REG - Aston Martin Lagonda - Final Results
01/03/2023 07:00
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RNS Number : 4204R Aston Martin Lagonda Glob.Hldgs PLC 01 March 2023
1 March 2023
Aston Martin Lagonda Global Holdings plc
Preliminary results for the 12 months to 31 December 2022
- FY 2022 results in-line with prior outlook, with strong Q4 performance
- FY 2022 revenue growth of 26%, driven by record total ASP of more than
£200k
- Strong demand across the portfolio; c.80% of current range GT/Sports
sold out for 2023 ahead of upcoming launches; DBX order book into Q3 2023
- Strong underlying year-on-year core gross margin progression, aligned with
ultra-luxury strategy
- Cash balance of £583m; net debt of £766m, despite £156m negative FX
impact
- 2023 Outlook: Wholesale volume growth to c.7,000, and up to c.20% adjusted
EBITDA margin
- On track to achieve 2024/25 financial targets
£m 31-Dec-22 31-Dec-21 % change Q4-22 Q4-21 % change
Total wholesales(1) 6,412 6,178 4% 2,352 1,928 22%
Revenue 1,381.5 1,095.3 26% 524.3 358.9 46%
Gross Profit 450.7 343.7 31% 164.5 121.8 35%
Adjusted EBITDA(2) 190.2 137.9 38% 110.4 65.6 68%
Adjusted operating (loss)/profit (2) (117.9) (74.3) (59%) 10.3 (9.2) n.m.
Operating (loss)/ profit (141.8) (76.5) (85%) 6.6 (8.3) n.m.
(Loss)/ Profit before tax (495.0) (213.8) (132%) 16.3 (25.2) n.m.
Net debt(2) (765.5) (891.6) 14% (765.5) (891.6) 14%
1. Number of vehicles including Specials; 2. For definition of alternative
performance measures please see Appendix
Financial Highlights
· Continued strong demand across all product lines with c.80% of
current range of GT/Sports cars sold out for 2023 ahead of upcoming launches
and DBX order book into Q3 2023
· Despite the impact of supply chain and logistics disruptions, most
notably in Q2 and Q3, wholesale volumes in 2022 grew in line with revised
range:
- Wholesale volumes increased by 4% year-on-year to 6,412 (2021: 6,178)
§ Volumes included more than 3,200 DBXs, driven by launch of the DBX707 which
represented more than 50% of overall DBX volumes
- Q4 wholesale volumes of 2,352 increased by 22% year-on-year (Q4 2021:
1,928)
· Revenue increased by 26% year-on-year to £1.4bn and Q4 revenue
increased by 46% year-on-year to £524m driven by:
- Strong pricing dynamics and favourable mix in the core portfolio:
§ FY 2022 core ASP of £177k, up 18% from £150k in FY 2021
§ Q4 2022 core ASP of £184k, up 21% from £152k in Q4 2021
- 80 Aston Martin Valkyrie programme deliveries during 2022, including 36 in
Q4
- Foreign exchange tailwinds for ASPs due to GBP weakness versus major
currencies
· Gross profit increased by 31% year-on-year to £451m (2021:
£344m) and gross margin increased to 33% (2021: 31%), reflecting improved
pricing and gross margin for core models, partially offset by the impact of
lower year-on-year gross margin within Specials. In addition, year-on-year
gross margin performance was impacted by approximately £20 million of supply
chain recovery costs incurred in the second half of the year
· Adjusted EBITDA increased by 38% year-on-year to £190m, primarily
driven by higher revenue and gross profit, partially offset by higher
operating expenses including reinvestments into brand, marketing and new
product launch activities, as well as inflationary impacts on general costs
· Operating loss of £142m included a £96m year-on-year increase in
depreciation and amortisation, primarily driven by higher year-on-year Aston
Martin Valkyrie programme deliveries and, to a lesser extent, by accelerated
amortisation of capitalised development costs ahead of the next generation of
sports car launches
· Loss before tax of £495m was materially impacted by a £156m
negative non-cash FX revaluation of US dollar-denominated debt as the GBP
weakened significantly against the US dollar during the year
· Net cash inflow from operating activities of £127m. Free cash
outflow 1 (#_ftn1) of £299m included:
- Capital expenditure of £287m, primarily related to new model development
including the next generation of sports cars
- Net cash interest payments of £139m
· Positive free cash flow in Q4 of £37m, driven by strong
profitability and cash inflows from working capital following the impact of
supply chain and logistics disruptions, earlier in the year
· Successfully completed $200m debt tender in October 2022
· Year-end cash of £583m (2021: £419m); Net debt of £766m (2021:
£892m), including a negative £156m impact of non-cash FX revaluation of US
dollar-denominated debt as the GBP weakened significantly against the US
dollar during the year
FY 2022 Operational Highlights
· Product development and launches continue at pace, with
breath-taking new products focused on ultra-luxury, high performance and
driving intensity:
- The critically-acclaimed DBX707, the most powerful luxury SUV on the
market, unveiled in February 2022. DBX707 represented more than 50% of total
DBX deliveries in 2022
- The V12 Vantage Coupe, an iconic finale and the only time a turbocharged
V12 engine has ever been fitted in a Vantage. All 333 units were sold before
the car's reveal in March, and deliveries started in Q2 2022
- The V12 Vantage Roadster, fusing ultimate performance with open-air
thrills. All 249 units sold-out following unveil at Pebble Beach, and
deliveries started in Q4 2022
- The stunning, two-seater, coach-built DBR22, an ultra-exclusive concept
limited to 22 units. Crowned Best of Show at the influential Chantilly Arts
et Élégance Richard Mille, all examples are sold, with deliveries expected
to start in 2023
- Development upgrades to hybrid supercar Valhalla showcased to customer
acclaim at Pebble Beach; more than 50% of the 999 vehicles already sold
New brand positioning and go-to-market strategy realising our iconic brand's
potential by elevating profile, increasing desire, driving awareness, and
raising customer demand
- Impactful new creative identity and Intensity. Driven. brand
positioning, supporting a >10% increase in sales leads, 10% increase in web
and configurator sessions, as well as heightened brand desirability
- More than 60% of customers placing orders in 2022 were new to the Aston
Martin brand
- Bold campaigns & optimised content strategy, including the
introduction to new platforms such as TikTok, delivering a >70% increase in
social media views and improved engagement
- New model launches, enhanced data management and customer targeting tools
driving a c.60% increase in dealership test drives
- Increasing brand salience and optimised digital user experience supporting
>60% increase in sales leads generated by award-winning online
configurator
- Aston Martin Aramco Cognizant Formula One(TM) Team continues to connect
the brand with engaged audience and raising consideration in key markets, with
Aston Martin's Formula One® global fanbase surpassing 150 million in 2022.
Research shows that >95% of US customers feel Aston Martin's presence in
F1®️ made them more likely to consider the brand
- More than 70% of Vantage F1®️ Edition owners are new to the Aston
Martin brand, further demonstrating the positive impact that Aston Martin's
global presence in the sport is having on its brand image and appeal to new
customers
· New leadership appointments and operational improvements to
support future growth:
- New executive appointments and internal promotions, including senior
leaders in engineering, commercial, procurement, human resources and
operational teams
- Changes to the organisational structure, including new operational
improvements, tailored to enhance future product launches and support
long-term growth with a focus on enhancing quality and driving overall
efficiencies
- Cross-functional structure established for the engineering organisation,
to enhance development of the next generation of high-performance and
electrified vehicles covering areas such as e-Powertrain, Software &
Electronics Technology, Infotainment, as well as Product & Component
Development
- Re-shaped and enhanced supply chain strategy, focused on building
long-term partnerships, to improve resilience and performance
· Deepening the integration of sustainability into our business and
improving our sustainability performance through our Racing. Green. strategy
- Working towards net-zero manufacturing facilities and a 30% reduction in
supply chain emissions by 2030 compared with 2020 levels
- In 2022 new targets were set to drive year-on-year improvements in our
sustainability performance including reducing CO(2) emissions and energy
intensity per car each year by 2.5%. In 2022 we reduced Scope 1 CO(2)
emissions by 3.9% per car compared to 2021
- In our manufacturing facilities in Gaydon and St Athan we continued our
commitments to only use renewable electricity. By 2025 we aim to achieve zero
single-use plastic packaging from our manufacturing facilities and to reduce
our water consumption by 15% compared with 2019 levels
- In 2022 we also enhanced our gender diversity goals with a target of 25%
women in leadership positions by 2025, rising to 30% by 2030
- In January 2023 we announced that we are increasing employment at our
Gaydon headquarters with the creation of more than 100 new skilled jobs in our
manufacturing factory to support the launch of our next generation of sports
cars
Lawrence Stroll, Aston Martin Lagonda Executive Chairman commented:
"2022 saw Aston Martin continue to build on the strong foundations that have
been established during my three years as Executive Chairman. While the last
12 months presented industry-wide challenges, we look to the future with
renewed confidence in our ability to deliver on our vision, and the targets we
have set.
"Despite the operating environment, we ended the year with significantly
improved growth, margin enhancement and positive free cash flow in Q4, exiting
2022 with the strongest order book in many years.
"2022 marked the start of a thrilling new product line-up, starting with the
critically acclaimed DBX707 - the most powerful luxury SUV in the world -
combining ultra-luxury with high performance and, crucially, with increased
profitability. The DBX707 was followed by V12 Vantage, the ultra-luxury DBR22
and, in early January of this year, the DBS 770 Ultimate - all fully sold out.
"The year saw us continue to strengthen our teams, led by Amedeo, with a focus
on innovation, execution and efficiency to support our longer-term growth.
Furthermore, we completed a significant £654 million equity capital raise,
which also saw the Public Investment Fund become a new anchor shareholder.
This enabled us to take action to deleverage our balance sheet and our target
remains to become sustainably free cash flow positive from 2024.
"We have made the biggest investment in our iconic brand through the launch of
a bold new creative strategy and brand position that aligns Aston Martin to
our future ambitions. Our high-performance DNA has been further amplified by
our partnership with the Aston Martin Aramco Cognizant Formula One (TM) team,
driving growing demand from a new generation of customers, with more than 60%
new to the brand.
"As I have said before, I knew it would take multiple years to build Aston
Martin into the world's most desirable ultra-luxury British performance brand.
