TIDMAML
RNS Number : 4915C
Aston Martin Lagonda Global Hld PLC
23 February 2022
23 February 2022
Aston Martin Lagonda Global Holdings plc
Preliminary results for the 12 months to 31 December 2021
- Retail sales well ahead of wholesales; >6,000 core vehicles wholesaled
- Significant growth in Americas and record sales in China, driven by strong DBX demand
- Targeting Net-Zero manufacturing facilities by 2030
- 2024/25 medium-term targets confirmed
GBPm 31-Dec-21 31-Dec-20 % change Q4-21 Q4-20 % change
---------- ---------- -------- --------
Total wholesales(1) 6,178 3,394 82% 1,928 1,839 5%
Revenue 1,095.3 611.8 79% 358.9 341.8 5%
Adjusted EBITDA(2) 137.9 (70.1) n.m. 65.6 47.5 38%
Adjusted operating
loss (2) (74.3) (224.9) 67% (9.2) (9.7) 5%
Operating loss (76.5) (322.9) 76% (8.3) (93.8) 91%
Loss before tax (213.8) (466.0) 54% (25.2) (158.1) 84%
Net debt(2) (891.6) (726.7) (891.6) (726.7)
--------------------- ---------- ---------- --------- -------- -------- ---------
1. Number of vehicles including Specials; 2. For definition of
alternative performance measures please see Appendix
Financial Highlights
-- Wholesales increased 82% as more normal operations were
resumed following COVID-19 restrictions in 2020 and completed
rebalance of dealer inventory in Q1
- Achieved core targets and delivered over 3,000 DBXs in first
full year
- Transition to ultra-luxury operating model successfully
completed with retails well ahead of wholesales
-- Revenue increased to GBP1.1bn largely due to substantial
volume growth, driven by customer demand, and strong pricing
dynamics; represents 12% growth on 2019 revenues of GBP981m
pre-COVID and strategic shift to ultra-luxury
- Core ASP of GBP150k up from GBP136k in 2020 and a 14%
improvement versus 2019 (GBP132k)
-- Adjusted EBITDA of GBP138m (consistent with January 2022
trading update) an improvement of more than GBP200m versus 2020 and
GBP19m on 2019, with a 13% margin; Q4 adjusted EBITDA margin of 18%
reflecting strength of trading, Specials deliveries and Project
Horizon efficiencies
- Reduced operating loss of GBP77m despite increased investment
in brand and marketing activities, higher depreciation and
amortisation and non-repeat of 2020 GBP13m furlough credit
-- Positive cash inflow from operations of GBP179m; Free cash
outflow of GBP123m, a GBP416m improvement on the prior year
(GBP215m improvement on 2019), with rephased capital expenditure
aligned to business plan deliverables
-- Strong liquidity, year-end cash of GBP419m (2020: GBP489m);
Net debt of GBP892m (2020: GBP727m)
Transformation continues at pace
-- Delivering exciting products
- DBX achieved an estimated 20% market share; DBX707, the most
powerful luxury SUV on the market, unveiled 1 February 2022 with
deliveries expected from Q2
- Core electrification journey started with mild-hybrid DBX
Straight-Six launched in China in Q4
-- First plug-in hybrid electric vehicle (PHEV) planned for
early 2024 deliveries
-- First battery electric vehicle (BEV) targeted for launch in
2025 and all new car lines to have the option of an electrified
powertrain by 2026 (PHEV or BEV); fully electrified Sport/GT and
SUV portfolio by 2030
- Deliveries of era-defining Aston Martin Valkyrie programme
started in Q4 at a slower pace than originally expected due to
following a quality-focused approach
-- All Aston Martin Valkyrie Coupes are sold out with a waiting
list running; the Spider version was two-times over-subscribed at
launch
- V12 Vantage attracting excellent customer demand ahead of
deliveries scheduled for Q3 2022
-- Focusing on customer & brand
- Optimal front-engine dealer inventory levels achieved with
healthy orderbook for all core vehicles
- Attracted a large number of new customers as DBX broadens
addressable market - 50% new to brand
- Class-leading configurator led to a trebling of leads to our
dealers; significant increase in reported third-party dealer
profitability with >75% growth in new dealership enquiries
- Sponsorship of Aston Martin Cognizant F1(TM) Team which
reached c.2.8bn people driving a strong uplift to website traffic
on race weekends
-- Delivering operational excellence, agility and efficiency
- Manufacturing consolidation has led to a c.20% reduction in
manufacturing costs
- New launches will be targeting contribution margins of over
40%
- Creation of Engineering Centres of Excellence with a global
footprint
- Almost 20% of employees new to the business; commercial,
technical, and operational teams substantially strengthened with
new talent whilst delivering efficiencies in manufacturing
-- Integrating ESG with new sustainability goals
- Committed to the Science Based Targets initiative (SBTi)
Net-Zero Standard, showing our commitment to target net-zero
manufacturing facilities and a 30% reduction in supply chain
emissions by 2030
- Aiming to achieve zero plastic packaging waste, in addition to
reducing water consumption by 15% by 2025
- Targeting 25% female leadership within the next five years,
tailoring leadership development and a number of wider initiatives
to create a more inclusive culture
-- Governance
- Comprehensive Board renewal added extensive automotive and
luxury experience; almost 30% of Board are women
-- Product Strategy Committee formed, leveraging industry
experience
-- Sustainability Committee formed to oversee implementation of
new sustainability strategy
Lawrence Stroll, Aston Martin Lagonda Executive Chairman
commented:
"My second year as Executive Chairman of this iconic and great
company has been another of significant progress. We have
successfully transitioned our operating model to that of an
ultra-luxury performance brand, with customer demand well ahead of
supply. Our core business is strong and delivered to plan, with
substantially improved profitability.
We have strengthened our teams, adding more luxury and
automotive experience to the Board, broadening relevant experience
at the executive level and substantially bolstering our operational
and development teams. The return of the Aston Martin name to the
Formula One(TM) grid has dramatically increased our brand exposure,
desirability and global awareness, in line with our growth
ambitions.
The Aston Martin Valkyrie programme pushes the boundaries of
what is possible to bring to market outside an F1(TM) racing
environment. We inherited a challenging programme, and while it was
disappointing that some deliveries were rescheduled from late 2021,
following an in-depth review and now under a dedicated team we are
confident of continuing to deliver these truly extraordinary
vehicles to our customers with no compromises.
We have a strong pipeline of extraordinary products to come with
both DBX707 and V12 Vantage this year and a new generation of
front-engine cars for 2023. This high-performance new portfolio
will command stronger pricing and profitability compared with the
past, driving delivery of our financial targets. Our path to
electrification is clear with three of our product launches in 2021
featuring hybrid technology, our first plug-in hybrid coming in
2024, our first battery electric vehicle targeted for launch in
2025 and all new car lines will have an electrified powertrain
option by 2026.
When I invested, I knew this transformation would take four to
five years to recreate Aston Martin as the world's most desirable,
ultra-luxury British performance brand. We have made very strong
progress already and are well on plan to achieve our ambitious
goal."
Tobias Moers, Aston Martin Lagonda Chief Executive Officer
commented:
"The operating environment remained challenging throughout 2021.
Despite this, we grew our core business to plan, with a demand-led
delivery of our volume targets and enhanced core profitability. We
achieved strong pricing and closed the year with dealer stock at
optimum levels. We also started delivery of the
once-in-a-generation Aston Martin Valkyrie hypercars. This was
achieved despite the technical ambition of the product, supply
chain constraints and with no compromise on quality, resulting in
fewer cars than originally planned shipping in 2021.
Brand desirability is strong as evidenced by retails outpacing
wholesales and the demand we see for our products, with the Aston
Martin Valkyrie Spider, two-times oversubscribed following its
launch in the summer and the order book filling up for our plug-in
hybrid supercar Valhalla, which with a small timing shift is now
due to start deliveries in early 2024.
We are expanding our offer in the growing luxury SUV segment. We
launched the Straight-Six mild hybrid in China in November 2021 and
earlier this month unveiled the highest performing luxury SUV on
the market, DBX707. These products, coupled with the benefits of
the efficiency actions undertaken through Project Horizon and
alongside our Specials programme give us confidence in delivering
meaningful growth in 2022.
Beyond 2022 we are confident in the medium and long-term
potential for the business with our exciting product plans and a
defined path to electrification."
Outlook
We are well on our way to achieving our medium-term targets of
c.10,000 wholesales, c.GBP2bn revenue and c.GBP500m adjusted EBITDA
by 2024/25.
For 2022, we expect to deliver significant growth with a c.8%
increase in core volumes expected to deliver a c.50% improvement in
adjusted EBITDA from the core business. We will deliver the first
two vehicles from the new management team, DBX707 and the V12
Vantage, with improved profitability compared with prior models as
well as price adjustments across the full portfolio, given the
pricing power of the brand.
In addition, 75-90 Aston Martin Valkyrie programme vehicles are
planned for shipment.
Supply chains globally continue to experience disruption and our
teams remain focused on mitigating any impact on production. Q1 is
expected to be the smallest quarter of the year, given the timing
of product launches (DBX707 in Q2 and V12 Vantage in Q3) and as we
focus on refining the production process for Aston Martin Valkyrie
programme vehicles with a focus on quality.
2022 guidance:
-- Wholesales: growth to > 6,600 units
-- Adjusted EBITDA margin: c.350-450bps expansion
-- Capex and R&D: c.GBP300m
-- Depreciation and amortisation: c.GBP315m-GBP330m
Reflecting Aston Martin Valkyrie programme shipments and a full
year of accelerated depreciation of capitalised development costs
ahead of next generation GT/sports vehicles in 2023
-- Interest costs: c.GBP170m (P&L)/ c.GBP125m (cash)
assuming current exchange rates prevail for 2022
Pension scheme closure
The Company successfully negotiated the closure to future
accrual of its defined benefit pension scheme in January 2022. This
is expected to deliver annual savings of c.GBP4.5m per year with an
associated one-off adjusting item of c.GBP14m expected to be booked
in 2022 (not included within adjusted EBITDA). In cash terms, with
transition payments to scheme members in 2022-2024, the net cash
impact is c.GBP1m benefit in each of those years and a c.GBP4.5m
benefit thereafter.
