2020 Interim Results Presentation 18th August 2020 Daksh Gupta Chief Executive Officer Richard Blumberger Chief Financial Officer
Agenda • H1 2020 – COVID-19 update and market overview – Daksh Gupta • Financial review – Richard Blumberger • Update on future outlook and summary – Daksh Gupta • Q&A 2
H1 2020 – COVID-19 update and market overview Daksh Gupta Chief Executive Officer
COVID-19 timeline – pre lockdown March April May June EXTERNAL 20th 23rd GOVT Furlough scheme Government announced imposed lockdown OPERATIONS 10th 22nd FY19 results MMH decision - March to temporarily orderbook close encouraging showrooms 26th COLLEAGUES INTERNAL 90% of 4,300 colleagues furloughed Ongoing bi-weekly management video briefings to all colleagues Mar TRADING Significant YTD LFL outperformance New: -10.6% EXTERNAL MARKET* Mar YTD: -31.0% * Source: SMMT 4
COVID-19 timeline – during lockdown March April May June EXTERNAL 20th 23rd GOVT Furlough scheme Government announced imposed lockdown OPERATIONS 10th 22nd 62 aftersales operations kept open during lockdown to support emergency services, CV operators, vulnerable customers and key workers FY19 results MMH decision - March to temporarily orderbook close 3,700 new and used vehicle orders taken during lockdown. Maintained our retail encouraging showrooms presence and supported our customers (online & telephone services) 26th COLLEAGUES INTERNAL 90% of 4,300 colleagues furloughed Ongoing bi-weekly management video briefings to all colleagues Mar TRADING Significant YTD LFL outperformance New: -10.6% EXTERNAL MARKET* Mar Apr YTD: -31.0% Month: -97.3% * Source: SMMT 5
COVID-19 timeline – during lockdown March April May June EXTERNAL 20th 23rd 11th 26th GOVT Furlough scheme Government Click and collect Government announcement announced imposed lockdown ref re-opening of showrooms OPERATIONS 10th 22nd 62 aftersales operations kept open during lockdown to support emergency services, CV operators, vulnerable customers and key workers FY19 results MMH decision - March to temporarily orderbook close 3,700 new and used vehicle orders taken during lockdown. Maintained our retail encouraging showrooms presence and supported our customers (online & telephone services) 26th May 18th COLLEAGUES INTERNAL 90% of 4,300 MMH recognised with Dealership colleagues GPTW award management 10 th year running furloughed team returns Ongoing bi-weekly management video briefings to all colleagues Mar TRADING Significant YTD LFL outperformance New: -10.6% EXTERNAL MARKET* Mar Apr May YTD: -31.0% Month: -97.3% Month: -89.0% * Source: SMMT 6
COVID-19 timeline – post lockdown March April May June EXTERNAL 20th 23rd 11th 26th GOVT Furlough scheme Government Click and collect Government announcement announced imposed lockdown ref re-opening of showrooms 1st OPERATIONS 10th 22nd 62 aftersales operations kept open during lockdown to support emergency services, CV operators, vulnerable customers and key workers FY19 results MMH decision MMH showrooms - March to temporarily reopen under revised, orderbook close COVID-secure, 3,700 new and used vehicle orders taken during lockdown. Maintained our retail encouraging showrooms operating procedures presence and supported our customers (online & telephone services) 26th May 18th 1st COLLEAGUES INTERNAL 90% of 4,300 MMH recognised with Dealership 50% of colleagues GPTW award management colleagues 10 th year running furloughed team returns returned to work Ongoing bi-weekly management video briefings to all colleagues Mar Jun Jun TRADING Significant YTD LFL Trading strong due to pent-up Significant YTD LFL outperformance demand & delivery of outstanding outperformance New: -10.6% vehicles ordered prior to lockdown New: -37.7% EXTERNAL MARKET* Mar Apr May Jun YTD: -31.0% Month: -97.3% Month: -89.0% YTD: -48.5% * Source: SMMT 7
