Tata-owned Jaguar Land Rover has reported financial results for the three-month period ending 30 September 2019 which show a return to profitability.
Revenue increased 8.0% year-on-year to GBP6.1 billion, driven by higher wholesales (up 2.9%) and favourable product mix. While total retail sales were down slightly (-0.7%), performance in China improved sharply, up 24.3%. Global retail sales of the new Range Rover Evoque were up by 54.6%, Range Rover Sport rose 17.5% and Jaguar I-PACE retails were up by 2,593 units.
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Jaguar Land Rover generated pre-tax profits of GBP156 million in the quarter, GBP246 million better year-on-year. The improvement reflects favourable wholesale volume and mix, operating costs, depreciation and amortization, and foreign exchange. Profit margins also significantly improved with an EBIT margin of 4.8% and an EBITDA margin of 13.8%.
TBmpany’s Project Charge transformation programme contributed GBP162 million of cost improvement and GBP285 million reduction in investment spending in the quarter. With GBP2.2 billion efficiencies achieved to date, Jaguar Land Rover said it remains on track to achieve the full targeted GBP2.5 billion by 31 March 2020 and further improvements beyond then.
CEO Ralph Speth said: “Jaguar Land Rover has returned to profitability and revenue growth. This is testament to the fundamental strength of our business, our award-winning products, new technologies and operating efficiencies.
“We were one of the first companies in our sector to address the challenges facing our industry. As such, it is encouraging to see the impact of our Project Charge transformation programme and our improvement initiatives in the China market start to come through in our results.”
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By GlobalDataFree cash flow was negative GBP64 million for the quarter, a GBP559 million year-on-year improvement. This progress reflects both better profitability and a GBP154 million decrease in investment spending to GBP841 million for the period. At quarter end, Jaguar Land Rover had cash of GBP2.85 billion and a GBP1.9 billion undrawn credit facility. Since then, the company has completed a GBP625 million five-year amortizing loan facility backed by a GBP500 million guarantee from UK Export Finance (UKEF) and signed a new GBP100 million working capital facility for fleet buybacks.
Jaguar Land Rover says it is also continuing to execute its product strategy. The first customer deliveries of the New Defender will begin from spring 2020.
For the financial year ending 31 March 2020, Jaguar Land Rover continues to expect year-on-year improvement and to target a 3-4% EBIT margin with cash flow increased over last year. Speth added: “Our people have responded very positively to the challenging circumstances over the past year. The improved performance this quarter reflects their ongoing passion and determination. Looking forward, we will continue our product offensive, broadening our range of electrified vehicles on the journey towards our Destination Zero future.”