Strategic technology agreement
The Company is embedding the first tranche of technology from
Mercedes-Benz AG into its product renewal and expansion pipeline.
There are currently no plans to issue additional shares to
Mercedes-Benz AG until early 2023.
Enquiries
Investors and Analysts
Charlotte Director of Investor Relations +44 (0)7771 976764
Cowley charlotte.cowley@astonmartin.com
Holly Grainger Deputy Head, Investor Relations +44 (0)7442 989551
holly.grainger@astonmartin.com
Brandon Henderson Senior Manager, Investor +44 (0)7585 326704
Relations brandon.henderson@astonmartin.com
Media
Kevin Watters Director of Communications +44 (0)7764 386683
kevin.watters@astonmartin.com
Paul Garbett Head of Corporate and Brand +44 (0)7501 380799
Communications paul.garbett@astonmartin.com
Grace Barnie Corporate Communications +44 (0)7880 903490
Manager grace.barnie@astonmartin.com
Tulchan Communications
Harry Cameron and Simon Pilkington +44 (0)20 73534200
-- Recorded presentations accompanying this release from
Lawrence Stroll, Tobias Moers and Kenneth Gregor are available on
the corporate website from 07.00am GMT today; there will be a live
Q&A for investors and analysts at 08:30am GMT
-- Presentations and the Q&A can be accessed here:
www.astonmartinlagonda.com/investors/calendar
-- 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.
BUSINESS REVIEW
2021 presented both new and old challenges as Aston Martin
navigated a difficult operating environment both due to supply
chain constraints and the ongoing COVID-19 pandemic. Despite this,
the Company built on the foundational work in 2020 to deliver on
its core portfolio as planned and successfully completed an
extensive and challenging development and testing schedule for the
era-defining Aston Martin Valkyrie, with shipments started in
December.
In their first full year, the management team focused on
delivery while redefining the Vision and Strategy, driving change
throughout every area of the business and executing on Project
Horizon.
The Company built on the strong executive management
appointments in 2021 by also strengthening the Board, appointing
world-class leaders in both the luxury and automotive sectors,
adding relevant expertise and experience to support Aston Martin's
journey to become the world's most desirable ultra-luxury British
performance brand.
As the Company focuses on the upcoming portfolio of exciting new
products and embarks on its electrification journey, engineering
and procurement has been a key point of emphasis alongside
upskilling operational and commercial functions. The business has
recruited over 350 new employees, to lead the Company into a new
era of ultra-luxury performance vehicles.
Project Horizon transformation - delivering operational
excellence, agility & efficiency
The Project Horizon journey started in late 2020 and the Company
has made substantial progress throughout 2021 in becoming more
agile and efficient.
Delivering exciting products
In Q1, the Company successfully achieved the rebalance of
front-engine supply to demand, which was earlier than originally
planned. Retails outpaced wholesales by a significant margin,
driving strong pricing dynamics and demonstrating the strength of
the brand and demand for front-engine vehicles. The Vantage F1(TM)
edition, the first F1(TM) branded Aston Martin road car, was well
received by customers generating strong sales.
Aston Martin's first SUV, DBX, successfully delivered over 3,000
units in its first full year of production, achieving an estimated
20% share of the luxury SUV market, while maintaining a healthy
orderbook throughout the year. The first derivative of this, a
Straight-Six mild-hybrid, was released exclusively for China in Q4.
Initial demand is strong and is expected to continue to build. The
second derivative, DBX707, the most powerful luxury SUV on the
market, was unveiled on 1 February 2022, adding another dimension
to the Aston Martin SUV offer and is expected to deliver strong
growth in the segment from Q2 2022 onwards.
The first true F1(TM) car for the road, Aston Martin Valkyrie,
started deliveries of road and track versions to customers in
December. This pioneering hypercar programme has pushed new
boundaries in British automotive engineering and comprises the
revolutionary Aston Martin Valkyrie road car, the track evolution
AMR Pro, as well as the open-top Aston Martin Valkyrie Spider,
which was two-times oversubscribed following its launch in
August.
Three of the models launched this year featured hybrid
technology as the Company sets out on its path to electrification.
The Aston Martin Valkyrie programme serves as a halo to our
mid-engine vehicles, with the mid-engine supercar Valhalla, planned
to be the Company's first PHEV on the market in 2024. The
expectation is for all new car lines to have an electrified
powertrain option by 2026 and for the Sport/GT and SUV portfolio to
be fully electrified by 2030.
Focusing on customer & brand
Returning to the grid after over 60 years, the Aston Martin
Cognizant Formula One(TM) Team has connected the brand with a
highly engaged worldwide audience, with c.2.8bn social media
impressions since March, during the most thrilling F1(TM) season
for decades. Brand equity research shows improved perception and
increased buying intent among luxury car buyers, particularly in
China and the US, linked to the presence of the Aston Martin brand
in F1(TM) . Furthermore, the role of the Vantage F1(TM) Edition and
DBX as Official Safety and Medical Cars of Formula 1(TM) for half
of the season's race weekends has brought heightened global
exposure, resulting in increased web traffic, up 25% on those
weekends, and increased buying interest.
The Company has also reinvested in fixed marketing to support
the brand and the expansion of the portfolio. In July, the business
leveraged the Goodwood Festival of Speed to re-launch the plug-in
hybrid supercar Valhalla, and in August unveiled the Aston Martin
Valkyrie Spider at the Pebble Beach Concours d'Elegance. Aston
Martins also took a leading role in the latest James Bond film, No
Time To Die, with four of the brand's cars featuring.
In July the Company launched a class-leading configurator,
enhancing the customer journey to create a truly unique and
luxurious experience. Leads to dealers have increased significantly
since launch and option uptake has increased throughout the
portfolio.
Reported third-party dealer profitability in all regions has
significantly improved, supported by the improved pricing dynamics,
increasing residual values and strength in the pre-owned market
alongside the expansion of the product offer. This transformation
has contributed to a >75% increase in new dealer inquiries.
Delivering on operational excellence, agility and efficiency
In Q2, the Company transformed the manufacturing process at
Gaydon into a centre of excellence for GT/sports cars, converting
from two production lines to one, improving efficiencies and
consolidating Specials assembly into the one plant. During Q3, the
Company refined the manufacturing process at St Athan and
consolidated its paint application operations. Bespoke paints are
now only applied in Gaydon allowing the new St Athan paint shop to
run more efficiently and effectively for all other colours,
resulting in net savings of over GBP1,000 per vehicle. Combined,
these initiatives reduced manufacturing costs per vehicle by
c.20%.
The business navigated the challenging supply chain environment
throughout the year and implemented measures to mitigate
disruption, identify suppliers at risk and work with them
proactively to resolve any pending situations. The Company has also
worked on developing stronger, longer-term strategic partnerships
with Tier 1 suppliers.
Becoming a world-leading sustainable ultra-luxury automotive
business
Tackling climate change
A key issue of global awareness is climate change and as a
responsible business, the Company recognises that it is now time to
accelerate action and escalate our ambition on tackling climate
change. Through investment and adapting the production processes,
the business plans to work closely with the SBTi to set and verify
targets to deliver net-zero emission manufacturing facilities by
2030, a 30% reduction in supply chain emissions by 2030, and
net-zero supply chain emissions by 2039.
Creating a better environment
By 2025, the Company is aiming to generate zero plastic
packaging waste and waste for landfill, as well as reduce water
consumption by 15%. The business is also aiming to continue to
maximise the use of sustainable materials and boost biodiversity
across all sites.
Investing in people and opportunities
Investing in people and opportunity will continue to shape the
Company's future. The Company relies on the skills and dedication
of a brilliant team; a team that must be kept safe, a team that
must be supported, and a team that must be sustained for the
long-term. This demands a relentless focus on targeting zero
accidents, supporting employees to realise their potential, and
creating a more diverse and inclusive environment that promotes,
attracts and develops the very best talent.
As part of the new ESG Strategy, the Company is targeting 25% of
female leadership within the next five years, compared with the
current level of 14%.
Take-off into a new era for Aston Martin
The next stage of our journey encompasses a new vision and
refined strategy to accelerate growth and drive profitability.
Our vision is to be the world's most desirable ultra-luxury
British performance brand - creating vehicles with the ultimate
technology, precision and craftsmanship that deliver thrilling
performance and a bespoke, class-leading customer experience.
The refined strategy advances the work completed through Project
Horizon and builds on the inherent strengths of the business,
focusing on four strategic pillars:
-- Brand : Iconic brand with 109 years of deep, rich history;
-- Product innovation : Pushing the limits of ultra-luxury, technology and performance;
-- Sustainability : Driving new standards in the ultra-luxury segment;
-- Team : World-class leadership team and brand attracting and developing top talent globally.
Leveraging the progress made through Project Horizon, in
combination with the refined strategy, will position the Company to
accelerate growth and drive increased profitability.
FINANCIAL REVIEW
Sales and revenue analysis
Number of vehicles FY-21 FY-20 % change Q4-21 Q4-20 % change
------ ------
Wholesale 6,178 3,394 82% 1,928 1,839 5%
Core (excluding Specials) 6,080 3,351 81% 1,886 1,807 4%
By region:
UK 1,109 820 35% 381 350 9%
Americas 1,984 923 115% 546 581 (6%)
EMEA ex. UK 1,270 865 47% 372 425 (12%)
APAC 1,815 786 131% 629 483 30%
By model:
Sports 1,479 691 114% 520 322 61%
GT 1,589 1,116 42% 546 307 78%
SUV 3,001 1,516 98% 815 1,171 (30%)
Other 11 28 (61%) 5 7 (29%)
Specials 98 43 128% 42 32 31%
--------------------------- ------ ------ --------- ------ ------ ---------
Note: Sports includes Vantage, GT includes DB11 and DBS, SUV
includes DBX and Other includes prior generation models such as
Rapide AMR
Total wholesales grew 82% to 6,178 units, driven by strong
demand across the portfolio and a return to a more normal operating
environment post COVID-19 restrictions on manufacturing in 2020 and
a successfully completed rebalancing of dealer inventory. Q4 was
the largest quarter and skewed towards December given supply chain
constraints. Signifying the start of our core electrification
journey, deliveries of the mild-hybrid DBX Straight-Six launched
seamlessly in China in Q4.
