Aston Martin Lagonda Global Holdings plc

So good morning everyone and thank you for joining us today for Aston Martin's 24 financial year results presentation. It's a pleasure to be here for my first full year results as CEO of this company. I wanted to start by recognising what has been the most intensive period of product development in Aston Martin's history. There's been a huge amount of investment and work put in by everyone in the company over the past few years. And pleasingly, we can now boast a fully reinvigorated core product portfolio, which is one of the most diverse, dynamic and desirable in our segment in the high luxury performance segment. Hopefully you enjoyed seeing the whole video at the start of the presentation from our Vanquish Media launch event in Sardinia last year, which showcased this flagship V12 in action. It completed our product launches in 2024. And together with this, the multi-award winning models continue to receive acclaim from customers and the media. And perhaps for the first time in our history, we're consistently beating competition in independent and critical comparative road tests. Each product holds a clear positioning and point of difference with each other and is supported by continued product innovation. I believe we have a great foundation to continue driving demand and to enhance the quality of our order book. Looking more broadly at 2024, as an outsider to the business until last September, one of the things that impressed me most was Aston Martin's ability to consistently design and drive demand for world-class, ultra-exclusive specials. In 2024, we delivered three extraordinary such cars. The Valkyrie, which we finished production of in December. It also broke the track record for a production road car at Silverstone last year. And we also launched Valor and Valiant. These models epitomise the innovation and performance at the beating heart of the Aston Martin brand. Continuing with this momentum in specials, whilst enhancing and building on the success of our core range, will provide a further foundation upon which to build for future success as the leader in the ultra-luxury segment. In addition, we made substantial improvements in our customer experience, including the opening of new landmark retail locations with investment from our dealer partners around the world. while we continue to enhance our performance credentials throughout high-profile involvement in Formula One and endurance racing with our partner, The Heart of Racing, recording already a maiden victory with the Vantage in the GT3 Series. Cementing our status as an iconic British brand, we were also proud to receive the King's Award for Innovation in 2024. In addition, we were one of the first companies in the world to be awarded a new Royal Warrant by appointment to His Majesty King Charles III. Whilst these operational achievements should all be celebrated, it's important to also recognise the financing activities completed in 2024, ensuring we ended the year with total liquidity in line with our guidance of over £500 million to support our strategy and delivery of future growth. However, despite the strides that we've made on the product innovation front, 2024 was not without its challenges. And we didn't deliver the financial performance that we originally set out to achieve. We faced external challenges that affected our volumes and financial performance, particularly in Q4. Industry-wide supply chain disruptions and a weaker macroeconomic environment, especially in China, alongside our internal actions to reshape production, resulted in us announcing a circa 1,000 unit reduction to our wholesale volumes last year. Now, Doug will take you through the detailed financial results later. But before that, I want to share how we intend to build on our strong foundations and create a profitable business model that is sustainable for the future. Readying ourselves for a significant year ahead, a year of growth, delivering positive full year adjusted EBIT and free cash generation in the second half of the year. Continuing our transformation from a high potential business to a high performing one that is better equipped for the future. Now, in the months since I joined Aston Martin, I've had the privilege of meeting literally hundreds of colleagues face to face around the business. I've also engaged with more than 150 customers around the world, from China to the US and in between. And I've also held detailed discussions with the majority of our dealers around the world. These interactions have deepened my understanding of our company's position and its strengths and reinforced my belief in its potential. And the good news is that everybody says the same things, albeit in different ways. There's a deep affinity for our brand, a huge excitement for the transformation that we've already achieved with our products. In fact, the power and desirability of the brand, the connection people have with our products, way surpasses my initial expectations. And the feedback is also consistent in what the brand stands for. It's both refined and rare, it's high performance, it's exciting, and it's both elegant and strong. These qualities are core to how we communicate our brand externally and they align with our internal culture. And it's this combination of performance, craftsmanship and exclusivity that sets us apart in the ultra luxury segment. We truly are a unique company. But let's talk about the future and what excellence looks like. Before we consider the key ingredients Aston Martin already has to build from, it's important to reflect what I consider is required to make a great ultra luxury car company successful. It's not