Good day, and thank you for standing by. Welcome to the Aston Martin Lagonda Third Quarter 2022 Results and Webcast. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to slowly press star one and then one on your telephone. You will then hear an automated message advising your hand is raised. Please note that today's conference is being recorded. I would now like to hand over to your speaker, Amedeo Felisa, Chief Executive Officer of Aston Martin. Please go ahead. Good morning to everyone joining us on the call today to discuss Aston Martin Q3 2022 Results. I am Amedeo Felisa, CEO, and I'm joined by Doug Lafferty, our CFO. We plan to provide a brief overview of our year-to-date and Q3 performances, and then we will be happy to take your questions. A short presentation to accompany our comment can be found on the Results page of our Investor Relations website. Our year-to-date performances has seen us continue to build the foundation for our long-term growth, aligned with our vision to become the world's most desirable ultra-luxury British performance brand. We have continued to see a very impressive demand across our product range and the underlying fundamentals of Aston Martin are very strong. For example, retailers continue to outpace full sales. Front-engine sports cars are now sold out into second quarter of 2023, and we have seen an acceleration in orders to our DBX707, the premier ultra-luxury performance SUV on the market as we increase its availability to dealers. We have also seen healthy revenue growth, driven by record average selling price and continuous excitement around our iconic brand. To further enhance our ultra-luxury position, we have launched a number of breathtaking new products over the course of 2022, which shall have tremendous consumer desirability. In addition to the DBX707 and V12 Vantage Coupe that were announced earlier this year, during Q3 we have unveiled the ultra-luxury DBR 22, as well as the stunning V12 Vantage Roadster, both of which are fully sold out at pre-launch. The leaders of the DBR 22, which have limited 22 units at the price of GBP 175 million, are expected to start in 2023. We also showcase development upgrade to our hybrid supercar Valhalla, including a spectacular driver-focused interiors and unique seating position. At the same time, like many of our other automotive company, are managing the effect of global supply chain and logistics disruption, as well as inflationary pressure. In this context, we have experienced our own specific supply chain challenges over the last two quarters, which have delayed our ability to fulfill customer demand. Once we moved quickly to resolve the shortage that affected our Q2 performance, our Q3 deliveries were hindered by a new and separate supply chain challenges, impacting more than 400 vehicles that had been planned to be delivered in the quarter. I have been personally involved in the steps we are taking to address this. This action will not only support the acceleration of deliveries in Q4, but also enhance our supplier relationship to support our long-term growth. I am pleased to say that the overall situation is already improving in Q4, and I am confident that with the action we are taking, we will exit the year in a stronger position to deliver on our goal for 2023 and beyond. I will now pass the call over to Doug to review our financial performances and our outlook. Doug? Thank you, Amedeo. Good morning, everybody. I'll run through a quick summary of the financial position before we welcome your questions. As Amedeo described, we continue to enjoy strong demand for our products in Q3, although frustratingly, new supply chain challenges once again limited our ability to meet this demand and have impacted our overall performance. Pleasingly, though, we have been able to demonstrate one of the strong fundamentals of the business by delivering substantial revenue growth. This has been driven by excellent pricing dynamics, including pure pricing, options and incentives management, and supported by FX tailwinds. As a result, our core ASP is up 28% year-on-year to new record levels. This is a meaningful trend and is underpinned by the change in approach to being demand-led. On a year-to-date basis, we have seen more than 300 basis points of gross margin expansion as we continue on our journey towards our medium-term targets of a 40% plus. However, to some extent, our margin expansion trajectory has been temporarily checked by some transient dynamics. First, in terms of incremental manufacturing and logistics costs, and second by a negative mix effect from specials in Q3 this year. The supply chain and logistics disruptions that we are currently experiencing are impacting many companies within the automotive industry. Set against that backdrop, and similar to the operating challenges I described at the time of our H1 results, our Q3 performance was disrupted by both circumstances. As you will recall from our half-year results presentation, I referenced more than 350 ordered cars that were awaiting final parts at the end of June, with a corresponding impact on profitability, working capital and cash in the period. Those