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(Alliance News) - Aston Martin Lagonda Global Holdings PLC on Tuesday said it expects to quadruple earnings over the next five years, and remains on track to deliver and potentially exceed its targets for the next two.
The Gaydon, England-based luxury car manufacturer said it remains on track to deliver its 2024 and 2025 financial targets, announced in 2020, which anticipate around GBP2 billion in revenue and GBP500 million in adjusted earnings before interest, tax, depreciation and amortisation.
Aston Martin expects to "substantially achieve" these in 2024 and possibly exceed them in 2025.
In 2022, Aston Martin reported revenue of GBP1.38 billion and adjusted Ebitda of GBP190.2 million.
Overall, Aston Martin hopes to quadruple its earnings over the next five years. Its new mid-term targets for 2027 and 2028 anticipate about GBP2.5 billion in revenue and GBP800 million in adjusted Ebitda with an approximate 30% margin.
Aston Martin confirmed it is on track to further deleverage its balance sheet, with a new leverage ratio target of about 1.5 times in the next two years. Between 2027 and 2028 it expects "sustainably positive" free cash flow with a roughly 1.0 times net leverage ratio.
Aston Martin also expects to invest around GBP2 billion between 2023 and 2027. This will comprise about GBP1.8 billion in capital expenditures and GBP200 million in technology access fees to its strategic suppliers and partners.
The access fees include payments related to Aston Martin's strategic supply agreement with Lucid Group Inc, announced on Monday. The agreement grants Aston Martin access to Lucid's battery electric vehicle technology in exchange for USD132 million in total cash and 28.4 million shares, making Lucid a 3.7% shareholder in the company.
Aston Martin also on Monday said it had updated its strategic co-operation agreement with Mercedes-Benz Group AG. The original deal, exchanging shares for access to Mercedes-Benz's technology, was replaced with a committent to discuss future access in exchange for cash.
Aston Martin will not issue or pay any further consideration shares or related cash top-ups to Mercedes-Benz, but the company will remain a 9.4% shareholder in Aston Martin.
The new financial targets will be confirmed at Aston Martin's Capital Markets Day on Tuesday, at which the company also will "showcase its exciting new and upcoming product range".
"I am extremely proud of the major industrial turnaround we have completed in the last three years, which has completely rebuilt this iconic company," said Aston Martin Executive Chair Lawrence Stroll.
"We have updated our EV strategy, working with world-class suppliers to complement our extraordinary in-house engineering and design teams. In addition, we are now driving new levels of operational excellence to support our growth and deliver on our targets which focus on increasing value for each car we sell, aligned with the characteristics of a true ultra-luxury company.
"With the heavy lifting now behind us, I have never been as confident in our future."
Shares in Aston Martin were down 4.5% at 346.20 pence in London on Tuesday.
By Emma Curzon, Alliance News reporter
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