Inchcape plc

Hello and welcome to the Inchcape 3rd Quarter 2021 Trading Update Analyst Conference Call. My name is Molly and I'll be your coordinator for today's event. Please note that this call is being recorded and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions. This can be done by pressing star 1 on your telephone keypad to register your question at any time. If you require assistance at any point, please press star zero and you will be connected to an operator. I will now hand you over to your host, Duncan Tate, to begin today's conference. Thank you.

Thanks very much, Molly. Good morning, everyone. Thank you for joining us. As usual, I'm joined on the call by our CFO, Heisbert de Zooten, and our Head of Investor Relations, Raghav Gupta. I'll begin by commenting on the group's performance before handing over to Heisbert to who will give you more details. We'll then be happy to take your questions. As mentioned in this morning's announcement, the Q3 results were ahead of our expectations, demonstrating the group's continued strong performance. Revenue increased 10% on an organic basis versus the same period last year. And compared to the third quarter of 2019, group revenue was 2% lower, a really pleasing performance in the context of the backdrop in our markets. While the pandemic continues to cause uncertainty, it had a relatively small impact on the group in Q3. As has been widely reported, supply constraints are continuing to impact the industry. This had a minimal impact on our top line in the first half, but it did start to impact our top line in Q3. To date, the volume loss has been offset by stronger margins for both new and used vehicles, helped by the current supply-demand imbalance. Let me now hand over to Heisbert, who will run you through the regions.

Thank you, Duncan, and good morning, everyone. In Q3, the group generated £1.9 billion of revenue. On an organic basis, revenue increased by 10%. versus the same period last year, and was 2% below Q3 2019. On the reported basis, revenue fell by 2% year over year. Aside from currency, the difference is explained by the impact of retail disposals over the past 12 months. Looking at our two segments, in distribution, the positive year-on-year growth continued, as we were supported by strong performance in the Americas and Africa, and Europe. As Duncan mentioned, the supply issues had a more pronounced impact, particularly towards the end of the quarter, which weighed on sales. Our performance in retail was extremely resilient given the backdrop of limited supply, with both used and after sales performing well. Let me now provide some color. Distribution overall delivered 20% higher organic sales versus the prior year, with the comparator impacted by COVID restrictions, but it was 5% below the equivalent period in 2019. Starting with Asia, where our sales declined versus the prior year, in Singapore, revenue was stable versus Q2, supported by after-sales and used. In Hong Kong, we delivered growth across all revenue streams, new, used and after sales. In Australasia, our volumes were adversely impacted by supply constraints and some localized pandemic-related restrictions. In Europe, all markets delivered organic growth above 19 levels, with lower vehicle availability impacting towards the end of the quarter. This was better than we had anticipated. The Americas region saw a good performance, with revenue above 19, supported by an improving top-line trend across new, used and after-sales. In Chile, Colombia, Costa Rica and Peru, revenues were above the Q2 level, with a strong uptick in new car volumes. Finally, our operations in Africa continue to perform well, supported by strong after-sales business. Moving to retail, revenue fell 2% year-over-year on organic basis, versus a high comparator as showrooms reopened as lockdowns eased in 2020. But it was nevertheless 5% above the equivalent period in 2019. This is a resilient performance in the context of supply constraints, which impacted our businesses in the UK. Revenue in Russia was above 19 levels after adjusting for its St. Petersburg disposal. And while new car volumes were weaker than in Q2, both markets were supported by a solid performance in both used and after sales. To summarize the quarter, our overall performance in Q3 has been better than expected, with revenues ahead of our forecast and stronger new and used vehicle margins. Let me now hand back to Duncan.