DARING TO ADAPT 2015 Full-Year Results 25 February 2016
GROUP SUMMARY Results of both activities improved significantly in FY 2015 Group sales: EUR 6.0 billion, +10.7% Current PBT, group s share: EUR 212.1 million, +20.6%. Including Carglass Brazil and the Chinese activities: EUR 207.4 million, +31.9% (vs guidance of 20-25% growth). Group's share in the net result for the period: EUR 130.7 million (EUR -11.1 million in 2014) Consolidated net financial debt: EUR 573.2 million (EUR 597.8 million in 2014) FY 2016 forecast: assuming an average USD/EUR rate of 1.11 and an average GBP/EUR rate of 0.77 in 2016, the group aims at a current PBT, group s share, that is stable or slightly lower compared to EUR 212.1 million in 2015 2015 FY Results 25 February 2016 2
SALES BY SEGMENT External sales ( m) 5,453.1 +10.7% +13.2% 6,035.4 Belron 2,792.6 3,161.2 +8.0% D Ieteren Auto 2,660.5 2,874.2 FY 2014 FY 2015 2015 FY Results 25 February 2016 3
CURRENT OPERATING RESULT BY SEGMENT Current EBIT ( m) +13.8% 248.5 218.4 +10.2% Belron 165.1 182.0 D Ieteren Auto 53.3 +24.8% 66.5 FY 2014 FY 2015 2015 FY Results 25 February 2016 4
SEGMENT CONTRIBUTION TO EVOLUTION OF CURRENT PBT, GROUP S SHARE Current consolidated PBT, group s share ( m) +20.6% 22.0 14.2 212.1 175.9 FY 2014 D Ieteren Auto & Corporate Belron FY 2015 2015 FY Results 25 February 2016 5
VEHICLE GLASS REPAIR & REPLACEMENT 25 February 2016
SUMMARY BELRON Sales: EUR 3.2 billion, +13.2% (of which 4.7% organic growth) Current operating result: EUR 182.0 million, +10.2% Current PBT, group s share: EUR 137.6 million, +11.5% Record sales & operating result in the US Several major European countries delivered profit growth despite market declines Challenging transformation of the operating model in the UK Decision to exit China Acquisition of franchisors (Netherlands & Germany) Joint-venture in Brazil 2016 outlook: modest organic sales growth with market share gains expected to offset some adverse underlying market trends. Focusing on profit improvement (innovation, flexibility). Belron expects higher charges related to the long term management incentive programme 2015 FY Results 25 February 2016 7
EXTERNAL SALES Organic growth reflects a substantial increase in the US, due to both the market growth (second strong winter in a row) and market share gains, partially offset by a small decrease in Europe primarily due to market declines Significant impact from currency translation (+8.1%) due to strong USD & GBP 2,793 Mostly UK & France 27-34 56 +13.2% Uplift in the US, F and Australia partially offset by share loss in the UK, I, NL and D 81 4 10 226 External sales ( m) 3,161 4.7% organic increase Sales FY 2014 Market - USA Market - Europe & Other Segment share gains Price & Mix Trading days Acquisitions FX Sales FY 2015 2015 FY Results 25 February 2016 8
EUROPE REPRESENTS 46% OF SALES (51% IN 2014) Geographical sales breakdown Organic sales evolution 54% Europe 46% Rest of the World Europe -2.5% France UK Germany Netherlands Italy Belgium Spain Norway Portugal Hungary Sweden Ireland Greece Switzerland Denmark Austria Turkey Russia Luxembourg Rest of the world +12.5% USA Canada Australia New Zealand 2015 FY Results 25 February 2016 9
CURRENT OPERATING RESULT Current EBIT ( m) In the US, significant fall through from increased sales In Europe, impact of weak sales more than offset by various restructuring and efficiency actions +10.2% 165.1 11.0 2.3 3.6 182.0 Increase in US, Germany and France partly offset by declines in UK and Italy Autotaalglas and others Current operating result 2014 Organic Acquisitions FX & ELTIP* Current operating results 2015 * Executive Long-Term Incentive Plan 2015 FY Results 25 February 2016 10
MAIN ACQUISITIONS DURING 2015 Netherlands: on 3 rd of June Belron acquired Autotaalglas. The deal comprises the acquisition of the franchisor, 1 owned branch and a franchise network of 54 branches. On 9 th of November, GlasGarage was acquired including the franchisor, 1 owned branch and a franchise network of 126 branches. Germany: on24 th of September, Belron announced the acquisition of junited Autoglas, a German franchise network comprising 232 branches. Autotaalglas, GlasGarage and junited Autoglas will keep their brand, identity and operating model. The businesses will be run separately and customers will be able to choose between different value propositions 2015 FY Results 25 February 2016 11
