C O N F I D E N T I A L. Q Results. September 29, 2017

Transcription

1 Q Results September 29,

2 One outstanding luxury and technology group Highlights Global leader in high-performance luxury and technology 55 year history dominated by technical excellence Revenue visibility via automotive order book and F1 contracts Q LTM normalized PF revenue: 999m Q LTM normalized PF EBITDA: 167m Sales and car volume split Racing 25% Sales by division Applied Technologies 5% 2016: 898m 2 Automotive 70% Car volumes by region China 7% APAC ex. China 17% RoW 11% Europe 30% 2016: 3,286 units North America 35% Automotive Racing Applied Technologies 2016 Revenues: 650m 2016 Revenues: 225m 2016 Revenues: 52m Award winning high performance luxury cars Experience -led customer proposition Unique brand platform with global visibility 20 F1 World Championships Cutting-edge tech solutions and data analysis Track record of exceptional & profitable growth Notes: 1 Normalised pro-forma revenue is calculated using the same approach as normalised pro-forma EBITDA, adjusting for the impact of the SAP implementation, the 720S ramp-up and cost synergies. 2 Exclusive of intercompany transactions 1 10

3 Highlights Individual McLaren businesses brought together under a single brand with unified and supportive shareholders to create one outstanding luxury and technology group Accelerating car volumes from June 2017 following successful launches of iconic 720S and 570S Spider Continued strong order book, with both 720S and 570S Spider sold out into S production ramp-up complete, currently producing 40 cars per week Q group revenues of 189m (vs. 130m in Q1 2017), with the increase mainly driven by continued ramp-up of 720S production Q normalised EBITDA of 23m (vs. 11m in Q1 2017) and reported EBITDA of (3)m LTM normalised EBITDA of 167m Revenue and profitability in-line with plan driven by timing of 720S ramp-up in H and 570S Spider launch in June 2017 New engine supply partnership agreed with Renault for 2018, 2019 and 2020 F1 seasons Continued growth in Applied Technologies underpins disruptive technology offering in attractive end markets Optimised capital structure and strong liquidity supported by 650m refinancing 2 8

4 Unified McLaren Group under a simplified ownership structure New McLaren Group Structure Shareholders Bahrain Mumtalakat Holding Company TAG Group Limited Minority shareholders Integration progressing well Areas for synergies identified 63% 16% 21% Task forces established across key disciplines McLaren Group Limited On track to deliver announced cost synergies of 12m in 2018 McLaren Holdings Limited 90 million Super Senior RCF 6m synergies already secured McLaren Automotive Ltd McLaren Technology Group Ltd McLaren Finance PLC 564 million Senior Secured Notes 3 10

5 Successful product launches 720S already sold out into Q The 720S is magnificent, but also surprisingly nuanced for such an adrenalised proposition: it takes time to work out the full scale of its, and its creators, achievements Top Gear magazine Yet another amazing leap for a brand that seems to have come a very long way in a relatively short space of time Auto Express, 03/05/17 McLaren wants it all with the 720S: more power, more performance, smarter aero, better comfort, cooler gadgets and the moon on a stick. And you know what? Aiming high has paid off CAR magazine The 720S is the clearest expression yet of McLaren s approach to the art of the supercar MotorTrend 02/05/17 Sold out Into Q km/h top speed 720 PS engine 720 PS engine, one-piece carbon fibre MonoCage and luxurious interior are class leading 4 13

6 Successful product launches 570S Spider getting stellar reviews Sold out into 2018 Deliveries commenced in August 2017 It s the best sports car we ve driven in a decade. British GQ More fun and engagement than 570S. No dynamic compromise. EVO The 570S has shed its roof, but its massive talent remains intact. AUTOCAR 5 14

