ANNUAL REPORT AND ACCOUNTS 2021
2021 HIGHLIGHTS
FINANCIAL
Revenue
£1.1bn
+79% (2020: £0.6bn)
Adjusted EBITDA
£138m
(2020: £(70)m)
Operating Loss
£77m
(2020: £323m)
NON-FINANCIAL
DEMAND
ahead of supply
>6,000
core vehicles delivered
DBX took an estimated
20%
share of luxury SUV market in first full year
AWE-INSPIRING
Aston Martin Valkyrie programme deliveries commenced
NET-ZERO
committed to the Science Based Targets initiative Net-Zero Standard
01
OUR VISION
TO BE THE WORLD’S MOST DESIRABLE
ULTRA-LUXURY BRITISH PERFORMANCE BRAND
OUR PURPOSE
TO CREATE VEHICLES WITH THE
ULTIMATE TECHNOLOGY, PRECISION
AND CRAFTSMANSHIP THAT DELIVER
THRILLING PERFORMANCE AND A BESPOKE,
CLASS-LEADING CUSTOMER EXPERIENCE
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 02
BUSINESS AT A GLANCE
DELIVERING STAKEHOLDER VALUE AS AN
ULTRA-LUXURY BRITISH PERFORMANCE BRAND
2,207employees
168
third-party dealer locations
6,178
number of vehicles wholesaled
£1.1bntotal revenue
95%of vehicles produced are
still on the road today
OUR CORE MODELS
ABOUT US
Aston Martin’s vision is to be the world’s most
desirable, ultra-luxury British performance
brand, creating the most exquisitely addictive
performance cars.
Founded in 1913 by Lionel Martin and Robert
Bamford, Aston Martin is acknowledged as an
iconic global brand synonymous with style,
luxury, performance and exclusivity. Aston Martin
fuses the latest technology, time-honoured
craftsmanship and beautiful styling to produce
a range of critically-acclaimed luxury models
including the Vantage, DB11, DBS and DBX
and its first hypercar, the Aston Martin Valkyrie.
Based in Gaydon, England, Aston Martin
Lagonda designs, creates and exports cars which
are sold in 56 countries around the world. Its sports
cars are manufactured in Gaydon with its luxury
SUV range manufactured in St Athan, Wales.
Lagonda was founded in 1899 and Aston
Martin in 1913. The two brands came together
in 1947 when both were purchased by the late
Sir David Brown, and the Company is now listed
on the London Stock Exchange as Aston Martin
Lagonda Global Holdings plc.
2020 saw Lawrence Stroll become the
Company’s Executive Chairman, alongside
significant new investment, a move that
led to Aston Martin’s return to the pinnacle of
motorsport through sponsorship of the Aston
Martin Cognizant Formula One™ Team and
ushered in a new era for the iconic British marque.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
03
OUR GEOGRAPHICAL FOOTPRINT AND NETWORK
AMERICAS
UK1
ASIA PACIFIC
Aston Martin dealers*
44
(2020: 43)
Aston Martin dealers*
22
(2020: 22)
Aston Martin dealers*
49
(2020: 50)
Wholesale volumes
1,984
(2020: 923)
Wholesale volumes
1,109
(2020: 820)
Wholesale volumes
1,815
(2020: 786)
EMEA2
Wholesale volumes breakdown by region 2021
Aston Martin dealers*
53
(2020: 52)
Wholesale volumes
1,270
(2020: 865)
AMERICAS
UK
ASIA PACIFIC
EMEA
32.1%
18.0%
29.5%
20.5%
%
all dealers are third-party dealers
*
1. UK includes South Africa
2. EMEA includes Europe, Middle East and Africa
(excluding the UK and South Africa)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 04
CONTENTS
Strategic Report
05 Our Ultra-Luxury Journey
Executive Chairman’s Statement
18
Chief Executive Officer’s Statement
22
Aston Martin and the Luxury Market
27
30
Business Model
32 Strategic Priorities
Key Performance Indicators
36
38
Risk Management
44 Stakeholder Engagement
46 Section 172 Statement
48 Environmental, Social and Governance
76
Chief Financial Officer’s Statement
78 Financial Review
Executive Chairman’s Introduction to Governance
Board of Directors and Executive Committee
Corporate Governance
82
84
88 Governance Report
102 Nomination Committee Report
108 Audit and Risk Committee Report
115 Directors’ Remuneration Report
138 Directors’ Report
144 Statement of Directors’ Responsibilities
Financial Statements
145 Independent Auditor’s Report
154 Consolidated Financial Statements
159 Notes to the Financial Statements
211 Company Statement of Financial Position
212 Company Statement of Changes in Equity
213 Notes to the Company Financial Statements
Further Information
216 Glossary
219 Shareholder Information
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 05
STRATEGIC REPORT
OUR ULTRA-LUXURY
JOURNEY
In this section:
06 Transcending Ultra-Luxury
09 A Breathtaking Portfolio
12 World-class Talent
15 An Audience of Millions
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 06
BUILDING ON OUR WORLD-CLASS BRAND
TRANSCENDING
ULTRA-LUXURY
2021 has been a landmark year in the redefinition
of Aston Martin as one of the world’s most desirable
ultra-luxury British performance brands, and
the maker of the most exquisitely addictive
performance cars.
Helped by our breathtaking product portfolio,
new car sales grew by 82% year on year.
Retail sales made through our dealers reached
their highest level since 2007, a year when Aston
Martin posted record sales figures.
The average selling price of £162,000 for new
products across our total portfolio highlights the
unique strength and sentiment of the Aston Martin
brand and its ability to attract consumer demand.
Improvements to the Aston Martin customer
journey have also driven significant retail rewards.
In a welcome shift, sales from dealers to customers
were greater than wholesales for both our Sport/
GT cars and luxury SUVs, as the business aligned
supply to demand. Operating as a true luxury
brand, dealer stock is now at optimum levels.
The introduction of a best-in-class online
configurator tool in July has enhanced the enquiry
and ordering process for customers and led to
dealer leads being trebled, as Aston Martin
embraces new audiences and capitalises on the
trends of personalisation and digital connectivity
so revered by today’s luxury consumer.
More than 13,000 users visited the configurator
on launch day, with 2,500 sales leads generated
within just three months of its launch.
The one-off Aston Martin Victor is
an example of the brand’s ability to
create truly bespoke, individual sports
cars through the ‘Q by Aston Martin –
Commission’ offering
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
007
“ For more than a century,
Aston Martin has been
defined by peerless
performance and sports
cars of unparalleled
beauty and refinement.
My consortium members
and I have invested in
Aston Martin to ensure
that the excellence that
has defined our products
will now extend to how
we run our business.”
LAWRENCE STROLL
EXECUTIVE CHAIRMAN OF
ASTON MARTIN LAGONDA
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 08
“In 1913, Lionel Martin and Robert
Bamford teamed up with an idea. To
race cars and use what they learnt to
make exquisite British sports cars.109
years later, everything has changed.
And yet nothing has changed.”
TOBIAS MOERS
CEO OF ASTON MARTIN LAGONDA
Our growth in the luxury SUV segment was
another global success. In its first full year of
sales, the DBX model has already gained an
estimated 20% market share and will be further
strengthened by new derivatives. The first of these,
DBX Straight-Six, was launched on schedule
in 2021, whilst development of the second
derivative, DBX707, the world’s most powerful
luxury SUV, culminated in the car’s global launch
in February 2022.
Aston Martin’s renown for creating unique
Special models for its VIP customers continued
in 2021 through the launch of the Aston Martin
Valhalla hybrid supercar, named ‘Design of the
Year’ at the 2021 Automobile Awards for its
functionality and beauty. The successful activation
of the Valhalla global tour has brought the car to
prospective customers through a series of intimate
VIP events in each of our largest markets.
November saw the first Aston Martin Valkyrie
programme cars completed, with the start of
deliveries to customers in December marking the
summit of our pioneering hypercar programme,
which has pushed new boundaries in British
engineering mastery.
The first true Formula OneTM car for the
road, Aston Martin Valkyrie is an example of
Aston Martin’s utilisation of cutting-edge F1TM
technology, a synergy which has been cemented
in 2021 through the brand’s return to the pinnacle
of motorsport with the Aston Martin Cognizant
Formula One™ Team. Increasing brand desirability
and relevance, the partnership has brought Aston
Martin to a passionate worldwide audience during
the most thrilling F1TM season in decades.
50% of Aston Martin end customers are now
newcomers to the brand, and this appetite to
expand Aston Martin’s fiercely loyal customer base
has benefited from a tailored approach to increasing
our market share in key international markets.
In 2021, strengthened regional leadership
has developed and expanded our network of
dealers, while the successful launch of the first
DBX derivative, Straight-Six, exclusively in our
fastest-growing market of China, demonstrates our
understanding of the local desires of customers
and our ability to match them with the perfect
Aston Martin product. Sales in China grew more
than 206% in 2021.
In our largest market, Aston Martin celebrated
the 70th anniversary of trading in the United States
by putting the brand centre-stage at the Pebble
Beach Concours d’Elegance – one of the most
prestigious luxury automotive events in the world.
Reconnecting with dealers and customers in the
region helped Aston Martin generate unprecedented
excitement, with the highest retail sales for more
than a decade and the Aston Martin Valkyrie Spider
two-times oversubscribed following its successful
launch at Pebble Beach.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
09
LEADING THROUGH INNOVATION
A BREATHTAKING
PORTFOLIO
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 10
Named ‘Design
of the Year’ at the
2021 Automobile
Awards, Valhalla
was commended
for its functionality
and beauty
NEW ADDITIONS
2021 has seen exciting new additions to Aston
Martin’s breathtaking product portfolio.
We celebrated the brand’s return to Formula
OneTM for the first time in more than 60 years
with the new Vantage F1TM Edition, the ultimate
expression of performance and first ever Aston
Martin road car to don the F1TM badging.
The Aston Martin Valkyrie AMR Pro represents
the track evolution of the revolutionary Aston
Martin Valkyrie road car, the bloodline of which
now also includes the stunning open-top Aston
Martin Valkyrie Spider, two-times oversubscribed
following its launch at the Pebble Beach
Concours d’Elegance.
A glimpse into Aston Martin’s future
was provided by the reveal of Valhalla, an
extraordinary, truly driver-focused mid-engine
plug-in hybrid supercar, while the limited-edition
V12 Speedster is a nod to our proud past as well
as our exciting future.
Our growth in the luxury SUV market continues
with the first DBX derivative, Straight-Six, which
was launched to acclaim in Shanghai in November
and is exclusively marketed in China.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 11
Created by bespoke
customisation service
‘Q by Aston Martin –
Commission’, the Aston
Martin V12 Speedster draws
inspiration from both the
brand’s rich racing history
and aeronautical design
Aston Martin Valkyrie made
its highly-anticipated public
debut at the Goodwood
Festival of Speed in July 2021
In its first full year of sales,
DBX claimed an estimated
20% market share of the
luxury SUV segment
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 12
HAVING THE RIGHT PEOPLE IN OUR BUSINESS
WORLD-CLASS
TALENT
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 “We have taken huge strides
in our transformation to become
an engineering-led, technology
and performance-oriented ultra-
luxury carmaker.”
Investing in people has
been a major focus of Aston
Martin’s Project Horizon
transformation
13
A key element of Aston Martin’s future growth strategy
is investing in our people, with the strength of the
brand attracting new talent to complement a world-
class team. In the first full year of new leadership from
our Executive Chairman and Chief Executive Officer,
this focus has been accelerated. Key management
hires have been made throughout the entire business,
spanning operational to commercial functions.
Leadership in key regions has also been
strengthened, including the appointment in
November of a new President of Aston Martin
The Americas, our largest region by sales.
Diversity and inclusion has been a key focus
for the business, with a new ambition to achieve
25% female leadership in our business within
the next five years.
We have taken huge strides in our transformation
to become an engineering-led, technology and
performance-oriented ultra-luxury carmaker.
Since Project Horizon began, nearly two hundred
engineering vacancies have been filled, while the
business has renewed its focus on in-house intellectual
property development, including software and
skills relating to electric vehicles, thereby fostering
engineering excellence within our corporate DNA.
Just as our product performance credibility
benefits from our association with Formula
OneTM, so too does our workplace culture – with
an F1TM-inspired performance mindset being
developed at Aston Martin, harnessing agility,
speed and a winning culture among employees.
The commitment of our dedicated and talented
people has never been more evident than during
the past two years, with our business adapting
to navigate successfully through unprecedented
headwinds caused by the COVID-19 pandemic
and the subsequent changes in ownership
and leadership.
Our 2021 independent employee engagement
survey – which saw 80% participation across our
entire business – highlighted that 86% of Aston
Martin employees are proud to work at the Company,
while strong teamwork attributes were ahead of
external benchmarks.
Increased efforts have been made in 2021
to engage and reward employees. The return
of face-to-face Town Hall events has provided
employees with an opportunity to hear from
leadership about their vision for the Company
and experience our breathtaking product pipeline,
while every employee benefited from free cinema
tickets to experience the brand’s starring role in
No Time To Die, and the chance to win tickets
to the 2021 British Grand Prix.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
14
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 15
LEVERAGING OUR FORMULA ONETM TEAM
AN AUDIENCE
OF MILLIONS
c.70,000,000
Average global TV audience per Grand Prix in 2021*
The launch of the Aston Martin Cognizant Formula
One™ Team has seen our brand return to the
pinnacle of international motorsport for the
first time in more than 60 years.
Shining a spotlight on the brand’s high
performance credentials, F1TM technology has
already been harnessed in our flagship Aston
Martin Valkyrie hypercar, while the new Vantage
F1TM Edition and DBX have enjoyed heightened
global exposure through their new roles as
Official Safety and Medical Cars of F1TM.
*Source: The Nielsen Company
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 16
25%
increase in web traffic on weekends where Aston
Martin supplied the Official Safety and Medical Cars
WWW.ASTONMARTIN.COM
WEB TRAFFIC – AVERAGES
RACE SUNDAY
+15%
NON RACE
SUNDAY
Aston Martin’s return to the starting grid was
one of the big talking points ahead of the 2021
F1TM season and has helped generate significant
brand awareness, relevance and desirability for
Aston Martin at a time when the sport is enjoying
rising global popularity, thanks to worldwide
broadcasting and the hit Netflix documentary
series Drive to Survive.
Highlights on the track for the team included
four-time F1TM world champion Sebastian Vettel
claiming his maiden podium in Aston Martin
racing green at the Azerbaijan Grand Prix in
June, while off the track, Aston Martin welcomed
more than 300 customers and prospects at 11
events throughout the thrilling 2021 season.
The partnership has also created a powerful
platform for Aston Martin to connect with
its customers and regions globally, with the
Aston Martin brand brought to life in top-tier
Grand Prix events in some of the world’s most
iconic cities.
RACE SUNDAY
AND ASTON
MARTIN
SAFETY AND
MEDICAL CARS
+25%
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 17
Sebastian Vettel celebrates
after taking his first podium
for Aston Martin at the 2021
Azerbaijan Grand Prix
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 18
EXECUTIVE CHAIRMAN’S STATEMENT
DELIVERING
ON PROMISES
LAWRENCE STROLL
EXECUTIVE CHAIRMAN
“The evidence is there
that our strategy is
working, and it is a very
long time since the core
business was in such good
health as it is today.”
When I became Executive Chairman of Aston
Martin in 2020, we embarked on a journey to
transform the business into one of the greatest
ultra-luxury brands in the world. 2021 has been a
landmark year in our quest to reach that goal and
I am extremely pleased with the progress made
and the pathway forged for Aston Martin’s
future success.
We have already delivered on many of our
promises. Our core business has performed to
plan in its first full year of new leadership, with
our largest number of retail sales made by our
dealers since 2007, despite the challenging global
backdrop of COVID-19.
The evidence is there that our strategy is
working, and it is a very long time since the core
business was in such good health as it is today.
ULTRA-LUXURY MEETS
HIGH PERFORMANCE
The transformational changes made over the
last two years now firmly position our business
between the crosshairs of ultra-luxury and
high performance.
In a major shift, retail sales have exceeded
wholesales, with supply being aligned to customer
demand in the period. Following our successful
destocking of the dealer network – in a quicker
timeframe than was expected – we now hold
optimum stock levels for an ultra-luxury business.
Helped by stronger trading conditions, an
enhanced luxury customer experience and
heightened brand desirability, 2021 has seen
significant growth in the Americas and record
sales in China, with these regions identified as
a strategic focus for our business as part of our
Project Horizon transformation.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
20
EXECUTIVE CHAIRMAN’S STATEMENT CONTINUED
NAVIGATING CHALLENGES
I am proud of how we have navigated our way
through the two major challenges the business
has faced in 2021 – the continued impact of the
COVID-19 pandemic and the complexities of
the Aston Martin Valkyrie hypercar programme
we inherited.
We have continued growing our business
through the pandemic, managing to maintain our
operations while protecting the health and safety of
our employees through diligent working practices.
2021 has also seen us reach the summit of the
era-defining Aston Martin Valkyrie engineering
programme by delivering the first customer cars
and ramping up a quality-focused production.
While adjustments made to our production
and delivery schedule for Aston Martin Valkyrie
in 2021 meant that our Adjusted EBITDA was
lower than we originally planned, this is merely
a timing issue, and our VIP customers are eagerly
awaiting these unique cars.
PRODUCT PIPELINE
Our journey to becoming a leading ultra-luxury
brand will be accelerated by the stunning pipeline
of product heading to our dealers’ showrooms.
While 2021 saw the launch of Valhalla, Aston
Martin Valkyrie Spider and DBX Straight-Six, it
was also a significant year of product development
with the recently launched DBX707 derivative
and V12 Vantage on sale in 2022, and our next
generation of front-engine Sport/GT cars coming
in 2023.
ELECTRIFICATION
The fact that three of the most recent models
we have launched – DBX Straight-Six, Valhalla,
and Aston Martin Valkyrie – all feature hybrid
technology also provides an indication to our
future direction. These models are key steps in our
electrification roadmap, which will see our first
plug-in hybrid electric vehicle (PHEV) launched
in 2024 and the first battery electric vehicle (BEV)
is targeted for launch in 2025.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 21
“Our journey to becoming a leading
ultra-luxury manufacturer will
be accelerated by the stunning
pipeline of product heading to our
dealers’ showrooms.”
LUXURY SUV GROWTH
One of the success stories of 2021 was the
performance of DBX in its first full year of sales.
Our move into the luxury SUV market is a key
strategic growth opportunity for the brand,
broadening the demographic of Aston Martin
customers and adjusting to the needs of today’s
luxury consumer.
Our first-ever SUV is already commanding
an estimated 20% market share of the luxury
SUV segment, a statistic which we expect to
increase in the future with the arrival of exciting
derivatives. The first of these, DBX Straight-Six,
was launched to plan in November 2021, with
the car being successfully marketed exclusively
to our customers in China. This has since been
followed by the global launch of the DBX707,
which has generated industry excitement as the
world’s most powerful luxury SUV.
THE PINNACLE OF MOTORSPORT
On a personal level, one of the proudest
moments of 2021 was to see Aston Martin
return to international motorsport through our
sponsorship of the Aston Martin Cognizant
Formula One™ Team.
At a time when the sport is enjoying rising
popularity, F1™ is a hugely powerful global
platform that is playing a key part in the overall
Aston Martin strategy – increasing our brand
awareness, relevance and desirability, while
accelerating our technological development and
digital transformation.
Based on the hard work and achievements of
2021, I am more assured than ever of reaching our
medium-term objectives of achieving revenues of
circa £2bn and Adjusted EBITDA of circa £500m
by 2024/25.
Of course, this future growth will be driven
by our people. During 2021 we made valued
additions to our Board and Executive, and
upskilled our world-class commercial, technical
and operational teams with new talent, with
almost 20% of employees new to the business.
The transformation of Aston Martin is the
most exciting project happening in the automotive
industry this decade, and I thank all our people,
investors and stakeholders for joining us on
the journey.
FUTURE CONFIDENCE
Our progress to date underpins my confidence
in the future, our continued success, and the
potential for the business.
LAWRENCE STROLL
EXECUTIVE CHAIRMAN
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 22
CHIEF EXECUTIVE OFFICER’S STATEMENT
RISING TO
THE CHALLENGE
TOBIAS MOERS
CHIEF EXECUTIVE OFFICER
2021 was a pivotal year for Aston Martin, with
our team rising to the collective challenge of
setting ambitious new standards, elevating our
business, our products and our brand.
While there remains hard work ahead of
us, the last year has provided proof that Aston
Martin can truly unleash its potential to become
the world’s most desirable ultra-luxury British
performance brand.
“While there remains hard work ahead
of us, the last year has provided proof
that Aston Martin can truly unleash
its potential.”
FINANCIAL PERFORMANCE
Strong customer demand for our products led
to substantial volume growth with retails well
ahead of wholesales and this, coupled with strong
pricing dynamics, meant that revenue increased to
£1.1bn. Adjusted EBITDA improved by more than
£200m versus 2020 to £138m or a margin of 13%,
as we begin to see the benefits of the efficiency
actions taken, particularly on manufacturing
costs. The EBITDA margin in Q4 of 18% reflected
strength of trading, Specials deliveries and Project
Horizon efficiencies. Operating losses for the full
year were reduced, despite increased investment
in brand and marketing activities. Free Cash Flow
improved by £416m year on year to an outflow
of £123m and liquidity remained strong, with
year-end cash of £419m.
BUILDING ON PROJECT HORIZON
Project Horizon work has continued in 2021,
consolidating the production lines at Gaydon
to deliver a fully flexible and efficient assembly
line for our Sport/GT cars. We have successfully
implemented similar improvements to the line
at St Athan, with a target to be the most efficient
assembly line for luxury SUVs.
Strategic changes to the way we paint cars has
also driven huge efficiencies, by fully utilising
the capacity of our St Athan paint shop – one
of the newest, and most efficient, in Europe.
Standard colours on all Aston Martin vehicles
are now painted in St Athan, with colleagues at
Gaydon painting all special colours and graphics.
These improvements have contributed to
a 20% manufacturing cost per unit reduction,
with further reductions in operating costs targeted
across our entire product range in 2022.
The consolidation of our paint shops will
also have a long-term reduction in our carbon
emissions, which is an ongoing priority for
the business.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
24
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
OUR TRANSFORMATION PROGRESS
JANUARY
Return to Grand Prix racing
for the first time in six
decades as the Aston Martin
Cognizant Formula OneTM
Team is announced
MARCH
Successfully completed
destocking process to
align supply with demand
for Sport/GT cars
As Aston Martin returns
to F1™, Vantage becomes
Official Safety Car and DBX
Official Medical Car
JULY
Appointment of four
new Non-Executive
Directors signals complete
rejuvenation of the Board
Launch of new industry-
leading online configurator
tool, which generated
2,500 sales leads in its
firs three months
Music video for ‘Clash’ by
Santan Dave and Stormzy
filmed at Gaydon and
Silverstone featuring Aston
Martin Valkyrie, Vantage
F1™ Edition, V12 Speedster
and DBS, generating over
30m views
SEPTEMBER
James Bond film No Time
To Die is released featuring
four iconic Aston Martins –
DB5, V8, DBS and Valhalla
NOVEMBER
The first era-defining Aston
Martin Valkyrie customer
car was completed
DBX Straight-Six, the first
DBX derivative, successfully
launched on schedule at
the Modern Art Museum
in Shanghai
APRIL
Completed consolidation
of production to a single
line at Gaydon, unlocking
operational efficiencies
AUGUST
70th anniversary of Aston
Martin in North America
brought two major product
introductions at Pebble
Beach Concours d’Elegance
– the Valhalla’s US debut and
global reveal of Aston Martin
Valkyrie Spider
Paint shop consolidation
completed, with net saving
of over £1,000 per vehicle
Operational efficiencies
implemented at St Athan
DECEMBER
Valhalla honoured with
‘Design of the Year’ at the
2021 annual Automobile
Awards by a jury of
industry experts
First customer deliveries of
the Aston Martin Valkyrie
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 25
SETTING THE SCENE
The past year has been an opportunity to align
Aston Martin for its future direction. Setting the
scene for the years ahead, we have developed
a clear vision for the business and begun to
establish a culture of operational excellence
and engineering innovation.
With a focus on accelerating our growth and
driving profitability, four strategic pillars have now
been identified for the future, as we focus efforts
on harnessing the power of our iconic global
brand, developing innovative new products,
attracting and retaining world-class talent, and
driving new standards in sustainability.
STRONG DESIRABILITY
I was pleased that our core business delivered
as planned in 2021, achieving over 6,000 core
wholesales in a year of industry-wide supply
chain challenges.
Our financial results demonstrate that
desirability is strong, with new customers being
attracted to Aston Martin and retail sales ahead of
wholesales as we follow our demand-led business
model. We are achieving strong pricing and
closed the year with dealer stock at optimum
levels aligned to our business approach.
ASTON MARTIN VALKYRIE
Our Aston Martin Valkyrie programme is well
underway, having seen adjustments to our delivery
schedule in 2021 due to our quality-focused
approach to delivering these incredible cars to
customers without any compromises, in the face
of supply chain challenges throughout the year
and enormous production complexity.
Despite these timing adjustments, we have
demonstrated a clear focus on quality and execution
and customer excitement for this ground-breaking
car remains unwaning. It has been fantastic to see
this incredible machine, which some sceptics
doubted would ever make it beyond the concept
stage, on the road with our loyal customers behind
the wheel.
PASSION FOR PRODUCTS
One of the most enjoyable aspects of my first full
year as Aston Martin’s Chief Executive Officer
has been meeting our loyal customers and seeing
their passion for our brand and products.
This passion is something we have ignited
amongst new audiences over the last year through
the brand’s presence in Formula One™ and unique
limited-edition performance products like the
two-times oversubscribed Aston Martin Valkyrie
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 26
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Spider, launched in August, and the plug-in hybrid
supercar Valhalla.