vehicles were delivered in Q3, the associated working capital unwound, and the impacts of that specific supply chain shortage were essentially mitigated. Moving further into Q3, we were continuing to manage volatility and uncertainty in the supply chain, albeit largely unrelated to the disruption I just mentioned. That uncertainty ultimately resulted in disruption to our planned Q3 production, particularly in September, by delaying final assembly and therefore forcing the rephasing of deliveries towards the end and beyond the end of the quarter. This was then compounded by delayed outbound logistics to North America due to Hurricane Ian. Overall, the combination of these new factors impacted more than 400 vehicles that we had planned to deliver in Q3. These cars will now be finished where required and delivered in Q4. Coming back to the impact this is having on our overall financial position, inflationary pressures have understandably been a point of discussion over the course of the year, and we've generally been able to mitigate rising costs through pricing actions and more recently with the benefit of FX tailwinds. During the course of Q3, we incurred incremental costs over and above general inflationary pressures and specifically associated with mitigating and resolving the supply chain issues I've just mentioned. This included additional manufacturing costs, co-locating members of our team with suppliers, and incurring premium inbound and outbound logistics costs to minimize disruption to our production schedules. Together, these, as I refer to them, supply chain recovery costs, totaled approximately GBP 10 million in Q3. These costs essentially offset the benefits of the FX tailwinds we would otherwise see in our numbers. The good news is that this specific supply chain issue has since improved. As Amedeo referenced, we are confident that we will deliver a strong Q4 in terms of volumes, profitability, and cash flows. With regards to the full year outlook, as a direct result of the new supply chain issues we've experienced in the H2, our outlook for 2022 is modestly updated to reflect a more significant, albeit short-term impact than previously expected. On volumes, we now expect total wholesales to be more in line with current consensus expectations and in the range of 6,200-6,600. On Valkyrie, there's no change to the 75-90 range we previously provided with a strong ramp-up in deliveries expected in Q4. Combined with the incremental supply chain recovery costs, which we expect to continue at a similar level into Q4, we are now targeting year-on-year adjusted EBITDA margin expansion of between 100 and 300 basis points. Breaking down the change of EBITDA margin range a little, the revised full year outlook now includes approximately GBP 20 million short-term incremental supply chain recovery costs that I've described. The balance of the change is primarily a function of the volume range. With regards to cash flow and related to the same supply chain issues that impacted Q3, we now expect cash inflows from a more normalized working capital dynamic to only become visible towards the end of the year and into early 2023. Combined with our Q3 cash flow performance, our target to be free cash flow positive in the H2 of the year is certainly now more challenging. However, our target is clearly to be free cash flow positive in Q4, and we'll continue to work on optimizing free cash flow with overall H2 performance in mind. With that, we'd be happy to take your questions. Thank you. As a reminder to ask a question, you will need to slowly press star one and then one on your telephone and wait for your name to be announced. Once again, it's star one and then one on your telephone. We are now going to proceed with the first question. The question's come from the line of George Galliers from Goldman Sachs. Please ask your question. Your line is open. Yeah, thank you for taking my question. I had a couple of questions just around the fourth quarter and kind of the implications for 2023. Clearly you've had significant challenges, but it sounds like operationally that is improving due to the measures you've taken. If I take the midpoint of the new wholesale guide, it would imply 2,300 units in Q4, which I believe would be a record for Aston Martin. The first question I had was, given your order book, how close to this type of run rate do you think you can also be in the H1 of 2023? Then also with respect to your updated EBITDA margin guidance, what EBITDA margin are you expecting in the fourth quarter? Again, what do you think the EBITDA margin will look like in the H1 of 2023? Should we expect further expansion? Thank you. Morning. Thanks for your questions. On the first question with regards to the volumes, look, I think historically Q4 has been a strong quarter for the company, and I think obviously we're expecting a strong Q4 in 2022. There is a head start to the numbers that we need to deliver given the fact that we have a lot of cars awaiting final assembly parts at the end of September. Also, as I referenced, we had a number of cars which were impacted from a logistics point of view going into the