complex. First of all, the brand has to be highly attractive to an engaged, loyal and growing customer base. It has to be aspirational and unique. Difficult to replicate with a strong heritage and it has to ignite passion. Second, innovation. Just great design isn't enough. We need to bring technically advanced, high-performing, great design products to marketplace time and time again. And working with the best technical partners in the world to ensure that we deliver the best durability and quality. The third element in production and manufacturing is rigour, discipline, as well as the skills and craftsmanship that's required to distinguish from all competitors. And finally, having the appropriate investment and capital available to deliver these complex programmes, world-class performance, through well-invested facilities, people and capabilities. So encouragingly, as you can probably see, we have much of what's already required. But not all of these aspects are fully exploited. It's here where I believe we must make the biggest improvements from today and beyond, positioning Aston Martin not only as a benchmark top performer in the sector, but as a sustainably profitable company for the future. So, we have a clear vision to be the world's most desirable ultra-luxury British performance brand, creating the most exquisitely addictive performance cars. In recent years, much progress has been made towards achieving this vision. Having reviewed the business in detail, I'm confident that we have the vital ingredients to build a strong future for this company. Much of this is due to the significant investment made in recent years from all of our strategic shareholders led by the U-Tree Consortium. As you can see here, we've already laid strong foundations. Our brand history and ultra-electric positioning are amongst best in class. Our core models are in place and we've successfully launched specials that have consistently proven themselves in the marketplace. We have a talented and passionate team that's ambitious and driven to succeed. Our brand partnerships, especially with Formula One, continue to provide us with performance credibility and mass visibility. We've made substantial investments in facilities and have strengthened our liquidity position following financing activities and with the support of our committed long-term strategic shareholders. These are all the key strengths that will help to unlock Aston Martin's full potential. We're well on our way, but there's a lot to do to accelerate our progress and continue our transformation journey. As we look ahead, I want to introduce the same passion and energy that we have brought into our brand and products across how we operate as a company. We will do this alongside instilling operational excellence and discipline, which is what's needed to deliver sustainable profitability. When we last spoke in October at the quarter three results, following my initial reviews of the business, I'd identified four key areas, and it's here where we'll focus on making the biggest improvements. We're already making progress in certain activities. And as we move through the year, I'd expect further benefits to materialise, particularly in the second half of 2025 onwards. The four priorities were brand awareness and demand generation. We're taking huge steps to target our investment into greater regional, customer and local marketing initiatives and moving away from the big global launch events of the last couple of years. Making up for some of the momentum we lost following delays getting products into the market, we'd expect this targeted approach to stimulate demand and enhance the quality of the order book with particular focus on key markets like the US, which holds huge untapped potential. Extending the order book for our core models out to between six to nine months is what we need to achieve. In addition, we're continuing to elevate our luxury retail strategy and the queue by Aston Martin proposition, alongside working with our dealer partners to upgrade our network and truly deliver the ultra luxury experience our customers deserve. As part of this area of improvement, we've also taken action to appropriately balance our supply to meet our demand in a disciplined and value-orientated way. Where I've mentioned previously pockets of aged stock, mostly in the US and China, that have required our particular focus, progress has now been made. And we will remain strictly focused on this approach, seeking to maximise the value of every vehicle and only build one less than the customer demands. As a result, in 2025, I expect to see the retails consistently outpace wholesales, an indication of underlying demand for our products and a demonstration of our approach to guide production and shape the wholesales in a way that creates a positive pull from the marketplace. This will position us strongly as we enter 2026 and clear up the total pipeline in 2025. The second priority is to optimise our cost base and drive productivity enhancements throughout the production system. We're prioritising action on our cost base across the business and refining our supply chain with multiple sourcing arrangements to reduce risks and enhance cost efficiencies. As part of that ongoing transformation, we must also continuously look at our overheads and cost base, what it takes to deliver our objectives, including delivery of operating leverage. We've already made adjustments to our discretionary cost base to support SG&A in 2024 and the target for 2025 with, for instance, the move to quarter four 24 to a single shift for manufacturing for our colleagues. We've also announced today an organisational adjustment, ensuring