REG - Aston Martin Lagonda - 3rd Quarter Results
30/10/2024 07:00
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RNS Number : 1344K Aston Martin Lagonda Glob.Hldgs PLC 30 October 2024
Aston Martin Lagonda Global Holdings plc
("Aston Martin", or "AML", or the "Company", or the "Group")
Third quarter results for the nine months ended 30 September 2024
· Improved Q3 2024 performance in line with revised expectations; on
track to deliver revised FY 2024 guidance, as supply chain disruptions are
proactively managed
· Scheduled ramp up of new Vantage and DBX707 supported 14% increase
in Q3 volumes YoY; sequential growth to continue in Q4, alongside new V12
flagship Vanquish and Valiant special
· YTD 2024 total ASP increased 14% to £250k, supported by strong
demand for Specials and 440bps increase in contribution to Core revenue from
vehicle personalisation
· Order book continues to extend; expected to strengthen further as
new range of models become available in all markets
£m YTD 2024 YTD 2023 % change Q3 2024 Q3 2023 % change
Total wholesale volumes(1) 3,639 4,398 (17%) 1,641 1,444 14%
Revenue 994.6 1,039.5 (4%) 391.6 362.1 8%
Gross profit 376.9 370.8 2% 144.0 134.5 7%
Gross margin (%) 37.9% 35.7% 220 bps 36.8% 37.1% (30 bps)
Adjusted EBITDA(2) 112.9 131.1 (14%) 50.7 50.5 0%
Adjusted EBIT(2) (121.5) (135.1) 10% (21.7) (48.4) 55%
Operating (loss)/profit (132.8) (145.3) 9% (26.7) (52.1) 49%
(Loss)/profit before tax (228.9) (259.8) 12% (12.2) (117.6) 90%
Net debt(2) (1,216.5) (749.9) (62%) (1,216.5) (749.9) (62%)
1 Number of vehicles including Specials; 2 For definition of alternative
performance measures please see Appendix
Adrian Hallmark, Aston Martin Chief Executive Officer commented:
"Having only joined Aston Martin in September, I can already clearly see
growth opportunities for the Company as we bring incredible products to market
and deliver on our vision to be the world's most desirable, ultra-luxury
British performance brand.
"We recently launched Vanquish, successfully completing the most diverse,
dynamic and desirable portfolio in the luxury segment. Recent media reviews of
our V12 flagship highlights the strength of Aston Martin's products, which now
truly align with our ultra-luxury high performance strategy.
"Long-term value creation and sustainable growth are key priorities as we look
forward to Q4 2024 and beyond. We will deliver our fully reinvigorated
portfolio to market efficiently and maximise the considerable commercial
potential, including greater personalisation opportunities, to further
strengthen the order book. In addition, we will drive profitability through a
forensic approach to cost management and unrelenting focus on quality with a
more balanced delivery profile in the future for our full range of new core
models.
"Improved financial and operational performance in Q3 2024, demonstrates our
strategy's effectiveness. We are on track to meet our revised Full Year 2024
guidance, which reflects the necessary action taken in September to adjust our
production volumes given supplier disruption, which we are proactively
managing, and the weak macroeconomic environment in China."
Aston Martin's Chief Executive Officer and Chief Financial Officer will host a
Q&A at 8:30am (GMT) today. Details can be found on page 6 of this
announcement and online at www.astonmartinlagonda.com/investors
(http://www.astonmartinlagonda.com/investors)
Wholesale volume summary
Number of vehicles YTD 2024 YTD 2023 % change Q3 2024 Q3 2023 % change
Total wholesale 3,639 4,398 (17%) 1,641 1,444 14%
Core (excluding Specials) 3,481 4,330 (20%) 1,601 1,414 13%
By region:
UK 664 774 (14%) 369 329 12%
Americas 1,112 1,417 (22%) 477 355 34%
EMEA ex. UK 1,101 1,267 (13%) 427 433 (1%)
APAC 762 940 (19%) 368 327 13%
By model:
Sport/GT 2,416 2,090 16% 1,043 721 45%
SUV 1,065 2,240 (52%) 558 693 (19%)
Specials 158 68 132% 40 30 33%
Note: Sport/GT includes Vantage, DB11, DB12, and DBS
YTD 2024 wholesale volumes of 3,639 decreased by 17% (YTD 2023: 4,398),
reflecting Aston Martin's product transformation with the Company introducing
the new Vantage and DBX707 at the end of Q2 2024, alongside the established
DB12:
· Sport/GT: YTD 2024 wholesales of 2,416 increased 16% (YTD 2023:
2,090), reflecting the initial ramp up of new Vantage wholesales from late Q2
2024, supported by ongoing DB12 wholesales.
