McLaren FY2018 Results April 25, 2019 2 2 | McLaren FY2018 Results - - PowerPoint PPT Presentation

McLaren FY2018 Results

▪April 25, 2019

Highlights

2 2 | McLaren FY2018 Results

3 | McLaren FY2018 Results

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FY2018 was a record year for production with 4,863 vehicles delivered in comparison to 3,329 delivered in FY2017, growth of 46% on the prior year

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Vehicle wholesales totalled 4,829 (3,340 in FY2017), Automotive global sales volumes up 45% and revenue up 76% year on year

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Strong order book through out 2018 with continuation of positive order growth into 2019. Ultimate Series remains sold out. Super Series sold out into Q3 2019 with strong Sports Series 600LT and 600LT Spider orders for delivery into H2 2019; total order book 1,856 units

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McLaren Automotive have produced more than 18,000 cars since production commenced in 2011

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FY2018 Group revenues £1,257m (FY2017 £871m) driven by Automotive volumes an increase of 44%, 2018 Adjusted* EBITDA £143m

FY2018 Automotive Racing Applied Technologies Revenue by division Car volumes by region

Formula 1 11% Automotive 84% Applied Technologies 5% North America 36% APAC, ex. China 18% China 7% Rest of World 6% Europe 33%

*Adjusted EBITDA excludes exceptional costs for restructuring

4 | McLaren FY2018 Results

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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

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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

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Applied Technologies continues to grow its core strengths across Automotive, Motorsport, Public Transport and Health segments

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McLaren Holdings Limited finalised the Corporate Simplification of its subsidiaries in January 2019 formalising the organisational restructuring of the group first announced in 2017

FY2018 Automotive Racing Applied Technologies

Business Update

5 | McLaren FY2018 Results

Automotive

6 | McLaren FY2018 Results

McLaren Automotive – New models revealed

7 | McLaren FY2018 Results

▪ 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

McLaren Automotive – 2018 production highlights

8 | McLaren FY2018 Results

▪ 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

McLaren Special Operations - MSO

9 | McLaren FY2018 Results

▪ 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

Exceptional Press Reviews

10 | McLaren FY2018 Results

▪ McLaren Automotive has been recognised globally with 23 International awards in 2018 ▪ The 600LT won EVO’s Car of the

• Year. Following the win of the 720S

in 2017 ▪ McLaren Automotive was named Britain’s Most Admired Car

• Company. An achievement that

was reached in less than eight years in production

2018 Award Highlights McLaren Senna EVO – Hyper Car of the Year Top Gear – Wing of the Year Autocar – Five Stars 720S Road & Track – Performance Car of the Year 600LT EVO – Super Car of the Year EVO – Car of the Year

2018 awards & achievements

GQ Magazine ‘Technological Hedonism’ award – McLaren 570S Spider MotorTrend World’s Greatest Drag Race 8 Winner – McLaren 720S Automobile All Star – McLaren 720S Automotive Video Association Performance Car

• f the Year 2018 – McLaren

720S Road & Track Performance Car of the Year 2018 – McLaren 720S Robb Report Best

• f Best – McLaren

720S Autoguide.com Readers Choice Exotic Sports Car of the Year – McLaren 720S 2018 Sao Paulo Motor Show – Best Car of the Show Award - McLaren Senna Top Gear Magazine Wing of the Year – McLaren Senna Evo Car of the Year – McLaren 600LT The Best 10 China Performance Car of the Year 2019 – McLaren 600LT Motorsport FR Sports Car of the Year – McLaren 720S Sport Auto FR 5 Star Car – McLaren 720S Festival Automobile International de Paris Most Beautiful Supercar – McLaren 720S Auto Bild Readers’ Choice Award – McLaren Senna Auto Bild Klassik - McLaren Senna Autocar 5 Star Car

• McLaren Senna

Autocar Britain’s Best Drivers’ Car – McLaren 600LT China Performance Car

• f the Year 2018 –

McLaren 720S

11 | McLaren FY2018 Results

MCTC opened and operational

12 | McLaren FY2018 Results

▪ 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

• ver 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

AUTOMOTIVE - TRACK25

Independent

and strong member

• f the McLaren Group

£1.2 billion

invested in research and development by 2025

100%

Electrification by end of the business plan period

18

New cars or derivatives by 2024 Sports and supercars to be produced annually from 2024

