Inchcape Global announces financial results with solid growth during 2023

• Faced with global challenges in the automotive industry, Inchcape stands out for its financial robustness, largely attributed to the successful integration with Derco and its digital strategy, paving the way for sustained growth and reinforcing its market leadership position

Inchcape, a global leader in automotive distribution, has announced its preliminary results for the year ended December 31, 2023, demonstrating a period marked by robust growth and significant strategic advancements. Despite confronting a complex global economic environment, the company achieved a Group revenue increase of 41%, reaching £11.4 billion, largely due to the strategic acquisition of Derco and organic revenue growth of 12%.

Duncan Tait, CEO of the Inchcape Group, expressed satisfaction with the results achieved: “Last year, we witnessed exceptional performance across all our operating regions, with double-digit organic revenue growth, margin progression, and increased cash generation. Our strategic focus and ability to adapt to market challenges were key to maintaining positive momentum, even in adverse situations.”

The acquisition of Derco was a turning point for Inchcape, strengthening its presence in the Americas. This process progressed well, with revenue synergies already established in the Americas and other regions. In 2023, cost synergies of £21 million were delivered, exceeding initial expectations and laying the groundwork for additional savings of at least £50 million in the fiscal year 2024. Additionally, the integration was effective in generating economies of scale and optimizing operations, with estimated cash integration costs of £70 million over three years.

“Derco not only significantly expanded our geographical footprint but also enriched our brand portfolio and allowed us to access new market opportunities. The integration was marked by intensive efforts to align our operations, strategies, and corporate culture, ensuring that we maximize the value of this union for our stakeholders,” highlighted Tait. “With operating margins delivered towards the upper end of the 5% to 7% pre-synergies range, and the successful completion of the reduction of excess inventory valued at c.£200 million, we saw the fruits of this strategic acquisition.”

Looking ahead, Inchcape remains optimistic, anticipating moderate short-term growth with acceleration in the medium and long term. In 2023, Inchcape made significant strides, securing a record number of distribution contracts and making key acquisitions for its growth. The company has sought to expand its market share with Original Equipment Manufacturers (OEMs) and venture into new markets. For 2024, the company will focus on prudent cost management. Inchcape is optimistic about its medium and long-term future, thanks to its global leadership, high-quality team, and digital strategy.

“We are in a unique position to continue expanding, not only in existing markets by increasing our market share but also by venturing into new territories and developing our portfolio of mobility company partners. With our clear strategic vision, disciplined approach to capital allocation, and advanced capabilities in digitization and data analysis, Inchcape is exceptionally well-positioned for future growth,” concluded Tait.

Likewise, the CEO of Inchcape Americas noted, “Our global strategy, enriched by the integration with Derco and the strategic use of technology, along with our deep understanding of the Americas market, uniquely positions us to seize the opportunities presented by the new world of mobility. At Inchcape, we not only distribute automobiles; we create the future of mobility, focusing on innovation, sustainability, and service excellence. We are committed to being the preferred partner of automotive brands and customers, offering innovative solutions that exceed expectations and contribute to sustainable growth in the Americas and worldwide,” said Romeo Lacerda, CEO of Inchcape Americas