· SUV: YTD 2024 wholesales of 1,065 decreased by 52% (YTD 2023:
2,240), reflecting a strategic transitional ramp down in prior model volumes
at the start of 2024, followed by the initial ramp up of upgraded DBX707
wholesales from late Q2 2024.
· Specials: YTD 2024 wholesales of 158 (YTD 2023: 68), comprised of
Aston Martin Valkyries and Valour deliveries.
Q3 2024 wholesale volumes of 1,641 increased by 14% (Q3 2023: 1,444). This
reflects ongoing DB12 wholesales in addition to the ramp up in production of
the new Vantage and DBX707, resulting in a quarterly sequential increase of
56% (Q2 2024: 1,053). The company expects to continue ramping up production of
these new models into Q4 2024, in addition to introducing the new V12 flagship
Vanquish, in line with the Company's revised FY 2024 volume guidance provided
in September 2024. As the new range of models becomes available in all
markets, the full order book has extended into Q1 2025 and is expected to
continue strengthening as the benefits from increased marketing activities and
customer engagement drive further demand.
Geographically, as guided, wholesale volumes across all regions were down
compared to YTD 2023 due to the product portfolio transition. The Americas and
EMEA, excluding UK, were the largest regions YTD 2024, collectively
representing 61% of total wholesales, primarily driven by DB12 demand. While
China remains a market with significant long-term growth opportunities, the
trend there continued with volumes decreasing by 54% compared with YTD 2023,
driven by a combination of market dynamics and the timing of new model
deliveries, including DB12, which only commenced in Q3 2024. YTD 2024
wholesale volumes in APAC excluding China were up 4%. All regions were up in
Q3 2024 compared with Q3 2023, except EMEA due to timing of DBX707 deliveries
in 2024 and higher DBS volumes compared to other regions in Q3 2023.
Revenue and ASP summary
£m YTD 2024 YTD 2023 % change Q3 2024 Q3 2023 % change
Sale of vehicles 913.4 965.3 (5%) 364.6 338.0 8%
Total ASP (£k) 250 219 14% 222 234 (5%)
Core ASP (£k) 178 184 (3%) 177 183 (3%)
Sale of parts 64.6 59.3 9% 21.8 19.0 15%
Servicing of vehicles 8.8 6.9 28% 2.5 2.7 (7%)
Brand and motorsport 7.8 8.0 (3%) 2.7 2.4 13%
Total revenue 994.6 1,039.5 (4%) 391.6 362.1 8%
YTD 2024 revenue decreased by 4% to £995m (YTD 2023: £1,040m), largely
reflecting the volume impact of the planned portfolio transition. This
included the new Vantage and DBX707 initial production ramp up commencing at
the end of Q2 2024 and concludes in Q4 2024 with deliveries commencing of
Vanquish and Valiant. In addition, strengthening sterling against major
currencies compared to the prior year has resulted in a continued foreign
exchange headwind:
· YTD 2024 total ASP: Increased 14% reflecting the richer mix
resulting from deliveries of Specials including the Aston Martin Valkyrie
Spider and Valour limited edition models. Q3 2024 total ASP (£222k) decreased
5%, partly reflecting fewer Valkyrie deliveries compared with Q3 2023.
· YTD 2024 core ASP: Marginally lower, down 3%, reflecting the prior
year 2023 period mix benefitting from the contribution of V12 Vantage, DBS,
DBS 770 Ultimate and higher SUV sales. Continued strong demand for product
personalisation drove an increase in contribution to core revenue from
options, up 440 basis points to 19% compared to YTD 2023, partly reflecting
the launch period of new models.
