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DARING TO ADAPT
2015 Half-Year Results – 31 August 2015
SUMMARY
• Very good H1 2015 results:
• Sales: EUR 3.2 billion, +8.6%
• Current consolidated result before tax, group’s share: EUR 140.0 million, +61.5%
• D’Ieteren Auto: sales up 5.4% and current operating result up 43.5%. Stronguplift in new vehicle sales, positive contribution of most of the other activities,positive price/mix effect and cost savings. Slightly lower market share vs H12014 due to Volkswagen and Škoda. Restructuring of the D’Ieteren Car Centersand of the independent dealers’ network is ongoing.
• Belron: sales up 11.9% and current operating result up 48.1%. Harsh winterconditions and market share gains in the US. Positive product mix effect (morereplacements vs repairs) and significant currency impact (strong US dollar andBritish pound). In Europe, impact of lower sales more than offset by cost controlactions and the impact of restructuring actions. Decision to exit China. Challengingtransformation of operating model in the UK.
22015 HY Results – 31 August 2015
SALES: UP 8.6% TO 3.2 BILLION €
32015 HY Results – 31 August 2015
+11.9%
+5.4%
+8.6%
Belron
D’Ieteren Auto
3,230.3
H1 2015
2,973.7
1,508.9
1,464.81,639.6
1,590.7
H1 2014
External sales (€m)
CURRENT CONSOLIDATED RESULT BEFORE TAX, GROUP’S SHARE, UP 61.5% TO 140.0 MILLION €
42015 HY Results – 31 August 2015
Current consolidated PBT, group’s share (€m)
22.4
H1 2015
140.0
86.7
+61.5%
H1 2014 D’Ieteren Auto & Corporate
30.9
Belron
• Current consolidated result before tax, group’s share, better than anticipatedthanks to a favourable currency effect at Belron and higher than expectedresults at D’Ieteren Auto
UPWARD REVISION OF FY 2015 OUTLOOK
“Whereas the group had previously communicated that itexpected an increase in current consolidated result before tax,group’s share of more than 10% in 2015 compared to 2014, itnow anticipates a 20-25% increase based on current exchangerates. The upward revision mainly reflects the favourable currencyeffect and higher-than-expected results at D’Ieteren Auto in H12015.”
Extract from HY 2015 results press release published on 31 August 2015
2015 HY Results – 31 August 2015 5
AUTOMOBILE DISTRIBUTION31 August 2015
ROUGHLY FLAT BELGIAN CAR MARKET MARKET SHARE SLIGHTLY DOWN BOTH ON FY & H1 2014
• Excluding deregistrations, Belgian car market slightly down yoy (-0.65%)
• Market share excluding deregistrations at 22.02% vs 22.27% in H1 2014 (22.67% in FY 2014), mostly due to declines at Volkswagen and Škoda
72015 HY Results – 31 August 2015
New car registrations (000s units)
13,627
274,197
287,824
272,406
288,42416,018
H1 2014
+0.21%
H1 2015
Deregistrations Net registrations
-0.65%
D’Ieteren Auto’s market share (%)
18
19
20
21
22
23
24
H1
2010
22.27
19.34
H1
2014
H1
2013
H1
2009
23.16
22.12
H1
2008
H1
2015
H1
2012
20.1319.76
H1
2007
19.97
H1
2006
21.13
21.89
H1
2011
19.43
22.02
21.35
22.39
21.15
Net market share (excluding deregistrations)
Market share (%)
BRAND PERFORMANCE
• Despite a declining market share, VWremains the market leader, supportednotably by the Passat and the GolfSportsvan
• Despite a declining premium segment,Audi was up on FY14 thanks to the Q3,A4 & A6
• Seat was up thanks to the Leon and theIbiza
• New highs for Porsche on the back of thesuccess of the Macan and the hybridCayenne
82015 HY Results – 31 August 2015
22.02
9.95
Porsche
H1 2015
1.47
6.53
0.66
3.39
1.350.44
3.60
Audi
Seat
Škoda
Volkswagen
22.27
H1 2014
6.62
10.25
Breakdown of D’Ieteren Auto’s market share per brand (%)
The combined market share of Bentley and Lamborghini totals 0.01% both in H1 2014 and H1 2015.
SUMMARY OF H1 2015 RESULTS
2015 HY Results – 31 August 2015 9
€m H1 2014 H1 2015 % change
New vehicles delivered (in units) 63,286 63,553 +0.4
External sales 1,508.9 1,590.7 +5.4
Current operating result 38.6 55.4 +43.5
Current operating margin (in %) 2.6 3.5 -
Current net finance costs -4.3 0.2 n.s.
