Aston Martin Lagonda Global Holdings plc

("Aston Martin", or "AML", or the "Company"; or the "Group")

Preliminary results for the twelve months ended 31 December 2023

                                                                                                                                                                                                                                               

Revenue growth of 18%; driven by robust volumes and record ASPs

Gross margin improved 650bps to 39.1%; driven by ongoing portfolio transformation

Adjusted EBITDA increased 61%; margin improved 490 basis points to 18.7%

Strong Q4 performance delivered record gross margin and adjusted EBITDA in the quarter

Disciplined strategic delivery supported ongoing deleveraging; net leverage ratio at 2.7x

Near- and medium-term guidance maintained

£m	FY 2023	FY 2022	% change	Q4 2023	Q4 2022	% change
Total wholesale volumes1	6,620	6,412	3%	2,222	2,352	(6)%
Revenue	1,632.8	1,381.5	18%	593.3	524.3	13%
Gross Profit	639.2	450.7	42%	268.4	164.5	63%
Gross Margin (%)	39.1%	32.6%	650 bps	45.2%	31.4%	1380 bps
Adjusted EBITDA2	305.9	190.2	61%	174.8	110.4	58%
Adjusted EBIT2	(79.7)	(117.9)	32%	55.4	10.3	438%
Operating (loss)/profit	(111.2)	(141.8)	22%	34.1	6.6	417%
(Loss)/profit before tax	(239.8)	(495.0)	52%	20.0	16.3	23%
Net debt2	(814.3)	(765.5)	(6)%	(814.3)	(765.5)	(6)%

¹ Number of vehicles including Specials; ² For definition of alternative performance measures please see Appendix

 

Lawrence Stroll, Aston Martin Executive Chairman commented:

"In 2023, Aston Martin delivered significant strategic milestones and further financial progress, driven by continued strong demand for our ultra-luxury, high-performance products. The rich mix of sales, driven by our ongoing commitment to product innovation, supported growth in average selling prices to record levels. This, combined with our ongoing portfolio transformation, resulted in a significantly enhanced gross margin, remaining on track to achieve our longstanding target of around 40% gross margin in 2024.

"Aligned to our vision of creating the most comprehensive product portfolio in our segment, we launched the highly acclaimed DB12 in 2023. We have seen a clear demonstration of DB12 and our other ultra-luxury vehicles addressing the growing demand for unique personalised products driving increased options revenue while also attracting new customers to the brand.

"Critical to the long-term success of Aston Martin is the strength of our iconic global brand and loyal, as well as evolving, customer base. Continued investment in both the brand and our go-to-market strategy are imperative to our success. I was extremely proud of our achievements in 2023 which included our fantastic partnership with the Aston Martin F1® Team, the global celebration of our historic 110^th anniversary, and continued implementation of our renewed corporate identity across our network including the opening of our first ultra-luxury flagship location, Q New York.

"Looking ahead to 2024, I'm excited by the future development of our product portfolio with the completion of our line-up of next generation, front-engine sports cars, including the recently unveiled Vantage, and the continuation of our Specials programmes. These and other advancements will support the delivery of the Company's near- and medium-term financial targets, including positive FCF generation in H2'24, as we unleash the power of our brand and continue our growth trajectory."

Aston Martin's management team will host a video webcast presentation at 8am (GMT) today. Details can be found on page 6 of this announcement and online at www.astonmartinlagonda.com/investors  

2023 Full year financial summary

·      Delivered robust wholesale volumes during a period of ongoing product portfolio transformation:

-  FY 2023 wholesale volumes increased 3% to 6,620 (FY 2022: 6,412); driven by 14% Sport/GT growth, reflecting growth in DB12 and DBS 770 Ultimate volumes in H2'23, despite slight delays to the initial production ramp up of DB12

-  As expected, Q4 2023 wholesale volumes increased 54% sequentially compared with Q3 2023; decreased 6% to 2,222 compared to prior year period (Q4 2022: 2,352) due to elevated Q4 2022 wholesales

·    FY 2023 revenue increased 18% to £1,633m reflecting continued execution of our growth strategy; enhanced positioning of our ultra-luxury brand and enriched product portfolio driving growth in volumes and record average selling prices (ASPs):

