JAGUAR LAND ROVER GOLDMANSACHS LEVERAGEDFINANCE - Ben Birgbauer, Treasurer
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
JAGU A R L A N D ROV E R G O L D MA N S A CH S L E V ERA G ED F I NA NCE Ben Birgbauer, Treasurer 4th September 2018
D i s cl ai m e r
Statements in this presentation describing the objectives, projections, estimates and expectations of Jaguar Land Rover Automotive plc and its direct and
indirect subsidiaries (the “Company”, “Group” or “JLR”) may be “forward-looking statements” within the meaning of applicable securities laws and
regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s
operations include, among others, economic conditions affecting demand / supply and price conditions in the domestic and overseas markets in which
the Company operates, changes in Government regulations, tax laws and other statutes and incidental factors
- Q1 FY19 represents the 3 month period from 1 April 2018 to 30 June 2018
- Q1 FY18 represents the 3 month period from 1 April 2017 to 30 June 2017
- FY19 represents the 12 month period from 1 April 2018 to 31 March 2019
- H2 FY19 represents the 6 month period from 1 October 2018 to 31 March 2019
- LTM represents the 12 month period from 1 July 2017 to 30 June 2018
- FY18 represents the 12 month period from 1 April 2017 to 31 March 2018
- FY17 represents the 12 month period from 1 April 2016 to 31 March 2017
Unless stated otherwise sales volumes are expressed in thousand units, and financial values are in GBP millions
Consolidated results of Jaguar Land Rover Automotive plc and its subsidiaries contained in the presentation are unaudited and presented under IFRS as
approved in the EU.
Retail volume data includes and wholesale volume includes sales from the Company’s unconsolidated Chinese joint venture (“CJLR”)
EBITDA is defined as profit before income tax expense, exceptional items, finance expense (net of capitalised interest), finance income, gains/losses on
unrealised derivatives and debt, gains/losses on realised derivatives entered into for the purpose of hedging debt, share of profit/loss from equity
accounted investments and depreciation and amortisation.
EBIT is defined as for EBITDA but including share of profit/loss from equity accounted investments and depreciation and amortisation.
Certain analysis undertaken and represented in this document may constitute an estimate from the Company and may differ from the actual underlying
results
-2-
A g e nda
Business overview 4
Recent financial results 12
JLR Strategy 18
-3-
Consistent strategy
Inve sting to drive susta ina ble prof ita ble grow th
Business Blueprint Investment strategy
Products Technology
Capacity and infrastructure
-4-
Growing Jaguar Land Rover model range
LUXURY SPORTS LIFESTYLE LUXURY – RANGE ROVER LEISURE - DISCOVERY DUAL PURPOSE - DEFENDER
XJ F-TYPE Coupe F-PACE RANGE ROVER ALL NEW DISCOVERY LAND ROVER DEFENDER
Replacement in development
XF SPORTBRAKE F-TYPE CONVERTIBLE E-PACE RANGE ROVER SPORT DISCOVERY SPORT
XE
XF I-PACE RANGE ROVER VELAR
XE
XFL RANGE ROVER VELAR WINNER
JAGUAR F-PACE WINNER JAGUAR F-PACE WINNER
WORLD CAR AWARDS
WORLD CAR AWARDS WORLD CAR AWARDS
2018 WORLD CAR
2017 WORLD CAR 2017 WORLD CAR
DESIGN OF THE YEAR
OF THE YEAR DESIGN OF THE YEAR
RANGE ROVER EVOQUE VELAR, F-PACE & E-PACE
XE Range Rover
F-PACE & E-PACE
-5-
Technology transformation underway (ACES)
AUTONOMOUS CONNECTED ELECTRIC SHARED
• Waymo long • Remote smartphone • All JLR models will have an • Ride hailing
term partnership app electric option from 2020 service
• Self drive valet • Wi-Fi Hotspot • Range Rover and Range • Community
park testing in Rover Sport Plug-in hybrids car sharing
• SOS Emergency Call
the UK now on sale • Self driving
and roadside
assistance • I-PACE battery electric taxi service
