Aston Martin Lagonda Global : H1 2020 Results - Presentation

H1 2020 RESULTS

S I X M O N T H S E N D E D 3 0 J U N E 2 0 2 0

A G E N D A

1. H1 2020 HIGHLIGHTS
2. FINANCIAL REVIEW
3. STRATEGIC PLAN
4. Q&A

APPENDIX

2

E X E C U T I V E C H A I R M A N

LAWRENCE STROLL

H1 2020: STRONG INITIAL PROGRESS ON STRATEGIC PLAN

Rebalancing sports car exclusivity with 869 units destocked across the dealer network

Appointment of new Executive leadership team

Decisive action taken on costs to align organisation to lower wholesales

DBX deliveries started in July and media launch underway

Secured additional liquidity successfully raising £688m of new equity

4

C H I E F F I N A N C I A L O F F I C E R

KENNETH GREGOR

STRATEGIC RESET WHILST NAVIGATING COVID-19

Strategic reset impacting financial results

• Lower wholesales as reduce dealer stock
• High retail and customer financing support

Covid-19 impacts

• Customer (retail) & dealer (wholesale) demand reduced
• Manufacturing operations temporarily suspended

Continued capital investment to support new models

• Particularly DBX in H1; Capex £162m

Working capital outflow

• Payables £110m and inventory £30m

Non- cash accounting adjustment relating to the timing of variable marketing expense accruals for the US region

• Restated 2019 balance sheet and income statement
• Impact is a reduction to EBIT of £15.3m in 2019

6

H1 2020 FINANCIAL RESULTS

Total Retails 1

(Units)
1,770
H1 2020
H1 2019	2,996

Total Wholesales2

(Units)

H1 2020	895
H1 2019	2,442

Revenues 3

(£m)
H1 2020	146
H1 2019	406

3
Adjusted EBITDA
(£m)
H1 2020	(89)
H1 2019	21

Capital Expenditure

(£m)

H1 2020			162
H1 2019			162
Free Cash Flow	4
(£m)
H1 2020		(371)
H1 2019		(161)

Note: Certain financial data within this presentation has been rounded; See Appendix for more detail on APMs; (1) Total retails are

7 dealer sales to customers (some specials are direct to customer); (2) Total wholesales are company sales to dealers (some specials are direct to customers); (3) 2019 has been restated; (4) Operating cash flows less cash interest and capex

TOTAL WHOLESALES 895 (63%); TOTAL RETAILS 1,770 (41%)

Total wholesales by model

(Units)

1

Other: 15

(82%)

GT: 596

(59%)

Total wholesales by geography

Specials: 1				(78%)
(97%)	(60%)	(51%)	(61%)
				China (74%)

Sport: 283

(67%)

700	565		490	687
280	275
	191	149

Americas	UK	EMEA ex.UK	APAC
		H1 2019			H1 2020		Wholesale change by region

Wholesale ASP (£k)				Retails
						2,996
145			124
						1,770
						2,907
139			121				1,763
2
H1 2019			H1 2020	H1 2019		H1 2020
		Core			Total			Core		Total

8	Note: Certain financial data within this presentation has been rounded; See Appendix for more detail on APMs; wholesales are company
sales to dealers (1) Other consists of prior generation models including 10 Rapide AMRs; GT is DB11 + DBS Superleggera; Sport is Vantage;
	(2) 2019 has been restated

Total retails: (41%)

Dealer Inventory: 869-unit reduction

REVENUE DECLINE REFLECTS STRATEGIC ACTIONS AND COVID-19 DISRUPTIONS

(£m)
					1
406
					2
					3
	(242)	(9)	(2)	(7)
		146
					4
H1 20191	Sale of vehicles	Sale of parts	Servicing of	Brand and motorsport	H1 2020
			vehicles

Sale of vehicles

Lower wholesales primarily due to strategic destock and Covid-19 impact, fewer Specials and decreased ASP

Sale of parts

Decreased due to Covid-19 restricting dealer operations

Servicing of vehicles

Limited capacity for restorations, while team focused on production of the DB5 Goldfinger Continuation specials