-  Strong pricing dynamics in the core portfolio and favourable mix from DBS 770 Ultimate, DBX707, V12 Vantage Roadster and new DB12:

§ FY 2023 core ASP of £188k, up 6% (FY 2022: £177k)

§ Q4 2023 core ASP of £196k, up 7% (Q4 2022: £184k)

-  Higher year-on-year Specials volumes with consistent delivery of Aston Martin Valkyrie (87 compared to 80 in FY 2022) including deliveries of the first Aston Martin Valkyrie Spiders, DBR22 and Valour limited edition models:

§ FY 2023 total ASP of £231k, up 15% (FY 2022: £201k)

§ Q4 2023 total ASP of £255k, up 20% (Q4 2022: £213k); reflecting richer mix

·     Significant increase in gross profit and margin progressing towards longstanding c. 40% target in FY 2024/25; reflecting benefits from the ongoing portfolio transformation, driving favourable pricing dynamics, product mix and volumes:

-  FY 2023 gross profit increased by 42% to £639m (FY 2022: £451m); gross margin at 39% (FY 2022: 33%)

-  Q4 2023 gross profit increased by 63% to £268m (Q4 2022: £165m); gross margin at 45% (Q4 2022: 31%)

·   FY 2023 adjusted EBITDA increased 61% to £306m (FY 2022: £190m) translating to an adjusted EBITDA margin increase of 490 basis points to 18.7%; primarily driven by higher gross profit, partially offset by 26% increase in adjusted operating expenses, including reinvestments into brand and marketing activities and inflationary impacts on the cost base, while recognising £11m relating to upward revaluation of investment in AMR GP Holdings Limited

·      FY 2023 operating loss decreased by 22% to £111m (FY 2022: £142m loss), including £78m year-on-year increase in depreciation and amortisation; Q4 2023 operating profit increased to £34m (Q4 2022: £7m)

·      Net cash inflow from operating activities of £146m (FY 2022: £127m); Free cash outflow^[3] of £360m (FY 2022: £299m outflow) reflecting:

-  Q4 free cash outflow of £63m (Q4 2022: £37m inflow) impacted by timing of DB12 and Valour deliveries in December 2023 with related receivables unwinding in January 2024

-  Higher year-on-year capital expenditure of £397m (FY 2022: £287m), primarily related to new models and next generation sports car developments, as well as development of the Company's electrification programme including the initial $33m (£27m) payment to Lucid Group, Inc. (Lucid) relating to the new strategic supply agreement

-  Net cash interest payments of £109m (FY 2022: £139m)

-  Working capital outflow of £86m (FY 2022: £15m outflow) reflecting timing of December deliveries and the unwinding of customer deposits on delivery of Special wholesales, partially offset by a reduction in inventory and payables

·      Year-end cash of £392m (2022: £583m), following the redemption of 50% of the outstanding second lien notes in November 2023

·     Net debt of £814m (2022: £766m), including a positive £61m impact of non-cash FX revaluation of US dollar-denominated debt as sterling strengthened against the US dollar during 2023; disciplined strategic delivery supported ongoing deleveraging with net leverage ratio improving to 2.7x (2022: 4.0x)

Operational Overview: Accelerating.Forward.

Amedeo Felisa, Aston Martin Chief Executive Officer, commented:

"2023 was a landmark year for Aston Martin's portfolio transformation as we delivered stunning new products to market including the DBS 770 Ultimate and DB12, the first of our next generation sports cars, celebrating a new era of ultra-luxury design and high-performance. The demand for our 110^th anniversary special edition Valour also demonstrated our brand's unique ability to operate at the very pinnacle of the ultra-luxury segment, something also exemplified by further Specials such as the DBR22 and Aston Martin Valkyrie. The momentum and experience our teams have amassed in 2023 to develop and deliver our ambitious plans is carried into 2024, which along with further investment in people and facilities, and a relentless focus on quality and continuous improvement, will support successful future model launches and our growth ambitions."

