 192.9 (28.7) Retail 56.4 57.2 (1.4) Central costs (18.8) (9.6) 95.8 175.2 240.5 (27.2) Operating margin* Distribution 5.7%
Slide 12: Distribution: trading profit and margin
Distribution: trading profit and margin Trading profit* Trading margin* 2009 2008 2009 2008 £m £m % % Australasia 26.7 33.3 5.6 7.3 Europe 30.2 39.9 3.8 4.8 North Asia 19.9 38.7 6.4 10.2 South Asia 55.9 63.0 10.2 11.8 UK 3.9 (5.7) 13.0 (27.5) Russia and Emerging Markets 1.0 23.7 0.4 5.6 137.6 192.9
Slide 13: Retail: trading profit and trading margin
Retail: trading profit and trading margin Trading profit* Trading margin* 2009 2008 2009 2008 £m £m % % Australasia 11.2 8.9 3.9 3.4 Europe (1.6) 0.7 (0.8) 0.2 UK 42.8 28.8 2.1 1.2 Russia and Emerging Markets 4.0 18.8 0.7 3.0 56.4 57.2 1.8 1.6 * Before exceptional items All numbers at actual exchang
Slide 14: Regional analysis: sales and trading profit
Regional analysis: sales and trading profit* Russia and Emerging Australasia Sales Russia and Emerging Markets Trading Profit* Markets 3% 14% Australasia 16% 20% UK 24% Europe 18% 2009 Europe 15% UK North Asia 36% 6% North Asia South Asia South Asia 10% 10% 28% Russia and Emerging Australasia Russia
Slide 15: Cash flow
Cash flow Operating cash flow 2009 2008 Free cash flow 2009 2008 Net cash 2009 2008 £m £m £m £m £m £m Operating profit** 175.2 240.5 Operating cash flow 368.6 199.8 Free cash flow 224.6 (16.2) Depreciation / amortisation 35.6 31.2 Net interest (32.9) (54.0) Share issue 234.3 3.0 Working capital 178.
Slide 16: Net financing costs
Net financing costs 2009 2008 £m £m Bank and loan interest (4.2) (9.3) Stock holding interest (9.2) (21.5) Interest on private placement notes (7.8) (18.2) Pension interest net 5.6 6.3 Other including capitalised interest adj. (6.1) (12.1) Interest excluding mark to market (21.7) (54.8) FV on privat
Slide 17: Exceptional items
Exceptional items Q2 2009 £m Vacant property (3.0) Other asset impairment (10.3) Restructuring costs (5.1) TOTAL (18.4) All numbers at actual exchange rates 17
Slide 18: Impact of currency on operating profit
Impact of currency on operating profit* Full Year 2008 @ actual 2009 @ 2008 2009 @ actual Impact exchange rates actual rates exchange rates Australasia 42.2 34.5 37.9 3.4 Europe 40.6 25.2 28.6 3.4 North Asia 38.7 16.6 19.9 3.3 South Asia 63.0 48.2 55.9 7.7 Russia and EM 42.5 7.7 5.0 (2.7) Total over
Slide 19: Strategic update and outlook
Strategic update and outlook André Lacroix Group Chief Executive 19
Slide 20: 2010 Outlook
2010 Outlook • We remain cautious for 2010, continue to not expect start of a global industry recovery until well into H2 2010: • Consumer confidence is still weak in most countries • Unemployment to continue to rise in many key markets • From a geographic portfolio perspective, we expect: • Stronge
Slide 21: Focus on our Top 5 Priorities in 2010
Focus on our Top 5 Priorities in 2010 will be key to taking advantage of the global recovery Growing Growing market share aftersales Improving Controlling Selective capital margin working capital expenditure Disciplined performance management and consistent operational focus on our Top 5 will contin
Slide 22: Distribution and Retail: driving market share and aftersales
Strong Inchcape Advantage processes in place to drive market share and aftersales Growing market share Growing aftersales Distribution • Marketing calendar focused on driving traffic • Targeted direct marketing to improve retention • Targeted planning with lower advertising costs • Parts & Accessori
Slide 23: Toyota product recall update at 10th March
