1 | McLaren H1 2020 Results McLaren H1 2020 Results August 26, 2020
2 | McLaren H1 2020 Results H1 2020 – Impact on Group as a result of COVID-19 pandemic 1 - Impact of COVID-19 3 – Resolve liquidity shortfall Global Retail closures across all markets Multi-pronged approach to protect company ▪ Retail sales network closed as a result of global lockdown ▪ Shareholder support (Equity and bank funding) Production facility temporarily suspended ▪ Bank support (Leverage covenant waiver) ▪ No cars built during April and May as production centre suspension ▪ Bondholders (securing amendments to indenture for future flexibility) takes effect ▪ Government support (Furlough scheme, PAYE holiday, Paycheck Automotive wholesales reduced Protection program (USA)) ▪ Vehicle wholesales lower due to the above Liquidity shortfall resolved in 2020 ▪ £150m funding achieved through new 12 month bridge facility in June ▪ Provides operational stability into 2021 2 - Actions taken to counter COVID-19 4 - Business restart – July / August Reduced Capital Expenditures Automotive ▪ Match investment to current vehicles that deliver a 2020 return ▪ MPC fully reopen in July, Series and Ultimate lines on one full shift per ▪ Invest in the all-new, flexible, lightweight vehicle architecture which will day underpin McLaren’s next generation of electrified supercars ▪ Majority of retail network now open Staff, Opex, Overhead and Liquidity ▪ Supply chain intact and resized to new requirements ▪ Furloughed staff and completed redundancy programme ▪ Social distancing and flexible working in place to minimise risk to ▪ Reduced Sales, Marketing, IT and Facilities spending; reduction in operations Racing and Applied costs Racing ▪ Tight cost control to protect liquidity until new funding received ▪ Commenced F1 season in July with up to 16 - 18 races planned
3 | McLaren H1 2020 Results Automotive > Racing > Applied H1 2020 Group Revenue by division H1 2020 ▪ H1 2020 revenues of £217m were down 68.8% vs. H1 2019 ▪ H1 2020 LTM Adjusted EBITDA (1) was (£14m) - a direct result of COVID-19 lockdown, no Formula 1 racing and production suspension during H1 2020 reducing revenue generation ▪ Liquidity issue advised in Q1 due to COVID-19 impact on revenues solved via new funding of £150.0m raised during H1 2020 Automotive ▪ Vehicle wholesales in H1 2020 totalled 584 (2,335 in H1 2019) ▪ H1 2020 production of 621 cars (2,640 H1 2019) was impacted materially as a result of the suspension of MPC ▪ 2020 order book now confirmed, with >75% share of higher-margin Super Series and Ultimate Series cars Car volumes by region – H1 2020 Racing ▪ Revenues £16.6m down vs. H1 2019 driven by lower F1 prize fund receipts due to COVID-19 impacting season, partially offset by increased sponsorship versus the prior year Applied ▪ Revenues £13.5m down vs. H1 2019 driven primarily by completion of two large non-recurring projects in 2019 and impact of COVID-19 (1) Adjusted EBITDA – Excluding H1 2020 exceptional financing and redundancy costs of £23.3m related to COVID-19 impact. FY2019 EBITDA is £181.9m after being adjusted by £4.8m due to a reclassification in McLaren Applied for intangible amortisation in the final statutory accounts.
