Earnings call transcript: Aston Martin’s Q2 2025 sees mixed results with revenue drop

Published 30/07/2025, 08:54
Earnings call transcript: Aston Martin’s Q2 2025 sees mixed results with revenue drop

Aston Martin’s Q2 2025 earnings call revealed a challenging financial landscape with a 25% drop in revenue compared to the previous year, amounting to £454 million. Despite launching new vehicle models, the company reported an adjusted EBIT loss of £122 million. According to InvestingPro analysis, the company’s overall Financial Health Score stands at 1.5, indicating WEAK conditions. The stock market’s reaction remains unreported, but operational improvements and future projections provide a mixed outlook.

Key Takeaways

  • Revenue decreased by 25% year-on-year to £454 million.
  • Adjusted EBIT loss stood at £122 million.
  • New model launches, including the Valhalla hypercar, show promising demand.
  • Improved production efficiency and positive cash flow expected in H2 2025.
  • Significant net debt of £1.38 billion remains a concern.

Company Performance

Aston Martin faced a challenging second quarter in 2025, with revenue falling by a substantial 25% compared to the same period in 2024. The company maintained stable wholesale volumes at 1,922 units, but the financial strain was evident with an adjusted EBIT loss of £122 million. Despite these setbacks, the company is pushing forward with new product launches and operational improvements.

Financial Highlights

  • Revenue: £454 million, a 25% decrease from 2024.
  • Wholesale volumes: 1,922 units, stable year-on-year.
  • Average Selling Price: £192,000, a 7% increase.
  • Adjusted EBIT: £122 million loss, a 22% decrease.
  • Net debt: £1.38 billion.

Outlook & Guidance

Aston Martin projects positive free cash flow in the second half of 2025, with expectations of modest wholesale volume growth for the full year. The company is targeting an improvement in adjusted EBIT towards break-even and aims to maintain gross margins in line with the previous year. Capital expenditure is anticipated to be around £400 million.

Executive Commentary

Adrian Hallmark, CEO, emphasized the company’s strategic direction, stating, "We’re transitioning from a high potential to a high performing company." He also highlighted the significance of the Valhalla hypercar, noting, "Valhalla will mark our entry into a new segment of the market."

Risks and Challenges

  • High net debt levels pose financial risks.
  • Revenue decline indicates potential market challenges.
  • Global luxury vehicle market faces tariff complications and subdued demand in China.
  • The transition to hybrid and electric vehicles requires significant investment.
  • Inventory management, particularly in China, remains a concern.

Q&A

During the earnings call, analysts inquired about the impact of US tariffs and the company’s strategies to mitigate their effects. The management confirmed a strong order book for the Valhalla hypercar and discussed measures to enhance liquidity, including a £110 million boost from the sale of their Formula One team.

Full transcript - Amlin (AML) Q2 2025:

Adrian Hallmark, CEO, Aston Martin: Good morning everyone and thank you for joining us today for Aston Martin’s Half one twenty twenty five results. It’s a pleasure to be here alongside Doug Lafferty, CFO and James Arnold, Head of Investor Relations. Before Doug takes you through the financial performance in detail, I’m going to provide a summary of our key achievements and areas of focus during the first half, as we prepare for a planned increase in volumes, will drive enhanced financial performance in the 2025. This includes the expected delivery of positive free cash flow generation in the second half, and a 2025 adjusted EBIT improving towards break even. As we outlined at the 2024 results, following an intense period of product development, our focus has shifted from pure volume orientation to value driven growth, in order to create a sustainably profitable business model.

And I’m delighted to report that we’re progressing well with our operational and cost transformational programme, the details of which I’ll share with you shortly. Our first half performance, as guided, reflected our disciplined approach to production and deliveries. This resulted in retail volumes outpacing our wholesale volume by over 40, as we seek to optimize our stock levels around the world by model. We’re already seeing the benefits from the investment in our next generation of core models through strong ASP growth, up 7% to £192,000 And this will further improve as we continue to launch new derivatives including the recently announced Vantage S, DBX S, Vantage Roadster, and Vanquish Volante, and drive further option sales. Supported by robust demand and a disciplined supply policy, once these core models become established across our markets I expect to see our forward order book improve beyond the current five month horizon.