6000 On a fast track to an exciting and successful future Battery development

The McLaren of EVs

A successor to the McLaren P1™

13 | McLaren FY2018 Results

Global Volume Growth: FY2018

14 | McLaren FY2018 Results

North America – 42% China – 141% Europe – 43% APAC – 57% RoW – (7%)

▪ 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 285 1,234 1,748 1,115 1,599 306 285 147 354 538 843

Racing

15 | McLaren FY2018 Results

2018 in focus

16 | McLaren FY2018 Results

Identifying and improving the fundamentals

▪ McLaren improved to 6th place in 2018 from 9th 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 500

The sporting environment

17 | McLaren FY2018 Results

F1 Sporting Environment ▪ 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-sports ▪ 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

Applied Technologies

18 | McLaren FY2018 Results

Digital Technologies at the intersection of technology and human ingenuity

19 | McLaren FY2018 Results

McLaren Deloitte Collaboration

Motorsport

Automotive

Automotive Public Transport Health

FY2018 Revenue (£m)

▪ 3rd Generation Standard ECU for F1 manufactured and delivered to teams for start of 2019 season ▪ 2nd Generation Formula E batteries shipped to all teams and performed as planned in first race of season 5 in December 2018 ▪ Development of F1 data visualisation tool ‘Atlas 10’ ▪ LNER passenger reservation system installed, now live ▪ New Virgin Trains West Coast WIFI programme underway and being deployed on trains ▪ Singapore proof of concept

• pportunities on condition

based maintenance in development ▪ Wearable digital

• rthopeadic device

development continues to progress ▪ Health analytics platform showing strong interest ▪ Young racing driver accelerator programme designed and marketed with good new driver uptake ▪ Autonomous vehicle partnership development programme ongoing ▪ Sales prospect focus on

• ur Vehicle Dynamic

Simulator ▪ Developing SupplyCycle, an advanced modelling, optimisation & simulation tool for manufacturing ▪ 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 movements

59 65 2017 2018

Financials

20 | McLaren FY2018 Results

▪ FY2018

Results

21 | McLaren FY2018 Results

Automotive wholesale volumes Revenue (£m) Adjusted EBITDA (£m) ▪ First year all three series on sale with a strong volume performance in the Super and Ultimate Series ▪ Order books for Super Series and Sports Series remain strong with dealer allocations continuing to reflect customer demand ▪ Ultimate Series remains sold out. Sports Series orders transition into 600LT as

• expected. Super Series orders on 720S Spider

strong and sold out into Q3 2019 ▪ 45% increase in wholesales volumes in FY 2018 compared to FY 2017 reflected in Revenue ▪ Favorable sales mix in 2018 with 87% volume growth in Super Series and 259 Ultimate Series vehicle sales compared to nil in 2017 ▪ Revenue in Racing impacted by reduced partnership income and reduced prize money reflecting Constructors championship position in prior year ▪ Significant Automotive improvement in Adjusted EBITDA between 2017 and 2018, covered on following slide ▪ Racing EBITDA reduction in line with revenue decrease ▪ Improved Applied Technologies positive movement year on year

871 1,257 FY2017 FY2018 3,340 4,829 FY2017 FY2018 65 143 FY2017 FY2018

FY2017 – FY2018 EBITDA Bridge

22 | McLaren FY2018 Results

▪ 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 income

Net Debt & Liquidity

23 | McLaren FY2018 Results

FY2018 Gross debt1 562 Cash and cash equivalents (97) Underlying net debt1 465 Net Leverage / Adjusted EBITDA2 3.25x Undrawn committed liquidity and

• verdraft lines3

78 Total available liquidity 175

▪ Gross debt reflects $250m and £370m 5-yr Senior Secured Notes issuance in July 2017 ▪ First £100m tranche of new Equity received in H1 2018, second tranche