U.S.A. right at the end of September. Those sales will fall into October. We have a bit of a head start. Last Q4, the company delivered wholesales of around 1,900 cars in the fourth quarter. You know, there's confidence that we can achieve what we need to achieve in the fourth quarter. I think moving into 2023, you know, we'll give some guidance on that at the right and appropriate time. You know, we're very, very happy with the level of demand that Amedeo had referenced, that I talked to, and we hope that that sets us well for 2023. I'm gonna give you a similar answer on the EBITDA margin. As I referenced, you know, we expect Q4 to be strong from a volume, profitability and cash flow point of view. In and amongst that, we'd expect EBIT margin to be significantly improved from Q3. Again, as we move into next year, you know, we haven't changed our medium-term outlook. You know that means we're targeting GBP 500 million of EBITDA in sort of the 2024-2025 range at a margin of 25%. You know, we're on our journey to achieving that. Great. Thank you. We are now going to proceed with the next question. The next question has come from the line of Charles Coldicott from Redburn. Please ask your question. The line is open. Good morning. Thank you for taking my questions. I've got two, please. Firstly, on the gross margin, so that was down in Q3, despite the addition of the 707 and the V12 Vantage. Can you confirm, firstly, that those two models are at the 40% gross margin target? And in light of the inflationary pressures you mentioned, are you still confident that future launches, including next year's front- engine models, will have a 40% gross margin? My second question is on working capital. What do you see as a normalized level for inventory and receivables, and when do you expect to get back to that? Obviously, you've got the model launches next year as well, so should we expect inventories to remain high until late next year? Thank you. Thanks, Charles. I think I'll take those questions. So with regards to the gross margin, the target remains 40% plus. I think we've demonstrated through the course of this year that with pricing actions, with the way that we're managing incentives and the move to really being a demand-led business, we've been able to offset general inflationary pressures. That I don't expect not to continue as we move forward. The thing that's impacting our margin really at the moment is these incremental costs of the short-term supply chain issues that we've been experiencing. That is having a negative impact on our margin, as you quite rightly point out. But we expect that to be transient. Therefore, as we move into the first part of next year, we expect margins to improve. With regards to the Vantage V12, yes, absolutely, 40%+ margin. With regards to the DBX 707, given the fact that that's a vehicle that's been predominantly impacted by some of these supply chain issues this year, again, temporarily, margin isn't quite at that level. As things return to normal, DBX 707 certainly targets that 40%+ margin going forwards. With regards to your question on working capital, yeah. Look, we've obviously faced some headwinds this year. I think as I referenced in my sort of speech at the start of the call, I now expect working capital to unwind over a slightly longer period than we'd anticipated at the end of the H1. I think, you know, targeting that unwind by the end of Q1 next year. Specifically with your question on new products coming, I think, and Amedeo may be able to talk to this slightly better than me. You know, in planning next year, we're really looking at, you know, how do we ramp up the delivery of those new vehicles that are coming? How do we manage the supply chain, and how do we manage things internally? From a working capital perspective, I'm certainly hoping that we don't see some of the same impacts that we've had this year as we move into next year. Again, looking to the, as Doug was saying, to the new models that will reach the market next year. We have, if you understood, what we have done and what we have to increase in terms of strength, our position versus the supply chain, we have a better relationship with them. We have taken the story of the disruption. I think we have increased our capability to manage them and to install in them the understanding of our business. I think at the moment, we have I have to say that we have a good or better relationship with them. Then as we put our people in their organization, I think we have better control of them. Combining the two, I think the next launch of the new product will be probably or for sure less risky. Then, of course, this will be reflected on the margin and the cost. Okay, thanks. Can I just ask a quick follow-up? What is the timing of the model launches next year? I think you have to wait. As usual, we don't say in advance which will be the plan of the release of the new product, especially when we speak of one years later. Fair enough. Thanks. We're now going to proceed with the last question. The question's come from the line of Daniel Roeska from Bernstein. Please ask your question. Your line is opened. Gents, good