Good morning, everyone. Thank you very much for joining the Aston Martin Lagonda First Quarter 2024 Results Q&A Call. Only a few weeks ago, at our 2023 full year results, we laid out a clear and exciting plan to transition from our previous range of core models to an entirely new and reinvigorated range by the end of 2024. But building on our 111-year history, this new core range, alongside our program of specials, uniquely positions Aston Martin, transcending the ultra-luxury and high-performance markets, and supports the delivery of our demand-led growth strategy into 2025 and beyond. Performance in the first quarter of 2024 was in line with our expectations and reflects the planned period of transition. Our portfolio transformation remains on track as we cease production and delivery of outgoing core models ahead of the ramp-up in production of three new core vehicles this year, in addition to our next ultra-exclusive special. Given we remain on track, we are reiterating our 2024 guidance and medium-term targets, which importantly includes achieving our targeted inflection point for positive free cash flow generation in the second half of this year. Following the exceptionally strong reception received for DB12, with orders now extending into the fourth quarter of the year, enthusiasm is building for the new Vantage, upgraded DBX 707, and our upcoming V12 flagship sports car, which we also confirmed today. Underpinning our confidence in the new model range is the feedback we're gathering from the extensive media test driving of the new Vantage, which is currently taking place in Seville. This significantly enhanced front-engine V8 sports car has achieved positive acclaim for performance dynamics, exterior styling, and of course, the completely new interior design and infotainment system, our own bespoke technology that will be embedded across our entire range by the end of the year. Driving impressions will be published from the thirteenth of May, and we're expecting similarly positive reviews to those received for the DB12, which is now a multi-award-winning car. As a result of this portfolio transition, and as we guided at the start of the year, we expect the timing of the model launches to drive significant growth in volumes and financial performance in the second half of this year, with the second quarter volumes and financials expected to be broadly similar to those seen in Q1. To support the second half production plans at Gaydon and St Athan, we're preparing the organizations accordingly, with recruitment for additional agency manufacturing roles progressing well. We were pleased to make two important announcements during the first quarter. We successfully completed our planned refinancing, securing improved terms on new five-year senior secured notes, following upgrades from leading credit rating agencies. This, along with our existing lenders demonstrating their continued support through a new increased RCF, marked a significant step in strengthening our balance sheet and liquidity position. And finally, we were also delighted to announce that Adrian Hallmark will become our new Chief Executive Officer later in the year. I'm personally looking forward to working with Adrian, who will bring to Aston Martin unrivaled experience in both the ultra-luxury and British automotive sectors to further progress our strategy. With that, I'd like to hand back over to the operator so we can start to take some questions. Thank you. Thank you. If you'd like to ask a question today, please press star followed by one on your telephone keypad now to enter the queue. When preparing to ask a question, please ensure your headset is fully plugged in and unmuted locally. Our first question comes from George Galliers from Goldman Sachs. George, your line is open. Please go ahead. Yeah. Good morning, Doug, and thank you for taking my questions. The first question I had was just with respect to how we should see the free cash flow evolving in the second quarter. Obviously, you've given very helpful commentary around how we should see the P&L evolving relative to Q1, but any color on the free cash flow and how confident you are in the liquidity, liquidity position would be much appreciated. Then the second question I had was whether you could give us any insights into the personalization levels you're seeing on the DB12. I don't know if you have any figures around the percentage uplift versus the base price, which you're seeing, and how that compares with the prior product. Also, whether you have any ambitions or targets with respect to personalization on the new Vantage. Then finally, just with regards to the DBX, look great to see you've updated the interior there. I think this is something that has been very closely followed by the investment community, but interested to know what actions you're taking to relaunch the DBX with consumers and ensures that consumers who maybe have turned down the car in the