MCLAREN FY2018 RESULTS - APRIL 25, 2019 - MCLAREN INVESTORS
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McLaren FY2018 Results ▪ April 25, 2019
2 2 | McLaren FY2018 Results Highlights
3 | McLaren FY2018 Results
Automotive Racing Applied Technologies
FY2018
◼ FY2018 was a record year for production with 4,863 vehicles delivered in comparison Revenue by division Car volumes by region
to 3,329 delivered in FY2017, growth of 46% on the prior year
◼ Vehicle wholesales totalled 4,829 (3,340 in FY2017), Automotive global sales
volumes up 45% and revenue up 76% year on year Applied Technologies Formula 1
5% 11%
Europe North
◼ Strong order book through out 2018 with continuation of positive order growth 33% America
into 2019. Ultimate Series remains sold out. Super Series sold out into Q3 2019 36%
with strong Sports Series 600LT and 600LT Spider orders for delivery into H2
2019; total order book 1,856 units
Rest of
◼ McLaren Automotive have produced more than 18,000 cars since production World APAC, ex.
commenced in 2011 Automotive 6%
China China
84%
7% 18%
◼ FY2018 Group revenues £1,257m (FY2017 £871m) driven by Automotive volumes an
increase of 44%, 2018 Adjusted* EBITDA £143m
*Adjusted EBITDA excludes exceptional costs for restructuring
4 | McLaren FY2018 Results
Automotive Racing Applied Technologies
FY2018
◼ 259 McLaren Senna now delivered to customers. The first McLaren 600LT coupes delivered to customers during the year. McLaren
‘Speedtail’ first production-bodied prototype commences road testing
◼ McLaren finishes sixth in the Formula 1 World Constructors’ Championship, a forward step from the ninth place in 2017. The 2019
driver line up of Carlos Sainz and Lando Norris confirmed and new sponsor partnerships announced
◼ Applied Technologies continues to grow its core strengths across Automotive, Motorsport, Public Transport and Health segments
◼ McLaren Holdings Limited finalised the Corporate Simplification of its subsidiaries in January 2019 formalising the organisational
restructuring of the group first announced in 2017
5 | McLaren FY2018 Results Business Update
6 | McLaren FY2018 Results
Automotive
7 | McLaren FY2018 Results
McLaren Automotive – New models revealed
▪ McLaren Speedtail revealed
▪ Limited edition of 106 to be
delivered from 2020
▪ McLaren Senna GTR
▪ Announced and fully allocated
▪ Delivery in 2019
▪ McLaren 720S Spider revealed
▪ Commencing production in 2019
8 | McLaren FY2018 Results
McLaren Automotive – 2018 production highlights
▪ McLaren Senna commenced
production
▪ 259 delivered in 2018
▪ All 500 sold out in advance
▪ McLaren 600LT in production
▪ H1 2019 sold out strong order book
into H2 2019
9 | McLaren FY2018 Results
McLaren Special Operations - MSO
▪ Strong revenue growth of 201% versus 2017
▪ 2018 Order book value has trebled
▪ Growth across all aspects of MSO
▪ Defined options
▪ Bespoke features
▪ MSO Limited Collections
▪ Heritage
▪ Aftermarket
▪ MSO content on Senna orders exceeded plan and reflected
enhanced customer engagement. Senna metrics included
producing more than 12,000 different images of Senna livery
designs for customers
▪ Strong demand of MSO content on 600LT pre-orders
▪ Strong demand for Limited Editions including regional / dealer
commissions, e.g. Racing Through The Ages collection for
McLaren Beverley Hills
10 | McLaren FY2018 Results
Exceptional Press Reviews
▪ McLaren Automotive has been 2018 Award Highlights
recognised globally with 23
McLaren Senna
International awards in 2018 EVO – Hyper Car of the Year
▪ The 600LT won EVO’s Car of the Top Gear – Wing of the Year
Autocar – Five Stars
Year. Following the win of the 720S
in 2017 720S
Road & Track – Performance
▪ McLaren Automotive was named
Car of the Year
Britain’s Most Admired Car
Company. An achievement that 600LT
EVO – Super Car of the Year
was reached in less than eight
EVO – Car of the Year
years in production11 | McLaren FY2018 Results
2018 awards & achievements
MotorTrend World’s Greatest Automobile All Star – Automotive Video Road & Track Performance Festival Automobile Robb Report Best
Drag Race 8 Winner – McLaren McLaren 720S Association Performance Car Car of the Year 2018 – International de Paris Most of Best – McLaren
720S of the Year 2018 – McLaren McLaren 720S Beautiful Supercar – McLaren 720S
720S 720S
Autoguide.com Readers Motorsport FR Sport Auto FR 5 China Performance Car Evo Car of the Year – The Best 10 China Autocar Britain’s Best
Choice Exotic Sports Car of Sports Car of the Star Car – McLaren of the Year 2018 – McLaren 600LT Performance Car of the Drivers’ Car – McLaren
the Year – McLaren 720S Year – McLaren 720S McLaren 720S Year 2019 – McLaren 600LT