Brand and motorsport

Reduced race car sales year-on-year due to deferral of races

9	Note: Certain financial data within this presentation has been rounded; See Appendix for more detail on APMs; (1) 2019 has been
	restated

STRATEGIC REPOSITIONING REDUCES PROFITS DESPITE TIGHT OPERATIONAL COST CONTROL

	(£m)																							PBT Analysis
5.4%																					n.m.	£m	H1 2020	H1 2019
				19																						Restated
					41
21																						Adjusted EBITDA	(89)	21
																	25									D&A	(57)	(57)
																						(89)				Adjusted EBIT	(146)	(36)
														(17)
				(147)	11	(2)
											1
																										Net financing expense	(68)	(35)

3	Other expense2	3	Wholesales	Mix & Price	Other gross	Net operating	FX	H1 2020 adj
H1 2019 adj	H1 2019 adj
EBITDA		EBITDA (pre			margin	expenses		EBITDA
		other income)

Margin

Adjusted PBT	(214)	(71)

EBITDA decline driven by strategic plan to lower wholesales to

1 reset to luxury positioning, exacerbated by Covid-19

Continued retail and customer financing support to drive retails, relative proportion of retails to wholesales (c.2x) and lower Specials weighed on ASP

Net operating expenses

3

D&A broadly unchanged year on year

Same core models as prior year and only one Special

Net financing expense of £68m

2 Re-phased marketing spend and c. £10m of furlough credits more than offset incremental St Athan costs (c. £3m)

4 Increased interest payments given full six months of $190m notes and $150m of notes issued in H2 2019 (£44m) and £20m adverse FX

10 Note: Certain financial data within this presentation has been rounded; See Appendix for more detail on APMs; (1) excluded adjusting item of £7m; (2) Intellectual Property provision realised in H1 2019; (3) 2019 is restated

H1 WEIGHTING OF INVESTMENT PRIOR TO DBX DELIVERIES FROM JULY; FREE CASH OUTFLOW OF £371m1

(£m)

142	(93)
	(7)

(228)

PBT 1	Add back D&A/other non-	Tax Paid	Cash loss after tax
	cash

1 PBT	2 Add backs
Loss primarily due to	Key items include:
decline in revenue	- D&A £57m
- £(260)m	- Net financing expense £68m

(30)

(162)

Net Interest

CAPEX

3 Net Interest

Cash interest items:

• £2m of interest received
• £(31)m of interest paid

(371)

(86)

Working Capital

Free Cash Flow2

4 Working Capital

Payables £(110)m

Inventory £(30)m

Receivables £51m

Deposits £3m

11	Note: Certain financial data within this presentation has been rounded; See Appendix for more detail on APMs; (1) PBT after
	adjusting items (£14m) (2) Operating cash flows less cash interest and capex

SECURED ADDITIONAL LIQUIDITY, SUCCESSFULLY RAISED GROSS PROCEEDS OF C. £688m1

(£m)

628

47

(6)

359

(9)

(20)

(2)

108

988

(252)

(371)

751

2

Net debt 3

Cash balance

Free Cash Flow

Cash inflow from

Effect of ex. rates on

Cash balance

SSN FV

Banks Loans &

Inventory

Lease Liabilities Net Change in

Net debt

31-Dec-19

financing activities

cash and cash

30-Jun-20

31-Dec-19

movement

Overdrafts

Financing

Cash

30-Jun-20

equivalents

Financing

Net Debt / Cash

1

Placing and equity raise

£171m placing in March and £365m equity raise in April

£536m

5 £688m1 gross raise contributed to total £252m cash inflow

Cash inflow from financing £628m includes £20m outflow from reduced inventory financing

2	Non-pre-emptive equity raise
26 June - equity raise
3	Delayed draw notes
DDN senior secured notes due 2022 at 12% coupon in July (Q3)

Coronavirus Large Business Interruption Loan

4 Scheme

Received approval for a CLBILS loan completed 23 July 2020

£152m

4

$68m

£20m

6 Cash at 30 June £359m up from £108m at December 2019

Proforma net cash of £430m5including DDNs ($68m), CLBILS (£20m) and £5m retail element of June equity raise

