TIDMINCH
RNS Number : 3194R
Inchcape PLC
26 October 2023
26 October 2023
Inchcape plc, the leading global automotive distributor,
announces its Q3 trading update
covering the period from 1 July to 30 September 2023
Q3 2023 trading update: continued growth and strategic
progress
-- Q3 trading - continued growth, supported by our resilient and diversified
business:
o Revenue of GBP2.8bn, with 35% reported growth and 10% organic
revenue growth (1) .
o Another strong performance in Distribution, with 13% organic
revenue growth (1) .
o Continued momentum in APAC, with broad-based growth across our
markets .
o Strong performance in Europe supported by continued order bank
unwind, while new consumer demand remains muted.
o Growth in the majority of markets, market share gains and accelerated
cost synergies in the Americas, offsetting softer markets in
Chile and Colombia.
-- Strategic objectives - further progress:
o Five new distribution contracts signed with Changan in the Philippines
and across East Africa, with continued development of future
contract pipeline.
o Acquisitions completed in Indonesia, the Philippines and New
Zealand (2) .
o Inchcape's digital and data capabilities continue to support
optimisation of the core business and development of Vehicle
Lifecycle Services initiatives.
-- Derco - integration on track:
o Accelerated cost and cost-related annualised synergies in FY
2023 of up to GBP20 million, on track for at least GBP40 million
by the end of FY 2024.
o Continue to expect operating margins to be towards top-end of
5% - 7% range, pre-synergies, in FY 2023.
o Excellent progress in improving Derco's working capital position,
with excess inventory reduced by 50%.
-- Outlook - FY 2023 guidance reiterated:
o Based on prevailing market conditions, and considering accelerated
cost synergies and the contribution from acquisitions, expectations
for the Group's results for FY 2023 remain unchanged, as outlined
at Inchcape's H1 2023 results on 27 July 2023(3) .
Duncan Tait, Group CEO, commented :
"Inchcape produced another strong performance in the third
quarter. We delivered continued momentum across APAC, supported by
acquisitions, while our business in Europe and Africa performed
well. In the Americas, we are gaining share in key markets and the
integration of Derco remains on track.
"Driven by the highly cash generative and capital-light
characteristics of our business, Inchcape will continue to be a key
consolidator in a highly fragmented market. As a result of our
market leadership positions, diversified business and digital and
data capabilities to support our OEM partners, we remain confident
about the medium to long term outlook for the Group."
Q3 2023 revenue Reported Constant FX Organic(1)
YoY%
================= ========= ============ =============
Q3 Q3 Q3 YTD
Group +35% +37% +10% +12%
Distribution +47% +52% +13% +16%
Retail +2% +1% +1% +3%
----------------- --------- ------------ ------ -----
1: Organic growth is defined as sales growth in operations that
have been open for at least a year at constant foreign exchange
rates.
2: These acquisitions, which are expected to contribute a
combined annualised revenue of around GBP400m, are Mercedes-Benz's
distribution operations in Indonesia, CATS, a leading distributor
of luxury vehicles in the Philippines and Great Lake Motor
Distributors, which distributes SAIC's Maxus brand in New
Zealand.
3: Previous guidance, as disclosed at Inchcape's H1 2023 results
on 27 July 2023, was that FY 2023 results were expected to be
towards the top end of the range of published market consensus, as
at 12 May 2023. At that time, the range of 2023 Adjusted PBT
analysts' consensus was between GBP470m and GBP506m.
Q3 2023 trading overview
The following commentary covers the period from 1 July to 30
September 2023. Unless otherwise stated, all figures are quoted on
an organic basis.
During the quarter, Group revenue increased 35% on a reported
basis, reflecting both the benefit of acquisitions, and strong
organic growth of +10%.
In Distribution, revenue increased 47% on a reported basis, with
organic growth of 13%:
-- The Group delivered a resilient performance in the Americas, with
growth in the majority of markets, market share gains and accelerated
cost synergies offsetting softer markets in Chile and Colombia;
-- There was continued momentum across APAC, with broad-based growth
across our markets, including in Hong Kong and Singapore. There
was on-going momentum in Australia where market share continues
to improve. The region is further supported by the completion of
three acquisitions during the quarter;
-- The Europe and Africa region was driven by a stronger Europe, supported
by continued order bank unwind. New consumer demand remains muted
across the region.
In Retail, reported revenue increased 2%, with organic growth of
1%, supported by volume growth in new vehicles from a stronger
fleet market offsetting muted consumer demand. Excluding the impact
of the agency model in the UK, Retail organic growth was 12%.
Market abuse regulation statement
This announcement contains inside information.
Conference call today
A conference call for analysts and investors will be held today,
Thursday 26 October, at 08:30 (UK time).
Dial-in details : +44 (0)330 551 0200
Password (if prompted): Quote 'Inchcape Q3 Results' when
prompted by the operator.
Webcast details : To register for the webcast of the event
please follow this link . A replay of the call will be available
via the Company's website, www.inchcape.com later today.
Financial calendar
2023 Full year results 5(th) March 2024
Contacts
Inchcape plc (Investor
queries):
Rob Gurner +44 (0)7825 189 i nvestors@inchcape.com
088
Krishma Arora
Brunswick Group (Media
queries):
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.
By combining our in-market expertise with our unique technology
and advanced data analytics, we create innovative customer
experiences that deliver outstanding performance for our partners -
building stronger automotive brands and creating sustainable
growth.
Our distribution platform connects the products of mobility
companies with customers, and our responsibilities span product
planning and pricing, import and logistics, brand and marketing to
operating digital sales, managing physical sales and aftermarket
service channels.
Delivering for our partners, our customers and our people - so
they can realise their ambitions in the new world of mobility.
The Group is headquartered in London and employs over 21,000
people globally.
www.inchcape.com
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October 26, 2023 02:00 ET (06:00 GMT)
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