With the heavy lifting behind us, we are now poised to see the results of this
transformation, starting in 2023. In addition to celebrating our 110(th)
anniversary and our exciting line up of Specials, it will also see the start
of our next generation of front-engine sports cars which will truly reposition
Aston Martin for the future.
"Over the last three years, I have consistently referenced our target to
deliver around £2bn of revenue and £500m of adjusted EBITDA by 2024/25. I am
extremely proud that given the strong progress we have made to transform Aston
Martin into a truly ultra-luxury business, demonstrated by the trajectory of
our ASP and gross margin, we are on track to meet these financial targets, but
with significantly lower volumes than I originally envisaged. In addition, I
remain highly confident that we will achieve our target to deliver 10,000
wholesales over the coming years, and with it, significantly enhanced
financial performance."
Amedeo Felisa, Aston Martin Lagonda Chief Executive Officer commented:
"Having navigated a challenging operating environment throughout 2022, I am
pleased with how we ended the year. We delivered in line with expectations,
took actions to address the short-term impacts of supply chain issues, and
continued to make progress in a number of key areas that will support our
ability to meet strong customer demand and deliver our growth ambitions.
"A top priority has been to improve our execution capabilities, leveraging my
experience and the exceptional talent we have to implement changes throughout
the organisation. This has included measures to address short-term issues,
such as the supply chain disruption on DBX707 deliveries, as well as more
structural changes to support future product launches, focused on innovation,
quality and overall efficiencies.
"We enter our 110(th) anniversary year ready to write a new chapter in our
proud history. Building on the strong product momentum we created in 2022,
this year will see us begin the transformation to our game-changing, next
generation of front-engine sports cars. This transition is also expected to
deliver significant improvements in profitability in the second half of the
year, with all new models continuing to target a 40%+ gross margin.
"I also want to thank our people for what we have achieved. They continue to
demonstrate an unwavering commitment and passion for our iconic company. At
the start of 2023, we introduced a new set of company values, grounded by the
powerful principle that 'No one builds an Aston Martin on their own'.
Combined with our iconic brand, the market opportunity, and our focus on
consistently executing our ultra-luxury strategy, I have great confidence in
Aston Martin delivering on our shared ambitions."
Outlook
We remain on our way to achieving our target of c.10,000 wholesales, aligned
with our ultra-luxury strategy. In addition, we are well on track to deliver
our medium-term financial targets of c.£2bn revenue and c.£500m adjusted
EBITDA in 2024/25.
For 2023 we expect to deliver significant growth in profitability compared to
2022, primarily driven by an increase in volumes and higher gross margin in
both Core and Special vehicles. More specifically, we expect significant
year-on-year growth and positive free cash flow in the second half of the
year.
For the first half of 2023, we expect our adjusted EBITDA and free cash flow
performance to be similar to the first half of 2022. This is driven by
expectations of strong year-on-year growth in DBX volumes, commencing the
transition of sports cars sales ahead of new launches later in the year, as
well as investments to support our future growth.
Within the first half of 2023, we expect broadly similar free cash flow
outcomes between Q1 2023 and Q2 2023 driven by the expected phasing of
deliveries, capital expenditure and working capital dynamics in Q1 2023, and
the timing of cash interest payments related to our Senior Secured Notes in Q2
2023.
The second half of 2023 is expected to see delivery of a number of new
products across the Core and Specials ranges, all with improved profitability.
In addition to the ramp up of the already sold-out DBS 770 Ultimate, we expect
deliveries of the first of our next generation of sports cars to commence in
Q3.
Within Specials, we plan to commence deliveries of the sold-out Aston Martin
Valkyrie Spider and the ultra-luxury DBR22 in the second half of the year.
Finally, and in conjunction with our historic 110(th) anniversary, we plan to
launch a new, strictly limited, exclusive Aston Martin model, with deliveries
commencing in Q4.
We expect to increase investment in brand and new product launch activities
during the year. This will also allow us to continue to elevate our
ultra-luxury performance brand positioning and to support the acceleration of
our longer-term growth.
Although the operating environment remains volatile, including ongoing
inflationary pressures and pockets of supply chain disruptions, our teams
continue to work in partnership with our suppliers to mitigate any impact on
our performance in 2023.
Capital expenditure is expected to increase year-on-year, primarily driven by:
- a rephasing of deferred spend from 2022,
- the impact of significantly higher year-on-year inflation,
- incremental investments related to the new, strictly limited, exclusive
Aston Martin model referenced above, which will accelerate our growth in Q4
and into 2024
- increasing investments in our electrified portfolio, alongside the final
year of significant expenditure associated with our Internal Combustion Engine
(ICE) portfolio
We expect 2023 to be the peak year of capital expenditure, with capital
expenditure readjusting from next year to support both the development and the
delivery of our future product range, as well as our target of becoming
sustainably free cash flow positive from 2024.
2023 guidance:
· Wholesales: year-on-year growth to c.7,000 units
· Adjusted EBITDA margin: year-on-year expansion, up to c.20%
adjusted EBITDA margin
· Capex and R&D: c.£370m
· Depreciation and amortisation: c.£350m-£370m
· Interest costs: c.£120m (cash) assuming current exchange rates
prevail for 2023
Enquiries
Investors and Analysts
Sherief Bakr Director of Investor Relations +44 (0)7789 177547
sherief.bakr@astonmartin.com (mailto:sherief.bakr@astonmartin.com)
Holly Grainger Deputy Head of Investor Relations +44 (0)7442 989551
holly.grainger@astonmartin.com (mailto:holly.grainger@astonmartin.com)
Media
Kevin Watters Director of Communications +44 (0)7764 386683
kevin.watters@astonmartin.com (mailto:kevin.watters@astonmartin.com)
Paul Garbett Head of Corporate and Brand Communications +44 (0)7501 380799
paul.garbett@astonmartin.com (mailto:paul.garbett@astonmartin.com)
Grace Barnie Corporate Communications Manager +44 (0)7880 903490
grace.barnie@astonmartin.com (mailto:grace.barnie@astonmartin.com)
Tulchan Communications
Harry Cameron and Simon Pilkington +44 (0)20 73534200
· Recorded presentations accompanying this release from Lawrence
Stroll, Amedeo Felisa and Doug Lafferty are available on the corporate website
from 07.00am GMT today; there will be a live Q&A for investors and
analysts at 08:30am GMT
· Presentations and the Q&A can be accessed here:
www.astonmartinlagonda.com/investors/calendar
· 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.
BUSINESS REVIEW
2022 saw Aston Martin continue to execute in a number of key areas on its
journey to become the world's most desirable ultra-luxury British performance
brand. This included the introduction of a new line of breath-taking products
with strong consumer desirability and enhanced profitability, establishing a
bold new creative identity for the Company's iconic brand, significantly
enhancing its in-house engineering and operational expertise, as well as
completing a strategic equity capital raise.
In addition, the Company continued to strengthen its leadership team with new
executive appointments across the organisation and, in conjunction with the
110(th) anniversary of Aston Martin in 2023, introduced new Company values
grounded on the principle that 'No one builds an Aston Martin on their own'.
Despite a challenging operating environment throughout the year, including
supply chain and logistics disruptions which limited the Company's ability to
meet strong customer demand, as well as inflationary pressures, it ended 2022
well positioned to deliver on its medium-term financial targets.
Delivering thrilling new products
Building on the strong momentum from its new introductions in 2021, the
Company accelerated the transformation of its portfolio during 2022, combining
ultra-luxury with high performance and improved profitability.
In Q1 the DBX707, the most powerful luxury SUV on the market, was unveiled.
Building on the success of the DBX, Aston Martin's first SUV, the DBX707
elevated the Company's positioning and attractiveness to the pinnacle of the
SUV segment. Deliveries of the DBX707 commenced in Q2 to extensive media
acclaim and strong customer demand, and the DBX707 represented more than 50%
of overall DBX volumes in 2022.
This was quickly followed with the introduction of the new V12 Vantage Coupe
in March, the final edition of an iconic bloodline, which enjoyed
unprecedented demand with all 333 units sold ahead of its release.
At the Pebble Beach Concours d'Elegance, the Company introduced two new models
- the V12 Vantage Roadster and the ultra-exclusive DBR22 - and shared the
latest development updates to its hybrid supercar, Valhalla. All 249 units
of the V12 Vantage Roadster, which combines the thrilling performance of the
most powerful Aston Martin Vantage ever made with the freedom and sensory
stimulation of roof-down driving, were sold out ahead of its unveiling. The
DBR22, a spectacular V12-engined two-seater coach-built design concept, was
declared Best of Show at the influential Chantilly Arts et Élégance Richard
Mille. Priced at £1.75m and with the orderbook closed, deliveries are
expected to start in 2023.
2023, Aston Martin's 110(th) anniversary, promises to be a monumental year, as
the Company prepares to unleash the start of its highly anticipated next
generation sports cars, which will further enhance Aston Martin's focus on
ultra-luxury, high-performance and driving intensity. Ahead of this, and with
production of the current generation DBS nearing its end, the Company
introduced its most powerful production Aston Martin ever. The
limited-edition DBS 770 Ultimate launched in January 2023 in both Coupe and
Volante form. All 499 examples are sold out, with deliveries scheduled to
begin in Q3 2023.
Brand repositioning and new iconic wings logo
In July 2022, the Company launched a bold new creative brand strategy and
global marketing campaign to further accelerate its growth amongst new
audiences.
Celebrating the Company's position as makers of the most exquisitely addictive
performance cars and centred on the brand idea Intensity. Driven. the
creative identity builds on Aston Martin's strong, established reputation for
combining luxurious craftsmanship and sophisticated design with high-octane
emotion and intense driving pleasure, as defined by breath-taking new models
such as DBX707, V12 Vantage and the uncompromising Aston Martin Valkyrie.
The strategic repositioning is the largest investment in Aston Martin's brand
for more than a decade and strengthens its position at the pinnacle of the
performance ultra-luxury segment. It builds on Aston Martin's growing appeal
to a wider, affluent global audience strategically targeted by the brand,
whilst underpinning its core values.
In addition to the new visual and verbal expression, the radical redesign
includes a contemporary update to the iconic wings, created by the
manufacturer's world-renowned design function in collaboration with acclaimed
British art director and graphic designer Peter Saville.
· 48.8 million online impressions generated for new Intensity.