7 Historical financials overview Pro forma normalised Group Revenue 1 ( m) Pro forma normalised Group EBITDA ( m) Margin 2 Revenues Adjustments % 16.3% 16.5% 16.7% 2 Automotive margin % 22.1% 21.8% 23.6% 2 EBITDA Adjustments A 2015A 2016A LTM 2Q17 Track record of sustained revenue growth H revenue impacted by planned shut down in automotive production (SAP implementation) and anticipated gap in Super Series line-up Automotive volume (units) 2014A 2015A 2016A LTM 2Q17 Continued growth in normalised EBITDA Reported profitability impacted in H from drop-through of lower automotive and sponsorship revenues Racing margin further impacted by increased costs of 2017 Formula 1 car following regulatory changes implemented for 2017 season Net debt 3 ( m) 3,286 3, ,649 1, A 2015A 2016A LTM 2Q17 Strong volume performance despite 720S not being delivered until June 2017 Strong sales of Sports Series maintained 720S ramp-up complete Note: 1 Inclusive of intercompany transactions at revenue level for 2014 and 2015, exclusive of intercompany transactions for 2016 (c. 28m) and LTM normalised PF 2Q17 revenue (calculated using the same approach as normalised PF EBITDA, adjusting for the impact of the SAP implementation, the 720S ramp-up and cost synergies) 2 LTM Group margin based on normalised revenues and EBITDA of 999m and 167m; LTM Automotive margin based on normalised automotive revenues and EBITDA of 743m and 175m 3 Pro forma combined net senior financial debt represents the senior financial debt of the Group after giving Pro forma effect to the Transactions, less Pro forma combined cash at bank and in hand of 132 million, which represents Pro forma combined cash at bank and in hand before the Financing of 29 million as adjusted for the Transactions, including all associated costs 6 39 June 2017 Net debt position reflects July 2017 bond issuance of 564m and 90m RCF (undrawn) refinancing

8 Q summary Automotive volumes Revenue ( m) EBITDA ( m) (3) 130 Q2 2016A Q1 2017A Q2 2017A Q2 2016A Q1 2017A Q2 2017A (29) Q2 2016A Q1 2017A Q2 2017A Strong volume performance despite 720S not being delivered until June 2017 Strong Super Series and Sports Series order book and dealer allocations reflects exceptional customer demand 720S sold out into Q Weaker y-o-y Q2 automotive revenues impacted by shift in sales mix from Super Series to Sports Series Revenue growth vs. Q reflects continued ramp-up of 720S production Racing revenues and other revenues up 4% y- o-y with increased prize fund partially offset by lower sponsorship income Applied Technology revenue flat y-o-y due to timing of project income, but up 28% in H Profitability in-line with plan driven by timing of model launches and production ramp-up Q EBITDA loss reflects reduced automotive and sponsorship revenues, further impacted by increased cost of 2017 racing car Significant improvement in Q2 EBITDA momentum vs. Q ( (29)m) 7 9

9 Q EBITDA bridge McLaren Automotive (7) (2) (10) (3) Q Sales Mix SG&A Racing & Applied Technologies Q LTM LTM adjusted Shift in Automotive sales mix from Super Series to Sports Series Increased SG&A costs driven by timing vs flat for H vs. prior year Racing EBITDA affected by drop in sponsorship income and increased cost of 2017 racing car following regulatory changes implemented for 2017 season, partially offset by increased prize money for 2016 Constructors Championship EBITDA in Applied Technologies broadly stable 8 2

10 Normalised EBITDA bridge Normalised EBITDA bridge 49m 6m 167m 97m 16m Q LTM EBITDA Impact of SAP implementation Impact of ramp-up (Q1 and Q2) Cost synergies Normalised Q LTM EBITDA Developing Normalised EBITDA LTM Q Reported (and unadjusted) LTM Q EBITDA SAP Implementation One-off 720S ramp-up in Q1 and Q2 Cost synergies in Q2 Normalised EBITDA at LTM Q Adjustment for lost volumes in January 2017 when a new SAP system was installed at McLaren Technology Centre, and production was shut down during the implementation period Reflects impact of production gap due to timing of new 720S launch compared to other models Reflects McLaren transition to a complete product line-up following product portfolio build up during recent years Representing 50% of 12m run-rate cost synergies to be achieved by 2018 mainly by removing duplicate cost post business integration Reflects Company s underlying LTM performance 9 40

11 Automotive Racing Applied Technologies Automotive volume by region (year-to-date) North America (35%) Europe (36%) China (4%) YTD 2016 YTD 2017 YTD 2016 YTD Global RoW (8%) YTD 2016 YTD 2017 APAC (ex. China) (17%) 1,288 1, YTD 2016 YTD 2017 YTD 2016 YTD 2017 Strong customer demand with 8% reduction in YTD volumes reflecting lower supply driven by production ramp-up following SAP go-live and 720S launch timing Regional sales mix in line with prior year YTD 2016 YTD 2017 Legislative delays resulting in shift in the allocations of 720S and 570S Spider from China 10 11

