McLaren Q1 2019 Results May 22, 2019 2 | McLaren FY2018 Results - - PowerPoint PPT Presentation

McLaren Q1 2019 Results

▪May 22, 2019

Highlights

2 | McLaren FY2018 Results

3 | McLaren Q1 2019 Results

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Q1 2019 production delivered 1,289 vehicles delivered in comparison to 1,258 delivered in Q1 2018 (3% growth)

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Vehicle wholesales in Q1 2019 totalled 953 (1,064 in Q1 2018). Automotive global sales volumes impacted by timing of deliveries only but Q1 2019 revenue up 17% versus Q1 2018 and on track for full year

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Order book demand remains good with Ultimate Series sold out, Super Series orders taken into Q3 2019 and with Sports Series 600LT Coupe sold out into Q4 and 600LT Spider orders for delivery into Q3 2019; total order book 1,855 units

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Racing EBITDA improvement in the quarter driven predominantly by the increase in prizemoney from finishing 6th in the Constructors Championship in 2018

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Q1 2019 Group revenues £284m (Q1 2018 £241m) driven by Automotive mix and Racing prize money.

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Q1 2019 LTM EBITDA £150m Q1 2019 Automotive Racing Applied Technologies Revenue by division Car volumes by region

Formula 1 12% Automotive 82% Applied Technologies 6% North America 34% APAC, ex. China 22% China 4% Rest of World 4% Europe 36%

4 | McLaren Q1 2019 Results

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McLaren surpasses the 20,000th car hand-assembled at the McLaren Production Centre (“MPC”) in Woking, Surrey

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McLaren GT announced - superlight Grand Touring

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371 McLaren Sennas now delivered to customers. The first McLaren 600LT Spiders and 720S Spiders delivered to customers during the quarter

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McLaren currently 4th in the Formula 1 World Constructors’ Championship. Revenue and sponsor partnerships on plan

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New Racing leadership team now in place

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New CEO of McLaren Applied Technologies, Anthony Murray, has started and Paul Buddin confirmed as Group CFO on a full time basis

Q1 2019 Automotive Racing Applied Technologies

Business Update

5 | McLaren Q1 2019 Results

Automotive

6 | McLaren Q1 2019 Results

McLaren Production – 20,000th car built

7 | McLaren Q1 2019 Results

◼ McLaren Automotive celebrates its 20,000th car

to be hand-assembled at the McLaren Production Centre (MPC) in Woking, Surrey

◼ The latest milestone represents yet another

significant achievement coming eight years after the first McLaren road car left the MPC in July 2011

550 2,103 3,517 5,198 6,798 10,097 13,426 18,289 20,000 2011 2012 2013 2014 2015 2016 2017 2018 May 2019

McLaren Automotive production volumes (cumulative)

McLaren GT - Superlight Grand Touring

8 | McLaren Q1 2019 Results

◼ The superlight new McLaren GT challenges the conventions of the

Grand Tourer category

◼ To be positioned alongside the established Sports, Super and

Ultimate Series

◼ A new McLaren for a new audience in an expanding market

segment

◼ The fourth new model introduced in the McLaren Track25

business plan announced in July 2018

McLaren Automotive – Q1 production highlights

9 | McLaren Q1 2019 Results

▪ McLaren 600LT Coupe and Spider

▪ All production slots for Coupe full ▪ Strong order book for Spider variant extending into H2 2019

▪ McLaren 720S Spider

▪ H1 2019 sold out ▪ Order book extends into H2 2019

▪ McLaren Senna

▪ 371 delivered to date ▪ All 500 sold out in advance

Global Volumes - Q1 2019

10 | McLaren Q1 2019 Results

North America – (20%) China – 33% Europe – (12%) APAC – 27% RoW – (49%)

▪ Demand in all markets strong ▪ North America and Europe wholesale volume variances purely due to delivery timing ▪ RoW declined due to a weaker middle east regional economic conditions, as reported at the end of 2018