Driven. brand campaign
· More than 1.1million website sessions throughout August 2022 - the
busiest month of traffic since the brand's return to Formula One® in March
2021
Enhancing innovation and operational capabilities to support future growth
The Company continued to add key talent across the organisation, with new
executive management appointments as well as new senior leaders in its
engineering, commercial, procurement, human resources and operational teams.
In addition to the appointments of Amedeo Felisa as the new Chief Executive
Officer and Doug Lafferty as the new Chief Financial Officer, the Company
announced the additions of Simon Smith as the new Chief People Officer and
Roberto Fedeli as the new Group Chief Technology Officer.
Aligned with the Company's plans to globalise its brand and increase its share
of key strategic markets, regional leadership has also been reinforced with
the appointment of new, experienced regional presidents in the Americas, Asia
and Europe.
A former CEO of Ferrari, Amedeo is one of the most highly regarded leaders and
engineering professionals in the high-performance luxury sports car sector. In
conjunction with Amedeo's appointment in May, the Company implemented a number
of changes to its organisational structure, including new ways of working, to
enhance its operational capabilities - all aligned to support future growth.
This included a new cross-functional structure for its engineering
organisation to enhance the development of its next generation of
high-performance vehicles, and expanding its in-house engineering capabilities
covering areas such as e-Powertrain, Software and Electronics Technology,
Infotainment, as well as Product and Component Development.
Consistent with the Company's ongoing focus on operational excellence, new
initiatives and processes were implemented with key functional capabilities
strengthened. For example, a new supplier strategy, focused on building
long-term partnerships, was developed over the course of the year to improve
supply chain resilience and performance. In addition, new processes were
implemented to support future product launches, with a focus on improving
quality and driving overall efficiencies.
Investing in people and their career development will continue to shape Aston
Martin's future. This includes supporting and developing the next generation
of British talent and skills. Over the course of the year, the Company renewed
its commitment to making Aston Martin a great place to work, with a focus on
fostering a spirit of collaboration. At the start of 2023, the Company
introduced a new set of values, grounded by the principle that 'No one builds
an Aston Martin on their own'.
Equity capital raise, new anchor shareholder and Board appointments
In July, the Company announced a £654m equity capital raise to strengthen its
financial position and enhance its pathway for significant shareholder value
creation. The equity capital raise, successfully completed in September, has
allowed the Company to de-lever its balance sheet, and supports its target to
become sustainably free cash flow positive from 2024. In October, the Company
successfully completed a tender offer for a total consideration of $200m
relating to its outstanding Senior Secured Notes.
In conjunction with the equity capital raise, the Public Investment Fund (PIF)
became a new anchor investor and the Company's second largest shareholder. A
Relationship Agreement was entered into between the Company and PIF, whereby
Ahmed Al-Subaey and Scott Robertson were appointed to the Board as PIF's
representative Non-executive Directors with effect from 1 November 2023. The
Company also appointed Sir Nigel Boardman as an Independent Non-executive
Director with effect from 1 October 2022.
Making sustainability central to everything we do
In 2022 the Company accelerated progress towards the goals in its
sustainability strategy Racing. Green' and its updated targets now include:
· Carbon Neutral manufacturing facilities
· 100% use of renewable electricity in its manufacturing facilities
· A new goal to achieve a 2.5% year-on-year reduction in CO(2)
emissions from its manufacturing facilities*
· A new goal to reduce CO(2) emissions intensity and energy
consumption per car by 2.5% year on year*
· Enhancing its gender diversity aspiration with a new target of
women in 25% of leadership positions by 2025 and in 30% of leadership
positions by 2030
· A new target to improve biodiversity at its manufacturing
facilities
*Scope 1 CO(2) emissions
Reducing CO(2) emissions from the Company's products, manufacturing processes
and wider supply chain remains a top priority. Our first PHEV, the Valhalla,
commences delivery in 2024, followed by the first BEV which is targeted for
launch in 2025 and a fully electrified GT/Sport and SUV portfolio by 2030.
Aston Martin's company-wide EV Transformation Programme is equipping its
people, changing its processes, and reshaping the organisation for a new
electrified, lower carbon future. Sustainability is also increasingly embedded
throughout the vehicle design process, and the Company is intensifying its
focus on optimising the materials used, as well as increasing its focus on the
use of materials which are low carbon, sustainably sourced and recycled.
The Company continues to implement projects which will help make its
manufacturing facilities net-zero by 2030 and work on reducing CO(2) emissions
from the supply chain is gaining momentum as the Company aims for net-zero
across its supply chain by 2039. Successfully reducing emissions across the
entire supply chain will require strong collaboration, with all supply chain
partners playing their part.
With a focus going beyond climate change, the Company is working
collaboratively with suppliers to achieve the target of zero single-use
plastic packaging waste by 2025. Investment in water saving technologies in
2022 will save 1 million litres of water annually from staff facilities, as
the Company strives to reduce total water consumption by 15% by 2025, compared
with 2019 levels.
No one builds an Aston Martin on their own. People are at the heart of the
success of the business and over the last year, the Company has invested in a
commitment to make Aston Martin a great and inclusive place to work. This
includes a new safety training programme and further improvements to safety
management systems as the Company continues to strive for zero injuries and
zero harm. The last year has also seen further emphasis on increasing
diversity and championing inclusivity at Aston Martin. This includes an
enhanced target for women to be in 25% of leadership positions by 2025 and 30%
by 2030, compared with 15% currently. During 2022 the Company welcomed new
apprentices and graduate trainees, strengthening the talent it continues to
develop at every level of the business.
All of the Company's work on sustainability is guided by its support for the
Ten Principles of the United Nations Global Compact in the areas of Human
Rights, Labour, Environment and Anti-Corruption. It is also underpinned by a
broad commitment to delivering the highest standards, with strategic oversight
provided by the Board Sustainability Committee. Throughout 2022, the Company
maintained this commitment by continuing to focus on compliance with its legal
and regulatory obligations as well as embracing sustainability best practices.
Aston Martin's sustainability strategy is helping to shape its
transformation as it takes action to turn aspirations into reality, making
sustainability central to everything it does. In some areas more will need to
be done to accelerate progress, but by continuing to intensify the focus on
delivery, the Company will achieve its ambition: to become a world-leading
sustainable ultra-luxury automotive business.
FINANCIAL REVIEW
Sales and revenue analysis
Number of vehicles FY-22 FY-21 % change Q4-22 Q4-21 % change
Wholesale 6,412 6,178 4% 2,352 1,928 22%
Core (excluding Specials) 6,323 6,080 4% 2,313 1,886 23%
By region:
UK 1,110 1,109 0% 416 381 9%
Americas 1,980 1,984 0% 828 546 52%
EMEA (ex. UK) 1,508 1,270 19% 723 372 94%
APAC 1,814 1,815 0% 385 629 (39%)
By model:
Sports 1,833 1,479 24% 614 520 18%
GT 1,271 1,589 (20%) 306 546 (44%)
SUV 3,219 3,001 7% 1,393 815 71%
Other 0 11 n.m. 0 5 n.m.
Specials 89 98 (9%) 39 42 (7%)
Note: Sports includes Vantage, GT includes DB11 and DBS, SUV includes DBX and
Other includes prior generation models
Despite a challenging and uncertain operating environment, characterised by
the war in Ukraine, supply chain and logistics disruptions, inflationary
pressures, as well as intermittent COVID-19 lockdowns in China, total
wholesales increased by 4% year-on-year, driven by strong demand across the
portfolio.
Total wholesales of 6,412 units included 89 Specials in 2022, comprised of 80
Aston Martin Valkyrie programme vehicles and 9 other vehicles. This compared
to 6,178 total wholesales, which included 98 Specials, in 2021.
Given significant supply chain and logistics disruptions, most notably in Q2
and Q3, which delayed the Company's ability to meet customer demand, the
fourth quarter represented the peak of volumes for the year, as expected.
Total wholesales of 2,352 units in Q4 increased by 70% compared to Q3 and by
22% year-on-year. The year-on-year growth in Q4 wholesales was primarily
driven by significantly higher DBX volumes, supported by strong customer
demand and strong operational execution, as the Company actively managed the
supply chain and logistics disruptions which had restricted its ability to
meet demand earlier in the year. This was partially offset by lower
year-on-year wholesales in China, following the strong growth achieved in Q4
2021 and, to a lesser extent, by the COVID-19 lockdowns during the quarter.
Aligned with its ultra-luxury strategy, the Company continues to operate a
demand-led operating model. However, given the timing of deliveries towards
the end of Q4, total wholesale volumes were temporarily ahead of retail
volumes at the end of 2022. Many of those vehicles were retailed in early Q1,
and the Company expects to see retails outpace wholesales in 2023.
Geographically, wholesale volumes remained well balanced across all regions,
reflecting the broad customer appeal of the Company's product portfolio. In
addition, supply chain disruptions throughout the year, most notably in Q2 and
Q3, impacted our geographic and product mix, as well as our ability to meet
strong customer demand.
The Americas and APAC were the largest regions, collectively representing
approximately 60% of total volumes. Despite geopolitical challenges, EMEA
wholesales increased by 19% year-on-year, driven by strong customer demand for
the DBX707 and higher year-on-year Sports volumes.
Revenue by Category
£m FY-22 FY-21 % change
Sale of vehicles 1,291.5 1,005.4 28%
Sale of parts 70.8 65.5 8%
Servicing of vehicles 9.3 10.6 (12%)
Brand and motorsport 9.9 13.8 (28%)
Total 1,381.5 1,095.3 26%
Revenues increased by 26% year-on-year to £1.4bn (2021: £1.1bn), primarily
due to strong wholesale average selling price (ASP) growth and, to a lesser
extent, due to higher wholesale volumes. Total ASP of £201k (2021: £162k) -
a record level for Aston Martin - increased by 24% year-on-year, reflecting
higher Aston Martin Valkyrie deliveries (80 in 2022, compared to 10 in 2021)
and higher core ASPs. Core ASP of £177k (2021: £150k) increased by 18%
year-on-year driven by strong pricing and mix dynamics, as well as foreign
exchange tailwinds.
Q4 revenues increased by 46% year-on-year to £524m (Q4 2021: £359m), driven
by strong ASP growth and higher wholesale volumes, most notably DBX. Total Q4
ASP of £213k (Q4 2021: £175k) increased by 22% year-on-year, reflecting
higher Aston Martin Valkyrie deliveries (36 in Q4 2022, compared to 10 in Q4
2021) and higher core ASPs. Core Q4 ASP of £184k (Q4 2021: £152k) increased
by 21% year-on-year driven by strong pricing and mix dynamics, as well as
foreign exchange tailwinds.