morning. Thanks for taking the question. There's clearly some distance between where you are right now and the free cash flow break-even in 2024. You've talked about, I think, the aspiration in broad terms, but do you have kind of a plan, a milestone plan? What would you like to achieve kind of in the following quarters? Could you give us kind of the major proof points between now and then, that you're also kind of gearing your organization to? Just a smaller question. You mentioned negative mix effect in Q3. Just maybe some color around that, please. Morning, Daniel. With regards to, you know, our sort of midterm ambition, aspirations, you know, as I said, we haven't changed our outlook and our guidance in that regard. Free cash flow positive in 2024 certainly remains our aspiration, ambition. Specifically with regards to cash flow, and as I mentioned, in answering Charles' question, you know, we expect that working capital unwind to happen over the course of the next couple of quarters. That should, you know, improve our cash flow position as we move into next year. You know, to Amedeo's point, we hope and believe that the work that we're doing with the supply chain will stand us in a better stead in that regard. From a cash flow and a working capital point of view, you know, we have line of sight on improvement. Similarly, as I answered earlier on gross margin and EBITDA margin, you know, we're expecting improvement, along the lines of the guidance that we've given in order to get us to the midterm. Trajectory that we've seen earlier in the course of the year, as I said, has been impacted and checked slightly by some of the sort of transient impacts, particularly with reference to the impact of recovery and costs related to these new supply chain issues. A temporary interruption in trajectory is what we think is happening. As we move forward, we should see that strengthen. On your second question with regards to mix, I think a couple of things. One, just from a trend point of view, this year obviously has been quite lumpy in terms of deliveries of core vehicles to various different parts of the world with boat and shipment timing. I think there was a timing issue at the end of Q2 with China, and obviously a timing issue at the end of Q3 with the U.S. It's a little bit lumpy, difficult to see a trend through that. With regards to specials, I mentioned there was a mix impact from specials in Q3 vis-à-vis Q3 last year. That is really a function of, you know, it's predominantly Valkyrie deliveries. Last year was V12 Speedsters, and also within that, there's a customer mix dynamic where, you know, we're delivering certain cars at certain times of the year. That sort of impacts the margin structure as we move through those delivery profiles. Great. May I try to tease out some more detail on that first question? I mean, you've adjusted for your guidance. You've got quite an order book. Let's assume we meet again in Q4 results and kind of the quarter transpired as you're guiding to today. Going ahead then, what needs to happen in the business in Q1 and Q2 for you to be on the right path for cash flow break-even in 2024? Yeah. Look, Daniel, I think it's delivering to our plans. I mean, I'm not about to go into any more detail on 2023 and certainly not breaking it down by quarters. Sorry to perhaps disappoint you in terms of the answer, but the trajectory is certainly that. I think what, you know, what would please us moving into next year, and Amedeo and I talk about this quite regularly, is smoothening the profile, you know. You know, Q4 has historically been a strong quarter for the business, and as the dynamics worked out this year, that needs to be the same. What we'd like to see as we move into next year, for all sorts of different reasons, including some of those that I've already illustrated on the call with regards to working capital, we'd like to see a smoother profile as we move through the course of next year. I expect you'll still see a little bit similarity in the profile of the business that we might have seen over the last couple of years, but our objective is to try and smooth that and make sure that we can meet the strong demand on a more sort of routine basis and not have to manage the interruptions that we've seen over the last six months in the business. All right. Thanks. We are now going to proceed with the next question. It's from the line of Christoph Laskawi from Deutsche Bank. Please ask your question. Your line is open. Hi, good morning. Thank you for taking my questions as well. The first one will be on pricing. Obviously, ASPs in Q3 have been quite strong and better than expected. Considering that you are continuously facing headwinds, inflationary pressure now, on the supply chain side, should we expect further price increases into Q4 and early next year ahead of then the repricing of the new model lineup? Or are essentially all pricing measures done as of now, and we'll probably see a bit of an uptick also into Q4, but not necessarily transitioning into 2023, again, before the new launches? The second question will be on the DBX and the 707. I think you're stating that order