Income statement summary
£m YTD 2024 YTD 2023 Q3 2024 Q3 2023
Revenue 994.6 1,039.5 391.6 362.1
Cost of sales (617.7) (668.7) (247.6) (227.6)
Gross profit 376.9 370.8 144.0 134.5
Gross margin % 37.9% 35.7% 36.8% 37.1%
Adjusted operating expenses(1) (498.4) (505.9) (165.7) (182.9)
of which depreciation & amortisation 234.4 266.2 72.4 98.9
Adjusted EBIT(1,2) (121.5) (135.1) (21.7) (48.4)
Adjusting operating items (11.3) (10.2) (5.0) (3.7)
Operating loss (132.8) (145.3) (26.7) (52.1)
Net financing (expense)/income (96.1) (114.5) 14.5 (65.5)
of which adjusting financing (expense)/ income (19.2) (28.3) 3.1 9.6
Loss before tax (228.9) (259.8) (12.2) (117.6)
Tax credit/(charge) 9.2 (0.2) 0.1 (0.4)
Loss for the period (219.7) (260.0) (12.1) (118.0)
Adjusted EBITDA(1,2) 112.9 131.1 50.7 50.5
Adjusted EBITDA margin 11.4% 12.6% 12.9% 13.9%
Adjusted loss before tax(1) (198.4) (221.3) (10.3) (123.5)
1 Excludes adjusting items; 2 Alternative Performance Measures are defined in
Appendix
Despite the lower revenue and volumes YTD 2024, gross profit of £377m
increased by 2% (YTD 2023: £371m), resulting in a gross margin of 38%,
expanding by 220 basis points (YTD 2023: 36%). The gross margin performance
reflected benefits from the ongoing portfolio transformation to next
generation models in addition to strong volumes of high margin Specials. This
was partially offset by higher manufacturing, logistics and other costs ahead
of the significant ramp up in production in Q4 2024. The Company continues to
target over 40% gross margin from future products, aligned with the Company's
ultra-luxury high performance strategy.
YTD 2024 adjusted EBITDA at £113m (YTD 2023: £131m) was in line with revised
Q3 2024 guidance, decreasing by 14%, with adjusted EBITDA margin declining to
11% (YTD 2023: 13%). This was primarily due to the lower core volumes during
the portfolio transition period, and a 10% increase in adjusted operating
expenses (excluding D&A) which includes reinvestments into brand and
marketing activities and inflationary impacts on the cost base, partially
offset by a higher number of Specials.
Adjusted EBIT improved by 10% YTD 2024 to £(122)m (YTD 2023: £(135)m) with
depreciation and amortisation decreasing by 12% to £234m (YTD 2023: £266m).
YTD 2024 adjusted net financing costs of £77m (YTD 2023: £86m) decreased
primarily due to a larger year-on-year impact of US dollar debt revaluations.
The £19m net adjusting finance charge (YTD 2023: £28m) was due to redemption
premiums associated with the refinancing of the senior secured notes,
partially offset by gains on financial instruments recognised through the
income statement.
The adjusted loss before tax of £198m (YTD 2023: £221m loss), reflects the
improved adjusted EBIT and lower adjusted net finance costs.
On a reported basis, the YTD 2024 operating loss of £133m decreased by 9%
(YTD 2023: £145m loss) primarily due to a marginally improved gross profit
and reduced operating expenses, which in combination with a decrease in net
finance expenses resulted in a reduced loss before tax of £229m (YTD 2023:
£260m).
Cash flow and net debt summary
£m YTD 2024 YTD 2023 Q3 2024 Q3 2023
Cash (used in)/generated from operating activities (51.4) 31.4 20.5 13.9
Cash used in investing activities (excl. interest) (300.0) (275.0) (99.9) (94.8)
Net cash interest (paid)/received (42.4) (53.2) (1.8) 2.4
Free cash outflow (393.8) (296.8) (81.2) (78.5)
Cash inflow from financing and other investing activities (excl. interest) 163.4 262.8 69.6 218.1
(Decrease)/increase in net cash (230.4) (34.0) (11.6) 139.6
Effect of exchange rates on cash and cash equivalents (5.1) (5.5) (4.2) 4.1
Cash balance 156.9 543.8 156.9 543.8
Available facilities 154.1 52.4 154.1 52.4
Total cash and available facilities ("liquidity") 311.0 596.2 311.0 596.2
YTD 2024 net cash outflow from operating activities was £51m (YTD 2023: £31m
inflow). The outflow was primarily driven by an £18m decrease in YTD 2024
adjusted EBITDA, as explained above, and YTD 2024 working capital outflow of
£142m (YTD 2023: £69m outflow). The drivers of YTD 2024 working capital
outflow were:
· £123m decrease (YTD 2023: £1m decrease) in deposits held, due to
the increased volume of Specials delivered compared to the prior period. This
trend is expected to continue in Q4 2024 driven by Valiant and Valkyrie
deliveries before tapering off in Q1 2025 as the current Specials programmes
conclude,
· £108m increase in inventories (YTD 2023: £53m increase) with a
noticeable increase in Q3 2024 ahead of the Q4 2024 ramp up in new Vantage,
DBX707 and Vanquish production,
· partially offset by an £80m decrease in receivables (YTD 2023:
£18m increase) and an £8m increase in payables (YTD 2023: £3m increase).