Geographically, both APAC and the Americas delivered
triple-digit growth over the prior year, up 131% and 115%
respectively, as SUV demand skewed towards these regions as
expected. Combined they now represent c.60% of total volumes.
The 98 Specials included10 Aston Martin Valkyrie programme
vehicles.
Revenue by Category
GBPm FY-21 FY-20 % change
-------- ------
Sale of vehicles 1,005.4 535.1 88%
Sale of parts 65.5 56.6 16%
Servicing of vehicles 10.6 6.6 61%
Brand and motorsport 13.8 13.5 2%
Total 1,095.3 611.8 79%
-------- ------
Revenue grew to GBP1.1bn (2020: GBP612m), driven mainly by
increased wholesales along with strong pricing dynamics. Sales of
parts and servicing increased as dealers returned to more normal
operations in most markets for the majority of the year - with the
prior year significantly impacted by COVID-related restrictions on
operations.
Pricing dynamics were strong, following the successful
rebalancing of dealer inventory completed in Q1, reflecting
significantly reduced customer and retail financing support. With
demand ahead of supply and positive geographic and product mix,
core ASP increased to GBP150k (2020: GBP136k). Total ASP of GBP162k
reflected the 98 Specials in the year compared with 43 in the prior
year (2020: GBP157k).
Summary income statement and analysis
GBPm FY-21 FY-20 Q4-21 Q4-20
-------- --------
Revenue 1,095.3 611.8 358.9 341.8
Cost of sales (751.6) (500.7) (237.1) (244.8)
Gross profit 343.7 111.1 121.8 97.0
Gross margin % 31.4% 18.2% 33.9% 28.4%
Operating expenses(1) (418.0) (336.0) (131.0) (106.7)
of which depreciation
& amortisation 212.2 154.8 74.8 57.2
Adjusted operating loss
(2) (74.3) (224.9) (9.2) (9.7)
Adjusting operating items (2.2) (98.0) 0.9 (84.1)
Operating loss (76.5) (322.9) (8.3) (93.8)
Net financing expense (137.3) (143.1) (16.9) (64.3)
of which adjusting financing
items 34.1 (68.6) 21.2 (68.6)
Loss before tax (213.8) (466.0) (25.2) (158.1)
Taxation 24.5 55.5 (7.5) 15.5
Loss for the period (189.3) (410.5) (32.7) (142.6)
Adjusted EBITDA (1,2) 137.9 (70.1) 65.6 47.5
Adjusted EBITDA margin 12.6% n.m. 18.3% 13.9%
Adjusted loss before tax
(1) (245.7) (299.4) (47.3) (5.4)
EPS (pence) (165.9) (543.0)
Adjusted EPS (pence) (2) (200.8) (369.9)
-------------------------------- -------- -------- -------- --------
1. Excludes adjusting items; 2. For definition of alternative
performance measures please see Appendix
Adjusted EBITDA was GBP138m, an improvement of GBP208m over the
prior year, with a margin of 13%. This included a GBP5m trade
debtor write down in Q2 related to legal action as announced on 22
June. The improved trading performance led to a significantly
reduced operating loss of GBP77m (2020: GBP323m loss) and
reflected:
- The flow through of revenue growth, a higher number of
Specials and manufacturing efficiency actions contributing to a
gross margin of 31% (up from 18% in 2020), offsetting the
non-repeat of c.GBP13m of furlough credits received in the prior
year;
- Increased brand investment as events such as Goodwood Festival
of Speed and Pebble Beach Concours d'Elegance resumed
post-pandemic, as well as events associated with F1(TM) and the
release of the James Bond film No Time To Die;
- Higher depreciation and amortisation (D&A) charges of
GBP212m, up GBP57m on the prior year, principally due to a full
year of DBX, the start of Aston Martin Valkyrie programme
deliveries and in Q4, accelerated depreciation of capitalised
development costs ahead of next generation sports cars in 2023.
2021 D&A was lower than previously guided (GBP225m-GBP235m) due
to re-timing of some Aston Martin Valkyrie programme cars; and
- A GBP14m benefit from exchange rate movements.
Adjusting operating items of GBP2m predominantly related to ERP
implementation costs (2020: GBP98m - predominantly impairment of
capitalised development costs).
Net adjusted financing costs of GBP171m were up from GBP75m in
the prior year reflecting a full year of the GBP1.1bn equivalent
US$ notes issued in October 2020 and the GBP70m equivalent notes
issued in February 2021. The charge also includes a GBP12m adverse
FX charge given the US$ denomination of the notes (2020 included a
GBP31m FX benefit). Adjusted loss before tax was GBP246m (2020:
GBP299m loss). The adjusting net finance credit of GBP34m related
to fair value movements of outstanding warrants (2020: adjusting
net finance charge of GBP69m), leading to a reduced loss before tax
of GBP214m (2020: GBP466m).
The tax credit on the adjusted loss before tax is GBP16m. The
effective tax rate at 6.6% is lower than the 19% standard UK tax
rate mainly due to movements in unprovided deferred tax related to
losses and a restriction on the amount of interest that can be
deducted for tax purposes. Tax on adjusting items was recognised as
appropriate and resulted in a net tax credit of GBP8m, giving an
overall tax credit of GBP25m.
The total share count at 31 December 2021 was 116 million
following the exercise of 1.5 million warrants linked to the second
lien notes. The weighted average number of shares in 2021 was 116
million. 4.8 million warrants remain outstanding and are
exercisable until December 2027. The Company is embedding the first
tranche of technology from Mercedes-Benz AG into its product
renewal and expansion pipeline. There are currently no plans to
issue additional shares to Mercedes-Benz AG until early 2023.
Cash flow and net debt
GBPm FY-21 FY-20 Q4-21 Q4-20
-------- -------
Cash generated/(used) from operating
activities 178.9 (198.6) 27.5 73.5
Cash used in investing activities
(excl. interest) (185.2) (260.7) (49.0) (56.6)
Net cash interest paid (116.9) (80.0) (62.6) (42.6)
--------------------------------------- -------- -------- ------- -------
Free Cash outflow (123.2) (539.3) (84.1) (25.7)
--------------------------------------- -------- -------- ------- -------
Cash inflow from financing activities
(excl. interest) 51.5 922.5 7.5 204.9
--------------------------------------- -------- -------- ------- -------
(Decrease)/increase in net cash (71.7) 383.2 (76.6) 179.2
--------------------------------------- -------- -------- ------- -------
Effect of exchange rates on cash
and cash equivalents 1.2 (1.7) 0.3 2.9
--------------------------------------- -------- -------- ------- -------
Cash balance 418.9 489.4 418.9 489.4
--------------------------------------- -------- -------- ------- -------
Net cash inflow from operating activities was GBP179m (2020:
GBP199m outflow) including a net working capital inflow of GBP56m.
The largest movement was receivables, a GBP75m increase, given the
phasing of Q4 deliveries due to supply chain constraints in the
quarter; this has substantially unwound in the first eight weeks of
2022. There was an offsetting GBP71m deposit inflow highlighting
strong demand for Aston Martin Valkyrie Spider and Valhalla and a
GBP53m payables inflow principally associated with future product
rollout plans. Inventories reflected the working capital benefits
of the manufacturing consolidations completed during the year,
GBP8m lower despite the step up for Aston Martin Valkyrie build and
the expanded product portfolio.
Capital expenditure was GBP185m, lower than the
c.GBP215m-GBP230m previously guided, as product development plans
mature, aligned to medium-term business plan objectives. Investment
was focused on DBX derivatives, the next generation of front-engine
vehicles due to launch in 2023 and Aston Martin Valkyrie programme
vehicles.
Free cashflow of GBP(123)m was significantly improved on the
prior year (2020: GBP(539)m) reflecting the improved trading
performance, demand for Specials, tight working capital control and
planned capital expenditure phasing.
Cash inflow from financing (excluding interest) of GBP52m
included gross proceeds from note issuance of GBP77m in February.
The net cash outflow of GBP72m resulted in a closing cash balance
of GBP419m at 31 December 2021 (31 December 2020: GBP489m).
GBPm 31 Dec-21 31 Dec-20
----------
Loan Notes(1) (1,074.9) (965.0)
Inventory financing (19.7) (38.2)
Bank loans and overdrafts (114.3) (119.8)
Lease liabilities (IFRS 16) (103.4) (103.0)
----------------------------------- ---------- ----------
Gross debt (1,312.3) (1,226.0)
----------------------------------- ---------- ----------
Cash balance 418.9 489.4
Cash not available for short-term
use 1.8 9.9
----------------------------------- ---------- ----------
Net debt (891.6) (726.7)
----------------------------------- ---------- ----------
1 US$ notes of GBP1.1bn equivalent (First lien of GBP840m at
10.5% interest maturing in November 2025; Second lien of GBP259m at
15.0% split interest (8.9% cash; 6.1% PIK) with detachable warrants
maturing in November 2026). These instruments carry no-call options
of three years for the second lien and four years for the first
lien.
Cash at 31 December 2021 of GBP419m included GBP77m gross
proceeds from the note issuance completed in February. Net debt at
31 December 2021 was GBP892m (31 December 2020: GBP727m) reflecting
the free cash outflow. With the exercise of some of the warrants
attached to the second lien notes, the Company received cash of
GBP15m in the year.
Gross debt includes GBP80m drawn down on the RCF, broadly
unchanged year-on-year (2020: GBP79m), reduced inventory financing
of GBP20m (2020: GBP38m) as the Company tightly managed working
capital requirements, and a GBP12m FX revaluation of the US$
denominated notes.
