Inchcape Plc · LSE:INCH
Inchcape — FY2013 Earnings Presentation
39 slides from Inchcape's earnings presentation, Mar 11, 2014
Slide 1: Premium Growth, Premium Returns: 2013 Results
PREMIUM GROWTH PREMIUM GROWTH PREMIUM RETURNS PREMIUM RETURNS 2013 Results 2013 Results 11 th March 2014 11 th March 2014 PREMIUM GROWTH PREMIUM GROWTH PREMIUM RETURNS PREMIUM RETURNS 2013 Results 2013 Results 11 th March 2014 11 th March 2014
Slide 2: Record PBT, EPS growth of 11%
Record PBT, EPS growth of 11% Record PBT, EPS growth of 11% Revenue Operating profit* Operating Margin* Revenue Operating profit* Operating Margin* 7.0 286.9 7.0 286.9 6,525 300.0 4.7 6,525 300.0 4.7 259.8 4.4 259.8 4.4 6.5 244.4 4.5 4.3 6.5 244.4 4.5 4.3 6,085 4.2 6,085 4.2 5,885 5,826 250.0 225.5
Slide 3: Strong in small markets with Distribution, selective in large markets with Retail
Strong in small markets with Distribution… Strong in small markets with Distribution… DISTRIBUTION AND VIR RETAIL ONLY DISTRIBUTION AND VIR RETAIL ONLY TRADING PROFIT TRADING PROFIT TRADING PROFIT TRADING PROFIT 79% 21% 79% 21% APAC AND APAC AND EMERGING Hong Kong (67), Guam (91), Macau (86), Saipan
Slide 4: Positive operating leverage with 10 BPS increase
Positive operating leverage with 10 BPS increase Positive operating leverage with 10 BPS increase Group 2013 Analysis Regional Margin Analysis Group 2013 Analysis Regional Margin Analysis GM 14.2% -20 BPS YoY North Asia 10.5% +30 BPS Record OP GM 14.2% -20 BPS YoY North Asia 10.5% +30 BPS Record OP
Slide 5: Continued cost discipline
Continued cost discipline Continued cost discipline 30 30 78 78 43 43 20 20 (6) (6) £m £m (154) (32) (154) (32) 686 686 640 640 640 640 615 615 2008 Adj* Inflation Non LFL Cost 2013 2012 Inflation Non LFL Property Cost 2013 2008 Adj* Inflation Non LFL Cost 2013 2012 Inflation Non LFL Property Cost 2
Slide 6: Capital discipline remains firmly in place
Capital discipline remains firmly in place Capital discipline remains firmly in place Capital allocation policy 2013 highlights Capital allocation policy 2013 highlights Support growth with WC investment WC increase of £20m Support growth with WC investment WC increase of £20m Capex investment to In
Slide 7: Trivett acquisition on track
Trivett acquisition on track Trivett acquisition on track Australia’s leading premium & luxury 2013 Contribution (10 months) Australia’s leading premium & luxury 2013 Contribution (10 months) automotive group acquired for £76m automotive group acquired for £76m Revenue £299m Revenue £299m Acquisitio
Slide 8: Summary profit & loss account
Summary profit & loss account Summary profit & loss account 2013 2012 Change 2013 2012 Change £m £m % £m £m % Sales 6,524.9 6,085.4 +7.2% Sales 6,524.9 6,085.4 +7.2% Operating profit* 286.9 259.8 +10.4% Operating profit* 286.9 259.8 +10.4% Net financing costs (12.3) (13.0) +5.4% Net financing costs
Slide 9: Regional analysis: trading profit
Regional analysis: trading profit Regional analysis: trading profit 2012 2013 2012 2013 Russia and Russia and Russia and Russia and Emerging Markets Emerging Markets Emerging Markets Emerging Markets 15% Australasia 18% Australasia 15% Australasia 18% Australasia 24% 26% 24% 26% £280.1m £305.8m £280
Slide 10: Group: trading profit
Group: trading profit Group: trading profit 310.0 12.2 310.0 12.2 11.7 11.7 290.0 Property 290.0 Property 6.4 Profit £6.2m 6.4 Profit £6.2m 305.8 305.8 2.7 Trivett £9.9m 2.7 Trivett £9.9m £m £m 270.0 (5.4) (1.9) 270.0 (5.4) (1.9) 280.1 280.1 250.0 250.0 2012 South Asia UK Europe North Asia Australas
Slide 11: Net finance costs
Net finance costs Net finance costs 2013 2012 2013 2012 £m £m £m £m Bank and loan interest 2.0 2.9 Bank and loan interest 2.0 2.9 Stock holding interest (19.9) (18.0) Stock holding interest (19.9) (18.0) Interest on private placement notes (2.8) (4.4) Interest on private placement notes (2.8) (4.4)
Slide 12: Impact of currency on operating profit
Impact of currency on operating profit* Impact of currency on operating profit* 2012 @ actual 2013 @ 2012 2013 @ actual 2012 @ actual 2013 @ 2012 2013 @ actual £m Impact £m Impact exchange rates actual rates exchange rates exchange rates actual rates exchange rates Australasia 67.2 83.9 78.9 (5.0) A
