2020 ANNUAL REPORT
CONTENTS
STRATEGIC REPORT
Highlights
Our Global Footprint
Executive Chairman’s Statement
Chief Executive Officer’s Statement
Business Model
Aston Martin and the Luxury Market
Strategy
Key Performance Indicators
People and Stakeholder Engagement
Responsibility
Chief Financial Officer’s Statement
Group Financial Review
Risk and Viability Report
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ASTON MARTIN*
IS ONE OF THE WORLD’S
MOST ICONIC LUXURY
COMPANIES FOCUSED ON
THE DESIGN, ENGINEERING
AND MANUFACTURE
OF HIGH LUXURY CARS
CORPORATE GOVERNANCE
Board of Directors and Executive Committee
Executive Chairman’s Introduction
to Governance
Governance Report
Nomination Committee Report
Audit and Risk Committee Report
Directors’ Remuneration Report
Directors’ Report
Statement of Directors’ Responsibilities
FINANCIAL STATEMENTS
Independent Auditor’s Report
Consolidated Financial Statements
Notes to the Financial Statements
Company Statement of Financial Position
Company Statement of Changes in Equity
Notes to the Company Financial Statements
Shareholder Information
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46
54
56
63
79
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87
96
101
146
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148
150
* Aston Martin Lagonda Global Holdings plc. References to ”Company”, ”Group”, ”we”, ”us”, ”our”, ”Aston Martin” and other similar terms are to
Aston Martin Lagonda Global Holdings plc and its direct and indirect subsidiaries.
3
NEW LEADERSHIP IN
PLACE TO DRIVE
TURNAROUND AND
GROWTH
EXECUTIVE TEAM
COMBINING LUXURY
AND AUTOMOTIVE
EXPERIENCE
OPERATIONAL TEAM
STRENGTHENED WITH
EXTERNAL
APPOINTMENTS
PROJECT HORIZON
LAUNCHED
HIGHLIGHTS
1
AGGRESSIVE DE-STOCK
OF DEALER INVENTORY
DEALER GT/SPORTS
INVENTORY MORE THAN
HALVED, EXPECTED
TO BE LARGELY
COMPLETE IN Q1 2021
GT/SPORT ORDER
INTAKE AHEAD OF
EXPECTATIONS
2
SUCCESSFUL LAUNCH
OF DBX
1,516 UNITS SHIPPED;
STRONG AND BUILDING
ORDER BOOK
FIRST DERIVATIVE TO
LAUNCH Q3 2021
4
TRANSFORMATIVE
TECHNOLOGY
AGREEMENT WITH
MERCEDES-BENZ AG
ACCESS TO WORLD –
CLASS TECHNOLOGIES:
POWERTRAIN AND
ELECTRIC/ELECTRONIC
ARCHITECTURE
REMOVES COST AND
RISKS OF DEVELOPMENT
MERCEDES-BENZ AG TO
BECOME 20%
SHAREHOLDER
5
REFINANCING
STRENGTHENS
FINANCIAL RESILIENCE
AND SUPPORTS
GROWTH AMBITIONS
YEAR-END CASH
OF £489M
NET DEBT
SIGNIFICANTLY
REDUCED TO £727M
DEBT MATURITY
EXTENDED TO 2025/26
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
1
OUR GLOBAL FOOTPRINT
OUR GLOBAL FOOTPRINT1
WHOLESALE VOLUMES
BREAKDOWN BY REGION
24%
26%
27%
23%
24%
26%
27%
23%
EMEA
Asia Pacific (incl China)
Americas
UK
EMEA
Asia Pacific (incl China)
Americas
UK
ASIA PACIFIC
NUMBER OF DEALERS: 50 (2019: 45)
WHOLESALE VOLUMES2: 787
DECREASE ON 2019: 40%
EMEA3
NUMBER OF DEALERS: 52 (2019: 56)
WHOLESALE VOLUMES2: 865
DECREASE ON 2019: 20%
• 7 new dealer appointments throughout 2020, Sendai in
Japan, Phnom Penh in Cambodia and Kunming, Foshan,
Shanghai, Shenzhen and Xi’an in China.
• Rationalisation of the network in India and China, to
improve dealer profitability and viability.
• Ongoing development of the network planned for 2021,
including the relocation and redevelopment of existing
facilities and rationalisation of a number of locations.
• New dealer appointment in Casablanca, Morocco.
• Network rationalisation took place in Europe in 2020 to
improve dealer performance and viability.
• A number of new dealer appointments are planned
throughout Europe in 2021, including the introduction of
new groups into the franchise.
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
OUR GLOBAL FOOTPRINT
DEALER NETWORK FOCUS
• We operate a franchise model for our dealerships which
enables us to maintain strong control over brand
positioning while limiting capital investment.
• Dealer network to deliver world-class luxury customer
experience and consistent brand presentation.
• Maximise market potential in line with plan.
• 167 dealers across 54 countries (2019: 168 dealers in
54 countries). Expected to grow leveraging DBX
market opportunities.
• Focus on growth markets, DBX new segmentation
opportunities and driving sports car volumes.
• Work continued during the year to significantly strengthen
and upgrade the dealer network.
• Further actions planned for 2021 to improve dealer
profitability and viability.
1. Global footprint represents dealer summary as at 31 December 2020
2. Wholesale volumes include core and special models
3. EMEA includes Europe, Middle East and Africa (excluding the UK and
South Africa)
4. UK includes South Africa
DEALER READINESS FOR NEW STRATEGIC PLAN
Dealer operations have been impacted by COVID-19,
causing disruption and dealer closures at times during the
year. Various actions were taken to provide appropriate
support for dealers and customers, including guidelines for
sales and servicing to prioritise customer and team safety.
These actions reflected the regional risk and government
requirements, and constantly evolving impacts.
The dealer network continues to operate in line with
relevant government restrictions in relation to COVID-19
and to adjust to the impact on market conditions and
customer behaviours. These conditions have accelerated
change towards increased digitisation and a growth in
online engagement. Future retail strategy is being
developed to reflect an evolved customer-first luxury
experience accommodating both online and in-person
engagement preferences.
Aggressive and successful de-stocking actions have been
undertaken within the dealer network to rebalance supply
and demand and to ensure alignment to the new business
plan. This will be a continued focus through 2021 to
achieve ideal pipeline cover. Planned launch in 2021 of
new dealer performance management processes to improve
performance and recognise excellence.
UK4
NUMBER OF DEALERS: 22 (2019: 22)
WHOLESALE VOLUMES2: 820
DECREASE ON 2019: 43%
AMERICAS
NUMBER OF DEALERS: 43 (2019: 45)
WHOLESALE VOLUMES2: 923
DECREASE ON 2019: 55%
• Change of dealer partner in Edinburgh.
• No planned changes to the UK dealer footprint in 2021.
• Ongoing development of the network is planned, in
alignment with regional strategy to enhance the customer
experience and optimise dealer profitability and viability.
• Change of dealer partner in three locations, St. Louis,
Dallas and Boston, to support growth in the US market.
• New dealer appointment planned in Brazil in 2021.
• Projects in 2021 will deliver further digital integration
with the network, focused on the improvement of lead
management opportunities.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
3
EXECUTIVE CHAIRMAN’S STATEMENT
EXECUTIVE CHAIRMAN’S
STATEMENT
We, as a company, have not shied away from the hard work
required and have made huge progress this year. We have
appointed a world-class leadership team with deep
experience of this industry. We have aggressively and
successfully de-stocked the dealer network to rebalance
supply to demand. We have strengthened the financial
resilience of the business and have taken decisive action on
costs. We have also launched, very successfully, the DBX
and the Aston Martin Cognizant F1TM branded team takes to
the track in 2021.
APPOINTING A WORLD-CLASS LEADERSHIP TEAM
We have made a number of appointments to build an
industry-leading and world-class leadership team. Tobias
Moers, formerly the CEO and acting Chief Technical Officer
at Mercedes-AMG, joined as CEO in August 2020 and our
new CFO, Kenneth Gregor, joined in June 2020. Kenneth
was previously CFO of Jaguar Land Rover for 11 years.
Together, with Marek Reichman our long-standing award
winning Chief Creative Officer, they have already made
great strides in leading Aston Martin’s transformation.
As announced in January 2021 we have also strengthened
the membership of the Board with the appointment of new
non-executive directors, Anne Stevens, Robin Freestone,
Richard Parry-Jones, Antony Sheriff and Stephan Unger, who
have strong automotive and luxury backgrounds to support
the Company in its future ambitions as well as to progress
our aims relating to compliance with the UK Corporate
Governance Code and diversity. Peter Espenhahn, Lord
Matthew Carrington, William Tame and Amr AbouelSeoud
have decided to step down and I would like to thank them
for their significant contributions and support to the Board.
POSITIONING THE BUSINESS FOR GROWTH
We made substantial progress during the year towards
making Aston Martin operate as a true luxury automaker,
most notably in rebalancing supply to demand for front
engine sports cars. The dealer network has been aggressively
de-stocked, with a reduction of over 1,500 GT and sports
car units from dealer stock during the year. This de-stocking
is expected to be largely complete by the end of Q1 2021 as
we approach our targeted stock levels, ahead of our original
expectations. I have been most impressed by this
achievement in a year when many of our dealers have been
operationally challenged by COVID-19 which prompted
closures for long periods of time. While the lower wholesale
volumes required to achieve this have had an impact on our
profitability, it is absolutely critical to re-establishing the
exclusivity of our brand. For 2021 as we start to reach
appropriate stock levels for front engine sports cars, we
expect a return to a demand-led model and have been
positively surprised by the strength of demand with a
building order book ahead of our original expectations.
LAWRENCE STROLL
DEAR SHAREHOLDER,
I WRITE TO YOU AFTER WHAT HAS BEEN AN
EXTRAORDINARY YEAR, BOTH GLOBALLY
AND FOR ASTON MARTIN. DESPITE THESE
CHALLENGES, WE HAVE MADE SIGNIFICANT
PROGRESS EXECUTING ON OUR PLAN.
WE HAVE MADE NECESSARY AND EXTENSIVE
CHANGES TO OUR COMPANY
I was appointed Executive Chairman at the end of April
2020, during a period of unprecedented global turmoil, and
knew that significant challenges lay ahead. However, in the
short amount of time since, we have made tremendous
progress in positioning the Company for long-term success.
While the world has grappled with the tragic impacts of the
COVID-19 pandemic, I have been overwhelmed and give a
heartfelt thanks to all of our employees and other colleagues
who have risen to the occasion.
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
EXECUTIVE CHAIRMAN’S STATEMENT
The DBX, our first SUV and a key pillar for our future
growth, was successfully launched. With production
re-commencing in May 2020 following a COVID-19 related
hiatus, first deliveries were made in July 2020. The DBX
order book is robust, in-line with our expectations and we
are confident in the prospects for the SUV segment. The
DBX’s bespoke platform gives us many opportunities to
expand our SUV range with the first variant planned for
launch in Q3 2021.
We are taking decisive action on costs, which is expected
to impact up to 500 employees who will leave the business,
as we start to right-size the organisation for production
volumes aligned to our plans. This restructuring is on track
to deliver annualised savings of approximately £28m.
We will continue to seek further efficiencies through
Project Horizon.
SECURING THE BALANCE SHEET
Vitally, the financial resilience of the business was
strengthened by capital raises during the year and I am
grateful for the support from shareholders who invested
further in the Company, alongside me and my co-investors
in the Yew Tree Consortium, our bondholders and core
relationship banks. I was also delighted to attract new
investors and banking partners to the Aston Martin story.
With the monies raised, we were able to commit to a new
plan that will deliver the exciting future that all shareholders
want and expect from this great Company.
DEVELOPING A NEW BUSINESS PLAN
This year has been one of enormous effort to position our
Company for future success and to capture the huge
opportunity ahead of us, as we build our Company into a
world-class luxury automaker and focus on maximising
shareholder value creation.
In October we announced our landmark Strategic
Cooperation Agreement with Mercedes-Benz AG, taking
our longstanding partnership to another level. Through this
expanded agreement, we secured access to the world-class
technologies that are critical to supporting our long-term
product expansion plans, including electric and hybrid
powertrains. This partnership underpins our confidence in
the future – a truly exciting moment for Aston Martin.
We have developed a new business plan targeting revenue
of c.£2bn and c.£500m of adjusted EBITDA by 2024/25.
The plan incorporates our Strategic Cooperation Agreement
and the delivery of new, compelling vehicles to achieve
these growth ambitions. By 2024/25, our plan is to produce
about 10,000 units a year, incorporating a refresh of the
front-engine sports car range in 2023, an expansion of the
SUV offering, launch of the mid-engine range and an
exciting programme of Specials. During this period, we also
plan to launch our first hybrid vehicles, underscoring our
commitment to sustainability and lowering our carbon
footprint, which will be a transformational moment for the
Company. These vehicles will be powered by fully
customisable and cutting-edge technology developed by
Mercedes-Benz AG and are fundamental to ensuring Aston
Martin’s future success.
We recognise the importance of having a cadence of new and
refreshed models, incorporating updated technology through
the Strategic Cooperation Agreement, driving exclusivity and
maintaining dealer profitability, supported by the marketing
reach of the Aston Martin Cognizant F1TM branded team from
2021. The Company is looking forward to delivering the Aston
Martin Valkyrie hypercar from the second half of 2021 which
serves as ambassador for our mid-engine programme.
Improving profitability is key and this starts with our
enhanced product offering and disciplined production to
order model, generating a gross margin more aligned to the
luxury automotive segment. This will be supplemented with
enhanced operational focus on cost and controlled
investment, building on the actions already taken in 2020,
and with greater discipline on cash flow. Our strategy is to
optimise the Company’s organisational structure to deliver
operational excellence in line with the updated product and
business plan.
TO MAKE ASTON MARTIN A GREAT LUXURY
CAR COMPANY
This has been a game-changing year and I am extremely
proud of the enormous progress the team has made to date.
We are ahead of plan on reducing dealer inventory, despite
operating in these most challenging of times, and now have
the right team, partner, plan and funding in place to
transform the Company into one of the greatest luxury car
brands in the world.
As I write, many parts of the world remain significantly
impacted by the COVID-19 pandemic, but we look forward
to the year ahead with great optimism. On behalf of the
Board, I would like to thank all our shareholders,
employees, customers and business colleagues for your
continued support of Aston Martin.
Yours sincerely,
LAWRENCE STROLL
EXECUTIVE CHAIRMAN
24 FEBRUARY 2021
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
5
CHIEF EXECUTIVE OFFICER’S STATEMENT
CHIEF EXECUTIVE OFFICER’S
STATEMENT
network to restore the supply/demand dynamic as we
transition to a build-to-order model, and expect to have
reached our targeted stock levels by the end of Q1 2021,
ahead of our original expectations. As we start to reach
appropriate stock levels, we are encouraged by the strength
of demand we are seeing for sports/GT cars with a building
order book. Specials are integral to our plan with the era
defining Aston Martin Valkyrie a priority and on track for
deliveries to start in H2.
The Company had been preparing carefully for the Brexit
transition with a particular focus on supply chain. While
both our main manufacturing facilities are in the UK we
import a number of parts from Europe and globally. Given
the actions taken such as securing alternative ports for
access rather than Dover, we have to date not experienced
any disruption to manufacturing.
Q. YOU WERE ENJOYING GREAT SUCCESS AS CEO
OF MERCEDES-AMG, WHY DID YOU DECIDE
TO LEAVE AND JOIN ASTON MARTIN?
I have always had a passion for performance cars and was
fascinated by Aston Martin’s unique brand position of
representing both the luxury and performance side of
automotive. No one else has this unique combination
and so I think the possibilities for the brand are unlimited.
I got to know the technical side of the Company at the
beginning of the partnership between Aston Martin and
Mercedes-Benz AG and so following Lawrence Stroll’s
appointment as Executive Chairman, and the substantial
investment to strengthen the balance sheet, I saw there was
a significant opportunity and relished the chance to harness
the strengths of the brand to deliver successfully the planned
product expansion.
Another key reason for my decision to join the Company
is the DBX. The SUV is the largest growing segment in the
luxury space, and the DBX offers the best combination of
luxury and driving dynamics in the segment. Built on its
own flexible platform, there will be many opportunities to
expand our SUV range that simply aren’t offered by the
competition. This presents a great opportunity to support our
growth ambitions and medium-term plan.
Q. WHAT ARE YOUR INITIAL IMPRESSIONS
OF ASTON MARTIN?
I am incredibly impressed by the great work that has
been delivered by the whole team here. 2020 was a pivotal
year for the Company and presented many headwinds,
particularly the COVID-19 pandemic, but the Company has
been resilient. We started delivering the DBX in late July,
despite having to close our St Athan manufacturing facility
earlier in the year.
TOBIAS MOERS
OUR CEO, TOBIAS MOERS, ADDRESSES SOME
OF THE KEY QUESTIONS OUR STAKEHOLDERS
HAVE BEEN ASKING US DURING THE YEAR
Q. HOW DID THE COMPANY PERFORM IN 2020?
Firstly, I would like to thank all of our employees for their
hard work and dedication during what has been an
incredibly challenging period. The health and safety of our
team and partners remains our absolute priority, as we
continue to work within a COVID-19 safe environment
across our operations. I would also like to thank Lawrence
Stroll, whose vision has enabled us to accomplish the
significant steps taken during the year to give us a strong
foundation for the future. I am very excited to be part of
this journey.
2020 was a challenging year in terms of business
performance with the impact of COVID-19 and our own
actions to reset and provide a platform for future growth.
Revenue was down 38% to £612m and adjusted EBITDA
£(71)m. As we continued to invest in our future products we
remained free cashflow negative. We have however made
significant progress to enable future success.
We successfully launched the DBX and demand is strong.
We have wholesaled 1,516 units with all dealers now
having their demonstrator and floor plan models. We have
also made significant progress de-stocking our dealer
Before entering the business, I wasn’t fully aware of the
Company’s unique and industry leading “body in white”
design and manufacturing capability. I have been in the
industry for quite some time and I am truly impressed by
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
CHIEF EXECUTIVE OFFICER’S STATEMENT
Aston Martin’s innovative and class leading capabilities to
create this strong platform which will be the genesis for our
product portfolio and future growth strategy. I believe that
this is a point of strength for the Company and, along with
the customisable and world-leading technology we will
receive from Mercedes-Benz AG, differentiates the business
as we move forward.
Q. SINCE ARRIVING LAST AUGUST, WHAT HAVE
BEEN YOUR PRIORITIES FOR THE COMPANY?
One of my first priorities has been the successful delivery
of the DBX. I slowed the planned ramp-up of the St Athan
facility in August which resulted in a successful quality-led
ramp-up, as is appropriate for our luxury product
positioning. The full run-rate was reached by the end of
September, enabling us to meet our targets for 2020
production and with a strong and building order book in
line with our expectations.
Another immediate priority was to carry out a review of the
business to ensure that we can deliver on our strategic plans.
I launched “Project Horizon” which is a comprehensive
programme to revitalise the product offer and improve
efficiency, to enable us to become more agile, reduce costs
and improve our profitability in line with our plans – with
the ultimate aim of being the most efficient and agile in the
luxury segment. As part of this we are currently evaluating
our manufacturing footprint and how to best utilise the
capacity we have at our manufacturing plants at Gaydon
and St Athan to drive efficiency. We are also looking at
opportunities for operational efficiencies in engineering and
other areas of the business. It is essential that our leadership
has the right automotive and luxury experience, that our
decision-making processes are streamlined with fewer layers
of management and that we have a right-sized organisation.
For example, we are restructuring the engineering teams to
ensure we optimise efficiency through increased
accountability and span of control, and plan to adopt a
common approach across the business. This will ensure that
we maintain a small but efficient engineering team with a
high level of capability and a collaborative environment to
deliver the vehicles within our cycle plan. Prior to my arrival
there was already a plan in place to reduce headcount by up
to 500 permanent employees and the team has made good
progress. The overall aim is to achieve the best and most
efficient outcome for the product, the business and, most
importantly, our customers.
Another priority has been our dealers and customers.
Our dealer network is extremely important – as they
represent Aston Martin to our customers – so I have been
focusing on strengthening our relationship with our dealers.
We are currently underserviced in key geographies such as
Germany and Switzerland, both of which are large GT/
sports markets, and so we have been speaking with large
franchisees in both locations to expand our dealer footprint.
There are a few other geographies where we are looking to
expand or move, but overall, the network is in a good
position. I have been pleasantly surprised by the dedication
of our dealers who are confident about the future of the
brand, are very positive about our strategic shift to build-to-
order and have been very receptive to the DBX launch.
Our customers and clients are also an important focus and
so I am reviewing the whole customer journey from sales
and marketing to after-sales activities. A particular focus is
on our digital tools and so we are working to improve our
configurator tool which enables our customers to choose
their perfect Aston Martin, including the introduction of
“real time” digital sessions. We will also be bringing in some
additional functional expertise to strengthen this area and I
look forward to being able to update you on this shortly.
We now have a strong executive leadership team to support
our efforts. During the summer Kenneth Gregor joined us as
our Chief Financial Officer. Kenneth has over 20 years of
automotive experience, most recently as Chief Financial
Officer at Jaguar Land Rover. I have also appointed Michael
Straughan as Chief Operating Officer. Michael has more
than 30 years’ automotive and luxury experience from his
time at Bentley, Nissan, Volvo, Jaguar Land Rover and most
recently luxury yacht manufacturer Sunseeker International.
Completing the executive leadership team are Marek
Reichman, our award-winning Chief Creative Officer, and
Michael Marecki, our long-standing General Counsel.
Our actions to refinance the business completed in early
December. The new capital structure has further
strengthened our balance sheet by extending our debt
maturities until 2025/26 and has provided the additional
financing needed to enable the Company to focus on
executing on our medium-term plan to become a world-
class luxury automotive brand. As part of the refinancing in
the autumn, we entered into a Strategic Cooperation
Agreement with Mercedes-Benz AG through which we
secured access to their world-class technologies that are
critical to supporting our long-term product expansion
plans, including electric and hybrid powertrains.
Lastly, and by no means least, an important priority for me
has been to engage and re-energise the team. The challenges
that have been faced by the business over the past couple of
years have been significant. There has been a lot of change
as well as the ongoing challenges of operating through
COVID-19. I have held regular “all hands” meetings,
brought in new talent to bolster areas where there is need
for support and I am ensuring that the whole team is clear
on what is required for us to achieve our exciting plans to
transform this business, including an “open door” policy to
discuss any questions or concerns.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
7
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Q. WHAT WOULD YOU SAY THE KEY
CHALLENGES AND OPPORTUNITIES ARE FOR
ASTON MARTIN AND THE SECTOR?
mid-engine vehicle, will position Aston Martin firmly in this
segment and will complete our range of highly engineered
and beautiful sports cars.
The biggest challenge for Aston Martin and the industry in
the short term is the impact of COVID-19 on the economy
and consumer demand, and the uncertainty surrounding the
duration and the unpredictable nature of when “normal”
will return. Mid to longer term are the changes in technology
and the growth of electrification – which present
opportunities for us as a brand.
As a Company, however, we must concentrate on what we
can control. In 2020, as mentioned we have taken several
steps to position the Company for success in the future.
We have significantly de-stocked the dealer network,
strengthened the financial resilience of the Company and
have taken decisive action on costs, all while also
successfully delivering the DBX. Our expanded partnership
with Mercedes-Benz AG is a critical step towards achieving
our hybrid and EV plan, while avoiding the high investment
in powertrain and electrical architecture, thereby de-risking
the business plan. With our Project Horizon programme and
the actions we are taking, we have the opportunity to be one
of the most agile companies in the luxury automotive space.
Q. THE NEW STRATEGIC PLAN HAS AMBITIOUS
TARGETS FOR CAR SALES. WHY WILL THIS
PLAN BE SUCCESSFUL?
Our product portfolio is expanding to service the entire
luxury space – something none of our competitors currently
offer – and, through our new Strategic Cooperation
Agreement with Mercedes-Benz AG, we can focus our
development on the areas that truly differentiate our
products to drive demand. We have three pillars to our core
business: front-engine (GT/sports), SUV and mid-engine. All
of these segments will drive growth, in particular the SUV,
and help the Company reach the c.10,000-unit per year
medium-term target. In addition, Special editions will
continue to form an important part of our plans.
In 2023, the front-engine range will undergo a substantial
refresh, incorporating all new Mercedes-Benz technology,
and allow us to return to historical front-engine sales of
3,500 to 4,000 units per annum.
The SUV segment provides the largest opportunity. The DBX’s
bespoke platform gives us many opportunities to expand
our SUV range with the first variant planned for launch in
Q3 2021.
The mid-engine segment, the highest margin core vehicle,
starts with the era defining Aston Martin Valkyrie Special.
This has been a large undertaking, but the result will be
excellent – it is an F1TM car on the road, truly the pinnacle of
auto engineering and years of hard work. With a great team
working on the Valkyrie project, we are confident deliveries
will commence in early H2 2021. Descending from the
Valkyrie, the Valhalla and subsequently Vanquish, our core
We plan to enhance our core range by the addition of two
to three Special edition models to showcase our technical
excellence and perpetuate our brand uniqueness. Specials
demand high price points for the enhanced features they
offer, are typically fully allocated prior to any significant
capital commitment, and generate higher margins than the
core range. Specials are expected to be significantly
weighted to H2 2021 and particulary Q4.
Q. HOW WILL THE COMPANY BENEFIT FROM THE
F1TM TEAM?
The benefit of having the Aston Martin name associated
with Grand Prix racing with the Aston Martin Cognizant
F1TM branded team from January 2021 is significant, as it
underpins the move into the more profitable segment of
mid-engine cars and the marketing of the whole brand.
The sponsorship agreement, with commercial terms
commensurate with the Company’s prior F1TM expenditure,
is expected to help reignite the brand and further
increase desirability.
Q. WHAT SHOULD WE EXPECT FOR 2021?
2021 will be an exciting year for the business. With a
strengthened balance sheet, the dealer de-stock near
complete and a strong technology partner, we can begin to
execute on our medium-term plan.
We will have the first full year of the DBX, for which we
have a robust order book in line with our expectations; the
return to a demand led model for front engine sports cars
where we have been positively surprised by the strength of
demand with a building order book ahead of where we
expected to be; and continued discipline around controlling
investment and delivering efficiencies through the Project
Horizon programme where I expect to see results from Q3
2021. 2021 will also benefit from the delivery of high value
Specials such as the Aston Martin Valkyrie from H2 2021.
Q. DOES THE BUSINESS HAVE SUFFICIENT
LIQUIDITY AND FINANCIAL RESOURCES?
Yes, the support of our shareholders has been imperative to
the future success of the Company. We have raised gross
proceeds of £813m in equity which, in addition to the
extension of our debt maturity profile, has significantly
strengthened the financial resilience of the business and
supports the execution of this transformational plan to
become a world-class luxury automotive company. We will,
as you would expect, continue to review opportunities to
build on this strengthened position.
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
and partnership to execute on our growth ambitions and
medium-term targets. We have a clear plan of execution
across all areas of the business to establish operational
efficiencies, product development and growth. The most
successful companies in our industry, and the ones best
positioned for the future, are agile. I believe that with the
actions we are taking Aston Martin can be one of the most
agile companies in the luxury automotive space.
This is a significant moment for Aston Martin. As we
celebrate our 108th anniversary we look ahead to when all
of our work comes together to create an exciting future for
the Company and all of us who are part of the brand.
TOBIAS MOERS
CHIEF EXECUTIVE OFFICER
24 FEBRUARY 2021
Q. WHAT PLANS DO YOU HAVE TO REDUCE THE
COMPANY’S IMPACT ON THE ENVIRONMENT?
Sustainability is an increasingly important issue for the
business, especially when evaluating recent UK Government
regulations on ICE vehicles post 2030, as well as being
important to our investors and other stakeholders. We are
taking steps to integrate an environmentally sustainable
culture and practices across the business, and we plan to
reduce carbon emissions and energy usage.
We understand that having hybrid and electric options for
our vehicles is imperative to the Company’s future in this
industry and our partnership with Mercedes-Benz AG is
fundamental to our hybrid and EV plan. Our ambition is that
by 2025 every one of our cars will have an electrified
powertrain (hybrid) or be pure electric driven. Our ultimate
goal is that by 2030, 50% of our cars will be battery electric
vehicles, 45% performance oriented electrified power and
5% carbon for track-only use.
Q. WHAT IS YOUR MESSAGE TO ASTON MARTIN
SHAREHOLDERS?
2020 has been a transformational year for the Company
and, although difficult, we have established a strong
foundation for the future. We have identified several cost
efficiencies across the whole Company, from which we
expect to see results during 2021. We have de-stocked the
dealer network, while securing the appropriate financing
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
9
BUSINESS MODEL
CRAFTING
FUTURE VALUE
1. CUSTOMER-FOCUSED PRODUCTS
5. BRAND AND CUSTOMER
ENGAGEMENT
4. MARKETING AND DISTRIBUTION
WHAT WE
PUT IN
BRAND AND HERITAGE
Iconic luxury British sports car brand
with over 100 years of heritage,
known for its excellence in design,
engineering and expertise in the high
luxury car market.
PEOPLE, SKILLS AND INNOVATION
Strong design and engineering
expertise. Highly skilled and flexible
manufacturing workforce. In-house
academy dedicated to training
and up-skilling our manufacturing
technicians. Global online learning
and development platform for
all employees.
EXTENSIVE DEALER NETWORK
Dealership network of 167 dealers
across 54 countries at the year-end,
delivering a world-class luxury
customer experience and consistent
brand presentation.
INNOVATIVE PARTNERSHIPS
Carefully chosen partnerships, such as
the Strategic Cooperation Agreement
with Mercedes-Benz AG, provide a
source of technical expertise, brand
strengthening, customer engagement
and future growth.
WORLD-CLASS SUPPLY BASE
High quality strategic suppliers identified
and sourced across multiple platforms.
ACTIONS TO TURN AROUND
PERFORMANCE, STABILISE AND
DE-RISK THE BUSINESS
The new business plan to turn around
performance, restore price positioning
and deliver a more efficient operational
footprint. Significant steps to strengthen
leadership, strategic partnerships and
capital structure.
10
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
• Global dealership network focused on key growth markets and improving strength of dealer network• Dealerships and regional sales teams delivering world-class customer service and experiences• Strategic marketing including Aston Martin Cognizant F1TM branded team, product launches, key motoring events, product placement and client events• Three-pillar product strategy: front engine (GT/Sports), SUVs and mid-engine, to address wide spectrum of luxury car market• Special editions to enhance brand exclusivity and profitability• Build-to-order strategy to balance supply and demand, strengthen order book, pricing power and margins• Reinvigorating brand building through customer engagement and luxury experiences and Aston Martin Cognizant F1TM branded team during 2021• Selective, brand accretive partnerships• Ongoing customer relationship management and targeted and responsive after-sales service 2. DESIGN AND ENGINEERING
3. MANUFACTURING
BUSINESS MODEL
THE VALUE WE
CREATE
CUSTOMERS
Customers experience an emotional
connection with the brand as product
design, performance and quality ensure
a high-class and unique experience.
This has enabled us to build a strong
and loyal customer base.
WORKFORCE
Responding to the COVID-19
pandemic, including the health and
safety of our people, has been our
priority. Launch of organisational
restructure programme in line with
strategy. “I AM Aston Martin”
programme to develop people strategy
and culture to ensure the Company is a
great place to work. Workforce
engagement focused on the
challenging year for the Company.
INVESTORS
Significant steps to de-risk the business
and position the Company for long-
term, profitable growth for our
investors.
SUSTAINABILITY/COMMUNITY
Our commitment to responsible and
sustainable economic growth, and to
doing business in an ethical and
transparent manner. Initiatives to
support the community during
COVID-19 (see the Responsibility
section on page 27).
OTHER STAKEHOLDERS
Further information on our stakeholders
is set out in the People section on
page 22.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
11
• Stunning design and craftsmanship• Close collaboration between design and engineering teams to combine the best of both beauty and performance• Modular architecture approach links design and engineering to provide “lean” consistency and efficiency• Quality processes focus on “right first time” lean engineering• High level of in-house expertise along with key partnerships to enhance technological capabilities, and modular-based engineering and ”carry over-carry across” principle for cost savings and model synergies• Manufacturing operations based on principles of quality, craftsmanship and efficient teamwork • Controlling production to rebalance demand and supply to build a stronger order book and regain price positioning• Manufacturing methodology allows efficient and effective build of numerous vehicle derivatives• Strategic approach to procurement• Strategic footprint between both manufacturing facilities ASTON MARTIN AND THE LUXURY MARKET
ASTON MARTIN AND
THE LUXURY MARKET
ASTON MARTIN
Aston Martin is a globally recognised luxury brand and a
leader in the high luxury sports (“HLS”) car market. For more
than a century, the brand has symbolised exclusivity,
elegance, power, beauty, sophistication, innovation,
performance and an exceptional standard of styling and
design. Our cars sit primarily within the HLS car market and
our market leadership position is supported by award-
winning design and engineering capabilities, world-class
technology and modern facilities, creating distinctive model
line-ups. Our rich and prestigious heritage of delivering
beautiful awe-inspiring cars defines Aston Martin as
something truly unique within the automotive industry.
The Company sells cars worldwide from our manufacturing
facility and corporate headquarters in Gaydon, England, and
our manufacturing facility in St Athan, Wales. The
Company’s product focus is on three key pillars: front-
engine, SUV and mid-engine with an initial focus on
front-engine and SUV models comprising:
• the DB11 grand tourer;
• the Vantage front-engine sports car;
• the DBS Superleggera super grand tourer; and
• the high luxury DBX SUV – with first deliveries in
July 2020;
as well as derivative models of each of the above.
The third pillar, the mid-engine, takes its lead from the
era-defining Aston Martin Valkyrie Special hypercar, with
first deliveries planned for H2 2021, and the Aston Martin
Valkyrie AMR Pro which together establish our mid-engine
platform. Future plans for our mid-engine platform include
the Valhalla hypercar and the core model supercar, Vanquish.
Specials form an important part of our business plan,
providing a halo for our core cars and driving exclusivity
and desirability due to their limited volume, world-class
design and technical excellence. Special models are
usually highly subscribed prior to any significant capital
commitment by the Company and generally achieve a
higher margin than the core model range. A customer
deposit for each car is required on allocation and typically
allows Specials to be cash flow positive from design to the
end of the product life-cycle.
Further information on our business model is set out on
page 10.
THE HIGH LUXURY SPORTS CAR MARKET
Aston Martin operates primarily within the HLS car market
where it is positioned along with other key players such as
Bentley, Ferrari, Lamborghini, McLaren and Rolls-Royce,
while Vantage has some competitors within the luxury and
performance premium market. HLS car market manufacturers
typically employ a low-volume production strategy to
maintain a reputation of exclusivity and scarcity among
customers. This low-volume strategy, combined with the
quality and performance of the cars produced, typically
allows manufacturers to charge high average selling prices.
Customer demand is enhanced through new product
offerings, which tend to drive sales volumes even in difficult
market conditions. Demand is maintained through the lifecycle
of the product by introducing new derivatives, performance
and quality upgrades and new personalisation options.
The market can be broken down by price range and the
degree of sporting characteristics of specific car models such
as hypercars, supercars, sports cars, grand tourer cars, super
grand tourer cars, SUVs and sedans. Hypercars and special
editions are the top models within the HLS car market.
These products are produced in very limited volumes, are
priced at significant premiums and can appreciate in value
quickly following their initial sale. These models also enable
the introduction of new technologies which can then be
applied to the broader product range.
The historic growth in the HLS car market has been driven
mainly by high net worth individuals (“HNWIs”), the key
customer in the market, as the size and spending capacity of
this key client base has grown significantly in recent years.
The global HNWI population has grown by a Compound
Annual Growth Rate (“CAGR”) of approximately 7%
between 2011 and 2019 to approximately 19.5m individuals
globally in 2019 (World Wealth Report 2020 from
Capgemini). HNWI wealth has also grown at a CAGR of 7%
from 2012 to 2019 (World Wealth Report 2020 from
Capgemini). Prior to the uncertainties of COVID-19,
HNWI wealth was expected to continue to grow by an
estimated CAGR of approximately 5% over 2019 to 2024
(Knight Frank 2020 Wealth Report).
12
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN AND THE LUXURY MARKET
The global impacts of COVID-19 have been significant and
are ongoing and so the future impacts for the Company and
the HLS car market as a whole are currently uncertain.
However, based on past trends we believe that the Company
is well-positioned with dealers in attractive key markets and
the right products to take advantage of these positive trends
if they continue, and to further establish the Aston Martin
brand. We are one of the few luxury automotive
manufacturers developing a full core model product
portfolio aimed at addressing a wide spectrum of the high
luxury car market. This will enable us to appeal to a more
diverse range of HNWIs than our competitors (including
younger and female HNWIs) and to access the important
luxury SUV and mid-engine markets.
With effect from the 2021 season under an agreement with
Racing Point, the Racing Point F1TM team has become the
Aston Martin Cognizant F1TM branded team, bringing an
Aston Martin team back to the F1TM grid for the first time
since 1960. The Aston Martin Cognizant F1TM team will
provide us with an improved global marketing platform
particularly for our mid-engine cars, allowing us to benefit
from increased global brand exposure.
COVID IMPACTS ON THE MARKET AND OUR
PERFORMANCE IN 2020
The global outbreak of COVID-19 has and is likely to
continue to impact the Company and many of our suppliers,
dealers and customers for an indeterminable period of time.
In particular, the pandemic has caused dealer and consumer
demand for cars and sales of luxury goods more generally to
decline significantly, in part due to lockdown measures
imposed across the regions in which we operate. This included
impacts on our dealer network with a significant percentage
of our network closed for extended periods of time during
the year. This was the primary driver of the 32% decline in
our retail sales (being dealer sales to our customers) for
the year.
More information on our 2020 financial performance can be
found in the Group Financial Review set out on page 29.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
13
STRATEGY
A NEW APPROACH
VISION AND PURPOSE : TO ENRICH WHAT IS UNIQUE TO THE ASTON MARTIN BRAND –
THE COMBINATION OF HIGH PERFORMANCE AND ULTIMATE LUXURY TOGETHER IN ONE
AUTOMOBILE. WE WILL ACHIEVE THIS BY BECOMING THE MOST AGILE AND EFFICIENT
COMPANY IN THE LUXURY SEGMENT, TO ACHIEVE THE BEST OUTCOME FOR THE PRODUCT,
OUR CUSTOMERS, OUR INVESTORS AND OTHER STAKEHOLDERS.
CREATING A WORLD-CLASS LUXURY AUTOMAKER
AND MAXIMISING SHAREHOLDER VALUE
In light of the Company’s 2019 operational and financial
performance and a challenging HLS car market, we
conducted a comprehensive review of our business and
longer-term strategic options and took significant steps to
strengthen our leadership and capital structure. Our new
leadership team of Tobias Moers and Kenneth Gregor have
a wealth of automotive experience, and our Executive
Chairman has world-class luxury retail experience. We
strengthened our capital structure with the significant
investment by the Yew Tree Consortium and other
shareholders through the financing and capital transactions
completed during the year. Importantly, we announced our
landmark Strategic Cooperation Agreement with Mercedes-
Benz AG to secure access for the Company to world-class
technologies critical to supporting our long-term expansion
plans. More information on the capital and financial
transactions which took place during the year can be found
in the Chief Financial Officer’s Statement on page 28. More
information on the Strategic Cooperation Agreement can be
found in the Directors’ Report on page 83.
Our new business plan is focused on turning around
performance, restoring price positioning and delivering a
more efficient operational footprint to de-risk the business
and position the Company for long-term, profitable growth.
We are dedicated to building on the inherent strengths of
our business, including our brand, engineering prowess and
the skills of our people to maintain our reputation as a
pre-eminent luxury car brand and to forge the foundations
for a bright future.
Delivery of improvement in profitability starts with an
enhanced product offering and disciplined production to
order, to generate a margin more aligned to the luxury
automotive segment. This will be supplemented with an
enhanced operational focus on improved manufacturing
efficiency, cost and investment control and greater discipline
on cash flow, driven by a strategy to optimise the Company’s
structure to deliver an operational level of excellence in
line with the updated product and new business plan.
More detail on the key strategies underpinning the business
plan are set out on the opposite page.
The Company is targeting revenue of approximately £2bn
and Adjusted EBITDA of approximately £500m by financial
years 2024/2025, underpinned by the Strategic Cooperation
Agreement with Mercedes-Benz AG and targeted annual
capital expenditure of £250m to £300m per annum between
2021 and 2025.
By 2025, the plan is to produce about 10,000 units a year.
Importantly, we will move into the more profitable segment
of mid-engine cars, particularly leveraging the reach and
branding of the Aston Martin Cognizant F1TM branded team
for the performance road car business. In particular, we are
looking forward to delivering the Aston Martin Valkyrie
Special hypercar from the second half of 2021 which will
serve as ambassador for our mid-engine programme.
14
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
KEY STRATEGIES UNDERPINNING
THE BUSINESS PLAN
STRATEGY
OFFER CORE PRODUCT FOCUSED ON A
THREE-PILLAR STRATEGY: FRONT-ENGINE,
SUV AND MID-ENGINE
• A three-pillar product strategy to include a core car in
each segment as well as derivatives and in-cycle
improvements of each core model to maintain demand
over the product life cycle.
• Special editions to enhance brand exclusivity, profitability
and profit margins.
• Accessing the luxury SUV segment and customers’ need
for a more versatile, luxurious and comfortable car, with
the launch of our first SUV, the DBX in 2020.
• Addition of mid-engine cars to enhance our offering, with
a core mid-engine supercar (the Vanquish) taking its lead
from the Specials programme of the Aston Martin Valkyrie
and the Valhalla hypercars.
TRANSITIONING TO “BUILD-TO-ORDER”
AND PERSONALISATION
• Focus on restoring price positioning and delivering a more
efficient operational footprint in order to de-risk the
business and position it for controlled, long-term,
profitable growth.
• Move towards a build-to-order strategy to manage our
sports car wholesales to maintain the appropriate balance
between supply and demand to regain a stronger order
book, pricing power and margin enhancement.
• Strong progress in reducing global dealer inventory during
2020 with de-stocking of the dealer network by more than
1,500 sports and GT units.
• Reinvigorate marketing initiatives to raise brand awareness
and drive volumes including digitally led, personalised
marketing engagements, “Art of Living” experiences, the
exclusive Henniker club and leveraging the Aston Martin
Cognizant F1TM team during 2021. The F1TM sponsorship
agreement, with commercial terms commensurate with
the Company’s prior F1TM expenditure, is expected to help
reignite the brand and further increase its desirability.
DEVELOP SPECIALS PIPELINE TO ENHANCE
FINANCIAL PROFILE
• Enhance our core range of cars by the addition of Special
edition models each year to showcase our technical
excellence and perpetuate our brand uniqueness,
exclusivity and desirability.
• Specials demand high price points for the enhanced
features they offer, are typically fully allocated prior to any
significant capital commitment and generate higher
margins than the core range.
• Deposits are required on allocation which typically allow
Specials to be cash flow positive from design to the end of
the product life cycle. This helps to maintain and control
working capital swings.
ENHANCE STRATEGIC PARTNERSHIPS
• Carefully chosen partnerships are a source of technical
expertise, brand strengthening and future growth.
• The Strategic Cooperation Agreement with Mercedes-Benz
AG enables us to secure access to world-class technologies
critical to supporting our long-term product expansion
plans, including electric and hybrid powertrains.
• Our collaboration with Red Bull Advanced Technologies
has resulted in the widely anticipated Aston Martin
Valkyrie which represents innovative design and
extraordinary performance for a road car.
CONTROL COST AND INVESTMENT
• Commitment to pursuing available revenue-generating
opportunities in a manner that generates a high
incremental return on our investments.
• Key priorities are to focus on new growth areas such as
the SUV and the mid-engine markets to drive increased
revenue and margins.
• Introduction of targeted capital investments, a new cost
structure and lower sales volumes with premium pricing
power to increase cash flows and margins.
• Launched a comprehensive programme (”Project Horizon”)
to improve efficiency, reduce costs and improve
profitability in line with our plans.
• Consultation process with our employees and trade
unions to implement a restructuring plan and reduce
personnel by up to 500 permanent employees and 150
contractors, to enhance efficiency and reduce costs in line
with lower than planned production volumes.
• We expect that advances, such as our modular based
engineering which allows us to use shared systems and
components to reduce engineering complexities, will
result in cost-saving and model synergies going forward.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
15
KEY PERFORMANCE INDICATORS
KEY PERFORMANCE INDICATORS
FINANCIAL MEASURES
We use a number of KPIs to monitor the performance of the business and measure how we are delivering against our plans
to become a world-class luxury automaker. Elements of Executive remuneration for 2020 are based on performance against
the Adjusted EBITDA.
Reflecting changes in metrics used by the team aligned to the medium-term plan, the KPIs of Adjusted Diluted EPS and
Adjusted Return on Invested Capital have been replaced with Free Cash Flow (defined as operating cash flow less capital
investment and net interest). This metric encompasses generation and uses of cash, including investment and funding costs,
as the business focuses on executing its plan to become sustainably cash generating.
REVENUE (£’M)
WHOLESALE VOLUMES (UNITS)
593
876
1,094
980.5
611.8
3,687
5,098
6,441
5,862
3,394
20161
20171
20181
20191
2020
2016
2017
2018
2019
2020
This measures the appeal of our brands, our ability to build and sustain brand
equity and increase market share through product expansion.
This includes sales from the Company to its dealers and measures the appeal
of our products across different segments and markets and reflects actions
taken to right-size dealer and Company inventories.
PERFORMANCE
2020 declined by 38% due to reduced wholesale volumes.
PERFORMANCE
Volumes decreased 42% as the Company reset GT/ sports
car volumes, aligning supply to demand and COVID-19
weighed on consumer confidence and retail demand.
OPERATING (LOSS)/PROFIT (£’M)
(32)
149
69
(52)
(322.9)
16
125
144
(10)
20161
20171
20181
20191
(224.9)
2020
Operating (loss)/profit £m
Adjusted operating profit £m
This measures our operating profitability.
PERFORMANCE
Operating loss of £323m included pre-tax adjusting
operating items of £98m largely relating to impairment of
capitalised development costs due to technology and cycle
plan changes. The revenue decline as well as some higher
costs, such as a £27m increase in depreciation and
amortisation as DBX deliveries started also contributed to
the year-on-year profit decline.
ADJUSTED EBITDA (£’M)
207
244
101
118.9
(70.1)
20161
20171
20181
20191
2020
This measures our operating profitability and is an approximation of
underlying cash generation prior to capital investment allocation.
PERFORMANCE
Adjusted EBITDA was £(70)m with reduced revenue due to
lower volumes and elevated retail and customer financing
support to aid the rapid de-stocking of the dealer network.
16
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
NET DEBT (£’M)
NET DEBT TO ADJUSTED EBITDA
(“ADJUSTED LEVERAGE”)
600
673
560
987.6
726.7
3.8
2.0
2.3
8.3
N.M
20162
20172
20182
2019
2020
20161
20171
20181
20191
2020
This measures our gross debt less cash and cash equivalents.
PERFORMANCE
Net debt was £727m, substantially lower due to cash
inflow from financing activities, including gross proceeds
of £813m in new equity and £1.1bn equivalent of US$ notes
issued as part of the refinancing.
FREE CASH FLOW (£’M)
(58.2)
(46.9)
(125.9)
(337.8)
(539.3)
2016
2017
2018
2019
2020
This measures generation and uses of cash, including investment and
funding costs.
PERFORMANCE
Free cash outflow of £539m increased year-on-year principally
due to the operating loss, sustained investment in future
products with capital expenditure of £261m, a working capital
outflow of £109m and net interest costs of £80m.
Adjusted leverage measures the Adjusted EBITDA against Adjusted Net Debt,
measuring our ability to meet our financial obligations while investing for
the future.
PERFORMANCE
Adjusted leverage is not measured due to the negative
adjusted EBITDA for the year.
OTHER MEASURES
The Committee has introduced a Group scorecard of
performance measures for the 2021 annual bonus to better
reflect annual progress on our business plan and latest KPIs.
This Group scorecard will be cascaded throughout the
Company to apply to annual bonus for all employees,
including the Executive Directors, providing strong
alignment of focus and a ‘One Team’ approach. For 2021,
the Scorecard will be weighted 80% on financial measures
(with a 50% weighting on Adjusted EBITDA, 20% on Free
Cash Flow and 10% on Wholesale volumes) and 20% on
Quality performance. This will result in “Quality” being
introduced as a new KPI for 2021. The definition of the
quality measure is currently being considered and will be
reported on in the next year’s Annual Report.
Non-financial measures have an important role alongside
financial measures to inform decision making and to
evaluate Company performance. During the year there was
a comprehensive review of the business and longer-term
strategic options, the institution of an operational review and
significant steps taken to strengthen the executive leadership
and capital structure of the Company. As indicated above
“Quality” is being introduced as a new KPI and the new
executive management plan to assess appropriate additional
non-financial measures with a view to establishing the key
non-financial metrics for future reporting. Under review are
measures relating to employee satisfaction, health and safety
and customer satisfaction.
1. For the 12 months ended 31 December 2019 and 31 December 2018 the comparatives were restated.
Details of this restatement are shown in note 2. 2016 and 2017 have not been restated.
2. Net debt in 2016 to 2018 did not include lease liabilities as this standard was not adopted until 1 January 2019.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
17
PEOPLE AND STAKEHOLDER ENGAGEMENT
PEOPLE
OUR PEOPLE
We continue to be committed to making the Company a
great place to work for all our colleagues and, while FY
2020 proved to be an extremely difficult year for all of us as
it did for so many globally, we are proud of our people and
all we have achieved together during the year. We would
like to sincerely thank all of our workforce for their efforts in
FY 2020 which were exceptional, despite the ongoing
uncertainty and challenging circumstances.
The key areas of people focus during FY 2020 have included:
• responding to the COVID-19 pandemic, including a focus
on the health, safety and wellbeing of our people;
• launching an organisational restructure programme,
in line with our business strategy; and
• communicating and engaging with our people on a
regular basis and in a transparent way.
As a key element of the Company-wide turnaround, we
have launched the “I AM Aston Martin” workstream as part
of Project Horizon. This is a programme focusing on
developing our people strategy, including our organisational
structure, roles and responsibilities, communication and
engagement, capabilities and diversity and inclusivity to
ensure the Company is a great place to work. Further
information on these areas is detailed below.
RESPONDING TO THE COVID-19 PANDEMIC
Our response to COVID-19 has been unprecedented, with
the safety of our people, their families, business partners,
customers and our local communities our primary concern.
We are committed to operating in the safest and most
responsible way that protects our people and all those
connected with us, while following public health advice
from relevant governments in support of their efforts to
contain the spread of the virus.
All production at our UK manufacturing facilities was
temporarily suspended from 25 March 2020, when the
first nationwide lockdown was announced by the UK
Government. We began the process of furloughing
employees and accessed financial support offered by the
Government’s “Job Retention Scheme”, information on
the support we accessed is detailed on page 31.
From the end of March 2020, we worked closely with
employees and trade unions to develop and implement
protocols to protect employee health and safety in our
production facilities to enable people to return to work. In
early May 2020, we reopened our St Athan manufacturing
site, with employees returning on a phased basis with strict
“return to work” protocols issued, ensuring people who
needed to be on site could return to work as safely as possible.
Production also resumed at our Gaydon site in August 2020,
where learnings from the reopening of St Athan were carefully
considered. The measures put in place included temperature
checks on arrival on site, masks to be worn at all times
except when sitting alone at a desk, social distancing of at
least 2 metres to be maintained at all times, hand-washing
and readily available sanitiser and PPE for those employees
where social distancing is not possible. These measures
have continued to evolve as we regularly review the
situation whilst working closely with all of our stakeholders
including employees, the trade union, the Government,
public health authorities and local communities.
We continue to have many of our people working at home
given the early 2021 lockdown in the UK and have
implemented an on-site COVID-19 testing programme, with
this now rolled out across all UK sites. Testing takes place
twice a week and is administered by a nurse, healthcare
professional or first aider. The rapid flow antigen test is used
giving results in 15 minutes, with any positive case found
helping to stop the spread of the virus among our
employees, colleagues and families.
ORGANISATIONAL RESTRUCTURE PROGRAMME
We launched an organisational restructure programme
during FY 2020 to right-size the Company in line with our
business plan and to ensure we put the right people and
structure in place to successfully deliver our strategy.
In June 2020, we began the programme by launching a
number of employee consultation processes on proposals
to reduce employee numbers by up to 500, reflecting lower
than originally planned production volumes and improved
productivity across the business. These were managed
through a number of employee representative bodies for
each area of the business and with our trade union
stakeholders (Unite). Management’s aim continues to be to
minimise the impact on employees, protecting as many jobs
as possible, understanding the uncertainty and concern
faced by our people.
As a result of the constructive working partnership with our
representative groups and Unite, we had, by 31 December
2020, made good progress, with headcount c.300 lower
than in April 2020, with 40% of this reduction due to
contract and agency staff release, around 35% voluntary
redundancy leavers and around 25% compulsory
redundancies. All our people who left the Company through
redundancy were offered outplacement support, with a high
take up rate of this support. The restructure programme is
ongoing and is expected to be completed by the end of June
2021.
18
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
PEOPLE AND STAKEHOLDER ENGAGEMENT CONTINUED
Until 2019, we conducted an annual workforce engagement
survey. Given all that was happening in 2020, both for the
Company and externally with COVID-19, a survey was not
carried out during the year. We are reviewing our approach
to the engagement survey in FY 2021. A key aim of this
review is to enable us to benchmark our results not only
year-on-year but also against industry and FTSE peers
and to report on “employee satisfaction”, by adopting an
engagement index as an important KPI for the business.
Given the review of approach, the next engagement survey
will be conducted in H2 FY 2021. Follow-up actions
at Company, function and team-level will be developed
and then actioned and reported on to the workforce.
Accountability for actions will be cascaded through the
organisation, to ensure follow-up and responses are relevant
at every level through the Company.
CAPABILITY DELIVERY
We are focused on building capability across the Company
to ensure our people have the right skills to deliver the
business plan and we are committted to helping our
workforce to develop and grow throughout their careers.
Management development qualifications are offered across
the Company. These include Chartered Management
Institute and MBAs for our high potentials and we also
operate an online global learning management system,
accessible at all times to all our employees globally.
Our learning and development offering proved vital to a
number of our workforce who were unable to work due to
the COVID-19 pandemic and were able to access and
continue their studies during this period.
We operate a People Committee, which is a group of our
most senior executives, responsible for overseeing people
activities across the business and ensuring we have a strong
talent pipeline and capability in the areas most critical to the
delivery of our strategy. This Committee meets quarterly to
review key people initiatives and identify high performing
talent with the potential to progress into senior positions.
The People Committee is a key stakeholder of the “I AM
Aston Martin” workstream.
COMMUNICATING AND ENGAGING WITH OUR PEOPLE
We recognise that open, transparent, two-way engagement
with our people is of vital importance across our business.
Listening to our employees is key as we seek to ensure they
feel like key stakeholders of the business, their views are
valued, and they feel able to speak up, be honest and be
themselves at work. Communication with our people has
been critical during the uncertainty of the COVID-19
pandemic and our ongoing organisational restructure
programme. As part of the “I AM Aston Martin” workstream,
and as we hopefully return to more “business as usual”
times, we are developing and will work to a clear
communication strategy for 2021 and beyond.
We launched a COVID-19 corporate update portal,
providing latest information and Company actions in one
place, accessible to all employees at all times. We have
distributed all-employee communications regularly since the
pandemic began, including from our CEO, Tobias Moers,
who has given regular updates since he joined in August,
including by email, video messages and live townhall
meetings. Management have regularly engaged with
employee representative groups and the trade union (Unite)
on the impact of the COVID-19 pandemic on the business,
the actions taken in response and updating on the
organisational restructuring.
We have also continued to share information about
Company matters with our people, including quarterly
results, major business decisions and other matters which
affect our workforce, through a variety of media, including
our intranet, internal emails, newsletters and team briefings.
We have an Employee Engagement Group (EEG) which is a
well-established group, usually meeting four times a year to
discuss views, ideas and concerns raised by the workforce.
Two meetings were held in the first half of the year – these
were well attended, with elected members from all areas of
the Company bringing forward comments and views from
their populations. As we hopefully return to more business as
usual conditions, EEG meetings will resume with normal
frequency in FY 2021. Imelda Walsh held the role of
Workforce Independent Non-Executive Director, with
responsibility to directly engage with our workforce until she
stepped down at the end of May 2020. Imelda attended the
spring meeting of the EEG and provided feedback on this to
the Board. Anne Stevens was appointed to the Board in early
February 2021 and has taken up the role as the Workforce
Independent Non-Executive Director, enabling us to ensure
that workforce views continue to be highlighted to the Board.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
19
PEOPLE AND STAKEHOLDER ENGAGEMENT CONTINUED
DIVERSITY AND INCLUSION
We are committed to creating, delivering and incentivising
an inclusive staff experience that aligns with what the
Company needs to deliver our strategy. Diversity is core to
our principles of fairness and respect and drives creativity,
innovation and strategic decision making. Developing and
growing our diverse workforce is critical to our future
success by better equipping us to deliver the needs of our
customers now and in the future. We recognise that we have
work to do in this area and that consistent and continuous
actions to push a greater balance of diversity are vital.
Broadening our diversity and inclusivity agenda is a key
priority for the Company in FY 2021, as part of our “I AM
Aston Martin” workstream.
We remain committed to offering equal job opportunities for
all, irrespective of gender, and continue to invest in initiatives
to attract and retain the best possible talent for our organisation.
EMPLOYEES BY GENDER (AS AT 31 DECEMBER 2020)^
Senior management team
Senior leadership team
Other employees
Total
EMPLOYEES BY REGION (AS AT 31 DECEMBER 2020)^
Asia Pacific
EMEA
UK
Americas
Total
Operating within the manufacturing and engineering
industry has historically led to a higher proportion of men
than women in our workforce. Our gender diversity figures
are set out in the table below, and our Gender Pay Gap
(GPG) report is available at www.astonmartinlagonda.com.
Our mean pay gap has decreased from 7.0% in 2019 to
2.56% in 2020, largely due to the temporary salary and fee
waivers taken by Board members and senior management
during April, May and June. The full GPG report sets out
and explains our numbers in detail, together with the
initiatives we operate to focus on addressing gender
diversity in our workforce.
Male
7
53
1,937
1,997
Male
24
22
1,931
20
1,997
Female
% female
–
12
333
345
0.0%
18.5%
14.7%
14.7%
Female
% female
20
8
311
6
345
45.5%
26.7%
13.9%
23.1%
14.7%
Note: Data by gender and region is shown for 2,342 permanent Company employees only
^ Values assured by ERM CVS
EXTERNAL ASSURANCE OF RESPONSIBILITY AND PEOPLE DISCLOSURES
ERM CVS has provided limited assurance over selected metrics in the “Responsibility” and “People” sections of the
Annual Report, as indicated by the “^” Symbol. This is in accordance with the International Auditing and Assurance
Standards Board’s (ISAE3000 (Revised)) international standard. To see the ERM CVS assurance statement please visit
www.astonmartinlagonda.com.
20
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
PEOPLE AND STAKEHOLDER ENGAGEMENT CONTINUED
WELLBEING AND HEALTH AND SAFETY
Safeguarding the health and wellbeing of our employees is
of primary importance. Our processes aim to ensure the
health and safety of our workforce, visitors and the local
community. Our aim is to be a centre of excellence and for
the Company’s Health and Safety Management System to be
aligned with best practice.
To continually drive improvement in our processes, we
monitor the Accident Frequency Rate (AFR) within the
Company and across our various sites to identify where
improvements can be made. In 2020, the Company’s AFR
increased (see table below). This can be attributed to two
factors, first the commencement of full-scale operations
at our St Athan plant and second our mature Gaydon
manufacturing facility with a significantly lower AFR was
not operational for five months of the year and therefore not
contributing to the AFR during that time. While we are
disappointed by the increase in AFR, our AFR rate of 1.44 in
2020 is still significantly below the industry standard of 3.0
and motor industry average of 6.7.
Throughout 2020 and continuing into 2021, we have
increased our focus on employee wellbeing and
communication as set out above. This has been particularly
important during the pandemic and increase in working
from home. Actions taken during the year have included the
launch of a wellbeing portal, aimed at providing employees
with information and support for maintaining physical,
mental and financial wellbeing, offering “Positive Coping”
webinars, mental health awareness training, a “Thrive” App
to support mental health and an Employee Assistance
Programme. We are also developing a flexible working
policy to be implemented in 2021.
WELLBEING AND HEALTH AND SAFETY (AS AT 31 DECEMBER 2020)
Accident Frequency Rate*#
Sword of Honour Award
BSC Health and Safety audit score
2018
1.27*
2019
1.04**
2020
1.44
7th consecutive time
8th consecutive time
95.50%
94.44%
9th consecutive time
N/A~
* Accident Frequency Rate (AFR) – AFR accident frequency rate for AML UK employees / 200,000 manhours (or per 100 employees). The figure for 2018 only
includes loss-time incidents
** AFR rate is being restated following the inclusion of data from AML sites and adjusting the calculation in line with the Health & Safety Executive (HSE)
recommendations
# This figure only includes UK employees
~ The BSC Health and Safety Audit Score will not be completed until March 2021 due to COVID-19 pandemic delays
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
21
PEOPLE AND STAKEHOLDER ENGAGEMENT CONTINUED
STAKEHOLDER ENGAGEMENT
SECTION 172 STATEMENT: THE BOARD RECOGNISES THAT OUR BUSINESS AND OUR
BEHAVIOURS IMPACT OUR CUSTOMERS, PEOPLE, INVESTORS AND OTHER STAKEHOLDERS.
AS DIRECTORS OF THE COMPANY, WE MUST ACT IN ACCORDANCE WITH A SET OF GENERAL
DUTIES WHICH ARE SET OUT IN S172 OF THE COMPANIES ACT 2006 AND, IN DOING SO, SEEK
TO CONSIDER THE INTERESTS OF OUR STAKEHOLDERS WHEN REACHING DECISIONS.
We believe that stakeholder engagement is a key element of delivering a sustainable business and this activity is undertaken
across our business at different levels of the organisation. During the year much of our stakeholder engagement was driven
by COVID-19 impacts as well as the significant steps the Company was taking to strengthen our leadership and capital
structure. Information on our key stakeholders, their priorities and how we engaged with them during the year, is provided
in the table below and throughout this Report. Regular updates were provided to the Board on these engagement activities
with more information set out in the Governance Report on page 49.
Stakeholder
Stakeholder priorities
Engagement during 2020
CUSTOMERS AND
ENTHUSIASTS
Customers and enthusiasts
are key to our brand and
our business success. Their
emotional connection with
the brand enables us to
build a strong and loyal
customer base.
OUR PEOPLE
Our people are the key to our
success. Our performance
depends on our passionate,
knowledgeable, experienced
and creative people.
• Quality and safety
• With the reduction in the number of physical events,
of products
• Car design and
performance
• Environmental commitment
• Brand strength
• After-sales service
• Cost of ownership
utilisation of online channels to keep customers and fans
engaged. Both V12 Speedster and Vantage Roadster were
launched digitally, and the Geneva Motor Show was replaced
with a live streamed event from Gaydon
• Utilisation of the Company’s CRM systems to engage
customers digitally and keep them informed of key model and
Company updates during the pandemic
• COVID-19 led to an increase in social media engagement
and interaction, with traffic to the web-based configurator
also increasing
• Job security, personal
• Regular CEO updates to the workforce
development and career
opportunities
• Health and safety
• Engagement
• Feeling valued
• Reward and benefits
• Diversity and inclusion
• Environment and social
responsibility
• Employee/trade union engagement on development and
implementation of COVID-19 protocols for on-site health
and safety
• Launch of the COVID-19 employee portal with latest
information and Company actions and employee wellbeing
support activities
• Employee and trade union consultation as part of organisation
restructure programme
• Launch of the “I AM Aston Martin” programme to develop
our people strategy and culture
• Engagement by the Workforce Independent Non-Executive
Director (prior to COVID-19 restrictions) with the Employee
Engagement Group (EEG)
• Given events, the regular Employee Engagement Survey was
suspended this year but plans to reinstate in 2021
• For more information see our People section on page 18
22
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
PEOPLE AND STAKEHOLDER ENGAGEMENT CONTINUED
Stakeholder
Stakeholder priorities
Engagement during 2020
INVESTORS
Continued access to
capital is vital to the
long-term performance
of our business. Our focus
is to ensure investors
understand our strategy,
performance, ambition
and culture and to
understand their priorities.
DEALER NETWORK
Our dealers are the direct
contact point for our brand
to our customers. They
enable us to maintain
control over our brand
positioning and luxury
customer service in a
cost-effective way.
• Delivery of the Company’s
• Investor relations programme delivered remotely following the
new strategy
implementation of COVID-19 protocols
• Robust financing
• Increased activity around refinancing and equity raises
• Financial performance
• Sustainability
• Governance and
transparency
• Confidence in the
leadership
• Stability and predictability
with no surprises
• Brand strength and
Company support
• Car design and
performance
throughout the year alongside communication of corporate
events (e.g. DBX launch) and strategic updates (e.g. Mercedes-
Benz AG Strategic Cooperation Agreement)
• Presentations and meetings by the Executive Chairman, CEO,
CFO and Director of Investor Relations
• Individual shareholders engaged via direct communications, our
website (including webcasts of results presentations and key
announcements), press activities, Annual Reports and General
Meetings and Annual General Meeting (AGM)
• Retail offer to shareholders in June as part of wider equity placing
• Move to principally on line engagement supported efficient
global reach
• For more information see our Governance Report on page 52
• CEO engagement to strengthen dealer relationships and to
explain build-to-order strategy
• Two virtual dealer conferences held during the year
• Dealer network programme to educate, develop and monitor
• Quality and safety of
products
dealers. Distance learning modules to safely maintain
dealer training
• Customer satisfaction
• Revised guidelines for sales and servicing to prioritise customer
and team safety
• Customer reporting system to track dealer performance
• Conditions accelerated move towards increased digitisation and
growth in online engagement, including highly targeted digital
marketing activations
• For more information see our Global Footprint section on page 2
LOCAL COMMUNITIES
Building positive
relationships with those
we impact enables us to
maintain trust and to
support our communities.
SUPPLIERS AND OTHER
PARTNERSHIPS
Our suppliers are
fundamental to our
business, particularly
ensuring their quality and
efficiency. Carefully
chosen partnerships
provide us with an
important source of
technical expertise and
brand enhancement.
• Trust and ethics
• Production of PPE for frontline workers including visors, and
• Safety
• Sustainability and non-
financial performance
including environmental
impact of our products
• Career opportunities for
members of the local
community
• Local operational impact
• Responsible procurement,
trust, ethics and open
dialogue
• Operational improvement
• Competitiveness
• Strong relationships
• Financial performance
• Building capability and
expertise
• Design and technical
expertise
intubation shields for intensive care staff
• Free emergency vehicle repairs for NHS staff through Aston
Martin Works
• Dedicated community investment team
• Sponsorship and employee volunteering
• Engagement with local councils on community matters
• For more information see our Responsibility section on page 27
• New Strategic Cooperation Agreement with Mercedes-Benz AG
securing access to technologies critical to our long-term plans
• Sponsorship of Aston Martin Cognizant F1TM team from 2021
to provide direct global marketing platform targeting key
customers and enhancing the brand
• Ongoing partnership with Red Bull Advanced Technologies to
create the Aston Martin Valkyrie
• Dedicated Supplier Quality Development team manages
supplier quality and performance
• Risk Management Centre actions operational responses to
supplier issues
• Establishing confident sources of supply for the future
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
23
RESPONSIBILITY
RESPONSIBILITY
WE CONTINUE OUR COMMITMENT TO BE A SUSTAINABLE LUXURY AUTOMOTIVE BUSINESS.
TO STRIVE FOR RESPONSIBLE AND ECONOMIC GROWTH, EMBRACING THE PRINCIPLES OF THE
UNITED NATIONS GLOBAL COMPACT AND THE TASK FORCE FOR CLIMATE-RELATED
FINANCIAL DISCLOSURES (TCFD). WE COMMIT TO DOING BUSINESS IN AN ETHICAL AND
TRANSPARENT MANNER.
The Group’s Environmental, Social and Governance (ESG) Strategy embodies the United Nations Sustainability
Development Goals (SDGs). Our focus is on striving for sustainable excellence and ethical decision making, with the aim of
delivering both stakeholder value and a competitive advantage to the Company.
We have ambitious global ESG goals, which are adopted at a local level. These shape the Company’s activities in the areas
of the environment in which we operate, our social responsibility and the governance of our operations. This is set out in
more detail in the diagram below.
DELIVERING STAKEHOLDER VALUE THROUGH ETHICAL AND SUSTAINABLE EXCELLENCE,
TO CREATE A LONG-TERM COMPETITIVE ADVANTAGE
MISSION
ESG STRATEGIC GOALS
SUSTAINABLE PRODUCT STRATEGY
Continued Fleet
CO2 Reduction
Sustainable Product
Enhancements
Portfolio
Electrification
Product
Safety
ENVIRONMENTAL
SUSTAINABILITY
SOCIAL RESPONSIBILITY
GOVERNANCE
Integrate environmentally
sustainable culture and practices
across the business
Ensuring we are a socially
responsible company and a
great place to work
Ensuring good corporate
governance and maintaining
a sustainable supply chain
• Reducing carbon emissions
• Building a sustainable culture
• Materiality Analysis
• Reducing energy usage and
• Promoting diversity & inclusion
• Board level commitment to ESG &
increasing efficiency
• Reducing waste
• Increasing recycling
• Reduce water consumption
• Employee engagement
• Health & wellbeing
• Community engagement
• Educational outreach
• STEM* promotion
• Philanthropic activities
TCFD
• Driving a responsible business
culture
• Modern Slavery Act commitment
• Responsible and ethical sourcing
• Transparency in the supply chain
* Science, Technology, Engineering, Maths (STEM)
ELECTRICITY
CONSUMPTION
DECREASED BY
5.5%
GAS
CONSUMPTION
INCREASED BY
2.7%
MANUFACTURED
CO2 PER UNIT
WATER
CONSUMPTION
DECREASED BY
41%
WASTE
DIVERTED
FROM LANDFILL
100%
WASTE
RECYCLED
5.01
(tCO2e)
61%
24
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
RESPONSIBILITY CONTINUED
Methodology
We calculate our greenhouse gas emissions in the following
way:
Scope 1 – Includes emissions of gas, petrol on site, diesel
used for emergency heating and firing pumps, refrigerant
refill, LPG and fuel from Company pool cars. Figures are
obtained through utility bills, direct from suppliers and
through the Company’s internal systems. The DEFRA
emissions factor for 2020 is then used to calculate the
figures.
Scope 2 – The Location-Based Assessment includes
emissions from electricity consumption, sourced direct from
utility bills, while the Market-based Assessment includes
emissions from electricity consumption based on sources of
electricity. The DEFRA/ IEA emissions factor for 2020 is then
used to calculate these figures.
Scope 3 – Includes emissions from business air travel,
management car miles, personal car mileage and employee
commuting figures. The DEFRA emissions factor for 2020 is
then used to calculate the figures.
This year we made a number of changes in our Scope 1 and
Scope 2 emissions calculations, including data from our
overseas operations as well as including refrigerant refill
used in our vehicles in our Scope 1 calculation for the
first time.
ENERGY EFFICIENCY
We continually strive to make improvements to our energy
efficiency across our sites with a number of energy efficiency
measures aimed at supporting our journey to carbon
neutrality. Over the course of the past year we commenced
full rate production at our St Athan facility, which has
substantially increased our energy consumption, despite
overall group volume being down. In this time we have
continued to roll out a programme of replacing all of our
legacy lighting for energy efficient LEDs across our portfolio.
This will continue into 2021 with a focus on our St Athan site.
Our production volume in 2020 was significantly lower than
in previous years (from 6,176 to 3,344 Units) due to the
COVID-19 pandemic and general business restructuring.
This therefore had a negative impact on our resource
consumption and GHG emissions per unit which were up
from 2.86 to 5.01 tCO2e. Please see Greenhouse Gas
Emissions Per Unit table on page 26.
To reduce our energy consumption, we have optimised our
Building Management System, including a greater level of
automation, to ensure that our lighting, heating and cooling
are streamlined to times when our sites are operational. In
addition to this we have re-invigorated our energy
management programme across the business, with a
renewed focus on site/departmental ownership of energy
consumption, which has led to greater employee awareness
and alignment with the Company’s ambitions.
In 2018 we made the decision to source our electricity for
our UK operations, through Renewable Energy Guarantees
of Origin (REGO) backed sources. We further enhanced this
in 2020 with the establishment of an energy partnership,
which will cover Renewable Energy supply starting in 2021,
with on-site generation to follow.
ENVIRONMENTAL SUSTAINABILITY
External focus continues to increase on companies’
environmental performance and how they respond to the
threat of climate change. We take our responsibility to the
environment seriously, with environmental sustainability
being an important focus in line with the TCFD. We will
move towards full compliance with TCFD for next year.