Toyota product recall update at 10th March Key Facts Key Facts KeyInitiatives Key Initiatives • Inchcape Toyota car parc 1.2m • Proactive communication with Toyota customers • Customer enquiries 32k, 3% of car • Recall operation presents several parc opportunities: • Vehicles recalled for accelerato
Slide 24: UK: Outperforming the industry
UK Outperforming the industry 2009 TIV 2m, -6.4% vs. 2008 2009 • Retail market up 14% ; Fleet / Business market down 21% • Positive impact of scrappage scheme • Inchcape outperformed market, gaining share of Premium segment and Total market • Benefited from Used car demand and margin improvement • A
Slide 25: Europe
Europe Focused on market share growth Belgium Greece 2009 TIV 531k, -14% vs. 2008 236k, -19% vs. 2008 2009 • Margin pressure due to aggressive competitor pricing • Severe economic conditions, despite actions taken by government • Stronger H2 market share through extensive new model to support sector
Slide 26: South Asia
South Asia Strong leadership in a constrained market Singapore 2009 TIV 80k, -28% vs. 2008 2009 • Market decline accelerated by a slowing of deregistrations and high COE prices • Gained 3.7 ppt market share to 21.4% due to strong marketing campaigns, weakening parallel importers and successful lever
Slide 27: North Asia
North Asia Taking advantage of a strong market recovery Hong Kong 2009 TIV 27k, -28% vs. 2008 2009 • Maintained market leadership position despite aggressive pricing from European competitors as they sought to clear stock, a weak commercial vehicle segment and issues of weak supply in H2 • Successfu
Slide 28: Australasia
Australasia Growing share in a strong market Australia Distribution Australia Retail 2009 TIV 937k -7% 2009 • Record Subaru market share of 3.9% • Record Operating Profit. RoS 3.9% • Successful launch of new Liberty/Outback and • Strong aftersales growth driven by express service Exiga initiative •
Slide 29: Russia
Russia Outperforming the competition 2009 TIV 1.42m, -52% vs. 2008 2009 • Market fully impacted by the downturn but our large scale facilities delivered solid profitability • Market share improvement in St Petersburg and Moscow supported by new model launches from BMW (X1, 5GT), Audi (R8, Q7, A5 spo
Slide 30: Emerging Markets
Emerging Markets Strengthening our position The Baltics The Balkans Poland China 2009 TIV 23k, -66% vs. 2008 167k, -54% vs. 2008 320k, +0% vs. 2008 8.4m, +48% vs. 2008 2009 • Markets extremely • Markets extremely • 1% GDP growth • Government stimulus challenging, reflecting credit challenging, refle
Slide 31: Uniquely positioned worldwide
Uniquely positioned worldwide • Global industry leader… • …strong EBIT and cash • Biggest and strongest independent Distributor and Retailer in global car performance in the downturn… industry • Market share gains • Broad geographic spread, one of the • Quality of business model/scale UK’s most inte
Slide 32: Inchcape: Uniquely positioned
® Inchcape Uniquely positioned
Slide 33: Appendices
® Inchcape Appendices Uniquely positioned
Slide 34: Definitions
Appendix V – 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
Slide 35: Broad geographic spread – truly international
Broad geographic spread – truly international United Kingdom (MLP) R Australasia South Asia North Asia Europe 37% of ’09 Group Revenue 14% of ’09 Group Revenue 10% of ’09 Group Revenue 6% of ’09 Group Revenue 18% of ’09 Group Revenue 24% of ’09 Group Trading profit 19% of ’09 Group Trading profit 29
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
Slide 37: Inchcape: Uniquely positioned
® Inchcape Uniquely positioned