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Gaydon, UK, 27 July 2022
Financial performance impacted by semiconductor and other constraints in the quarter but continue to expect significant improvement during the financial year ending 31 March 2023
Reimagine transformation continues
Commenting on the business performance for the quarter, Thierry Bolloré, Jaguar Land Rover’s Chief Executive Officer, said:
Our strategy to deliver the future of modern luxury to our clients continues at speed, as we accelerate our plans for an electric-first, brand-led business.
Although headwinds from the global semiconductor supply and COVID lockdowns in China have impacted our business performance this quarter, I am pleased to confirm that we have a completely reinforced organisation setup to respond to the semiconductor crisis. This is now starting to recover production growth to achieve greater volumes and will allow us to take advantage of our record order book in the second quarter.
THIERRY BOLLORÉ CHIEF EXECUTIVE OFFICER AT JAGUAR LAND ROVER
Jaguar Land Rover Automotive plc today reported its financial results for the three months to 30 June 2022 (Q1 FY23). Despite strong demand and a record order book, sales continued to be constrained by the global chip shortage, compounded by the slower than expected production ramp up of the New Range Rover and Range Rover Sport and the impact of Covid lockdowns in China, leading to a loss for the quarter.
Retail sales in Q1 FY23 were 78,825 vehicles, broadly flat (183 units lower) compared with the last quarter ending 31 March 2022 and down 37% (46k units) from the same quarter a year ago ending 30 June 2021. Wholesale volumes were 71,815 units in Q1 FY23 (excluding our China Joint Venture), down 6% compared to the last quarter. The total order book now stands at almost 200,000 units, up around 32,000 orders from the 31 March 2022, with our three most profitable models, the New Range Rover, New Range Rover Sport and Defender accounting for over 60% of the order book.
Revenue was £4.4 billion in Q1 FY23, down 7.6% from Q4 FY22, reflecting the lower wholesales. The loss before tax in the quarter was £(524) million with (4.4)% EBIT margin before a £155 million favourable exceptional pension item. The loss primarily reflects the lower wholesale volumes with weaker Range Rover and Range Rover Sport mix due to ramp up, as well as unfavourable inflation £(161) million and currency and commodity revaluation £(236) million year on year. Free cashflow turned negative in the quarter to £(769) million, primarily reflecting £(616) million of unfavourable working capital movements.
The Refocus transformation programme delivered £250 million of value in Q1 and is on track to deliver a target of £1 billion plus improvements in the year to help mitigate the impact of inflation.
Jaguar Land Rover ended the quarter with total cash and short-term investments of £3.7 billion and the undrawn revolving credit facility reduced as scheduled from £2 billion to £1.5 billion in July, resulting in total liquidity of £5.2 billion.
Financial performance is expected to improve significantly over the year with chip supply expected to improve through enhanced supplier engagement including long term partnership agreements, as well as ramping up New Range Rover and Range Rover Sport production. We continue to target achieving a 5% EBIT margin and £1 billion positive free cash flow over the full FY23 financial year.
Our medium- and longer-term financial targets under the Reimagine strategy, underpinned by the Refocus transformation programme, remain unchanged, including improving EBIT margins to 10% or more by FY26 and improving free cash flow to achieve zero net debt in FY24.
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