the business is appropriately resourced for its future plans. This process will ultimately see the departure of around 170 of our valued colleagues, representing 5% of our global workforce. Linked directly to this difficult but necessary action, we expect annualised adjusted operating expenditure savings of around £25 million, which will be circa 50% realised in 2025 and the full year effect only in 2026. Product innovation will continue to be the heartbeat of our business. But as well as the big first launches, we're now going to innovate throughout the life cycle. It's key that we offer our customers the most relevant, exciting and compelling vehicles in the sector every year on every model. Across our core range and across our specials. So whilst we can benefit operationally from a more stable production environment following the intense period of new vehicle launches, we will ensure updated derivatives and offers are periodically available, aligned with our focus of maximising customer appeal and value for the company. This will keep our models fresh and relevant, maintaining the enviable status they now hold in the sector. A great example of this is the strictly limited DB12 Goldfinger Edition. And already in 2025, we've successfully launched the Vantage Roadster to be followed by the Vanquish Volante later this year. We can offer customers a higher value proposition with minimal changes to the overall bill of materials. And we're not stopping there. We're enhancing our product options too. Having already benchmarked against competitors, we've identified around 100 relevant options that competitors offer that are missing from our proposition. And with minimal investment, we expect to add around 40 new options already by the end of 2025, which contribute to a higher average selling price and, of course, higher satisfaction from our customers. The next topic is delivering excellence in quality and our product launch cycles. Here, we plan to build on the significant learnings from the intense period of new launches over the past couple of years. In particular, ensuring we provide sufficient capacity and time between launches to deliver programs effectively. We need also to deliver the highest standards and consistency across the portfolio. And this disciplined approach I mentioned is a key component to delivering the real benefits in this area. Not just the exceptional standards in quality, but also improvement in cars completing the production process. right first time. And for example, middle of last year, we're at about 60% right first time. And by the end of the year, we're around 90%. A huge benefit to the flow, the process, the cost and efficiencies of the organisation. It's also encouraging to report that for the upcoming launches this year, Vantage Roadster, Vanquish Volante and Valhalla, they're all on track and being delivered to the levels of excellence we would expect to consistently now achieve in the future. But more on Valhalla shortly, given the significance to the business moving forwards. Our bespoke infotainment system has benefited from several software upgrades since its initial launch at DB12 and will continue to invest in improvements to this key customer-facing asset. Again, partnering with the best names in industry to deliver for our customers. These areas of focus will evolve as we continue our business transformation through a formalised programme of work led by our newly appointed Chief Transformation Officer. This will help us to identify and drive further opportunities in cost efficiency and create real value for the business as we progress towards our mid-term financial targets. Through driving towards industry benchmarks for operational and manufacturing processes, we have the goal for Aston Martin to become a sector benchmark and in doing so realise our high performance. As these areas of improvement develop, we will update you in detail and quantify the expected outputs. Now I spoke a moment ago about Valhalla. It's a key milestone for 2025. It's an eagerly awaited launch and our first mid-engined plug-in electric hybrid vehicle. It's a game-changing model for Aston Martin, bringing hypercar performance at a supercar price. We expect it to be a significant contributor to our financial performance over the next few years. Valhalla marks our entry into a new segment of the market. as well as a step forward in our commitment to hybrid and electric technologies. Deliveries will commence in the second half of 25, and we're already working with customers on their detailed specifications. We plan to produce 999 cars over a two and a half year period, with more than the first full year of production already fully sold out. This vehicle represents not just a new product, but an evolution in our performance and innovation capabilities. With direct involvement from Aston Martin Performance Technologies, the consulting arm of the Formula One team. Whilst there is always risk of delay heading towards the initial production of a complex new vehicle, we're determined to honour our current timelines and demonstrate that we can deliver excellence in our product launch cycle, a key area of improvement as I've described prior. And finally, what I've outlined today is how we create a sustainably profitable business for the future. I really want to be the first CEO at Aston Martin to deliver continued sustainable growth and success. As I mentioned, we have many of the ingredients already on the table. Our focus now will be on managing our cost base and enhancing productivity, continuing with a disciplined approach and rebalancing supply and demand, delivering sustainable growth that's profitable and scalable, maximising