Being in Pebble Beach for the high-profile
launch of Spider, I was impressed by the
tremendous demand for this product, and the
sentiment amongst our customers and the
automotive industry that Aston Martin has put
itself firmly back on the radar.
Led by the addition of talented new powertrain
engineers, we have dramatically increased the
electrification skills and resources within our
business, with our first PHEV to be launched
in 2024 and the first fully-electric Aston Martin
targeted for launch in 2025.
By 2030, our Sport/GT and SUV portfolio will
be fully electrified.
SUV EXPANSION
Since I became Chief Executive Officer, a key
objective has been pivoting our business to capitalise
on the global demand for luxury SUVs. This is
something we’ve made significant headway on in
2021, with DBX commanding an estimated 20%
share of the luxury segment in its first full year
of sales.
Adding to the V8 DBX launch model, we
seamlessly launched the Straight-Six mild hybrid
exclusively in China in November 2021 and in
February 2022 unveiled the world’s most powerful
luxury SUV, DBX707, the first of a long line of
new products I have personally had engineering
influence on and overseen through the product
development cycle.
Feedback from customers and the industry has
been incredibly positive, boosting my belief that
we can truly disrupt this segment with benchmark-
setting Aston Martin products.
LEADERSHIP CHANGES
A key achievement of the last year has been
attracting more world-class talent to complement
our team at Aston Martin, with more than 300 new
employees welcomed to the Company in 2021.
This has included the arrival of 20 senior
directors, with a wealth of expertise spanning
research and development, design, procurement
and supply chain, manufacturing operations &
quality, marketing and communications, global
sales, legal, and finance.
I believe we now have a fantastic team in
place to accelerate our vision for the Company
and execute on our strategic growth plans.
EMBRACING ELECTRIFICATION
A key element of our future innovation strategy
is the development of Plug-in Hybrid Electric
Vehicles (PHEV) and Battery Electric Vehicles
(BEV), with the past year seeing hybrid technology
harnessed in Aston Martin products for the first
time through delivery of the Aston Martin Valkyrie
and DBX Straight-Six.
SUSTAINABILITY
Beyond Aston Martin, a key issue of global
awareness this year has been climate change,
with the UN Climate Change Conference
underlining the urgent need for further action
to reduce greenhouse gas emissions.
As a responsible business, this is a call we
cannot ignore. While electric vehicles have a
key role to play, it is important we are thinking
even bigger, with a need to embed sustainability
principles and practices within not just our product
strategy but also our business strategy.
I am therefore incredibly proud that 2021 has
seen Aston Martin join the Science-Based Targets
initiative (SBTi), making a long term commitment
to a net-zero future for the business.
This is one central objective of our new
Environmental, Social and Governance (ESG)
strategy, which has been developed with the
passionate support and input of many employees
across the business.
FUTURE GROWTH
As we reflect on 2021, the efficiency and profitability
actions taken this year can be seen directly in the
growth of our core business and in the results we are
reporting. 2022 will see an even greater impact, with
further cost savings, plus significant volume growth
from new product launches, as core wholesales
are expected to increase by c.8%, driving a c.50%
improvement in Adjusted EBITDA from the core
business in 2022.
With a full calendar year of Aston Martin Valkyrie
deliveries to come, along with the impact from
our successful marketing of DBX Straight-Six and
DBX707, 2022 promises to be a year of growth.
While there will be challenges, our business
has never been better prepared to meet them.
I thank you for your continued support and trust
in our brand.
TOBIAS MOERS
CHIEF EXECUTIVE OFFICER
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
27
LET’S LIFT THE
BONNET ON OUR
BUSINESS...
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 28
ASTON MARTIN AND THE LUXURY MARKET
MARKET MOMENTUM
FIVE YEAR GROWTH FORECASTS BY WEALTH BAND BY GEOGRAPHY
LATIN AMERICA
MIDDLE EAST
NORTH AMERICA
AUSTRALASIA
EUROPE
ASIA
%
9
3
2
7
%
2
3
%
4
9
%
4
0
%
%
6
4
33%
25%
41 %
AFRICA
27 %
World
3
4
%
2
5
%
25%
29%
24%
33%
4 %
3
7 %
2
RUSSIA
LEGEND
HNWIs
UHNWIs
663,483
Forecast global UHNWI population in 2025
27%
Source: Knight Frank Wealth Report 2021
Forecast growth in UHNWIs between 2020 and 2025
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 29
ASTON MARTIN MEGATRENDS
MEGATREND
THE ISSUE/OPPORTUNITY
WHAT WE’RE DOING
THE GLOBAL
LUXURY MARKET
Growth in the global market
for luxury goods as the world’s
UHNW population increases
MARKET
EXPANSION
Expand Aston Martin’s brand
presence and market share in
established markets with high
wealth density such as the USA,
and rapidly expanding markets for
luxury cars such as China
PERSONALISATION
AND
CUSTOMISATION
Rising demand for unique and
bespoke personalised products
amongst luxury consumers
COVID-19
PANDEMIC
VEHICLE
ELECTRIFICATION
Ongoing impact of the COVID-19
pandemic on business operations
and changes to customer
behaviours
Transition away from the internal
combustion engine to a range of
technologies that use electricity to
propel vehicles, including plug-in
hybrid electric vehicles (PHEV) and
battery electric vehicles (BEV)
SUSTAINABILITY
Accelerating need for all
businesses to act on climate
change in an effort to restrict the
rise in global average temperatures
to 1.5°C by 2100
1. Source: Knight Frank Wealth Report 2021
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Operating as an ultra-luxury brand aligning demand to supply,
destocking our dealers, and embracing a build-to-order
business model
Investing in our brand and international marketing to appeal to
luxury consumers
Strengthening regional leadership to deliver our strategic growth
plans for key markets
Reconnecting with dealers and customers in the USA through
Aston Martin’s highest-profile presence at the iconic Pebble
Beach Concours d’Elegance
Expanding our dealer network into new markets
Expanding our SUV portfolio to cater for the global desires of customers
Launching market-exclusive derivatives like the DBX Straight-
Six in China that match the local demands of customers with a
bespoke Aston Martin product
Growing our brand awareness and desirability through the
global platform of Formula OneTM
Offering ‘Q by Aston Martin – Commission’ – our ultimate
bespoke personalisation service, providing our customers the
ability to personalise their Aston Martin beyond the scope of the
core option range, and even commission their own unique model
Launching special, limited-edition products for our most
distinguished customers, including our era-defining
hypercar Aston Martin Valkyrie, hybrid supercar Valhalla and
V12 Vantage, thereby increasing the average selling price of
our products
Launching our online configurator, enabling customers to personally
select their own unique specification for each Aston Martin model
Maintaining our production and business operations through
diligent workplace practices including on-site COVID-19 testing
Strengthening our liquidity position to protect the business
during times of economic uncertainty
Expanding our online presence to cater for the changing needs
of customers, through new services like our online configurator
Signing our enhanced technology agreement with Mercedes-
Benz AG, providing access to advanced technologies
Investing in electrification skills across our business
Recruiting new talent, including a new team of highly-skilled
powertrain experts
Introducing hybrid technology through our products such as
Aston Martin Valkyrie and DBX Straight-Six
Preparing to deliver our first PHEV, Valhalla, in 2024 and
targeting the launch of the first Aston Martin BEV in 2025
Creating our new ESG strategy with ambitious commitments to
become a world-leading sustainable ultra-luxury automotive business
Progressing our electrification roadmap with the introduction of
electrified powertrains
Making a signed commitment to the Science Based Targets
initiative (SBTi) Net-Zero Standard
Powering our UK manufacturing operations with 100% certified
renewable energy
Exploring use of recycled and sustainable materials in our products
STATISTICS
27%
expected growth of UHNW
households globally
2020-2025
24%
proportion of UHNWIs in
Asia by 2025, up from 17%
a decade earlier
Asia is already home to
more billionaires than any
other region1
88%
of Aston Martin Valkyrie
orders customised through
our enhanced ‘Q by Aston
Martin – Commission’ service
127,306
COVID-19 tests carried out
by the Company in 2021
2026
all new car lines to have
the option of an electrified
powertrain by 2026 (PHEV
or BEV)
2030
fully electrified Sport/GT
and SUV portfolio by 2030
44%
reduction in emissions
intensity to 2.78 tCO2e
per unit between 2020
and 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 30
BUSINESS MODEL
CREATING FUTURE VALUE
1
2
3
PRODUCT PORTFOLIO
•
PRODUCT DEVELOPMENT
•
•
•
A breathtaking and performance-
driven product portfolio that targets
the ultra-luxury automotive market,
and creates desire, excitement
and individuality in our product
and brand
Portfolio includes the most thrilling
front-engine Sport/GT cars with
assertive styling, dynamics and
exhilarating performance, and
an SUV range that has one of the
world’s fastest and most dynamic
luxury SUVs, representing the
height of design, beauty and style
Our mid-engine range will
define new boundaries within
the hypercar and supercar
segments, delivering unique
design, astonishing levels of
performance and cutting-edge
dynamic capabilities
Cutting-edge innovation and high
levels of in-house engineering
expertise with established
teams for Vehicle Engineering,
Procurement, Powertrain and
Programme Office, while using
a cross functional commodity
structure to foster innovation
Key long term strategic supply
partnerships with Tier 1
suppliers to enhance quality and
technological capabilities
Investment in key technologies that
will be deployed across the entire
model range and Specials
Focused on delivering engineering
efficiencies and material cost
reductions to build products
with clear unique selling points,
outstanding performance and
irresistible character
•
•
•
•
OPERATIONAL EXCELLENCE
Optimised manufacturing
•
operations to establish enhanced
efficiency levels, including
consolidation of paint shops and all
Sport/GT manufacturing into one
centre of excellence at Gaydon,
providing flexibility to support
medium-term volume targets
Transformation projects in
advanced stages to deliver agile
and efficient systems across
Quality, Aftersales, Manufacturing,
Logistics and Site Strategy
Quality structure strengthened with
highly-experienced management
hires throughout the function,
focusing on swift problem resolution
and improved customer satisfaction
Restructuring of supply chain and
logistics framework with key strategic
partners to stabilise the production
line and reduce operational cost
•
•
OUR SUSTAINABLE APPROACH
Electrification of our model range is
fundamental to our product strategy.
We expect to launch our first PHEV by
2024, targeting our first BEV in 2025 and
will have a fully electrified Sport/GT and
SUV portfolio by 2030.
OUR SUSTAINABLE APPROACH
The Aston Martin Valhalla mid-engine
supercar will be built with an all-new
cutting-edge hybrid powertrain,
which utilises a pair of E-Motors –
one mounted on the front axle and the
other on the rear axle. When driven
in EV mode, battery power is directed
exclusively to the front axle, and in
certain situations, 100% of battery
power can be sent to the rear axle,
supplementing with the full force of its
V8 engine for maximum performance.
• New Enterprise Resource
Planning (ERP)/ Product Lifecycle
Management (PLM) and Product
Creation systems that underpin
delivery with start-up agility and
quality that is reliable and durable
OUR SUSTAINABLE APPROACH
We are passionate in moving towards
a better future as demonstrated
by our commitment to the SBTi’s
Corporate Net-Zero Standard.
Through this framework, we will be
setting validated science-based targets
that will deeply reduce our emissions
and counterbalance the impact of any
emissions that remain.
WHAT WE PUT IN
BRAND AND HERITAGE
Iconic ultra-luxury British brand with
over 100 years of heritage, synonymous
with style, performance and exclusivity.
Aston Martin fuses the latest technology,
time-honoured craftsmanship and
beautiful styling to produce its
critically-acclaimed luxury models.
PEOPLE, SKILLS AND INNOVATION
World-class management team
complemented with key management
hires throughout the entire business,
spanning operational to commercial
functions, and a highly-skilled and
flexible manufacturing workforce.
Aston Martin has its own in-house
academy dedicated to training
and up-skilling our manufacturing
technicians, as well as a global online
learning and development platform
for all employees.
EXTENSIVE DEALER NETWORK
Third-party dealership network of
168 dealers across 56 countries at
the year-end, delivering a world-
class luxury customer experience
and consistent brand presentation.
INNOVATIVE PARTNERSHIPS
Carefully chosen strategic
collaborations with partners such as
Mercedes-Benz AG, signed in October
2020, and Racing Point F1TM Team
Sponsorship Agreement, signed in
February 2020, to strengthen and enrich
product excellence, while harnessing
the latest technology in a unique Aston
Martin way to push new boundaries in
British engineering mastery.
WORLD-CLASS SUPPLY BASE
High-quality strategic suppliers
identified and sourced across
multiple platforms.
TRANSFORMATIONAL JOURNEY
Aston Martin is well advanced on its
journey to become one of the greatest
engineering-led, performance-oriented
ultra-luxury brands in the world, having
taken significant steps to deliver high-
performance vehicles, increase brand
and product desirability, and achieve a
more efficient operational footprint.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 31
4
5
GO-TO-MARKET
•
•
•
•
•
Unique products fit for the ultra-
luxury customer segment, offering
one of the broadest product
ranges across the segment
Alignment of supply to demand
of our products, re-establishing a
demand-driven business model
that strengthens the order book and
supports stronger pricing dynamics
Strong global distribution
network in all key growth
markets, fit for our brand
ambition and product portfolio
in the ultra-luxury segment
Bespoke class-leading customer
service, offering an ultra-
luxury blend of physical and
digital experience
Strategic marketing initiatives
to drive new levels of brand
awareness, including Aston
Martin Cognizant Formula
OneTM Team, product launches,
key motoring events, product
placement and media campaigns
OUR SUSTAINABLE APPROACH
In addition to plans to transform
our portfolio over the next decade,
digital customer concierge services
and digital touchpoints are
fundamental to the environmentally
conscious ultra-HLS consumer.
We have already embarked on
this journey by the introduction of
Aston Martin’s best-in-class online
configurator tool, which will help
save a trip to the dealership and
help reduce carbon footprint.
THE VALUE WE CREATE
BRAND
Increasing brand awareness,
relevance and desirability ultimately
increases brand value, which is the
key goal of the Go-To-Market and
Product pillars that underpin our
commercial strategy.
INVESTORS
We are taking significant steps
to de-risk the business, achieve
financial stability and sustainability,
and position Aston Martin for
long term, profitable growth for
our investors.
SUSTAINABLE BUSINESS
We recognise it is time to accelerate
action and escalate our ambition
on tackling climate change, and
we are committed to becoming a
world-leading sustainable ultra-
luxury business. Our ESG strategy
addresses multiple aspects including
a commitment to responsible and
sustainable economic growth and
conducting business in an ethical
and transparent manner.
CUSTOMERS
We have a passionate and
fiercely-loyal customer base,
who experience an emotional
connection with the brand, as
product design, performance and
quality ensure an ultra-luxury,
class-leading unique experience.
WORKFORCE
Investing in people and opportunity
will continue to shape our future.
We rely on the skills and dedication
of a brilliant team: a team we must
keep safe, a team we must support,
and a team we must sustain for
the long term.We are committed
to building a workplace and
culture where our workforce feels
connected and valued, and thereby
enhancing our ability to deliver our
business strategy and objectives.
“I AM ASTON MARTIN”
•
World-class technically-skilled
and highly experienced leadership
team with strong automotive,
luxury, design and engineering
expertise
Key strategic management
hires have been made
throughout the entire business,
spanning operational to
commercial functions
Fostering engineering excellence
and passion within our
corporate DNA
•
•
• Building an F1TM-inspired
performance-driven workforce
culture and mindset, harnessing
agility and speed
Company-wide performance bonus
approach to drive performance
and a consistent “One Team” focus
across the business, embedding
key finance and quality measures
and targets reflecting the
mindset of a performance-driven
ultra-luxury brand
Our ultimate aim to is become a
Best Place to Work
•
•
OUR SUSTAINABLE APPROACH
We recognise the importance to
our people and our business of a
commitment to valuing diversity
and creating an inclusive culture for
all. We are committed to building
a workplace and culture where all
our people feel connected to Aston
Martin’s purpose, that they have a
voice and can develop to reach their
full potential. A diverse workforce
enhances our culture and our ability
to deliver our business strategy
and objectives.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 32
STRATEGIC PRIORITIES
TAKE-OFF INTO A NEW
ERA FOR ASTON MARTIN
2021 was the first full year under new management
chaired by Lawrence Stroll and carefully steered
by our Chief Executive Officer, Tobias Moers.
This leadership has developed a new Vision
and Strategy, focused on change targeted at
every area of the business and building on the
foundations put in place in 2020.
Our Vision is to be the world’s most desirable
ultra-luxury British performance brand,
creating vehicles with the ultimate technology,
precision and craftsmanship that deliver thrilling
performance, and a bespoke, class-leading
customer experience.
To fulfil our ambition of becoming the world’s
most desirable ultra-luxury British performance
brand, we are:
• adapting to customer needs and desires;
• responding to rapid market and
environmental changes, opportunities and
business requirements;
• anticipating and creating market
opportunities, not simply seeking market
share; and
• creating value for our employees, which will
ultimately lead to increased value for the
market, investors and other stakeholders.
We are now focused on strengthening our
brand and operating at a world-class level
through increased capability, state-of-the-art
technology and modern processes, delivered to
the highest quality.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 33
FOUR KEY PILLARS UNDERPIN OUR STRATEGY:
BRAND
Aston Martin is an iconic, globally-recognised
brand, with a unique position transcending ultra-
luxury and high performance. 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 rich and
prestigious heritage of delivering beautiful,
awe-inspiring vehicles defines Aston Martin as
something truly unique within the automotive
industry. Our brand exposure, perception and
desirability is strengthened by a strong, passionate
and loyal customer base, which has been
significantly increased by the return of Aston
Martin to the Formula OneTM grid for the first
time since 1960.
PRODUCT INNOVATION
Our cars sit solely within the ultra-HLS car market
segment, which is underpinned by award-winning
design and engineering capabilities and access
to world-class advanced technology, supported
by our strategic relationships with key partners.
We have a breathtaking, distinctive and
comprehensive core portfolio of front-engine Sport/
GT cars and SUVs, and we will soon be entering
the HLS mid-engine market with the launch of a
core mid-engine supercar. This model will draw
on the learning and technology developed by the
era-defining Aston Martin Valkyrie hypercar and
will be available with electrified plug-in hybrid
technology. Electrification of our model range
is fundamental to our product strategy, and we
expect our first fully-electric model to be launched
in 2025, with our Sport/GT and SUV portfolio to
be fully electrified by 2030.
SUSTAINABILITY
The automotive sector is on a journey of radical
transformation, and we are committed on that
journey to transition Aston Martin to a world-leading
sustainable ultra-luxury company. We recognise
it is now time to accelerate action and escalate
ambition, defining the goals we have established
in our new ESG strategy, which addresses multiple
aspects, from adapting our production processes
to reduce our emissions, to investing in our people
and creating a diverse and inclusive workplace that
promotes and attracts the best talent.
TEAM
The Group’s new leadership team has a wealth of
luxury and automotive experience and are focused
on turning around performance. The strength of
the Aston Martin brand continues to attract new
talent to complement the skills of our existing
world-class team.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 34
STRATEGIC PRIORITIES CONTINUED
ACHIEVING OUR STRATEGY
To achieve our strategy, we completed an extensive
transformation programme, Project Horizon, targeted at
every area of the business to drive efficiency and push
Aston Martin into a new era.
Create desire, excitement and individuality in the product and brand
Increase brand value through market-generated intelligence,
from dealerships, customers, suppliers, events
Expand and strengthen our product portfolio with personalised Specials
strategically embedded in our roadmap to becoming an ultra-luxury business
Deliver operational excellence, agility and efficiency
The main tasks for the transformation
programme are set out here and will
help us realise our strategic goals
and reinforce our competitive position
Deliver engineering efficiencies (controlling costs and investment)
and implement technologies and electrification strategy
Establish a secure and structured supply chain and logistics
framework to stabilise the production line and mitigate disruption
Prepare the dealership network for our future product portfolio in the ultra-luxury segment
Achieve financial stability and sustainability
Integrate the new ESG strategy to realise our ambition to
become a world-leading sustainable ultra-luxury business
Become a ‘Best Place to Work’
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 35
PERFORMANCE TARGETS
•
•
•
REACH WHOLESALE VOLUMES
OF C. 10,000 UNITS BY 2024/25
GROW REVENUE TO C.£2BN
BY 2024/25
ACHIEVE C. £500M ADJUSTED
EBITDA BY 2024/25
• SUSTAINABILITY TARGETS
TO BE SET IN LINE
WITH OUR COMMITMENT
TO THE SCIENCE BASED
TARGETS INITIATIVE
• NET-ZERO MANUFACTURING
•
FACILITIES BY 2030
30% REDUCTION IN SUPPLY
CHAIN EMISSIONS BY 2030
•
•
•
•
ALL NEW PRODUCTS TO
DELIVER CONTRIBUTION
MARGINS OF 40%+
NEW-GENERATION SPORTS
CAR WITH ELECTRIC PLUG-IN
HYBRID TECHNOLOGY
LAUNCHED IN 2024
NEW FULLY-ELECTRIC
MODEL TARGETED FOR
LAUNCH IN 2025
FULLY ELECTRIFIED SPORT/
GT AND SUV PORTFOLIO
BY 2030
ACHIEVEMENTS TO DATE
We have achieved an enormous amount to de-
risk the business and position the Company for
long term, sustainable and profitable growth.
We are on track with our transformation into one
of the greatest ultra-luxury brands in the world
with new leadership, partners and products.
We now have low and healthy levels of
dealer inventory – a testament to our shift
to ultra-luxury positioning.
Our strategic shift to a demand-led, ultra-luxury
operating model where retail sales are well
ahead of wholesales is supported by strong
pricing and improved residual values.
We have significantly reduced customer
and retail financing incentives, with savings
reinvested into the business in the form of
Fixed Marketing.
We are investing in product and engineering and
have the most exciting and compelling product
pipeline coming to market, including a new
generation of front-engine Sport/GT cars in 2023.
Paint shop consolidation is now complete,
delivering a more efficient footprint and quality
improvements with c. £1k net savings per vehicle.
We have delivered the first ten Aston Martin
Valkyries – the ultimate F1TM road car.
We have launched a new, class-leading
configurator with improved customer experience,
trebling leads to dealers.
We have signed up to the SBTi Net-Zero
Standard, showing our commitment
to sustainability.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 36
KEY PERFORMANCE INDICATORS
MEASURING OUR PERFORMANCE
FINANCIAL
REVENUE
(£’M)
WHOLESALE VOLUMES
(UNITS)
OPERATING PROFIT/
(LOSS) (£’M)
ADJUSTED EBITDA
(£’M)
NET DEBT
(£’M)
2021
2020
2019
1,095.3
2021
6,178
611.8
2020
3,394
980.5
2019
5,862
2021
2020
2019
(76.5)
(322.9)
(52.0)
2021
2020
2019
(70.1)
137.9
118.9
2021
2020
2019
891.6
726.7
987.6
DESCRIPTION
Revenue measures the appeal
of our brands, our ability to
build and sustain brand equity
and increase market share
through product expansion
DESCRIPTION
This measures sales from
the Company to its dealers,
showing the appeal of our
products across different
segments, as well as actions
taken to right-size dealer and
Company inventories
DESCRIPTION
Operating profit/(loss)
measures our actual, reported
operating profitability
DESCRIPTION
This measures our underlying
operating profitability,
stripping out the impact
of adjusting items from
operating profit/(loss) and
non-cash measures
DESCRIPTION
Net Debt measures the
amount of total indebtedness
at the Company, net of any
cash and cash equivalents
DEFINITION
Revenue is defined in note 2
of the Financial Statements
DEFINITION
Number of vehicles, including
Specials, sold by the Company
to its dealers
DEFINITION
Net revenue, less Cost
of Sales, less all other
operational expenses
(See note 33 of the
Financial Statements)
DEFINITION
Operating profit/(loss) before
depreciation, loss on sale of
fixed assets, amortisation, and
adjusting items
(See note 33 of the
Financial Statements)
DEFINITION
Total value of all current
and non-current borrowings,
inventory repurchase
arrangements and lease
liabilities, less cash and cash
equivalents and cash not
available for short term use
(See note 33 of the
Financial Statements)
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
REMUNERATION LINKAGE
None
REMUNERATION LINKAGE
Represents 7.5% of the Group
scorecard of performance
measures for the annual bonus
REMUNERATION LINKAGE
None
REMUNERATION LINKAGE
None
REMUNERATION LINKAGE
Represents 50% of the
Group scorecard of
performance measures
for the annual bonus
Represents 80% of the
scorecard of performance
measures for LTIP
TARGET
The Company expects to
generate revenue of c. £2bn
by 2024/25
TARGET
The Company expects to
generate wholesale volumes
of c. 10,000 units by 2024/25
TARGET
Not applicable
TARGET
The Company expects to
generate c. £500m Adjusted
EBITDA by 2024/25
TARGET
Not applicable
LEGEND
BRAND
PRODUCT INNOVATION
SUSTAINABILITY
TEAM
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 37
NET DEBT TO ADJUSTED EBITDA
(‘ADJUSTED LEVERAGE’)
FREE CASHFLOW
(£’M)
NON FINANCIAL
HEALTH & SAFETY –
ACCIDENT FREQUENCY
RATE (AFR)
2021
2020
N.M
2019
6.5
2021
2020
2019
8.3
(123.2)
(539.3)
(337.8)
2021
2020
2019
1.01
1.04
1.44
QUALITY – CUSTOMER
PERCEPTION AUDIT
(CPA) QUALITY SCORE
Our intention is to report on this
KPI from 2022
DESCRIPTION
Adjusted leverage measures our
indebtedness compared to one year’s
worth of profitability
DESCRIPTION
This measures the generation and
usage of cash, including the impact of
all investment and financing decisions
DESCRIPTION
The AFR measures work related
recordable injuries or illnesses
(as defined by OSHA)
DESCRIPTION
This is an internal measure of the
quality of each completed car at the
end of the production line
DEFINITION
Net Debt divided by Adjusted EBITDA
over the last twelve months
(See note 33 of the Financial Statements)
DEFINITION
Cash inflow/(outflow) from operating
activities plus the cash used in
investing activities (excluding interest
received) plus interest paid in the
year, less interest received
(See note 33 of the Financial Statements)
DEFINITION
The AFR measure is calculated by the
work related recordable injuries or
illnesses divided by the numbers of
hours worked over a 12-month period
ending on 31 December each year
DEFINITION
The CPA score is determined through
the audit of each car at the point that
it has completed all the production
processes and is intercepted as
it would be handed over to the
outbound transport company
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
REMUNERATION LINKAGE
None
REMUNERATION LINKAGE
Represents 20% of the Group
scorecard of performance measures
for the annual bonus
REMUNERATION LINKAGE
None
REMUNERATION LINKAGE
Quality measures, including CPA
score, represent 15% of the Group
scorecard of measures for the
annual bonus
TARGET
Not applicable
TARGET
The Company expects to turn free
cashflow positive by 2023
TARGET
Ambition for continuous year-on-year
reduction
TARGET
The Company aims to improve CPA
scores for Sport/GT cars and DBX by
c.40% by the end of 2022
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 38
RISK MANAGEMENT
RISK AND VIABILITY REPORT
RISK GOVERNANCE
We manage risks in the pursuit of our strategic
objectives using our Enterprise Risk Management
Framework and System (ERMFS) which provides
the Board, Audit and Risk Committee and the
Executive Committee with a robust assessment
of our principal and emerging risks. The Board
is ultimately responsible for oversight of our risk
management and internal control systems and
determines our risk appetite.