ENVIRONMENTAL POLICY
We are focused on our pursuit of continuous improvement
in our environmental performance including the prevention
of pollution and waste at source in line with our business
objectives, using recognised environmental best practices
wherever possible. Our Environmental Policy aligns with the
Company’s operations, including the design, engineering,
manufacture, servicing or restoration of our products or the
distribution of parts.
Our objectives and commitments to the environment and
the community are the following:
• Comply as a minimum with all relevant environmental
legislation as well as other environmental requirements,
whilst seeking to strive beyond these wherever possible.
• Commit to ongoing reductions in energy and resource
consumption in the manufacture and operation of our
vehicles, and an ongoing reduction in our carbon footprint.
• Assess through a risk-based approach the threats and
opportunities of climate change to the Company, our
activities, products and services with the aim of ensuring
the appropriate preparations are made.
• Set, monitor and attain all objectives and targets for
managing our environmental performance, to control
the environmental aspects of all products, processes
and facilities.
• Minimise the impact of our activities, products and
services through effective waste management.
• Give due consideration to environmental issues and
energy performance in the acquisition, design,
refurbishment, location and use of buildings.
• Promote sustainable product design and construction with
consideration from a life cycle perspective, using low
carbon and renewable energy resources wherever possible.
• Operate and maintain an environmental system in line
with ISO 14001:2015.
• Communicate internally and externally our Environmental
Policy, working with our employees, suppliers and
partners to promote improved environmental performance
and encourage feedback.
This policy statement represents our general position on
environmental issues, and the policies and practices we will
apply in conducting our business. This policy statement will be
reviewed each year by the Company’s Executive Committee.
GREENHOUSE GAS EMISSIONS
Our greenhouse gas emissions reported here are in
accordance with the Greenhouse Gas Protocol Corporate
Standard for the year to 31 December 2020. These are
monitored throughout the year to enable us to make
continued improvements, wherever possible. The intensity
ratio is measured as tonnes of CO2 equivalent per car
manufactured as it reflects the energy intensive nature of our
business and the impact of the growth of the business on our
immediate surroundings.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
25
RESPONSIBILITY CONTINUED
TOTAL GREENHOUSE GAS EMISSIONS
GHG Emissions Under Scope 1 (tCO2e)
GHG Emissions Under Scope 2 (tCO2e) – Location based*
GHC Emissions Under Scope 2 (tCO2e) – Market based*
GHG Emissions Under Scope 3 (tCO2e)
UK Total Gross Scope (Scope 1 & Scope 2)
ROW Total Gross Scope (Scope 1 & Scope 2)
Total Gross Scope (Scope 1 & Scope 2)
2017
2018
2019
2020
5,596.87
6,950.92
8,981.40
9,200.67^
8,045.34
7,493.70
8,683.50
7,545.86**^
–
5,899.90
3,484.61
687.28**^
11,294.66 13,331.11
8,806.94
6,620.37^
13,642.01 14,444.61 17,664.90
16,642.17^
–
–
–
104.36^
13,642.01 14,444.61
17,664.90 16,746.53^
* Market-based and Location-based approach adopted to quantify Scope 2 GHG emissions from 2018
** Scope emissions calculations include ROW operations
^ Values assured by ERM CVS
GREENHOUSE GAS EMISSIONS PER UNIT
Manufactured Volume (units)
Total Scope 1 Emissions per unit
Total Scope 2 Emissions per unit
^ Values assured by ERM CVS
TOTAL ENERGY CONSUMPTION WITHIN ORGANISATION
Electricity (MWh)
Gas (MWh)
Diesel (MWh)~
Gasoline (MWh)
LPG (MWh)
UK Total consumption
ROW Total consumption
Total (MWh)
2017
5,346
–
–
2018
6,432
1.08
1.17
2019
6,176
1.45
1.41
2020
3,343^
2.75^
2.26^
2017
2018
2019
2020
22,884.86
26,472.94
33,973.01 32,144.15**^
26,402.93
33,733.53
43,574.51 44,796.00^
–
–
14.92
4.34^
3,193.32
3,236.56
2,712.98
1,779.25^
–
–
563.60
43.52^
52,481.11
63,433.03
80,839.02 78,573.14^
–
–
–
194.11
52,481.11
63,433.03
80,839.02
78,767.26
~ Values in this table have been restated as we do not have any direct diesel usage within the organisation
^ Values assured by ERM CVS
** Includes ROW operations in calculation
PRODUCT SUSTAINABILITY
We continually look to make improvements in the CO2 footprint of our products, whilst investing in new technologies to
further reduce their carbon impact. We understand that having hybrid and electric options for our vehicles is imperative to
the Company’s future in this industry and our partnership with Mercedes-Benz AG is fundamental to this.
Our ambition is that by 2025 every one of our cars will have an electrified powertrain either hybrid or pure electric.
Our ultimate goal is that by 2030, 50% of our cars will be battery electric vehicles, 45% performance oriented electrified
power and 5% carbon for track-only use.
PRODUCT CO2 EMISSIONS
CO2 (g/km)#
# Figures based on WLTP test cycle
Vantage
Coupe
Vantage
Roadster
DB11 V8
Coupe
DB11 V8
Volante
DB11 V12
Couple
DBS
Superleggera
V12
DBS
Superleggera
V12 Volante
DBX
V8
264
263
254
257
303
306
306
323
WASTE MANAGEMENT
Working with our suppliers, partners and staff we continue to reduce our waste year on year, whilst continually looking for
ways to increase our recycling rates. Office waste was down over the course of the year, but this was largely due to staff
working remotely due to the COVID-19 pandemic.
Total waste (tonnes)
Reused (tonnes)
Recycled (tonnes)
Recover (tonnes)
2017
2018
2019
2020
1,320.99
1,800.00
1,566.02
394.39
46.12
43.11
842.73
1,262.86
432.14
494.03
40.21
987.81
538.01
8.72
243.82
141.85
26
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
RESPONSIBILITY CONTINUED
Annually, we support four charities. Two are selected to
reflect our Company culture, heritage and brand, whilst the
other two are chosen by our employees.
In 2020, we were proud to support the following two
corporate charities:
• The RAF Benevolent Fund, the RAF’s leading welfare
charity with a proud tradition of looking after all serving
and former members of the RAF as well as their partners
and dependent children.
• The Prince’s Trust, a youth charity that helps vulnerable young
people aged 11 to 30 get into jobs, education and training.
In addition to our formal charity partnerships, we actively
encourage our employees to support a range of other local
charities and community projects such as the “Helping
Hands Community Project” in Leamington Spa, which
supports the homeless and victims of domestic abuse, and
“Inspiring the Future”, an educational charity aimed at
connecting schools with inspirational volunteers.
SUSTAINABLE SUPPLY CHAIN
With our aim to improve the social, environmental and
economic impact of our operations, we are committed to
building a responsible supply chain with our partners. Our
policies and practices are designed to promote quality and
maintain high standards of sustainable and ethical sourcing.
Through the Aston Martin Responsible Procurement Guide
we have established a set of shared commitments with our
suppliers, including our expectations around working
conditions, human rights, regulatory compliance, safety,
ethical and environmental commitments. Our supply chain
management process enables us to work closely with our
suppliers to ensure all requirements are understood and
supported, with performance monitored and tracked.
The Company also has a policy to assess and address the
risks of violations of anti-human trafficking and anti-modern
slavery laws. We adopt procedures that contribute to ensuring
modern slavery does not occur in our business or supply
chain. Over the course of 2020 no human rights violations
were reported within the Group or our wider supply network.
A copy of our Modern Slavery Act Statement can be found on
our website at www.astonmartinlagonda.com.
2020 SUPPLIER BASE BY REGION
Africa
Asia Pacific
North America
Europe
UK
1.34%
0.01%
1.05%
72.70%
24.80%
EXTERNAL ASSURANCE OF RESPONSIBILITY DISCLOSURES
ERM CVS has provided limited assurance over selected metrics
in the “Responsibility” and “People” sections of the Annual
Report, as indicated by the “^” Symbol. This is in accordance
with the International Auditing and Assurance Standards Board’s
(ISAE3000 (Revised)) international standard. To see the ERM CVS
assurance statement please visit www.astonmartinlagonda.com.
WATER CONSUMPTION
Water consumption continues to be a focus for the business
following the introduction in 2018 of a water management
system to measure and monitor our water consumption,
recycling and discharge levels. This system has enabled us
to identify areas of high usage and to implement water
saving measures. Consumption in 2020 was down on 2019,
largely due to the reduced volume and staff working
remotely due to the COVID-19 pandemic.
WATER CONSUMPTION (M3)
Water consumption (M3)
54,029.25
59,233.78^ 34,477.65^
2018
2019
2020
^ Values assured by ERM CVS
Note: These figures represent the water consumption at our UK sites only.
SOCIAL RESPONSIBILITY
Ensuring Aston Martin is a socially responsible company and a
great place to work is a key priority. Our people are integral to
this and the “I AM Aston Martin” programme aims to ensure
the Company is a great place to work, by fostering greater
communication and engagement with our employees as well
as seeking to develop the capability, diversity and inclusivity of
the workforce and workplace. Further information is set out in
the People section on page 18.
HEALTH AND WELLBEING
The health and wellbeing of our employees, visitors and
communities is another critical element of our social
responsibility agenda. Our processes aim to ensure the
health and safety of our workforce, visitors and the local
community. Our Health and Safety Policy is developed in
line with ISO 45001:2018 guidance. Further details on
wellbeing and health and safety can be found in the People
section on page 21.
ANTI-BRIBERY AND CORRUPTION
To ensure that the Company and its employees conduct its
business in an ethical and transparent way, we have a
number of policies including in relation to anti-bribery and
anti-corruption, gifts and hospitality and whistleblowing,
that govern business conduct with our key stakeholders.
These policies include the giving and receiving of gifts,
meals and hospitality, invitations to government officials,
our approach to facilitation payments, and matters in
relation to the appointment of dealers. We have a gift and
hospitality register and an annual certification process to
monitor compliance whereby all employees are required to
review our Standards of Corporate Conduct and certify that
they have read and understood them.
COMMUNITY
As a business we actively engage in the communities in
which we operate. Core to our Corporate Responsibility
Strategy is partnering with local stakeholders and charities
to make our communities stronger and to have a positive
impact in the areas we work and live.
A key example of this was during the COVID-19 pandemic
when our teams supported the NHS, through the production
of PPE for frontline workers such as visors, gowns and
intubation shields for intensive care staff. We also offered
free emergency vehicle repairs for NHS staff through Aston
Martin Works.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
27
CHIEF FINANCIAL OFFICER’S STATEMENT
CHIEF FINANCIAL OFFICER’S
STATEMENT
Although the Company took actions on costs and received
benefits from the furlough credit scheme in the UK, profitability
was impacted by COVID-19 and the rebalancing of supply to
demand. Adjusted EBITDA declined to £(70)m. Free cashflow of
£(539)m included cash net financing costs of £80m; capital
expenditure of £261m with investment focused on DBX,
Vantage Roadster and Aston Martin Valkyrie; and a working
capital outflow (£109m) principally relating to payables. Free
cash outflow is expected to reduce significantly in 2021.
The Company took decisive action and completed a series of
financial transactions through the year to strengthen its financial
resilience and support its growth ambitions. In April, the
Company completed a capital raise of £536m, including a
£171m placing to the Yew Tree Consortium. The uncertainty
surrounding the duration and impact of COVID-19, however,
exacerbated the financial pressure of de-stocking the dealer
network and the Company raised a further £152m of equity in
June. In October, in parallel with the Mercedes-Benz AG Strategic
Cooperation Agreement, a further £125m was raised. In total,
£813m of gross equity proceeds were raised during the year.
Alongside the announcement of the Mercedes-Benz AG
Strategic Cooperation Agreement and equity raise in October,
we refinanced our senior notes, due to mature in April 2022.
The new US$ denominated senior notes comprise £840m
equivalent first lien with a 10.5% coupon maturing in 2025
and £259m equivalent second lien with 15% mixed coupon
split 8.9% cash and 6.1% PIK maturing in 2026. The second
lien notes have detachable warrants representing 5% of
diluted issued share capital. As a consequence of the
transactions undertaken in 2020, our liquidity has significantly
improved with £489m cash on the balance sheet at year-end
(2019: £108m) and net debt reduced to £727m (2019:
£988m). We will continue to prudently explore ways to further
augment and diversify our liquidity pools, and build on our
strengthened position and relationships today.
The Company is targeting revenue of c.£2bn and Adjusted
EBITDA of c. £500m by financial years 2024/25, underpinned
by the Mercedes-Benz AG Strategic Cooperation Agreement.
Capital expenditure, principally development costs, is planned
at £250m-£300m per annum and will be focused on areas that
differentiate our products. We are targeting positive free cash
flow (post financing costs) in 2023.
In summary, trading performance in 2020 was challenging
but the Company underwent substantial changes to
management, product, and balance sheet to position Aston
Martin for success in the future. Following the actions taken
this year, our focus will be on delivering against the medium-
term plan with tighter cost controls and improved efficiency
in capital investment to maximise shareholder value by
executing on our goal to become a sustainably profitable
world-class luxury automotive company.
KENNETH GREGOR
CHIEF FINANCIAL OFFICER
24 FEBRUARY 2021
KENNETH GREGOR
IN 2020 THE BUSINESS HAD TO FACE THE
CHALLENGES PRESENTED BY COVID-19, WHICH
EXACERBATED THE FINANCIAL PRESSURE FROM
THE DE-STOCKING OF DEALER INVENTORY.
WE COMPLETED THE REFINANCING OF OUR
BONDS IN OCTOBER ALONGSIDE A FURTHER
EQUITY ISSUANCE AND THE ANNOUNCEMENT
OF THE MERCEDES-BENZ AG STRATEGIC
COOPERATION AGREEMENT. THROUGH THESE
ACTIONS WE HAVE SECURED FINANCING TO
DELIVER ON OUR GROWTH AMBITIONS AND
MEDIUM-TERM PLAN.
2020 was a challenging year but we made good initial
progress on the turnaround of the business. In a short
amount of time, we have aggressively de-stocked GT/sport
dealer inventory, with dealer GT/sport stock levels down to
less than half their opening position at the start of 2020.
Wholesale volume was 42% lower in 2020 compared to the
prior year due to the de-stocking and the impact of
COVID-19. In addition, to achieve the retail sell-through to
drive the stock reduction, retail and customer financing
support remained at elevated levels. Together, these factors
weighed heavily on revenues, which were down to £612m.
Performance significantly improved in the fourth quarter
when the DBX, the Company’s first SUV, accounted for the
majority of units sold.
28
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
GROUP FINANCIAL REVIEW
GROUP FINANCIAL REVIEW
FINANCIAL HIGHLIGHTS
• Retail1 sales of 4,150 vehicles (down 32%) with
COVID-19 impacting dealer operations; improved
performance in Q4 with full quarter of DBX sales
• Wholesales2 of 3,394 vehicles (down 42%) reflected
action to reduce dealer stock levels and COVID-19
impact; Q4 included 1,171 DBX to meet customer
demand and deliver dealer stock
• Revenue declined to £612m and adjusted EBITDA to
£(70)m, principally due to reduced wholesales
• Q4 strongest quarter, material improvement versus Q3,
with 3% revenue growth and positive adjusted EBITDA
due to full quarter of DBX, 32 Specials (Q3: 10) and
reduction in total customer and retail financing support
• Operating loss of £(323)m includes £98m of adjusting
operating items, largely the impairment of capitalised
R&D, due to technology and cycle plan changes
• Free cashflow3 of £(539)m reflects the operating loss, a
working capital outflow of £109m, capital expenditure of
£261m and net interest paid of £80m; Q4 free cashflow
£(26)m
• Refinancing to strengthen financial resilience and support
growth ambitions resulted in increased year-end cash of
£489m (2019: £108m) and net debt substantially lower at
£(727)m (2019: £(988)m) with extended debt maturity
profile to 2025 and 2026.
1. Dealer sales to customers (some Specials are direct to customer).
2. Company sales to dealers (some Specials are direct to customer).
3. Operating cashflow less capital investment and net cash interest.
SALES AND REVENUE ANALYSIS
Number of vehicles
Retail
Core (excluding Specials)
Number of vehicles
Wholesales
Core (excluding Specials)
By region:
UK
Americas
EMEA ex. UK
APAC
By model:
Sports
GT
SUV
Other
Specials
31-Dec-20
31-Dec-19
Change
4,150
4,112
6,136
5,999
(32%)
(31%)
31-Dec-20
31-Dec-19
Change
3,394
3,351
820
923
865
786
691
1,116
1,516
28
43
5,862
5,798
1,429
2,050
1,074
1,309
2,250
3,384
–
164
64
(42%)
(42%)
(43%)
(55%)
(19%)
(40%)
(69%)
(67%)
n.m.
(83%)
(33%)
Note: Sports includes Vantage, GT includes DB11 and DBS Superleggera, SUV includes DBX and Other includes prior generation models such as Rapide AMR
Total retails were down 32% with dealer operations and customer demand impacted by COVID-19. Performance
significantly improved in Q4 from Q3 but remained down on the prior year, with increased DBX deliveries and despite a
second wave of lockdowns (Q4: (15%); Q3 (34%)).
Total wholesales decreased 42%. All regions declined, due to the plan to reduce dealer inventories, which was exacerbated
by the COVID-19 pandemic. The Americas faced the greatest headwind, as the region started the year with the highest stock
level, wholesales were down 55% year-on-year.
With GT/Sport retails significantly ahead of wholesales in unit terms, dealer inventory more than halved, reducing by 1,580
units. Having successfully achieved this rebalance, the Company no longer plans to report retail units in FY 2021, in line
with luxury disclosure. The Company now expects to largely complete the de-stock in Q1 2021, ahead of its original
expectations. Following a quality-led ramp-up in Q3, DBX volumes increased to 1,171 units in Q4 fulfilling customer orders
and delivering fleet vehicles to dealers. In Q4, total wholesales were ahead of retails in unit terms as the dealer DBX orders
were shipped.
The 43 Specials included 19 of the 25-unit run DB5 Goldfinger Continuations and 20 DBS GT Zagatos, which included a
prototype model.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
29
GROUP FINANCIAL REVIEW CONTINUED
REVENUE BY CATEGORY
£m
Sale of vehicles
Sale of parts
Servicing of vehicles
Brand and motorsport
Total
31-Dec-20
31-Dec-191
Change
535.1
56.6
6.6
13.5
611.8
880.8
63.0
9.3
27.4
980.5
(39%)
(10%)
(29%)
(51%)
(38%)
1. 2019 restated see note 2 of the Financial Statements for detail.
FY 2020 revenues declined to £612m as the Company reset GT/Sports car volumes, aligning supply to demand to regain
exclusivity, and COVID-19 weighed on consumer confidence and retail demand. With increasing deliveries of DBX in Q4
performance improved and revenue increased year-on-year.
To achieve the necessary re-setting of dealer stock, customer and retail financing support was elevated. While the level of
support per GT/Sport unit increased in Q4 versus Q3, fewer vehicles as a proportion received support with the start of
DBX deliveries.
Wholesale average selling price (ASP) was impacted by the customer and retail financing support and the de-stocking
dynamic, with retails significantly greater than wholesales for the year. However, in Q4 this impact was offset by product
mix and reduced de-stock impact, with core ASP increasing to £145k (Q3: £130k; Q4 2019: £127k1) and full year to £137k
(2019: £132k1).
While fewer Specials were delivered year-on-year (43 vs 64 in 2019), they were on average higher priced and supported an
increase in total ASP to £157k from £149k1 in the prior year.
The decline in brand and motorsport revenue is due to lower GT race car sales, with 61 cars sold in the prior year and 19
this year. For 2021 motorsport revenues are expected to remain low.
SUMMARY INCOME STATEMENT AND ANALYSIS
£m
31-Dec-20
31-Dec-191
Revenue
Cost of sales
Gross profit
Gross margin %
Operating expenses1,3
of which depreciation & amortisation2
Other expense
Adjusted operating loss1,3
Adjusted operating margin
Adjusting operating items
Operating loss
Net financing expense
of which adjusting financing items
Loss before tax
Taxation
Loss for the period
Adjusted EBITDA2,4
Adjusted EBITDA margin
Adjusted loss before tax2,4
EPS (pence)
Adjusted EPS (pence)2,4
1. 2019 restated see note 2 of the Financial Statements for detail.
2. Excludes adjusting items.
3. Includes (loss)/profit on disposal of fixed assets.
4. Alternative Performance Measures are defined in note 34.
30
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
611.8
(500.7)
111.1
18.2%
(336.0)
154.8
–
(224.9)
(36.8%)
(98.0)
(322.9)
(143.1)
(68.6)
(466.0)
55.5
(410.5)
(70.1)
(11.5%)
(299.4)
(543.0)
(369.9)
980.5
(642.7)
337.8
34.5%
(328.7)
128.8
(19.0)
(9.9)
(1.0%)
(42.1)
(52.0)
(67.6)
(6.6)
(119.6)
2.0
(117.6)
118.9
12.1%
(70.9)
(290.6)
(198.8)
GROUP FINANCIAL REVIEW CONTINUED
The adjusted operating loss of £225m (2019: £10m loss) reflected:
• the flow through of the revenue reduction to gross margin;
• increased St Athan costs as facility ramped-up partially offset by planned cost efficiencies;
• a £13m benefit from furlough credits from the Government’s Coronavirus Job Retention Scheme;
• higher depreciation and amortisation charges (up £27m year-on-year, as guided) principally due to start of DBX production;
• and a £15m FX headwind.
FY adjusted EBITDA was £(70)m. In Q4 profitability was significantly stronger compared with prior quarters, due to the first
full quarter of DBX deliveries and Specials deliveries, adjusted EBITDA was £48m, representing a margin of 14%.
Adjusting operating items of £98m largely related to the impairment of capitalised development costs due to technology and
cycle plan changes (£79m). Other adjusting operating items included restructuring costs (£12m) and £6m associated with
the cessation of operating a team in the FIA World Endurance Championship.
Net adjusted financing costs of £75m were up from £61m in 2019 reflecting the $150m of new notes issued in October
2019, interest on the $68m notes from that issue drawn in June, and the first charges for the £1.1bn equivalent US$ notes
issued in October 2020 as part of the re-financing. The charge includes a £31m revaluation gain due to exchange rate
movements given the US$ denomination of the notes. Adjusted loss before tax was £(299)m (2019: £71m loss). Adjusting
net financing charges of £69m were related to the re-financing completed in December 2020, resulting in a loss before tax
of £466m (2019: £120m).
The tax credit on the adjusted loss before tax is £23m. The effective tax rate at 11.9% is lower than the 19% standard UK tax
rate mainly due to a restriction on the amount of interest that the Group can deduct for tax purposes. Tax on adjusting items
was recognised as appropriate and resulted in a tax credit of £33m, giving an overall tax credit to the Income Statement
of £56m.
The total share count at 31 December 2020 was 115 million following a 20:1 share consolidation in mid-December. The
shares outstanding reflects the issuance of shares associated with equity placings to the Yew Tree Consortium (March) and
the issuance of tranche 1 shares to Mercedes-Benz AG under the terms of the Strategic Cooperation Agreement (December)
in addition to April, June and December raises. The second lien notes issued in December have warrants attached which
represent up to 5% of the diluted issued share capital once fully exercised. The weighted average number of shares in the
period was 77.2 million giving an adjusted EPS of (369.9)p (20191: (198.8)p).
1. 2019 restated see note 2 of the Financial Statements for detail.
CASH FLOW AND NET DEBT
£m
Cash generated from operating activities
Cash used in investing activities
Interest from financing activities
Free Cash outflow
Cash inflow from financing activities (excl. interest)
Increase/(decrease) in net cash
Effect of exchange rates on cash and cash equivalents
Cash balance
31-Dec-20
31-Dec-19
(198.6)
(260.7)
(80.0)
(539.3)
922.5
383.2
(1.7)
489.4
19.4
(310.2)
(47.0)
(337.8)
295.3
(42.5)
5.8
107.9
Net cash outflow from operating activities was £199m (2019: £19m inflow) including a net working capital outflow of
£109m. A substantial payables outflow of £119m, largely in early Q2 following the completion of the initial equity raise,
was the most significant contributor to the working capital outflow. Inventory increased to support the production of DBX at
St Athan but this was broadly offset by reduced finished goods stock, resulting in a net inventory outflow of £5m. December
deliveries were earlier in the month than in the prior year, resulting in a receivables inflow of £67m. With 43 Specials
delivered and given the timing of future Special projects, the deposit balance reduced by £53m to £268m.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
31
GROUP FINANCIAL REVIEW CONTINUED
Capital expenditure was £261m, lower than the c.£270m guided with some re-phasing into 2021. Investment was focused
on DBX, Vantage Roadster and Aston Martin Valkyrie.
Free cashflow1 of £(539)m (2019: £(338)m). Q4 free cashflow of £(26)m shows reduced cash burn as wholesales normalise
with full quarter of DBX, Specials deliveries and receivables inflow.
Cash inflow from financing (excluding interest) of £923m included proceeds from equity raises during the year and bond
refinancing in December.
The net cash inflow of £383m resulted in a closing cash balance of £489m at 31 December 2020 significantly improved
from £108m at 31 December 2019.
1. Operating cashflow less capital investment and net interest
£m
Borrowings
Inventory financing
Bank loans and overdrafts
Lease liabilities (IFRS 16)
Gross debt
Cash balance
Cash not available for short-term use
Net debt
31-Dec-20
31-Dec-19
971.3
38.2
113.5
103.0
839.1
38.9
114.8
111.4
1,226.0
1,104.2
489.4
9.9
726.7
107.9
8.7
987.6
Net debt at 31 December 2020 was down to £727m (31 December 2019: £988m) primarily due to the higher cash balance.
The debt maturity profile was extended with the refinancing of US$ notes of £1.1bn equivalent completed in December
(First lien of £840m at 10.5% interest maturing in 2025; Second lien of £259m at 15.0% split interest (8.9% cash; 6.1% PIK)
with detachable warrants maturing in 2026). Gross debt includes a £79m drawdown of the RCF and inventory financing
remained broadly unchanged year-on-year at £38m supporting working capital requirements.
32
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
RISK AND VIABILITY REPORT
RISK AND VIABILITY REPORT
OUR APPROACH TO RISK
We manage risks in the pursuit of our strategic objectives
using our Enterprise Risk Management Framework and
System (ERMFS) which provides the Executive Committee,
Board and the Audit and Risk Committee with a robust
assessment of our principal risks. The Board is ultimately
responsible for oversight of our risk management and
internal control systems and determines our risk appetite.
The Audit and Risk Committee has been delegated
responsibility for monitoring the effectiveness of the Group’s
risk management and internal control systems which it does
by directing and reviewing the work of executive
management and the key governance functions within the
Group, including the Internal Audit and Risk Management
team and the Risk Management Committee. The Chair of the
Audit and Risk Committee updates the Board on the
Committee’s activities in this regard as appropriate.
Our Internal Audit and Risk Management team maintains
the ERMFS and co-ordinates risk management activities
across the Group. All principal risks have risk mitigation
plans incorporating management’s assessments of gross, net
and target risk and the effectiveness of mitigating controls
and activities. These plans are updated routinely throughout
the year with any changes being incorporated into the
Corporate Risk Register.
The key elements and activities supporting the ERMFS include:
• Annual review and approval of the ERMFS and Risk
Management Policy;
• Twice yearly review of all principal risks to assess the gross,
target and net risks for potential impact and likelihood;
• Maintenance of corporate and functional risk registers;
• Undertaking top-down/bottom-up risk assessments; and
• Creating formal risk mitigation plans.
Internal Audit provide independent and objective assurance
over the effectiveness of these risk mitigation plans to the
Audit and Risk Committee (see Control Environment on
page 60).
The Director of Internal Audit and Risk Management reports
administratively to the Chief Financial Officer with an
independent reporting line to the Chair of the Audit and
Risk Committee.
The most significant changes to the Group’s principal risks
in the year were:
• INSUFFICIENT LIQUIDITY – Risk reducing following the
successful capital raises and refinancing of the Senior
Secured Notes in the period.
• COMPETITIVE POSITIONING – Risk reducing following
the completion of the Strategic Cooperation Agreement
with Mercedes-Benz AG and the successful launch of
the DBX.
• PROGRAMME DELIVERY – Risk reducing as a result of
the successful commissioning of the St Athan facility and
commencement of DBX production.
• ACHIEVING TARGET COST REDUCTIONS – Added as a
new principal risk. The Group’s ability to achieve targeted
cost reductions (e.g. material cost, fixed and variable
marketing, fixed manufacturing) may be inhibited by the
Group’s low volume strategy to maintain exclusivity and
luxury positioning.
• MACRO-ECONOMIC AND POLITICAL INSTABILITY –
Impact has reduced as the 2021 budget and business plan
have been created after consideration of the recent
macro-economic impacts of key factors such as Brexit and
COVID-19.
• SUPPLY CHAIN DISRUPTION – Risk reducing due to the
measures the Group has deployed in response to
managing its risk suppliers, critical suppliers and Brexit.
These include planning for alternative ports of entry for
imports and increasing inventory levels for critical parts.
The emergence of the COVID-19 pandemic in Q1 2020 had
a significant impact on the business with the temporary
closure of our dealerships and factories. In response to this
the Company reassessed each of its principal risks in light of
the pandemic and established a COVID-19 Task Force,
comprising senior management from each function, to
manage the specific risks associated with the pandemic.
Key activities included undertaking COVID-19 specific risk
assessments, promoting and facilitating safe and secure
remote working, creating Return to Work Guidelines and
deploying social distancing measures in accordance with
government guidelines for our operational sites. This Task
Force remains in place and continues to prioritise the
safeguarding and wellbeing of our employees, contractors,
suppliers, customers and their families. Furthermore, each of
the principal risks has been re-assessed to specifically
consider the impact of COVID-19.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
33
RISK AND VIABILITY REPORT CONTINUED
RISK APPETITE
The Board determines the amount of risk the Group is
willing to accept in pursuit of the Group’s strategic
objectives. This varies dependent on the type of risk and
may change over time. In exploring risks and opportunities,
we prioritise the interests and safety of our customers and
employees and seek to protect the long-term value and
reputation of the brand, while maximising commercial
benefits to support responsible and sustained growth.
are those which could have the most significant effect on the
achievement of our strategic objectives, our financial
performance and our long-term sustainability.
The following pages set out the Group’s principal risks,
how these risks are linked to our strategy and the primary
mitigating actions implemented for each risk during the year
ended 31 December 2020. Our principal risks change over
time as some risks assume greater importance and others
may become less significant.
OUR PRINCIPAL RISKS
Our risk management system is designed to identify a broad
range of risks and uncertainties which could adversely impact
the profitability or prospects of the Group. Our principal risks
We categorise principal risks within one of the following
four areas: Strategic, Operational, Compliance and
Financial, and link each risk to one or more of the key
strategies that underpin our business plan.
RISK MANAGEMENT GOVERNANCE WITHIN THE GROUP
BOARD OF DIRECTORS AND AUDIT AND RISK COMMITTEE
• The Board has ultimate
responsibility for establishing a
framework of prudent and
effective controls which enable
risk to be assessed and managed.
• Determination of risk appetite.
• Review effectiveness of risk
mitigation plans and assurance
activity.
• The Board has delegated oversight
of the ERMFS to the Audit and
Risk Committee.
• Monitor status of risk management
activity and reporting.
RISK MANAGEMENT COMMITTEE
• Identifies new and emerging risks.
• Meets quarterly and reports to the
• Performs deep dive reviews of risk
Audit and Risk Committee.
mitigation plans.
• Representation from all functions
across the business.
• Ensures risks are managed in
accordance with the defined
risk appetite.
• Champions effective risk
management and control across
the Group.
INTERNAL AUDIT AND RISK MANAGEMENT TEAM
• Co-ordinates deployment of the
• Prepares Board, Audit and Risk
• Evaluates the design and
ERMFS.
• Maintains Corporate Risk Register.
Committee and Risk Management
Committee status updates.
operating effectiveness of risk
mitigation plans.
• Provides resources and training
to support risk management
activities.
FUNCTIONAL RISK CHAMPIONS AND RISK OWNERS
• Responsible for risk management
at a functional level.
• Maintain functional risk registers
and manage risk mitigation plans.
• Champion adherence to ERMFS
principles and guidance within
their function.
34
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
RISK AND VIABILITY REPORT CONTINUED
PRINCIPAL RISK SUMMARY
Principal risk
Risk movement
Link to strategy
Risk tolerance
Potential causes
Mitigating activities
STRATEGIC RISKS
Macro-economic and
political instability
Exposure to multiple
political and economic
factors could impact
customer demand or affect
the markets in which we
operate.
Competitive positioning
Maintaining our
competitiveness in the high
luxury segment car market
is critical to achieving our
strategic growth objectives.
Brand/Reputational
damage
Our brand and reputation
are critical in securing
demand for our vehicles
and in developing
additional revenue streams.
Technological
advancement
It is essential to maintain
pace with technological
development to meet
evolving customer
expectations and remain
competitive.
Moderate
• Global economic slowdown
Low
Low
Low
due to COVID-19.
• Unfavourable movement in
exchange rates.
• Adverse economic global
conditions could adversely
impact our dealer network or
supply chain.
• Failure to maintain leading
design which customers value.
• Inability to produce cars that
are competitive in terms of
performance, aesthetics
and quality.
• Competitor pricing activity
resulting in the need to
increase retail and customer
financing expenditure to
support retail sales.
• Product recall or late delivery
could impact customer
confidence and loyalty.
• Dealer network may not be
effective in raising,
maintaining and promoting
brand awareness.
• Inadequate dealer training in
new products and
technologies could impair the
customer experience.
• Reliance on third parties to
support development of new
and emerging technologies.
• Competitors may have better
access to funding to develop
new technology faster and be
first to market.
• Changing and more stringent
regulations may make current
technology obsolete and
increase the risk of future
non-compliance.
• Operational and financial
review of the business
undertaken to align to the new
business plan.
• Monitoring global market trends
to target areas for future growth.
• Volume planning actions
to optimise dealer network
stock levels.
• Expanding product portfolio
to produce incremental new
core models.
• Maintain a regular pipeline of
Special Editions and offer fully
bespoke customisation offer
through the ‘Q’ division.
• Strategic Cooperation
Agreement with Mercedes-Benz
AG to provide access to
advanced technologies.
• Standardised embedded quality
procedures (e.g. Customer
Perception Audit, Parts
Approval Process) to maintain
focus on vehicle quality.
• Customer satisfaction audits
and assessments performed
and monitored by the Client
Services Team.
• Expanded dealer network
and improved training to
ensure delivery of a luxury
customer experience.
• Strategic arrangements with
key partners, including the
Strategic Cooperation
Agreement with Mercedes-Benz
AG, to provide powertrain,
electrical architecture and
entertainment systems.
• Commodity strategy
plans developed.
• Development of modular
architecture “Carry Over – Carry
Across” approach for key systems
and components.
Core product offering: three pillar strategy
Control volume growth and personalisation
Develop Specials pipeline
Enhance strategic partnerships
Cost and investment control
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
35
RISK AND VIABILITY REPORT CONTINUED
Principal risk
Risk movement
Link to strategy
Risk tolerance
Potential causes
Mitigating activities
• Failure to build the right
• Remuneration Committee
OPERATIONAL RISKS
Talent acquisition and
retention
We may fail to retain,
engage and develop a
productive workforce and
to develop key talent.
Programme delivery
Failure to implement major
programmes on time,
within budget and to the
right technical specification
could jeopardise delivery
of our strategy and have
significant adverse financial
and reputational
consequences.
Achieving target cost
reductions
The Group’s size and low
volume strategy may inhibit
its ability to deliver targeted
cost reductions, or work
within budget constraints
whilst delivering the
planned vehicle
programme.
Cyber security and
IT resilience
Breach of cyber security
could result in a system
outage, impacting core
operations and/or result in
a major data loss leading to
reputational damage and
financial loss.
Supply chain disruption
Supply chain disruption
could result in
production stoppages,
delays, quality issues
and/or increased costs.
Low
– Moderate
Low
New
Low
capabilities and behaviours in
our leadership team.
• Key contractors leaving the
business and the impact of
IR35 on our contractor
population.
• Failure to engage or equip our
teams to deliver our strategy
or address key capability gaps.
• Insufficient funds to support
programme investment
requirements.
• Inability to manage third-party
delivery in line with programme
timelines and milestones.
• COVID-19 related issues
may impact our ability to
conduct testing or engineering
development within required
timescales.
• High levels of complexity
across car lines can drive
increased engineering
requirements with associated
increased resource and cash
requirements.
• Increasing material costs.
• Inertia to new ways of
working may inhibit our
ability to deliver against
agreed targets and budgets.
Low
• Cyber attack resulting in
Low
denial of service, loss of data
or other business disruption.
• Legacy systems reaching
end of life may no longer
be supported and become
more susceptible to failure
of breach.
• Insufficient investment in
systems and resource may
result in control deficiencies
or vulnerabilities not being
addressed in a timely manner.
• Suppliers may be unable to
meet delivery schedules due
to being in financial distress.
• COVID-19 enforced closures,
or customs clearance
procedures impacted post
Brexit, could result in
disruption to delivery
schedules.
• Deterioration in the Group’s
credit rating may lead to
supply restrictions or more
stringent terms and conditions.
oversight of senior leadership
remuneration to ensure it is
aligned to the strategy and
appropriate for staff retention.
• Regular review of talent and
resource risks leveraging
succession plans and employee
engagement survey results.
• Benchmarking of remuneration
and bonus packages to drive
employee performance
and behaviours.
• Deployment of an established
Programme Delivery
Methodology (Mission 1.3) and
regular Executive Committee
status reporting and oversight.
• Restructure of the business
including engineering and
project management functions.
• Focus on increased levels of
“Carry Over – Carry Across”
to leverage existing core
architecture across multiple
applications to expedite delivery.
• CFT transformation activity to
agree a cost target process with
regular CEO led cost reviews.
• Restructuring of the Engineering
and Procurement functions to
align accountability and
operational procedures.
• Establishment of bi-monthly
cost and cash focused Executive
Committee meetings.
• Project initiated to implement a
new ERP system to transition
away from end of life legacy
systems and drive efficiency
within the IT infrastructure.
• Enhanced IT general controls for
access management, perimeter
security, remote access (e.g.
multi-factor authentication) and
password management.
• 24/7 vulnerability monitoring
using Darktrace and security
incident response procedures.
• Critical supply risk assessments
performed to identify where
additional stock holding or
alternative sources of supply
may be required.
• QCDDM supplier performance
metrics being developed to
manage under-performance
within the supply base.
• Supplier financial strength and
performance assessments
undertaken prior to engagement.
36
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
RISK AND VIABILITY REPORT CONTINUED
Principal risk
Risk movement
Link to strategy
Risk tolerance
Potential causes
Mitigating activities
OPERATIONAL RISKS
Brexit uncertainty
Delays in customs
processing and the
interpretation and
implementation of the trade
deal with the EU could
impact the Group’s
financial position, supply
chain and people.
COMPLIANCE RISKS
Compliance with laws
and regulations
Non-compliance with local
laws or regulations may
damage our corporate
reputation and subject the
Group to significant
financial penalties.
FINANCIAL RISKS
Insufficient liquidity
The Group may not be
able to generate
sufficient cash to fund
its capital expenditure
and debt or sustain
its operations.
Impairment
of capitalised
development costs
The value of capitalised
development costs
continues to grow
as we expand our
product portfolio.
Low
• Additional costs associated
• Establishment of Brexit Steering
with increased customs duty
and tariffs.
• Extended supply lead
times leading to increased
working capital investment
requirements.
• Exchange and interest rate
volatility impacting Group
revenues, profits and
cash flows.
Committee with regular
reporting to the Executive
Committee.
• Consistent regular engagement
by the Group with UK and EU
Government and Trade Bodies.
• Steps taken to prepare the
supply chain and dealer
network for various Brexit
scenarios.
Zero
• Non-compliance with
• Vehicle safety certification
emissions regulations could
inhibit our ability to trade in
certain markets.
• Non-compliance with labour,
achieved for all markets and
“Small Volume” Derogation
status for EU emissions
compliance.
Low
Zero
human rights and
environmental standards
could result in financial
penalty and/or brand /
reputational damage.
• Rapidly evolving climate and
environmental regulations
could result in areas of
non-compliance where not
addressed in a timely manner.
• Significant leverage levels
may inhibit our ability to raise
additional capital.
• COVID-19 impact could result
in reduced demand and a
reduction in available cash to
support the product
development plan.
• Significant debt servicing
requirements reduces cash
available to support other
operational needs.
• Vehicle sales volumes fall
below lifecycle plans and
targets as a result of the
impact of COVID-19 or other
macro-economic factors.
• Vehicle pricing and
contribution reduce to levels
which no longer support the
carrying value of the
attributable capitalised costs.
• Uncertainty of “Carry Over –
Carry Across” utilisation
on future vehicle models
and derivatives.
• Standards of Corporate Conduct
define our activities in relation
to key compliance areas
(e.g. aniti-bribery and
corruption, whistleblowing,
data protection, equality and
diversity, business ethics).
• In-house legal and compliance
team that manages ongoing
investigations.
• Enhanced GDPR and IT General
Controls.
• Raising of additional capital
through equity issue and
refinancing activity.
• Daily management review of
cash balances and establishment
of bi-monthly Executive
Committee focusing on cash
and cost performance.
• Ongoing transformation activity
to deliver targeted cost savings
and efficiencies.
• Capitalisation policy and
procedures reviewed annually.
• Impairment reviews performed
where triggering events have
been identified.
• Regular vehicle line reviews
undertaken to monitor sales
volume and contribution
performance for all car lines
with any concerns
communicated to finance for
consideration of potential
impairment.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
37
RISK AND VIABILITY REPORT CONTINUED
RISK MANAGEMENT ACTIVITIES
IN 2020 AND PLANS FOR 2021
THE BOARD AND THE AUDIT AND RISK COMMITTEE UNDERTOOK A NUMBER
OF RISK MANAGEMENT ACTIVITIES DURING THE PERIOD AS SET OUT BELOW.
IDENTIFICATION OF RISKS
MANAGEMENT ACTIONS AND DEEP DIVES
We identify and manage risk using a top-down bottom-up
approach.
• Top-down – Identification, assessment, prioritisation,
mitigation, monitoring and reporting of risk at a corporate
level. Overseen by the Audit and Risk Committee and the
Management Risk Committee.
• Bottom-up – Identification, assessment, prioritisation,
mitigation and monitoring of risk across all operational
and functional areas.
During the period, the key risks identified in the corporate
and functional risk registers have been maintained and
updated to reflect changes in the business and the external
environment. These continue to be regularly reviewed
within the Risk Management Committee. The updated
corporate risk register is continually reviewed and formally
re-evaluated at the half year and full year to identify
any changes required to the disclosed principal risks.
These changes and the summary of principal risks are
then presented to the Audit and Risk Committee for review
and approval.
RISK MANAGEMENT SYSTEM
The Aston Martin Enterprise Risk Management Framework
and System continues to be deployed across the Group.
This was subject to an annual review and was subsequently
presented to, and approved by, the Executive Committee
and the Audit and Risk Committee. The Risk Management
Committee met three times during 2020.
RISK APPETITE
The Group’s risk appetite and tolerance levels were
considered and approved by the Board and are reviewed
annually. These are used to set tolerance limits and target
risks for each of the principal risks and refine mitigation
plans where appropriate.
The Internal Audit and Risk Management team incorporates
independent validation reviews of the principal risk
mitigation plans within its annual Audit Plan, the purpose
being to provide independent assurance to management, the
Audit and Risk Committee and the Board on the
effectiveness of management actions to mitigate risks.
Our Internal Audit and Risk Management team works with
functional Risk Champions to maintain formal risk mitigation
plans to clearly articulate the nature and extent of the
principal risks and their associated mitigating actions. These
are used to provide the Board and Audit and Risk Committee
with management self-assessments on the effectiveness of
risk mitigation plans and activities.
During 2020 the following key risk management activities
have been undertaken:
• Three Risk Management Committees with deep dive risk
reviews covering:
• Impact of COVID-19 and the business response plans;
• Impact of incoming Cyber-security Management System
legislation for automotive Original Equipment
Manufacturers; and
• Business continuity plans.
• Establishment of the COVID-19 Task Force, with senior
management representation from all functions, to
undertake COVID-19 risk assessments and implement
appropriate mitigating activities to manage the Group’s
response to the pandemic.
• Twice yearly formal validation and approval of corporate
and functional risk registers.
• Annual review of Enterprise Risk Management Framework
and System.
• Executive Committee review and agreement of the
Group’s principal and emerging risks.
The following principal risk reviews have been included
within the 2021 Internal Audit plan:
• Brand/Reputational damage arising from poor quality;
• Inability to incorporate automotive technological
advancement;
• Inability to deliver major programmes; and
• Inadequate protection against cyber attack.
38
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
RISK AND VIABILITY REPORT CONTINUED
VIABILITY STATEMENT
In all scenarios, it is assumed that any borrowings that
mature in the review period will be renewed or replaced
with facilities of similar size. The projections show that,
even in stressed conditions, the Group should be able to
refinance these facilities on commercially acceptable terms,
assuming that debt markets continue to operate as currently.
In addition, we have assumed that no additional legislative
action will be taken that impacts the sale of our products
within the viability statement time frame.
The Directors have assessed the viability of the Group over
the five-year period to 31 December 2025 and, based on
this assessment and the assumptions stated above, the
Directors have a reasonable expectation that the Group will
be able to continue in operation and meet its liabilities as
they fall due over the period to 31 December 2025.
VIABILITY STATEMENT
The Directors have carried out a robust review of the
principal risks of the Group, which are set out on pages 35
to 37, identifying the nature and potential impact of those
risks on the viability of the Group, together with the
likelihood of them materialising.
This analysis has then been used to carry out an assessment
of the ability of the Group to continue in operation and meet
its obligations. The assessment covers the five-year period
from January 2021 to December 2025. This was considered
appropriate by the Directors because it aligns with the new
business plan, the Group’s normal planning horizon and is
indicative of the investment and development cycle of new
products in the luxury car market. Inevitably, the degree of
certainty decreases over this period.
The assessment process consisted of stress testing the base
case in the business plan for scenarios designed to reflect
the potential impact of the principal risks materialising in a
compound scenario, including the following:
• The impact of a four-week loss of production due to a
lockdown or other severe impact of COVID-19
• A severe but plausible reduction in sales volumes as a
result of factors such as a material reduction in the size of
the High Luxury Sports car market due to external factors
(such as a decrease in demand from High Net Worth
Individuals (HNWIs), increased direct and indirect
taxation and changes in consumer habits away from
luxury vehicles)
• Incremental fixed and variable costs
• Incremental working capital requirements such as reduced
deposit inflows or increased deposit outflows
• The impact of strengthening £:$ exchange rates
In the event of one or more risks occurring which has a
particularly severe effect on the Group, the assessment
assumed that all appropriate actions would be taken in a
timely manner by management to mitigate as far as possible
the impact of risks. Potential mitigating actions include
constraining capital spending, seeking additional funding
and/or a number of other adjustments to operations in the
normal course of business.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
39
CORPORATE
GOVERNANCE
Board of Directors and Executive Committee
Executive Chairman’s Introduction to Governance
Governance Report
Nomination Committee Report
Audit and Risk Committee Report
Directors’ Remuneration Report
Directors’ Report
Statement of Directors’ Responsibilities
41
45
46
54
56
63
79
85
40
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
BOARD OF DIRECTORS AND EXECUTIVE COMMITTEE
BOARD OF DIRECTORS
LAWRENCE STROLL
EXECUTIVE CHAIRMAN
TOBIAS MOERS
CHIEF EXECUTIVE OFFICER
Appointed Executive Chairman with effect from
20 April 2020.
Appointed Chief Executive Officer with effect from
1 August 2020.
COMMITTEES
Nomination Committee (Chair)
Remuneration Committee (observer)
OTHER SIGNIFICANT POSITIONS
• Member of Yew Tree Consortium
• Co-owner of BWT Racing Point F1TM team rebranded as
the Aston Martin Cognizant F1TM team in 2021
• Owner of Circuit Mont-Tremblant
PAST ROLES
Mr Stroll has a long career of acquiring and building luxury
brands such as Ralph Lauren, Michael Kors and Asprey
and Garrard.
RELEVANT EXPERIENCE
Mr Stroll led the IPO of Michael Kors which went on to
enjoy further strong growth as a publicly listed company.
Mr. Stroll has also been for many years an active investor in
the automotive and motorsports sectors, including the
acquisition of the former BWT Racing Point F1TM team
(rebranded as the Aston Martin Cognizant F1TM team
in 2021).
COMMITTEES
None
OTHER SIGNIFICANT APPOINTMENTS
None
PAST ROLES
Mr Moers spent 25 years in senior roles at Daimler AG,
including most recently Chairman of the Management Board
and Chief Executive Officer and Acting Chief Technical
Officer of Mercedes-AMG GmbH.
RELEVANT EXPERIENCE
Mr Moers’ focus on operating and portfolio expansion and
cross company efficiency delivered significant margin
expansion to Mercedes-AMG. He led Mercedes-AMG’s
profitable product expansion over seven years, with a clear
pipeline of further expansion opportunities, in particular in
electrification of powertrains in the performance segment.
KENNETH GREGOR
CHIEF FINANCIAL OFFICER
ANTONY SHERIFF
SENIOR INDEPENDENT DIRECTOR
Appointed Chief Financial Officer with effect from
22 June 2020.
COMMITTEES
None
OTHER SIGNIFICANT APPOINTMENTS
None
PAST ROLES
Mr Gregor spent 20 years in senior financial roles at Jaguar
Land Rover most latterly as Chief Financial Officer.
RELEVANT EXPERIENCE
Mr Gregor has a strong leadership track record, with more
than 20 years of automotive experience. As CFO of Jaguar
Land Rover for 11 years from 2008, he oversaw the
evolution of the finance group into a strong business partner
to support the delivery of shareholder value and the
company’s growth ambitions. Prior to Jaguar Land Rover,
he worked in investment banking for HSBC.
Appointed to the Board with effect from 1 February 2021.
COMMITTEES
Audit and Risk Committee
Nomination Committee
Remuneration Committee
OTHER SIGNIFICANT APPOINTMENTS
• Princess Yachts Limited (Executive Chair and CEO)
• Rivian Automotive Inc. (independent director, Chair of
Nomination and Remuneration Committee)
• Pininfarina S.p.A. (independent director)
• Rimac Automobili d.o.o. (Board adviser)
• Aeromobil s.r.o (Board adviser)
PAST ROLES
• McLaren (CEO/MD)
• Fiat Auto A.p.A
• McKinsey & Company
RELEVANT EXPERIENCE
Mr Sheriff is an experienced automotive and luxury sector
executive with a strong leadership track record at both
Princess Yachts Limited and McLaren, where he created
and built the sports car business. His executive experience
and skillset span product development, marketing, and
business strategy.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
41
BOARD OF DIRECTORS AND EXECUTIVE COMMITTEE CONTINUED
LORD MATTHEW CARRINGTON
INDEPENDENT NON-EXECUTIVE DIRECTOR
PETER ESPENHAHN
INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed to the Board with effect from 8 October 2018.
Appointed to the Board with effect from 8 October 2018.
COMMITTEES
Audit and Risk Committee
Nomination Committee
Remuneration Committee (Chair)
COMMITTEES
Audit and Risk Committee (Chair)
Nomination Committee
Remuneration Committee
OTHER SIGNIFICANT APPOINTMENTS
• Arab British Chamber of Commerce (non-executive
OTHER SIGNIFICANT APPOINTMENTS
None
director)
• CarringtonCrisp Ltd (non-executive director)
PAST ROLES
• Saudi International Bank (senior management positions)
• Outdoor Advertising Association (Executive Chairman)
• Retail Motor Industry Federation (Chief Executive)
• Gatehouse Bank plc (Chairman)
RELEVANT EXPERIENCE
Lord Carrington has extensive experience in international
business and UK public service roles, including having been
the Member of Parliament for Fulham. He has a thorough
understanding of the Middle East market and, as former
Chief Executive of the Retail Motor Industry Federation,
of the automotive industry.
PAST ROLES
• Morgan Grenfell /Deutsche Bank (senior leadership roles)
• Deloitte, Plender, Griffiths & Co (audit, tax and
investigation roles)
• Telspec plc (chair, formerly non-executive director)
RELEVANT EXPERIENCE
Mr Espenhahn started his career at Deloitte, Plender,
Griffiths & Co before holding various senior corporate
finance and investment banking roles at Morgan Grenfell/
Deutsche Morgan Grenfell. He has a good understanding of
the UK-listed company environment.
ROBIN FREESTONE
INDEPENDENT NON-EXECUTIVE DIRECTOR
Appointed to the Board with effect from 1 February 2021.
PROFESSOR RICHARD PARRY-
JONES, CBE
INDEPENDENT NON-EXECUTIVE DIRECTOR
COMMITTEES
Audit and Risk Committee
Nomination Committee
Remuneration Committee
OTHER SIGNIFICANT APPOINTMENTS
• Moneysupermarket.com (Chair)
• Smith & Nephew plc (Senior Independent Director)
• Capri Holdings Ltd (Audit Committee Chair)
• ICAEW’s Corporate Governance Committee (Chair)
PAST ROLES
• Cable & Wireless (Senior Independent Director and Audit
Committee Chair)
• Pearson plc (Chief Financial Officer)
• Amersham plc (senior financial positions)
• Henkel Limited (senior financial positions)
• ICI
RELEVANT EXPERIENCE
Mr Freestone is a qualified chartered accountant and has
significant financial, transformation and diversification
experience within leading global businesses which are listed
in the UK.
Appointed to the Board with effect from 1 February 2021.
COMMITTEES
Audit and Risk Committee
Nomination Committee
Remuneration Committee
OTHER SIGNIFICANT APPOINTMENTS
• Marshall Motor Holdings plc (Chair)
PAST ROLES
• GKN plc (Senior Independent Director)
• Network Rail (Chair)
• Yorkshire Water (Chair)
• Ford Motor Company (various executive roles, latterly as
Group Vice-President Global Product Development and
Group Chief Technical Officer)
RELEVANT EXPERIENCE
Professor Parry-Jones has extensive experience of the
automotive industry, having previously worked for the Ford
Motor Company for 38 years. He has significant experience
of the UK-listed company environment, having served on
the board of GKN plc from 2008 to 2018 and on the board
of Marshall Motor Holdings plc since 2019.
42
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
BOARD OF DIRECTORS AND EXECUTIVE COMMITTEE CONTINUED
DR ANNE STEVENS
INDEPENDENT NON-EXECUTIVE DIRECTOR
MICHAEL DE PICCIOTTO
NON-EXECUTIVE DIRECTOR
Appointed to the Board with effect from 1 February 2021.
Appointed to the Board with effect from 24 April 2020.
COMMITTEES
Audit and Risk Committee
Nomination Committee
Remuneration Committee
OTHER SIGNIFICANT APPOINTMENTS
• Anglo American plc (Remuneration Committee chair)
PAST ROLES
• GKN plc (non-executive director and Interim CEO)
• SA IT Services (chairman and CEO)
• Carpenter Technology Corporation (chairman and CEO)
• Lockheed Martin Corporation (non-executive director)
• Ford Motor Company (COO for the Americas)
RELEVANT EXPERIENCE
Dr Stevens has significant operational, commercial and
transformational experience in global businesses. She held a
number of positions during her 16-year tenure at the Ford
Motor Company, culminating in COO for the Americas.
Her early career was at Exxon Corporation, where she
held roles in engineering, product development, and sales
and marketing.
COMMITTEES
Audit and Risk Committee (observer)
OTHER SIGNIFICANT APPOINTMENTS
• Engel & Völkers AG (vice-Chairman of the Supervisory
Board)
• St James Invest SA
• L.T.E.V.
PAST ROLES
• Union Bancaire Privée (leadership and financial
management positions)
• RBC Dominion Securities (leadership and financial
management positions)
RELEVANT EXPERIENCE
Mr de Picciotto has extensive experience in asset
management, private banking and trading. During his
27-year tenure at Union Bancaire Privée, he ran several
divisions, including the High Net Worth, Trading and
Treasury, the London branch and the Asian chapter.
STEPHAN UNGER
NON-EXECUTIVE DIRECTOR
Appointed to the Board with effect from 1 February 2021.
COMMITTEES
Audit and Risk Committee (observer)
Nomination Committee (member)
Remuneration Committee (observer)
OTHER SIGNIFICANT APPOINTMENTS
• Daimler Mobility AG (Member of the Board of
Management and Chief Financial Officer)
PAST ROLES
• Daimler Group (Director of Corporate Controlling)
• Mercedes-AMG GmbH (Commercial Director)
• Mitsubishi Motors Corporation in Japan (when part of
Daimler) (Controlling & Accounting division)
RELEVANT EXPERIENCE
An accountant, Mr Unger has held various positions in
finance and risk management in his career to date. He
joined the Daimler Group in 1993 and has a deep
understanding of the global automotive industry. In his
current role of CFO of Daimler Mobility AG, he also
promotes the company’s transformation into an integrated,
digitised financial services provider through strategic
partnerships and investments in start-ups.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
43
BOARD OF DIRECTORS AND EXECUTIVE COMMITTEE CONTINUED
BOARD CHANGES DURING 2020 TO DATE
Name
Date of appointment
Date of cessation
Lawrence Stroll
Tobias Moers
Kenneth Gregor
Michael de Picciotto
Anne Stevens
Robin Freestone
Richard Parry-Jones
Antony Sheriff
Stephan Unger
Penny Hughes
Dr. Andy Palmer
Mark Wilson
Richard Solomons
Mahmoud Samy Mohamed Aly El Sayed
Dante Razzano
Peter Rogers
Imelda Walsh
Professor Tensie Whelan
William Tame
Amr AbouelSeoud
20 April 2020
1 August 2020
22 June 2020
24 April 2020
1 February 2021
1 February 2021
1 February 2021
1 February 2021
1 February 2021
20 April 2020
25 May 2020
30 April 2020
23 May 2020
12 November 2020
20 April 2020
28 January 2020
23 May 2020
23 May 2020
3 June 2020
27 January 2021
18 February 2021
Lord Matthew Carrington and Peter Espenhahn will not seek re-election at the Company’s Annual General Meeting (“AGM”)
and will step down from the Board at the close of the meeting.
EXECUTIVE COMMITTEE
Tobias Moers
(Chief Executive Officer)
Kenneth Gregor
(Chief Financial Officer)
Marek Reichman
(Chief Creative Officer)
Michael Straughan
(Chief Operating Officer)
Michael Marecki
(General Counsel)
44
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
EXECUTIVE CHAIRMAN’S INTRODUCTION TO GOVERNANCE
EXECUTIVE CHAIRMAN’S
INTRODUCTION TO GOVERNANCE
Significant effort and Board activity during the year were
focused on the new business plan and actions to complete
our capital raise and refinancing plans, along with the
Strategic Cooperation Agreement with Mercedes-Benz AG
which is critical to supporting our long-term product
expansion plans.
It has also been a time of significant change for the Board.
With the planned stepping down of independent Non-
Executive Directors Richard Solomons, Imelda Walsh and
Tensie Whelan in May, the Board had commenced an
independent Non-Executive Director search with the aim of
identifying candidates with the skills and experience of the
automotive or luxury sectors to support the Company in its
future ambitions as well as to meet our aims relating to the
UK Corporate Governance Code (“Code”) compliance and
diversity. As a result, we announced in January 2021 the
appointment of independent Non-Executive Directors Anne
Stevens, Robin Freestone, Richard Parry-Jones and Antony
Sheriff. We also announced the appointment of Non-
Executive Director Stephan Unger, the representative
director for Mercedes-Benz AG. Peter Espenhahn and Lord
Matthew Carrington have decided to step down from the
Board at the close of our Annual General Meeting and
William (Bill) Tame stepped down on 27 January 2021.
I would like to thank Peter, Matthew and Bill for their
significant contributions and support to the Board. I would
also like to thank former Chair Penny Hughes and Richard,
Imelda and Tensie for their efforts as well as representative
Directors Dante Razzano and Mahmoud Samy Mohamed
Aly El Sayed who stepped down during the year and
Amr AbouelSeoud who stepped down on 18 February 2021.
The Board and Committees are now compliant with the
Code and the Board plans to continue to focus on its
composition to continue to improve our diversity, which
is important.
I would like to thank Board members for their significant
efforts and flexibility during what has been an unusual and
very busy year. I would also like to thank our shareholders,
employees, customers and business colleagues for your
continued support.
Yours sincerely,
LAWRENCE STROLL
EXECUTIVE CHAIRMAN
24 FEBRUARY 2021
LAWRENCE STROLL
EXECUTIVE CHAIRMAN
THIS HAS BEEN A TRANSFORMATIONAL YEAR
FOR THE COMPANY WITH BOARD FOCUS
ON LEADERSHIP CHANGE AND ACTIONS TO
STRENGTHEN THE FINANCIAL RESILIENCE OF
THE BUSINESS AGAINST A DIFFICULT
EXTERNAL ENVIRONMENT.
I took up the role of Executive Chairman on 20 April
following the significant investment in the Company by my
Yew Tree Consortium and a rights issue. My first priority
along with that of the Board, was to strengthen executive
management and to commence actions to strengthen the
financial resilience of the Company. Also, to support
management actions to launch the DBX, aggressively
de-stock the dealer network to rebalance supply to demand
and to take action on costs, all against the significant
challenges presented by COVID-19.
We have appointed a world-class leadership team with
Tobias Moers, formerly the CEO and acting Chief Technical
Officer at Mercedes-Benz AMG, who joined as Chief
Executive Officer in August and Kenneth Gregor, former
CFO of Jaguar Land Rover, who joined as Chief Financial
Officer in June. Together, with Marek Reichman our
long-standing, award winning Chief Creative Officer, they
have already made great strides in transforming the
Company and assembling a strong leadership team.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
45
GOVERNANCE REPORT
GOVERNANCE REPORT
OVERVIEW
This Report sets out the Board’s corporate governance
structures and work from 1 January 2020 to 31 December
2020. Together with the Directors’ Remuneration Report on
pages 63 to 78, it includes details of how the Company has
applied and complied with the principles and provisions of
the 2018 UK Corporate Governance Code (the “Code”). The
Code is published by the Financial Reporting Council and
further information can be found on its website,
www.frc.org.uk. The Code is supported by the FRC’s
Guidance on Board Effectiveness, which the Board uses to
support its approach to governance and decision making.
COMPLIANCE WITH THE UK CORPORATE
GOVERNANCE CODE
The Code requires companies to describe in the Annual
Report how they have applied the main principles of the
Code and also any areas where companies do not comply
with the Code provisions. The Directors consider that the
Company has been compliant with the Code provisions as
applied during the year ended 31 December 2020, other
than the exceptions as set out below. It is noted that the
composition of the Board is impacted by the rights of the
significant shareholders under their respective Relationship
Agreements (see the Directors’ Report, page 82).
Code provision 9 recommends that the chair should be
independent on appointment.
Lawrence Stroll assumed the position of Executive Chairman
on completion of the capital raise on 20 April 2020 and was
not independent on appointment as he is a member of the
Yew Tree Consortium. A separate Chief Executive Officer
has been in place during most of the year, with the
exception being the period following the departure of Dr
Andy Palmer on 25 May 2020 and the appointment of
Tobias Moers with effect from 1 August 2020. During this
period, the Executive Chairman worked with the Executive
Committee to ensure ongoing support to executive
management.
Code provision 11 recommends that at least half the board
of directors of a UK-listed company (excluding the chair)
should comprise ‘independent’ non-executive directors,
being individuals determined by the board to be
independent in character and judgement and free from
relationships or circumstances which may affect, or could
appear to affect, the director’s judgement.
Whilst the number of independent Non-Executive Directors
comprised at least half the Board from early 2020 to late
May 2020, with the retirement of a number of independent
Non-Executive Directors in May the Company was not in
compliance with this provision for the remainder of the year.
Upon the Executive Chairman taking up his appointment,
the Board commenced a detailed search process to
strengthen Board membership and improve the diversity
on the Board while moving towards Code compliance.
This process culminated in the appointment of Anne Stevens,
Robin Freestone, Richard Parry-Jones and Antony Sheriff
as independent Non-Executive Directors with effect from
1 February 2021, with the result that the Company complies
with this provision. Further information regarding the search
and selection process is set out on page 54.
Code provision 12 recommends that the board should
appoint one of the independent non-executive directors to
be the senior independent director to provide a sounding
board for the chair and serve as an intermediary for the
other directors and shareholders.
With the retirement of Richard Solomons in late May the
Company was not in compliance with this provision until
the appointment of Antony Sheriff as independent Non-
Executive Director and Senior Independent Director with
effect from 1 February 2021.
OUR BOARD
The composition of the Board has undergone significant
evolution during 2020 and up to the date of this Report.
Details of the changes to the Board during 2020 are set out
on page 44. At the date of this Report our Board comprises
11 members: the Executive Chairman, the Chief Executive
Officer, the Chief Financial Officer and eight Non-Executive
Directors, of whom six are considered independent for the
purposes of the Code. The names of the Directors and their
biographies are set out on page 41 to 43.
The Directors are appointed by the Board and are subject to
annual re-election by shareholders. The Company’s significant
shareholder groups, in line with the respective Relationship
Agreements, have nominated Directors who have been
appointed to the Board; further details of these arrangements
are set out on page 82 of the Directors’ Report.
The Board is satisfied that there is a sufficient balance
between Executive and Non-Executive Directors on the
Board to ensure that no one individual has unfettered
decision-making powers and that Directors are able to
discharge their duties and responsibilities.
It is the responsibility of the Board to establish the
Company’s purpose and to satisfy itself that the Company’s
purpose, values and strategy are aligned with its culture.
The Board’s role is also to support management in the
Company’s strategic aims in the best interests of our
shareholders and wider stakeholders. It leads and provides
direction in the setting of strategy and overseeing its
implementation by management. The specific activities
undertaken by the Board during the year are set out on page
48. The Board also monitors the Group’s operations within an
agreed framework of controls, allowing risk to be assessed and
managed within agreed parameters. This is discussed further
in the Risk and Viability Report on page 33.
The Board has established terms of reference that set out the
matters that it must approve and the specific responsibilities
that it has delegated to its principal committees: the Audit and
46
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
GOVERNANCE REPORT
Risk Committee, Remuneration Committee and Nomination
Committee. Each of the Committees’ roles and responsibilities
are set out in formal terms of reference, which are determined
by the Board. These are available for review on the Company’s
website at www.astonmartinlagonda.com. Reports from each
of these Committees are provided on the following pages.
CHIEF FINANCIAL OFFICER
The Chief Financial Officer, Kenneth Gregor, is a member of
the executive management team reporting to the Chief
Executive Officer. His role is to lead the financial
management, risk and internal control teams and to oversee
the Company’s relationship with the investment community.
All Board and Committee meetings are minuted and formally
approved at the next meeting. Board minutes contain details
of the Directors’ decision-making processes and any follow up
actions or concerns raised by the Directors.
The Board’s terms of reference state that it must consider and
approve the following:
• The Group’s strategic aims, objectives and commercial
strategy;
• Review of performance relative to the Group’s business
plans and budgets;
• Major changes to the Group’s corporate structure,
including acquisitions and disposals;
• Financial Statements and the Group dividend policy
including any recommendation of a final dividend;
• Major changes to the capital structure including tax and
treasury management;
• Major changes to accounting policies or practices;
• The system of internal control and risk management policy;
• The Group’s risk appetite; and
• The Group’s corporate governance and compliance
arrangements.
EXECUTIVE CHAIRMAN
There is a clear separation of responsibilities between the
Executive Chairman and the Chief Executive Officer. The
Executive Chairman, Lawrence Stroll, is responsible for leading
and managing the business of the Board primarily focused
on strategy, performance, value creation and accountability,
setting and sustaining the culture and purpose of the Company
and ensuring the Board’s overall effectiveness, governance
and Director succession planning. He also ensures the effective
communication between the Board, management, shareholders
and the Company’s wider stakeholders. The Executive Chairman
works collaboratively with the Chief Executive Officer, Tobias
Moers, in constructively challenging and helping to develop
proposals on strategy, setting the Board agenda and ensuring
that any actions agreed by the Board are effectively implemented.
CHIEF EXECUTIVE OFFICER
The Chief Executive Officer, Tobias Moers, is responsible for
developing, implementing and delivering the agreed strategy
and for the operational and strategic management of the
Company. He is also responsible for supporting Directors’
induction into the business by providing the necessary
resources for developing and updating their knowledge and
capabilities concerning the Company, including access to
Company operations and members of the workforce.
SENIOR INDEPENDENT DIRECTOR (“SID”)
The Senior Independent Director, Antony Sheriff, supports the
Executive Chairman in his role and leads the Non-Executive
Directors in the oversight of the Executive Chairman. The SID is
also available as an additional point of contact for shareholders.
NON-EXECUTIVE DIRECTORS
The Non-Executive Directors provide constructive
challenge, strategic guidance, offer specialist advice and
hold management to account. They monitor the
performance and delivery of the strategy within the risk
parameters and control framework set by the Board.
THE COMPANY SECRETARY
The Company Secretary, Catherine Sukmonowski, acts as
secretary to the Board and each of the Committees. She is
responsible for supporting the Executive Chairman and the Board
in delivering the Company’s corporate governance agenda.
RELATIONSHIP AGREEMENTS
At the start of the financial year, the Company had two groups
of significant shareholders, the Adeem/PW Shareholder Group
and the Prestige/SEIG Shareholder Group. Following the
corporate transactions during 2020, at the end of the year, the
Company had three groups of significant shareholders namely,
the Adeem/PW Shareholder Group, the Yew Tree Consortium
and Mercedes-Benz AG (“MBAG”). The Adeem/PW
Relationship Agreement terminated on 18 February 2021, as
the Adeem/PW Shareholder Group ceased to hold 7% of the
voting rights attaching to the ordinary shares.
The relationship between the Company and each of these
significant shareholder groups is governed by separate
Relationship Agreements. The purpose of these Relationship
Agreements is to ensure that the Company can carry on its
business independently and for the benefit of shareholders as
a whole. Each of the Relationship Agreements provides that
each significant shareholder group is entitled to nominate
director(s) to the Board and the Nomination Committee and
an observer to each of the Remuneration and Audit and Risk
Committees subject to the size of its interest in the voting
rights of the Company. The Relationship Agreements also
provide that the Company will not take any action in relation
to certain significant matters without the prior approval of at
least two-thirds of members of the Board present and entitled
to vote.
Further information on the Relationship Agreements is set
out in the Directors’ Report on page 82.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
47
GOVERNANCE REPORT CONTINUED
BOARD FOCUS
The Board has been extremely busy during 2020 having met for 8 scheduled Board meetings and an additional 28
unscheduled meetings in relation to the Yew Tree Consortium investment and rights issue; retail offer and non-pre-emptive
placing; and capital raise, debt refinancing and Strategic Cooperation Agreement. Board and Committee attendance for
regularly scheduled meetings during 2020 is set out below. During this period, the Board has been very mindful of our
stakeholders and the possible impacts of events on them. More information on our key stakeholders is on page 22 and some
examples of how the Board considered stakeholder interests is set out on page 49.
Board focus was on the following key areas/activities:
• Consideration and approval of Financial Statements and
• Response to the COVID-19 pandemic, focusing in particular
on the impact on the Group’s workforce, the business plan,
operational performance and financial position.
• Consideration and approval of the corporate actions
undertaken during the year including the capital raise and
rights issue (completed April 2020); the retail offer and
non-pre-emptive placing (completed June 2020); and the
Strategic Cooperation Agreement with Mercedes-Benz
AG, refinancing and share consolidation (completed
December 2020) (the “Transactions”).
• CEO and CFO succession (including arrangements for the
former Executive Directors) and wider Board composition
and independent Non-Executive Director search.
• Approval of the new business plan and the 2021 budget.
• Preparedness for the end of the Brexit transition period,
particularly in light of the COVID-19 pandemic.
Director
Directors as at 31 December 2020
Laurence Stroll (Executive Chairman)1
Tobias Moers (CEO)2
Kenneth Gregor (CFO)3
Amr AbouelSeoud4
Lord Matthew Carrington (Chair, Remuneration Committee)5
Peter Ian Espenhahn (Chair, Audit and Risk Committee)6
Michael de Picciotto7
William Tame8
Former Directors
Penny Hughes9
Dr. Andy Palmer10
Mark Wilson11
Richard Solomons12
Mahmoud Samy Mohamed Aly El Sayed13
Dante Razzano9
Peter Rogers14
Imelda Walsh12
Professor Tensie Whelan12
announcements including the Annual Report and
preliminary results announcement.
• Investor relations engagement including regular updates
by the Director of Investor Relations on investor feedback,
market reaction to announcements and reports from
brokers and analysts.
• Regular updates on the performance of the business and
transformation plans including to reduce costs and improve
efficiency and impacts on the workforce and culture of the
Company and plans for workforce engagement.
• Consideration of arrangements for the AGM and two
General Meetings convened in connection with the Yew
Tree Consortium investment and rights issue and the
Transactions.
• Other standing agenda items to ensure that all aspects of
the business and governance and regulatory requirements
are given due consideration as appropriate.
