MCLAREN H1 2019 RESULTS - AUGUST 28, 2019 - MCLAREN INVESTORS
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McLaren H1 2019 Results ▪ August 28, 2019
2 | McLaren H1 2019 Results Highlights
3 | McLaren H1 2019 Results
Automotive >> Racing >> Applied Technologies
H1 2019
Revenue by division
Strong positive profit growth momentum in H1 2019 supporting Automotive Track25
Applied
investment plans Technologies
Racing
11%
4%
◼ H1 2019 Group revenues £698m up 36% versus £511m in H1 2018, driven by
Automotive volume growth, Ultimate Series sales and an improvement in Racing results
◼ H1 2019 Reported EBITDA £81m up 553% versus £12m H1 2018
Automotive
◼ H1 2019 LTM Revenue £1,443m as a result of improved Automotive wholesales during H1
85%
2019
Car volumes by region
◼ H1 2019 LTM Reported EBITDA £204m up 50% since FY2018 (£136m) Europe
26%
◼ H1 2019 production delivered 2,640 vehicles in comparison to 2,504 in H1 2018 (5.4%
growth) Rest of World
North
America
5% 48%
◼ Racing recovery continues, with Reported EBITDA improvement in the first half driven by
China
increased prizemoney from finishing 6th (versus 9th in 2017) in the Constructors 4%
Championship in 2018 and improved sponsorship revenue
APAC, ex. China
17%
4 | McLaren H1 2019 Results
Automotive >> Racing >> Applied Technologies
H1 2019
◼ McLaren Automotive continues to deliver strong positive growth in H1 2019
◼ Vehicle wholesales in H1 2019 totalled 2,335 (2,178 in H1 2018) up 7.2%. 600LT Spider, 720S Spider and
McLaren Senna models driving volume
◼ Total committed order book at H1 2019 was 1,925 units with Ultimate Series sold out, Super Series and Sports
Series 600LT Spider sold out into Q4, McLaren GT order book building with first orders received following
launch in May
◼ New McLaren Ultimate Series vehicle announced with a limited production of 399 cars, commencing in 2020
◼ Sports and Super Series remain in demand with increasing interest in the new GT series
◼ 476 McLaren Sennas now delivered to customers with remaining vehicles delivered in early Q3 2019
◼ McLaren currently 4th in the Formula 1 World Constructors’ Championship at the summer break after 12 races
◼ McLaren announces strategic partnership with Arrow Schmidt Peterson Motorsports (Arrow SPM) and Chevrolet
racing as Arrow McLaren Racing SP for a return to IndyCar in the 2020 NTT IndyCar Series
5 | McLaren H1 2019 Results
Key Metrics (H1 2018 vs H1 2019)
◼ Revenue (£m) ◼ Net Debt (£m)
+36% N.B. Proforma Net Debt
represents the position had the
new financing completed in July
been in place at H1 2019
◼ EBITDA1 (£m) ◼ Liquidity (£m)
+553%
◼ Wholesale Volume ◼ F1 Championship
(Units) points 4th
+7% 6th
Currently 4th after 12 races
1 Reported EBITDA
6 | McLaren H1 2019 Results Business Update
7 | McLaren H1 2019 Results
Automotive
8 | McLaren H1 2019 Results
McLaren Automotive – 2019 highlights
▪ New GT
▪ order book building with first orders received
following launch in May
▪ 600LT Coupe and Spider
▪ Coupe allocation now complete
▪ Spider variant orders into Q4 2019
▪ 720S Spider
▪ 2019 order book now fully allocated
▪ McLaren Senna
▪ All 500 sold out in advance
▪ 476 delivered at end of H1 2019
▪ Production complete end of August
▪ McLaren Senna GTR
▪ Commences production in H2 2019; all sold
▪ Speedtail
▪ Pre-production models progressing well - first deliveries in Q1 2020
9 | McLaren H1 2019 Results
Global Volumes - H1 2019
Europe (17%)
China (26%)
North America +32%
739
611 114
850 1,125 84
RoW (4%) APAC +13%
128 123 392
347
Global wholesale volumes
+7%
2,335
▪ Demand in North America and Asia Pacific markets strong
2,178
▪ European performance good despite some overall market weakness
▪ China variance due to timing, on place to deliver the same volume
H1 2018 H1 2019 as 2018
10 | McLaren H1 2019 Results
The new McLaren Ultimate Series
◼ All new Ultimate Series McLaren supercar
◼ Focused on the exhilaration of pure, open-top driving
◼ Limited to 399 examples, the two seat open cockpit
roadster offers the purest distillation of road focused
driving pleasure and an unrivaled sense of driver
connection with the surrounding environment