past due to the interior and/or potential new buyers are going to get into showrooms to evaluate and test drive this product. Thank you. Okay. Good morning, George, everybody. Okay, so on the first question, look, I think, operationally, Q1, from a free cash flow point of view, was in line with our expectations. Obviously, we also, as a result of getting the refinancing concluded in March, paid what we would normally pay in Q2, the interest early. So that had a sort of impact on the free cash outflow in Q1. Obviously, we're not gonna see a repeat of the interest payment in Q2. Still expect Q2 to be free cash outflow, but likely not to the extent that we saw in Q1. And then obviously, we're very much targeting still the inflection point from a free cash flow generation perspective in the second half of the year. And we're comfortable with the liquidity. So as I said, you know, in my opening, through the refi, we strengthened our liquidity position. The liquidity in the business is pretty much as it was at the end of last year. We're confident, as I said, in hitting that inflection point. So from a liquidity perspective, we're quite comfortable. Your second question on personalization. Yeah, I think we spoke a little bit about this at the full year results. So from a core range point of view, and you can assume that the DB12 was the predominant contributor to this at the back end of last year. You know, we saw the revenue contribution from options break through that sort of 15% barrier. And we will expect us to continue to see that move forward. And that was probably a shade over 200 basis points improvement from its predecessor. So, you know, as we bring the new range to market, and announced this morning, obviously, the launch of the V12 later in the year, with the V12, with the Vantage, continuing with the DB12 and obviously with the 707, we would expect to continue to see an improvement in, in revenue from options uptake. And it's also why we continue to focus on enhancing the customer experience. So, you know, we've talked about the flagship store in New York, we've recently opened, another, another store in, in Tokyo, in order to demonstrate the full range of personalized options available to our customers. So, you know, it's something that we're, that we're focused on, we're targeting, and, and we're happy that we're seeing good improvement. With regards to the DBX, yeah, look, we're delighted to finally get the, get the new car launched. We think that the, the upgrade to the interior and the infotainment, you know, is a, is a response to a lot of the customer feedback that we've had on the car. And obviously, it would have been difficult to have the DBX 707 sat alongside, the DB12, the new Vantage and the new V12 in showrooms, with the interior not being updated to the quality of those cars. So we're delighted that that's now in flight and, and will be hitting the market soon. And with regards to following up with potential customers, look, there's a whole suite of activations planned, and there'll be a media program during the course of this month. So we expect to have, obviously, reviews of the new DBX707 out in the not-too-distant future. And, you know, those follow-ups, I think, from the dealer network will largely focus on, you know, customers who've shown an interest in the DBX707, but perhaps not followed through. But also, I would expect us to really start being able to attract customers from elsewhere, which is encouraging what we're seeing on the DB12. So in the DB12 order book, we're seeing a lot of conquest customers from other brands. I think now that we've got this whole new portfolio, which is gonna be, you know, sparkling new too in all the dealerships by the end of this year, that positions us very, very well from a competitive perspective. Thank you. Next question comes from Henning Cosman, from Barclays. Henning, your line is open. Please go ahead. Yeah, good morning, everybody. Thanks for taking my question. Doug, it's good to hear you so constructive this morning. I think the market looks a little bit worried here, arguably in the context of the Q1 earnings and free cash flow level. So I wanted to ask you to perhaps help us reconcile the two. First question is maybe to talk about arguably the risks here a little bit, or indeed, to help us alleviate these concerns. Execution, going from around 1,000 units a quarter or so now to 2,500 run rate in the second half. How safe is that? How similar are the new cars to the predecessors? How similar are production processes? How established are the supply chains? If you could talk to that a little bit, do you see any risk there at all, or, shouldn't we be worried? Second question, you talked about the exceptionally strong reception of the DB12. I think we, we had previously hoped that the car would be sold out for all of 2024, and, and indeed, a bit earlier. Yet the orders at this point, reach into Q4. Could you remind us