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Agenda
1) Proven business model and strategy
2) The right markets and channel mix
3) Operational excellence delivery
4) Sustainable earnings growth
4
Global premium automotive group, partner to the world’s leading car brands
Supported by the Right Growth Strategy
Right Markets:70% of profits from
Asia Pacific & EM
30% from UK &
Europe
Right Categories:Five distinct
revenue streams offering growth /
defensive mix
Right Financials:Attractive growth
prospects, strong
cash generation & robust balance sheet
Right Brands:90% of profits
from 6 leading
premium OEMs
5
Inchcape Customer 1st Strategy
STRENGTHEN
Superior customer
value proposition
through Inchcape
Advantage
EXPAND
Selective
investment in high
margin / high
growth areas
Creating an incredible customer
experience for the best car brands in
the world
6
Operational discipline on Top Five Priorities
Balanced focus between commercial and cash initiatives
Customer 1st strategy to create differentiation
Commercial initiatives to grow revenues ahead of
competitors
Cash initiatives to grow profit and operating
cash faster than revenue
Brand portfolio of the world’s leading
premium and luxury automotive brands
Improving margin
Controlling working capital
Selective capital
expenditure
Growing marketshare
Growing aftersales
8
APAC / Emerging Markets UK / Europe
Reta
il
Hong KongGuamMacauSaipanBruneiSingaporeRomaniaBulgariaMacedonia
AlbaniaEstoniaLithuaniaLatviaAustraliaNew ZealandEthiopiaChilePeru
RussiaChinaPoland
BelgiumLuxembourgGreeceFinland
UK4%
Dis
trib
uti
on
& V
IR
28%
72%
Total
66% 6%
24%
The right markets and channel mix
Note: H1 2013 Trading Profit
30%70%
9
• 72% of Inchcape’s trading profit comes from high quality distribution and vertically integrated operations in 22 small and medium size markets
• 90% of distribution / VIR profit from high growth and high margin APAC and EM regions
• Six core premium & luxury brand partnersToyota, Subaru, BMW, Volkswagen, Mercedes & Jaguar Land Rover
• Top 3 market share positions in 11 markets with scale advantage in all countries
• Defensive profit streams from scale aftersales businesses
• Robust growth prospects in all categories
Premium & luxury automotive distribution in small & medium size markets
10
Attractive distribution / VIR business model
• 22 Distribution & Vertically Integrated Retail (VIR) markets11x VIR11x Distribution
• Exclusive agreements, one distribution agreement per market per brand
• Act as the brand in the country, manage the value chain ex manufacturing
• Exclusive importer for all vehicles and parts
• Responsibility for sales and marketing activities for vehicle distribution
• Distribution of spare parts to all dealers providing aftersales service
• Light fixed capital footprint, high ROCE and strong cash generation
11
Focused on small and medium size markets
22 markets with robust growth characteristics
• Top 10 global auto markets account for 73%* of total new
vehicle demand
• All Inchcape markets
(Distribution and VIR)
outside of the top 10
• Superior management and
operational processes to local competition
• Scale positions in Sales and
Aftersales
* 2012, IHS Automotive
12
Market share strength delivers scale returns
• Top 3 market share position in:
Brunei, Bulgaria, Chile, Ethiopia, Greece, Guam, Hong Kong, Macau, Peru, Saipan, and Singapore
• Long established strong positions
• Strong share in new vehicles drives our pricing power and cost effectiveness
• Scale in the new vehicle segment creates scale in the Car Parc for parts and service activities
13
APAC / Emerging Markets UK / Europe
Reta
il
Hong KongGuamMacauSaipanBruneiSingaporeRomaniaBulgariaMacedonia
AlbaniaEstoniaLithuaniaLatviaAustraliaNew ZealandEthiopiaChilePeru
RussiaChinaPoland
BelgiumLuxembourgGreeceFinland
UK4%
Dis
trib
uti
on
& V
IR
28%
72%
Total
66% 6%
24%
The right markets and channel mix
Note: H1 2013 Trading Profit
14
Selective investment in high quality large retail markets
• UK, China and Russia are amongst the largest premium / luxury automotive markets in the world
• China #2• UK #6• Russia #8
• Excellent UK operations with class leading returns and retail standards
• Strong footprint with world class facilities in Russia positioned to leverage structural growth
• Six luxury retail sites in China
• Operational best practice processes transferred across the Group
• Our established UK business acts as an important source of expertise and strengthens our brand