COVID-19 actions and impact on business • Management early actions to protect the business • Strong focus on cash • Stopped discretionary spend, purchasing of stock and capital expenditure • Targeted stock reduction • In addition to outstanding communication, the Group worked hard to protect its most valuable asset – its people – by supplementing the support provided by the CJRS: • Enhanced pay of 100% for March, 90% for April and 85% for May • Not imposing the CJRS cap of £2,500 per month • Board and senior management took voluntary pay reductions • Business responded quickly to new ways of working – e.g. remote working • Bi-weekly Executive Committee meetings, weekly Operations Board, fortnightly management meetings • Our people have been exceptional throughout – demonstrating the strong culture of the Group Successful reactivation plan following the business re-opening on 1 st June, providing a safe environment for our customers, • colleagues and partners • Significant steps taken to ensure safety, with revised, COVID-secure, operating procedures introduced • PPE purchased and distributed throughout the business • All colleagues required to complete mandated reactivation plan, detailed 100 page training and test (100% pass mark required) • A number of new learnings have come through reactivation phase around efficiencies and customer experience • As of today 88% of colleagues now returned to work. No cross-company redundancies have been implemented 8
Impact on like-for-like operational and financial metrics A D J U S T E D GROSS PROFIT/(LOSS) OPERATING N E T REVENUE * L E V E R A G E C A S H / PROFIT % * BEFORE TAX ** PROFIT/(LOSS)* ( D E B T ) * * * £798.4m 10.4% (£8.9m) (£2.4m) £27.4m Nil FY 19: (£30.6m) FY 19: 0.72x H1 19: £1,156.2m H1 19: 11.4% H1 19: £15.2m H1 19: £20.4m H1 19: £5.8m H1 19: Nil TOTAL NEW NEW RETAIL AFTERSALES FLEET UNITS * USED UNITS * REVENUE * UNITS * UNITS * (37.7%) (37.7%) (37.7%) (31.8%) (28.5%) vs market (48.5%) **** vs market (44.6%) **** vs market (51.7%) **** vs market (28.7%) **** * Like-for-like (includes group businesses or activities that have been active or trading for a period of 12 consecutive months and excludes businesses or activities that do not have 12 months trading activity); ** Reported underlying; *** Non GAAP measure that excludes 9 IFRS 16-related lease liabilities; **** SMMT registrations which includes impact of dealer self-registration activity
Market overview New vehicles Used vehicles • 0.65m new cars registered in H1, down -48.5% • H1 used car transactions down -28.7% to 2.9m • Retail down -44.6%, fleet / business down -51.7% • Strong demand for used cars post lockdown driven by pent-up demand, “revenge buying” and loss of • July +11.3%, YTD -41.9% confidence in public transport • Latest SMMT forecast for full year 2020 -30.6% to • Demand has benefited older used vehicles in 1.6m, which implies Aug-Dec -12.4% particular (sub-£10k), where demand has been outstripping supply and stock levels remain low • Supply a potential issue due to factory lockdown From 1 st January 2021 emissions will be fully • Used car values expected to remain robust due to • supply constraints and demand reported in WLTP values Aftersales Finance and insurance • Pent-up demand driven by 6 month MOT extension • Finance companies acted responsibly and allowed and deferred aftersales work due to lockdown extensions to consumers’ contracts – delayed renewals underpinning pent-up demand • Service plans a key part of the Group’s retention • Discretionary commission models will be banned by strategy and provides a greater level of certainty over the Financial Conduct Authority from 28 January 2021 future aftersales profits • MMH welcomes transparency for all consumers • Since full reopening on 1 June, our aftersales facilities have predominantly been carrying out delayed scheduled service and maintenance work which typically have higher margins Source: SMMT 10
Financial review Richard Blumberger Chief Financial Officer
H1 2020 financial summary £m H1 20 H1 19 • Results include 10 weeks of lockdown closure Revenue 895.3 1,183.3 • Revenue includes acquisitions made in 2019. Like-for-like revenue decreased by 30.9% to £798.4m Gross profit 95.2 135.0 • GP% at 10.6% versus 11.4% impacted by Operating expenses * (98.8) (114.9) reduced manufacturer bonus payments due to lower new car volumes Operating loss / profit * (3.6) 20.2 • Like-for-like operating expenses reduced by Net finance costs (5.3) (5.0) 23.4% Loss / profit before tax * (8.9) 15.2 • Like-for-like operating loss of £2.4m Non-underlying items (1.8) (0.4) • Non-underlying includes: • Enhanced pay for furloughed colleagues Reported loss / profit before tax (10.7) 14.8 • COVID-secure costs • Profit on disposal of assets held for sale Adjusted net cash 27.4 5.8 • Acquisitions and disposals related costs Underlying EPS (p) (11.2) 15.0 • £58.0m cash generation in H1 Net assets 190.5 200.7 * Underlying 12
Impact of closure period – H1 underlying PBT bridge COVID-related Net zero * Generated from internal management information 13
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