APPICES
Dealerships
31 Dec-21 31 Dec-20
----------
UK 22 22
Americas 44 43
EMEA ex. UK 53 52
APAC 49 50
Total 168 167
----------
Number of countries 56 54
--------------------- ---------- ----------
Alternative Performance Measure
GBPm FY-21 FY-20
--------
Loss before tax (213.8) (466.0)
Adjusting operating expense 2.2 98.0
Adjusting finance income (34.1) (6.9)
Adjusting finance expense - 75.5
Adjusted EBT (245.7) (299.4)
Adjusted finance (income) (2.3) (33.1)
Adjusted finance expense 173.7 107.6
Adjusted o perating loss (74.3) (224.9)
Reported depreciation 74.6 55.7
Reported amortisation 137.6 99.1
Adjusted EBITDA 137.9 (70.1)
--------
Alternative performance measures
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 operating loss 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 EBITDA margin is adjusted EBITDA (as defined above) divided by revenue
-- Adjusted EBT is the loss before tax and adjusting items as
shown in the Consolidated Income Statement
-- 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,
cash held not available for short-term use
-- Free cashflow is represented by cash (outflow)/inflow from
operating activities less the cash used in investing activities
(excluding interest received) plus interest paid in the year less
interest received.
Further details and definitions of adjusting items are contained
in note 5 of the Financial Statements.
2021 2020
----------------------------- -----------------------------
Adjusting Adjusting
Adjusted items* Total Adjusted items* Total
Notes GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------------- ----- -------- --------- -------- -------- --------- --------
Revenue 3 1,095.3 - 1,095.3 611.8 - 611.8
Cost of sales (751.6) - (751.6) (500.7) - (500.7)
=========================================== ===== ======== ========= ======== ======== ========= ========
Gross profit 343.7 - 343.7 111.1 - 111.1
Selling and distribution expenses (84.8) - (84.8) (79.6) - (79.6)
Administrative and other operating
expenses (333.2) (2.2) (335.4) (256.4) (98.0) (354.4)
=========================================== ===== ======== ========= ======== ======== ========= ========
Operating loss 4 (74.3) (2.2) (76.5) (224.9) (98.0) (322.9)
Finance income 6 2.3 34.1 36.4 33.1 6.9 40.0
Finance expense 7 (173.7) - (173.7) (107.6) (75.5) (183.1)
=========================================== ===== ======== ========= ======== ======== ========= ========
Loss before tax (245.7) 31.9 (213.8) (299.4) (166.6) (466.0)
Income tax credit 8 16.2 8.3 24.5 22.6 32.9 55.5
=========================================== ===== ======== ========= ======== ======== ========= ========
Loss for the year (229.5) 40.2 (189.3) (276.8) (133.7) (410.5)
=========================================== ===== ======== ========= ======== ======== ========= ========
(Loss)/profit attributable to:
Owners of the Group (191.6) (419.3)
Non-controlling interests 2.3 8.8
=========================================== ===== ======== ========= ======== ======== ========= ========
(189.3) (410.5)
=========================================== ===== ======== ========= ======== ======== ========= ========
Other comprehensive income
Items that will never be reclassified
to the Income Statement
Remeasurement of Defined Benefit
liability 3.8 (59.1)
Taxation on items that will never
be reclassified to the Income Statement 8 (1.0) 12.3
Effect of change in rate in taxation 8 6.0 -
Items that are or may be reclassified
to the Income Statement
Foreign currency translation differences 2.3 0.8
Fair value adjustment - cash flow
hedges (0.3) 6.6
Amounts reclassified to the Income
Statement - cash flow hedges (4.3) 9.7
Taxation on items that may be reclassified
to the Income Statement 8 1.2 (3.1)
=========================================== ===== ======== ========= ======== ======== ========= ========
Other comprehensive income/(loss)
for the year, net of income tax 7.7 (32.8)
=========================================== ===== ======== ========= ======== ======== ========= ========
Total comprehensive loss for the
year (181.6) (443.3)
=========================================== ===== ======== ========= ======== ======== ========= ========
Total comprehensive (loss)/income
for the year attributable to:
Owners of the Group (183.9) (452.1)
Non-controlling interests 2.3 8.8
=========================================== ===== ======== ========= ======== ======== ========= ========
(181.6) (443.3)
=========================================== ===== ======== ========= ======== ======== ========= ========
Earnings per ordinary share
Basic loss per share 9 (165.9p) (543.0p)
Diluted loss per share 9 (165.9p) (543.0p)
------------------------------------------- ----- -------- --------- -------- -------- --------- --------
All operations of the Group are continuing.
* Adjusting items are defined in note 2 with further detail shown in note 5.
Capital
Share Share Merger Redemption Capital Translation Hedge Retained Non-controlling Total
Capital Premium Reserve Reserve Reserve Reserve Reserves Earnings Interest Equity
Group GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----------------- ------- ------- ------- ---------- ------- ----------- -------- -------- --------------- -------
At 1 January 2021 11.5 1,108.2 144.0 9.3 6.6 0.4 10.9 (503.1) 16.3 804.1
================= ======= ======= ======= ========== ======= =========== ======== ======== =============== =======
Total
comprehensive
loss for the year
(Loss)/profit
for the year - - - - - - - (191.6) 2.3 (189.3)
Other
comprehensive
income
Foreign currency
translation
differences - - - - - 2.3 - - - 2.3
Fair value
movement
- cash flow
hedges - - - - - - (0.3) - - (0.3)
Amounts
reclassified
to the Income
Statement - cash
flow hedges - - - - - - (4.3) - - (4.3)
Remeasurement
of Defined
Benefit
liability - - - - - - - 3.8 - 3.8
Effect of change
in rate of
taxation
(note 8) - - - - - - (0.8) 6.8 - 6.0
Tax on other
comprehensive
income (note 8) - - - - - - 1.2 (1.0) - 0.2
================= ======= ======= ======= ========== ======= =========== ======== ======== =============== =======
Total other
comprehensive
income / (loss) - - - - - 2.3 (4.2) 9.6 - 7.7
================= ======= ======= ======= ========== ======= =========== ======== ======== =============== =======
Total
comprehensive
income / (loss)
for the year - - - - - 2.3 (4.2) (182.0) 2.3 (181.6)
================= ======= ======= ======= ========== ======= =========== ======== ======== =============== =======
Transactions with
owners, recorded
directly in
equity
Warrant options
exercised (note
11) 0.1 15.1 - - - - - 14.8 - 30.0
Credit for the
year under
equity
settled
share-based
payments - - - - - - - 3.1 3.1
Effect of change
in rate of
taxation
(note 8) - - - - - - - 4.7 - 4.7
Tax on items
credited
to equity (note
8) - - - - - - - 0.1 - 0.1
Reclassification
(note 11) - 0.1 (0.1) - - - - - - -
================= ======= ======= ======= ========== ======= =========== ======== ======== =============== =======
Total
transactions
with owners 0.1 15.2 (0.1) - - - - 22.7 - 37.9
================= ======= ======= ======= ========== ======= =========== ======== ======== =============== =======
At 31 December
2021 11.6 1,123.4 143.9 9.3 6.6 2.7 6.7 (662.4) 18.6 660.4
----------------- ------- ------- ------- ---------- ------- ----------- -------- -------- --------------- -------
Capital
Share Share Merger Redemption Capital Translation Hedge Retained Non-controlling Total
Capital Premium Reserve Reserve Reserve Reserve Reserves Earnings Interest Equity
Group GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
---------------- ------- ------- ------- ---------- ------- ----------- -------- -------- --------------- -------
At 1 January
2020 2.1 352.3 - - 6.6 (0.4) (2.3) (42.8) 14.1 329.6
================ ======= ======= ======= ========== ======= =========== ======== ======== =============== =======
Total
comprehensive
loss for the
year
(Loss)/profit
for the year - - - - - - - (419.3) 8.8 (410.5)
Other
comprehensive
income
Foreign currency
translation
differences - - - - - 0.8 - - - 0.8
Fair value
movement
- cash flow
hedges - - - - - - 6.6 - - 6.6
Amounts
reclassified
to the Income
Statement -
cash
flow hedges - - - - - - 9.7 - - 9.7
Remeasurement
of Defined
Benefit
liability - - - - - - - (59.1) - (59.1)
Tax on other
comprehensive
income - - - - - - (3.1) 12.3 - 9.2
================ ======= ======= ======= ========== ======= =========== ======== ======== =============== =======
Total other
comprehensive
income/(loss) - - - - - 0.8 13.2 (46.8) - (32.8)
================ ======= ======= ======= ========== ======= =========== ======== ======== =============== =======
Total
comprehensive
income/(loss)
for the year - - - - - 0.8 13.2 (466.1) 8.8 (443.3)
================ ======= ======= ======= ========== ======= =========== ======== ======== =============== =======
Transactions
with
owners, recorded
directly in
equity
Issue of
ordinary
shares (note
11) 18.7 755.9 144.0 - - - - - - 918.6
Capital
reduction (9.3) - - 9.3 - - - - - -
Credit for the
year under
equity
settled
share-based
payments - - - - - - - 4.2 - 4.2
Dividend paid
to
non-controlling
interest - - - - - - - - (6.6) (6.6)
Tax on items
credited
to equity (note
8) - - - - - - - 1.6 - 1.6
================ ======= ======= ======= ========== ======= =========== ======== ======== =============== =======
Total
transactions
with owners 9.4 755.9 144.0 9.3 - - - 5.8 (6.6) 917.8
================ ======= ======= ======= ========== ======= =========== ======== ======== =============== =======
At 31 December
2020 11.5 1,108.2 144.0 9.3 6.6 0.4 10.9 (503.1) 16.3 804.1
---------------- ------- ------- ------- ---------- ------- ----------- -------- -------- --------------- -------
31 December 31 December
2021 2020
Notes GBPm GBPm
------------------------------------------- ----- ----------- -----------
Non-current assets
Intangible assets 1,384.1 1,336.8
Property, plant and equipment 355.5 389.6
Right-of-use lease assets 76.0 71.4
Trade and other receivables 2.1 0.9
Other financial assets 0.5 0.1
Deferred tax asset 156.4 106.5
=========================================== ===== =========== ===========
1,974.6 1,905.3
=========================================== ===== =========== ===========
Current assets
Inventories 196.8 207.4
Trade and other receivables 243.4 177.9
Income tax receivable 1.5 0.2
Other financial assets 7.3 14.6
Cash and cash equivalents 418.9 489.4
=========================================== ===== =========== ===========
867.9 889.5
=========================================== ===== =========== ===========
Total assets 2,842.5 2,794.8
=========================================== ===== =========== ===========
Current liabilities
Borrowings 114.3 113.5
Trade and other payables 721.0 578.9
Income tax payable 5.5 1.2
Other financial liabilities 34.8 83.3
Lease liabilities 9.7 9.3
Provisions 19.9 22.1
=========================================== ===== =========== ===========
905.2 808.3
=========================================== ===== =========== ===========
Non-current liabilities
Borrowings 1,074.9 971.3
Trade and other payables 9.8 7.5
Lease liabilities 93.7 93.7
Provisions 19.0 16.8
Employee benefits 78.7 92.5
Deferred tax liabilities 0.8 0.6
=========================================== ===== =========== ===========
1,276.9 1,182.4
=========================================== ===== =========== ===========
Total liabilities 2,182.1 1,990.7
=========================================== ===== =========== ===========