Board Audit and Risk
Nomination
Remuneration
6/6
2/2
3/3
8/8
8/8
8/8
5/5
3/3
2/2
3/3
2/3
3/3
5/6
2/2
n/a
2/3
3/3
n/a
n/a
n/a
n/a
4/4
6/6
n/a
3/3
n/a
n/a
n/a
2/2
n/a
n/a
n/a
2/2
n/a
0/0
n/a
n/a
n/a
0/0
0/0
n/a
0/0
2/2
n/a
n/a
2/2
2/2
1/2
n/a
2/2
n/a
n/a
n/a
n/a
n/a
5/5
3/3
n/a
3/3
n/a
n/a
n/a
2/2
n/a
n/a
n/a
2/2
n/a
1. Joined the Board on 20 April 2020.
2. Joined the Board on 1 August 2020.
3. Joined the Board on 22 June 2020.
4. Joined the Nomination Committee on 1 February 2021. Ceased to be a
Director on 18 February 2021.
5. Appointed Chair of the Remuneration Committee and joined the Audit
and Risk Committee on 23 May 2020.
6. Appointed Chair of the Audit and Risk Committee and joined the
Remuneration Committee on 23 May 2020.
7. Joined the Board on 24 April 2020.
8. Joined the Board and Nomination Committee on 3 June 2020. Joined the
Audit and Risk and Remuneration Committees on 16 September 2020.
Ceased to be a Director on 27 January 2021.
9. Ceased to be Directors on 20 April 2020.
10. Ceased to be a Director on 25 May 2020.
11. Ceased to be a Director on 30 April 2020.
12. Ceased to be Directors on 23 May 2020.
13. Ceased to be a Director on 12 November 2020.
14. Passed away on 28 January 2020.
48
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
GOVERNANCE REPORT CONTINUED
TIMELINE OF KEY EVENTS AND EXAMPLES OF BOARD CONSIDERATION OF STAKEHOLDERS
Timeline
January
2020
February
March
Key events
• Announcement of strategic investment by Yew Tree
Consortium, led by Lawrence Stroll, and rights issue
• Announcement of 2019 full-year results and a reset
business plan
• Mark Wilson, CFO, to step down no later than 30 April
• COVID-19 lockdown measures implemented in the UK;
production at manufacturing facilities suspended and
employees furloughed. Non-furloughed employees switch
to home working wherever possible.
• General Meeting of shareholders on 30 March to consider
Yew Tree Consortium placing and rights issue
April
• Lawrence Stroll appointed Executive Chairman on
20 April
• Placing and rights issue successfully conclude
• Volunteer staff provide emergency vehicle repairs for
local NHS staff and manufacture protective visors and
gowns
Examples of stakeholder considerations*
• Board considered early impacts of COVID-19 on suppliers/dealers/customers
particularly in Asia, and advice on how the Company should prepare for
wider COVID-19 impacts.
• In considering the relative merits of strategic investment and capital raise
options the Board considered the impact on the financial position and
prospects of the Company and what was in the best interests of the Company
including its shareholders and creditors, including the pension scheme.
• Board consideration of 2019 Annual Report including agreement of protocols
for how engagement with key stakeholders should be reported to the Board.
• Reports to the Board on engagement with investors on strategic investment/
capital raise and year-end results.
• Board consideration of results of General Meeting of shareholders.
• Workforce Independent Non-Executive Director meets with Employee
Engagement Group and provides feedback to the Board.
• Reports to the Board on organisational restructure programme and employee
consultation processes (including trade union stakeholders) on proposals to
reduce employee numbers.
• Board considered detailed management plans to deal with COVID-19
impacts on the business including suppliers, dealers, customers and
workforce. Also feedback on engagement with Government on advice and
possible support and plans to furlough employees.
• Board considered and agreed temporary salary cuts for Directors and senior
management as being in the best interests of the Company.
• Partner with local organisations to provide PPE for local
• Engagement by new Executive Chairman Lawrence Stroll with the workforce,
investors and dealers on his vision for the Company.
• Board consideration of protocols developed with employees and trade unions
to protect employee health and safety to enable return to work in our
production facilities.
• Board consideration of how the Company could support the community to
deal with COVID-19 impacts including delivery of PPE equipment to NHS
staff and free vehicle repairs.
• Board consideration of AGM shareholder engagement given Government
COVID-19 restrictions.
• Executive Chairman engagement with workforce on new CEO appointment.
• Regular Board updates on COVID-19 business impacts including health and
safety of the workforce.
• Board approves placing as being in best interests of Company/shareholders to
provide additional financial flexibility to successfully emerge from the
extended COVID-19 lockdown and dealers’ inventory de-stocking. Board
agrees a retail offer to enable retail investors to participate.
• Board consideration of investor feedback on H1 2020 results.
• Ongoing Board consideration of COVID-19 impacts on the business and key
stakeholders.
• Engagement by new Chief Executive Officer, Tobias Moers, with the
workforce, investors and dealers.
• Key stakeholder impacts considered as part of new business plan discussions.
• Board approves capital raise, refinancing of debt and Strategic Cooperation
Agreement with Mercedes-Benz AG as being in the best interests of
Company/shareholders as strengthens financial resilience and critical to
supporting medium-term growth plans under the new business plan.
• Board considers shareholder engagement feedback ahead of General
Meeting.
• Reports to the Board on engagement with investors on capital raise,
refinancing of debt, Strategic Cooperation Agreement and Q3 results.
hospitals
May
• St Athan manufacturing facility reopens with new safety
measures
• Appointment of Tobias Moers as CEO announced on
June
July
August
October
26 May
• Dr Andy Palmer steps down as CEO
• Board and Committee changes announced
• Annual General Meeting of shareholders on 3 June
• Kenneth Gregor joins as CFO on 22 June
• Retail offer and non-pre-emptive placing
• Lockdown measures eased and gradual return of staff
from furlough
• Cost efficiency action plan continues with consultation
exercise to reduce employee numbers
• H1 2020 financial results announced
• Initial deliveries of DBX
• “Job 1” DB5 completed
• Tobias Moers joins as CEO on 1 August
• Gaydon manufacturing facility reopens with new safety
measures
• Production of new Vantage Roadster commences
• Announcement of capital raise and refinancing of debt
including an equity placing, issue of first and second lien
notes and an updated revolving credit facility
• Announcement of Strategic Cooperation Agreement with
Mercedes-Benz AG
• Announcement of Q3 2020 results
November • Second national UK lockdown (with tighter restrictions
from December)
December • General Meeting of shareholders on 4 December to
consider transactions announced in October
• Placing, Strategic Cooperation Agreement and financing
January
2021
transactions successfully conclude
• Capital Reorganisation effected
• Announcement of five Non-Executive Director
appointments and Committee changes
• New Aston Martin Cognizant F1TM branded team
announced
*
This is to provide a sample of how the Board considered stakeholder interests during the year and is not meant to be exhaustive of all stakeholder interests
considered during the year.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
49
GOVERNANCE REPORT CONTINUED
INFORMATION FLOW, INDUCTION AND
PROFESSIONAL DEVELOPMENT
The Executive Chairman works closely with the Company
Secretary to plan and schedule Board and Committee
meetings. A key area of focus continues to be enhancing the
Board and Committee agendas and work plans to ensure
that financial, regulatory and governance requirements are
met throughout the year as well as providing sufficient time
to focus on strategy and key areas of the business.
In addition, the Executive Chairman and the Company
Secretary work to ensure that information is made available
to Board members on a timely basis and is of a quality
appropriate to enable the Board to effectively carry out its
duties. The Executive Chairman and the Committee Chairs
continued to work with management to improve the
approach to agendas and papers, and to discuss the
information which would be most useful for the Board to
receive including between formal meetings.
An agenda and accompanying pack of detailed papers are
circulated to the Board in advance of each Board meeting.
Currently these include reports from the Executive Directors,
other members of senior management and external advisers.
Members of senior management may be invited to present
relevant matters to the Board. All Directors are able to
request additional information on any of the items to be
discussed. The Board and the members and observers of the
Audit and Risk Committee also receive further regular and
specific reports from the internal auditors to allow the
monitoring of the adequacy of the Group’s systems of
internal controls and reports from the external auditors.
Tailored induction programmes were put in place for the
Executive Chairman, the new Executive Directors and
Non-Executive Directors who joined the Board during the
year and continue for those who joined during 2021. These
include, where possible and in line with COVID-19
protocols, visits to each of the main operational locations,
meetings with senior management and information about
the key areas of the business.
The Board and Committee standing agenda items include
the briefing of Directors on a wide range of topics which
include corporate governance and regulatory requirements.
Additionally, Directors have access to the advice and
services of the Company Secretary and independent and
professional advice at the Company’s expense should they
determine that this is necessary to discharge their duties. As
was appropriate, the Directors were advised on their duties
in respect of the capital raise and financing transactions
which took place during the year.
APPOINTMENT AND ELECTION OF DIRECTORS
All of the Directors have service agreements or letters of
appointment and the details of their terms are as set out in
the Directors’ Remuneration Report. The Executive
Chairman and Non-Executive Directors are expected to
devote necessary time to perform their duties properly. This
is expected to be approximately 30 days each year for the
Non-Executive Directors. The Executive Chairman and
Senior Independent Director may be required to spend
additional time over and above this to carry out their extra
responsibilities. As discussed in relation to Board
attendance, Directors devoted significantly more time to
Board matters during the year.
The Board considers all Directors to be effective and
committed to their roles and to have sufficient time to
perform their duties. All Directors will be offering
themselves for election or re-election as appropriate at
Company’s Annual General Meeting (“AGM”) with the
exception of Lord Matthew Carrington and Peter Espenhahn
who will be retiring from the Board at the conclusion of
the AGM.
The service agreements and letters of appointment are
available for inspection at the Company’s registered office
during normal business hours. No other contract with the
Company or any subsidiary undertaking of the Company
in which any Director was materially interested existed
during or at the end of the financial year other than the
Relationship Agreements with significant shareholders the
Yew Tree Consortium and the Adeem/PW shareholder
group as set out on page 47, the F1TM Sponsorship
Agreement as set out in the Prospectus dated 27 February
2020 and the Supplementary Prospectus dated 13 March
2020, and the agreement with two former directors to
purchase a car at a discount as set out in note 31. The
Adeem/PW shareholder group ceased to be a related party
for the purposes of the Listing Rules during the year ended
31 December 2020, and their Relationship Agreement with
the Company terminated on 18 February 2021.
50
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
GOVERNANCE REPORT CONTINUED
BOARD AND COMMITTEE EVALUATION
AND EFFECTIVENESS
Given the significant matters before the Board, the impacts
of COVID-19 and the significant changes to the Executive
and the Board during the year, it was agreed that it was
more appropriate to adopt an ongoing dialogue on Board
effectiveness. Consequently, there was regular dialogue
concerning the difficulties experienced by the business and
the appropriate Board response, including separate feedback
from independent Non-Executive Directors. In addition, the
Committee members were separately asked for their
feedback on anything that may be top of mind in respect of
the operation of the respective Committee including what
went well and areas for improvement.
Given the context for the year, common themes emerged
from this collective feedback. Overall, it was agreed that
against the backdrop of COVID-19 and the refinancing and
other actions taken to stabilise the Company, it was a
challenging year in all respects including for the operation
of the business and the Board/Committees. While video
conferencing had been a hugely useful tool to enable
meetings to take place during this time it was not as effective
as face-to-face meetings as it did not foster personal
relationships between participants, particularly with the
addition of a new management team and new Board
members. The Executive Chairman and the Board had
achieved a significant amount during the year to effect
leadership change, the successful completion of the actions
taken to stabilise the capital structure and Strategic
Cooperation Agreement with Mercedes-Benz AG. Despite
the significant workload and the external challenges, the
Board/Committees had performed well and flexibly with
effective support from management. Specific areas of
practical improvement were considered with the hope that
the work of the Board/Committees could return to a more
“business as usual” focus.
EXTERNAL DIRECTORSHIPS
It is recognised that non-executive directorships can provide
a further level of experience for executives that can benefit
the Company. As such, Executive Directors may usually take
up one non-executive directorship (broadly equivalent in
terms of time commitment to a FTSE 350 non-executive
directorship role) subject to the Board’s approval as long as
there is no conflict of interest. Neither of the Executive
Directors currently has any other directorship outside
the Group.
BOARD SUCCESSION AND DIVERSITY
Board succession planning is focused on ensuring the right
mix of skills and experience on the Board. All new
appointments are based on merit, keeping in mind that to
deliver our strategy we need a Board which is diverse and
inclusive. Consequently, we believe in the importance of
diverse Board membership, including in relation to gender,
social and ethnic backgrounds, cognitive and personal
strengths, tenure and relevant experience.
At the date of this Report, the Company has two significant
shareholder groups with rights to nominate representative
directors to the Board under their respective Relationship
Agreements with the Company, as set out on page 82. In
formulating the Board Diversity Policy which was adopted
in 2019, the Board recognised the Davies Report and the
Hampton-Alexander Review target for women to represent
33% of boards by 2020 whilst also being cognisant of the
Company’s Relationship Agreements. Accordingly, under
the Policy the Board agreed its aim to maintain a balance so
that, as a minimum, one-third of Board members not subject
to significant shareholder appointments are women,
provided this is consistent with the prevailing skills and
diversity requirements of the Company as and when seeking
to appoint a new Director. Consequently, under the Board
Diversity Policy, as at the date of this Report, there is one
woman out of eight relevant Board members (being the two
Executive Directors and six independent Non-Executive
Directors), thereby comprising 12.5% of the Board. The
ongoing evolution of the Board has impacted Board diversity
in 2020, however the Board remains committed to
continuing to strengthen Board membership and to enhance
diversity which is very important.
DIRECTORS’ CONFLICTS OF INTEREST
Directors have a statutory duty to avoid situations in which
they may have interests that conflict with those of the
Company unless that conflict is first authorised by the Board.
As permitted under the Companies Act 2006, the Company’s
Articles of Association allow Directors to authorise conflicts
of interest and, in accordance with its terms of reference, the
Board has established a policy and set of procedures for
managing and, where appropriate, authorising actual or
potential conflicts of interest. This is monitored by the
Nomination Committee.
Prior to approval of this Report, the Committee has reviewed
all situational conflicts that it has authorised and concluded
that the potential conflicts had been appropriately
authorised, no circumstances existed which would
necessitate that any prior authorisation be revoked or
amended, and the authorisation process continued to
operate effectively.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
51
GOVERNANCE REPORT CONTINUED
RELATIONSHIP WITH SHAREHOLDERS, EMPLOYEES
AND OTHER STAKEHOLDERS
OUR APPROACH
The Board recognises that our business and our behaviours
impact our shareholders and other stakeholders and that
stakeholder engagement is a key element of delivering a
sustainable business. This activity is taken across our
business at different levels of the organisation with steps
taken to ensure that the Board is aware of this activity and
can also engage with stakeholders as appropriate. The Board
receives regular updates from the Chief Executive Officer
and the Chief Financial Officer on these matters, as well as
from senior executives within the business with particular
expertise or responsibility for dealing with the stakeholders
involved. With the impact of COVID-19, a particular area of
focus for the Board during the year was on understanding
the impact on those external stakeholders critical to our
business – our dealers, customers, suppliers and other
partners. Examples of how the Board considered stakeholder
interests during the year are set out on page 49. Information
on our key stakeholders and the Board’s s172 statement is
set out on page 22.
INVESTORS
The Board is committed to maintaining good
communications with existing and potential shareholders.
The Executive Chairman, Chief Executive Officer and Chief
Financial Officer met, in line with COVID-19 protocols,
with a large number of shareholders in the period since their
appointments after each announcement relating to the
Company’s financial performance. The Executive Chairman
has engaged with institutional shareholders to discuss the
Company’s performance and Board governance matters and
communicated their views to the Board.
In relation to investor relations activity, a combination of the
Executive Chairman, Chief Executive Officer, Chief Financial
Officer and Investor Relations team held over 550 meetings
with 278 individual investors and analysts during the year.
About 60% of the meetings included the executive
management team. The Director of Investor Relations was a
regular Board attendee to provide feedback from these
meetings and updates on other market matters.
The management team also hosted webcasts for all reported
results and market updates to take questions from investors
and analysts to ensure an open dialogue with the market.
Presentations given to analysts and investors covering the
Group’s annual and interim results, along with all results
and other regulatory announcements as well as further
information for investors, are included on the investor
relations section of our website at
www.astonmartinlagonda.com. Further information on our
engagement with shareholders is set out below under
Annual and General Meetings of shareholders.
WORKFORCE
As part of the Board’s work to better understand the views of
its people, Imelda Walsh, the Remuneration Committee
Chair and Workforce Independent Non-Executive Director
(until she ceased to be a Director on 23 May 2020), was
responsible to the Board for directly engaging with the
Company’s workforce. During the period Imelda attended
the Company’s Employee Engagement Group (“EEG”) and
listened to views raised by the workforce and the Company’s
responses and reported on this to the Board. The Chief
Financial Officer and Imelda (during her tenure) engaged
with the Chair of the Trustee of the Aston Martin Pension
Scheme, a key creditor of the Company, and the Pension
Regulator. Measures taken in response to COVID-19 made
face-to-face engagement difficult but other methods of
engagement were adopted to ensure that the workforce
continued to receive regular communications about the
business and concerning workforce health and safety in
response to the pandemic. On Imelda stepping down
workforce engagement continued, led by the Chief
Executive Officer and Directors of HR and Reward who
provided regular updates to the Board and Committees.
More information on our workforce engagement is set out in
our People section on page 19.
Anne Stevens, who will be our Remuneration Committee
Chair following the announcement of our year-end results,
joined the Board on 1 February 2021 and became the
Workforce Independent Non-Executive Director. The Board
remains committed to a constructive two-way dialogue with
our workforce, to enable us to better reflect their interests in
future Company and strategic decisions, and to help ensure
that the Company is a great place to work.
WHISTLEBLOWING
There is an appropriate mechanism for employees and
contractors to report any concerns regarding suspected
wrongdoing or misconduct. The “Confidential Reporting and
Whistleblowing” policy is made available to all employees
and contractors on joining the business and is published on
the Group intranet together with annual mandatory training.
Whistleblowing reports are investigated by the Internal Audit
and Risk Management team with significant findings
reported to the Audit and Risk Committee and Board.
Further information on this is in the Audit and Risk
Committee Report on page 61.
ANNUAL AND GENERAL MEETINGS OF SHAREHOLDERS
All shareholders may ask questions by contacting us and
we usually encourage them to attend our AGM where they
will have the opportunity to interact with Board members
and ask questions. Following UK Government guidelines in
response to the ongoing COVID-19 pandemic, it was not
possible for our shareholders to attend our 2020 AGM and
the General Meetings we held in March and December.
We provided shareholders with the opportunity to ask
questions ahead of the meeting with the answers published
52
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
GOVERNANCE REPORT CONTINUED
on our website, and were able to make the proceedings of
our General Meeting in December available by video to
shareholders who had registered in advance. If the
pandemic continues to impact shareholder attendance at
our upcoming AGM, we will continue to keep under review
ways to ensure engagement with our shareholders. A further
update will be provided in the Notice of AGM.
The Notice convening the 2021 AGM will be made
available to shareholders in advance of the meeting. This
will provide shareholders with the appropriate time, as set
out in the FRC’s Guidance on Board Effectiveness, to
consider matters.
Separate resolutions will be proposed on each substantially
separate matter. The results of the proxy votes on each
resolution will be collated independently by the Company’s
registrar and will be published on the Company’s website
after the meeting.
FAIR, BALANCED AND UNDERSTANDABLE
The Annual Report and Accounts is required, as a whole, to
be “fair, balanced and understandable” and to provide the
information necessary for shareholders to assess the Group’s
position and performance, business model and strategy. The
Audit and Risk Committee considered, on behalf of the
Board, whether the “fair, balanced and understandable”
statement could properly be given on behalf of the
Directors. The Committee considered the associated
assurance processes (as set out on page 62) and provided a
recommendation to the Board that the fair, balanced and
understandable statement could be given on behalf of the
Directors. Based on this recommendation, our Board is
satisfied that it has met this obligation.
A summary of the Directors’ responsibilities in relation to
the Financial Statements is set out on page 85. The report of
the external auditors on page 87 includes a statement
concerning their reporting responsibilities.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
53
NOMINATION COMMITTEE REPORT
NOMINATION
COMMITTEE REPORT
website www.astonmartinlagonda.com. The Committee had
two formal meetings during 2020 and met in early January
2021 and engaged frequently in addition to these meetings
on Board appointment matters. Committee attendance is set
out on page 48.
This report sets out the work of the Committee in 2020 in
more detail.
MEMBERSHIP
The Committee presided over, and was subject to,
significant change during 2020. In addition to myself as
Chair, the Committee currently comprises independent
Non-Executive Directors Peter Espenhahn and Lord Matthew
Carrington who joined the Committee on 23 May, and more
recently Robin Freestone, Richard Parry-Jones, Antony
Sheriff and Anne Stevens who joined the Committee on
1 February 2021. It also comprises Non-Executive Director
Stephan Unger who also joined on 1 February 2021, as the
Relationship Agreements with the significant shareholder
groups (see page 82) provide that each may appoint a
director to the Committee. During the year, Penny Hughes
was Chair of the Committee and Dante Razzano a member
until they stepped down on 20 April, and Richard Solomons
and Imelda Walsh were members of the Committee until
23 May when they stepped down from the Board. William (Bill)
Tame was a member from 3 June until he stepped down
from the Board on 27 January 2021, Mahmoud Samy
Mohamed Aly El Sayed until he stepped down from the
Board on 12 November and Amr AbouelSeoud was a
member from 1 February 2021 until he stepped down from
Board on 18 February 2021. I would like to thank Penny,
Dante, Richard, Imelda, Bill, Amr and Mahmoud for their
significant contributions.
The Company Secretary is secretary to the Committee and
the Chief Executive Officer, Director of HR, Director of
Reward and other members of the senior management team
may be invited to attend for all or part of a Committee
meeting as appropriate.
EXECUTIVE MANAGEMENT CHANGE
I took up the role of Executive Chairman on 20 April 2020
following the significant investment in the Company by my
Yew Tree Consortium and a rights issue. My first priority,
along with that of the Board, was to strengthen executive
management.
The Company had previously announced at the end of
February that Mark Wilson had decided to step down as
Chief Financial Officer and so the process to find a new
CFO was already underway with the Committee confirming
the appointment of executive search company Savannah
Group to commence the search. The Committee agreed the
search brief which was to consider candidates with a focus
on listed company finance experience in a global industrial/
manufacturing context, combined with broader business
LAWRENCE STROLL
CHAIR, NOMINATION COMMITTEE
DEAR SHAREHOLDER
As Nomination Committee Chair, I am pleased to present the
Committee’s Report for the year ended 31 December 2020.
ROLES AND RESPONSIBILITIES
The role of the Committee is to establish formal, rigorous
and transparent procedures for the appointment of Directors
to the Board and senior executive officers of the Company.
In addition, it is responsible for reviewing the succession
plans for the Executive and Non-Executive Directors.
This involves:
• The regular review of the structure, size and composition
of the Board to ensure it has the proper balance of skills,
experience, independence, and diversity;
• Succession planning for Directors and senior executives,
including oversight of the development of a diverse
pipeline for succession, with a view to addressing the
leadership needs of the Company to ensure that it can
continue to compete effectively in the market place;
• Identifying and nominating candidates to fill Board
vacancies including managing the search process; and
• Keeping under review potential conflicts of interests of
Directors disclosed to the Company and developing
appropriate processes for managing such conflicts
where necessary.
The Committee meets at least twice a year and has formal
terms of reference which can be viewed on the Company’s
54
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
NOMINATION COMMITTEE REPORT
acumen and a balance of strategic vision and hands-on style.
Specific corporate “turn-around” experience was also
regarded as valuable. An important element of the search
was a focus on the gender diversity of the Board as part of
candidate considerations and it is noted that Savannah is a
signatory to the Voluntary Code of Conduct for Executive
Search Firms which seeks to address gender diversity on
boards and best practice for the related search processes.
Following an extensive process which included the review
of a “long list” of candidates a “short list” was agreed and
members of the Committee and other Board members met
with a number of the short-listed candidates. This process
culminated in the appointment of Kenneth Gregor on 22 June.
With the significant difficulties experienced by the Company
during 2019, the Board concluded that it was time to put in
place new leadership to lead the urgent turnaround plans,
including actions to stabilise the Company’s capital and
debt structure. Given the nature of the role of Chief
Executive Officer in a unique company like Aston Martin as
well as the significant difficulties being faced by the
Company, it was clear that the candidate would need to be
of high calibre, with strong leadership capabilities and a
unique skill set and ideally able to join the Company within
an accelerated timescale. Given those very specific
requirements and the urgent and sensitive nature of the
search a small group of candidates was considered by the
Board. Tobias Moers was an obvious top candidate as a
highly successful and experienced automotive professional
with more than 25 years in senior roles at Mercedes, highly
experienced in performance cars and with a successful track
record of implementing business transformation in a
competitive environment. On 26 May the Company
announced that Tobias Moers would join the Company as
Chief Executive Officer on 1 August.
BOARD COMPOSITION
With a desire to strengthen the Board and with the planned
stepping down of independent Non-Executive Directors
Richard Solomons, Imelda Walsh and Tensie Whelan,
the Committee retained Savannah over the summer to
conduct a wide-ranging independent Non-Executive
Director search. The brief was to identify candidates with
relevant automotive or luxury industry background and track
record in either an executive or non-executive capacity,
combined with board-relevant qualities and skills. These
factors were considered critical to support the Company in
its future ambitions as well as to meet our aims relating to
the UK Corporate Governance Code (“Code”) compliance
and diversity.
As a result of this process, we announced in January 2021
the appointment of independent Non-Executive Directors
Anne Stevens, Robin Freestone, Richard Parry-Jones and
Antony Sheriff. We also announced the appointment of
Non-Executive Director Stephan Unger, the representative
director for Mercedes-Benz AG. Peter Espenhahn (Audit and
Risk Committee Chair) and Lord Matthew Carrington
(Remuneration Committee Chair) will step down from their
Chair roles on the publication of our year-end results on 25
February and from the Board at the close of the AGM. Robin
Freestone will become Audit and Risk Committee Chair and
Anne Stevens will become Remuneration Committee Chair.
Antony Sheriff is Senior Independent Director.
The Board and Committees are currently compliant with the
Code (see page 46 of the Governance Report). The
Committee will continue to focus on Board composition to
continue to improve diversity, which is very important.
DIVERSITY
The Board acknowledges that the Board’s perspective and
approach can be greatly enhanced through diversity of
gender, social and ethnic backgrounds, cognitive and
personal strengths, tenure and relevant experience. There is
also a recognition that to deliver our strategy it is important
to promote a high-performing culture, characterised by a
diverse and inclusive workforce.
In formulating the Board Diversity Policy which was
adopted during 2019, the Committee recognised the Davies
Report and the Hampton-Alexander Review target for
women to represent 33% of Boards by 2020 whilst also
being cognisant of the Company’s Relationship Agreements
with its significant shareholder groups with rights to
nominate representative directors to the Board (see page 82).
Accordingly, it was agreed that the Board intends to
maintain a balance so that, as a minimum, one third of
Board members not subject to significant shareholder
appointments are women, provided this is consistent with
the prevailing skills and diversity requirements of the
Company as and when seeking to appoint a new Director.
Consequently, under the Board Diversity Policy, as at the
date of this Report, there is one woman out of eight relevant
Board members (being the 2 Executive Directors and 6
independent Non-Executive Directors), thereby comprising
12.5% of the Board. We acknowledge the need to do more
in the area of diversity including in relation to the senior
management of the Company, and so this will be a
continued focus for the Committee.
COMMITTEE EFFECTIVENESS
Committee Effectiveness Review feedback is summarised on
page 51. Given events during the year with evolving
circumstances and changes to Committee membership, the
Chair received ongoing feedback from Committee members
on Committee effectiveness.
LAWRENCE STROLL
CHAIR, NOMINATION COMMITTEE
24 FEBRUARY 2021
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
55
AUDIT AND RISK COMMITTEE REPORT
AUDIT AND RISK
COMMITTEE REPORT
• Reviewing the Group’s internal financial, operational and
compliance controls and risk identification and
management systems and considering Group policies for
identifying and assessing risks and arrangements for
employees to raise concerns (in confidence) about
possible improprieties; and
• Reviewing the annual internal audit programme and
discussing the findings of any internal investigations and
management’s response.
The Committee meets at least three times a year at
appropriate intervals in the financial reporting and audit
cycle and otherwise as required. The Committee has formal
terms of reference which can be viewed on the Company’s
website www.astonmartinlagonda.com. Committee
attendance for the period is set out on page 48.
MEMBERSHIP
This has been a year of transition for the Committee.
In addition to myself as Chair, the Committee currently
comprises independent Non-Executive Directors Lord
Matthew Carrington and more recently Robin Freestone,
Richard Parry-Jones, Antony Sheriff and Anne Stevens who
joined on 1 February 2021. Richard Solomons and Imelda
Walsh were members of the Committee during the year until
23 May when they stepped down from the Board. William
(Bill) Tame was a member from 3 June until he stepped
down from the Board on 27 January 2021. I would like to
thank Richard, Imelda and Bill for their significant
contributions.
In accordance with the Relationship Agreements with the
significant shareholder groups (see page 82), each may
appoint an observer of the Committee with no voting rights.
Michael de Picciotto and Stephan Unger currently serve as
observers. Amr AbouelSeoud ceased to be an observer on
18 February 2021.
I have decided to step down as Chair of the Committee on
the publication of the Company’s preliminary results and
from the Board and Committees at the close of the Annual
General Meeting. Consequently, Robin Freestone will
become Committee Chair on my stepping down. Matthew
Carrington has also confirmed that he will step down from
the Board and Committees at the close of the Annual
General Meeting.
The Company Secretary is secretary to the Committee. The
Board Executive Chairman, the Chief Executive Officer, the
Chief Financial Officer, the General Counsel, the Director of
Internal Audit and Risk Management, the external auditor
and other senior members of the finance team also routinely
attend meetings.
PETER ESPENHAHN
CHAIR, AUDIT AND RISK COMMITTEE
DEAR SHAREHOLDER
I took up the role of Audit and Risk Committee Chair on
23 May 2020 when Richard Solomons stepped down from
the Board. I am pleased to present the Committee’s report
for the period.
ROLES AND RESPONSIBILITIES
The Committee’s responsibilities include:
• Assessing the integrity of the Group’s Financial Statements
and formal announcements of the Group’s performance;
• Consideration of the Group’s viability statement;
• Reviewing the Annual Report to determine whether it is
fair, balanced and understandable;
• Receiving and reviewing reports from the Company’s
external auditors, monitoring their effectiveness and
independence and making recommendations to the Board
in respect of their remuneration, appointment and
dismissal. Overseeing policies on the engagement of the
external auditors for the supply of non-audit services;
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
AUDIT AND RISK COMMITTEE REPORT
The Code stipulates that:
• the Committee, as a whole, shall have competence
relevant to the sector in which the Company operates.
All Committee members have past employment
experience in either finance or accounting or engineering
roles and have knowledge of financial reporting and/or
international businesses. As such the Board is satisfied that
the Committee, as a whole, has the competence relevant
to the business sector. Details of the Committee members’
experience can be found in their biographies from
page 41;
• at least one Committee member should have recent and
relevant financial experience. Each of Richard Solomons
and William Tame met this requirement during their
tenure and Robin Freestone meets this requirement as he
was previously Chief Financial Officer of Pearson plc and
is a qualified chartered accountant.
The Committee is considered to be independent for
Code purposes as it is made up solely of independent
Non-Executive Directors.
• Regular updates on treasury, tax, litigation and
whistleblowing activity. Updates on COVID-19 impacts,
Brexit readiness, the pension scheme and the renewal of
the Group’s insurance programme;
• Review and approval of the external audit plan,
audit fees, reports from the external auditor and
subsequent audit findings;
• Review of the internal audit function, the risk management
and corporate risk register and approval of the internal
audit plan;
• Considering the outcome of the Financial Reporting
Council’s (FRC) Audit Quality Team review of the 2018
audit undertaken by KPMG and correspondence from the
FRC who had included our 2019 Annual Report as part of
their sample for the thematic review of companies’
reporting on the impact of climate change;
• Review and approval of new and/or amended policies
including the Non-Audit Services Policy and Foreign
Exchange Hedging Policy;
• Committee annual calendar and agenda planning;
This Report sets out the work of the Committee in more detail.
• Review of the Committee’s terms of reference; and
MAIN ACTIVITIES
During the period from 1 January 2020 until 31 December
2020, the Committee had six meetings. The Committee
focused on the following key areas.
• Review of the UK Corporate Governance Code
requirements relating to year-end matters including,
among others, the review of the Group’s accounting
policies, key accounting judgements, significant financial
reporting matters, principal risks, going concern and
viability, the effectiveness of the Group’s risk management
and internal control systems and “fair, balanced and
understandable” reporting in the 2019 Annual Report;
• Financial Statements, announcements and other financial
reporting matters including the approval of the interim
results announcement, trading updates and the review and
approval of the 2019 Annual Report;
• Support for the significant financial and capital
transactions which took place during the year including
review of the relevant working capital, Financial Position
and Prospects Procedures (FPPP) financial and other
reports and relevant transaction documents;
• Corporate governance matters and regulatory updates.
At each meeting the Committee held a private session
with the external auditor and the Director of Internal Audit
and Risk Management without members of management
being present.
FINANCIAL REPORTING AND SIGNIFICANT
FINANCIAL JUDGEMENTS
The Annual Report seeks to provide the information
necessary to enable an assessment of the Company’s
position and performance, business model and strategy.
The Committee assists the Board with the effective discharge
of its responsibilities for financial reporting, and for ensuring
that appropriate accounting policies have been adopted
and that management has made appropriate estimates
and judgements.
In preparing the Financial Statements for the period, there
were a number of areas requiring the exercise of a high
degree of estimation. These areas have been discussed with
the external auditor to ensure the Group reaches appropriate
conclusions and provides the required level of disclosure.
The significant issues considered by the Committee in
respect of the Annual Report are set out on page 58.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
57
AUDIT AND RISK COMMITTEE REPORT CONTINUED
Significant matters for the year
ended 31 December 2020
Impairment assessment
of goodwill and other
intangible assets
Accounting for defined
benefit pension obligations
Going concern and
Viability statement
reporting
How the Committee addressed these matters
The Committee considered the Group’s process in determining whether any asset, covered
within the scope of IAS 36 Impairment of Assets, requires impairment. The key judgement in
relation to assessing the carrying value of intangible assets with indefinite useful lives
(goodwill and brands) largely related to the achievability of the Group’s forecasts from 2021
to 2025, which underpin the valuation process. The Committee also considered whether
there were any indicators of impairment of assets with a finite life. On 27 October the
Group announced an expanded and enhanced Strategic Cooperation Agreement with
Mercedes-Benz AG, giving access to powertrain architecture (for conventional, hybrid, and
electric vehicles) and future oriented electric/electronic architecture for all product launches
through to 2027. The Committee reviewed the impact on the carrying value of assets of this
enhanced partnership, and other cycle plan updates following the strategic review of the
business plan independently. The carrying value of intangible development costs have been
impaired by £69.4m to reflect the change in future vehicle powertrains and electronic
architecture. The Committee concluded that the assumptions made, conclusions reached
and disclosures given were appropriate.
The Committee considered the financial statement disclosures in respect of the defined
benefit pension scheme including the judgements made and the sensitivity analysis in
relation to actuarial assumptions including discount rates, inflation and longevity as set out
in note 26 to the Financial Statements. The Committee noted that the judgements, including
the impact of future committed pension contributions, made on the pension scheme were all
based on advice from the Group’s pension adviser. The final calculations in respect of the
Group’s defined benefit pension scheme liability were performed by the pension scheme
actuary. The Committee discussed with the auditor the assumptions applied, in particular
the findings of the auditor’s own pension specialist, and concluded that the assumptions
made and disclosures given were appropriate.
The Committee discussed the Group’s considerations in assessing the appropriateness of
adopting the going concern basis of accounting and considered the financial statement
disclosures in respect of adopting the going concern basis in preparing the financial
information. The Committee concluded that adopting the going concern basis and the
disclosures given were appropriate.
The Committee discussed the key assumptions used in evaluating the long-term viability of
the Group, the time period for the viability statement and the stress and reverse stress testing
used as a basis for conducting the overall assessment. The Committee concluded that the
assumptions made and the wording included in the viability statement were appropriate.
Other matters
At the December 2020 and February 2021 meetings, the Committee also considered
management’s papers on the following subjects and concluded that the assumptions made
and the approaches adopted were appropriate:
• capitalisation and amortisation of development costs;
• recognition and measurement of deferred tax assets;
• the Group’s revenue recognition policies;
• recognition and measurement of the Group’s warranty provision;
• recognition and measurement of adjusting items;
• accounting for the financing and capital arrangements;
• accounting for the Strategic Cooperation Agreement with Mercedes-Benz AG;
• the prior period error corrected in the year related to the timing of accounting recognition
of the retail incentive element of variable marketing expenditure within the US market;
• the Group’s treasury policy and other treasury related matters; and
• the Group’s tax strategy.
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
AUDIT AND RISK COMMITTEE REPORT CONTINUED
FINANCIAL REPORTING COUNCIL
As part of its normal processes the FRC’s Audit Quality
Team met with the former Chair of the Committee to review
the 2018 audit undertaken by KPMG. The FRC confirmed
that the purpose of the review was to monitor the quality of
the audits of listed and other major public interest entities.
Discussions with audit committees support that objective by
enabling the FRC to develop a better understanding of the
interaction between the committee and the audit firm.
The Company received a letter from the FRC confirming that
the Company’s 2019 Annual Report and Accounts had been
included as part of their sample for the thematic review of
companies’ reporting on the impact of climate change. This
review does not provide assurance that the Annual Report
and Accounts are correct in all material respects as the
FRC’s role is not to verify the information but to consider
compliance with reporting requirements. No questions were
raised concerning the Company’s climate disclosures, but a
small number of matters were noted where the Company
could make improvements to its existing disclosures. These
have been taken into account in the preparation of this
Annual Report.
EXTERNAL AUDITORS
OVERSIGHT OF EXTERNAL AUDIT
The Committee oversees the work undertaken by Ernst &
Young LLP (”EY”). EY was appointed as external auditors
with effect from 24 April 2019, following an audit tender
process. Shareholders approved EY’s appointment at the
Company’s Annual General Meeting on the 25 June 2019.
The external auditor is required to rotate the audit
engagement partner every 5 years. The current engagement
partner, Simon O’Neill, began his appointment from the
2019 financial year.
The Committee’s responsibilities include making a
recommendation on the appointment, reappointment and
removal of the external auditor and overseeing their
effectiveness and independence. The Committee assesses the
qualifications, expertise, resources and independence of the
external auditors and the effectiveness of the audit process.
During the period the Committee approved the external
audit plan, the proposed audit fee and terms of engagement
of EY for FY 2021. It has reviewed the audit process and the
quality and experience of the audit partners engaged in the
audit and has also considered the extent and nature of
challenge demonstrated by the external auditor in its work
and interactions with management. The Committee has
considered the objectivity of the auditor including the nature
of other work undertaken for the Group as set out below.
The Committee considers that the Company has complied
with the Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order
2014 for the financial year under review.
NON-AUDIT SERVICES
The Committee recognises that the independence of the
external auditors is an essential part of the audit framework
and the assurance that it provides. The Committee adopted a
policy which sets out a framework for determining whether
it is appropriate to engage the Group’s auditors for non-audit
services and for pre-approving non-audit fees. The overall
objective of the policy is to ensure that the provision of
non-audit services does not impair the external auditor’s
independence or objectivity. This includes, but is not limited
to, assessing:
• any threats to independence and objectivity resulting from
the provision of such services;
• any safeguards in place to eliminate or reduce these
threats to a level where they would not compromise the
auditor’s independence and objectivity;
• the nature of the non-audit services; and
• whether the skills and experience of the audit firm make it
the most suitable supplier of the non-audit service.
The total value of non-audit services that can be billed by
the external auditor is normally restricted by a cap set at
70% of the average audit fees for the preceding three years.
This cap will become effective for the year commencing
1 January 2022 at which point the current external auditors
will have been engaged for the previous three years. During
2020 the Committee approved non-audit fees in excess of
this limit as a result of the financing and capital raise
transactions which took place during the year.
The approval of the Committee must be obtained before
the external auditor is engaged to provide any permitted
non-audit services. For permitted non-audit services that are
clearly trivial, the Committee has pre-approved the use of
the external auditor for cumulative amounts totalling less
than £200,000 on the approval of the Chief Financial
Officer and Chair of the Committee. During FY 2020 the
Company’s external auditor was engaged to provide
permitted non-audit services in relation to the equity placing
and rights issue transactions completed at the end of April
(£725,000), the half year review (£45,000) and the further
capital, finance and strategic cooperation transactions which
took place in the latter part of the year (£785,000). These
fees primarily related to the provision of working capital
reports and comfort letters. (2019: £0.1m of non-audit
services fees were paid.)
Details of the fees paid to the external auditor during
the financial year can be found in note 4 to the
Financial Statements.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
59
AUDIT AND RISK COMMITTEE REPORT CONTINUED
EVALUATION OF INTERNAL CONTROLS
The Board is ultimately responsible for the Group’s system
of internal controls and risk management and it discharges
its duties in this area by:
• determining the nature and extent of the principal risks it
is willing to accept in achieving the Group’s strategic
objectives (the Board’s risk appetite); and
• challenging management’s implementation of effective
systems of risk identification, assessment and mitigation.
The Committee is responsible for reviewing the effectiveness
of the Group’s internal control framework and risk
management arrangements. The system of internal controls
is designed to manage rather than eliminate the risk of not
achieving business objectives and can only provide
reasonable and not absolute assurance against material
misstatement or loss. This process complies with the
Guidance on Risk Management, Internal Control and
Related Financial and Business Reporting issued by the
Financial Reporting Council. It also accords with the
provisions of the Code.
Details of the Group’s risk management process and the
management and mitigation of principal risks together with
the Group’s viability statement can be found in the Risk and
Viability Report on page 33.
The Board, through the Committee, has carried out a robust
assessment of the principal risks facing the Group and agreed
the nature and extent of the principal risks it is willing to accept
in delivering the Group’s strategy (the Board’s risk appetite). It
has considered the effectiveness of the system of internal
controls in operation across the Group for the period covered
by the Annual Report and up to the date of its approval by the
Board. This review covered the material controls, including
financial, operational and compliance controls and risk
management arrangements. A number of areas were identified
for improvement as set out below.
During the year the new management team have enhanced
the procedures and controls associated with budget and
forecasting. Transformation workstreams have been
established to further improve business performance,
manage finished vehicle inventory to successfully reduce
Group and dealer stock levels, and enhance the controls
deployed to manage the authorisation, monitoring and
effectiveness of marketing expenditure. These workstreams
continue and are expected to complete in H1 2021. A
project has commenced to replace a number of the Group’s
core IT systems with a new Enterprise Risk Planning system
to enhance the underlying IT general controls and drive
better process efficiencies across a number of core areas and
activities. Phase 1 of the project is due to complete within
the first half of 2022.
During the H1 results preparation process, the Company
identified that an adjustment should be made in respect of
the timing of accounting recognition of the majority of customer
and retail incentive support associated with supporting lease
and other incentive programs in the US. As a result, the
balance sheets of the Group as at 31 December 2018,
30 June 2019 and 31 December 2019 and the income
statements for the six months ended 30 June 2019 and the
year ended 31 December 2019 were restated to correct this
error. This was a non-cash adjustment and had no impact
on historic or future cash flows. Full details are set out
in note 2. Management have remediated this control
deficiency during the period through the deployment of a
comprehensive technical accounting review and thorough
review of the application of IFRS 15 with respect to retail
incentives and changes in the controls around the future
operation of variable marketing programmes.
CONTROL ENVIRONMENT
Our internal control framework is built upon established
entity-level controls which include mandatory training in
relation to the Group’s Code of Conduct (which consist
of 14 Standards of Corporate Conduct). The Group defines
its processes and ways of working through documented
standards and procedures which guide the way the
Group operates. The key corporate policies include the
following areas:
• Code of Conduct;
• Confidential Reporting and Whistleblowing;
• Conflicts of Interest;
• Anti-Bribery and Corruption;
• Gifts and Hospitality;
• Anti-Money Laundering; and
• Equality, Diversity and Inclusion.
There are established procedures for the delegation of
authority to ensure that decisions are made at an appropriate
level within the business dependent on either the magnitude
or nature of the decision. In particular, access to our IT
systems and applications is provided subject to formal
access provisioning processes with the objective being to
limit access, as appropriate, to enable an individual to
perform their role and to enforce appropriate segregation of
duties within business processes.
During the year, we were re-awarded ISO 9001 accreditation
for our quality management system which ensures that
policies, standards and procedures are appropriate for our
business, that they are reviewed on a regular basis and made
available to applicable employees and contractors through
the Group intranet. On joining the Group all employees are
provided with the Standards of Corporate Conduct policies
and are asked to confirm that they have read and understood
them. Existing employees are required to annually re-certify
that they have read and understood these policies.
60
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
AUDIT AND RISK COMMITTEE REPORT CONTINUED
The Group continues to strengthen the control environment
by embedding the Enterprise Risk Management Framework
and System which is supported by “Risk Champions” within
each function. A summary of the key risk management
activities undertaken by the Group is included within the
“Risk and Viability Report” on pages 33 to 34.
The Internal Audit and Risk Management function is
responsible for administering the Enterprise Risk
Management Framework and System and for providing
independent assurance to the Board, the Committee and
senior management.
The Group continues to develop its “three lines of defence”
assurance model with the objective of embedding effective
risk management and control throughout the business and
providing assurance to the Board and the Committee of the
effectiveness of internal control and risk management across
the organisation.
This comprises the following:
• First line of defence – Functional management who are
responsible for embedding risk management and internal
control systems into their business processes.
• Second line of defence – Functions that oversee or
specialise in risk management and compliance-related
activity. They monitor and facilitate the implementation of
effective risk management and control activities by the
first line. These functions include Financial Control,
Quality Audit, Security, IT, Health & Safety, Legal and the
risk management activities performed by the Internal
Audit and Risk Management team.
• Third line of defence – Functions that provide independent
objective assurance to the Board, Audit and Risk Committee
and senior management regarding the effectiveness of the
first and second lines of defence. This includes Internal
Audit and Risk Management and the external auditor’s
provision of reports on the results of the audit.
INTERNAL AUDIT
The vision and mission for the Internal Audit and Risk
Management function was approved by the Committee
under its Internal Audit and Risk Management Charter,
which is consistent with the Institute of Internal Auditors
guidance. The Charter is subject to annual review and
approval by the Committee.
The Internal Audit and Risk Management function provides
independent, objective assurance to the Board, the
Committee and senior management on whether the existing
control and governance frameworks are operating effectively
to meet the Group’s strategic objectives. The Director of
Internal Audit and Risk Management reports to the Chief
Financial Officer with an independent reporting line to the
Committee Chair. The Director provides regular reports to
the Committee on the function’s activities. The Committee
assesses the effectiveness of the Internal Audit and Risk
Management function on an annual basis.
To ensure that it is meeting its objectives, the Internal Audit
and Risk Management function has an annual work plan
comprising risk-based cyclical audits, reviews of risk
mitigation plans and assessments of emerging risks and
business change activity, together with work mandated for
compliance purposes. The audit plan for 2021 was approved
by the Committee and the Committee will monitor progress
against the plan in the coming year, as well as whether the
plan remains focused on the evolving key risks facing the
business. Such reviews will consider any changes to risk
registers, hot spots and emerging risks in the industry as well
as changes based on engagement with the business.
WHISTLEBLOWING
It is important to ensure there is an appropriate mechanism
for employees and contractors to report any concerns
regarding suspected wrongdoing or misconduct. The
“Confidential Reporting and Whistleblowing” policy is made
available to all employees and contractors on joining the
business and is published on the Group intranet together
with annual mandatory training.
Any concerns raised are managed by the Internal Audit and
Risk Management team and investigated with support from
Human Resources and/or Legal teams depending on the
nature of the concern. The Group continues to use a
third-party managed global hotline and online reporting tool
to facilitate reporting of concerns. This hotline provides for
confidential reporting where required. The investigation
outcomes, significant findings and status are reported to the
Committee on a regular basis.
FINANCIAL REPORTING
Management is responsible for establishing and maintaining
adequate internal controls over financial reporting. These
are designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
Financial Statements for external reporting purposes.
The financial reporting internal control system covers the
financial reporting process and the Group’s process for
preparing consolidated accounts. It includes policies and
procedures which require the following:
• The maintenance of records that, in reasonable detail,
accurately and fairly reflect transactions including the
acquisition and disposal of assets.
• Reasonable assurance that transactions are recorded as
necessary to permit preparation of Financial Statements in
accordance with International Financial Reporting
Standards.
• Reasonable assurance regarding the prevention or timely
detection of unauthorised use of the Group’s assets.
There are also specific disclosure controls and procedure
around the approval of the Group’s Financial Statements.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
61
COMMITTEE EFFECTIVENESS
The Committee carried out an Effectiveness Review with the
feedback summarised on page 51. Given events during the
year the Chair also sought regular soundings from Committee
members on Committee effectiveness so that the Committee
could remain effective in evolving circumstances.
PETER ESPENHAHN
CHAIR, AUDIT AND RISK COMMITTEE
24 FEBRUARY 2021
AUDIT AND RISK COMMITTEE REPORT CONTINUED
FAIR, BALANCED AND UNDERSTANDABLE
ASSURANCE FRAMEWORK
The Board recognises its duty to ensure that the Annual
Report and Accounts, taken as a whole, is fair, balanced
and understandable and provides the information necessary
for shareholders to assess the Group’s position and
performance, business model and strategy. The Board
requested that the Audit and Risk Committee undertake a
review and report to the Board on its assessment.
The key elements of the assurance framework for the
assessment are as follows:
• the process by which the Annual Report and Accounts
were prepared, including detailed project planning
and a comprehensive review process;
• review of the drafting and verification processes
for the Annual Report and Accounts by the
Disclosure Committee;
• comprehensive reviews undertaken by the Executive
Directors, members of the Executive Committee and other
members of senior management comprising the Annual
Report and Accounts drafting team to consider content
accuracy, regulatory compliance, messaging and balance;
• the review of the Annual Report and Accounts by the
Audit and Risk Committee placing reliance on the
experience of the Committee members;
• reports prepared by senior management regarding critical
accounting judgements and key financial areas; and
• discussions with, and reports prepared by, the external
auditor.
The Committee received confirmation from management
that the assurance framework had been adhered to for the
preparation of the 2020 Annual Report.
The Committee provided a recommendation to the Board
that the “fair, balanced and understandable” statement
could be given on behalf of the Directors. The Board’s
confirmation is set out on page 85.
62
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
DIRECTORS’ REMUNERATION REPORT
DIRECTORS’
REMUNERATION REPORT
DEAR SHAREHOLDER,
I am pleased to present the Directors’ Remuneration Report
(DRR) for the year ending 31 December 2020, which has
been approved by both the Remuneration Committee (the
Committee) and the Board.
The pandemic has required the Company to respond in an
unprecedented way. The health and safety of our people,
their families, our business partners, customers and our local
communities remain our absolute priority, as we continue to
work within a COVID-19 safe environment across our
operations. While FY 2020 proved to be a difficult year for
Aston Martin, as it did for so many globally, we have made
great progress in positioning the Company for long-term
success and are proud of our people and the work that has
been delivered by the whole team during the year. Despite a
year of uncertainty due to the COVID-19 pandemic, the
Company has been resilient and we have made significant
progress, not least in strengthening the financial resilience of
the business by capital raises, successfully launching the
DBX, de-stocking the dealer network in-line with targets to
rebalance supply to demand and in taking decisive action
on costs. We have developed a new business plan with
significant growth ambitions, incorporating a strategic
cooperation agreement with Mercedes-Benz agreed during
the year.
LORD MATTHEW CARRINGTON
CHAIR, REMUNERATION COMMITTEE
Executive Directors’ Remuneration At a Glance
Annual Report on Remuneration
FY 2020 total single figure remuneration
Salary, pension, and benefits
Annual bonus
Long-term incentive plan
Share interests and shareholding guidelines
CEO remuneration relative to employees
Further information on remuneration for new
executive directors
Further information on remuneration for
executive directors who left during the year
Non-Executive Directors’ remuneration
Remuneration Committee in FY 2020
66
67
67
67
68
69
71
73
74
75
75
77
SENIOR LEADERSHIP BOARD-LEVEL CHANGES
As set out by the Executive Chairman, there have been
changes to the leadership team at Aston Martin. We have
made a number of key appointments to build a world-class
senior team, Tobias Moers joined the Board as CEO in
August and Kenneth Gregor joined as CFO in June. Tobias
and Kenneth bring industry leading experience that is
invaluable to the delivery of our strategy and have already
made great strides in directing Aston Martin’s
transformation. The Committee approved the remuneration
packages for the new executive directors and full details are
set out on page 74, including on the discretion used to
determine a buyout award for the CEO.
Dr Andy Palmer and Mark Wilson stepped down from the
Board on 25 May 2020 and 30 April 2020 respectively and
details of the final payments to both Andy and Mark are set
out on page 75. As disclosed last year, neither former
executive director participated in the annual bonus or LTIP
in 2020.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
63
DIRECTORS’ REMUNERATION REPORT
FY 2020 REMUNERATION APPROACH
During April 2020, among the various actions taken to
manage the challenges of COVID-19, the senior leadership
team agreed to a voluntary reduction in pay with the
objective of helping to conserve cash in the short-term and
to help protect the longer-term financial security of the
business. This included all Non-Executive Directors waiving
35% of their fees, Executive Committee members waiving 20%
of their salaries and other members of senior management
waiving 5% to 10% of their salaries, depending on salary
level. These changes were applied for a three-month period
from 1 April to 30 June 2020 and we thank the senior team
for their support in accepting these waivers.
Also, during April 2020, we announced that in his role as
Executive Chairman, Lawrence Stroll elected to receive only
a nominal salary, of £1 per annum, with no further elements
of remuneration.
Given the unprecedented uncertainty and change faced
during 2020, the Committee decided to delay deciding on
2020 incentives and so no annual bonus or LTIP arrangements
were put in place for the senior employees at the start of the
year. Once the new leadership team was established and the
updated business plan developed, the Remuneration
Committee were able to determine the most appropriate
approach to annual bonus and the LTIP for 2020.
FY 2020 ANNUAL BONUS
The Committee considered it was important to operate
some form of annual bonus for FY 2020, to incentivise and
recognise the significant efforts of the senior team (including
the new CEO and CFO since they joined Aston Martin) in a
challenging year of business turnaround. The Committee
gave considerable thought to how any approach for the
senior team must be appropriate in the context of the
challenges of 2020 and the actions taken in relation to the
wider employee population (including the restructure of the
organisation as part of the turnaround programme and the
furloughing of employees during the pandemic) and decided
that no payment would be made against the element of
bonus based on financial measures (accounting for 80% of
the total opportunity). It was therefore decided to limit the
2020 annual bonus to 20% of maximum for the whole
senior team, with only the non-financial element of bonus
(as per the Remuneration Policy) to apply to the CEO and
CFO. This approach allowed specific strategic objectives,
crucial to the delivery of the business plan and turnaround
programme and for which the CEO and CFO were directly
accountable for during their period of 2020 service, to be
incentivised. Full details of the 2020 annual bonus approach
and outcome are set out on page 68. All non-management
employees continued to receive their contractual annual
bonus payments in respect of 2020 (which were not subject
to Company performance).
FY 2020 LTIP
As with the 2020 annual bonus, the 2020 LTIP grant was
delayed. The Committee was able to determine the most
appropriate approach and approved the 2020 LTIP grant
at the October 2020 meeting. The LTIP awards were then
granted at the first opportunity post this approval, following
the General Meeting held on 4 December 2020 and on the
first dealing day of the consolidated shares (which was
14 December 2020).
The Committee selected Adjusted EBITDA as the most
appropriate measure of profit for the 2020 LTIP (accounting
for 80% of the total award), given market and internal focus
on this key metric which is now used to manage the
business. The Adjusted EBITDA target range was carefully
calibrated based on Aston Martin’s business plan and was
set to be stretching (extremely so at the maximum vesting
level) yet motivating in the context of our business plan and
the uncertainty in the current environment. Relative total
shareholder return (TSR) was selected as a second measure
(accounting for 20% of the total award), recognising
the importance of shareholder alignment and also the
self-calibrating nature of TSR as an objective measure of
performance, particularly in a period of uncertainty. TSR will
be measured against a group of luxury companies, with the
aim to incentivise elevation of the Aston Martin brand, by
out-performance of these high-end luxury global peers.
The Committee gave considerable thought to and discussed
in detail the appropriate LTIP award levels to grant to the
CEO and CFO, given the external environment, the
performance of the Company both in terms of financial
outcomes and share price, and the need to incentivise
new leadership and commitments made on appointment.
The Committee therefore decided to grant LTIP awards of
300% and 200% of salary to the CEO and CFO respectively
(at a maximum) to recognise and incentivise the size of the
task and effort required from these new executives to
turnaround the business.
Full details of the 2020 LTIP awards are set out on page 69.
64
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
DIRECTORS’ REMUNERATION REPORT CONTINUED
BROADER WORKFORCE REWARD
Passionate, motivated and professional people are critical to
the success of Aston Martin and, to attract and retain the best
talent available, our pay and benefits must be competitive.
When considering the remuneration of the Executive
Directors and the Executive Committee, the Committee
considers remuneration across the whole Company.
The Committee was kept fully informed of the key areas
of focus around Aston Martin’s people during FY 2020.
These were around responding to the COVID-19 pandemic,
including a focus on the health, safety and well-being of
Aston Martin’s people, launching an organisational
restructure programme, communicating and engaging with
our people and the launch of the ‘I AM Aston Martin’
turnaround workstream, a programme focusing on
developing our people strategy and culture to ensure
Aston Martin is a ‘Great Place to Work’.
On workforce reward more specifically, during the year the
Committee considered information on the policies and
practices which are in place throughout the Company.
In particular, it looked at the Aston Martin employee
population, salary increases and ranges, incentive approach
(including the cascade of a new Group KPI scorecard –
more on this below) and opportunities, pension and other
non-cash benefits. We also discussed our approach to, and
results of, Aston Martin’s Gender Pay Gap (GPG) reporting.
Our aim is to foster a culture where everybody feels valued,
motivated and rewarded to achieve their best work –
detailed information on our People, including our Gender
Pay Gap figures, can be found on pages 18 to 20. There is
also information on the Board’s engagement with our
workforce in the People section and with our other
stakeholders in the Governance section on page 52.
COMMITTEE MEMBERSHIP CHANGES
The composition of the Remuneration Committee has
changed during the year and I would like to thank Imelda
Walsh for her leadership of the Committee as Chair and
Richard Solomons for his contribution as a member up until
23 May 2020, when both Directors stepped down from
Board. I took over from Imelda as Chair of the Committee
and was joined by fellow independent non-executive
directors Peter Espenhahn and Bill Tame during FY 2020
who I would like to thank for their support.
As announced on 28 January 2021, it has been all change
for the Committee in 2021, with Anne Stevens, Robin
Freestone, Richard Parry-Jones and Antony Sheriff having
joined the Committee on 1 February 2021, with Anne taking
up the role of Remuneration Committee Chair following
publication of the 2020 financial results. Bill stepped down
on 28 January 2021 and Peter and I will step down from the
Board at the close of the 2021 AGM.
FY 2021 REMUNERATION APPROACH
Our approved remuneration policy will reach the end of its
three-year life at our 2022 AGM. We are planning a complete
review of our policy during 2021 and to seek approval at the
2022 AGM. This timing works out particularly well, with the
review to be carried out with the new Committee, led by
Anne Stevens as Chair, and gives us the opportunity to
ensure we have a forward-looking policy that is aligned with
our turnaround programme, new business plan and growth
ambitions. We will look to engage with our larger
shareholders on the policy review during 2021.
For 2021, the Committee has determined an approach to the
annual bonus and LTIP within the current policy, although
we have rebalanced the performance measures in the
annual bonus based on our latest business plan (but within
the flexibility of the policy).
The Committee has introduced a Group scorecard of
performance measures for the 2021 annual bonus to better
reflect annual progress on our new business plan and latest
KPIs. This Group scorecard will be cascaded throughout the
Company to apply to annual bonus for all employees,
providing strong alignment of focus and a ‘One Team’
approach. For 2021, the scorecard will be weighted 80%
on financial measures (with a 50% weighting on Adjusted
EBITDA, 20% on Free Cash Flow and 10% on Wholesale
volumes) and 20% on Quality performance. The Committee
will continue to have the discretion to adjust bonus
outcomes to ensure they are appropriate and reflect
underlying business performance/ any other relevant factors.
Full details of the 2021 annual bonus approach are set out
on page 69.
The Committee has decided to operate the 2021 LTIP on the
same basis as in 2020, albeit with updated Adjusted EBITDA
targets which reflect the new three-year period (1 January
2021 to 31 December 2023) of the business plan. Full
details of the 2021 LTIP approach are set out on page 71.
The Committee has had a considerable workload over the
course of FY 2020 and this has continued into FY 2021.
We take our responsibility to our shareholders and other
stakeholders seriously and I would like to thank you
for your continued support and understanding during this
unprecedented and challenging period. If you have any
questions on any element of this report, please email
company.secretary@astonmartin.com in the first
instance and I hope we can rely on your support at our
forthcoming AGM.
LORD MATTHEW CARRINGTON
CHAIR, REMUNERATION COMMITTEE
24 February 2021
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
65
DIRECTORS’ REMUNERATION REPORT CONTINUED
EXECUTIVE DIRECTORS’
REMUNERATION AT A GLANCE
Our Remuneration Policy was approved by shareholders at the AGM on 25 June 2019 and is set out in full in the 2018 DRR. This
can be found in the Annual Report FY 2018 at www.astonmartinlagonda.com. We will review our Policy during FY 2021 and
seek approval for a new Policy at the 2022 AGM (when the current Policy is due to expire).
This section explains the outcomes from the implementation of our Policy during FY 2020.
REMUNERATION OUTCOMES FOR FY 2020
FY 2020 TOTAL SINGLE FIGURE REMUNERATION FOR EXECUTIVE DIRECTORS
The table below sets out the 2020 single figure of total remuneration received by the Executive Directors.
Element
Salary
Benefits
Pension
Annual bonus
Total
Prior company incentives buyout
Total
Tobias Moers
CEO
from 1 August
2020
(£’000s)
Kenneth Gregor
CFO
from 22 June
2020
(£’000s)
Andy Palmer
CEO
until 25 May
2020
(£’000s)
Mark Wilson
CFO
until 30 April
2020
(£’000s)
224
7
24
67
322
417
14
44
–
476
135
3
14
–
152
354
48
37
142
581
901
1,482
2020 ANNUAL BONUS APPROACH AND OUTCOME
The 2020 annual bonus was limited to 20% of the maximum bonus opportunity, with only the non-financial element of the
bonus operated. This allowed specific objectives that were considered crucial to the delivery of the business plan to be
incentivised. The specific objectives that the CEO and CFO were directly accountable for during their period of 2020
service are set out below.
Performance measure
2020 approach
Financial measures (80%)
No payment to be made for FY 2020
CEO strategic objectives
(20%)
CFO strategic objectives
(20%)
(1) Secure strategic technology agreement with Mercedes-Benz AG
(2) De-stocking of dealer network
(3) Organisational restructure cost reduction targets
(1) Execution of refinancing (mezzanine debt-raise) to required level
(2) Execution of revolving credit facility credit facility to required level
(3) Organisational restructure cost reduction targets
2020 achieved
N/A
All met
All met
The Committee considered the bonus outcome for 2020 and determined that the strategic objectives as set out above had
been met in full and so 20% of bonus would be paid (pro-rata for period of 2020 service). As both the CEO and CFO are
new to the business, they are yet to meet their shareholding guideline and so 50% of the net 2020 bonus payment will be
delivered in shares deferred for three years.
ALIGNMENT BETWEEN EXECUTIVE DIRECTORS AND SHAREHOLDERS
The new CEO and CFO are subject to shareholding guidelines of 300% and 200% of salary respectively, which drives
long-term alignment with investors. Having only recently joined the Company, the CEO held 4,315 shares (value of £86.7k)
and the CFO held no shares as at 31 December 2020. As mentioned above, 50% of the net 2020 bonus payment will be
delivered in deferred shares to both the CEO and CFO and these shares will count towards their respective guideline.
REMUNERATION POLICY AND IMPLEMENTATION IN FY 2021
The implementation of our Remuneration Policy for FY 2021 is set out in the following section (Annual Report on Remuneration).
66
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
DIRECTORS’ REMUNERATION REPORT CONTINUED
ANNUAL REPORT
ON REMUNERATION
FY 2020 TOTAL SINGLE FIGURE REMUNERATION FOR EXECUTIVE DIRECTORS (AUDITED)
The table below sets out the single figure of total remuneration received by the Executive Directors in respect of FY 2020
(and the prior financial year). The subsequent sections detail additional information for each element of remuneration.
Shown in £’000s
Executive director
Lawrence Stroll3
Salary
Benefits
Pension
Total
fixed
Annual
bonus1
LTIP
Total
variable
Total
Year to 31 December 2020
£1 (one)
£1 (one)
Tobias Moers4
Year to 31 December 2020
354
48
37
439
142
n/a
Kenneth Gregor5
Year to 31 December 2020
224
7
24
255
67
n/a
Former executive directors
Dr Andy Palmer6
Year to 31 December 2020
417
Year to 31 December 2019
1,200
Mark Wilson7
Year to 31 December 2020
Year to 31 December 2019
135
425
14
26
4
23
44
127
475
1,353
14
45
153
493
–
–
–
–
n/a
n/a
n/a
n/a
Prior
company
incentive
buyout2
Total
£1 (one)
–
–
–
–
–
–
581
901
1,482
322
–
322
475
1,353
153
493
–
–
–
–
475
1,353
153
493
Notes:
1. The 2020 annual bonus was limited to 20% of normal maximum, with only the non-financial element of bonus operated, and payments are pro-rata for
period of service and will be delivered 50% (net) in deferred shares, as detailed on page 68
2. As compensation for incentives he forfeited on leaving his previous employer, Tobias Moers received a cash payment of €500,000 on joining and will
receive a further €500,000 on 1 August 2021 – the full amount has been recognised in 2020, his year of appointment. The buyout is subject to clawback
provisions should Tobias leave the Company under certain circumstances and full details are set out on page 74
3. Lawrence Stroll became Executive Chairman on 20 April 2020, and elected to receive a nominal salary only, of £1 per annum and receives no other
elements of remuneration
4. 2020 remuneration for Tobias Moers relates to the period since joining, 1 August to 31 December 2020
5. 2020 remuneration for Kenneth Gregor relates to the period since joining, 22 June to 31 December 2020
6. 2020 remuneration for Andy Palmer relates to the period 1 January to 25 May 2020, when he stepped down from the Board, full details of all final payments
agreed with Andy Palmer are shown on page 75
7. 2020 remuneration for Mark Wilson relates to the period 1 January to 30 April 2020, when he stepped down from the Board, full details of all final
payments agreed with Andy Palmer are shown on page 75
SALARY (AUDITED)
Tobias Moers’s salary from date of appointment was £850,000 and Kenneth Gregor’s was £425,000. These salaries reflect
the experience both executives have as proven talented automotive leaders and, although appear high in a UK FTSE250
context, were set at these levels to secure the individuals with the skills the business requires to deliver the turnaround of the
business to achieve its full potential. These salaries are considered to be appropriate by the Committee and are supported by
the Executive Chairman. No increases will be applied to these salaries during 2021.
In his role as Executive Chairman, Lawrence Stroll has elected to receive a nominal salary only, of £1 per annum and
receives no other elements of remuneration.
Andy Palmer and Mark Wilson did not receive any increase to their salaries during 2020 and these were £1,200,000 and
£425,000 respectively as at the date they stepped down from the Board.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
67
DIRECTORS’ REMUNERATION REPORT CONTINUED
PENSION (AUDITED)
Each Executive Director receives a cash allowance in lieu of participation in the defined contribution scheme. They receive
an allowance of 10.6% of salary, which is the maximum of 12% of salary with a deduction for an amount equal to the
employer’s National Insurance contribution.
As disclosed in our Remuneration Policy, the Executive Directors’ pension allowances are in line with the majority of
employees. The maximum level of employer pension contribution throughout the organisation is the same regardless of
seniority at 12% of salary (a defined benefit scheme was operated pre-2011).
No Director has a prospective entitlement to receive a defined benefit pension.
ALLOWANCES AND BENEFITS (AUDITED)
FY 2020
Shown in £’000s
Tobias Moers
Kenneth Gregor
Former executive directors
Dr Andy Palmer
Mark Wilson
ANNUAL BONUS
Car allowance
and personal
mileage
Life
assurance
Insurance
(private
medical and
travel)
5
4
7
2
3
2
7
1
2
1
1
1
Relocation
allowance
38
Total
48
7
14
4
ANNUAL BONUS OUTCOMES FOR FY 2020 (AUDITED)
As detailed in the Committee Chair’s letter, given the unprecedented uncertainty and change faced during 2020 (both specifically
for Aston Martin and externally due to COVID-19), the Committee decided to delay discussions to determine an approach
to 2020 incentives and so no annual bonus or LTIP arrangements were put in place for the senior population at the start of
the year (which would otherwise have been the normal timing). Once the new leadership team and an updated business
plan were established, the Committee were able to determine the most appropriate approach to annual bonus and LTIP for
2020. The Remuneration Committee were mindful that any approach must be appropriate in the context of 2020 as an
unprecedented year and the actions taken in relation to the wider employee population, including the organisational
restructure programme and the furloughing of employees during the year (due to the pandemic).
The Committee decided that no payment would be made against the element of bonus based on financial measures (80% of
the total opportunity), therefore limiting any payment to 20% of the maximum, subject to performance against a range of
strategic objectives. The Committee considered it important to operate some form of annual bonus for 2020, to incentivise
and recognise the significant efforts of the senior team (including the new CEO and CFO since they joined Aston Martin) in
a challenging year of business turnaround and the Executive Chairman shared the Committee’s view. This approach allowed
specific objectives that were crucial to the delivery of the business plan and turnaround programme to be incentivised, those
which the CEO and CFO were directly accountable for during their period of 2020 service (as set out below).
Performance measure
2020 approach
Financial measures (80%) No payment to be made for FY 2020
CEO strategic objectives
(20%)
(1) Secure strategic technology agreement with
Mercedes-Benz AG
(2) De-stocking of dealer network to be achieved in-line
with target value
(3) Organisational restructure cost reduction – by
December 2020 Board meeting, provide set-up and
first estimate of cost savings for turnaround and
restructure of whole Company
2020 achieved
N/A
(1) Announced 27 October 2020
(2) Destocked GT/Sport dealer inventory, with
dealer GT/Sport stock levels down to less
than half the 2020 opening position by
31 December 2020, ahead of targets set
(3) Delivered at 4 December 2020 Board
meeting
CFO strategic objectives
(20%)
(1) Execution of refinancing (mezzanine debt-raise) to
(1) Refinancing of debt announced
required level by FY 2020 year-end
(2) Execution of revolving credit facility credit facility
with 5 banks to required level by FY 2020 year-end
(3) Organisational restructure cost reduction – by
December 2020 Board meeting, provide set-up and
first estimate of cost savings for turnaround and
restructure of whole Company
27 October 2020, transactions concluded
14 December 2020
(2) Updated RCF announced
27 October 2020, transactions concluded
14 December 2020
(3) Delivered at 4 December 2020 Board
meeting
68
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
DIRECTORS’ REMUNERATION REPORT CONTINUED
The Committee considered the bonus outcome for 2020 and determined that the strategic objectives as set out above had
been met in full and so 20% of bonus would be paid (pro-rata for period of 2020 service). As both the CEO and CFO are
new to the business, they are yet to meet their shareholding guideline and so 50% of the net 2020 bonus payment will be
delivered in deferred shares.
In determining this outcome, the Committee noted that the rest of the senior team was eligible to receive up to 20% of their
2020 bonus and all non-management employees would be eligible to receive 100% of their contractual annual bonus for
FY 2020.
Annual bonus for FY2020
Tobias Moers
Kenneth Gregor
*
Pro-rata for period of 2020 service
Maximum
bonus
opportunity
(% of salary)
200%
150%
Performance
measures/
targets
Strategic
objectives
(see above)
Level of 2020
achievement
Met in full
Met in full
2020 bonus
payment
(% of
maximum)
20%
20%
2020 bonus
payment
(% of salary)
2020 bonus
payment*
(£’000s)
40%
30%
£142
£67
Dr Andy Palmer and Mark Wilson did not participate in the FY 2020 annual bonus plan and so no 2020 annual bonuses
were paid to the former executive directors.