12 Automotive Racing Applied Technologies Renault partnership heralds new chapter in the McLaren Racing story McLaren and Honda to part ways McLaren and Honda have mutually agreed to conclude their F1 partnership at the end of the 2017 FIA Formula One Constructors and Drivers World Championship McLaren Renault partnership agreed Engine supply partnership agreed between McLaren Racing and Renault Sport Racing for the 2018, 2019 and 2020 F1 seasons Renault to supply Formula 1 power units and establishing a close working relationship with McLaren s engineers and technicians Strategic agreement between two historic brands provides platform for McLaren to be a competitive force from

13 Cutting edge technology solutions gaining increased traction in large and diverse growth markets Automotive Racing Applied Technologies New Contracts won Revenue Renault Sport Racing new Formula E powertrain for 2018 season Rex Bionics next generation exo skeleton development Galvani industrial design contracts for wearables 28 Virgin Trains East Coast seat sensor development programme 22 Operational progress McLaren Deloitte partnership progressing well Successful testing of Formula E battery development C2C rail passenger Wi-Fi launched in Q2 with positive feedback [DUMMY DATA] H H Motorsport Automotive Public Transport Health & Wellness 12 16

14 Q Net debt / liquidity position Q Gross debt 564 Gross debt reflects $250m and 370m 5-yr Senior Secured Notes issuance in July 2017 Cash & cash equivalents (132) 90m undrawn RCF Net debt 432 Ample liquidity for future investment requirements Net debt / EBITDA 2.6x Undrawn committed credit lines 90 Total available liquidity

15 Full year 2017 outlook Order book of 2,491 1 cars as of 30 June, 2017 reflects exceptional demand for 720S and 570S Spider Slower than anticipated production ramp-up impacts full year volume expectations Automotive performance expected to be weighted to Q4 Full year volume guidance of c.3,600 cars Automotive volume growth expected in 2018 following full production ramp-up in H volumes expected to be >4,000 cars Racing and Applied Technologies expected to be broadly EBITDA neutral for FY 2017 assisted by a small number of heritage vehicle sales 1 Represents order book and dealer allocations for Super Series and Sports Series 14 19

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17 Q revenue bridge Automotive Racing and Applied Technologies Combination adjustments (6) (7) (7) Q Automotive Racing & Applied Technologies Q Automotive revenue impacted by shift in sales mix from Super Series to Sports Series with 720S deliveries only commencing in June 2017 McLaren Racing revenue broadly stable with increased prize money received from 2016 F1 Constructors Championship position and other revenues largely offset by reduced sponsorship income Flat revenue growth in Applied Technologies due to timing of project income 16 1

18 Summary Income Statement Q m Q Q Turnover Cost of sales (144) (132) Gross profit Administrative expenses (70) (66) EBITDA (3) 15 Depreciation & amortisation EBIT (23) (1) Net finance costs (10) (26) Profit before tax (34) (27) Taxation 11 6 Profit after tax (22) (22) 17 22

19 Summary Income Statement YTD 2017 m YTD 2017 YTD 2016 Turnover Cost of sales (265) (252) Gross profit Administrative expenses (125) (128) EBITDA (33) 19 Depreciation & amortisation EBIT (66) (19) Net finance costs (16) (42) Profit before tax (83) (59) Taxation Profit after tax (64) (48) 18 22

20 Cash Flow Statement YTD 2017 vs MAL cash flow statement m YTD 2017 YTD 2016 Net cash flows from operating activities Net cash outflow from investing activities (79) (71) Net cash inflow from financing activities Net increase/(decrease) in cash and cash equivalents 2 (6) MTG cash flow statement m YTD 2017 YTD 2016 Net cash flows from operating activities Net cash outflow from investing activities (5) 27 Net cash inflow from financing activities (19) (29) Net increase/(decrease) in cash and cash equivalents (1) (13) 19 23

21 McLaren model portfolio 570 S and 570 S Spider 720 S All the performance of the Coupé plus the extra exhilaration of open-air driving. The 570S Spider brings you closer to the elements in a design that s equally stunning with the roof up or down. The McLaren 720S embodies our relentless quest to push the limits of possibility. Lighter, stronger, faster. It s all of these and more. But how it makes you feel is altogether something else. Prepare to push the limits of what you thought possible in a supercar. 570 GT 540 C The 570GT adds extra comfort and practicality to breathtaking performance. Every bit a McLaren, it s optimised for the road and makes the ultimate sports car experience one that s perfect for daily use, longer journeys and weekends away. It s the ultimate sports car experience. Completely drivercentric and performance oriented, the 540C Coupé is equally at home on the track as it is on the open road. Being light weight with a high power to weight ratio, it delivers a super car punch that would shame many more expensive rivals. 20