Net assets 660.4 804.1
=========================================== ===== =========== ===========
Capital and reserves
Share capital 11 11.6 11.5
Share premium 1,123.4 1,108.2
Merger reserve 143.9 144.0
Capital redemption reserve 9.3 9.3
Capital reserve 6.6 6.6
Translation reserve 2.7 0.4
Hedge reserves 6.7 10.9
Retained earnings (662.4) (503.1)
=========================================== ===== =========== ===========
Equity attributable to owners of the group 641.8 787.8
Non-controlling interests 18.6 16.3
=========================================== ===== =========== ===========
Total shareholders' equity 660.4 804.1
------------------------------------------- ----- ----------- -----------
The Financial Statements were approved by the Board of Directors
on 22 February 2022 and were signed on its behalf by
TOBIAS MOERS KENNETH GREGOR
CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
COMPANY NUMBER: 11488166
2021 2020
Notes GBPm GBPm
------------------------------------------------------ ----- ------- ---------
Operating activities
Loss for the year (189.3) (410.5)
Adjustments to reconcile loss for the year to net
cash inflow from operating activities
Tax credit on operations 8 (24.5) (55.5)
Net finance costs 137.3 143.1
Other non-cash movements (0.1) 2.2
Depreciation and impairment of property, plant and
equipment 4 65.3 50.8
Depreciation and impairment of right-of-use lease
assets 4 9.3 14.8
Amortisation and impairment of intangible assets 4 137.6 168.5
Difference between pension contributions paid and
amounts recognised in Income Statement (11.4) (4.1)
Decrease/(increase) in inventories 7.7 (4.8)
(Increase)/decrease in trade and other receivables (75.4) 67.4
Increase/(decrease) in trade and other payables 52.8 (118.6)
Increase/(decrease) in advances and customer deposits 70.7 (52.8)
Movement in provisions (0.2) 11.0
====================================================== ===== ======= =========
Cash generated from/(used in) operations 179.8 (188.5)
Decrease/(increase) in cash held not available for
short term use 8.1 (0.9)
Income taxes paid 8 (9.0) (9.2)
====================================================== ===== ======= =========
Net cash inflow/(outflow) from operating activities 178.9 (198.6)
====================================================== ===== ======= =========
Cash flows from investing activities
Interest received 6 1.1 2.3
Increase in loan assets (1.4) -
Decrease in loan assets 0.9 -
Payments to acquire property, plant and equipment (40.7) (81.0)
Payments to acquire intangible assets (144.0) (179.7)
====================================================== ===== ======= =========
Net cash used in investing activities (184.1) (258.4)
====================================================== ===== ======= =========
Cash flows from financing activities
Interest paid (118.0) (82.3)
Proceeds from equity share issue - 812.8
Proceeds from issue of equity warrants 15.3 34.6
Proceeds from financial instrument utilised as part
of refinancing transactions - 6.9
Principal element of lease payments (9.9) (12.2)
Repayment of existing borrowings (37.3) (1,092.3)
Proceeds from inventory repurchase arrangement 19.0 76.8
Repayment of inventory repurchase arrangement (40.0) (80.0)
Proceeds from new borrowings 108.5 1,252.7
Transaction fees paid on issuance of shares (1.3) (34.9)
Transaction fees paid on financing activities (2.8) (41.9)
====================================================== ===== ======= =========
Net cash (outflow)/inflow from financing activities (66.5) 840.2
====================================================== ===== ======= =========
Net (decrease)/increase in cash and cash equivalents (71.7) 383.2
Cash and cash equivalents at the beginning of the
year 489.4 107.9
Effect of exchange rates on cash and cash equivalents 1.2 (1.7)
====================================================== ===== ======= =========
Cash and cash equivalents at the end of the year 418.9 489.4
------------------------------------------------------ ----- ------- ---------
1 BASIS OF ACCOUNTING
Aston Martin Lagonda Global Holdings plc (the "Company") is a
company incorporated in England and Wales and domiciled in the UK.
The Group Financial Statements consolidate those of the Company and
its subsidiaries (together referred to as the "Group").
The Group Financial Statements have been prepared and approved
by the Directors in accordance with UK adopted international
accounting standards.
The Group Financial Statements have been prepared under the
historical cost convention except where the measurement of balances
at fair value is required as explained below. The Financial
Statements are prepared in millions to one decimal place, and in
sterling which is the Company's functional currency.
The financial information set out does not constitute the
Company's financial statements for the years ended 31 December 2021
or 2020 but is derived from those financial statements. Financial
statements for 2020 have been delivered to the registrar of
companies, and those for 2021 will be delivered in due course. The
auditors have reported on those accounts. Their reports for both
years ended 31 December 2021 and 31 December 2020 were not
qualified. Their reports did not contain a statement under Section
498(2) or (3) of the Companies Act 2006.
CLIMATE CHANGE
In preparing the Consolidated Financial Statements management
has considered the impact of climate change, particularly in the
context of the disclosures included in the Strategic Report this
year and the new sustainability goals including the stated net zero
targets. These considerations did not have a material impact on the
financial reporting judgements and estimates, consistent with the
assessment that climate change is not expected to have a
significant impact on the Group's going concern assessment to June
2023 nor the viability of the Group over the next five years. The
following specific points were considered:
-- The Group has a Strategic co-operation agreement with
Mercedes Benz AG. The agreement provides the Company with access to
a wide range of world-class technologies for the next generation of
luxury vehicles which are planned to be launched through to 2027,
in particular, powertrain architecture for conventional, hybrid and
electric vehicles as well as future electric/electronic
architecture.
-- The Group continues to invest in onsite renewable energy
generation solutions for our facilities and the use of sustainable
materials within production and the required capital investment is
included in our five year forecasts to enable us to meet our target
for net-zero manufacturing facilities by 2030.
-- Management has considered the impact of climate change on a
number of key estimates within the financial statements, including
the estimates of future cash flows used in impairment assessments
of the carrying value of non-current assets (such as capitalised
development cost intangible assets) and the estimates of future
profitability used in our assessment of the recoverability of
deferred tax assets in the UK.
GOING CONCERN
The Group meets its day-to-day working capital requirements and
medium term funding requirements through a mixture of $1,184.0m of
First Lien notes at 10.5% which mature in November 2025, $335.0m of
Second Lien split coupon notes at 15% per annum (8.89 % cash and
6.11% PIK) which mature in November 2026, a revolving credit
facility (GBP90.6m) which matures August 2025, facilities to
finance inventory, a bilateral RCF agreement and a wholesale
vehicle financing facility. Under the RCF the Group is required to
comply with a liquidity covenant until May 2022 and a leverage
covenant thereafter tested quarterly from June 2022.
The Directors have developed trading and cash flow forecasts for
the period from the date of approval of these Financial Statements
through 30 June 2023 (the going concern review period). These
forecasts show that the Group has sufficient financial resources to
meet its obligations as they fall due and to comply with covenants
for the going concern review period.
The forecasts reflect our strategy of rebalancing supply and
demand and the decisive actions taken to improve cost efficiency,
in alignment with the ultra-luxury performance-oriented strategy.
The forecasts include the costs of the Group's environmental,
social and governance ("ESG") commitments and make assumptions in
respect of future market conditions and, in particular, wholesale
volumes, average selling price, the launch of new models, and
future operating costs. The nature of the Group's business is such
that there can be variation in the timing of cash flows around the
development and launch of new models. In addition, the availability
of funds provided through the vehicle wholesale finance facility
changes as the availability of credit insurance and sales volumes
vary, in total and seasonally. The forecasts take into account
these factors to the extent which the Directors consider them to
represent their best estimate of the future based on the
information that is available to them at the time of approval of
these Financial Statements.
The Directors have considered a severe but plausible downside
scenario that includes considering the impact of a 25% reduction in
DBX volumes from forecast levels and operating costs higher than
the base plan.
The Group plans to make continued investment for growth in the
period and, accordingly, funds generated through operations are
expected to be reinvested in the business mainly through new model
development and other capital expenditure. To a certain extent such
expenditure is discretionary and, in the event of risks occurring
which could have a particularly severe effect on the Group, as
identified in the severe but plausible downside scenario, actions
such as constraining capital spending, working capital
improvements, reduction in marketing expenditure and the
continuation of strict and immediate expense control would be taken
to safeguard the Group's financial position.
1 BASIS OF ACCOUNTING
GOING CONCERN CONTINUED
In addition, we also considered the circumstances which would be
needed to exhaust the Group's liquidity over the assessment period,
a reverse stress test. This would indicate that vehicle sales would
need to reduce by 40% from forecast levels without any of the above
mitigations to result in having no liquidity. The likelihood of
these circumstances occurring is considered remote both in terms of
the magnitude of the reduction and that over such a long period,
management could take substantial mitigating actions, such as
reducing capital spending to preserve liquidity.
Accordingly, after considering the forecasts, appropriate
sensitivities, current trading and available facilities, the
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future and to comply with its financial covenants therefore the
Directors continue to adopt the going concern basis in preparing
the Financial Statements.
2 ACCOUNTING POLICIES
ADJUSTING ITEMS
An adjusting item is disclosed separately in the Consolidated
Statement of Comprehensive Income where the quantum, nature or
volatility of such items would otherwise distort the underlying
trading performance of the Group including where they are not
expected to repeat in future periods. The tax effect is also
included.
Details in respect of adjusting items recognised in the current
and prior year are set out in note 5 in the Financial
Statements.