partner relationships
• UK 24% of Group H1
2013 trading profit
Ranking from IHS Automotive (2012)
17
Inchcape core purpose
Creating an incredible customer
experience for the best car brands in
the world
18
Inchcape bespoke operational processes drive superior performance
Market understanding & forecasting
Dealer network development
Performancemanagement
Risk management
Supply management& logistics
World class retailstandards
Capex & investment
Investing in people
Marketing & innovation
Customer serviceInchcape Advantage
Global ITinfrastructure
Rewarding performance
19
UK / EuropeMarket understanding
& forecasting
Dealer network
development
Performancemanagement
Risk management
Supply management& logistics
World class retailstandards
Capex & investment
Investing in people
Marketing & innovation
Customer service
Inchcape Advantage
Global ITinfrastructure
Rewarding performance
Inchcape bespoke operational processes drive superior performance
20
Inchcape: BMW Chile
* 2009 - 2012
• Distribution business
operated since 1994
• Population 17.4m (6m in Santiago)
• 5.7% 3 year real GDP CAGR*
• Market leader with one of highest
market shares for BMW in the World
• 38% market share of the luxury
segment (2012)
• 38% 3 year BMW volume CAGR*
21
In depth market planning and analysis
• Inchcape strategic plan and annual operational plan to forecast annual volume target
• Detailed model mix / segmentation analysis
• Price agreement per model with BMW
• Market forecast updated every month
• Daily traffic to track demand and update monthly supply forecast
Performancemanagement
Risk management
Capex & investment
Investing in people
Global ITinfrastructure
Rewarding performance
Market understanding & forecasting
22
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2003 2005 2007 2009 2011 2013E 2015E
UIO TIV
Strong growth in Vehicle Sales driving strong growth in Aftersales
Chile luxury segment Units in Operation(1-3 years) & TIV
• Strong growth in the units in operation (UIO) in recent years and set to continue
• UIO growth drives growth in the high margin aftersales
business
• New site enables Inchcape to benefit from this growth
Source: IHS AutomotiveTIV 2003 – 2009 CAGR +17%TIV 2009 – 2015E CAGR +25%
2003 – 2009 UIO CAGR +19%
Performancemanagement
Risk management
Capex & investment
Investing in people
Global ITinfrastructure
Rewarding performance
Market understanding & forecasting
2009 – 2015E UIO CAGR +19%
23
New BMW Santiago flagship site
• New site consolidates 5
facilities in Santiago into one
• Class leading representation
of the brand product range
• 10 BMW sales executives
increasing to 15
• Doubling of aftersales
capacity
New facility
BMW World Chile
Risk management
World class retailstandards
Investing in people Rewarding performance
24
• LEED Gold certification – one of the most sustainable buildings in the world
• Cutting edge architectural design facilitates customer flow, premium ambience and outstanding product display
• Distinct areas of customer experience segmented by vehicle type, e.g. M Sport and Motorrad
• Highest standards of technical capability
A new standard in design, innovation and sustainability…
…delivering a superior customer experience
Risk management
World class retailstandards
Investing in people Rewarding performance
25
Marketing – luxury market leadership
38%
27%
24%
26%
28%
30%
32%
34%
36%
38%
40%
2009 2012
• As the distributor Inchcape is the national
marketer for BMW in
Chile
• Couple our local market
expertise with support
from BMW to promote the brand USPs
effectively
• Luxury market share
leadership position
BMW market share % of the luxury segment in Chile
Risk management
Marketing & innovation
Investing in people Rewarding performance
26
INCHCAPE STARPLUS MARKETING MODEL
• Campaign created to leverage the completion of the new flagship BMW site in Santiago
• Emphasises BMW brand quality, product range, technology, design and comprehensive customer service offering
Inchcape bespoke marketing processes are a competitive advantage and drive market share
Risk management
Marketing & innovation
Investing in people Rewarding performance
27
Innovation in customer service drives retention
Online booking │Online trackingActive reception │Key reader Tele-service │Mobile service
3 Years Warranty
3 Years Free maintenance
Risk management
Marketing & innovation
Investing in people Rewarding performance
29
What drives the sustainability of our earnings growth?