how you think about the ideal level of length of order book? And do you expect a similar pattern here for the other new cars, in terms of how soon will the order book be, how long, including for the upgraded 707 or the Vantage? Then finally, related to that, do you expect the new special to be sold out at launch? And can you give a little bit more details in terms of type of car or price or units at all? Thank you. Okay, no worries. So look, on your first question, Henning, what I would say is, you know, it's the plan, and it's kind of always been the plan. And as we've talked about, this year is the plan by design, and we've always had this cadence of model launches coming. So you know, we've known for quite some time, and we've guided you guys, I think, to expect it in the market, you know, a significant uplift in the second half of the year. So we're planning on that basis. We're getting ourselves prepared on that basis, supply chain prepared on that basis. And of course, you know, the 945 wholesales that we did in Q1 isn't typical, and you know that's not what we can deliver in a normal cadence. You know, in the first quarter, we only really delivered DB12s and the sort of last in the model year 2024 of DBX707. So we've always known this ramp up is coming, and we're well prepared for it. You're right, execution is key, but we're confident in our ramp-up capabilities. Obviously, with the DB12, we experienced a slight hiccup in Q3 last year. The ramp-up on the Vantage and the new DBX707 is currently going to plan. First wholesales on those cars will happen imminently. So we're in a good position. We haven't seen or encountered any of the issues, such as the sort of integration of the software that we had with the DB12 last year, by virtue of the fact that the Vantage, the DBX707, and indeed, the V12, when we come to launch it later in the year, all rely on the same platform. So the learning that we've done and gone through in the second half of last year applies to, you know, what we're bringing out for the remainder of this year. So, you know, we've got confidence. Production processes, I think you mentioned, they're very, very similar. So, you know, with the DBX 707, it's an interior upgrade, but the ramp up will be a little bit quicker than it will be on the sort of all-new Vantage, if you like. But those ramp up plans are in line with our expectations currently and take us, you know, ramping up through the second quarter of this year and then into full rate in the second half of last year. And then similarly, I sort of outlined in my opening, you know, as I said, we've been preparing for this, expecting for this, recruiting for this, and we're making very good progress in terms of being ready for what we know is gonna be a big Q4, sorry, a big second half. And then, you know, with regards to our precedent of delivery, I think you just need to look at the last couple of years in terms of Q4. We've needed to deliver, and we have the execution capability to do that. And we've demonstrated that across both plants, with St Athan being very, very busy in Q4 2022, and Gaydon being very, very busy in Q4 2023. So we have the execution capability. It's been the plan, continues to be the plan, and we're confident in delivering on it. And then your second question on order book. So yeah, look, I mean, we're pleased with where the order book's got to. Obviously, as I said, we had a little bit of disruption with the DB12, but I think, just had a slight hiccup in progressing that order book as quickly as we'd originally anticipated. We're confident that with the new cars, we're gonna get the order book up to, up to, you know, where we'd like it to be, in the not too distant future. I think as soon as we see the output from the media drives, both on the Vantage, which, as I said, is happening now, and then the new DBX 707, which happen in May, you know, they'll provide a real catalyst to the order book on those two cars. So look, I think we're confident in the products that we're bringing to market. We're confident that they will create an awful lot of, a lot, a lot of demand. On, on the order book, I mean, we don't really have a set idea of how long we'd like the order book to be, but I think I've said before, from my point of view, you know, getting it to 12 months across the core range would be, would be, would be fantastic, but not a hard target, just, something that I think would be, would be good for us. On the special, we can't give you any further details, at this stage. And with regards to your question of whether it will be sold out on launch or not, I think precedent tells us that we have, you know, a strong record, in that department. Based on precedence, we're confident that we'll be in that position when we come to provide you the details and launch that special in the not too distant future. Thanks, Doug. Sounds reassuring. Appreciate it. The next question comes from Horst Schneider from