Slide 1: H1 2023 Results
@ Inchcape “ing VWitie way 27 July 2023
Slide 2: Duncan Tait, Group CEO
DUNCAN TAIT GROUP CEO
Slide 3: An excellent performance by Inchcape in H1 2023… …further momentum
3 An excellent performance by Inchcape in H1 2023… …further momentum Robust results Continued Derco on track Inchcape remains strategic progress well positioned for growth 45% 11 distribution deals and acquisitions Integration Based on prevailing market conditions, FY 2023 results revenue growth Syn
Slide 4: Macro context: Our resilient business model delivers in a challenging market
4 Macro context Our resilient business model delivers in a challenging market Americas Europe & Africa APAC Global: supply environment improving and demand is mixed China: the global hub for EV production and supply US: supply recovery but constrained consumer demand OUR REGIONS: Americas: normalisi
Slide 5: Agenda
5 Agenda 01 02 03 Results review: Derco update: Strategic progress Adrian Lewis, Romeo Lacerda, & outlook: Group CFO Americas CEO Duncan Tait, Group CEO
Slide 6: Adrian Lewis, Group CFO: Results Review
ADRIAN LEWIS GROUP CFO RESULTS REVIEW
Slide 7: H1 2023: headline financials
7 H1 2023: headline financials Topline Profitability Balance sheet Shareholders Revenue Operating margin Free Cash Flow Basic EPS £5.6bn 5.8% £202m 42.2p +21% from H1 2022 +45% +13% £249m 0.8x 9.6p +28% from H1 2022 Revenue Organic PBT Leverage ratio Dividend per share growth growth (proforma) (prop
Slide 8: H1 2023: robust results
8 H1 2023: robust results 2023 2022 H1 FY H2 H1 Revenue £5.6bn £8.1bn £4.2bn £3.9bn Organic growth (YoY%) +13% +15% +19% +12% Operating margin %1 5.8% 5.1% 4.9% 5.2% PBT1 £249m £373m £189m £184m 1. Before adjusting items, and on the basis of continuing operations
Slide 9: Distribution: double digit organic growth in each region
9 Distribution: double digit organic growth in each region Revenue (£bn) Distribution organic growth: +17% Americas ▪ Growth in 10 of the 12 markets ▪ Derco on track £4.4bn ▪ Chile and Colombia resilient despite macro challenges £3.1bn Europe & Africa £1.9bn +16% £2.7bn ▪ Accelerated supply driving
Slide 10: Distribution: strong operating margin performance
10 Distribution: strong operating margin performance APAC Americas Europe & Africa 70 92 90 143 72 47 Operating 43 profit (£’m) 55 55 1H22 2H22 1H23 1H22 2H22 1H23 1H22 2H22 1H23 Operating Margin 6.7% 7.2% 7.1% 8.4% 6.7% 7.5% 4.7% 4.1% 5.5% H1 2023 Stable margin delivery Strong overall margin Elevat
Slide 11: Retail: strong performance with improved supply
11 Retail: strong performance with improved supply Revenue (£’bn) 1.2 1.1 1.2 Organic Growth % 8% 12% 4% Retail revenue supported by improving vehicle supply Used car performance £30m supported by bravouato Operating £24m profit (£’m) Agency model reducing revenue but additive to £17m margins, as ex
Slide 12: Income statement
12 Income statement H1 Interest £m 2023 2022 (unless otherwise stated) Adjusting items include Revenue 5,628 3,890 acquisition and integration Adjusted Operating Profit 327 204 costs, hyper-inflation in Ethiopia and interest on deferred Adjusted Net Finance Costs (79) (20) dividends Adjusted Profit
Slide 13: Net Finance Costs - a transitional period for Inchcape
13 Net Finance Costs - a transitional period for Inchcape Outlook for H2 2023 £79m 70% fixed GBP 5 year debut bond, Reduction of corporate with 6.5% coupon, acquired Net Interest £36m debt facilities brings stability to local debt interest costs Leases £10m Increasing with growth Further alignment o
Slide 14: Aligning inventory: Derco working capital inflow
14 Derco performance drove working capital inflow of £35m for the Group in H1 2023 Context Key enablers Progress in Inchcape’s H1 2023 opportunity Inchcape distributes Processes and Derco inventory Further optimisation INVENTORY 2.5x vehicle volumes systems in place to unwind already of Derco invent
Slide 15: Strong free cash flow performance in H1 2023
15 Strong free cash flow performance in H1 2023 Net Cash / (Debt) bridge(£m) Leverage of 0.8x: well within 1H23 Free-cash flow = £202m 1.0x headroom £224m in 1H22 £350m debut 5 year bond with 6.5% coupon issued in H1 2023 £490m debt matures from 2027 (USPP & Bond) £250m term loan matures end of 2024
Slide 16: Capital allocation policy: remains unchanged
16 Capital allocation policy: remains unchanged 01 02 03 04 Invest in the Dividends Value accretive Share business M&A buybacks Capex for organic Policy: 40% annual Disciplined Consider growth and payout of basic approach to appropriateness technological EPS (adjusted) valuation of share buybacks in
Slide 17: Romeo Lacerda, CEO Americas: Derco Update