3 SEGMENTAL REPORTING
Operating segments are defined as components of the Group about
which separate financial information is available and is evaluated
regularly by the chief operating decision-maker in assessing
performance. The Group has only one operating segment, the
automotive segment, and therefore no separate segmental report is
disclosed. The automotive segment includes all activities relating
to design, development, manufacture and marketing of vehicles
including consulting services; as well as the sale of parts,
servicing and automotive brand activities from which the Group
derives its revenues.
2021 2020
Revenue GBPm GBPm
---------------------- ------- -----
Analysis by category
Sale of vehicles 1,005.4 535.1
Sale of parts 65.5 56.6
Servicing of vehicles 10.6 6.6
Brands and motorsport 13.8 13.5
====================== ======= =====
1,095.3 611.8
---------------------- ------- -----
2021 2020
Revenue GBPm GBPm
--------------------------------------- ------- -----
Analysis by geographic location
United Kingdom 231.3 106.0
The Americas 302.7 162.5
Rest of Europe, Middle East and Africa 233.8 184.9
Asia Pacific 327.5 158.4
======================================= ======= =====
1,095.3 611.8
--------------------------------------- ------- -----
4 OPERATING LOSS
The Group's operating loss is stated after
charging/(crediting):
2021 2020
GBPm GBPm
------------------------------------------------------------------------ ----- ------
Depreciation and impairment of property, plant and
equipment 65.0 52.5
Depreciation released from/(absorbed into) inventory
under standard costing 0.3 (1.7)
Depreciation and impairment of right-of-use lease
assets 9.3 14.8
Amortisation and impairment of intangible assets 135.0 168.8
Amortisation released from/(absorbed into) inventory
under standard costing 2.6 (0.3)
======================================================================== ===== ======
Depreciation, amortisation and impairment charges
included in administrative and other operating expenses 212.2 234.1
Increase in trade receivable loss allowance - administrative
and other operating expenses 3.1 1.5
Net foreign currency differences 11.2 (15.9)
Cost of inventories recognised as an expense 641.4 372.7
Write-down of inventories to net realisable value 0.2 13.5
(Decrease)/increase in fair value of other derivative
contracts (0.7) 1.1
Expenditure-related grant income* - (12.5)
Lease payments (gross of sub-lease receipts)
Plant, machinery and IT equipment** 0.3 0.6
Sub-lease receipts Land and buildings (0.6) (0.7)
Auditor's remuneration:
Audit of these Financial Statements 0.3 0.3
Audit of Financial Statements of subsidiaries
pursuant to legislation 0.3 0.3
Audit-related assurance 0.1 0.1
Services related to corporate finance
transactions 0.1 0.4
Other non-audit services - 1.0
Research and development expenditure recognised as
an expense 13.0 4.5
------------------------------------------------------------------------ ----- ------
* Government grant income has been offset against the qualifying
employee expenditure within the Consolidated Income Statement.
Grant income in 2020 represents government wage subsidies paid
through the Job Retention Scheme. There are no unfulfilled
conditions outstanding and the grant has been recognised in
full.
** Election taken by the Group to not recognise right-of-use
lease assets and equivalent lease liabilities for short term and
low value leases.
2021 2020
GBPm GBPm
------------------------------------------------- ------- -------
Total research and development expenditure 191.2 182.1
Capitalised research and development expenditure (178.2) (177.6)
================================================= ======= =======
Research and development expenditure recognised
as an expense 13.0 4.5
------------------------------------------------- ------- -------
5 ADJUSTING ITEMS
2021 2020
GBPm GBPm
------------------------------------------------------------- ----- -------
Adjusting operating expenses:
Impairment of assets:
Development costs(6) - (69.4)
Plant, machinery, fixtures and fittings(7) - (3.8)
Tooling(6) - (3.3)
Right-of-use lease assets(7) - (2.8)
============================================================= ===== =======
- (79.3)
Restructuring:
Employee restructuring costs(1) 2.4 (12.4)
Motorsport exit costs(8) - (6.2)
Director settlement arrangements and incentive payments(9) - (2.7)
Lease early exit costs(2) (0.6) -
ERP implementation costs(3) (4.0) -
Initial Public Offering costs:
Staff incentives(10) - 2.6
============================================================= ===== =======
(2.2) (98.0)
============================================================= ===== =======
Adjusting finance income:
Foreign exchange gain on financial instrument utilised
during refinance transactions(11) - 6.9
Gain on financial instruments recognised at fair
value through Income Statement(4) 34.1
Adjusting finance expenses:
Premium paid on the early redemption of Senior Secured
Notes(11) - (21.4)
Write-off of capitalised borrowing fees upon early
settlement of Senior Secured Notes(11) - (7.6)
Loss on financial instruments recognised at fair
value through Income Statement(4) - (45.3)
Professional fees incurred on refinancing expensed
directly to the Income Statement(12) - (1.2)
============================================================= ===== =======
34.1 (68.6)
============================================================= ===== =======
Total adjusting items before tax 31.9 (166.6)
Tax (charge)/credit on adjusting items(5) (8.1) 32.9
Tax credit due to remeasurement of deferred tax on
previously classified adjusting items(5) 16.4 -
============================================================= ===== =======
Adjusting items after tax 40.2 (133.7)
------------------------------------------------------------- ----- -------
Summary of 2021 adjusting items
1. During 2020 the Group provided GBP12.1m for restructuring
costs associated with a reduction in employee numbers to reflect
the lower than originally planned production volumes. In addition
to this, the Group incurred an additional GBP0.3m of phase one
restructuring costs in 2020. A revision to the estimated total
costs resulting from greater natural attrition has resulted in
GBP2.4m of the existing provision being released to the Income
Statement during the year ended 31 December 2021. The cash impact
of the restructuring cost is realised in line with the movement in
the provision. The credit to the Consolidated Income Statement in
2021 has no cash impact.
2. In the year ended 31 December 2021 the Group continued to
rationalise its geographical footprint. The Group incurred GBP0.6m
of costs associated with surrendering a lease 30 months early.
These costs have been disclosed consistent with prior periods. The
rationalisation of the geographical footprint is now complete. The
associated cash outflow related to this adjustment will be realised
during 2022 and 2023 in line with the exit agreement.
3. During the year ended 31 December 2021 the Group commenced a
digital transformation strategy project which includes the
implementation of a cloud-based ERP for which the Group will not
own any Intellectual Property. This project will continue into
2022. GBP4.0m of costs have been incurred in the period under the
service contract and expensed to the Income Statement. Due to the
infrequent recurrence of such costs and the expected quantum during
the implementation phase, these have been separately presented as
adjusting. The cash impact of this item is a working capital
outflow at the time of invoice payment.
4. The Group issued second lien Senior Secured Notes ("SSNs")
during the year ended 31 December 2020 which included detachable
warrants classified as a derivative option liability initially
valued at GBP34.6m. The movement in fair value of the derivative
option liability from initial pricing during October 2020 when the
SSNs were marketed to the 31 December 2020 resulted in a loss of
GBP45.3m being recognised in the Income Statement. The movement in
fair value of the liability in the year ended 31 December 2021
resulted in a gain of GBP34.1m being recognised in the Income
Statement. There is no cash impact of this adjustment.
5. In 2021, a total tax credit of GBP8.3m has been recognised as
an adjusting item. The effective tax rate associated with the tax
credit on adjusting items in the period is not in line with the
standard rate of income tax for the Group at 19% (2020: 19%). This
is due to a GBP16.4m tax credit attributable to deferred tax
balances on items treated as adjusting in previous years being
re-measured at 25%.
Summary of 2020 adjusting items
6. On 27 October the Group announced an expanded and enhanced
technology agreement with Mercedes-Benz AG, giving access to
powertrain architecture (for conventional, hybrid and electric
vehicles) and future oriented electric/electronic architecture for
all product launches through to 2027. Following incorporation of
the benefits of this enhanced partnership on the Group's business
plan, and other cycle plan updates following the strategic review
of the business plan, the carrying value of capitalised tooling and
intangible development costs have been impaired by GBP72.7m to
reflect the change in future vehicle powertrains and electronic
architecture. There was no cash impact of this item.
7. In 2020 the Group commenced a rationalisation exercise to
reduce its geographical footprint. This resulted in a GBP2.8m
right-of-use lease asset and GBP3.8m plant and machinery impairment
charge triggered by the conclusion of activity at a number of the
Group's leased sites. There was no cash impact of this item.
8. In December 2020 Aston Martin announced that, following
conclusion of the 2020 FIA World Endurance Championship, it would
cease operation of a factory GTE team into 2021 incurring
termination costs of GBP6.2m. The cash outflow associated with this
item is realised during 2022-2024 in line with termination
agreement.
5 ADJUSTING ITEMS CONTINUED
Summary of 2020 adjusting items continued
9. It was announced on 27 February 2020 that Mark Wilson would
step down as CFO and as an Executive Director of the Group on 30
April 2020. Subsequent to this, on 25 May 2020, Dr Andrew Palmer
stepped down as CEO and as an Executive Director of the Group.
Tobias Moers joined the Group as CEO and Executive Director on 1
August 2020. Amounts due as a result of these changes were GBP2.7m.
The associated cash outflow took place during 2020 and 2021 in line
with the relevant individuals' agreement.
10. In the year ended 31 December 2020 a Legacy Long term
Incentive Plan ("LTIP") charge of GBP3.8m was recognised within
'Staff incentives'. As an offset to this due to the reduced
performance of the Group, the remaining Initial Public Offering
("IPO") bonus held for management was no longer forecast to be
paid. This resulted in GBP6.4m being credited back to the
Consolidated Income Statement.
11. On 27 October the Group announced the successful arrangement
of a new financing package including the issuance of $1,085.5m of
US dollar First Lien notes and $335m of US dollar Second Lien split
coupon notes. Proceeds from this financing package were used to
redeem the existing Senior Secured Notes ("SSNs") in full ahead of
their April 2022 maturity date. In redeeming the existing SSNs
early the Group incurred an early redemption premium of GBP21.4m.
Professional fees capitalised against the existing SSNs of GBP7.6m
were written off to the Income Statement upon redemption.