Pricing dynamics were strong throughout 2022, aligned with the Company's
ultra-luxury strategy. This included price increases implemented across the
range during late 2021 and in the first half of 2022, reflecting the strong
pricing power of the Aston Martin brand. ASPs also benefitted from favourable
mix, as well as lower incentive support.
( )
Summary income statement and analysis
£m FY-22 FY-21 Q4-22 Q4-21
Revenue 1,381.5 1,095.3 524.3 358.9
Cost of sales (930.8) (751.6) (359.8) (237.1)
Gross profit 450.7 343.7 164.5 121.8
Gross margin % 32.6% 31.4% 31.4% 33.9%
Operating expenses(1) (568.6) (418.0) (154.2) (131.0)
of which depreciation & amortisation 308.1 212.2 100.1 74.8
Adjusted operating (loss)/ profit(2) (117.9) (74.3) 10.3 (9.2)
Adjusting operating items (23.9) (2.2) (3.7) 0.9
Operating (loss)/ profit (141.8) (76.5) 6.6 (8.3)
Net financing (expense)/income (353.2) (137.3) 9.7 (16.9)
of which adjusting financing items (20.1) 34.1 (39.1) 21.2
(Loss)/profit before tax (495.0) (213.8) 16.3 (25.2)
Taxation (32.7) 24.5 (26.0) (7.5)
(Loss)/profit for the period (527.7) (189.3) (9.7) (32.7)
Adjusted EBITDA(1,2) 190.2 137.9 110.4 65.6
Adjusted EBITDA margin 13.8% 12.6% 21.1% 18.3%
Adjusted (loss)/profit before tax(1) (451.0) (245.7) 59.1 (47.3)
EPS (pence) (124.5) (58.6)
Adjusted EPS (pence) (2) (114.1) (70.9)
1. Excludes adjusting items; 2. For definition of alternative performance
measures please see Appendix
In 2022, gross profit of £451m increased by £107m, or 31%, year-on-year.
This translated to a gross margin of 33%, a year-on-year expansion of
approximately 120 basis points. The gross margin expansion was primarily due
to higher year-on-year gross margin within the core range of vehicles,
supported by the introduction of new products - most notably the V12 Vantage
and DBX707 - as well as foreign exchange tailwinds.
This was partially offset by lower year-on-year gross margin within Specials
driven by higher Aston Martin Valkyrie programme deliveries related to Nebula
Project AG during 2022. As disclosed on 22 June 2021, the Company has filed
for civil legal proceedings against Nebula Project AG and criminal proceedings
against its board members, after it became aware that Nebula had taken
deposits from its customers and failed to pass them on to the Company. Aston
Martin has continued to work with its affected customers to ensure they
receive their Aston Martin Valkyrie vehicles despite Nebula's actions.
In addition, year-on-year gross margin was negatively impacted by higher
supply chain and logistics costs, including approximately £20m of incremental
supply chain recovery costs in the second half of the year.
Q4 gross profit of £165m increased by £43m, or 35%, year-on-year. This
translated to a gross margin of 31%, a decline of approximately 250 basis
points year-on-year, as lower gross margin within Specials and higher
manufacturing and logistics costs were partially offset by higher year-on-year
gross margin from the core range of vehicles and, to a lesser extent, from
higher overall core volumes.
The Company continues to target a 40%+ gross margin from its future products.
In 2022, adjusted EBITDA of £190m increased by £52m year-on-year, or by 38%.
This translated to an adjusted EBITDA margin of 14%, an increase of
approximately 120 basis points compared to the prior year and within the
revised guidance range of approximately 100-300 basis points of year-on-year
margin expansion.
Q4 adjusted EBITDA of £110m increased by £45m year-on-year, or by 68%. This
translated to an adjusted EBITDA margin of 21%, an increase of approximately
280 basis points compared to the prior year period, driven by strong operating
leverage.
The operating loss of £142m compared to a £77m loss in the prior year. The
£65m year-on-year change was primarily driven by:
- A £96m increase in depreciation and amortisation charges, principally
related to Aston Martin Valkyrie deliveries and accelerated depreciation ahead
of the next generation of sports cars starting in 2023
- Increased investment in brand and product launches such as the DBX707, V12
Vantage and Valhalla, marketing initiatives at events such as the Goodwood
Festival of Speed and Pebble Beach
- Higher general costs, including inflationary pressures, to support the
Company's future growth
These factors were partially offset by:
- Higher year-on-year gross profit, as described above, which included a
£31m benefit to operating profit from exchange rate movements
Adjusting operating items of £24m (2021: £2m) predominantly related to the
closure to future accrual of the pension scheme disclosed at the Full Year
2021 results, ERP implementation costs, as well as one-time expenses related
to the change of CEO and appointment of other new executives.
Net adjusted financing costs of £333m increased significantly from £171m in
the prior year, reflecting the revaluation of the US dollar-denominated Senior
Secured Notes giving a non-cash FX charge of £156m (2021 included a £12m FX
charge). The £20m adjusting finance charge related to costs associated with
the equity capital raise and debt tender, partially offset by the fair value
movements of outstanding warrants (2021: £34m adjusting finance credit).
The loss before tax was £495m (2021: £214m loss) and the loss for the period
was £528m (2021: £189m loss), both significantly impacted by the revaluation
of the US dollar-denominated Senior Secured Notes.
The tax charge on the adjusted loss before tax was £33m. The effective tax
rate at (7.3)% differs from the 19% standard UK tax rate mainly due to
movements in unprovided deferred tax and derecognition of deferred tax related
to losses, accelerated capital allowances and a restriction on the amount of
interest that can be deducted for tax purposes. Tax on adjusting items was
nil as a result of the unprovided deferred tax.
The total share count at 31 December 2022 was 699 million following the
placing of new ordinary shares to PIF, as well as the 4-for-1 rights issue
completed in September 2022. The weighted average number of shares in 2022 was
425 million. 28.8 million shares in relation to the warrants remain
outstanding and are exercisable until December 2027.
The Company is embedding the first tranche of technology from Mercedes-Benz AG
into its product renewal and expansion pipeline. There are currently no plans
to issue additional shares to Mercedes-Benz AG during 2023.
( )
Cash flow and net debt
£m FY-22 FY-21 Q4-22 Q4-21
Cash generated from operating activities 127.1 178.9 184.0 27.5
Cash used in investing activities (excl. interest) (286.9) (185.2) (73.5) (49.0)
Net cash interest paid (139.0) (116.9) (73.7) (62.6)
Free Cash (outflow)/inflow (298.8) (123.2) 36.8 (84.1)
Cash inflow/(outflow) from financing activities (excl. interest) 456.2 51.5 (210.5) 7.5
Increase/(decrease) in net cash 157.4 (71.7) (173.7) (76.6)
Effect of exchange rates on cash and cash equivalents 7.0 1.2 (14.8) 0.3
Cash balance 583.3 418.9 583.3 418.9
Net cash inflow from operating activities was £127m (2021: £179m). The
year-on-year change in cash flow from operating activities was primarily due
to adverse movements in working capital. Cash flow from operating activities
in 2022 included a £15m outflow related to movements in working capital,
compared with a £56m inflow in 2021. The largest movement in 2022 was a £82m
increase in trade and other payables, principally associated with higher
accruals related to future product rollout plans, which was partially offset
by a £78m increase in inventories, which was significantly impacted by supply
chain and logistics disruptions, most notably in Q2 and Q3.
Demand for Specials remained strong throughout the year, with deposit intake
for Valhalla and the Aston Martin Valkyrie Spider. However, this was offset by
higher deliveries of Aston Martin Valkyrie programme vehicles, resulting in a
net £18m outflow from deposits during the year.
As expected, the Company generated a significant improvement in cash flow from
operating activities in Q4, driven by a combination of strong profitability
and cash inflows from working capital. Cash inflow from operating activities
was £184m in Q4 (Q4 2021: £28m).
Capital expenditure was £287m in 2022, an increase of £102m year-on-year,
with investment focused on the future product pipeline, particularly the next
generation of sports cars, as well as development of the Company's
electrification programme.
Free cash was a net outflow of £299m, compared to a £123m outflow in 2021.
This was primarily due to the year-on-year increase in capital expenditure, as
well as the changes in working capital-related cashflows described above.
Cash inflow from financing (excluding interest) of £456m (2021: £52m)
included £654m of gross proceeds from the equity capital raise, partially
offset by a £187m net cash outflow related to the $200m debt tender, which
was completed in Q4.
Net cash inflow of £157m resulted in a closing cash balance of £583m as at
31 December 2022 (31 December 2021: £419m). Net debt of £766m, a £126m
reduction from £892m at the end of 2021, included a £156m negative impact of
non-cash FX revaluation of US dollar-denominated debt as the pound weakened
against the US dollar during the year.
£m 31 Dec-22 31 Dec-21
Loan Notes(1) (1,104.0) (1,074.9)
Inventory financing (38.2) (19.7)
Bank loans and overdrafts (107.1) (114.3)
Lease liabilities (IFRS 16) (99.8) (103.4)
Gross debt (1,349.1) (1,312.3)
Cash balance 583.3 418.9
Cash not available for short-term use 0.3 1.8
Net debt (765.5) (891.6)
1 US$ notes of £1.1bn equivalent (First Lien of £935m at 10.5% interest
maturing in November 2025; Second Lien of £169m at 15.0% split interest (8.9%
cash; 6.1% PIK) with detachable warrants maturing in November 2026). These
instruments carry no-call options of two years for the Second Lien and three
years for the First Lien.
APPENDICES
Dealerships
31 Dec-22 31 Dec-21
UK 21 22
Americas 44 44
EMEA ex. UK 52 53
APAC 48 49
Total 165 168
Number of countries 54 56
Alternative Performance Measure
£m FY-22 FY-21
Loss before tax (495.0) (213.8)
Adjusting operating expense 23.9 2.2
Adjusting finance income (12.5) (34.1)
Adjusting finance expense 32.6 -
Adjusted EBT (451.0) (245.7)
Adjusted finance income (3.0) (2.3)
Adjusted finance expense 336.1 173.7
Adjusted operating loss (117.9) (74.3)
Reported depreciation 88.8 74.6
Reported amortisation 219.3 137.6
Adjusted EBITDA 190.2 137.9
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 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 operating loss
· Adjusted EBITDA margin is adjusted EBITDA (as defined above)
divided by revenue
· Adjusted EBT is the loss before tax and adjusting items as shown
in the Consolidated Income Statement
· 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
· Free cashflow is represented by cash (outflow)/inflow from
operating activities less the cash used in investing activities (excluding
interest received) plus interest paid in the year less interest received.