◼ Designed more for the road than the track with
extensive use of carbon fibre will make it the lightest
car McLaren has produced, powered by a version of
the twin-turbocharged V8 engine currently employed
in the McLaren Senna to ensure breath taking
performance
◼ Deposits commencing H2 201911 | McLaren H1 2019 Results
McLaren Special Operations (MSO)
MSO is a rapidly growing segment of the Automotive business
driving up average selling price and customer appetite across all
Series
▪ MSO is able to offer the complete tailoring of any McLaren model
MSO Defined
▪ This range of series options forms the first of the five tiers of
personalisation offered by MSO, and is offered through McLaren retailers
MSO Bespoke
▪ MSO Bespoke offers a near limitless level of tailoring to its customers. It
may be a unique exterior paint, or a personalised interior with custom
leather and stitching colours or unique carbon fibre customisation
Series Models % of cars with MSO content
Sports 570S, 570S Spider, 600LT, 600LT Spider >60%
Super 720S, 720S Spider >65%
Ultimate McLaren Senna >75%12 | McLaren H1 2019 Results
Racing13 | McLaren H1 2019 Results
Formula 1 World Championship
Delivering improved performance on track
Formula 1 - on track
▪ A good first half of season – currently 4 th with 82 points in the constructors championship compared to
6 th and 52 points in 2018 after 12 races
▪ The car remains competitive on track and the gap to the fastest cars lessens during 1 st half of season
▪ Improvements in reliability and operational competitiveness (pit stops / launches / race strategy) have
been realised with further developments to come
▪ It was confirmed that Carlos Sainz and Lando Norris will continue as McLaren F1 drivers for the 2020 FIA
Formula 1 season
Formula 1- off track
▪ Key management positions now filled with a focus on development and improvement of methodologies,
production and digital transformation to further support the forward steps made in 2019
▪ On track improvement coupled with reducing losses from F1
▪ Revenue targets achieved with more sponsor partnerships than any other F1 team this year, now focussed
on 2020
Sporting environment
▪ New F1 financial (cost cap of $175m) and technical regulations for 2021 onwards due to be signed in
October 201914 | McLaren H1 2019 Results
IndyCar 2020
Arrow McLaren Racing SP
IndyCar 2020
▪ McLaren will return in 2020 to IndyCar for the full season
▪ This new venture will give Racing a significant commercial advantage over
other F1 teams, none of which have such a significant racing presence in North
America
▪ Whilst the commercial opportunities are significant, the cost of competing are
not expected to be material due to the low cost (compared to F1) of competing
in IndyCar and the sponsorship arrangements the team already have in place
▪ Strategic partnership with Arrow Schmidt Peterson Motorsports (Arrow SPM)
and Chevrolet
▪ McLaren last competed in IndyCar in 1979
▪ The partnership will be named Arrow McLaren Racing SP
▪ The partnership will see the infrastructure of Arrow SPM underpin the team’s
operations
▪ McLaren Racing will add the technical expertise, commercial experience and
marketing strength to enable the new entity to perform at the highest
competitive level and regularly challenge for wins and the series title15 | McLaren H1 2019 Results Financials ▪ H1 2019
16 | McLaren H1 2019 Results
Results – H1 2019
Automotive wholesale volumes Revenue (£m) Reported EBITDA (£m)
2,335
698 81
511
2,178
12
H1 2018 H1 2019 H1 2018 H1 2019 H1 2018 H1 2019
▪ All three series - Sports, Super and ▪ Revenue growth of 36% as a result of ▪ Improvement in Automotive Reported
Ultimate - on sale during the first half having the full Series range (Sports, Super EBITDA H1 2019 driven by Ultimate Series
▪ Order books for Sports Series and Super and Ultimate) on sale in H1 2019 vs H1 on sale in H1 2019
Series remain strong with dealer 2018 ▪ Sale volumes and mix have also
allocations continuing to reflect customer ▪ Racing revenue increased due to higher contributed to the growth in Automotive
demand level of prizemoney, reflecting the Reported EBITDA