Upon the successful arrangement of the new finance package, the
Group entered into a conditional forward currency contract to hedge
the net US dollar cash receipt into sterling upon completion of the
transaction. Movement in the US dollar to sterling exchange rate
between the arrangement date and transaction date resulted in the
recognition of a GBP6.9m currency gain in the Income Statement. The
cash effect of these items was realised at the point in time of the
transaction.
12. Fees incurred on raising the second lien loan notes in
December 2020 were allocated between the debt and warrant elements
on a proportional basis. The fees allocated to the warrants have
been written off in the period they were incurred. The cash impact
of this item was realised at the transaction date upon payment of
the fees.
6 FINANCE INCOME
2021 2020
GBPm GBPm
------------------------------------------------------- ----- -----
Bank deposit and other interest income 2.3 2.3
Foreign exchange gain on borrowings not designated
as part of a hedging relationship - 30.8
======================================================= ===== =====
Finance income before adjusting items 2.3 33.1
Adjusting finance income items:
Foreign exchange gain on financial instrument utilised
during refinance transactions - 6.9
Gain on financial instruments recognised at fair value
through Income Statement 34.1 -
======================================================= ===== =====
Total Adjusting finance income 34.1 6.9
======================================================= ===== =====
Total finance income 36.4 40.0
------------------------------------------------------- ----- -----
7 FINANCE EXPENSE
2021 2020
GBPm GBPm
---------------------------------------------------------- ----- -----
Bank loans, overdrafts and secured notes 151.3 98.4
Foreign exchange loss on borrowings not designated
as part of a hedging relationship 12.4 -
Interest on lease liabilities 3.9 4.1
Net interest expense on the net Defined Benefit liability 1.3 0.7
Hedge ineffectiveness - 2.5
Interest on contract liabilities held 4.8 1.9
========================================================== ===== =====
Finance expense before adjusting items 173.7 107.6
Adjusting finance expense items:
Premium paid on the early redemption of Senior Secured
Notes - 21.4
Write-off of capitalised borrowing fees upon early
settlement of Senior Secured Notes - 7.6
Loss on financial instruments recognised at fair value
through Income Statement - 45.3
Professional fees incurred on refinancing expensed
directly to the Income Statement - 1.2
========================================================== ===== =====
Total Adjusting finance expense - 75.5
========================================================== ===== =====
Total finance expense 173.7 183.1
---------------------------------------------------------- ----- -----
8 TAXATION
2021 2020
GBPm GBPm
------------------------------------------------------ ------ ------
UK corporation tax on profits 0.5 (0.6)
Overseas tax 10.8 4.7
Prior period movement - (5.0)
====================================================== ====== ======
Total current income tax charge/(credit) 11.3 (0.9)
====================================================== ====== ======
Deferred tax credit
Origination and reversal of temporary differences (16.1) (64.4)
Prior period movement (2.4) 8.5
Effect of change in deferred tax rate (17.3) 1.3
====================================================== ====== ======
Total deferred tax credit (35.8) (54.6)
====================================================== ====== ======
Total income tax credit in the Income Statement (24.5) (55.5)
====================================================== ====== ======
Tax relating to items credited to other comprehensive
income
Deferred tax
Actuarial movement on Defined Benefit pension plan 1.0 (11.2)
Fair value adjustment on cash flow hedges (1.2) 0.9
Effect of change in deferred tax rate (6.0) (1.1)
Current tax
Fair value adjustment on cash flow hedges - 2.2
====================================================== ====== ======
(6.2) (9.2)
====================================================== ====== ======
Tax relating to items charged in equity - deferred
tax
Effect of change in deferred tax rate (4.8) (1.6)
------------------------------------------------------ ------ ------
(a) Reconciliation of the total income tax credit
The tax credit in the Consolidated Statement of Comprehensive
Income for the year is lower (2020: lower) than the standard rate
of corporation tax in the UK of 19.0% (2020: 19.0%). The
differences are reconciled below:
2021 2020
GBPm GBPm
---------------------------------------------------------- ------- -------
Loss from operations before taxation (213.8) (466.0)
========================================================== ======= =======
Loss on operations before taxation multiplied by standard
rate of corporation tax in the UK of 19.0% (2020:
19.0%) (40.6) (88.5)
========================================================== ======= =======
Difference to total income tax credit due to effects
of:
Expenses not deductible for tax purposes 0.5 0.2
Movement in unprovided deferred tax 15.0 26.1
Derecognition of deferred tax assets 17.7 -
Irrecoverable overseas withholding taxes 1.4 0.3
Adjustments in respect of prior periods (2.4) 3.5
Effect of change in deferred tax rate (17.3) 1.3
Difference in UK tax rates (4.8) -
Difference in overseas tax rates 2.9 0.6
Other 3.1 1.0
========================================================== ======= =======
Total income tax credit (24.5) (55.5)
---------------------------------------------------------- ------- -------
(b) Tax paid
Total net tax paid during the year of GBP9.0m (2020:
GBP9.2m).
(c) Factors affecting future tax charges
The tax rate applied to UK profits is impacted by the UK Budget
2021 announcement to increase the UK's main rate of corporation tax
from 19% to 25%, effective from 1 April 2023.
9 EARNINGS PER ORDINARY SHARE
Basic earnings per ordinary share is calculated by dividing the
loss for the year available for equity holders by the weighted
average number of ordinary shares in issue during the year. As part
of the Strategic Cooperation Agreement entered into in December
2020 with Mercedes-Benz AG, shares were issued for access to
tranche 1 technology. The Agreement includes an obligation to issue
further shares for access to further technology in a future period.
Warrants to acquire shares in the Company were issued in December
2020 as part of the refinancing of the Group. A total of 6,332,393
ordinary shares could be issued to warrantholders who can exercise
their rights from 1 July 2021 through to 7 December 2027. During
the period a total of 1,525,926 ordinary shares were issued (note
11) resulting in 4,806,467 unexercised options. Both the future
MBAG tranches and the future issuance of warrants may have a
dilutive effect in future periods if the group generates a
profit.
Diluted earnings per ordinary share is calculated by adjusting
basic earnings per ordinary share to reflect the notional exercise
of the weighted average number of dilutive ordinary share awards
outstanding during the year including the future technology shares
and warrants detailed above. The weighted average number of
dilutive ordinary share awards outstanding during the year are
excluded when including them would be anti-dilutive to the earnings
per share value.
Continuing and total operations 2021 2020
-------------------------------------------------------------- -------- --------
Basic earnings per ordinary share
Loss available for equity holders (GBPm) (191.6) (419.3)
Basic weighted average number of ordinary shares (million)(1) 115.5 77.2
Basic loss per ordinary share (pence) (165.9p) (543.0p)
============================================================== ======== ========
Diluted earnings per ordinary share
Loss available for equity holders (GBPm) (191.6) (419.3)
Diluted weighted average number of ordinary shares
(million)(1) 115.5 77.2
Diluted loss per ordinary share (pence) (165.9p) (543.0p)
-------------------------------------------------------------- -------- --------
2021 2020
Number Number
----------------------------------------------------------- ------- -------
Diluted weighted average number of ordinary shares
is calculated as:
Basic weighted average number of ordinary shares (million) 115.5 77.2
Adjustments for calculation of diluted earnings per
share:(1)
Long term incentive plans - -
Issue of unexercised ordinary share warrants - -
Issue of tranche 2 shares - -
=========================================================== ======= =======
Weighted average number of diluted ordinary shares
(million) 115.5 77.2
----------------------------------------------------------- ------- -------
1. The number of ordinary shares issued as part of the long term
incentive plans, and the potential number of ordinary shares issued
as part of the 2020 issue of share warrants, and the future
issuance of shares for access to Mercedes-Benz AG technology have
been excluded from the weighted average number of diluted ordinary
shares as including them is anti-dilutive to diluted earnings per
share.
Adjusted earnings per share is disclosed in note 13 to show
performance undistorted by adjusting items and to give a more
meaningful comparison of the Group's performance.
10 NET DEBT
The Group defines Net Debt as current and non-current borrowings
in addition to inventory repurchase arrangements and lease
liabilities, less cash and cash equivalents including cash held not
available for short term use.