7 Net debt reduced to £751m at 30 June

Gross debt at 30 June £1,121m; Proforma gross debt of £1,196m

Note: Certain financial data within this presentation has been rounded; see Appendix for more detail on APMs; (1) £147m of 26 June Placing

12 received in H1, remaining £5m in H2; (2) excludes finance interest; (3) Includes lease liabilities; (4) Post H1 raised; (5) Net of c. £10m remaining in fees

2020 RESET TO BUILD SUSTAINABLE BUSINESS

Pace of emergence from Covid-19 and consumer recovery varies by geography

• Destock of global dealer network likely to extend well into 2021
• >90% of the global dealer network now open
• Early signs from China positive

2020 wholesales currently expected to be broadly balanced between sports cars and DBX

• Specials in H2 (DB5 Goldfinger Continuations and DBS GT Zagatos)
• Aston Martin Valkyrie deliveries start 2021

DBX deliveries commenced St Athan ramping build rate

- Positive contribution to H2

Gaydon to resume manufacturing at end of August

- Later than originally planned as balance supply to demand

Rigorous cost control and investment discipline

• C. £28m annualised savings in 2021; low single digit £m in H2 2020
• FY 2020 capex of c. £260m to deliver new products

13 Note: Certain financial data within this presentation has been rounded; see Appendix for more detail on APMs

E X E C U T I V E C H A I R M A N

LAWRENCE STROLL

STRONG BRAND HERITAGE

<100,000

CARS BUILT IN

OUR HISTORY

107

YEARS OLD (EST. 1913)

$22.5m

1956 ASTON MARTIN DBR1

15

REALISING THE OPPORTUNUTY FOR ASTON MARTIN LAGONDA

Unique luxury brand defined by unparalleled design and beauty

Focus on desirability and scarcity value to build orderbook

• Sport/GT (Vantage, DB11 & DBS Superleggera)
• SUV (DBX)
• Mid-engine(Valhalla & Vanquish)

F1TM team further strengthening brand equity

Operational efficiencies and cost control amplifying financial impact of strategy