The Board has delegated its responsibility for
monitoring the effectiveness of the Group’s risk
management and internal control systems to the
Audit and Risk Committee. The Committee fulfils
this responsibility by directing and reviewing
the work of executive management and the key
governance functions within the Group, including
the Internal Audit & 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.
HOW WE MANAGE RISK
Our Internal Audit & Risk Management team
maintain the ERMFS and coordinate risk
management activities across the Group leveraging
a network of functional Risk Champions embedded
within the first line of defence (refer to page 114
for an explanation of our three lines of defence
assurance model). Each principal risk has a risk
mitigation plan incorporating management’s
assessment 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 our
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 including horizon scanning
to identify emerging risks; and
• creating formal risk mitigation plans.
Internal Audit provide independent and objective
assurance over the effectiveness of principal risk
mitigation plans to the Audit and Risk Committee.
CHANGES TO ASTON MARTIN’S
RISK PROFILE
The most significant changes to the Group’s
principal and emerging risks in the year were:
• SUPPLY CHAIN DISRUPTION – risk
increasing due to the ongoing pandemic,
continued shortages of semi-conductors
and the impacts associated with Brexit
• PROGRAMME DELIVERY – risk reducing
due to rephasing of Aston Martin Valkyrie
volumes, transition to a phased ERP
implementation and good progress on
the 2022 vehicle programme
• CYBER-SECURITY AND IT RESILIENCE
– risk reducing due to investment in
our Information Security team and
associated controls, including the ERP
implementation project
• CLIMATE CHANGE – new risk with the
Taskforce for Climate-Related Financial
Disclosures activity identifying significant
climate-related risks associated with our
planned transition to EV powertrains,
managing the brand and reputational
impact of continuing to sell Internal
Combustion Engine (ICE) powered vehicles
in the short to medium term and managing
the financial impact of increasing carbon-
related costs
• TALENT ACQUISITION AND RETENTION
– risk increasing due to a progressively
competitive local labour market
• MACROECONOMIC UNCERTAINTY
AND POLITICAL INSTABILITY – risk
reducing due to the less volatile ongoing
impact of COVID-19 on the global
dealer network, supply chain and our
manufacturing operations
The COVID-19 Task Force established in 2020,
comprising senior management from each function,
remained in place through the year and continues
to prioritise the safeguarding and wellbeing of
our employees, contractors, suppliers, customers
and their families. Key activities undertaken in
the year included updating COVID-19 specific
risk assessments, promoting and facilitating safe
and secure remote working, creating Return to
Work Guidelines including the need to conduct
on-site lateral flow testing, and deploying
social distancing measures in accordance with
government guidelines. We continue to consider
the impacts of the pandemic as a risk factor within
each principal risk.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 39
RISK MANAGEMENT GOVERNANCE STRUCTURE
BOARD AND AUDIT AND RISK COMMITTEE
(The Board has delegated oversight of the ERMFS to the 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
• Determine risk appetite
• Review effectiveness of risk mitigation
plans and assurance activity
• Monitor status of risk management
activity and reporting
RISK MANAGEMENT COMMITTEE
• Identifies and assesses new and
emerging risks
• Performs deep-dive reviews of risk
• Meets quarterly and reports to the
Audit and Risk Committee and
Executive Committee
• Ensures risks are managed in accordance
with the Board’s risk appetite
• Champions effective risk management
mitigation plans
• Representation from all functions across
and control across the business
the business
INTERNAL AUDIT & RISK MANAGEMENT
• Coordinates deployment of the ERMFS
• Maintains the Corporate Risk Register
• Presents Board, Audit and Risk Committee and Risk
FUNCTIONAL RISK CHAMPIONS
AND RISK OWNERS
• Responsible for risk management at a functional level
• Maintain functional (bottom-up) risk registers and manage and
Management Committee status updates
develop risk mitigation plans
• Provides resources and training to support risk
• Champion adherence to ERMFS principles and guidance within
management activities
their function
• Evaluates the design and operating effectiveness of risk
• Consider emerging risks and escalate to the Risk Management
mitigation plans
Committee as appropriate
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.
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 and
emerging risks 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 and emerging risks, how they align
to our strategy, example risk factors and the
primary mitigating actions implemented for
each risk during the year ended 31 December
2021. Principal risks change over time as some
risks assume greater importance and others may
become less significant.
We categorise principal risks within one of
the following categories: Strategic, Operational,
Compliance, Climate Change and Financial, and
link each risk to one or more of the key strategies
that underpin our business plan.
RISK CATEGORY
COMPLIANCE
FINANCIAL
STRATEGIC
RISK APPETITE
ZERO TOLERANCE
LOW TOLERANCE
MODERATE TOLERANCE
OPERATIONAL
MODERATE TOLERANCE
CLIMATE CHANGE
LOW TOLERANCE
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 40
RISK AND VIABILITY REPORT CONTINUED
PRINCIPAL RISK SUMMARY
STRATEGIC RISKS
CLIMATE CHANGE RISKS
MACROECONOMIC AND
POLITICAL INSTABILITY
BRAND/REPUTATIONAL
DAMAGE
TECHNOLOGICAL
ADVANCEMENT
CLIMATE CHANGE
LIQUIDITY
IMPAIRMENT OF CAPITALISED
COMPLIANCE WITH LAWS
TALENT ACQUISITION
DEVELOPMENT COSTS
AND REGULATIONS
AND RETENTION
Exposure to multiple political and economic
factors could impact customer demand or
affect the markets in which we operate.
Our brand and reputation are critical in
securing demand for our vehicles and in
developing additional revenue streams.
It is essential to maintain pace with
technological development to meet
evolving customer expectations and
remain competitive.
The impact of climate change could
significantly impact demand for our
vehicles, our ability to sell within certain
markets or have financial consequences
through increased carbon pricing and taxes.
The Group may not be able to generate
The value of capitalised development costs
Non-compliance with local laws or
We may fail to retain, engage and develop
sufficient cash to fund its capital
continues to grow as we invest in and
regulations may damage our corporate
a productive workforce and to develop
expenditure, service its debt or sustain
expand our product portfolio.
reputation and subject the Group to
key talent.
its operations.
significant financial penalties.
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
MODERATE
LOW
LOW
LOW
LOW
LOW
ZERO
MODERATE
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
IMPACT ON BUSINESS
• Global economic slowdown due to
COVID-19
• Unfavourable movement in
exchange rates
• Adverse economic global conditions
could adversely impact our dealer
network or supply chain
IMPACT ON BUSINESS
• Product recall or postponed delivery of
previously-communicated and market-
expected product 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
IMPACT ON BUSINESS
• 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
RISK MITIGATION
• Regular operational and financial reviews
RISK MITIGATION
• Standardised embedded quality
of the business
• Business Plan reset with consideration of
current economic climate mid-pandemic
• Monitoring global market trends to target
areas for future growth
• Routine monitoring of dealer stock levels
to support build-to-demand strategy
procedures (e.g., 300 Call Procedure,
Customer Perception Audit, Parts
Approval Process) to maintain focus on
vehicle quality
• Expanded dealer network and improved
training to ensure delivery of a luxury
customer experience
• Quality-led production ramp up for the
Aston Martin Valkyrie programme
RISK MITIGATION
• Strategic arrangements with key
partners, including the Strategic
Cooperation Agreement with Mercedes-
Benz AG, to provide powertrain and
electrical architecture
• Commodity strategy plans developed
• Development of modular architecture
“Carry Over – Carry Across” approach for
key systems and components
LEGEND
BRAND
PRODUCT INNOVATION
SUSTAINABILITY
TEAM
IMPACT ON BUSINESS
TRANSITION RISKS
• Policy – loss of small volume derogation
status and increased carbon taxes and
import tariffs
• Market – changing customer preferences
towards non-ICE powertrains and an
evolving view of what “luxury” means
to different customer segments
• Technology – disruption from new
technologies and new entrants and the
increased demand for sustainable products
• Reputation – inability to create a credible
sustainability proposition as we manage
the transition from ICE to EV powertrains
PHYSICAL RISKS
• Increased frequency/severity of
extreme weather events causing supply
chain disruption
• Potential increased insurance costs as more
claims are made due to climate-related
physical damage/business disruption
RISK MITIGATION
• Development of our ESG strategy and
the establishment of the Sustainability
Committee to oversee its implementation
• Strategic Co-operation Agreement with
Mercedes-Benz AG providing access to
new powertrain technology
• Investment in R&D to develop PHEV/BEV
powertrain capabilities to enable launch
of our first PHEV in 2024 and targeting our
first BEV launch in 2025
• Investment in R&D to reduce average
fleet greenhouse gas (GHG) emissions
• Forward purchase/pooling of carbon
credits to reduce exposure to carbon-
related financial penalties and taxes
• Sourcing of 100% renewable energy
within our operations
• Committing to the SBTi to establish and
track GHG reduction targets to establish
a credible roadmap to net-zero in our
manufacturing facilities by 2030 and our
supply chain by 2039
• Setting targets with plans to source green
aluminium, reduce water and energy
consumption and reduce waste
IMPACT ON BUSINESS
IMPACT ON BUSINESS
IMPACT ON BUSINESS
IMPACT ON BUSINESS
• Significant leverage levels may inhibit our
• Vehicle sales volumes fall below
• Non-compliance with emissions
• Failure to build the right capabilities
ability to raise additional capital
• COVID-19 impact could result in
lifecycle plans and targets as a result
of the impact of COVID-19 or other
regulations could inhibit our ability
and behaviours in our leadership team
to trade in certain markets
• Failure to engage or equip our teams
reduced demand and a reduction in
macroeconomic factors
• Non-compliance with labour, human
to deliver our strategy or address key
available cash to support the product
• Vehicle pricing and contribution reduce
rights and environmental standards could
capability gaps
development plan
to levels which no longer support
result in financial penalty and/or brand/
• Significant debt servicing requirements
the carrying value of the attributable
reputational damage
reduces cash available to support other
capitalised costs
operational needs
• Uncertainty of “Carry Over – Carry
Across” utilisation on future vehicle
models and derivatives
• Rapidly-evolving climate and
environmental regulations could result
in areas of non-compliance where not
addressed in a timely manner
RISK MITIGATION
RISK MITIGATION
RISK MITIGATION
RISK MITIGATION
• Raising of additional capital through
• Capitalisation policy and procedures
• Vehicle safety certification achieved for
• Remuneration Committee oversight
financing activities
reviewed annually
all markets and small volume derogation
of senior leadership remuneration to
• Daily management review of cash and
• Impairment reviews performed where
status for EU emissions compliance
ensure it is aligned to the strategy and
working capital balances
triggering events have been identified
• Standards of Corporate Conduct
appropriate for staff retention
• Weekly expenditure reviews held with
• Regular vehicle line reviews undertaken
define our activities in relation to key
• Regular review of talent and resource
the CEO and CFO and regular liquidity-
to monitor sales volume and contribution
compliance areas (e.g., anti-bribery
focused Board reviews
performance for all car lines with any
and corruption, whistleblowing, data
risks leveraging succession plans and
employee engagement survey results
• Ongoing transformation activity to deliver
concerns communicated to finance for
protection, equality and diversity,
• Benchmarking of bonus and
targeted cost savings and efficiencies
consideration of potential impairment
business ethics)
• In-house legal and compliance team
that manages ongoing investigations.
attractive to external candidates in a
• Enhanced GDPR and IT general controls
buoyant UK job market
remuneration packages to drive employee
performance and behaviours and remain
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 41
MACROECONOMIC AND
BRAND/REPUTATIONAL
POLITICAL INSTABILITY
DAMAGE
TECHNOLOGICAL
ADVANCEMENT
CLIMATE CHANGE
LIQUIDITY
IMPAIRMENT OF CAPITALISED
DEVELOPMENT COSTS
COMPLIANCE WITH LAWS
AND REGULATIONS
TALENT ACQUISITION
AND RETENTION
Exposure to multiple political and economic
Our brand and reputation are critical in
It is essential to maintain pace with
factors could impact customer demand or
securing demand for our vehicles and in
technological development to meet
affect the markets in which we operate.
developing additional revenue streams.
evolving customer expectations and
remain competitive.
The impact of climate change could
significantly impact demand for our
vehicles, our ability to sell within certain
markets or have financial consequences
through increased carbon pricing and taxes.
The Group may not be able to generate
sufficient cash to fund its capital
expenditure, service its debt or sustain
its operations.
The value of capitalised development costs
continues to grow as we invest in and
expand our product portfolio.
Non-compliance with local laws or
regulations may damage our corporate
reputation and subject the Group to
significant financial penalties.
We may fail to retain, engage and develop
a productive workforce and to develop
key talent.
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
MODERATE
LOW
LOW
LOW
LOW
LOW
ZERO
MODERATE
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
FINANCIAL RISKS
COMPLIANCE RISKS
OPERATIONAL RISKS
IMPACT ON BUSINESS
IMPACT ON BUSINESS
IMPACT ON BUSINESS
• Global economic slowdown due to
• Product recall or postponed delivery of
• Reliance on third parties to
• Unfavourable movement in
expected product delivery could impact
emerging technologies
previously-communicated and market-
support development of new and
COVID-19
exchange rates
customer confidence and loyalty
• Competitors may have better access to
import tariffs
• Adverse economic global conditions
• Dealer network may not be effective
funding to develop new technology faster
could adversely impact our dealer
in raising, maintaining and promoting
and be first to market
network or supply chain
brand awareness
• Changing and more stringent regulations
• Inadequate dealer training in new
may make current technology
products and technologies could impair
obsolete and increase the risk of
the customer experience
future non-compliance
IMPACT ON BUSINESS
• Significant leverage levels may inhibit our
IMPACT ON BUSINESS
• Vehicle sales volumes fall below
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
lifecycle plans and targets as a result
of the impact of COVID-19 or other
macroeconomic 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
IMPACT ON BUSINESS
• Non-compliance with emissions
regulations could inhibit our ability
to trade in certain markets
• Non-compliance with labour, 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
IMPACT ON BUSINESS
• Failure to build the right capabilities
and behaviours in our leadership team
• Failure to engage or equip our teams
to deliver our strategy or address key
capability gaps
RISK MITIGATION
RISK MITIGATION
RISK MITIGATION
• Regular operational and financial reviews
• Standardised embedded quality
• Strategic arrangements with key
of the business
procedures (e.g., 300 Call Procedure,
partners, including the Strategic
RISK MITIGATION
• Development of our ESG strategy and
the establishment of the Sustainability
• Business Plan reset with consideration of
Customer Perception Audit, Parts
Cooperation Agreement with Mercedes-
Committee to oversee its implementation
current economic climate mid-pandemic
Approval Process) to maintain focus on
Benz AG, to provide powertrain and
• Strategic Co-operation Agreement with
• Monitoring global market trends to target
vehicle quality
electrical architecture
Mercedes-Benz AG providing access to
areas for future growth
• Expanded dealer network and improved
• Commodity strategy plans developed
new powertrain technology
• Routine monitoring of dealer stock levels
training to ensure delivery of a luxury
• Development of modular architecture
• Investment in R&D to develop PHEV/BEV
to support build-to-demand strategy
customer experience
“Carry Over – Carry Across” approach for
powertrain capabilities to enable launch
• Quality-led production ramp up for the
key systems and components
of our first PHEV in 2024 and targeting our
Aston Martin Valkyrie programme
RISK MITIGATION
• Raising of additional capital through
RISK MITIGATION
• Capitalisation policy and procedures
financing activities
reviewed annually
• Daily management review of cash and
working capital balances
• Weekly expenditure reviews held with
the CEO and CFO and regular liquidity-
focused Board reviews
• Ongoing transformation activity to deliver
targeted cost savings and efficiencies
• 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
RISK MITIGATION
• Vehicle safety certification achieved for
all markets and small volume derogation
status for EU emissions compliance
• Standards of Corporate Conduct
define our activities in relation to key
compliance areas (e.g., anti-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
RISK MITIGATION
• Remuneration Committee 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 bonus and
remuneration packages to drive employee
performance and behaviours and remain
attractive to external candidates in a
buoyant UK job market
IMPACT ON BUSINESS
TRANSITION RISKS
• Policy – loss of small volume derogation
status and increased carbon taxes and
• Market – changing customer preferences
towards non-ICE powertrains and an
evolving view of what “luxury” means
to different customer segments
• Technology – disruption from new
technologies and new entrants and the
increased demand for sustainable products
• Reputation – inability to create a credible
sustainability proposition as we manage
the transition from ICE to EV powertrains
PHYSICAL RISKS
• Increased frequency/severity of
extreme weather events causing supply
chain disruption
• Potential increased insurance costs as more
claims are made due to climate-related
physical damage/business disruption
first BEV launch in 2025
• Investment in R&D to reduce average
fleet greenhouse gas (GHG) emissions
• Forward purchase/pooling of carbon
credits to reduce exposure to carbon-
related financial penalties and taxes
• Sourcing of 100% renewable energy
within our operations
• Committing to the SBTi to establish and
track GHG reduction targets to establish
a credible roadmap to net-zero in our
manufacturing facilities by 2030 and our
supply chain by 2039
• Setting targets with plans to source green
aluminium, reduce water and energy
consumption and reduce waste
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 42
RISK AND VIABILITY REPORT CONTINUED
OPERATIONAL RISKS
PROGRAMME DELIVERY
ACHIEVING FINANCIAL AND
COST-REDUCTION TARGETS
CYBER SECURITY AND
IT RESILIENCE
SUPPLY CHAIN DISRUPTION
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.
The Group’s size and low volume strategy
may inhibit its ability to deliver targeted
cost reductions, or work within budget
constraints while delivering the planned
vehicle programme.
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 could result in
production stoppages, delays, quality
issues and/or increased costs.
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
RISK MOVEMENT RISK APPETITE
LOW
LOW
LOW
LOW
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
LINK TO STRATEGY
IMPACT ON BUSINESS
• Insufficient funds to support current
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
IMPACT ON BUSINESS
• High levels of complexity across car
lines can drive increased engineering
requirements with associated increased
resource and cash requirements
• Increasing raw material costs
• Instability in the supply base due to
economic volatility
• Ultra-luxury positioning demands the
necessary marketing spend to generate
brand and product awareness to build
desirability and create future demand
IMPACT ON BUSINESS
• Cyber attack resulting in disruption to
operational services, possible data loss
and related business outages
• Legacy systems reaching end of life may
no longer be supported and become
more susceptible to breach
• Insufficient investment in systems and
resource leads to limited protection
with critical vulnerabilities not being
addressed in a timely manner
IMPACT ON BUSINESS
• Suppliers may be unable to meet
delivery schedules due to being in
financial distress
• COVID-19 enforced closures continue
to occur across the supply base
• Raw material shortages (including semi-
conductors) due to increased demand
and global supply chain issues could
impact Aston Martin’s ability to meet
planned production volumes
RISK MITIGATION
• Deployment of an established
programme delivery methodology 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
RISK MITIGATION
• Cross functional team transformation
activity with agreed cost target process
and regular CEO-led cost reviews
• Establishment of bi-monthly
cost- and cash-focused Executive
Committee meetings
• Synergies from leveraging common
commodity strategies across platforms
• Increased focus on supply chain
risk analysis
• Highly-targeted marketing activity with
support from key external agencies to
ensure the necessary return on investment
is obtained from marketing spend
RISK MITIGATION
• Project continuing to deliver a new ERP
system during 2022 to transition away
from end-of-life legacy systems and drive
efficiency within the IT infrastructure
• Enhanced IT general controls for
access management, network
access controls, remote access
(e.g., multi-factor authentication)
and password management
• 24/7 vulnerability monitoring using
security tools including Darktrace,
Sentinel1 and cyber incident
response procedures
RISK MITIGATION
• Teams work closely with suppliers
affected by COVID-19 enforced closures
to mitigate any disruptions
• Cross functional weekly risk reviews with
key departments to identify current supply
issues and actions to resolve
• Supplier scorecards and performance
metrics developed to drive improvement
and encourage best practice
• Internal Customs team established to
manage and mitigate procedural/policy
changes post-Brexit
LEGEND
BRAND
PRODUCT INNOVATION
SUSTAINABILITY
TEAM
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 RISK MANAGEMENT ACTIVITIES IN
2021 AND PLANS FOR 2022
IDENTIFICATION OF RISKS
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 Risk Management Committee.
• Bottom-up – Identification, assessment,
prioritisation, mitigation, and monitoring
of risk across all operational and
functional areas.
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 periodically reviewed by
the Risk Management Committee. The updated
corporate risk register is reviewed and formally
re-evaluated at the half and full year to identify
any changes required to the disclosed principal
risks. These changes and the summary of principal
and emerging risks are then presented to the Audit
and Risk Committee for review and approval.
VIABILITY STATEMENT
43
RISK MANAGEMENT SYSTEM
The Aston Martin ERMFS continues to be
deployed across the Group. This was subject to
an annual review and approved by the Executive
Committee and the Audit and Risk Committee.
The Risk Management Committee met four times
during 2021.
MANAGEMENT ACTIONS
AND DEEP DIVES
The Internal Audit & Risk Management
(IA&RM) 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.
The IA&RM team works with functional Risk
Champions to maintain formal risk mitigation
plans to articulate clearly 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 2021 the following key risk management
activities have been undertaken:
• Four Risk Management Committee meetings
with deep-dive risk reviews covering:
– talent acquisition and retention
principal risk;
– supply chain disruption principal risk;
– fraud risk assessment; and
– climate change emerging risks and
opportunities (refer to the TCFD Report
on pages 54-59).
• Climate risk and opportunity workshop
undertaken to develop a qualitative
assessment of the impact of climate change
on the business in a 1.5oC, 2oC and 4oC
warming scenario.
• Cyber Security Management System
implementation project commenced.
• Twice-yearly formal validation and
approval of corporate and functional
risk registers.
• Executive Committee review and
agreement of the Group’s principal and
emerging risks.
• Annual review of ERMFS.
The following principal risk reviews have been
included within the 2022 Internal Audit plan:
• Cyber security and IT resilience; and
• Programme delivery.
The Directors have carried out a robust review
of the principal risks of the Group, which are set
out on pages 40 to 42, 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 2026. This was considered appropriate
by the Directors because it aligns with the 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.
The assessment includes the costs anticipated in
relation to our strategy and our views of the impact
of climate change (see note 1 of the Financial
Statements). 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:
• A severe but plausible reduction in sales
volumes as a result of factors such as a
material reduction in the size of the luxury
market due to external factors (such as a
decrease in demand from High Net Worth
Individuals, 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 sterling:dollar
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 the 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.
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 timeframe.
The Directors have assessed the viability of the
Group over the five-year period to 31 December
2026 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 2026.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
44
STAKEHOLDER ENGAGEMENT
ENGAGING OUR STAKEHOLDERS
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.
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 adjacent table and
throughout this Report.
WHAT MATTERS
TO THEM?