the value in every vehicle and driving the options and derivatives strategy, transitioning from a high potential to a high performing business, consistently generating adjusted EBIT positive and free cash flow as we progress towards our mid-term financial targets. I'm under no illusions that this task will be challenging. We face potential tariffs, supply chain disruptions, as well as continued uncertainties in China, which, although small in terms of contribution, may still provide opportunity in the long term. We're monitoring these factors closely and are prepared to adapt to changes. Internally, we will stay focused on executing our plans and making disciplined decisions in terms of volume and production cadence, and we will benefit from a more stable production environment now to deliver optimised launches and cost management. We're laser-focused on Valhalla and on our ongoing transformation to set us on the right course to hit our mid-term financial targets. So looking ahead to 2025, this will be a year of materially improved financial performance. It's also a year of setting ourselves up to be in a stronger position as we enter 2026. Profitable growth is the key this year as we extend our order book. That will get us on the right path for future years and enable us to drive a smoother production cadence that we desire. For Q1 2025, the company expects volumes broadly to be in line with the prior year period, although the mix will negatively be impacted by fewer special deliveries. Thereafter, our performance is expected to progress throughout the year, with a significantly stronger second half compared with Q1 2025. where we'll be benefiting from the contribution of Valhalla and the incremental launches from Volante Vanquish and Roadster Vantage early in the year. And all of this will manifest in quarter four. So whilst the shape of the year and how we deliver it may be somewhat different to expectations, the outcome remains the same. We will deliver positive adjusted EBIT in the financial year 2025 and we will generate free cash flow in the second half of this year, driven by that strong quarter four. Now I'd like to hand you over to Doug, who will take you through the 2024 financial results in detail and provide further insights into our performance and outlook for the year ahead. We'll then be available and delighted to answer your questions. Thank you.

Thank you, Adrian, and good morning all. To complete today's full-year results presentation, I'll take you through our financial performance for 2024 before spending some time on our 2025 guidance and medium-term outlook, which aligns to the plans Adrian just outlined. 2024 was a year marked by a number of product launches and, as we guided, overall performance reflected the significant delivery of wholesale volumes in the second half of the year as we continued the transition to our new core model range. However, like many of our peers, we unfortunately experienced both supply chain disruptions and continued macroeconomic weakness in China, which disrupted our ability to meet our initial targets for the year. These factors impacted us at a time when we were preparing to significantly ramp up production into the fourth quarter. As a result, we took decisive action to revise our guidance in September, reducing our volume expectation by around 1,000 units, particularly impacting Q4. Despite this, we still delivered meaningful sequential growth in financial performance in the second half of 2024 compared to the first half of the year, which I will discuss further shortly. Starting at the top of the slide, our full-year 2024 total wholesales decreased by 9% to 6,030 units, impacted by the points I've just outlined. Despite the late revision to our full-year outlook, Q4 volumes increased by 8% year-on-year and included, for the first time, deliveries from the entire new product range, including the flagship V12 Vanquish. Revenue decreased by 3% year-on-year to £1.58 billion, which reflects the lower volumes and FX headwinds experienced as GBP strengthened. These were partially offset by growth in ASP, driven by core pricing from new models, strong specials performance and a pleasing increase in options revenue. Adjusted EBITDA of £271 million decreased by 11% in line with our revised guidance, reflecting the lower core volumes during the period of transition to our new models and the industry challenges experienced in the second half. We partially offset this impact through a 6% reduction in adjusted operating expenses, excluding depreciation and amortisation, and higher specials volumes. I'll come back to these financial metrics in more detail shortly. As we look at the shape of our performance in 2023 and 2024, you can see in the top left corner of the slide the weighting of wholesale volumes to the second half of each year, which has been driven by various factors and in line with our guidance. This, in turn, has driven the significant financial improvement in both the second half periods. As Adrian has already mentioned, while we expect to deliver materially improved full-year financial performance in 2025 across all measures, the shape of the performance won't be dissimilar to that of 2023 and 2024. I'll provide more colour on this when we reach the outlook slide. As we turn to our 2024 full year performance in more detail, the split of our whole sales is shown on the left hand side of the slide. Sport and GT volumes represented 65% of the mix and volume increased 11% year on year, reflecting a full year of DB12 whole sales supported by NuVantage and Vanquish whole sales in the second half. As expected, SUV volumes at around 31% of the mix decreased 36% compared to 2023. This