SUMMARY OF FY 2015 RESULTS m 2014 2015 % change Total jobs (in million units) 10.5 10.9 +3.2 External sales 2,792.6 3,161.2 +13.2 Current operating result 165.1 182.0 +10.2 Current operating margin (in %) 5.9 5.8 - Current net finance costs -35.0-36.9 +5.4 Current result before tax 130.1 145.1 +11.5 Current result before tax, group s share 123.4 137.6 +11.5 Group s share in the net result for the period -59.9 70.9 - Unusual items and re-measurements (in PBT) -142.4-5.8 - ELTIP * charge, before tax +3.0-4.9 - * Executive Long-Term Incentive Plan 2015 FY Results 25 February 2016 12
UNUSUAL ITEMS AND RE-MEASUREMENTS (IN PBT) m 2015 Unusual items +10.9 Settlement pension obligations (NL) +21.5 Disposal loss related to ADR (UK) -2.7 Other including restructuring costs -7.9 Re-measurements -16.7 Amortisation of intangible assets -11.5 Mark-to-market +7.9 Impairment of goodwill and fixed assets Turkey and IT assets -13.1 Total -5.8 2015 FY Results 25 February 2016 13
NET FINANCIAL DEBT AT 31 DECEMBER 2015 + EUR 55 million FX impact vs end-2014: 72% of net debt denominated in USD Net Debt/current EBITDA * : 2.57 in FY 2015 (FY 2014: 3.07) EUR 22.6 million acquisitions in 2015 (the Netherlands, Germany, US) EUR 33.8 million dividends (D Ieteren share: EUR 32.1 million) m FY 2014 FY 2015 % change (2015 vs 2014) Net financial debt 735.9 751.8 +15.9 of which Gross debt 765.8 773.8 +8.0 of which * 12-month rolling EBITDA Loan notes 611.9 672.5 +60.6 Finance lease 50.6 59.1 +8.5 Inter-segment loan - 20.0 +20.0 Bank syndicate arrangement 95.0 - -95.0 Other (mainly overdrafts) 8.3 22.2 +13.9 Cash and cash equivalents -29.9-22.0 +7.9 2015 FY Results 25 February 2016 14
CASH GENERATION OF BELRON m FY 2013 FY 2014 * FY 2015 Current EBITDA 273.5 265.7 296.0 Change in WCR 0.7 20.9 6.1 Net capex (incl. finance leases) -106.1-121.0-124.0 Free cash flow before tax 168.1 165.6 178.1 Acquisitions (incl. net debt acquired) -51.5-14.0-22.6 * Restated figures. 2015 FY Results 25 February 2016 15
CONTINUED FOCUS ON INNOVATION, EFFICIENCY AND FLEXIBILITY New advertising approaches (e.g. highlighting ADAS, digital marketing) OPTISmart (Our People s Time Index) to reduce excess time taken per job Expanding footprint in a flexible and low cost way Belron Technical: supporting the countries in their ADAS implementations 2015: record accuracy levels achieved in glass identification Self-service solutions for customers (reduce incoming calls) Reduction in transportation costs (optimisation of delivery frequency) IT investments (e.g. new ERP in NL & B, fully integrated web-booking systems in the UK) Global Net Promoter Score of around 80% despite a disappointing UK performance 2015 FY Results 25 February 2016 16
OUTLOOK FOR 2016 Agreement to form a joint venture in Brazil (press release of 8 January). Belron sold 60% of its investment in Carglass Brazil to Advisia. Brazilian activities will be accounted for using the equity method as from 2016. Relatively cold winter conditions in the US For FY 2016 Belron aims at moderate organic sales growth thanks to market share gains Belron expects higher charges related to the executive LT incentive programme (EUR 13 million expected in 2016 compared to EUR 4.9 million in 2015) 2015 FY Results 25 February 2016 17
AUTOMOBILE DISTRIBUTION 25 February 2016
SUMMARY D IETEREN AUTO Net Belgian car market: +2.9% D Ieteren Auto s net market share: 22.34% (-37bps). VW remains number 1 brand in spite of the Emissiongate Sales: EUR 2.9 billion, +8.0%. New vehicle sales: EUR 2.5 billion, +8.5% Current operating result: EUR 66.5 million, +24.8% Current result before tax, group s share: EUR 74.5 million, +41.9% Total cost of Emissiongate included in operating result: EUR 13.8 million of which EUR 7.0 million under current items and EUR 6.8 million under unusual items Outlook: net car market expected to be slightly up in FY 2016. For the full year, D Ieteren Auto aims at a stable market share and expects a stable or slightly lower current operating result due to the tail end effect of the Emissiongate and higher marketing costs. 2015 FY Results 25 February 2016 19