Capital expenditure of £300m was marginally higher compared to the
comparative period (YTD 2023: £275m). Investment is focused on the future
product pipeline, including the next generation of models and development of
the Company's electrification programme.
Free cash outflow of £394m YTD 2024 compared with YTD 2023 at £297m outflow,
was primarily due to the increase in cash outflow from operating activities as
detailed above. Sequentially, free cash outflow improved in Q3 2024 to £81m
compared to £122m in Q2 2024 and £190m in Q1 2024. This improving trend is
expected to continue into Q4 2024 as the Company benefits from a fully
reinvigorated portfolio.
£m 30-Sep-24 31-Dec-23 30-Sep-23
Loan notes (1,227.4) (980.3) (1,102.2)
Inventory financing (39.8) (39.7) (38.8)
Bank loans and overdrafts (8.3) (89.4) (57.9)
Lease liabilities (IFRS 16) (97.9) (97.3) (95.3)
Gross debt (1,373.4) (1,206.7) (1,294.2)
Cash balance 156.9 392.4 543.8
Cash not available for short-term use - - 0.5
Net debt (1,216.5) (814.3) (749.9)
Compared with 31 December 2023, gross debt increased to £1,373m (31 December
2023: £1,207m) as a result of the refinancing and private debt placing. In
March 2024, following upgrades from leading credit agencies, the Group priced
on improved terms senior secured notes of $960m at 10.000% and £400m at
10.375% due in 2029. In addition, existing lenders entered into a new super
senior revolving credit facility agreement, increasing their binding
commitments by circa £70m to £170m. This new facility, in addition to the
circa £135m private debt placing in August 2024, provides the Company with
additional liquidity as it continues to accelerate its growth strategy.
Total cash and available facilities ("liquidity") was £311m on 30 September
2024 which increased by £64m compared to 30 June 2024 (£247m), reflecting
the circa £135m private debt placing in August 2024, partially offset by the
guided free cash outflow in Q3 2024. Liquidity at year end 2024, is expected
to reflect the continued positive free cash flow trend, with Q4 2024 free cash
outflow significantly improved compared with Q3 2024, benefitting from
enhanced performance driven by the full range of new models.
Net debt of £1,217m at 30 September 2024 increased from £750m as at 30
September 2023 due to the higher gross debt (30 September 2023: £1,294m) and
lower cash balance (30 September 2023: £544m). The net leverage ratio of 4.2x
(30 September 2023: 3.1x) reflects the EBITDA performance during the portfolio
transition period YTD 2024 and the increase in net debt with disciplined
strategic delivery and EBITDA growth supporting future deleveraging.
Outlook
· On track to deliver revised FY 2024 guidance which reflects
adjustment to volumes as the Company continues with the H2 2024 production
ramp up following new model launches
· Well positioned for sustainable growth as Aston Martin moves ahead
with a completely reinvigorated range of new models
On 30 September 2024, Aston Martin announced an update to its 2024 wholesale
volumes, making a circa 1,000 unit reduction to address disruption in its
supply chain and continued macroeconomic weakness in China. In addition, the
Company seeks to smooth the cadence of wholesale volumes over the coming
quarters to deliver on its demand-led approach and maximise production
efficiencies.
Updated guidance (from 30 September 2024):
· FY 2024 wholesale volumes are now expected to decline by high
single digit percentage compared with FY 2023 (previously high single digit
volume growth).
· FY 2024 gross margin now expected to be modestly below 40%
(previously targeting c. 40%).
· FY 2024 adjusted EBITDA margin now in the high teen's percentage
(previously low 20s%).
· H2'24 free cash flow, while materially improved compared with
H1'24, will remain negative (previously positive free cash flow generation in
H2'24), with Q4 2024 free cash outflow expected to significantly improve
sequentially compared with Q3 2024.
· The Company remains focused on achieving its previously
communicated targets for FY 2025.
Following the successful launch of the new Vantage and DBX707, with deliveries
commencing as planned at the end of Q2 2024, performance in Q4 2024 will
benefit from all next generation core models available in market including
initial deliveries of the V12 flagship Vanquish. In addition, Valiant, the
ultra-exclusive Special, remains on track with the majority of deliveries
expected by year end, concluding the current programme of Specials.
The financial information contained herein is unaudited.
