Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aston Martin Lagonda Global Holdings PLC (AMGDF, Financial) has completed the most intensive period of product development in its history, resulting in a fully reinvigorated core product portfolio.
- The company has received significant acclaim for its models, consistently outperforming competitors in independent road tests.
- Aston Martin Lagonda Global Holdings PLC (AMGDF) has made substantial improvements in customer experience, including opening new retail locations and enhancing its performance credentials through high-profile racing involvement.
- The company has been recognized with the King's Award for innovation and a new royal warrant by appointment to His Majesty King Charles III.
- Aston Martin Lagonda Global Holdings PLC (AMGDF) ended 2024 with total liquidity of over GBP500 million, aligning with its guidance to support future growth strategies.
Negative Points
- The company faced industry-wide supply chain disruptions and a weaker macroeconomic environment, particularly in China, affecting volumes and financial performance.
- Aston Martin Lagonda Global Holdings PLC (AMGDF) announced a circa 1,000-unit reduction in wholesale volumes due to external challenges and internal production reshaping.
- Despite operational achievements, the company did not deliver the financial performance originally set for 2024.
- The company is undergoing organizational adjustments, resulting in the departure of around 170 employees, representing 5% of its global workforce.
- The company experienced a decrease in total wholesales by 9% and a revenue decrease by 3% year on year, reflecting lower volumes and FX headwinds.
Q & A Highlights
Q: Your 2025 volume guidance remains several hundred units short of your original guidance for 2024. Is this due to supply chain disruptions or lower demand?
A: The 2025 volume is influenced by a strategic decision to balance supply and demand, rather than supply chain issues. We are actively managing stock levels, particularly in China, and expect retail sales to outpace wholesales. The shape of the year will be different, with significant launches in the second half, including the Volante Vanquish, Vantage Roadster, and Valhalla.
Q: Can you explain the deviation from the original GBP500 million EBITDA guidance for 2025?
A: We still expect a significant step towards the GBP500 million EBITDA target. The focus is now on EBIT as a key metric, reflecting our aim for sustainable profitability. Operational efficiencies and cost optimizations are being prioritized to support this goal.
Q: When do you expect deposits to become a working capital inflow again?
A: We expect deposits to be broadly neutral in 2025. While we continue to take deposits for Valhalla, the delivery of cars will offset these, so deposits won't significantly impact working capital this year or next.
Q: How are you addressing the leftover inventory, particularly in China?
A: We have made provisions for older stock but have not written it off. We plan to balance supply and demand by mid-year through variable marketing and production adjustments, ensuring these cars remain attractive.
Q: Is the split operation between Gaydon and St Athan a structural issue?
A: While we have two sites, St Athan is efficient and offers significant opportunities for improvement. There is no immediate plan to consolidate operations, but we continuously review all aspects of our cost base.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