• Stolen Vehicle vehicle now available to • Pay per mile
Tracker order insurance
-6-
Broader manufacturing footprint
UK
WOLVERHAMPTON
SOLIHULL ENGINE SLOVAKIA
335K MANUFACTURING 150K
CENTRE
500K
HALEWOOD CASTLE
BROMWICH CHINA
130K
53K 147k
INDIA
AUSTRIA 5K
73K
BRAZIL
8K
Strong revenue growth driven by new models
Re ce nt grow th slow e r: die se l, ince ntiv e s a nd Bre xit
IFRS, £m
25,787
24,340
22,135 22,287
19,387
15,786
13,525
9,884
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Retails
241 306 375 434 462 522 604 614
(000’s)
New models
launched
-8-
Generated £14b PBT FY11–18
Low e r prof ita bil ity more re ce ntly
£ millions
Increasing profitability FY11-15 reflecting: Lower profitability FY16-18, reflecting:
• Strong volume growth, 18% CAGR, driven • Lower volume growth, 8.5% CAGR with
by new models, new segments and China market challenges including Diesel
market growth uncertainty, higher incentives and Brexit
• Lower D&A reflecting capitalisation timing 2,501
2,614 • High investment coming through D&A
1,675 1,610
1,507 1,557 1,536
1,115
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
Exceptionals - - - - - (157) 151 438
EBITDA margin 15.5% 15.6% 14.9% 17.5% 18.7% 14.1% 12.1% 10.8%
EBIT margin 11.5% 12.2% 10.9% 12.9% 13.9% 8.0% 5.9% 3.8%
-9-
Plan to achieve sustainable profitable growth
With positive ca sh f low ove r the me dium to long te rm
Key actions to improve profitability include:
Medium term targets
• Volume growth plans moderated to reflect revised market
conditions Volume growth >> Premium Segments
• Driving cost efficiencies and operating leverage across the business EBIT % 4-7%
• Tough choices made on investment plans to meet affordability Investment c. £4.5b p.a. in FY19-21
criteria whilst remaining competitive and innovative
We are targeting sustainable profitable growth with positive cash flow
over the medium to long term Long term targets
• Sales growth supported by new products and technology Volume growth >> Premium Segments
• Continuing to invest in world class capabilities and infrastructure EBIT % 7-9%
• Improving contribution margins and operating leverage Investment c. 12-13% of Revenue
• Moderating investment to c. 12-13% of revenue whilst ensuring
competitiveness
- 10 -Strong balance sheet and liquidity
De bt ma turitie s spre a d e ve nly ove r 10 ye a rs
IFRS, £m
Credit ratings Leverage metrics (LTM)
Moody’s: Ba2 (Stable) Reported gross debt/EBITDA: 1.46x
S&P Issuer credit rating: BB (Stable) Reported net debt/EBITDA: 0.42x
S&P Stand-alone credit profile: BB+
Cash + RCF Debt maturity profile
4,727
Undrawn 3,914
RCF
1,935 196
Undrawn
RCF 3,718
2,792 1,935
534 781 578
381 381 300 400 363
//
Q1 CY18 CY19 CY20 CY21 CY22 CY23 CY24 CY27 Total
FY19 Bonds Other debt: Discounted receivables, finance leases and deferred fees Undrawn RCF Debt
- 11 -RECENT FINANCIAL RESULTS
Q1 FY19 revenue £5.2b, loss before tax £264m
China duty cha nge , de -stoc k i ng a nd FX re va lua tio n drove loss
IFRS, £m
Revenue PBT Margins Q1 Commentary
571
5,599
EBITDA • China duty change (-£110m): higher
5,222 7.9% EBITDA VME and lower wholesales
6.2%
EBIT • De-stocking (-£110m on 11.3k units)
1.2% and WLTP (-£30m on 2.7k units)
Q1
EBIT
(3.7)%
(264) • FX revaluation (-£116m, -£189m YoY):
weaker pound
FY18 FY19 FY18 FY19 FY18 FY19
• D&A (up £99m): investment in new
models and new capitalisation policy
24,339 25,786
1,610 1,536 EBITDA
EBITDA • £437m pension credit in Q1 FY18 PBT
12.1%
not included in EBITDA and EBIT
Fiscal Year
10.8%
EBIT EBIT
5.9% 3.8%
FY17 FY18 FY17 FY18 FY17 FY18
- 13 -Q1 FY19 Retails 145.5k, up 8k (5.9%)
Wholesales 131.6k, down 6.9k (5%), de -stocking, WLTP change
Units in ‘000
34.4
30.9 31.1
26.4
22.8
North America UK Europe China Overseas*
YoY +2.5 +3.3 (2.4) +0.8 +3.8
Wholesales
Units 27.5 22.0 26.2 33.0 22.8
YoY (1.9) (3.8) (5.1) (1.3) +5.2