ANNUAL BONUS FOR FY 2021
The Committee has introduced a Group scorecard of performance measures for the 2021 annual bonus to better reflect
annual progress on our new business plan and latest KPIs. This Group scorecard will be cascaded throughout the Company
to apply to annual bonus for all employees, providing strong alignment of focus and a ‘One Team’ approach. For 2021, the
scorecard will be weighted 80% on financial measures (including a 50% weighting on Adjusted EBITDA, 20% on Free Cash
Flow and 10% on Wholesale volumes) and 20% on Quality performance. The Committee believes these are the right
measures to make annual progress towards delivering our long-term strategy. The new Group KPI scorecard is set out below,
the actual targets remain commercially sensitive and will be disclosed retrospectively in the 2021 DRR, when the 2021
performance year is complete.
GROUP KPI SCORECARD TO APPLY TO 2021 ANNUAL BONUS
Area
Profit
Cash
Volumes
Quality
Measure
Weighting
Adjusted
EBITDA
50%
Free Cash Flow
(FCF)
Wholesale
volumes
In-house quality
External quality
20%
10%
20%
The Committee will continue to have the discretion to adjust bonus outcomes to ensure they are appropriate and reflect
underlying business performance/ any other relevant factors.
LONG-TERM INCENTIVE PLAN
The following section sets out details of:
• 2020 LTIP awards granted during FY 2020
• Approach to 2021 LTIP awards
2020 LTIP AWARDS GRANTED DURING FY 2020 (AUDITED)
As per the 2020 annual bonus, the 2020 LTIP grant was delayed, with the Remuneration Committee determining an
approach and approving the 2020 LTIP grant at the October 2020 meeting, with input from the new leadership team and an
updated business plan in place. The LTIP awards were then granted at the first opportunity post this approval, following the
General Meeting held on 4 December 2020 and on the first dealing day of the consolidated shares (which was
14 December 2020).
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
69
DIRECTORS’ REMUNERATION REPORT CONTINUED
The table below summarises the LTIP share awards that were granted to the Executive Directors during FY 2020.
2020 LTIP SHARE AWARDS
FY 2020
Tobias Moers
Kenneth Gregor
Type of award
Basis of award
Shares
awarded
LTIP share
award
300% of salary
211,618
200% of salary
70,539
Face value
at grant
(£’000s)
£2,550
£850
Notes:
1. The LTIP shares were granted on 14 December 2020 and will vest subject to the performance conditions and vesting schedule outlined below
2. Awards were granted in the form of nil-cost options
3. The face value of each award was calculated using the 3-month average price prior to the date of grant, multiplied by 20 to reflect the share consolidation
(£12.05)
4. Adjusted EBITDA will be assessed over three financial years to 31 December 2022 and TSR will be measured over a three-year period from the date of grant
to 13 December 2023
5. Subject to performance, the element of awards subject to EBITDA performance will vest following the announcement of results for 2022 (early March 2023)
and the element of awards subject to relative TSR performance will vest three years from grant, following the Remuneration Committee’s determination of
the performance outcome
6. The CEO and CFO will be required to hold at least 75% of any shares that vest (net of tax) until they have met their shareholding guidelines under the
shareholding policy
Whilst the LTIP design has been agreed, the Remuneration
Policy allows a degree of flexibility around a number of
the LTIP design elements. This flexibility allows the
Committee to determine the most appropriate approach
to the performance measures, targets, ranges and payout
schedules ahead of each annual award, to align to the latest
business plan.
The Committee selected Adjusted EBITDA as the most
appropriate measure of profit for the 2020 LTIP, given
market and internal focus on this key metric, which is now
used to manage the business. The Committee believes strong
performance in Adjusted EBITDA is key to delivering strong
shareholder returns. The Adjusted EBITDA targets were
carefully calibrated based on Aston Martin’s latest business
plan and external expectations. The range was set to be
stretching (extremely so at the maximum vesting level) yet
motivating in the context of our business plan and the
uncertainty in the current environment. Total shareholder
return (TSR) was selected as a second measure, recognising
the importance of shareholder alignment and also the
self-calibrating nature of TSR as an objective measure of
performance, particularly in a period of uncertainty. TSR will
be measured on a relative basis, against a select group of
luxury companies, which aims to incentivise elevation of the
Aston Martin brand, by out-performance of these high-end
luxury companies. Ultimately, the successful delivery of our
business plan and strategy (detailed on pages 14 to 15) will
be reflected in our Adjusted EBITDA and TSR performance.
As detailed in the Committee Chair’s letter, the Committee
gave considerable thought and discussed in detail the
appropriate LTIP award levels to grant to the CEO and CFO,
given the external environment, the performance of the
Company both in terms of financial outcomes and share
price, and the need to incentivise new leadership and
commitments made on appointment. With support from the
Executive Chairman, the Committee decided to grant LTIP
awards of 300% and 200% of salary to the CEO and CFO
respectively (at a maximum) to recognise and incentivise the
size of the task and effort required from these new
executives to turnaround the business. The Committee was
mindful of the need to balance evolving governance trends
with the need to recognise, incentivise and reward the
critical periods of the business turnaround with 3-year
rolling LTIP awards. After careful consideration and with the
full support of the Executive Chairman, the Committee
decided that no self-standing 2-year post vesting holding
period would be applied to the award but rather the open
ended requirement to hold at least 75% of any LTIP shares
that vest (net of tax) until the CEO and CFO have met their
shareholding guidelines will apply.
The 2020 LTIP awards are subject to the performance
conditions and malus and clawback provisions as detailed
below, and these are in line with the Remuneration Policy
approved in 2019.
2020 LTIP PERFORMANCE MEASURES AND TARGETS
Adjusted EBITDA
(£m in FY22)
(80% of award)
Threshold
Stretch
Maximum
2020 LTIP targets
200
300
350
Relative TSR
(vs. luxury peers)
(20% of award)
Threshold
Rank 6th (median)
Maximum
Rank 3rd or above
(80th percentile)
Vesting*
(as a % of
maximum)
20%
80%
100%
20%
100%
* Vesting will be on a straight-line basis between each of threshold and
stretch, and stretch and maximum for the EBITDA element and threshold
and maximum for the TSR element
70
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
DIRECTORS’ REMUNERATION REPORT CONTINUED
• TSR performance will be measured on a ranked basis
2021 LTIP PERFORMANCE MEASURES AND TARGETS
Adjusted EBITDA
(£m in FY23)
(80% of award)
Threshold
Stretch
Maximum
2020 LTIP targets
300
425
500
Relative TSR**
(vs. luxury peers)
(20% of award)
Threshold
Rank 6th (median)
Maximum
Rank 3rd or above
(80th percentile)
Vesting*
(as a % of
maximum)
20%
80%
100%
20%
100%
* Vesting will be on a straight-line basis between each of threshold and
stretch, and stretch and maximum for the EBITDA element and threshold
and maximum for the TSR element
** TSR peers as per 2020 LTIP, detailed at the top left of this page
• The Remuneration Committee retains discretion to adjust
the vesting levels to ensure they reflect underlying
business performance and any other relevant factors to
ensure that the value at vesting is fully reflective of
the performance.
Performance period
• Adjusted EBITDA will be measured over three financial
years to 31 December 2023.
• Relative TSR will be measured over a three-year period
from grant.
The CEO and CFO will be required to hold at least 75% of
any shares that vest (net of tax) until they have met their
shareholding guidelines under the shareholding policy.
SHARE INTERESTS AND SHAREHOLDING GUIDELINES
(AUDITED)
The current CEO and CFO are subject to shareholding
guidelines of 300% and 200% of salary respectively, which
drives long-term alignment with investors.
The following table sets out the total beneficial interests of
the executive directors (and their connected persons) in
ordinary shares of Aston Martin Lagonda Global Holdings
plc as at 31 December 2020 (or at the date of stepping
down), as well as the status against the shareholding
guidelines. The table also summarises conditional interests
in share or option awards.
Having only recently joined the Company during FY 2020,
the CEO and CFO were yet to achieve their shareholding
guidelines as at 31 December 2020. As mentioned above,
50% of the net 2020 bonus payment will be delivered in
deferred shares to both the CEO and CFO and these shares
will count towards their respective guidelines.
against the following luxury companies: Burberry, Capri
Holdings, Compagnie Financiere Richemont, Ferrari,
Hermes International, Kering, LVMH, Moncler, Prada and
Ralph Lauren.
• The Remuneration Committee retains discretion to adjust
the vesting levels to ensure they reflect underlying
business performance and any other relevant factors to
ensure that the value at vesting is fully reflective of the
performance delivered and executives do not receive
unjustified windfall gains.
MALUS AND CLAWBACK:
• Malus and clawback provisions will be operated at the
discretion of the Remuneration Committee in respect of
awards granted under the LTIP where it considers that
there are exceptional circumstances. Such exceptional
circumstances may include serious reputational damage, a
failure of risk management, an error in available financial
information, which led to the award being greater than it
would otherwise have been or personal misconduct.
• Clawback may be applied for a period of up to three years
for any LTIP awards.
The former executive directors, Dr Andy Palmer and Mark
Wilson, were not granted awards under the LTIP in FY 2020.
2021 LTIP AWARDS
The Committee has decided to apply the same performance
measures and weightings for 2021 LTIP awards as those
recently determined for the delayed grant of the 2020 LTIP.
The targets have again been carefully calibrated based on
Aston Martin’s business plan and external expectations and
are considered stretching (extremely so at the top end) yet
motivating in the context of our business plan and the
current environment. It is anticipated that 2021 awards will
be granted in May 2021, with awards at the following levels:
• Tobias Moers (CEO) – 300% of salary
• Kenneth Gregor (CFO) – 200% of salary
These award levels have been determined to recognise and
incentivise the size of the task and effort required from these
executives to turnaround the business. The Committee gave
considerable thought to the appropriate levels and while
recognising the 2020 LTIP awards were also granted at these
levels, in-light of the need to incentivise performance over
the new 3-year period and the challenging business plan
and turnaround programme, decided to grant 2021 LTIP
awards at these levels. The Adjusted EBITDA targets for the
new period were carefully calibrated based on the latest
business plan and external expectations and are stretching
(extremely so at the maximum vesting level) yet motivating
in the context of our business plan and the continued
uncertainty in the current environment. As for 2020 awards,
no self-standing 2-year post vesting holding period will
be applied for 2021 LTIP awards (as explained in the
previous section).
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
71
DIRECTORS’ REMUNERATION REPORT CONTINUED
As at 31 December 2020
(or at the date of stepping down)
Shares owned
outright
Shares vested
but subject to
lock-up
arrangements1
Total shares
owned outright
or vested2
As a % of
salary3
Shareholding
guideline
(as % of salary)
Tobias Moers
Kenneth Gregor
Lawrence Stroll5
Former executive directors
Dr Andy Palmer
Mark Wilson
4,315
–
24,799,964
–
–
–
4,315
10.2%
–
24,799,964
–
n/a
92,421
156,832
2,712
21,956
249,253
24,668
146.4%
66.5%
300%
200%
800%
300%
LTIP award
shares unvested
and subject to
performance4
211,618
70,539
n/a
13,106
3,094
Guideline
met?
No
No
No
No
Notes: All numbers of shares and share prices have been adjusted for December 2020 consolidation
1. These vested shares were granted under the Legacy IPO LTIP (details of which can be found in the 2018 DRR) and remained subject to lock-up
arrangements as at date of stepping down from the Board
2. There have been no changes in the period up to and including 24 February 2021
3. Based on the closing share price on 31 December 2020 of £20.09 for Tobias Moers and on date of stepping down from the Board for Dr Andy Palmer
(£7.09 on 25 May 2020) and Mark Wilson (£11.46 on 30 April 2020) (adjusted to reflect the December 2020 1 for 20 share consolidation as appropriate)
4. These shares were granted under the 2020 LTIP award for Tobias Moers and Kenneth Gregor and under the 2019 LTIP award for Dr Andy Palmer and Mark
Wilson (the 2019 LTIP awards lapsed in full upon their leaving the Company)
5. The number of shares shown for Lawrence Stroll includes both direct and indirect interests
TSR PERFORMANCE GRAPH AND CEO REMUNERATION
The Company’s shares started trading on the London Stock Exchange’s main market for listed securities on 8 October 2018.
The graph below shows the TSR performance of £100 invested in the Company’s shares since listing, compared to the FTSE
250 index which has been chosen because the Company has been a constituent of this index since listing.
TSR VS. THE FTSE250
120
100
80
60
40
)
£
(
E
U
L
A
V
20
Oct
2018
Dec
2018
Feb
2019
April
2019
Jun
2019
Aug
2019
Oct
2019
Dec
2019
Feb
2020
Apr
2020
Jun
2020
Aug
2020
Oct
2020
Dec
2020
ASTON MARTIN LAGONDA
FTSE 250
The table below shows the total remuneration earned by the incumbent CEO over the same period, along with the
percentage of maximum opportunity earned in relation to each type of incentive. The total amounts are based on the same
methodology as used for the single figure of total remuneration for FY 2020 on page 67.
CEO TOTAL REMUNERATION
Dr Andy Palmer (AP, CEO to 25 May 2020), Tobias Moers (TM, CEO from 1 August 2020)
FY
Total remuneration (£’000s)
Bonus (% of maximum)
LTIP3 (% of maximum)
20181
(AP)
407
0%
n/a
20182
(AP)
1,347
0%
n/a
2019
(AP)
1,353
0%
n/a
2020
(AP)
476
0%
n/a
2020
(TM)
1,482
20%
n/a
Notes:
1. FY 2018 remuneration shown is for the period 8 October to 31 December 2018, annual bonus was restated to zero as set out in the 2019 DRR
2. The amounts shown for FY 2018 in the second column have been annualised, as if the Remuneration Policy operated since IPO had been in place for the
full year (as disclosed in the 2018 DRR, with bonus restated to zero)
72
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
DIRECTORS’ REMUNERATION REPORT CONTINUED
DIRECTOR REMUNERATION RELATIVE TO EMPLOYEES
The table below compares the total salary/ fees, benefits and bonus received by each Director during FY 2020 compared to
the prior year. The year-on-year change is also shown for the UK employee population. For comparison purposes, only
Directors who had periods of service in both 2019 and 2020 have been included and 2020 amounts have been adjusted to
reflect a full year equivalent to enable a meaningful reflection of year-on-year change.
Executive Directors
Non-Executive Directors
Year-on-year
change (%)
Average
employee
Dr Andy
Palmer
Mark
Wilson
Amr
Abouel
Seoud
Lord
Matthew
Carrington
Peter
Espenhahn
Mahmoud
Samy
Mohamed
El Sayed
Penny
Hughes
Dante
Razzano
Richard
Solomons
Imelda
Walsh
Professor
Tensie
Whelan
Salary/fees
+3%
-34%
-17%
-34%
-17%
-17%
-37%
-27%
-34%
-35% -35%
-29%
Bonus
Benefits
0%
0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Notes:
1. The comparator group includes all UK employees. This group represents the majority of Aston Martin employees and is the same group used for the pay
ratio reporting below.
2. For the comparator group of employees, the salary year-on-year change is shown for non-management employees only and includes the annual salary
review from 1 January 2020 but excludes any additional changes made in the year, for example on promotion. Management employees did not receive a
general salary increase during 2020. The decrease to executive director salaries year-on-year reflects the waiver during April, May and June 2020.
3. The decrease to NED fees year-on-year reflects both the reduction in fee levels applied from 1 January 2020 and the waiver during April, May and June 2020.
4. The year-on-year change in bonus is also shown for non-management employees only – this population will be eligible to receive their contractual annual
bonus payments in respect of 2020. Management bonuses were zero in 2019 and will be limited to 20% of opportunity for 2020, including for the new
CEO and CFO as detailed on page 68 (and note zero bonus payment to the prior CEO and CFO for both 2019 and 2020)
5. For benefits, there were no changes to benefit policies or levels during the year
6. The increase in the value of benefits shown for the CEO reflects an increase in the cost of the same benefits.
The Committee considers pay ratios as one of many
reference points when considering remuneration.
Throughout Aston Martin, pay is positioned to be fair and
market competitive in the context of the relevant talent
market for each role.
RELATIVE IMPORTANCE OF SPEND ON PAY
FOR FY 2020
The table below sets out the total payroll costs for all
employees for FY 2020 compared to distributions to
shareholders by way of dividend and share buyback.
Adjusted EBITDA is also shown as context.
FY 2020
FY 2019
Adjusted EBITDA
£m
(70.1)
118.9
Distributions to shareholders
£m
% change
% change
n/a
–
–
–
Payroll costs for all employees
£m
149.5
156.7
% change
(4.6%)
CEO PAY RATIOS
The ratios, set out in the table below, compare the total
remuneration of the incumbent CEO (as included in the
single figure table on page 67) to the remuneration of the
median UK employee as well as employees at each of the
lower and upper quartiles. Due to the change of CEO during
the year, the FY 2020 values are derived from the total
single figure of remuneration table on page 67 for the
periods that each of Tobias Moers and Andy Palmer held the
CEO role (and added together).
CEO pay ratios
(Options A)
FY 2020
FY 2019
25th
percentile
(P25)
53 to 1
34 to 1
Median
(P50)
45 to 1
29 to 1
75th
percentile
(P75)
37 to 1
24 to 1
The ratios are calculated using ‘option A’ as set out in the
disclosure regulations. The employees at the lower quartile,
median and upper quartile (P25, P50 and P75) were
determined based on total remuneration for FY 2020 using a
calculation approach consistent with that used for the
incumbent CEO in the single figure table on page 67. The
Committee chose to use option A on the basis that it would
provide the most accurate approach to identifying the
median, lower and upper quartile employees. The
calculation was undertaken on a full-time equivalent basis,
adjusting pay for part-time workers to a 39-hour week
equivalent. The total remuneration in respect of FY 2020 for
the employees identified at P25, P50 and P75 was £37k,
£43k, and £50k, respectively. The base salary for FY 2020
for the employees at P25, P50 and P75 was £35k, £41k and
£53k respectively.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
73
DIRECTORS’ REMUNERATION REPORT CONTINUED
SERVICE AGREEMENTS
The table below sets out information on service agreements
for the executive directors.
Executive Director Title
Effective date
of service
agreement
Notice period to
and from the
Company
Lawrence Stroll Executive Chairman 20 April
2020
Tobias Moers
Chief Executive
Officer
Kenneth Gregor Chief Financial
Officer
25 May
2020
20 June
2020
Mr Stroll’s
appointment is
terminable in
accordance with
the Yew Tree
Relationship
Agreement
12 months
12 months
The service agreements for Executive Directors are available
for inspection by shareholders at the registered office of
the Company.
EXTERNAL APPOINTMENTS
It is recognised that Non-Executive Directorships can
provide a further level of experience that can benefit the
Company. As such, Executive Directors may usually take up
one Non-Executive Directorship (broadly equivalent in
terms of time commitment to a FTSE 350 Non-Executive
Directorship role) subject to the Board’s approval as long as
there is no conflict of interest. A Director may retain any fee
received in respect of such Non-Executive Directorship.
Neither the CEO nor the CFO has any Non-Executive
Directorships.
FURTHER INFORMATION ON REMUNERATION
FOR NEW EXECUTIVE DIRECTORS
REMUNERATION FOR THE CEO (TOBIAS MOERS)
Tobias Moers’s 2020 remuneration for his role as CEO (from
1 August 2020) is detailed below:
• Base salary of £850,000 reflecting his experience as an
exceptionally talented automotive professional and a
proven business leader with a strong track record which
will be invaluable to the delivery of our strategy for the
business to achieve its full potential
• An annual cash allowance of £50,000 for a period of 5
years as relocation assistance (the Company will also meet
tax payable on this allowance)
• A pension allowance of 10.6% of salary (which is the
maximum of 12% of salary with a deduction for an
amount equal to the employer’s NI) and other non-cash
benefits in accordance with the Remuneration Policy
• Annual performance-based bonus opportunity of up to
200% of salary, pro-rata for period of employment in 2020
• Eligible to participate in the performance-based LTIP and
a 2020 award of 300% of salary was granted as detailed
on page 70
Buyout award
In order to secure Tobias Moers’s appointment and to allow
him to join Aston Martin at the earliest opportunity, and as
disclosed on appointment, the Committee agreed to buyout
awards forfeited on leaving his previous employer.
Accordingly, he was awarded €1,000,000, payable in cash
50% on joining Aston Martin and 50% on the first
anniversary of his start date, subject to continued
employment. In determining the value of this award, the
Committee considered the value at that time of the
outstanding awards that Tobias would forfeit, the relevant
performance conditions and historical performance
outcomes. The Committee considers the buyout award to be
appropriate in light of the terms of the awards forfeited. The
full value of this buyout award is included in the 2020 single
figure of remuneration table as although the second payment
is only payable in August 2021 and is subject to Tobias’s
continued employment, there are no other performance
conditions attached to it.
The buyout award is subject to clawback provisions in the
event that Tobias leaves the Company. Should he resign
during his first year of appointment, he would have to repay
the first 50% payment in full. Should he resign during his
second year of appointment, he would have to repay a
pro-rata amount of the second 50% payment, with the
repayable amount decreasing by 1/12 of the total of the
second payment for each complete additional month
worked before his resignation.
REMUNERATION FOR THE CFO (KENNETH GREGOR)
Kenneth Gregor’s 2020 remuneration for his role as CFO
(from 22 June 2020) is detailed below:
• Base salary of £425,000 reflecting his experience as a
seasoned financial professional with a strong leadership
track record gained from over 20 years in the automotive
industry
• A pension allowance of 10.6% of salary (which is the
maximum of 12% of salary with a deduction for an
amount equal to the employer’s NI) and other non-cash
benefits in accordance with the Remuneration Policy
• Annual performance-based bonus opportunity of up to
150% of salary, pro-rata for period of 2020 service
• Eligible to participate in the performance-based LTIP, and
a 2020 award of 200% of salary was granted as detailed
on page 70
74
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
DIRECTORS’ REMUNERATION REPORT CONTINUED
FURTHER INFORMATION ON REMUNERATION
FOR EXECUTIVE DIRECTORS WHO LEFT DURING
THE YEAR
REMUNERATION FOR THE PRIOR CEO (DR ANDY PALMER)
The single figure of remuneration table (on page 67) details
the remuneration Dr Andy Palmer received for the period of
2020 that he served as an executive director. He stepped down
as an executive director of the Company and as CEO on 25
May 2020. The following remuneration arrangements applied
in connection with the termination of Dr Palmer’s employment:
• Dr Palmer had a 12-month notice period which began on
25 May 2020. During his notice period he remains on
garden leave and as such will be paid his normal salary
and receive benefits.
• If Dr Palmer’s employment ends prior to the expiry of his
12-month notice period, he will receive a payment in lieu
of notice for his unserved notice period, calculated by
reference to his base salary in respect of any unserved
notice period, to be paid in equal monthly instalments
over the relevant period and to be reduced if Dr Palmer
were to find alternative employment within this period.
• Dr Palmer will not receive any bonus payment in respect
of any part of 2020 or for any unserved notice period.
• Dr Palmer’s 2019 LTIP award would lapse and he would
not be granted any award in respect of 2020.
• In respect of the shares that Dr Palmer held pursuant to
the grants he was made prior to the IPO under the Legacy
IPO LTIP, the terms of that plan treated him as ceasing
employment for a Good Reason so that all vested shares
which had not yet been released to him would be released
on their respective release dates. These shares were to be
released to him on subsequent anniversaries of the IPO as
follows: 347,026 shares released on 8 October 2020,
347,026 shares released on 8 October 2021 and 347,027
on 8 October 2022 (pre-December 2020 share
consolidation numbers). Dr Palmer is committed to hold
the shares acquired through the rights issue in April 2020
in respect of these shares on the same terms.
• It was agreed that Dr Palmer would maintain a
shareholding with a value of 150% of his base salary for
two years from the date he stepped down as a director.
• Dr Palmer would continue to be covered by the
Company’s D&O insurance and received a contribution
towards his legal advice of £5,000 plus VAT.
• No payments for loss of office were paid to Dr Palmer.
REMUNERATION FOR THE PRIOR CFO (MARK WILSON)
The single figure of remuneration table (on page 67) details
the remuneration Mark Wilson received for the period of 2020
that he served as an executive director. He stepped down as
CFO and as an executive director of the Company on 30 April
2020. Mr Wilson remained available to the Company to assist
with the transition in the period through to 30 June 2020.
The following remuneration arrangements applied in
connection with the termination of Mr Wilson’s employment:
• Mr Wilson continued to be paid salary and received
benefits as an employee in the period to 30 June 2020. In
line with other Executive Committee members, Mr Wilson
waived 20% of his base salary that he would otherwise
have received in that period.
• Mr Wilson was entitled to 12 months’ notice, and so he
received a payment in lieu of notice for his unserved
notice period calculated by reference to his base salary,
to be paid in equal monthly instalments over the period to
27 February 2021 and to be reduced if Mr Wilson were to
find alternative employment
• Mr Wilson would not receive any bonus payment in
respect of 2019 or any part of 2020.
• Mr Wilson’s 2019 LTIP award would lapse and he would
not be granted any award in respect of 2020.
• In respect of the shares that Mr Wilson held pursuant to
the grants he was made prior to the IPO under the Legacy
IPO LTIP, he was treated as an Intermediate Leaver and so
retained an entitlement to a time pro-rated number of
shares. These shares were to be released to him on
subsequent anniversaries of the IPO as follows: 41,927
shares released on 8 October 2020, 27,984 shares
released on 8 October 2021 and 20,989 shares released
on 8 October 2022 (pre-December 2020 consolidation
numbers). Mr Wilson committed to hold any shares
acquired through the rights issue in April 2020 in respect
of these shares on the same terms.
• Other than shares that he has forfeited under the Legacy
IPO LTIP, Mr Wilson was required to retain all those
shares in the Company that he held as at 30 June 2020 for
a period of two years until 30 June 2022.
• Mr Wilson would continue to be covered by the
Company’s D&O insurance and received a contribution
towards his legal advice of £5,000 plus VAT.
• No payments for loss of office were paid to Mr Wilson.
NON-EXECUTIVE DIRECTORS’ REMUNERATION
(AUDITED)
The Policy on remuneration for Non-Executive Directors is
set out in the 2018 DRR (which can be found in the Annual
Report FY 2018 at www.astonmartinlagonda.com)..
The table below sets out the single figure of total remuneration
received or receivable by the Non-Executive Directors in
respect of FY 2020 (and the prior financial year). As noted in
the Committee Chair’s letter, the Non-Executive Directors
waived 35% of their fees for a 3-month period from 1 April to
30 June 2020 and Michael di Picciotto waived his fee from
appointment to 31 December 2020.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
75
DIRECTORS’ REMUNERATION REPORT CONTINUED
Shown in £’000s
Non-Executive Directors
Amr AbouelSeoud
Year to 31 December 2020
Year to 31 December 20192
Lord Matthew Carrington
Year to 31 December 20203
Year to 31 December 2019
Peter Espenhahn
Year to 31 December 20204
Year to 31 December 2019
Michael de Picciotto5
Year to 31 December 2020
Bill Tame6
Year to 31 December 2020
Former Non-Executive Directors
Mahmoud Samy Mohamed Aly El Sayed
Year to 31 December 20207
Year to 31 December 20197
Penny Hughes
Year to 31 December 20208
Year to 31 December 2019
Dante Razzano
Year to 31 December 20209
Year to 31 December 20199
Peter Rogers
Year to 31 December 202010
Year to 31 December 2019
Richard Solomons
Year to 31 December 202011
Year to 31 December 2019
Imelda Walsh
Year to 31 December 20207,12
Year to 31 December 2019
Professor Tensie Whelan
Year to 31 December 202013
Year to 31 December 2019
Total fees1
55
83
71
85
71
85
0
39
50
85
77
350
19
93
10
83
34
135
29
115
21
75
Notes:
1. Total fees include basic fees and additional Committee Chair and membership fees
2. Amr AbouelSeoud was a member of the Remuneration Committee until 8 October 2019
3. Lord Carrington became Chair of the Remuneration Committee and a member of the Audit and Risk Committee and Nomination Committee on 23 May 2020
4. Peter Espenhahn became Chair of the Audit and Risk Committee and a member of the Remuneration Committee and Nomination Committee on 23 May 2020
5. Michael de Picciotto joined the Board on 24 April 2020 and elected to waive his fee for 2020
6. Bill Tame joined the Board and became a member of the Nomination Committee on 3 June 2020 and became a member of the Audit and Risk Committee
and Remuneration Committee on 16 September 2020
7. Penny Hughes stepped down from the Board and as Chair from 20 April 2020
8. Mahmoud Samy Mohamed Aly El Sayed was a member of the Audit Committee until 8 October 2019 and became a member of the Nomination Committee
from 8 October 2019. He stepped down from the Board from 12 November 2020
9. Dante Razzano was a member of the Remuneration Committee until 8 October 2019 and stepped down from the Board from 20 April 2020
10. Peter Rogers was a member of the Audit Committee until 8 October 2019 and sadly passed away in January 2020
11. Richard Solomons stepped down from the Board from 23 May 2020
12. Imelda Walsh stepped down from the Board from 23 May 2020
13. Tensie Whelan stepped down from the Board from 23 May 2020
76
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
DIRECTORS’ REMUNERATION REPORT CONTINUED
LETTERS OF APPOINTMENT
The Non-Executive Directors have letters of appointment.
All Non-Executive Directors’ appointments and subsequent
re-appointments are subject to annual re-election at the
AGM. Dates of the letters of appointment of the Non-
Executive Directors as at the date of this report are set out in
the table below.
n/a
Non-Executive Directors
Date of appointment Notice period
Amr AbouelSeoud
7 September 2018
3 months
Lord Matthew Carrington
8 October 2018
3 months
Peter Espenhahn
Robin Freestone
Richard Parry Jones
Michael de Picciotto
Antony Sheriff
Anne Stevens
Stephan Unger
8 October 2018
3 months
1 February 2021
3 months
1 February 2021
3 months
24 April 2020
1 month
1 February 2021
3 months
1 February 2021
3 months
1 February 2021
1 month
The terms and conditions of appointment for Non-Executive
Directors are available for inspection by shareholders at the
registered office of the Company.
REMUNERATION COMMITTEE IN FY 2020
COMMITTEE MEMBERSHIP
The following Directors served as members of the
Committee during FY 2020:
• Lord Matthew Carrington (Chair from 23 May 2020)
• Peter Espenhahn (from 23 May 2020)
• Bill Tame (from 16 September 2020)
• Imelda Walsh (until 23 May 2020, Chair until this date)
• Richard Solomons (until 23 May 2020)
COMMITTEE REMIT
The Committee’s Terms of Reference are published on
www.astonmartinlagonda.com.
In addition to setting the remuneration of the Executive
Directors, the Committee continues to directly oversee the
remuneration arrangements for the Executive Committee.
SUMMARY OF NON-EXECUTIVE DIRECTORS’ FEES
FOR FY 2021
The table below sets out the fee structure for the NEDs for
2021 (there are no changes to the fee levels that applied
in 2020).
NED role
Non-Executive Chair
of the Board*
Basic NED fee
SID fee
Committee Chair
Committee member
FY 2020 fee
(£’000s)
270
60
15
15
5
FY 2021 fee
(£’000s)
60
15
15
5
*
This was the annual fee for the Non-Executive Chair of the Board role and
was paid to Penny Hughes until she stepped down on 20 April 2020
On the same date, Lawrence Stroll became Executive Chairman and
elected to receive a nominal salary only, of £1 per annum and receives no
other elements of remuneration.
CHAIR AND NON-EXECUTIVE DIRECTOR
SHAREHOLDINGS (AUDITED)
The table below summarises the total interests of the Chair
and Non-Executive Directors (and their connected persons)
in ordinary shares of Aston Martin Lagonda Global Holdings
plc as at 31 December 2020 (or at the date of stepping
down, if earlier).
Non-Executive Directors
Amr AbouelSeoud2
Lord Matthew Carrington
Peter Espenhahn
Michael de Picciotto3
Bill Tame
Former Non-Executive Directors
Mahmoud Samy Mohamed Aly El Sayed4
Penny Hughes
Dante Razzano
Peter Rogers
Richard Solomons
Imelda Walsh
Tensie Whelan
Total number
of shares
owned1
116,324
–
131
769,285
–
196,477
1,500
1,315
–
131
131
–
Notes:
1. There have been no changes in the period up to and including 24
February 2021 and all shares are shown adjusted for the share
consolidation (of 14 December 2020)
2. Includes indirect interests through Venus Limited
3. The interests are those of a PCA, Saint James Invest SA which is also
interested in warrants over 28,353 shares
4. Includes indirect interests through MSY Limited
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
77
DIRECTORS’ REMUNERATION REPORT CONTINUED
SUMMARY OF MEETINGS
The Committee typically meets four to six times a year.
During FY 2020, the Committee met five times and the agenda
items discussed at these meetings are summarised below.
REMUNERATION VOTING RESULTS
The table below shows the results of the shareholder votes
at the 2020 AGM on the DRR and at the 2019 AGM on the
Directors’ Remuneration Policy.
Early February • Review of draft FY 2019 DRR
• Consideration of 2020 remuneration approach
Late February • Remuneration-related terms for outgoing CFO
• FY 2019 annual bonus outcome
• Consideration of FY 2020 remuneration
approach
• Impact of rights issue on 2019 LTIP
• Gender Pay Gap report
• Approval of FY 2019 DRR
July
• Executive Committee (non-Board level) leavers
AGM voting results
2020 AGM:
To approve the DRR
for the year ending
31 December 2019
2019 AGM:
To approve the Directors’
Remuneration Policy
Votes
for
Votes
Votes
against
withheld
990,194,165
(99.98%)
163,423
(0.02%)
295,139
198,266,590
(93.39%)
14,022,935
(6.61%)
299
– remuneration-related terms
• Update on 2020 incentives – proposed timing
• Update on organisational restructure and
COVID-19 response
APPROVAL
This report has been approved by the Board and signed on
its behalf by:
October
• Executive Committee (non-Board level) changes
• Approval of 2020 incentive approach (annual
bonus and LTIP)
December
• Update on 2021 remuneration priorities and
2020 DRR reporting
LORD MATTHEW CARRINGTON
CHAIR, REMUNERATION COMMITTEE
• Broader employee reward overview
24 February 2021
In addition, the full Board considered and approved
remuneration arrangements for the incoming CEO and
outgoing CEO in May 2020 and for the incoming CFO in
June 2020.
ADVICE TO THE COMMITTEE
The Chair of the Board and members of the management
team are invited to attend Committee meetings where
appropriate, except when their own remuneration is being
discussed. During the year the Executive Chairman and
former Chair of the Board, current and former CEOs, current
and former CFOs, VP and General Counsel, Company
Secretary, Director of Reward and former Chief HR Officer
attended meetings at the Committee’s invitation.
The Committee has received independent advice on
remuneration from Willis Towers Watson (WTW). WTW is
a member of the Remuneration Consultants’ Group and,
as such, voluntarily operates under the Remuneration
Consultants’ Group Code of Conduct in relation to executive
remuneration consulting in the UK. The Committee is
satisfied that the advice provided by WTW is independent
and objective. WTW has no other connection with the
Company. Total fees received by WTW in relation to
remuneration advice provided that materially assisted the
Committee during FY 2020 were £27,250, which had been
charged on a time spent basis.
Freshfields also provided advice to the Committee in relation
to the operation of the Company’s share plans, employment
law considerations and compliance with legislation.
78
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
DIRECTORS’ REPORT
DIRECTORS’ REPORT
ABOUT THE DIRECTORS’ REPORT
The Directors’ Report comprises the Governance section
(pages 41 to 78), the Directors’ Report (pages 79 to 84) and
the Shareholder Information section (page 150). Other
information that is relevant to the Directors’ Report, and
which is incorporated by reference into the Directors’
Report, is disclosed as follows.
• Likely future developments of the Company (throughout
the Strategic Report)
• Human rights (page 27)
• Greenhouse gas emissions (pages 25 and 26)
• Relationship with employees (pages 18 to 21)
• Disabled persons (page 79)
• Health and safety (page 21)
• Financial instruments (note 23)
• s.172 disclosure (page 22)
• Post balance sheet events (note 32)
STRATEGIC REPORT
Aston Martin Lagonda Global Holdings plc is required by
the Companies Act 2006 to prepare a Strategic Report that
includes a fair review of the Company’s business, the
development and performance of the Company’s business
during the period, the position of the Company at the end of
year ended 31 December 2020, and a description of the
principal risks and uncertainties faced by the Company.
The Strategic Report on pages 1 to 39 is incorporated
by reference and shall be deemed to form part of this
Directors’ Report.
RESULTS AND DIVIDEND
Revenue from the continuing business during the period
amounted to £611.8m (2019*: £980.5m). A review of the
Group’s consolidated results is set out from page 96.
*
2019 was restated see note 2 of the Financial Statements for details.
It is the Directors’ intention to retain the Group’s cash flow
to finance growth and to focus on delivery of its new
business plan. The Directors intend to review, on an
ongoing basis, the Company’s dividend policy and will
consider the payment of dividends as the Group’s strategy
matures, depending upon the Group’s free cash flow,
financial condition, future prospects and any other factors
deemed by the Directors to be relevant at the time.
GOING CONCERN
The going concern statements for the Group and Company
are set out on pages 101 and 148 of the Financial Statements
and are incorporated by reference and shall be deemed to
be part of this Report.
RESEARCH AND DEVELOPMENT
The Group spent £182m (2019: £226m) on research
and development during the year. See note 4 to the
Financial Statements.
EQUAL OPPORTUNITIES AND EMPLOYMENT OF
DISABLED PEOPLE
The Group has policies on equal opportunities and the
employment of disabled people which, through the
application of fair employment practices, are intended
to ensure that individuals are treated equitably and
consistently regardless of age, race, creed, colour, gender,
marital or parental status, sexual orientation, religious beliefs
and nationality.
Applications for employment by disabled persons are always
fully considered, bearing in mind the respective aptitudes
and abilities of the applicant concerned. In the event of
members of staff becoming disabled, every effort is made to
ensure their employment with the Group is continued and
that the appropriate training is arranged. It is the policy of
the Group that the training, career development and
promotion of a disabled person should, as far as possible, be
identical to that of a person who does not have a disability.
HEALTH AND WELLBEING
The health and wellbeing of employees is central to
operating an effective and successful business. The Group
also relies on the health and stability of the communities in
which it operates. The Group recognises its responsibility
and the opportunity to make a positive contribution and is
actively engaged with local areas to foster a sense of
partnership with the Group.
The Group continues to educate employees on its approach
to, and specific requirements of, human rights in business
operations. In 2020, no human rights violations within the
Group were reported, nor were any relevant reports received
regarding the supply network.
The health and safety of its workforce, visitors and the local
community is of paramount importance. The Group aims to
be a centre of excellence and for the Aston Martin Health
and Safety Management System to be aligned with best
practice within the automotive industry. Further details are
set out on page 21.
TAX STRATEGY
The Group is committed to complying with its statutory
obligations in relation to the payment of tax including full
disclosure of all relevant facts to the appropriate tax
authorities. In managing its tax affairs, the Group recognises
its responsibilities as a taxpayer and the need to protect the
corporate reputation inherent in the brand.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
79
DIRECTORS’ REPORT CONTINUED
The Board has ultimate responsibility for the Group’s tax
strategy although the day-to-day management rests with the
Executive Committee which comprises the senior
operational personnel of the Group.
The Chief Financial Officer is the Executive Committee
member with ultimate responsibility for tax matters and is
the Senior Accounting Officer of the Group. The Chief
Financial Officer advises the Board on the tax affairs and
risks of the Group to ensure:
• the proper control and management of tax risk;
• the tax position is planned in line with the Group’s
strategic objectives;
• the tax charge is correctly stated in the statutory accounts
and tax returns; and
• all tax compliance is completed in a timely manner to
HMRC and other tax authorities.
Further information on the Group’s tax strategy is available
on the Company’s website.
ARTICLES OF ASSOCIATION
The Articles of Association set out the internal regulation of
the Company and cover such matters as the rights of
shareholders, the appointment or removal of Directors, and
the conduct of the Board and general meetings. Copies are
available from the Company Secretary. In accordance with
the Articles of Association, directors can be appointed or
removed by the Board or by shareholders in general
meeting. Amendments to the Articles of Association must be
approved by at least 75% of those voting in person or by
proxy at a general meeting of the Company. Subject to UK
company law and the Articles of Association, the directors
may exercise all the powers of the Company, and may
delegate authorities to committees, and may delegate
day-to-day management and decision making to individual
Executive Directors. Details of the Board Committees can be
found on page 47.
The rules governing the appointment and removal of a
Director are set out in the Articles of Association of the
Company. Specific details relating to the significant
shareholder groups and their right to appoint directors are
set out on page 82.
DIRECTORS
The names and details of the Directors as at the date of this Report are set out on pages 41 to 43.
The names of the individuals who became or ceased to be Directors during the year ended 31 December 2020 are set
out below.
Name
Laurence Stroll (Executive Chairman)
Tobias Moers (CEO)
Kenneth Gregor (CFO)
Michael de Picciotto
William Tame
Penny Hughes
Dr. Andy Palmer
Mark Wilson
Richard Solomons
Mahmoud Samy Mohamed Aly El Sayed
Dante Razzano
Peter Rogers
Imelda Walsh
Professor Tensie Whelan
Date of appointment
Date of cessation
20 April 2020
1 August 2020
22 June 2020
24 April 2020
3 June 2020
20 April 2020
25 May 2020
30 April 2020
23 May 2020
12 November 2020
20 April 2020
28 January 2020
23 May 2020
23 May 2020
As stated elsewhere in the Annual Report, William Tame and Amr AbouelSeoud ceased to be Directors with effect from
27 January 2021 and 18 February 2021 respectively. Anne Stevens, Robin Freestone, Richard Parry-Jones, Antony Sheriff
and Stephan Unger joined the Board with effect from 1 February 2021. Lord Matthew Carrington and Peter Espenhahn will
not seek re-election at the Company’s Annual General Meeting (“AGM”) and will step down from the Board at the close of
the meeting.
Kenneth Gregor, Tobias Moers, Anne Stevens, Robin Freestone, Richard Parry-Jones, Antony Sheriff and Stephan Unger will
be offering themselves for election and all remaining members of the Board (excluding those individuals noted) will be
offering themselves for re-election at the AGM.
80
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
DIRECTORS’ REPORT CONTINUED
DIRECTORS’ INSURANCE AND INDEMNITIES
The Company maintains directors’ and officers’ liability
insurance, which gives cover for legal actions brought
against its Directors and officers. Each Director of the
Company also has the benefit of prospectus liability
insurance which provides cover for liabilities incurred by
Directors in the performance of their duties or powers in
connection with the issue of the following documents
(as applicable).
• The Company’s prospectus dated 20 September 2018 in
relation to the Company’s listing on the premium listing
segment of the Financial Conduct Authority’s Official List
and admission to trading on the Main Market for listed
securities of the London Stock Exchange.
• the Company’s combined prospectus and circular dated
27 February 2020 (together with the two supplementary
prospectuses) in relation to the placing of ordinary shares
and the rights issue.
No amount was paid under any of these indemnities or
insurances during the year other than the applicable
insurance premiums. In accordance with section 236 of the
Companies Act 2006, qualifying third party indemnity
provisions are in place for the Directors in respect of
liabilities incurred as a result of their office, to the extent
permitted by law. Both the insurance and indemnities
applied throughout the year ended 31 December 2020 and
up to the date of this Report.
SHARE CAPITAL
Details of the issued share capital, together with details of
movements in the issued share capital of the Company
during the year, are shown in note 27. This is incorporated
by reference and deemed to be part of this Report.
As at 31 December 2020, the Company had one class of
ordinary shares which carries no right to fixed income. Each
share carries the right to one vote at general meetings of the
Company. The ordinary shares are listed on the premium
listing segment of the Financial Conduct Authority’s Official
List and traded on the Main Market for listed securities of the
London Stock Exchange. As at 31 December 2020, the
Company had 114,933,587 ordinary shares of £0.10 in
issue. The Company does not hold any shares in treasury.
Specific powers relating to the allotment and issuance of
ordinary shares and the ability of the Company to purchase
its own securities are included within the Articles and such
authorities must be submitted for approval by the
shareholders, at the AGM each year.
Following shareholder approval at the general meeting on
4 December 2020, the Company issued warrants granting
rights to subscribe for up to 126,647,852 ordinary shares of
£0.009039687 (or, following completion of the capital
reorganisation on 14 December 2020, 6,332,393 ordinary
shares of £0.10) in accordance with the terms of the warrant
instrument dated 7 December 2020. Warrants are
exercisable during the period starting on 1 July 2021 and
ending on 7 December 2027. The warrant instrument sets
out the rights of warrantholders, including the right to
receive shareholder documents and notifications and the
right to requisition the Company to convene a meeting of
warrantholders. Further information on the warrants is set
out in the Combined Prospectus and Circular dated
18 November 2020.
Dividend waivers are in place in respect of shares issued but
not allocated under the Legacy IPO LTIP.
SHAREHOLDERS’ RIGHTS
Holders of ordinary shares have the rights accorded to them
under UK company law, including the rights to receive the
Company’s Annual Report and Accounts, attend and speak
at general meetings (subject to certain restrictions in light of
the COVID-19 pandemic), appoint proxies and exercise
voting rights. No shareholder holds ordinary shares carrying
special rights relating to the control of the Company and,
other than as previously publicly disclosed in relation to the
Yew Tree Consortium, the voting rights of which are
exercised in accordance with instructions of Lawrence
Stroll, the Directors are not aware of any agreements
between holders of the Company’s shares that may result in
restrictions on voting rights.
RESTRICTIONS ON TRANSFER OF ORDINARY
SHARES
The Articles do not contain any restrictions on the transfer of
ordinary shares in the Company other than the usual
restrictions applicable where any amount is unpaid on a
share. All issued share capital of the Company at the date of
this Annual Report is fully paid. Certain restrictions are also
imposed by laws and regulations (such as insider trading
and marketing requirements relating to closed periods) and
requirements of the Market Abuse Regulation whereby
Directors and certain employees of the Company require
prior approval to deal in the Company’s securities.
Under the Strategic Cooperation Agreement (as defined
below), MBAG (as defined below) has agreed not to dispose
of any consideration shares issued and to be issued to it
pursuant to the Strategic Cooperation Agreement until the
earlier of: (i) 365 days after the date of admission of all such
consideration shares to listing on the Official List of the
Financial Conduct Authority and to trading on the Main
Market for listed securities of the London Stock Exchange;
(ii) the termination of the Strategic Cooperation Agreement;
and (iii) 31 December 2023, subject to the exceptions
set out in the Combined Prospectus and Circular dated
18 November 2020.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
81
DIRECTORS’ REPORT CONTINUED
SUBSTANTIAL SHAREHOLDINGS
The Company has received notifications of major interests in
its issued ordinary share capital in accordance with Rule 5
of the Disclosure Guidance and Transparency Rules. Details
of the position as at the end of the financial year are as
follows:
In the event of an internal corporate reorganisation, deferred
bonus and LTIP awards may (with consent from any acquiring
company) be replaced by equivalent awards. Alternatively,
the Remuneration Committee may decide that deferred
bonus and LTIP awards will vest as in the case of a change
of control described above.
In the event of a demerger, special dividend or other
corporate event that will materially impact the share
price the Committee may, at its discretion, allow deferred
bonus and LTIP awards to vest on the same basis as for a
change of control as described above. Alternatively, an
adjustment may be made to the number of shares if
considered appropriate.
The Company currently has two groups of significant
shareholders, namely the Yew Tree Consortium and
Mercedes-Benz AG (“MBAG”). The relationship between
the Company and each of these significant shareholder
groups is governed by two separate relationship agreements.
The purpose of these relationship agreements is to ensure
that the Company can carry on its business independently
and for the benefit of shareholders as a whole.
The relationship agreements also provide that the Company
will not take any action in relation to certain significant
matters without the prior approval of at least two-thirds
of the members of the Board present and entitled to vote.
The relationship agreements will terminate upon the relevant
significant shareholder group ceasing to have the entitlement
to exercise a minimum percentage of the voting rights in the
Company or the Company’s shares ceasing to be admitted to
the Official List of the Financial Conduct Authority and
traded on the Main Market for listed securities of the London
Stock Exchange.
Shareholder
Lawrence Stroll
Yew Tree Overseas Ltd
Mercedes-Benz AG
Number of
ordinary shares1
% of total
voting rights
24,799,9642
19,375,559
13,615,299
21.58%
16.86%
11.85%
7.31%
4.54%
3.01%
Adeem/Primewagon Shareholder Group
8,398,7673
Invesco Limited
Permian Investment Partners, LP
5,215,730
3,454,018
1 Where the disclosure was made prior to 14 December 2020 (the effective
date of the Share Consolidation), the Company has recalculated the
number of shares to reflect the disclosed interest in ordinary shares of
£0.10 each.
Includes 19,375,559 shares also disclosed by Yew Tree Overseas Ltd.
2
3 As per the Combined Prospectus and Circular dated 18 November 2020.
In the period from 1 January 2021 to 24 February 2021,
there have been no changes notified to the Company in
accordance with Rule 5 of the Disclosure Guidance and
Transparency Rules to the holdings as disclosed above.
SIGNIFICANT CONTRACTS – CHANGE OF CONTROL
At 31 December 2020, the Group had a Revolving Credit
Facility of £87m which contains a change of control clause.
The Group also had US$1,085.5m of 10.50% Senior
Secured Notes due 2025, and US$335m Second Lien Split
Coupon Notes which contain change of control provisions.
In aggregate, these financing arrangements are considered
significant to the Group and, in the event of a takeover
(i.e. a change of control) of the Company, the amounts
outstanding under the Revolving Credit Facility may be
cancelled or become immediately payable and the holders
of the Senior Secured Notes and Second Lien Notes may
require the Group to repurchase their notes.
All the Company’s share plans contain provisions relating
to a change of control. In the event of a change of control
or winding up of the Company (other than an internal
reorganisation), LTIP awards will vest subject to the extent
to which the performance conditions have been satisfied.
Pro-rating for service will apply unless the Remuneration
Committee decides otherwise. Outstanding deferred bonus
awards will vest in full as soon as practicable.
82
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
DIRECTORS’ REPORT CONTINUED
Each of the relationship agreements provides that each significant shareholder group is entitled to nominate director(s) to the
Board and the Nomination Committee and an observer to the Remuneration and Audit and Risk Committees, subject to the
size of its respective interest in the voting rights of the Company as set out below:
Significant shareholder group
Yew Tree Consortium
Mercedes-Benz AG
% of voting rights to
nominate 2 Directors
% of voting rights to
nominate 1 Director
10% or above
Between 7% and 10%
15% or above
Between 7.5% and 15%
% of voting rights to nominate
1 Director as a member of the
Nomination Committee and an
observer to the Remuneration and
Audit and Risk Committees
7%
7.5%
On 27 October 2020, the Company announced that it had
entered into an enhanced strategic cooperation arrangement
(the “Strategic Cooperation Agreement”) with one of its
existing shareholders, MBAG. Under the Strategic
Cooperation Agreement, the Company has agreed, over the
period of time between December 2020 and the first quarter
of 2023 and in several tranches, to issue 458,942,744
ordinary shares of £0.009039687 each (22,947,138 ordinary
shares of £0.10 each following the share consolidation) to
MBAG in exchange for access to certain technology and
intellectual property to be provided to the Company by
MBAG in several stages. The first tranche of 224,657,287
ordinary shares of £0.009039687 each (11,232,864 ordinary
shares of £0.10 each following the share consolidation) has
been issued to MBAG on 7 December 2020. Further details
of the terms of the Strategic Cooperation Agreement are
set out in the Combined Prospectus and Circular dated
18 November 2020.
In addition to the terms agreed in the Strategic Cooperation
Agreement, the Group has a long-standing technical
partnership with Daimler for the provision of engines,
electrical architecture and entertainment systems. This
partnership began in 2013, when Daimler became one of
Aston Martin Holdings (UK) Limited’s shareholders. The
agreements governing this relationship contain provisions
that provide that where a strategic Daimler competitor or
one of its affiliates acquires an interest in the Group,
Daimler is entitled to terminate these operational
agreements on three years’ prior notice.
TRANSACTIONS WITH RELATED PARTIES
During the year ended 31 December 2020, the significant
shareholder groups agreed to subscribe for shares in the
Company as follows:
Significant Shareholder Group
June 2020 Placing October 2020 Placing
Yew Tree Consortium
75,999,277
40,000,000
Number of Shares
Adeem/PW shareholder
group1
Prestige/SEIG shareholder
group2
9,000,000
23,662,788
None
N/A
1 The Adeem/PW shareholder group ceased to be a related party for the
purposes of the Listing Rules during the year ended 31 December 2020.
2 The Prestige/SEIG shareholder group ceased to be a related party for the
purposes of the Listing Rules during the year ended 31 December 2020.
Other related party transactions are detailed in note 31.
POLITICAL DONATIONS
It is the Company’s policy not to make political donations
and no such political donations were made during the
period since the IPO. In line with 2020 and reflecting the
practice of many other London-listed companies, the Board
will be seeking shareholder approval for political donations
at the forthcoming AGM. This is a precautionary measure,
for the Company and its subsidiaries to be able to make
donations and/or incur expenditure which may be construed
as “political” by the wide definition of that term included in
the relevant legislation. Further details are provided in the
Notice of this year’s AGM.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
83
DIRECTORS’ REPORT CONTINUED
DISCLOSURE TABLE PURSUANT TO LISTING
RULE LR9.8.4R
In accordance with LR 9.8.4R, the table below sets out
the location of the information required to be disclosed,
where applicable.
Applicable sub-paragraph within LR 9.8.4R
Page(s)
(1) Interest capitalised by the Group
(2) Unaudited financial information
(4) Long-term incentive scheme only involving a Director
(5 Directors’ waivers of emoluments
(6) Directors’ waivers of future emoluments
(7) Non pro-rata allotments for cash (issuer)
(8) Non pro-rata allotments for cash (major subsidiaries)
(9) Listed company is a subsidiary of another company
(10) Contracts of significance involving a Director
(11) Contracts of significance involving a
controlling shareholder
(12) Waivers of dividends
(13) Waivers of future dividends
(14) Agreement with a controlling shareholder
n/a
n/a
n/a
64
n/a
139
n/a
n/a
50
n/a
n/a
81
n/a
NON-FINANCIAL INFORMATION STATEMENT
The pages referenced in the table below provide information
as required by section 414CB of the Companies Act.
Non-financial information
Section(s)
Environmental matters
Responsibility
Employees
Social matters
People and Stakeholder
Engagement
Responsibility
People and Stakeholder
Engagement
Human rights
Responsibility
Anti-bribery and anti-
corruption
Risk and Viability Report
Responsibility
Business model
Business Model
Non-financial KPIs
Key Performance
Indicators
Principal risks
Risk and Viability Report
Page
24
18
24
18
27
37
27
10
17
33
DISCLOSURE OF INFORMATION TO THE
COMPANY’S AUDITOR
Each person who is a Director at the date of approval of this
report and of the Financial Statements confirms that:
(i) so far as such Director is aware, there is no relevant
audit information of which the Company’s auditor is
unaware; and
(ii) such Director has taken all the steps that they ought to
have taken as a Director, in order to make themselves
aware of any relevant audit information and to establish
that the Company’s auditor is aware of that information.
This confirmation is given and should be interpreted in
accordance with the provisions of section 418 of the
Companies Act 2006.
The Strategic Report (from pages 1 to 39) and the Directors’
Report (as described on page 79) have been approved by the
Board on 24 February 2021.
By order of the Board
CATHERINE SUKMONOWSKI
COMPANY SECRETARY
AND DIRECTOR OF GOVERNANCE
24 FEBRUARY 2021
Aston Martin Lagonda Global Holdings Plc
Registered Office:
Banbury Road, Gaydon
Warwick CV35 0DB
Registered in England and Wales Registered number:
11488166
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual
Report which includes the Strategic Report, the Directors’
Report, the Directors’ Remuneration Report and the Group
and parent Company Financial Statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare Group and
parent Company Financial Statements for each financial
year. Under that law the Directors have elected to prepare
the Group Financial Statements in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and have elected
to prepare the parent Company Financial Statements in
accordance with UK accounting standards, including FRS
101 Reduced Disclosure Framework. Under the Financial
Conduct Authority’s Disclosure Guidance and Transparency
Rules, group Financial Statements are required to be
prepared in accordance with international financial
reporting standards (IFRSs) adapted pursuant to Regulation
(EC) No 1606/2002 as it applies in the European Union.
Under company law the Directors must not approve the
Financial Statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and
parent Company and of their profit or loss for that period. In
preparing each of the Group and parent Company Financial
Statements, the Directors are required to:
• select suitable accounting policies and then apply
them consistently;
• make judgements and estimates that are reasonable,
relevant, reliable and prudent;
• for the Group Financial Statements, state whether
international accounting standards in conformity with the
requirements of the Companies Act 2006 and IFRSs
adapted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union have been followed,
subject to any material departures disclosed and explained
in the Financial Statements;
• for the parent Company Financial Statements, state
whether applicable UK accounting standards have been
followed, subject to any material departures disclosed and
explained in the parent company Financial Statements;
• assess the Group and parent Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern; and
• use the going concern basis of accounting unless they
either intend to liquidate the Group or the parent
Company or to cease operations, or have no realistic
alternative but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the parent Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
parent Company and enable them to ensure that Financial
Statements comply with the Companies Act 2006. They are
responsible for such internal control as they determine is
necessary to enable the preparation of Financial Statements
that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking
such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’
Report, Directors’ Remuneration Report and Corporate
Governance Statement that complies with that law and
those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing
the preparation and dissemination of Financial Statements
may differ from legislation in other jurisdictions.
Each of the Directors, whose names and functions are
listed on pages 41 to 43, confirm that, to the best of
their knowledge:
• that the consolidated Financial Statements, prepared in
accordance with international accounting standards in
conformity with the requirements of the Companies Act
2006 and IFRSs adopted pursuant to Regulation (EC)
1606/2002 as it applies in the European Union, give a true
and fair view of the assets, liabilities, financial position
and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole;
• the Strategic Report includes a fair review of the
development and performance of the business and the
position of the issuer and the undertakings included in the
consolidation taken as a whole, together with a
description of the principal risks and uncertainties that
they face; and
• that they consider the Annual Report and Accounts, taken
as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to
assess the Group’s position and performance, business
model and strategy.
These statements were approved by the Board on
24 February 2021 and signed on its behalf by
TOBIAS MOERS
CHIEF EXECUTIVE OFFICER
KENNETH GREGOR
CHIEF FINANCIAL OFFICER
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
85
FINANCIAL STATEMENTS
FINANCIAL
STATEMENTS
Independent Auditor’s Report
Consolidated Financial Statements
Notes to the Financial Statements
Company Statement of Financial Position
Company Statement of Changes in Equity
Notes to the Company Financial Statements
Shareholder Information
87
96
101
146
147
148
150
86
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT
INDEPENDENT AUDITOR’S
REPORT
TO THE MEMBERS OF ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC
OPINION
In our opinion:
• Aston Martin Lagonda Global Holdings plc’s group financial statements and parent company financial statements (the
“financial statements”) give a true and fair view of the state of the group’s and of the parent company’s affairs as at
31 December 2020 and of the group’s loss for the year then ended;
• the group financial statements have been properly prepared in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards adopted
pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union;
• the parent company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Aston Martin Lagonda Global Holdings (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31 December 2020 which comprise:
Group
Parent company
Consolidated statement of financial position as at 31 December 2020 Balance sheet as at 31 December 2020
Consolidated statement of comprehensive income for the year
then ended
Consolidated statement of changes in equity for the year then ended
Statement of changes in equity for the year then ended
Related notes 1 to 6 to the financial statements including a
summary of significant accounting policies
Consolidated statement of cash flows for the year then ended
Related notes 1 to 34 to the financial statements, including a summary
of significant accounting policies
The financial reporting framework that has been applied in the preparation of the group financial statements is applicable
law, International Accounting Standards in conformity with the requirements of the Companies Act 2006 and International
Financial Reporting Standards adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union.
The financial reporting framework that has been applied in the preparation of the parent company financial statements is
applicable law and United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework” (United
Kingdom Generally Accepted Accounting Practice).
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the group in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
87
INDEPENDENT AUDITOR’S REPORT CONTINUED
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group
and parent company’s ability to continue to adopt
the going concern basis of accounting included the
following procedures:
• Understanding and walking through management’s
process for and controls related to assessing going concern
including discussion with management to ensure all key
factors were taken into account;
• Obtaining management’s going concern assessment,
which covers the period to 30 June 2022, and which
includes details of facilities available, forecast covenant
calculations, and the results of management’s scenario
planning, and testing its efficacy including clerical
accuracy;
• Confirming to the debt agreements both the maturity
profile of the debt and the covenants that are required to
be met within the going concern period;
• Assessing the reasonableness of forecasts underpinning
the going concern model which are based on the Board-
approved budget and the Board-approved strategic plan;
• Understanding how these forecasts reflect the impact
of COVID-19;
• Analysing the historical accuracy of budgets to actual
results to determine whether forecast cash flows are
reliable based on past experience;
• Comparing management’s forecasts to actual results
through the subsequent events period and performing
inquiries to the date of this report;
• Considering external factors including reliance on
suppliers, recoverability of debtors, employees’ ability to
continue to work safely, and the threat of potential
litigations and claims;
• Considering the downside scenario identified by
management in their assessment on page 39, assessing
whether there are any other scenarios which should be
considered, and assessing whether the quantum of the
impact of the downside scenario in the going concern
period is realistic;
• Performing reverse stress testing on the going concern
model by understanding what reduction in wholesale
volumes would be required before covenants are
breached. This included comparing this to the downside
scenario contemplated by management and considering
the likelihood of the events required to breach the
covenants, given covenants would be breached prior to
liquidity being exhausted;
• Evaluating the Group’s ability to undertake mitigating
actions should it experience a severe downside scenario,
considering likely achievability of both timing and
quantum particularly with respect to constraining capital
spending if required; and
• Assessing the going concern disclosures in the financial
statements to ensure they are in accordance with
International Financial Reporting Standards.
Based on the work we have performed, we have not
identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast
significant doubt on the group and parent company’s ability
to continue as a going concern for the period to 30 June
2022 from when the financial statements are authorised
for issue.
In relation to the group and parent company’s reporting on
how they have applied the UK Corporate Governance Code,
we have nothing material to add or draw attention to in
relation to the directors’ statement in the financial statements
about whether the directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report. However, because not all future
events or conditions can be predicted, this statement is
not a guarantee as to the group’s ability to continue as a
going concern.
OVERVIEW OF OUR AUDIT APPROACH
Audit scope
• We performed an audit of the complete financial information of five components
and audit procedures on specific balances for a further one component.
• The components where we performed full or specific audit procedures accounted
for 99% of Gross Margin, 100% of Revenue and 100% of Total assets.
Key audit matters
• Revenue recognition, specifically;
• There is a risk that revenue is overstated due to errors in cut-off, including bill
and hold arrangements; and
• There is also a risk of overstatement of revenue through inappropriate manual
journal entries.
• Capitalisation and amortisation of development costs
• Impairment of capitalised development costs
Materiality
• Overall Group materiality of £2.2m which represents 2% of Gross Margin.
88
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT CONTINUED
AN OVERVIEW OF THE SCOPE OF THE PARENT
COMPANY AND GROUP AUDITS
TAILORING THE SCOPE
Our assessment of audit risk, our evaluation of materiality
and our allocation of performance materiality determine our
audit scope for each company within the Group. Taken
together, this enables us to form an opinion on the
consolidated financial statements. We take into account
size, risk profile, the organisation of the group and
effectiveness of group-wide controls, changes in the business
environment and other factors such as recent Internal audit
results when assessing the level of work to be performed at
each company.
In assessing the risk of material misstatement to the Group
financial statements, and to ensure we had adequate
quantitative coverage of significant accounts in the financial
statements, of the 7 reporting components of the Group, we
selected 6 components covering entities within the UK,
America, Japan and China, which represent the principal
business units within the Group.
Of the 6 components selected, we performed an audit of the
complete financial information of 5 components (“full scope
components”) which were selected based on their size or
risk characteristics. For the remaining one component
(“specific scope component”), we performed audit
procedures on specific accounts within that component that
we considered had the potential for the greatest impact on
the significant accounts in the financial statements either
because of the size of these accounts or their risk profile.
The reporting components where we performed audit
procedures accounted for 99% of the Group’s Gross Margin
(2019: 100% of the Groups Adjusted EBITDA, the basis for
materiality in the prior year), 100% (2019: 100%) of the
Group’s Revenue and 100% (2019: 100%) of the Group’s
Total assets. For the current year, the full scope components
contributed 94% of the Group’s Gross Margin (2019: 97%
of the Groups Adjusted EBITDA), 99% (2019: 96%) of the
Group’s Revenue and 100% (2019: 94%) of the Group’s
Total assets. The specific scope component contributed 5%
of the Group’s Gross Margin (2019: 3% of the Groups
Adjusted EBITDA), 1% (2019: 4%) of the Group’s Revenue
and 0% (2019: 6%) of the Group’s Total assets. The audit
scope of these components may not have included testing of
all significant accounts of the component but will have
contributed to the coverage for the Group.
With respect to the remaining one component that
represents 1% of the Group’s Gross Margin, we performed
other procedures, including analytical review to respond to
any potential risks of material misstatement to the Group
financial statements.
The charts below illustrate the coverage obtained from the
work performed by our audit teams.
Gross Margin
5% 1%
Revenue
1%
Total assets
100%
94%
99%
Full scope components
Specific scope components
Other procedures
Full scope components
Specific scope components
Other procedures
Full scope components
Specific scope components
Other procedures
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
89
INDEPENDENT AUDITOR’S REPORT CONTINUED
CHANGES FROM THE PRIOR YEAR
One component designated as specific scope in the prior
year was classified as full scope in the current year as a
result of an increase in the level of contribution to the
groups’ gross margin.
INVOLVEMENT WITH COMPONENT TEAMS
In establishing our overall approach to the Group audit, we
determined the type of work that needed to be undertaken at
each of the components by us, as the primary audit
engagement team, or by component auditors from other
EY global network firms operating under our instruction.
Of the 5 full scope components, audit procedures were
performed on 3 of these directly by the primary audit team.
For the components not audited by the primary audit team
we determined the appropriate level of involvement to
enable us to determine that sufficient audit evidence had
been obtained as a basis for our opinion on the Group as a
whole. For the one specific scope component, audit procedures
were performed directly by the primary audit team.
The Group audit team continued to follow a programme of
planned visits that has been designed to ensure that the
Senior Statutory Auditor or his designate visits all full and
specific scope components. In FY 2020, these visits were
conducted virtually due to the COVID-19 pandemic. During
the current year’s audit cycle, virtual visits were undertaken
by the primary audit team to the component teams in the
UK and China. These virtual sessions involved meeting with
our local component teams to discuss and direct their audit
approach, understanding the significant audit findings in
response to the key audit matters and reviewing key audit
working papers.
Specifically, in addressing the impact of COVID-19
government restrictions and safe working protocols on our
audit, we interacted regularly with the component teams
during various stages of the audit. We ensured they had
adequate time and resources to complete the audit
procedures, reviewed working papers in significant risk
areas and were responsible for the scope and direction of
the audit process. All components except for one performed
inventory observations in person. For the component which
performed inventory observations virtually, we designed our
observation procedures in conjunction with the component
team to address the additional risks presented in a virtual
count. This, together with the additional procedures
performed at Group level, gave us appropriate evidence for
our opinion on the Group financial statements.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These
matters included those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit
of the financial statements as a whole, and in our opinion
thereon, and we do not provide a separate opinion on
these matters.
90
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT CONTINUED
Key observations
communicated to the
Audit Committee
Our audit procedures
did not identify
evidence of material
misstatements in
revenue recognition
arising from the risk of
cut-off, bill and hold or
management override
through journal entries.
Our audit procedures
did not identify
evidence of material
misstatement in the
amounts of
development costs
capitalised in the year
or through
inappropriate manual
journal entries.
Risk
Our response to the risk
Revenue Recognition
(£611.8m, 2019: £980.5m)
Refer to the Audit Committee
Report (page 56); Accounting
policies (page 101); and Note 3
of the Consolidated Financial
Statements (page 110)
There is a risk that revenue is
overstated due to errors in
cut-off, including bill and hold
arrangements whereby revenue
is recognised on a completed
vehicle before delivery is made
to the customer based on the
customer’s request.
There is also a risk of
overstatement of revenue
through inappropriate manual
journal entries.
• We confirmed the existence and the design effectiveness of controls within the
sales process, paying particular attention to those around cut-off and bill and
hold transactions.
• For a sample we considered the terms per the contracts and deliveries to
ensure revenue has been recognised in accordance with IFRS 15 and is
recorded in the correct period.
• For a sample of bill and hold sales we have confirmed the vehicle was
completed before year end by obtaining the signed quality check
documentation. For that sample we also confirmed the transfer of control had
occurred by obtaining the customer requests to hold the vehicles on their
behalf.
• For a sample of bill and hold sales we have confirmed the transaction directly
with the third party dealer.
• We performed physical verification on the finished vehicles and agreed these
to either the inventory or the bill and hold listings. We ensured the
manufacturing process was complete for each vehicle and that the vehicle was
not double counted in revenue and inventory.
• We performed cut-off testing by tracing a sample of transactions around the
period end to third party delivery note documentation.
• We performed data analytical procedures of the double entries in the general
ledger to test the postings from Revenue to Cash, correlating the cash
conversion of sales. We investigated and obtained evidence for any unusual
items identified.
• We performed journal testing procedures to identify unusual journal entry
postings. We obtained audit evidence for unusual and/or material revenue
journals.
• We performed full and specific scope audit procedures over this risk area in
four locations, which covered 100% of the risk amount.
Capitalisation and amortisation
of development costs (Net
book value of development
costs: £784.1m, 2019:
£769.5m)
Refer to the Audit Committee
Report (page 56); Accounting
policies (page 101); and Note
13 of the Consolidated
Financial Statements (page 118)
There is a risk that costs are
capitalised which do not meet
the criteria set out within IAS
38 or that the amortisation
period is inappropriate.
There is also a risk of
overstatement of capitalised
development costs through
inappropriate manual journal
entries.
• We confirmed the existence and the design effectiveness of controls around
the intangibles process and in particular around the approval of capitalised
development expenditure.
• For a sample of costs capitalised we confirmed that the costs incurred were;
capitalised against the correct project; measured correctly; eligible for
capitalisation, and the timing of the expense capitalisation was appropriate.
• For a sample of projects we compared the actual spend against the budgeted
spend to ensure the projects continue to meet the IAS 38 criteria for
capitalisation and remain commercially viable.
• For capitalised development costs we confirmed the amortisation period was
aligned to the period over which commercial benefits are expected to be
received and is consistent with the groups business plan.
• We considered the appropriateness of the amount/percentage of costs which
are transferred between models as a result of the carry over carry across
principle (‘COCA’).
• We recalculated the amortisation recognised to confirm this was in line with
expectations.
• We performed journal testing procedures to identify unusual journal entry
postings. We obtained audit evidence for any unusual and/or material journals
related to capitalised development costs.
• We performed full and specific scope audit procedures over this risk area in
two locations, which covered 100% of the risk amount.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
91
INDEPENDENT AUDITOR’S REPORT CONTINUED
Key observations
communicated to the
Audit Committee
Our year end audit
procedures did not
identify evidence of
material misstatement
regarding the carrying
value of capitalised
development costs or
the impairment charge
recognised in the year.
Risk
Our response to the risk
Impairment of capitalised
development costs (Net book
value of development costs:
£784.1m, 2019: £769.5m)
Refer to the Audit Committee
Report (page 56); Accounting
policies (page 101); and Note
14 of the Consolidated
Financial Statements (page 118)
• We have examined management’s methodology and impairment models for
assessing the recoverability of the capitalised development costs to understand
the composition of management’s future cash flow forecasts, and the process
undertaken to prepare them. This includes confirming the underlying cash
flows are consistent with the Board approved business plan.
• We have re-performed the calculations in the model to test the mathematical
integrity.
• We have assessed the discount rate used by obtaining the underlying data
used in the calculation and benchmarking it against comparable organisations
and market data with the support of our valuation specialists.
There is a risk that the value of
development costs is not
supported by the future forecast
cashflows from the sale of
vehicles to which the costs
relate.
• We have analysed the historical accuracy of budgets to actual results to
determine whether forecast cash flows are reliable based on past experience.
• We calculated the degree to which the key assumptions would need to
fluctuate before an impairment arose and considered the likelihood of this
occurring.
• Where changes have been made to the development programmes following
completion of the Strategic Cooperation Agreement with Mercedes-Benz AG,
we met with the Project Leads to understand the impact of the new technology
on the development programmes.
• We have audited the disclosures in respect of impairment of capitalised
development costs with reference to the requirements of IAS 36 and IAS 1 and
confirmed their consistency with the audited impairment models.
• We performed full and specific scope audit procedures over this risk area in
two locations, which covered 100% of the risk amount.
OUR APPLICATION OF MATERIALITY
We apply the concept of materiality in planning and
performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit opinion.
MATERIALITY
The magnitude of an omission or misstatement that,
individually or in the aggregate, could reasonably be
expected to influence the economic decisions of the users of
the financial statements. Materiality provides a basis for
determining the nature and extent of our audit procedures.
