MCLAREN Q3 (YTD) 2019 RESULTS - NOVEMBER 27, 2019 - MCLAREN INVESTORS
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McLaren Q3 (YTD) 2019 Results November 27, 2019
2 | McLaren Q3 (YTD) 2019 Results Highlights
3 | McLaren Q3 (YTD) 2019 Results
Automotive >> Racing >> Applied Technologies
Q3 (YTD) 2019
Revenue by division
Results continue to build on strong first half results:
Applied Formula 1
Q3 (YTD) 2019 Group revenues £1,009m up 19% versus £847m in Q3 (YTD) 2018, Technologies
4%
12%
driven by Automotive volume and mix growth, Ultimate Series sales and an improvement
in Racing results
Q3 (YTD) 2019 Reported EBITDA £89m up 140% versus £37m Q3 (YTD) 2018
Automotive
Q3 2019 LTM Revenue £1,419m with Automotive contributing 84% of Group revenue 84%
Q3 2019 LTM Reported EBITDA £188m up 80% since Q3 2018 LTM (£104m) Car volumes by region
Europe
Q3 (YTD) 2019 production delivered 3,760 vehicles in comparison to 3,686 in Q3 (YTD) 25%
2018 (2.0% growth)
North
America
Racing recovery continues, with Reported EBITDA improvement driven by increased Rest of World
47%
6%
prizemoney from finishing 6th (versus 9th in 2017) in the Constructors Championship in China
2018 and improved sponsorship revenue 5%
APAC, ex.
China
17%
4 | McLaren Q3 (YTD) 2019 Results
Automotive >> Racing >> Applied Technologies
Q3 (YTD) 2019
McLaren Automotive on plan through Q3 2019:
Vehicle wholesales in Q3 (YTD) 2019 totalled 3,306 (3,463 in Q3 (YTD) 2018), marginally down 4.5%. Full
year volumes still expected to be in line with 2018.
Total committed order book at Q3 (YTD) 2019 was 1,741 units (in line with prior year). McLaren Senna GTR
and Speedtail Ultimate Series sold out; Super Series and Sports Series 600LT Spider sold out into Q1 2020.
McLaren GT orders continue to grow strongly.
Previously teased new open top speedster Ultimate Series fully announced in November. The car, named
Elva with a limited production of 399, delivers in late 2020. The order book is building and deposits on first
orders now being collected
All McLaren Sennas now built and on plan to be delivered to customers during Q4 following MSO customisation
McLaren have finished 4th in the Formula 1 World Constructors’ Championship with only the Abu Dhabi GP to go.
This will result in a positive step up in prizemoney in 2020
5 | McLaren Q3 (YTD) 2019 Results
Key Metrics - Q3 (YTD) 2018 vs Q3 (YTD) 2019
Net Leverage Net Leverage
Revenue (£m) Net Debt (£m)
4.4x 3.6x
+19% Net Debt includes the
additional USD $100m Notes
raised in Q3 2019. At Q3 2019
the £130m SSRCF was £40m
drawn and the additional
$24.9m Revolver Facility
remained undrawn
EBITDA1 (£m) Liquidity (£m)
+140%
Full year EBITDA expected to be
between £165m and £180m as
significant deliveries completed
Wholesale Volume F1 Championship
(Units) points 4th
(4.5%) 6th
4th place in the constructors
championship locked in with one
1 Reported EBITDA race to go
6 | McLaren Q3 (YTD) 2019 Results Business Update
7 | McLaren Q3 (YTD) 2019 Results Automotive
8 | McLaren Q3 (YTD) 2019 Results
McLaren Automotive – 2019
GT
GT ULTIMATE
First deliveries made McLaren Senna
Strong order book All now sold and built
continues to build Final models with MSO
delivered Q4
SPORTS
McLaren Senna GTR
600LT Coupe and Spider
In production; all sold
Coupe allocation complete
Speedtail
Spider orders into Q1
2020 Production commences Q1
2020; all sold
SUPER Elva
720S Spider Revealed November 2019
2019 order book now fully Strong interest received
allocated; orders into Q1 Production Q4 2020
2020
9 | McLaren Q3 (YTD) 2019 Results
Global Volumes – Q3 (YTD) 2019
Europe (25%)
China (33%)
North America +21%
RoW (31%) APAC +2%
(4%)
Demand in North America and Asia Pacific markets remains strong
European performance weaker driven by macro economic conditions
Middle east volumes declining as a result of weakening regional
economic conditions
10 | McLaren Q3 (YTD) 2019 Results
Elva – the new McLaren Ultimate Series
Previously teased new Ultimate Series Speedster now
announced as the McLaren Elva.