intakes are 40%. It's around the same number you gave with H1. Could you provide detail on the length of the order book? Is it also into Q3, into Q2 next year as for the sports cars, or is it significantly different? Considering that there's a threat of a recession, next year, and you could argue that the DBX is somewhat less prestigious than other models that you're running, would you fear a negative demand impact more towards the H2 of next year in case we are moving into a recession in Europe or the U.S.? Thank you. Okay. Thank you for the questions. Let me try and talk through them, and Amedeo, if you'd like to add anything, then please. Now, with regards to pricing, look, I think we're very happy with the pricing dynamics that we've got in the business. I think you know, we've established pricing power. As you referenced, we've taken various different pricing actions over the course of the last 12 months. I think you know, some of those have recently filtered through, let's say. Obviously some of the pricing actions that we've taken are to protect customers who previously ordered cars. As we move into Q4, we'll keep pricing under review. I don't anticipate any new price increases during the course of the rest of this year. As we move into 2023, you know, we're currently in planning mode, and we'll see what actions we may or may not need to take on pricing, taking into account any ongoing inflationary pressures, new product launches and so on. That's sort of work in progress. On the third point, on the third question, I'll come back to DBX with regards to recessionary pressures. Look, I think the only thing that we can point to at the moment, in that regard is the order book, and the order book remains strong. We're not seeing any significant disruption at all in terms of order intake, from you know, ongoing speculation or the ongoing impact of you know, the macroeconomic position. Nothing to sort of talk about in that regard at the moment. With regards to DBX specifically, what I would say is, you know, the DBX707 launch has obviously been impacted by the sort of short- term supply chain issues that we've seen this year. In some regards, we're just getting some of the first cars into dealers. The dealers are all getting their demos, they're getting their showroom cars, the first customers are getting their cars. We expect, and have seen recently an acceleration in DBX orders. You know, the order book runs into the H1 of next year. We expect to see that strengthen as cars continue to be delivered into dealers, and the dealers have the opportunity to showcase those with customers. If you see what happens in the U.S., where we have completed in October the demo cars to all the dealers, we are increasing our request of new cars. The requests are always over our proposals. It seems the car is going well. Understood. Thank you. We are now going to proceed with the last question. It's from the line of Jose Asumendi from JP Morgan. Please ask your question. Your line is open. Thank you. Thank you very much. It's José Asumendi, J.P. Morgan. Just a couple of questions, Amedeo. Can you comment please on any gaps you see, you know, manufacturing processes or, you know, as to how Aston Martin launches the vehicles that you think from your perspective need to be addressed? The second question, I'd love to get your perspective when you compare versus your previous employer. The dependence that Aston Martin has on the U.K. market is obviously something that, you know, your previous competitor did not have. That large reliance on one of the markets, one of the regions only. How do you see that structurally for Aston Martin? Can you reduce this dependence that you have on the U.K. market to potentially also improve the ASP of the company going forward? Thank you. Okay. Going to your first question. I think the processes in Aston related to what is connected to the supply chain are strong enough to have to face what is happening there. Of course, we are continue to increase, and then during my speech, I explained that we have increasing our relationship with the customer, of course, trying to ask them to become not supplier, but the supporter of our work. They become partners of us. This is, I think, what is obtained at the latest quarter. I think we have obtained a good result on that. The processes inside the company are strengthening continuously. The situation that we have faced was not expected, but I think we have done what was needed in order to face the situation, and then we are going out of this kind of disruption. Again, on the second question, mainly, anyway, take in mind that our major market is U.S. If we compare U.S. with the other European market, U.S. is always the larger one. But anyway, the success we are having in U.K. is important. Then you feel that especially when with the customer we are having for the special version. All the special version we have presented was sold out in a short period of time. That means the brand is very strong, and we have a lot of loyal customers that continue to follow us. Thank you. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect your lines. Thank you.