We determined materiality for the Group to be £2.2 million
(2019: £2.6 million), which is 2% of Gross Margin (2019:
1.9% of Adjusted EBITDA). We believe that Gross Margin
provides us with an appropriate basis for materiality given
the results of the year. The materiality basis has changed
from Adjusted EBITDA in the prior year to Gross Margin in
the current year as the Group Adjusted EBITDA is a loss in
the current year.
We determined materiality for the Parent Company to be
£13.9 million (2019: £5.5 million), which is 1% (2019: 1%)
of Equity.
During the course of our audit, we reassessed initial
materiality and updated this for actual results.
PERFORMANCE MATERIALITY
The application of materiality at the individual account or
balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds
materiality.
On the basis of our risk assessments, together with our
assessment of the Group’s overall control environment, our
judgement was that performance materiality was 50%
(2019: 50%) of our planning materiality, namely £1.1m
(2019: £1.3m). We have set performance materiality at this
percentage due to the level of audit adjustments identified in
the prior period.
Audit work at component locations for the purpose of
obtaining audit coverage over significant financial statement
accounts is undertaken based on a percentage of total
performance materiality. The performance materiality
set for each component is based on the relative scale and
risk of the component to the Group as a whole and our
assessment of the risk of misstatement at that component.
In the current year, the range of performance materiality
allocated to components was £0.24m to £1.1m (2019:
£0.26m to £1.3m).
92
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT CONTINUED
REPORTING THRESHOLD
An amount below which identified misstatements are
considered as being clearly trivial.
We agreed with the Audit Committee that we would report
to them all uncorrected audit differences in excess of
£0.11m (2019: £0.13m), which is set at 5% of planning
materiality, as well as differences below that threshold that,
in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both the
quantitative measures of materiality discussed above and in
light of other relevant qualitative considerations in forming
our opinion.
OTHER INFORMATION
The other information comprises the information included in
the annual report set out on pages 1 to 150, other than the
financial statements and our auditor’s report thereon. The
directors are responsible for the other information contained
within the annual report.
Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise
explicitly stated in this report, we do not express any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is
materially inconsistent with the financial statements or our
knowledge obtained in the course of the audit or otherwise
appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements,
we are required to determine whether there is a material
misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that
there is a material misstatement of the other information, we
are required to report that fact.
We have nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY
THE COMPANIES ACT 2006
In our opinion, the part of the directors’ remuneration report
to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course
of the audit:
• the information given in the strategic report and the
directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and
MATTERS ON WHICH WE ARE REQUIRED TO
REPORT BY EXCEPTION
In the light of the knowledge and understanding of the group
and the parent company and its environment obtained in the
course of the audit, we have not identified material
misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the parent company financial statements and the part of
the Directors’ Remuneration Report to be audited are not
in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by
law are not made; or
• we have not received all the information and explanations
we require for our audit
CORPORATE GOVERNANCE STATEMENT
The Listing Rules require us to review the directors’
statement in relation to going concern, longer-term viability
and that part of the Corporate Governance Statement
relating to the group and company’s compliance with the
provisions of the UK Corporate Governance Code specified
for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the
Corporate Governance Statement is materially consistent
with the financial statements or our knowledge obtained
during the audit:
• Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified set out on page 79;
• Directors’ explanation as to its assessment of the
company’s prospects, the period this assessment covers
and why the period is appropriate set out on page 39;
• Directors’ statement on fair, balanced and understandable
set out on page 85;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
page 39;
• The section of the annual report that describes the review
of effectiveness of risk management and internal control
systems set out on page 60; and;
• the strategic report and the directors’ report have been
• The section describing the work of the audit committee set
prepared in accordance with applicable legal requirements.
out on page 57
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
93
INDEPENDENT AUDITOR’S REPORT CONTINUED
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities
statement set out on page 85, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group and parent company’s
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going
concern basis of accounting unless the directors either
intend to liquidate the group or the parent company or to
cease operations, or have no realistic alternative but to
do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF
THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
EXPLANATION AS TO WHAT EXTENT THE AUDIT WAS
CONSIDERED CAPABLE OF DETECTING IRREGULARITIES,
INCLUDING FRAUD
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect
irregularities, including fraud. The risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion. The extent to
which our procedures are capable of detecting irregularities,
including fraud is detailed below.
However, the primary responsibility for the prevention and
detection of fraud rests with both those charged with
governance of the company and management.
• We obtained an understanding of the legal and regulatory
frameworks that are applicable to the group and
determined that the most significant are frameworks
which are directly relevant to specific assertions in the
financial statements are those that relate to the reporting
framework (International Accounting Standards in
conformity with the requirements of the Companies Act
2006 and International Financial Reporting Standards
adopted pursuant to Regulation (EC) No. 1606/2002 as it
applies in the European Union, FRS 101, the Companies
Act 2006 and UK Corporate Governance Code). In
addition, we concluded that there are certain significant
laws and regulations which may have an effect on the
determination of the amounts and disclosures in the
financial statements being the Listing Rules of the UK
Listing Authority, and those laws and regulations relating
to health and safety and employee matters.
• We understood how Aston Martin Lagonda Global
Holdings plc is complying with those frameworks by
making enquiries of management, internal audit, those
responsible for legal and compliance procedures and the
company secretary. We corroborated our enquiries
through our review of board minutes, papers provided to
the Audit Committee and correspondence received from
regulatory bodies.
• We assessed the susceptibility of the group’s financial
statements to material misstatement, including how fraud
might occur by meeting with management and internal
audit to understand where they considered there was
susceptibility to fraud. We also considered performance
targets and the potential incentives or opportunities to
manage earnings or influence the perceptions of analysts.
We considered the programmes and controls that the
Group has established to address risks identified, or that
otherwise prevent, deter and detect fraud; and how senior
management monitors those programs and controls.
Where the risk was considered to be higher, we performed
audit procedures to address each identified fraud risk.
These procedures included testing manual journals and
were designed to provide reasonable assurance that the
financial statements were free from material fraud.
• Based on this understanding we designed our audit
procedures to identify non-compliance with such laws
and regulations. Our procedures involved understanding
management’s internal controls over compliance with
laws and regulations; enquiries of legal counsel, Group
management, internal audit, and full and specific scope
management; reviewing internal audit reports and
whistleblowing summaries provided to the Audit
Committee and performing focused testing, as referred to
in the key audit matters section above.
94
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
INDEPENDENT AUDITOR’S REPORT CONTINUED
• Specific enquiries were made with the component teams
to confirm any non-compliance with laws and regulations
and this was reported through their audit deliverables
based on the procedures detailed in the previous
paragraph. Further, the Group team communicated any
instances of non-compliance with laws and regulations
to component teams through regular interactions with
local EY teams. There were no significant instances of
non-compliance with laws and regulations.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council’s website at
https://www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
OTHER MATTERS WE ARE REQUIRED TO ADDRESS
• Following the recommendation from the audit committee
we were appointed by the company on 24 July 2019 to
audit the financial statements for the year ending 31
December 2019 and subsequent financial periods.
The period of total uninterrupted engagement including
previous renewals and reappointments is two years,
covering the years ending 2019 to 2020.
• The non-audit services prohibited by the FRC’s Ethical
Standard were not provided to the group or the parent
company and we remain independent of the group and
the parent company in conducting the audit.
• The audit opinion is consistent with the additional report
to the audit committee
USE OF OUR REPORT
This report is made solely to the company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the company’s members those
matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for
the opinions we have formed.
SIMON O’NEILL (SENIOR STATUTORY AUDITOR)
FOR AND ON BEHALF OF ERNST & YOUNG LLP,
STATUTORY AUDITOR
Birmingham
24 February 2021
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
95
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020
Revenue
Cost of sales
Gross profit
Selling and distribution expenses
Administrative and other operating expenses
Other expense
Operating loss
Finance income
Finance expense
Loss before tax
Income tax credit/(charge)
Loss for the year
(Loss)/profit attributable to:
Owners of the Group
Non-controlling interests
Other comprehensive income
Items that will never be reclassified to the Income Statement
Remeasurement of defined benefit liability
Taxation on items that will never be reclassified to the
Income Statement
Items that are or may be reclassified to the Income Statement
Foreign exchange translation differences
Fair value adjustment – cash flow hedges
Amounts reclassified to the Income Statement – cash flow hedges
Taxation on items that may be reclassified to the Income Statement
Other comprehensive (loss)/income for the year, net of income tax
Total comprehensive loss for the year
Total comprehensive (loss)/income for the year attributable to:
Owners of the Group
Non-controlling interests
Earnings per ordinary share
Basic loss per share
Diluted loss per share
All operations of the Group are continuing.
26
10
23
23
10
12
12
2020
2019 restated *
Adjusted
£m
Adjusting
items**
£m
611.8
(500.7)
111.1
(79.6)
–
–
–
–
Total
£m
Adjusted
£m
611.8
980.5
(500.7)
(642.7)
111.1
337.8
(79.6)
(95.0)
Adjusting
items**
£m
–
–
–
–
Total
£m
980.5
(642.7)
337.8
(95.0)
(256.4)
(98.0)
(354.4)
(233.7)
(42.1)
(275.8)
–
–
–
(19.0)
–
(224.9)
(98.0)
(322.9)
(9.9)
(42.1)
33.1
6.9
40.0
16.3
–
(19.0)
(52.0)
16.3
(107.6)
(75.5)
(183.1)
(77.3)
(6.6)
(83.9)
(299.4)
(166.6)
(466.0)
(70.9)
(48.7)
(119.6)
Notes
3
5
4
8
9
10
22.6
32.9
55.5
(6.8)
8.8
2.0
(276.8)
(133.7)
(410.5)
(77.7)
(39.9)
(117.6)
(419.3)
8.8
(410.5)
(59.1)
12.3
0.8
6.6
9.7
(3.1)
(32.8)
(443.3)
(452.1)
8.8
(443.3)
(126.4)
8.8
(117.6)
(1.4)
0.2
(2.7)
9.0
15.6
(3.4)
17.3
(100.3)
(109.1)
8.8
(100.3)
(543.0p)
(543.0p)
(290.6p)
(290.6p)
* Detail on the restatement of the comparative period is disclosed in note 2 and the impact on Earnings Per Share in note 12.
** Adjusting items are defined in note 2 with further detail shown in note 6.
The notes on pages 101 to 145 form an integral part of the Financial Statements.
96
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
96
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
Capital
£m
Share
Premium
£m
Merger
Reserve
£m
Capital
Redemption
Reserve
£m
Capital
Reserve
£m
Translation
Reserve
£m
Hedge
Reserves
£m
Retained
Earnings
£m
Non-
controlling
Interest
£m
Total
Equity
£m
Group
At 1 January 2020
Total comprehensive loss for the year
(Loss)/profit for the year
Other comprehensive income
Foreign currency translation differences
Fair value movement – cash flow
hedges (note 23)
Amounts reclassified to the Income
Statement – cash flow hedges (note 23)
Remeasurement of defined benefit
liability (note 26)
Tax on other comprehensive income
(note 10)
Total other comprehensive
(loss)/income
Total comprehensive (loss)/income
for the year
Transactions with owners, recorded
directly in equity
2.1
352.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Issue of ordinary shares (note 27)
18.7
755.9
144.0
Capital reduction
Credit for the year under equity settled
share-based payments (note 29)
Dividend paid to non-controlling
interest (note 11)
Tax on items credited to equity (note 10)
(9.3)
–
–
–
–
–
–
–
–
–
–
–
Total transactions with owners
9.4
755.9
144.0
At 31 December 2020
11.5 1,108.2
144.0
–
–
–
–
–
–
–
–
–
–
9.3
–
–
–
9.3
9.3
6.6
(0.4)
(2.3)
(42.8)
14.1 329.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(419.3)
8.8 (410.5)
0.8
–
–
–
–
–
6.6
9.7
–
–
–
–
(59.1)
(3.1)
12.3
0.8
13.2
(46.8)
–
–
–
–
–
–
0.8
6.6
9.7
(59.1)
9.2
(32.8)
0.8
13.2
(466.1)
8.8 (443.3)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4.2
–
1.6
5.8
– 918.6
–
–
–
4.2
(6.6)
(6.6)
–
1.6
(6.6) 917.8
6.6
0.4
10.9
(503.1)
16.3 804.1
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020
Selling and distribution expenses
Administrative and other operating expenses
Revenue
Cost of sales
Gross profit
Other expense
Operating loss
Finance income
Finance expense
Loss before tax
Income tax credit/(charge)
Loss for the year
(Loss)/profit attributable to:
Owners of the Group
Non-controlling interests
Other comprehensive income
Items that will never be reclassified to the Income Statement
Remeasurement of defined benefit liability
Taxation on items that will never be reclassified to the
Income Statement
Items that are or may be reclassified to the Income Statement
Foreign exchange translation differences
Fair value adjustment – cash flow hedges
Amounts reclassified to the Income Statement – cash flow hedges
Taxation on items that may be reclassified to the Income Statement
Other comprehensive (loss)/income for the year, net of income tax
Total comprehensive loss for the year
Total comprehensive (loss)/income for the year attributable to:
Owners of the Group
Non-controlling interests
Earnings per ordinary share
Basic loss per share
Diluted loss per share
All operations of the Group are continuing.
3
5
4
8
9
26
10
23
23
10
12
12
2020
2019 restated *
Adjusting
Adjusting
Adjusted
items**
Total
Adjusted
items**
Notes
£m
£m
£m
£m
£m
Total
£m
980.5
(642.7)
337.8
(95.0)
(19.0)
(52.0)
16.3
–
–
–
–
–
–
611.8
(500.7)
111.1
(79.6)
611.8
980.5
(500.7)
(642.7)
111.1
337.8
(79.6)
(95.0)
–
–
–
–
–
(256.4)
(98.0)
(354.4)
(233.7)
(42.1)
(275.8)
–
–
(19.0)
(224.9)
(98.0)
(322.9)
(9.9)
(42.1)
33.1
6.9
40.0
16.3
(107.6)
(75.5)
(183.1)
(77.3)
(6.6)
(83.9)
(299.4)
(166.6)
(466.0)
(70.9)
(48.7)
(119.6)
10
22.6
32.9
55.5
(6.8)
8.8
2.0
(276.8)
(133.7)
(410.5)
(77.7)
(39.9)
(117.6)
(419.3)
8.8
(410.5)
(59.1)
12.3
0.8
6.6
9.7
(3.1)
(32.8)
(443.3)
(452.1)
8.8
(443.3)
(126.4)
8.8
(117.6)
(1.4)
0.2
(2.7)
9.0
15.6
(3.4)
17.3
(100.3)
(109.1)
8.8
(100.3)
(543.0p)
(543.0p)
(290.6p)
(290.6p)
* Detail on the restatement of the comparative period is disclosed in note 2 and the impact on Earnings Per Share in note 12.
** Adjusting items are defined in note 2 with further detail shown in note 6.
The notes on pages 101 to 145 form an integral part of the Financial Statements.
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
96
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97
97
FINANCIAL STATEMENTS CONTINUED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
Group
At 1 January 2019
Correction of errors
At 1 January 2019 restated *
Total comprehensive loss for the year
(Loss)/profit for the year *
Other comprehensive income
Foreign currency translation differences
Fair value adjustment on cash flow hedges (note 23)
Amounts reclassified to the Income Statement – cash
flow hedges (note 23)
Remeasurement of defined benefit liability (note 26)
Tax on other comprehensive income (note 10)
Total other comprehensive income/(loss)
Total comprehensive income/(loss) for the year*
Transactions with owners, recorded directly in equity
Credit for the year under equity settled share-
based payments (note 29)
Dividend paid to non-controlling interest
Tax on items credited to equity (note 10)
Total transactions with owners
At 31 December 2019*
* Detail on the restatement is disclosed in note 2.
Share
Capital
£m
Share
Premium
£m
Merger
Reserve
£m
Capital
Reserve
£m
Translation
Reserve
£m
Hedge
Reserves
£m
Retained
Earnings
£m
Non-
controlling
Interest
£m
Total
Equity
£m
2.1
–
2.1
352.3
–
352.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2.1
352.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6.6
–
6.6
2.3
–
2.3
(23.5)
97.2
10.2 447.2
–
(16.1)
–
(16.1)
(23.5)
81.1
10.2 431.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(126.4)
8.8 (117.6)
(2.7)
–
–
–
–
(2.7)
(2.7)
–
–
–
–
–
9.0
15.6
–
(3.4)
21.2
–
–
–
(1.4)
0.2
(1.2)
–
–
–
–
–
–
(2.7)
9.0
15.6
(1.4)
(3.2)
17.3
21.2
(127.6)
8.8 (100.3)
–
–
–
–
3.7
–
–
–
(4.9)
–
3.7
(4.9)
–
3.7
(4.9)
(1.2)
6.6
(0.4)
(2.3)
(42.8)
14.1 329.6
98
98
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
Share
Share
Merger
Capital
Translation
Hedge
Retained
controlling
Total
Capital
Premium
Reserve
Reserve
Reserve
Reserves
Earnings
Interest
Equity
£m
£m
£m
2.1
–
2.1
352.3
352.3
£m
6.6
–
6.6
£m
2.3
–
2.3
£m
£m
£m
£m
(23.5)
97.2
10.2 447.2
–
(16.1)
–
(16.1)
(23.5)
81.1
10.2 431.1
Non-
Group
At 1 January 2019
Correction of errors
At 1 January 2019 restated *
Total comprehensive loss for the year
(Loss)/profit for the year *
Other comprehensive income
Foreign currency translation differences
Fair value adjustment on cash flow hedges (note 23)
Amounts reclassified to the Income Statement – cash
flow hedges (note 23)
Remeasurement of defined benefit liability (note 26)
Tax on other comprehensive income (note 10)
Total other comprehensive income/(loss)
Total comprehensive income/(loss) for the year*
Transactions with owners, recorded directly in equity
Credit for the year under equity settled share-
based payments (note 29)
Dividend paid to non-controlling interest
Tax on items credited to equity (note 10)
Total transactions with owners
At 31 December 2019*
* Detail on the restatement is disclosed in note 2.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(2.7)
(2.7)
(2.7)
–
–
–
–
–
–
–
–
–
–
(126.4)
8.8 (117.6)
–
9.0
15.6
–
(3.4)
21.2
–
–
–
(1.4)
0.2
(1.2)
(2.7)
9.0
15.6
(1.4)
(3.2)
17.3
–
–
–
–
–
–
–
–
21.2
(127.6)
8.8 (100.3)
–
–
–
–
3.7
–
–
(4.9)
3.7
(4.9)
–
3.7
(4.9)
(1.2)
2.1
352.3
6.6
(0.4)
(2.3)
(42.8)
14.1 329.6
FINANCIAL STATEMENTS CONTINUED
FINANCIAL STATEMENTS CONTINUED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2020
31 December
2020
£m
31 December 2019
restated*
£m
1 January 2019
restated*
£m
Notes
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use lease assets
Trade and other receivables
Other financial assets
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Income tax receivable
Other financial assets
Cash and cash equivalents
Total assets
Current liabilities
Borrowings
Trade and other payables
Income tax payable
Other financial liabilities
Lease liabilities
Provisions
Non-current liabilities
Borrowings
Trade and other payables
Other financial liabilities
Lease liabilities
Provisions
Employee benefits
Deferred tax liabilities
Total liabilities
Net assets
Capital and reserves
Share capital
Share premium
Merger reserve
Capital redemption reserve
Capital reserve
Translation reserve
Hedge reserves
Retained earnings
Equity attributable to owners of the group
Non-controlling interests
Total shareholders’ equity
13
15
16
18
20
10
17
18
20
19
23
21
22
16
25
23
21
22
16
25
26
10
27
23
1,336.8
389.6
71.4
0.9
0.1
106.5
1,905.3
207.4
177.9
0.2
14.6
489.4
889.5
2,794.8
113.5
578.9
1.2
83.3
9.3
22.1
808.3
1,183.6
350.5
81.8
1.8
0.2
45.7
1,071.7
313.0
82.5
1.8
–
32.7
1,663.6
1,501.7
200.7
249.7
0.3
8.9
107.9
567.5
2,231.1
114.8
734.1
8.9
6.3
14.1
12.0
890.2
971.3
839.1
7.5
–
93.7
16.8
92.5
0.6
1,182.4
1,990.7
804.1
11.5
1,108.2
144.0
9.3
6.6
0.4
10.9
(503.1)
787.8
16.3
804.1
9.4
2.6
97.3
16.2
36.8
9.9
1,011.3
1,901.5
329.6
2.1
352.3
–
–
6.6
(0.4)
(2.3)
(42.8)
315.5
14.1
329.6
165.3
240.1
0.8
0.1
144.6
550.9
2,052.6
99.4
655.2
4.9
4.2
15.0
10.8
789.5
604.7
49.8
4.4
101.5
12.9
38.7
20.0
832.0
1,621.5
431.1
2.1
352.3
–
–
6.6
2.3
(23.5)
81.1
420.9
10.2
431.1
98
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
99
99
* Detail on the restatement of the comparative period is disclosed in note 2.
The Financial Statements were approved by the board of directors on 24 February 2021 and were signed on its behalf by
TOBIAS MOERS
CHIEF EXECUTIVE OFFICER
COMPANY NUMBER: 11488166
KENNETH GREGOR
CHIEF FINANCIAL OFFICER
FINANCIAL STATEMENTS CONTINUED
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2020
Operating activities
Loss for the year
Adjustments to reconcile loss for the year to net cash inflow from operating activities
Tax credit on continuing operations
Net finance costs
Other non-cash movements
Loss on sale of property, plant and equipment
Depreciation and impairment of property, plant and equipment
Depreciation and impairment of right-of-use lease assets
Amortisation and impairment of intangible assets
Difference between pension contributions paid and amounts recognised in Income Statement
Increase in inventories
Decrease/(increase) in trade and other receivables
Decrease in trade and other payables
(Decrease)/increase in advances and customer deposits
Movement in provisions
Cash (used in)/generated from operations
Decrease in cash held not available for short-term use
Income taxes paid
Net cash (outflow)/inflow from operating activities
Cash flows from investing activities
Interest received
Payments to acquire property, plant and equipment
Payments to acquire intangible assets
Net cash used in investing activities
Cash flows from financing activities
Interest paid
Proceeds from equity share issue
Proceeds from issue of equity warrants
Proceeds from financial instrument utilised as part of refinancing transactions
Principal element of lease payments
Repayment of existing borrowings
Proceeds from existing borrowings
Proceeds from inventory repurchase arrangement
Repayment of inventory repurchase arrangement
Proceeds from new borrowings
Transaction fees paid on issuance of shares
Transaction fees paid on financing activities
Net cash inflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rates on cash and cash equivalents
Cash and cash equivalents at the end of the year
* Further detail on the restatement of the comparative period is disclosed in note 2.
Notes
2020
£m
2019
restated*
£m
(410.5)
(117.6)
10
4
4
4
4
21
20
10
8
15
13
28
28
28
28
21
28
28
28
24
(55.5)
143.1
2.2
–
50.8
14.8
168.5
(4.1)
(4.8)
67.4
(118.6)
(52.8)
11.0
(188.5)
(0.9)
(9.2)
(198.6)
2.3
(81.0)
(179.7)
(258.4)
(82.3)
812.8
34.6
6.9
(12.2)
(1,092.3)
–
76.8
(80.0)
1,252.7
(34.9)
(41.9)
840.2
383.2
107.9
(1.7)
489.4
(2.0)
67.6
(4.4)
0.9
38.8
13.3
112.4
(4.4)
(33.3)
(31.8)
(51.8)
48.4
4.5
40.6
(8.7)
(12.5)
19.4
5.0
(82.2)
(228.0)
(305.2)
(52.0)
–
–
–
(10.9)
(91.5)
102.3
38.7
–
260.8
–
(4.1)
243.3
(42.5)
144.6
5.8
107.9
100
100
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2020
Notes
2020
£m
2019
restated*
£m
(410.5)
(117.6)
NOTES TO THE FINANCIAL
STATEMENTS FOR THE YEAR ENDED
31 DECEMBER 2020
1 BASIS OF ACCOUNTING
Aston Martin Lagonda Global Holdings plc (the “Company”) is a
company incorporated in England and Wales and domiciled in the
UK. The Group Financial Statements consolidate those of the
Company and its subsidiaries (together referred to as the “Group”).
The Group Financial Statements have been prepared and approved by
the Directors in accordance with
• international accounting standards in conformity with the
requirements of the Companies Act 2006; and
• international financial reporting standards (‘IFRSs’) adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union.
The Group Financial Statements have been prepared under the
historical cost convention except where the measurement of balances
at fair value is required as explained below. The Financial Statements
are prepared in millions to one decimal place, and in Sterling which is
the Company’s functional currency.
GOING CONCERN
An overview of the business activities of Aston Martin Lagonda Global
Holdings plc, including a review of the principal risks that the Group
faces, is given in the Strategic Report on pages 1 to 39. The debt
facilities available to the Group and the maturity profile of this debt is
shown in note 23 of the Financial Statements.
The Group meets its day-to-day working capital requirements and
medium term funding requirements through a mixture of
$1,085.5m of 1st Lien notes at 10.5% which mature in November
2025, $335m of 2nd Lien split coupon notes at 15% per annum
(8.89 % cash and 6.11% PIK) which mature in November 2026, a
revolving credit facility (£90.6m) which matures August 2025,
facilities to finance inventory, a number of back-to-back loans and
a wholesale vehicle financing facility (as described in note 18 of
the Financial Statements). Under the revolving credit facility the
Group is required to comply with liquidity and leverage covenants.
The amounts outstanding on all the borrowings are shown in note
23 to the Group Financial Statements.
The Directors have developed trading and cash flow forecasts for
the period from the date of approval of these Financial Statements
through 30 June 2022 (the going concern review period). These
forecasts show that the Group has sufficient financial resources to
meet its obligations as they fall due and to comply with covenants
for the going concern review period.
The forecasts reflect our strategy of rebalancing supply and demand
and the decisive actions taken to improve cost efficiency, in alignment
with reduced sports car production levels. The forecasts make
assumptions in respect of future market conditions and, in particular,
wholesale volumes, average selling price, the launch of new models
including Valkyrie and the potential impact of COVID-19 on sales.
The nature of the Group's business is such that there can be variation in
the timing of cash flows around the development and launch of new
models. In addition, the availability of funds provided through the
vehicle wholesale finance facility changes as the availability of credit
insurance and sales volumes vary, in total and seasonally. The
forecasts take into account these factors to the extent which the
directors consider them to represent their best estimate of the future
based on the information that is available to them at the time of
approval of these Financial Statements.
The directors have considered a severe but plausible downside
scenario that includes considering the impact of a 30% reduction in
DBX volumes, a further 4 week period of factory closure due to
COVID-19 restrictions and, operating costs higher than the base plan.
The Group plans to make continued investment for growth in the
period and, accordingly, funds generated through operations are
expected to be reinvested in the business mainly through new model
development and other capital expenditure. To a certain extent such
expenditure is discretionary and, in the event of risks occurring which
could have a particularly severe effect on the Group, as identified
in the severe but plausible downside scenario, actions such as
constraining capital spending, working capital improvements,
reduction in marketing expenditure and the continuation of strict and
immediate expense control would be taken to safeguard the Group’s
financial position.
Accordingly, after considering the forecasts, appropriate
sensitivities, current trading and available facilities, the Directors
have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future and to comply with its financial covenants therefore the
Directors continue to adopt the going concern basis in preparing
the Financial Statements.
2 ACCOUNTING POLICIES
BASIS OF CONSOLIDATION
The Consolidated Financial Statements consist of the Financial
Statements of the Company and all entities controlled by the
Company. All intercompany balances and transactions, including
unrealised profits arising, are eliminated.
SUBSIDIARIES
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. In assessing
control, the Group takes into consideration potential voting rights
that are currently exercisable. The acquisition date is the date on
which control is transferred to the acquirer. The Financial
Statements of subsidiaries are included in the Group Financial
Statements from the date that control commences until the date
that control ceases. The Financial Statements of subsidiaries used
in the preparation of the Consolidated Financial Statements are
prepared for the same reporting year as the Company and are
based on consistent accounting policies.
Adjustments to reconcile loss for the year to net cash inflow from operating activities
Operating activities
Loss for the year
Tax credit on continuing operations
Net finance costs
Other non-cash movements
Loss on sale of property, plant and equipment
Depreciation and impairment of property, plant and equipment
Depreciation and impairment of right-of-use lease assets
Amortisation and impairment of intangible assets
Difference between pension contributions paid and amounts recognised in Income Statement
Increase in inventories
Decrease/(increase) in trade and other receivables
Decrease in trade and other payables
(Decrease)/increase in advances and customer deposits
Movement in provisions
Cash (used in)/generated from operations
Decrease in cash held not available for short-term use
Income taxes paid
Net cash (outflow)/inflow from operating activities
Cash flows from investing activities
Interest received
Payments to acquire property, plant and equipment
Payments to acquire intangible assets
Net cash used in investing activities
Cash flows from financing activities
Interest paid
Proceeds from equity share issue
Proceeds from issue of equity warrants
Principal element of lease payments
Repayment of existing borrowings
Proceeds from existing borrowings
Proceeds from inventory repurchase arrangement
Repayment of inventory repurchase arrangement
Proceeds from new borrowings
Transaction fees paid on issuance of shares
Transaction fees paid on financing activities
Net cash inflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rates on cash and cash equivalents
Cash and cash equivalents at the end of the year
* Further detail on the restatement of the comparative period is disclosed in note 2.
Proceeds from financial instrument utilised as part of refinancing transactions
10
4
4
4
4
21
20
10
8
15
13
28
28
28
28
21
28
28
28
24
(55.5)
143.1
2.2
–
50.8
14.8
168.5
(4.1)
(4.8)
67.4
(118.6)
(52.8)
11.0
(188.5)
(0.9)
(9.2)
(198.6)
2.3
(81.0)
(179.7)
(258.4)
(82.3)
812.8
34.6
6.9
(12.2)
–
76.8
(80.0)
(34.9)
(41.9)
840.2
383.2
107.9
(1.7)
489.4
(1,092.3)
(2.0)
67.6
(4.4)
0.9
38.8
13.3
112.4
(4.4)
(33.3)
(31.8)
(51.8)
48.4
4.5
40.6
(8.7)
(12.5)
19.4
5.0
(82.2)
(228.0)
(305.2)
(52.0)
–
–
–
–
–
(10.9)
(91.5)
102.3
38.7
(4.1)
243.3
(42.5)
144.6
5.8
107.9
1,252.7
260.8
100
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA ANNUAL REPORT 2020
101
101
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2 ACCOUNTING POLICIES (CONTINUED)
FOREIGN CURRENCY TRANSLATION
Transactions in foreign currencies are initially recorded in the
functional currency of the operation by applying the exchange rate
ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of
exchange ruling at the reporting date. All differences are taken to
the Income Statement except for the translational differences on
monetary items that form part of designated hedge relationships.
The assets and liabilities of foreign operations are translated into sterling
at the rate of exchange ruling at the reporting date. Income and
expenses are translated at average exchange rates for the period. The
resulting exchange differences are taken though Other Comprehensive
Income to the translation reserve. On disposal of a foreign entity, the
deferred cumulative amount recognised in the translation reserve
relating to the foreign operation is recognised in the Income Statement.
Non-monetary items that are measured in terms of historical cost in a
foreign currency are translated using the exchange rates as at the dates
of the initial transactions. Non-monetary items measured at fair value in
a foreign currency are translated using the exchange rates at the date
when the fair value was determined.
REVENUE RECOGNITION
Revenue is recognised when the Group satisfies its performance
obligation to supply a product or service to the customer. Revenue
is measured at the fair value of the consideration receivable, deducting
dealer incentives, VAT and other sales taxes or duty. The following
criteria must also be met before revenue is recognised.
Sale of vehicles
Revenue from the sale of vehicles is recognised when control of the
vehicle is passed to the dealer or individual, thus evidencing the
satisfaction of the associated performance obligation under that
contract. Control is passed when the buyer can direct the use of and
obtain substantially all of the benefits of the vehicle which is typically
at the point of despatch. When despatch is deferred at the formal
request of the buyer and a written request to hold the vehicle until a
specified delivery date has been received, revenue is recognised when
the vehicle is ready for despatch and the Group can no longer use or
direct the vehicle to an alternative buyer.
The Group estimates the consideration to which it will be entitled in
exchange for satisfaction of the performance obligation as part of the
sale of a vehicle. Revenue is recognised at the wholesale selling price
net of dealer incentives (variable marketing expense or “VME”). VME is
estimated and accrued for at the time of the wholesale sale to the
dealer, other than those elements of VME connected with retail sales by
the dealer where there is also a contractual requirement for the dealer
to make additional wholesale purchases at that time to receive the
incentive, which is accrued at the time of the retail sale by the dealer to
the end customer.
Warranties are issued on new vehicles sold with no separate purchase
option available to the customer and, on this basis, are accounted for in
accordance with IAS 37. Service packages sold as part of the supply of
a vehicle are accounted for as a separate performance obligation with
the revenue deferred, based on the term of the package, at the original
point of sale. The deferred revenue is released to the Income Statement
over the shorter of the period that the service package covers or the
number of vehicle services that the end user is entitled to.
Where a sale of a vehicle(s) includes multiple performance obligations,
the Group determines the allocation of the total transaction price by
reference to their relative standalone selling prices.
Sales of parts
Revenue from the sale of parts is recognised upon transfer of
control to the customer, generally when the parts are released to
the carrier responsible for transporting them. Where the dealer is
Aston Martin Works Limited, an indirect subsidiary of the
Company, revenue is recognised upon despatch to a customer
outside of the Group.
Servicing and restoration of vehicles
Revenue is recognised upon completion of the service/restoration
typically when the service or restoration is completed in
accordance with the customers’ requirements.
Brands and motorsport
Revenue from brands and motorsport is recognised when the
performance obligations, principally use of the Aston Martin brand
name or supply of a motorsport vehicle, are satisfied. Revenue is
recognised either at a point in time or over a period of time in line
with IFRS 15 according to the terms of the contract.
Customer advance payments
The Group receives advance cash payments from customers to secure
their allocation of a vehicle produced in limited quantities, typically
with a lead time of greater than 12 months. The value of the advance,
both contractually refundable or non-refundable, is held as a contract
liability in the Statement of Financial Position. Upon satisfaction of the
performance obligation, the liability is released to revenue in the
Income statement. If the deposit is returned to the customer prior to
satisfaction of the performance obligation, the contract liability
is derecognised.
Where a significant financing component exists, the contract liability
is increased over the same period of time as the contract liability is
held to account for the time value of money. A corresponding charge
is recognised in the Consolidated Income Statement within finance
expenses. Upon satisfaction of the linked performance obligation, the
liability is released to revenue.
The Group applies a practical expedient for short-term advances
received from customers whereby the advanced payment is not
adjusted for the effects of a significant financing component.
OTHER INCOME
Other income relates to transactions undertaken as part of
recurring business operations, but where the quantum or nature is
concluded material enough to be presented separately on the face
of the Income Statement. Credit losses or related costs associated
with transactions originally recorded in Other Income are classified
on a consistent basis.
FINANCE INCOME
Finance income comprises interest receivable on invested funds
calculated using the effective interest rate method, interest income
and currency gains arising on foreign currency denominated
borrowings (not designated under a hedge relationship) that are
recognised in the Income Statement.
FINANCE EXPENSE
Finance expense comprises interest payable on borrowings
calculated using the effective interest rate method, interest expense
on the net defined benefit pension liability, losses on financial
instruments that are recognised at fair value through the Income
Statement and foreign exchange losses on foreign currency
denominated financial liabilities.
Interest incurred on lease liabilities accounted for under IFRS 16
and interest charged in relation to significant financing components
on customer advance payments are both recognised within
finance expense.
102
102
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2 ACCOUNTING POLICIES (CONTINUED)
FOREIGN CURRENCY TRANSLATION
Transactions in foreign currencies are initially recorded in the
functional currency of the operation by applying the exchange rate
ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of
exchange ruling at the reporting date. All differences are taken to
the Income Statement except for the translational differences on
monetary items that form part of designated hedge relationships.
The assets and liabilities of foreign operations are translated into sterling
at the rate of exchange ruling at the reporting date. Income and
expenses are translated at average exchange rates for the period. The
resulting exchange differences are taken though Other Comprehensive
Income to the translation reserve. On disposal of a foreign entity, the
deferred cumulative amount recognised in the translation reserve
relating to the foreign operation is recognised in the Income Statement.
Sales of parts
Revenue from the sale of parts is recognised upon transfer of
control to the customer, generally when the parts are released to
the carrier responsible for transporting them. Where the dealer is
Aston Martin Works Limited, an indirect subsidiary of the
Company, revenue is recognised upon despatch to a customer
outside of the Group.
Servicing and restoration of vehicles
Revenue is recognised upon completion of the service/restoration
typically when the service or restoration is completed in
accordance with the customers’ requirements.
Brands and motorsport
Revenue from brands and motorsport is recognised when the
performance obligations, principally use of the Aston Martin brand
name or supply of a motorsport vehicle, are satisfied. Revenue is
recognised either at a point in time or over a period of time in line
Non-monetary items that are measured in terms of historical cost in a
with IFRS 15 according to the terms of the contract.
foreign currency are translated using the exchange rates as at the dates
of the initial transactions. Non-monetary items measured at fair value in
a foreign currency are translated using the exchange rates at the date
when the fair value was determined.
REVENUE RECOGNITION
Revenue is recognised when the Group satisfies its performance
obligation to supply a product or service to the customer. Revenue
is measured at the fair value of the consideration receivable, deducting
dealer incentives, VAT and other sales taxes or duty. The following
criteria must also be met before revenue is recognised.
Customer advance payments
The Group receives advance cash payments from customers to secure
their allocation of a vehicle produced in limited quantities, typically
with a lead time of greater than 12 months. The value of the advance,
both contractually refundable or non-refundable, is held as a contract
liability in the Statement of Financial Position. Upon satisfaction of the
performance obligation, the liability is released to revenue in the
Income statement. If the deposit is returned to the customer prior to
satisfaction of the performance obligation, the contract liability
is derecognised.
Sale of vehicles
Where a significant financing component exists, the contract liability
Revenue from the sale of vehicles is recognised when control of the
is increased over the same period of time as the contract liability is
vehicle is passed to the dealer or individual, thus evidencing the
held to account for the time value of money. A corresponding charge
satisfaction of the associated performance obligation under that
is recognised in the Consolidated Income Statement within finance
contract. Control is passed when the buyer can direct the use of and
expenses. Upon satisfaction of the linked performance obligation, the
obtain substantially all of the benefits of the vehicle which is typically
liability is released to revenue.
at the point of despatch. When despatch is deferred at the formal
request of the buyer and a written request to hold the vehicle until a
specified delivery date has been received, revenue is recognised when
the vehicle is ready for despatch and the Group can no longer use or
direct the vehicle to an alternative buyer.
The Group estimates the consideration to which it will be entitled in
exchange for satisfaction of the performance obligation as part of the
sale of a vehicle. Revenue is recognised at the wholesale selling price
net of dealer incentives (variable marketing expense or “VME”). VME is
estimated and accrued for at the time of the wholesale sale to the
dealer, other than those elements of VME connected with retail sales by
the dealer where there is also a contractual requirement for the dealer
to make additional wholesale purchases at that time to receive the
incentive, which is accrued at the time of the retail sale by the dealer to
the end customer.
Warranties are issued on new vehicles sold with no separate purchase
option available to the customer and, on this basis, are accounted for in
accordance with IAS 37. Service packages sold as part of the supply of
a vehicle are accounted for as a separate performance obligation with
the revenue deferred, based on the term of the package, at the original
point of sale. The deferred revenue is released to the Income Statement
over the shorter of the period that the service package covers or the
number of vehicle services that the end user is entitled to.
Where a sale of a vehicle(s) includes multiple performance obligations,
the Group determines the allocation of the total transaction price by
reference to their relative standalone selling prices.
The Group applies a practical expedient for short-term advances
received from customers whereby the advanced payment is not
adjusted for the effects of a significant financing component.
OTHER INCOME
Other income relates to transactions undertaken as part of
recurring business operations, but where the quantum or nature is
concluded material enough to be presented separately on the face
of the Income Statement. Credit losses or related costs associated
with transactions originally recorded in Other Income are classified
on a consistent basis.
FINANCE INCOME
Finance income comprises interest receivable on invested funds
calculated using the effective interest rate method, interest income
and currency gains arising on foreign currency denominated
borrowings (not designated under a hedge relationship) that are
recognised in the Income Statement.
FINANCE EXPENSE
Finance expense comprises interest payable on borrowings
calculated using the effective interest rate method, interest expense
on the net defined benefit pension liability, losses on financial
instruments that are recognised at fair value through the Income
Statement and foreign exchange losses on foreign currency
denominated financial liabilities.
Interest incurred on lease liabilities accounted for under IFRS 16
and interest charged in relation to significant financing components
on customer advance payments are both recognised within
finance expense.
Development costs
Expenditure on internally developed intangible assets, excluding
development costs, is taken to the Income Statement in the year in
which it is incurred. Clearly defined and identifiable development
costs are capitalised under IAS 38 – Intangible Assets after the
following criteria has been met:
• the project’s technical feasibility and commercial viability, based
on an estimate of future cashflows, can be demonstrated when
the project has reached a defined milestone according to the
Group's established product development model;
• technical and financial resources are available for the project;
• an intention to complete the project has been confirmed; and
• the correlation between development costs and future revenues
has been established.
Technology
Patented and unpatented technology acquired in business
combinations is valued using the cost approach. The obsolete element
is determined by reference to the proportion of the product life cycle
that had expired at the acquisition date. Technology acquired from
third parties is included at fair value.
Dealer network
Save for certain direct sales of some special edition and buyer
commissioned vehicles, the Group sells its vehicles exclusively
through a network of dealers. All dealers in the dealer network
are independent dealers with the exception of Aston Martin Works
Limited. To the extent that the Group benefits from the network
the dealer network has been valued based on costs incurred by
the Group.
Amortisation
Following initial recognition, the historic cost model is applied,
with intangible assets being carried at cost less accumulated
amortisation and accumulated impairment losses. Amortisation of
these capitalised costs begins when the asset is available for use.
Intangible assets with a finite life have no residual value and are
amortised on a straight-line basis over their expected useful lives
as follows:
Purchased intellectual property
Development costs
Technology
Software and other
Dealer network
Years
5
1 to 10
10
3 to 10
20
The useful lives and residual values of capitalised development
costs are determined at the time of capitalisation and are reviewed
annually for appropriateness and recoverability.
Amortisation of special vehicle development costs are spread evenly
across the limited quantity of vehicles produced and charged to the
Income Statement at the point of sale for each vehicle.
2 ACCOUNTING POLICIES (CONTINUED)
CURRENT/NON-CURRENT CLASSIFICATION
Current assets include assets held primarily for trading purposes, cash
and cash equivalents, and assets expected to be realised in, or intended
for sale or consumption as part of the Group’s normal identifiable
operating cycle. All other assets are classified as non-current assets.
Current liabilities include liabilities held primarily for trading purposes in
line with the Group’s identifiable normal operating cycle. These
liabilities are expected to be settled as part of the Group’s normal course
of business. All other liabilities are classified as non-current liabilities.
GOODWILL
For acquisitions on or after 1 January 2010, the Group measures
goodwill at the acquisition date as:
• the fair value of the consideration transferred; plus
• the recognised amount of any non-controlling interests in the
acquiree; plus
• the fair value of the existing equity interest in the acquiree; less
• the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
Costs related to the acquisition, other than those associated with the
issue of debt or equity securities, are expensed as incurred.
For the purpose of impairment testing, goodwill is allocated to the
related cash-generating unit. The only cash generating unit of the
Group is that of Aston Martin Lagonda Group as there are no
smaller groups of assets that can be identified with certainty which
generate specific cash flows independent of the inflows generated
by other assets or groups of assets. Where the recoverable amount
of the cash-generating unit is less than the carrying amount, an
impairment loss is recognised in the Income Statement.
INTANGIBLE ASSETS
Intangible assets acquired separately from a business are carried
initially at cost. An intangible asset acquired as part of a business
combination is recognised outside of goodwill if the asset is separable
or arises from contractual or other legal rights and its fair value can be
measured reliably. Fair value adjustments are considered to be
provisional at the first-year end date after the acquisition to allow the
maximum time to elapse for management to make a reliable estimate.
Business combinations
Business combinations are accounted for using the acquisition
method as at the acquisition date, which is the date on which
control is transferred to the Group.
Purchased intellectual property
Purchased intellectual property that is not integral to an item of
property, plant and equipment is recognised separately as an
intangible asset stated at cost less accumulated depreciation.
Brands
An acquired brand is only recognised in the Statement of Financial
Position as an intangible asset where it is supported by a registered
trademark, is established in the market place, the brand could be
sold separately from the rest of the business and where the brand
achieves earnings in excess of those achieved by unbranded
products. The value of an acquired brand is determined by
allocating the purchase price consideration of an acquired business
between the underlying fair values of the tangible assets, goodwill,
brands and other intangible assets acquired, using an income
approach following the multi-period excess earnings methodology.
Acquired brands have an indefinite life when there is no foreseeable
limit to the period over which the asset is expected to generate
cash inflows.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the lease term. If the
Group is reasonably certain to exercise a purchase option, the right-of-
use asset is depreciated over the underlying assets useful life. The
estimated useful lives of right-of-use assets are determined on the same
basis as those of property, plant and equipment. Moreover, the right-of-
use asset is periodically reduced by impairment losses, if any, and
adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the
lease payments unpaid at the commencement date, discounted
using the interest rate implicit in the lease or, if that rate cannot be
readily determined, an estimate of the Group’s incremental
borrowing rate at that point in time.
The Group estimates the incremental borrowing rate by taking a
credit risk adjusted risk-free rate in addition to making other
specific adjustments to account for certain characteristics in the
lease such as geography, type of asset and security pledged.
Lease payments included in the measurement of the lease liability
comprise either fixed lease payments or lease payments subject
to periodic fixed increases. The lease liability is measured at
amortised cost using the effective interest rate method. Lease
payments are allocated between principal and interest cost with
the interest costs charged to the Income Statement over the
lease period.
The liability is remeasured when there is an increase/decrease
in future lease payments arising from a change in an index or
rate specified.
Short-term leases and leases of low-value assets
The Group does not recognise right of use assets and lease
liabilities for short-term leases that have a lease term of less than
twelve months and leases of low-value assets. The Group
recognises the lease payments associated with these leases as an
expense on a straight-line basis in the Income Statement over the
lease term.
Leases under which the Group acts as lessor
When the Group acts as a lessor, it determines at lease inception
whether each lease is a finance lease or an operating lease. To
classify each lease, the Group makes an overall assessment of
whether the lease transfers substantially all the risks and rewards
incidental to the lease of the underlying right-of-use asset. If this is
the case, then the lease is a finance lease; if not, then it is an
operating lease. As part of this assessment, the Group considers
certain indicators such as whether the lease period forms a major
part of the economic life of the asset.
The Group recognises lease payments received under operating leases
on a straight-line basis over the lease term in the Income Statement.
The Group has no sub-leases that qualify as finance leases.
2 ACCOUNTING POLICIES (CONTINUED)
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost less accumulated
depreciation and accumulated impairment losses. Cost comprises
the aggregate amount paid, and the fair value of any other
consideration given, to acquire the asset including directly
attributable costs to make the asset capable of operation.
Borrowing costs directly attributable to assets under construction
are capitalised.
Depreciation is provided on all property, plant and equipment,
other than land, on a straight-line basis to its residual value over its
expected useful life as follows:
Freehold buildings
Plant and machinery
Fixtures and fittings
Tooling
Motor vehicles
Years
30
5 to 30
3 to 12
1 to 15
5 to 9
Tooling is depreciated over the life of the project. Assets in the course
of construction are included in their respective category but are not
depreciated until available for use. The carrying values of property,
plant and equipment are reviewed for impairment if events or
changes in circumstances indicate the carrying value may not be
recoverable and are written down immediately to their recoverable
amount. Useful lives and residual values are reviewed annually
and where adjustments are required these are made prospectively.
An item of property, plant and equipment is derecognised upon
disposal. Any gain or loss arising on the derecognition of the asset
is included in the Income Statement in the period of derecognition.
GOVERNMENT GRANTS
Government grants are recognised in the Income Statement, either
on a systematic basis when the Group recognises the related costs
that the grants are intended to compensate for, or immediately if
the costs have already been incurred.
Government grants related to assets are deducted from the cost of
the asset and amortised over the useful life of the asset.
Government grants are recognised when there is reasonable
assurance that the Group will comply with the relevant conditions
and the grant will be received.
Amounts recognised in the statement of cash flows are presented
net of proceeds of applicable government grants.
RIGHT OF USE ASSETS AND LEASE LIABILITIES – IFRS 16
The Group adopted IFRS 16 using the modified retrospective
approach in 2019.
Leases under which the Group acts as lessee
The Group is a party to lease contracts for buildings, plant and
machinery and IT equipment. The Group recognises a right of use
asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
The right-of-use asset is subsequently depreciated using the straight-line
method from the commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the lease term. If the
Group is reasonably certain to exercise a purchase option, the right-of-
use asset is depreciated over the underlying assets useful life. The
estimated useful lives of right-of-use assets are determined on the same
basis as those of property, plant and equipment. Moreover, the right-of-
use asset is periodically reduced by impairment losses, if any, and
adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the
lease payments unpaid at the commencement date, discounted
using the interest rate implicit in the lease or, if that rate cannot be
readily determined, an estimate of the Group’s incremental
borrowing rate at that point in time.
The Group estimates the incremental borrowing rate by taking a
credit risk adjusted risk-free rate in addition to making other
specific adjustments to account for certain characteristics in the
lease such as geography, type of asset and security pledged.
Lease payments included in the measurement of the lease liability
comprise either fixed lease payments or lease payments subject
to periodic fixed increases. The lease liability is measured at
amortised cost using the effective interest rate method. Lease
payments are allocated between principal and interest cost with
the interest costs charged to the Income Statement over the
lease period.
rate specified.
The liability is remeasured when there is an increase/decrease
in future lease payments arising from a change in an index or
Short-term leases and leases of low-value assets
The Group does not recognise right of use assets and lease
liabilities for short-term leases that have a lease term of less than
twelve months and leases of low-value assets. The Group
recognises the lease payments associated with these leases as an
expense on a straight-line basis in the Income Statement over the
lease term.
Leases under which the Group acts as lessor
When the Group acts as a lessor, it determines at lease inception
whether each lease is a finance lease or an operating lease. To
classify each lease, the Group makes an overall assessment of
incidental to the lease of the underlying right-of-use asset. If this is
the case, then the lease is a finance lease; if not, then it is an
operating lease. As part of this assessment, the Group considers
certain indicators such as whether the lease period forms a major
part of the economic life of the asset.
The Group recognises lease payments received under operating leases
on a straight-line basis over the lease term in the Income Statement.
The Group has no sub-leases that qualify as finance leases.
2 ACCOUNTING POLICIES (CONTINUED)
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost less accumulated
depreciation and accumulated impairment losses. Cost comprises
the aggregate amount paid, and the fair value of any other
consideration given, to acquire the asset including directly
attributable costs to make the asset capable of operation.
Borrowing costs directly attributable to assets under construction
are capitalised.
Depreciation is provided on all property, plant and equipment,
other than land, on a straight-line basis to its residual value over its
expected useful life as follows:
Freehold buildings
Plant and machinery
Fixtures and fittings
Tooling
Motor vehicles
Years
30
5 to 30
3 to 12
1 to 15
5 to 9
Tooling is depreciated over the life of the project. Assets in the course
of construction are included in their respective category but are not
depreciated until available for use. The carrying values of property,
plant and equipment are reviewed for impairment if events or
changes in circumstances indicate the carrying value may not be
recoverable and are written down immediately to their recoverable
amount. Useful lives and residual values are reviewed annually
and where adjustments are required these are made prospectively.
An item of property, plant and equipment is derecognised upon
disposal. Any gain or loss arising on the derecognition of the asset
is included in the Income Statement in the period of derecognition.
GOVERNMENT GRANTS
Government grants are recognised in the Income Statement, either
on a systematic basis when the Group recognises the related costs
that the grants are intended to compensate for, or immediately if
the costs have already been incurred.
Government grants related to assets are deducted from the cost of
the asset and amortised over the useful life of the asset.
Government grants are recognised when there is reasonable
and the grant will be received.
Amounts recognised in the statement of cash flows are presented
net of proceeds of applicable government grants.
RIGHT OF USE ASSETS AND LEASE LIABILITIES – IFRS 16
The Group adopted IFRS 16 using the modified retrospective
approach in 2019.
Leases under which the Group acts as lessee
The Group is a party to lease contracts for buildings, plant and
machinery and IT equipment. The Group recognises a right of use
asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which comprises the
initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received.
assurance that the Group will comply with the relevant conditions
whether the lease transfers substantially all the risks and rewards
2 ACCOUNTING POLICIES (CONTINUED)
IMPAIRMENT OF ASSETS
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Group makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset, or cash-
generating unit’s, fair value less costs to sell and its value in use.
Where the carrying amount of an asset exceeds its recoverable
amount, the asset is considered impaired and is written down
to its recoverable amount. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset.
Impairment losses on continuing operations are recognised in
the Income Statement.
For goodwill, brands and other intangible assets that have an
indefinite life, the recoverable amount is estimated annually
or more frequently when there is an indication that the asset
is impaired.
For intangible assets, property, plant and equipment, and right of use
lease assets that have a finite life, the recoverable amount is estimated
when there is an indication that the asset is impaired.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of the recoverable amount, but so that the increased
carrying amount does not exceed the carrying amount that would
have been determined had no impairment loss been recognised for
the asset in prior periods. A reversal of an impairment loss is
recognised in the Income Statement as income immediately.
INVENTORIES
Inventories are stated at the lower of cost and net realisable value.
For service and restoration projects, net realisable value is the price
at which the project can be invoiced in the normal course of
business after allowing for the costs of realisation. Cost includes all
costs incurred in bringing each product to its present location and
condition, as follows:
• Raw materials, service parts and spare parts – purchase cost on a
first-in, first-out basis;
• Work in progress and finished vehicles – cost of direct materials
and labour plus attributable overheads based on a normalised
level of activity, excluding borrowing costs.
Provisions are made, on a specific basis, for obsolete, slow moving
and defective stocks and if the cost of the service or restoration
project cannot be fully recovered. Inventories held under financing
arrangements are recognised when control is transferred to the Group.
CASH AND CASH EQUIVALENTS
Cash and short-term deposits in the Statement of Financial Position
comprise cash at banks, cash in hand and short-term deposits with
an original maturity of three months or less, subject to insignificant
changes in value and readily convertible to known amounts.
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial assets and liabilities are recognised in the
Statement of Financial Position at fair value when the Group
becomes a party to the contractual provisions of the instrument.
The Group uses derivative instruments to manage its exposure to
foreign exchange risk arising from operating activities. Movements
in the fair value of foreign exchange derivatives not qualifying for
hedge accounting are recognised in finance income or expense.
The accounting policy on derivatives that are designated as
hedging instruments in hedging relationships is detailed in the
hedge accounting policies. A financial asset or liability is
derecognised when the contract that gives rise to it is settled, sold,
cancelled or expires.
FINANCIAL ASSETS AND LIABILITIES
Financial assets are cash or a contractual right to receive cash or
another financial asset from another entity or to exchange financial
assets or liabilities with another entity under conditions that are
potentially favourable to the entity. In addition, contracts that result
in another entity delivering a variable number of its own equity
instruments are financial assets.
Derivative financial instruments including equity options are
held at fair value. All other financial instruments are held at
amortised cost.
TRADE AND OTHER RECEIVABLES
Trade and other receivables are carried at the lower of their
original invoiced value and recoverable amount. A trade
receivable loss allowance is measured at an amount equal to the
lifetime expected credit loss at initial recognition and throughout
the life of the receivable. Receivables are not discounted as the
time value of money is not considered to be material.
TRADE AND OTHER PAYABLES
Trade and other payables are recognised and carried at their
original invoiced value. Trade payables are not discounted to
consider the time value of money as the impact is immaterial.
Refundable and non-refundable customer deposits are held as
contract liabilities within current trade and other payables.
Inventory sale and repurchase arrangements, which are in
substance financing transactions, are included in other payables.
The difference between the sale and repurchase value is accounted
for as part of the effective interest calculation. The effective interest
is charged to the Income Statement over the period from sale
to repayment.
HEDGE ACCOUNTING
The Group uses derivative financial instruments in the form of
forward currency contracts, and certain of its existing US dollar
denominated borrowings, to hedge the foreign currency risk of
sales (including inter-group sales) of finished vehicles and external
purchases of component parts. For the purpose of hedge
accounting, hedges are classified as cash flow hedges when
hedging the exposure to variability in cashflows is either
attributable to a particular risk associated with a recognised asset
or liability, or a highly probably forecast transaction, or the foreign
currency risk of an unrecognised firm commitment.
At the inception of the hedge relationship, the Group formally
designates and documents the hedge relationship and the risk
management objectives and strategy for undertaking the hedge.
The documentation includes identification of the hedging
instrument, the hedged item, the nature of the risk being hedged
and how the Group will assess hedge effectiveness. A hedging
relationship qualifies for hedge accounting if it meets all the
following effectiveness requirements:
• There is an economic relationship between the hedged item and
the hedging instrument;
• The effect of credit risk does not dominate the value changes
resulting from that economic relationship; and
• The theoretical hedge ratio of the hedging relationship is the
same as practically occurs.
Derivative financial instruments
The effective portion of the gain or loss on the hedging instrument
is recognised in Other Comprehensive Income in the cash flow
hedge reserve, while any ineffective portion is recognised
immediately in the Income Statement. The Group designates only
the spot element of forward contracts as a hedging instrument. The
forward element is recognised in Other Comprehensive Income
and accumulated in a separate component of equity under cost of
hedging reserve.
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2 ACCOUNTING POLICIES (CONTINUED)
HEDGE ACCOUNTING (CONTINUED)
Financial Liability as a hedge
Foreign currency differences arising on the retranslation of a
financial liability designated as a cash flow hedge are recognised
directly in Other Comprehensive Income to the extent that the
hedge is effective. To the extent that the hedge is ineffective, such
differences are recognised in the Income Statement.
Subsequent accounting
The amounts accumulated in both the cash flow hedge reserve and
the cost of hedging reserve are accounted for depending on the
nature of the underlying hedged transaction. If the hedged
transaction subsequently results in the recognition of a non-
financial item, the amount accumulated in the Hedge Reserve is
removed and included in the initial cost of the hedge item. For any
other cash flow hedges, the amount accumulated in the Hedge
Reserve is reclassified to the Income Statement as a reclassification
adjustment in the same period or periods during which the hedged
cashflow affects profit or loss.
If hedge accounting is discontinued, the amount that has been
accumulated in the Hedge Reserve must remain in equity if the
hedged future cash flows are still expected to occur. Otherwise, the
amount will be immediately reclassified to the Income Statement as a
reclassification adjustment. After discontinuation, once the hedged
cash flow occurs, any amount remaining in the Hedge Reserve is
accounted for depending on the nature of the underlying transaction.
BORROWINGS
Borrowings are recognised initially at fair value less attributable
transaction costs. Subsequent to initial recognition, borrowings are
stated at amortised cost with any difference between the amount
initially recorded and redemption value being recognised in the
Income Statement as a finance expense over the period of the
borrowings on an effective interest basis.
PENSIONS
The Group operates a defined contribution pension plan under
which the Group pays fixed contributions into a separate entity and
has no legal or constructive obligation to pay further amounts.
Obligations for contributions to defined contribution pension plans
are recognised as an expense in the Income Statement in the
periods during which services are rendered by employees.
The Group operates a defined benefit pension plan, which is
contracted out of the state scheme. The Group’s net obligation in
respect of defined benefit plans is calculated for the plan by
estimating the amount of the future benefit that employees have
earned in the current and prior periods, discounting that amount
and deducting the fair value of any plan assets.
The calculation of defined benefit obligations is performed
annually by a qualified actuary using the projected unit credit
method. When the calculation results in a potential asset for the
Group, the recognised asset is limited to the present value of
economic benefits available in the form of any future refunds from
the plan or reductions in future contributions to the plan.
When the calculation results in a deficit for the Group, the
recognised liability is adjusted for the discounted value of future
deficit reduction contributions in excess of the calculated deficit.
Remeasurements of the net defined benefit asset or liability, which
comprise actuarial gains and losses, the interest on plan assets, and
the effect of the asset ceiling or minimum funding requirements,
are recognised immediately in Other Comprehensive Income.
The Group determines the net interest expense (income) on the
net defined benefit asset or liability, considering any changes in
the net defined asset or liability during the period as a result of
contributions and benefit payments. Net interest expense and other
expenses related to defined benefit plans are recognised in the
Income Statement.
When the benefits of the plan are changed or when a plan is
curtailed, the resulting change in benefit that relates to past service
cost or the gain or loss on curtailment is recognised immediately in
the Income Statement. The Group recognises gains and losses on the
settlement of a defined benefit plan when the settlement occurs.
SHARE-BASED PAYMENT TRANSACTIONS
The fair value of equity-classified share-based awards with
both market and non-market-based performance conditions is
recognised as an expense within administrative and other expenses
in the Income Statement, with a corresponding increase in equity
over the period that the employees become unconditionally
entitled to the shares.
The amount recognised as an expense is adjusted to reflect both
non-market-based conditions, such as continued employment and
profit related metrics, in addition to market-based conditions
driven by an estimation of the quantum of awards expected to vest
at the date of grant.
Where the Group obtains goods or services in exchange for the
issuance of shares, these are accounted for as equity-settled
share-based payments in accordance with IFRS 2. Where the fair
value of the goods or services can be estimated reliably, these are
recorded at fair value with a corresponding increase in equity.
PROVISIONS
The Group provides product warranties on all new vehicle sales.
Warranty provisions are recognised when vehicles are sold or
when new warranty programs are initiated. Based on historical
warranty claim experience, assumptions are made on the type and
extent of future warranty claims including non-contractual
warranty claims as well as on possible recall campaigns. These
assessments are based on the frequency and extent of vehicle faults
and defects in the past. In addition, the estimates include
assumptions on the potential repair costs per vehicle and the
effects of possible time or mileage limits. The provisions are
regularly adjusted to reflect new information.
Restructuring provisions are recognised only when the Group has a
constructive obligation, which is when:
• there is a detailed formal plan that identifies the business or part
of the business concerned, the location and number of
employees affected, the detailed estimate of the associated costs,
and the timeline; and
• the employees affected have been notified of the plan’s main
features.
INCOME TAXES
Tax on the profit or loss for the period represents the sum of the tax
currently payable and deferred tax. Tax is recognised in the Income
Statement except to the extent that it relates to items recognised
directly in equity or Other Comprehensive Income whereby the tax
treatment follows that of the underlying item.
Current tax assets and liabilities are measured at the amount
expected to be recovered from or paid to the taxation authorities,
based on tax rates and laws that are enacted or substantively
enacted by the reporting date.
The Group is subject to corporate taxes in a number of different
jurisdictions and judgement is required in determining the
appropriate provision for transactions where the ultimate tax
determination is uncertain. In such circumstances, the Group
recognises liabilities for anticipated taxes based on the best
information available and where the anticipated liability is both
probable and can be estimated. Any interest and penalties accrued,
if applicable, are included in income taxes in both the Consolidated
Income Statement and the Consolidated Statement of Financial
Position. Where the final outcome of such matters differs from the
amount recorded, any differences may impact the income tax and
deferred tax provisions in the period in which the final determination
is made.
106
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2 ACCOUNTING POLICIES (CONTINUED)
HEDGE ACCOUNTING (CONTINUED)
Financial Liability as a hedge
Foreign currency differences arising on the retranslation of a
financial liability designated as a cash flow hedge are recognised
directly in Other Comprehensive Income to the extent that the
hedge is effective. To the extent that the hedge is ineffective, such
differences are recognised in the Income Statement.
Subsequent accounting
The amounts accumulated in both the cash flow hedge reserve and
the cost of hedging reserve are accounted for depending on the
nature of the underlying hedged transaction. If the hedged
transaction subsequently results in the recognition of a non-
financial item, the amount accumulated in the Hedge Reserve is
removed and included in the initial cost of the hedge item. For any
other cash flow hedges, the amount accumulated in the Hedge
Reserve is reclassified to the Income Statement as a reclassification
When the benefits of the plan are changed or when a plan is
curtailed, the resulting change in benefit that relates to past service
cost or the gain or loss on curtailment is recognised immediately in
the Income Statement. The Group recognises gains and losses on the
settlement of a defined benefit plan when the settlement occurs.
SHARE-BASED PAYMENT TRANSACTIONS
The fair value of equity-classified share-based awards with
both market and non-market-based performance conditions is
recognised as an expense within administrative and other expenses
in the Income Statement, with a corresponding increase in equity
over the period that the employees become unconditionally
entitled to the shares.
The amount recognised as an expense is adjusted to reflect both
non-market-based conditions, such as continued employment and
profit related metrics, in addition to market-based conditions
driven by an estimation of the quantum of awards expected to vest
at the date of grant.
adjustment in the same period or periods during which the hedged
Where the Group obtains goods or services in exchange for the
cashflow affects profit or loss.
If hedge accounting is discontinued, the amount that has been
accumulated in the Hedge Reserve must remain in equity if the
hedged future cash flows are still expected to occur. Otherwise, the
issuance of shares, these are accounted for as equity-settled
share-based payments in accordance with IFRS 2. Where the fair
value of the goods or services can be estimated reliably, these are
recorded at fair value with a corresponding increase in equity.
amount will be immediately reclassified to the Income Statement as a
PROVISIONS
reclassification adjustment. After discontinuation, once the hedged
The Group provides product warranties on all new vehicle sales.
cash flow occurs, any amount remaining in the Hedge Reserve is
Warranty provisions are recognised when vehicles are sold or
accounted for depending on the nature of the underlying transaction.
when new warranty programs are initiated. Based on historical
BORROWINGS
Borrowings are recognised initially at fair value less attributable
transaction costs. Subsequent to initial recognition, borrowings are
stated at amortised cost with any difference between the amount
initially recorded and redemption value being recognised in the
Income Statement as a finance expense over the period of the
borrowings on an effective interest basis.
PENSIONS
The Group operates a defined contribution pension plan under
which the Group pays fixed contributions into a separate entity and
warranty claim experience, assumptions are made on the type and
extent of future warranty claims including non-contractual
warranty claims as well as on possible recall campaigns. These
assessments are based on the frequency and extent of vehicle faults
and defects in the past. In addition, the estimates include
assumptions on the potential repair costs per vehicle and the
effects of possible time or mileage limits. The provisions are
regularly adjusted to reflect new information.
Restructuring provisions are recognised only when the Group has a
constructive obligation, which is when:
has no legal or constructive obligation to pay further amounts.
• there is a detailed formal plan that identifies the business or part
Obligations for contributions to defined contribution pension plans
of the business concerned, the location and number of
are recognised as an expense in the Income Statement in the
employees affected, the detailed estimate of the associated costs,
periods during which services are rendered by employees.
and the timeline; and
The Group operates a defined benefit pension plan, which is
contracted out of the state scheme. The Group’s net obligation in
respect of defined benefit plans is calculated for the plan by
estimating the amount of the future benefit that employees have
earned in the current and prior periods, discounting that amount
and deducting the fair value of any plan assets.
The calculation of defined benefit obligations is performed
annually by a qualified actuary using the projected unit credit
method. When the calculation results in a potential asset for the
Group, the recognised asset is limited to the present value of
economic benefits available in the form of any future refunds from
the plan or reductions in future contributions to the plan.
When the calculation results in a deficit for the Group, the
recognised liability is adjusted for the discounted value of future
deficit reduction contributions in excess of the calculated deficit.
Remeasurements of the net defined benefit asset or liability, which
comprise actuarial gains and losses, the interest on plan assets, and
the effect of the asset ceiling or minimum funding requirements,
are recognised immediately in Other Comprehensive Income.
The Group determines the net interest expense (income) on the
net defined benefit asset or liability, considering any changes in
the net defined asset or liability during the period as a result of
contributions and benefit payments. Net interest expense and other
expenses related to defined benefit plans are recognised in the
Income Statement.
• the employees affected have been notified of the plan’s main
features.
INCOME TAXES
Tax on the profit or loss for the period represents the sum of the tax
currently payable and deferred tax. Tax is recognised in the Income
Statement except to the extent that it relates to items recognised
directly in equity or Other Comprehensive Income whereby the tax
treatment follows that of the underlying item.
Current tax assets and liabilities are measured at the amount
expected to be recovered from or paid to the taxation authorities,
based on tax rates and laws that are enacted or substantively
enacted by the reporting date.
The Group is subject to corporate taxes in a number of different
jurisdictions and judgement is required in determining the
appropriate provision for transactions where the ultimate tax
determination is uncertain. In such circumstances, the Group
recognises liabilities for anticipated taxes based on the best
information available and where the anticipated liability is both
probable and can be estimated. Any interest and penalties accrued,
if applicable, are included in income taxes in both the Consolidated
Income Statement and the Consolidated Statement of Financial
Position. Where the final outcome of such matters differs from the
amount recorded, any differences may impact the income tax and
deferred tax provisions in the period in which the final determination
is made.
2 ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES (CONTINUED)
Deferred tax is recognised on all temporary differences arising
between the tax bases of assets and liabilities and their carrying
amounts in the Financial Statements, with the following exceptions:
• where the temporary difference arises from the initial recognition
of goodwill or of an asset or liability in a transaction that is not a
business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss;
• in respect of taxable temporary differences associated with
investments in subsidiaries, where the timing of the reversal of
the temporary differences can be controlled and it is probable
that the temporary differences will not reverse in the foreseeable
future; and
• deferred income tax assets are recognised only to the extent that
it is probable that taxable profit will be available against which
the deductible temporary differences, carried forward tax credits
or tax losses can be utilised.
Deferred tax assets and liabilities are measured on an undiscounted
basis at the tax rates that are expected to apply when the related
asset is realised, or liability is settled. Deferred tax assets and
liabilities are disclosed on a net basis where a right of offset exists.
EQUITY INSTRUMENTS
An equity instrument is any contract that evidences a residual
interest in the assets of the Group after deducting all of its
liabilities. Equity instruments issued by the Group are recorded at
the proceeds received, net of direct issue costs. Dividends and
distributions relating to equity instruments are debited direct
to equity.
ADJUSTING ITEMS
An adjusting item is disclosed separately in the Consolidated
Statement of Comprehensive Income where the quantum, nature or
volatility of such items would otherwise distort the underlying
trading performance of the Group including where they are not
expected to repeat in future periods. The tax effect is also included.
Impairment of indefinite and finite life intangible assets
The Group determines whether indefinite life intangible assets are
impaired on an annual basis, or more frequently when there is an
indication that the asset is impaired. This requires an estimation of
the value-in-use derived from the estimation of future cash flows
utilising a suitable discount rate (see note 14).
The Group has determined that for goodwill and other intangibles
with indefinite lives, there is one cash-generating unit. This is on
the basis that there are no smaller groups of assets that can be
identified with certainty which generate specific cash flows that are
independent of the inflows generated by other assets or groups
of assets.
For intangible assets that have a finite life, the recoverable amount
is estimated when there is an indication that the asset is impaired.
The result of the calculation of the value-in-use is sensitive to the
assumptions made and is a subjective estimate (see note 14).
Measurement of pension assets and obligations
There are a range of assumptions that could be made, and the
measurement of defined benefit pension assets and obligations is
very sensitive to these. Note 26 provides information on these
assumptions and the inherent sensitivities.
Measurement of defined benefit pension obligations requires
estimation of future changes in salaries and inflation, mortality
rates, the expected return on assets and suitable discount rates
(see note 26).
NEW ACCOUNTING STANDARDS
In 2020 the following standard were endorsed by the EU, became
effective and adopted by the Group:
• Definition of a Business – Amendments to IFRS 3
• Definition of material – amendments to IAS 1 and IAS 8
(effective 1 January 2020).
• Interest rate benchmark reform – amendments to IFRS 9, IAS 39
and IFRS 7.
• The Conceptual Framework for Financial Reporting
Details in respect of adjusting items recognised in the current and
prior year are set out in note 6 in the Financial Statements.
These standards have not had a material impact on the Group's
reported financial performance or position.
The following standard amendments, which are not yet effective or
endorsed by the EU and have not been early adopted by the
Group, will be adopted in future accounting periods:
• Interest Rate Benchmark Reform – Phase 2 – Amendments to
IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16.
• Classification of Liabilities as Current or Non-current –
Amendments to IAS 1
These are not expected to have a material impact on the Group.
CRITICAL ACCOUNTING ASSUMPTIONS AND KEY SOURCES
OF ESTIMATION UNCERTAINTY ESTIMATES
The preparation of Financial Statements requires management to
make estimates and assumptions that affect the amounts reported
for assets and liabilities as at the reporting date and the amounts
reported for revenues and expenses during the period. The nature
of estimation means that actual outcomes could differ from
those estimates.