▪ Strong H1 for deliveries and on track to improved Formula One Constructors’ ▪ Racing Reported EBITDA reflects the
deliver a similar number of units to last Championship position in 2018 increased revenue versus the prior year
year17 | McLaren H1 2019 Results
H1 2018 – H1 2019 Reported EBITDA Bridge
+553% growth
▪ Automotive Reported EBITDA growth driven by strong sales volumes, model mix and regional mix impacts along with all
three series on sale in H1 2019, whereas predominantly only Sports and Super Series on sale in H1 2018
▪ Automotive sales, marketing and administration costs increased as a result of all three series in production and higher
volumes versus prior year
▪ Racing Reported EBITDA driven by higher prize money following the improved 2018 Championship result and better than
planned sponsorship revenues
▪ Heritage cars negative in reflecting a lower number of heritage car sales in H1 2019 versus prior year18 | McLaren H1 2019 Results
Net Debt & Liquidity
▪ Gross debt reflects $250m and £370m 5-yr Senior
Secured Notes issuance in July 2017
▪ Proforma H1 2019 Gross debt reflects the
position as if at that time the new July financing
of $100m Senior Secured Notes was drawn and
the SSRCF was undrawn
▪ During July, new facilities were entered into
increasing the SSRCF to £130m along with a
short term credit facility of $24.9m (undrawn)
▪ Cash utilisation in H1 driven by investment in
new models (720S Spider, 600LT Spider, new GT
and Speedtail) and the development of the
Formula 1 car for 2019 season
▪ Capex investment in Q2 2019 inline with prior
year and lower than Q1 2019, on track to invest
the same amount as 2018
1 Gross debt is equal to Senior Secured Notes (SSNs) outstanding of £564m plus £12m accrued interest. The SSNs includes £14m capitalised fees and revaluation FX loss £3m
and drawn SSRCF of £50m , Pro-forma includes new $100m Notes adjusted for transaction fees, SSRCF undrawn
2 Net Leverage includes reported gross debt £615m less cash of £16.5m and LTM Reported EBITDA of £204m, Pro-forma includes new $100m Notes, cash £37m
3 Consists of RCF £110m less committed Ancillary Lines £14.5m (bank guarantees) and SSRCF £50m, Pro-forma £130m SSRCF less Ancillary Lines (bank guarantees) plus Senior
USD undrawn s/term facility of $24.9m19 | McLaren H1 2019 Results
Free Cash Flow
Investments
▪ Intangible assets in 2019 increased due to continued growth in new
product development in the Automotive business. The increase is
due to the phasing of the spend in the year and the launches of the
various products; Automotive is launching four new products in
2019 as opposed to two in 2018
▪ Investment spend will be similar to 2018
Financing
▪ New equity received during H1 2019 completes majority of new
investment by Nidala (BVI) Limited first announced in H1 2018
Working Capital
▪ Debtors increased as a result of timing of wholesales in the quarter
including a significant number of Ultimate Series cars compared
to the comparative period
▪ Creditors are lower despite trade creditors being marginally up due
to timing of spend. Offsetting this increase is a lower trade finance
balance than last year due to sales mix, with US and Ultimate series
cars not currently trade financed
▪ Expect working capital to be flat by the end of the year20 | McLaren H1 2019 Results
New facilities – July 2019
H1 2019 H1 2019
▪ On the 12 July 2019 the Group entered into financing Debt Facilities Pro-forma
arrangements equivalent to $150.0m, consisting of:
▪ a private placement of an additional $100.0m (5.75% due SSRCF SSRCF
2022) £110m £130m
▪ £15m guarantees ▪ £15m guarantees
▪ incremental commitments under its existing super senior ▪ £40m overdrafts ▪ £40m overdrafts
revolving credit facility of £20.0m and ▪ £55m SSRCF ▪ £75m SSRCF
▪ c. $24.9m under a separate US dollar-denominated short- (Libor +3.5%) (Libor +3.5%)
term credit facility (undrawn)
Senior Notes Senior Notes
▪ The new facilities and debt added to the liquidity headroom eq.£564m eq.£642m
▪ £370m 5.0% ▪ £370m 5.0%
available to the Group and was raised to give flexibility over the ▪ $250m 5.75% ▪ $250m 5.75%
