Aston Martin Q1 Revenues Zooms Up, Expects FCF To Turn Positive In H2 2023

Aston Martin Lagonda Global Holdings plc ARGGY reported Q1 2023 revenues increase of 27% Y/Y to £295.9 million.
Revenues benefitted from a favorable mix from the DBX707 and V12 Vantage model cars, increased volumes and strong pricing (core average selling price up 19% Y/Y) along with increased Aston Martin Valkyrie programme deliveries (18 vehicles in Q1 vs 14 a year ago).
Wholesale volumes increased 9% Y/Y to 1,269 units, led by higher growth in DBX volume (+59% Y/Y). However, GT/Sports volumes declined owing to ongoing transition of sports car sales ahead of new launches in late-2023.
Retail sales were higher than wholesales in Q1 on continued strong demand across the portfolio, with around 95% of the current range of GT/Sports cars sold out for 2023 before impending launches and DBX order book to the end-Q3 2023 (over 70% accounts for DBX707 models).
Adjusted EBITDA rose 24% Y/Y to £30.2 million, aided by higher revenues and gross profit (+21% Y/Y), with an adjusted margin of 10%.
The company reported an adjusted operating loss of £(47.8) million in Q1, wider than £(34.3) million a year ago.
Free cash outflow stood at £(118) million in Q1 compared to an outflow of £(25) million a year ago, with increasing capital expenditure and working capital outflow. Net debt declined 9% Y/Y to £868.1 million.
2023 Guidance, unchanged: Aston Martin expects wholesale volumes to grow Y/Y to 7,000 units (vs consensus of 7,134, as per Reuters), an adjusted EBITDA margin of around 20% and capital expenditure and research & development expense of about £370 million.
The luxury carmaker expects H1 2023 adjusted EBITDA and FCF to be the same as in H1 2022 and projects positive FCF in H2 2023.
The company expects strong growth in new product deliveries in H2 2023, led by the Core and Specials ranges.
Medium-Term Outlook: Aston Martin reiterated its guidance of wholesale volumes of around 10,000, revenues of about £2 billion, and adjusted EBITDA of about £500 million in 2024/25.
Price Action: ARGGY traded lower by 5.2% at $2.64 on the last check Wednesday.
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