Heightened focus on ultra-luxury and high-performance

The success of the Company's ultra-luxury high-performance product portfolio this year is demonstrated by record total and core ASPs, and strong revenue and margin growth. In 2023, the Company completed a year-long celebration of Aston Martin's 110^th anniversary, with a series of unique global events bringing its community of customers even closer to the brand, culminating in the launch of the ultra-exclusive Special, Valour. The Company also completed first deliveries of its highly acclaimed next generation sports car, DB12. The model was recently awarded "Car of the Year" for 2024 by Robb Report and confirmed by Autocar magazine as a true "Super GT", driving reappraisal of Aston Martin amongst new audiences, whilst engaging loyal customers.

The DBS 770 Ultimate, the most powerful production Aston Martin ever, was unveiled in January 2023, with all examples sold out before production commenced in 2023. The world's most powerful ultra-luxury SUV, DBX707, continued to win awards, named 'Best Exclusive & Luxury Car' at the prestigious Auto vum Joer awards in Luxembourg, and was announced as the new Official FIA Medical Car of F1®️ in conjunction with the start of the 2023 World Championship season. The transformational demand for Aston Martin's high-performance DBX707 since its launch in 2022, underpins the next phase of the model's evolution, now the sole SUV model marketed.

In June 2023, the Company proudly opened the doors to Q New York, its first ultra-luxury flagship on 450 Park Avenue. The new location brings the highest levels of the iconic British brand's bespoke service, Q by Aston Martin, to North America for the very first time, providing the most sophisticated luxury specification experience available anywhere in the world.

The Company celebrated the success of the Aston Martin F1® Team with the release of an exclusive AMR23 Edition DBX707. Named after the brand's 2023 F1® challenger, the AMR23 Edition creates a DBX707 that shares a racing identity with both the AMR23 F1® car and the Official Medical Car of F1®. The Aston Martin F1® Team continued to drive brand visibility and heightened product consideration, with a 7% increase in website traffic versus non-race weekends in 2023 and 20% uplift in traffic to Aston Martin's award-winning configurator. Market research indicates that 60% of luxury car buyers strongly agree they are more likely to buy an Aston Martin because of its association with F1 ®️.

Further strengthening its high-performance DNA, in October 2023, Aston Martin announced it is set to enter the 2025 24 Hours of Le Mans Hypercar class with a racing prototype version of the ultimate Hypercar, the Aston Martin Valkyrie.

Looking to the year ahead, 2024 sees Aston Martin begin to complete its vision for a world-class product portfolio, with an incredible line-up of new, front-engine sports cars, joining the best performance SUV in the luxury segment. Unveiling the new Vantage in February 2024, the fastest and most driver focused in the famous nameplate's 74-year history, is testament to Aston Martin's commitment to delivering a thrilling driving experience and integrating the very best in motorsport technologies. This was exemplified by the car's launch on the same day as the 2024 Aston Martin Formula One® challenger and Vantage GT3 racer. Complementing the portfolio, the Company has an incredible, mid-engine supercar in Valhalla on the horizon, with prototype testing already taking place and currently on course to enter production before the end of this year.

Aligning the organisation for accelerated growth

In 2023, the Company delivered the majority of its vehicles in line with production plans, including the DBS 770 Ultimate, DBX707 and Special models. During Q3, despite initial production ramp up delays due to supplier readiness and EE platform integration issues, deliveries of DB12 commenced. This model included Aston Martin's first-ever in-house, bespoke infotainment system, where teams across the Company collaborated with suppliers to deliver this significant step forward for the product. Aligned with the Company's commitment to providing customers with the highest quality products and best user experience possible, these and other continual improvement processes will be carried forward into 2024 to support the successful launch of further new models.

In June 2023, the Company moved further forward in its ambition to create the world's most thrilling and highly desirable electric performance cars, with the formation of a landmark new supply agreement with world-leading electric vehicle technologies company, Lucid Group. This long-term relationship will help propel Aston Martin's high-performance electrification strategy, as the Company develops alternatives to the Internal Combustion Engine with a blended drivetrain approach between 2025 and 2030, including PHEV and BEV, with a clear plan to have a line-up of electric sports cars and SUVs. With Aston Martin's technical partnerships now in place, the Company's first battery electric vehicle (BEV) is now targeted for launch in 2026, benefitting from the very best high-performance technologies available.

In October 2023, a consortium working on the Company's high-performance electrification strategy was awarded £9 million of government funding through the Advanced Propulsion Centre UK, further supplementing the research and development of Aston Martin's innovative modular BEV platform, which will be propelled by world-leading electric vehicle technologies from Lucid.