reduction reflected the ramp down in production and wholesales of the outgoing DBX models in the first half of the year, ahead of commencing deliveries of the new, upgraded DBX 707 in the second half. SUV volumes in the second half of the year at 1,380 were broadly in line with the prior year period. As I've already mentioned, we benefited from a strong specials contribution in 2024. This comprised of Aston Martin Valkyries, Valors and the commencement of Valiant deliveries in Q4 2024. Our specials programme demonstrates the company's unique ability to operate at the very highest levels of the luxury automotive segment, attracting both new customers and collectors to the brand, and will continue to be an important part of our future strategy. On the right-hand side of the slide, our annual average selling prices. Total ASP in 2024 was at a record level of £245,000, increasing by 6% versus 2023. This reflected the strong demand for personalisation across our new model range and demand for our specials. Core ASP was $177,000 for the year, a decrease of 6%. This was significantly impacted by FX headwinds, partially offset by the positive contribution from our new model range and increased options revenue. In addition, the 2023 comparative mix included benefits from the contribution of higher-priced exclusive derivatives for outgoing core models, which included the V12 Vantage and the DBS 770 Ultimate. We've made strong progress to address the growing demand for unique personalised products in the ultra-luxury market, which drove a continued positive trend in core options revenue, up 310 basis points in 2024 to 18%. This aligns with the approach outlined by Adrian of seeking to maximise the value of every vehicle we sell, and we will continue to expand our options list as we move forward. Moving on to geographical split on the next slide. In line with our overall performance, wholesale volumes declined across all regions in 2024 compared with 2023, reflecting the impact of our portfolio transition and the revision to volumes announced in September. Volumes remained well balanced across all regions, reflecting our global footprint and demand. This is supported by ongoing regional marketing activities, investments by our dealer partners and our relationship with the Aston Martin Formula One team, benefiting from the ever-increasing profile of the sport. As Adrian has discussed in relation to the brand awareness and demand generation, moving forward we will focus more of our investment on regional and local marketing efforts following a series of global product launch events in 2023 and 2024 as we transitioned to our all-new core portfolio. The Americas and EMEA, excluding the UK, continue to be our largest regions in 2024, collectively representing over 60% of overall wholesales. The trend of the past couple of years in China continued, largely due to the ongoing macroeconomic weakness impacting demand, with volumes decreasing by 49% compared with 2023, in line with the trend reported by others in the sector. Whilst China now reflects a very small percentage of our total wholesales, it remains a long-term growth opportunity, and we continue to monitor the situation to assess the timing of potential mid-term upside. 2024 wholesales in APAC excluding China were up 2%, reflecting increased demand, which aligns to our strategic dealer expansions in the region, such as the reopening of Aston Martin Seoul and the new Aston Martin Suwon dealer in South Korea. Moving to gross margin. Whilst this was a source of underperformance this year, it remains a key building block of our future growth ambitions and financial targets. We continue to target over 40% gross margin from our existing, new and future models. 2024 gross margin decreased by 220 basis points to 36.9% as a result of lower core wholesales as we transition to the new model range, as well as higher manufacturing and logistics costs largely associated with the expected volume ramp-up in production in the second half of 2024 and FX headwinds. As outlined at our Q3 results and given the changes to our production volume, some costs were ultimately absorbed by fewer vehicles in Q4 2024 than originally planned, causing inefficiency in our operations. These impacts offset the benefits I've already outlined from our next generation models, strong volumes of high margin specials and increased options revenue across the portfolio. When we look at 2025 on the outlook slide, I'll discuss our expectations for gross margin improvements, which is supported by disciplined wholesale volume growth of our new models and a focus on operational excellence including smoother production profiles. Adjusted EBITDA was in line with our revised guidance at £271 million, decreasing 11% compared to the prior period, which, as a reminder, included £11 million related to the upward revaluation of our investment in Aston Martin Racing. This resulted in a 160 basis point decrease in margin to 17.1%, predominantly as a result of the decline in gross margin being partially offset by the 6% decrease in adjusted operating expenses, excluding DNA. With DNA decreasing by 8% due to the timing of new model launches, our adjusted operating loss remained broadly flat year over year. As shown on the right-hand side of the slide, net adjusted financing costs increased to £173 million from £92 million, primarily due to the £75 million year-on-year impact of non-cash US dollar debt revaluations. Finally, 2024 adjusting items included gains on financial instruments recognised through the income statement, which were more than offset by the redemption premiums associated with our refinancing of our senior secured notes, in addition