The open-cockpit two-seater celebrates the Bruce
McLaren-designed 1960s McLaren-Elva sportscars
The lightest road car ever from McLaren Automotive
McLaren Active Air Management System (AAMS) is a
world-first; shelters occupants by manipulating air flow
while retaining their connection to the elements
Homologated for all major markets
Priced at £1,425,000 (Inc VAT), final price will depend
upon level of MSO customization
Limited to 399 examples
Solid order bank with deposits now being collected11 | McLaren Q3 (YTD) 2019 Results
Racing12 | McLaren Q3 (YTD) 2019 Results
Formula 1 World Championship
4th in the Constructors Championship locked in with final race to complete
Formula 1 - on track
4 th in the 2019 F1 Constructors’ World Championship now assured, with the team scoring
140 points
140 points is the team’s highest total since 2014, with one race to go in Abu Dhabi
Carlos Sainz finished 3 rd in Brazil, marking McLaren’s first podium since Australia 2014
The team will continue the positive momentum, started following the restructure in early
2018, into the 2020 season
Formula 1- off track
Petrobras and McLaren conclude their technical and sponsorship agreement by mutual
consent, with neutral impact to the Racing business plan
Revenue targets achieved with more sponsor partnerships than any other F1 team this
year; now focussed on 2020
Well on track for start of 2020 season with MCL35 development making good progress13 | McLaren Q3 (YTD) 2019 Results
FIA Financial Regulations (Cost Cap) – 2021 and beyond
New financial regulations now agreed
FIA Regulations
The financial cost cap will be introduced from the 2021 season
Operational expenditure cap confirmed as USD $175m / GBP £136m
The cap will be in place for at least 5 seasons
Capital expenditure allowance of USD $36m / GBP £28m for a 4 year rolling period
Exclusions
Power unit supply
Drivers and top 3 highest paid employees including bonuses up to a capped limit
Travel expenses, marketing activities, heritage asset activities
HR, finance and legal activities, property costs, depreciation, finance costs, FX and tax
Compliance and enforcement
FIA will undertake an independent audit of the F1 team’s accounts and reporting documentation, may
undertake comparative analysis of F1 teams reporting documentation and encourage and respond to
complaints from Teams and whistleblowing
Penalties
Financial, public reprimand, deduction of championship points, limitations on testing, reduction of cost
cap, suspension from stages of competition / entire competition, individual penalties for Team Principles
and Directors
Key dates
31 October 2019 – Financial, technical and sporting regulations approved by World Motor Sports Council
1 January 2020 – Soft implementation / dry run
1 January 2021 – Full implementation of new regulations14 | McLaren Q3 (YTD) 2019 Results Applied Technologies
15 | McLaren Q3 (YTD) 2019 Results
McLaren Applied Technologies – A new focus
Commencing in March, a strategic review of McLaren Applied Technologies long term positioning has now been
completed
The strategic review focused on future growth looking at a wide-ranging assessment of market conditions, future
technology demands and trend analysis in order to meet future market, customer needs and continued growth
Motorsport remains core to the business with further up scaling on core technologies
Strategic Trajectory
Current Long Term
High level of non-repeatable consulting Consulting only in support of product roadmap
Bespoke developments Scaling / leverage of platforms
Motorsport drives development Showcase in Motorsport, scale in other markets
4 core markets Scaling product lines cross markets
Multiple tech development areas Scale / leverage 3 core areas of technical focus16 | McLaren Q3 (YTD) 2019 Results
McLaren Applied Technologies – Three Strategic Technical Pillars
Applied Technologies will be restructured around three key product platforms building differentiation
Virtual Product Development Telemetry, Control and Analytics Electrification
Increasing complexity & time-to- Physical and analytical insight to deliver Optimisation of electrical eco-system
market pressure in product business outcomes focusing on
development driving demand for Transport IoT ecosystem including Batteries
Virtual Product Development condition monitoring is booming – Inverters
Capability and tools delivering benefit vehicles are 3rd fastest growing
Motors
throughout the product lifecycle segment after phones/tablets
Sustainability concerns driving