In the process of applying the Group’s accounting policies, which
are described in this note, management has made estimates. Other
than as set out below, variations in the remaining estimates are not
considered to give rise to a significant risk of a material adjustment
to the carrying amounts of assets and liabilities within the next
financial year. The Group consider it appropriate to identify the
nature of the estimates used in preparing the Financial Statements
and the main sources of estimation uncertainty are:
• impairment of indefinite life intangible assets (including
goodwill);
• impairment of finite life intangible assets;
• the measurement of defined benefit pension assets and
obligations;
106
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
107
107
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2 ACCOUNTING POLICIES (CONTINUED)
PRIOR YEAR RESTATEMENT
The financial results for the year ended 31 December 2019 have been restated to reflect a prior period adjustment in respect of variable
marketing expense (“VME”). Pursuant to IFRS 15, future VME in the US should be estimated and accrued for on the balance sheet of the
Group and deducted from revenue at the point revenue is recognised for the wholesale of the vehicle to the dealer rather than at the time of
retail sale by the dealer to the end customer, as had previously been the approach. Outside of the US, VME continues to be accrued at the
time of the retail sale by the dealer to the end customer, reflecting the contractual requirement that the dealer has to make additional
wholesale purchases at that time in order to receive the VME. The impact of this correction is a reduction in revenue of £16.8m to the 2019
reported result. The £13.8m and £29.1m impact on the Statement of Financial Position as at 1 January 2019 and 31 December 2019
respectively represents the additional accrual required at those points in time.
The Statement of Financial Position of the Group as at 31 December 2019, and the Income Statement for the year ended 31 December
2019, have been restated to reflect the correction of this error including the related adjustments to tax. This had no impact on the timing of
the Company’s historic or forecast cash flows. The adjustment results in an earlier accrual for VME in the United States than previously
reported and impacts the Statement of Financial Position and Income Statement as set out below.
The Group’s retained earnings have been restated to correct for a brought forward taxation error, with a corresponding £2.9m entry made to
reduce trade and other receivables at 1 January 2019 and increase trade and other payables at 31 December 2019.
Consolidated Statement of Comprehensive Income (extract)
Year ended 31 December 2019
Revenue
Cost of sales
Gross profit
Selling and distribution expenses
Administrative expenses
Other expense
Operating loss
Finance income
Finance expense
Loss before income tax
Income tax (charge)/credit
Loss for the period
(Loss)/profit for the period attributable to:
Owners of the group
Non-controlling interests
Other comprehensive income for the period, net of income tax
Total comprehensive loss for the period
Total comprehensive (loss)/income for the period attributable to:
Owners of the group
Non-controlling interests
Earnings per ordinary share 1
Basic
Diluted
As
Reported
£m
Increase/
(decrease)
£m
As
Restated
£m
997.3
(642.7)
354.6
(95.0)
(277.3)
(19.0)
(36.7)
16.3
(83.9)
(104.3)
(0.1)
(104.4)
(113.2)
8.8
(104.4)
17.3
(87.1)
(16.8)
–
(16.8)
–
1.5
–
(15.3)
–
–
980.5
(642.7)
337.8
(95.0)
(275.8)
(19.0)
(52.0)
16.3
(83.9)
(15.3)
(119.6)
2.1
2.0
(13.2)
(117.6)
(13.2)
(126.4)
–
8.8
(13.2)
(117.6)
–
17.3
(13.2)
(100.3)
(95.9)
8.8
(87.1)
(13.2)
(109.1)
–
8.8
(13.2)
(100.3)
(49.6p)
(49.6p)
(5.8p)
(5.8p)
(55.4p)
(55.4p)
1. The restated earnings per ordinary share presented quantifies the impact of the error on the earnings per share previously disclosed. In addition to the above,
resulting from the bonus element of the rights issue in April 2020 and the share consolidation completed in December 2020 (see note 27), the comparative
basic and diluted earnings per ordinary share have been represented in the Consolidated Statement of Comprehensive Income as described in note 12 in
compliance with IAS 33.
108
108
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA ANNUAL REPORT 2020
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2 ACCOUNTING POLICIES (CONTINUED)
PRIOR YEAR RESTATEMENT (CONTINUED)
Consolidated Statement of Financial Position (extract)
As at 31 December 2019
Trade and other payables – current
Deferred tax liability
Net Assets
Retained earnings
Equity attributable to owners of the group
Non-controlling interests
Total shareholders' equity
As at 1 January 2019
Trade and other payables – current
Trade and other receivables
Deferred tax asset
Net Assets
Retained earnings
Equity attributable to owners of the group
Non-controlling interests
Total shareholders' equity
As
Reported
£m
Increase/
(decrease)
£m
702.1
12.6
358.9
(13.5)
344.8
14.1
358.9
32.0
(2.7)
(29.3)
(29.3)
(29.3)
–
(29.3)
As
Restated
£m
734.1
9.9
329.6
(42.8)
315.5
14.1
329.6
As
Reported *
£m
Increase/
(decrease)
£m
As
Restated
£m
641.4
243.0
32.1
447.2
97.2
437.0
10.2
447.2
13.8
(2.9)
0.6
(16.1)
(16.1)
(16.1)
–
(16.1)
655.2
240.1
32.7
431.1
81.1
420.9
10.2
431.1
* As reported at 31 December 2018, as adjusted for the adoption of IFRS 16.
There is no overall impact on the cashflow in any of the previous periods from the restatement mentioned above. The Income Statement
impact and the movement in the Statement of Financial Position is all classified within cashflows from operations and hence no impact on
overall cashflow sub-headings.
Where the notes included in these Consolidated Financial Statements provide additional analysis in respect of amounts impacted by the
above restatements, the comparative values presented have been re-analysed on a consistent basis.
2 ACCOUNTING POLICIES (CONTINUED)
PRIOR YEAR RESTATEMENT
The financial results for the year ended 31 December 2019 have been restated to reflect a prior period adjustment in respect of variable
marketing expense (“VME”). Pursuant to IFRS 15, future VME in the US should be estimated and accrued for on the balance sheet of the
Group and deducted from revenue at the point revenue is recognised for the wholesale of the vehicle to the dealer rather than at the time of
retail sale by the dealer to the end customer, as had previously been the approach. Outside of the US, VME continues to be accrued at the
time of the retail sale by the dealer to the end customer, reflecting the contractual requirement that the dealer has to make additional
wholesale purchases at that time in order to receive the VME. The impact of this correction is a reduction in revenue of £16.8m to the 2019
reported result. The £13.8m and £29.1m impact on the Statement of Financial Position as at 1 January 2019 and 31 December 2019
respectively represents the additional accrual required at those points in time.
The Statement of Financial Position of the Group as at 31 December 2019, and the Income Statement for the year ended 31 December
2019, have been restated to reflect the correction of this error including the related adjustments to tax. This had no impact on the timing of
the Company’s historic or forecast cash flows. The adjustment results in an earlier accrual for VME in the United States than previously
reported and impacts the Statement of Financial Position and Income Statement as set out below.
The Group’s retained earnings have been restated to correct for a brought forward taxation error, with a corresponding £2.9m entry made to
reduce trade and other receivables at 1 January 2019 and increase trade and other payables at 31 December 2019.
Consolidated Statement of Comprehensive Income (extract)
Year ended 31 December 2019
Revenue
Cost of sales
Gross profit
Selling and distribution expenses
Administrative expenses
Other expense
Operating loss
Finance income
Finance expense
Loss before income tax
Income tax (charge)/credit
Loss for the period
(Loss)/profit for the period attributable to:
Owners of the group
Non-controlling interests
Other comprehensive income for the period, net of income tax
Total comprehensive loss for the period
Total comprehensive (loss)/income for the period attributable to:
Owners of the group
Non-controlling interests
Earnings per ordinary share 1
Basic
Diluted
compliance with IAS 33.
Reported
As
£m
Increase/
(decrease)
997.3
(642.7)
354.6
(95.0)
(277.3)
(19.0)
(36.7)
16.3
(83.9)
(104.3)
(0.1)
(104.4)
(113.2)
8.8
(104.4)
17.3
(87.1)
£m
(16.8)
(16.8)
1.5
(15.3)
Restated
As
£m
980.5
(642.7)
337.8
(95.0)
(275.8)
(19.0)
(52.0)
16.3
(83.9)
(15.3)
(119.6)
2.1
2.0
(13.2)
(117.6)
(13.2)
(126.4)
(13.2)
(117.6)
8.8
17.3
(13.2)
(100.3)
–
–
–
–
–
–
–
–
(95.9)
8.8
(87.1)
(13.2)
(109.1)
8.8
(13.2)
(100.3)
(49.6p)
(49.6p)
(5.8p)
(5.8p)
(55.4p)
(55.4p)
1. The restated earnings per ordinary share presented quantifies the impact of the error on the earnings per share previously disclosed. In addition to the above,
resulting from the bonus element of the rights issue in April 2020 and the share consolidation completed in December 2020 (see note 27), the comparative
basic and diluted earnings per ordinary share have been represented in the Consolidated Statement of Comprehensive Income as described in note 12 in
108
ASTON MARTIN LAGONDA ANNUAL REPORT 2020
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
109
109
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
3 SEGMENTAL REPORTING
Operating segments are defined as components of the Group about which separate financial information is available and is evaluated
regularly by the chief operating decision-maker in assessing performance. The Group has only one operating segment, the automotive
segment, and therefore no separate segmental report is disclosed. The automotive segment includes all activities relating to design,
development, manufacture and marketing of vehicles including consulting services; as well as the sale of parts, servicing and automotive
brand activities from which the Group derives its revenues.
Revenue
Analysis by category
Sale of vehicles
Sale of parts
Servicing of vehicles
Brands and motorsport
Revenue
Analysis by geographic location
United Kingdom
The Americas
Rest of Europe, Middle East & Africa
Asia Pacific
2020
£m
535.1
56.6
6.6
13.5
611.8
2020
£m
106.0
162.5
184.9
158.4
611.8
2019
restated
£m
880.8
63.0
9.3
27.4
980.5
2019
restated
£m
229.6
278.5
231.2
241.2
980.5
NON-CURRENT ASSETS OTHER THAN FINANCIAL INSTRUMENTS AND DEFERRED TAX ASSETS BY GEOGRAPHIC LOCATION
As at 31 December 2020
United Kingdom
The Americas
Rest of Europe
Asia Pacific
As at 31 December 2019
United Kingdom
The Americas
Rest of Europe
Asia Pacific
Right-of-use
lease asset
£m
Property, plant,
equipment
£m
62.0
0.1
0.1
9.2
71.4
281.1
1.6
104.1
2.8
389.6
Right-of-use
lease asset
£m
Property, plant,
equipment
£m
69.1
0.2
2.5
10.0
81.8
285.0
0.5
65.0
–
350.5
Goodwill
£m
85.4
–
–
–
Intangible
assets
£m
1,095.4
–
156.0
–
85.4
1,251.4
Goodwill
£m
85.4
–
–
–
Intangible
assets
£m
1,081.3
–
16.9
–
85.4
1,098.2
Other
receivables
£m
–
–
0.9
–
0.9
Other
receivables
£m
–
–
1.8
–
1.8
Total
£m
1,523.9
1.7
261.1
12.0
1,798.7
Total
£m
1,520.8
0.7
86.2
10.0
1,617.7
110
110
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
3 SEGMENTAL REPORTING
Operating segments are defined as components of the Group about which separate financial information is available and is evaluated
regularly by the chief operating decision-maker in assessing performance. The Group has only one operating segment, the automotive
segment, and therefore no separate segmental report is disclosed. The automotive segment includes all activities relating to design,
development, manufacture and marketing of vehicles including consulting services; as well as the sale of parts, servicing and automotive
brand activities from which the Group derives its revenues.
Revenue
Analysis by category
Sale of vehicles
Sale of parts
Servicing of vehicles
Brands and motorsport
Revenue
Analysis by geographic location
United Kingdom
The Americas
Asia Pacific
Rest of Europe, Middle East & Africa
As at 31 December 2020
United Kingdom
The Americas
Rest of Europe
Asia Pacific
As at 31 December 2019
United Kingdom
The Americas
Rest of Europe
Asia Pacific
NON-CURRENT ASSETS OTHER THAN FINANCIAL INSTRUMENTS AND DEFERRED TAX ASSETS BY GEOGRAPHIC LOCATION
Right-of-use
Property, plant,
lease asset
equipment
Other
receivables
85.4
1,251.4
Goodwill
£m
85.4
–
–
–
–
–
–
Goodwill
£m
85.4
Intangible
assets
£m
1,095.4
156.0
–
–
Intangible
assets
£m
1,081.3
16.9
–
–
85.4
1,098.2
£m
281.1
1.6
104.1
2.8
389.6
£m
285.0
0.5
65.0
–
350.5
£m
62.0
0.1
0.1
9.2
71.4
£m
69.1
0.2
2.5
10.0
81.8
Right-of-use
Property, plant,
lease asset
equipment
Other
receivables
2020
£m
535.1
56.6
6.6
13.5
611.8
2020
£m
106.0
162.5
184.9
158.4
611.8
£m
–
–
0.9
–
0.9
£m
–
–
1.8
–
1.8
2019
restated
£m
880.8
63.0
9.3
27.4
980.5
2019
restated
£m
229.6
278.5
231.2
241.2
980.5
Total
£m
1,523.9
1.7
261.1
12.0
1,798.7
1,520.8
Total
£m
0.7
86.2
10.0
1,617.7
4 OPERATING LOSS
The Group’s operating loss is stated after charging/(crediting):
Depreciation and impairment of property, plant and equipment (note 15)
Depreciation absorbed into inventory under standard costing
Depreciation and impairment of right-of-use lease assets (note 16)
Amortisation and impairment of intangible assets (note 13)
Amortisation absorbed into inventory under standard costing
Loss on sale of property, plant and equipment
Depreciation, amortisation and impairment charges included in Administrative and other operating expenses
Increase in trade receivable loss allowance – Other Expense (notes 5 and 23)
Increase in trade receivable loss allowance – Administrative and other operating expenses (note 23)
Net foreign currency differences
Cost of inventories recognised as an expense
Impairment of inventories held (note 14)
Write-down of inventories to net realisable value
Increase in fair value of other derivative contracts
Expenditure related grant income*
Operating lease payments (gross of sub-lease receipts)
Sub-lease receipts
Auditor’s remuneration:
• Plant, machinery and IT equipment**
• Land and buildings
• Audit of these Financial Statements
• Audit of Financial Statements of subsidiaries pursuant to legislation
• Audit related assurance
• Services related to corporate finance transactions
• Other non-audit services
Research and development expenditure recognised as an expense
Total research and development expenditure
Capitalised research and development expenditure (note 13)
Research and development expenditure recognised as an expense
2020
£m
52.5
(1.7)
14.8
168.8
(0.3)
–
234.1
–
1.5
(15.9)
372.7
–
13.5
1.1
(12.5)
0.6
(0.7)
0.3
0.3
0.1
0.4
1.0
4.5
2020
£m
182.1
(177.6)
4.5
2019
£m
41.8
(3.0)
13.3
116.1
(3.2)
0.9
165.9
19.0
1.0
8.6
538.2
2.3
2.5
–
(0.2)
1.2
(0.3)
0.2
0.3
–
0.1
–
–
2019
£m
226.0
(226.0)
–
* Government grant income has been offset against the qualifying employee expenditure within the Consolidated Income Statement. Grant income in 2020
represents government wage subsidies paid through the Job Retention Scheme. There are no unfulfilled conditions outstanding and the grant has been
recognised in full.
** Election taken by the Group to not recognise right-of-use lease assets and equivalent lease liabilities for short-term and low-value leases.
5 OTHER EXPENSE
Loss allowance recognised in relation to the sale of intellectual property
2020
£m
–
2019
£m
(19.0)
During the year ended 31 December 2019 the recoverability of the outstanding receivable from the sale of certain legacy intellectual
property was assessed as doubtful resulting in a loss allowance of £19.0m recognised as a charge to the Consolidated Income Statement.
110
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
111
111
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
6 ADJUSTING ITEMS
Adjusting operating expenses:
Impairment of assets (note 14):
Development costs (note 13) 1
Plant, machinery, fixtures and fittings (note 15) 2
Tooling (note 15) 1
Inventory 1
Right-of-use lease assets (note 16) 2
Restructuring:
Employee restructuring costs 3
Motorsport exit costs 4
Director settlement arrangements and incentive payments 5
Initial Public Offering costs:
Staff incentives 6
Professional fees 7
Adjusting finance income:
Foreign exchange gain on financial instrument utilised during refinance transactions 8
Adjusting finance expenses:
Premium paid on the early redemption of Senior Secured Notes 8
Write-off of capitalised borrowing fees upon early settlement of Senior Secured Notes 8
Loss on financial instruments recognised at fair value through Income Statement 9
Professional fees incurred on refinancing expensed directly to the Income Statement 10
Movement on derivatives not qualifying for hedge accounting (note 9) 11
Total adjusting items before tax
Tax credit on adjusting items 12
Adjusting items after tax
2020
£m
2019
£m
(69.4)
(3.8)
(3.3)
–
(2.8)
(79.3)
(12.4)
(6.2)
(2.7)
2.6
–
(98.0)
6.9
(21.4)
(7.6)
(45.3)
(1.2)
–
(68.6)
(166.6)
32.9
(133.7)
(27.7)
(4.7)
(3.7)
(2.3)
(1.0)
(39.4)
(2.8)
–
–
0.6
(0.5)
(42.1)
–
–
–
–
–
(6.6)
(6.6)
(48.7)
8.8
(39.9)
1. On 27 October the Group announced an expanded and enhanced technology agreement with Mercedes-Benz AG, giving access to powertrain architecture
(for conventional, hybrid, and electric vehicles) and future oriented electric/electronic architecture for all product launches through to 2027. Following
incorporation of the benefits of this enhanced partnership on the Group’s business plan, and other cycle plan updates following the strategic review of the
business plan the carrying value of capitalised tooling and intangible development costs have been impaired by £72.7m to reflect the change in future
vehicle powertrains and electronic architecture.
Announced in 2019, the Lagonda brand was expected to be relaunched no earlier than 2025 and while development of Rapide E was substantially
complete, the programme was paused pending further review. An assessment of the carrying value of Rapide E assets, and assets carried across from Rapide
as part of the Group’s carry-over-carry-across (“COCA”) principle resulted in an impairment charge of £39.4m – see note 14 for further details.
2. In 2020 the Group commenced a rationalisation exercise to reduce its geographical footprint. This resulted in a £2.8m right-of-use lease asset and £3.8m
plant and machinery impairment charge triggered by the conclusion of activity at a number of the Group’s leased sites.
3. During 2020 the Group provided £12.1m for phase two restructuring costs associated with a reduction in employee numbers to reflect the lower than
originally planned production volumes. In addition to this, the Group incurred an additional £0.3m of phase one restructuring costs in 2020 (2019: £2.8m).
4. In December 2020 Aston Martin announced that, following conclusion of the 2020 FIA World Endurance Championship, it would cease operation of a
factory GTE team into 2021 incurring termination costs of £6.2m.
5. It was announced on 27 February 2020 that Mark Wilson would step down as CFO and as an Executive Director of the Group on 30 April 2020. Subsequent
to this, on 25 May 2020, Dr Andrew Palmer stepped down as CEO and as an Executive Director of the Group. Tobias Moers joined the Group as CEO and
Executive Director on 1 August 2020. Amounts due as a result of these changes were £2.7m.
6. In the year-ended 2020 a Legacy Long-term Incentive Plan (“LTIP”) charge of £3.8m was recognised within ‘Staff incentives’ (2019: £3.6m). As an offset to
this due to the reduced performance of the Group, the remaining Initial Public Offering (“IPO”) bonus held for management was no longer forecast to be
paid. This resulted in £6.4m being credited back to the Consolidated Income Statement (2019: £4.2m credit).
7. Additional professional fees of £0.5m were charged in 2019 as a result of the Initial Public Offering during the year ended 31 December 2018.
8. On 27 October the Group announced the successful arrangement of a new financing package including the issuance of $1,085.5m of US Dollar 1st Lien
notes and $335m of US Dollar 2nd Lien split coupon notes. Proceeds from this financing package were used to redeem the existing Senior Secured Notes
(“SSNs”) in full ahead of their April 2022 maturity date. In redeeming the existing SSNs early the Group incurred an early redemption premium of £21.4m.
Professional fees capitalised against the existing SSNs of £7.6m were written off to the Income Statement upon redemption.
Upon the successful arrangement of the new finance package, the Group entered into a conditional forward currency contract to hedge the net US Dollar
cash receipt into Sterling upon completion of the transaction. Movement in the US Dollar to Sterling exchange rate between the arrangement date and
transaction date resulted in the recognition of a £6.9m currency gain in the Income Statement.
9. The Group issued second lien SSNs which included detachable warrants classified as a derivative option liability initially valued at £34.6m. The movement
in fair value of the derivative option liability from initial pricing during October 2020 when the SSNs were marketed to the 31 December 2020 resulted in a
loss of £45.3m being recognised in the Income Statement.
112
112
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
6 ADJUSTING ITEMS
6 ADJUSTING ITEMS (CONTINUED)
Adjusting operating expenses:
Impairment of assets (note 14):
Development costs (note 13) 1
Plant, machinery, fixtures and fittings (note 15) 2
Tooling (note 15) 1
Inventory 1
Right-of-use lease assets (note 16) 2
Director settlement arrangements and incentive payments 5
Restructuring:
Employee restructuring costs 3
Motorsport exit costs 4
Initial Public Offering costs:
Staff incentives 6
Professional fees 7
Adjusting finance income:
Adjusting finance expenses:
Total adjusting items before tax
Tax credit on adjusting items 12
Adjusting items after tax
Foreign exchange gain on financial instrument utilised during refinance transactions 8
Premium paid on the early redemption of Senior Secured Notes 8
Write-off of capitalised borrowing fees upon early settlement of Senior Secured Notes 8
Loss on financial instruments recognised at fair value through Income Statement 9
Professional fees incurred on refinancing expensed directly to the Income Statement 10
Movement on derivatives not qualifying for hedge accounting (note 9) 11
2020
£m
2019
£m
(69.4)
(3.8)
(3.3)
–
(2.8)
(79.3)
(12.4)
(6.2)
(2.7)
2.6
–
(98.0)
6.9
(21.4)
(7.6)
(45.3)
(1.2)
–
(68.6)
(166.6)
32.9
(133.7)
(27.7)
(4.7)
(3.7)
(2.3)
(1.0)
(39.4)
(2.8)
–
–
0.6
(0.5)
(42.1)
–
–
–
–
–
(6.6)
(6.6)
(48.7)
8.8
(39.9)
1. On 27 October the Group announced an expanded and enhanced technology agreement with Mercedes-Benz AG, giving access to powertrain architecture
(for conventional, hybrid, and electric vehicles) and future oriented electric/electronic architecture for all product launches through to 2027. Following
incorporation of the benefits of this enhanced partnership on the Group’s business plan, and other cycle plan updates following the strategic review of the
business plan the carrying value of capitalised tooling and intangible development costs have been impaired by £72.7m to reflect the change in future
vehicle powertrains and electronic architecture.
Announced in 2019, the Lagonda brand was expected to be relaunched no earlier than 2025 and while development of Rapide E was substantially
complete, the programme was paused pending further review. An assessment of the carrying value of Rapide E assets, and assets carried across from Rapide
as part of the Group’s carry-over-carry-across (“COCA”) principle resulted in an impairment charge of £39.4m – see note 14 for further details.
2. In 2020 the Group commenced a rationalisation exercise to reduce its geographical footprint. This resulted in a £2.8m right-of-use lease asset and £3.8m
plant and machinery impairment charge triggered by the conclusion of activity at a number of the Group’s leased sites.
3. During 2020 the Group provided £12.1m for phase two restructuring costs associated with a reduction in employee numbers to reflect the lower than
originally planned production volumes. In addition to this, the Group incurred an additional £0.3m of phase one restructuring costs in 2020 (2019: £2.8m).
4. In December 2020 Aston Martin announced that, following conclusion of the 2020 FIA World Endurance Championship, it would cease operation of a
factory GTE team into 2021 incurring termination costs of £6.2m.
5. It was announced on 27 February 2020 that Mark Wilson would step down as CFO and as an Executive Director of the Group on 30 April 2020. Subsequent
to this, on 25 May 2020, Dr Andrew Palmer stepped down as CEO and as an Executive Director of the Group. Tobias Moers joined the Group as CEO and
Executive Director on 1 August 2020. Amounts due as a result of these changes were £2.7m.
6. In the year-ended 2020 a Legacy Long-term Incentive Plan (“LTIP”) charge of £3.8m was recognised within ‘Staff incentives’ (2019: £3.6m). As an offset to
this due to the reduced performance of the Group, the remaining Initial Public Offering (“IPO”) bonus held for management was no longer forecast to be
paid. This resulted in £6.4m being credited back to the Consolidated Income Statement (2019: £4.2m credit).
7. Additional professional fees of £0.5m were charged in 2019 as a result of the Initial Public Offering during the year ended 31 December 2018.
8. On 27 October the Group announced the successful arrangement of a new financing package including the issuance of $1,085.5m of US Dollar 1st Lien
notes and $335m of US Dollar 2nd Lien split coupon notes. Proceeds from this financing package were used to redeem the existing Senior Secured Notes
(“SSNs”) in full ahead of their April 2022 maturity date. In redeeming the existing SSNs early the Group incurred an early redemption premium of £21.4m.
Professional fees capitalised against the existing SSNs of £7.6m were written off to the Income Statement upon redemption.
Upon the successful arrangement of the new finance package, the Group entered into a conditional forward currency contract to hedge the net US Dollar
cash receipt into Sterling upon completion of the transaction. Movement in the US Dollar to Sterling exchange rate between the arrangement date and
transaction date resulted in the recognition of a £6.9m currency gain in the Income Statement.
9. The Group issued second lien SSNs which included detachable warrants classified as a derivative option liability initially valued at £34.6m. The movement
in fair value of the derivative option liability from initial pricing during October 2020 when the SSNs were marketed to the 31 December 2020 resulted in a
loss of £45.3m being recognised in the Income Statement.
10. Fees incurred on raising the second lien loan notes in December 2020 were allocated between the debt and warrant elements on a proportional basis. The
fees allocated to the warrants have been written off in the period they were incurred.
11. In 2019 a charge of £6.6m was recognised in relation to fair value movements of derivative financial instruments held to hedge future foreign currency
cashflows, but where the necessary criteria for hedge accounting had not been met. Once the criteria for hedge accounting had been met, all movements
in the fair value of these derivative financial instruments are recorded either in Other Comprehensive Income or in arriving at adjusted operating profit in
the Consolidated Income Statement.
12. In 2020, a total tax credit of £32.9m has been recognised as an adjusting item. The tax credit on adjusting items in 2020 is higher than the standard rate of
income tax for the Group at 19% due to an additional credit of £1.3m which relates to the impact of a change in deferred tax rate from 17% to 19% on
items treated as adjusting in previous years.
7 STAFF COSTS AND DIRECTORS’ EMOLUMENTS
(a) Staff costs (including directors)
Wages and salaries 1 2
Social security costs 1 2
Expenses related to post-employment defined benefit plan
Contributions to defined contribution plans 2
2020
£m
119.3
11.2
8.6
10.4
149.5
2019
£m
126.9
13.6
6.9
9.3
156.7
1. The values presented for the years ended 31 December 2020 and 2019 includes the release of accrued staff incentives totalling £6.4m (2019: £4.2m) offset
by the legacy LTIP charge of £3.8m (2019: £3.6m), both of which are presented as adjusting items – see note 6 for further detail.
2. The value presented for the year ended 31 December 2020 is net of receipts totalling £12.5m from the UK Government Job Retention Scheme.
The average monthly number of employees during the year were:
By activity
Production
Selling and distribution
Administration
(b) Directors’ emoluments and transactions
Directors’ emoluments
Company contributions to pension schemes
2020
Number
1,209
358
920
2,487
2020
£m
3.3
0.2
2019
Number
1,118
348
1,099
2,565
2019
£m
2.9
0.2
All directors benefited from qualifying third-party indemnity provisions. Further information relating to directors’ remuneration is set out in
the Directors’ Remuneration Report on pages 63 to 78.
No compensation for loss of office payments were paid in either the current or prior year to directors.
(c) Compensation of key management personnel (including executive directors)
Short-term employee benefits
Post-employment benefits
Compensation for loss of office
Share related awards
2020
£m
6.1
0.5
0.1
1.1
7.8
2019
£m
4.3
0.5
–
–
4.8
112
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
113
113
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
8 FINANCE INCOME
Bank deposit and other interest income
Foreign exchange gain on borrowings not designated as part of a hedging relationship
Finance income before adjusting items
Adjusting finance income items:
Foreign exchange gain on financial instrument utilised during refinance transactions
Total Adjusting finance income
Total finance income
9 FINANCE EXPENSE
Bank loans, overdrafts and secured notes
Other interest
Interest on lease liabilities (note 16)
Net interest expense on the net defined benefit liability (note 26)
Hedge ineffectiveness
Interest on contract liabilities held (note 21)
Finance expense before adjusting items
Adjusting finance expense items:
Premium paid on the early redemption of Senior Secured Notes
Write-off of capitalised borrowing fees upon early settlement of Senior Secured Notes
Loss on financial instruments recognised at fair value through Income Statement (note 23)
Professional fees incurred on refinancing expensed directly to the Income Statement
Movements on derivatives not qualifying for hedge accounting
Total Adjusting finance expense
Total finance expense
10 TAXATION
Current tax (credit)/charge
UK corporation tax on losses
Overseas tax
Prior period movement
Total current income tax (credit)/charge
Deferred tax credit
Origination and reversal of temporary differences
Prior period movement
Effect of change in deferred tax rate
Total deferred tax credit
Total income tax credit in the Income Statement
Tax relating to items (credited)/charged to other comprehensive income
Deferred tax
Actuarial movement on defined benefit pension plan
Fair value adjustment on cash flow hedges
Effect of change in deferred tax rate
Current tax
Fair value adjustment on cash flow hedges
2020
£m
2.3
30.8
33.1
6.9
6.9
40.0
2020
£m
98.4
–
4.1
0.7
2.5
1.9
2019
£m
5.0
11.3
16.3
–
–
16.3
2019
£m
55.3
7.5
4.6
1.1
–
8.8
107.6
77.3
21.4
7.6
45.3
1.2
–
75.5
183.1
2020
£m
(0.6)
4.7
(5.0)
(0.9)
(64.4)
8.5
1.3
(54.6)
(55.5)
(11.2)
0.9
(1.1)
2.2
(9.2)
–
–
–
–
6.6
6.6
83.9
2019
restated *
£m
(1.3)
13.2
2.0
13.9
(15.1)
(0.8)
–
(15.9)
(2.0)
(0.2)
0.1
–
3.3
3.2
Tax relating to items charged in equity – deferred tax
Effect of change in deferred tax rate
* Detail on the restatement of the comparative period is disclosed in note 2.
(1.6)
–
114
114
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
8 FINANCE INCOME
Bank deposit and other interest income
Finance income before adjusting items
Adjusting finance income items:
Total Adjusting finance income
Total finance income
9 FINANCE EXPENSE
Foreign exchange gain on borrowings not designated as part of a hedging relationship
Foreign exchange gain on financial instrument utilised during refinance transactions
Net interest expense on the net defined benefit liability (note 26)
Bank loans, overdrafts and secured notes
Other interest
Interest on lease liabilities (note 16)
Hedge ineffectiveness
Interest on contract liabilities held (note 21)
Finance expense before adjusting items
Adjusting finance expense items:
Premium paid on the early redemption of Senior Secured Notes
Write-off of capitalised borrowing fees upon early settlement of Senior Secured Notes
Loss on financial instruments recognised at fair value through Income Statement (note 23)
Professional fees incurred on refinancing expensed directly to the Income Statement
Movements on derivatives not qualifying for hedge accounting
Total Adjusting finance expense
Total finance expense
10 TAXATION
Current tax (credit)/charge
UK corporation tax on losses
Overseas tax
Prior period movement
Total current income tax (credit)/charge
Deferred tax credit
Origination and reversal of temporary differences
Prior period movement
Effect of change in deferred tax rate
Total deferred tax credit
Total income tax credit in the Income Statement
Tax relating to items (credited)/charged to other comprehensive income
Deferred tax
Actuarial movement on defined benefit pension plan
Fair value adjustment on cash flow hedges
Effect of change in deferred tax rate
Current tax
Fair value adjustment on cash flow hedges
107.6
77.3
2020
£m
2.3
30.8
33.1
6.9
6.9
40.0
2020
£m
98.4
–
4.1
0.7
2.5
1.9
21.4
7.6
45.3
1.2
–
75.5
183.1
2020
£m
(0.6)
4.7
(5.0)
(0.9)
(64.4)
8.5
1.3
(54.6)
(55.5)
(11.2)
0.9
(1.1)
2.2
(9.2)
2019
£m
5.0
11.3
16.3
–
–
16.3
2019
£m
55.3
7.5
4.6
1.1
–
8.8
–
–
–
–
6.6
6.6
83.9
£m
(1.3)
13.2
2.0
13.9
(15.1)
(0.8)
–
(15.9)
(2.0)
(0.2)
0.1
–
3.3
3.2
2019
restated *
10 TAX EXPENSE ON CONTINUING OPERATIONS (CONTINUED)
(a) Reconciliation of the total income tax credit
The tax credit in the Consolidated Statement of Comprehensive Income for the year is lower (2019: lower) than the standard rate of
corporation tax in the UK of 19.0% (2019: 19.0%). The differences are reconciled below:
Loss from operations before taxation
Loss on operations before taxation multiplied by standard rate of corporation tax in the
UK of 19.0% (2019: 19.0%)
Difference to total income tax credit due to effects of:
Expenses not deductible for tax purposes
Recognition of previously unrecognised deferred tax asset
Movement in unprovided deferred tax
Derecognition of deferred tax asset of interest deductible in future periods
Irrecoverable overseas withholding taxes
Adjustments in respect of prior periods
Effect of lower rates applied to deferred tax
Effect of change in deferred tax rate
Difference in overseas tax rates
Other
Total income tax credit
(b) Tax paid
Total net tax paid during the year of £9.2m (2019: £12.5m).
(c) Factors affecting future tax charges
There are no known factors that will affect the Group’s future current tax charge.
(d) Deferred tax
Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
2020
£m
2019
restated*
£m
(466.0)
(119.6)
(88.5)
(22.7)
0.2
–
26.1
–
0.3
3.5
–
1.3
0.6
1.0
0.2
(6.3)
11.4
8.0
1.2
1.2
2.2
–
1.5
1.3
(55.5)
(2.0)
Property, plant and equipment
Intangible assets
Employee benefits
Provisions
RDEC credit
Losses
Share based payments
Other
Deferred tax (assets)/liabilities
Set off of tax liabilities/(assets)
Total deferred tax (assets)/liabilities
Assets
2020
£m
(71.1)
–
(17.6)
(11.1)
(9.7)
(118.9)
(13.3)
–
(241.7)
135.2
(106.5)
Assets
2019
restated*
£m
(54.2)
–
(6.3)
(13.7)
(7.0)
(59.3)
(13.3)
–
(153.8)
108.1
(45.7)
Liabilities
2020
£m
–
135.2
–
–
–
–
–
0.6
135.8
(135.2)
0.6
Liabilities
2019
restated*
£m
–
117.3
–
–
–
–
–
0.7
118.0
(108.1)
9.9
Where the right exists in certain jurisdictions, deferred tax assets and liabilities have been off set.
* Detail on the restatement of the comparative period is disclosed in note 2.
Tax relating to items charged in equity – deferred tax
Effect of change in deferred tax rate
* Detail on the restatement of the comparative period is disclosed in note 2.
(1.6)
–
114
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
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115
115
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
10 TAX EXPENSE ON CONTINUING OPERATIONS (CONTINUED)
(d) Deferred tax (continued)
Movement in deferred tax in 2020
Property, plant and equipment
Intangible assets
Employee benefits
Provisions
Interest deductible in future periods
RDEC credit
Losses
Share based payments
Other
Movement in deferred tax in 2019 restated*
Property, plant and equipment
Intangible assets
Employee benefits
Provisions
Interest deductible in future periods
RDEC credit
Losses
Share based payments
Other
1 January
2020
£m
(54.2)
117.3
(6.3)
(13.7)
–
(7.0)
(59.3)
(13.3)
0.7
(35.8)
Gross tax
recognised
in Income
and OCI
£m
Gross tax
recognised
in Equity
£m
Other
movement
£m
31 December
2020
£m
(16.9)
17.9
(11.3)
2.4
–
–
(58.0)
–
(0.1)
(66.0)
–
–
–
–
–
–
–
(1.6)
–
(1.6)
–
–
–
0.2
–
(2.7)
–
–
–
(2.5)
(71.1)
135.2
(17.6)
(11.1)
–
(9.7)
(117.3)
(14.9)
0.6
(105.9)
1 January
2019
£m
Recognised
in Income
and OCI
£m
Recognised
in Equity
£m
Other
Movement
£m
31 December
2019
£m
(49.3)
111.0
(6.6)
(0.6)
(7.6)
–
(46.3)
(13.3)
–
(12.7)
(4.9)
6.3
0.3
(13.0)
7.6
–
(13.0)
–
0.7
(16.0)
–
–
–
–
–
–
–
–
–
–
–
–
–
(0.1)
–
(7.0)
–
–
–
(7.1)
(54.2)
117.3
(6.3)
(13.7)
–
(7.0)
(59.3)
(13.3)
0.7
(35.8)
* Detail on the restatement of the comparative period is disclosed in note 2.
Other movements reflect the reclassification of RDEC credits from Trade and other receivables to deferred tax and foreign exchange differences.
The Group believes that it is appropriate to recognise a Deferred Tax Asset in respect of historic tax losses due to the future forecast
profitability of the Group as demonstrated by the business plan.
In addition to the deferred tax recognised above, the Group has a £47.4m (2019 restated: £19.4m) unrecognised net deferred tax asset in
respect of interest deductions deductible in future periods where the likelihood of recoverability is not considered to support recognition of
the asset.
The aggregate amount of temporary differences associated with investment in subsidiaries and branches, for which deferred tax liabilities
have not been recognised is £38.0m for the year ended 31 December 2020 (2019: £32.5m).
11 DIVIDENDS
No dividends were declared or paid by the Company in the year-ended 31 December 2020 (2019: £nil).
During the year ended 31 December 2020 a dividend of £13.1m was declared by Aston Martin Works Limited (2019: £9.8m), of which the
Group holds 50% of the voting rights and share capital. The terms of the 2020 and 2019 dividend required the element due to the non-
controlling interest to be fully offset with balances owed to subsidiaries of the Group resulting in no cash outflow.
116
116
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
10 TAX EXPENSE ON CONTINUING OPERATIONS (CONTINUED)
(d) Deferred tax (continued)
Movement in deferred tax in 2020
Property, plant and equipment
Intangible assets
Employee benefits
Provisions
RDEC credit
Losses
Share based payments
Other
Interest deductible in future periods
Movement in deferred tax in 2019 restated*
Property, plant and equipment
Interest deductible in future periods
Intangible assets
Employee benefits
Provisions
RDEC credit
Losses
Share based payments
Other
1 January
Other
31 December
Gross tax
recognised
in Income
and OCI
Gross tax
recognised
in Equity
£m
movement
£m
2020
£m
(54.2)
117.3
(6.3)
(13.7)
–
(7.0)
(59.3)
(13.3)
0.7
(35.8)
2019
£m
(49.3)
111.0
(6.6)
(0.6)
(7.6)
(46.3)
(13.3)
–
–
(12.7)
£m
(16.9)
17.9
(11.3)
2.4
–
–
–
(58.0)
(0.1)
(66.0)
£m
(4.9)
6.3
0.3
(13.0)
7.6
–
–
(13.0)
0.7
(16.0)
2020
£m
(71.1)
135.2
(17.6)
(11.1)
–
(9.7)
(117.3)
(14.9)
0.6
(105.9)
2019
£m
(54.2)
117.3
(6.3)
(13.7)
–
(7.0)
(59.3)
(13.3)
0.7
(35.8)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.2
(2.7)
(2.5)
(0.1)
(7.0)
(7.1)
(1.6)
(1.6)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 January
Recognised
in Income
and OCI
Recognised
in Equity
£m
Movement
£m
Other
31 December
The Group believes that it is appropriate to recognise a Deferred Tax Asset in respect of historic tax losses due to the future forecast
profitability of the Group as demonstrated by the business plan.
In addition to the deferred tax recognised above, the Group has a £47.4m (2019 restated: £19.4m) unrecognised net deferred tax asset in
respect of interest deductions deductible in future periods where the likelihood of recoverability is not considered to support recognition of
The aggregate amount of temporary differences associated with investment in subsidiaries and branches, for which deferred tax liabilities
have not been recognised is £38.0m for the year ended 31 December 2020 (2019: £32.5m).
the asset.
11 DIVIDENDS
No dividends were declared or paid by the Company in the year-ended 31 December 2020 (2019: £nil).
During the year ended 31 December 2020 a dividend of £13.1m was declared by Aston Martin Works Limited (2019: £9.8m), of which the
Group holds 50% of the voting rights and share capital. The terms of the 2020 and 2019 dividend required the element due to the non-
controlling interest to be fully offset with balances owed to subsidiaries of the Group resulting in no cash outflow.
12 EARNINGS PER ORDINARY SHARE
Basic earnings per ordinary share is calculated by dividing the loss for the year available for equity holders by the weighted average number
of ordinary shares in issue during the year. As part of the Strategic Cooperation Agreement entered into in December 2020 with Mercedes-
Benz AG, shares were issued for access to tranche 1 technology (see note 13). The Agreement includes an obligation to issue further shares
for access to further technology in a future period. Warrants to acquire shares in the Company were issued in December 2020 as part of the
refinancing of the Group (see note 23). Up to 6,332,393 ordinary shares could be issued to warrant holders who can exercise their rights
from 1 July 2021. Both of these transactions may have a dilutive effect in future periods if the group generates a profit.
Diluted earnings per ordinary share is calculated by adjusting basic earnings per ordinary share to reflect the notional exercise of the
weighted average number of dilutive ordinary share awards outstanding during the year including the future technology shares and warrants
detailed above. The weighted average number of dilutive ordinary share awards outstanding during the year are excluded when including
them would be anti-dilutive to the earnings per share value.
Continuing and total operations
Basic earnings per ordinary share
Loss available for equity holders (£m)
Basic weighted average number of ordinary shares (million) 2
Basic loss per ordinary share (pence)
Diluted earnings per ordinary share
Loss available for equity holders (£m)
Diluted weighted average number of ordinary shares (million) 2
Diluted loss per ordinary share (pence)
Diluted weighted average number of ordinary shares is calculated as:
Basic weighted average number of ordinary shares 1 2 (million)
Adjustments for calculation of diluted earnings per share 3:
Long-term incentive plans
Issue of unexercised ordinary share warrants
Issue of tranche 2 shares
2020
(419.3)
77.2
2019
restated*
(126.4)
43.5
(543.0p)
(290.6p)
(419.3)
77.2
(126.4)
43.5
(543.0p)
(290.6p)
2020
Number
2019
Number
77.2
43.5
–
–
–
–
–
–
* Detail on the restatement of the comparative period is disclosed in note 2.
Weighted average number of diluted ordinary shares (million)
77.2
43.5
1. Additional ordinary shares issued as a result of the rights issue conducted in 2020 have been incorporated in the 2019 earnings per share calculation in full
Other movements reflect the reclassification of RDEC credits from Trade and other receivables to deferred tax and foreign exchange differences.
without any time apportionment.
2. Average number of ordinary shares has been reduced by a ratio of 20:1 reflecting the share consolidation undertaken in December 2020.
3. The number of ordinary shares issued as part of the long-term incentive plans, and the potential number of ordinary shares issued as part of the 2020 issue
of share warrants have been excluded from the weighted average number of diluted ordinary shares as including them is anti-dilutive to diluted earnings
per share.
Adjusted earnings per share is disclosed in note 34 to show performance undistorted by adjusting items and give a more meaningful
comparison of the Group’s performance.
* To aid users understanding of the movement in the Basic and Diluted earnings per ordinary share presented for the comparative period, the following table
reconciles the numbers presented in the 2019 Annual Report and Accounts to those presented above.
Continuing and total operations – 12 months ended 31 December 2019
Basic earnings per ordinary share
Loss available for equity holders (£m)
Basic weighted average number of ordinary shares (million)
Basic loss per ordinary share (pence)
Diluted earnings per ordinary share
Loss available for equity holders (£m)
Diluted weighted average number of ordinary shares (million)
Diluted loss per ordinary share (pence)
As presented
2019
Annual Report
VME error
correction
(note 2)
As
Restated
(note 1)
Bonus
element of
right issue
(note 27)
Share
consolidation
(note 27)
As presented
above
(113.2)
228.0
(49.6p)
(13.2)
(126.4)
–
228.0
(5.8p)
(55.4p)
–
642.4
40.9p
–
(126.4)
(826.9)
43.5
(276.1p)
(290.6p)
(113.2)
228.0
(49.6p)
(13.2)
(126.4)
–
228.0
(5.8p)
(55.4p)
–
642.4
40.9p
–
(126.4)
(826.9)
43.5
(276.1p)
(290.6p)
116
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
117
117
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
13 INTANGIBLE ASSETS
Cost
Balance at 1 January 2019
Additions
Balance at 31 December 2019
Balance at 1 January 2020
Additions
Balance at 31 December 2020
Amortisation
Balance at 1 January 2019
Charge for the year
Adjustment
Impairment (note 14)
Balance at 31 December 2019
Balance at 1 January 2020
Charge for the year
Impairment (note 14)
Balance at 31 December 2020
Net book value
At 1 January 2019
At 31 December 2019
At 1 January 2020
At 31 December 2020
Goodwill
£m
Brands
£m
Technology
£m
Capitalised
Development Cost
£m
Dealer
Network
£m
Software and
other
£m
85.4
–
85.4
85.4
–
85.4
0.6
–
(0.6)
–
–
–
–
–
–
297.6
–
297.6
297.6
–
297.6
–
–
–
–
–
–
–
–
–
21.2
–
21.2
21.2
142.3
163.5
4.3
1.9
–
–
6.2
6.2
1.9
–
8.1
84.8
85.4
85.4
85.4
297.6
297.6
297.6
297.6
16.9
15.0
15.0
155.4
1,032.1
226.0
1,258.1
1,258.1
177.6
1,435.7
378.9
82.0
–
27.7
488.6
488.6
93.6
69.4
651.6
653.2
769.5
769.5
784.1
15.4
–
15.4
15.4
–
15.4
8.5
0.8
–
–
9.3
9.3
0.8
–
10.1
6.9
6.1
6.1
5.3
58.9
2.0
60.9
60.9
2.1
63.0
46.6
4.3
–
–
50.9
50.9
3.1
–
54.0
12.3
10.0
10.0
9.0
Total
£m
1,510.6
228.0
1,738.6
1,738.6
322.0
2,060.6
438.9
89.0
(0.6)
27.7
555.0
555.0
99.4
69.4
723.8
1,071.7
1,183.6
1,183.6
1,336.8
On 7 December 2020, the Company issued 224,657,287 shares to Mercedes-Benz AG (“MBAG”) as consideration for access to the first tranche
of powertrain and electronic architecture via a Strategic Cooperation Agreement. The Group was required to undertake a valuation exercise to
measure the fair value of the access to the MBAG technology upon its initial capitalisation. The Group selected the “With and Without” income
approach which compares the net present value of cash flows from the Group’s business plan prior to (“without”) and after (“with”) the access to
the technology. This methodology estimates the present value of the net benefit associated with acquiring the access to the technology. In the
Group’s assessment, the fair value of access to this technology is £142.3m. The £142.3m represents the assumed cost at acquisition after which
the cost model will be adopted. Amortisation will commence when the asset is considered available for use.
During the year-ended 31 December 2020 the Group received £nil of grants relating to qualifying development expenditure (2019: £3.3m).
There are no unfulfilled conditions or other contingencies attached, with amounts received deducted from the carrying value of capitalised
development costs.
14 IMPAIRMENT TESTING
INDEFINITE USEFUL LIFE NON-CURRENT ASSETS
Goodwill and brands acquired through business combinations have been allocated for impairment testing purposes to one cash-generating unit
– the Aston Martin Lagonda Group business. This represents the lowest level within the Group at which goodwill and brands are monitored for
internal purposes. The Group also considers the carrying value of its assets in the context of the Group’s market capitalisation. At this level, it
was concluded that the net assets of the Group are recoverable owing to the Group’s market capitalisation of £2.3bn at 31 December 2020.
The Group tests the carrying value of goodwill and brands at the cash-generating unit level for impairment annually or more frequently if there are
indicators that goodwill or brands might be impaired. At the year-end reporting date, a review was undertaken on a value in use basis, assessing
whether the carrying values of goodwill and brands were supported by the net present value of future cash flows derived from those assets.
Key assumptions used in value in use calculations
The calculation of value in use for the cash-generating unit is most sensitive to the following assumptions:
• Cash flows were projected based on actual operating results and the current five-year plan. Beyond this, cash flows were extrapolated
using a constant growth rate of 2% per annum using a like-for-like cost and volume basis as the Group transitions to electric powered
vehicles. Key assumptions such as revenue, gross margin and fixed costs within the forecasts are based on past experience and the
current business plan;
• Discount rates are calculated using a weighted average cost of capital approach. They reflect the individual nature and specific risks
relating to the business and the market in which the Group operates. The pre-tax discount rate used was 11.1% (2019: 9.0%); and
• An exchange rate of $1.29/£ has been used for 2021, with $1.29/£ used for 2022 into perpetuity.
118
118
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
13 INTANGIBLE ASSETS
Cost
Additions
Balance at 1 January 2019
Balance at 31 December 2019
Balance at 1 January 2020
Additions
Balance at 31 December 2020
Amortisation
Balance at 1 January 2019
Charge for the year
Adjustment
Impairment (note 14)
Balance at 31 December 2019
Balance at 1 January 2020
Charge for the year
Impairment (note 14)
Balance at 31 December 2020
Net book value
At 1 January 2019
At 31 December 2019
At 1 January 2020
At 31 December 2020
Goodwill
£m
Brands
£m
Technology
Development Cost
Capitalised
Software and
Dealer
Network
£m
85.4
–
85.4
85.4
–
85.4
0.6
–
(0.6)
–
–
–
–
–
–
297.6
–
297.6
297.6
–
297.6
–
–
–
–
–
–
–
–
–
£m
21.2
–
21.2
21.2
142.3
163.5
4.3
1.9
–
–
6.2
6.2
1.9
–
8.1
84.8
85.4
85.4
85.4
297.6
297.6
297.6
297.6
16.9
15.0
15.0
155.4
£m
1,032.1
226.0
1,258.1
1,258.1
177.6
1,435.7
378.9
82.0
–
27.7
488.6
488.6
93.6
69.4
651.6
653.2
769.5
769.5
784.1
15.4
–
15.4
15.4
–
15.4
8.5
0.8
–
–
9.3
9.3
0.8
–
10.1
6.9
6.1
6.1
5.3
other
£m
58.9
2.0
60.9
60.9
2.1
63.0
46.6
4.3
–
–
50.9
50.9
3.1
–
54.0
12.3
10.0
10.0
9.0
Total
£m
1,510.6
228.0
1,738.6
1,738.6
322.0
2,060.6
438.9
89.0
(0.6)
27.7
555.0
555.0
99.4
69.4
723.8
1,071.7
1,183.6
1,183.6
1,336.8
On 7 December 2020, the Company issued 224,657,287 shares to Mercedes-Benz AG (“MBAG”) as consideration for access to the first tranche
of powertrain and electronic architecture via a Strategic Cooperation Agreement. The Group was required to undertake a valuation exercise to
measure the fair value of the access to the MBAG technology upon its initial capitalisation. The Group selected the “With and Without” income
approach which compares the net present value of cash flows from the Group’s business plan prior to (“without”) and after (“with”) the access to
the technology. This methodology estimates the present value of the net benefit associated with acquiring the access to the technology. In the
Group’s assessment, the fair value of access to this technology is £142.3m. The £142.3m represents the assumed cost at acquisition after which
the cost model will be adopted. Amortisation will commence when the asset is considered available for use.
During the year-ended 31 December 2020 the Group received £nil of grants relating to qualifying development expenditure (2019: £3.3m).
There are no unfulfilled conditions or other contingencies attached, with amounts received deducted from the carrying value of capitalised
development costs.
14 IMPAIRMENT TESTING
INDEFINITE USEFUL LIFE NON-CURRENT ASSETS
Goodwill and brands acquired through business combinations have been allocated for impairment testing purposes to one cash-generating unit
– the Aston Martin Lagonda Group business. This represents the lowest level within the Group at which goodwill and brands are monitored for
internal purposes. The Group also considers the carrying value of its assets in the context of the Group’s market capitalisation. At this level, it
was concluded that the net assets of the Group are recoverable owing to the Group’s market capitalisation of £2.3bn at 31 December 2020.
The Group tests the carrying value of goodwill and brands at the cash-generating unit level for impairment annually or more frequently if there are
indicators that goodwill or brands might be impaired. At the year-end reporting date, a review was undertaken on a value in use basis, assessing
whether the carrying values of goodwill and brands were supported by the net present value of future cash flows derived from those assets.
Key assumptions used in value in use calculations
The calculation of value in use for the cash-generating unit is most sensitive to the following assumptions:
• Cash flows were projected based on actual operating results and the current five-year plan. Beyond this, cash flows were extrapolated
using a constant growth rate of 2% per annum using a like-for-like cost and volume basis as the Group transitions to electric powered
vehicles. Key assumptions such as revenue, gross margin and fixed costs within the forecasts are based on past experience and the
current business plan;
• Discount rates are calculated using a weighted average cost of capital approach. They reflect the individual nature and specific risks
relating to the business and the market in which the Group operates. The pre-tax discount rate used was 11.1% (2019: 9.0%); and
• An exchange rate of $1.29/£ has been used for 2021, with $1.29/£ used for 2022 into perpetuity.
14 IMPAIRMENT TESTING (CONTINUED)
INDEFINITE USEFUL LIFE NON-CURRENT ASSETS (CONTINUED)
Sensitivity analysis
• the pre-tax discount rate would need to increase to 13.3% for the assets to become impaired; or
• the growth rate of 2.0% per annum beyond the five-year plan would need to be -2.2% for the assets to become impaired; or
• the USD exchange rate would need to increase to $1.57/£ (with all other currencies moving against the £ in line with the $) for the assets
to become impaired.
FINITE USEFUL LIFE NON-CURRENT ASSETS
Recoverability of non-current assets with finite useful lives include property, plant and equipment, right-of-use lease assets and certain
intangible assets. Intangible assets with finite useful lives mainly consist of capitalized development costs.
The Group reviews the carrying amount of non-current assets with finite useful lives when events and circumstances indicate that an asset
may be impaired. Impairment tests are performed by comparing the carrying amount and the recoverable amount of the cash-generating
unit (“CGU”). The recoverable amount is the higher of the CGU’s fair value less costs of disposal and its value in use.
In assessing the value in use, the estimated future cash flows relating to the forecast usage period of the asset, or group of assets, are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks. The pre-tax discount rate used was 11.1%.
IMPAIRMENT
The following table details impairments made to the Group’s assets.
Development costs (note 13)
Plant, machinery, fixtures and fittings (note 15)
Tooling (note 15)
Inventory
Right-of-use lease assets (note 16)
Total impairment charge recognised as adjusting in the Consolidated Income Statement (note 6)
2020
£m
69.4
3.8
3.3
–
2.8
79.3
2019
£m
27.7
4.7
3.7
2.3
1.0
39.4
2020
Announced in 2020, the Group commenced a rationalisation exercise to reduce its geographical footprint. The execution of this exercise
throughout 2020 resulted in a total right-of-use lease asset impairment of £2.8m across 2 sites where the recoverable value was deemed to
be nil. Furthermore, an impairment charge of £3.8m has been recognised to reflect plant and machinery that will no longer bring economic
benefit to the Group.
In October 2020 the Group entered into an expanded and enhanced technology agreement with Mercedes-Benz AG contingent on
shareholder approval, anti-trust and underwriting conditions. This Strategic Cooperation Agreement gives the Group access to powertrain
architecture (for conventional, hybrid, and electric vehicles) and future oriented electric/electronic architecture for all product launches
through to 2027.
Following completion of this transaction in December 2020, the benefits of this enhanced partnership were reflected in the Group’s
business plan and future strategy to achieve its medium-term targets. The updated strategy principally focused on changes to future vehicle
powertrain and electrical architecture in addition to changes to the volume mix and cadence of vehicle derivatives.
The impact of these changes resulted in the impairment of £69.4m of capitalised development costs and £3.3m of tooling assets which
included writing down existing hybrid powertrain development to nil.
The impairment of each asset group was determined using a value in use methodology whereby any impairment was capped by the net
present value of expected future cashflows still anticipated to flow from those assets where they remain in use. Any assets where no future
benefit is expected were written off in full.
2019
At 31 December 2019 the Group was engaged in early stage discussions with strategic investors in relation to building longer term
relationships. The impact on current project lifecycles and the cadence of future model launches was under review.
On 31 January 2020, the Group announced its intention to strengthen its financial position in order to immediately improve liquidity and
reduce leverage. A proposed placing of newly issued ordinary shares of the Company to a Consortium, and a subsequent underwritten
rights issue, was proposed for completion following the publication of the 2019 Annual Report and Accounts. The Group and ventures
affiliated to the Consortium agreed, as part of the reset business plan, to control medium-term investment requirements providing greater
financial stability and flexibility. The Lagonda brand was expected to be relaunched no earlier than 2025 and while development of Rapide
E was substantially complete, the programme was paused pending further review.
With the aforementioned indicators of impairment, a review of the carrying value of Rapide E assets and assets carried across from Rapide
as part of the Group’s carry-over-carry-across (“COCA”) principle was completed. As a result of this review an impairment charge was
recognised in full for the Rapide E assets.
118
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
119
119
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
15 PROPERTY, PLANT AND EQUIPMENT
Cost
Balance at 1 January 2019
Additions
Transfer to right-of-use lease assets (note 16)
Disposals
Effect of movements in exchange rates
Balance at 31 December 2019
Balance at 1 January 2020
Additions
Transfer to right-of-use lease assets (note 16)
Disposals
Effect of movements in exchange rates
Balance at 31 December 2020
Depreciation
Balance at 1 January 2019
Charge for the year
Disposals
Impairment (note 14)
Effect of movements in exchange rates
Balance at 31 December 2019
Balance at 1 January 2020
Charge for the year
Impairment (note 14)
Effect of movements in exchange rates
Balance at 31 December 2020
Net book value
At 1 January 2019
At 31 December 2019
At 1 January 2020
At 31 December 2020
Freehold
land and
Buildings
£m
Plant, machinery,
fixtures and
fittings
£m
Tooling
£m
Motor
Vehicles
£m
Total
£m
659.4
83.6
(3.3)
(1.2)
(0.3)
738.2
738.2
93.9
(2.4)
–
0.2
417.8
46.6
–
(1.2)
–
463.2
463.2
70.5
–
–
–
172.2
37.0
(3.3)
–
(0.1)
205.8
205.8
23.4
(2.4)
–
–
0.7
–
–
–
–
0.7
0.7
–
–
–
–
533.7
226.8
0.7
829.9
270.5
21.2
(0.3)
3.7
–
295.1
295.1
29.0
3.3
–
327.4
147.3
168.1
168.1
206.3
50.4
9.9
–
4.7
(0.1)
64.9
64.9
14.1
3.8
–
82.8
121.8
140.9
140.9
144.0
0.2
–
–
–
–
346.4
33.4
(0.3)
8.4
(0.2)
0.2
387.7
0.2
–
–
–
387.7
45.4
7.1
0.1
0.2
440.3
0.5
0.5
0.5
0.5
313.0
350.5
350.5
389.6
68.7
–
–
–
(0.2)
68.5
68.5
–
–
–
0.2
68.7
25.3
2.3
–
–
(0.1)
27.5
27.5
2.3
–
0.1
29.9
43.4
41.0
41.0
38.8
Property, plant and equipment provides security for a fixed and floating charge in favour of the Aston Martin Lagonda Limited pension scheme.
Assets in the course of construction at a cost of £21.7m (2019: £126.1m) are not depreciated until available for use and are included within
tooling, plant and machinery. The gross value of freehold land and buildings includes freehold land of £6.1m (2019: £6.1m) which is not
depreciated. Capital commitments are disclosed in note 30. In 2020 the Group received £0.6m of government grants relating to qualifying
tooling expenditure (2019: £2.3m). There are no unfulfilled conditions or other contingencies attached, with amounts received deducted
from the tooling carrying value.
The tables below analyse the net book value of the Group’s property, plant and equipment by geographic location.
At 31 December 2020
Freehold land and buildings
Tooling
Plant, machinery, fixtures and fittings, and motor vehicles
United Kingdom
£m
Rest of Europe
£m
The Americas
£m
Asia Pacific
£m
36.7
100.3
144.0
281.0
2.1
101.7
0.3
104.1
–
1.5
0.2
1.7
–
2.8
–
2.8
Total
£m
38.8
206.3
144.5
389.6
120
120
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
15 PROPERTY, PLANT AND EQUIPMENT
15 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Freehold
land and
Buildings
£m
Plant, machinery,
fixtures and
Motor
Vehicles
£m
At 31 December 2019
Freehold land and buildings
Tooling
Plant, machinery, fixtures and fittings, and motor vehicles
United Kingdom
£m
Rest of Europe
£m
The Americas
£m
Asia Pacific
£m
38.9
105.3
140.8
285.0
2.1
62.6
0.3
65.0
–
0.2
0.3
0.5
–
–
–
0.1
Total
£m
41.0
168.1
141.4
350.5
16 LEASES
The Group holds lease contracts for buildings, plant and machinery and IT equipment.
a) Right-of-use lease assets
Properties
£m
Plant and
machinery
£m
IT equipment
£m
Cost
Introduced on adoption of IFRS 16 at 1 January 2019
Additions
Modifications
Transfer from tangible fixed assets (note 15)
Effect of movements in exchange rates
Balance at 31 December 2019
Balance at 1 January 2020
Additions
Transfer from tangible fixed assets (note 15)
Modifications
Effect of movements in exchange rates
Balance at 31 December 2020
Depreciation
Introduced on adoption of IFRS 16 at 1 January 2019
Charge for the year
Impairment (note 14)
Effect of movements in exchange rates
Balance at 31 December 2019
Balance at 1 January 2020
Charge for the year
Impairment (note 14)
Effect of movements in exchange rates
Balance at 31 December 2020
Carrying value
Introduced on adoption of IFRS 16 at 1 January 2019
At 31 December 2019
At 1 January 2020
At 31 December 2020
72.7
3.3
(0.3)
–
(0.4)
75.3
75.3
0.1
–
1.7
0.3
77.4
–
7.7
1.0
(0.2)
8.5
8.5
7.2
2.8
0.2
18.7
72.7
66.8
66.8
58.7
4.6
5.3
–
3.3
–
13.2
13.2
–
2.4
–
–
15.6
–
2.1
–
–
2.1
2.1
2.5
–
–
4.6
4.6
11.1
11.1
11.0
5.2
1.2
–
–
–
6.4
6.4
0.1
–
–
–
6.5
–
2.5
–
–
2.5
2.5
2.3
–
–
4.8
5.2
3.9
3.9
1.7
Total
£m
82.5
9.8
(0.3)
3.3
(0.4)
94.9
94.9
0.2
2.4
1.7
0.3
99.5
–
12.3
1.0
(0.2)
13.1
13.1
12.0
2.8
0.2
28.1
82.5
81.8
81.8
71.4
Income from the sub-leasing of right-of-use assets in the year 31 December 2020 was £0.7m (2019: £0.3m). The Group recognises the lease payments
received on a straight-line basis over the lease term within Administrative and other operating expenses in the Consolidated Income Statement.
b) Obligations under leases
The maturity profile of undiscounted lease cash flows accounted for under IFRS 16 are:
Less than one year
One to five year
More than five years
2020
£m
13.0
42.2
93.0
148.2
2019
£m
14.8
30.4
126.4
171.6
Balance at 1 January 2019
Transfer to right-of-use lease assets (note 16)
Effect of movements in exchange rates
Balance at 31 December 2019
Balance at 1 January 2020
Cost
Additions
Disposals
Additions
Disposals
Transfer to right-of-use lease assets (note 16)
Effect of movements in exchange rates
Balance at 31 December 2020
Depreciation
Balance at 1 January 2019
Charge for the year
Disposals
Impairment (note 14)
Effect of movements in exchange rates
Balance at 31 December 2019
Balance at 1 January 2020
Charge for the year
Impairment (note 14)
Effect of movements in exchange rates
Balance at 31 December 2020
Net book value
At 1 January 2019
At 31 December 2019
At 1 January 2020
At 31 December 2020
Tooling
£m
417.8
46.6
(1.2)
–
–
463.2
463.2
70.5
–
–
–
270.5
21.2
(0.3)
3.7
–
295.1
295.1
29.0
3.3
–
327.4
147.3
168.1
168.1
206.3
68.7
(0.2)
68.5
68.5
–
–
–
–
–
–
0.2
68.7
25.3
2.3
–
–
(0.1)
27.5
27.5
2.3
–
0.1
29.9
43.4
41.0
41.0
38.8
fittings
£m
172.2
37.0
(3.3)
–
(0.1)
205.8
205.8
23.4
(2.4)
–
–
50.4
9.9
–
4.7
(0.1)
64.9
64.9
14.1
3.8
–
82.8
121.8
140.9
140.9
144.0
533.7
226.8
0.7
829.9
Property, plant and equipment provides security for a fixed and floating charge in favour of the Aston Martin Lagonda Limited pension scheme.
Assets in the course of construction at a cost of £21.7m (2019: £126.1m) are not depreciated until available for use and are included within
tooling, plant and machinery. The gross value of freehold land and buildings includes freehold land of £6.1m (2019: £6.1m) which is not
depreciated. Capital commitments are disclosed in note 30. In 2020 the Group received £0.6m of government grants relating to qualifying
tooling expenditure (2019: £2.3m). There are no unfulfilled conditions or other contingencies attached, with amounts received deducted
The tables below analyse the net book value of the Group’s property, plant and equipment by geographic location.
United Kingdom
Rest of Europe
The Americas
Asia Pacific
from the tooling carrying value.
At 31 December 2020
Freehold land and buildings
Tooling
Plant, machinery, fixtures and fittings, and motor vehicles
£m
36.7
100.3
144.0
281.0
£m
2.1
101.7
0.3
104.1
£m
–
1.5
0.2
1.7
Total
£m
659.4
83.6
(3.3)
(1.2)
(0.3)
738.2
738.2
93.9
(2.4)
–
0.2
346.4
33.4
(0.3)
8.4
(0.2)
387.7
45.4
7.1
0.1
313.0
350.5
350.5
389.6
Total
£m
38.8
206.3
144.5
389.6
0.7
0.7
0.7
–
–
–
–
–
–
–
–
0.2
–
–
–
–
0.2
–
–
–
0.5
0.5
0.5
0.5
£m
2.8
–
–
2.8
0.2
387.7
0.2
440.3
120
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
121
121
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
16 LEASES (CONTINUED)
The maturity profile of discounted lease cash flows accounted for under IFRS 16 are:
Less than one year
One to five year
More than five years
Analysed as:
Current
Non-current
2020
£m
9.3
27.3
66.4
2019
£m
14.1
26.3
71.0
103.0
111.4
9.3
93.7
103.0
14.1
97.3
111.4
A reconciliation of the lease liability from 1 January to 31 December for the current and prior year is disclosed within note 28.
The total lease interest expense for the year ended 31 December 2020 was £4.1m (2019: £4.6m). Total cash outflow for leases accounted
for under IFRS 16 for the current year was £16.3m (2019: £15.5m). Expenses charged to the Consolidated Income Statement for short-term
and low-value leases for the year-ended 31 December 2020 were £0.6m and £nil respectively (2019: £1.0m and £0.2m). The portfolio of
short-term leases at 31 December 2020 is representative of the expected annual short-term lease expense in future years.
The following disclosure has been included to facilitate the understanding of the impact of adopting IFRS 16 on the Group due to covenants
in the Group’s finance arrangements that continue to use IAS17.
The impact of IFRS 16 on the Consolidated Income Statement excluding tax, for the year-ended 31 December 2020 is:
As reported
31 December 2020
£m
Add back
IFRS 16
interest
charge
£m
Add back
IFRS 16
depreciation
charge
£m
Less
Amortisation
of Legal fees
£m
Less
Lease
incentives
£m
Less
IAS 17
lease cost
£m
Excluding
impact of
IFRS 16
31 December 2020
£m
Revenue
Cost of sales
Gross profit
Selling and distribution expenses
Administrative and other operating expenses
Other expense
Operating loss
Finance income
Finance expense
(Loss)/profit before tax
Adjusted EBITDA (note 34)
611.8
(500.7)
111.1
(79.6)
(354.4)
–
(322.9)
40.0
(183.1)
(466.0)
(70.1)
–
–
–
–
–
–
–
–
4.1
4.1
–
–
–
–
–
12.0
–
12.0
–
–
–
–
–
–
(0.1)
–
(0.1)
–
–
–
–
–
–
1.1
–
1.1
–
–
–
–
–
–
(13.9)
–
(13.9)
–
–
12.0
(0.1)
1.1
(13.9)
611.8
(500.7)
111.1
(79.6)
(355.3)
–
(323.8)
40.0
(179.0)
(462.8)
–
(0.1)
1.1
(13.9)
(83.0)
The impact of IFRS 16 on the Consolidated Income Statement excluding tax, for the year-ended 31 December 2019 is:
Revenue
Cost of sales
Gross profit
Selling and distribution expenses
Administrative and other operating
expenses
Other (expense)/income
Operating profit/(loss)
Finance income
Finance expense
(Loss)/profit before tax
Adjusted EBITDA (note 34)
As reported
31 December 2019
£m
Add back
IFRS 16
interest
charge
£m
Add back
IFRS 16
depreciation
charge
£m
Less
Amortisation
of Legal fees
£m
Less
Lease
incentives
£m
Less
IAS 17
lease cost
£m
Excluding
impact of
IFRS 16
31 December 2019
£m
980.5
(642.7)
337.8
(95.0)
(275.8)
(19.0)
(52.0)
16.3
(83.9)
(119.6)
118.9
–
–
–
–
–
–
–
–
4.6
4.6
–
–
–
–
–
12.3
–
12.3
–
–
–
–
–
–
(0.2)
–
(0.2)
–
–
–
–
–
–
1.2
–
1.2
–
–
–
–
–
–
(15.5)
–
(15.5)
–
–
980.5
(642.7)
337.8
(95.0)
(277.0)
(19.0)
(53.2)
16.3
(79.3)
12.3
(0.2)
1.2
(15.5)
(116.2)
–
(0.2)
1.2
(15.5)
104.4
122
122
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
16 LEASES (CONTINUED)
The maturity profile of discounted lease cash flows accounted for under IFRS 16 are:
Less than one year
One to five year
More than five years
Analysed as:
Current
Non-current
17 INVENTORIES
Parts for resale, service parts and production stock
Work in progress
Finished vehicles
2020
£m
80.9
43.9
82.6
2019
£m
68.8
32.1
99.8
207.4
200.7
103.0
111.4
Finished vehicles includes Group owned service cars at a net realisable value of £35.7m (2019: £23.4m).
During the years ended 31 December 2020 and 2019 inventory repurchase arrangements were entered for certain parts for resale, service
parts and production stock. These inventories were sold and subsequently repurchased – see note 21 for further details.
18 TRADE AND OTHER RECEIVABLES
Amounts included in current assets
Trade receivables
Indirect taxation
Prepayments
Other receivables
Amounts included in non-current assets
Other receivables
2020
£m
101.7
33.2
23.6
19.4
177.9
2019
£m
173.3
23.7
24.4
28.3
249.7
0.9
1.8
Trade and other receivables are non-interest bearing and generally have terms of less than 60 days. Due to their short maturities, the fair
value of trade and other receivables approximates to their book value.
Credit risk is discussed further in note 23.
The carrying amount of trade and other receivables at 31 December, converted into Sterling at the year-end exchange rates, are
denominated in the following currencies (excluding prepayments):
Sterling
Chinese Renminbi
Euro
US Dollar
Other
2020
£m
81.2
1.7
9.8
34.2
28.3
2019
£m
111.3
18.4
20.5
75.1
1.8
155.2
227.1
WHOLESALE FINANCE FACILITY
All financed vehicle sales are made directly to third-party Aston Martin franchised dealers with a large proportion financed through a
wholesale finance facility.
At 31 December 2020, the wholesale finance facility limit with Standard Chartered Bank plc was £75.0m (2019: £150m facility) supported
by a credit insurance policy. The utilisation of the facility as at 31 December 2020 is £37.8m (2019: £99.6m) and, due to the off-balance
sheet treatment, is not recorded in trade receivables in the Group’s Statement of Financial Position.
Vehicles can be financed through this facility up to 45 days from invoice date to allow for any timing delays in despatching a vehicle and
processing. Under the trade finance facility, Standard Chartered Bank plc advance to the Group the sales value of vehicles which have been
despatched upon receipt of certain documentation. Standard Chartered Bank plc assume substantially all of the risks associated with the
wholesale financing scheme and hence they bear substantially all of the credit risk associated with dealers purchasing vehicles through the
wholesale finance scheme. Taking into consideration the Group’s exposure to variability in cash flows both before and after the transfer, the
financing arrangement is treated as off-balance sheet.