Retail volumes include sales from Chery Jaguar Land Rover – Q1 FY19 21,181 units, Q1 FY18 20,309 units
Wholesale volumes include sales from Chery Jaguar Land Rover – Q1 FY19 22,772 units, Q1 FY18 20,560 units. For statutory reporting under IFRS, the Group recognises revenue on wholesales (excluding sales from CJLR) which totals 108,788 Q1 FY19 and 117,916 Q1 FY18. The Group recognises
it’s share of profits from CJLR within EBIT. - 14 -
*Overseas markets includes Australia, Brazil, Colombia, India, Japan, South Korea, Mexico, MENA, Russia, Singapore, South Africa, Taiwan and certain importersJuly 2018 retails 36.1k, down 9.9k (21.6%)
Wholesales 35k, down 16.4k (31.9%), China duty, de -stocking, WLTP
Units in ‘000
9.2
7.4 7.2
6.2 6.2
North America UK Europe China Overseas*
YoY (1.0) (1.4) (2.7) (5.5) +0.6
Wholesales
Units 9.9 7.9 3.5 3.1 6.5
YoY +1.1 (5.0) (6.8) (4.9) (0.9)
Retail volumes include sales from Chery Jaguar Land Rover – July 2018 3,592 units, July 2017 6,673 units
Wholesale volumes include sales from Chery Jaguar Land Rover – July 2018 4,076 units, July 2017 6,805 units. For statutory reporting under IFRS, the Group recognises revenue on wholesales (excluding sales from CJLR) which totals 30,931 in July 2018 and 44,620 in July 2017. The Group
recognises it’s share of profits from CJLR within EBIT. - 15 -
*Overseas markets includes Australia, Brazil, Colombia, India, Japan, South Korea, Mexico, MENA, Russia, Singapore, South Africa, Taiwan and certain importersQ1 FY19 Cash outflow £1.7b after investment
Positive cashflow and worki n g capital expected in H2 FY19
2,000
D&A £549m Payables £(1,088)m
JV profit £(30)m Inventory £(314)m
1,500 Receivables £430m
1,000
£(264)
698 (82)
500 (1,066)
0
(500) (264)
(1,000)
(1,500)
(960) (1,674)
(2,000)
PBT Q1 FY19 Non-cash and other Tax Investment Working Free cash flow
capital
* Free cash flow defined£(226) £128 activities less net cash
as net cash generated from operating £(52)
£46used in investing activities short-term deposits) and £(618)
(excluding movements in £90 after finance expenses and £(580)
fees and payments of lease
obligations. Free cash flow also includes foreign exchange gains/losses on short-term deposits and cash and cash equivalentsImproved profitability expected in H2 FY19
China duty a nd FX non -r e cu r , f a voura ble volume a nd mix
Higher D&A,
UK March Engineering,
,500
reg. Marketing
Chinese
,300 I-PACE new year
E-PACE US 19MY
,100 Velar
18MY RR/RRS
900 Future models
700 FX reval
China duty
500 De-stocking
WLTP
300
100
100)
(264)
300)
500)
Q1 FY19 Q1 non-recurring New and refreshed Lower China Regional Cost efficiency/ PD/other FY19
Loss before tax items models duty - 17 -seasonality operating leverage costs PBTJLR STRATEGY
Target long term EBIT margin of 7-9%
Business challenges
Geopolitical and Market and Electrification, Driver High capital
economic competitive diesel assistance, investment, new
environment, forces -higher uncertainty and connectivity and capitalisation
including Brexit incentives emissions mobility trends policy
compliance
Growing premium Exciting new Improve operating Drive cost Modular
segments products leverage efficiencies architecture
strategy
FY18 Long term
EBIT Profit improvement drivers EBIT Target
3.8% Target 4 – 7% EBIT in the medium term 7-9%
- 19 -JLR targeted segments by region
Broa d grow th a cross re gions
(Units in millions)
CAGR 2.6%
7.7
0.4
6.6 UK CAGR 0.8%
1.1
0.4 Overseas CAGR 4%
0.9
Europe CAGR 1.6% 1.4
1.3
2.1
2.0 North America CAGR 1.2%
2.1 China Region CAGR 4.2% 2.7
FY18 FY19 FY20 FY21 FY22 FY23 FY24
Source: IHS Automotive May 2018, JLR Segmentation 2018
- 20 -Continued volume growth expected
Ne w mode ls, ne w se gme nts a nd pre mium se gme nt grow th
1,000
Full year of New models
Premium
Velar, in new