4 | McLaren H1 2020 Results Key metrics – H1 2019 vs. H1 2020 ◼ Revenue (£m) ◼ Liquidity (£m) (69%) Liquidity increased as a result of new £150m funding in H1 2020 ◼ EBITDA 1 (£m) ◼ Net debt (£m) (243%) At H1 2020 the £130m SSRCF was drawn £68m 1 Adjusted EBITDA ◼ Wholesale volume ◼ Capex (£m) (Units, YoY) H1 2020 Capex down (25%) on H1 (75%) 2019 includes investment in the all- new, flexible, lightweight vehicle architecture which will underpin the next generation of electrified supercars launching in 2021
5 | McLaren H1 2020 Results Automotive
6 | McLaren H1 2020 Results McLaren Automotive H1 2020 Summary Automotive revenues in H1 2020 of £143.1m (H1 2019 £592.4m) were materially lower due to the unprecedented adverse ▪ impact of COVID-19 and the strategic decision taken to reduce volumes in preparation of the launch of the all-new, flexible, lightweight vehicle architecture which will underpin the next generation of electrified supercars Q2 saw the entire retailer network shut down globally for two months, with a full suspension of the production facility from ▪ end of March to beginning of June. The factory is now re-open with one full shift on Series and Ultimate lines Markets commenced re-opening in May - June with China the first market to open, followed by Germany and UK. As of ▪ August, c.80% of the retailer network was fully operational and we expect this to increase to 90% over H2 2020 Wholesale volumes of 584 cars was slightly ahead of our revised COVID-19 planned volume for H1 2020. The strongest ▪ regional performance was in China where H1 volumes were broadly in line with the pre-COVID-19 2020 plan. China experienced a catch-up in Q2 once COVID-19 restrictions were lifted The product mix was well balanced across series vehicles, with Sports and GT Series combined contributing to 65% of H1 ▪ 2020 volume with the balance driven by Super and Ultimate Series. Speedtail wholesales were slightly behind plan due to production timing and are expected to recover fully in H2 2020 Retailer network is fully intact with no permanent closures (with the exception of temporary lockdown closures in certain ▪ regions due to COVID-19) with retail sales in H1 2020 exceeding wholesales by c500 cars as demand saw retailers able to clear down existing stocks. A broad range of order bank development actions in place to build good demand for deliveries into early 2021 Automotive supply chain intact and supply base running at production capacity ▪ New multi-year group partnership with Gulf Oil who will be primary fuel and lubricant supplier for the years ahead ▪
7 | McLaren H1 2020 Results McLaren Automotive Focus on Ultimate and Super Series production in 2020 Following the unprecedented impact of COVID-19 on the business during H1 2020, our focus is on meeting our planned 2020 volumes with a focus on the high margin vehicles including Speedtail, Elva and the new 765LT Speedtail Elva 765LT 106 Speedtails Around 60 planned for 2020 765 total volume ▪ ▪ ▪ 15 delivered H1 2020 First deliveries in H2 2020 Order bank full for H2 2020, ▪ ▪ ▪ Balance in H2 2020 strong orders into H1 2021 ▪
8 | McLaren H1 2020 Results McLaren Automotive Global volumes Volume declined globally driven by impact of COVID-19 and strategic reduction in volumes ▪ Closure of the retailer network globally for Europe more than two months 611 157 North America ▪ Production Centre suspension delayed the delivery of vehicles in H1 240 1,125 China ▪ Strategic decision to reduce H1 2020 84 83 volumes driven by: ➢ Matching production and inventory to market demand ➢ Retailer de-stocking ➢ Preparing for 2020 new model launches Global RoW Markets commenced reopening during May/June with c80% of global retailer network 123 32 2,335 now open APAC ▪ Conservative 2020 volume forecast of 1,500, 584 392 72 with upside of 100-200 units following better H1 2019 H1 2020 than expected retail sales in H1 2020
9 | McLaren H1 2020 Results Racing
10 | McLaren H1 2020 Results Formula 1 World Championship 2020 delayed start but now racing Formula 1 Season now underway with 6 races completed ▪ 17 F1 races now confirmed for 2020 with final four races in Turkey, Bahrain (2 races) and Abu Dhabi ▪ Lando Norris achieved his first podium finishing 3 rd in the Austrian Grand Prix becoming the youngest ▪ British driver to achieve a podium in the sport After six races McLaren is currently 4 th in the 2020 F1 Constructors’ World Championship with 62 points ▪ McLaren has confirmed signing of Daniel Ricciardo from Renault with Lando Norris completing driver line ▪ up for 2021 season Off-track Due to the COVID-19 impact and delayed start to the season prize fund revenue will be reduced in 2020 ▪ due to lower number of races held Sponsorship remains robust with the signing of two new Partners, Gulf and IQONIQ ▪ Sponsorship revenues ahead of plan for the current year helping to offset the reduced prize funds ▪
11 | McLaren H1 2020 Results Formula 1 and beyond F1 Concorde update, Indy Series and Heritage cars New Concorde agreement for 2021 – 2025 The long-awaited Concorde Agreement governing the future of the sport has now been signed by all ▪ teams, reaffirming McLaren’s long-term commitment to Formula 1 Financial cost cap commences in 2021 at $145m then reduces to $140m in 2022 and $135m in 2023-25 ▪ The agreed technical regulations will commence from 2022 ▪ McLaren will change power units from Renault to Mercedes in 2021 ▪ Indy Series The season is now underway (reduced calendar of 14 races) with 7 races completed. The team is showing ▪ strong progress with Patricio “ Pato ” O’Ward now 3 rd and Oliver Askew 16 th overall in the championship Indianapolis 500 held with Pato O’Ward finishing in 6 th place out of 33 starters with Oliver Askew ending ▪ the race after a crash on lap 92 following a restart ending in 30 th place Heritage Cars Ongoing preparation and sale of a small number of heritage fleet cars continues to support the Racing ▪ business and build strong relationships with Racing fans and customers
12 | McLaren H1 2020 Results Financials
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