1. The right markets
• Robust broad based growth across all categories expected
• Inchcape distribution focuses on small and medium size markets
2. The right brands
• Six core premium and luxury OEM partners
• Long standing relationships
3. The right operational discipline
• Strong track record for our partners, with industry leading market• market share and customer service metrics
4. The right financials
• Growth and defensive value drivers coupled with cost/cash discipline
30
Right markets: Strong growth forecast in global car market
Growth opportunities across the value chain
Source: IHS Automotive
Global TIV*
mill
ion
+24%
mill
ion
+20%
* TIV – Total Industry Volume (number of new cars sold) ** Car Parc refers to the number of cars on the road
Growth opportunities in all categories: New, Used, F&I, Service & Parts
Source: LMC Automotive
Global Car Parc**
962 995 1,0331,074
1,116
930
2012 2013 2014 2015 2016 2017
82 86 91 95 99
80
2012 2013 2014 2015 2016 2017
31
Balanced growth in APAC / EM and UK / Europe
Inchcape markets
% Inchcape Revenue H1 2013
% Inchcape Trading profit
H1 2013
Trading profit Margin %
H1 2013
GDP growth CAGR 2012-17
(Source: IMF)
TIV growth CAGR
2012-17(Source: IHS
Automotive)
Car parc growth CAGR 2012-17
(Source: LMC Automotive)
Asia-Pacific & Emerging
Markets21 56% 70% 6.1% +2.8% +5.1% +3.7%
UK & Europe 5 44% 30% 3.3% +0.8% +2.2% +0.8%
32
• All of Inchcape’s distribution & VIR markets are outside of the top 10 global markets
• Inchcape acts as a professional and well financed route to market for its brand partners in small and medium size markets
The right markets
Country ranking (TIV)
Operational process and financial resource advantage versus the local competition
2012, IHS Automotive (Inchcape distribution & VIR markets)
Australia 14 Bulgaria 74Belgium 25 Estonia 75Chile 29 Brunei 79Peru 42 Lithuania 80Finland 45 Latvia 85New Zealand 48 Macau 86Romania 54 Guam 91Greece 60 Macedonia 97Luxembourg 63 Saipan >100Hong Kong 67 Ethiopia >100Singapore 68 Albania >100
33
The right brands
Six core relationships deliver c90% of profit
Premium brands’ pricing power deliver
superior margins
Strong R&D capability to
lead powertrainand segment innovation
Portfolio of the world’s leading premium automotive brands
34
Long standing relationships
Inchcape length of brand relationships
• Inchcape delivers on market share and customer service excellence
• Established relationships with brand partners across multiple continents 0
5
10
15
20
25
30
35
40
45
50
Subaru BMW VW Mercedes JLR Toyota
Years
35
Market understanding & forecasting
Dealer network development
Performancemanagement
Risk management
Supply management& logistics
World class retailstandards
Capex & investment
Investing in people
Marketing & innovation
Customer serviceInchcape Advantage
Global ITinfrastructure
Rewarding performance
The right operational discipline
36
Strong track record for our brand partners
Inchcape (Crown Motors)
• 22 consecutive years of market share leadership in passenger and commercial vehicles
• Crown Motors the world’s first distributor of all the major Toyota Group brands
37
32.035.5
39.1
20.722.9
-
5.010.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
2010 2011 2012 H 1
2012
H 1
2013
5,885 5,826 6,085
3,1093,313
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2010 2011 2012 H1 2012 H1 2013
The right financials
3.8
4.24.3
4.4
4.6
3.6
3.8
4.0
4.2
4.4
4.6
4.8
5.0
2010 2011 2012 H1 2012 H1 2013
Revenue
£b
n
225.5244.4
259.8
137.6153.7
0.0
50.0
100.0
150.0
200.0
250.0
300.0
2010 2011 2012 H1 2012 H1 2013
Operating profit*
£m
Adjusted EPS*
p
Operating margin*
%
Net cash
£m
205.8
243.5
276.2
189.1
100.0
200.0
300.0
2010 2011 2012 H1 2013
All at actual rates
* Pre exceptional items. H1 2012 & 2012 restated for the adoption of IAS 19 (Revised). H1 2013 includes a property disposal profit of £6.2m
Strong profit and cash performance
ROCE
21%22% 22%
15%
17%
19%
21%
23%
25%
2010 2011 2012
38
Performance management discipline
£m
18% cost reduction since 2008 Robust free cash flow
Consistent revenue growth delivered with strong cost and cash controls
613686
(124)
(7)
58
2008 Adj* Inflation Non LFL Cost
Reduction
2012
* 2008 Adj reflects a £25m increase for M&A
-100
-50
0
50
100
150
200
2009 2010 2011 2012
FCF (£m)
39
Balance of growth and defensive value drivers
Growth opportunities across the value chain
Global TIV*
mill
ion
+20%
* TIV – Total Industry Volume (number of new cars sold) ** Car Parc refers to the number of cars on the road
Growth opportunities in all categories: New, Used, F&I, Service & Parts
Source: LMC Automotive
Global Car Parc**
962 995 1,0331,074
1,116
930
2012 2013 2014 2015 2016 2017
Source: IHS Automotive
mill
ion
+24%
82 86 91 95 99
80
2012 2013 2014 2015 2016 2017
40
Growth opportunities across the value chain