• Quality and safety of products
• Car design and performance
• Environmental commitment
• Brand strength
• After-sales service
• Cost of ownership
HOW WE ENGAGE
AT BOARD LEVEL
• Executive Chairman and Chief Executive
Officer at promotional events for VIP
customers such as Pebble Beach and
Goodwood Festival of Speed
• Ongoing engagement by senior
management with key members of press
• Job Security, personal development and
career opportunities
• Health and Safety
• Engagement
• Feeling valued
• Reward and benefits
• Diversity and inclusion
• Environment and social responsibility
• Roundtables between CEO,
CFO and COO and employees
• People Forum
• Employee Townhalls
• Skip Level Sessions
• Consultation on employee benefits
• Trade Union Business Review
• Health and Safety Review
• COVID-19 Task Force
HOW WE
ENGAGE ACROSS
THE GROUP
OUTCOMES OF
ENGAGEMENT
• Events, such as Valhalla global tour
• Launch of market-leading configurator
• Product-led campaigns such as DBX film
• Talent-led campaigns such as Dave/Stormzy
• F1TM customer hospitality
• Global premiere of James Bond film
No Time to Die, featuring four different
Aston Martin cars
• Engagement with automotive and
lifestyle press
• Leveraging Aston Martin content across
social media channels
• Global I AM Engaged employee survey
• Focus groups supporting the co-creation
of our I AM culture and to deep dive
engagement topics
• Aston Martin internal communications
platform and AM People newsletter
• Aston Martin’s Diversity and Inclusion
Working Group
• Local Health and Safety Committees
• Online hub for topics important to
employees: e.g. COVID-19, Wellbeing,
Working from Home
• Local Trade Union Meetings
• 50% of customers new to brand
• Double digit uplift in traffic to Aston Martin
website over F1TM race weekends
• Aston Martin Cognizant F1TM team
connecting the brand with a highly engaged
audience, with c. 2.8 billion impressions
since March 2021
• Employee feedback from the I AM
Engaged survey has shaped both our
Company level engagement priorities
and driven action planning globally to
improve the employee experience
• Development of our core values
and behaviours
• Reduced need for variable marketing
• Development of our 5-year D&I priorities
support to dealers, with 4x reduction in
variable marketing spend over prior year
• Brand equity research shows increasing
brand perception and buying intent among
luxury car buyers, particularly in China
and USA
and plan
• Implementation of the all-employee
bonus scheme
• Embedding safety at every level of our
operations team
• Employees connected to our Showroom
• Increased sales
of the Future
DEALER NETWORK
SUPPLIERS AND
LOCAL COMMUNITIES
INVESTORS
Our third-party dealerships 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.
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.
Building positive relationships with those we
Continued access to capital is vital to the long-
impact enables us to maintain trust and to
term performance of our business. Our focus
support our communities.
is to ensure investors understand our strategy,
performance, ambition and culture and for us
to understand their priorities.
• Brand strength & Company support
• Responsible procurement, trust, ethics
• Trust and ethics
• Programs to identify & support increased
and open dialogue
• Safety
• Delivery of the Company’s strategy
• Financial performance
sales opportunities
• Operational improvement
• Sustainability and non-financial
• Sustainability
• Increased customer satisfaction & retention
• Competitiveness
targeting ultra-luxury segment
• Dealer profitability
• Strong relationships
• Financial performance
performance including environmental
• Governance and transparency
impact of our products
• Confidence in the leadership
• Career opportunities for members of the
• Stability and predictability,
• Building capability and expertise
• Design and technical expertise
local community
• Local operational impact
with no surprises
• CEO and Board engagement to strengthen
• Strategic Cooperation Agreement
• The Board is very supportive of our projects
• Webcasts, presentations and meetings
dealer relationships and support demand
with Mercedes-Benz AG securing
with local communities, however face-to-
by the Executive Chair, CEO, CFO and
driven strategy
access to technologies critical to our
face engagement opportunities have been
Director of Investor Relations
• Attendance (physical or virtual) at local
long-term plans
limited during the pandemic
dealer conferences held during the year
• Sponsorship of Aston Martin Cognizant
• Gaydon site visit for analysts and large
investors held in November, to showcase
the efficiency work undertaken
• Strengthening of central and regional
senior management, supporting closer
dealer relationship
F1TM team 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 and Aston Martin
Valkyrie Spider
• Dedicated Supplier Quality
Development team manages supplier
quality and performance
• Roll out of dealer network programmes
• Roll out of the new Responsible
• Outreach programmes with local schools
• Focussed investor relations programme
to monitor performance aligned to
Procurement Policy with our suppliers
near our Gaydon and St Athan factories,
delivered both remotely and in person
increased brand standards and sales growth
as part of our ESG strategy
delivered remotely during the pandemic,
• Retail shareholders engaged via direct
opportunities
• Supply chain champions working closely
whereby Aston Martin apprentices promote
communications, our website, press
• Transfer of Aston Martin Academy Training
with suppliers to resolve ongoing issues
STEM career choices for young people
activities, Annual Reports and Annual
General Meetings (AGM)
• For more information see our
Governance Report on page 88
programmes into virtual class delivery,
• Commodity Team structure established
together with upgrade of eLearning courses
and being used effectively
• Upgrade within digital platforms,
• Supplier risk meeting cadence working
supporting increased engagement and
cross-functionally to mitigate potential
elevated brand representation
risks to production
• Collaboration with suppliers to deliver
innovation and economic improvement
• Using supplier scorecards to identify
areas for performance improvement
• Positive dealer sentiment with increased
• Improved supplier relationships that
• Whilst outcomes in this area are not easy
• Shareholders have provided valuable
new and pre-owned sales, leading to a
promote a culture of collaboration
to measure, Aston Martin takes a long term
feedback in relation to the trading of the
significant reduction in year-end inventory
and innovation
approach and will be looking to increase
Company’s shares and bonds
• Increased dealer profitability, with over
• Better understanding of Aston Martin
our engagement in 2022, as pandemic
• Long term shareholders remain
81% of reporting dealers recording positive
supply chain issues and how to resolve
restrictions are eased, including an Early
supportive of the Company’s strategy
and learn from previous issues
Careers recruitment drive launching in H1
• Key shareholders have increased their
return-on-sales
• Higher rate of online enquiries
positions in recent months
• Commodity teams now incorporate the
required departments to aid the effective
progression of design and sourcing
• Supplier Risk Meetings working
at identifying issues and
implementing mitigation plans before
it affects production
• Supplier scorecards continue to engage
suppliers in how they are performing to
our standards
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 45
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.
DEALER NETWORK
Our third-party dealerships 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.
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.
LOCAL COMMUNITIES
Building positive relationships with those we
impact enables us to maintain trust and to
support our communities.
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 for us
to understand their priorities.
WHAT MATTERS
TO THEM?
• Quality and safety of products
• Car design and performance
• Environmental commitment
• Brand strength
• After-sales service
• Cost of ownership
• Job Security, personal development and
career opportunities
• Health and Safety
• Engagement
• Feeling valued
• Reward and benefits
• Diversity and inclusion
• Environment and social responsibility
HOW WE ENGAGE
AT BOARD LEVEL
• Executive Chairman and Chief Executive
• Roundtables between CEO,
Officer at promotional events for VIP
customers such as Pebble Beach and
Goodwood Festival of Speed
• Ongoing engagement by senior
CFO and COO and employees
• People Forum
• Employee Townhalls
• Skip Level Sessions
management with key members of press
• Consultation on employee benefits
• Trade Union Business Review
• Health and Safety Review
• COVID-19 Task Force
HOW WE
ENGAGE ACROSS
THE GROUP
OUTCOMES OF
ENGAGEMENT
• Events, such as Valhalla global tour
• Global I AM Engaged employee survey
• Launch of market-leading configurator
• Focus groups supporting the co-creation
• Product-led campaigns such as DBX film
of our I AM culture and to deep dive
• Talent-led campaigns such as Dave/Stormzy
engagement topics
• F1TM customer hospitality
• Aston Martin internal communications
• Global premiere of James Bond film
platform and AM People newsletter
No Time to Die, featuring four different
• Aston Martin’s Diversity and Inclusion
Aston Martin cars
• Engagement with automotive and
lifestyle press
Working Group
• Local Health and Safety Committees
• Online hub for topics important to
• Leveraging Aston Martin content across
employees: e.g. COVID-19, Wellbeing,
social media channels
Working from Home
• Local Trade Union Meetings
• 50% of customers new to brand
• Employee feedback from the I AM
• Double digit uplift in traffic to Aston Martin
Engaged survey has shaped both our
website over F1TM race weekends
• Aston Martin Cognizant F1TM team
Company level engagement priorities
and driven action planning globally to
connecting the brand with a highly engaged
improve the employee experience
audience, with c. 2.8 billion impressions
• Development of our core values
since March 2021
and behaviours
• Reduced need for variable marketing
• Development of our 5-year D&I priorities
support to dealers, with 4x reduction in
and plan
variable marketing spend over prior year
• Implementation of the all-employee
• Brand equity research shows increasing
bonus scheme
brand perception and buying intent among
• Embedding safety at every level of our
luxury car buyers, particularly in China
operations team
and USA
• Increased sales
• Employees connected to our Showroom
of the Future
• Brand strength & Company support
• Programs to identify & support increased
sales opportunities
• Increased customer satisfaction & retention
targeting ultra-luxury segment
• Dealer profitability
• Responsible procurement, trust, ethics
and open dialogue
• Operational improvement
• Competitiveness
• Strong relationships
• Financial performance
• Building capability and expertise
• Design and technical expertise
• Trust and ethics
• Safety
• Sustainability and non-financial
performance including environmental
impact of our products
• Career opportunities for members of the
local community
• Local operational impact
• Delivery of the Company’s strategy
• Financial performance
• Sustainability
• Governance and transparency
• Confidence in the leadership
• Stability and predictability,
with no surprises
• CEO and Board engagement to strengthen
dealer relationships and support demand
driven strategy
• Attendance (physical or virtual) at local
dealer conferences held during the year
• Strengthening of central and regional
senior management, supporting closer
dealer relationship
• Roll out of dealer network programmes
to monitor performance aligned to
increased brand standards and sales growth
opportunities
• Transfer of Aston Martin Academy Training
programmes into virtual class delivery,
together with upgrade of eLearning courses
• Upgrade within digital platforms,
supporting increased engagement and
elevated brand representation
• Strategic Cooperation Agreement
with Mercedes-Benz AG securing
access to technologies critical to our
long-term plans
• Sponsorship of Aston Martin Cognizant
F1TM team 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 and Aston Martin
Valkyrie Spider
• Dedicated Supplier Quality
Development team manages supplier
quality and performance
• Roll out of the new Responsible
Procurement Policy with our suppliers
as part of our ESG strategy
• Supply chain champions working closely
with suppliers to resolve ongoing issues
• Commodity Team structure established
and being used effectively
• Supplier risk meeting cadence working
cross-functionally to mitigate potential
risks to production
• Collaboration with suppliers to deliver
innovation and economic improvement
• Using supplier scorecards to identify
areas for performance improvement
• The Board is very supportive of our projects
with local communities, however face-to-
face engagement opportunities have been
limited during the pandemic
• Webcasts, presentations and meetings
by the Executive Chair, CEO, CFO and
Director of Investor Relations
• Gaydon site visit for analysts and large
investors held in November, to showcase
the efficiency work undertaken
• Outreach programmes with local schools
near our Gaydon and St Athan factories,
delivered remotely during the pandemic,
whereby Aston Martin apprentices promote
STEM career choices for young people
• Focussed investor relations programme
delivered both remotely and in person
• Retail shareholders engaged via direct
communications, our website, press
activities, Annual Reports and Annual
General Meetings (AGM)
• For more information see our
Governance Report on page 88
• Positive dealer sentiment with increased
new and pre-owned sales, leading to a
significant reduction in year-end inventory
• Improved supplier relationships that
promote a culture of collaboration
and innovation
• Increased dealer profitability, with over
• Better understanding of Aston Martin
81% of reporting dealers recording positive
return-on-sales
supply chain issues and how to resolve
and learn from previous issues
• Higher rate of online enquiries
• Commodity teams now incorporate the
• Whilst outcomes in this area are not easy
• Shareholders have provided valuable
to measure, Aston Martin takes a long term
approach and will be looking to increase
our engagement in 2022, as pandemic
restrictions are eased, including an Early
Careers recruitment drive launching in H1
feedback in relation to the trading of the
Company’s shares and bonds
• Long term shareholders remain
supportive of the Company’s strategy
• Key shareholders have increased their
positions in recent months
required departments to aid the effective
progression of design and sourcing
• Supplier Risk Meetings working
at identifying issues and
implementing mitigation plans before
it affects production
• Supplier scorecards continue to engage
suppliers in how they are performing to
our standards
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 46
SECTION 172 STATEMENT
The table below sets out where further information can be found on how the Board has exercised
its duties in line with s.172.
STRATEGIC REPORT
PAGE GOVERNANCE REPORT
PAGE
SECTION 172
RESPONSIBILITIES
(a) Likely consequences
of long term decisions
(b) The interests of the
Group’s employees
(c) Developing the Group’s
business relationships with
suppliers, customers and others
Executive Chairman’s Letter
18 Report of the Audit Committee
CEO’s Statement
Business Model
Key Performance Indicators
Risks and Uncertainties
Viability Statement
Business Model
Purpose
ESG
22 Board Activities
30 Going Concern
36
38
43
30 Division of Responsibilities
1 Directors’ Remuneration Report
48 2022 Directors’
Remuneration Policy
Stakeholder Engagement
44 Report of the Audit Committee
Employee Engagement
65 Purpose, Values and Culture
Diversity and inclusion
64 Employee Engagement
Gender Pay Gap Report
62 Diversity and Inclusion
Purpose, Values and Culture
64 Gender Pay Gap Report
www.astonmartinlagonda.com
Business Model
30 Stakeholder Engagement
ESG
Stakeholder Engagement
(d) The impact of the Group’s
ESG
operations on the community
and the environment
Climate Change Risks
TCFD Disclosures
(e) Maintaining high standards
ESG
of business conduct
Non-Financial
Information Statement
Modern Slavery
48
44
48
40
54
48 Board roles
70 Governance Framework
69 Purpose, Values and Culture
Whistleblowing
Modern Slavery
Modern Slavery Statement
www.astonmartinlagonda.com
(f) Acting fairly between
members of the Company
Stakeholder Engagement
44 Engagement with shareholders
Board Roles
Shareholder Rights
HOW THE BOARD FULFIL THEIR S.172 DUTIES
HOW THE BOARD
FULFIL THEIR
S.172 DUTIES
Each of the Directors is
aware of their directors’
duties and has received
training on s.172
BOARD
INFORMATION
The Board receives details
of stakeholder engagement
and their interests through
presentations from the
Executive Directors, the
Board papers and direct
and indirect engagement
with stakeholders.
BOARD STRATEGIC
DISCUSSION
s.172 factors are
considered in the Board’s
discussions on strategy,
including how they
underpin the Company’s
long term success. The
Board considers the
quality of information
it has received and
seeks assurance
where appropriate.
BOARD
DECISION
Outcomes of Board
decisions are assessed and
further engagement with
stakeholders is undertaken
where appropriate.
108
97
140
96
115
121
108
90
94
106
92
96
90
90
114
95
92
96
142
Section 172 statement: The Directors have a
duty under s.172 of the Companies Act 2006
to promote the success of the Company for
the benefit of its members. In doing so, they
must have regard to the interests of the
employees, the business relationships with
our suppliers and customers, the impact of the
Company’s operations on the community and the
environment and the desirability of the Company
maintaining a reputation for high standards of
business conduct.
To be able to fulfil their s.172 duty when making
decisions, it is essential that the Directors
understand what matters to our stakeholders.
Details of our key stakeholder groups and how the
business and the Board have engaged with them
during the year are set out on pages 44-45. Much of
the stakeholder engagement by the Company
is carried out at a business level. The Board
receives details of stakeholder engagement and
their interests through presentations from the
Executive Directors and senior management and
the Board papers.
A key responsibility for the newly-formed
Board Sustainability Committee in 2022 will be
overseeing stakeholder engagement on behalf of
the Board. The Committee will receive updates
on stakeholder engagement and report to the
Board on stakeholder engagement activities and
outcomes following each meeting. In addition, the
Directors also engage directly with our investors
(see page 93 for more detail) and our employees.
Board employee engagement is described on
page 94 and will be conducted through Anne
Stevens, our nominated Non-Executive Director for
Workforce Engagement. Site visits also provide an
opportunity for direct engagement with employees.
However, during the year this has been restricted
due to COVID-19.
The Company’s approach to stakeholder
engagement is set out in more detail on page
93. However, the Board recognises that it is not
possible for all of the Company’s decisions to
result in a positive outcome for every stakeholder
interest. By considering the Company’s purpose,
vision and values, together with its strategic
priorities, and the Company’s overriding duty
to promote the success of the Company, it is
anticipated that stakeholders will be able to assess
whether decisions are robust and for the benefit
of the Company as a whole.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 47
THE BOARD’S APPROACH TO S.172
The following strategic decisions taken during the year are intended to provide some insight into the decision-making process at the Company.
BOARD APPOINTMENTS
During the year the Board approved the appointment
of seven new Non-Executive Directors to the Board
which ensured that the Company had the appropriate
required expertise at Board level to support it in its
future ambitions.
INVESTORS
The appointments enhanced the Board’s collective
skills and experience within the automotive and luxury
sectors which will be key in executing the strategy of
the business. Following the July appointments, the
composition of the Board and its Committees were
compliant with the Code and female representation
on the Board (taken as a whole) was just under 30%.
EMPLOYEES
Although this decision had no direct impact on the
Group’s employees, with the addition of the skills and
experience which the new Directors have brought
to the Board, the Executive Committee will be able
to call on this expertise in support of achieving the
strategic targets which the business has set for itself.
STAKEHOLDERS
With the quality and calibre of the individuals joining
the Board and their knowledge and experience of the
automotive and luxury sectors, these appointments
will have contributed to stakeholder confidence in
the Company’s ability to deliver its plans.
REPUTATION
A thorough process was undertaken by a third party
search company to ensure that candidates with the
appropriate and suitable skills and experience were
selected for consideration and ultimately appointed
to the Board to fill the positions.
BOND ISSUANCE
In February the Board approved the issuance of up
to £70 million in gross proceeds of new notes under
the First Lien Indenture dated 16 November 2020.
These notes were US$ denominated 10.50% Senior
Secured Notes, and due for settlement in 2025. With the
trading performance of the existing notes issued under
the First Lien Indenture, this presented an opportunity
to secure additional liquidity at a more favourable rate.
INVESTORS
In securing medium-term financing at more favourable
rates this decision ensured that the Group had additional
liquidity which was considered valuable in the market
environment prevailing at the time of the issuance, given
the ongoing uncertainty due to the impact of COVID-19.
Securing this financing supported the continued
investment in the business and the future product
pipeline to enable the delivery of the strategic goals
set out in the Company’s long-term business strategy.
EMPLOYEES
Although this decision had no direct impact on the
Group’s employees, it did however, improve the liquidity
position for the business and was within the interests
of all employees including those employees who are
also Company shareholders.
STAKEHOLDERS
This decision, which improved the liquidity position of
the business, enhanced the confidence of suppliers and
customers regarding the strength of the balance sheet
and the Company’s resilience, with the Company having
the necessary funds to support its product development
plans and therefore its ability to achieve its medium-
term targets. The additional financing also reduced the
risk of the Company having to raise additional funding
under stressed market conditions and was therefore fully
aligned with the interests of all stakeholders.
REPUTATION
A thorough process was carried out to identify
institutional investors who were able to lend to the
Company, their pricing expectations and the key terms
under which they would lend. An active dialogue was
maintained with all such investors during this process,
which resulted in a competitive financing outcome for
the Company.
NEW ESG STRATEGY
In December the Board approved the new ESG strategy
for the business (as set out on pages 71-75 of this Report)
which aims to establish the Company as a world leading
sustainable ultra-luxury automotive company.
INVESTORS
This decision ensured that the Company has a
comprehensive sustainability strategy which is
both fully aligned to, and integrated into, our wider
corporate strategy and is key to the long term success
of the business. With the increasing investor focus
on companies’ efforts in the area of sustainability, as
part of their ongoing stewardship of their investments,
this will become increasingly important in enabling
ongoing access to capital and to promote the future
success of the business.
EMPLOYEES
With this decision employees can be confident of the
future direction of the Company. This strong message
on tackling both the environmental and social impact
of the organisation will help to attract and retain key
talent, whilst employees can continue to feel proud
of the Company they work for. In addition, by raising
the profile of ESG through the approval of the new
ESG strategy and the formation of a new Sustainability
Committee for senior oversight, this underscored the
importance the Company places on these issues for its
ongoing success.
STAKEHOLDERS
This decision will also look to enhance relationships
with suppliers, who are themselves looking to address
their carbon neutral footprint in these areas, while
at the same time for customers the clear, integrated
ESG strategy will further support the strength of the
brand and differentiation in the long term.
ENVIRONMENT AND COMMUNITIES
This decision will have a direct impact on the
environment and communities as the Company’s
ESG targets will look to reduce its environmental
footprint and contribute to the UK governments
net-zero targets.
REPUTATION
In formulating the ESG strategy a thorough process was
undertaken to review how our investors, stakeholders
and competitors were also engaging in this area to
ensure that the Company developed a credible and
ambitious plan as it transitions into a low-carbon
future. The creation of the new Sustainability
Committee will provide clear focus and oversight
over the implementation of the new ESG strategy
and its targets and broader stakeholder engagement
on behalf of the Board.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 48
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
DESIGNING
THE FUTURE
During 2021 Aston Martin has delivered significant
achievements across all aspects of Environmental,
Social and Governance (‘ESG’). These range
from continuing to keep our employees safe
by pioneering industry-leading best practice
during the pandemic to progressing our work with
organisations such as The Prince’s Trust, which
transforms lives and creates opportunities for
thousands of young people. We also developed
a new ESG strategy that aims to establish Aston
Martin as a world-leading sustainable ultra-luxury
automotive company. This important milestone
was agreed by the Board in December and is now a
key pillar of our wider corporate strategy. To make
sure we are equipped to achieve our ambitious
goals, 2021 saw a significant focus on acquiring
new capabilities and adapting our organisation,
including setting up a new committee of the Board,
the Sustainability Committee, and intensifying
the work of eight dedicated ESG working groups,
covering areas ranging from energy to diversity
and inclusion.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 49
2021 HIGHLIGHTS
ENVIRONMENTAL
SOCIAL
GOVERNANCE
44%
reduction in emissions intensity
to 2.78 tCO2e per unit as
production volumes increased
between 2020 and 2021
10TH
consecutive British Safety
Council Sword of Honour
CHARITY
£500,000 raised for The
Prince’s Trust by auctioning an
Aston Martin Vantage through
the Omaze prize draw
NEW
STRATEGY
New ESG strategy approved
ESTABLISHED
Board Sustainability Committee
POLICIES
9 policies updated including
2 new policies on Anti-Slavery
& Human Traffi king and
Diversity & Inclusion
100%
DECREASE
STEM
Regular engagement with local
schools to promote science,
technology, engineering and
maths as well as careers in
manufacturing
renewable energy powering UK
manufacturing operations
in Accident Frequency Rate from
1.44 in 2020 to 1.01 in 2021
NEW
Strategic Energy Action Plan
to continue to minimise
energy use
92.04%
BELOW
the UK vehicle automotive
manufacturing injury rate average
COMMITTED
24
to the Science Based Targets
initiative (SBTi) Net-Zero
Standard
apprentices graduated from
Aston Martin’s industry-leading
apprenticeship scheme
100%
waste diverted from landfill
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 50
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED
WORKING FOR A BETTER
ENVIRONMENT
Complementary to our work targeting reductions
in greenhouse gas emissions, we have also
intensified our work on reducing and minimising
other environmental impacts. In December 2021,
employees completed a comprehensive waste
streams mapping exercise including a deep-
dive analysis to provide enhanced data on waste
generated by Aston Martin’s production processes
and operations. This enabled improvements to
waste segregation and reduction, as well as the
use of a new online waste management portal
that will allow us to harvest more categorised
data in real time.
Since 2002, the average CO2 emissions from our
cars has fallen by c. 40%1, and we have continued
to drive our progress through ongoing investment
in technology and engineering innovation. In 2024
Aston Martin will launch a next-generation PHEV
followed by our first BEV targeted for launch in
2025, and a fully electrified Sport/GT and SUV
portfolio by 2030. We have also advanced a
number of initiatives that will continue to drive
down the greenhouse gas emissions arising from
our supply chain and how we manufacture our
products. These include exploring the use of green
aluminium alloy and developing a new Strategic
Energy Action Plan. To make sure we build and
execute a robust plan to continue to reduce our
greenhouse gas emissions, we have committed
to set near term and long term Company-wide
emission reductions in line with science-based
net-zero with the SBTi.
“In 2024 Aston Martin will launch
a next-generation Plug-In Hybrid
Electric Vehicle followed by our first
Battery Electric Vehicle targeted for
launch in 2025.”
1 Based on EU retail sales and NEDC data
Aston Martin is investing in
future technologies
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 51
• Set, monitor and strive to meet all
objectives and targets for managing our
environmental performance, including
energy, water and waste consumption,
to ensure strict control over the
environmental aspects of all products,
processes and facilities
• Minimise the impact of the Company’s
activities, products and services on the
environment through effective waste
management, working closely with its
Total Waste Management Contractor
• Give due consideration to environmental
issues and energy performance in
acquisition, design, refurbishment,
location and use of buildings
• Promote sustainable product design
and construction with consideration
from a lifecycle perspective, using low-
carbon and renewable energy resources
wherever possible
• Operate and maintain an environmental
management system in line with
ISO 14001:2015 that is externally audited
annually by accredited auditors
• Communicate our environmental policy
internally and externally, working with
our employees, suppliers and partners
to promote improved environmental
performance and encourage feedback
• Have in place arrangements for potential
and actual environmental incident
investigations and provisions have
been made for the effective control of
contractors’ activities while on Aston
Martin sites
• Measure and review our overall
environmental performance in order to
identify trends. Preventive and corrective
measures will be produced to reverse
adverse trends and move towards
implementing best practice through
continuous improvement
• Review our environmental management
system performance, objectives and
targets and environmental policy
annually to check they are in line with
ISO 14001:2015, that they are appropriate,
and to ensure continual improvement of
the environmental management system
TOTAL GREENHOUSE GAS EMISSIONS
GHG Emissions Under Scope 1 (tCO2e)
6,950.92
8,981.40
9,200.67^
8,705.35^
2018
2019
2020
2021
GHG Emissions Under Scope 2 (tCO2e) –
Location based*
GHC Emissions Under Scope 2 (tCO2e) –
Market based*
GHG Emissions Under Scope 3 (tCO2e)
7,493.70
8,683.50
7,545.86**^
7,366.72**^
5,899.90
13,331.11
3,484.61
8,806.94
687.28**^
192.38**^
6,620.37^
6,446.74^
UK Total Gross Scope (Scope 1 & Scope 2)
14,444.61
17,664.90
16,642.17^
15,984.15^
ROW Total Gross Scope (Scope 1 & Scope 2)
–
–
104.36^
101.82^
Total Gross Scope (Scope 1 & Scope 2)
* 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
17,664.90
14,444.61
16,746.53^
16,085.97^
“ We constantly strive to go beyond
minimising our impact on biodiversity
guided by our Biodiversity Action Plan.”