next 18 to 24 months around the launch of new products ▪ $100m 5.75%
▪ The Group is now better placed to respond to changes in USD Senior
customer demand and competitor actions s/term facility
eq.£19.8m
▪ $24.9m
(Libor+5.0%)21 | McLaren H1 2019 Results Appendix
22 | McLaren H1 2019 Results
Group Overview23 | McLaren H1 2019 Results
Summary Income Statement
1 Includes FX gains and losses (excluding FX on translation of USD bond), H1 2019 £12m loss, H1 2018 £1m gain.
2 Includes FX on translation of USD bond24 | McLaren H1 2019 Results Group Cash Flow Statement
25 | McLaren H1 2019 Results
Reported EBITDA by company
*Racing includes the sale of heritage cars, £3.9m (H1 2019) and £9.2m (H1 2018)26 | McLaren H1 2019 Results
One Outstanding Luxury Automotive & Technology Group
Automotive Racing Applied Technologies
◼ Delivering advantage at the intersection of physical
◼ Offering the ultimate ownership experience ◼ Legendary racing history
and digital
creating the iconic sportscar ◼ 20 Formula 1 World Championships
◼ Customers in Motorsport, Automotive, Public
◼ 20,000+ road cars hand-assembled to date 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
Racing 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 models 600LT Spider, 720S Spider, McLaren GT and Automotive World APAC,
84% China ex. China
“Speedtail” continue to demonstrate the success of McLaren product 6%
7% 18%
pipeline + strength in brand27 | McLaren H1 2019 Results
McLaren has a long history rooted in Racing & Innovation
Success in racing created a culture of outstanding performance, excellence and innovation28 | McLaren H1 2019 Results
McLaren has a long history in Racing & innovation ▪
▪
▪
▪
▪
▪
Success in racing created a culture of outstanding performance, excellence & innovation29 | McLaren H1 2019 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 design30 | McLaren H1 2019 Results
Automotive operates in distinct segments
Sports Grand Tourer Super Ultimate Motorsport
▪ Brings McLaren’s advanced ▪ Positioned alongside our ▪ Super Series is the core of ▪ High performance cars ▪ Track cars built for racing
technologies to the established Sports, Super and McLaren's range with the ▪ Built on the same basis as ▪ Based on road car models
sportscar arena, a lower Ultimate Series, this is a new best technology available the Super series with but without road car
Description price point McLaren for a new audience additional ground-breaking
providing an alternative to
▪ Derivatives include Coupe, regulations and built to a
technology
▪ Derivatives include Coupe, existing products Spider and LT limited racing specification
▪ Further track-only products
Spider, LT limited editions editions
offers
▪ 540C, 570S, 570S Spider, ▪ new GT ▪ 650S, 650S Spider, 720S, ▪ P1TM & GTR, McLaren ▪ 650S GT3, 570S GT4 and
Models 570GT, 600LT, 600LT Spider 720S Spider Senna, Senna GTR, 570S Sprint, 720S GT3
▪ Best power-to-weight ratio of
Speedtail
▪ Attributes of competition ▪ High performance super ▪ Includes the first hybrid ▪ Strictly limited editions for
sports car range in their class levels of performance and cars with track hyper car in the world racing only
Features ▪ Lightweight construction with continent crossing capability,
performance ▪ Strictly limited production,
carbon chassis (75kg) yet lighter, faster, more sold out years in advance
engaging ▪ MonoCage II carbon body
Purpose ▪ Road ▪ Luxury Grand Touring ▪ Road / track ▪ Road / track ▪ Track
Price range ▪ £125-200k ▪ >£160k ▪ £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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