JAGUAR LAND ROVER AUTOMOTIVE PLC ADRIAN MARDELL
Transcript of JAGUAR LAND ROVER AUTOMOTIVE PLC ADRIAN MARDELL
Investor presentation
JAGUAR LAND ROVER AUTOMOTIVE PLCChief Financial Officer
A D R I A N M A R D E L L
18 J u l y 2 0 2 1
D I S C L A I M E R
© 2 0 2 1 J A G U A R L A N D R O V E R
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Statements in this presentation describing the objectives, projections, estimates and expectations of Jaguar Land Rover Autom otive plc and its direct and indirect subsidiaries (the
“Company”, “Group” or “JLR”) may be “forward - looking statements” within the meaning of applicable securities laws and regulation s. Actual results could differ materially from
those expressed or implied. Important factors that could make a difference to the Company’s operations include, among others, economic conditions affecting demand / supply and
price conditions in the domestic and overseas markets in which the Company operates, the effects of the COVID -19 pandemic, changes in Government regulations, tax laws and
other statutes and incidental factors. All forward -looking statements apply only as of the date hereof and we undertake no oblig ation to updated this information except as
required by law and do not assume any responsibil i ty for the ultimate fairness, accuracy, correctness or completeness of any such information presented herein.
- Q1 represents the 3 month period from 1 April to 30 June
- Q2 represents the 3 month period from 1 July to 30 September
- Q3 represents the 3 month period from 1 October to 31 December
- Q4 represents the 3 month period from 1 January to 31 March
- FY represents the 12 month period from 1 April to 31 March of the following year
Unless stated otherwise sales volumes are expressed in thousand units, f inancial values are in GBP mill ions.
Consolidated results of Jaguar Land Rover Automotive plc and its subsidiaries contained in the presentation are unaudited and presented under IFRS as approved in the EU.
Retail volume data includes sales from the Company’s unconsolidated Chinese joint venture (“CJLR”), these are excluded from W holesale volume data.
EBITDA is defined as profit before: income tax expense; exceptional items; f inance expense (net of capitalised interest) and f inance income; gains/losses on debt and unrealised
derivatives, realised derivatives entered into for the purpose of hedging debt, and equity or debt investments held at fair v alue; foreign exchange gains/losses on other assets and
l iabil it ies, including short-term deposits and cash and cash equivalents; share of profit/loss from equity accounted investments ; depreciation and amortisation.
EBIT is defined as EBITDA but including share of profit/loss from equity accounted investments, depreciation and amortisation .
Free cash flow is defined as net cash generated from operating activities less net cash used in automotive investing activiti es, excluding investments in consolidated entities and
movements in f inancial investments, and after f inance expenses and fees paid.
Certain analysis undertaken and represented in this document may constitute an estimate from the Company and may differ from the actual underlying results.
The information contained in his presentation is provided as of the date of this presentation and is subject to change withou t notice. The information contained in this document
may be updated, completed, revised and amended and such information may change materially in the future. The Group is under n o obligation to update or keep current the
information contained in this document.
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© 2 0 2 1 J A G U A R L A N D R O V E R 3© 2 0 2 1 J A G U A R L A N D R O V E R 3
Recent business developmentsQ1 sales up significantly, semiconductor supply challenges, record JLR order bank
Q1 retails up 68% YoY, chip supply constrained wholesales by 30k units
Strategy & Sustainability team formed to focus on clean mobility & connectivity
New long wheel base Range Rover Evoque launching from the China JV
Chip supply dynamic, expected to worsen in Q2, start to improve in H2
Record order bank of 110,000 units
Agreed increase in RCF to £2b through July ‘22 and to £1.43b through March ‘24
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Strong Q4 PBT of £534m before exceptional items*, EBIT 7.5%Q4 cash flow £729m to achieve £185m for full year
Q4 & F Y 2 1 | IFRS, £m
0.1%
2.6%
FY20 FY21
(3.2)%
7.5%
Q4 FY20 Q4 FY21
E B I T
6.2% 15.3%E B I T D A
8.9% 12.8%E B I T D A
5,426
6,538
Q4 FY20 Q4 FY21
22,98419,731
FY20 FY21
R E V E N U E
YoY+20.5%
YoY(14.2)%
(494)
534
Q4 FY20 Q4 FY21
(393)
662
FY20 FY21
P B T *
YoY+1,028
YoY+1,055
105
729
Q4 FY20 Q4 FY21
(759)
185
FY20 FY21
F R E E C A S H F L O W
YoY+624
YoY+944
* Restructuring charges of £1.5b, including c. £1b of non-cash write-downs of prior investments and c. £0.5b cash restructuring charges (payable in FY22)