New model Product cycle and SUV
E-PACE, XE segments
I-PACE timing segment
LWB, and EV
growth
800 18MY RR & RRS demand
600
400
200
0
FY18 FY19 Long term
- 21 -16 nameplates by FY24
I-PA CE now la unche d, ne w De f e nde r a nd 2 more to come
LUXURY SPORTS LIFESTYLE LUXURY – RANGE ROVER LEISURE - DISCOVERY DUAL PURPOSE - DEFENDER
XJ F-TYPE Coupe F-PACE RANGE ROVER ALL NEW DISCOVERY LAND ROVER DEFENDER
Replacement in development
XF SPORTBRAKE E-PACE RANGE ROVER SPORT DISCOVERY SPORT
XE
plus 2 additional
nameplates to come…
I-PACE RANGE ROVER VELAR
XE
XFL
RANGE ROVER EVOQUE VELAR, F-PACE & E-PACE
Range Rover
F-PACE & E-PACE
- 22 -Ambitious electrification plans
To me e t custome r inte re st, die se l a nd e missions cha lle n ge s
Range Rover and Range Rover and MHEV, PHEV or BEV on all new MHEV, PHEV or
Range Rover Sport Range Rover Sport and replacement models, starting BEV available on
Diesel Hybrids PHEVs with I-PACE BEV in 2018 all JLR models
2014 2017 2018 2019 From 2020
EV
2 2 3 6 14
Nameplates
- 23 -Investing in Modular Longitudinal Architecture
To ena ble cost e f f icie ncie s a nd f le xibility a cross pow e rtra i ns
ICE & MHEV PHEV BEV
EDU
EDU
Battery
Battery
Battery
EDU
ICE
ICE‘Charge’ cost efficiency initiatives underway
Sourcing & Manufacturing & Marketing & Sales Corporate &
Engineering
Negotiation Logistics Admin
£
MLA and design for Total value management Harbour benchmarking. S&OP to balance supply Manage SG&A cost
increased flexibility, and should design @ New state of the art intl and demand to reduce inflation and achieve
commonality, should cost. manufacturing (eg. SK, inventory and VME economies of scale
standardisation and CN), and in-sourcing costs
scale without Economies of scale and (e.g. engines). Pension restructuring
unnecessary complexity improving logistics and Synergies across both
flexibility, e.g. CN, HU, SK brands
- 25 -‘Accelerate’ transformation initiatives
To be come “Fit f or Future ” in the me dium to long te rm
Product & Sales Material Cost On-time Product Quality Resourcing &
programmes People
Customer Value “Should Design” Optimised Mindset & process Role and process Experiences
based product and resource planning discipline clarity customers love
feature offerings for life
Customer- “Should Cost” Drive consistency, Integrate and Accountabilities
targeted commonality & collaborate with and systems
promotion modularity vendors
effectiveness
Network coverage Purchase lifecycle Step up risk & Retailer service Enterprise
and enhancement planning change capability and resource planning
management capacity
Top Management Commitment
- 26 -Continuing to assess investment plans
Financial management
• Return on investment
Products • Affordability of overall spend versus operating cashflows
• Investment % Revenue
Compliance Architecture
• Capex to D&A ratio
Efficiency drivers
Investment priorities
• Architectures - MLA
Infrastructure ICE to ACES • Commonality
• Flexibility
• Execution
Efficiency
Investment of c. £4.5b p.a. between FY19-21 and
subsequently targeted at c. 12-13% of turnoverConclusion
JLR is implementing plans to achieve sustainable profitable growth with
positive cash flow over the medium to long term, including:
• Sales growth supported by new products and technology but Medium term targets
assuming lower growth rates to reflect recent experience Volume growth > Premium Segments
• Improving contribution margins through driving cost efficiencies EBIT % 4-7%
and operating leverage across the business
Investment c. £4.5b p.a in FY19-21
• Continuing to invest in world class capabilities and infrastructure,
prioritised to meet affordability criteria whilst remaining
competitive and innovative
• Cash flows targeted to improve as we deliver on these plans; but
will remain negative in the near term.