Development is faster and less Digitisation shows strong growth across
expensive Electrification. A major theme across
all sectors; decision support tools for
Product performance is enhanced
Motorsport, Automotive
complex / high value decisions
and other Transport sectors
Assets monitored and optimised in
service17 | McLaren Q3 (YTD) 2019 Results Financials Q3 (YTD) 2019
18 | McLaren Q3 (YTD) 2019 Results
Results – Q3 (YTD) 2019
Automotive wholesale volumes Revenue (£m) Reported EBITDA (£m)
3,461 3,306 1,009
CAGR* +28% CAGR +35% 847 CAGR +248%
89
2,020
558
37
(8)
Q3 (YTD) 2017 Q3 (YTD) 2018 Q3 (YTD) 2019 Q3 (YTD) 2017 Q3 (YTD) 2018 Q3 (YTD) 2019 Q3 (YTD) 2017 Q3 (YTD) 2018 Q3 (YTD) 2019
Four series – GT, Sports, Super and Revenue growth in 2019 of 22% as a Automotive Reported EBITDA driven by
Ultimate – now on sale in 2019 vs 3 in result of having the full Series range (GT, timing and volume change of Ultimate
2018 Sports, Super and Ultimate) on sale Series in Q3
Order books for GT, Sports Series and during the year vs 2018 Sale volumes and mix have also
Super Series remain positive with strong Racing revenue increased due to higher contributed to the growth in Automotive
interest in the new GT and McLaren Elva level of prizemoney following improved Reported EBITDA
Q3 (YTD) wholesale volumes reflective of Championship result in 2018 vs 2017, Racing Reported EBITDA reflects the
market conditions being softer in some along with improved sponsorship as a increased prizemoney revenue and
regions result of better performance improved sponsorship revenues
* CAGR – Compound annual growth rate19 | McLaren Q3 (YTD) 2019 Results
Q3 (YTD) 2018 – Q3 (YTD) 2019 EBITDA Bridge
+140% growth
Automotive Reported EBITDA growth driven by strong sales volumes in the US and Asia markets, model mix and regional
mix impacts
Automotive sales, marketing, administration and FX costs increased as a result of all four series in production versus
three in 2018, higher volumes and FX revaluation losses due to a weaker pound offset in revenue
Racing 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 2019 versus same period in the prior year20 | McLaren Q3 (YTD) 2019 Results
Net Debt & Liquidity
Gross debt reflects $250m and £370m 5-yr Senior
Secured Notes issuance in July 2017 and $100m
Q3 2019 Q3 2018 issued July/August 2019
1 At Q3 total SSRCF was £130m (drawn £77.1m
Gross debt 678 550
RCF, overdrafts and guarantees) along with a
short term credit facility of $24.9m (undrawn)
Cash and cash equivalents 0 (6)
Cash utilisation in Q3 (YTD) driven by ongoing
Underlying net debt 678 544 investment in new models (600LT Spider, GT,
Senna GTR and Speedtail) and initial
2 development spend on the MCL35 F1 car for the
Net Leverage / EBITDA 3.6x 4.4x 2020 season
Capex investment increased versus prior year due
to further investment in vehicle programs
Undrawn liquidity and overdraft lines3 73 79 Leverage improves with growth in EBITDA
Total available liquidity 73 85
1 Gross debt is equal to Senior Secured Notes (SSNs) outstanding of £645m plus £6m accrued interest. The SSNs includes £22m capitalised fees and revaluation FX loss £9m,
SSRCF drawn to £40m
2 Net Leverage includes reported gross debt £678m less cash and LTM Reported EBITDA of £188m
3 Consists of RCF £130m less committed Ancillary Lines £17.1m (bank guarantees) and SSRCF £40m plus Senior USD undrawn s/term facility of $24.9m21 | McLaren Q3 (YTD) 2019 Results
Free Cash Flow
£m Q3 (YTD) 2019 Q3 (YTD) 2018 Investments
Intangible investment ahead due to phasing and the continued
Reported EBITDA 89 37 growth in new product development in the Automotive
business. The increase is due to the phasing of the spend in the
Investments (236) (192)
year and the launches of the various products; Automotive is
Working Capital (37) 12 launching four new products in 2019 as opposed to two in 2018
Investment spend outlook for the full year expected to be around
Tax (3) (8) £320m to £330m up on prior year following additional investment in
vehicle programs to pull forward a significant vehicle launch into
Interest (32) (33) 2020 and the new wind tunnel
Free Cash Flow (FCF) (219) (183)
Financing
Notes issuance 70 0 New Notes issued in Q3 provides headroom during the year
Equity (net) 12 100
Working Capital
RCF drawing / (repayment) 40 (10) Debtors increase a result of timing of wholesales at the quarter end
with collection due in Q4
FCF after financing (97) (93) Total creditor movement is flat versus the same period last year
Working capital of £35m is expected to at least reverse by year end22 | McLaren Q3 (YTD) 2019 Results Appendix