Continued investment in people, skills and facilities

At the core of the Group's value is one single guiding tenet: No one builds an Aston Martin on their own. In line with this and Aston Martin's growth ambitions, the Company continued to invest in its world-class team, including the appointment of Chief Industrial Officer, Chief Procurement Officer, and BEV Chief Engineer. The Company also welcomed a breadth of new talent to complement its skilled and passionate team, increasing employment at its Gaydon headquarters to support the launch of its next generation of sports cars, as well as an enhanced early careers intake and senior appointments, notably in the area of electrification.

In 2023, Aston Martin launched new company values of Unity, Openness, Trust, Ownership and Courage through an internal and external campaign; these values are at the heart of the Company's commitment to make Aston Martin a great place to work. To solidify its community of people, the Company expanded its employee engagement programme with new internal initiatives and events, including a family weekend, which saw more than 10,000 employees and their friends and family attend. Aligned with the Company's diversity and inclusion aspirations, progress was made this year towards the target of having women in 25% of leadership positions by 2025 and in 30% of leadership positions by 2030.

The Company also announced further progress in its Racing.Green. sustainability strategy, using CO₂ emission offsets to establish carbon neutral status for its Gaydon and St Athan plants. This follows an acceleration towards the goals established in the strategy announced in 2022, with targets relating to Carbon Neutral manufacturing facilities, CO₂ emissions and energy consumption, and biodiversity improvement updated in 2023.  

Continued financial progress is reflected in our unchanged outlook

We remain on track to substantially achieve our 2024/25 financial targets in FY 2024. This is driven by continued strong demand for our products underpinned by the exciting new next generation launches in 2024 of Vantage and our final front-engine sports car later in the year. While recognising the ongoing geopolitical and macro economic volatility and associated inflationary and supply chain uncertainties, our world-class teams continue to collaborate with our partners, seeking to minimise potential impacts on our operations.

2024 is expected to deliver another year of significant strategic and financial progress as we continue the ongoing product portfolio transformation. Enhanced profitability and EBITDA will be driven by high single-digit percentage wholesale volume growth, gross margin further improving to achieve our longstanding target of c. 40% and EBITDA margin expansion continuing into the low 20s%.

Given the launch timings of our exciting two next generation sports cars in 2024, wholesale volumes will be heavily weighted to the second half of the year, resulting in significant H2'24 growth in gross profit and EBITDA compared with the prior year period.

Continued capital investment in new product developments to support our growth strategy is expected to total c. £350m in 2024, broadly flat across the first and second half of the year. FCF is expected to materially improve in 2024 compared with the prior year, achieving our targeted inflection point for positive FCF generation in H2'24, primarily driven by the timing of wholesale volumes.

Through disciplined strategic delivery, we expect to continue deleveraging, towards our net leverage ratio target of c. 1.5x in 2024/25. As previously announced, we expect to refinance our outstanding debt in the first half of 2024. We are in the advanced stages of preparation and look forward to launching this process in due course.

Additional 2024 guidance:

·      Depreciation and amortisation: c. £400m

·      Net cash interest: c. £110m, assuming current exchange rates prevail for 2024

 

The Group's medium-term outlook for 2027/28, remains unchanged:

·      Revenue: c. £2.5 billion

·      Gross margin: mid-40s%

·      Adjusted EBITDA: c. £800 million

·      Adjusted EBITDA margin: c. 30%

·      Free cash flow: to be sustainably positive

·      Net leverage ratio: below 1.0x

·      Expect to invest: c. £2bn over FY 2023-2027 in long-term growth and transition to electrification

 

 

 

All metrics and commentary in this announcement exclude adjusting items unless stated otherwise and certain financial data within this announcement have been rounded.

Appointment of Corporate Broker

Aston Martin also announces the appointment of Goldman Sachs International ("Goldman Sachs") as its joint Corporate Broker, alongside Barclays Bank PLC ("Barclays"), with immediate effect.

