Aston Martin Lagonda Global Holdings plc

Good morning everyone. Thank you for joining us for Aston Martin Lagonda's Q1 2023 results call. I hope you've had a chance to read the results that we released this morning. The release along with the accompanying slides are on the IR section of our website as usual. Before I take your questions, I'll make a few introductory comments about our first quarter results, which are in line with expectations and the guidance we gave at our four-year results, a call back in March. Consistent with my comments then, we continue to expect the profile of 2023 to be shaped by the timing of new product launches in both core and specials, with a significant acceleration in our financial performance in the second half. As you will have seen in this morning's results release, we remain on track to commence deliveries of the first of the next generation sports cars in Q3. Production engagement started in early Q2, and we look forward to sharing more on this later in May. Coming back to Q1 in some more detail. Aligned with our strategy, retails outpaced wholesales as we continue to see strong demand across the portfolio. The current range of sports cars are essentially sold out for the year with DBX orders now to the end of Q3. Wholesales increased by 9% year on year to 1,269, primarily driven by strong DBX deliveries. Overall DBX volumes increased by 59%, led by the DBX 707, which represented more than 70% of DBX volumes in the quarter. As expected, GT sports volumes were lower due to the ongoing transition of sports car sales ahead of the imminent launch of our first next-generation sports car. Revenue of £296 million increased by 27% year-on-year, benefiting from favourable mix towards the DBX 707 and V12 Vantage, higher volumes and strong pricing dynamics in the core portfolio. This was reflected in our core ASP of £180,000 in the quarter, an increase of 19% compared to Q1 2022. In addition, we delivered 18 Valkyries in Q1, up from 14 in Q1 2022, which drove total ASP to £213,000, an increase of 18% year-over-year. Gross margin of 34.4% increased by 300 basis points sequentially, but was lower year-on-year. This was primarily due to higher manufacturing and logistics costs, as well as mixed effects within specials, which more than offset higher year-over-year core gross margin growth. Adjusted EBITDA of £30 million increased by 24% year over year, primarily driven by higher revenue and gross profit, partially offset by higher operating expenses, including reinvestments into branded marketing activities, as well as inflationary impacts on our general costs. Adjusted EBITDA of 10% was consistent with the prior year period. The adjusted operating loss of £48 million reflects DNA increasing year on year, as guided, driven by higher Aston Martin Valkyrie deliveries and the continuing accelerated amortization and capitalized development costs ahead of next generation of sports cars starting this year. Free cash outflow of £118 million was also aligned with our outlook and included £86 million of capital expenditure in the period. Working capital was an outflow in Q1, largely driven by higher inventory levels of ordered vehicles at the end of the quarter as well as initiatives to improve production and supply chain resilience ahead of upcoming vehicle launches. Finally, we finished the quarter with a cash position of £408 million, which included a £50 million repayment of our revolving credit facility during the quarter. In terms of our outlook for the year, our guidance remains unchanged, and alongside Amadeo and the team, I'm focused on ensuring we execute our plans, which should provide us with strong momentum as we head into 2024. With that, I'd be happy to take your questions.

Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To restore your question, please press star 1 and 1 again. Please stand by while we compile the Q&A roster. We will now take the first question. It comes from the line of Jose Azumendi from JP Morgan. Please go ahead. Your line is open.

Very thanks, Jose and JP Morgan. Just two questions, please. First one, could you comment with regards to the pricing momentum and the additional opportunity you have to continue to improve pricing on a quarterly basis and into 2024? And how does this relate to the product launches? And second, could you comment, please, on CapEx for 2023 how, you know, where do you stand on the CAPEX guidance and the confidence to hit the CAPEX target as well as the sequential decline in 2024? Thank you.