World class leadership combining the best of automotive and luxury industries

16

SPORTS/GT CARS

SPORT

GT

SUPER GT

VANTAGE ROADSTER

DB11 VOLANTE

DBS SUPERLEGGERA VOLANTE

17

SUV - DBX

18

MID ENGINE - ASTON MARTIN VALKYRIE

19

MID ENGINE - VALHALLA

20

MID ENGINE - VANQUISH

21

2021 FORMULA ONETM TEAM

SIGNIFICANT MARKETING OPPORTUNITY

22 RACES

OPPORTUNITY TO ENGAGE

CUSTOMER BASE

20 DEALERS

IN RACE MARKETS

GLOBAL MARKETING

PLATFORM TO LAUNCH

MID-ENGINE CARS

STRENGTHEN BRAND

>80% OF LUXURY/PREMIUM CAR BUYERS ARE INTERESTED IN F1TM

22

SIGNIFICANT OPPORTUNITY AHEAD

STRONG PROGRESS EXECUTING PLAN

ALIGNING COSTS TO DRIVE PROFITABILITY

EXPANDING PRODUCT PORTFOLIO

Rebalancing sports cars; destocking 869-units

New Executive leadership team; combining luxury and automotive

Headcount reduction aligned to lower sports car volumes

Focus on appropriate capital investment

DBX has started deliveries

Mid-engine development started

23

Q & A

Income Statement, Cash Flow and Net Debt

£m	H1 2020	H1 2019(1)
Revenue	146.0	406.0
Cost of sales	(148.8)	(259.2)
Gross profit(2)	(2.8)	146.8
Gross margin	n.m.	36.2%
Operating expenses(2)	(142.7)	(164.2)
of which depreciation & amortisation	56.5	57.2
Other Expense	-	(19.0)
Adj. operating loss	(145.5)	(36.4)
Adj. operating loss margin	n.m.	n.m.
Adjusting operating items	(13.8)	(2.5)
Operating loss	(159.3)	(38.9)
Net financing expense	(68.1)	(41.1)
of which adjusting financing items	-	(6.6)
Loss before tax	(227.4)	(80.0)
Taxation	27.6	17.2
Reported net income	(199.8)	(62.8)
Adj. EBITDA	(89.0)	20.8
Adj. EBITDA margin	n.m.	5.1%
Adj. loss before tax	(213.6)	(70.9)
Diluted EPS (pence)	(16.7)	(7.3)
Adjusted diluted EPS (pence)	(15.8)	(6.4)

£m	H1 2020	H1 2019(1)
Net cash generated from operating activities	(179.4)	20.8
Net cash used in investing activities	(159.9)	(159.0)
Net cash inflow from financing activities	597.3	121.0
Effect of exchange rates on cash and cash equivalents	(6.5)	(0.5)
Cash not available for short-term use(3)	10.7	-
Net cash outflow	251.5	(17.7)
Cash balance	359.4	126.9
Borrowings	877.0	734.9
Unsecured Loans	-	0.9
Inventory repurchase arrangement	19.5	-
IFRS 16 Lease Liabilities	110.0	111.6
Bank Loans and Overdrafts	114.6	123.1
Net debt	751.0	843.6

Adj. Leverage(4)

n.m.

5.3x

25	Note: See Appendix for more detail on APMs; (1) 2019 was restated; (2) Excludes adjusting items; (3) Cash not available for use, but included in leverage calculation

APM reconciliation and Adjusting items

Income Statement reconciliation

£m	H1 2020	H1 2019(1)
(Loss) for the year before tax	(227.4)	(80.0)
Adjusting operating expenses	13.8	2.5
Adjusting finance expenses	-	6.6
Adjusted EBT	(213.6)	(70.9)
Adjusted finance (income)	(1.6)	(3.2)
Adjusted finance expense	69.7	37.7
Adjusted EBIT	(145.5)	(36.4)
Reported depreciation	22.7	24.7
Reported amortisation	33.8	32.5
Adjusted EBITDA	(89.0)	20.8

H1 2020 Adjusting items

£m	Income Statement
Staff incentives	3.3
Settlement arrangements & Incentive Payments	(2.7)
Impairment	(2.0)
Restructuring Costs	(12.4)
Adjusting operating items	(13.8)
Tax on adjusting items	3.6
Total adjusting items	(10.2)

26	Note: See Appendix for more detail on APMs; (1) 2019 has been restated

EPS reconciliation

		H1 2020	H1 2019(3)
Adjusted Earnings Per Ordinary Share
(200.3)	(63.8)
	(Loss) available for equity holders (£m)
	Adjusting Items
13.8	9.1
	Adjusting items before tax (£m)
(3.6)	(1.4)
	Tax on adjusting items (£m)
(190.1)	(56.1)
	Adjusted Earnings (£m)
1,203.0	870.4
	Basic weighted average number of ordinary share (millions)
		(15.8p)	(6.4p)
	Adjusted earning per ordinary shares (pence)
Adjusted Diluted Earnings Per Ordinary Share
(190.1)	(86.5)
	Adjusted Earnings (£m)
1,203.0	870.4
	Diluted weighted average number of ordinary shares (million)
		(15.8p)	(6.4p)
	Adjusted diluted earnings per ordinary share (pence)

27	Note: See Appendix for more detail on APMs; (1) Excludes adjusting items; (2) Cash not available for use, but included in leverage calculation; (3) 2019 has been restated

H1 Results

£m	Q1-20	Q1-19	Q2-20	Q2-19	H1-20	H1-19
Total wholesale volumes (#)(1)	578	1,057	317	1,385	895	2,442
Revenue	88.8	201.5	57.2	204.5	146.0	406.0
Adj. EBITDA	(38.1)	34.0	(50.9)	(13.2)	(89.0)	20.8
Adj. operating loss	(67.0)	3.5	(78.5)	(39.9)	(145.5)	(36.4)
Operating loss	(67.9)	2.5	(91.4)	(41.4)	(159.3)	(38.9)
Loss before tax	(110.1)	(11.6)	(117.3)	(68.4)	(227.4)	(80.0)

