REG - Inchcape PLC - Trading Statement

InchcapeAnnouncement

27/10/2022 07:01

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RNS Number : 2383E  Inchcape PLC  27 October 2022

27 October 2022

Inchcape plc, the leading global automotive distributor, announces its Q3
trading update

covering the period from 1 July to 30 September 2022

Q3 trading update: continued strong performance
 §   Group revenue £2.1bn(1): up 16% on an organic basis, growing in all regions,
     and up 24% on a reported basis
 §   Outlook: expect 2022 adjusted PBT from continuing operations towards the top
     end, or slightly above, the previously guided range (£350-370m)
 §   Derco acquisition continues to progress well with completion expected at the
     end of 2022 or in Q1 2023
 §   Expanded electric vehicle OEM footprint adding ORA in Hong Kong, and BYD in
     BeLux
 §   Announces the next 'In the Driving Seat' investor webinar on Digital &
     Data to be held on 24 November 2022

Duncan Tait, Group CEO, commented:

"The Group delivered another strong performance in Q3. We achieved
double-digit organic growth in both Distribution, underpinned by higher
vehicle volumes, and in Retail. We continue to see robust demand for vehicles,
with record order books across many of our markets, and expect a gradual
improvement in vehicle supply. The combination of the strength of Inchcape's
business model and geographically diverse footprint means we are well placed
to navigate the current macroeconomic climate.

A year following the launch of our Accelerate strategy we have delivered
substantial progress against our growth drivers of Distribution Excellence and
Vehicle Lifecycle Services. We have extended our global leadership in
automotive distribution, leveraging our digital and data investments, and
continue to move forward with our ambition to capture more of a vehicle's
lifetime value with bravoauto - our digital-first, multi-brand used car
platform.

In July we announced the proposed acquisition of Derco, Latam's leading
automotive distributor, significantly increasing our scale in the fast growth
Americas region. In addition, during Q3 we have further expanded our OEM
footprint with exciting electric vehicle brands, adding Great Wall's ORA in
Hong Kong and Macau, and BYD in Belgium and Luxembourg. This expansion is a
great example of our Accelerate strategy in action, delivering on the Group's
growth ambitions.

With a clear strategy, driven by our ambition to be both better and bigger,
Inchcape is well positioned to capitalise on further opportunities for organic
growth and market consolidation. I am confident we will continue to deliver
sustainable long term value for all our stakeholders."

 

Outlook:

In light of the strong performance to date and our expectation for the fourth
quarter, we now expect to deliver FY22 adjusted PBT from continuing operations
towards the top end, or slightly above, the previously guided range
(£350-370m) at prevailing FX rates(3).

The strength of our business model and financial position means Inchcape is
well placed to continue to grow profits and generate cash, and we are
confident in the medium-term outlook set out at the Capital Markets Day in
November 2021.

 Revenue YoY%  Reported  Constant FX  Organic(2)
               Q3        Q3           Q3      YTD
 Group(1)      +24%      +20%         +16%    +13%
 Distribution  +31%      +24%         +18%    +15%
 Retail(1)     +10%      +10%         +11%    +9%

( )

1: Russia business (Moscow) disposed in 2Q22 and has consequently been treated
as a discontinued operation. It has therefore been removed from the current
and comparative periods

2: Organic growth is defined as sales growth in operations that have been open
for at least a year at constant foreign exchange rates

3: Prevailing exchange rates provides a c.£15m translation tailwind to 2022
Group PBT (versus £10m at the Interims, 28 July 2022)

 

Update on Derco acquisition (as per RNS issued on 6 October 2022)

On 28 July 2022 Inchcape announced the proposed acquisition of Derco (the
"Transaction").

The Transaction is subject to merger control clearance in Chile and Peru and a
merger control filing in Colombia. The merger control filing in Colombia has
been submitted and accepted. Merger control documents have been submitted to
the relevant regulatory bodies in Chile and Peru. We continue to expect those
processes to be completed in line with the overall Transaction timetable as
detailed at announcement.

The preparation of the Class 1 shareholder circular and notice of General
Meeting documentation (the "Circular") is ongoing, with publication now
expected in late November or early December.

The Group continues to expect completion of the Derco acquisition at the end
of 2022 or in Q1 2023, subject to necessary shareholder approvals and merger
control clearance.

 

Channel review

The commentary that follows covers the period from 1 July to 30 September
2022.  Unless otherwise stated, all figures are quoted on an organic basis.

During the quarter, Group revenue increased 16% year-on-year, with
Distribution up 18% and Retail up 11%.

In Distribution, revenue was ahead of the prior year, supported by strong
growth in both new and used vehicles and in aftermarket. Revenue in Asia and
Australasia reached its highest quarterly level since early 2021, whilst the
Americas posted another record quarter.

In Retail, whilst new vehicle supply remained constrained we saw growth of
used vehicles. Pricing remained robust enabling us to deliver revenue growth
in vehicles. Aftersales performance continued to be solid.

 

 Distribution  Q3 organic revenue YoY%: +18%

Asia

 §   Sequential topline improvement in Hong Kong, stabilisation in Singapore and a
     continued encouraging trend in other markets (primarily Guam, Brunei, Saipan
     and Indonesia)

 

Australasia

 §   Returned to growth; supported by new car volumes and higher used vehicles and
     aftermarket revenue

Europe

 §   Continued growth in vehicles (new and used) and aftermarket revenue -
     particularly strong performance in BeLux, Greece and Poland

 

Americas & Africa

 §   Continued strong performance across major markets in the Americas - notably
     Chile, Colombia, Costa Rica and Peru

 

 Retail  Q3 organic revenue YoY%: +11%

UK & Europe(3)

 §   Vehicles revenue supported by robust pricing and used volume growth;
     Aftersales continued to be solid

 

3: UK and Poland

 

Market abuse regulation statement

This announcement contains inside information.

 
Conference call today

A conference call for analysts and investors will be held today, Thursday 27
October, at 08:30 (UK time).

Please register here
(https://cossprereg.btci.com/prereg/key.process?key=PKDDCAJND) to receive the
dial-in details.

 

A replay of the call will be available via the Company's website,
www.inchcape.com (https://www.inchcape.com/) later today.

 
Financial calendar
 2022 full-year results  To be confirmed

 
Contacts
 Inchcape plc:
 Raghav Gupta-Chaudhary              Investor queries  +44 (0)7933 395 158  i (mailto:investors@inchcape.com) nvestors@inchcape.com
                                                                            (mailto:investors@inchcape.com)
 Finn Lawrence                       General queries   +44 (0)20 7546 0022

 Media enquiries (Brunswick Group):
 Kate Holgate / Helen Smith                            +44 (0)20 7404 5959  inchcape@brunswickgroup.com (mailto:inchcape@brunswickgroup.com)

 
About Inchcape

Inchcape is the leading independent multi-brand global automotive distributor,
operating in over 40 markets and territories with a portfolio of the world's
leading automotive brands. Inchcape has diversified multi-channel revenue
streams including sale of new and used vehicles, parts, service, finance and
insurance. The Company has been listed on the London Stock Exchange (INCH)
since 1958, and is classified within the 'Business Support Services' sector.
The Group is headquartered in London and employs around 14,500 people
globally. www.inchcape.com. (https://www.inchcape.com/)

 

 

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