Bank of America. Horst, your line is open. Please go ahead. Yes, good morning. Thanks for taking my questions. I've got a few left. Again, coming back to DB12 and also ASP. So we see in Q1 that your ASP has slightly declined. We know that with new models you basically try to raise prices by something like 10%. So therefore, it would be great if you could give some color on how the customers basically react to these price increases. Is it necessary, in that context, maybe to increase the rebates as well, or is there no pricing concern? And also, with regard to the DB12 feedback, maybe you can tell us what's the regional demand, where you see maybe some strength, some weakness. We hear some from Porsche, for example, that Asia is weakening. Is that the situation for you as well? The last one that I have may be difficult for you to answer, but when the new CEO arrives, is there kind of agenda, special topics he needs to work on, from a strategic perspective? Thank you. Morning, Horst. Okay, so on the ASP, so look, we're pleased with the way the ASP is progressing, both on core and across the entire range. But I would say that if you—I don't quite know which cars you're referring to, but if we take Q1 2024 versus Q1 2023, we would have grown on a constant currency basis, so there was a bit of a FX headwind in there. And we're also lapping deliveries of cars like the V12 Vantage that happened in the first half of last year. So from an ASP perspective, you know, no concerns from our point of view. I think, you know, pricing has been received well to date on the new models. And as I think it was George who asked the questions about options and personalization, you know, we're seeing an increase in that as well, on top of obviously the pricing that we're asking for the car, based on the fact that the cars are significantly enhanced versus their predecessors. So no material concerns on ASP. We expect to see growth on the core ASP for the full year, and the same for the entire range. So, you know, we're good as far as pricing is concerned. And then on your question on the order book and the sort of regions, I think the only thing I would say is that we're not, you know, the order book is fairly consistent with our geographical split, so there's no material difference. We still haven't made any DB12 deliveries into China, so that will come later in the year, and then we'll see, you know, we'll see how, we'll see how things settle from a regional point of view. But there's nothing, there's nothing material, Horst, that I could talk about from a regional perspective. You know, China, we talked about a little bit last year, and the reasons why the volumes were soft there. But as we bring in the new range, I think we'll start to see how the regions settle, but nothing material from, sort of, a ratio point of view versus what we would expect. Mm-hmm. All right. And then the third question, I think, yeah, you're right, it's a little tricky for me to answer. I, you know, my focus, as you would expect it to be, and as you've heard from me, quite consistently, is on ensuring this business executes its plan. And as I just said, in reply to Henning, you know, we've had this plan formulated for quite some time. That is fully where my focus and the focus of the rest of the leadership team is, for the time being. I don't expect there to be a significant deviation, when Adrian comes in. In fact, I think we'll double down and execution will remain the absolute priority. We know the priorities in the short term are, you know, get the product portfolio launched, build that demand, hit the free cash flow inflection point in the second half of this year, and take that momentum into 2025. So that's the short-term focus, and I, and I can't see that changing. As I said, look, we're looking forward to having Adrian in. He's, he's very well experienced. But, you know, we know what we're focused on delivering here. On this free cash flow execution again, or, the inflection point in H2, is that more Q3 or Q4? You can say that already now or too early? We expect the second half to be free cash flow positive. Okay. No specification. All right. Thank you. That's fine. Good luck. The next question comes from Akshat Kacker, from J.P. Morgan. Your line is now open. Please go ahead. Morning, Doug. Akshat from J.P. Morgan. Three from my side as well, please. The first one on the gross profit development in the quarter. Is it possible to quantify the fixed cost under absorption or the operating deleverage that you've seen specifically in Q1, as it looks like operating costs for the business right now are running far ahead of deliveries that you expect in the second half? The second question is on the DBX. Could you please talk about the sharp drop in sales, sales are down 63% in Q1. I do understand a refresh is coming out in Q3, but the new car was launched only 10 days ago, so some more flavor on that would be helpful. And the last one