• f £50m received in November

▪ £90m RCF, £78m available ▪ Cash utilisation due to investment in new models (Senna, 600LT and Speedtail) and the development of the Formula 1 car for 2019 season ▪ Positive cash inflow in Q4 2018 as EBITDA delivered and new equity 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)

Appendix

24 | McLaren FY2018 Results

Group Overview

25 | McLaren FY2018 Results

Summary Income Statement

26 | McLaren FY2018 Results

Group Cash Flow Statement

27 | McLaren FY2018 Results

EBITDA by company

28 | McLaren FY2018 Results

*Racing includes the sale of heritage cars, £10.0m (FY2018) and £27.5m (FY2017)

Reconciliation of McLaren Group and McLaren Holdings

29 | McLaren FY2018 Results

One Outstanding Luxury Automotive & Technology Group

30 | McLaren FY2018 Results

Sales and car volume split

◼ Global leader in high-performance luxury and technology offering the

ultimate ownership experience

◼ 55 year history of innovation and technical excellence ◼ Group revenue and cash generation underpinned by Automotive order

book and production capacity now demonstrated

◼ Latest McLaren “Speedtail” continues to demonstrate the success of

McLaren product pipeline + strength in brand

Highlights Automotive Racing Applied Technologies

◼ Offering the ultimate ownership experience

creating the iconic sportscar

◼ 18,000+ road cars hand-assembled to date ◼ Legendary racing history ◼ 20 Formula 1 World Championships ◼ Delivering advantage at the intersection of physical

and digital

◼ Customers in Motorsport, Automotive, Public

Transport and Health Revenue by division Car volumes by region

North America 36% APAC,

• ex. China

18% China 7% Rest of World 6% Europe 33% Formula 1 11% Automotive 84% Applied Technologies 5%

McLaren has a long history rooted in Racing & Innovation

31 | McLaren FY2018 Results Success in racing created a culture of outstanding performance, excellence and innovation

McLaren has a long history in Racing & innovation

32 | McLaren FY2018 Results Success in racing created a culture of outstanding performance, excellence & innovation

▪ ▪ ▪ ▪

Globally recognized brand

33 | McLaren FY2018 Results

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 Every model won multiple prestigious awards for unique technology and design

• f the Year Awards

12C P1 650S 675LT 570S 720S Launched year: 2011 Launched year: 2013 Launched year: 2014 Launched year: 2015 Launched year: 2015 Launched year: 2017

Automotive operates in four distinct segments

34 | McLaren FY2018 Results

Super Sports Motorsport Ultimate

▪ Super Series is the core of McLaren's range with the best technology available ▪ Derivatives include Coupe, Spider and LT limited editions ▪ Brings McLaren’s advanced technologies to the sportscar arena, with a lower price point than other McLaren series ▪ Derivatives include Coupe, Spider, GT and LT limited editions ▪ Track cars built for racing ▪ Based on road car models but without road car regulations and built to a racing specification ▪ High performance cars ▪ Built on the same basis as the Super series with additional ground-breaking technology ▪ Further track-only products

• ffers

▪ 650S, 650S Spider, 720S, 720S Spider ▪ 540C, 570S, 570S Spider, 570GT, 600LT ▪ 650S GT3, 570S GT4 and 570S Sprint, 720S GT3 ▪ P1, P1 GTR, McLaren Senna, McLaren Senna GTR, Speedtail ▪ High performance super cars with track performance ▪ One-piece MonoCage II carbon body ▪ Best power-to-weight ratio of sports car range in their class ▪ Lightweight construction with carbon chassis (75kg) ▪ Strictly limited editions for racing only ▪ Includes the first hybrid hyper car in the world ▪ Strictly limited production, sold

• ut years in advance

Description Models Features Purpose Price range

▪ Road / track ▪ Road / GT ▪ Track ▪ Road / track ▪ £200-300k ▪ £125-200k ▪ £200-400k ▪ >£500k ✓ Bespoke customisation options ✓ Limited editions and one-off models ✓ Pure McLaren track experience ✓ Pure GT racing series ✓ Lifestyle and heritage ✓ Expert advice and support ✓ Unique service cover

MSO1 Experiences Ownership