Slide 13: Cash flow
Cash flow Cash flow Operating cash flow 2013 2012 Free cash flow 2013 2012 Net cash 2013 2012 Operating cash flow 2013 2012 Free cash flow 2013 2012 Net cash 2013 2012 £m £m £m £m £m £m £m £m £m £m £m £m Operating profit* 286.9 259.8 Operating cash flow 227.0 249.2 Free cash flow 71.0 93.8 Operating
Slide 14: Guidance – Full Year 2014
Guidance – Full Year 2014 Guidance – Full Year 2014 Tax rate 24% Tax rate 24% Interest cost (excl. mark to market) c £15m Interest cost (excl. mark to market) c £15m Capital expenditure £70m Capital expenditure £70m Net cash c £150m Net cash c £150m 14 14 Guidance – Full Year 2014 Guidance – Full Ye
Slide 15: Business Updates and Outlook
BUSINESS UPDATES BUSINESS UPDATES AND OUTLOOK AND OUTLOOK BUSINESS UPDATES BUSINESS UPDATES AND OUTLOOK AND OUTLOOK
Slide 16: Customer 1st Strategy Differentiation
Customer 1st Strategy Differentiation Customer 1st Strategy Differentiation Continuous NPS improvement Continuous NPS improvement 120 120 115 115 110 110 Creating an Creating an incredible 105 incredible 105 customer customer experience for the 100 experience for the 100 best car brands in best car
Slide 17: Execution of our Top 5 Priorities
Growing Growing Execution of our Top 5 Priorities Execution of our Top 5 Priorities Growing Growing market market aftersales aftersales share share Controlling Selective Controlling Selective Improving Improving working capital working capital margin margin capital expenditure capital expenditure In
Slide 18: 2014 outlook
2014 outlook 2014 outlook • Good visibility on markets and categories following robust 2013 exit • Good visibility on markets and categories following robust 2013 exit trends and January / February 2014 traffic data trends and January / February 2014 traffic data • Favourable trend in the New vehicl
Slide 19: UK and Europe outlook
UK and Europe outlook UK and Europe outlook UK Belgium Greece UK Belgium Greece 2014 TIV est. 2,300k 533k 68k 2014 TIV est. 2,300k 533k 68k YoY Growth +2% Flat +10% YoY Growth +2% Flat +10% Business initiatives Control on cost and cash Leverage demand for Consolidate market leadership Business initi
Slide 20: North Asia and South Asia outlook
North Asia and South Asia outlook North Asia and South Asia outlook Hong Kong Singapore Hong Kong Singapore 2014 TIV est. 50k 39k 2014 TIV est. 50k 39k YoY Growth +4% +15% YoY Growth +4% +15% Business initiatives Leverage model launches from our Toyota, Benefit from new model launches Business initi
Slide 21: Australasia outlook
Australasia outlook Australasia outlook Distribution Retail Distribution Retail 2014 TIV est. 1,160k 2014 TIV est. 1,160k YoY Growth +2% YoY Growth +2% Business initiatives Leverage strong pricing power based on Introduce Inchcape Advantage Business initiatives Leverage strong pricing power based on
Slide 22: Eastern Europe and Russia outlook
Eastern Europe and Russia outlook Eastern Europe and Russia outlook Eastern Europe Russia Eastern Europe Russia 2014 TIV est. 455k 2,700k 2014 TIV est. 455k 2,700k YoY Growth +2% -3% YoY Growth +2% -3% Business initiatives Introduce dedicated F&I retail vehicle Control on cost and cash will remain B
Slide 23: Chile & Peru and Ethiopia outlook
Chile & Peru and Ethiopia outlook Chile & Peru and Ethiopia outlook Chile & Peru Ethiopia Chile & Peru Ethiopia 2014 TIV est. 608k N/A 2014 TIV est. 608k N/A YoY Growth +5% Positive YoY Growth +5% Positive Business initiatives In Chile, build on successful 2013 Leverage favourable economic Business
Slide 24: Looking Ahead
LOOKING AHEAD LOOKING AHEAD LOOKING AHEAD LOOKING AHEAD
Slide 25: Premium growth delivering premium returns
Premium growth delivering premium returns Premium growth delivering premium returns Markets Strategy Markets Strategy Strong Distribution footprint Differentiated customer Strong Distribution footprint Differentiated customer in medium/small automotive service grows market share in medium/small auto
Slide 26: Broad-based growth across markets and categories
Broad-based growth across markets and categories Broad-based growth across markets and categories GDP TIV CarParc GDP TIV CarParc 1-5yrs 1-5yrs 5.4% 5.4% • 21 Markets 4.7% 5.0% • 21 Markets 4.7% 5.0% APAC / • 56% of Revenue APAC / • 56% of Revenue 3.6% 3.6% Emerging 3.3% Emerging 3.3% markets • 73%