As we look at the broader global operating environment, tariffs imposed by the US government have been a particular issue for us to deal with, adding a degree of uncertainty to global trade and economic performance. While the UK government moved quickly to secure a trade agreement with The US, announcing this on the May 8, the scheme only became operational on the June 30. This left us with twenty four hours to invoice the entire quarter worth of vehicle sales in The US. I’m pleased to say, thanks to the planning and preparation that our teams achieved, we worked tirelessly with US customs and we were able to execute this mammoth task. The deal agreed by the two governments is a quota based mechanism under which the first 100,000 UK made cars imported into The US each calendar year qualify for a reduced tariff of 10%.

And any UK made cars sold beyond the 100,000 units will attract the higher rate of tariffs of 27.5%. We thank the UK government for their efforts in negotiating this preferential rate, which currently puts The UK car makers at a better position than those in many other countries. But at the same time let’s not forget the 10% rate remains far higher than the previous rate of 2.5. As a consequence of these changes, we have already implemented a dynamic pricing strategy, announcing in June an initial 3% increase in The US as we seek to mitigate the financial impact of the 10% tariff. We continue to engage with the UK government regarding the first come first served quota mechanism.

This is due to the uncertainty that it creates in terms of planning and forecasting the current financial year and then quarterly planning from ’26 onwards. We have been assured that government understands our concerns and we will await further clarification on how we will ensure that there is a fair allocation within this US quota, providing the whole UK car industry with the ability to access this 10% rate on an ongoing basis. Also, when we look at the global operating environment, the market for luxury vehicles in China remains extremely subdued. As such, we’re taking further action to support our China dealer partners to reduce their stock levels, and this will help us to benefit from our next generation of cars and improve market conditions that we expect to emerge in the 2026. Finally, I’m pleased to announce today that we shortly expect to complete the sale of our shares in the Aston Martin Aramco Formula One team.

This follows the announcement in March of our intention to enhance liquidity through the sale alongside further investment from the Yewtree consortium. In total, these combined activities will exceed our guided liquidity enhancement of £125,000,000 with the gross proceeds alone from the AMR GP sale expected to be around £110,000,000 Adjusting for the forthcoming sale, total liquidity at the end of the period will have increased to circa positioning us well ahead of our expected free cash flow generation in the second half of this year. Now moving on to recent exciting developments across our core product range. Our product innovation focus, which will support sustainable profit growth in the future, has seen the launch this year of four new derivatives as promised. These include the Vantage Roadster and Vanquish Volante convertibles, in addition to the new performance focused DBXS and the VantageS.

As I mentioned in the Q1 results, the S brand has a long association with Aston Martin, and remains very much a part of our strategy moving forward to introduce derivatives through the life cycle and across the whole product range. This keeps our models fresh and continues to offer customers a growing range of choice with greater focus on personalization and options. I’m confident these derivatives will support a strong ramp up in volumes and financial performance in the second half of this year and beyond. As I’ve mentioned previously, Aston Martin is fortunate to be one of a few global brands who can successfully deliver ultra exclusive specials. These models epitomise the innovation and performance at the beating heart of the Aston Martin brand.

Continuing with this momentum in specials, a key milestone for twenty twenty five is the eagerly awaited delivery of Valhalla, our first mid engine plug in hybrid electric vehicle, and it’s a game changer for the brand, bringing hypercar performance to a supercar price segment. We expect it to be a significant contributor to our financial performance over the next two to two and a half years. Valhalla will mark our entry into a new segment of the market for Aston Martin, as well as a step forward in our commitment to hybrid and electrified technologies, with performance at the core of their purpose. With the initial low volume production now underway, deliveries are expected to commence in the 2025, and we have been advancing customer specifications for around one third of the vehicles already ordered and scheduled into production. We plan to build just nine ninety nine units over a two and a half year period.

And we already have a twelve month order book in place. This impressive order book is prior to customers even driving the vehicle and in the coming weeks we will have prominent dynamic and static displays following the great experiences we already delivered at Monaco and Goodwood Festival. Looking ahead to the third quarter of this year, media and customer drives will be happening on a global basis to further develop the awareness of this vehicle. As we enter the final stages of the project, one of the key outstanding processes is the timely completion of certification and homologation across our key markets. We’re currently working successfully and tirelessly to ensure that we meet all of those timelines, and it looks today like we’re fully on track.