27 36 168 213 78 40 390 343 401 321

Racing

11 | McLaren Q1 2019 Results

Formula 1 World Championship

12 | McLaren Q1 2019 Results

A good step forward – but work to do

Formula 1 - on track ▪ Good pre-season preparation was followed by 4,000 km’s of track testing - a 46% increase on prior year ▪ The car is more competitive on track this year and the gap to the fastest cars has been reduced ▪ Clear improvements in reliability and operational competitiveness (pit stops / launches / race strategy) are also visible ▪ The new driver pairing of Carlos Sainz and Lando Norris both settling into the team well, showing a promising start to the season ▪ The team currently sits in 4th place (of 10 competitors) in the Constructors Championship after 5 races in 2019 ▪ Andreas Seidl and James Key have now taken up their positions Formula 1- off track ▪ Following improved

• n

track competitiveness the team has continued to build the commercial partnerships with new agreements signed including BAT, Huski Chocolate, Coca-Cola, Dell Estrella Galicia and Arrow Electronics

The Sporting Environment

13 | McLaren Q1 2019 Results

The Sporting Environment ▪ We support the aims and intentions of the Commercial Rights Holder (Formula One Group) and the regulating body the FIA. We are working very closely with both parties to help provide a more sustainable Formula 1 business model ▪ The introduction of a cost cap and redistributed revenue model is welcomed and we are preparing our future business plans on this basis on the assumption that written confirmation of these changes are confirmed during 2019 ahead of the last year of our commercial agreement with the sport in 2020 ▪ Formula 1 and motor racing have been core to our business for decades and have contributed to our brand, our capability and our technology ▪ The new era of Formula 1 provides an exciting opportunity to make a number of changes to the sport to enhance its position as the pinnacle of motorsport and the commercial framework to grow value for commercial rights holder and the teams ▪ We would expect to be reducing our cost base in F1 over the next 4 years at the same time as becoming more competitive on and off the track ▪ We expect the new regulations to be confirmed before the end of the Formula One season

Applied Technologies

14 | McLaren Q1 2019 Results

McLaren Applied Technologies – in pursuit of advantage

15 | McLaren Q1 2019 Results

McLaren Applied Technologies announces new CEO

Motorsport

Automotive

Automotive Public Transport Health

Q1 2019 Revenue (£m)

▪ 3rd Generation Standard ECU for F1 performing as expected in all cars for the 2019 season ▪ 2nd Generation Formula E batteries performing well and in line with expectations ▪ On-going development of F1 data visualisation tool ‘Atlas 10’ ▪ LNER passenger reservation system installed, now live ▪ Virgin Trains West Coast’s new WIFI solution going live in May ▪ Singapore proof of concept

• pportunities on condition

based maintenance are in development ▪ Wearable digital

• rthopedic device

development progresses ▪ Health analytics platform is showing strong interest, with the “Born in Bradford” research study signing up for a collaborative study ▪ Autonomous vehicle partnership development programme has been formally extended to work

• n the next phase

▪ Development of the Motor Control Unit for the McLaren Speedtail continues ▪ In Q1 Anthony Murray has now joined McLaren Applied Technologies from Qualcomm. Anthony has a strong background in building and scaling small to large businesses in highly relevant industry sectors and product sets, ranging from automotive, consumer electronics and health 15 16 Q1 2018 Q1 2019

Financials

16 | McLaren Q1 2019 Results

▪ Q1 2019

Results – Q1 2019

17 | McLaren Q1 2019 Results

Automotive wholesale volumes Revenue (£m) EBITDA (£m) ▪ All three series - Sports, Super and Ultimate -

• n sale during the quarter for the first time

▪ Order books for Sports Series and Super Series remain strong with dealer allocations continuing to reflect customer demand ▪ Small volume variance a result of the timing

• f deliveries only – still on track to deliver

around 4,800 units by the end of the year ▪ Revenue growth of 17% as a result of having the full Series range (Sports, Super and Ultimate) on sale in Q1 2019 vs Q1 2018 ▪ Racing revenue increased due to higher level