Q4
FY
© 2 0 2 1 J A G U A R L A N D R O V E R
109.9123.5
Q4 FY20 Q4 FY21
23.4 22.3
Q4 FY20 Q4 FY21
28.2 26.3
Q4 FY20 Q4 FY21
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Q4 Retail sales 123.5k, up 12% YoY with China up 127%FY21 down 14% YoY due to Covid but China up 23%
Q4 & F Y 2 1 | Retail Units in 000’s
U K C H I N A
YoY(7)%
N . A M E R I C A O V E R S E A SE U R O P E T O T A L
YoY(5)%
YoY+12%
28.5 31.4
Q4 FY20 Q4 FY21
12.2
27.6
Q4 FY20 Q4 FY21
YoY+127%
17.6 15.8
Q4 FY20 Q4 FY21
YoY(10)%
YoY+10%
106.6
83.0
FY20 FY21
129.3110.8
FY20 FY21
107.0
79.3
FY20 FY21
90.1111.2
FY20 FY21
75.5
55.3
FY20 FY21
508.7439.6
FY20 FY21
YoY(22)%
YoY(14)%
YoY(26)%
YoY+23% YoY
(27)%
YoY(14)%
Q4
FY
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Charge+ FY21 savings £2.5b – achieving full year target£6b lifetime Charge programme savings (since Sept 2018)
£0.1b
£0.3b delivered in Q4 FY21 to achieve £2.5b FY21 target £6b lifetime Charge savings
Savings in FY21
£2.5b
Working Capital
£1.0b
Lifetime Savings
£6.0b
InvestmentCost &Profits
£2.9b
£2.1b
Working Capital
£0.4b
InvestmentCost &Profits
£1.0b
£0.8b
£0.2b
Q4 FY21 savings
Q1-Q3 FY21 savings
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Cash flow break-even reduced to c. 400k unitsTransformation supported by Charge and Refocus
Units 000’s | £m
425450
500550
575600
500
<400
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
400+
Wholesales 471 509 535 545 508 565 476 348 TBD Increasing
Cash flow 749 502 637 (25) (910) (882) (759) 185 TBD Positive
Sales growth, new models &capacity expansion
FY23 & Beyond
Wholesales illustrated reflect approximate break-even levels
Wholesales required for breakeven cashflow
BUSINESS UPDATE
81 8 M a y 2 0 2 1
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Compelling and desirable portfolio today – 12 of 13 nameplates electrifiedExciting new products to be announced in the next 9-12 months
Range Rover Sport
Defender 110
Discovery Sport
XE & XELF-PACE Range Rover Velar
Defender Hard TopE-PACE
Range Rover Defender 90
DiscoveryF-Type
XF & XFLI-PACE
Range Rover Evoque
L A N D R O V E RJ A G U A R
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Reimagine strategy - Modern Luxury by DesignElectrification of the Jaguar and Land Rover brands
The electrification of the Jaguar and Land Rover brands is at the heart of Reimagine, set against a canvas of true sustainability.
Our accelerated path towards electrification through Reimagine will contribute to becoming a net carbon zero carbon business by 2039
– Reimagination of Jaguar as an all-electric luxury brand from 2025
– First all-electric Land Rover model in 2024
– All Jaguar and Land Rover nameplates to be available in pure electric form by end of the decade
Land Rover - delivering modern luxury through its 3 families - 6 BEV variants in the next five years
Jaguar as a pure electric luxury brand; pioneering next-generation technologies
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Reimagine strategy - Modern Luxury by Design3 BEV-first platforms, collaboration and capacity reduction to achieve double-digit EBIT by FY26
60%
80%
100%
FY22 FY23 FY24 FY25 FY26 FY27
Utilisation
Global 2-shift capacity
3 B E V - F I R S T P L A T F O R M S L E V E R A G E C O L L A B O R A T I O N S R E D U C E C A P A C I T Y B Y 2 5 %
2 0 2 1 / 2 2 L R : M L A F L E X
2 0 2 5J A G U A R : P U R E B E V
2 0 2 4 L R : E M A N A T I V E B E V
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T R A N S F O R M A T I O N O F F I C E
Q U A L I T Y P R O G R A M M E D E L I V E R Y
& P E R F O R M A N C E
D E L I V E R E D C O S T P E R C A R
E N D - T O - E N D S U P P L Y C H A I N
C U S T O M E R & M A R K E T
P E R F O R M A N C E
C H I N A
1 2 3 4 65
Reduced warranty spend
Efficient programme delivery
Reduction in vehicle cost
Faster vehicle delivery times
Increased profitable market share
Increased profitable market share
A G I L E O R G A N I S A T I O N & C U L T U R E
Agile Organisation, Leadership, Capability, Culture
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I N D I G I T A L
Using data and technology to power the transformation
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R E S P O N S I B L E S P E N D
Sustaining the cost improvements
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Drives transformation activities across the organisation to deliver value, efficiencies and profitability
Refocus will deliver:
• Up to £1b of value in FY22
• Improved customer satisfaction scores
• Focus on sustainability
Reimagine strategy - Modern Luxury by DesignRefocus transformation to drive the transformation of the business
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8.3
23.7
Q1FY21
Q1FY22
20.8
31.4
Q1FY21
Q1FY22
11.5
25.8
Q1FY21
Q1FY22
23.7 27.0
Q1FY21
Q1FY22
9.7
16.6
Q1FY21
Q1FY22
74.1
124.5
Q1FY21