 

Enquiries

 

Investors and Analysts

James Arnold                        Head of Investor Relations                                                +44 (0) 7385 222347

                                                                                                                                                [email protected]

Ella South                              Investor Relations Analyst                                 +44 (0) 7776 545420

                                                                                                                                                [email protected] 

Media

Kevin Watters                      Director of Communications                                            +44 (0) 7764 386683

                                                                                                                                                [email protected]

Paul Garbett                         Head of Corporate & Brand Communications               +44 (0) 7501 380799

                                                                                                                                                [email protected]

Teneo                                                                                   

Harry Cameron                                                                                                    +44 (0) 20 7353 4200

 

Results Presentation

                                                                                                               

·      There will be a video presentation and Q&A for today at 08.00am GMT: https://app.webinar.net/50XL9z5nrwb

·      The presentation and Q&A can be accessed live via the corporate website: https://www.astonmartinlagonda.com/investors/results-and-presentations

·      A replay facility will be available on the website later in the day

 

No representations or warranties, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information presented or contained in this release. This release contains certain forward-looking statements, which are based on current assumptions and estimates by the management of Aston Martin Lagonda Global Holdings plc ("Aston Martin Lagonda"). Past performance cannot be relied upon as a guide to future performance and should not be taken as a representation that trends or activities underlying past performance will continue in the future. Such statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from any expected future results in forward-looking statements. These risks may include, for example, changes in the global economic situation, and changes affecting individual markets and exchange rates.

 

Aston Martin Lagonda provides no guarantee that future development and future results achieved will correspond to the forward-looking statements included here and accepts no liability if they should fail to do so. Aston Martin Lagonda undertakes no obligation to update these forward-looking statements and will not publicly release any revisions that may be made to these forward-looking statements, which may result from events or circumstances arising after the date of this release.

 

This release is for informational purposes only and does not constitute or form part of any invitation or inducement to engage in investment activity, nor does it constitute an offer or invitation to buy any securities, in any jurisdiction including the United States, or a recommendation in respect of buying, holding or selling any securities.

 

FINANCIAL REVIEW

Wholesale and revenue analysis

Number of vehicles	FY 2023	FY 2022	Change	Q4 2023	Q4 2022	Change
Total wholesale	6,620	6,412	3%	2,222	2,352	(6%)
Core (excluding Specials)	6,469	6,323	2%	2,139	2,313	(8%)
By region:
UK	1,141	1,110	3%	367	416	(12%)
Americas	2,037	1,980	3%	620	828	(25%)
EMEA ex. UK3	1,994	1,508	32%	727	628	16%
APAC3	1,448	1,814	(20%)	508	480	6%
By model:
Sport/GT	3,530	3,104	14%	1,440	920	57%
SUV	2,939	3,219	(9%)	699	1,393	(50%)
Specials	151	89	70%	83	39	113%

Note: Sport/GT includes Vantage, DB11, DB12, and DBS; 3 2022 numbers restated

 

Total wholesales of 6,620 increased by 3% year-on-year (FY 2022: 6,412), driven by high demand for DBS 770 Ultimate and DB12, despite expected impacts of the ongoing product portfolio transition. This included 151 Specials in FY 2023 (FY 2022: 89), comprised of a mature cadence of 87 Aston Martin Valkyries (FY 2022: 80), as well as DBR22 and initial Valour deliveries, demonstrating the Company's unique ability to operate at the very highest levels of the luxury automotive segment and attract new customers and collectors to the brand.

As expected, total wholesales of 2,222 units in Q4 2023 increased by 54% compared to Q3 2023, though decreased by 6% year-on-year, due to elevated Q4 2022 SUV wholesales following the resolution of supply chain and logistics disruptions in Q2 and Q3 2022.

SUV wholesales remained robust in FY 2023, with ASPs benefiting from the planned change in mix to DBX707 in line with the Company's ultra-luxury high-performance strategy. The DBX707 is now clearly established as the benchmark in the ultra-luxury SUV segment and represented 71% of SUV wholesales in FY 2023 (FY 2022: 52%), with volumes increasing 25% in 2023 compared with the prior year. SUV wholesales decreased both on a FY 2023 and Q4 2023 year-on-year basis (9% and 50% decreases, respectively), reflecting portfolio transition and the previously mentioned elevated Q4 2022 wholesales following disruptions earlier in 2022.  

Q4 2023 Sport/GT wholesales of 1,440 units increased by 57% (Q4 2022: 920), reflecting considerable contribution from DB12. The temporary peak in DB12 wholesales reflected partial delays in Q3 2023 deliveries due to supplier readiness and EE platform integration issues.