OUR IMPACT
GREENHOUSE GAS EMISSIONS
Our greenhouse gas emissions for the entire
Group reported here are in accordance with the
Greenhouse Gas Protocol Corporate Standard
for the year to 31 December 2021. These are
monitored throughout the year to enable us
to make continued improvements wherever
possible. The intensity ratio is measured as tonnes
of GHG Scope 1& 2 CO2 emissions per vehicle
manufactured as it reflects the energy intensive
nature of our business and the impact of the growth
of our business on our immediate surroundings.
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 2021 is then used to calculate
the figures.
HOW WE WORKOur Environmental Policy guides all aspects of our approach to the environment, and will be reinforced by our new ESG strategy (see pages 71-75). The core elements of our Environmental Policy are: • Comply as a minimum with all relevant environmental legislation as well as other environmental requirements, while continuing to strive beyond these targets wherever possible• Commit to ongoing reductions in energy, water and other 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 and prepare appropriately. The environmental risk register is reviewed with senior management quarterly and significant risks aligned with the corporate risk registerASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
52
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED
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
2021 is then used to calculate these figures.
Scope 3 – Includes emissions from business
air travel, management car miles, personal car
mileage, employee commuting figures and water.
The DEFRA emissions factor for 2021 is then
used to calculate the figures.
ENERGY EFFICIENCY
Our emissions intensity decreased by 44% to 2.78
tCO2e per unit between 2020 and 2021. This was
mainly driven by a recovery in production levels,
as the total number of vehicles manufactured rose
from 3,343 in 2020 to 5,778 in 2021.
BIODIVERSITY
Aston Martin has a detailed understanding of
biodiversity around six operational sites. The sites
cover a variety of habitats, including species-rich
grassland, hedgerows, trees, drainage ditches
and disturbed ground, all of which have a high
wildlife value. Examples of the wide variety of flora
recorded include yellow sedge (Carex Viridula
Oedocarpa) and bee orchid (Ophrys Apifera).
Species of wildlife that can be found range from
bird species such as the Grasshopper Warbler
(Locustella Naevia) to butterfly species such as
the Common Blue (Polyommatus Icarus).
As well as complying with strict statutory
environmental regulations and best-practice
standards such as ISO 14001:2015, we constantly
strive to go beyond minimising our impact on
biodiversity guided by our Biodiversity Management
Plan and corporate leadership to create net positive
biodiversity gain at our manufacturing facility
locations. For example, we have wilderness areas
with long un-cut grass to encourage wildlife, have
enhanced natural habitats for a range of species
including the creation of protective habitats for our
great crested newts at our Gaydon site, and we
are planning for our own Aston Martin bee hives
in early 2022. Our site at Gaydon is home to a
nature conservation area, which includes a trail for
employees and customers. In 2022 we will update
our Biodiversity Management Plan and explore the
opportunity to align this with the Science-Based
Target Network Action Framework for Nature.
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
2018
6,432
1.08
1.17
2019
6,176
1.45
1.41
2020
3,343^
2.75^
2.26^
2021
5,778^
1.51^
1.27^
TOTAL ENERGY CONSUMPTION WITHIN ORGANISATION
Electricity (MWh)
Gas (MWh)
Diesel (MWh)~
Gasoline (MWh)
LPG (MWh)
UK Total Consumption
ROW Total Consumption
2018
2019
2020
2021
26,472.94
33,733.53
33,973.01 32,144.15**^ 34,506.66**^
43,923.02^
44,796.00^
43,574.51
–
14.92
4.34^
72.93^
3,236.56
2,712.98
1,779.25^
2,450.28^
–
563.60
43.52^
Nil^
63,433.03
80,839.02
78,573.14^
80,952.90^
–
–
194.11
230.96
81,183.86
78,767.26
Total (MWh)
~ 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
80,839.02
63,433.03
PRODUCT SAFETY
Product Safety is among our top priorities when
developing our vehicles, with the safety of both
our customers and other road users in mind.
The safety features installed in our vehicles are
developed to enable the highest standards of
performance without compromising safety.
All our products are compliant in all markets
in which they are sold. Certification is achieved
respecting the applicable requirements in each of
the respective countries or markets. The vehicle
certification in each of the respective countries
is maintained and supported by our conformity
of production activities.
PRODUCT SUSTAINABILITY
We continually look to make improvements to the
CO2 footprint of our products, while 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.
We are targeting to launch our BEV in 2025.
All new car lines will have the option of an
electrified powertrain by 2026 (PHEV or BEV).
By 2030, our Sport/GT and SUV portfolio will
be fully electrified, and we expect more than
90% of the cars we sell to be PHEV and BEV.
Whilst developing alternatives to the internal
combustion engine, we may continue to make
some vehicles based on customer demand.
WASTE MANAGEMENT
The management of Aston Martin’s waste is
governed by a stringent regulatory framework
and we operate in line with best practice industry
standards such as ISO 14001:2015 Environmental
Management Systems. Over recent decades we
have continued to focus on reducing waste as
part of a wider commitment to minimising our
impact on the environment. This has enabled
Aston Martin to continue to successfully divert
100% of our waste from landfill.
Our Waste Working Group has delivered
a number of critical actions during 2021 to
make sure we are equipped to achieve a step-
change in waste management performance
going forward. In 2021, our Environment Team
completed a comprehensive waste streams
mapping exercise, including a deep dive analysis
to provide enhanced data on waste generated
by Aston Martin’s production processes and
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
operations. This has enabled improvements to
waste segregation and reduction, as well as the
use of a new online waste management portal
that will allow us to harvest more categorised
data in real time and, backed by new KPIs, will
enable more agile decision-making to achieve
our objectives.
Other key elements of our ongoing drive
towards reducing waste include rigorous internal
and external audits, employee training and
sustainable procurement.
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.
During 2021, our dedicated Water Working
Group developed a Water Savings Opportunities
Action Plan, which is now being implemented
across our operations. The Action Plan sets out
new KPIs based on a more holistic suite of baseline
data and a range of measures that will support our
drive towards a 15% reduction in water usage by
2025 (against a 2019 baseline, due to unusually
low water usage in 2020 as a result of COVID-19
lockdowns). These measures include developing
an enhanced water-usage monitoring capability
integrated with all aspects of Aston Martin’s
manufacturing operations, exploring opportunities
for investing in new rainwater capture, improving
efficiencies in manufacturing processes utilising
water and installing water saving devices.
53
PRODUCT CO2 EMISSIONS
Vantage Coupe
Vantage Roadster
DB11 V8 Coupe
DB11 V8 Volante
DB11 V12 Couple
DBS Superleggera V12
DBS Superleggera V12 Volante
DBX V8
V12 Speedster
Valkyrie
* Figures based on WLTP test cycle
WASTE MANAGEMENT
Total waste (tonnes)
Reused (tonnes)
Recycled (tonnes)
Recover (tonnes) (Waste to Energy)
WATER CONSUMPTION (M3)
CO2 (G/KM)#
264
263
254
257
303
306
306
323
298
543
2018
2019
2020
1,800.00
1,566.02
394.39
43.11
1,262.86
494.03
40.21
987.81
538.01
8.72
243.82
141.85
2021
858.62
6.40
380.60
471.62
Water consumption (M3)
54,029.25
59,233.78
34,477.65
64,681.40
Note: These figures represent the water consumption at our UK sites only.
2018
2019
2020
2021
“During 2021, our dedicated Water
Working Group developed a Water
Savings Opportunities Action Plan,
which is now being implemented
across our operations.”
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 54
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED
TASK FORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES
Aston Martin is committed to becoming the
world’s most desirable ultra-luxury British
performance brand, and the Board recognises the
scale of the climate emergency and its potential
impact on the automotive industry. We believe
businesses have an important role to play in
taking decisive action to fight climate change
and achieve the Paris Agreement’s objective of
reducing global average temperature increases
to well below 2°C by 2100, and we have a clear
commitment to set near- and long-term Company
wide emission reductions in line with science-
based net-zero with the SBTi.
We have implemented the recommendations
of the Task Force on Climate-related Financial
Disclosures (TCFD), and this, our first TCFD Report,
provides an update for each of the four TCFD
pillars: Governance, Strategy, Risk Management
and Metrics and Targets. We established a TCFD
Working Group who conducted a thorough
assessment of the physical and transitional risks
and opportunities that we face which could affect
our strategy and business model under three
different warming scenarios, a 1.5°C, 2°C, and
4°C average increase in global temperatures
by 2100.
We have already commenced a number of
actions to reduce the Company’s impact on
the environment including:
• sourcing 100% renewable energy
(since 2019);
• exploring the use of sustainable materials
(e.g., green aluminium) within production;
• implementing initiatives to reduce plastic
waste and water consumption within our
operations;
• eliminating waste being sent to landfill
(since 2019);
• reducing average fleet emissions across
our vehicle portfolio; and
• committing to our journey towards
electrification with the planned launch of
our first PHEV in 2024 and targeting BEV
launch in 2025, with a fully electrified
Sport/GT and SUV portfolio by 2030.
This Report, together with cross references to
other sections of this report and the Sustainability
Report where appropriate, outlines how we have
complied with the 11 recommended disclosures,
or explained where further work is required
to do so, as prescribed by the TCFD. As our
scenario assessment matures we shall provide
further disclosure regarding the resilience of
our strategy under certain modelled scenarios.
“We believe businesses have an
important role to play in taking decisive
action to fight climate change.”
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 55
GOVERNANCE
During the year Aston Martin established a
Sustainability Committee whose purpose is to
oversee and monitor on behalf of the Board the
implementation of the Company’s ESG strategy
and to provide a general oversight of sustainability
initiatives across the Company. The Committee
will meet at least twice a year and will be
responsible for governance of climate-related
risks and opportunities. The Committee is chaired
by Anne Stevens, Independent Non-Executive
Director, and provides strategic guidance on
climate and environmental matters with regular
reporting to the Board. Significant climate risks are
also fed into the Risk Management Committee to
be managed using our business-wide enterprise
risk management procedures and incorporated
into the corporate risk register where appropriate
(refer to the Risk and Viability Report on pages
38-43 for more information on how we manage
risk within the Group).
The work of the Committee influences Board
strategic decisions in areas such as the development
of the future product portfolio with the planned
transition to electrified powertrains across the
portfolio by 2030, identifying areas to reduce
energy and water consumption, and sourcing of
100% renewable energy within our operations.
A cross functional TCFD Working Group
has been established, with representation from
Risk Management, Supply Chain, Finance,
Sustainability, Sales and Marketing and
Manufacturing to lead our activities to ensure
compliance with the TCFD requirements.
Significant climate-related risks which have
been identified by the Group are assigned to
functional Risk Champions to develop appropriate
risk mitigation plans. The Audit and Risk
Committee then provide oversight of the corporate
climate-related risks. Each function maintains a
comprehensive risk register which is reviewed
twice a year by the Risk Management Committee.
STRATEGY
We have undertaken scenario analysis modelling
to assess the potential impact of climate change
on our Company, considering qualitative and
quantitative factors in three different warming
scenarios through to 2050. The results of our
assessment show that in the short (next two
years) and medium (two to five years) term the
Company is more exposed to transition risks arising
from changing policy and regulations, changing
consumer preferences and accelerated technology
change as the move to electrification and other
non-carbon solutions intensifies. Physical risks
become more relevant in the longer term (beyond
five years) with the potential impact of more severe
and frequent weather events on our supply chain
and distribution network.
The TCFD Working Group engaged a third-
party consultancy SME to build our scenario
analysis model. The model evaluated the potential
impacts of both transition and physical risks
and opportunities on Aston Martin with risks
being categorised in accordance with TCFD
recommendations in three warming pathways
as shown in the table below:
SCENARIO PATHWAYS
SCENARIO
SSP/RCP*
DESCRIPTION
STEADY PATH TO SUSTAINABILITY
MIDDLE OF THE ROAD
FOSSIL-FUELLED GLOBAL GROWTH
SSP 1/RCP 2.6
SSP 2/RCP 3.4
SSP 5/RCP 8.5
Globally-coordinated efforts to
reduce emissions to net-zero by
2050 and avert the worst effects
of climate change
Imperfect efforts to reduce emissions
lead to moderate progress but
exacerbate inequalities
Global collaboration focused on
protecting the population from
a changing climate (as opposed
to reducing human-induced
climate change)
SOCIETAL RESPONSE
Proactive
Proactive
Reactive
GLOBAL DYNAMICS
Open, collaborative, global
Independent, regional
Open, collaborative, global
TEMPERATURE RISE
LIKELIHOOD
1.5°C
LOW
2-2.4°C
HIGH
4°C
MEDIUM
*SSP – Shared Socioeconomic Pathway, RCP – Representative Concentration Pathway
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 56
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED
Key inputs into the model included the physical
geographical footprint of the Company, supply
chain and global dealer network; historical and
predicted sales volumes by market; Scope 1, 2 and 3
greenhouse gas emissions data and vehicle material
content. We used the Representative Concentration
Pathways (RCPs) as our framework for modelling
different emissions pathways and the associated
impact on the climate. To explore the associated
market and customer trends underpinning Aston
Martin’s commercial resilience we also considered
different socioeconomic futures, known as the
Shared Socioeconomic Pathways (SSPs).
The key significant risks and opportunities which
have been assessed and incorporated within the
scenario analysis are shown in the table below.
The risks have been summarised within the Climate
Change principal risk on page 40.
SUPPLY CHAIN
MANUFACTURING & DISTRIBUTION
CUSTOMER
PHYSICAL RISKS
Related to the physical impacts of climate change over time (e.g., increased rainfall, sea level rise, prolonged drought,
increased frequency and severity of extreme weather events)
Supply chain disruption exacerbated by reliance on single-source vendors for certain components
TRANSITION RISKS
Related to the transition to a lower-carbon economy over time
(e.g., policy, legal, technology and market changes to address mitigation and adaptation requirements related to climate change)
Increasing insurance costs due to a hardening Property Damage
and Business Interruption market caused by additional climate-
related damage claims
Inability to maintain pace with technological advancement and remain competitive (e.g., transition to electrified powertrains and incorporation of sustainable materials in the product)
Brand/reputational damage arising from association with unethical supply chain activities (e.g., precious metal sourcing and continued use of leather)
Lack of a globally-coordinated transition to EVs may result in increased market segmentation and the need for a more diverse product portfolio
Aston Martin EV portfolio is not price competitive due to its low volume strategy and inability to drive material/component costs down
Increasing carbon related taxes/import duties designed to limit the use of high-emissions vehicles, particularly within urban areas
Implications of not keeping pace with regulations across key
markets, in particular potential loss of small volume derogation
Restricted access to affordable capital due to not meeting ESG
criteria for potential investors
Inability to attract and retain appropriate talent caused by a more
competitive and progressive, ESG-orientated local labour market
Market disruption from technology-orientated corporates/new entrants developing non-ICE alternative powertrain vehicles
Inability to convert traditional ICE customer base to an Aston
Martin EV vehicle proposition
• Decreased revenues
Medium-term
Inability to create a credible sustainability narrative while continuing to sell ICE vehicles
OPPORTUNITIES
Climate change presents opportunities in several areas including resource efficiency,
transition to renewable energy sources, new products and services, new markets and customer groups
Secure operational cost efficiencies through waste reduction, more efficient use of water and more efficient energy consumption
Changes in social norms towards environmentally-friendly
buying decisions may reduce demand for current product
portfolio faster than expected
Inability to attract new customers who have an alternative
perception of luxury to our historical/traditional customer base
Potential for strategic partnerships with other organisations,
for example to provide carbon offset schemes at point of
customer purchase
Develop a reputation for building a strong, credible ESG
narrative and sustainability focus across the value chain
Maximise revenue and profit opportunity from the sale of the
last generation of core ICE vehicles
POTENTIAL FINANCIAL IMPACT
TIME HORIZON
TCFD RISK CLASSIFICATION
WARMING SCENARIOS
(risk/opportunity relevant to this scenario)
1.5°C
2°C
4°C
• Increased operating costs
• Decreased revenue
Short-term
• Increased operating costs
Long-term
• Increased capex/R&D
• Asset write-offs/impairment
• Decreased revenue
• Increased operating costs
• Increased capex/R&D
• Asset write-offs/impairment
• Decreased margins
• Decreased revenue
• Increased operating costs
• Increased operating costs
• Decreased revenue
• Increased financing costs
• Decreased capex/R&D
• Increased operating costs
• Decreased revenues
• Increased capex/R&D
• Asset write-offs/impairment
• Decreased revenues
• Increased capex/R&D
• Asset write-offs/impairment
• Decreased revenues
• Decreased revenues
• Decreased operating costs
• Increased revenues
• Increased revenues
• Increased revenues
• Increased margins
• Decreased operating costs
Short-term
Short-term
Medium-term
Short-term
Short-term
Short-term
Short-term
Short-term
Medium-term
Short-term
Short-term
Short-term
Short-term
Medium-term
Short-term
Short-term
Physical Acute & Chronic
Physical Acute
Technology
Reputation
Market, Policy & Legal
Market
Policy & Legal
Policy & Legal
Market
Market
Market
Market
Market
Market
Reputation
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
57
POTENTIAL FINANCIAL IMPACT
TIME HORIZON
WARMING SCENARIOS
(risk/opportunity relevant to this scenario)
1.5°C
2°C
4°C
TCFD RISK CLASSIFICATION
• Increased operating costs
• Decreased revenue
Short-term
• Increased operating costs
Long-term
• Increased capex/R&D
• Asset write-offs/impairment
• Decreased revenue
• Increased operating costs
• Increased capex/R&D
• Asset write-offs/impairment
• Decreased margins
• Decreased revenue
• Increased operating costs
• Increased operating costs
• Decreased revenue
• Increased financing costs
• Decreased capex/R&D
• Increased operating costs
Short-term
Short-term
Medium-term
Short-term
Short-term
Short-term
Short-term
Short-term
Market disruption from technology-orientated corporates/new entrants developing non-ICE alternative powertrain vehicles
Inability to create a credible sustainability narrative while continuing to sell ICE vehicles
OPPORTUNITIES
Climate change presents opportunities in several areas including resource efficiency,
transition to renewable energy sources, new products and services, new markets and customer groups
Secure operational cost efficiencies through waste reduction, more efficient use of water and more efficient energy consumption
Inability to convert traditional ICE customer base to an Aston
Martin EV vehicle proposition
• Decreased revenues
Medium-term
Changes in social norms towards environmentally-friendly
buying decisions may reduce demand for current product
portfolio faster than expected
Inability to attract new customers who have an alternative
perception of luxury to our historical/traditional customer base
Potential for strategic partnerships with other organisations,
for example to provide carbon offset schemes at point of
customer purchase
Develop a reputation for building a strong, credible ESG
narrative and sustainability focus across the value chain
Maximise revenue and profit opportunity from the sale of the
last generation of core ICE vehicles
• Decreased revenues
• Increased capex/R&D
• Asset write-offs/impairment
• Decreased revenues
• Increased capex/R&D
• Asset write-offs/impairment
• Decreased revenues
• Decreased revenues
• Decreased operating costs
• Increased revenues
• Increased revenues
• Increased revenues
• Increased margins
• Decreased operating costs
Medium-term
Short-term
Short-term
Short-term
Short-term
Medium-term
Short-term
Short-term
Physical Acute & Chronic
Physical Acute
Technology
Reputation
Market, Policy & Legal
Market
Policy & Legal
Policy & Legal
Market
Market
Market
Market
Market
Market
Reputation
SUPPLY CHAIN
MANUFACTURING & DISTRIBUTION
CUSTOMER
PHYSICAL RISKS
Related to the physical impacts of climate change over time (e.g., increased rainfall, sea level rise, prolonged drought,
increased frequency and severity of extreme weather events)
Supply chain disruption exacerbated by reliance on single-source vendors for certain components
TRANSITION RISKS
Related to the transition to a lower-carbon economy over time
(e.g., policy, legal, technology and market changes to address mitigation and adaptation requirements related to climate change)
Increasing insurance costs due to a hardening Property Damage
and Business Interruption market caused by additional climate-
related damage claims
Inability to maintain pace with technological advancement and remain competitive (e.g., transition to electrified powertrains and incorporation of sustainable materials in the product)
Brand/reputational damage arising from association with unethical supply chain activities (e.g., precious metal sourcing and continued use of leather)
Lack of a globally-coordinated transition to EVs may result in increased market segmentation and the need for a more diverse product portfolio
Aston Martin EV portfolio is not price competitive due to its low volume strategy and inability to drive material/component costs down
Increasing carbon related taxes/import duties designed to limit the use of high-emissions vehicles, particularly within urban areas
Implications of not keeping pace with regulations across key
markets, in particular potential loss of small volume derogation
Restricted access to affordable capital due to not meeting ESG
criteria for potential investors
Inability to attract and retain appropriate talent caused by a more
competitive and progressive, ESG-orientated local labour market
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
58
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED
RISK MANAGEMENT
Refer to pages 38-43 of the Risk and Viability
Report where we outline how risks and
opportunities, including those specifically related
to climate change, are identified, assessed and
managed through the deployment of the Aston
Martin Enterprise Risk Management Framework
and System. Our climate-related risks and
opportunities have been classified using the TCFD
recommended classifications as summarised in
the table on the previous page.
The financial and strategic resilience impacts of
our scenario analysis modelling of climate-related
risks and opportunities will be further assessed
during 2022.
A summary of some of the key mitigating
activities that have been taken, or are planned
to be taken, to manage the significant climate-
related risks are disclosed below.
Significant climate-related risks have been
incorporated into the appropriate functional
risk registers where we maintain a description
of the risk, assess its likelihood and impact,
assign a risk owner and identify and track
mitigating activities.
METRICS AND TARGETS
Our ESG strategy includes a number of climate-
related ambitions and targets which demonstrate
the Company’s commitment to tackling climate
change in the short, medium and longer
term. We are committed to the Science Based
Targets initiative (SBTi) Net-Zero Standard and
are committed to setting near- and long-term
Company-wide emission reduction targets in line
with the SBTi. These targets will be validated by
the SBTi over the next 24 months.
TRANSITION RISKS
MITIGATING ACTIONS TAKEN/PLANNED TO BE TAKEN TO ADDRESS RISKS
POLICY
Managing our exposure to
changes in legislation
• R&D investment to develop
• Establishment of emissions-
• Consideration of forward
lower fleet emissions portfolio
• Maintenance of small volume
derogation status exemptions
where available
pooling agreements with third
parties to manage exposure to
carbon pricing
purchasing of carbon offsets to
manage exposure to increased
pricing and reduced capacity
TECHNOLOGY
Modifying our product offering
• R&D investment in
EV technology
• Improving energy efficiency
in our manufacturing plants
• Strategic co-operation
• Investment in use of
agreement with
Mercedes-Benz AG to provide
access to EV powertrains
alternative sustainable
materials within vehicles
MARKET
Adapt to meet customer
needs and desires
• Continued focus on waste
reduction and elimination
• Zero plastic waste target to be
• Working with our supply
chain to reduce global
emissions and waste
achieved by 2025
REPUTATION
Positioning Aston Martin as an
ultra-luxury sustainable brand
• Development of our
ESG strategy to respond
proactively to climate change
• Transparent disclosure of
our GHG emissions through
publication of our
Sustainability Report
• Enhanced communication
of actions already taken to
address climate change
• Development of credible
plans to achieve net-zero
carbon emissions within our
plants by 2030
• Development of electrified
options within the product
portfolio to meet customers’
ICE and EV needs
• Clear strategy to electrify our
product portfolio and increase
use of sustainable materials
(including green aluminium)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
59
2026
2030
NEW CAR LINES
all new car lines to have the option of an electrified
powertrain by 2026 (PHEV or BEV)
ELECTRIFICATION
ambition to develop fully electrified Sport/GT and SUV
portfolio by 2030
NET-ZERO
ambition to achieve net-zero emissions from our
manufacturing facilities by 2030*
30%
reduction in supply chain emissions from 2020 baseline
2039
NET-ZERO
ambition to achieve net-zero emissions in the supply
chain by 2039*
*
These net-zero targets pre-date our commitment with SBTi and
will be rolled into our future near- and long-term Company-
wide emission reductions targets in line with the science-
based net-zero standard with the SBTi, which will be validated
in the next 24 months.
Refer to the Environmental, Social and Governance
Report (page 48) for details of our GHG Scope 1,
2 and 3 emissions and our ‘Sustainability Report’
for more detail relating to targets we have set and
monitor in relation to climate change. In summary,
these include:
2020
100%
use of renewable energy within manufacturing facilities
2021
2022
2024
2025
GHG EMISSIONS
Scope 1 and 2 emissions intensity per unit reduced
44% to 2.79 tCO2e between 2020 and 2021
SBTi
development and validation of SBTi targets
FIRST PHEV
Aston Martin commences customer deliveries
ZERO PLASTIC
packaging waste by 2025
FIRST BEV
targeting launch in 2025
15%
reduction in water consumption (from 2019)
This concludes the TCFD section of the report.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 60
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED
STRATEGIC ENERGY ACTION PLAN
HIGHLIGHTS
SOLAR PV GENERATION FOR ST ATHAN
1
2
3
4
5
Onsite renewable energy
generation, including reviewing
options for Solar Photovoltaic
(Solar PV) installation and
generation at our manufacturing
sites and, over the longer term,
exploring feasibility of combined
heat and power using low
carbon fuels.