• f prizemoney, reflecting the improved

Formula One Constructors’ Championship position in 2018 ▪ Improvement in Automotive EBITDA Q1 2019 driven by Ultimate Series on sale in Q1 2019 ▪ Racing EBITDA reflects the increased revenue versus the prior year and favourable movement in Heritage car sales 1,064 953 Q1 2018 Q1 2019 241 284 Q1 2018 Q1 2019 8 22 Q1 2018 Q1 2019

Q1 2018 – Q1 2019 EBITDA Bridge

18 | McLaren Q1 2019 Results

▪ Racing EBITDA driven by higher prize money following the improved 2018 Championship result ▪ Automotive EBITDA growth driven by having all three series on sale in Q1 2019, whereas only Sports and Super Series on sale in Q1 2018 ▪ Heritage cars positive in quarter reflecting timing on sales versus prior year

+176% growth

Net Debt & Liquidity

19 | McLaren Q1 2019 Results

Q1 2019 Gross debt1 552 Cash and cash equivalents (29) Underlying net debt1 523 Net Leverage / EBITDA2 3.50x Undrawn committed liquidity and

• verdraft lines3

87 Total available liquidity 116

▪ Gross debt reflects $250m and £370m 5-yr Senior Secured Notes issuance in July 2017 ▪ During April, additional overdraft facilities under the RCF were increased to the full available permitted credit facility amount of £110m of which £97m is now available for liquidity purposes ▪ Cash utilisation due to investment in new models (720S Spider, 600LT Spider, McLaren GT and Speedtail) and the development of the Formula 1 car for 2019 season ▪ The shape of cash flow in 2019 expected to mirror 2018 cash flows ▪ Although Capex investment is higher in Q1 2019 we expect the full year Capex investment to be in line with last year

Senior Secured Notes (SSNs) outstanding of £564m plus £5m accrued interest. The SSNs includes £15m capitalised fees and revaluation FX gain £2m 2 Net Leverage includes reported gross debt £552m less cash of £29m and LTM EBITDA of £150m 3 Consists of RCF £100m less committed drawn Ancillary Lines (bank guarantees)

Appendix

20 | McLaren Q1 2019 Results

Group Overview

21 | McLaren Q1 2019 Results

Summary Income Statement

22 | McLaren Q1 2019 Results

Group Cash Flow Statement

23 | McLaren Q1 2019 Results

▪ Financing activities include £49.3m of investment from Nidala that was paid ahead of schedule

EBITDA by company

24 | McLaren Q1 2019 Results

*Racing includes the sale of heritage cars, £3.7m (Q1 2019) and £0.4m (Q1 2018)

One Outstanding Luxury Automotive & Technology Group

25 | McLaren Q1 2019 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 models 600LT Spider, 720S Spider, McLaren GT and

“Speedtail” continue 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

◼ 20,000+ 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

26 | McLaren Q1 2019 Results Success in racing created a culture of outstanding performance, excellence and innovation

McLaren has a long history in Racing & innovation

27 | McLaren Q1 2019 Results Success in racing created a culture of outstanding performance, excellence & innovation

▪ ▪ ▪ ▪ ▪ ▪

Globally recognized brand

28 | McLaren Q1 2019 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 distinct segments

29 | McLaren Q1 2019 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, a lower price point ▪ Derivatives include Coupe, Spider, 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, 600LT Spider

▪ 650S GT3, 570S GT4 and 570S Sprint, 720S GT3 ▪ P1 & GTR, McLaren Senna, Senna GTR, Speedtail ▪ High performance super cars with track performance ▪ 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 out years in advance

Description Models Features Purpose Price range

▪ Road / track

▪ Road

▪ 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

Grand Tourer

▪ Positioned alongside our established Sports, Super and Ultimate Series, this is a new McLaren for a new audience providing an alternative to existing products

▪ McLaren GT

▪ Attributes of competition levels of performance and continent crossing capability, yet lighter, faster, more engaging

▪ Luxury Grand Touring ▪ >£160k