720S 600LT
GQ Magazine ‘Technological Autocar 5 Star Car 2018 Sao Paulo Motor Top Gear Magazine Wing of Auto Bild Readers’ Auto Bild Klassik -
Hedonism’ award – McLaren - McLaren Senna Show – Best Car of the the Year – McLaren Senna Choice Award – McLaren Senna
570S Spider Show Award - McLaren McLaren Senna
Senna12 | McLaren FY2018 Results MCTC opened and operational ▪ In November, The Duke and Duchess of Cambridge and the Crown Prince of Bahrain opened the £50m McLaren Composites Technology Centre (“MCTC”) in Sheffield ▪ The MCTC will help the company further innovate and produce lightweight carbon fibre ‘tubs’ that will enable it to deliver the lightest in class products ▪ The MCTC currently employs around 60 people which will rise to over 200 when full production commences in 2020 ▪ Carbon fibre has long been part of McLaren’s DNA, the company having first introduced the material into Formula 1 in the early 1980s
13 | McLaren FY2018 Results
AUTOMOTIVE - TRACK25
On a fast track to an exciting and successful future
Independent 100% 18
and strong member Electrification by end of New cars or derivatives by 2024
of the McLaren Group the business plan period
A successor to the
£1.2 billion 6000 McLaren P1™
invested in research and Sports and supercars to be
development by 2025 produced annually from 2024
Battery development
The McLaren of EVs14 | McLaren FY2018 Results
Global Volume Growth: FY2018 Europe – 43%
China – 141%
North America – 42%
1,599
1,748 1,115 354
1,234 147
RoW – (7%)
APAC – 57%
306 285
843
538
▪ Demand continues with a 45% increase in year on year volumes coupled with continued sales growth across
the major regions of North America, Europe and APAC including China
▪ Strong China volume growth year on year with all series now on sale in 2018 versus 2017 when 570S and
720S only available for part of the year
▪ North America and Europe performing strongly against prior year
▪ RoW declined due to a weaker middle east region, however, volume remains good at 28515 | McLaren FY2018 Results
Racing16 | McLaren FY2018 Results
2018 in focus
Identifying and improving the fundamentals
▪ McLaren improved to 6 th place in 2018 from 9 th in 2017 in the constructors championship, increasing
prizemoney for 2019 and instigating clear plans to return to improved competitiveness in future years
▪ The Renault partnership completes its first year
▪ The 2019 MCL-34 car development and build successfully completed following an earlier commencement
in the year in line with new regulations
▪ Driver line up for 2019 of Carlos Sainz, Lando Norris and Sergio Sette Camara joining the team in the
role of Test and Development Driver
▪ New key F1 management positions complete including Andreas Seidl and James Key both joining in
2019
▪ Increased levels of sponsorship signed in 2018
▪ McLaren Racing announces its return to the Indianapolis 500 in 2019 with Fernando Alonso, as he
attempts to become only the second driver in history to achieve the Triple Crown of world motorsport:
winning the Formula 1 Monaco Grand Prix; the 24 Hours of Le Mans; and the Indy 50017 | McLaren FY2018 Results
The sporting environment
F1 Sporting Environment
▪ Teams continue to work constructively with the commercial rights
holder FOM and the Technical Regulator FIA towards making the
sport a more sustainable long term proposition
▪ Formula One Management (FOM) have recently revealed to the teams a revised income
distribution model for Prize Money, a proposed cost cap for Formula 1 starting in 2021
and achieving a target cost base in 2023 as well as revised governance plans. McLaren’s
Board of Directors have discussed these proposals with FOM management and are
working towards a target agreement date during 2019
▪ The FIA and financial staff from the teams have drawn up draft financial regulations to
support these commercial aims with strict governance, transparency and reporting
requirements
▪ The subject of what intellectual property and parts can be shared between teams
continues to be the subject of much debate as the sport evaluates the impact of
customer teams and the business model implications for all
▪ McLaren supports control of costs and strategic growth plans for Formula 1 and
recognises the fundamental challenges of the existing business model of the sport. We
are also actively involved and see great value potential in embracing the digital
technologies and marketing platforms including e-sports18 | McLaren FY2018 Results
Applied Technologies19 | McLaren FY2018 Results
Digital Technologies at the intersection of technology and human ingenuity
Motorsport Automotive