Following the return of Aston Martin to the pinnacle of endurance racing with the Valkyrie Hypercar, and its recent participation at Le Mans and the World Endurance Championship, we announced the launch also of 10 track only Valkyrie Lemont specials. We expect about half of these to be delivered in 2025, with the remainder in 2026. Now moving to a key focus for us this year: our transformation programme. This forms part of a journey as we transition from a high potential to a high performing company. At the twenty four financial year results, I took you through the reposition of the business based on the unique foundations of Aston Martin, underpinned by the strategy and investment in recent years of Laurence Stroll, the Yewtree Consortium and all of our strategic investors.

I want to introduce the same passion and energy that we’ve brought to our brand and products into how we operate as a business. And we’ll do this alongside instilling operational excellence and discipline. Shortly after I joined last year, we’ve been analysing all areas of the company to identify how we benchmark and where significant improvements can be made, and I’m delighted to say that there are many areas and opportunities, as you’ll see in the coming slides, and we’re already starting to demonstrate real progress, which in the years to follow will enhance our performance as we realise the full potential of this iconic brand. Starting with brand awareness and demand generation, which should enhance the quality of our order book. We set out clear plans this year to operate with a disciplined approach to production and to supply, that position us strongly as we enter 2026.

In ’26 we will have our enhanced range of core models and new derivatives, and in addition to these we’re seeking to maximize the value of every vehicle, which is why we’re continuing to deliver additional options to offer customers and meet the desire for even greater personalization. We’ve maintained a stable rate of contribution to core revenue at about 18%, and in the future we’ll look to build on this. Customer loyalty and retention is another key factor that will underpin our future success. We have a great opportunity with the upcoming Valhalla, with over 50% of the orders to date from customers new to Aston Martin. Not only does this demonstrate the power and awareness of our brand, but it also provides us with the opportunity to showcase our core range of cars to circa 500 new customers.

From a cost base and productivity point of view, we’ve continued to work with our colleagues across the business to deliver on the previously announced headcount reductions. In line with guidance, the operational cost savings from this will start to be realised in the second half of this year, with a circa annualized rate of savings just from this single activity. But that’s not the end. There are other savings that we’re activating across the business through a disciplined approach, and we expect to deliver operating leverage with a 25 year SG and A falling well below the £300,000,000 that we saw in ’24, supporting our goal of improved effectiveness. We also successfully completed the rollout of our new ERP system in our production sites.

The rollout at Gaiden in quarter two was executed with minimal interruption to the business, thanks to careful planning and intense execution. We’ve progressed to modern, integrated and efficient clad based systems that will drive greater operating efficiencies across the supply chain. A key to product innovation through life cycle is offering our customers the most relevant, exciting and compelling vehicles in the sector. We’ve clearly demonstrated that already with the derivatives I’ve outlined we can assure you that we’ll have more to offer in the future as we progress towards hybrid electrified performance technology. And finally, delivering excellence in quality and product launch cycles here we plan to build on the significant learnings from the intense period of new launches that we’ve been through over the past couple of years.

In particular, ensuring that we provide sufficient capacity and time between launches to be able to deliver programs and ramp ups effectively. And Valhalla now remains our key focus, as I’ve mentioned, and we are on track for the first customer deliveries in the last quarter of this year. We also need to deliver the highest standards and consistency across our portfolio. We’ve already seen significant improvement in cars completing production process right first time, from about 65 during the 2024 to 95% today, as I previously indicated was our target. This has huge benefits across the organization, removing unnecessary costs and efficiencies and delays.

Also benefiting the business is the decision that we announced in quarter one this year to invest in software and infotainment system improvements in our cars. This, in addition to some further warranty cost increase spend circa £20,000,000 in half one compared to last year but already we are seeing the benefits from this program with improved customer satisfaction scores, a trend I would expect to see accelerate as we move into the second half of this year. So, lots of positive developments as we aim to get the business consistently performing and becoming sustainably profitable for the future. With that, I’d now like to hand over to Doug so he can take you through the financial results in detail as well as the outlook for the rest of the year. Thank you.