ROMEO LACERDA, CEO AMERICAS DERCO UPDATE
Slide 18: Inchcape Americas - evolution and growth since 2016
18 Inchcape Americas - evolution and growth since 2016 2016 2022 Revenue Revenue £160m £3.7bn* Chile Colombia Argentina Costa Rica Panama Ecuador Peru Uruguay El Salvador Guatemala Barbados+ Bolivia 2 OEM brands 2 markets 12 markets c.40 OEM brands CAGR at constant currency * Includes Derco revenue
Slide 19: Americas market – outlook and our position
19 Americas market – outlook and our position Market outlook Our business is resilient Strong economic growth in Supported by our diversified geographic footprint majority of our markets Breadth of brands ensures the Group has a Offsets to market weakness in compelling offering for a wide range of s
Slide 20: Derco – delivering against our objectives
20 Derco – delivering against our objectives As per acquisition announcement, July 2022 Strong topline Shareholder Margin Distribution growth value upside consolidation prospects creation Progress to date 43% of Distribution Derco margin accretive Inchcape now present On track to deliver revenues no
Slide 21: Excellent progress already made on Derco integration
21 Excellent progress already made on Derco integration Retained Advanced Maintained all key people integration of OEM relationships tools and systems Enabled by an aligned culture, driven by an energised and collaborative management team
Slide 22: Cost synergies: Key focus areas
22 Cost synergies Key focus areas Organisation Efficiencies of combined Elimination of duplicate positions organisation Operations Service contracts Consolidation of infrastructure, rationalisation, e.g. ocean including merging distribution centres freight Technology Harmonise systems, and implement
Slide 23: Revenue synergies: Key focus areas
23 Revenue synergies Key focus areas Enhancing Distribution Excellence VLS opportunity Vehicles in operation1 Network Finance & Digital benefits Insurance Products & data Leverage broader Leverage partnerships Leverage Inchcape’s network (new cities with financiers and digital and data and countries
Slide 24: Derco is already transforming our business
24 Derco is already transforming our business Advances our market leadership positions Derco is an Delivers margin enhancement excellent business with Creates significant strategic benefits exciting growth prospects Drives value for shareholders
Slide 25: Duncan Tait: Strategic Progress & Outlook
DUNCAN TAIT STRATEGIC PROGRESS & OUTLOOK
Slide 26: Inchcape has a robust business model
26 Inchcape has a robust business model The Group’s long-term prospects are supported by …. Market leadership Investments in Aftermarket A resilient in fragmented digital and data and Vehicle business model markets analytics Lifecycle Services Inchcape is a key Opportunity to Driving a great Growth
Slide 27: Global scale and diversification through further distribution deals & acquisitions
27 Global scale and diversification…. …through further distribution deals & acquisitions 2016 2017 2018 2019 2020 2021 2022 2023 Total to date Number of deals 2 2 3 3 5 5 5 112 36 Acquired Distribution c.£400m c.£100m c.£250m c.£150m c.£200m c.£200m c.£2.3bn c.£400m 3 £4.0bn revenue added1 New OEMs
Slide 28: Distribution Excellence – continued momentum
28 Distribution Excellence – continued momentum Driven by contract wins and acquisitions Americas APAC Further market Increased exposure share gains - to substantial market supported by Derco Bolivia Thailand Ecuador Indonesia Guatemala Philippines El Salvador Colombia New Zealand Honduras
Slide 29: Vehicle Lifecycle Services: further progress achieved
29 Vehicle Lifecycle Services: further progress achieved Vehicle Lifecycle Value Continue to build capacity at bravoauto – now live in 12 markets bravoauto continues to be driven by our investment in technology - deploying next generation of analytics in H2 2023, which is globally scalable Digital P
Slide 30: Digital and Data – our key differentiator
30 Digital and Data – our key differentiator Further traction on all fronts during H1 2023 Key focus areas Our digital and data capabilities – help to drive more customers, improved efficiencies Digital eXperience Platform: and higher growth our digital touchpoint Next generation of DXP – with impro
Slide 31: An excellent performance by Inchcape in H1 2023… …further momentum
31 An excellent performance by Inchcape in H1 2023… …further momentum Robust results Continued Derco on track Inchcape remains strategic progress well positioned for growth 45% 11 distribution deals and acquisitions Integration Based on prevailing market conditions, FY 2023 results revenue growth Sy
Slide 32: Inchcape
Inchcape