Further details and definitions of adjusting items are contained in note 5 of
the Financial Statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER
2022
2022 2021
Notes Adjusted Adjusting Total Adjusted Adjusting Total
£m items* £m £m items* £m
£m £m
Revenue 3 1,381.5 - 1,381.5 1,095.3 - 1,095.3
Cost of sales (930.8) - (930.8) (751.6) - (751.6)
Gross profit 450.7 - 450.7 343.7 - 343.7
Selling and distribution expenses (113.0) - (113.0) (84.8) - (84.8)
Administrative and other operating expenses (455.6) (23.9) (479.5) (333.2) (2.2) (335.4)
Operating loss 4 (117.9) (23.9) (141.8) (74.3) (2.2) (76.5)
Finance income 6 3.0 12.5 15.5 2.3 34.1 36.4
Finance expense 7 (336.1) (32.6) (368.7) (173.7) - (173.7)
Loss before tax (451.0) (44.0) (495.0) (245.7) 31.9 (213.8)
Income tax (charge)/credit 8 (32.7) - (32.7) 16.2 8.3 24.5
Loss for the year (483.7) (44.0) (527.7) (229.5) 40.2 (189.3)
(Loss)/profit attributable to:
Owners of the Group (528.6) (191.6)
Non-controlling interests 0.9 2.3
(527.7) (189.3)
Other comprehensive income
Items that will never be reclassified to the Income Statement
Remeasurement of Defined Benefit liability 6.8 3.8
Taxation on items that will never be reclassified to the Income Statement 8 (1.7) (1.0)
Effect of change in rate in taxation 8 - 6.0
Items that are or may be reclassified to the Income Statement
Foreign currency translation differences 3.8 2.3
Fair value adjustment - cash flow hedges (6.1) (0.3)
Amounts reclassified to the Income Statement - cash flow hedges 2.9 (4.3)
Taxation on items that may be reclassified to the Income Statement 8 0.8 1.2
Other comprehensive income for the year, net of income tax 6.5 7.7
Total comprehensive loss for the year (521.2) (181.6)
Total comprehensive (loss)/income for the year attributable to:
Owners of the Group (522.1) (183.9)
Non-controlling interests 0.9 2.3
(521.2) (181.6)
Earnings per ordinary share Restated**
Basic loss per share 9 (124.5p) (58.6p)
Diluted loss per share 9 (124.5p) (58.6p)
All operations of the Group are continuing.
* Adjusting items are defined in note 2 with further detail shown in
note 5.
** Earnings per ordinary share has been adjusted to reflect the bonus
element of the rights issue undertaken in September 2022. See notes 9 and 12.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Group Share Share premium Merger reserve Capital redemption reserve Capital reserve Translation reserve Hedge reserves Retained earnings Non-controlling interest Total
capital £m £m £m £m £m £m £m £m equity
£m £m
At 1 January 2022 11.6 1,123.4 143.9 9.3 6.6 2.7 6.7 (662.4) 18.6 660.4
Total comprehensive loss for the year
(Loss)/profit for the year - - - - - - - (528.6) 0.9 (527.7)
Other comprehensive income
Foreign currency translation differences - - - - - 3.8 - - - 3.8
Fair value movement - cash flow hedges - - - - - - (6.1) - - (6.1)
Amounts reclassified to the Income Statement - cash flow hedges - - - - - - 2.9 - - 2.9
Remeasurement of Defined Benefit liability - - - - - - - 6.8 - 6.8
Tax on other comprehensive income (note 8) - - - - - - 0.8 (1.7) - (0.9)
Total other comprehensive income/(loss) - - - - - 3.8 (2.4) 5.1 - 6.5
Total comprehensive income/(loss) for the year - - - - - 3.8 (2.4) (523.5) 0.9 (521.2)
Transactions with owners, recorded directly in equity
Issuance of new shares (note 11) 58.3 574.0 - - - - - - - 632.3
Credit for the year under equity-settled share-based payments - - - - - - - 1.0 - 1.0
Tax on items credited to equity - - - - - - - - - -
Total transactions with owners 58.3 574.0 - - - - - 1.0 - 633.3
At 31 December 2022 69.9 1,697.4 143.9 9.3 6.6 6.5 4.3 (1,184.9) 19.5 772.5
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONTINUED
Group Share Share premium Merger reserve Capital redemption reserve Capital reserve Translation reserve Hedge reserves Retained earnings Non-controlling interest Total
capital £m £m £m £m £m £m £m £m equity
£m £m
At 1 January 2021 11.5 1,108.2 144.0 9.3 6.6 0.4 10.9 (503.1) 16.3 804.1
Total comprehensive loss for the year
(Loss)/profit for the year - - - - - - - (191.6) 2.3 (189.3)
Other comprehensive income
Foreign currency translation differences - - - - - 2.3 - - - 2.3
Fair value movement - cash flow hedges - - - - - - (0.3) - - (0.3)
Amounts reclassified to the Income Statement - cash flow hedges - - - - - - (4.3) - - (4.3)
Remeasurement of Defined Benefit liability - - - - - - - 3.8 - 3.8
Effect of change in rate of taxation (note 8) - - - - - - (0.8) 6.8 - 6.0
Tax on other comprehensive income (note 8) - - - - - - 1.2 (1.0) - 0.2
Total other comprehensive income/(loss) - - - - - 2.3 (4.2) 9.6 - 7.7
Total comprehensive income/(loss) for the year - - - - - 2.3 (4.2) (182.0) 2.3 (181.6)
Transactions with owners, recorded directly in equity
Warrant options exercised (note 11) 0.1 15.1 - - - - - 14.8 - 30.0
Credit for the year under equity-settled share-based payments - - - - - - - 3.1 3.1
Effect of change in rate of taxation (note 8) - - - - - - - 4.7 - 4.7
Tax on items credited to equity (note 8) - - - - - - - 0.1 - 0.1
Reclassification (note 11) - 0.1 (0.1) - - - - - - -
Total transactions with owners 0.1 15.2 (0.1) - - - - 22.7 - 37.9
At 31 December 2021 11.6 1,123.4 143.9 9.3 6.6 2.7 6.7 (662.4) 18.6 660.4
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2022
Notes 31 December 2022 31 December 2021
£m £m
Non-current assets
Intangible assets 1,394.6 1,384.1
Property, plant and equipment 369.9 355.5
Right-of-use lease assets 74.4 76.0
Trade and other receivables 6.3 2.1
Other financial assets - 0.5
Deferred tax asset 8 133.7 156.4
1,978.9 1,974.6
Current assets
Inventories 286.2 196.8
Trade and other receivables 245.7 243.4
Income tax receivable 1.4 1.5
Other financial assets 8.8 7.3
Cash and cash equivalents 583.3 418.9
1,125.4 867.9
Total assets 3,104.3 2,842.5
Current liabilities
Borrowings 107.1 114.3
Trade and other payables 876.3 721.0
Income tax payable 6.3 5.5
Other financial liabilities 26.2 34.8
Lease liabilities 7.4 9.7
Provisions 18.6 19.9
1,041.9 905.2
Non-current liabilities
Borrowings 1,104.0 1,074.9
Trade and other payables 9.1 9.8
Lease liabilities 92.4 93.7
Provisions 22.5 19.0
Employee benefits 61.2 78.7
Deferred tax liabilities 8 0.7 0.8
1,289.9 1,276.9
Total liabilities 2,331.8 2,182.1
Net assets 772.5 660.4
Capital and reserves
Share capital 11 69.9 11.6
Share premium 1,697.4 1,123.4
Merger reserve 143.9 143.9
Capital redemption reserve 9.3 9.3
Capital reserve 6.6 6.6
Translation reserve 6.5 2.7
Hedge reserves 4.3 6.7
Retained earnings (1,184.9) (662.4)
Equity attributable to owners of the Group 753.0 641.8
Non-controlling interests 19.5 18.6
Total shareholders' equity 772.5 660.4
The Financial Statements were approved by the Board of Directors on 28
February 2023 and were signed on its behalf by
AMEDEO
FELISA
DOUG LAFFERTY
CHIEF EXECUTIVE
OFFICER
CHIEF FINANCIAL OFFICER
COMPANY NUMBER: 11488166
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2022
Notes 2022 2021
£m £m
Operating activities
Loss for the year (527.7) (189.3)
Adjustments to reconcile loss for the year to net cash inflow from operating
activities
Tax charge/(credit) on operations 8 32.7 (24.5)
Net finance costs 353.2 137.3
Other non-cash movements (2.0) (0.1)
Depreciation and impairment of property, plant and equipment 4 77.8 65.3
Depreciation and impairment of right-of-use lease assets 4 11.0 9.3
Amortisation and impairment of intangible assets 4 219.3 137.6
Difference between pension contributions paid and amounts recognised in Income (12.1) (11.4)
Statement
(Increase)/decrease in inventories (78.4) 7.7
Increase in trade and other receivables (0.1) (75.4)
Increase in trade and other payables 81.5 52.8
(Decrease)/increase in advances and customer deposits (17.9) 70.7
Movement in provisions 0.7 (0.2)
(Increase)/decrease in other derivative contracts (2.3) 0.7
Other movements in deferred tax asset (3.5) (2.9)
Cash generated from operations 132.4 179.8
Decrease in cash held not available for short term use 1.5 8.1
Income taxes paid 8 (6.8) (9.0)
Net cash inflow from operating activities 127.1 178.9
Cash flows from investing activities
Interest received 6 2.2 1.1
Increase in loan assets - (1.4)
Decrease in loan assets - 0.9
Payments to acquire property, plant and equipment (58.6) (40.7)
Payments to acquire intangible assets (228.3) (144.0)
Net cash used in investing activities (284.7) (184.1)
Cash flows from financing activities
Interest paid (141.2) (118.0)
Proceeds from equity share issue 653.9 -
Proceeds from issue of equity warrants - 15.3
Proceeds from financial instrument utilised as part of refinancing 4.2 -
transactions
Principal element of lease payments (10.0) (9.9)
Repayment of existing borrowings (172.7) (37.3)
Premium paid upon redemption of borrowings (14.3) -
Proceeds from inventory repurchase arrangement 75.7 19.0
Repayment of inventory repurchase arrangement (60.0) (40.0)
Proceeds from new borrowings - 108.5
Transaction fees paid on issuance of shares (18.7) (1.3)
Transaction fees paid on financing activities (1.9) (2.8)
Net cash inflow/(outflow) from financing activities 315.0 (66.5)
Net increase/(decrease) in cash and cash equivalents 157.4 (71.7)
Cash and cash equivalents at the beginning of the year 418.9 489.4
Effect of exchange rates on cash and cash equivalents 7.0 1.2
Cash and cash equivalents at the end of the year 583.3 418.9
notes to the financial statements for the year ended 31 december 2022
1 BASIS OF ACCOUNTING
Aston Martin Lagonda Global Holdings plc (the "Company") is a company
incorporated in England and Wales and domiciled in the UK. The Group Financial
Statements consolidate those of the Company and its subsidiaries (together
referred to as the "Group").