23 | McLaren Q3 (YTD) 2019 Results
Group Overview24 | McLaren Q3 (YTD) 2019 Results
Summary Income Statement
£m Q3 (YTD) 2019 Q3 (YTD) 2018
Turnover 1,009 847
Cost of Sales (729) (645)
Gross profit 280 202
Administrative expenses1 (213) (182)
Other operating income 22 17
Reported EBITDA 89 37
Depreciation and amortisation (119) (106)
EBIT (30) (69)
Net finance costs2 (38) (35)
Profit before tax (68) (104)
Taxation 9 8
Profit after Tax (60) (96)
1 Includes FX gains and losses (excluding FX on translation of USD bond), Q3 2019 £22.8m loss, Q3 2018 £5.4m loss
2 Includes FX on translation of USD bond Q3 2019 £6.9m loss, Q3 2018 £6.6m loss25 | McLaren Q3 (YTD) 2019 Results
Group Cash Flow Statement
Q3 (YTD) 2019 Q3 (YTD) 2018
Net cash flows from operating activities 51 43
Net cash flows from investing activities (236) (192)
Net cash flows from financing activities 88 56
Net (decrease)/increase in cash and cash
equivalents (97) (93)26 | McLaren Q3 (YTD) 2019 Results
Reported EBITDA by company
£m Q3 (YTD) 2019 Q3 (YTD) 2018
Automotive 160 123
Racing* (65) (85)
Applied Technologies (6) (1)
Reported EBITDA 89 37
*Racing includes the sale of heritage cars, £4.2m (Q3 (YTD) 2019) and £8.3m (Q3 (YTD) 2018)27 | McLaren Q3 (YTD) 2019 Results
Current facilities as at Q3 2019
Q3 2019 Q3 2019
On the 12 July 2019 the Group entered into additional financing Facilities Utilisation
arrangements equivalent to $150.0m, consisting of:
a private placement of an additional $100.0m (5.75% due SSRCF SSRCF
2022) £130m £130m
£17m guarantees £17m guarantees
incremental commitments under its existing super senior £40m overdrafts £20m overdrafts
revolving credit facility of £20.0m and £73m SSRCF £40m SSRCF
c. $24.9m under a separate US dollar-denominated short- (Libor +3.5%) Drawn to £77m
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 $350m 5.75% $350m 5.75%
next 18 to 24 months around the launch of new products Fully drawn
The Group is now better placed to respond to changes in USD Senior USD Senior
customer demand and competitor actions s/term facility s/term facility
eq.£20.2m eq.£20.2m
$24.9m $24.9m
(Libor + 5.0%) Undrawn28 | McLaren Q3 (YTD) 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 brand
FY2018 revenue - £1,257m FY2018 volume - 4,82929 | McLaren Q3 (YTD) 2019 Results
McLaren has a long history rooted in Racing & Innovation
Automotive McLaren F1 – McLaren’s McLaren SLR: total
first and the world’s production30 | McLaren Q3 (YTD) 2019 Results
McLaren has a long history in Racing & innovation 20,000th production car
completed
McLaren GT launched
Automotive
600LT Spider released
Racing
McLaren Elva revealed for
Applied Technologies the first time
2019
McLaren 570S, McLaren
2018
540C & P1 GTR launched
McLaren
McLaren Production P1 launched; the first 2017 15,000th production car
Applied awarded the FIA Centre opened completed
hybrid hyper car in the
F1 standard ECU contract world 2016 4,829 wholesale units
Launch of 12C Coupe, in 2018
Lewis Hamilton wins Automotive first car
Opening of McLaren World Championship
2015
Technology Centre
2014
McLaren Applied 2013
Technologies is formed 10,000th production car
2012 completed
2011 3,286 total units in McLaren Speedtail
Applied is the sole
2010 supplier of e-powertrain 2016 revealed for the first time
2008
Applied awarded the to Formula E – with the
2007
2004 NASCAR standard ECU strongest e-machine to
contract date;
MES and MAT merge
Applied awarded the Indy McLaren Automotive 600LT launched
Car ECU contract founded as an McLaren Senna, released
independent company
McLaren 650S launched
12C Spider launched
720S launched 720S Spider released,
Senna GTR announced
Success in racing created a culture of outstanding performance, excellence & innovation31 | McLaren Q3 (YTD) 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
8 GT
182 12 F1 8 F1
20 World Legendary Debut win at Racing
Grand drivers' constructors’
Championships 50 year racing Le Mans Champion-
Prix wins champion- champion- heritage 24 Hours ships in
ships ships 2017
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
Cumulative McLaren car volume1
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 design32 | McLaren Q3 (YTD) 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 Senna, 650S GT3, 570S GT4 and
Models 570GT, 600LT, 600LT Spider Senna GTR, Speedtail, Elva
720S Spider 570S Sprint, 720S GT3
Best power-to-weight ratio of 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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