Aston Martin continues to operate a demand-led approach, aligned with its ultra-luxury high performance strategy. Prior to the initial production ramp up delays of DB12, retail volumes (retails) were ahead of wholesale volumes (wholesales) for the year. However, similar to the profile experienced at the end of 2022, and as a direct result of the timing of DB12 deliveries in December 2023, wholesales were temporarily ahead of retails at the end of the year. Following the unwinding of this position, the Company expects to see retails outpace wholesales in FY 2024 as it continues the transition to its next generation of sports cars.

Geographically, wholesale volumes remained well balanced across all regions. The Americas and EMEA excluding UK were the largest regions in FY 2023, collectively representing 61% of total wholesales, driven by strong demand for DBX707, DBS 770 Ultimate and DB12. In our home market, the UK, wholesales grew 3% year-on-year, driven by DBS 770 Ultimate and DB12 deliveries. Finally, FY 2023 wholesale volumes in APAC were impacted by lower sales in China, which decreased by 47% compared to 2022, which more than offset growth in wholesale volumes including DBX707 and DBS 770 Ultimate outside of China. China continues to be a market where we see significant opportunity for long-term growth. Wholesale volumes in APAC excluding China were up 12% year-on-year (FY 2022: 10%).

Revenue by category

£m	FY 2023	FY 2022	% Change
Sale of vehicles	1,531.9	1,291.5	19%
Sale of parts	80.0	70.8	13%
Servicing of vehicles	9.8	9.3	5%
Brand and motorsport	11.1	9.9	12%
Total	1,632.8	1,381.5	18%

FY 2023 revenue increased by 18% to £1.6bn (FY 2022: £1.4bn), primarily due to strong wholesale ASP growth, with both core and total ASP reaching record levels and, to a lesser extent, due to higher wholesale volumes. Total ASP of £231k (FY 2022: £201k) increased by 15% year-on-year, reflecting richer mix including deliveries of the full range of Aston Martin Valkyrie models and the 110^th anniversary Special, Valour, and DBR22, as well as higher core ASPs. Core ASP of £188k (FY 2022: £177k) increased by 6% year-on-year driven by strong pricing and favourable mix dynamics, despite some foreign exchange headwinds.

Q4 2023 revenue increased by 13% to £593m (Q4 2022: £524m), driven by strong ASP growth. Total Q4 2023 ASP of £255k (Q4 2022: £213k) increased by 20%, reflecting 113% increase in Special edition wholesale volumes. Q4 2023 core ASP of £196k (Q4 2022: £184k) increased by 7%, driven by strong pricing and favourable mix dynamics from new DB12 and exclusive DBS 770 Ultimate, and despite foreign exchange headwinds in Q4 2023.

Summary income statement and analysis

£m	FY 2023	FY 2022	Q4 2023	Q4 2022
Revenue	1,632.8	1,381.5	593.3	524.3
Cost of sales	(993.6)	(930.8)	(324.9)	(359.8)
Gross profit	639.2	450.7	268.4	164.5
Gross margin %	39.1%	32.6%	45.2%	31.4%
Adjusted operating expenses1	(718.9)	(568.6)	(213.0)	(154.2)
of which depreciation & amortisation	385.6	308.1	119.4	100.1
Adjusted EBIT2	(79.7)	(117.9)	55.4	10.3
Adjusting operating items	(31.5)	(23.9)	(21.3)	(3.7)
Operating (loss)/profit	(111.2)	(141.8)	34.1	6.6
Net financing (expense)/income	(128.6)	(353.2)	(14.1)	9.7
of which adjusting financing (expense)/ income	(36.5)	(20.1)	(8.2)	(39.1)
(Loss)/profit before tax	(239.8)	(495.0)	20.0	16.3
Tax credit/(charge)	13.0	(32.7)	13.2	(26.0)
(Loss)/profit for the period	(226.8)	(527.7)	33.2	(9.7)
Adjusted EBITDA1,2	305.9	190.2	174.8	110.4
Adjusted EBITDA margin	18.7%	13.8%	29.5%	21.1%
Adjusted (loss)/profit before tax1	(171.8)	(451.0)	49.5	59.1
EPS (pence)	(30.5)	(124.5)
Adjusted EPS (pence)	(21.4)	(114.1)

