Marshall Motor Holdings plc 2017 Full year results presentation - PowerPoint PPT Presentation

Marshall Motor Holdings plc 2017 Full year results presentation March 2018

INTRODUCTION 2

AGENDA  Full year Highlights  Financial Overview  Operating and Strategic Review  Current Trading and Outlook  Summary 3

2017 HIGHLIGHTS – ANOTHER RECORD TRADING RESULT  Record results at both Revenue and PBT level  Revenues +19.5% (LFL +3.5%), Underlying PBT £29.1m +14.4% FINANCIAL  Final dividend 4.25p per share, full year 6.40p (+16.4%) SUMMARY  Net debt £2.2m, (2016: £119.0m)  Net assets of £191.2m (2016: £145.7m), £2.47 per share (2016: £1.88)  LFL Revenues: New +1.0%, Used +7.0%, Aftersales +2.3%  Retail LFL new units down 2.6% versus market down 6.8% OPERATIONAL  OVERVIEW Used LFL units excellent performance +5.2% versus market down 1.1%  Retail underlying PBT of £34.9m +20.8%  Strategic disposal of Marshall Leasing for gross consideration of £42.5m STRATEGIC  Q4 closure programme DEVELOPMENTS  Portfolio investment on track, £116.3m of freehold property (2016: £106.5m)  Board remains cautious given continued economic and political uncertainty TRADING  Q1 trading in line with our expectations UPDATE  Our outlook for the full year remains unchanged 4

FINANCIAL OVERVIEW 5

Class Leading Returns FIVE YEAR TRACK RECORD OF STRONG GROWTH REVENUE (£m) UNDERLYING PBT (£m) NET ASSETS (£m) 2,500 30 200 Total 3.7 191.2 CAGR CAGR 2,250 2,268.9 24.6% 175 29.9% 25 25.4 4.9 2,000 150 1,899.4 145.7 1,750 Discontinued 20 20.5 Continuing 125 129.9 1,500 1,250 15 100 4.9 1,232.8 1,085.9 3.9 1,000 75 940.5 10.9 10 3.8 66.2 750 60.7 9.2 50 500 6.4 5 25 250 0 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 6

Class Leading Returns FINANCIAL SUMMARY Variance % Continuing FY 2017 FY 2016 Total Operations Revenue (£m) 2,268.9 1,899.4 19.5% 20.0% Gross Profit % 11.7% 11.6% +8bps +17bps Underlying Operating Profit (£m) 37.2 32.3 15.1% 23.4% (%) 1.6% 1.7% -6bps +4bps Finance Costs (8.1) (6.9) 17.3% 22.2% Underlying PBT (£m) 29.1 25.4 14.4% 23.7% Non underlying items 24.1 (3.2) Reported PBT (£m) 53.1 22.2 Underlying Effective Tax Rate % 18.1% 20.3% Underlying EPS 30.8p 26.2p Dividend Per Share 6.40p 5.50p Reported Net Debt (£m) 2.2 119.0 7

Class Leading Returns NON UNDERLYING ITEMS (£m) FY 2017 FY 2016 (Profit) on disposal of subsidiary (36.9) - Post retirement benefits charge 6.0 - Acquisition costs - 2.2 (Profit) on disposal of business assets - (0.3) Amortisation of acquired order book - 0.8 (Gain) on interest swap termination - (0.3) Restructuring costs 6.8 1.6 Investment property fair value - (0.7) Total Non Underlying items (24.1) 3.2 8

Class Leading Returns SEGMENTAL RESULTS Segmental Revenue (£m) FY 2017 FY 2016 Var Retail 2,231.7 1,859.7 20.0% Leasing (discontinued) 37.0 39.3 (6.0%) Unallocated 0.3 0.3 (12.1%) Total 2,268.9 1,899.4 19.5% Segmental Underlying PBT (£m) FY 2017 FY 2016 Var Retail 34.9 28.9 20.8% Leasing (discontinued) 3.7 4.9 (24.4%) Unallocated (9.5) (8.4) (13.6%) Total 29.1 25.4 14.4% Continuing operations* 25.4 20.5 23.7% 9 * Continuing operations excludes Leasing segment which was disposed in November 2017

Class Leading Returns RETAIL: REVENUE AND VOLUMES Revenue (£m) FY 2017 FY 2016 Var % LFL Var% New 1,166.5 983.3 18.6% 1.0% Used 869.7 718.3 21.1% 7.0% Aftersales 243.1 202.6 20.0% 2.3% Internal (47.6) (44.5) - - Total 2,231.7 1,859.7 20.0% 3.5% Unit Sales FY 2017 FY 2016 Var % LFL Var % New 31,801 28,321 12.3% (2.6%) Fleet 21,507 20,563 4.6% (13.9%) Total New 53,308 48,884 9.0% (7.5%) Used 44,237 37,787 17.1% 5.2% Total 97,545 86,671 12.5% (2.2%) 10

Class Leading Returns RETAIL: GROSS PROFIT Gross Profit (£m) Gross Profit (%) NEW USED AFTERSALES / OTHER £m % £m % £m % 100 16 100 16 52 115 90 90 114.0 14 14 50 105 80 80 84.1 95 12 12 48 92.3 70 70 85 68.9 10 10 46 75 60 60 59.9 65 50 8 50 8 44 50.7 55 40 40 6 6 42 45 30 30 35 4 4 40 20 20 25 2 2 38 10 10 15 0 0 0 0 5 36 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 Mix Gross Profit % 32.5% 32.6% Mix Gross Profit % 23.9% 23.2% Mix Gross Profit % 43.6% 44.2% 11