The Group Financial Statements have been prepared and approved by the
Directors in accordance with UK adopted international accounting standards.
The Group Financial Statements have been prepared under the historical cost
convention except where the measurement of balances at fair value is required
as explained below. The Financial Statements are prepared in millions to one
decimal place, and in sterling which is the Company's functional currency.
The financial information set out does not constitute the Company's financial
statements for the years ended 31 December 2022 or 2021 but is derived from
those financial statements. Financial statements for 2021 have been delivered
to the registrar of companies, and those for 2022 will be delivered in due
course. The auditors have reported on those accounts. Their reports for both
years ended 31 December 2022 and 31 December 2021 were not qualified. Their
reports did not contain a statement under Section 498(2) or (3) of the
Companies Act 2006.
CLIMATE CHANGE
In preparing the Consolidated Financial Statements management has considered
the impact of climate change, particularly in the context of the disclosures
included in the Strategic Report this year and the new sustainability goals
including the stated net-zero targets. Climate change is not expected to have
a significant impact on the Group's going concern assessment to June 2024 nor
the viability of the Group over the next five years following consideration of
the below points.
· The Group has modelled various scenarios to take account of the risks
and opportunities identified with the impact of climate change to assess the
financial impact on its business plan and viability.
· The Group has a Strategic Cooperation Agreement with Mercedes-Benz AG.
The agreement provides the Company with access to a wide range of world-class
technologies for the next generation of luxury vehicles which are planned to
be launched through to 2027.
· The Group is planning to leverage strategic long term partnerships with
vendors to develop EV powertrain technology with significant capital
expenditure planned to support the transition to a fully electrified portfolio
of Sport/GT cars and SUVs by 2030.
· The Group continues to invest in onsite renewable energy generation
solutions for our facilities and the increased use of sustainable materials
within production and the required capital investment is included in our
five-year forecasts to enable us to meet our target for net-zero manufacturing
facilities by 2030.
· The Group has a clear plan in place to deliver a transformed product
range to meet climate change regulations impacting the automotive sector,
launching a Plug-In Hybrid Electric Vehicle ("PHEV") by 2024 and targeting the
launch of our first Battery Electric Vehicle ("BEV") in 2025.
Consistent with the above, management have further considered the impact of
climate change on a number of key estimates within the Financial Statements
and has not found climate change to have a material impact on conclusions
reached. Climate change considerations have been factored into impairment
assessments of the carrying value of non-current assets (such as capitalised
development cost intangible assets) through usage of a pre-tax discount rate
which reflects the individual nature and specific risks relating to the
business and the market in which the Group operates. In addition the forecast
cash flows used in both the impairment assessments of the carrying value of
non-current assets and the assessment of the recoverability of deferred tax
assets reflect the current energy cost headwinds and future costs to achieve
net-zero manufacturing facilities by 2030 as well as the forecast volumes for
both existing and future car lines given current order books and our
assessment of changing customer preferences.
GOING CONCERN
The Group meets its day-to-day working capital requirements and medium term
funding requirements through a mixture of $1,143.7m of First Lien notes at
10.5% which mature in November 2025, $229.1m of Second Lien split coupon notes
at 15% per annum (8.89 % cash and 6.11% PIK) which mature in November 2026, a
revolving credit facility (£90.6m) which matures August 2025, facilities to
finance inventory, a bilateral RCF agreement and a wholesale vehicle financing
facility. Under the RCF the Group is required to comply with a liquidity
covenant until May 2022 and a leverage covenant tested quarterly.
The Directors have developed trading and cash flow forecasts for the period
from the date of approval of these Financial Statements through 30 June 2024
(the going concern review period). These forecasts show that the Group has
sufficient financial resources to meet its obligations as they fall due and to
comply with covenants for the going concern review period.
The forecasts reflect our ultra-luxury performance-oriented strategy balancing
supply and demand and the actions taken to improve cost efficiency and gross
margin. The forecasts include the costs of the Group's environmental, social
and governance ("ESG") commitments and make assumptions in respect of future
market conditions and, in particular, wholesale volumes, average selling
price, the launch of new models, and future operating costs. The nature of the
Group's business is such that there can be variation in the timing of cash
flows around the development and launch of new models. In addition, the
availability of funds provided through the vehicle wholesale finance facility
changes as the availability of credit insurance and sales volumes vary, in
total and seasonally. The forecasts take into account these factors to the
extent which the Directors consider them to represent their best estimate of
the future based on the information that is available to them at the time of
approval of these Financial Statements.
The Directors have considered a severe but plausible downside scenario that
includes considering the impact of a 25% reduction in DBX volumes and a 8%
reduction in sports volumes from forecast levels, operating costs higher
than the base plan, incremental working capital requirements such as a reduced
deposit inflows or increased deposit outflows and the impact of the
strengthening of the sterling dollar exchange rate.
The Group plans to make continued investment for growth in the period and,
accordingly, funds generated through operations are expected to be reinvested
in the business mainly through new model development and other capital
expenditure. To a certain extent such expenditure is discretionary and, in the
event of risks occurring which could have a particularly severe effect on the
Group, as identified in the severe but plausible downside scenario, actions
such as constraining capital spending, working capital improvements, reduction
in marketing expenditure and the continuation of strict and immediate expense
control would be taken to safeguard the Group's financial position.
In addition, we also considered the circumstances which would be needed to
exhaust the Group's liquidity over the assessment period, a reverse stress
test. This would indicate that vehicle sales would need to reduce by 35% from
forecast levels without any of the above mitigations to result in having no
liquidity. The likelihood of these circumstances occurring is considered
remote both in terms of the magnitude of the reduction and that, over such a
long period, management could take substantial mitigating actions, such as
reducing capital spending to preserve liquidity.
Accordingly, after considering the forecasts, appropriate sensitivities,
current trading and available facilities, the Directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future and to comply with its financial
covenants therefore the Directors continue to adopt the going concern basis in
preparing the Financial Statements.
2 ACCOUNTING POLICIES
ADJUSTING ITEMS
An adjusting item is disclosed separately in the Consolidated Statement of
Comprehensive Income where the quantum, nature or volatility of such items
would otherwise distort the underlying trading performance of the Group
including where they are not expected to repeat in future periods. The tax
effect is also included.
Details in respect of adjusting items recognised in the current and prior year
are set out in note 5 in the Financial Statements.
3 SEGMENTAL REPORTING
Operating segments are defined as components of the Group about which separate
financial information is available and is evaluated regularly by the chief
operating decision-maker in assessing performance. The Group has only one
operating segment, the automotive segment, and therefore no separate segmental
report is disclosed. The automotive segment includes all activities relating
to design, development, manufacture and marketing of vehicles including
consulting services; as well as the sale of parts, servicing and automotive
brand activities from which the Group derives its revenues.
Revenue 2022 2021
£m £m
Analysis by category
Sale of vehicles 1,291.5 1,005.4
Sale of parts 70.8 65.5
Servicing of vehicles 9.3 10.6
Brands and motorsport 9.9 13.8
1,381.5 1,095.3
Revenue 2022 2021
£m £m
Analysis by geographic location
United Kingdom 366.0 231.3
The Americas 401.8 302.7
Rest of Europe, Middle East and Africa 260.2 233.8
Asia Pacific 353.5 327.5
1,381.5 1,095.3
4 OPERATING LOSS
The Group's operating loss is stated after charging/(crediting):
2022 2021
£m £m
Depreciation and impairment of property, plant and equipment 80.7 65.0
Depreciation released from/(absorbed into) inventory under standard costing (2.9) 0.3
Depreciation and impairment of right-of-use lease assets 11.0 9.3
Amortisation and impairment of intangible assets 227.4 135.0
Amortisation released from/(absorbed into) inventory under standard costing (8.1) 2.6
Depreciation, amortisation and impairment charges included in administrative 308.1 212.2
and other operating expenses
Increase in trade receivable loss allowance - administrative and other 0.6 3.1
operating expenses
Research and development expenditure tax credit (18.4) (16.6)
Net foreign currency differences 8.7 11.2
Cost of inventories recognised as an expense 798.0 641.4
Write-down of inventories to net realisable value 8.9 0.2
(Increase)/decrease in fair value of other derivative contracts (2.3) 0.7
Lease payments (gross of sub-lease receipts)
Plant, machinery and IT equipment* 0.7 0.3
Sub-lease receipts Land and buildings (0.6) (0.6)
Auditor's remuneration:
Audit of these Financial Statements 0.3 0.3
Audit of Financial Statements of subsidiaries pursuant to legislation 0.4 0.3
Audit-related assurance 0.1 0.1
Services related to corporate finance transactions 0.2 0.1
Research and development expenditure recognised as an expense 14.1 13.0
* Election taken by the Group to not recognise right-of-use lease
assets and equivalent lease liabilities for short term and low-value leases
2022 2021
£m £m
Total research and development expenditure 246.1 191.2
Capitalised research and development expenditure (232.0) (178.2)
Research and development expenditure recognised as an expense 14.1 13.0
5 ADJUSTING ITEMS
2022 2021
£m £m
Adjusting operating expenses:
ERP implementation costs(1) (6.9) (4.0)
Defined Benefit pension scheme closure costs(2) (13.5) -
Director settlement and incentive arrangements(3) (3.5) -
Restructuring costs(7) - 2.4
Lease early exit costs(8) - (0.6)
(23.9) (2.2)
Adjusting finance income:
Foreign exchange gain on financial instrument utilised during refinance 4.1 -
transactions(4)
Gain on financial instruments recognised at fair value through Income 8.4 34.1
Statement(5)
Adjusting finance expenses:
Premium paid on the early redemption of Senior Secured Notes(4) (14.3) -
Write-off of capitalised borrowing fees upon early settlement of Senior (16.4) -
Secured Notes(4)
Professional fees incurred on refinancing expensed directly to the Income (1.9) -
Statement(4)
(20.1) 34.1
Total adjusting items before tax (44.0) 31.9
Tax (charge) on adjusting items(6) - (8.1)
Tax credit due to remeasurement of deferred tax on previously classified - 16.4
adjusting items(6)
Adjusting items after tax (44.0) 40.2
Summary of 2022 adjusting items
1. In the year ended 31 December 2022 the Group incurred further
implementation costs for a cloud-based Enterprise Resource Planning (ERP)
system for which the Group will not own any intellectual property. £6.9m of
costs have been incurred in the period under the service contract and expensed
to the Income Statement during the business readiness phase of the project.