Long term targets
Volume growth > Premium Segments
EBIT % 7-9%
We are committed to achieving sustainable profitable growth
Investment c. 12-13% of Revenue
with positive cash flow in the medium to long termThank You Bennett Birgbauer Jaguar Land Rover
Treasurer, Jaguar Land Rover Abbey Road, Whitley, Coventry
CV3 4LF
Jaguar Land Rover Investor Relations Jaguarlandrover.com
investor@jaguarlandrover.com
- 29 -ADDITIONAL SLIDES
Q1 FY19 Loss before tax £264m
China duty cha nge , de -stoc k i ng a nd FX re va lua tio n drove loss
IFRS, £m
Wholesales China duty Warranty credit D&A £(99)m FX reval
down 14k vs. related in prior year £(189)m incl.
retails, 11.3k Slovakia and £73m FY18
de-stocking and Graz plant costs non-recur gain
2.7k WLTP
Commodity FX net hedging
China JV profits costs £138m
175 133 (80)
125
75 (99)
25
(25) (90)
(75)
(125) (86)
(175)
(42)
(225)
(275)
(264)
(325)
PBT (excl. Volume, mix Net Contribution Structural FX & Unrealised PBT
exceptionals) & market pricing costs costs Commodities Q1 FY19
Q1 FY18
EBIT 1.2% (3.4)% (1.6)% (1.6)% 1.7% (3.7)%
- 31 -Seasonal profitability and cash flow PBT Q1 Q2 Q3 Q4 Full Year FY19 (264) n/a n/a n/a n/a FY18 571 385 192 364 1,512 FY17 399 280 255 676 1,610 FY16 638 (157) 499 577 1,557 Free cash flow Q1 Q2 Q3 Q4 Full Year FY19 (1,674) n/a n/a n/a n/a FY18 (1,308) (25) (661) 949 (1,045) FY17 (661) 26 27 748 140 FY16 (861) (273) 429 1,349 644
Changing powertrain mix
JLR expects EV to accou nt for 20% of sales medium term
JLR UK sales JLR global sales
CYTD 2017 CYTD 2018
Petrol PHEV/EV BEV
7% 1% ~5% ~20% and
Petrol
14% PHEV’s
Diesel Diesel
93% Diesel 85%
~60% ~50% Petrol
JLR EU sales
CYTD 2017 CYTD 2018
Petrol PHEV/EV
10% ~95% ~91% ~87%
Petrol ~87% 1%
15%
Diesel
~35% ~30%
~91%
Diesel 90% ~87%
Diesel 84%
Near-term Medium-termGlobal JLR segment volumes Grow ing JLR se gme nts Source: IHS Automotive May 2018, JLR Segmentation 2018 - 34 -
Investment in new models, technology, capacity
Signif ica nt inve stme nt in e le ctrif ica ti o n a nd MLA
Long term R&D and capex Long term Investment by activity
R&D expensed, Electrification,
10% 13%
Capacity &
Other, 27% Other
powertrain,
9%
Capital R&D
investment, capitalised,
55% 35%
Products,
51%
Product development capitalisation policy change resulting in capitalisation of c. 70% from c. 85%, effective 1 April 2018
- 35 -Jaguar I-PACE recently launched
Grea t re ce ptio n a nd strong de ma nd
Order Book
c. 5.5 months order cover
20k units over
2020 -21
- 36 -You can also read