The Group incurs a finance charge on vehicles financed through the scheme based on each currency LIBOR at the draw down date.
During 2020, the Group arranged an additional £102.2m wholesale finance facility, with the capability to increase to £150m, with a
panel of banks led by JPMorgan Chase Bank, N.A., London Branch for use during 2021. At 31 December 2020 the facility is undrawn.
Under the trade finance facility, Velocitas Funding Designated Activity Company advances to the Group the sales value of vehicles that
have been despatched upon receipt of certain documentation. The facility is available for an initial period of 12 months from the date of
first drawdown.
2020
£m
9.3
27.3
66.4
9.3
93.7
103.0
2019
£m
14.1
26.3
71.0
14.1
97.3
111.4
A reconciliation of the lease liability from 1 January to 31 December for the current and prior year is disclosed within note 28.
The total lease interest expense for the year ended 31 December 2020 was £4.1m (2019: £4.6m). Total cash outflow for leases accounted
for under IFRS 16 for the current year was £16.3m (2019: £15.5m). Expenses charged to the Consolidated Income Statement for short-term
and low-value leases for the year-ended 31 December 2020 were £0.6m and £nil respectively (2019: £1.0m and £0.2m). The portfolio of
short-term leases at 31 December 2020 is representative of the expected annual short-term lease expense in future years.
The following disclosure has been included to facilitate the understanding of the impact of adopting IFRS 16 on the Group due to covenants
in the Group’s finance arrangements that continue to use IAS17.
The impact of IFRS 16 on the Consolidated Income Statement excluding tax, for the year-ended 31 December 2020 is:
As reported
interest
depreciation
Amortisation
31 December 2020
charge
of Legal fees
incentives
lease cost
31 December 2020
Less
Less
Lease
Less
IAS 17
£m
£m
£m
£m
Add back
IFRS 16
Add back
IFRS 16
charge
£m
Selling and distribution expenses
Administrative and other operating expenses
Revenue
Cost of sales
Gross profit
Other expense
Operating loss
Finance income
Finance expense
(Loss)/profit before tax
Revenue
Cost of sales
Gross profit
Selling and distribution expenses
Administrative and other operating
expenses
Other (expense)/income
Operating profit/(loss)
Finance income
Finance expense
(Loss)/profit before tax
Excluding
impact of
IFRS 16
£m
611.8
(500.7)
111.1
(79.6)
(355.3)
–
(323.8)
40.0
(179.0)
(462.8)
Excluding
impact of
IFRS 16
£m
980.5
(642.7)
337.8
(95.0)
(19.0)
(53.2)
16.3
(79.3)
12.0
(0.1)
1.1
(13.9)
12.0
(0.1)
1.1
(13.9)
12.0
(0.1)
1.1
(13.9)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
12.3
(0.2)
1.2
(15.5)
(277.0)
12.3
(0.2)
1.2
(15.5)
12.3
(0.2)
1.2
(15.5)
(116.2)
£m
611.8
(500.7)
111.1
(79.6)
(354.4)
–
(322.9)
40.0
(183.1)
(466.0)
(70.1)
£m
980.5
(642.7)
337.8
(95.0)
(275.8)
(19.0)
(52.0)
16.3
(83.9)
(119.6)
118.9
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4.1
4.1
4.6
4.6
Adjusted EBITDA (note 34)
(0.1)
1.1
(13.9)
(83.0)
The impact of IFRS 16 on the Consolidated Income Statement excluding tax, for the year-ended 31 December 2019 is:
Add back
IFRS 16
Add back
IFRS 16
As reported
interest
depreciation
Amortisation
Less
Less
Lease
Less
IAS 17
31 December 2019
charge
of Legal fees
incentives
lease cost
31 December 2019
charge
£m
£m
£m
£m
£m
Adjusted EBITDA (note 34)
(0.2)
1.2
(15.5)
104.4
122
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
19 CASH AND CASH EQUIVALENTS
Cash at bank and in hand
2020
£m
489.4
2019
£m
107.9
Cash at bank when placed on deposit earns interest at floating rates based on daily bank deposit rates. The book value of cash and cash
equivalents approximates to their fair value.
Cash is held in the following currencies; those held in currencies other than Sterling have been converted into Sterling at year end exchange rates:
Sterling
Chinese Renminbi
Euro
US Dollar
Other
Included within the above:
Restricted cash
2020
£m
365.0
58.2
7.4
46.5
12.3
2019
£m
14.3
46.5
12.1
29.6
5.4
489.4
107.9
35.8
36.3
The Group has a series of one-year back-to-back loan arrangements with HSBC Bank plc (“HSBC”), whereby Chinese Renminbi to a value
at the time of £34.4m (2019: £36.7m) have been deposited in a restricted account with HSBC in China in exchange for a Sterling overdraft
facility with HSBC Bank plc in the United Kingdom. The restricted cash has been revalued at 31 December 2020 to £35.8m (2019: £36.3m)
and is shown in the cash and cash equivalents value above.
20 OTHER FINANCIAL ASSETS
Forward currency contracts held at fair value
Cash held not available for short-term use
Other derivative contracts
Analysed as:
Current
Non-current
2020
£m
0.8
9.9
4.0
14.7
14.6
0.1
14.7
2019
£m
0.4
8.7
–
9.1
8.9
0.2
9.1
The Group uses forward currency contracts to partly manage the risk associated with fluctuations in exchange rates on future sales
contracts. At the reporting date these cash flow hedges are marked-to-market and any assets are shown as other financial assets in the
Statement of Financial Position.
At 31 December 2020 £9.9m held in certain local bank accounts had been frozen in relation to local arbitration proceedings (2019:
£8.7m). At the year-end the cash held in these accounts did not meet the definition of cash and cash equivalents and therefore has been
classified as an other financial asset.
Other derivative contracts comprises warrant options and non-option derivatives both of which entitle the Group to subscribe for equity in
AMR GP Limited (formerly Racing Point UK Limited). The warrant options were recorded as an embedded option derivative asset at £2.9m
on initial recognition on 31 March 2020. The fair value movement in the options for the year ended 31 December 2020 was £0.7m and is
recognised within the Income Statement in administrative expenses. A corresponding liability was recognised on inception of the
arrangement (see note 23) which represents an accrual for that element of future sponsorship payments. If the option is exercised within the
next 5 years the liability is extinguished in the year of exercise, if the option is not exercised the liability will be subject to the renewal of
the sponsorship agreement and may continue for the following 5 years.
The fair value of the warrant equity option above has been established by applying the proportion of equity represented by the derivative to
an assessment of the enterprise value of AMR GP Limited, which is then adjusted to reflect marketability and control commensurate with
the size of the investment. The enterprise value has been estimated using a blend of measures including an income-based approach and a
market-based approach. Due to the size of the potential investment, as a proportion of the equity of AMR GP Limited, there are no plausible
sensitivities which would give rise to a material variation in the carrying value of the derivative.
There is a further embedded derivative in the agreement in respect of an additional economic interest in the equity of AMR GP Limited
which has been assessed as having a carrying value of £nil at inception. This derivative entitles the Group to subscribe for further share
capital in AMR GP Limited in the event that the sponsorship agreement is extended for a further 5 year period. The fair value movement in
this derivative for the year ended 31 December 2020 was £0.4m and is recognised within the Income Statement in administrative expenses.
The movement in the value of this derivative has been estimated using the same method as the warrant equity option disclosed above.
There is no corresponding liability recorded as it is a non-option embedded derivative.
124
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
Cash at bank when placed on deposit earns interest at floating rates based on daily bank deposit rates. The book value of cash and cash
equivalents approximates to their fair value.
Cash is held in the following currencies; those held in currencies other than Sterling have been converted into Sterling at year end exchange rates:
The Group has a series of one-year back-to-back loan arrangements with HSBC Bank plc (“HSBC”), whereby Chinese Renminbi to a value
at the time of £34.4m (2019: £36.7m) have been deposited in a restricted account with HSBC in China in exchange for a Sterling overdraft
facility with HSBC Bank plc in the United Kingdom. The restricted cash has been revalued at 31 December 2020 to £35.8m (2019: £36.3m)
19 CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Sterling
Chinese Renminbi
Euro
US Dollar
Other
Included within the above:
Restricted cash
and is shown in the cash and cash equivalents value above.
20 OTHER FINANCIAL ASSETS
Forward currency contracts held at fair value
Cash held not available for short-term use
Other derivative contracts
Analysed as:
Current
Non-current
2020
£m
489.4
2019
£m
107.9
489.4
107.9
35.8
36.3
2020
£m
365.0
58.2
7.4
46.5
12.3
2020
£m
0.8
9.9
4.0
14.7
14.6
0.1
14.7
2019
£m
14.3
46.5
12.1
29.6
5.4
2019
£m
0.4
8.7
–
9.1
8.9
0.2
9.1
The Group uses forward currency contracts to partly manage the risk associated with fluctuations in exchange rates on future sales
contracts. At the reporting date these cash flow hedges are marked-to-market and any assets are shown as other financial assets in the
Statement of Financial Position.
classified as an other financial asset.
At 31 December 2020 £9.9m held in certain local bank accounts had been frozen in relation to local arbitration proceedings (2019:
£8.7m). At the year-end the cash held in these accounts did not meet the definition of cash and cash equivalents and therefore has been
Other derivative contracts comprises warrant options and non-option derivatives both of which entitle the Group to subscribe for equity in
AMR GP Limited (formerly Racing Point UK Limited). The warrant options were recorded as an embedded option derivative asset at £2.9m
on initial recognition on 31 March 2020. The fair value movement in the options for the year ended 31 December 2020 was £0.7m and is
recognised within the Income Statement in administrative expenses. A corresponding liability was recognised on inception of the
arrangement (see note 23) which represents an accrual for that element of future sponsorship payments. If the option is exercised within the
next 5 years the liability is extinguished in the year of exercise, if the option is not exercised the liability will be subject to the renewal of
the sponsorship agreement and may continue for the following 5 years.
The fair value of the warrant equity option above has been established by applying the proportion of equity represented by the derivative to
an assessment of the enterprise value of AMR GP Limited, which is then adjusted to reflect marketability and control commensurate with
the size of the investment. The enterprise value has been estimated using a blend of measures including an income-based approach and a
market-based approach. Due to the size of the potential investment, as a proportion of the equity of AMR GP Limited, there are no plausible
sensitivities which would give rise to a material variation in the carrying value of the derivative.
There is a further embedded derivative in the agreement in respect of an additional economic interest in the equity of AMR GP Limited
which has been assessed as having a carrying value of £nil at inception. This derivative entitles the Group to subscribe for further share
capital in AMR GP Limited in the event that the sponsorship agreement is extended for a further 5 year period. The fair value movement in
this derivative for the year ended 31 December 2020 was £0.4m and is recognised within the Income Statement in administrative expenses.
The movement in the value of this derivative has been estimated using the same method as the warrant equity option disclosed above.
There is no corresponding liability recorded as it is a non-option embedded derivative.
21 TRADE AND OTHER PAYABLES
CURRENT TRADE AND OTHER PAYABLES
Trade payables
Customer deposits and advances
Accruals and other payables
Deferred income – service packages
Due to related parties (note 31)
* See note 2 for further detail on the restatement.
2020
£m
104.3
268.5
200.4
4.4
1.3
578.9
2019
restated*
£m
138.5
319.3
272.0
3.7
0.6
734.1
Trade payables are non-interest bearing and it is the Group’s policy to settle the liability within 90 days.
At 31 December 2020 a repurchase liability of £38.2m including accrued interest of £0.3m has been recognised in accruals and other
payables and Net Debt (see note 24). In 2020, £64.0m of parts for resale, service parts and production stock were sold for £76.8m (gross of
indirect tax) and subsequently repurchased, of which £40.0m has been subsequently repaid. Under these repurchase agreements, the
Group will repay a further £40.0m gross of indirect tax. As part of this arrangement legal title to the parts was surrendered however control
remained with the Group. The terms of this repurchase arrangement require the liability to be fully settled in 2021.
At 31 December 2019 a repurchase liability of £38.9m including accrued interest of £0.2m, was recognised in accruals and other payables
and Net Debt (see note 24). In November 2019, £32.2m of parts for resale, service parts and production stock were sold for £38.7m (gross
of indirect tax) and subsequently repurchased. Under the repurchase agreement, the Group will repay £40.0m gross of indirect tax. As part
of this arrangement legal title to the parts was surrendered however control remained with the Group. This liability was settled in 2020.
Changes in the Group’s contract liabilities during the year are summarised as follows:
£m
At 1 January
2020
Additional
amounts arising
during the period
Amounts
recognised within
revenue
Significant financing
component for
which an interest
charge is recognised
Amounts
returned and
other changes
At 31 December
2020
Customer deposits and advances
Deferred income – service packages
319.3
13.1
87.8
4.0
(61.6)
(5.2)
1.9
–
(78.9)
–
268.5
11.9
£m
At 1 January
2019
Additional
amounts arising
during the period
Amounts
recognised within
revenue
Significant financing
component for
which an interest
charge is recognised
Amounts
returned and
other changes
At 31 December
2019
Customer deposits and advances
Deferred income – service packages
270.9
12.5
116.1
7.6
(55.3)
(7.0)
8.8
–
(21.2)
–
319.3
13.1
Customer deposits and advances are recognised in revenue when the performance obligation, principally the supply of a limited-edition
vehicle or service of a vehicle, is met by the Group. As part of the normal operating cycle of special vehicle projects, for which these
customer deposits primarily relate to, the Group expects to derecognise a significant proportion over the next 3 years with approximately
£94.0m expected to be recognised in 2021.
In the year ended 31 December 2020, a finance expense of £1.9m (see note 9) was recognised as a significant financing component on
contract liabilities held for greater than 12 months (2019: £8.8m). Upon satisfaction of the linked performance obligation, the liability is
released to revenue so that the total amount taken to the Consolidated Income Statement reflects the sales price the customer would have
paid for the vehicle at that point in time.
The Group applies a practical expedient for short-term advances received from customers whereby the advanced payment is not adjusted
for the effects of a significant financing component. According to the individual terms of the special vehicle contract and the position
of the customer in the staged deposit and vehicle specification process, some deposits are contractually refundable. At 31 December 2020
the Group held £43.1m of contractually refundable deposits (before the impact of significant financing components) (2019: £78.5m).
The special vehicle programs are typically oversubscribed and, in the event that a customer requests reimbursement of their advanced
payment, the newly created allocation is then given to an alternative customer whom is required to make an equivalent advanced payment.
The cumulative significant financing component associated with a reimbursed advance payment is credited in arriving at the net significant
finance charge for the year. Further liquidity risk considerations are disclosed in note 23.
Deferred service package income is recognised in revenue over the service package period.
NON-CURRENT TRADE AND OTHER PAYABLES
Deferred income – service packages
2020
£m
7.5
2019
£m
9.4
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22 OTHER FINANCIAL LIABILITIES
Forward currency contracts held at fair value
Other derivative contracts (see note 20)
Derivative option over own shares (see note 23)
Analysed as:
Current
Non-current
23 FINANCIAL INSTRUMENTS
2020
£m
0.5
2.9
79.9
83.3
83.3
–
83.3
2019
£m
8.9
–
–
8.9
6.3
2.6
8.9
GROUP
The Group's principal financial instruments comprise Cash and Cash Equivalents, Senior Secured Notes (“SSNs”), a Revolving Credit Facility, a
finished vehicle financing facility, a loan to finance the construction of the paint shop at St. Athan, back-to-back loans and forward currency
contracts. Additionally, the Group has trade payables and trade receivables which arise directly from its operations. Included in trade and
other payables is a liability relating to an inventory repurchase arrangement. These short-term assets and liabilities are included in the currency
risk disclosure. The main risks arising from the Group's financial instruments are credit risk, interest rate risk, currency risk and liquidity risk.
The Board of Directors have overall responsibility for the establishment and oversight of the Group's risk management framework. The
Group's risk policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and
monitor adherence to limits. The Board of Directors oversee how management monitor compliance with the Group risk management
policies and procedures and reviews the adequacy of the risk management framework in relation to specific risks faced by the Group.
CREDIT RISK
The Group sells vehicles through a global dealer network. Dealers outside of North America are required to pay for vehicles in advance of
their despatch or use the wholesale financing scheme (see note 18). Dealers within North America are allowed 10-day credit terms from the
date of invoice or use of the wholesale financing scheme. In certain circumstances, after thorough consideration of the credit history of an
individual dealer, the Group may sell vehicles outside of the credit risk insurance policy or on deferred payment terms. Parts sales, which
represent a smaller element of total revenue, are made to dealers on 30-day credit terms. Servicing receivables are due for payment on
collection of the vehicle.
Trade and other receivables are only written off when the Group has exhausted all options to recover the amounts due and provided for in
full when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst
others, the failure of the debtor to engage in a repayment plan with the Group and a failure to make contractual payments. An expected
credit loss provision is then calculated on the remaining trade and other receivables.
In generating the expected credit loss provision, historical credit loss rates for the preceding 5 years are calculated, including consideration
given to future factors that may affect the ability of customers to settle receivables including the impact of COVID-19, and applied to the
trade and other receivable aging buckets at the year-end. The Group applies the simplified approach to measuring expected credit losses
which uses a lifetime expected loss allowance for all trade receivables. The Group has no material contract assets.
In presenting the loss allowance summary below, the specific loss allowance and original receivables balance of £19.0m disclosed in note
5 has been excluded so as to not distort the expected loss rate. The trade receivable loss allowance as at 31 December is as follows:
Current
1 – 30 days past due
31 – 60 days past due
61+ days past due
As at 31 December 2020
As at 31 December 2019
Expected Loss
Rate
%
Gross Carrying
Amount
£m
Loss
Allowance
£m
Expected Loss
Rate
%
Gross Carrying
Amount
£m
Loss
Allowance
£m
*
*
*
33.8%
91.8
5.2
0.3
8.0
105.3
–
–
–
2.7
2.7
*
*
*
6.8%
117.8
30.2
10.6
17.7
176.3
–
–
–
1.2
1.2
* The expected loss rates for these specific ageing categories are not disclosed as no material loss allowance is generated when applied against the gross
carrying value.
The closing loss allowance for trade receivables, including the specific loss allowance disclosed in note 5 of £19.0m, reconciles to the
opening loss allowance as follows:
Opening loss allowance as at 1 January
Increase in loss allowance recognised in the Income Statement – Other expense (note 5)
Increase in loss allowance recognised in the Income Statement – Administrative and other operating expenses
Receivables written-off during the year as uncollectible
At 31 December
2020
£m
20.2
–
1.5
–
21.7
2019
£m
0.2
19.0
1.0
–
20.2
126
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22 OTHER FINANCIAL LIABILITIES
Forward currency contracts held at fair value
Other derivative contracts (see note 20)
Derivative option over own shares (see note 23)
Analysed as:
Current
Non-current
23 FINANCIAL INSTRUMENTS
GROUP
The Group's principal financial instruments comprise Cash and Cash Equivalents, Senior Secured Notes (“SSNs”), a Revolving Credit Facility, a
finished vehicle financing facility, a loan to finance the construction of the paint shop at St. Athan, back-to-back loans and forward currency
contracts. Additionally, the Group has trade payables and trade receivables which arise directly from its operations. Included in trade and
other payables is a liability relating to an inventory repurchase arrangement. These short-term assets and liabilities are included in the currency
risk disclosure. The main risks arising from the Group's financial instruments are credit risk, interest rate risk, currency risk and liquidity risk.
The Board of Directors have overall responsibility for the establishment and oversight of the Group's risk management framework. The
Group's risk policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and
monitor adherence to limits. The Board of Directors oversee how management monitor compliance with the Group risk management
policies and procedures and reviews the adequacy of the risk management framework in relation to specific risks faced by the Group.
CREDIT RISK
The Group sells vehicles through a global dealer network. Dealers outside of North America are required to pay for vehicles in advance of
their despatch or use the wholesale financing scheme (see note 18). Dealers within North America are allowed 10-day credit terms from the
date of invoice or use of the wholesale financing scheme. In certain circumstances, after thorough consideration of the credit history of an
individual dealer, the Group may sell vehicles outside of the credit risk insurance policy or on deferred payment terms. Parts sales, which
represent a smaller element of total revenue, are made to dealers on 30-day credit terms. Servicing receivables are due for payment on
collection of the vehicle.
Trade and other receivables are only written off when the Group has exhausted all options to recover the amounts due and provided for in
full when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst
others, the failure of the debtor to engage in a repayment plan with the Group and a failure to make contractual payments. An expected
credit loss provision is then calculated on the remaining trade and other receivables.
In generating the expected credit loss provision, historical credit loss rates for the preceding 5 years are calculated, including consideration
given to future factors that may affect the ability of customers to settle receivables including the impact of COVID-19, and applied to the
trade and other receivable aging buckets at the year-end. The Group applies the simplified approach to measuring expected credit losses
which uses a lifetime expected loss allowance for all trade receivables. The Group has no material contract assets.
In presenting the loss allowance summary below, the specific loss allowance and original receivables balance of £19.0m disclosed in note
5 has been excluded so as to not distort the expected loss rate. The trade receivable loss allowance as at 31 December is as follows:
As at 31 December 2020
As at 31 December 2019
Expected Loss
Gross Carrying
Loss
Expected Loss
Gross Carrying
Amount
Allowance
Amount
Allowance
Rate
%
*
*
*
33.8%
£m
91.8
5.2
0.3
8.0
105.3
£m
–
–
–
2.7
2.7
Rate
%
*
*
*
6.8%
Current
1 – 30 days past due
31 – 60 days past due
61+ days past due
carrying value.
* The expected loss rates for these specific ageing categories are not disclosed as no material loss allowance is generated when applied against the gross
The closing loss allowance for trade receivables, including the specific loss allowance disclosed in note 5 of £19.0m, reconciles to the
opening loss allowance as follows:
Opening loss allowance as at 1 January
Increase in loss allowance recognised in the Income Statement – Other expense (note 5)
Increase in loss allowance recognised in the Income Statement – Administrative and other operating expenses
Receivables written-off during the year as uncollectible
At 31 December
£m
117.8
30.2
10.6
17.7
176.3
2020
£m
20.2
1.5
–
–
21.7
Loss
£m
–
–
–
1.2
1.2
2019
£m
0.2
19.0
1.0
–
20.2
2020
£m
0.5
2.9
79.9
83.3
83.3
–
83.3
2019
£m
8.9
–
–
8.9
6.3
2.6
8.9
23 FINANCIAL INSTRUMENTS (CONTINUED)
BORROWINGS
The following table analyses Group borrowings:
Current
Bank loans and overdrafts
Non-current
Senior Secured Notes
Bank loans
Total non-current borrowings
Total borrowings
Total borrowings are denominated in the following currencies, in sterling at the year-end exchange rates:
Sterling
US Dollar
Total borrowings
2020
£m
2019
£m
113.5
114.8
965.0
6.3
971.3
1,084.8
2020
£m
119.8
965.0
1,084.8
829.9
9.2
839.1
953.9
2019
£m
403.0
550.9
953.9
Current Borrowings
The Group has a Revolving Credit Facility (“RCF”) attached to the new SSNs (see Non-Current Borrowings below) and it also had a RCF
attached to the previous SSNs. Transaction costs of £2.4m for the year ended 31 December 2020 relating to the new RCF were capitalised
and are amortised using the effective interest rate. The amounts included in current borrowings relating to the RCF at 31 December 2020
are £76.2m (2019 £70.0m). At 31 December 2020 £78.6m of the £90.6m RCF was drawn as cash (2019: £70.0m of an £80.0m facility).
The Group holds a series of one-year back-to-back loan arrangements with HSBC Bank plc, whereby Chinese Renminbi to a value at the
time of £34.4m (2019: £36.7m) have been deposited in a restricted account with HSBC in China in exchange for a Sterling overdraft facility
with HSBC Bank plc in the United Kingdom. The restricted cash has been revalued at 31 December 2020 to £35.8m (2019: £36.3m) and is
shown in cash and cash equivalents. The facility of £34.4m (2019: £36.7m) is shown within Borrowings in Current Liabilities on the
Statement of Financial Position.
In 2018 the Group entered into a fixed rate loan to finance the construction of the paint shop at the new St. Athan manufacturing facility
which matures on 31 March 2022. The loan is secured against the paint shop assets, with the final payment on 31 March 2022 including a
capital payment of £6.3m accounted for as part of the effective interest rate over the term of the loan. At 31 December 2020 the amount
included in current borrowings was £2.9m (2019: £2.9m).
The Group has separate arrangements to finance in-transit finished vehicles and certain finished vehicle inventory. Total borrowings on
these facilities at 31 December 2020 were £nil (2019: £4.4m) and £nil (2019: £0.8m) respectively.
Non-Current Borrowings held at 31 December 2020
In December 2020 the Group refinanced all SSNs in issue with new SSNs. All SSNs are secured by fixed and floating charges over certain assets
of the Group. At 31 December 2020 the Group holds £965.0m (2019: £829.9m) of SSNs comprising First and Second Lien SSNs of $1,085.5m
at 10.5% cash interest and $335m at 8.89% cash interest and 6.11% Payment in Kind (“PIK”) interest respectively. The Second Lien Notes were
issued at a 2% discount and include detachable share warrants (see below). The First Lien Notes are repayable in November 2025 and the
Second Lien Notes in November 2026. Transaction costs and discounts on issuance are amortised using the effective interest rate.
Transaction costs capitalised on the First and Second Lien SSNs amounted to £37.3m (2019: £5.4m). The acceleration of the unamortised
fees, discounts on issuance, and redemption premiums were charged to the Income Statement at the point of redemption. These items have
been included in adjusting items (see note 6).
The non-current element of the fixed rate loan to finance the construction of the paint shop at the new St. Athan manufacturing facility was
£6.3m at 31 December 2020 (2019: £9.2m).
Derivative option over own shares
The Second Lien SSNs include detachable warrants enabling the warrant holders to subscribe for a number of Ordinary Shares in the
Company at the subscription price of £10 per share. The warrant holders have the right to exchange their warrant options for a reduced
number of warrant shares resulting in no cash being paid to receive the shares. The ratio at which this exchange can be transacted is
determined by the share price at execution of the options. A derivative option liability has been recorded at 31 December 2020 due to the
uncertain number of shares which will be issued under the agreement.
The warrants can be exercised from 1 July 2021 through to 7 December 2027. The issuance of debt with attached warrants required the Group
to separately assess the fair value of the warrants and the debt. The fair value of the warrants was determined using a Binomial model used to
predict the behaviour of the warrant holders and when they might exercise their holdings. The derivative option liability was initially recognised
as a derivative forward at fair value with changes in the fair value being recognised in the Income Statement until issuance of the warrants on 7
December resulting in an initial valuation of £34.6m. Upon issuance of the $335m SSNs, the carrying value of the debt was reduced by the
same amount. The debt will be increased via an effective interest charge over the term of the SSNs. Upon issuance of the warrants, changes in
the fair value of the derivative option from 7 December until 31 December 2020 were all recognised in the Income Statement. A total charge to
the Income Statement of £45.3m has been recognised in the year and is presented in adjusting items (see note 6).
126
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127
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
23 FINANCIAL INSTRUMENTS (CONTINUED)
BORROWINGS (CONTINUED)
Non-Current Borrowings repaid during 2020
On 1 April 2019 the Group issued $190m 6.5% SSNs at a discount of 5% to the par redemption value. The discount was charged to
finance expense within the Consolidated Income Statement over the term of the notes based on the effective interest rate method.
In 8 October 2019 the Group issued $150m 12% (6% PIK, 6% cash interest) SSNs with a 6% premium on redemption. This premium was
accounted for as part of the effective interest rate and charged to finance expense within the Consolidated Income Statement over the term
of these notes.
The Group held the option for an additional $100m of Delayed Draw Notes linked to the $150m SSNs issued on 8 October 2019. $68m
12% (6% PIK, 6% cash interest) of Delayed Draw Notes with a 6% redemption premium were drawn in July 2020. This premium was
accounted for as part of the effective interest rate and was charged to finance expense within the Consolidated Income Statement over the
term of these notes.
In addition, the Group held $400m 6.5% Senior Secured Notes and £285m 5.75% Senior Secured Notes both of which were due to mature
in April 2022.
In July 2020 the Group received a £20.0m Coronavirus Large Business Interruption Loan Scheme loan. The loan was due for repayment in
January 2022 and was at an interest rate of LIBOR plus a margin of 2.36%. As part of the refinancing of the SSNs this loan was repaid in
December 2020.
These borrowings were repaid in the year which gave rise to a £21.4m premium on redemption. It was considered that the debts were
extinguished at the point of settlement. Professional fees capitalised against the existing SSNs of £7.6m were written off to the Income
Statement upon redemption. Both of these costs are included in adjusting items (see note 6).
INTEREST RATE RISK
The only interest rate risk that the Group is exposed to is on the back-to-back loan arrangement with HSBC Bank plc, whereby Chinese
Renminbi have been deposited in a restricted account with HSBC in China in exchange for a Sterling overdraft facility with HSBC Bank plc
in the United Kingdom. The interest rate charged on the overdraft facility is based on the Bank of England Base Rate.
Profile
At 31 December the interest rate profile of the Group's interest-bearing financial instruments was:
Fixed rate instruments
Financial liabilities
Variable rate instruments
Financial liabilities
2020
£m
2019
£m
1,050.4
917.2
34.4
36.7
Borrowings, including the new SSNs drawn in December 2020, the previous SSNs repaid in December 2020 and the loan to finance the
paint shop in St Athan, are at fixed interest rates. The rate of interest on the RCF, which is attached to the SSNs, is based on LIBOR plus a
percentage spread and is predetermined at the date of the drawdown of the RCF so is considered to be fixed rate for the analysis above.
The interest rate charged on both the in-transit and certain finished vehicle facilities are based on the lender's cost of funds at the point of
the borrowing.
In 2019 and 2020 the Group entered into an inventory repurchase arrangement (not included within the financial liabilities noted above).
The interest charged on this arrangement is determined as the difference between the sales and repurchase value and is therefore fixed at
the time of entering into the arrangement. The repayment terms of this arrangement are not in excess of 270 days.
Surplus cash funds, when appropriate, are placed on deposit and attract interest at a variable rate derived from LIBOR.
INTEREST RATE RISKS – SENSITIVITY
The following table demonstrates the sensitivity, with all other variables held constant, of the Group’s profit after tax to a reasonably
possible change in interest rates on the back-to-back loan arrangement with HSBC Bank plc.
Bank of England base rate
2020
£m
Effect
on profit
after tax
(Increase)/
decrease in
interest rate
1.00%
0.3
2019
£m
Effect
on profit
after tax
0.3
FOREIGN CURRENCY EXPOSURE
The Group’s exposure to the risk of changes in foreign currency exchange relates primarily to US Dollar sales (including inter-group sales),
Chinese Renminbi sales and Euro denominated purchases.
At 31 December 2020 the Group hedged 70% and 31% for 2021 and 2022 respectively (2019: 80%, 68% and 34% for 2020, 2021 and
2022 respectively), of its US dollar denominated highly probable inter-company sales, and 10% and 2% of its Euro denominated purchases
for 2021 and 2022 (2019: 38%, 12% and 2% of its Euro denominated purchases for 2020, 2021 and 2022). These foreign currency risks are
hedged by using foreign currency forward contracts and the $400m SSNs repaid in December 2020.
128
128
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
23 FINANCIAL INSTRUMENTS (CONTINUED)
BORROWINGS (CONTINUED)
Non-Current Borrowings repaid during 2020
On 1 April 2019 the Group issued $190m 6.5% SSNs at a discount of 5% to the par redemption value. The discount was charged to
finance expense within the Consolidated Income Statement over the term of the notes based on the effective interest rate method.
In 8 October 2019 the Group issued $150m 12% (6% PIK, 6% cash interest) SSNs with a 6% premium on redemption. This premium was
accounted for as part of the effective interest rate and charged to finance expense within the Consolidated Income Statement over the term
The Group held the option for an additional $100m of Delayed Draw Notes linked to the $150m SSNs issued on 8 October 2019. $68m
12% (6% PIK, 6% cash interest) of Delayed Draw Notes with a 6% redemption premium were drawn in July 2020. This premium was
accounted for as part of the effective interest rate and was charged to finance expense within the Consolidated Income Statement over the
In addition, the Group held $400m 6.5% Senior Secured Notes and £285m 5.75% Senior Secured Notes both of which were due to mature
In July 2020 the Group received a £20.0m Coronavirus Large Business Interruption Loan Scheme loan. The loan was due for repayment in
January 2022 and was at an interest rate of LIBOR plus a margin of 2.36%. As part of the refinancing of the SSNs this loan was repaid in
These borrowings were repaid in the year which gave rise to a £21.4m premium on redemption. It was considered that the debts were
extinguished at the point of settlement. Professional fees capitalised against the existing SSNs of £7.6m were written off to the Income
Statement upon redemption. Both of these costs are included in adjusting items (see note 6).
The only interest rate risk that the Group is exposed to is on the back-to-back loan arrangement with HSBC Bank plc, whereby Chinese
Renminbi have been deposited in a restricted account with HSBC in China in exchange for a Sterling overdraft facility with HSBC Bank plc
in the United Kingdom. The interest rate charged on the overdraft facility is based on the Bank of England Base Rate.
At 31 December the interest rate profile of the Group's interest-bearing financial instruments was:
of these notes.
term of these notes.
in April 2022.
December 2020.
INTEREST RATE RISK
Profile
Fixed rate instruments
Financial liabilities
Variable rate instruments
Financial liabilities
2020
£m
2019
£m
1,050.4
917.2
34.4
36.7
Borrowings, including the new SSNs drawn in December 2020, the previous SSNs repaid in December 2020 and the loan to finance the
paint shop in St Athan, are at fixed interest rates. The rate of interest on the RCF, which is attached to the SSNs, is based on LIBOR plus a
percentage spread and is predetermined at the date of the drawdown of the RCF so is considered to be fixed rate for the analysis above.
The interest rate charged on both the in-transit and certain finished vehicle facilities are based on the lender's cost of funds at the point of
the borrowing.
In 2019 and 2020 the Group entered into an inventory repurchase arrangement (not included within the financial liabilities noted above).
The interest charged on this arrangement is determined as the difference between the sales and repurchase value and is therefore fixed at
the time of entering into the arrangement. The repayment terms of this arrangement are not in excess of 270 days.
Surplus cash funds, when appropriate, are placed on deposit and attract interest at a variable rate derived from LIBOR.
INTEREST RATE RISKS – SENSITIVITY
The following table demonstrates the sensitivity, with all other variables held constant, of the Group’s profit after tax to a reasonably
possible change in interest rates on the back-to-back loan arrangement with HSBC Bank plc.
2020
£m
Effect
on profit
after tax
2019
£m
Effect
on profit
after tax
0.3
(Increase)/
decrease in
interest rate
1.00%
0.3
23 FINANCIAL INSTRUMENTS (CONTINUED)
FOREIGN CURRENCY EXPOSURE (CONTINUED)
The Group’s sterling equivalents of financial assets and liabilities (excluding borrowings analysed by currency above) denominated in
foreign currencies at 31 December were:
At 31 December 2020
Financial assets
Trade and other receivables
Foreign currency contracts
Cash held not available for short-term use
Cash balances
Financial liabilities
Trade and other payables
Lease liabilities
Customer deposits and advances
Foreign currency contracts
Net balance sheet exposure
At 31 December 2019
Financial assets
Trade and other receivables
Foreign exchange contracts
Cash held not available for short-term use
Cash balances
Financial liabilities
Trade and other payables restated
Lease liabilities
Customer deposits and advances
Foreign exchange contracts
Net balance sheet exposure
Euros
£m
9.8
–
–
7.4
17.2
(10.2)
(0.1)
(14.5)
–
(24.8)
(7.6)
Euros
£m
20.5
–
–
12.1
32.6
(116.5)
(2.2)
(0.2)
–
(118.9)
(86.3)
US Dollars
£m
Chinese
Renminbi
£m
34.2
0.6
–
46.5
81.3
(29.5)
(0.1)
(13.5)
(0.3)
(43.4)
37.9
1.7
–
9.9
58.2
69.8
(11.6)
(0.2)
(6.4)
–
(18.2)
51.6
US Dollars
£m
Chinese
Renminbi
£m
75.1
–
–
29.6
104.7
(74.2)
(0.2)
(15.8)
(8.6)
(98.8)
5.9
18.4
–
8.7
46.5
73.6
(11.4)
(0.5)
(7.9)
–
(19.8)
53.8
Other
£m
28.3
0.2
–
12.3
40.8
(1.3)
(7.2)
(6.0)
(0.2)
(14.7)
26.1
Other
£m
1.8
0.4
–
5.4
7.6
(6.4)
(8.1)
–
(0.3)
(14.8)
(7.2)
Total
£m
74.0
0.8
9.9
124.4
209.1
(52.6)
(7.6)
(40.4)
(0.5)
(101.1)
108.0
Total
£m
115.8
0.4
8.7
93.6
218.5
(208.5)
(11.0)
(23.9)
(8.9)
(252.3)
(33.8)
The following significant exchange rates applied:
Euro
Chinese Renminbi
US Dollar
Average Rate
2020
Average Rate
2019
Closing Rate
2020
Closing Rate
2019
1.13
8.92
1.28
1.13
8.74
1.27
1.12
8.93
1.37
1.18
9.23
1.33
CURRENCY RISK – SENSITIVITY
The following table demonstrates the sensitivity to a change in the US Dollar, Euro and Chinese Renminbi exchange rates with all other
variables held constant, of the Group's profit after tax (due to changes in the fair value of monetary assets and liabilities) assuming that none
of the US Dollar or Euro exposures are used as hedging instruments.
Bank of England base rate
FOREIGN CURRENCY EXPOSURE
The Group’s exposure to the risk of changes in foreign currency exchange relates primarily to US Dollar sales (including inter-group sales),
Chinese Renminbi sales and Euro denominated purchases.
At 31 December 2020 the Group hedged 70% and 31% for 2021 and 2022 respectively (2019: 80%, 68% and 34% for 2020, 2021 and
2022 respectively), of its US dollar denominated highly probable inter-company sales, and 10% and 2% of its Euro denominated purchases
for 2021 and 2022 (2019: 38%, 12% and 2% of its Euro denominated purchases for 2020, 2021 and 2022). These foreign currency risks are
hedged by using foreign currency forward contracts and the $400m SSNs repaid in December 2020.
US Dollar
US Dollar
Euro
Euro
Chinese Renminbi
Chinese Renminbi
(Increase)/
decrease in rate
Effect on profit
after tax
2020
£m
Effect on profit
after tax
2019
£m
(5%)
5%
(5%)
5%
(5%)
5%
(4.6)
5.0
7.7
(8.5)
(1.9)
2.1
(7.7)
8.6
12.3
(13.6)
(2.3)
2.5
128
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
129
129
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
23 FINANCIAL INSTRUMENTS (CONTINUED)
CURRENCY RISK – SENSITIVITY (CONTINUED)
$1,085.5m and $335m Senior Secured Notes
In December 2020 the Group repaid its existing SSNs and took out new First Lien and Second Lien SSNs at $1085.5m and $335m
respectively. At 31 December 2020 the Group had not hedged the new SSNs. Foreign currency gains/(losses) on these SSNs, due to
exchange rate movements between the US Dollar and Sterling, are charged to the Consolidated Income Statement within finance
income/(expense). A corresponding change in the translated sterling value of these SSNs is reflected in the Consolidated Statement of
Financial Position.
$400m Senior Secured Notes
The Group had designated $400m of SSNs as a hedging instrument in respect of $400m of highly probable forecast US Dollar sales that are
not already hedged with forward contracts. These SSNs were repaid in December 2020 and hedge accounting was discontinued from the
date of repayment. As the forecast transactions are still expected to occur the amount accumulated in the cash flow hedge reserve at the
repayment date will be released to the Income Statement in line with the profile of the future US Dollar sales to which it relates.
HEDGE ACCOUNTING
The Group is primarily exposed to US Dollar currency variations on the sale of vehicles and parts, and Euro currency variations on the
purchase of raw material parts and services. As part of its risk management policy, the Group uses derivative financial instruments in the
form of currency forward contracts to manage the cash flow risk resulting from these exchange rate movements. The Group had designated
the foreign exchange movement on the $400m SSNs as part of a cash flow hedging relationship, to manage the exchange rate risk resulting
from forecast US dollar inter-company sales. Together these are referred to as cash flow hedges. The cash flow hedges give certainty over
the transactional values to be recognised in the Consolidated Income Statement, and in the case of the forward contracts, certainty around
the value of cash flows arising as foreign currencies are exchanged at predetermined rates.
The Group hedges significant foreign currency exposures as follows:
• Firstly, with currency forward contracts on a reducing basis with the highest coverage in the year immediately following the year-end
date. When practicable, the Group places additional hedges on a regular basis so that the percentage of the foreign currency exposure
hedged increases as the time to maturity of the foreign currency exposure reduces.
• Secondly, the Group has designated $400m of SSNs as a hedging instrument in respect of $400m of highly probable forecast US Dollar
sales that are not already hedged with forward contracts. These SSNs were repaid in December 2020.
The Group currently has no active currency forward contract cash flow hedges beyond 2022. The Group does not mitigate all transactional
foreign currency exposures, with the unhedged proportion converted at exchange rates prevailing on the date of the transaction.
Derivative financial instruments
Derivative financial instruments are recorded at fair value. The hedging instruments of the cash flow hedge relationship have been
designated as the spot element of forward foreign exchange contract, and the forward points are excluded from the hedge relationship. The
hedged items have been designated as highly probable forecast net sales or purchases denominated in foreign currencies.
Where the value of the hedging instrument matches the value of the hedged item in a 1:1 hedge ratio, the hedge is effective, and changes in
the fair value of the hedging instrument attributable to the spot risk are considered an effective hedge and recognised in the cash flow hedge
reserve within Other Comprehensive Income. Changes in fair value attributable to forward points are recognised in the cost of hedging
reserve within Other Comprehensive Income.
Where the value of hedging instrument is greater than the value of the hedged item, the excess portion is recognised as the ineffective
portion of the gain or loss on the hedging instrument and is recorded immediately in the Income Statement.
When the expected volume of hedged highly probable forecast transactions is lower than the designated volume, and a portion of the
hedged item is no longer highly probable to occur, hedge accounting is discontinued for that portion. If the hedged future cash flows are
still expected to occur, then the accumulated amount in cash flow hedge reserve relating to the discontinued portion remains in the cash
flow hedge reserve until the future cash flows occur. If the hedged future cash flows are no longer expected to occur, then that amount is
immediately reclassified from the cash flow hedge reserve to the Income Statement as a reclassification adjustment.
Certain forward foreign exchange contracts were designated as hedges with effect from 1 July 2019. Prior to this, all movements in the fair
value had been recorded within finance expense as an adjusting item (see note 9) reflecting the non-recurring nature of the absence of a
designated hedge relationship for such instruments. Subsequent to 1 July 2019, in respect of these forward foreign exchange contracts only,
the movement in fair value attributable to forward points is recorded within cost of sales in the Consolidated Income Statement.
$400m Senior Secured Notes
The $400m SSNs were repaid in December 2020. Prior to repayment they were recorded at amortised cost and translated into sterling at
the year-end or repayment date closing rates with movements in the carrying value due to foreign exchange movements offset by
movements in the value of the highly probable forecast sales from US Dollars to Sterling. When the hedge ratio is 1:1 the value of the
hedging instrument matches the value of the hedged item. In this case, the change in the carrying value of these SSNs, arising as a result of
exchange differences, is recognised through Other Comprehensive Income into the Hedge Reserve instead of within finance
income/(expense).
When the value of the hedging instrument is greater than the value of the hedged item the excess portion is recognised as ineffective and is
recorded immediately to finance expense in the Income Statement.
The amounts recorded within the Hedge Reserve, including the Cost of Hedging Reserve, are reclassified to the Consolidated Income
Statement when the hedged item affects the Consolidated Income Statement. Due to the nature of the hedged items, all amounts reclassified
to the Income Statement are recorded in cost of sales (2019: all cost of sales), except for ineffective amounts relating to the $400m SSNs
which have been recorded as finance expense in the Income Statement.
130
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
23 FINANCIAL INSTRUMENTS (CONTINUED)
HEDGE ACCOUNTING (CONTINUED)
Main sources of hedge ineffectiveness
Other than previously described, in relation only to forward contracts designated as a hedge, the main sources of potential hedge
ineffectiveness relate to potential differences in the nominal value of hedged items and the hedging instrument should they occur.
The impact of hedging instruments on the Statement of Financial Position is as follows:
Foreign exchange forward contracts – other financial assets
Foreign exchange forward contracts – other financial liabilities
$400m Senior Secured Notes – hedge instrument
31 December 2020
31 December 2019
Notional
value
£m
Carrying
value
£m
56.8
28.2
299.6
0.8
(0.5)
–
Change in fair
value used for
measuring
ineffectiveness
£m
1.3
1.4
2.0
Notional
value
£m
34.9
220.0
301.6
Carrying
value
£m
0.4
(8.9)
301.6
Change in fair
value used for
measuring
ineffectiveness
£m
0.4
(10.3)
12.6
The impact of hedged items on the Statement of Financial Position is as follows:
Foreign exchange forward contracts
$400m Senior Secured Notes – hedge instrument
Tax on fair value movements recognised in OCI
31 December 2020
31 December 2019
Cash flow Hedge
Reserve
£m
Cost of Hedging
Reserve
£m
Cash flow Hedge
Reserve
£m
Cost of Hedging
Reserve
£m
4.7
10.5
(3.0)
(1.6)
–
0.3
0.1
(0.8)
0.1
(2.0)
–
0.3
The effect of the cash flow hedge in the Consolidated Income Statement and Other Comprehensive Income is:
Year-ended 31 December 2020
Foreign exchange forward contracts
$400m Senior Secured Notes – hedge instrument
$400m Senior Secured Notes – hedge instrument
Tax on fair value movements recognised in OCI
5.0
4.5
6.8
(3.1)
Total hedging
gain/(loss)
recognised
in OCI
£m
Ineffectiveness
recognised in
the Income
Statement
£m
Fair value
movement
on cash flow
hedges
£m
4.6
2.0
–
(1.3)
Amount
reclassified
from OCI to
the Income
Income
Statement
Statement
£m
line item
0.4 Cost of Sales
2.5 Cost of Sales
6.8 Cost of Sales
(1.8) Cost of Sales
Income
Statement
line item
Cost of Sales
Finance
Expense
2.3
2.5
–
–
Cost of Sales
–
Hedge ineffectiveness recognised in 2020 within the Consolidated Income Statement relates to differences in the nominal value of the
hedged items and the hedging instrument. At 31 December 2020 there are no balances remaining in the cash flow hedge reserve from
hedging relationships for which hedge accounting is no longer required.
Year-ended 31 December 2019
Foreign exchange forward contracts
Foreign exchange forward contracts
$400m Senior Secured Notes – hedge instrument
Tax on fair value movements recognised in OCI
Total hedging
gain/(loss)
recognised
in OCI
£m
Ineffectiveness
recognised in
the Income
Statement
£m
1.4
5.5
17.7
(3.4)
6.6
4.9
–
–
Fair value
movement
on cash flow
hedges
£m
Amount
reclassified
from OCI to
the Income
Statement
£m
Income
Statement
line item
Cost of Sales
–
(3.7)
12.7
(1.6)
1.4
9.2 Cost of Sales
5.0 Cost of Sales
(1.8) Cost of Sales
Income
Statement
line item
Finance
Expense
Cost of Sales
–
–
At 31 December 2019 there are no balances remaining in the cash flow hedge reserve from hedging relationships for which hedge
accounting is no longer required.
130
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
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131
23 FINANCIAL INSTRUMENTS (CONTINUED)
CURRENCY RISK – SENSITIVITY (CONTINUED)
$1,085.5m and $335m Senior Secured Notes
In December 2020 the Group repaid its existing SSNs and took out new First Lien and Second Lien SSNs at $1085.5m and $335m
respectively. At 31 December 2020 the Group had not hedged the new SSNs. Foreign currency gains/(losses) on these SSNs, due to
exchange rate movements between the US Dollar and Sterling, are charged to the Consolidated Income Statement within finance
income/(expense). A corresponding change in the translated sterling value of these SSNs is reflected in the Consolidated Statement of
Financial Position.
$400m Senior Secured Notes
The Group had designated $400m of SSNs as a hedging instrument in respect of $400m of highly probable forecast US Dollar sales that are
not already hedged with forward contracts. These SSNs were repaid in December 2020 and hedge accounting was discontinued from the
date of repayment. As the forecast transactions are still expected to occur the amount accumulated in the cash flow hedge reserve at the
repayment date will be released to the Income Statement in line with the profile of the future US Dollar sales to which it relates.
HEDGE ACCOUNTING
The Group is primarily exposed to US Dollar currency variations on the sale of vehicles and parts, and Euro currency variations on the
purchase of raw material parts and services. As part of its risk management policy, the Group uses derivative financial instruments in the
form of currency forward contracts to manage the cash flow risk resulting from these exchange rate movements. The Group had designated
the foreign exchange movement on the $400m SSNs as part of a cash flow hedging relationship, to manage the exchange rate risk resulting
from forecast US dollar inter-company sales. Together these are referred to as cash flow hedges. The cash flow hedges give certainty over
the transactional values to be recognised in the Consolidated Income Statement, and in the case of the forward contracts, certainty around
the value of cash flows arising as foreign currencies are exchanged at predetermined rates.
The Group hedges significant foreign currency exposures as follows:
• Firstly, with currency forward contracts on a reducing basis with the highest coverage in the year immediately following the year-end
date. When practicable, the Group places additional hedges on a regular basis so that the percentage of the foreign currency exposure
hedged increases as the time to maturity of the foreign currency exposure reduces.
• Secondly, the Group has designated $400m of SSNs as a hedging instrument in respect of $400m of highly probable forecast US Dollar
sales that are not already hedged with forward contracts. These SSNs were repaid in December 2020.
The Group currently has no active currency forward contract cash flow hedges beyond 2022. The Group does not mitigate all transactional
foreign currency exposures, with the unhedged proportion converted at exchange rates prevailing on the date of the transaction.
Derivative financial instruments
Derivative financial instruments are recorded at fair value. The hedging instruments of the cash flow hedge relationship have been
designated as the spot element of forward foreign exchange contract, and the forward points are excluded from the hedge relationship. The
hedged items have been designated as highly probable forecast net sales or purchases denominated in foreign currencies.
Where the value of the hedging instrument matches the value of the hedged item in a 1:1 hedge ratio, the hedge is effective, and changes in
the fair value of the hedging instrument attributable to the spot risk are considered an effective hedge and recognised in the cash flow hedge
reserve within Other Comprehensive Income. Changes in fair value attributable to forward points are recognised in the cost of hedging
reserve within Other Comprehensive Income.
Where the value of hedging instrument is greater than the value of the hedged item, the excess portion is recognised as the ineffective
portion of the gain or loss on the hedging instrument and is recorded immediately in the Income Statement.
When the expected volume of hedged highly probable forecast transactions is lower than the designated volume, and a portion of the
hedged item is no longer highly probable to occur, hedge accounting is discontinued for that portion. If the hedged future cash flows are
still expected to occur, then the accumulated amount in cash flow hedge reserve relating to the discontinued portion remains in the cash
flow hedge reserve until the future cash flows occur. If the hedged future cash flows are no longer expected to occur, then that amount is
immediately reclassified from the cash flow hedge reserve to the Income Statement as a reclassification adjustment.
Certain forward foreign exchange contracts were designated as hedges with effect from 1 July 2019. Prior to this, all movements in the fair
value had been recorded within finance expense as an adjusting item (see note 9) reflecting the non-recurring nature of the absence of a
designated hedge relationship for such instruments. Subsequent to 1 July 2019, in respect of these forward foreign exchange contracts only,
the movement in fair value attributable to forward points is recorded within cost of sales in the Consolidated Income Statement.
$400m Senior Secured Notes
The $400m SSNs were repaid in December 2020. Prior to repayment they were recorded at amortised cost and translated into sterling at
the year-end or repayment date closing rates with movements in the carrying value due to foreign exchange movements offset by
movements in the value of the highly probable forecast sales from US Dollars to Sterling. When the hedge ratio is 1:1 the value of the
hedging instrument matches the value of the hedged item. In this case, the change in the carrying value of these SSNs, arising as a result of
exchange differences, is recognised through Other Comprehensive Income into the Hedge Reserve instead of within finance
income/(expense).
When the value of the hedging instrument is greater than the value of the hedged item the excess portion is recognised as ineffective and is
recorded immediately to finance expense in the Income Statement.
The amounts recorded within the Hedge Reserve, including the Cost of Hedging Reserve, are reclassified to the Consolidated Income
Statement when the hedged item affects the Consolidated Income Statement. Due to the nature of the hedged items, all amounts reclassified
to the Income Statement are recorded in cost of sales (2019: all cost of sales), except for ineffective amounts relating to the $400m SSNs
which have been recorded as finance expense in the Income Statement.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
23 FINANCIAL INSTRUMENTS (CONTINUED)
LIQUIDITY RISK
The Group seeks to manage liquidity risk to ensure sufficient liquidity is available to meet foreseeable needs and, when appropriate, allow
placement of cash on deposit safely and profitably.
The Group has a number of one-year back-to-back loan arrangements with HSBC Bank plc, whereby Chinese Renminbi were deposited in a
restricted account with HSBC in China in exchange for a Sterling overdraft facility with HSBC Bank plc in the United Kingdom. The restricted cash
has been revalued to £35.8m at 31 December 2020 (2019: £36.3m) and is shown in the total of cash and cash equivalents. The overdraft of
£34.4m (2019: £36.7m) is shown in Borrowings in Current Liabilities on the Statement of Financial Position. At 31 December 2020 the Group
had cash and cash equivalents of £489.4m (2019: £107.9m).
At 31 December 2020 the Group holds £965.0m (2019: £829.9m) of SSNs. In December 2020 the Group repaid all SSNs issued at that
date and took out new First and Second Lien SSNs of $1085.5m at 10.5% cash interest and $335m at 8.89% cash interest and 6.11% PIK
interest respectively. The Second Lien Notes were issued at a 2% discount and have share warrants attached to them (see the borrowings
section of note 23). The First Lien Notes are repayable in November 2025 and the Second Lien Notes in November 2026. Transaction costs
and discounts on issue are amortised using the effective interest rate. The US Dollar amounts have been converted to Sterling equivalents
for reporting purposes. Attached to the new SSNs is a £90.6m RCF of which £78.6m was drawn in cash at 31 December 2020. The amount
recorded in the Statement of Financial Position net of unamortised transaction costs of £2.4m is £76.2m. The remaining ancillary facility
has been utilised through the issuance of letters of credit and guarantees. The previous SSNs had an £80.0m RCF attached to them of which
£70.0m was drawn at 31 December 2019. The RCF attached to the new SSNs is available until August 2025.
As part of the normal operating cycle of the Group, customers make advanced payments to secure their allocation of special vehicles
produced in limited numbers. The cash from these advance payments is primarily used to fund upfront costs of the special vehicle project
including raw materials and components required in manufacture. In certain circumstances, according to the individual terms of the special
vehicle contract and the position of the customer in the staged deposit and vehicle specification process, the advanced payments are
contractually refundable. At 31 December 2020 the Group held refundable deposits of £43.1m (2019: £78.5m). The special vehicle
programs are typically oversubscribed and, in the event that a customer requests reimbursement of their advanced payment, the newly
created allocation is then given to an alternative customer who is required to make an equivalent advanced payment.
The maturity profile of the Group’s financial liabilities at 31 December 2020 based on contractual undiscounted payments is as follows.
On demand
£m
Less than 3
months
£m
3 to 12
months
£m
1 to 5
years
£m
>5 years
£m
Contractual Cash
Flows Total
£m
Non-derivative financial liabilities
Bank loans and overdrafts
Senior Secured Notes
Trade and other payables
–
–
–
Refundable customer deposits and advances
43.1
Derivative financial liabilities
Forward exchange contracts
–
43.1
15.8
–
245.5
–
–
261.3
101.9
109.3
65.6
–
0.5
277.3
6.4
1,267.9
7.5
–
–
–
436.6
–
–
–
124.1
1,813.8
318.6
43.1
0.5
1,281.8
436.6
2,300.1
Included in the table above table are interest bearing loans and borrowings at a carrying value of £1,084.8m. The liquidity profile
associated with leases accounted under IFRS 16 is detailed in note 16.
The table below summarises the maturity profile of the Group’s financial liabilities at 31 December 2019 based on contractual
undiscounted payments.
On demand
£m
Less than 3
months
£m
Non-derivative financial liabilities
Bank loans and overdrafts
Senior Secured Notes
Trade and other payables restated
–
–
–
Refundable customer deposits and advances
78.5
Derivative financial liabilities
Forward exchange contracts
–
78.5
94.6
1.8
365.0
–
0.9
462.3
3 to 12
months
£m
24.4
45.4
57.3
–
5.4
132.5
1 to 5
years
£m
6.7
937.1
9.6
–
2.6
956.0
>5 years
£m
–
–
–
–
–
–
Contractual Cash
Flows Total
£m
125.7
984.3
431.9
78.5
8.9
1,629.3
Included in the table above are interest bearing loans and borrowings at a carrying value of £953.9m.
132
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
23 FINANCIAL INSTRUMENTS (CONTINUED)
LIQUIDITY RISK
placement of cash on deposit safely and profitably.
The Group seeks to manage liquidity risk to ensure sufficient liquidity is available to meet foreseeable needs and, when appropriate, allow
The Group has a number of one-year back-to-back loan arrangements with HSBC Bank plc, whereby Chinese Renminbi were deposited in a
restricted account with HSBC in China in exchange for a Sterling overdraft facility with HSBC Bank plc in the United Kingdom. The restricted cash
has been revalued to £35.8m at 31 December 2020 (2019: £36.3m) and is shown in the total of cash and cash equivalents. The overdraft of
£34.4m (2019: £36.7m) is shown in Borrowings in Current Liabilities on the Statement of Financial Position. At 31 December 2020 the Group
had cash and cash equivalents of £489.4m (2019: £107.9m).
At 31 December 2020 the Group holds £965.0m (2019: £829.9m) of SSNs. In December 2020 the Group repaid all SSNs issued at that
date and took out new First and Second Lien SSNs of $1085.5m at 10.5% cash interest and $335m at 8.89% cash interest and 6.11% PIK
interest respectively. The Second Lien Notes were issued at a 2% discount and have share warrants attached to them (see the borrowings
section of note 23). The First Lien Notes are repayable in November 2025 and the Second Lien Notes in November 2026. Transaction costs
and discounts on issue are amortised using the effective interest rate. The US Dollar amounts have been converted to Sterling equivalents
for reporting purposes. Attached to the new SSNs is a £90.6m RCF of which £78.6m was drawn in cash at 31 December 2020. The amount
recorded in the Statement of Financial Position net of unamortised transaction costs of £2.4m is £76.2m. The remaining ancillary facility
has been utilised through the issuance of letters of credit and guarantees. The previous SSNs had an £80.0m RCF attached to them of which
£70.0m was drawn at 31 December 2019. The RCF attached to the new SSNs is available until August 2025.
As part of the normal operating cycle of the Group, customers make advanced payments to secure their allocation of special vehicles
produced in limited numbers. The cash from these advance payments is primarily used to fund upfront costs of the special vehicle project
including raw materials and components required in manufacture. In certain circumstances, according to the individual terms of the special
vehicle contract and the position of the customer in the staged deposit and vehicle specification process, the advanced payments are
contractually refundable. At 31 December 2020 the Group held refundable deposits of £43.1m (2019: £78.5m). The special vehicle
programs are typically oversubscribed and, in the event that a customer requests reimbursement of their advanced payment, the newly
created allocation is then given to an alternative customer who is required to make an equivalent advanced payment.
The maturity profile of the Group’s financial liabilities at 31 December 2020 based on contractual undiscounted payments is as follows.
On demand
£m
Less than 3
months
£m
3 to 12
months
£m
1 to 5
years
£m
Contractual Cash
>5 years
Flows Total
£m
£m
Non-derivative financial liabilities
Bank loans and overdrafts
Senior Secured Notes
Trade and other payables
Derivative financial liabilities
Forward exchange contracts
Refundable customer deposits and advances
43.1
Included in the table above table are interest bearing loans and borrowings at a carrying value of £1,084.8m. The liquidity profile
associated with leases accounted under IFRS 16 is detailed in note 16.
The table below summarises the maturity profile of the Group’s financial liabilities at 31 December 2019 based on contractual
undiscounted payments.
On demand
Less than 3
months
£m
Contractual Cash
>5 years
Flows Total
£m
£m
1,281.8
436.6
2,300.1
1,267.9
436.6
–
–
–
–
43.1
£m
–
–
–
–
78.5
15.8
245.5
–
–
–
261.3
94.6
1.8
365.0
–
0.9
462.3
101.9
109.3
65.6
–
0.5
277.3
3 to 12
months
£m
24.4
45.4
57.3
–
5.4
132.5
6.4
7.5
–
–
1 to 5
years
£m
6.7
937.1
9.6
–
2.6
956.0
–
–
–
–
–
–
–
–
–
–
124.1
1,813.8
318.6
43.1
0.5
125.7
984.3
431.9
78.5
8.9
1,629.3
Non-derivative financial liabilities
Bank loans and overdrafts
Senior Secured Notes
Trade and other payables restated
Derivative financial liabilities
Forward exchange contracts
Refundable customer deposits and advances
78.5
Included in the table above are interest bearing loans and borrowings at a carrying value of £953.9m.
23 FINANCIAL INSTRUMENTS (CONTINUED)
ESTIMATION OF FAIR VALUES
Included in assets
Level 2
Forward foreign exchange contracts
Level 3
Other derivative contracts
Included in liabilities
Level 1
£285m 5.75% Sterling Senior secured Notes
$400m 6.5% US Dollar Senior secured Notes
$190m 6.5% US Dollar Senior secured Notes
$150m 12.0% US Dollar Senior secured Notes
$1,085.5m 10.5% US Dollar 1st Lien Notes
$335m 15.0% US Dollar 2nd Lien Split
Coupon Notes
Level 2
Forward exchange contracts
Derivative option over own shares
As at 31 December 2020
As at 31 December 2019
Nominal value
£m
Book value
£m
Fair value Nominal value
£m
£m
Book value
£m
Fair value
£m
–
–
–
–
–
–
–
0.8
4.0
4.8
–
–
–
–
0.8
4.0
4.8
–
–
–
–
793.8
245.0
763.2
201.8
861.2
248.9
–
63.3
0.5
79.9
0.5
79.9
–
–
–
285.0
301.6
143.3
113.1
–
–
–
–
0.4
–
0.4
279.0
301.6
137.2
112.1
–
–
0.4
–
0.4
273.6
288.0
133.8
122.1
–
–
8.9
–
8.9
–
1,102.1
1,045.4
1,190.5
843.0
838.8
826.4
Under IFRS 7, such assets and liabilities are classified by the way in which their fair value is calculated. The interest-bearing loans and
borrowings are considered to be level 1 liabilities with forward exchange contracts being level 2 assets and liabilities. Warrant equity
options are considered to be level 2 assets and liabilities.
IFRS 7 defines each level as follows:
• level 1 assets and liabilities have inputs observable through quoted prices;
• level 2 assets and liabilities have inputs observable, other than quoted prices, either directly (i.e. as prices) or indirectly (i.e. derived from
prices); or
• level 3 assets and liabilities as those with inputs not based on observable market data.
Trade and other receivables, and trade and other payables are deemed to have the same fair value as their book value and, as such, the
table presented only includes assets held at fair value and borrowings. The forward currency contracts are carried at fair value based on
pricing models and discounted cash flow techniques derived from assumptions provided by third party banks. The SSNs are all valued at
amortised cost retranslated as the year end foreign exchange rate. The fair value of these SSNs at the current and comparative period ends
are determined by reference to the quoted price on The International Stock Exchange Authority in St. Peter Port, Guernsey. The fair value
and nominal value exclude the impact of transaction costs.
The other derivative contracts relate to options to purchase a minority shareholding in AMR GP Limited (see note 20).
The derivative option over own shares reflects the detachable warrants issued alongside the second lien SSNs (see borrowings section of
note 23) enabling the warrant holders to subscribe for a number of Ordinary Shares in the Company. The fair value is calculated using a
binomial model and updated at each period end reflecting the latest market conditions. The inputs used in the valuation model include the
quoted share price, market volatility, exercise ratio, and risk free rate.
For all other receivables and payables, the carrying amount is deemed to reflect the fair value.
CAPITAL MANAGEMENT
The Board’s policy is to maintain a strong capital base so as to maintain investor and creditor confidence and to sustain the future
development of the business. Given this, the objective of the Group’s capital management is to ensure that it maintains healthy capital
ratios in order to support its business and maximise shareholder value. The capital structure of the Group consists of debt which includes
the borrowings disclosed in this note, cash and cash equivalents and equity attributable to equity holders of the parent, comprising share
capital and reserves as disclosed in the Consolidated Statements of Changes in Equity.
132
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
133
133
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
24 NET DEBT
The Group defines Net Debt as current and non-current borrowings in addition to inventory repurchase arrangements and lease liabilities,
less cash and cash equivalents including cash held not available for short-term use. The comparative Net Debt at 31 December 2019 has
been re-presented to align with the updated definition of Net Debt to include current and non-current lease liabilities following the Group’s
adoption of IFRS 16 on 1 January 2019. There is no impact on the Group’s Consolidated Income Statement, earnings per share, retained
earnings or net assets. Net Debt is a non-IFRS alternative performance measure used for evaluating the performance of the Group and for
further details see note 34.
Cash and cash equivalents
Cash held not available for short-term use
Inventory repurchase arrangement
Lease liabilities – current
Lease liabilities – non-current
Loans and other borrowings – current
Loans and other borrowings – non-current
Net debt
Movement in net debt
Net increase/(decrease) in cash and cash equivalents
Add back cash flows in respect of other components of net debt:
New borrowings
Proceeds from inventory repurchase arrangement
Proceeds from existing borrowings
Repayment of existing borrowings
Repayment of inventory repurchase arrangement
Lease liability payments
Movement in cash held not available for short-term use
Transaction fees
Decrease/(increase) in net debt arising from cash flows
Non-cash movements:
Opening lease liability upon adoption of IFRS 16
Foreign exchange gain on secured loan
Interest added to debt
Premium on the early redemption of Senior Secured Notes
Borrowing fee amortisation
Lease liability interest charge
Lease modifications
New leases
Unpaid transaction fees
Foreign exchange gain and other movements
Decrease/(increase) in net debt
Net debt at beginning of the year
Net debt at the end of the year
2020
£m
489.4
9.9
(38.2)
(9.3)
(93.7)
(113.5)
(971.3)
(726.7)
2019
£m
107.9
8.7
(38.9)
(14.1)
(97.3)
(114.8)
(839.1)
(987.6)
381.5
(36.7)
(1,252.7)
(76.8)
–
1,092.3
80.0
12.2
0.9
41.9
(260.8)
(38.7)
(102.3)
91.5
–
10.9
8.7
4.1
279.3
(323.3)
–
30.8
(8.6)
(21.4)
(13.0)
(4.1)
(1.7)
2.6
0.8
(3.8)
260.9
(987.6)
(726.7)
(116.5)
23.7
(1.6)
–
(5.5)
(4.6)
3.5
(9.8)
2.0
4.0
(428.1)
(559.5)
(987.6)
134
134
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
Cash and cash equivalents
Cash held not available for short-term use
Inventory repurchase arrangement
Lease liabilities – current
Lease liabilities – non-current
Loans and other borrowings – current
Loans and other borrowings – non-current
Net debt
Movement in net debt
Net increase/(decrease) in cash and cash equivalents
Add back cash flows in respect of other components of net debt:
New borrowings
Proceeds from inventory repurchase arrangement
Proceeds from existing borrowings
Repayment of existing borrowings
Repayment of inventory repurchase arrangement
Lease liability payments
Movement in cash held not available for short-term use
Transaction fees
Non-cash movements:
Opening lease liability upon adoption of IFRS 16
Foreign exchange gain on secured loan
Interest added to debt
Premium on the early redemption of Senior Secured Notes
Borrowing fee amortisation
Lease liability interest charge
Lease modifications
New leases
Unpaid transaction fees
Foreign exchange gain and other movements
Decrease/(increase) in net debt
Net debt at beginning of the year
Net debt at the end of the year
2020
£m
489.4
9.9
(38.2)
(9.3)
(93.7)
(113.5)
(971.3)
(726.7)
(1,252.7)
(76.8)
–
1,092.3
80.0
12.2
0.9
41.9
–
30.8
(8.6)
(21.4)
(13.0)
(4.1)
(1.7)
2.6
0.8
(3.8)
260.9
(987.6)
(726.7)
2019
£m
107.9
8.7
(38.9)
(14.1)
(97.3)
(114.8)
(839.1)
(987.6)
(260.8)
(38.7)
(102.3)
91.5
–
10.9
8.7
4.1
(116.5)
23.7
(1.6)
–
(5.5)
(4.6)
3.5
(9.8)
2.0
4.0
(428.1)
(559.5)
(987.6)
Decrease/(increase) in net debt arising from cash flows
279.3
(323.3)
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
24 NET DEBT
25 PROVISIONS
The Group defines Net Debt as current and non-current borrowings in addition to inventory repurchase arrangements and lease liabilities,
less cash and cash equivalents including cash held not available for short-term use. The comparative Net Debt at 31 December 2019 has
been re-presented to align with the updated definition of Net Debt to include current and non-current lease liabilities following the Group’s
adoption of IFRS 16 on 1 January 2019. There is no impact on the Group’s Consolidated Income Statement, earnings per share, retained
earnings or net assets. Net Debt is a non-IFRS alternative performance measure used for evaluating the performance of the Group and for
further details see note 34.
At the beginning of the year
Charge for the year
Utilisation
Effect of movements in exchange rates
At the end of the year
Analysed as:
Current
Non-current
Restructuring
Warranty
–
12.1
(4.3)
–
7.8
7.8
–
7.8
28.2
33.0
(29.8)
(0.3)
31.1
14.3
16.8
31.1
2020
£m
Total
28.2
45.1
(34.1)
(0.3)
38.9
22.1
16.8
38.9
2019
£m
Total
23.7
27.9
(23.5)
0.1
28.2
12.0
16.2
28.2
381.5
(36.7)
The warranty provision is calculated based on the level of historic claims and is expected to be substantially utilised within the next three
years. The 2019 comparative relates entirely to warranty provisions.
In the year ended 31 December 2020, the Group launched a consultation process to reduce employee numbers reflecting lower than
originally planned production volumes. The charge recognised reflects total estimated staff restructuring costs of £12.0m in addition to
other directly attributable costs of £0.1m. The closing provision at 31 December 2020 is expected to be utilised during the first half of 2021.
26 PENSION OBLIGATIONS
DEFINED CONTRIBUTION SCHEME
The Group opened a defined contribution scheme in June 2011. The total expense relating to this scheme in the year ended 31 December
2020 was £10.2m (2019: £8.6m). Outstanding contributions at the year-end were £0.9m (2019: £0.6m). Contributions are made by the
Group to other pension arrangements for certain employees of the Group.
DEFINED BENEFIT SCHEME
The Group operates a defined benefit pension scheme. During 2017 it was agreed and communicated to its members that the scheme’s
benefits would be amended from a final pensionable salary basis to a career average revalued earnings (CARE) basis with effect from
1 January 2018. The scheme was closed to new entrants on 31 May 2011. The benefits of the existing members were not affected by the
closure of the scheme. The assets of the scheme are held separately from those of the Group.
In constructing the investment strategy for the scheme, the Trustees take due account of the liability profile of the scheme along with the
level of disclosed surplus or deficit. The investment strategy is reviewed on a regular basis and, at a minimum, on a triennial basis to
coincide with actuarial valuations. The primary objectives are to provide security for all beneficiaries and to achieve long-term growth
sufficient to finance any pension increases and ensure the residual cost is held at a reasonable level.
The pension scheme operates under the regulatory framework of the Pensions Act 2004. The Trustee has the primary responsibility for
governance of the Scheme. Benefit payments are from Trustee-administered funds and scheme assets are held in a Trust which is governed
by UK regulation. The Trustee is comprised of representatives of the Group and members of the scheme and an independent, professional
Trustee has been appointed during the year.
The pension scheme exposes the Group to the following risks:
Asset volatility – the scheme’s Statement of Investment Principles targets 60% return-enhancing assets and 40% risk-reducing assets.
The Trustee monitors the appropriateness of the scheme’s investment strategy, in consultation with the Group, on an on-going basis.
Inflation risk – the majority of benefits are linked to inflation and so increases in inflation will lead to higher liabilities (although in most
cases there are caps in place which protect against extreme inflation).
Longevity – increases in life expectancy will increase the period over which benefits are expected to be payable, which increases the
value placed on the scheme’s liabilities.
There have been no curtailment events in the years ended 31 December 2020 or 31 December 2019. The projected unit method has been
used to determine the liabilities.
