Aston Martin Lagonda Global Holdings plc

Hello and welcome to the Aston Martin Lagonda H1 2023 results Q&A call. At this time all participants are in a listen only mode. After the speaker's introduction there will be a question and answer session. To ask a question during the session you will need to press star 1 1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Lawrence Stroll, Executive Chairman, Aston Martin Lagonda. Please go ahead.

Good morning, and thank you for joining us for this Q&A on our first half results for 2023. I hope you have had the chance to read the release and also listen to the presentation of the results from Amadeo and Doug that are on the IR section of our corporate website. Before we take your questions, I'd like to share my perspective on the progress we have continued to make in our vision to become the world's most desirable ultra-luxury British performance brand and why I am so confident in our future. Since I became executive chairman, we have focused on fixing the core fundamentals of this company and rebuilding the necessary foundations to deliver on our vision. What was required was a major industrial and commercial turnaround, which typically takes five to seven years. I'm very pleased to say that we have completed this turnaround in a little over three. With the heavy lifting largely behind us, we can now look forward to the future with confidence to deliver on our vision and to the potential of Aston Martin that I have always believed in. As we demonstrated at our recent Capital Markets Day, the pace of strategic delivery is accelerating across the company, as we are now positioned to grow brand and shareholder value. Not only are we on track to deliver on the midterm financial targets I set back in 2020, but we also set new and ambitious midterm targets that will see us quadruple our EBITDA from the levels we achieved just last year. 2023 has seen us begin to see the fruits of all the hard work that has been done by the team. In May, we launched the first of our next generation of sports cars, the DB12 Super Tour, which marked the beginning of a completely new lineup of front-engine sports cars. that will reposition us as a true ultra-luxury, high-performance brand, and very importantly, with higher levels of profitability. We have seen a fantastic initial response from customers and the media, highlighting a significant improvement in performance and vehicle dynamics, as well as the transformation of the interior and our new bespoke infotainment system. This has translated into incredible early demand, and we are now sold out for the rest of the year with orders already building into 2024. We will also launch new sports car models over the next several quarters, which will all deliver similar step changes in performance and luxury, as well as improved profitability. High-margin specials are an important part of our strategy. And to celebrate our 110th year anniversary, we recently unveiled a spectacular, ultra-exclusive V12 engine manual transmission special edition model, which is named the Valor. The Valor is celebrating our passion for driving and rich heritage of incredible front-engine sports cars. Inspired by the iconic muscle cars of the past, The Valor combines the very latest technology, methods, and materials with a timeless analog experience. We have seen unprecedented demand, and within two weeks, all 110 models have been sold with a growing waiting list. It is a great source of pride for me to see how the Aston Martin Arafco Cognizant Formula One team has become a front contender this season. consistently challenging for podium finishes at the pinnacle of motorsport. As I have said in the past, a relationship with Formula One is truly transformational. In addition to having a halo effect on the whole brand, it provides us with tremendous access to an entirely new generation of Aston Martin customers all over the world. More than 70% of Vantage F1 Edition owners have never previously bought an Aston Martin, while more than 20% of our customers that we hosted in our Pata Club purchased a new car just last year. This demonstrates the enormous sales potential of this rapidly growing global platform. We are also continuing to invest in our brand and go-to-market strategy. We recently opened Q New York, our first extra luxury flagship in the heart of New York City, which will provide the most sophisticated luxury specification experience available anywhere in the world. We will also see bringing flagship stores like this to selected locations around the world, including London and key cities in Asia, Europe, and North America. At the end of June, we have updated our EV strategy to support the creation of the industry's leading ultra-luxury, high-performance electric vehicles. And our target is to be launching our first BEV in 2025. This included a new strategic supply agreement with Lucid, along with an amendment to our strategic cooperation agreement with Mercedes-Benz, all underpinned by our modular BEV platform, that will be utilized across our future electrified product portfolio, all the way from hypercars to sports cars to SUVs. The agreement will not only allow us to leverage the significant investments Lucid and Mercedes-Benz have made, but through the work of our teams already developing, we will further differentiate what it means to drive an Aston Martin. providing unique and thrilling performance levels. Combined with our intense driving experience, we know that our customers love and expect. Ahead of this, we will start our electrification journey with our first PEV model, the Valhalla, followed by an extended PEV range in our core vehicles. We will bridge the customer's journey from ICE to full BEV through our plug-in hybrid thefts. Briefly turning to our H1 performance, which was ahead of expectations, we continue to see strong demand across the portfolios, with retails outpacing all sales in the first half of the year aligned with our strategy. Our current range of sports cars are sold out ahead of new launches, and we saw heightened retail demand for DBX 707. And finally, we have reaffirmed our outlook for the year and are substantially on track to achieve our 24-25 financial targets in 24, and with continued good momentum, are likely to exceed them in 2025. Over the last three years, we have demonstrated that this business is no longer only about volume growth. It's about increasing value per vehicle, aligned with the characteristics of a true luxury company. This will drive revenues, margins, and cash flow, and ultimately shareholder value. And with that, we are now happy to take your questions.

Thank you. As a reminder, to ask a question, you will need to press star 1 1 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star 1 1 again. Please stand by while we prepare your first question. Your first question comes from Jose Asamendi at JP Morgan. Jose, your line is open. Please go ahead.