Class Leading Returns BALANCE SHEET Property, Plant & Equipment (£m) 2017 2016 2017 2016 Intangible 121.6 122.0 Freehold Land and Buildings 116.3 106.5 Property, Plant & Equipment 142.4 201.8 Leasehold Improvement 12.6 11.6 Other 2.6 2.6 Plant and Equipment 13.6 13.4 Total non current assets 266.7 326.5 Total continuing 142.4 132.1 Inventory 401.3 380.0 Leasing (discontinued) - 69.7 Trade / Other Receivables 92.1 95.1 Total 142.4 201.8 Assets held for sale 0.8 - Cash & Equivalents 4.9 0.1 Current Assets 499.0 475.2 Trade / Other Payables Trade / Other Payables (531.9) (504.8) Leasing Debt (discontinued) - (64.5) 2017 2016 Bank / Other Debt (7.1) (54.6) Vehicle and other funding 380.6 364.7 Other Liabilities (35.5) (32.0) Other Payables 151.3 140.1 Total Liabilities (574.5) (656.0) Total 531.9 504.8 Shareholders’ Equity 191.2 145.7 Reported Net Debt (£m) 2.2 119.0 12

Class Leading Returns CASHFLOW Other non cash movements (£m) 2017 2016 2017 2016 EBIT 61.2 29.1 Share based payments 0.7 1.3 Depreciation: Retail 8.9 5.8 Loss / (profit) on disposal of Property Plant and Equipment 1.1 - Depreciation: Leasing* 16.0 17.3 Impairment of Property Plant and Equipment 1.0 - Amortisation 0.3 1.1 Other movements (35.9) 0.3 Profit on disposal of Subsidiary (38.7) - Adjusted EBIT 50.5 53.6 Increase in fair value on Investment Properties - (0.7) Profit on disposal of Dealership - (0.3) Working Capital 19.1 38.3 Total (35.9) 0.3 Operating Cashflow 69.6 91.9 Tax / interest (15.5) (11.6) Gross Cashflow 54.1 80.3 Capital Expenditure: Retail (22.8) (26.4) Working Capital 2017 2016 Capital Expenditure: Leasing* (34.7) (35.5) Sale of business / disposal proceeds 56.7 14.6 Inventory (21.2) (14.8) Free Cashflow 53.2 33.0 Trade and other receivables 0.5 (0.3) Acquisitions (net of cash acquired) (0.1) (94.5) Trade and other payables (inc stock funding) 33.7 56.3 Dividends (4.5) (3.3) Other 6.1 (2.9) Net Borrowings (43.8) 40.8 Total 19.1 38.3 Cashflow 4.8 (24.0) 13 * discontinued

Class Leading Returns FINANCIAL GUIDANCE: 2018  Single segment disclosure following Leasing disposal  Continued New, Used and Aftersales disclosure  Continuing PBT- H1 reduced weighting v 2017  Retail capex 2018 c.£26m  £75m 2016-2018 programme completes  Interest charge reducing to c.£7.0 - £7.5m following leasing disposal  Full year effective tax rate 20-21% 14

OPERATING & STRATEGIC REVIEW 15

UK MARKET BACKDROP  2.54m new units registered in 2017 -5.7% UK NEW CAR REGISTRATIONS (m) 3.0  Retail -6.8%, Fleet / Business -4.7% 2.5  Q1 2017 +6.2%, driven by VED pull forward, declined thereafter 2.0  3 rd largest market on record 1.5  Premium brands continue to grow market share: c.35% 1.0  Sales by fuel type: 0.5  Petrol +2.7%, 53.3% share 0.0  Alternate Fuel Vehicles +34.8%, 4.7% share '10 '11 '12 '13 '14 '15 '16 '17 '18FC  Diesel -17.1%, 42.0% share UK USED CAR MARKET (m)  2018 SMMT forecast -5.8% 9.0 8.0  February YTD -5.1%, 7.0  6.0 2017 VED impact - March +8.4%, April -19.8% 5.0  Used market robust - 3.2x new market 4.0 3.0  PCP continues to remain popular 2.0  83% of new car finance cases (FY‘16 84%) 1.0  58% of used car finance cases (FY‘16 55%) '10 '11 '12 '13 '14 '15 '16 '17  67,458 live PCPs (FY16 58,000) 16 Source: New vehicles SMMT; Used vehicles – Experian 2010-2014; SMMT 2015-2017

STRENGTH OF MMH BALANCED PORTFOLIO Market Share Growth by Brand 2017 Vs 2016* 0.8 Market share Growth (%) 0.3 -0.2 -0.7 MMH Brand partner Not current MMH Brand partner -1.2 -1.7 Dec 2017** 9 8 3 - 2 9 8 2 1 - 5 4 5 6 8 1 4 6 - - - - 3 - - 4 4 Land Rover Passenger Mercedes- Maserati Vauxhall Hyundai Peugeot SKODA Renault Citroen Nissan Jaguar Toyota Suzuki Honda Mazda Smart Volvo SEAT Benz BMW Jeep Audi Ford Mini Fiat VW Kia DS  Total brands shown represent 95.9% of the UK market  MMH current UK Brand coverage: 81.7% (2016: 80.6%)  The Group intends to maintain its balance of Volume, Alternate Premium and Premium Brands 17 *Manufacturers shown for all MMH current or past partners or those with market share >1 ** excludes commercial vehicle sites.

MMH GEOGRAPHIC FOOTPRINT 2008 0.0% Specialist 16.3% Prestige 18.6% Alt Premium 65.1% Volume  East Anglian centric – 6 counties  No OEM relationships with scale  No German brands 18

MMH GEOGRAPHIC FOOTPRINT 2018 1.0% Specialist 49.5% Prestige 25.7% Alt Premium 23.8% Volume  101 Franchises across 26 counties  16 other standalone operating units  Headroom for further growth 19