C O N F I D E N T I A L Q3 2017 Results December 15, 2017 0
C O N F I D E N T I A L One outstanding luxury and technology group Highlights Sales and car volume split Sales by division Car volumes by region Global leader in high-performance luxury and technology Applied RoW Technologies 11% 55 year history dominated by technical excellence 5% North China America Racing 7% Revenue visibility via automotive order book and F1 contracts 35% 25% APAC ex. Q3 2017 LTM normalized PF revenue: £1,099m China Automotive 17% 70% Europe Q3 2017 LTM normalized PF EBITDA: £160m 30% 2016: £898m 2 2016: 3,286 units Automotive Racing Applied Technologies 2016 Revenues: £650m 2016 Revenues: £225m 2016 Revenues: £52m Award winning high performance luxury cars Unique brand platform with global visibility Cutting-edge tech solutions and data analysis “Experience” -led customer proposition 20 F1 World Championships 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 10 1
C O N F I D E N T I A L McLaren Senna & McLaren BP23 overview Senna BP23 Type Ultimate Series car revealed in December 2017 Type Hyper-GT announced in 2016 Volume 500 Volume 106 # units sold Sold out # units sold Sold out Price £750k Price N/A Exp. 1 st delivery Exp. 1 st delivery Early 2020 Q3 2018 1 2
C O N F I D E N T I A L Highlights Accelerating car volumes in Q3 2017 with full production ramp-up of 720S and 570S Spider now complete as of Q4 2017 Continued strong order book, with 720S and 570S Spider sold out into Q3 and Q2 2018 respectively Production run-rate of 375 and 430 cars built in October and November respectively Exclusive new Senna model already sold out Q3 2017 group revenues of £244m (vs. £189m in Q2 2017), with the increase mainly driven by continued ramp-up of production McLaren Automotive was ranked as the number one company overall in The Sunday Times Top Track 250 league table Q3 2017 normalised EBITDA of £42m (vs. £23m in Q2 2017) and reported EBITDA of £23m LTM normalised EBITDA of £160m McLaren Racing and Fernando Alonso extend relationship into 2018 F1 Season following announced Renault engine supply partnership Large pool of active sponsorship leads and significant number in contract negotiation Continued growth in Applied Technologies underpins disruptive technology offering in attractive end markets Strong balance sheet and ample liquidity for future investment requirements 8 3
C O N F I D E N T I A L Full year 2017 outlook Strong order book position as of 30 September 2017 reflects exceptional demand for 720S, 570S Spider and Senna Modest impact on Q3 volumes from slower than anticipated production ramp-up of 570S Spider Reduced full year volume guidance of c. 3,300-3,400 cars Improved October and November production run-rate of 375 and 430 cars per month respectively Run-rate achieved supports anticipated 2018 production levels Significant Automotive volume growth expected in 2018 following full production ramp-up now achieved 2018 volumes expected to be >4,300 cars Very strong product mix expected in 2018 with the Senna expected to impact margins positively Racing and Applied Technologies expected to be broadly EBITDA neutral for FY 2017 assisted by a small number of heritage vehicle sales No impact from termination of Honda partnership in FY 2017, with 2018 impact expected to be partially mitigated through increased sponsorship revenues and reduced Racing cost base Expected FY 2017 EBITDA of £65-75m and normalised EBITDA of £160m 19 4
C O N F I D E N T I A L Successful launch of Sports Series Spider Sports Series Sold out into Q2 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
– C O N F I D E N T I A L Successful product launches – sweep of awards for critically acclaimed 720S Sold out Into Q3 2018 CAR Magazine: Sportscar Road & Track: Performance Scottish Car of the Year 2017 of the Year 2017 Car of the Year 2018 AUTOCAR 5-Star Car EVO: 5-Star Car Auto Express 5-Star Car BBC Top Gear: Performance Car Women’s World Car Octane Awards 2017: Supercar of the Of The Year 2017 Of The Year 2017 Year 6