BELGIAN NEW CAR MARKET PICKED UP IN 2015 Excluding deregistrations of less than 30 days, the Belgian new car market was up 2.9% Growing share of professional customers (52.4% in 2015 vs 49.7% in 2014) New car registrations (000s units) 600 500 400 300 526 525 200 216 536 205 476 203 547 572 227 246 487 486 483 501 202 196 195 213 482,939 25,597 3.8% +2.9% 501,066 30,255 200 100 0 326 309 331 273 320 326 285 290 288 288 H2 H1 457,342 470,811 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2014 2015 The historical graph above contains gross figures only. In order to provide an accurate picture of the car market, Febiac publishes since mid-2013 market figures excluding registrations that have been cancelled within 30 days. Deregistrations Net registrations 2015 FY Results 25 February 2016 20
MARKET SHARE UNDER PRESSURE DUE TO EMISSIONGATE Market share excluding deregistrations down 37bps to 22.34% in 2015 D Ieteren Auto s market share (%) 24 23 22 21 20 19.43 19.97 19.76 20.13 21.89 23.16 22.12 22.39 21.15 22.71 21.78 22.34 21.49 21.49 0.85 22.34 19 19.34 18 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015 gross market share Impact of deregistrations 2015 net market share Market share (%) Net market share (excluding deregistrations) 2015 FY Results 25 February 2016 21
RECORD LEVELS FOR AUDI AND PORSCHE Breakdown of D Ieteren Auto s market share per brand (%) Porsche Seat Škoda Audi Volkswagen 22.71 0.46 1.44 3.73 6.50 10.57 22.34 0.62 1.34 3.55 6.76 10.05 2014 2015 The combined market share of Bentley and Lamborghini totals 0.01% both in 2014 and 2015. 2015 FY Results 25 February 2016 VW remains the market leader with a share in excess of 10% despite the Emissiongate. Success of Passat underpinned demand. Record market share at Audi with all models gaining share with the exception of the A1 and A5. Marginal decline at Škoda despite success of the Octavia and new Superb. Seat s share is slightly down. New highs for Porsche on the back of the success of the Macan and the hybrid Cayenne 22
EXTERNAL SALES UP 8.0% New vehicle sales rose by 8.5% (number of deliveries +3.0% and price mix effect of +5.5%) Higher sales of used cars, spare parts and accessories and aftersales activities External sales ( m) +8.0% 196.3 7.4 10.7 2.9-0.5-3.1 2,874.2 2,660.5 External sales 2014 New vehicle sales Used car sales Spare parts and accessories Aftersales activities D Ieteren Sport Other External sales 2015 2015 FY Results 25 February 2016 23
CURRENT OPERATING RESULT UP 24.8% Positive impact from higher volumes and price/mix effect Margin effect includes extra incentives to dealer network Higher staff expenses include redundancy costs Other includes lower write-downs on trade receivables and inventories The current operating result of the Retail activity improved significantly Current EBIT ( m) +24.8% 25.1 10.9-13.9-7.4-11.8 10.3 66.5 53.3 Current operating result 2014 Volumes Price/Mix Margin Marketing SG&A and staff costs Other Current operating result 2015 2015 FY Results 25 February 2016 24
SUMMARY OF FY 2015 RESULTS m 2014 2015 % change New vehicles delivered (in units) 111,667 114,978 +3.0 External sales 2,660.5 2,874.2 +8.0 Current operating result 53.3 66.5 +24.8 Current operating margin (in %) 2.0 2.3 - Current net finance costs -7.2-0.2 - Current result before tax 50.5 71.5 +41.6 Current result before tax, group s share 52.5 74.5 +41.9 of which joint ventures and associates 6.2 8.1 +30.6 Group s share in the net result for the period 48.8 59.8 +22.5 Unusual items and re-measurements, before tax -6.9-14.4-2015 FY Results 25 February 2016 25
NET FINANCIAL DEBT AT 31 DECEMBER 2015 Repayment of EUR 150 million bond in December 2014 and of EUR 100 million bond in July 2015 resulted in lower net financial costs in 2015 Dividends: paid EUR 44 million and received (from Belron) EUR 32 million m FY 2014 FY 2015 % change (2015 vs 2014) Net financial debt/(cash) -138.1-178.2-40.1 Gross debt 112.9-9.5-122.4 of which Less Bonds 100.0-100.0 Other 12.9 10.5-2.4 Inter-segment loan - -20.0-20.0 Cash and cash equivalents -54.9-88.1-33.2 Held-to-maturity investments -176.1-59.8 116.3 Other receivables -20.0-20.8-0.8 2015 FY Results 25 February 2016 26
