TIDMINCH
RNS Number : 6086X
Inchcape PLC
27 April 2023
27 April 2023
Inchcape plc, the leading global automotive distributor,
announces its Q1 trading update
covering the period from 1 January to 31 March 2023
Q1 trading update: continued strong business momentum
-- The Group has made an excellent start to the year; with full
year results expected to be in line with published market consensus(1)
-- Group revenue GBP2.7bn: up 50% on a reported basis, reflecting
the benefit of M&A, including Derco, and organic growth of +13%,
with growth across all regions
-- Derco's revenue and profit contribution was in line with our
expectations; delivery of the integration plan is progressing
well (including synergy targets), we prioritised aligning inventory
management practices with those employed across Inchcape. Reiterate
our operating margin expectation: towards the top-end of a typical
distribution business (5-7%; pre-synergies).
-- Expanding our APAC distribution footprint: agreed the purchase
of Mercedes-Benz's distribution operations in Indonesia (c.GBP200m
annualised revenue) and CATS in the Philippines (c.GBP120m annualised
revenue) - with completion anticipated in 2H23. Appointed distributor
of Tata commercial vehicles in Thailand.
Duncan Tait, Group CEO, commented :
"Inchcape has made an excellent start to 2023. Our first quarter
results show a continuation of the trends we experienced at the end
of last year, with organic growth underpinned by the improvement in
vehicle supply. Growth in the Distribution segment was further
accelerated by the significant contribution from new businesses in
the Americas - with Derco, Simpson Motors and Ditec all
contributing positively. I am especially pleased with our progress
in integrating Derco, and we remain firmly on track with our
plans.
During the quarter we continued to shift the Group's portfolio
towards Distribution, expanding our footprint in APAC. This
included Mercedes-Benz's operations in Indonesia and an agreement
to acquire CATS, the leading distributor of luxury vehicles in the
Philippines - another new and exciting high growth market for the
Group . The combination of our broad market footprint, strong OEM
relationships, our digital and data capabilities and our robust
financial position continues to make Inchcape the natural
consolidator in a highly fragmented industry.
Inchcape is a business with great momentum and an exciting
future. With a clear and proven strategy, we are well-positioned to
capitalise on further opportunities for organic growth and market
consolidation, and I am confident we will continue to deliver
sustainable growth and long-term value for all our
stakeholders."
Outlook:
Following an excellent start to 2023, and based on prevailing
market conditions, we expect to make strategic, operational and
financial progress, underpinned by the integration of Derco, with
full year results expected to be in line with published market
consensus(1) .
Q1 revenue YoY% Reported Constant FX Organic(2)
================= ========= ============ ===========
Group +50% +44% +13%
Distribution +70% +60% +15%
Retail +8% +8% +8%
----------------- --------- ------------ -----------
1: 2023 Adjusted PBT analysts' consensus: GBP487m (as published
on 11 April 2023)
2: Organic growth is defined as sales growth in operations that
have been open for at least a year at constant foreign exchange
rates
Update on Derco
-- Derco's revenue and profit contribution was in line with our
expectations (with strong performance for certain brands offset
by normalising market share elsewhere; Aftermarket performance
was resilient)
-- Integration is progressing well; we prioritised aligning inventory
management practices with those employed across Inchcape and
have made good progress in Q1. As previously outlined, before
the end of 2023 we anticipate a GBP200m working capital inflow
from reducing Derco's inventories will be partially offset by
a working capital outflow across the rest of the Group.
-- Reiterating our expectation of delivering an operating margin
towards the top-end of a typical distribution business (5-7%;
pre-synergies), confidence on the delivery of recurring synergies
(of at least GBP40m; 30% realised in 2023) and EPS accretion
of >15% in 2023 and >20% in 2024.
Channel review
The commentary that follows covers the period from 1 January to
31 March 2023. Unless otherwise stated, all figures are quoted on
an organic basis.
During the quarter, Group revenue increased 50% on a reported
basis, reflecting the benefit of M&A, including Derco, and
organic growth of +13%, with growth across all regions.
In Distribution, revenue increased 70% on a reported basis,
reflecting the consolidation of Derco and the benefit from Simpson
Motors and Ditec, both acquired in 2Q22. Organic growth increased
15%, supported by improving new vehicle supply and Aftermarket
growth.
In Retail, revenue grew 8%, a robust performance in the context
of the switch to Agency (for certain brands) at the start of the
year. The underlying performance was stronger as supply
improved.
Distribution Q1 organic revenue YoY%: +15%
Americas
-- Good performance despite several markets lapping challenging comparators;
market share gains for brands that were supply constrained during
2022
-- Continued growth of Aftermarket and bravoauto roll-out supported
growth in Used revenue
APAC
-- Performance in Singapore and Hong Kong in line with our plan
(expect improvement from late-2023); reopening of border with
China has increased order books in Hong Kong
-- Rest of Asia saw a continuation of its growth trend
-- In Australasia, continued strong momentum underpinned by improving
vehicle supply and a long order book. bravoauto gaining traction.
Europe & Africa
-- Double-digit growth in Europe in vehicles (new and used) supported
by better vehicle supply; with a particularly strong performance
in Romania, Greece and Bulgaria. Still early days for bravoauto,
but business progressing well.
-- Africa performance underpinned by robust growth of Aftermarket
Retail(3) Q1 organic revenue YoY%: +8%
-- Underlying volume growth in new vehicles. Significant improvement
in used vehicle revenue supported by a more established bravoauto
business.
-- Revenue growth was adversely impacted by the shift towards Agency
for certain brands
3: UK and Poland
Market abuse regulation statement
This announcement contains inside information.
Conference call today
A conference call for analysts and investors will be held today,
Thursday 27 April, at 08:30 (UK time).
Dial-in details: +44 (0)330 551 0200 / 0808 109 0700
A replay of the call will be available via the Company's
website, www.inchcape.com later today.
Financial calendar
Ex-dividend date for 2022 11(th) May 2023
f inal dividend
Record date 12(th) May 2023
Annual general meeting 18(th) May 2023
2022 final dividend payment 19(th) June 2023
Half year results 27 (th) July 2023
Q3 trading update 26 (th) October 2023
Contacts
Inchcape plc:
Raghav Gupta-Chaudhary Investor queries +44 (0)7933 395 i nvestors@inchcape.com
158
Krishma Arora
Media enquiries (Brunswick
Group):
Kate Holgate / Helen +44 (0)20 7404 inchcape@brunswickgroup.com
Smith 5959
About Inchcape
Inchcape is the leading global automotive distributor, with
operations across six continents. Through the unique expertise of
our people, our suite of cutting-edge technology products, and our
approach to advanced data analytics, we provide the platform for
the world's leading mobility companies to accelerate their
ambitions in markets where we and our partners want to succeed.
Our distribution platform connects the products of mobility
companies with customers, and our responsibilities span from
product planning and pricing, import and logistics, brand and
marketing to operating digital sales, managing physical sales and
aftermarket service channels.
Inchcape is driven by its purpose of 'bringing mobility to the
world's communities, for today, for tomorrow and for the better'.
We are committed to making a positive contribution to the
communities in which we operate, for our people, for society and
for the planet. The Group is headquartered in London and employs
around 19,000 people globally.
www.inchcape.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTEAXLKASEDEFA
(END) Dow Jones Newswires
April 27, 2023 02:00 ET (06:00 GMT)
Inchcape (LSE:INCH)
Historical Stock Chart
From Apr 2024 to May 2024
Inchcape (LSE:INCH)
Historical Stock Chart
From May 2023 to May 2024