Doug Lafferty, CFO, Aston Martin: Thank you Adrian and good morning everyone. Before we move into Q A, I’ll take you through our financial performance for the 2025 and our guidance for the remainder of the year. As Adrian mentioned, overall, our first half performance was largely in line with guidance, reflecting fewer Specials deliveries and the uncertainty we and many of our peers have experienced in relation to changes in U. S. Tariffs and the wider macroeconomic environment.

Looking at the detail on the slide. Wholesale volumes were broadly in line with the prior year at 1922 as we followed a disciplined approach to production and deliveries in support of stock optimization. This resulted in retail volumes outpacing wholesales by over 40% as we prepare for growth in the second half of the year, particularly in Q4, driven by our new core derivatives and specials. In terms of revenue, at £454,000,000 this reflected a 25% reduction compared to the 2024, largely as a result of fewer specials delivered as we prepare to commence Valhalla deliveries in Q4 twenty twenty five. Looking at our core performance, ASP increased by 7% to £192,000 benefiting from our next generation models, including the flagship V12 Vanquish.

Additionally, demand for unique product personalization continued to drive strong contribution to core revenue of 18%, broadly in line with the prior year period. As a result of the lower Specials volumes, increased warranty costs and other investments made in enhancing product quality, adjusted EBIT decreased by 22% in the first half to a £122,000,000 loss, with depreciation and amortization decreasing by 27% to £119,000,000 also primarily driven by the fewer specials. As we turn to our first half performance in more detail, the split of our wholesales is shown on the left hand side of the slide. Sport and GT volumes increased slightly year on year to represent over 70% of the mix, reflecting next generation models of DB12, Vantage and Vanquish. SUV volumes remained in line with the 2024 at just over 25% of the mix.

As Adrian has mentioned, we expect to realize the benefits of our full range of new core models and derivatives, including Vantage Roadster, Vanquish Volante, DBXS and VantageS, as we ramp up deliveries through the second half of the year. Specials reduced by 100 units to just 18 deliveries in the first half, reflecting the completion programs ahead of the commencement of our Hala deliveries expected in Q4 this year. For the full year, we continue to expect to deliver modest total wholesale volume growth when compared to 2024. On the right hand side of the slide, total ASP decreased by 25%, again reflecting the fewer specials deliveries compared to the prior year period, while core ASP, as I’ve already mentioned, increased by 7%. Overall, volumes remained well balanced across all regions in H1 twenty twenty five, with The Americas and EMEA, excluding The UK, collectively representing 62% of wholesales.

This was despite the challenges relating to The U. S. Tariff implementation, which only came into effect on the 06/30/2025. The movements in volumes across The UK and EMEA reflected the timing of model transitions and deliveries into these markets. Volumes in APAC decreased by 9%, with volumes in China remaining broadly flat compared with the 2024, reflecting ongoing macroeconomic weakness continuing to impact demand, a trend we expect to continue at least in the near term.

As Adrian has outlined, we are taking further action to support our China dealer network to help position them well to benefit from our next generation core model range when the market conditions improve. As we turn to the next slide, as expected, the impact of fewer Specials deliveries is reflected in the decline in gross margin year on year. The impact of core wholesales, despite a slight increase in volumes and improved mix from the next generation of models, was also dilutive to gross margin as a result of the warranty costs and other investments made in product quality. This includes the previously communicated investment in software and infotainment enhancements, which has resulted in recent improvements in customer satisfaction. Additionally, gross margin was impacted by The U.

S. Tariff increases. As Adrian has mentioned, we have implemented a dynamic pricing strategy, announcing in June an initial three percent increase in The U. S. As we seek to mitigate the financial impact of the additional tariff.