The project continues to undergo a phased rollout during 2023 following the
previous migration of finance in 2022. Due to the infrequent recurrence of
such costs and the expected quantum during the implementation phase, these
have been separately presented as adjusting. The cash impact of this item is a
working capital outflow at the time of invoice payment.
2. On 31 January 2022, the Group closed its Defined Benefit Pension
Scheme to future accrual incurring a past service cost of £2.8m. Under the
terms of the closure agreement, employees were granted cash payments both in
the current year and the following two financial years totalling £8.8m. These
costs have been fully accrued. In addition, the affected the employees were
each granted 185 shares incurring a share-based payment charge of £0.9m
during the year. The terms of the agreement provide the employees with a
minimum guaranteed value for these shares subject to their ongoing employment
with the Group. The Group will pay the employees a further cash sum if the
share price at 1 February 2024 does not meet this value. The charge associated
with this portion is £1.0m in the year ended 31 December 2022 and is being
accounted for in accordance with IFRS2 as a cash settled share-based payment
scheme. Further costs are expected in future periods under this guarantee
until the liability crystallises in February 2024. The Group will continue to
present these costs in adjusting items due to their volatile nature and
connection with the closure of the pension scheme which is considered a
non-recurring event.
3. On 14 January 2022, it was announced that Doug Lafferty would be
joining the Group as Chief Financial Officer replacing Ken Gregor who stepped
down from the Board on 1 May 2022. On 4 May, it was announced that Tobias
Moers would be stepping down as Chief Executive Officer and Chief Technical
Officer. Amedeo Felisa was appointed as Chief Executive Officer and Roberto
Fedeli was appointed as Chief Technical Officer on the same day. The total
cost associated with these changes was £3.5m, of which £1.8m represents
joining incentives, £0.7m represents severance, and £1.0m comprises social
security and other costs. Due to the quantum of such costs incurred in the
period, they have been separately presented. The cash outflows associated with
this expense are expected to be incurred within a period of 12 months from the
appointment of each individual.
4. Following the successful equity raise in September 2022, the Group
paid down $40.3m of First Lien Senior Secured Notes ("SSNs) and $143.8m of
Second Lien SSNs. The early settlement of these notes incurred a redemption
premium of £14.3m and transaction fees of £1.9m and resulted in the
acceleration of capitalised borrowing costs of £16.4m. The cash impact of the
fees and premium are incurred within the year ended 31 December 2022. The
acceleration of the borrowing costs is a non-cash item. In order to facilitate
the repayment of the SSNs the Group placed a forward currency contract to
purchase US dollars. Due to favourable movements in the exchange rates, a gain
of £4.1m was realised in the Income Statement at the transaction date.
5. The Group issued Second Lien SSNs during the year ended 31 December
2020 which included detachable warrants classified as a derivative option
liability initially valued at £34.6m. The movement in fair value of the
liability in the year ended 31 December 2022 resulted in a gain of £8.4m
(2021: £34.1m) being recognised in the Income Statement. There is no cash
impact of this adjustment.
6. In 2022, nil tax has been recognised as an adjusting item (2021:
£8.3m credit) which is not in line with the standard rate of income tax for
the Group of 19% (2021: 19%).This is on the basis that the adjusting items
generate net deferred tax assets, specifically unused tax losses and interest
amounts disallowed under the corporate interest restriction legislation, which
have not been recognised to the extent that sufficient taxable profits are not
forecast in the foreseeable future to which the unused tax losses and interest
amounts disallowed under the corporate interest restriction legislation would
be utilised. In 2021, a total tax credit of £8.3m was recognised as an
adjusting item. The effective tax rate associated with the tax credit on
adjusting items in the prior period was not in line with the standard rate of
income tax for the Group at 19%. This was due to a £16.4m tax credit
attributable to deferred tax balances on items treated as adjusting in
previous years being re-measured at 25%.
Summary of 2021 adjusting items
7. During 2020 the Group provided £12.1m for restructuring costs
associated with a reduction in employee numbers to reflect the lower than
originally planned production volumes. In addition to this, the Group incurred
an additional £0.3m of phase one restructuring costs in 2020. A revision to
the estimated total costs resulting from greater natural attrition resulted in
£2.4m of the existing provision being released to the Income Statement during
the year ended 31 December 2021. The cash impact of the restructuring cost is
realised in line with the movement in the provision. The credit to the
Consolidated Income Statement in 2021 had no cash impact.
8. In the year ended 31 December 2021 the Group continued to rationalise
its geographical footprint. The Group incurred £0.6m of costs associated with
surrendering a lease 30 months early. These costs have been disclosed
consistently with prior periods. The rationalisation of the geographical
footprint is now complete. The associated cash outflow related to this
adjustment will be realised during 2022 and 2023 in line with the exit
agreement.
6 FINANCE INCOME
2022 2021
£m £m
Bank deposit and other interest income 3.0 2.3
Finance income before adjusting items 3.0 2.3
Adjusting finance income items:
Foreign exchange gain on financial instrument utilised during refinance 4.1 -
transactions
Gain on financial instruments recognised at fair value through Income 8.4 34.1
Statement
Total adjusting finance income 12.5 34.1
Total finance income 15.5 36.4
7 FINANCE EXPENSE
2022 2021
£m £m
Bank loans, overdrafts and senior secured notes 166.0 151.3
Foreign exchange loss on borrowings not designated as part of a hedging 156.2 12.4
relationship
Interest on lease liabilities 4.5 3.9
Net interest expense on the net Defined Benefit liability 1.4 1.3
Interest on contract liabilities held 8.0 4.8
Finance expense before adjusting items 336.1 173.7
Adjusting finance expense items:
Premium paid on the early redemption of Senior Secured Notes 14.3 -
Write-off of capitalised borrowing fees upon early settlement of Senior 16.4 -
Secured Notes
Professional fees incurred on refinancing expensed directly to the Income 1.9 -
Statement
Total adjusting finance expense 32.6 -
Total finance expense 368.7 173.7
8 TAXATION
2022 2021
£m £m
UK corporation tax on profits 0.2 0.5
Overseas tax 7.4 10.8
Total current income tax charge 7.6 11.3
Deferred tax credit
Origination and reversal of temporary differences 29.4 (16.1)
Prior period movement (4.3) (2.4)
Effect of change in deferred tax rate - (17.3)
Total deferred tax charge/ (credit) 25.1 (35.8)
Total income tax charge/ (credit) in the Income Statement 32.7 (24.5)
Tax relating to items credited to other comprehensive income
Deferred tax
Actuarial movement on Defined Benefit plan 1.7 1.0
Fair value adjustment on cash flow hedges (0.8) (1.2)
Effect of change in deferred tax rate - (6.0)
0.9 (6.2)
Tax relating to items charged in equity - deferred tax
Effect of change in deferred tax rate - (4.8)
8 TAXATION continued
(A) RECONCILIATION OF THE TOTAL INCOME TAX CREDIT
The tax charge in the Consolidated Statement of Comprehensive Income for the
year is higher (2021: lower) than the standard rate of corporation tax in the
UK of 19% (2021: 19%). The differences are reconciled below:
2022 2021
£m £m
Loss from operations before taxation (495.0) (213.8)
Loss on operations before taxation multiplied by standard rate of corporation (94.0) (40.6)
tax in the UK of 19.0% (2021: 19.0%)
Difference to total income tax credit due to effects of:
Expenses not deductible for tax purposes 2.0 0.5
Movement in unprovided deferred tax on current period losses and restricted 84.7 15.0
tax interest
Movement in unprovided deferred tax on current period accelerated capital 15.6 -
allowances
Derecognition of deferred tax assets 25.6 17.7
Irrecoverable overseas withholding taxes 0.8 1.4
Adjustments in respect of prior periods (4.3) (2.4)
Effect of change in deferred tax rate - (17.3)
Difference in UK tax rates 1.1 (4.8)
Difference in overseas tax rates 1.2 2.9
Other - 3.1
Total income tax charge 32.7 (24.5)
(B) TAX PAID
Total net tax paid during the year of £6.8m (2021: £9.0m).
(C) Factors affecting future tax charges
The UK's main rate of corporation tax will increase from 19% to 25%, effective
from 1 April 2023.
9 EARNINGS PER ORDINARY SHARE
Basic earnings per ordinary share is calculated by dividing the loss for the
year available for equity holders by the weighted average number of ordinary
shares in issue during the year.
On 28 September 2022 the Company issued 559.0m ordinary shares by way of a
rights issue. Due to the shares being issued at substantially below market
price, a bonus issue is deemed to have taken place. A total of 211.6m shares
issued were considered bonus shares. The weighted average shares used to
calculate earnings per share in both the current and the prior year have been
adjusted accordingly.