Slide 27: The operating leverage opportunity
The operating leverage opportunity The operating leverage opportunity • Structural New vehicle growth in high • Structural New vehicle growth in high margin APAC / EM markets margin APAC / EM markets Group Operating Margin Group Operating Margin • Gradual New vehicle recovery in • Gradual New vehicl
Slide 28: Sustained earnings growth and capital allocation discipline delivering shareholder value
Sustained earnings growth and capital allocation Sustained earnings growth and capital allocation discipline delivering shareholder value discipline delivering shareholder value Strong cash flow: Support growth with WC investment Disciplined capital Strong cash flow: Support growth with WC investmen
Slide 29: Appendix
APPENDIX APPENDIX APPENDIX APPENDIX
Slide 30: Definitions
Definitions Definitions Like-for-like Like-for-like The following are excluded from like-for-like sales: The following are excluded from like-for-like sales: 1. Businesses that are acquired, from the date of acquisition until the 13 th month of 1. Businesses that are acquired, from the date of acqui
Slide 31: Strong 2014 model line-up
Strong 2014 model line-up Strong 2014 model line-up Land Rover / VW / Audi / Land Rover / VW / Audi / BMW / MINI Toyota / Lexus BMW / MINI Toyota / Lexus Jaguar Mercedes Benz Subaru Porsche Jaguar Mercedes Benz Subaru Porsche MINI HB F Type Coupe C Class WRX STi Lexus ES Macan MINI HB F Type Coupe C
Slide 32: Capex investment
Capex investment Capex investment • Capacity expansion • Capacity expansion • Chile • Chile £14m £14m • Russia • Russia • Ethiopia • Ethiopia • Greenfield expansion • Greenfield expansion £6m £6m • Audi Oldham • Audi Oldham • IT upgrades £26m • IT upgrades £26m • Maintenance capex £24m • Maintenance
Slide 33: Segmental performance
Segmental performance Segmental performance 2013 2012 Change 2013 2012 Change £m £m % £m £m % Sales Sales Distribution 2,540.0 2,511.5 1.1 Distribution 2,540.0 2,511.5 1.1 Retail 3,984.9 3,573.9 11.5 Retail 3,984.9 3,573.9 11.5 6,524.9 6,085.4 7.2 6,524.9 6,085.4 7.2 Operating profit* Operating prof
Slide 34: Distribution: trading profit
Distribution: trading profit Distribution: trading profit 2013 trading margins 2013 trading margins 2013 219.4 2013 219.4 Russia & Distribution* 8.4% +70 BPS Russia & Distribution* 8.4% +70 BPS Property Profit 17.1 Property Profit 17.1 Emerging Emerging £6.2m £6.2m Markets Russia and Emerging Market
Slide 35: Retail: trading profit
Retail: trading profit Retail: trading profit 2013 trading margins 2013 trading margins 2013 86.4 2013 86.4 Retail 2.2% -20 BPS Retail 2.2% -20 BPS Australasia 8.0 Europe - +40 BPS Australasia 8.0 Europe - +40 BPS UK 2.5% -30 BPS UK 2.5% -30 BPS Europe 0.5 Europe 0.5 Australasia 3.5% -30 BPS Austral
Slide 36: Exceptional items
Exceptional items Exceptional items £m 2013 2012 £m 2013 2012 Restructuring costs (4.6) (17.3) Restructuring costs (4.6) (17.3) Acquisition of business (3.9) - Acquisition of business (3.9) - Closure of defined benefit pension schemes - 19.2 Closure of defined benefit pension schemes - 19.2 Loss on
Slide 37: Group productivity metrics
Group productivity metrics Group productivity metrics # Sites* Overheads (£m)** # Sites* Overheads (£m)** 300 700 300 700 290 280 655 290 280 655 612 640 612 640 650 615 650 615 280 269 280 269 270 259 260 600 270 259 260 600 260 260 550 550 250 250 240 500 240 500 2010 2011 2012 2013 2010 2011 2012
Slide 38: Broad geographic spread - truly international
Broad geographic spread - truly international Broad geographic spread - truly international United Kingdom R Australasia South Asia North Asia Europe United Kingdom R Australasia South Asia North Asia Europe 34.1% of '13 Group Revenue 20.9% of '13 Group Revenue 5.7% of '13 Group Revenue 8.7% of '13
Slide 39: Disclaimer
Disclaimer Disclaimer The information and opinions contained in this presentation are provided as at the date of the document. The information and opinions contained in this presentation are provided as at the date of the document. Certain statements in this presentation, particularly those regardin