As we ramp up production in H2, benefiting from additional derivatives and the contribution from Valhalla, we now expect full year 2025 gross margin to improve from current levels to be broadly in line with the prior year. Adjusted EBIT decreased by 22% year on year to a loss of £122,000,000 primarily reflecting the gross profit movement, which was partially offset by a 24% decrease in adjusted operating expenses excluding D and A, with D and A also decreasing by 27%. The decrease in adjusted operating expenses aligns with our focus on optimizing the cost base as part of our ongoing transformation program. It also includes an GBP 11,000,000 benefit from the secondary warrant revaluation uplift associated with the forthcoming sale of our investment in AMR GP. Our previously announced organizational adjustments are progressing as planned, and we are on track to deliver a reduction in adjusted operating expenses, excluding D and A, in the full year 2025, now expected to be below £300,000,000 With updated D and A guidance of circa £340,000,000 adjusted EBIT is now expected to improve towards breakeven.

This also reflects the impact from foreign exchange rate movements, the additional investment in software and infotainment enhancements and the support for our China dealer network. As shown on the right hand side of the slide, net adjusted financing costs decreased to £9,000,000 from £88,000,000 primarily due to a £78,000,000 year on year impact of noncash U. S. Dollar debt revaluations resulting from the weaker U. S.

Dollar. Finally, 2025 adjusting items excluded the redemption premiums associated with the refinancing of our senior secured notes in H1 twenty twenty four, though included the expected costs associated with the organizational adjustments. Turning to free cash flow, which was broadly stable year on year with an outflow of £321,000,000 This reflects the lower EBIT in addition to higher net cash interest paid of 60 expected, working capital improved year on year to an outflow of £45,000,000 compared to the £119,000,000 outflow in the 2024. The key driver here being the deposit inflow relating to Valhalla, with deposits held increasing by £28,000,000 compared with an £84,000,000 outflow in the prior year period relating mainly to the delivery of Valor and Valkyrie Specials. Capital expenditure of £171,000,000 was slightly below the comparative period, with investment focused on future product pipeline, including Valhalla.

In H2, we will accelerate our investment in new product developments, which will support our growth strategy. CapEx for the full year is still expected to be around £400,000,000 As we ramp up deliveries of our new derivatives and specials through the rest of the year, we still expect to deliver positive free cash flow generation in H2, driven by performance in the fourth quarter. To finish with cash and debt. We ended the first half of the year with total liquidity of £228,000,000 We expect to enhance liquidity with the gross proceeds of around £110,000,000 in Q3 twenty twenty five from the forthcoming completion of the sale of our investment in amrgp.net debt increased to £1,380,000,000 Combined with a decline in EBITDA year on year, this resulted in an adjusted net leverage ratio of 6.7 times. As we prepare to deliver a significantly stronger second half performance and through disciplined strategic delivery and profitable growth in the future, we expect to deleverage in line with our medium term targets.

Finally, looking ahead to the remainder of 2025. We continue to closely monitor global events and will remain agile responding to changes in the external environment. That said, we continue to expect to deliver a significantly stronger performance in the second half of the year compared with the first half, commencing with Q3 improvements but primarily driven by Q4. This is due to the benefits from initial Valhalla deliveries in addition to the contribution from our full range of core models, including first deliveries of Vantage Roadster, Vanquish Volante, the DBX S and the Vantage S. As I’ve already mentioned and as shown in detail on the slide, we’ve slightly revised some of our guidance for 2025.

Additionally, the impact of the recently announced U. S. Tariffs on the global economy remains uncertain. And whilst we now have clarity on the 10% tariff rate for The UK automotive manufacturers, we continue to monitor the current quota mechanism and how this will impact our deliveries, especially for the higher priced specials, including Valhalla towards the end of the year. Thank you.

And I’ll now hand over to the operator to open for the Q and A.

Operator: Thank

Conference Moderator: And our first question comes from Harry Martin at Bernstein. Harry, your line is open. Please go ahead.

Harry Martin, Analyst, Bernstein: Hi. Good morning, everyone. I’ll start on The U. S. Tariffs.

Thanks for the disclosure on the 3% price increase. I just had a couple of clarifications. Firstly, is it right to infer you’re expecting to be able to absorb and offset two thirds of the tariffs, so the other 7%? And then also, can we expect U. S.

Deliveries in the future, maybe even this year, to skew more to January or Q1 versus Q4 with that uncertainty about the quota limit? And can you simply skew Q4 deliveries in future to Europe and the other key markets to smooth the impact on the rest of the business? And then the remainder of my questions are on the order book. So starting with Valhalla. When we spoke three months ago, Adrian, you said that the twenty twenty six Valhalla deliveries were 90% covered.