The pension cost is assessed in accordance with the advice of an independent qualified actuary. The latest actuarial valuation of the
scheme had an effective date of 6 April 2020. The assumptions that make the most significant effect on the valuation are those relating
to the rate of return on investments, the rate of increase in salaries and pensions and expected longevity. It was assumed that the
pre-retirement investment return would be 3.4% per annum and the post retirement return 2.25% per annum and that salary increases
would average 3.0% per annum for the period to 31 March 2021 and 3.55% thereafter.
At the 6 April 2020 actuarial valuation, the actuarial value of the scheme assets was £314.6m, sufficient to cover 76% of the benefits which
had accrued to members. Following this latest actuarial valuation of the scheme, from 1 January 2022 onwards contributions will increase
from 23.7% to 37.5% for the Group where the active member does not participate in the salary sacrifice scheme. For active members
participating in the salary sacrifice scheme, employees make no contributions and from 1 January 2022 the Group contribution is increasing from
30.2% and 34.7% to 44.0% and 48.5% for members who opted for benefits of 1/80th’s and 1/70th’s of pensionable salary, respectively.
134
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135
135
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
26 PENSION OBLIGATIONS (CONTINUED)
The actuarial valuation on 6 April 2017 showed a deficit in the scheme of £48.6m. On 5 July 2018, the Group agreed to increase the
recovery plan contributions from £2.8m per annum to £4.0m per annum through to 31 March 2020 and £7.1m thereafter through to 31 July
2025. The actuarial valuation on 6 April 2020 showed a deficit in the scheme of £97.0m. On 18 December 2020, the Group agreed to
increase the recovery plan contributions from £7.1m per annum to £15.0m per annum effective from 1 January 2021 through to 30 June
2027. Estimated contributions for the year ending 31 December 2021 are £20.6m.
Full actuarial valuations were carried out as at 6 April 2017 and 6 April 2020. The 2017 valuation was updated by an independent
qualified actuary to 31 December 2019 and the 2020 valuation similarly updated to 31 December 2020 for the relevant disclosures in
accordance with IAS 19R. The next triennial valuation as at 6 April 2023 is due to be completed by June 2024 in line with the scheme
specific funding requirements of the Pensions Act 2004. As part of that valuation the Trustee and the Group will review the adequacy of the
contributions being paid into the Scheme.
ASSUMPTIONS
The principal assumptions used by the actuary were:
Discount rate
Rate of increase in salaries
Rate of revaluation in deferment
Rate of increase in pensions in payment attracting LPI
Expected return on scheme assets
RPI Inflation assumption
CPI Inflation assumption
31 December
2020
31 December
2019
1.60%
2.70%
2.10%
2.70%
1.60%
2.70%
2.10%
2.20%
2.90%
1.90%
2.85%
2.20%
2.90%
1.90%
The Group’s inflation assumption reflects its long-term expectations and has not been amended for short-term variability. The post mortality
assumptions allow for expected increases in longevity. The ‘current’ disclosures below relate to assumptions based on the longevity (in
years) following retirement at each reporting date, with ‘future’ being that relating to an employee retiring in 2040 (2020 assumptions) or
2039 (2019 assumptions).
Projected life expectancy from age 65
Male
Female
Average duration of the liabilities in years as at 31 December 2020
Average duration of the liabilities in years as at 31 December 2019
Current
Currently
aged 65
2020
21.8
24.2
Future
Currently
aged 45
2019
23.2
25.5
Current
Currently
aged 65
2019
21.8
23.9
Future
Currently
aged 45
2020
23.2
25.7
Years
25
25
The following table provides information on the composition and fair value of the assets of the Scheme:
Asset Class
UK Equities
Overseas Equities
Property
Private debt
Liability driven investment
Absolute return bonds
Diversified alternatives
Cash
Insurance policies
Total
31 December
2020
Quoted
£m
31 December
2020
Unquoted
£m
31 December
2020
Total
£m
31 December
2019
Quoted
£m
31 December
2019
Unquoted
£m
31 December
2019
Total
£m
36.8
46.0
–
–
74.3
–
–
52.8
–
209.9
–
–
–
30.8
34.2
71.4
1.6
–
6.2
144.2
36.8
46.0
–
30.8
108.5
71.4
1.6
52.8
6.2
354.1
43.4
48.6
–
–
42.8
–
–
2.5
–
–
–
28.5
20.4
19.3
73.9
27.0
–
5.4
43.4
48.6
28.5
20.4
62.1
73.9
27.0
2.5
5.4
137.3
174.5
311.8
136
136
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
26 PENSION OBLIGATIONS (CONTINUED)
26 PENSION OBLIGATIONS (CONTINUED)
The actuarial valuation on 6 April 2017 showed a deficit in the scheme of £48.6m. On 5 July 2018, the Group agreed to increase the
The scheme assets and funded obligations at 31 December are summarised below:
recovery plan contributions from £2.8m per annum to £4.0m per annum through to 31 March 2020 and £7.1m thereafter through to 31 July
2025. The actuarial valuation on 6 April 2020 showed a deficit in the scheme of £97.0m. On 18 December 2020, the Group agreed to
increase the recovery plan contributions from £7.1m per annum to £15.0m per annum effective from 1 January 2021 through to 30 June
2027. Estimated contributions for the year ending 31 December 2021 are £20.6m.
Full actuarial valuations were carried out as at 6 April 2017 and 6 April 2020. The 2017 valuation was updated by an independent
qualified actuary to 31 December 2019 and the 2020 valuation similarly updated to 31 December 2020 for the relevant disclosures in
accordance with IAS 19R. The next triennial valuation as at 6 April 2023 is due to be completed by June 2024 in line with the scheme
Total fair value of scheme assets
Present value of funded obligations
Funded status at the end of the year
Adjustment to reflect minimum funding requirements
specific funding requirements of the Pensions Act 2004. As part of that valuation the Trustee and the Group will review the adequacy of the
Liability recognised in the Statement of Financial Position
2020
£m
354.1
(378.7)
(24.6)
(67.9)
(92.5)
2019
£m
311.8
(333.4)
(21.6)
(15.2)
(36.8)
contributions being paid into the Scheme.
ASSUMPTIONS
The principal assumptions used by the actuary were:
Discount rate
Rate of increase in salaries
Rate of revaluation in deferment
Expected return on scheme assets
RPI Inflation assumption
CPI Inflation assumption
Rate of increase in pensions in payment attracting LPI
31 December
31 December
2020
1.60%
2.70%
2.10%
2.70%
1.60%
2.70%
2.10%
2019
2.20%
2.90%
1.90%
2.85%
2.20%
2.90%
1.90%
The Group’s inflation assumption reflects its long-term expectations and has not been amended for short-term variability. The post mortality
assumptions allow for expected increases in longevity. The ‘current’ disclosures below relate to assumptions based on the longevity (in
years) following retirement at each reporting date, with ‘future’ being that relating to an employee retiring in 2040 (2020 assumptions) or
2039 (2019 assumptions).
Projected life expectancy from age 65
Average duration of the liabilities in years as at 31 December 2020
Average duration of the liabilities in years as at 31 December 2019
The following table provides information on the composition and fair value of the assets of the Scheme:
31 December
31 December
31 December
31 December
31 December
31 December
2020
Quoted
£m
2020
Unquoted
£m
2019
Quoted
£m
2019
Unquoted
£m
Future
Currently
aged 45
2020
23.2
25.7
Years
25
25
2020
Total
£m
36.8
46.0
–
30.8
108.5
71.4
1.6
52.8
6.2
354.1
Current
Currently
aged 65
2020
21.8
24.2
Future
Currently
aged 45
2019
23.2
25.5
Current
Currently
aged 65
2019
21.8
23.9
2019
Total
£m
43.4
48.6
28.5
20.4
62.1
73.9
27.0
2.5
5.4
43.4
48.6
42.8
–
–
–
–
–
2.5
–
–
28.5
20.4
19.3
73.9
27.0
–
5.4
36.8
46.0
74.3
–
–
–
–
–
52.8
–
–
–
30.8
34.2
71.4
1.6
–
6.2
209.9
144.2
137.3
174.5
311.8
Male
Female
Asset Class
UK Equities
Overseas Equities
Property
Private debt
Liability driven investment
Absolute return bonds
Diversified alternatives
Insurance policies
Cash
Total
The adjustment to reflect minimum funding requirements represents the excess of the present value of contractual future recovery plan
contributions, discounted using the assumed scheme discount rate, over the funding status established through the actuarial valuation.
Amounts recognised in the Consolidated Income Statement during the year ending 31 December were as follows:
Amounts charged to operating loss:
Current service cost
Past service cost
Amounts charged to finance expense:
Net interest expense on the net defined benefit liability
Interest expense on the adjustment to reflect minimum funding requirements
Total expense recognised in the Income Statement
Changes in present value of the defined benefit pensions obligations are analysed as follows:
At the beginning of the year
Current service cost
Past service cost
Interest cost
Experience gains/(losses)
Actuarial losses arising from changes in financial assumptions
Distributions
Actuarial gains/(losses) arising from changes in demographic assumptions
2020
£m
(8.6)
–
(8.6)
(0.3)
(0.4)
(9.3)
2020
£m
2019
£m
(6.9)
–
(6.9)
–
(1.1)
(8.0)
2019
£m
(333.4)
(275.2)
(8.6)
–
(7.2)
9.0
(54.7)
15.6
0.6
(6.9)
–
(8.5)
(0.1)
(52.3)
9.9
(0.3)
Obligation at the end of the year
(378.7)
(333.4)
Changes in the fair value of plan assets are analysed below:
At the beginning of the year
Interest on assets
Employer contributions
Return on scheme assets excluding interest income
Distributions
Fair value at the end of the year
Actual return on scheme assets
Analysis of amounts recognised in the Statement of Financial Position:
Liability at the beginning of the year
Net expense recognised in the Income Statement
Employer contributions
Loss recognised in Other Comprehensive Income
Liability recognised in the Statement of Financial Position at the end of the year
2020
£m
311.8
6.9
12.7
38.3
(15.6)
354.1
2020
£m
45.2
2020
£m
(36.8)
(9.3)
12.7
(59.1)
(92.5)
2019
£m
268.8
8.5
11.3
33.1
(9.9)
311.8
2019
£m
41.6
2019
£m
(38.7)
(8.0)
11.3
(1.4)
(36.8)
136
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
137
137
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
26 PENSION OBLIGATIONS (CONTINUED)
Analysis of amount taken to Other Comprehensive Income:
Return on scheme assets excluding interest income
Experience gains/(losses) arising on funded obligations
Losses arising due to changes in financial assumptions underlying the present value of funded obligations
(Losses)/gains arising as a result of adjustment made to reflect minimum funding requirements
Gains/(losses) arising due to changes in demographic assumptions
Amount recognised in Other Comprehensive Income
2020
£m
38.3
9.0
(54.7)
(52.3)
0.6
(59.1)
2019
£m
33.1
(0.1)
(52.3)
18.2
(0.3)
(1.4)
SENSITIVITY ANALYSIS OF THE PRINCIPAL ASSUMPTIONS USED TO MEASURE SCHEME LIABILITIES
At 31 December 2020 the present value of the benefit obligation is £378.7m (2019: £333.4m) and its sensitivity to changes in key
assumptions are:
Discount rate
Rate of inflation*
Life expectancy increased by approximately 1 year
Present value
of benefit
obligations at
31 December
2020
£m
Present value
of benefit
obligations at
31 December
2019
£m
403.6
399.8
395.7
355.1
352.2
348.1
Change in
assumption
Decrease by 0.25%
Increase by 0.25%
Increase by one year
* This sensitivity allows for the impact on all inflation related assumptions (salary increases, deferred revaluation and pension increases).
Funding levels are monitored on a regular basis by the Trustee and the Group to ensure the security of member’s benefits. The next triennial
valuation as at 6 April 2023 is due to be completed by June 2024 in line with the scheme specific funding requirements of the Pensions Act
2004. As part of that valuation the Trustee and the Group will review the adequacy of the contributions being paid into the Scheme.
Expected future benefit payments
Year 1 (2021 / 2020)
Year 2 (2022 / 2021)
Year 3 (2023 / 2022)
Year 4 (2024 / 2023)
Year 5 (2025 / 2024)
Years 6 to 10 (2026 to 2030)
HISTORY OF SCHEME EXPERIENCE
Present value of the scheme liabilities (£m)
Fair value of the scheme assets (£m)
Deficit in the scheme before to adjusting to reflect minimum funding requirements
Experience gains on scheme assets excluding interest income(£m)
Percentage of scheme assets
Experience gains/(losses) on scheme liabilities (£m)
Percentage of the present value of the scheme liabilities
Total amount recognised in Other Comprehensive Income (£m)
Percentage of the present value of the scheme liabilities
2020
£m
9.7
10.0
10.2
10.5
10.8
57.8
2020
(378.7)
354.1
(24.6)
38.3
10.8%
9.0
2.4%
(59.1)
(15.6%)
2019
£m
2.6
3.0
3.6
4.6
4.9
38.8
2019
(333.4)
311.8
(21.6)
33.1
10.6%
(0.1)
0.0%
(1.4)
(0.4%)
138
138
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
26 PENSION OBLIGATIONS (CONTINUED)
Analysis of amount taken to Other Comprehensive Income:
Return on scheme assets excluding interest income
Experience gains/(losses) arising on funded obligations
Losses arising due to changes in financial assumptions underlying the present value of funded obligations
(Losses)/gains arising as a result of adjustment made to reflect minimum funding requirements
Gains/(losses) arising due to changes in demographic assumptions
Amount recognised in Other Comprehensive Income
SENSITIVITY ANALYSIS OF THE PRINCIPAL ASSUMPTIONS USED TO MEASURE SCHEME LIABILITIES
At 31 December 2020 the present value of the benefit obligation is £378.7m (2019: £333.4m) and its sensitivity to changes in key
assumptions are:
Present value
Present value
of benefit
obligations at
31 December
of benefit
obligations at
31 December
Change in
assumption
Decrease by 0.25%
Increase by 0.25%
Increase by one year
2020
£m
403.6
399.8
395.7
Discount rate
Rate of inflation*
Life expectancy increased by approximately 1 year
* This sensitivity allows for the impact on all inflation related assumptions (salary increases, deferred revaluation and pension increases).
Funding levels are monitored on a regular basis by the Trustee and the Group to ensure the security of member’s benefits. The next triennial
valuation as at 6 April 2023 is due to be completed by June 2024 in line with the scheme specific funding requirements of the Pensions Act
2004. As part of that valuation the Trustee and the Group will review the adequacy of the contributions being paid into the Scheme.
Expected future benefit payments
Year 1 (2021 / 2020)
Year 2 (2022 / 2021)
Year 3 (2023 / 2022)
Year 4 (2024 / 2023)
Year 5 (2025 / 2024)
Years 6 to 10 (2026 to 2030)
HISTORY OF SCHEME EXPERIENCE
Present value of the scheme liabilities (£m)
Fair value of the scheme assets (£m)
Deficit in the scheme before to adjusting to reflect minimum funding requirements
Experience gains on scheme assets excluding interest income(£m)
Percentage of scheme assets
Experience gains/(losses) on scheme liabilities (£m)
Percentage of the present value of the scheme liabilities
Total amount recognised in Other Comprehensive Income (£m)
Percentage of the present value of the scheme liabilities
2020
£m
38.3
9.0
(54.7)
(52.3)
0.6
(59.1)
2020
£m
9.7
10.0
10.2
10.5
10.8
57.8
2020
(378.7)
354.1
(24.6)
38.3
10.8%
9.0
2.4%
(59.1)
(15.6%)
2019
£m
33.1
(0.1)
(52.3)
18.2
(0.3)
(1.4)
2019
£m
355.1
352.2
348.1
2019
£m
2.6
3.0
3.6
4.6
4.9
38.8
2019
(333.4)
311.8
(21.6)
33.1
10.6%
(0.1)
0.0%
(1.4)
(0.4%)
27 SHARE CAPITAL AND OTHER RESERVES
Allotted, called up and fully paid
Number of
shares
Nominal
Value
£
Share
Capital
£m
Share
Premium
£m
Merger
Reserve
£m
Capital
Redemption
Reserve
£m
Opening balance at 1 January 2020
Private placing1
Rights issue2
Non-pre-emptive placing and retail offer3
Placing Shares4
Tranche 1 Consideration Shares5
Issue of new shares6
Transaction costs arising on the issuance of ordinary shares
228,002,890
0.009039687
76,000,000
0.009039687
1,216,011,560
0.009039687
304,000,000
0.009039687
250,000,000
0.009039687
224,657,287
0.009039687
3
–
0.009039687
–
2.1
0.7
11.0
2.7
2.3
2.0
–
–
352.3
170.3
353.7
–
–
–
–
149.4
122.7
140.3
–
–
–
–
(31.1)
(5.4)
2,298,671,740
0.009039687
20.8
1,108.2
144.0
Share split – original shares7
Share split – deferred shares7
Cancellation of deferred shares7
2,298,671,740
0.005000000
2,298,671,740
0.004039687
(2,298,671,740)
(0.004039687)
11.5
9.3
(9.3)
–
–
–
–
–
–
2,298,671,740
0.00500000
11.5
1,108.2
144.0
Consolidation of shares7
(2,183,738,153)
–
–
–
–
Closing balance at 31 December 2020
114,933,587
0.10000000
11.5
1,108.2
144.0
–
–
–
–
–
–
–
–
–
–
–
9.3
9.3
–
9.3
1. On 31 March 2020 the Company issued 76.0m ordinary shares by way of a private placing. The shares were issued at 225p raising gross proceeds of
£171.0m, with £0.7m recognised as share capital and the remaining £170.3m recognised as share premium.
2. On 1 April 2020 the Company issued 1,216.0m ordinary shares by way of a rights issue. The shares were issued at 30p raising gross proceeds of £364.7m,
with £11.0m recognised as share capital and the remaining £353.7m recognised as share premium. Due to the shares being issued at substantially below
market price, a bonus issue is deemed to have taken place. A total of 642.4m shares issued were considered bonus shares. The weighted average shares used
to calculate Earnings Per Share (see note 12) has been adjusted accordingly.
3. On 26 June 2020 the Company issued 304.0m ordinary shares through a non-pre-emptive placing and retail offer. The shares were issued at 50p raising
gross proceeds of £152.1m, with £2.7m recognised as share capital and the remaining £149.4m recognised as merger reserve. The merger reserve is used
where more than 90% of the shares in a subsidiary are acquired and the consideration includes the issue of new shares by the Company, thereby attracting
merger relief under the Companies Act 2006.
4. On 7 December 2020 the Company issued 250.0m ordinary shares by way of a placing. The shares were issued at 50p raising gross proceeds of £125.0m,
with £2.3m recognised as share capital and the remaining £122.7m recognised as share premium.
5. On 7 December 2020 the Company issued 224.7m ordinary shares by way of Tranche 1 Consideration shares. The shares were issued at 63.34p in reflection
of the fair value of access to technology assets acquired (see note 14), with £2.0m recognised as share capital and the remaining £140.3m recognised as
share premium.
6. On 14 December 2020 the Company issued 3 ordinary shares. The shares were issued at 81.65p raising gross proceeds of £2.45. The shares were issued to
facilitate the share consolidation in sub-note 7 below.
7. On 14 December 2020 the Company underwent a capital reorganisation. Each ordinary 0.9p share was split into one ordinary 0.5p share and one deferred
0.4p share. The deferred shares were repurchased by the Company for consideration of £1. The deferred shares were subsequently cancelled by the
Company resulting in a movement from share capital into the Capital Redemption Reserve of £9.3m. Each holder of ordinary shares was entitled to 1 new
ordinary share of 10p in respect of 20 ordinary 0.5p shares held.
138
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
139
139
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
28 ADDITIONAL CASH FLOW INFORMATION
RECONCILIATION OF MOVEMENTS OF SELECT LIABILITIES TO CASH FLOWS ARISING FROM FINANCING ACTIVITIES
The tables below reconcile movements of certain liabilities to cash flows arising from financing activities for the years ending 31 December.
Liabilities
At 1 January 2020
Changes from financing cash flows
Borrowings
and inventory
arrangements
£m
Lease
Liability
£m
$150m
12.0%
SSN
£m
$190m
6.5%
SSN
£m
£285m
5.75%
SSN
£m
$400m
6.5%
SSN
£m
162.7
111.4
112.0
137.2
279.0
301.7
$68m
DDN
£m
–
Interest paid
(9.1)
(4.1)
(11.4)
(11.1)
(18.8)
(23.3)
(4.5)
Principal lease payment
–
(12.2)
–
–
–
–
–
Repayment of existing borrowings
Inventory repurchase repayment
Inventory repurchase drawdown
New borrowings
Transaction costs paid
Total changes from financing
cash flows
Effect of changes in exchange rates
New leases under IFRS 16
Modifications to existing leases
Unpaid transaction costs
Interest expense
Movement in accrued interest
(124.8)
(144.6)
(289.1)
(304.5)
(53.9)
(175.4)
(80.0)
76.8
173.6
(2.7)
–
–
–
–
–
–
–
–
–
–
–
(1.2)
(0.8)
–
–
–
–
–
–
–
–
(16.8)
(16.3)
(137.4)
(156.5)
(307.9)
(327.8)
–
–
–
–
12.2
(0.1)
(0.5)
(0.5)
(0.3)
2.6
1.7
–
4.1
–
–
–
–
23.4
2.5
–
–
–
–
17.6
2.0
–
–
–
–
–
25.5
3.4
–
(0.9)
–
–
–
24.0
3.0
–
Balance at 31 December 2020
158.0
103.0
$1,085.5m
10.5%
1st Lien
Notes
£m
$335m
15%
2nd Lien
Notes
£m
TOTAL
£m
–
–
–
–
–
–
– 1,104.0
–
–
(82.3)
(12.2)
– (1,092.3)
–
–
(80.0)
76.8
812.9
211.3 1,252.7
(30.7)
(5.8)
(41.9)
782.2
205.5
20.8
(19.1)
(5.8)
(31.3)
–
–
–
–
2.6
1.7
(0.5)
(0.3)
(0.8)
–
–
54.9
(0.7)
(4.2)
(4.2)
–
–
–
8.4
11.1
5.2
131.5
–
–
(10.5)
(2.8)
(2.5)
763.2
201.8 1,226.0
Borrowings
and inventory
arrangements
£m
Lease
liability
£m
Unsecured
Loans
£m
$150m
12.0% SSN
£m
$190m
6.5% SSN
£m
£285m
5.75% SSN
£m
$400m
6.5% SSN
£m
111.8
116.5
1.4
Liabilities
At 1 January 2019
Changes from financing cash flows
Interest paid
Principal lease payment
Repayment of existing borrowings
Proceeds from existing borrowings
Inventory repurchase arrangement
New borrowings
Transaction costs paid
Total changes from financing cash flows
Effect of changes in exchange rates
New leases under IFRS 16
Modifications to existing leases
Unpaid transaction costs
Interest expense
(3.7)
–
(90.0)
102.3
38.7
–
(0.7)
46.6
–
–
–
–
4.3
(4.6)
(10.9)
–
–
–
–
–
(15.5)
(0.5)
9.8
(3.5)
–
4.6
–
–
–
–
–
–
122.2
(2.8)
119.4
(9.1)
–
–
(1.2)
2.9
–
276.5
314.4
(5.3)
(16.4)
(21.5)
–
–
–
–
138.6
(0.6)
132.7
(2.0)
–
–
(0.8)
7.3
–
–
–
–
–
–
(16.4)
–
–
–
–
–
–
–
–
–
–
(21.5)
(12.6)
–
–
–
18.9
279.0
21.4
301.7
(0.5)
–
(1.5)
–
–
–
–
(2.0)
0.1
–
–
–
0.5
–
TOTAL
£m
820.6
(52.0)
(10.9)
(91.5)
102.3
38.7
260.8
(4.1)
243.3
(24.1)
9.8
(3.5)
(2.0)
59.9
1,104.0
Balance at 31 December 2019
162.7
111.4
112.0
137.2
140
140
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
Borrowings
and inventory
Lease
$150m
12.0%
$190m
6.5%
£285m
5.75%
$400m
6.5%
arrangements
Liability
£m
£m
SSN
£m
SSN
£m
SSN
£m
SSN
£m
$68m
DDN
£m
162.7
111.4
112.0
137.2
279.0
301.7
$1,085.5m
$335m
15%
2nd Lien
Notes
£m
10.5%
1st Lien
Notes
£m
–
TOTAL
£m
– 1,104.0
Interest paid
(9.1)
(4.1)
(11.4)
(11.1)
(18.8)
(23.3)
(4.5)
Principal lease payment
–
(12.2)
(124.8)
(144.6)
(289.1)
(304.5)
(53.9)
– (1,092.3)
Liabilities
At 1 January 2020
Changes from financing cash flows
Repayment of existing borrowings
Inventory repurchase repayment
Inventory repurchase drawdown
New borrowings
Transaction costs paid
Total changes from financing
cash flows
New leases under IFRS 16
Modifications to existing leases
Unpaid transaction costs
Interest expense
Movement in accrued interest
(175.4)
(80.0)
76.8
173.6
(2.7)
–
–
–
–
12.2
(0.1)
–
–
–
–
–
2.6
1.7
4.1
–
–
(1.2)
(0.8)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Balance at 31 December 2020
158.0
103.0
23.4
2.5
17.6
2.0
25.5
3.4
24.0
3.0
Effect of changes in exchange rates
(0.5)
(0.5)
(0.3)
(0.9)
(16.8)
(16.3)
(137.4)
(156.5)
(307.9)
(327.8)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(82.3)
(12.2)
(80.0)
76.8
2.6
1.7
54.9
(0.7)
(4.2)
(4.2)
812.9
211.3 1,252.7
(30.7)
(5.8)
(41.9)
782.2
205.5
20.8
(19.1)
(5.8)
(31.3)
(0.5)
(0.3)
(0.8)
8.4
11.1
5.2
131.5
(10.5)
(2.8)
(2.5)
763.2
201.8 1,226.0
–
–
–
–
–
–
–
–
–
Liabilities
At 1 January 2019
Changes from financing cash flows
Interest paid
Principal lease payment
Repayment of existing borrowings
Proceeds from existing borrowings
Inventory repurchase arrangement
New borrowings
Transaction costs paid
Total changes from financing cash flows
Effect of changes in exchange rates
New leases under IFRS 16
Modifications to existing leases
Unpaid transaction costs
Interest expense
(3.7)
–
(90.0)
102.3
38.7
(0.7)
46.6
–
–
–
–
–
(4.6)
(10.9)
–
–
–
–
–
(15.5)
(0.5)
9.8
(3.5)
–
4.6
Lease
Unsecured
Borrowings
and inventory
arrangements
liability
£m
£m
111.8
116.5
$150m
12.0% SSN
£m
$190m
£285m
$400m
6.5% SSN
5.75% SSN
6.5% SSN
£m
–
£m
£m
276.5
314.4
(5.3)
(16.4)
(21.5)
Loans
£m
1.4
(0.5)
(1.5)
(2.0)
0.1
–
–
–
–
–
–
–
–
–
122.2
(2.8)
119.4
(9.1)
138.6
(0.6)
132.7
(2.0)
(16.4)
(21.5)
(12.6)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
TOTAL
£m
820.6
(52.0)
(10.9)
(91.5)
102.3
38.7
260.8
(4.1)
243.3
(24.1)
9.8
(3.5)
(2.0)
59.9
–
–
–
–
–
–
–
–
–
Balance at 31 December 2019
162.7
111.4
112.0
137.2
4.3
0.5
(1.2)
2.9
(0.8)
7.3
18.9
279.0
21.4
301.7
1,104.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
28 ADDITIONAL CASH FLOW INFORMATION
29 SHARE BASED PAYMENTS
RECONCILIATION OF MOVEMENTS OF SELECT LIABILITIES TO CASH FLOWS ARISING FROM FINANCING ACTIVITIES
The tables below reconcile movements of certain liabilities to cash flows arising from financing activities for the years ending 31 December.
LONG-TERM INCENTIVE SCHEMES
On 14 December 2020 2020 Executive Directors and certain other employees were granted conditional share awards under the Company’s
Long-Term Incentive Plan (“2020 LTIP”). In respect of this arrangement total charges to the Consolidated Income Statement were £0.2m.
Aggregate fair value at measurement date (£m)
Exercise price (p)
Expected volatility (%)
Dividend yield (%)
Risk free interest rate (%)
2020 grant
of 2020 LTIP
9.7
Nil
50.0%
n/a
(0.13%)
The expected volatility is wholly based on the historical volatility of the Company’s share price over a period from listing in 2018 to date.
On 27 June 2019 Executive Directors and certain other employees were granted conditional share awards under the Company’s Long-Term
Incentive Plan (“2019 LTIP”). On 26 October 2020 this LTIP was cancelled. In respect of this arrangement total charges to the Consolidated
Income Statement were £0.2m (2019: £0.1m). The Directors consider this not material and hence further detailed disclosures have been
omitted.
LEGACY EXECUTIVE LONG-TERM INCENTIVE SCHEME
The fair value of options granted is based on a Monte Carlo Simulation due to the vesting being based on market conditions. Enterprise
values have been used as the basis for determining the fair value of the Legacy LTIP awards.
Aggregate fair value at measurement date (£m)
Exercise price (p)
Expected volatility (%)
Dividend yield (%)
Risk free interest rate (%)
2018 grant
of 2014 Legacy
LTIP
2018 grant
of 2017 Legacy
LTIP
2018 grant
of 2018 Legacy
LTIP
4.8
–
30
0
1.70
25.5
–
22
0
0.14
1.2
–
23
0
0.65
The expected volatility is wholly based on the historical volatility of listed automotive peers over a period commensurate with the terms of
each award.
The total expense recognised for LTIP schemes and the Legacy LTIP in the period arising from equity-settled share-based payments is as follows:
LTIP share option charge
Legacy LTIP share option charge (note 6)
2020
£m
0.4
3.8
4.2
2019
£m
0.1
3.6
3.7
30 CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
Capital expenditure contracts to the value of £3.1m (2019: £74.4m) have been committed but not provided for as at 31 December 2020.
In the normal course of the Group’s business, claims, disputes, and legal proceedings involving customers, dealers, suppliers, employees or
others are pending or may be brought against Group entities arising out of current or past operations. The Group believes the impact of
these claims and proceedings will be immaterial.
31 RELATED PARTY TRANSACTIONS
Transactions between Group undertakings, which are related parties, have been eliminated on consolidation and accordingly are not
disclosed. The Group has entered into transactions, in the ordinary course of business, with entities with significant influence over the
Group. Transactions entered into, and trading balances outstanding at each year end with entities with significant influence over the Group
are as follows:
Related party – Group
Sales to
related
party
£m
Purchases
from related
party
£m
Amounts
owed by
related party
£m
Amounts owed
to related
party
£m
Entities with significant influence over the Group
31 December 2020
Entities with significant influence over the Group
31 December 2019
1.4
1.1
2.7
4.0
–
0.2
1.3
0.6
TRANSACTIONS WITH DIRECTORS
During the year ended 31 December 2020, an agreement was signed with a former director of the Group for the sale of a vehicle at an
expected discount of £0.3m. In addition to this, a former Director of the Group purchased a vehicle at a discount of less than £0.1m in line
with the employee purchases policy then in effect.
In the year ended 31 December 2019 no cars were sold to any Directors.
140
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141
141
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
31 RELATED PARTY TRANSACTIONS (CONTINUED)
TERMS AND CONDITIONS OF TRANSACTIONS WITH RELATED PARTIES
Sales and purchases between related parties are made at normal market prices. Outstanding balances with entities other than subsidiaries
are unsecured, interest free and cash settlement is expected within 60 days of invoice. Terms and conditions for transactions with
subsidiaries are the same, with the exception that balances are placed on intercompany accounts. The Group has not provided or benefited
from any guarantees for any related party receivables or payables.
32 POST BALANCE SHEET EVENTS
On 24 February 2021, £4.7m of cash not available for short term use (see note 20) was released following conclusion of arbitration.
33 GROUP COMPANIES
In accordance with Section 409 of the Companies Act 2006 a full list of entities in which the Group has an interest of greater than or equal
to 20%, the registered office and effective percentage of equity owned as at 31 December 2020 are disclosed below.
INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
Subsidiary undertakings
Holding
Proportion of
voting rights
and shares held Nature of Business
Aston Martin Holdings (UK) Limited*
Ordinary
100%
Dormant company
Aston Martin Capital Holdings Limited** ◊ Ordinary
100%
Financing company holding the Senior Secured Notes
Aston Martin Investments Limited**
Ordinary
100%
Holding company
Aston Martin Capital Limited** ◊
Ordinary
100%
Dormant company – financing company that held Senior Secured
Notes that were repaid in 2017
Aston Martin Lagonda Group Limited** Ordinary
100%
Holding company
Aston Martin Lagonda of North America
Incorporated** ^
Ordinary
100%
Luxury sports car distributor
Lagonda Properties Limited**
Ordinary
100%
Dormant company
Aston Martin Lagonda Pension Trustees
Limited**
Ordinary
100%
Trustee of the Aston Martin Lagonda Limited Pension Scheme
Aston Martin Lagonda Limited**
Ordinary
100%
Manufacture and sale of luxury sports cars, the sale of parts, brand
licensing and motorsport activities.
AM Brands Limited**◊
Ordinary
100%
Non-trading company
Aston Martin Lagonda of Europe GmbH**
>
Ordinary
100%
Provision of engineering and sales and marketing services
AML Overseas Services Limited**
Ordinary
100%
Dormant company
Aston Martin Italy S.r.l** <
Ordinary
100%
Dormant company
Aston Martin Lagonda (China) Automobile
Distribution Co., Ltd** √
Ordinary
100%
Luxury sports car distributor
AM Nurburgring Racing Limited**
Ordinary
100%
Dormant company
Aston Martin Japan GK** <<
Ordinary
100%
Operator of the sales office in Japan and certain other countries in
the Asia Pacific region
Aston Martin Lagonda – Asia Pacific
PTE Limited** >>
Ordinary
100%
Operator of the sales office in Singapore and certain other
countries in the Asia Pacific region
AMWS Limited** ◊
Ordinary
50%***
Holding company
Aston Martin Works Limited**
Ordinary
50%***
Sale, servicing and restoration of Aston Martin cars
All subsidiaries are incorporated in England and Wales unless otherwise stated.
◊ incorporated in Jersey (tax resident in the United Kingdom)
^ incorporated in the United States of America
> incorporated in Germany
< incorporated in Italy
<< incorporated in Japan
>> incorporated in Singapore
√ incorporated in the People’s Republic of China
* Held directly by Aston Martin Lagonda Global Holdings plc
** Held indirectly by Aston Martin Lagonda Global Holdings plc
*** The Group exercises management control of these legal entities and therefore the results, assets and liabilities have been wholly included in the
Consolidated Financial Statements. The individual results, aggregate assets and aggregate liabilities included within the Consolidated Financial Statements
are summarised on page 143.
142
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
31 RELATED PARTY TRANSACTIONS (CONTINUED)
TERMS AND CONDITIONS OF TRANSACTIONS WITH RELATED PARTIES
Sales and purchases between related parties are made at normal market prices. Outstanding balances with entities other than subsidiaries
are unsecured, interest free and cash settlement is expected within 60 days of invoice. Terms and conditions for transactions with
subsidiaries are the same, with the exception that balances are placed on intercompany accounts. The Group has not provided or benefited
from any guarantees for any related party receivables or payables.
On 24 February 2021, £4.7m of cash not available for short term use (see note 20) was released following conclusion of arbitration.
32 POST BALANCE SHEET EVENTS
33 GROUP COMPANIES
In accordance with Section 409 of the Companies Act 2006 a full list of entities in which the Group has an interest of greater than or equal
to 20%, the registered office and effective percentage of equity owned as at 31 December 2020 are disclosed below.
INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
Proportion of
voting rights
Subsidiary undertakings
Holding
and shares held Nature of Business
Aston Martin Holdings (UK) Limited*
Ordinary
100%
Dormant company
Aston Martin Capital Holdings Limited** ◊ Ordinary
100%
Financing company holding the Senior Secured Notes
Aston Martin Investments Limited**
Ordinary
100%
Holding company
Aston Martin Capital Limited** ◊
Ordinary
100%
Dormant company – financing company that held Senior Secured
Aston Martin Lagonda Group Limited** Ordinary
100%
Holding company
Aston Martin Lagonda of North America
Ordinary
100%
Luxury sports car distributor
Notes that were repaid in 2017
Lagonda Properties Limited**
Ordinary
100%
Dormant company
Aston Martin Lagonda Pension Trustees
Ordinary
100%
Trustee of the Aston Martin Lagonda Limited Pension Scheme
Incorporated** ^
Limited**
>
AML Overseas Services Limited**
Ordinary
100%
Dormant company
Aston Martin Italy S.r.l** <
Ordinary
100%
Dormant company
Aston Martin Lagonda (China) Automobile
Ordinary
100%
Luxury sports car distributor
Distribution Co., Ltd** √
AM Nurburgring Racing Limited**
Ordinary
100%
Dormant company
Aston Martin Japan GK** <<
Ordinary
100%
Operator of the sales office in Japan and certain other countries in
the Asia Pacific region
Aston Martin Lagonda – Asia Pacific
Ordinary
100%
Operator of the sales office in Singapore and certain other
PTE Limited** >>
AMWS Limited** ◊
Ordinary
50%***
Holding company
Aston Martin Works Limited**
Ordinary
50%***
Sale, servicing and restoration of Aston Martin cars
All subsidiaries are incorporated in England and Wales unless otherwise stated.
◊ incorporated in Jersey (tax resident in the United Kingdom)
^ incorporated in the United States of America
> incorporated in Germany
< incorporated in Italy
<< incorporated in Japan
>> incorporated in Singapore
√ incorporated in the People’s Republic of China
* Held directly by Aston Martin Lagonda Global Holdings plc
** Held indirectly by Aston Martin Lagonda Global Holdings plc
*** The Group exercises management control of these legal entities and therefore the results, assets and liabilities have been wholly included in the
Consolidated Financial Statements. The individual results, aggregate assets and aggregate liabilities included within the Consolidated Financial Statements
are summarised on page 143.
33 GROUP COMPANIES (CONTINUED)
Total assets
Total liabilities
Net assets
Revenue
Profit after tax
Group’s share of profit
REGISTERED ADDRESSES
Aston Martin Holdings (UK) Limited
Aston Martin Capital Holdings Limited
Aston Martin Investments Limited
Aston Martin Capital Limited
Aston Martin
Works Limited
2020
£m
AMWS Limited
2020
£m
Aston Martin
Works Limited
2019
£m
AMWS Limited
2019
£m
37.2
(4.9)
32.3
69.8
17.5
8.8
–
–
–
–
–
–
41.0
(12.8)
28.2
74.0
17.6
8.8
–
–
–
–
–
–
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
28 Esplanade, St.Helier, Jersey, JE2 3QA
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
28 Esplanade, St.Helier, Jersey, JE2 3QA
Aston Martin Lagonda Group Limited
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
Aston Martin Lagonda of North America Incorporated
9920 Irvine Center Drive, Irvine, CA 92618, United States of America
Lagonda Properties Limited
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
Aston Martin Lagonda Pension Trustees Limited
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
Aston Martin Lagonda Limited
AM Brands Limited
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
28 Esplanade, St.Helier, Jersey, JE2 3QA
Aston Martin Lagonda of Europe GmbH
Gottlieb-Daimler-Strasse 30, 53520 Meuspath, Germany
Aston Martin Lagonda Limited**
Ordinary
100%
Manufacture and sale of luxury sports cars, the sale of parts, brand
Aston Martin Lagonda (China) Automobile Distribution Co., Ltd
AM Brands Limited**◊
Ordinary
100%
Non-trading company
Aston Martin Lagonda of Europe GmbH**
Ordinary
100%
Provision of engineering and sales and marketing services
AM Nurburgring Racing Limited
Aston Martin Japan GK
licensing and motorsport activities.
AML Overseas Services Limited
Aston Martin Italy S.r.l
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
Corso Magenta 84, Milano, Italy.
Unit 2901, Raffles City Office Tower, No. 268 Xi Zang Middle Road,
Huangpu District, Shanghai, China 200001
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
1-2-3 Kita-Aoyama, Minato-ku, Tokyo 107-0061, Japan
Aston Martin Lagonda – Asia Pacific PTE Limited
8 Marina View,# 41-05, Asia Square Tower 1, Singapore 018960
AMWS Limited
Aston Martin Works Limited
28 Esplanade, St.Helier, Jersey, JE2 3QA
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
34 ALTERNATIVE PERFORMANCE MEASURES
In the reporting of financial information, the Directors have adopted various Alternative Performance Measures ("APMs"). APMs should be
considered in addition to IFRS measurements. The Directors believe that these APMs assist in providing useful information on the
underlying performance of the Group, enhance the comparability of information between reporting periods, and are used internally by the
Directors to measure the Group's performance.
countries in the Asia Pacific region
The key APMs that the Group focuses on are as follows:
i) Adjusted EBT is the loss before tax and adjusting items as shown in the Consolidated Income Statement.
ii) Adjusted EBIT is operating (loss)/profit before adjusting items.
iii) Adjusted EBITDA removes depreciation, loss on sale of fixed assets and amortisation from adjusted EBIT.
iv) Adjusted operating margin is adjusted operating (loss)/profit divided by revenue.
v) Adjusted EBITDA margin is adjusted EBITDA (as defined above) divided by revenue.
vi) Adjusted Earnings Per Share is loss after tax before adjusting items as shown in the Consolidated Income Statement, divided by the
weighted average number of ordinary shares in issue during the reporting period.
vii) Net Debt is current and non-current borrowings in addition to inventory repurchase arrangements and lease liabilities, less cash and
cash equivalents and cash held not available for short-term use as shown in the Consolidated Statement of Financial Position.
viii) Adjusted leverage is represented by the ratio of Net Debt to the last twelve months (‘LTM’) Adjusted EBITDA.
ix) Free cashflow is represented by cash (outflow)/inflow from operating activities plus the cash used in investing activities (excluding
interest received) plus interest paid in the year less interest received.
142
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143
143
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
34 ALTERNATIVE PERFORMANCE MEASURES (CONTINUED)
INCOME STATEMENT
Loss before tax
Adjusting operating expenses (note 6)
Adjusting finance income (note 8)
Adjusting finance expense (note 9)
Adjusted loss before tax (EBT)
Adjusted finance income
Adjusted finance expense
Adjusted Operating Profit (EBIT)
Adjusted Operating Margin
Reported depreciation
Reported amortisation
Loss on disposal of fixed assets
Adjusted EBITDA
Adjusted EBITDA Margin
EARNINGS PER SHARE
Adjusted earnings per ordinary share
Loss available for equity holders (£m)
Adjusting items (note 6)
Adjusting items before tax (£m)
Tax on adjusting items (£m)
Adjusted loss (£m)
Basic weighted average number of ordinary shares (million)1
Adjusted loss per ordinary share (pence)
Adjusted diluted earnings per ordinary share
Adjusted loss (£m)
Diluted weighted average number of ordinary shares (million)
Adjusted diluted loss per ordinary share (pence)
2020
£m
2019
restated*
£m
(466.0)
(119.6)
98.0
75.5
(6.9)
(299.4)
(33.1)
107.6
(224.9)
(36.8%)
55.7
99.1
–
(70.1)
(11.5%)
42.1
–
6.6
(70.9)
(16.3)
77.3
(9.9)
(1.0%)
42.7
85.2
0.9
118.9
12.1%
2020
£m
2019
restated*
£m
(419.3)
(126.4)
166.6
(32.9)
(285.6)
77.2
48.7
(8.8)
(86.5)
43.5
(369.9p)
(198.8p)
(285.6)
77.2
(86.5)
43.5
(369.9p)
(198.8p)
* Detail on the restatement of the comparative period is disclosed in note 2 and the impact on Earnings Per Share in note 12. Additional ordinary shares issued
as a result of the rights issue conducted in 2020 have been incorporated in the 2019 earnings per share calculation in full without any time apportionment.
1. Average number of ordinary shares has been reduced by a ratio of 20:1 reflecting the share consolidation undertaken in December 2020.
144
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
34 ALTERNATIVE PERFORMANCE MEASURES (CONTINUED)
INCOME STATEMENT
34 ALTERNATIVE PERFORMANCE MEASURES (CONTINUED)
NET DEBT
Loss before tax
Adjusting operating expenses (note 6)
Adjusting finance income (note 8)
Adjusting finance expense (note 9)
Adjusted loss before tax (EBT)
Adjusted finance income
Adjusted finance expense
Adjusted Operating Profit (EBIT)
Adjusted Operating Margin
Reported depreciation
Reported amortisation
Loss on disposal of fixed assets
Adjusted EBITDA
Adjusted EBITDA Margin
EARNINGS PER SHARE
Adjusted earnings per ordinary share
Loss available for equity holders (£m)
Adjusting items (note 6)
Adjusting items before tax (£m)
Tax on adjusting items (£m)
Adjusted loss (£m)
Basic weighted average number of ordinary shares (million)1
Adjusted loss per ordinary share (pence)
Adjusted diluted earnings per ordinary share
Adjusted loss (£m)
Diluted weighted average number of ordinary shares (million)
Adjusted diluted loss per ordinary share (pence)
* Detail on the restatement of the comparative period is disclosed in note 2 and the impact on Earnings Per Share in note 12. Additional ordinary shares issued
as a result of the rights issue conducted in 2020 have been incorporated in the 2019 earnings per share calculation in full without any time apportionment.
1. Average number of ordinary shares has been reduced by a ratio of 20:1 reflecting the share consolidation undertaken in December 2020.
Opening cash and cash equivalents
Cash (outflow)/inflow from operating activities
Cash outflow from investing activities
Cash inflow from financing activities
Effect of exchange rates on cash and cash equivalents
Cash and cash equivalents at 31 December
Cash held not available for short-term use
Borrowings
Lease liabilities
Inventory repurchase arrangement
Net Debt
Adjusted EBITDA
Adjusted leverage
FREE CASHFLOW
Net cash (outflow)/inflow from operating activities
Cash used in investing activities (excluding interest received)
Interest paid less interest received
Free cashflow
2020
£m
107.9
(198.6)
(258.4)
840.2
(1.7)
489.4
9.9
(1,084.8)
(103.0)
(38.2)
(726.7)
(70.1)
n.m
2020
£m
(198.6)
(260.7)
(80.0)
(539.3)
2019
£m
144.6
19.4
(305.2)
243.3
5.8
107.9
8.7
(953.9)
(111.4)
(38.9)
(987.6)
118.9
8.3x
2019
£m
19.4
(310.2)
(47.0)
(337.8)
(466.0)
(119.6)
2019
restated*
£m
42.1
–
6.6
(70.9)
(16.3)
77.3
(9.9)
(1.0%)
42.7
85.2
0.9
118.9
12.1%
2020
£m
98.0
75.5
(6.9)
(299.4)
(33.1)
107.6
(224.9)
(36.8%)
55.7
99.1
–
(70.1)
(11.5%)
166.6
(32.9)
(285.6)
77.2
(285.6)
77.2
2020
£m
2019
restated*
£m
(419.3)
(126.4)
48.7
(8.8)
(86.5)
43.5
(86.5)
43.5
(369.9p)
(198.8p)
(369.9p)
(198.8p)
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145
145
COMPANY FINANCIAL STATEMENTS
PARENT COMPANY
FINANCIAL STATEMENTS
Parent Company Statement of Financial Position as at 31 December 2020
Non-current assets
Investments
Debtors
Creditors
Net assets
Capital and reserves
Share capital
Share premium
Capital redemption reserve
Capital reserve
Merger reserve
Retained earnings
Shareholder equity
Note
2020
£m
2019
£m
3
4
5
6
6
6
6
957.4
815.1
759.7
(330.0)
1,387.1
11.5
1,108.2
9.3
2.0
144.0
112.1
1,387.1
–
(256.5)
558.6
2.1
352.3
–
2.0
–
202.2
558.6
The Financial Statements were approved by the board of directors on 24 February 2021 and were signed on its behalf by
TOBIAS MOERS
CHIEF EXECUTIVE OFFICER
Company Number: 11488166
KENNETH GREGOR
CHIEF FINANCIAL OFFICER
The loss on ordinary activities after taxation amounts to £90.1m (2019: profit of £1.4m).
146
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
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COMPANY FINANCIAL STATEMENTS
COMPANY FINANCIAL STATEMENTS
PARENT COMPANY
FINANCIAL STATEMENTS
Parent Company Statement of Financial Position as at 31 December 2020
Non-current assets
Investments
Debtors
Creditors
Net assets
Capital and reserves
Share capital
Share premium
Capital redemption reserve
Capital reserve
Merger reserve
Retained earnings
Shareholder equity
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
Company
At 1 January 2020
Total comprehensive income for the year
Loss for the year
Total comprehensive income for the year
957.4
815.1
Transactions with owners recorded directly in equity
Issuance of ordinary shares (note 5)
Capital reduction
Total transactions with owners
Share
Capital
£m
Share
Premium
£m
Capital
Redemption
Reserve
£m
Capital
Reserve
£m
Merger
Reserve
£m
Retained
Earnings
£m
Total
Equity
£m
2.1
352.3
–
2.0
–
202.2
558.6
–
–
–
–
18.7
755.9
(9.3)
9.4
–
755.9
–
–
–
9.3
9.3
–
–
–
–
–
–
–
(90.1)
(90.1)
(90.1)
(90.1)
144.0
–
144.0
–
–
–
918.6
–
918.6
At 31 December 2020
11.5 1,108.2
9.3
2.0
144.0
112.1 1,387.1
Company
At 1 January 2019
Total comprehensive income for the year
Profit for the year
Total comprehensive income for the year
At 31 December 2019
Share
Capital
£m
Share
Premium
£m
Capital
Redemption
Reserve
£m
Capital
Reserve
£m
Merger
Reserve
£m
Retained
Earnings
£m
Total
Equity
£m
2.1
352.3
–
2.0
–
200.8
557.2
–
–
–
–
2.1
352.3
–
–
–
–
–
–
–
1.4
1.4
1.4
1.4
2.0
–
202.2
558.6
Note
2020
£m
2019
£m
3
4
5
6
6
6
6
759.7
(330.0)
1,387.1
11.5
1,108.2
9.3
2.0
144.0
112.1
1,387.1
–
(256.5)
558.6
2.1
352.3
–
2.0
–
202.2
558.6
The Financial Statements were approved by the board of directors on 24 February 2021 and were signed on its behalf by
TOBIAS MOERS
CHIEF EXECUTIVE OFFICER
Company Number: 11488166
KENNETH GREGOR
CHIEF FINANCIAL OFFICER
The loss on ordinary activities after taxation amounts to £90.1m (2019: profit of £1.4m).
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
147
147
NOTES TO THE COMPANY FINANCIAL STATEMENTS
1 ACCOUNTING POLICIES
Authorisation of Financial Statements and statement of compliance
with FRS 101.
The Parent Company Financial Statements of Aston Martin
Lagonda Global Holdings plc (the Company) for the year were
authorised for issue by the Board of Directors on 24 February 2021
and the Statement of Financial Position was signed on the Board’s
behalf by Tobias Moers. The Company is a public limited company
incorporated and domiciled in the UK. The Company’s ordinary
shares are traded on the London Stock Exchange and it is not under
the control of any single shareholder.
An overview of the business activities of Aston Martin Lagonda Global
Holdings plc, including a review of the key business risks that the
Group faces, is given in the Strategic Report on pages 1 to 39. The
debt facilities available to the Group and the maturity profile of this
debt is shown in note 23 of the Group Financial Statements.
The Group meets its day-to-day working capital requirements and
medium term funding requirements through a mixture of
$1,085.5m of 1st Lien notes at 10.5% which mature in November
2025, $335m of 2nd Lien split coupon notes at 15% per annum
(8.89 % cash and 6.11% PIK) which mature in November 2026, a
revolving credit facility (£90.6m) which matures August 2025,
facilities to finance inventory, a number of back-to-back loans and
a wholesale vehicle financing facility (as described in note 18 of
the Financial Statements). Under the revolving credit facility the
Group is required to comply with liquidity and leverage covenants.
The amounts outstanding on all the borrowings are shown in note
23 to the Group Financial Statements.
The Directors have developed trading and cash flow forecasts for
the period from the date of approval of these Financial Statements
through 30 June 2022 (the going concern review period). These
forecasts show that the Group has sufficient financial resources to
meet its obligations as they fall due and to comply with covenants
for the going concern review period.
The forecasts reflect our strategy of rebalancing supply and demand
and the decisive actions taken to improve cost efficiency, in alignment
with reduced sports car production levels. The forecasts make
assumptions in respect of future market conditions and, in particular,
wholesale volumes, average selling price, the launch of new models
including Valkyrie and the potential impact of COVID-19 on sales.
The nature of the Group's business is such that there can be variation
in the timing of cash flows around the development and launch of
new models. In addition, the availability of funds provided through
the vehicle wholesale finance facility changes as the availability of
credit insurance and sales volumes vary, in total and seasonally. The
forecasts take into account these factors to the extent which the
directors consider them to represent their best estimate of the future
based on the information that is available to them at the time of
approval of these Financial Statements.
The directors have considered a severe but plausible downside
scenario that includes considering the impact of a 30% reduction in
DBX volumes, a further 4 week period of factory closure due to
COVID-19 restrictions and, operating costs higher than the base plan.
The Group plans to make continued investment for growth in the
period and, accordingly, funds generated through operations are
expected to be reinvested in the business mainly through new model
development and other capital expenditure. To a certain extent such
expenditure is discretionary and, in the event of risks occurring which
could have a particularly severe effect on the Group, as identified in
the severe but plausible downside scenario, actions such as
constraining capital spending, working capital improvements,
reduction in marketing expenditure and the continuation of strict and
immediate expense control would be taken to safeguard the Group’s
financial position.
Accordingly, after considering the forecasts, appropriate sensitivities,
current trading and available facilities, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and to comply with its
financial covenants therefore the Directors continue to adopt the going
concern basis in preparing the Financial Statements.
The Parent Company Financial Statements are presented in sterling.
These Financial Statements have been prepared in accordance with
Financial Reporting Standard 101 ‘Reduced Disclosure Framework’
(FRS 101). No Income Statement is presented for the Company as
permitted by Section 408 of the Companies Act 2006. There were
no gains or losses in the year (2019: £nil) in Other Comprehensive
Income. The fee relating to the audit of these Financial Statements
of £0.2m was borne by the Company (2019: £0.2m).
BASIS OF PREPARATION
The Parent Company Financial Statements have been prepared in
accordance with FRS 101, as applied in accordance with the
provisions of the Companies Act 2006. FRS 101 sets out a reduced
disclosure framework for a ‘qualifying entity’ as defined in the
standard which addresses the financial reporting requirements and
disclosure exemptions in the individual Financial Statements of
qualifying entities that otherwise apply this recognition, measurement
and disclosure requirements of IFRS as adopted by the EU.
FRS 101 sets out amendments to IFRS as adopted by the EU that
are necessary to achieve compliance with the Companies Act and
related Regulations. The following disclosures have not been
included as permitted by FRS 101.
• A Cash Flow Statement and related notes as required by IAS 7
‘Statement of Cash Flows’;
• Disclosures in respect of transactions with wholly owned
subsidiaries as required by IAS 24 ‘Related Party Disclosures’;
• Disclosures in respect of capital management as required
by paragraphs 134 to 136 of IAS 1 ‘Presentation of
Financial Statements’;
• The effects of new but not yet effective IFRSs as required by
paragraphs 30 and 31 of IAS 8 ‘Accounting Policies, Changes
in Accounting Estimates and Errors’; and
• Disclosures in respect of the compensation of key management
personnel as required by paragraph 17 of IAS 24 ‘Related Party
Disclosures’.
As the Financial Statements of the Group include the equivalent
disclosures, the Company has also taken the exemptions under
FRS 101 available in respect of the following disclosures:
• The requirements of paragraphs 45(b) and 46 to 52 of IFRS 2
‘Share-based Payment’ in respect of group-settled shared based
payments; and
• The requirements of paragraphs 91 to 99 of IFRS 13 ‘Fair Value
Measurement’ and the disclosures required by IFRS 7 ‘Financial
Instruments: Disclosures’.
The accounting policies set out herein have, unless otherwise
stated, been applied consistently to all periods presented in these
Financial Statements.
INVESTMENTS
The Company recognises investments in subsidiaries at cost less
impairment in its individual Financial Statements.
The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Company makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-
generating unit’s fair value less costs to sell and its value in use and
is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from
other assets or groups of assets.
148
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
NOTES TO THE COMPANY FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
1 ACCOUNTING POLICIES
Authorisation of Financial Statements and statement of compliance
with FRS 101.
Accordingly, after considering the forecasts, appropriate sensitivities,
current trading and available facilities, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and to comply with its
The Parent Company Financial Statements of Aston Martin
financial covenants therefore the Directors continue to adopt the going
Lagonda Global Holdings plc (the Company) for the year were
concern basis in preparing the Financial Statements.
authorised for issue by the Board of Directors on 24 February 2021
and the Statement of Financial Position was signed on the Board’s
behalf by Tobias Moers. The Company is a public limited company
incorporated and domiciled in the UK. The Company’s ordinary
shares are traded on the London Stock Exchange and it is not under
the control of any single shareholder.
An overview of the business activities of Aston Martin Lagonda Global
Holdings plc, including a review of the key business risks that the
Group faces, is given in the Strategic Report on pages 1 to 39. The
debt facilities available to the Group and the maturity profile of this
debt is shown in note 23 of the Group Financial Statements.
The Group meets its day-to-day working capital requirements and
medium term funding requirements through a mixture of
$1,085.5m of 1st Lien notes at 10.5% which mature in November
2025, $335m of 2nd Lien split coupon notes at 15% per annum
(8.89 % cash and 6.11% PIK) which mature in November 2026, a
revolving credit facility (£90.6m) which matures August 2025,
facilities to finance inventory, a number of back-to-back loans and
a wholesale vehicle financing facility (as described in note 18 of
the Financial Statements). Under the revolving credit facility the
Group is required to comply with liquidity and leverage covenants.
The amounts outstanding on all the borrowings are shown in note
23 to the Group Financial Statements.
The Directors have developed trading and cash flow forecasts for
the period from the date of approval of these Financial Statements
through 30 June 2022 (the going concern review period). These
The Parent Company Financial Statements are presented in sterling.
These Financial Statements have been prepared in accordance with
Financial Reporting Standard 101 ‘Reduced Disclosure Framework’
(FRS 101). No Income Statement is presented for the Company as
permitted by Section 408 of the Companies Act 2006. There were
no gains or losses in the year (2019: £nil) in Other Comprehensive
Income. The fee relating to the audit of these Financial Statements
of £0.2m was borne by the Company (2019: £0.2m).
BASIS OF PREPARATION
The Parent Company Financial Statements have been prepared in
accordance with FRS 101, as applied in accordance with the
provisions of the Companies Act 2006. FRS 101 sets out a reduced
disclosure framework for a ‘qualifying entity’ as defined in the
standard which addresses the financial reporting requirements and
disclosure exemptions in the individual Financial Statements of
qualifying entities that otherwise apply this recognition, measurement
and disclosure requirements of IFRS as adopted by the EU.
FRS 101 sets out amendments to IFRS as adopted by the EU that
are necessary to achieve compliance with the Companies Act and
related Regulations. The following disclosures have not been
included as permitted by FRS 101.
• A Cash Flow Statement and related notes as required by IAS 7
‘Statement of Cash Flows’;
• Disclosures in respect of transactions with wholly owned
subsidiaries as required by IAS 24 ‘Related Party Disclosures’;
forecasts show that the Group has sufficient financial resources to
• Disclosures in respect of capital management as required
meet its obligations as they fall due and to comply with covenants
by paragraphs 134 to 136 of IAS 1 ‘Presentation of
for the going concern review period.
Financial Statements’;
The forecasts reflect our strategy of rebalancing supply and demand
and the decisive actions taken to improve cost efficiency, in alignment
• The effects of new but not yet effective IFRSs as required by
paragraphs 30 and 31 of IAS 8 ‘Accounting Policies, Changes
with reduced sports car production levels. The forecasts make
assumptions in respect of future market conditions and, in particular,
wholesale volumes, average selling price, the launch of new models
including Valkyrie and the potential impact of COVID-19 on sales.
The nature of the Group's business is such that there can be variation
in the timing of cash flows around the development and launch of
new models. In addition, the availability of funds provided through
the vehicle wholesale finance facility changes as the availability of
credit insurance and sales volumes vary, in total and seasonally. The
forecasts take into account these factors to the extent which the
directors consider them to represent their best estimate of the future
based on the information that is available to them at the time of
approval of these Financial Statements.
The directors have considered a severe but plausible downside
scenario that includes considering the impact of a 30% reduction in
DBX volumes, a further 4 week period of factory closure due to
COVID-19 restrictions and, operating costs higher than the base plan.
The Group plans to make continued investment for growth in the
period and, accordingly, funds generated through operations are
expected to be reinvested in the business mainly through new model
development and other capital expenditure. To a certain extent such
expenditure is discretionary and, in the event of risks occurring which
could have a particularly severe effect on the Group, as identified in
the severe but plausible downside scenario, actions such as
constraining capital spending, working capital improvements,
reduction in marketing expenditure and the continuation of strict and
immediate expense control would be taken to safeguard the Group’s
financial position.
in Accounting Estimates and Errors’; and
• Disclosures in respect of the compensation of key management
personnel as required by paragraph 17 of IAS 24 ‘Related Party
Disclosures’.
As the Financial Statements of the Group include the equivalent
disclosures, the Company has also taken the exemptions under
FRS 101 available in respect of the following disclosures:
• The requirements of paragraphs 45(b) and 46 to 52 of IFRS 2
‘Share-based Payment’ in respect of group-settled shared based
payments; and
• The requirements of paragraphs 91 to 99 of IFRS 13 ‘Fair Value
Measurement’ and the disclosures required by IFRS 7 ‘Financial
Instruments: Disclosures’.
The accounting policies set out herein have, unless otherwise
stated, been applied consistently to all periods presented in these
Financial Statements.
INVESTMENTS
The Company recognises investments in subsidiaries at cost less
impairment in its individual Financial Statements.
The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Company makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-
generating unit’s fair value less costs to sell and its value in use and
is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from
other assets or groups of assets.
1 ACCOUNTING POLICIES (CONTINUED)
INVESTMENTS (CONTINUED)
Where the carrying amount of an asset exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. Impairment
losses on continuing operations are recognised in the Income
Statement in those expense categories consistent with the function
of the impaired asset.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to
the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been
recognised for the asset (or cash generating unit) in prior periods.
A reversal of an impairment loss is recognised as income immediately.
At 31 December 2020, the net assets of the Company (£1,387.1m)
were considerably higher than those of the Group (£804.6m). It
was concluded that the value of investments and receivables at the
balance sheet date are recoverable owing to the Group’s market
capitalisation of £2.3bn.
AMOUNTS DUE TO GROUP UNDERTAKINGS
Amounts due to Group undertakings are initially recognised
at fair value. Subsequent to initial recognition they are measured
at amortised cost using the effective interest method.
AMOUNTS DUE FROM GROUP UNDERTAKINGS
Amounts due to Group undertakings are initially recognised at fair
value and subsequently measured at amortised cost on an effective
interest basis. The Company recognises an allowance for expected
credit loss (ECLs) for all receivables held at amortised cost. ECLs
are provided for credit losses that result from default events that are
possible within the next 12-months (a 12-month ECL) and are
remeasured to reflect changes in 12-month ECL, unless a significant
deterioration in credit risk is considered to have occurred in which
case ECLs are reassessed on a lifetime basis. A provision of £38.3m
has been recognised in the current period.
FINANCIAL ASSETS AND LIABILITIES
Financial assets are cash or a contractual right to receive cash or
another financial asset from another entity or to exchange financial
assets or liabilities with another entity under conditions that are
potentially favourable to the entity. In addition, contracts that result
in another entity delivering a variable number of its own equity
instruments are financial assets.
Derivative financial instruments including equity options are
held at fair value. All other financial instruments are held at
amortised cost.
2 DIRECTORS’ REMUNERATION
The Company has no employees other than the directors.
Full details of the directors’ remuneration is given in the Directors’
Remuneration Report.
3 INVESTMENTS
Cost and net book value
At 1 January 2019 and 31 December 2019
Additions in the year
At 31 December 2020
£m
815.1
142.3
957.4
The Company directly owns 100% of the share capital of Aston
Martin Holdings (UK) Limited, a non-trading intermediate holding
company registered in England and Wales. A full list of subsidiary
and other related undertakings is given in note 33 of the Group
Financial Statements. Additions in the year represents a capital
contribution of £142.3m to Aston Martin Lagonda Limited in
respect of the issuance of ordinary shares from the Company as
part of the MBAG Strategic Cooperation Agreement. See notes 13
and 27 in the Group Financial Statements for further details.
4 DEBTORS
Amounts due from Group undertakings
5 CREDITORS
Amounts due to Group undertakings
Accrued expenses
Derivative option over own shares
2020
£m
759.7
2019
£m
–
2020
£m
2019
£m
248.6
256.5
1.5
79.9
–
–
330.0
256.5
SHARE WARRANTS
As part of the issue of the second lien SSNs by Aston Martin Capital
Holdings Limited, the Company issued share warrants enabling
warrant holders to subscribe for a number of Ordinary Shares in
the Company at the Subscription price of £10 per share. The
warrants can be exercised from 1 July 2021 through to 7 December
2027. The fair value of the warrants was determined using a
Binomial model used to predict the behaviour of the warrant
holders and when they might exercise their holdings. This resulted
in a valuation of £33.6m upon initial recognition. The movement
between initial pricing in October 2020 and the 31 December
2020 of £45.3m has been expensed to the Income Statement in
the year.
6 CAPITAL AND RESERVES
Allotted, called up and fully paid
114,933,587 shares of 10.0p each
(2019: 228,002,890 ordinary shares of
0.00904p each)
2020
£m
2019
£m
11.5
2.1
The Company undertook a rights issue and 3 placings of ordinary
equity shares during the year (see note 27 in the Group Financial
Statements). On 14 December 2020 the Company underwent a
capital reorganisation. Each ordinary 0.9p share was split into one
ordinary 0.5p share and one deferred 0.4p share. The deferred
shares were repurchased by the Company for consideration of £1.
The deferred shares were subsequently cancelled by the Company
resulting in a movement from share capital into the Capital
Redemption Reserve of £9.3m. Each holder of ordinary shares was
entitled to 1 new ordinary share of 10p in respect of 20 ordinary
0.5p shares held. A capital redemption reserve of £9.3m was
recognised when the shares were repurchased.
MERGER RESERVE
On 26 June 2020 the Company issued 304.0m ordinary shares
through a non-pre-emptive placing and retail offer. The shares
were issued at 50p raising gross proceeds of £152.1m, with £2.7m
recognised as share capital and the remaining £149.4m recognised
as merger reserve. The merger reserve is used where more than
90% of the shares in a subsidiary are acquired and the
consideration includes the issue of new shares by the Company,
thereby attracting merger relief under the Companies Act 2006.
The merger reserve value was reduced by £5.4m of transaction
costs associated with the equity raise.
CAPITAL RESERVE
The capital reserve of £2.0m arose from the share-for-share
exchange on the acquisition of the entire share capital of Aston
Martin Holdings (UK) Limited in 2018.
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149
149
SHAREHOLDER INFORMATION
GENERAL SHAREHOLDER ENQUIRIES
Enquiries relating to shareholdings, such as the transfer
of shares, change of name or address, lost share certificates
or dividend cheques, should be referred to the
Company’s registrar:
Equiniti, Aspect House, Spencer Road, Lancing,
West Sussex, BN99 6DA, United Kingdom.
Tel: 0333 207 5973.
Lines are open 08.30am to 5.30pm, Monday to Friday
excluding public holidays in England & Wales. Please dial
+44 121 415 0920 if calling from outside the UK or online
at help.shareview.co.uk for additional information.
Equiniti offers a range of shareholder information and
services online at www.shareview.co.uk.
SHARE CONSOLIDATION
On 14 December 2020, the Company undertook a capital
reorganisation comprising a subdivision, re-designation and
consolidation of its ordinary issued shares (the “Capital
Reorganisation”). Each ordinary share of £0.009039687
was subdivided and re-designated into one interim
share of £0.005 and one deferred share of £0.004039687.
Immediately thereafter, the interim shares were consolidated
at the ratio of 20:1 into consolidated shares of £0.10 each
(the “Share Consolidation”). The deferred shares
were repurchased by the Company and cancelled on
15 December 2020. Further information on the Capital
Reorganisation is set out in the Combined Prospectus and
Circular dated 18 November 2020.
SHARE WARRANTS
The Company has issued warrants granting rights to
subscribe for ordinary shares in accordance with the terms
of the warrant instrument dated 7 December 2020.
Warrants are exercisable during the period starting on
1 July 2021 and ending on 7 December 2027.
Further information on the warrants is set out in the Combined
Prospectus and Circular dated 18 November 2020.
SHARE DEALING
Aston Martin Lagonda Global Holdings plc shares can be
traded through most banks, building societies or stock
brokers. Equiniti offers a telephone and internet dealing
service. Terms and conditions and details of the commission
charges are available on request.
For telephone dealing, please telephone 03456 037 037
between 8.00am and 4.30pm, Monday to Friday, and for
internet dealing visit www.shareview.co.uk/dealing.
Shareholders will need their reference number which can
be found on their share certificate.
SHAREGIFT
Shareholders with a small number of shares, the value of
which makes them uneconomic to sell, may wish to
consider donating their shares to charity through ShareGift,
a donation scheme operated by The Orr Mackintosh
Foundation. A ShareGift donation form can be obtained
from Equiniti. Further information is available at
www.sharegift.org or by telephone on 0207 930 3737.
SHARE PRICE INFORMATION
The latest Aston Martin Lagonda Global Holdings plc
share price is available on the Company’s website at
www.astonmartinlagonda.com.
UNAUTHORISED BROKERS (BOILER ROOM SCAMS)
Shareholders are advised to be very wary of any unsolicited
advice, offers to buy shares at a discount, or offers of free
company reports. These are typically from overseas-based
‘brokers’ who target UK shareholders offering to sell them
what often turn out to be worthless or high-risk shares in US
or UK investments. These operations are commonly known
as boiler rooms.
If you receive any unsolicited investment advice, get the
correct name of the person and organisation, and check
that they are properly authorised by the FCA before
proceeding any further. This can be done by visiting
www.fca.org.uk/register/.
ANNUAL GENERAL MEETING
Information on the Annual General Meeting, together
with the Notice of Meeting containing details of the business
to be conducted, will be posted on our website
www.astonmartinlagonda.com.
The voting results for the 2021 Annual General Meeting will
also be accessible on www.astonmartinlagonda.com shortly
after the meeting.
If you deal with an unauthorised firm, you will not be
eligible to receive payment under the Financial Services
Compensation Scheme if things go wrong. If you think you
have been approached by an unauthorised firm, you should
contact the FCA consumer helpline on 0800 111 6768.
More detailed information can be found on the FCA
website at www.fca.org.uk/consumers/protect-yourself/
unauthorised-firms.
ELECTRONIC COMMUNICATION
Shareholders may at any time choose to receive all shareholder
documentation in electronic form via the internet, rather than
in paper format. Shareholders who decide to register for this
option will receive an email each time a shareholder document
is published on the internet. Shareholders who wish to receive
documentation in electronic form should register online at
www.shareview.co.uk.
REGISTERED OFFICE
Aston Martin Lagonda Global Holdings plc Banbury Road
Gaydon Warwick CV35 0DB United Kingdom
Registered in England and Wales Registered Number:
11488166
www.astonmartinlagonda.com
WEBSITE
This Annual Report and other information about Aston
Martin Lagonda Global Holdings plc, including share price
information and details of results announcements, are
available at www.astonmartinlagonda.com.
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ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC 2020 ANNUAL REPORT
ABOUT THIS PRINTED REPORT
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ECF fibre and Acid Free. Pages 87 to 150 of this report is printed on Accent Smooth Ivory. This product is
made from virgin ECF pulp, which is produced from sawmill residues, forest thinning, and roundwood
from managed sustainable forests. Printed in the UK by Pureprint who are a Carbon Neutral Company
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DISCLAIMER
The purpose of this Annual Report is to provide information to the members of Aston Martin Lagonda Global Holdings plc.
This document contains certain statements with respect to the operations, performance and financial condition of the Group
including among other things, statements about expected revenues, margins, earnings per share or other financial or other
measures. Forward-looking statements appear in a number of places throughout this document and include statements
regarding our intentions, beliefs or current expectations and those of our officers, directors and employees concerning,
amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the business
we operate. By their nature, these statements involve uncertainty and are subject to a number of risks since future events
and circumstances can cause actual results and developments to differ materially from those anticipated.
The forward-looking statements reflect knowledge and information available at the date of preparation of this document
and unless otherwise required by applicable law the Company undertakes no obligation to update or revise these forward-
looking statements. Nothing in this document should be construed as a profit forecast. All members, wherever located,
should consult any additional disclosures that the Company may make in any regulatory announcements or documents
which it publishes. The Company and its directors accept no liability to third parties in respect of this document save as
would arise under English law. This document does not constitute an invitation to underwrite, subscribe for or otherwise
acquire or dispose of any Aston Martin Lagonda Global Holdings plc shares, in the UK, or in the USA, or under the USA
Securities Act 1933 or any other jurisdiction.
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