Continuing and total operations 2022 2021
Restated*
Basic earnings per ordinary share
Loss available for equity holders (£m) (528.6) (191.6)
Basic weighted average number of ordinary shares (million)(1) 424.7 327.1
Basic loss per ordinary share (pence) (124.5p) (58.6p)
1.To aid users understanding of the movement in the basic and diluted earnings
per ordinary share presented for the comparative period, the following table
reconciles the numbers presented in the 2021 Annual Report and Accounts to
those presented above
Continuing and total operations - 12 months ended 31 December 2021 As presented 2021 Annual Report Bonus element of rights issue (note 11) As presented above
Basic earnings per ordinary share
Loss available for equity holders (£m) (191.6) - (191.6)
Basic weighted average number of ordinary shares (million) 115.5 211.6 327.1
Basic loss per ordinary share (pence) (165.9p) 107.3p (58.6p)
Diluted earnings per ordinary share
Loss available for equity holders (£m) (191.6) - (191.6)
Diluted weighted average number of ordinary shares (million) 115.5 211.6 327.1
Diluted loss per ordinary share (pence) (165.9p) 107.3p (58.6p)
Diluted earnings per ordinary share is calculated by adjusting basic earnings
per ordinary share to reflect the notional exercise of the weighted average
number of dilutive ordinary share awards outstanding during the year including
the future technology shares and warrants detailed above. The weighted average
number of dilutive ordinary share awards outstanding during the year are
excluded when including them would be anti-dilutive to the earnings per share
value.
2022 2021
Number Number
Restated*
Diluted weighted average number of ordinary shares is calculated as:
Basic weighted average number of ordinary shares (million) 424.7 327.1
Adjustments for calculation of diluted earnings per share:(1)
Long term incentive plans - -
Issue of unexercised ordinary share warrants - -
Issue of tranche 2 shares - -
Weighted average number of diluted ordinary shares (million) 424.7 327.1
The number of ordinary shares issued as part of the long term incentive plans,
the potential number of ordinary shares issued as part of the 2020 issue of
share warrants and the future issuance of shares for access to MBAG technology
have been excluded from the weighted average number of diluted ordinary shares
as including them is anti-dilutive to diluted earnings per
share
As part of the Strategic Cooperation Agreement entered into in December 2020
with MBAG, shares were issued for access to tranche 1 technology. The
Agreement includes an obligation to issue further shares for access to further
technology in a future period. Warrants to acquire shares in the Company were
issued alongside the Second Lien SSNs in December 2020 which can be exercised
from 1 July 2021 through to 7 December 2027. As a consequence of the rights
issue during the period (note 11) the number of ordinary shares issuable via
the options was increased by a multiple of 6 to ensure the warrant holders'
interests were not diluted. As at 31 December 2022 96,129,252 options, each
entitled to 0.3 ordinary shares, remain unexercised. Both the future MBAG
tranches and the future issuance of warrants may have a dilutive effect in
future periods if the Group generates a profit.
Adjusted earnings per share is disclosed in note 12 to show performance
undistorted by adjusting items to assist in providing useful information on
the underlying performance of the Group and enhance the comparability of
information between reporting periods.
10 NET DEBT
The Group defines net debt as current and non-current borrowings in addition
to inventory repurchase arrangements and lease liabilities, less cash and cash
equivalents including cash held not available for short term use.
2022 2021
£m £m
Cash and cash equivalents 583.3 418.9
Cash held not available for short term use 0.3 1.8
Inventory repurchase arrangement (38.2) (19.7)
Lease liabilities - current (7.4) (9.7)
Lease liabilities - non-current (92.4) (93.7)
Loans and other borrowings - current (107.1) (114.3)
Loans and other borrowings - non-current (1,104.0) (1,074.9)
Net debt (765.5) (891.6)
Movement in net debt
Net increase/(decrease) in cash and cash equivalents 164.4 (70.5)
Add back cash flows in respect of other components of net debt:
New borrowings - (108.5)
Proceeds from inventory repurchase arrangement (75.7) (19.0)
Repayment of existing borrowings 172.7 37.3
Repayment of inventory repurchase arrangement 60.0 40.0
Lease liability payments 10.0 9.9
Movement in cash held not available for short term use (1.5) (8.1)
Transaction fees - 1.9
Decrease/(increase) in net debt arising from cash flows 329.9 (117.0)
Non-cash movements:
Foreign exchange loss on secured loan (156.2) (12.4)
Interest added to debt (15.7) (13.4)
Borrowing fee amortisation (25.4) (7.5)
Lease liability interest charge (4.5) (3.9)
Lease modifications (3.8) 0.4
New leases (2.2) (11.5)
Foreign exchange gain and other movements 4.0 0.4
Decrease/(increase) in net debt 126.1 (164.9)
Net debt at beginning of the year (891.6) (726.7)
Net debt at the end of the year (765.5) (891.6)
11 SHARE CAPITAL AND OTHER RESERVES
Allotted, called up and fully paid Number of Nominal Share Share Merger Capital redemption reserve
value
£m
shares
£ capital premium reserve
£m
£m
£m
Opening balance at 1 January 2021 114,933,587 0.1 11.5 1,108.2 144.0 9.3
Exercise of warrant options(1) 1,525,926 0.1 0.1 15.1 - -
Transfer between reserves - - - 0.1 (0.1) -
Balance as at 31 December 2021 and 1 January 2022 116,459,513 0.1 11.6 1,123.4 143.9 9.3
Private placing(2) 23,291,902 0.1 2.4 75.7 - -
Rights issue(3) 559,005,660 0.1 55.9 498.3 - -
Closing balance at 31 December 2022 698,757,075 0.1 69.9 1,697.4 143.9 9.3
1. On 15 July 2021 945,131 ordinary shares in the Company were issued
to satisfy the redemption of 18,902,665 warrant options. £9.5m of cash was
received for the shares. On 22 July 2021 330,795 ordinary shares in the
Company were issued to satisfy the redemption of 6,615,932 warrant options.
£3.3m of cash was received for the shares. On 11 December 2021 250,000
ordinary shares in the Company were issued to satisfy the redemption of
5,000,003 warrant options. £2.5m of cash was received for the shares. Upon
issuance of the shares the corresponding derivative option liability is
extinguished resulting in a total credit to retained earnings during the year
ended 31 December 2021 of £14.8m.
2. On 9 September 2022 the Company issued 23.2m ordinary shares by way
of a private placing. The shares were issued at 335p raising gross proceeds of
£78.1m, with £2.4m recognised as share capital and the remaining £75.7m
recognised as share premium.
3. On 28 September 2022 the Company issued 559.0m ordinary shares by
way of a rights issue. The shares were issued at 103p raising gross proceeds
of £575.8m, with £55.9m recognised as share capital and the remaining
£519.9m recognised as share premium. Share premium is reduced by £21.6m
reflecting transaction fees paid of which £3.0m are accrued as at 31
December 2022. Due to the shares being issued at substantially below market
price, a bonus issue is deemed to have taken place. A total of 211.6m shares
issued were considered bonus shares. The weighted average shares used to
calculate earnings per share (see note 9) has been adjusted accordingly.
12 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.
The key APMs that the Group focuses on are as follows:
i) Adjusted EBT is the loss before tax and adjusting items as
shown in the Consolidated Income Statement.
ii) Adjusted EBIT is operating (loss)/profit before adjusting
items.
iii) Adjusted EBITDA removes depreciation, loss on sale of fixed
assets and amortisation from adjusted EBIT.
iv) Adjusted operating margin is adjusted EBIT divided by revenue.
v) Adjusted EBITDA margin is Adjusted EBITDA (as defined above)
divided by revenue.
vi) Adjusted earnings per share is loss after tax before adjusting
items as shown in the Consolidated Income Statement, divided by the weighted
average number of ordinary shares in issue during the reporting period.
vii) Net debt is current and non-current borrowings in addition to
inventory repurchase arrangements and lease liabilities, less cash and cash
equivalents and cash held not available for short term use as shown in the
Consolidated Statement of Financial Position.
viii) Adjusted leverage is represented by the ratio of net debt to the
last 12 months (LTM) Adjusted EBITDA.
ix) Free cash flow is represented by cash (outflow)/inflow from
operating activities less the cash used in investing activities (excluding
interest received) plus interest paid in the year less interest received.
Income Statement
2022 2021
£m £m
Loss before tax (495.0) (213.8)
Adjusting operating expenses (note 5) 23.9 2.2
Adjusting finance income (notes 5, 6) (12.5) (34.1)
Adjusting finance expense (notes 5, 7) 32.6 -
Adjusted loss before tax (EBT) (451.0) (245.7)
Adjusted finance income (note 6) (3.0) (2.3)
Adjusted finance expense (note 7) 336.1 173.7
Adjusted operating loss (EBIT) (117.9) (74.3)
Adjusted operating margin (8.5%) (6.8%)
Reported depreciation 88.8 74.6
Reported amortization 219.3 137.6
Adjusted EBITDA 190.2 137.9
Adjusted EBITDA margin 13.8% 12.6%
Earnings per share
2022 2021
£m Restated*
£m
Adjusted earnings per ordinary share
Loss available for equity holders (£m) (528.6) (191.6)
Adjusting items (note 5)
Adjusting items before tax (£m) 44.0 (31.9)
Tax on adjusting items (£m) - (8.3)
Adjusted loss (£m) (484.6) (231.8)
Basic weighted average number of ordinary shares (million)(1) 424.7 327.1
Adjusted loss per ordinary share (pence) (114.1p) (70.9p)
Adjusted diluted earnings per ordinary share
Adjusted loss (£m) (484.6) (231.8)
Diluted weighted average number of ordinary shares (million) 424.7 327.1
Adjusted diluted loss per ordinary share (pence) (114.1p) (70.9p)
* Earnings per ordinary share has
been adjusted to reflect the bonus element of the rights issue undertaken in
September 2022.
Net debt
2022 2021
£m £m
Opening cash and cash equivalents 418.9 489.4
Cash inflow from operating activities 127.1 178.9
Cash outflow from investing activities (284.7) (184.1)
Cash inflow/(outflow) from financing activities 315.0 (66.5)
Effect of exchange rates on cash and cash equivalents 7.0 1.2
Cash and cash equivalents at 31 December 583.3 418.9
Cash held not available for short term use 0.3 1.8
Borrowings (1,211.1) (1,189.2)
Lease liabilities (99.8) (103.4)
Inventory repurchase arrangement (38.2) (19.7)
Net debt (765.5) (891.6)
Adjusted EBITDA 190.2 137.9
Adjusted leverage 4.0x 6.5x
Free cash flow
2022 2021
£m £m
Net cash inflow from operating activities 127.1 178.9
Cash used in investing activities (excluding interest received) (286.9) (185.2)
Interest paid less interest received (139.0) (116.9)
Free cash flow (298.8) (123.2)
1 (#_ftnref1) For definition of alternative performance measures please see
Appendix
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