Q1FY22
10.7
23.7
Q1FY21
Q1FY22
9.1
15.0
Q1FY21
Q1FY22
11.0
18.2
Q1FY21
Q1FY22
8.6
12.7
Q1FY21
Q1FY22
9.5
14.9
Q1FY21
Q1FY22
48.9
84.4
Q1FY21
Q1FY22
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Q1 Retail sales 124.5k, up 68% YoY with UK & Europe up >100%Wholesales up 73%, but 30k units lower than potential demand due to chip supply constraints
Q1 F Y 2 2 | Retai l Units in 000’s
U K C H I N AN . A M E R I C A O V E R S E A SE U R O P E T O T A L
YoY+65%
YoY+122%
YoY+65%
YoY+48%
YoY+56%
YoY+73%
WH
OL
ES
AL
ES
RE
TA
IL
S
YoY+187%
YoY+124%
YoY+51%
YoY+68%YoY
+14%YoY
+71%
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Estimated cash £3.7b and £1.9b undrawn RCF at 30 June - £5.6b liquidityQ1 FY22 estimated free cash outflow of c. £1b (unaudited)
IFRS | £m
3,700Proforma
Total Cash
400763 981
509 853363 472
4,342
204 270
679
104
581
1,838
519
1,935 undrawn RCF
625undrawn RCF
1,310undrawn RCF
TotalLiquidity
CY21 CY22 CY23² CY24 CY25 CY26 CY27 CY28 TotalDebt
Cash and financial deposits Bonds Bank loans Leases (IFRS16)
D E B T M A T U R I T Y P R O F I L ETotal
liquidity c. 5,600
Total debt 6,697
NOTES: • Total Liquidity includes £3m undrawn portion of Fleet Buyback facility• £679m bank loan maturities in CY23 includes RMB 5b 3-year syndicated revolving loan facility, subject to annual confirmatory review• Total debt includes £(2)m comprising £32m of other debt, offset by £34m of capitalised fees and fair value adjustment
Accessions signed to increase RCF by 80m to 2.015b through to July 2022
and 1.43b through to March 2024
© 2 0 2 1 J A G U A R L A N D R O V E R
I m p a c t
– Production has been impacted by chip shortages, resulting from structural supply constraints including the impact of Covid and exacerbated by some specific factors affecting our Tier 2 suppliers
– Demand remains strong and Q1 retails were up 68% year-on-year and the sold order bank is at a record 110k units
– Whilst Q1 wholesales were up 73% this is 27% lower than we had initially planned due to supply constraints
– Latest expectation for Q2 is that chip supply will reduce further and wholesales may be down 50% from planned levels
– Situation expected to improve in H2 however some underlying structural capacity issues will only be resolved as supplier investment in new capacity comes on line over next 12 to 18 months
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Chip supply status and outlookSituation is dynamic and difficult to forecast; but expected to improve in H2
A c t i o n
– Mission control centre established with risk surveillance and real time demand/supply simulation supported by applied analytics and robotic process
– Daily contact with tier 1 suppliers, tier 2 chip manufacturers and chip brokers to maximise supply in the short term
– Prioritisation of higher margin models
– Optimisation of chip and product specification to reduce dependence on chips in short supply
– Management of vehicle pre-build to support retrofit to quickly meet demand as soon as chip supply becomes available
– Increased visibility and control over future chip supply, including for example long term contracts to ensure security of supply
➢ In scenario above, free cash outflow of c. £1b with negative EBIT margin in each of Q1 and Q2➢ Expect substantial improvement in underlying operating cash flow in second half of the financial year as chip supply improves(before exceptional
cash restructuring charges announced as part of the Reimagine strategy in Q4)
© 2 0 2 1 J A G U A R L A N D R O V E R
M on t h s s ol d or d e r c ov e r
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4 4
10.5
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Global order bank at 110,000 units – largest in JLR historyStrong demand for when chip supply improves
U n i t s
U K C H I N AN . A M E R I C AO V E R S E A SE U R O P E T O T A L
7,953 4,827 11,214
4,367 698
41,153
27,161
26,214
10,677
4,560 29,059
109,765
3
Majority of sales direct from dealer stock in US and China
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Reimagine medium and long-term targets remain unchanged
K E Y P R I O R I T I E SF I N A N C I A L T A R G E T S
- Proactively manage current supply chain risks
- Execute Reimagine strategy
- Execute Refocus transformation programme and continue to drive cost efficiency
- Continue to drive quality over quantity of sales
F Y 2 4
R E V E N U E
E B I T M A R G I N
I N V E S T M E N T
F R E E C A S H F L O W
I N C R E A S I N G
≥ 7 %
c . £ 2 . 5 b
P O S I T I V E
F Y 2 6
> £ 3 0 b
≥ 1 0 %
c . £ 3 b
P O S I T I V E
T H A N K Y O U
© 2 0 2 1 J A G U A R L A N D R O V E R
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ADRIAN MARDELL
Chief Financial Officer
Jaguar Land Rover
JAGUAR LAND ROVER INVESTOR RELATIONS
JAGUAR LAND ROVER
Abbey Road, Whitley, CoventryCV3 4LF, UK
jaguarlandrover.com
BENNETT BIRGBAUER
Treasurer
Jaguar Land Rover