McLaren FY2018 Results · 2019-04-25 · Choice Exotic Sports Car of ... technologies and marketing...

McLaren FY2018 Results

▪April 25, 2019

Highlights

2 2 | McLaren FY2018 Results

3 | McLaren FY2018 Results

◼ FY2018 was a record year for production with 4,863 vehicles delivered in comparison

to 3,329 delivered in FY2017, growth of 46% on the prior year

◼ Vehicle wholesales totalled 4,829 (3,340 in FY2017), Automotive global sales

volumes up 45% and revenue up 76% year on year

◼ Strong order book through out 2018 with continuation of positive order growth

into 2019. Ultimate Series remains sold out. Super Series sold out into Q3 2019

with strong Sports Series 600LT and 600LT Spider orders for delivery into H2

2019; total order book 1,856 units

◼ McLaren Automotive have produced more than 18,000 cars since production

commenced in 2011

◼ FY2018 Group revenues £1,257m (FY2017 £871m) driven by Automotive volumes an

increase of 44%, 2018 Adjusted* EBITDA £143m

FY2018

Automotive Racing Applied Technologies

Revenue by division Car volumes by region

Formula 111%

Automotive84%

Applied Technologies5% North

America36%

APAC, ex. China18%

China7%

Rest of World

6%

Europe33%

*Adjusted EBITDA excludes exceptional costs for restructuring


◼ 259 McLaren Senna now delivered to customers. The first McLaren 600LT coupes delivered to customers during the year. McLaren

‘Speedtail’ first production-bodied prototype commences road testing

◼ McLaren finishes sixth in the Formula 1 World Constructors’ Championship, a forward step from the ninth place in 2017. The 2019

driver line up of Carlos Sainz and Lando Norris confirmed and new sponsor partnerships announced

◼ Applied Technologies continues to grow its core strengths across Automotive, Motorsport, Public Transport and Health segments

◼ McLaren Holdings Limited finalised the Corporate Simplification of its subsidiaries in January 2019 formalising the organisational

restructuring of the group first announced in 2017

FY2018


Business Update


Automotive


McLaren Automotive – New models revealed


▪ McLaren Speedtail revealed

▪ Limited edition of 106 to be

delivered from 2020

▪ McLaren Senna GTR

▪ Announced and fully allocated

▪ Delivery in 2019

▪ McLaren 720S Spider revealed

▪ Commencing production in 2019

McLaren Automotive – 2018 production highlights


▪ McLaren Senna commenced

production

▪ 259 delivered in 2018

▪ All 500 sold out in advance

▪ McLaren 600LT in production

▪ H1 2019 sold out strong order book

into H2 2019

McLaren Special Operations - MSO


▪ Strong revenue growth of 201% versus 2017

▪ 2018 Order book value has trebled

▪ Growth across all aspects of MSO▪ Defined options▪ Bespoke features▪ MSO Limited Collections▪ Heritage▪ Aftermarket

▪ MSO content on Senna orders exceeded plan and reflected enhanced customer engagement. Senna metrics included producing more than 12,000 different images of Senna livery designs for customers

▪ Strong demand of MSO content on 600LT pre-orders

▪ Strong demand for Limited Editions including regional / dealer commissions, e.g. Racing Through The Ages collection for McLaren Beverley Hills

Exceptional Press Reviews


▪ McLaren Automotive has been

recognised globally with 23

International awards in 2018

▪ The 600LT won EVO’s Car of the

Year. Following the win of the 720S

in 2017

▪ McLaren Automotive was named

Britain’s Most Admired Car

Company. An achievement that

was reached in less than eight

years in production

2018 Award Highlights

McLaren SennaEVO – Hyper Car of the YearTop Gear – Wing of the YearAutocar – Five Stars