Growth value drivers
Source: IHS Automotive
mill
ion
+24%
82 86 91 95 99
80
2012 2013 2014 2015 2016 2017
Global TIV
% of Gross Profit 40%
Global vehicles 80m
NewVehicleSales
F&I
Structural and cyclical growth opportunities
41
Growth opportunities across the value chain
mill
ion
+20%
Source: LMC Automotive
Global Car Parc
962 995 1,0331,074
1,116
930
2012 2013 2014 2015 2016 2017
Defensive value drivers
% of Gross Profit 60%
Global vehicles 930m
Used Vehicles
Sales
Service Parts
Car Parc over 10 times the size of the new car market
42
• 72% of Inchcape’s profits are delivered in small and medium size distribution markets
• Selective investments in high quality retail markets, where OEMs are the distributors
• Strong market share positions and long standing relationships with the leading luxury and premium brands
• Inchcape bespoke processes deliver operational excellence across all categories: New, Used, F&I, Service and Parts
• Proven business model and robust industry growth prospects to support shareholder value creation
Leading luxury and premium operator in the right markets
Delivering sustainable earnings growth with strong cash generation
44
Definitions
Like-for-like
The following are excluded from like-for-like sales:
1. Businesses that are acquired, from the date of acquisition until the 13th month of ownership
2. Businesses that are sold or closed
3. Retail centres that are relocated from the date of opening until the 13th month of trading in the new location
Emerging markets
Emerging markets are those countries in which the Group operates that have yet to reach a mature stage of development and accordingly are in, or are expected to return to, the growth phase of the development cycle.
This currently covers the following countries:
The Balkans The Baltics Poland Russia
China Africa South America
45
Broad geographic spread - truly international
Hong Kong (ML)
United Kingdom (MLP)
35.1% of ’12 Group Revenue
23.3% of ’12 Group Trading
profit
R North Asia
8.5% of '12 Group Revenue
18.9% of '12 Group Trading profit
VIR
South Asia
6.3% of '12 Group Revenue
12.5% of '12 Group Trading
profit
VIR
Australasia
19.2% of '12 Group Revenue
24.0% of '12 Group Trading
profit
D R
Finland
Luxembourg
Europe
10.1% of '12 Group Revenue
6.0% of '12 Group Trading profit
BelgiumD R
Greece (ML)
D R
D R
D R
Brunei (ML) Guam (ML)
Saipan (ML)New Zealand
VIR VIR
VIRDKey:
R = Retail D = Distribution
VIR = Vertically integrated retail
(ML) = A market leader
(MLP) = A market leader, premium brands
Russia and Emerging Markets
20.8% of '12 Group Revenue
15.3% of '12 Group Trading profit
AlbaniaD
BulgariaD R
Macedonia
VIR
Romania
D R
Peru (MLP)
VIR
PolandR
Latvia (ML)
VIRR
Macau (ML)
VIR
Lithuania(ML)
VIRR
Australia Singapore
Russia
R
China
R
Estonia
VIR
R VIR
Chile (MLP) Ethiopia (ML)
VIR
Note: Percentage figures represent revenue from third parties and trading profit (defined as operating profit excluding the impact of exceptional items and central costs)
46
Disclaimer
The information and opinions contained in this presentation are provided as at the date of the document.
Certain statements in this presentation, particularly those regarding the future prospects of Inchcape plc
(“Inchcape”), returns, pricing, acquisitions, divestments, industry growth or other trend projections are or may
be forward-looking statements. These forward-looking statements are not historical facts, nor are they
guarantees of future performance. Such statements are based on current expectations and belief and, by their
nature, are subject to a number of known and unknown risks and uncertainties which may cause the actual
results, prospects and developments of Inchcape to differ materially from those expressed or implied by these forward-looking statements.
Except as required by any applicable law or regulation, Inchcape expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking statements contained in this
presentation to reflect any change in Inchcape’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
All information in the presentation is the property of Inchcape plc and may not be reproduced or recorded
without the written permission of the company. Nothing contained in the presentation constitutes or shall be
deemed to constitute an offer or invitation to invest in or otherwise deal in any shares or other securities of Inchcape plc.
© Inchcape 2013. All rights reserved. Proprietary and confidential information. No unauthorised copying or reproduction. Inchcape and the Inchcape logo are the registered trademarks of the Inchcape Group.
The information contained in this presentation has been obtained from company sources and from sources which Inchcape believes to be reliable but it has not independently verified such information and does not guarantee that it is accurate or complete.