• Chairman’s Statement

    Since assuming my role as Chairman, I have taken the opportunity to visit several of the Group’s larger markets. In each, I was impressed by the capability, commitment and enthusiasm of the Inchcape teams I met and noted their strong support for the Ignite strategy, which is bringing increasing benefits to the bottom line.

    Nigel Stein
    Chairman

  • Chief executive’s review

    Once more it is my pleasure to write to you at the end of a year that has delivered strategic progress in many markets, despite some external pressures. We have grown our business, adding several new contracts to our portfolio, and placing greater emphasis on Distribution as the core of our business model; we have further leveraged our scale on costs; and we have made good progress in improving our digital capability and execution of the Inchcape customer experience.

    Stefan Bomhard
    Group Chief Executive

  • Operating and Financial Review

    Group revenue of £9.3bn is up 5.8% year-on-year, and 4.2% excluding the Central America acquisition that was announced in March 2018. Organic growth was particularly strong in the Emerging Markets, driven by Russia and South America where the benefits of our Ignite strategy are particularly visible both through value driver growth and acquisitions.

    Richard Howes
    Chief Financial Officer

OUR STRATEGY

Ignite strategy driving our growth

Inchcape’s strategic objectives are what drives the business. With the twin focal points of our customers and OEM partners at the heart of the strategy, Ignite combines five objectives to bring to life our vision to become the world’s most trusted automotive Distributor and Retailer.

Our strategy was developed to drive operational excellence across our markets; to consolidate markets with high-growth potential in our fragmented industry; to innovate to take advantage of our scale and expertise; and to build a sustainable business model for the long term.

Ignite is structured to drive continual improvement and the spread of best practice across all our revenue streams, powering our defence against fluctuating market conditions. And within this structure the strategy has room to evolve to ensure that the business can react with agility, to keep pace with and anticipate the changing automotive industry.

Lead in customer experience

Close
  • What it means

    As the global automotive industry rapidly evolves, the purchasing behaviour and service-level expectations of consumers are clearly changing. We will invest to maintain our position as leader in customer service innovation in automotive Distribution and Retail, with digital a key priority

  • Priorities

    Build digital and data capabilities at Group and market levels

    Improve mobile performance to better reflect customers’ preferences

    Optimise digital traffic to improve online performance

    Introduce structured measurement to improve customer experience

  • Progress in 2018

    Developed omni-channel platform, launching in Australia in 2019

    Increasing proportion of annual capex spend to support digitisation

    Continued rollout of Salesforce CRM (customer relationship marketing), Brightedge SEO (search engine optimisation) and reputation.com, creating a 360° view of the customer journey and enabling us to deliver the experiences that customers are seeking

BECOME THE OEM PARTNER OF CHOICE

Close
  • What it means

    We have a very strong portfolio of brands. We now need to build on our OEM partnerships to ensure that we thoroughly deserve to achieve the status of ’partner of choice’ across all our relationships, and then to robustly defend that position

  • Priorities

    Understand and support our OEM partners’ objectives

    Ensure we maintain and reinforce contact with OEM partners

    Maintain and grow market share for existing partners

    Partner with OEMs to consolidate regional Distribution markets

  • Progress in 2018

    Meaningful expansion of relationship with Suzuki, new to our core set of OEM

    Consolidation of regional markets with BMW and Jaguar Land Rover

    Regular contact through strategic ’top-to-top’ and regular operational meetings

    Market share growth in 15 territories that had TIV (total industry volume) growth vs 2017

DELIVER THE FULL POTENTIAL ON ALL OUR REVENUE STREAMS

Close
  • What it means

    The addressable market for Aftersales is set to grow faster than New car sales. The Used car market, which is typically a multiple of that of New cars in most of our territories, is a further growth opportunity. Finance and Insurance (F&I) is another significant focus for growth

  • Priorities

    Implementation of Aftersales playbooks in all territories including new markets

    Strong focus on extending F&I product coverage to more of portfolio

    Deploying proven Used car initiatives to grow GPU

  • Progress in 2018

    Good growth in Aftersales gross profit driven by increased capacity in Singapore and leveraging processes in South America

    Used car initiatives drove double digit growth in Russia and South America

    F&I programmes delivering ahead of plan, profit growth at twice rate of vehicle sales: incremental £15m in 2018

LEVERAGE OUR GLOBAL SCALE

Close
  • What it means

    We aim to maximise the opportunity of our unique position in the automotive industry to share more expertise and best practice across our organisation, leveraging our global scale to improve collaborative working and cost optimisation

  • Priorities

    Development and initial implementation of procure-to-payment (P2P) programme

    Continue to drive savings through extension of procurement initiatives to new opportunities for centralised purchasing

    Demonstrate shared best practice globally through extending rollout of commercially successful initiatives

  • Progress in 2018

    Cumulative procurement savings £32m to date

    Key 2018 initiatives include tyre distribution, vehicle storage and transportation, parts

    Began rollout of P2P platform to enable global savings in 2019+

    Expanded rollout of vehicle protection product GardX demonstrates shared best practice and leveraged scale

