Aston Martin Lagonda Global Holdings plc

Good morning or good afternoon all and welcome to the Aston Martin Lagonda Q3 2025 results. My name is Adam and I'll be your operator today. If you'd like to ask a question during the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad to enter the queue. And I will now hand the floor to Adrian Hallmark to begin. So Adrian, please go ahead when you're ready.

Good morning and thank you, Adam. So first of all, a warm welcome to everybody and thank you for joining the call for the Aston Martin Q3 2025 results. Before we take questions on the line, Doug and I would like to provide a summary of our operational financial outlook during the last quarter, sorry, review for the last quarter and outlook for the rest of the year. Recognize that we already updated the market earlier this month. Much of what we will share today, you'll be already aware of. But it is important that we focus now on what we're doing and building forwards to highlight some of the actions that we've already taken in response to the challenges that we face. Let's start with operations, the heart of our business, and that's essentially our cars. As we said at the beginning of this year, we remain focused on refreshing our core models available to customers. Aston has a long-standing tradition of using the S suffix for the high-performance derivatives of core models, and we've continued that tradition this year by adding the Vantage S, DBXS, and most recently, the DB12S. We now also have the Volante or Roadster models available for all of our sports cars, and we recently celebrated the 60th anniversary of the iconic Volante name with the release of a limited edition, Q by Aston Martin, DB12, and Vanquish models. There will be much more to come in 2026, and each of these small product events are providing an opportunity for communications, product relaunch, and customer engagement on a global basis. Valhalla has been a monumental and groundbreaking product for Aston Martin. It's our first mid-engine PHEV in serious production and it's set to transform the business. I'm delighted to confirm that this week we commenced initial deliveries of Valhalla to Europe. We've achieved homologation there and the first cars have been shipped and will be ready to be delivered to customers in the coming days and weeks. But that's just the start. We will continue that process through the end of this year, and we expect to deliver about 150 cars before we close out 2025. In parallel to this, there is an extensive customer driving program where some 600 customers, existing and new, are testing the vehicle around the world. This week, the team are in Miami, and the feedback has already been incredible. I can only concur with the positivity feedback that we've had, having driven the car myself, both on public roads around Warwickshire, but also at pace on the limit at Gaydon. The car is truly phenomenal. And that's the feedback we get from all participants in these events. As you're probably aware, already more than 50% of these cars are already deposited and sold for the full lifetime of the vehicle. And that means that any new orders that we generate over the coming days, weeks and months will be delivered successively towards the end of 2026. This level of direct customer engagement is the platform that we'll use going forward for the rest of the core range. We've seen fantastic response, actually, from these Valhalla supercar buyers when testing the advantage on the same tracks before they go to the high-performance car. We've actually sold core models as a result of them being tested before the main reason for those visits. Clear example. The getting behind of the wheel of the Aston makes a truly unique threading experience and surprises the unconverted. However, as we flagged earlier this month, our performance this year from a financial and operational point of view has been challenged by some significant macroeconomic headwinds. Sustained impact of the US tariffs and continued weak demand in China, compounded by a change in luxury taxation in the second and third quarter of this year. This trend has also been noted by other premium and luxury automotive peers, but obviously we have to respond in our way to our specific situation. So we've taken decisive, proactive steps to strengthen our position. First of all, we've passed through a second 3% price increase in the US from the 1st of October to offset more of the impact that we've been absorbing due to the tariff increases announced earlier this year. As we said at the heart of the results, we provided support to dealers in China in order to accelerate sales, clear stocks and get us ready for a strong 26. Unfortunately, this new luxury tax slowed that process down, but we redoubled our efforts and we're making strong strides to ensure that we recover the situation by the end of 25 as originally planned. What we're also doing is taking a long, hard look at their OPEX and CAPEX plans, both for 25 and in subsequent years. With that in mind, work is underway to review our future cycle plan with the dual aim of optimizing capital investment while continuing to secure the innovative products that meet customer demands in our plan and, of course, meet regulatory requirements. We will not mortgage the future. We will merely reprioritize, retime, and refocus that capex to make it more efficient going forward. We'll be giving more details on that as we get to the four-year results, but you can expect that the five-year capex envelope, instead of the previously indicated 2 billion range, will be more in the 1.6 to 1.7 billion range, a significant shift, but without damaging our future prospects. We'll continue to build on our current strengths of exquisitely designed high-performance cars, GTs and SUVs, together with V8 and V12 engines. This is at the heart of Aston Martin's strategy, and we need to embrace this and ensure that we have a business fit for today and the future. With that overview, I'd now like to hand over to Doug, who will take you through the key financials before we take questions from the invited guests. Thank you. Doug?

Thanks, Adrian. Morning, everybody. So overall our Q3 performance reflects the position that we announced earlier in the month and really predicated on the low and expected wholesale volumes. So our Q3 wholesale volumes of 1,430 were down 13% compared to the prior year period and below our previous guidance of expecting Q3 to be broadly in line with the Q3 of last year. This volume performance reflected the heightened challenges in the global macroeconomic environment, including the ongoing effects of tariffs, weak demand in China, and the planned delivery of fewer specials versus last year. Year-to-date revenue and total ASP also reflected the lower specials volumes when compared with the prior year period. As a result, revenue decreased by 26% and total ASP decreased by 22%. However, year-to-date core ASP increased by 4%, driven by improved mix, including both Vanquish and Vanquish Volante, as well as continued strong options contributions stable at around 18% of core revenue. Core ASP was lower sequentially in Q3 compared to Q2 this year due to the additional dealer support including in China that we mentioned earlier, foreign exchange and mix within the sports cards portfolio. The fewer specials deliveries and to a lesser extent the lower core volumes also impacted year-to-date gross profit and gross margin. The margin also reflected the impact of the previously communicated warranty costs and other investments made in product quality earlier in the year, as well as the elements impacting the core ASP I've just mentioned. We expect to deliver an improved gross margin performance in Q4, benefiting from additional core derivatives and the contribution from around 150 Valhalla's. Year-to-date adjusted EBITDA decreased against the prior year period by 105 million pounds to 8 million pounds, reflecting the gross profit movement. This was partially offset by a 24% decrease in adjusted operating expenses excluding DNA as we continue to focus on optimizing our cost base and to drive operating leverage. Here we've taken further action and now expect to reduce full year 2025 adjusted operating expenses excluding the DNA to around 275 million pounds from 313 million pounds in 2024. Year-to-date adjusted EBIT decreased by 42% to minus 172 million, with DNA decreasing by 23% to 180 million, primarily reflecting the lower specials volumes ahead of Valhalla deliveries commencing in Q4. Capital expenditure of 254 million was below the comparative period, and we've taken action to further reduce full-year 2025 capex to around 350 million pounds, down from the initial £400 million guidance at the start of the year and the £375 million referenced at the Q3 trading update. Pre-cash outflow in Q3 was £94 million, and from a liquidity perspective, and as previously announced, we received the net proceeds of £106 million for the sale of the shares in AMRGP, which resulted in total liquidity at the end of Q3 of £248 million. Whilst we announced at the beginning of the month our expectation that we'd no longer be free cash flow positive in H2 2025, we do expect to deliver an improved sequential Q4 performance for the reasons already outlined. As we move into next year, we expect to complement the current core portfolio with additional derivatives and to deliver around 500 Valhalla's with our production and delivery cadence established at the end of 2025. This, in addition to driving further operating leverage, And being disciplined in our approach to CapEx supports our outlook for materially improved financial performance in 2026. With that, I'll hand back to Adam so we can start to take some questions in the time we have remaining.