Automotive Public Transport Health
▪ 3rd Generation Standard ECU ▪ Autonomous vehicle ▪ LNER passenger ▪ Wearable digital
for F1 manufactured and partnership development reservation system orthopeadic device
delivered to teams for start of programme ongoing installed, now live development continues
2019 season ▪ Sales prospect focus on to progress
▪ New Virgin Trains West
▪ 2nd Generation Formula E our Vehicle Dynamic Coast WIFI programme ▪ Health analytics platform
batteries shipped to all teams Simulator underway and being showing strong interest
and performed as planned in deployed on trains ▪ Young racing driver
first race of season 5 in
▪ Singapore proof of concept accelerator programme
December 2018
opportunities on condition designed and marketed
▪ Development of F1 data based maintenance in with good new driver
visualisation tool ‘Atlas 10’ development uptake
FY2018 Revenue (£m) McLaren Deloitte Collaboration
65 ▪ Developing SupplyCycle, an advanced modelling, optimisation & simulation tool for manufacturing
59
▪ Development and marketing of Aviation Performance Optimiser, an advanced modelling, optimisation &
simulation tool for airspace management, in conjunction with National Air Traffic Control (NATS)
▪ Concepting of Airports Operations Performance Predictor, an optimisation tool for airport ground
2017 2018 movements20 | McLaren FY2018 Results Financials ▪ FY2018
21 | McLaren FY2018 Results
Results
Automotive wholesale volumes Revenue (£m) Adjusted EBITDA (£m)
4,829
1,257 143
3,340
871
65
FY2017 FY2018
FY2017 FY2018 FY2017 FY2018
▪ Significant Automotive improvement in
▪ First year all three series on sale with a ▪ 45% increase in wholesales volumes in FY Adjusted EBITDA between 2017 and 2018,
strong volume performance in the Super and 2018 compared to FY 2017 reflected in covered on following slide
Ultimate Series Revenue
▪ Racing EBITDA reduction in line with revenue
▪ Order books for Super Series and Sports ▪ Favorable sales mix in 2018 with 87% volume decrease
Series remain strong with dealer allocations growth in Super Series and 259 Ultimate
continuing to reflect customer demand Series vehicle sales compared to nil in 2017 ▪ Improved Applied Technologies positive
movement year on year
▪ Ultimate Series remains sold out. Sports ▪ Revenue in Racing impacted by reduced
Series orders transition into 600LT as partnership income and reduced prize money
expected. Super Series orders on 720S Spider reflecting Constructors championship position
strong and sold out into Q3 2019 in prior year22 | McLaren FY2018 Results
FY2017 – FY2018 EBITDA Bridge
▪ Significant improvement in Automotive as production rates were consistently achieved resulting in a sales volumes
increase of 45%, with 2017 impacted by the implementation of SAP, McLaren 720S launch and 570S Spider launch
▪ Favourable sales mix included a shift from Sports to Super Series, and 259 Ultimate Series, compared to nil in 2017
▪ Racing EBITDA declines in line with reduced sponsorship and partnership income23 | McLaren FY2018 Results
Net Debt & Liquidity
▪ Gross debt reflects $250m and
FY2018 £370m 5-yr Senior Secured Notes
issuance in July 2017
Gross debt1 562
▪ First £100m tranche of new Equity
Cash and cash equivalents (97) received in H1 2018, second tranche
of £50m received in November
Underlying net debt1 465
▪ £90m RCF, £78m available
Net Leverage / Adjusted EBITDA2 3.25x
▪ Cash utilisation due to investment in
new models (Senna, 600LT and
Speedtail) and the development of
the Formula 1 car for 2019 season
Undrawn committed liquidity and
78
overdraft lines3 ▪ Positive cash inflow in Q4 2018 as
EBITDA delivered and new equity
Total available liquidity 175 received
Senior Secured Notes (SSNs) outstanding of £550m plus £12m accrued interest. The SSNs includes £16m capitalised fees and revaluation FX loss £2m
2 Net Leverage includes reported gross debt £562m plus overdraft £1m less cash of £98m and Adjusted EBITDA of £143m excluding exceptional items of £7m
3 Consists of RCF £90m less committed drawn Ancillary Lines (bank guarantees)24 | McLaren FY2018 Results Appendix
25 | McLaren FY2018 Results
Group Overview26 | McLaren FY2018 Results
Summary Income Statement
1 Includes FX gains and losses apart from FX on translation of USD bond
2 Includes FX on translation of USD bond27 | McLaren FY2018 Results Group Cash Flow Statement
28 | McLaren FY2018 Results
EBITDA by company
*Racing includes the sale of heritage cars, £10.0m (FY2018) and £27.5m (FY2017)29 | McLaren FY2018 Results Reconciliation of McLaren Group and McLaren Holdings
30 | McLaren FY2018 Results
One Outstanding Luxury Automotive & Technology Group
