Full Annual Report - Inchcape
Full Annual Report - Inchcape Full Annual Report - Inchcape
Business review Strategy Operating review continued Europe Brand partners George Ashford Chief Executive Officer Toyota Belgium Aris Aravanis Chairman and Managing Director Toyota Hellas Jean Van der Hasselt Managing Director Nordics, South America and Africa The Europe segment includes Belgium, Luxembourg,Greece and Finland. Key financial highlights Contribution to Group sales Contribution to Group profit Financial highlights Sales Year ended Year ended % change 31.12.2009 31.12.2008 in constant £m £m % change currency Retail 204.3 391.3 (47.8)% (54.0)% Distribution 801.8 837.9 (4.3)% (15.6)% Like for like sales Retail 187.6 262.9 (28.6)% (37.1)% Distribution 801.8 837.9 (4.3)% (15.6)% Trading (loss)/profit Retail (1.6) 0.7 (328.6)% (299.9)% Distribution 30.2 39.9 (24.3)% (33.1)% Like for like trading (loss)/profit Retail (1.2) 1.0 (220.0)% (210.3)% Distribution 30.2 39.8 (24.1)% (33.1)% Trading margin Retail (0.8)% 0.2% (1.0)ppt (1.0)ppt Distribution 3.8% 4.8% (1.0)ppt (1.0)ppt Cash generated from operations Retail 7.6 10.3 (26.2)% Distribution 76.6 (27.3) 380.6% 18.0% 14.7% Sales £1,006.1m 18.2%* 2008: £1,229.2m Trading profit £28.6m 29.6%* 2008: £40.6m Operational highlights for the year • Market share growth in Belgium in the second half following successful new model launches • Greece maintained clear market leadership position through effective marketing and new products • Successfully restructured operations in Finland *at actual exchange rates More online at www.inchcape.com/ourbusinessmodel/regions 26 Inchcape plc ¦ Annual Report and Accounts 2009
Section One Business review The market In Belgium, in the absence of the biannual Motor Show last held in 2008 and with no stimulus package for the motor industry, the market declined by 12.6%. In Greece the overall market declined by 18.8% despite a small recovery mid year as a result of several government stimuli including a tax incentive and a short lived scrappage scheme. In Finland the market declined by 35.2%. Business model and strategy In Belgium, we are the distributor for Toyota and Lexus.We own and operate eight Toyota and Lexus retail centres, with the remaining network of 85 retail centres operated by independent third party retailers. In Luxembourg, we are the distributor and retailer of Jaguar,Toyota and Lexus, with one retail centre for each brand. In Greece, we are the distributor for Toyota and Lexus.We operate six retail centres with the remaining network of 35 Toyota and Lexus retail centres and 40 authorised repairers independently owned. In Finland, we are the distributor for Jaguar, Land Rover and Mazda with four retail centres in Helsinki. We aim to drive growth in market share in our distribution business and to continue our turnaround plan for retail. In distribution, growth will be driven by strong marketing programmes increasing traffic into the dealer network, with new model launches and a focus on operational excellence, all supported by tight overhead cost control. In retail, our plan continues to focus on customer-centric operational excellence and improvements in footfall conversion. Our operating performance Trading conditions across our European markets remained extremely difficult throughout the year resulting in trading profits in our distribution business declining by 33.1% to £30.2m and a trading loss in our retail business of £1.6m. In Belgium the overall market decline led to strong price competition which resulted in a broadly flat Toyota market share. However the new hybrid Prius was launched in quarter three and we gained share in the second half of the year. In the retail business lower new vehicle sales have been partly mitigated by sales growth in used vehicles and strong aftersales performance. In Greece we maintained clear market leadership achieving 10.1% share through effective marketing campaigns and successfully leveraging new products and technologies on car models. In Finland we successfully restructured our retail operations. Our focus on working capital and in particular inventory management has resulted in strong cash generated from operations of £7.6m for the retail business, and £76.6m for distribution, well ahead of last year. Outlook for 2010 As a whole we expect the markets in Europe to continue to face challenging trading conditions throughout 2010. In Greece the significant economic challenges faced by the new government are expected to lead to a contraction in the economy and further declines in the market. We will focus on effective marketing, model differentiation and price competitiveness in vehicle sales and aftersales. In Belgium with the biannual Motor Show in January and an improving economic climate we expect the market to remain broadly stable.A continued focus on driving customer traffic, superior customer service and a growth in aftersales will be our aim. In both Greece and Belgium we will capitalise on the launch of the upgraded Toyota Rav4, the Auris and the Yaris.We will continue to grow aftersales through service reminder programmes and vehicle health checks. In Finland we expect an improving economy and therefore the industry to stabilise.We intend to leverage the new Mazda model launches and current model extensions to improve our competitive position. Franchised retail centres 21 www.inchcape.com 27
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Business review<br />
Strategy<br />
Operating review continued<br />
Europe<br />
Brand partners<br />
George Ashford<br />
Chief Executive Officer<br />
Toyota Belgium<br />
Aris Aravanis<br />
Chairman and Managing<br />
Director Toyota Hellas<br />
Jean Van der Hasselt<br />
Managing Director Nordics,<br />
South America and Africa<br />
The Europe segment includes Belgium,<br />
Luxembourg,Greece and Finland.<br />
Key financial highlights<br />
Contribution to<br />
Group sales<br />
Contribution to<br />
Group profit<br />
Financial highlights<br />
Sales<br />
Year ended Year ended % change<br />
31.12.2009 31.12.2008 in constant<br />
£m £m % change currency<br />
Retail 204.3 391.3 (47.8)% (54.0)%<br />
Distribution 801.8 837.9 (4.3)% (15.6)%<br />
Like for like sales<br />
Retail 187.6 262.9 (28.6)% (37.1)%<br />
Distribution 801.8 837.9 (4.3)% (15.6)%<br />
Trading (loss)/profit<br />
Retail (1.6) 0.7 (328.6)% (299.9)%<br />
Distribution 30.2 39.9 (24.3)% (33.1)%<br />
Like for like trading (loss)/profit<br />
Retail (1.2) 1.0 (220.0)% (210.3)%<br />
Distribution 30.2 39.8 (24.1)% (33.1)%<br />
Trading margin<br />
Retail (0.8)% 0.2% (1.0)ppt (1.0)ppt<br />
Distribution 3.8% 4.8% (1.0)ppt (1.0)ppt<br />
Cash generated from operations<br />
Retail 7.6 10.3 (26.2)%<br />
Distribution 76.6 (27.3) 380.6%<br />
18.0% 14.7%<br />
Sales<br />
£1,006.1m 18.2%*<br />
2008: £1,229.2m<br />
Trading profit<br />
£28.6m 29.6%*<br />
2008: £40.6m<br />
Operational highlights for the year<br />
• Market share growth in Belgium in the<br />
second half following successful new<br />
model launches<br />
• Greece maintained clear market<br />
leadership position through effective<br />
marketing and new products<br />
• Successfully restructured operations<br />
in Finland<br />
*at actual exchange rates<br />
More online at www.inchcape.com/ourbusinessmodel/regions<br />
26<br />
<strong>Inchcape</strong> plc ¦ <strong>Annual</strong> <strong>Report</strong> and Accounts 2009
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