André Lacroix Group Chief Executive - Inchcape

inchcape.com
  • No tags were found...

André Lacroix Group Chief Executive - Inchcape

Logistics for the day12:30 Inchcape overview and strategy update13:00 Regional presentations with Q&AHong Kong and ChinaSingapore14:30 Break15:00 Regional presentations with Q&AAustraliaThe Balkans, Africa and South AmericaRussia and the Baltics17:00 Concluding address17:30 Drinks reception


InchcapeGlobal industry leader operating in the premiumautomotive sector with strong returns.Strengthened industry leading position during thedownturn and robust recovery in 2010.Business geared to deliver significant operationalleverage as we grow the top line.Uniquely positioned to benefit from premiumisationof fast-growing economies.Scale relationships with OEMs and a strongbalance sheet will enable Inchcape to takeadvantage of consolidation opportunities.


Powering aheadworldwideInchcape Overview


Proven business modelSix years of growth to 2008, with strong returnsPeak operating cash flow during the downturnReported robust 2010 earnings growth due to solid revenue progression andstrong operational leverageBroad geographic spreadwith scale operationsEfficient route to market forour Brand Partners:Distribution and RetailPortfolio of leadingpremium brandsDiversified revenue streamsfrom growth and defensivevalue driversDecentralised and empowered organisation, responsive to market changes


Broad geographic spread26 marketsFast growing economiesand advanced marketsScale positionsLeader in 14 marketsSignificant competitorbarriers to entryScale presence across fast growing and advanced economies


Inchcape provides a professional and well financed route to market forthe world's leading automotive brandsAutomotive industry value chainManufacturer Distributor RetailerCustomerOEMsInchcape2010 Distribution RetailSales: 42% 58%Trading Profit: 69% 31%Distribution:Master-franchise partneroperating as exclusive nationalsales and marketing companyVertically Integrated:National Distributor and exclusiveRetailer in city statesRetail:Scale operations on a regionalbasisDistribution and Retail partner to the world's leading automotive brands,managing a substantial part of the value chain in 26 markets


Diversity of revenue streamsVehicle Sales- New and UsedFinance & InsuranceProductsGrowthValue Drivers50% of gross profitAftersales ServicePartsDefensiveValue Drivers50% of gross profitValue driver focus delivering strong margins


Decentralised and Empowered OrganisationIn-depth market knowledge with Inchcape Advantage intelligenceSwift response to changing market conditionsGlobal alignment on processes, controls, performance measures and governanceBest practice sharingGlobal scale - Local agility


Powering aheadworldwideStrategy update


Inchcape Vision & StrategyTo be the world’s most customer centricautomotive retail groupSTRENGTHENSuperior customer valueproposition throughInchcape AdvantageEXPANDConsolidation in highmargin / high growthareas


Organic growth management through strong operationaldiscipline on Five Top PrioritiesDifferentiated strategyGrowingmarketshareGrowingaftersalesCommercial initiativesto grow revenues ahead of competitorsImprovingmarginControllingworkingcapitalSelectivecapitalexpenditureCash initiativesto grow profit and operatingcash faster than revenueBalanced focus on commercial and cash initiatives to return to peak earnings and beyond


Customer insight is critical to driving revenue ahead of competitorsInchcape Advantage portal to manage customerfunnel in all operations12,000 interviews every monthPerception of ‘Value for money’ is changing:Car market becoming increasingly polarised between brands competing purelyon price and those offering ‘added value’ to the customerInchcape strongly differentiated with ‘added value’through unique Inchcape Advantage programme:Customer 1st strategy and metrics now in place for 5 years Superior valueproposition through proprietary Inchcape Advantage processesSuperior customer value


Cash initiatives to grow profit and cash faster thanrevenueFocus on quality of revenues to leverage the pricing power of our premium brandswith margin accretive initiatives and tight controls on pricing / discount activityImproving marginTight gross margin management with upsell / mix management on each value driver(new cars, used cars, parts, aftersales service) and rigorous benchmarking andsupply chain managementIncreased overhead effectiveness with productivity improvements; improved returnson marketing investments and continued controls on costsControlling workingcapitalProven processes in place to manage supply chain effectively with no more than 1.5months stock cover worldwideDaily focus on stock performance, particularly over three months oldSelective capitalexpenditureCapex investment in existing sites limited to brand and safety requirementsPerformance management based on daily, weekly and monthly operational and financial metrics


millionsStrong growth forecast in global car marketGlobal car sales forecast to grow 33% between 2010 and 201563.966.269.566.063.7+33%72.276.482.487.792.496.02005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Performance management based on daily, weekly and monthly operational and financial metricsSource: Global Insight/Inchcape estimates


Inchcape is uniquely positioned to take advantage of exciting marketgrowth opportunitiesStrongestplayers will leadindustryconsolidationBroad basedglobal recoveryCar Parcgrowth in boththe fast growingand advancedmarketsTechnology willcreate value andacceleratereplacement inadvancedmarketsStructural growthled by wealthcreation inAPAC/EmergingMarketsInchcape strengths play to key global trends to return to peak earnings and beyond


