DARING TO ADAPT 2015 Half-Year Results 31 August 2015
SUMMARY Very good H1 2015 results: Sales: EUR 3.2 billion, +8.6% Current consolidated result before tax, group s share: EUR 140.0 million, +61.5% D Ieteren Auto: sales up 5.4% and current operating result up 43.5%. Strong uplift in new vehicle sales, positive contribution of most of the other activities, positive price/mix effect and cost savings. Slightly lower market share vs H1 2014 due to Volkswagen and Škoda. Restructuring of the D Ieteren Car Centers and of the independent dealers network is ongoing. Belron: sales up 11.9% and current operating result up 48.1%. Harsh winter conditions and market share gains in the US. Positive product mix effect (more replacements vs repairs) and significant currency impact (strong US dollar and British pound). In Europe, impact of lower sales more than offset by cost control actions and the impact of restructuring actions. Decision to exit China. Challenging transformation of operating model in the UK. 2
SALES: UP 8.6% TO 3.2 BILLION External sales ( m) 2,973.7 +8.6% +11.9% 3,230.3 Belron 1,464.8 1,639.6 +5.4% D Ieteren Auto 1,508.9 1,590.7 H1 2014 H1 2015 3
CURRENT CONSOLIDATED RESULT BEFORE TAX, GROUP S SHARE, UP 61.5% TO 140.0 MILLION Current consolidated PBT, group s share ( m) Current consolidated result before tax, group s share, better than anticipated thanks to a favourable currency effect at Belron and higher than expected results at D Ieteren Auto +61.5% 30.9 140.0 22.4 86.7 H1 2014 D Ieteren Auto & Corporate Belron H1 2015 4
UPWARD REVISION OF FY 2015 OUTLOOK Whereas the group had previously communicated that it expected an increase in current consolidated result before tax, group s share of more than 10% in 2015 compared to 2014, it now anticipates a 20-25% increase based on current exchange rates. The upward revision mainly reflects the favourable currency effect and higher-than-expected results at D Ieteren Auto in H1 2015. Extract from HY 2015 results press release published on 31 August 2015 5
AUTOMOBILE DISTRIBUTION 31 August 2015
ROUGHLY FLAT BELGIAN CAR MARKET MARKET SHARE SLIGHTLY DOWN BOTH ON FY & H1 2014 Excluding deregistrations, Belgian car market slightly down yoy (-0.65%) Market share excluding deregistrations at 22.02% vs 22.27% in H1 2014 (22.67% in FY 2014), mostly due to declines at Volkswagen and Škoda New car registrations (000s units) D Ieteren Auto s market share (%) 287,824 13,627 274,197 +0.21% 288,424 16,018 272,406-0.65% 24 23 22 21 20 19.43 19.97 19.76 21.89 20.13 23.16 22.12 22.39 21.15 22.27 21.35 22.02 21.13 19 19.34 H1 2014 Deregistrations H1 2015 Net registrations 18 H1 2006 H1 2007 H1 2008 H1 2009 H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 Market share (%) Net market share (excluding deregistrations) 7
BRAND PERFORMANCE Breakdown of D Ieteren Auto s market share per brand (%) Porsche Seat Škoda Audi Volkswagen 22.27 0.44 1.35 3.60 6.62 10.25 H1 2014 22.02 0.66 1.47 3.39 6.53 9.95 H1 2015 The combined market share of Bentley and Lamborghini totals 0.01% both in H1 2014 and H1 2015. Despite a declining market share, VW remains the market leader, supported notably by the Passat and the Golf Sportsvan Despite a declining premium segment, Audi was up on FY14 thanks to the Q3, A4 & A6 Seat was up thanks to the Leon and the Ibiza New highs for Porsche on the back of the success of the Macan and the hybrid Cayenne 8
SUMMARY OF H1 2015 RESULTS m H1 2014 H1 2015 % change New vehicles delivered (in units) 63,286 63,553 +0.4 External sales 1,508.9 1,590.7 +5.4 Current operating result 38.6 55.4 +43.5 Current operating margin (in %) 2.6 3.5 - Current net finance costs -4.3 0.2 n.s. Current result before tax 36.5 58.7 +60.8 Current result before tax, group s share 37.2 59.6 +60.2 of which joint ventures and associates 3.0 3.9 +30.0 Group s share in the net result for the period 35.2 52.4 +48.9 Unusual items and re-measurements, before tax -2.5-5.4-9
OUTLOOK FOR FY 2015 Excluding registrations of less than 30 days, the Belgian new car market is expected to remain stable at around 450,000 registrations Objective of a stable annual market share Main new product launches in H2 2015: Volkswagen: Touran & Sharan Audi: A4 Škoda: Superb Combi In H2 D Ieteren Auto expects delivery delays of the VW Passat, a less favourable product mix effect and costs related to the launch of the new Audi A4 10
VEHICLE GLASS REPAIR & REPLACEMENT 31 August 2015