A twelve month order book still implies some slots available in the second half of next year, unlimited incremental progress. So can I just ask about what the progress has been in the order book on the Valhalla this quarter? Have there been any cancellations in The U. S. Around the tariffs or any other impacts there?

And when do you expect the full $9.99 units to be sold? And then just a final one on the order book. For the wider group, the ambition has been for some time to increase the length of the book beyond about five months. I think that the hope was that in H1 this year, by limiting deliveries to dealers, as you’ve done successfully versus retail sales that you might be able to extend order book. So should we see some progress in the second half of the year?

Thanks very much.

Adrian Hallmark, CEO, Aston Martin: Okay. Thanks, Harry. We’ll start with the tariffs then. First of all, on the price increases, we clearly are in a dynamic situation. We will remain vigilant as to the response of manufacturers that we compete with.

And any further pricing will be a result of that analysis. So it’s probably not the end. But for now, we’re watching and waiting for all the other movements to occur. Great example being until a few days ago, there was no deal with Europe. That would have made that hadn’t been achieved, it would make obviously a difference.

But we remain vigilant. We will not be planning to absorb all of the tariff cost. We’ll be addressing that on a competitive basis. In terms of timing of cars, you’re absolutely right. The quota system is the remaining jeopardy with the tariff system.

We’re delighted with the fact that there’s been a deal done with The UK and U. S. The government worked hard to achieve that and it was fast. And that was a major relief despite the fact we had to almost stop shipments for the quarter of the year for a third of our volume, which was quite exciting to put it mildly. The good news is we didn’t catch it all up on this on the last day of the quarter.

But going forward, you’re absolutely right because of the nature of The UK export profile. First come first served basis of the current agreement means that by default with JLR being about three quarters of the total U. S. Imports from The UK, it could put pressure at any given period on the number of slots available at the 10% quota. So we would if the quota run out, we’d be exposed to 27.5%.

So we will remain dynamic on that as well. Of course, going forward, exactly as you’ve suggested, the difficulty is that quarter four is historically and naturally the biggest quarter for sales for all companies in The U. S. Market, not just an absolute margin phenomenon. So moving to quarter one means that we have to bring production forward earlier in the year to meet that quarter four demand.

And because of the timing of what’s happened with the tariffs, we cannot do that this year. So we have to rely upon the quota system working for 2025, but we definitely will adapt in 2026. Just like we did in quarter one for quarter two, we switched production for The U. S. Into quarter one and out to the rest of the world, got the vehicles into The U.

S. And switched out of The U. S. In quarter two and back to the rest of the world. We managed that first tariff uncertainty period effectively.

We’ve now got to do that ongoing. In terms of the order book for Valhalla, it’s a moving feast. The net position between quarter one and quarter two is that we have more orders for Valhalla. I said the 2026 as a general statement and it’s still about the 2026. What we’ve not seen yet because people are holding off until they’ve seen the car physically and driven the car.

We’ve not seen the next spike in orders. We’re largely covered for 2026. And if you walk in today to order a Valhalla, it would be late in quarter four that you get the bill slot in some markets even quarter one in 2027. So we’re still plus or minus in the same space. We haven’t seen massive orders that we have sorry, we haven’t seen massive cancellations.

We’ve seen some as a result of the tariff situation and general economic environment, but the net position is still better than it was in quarter one. And I’m confident following Goodwood Monaco and the events that we’ve done and all the activities we’ve got coming for the rest of this year, including drive events from September through to November in Europe and America, where people get into the car, we’ll see another acceleration of orders for the vehicle. To put it in context, just overall, one third of the lifetime built for Valhalla is already secured with second deposits. We’re in good state. Think that was it, wasn’t it?

U. S. Tariffs? Just on the five month order. Sorry, yes, the rest of the range, yes.

It’s definitely by model. If I look across the range, with Vanquish, we’re way beyond five months. With Vantage, Roadster, same. Vantage, generally, we’re about on track, and same with DB12. DBX707 is remaining the challenge.