Inchcape is uniquely positioned to take advantage of exciting marketgrowth opportunitiesStrongestplayers will leadindustryconsolidationBroad basedglobal recoveryCar Parcgrowth in boththe fast growingand advancedmarketsTechnology willcreate value andacceleratereplacement inadvancedmarketsStructural growthled by wealthcreation inAPAC/EmergingMarketsInchcape strengths play to key global trends to return to peak earnings and beyond


Broad geographic spread positions Inchcape tobenefit from global recoveryCore market sales volumes (m)Broadbasedglobalrecovery3.02.5UK1.201.00W. Europe*3.503.00Russia0.600.50E. Europe*2.01.50.800.602.502.001.500.400.301.00.401.000.200.50.200.500.100.02007 2009 2011 2013 20150.002007 2009 2011 2013 20150.002007 2009 2011 2013 20150.002007 2009 2011 2013 20151.41.2Australia0.120.10Singapore0.050.04Hong Kong0.600.50South America*1.00.80.60.40.20.080.060.040.020.030.020.010.400.300.200.100.02007 2009 2011 2013 20150.002007 2009 2011 2013 20150.002007 2009 2011 2013 20150.002007 2009 2011 2013 2015Source: Global Insight/Inchcape Estimates*Inchcape MarketsAsia-Pacific and Emerging Markets leading global recovery


Inchcape is uniquely positioned to take advantage of exciting marketgrowth opportunitiesStrongestplayers will leadindustryconsolidationBroad basedglobal recoveryCar Parcgrowth in boththe fast growingand advancedmarketsTechnology willcreate value andacceleratereplacement inadvancedmarketsStructural growthled by wealthcreation inAPAC/EmergingMarketsInchcape strengths play to key global trends to return to peak earnings and beyond


Majority of global growth in population and GDP willcome from Asia-Pacific and Emerging MarketsGDP 2010:Growth 2010-15:Pop 2010:Growth 2010-15:North America$16,232bn+ $3,761bn334m+ 17mGDP 2010:Growth 2010-15:Pop 2010:Growth 2010-15:Western Europe$15,995bn+ $3,508bn410m+ 6mEastern Europe & RussiaGDP 2010:$3,977bnGrowth 2010-15: + $2,626bnPop 2010:Growth 2010-15:442m+ 2mStructural growthled by wealthcreation inAPAC/EmergingMarketsGDP 2010:Growth 2010-15:Asia & Oceania$18,199bn+ $8,639bnPop 2010: 3,766mGrowth 2010-15:+ 194mSouth & Central AmericaGDP 2010:$4,829bnGrowth 2010-15: + $2,145bnPop 2010:565mGrowth 2010-15:+ 32mAfricaGDP 2010:Growth 2010-15:$1,745bn+ $711bnPop 2010: 1,020mGrowth 2010-15: + 94mMiddle EastGDP 2010:Growth 2010-15:Pop 2010:Growth 2010-15:$1,910bn+ $1,809bn241m+ 29mAsia-Pacific and Emerging Markets will represent 94% of population growth 2010-15 and 68% of GDPgrowthSource: IMF


…this pattern is reflected in car industry growthStructural growthled by wealthcreation inAPAC/EmergingNorth AmericaTIV 2010 13.2mGrowth 2010-15: +5.5mWestern EuropeTIV 2010 14.4mGrowth 2010-15: +1.6mEastern Europe & RussiaTIV 2010 3.9mGrowth 2010-15: +2.2mMarketsAsia & OceaniaTIV 2010 30.1mGrowth 2010-15: +11.4mSouth & Central AmericaTIV 2010 5.8mGrowth 2010-15: +1.9mAfricaTIV 2010 0.8mGrowth 2010-15: +0.5mMiddle EastTIV 2010 2.8mGrowth 2010-15: +0.5mAsia-Pacific and Emerging Markets will represent 63% of global car sales by 2015 and 70% of carindustry growth by 2010 - 15Source: Global Insight/Inchcape estimates


Inchcape well positioned to benefit from increasingcar penetration and premiumisation in these marketsStructural growthled by wealthcreation inAPAC/EmergingMarketsThe new rich will be the driver of growth inAsia-Pacific and Emerging Markets21 of Inchcape’s 26 markets are in APACand the Emerging Markets+700mpeople from the EmergingMarkets will join the middleclasses in the next decade*Inchcape has scale, managementexpertise and a track record of growth inthese economies65% of Inchcape earnings are in the fast growing APAC/EM regions* Source: The Economist


Inchcape is uniquely positioned to take advantage of exciting marketgrowth opportunitiesStrongestplayers will leadindustryconsolidationBroad basedglobal recoveryCar Parcgrowth in boththe fast growingand advancedmarketsTechnology willcreate value andacceleratereplacement inadvancedmarketsStructural growthled by wealthcreation inAPAC/EmergingMarketsInchcape strengths play to key global trends to return to peak earnings and beyond