EUROPE NOW REPRESENTS LESS THAN HALF OF SALES (51% IN H1 2014) DUE TO GROWTH IN THE US Geographical revenue breakdown 1 Total revenue evolution 2 55% Europe 45% Rest of the World Europe -3.4% France UK Germany Netherlands Italy Belgium Spain Norway Portugal Hungary Sweden Ireland Greece Switzerland Denmark Austria Turkey Russia Luxembourg Rest of the world +7.3% USA Canada Australia Brazil New Zealand China 1 At actual FX. 2 At constant FX including acquisitions and calendar effect. 12
FOCUS ON RESTRUCTURING ACTIONS UK: challenging transformation of the operational model led to a deterioration of employee engagement and customer service, and a negative impact on sales and profit UK: the fixed assets of ADR, the branch-based business of Autorestore specialized in accident damage repairs, were written off (EUR 1.3 million). Note that ADR was sold end-august: a further charge of circa EUR 3 million is expected in H2. Italy & the Netherlands: restructuring in line with the plan and delivering benefits but still a tough market environment and price pressure. In Germany, the closure of the heavy commercial vehicles operation has delivered the expected profit benefits. Brazil: reduction of headcount, closure of 24 out of 68 branches and additional efficiency actions have allowed operating losses to decrease significantly yoy. Turkey: half (7) of corporate branches have been closed; focus on major population centres; downsizing of central support functions; focus on more profitable wholesale operations. China: decision to close the Chinese operations (one-off costs of approx. EUR 4 million are expected in H2). Impact on sales and result will be negligible. 13
SIGNIFICANT ACQUISITIONS Netherlands: on 3 June Belron acquired Autotaalglas. The deal comprises the acquisition of the franchisor, of 1 owned branch and of a franchise network of 54 branches. Germany: on 9 July, Belron announced the acquisition of Junited Autoglas, a German franchise network comprising 232 branches. The deal will be effective when approved by the German competition regulator. Autotaalglas and Junited Autoglas will keep their brand, identity and operating model. The businesses will be run separately: customers will be able to choose between two value propositions, Carglass and Autotaalglas/Junited Autoglas 14
SUMMARY OF H1 2015 RESULTS m H1 2014 H1 2015 % change Total jobs (in million units) 5.7 5.6-1.9 External sales 1,464.8 1,639.6 +11.9 Current operating result 69.9 103.5 +48.1 Current operating margin (in %) 4.8 6.3 - Current net finance costs -17.7-18.7 +5.6 Current result before tax 52.2 84.8 +62.5 Current result before tax, group s share 49.5 80.4 +62.4 Group s share in the net result for the period 30.7 31.3 +2.0 Unusual items and re-measurements, before tax -7.4-30.9 - ELTIP * charge, before tax -1.6-1.8 +12.5 * Executive Long-Term Incentive Plan 15
OUTLOOK H2 2015 Organic sales growth in the US & further declines in Europe Higher incentive costs compared to H2 2014 (expected of approx. EUR -6 million) Impact of cost savings less pronounced than in H1 2015 (many efficiency actions already underway in H2 2014) Results in H2 2014 benefitted from short term cost reduction actions which will not be repeated 2016 Further market declines expected in Europe Tough weather-related comparables in the US Cost inflation (sourcing of glass) due to weak EUR 16
FORWARD-LOOKING STATEMENTS To the extent that any statements made in this presentation contain information that is not historical, these statements are essentially forward-looking. The achievement of forwardlooking statements contained in this presentation is subject to risks and uncertainties because of a number of factors, including general economic factors, interest rate and foreign currency exchange rate fluctuations; changing market conditions, product competition, the nature of product development, impact of acquisitions and divestitures, restructurings, products withdrawals; regulatory approval processes and other unusual items. Consequently, actual results may differ materially from those expressed or implied by such forwardlooking statements. Forward-looking statements can be identified by the use of words such as "expects", "plans", "will", "believes", "may", "could", "estimates", "intends", "targets", "objectives", "potential", and other words of similar meaning. Should known or unknown risks or uncertainties materialize, or should our assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly update any forward-looking statements. 17
CONTACT INFORMATION Financial Communication & Investor Relations D Ieteren Group Pascale Weber pascale.weber@dieteren.be +32 2 536 54 39 Download the D Ieteren app on: Thierry Dossogne thierry.dossogne@dieteren.be +32 2 536 55 65 or financial.communication@dieteren.be www.dieteren.com 18