Investing in advanced energy
management systems to
dynamically optimise production
efficiency by using real-time
energy usage data and improved
heating, ventilation, and air
conditioning controls.
Adopting industry best practice,
including utilising the net-zero
Science-Based Targets initiative
(SBTi) standard as a framework
for achieving a robust carbon
reduction roadmap towards
net-zero.
Innovating new manufacturing
processes, including investigating
heat cross transfer from
compressor and paint shop
operations, and maximising the
use of 3D printing.
New training programmes
to ensure all employees are
concentrated on the need to
minimise energy usage across
all functions.
In 2021 Aston Martin progressed a major
project that will deliver 6.4MW of onsite
Solar PV generation capacity at our St Athan
plant. Subject to planning approval and
agreement on connection to the national
electricity distribution network, during 2022
over 14,000 solar panels will be installed,
capable of generating around 20% of the plant’s
total annual demand. We are also continuing
to explore the potential installation of up to
2.5MW of Solar PV at our Gaydon site.
14,000
solar panels at St Athan will generate
around 20% of the plant’s total annual
electricity demand
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 61
CARING FOR OUR PEOPLE
SOCIAL
HEALTH AND SAFETY
SAFETY
During 2021, we continued our industry-leading
track record on safety and in December received
our tenth consecutive British Safety Council
Sword of Honour. The British Safety Council Five
Star Audit is a comprehensive, contemporary,
quantified audit process, which allows health
and safety performance to be tested against
the latest legislation, recognised standards and
best- practice techniques. It provides a quantified
outcome with detailed recommendations against
a contemporary best-practice specification
(including the requirements of ISO 45001)
over and above current Occupational Health
and Safety Management Systems standard
requirements. The audit specification model
includes six best practice indicators which
are continually assessed throughout the
audit process:
• Leadership;
• Stakeholder engagement;
• Risk management;
• Organisational health and safety culture;
• Continual improvement; and
• Wellbeing.
Each year, only those organisations that have
achieved a five-star result are invited to apply
for a Sword of Honour, with only a select few
attaining this prestigious award.
The safety and wellbeing
of our staff has been a key
business priority during
the COVID-19 pandemic
Aston Martin has been recognised for pioneering
best-practice to keep our employees safe while
successfully maintaining production and positive
change across the business.
Throughout 2021 we continued to maintain
our COVID-secure guidelines in order to protect
our people and build on our existing COVID-19
corporate update portal, providing the latest
information and Company actions in one place,
accessible to all employees at all times.
We continued to work closely with employees
and trade unions to further develop and implement
protocols to protect employee health and safety in
our production facilities in line with the evolving
government advice.
WELLBEING AND HEALTH AND SAFETY (AS AT 31 DECEMBER 2021)
2019
2020
2021
Accident Frequency Rate*#
Sword of Honour Award
1.01
8TH CONSECUTIVE TIME 9TH CONSECUTIVE TIME 10TH CONSECUTIVE TIME
1.04
1.44
BSC Health and Safety audit score
* Accident Frequency Rate (AFR) – for Aston Martin Lagonda UK employees/200,000 manhours (or per 100 employees)
# This figure only includes UK employees
94.44%
94.40%
94.29%
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 62
This included maintaining a safe environment to
enable people who needed to be on-site to return
to work, while still supporting those who could
work from home to do so effectively. We removed
the temperature checks on arrival and brought
in twice-weekly lateral flow testing for those
working at our sites initially administered by a
nurse, healthcare professional or first aider, and
latterly, successfully moved to self-testing in the
last quarter of the year. The rapid flow antigen test
(lateral flow) has proven effective in providing
rapid results, helping to stop the spread of the
virus among our employees and their families.
We continued to mandate the use of masks
throughout the year when moving around our
UK facilities, working on the shop floor and
in situations where social distancing was not
possible, even if this meant going beyond UK
Government advice. We also encouraged the
continuation of social distancing, and hand
sanitiser remained available throughout 2021.
WELLBEING
Our relentless focus on safety mirrors our
wider commitment to supporting the wellbeing
of our employees. During the pandemic we
have extended this commitment to build on
the comprehensive range of benefits available
to employees across the Company, including
dedicated healthcare provision, on-site health
assessments, discounted gym membership and
a free, confidential helpline offering access
to counselling. Mental health has been a key
priority with a number of new initiatives delivered,
including new tools provided through the ‘Thrive’
employee app and mental health training delivered
to Aston Martin’s leadership team.
SUSTAINING A WORLD-BEATING TEAM
SKILLS AND TRAINING
Making sure our employees are equipped with
the right skills and can advance their professional
development is a key part of making sure Aston
Martin continues to have a world-beating team
ready to drive our future success. In 2021,
24 apprentices graduated from our four-year
apprenticeship programme and we have 44
apprentices currently in our programme, with
a first tranche of 18 new apprentices expected
to start the programme and their early career in
September 2022.
Every employee at Aston Martin can access
training opportunities tailored to their needs and
aspirations. This includes enabling employees to work
towards Chartered Institute of Management and MBA
qualifications. In 2021 we continued to increase the
courses available to employees through our e-learning
platform which now has over 200 courses.
PROMOTING STEM
In order to sustain a world-beating team it
is essential to inspire young people about
the exciting possibilities of a career in
manufacturing. This underpins Aston Martin’s
extensive engagement and long-standing
partnerships with local schools. During 2021,
we successfully maintained our work with young
people, with a continuing focus on promoting
science, technology, engineering and mathematics
(‘STEM’). Encouraging the uptake of STEM subjects
not only helps ensure young people are equipped
to pursue careers in manufacturing but also
enables Aston Martin to recruit people with the
skills we need over the long term.
DIVERSITY AND INCLUSION
We are committed to creating, delivering and
incentivising an inclusive employee experience
that aligns with what the Company needs in
order 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 has been a key priority for the
Company in 2021, as part of our “I AM Aston
Martin” workstream,which aims to make sure
that employees can be their authentic selves at
work. A priority for 2022 will be the inauguration
of our Employee Inclusion Network.
EMPLOYEES BY GENDER (AS AT 31 DECEMBER 2021)^
Senior management team
Senior leadership team
Other employees
Total
EMPLOYEES BY REGION (AS AT 31 DECEMBER 2021)^
Asia Pacific
EMEA
UK
Americas
Total
MALE
FEMALE
% FEMALE
6
47
1,836
1,889
-
11
307
318
0.0%
19.0%
14.3%
14.4%
MALE
FEMALE
% FEMALE
21
40
1,807
21
1,889
16
7
287
8
318
43.2%
14.9%
13.7%
27.6%
14.4%
EXTERNAL ASSURANCE
OF RESPONSIBILITY AND
PEOPLE DISCLOSURES
ERM CVS has provided limited assurance over
selected metrics in the Environmental, Social
and Governance sections of the Annual Report
and Accounts, 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.
Note: Data by gender and region is shown for 2,207 permanent Company employees only
^ Values assured by ERM CVS
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 63
DRIVING
FORCE
As part of our commitment to promoting diversity
and inclusion, and as a sponsor of the ITV series
Driving Force, Aston Martin worked with series
Director-Creator Rosemary Reed to organise
an event at Whitchurch High School in Cardiff
to inspire girls to work in male-dominated
industries. Five female Aston Martin apprentice
engineers joined Aston Martin Cognizant F1™
Team Driver Ambassador, racing and stunt
driver, Jess Hawkins to speak to pupils aged
11 to 16 about their experiences. The event
was also supported by Girls on Track UK, a joint
initiative between the Fédération Internationale
de l’Automobile (FIA) and Motorsports UK to
inspire girls and women into seeing and believing
that there is a rightful and valuable place for
them in the motorsports industry and show
that there are opportunities for all, regardless
of interests, gender and race. The Driving Force
event further reflected Aston Martin’s ongoing
commitment to promoting science, technology,
engineering and maths (STEM).
Aston Martin Cognizant F1™ Team Driver
Ambassador, racing and stunt driver,
Jess Hawkins joins five female Aston
Martin apprentice engineers on a visit to
Whitchurch High School in Cardiff as part
of a national effort to inspire girls to work
in male-dominated industries
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 64
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED
During 2021, the work of our Diversity and
Inclusion Working Group, chaired by the Director
of Reward and Policy, continued. This working
group wrote the new Diversity and Inclusion
Policy, which was approved by the Board at its
meeting in December. The working group has set
itself a number of targets including a commitment
to collect and publish a wider set of demographic
data and a relaunch of the Aston Martin Female
Advisory Board.
We also appointed in the course of the year three
women to the Board, Natalie Massenet, Marigay
McKee and Anne Stevens, and have committed
to achieve the Parker Review recommendation
that at least one Director on the Board is
from an ethnic minority background, by
31 December 2024.
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.
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 on page 62,
and our Gender Pay Gap (GPG) report is available
at www.astonmartinlagonda.com. Our mean pay
gap has increased from 2.6% in 2020 to 6.9% in
2021, largely due to the temporary salary and
fee waivers taken by Board members and senior
management received during 2020. 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.
The findings from our GPG report help to
enable us to continue to drive and evolve our
initiatives to ensure we are able to promote diversity
across the business, ensuring we are able to recruit,
develop and retain talented men and women.
We will continue to monitor our pay gap and
recognise that it will take time for the full impact of
our initiatives to be evident in these figures. We are
committed to focusing on and exploring the best
ways to encourage and enable our employees to
develop and succeed at Aston Martin, including
into the most senior positions.
In 2021 we also started a process to commit
to ‘Valuable 500’, a global business collective
innovating together for disability inclusion, and
in 2022 will be delivering plans as part of being
Aston Martin’s apprenticeship programme forms a key
part of the Company’s commitment to supporting the
next generation of British talent and skills
a committed member of the UK Government’s
Disability Confident scheme. We have also
progressed our engagement with ‘Racing Pride’,
an innovative movement developed to promote
LGBTQ+ inclusivity within the motorsport
industry and among its technological and
commercial partners.
EQUAL OPPORTUNITIES
We are committed to building and maintaining a
workplace and culture where all our people feel
connected to Aston Martin’s purpose, that they
have a voice, will receive equal treatment and can
develop to reach their full potential irrespective
of their gender, gender identity or expression,
ethnicity, race, nationality, origin, religion or
belief, age, sexual orientation, disability, marital
status, or any other characteristic protected
by law.
OUR PEOPLE VISION
Our people vision is ‘to create a fulfilling and
rewarding experience that enables our people
to flourish’ and is part of our People strategy.
The People strategy has been developed to
accelerate progress in creating and sustaining a
world-class employee experience. The pillars of
our strategy centre around our I AM culture and
include aspects such as embedding our I AM
values, driving improvements to diversity and
inclusion, a focus on employee engagement,
clear communication and growing our team to
meet the business’s future capability needs.
Delivery of the People strategy is overseen by
the People Forum, which meets on a monthly
basis. The Forum, chaired by our Director of HR,
assumes responsibilities previously overseen by
the ‘People Committee’.
OUR VALUES
Our organisational values are: honest, transparent,
accountable and courageous. We are currently
partnering with employees from across the
organisation to develop a deep understanding
of how our values are lived. Through a series
of focus groups, employees have shared their
experiences of what makes Aston Martin unique
and their vision for the future. Alongside the
feedback from the I AM Engaged survey, this
has been an important step in co-creating what
Aston Martin stands for.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
65
The return of Town Hall
events has allowed
employees the chance
to hear directly from
leadership
EMPLOYEE ENGAGEMENT
During 2021, work has continued on ‘I AM
Aston Martin’, our culture transformation
programme. In 2021 we conducted our global
I AM Engaged survey, receiving feedback from
80% of employees.
Following the survey, our priorities for
engagement were set as:
the business. Every colleague at Aston Martin
can access training opportunities tailored to their
needs and aspirations. This includes enabling
employees to work towards Chartered Institute of
Management Level 3 in Management and Level 5
in Leadership and Management, as well as APM
Level 4 in Project Management, Data Analytics
Level 4, and MBA qualifications.
• delivering a shared vision; and
• strengthening a high-performance culture.
In December 2021, CEO Tobias Moers shared
the future vision for the Company with all
employees, followed by an exclusive employee
event to reveal our ‘Showroom of the Future’.
Round Table events have enabled employees to
hear first-hand the thoughts and perspectives
of the CEO and have been a key mechanism to
continue the dialogue on the experiences and
engagement of our people.
Aston Martin employees have also been
engaged in shaping our organisation values.
An open invitation saw employees from across
all parts of the business come together in focus
groups to help shape the behaviours which
will help Aston Martin succeed in the future.
The launch of the values will continue into
2022 to become part of how we attract, grow
and develop our people.
TRAINING AND EMPLOYEE DEVELOPMENT
Aston Martin offers a four-year apprenticeship
programme to equip new employees with the
skills they need to fulfil a range of roles across
REWARDS AND BENEFITS
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.
Our aim is to foster a culture where everybody
feels valued, motivated and rewarded to
achieve their best work. Our reward offering
is overseen by the Remuneration Committee
which, as well as having responsibility for
senior executive pay, considers remuneration
across the whole Company.
The philosophy and principles that apply
to remuneration at the Company are applied
consistently throughout the organisation,
with an emphasis on a pay for performance
approach. All employees are eligible for an
annual bonus based on performance and at a
senior level, there is a greater emphasis on long-
term, sustainable performance and alignment
with the shareholder experience. The key
difference between executive remuneration
and that for the wider workforce is therefore
that a higher proportion is at risk and dependent
on Company performance.
Pay, terms and conditions for Non-Management
grades are subject to Trade Union negotiation,
with any changes, including any general
increases, agreed on a regular basis. In 2021,
the Company introduced a new Company-
wide annual bonus with a Group scorecard of
performance measures to better reflect annual
progress on the business plan and latest KPIs.
The Group scorecard was cascaded throughout
the Company to apply to annual bonus for all
employees, providing strong alignment of focus
and a ‘One Team’ approach. As part of the
2021 agreement, the Company also agreed a
grade protection policy, offering protection for
restructure/organisational job changes or long-
term ill health, and a home-working policy, to
support employees who can effectively work
from home.
During 2021, the Company reviewed
the Aston Martin Lagonda Limited Pension
Scheme (the Defined Benefit Scheme) and
proposed to close this scheme to future accrual.
A consultation process with affected employees
(c. 400 members) was carried out during 2021,
and the Company also engaged with the
Trade Union on the proposals. Following this
consultation, the Company decided to close
the Defined Benefit Scheme to future accrual
on 31 January 2022, with all employees who
were active Defined Benefit Scheme members
immediately before the closure becoming
deferred members and automatically joining the
Company’s competitive Defined Contribution
plan (of which the majority of employees are
already members).
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 66
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 67
“Our partnership with
Aston Martin has been
invaluable. Thanks
to Aston Martin’s
support, the life
chances of thousands
of young people who
we work with have
been transformed.”
BEN MARSON
DIRECTOR OF PARTNERSHIPS
THE PRINCE’S TRUST
SUPPORT FOR COMMUNITIES
AND CHARITIES
All of Aston Martin’s sites provide invaluable
employment opportunities and contribute to the
economic wellbeing of surrounding communities.
However, our contribution to supporting the
communities we are part of goes much further.
In addition to our partnerships with local schools
to promote careers in STEM, Aston Martin works to
support local charities and good causes chosen by
employees across the business. Although difficult
circumstances during 2021 meant we could not
undertake a number of activities, we are planning
to rebuild our support for local charities during
the year ahead.
The Company is also committed to supporting
communities and helping those in need nationally.
In 2021 we reignited our work with The Prince’s
Trust, a youth charity that helps vulnerable young
people aged 11 to 30 to access employment,
education and training. Since 2016, Aston
Martin has helped to raise over £2 million for
The Trust. As well as direct gifts, support and
sponsorships totalling more than £200,000, in
2021 we donated an Aston Martin Vantage that
helped raise £500,000 for The Trust via the Omaze
prize draw.
WORKING WITH OUR STAKEHOLDERS
Aston Martin proactively engages with a
wide range of stakeholders. In addition to
local communities an d charities, we also
engage industry bodies such as the Society of
Motor Manufacturers and Traders, the leading
representative body for the UK automotive sector,
parliamentarians, and stakeholders across the UK
and Welsh governments. For further information
on stakeholder engagement, see pages 44-45.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 68
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED
GOVERNANCE
As a signatory of the UN Global Compact we
are committed to doing business in an ethical
and transparent way. This approach is essential
to ensure that our growth is sustainable and
provides shared value for our stakeholders.
We are committed to comply with the regulatory
context of all countries in which the Company
operates and to ensure our cars are compliant
with the regulation for the markets in which
they are sold.
Our Standards of Corporate Conduct apply to
all full and part time employees of the Group, and
to all temporary, contract and all other individuals
and companies that act on behalf of the Group.
The Standards of Corporate Conduct
established a series of principals and guidelines
of conduct that ensures ethical and responsible
behaviour in a number of areas such as: Anti-
Bribery and Corruption, Confidential Reporting
and Whistleblowing, Modern Slavery, Responsible
Procurement and Diversity & Inclusion.
The Internal Audit team investigates possible
violations of the Standards of Corporate Conduct
during periodic audits.
ANTI-BRIBERY AND CORRUPTION
Our policy is to conduct all of our business in an
honest and ethical manner and a zero-tolerance
approach is taken to bribery and corruption.
We are committed to acting professionally, fairly
and with integrity in all our business dealings
and relationships wherever we operate and
implementing and enforcing effective systems
to counter bribery.
To ensure that the Company and its employees
conduct business in an ethical and transparent
way, we have a number of policies including
Anti-Bribery and Corruption, Gifts and Hospitality
and Confidential Reporting 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
online training and certification process to monitor
compliance whereby all employees are required to
review all our Standards of Corporate Conduct and
certify that they have read and understood them.
SUSTAINABLE SUPPLY CHAIN
RESPONSIBLE PROCUREMENT POLICY
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.
The Aston Martin Responsible Procurement
Policy was revised in 2021 to cover conflict
minerals and our commitment to elimination
of any identified breaches, as well as the core
principles of Green Procurement, and also
expanded our commitment to environmentally-
friendly products and ISO14001 in line with
our new ESG strategy. The Policy sets out the
Company’s commitment to the application of
social, ethical and environmental principles in the
supply chain. These principles are supported by
Aston Martin procurement policies and practices,
standard terms of conditions of supply and the
standards for all Company employees, suppliers
and sub-suppliers.
We seek commitment from the Company’s
existing suppliers and sub-suppliers as well
as future suppliers to engage, communicate
and promote the principles outlined within
the Policy, including but not limited to our
expectations around working conditions,
regulatory compliance, safety, ethical and
environmental commitments and eradicating
any forms of slavery or human trafficking in line
with the UK’s Modern Slavery Act.
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. A detailed
overview of the Aston Martin Responsible
Procurement Policy can be found on the Company’s
website: www.astonmartinlagonda.com.
SUPPLIERS BY REGION
The Company continues to be focused on sourcing
the best suppliers globally, which includes
increasing local spend, but also moving further
afield than Western Europe. The reliance on Europe
and the UK suppliers in 2020 was largely due to
the impact of COVID-19.
2020
Africa
Asia Pacifi
North America
Europe
UK
1.3%
0.0%
1.1%
72.7%
24.8%
2021
Africa
Asia Pacifi
North America
Europe
UK
3.5%
0.3%
1.0%
66.4%
28.9%
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 69
HUMAN RIGHTS AND MODERN SLAVERY
Modern slavery, together with its components of
forced labour and human trafficking, is a hidden
crime and a growing world-wide issue exacerbated
by the rapid rise in global migration, affecting
an estimated 40.3 million people. This issue
transcends age, gender and ethnicities. It includes
victims trafficked from overseas and vulnerable
people in the UK who are forced illegally to work
against their will across many different sectors
such as agriculture, hospitality, construction,
retail and manufacturing.
Our new Anti-Slavery and Human Trafficking
Policy provides employees, contractors and other
business partners direction on our approach to
and measures we have in place to prevent acts
of modern slavery and human trafficking in the
business and supply chain. These measures include
training, issuing the Responsible Procurement
Policy, conducting due diligence and regular
audits of suppliers, and mitigation activities to
address supply chain risks. We are required to
publish an annual ‘Slavery and Human Trafficking
Statement’ detailing the steps we have taken to
ensure that slavery or human trafficking is not
taking place in our supply chain.
To address this, we have established a cross
functional Modern Slavery Working Group
including representation from Human Resources,
Legal, Procurement and Supply Chain, Internal
Audit and Corporate Responsibility, who are
responsible for implementing and maintaining
the relevant policies, communication and training
to combat modern slavery.
Over the course of 2021 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.
WHISTLEBLOWING
We are committed to creating an environment
of trust which is open, safe and secure, and it
is important that our employees feel that they
are able to raise genuine concerns of suspected
wrongdoing without fear of suffering detriment
or being victimised. Our Confidential Reporting
and Whistleblowing policy has been developed
with the aim of encouraging employees to voice
any concerns they may have about any known or
suspected wrongdoing in strict confidence and
outlines the procedure to follow to bring this to
the Company’s attention. The policy is widely
available, and there is also annual mandatory
training on this policy. Any concerns raised
are managed by the Internal Audit and Risk
Management team, and investigation reports
are received and reviewed by the Chief Executive
Officer as well as the HR Director and Chair of
the Audit and Risk Committee.
There were four whistleblowing reports
received in the year, three relating to potential
breaches of Company policy/procedures and one
potential conflict of interest. One case remains
open at year-end. 50% of the reports received
were reported directly to executive management
with the other 50% reported via the online web
reporting portal.
POLITICAL DONATIONS
It is the Company’s policy not to make political
donations and no such political donations were
made during the period.
TAX STRATEGY
We are committed to complying with our statutory
obligations in relation to the payment of tax
including full disclosure of all relevant facts to
the appropriate tax authorities. In managing our
tax affairs, we recognise our responsibilities as a
taxpayer and the need to protect the corporate
reputation inherent in the brand.
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:
(i) the proper control and management of tax
risk; (ii) the tax position is planned in line with
the Group’s strategic objectives; (iii) the tax
charge is correctly stated in the statutory accounts
and tax returns; and (iv) 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 our website at
www.astonmartinlagonda.com.
MEMBERSHIP OF ASSOCIATIONS DURING
THE PERIOD
The Company is a member of a number of industry
bodies and trade associations around the world,
which enables the Company to create synergies
with other organisations to improve business and
to efficiently and sustainability develop industry
and society.
AUTOMOTIVE COUNCIL
BRITISH SAFETY COUNCIL
CDP
CONFEDERATION OF BRITISH
INDUSTRY (CBI)
EUROPEAN SMALL CAR
MANUFACTURERS ALLIANCE (ESCA)
FÉDÉRATION INTERNATIONALE DE
L’AUTOMOBILE (FIA)
FTSE4GOOD
ROYAL WARRANT HOLDERS
ASSOCIATION
SOCIETY FOR MOTOR MANUFACTURES
& TRADERS (SMMT)
UN GLOBAL COMPACT
WELSH AUTOMOTIVE FORUM
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 70
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED
NON-FINANCIAL
INFORMATION STATEMENT
This section of the Strategic Report constitutes
the Non-Financial Information Statement of the
Company, produced to comply with sections
414CA and 414CB of the Companies Act 2006.
The information listed in the table below is
incorporated by cross references to other areas of
the Annual Report, Sustainability Report and the
Company website where further information can
be found. The majority of policies can be found
on our website: www.astonmartinlagonda.com.
The policies mentioned below form part of
the Company’s Group policies, which act as the
strategic link between our Purpose and Values
and how we manage our day-to-day business.
POLICIES AND STANDARDS
WHICH GOVERN OUR APPROACH
• Environmental Policy
• Diversity and Inclusion Policy
• Group Health and Safety Policy
• Confidential Reporting and Whistleblowing Policy
• Gender Pay Gap Report
• Anti-Bribery and Corruption Policy
• Group Conflicts of Interest Policy
• Hospitality and Gifts Policy
• Anti-Money Laundering Policy
WHERE MATERIAL
INFORMATION CAN BE FOUND
• ESG Disclosure, pages 50-60
• Sustainability Report, www.astonmartinlagonda.com
• Stakeholder Engagement, pages 44-45
• Caring for our People and Stakeholder Engagement,
pages 61-67
• Gender Pay Gap, page 64
• Governance Report, pages 82-137
• Audit and Risk Committee Report, pages 108-114
• Remuneration Report, pages 115-137
• Gender Pay Gap Report,
www.astonmartinlagonda.com
• ESG Disclosures, page 48-75
• Governance Report, pages 88-101
• Audit and Risk Committee Report, pages 108-114
• Anti-Slavery and Human Trafficking Policy
• Modern Slavery Statement
• Modern Slavery, page 69
• Modern Slavery Statement,
• Responsible Procurement Policy
• Data Protection Policy
REPORTING REQUIREMENTS
Environmental Matters
Employees
Anti-Bribery and Corruption
Human Rights
Stakeholder
Social
• Environmental Policy
Non-Financial Key Performance Indicators
Principal Risks
Business Model
www.astonmartinlagonda.com
• ESG Disclosure, pages 68-69
• Stakeholder Engagement, pages 44-45
• s.172 Statement, pages 146
• Board Activities, pages 97
• ESG Disclosure, pages 50-60
• Stakeholder Engagement, pages 44-45
• Key Performance Indicators, pages 36-37
• Strategic Report, pages 5-81
• Our Approach to Risk, pages 38-39
• Principal and Emerging Risks, pages 40-42
• Business Model, pages 30-31
• Business Model, pages 30-31
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 71
DRIVING AMBITION:
OUR NEW ESG STRATEGY
Our new Environmental, Social and Governance
(ESG) strategy builds on our previous
Environmental Policy and aims to establish Aston
Martin as a world-leading sustainable ultra-luxury
automotive business by embedding five core
principles: tackling climate change; creating
a better environment; investing in people and
opportunity; exporting success; and delivering
the highest standards. These principles reflect
Aston Martin’s long-standing approach to ESG,
aligned with UN Sustainable Development Goals,
as well as a deepened understanding of the issues
that our customers, investors and stakeholders
care about.