But the S model, which we’re just launching and will be shifted to markets in quarter three in real volumes and effectively will be 90% of the build for the rest of this year. We’re quite confident from dealer first reactions and dealer first activity that we will with DBX extend the order cover better than we have seen with 07/2007 to date. And just as a taster, early next year, there are two more product actions on DBX derivatives to further polarize the range, focus it in two different directions. I’ll be confident that that S through to these next two derivatives will be a great bridge to building that order bank worldwide.

Harry Martin, Analyst, Bernstein: Thank you very much. Very clear.

Adrian Hallmark, CEO, Aston Martin: Thanks, Harry.

Conference Moderator: The next question comes from Akshay Kakar from JPMorgan. Your line is now open. Please go ahead.

Akshay Kakar, Analyst, JPMorgan: Good morning, Adrian and Dow. Three questions, please. The first one on China. Could you just talk about the level of dealer support that’s expected in 2025? And if you could help us understand the nature of these payments?

Is this a one off payment? Or do you expect further payouts if market demand does not improve? The second question is on inventories. After a volatile quarter that we have seen in the second quarter, could you please talk about the current situation of core car model inventories in The U. S?

Are stock levels in line with your expectations or will you be restocking in Q3? And the last question is on capital investments. I see you have reiterated the $400,000,000 spend this year after the full refresh of your core car product portfolio. Could you just give us more details on CapEx allocation? Is there higher than expected spend on the Valkyrie?

Is it going towards powertrain transition? Are you upgrading manufacturing facilities? Listen, trying to understand this better. Thank you so much.

Doug Lafferty, CFO, Aston Martin: Good morning, Akshay. Okay. So on China, like specific details on exactly how much we’re supporting dealers buy, but it’s sort of double digit million sum to give you some guide low double digits. And that support is really in the guise of additional variable marketing to allow the dealers to move vehicles which should be in inventory for a little while through to end customers. So we don’t expect it to repeat.

We expect that action to have the impact that we’d like it to have during the second half of this year and for the action to leave the dealers in China in a better position as and when the market returns to some kind of normality. So the market in China is remains very, very stagnant, think for ourselves and for others. So this action is to help stimulate the sale of the inventory of the dealers have so that we can free up space to get the new products in next year. On the CapEx, yes, so we’re reiterating the $400,000,000 We’re obviously running slightly behind that from a run rate point of view in first half, but that was exactly as we expected. In terms of construct, it’s not dissimilar to how we’ve described it before.

So the vast majority of the CapEx is obviously on the engineering programs. And as you’d expect, there’s quite a chunk of CapEx on the Valhalla in the first half of this year. But then as we move through the second half of the year, that starts to pivot to the next range of vehicles that we’re going to be bringing out. So at least 80%, 85% of the total CapEx bill is on R and D engineering for vehicles. The remainder is on what I call keeping the lights on and things like that.

But nothing material in terms of changes and capital investment from a factory point of view. It’s more just ongoing maintenance, investments in IT and a little bit of investment in marketing CapEx, but the vast majority remains behind the car program.

Akshay Kakar, Analyst, JPMorgan: Great. And just a last one on coal car model inventories in The U. S, please.

Adrian Hallmark, CEO, Aston Martin: Yes. So if we look globally, first of all, the inventory is down by about a third compared with the January 1 year. So major shift and we’re just about in line with our ideal stock level give or take 100, 150

Doug Lafferty, CFO, Aston Martin: units. We’re in

Adrian Hallmark, CEO, Aston Martin: a really good shape. In particular in The U. S, because of that three months moratorium on shipping, we were able to run down stocks significantly. So they’re even slightly better than the global average reduction that we’ve achieved. Of course, not only the total quantum of stock has reduced significantly, but as we go through the year and launch these new derivatives before that Doug mentioned in particular, the stock levels will stay similar to the point that we’ve achieved in the midpoint of the year, but the mix will be totally changed.

So there will be Vilantes and Roadsters and DBX Ss in there, Advantage Ss when they weren’t in the first half. So it’s not just a different level in total quantum, but also it’s the fresh projects, new products with new appeal. So that’s why we’re more confident about the growth potential in the second half of the year now that we’ve reset.

Akshay Kakar, Analyst, JPMorgan: Very helpful. Thank you.