is again on core ASP. I think you've clearly laid out all the reasons why it's down in Q1, but when we think about core ASP on a full year basis, do you still expect it to be up year-on-year, excluding FX? Thank you. Hi, Akshat. Okay, it was a little tricky to hear you, but I'll answer the questions that I think you asked, and if I haven't answered your questions, then have another—feel free to have another go. So I think the first question was on gross margin and you know, the absorption of some of the cost base in the first quarter. So you know, if that was your question, I think you're right. Obviously, for example, the DB12 carried a lot of the costs of Gaydon in the first quarter. So given that was the only sports car that was really in production or certainly being produced for wholesale in the first quarter, the DB12 carried a lot of the fixed and semi-variable costs of Gaydon through its margin. I would reiterate that we fully expect all of the core sports cars and the DBX707 to hit that targeted 40% gross margin when they're running at rate. So obviously, whilst we're not running at rate, there is a little bit of margin dilution from the absorption of some of that cost base. And then talking about OpEx, we actually saw SG&A broadly flat in Q1 this year versus Q1 last year. We saw an increase in our non-capitalized engineering spend, but I think that's just phasing, and I don't expect that to be something that we'll see running for the remainder of the year. So I think costs are pretty well under control. And as I said, I think as we, you know, as we ramp up production on the other core vehicles that are coming to the market, as we move through the year, you'll start to see that absorption of cost disappear from a margin point of view. On the DBX, look, I think it's quite simple. So we're aiming to ensure a smooth transition between all of the outgoing models with all of the incoming models. So not only for the DBX707, but also for the Vantage. So we're sort of carefully managing the flow of cars into the network. And then what I would say, and I don't mean this to be... You know, I'm sure you understand this and appreciate it, but remember that our sales reflect wholesales into the dealer network, and that then there's the retail sales, which are the dealer sales from them to the final customers. And obviously in Q1, retails would have comfortably outpaced wholesales. So from a sort of, you know, sort of rhythm basis of cars reaching customers, that would have been much more consistent than you've seen in our wholesale numbers. So it's all about a smooth transition between the old and the new, and managing the flow of cars responsibly into the network. And then your final question on core ASP, the answer is yes. So we continue to expect to see the core ASP grow year-over-year, driven by the things that we talked about earlier. Very clear. Thank you, and sorry for the bad line. It's okay. Next question comes from Christoph Laskawi, from Deutsche Bank. Christoph, your line is open. Please go ahead. Good morning, and thank you for taking my questions. Two, please. One, again, a follow-up on the ASPs. Sorry to come back to that. Should be a quick one, though. If you look at Q1 versus Q4, is the change really like, basically only mix, or is there also some end of cycle discounting that we see in part reflected? And then just the second question on the working capital phasing, obviously, quite a sizable outflow in Q1. You already said Q2, cash flow is still negative. Should we expect roughly similar-sized outflows or that even to be close to neutral in Q2, in case you can comment? Thank you. Yeah, sure. Morning, Christoph. Thanks. So Q4 2023 versus Q1 2023 on the ASP, you're right, largely mix. So, you know, for example, there were quite a number of DBS 770 deliveries in Q4. Obviously, they didn't repeat in Q1. Obviously, with the lower DBX707 volumes as well versus Q4, that impacts a little bit the ASP. So I've hopefully confirmed that nothing to worry about from an ASP point of view, from our perspective at this stage, and we're still expecting that growth across the full year, and obviously, that supports the achievement of the 40%+ gross margin. So, you know, that was really the nature of the difference between the end of last year and the beginning of this year. With regards to working capital and free cash flow, yeah, so look, we expect free cash flow still to be an outflow in Q2, but to be improved versus Q1. I think you'll, like from a working capital perspective, you're probably likely to see a continuing increase in inventory as we ramp up production of the new vehicles. And you'll continue to see an outflow in terms of deposits held as we continue to deliver the remaining Valours and Valkyries through the rest of this year. Understood. Thank you. The next question comes from Philippe Houchois from Jefferies. Philippe, your line is open. Please go ahead. Yes, thank you, and good