“Our new ESG strategy aims
to establish Aston Martin
as a world-leading sustainable
ultra-luxury automotive business.”
Accelerating action on tackling climate change is
a key focus, with last year’s UN Climate Change
Conference underlining the urgent need for further
action. As the business moves into a new era,
now is the time to challenge ourselves to make
a bigger difference.
By 2024 we will launch a next-generation PHEV
and we are targeting the launch of our first BEV in
2025, with a fully electrified Sport/GT and SUV
portfolio by 2030. Whilst embracing electrification,
we also believe our sustainability ambitions must
be broader than producing emissions-free vehicles.
We want to ensure our own manufacturing footprint
is sustainable and produce products with the
least environmental impact possible. As well as
transforming our products, we are also transforming
how they are manufactured, and aim to achieve
net-zero emissions arising from our manufacturing
facilities by 2030, reduce supply chain emissions
by 30% by 2030, and achieve net-zero across
our supply chain by 2039. By 2025, we aim to
eliminate plastic packaging waste and reduce
water consumption by 15% compared to 2019,
whilst maximising our use of sustainable materials
and enhancing biodiversity across sites.
Other key goals of our ESG strategy include
aiming for zero accidents and to have one quarter
of leadership positions occupied by women within
the next five years. We recognise the work that we
still need to do alongside many of our peers in the
automotive sector to boost female representation
and promote diversity and inclusion more broadly.
Our new ESG strategy marks the start of a journey
towards achieving a new level of ambition and
will continue to develop over time. Our success
in delivering its goals will be driven by a long term
commitment that is powered by our enduring purpose,
constantly reaching for new heights in performance
by pioneering innovation and crafting perfection.
TOBIAS MOERS
CHIEF EXECUTIVE OFFICER
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 72
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED
A WORLD-LEADING SUSTAINABLE
ULTRA-LUXURY AUTOMOTIVE COMPANY
UNDERSTANDING WHAT MATTERS
A robust understanding of the issues our customers,
investors and stakeholders care about has always
been at the centre of Aston Martin’s approach to
ESG and is an important foundation of our new
ESG strategy. In 2021 we commissioned a new
Materiality Assessment that provided an up-to-date
view of their sustainability issues and priorities.
METHODOLOGY
The Materiality was based on a three-stage process:
desktop research, stakeholder engagement and
analysis and findings.
DESKTOP RESEARCH
The desktop research enabled us to gain a deep
understanding of issues that are frequently cited by
stakeholders in reporting frameworks, benchmarks,
ranking and indices, and investor reports. Over the
course of the desktop research, we reviewed over
60 internal and external documents resulting in
an initial ranking of issues.
STAKEHOLDER ENGAGEMENT
Stakeholder engagement was conducted to
understand the relevance and importance of
sustainability issues through:
• Survey sent to 40 stakeholders who
collectively represent a broad range of
Aston Martin’s diverse stakeholder groups
and geographic markets*
TACKLING CLIMATE
CHANGE
• Climate risks and opportunities
• Emissions from products
• Emissions from production
and operation
• Resource use and circular
economy
• Interviews with seven internal and external
• Sustainability governance and
risk management
• Innovation
• Supply chain and sourcing
SUSTAINABLE
DEVELOPMENT GOALS
stakeholders
• Facilitation of two internal focus groups.
The direct engagement also enabled us to identify
the nuances around material issues, emerging
trends and transversal challenges.
ANALYSIS AND FINDINGS
The final stage involved a detailed review of the
insights gathered from the stakeholder engagement
stage and a re-evaluation of the scores for the
issues identified in the first stage.
A final materiality list was prepared to show
the hierarchy of material issues via a material
issues framework.
* Survey responses were based on the Likert Scale, ranking from 1 (Not significant at all) to 5 (Very Significant).
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 73
CREATING BETTER
ENVIRONMENT
INVESTING IN PEOPLE
AND OPPORTUNITY
EXPORTING SUCCESS
THE HIGHEST STANDARDS
• Climate risks and opportunities
• Emissions from products
• Resource use and
circular economy
• Sustainability governance
and risk management
• Innovation
• Biodiversity
• Occupational health and safety
• Employee engagement, talent
retention, welfare and benefit
• Fair and ethical conduct
• Innovation
• Diversity and inclusion
• Human and labour rights
• Communities, social impact
and wellbeing
• Emissions from products
• Emissions from production
and operation
• Innovation
• Corporate governance and
risk management
• Product quality and safety
• Fair and ethical conduct
• Sustainability governance
and management
• Human and labour rights
• Transparency and disclosure
• Engagement and consultation
SUSTAINABLE
DEVELOPMENT GOALS
SUSTAINABLE
DEVELOPMENT GOALS
SUSTAINABLE
DEVELOPMENT GOALS
SUSTAINABLE
DEVELOPMENT GOALS
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 74
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONTINUED
OUR NEW ESG STRATEGY
PRODUCT INNOVATION
BRAND
TACKLING CLIMATE CHANGE
• TRANSFORMING PRODUCTS
• TRANSFORMING PRODUCTION
CREATING A BETTER ENVIRONMENT
• MAXIMISING SUSTAINABLE MATERIALS
• BOOSTING BIODIVERSITY
CORPORATE
STRATEGY
SUSTAINABILITY
• TRANSITIONING ASTON
MARTIN TO A WORLD-LEADING
SUSTAINABLE ULTRA-LUXURY
AUTOMOTIVE COMPANY
DELIVERING THE
HIGHEST STANDARDS
• EMBRACING INDUSTRY
BEST-PRACTICE
• PIONEERING LEADERSHIP
INVESTING IN PEOPLE
AND OPPORTUNITY
• ENHANCING SAFETY AND EMPLOYEE
WELLBEING, ADVANCING DIVERSITY
AND INCLUSION, GROWING TALENT
AND RAISING ASPIRATIONS
EXPORTING SUCCESS
• CHAMPIONING UK
MANUFACTURING
TEAM
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 75
EQUIPPED TO DELIVER:
A NEW FOCUS ON ESG
During 2021 we established a new Board
Sustainability Committee to oversee and monitor
the delivery of our new ESG strategy. We also
intensified the work of eight working groups that
harness leadership and expertise from across
the Company to achieve our ESG objectives
by developing and executing credible plans
for action.
EXECUTIVE
COMMITTEE
SUSTAINABILITY COMMITTEE
Sustainability Committee has
delegated Board authority to
approve ESG strategy and act
on ESG related matters
ASTON MARTIN LAGONDA
GLOBAL HOLDINGS PLC
RISK MANAGEMENT COMMITTEE
Key ESG issues are listed on the Group
risk register and regularly reviewed by
the Risk Management Committee
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 76
CHIEF FINANCIAL OFFICER’S STATEMENT
GROWING
OUR AMBITIONS
KENNETH GREGOR
CHIEF FINANCIAL OFFICER
The financial position of the Company has
improved substantially over the past year.
In early 2021 we completed destocking our dealer
network and have since benefitted from strong
retail demand and pricing. Operationally, we have
executed on Project Horizon, driving efficiency
throughout the business. Through these actions
we have significantly improved our profitability
and reduced our cash outflow to help deliver on
our growth ambitions and medium term plan.
“Trading performance in 2021 showed
significant improvement over the prior
year, continuing the progress we started
18 months ago. The Company has a
healthy dealer stock, an improved,
more efficient operating footprint,
and a balance sheet to support the
medium term plan.”
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 77
“Through Project Horizon, the Company took actions on
costs, including a 20% reduction in manufacturing cost per unit.”
2021 brought a c hallenging operating
environment both due to COVID-19 and supply
chain constraints. We successfully navigated
these challenges and continued to make strong
progress on the medium term plan.
Wholesale volume increased 82% in 2021
compared to the prior year due to stronger
front-engine customer demand and healthier
stock levels, a full year of DBX wholesales and
fewer lockdowns globally due to COVID-19.
In addition, retail and customer financing
decreased substantially after successfully
rebalancing our supply to demand. Together,
these factors drove revenues to £1,095m, a
79% increase over the prior year.
Through Project Horizon, the Company took
actions on costs, including a 20% reduction
in manufacturing cost per unit, thanks to
efficiency work conducted at Gaydon and St
Athan during the year. This impact, combined
with increased revenues, drove gross margin to
31% (2020: 18%). Adjusted EBITDA increased
to £138m (2020: £(70)m).
Free cashflow improved by £416m over the
prior year to £(123)m, comprising a £117m net
financing cost as well as lower-than-expected
capital expenditure of £185m, as we took a
controlled and disciplined ramp up in investment
spend. A working capital inflow of £56m was
driven by a deposit inflow of £71m related to
strong demand for our new Special vehicles,
including the Valhalla and Aston Martin Valkyrie
Spider, and a reduction in inventory of £8m as
a result of efficiency work.
The Company made the prudent decision to
issue incremental Senior Secured Notes in early
2021, contributing £77m of gross proceeds. This,
in combination with the improved free cashflow,
maintained the strong liquidity position from last
year with £419m cash on the balance sheet at
year-end (2020: £489m). Net debt was higher
at £892m (2020: £727m), partly as we faced
FX headwinds on our US dollar denominated
notes. As always, we will continue to monitor our
liquidity needs and maintain a prudent approach
to managing our balance sheet strength.
In summary, trading performance in 2021
showed significant improvement over the prior
year, continuing the progress we started 18 months
ago. The Company has a healthy dealer stock,
an improved, more efficient, operating footprint,
and a balance sheet to support the medium-term
plan. Our focus continues to be on executing
on Project Horizon through controlling costs,
improving efficiency, and launching exciting
new products to maximise shareholder value and
become the world’s most desirable ultra-luxury
British performance brand.
As this is my last letter as Chief Financial
Officer of Aston Martin Lagonda, I would like
to thank the entire team at the Company, as well
as all of our partners and shareholders for their
support. I am proud of what we have accomplished
in my time here and it has been an honour to
play my part in shaping the Company’s future
direction, helping to establish a clear roadmap
to profitability and financial stability.
KENNETH GREGOR
CHIEF FINANCIAL OFFICER
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
78
FINANCIAL REVIEW
“Revenue increased to £1.1bn largely
due to substantial volume growth,
driven by customer demand,
and strong pricing dynamics.”
£1.1bn
Revenue
SALES AND REVENUE ANALYSIS
NUMBER OF VEHICLES
Wholesale
Core (excluding Specials)
By region:
UK
Americas
EMEA ex. UK
APAC
By model:
Sports
GT
SUV
Other
Specials
FY-21
6,178
6,080
1,109
1,984
1,270
1,815
1,479
1,589
3,001
11
98
FY-20 % CHANGE
3,394
3,351
82%
81%
820
923
865
786
691
1,116
1,516
28
43
35%
115%
47%
131%
114%
42%
98%
(61%)
128%
Note: Sports includes Vantage, GT includes DB11 and DBS, SUV includes DBX and Other
includes prior generation models such as Rapide AMR
FINANCIAL HIGHLIGHTS
• Wholesales increased 82% as more
normal operations were resumed following
COVID-19 restrictions in 2020 and
completed rebalance of dealer inventory
in Q1
– Achieved core targets and delivered
over 3,000 DBXs in first full year
– Transition to ultra-luxury operating
model successfully completed with
retails well ahead of wholesales
• Revenue increased to £1.1bn largely due
to substantial volume growth, driven by
customer demand, and strong pricing
dynamics; represents 12% growth on
2019 revenues of £981m pre-COVID and
strategic shift to ultra-luxury
– Core ASP of £150k up from £136k in
2020 and a 14% improvement versus
2019 (£132k)
• Adjusted EBITDA of £138m an
improvement of more than £200m versus
2020 and £19m on 2019, with a 13%
margin; Q4 Adjusted EBITDA margin of
18% reflecting strength of trading, Specials
deliveries and Project Horizon efficiencies
– Reduced operating loss of £77m despite
increased investment in brand and
marketing activities, higher depreciation
and amortisation and non-repeat of
2020 £13m furlough credit
• Positive cash inflow from operations of
£179m; Free cash outflow of £123m, a
£416m improvement on the prior year
(£215m improvement on 2019), with
rephased capital expenditure aligned
to business plan deliverables
• Strong liquidity, year-end cash of £419m
(2020: £489m); Net debt of £892m
(2020: £727m)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
79
+131%
+115%
growth in APAC wholesales volume
growth in Americas wholesales volume
Total wholesales grew 82% to 6,178 units, driven
by strong demand across the portfolio and a
return to a more normal operating environment
post COVID-19 restrictions on manufacturing in
2020 and a successfully completed rebalancing
of dealer inventory. Q4 was the largest quarter
and skewed towards December given supply
chain constraints. Signifying the start of our core
electrification journey, deliveries of the mild-
hybrid DBX Straight-Six launched seamlessly
in China in Q4.
Geographically, both APAC and the Americas
delivered triple-digit growth over the prior
year, up 131% and 115% respectively, as
SUV demand skewed towards these regions as
expected. Combined they now represent c.60%
of total volumes.
The 98 Specials included 10 Aston Martin
Valkyrie programme vehicles.
Revenue grew to £1.1bn (2020: £612m), driven
mainly by increased wholesales along with strong
pricing dynamics. Sales of parts and servicing
increased as dealers returned to more normal
operations in most markets for the majority of the
year – with the prior year significantly impacted
by COVID-19 related restrictions on operations.
Pricing dynamics were strong, following
the successful rebalancing of dealer inventory
completed in Q1, reflecting significantly
reduced customer and retail financing support.
With demand ahead of supply and positive
geographic and product mix, core ASP increased
to £150k (2020: £136k). Total ASP of £162k
reflected the 98 Specials in the year compared
with 43 in the prior year (2020: £157k).
REVENUE BY CATEGORY
£M
Sale of vehicles
Sale of parts
Servicing of vehicles
Brand and motorsport
Total
FY-21
FY-20 % CHANGE
1,005.4
535.1
65.5
10.6
13.8
56.6
6.6
13.5
1,095.3
611.8
88%
16%
61%
2%
79%
Adjusted EBITDA was £138m, an improvement
of £208m over the prior year, with a margin of
13%. This included a £5m trade debtor write down
in Q2 related to legal action as announced on
22 June. The improved trading performance led
to a significantly reduced operating loss of £77m
(2020: £323m loss) and reflected:
• The flow through of revenue growth, a
higher number of Specials and manufacturing
efficiency actions contributing to a gross
margin of 31% (up from 18% in 2020),
offsetting the non-repeat of £13m of furlough
credits received in the prior year;
• Increased brand investment as events such
as Goodwood Festival of Speed and Pebble
Beach Concours d’Elegance resumed post-
pandemic, as well as events associated with
F1TM and the release of the James Bond film
No Time To Die;
• Higher depreciation and amortisation (D&A)
charges of £212m, up £57m on the prior
year, principally due to a full year of DBX,
the start of Aston Martin Valkyrie programme
deliveries and in Q4, accelerated depreciation
of capitalised development costs ahead
of next generation Sport/GT cars in 2023.
2021 D&A was lower than previously guided
(£225m-£235m) due to re-timing of some
Aston Martin Valkyrie programme cars; and
• A £14m benefit from exchange
rate movements.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 80
FINANCIAL REVIEW CONTINUED
SUMMARY INCOME STATEMENT AND ANALYSIS
£M
Revenue
Cost of sales
Gross profit
Gross margin %
Operating expenses1
of which depreciation & amortisation
Adjusted operating loss2
Adjusting operating items
Operating loss
Net financing expense
of which adjusting financing items
Loss before tax
Taxation
Loss for the period
Adjusted EBITDA1,2
Adjusted EBITDA margin
Adjusted loss before tax1
EPS (pence)
Adjusted EPS (pence)2
FY-21
1,095.3
(751.6)
343.7
FY-20
611.8
(500.7)
111.1
31.4%
18.2%
(418.0)
212.2
(74.3)
(2.2)
(76.5)
(336.0)
154.8
(224.9)
(98.0)
(322.9)
(137.3)
(143.1)
34.1
(68.6)
(213.8)
(466.0)
24.5
55.5
(189.3)
(410.5)
137.9
12.6%
(245.7)
(70.1)
n.m.
(299.4)
(165.9)
(200.8)
(543.0)
(369.9)
1. Excludes adjusting items;
2. For definition of alternative performance measures please see note 33 of the
Financial Statements
Adjusting operating items of £2m predominantly
related to ERP implementation costs (2020: £98m
– predominantly impairment of capitalised
development costs).
Net adjusted financing costs of £171m were up
from £75m in the prior year reflecting a full year of
the £1.1bn equivalent US$ notes issued in October
2020 and the £70m equivalent notes issued in
February 2021. The charge also includes a £12m
adverse FX charge given the US$ denomination
of the notes (2020 included a £31m FX benefit).
Adjusted loss before tax was £246m (2020: £299m
loss). The adjusting net finance credit of £34m
related to fair value movements of outstanding
warrants (2020: adjusting net finance charge of
£69m), leading to a reduced loss before tax of
£214m (2020: £466m).
The tax credit on the adjusted loss before tax
is £16m. The effective tax rate at 6.6% is lower
than the 19% standard UK tax rate mainly due to
movements in unprovided deferred tax related to
losses and a restriction on the amount of interest
that can be deducted for tax purposes. Tax on
adjusting items was recognised as appropriate
and resulted in a net tax credit of £8m, giving
an overall tax credit of £25m.
The total share count at 31 December 2021
was 116 million following the exercise of
1.5 million warrants linked to the second lien
notes. The weighted average number of shares
in 2021 was 116 million. 4.8 million warrants
remain outstanding and are exercisable until
December 2027. The Company is embedding
the first tranche of technology from Mercedes-
Benz AG into its product renewal and expansion
pipeline. There are currently no plans to issue
additional shares to Mercedes-Benz AG until
early 2023.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 81
Net cash inflow from operating activities was
£179m (2020: £199m outflow) including a net
working capital inflow of £56m. The largest
movement was receivables, a £75m increase,
given the phasing of Q4 deliveries due to
supply chain constraints in the quarter; this has
substantially unwound in the first eight weeks
of 2022. There was an offsetting £71m deposit
inflow highlighting strong demand for Aston
Martin Valkyrie Spider and Valhalla and a £53m
payables inflow principally associated with future
product rollout plans. Inventories reflected the
working capital benefits of the manufacturing
consolidations completed during the year, £8m
lower despite the step up for Aston Martin Valkyrie
build and the expanded product portfolio.
Capital expenditure was £185m, lower than the
c.£215m-£230m previously guided, as product
development plans mature, aligned to medium-
term business plan objectives. Investment was
focused on DBX derivatives, the next generation
of front-engine vehicles due to launch in 2023
and Aston Martin Valkyrie programme vehicles.
Free cashflow of £(123)m was significantly
improved on the prior year (2020: £(539)m)
reflecting the improved trading performance,
demand for Specials, tight working capital control
and planned capital expenditure phasing.
Cash inflow from financing (excluding
interest) of £52m included gross proceeds from
note issuance of £77m in February. The net cash
outflow of £72m resulted in a closing cash balance
of £419m at 31 December 2021 (31 December
2020: £489m).
CASH FLOW AND NET DEBT
£M
Cash generated/(used) from operating activities
Cash used in investing activities (excl. interest)
Net cash interest paid
Free Cash outflow
Cash inflow from financing activities (excl. interest)
(Decrease)/increase in net cash
Effect of exchange rates on cash and cash equivalents
Cash balance
£M
Loan Notes1
Inventory financing
Bank loans and overdrafts
Lease liabilities (IFRS 16)
Gross debt
Cash balance
Cash not available for short-term use
Net debt
FY-21
178.9
(185.2)
(116.9)
FY-20
(198.6)
(260.7)
(80.0)
(123.2)
(539.3)
51.5
(71.7)
1.2
418.9
922.5
383.2
(1.7)
489.4
FY-21
FY-20
(1,074.9)
(965.0)
(19.7)
(114.3)
(103.4)
(38.2)
(119.8)
(103.0)
(1,312.3)
(1,226.0)
418.9
489.4
1.8
9.9
(891.6)
(726.7)
1. US$ notes of £1.1bn equivalent (First lien of £840m at 10.5% interest maturing in
November 2025; Second lien of £259m at 15.0% split interest (8.9% cash; 6.1% PIK)
with detachable warrants maturing in November 2026). These instruments carry no-call
options of three years for the second lien and four years for the first lien.
Cash at 31 December 2021 of £419m included
£77m gross proceeds from the note issuance
completed in February. Net debt at 31 December
2021 was £892m (31 December 2020: £727m)
reflecting the free cash outflow. With the exercise
of some of the warrants attached to the second
lien notes, the Company received cash of £15m
in the year.
Gross debt includes £80m drawn down
on the RCF, broadly unchanged year-on-year
(2020: £79m), reduced inventory financing of £20m
(2020: £38m) as the Company tightly managed
working capital requirements, and a £12m FX
revaluation of the US$ denominated notes.
The Strategic Report was approved by the
Board and signed on its behalf by:
TOBIAS MOERS
CHIEF EXECUTIVE OFFICE
22 FEBRUARY 2022
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
82
CORPORATE GOVERNANCE
“IT HAS BEEN A PIVOTAL YEAR FOR THE COMPANY
WITH SIGNIFICANT PROGRESS MADE AND
TRANSFORMATIONAL CHANGES ACHIEVED.”
July 2021. I would like to thank all the former Board members for their
significant contributions and support during their time on the Board.
We also announced on 14 January 2022 that we had appointed Doug
Lafferty as our new Chief Financial Officer who will join the Company on
1 May 2022 and replaces Kenneth Gregor who for personal reasons has decided
to step down from the Board. Over the last 18 months Kenneth has played a
pivotal role in rebuilding Aston Martin Lagonda’s financial position and setting
the business on a strong pathway for the future. I would like to thank him for
his significant contribution and wish him the very best for the future.
BOARD DIVERSITY
I am pleased to report that the composition of the Board and its Committees
are now compliant with the Code and female representation on the Board
is just under 30%. Under our Board Diversity Policy, the Board seeks to
maintain a balance so that, as a minimum, one third of the Board not subject
to significant shareholder appointments are women. That percentage under the
policy is currently is 38%. However, the Board plans to continue to improve
its diversity and is committed to achieve the Parker Review recommendation
that at least one Director on the Board is from an ethnic minority background
by 31 December 2024.
SUSTAINABILITY COMMITTEE
In support of our new ESG strategy, see pages 71-75, in December 2021,
we established a Sustainability Committee at Board level which will
oversee the delivery of the Company’s ESG strategy and also oversee
broader stakeholder engagement on behalf of the Board. Further details
of the Sustainability Committee can be found on page 91. The Committee
will ensure that the Directors give clear focus and support to the Company’s
sustainability strategy, and understand the actions required for the Company
to achieve its targets and develop relevant and reliable reporting metrics,
in line with the growing body of standards in this area.
I would like to thank Board members for their significant efforts and
valuable contributions during what has been,once again, a 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
22 FEBRUARY 2022
GOVERNANCE REPORT
DEAR SHAREHOLDERS
2021 has been a pivotal year for the Company with significant progress
made and transformational changes achieved in positioning the business
as an ultra-luxury brand. My continuing priorities along with those of the
Board, were to: strengthen the Board and the executive management and
to support management actions to bring our new products to market with
the launch of the Valhalla, our first plug-in hybrid mid-engine supercar,
the Aston Martin Valkyrie Spider AMR Pro hypercar, the DBX Straight-Six
hybrid in China and the Aston Martin Valkyrie, and to aggressively destock
the dealer network and rebalance supply to demand. I am pleased to report
that we have delivered on these promises against the backdrop of COVID-19.
BOARD CHANGES
Once again, this year has been a time of significant change for the Board.
We previously disclosed the appointment of four Independent Non-
Executive Directors, Robin Freestone, Richard Parry-Jones, Antony Sheriff
and Anne Stevens, to the Board in February, and the stepping down of
Independent Non-Executive Directors William (Bill) Tame in January 2021
and Peter Espenhahn and Lord Matthew Carrington in May 2021.
We also announced the appointment of Non-Executive Director Stephan
Unger, the Representative Director for MBAG. Sadly, we learnt of the death
of Richard Parry-Jones in a tragic accident on 16 April 2021.
In July 2021 we appointed to the Board three additional Independent
Non-Executive Directors, Natalie Massenet, Marigay McKee and Amedeo
Felisa, and Franz Reiner as the Representative Director of MBAG, following
Stephan Unger’s resignation from the role. In February 2021 Amr Abou
El Seoud stepped down from the Board followed by Stephan Unger in
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
83
GOVERNANCE AT A GLANCE
BOARD CHANGES
28 JANUARY
William Thame stepped down
from the Board
1 FEBRUARY
Robin Freestone, Antony Sheriff
and Anne Stevens were appointed
to the Board as Independent
Non-Executive Directors
18 FEBRUARY
Amr Abou El Seoud stepped down
from the Board
25 FEBRUARY
Robin Freestone and Anne Stevens
became Chairs of the Audit and
Risk and Remuneration Committees
respectively and Antony Sheriff
was appointed as the SID
25 MAY
Lord Matthew Carrington and
Peter Espenhahn stepped down
from the Board
8 JULY
Amedeo Felisa, Natalie Massenet
and Marigay McKee were appointed
to the Board as Independent Non-
Executive Directors and Franz Reiner
was appointed as the Representative
Non-Executive Director of MBAG
2 DECEMBER
Kenneth Gregor, decided to step
down from the Board as Chief
Financial Officer and will leave the
Company by the end of June 2022
14 JANUARY 2022
It was announced that Doug Lafferty
would join the Board as the new
Chief Financial Officer
Governance is essential to building a successful business that
is sustainable for the longer term. Aston Martin is committed
to ensuring and maintaining high standards of corporate governance
to enhance performance and strengthen stakeholder confidence in our
business integrity.