Replacement cycle will favour technology thatreduces cost of ownershipAgeing car parc – UK*Average age (years)8.0UKOil price increaseOil Price $/bbl120100Technology willcreate valueand acceleratereplacement inadvancedmarkets807.0604020JP MorganGoldman Sachs1998 2000 2002 2004 2006 2008 2010 2012 201402009 2010 2011 2012Oil price volatility and increased taxation on CO 2 emissions will raise importance of the totalcost of vehicle ownership* Source: ICDP, GE Capital


* 2011 MkVI VW Golf BlueMotion 1.6TDi vs 2005 Mk IV VW Golf BlueMotion 1.9TDi** 2011 BMW 320d Efficient Dynamics (E90) vs 2005 BMW 320d (E90)Increasing demand for green technologyNew technologies offerlower running costs andreduced CO 2 emissionsTechnology willcreate valueand acceleratereplacement inadvancedmarketsInchcape is well positionedwith brand partners who are at theforefront of green technology developmentsMPG ImprovementVs 2005 modelCO 2 reductionVs 2005 modelVW Golf*Bluemotion39%31%BMW 320d**Efficient Dynamics63%39%E-TERRAINEfficiency DriveInchcape brand partners leading their competitors


Inchcape is uniquely positioned to take advantage of exciting marketgrowth opportunitiesStrongestplayers will leadindustryconsolidationBroad basedglobal recoveryCar Parcgrowth in boththe fast growingand advancedmarketsTechnology willcreate value andacceleratereplacement inadvancedmarketsStructural growthled by wealthcreation inAPAC/EmergingMarketsInchcape strengths play to key global trends to return to peak earnings and beyond


millionCar parc growth will fuel revenue growth in the highlyprofitable areas of Used cars and AftersalesGlobal Car Parc 2007-2015 to grow +25%+25%820842 8548809069339619891,0252007 2008 2009 2010 2011 2012 2013 2014 2015Source : JD PowerGrowth opportunities across the value chain


Inchcape is uniquely positioned to take advantage of exciting marketgrowth opportunitiesStrongestplayers will leadindustryconsolidationBroad basedglobal recoveryCar Parcgrowth in boththe fast growingand advancedmarketsTechnology willcreate value andacceleratereplacement inadvancedmarketsStructural growthled by wealthcreation inAPAC/EmergingMarketsInchcape strengths play to key global trends to return to peak earnings and beyond


Largernumber ofrelationships tomanageDeep,scalerelationshipsBrand PartnersInchcape is uniquely positioned in a highly fragmented market3530Competitive landscape25201510500 1 2 3 4 5 6ContinentsLimited geographicGreater geographiccoveragecoverageDeep, scale, quality relationships across five continentsSource : Inchcape analysis


Our expansion investments will be focused in APAC/EM as thesemarkets offer high growth / high margin opportunitiesTo be the world’s most customer centricautomotive retail groupSTRENGTHENSuperior customer valueproposition through InchcapeAdvantageEXPANDConsolidation in high margin /high growth areasAsia Pacific and EmergingMarkets


Opportunities in high margin premium sector and fastgrowing APAC / Emerging MarketsOEMs will need to improve both their market coverage and quality of retail operations tocompete effectivelyNetwork expansion will be necessary to meet the increasing demand for premium brands in Asia-Pacific and Emerging MarketsRequirement for strong operators with proven track record in growing market share, providingexcellent customer service and with strong balance sheetInchcape is well positioned to gain access to consolidation opportunities in Asia Pacific andEmerging MarketsLong standing partnerships with the strongest OEMs across five continentsProven track record of effective brand stewardship and customer service excellenceDisciplined process to integrate acquisitions and establish synergiesOEMs favour partners with strong balance sheetsInchcape has excellent relationships, track record and strong financial position


Global footprint uniquely positions Inchcape for future growthInchcape in 21 fastest-growing economies moving forwardInchcapemarkets% InchcapeRevenue 2006-10% InchcapeTrading profit2006-10GDP growthCAGR2010-15(Source: IMF)TIV growthCAGR2010-15(Source: Global Insight)Car parc growthCAGR 2010-15(Source: Global Insight)Asia-Pacific &Emerging Markets21 42% 65% +10.6% +5.9% +3.4%UK & Europe 5 58% 35% +5.5% +2.6% +1.2%Inchcape MarketsUniquely positioned for growth in high margin premium sector and fast growing APAC /Emerging Markets


Markets covered today…two-thirds of Inchcape 2010profitRegion Market 2010 Trading Profit %North AsiaSouth AsiaAustralasiaRussia & Emerging MarketsEuropeHong KongMacauGuamSaipanSingaporeBrunei£34.0m 14%£36.1m 15%AustraliaNew Zealand £62.5m 25%RussiaBalkansBalticsChinaAfricaSouth AmericaPolandBelgiumGreeceFinlandLuxemburg£31.8m 13%£27.8m 11%UK UK £55.9m 22%Total £248.1m 100%

More magazines by this user
Similar magazines