720SRoad & Track – Performance Car of the Year

600LTEVO – Super Car of the YearEVO – Car of the Year

2018 awards & achievements

GQ Magazine ‘Technological Hedonism’ award – McLaren

570S Spider

MotorTrend World’s Greatest Drag Race 8 Winner – McLaren

720S

Automobile All Star –McLaren 720S

Automotive Video Association Performance Car of the Year 2018 – McLaren

720S

Road & Track Performance Car of the Year 2018 –

McLaren 720S

Robb Report Best of Best – McLaren

720S

Autoguide.com Readers Choice Exotic Sports Car of the Year – McLaren 720S

2018 Sao Paulo Motor Show – Best Car of the Show Award - McLaren

Senna

Top Gear Magazine Wing of the Year – McLaren Senna

Evo Car of the Year –McLaren 600LT

The Best 10 China Performance Car of the Year 2019 – McLaren

600LT

Motorsport FR Sports Car of the Year – McLaren

720S

Sport Auto FR 5 Star Car – McLaren

720S

Festival Automobile International de Paris Most

Beautiful Supercar – McLaren 720S

Auto Bild Readers’ Choice Award –McLaren Senna

Auto Bild Klassik -McLaren Senna

Autocar 5 Star Car - McLaren Senna

Autocar Britain’s Best Drivers’ Car – McLaren

600LT

China Performance Car of the Year 2018 –

McLaren 720S


MCTC opened and operational


▪ In November, The Duke and Duchess of Cambridge and the Crown Prince of Bahrain opened the £50m McLaren Composites Technology Centre (“MCTC”) in Sheffield

▪ The MCTC will help the company further innovate and produce lightweight carbon fibre ‘tubs’ that will enable it to deliver the lightest in class products

▪ The MCTC currently employs around 60 people which will rise to over 200 when full production commences in 2020

▪ Carbon fibre has long been part of McLaren’s DNA, the company having first introduced the material into Formula 1 in the early 1980s

AUTOMOTIVE - TRACK25

Independent

and strong memberof the McLaren Group

£1.2 billion

invested in research and development by 2025

100%

Electrification by end of the business plan period

18

New cars or derivatives by 2024

Sports and supercars to be produced annually from 2024

6000

On a fast track to an exciting and successful future

Battery developmentThe McLaren of EVs

A successor to the McLaren P1™


Global Volume Growth: FY2018


North America – 42% China – 141%

Europe – 43%

APAC – 57%

RoW – (7%)

▪ Demand continues with a 45% increase in year on year volumes coupled with continued sales growth across the major regions of North America, Europe and APAC including China

▪ Strong China volume growth year on year with all series now on sale in 2018 versus 2017 when 570S and 720S only available for part of the year

▪ North America and Europe performing strongly against prior year

▪ RoW declined due to a weaker middle east region, however, volume remains good at 285

1,234

1,748 1,115

1,599

306 285

147

354

538

843

Racing


2018 in focus


Identifying and improving the fundamentals

▪ McLaren improved to 6th place in 2018 from 9th in 2017 in the constructors championship, increasingprizemoney for 2019 and instigating clear plans to return to improved competitiveness in future years

▪ The Renault partnership completes its first year

▪ The 2019 MCL-34 car development and build successfully completed following an earlier commencementin the year in line with new regulations

▪ Driver line up for 2019 of Carlos Sainz, Lando Norris and Sergio Sette Camara joining the team in therole of Test and Development Driver

▪ New key F1 management positions complete including Andreas Seidl and James Key both joining in2019

▪ Increased levels of sponsorship signed in 2018

▪ McLaren Racing announces its return to the Indianapolis 500 in 2019 with Fernando Alonso, as heattempts to become only the second driver in history to achieve the Triple Crown of world motorsport:winning the Formula 1 Monaco Grand Prix; the 24 Hours of Le Mans; and the Indy 500

The sporting environment


F1 Sporting Environment

▪ Formula One Management (FOM) have recently revealed to the teams a revised incomedistribution model for Prize Money, a proposed cost cap for Formula 1 starting in 2021and achieving a target cost base in 2023 as well as revised governance plans. McLaren’sBoard of Directors have discussed these proposals with FOM management and areworking towards a target agreement date during 2019

▪ The FIA and financial staff from the teams have drawn up draft financial regulations tosupport these commercial aims with strict governance, transparency and reportingrequirements

▪ The subject of what intellectual property and parts can be shared between teamscontinues to be the subject of much debate as the sport evaluates the impact ofcustomer teams and the business model implications for all

▪ McLaren supports control of costs and strategic growth plans for Formula 1 andrecognises the fundamental challenges of the existing business model of the sport. Weare also actively involved and see great value potential in embracing the digitaltechnologies and marketing platforms including e-sports

▪ Teams continue to work constructively with the commercial rightsholder FOM and the Technical Regulator FIA towards making thesport a more sustainable long term proposition

Applied Technologies


Digital Technologies at the intersection of technology and human ingenuity


McLaren Deloitte Collaboration

Motorsport AutomotiveAutomotive Public Transport Health

FY2018 Revenue (£m)

▪ 3rd Generation Standard ECU for F1 manufactured and delivered to teams for start of 2019 season

▪ 2nd Generation Formula E batteries shipped to all teams and performed as planned in first race of season 5 in December 2018