1 Excludes adjusting items; 2 Alternative Performance Measures are defined in Appendix

 

In FY 2023, gross profit of £639m increased by £189m, or 42% (FY 2022: £451m). This translated to a gross margin of 39%, expanding by 650 basis points compared to the prior year (FY 2022: 33%). The gross margin performance reflected benefits from the ongoing portfolio transformation strategy, driving favourable pricing dynamics, product mix and volumes, which was particularly strong in Q4 2023 with a gross margin of 45% (Q4 2022: 31%). Throughout FY 2023 this was partially offset by higher manufacturing, logistics and other costs, as well as FX headwinds. The Company continues to target over 40% gross margin from future products, aligned with the Company's ultra-luxury strategy.

Adjusted EBITDA increased by 61% year-on-year to £306m in FY 2023 (FY 2022: £190m), or by £116m. This translated to an adjusted EBITDA margin of 19% (FY 2022: 14%), a year-on-year expansion of approximately 490 basis points. The year-on-year increase in adjusted EBITDA was primarily due to higher year-on-year revenue and gross profit, as described above, partially offset by 26% increase in adjusted operating expenses including reinvestments into brand and marketing activities and inflationary impacts on the cost base, while recognising £11m relating to upward revaluation of investment in AMR GP Holdings Limited.

The operating loss of £111m compared to a £142m loss in the prior year. The 22% decrease year-on-year was primarily driven by:

-      Higher year-on-year gross profit as described above

These factors were partially offset by:

-   A £78m year-on-year increase in depreciation and amortisation, primarily related to cadence of Specials delivery, DBS 770 Ultimate and DB12 launch, as well as full year DBX707 charges

-     Increased investment in brand and product launches such as V12 Vantage, DBS 770 Ultimate, DB12, Valhalla and Valour, and marketing activities at events such as the Goodwood Festival of Speed,  Pebble Beach, and  Las Vegas Grand Prix

-      Higher general costs, including inflationary pressures

Net financing costs of £129m were down from £353m in 2022, comprising a positive non-cash FX revaluation impact of £61m,  as sterling strengthened against the US dollar (FY 2022:  negative £156m). Adjusting operating items of £32m (FY 2022: £24m) predominantly related to ERP implementation costs and one-off legal expenses. The £37m net adjusting finance charge (FY 2022: £20m) was due to movements in fair value of outstanding warrants, and financing expenses associated with the partial repayment of the second lien notes.

The loss before tax was £240m (FY 2022: £495m loss), an improvement of £255m year-on-year and the loss for the period was £227m (FY 2022: £528m), an improvement of £301m year-on-year, both impacted by the significant reduction in net financing costs related to the US dollar-denominated Senior Secured Notes.

The tax credit on the adjusted loss before tax was £13m, and the total effective tax rate for the period to 31 December 2023 was 5.4% which is predominantly due to recognising deferred tax on accelerated capital allowances and UK tax losses, as well as movements in deferred tax on the amount of interest the Group can deduct for tax purposes.

The weighted average share count at 31 December 2023 was 748 million, following the placing of new ordinary shares to Lucid Group, Inc. in November and to Geely International (Hong Kong) Limited in May. 66 million shares in relation to the warrants remain outstanding and are exercisable until 2027, giving an adjusted EPS of (21.4)p (2022: (114.1)p).

Cash flow and net debt

£m	FY 2023	FY 2022	Q4 2023	Q4 2022
Cash generated from operating activities	145.9	127.1	114.5	184.0
Cash used in investing activities (excl. interest)	(396.9)	(286.9)	(121.9)	(73.5)
Net cash interest paid	(109.0)	(139.0)	(55.8)	(73.7)
Free cash (outflow)/inflow	(360.0)	(298.8)	(63.2)	36.8
Cash inflow/(outflow) from financing activities (excl. interest)	182.2	456.2	(80.6)	(210.5)
(Decrease)/increase in net cash	(177.8)	157.4	(143.8)	(173.7)
Effect of exchange rates on cash and cash equivalents	(13.1)	7.0	(7.6)	(14.8)
Cash balance	392.4	583.3	392.4	583.3