Conference Moderator: And the next question comes from Horst Schneider from Bank of America. Horst, your line is open. Please go ahead.

Operator: Yes, thank you and good morning. Just a few questions left from my side. The first one is, as you may can imagine, it’s about gross liquidity in relation to the cash burn that you had in Q2. We all have got in mind that you always said you feel comfortable with this GBP 200,000,000 to 300,000,000 of gross liquidity, you are now rather at the lower end of this range. And it sounds that there’s still going to be a cash burn in Q3, which could push you basically by the end of Q3 below your target gross liquidity level.

Is it a reason of concern? And does it maybe require any action? That’s question number one. Question number two, I hear you on inventories. But when I look at your balance sheet, I can’t really see that the inventories have come down.

So maybe you can explain that again to a stupid analyst. Thank you for that. And the third question that I have on when you talk about orders, and I heard you on the various models, can you also maybe specify what’s the demand trend by region? I think it’s still really bad in China also because the luxury tax has increased there. But maybe what’s the trade off between U.

S. And Europe? Thank you.

Doug Lafferty, CFO, Aston Martin: Morning, Walt. I think I’ll probably take the first two. So on the liquidity, yes, obviously, we’ve talked in our release about the position from a liquidity point of view. The free cash flow in Q2 was impacted a little bit by timing. So as Adrian mentioned, we actually ended up shipping or crossing the sort of tax line, if you like, on all of the cars that went into The U.

S. Only on the June 30. And that makes it very difficult to collect all the cash in relation to those vehicles. We did a very good job as a team to get the cars across the line, but there’s a little bit of an overhang, so there’s a catch up from a receivables point of view. And secondly, of front and center on the announcement here is that we’re expecting very imminently to have the liquidity boost from the sale of the Formula One shares, and that’s around £110,000,000 So between those two sorts of things, that will put us squarely back in the territory of being more comfortable than it would appear at the end of Q2.

And then, of course, we’re expecting to generate cash in the second half of the year. So from a liquidity point of view, we don’t have any concerns, and there’s no action at this stage for sure. And with regards to the inventory, I think there’s sort of perhaps a little misunderstanding. So we don’t hold any dealer inventory on our balance sheet. So when Adrian is talking about dealer inventory and when he talks about the relationship between retail and wholesale, you’ll never see that on the balance sheet.

The inventory on the balance sheet is inventory pertaining to either company work in progress, company stock or anything like that. So there’s no swings on the inventory and the balance sheet as it relates to the inventory in the field.

Adrian Hallmark, CEO, Aston Martin: The third question,

Doug Lafferty, CFO, Aston Martin: I think, was again on. Ivan, I would

Operator: just Sorry, Doug, just quickly. But then we should see basically a more meaningful reduction in the trade receivables. They have come down, but not really that meaningful. That should reflect the dealer inventories, right?

Doug Lafferty, CFO, Aston Martin: Yes, to an extent. But it also, of course, reflects the timing of the sales force. So over the last several periods, the timing of the sales has certainly been the biggest swing from a trade receivables point of view. But as I said, from an inventory perspective, that’s the company inventory.

Operator: Okay. All right.

Adrian Hallmark, CEO, Aston Martin: And on the demand by region, I think six if we break it down into six parts, UK is pretty much on plan and doing okay, Europe the same, U. S, but the tariff disruption, the underlying performance is what we expected. So it’s fairly stable. It’s our supply that’s being disrupted not the dealer’s ability to sell the stock that they had. Middle East is not at its full potential for us, but it’s stable and predictable.

China is a big problem child, no question. And we have a small tactical problem in Asia Pacific. Again, not significant anywhere near as significant as China, just a little bit of rebalancing. So overall, four out of the six regions are in good shape as we can rely upon them.

Operator: Okay. That’s great. Thank you.

Adrian Hallmark, CEO, Aston Martin: So on that point, I think we’re just about out of time. I’d like to thank everybody for participating again. And we’re looking forward to acceleration in the second half and some more clarity on the tariffs in particular and the quota system. Thank you, everybody.

Operator: This concludes the call. Thank you

Conference Moderator: very much for your attendance. You may now disconnect your lines.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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