C O N F I D E N T I A L Revealing the extraordinary new McLaren Senna “It’s clear the Senna is something very special” Sold out EVO Revealed in December 2017 “A tremendous and savage presence in the metal ” “This is McLaren's road-legal track monster” Pistonheads “There’s nothing about McLaren’s latest something more than a supercar that’s not astonishing” “The Senna really is a performance geek’s dream and it is all beautifully manufactured and assembled, as is the way with McLarens these day” Telegraph 7
C O N F I D E N T I A L Historical financials overview Pro forma normalised Group Revenue 1 (£m) Pro forma normalised Group EBITDA (£m) Margin 2 1,099 14.6% 2 13.5% 16.3% 16.5% 185 Revenues Adjustments Automotive margin 2 24.0% 22.1% 21.8% 18.9% 2 EBITDA Adjustments 160 914 898 735 728 88 148 119 99 72 2014A 2015A 2016A LTM 3Q17 2014A 2015A 2016A LTM 3Q17 Continued growth in normalised EBITDA Track record of sustained revenue growth Reduced Automotive margin reflects increased cost base to support YTD 2017 revenue impacted by planned shut down in automotive production operational ramp-up in production (SAP implementation), anticipated gap in Super Series line-up and slower Racing margin impacted by increased cost of Formula 1 car driven by than anticipated production ramp-up of 720S and 570S Spider regulation changes for 2017 Underlying net debt 3 (£m) Automotive volume (units) 3,286 3,198 503 1,649 1,612 2014A 2015A 2016A LTM 3Q17 Sep 2017 Strong volume performance despite 720S and 570S Spider not being Net debt position reflects July 2017 bond issuance of £564m and £61m cash delivered until June 2017 and August 2017 respectively position Full production ramp-up of 720S and 570S Spider now complete in Q4 2017 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 3Q17 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 £1,099m and £160m; LTM Automotive margin based on normalised automotive revenues and EBITDA of £791m and £140m 3 Reported net debt of £481m includes reported gross debt of £542m (underlying gross debt of £564m, £22m of capitalised fees, £7m of accrued interest and £6m of FX gains) and cash of £61m 39 8
C O N F I D E N T I A L Q3 2017 summary Automotive volumes Group revenue (£m) Group normalised EBITDA (£m) 834 244 42 804 212 193 23 20 727 Q3 2016A Q2 2017A Q3 2017A Q3 2016A Q2 2017A Q3 2017A Q3 2016A Q2 2017A Q3 2017A Profitability in-line with plan driven by timing of Stronger y-o-y Q3 Automotive revenues driven Strong volume performance despite slower model launches and production ramp-up by wholesale volume growth than anticipated production ramp-up of 720S Sales mix impact driven by Super Series mix changes, with sales of 720S only in Q3 17 Continued revenue growth vs Q2 2017 reflects June 2017 versus 675LT only in Q3 16 continued ramp-of 720S production SG&A increase resulting from operational Strong Super Series and Sports Series order ramp-up Growth in Racing revenues with increased book and dealer allocations reflects exceptional Racing EBITDA growth driven by increased price fund partially offset by lower sponsorship prize money for 2016 Constructors customer demand revenue Championship supplemented by the profit on sale of a number of heritage cars, partially 720S sold out into Q3 2018 Applied Technology revenue up 28% y-o-y offset by a drop in sponsorship income 9 9
C O N F I D E N T I A L Normalised EBITDA bridge Normalised EBITDA bridge £6m £160m £66m £16m £72m Q3 2017 LTM EBITDA Impact of SAP implementation Impact of ramp up Cost synergies Normalised Q3 2017 LTM (Q1,Q2 and Q3) EBITDA Developing Normalised EBITDA Reported (and unadjusted) LTM Q3 2017 EBITDA LTM Q3 2017 Adjustment for lost volumes in January 2017 when a new SAP system was installed at McLaren Technology Centre, and SAP Implementation production was shut down during the implementation period One-off ramp-up Reflects impact of production gap due to timing of new 720S and 570S Spider launch compared to other models effects in Q1, Q2 and Reflects McLaren transition to a complete product line-up following product portfolio build up during recent years Q3 Representing 50% of £12m run-rate cost synergies to be achieved by 2018 mainly by removing duplicate cost post Cost synergies in Q3 business integration Normalised EBITDA at Reflects Company’s underlying LTM performance LTM Q3 2017 40 10
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