Automotive Racing Applied Technologies
◼ Offering the ultimate ownership experience ◼ Legendary racing history ◼ Delivering advantage at the intersection of physical
creating the iconic sportscar and digital
◼ 20 Formula 1 World Championships
◼ 18,000+ road cars hand-assembled to date ◼ Customers in Motorsport, Automotive, Public
Transport and Health
Highlights Sales and car volume split
Revenue by division Car volumes by region
◼ Global leader in high-performance luxury and technology offering the
ultimate ownership experience Applied North
Formula 1 Europe
Technologies 11% America
33%
◼ 55 year history of innovation and technical excellence 5% 36%
◼ Group revenue and cash generation underpinned by Automotive order
book and production capacity now demonstrated
Rest of
◼ Latest McLaren “Speedtail” continues to demonstrate the success of Automotive World APAC,
84% China ex. China
McLaren product pipeline + strength in brand 6%
7% 18%31 | McLaren FY2018 Results
McLaren has a long history rooted in Racing & Innovation
Success in racing created a culture of outstanding performance, excellence and innovation32 | McLaren FY2018 Results
McLaren has a long history in Racing & innovation
▪
▪
▪
▪
Success in racing created a culture of outstanding performance, excellence & innovation33 | McLaren FY2018 Results
Globally recognized brand
World-class car platform built on a foundation of racing success
Successful racing performance led to a culture of innovation & excellence, enabling success in cars
The only company to win each of the 4 classic competitions: Formula One, Le Mans, Indianapolis and Can-Am
12C P1 650S 675LT 570S 720S
Launched year: 2011 Launched year: 2013 Launched year: 2014 Launched year: 2015 Launched year: 2015 Launched year: 2017
2012 2013 2015 2016 2016 2017
Dewar Trophy for Outstanding British Best
Ranked #1 in car reviews of 2012 EVO Middle East Car of the Year: Five Star Award
Technical Achievement China Performance Car of the Year Performance Car
Jalopnik Supercar of the Year 675LT Coupé AUTOCAR & EVO
Royal Automobile Club Auto Express New Cars Awards
& Evo2012 2013 2014 2016 2015 2017
James May’s Car of the Year Jeremy Clarkson’s Car of the Year Supercar of the Year Car of the Year Best Car on Sale – Best Every Day Supercar Performance Car of the Year
BBC Top Gear Magazine BBC Top Gear Magazine AUTOCAR ASEAN CAR Magazine (675LT Spider) BBC Top Gear BBC Top Gear & Road and Track
2012 2013 2014 2016 2016 2017
Best Sports Car Over £120,000 Hypercar of the Year Performance Car of the Year Hardcore Car of the Year: Best Car on Sale Super Car of the Year
What Car? BBC Top Gear Magazine Auto Express Top Gear (675LT Spider AUTOCAR Octane & EVO
2012 2013 2014 2016 2017
Hypercar of Middle East Car
Car of the Year Best of the Best Sport Car of the Year
the Year of the Year Awards
Middle East Motor Awards Red Dot Design Award CAR Magazine
GQ Best Supercar
Every model won multiple prestigious awards for unique technology and design34 | McLaren FY2018 Results
Automotive operates in four distinct segments
Sports Super Ultimate Motorsport
▪ Brings McLaren’s advanced ▪ Super Series is the core of ▪ High performance cars ▪ Track cars built for racing
technologies to the sportscar McLaren's range with the best ▪ Built on the same basis as the ▪ Based on road car models but
arena, with a lower price point technology available Super series with additional
Description without road car regulations
than other McLaren series ground-breaking technology
▪ Derivatives include Coupe, and built to a racing
▪ Further track-only products
▪ Derivatives include Coupe, Spider and LT limited editions specification
offers
Spider, GT and LT limited
▪ editions
540C, 570S, 570S Spider, ▪ 650S, 650S Spider, 720S, 720S ▪ P1, P1 GTR, McLaren Senna, ▪ 650S GT3, 570S GT4 and 570S
Models
570GT, 600LT Spider McLaren Senna GTR, Speedtail Sprint, 720S GT3
▪ Best power-to-weight ratio of ▪ High performance super cars ▪ Includes the first hybrid hyper ▪ Strictly limited editions for
sports car range in their class with track performance car in the world racing only
Features
▪ Lightweight construction with ▪ Strictly limited production, sold
▪ One-piece MonoCage II carbon
out years in advance
carbon chassis (75kg) body
Purpose ▪ Road / GT ▪ Road / track ▪ Road / track ▪ Track
Price range ▪ £125-200k ▪ £200-300k ▪ >£500k ▪ £200-400k
MSO1 Experiences Ownership
✓ Bespoke customisation options ✓ Pure McLaren track experience ✓ Expert advice and support
✓ Limited editions and one-off models ✓ Pure GT racing series ✓ Unique service cover
✓ Lifestyle and heritage
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