All metrics and commentary in this announcement exclude adjusting items unless
stated otherwise and certain financial data within this announcement have been
rounded.
Enquiries
Investors and Analysts
James Arnold Head of Investor
Relations
+44 (0) 7385 222347
james.arnold@astonmartin.com
Ella South Investor
Relations Analyst
+44 (0) 7776 545420
ella.south@astonmartin.com
Media
Kevin Watters Director of
Communications
+44 (0) 7764 386683
kevin.watters@astonmartin.com
Paul Garbett Head of Corporate &
Brand Communications +44 (0) 7501 380799
paul.garbett@astonmartin.com
FGS Global
James Leviton and Jenny Bahr
+44 (0) 20 7251 3801
Results
Presentation
· There will be a Q&A today at 08.30am GMT:
https://app.webinar.net/pjr64AR9JA2 (https://app.webinar.net/pjr64AR9JA2)
· The Q&A can be accessed live via the corporate website:
https://www.astonmartinlagonda.com/investors/results-and-presentations
(https://www.astonmartinlagonda.com/investors/results-and-presentations)
· A replay facility will be available on the website later in the
day
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 release. This release contains
certain forward-looking statements, which are based on current assumptions and
estimates by the management of Aston Martin Lagonda Global Holdings plc
("Aston Martin Lagonda"). 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.
Aston Martin Lagonda provides no guarantee that future development and future
results achieved will correspond to the forward-looking statements included
here and accepts no liability if they should fail to do so. Aston Martin
Lagonda undertakes no obligation to update these forward-looking statements
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 release.
This release is for informational purposes only and does not constitute or
form part of any invitation or inducement to engage in investment activity,
nor does it constitute an offer or invitation to buy any securities, in any
jurisdiction including the United States, or a recommendation in respect of
buying, holding or selling any securities.
Alternative Performance Measures
£m YTD 2024 YTD 2023
Loss before tax (228.9) (259.8)
Adjusting operating expense 11.3 10.2
Adjusting finance expense 35.7 28.3
Adjusting finance income (16.5) -
Adjusted EBT (198.4) (221.3)
Adjusted finance income (46.9) (32.5)
Adjusted finance expense 123.8 118.7
Adjusted EBIT (121.5) (135.1)
Reported depreciation 55.4 70.7
Reported amortisation 179.0 195.5
Adjusted EBITDA 112.9 131.1
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 as shown on
the Consolidated Income Statement
- Adjusted EBIT is loss from operating activities before adjusting
items
- Adjusted EBITDA removes depreciation, loss/(profit) on sale of fixed
assets and amortisation from adjusted operating loss
- Adjusted operating margin is adjusted EBIT divided by revenue
- Adjusted EBITDA margin is adjusted EBITDA (as defined above)
divided by revenue
- 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 and cash held not
available for short-term use
- Adjusted leverage is represented by the ratio of Net Debt to the
last twelve months ('LTM') Adjusted EBITDA
- Free cash flow is represented by cash inflow/(outflow) from
operating activities less the cash used in investing activities (excluding
interest received and cash generated from disposals of investments) plus
interest paid in the year less interest received.
About Aston Martin Lagonda:
Aston Martin's vision is to be the world's most desirable, ultra-luxury
British brand, creating the most exquisitely addictive performance cars.
Founded in 1913 by Lionel Martin and Robert Bamford, Aston Martin is
acknowledged as an iconic global brand synonymous with style, luxury,
performance, and exclusivity. Aston Martin fuses the latest technology, time
honoured craftsmanship and beautiful styling to produce a range of critically
acclaimed luxury models including Vantage, DB12, Vanquish, DBX707 and its
first hypercar, the Aston Martin Valkyrie. Aligned with its Racing. Green.
sustainability strategy, Aston Martin is developing alternatives to the
Internal Combustion Engine with a blended drivetrain approach between 2025 and
2030, including PHEV and BEV, with a clear plan to have a line-up of electric
sports cars and SUVs.
Based in Gaydon, England, Aston Martin Lagonda designs, creates, and exports
cars which are sold in more than 50 countries around the world. Its sports
cars are manufactured in Gaydon with its luxury DBX707 SUV range proudly
manufactured in St Athan, Wales. The company is on track to deliver net-zero
manufacturing facilities by 2030.
Lagonda was founded in 1899 and came together with Aston Martin in 1947 when
both were purchased by the late Sir David Brown, and the company is now listed
on the London Stock Exchange as Aston Martin Lagonda Global Holdings plc.
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