28

Note: See Appendix for more detail on APMs; (1) Includes Specials (2) 2019 has been restated

Restatement Summary

£m	Q1-19	Q2-19	Q3-19	Q4-19	Q1-20

Additional accrual (£m)

8.1

15.0

21.8

29.1

20.3

Impact on EBIT (£m)

5.7

(7.0)

(6.8)

(7.2)

8.8

ASP Total/core (£k)

165/154

129/128

147/126

158/127

113/113

As previously reported ASP total/core (£k)	160/149	134/134	151/130	163/132	98/98

29

Note: See Appendix for more detail on APMs; (1) Includes Specials (2) 2019 has been restated

Alternative Performance Measures

Alternative performance measures

In the reporting of financial information, the Directors have adopted various Alternative Performance Measures ("APMs"). APMs should be considered in addition to IFRS measurements. The Directors believe that these APMs assist in providing useful information on the underlying performance of the Group, enhance the comparability of information between reporting periods, and are used internally by the Directors to measure the Group's performance.

• Adjusted EBT is the loss before tax and adjusting items
• Adjusted operating loss is loss from operating activities before adjusting items
• Adjusted EBITDA removes depreciation, loss/(profit) on sale of fixed assets and amortisation from adjusted EBIT
• Adjusted Earnings Per Share is loss after income tax before adjusting items, divided by the weighted average number of ordinary shares in issue during the reporting period
• Net Debt is current and non-current borrowings in addition to inventory financing arrangements, lease liabilities recognised following the adoption of IFRS 16, less cash and cash equivalents, cash held not available for short-term use (the definition of this APM has been updated since 31 December 2019)
• Adjusted leverage is represented by the ratio of Net Debt, to the last 12 months adjusted EBITDA (the definition of this APM has been updated since 31 December 2019)
• Free cashflow is represented by net cash (outflow)/inflow from operating activities plus the net cash used in investing activities plus interest paid in the period. Further details and definitions of adjusting items are contained in note 5 of the Interim Financial Statements.

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Disclaimer

This presentation has been prepared by Aston Martin Lagonda Global Holdings plc ("AML") solely for use at the H1 results analyst and investor meetings being held on Wednesday, 29 July 2020 in connection with a discussion of its H1 2020 results. For purposes of this notice, this "presentation" shall include these slides and any question-and-answer session that follows oral briefings by AML's executives. This presentation is for informational purposes only does not constitute an offer to sell or the solicitation of an offer to buy AML securities. Furthermore, this presentation does not constitute a recommendation to sell or buy AML securities.

No representations or warranties, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information presented or contained in this presentation. This presentation contains certain forward-looking statements, which are based on current assumptions and estimates by the management of AML. Past performance cannot be relied upon as a guide to future performance and should not be taken as a representation that trends or activities underlying past performance will continue in the future. Such statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from any expected future results in forward-looking statements. These risks may include, for example, changes in the global economic situation, and changes affecting individual markets and exchange rates. AML provides no guarantee that future development and future results actually achieved will correspond to the forward-looking statements included here, and accepts no liability if they should fail to do so. We undertake no obligation to update these forward-looking statements, which speak only as at the date of this presentation, and will not publicly release any revisions that may be made to these forward-looking statements, which may result from events or circumstances arising after the date of this presentation. This presentation is confidential and is being delivered to selected recipients only. It may not be reproduced (in whole or in part), distributed or transmitted to any other person. By attending the meeting at which this presentation is being given, you will be deemed to have represented, warranted and undertaken that you have read and agree to comply with the contents of this notice.

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Aston Martin Lagonda Investor Relations Team

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www.astonmartinlagonda.com

Charlotte Cowley - Director of Investor Relations

[e-mail]

Tel: [phone]

Brandon Henderson - Senior Manager, Investor Relations

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Tel: [phone]