2021 2020
GBPm GBPm
--------------------------------------------------------- --------- ---------
Cash and cash equivalents 418.9 489.4
Cash held not available for short term use 1.8 9.9
Inventory repurchase arrangement (19.7) (38.2)
Lease liabilities - current (9.7) (9.3)
Lease liabilities - non-current (93.7) (93.7)
Loans and other borrowings - current (114.3) (113.5)
Loans and other borrowings - non-current (1,074.9) (971.3)
========================================================= ========= =========
Net debt (891.6) (726.7)
========================================================= ========= =========
Movement in net debt
Net (decrease)/increase in cash and cash equivalents (70.5) 381.5
Add back cash flows in respect of other components of
net debt:
New borrowings (108.5) (1,252.7)
Proceeds from inventory repurchase arrangement (19.0) (76.8)
Repayment of existing borrowings 37.3 1,092.3
Repayment of inventory repurchase arrangement 40.0 80.0
Lease liability payments 9.9 12.2
Movement in cash held not available for short term use (8.1) 0.9
Transaction fees 1.9 41.9
========================================================= ========= =========
(Increase)/decrease in net debt arising from cash flows (117.0) 279.3
Non-cash movements:
Foreign exchange (loss)/gain on secured loan (12.4) 30.8
Interest added to debt (13.4) (8.6)
Premium on the early redemption of SSNs - (21.4)
Borrowing fee amortisation (7.5) (13.0)
Lease liability interest charge (3.9) (4.1)
Lease modifications 0.4 (1.7)
New leases (11.5) 2.6
Unpaid transaction fees - 0.8
Foreign exchange gain and other movements 0.4 (3.8)
========================================================= ========= =========
(Increase)/decrease in net debt (164.9) 260.9
Net debt at beginning of the year (726.7) (987.6)
========================================================= ========= =========
Net debt at the end of the year (891.6) (726.7)
--------------------------------------------------------- --------- ---------
11 SHARE CAPITAL AND OTHER RESERVES
Capital
Number Nominal Share Share Merger Redemption
Allotted, called up and of Value Capital Premium Reserve Reserve
fully paid Shares GBP GBPm GBPm GBPm GBPm
------------------------------- --------------- ------------- -------- -------- -------- -----------
Opening balance at 1 January
2020 228,002,890 0.009039687 2.1 352.3 - -
Private placing(1) 76,000,000 0.009039687 0.7 170.3 - -
Rights issue(2) 1,216,011,560 0.009039687 11.0 353.7 - -
Non-pre-emptive placing
and retail offer(3) 304,000,000 0.009039687 2.7 - 149.4 -
Placing Shares(4) 250,000,000 0.009039687 2.3 122.7 - -
Tranche 1 Consideration
Shares(5) 224,657,287 0.009039687 2.0 140.3 - -
Issue of new shares(6) 3 0.009039687 - - - -
Transaction costs arising
on the issuance of ordinary
shares - - - (31.1) (5.4) -
=============================== =============== ============= ======== ======== ======== ===========
2,298,671,740 0.009039687 20.8 1,108.2 144.0 -
Share split - original
shares(7) 2,298,671,740 0.005000000 11.5 - - -
Share split - deferred
shares(7) 2,298,671,740 0.004039687 9.3 - - -
Cancellation of deferred
shares(7) (2,298,671,740) (0.004039687) (9.3) - - 9.3
=============================== =============== ============= ======== ======== ======== ===========
2,298,671,740 0.005000000 11.5 1,108.2 144.0 9.3
Consolidation of shares(7) (2,183,738,153) - - - - -
------------------------------- --------------- ------------- -------- -------- -------- -----------
Balance as at 31 December
2020 and 1 January 2021 114,933,587 0.100000000 11.5 1,108.2 144.0 9.3
Exercise of warrant options(8) 1,525,926 0.100000000 0.1 15.1 - -
Transfer between reserves - - - 0.1 (0.1) -
Closing balance at 31 December
2021 116,459,513 0.100000000 11.6 1,123.4 143.9 9.3
------------------------------- --------------- ------------- -------- -------- -------- -----------
1. On 31 March 2020 the Company issued 76.0m ordinary shares by
way of a private placing. The shares were issued at 225p raising
gross proceeds of GBP171.0m, with GBP0.7m recognised as share
capital and the remaining GBP170.3m recognised as share
premium.
2. On 1 April 2020 the Company issued 1,216.0m ordinary shares
by way of a rights issue. The shares were issued at 30p raising
gross proceeds of GBP364.7m, with GBP11.0m recognised as share
capital and the remaining GBP353.7m recognised as share premium.
Due to the shares being issued at substantially below market price,
a bonus issue is deemed to have taken place. A total of 642.4m
shares issued were considered bonus shares. The weighted average
shares used to calculate Earnings Per Share (see note 9) has been
adjusted accordingly.
3. On 26 June 2020 the Company issued 304.0m ordinary shares
through a non-pre-emptive placing and retail offer. The shares were
issued at 50p raising gross proceeds of GBP152.1m, with GBP2.7m
recognised as share capital and the remaining GBP149.4m recognised
as merger reserve. The merger reserve is used where more than 90%
of the shares in a subsidiary are acquired and the consideration
includes the issue of new shares by the Company, thereby attracting
merger relief under the Companies Act 2006.
4. On 7 December 2020 the Company issued 250.0m ordinary shares
by way of a placing. The shares were issued at 50p raising gross
proceeds of GBP125.0m, with GBP2.3m recognised as share capital and
the remaining GBP122.7m recognised as share premium.
5. On 7 December 2020 the Company issued 224.7m ordinary shares
by way of Tranche 1 Consideration shares. The shares were issued at
63.34p in reflection of the fair value of access to technology
assets acquired, with GBP2.0m recognised as share capital and the
remaining GBP140.3m recognised as share premium.
6. On 14 December 2020 the Company issued 3 ordinary shares. The
shares were issued at 81.65p raising gross proceeds of GBP2.45. The
shares were issued to facilitate the share consolidation in
sub-note 7 below.
7. On 14 December 2020 the Company underwent a capital
reorganisation. Each ordinary 0.9p share was split into one
ordinary 0.5p share and one deferred 0.4p share. The deferred
shares were repurchased by the Company for consideration of GBP1.
The deferred shares were subsequently cancelled by the Company
resulting in a movement from share capital into the Capital
Redemption Reserve of GBP9.3m. Each holder of ordinary shares was
entitled to 1 new ordinary share of 10p in respect of 20 ordinary
0.5p shares held.
8. On 15 July 2021 945,131 ordinary shares in the Company were
issued to satisfy the redemption of 18,902,665 warrant options.
GBP9.5m of cash was received for the shares. On 22 July 2021
330,795 ordinary shares in the Company were issued to satisfy the
redemption of 6,615,932 warrant options. GBP3.3m of cash was
received for the shares. On 11 December 2021 250,000 ordinary
shares in the Company were issued to satisfy the redemption of
5,000,003 warrant options. GBP2.5m of cash was received for the
shares. Upon issuance of the shares the corresponding derivative
option liability is extinguished resulting in a total credit to
Retained Earnings during the year ended 31 December 2021 of
GBP14.8m.
12 POST BALANCE SHEET EVENTS
On 31 January 2022, the Defined Benefit pension scheme operated
by the Group was closed to future accrual. All active scheme
participants have become deferred members. A curtailment loss of
c.GBP3m and other associated closure costs of c.GBP11m are expected
to be recognised by the Group during 2022.
13 ALTERNATIVE PERFORMANCE MEASURES
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.
The key APMs that the Group focuses on are as follows:
i) Adjusted EBT is the loss before tax and adjusting items as
shown in the Consolidated Income Statement.
ii) Adjusted EBIT is operating (loss)/profit before adjusting items.
iii) Adjusted EBITDA removes depreciation, loss on sale of fixed
assets and amortisation from adjusted EBIT.
iv) Adjusted operating margin is adjusted operating (loss)/profit divided by revenue.
v) Adjusted EBITDA margin is adjusted EBITDA (as defined above) divided by revenue.
vi) Adjusted Earnings Per Share is loss after tax before
adjusting items as shown in the Consolidated Income Statement,
divided by the weighted average number of ordinary shares in issue
during the reporting period.
vii) Net Debt is current and non-current borrowings in addition
to inventory repurchase arrangements and lease liabilities, less
cash and cash equivalents and cash held not available for short
term use as shown in the Consolidated Statement of Financial
Position.
viii) Adjusted leverage is represented by the ratio of Net Debt
to the last twelve months ('LTM') Adjusted EBITDA.
ix) Free cash flow is represented by cash (outflow)/inflow from
operating activities less the cash used in investing activities
(excluding interest received) plus interest paid in the year less
interest received.
INCOME STATEMENT
2021 2020
GBPm GBPm
-------------------------------------- ------- -------
Loss before tax (213.8) (466.0)
Adjusting operating expenses (note 5) 2.2 98.0
Adjusting finance expense (note 7) - 75.5
Adjusting finance income (note 6) (34.1) (6.9)
====================================== ======= =======
Adjusted loss before tax (EBT) (245.7) (299.4)
Adjusted finance income (2.3) (33.1)
Adjusted finance expense 173.7 107.6
====================================== ======= =======
Adjusted Operating Loss (EBIT) (74.3) (224.9)
====================================== ======= =======
Adjusted Operating Margin (6.8%) (36.8%)
====================================== ======= =======
Reported depreciation 74.6 55.7
Reported amortisation 137.6 99.1
====================================== ======= =======
Adjusted EBITDA 137.9 (70.1)
====================================== ======= =======
Adjusted EBITDA Margin 12.6% (11.5%)
-------------------------------------- ------- -------
EARNINGS PER SHARE
2021 2020
GBPm GBPm
-------------------------------------------------------------- -------- --------
Adjusted earnings per ordinary share
Loss available for equity holders (GBPm) (191.6) (419.3)
Adjusting items (note 5)
Adjusting items before tax (GBPm) (31.9) 166.6
Tax on adjusting items (GBPm) (8.3) (32.9)
============================================================== ======== ========
Adjusted loss (GBPm) (231.8) (285.6)
Basic weighted average number of ordinary shares (million)(1) 115.5 77.2
Adjusted loss per ordinary share (pence) (200.8p) (369.9p)
Adjusted diluted earnings per ordinary share
Adjusted loss (GBPm) (231.8) (285.6)
Diluted weighted average number of ordinary shares
(million) 115.5 77.2
Adjusted diluted loss per ordinary share (pence) (200.8p) (369.9p)
-------------------------------------------------------------- -------- --------
1. Average number of ordinary shares has been reduced by a ratio
of 20:1 reflecting the share consolidation undertaken in December
2020.
13 ALTERNATIVE PERFORMANCE MEASURES CONTINUED
NET DEBT
2021 2020
GBPm GBPm
-------------------------------------------------------- --------- ---------
Opening cash and cash equivalents 489.4 107.9
Cash inflow/(outflow) from operating activities 178.9 (198.6)
Cash outflow from investing activities (184.1) (258.4)
Cash (outflow)/inflow from financing activities (66.5) 840.2
Effect of exchange rates on cash and cash equivalents 1.2 (1.7)
======================================================== ========= =========
Cash and cash equivalents at 31 December 418.9 489.4
Cash held not available for short term use 1.8 9.9
Borrowings (1,189.2) (1,084.8)
Lease liabilities (103.4) (103.0)
Inventory repurchase arrangement (19.7) (38.2)
======================================================== ========= =========
Net Debt (891.6) (726.7)
======================================================== ========= =========
Adjusted EBITDA 137.9 (70.1)
Adjusted leverage 6.5x n.m
-------------------------------------------------------- --------- ---------
FREE CASH FLOW
2021 2020
GBPm GBPm
------------------------------------------------------ ------- -------
Net cash inflow/(outflow) from operating activities 178.9 (198.6)
Cash used in investing activities (excluding interest
received) (185.2) (260.7)
Interest paid less interest received (116.9) (80.0)
====================================================== ======= =======
Free cash flow (123.2) (539.3)
------------------------------------------------------ ------- -------
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END
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(END) Dow Jones Newswires
February 23, 2022 02:00 ET (07:00 GMT)
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