Aston Martin Lagonda Global Holdings (LSE:AML) Q2 2026 Earnings Call

0:00 I noticed that it seems to be more H2 weighted this year versus at least 2024 and 2025 when it's more balanced. I'm wondering why is that? And then I've got two more or three more questions, but should I ask them one at a time? No. Why don't you ask And the other issue a little then the other one was just on the age stock realignment and dealer support. It seems it was supposed to be completed in Q2, but now it seems to continue into H2. Can you clarify please how much remains to be done? And once it's complete, let's think in 2027, where should average selling prices for core settle, do you believe?

0:55 That's the second question. And then the third one would be just on the new financing facility. So that's great news. And you mentioned the 100,000,000 drawdown term loan and I think there's an additional $100,000,000 on top of that. I just wanted to make sure that they're currently available and if not what's required to unlock them? Thank you. Thanks, Kristian. If I can start, I'll do the easier one first if I may, the aged stock question. You're absolutely right that the rundown of that stock was slower than we thought. And as I mentioned, I think globally, it's probably at the half year 70 to 80 cars worse than we'd anticipated, but it's hundreds of cars better than it was at the beginning of the year. And you can do the calculation.

1:55 With 30% more retail than wholesales, that is a huge shift in the total number. So we missed by, let's say, 10% of what we plan to achieve. As we move forward, as we get the stock in balance and as the retails and the wholesales come into balance in the second half of the year and through 2027, I can't give you an absolute prediction on what that will do to the ASP, but you can see what the VM is. You can see what normal VM or variable marketing looks like, and that peak will come down, and that will all go straight onto the gross margin of the future vehicles. So from that point of view, we are a bit behind pace. Of course, we have been dynamic with this as well.

2:42 The Middle East situation, not using that as an excuse for the seventy, eighty cars, but that gave us, obviously, another challenge throughout the year as did the price increase effect from U. S. Tariffs. But we've managed to balance stocks around the world so that we pretty much even across models and across the world. It's just a quantum of DBX in The U. S. That is the residual issue that we're working with dealers to get through. I'll let Doug talk in more detail about CapEx, but I will just make one comment. As we look at the year 2026, we are now accelerating our plans for the regeneration of our core product lines that starts in the next three, four years.

3:32 New technologies, revised body platform, new powertrains, electronic architectures, modules, systems, etcetera.

3:42 We're now contracting for those major systems, and that really ramps up in the second half of this year and into 2027. So we still anticipate to be in line with our previous forecast of CapEx. That's all included in the midterm plan that we've given that we've shown before. But it's a natural effect of contracting in order to be able to deliver cars in three, four years' time. Up to Doug? Yes. The only thing I'd add to that on CapEx was in the second half of the year, we'll make some one off technology access fee payments that weren't in the first half. So that in coupled with Adrian's comments is the reason why the CapEx is heavier in the second half of the year this year. I think I'll just go back to the working capital point. So it was about £20,000,000 reversal of the Q1 outflow in the second quarter.

4:34 So overall, first half was around £45,000,000 outflow. I think the remainder of the year, we'll expect to be broadly flat, maybe a small outflow in Q3 as inventory builds ahead of Q4, but broadly in line with I think where we are at the half year. And then on the final question, as I said, there's not much really much more to say on the financing, but the late draw term loan, the 100,000,000 is committed subject to certain conditions, but we won't disclose what those conditions are. And then the junior 100,000,000 facility is effectively an available basket to us should we wish to be utilized in the future. Great. Thank you very much. The next question comes from Harry Martin at Bernstein. Harry, please go ahead. Your line is open.

5:22 Good morning, everyone. Thanks for taking my questions. The first one I have is on the underlying core demand. You've given the numbers that allow us to see that retail sales in Q1 and Q2 were around 1,200 units. Is that a run rate you're happy with for Aston Martin in the midterm? Or maybe you could reflect on if this is a floor which with more variants, China coming back, a better luxury consumer, Aston Martin in the midterm can grow from? And then I guess in the second half of the year, the retail sales grow year over year or are they fairly flat? The second question on the Valhalla, it looks like special ASP stepped back in Q2 versus Q1. Is that just FX or lower option spec or something else? You mentioned good option uptake on the recent orders. So could you reflect on if there's anything in the mix of the order book from H2 that is different to the vehicles delivered so far?