Current result before tax 36.5 58.7 +60.8
Current result before tax, group’s share 37.2 59.6 +60.2of which joint ventures and associates 3.0 3.9 +30.0
Group’s share in the net result for the period 35.2 52.4 +48.9
Unusual items and re-measurements, before tax -2.5 -5.4 -
OUTLOOK FOR FY 2015
• Excluding registrations of less than 30 days, the Belgian new carmarket is expected to remain stable at around 450,000registrations
• Objective of a stable annual market share
• Main new product launches in H2 2015:
Volkswagen: Touran & Sharan Audi: A4
Škoda: Superb Combi
• In H2 D’Ieteren Auto expects delivery delays of the VW Passat, aless favourable product mix effect and costs related to the launch ofthe new Audi A4
2015 HY Results – 31 August 2015 10
VEHICLE GLASS REPAIR & REPLACEMENT31 August 2015
EUROPE NOW REPRESENTS LESS THAN HALF OF SALES (51% IN H1 2014) DUE TO GROWTH IN THE US
2015 HY Results – 31 August 2015 12
Europe -3.4%FranceUKGermany NetherlandsItalyBelgiumSpainNorwayPortugal Hungary
Geographical revenue breakdown1 Total revenue evolution2
1 At actual FX.2 At constant FX including acquisitions and calendar effect.
SwedenIrelandGreeceSwitzerlandDenmarkAustriaTurkeyRussiaLuxembourg
Rest of the world +7.3%USA Canada Australia
BrazilNew ZealandChina Europe Rest of the World
45%55%
FOCUS ON RESTRUCTURING ACTIONS
• UK: challenging transformation of the operational model led to a deterioration ofemployee engagement and customer service, and a negative impact on sales andprofit
• UK: the fixed assets of ADR, the branch-based business of Autorestore specialized inaccident damage repairs, were written off (EUR 1.3 million). Note that ADR was soldend-August: a further charge of circa EUR 3 million is expected in H2.
• Italy & the Netherlands: restructuring in line with the plan and delivering benefits butstill a tough market environment and price pressure. In Germany, the closure of theheavy commercial vehicles operation has delivered the expected profit benefits.
• Brazil: reduction of headcount, closure of 24 out of 68 branches and additionalefficiency actions have allowed operating losses to decrease significantly yoy.
• Turkey: half (7) of corporate branches have been closed; focus on major populationcentres; downsizing of central support functions; focus on more profitable wholesaleoperations.
• China: decision to close the Chinese operations (one-off costs of approx. EUR 4 millionare expected in H2). Impact on sales and result will be negligible.
2015 HY Results – 31 August 2015 13
SIGNIFICANT ACQUISITIONS
• Netherlands: on 3 June Belron acquired Autotaalglas. The deal comprisesthe acquisition of the franchisor, of 1 owned branch and of a franchisenetwork of 54 branches.
• Germany: on 9 July, Belron announced the acquisition of Junited Autoglas, aGerman franchise network comprising 232 branches. The deal will beeffective when approved by the German competition regulator.
2015 HY Results – 31 August 2015 14
Autotaalglas and Junited Autoglas will keep their brand, identity and operating model. The businesses will be run separately:
customers will be able to choose between two value propositions, Carglass and Autotaalglas/Junited Autoglas
SUMMARY OF H1 2015 RESULTS
2015 HY Results – 31 August 2015 15
€m H1 2014 H1 2015 % change
Total jobs (in million units) 5.7 5.6 -1.9
External sales 1,464.8 1,639.6 +11.9
Current operating result 69.9 103.5 +48.1
Current operating margin (in %) 4.8 6.3 -
Current net finance costs -17.7 -18.7 +5.6
Current result before tax 52.2 84.8 +62.5
Current result before tax, group’s share 49.5 80.4 +62.4
Group’s share in the net result for the period 30.7 31.3 +2.0
Unusual items and re-measurements, before tax -7.4 -30.9 -
ELTIP* charge, before tax -1.6 -1.8 +12.5
* Executive Long-Term Incentive Plan
OUTLOOK
H2 2015
• Organic sales growth in the US & further declines in Europe
• Higher incentive costs compared to H2 2014(expected ∆ of approx. EUR -6 million)
• Impact of cost savings less pronounced than in H1 2015 (many efficiency actions already underway in H2 2014)
• Results in H2 2014 benefitted from short term cost reduction actions which will not be repeated
2016• Further market declines expected in Europe
• Tough weather-related comparables in the US
• Cost inflation (sourcing of glass) due to weak EUR
2015 HY Results – 31 August 2015 16
FORWARD-LOOKING STATEMENTS
“To the extent that any statements made in this presentation contain information that is nothistorical, these statements are essentially forward-looking. The achievement of forward-looking statements contained in this presentation is subject to risks and uncertainties becauseof a number of factors, including general economic factors, interest rate and foreigncurrency exchange rate fluctuations; changing market conditions, product competition, thenature of product development, impact of acquisitions and divestitures, restructurings,products withdrawals; regulatory approval processes and other unusual items. Consequently,actual results may differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements can be identified by the use of words suchas "expects", "plans", "will", "believes", "may", "could", "estimates", "intends", "targets","objectives", "potential", and other words of similar meaning. Should known or unknownrisks or uncertainties materialize, or should our assumptions prove inaccurate, actual resultscould vary materially from those anticipated. The Company undertakes no obligation topublicly update any forward-looking statements.”
2015 HY Results – 31 August 2015 17
CONTACT INFORMATION
Financial Communication & Investor Relations – D’Ieteren Group
Pascale [email protected]+32 2 536 54 39
Thierry [email protected]+32 2 536 55 65
www.dieteren.com
2015 HY Results – 31 August 2015 18
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