Aston Martin Lagonda Global Holdings PLC (LON:AML) reported a sharp decline in sales and earnings in 2020 as the coronavirus (COVID-19) pandemic impacts the operations and stock levels at its dealerships.
In its results for the year to 31 December, the supercar maker reported a pretax loss of £466mln, wider than the £119.6mln loss reported in the previous year, as revenues tumbled 38% to £611.8mln.
The company reported retail sales of 4,150 vehicles, down 32% year-on-year due to the impact of COVID-19 on dealership operations, while actions taken to reduce dealer stock meant wholesales also fell 42% to 3,394 cars.
Despite the bleak performance, the company said its fourth quarter had been the strongest in the year, with 3% revenue growth and positive adjusted earnings (EBITDA) due to what it said was a full quarter of sales. Aston also said thanks to its refinancing over the year its year-end cash balance had risen to £489mln from £108mln last year.
The group also highlighted “significant progress” in rebalancing its supply to demand, adding that it has seen strong demand for its newly launched DBX model with a new variant planned for launch in the third quarter of 2021.
Looking ahead, Aston said it remains confident in achieving its medium-term targets of around £2bn in revenues and £500mln in adjusted EBITDA by 2024/25, adding that for 2021 it expects to deliver wholesales of around 6,000 as well as an adjusted EBITDA margin in the mid-teens percentage.
“The aggressive reduction of dealer GT/Sports inventory is expected to be largely complete in Q1 with the building order book ahead of our original expectations. DBX dynamics are also strong, orders are in-line with our expectations and a first variant is planned for launch in Q3. Specials are expected to be significantly weighted to the second half and particularly Q4”, the company said.
The company also said that trading in the current year to date has been in line with expectations despite the uncertainty surrounding the impact of the pandemic.
"On joining Aston Martin, my first priority was successfully launching our first SUV, the DBX. Demand is strong and we have wholesaled 1,516 units with all dealers now having their demonstrator and floorplan models. Actions were already underway on rebalancing supply to demand for GT and Sports cars, where we have made tremendous progress and are ahead of plan with encouraging signs for demand”, Aston’s chief executive Tobias Moers said in a statement.
“Our future product plans are underpinned by the landmark strategic cooperation agreement signed with Mercedes-Benz AG giving access to customisable and world-class technology…This enables us to focus our development time and investment on the areas that will truly differentiate our products. A second key priority for me was to carry out a comprehensive review of the business to ensure we can deliver our plans. "Project Horizon" has been launched to revitalise our products and deliver a level of operational excellence, agility and efficiency throughout every aspect of the organisation. In support of this, we have further strengthened the management team adding experienced hires with strong luxury and automotive backgrounds. We also have significant benefit from the global reach of the Aston Martin Cognizant F1 team from this season to further drive brand awareness. With these actions and the re-financing, we have secured the right team, partner and funding to deliver our transformational growth plans to create a world-class luxury automaker", he added.