morning. It's just—my question is more on the evolution of the gross margin. So I'm looking at how you, what you produced today. Twenty-five percent of your volume was DBX, which I think is below the 40% threshold. The special should be above, most of the front engine should be above as well. And so why aren't we above 40% already? And how do we get to 40%? What, what timing? Keeping in mind, because you give the gross margin before depreciation, your gross margin is not that volume sensitive. So I'm just trying to understand how the mix progresses and when we get above 40%, in gross margin, please. Hi, Philippe. Yeah, thanks. So look, as I said, for gross margin for the full year, we still expect it to be at 40% across the entire business, so that's still our expectation for the full year. Q1 was impacted, as I said, by the absorption of costs across the core range. The specials has obviously helped and contributed to gross margin achievement in the first quarter. But as I said, that sort of transition nature of the core portfolio means that we're not hitting 40% on the cars that we're selling in Q1, but that we will do when they're running at rate. And all of the core range will hit 40% when they're running at rate, and as we've alluded to, we expect that to be in the second half of this year. But I think importantly, you know, we talked about achieving that 40% gross margin across the entire year for 2024, a few weeks back. That hasn't changed. That is still our expectation. Okay. And then, on the DBX, I think many of us kind of wonder why DBX did not succeed. I think looking back, probably initially underpowered, and you've addressed that. And then the human interface wasn't very modern, so you've addressed that. To what extent, the 250 cars you shipped right now, the old version, are they becoming unsellable pretty quickly? And what's the inventory situation on DBX that might force some discounting of the old one as the new one comes in and is the right power and the right HMI? Yeah, look, first of all, I don't think it's fair to say the DBX hasn't been a success. I think, you know, we've seen it take considerable market share in the ultra-luxury, high-performance SUV space in a number of markets. So, you know, we're pretty happy with how the DBX has performed. It's added, you know, roughly 3,000 units to what this business delivers, and is a significantly important part of the portfolio going forward. So, you know, we're very happy with the DBX. We believe that with the upgrade, we're addressing the key element of customer feedback, which is upgrading the interior and the infotainment. So we're confident in the future for the DBX. As you know, we're focusing solely on the DBX707 now going forward. You know, with a link to your first question, that should support the margin generation. So look, we're good with the DBX, and we believe it represents a strong part of our portfolio and our offering going forward and is an important part of the overall mix. Right. And one last question, if I may. I was hoping that Mr. Stroll will be on the call, but he's not. I'm just wondering, I think in the U.K., the position of executive chairman is always a bit ambiguous, and I'm just wondering, so now you're hiring a high-profile CEO, Adrian Hallmark. We know him, we respect the work he's done at Bentley. I guess my indirect question to Lawrence Stroll is whether he's willing to give up the executive chairman position so that he gives Adrian a whole rein of running the business the way it should be run? I think we can leave that question on the transcript. Exactly. Philippe. I'm not gonna attempt to answer that. Of course, I don't expect you to. I was just, But look- ... I'm sure Lawrence listens and would have a view. Yeah, look, Philippe, you know, as I've said, I'm looking forward to working with Adrian. He's got a lot of strong credentials in the automotive space. I think you guys all know him well, and I think his appointment was received positively. And that said, working with Lawrence, I think, you know, that's a strong combination. Obviously, Lawrence is a hugely important piece of the story here. He's brought an incredibly strong roster of shareholders into this business, and he's incredibly passionate about it. So, you know, I enjoy working with Lawrence as well. I'm looking forward to working with Adrian, and I'm looking forward to seeing what, you know, the new leadership team can deliver. As I said, we're focused on delivering the plan that we've laid out before us. I don't think that's gonna change, and I think the future is exciting and full of opportunity. So that's what we're focused on. Understood. Thank you. Okay. So, thank you very much for your questions. Thank you for listening, and I'm sure that, if there's any follow-ups, the team will be happy to discuss with you. Many thanks. This concludes today's call. Thank you very much for your attendance. You may now disconnect your line.