▪ Development of F1 data visualisation tool ‘Atlas 10’

▪ LNER passenger reservation system installed, now live

▪ New Virgin Trains West Coast WIFI programmeunderway and being deployed on trains

▪ Singapore proof of concept opportunities on condition based maintenance in development

▪ Wearable digital orthopeadic device development continues to progress

▪ Health analytics platform showing strong interest

▪ Young racing driver accelerator programme designed and marketed with good new driver uptake

▪ Autonomous vehicle partnership development programme ongoing

▪ Sales prospect focus on our Vehicle Dynamic Simulator

▪ Developing SupplyCycle, an advanced modelling, optimisation & simulation tool for manufacturing

▪ Development and marketing of Aviation Performance Optimiser, an advanced modelling, optimisation & simulation tool for airspace management, in conjunction with National Air Traffic Control (NATS)

▪ Concepting of Airports Operations Performance Predictor, an optimisation tool for airport ground movements

59 65

2017 2018

Financials


▪ FY2018

Results


Automotive wholesale volumes Revenue (£m) Adjusted EBITDA (£m)

▪ First year all three series on sale with a strong volume performance in the Super and Ultimate Series

▪ Order books for Super Series and Sports Series remain strong with dealer allocations continuing to reflect customer demand

▪ Ultimate Series remains sold out. Sports Series orders transition into 600LT as expected. Super Series orders on 720S Spider strong and sold out into Q3 2019

▪ 45% increase in wholesales volumes in FY 2018 compared to FY 2017 reflected in Revenue

▪ Favorable sales mix in 2018 with 87% volume growth in Super Series and 259 Ultimate Series vehicle sales compared to nil in 2017

▪ Revenue in Racing impacted by reduced partnership income and reduced prize money reflecting Constructors championship position in prior year

▪ Significant Automotive improvement in Adjusted EBITDA between 2017 and 2018, covered on following slide

▪ Racing EBITDA reduction in line with revenue decrease

▪ Improved Applied Technologies positive movement year on year

871

1,257

FY2017 FY2018

3,340

4,829

FY2017 FY2018

65

143

FY2017 FY2018

FY2017 – FY2018 EBITDA Bridge


▪ Significant improvement in Automotive as production rates were consistently achieved resulting in a sales volumes increase of 45%, with 2017 impacted by the implementation of SAP, McLaren 720S launch and 570S Spider launch

▪ Favourable sales mix included a shift from Sports to Super Series, and 259 Ultimate Series, compared to nil in 2017

▪ Racing EBITDA declines in line with reduced sponsorship and partnership income

Net Debt & Liquidity


FY2018

Gross debt1 562

Cash and cash equivalents (97)

Underlying net debt1 465

Net Leverage / Adjusted EBITDA2 3.25x

Undrawn committed liquidity and overdraft lines3 78

Total available liquidity 175

▪ Gross debt reflects $250m and £370m 5-yr Senior Secured Notes issuance in July 2017

▪ First £100m tranche of new Equity received in H1 2018, second tranche of £50m received in November

▪ £90m RCF, £78m available

▪ Cash utilisation due to investment in new models (Senna, 600LT and Speedtail) and the development of the Formula 1 car for 2019 season

▪ Positive cash inflow in Q4 2018 as EBITDA delivered and new equity received

Senior Secured Notes (SSNs) outstanding of £550m plus £12m accrued interest. The SSNs includes £16m capitalised fees and revaluation FX loss £2m

2 Net Leverage includes reported gross debt £562m plus overdraft £1m less cash of £98m and Adjusted EBITDA of £143m excluding exceptional items of £7m 3 Consists of RCF £90m less committed drawn Ancillary Lines (bank guarantees)

Appendix


Group Overview


Summary Income Statement

1 Includes FX gains and losses apart from FX on translation of USD bond2 Includes FX on translation of USD bond


Group Cash Flow Statement


EBITDA by company


*Racing includes the sale of heritage cars, £10.0m (FY2018) and £27.5m (FY2017)