INVEST TO ACCELERATE GROWTH

Close
  • What it means

    The automotive Distribution and Retail markets are highly fragmented; we apply a disciplined use of capital to fuel further growth through selective participation in market consolidation

  • Priorities

    Continue to develop rich pipeline of relevant M&A opportunities

    Focus on acquisitions in strong growth potential, small- to medium-sized markets

    Build regional platforms of consolidated Distribution contracts to support OEMs, leverage our scale and drive improvements in customer experience

  • Progress in 2018

    Scale acquisition in Costa Rica and Panama including Distribution contract for Suzuki

    South America business acquired in 2016 achieved target ROIC in 2018, one year early

    Contract wins with JLR in Kenya, BMW in Guam

    In early 2019 consolidated all Baltic countries for BMW with addition of Lithuania

    Award of BMW contract in Kenya to extend east Africa representation

Our Brands

Working with leading OEM partners

Inchcape has long-standing partnerships with the world’s leading automotive groups, with a core focus on manufacturers of premium and volume passenger vehicles.
  • Seven Core Partnerships
    Select one of our partnerships below
    • 51 YEARS
    • 48 YEARS
    • 41 YEARS
    • 31 YEARS
    • 30 YEARS
    • 29 YEARS
    • 26 YEARS

We have long-standing relationships with each of our seven core OEM partners, the majority of which are built around exclusive Distribution contracts in multiple markets.

In select markets we also represent commercial and agricultural vehicles and machinery as well as emergent passenger vehicle brands.

The OEMs (original equipment manufacturers) with which Inchcape works are some of the foremost drivers of technological innovation in the automotive industry, from advances in hybrid and battery electric drivetrains to future mobility solutions.

Close

Toyota

Our partnership with Toyota Motor Corporation is the longest standing in our portfolio, with 51 years as a Distributor in geographies that now reach from South East Asia to East Africa, from Europe to the Americas.

DISTRIBUTION

Hong Kong, Macau, Guam, Saipan, Singapore, Brunei, Greece, Belgium, Luxembourg, Albania, Bulgaria, Macedonia, Romania, Ethiopia, Chile & Colombia (Hino only)

RETAIL

UK, China, Russia

Close

Jaguar Land Rover

Inchcape and Jaguar Land Rover’s partnership stretches back nearly 50 years in total. We have continued our Jaguar Land Rover growth story right up to the present day, with Distribution contracts awarded for Thailand in 2016, and Colombia and Kenya in 2018. We now represent Jaguar and Land Rover both as Distributor and Retailer in 12 markets on four continents.

DISTRIBUTION

Thailand, Hong Kong, Macau, Colombia, Finland, Estonia, Latvia, Lithuania, Kenya

RETAIL

UK, Russia, Australia

Close

Suzuki

We have a long-standing Distribution partnership with Suzuki stretching back over 40 years. In March 2018 our acquisition of Grupo Rudelman introduced not only two new markets to our portfolio, but also a step-change in our relationship with Suzuki, and we are delighted that the brand is now a volume Distribution partner and the lead brand in our newly formed Central America platform.

DISTRIBUTION

Costa Rica, Panama, Singapore, Argentina

Close

Mercedes-Benz

In the UK Inchcape represents Mercedes-Benz as a Retailer, and with 12 dealerships in the Midlands and North West of England, we are one of the largest in the market. Our relationship with Daimler’s brands dates to 1985.

RETAIL

  • Ellesmere Port
    Coventry
    Derby
    Leicester
  • Liverpool
    Loughborough
    Conwy
    Nottingham
  • Oxford
    Southport
    Stratford - upon Avon
    Warrington
Close

VW Group

Inchcape has a Retail-only partnership with VW Group and represents the core VW and Audi brands as well as the performance marque Porsche. Our VW Group relationship goes back 30 years in four international markets.

DISTRIBUTION

UK, Russia, China, Australia

Close

BMW

Our partnership with BMW Group is nearly 30 years strong and has been a key focus for consolidating growth. We completed our consolidation of BMW Distribution in the Baltic region with the award of the contract for Lithuania in 2018, also adding the Distribution contract for Guam last year. As well as holding Distribution contracts in South America, we also have significant operations in our largest Retail-only markets: UK and Russia.

DISTRIBUTION

Chile, Peru, Latvia, Lithuania, Estonia, Guam, Kenya

RETAIL

UK, Russia, Poland, Australia

Close

Subaru

Our 26 years strong distribution partnership with Subaru Corporation is one of our most important. We distribute and operate the brand in Australia, maintaining Subaru’s highest share globally in that market. Subaru was the OEM brand central to our biggest recent acquisition, leading our expansion in South America in 2016 and helping to create a significant platform for further growth in the region.

DISTRIBUTION

Australia, New Zealand, Chile, Colombia, Peru, Argentina

Our value Chain

Play video

Key Performance Indicators

  • Revenue
    £9.3BN
    2017: £9.0BN
  • Operating margin
    4.2%
    2017: 4.5%
  • Profit before tax and exceptional items
    £356.8M
    2017: £381.6M
  • Adjusted earnings per share
    65.0P
    2017: 66.7P
  • Free cash flow
    £280.7M
    2017: £313.9M
  • Return on capital employed
    28%
    2017: 30%
Play video