6:29 And then a final question, just a follow-up on core AST. Maybe it's my turn to be the bad cop among the analyst group and ask the question a bit more directly. What was core ASP in the second quarter excluding dealer support? Thank you. Well, I'll answer that one first Harry. So I'd say ASP in Q2 or H1 was broadly in line with last year if you exclude variable marketing

6:59 and maybe a little bit of impact from FX, but otherwise broadly in line. Thanks. Good morning, Harry. First of all, on core demand, just checking the figures on the wholesale, it was around 1,400 in total in quarter two, less Valhalla. Clearly, quarter two is not the biggest quarter in the year. If So you look at the normal calendarization from a retail point of view, that means that we're still in line for our full year forecast, bearing in mind that Q4 will always be the biggest quarter. Sorry about that.

7:51 False alarm hopefully. So quarter four will naturally be the biggest quarter driven largely by The U. S, which is the big quarter of the year. So we're still on track for the total year number. And as we've mentioned, the balance between wholesales and retail should occur in quarter three and quarter four, and we intend to maintain that going forward. Core demand is still as we expect. The average selling price of Valhalla in quarter two, not exactly sure because we've not seen overall a drop in the average selling price. It's more likely to be regional mix than anything else. I can absolutely confirm that the average selling price of Valhalla is over $1,100,000 about 1,150,000 That's consistent all the way through the system.

8:45 There could be some exchange rate or mix

8:47 effects. There were a lot of cars went to The States in quarter one last year. But we see no downward trend. In fact, if I look at the cars that are going through the system now, we have some of the longest lead and highest priced cars that we've seen since the beginning. It's actually richening as we get through the period. So nothing of concern to us there from our point of view. Okay, great. So we can maybe expect that special ASP to trend up over the next few quarters as well. Absolutely. Thank you very much. Thanks Harry. The next question comes from Horst Schneider from Bank of America. Horst, your line is open. Please go ahead. Thank you so much and good morning.

9:33 I have got two questions left. The first one relates again to this new financing structure and to the new term loan. You have established these two subsidiaries now, the asset holding subsidiary and the unrestricted subsidiary. I think the key question is what assets have been transferred to each of the subsidiary. So what is now the collateral also for the new loan? That's question number one. Question number two more a forecasting question. Could you provide any indication on split when I look at this GT and sports cars? What is Vantage, DB12 and Venkish?

10:21 And how is this split developing basically in terms of demand? Thank you. So I'll start with the sales split. Sure. So I think first of all on the sales split of the GTs and sports cars, again, it's pretty much as per our expectation. DB12 is the highest volume car by a small margin, Vantage second, and Vanquish being the highest priced derivative that we have is clearly the lower volume of the three cars. It's about I haven't actually done the percentage calculation in my head, but the mix is as we expect. DB12 is particularly strong.

11:07 Advantage in The U. S. Has really picked up traction too. And it's thanks to a lot of work that's been done on residual values around the S derivatives that's bringing the affordability and lease payments of those cars absolutely in line with competition and very competitive without the need for excessive VM. So I mean, all the figures are in the pack, but there's no big swing in the mix on the sports cars and GTs. And Horst, on your first question, I don't think the answer is going to surprise you. But what I'll say is, as I said earlier, all the information relating to the transaction we've set out in our prior announcement, so nothing further to disclose today.

11:55 Can you maybe talk about the fees associated to the transaction? I'm not sure if you showed that in your report. No. And as I said, the pro form a liquidity takes into account the repayment of facilities and transaction costs and the rest is for the company corporate purposes. Okay. All right. Thank you. Great. This concludes today's Q and A session. So I hand the call back to the management team for any closing comments. So first of all, thanks everybody for joining. It's been an important quarter for us, and there's some definite progress that's being made. We're looking forward to the second half of the year and continuing to deliver on those systematic improvements that we're building into the business model. Thanks for your time again. Thanks, Doug and the team, for all the preparation.

12:48 Looking forward to catching you in quarter three. Thanks, everyone. This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.