Reconciliation of McLaren Group and McLaren Holdings


One Outstanding Luxury Automotive & Technology Group


Sales and car volume split

◼ Global leader in high-performance luxury and technology offering the

ultimate ownership experience

◼ 55 year history of innovation and technical excellence

◼ Group revenue and cash generation underpinned by Automotive order

book and production capacity now demonstrated

◼ Latest McLaren “Speedtail” continues to demonstrate the success of

McLaren product pipeline + strength in brand

Highlights


◼ Offering the ultimate ownership experience

creating the iconic sportscar

◼ 18,000+ road cars hand-assembled to date

◼ Legendary racing history

◼ 20 Formula 1 World Championships

◼ Delivering advantage at the intersection of physical

and digital

◼ Customers in Motorsport, Automotive, Public

Transport and Health

Revenue by division Car volumes by region

North America

36%

APAC, ex. China

18%

China7%

Rest of World

6%

Europe33%

Formula 111%

Automotive84%

Applied Technologies

5%

McLaren has a long history rooted in Racing & Innovation


Success in racing created a culture of outstanding performance, excellence and innovation

McLaren has a long history in Racing & innovation


Success in racing created a culture of outstanding performance, excellence & innovation

▪

▪

▪

▪

Globally recognized brand


World-class car platform built on a foundation of racing success

Successful racing performance led to a culture of innovation & excellence, enabling success in cars

The only company to win each of the 4 classic competitions: Formula One, Le Mans, Indianapolis and Can-Am

Every model won multiple prestigious awards for unique technology and design

2012 2013 2015 2016 2016 2017

Ranked #1 in car reviews of 2012Jalopnik

Dewar Trophy for Outstanding British Technical AchievementRoyal Automobile Club

China Performance Car of the YearEVO Middle East Car of the Year:

Supercar of the Year 675LT Coupé

BestPerformance Car

Auto Express New Cars Awards

Five Star AwardAUTOCAR & EVO

& Evo2012 2013 2014 2016 2015 2017

James May’s Car of the YearBBC Top Gear Magazine

Jeremy Clarkson’s Car of the YearBBC Top Gear Magazine

Supercar of the YearAUTOCAR ASEAN

Car of the YearCAR Magazine (675LT Spider)

Best Car on Sale – Best Every Day SupercarBBC Top Gear

Performance Car of the YearBBC Top Gear & Road and Track

2012 2013 2014 2016 2016 2017

Best Sports Car Over £120,000What Car?

Hypercar of the YearBBC Top Gear Magazine

Performance Car of the YearAuto Express

Hardcore Car of the Year:Top Gear (675LT Spider

Best Car on SaleAUTOCAR

Super Car of the YearOctane & EVO

2012 2013 2014 2016 2017

Car of the YearMiddle East Motor Awards

Hypercar ofthe Year

GQ

Middle East Carof the Year Awards

Best Supercar

Best of the BestRed Dot Design Award

Sport Car of the YearCAR Magazine

12C P1 650S 675LT 570S 720S

Launched year: 2011 Launched year: 2013 Launched year: 2014 Launched year: 2015 Launched year: 2015 Launched year: 2017

Automotive operates in four distinct segments34 | McLaren FY2018 Results

SuperSports MotorsportUltimate

▪ Super Series is the core of

McLaren's range with the best

technology available

▪ Derivatives include Coupe,

Spider and LT limited editions

▪ Brings McLaren’s advanced

technologies to the sportscar

arena, with a lower price point

than other McLaren series

▪ Derivatives include Coupe,

Spider, GT and LT limited

editions

▪ Track cars built for racing

▪ Based on road car models but

without road car regulations

and built to a racing

specification

▪ High performance cars

▪ Built on the same basis as the

Super series with additional

ground-breaking technology

▪ Further track-only products

offers

▪ 650S, 650S Spider, 720S, 720S

Spider

▪ 540C, 570S, 570S Spider,

570GT, 600LT

▪ 650S GT3, 570S GT4 and 570S

Sprint, 720S GT3

▪ P1, P1 GTR, McLaren Senna,

McLaren Senna GTR, Speedtail

▪ High performance super cars

with track performance

▪ One-piece MonoCage II carbon

body

▪ Best power-to-weight ratio of

sports car range in their class

▪ Lightweight construction with

carbon chassis (75kg)

▪ Strictly limited editions for

racing only

▪ Includes the first hybrid hyper

car in the world

▪ Strictly limited production, sold

out years in advance

Description

Models

Features

Purpose

Price range

▪ Road / track▪ Road / GT ▪ Track▪ Road / track

▪ £200-300k▪ £125-200k ▪ £200-400k▪ >£500k

✓ Bespoke customisation options✓ Limited editions and one-off models

✓ Pure McLaren track experience✓ Pure GT racing series✓ Lifestyle and heritage

✓ Expert advice and support✓ Unique service cover

MSO1 Experiences Ownership

1 McLaren Special Operations

McLaren FY2018 Results · 2019-04-25 · Choice Exotic Sports Car of ... technologies and marketing...

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