CASH GENERATION OF D IETEREN AUTO & CORPORATE m FY 2013 FY 2014 FY 2015 Current EBITDA 63.1 80.1 77.9 Change in WCR 4.2-49.3-10.1 Net capex -17.7-27.2-17.2 Free cash flow before tax 49.6 3.6 50.6 Acquisitions (incl. net debt acquired) -8.8-30.9-2015 FY Results 25 February 2016 27
2018-2020 STRATEGY D Ieteren continued to implement its strategy which is based on three pillars: Powered by You involves streamlining its internal structure and placing the customer at the centre of the organisation. Six divisions have been set up in H2 2015 to achieve commercial and operational excellence The Market Area project aims at optimising the independent dealer network. Of the 26 Market Areas, 18 are currently being established The Pole Position project that focuses at improving the performance of the D Ieteren Car Centers (DCC) in the Brussels region is progressing ahead of schedule with cost savings and synergies exceeding expectations. The losses of the DCCs have been reduced by 39% yearon-year 2015 FY Results 25 February 2016 28
ROBUST ORDER BOOK Emissiongate : the decision to suspend the commercialisation of several models, first in September, then in November, resulted in a temporary loss in orders Incoming orders picked up again in December due to commercial actions At the end of 2015, the order book was up 18.5% year-on-year The biennial Brussels Motor show proved to be a success: order book up 24.3% year-on-year at the end of January 2015 FY Results 25 February 2016 29
OUTLOOK FOR 2016 The Belgian new car market is expected to rise slightly 1H 2016: D Ieteren Auto s market share expected to decline (yearon-year) due to tail effect of the Emissiongate FY 2016: D Ieteren Auto aims at a stable market share Main new product launches in 2016: Volkswagen: Tiguan Audi: A4 Allroad, A5 coupé and Q2 (+ full year impact of A4) Seat: Ateca (SUV) D Ieteren Auto expects a stable or slightly lower current operating result due to the tail end effect of the Emissiongate and higher marketing costs. At D Ieteren corporate level, costs will be higher than in 2015 following the reinforcement of the executive team 2015 FY Results 25 February 2016 30
OUTLOOK FOR FY 2016
OUTLOOK FOR FY 2016 Assuming an average USD/EUR rate of 1.11 and an average GBP/EUR rate of 0.77 in 2016, D Ieteren aims at a stable or slightly lower current consolidated result before tax, group s share, compared to EUR 212.1 million in 2015 D Ieteren Auto expects a stable or slightly lower current operating result due to the tail end effect of the Emissiongate and higher marketing costs. Belron expects moderate organic sales growth and higher charges related to the long term management incentive programme At D Ieteren corporate level, costs will be higher than in 2015 following the reinforcement of the executive team 2015 FY Results 25 February 2016 32
Q&A
FORWARD-LOOKING STATEMENTS To the extent that any statements made in this presentation contain information that is not historical, these statements are essentially forward-looking. The achievement of forwardlooking statements contained in this presentation is subject to risks and uncertainties because of a number of factors, including general economic factors, interest rate and foreign currency exchange rate fluctuations; changing market conditions, product competition, the nature of product development, impact of acquisitions and divestitures, restructurings, products withdrawals; regulatory approval processes and other unusual items. Consequently, actual results may differ materially from those expressed or implied by such forwardlooking statements. Forward-looking statements can be identified by the use of words such as "expects", "plans", "will", "believes", "may", "could", "estimates", "intends", "targets", "objectives", "potential", and other words of similar meaning. Should known or unknown risks or uncertainties materialize, or should our assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly update any forward-looking statements. 2015 FY Results 25 February 2016 34
CONTACT INFORMATION Financial Communication & Investor Relations D Ieteren Group Pascale Weber pascale.weber@dieteren.be +32 2 536 54 39 Download the D Ieteren app on: Thierry Dossogne thierry.dossogne@dieteren.be +32 2 536 55 65 or financial.communication@dieteren.be www.dieteren.com 2015 FY Results 25 February 2016 35