to ERP implementation costs related to the ongoing deployment of the new system, which includes rollout at our Gaden headquarters in Q2 this year. Now, moving on to free cash flow. We remain determined to address this key metric head-on and are committed to demonstrate that our strategy can deliver sustainably positive free cash flow. Our expectation of achieving this in the second half of 2024 was delayed due to the volume reduction in Q4. However, we continued to deliver a quarterly sequential improvement throughout the year with a materially improved second half performance. And in Q4 2024, we delivered modest positive free cash flow of £2 million. This was supported by the higher volumes in Q4 and also the benefits of a working capital inflow in the quarter. Starting with the loss before tax of £289 million and adding back DNA and other items, including cash tax paid and net refinancing costs, resulted in £242 million of cash generated after tax. Working capital was a £118 million outflow compared with an £86 million outflow in 2023. This was primarily driven by the unwinding of deposits with the balance held decreasing by £178 million as we delivered our specials throughout the year. As recent specials programmes conclude, we expect to see this trend normalise in 2025 ahead of Valhalla deliveries commencing in the second half of the year. Payables decreased by £34 million due to the earlier timing of payments in 2024 compared to 2023, and inventories increased by £13 million as preparations for our Q4 production ramp-up were impacted by our revision to volumes. This was partially offset by a decrease in receivables of £107 million following strong cash collections in Q4. Capital expenditure in 2024 totalled £401 million, broadly in line with 2023, albeit ahead of our guidance, predominantly as a result of accelerated spend related to preparations for the eagerly awaited launch of Varhala in 2025. After CapEx and net interest payments of £115 million, our free cash outflow in 2024 was £392 million. We expect this to materially improve in 2025, as I will discuss when we come to our outlook slide. Turning to cash and debt, we ended the year with £360 million of cash and total liquidity of £514 million, in line with guidance and reflecting the financing activities in 2024. These included the senior secured notes on improved terms during our planned refinancing and an increase in our senior revolving credit facility agreement, in addition to two private debt placings and an equity placing in November. With the financing activities increasing gross debt and a marginally lower cash balance, net debt increased to 1.16 billion, which, coupled with the adjusted EBITDA performance, resulted in an adjusted net leverage ratio of 4.3 times. Through disciplined strategic delivery and profitable growth in the future, we expect a deleverage in line with our medium-term target, which I'll discuss as we finish with our guidance and outlook. Finally, looking ahead to 2025. As Adrian and I have both mentioned, we expect to make significant improvements across all key financial performance metrics, as you can see on the slide. In particular, with a focus on delivering positive adjusted EBIT for the full year, a key metric we are now guiding on both for 2025 and our mid-term targets, and achieving positive free cash flow in the second half of 2025. As I mentioned earlier, we're not alone in having experienced challenges which have impacted our performance in 2024. We remain alert to industry-wide risk factors that present an element of uncertainty that could impact our plans. These include, but aren't limited to, changes in customs duties, supply chain disruptions and wider macroeconomic and political instability. We also recognise that the Valhalla programme is well advanced with firm launch plans, but as with any major car launch, risks exist in the run-up to the start of production that could impact the timing of initial deliveries. We are focused on executing well. Our plan for 2025 is driven by the benefits of our all-new core range, in addition to initial customer deliveries of Valhalla in the second half of the year, with the majority of those 2025 deliveries occurring in Q4. As indicated, when we looked at the shape of 23 and 24 on slide 14, due to the expected phasing of core wholesales building throughout 2025 and Valhalla volumes in the second half of the year, we do expect this year's volumes to exhibit a similar shape. Directly linked to this volume phasing, financial performance, including free cash flow, is expected to sequentially improve quarter on quarter throughout the year. For Q1 2025, as Adrian has mentioned, the company expects volumes to be broadly in line with the prior year period, although mix will be negatively impacted by fewer specials deliveries. Thereafter, our performance is expected to progress, with a significantly stronger H2 2025 compared with the first half, primarily driven once again by Q4. This profile of delivery should positively position the company as it enters 2026. The full details of our 2025 guidance are included on the slide and in the results announcement. Finally, and just to reiterate that we remain focused on creating a sustainably profitable business by turning potential into performance. As we have taken you through today, our planned growth, combined with the four key areas of improvement outlined, disciplined operational execution and continued business transformation, all support our progress towards our mid-term financial targets, which remain unchanged, with the inclusion of adjusted EBIT as a metric as we move forward.

Okay, so first of all, thank you, Doug, and for everybody for joining.