Net cash inflow from operating activities was £146m (FY 2022: £127m). The year-on-year change in cash flow from operating activities was primarily driven by a £116m increase in adjusted EBITDA, as explained above, and mostly offset by a working capital outflow of £86m (FY 2022: £15m outflow). The largest driver was an £82m increase in receivables (FY 2022: nil movement), driven by timing on the delivery of DB12 and Specials, as well as higher volumes in December 2023. This was partially offset by a decrease in inventories of £12m (FY 2022: £78m increase) due to reduced work-in-progress and finished goods, and a £51m increase in payables (FY 2022: £82m) due to higher production in December 2023. Due to the high volume of Specials delivered in Q4 2023, there was a £66m decrease (FY 2022: £18m decrease) in deposits held, as balances on accounts unwound in the quarter, partially offset by ongoing Valour deposit collections.

Capital expenditure was £397m in 2023, an increase of £111m year-on-year, with investment focused on the future product pipeline, particularly the next generation of sports cars, as well as development of the Company's electrification programme including a $33m (£27m) payment to Lucid in Q4 2023 relating to the new strategic supply agreement.

Free cash outflow of £360m in 2023 compared to a £299m outflow in 2022, is due to an increase in capital expenditure as detailed above, partially offset by the improvement in cash flow from operating activities.

£m		31-Dec-23	31-Dec-22
Loan notes		(980.3)	(1,104.0)
Inventory financing		(39.7)	(38.2)
Bank loans and overdrafts		(89.4)	(107.1)
Lease liabilities (IFRS 16)		(97.3)	(99.8)
Gross debt		(1,206.7)	(1,349.1)
Cash balance		392.4	583.3
Cash not available for short term use		-	0.3
Net debt		(814.3)	(765.5)

Cash as at 31 December 2023 includes the remaining £106m of proceeds from August's share placing, following the redemption of a portion of the outstanding second lien notes in November, and £95m proceeds from the new shares issued to Geely International (Hong Kong) Limited in May.

Net debt of £814m (2022: £766m), including a positive £61m impact of non-cash FX revaluation of US dollar-denominated debt as the sterling strengthened against the US dollar during the year. Disciplined strategic delivery and EBITDA growth supported ongoing deleveraging with net leverage ratio improving to 2.7x (2022: 4.0x).

APPENDICES

Dealerships

		31 Dec-23	31 Dec-22
UK		20	21
Americas		44	44
EMEA ex. UK		54	52
APAC		45	48
Total		163	165
Number of countries		53	54

Alternative Performance Measure

£m	FY 2023	FY 2022
Loss before tax	(239.8)	(495.0)
Adjusting operating expense	(31.5)	23.9
Adjusting finance expense	(36.5)	(12.5)
Adjusting finance (income)	-	32.6
Adjusted EBT	(171.8)	(451.0)
Adjusted finance (income)	74.3	(3.0)
Adjusted finance expense	(166.4)	336.1
Adjusted EBIT	(79.7)	(117.9)
Reported depreciation	102.2	88.8
Reported amortisation	283.4	219.3
Adjusted EBITDA	305.9	190.2

In the reporting of financial information, the Directors have adopted various Alternative Performance Measures ("APMs"). APMs should be considered in addition to IFRS measurements. The Directors believe that these APMs assist in providing useful information on the underlying performance of the Group, enhance the comparability of information between reporting periods, and are used internally by the Directors to measure the Group's performance.

-      Adjusted EBIT is loss from operating activities before adjusting items

-     Adjusted EBITDA removes depreciation, loss/(profit) on sale of fixed assets and amortisation from adjusted operating loss

-      Adjusted operating margin is adjusted EBIT divided by revenue

-      Adjusted EBITDA margin is adjusted EBITDA (as defined above) divided by revenue

-      Adjusted Earnings Per Share is loss after income tax before adjusting items, divided by the weighted average number of ordinary shares in issue during the reporting period

-     Net Debt is current and non-current borrowings in addition to inventory financing arrangements, lease liabilities recognised following the adoption of IFRS 16, less cash and cash equivalents and cash held not available for short-term use

-      Free cashflow is represented by cash (outflow)/inflow from operating activities plus the cash used in investing activities (excluding interest received) plus interest paid in the year less interest received.