Aston Martin Lagonda Global Holdings plc

Good morning all, good afternoon all, and welcome to the Aston Martin Lagonda Q1 2026 results call. 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. And I will now hand the floor to Doug Lafferty to begin. So Doug, please go ahead when you are ready.

Thanks, Adam. Morning, everyone. Thanks for joining the call as always this morning for our Q1 2026 results. As ever, there'll be time for a few questions after I've provided a short summary of our performance for the first three months of this year. Overall, our Q1 2026 performance was in line with our guidance and we maintain our four-year outlook. As you are all aware, we expected Q1 to be the smallest quarter of the year as we continue to focus on realigning stock levels through a disciplined approach to managing production and deliveries. This was achieved with total wholesale volumes similar to the prior year period whilst core retail volumes were significantly ahead of wholesales by over 50%. As a result of the 102 Valhalla deliveries, total ASP increased 17% to £252,000, driving total revenue growth of 16%. As many of you would have seen at the start of the month, the overwhelmingly positive Valhalla driving reviews were published. with many giving it five stars and some labeling it the best Aston Martin ever. We're now building on this positive coverage with an extensive program of global customer driving events for this groundbreaking supercar through until the end of July. We expect the benefits of these to prove a further boost to the order book in the coming months. Valhalla deliveries, in addition to the benefits from the ongoing transformation program, drove an increase in gross margin to 35% from 28% in the prior year period. This demonstrates positive progress towards our four-year guidance of gross margin improving into the high 30%. Adjusted EBITDA increased year on year by £28 million to £23 million, reflecting the improvement in gross profits. Adjusted EBIT increased by 12% to minus £57 million, with DNA increasing by 33% to £80 million, reflecting the delivery of the Valhalla's. Free cash outflow in Q1 2026 marginally improved compared to the prior year, with the benefits from EBITDA and reduced capital expenditure largely being offset by the working capital outflow, which we expect to ebb and flow through the year. As guided at the full year results, we expect free cash outflow in 2026 to materially improve compared to the prior year, This will be supported by an enhanced product mix and more balanced production cadence from Q2 26 onwards, as we benefit from our expanded range of core models and the reduction in age stock, which was predominantly executed in the first quarter. Total cash and available facilities were £178 million at the end of the first quarter, benefiting from the gross proceeds of £50 million associated with the completed sale of the Aston Martin Formula One naming rights, We've also proactively sought to enhance our liquidity position, and today we're pleased to announce that we've agreed a new £50 million committed facility with Lawrence and other members of the U-Tree Consortium. This improves our pro forma Q1 2026 total liquidity to around £230 million and provides us with additional headroom and flexibility should any unexpected headwinds materialise in the coming period. With that in mind, we will continue to monitor global macroeconomic and geopolitical events very closely, in particular relating to any impact they may have on consumer confidence, demand, and of course supply chains. It's also worth quickly noting that Q1 was the first period in which the quarterly tariff quota mechanism was in operation in the USA. Our preparedness in terms of managing imports into the market was tested, and we had to carefully navigate the quota volumes based on limited data. due to the ongoing impact from the federal shutdowns that commenced in mid-February. I'm pleased to report, however, that all Q1 shipments to the U.S. were secured at the 10% tariff rate. We will continue to plan and monitor this closely as the remainder of the year plays out. Finally, despite the heightened levels of macroeconomic uncertainty, and with the group currently experiencing no substantial direct impact from the Middle East conflict, We still expect to deliver materially improved financial performance in 2026 compared with 2025, and as such, our four-year guidance and the short- to mid-term outlook remain unchanged. I'll hand back to Adam now so we can start the Q&A. Thank you.

Thank you. As a reminder, if you'd like to ask a question, please press star-flob01 on your telephone keyboard now, and when preparing to ask your question, please ensure you are unmuted locally. And our first question comes from Henning Cosman from Barclays. Henning, please go ahead. Your line is open.