MAJOR BOARD DECISIONS TAKEN BY THE BOARD
UP TO £70M
gross proceeds of new note issuance
under the First Lien Bond Indenture
NEW CHIEF
FINANCIAL OFFICER
Appointed
NEW ESG STRATEGY
APPOINTMENT OF
seven new Non-Executive Directors
CLOSURE OF
Defined Benefit Pension Scheme
to future accrual
GOVERNANCE IMPROVEMENTS
REVISED
Terms of Reference of Audit
and Risk Committee
CREATED NEW BOARD
COMMITTEES
Sustainability and Product Strategy
NEW
Share Dealing Code and
Procedures adopted
NEW
Diversity and Inclusion Policy,
and Anti-Slavery & Human
Trafficking Policy adopted
UPDATED POLICIES
relating to the Responsible
Procurement, Environment, Health
& Safety, Confidential Reporting and
Whistleblowing and Anti-Bribery
and Corruption
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 84
BOARD OF DIRECTORS
LAWRENCE STROLL
EXECUTIVE CHAIRMAN
TOBIAS MOERS
CHIEF EXECUTIVE OFFICER
KENNETH GREGOR
CHIEF FINANCIAL OFFICER
ANTONY SHERIFF
SENIOR INDEPENDENT DIRECTOR
20 April 2020
COMMITTEES
N R W P
1 August 2020
COMMITTEES
S W P D
22 June 2020
COMMITTEES
W D
1 Feb 2021
COMMITTEES
A N R S P
SKILLS AND RELEVANT EXPERIENCE
Lawrence joined the Company as Executive
Chairman after leading the Yew Tree Consortium
investment in the Company in April 2020.
Lawrence has a long career of acquiring and
building luxury brands and brings his wealth
of leadership and executive experience to the
Board. He has also been an active investor in the
automotive and motorsport sectors, leading a
consortium to acquire the Force One India racing
F1™ team in 2018, which was subsequently
rebranded as the Aston Martin Cognizant F1™
team in 2021.
Lawrence began his career over 30 years
ago when he purchased the licence to sell Polo
Ralph Lauren apparel in Canada and Europe,
which was followed by the acquisition of Pepe
Jeans Limited, in 1991, where he was the Group
Chief Executive Officer from 1993 to 1998,
and the subsequent acquisition in 1992 of the
Tommy Hilfiger Corporation, where he served on
the Board and was Co-Chairman from 1998 to
2002. From 2003 to 2011, Lawrence served as
Co-Chairman of Michael Kors Holdings Limited
and led the successful IPO of the company,
serving as a member of the Board until 2014.
EXTERNAL APPOINTMENTS
Member of Yew Tree Consortium
Co-owner Aston Martin Cognizant F1TM team
AMR GP Services Limited
AMR GP Limited
Owner of Circuit Mont-Tremblant, Canada
SKILLS AND RELEVANT EXPERIENCE
Tobias brings to the Board his extensive
experience in the automotive industry and
has an established track record of implementing
business transformation in a competitive
environment. Prior to joining the Company,
Tobias spent more than 25 years in senior
roles at Daimler AG, the German-based global
automotive OEM, including most recently as the
Chairman of the Management Board and Chief
Executive Officer and Acting Chief Technical
Officer of Mercedes-AMG GmbH.
For over seven years Tobias led Mercedes-
AMG’s operating and profitable portfolio
expansion and cross company efficiency,
which delivered significant margin expansion
to Mercedes, and a clear pipeline of further
expansion opportunities, in particular in
the electrification of powertrains in the
performance segment.
Tobias is an industrial engineer and was
awarded his degree from the University of
Applied Science, Offenburg.
EXTERNAL APPOINTMENTS
None
SKILLS AND RELEVANT EXPERIENCE
Kenneth brings significant financial management
and business transformation expertise to the
Board, and has a strong leadership track
record, with more than 20 years of automotive
experience. Prior to joining the Company,
Kenneth spent 20 years in senior financial
roles at Jaguar Land Rover latterly as its Chief
Financial Officer.
For eleven years as Chief Financial Officer of
Jaguar Land Rover from 2008, Kenneth 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. Kenneth was one of the executives
responsible for leading the transition of the
worldwide commercial activities of Jaguar
and Land Rover from Ford Motor Company Inc
to Tata Motors Limited, following the latter’s
acquisition of the business in 2008.
Before this Kenneth worked in investment
banking for HSBC in London advising on
mergers, acquisitions and privatisations.
Kenneth holds a BSc (Hons) in Applied
Mathematics from the University of St Andrews
and an MBA from Cranfield University.
EXTERNAL APPOINTMENTS
None
SKILLS AND RELEVANT EXPERIENCE
Antony is an experienced automotive and
luxury sector executive whose experience and
skillset span product development, marketing
and business strategy. Antony is currently the
Executive Chairman and Chief Executive Officer
of Princess Yachts Limited.
Antony started his career at McKinsey &
Company in 1988 and then held a number of
executive positions at Fiat Auto S.p.A. from 1995
to 2003. From 2003 to 2013 Antony was the
Chief Executive Officer and Managing Director
of McLaren Automotive Ltd, where he created
and built the sports car business. Since 2014,
Antony has also held several non-executive
and advisory positions with innovative start-ups
in the automotive and aerospace businesses
which are listed below.
Antony holds a BS Engineering and BA
Economics from Swarthmore College and a MS
Management from the Massachusetts Institute
of Technology, Sloan School of Management.
EXTERNAL APPOINTMENTS
Princess Yachts Limited
Pininfarina S.p.A.
(Independent Non-Executive Director)
Bugatti Rimac d.o.o.
(Independent Non-Executive Director)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
85
AMEDEO FELISA
INDEPENDENT
NON-EXECUTIVE DIRECTOR
ROBIN FREESTONE
INDEPENDENT
NON-EXECUTIVE DIRECTOR
DAME NATALIE MASSENET, DBE
INDEPENDENT
NON-EXECUTIVE DIRECTOR
LEGEND
Chair
Observer
A Audit and Risk Committee
D Disclosure Committee
N Nomination Committee
P Product Strategy Committee
R Remuneration Committee
S Sustainability Committee
W Warrant Share Committee
8 July 2021
COMMITTEES
A P
1 February 2021
8 July 2021
COMMITTEES
A N R
COMMITTEES
R
SKILLS AND RELEVANT EXPERIENCE
Amedeo brings to the Board his extensive
automotive industry and technical and
commercial experience. Amedeo spent 26
years of his career with Ferrari S.p.A, in senior
management roles, the last eight years of which
as the Chief Executive Officer.
Amedeo was the Deputy General Manager
of Ferrari S.p.A (2006-2008) and as General
Manager of the Ferrari GT division (1996-2005),
Amedeo coordinated the product development,
powertrains and vehicle departments of both
Ferrari and Maserati. While as a Technical
Senior Vice President of Ferrari (1990-1995),
Amedeo oversaw the planning, coordination
and management of the entire technical and
product development departments, which
included defining new business model plans,
supervising the development of both innovation
and products and ensuring employee growth.
Prior to joining Ferrari, Amedeo was a
product development team leader at Alfa Romeo
S.p.A. Amedeo currently holds a number of
non-executive positions in the automotive sector
which are listed below. Amedeo was awarded
a degree in mechanical engineering from the
Milan Polytechnic University.
EXTERNAL APPOINTMENTS
Atop S.p.A (Chairman)
IMA Group (Senior Advisor to the Chairman)
SKILLS AND RELEVANT EXPERIENCE
Robin trained with Touche Ross and is a qualified
chartered accountant, with significant financial,
management, business transformation and
diversification experience within leading UK
listed global businesses. Previously, Robin held
a number of senior executive finance roles
in the industrial sector (1985-2004) with ICI
plc, Amersham International plc and Henkel
Ltd where he was the Chief Financial Officer.
He subsequently joined the publishing company
Pearson plc in 2004, the last nine years of
which he served as its Chief Financial Officer.
Robin has wide non-executive director
experience and currently holds a number of
non-executive positions encompassing medical
devices, online services and luxury fashion
which are listed below and was previously a non-
executive director at eChem Limited, Chair of
the 100 Group and Senior Independent Director
and Chair of the Audit Committee of Cable &
Wireless Communications plc. Robin holds a
BA in Economics from Manchester University.
EXTERNAL APPOINTMENTS
Moneysupermarket.com (Chair and
Nomination Committee Chair)
Smith & Nephew plc
(Senior Independent Director)
Capri Holdings Ltd (Lead Director)
ICAEW’s Corporate Governance
Committee (Chair)
SKILLS AND RELEVANT EXPERIENCE
Dame Natalie brings her wealth of luxury retail
sales, marketing and commercial experience
to the Board. Natalie is the co-founder and
managing partner of Imaginary Ventures, a
capital firm focusing on innovations at the
intersection of retail and technology which
invests in and helps create the next generation
of consumer brands, retail platforms and
enterprise businesses leading the way in the
consumer ecosystem.
Previously, Natalie revolutionised luxury
retail when she founded Net-A-Porter in 1999,
and subsequently, the Outnet and Mr Porter
growing the group of brands into one of the
world’s most influential fashion businesses
operating across retail, media and publishing
platforms, while in the process shaping an
extraordinary experience for the global luxury
fashion consumer.
Natalie began her career as a journalist
and fashion editor, working at Women’s Wear
Daily and Tatler (1993-1999) before setting up
Net-A-Porter. Natalie has also held several
non-executive and advisory positions as a
Director of NuOrder Inc (2021), a Director
and Co Chairman of Farfetch Inc (2017-2020),
and the Chairman of British Fashion Council
(2012-2017). Her current external appointments
are listed below.
In 2016 she was made Dame Commander
of the British Empire in recognition of her
contributions to the UK fashion and retail
industry. Natalie was also named as one of the
100 most influential people by TIME magazine.
EXTERNAL APPOINTMENTS
Imaginary Ventures (Managing Partner)
Everlane Inc (Director)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
86
BOARD OF DIRECTORS CONTINUED
MARIGAY MCKEE, MBE
INDEPENDENT
NON-EXECUTIVE DIRECTOR
DR ANNE STEVENS
INDEPENDENT
NON-EXECUTIVE DIRECTOR
MICHAEL DE PICCIOTTO
NON-EXECUTIVE DIRECTOR
(YEW TREE CONSORTIUM
REPRESENTATIVE)
FRANZ REINER
NON-EXECUTIVE DIRECTOR
(MERCEDES-BENZ AG
REPRESENTATIVE)
8 July 2021
COMMITTEES
None
1 February 2021
24 April 2020
COMMITTEES
A N R S
COMMITTEES
A W
8 July 2021
COMMITTEES
A N R
SKILLS AND RELEVANT EXPERIENCE
Franz is an industrial engineer and has a
wealth of executive experience and a deep
understanding of the global automotive industry.
Franz joined Daimler in 1992 and in his 29
years with the Daimler Group he has held
various senior and Management Board positions
within sales, product management, banking
and financial services, in his career to date.
In his current role of Chairman of Daimler
Mobility AG and the Daimler Mobility division,
he promotes Daimler’s transformation into an
integrated, digitised financial services provider
through strategic partnerships and investments
in start-ups by providing financial, mobility and
transport services as well as developing mobility
and transport service concepts of all kinds.
EXTERNAL APPOINTMENTS
Daimler Mobility AG
(Chairman of the Board)
SKILLS AND RELEVANT EXPERIENCE
Marigay has extensive retail sales, marketing and
luxury brand experience. In 2018, Marigay co-
founded a venture fund specializing in consumer
tech called Fernbrook Capital LLC where she’s
a managing partner. Fernbrook specialises in
early stage tech investing in good for you, good
for the planet brands and is based in New York
and Los Angeles.
Marigay started her career at Estée Lauder
in Europe, and then joined Harrods in 1999 as
Head of its beauty department. In her 14 years
at Harrods, she spent the last six years as Chief
Merchant Officer where she developed and
executed a strategic vision to make Harrods the
gold standard for the exclusive launch of luxury
and premium brands. In 2013, Marigay joined
Saks Fifth Avenue in New York as its President
rebuilding Saks’s luxury launch platform for new
and emerging and international brands entering
the US, where she delivered significant market
growth. In 2015 Marigay created MM Luxe
Consulting providing strategic retail advisory
services, with her leading clients being Related,
Blackstone, Edens, and Value Retail which
complements her work at Fernbrook.
Marigay currently holds a number of non-
executive positions which are listed below. In the
recent 2022 Queen’s New Year’s Honours list,
Marigay was awarded an MBE in recognition
of her services to British retail overseas.
EXTERNAL APPOINTMENTS
Fernbrook Capital LLC (Director)
ExEShopWorld (Advisory Council Member)
The Webster (Board Member)
The Shed (Board Member)
SKILLS AND RELEVANT EXPERIENCE
Anne brings to the Board her significant operational,
commercial and transformational experience in
global businesses. Anne is an engineer who started
her career in the chemical industry with Exxon
Corporation (1980-1990), where she held roles
in engineering, product development, and sales
and marketing, before moving to automotive with
the Ford Motor Company (1990-2006). During her
16-year tenure at Ford, Anne held a number of
senior positions, culminating in her being the Chief
Operating Officer for the Americas. On retiring
from Ford, Anne joined Carpenter Technology
Corporation (2006-2009) as its Chairman, President
and Chief Executive Officer.
Anne has extensive non-executive director
experience and has previously served as Chairman,
CEO and Principal of SA IT (2011-2014), as a
Non-Executive Director on the board of XL Group
(2014-2018) (where she chaired the Operations
and Technology Committee and served on the
Risk and Finance and Audit Committees) and
Lockheed Martin (2002-2017) (where she chaired
the Management Development and Compensation
Committee and served on the Audit, Ethics and
Sustainability, and Nominations committees) before
joining GKN plc (2017-2018) as a non-executive
director where she was briefly CEO (2018) during
the hostile takeover by Melrose plc.
Anne’s current external appointments are
listed below. Anne received a BS in Materials and
Mechanical Engineering from Drexel University
in 1980 and was elected to the National Academy
of Engineering in 2004.
EXTERNAL APPOINTMENTS
Anglo American plc
(Remuneration Committee Chair and member
of the Audit and Nomination Committees)
Harbour Energy plc
(Remuneration Committee Chair)
SKILLS AND RELEVANT EXPERIENCE
Michael is a prominent investor and businessman
who has extensive experience in asset
management, private banking and trading.
From March 2016 to September 2021 Michael
was the Vice-Chairman of the Supervisory Board
of Engel & Volkërs AG, a Hamburg-based real
estate group founded in 1977, having been an
important shareholder in the firm since 2014.
In September 2021, the business was sold to
Permira, the blue-chip London-based Private
Equity firm, and Michael left the company.
Michael started his career at RBC Dominion
Securities, a global Canadian investment bank,
in 1982 where he was co-head of the Capital
Markets department in Paris and London from
1986 to 1988. He then joined Union Bancaire
Privée (UBP), a family-owned Swiss private bank
in London and Geneva where he worked for
27 years until 2015. During his tenure at UBP,
Michael held a number of senior leadership
positions including responsibility for UBP’s
global financial activities as well as running the
High Net Worth, Treasury and Trading divisions
and the London branch and the Asian chapter.
Michael also served as a long-standing member
of the Executive Board of Union Bancaire Privée
and remains a shareholder in the bank.
Michael studied at the Ecole des Hautes
Etudes Commerciales at the University
of Lausanne.
EXTERNAL APPOINTMENTS
Member of Yew Tree Consortium
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
87
EXECUTIVE COMMITTEE
TOBIAS MOERS
CHIEF EXECUTIVE OFFICER
For more information see page 84
KENNETH GREGOR
CHIEF FINANCIAL OFFICER
For more information see page 84
MICHAEL STRAUGHAN
CHIEF OPERATING OFFICER
7 December 2020
MAREK REICHMAN
CHIEF CREATIVE OFFICER
1 May 2005
SKILLS AND RELEVANT EXPERIENCE
Michael joined the business in December
2020 and is the Chief Operating Officer of
Aston Martin Lagonda, responsible for all
manufacturing operations for the Company.
Michael has over 30 years of automotive
experience, holding senior positions in Nissen,
Volvo Cars, LDV and Jaguar Land Rover, then
joining the Board of Bentley Motors before
becoming the Chief Operating Officer of luxury
yacht manufacturer Sunseeker in 2017.
Michael has a proven track record of
delivery, turnaround and restructuring, creating
shareholder value.
MARCO MATTIACCI
GLOBAL CHIEF BRAND
AND COMMERCIAL OFFICER
MICHAEL MARECKI
GENERAL COUNSEL
2 July 2007
SKILLS AND RELEVANT EXPERIENCE
Michael joined Aston Martin Lagonda in July
2007 and is the General Counsel. Michael is
responsible for all legal and regulatory matters
for the Company.
Prior to his current position, Michael worked
for the Ford Motor Company Inc (1988-2007),
latterly as the Assistant General Counsel,
Environment and Safety.
Michael holds a Juris Doctor from
Georgetown University Law Center and a
Bachelor of Arts from Fordham University.
SKILLS AND RELEVANT EXPERIENCE
Marek joined Aston Martin Lagonda in 2005
and is the Chief Creative Officer responsible
for all design developments for the Company.
During his professional career he has held
design roles at Ford, BMW, Land Rover, Rover
Cars and Nissan and Chief Designer for the
reinvention of Rolls Royce Motor Cars. Prior to
joining Aston Martin Lagonda, he was Design
Director at Ford North America.
Marek holds a BA in Industrial Design from
Teesside University and an MDes in Vehicle
Design from the Royal College of Art, London.
In 2011, Marek received an honorary doctorate
from Teesside University.
1 October 2021
SKILLS AND RELEVANT EXPERIENCE
Marco joined the business in October 2021
and is the Chief Global Brand and Commercial
Officer of Aston Martin Lagonda, responsible for
all sales and marketing and communications for
the Company.
Marco has over 30 years of automotive
experience gained all over the world. Marco spent
the first 10 years of his career at Jaguar Cars in
the UK and then moved to Ferrari, where he
spent over 15 years in the roles of CEO of Ferrari
North America, CEO of Ferrari Asia Pacific and
Managing Director and Team Principal of the
Scuderia Ferrari Formula OneTM racing team.
In 2016, Marco joined Faraday Future in
the USA, as their Global Chief Brand Officer
and Chief Commercial Officer. Since leaving
Faraday in 2017, Marco has been advising
automotive clients with McKinsey & Company.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
88
GOVERNANCE
REPORT
GOVERNANCE CONTENTS
OVERVIEW
Board Leadership and Company Purpose
89 Effective Board and its Role
90 Purpose, Values and Culture
90 Governance Framework and Board Resources
92 Stakeholder Engagement
95 Workforce Policies and Practices
Division of Responsibilities
96 Leadership of Board by Chair
96 Board Composition and Responsibilities
96 External Appointments and Conflicts of Interest
97 Key activities of the Board during 2021
Composition, Succession and Evaluation
98 Appointments to the Board
98 Board Skills, Experience and Knowledge
101 Annual Board Evaluation
Audit Risk and Internal Control
111 Financial Reporting to include External and Internal Audit Functions
112 Review of the 2021 Annual Report
113 Internal Controls and Risk Management
Remuneration
115 Linking Remuneration with Purpose and Strategy
121 Remuneration Policy
127 Remuneration Performance Outcomes
This Report sets out the Board’s corporate
governance structures and work from 1 January
2021 to 31 December 2021. Together with
the Directors’ Remuneration Report on pages
115‑137, 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
(FRC) 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.
The Governance Report has been organised to
reflect the structure and principles (A‑R) of
the Code and sets out how the Code Principles
have been applied and how the Company has
complied with the provisions.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 89
BOARD LEADERSHIP AND COMPANY PURPOSE
COMPLIANCE WITH THE UK CORPORATE GOVERNANCE CODE
The Code requires companies to describe in their 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 2021, 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 142).
Code provision 9 recommends that the chair should be independent
on appointment.
Lawrence Stroll assumed the position of Executive Chairman on 20 April
2020 and was not independent on appointment as he is a member of the
Yew Tree Consortium.
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.
While the number of Independent Non-Executive Directors comprised
at least half the Board from 8 July 2021 onwards, in January 2021 and from
late May until 8 July, with the retirement of a number of independent Non-
Executive Directors both in January and in May, the Company was not in
compliance with this provision. Following a comprehensive detailed search
process to strengthen Board membership and improve the diversity on the
Board to achieve Code compliance, as previously announced this process
culminated in the appointment of Robin Freestone, Richard Parry-Jones,
Antony Sheriff and Anne Stevens, as Independent Non-Executive Directors
with effect from 1 February 2021. With a further announcement of the
appointment of Marigay McKee, Natalie Massenet and Amedeo Felisa as
Independent Non-Executive Directors on 8 July 2021, the Company now
complies with this provision. Further information regarding the search and
selection process and the appointments is set out on page 104.
Code provision 21 recommends that there should be a formal and
rigorous annual evaluation of the performance of the board, its committees,
the chair, and individual directors. The chair should consider having a
regular externally facilitated board evaluation. In FTSE 350 companies this
should happen at least every three years. The external evaluator should
be identified in the annual report and a statement made about any other
connection it has with the company or individual directors.
The Board evaluation was due to be externally facilitated in 2021.
With the extensive number of Board changes in the year it was considered
that there would be little benefit from such an evaluation and a decision
was taken to facilitate the evaluation internally instead, with a view to
an external evaluation being undertaken in 2022. Further details can be
found on page 101.
EFFECTIVE BOARD AND ITS ROLE
The Board is composed of highly skilled professionals who bring a range
of skills, perspectives and corporate experience to the Board. The Directors
and their biographies and skills and experience are set out on pages 84-86.
The composition of the Board has undergone significant evolution
during 2021. Details of the changes to the Board during 2021 are set out
in the table on the adjacent page. At the date of this Report the 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 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 142 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.
DIRECTORS AS AT 31 DECEMBER 2021
EXECUTIVE CHAIRMAN
Lawrence Stroll
EXECUTIVE DIRECTORS
Tobias Moers (Chief Executive Officer)
Kenneth Gregor (Chief Financial Officer)
NON‑EXECUTIVE DIRECTORS
Michael de Picciotto
Franz Reiner1
INDEPENDENT NON‑EXECUTIVE DIRECTORS
Amedeo Felisa1
Robin Freestone2
Marigay McKee1
Natalie Massenet1
Antony Sheriff2
Anne Stevens2
FORMER DIRECTORS
Amr Abou El Seoud3
Lord Matthew Carrington (Chair, Remuneration Committee)4
Peter Ian Espenhahn (Chair, Audit and Risk Committee)4
Richard Parry-Jones5
William Tame6
Stephan Unger7
MEETING
ATTENDANCE
15/15
15/15
14/158
15/15
8/8
8/8
12/149
7/89
8/8
14/14
14/14
1/1
5/5
5/5
3/3
1/1
4/79
Joined the Board on 8 July 2021
Joined the Board on 1 February 2021
1.
2.
3. Ceased to be to be a Director on
18 February 2021
4. Ceased to be Directors on 25 May 2021
5. Died on 16 April 2021
6. Ceased to be a Director
on 28 January 2021
7.
Joined the Board on 1 February 2021
and ceased to be a Director on
7 July 2021
8. Kenneth Gregor recused himself from
the 1 December 2021 meeting when his
resignation was discussed
9. Directors unable to attend unscheduled
meetings due to short notice and other
prior engagements
In accordance with the Code the role of the Board is to promote the
long-term sustainable success of the Company, generate value for
shareholders and contribute to wider society. To ensure sufficient time
for discussion, the Board utilises its Committees to effectively manage its
time (see page 91). At each Board meeting the agenda ensures sufficient
time for the Committee Chairs to report on the contents of discussions,
any recommendations to the Board which require approval and the
actions taken.
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 97. 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 pages 38-43.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
90
GOVERNANCE REPORT CONTINUED
PURPOSE
VALUES
CULTURE
PURPOSE, VALUES AND CULTURE
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 Company’s purpose is “to create vehicles with
the ultimate technology, precision and craftsmanship that deliver thrilling
performance and a bespoke, class-leading customer experience”, which
sits alongside the Company’s vision “to be the world’s most desirable
ultra-luxury British performance brand”.
The purpose communicates the Company’s strategic direction and
intentions to our employees, and wider stakeholders, and it is regularly
reviewed to ensure it continues to reflect the Board’s strategy, values and
desired culture. The progress towards achieving the Company’s purpose
during 2021 can be reviewed on pages 5-26.
The Company’s I AM values, honest, transparent, accountable and
courageous articulate the qualities it embodies and its underlying approach
to doing business. The values are embedded in the operational practices
through the policies approved by the Board (see page 95) and the direct
oversight and involvement of the Executive Directors.
The Company’s culture has developed from our values and is a key
strength of the business. The Board reinforces the culture and values
through its decisions, strategy and conduct. Further information on how
our Board factors stakeholders into its decisions is on pages 44-45 and in
its section 172(1) statement on pages 46-47.
The Board monitors and assesses the culture of the Company by the
following means:
• regular meetings with management and inviting employees to
present at Board and committee meetings
• measuring the culture, such as the lost time injury rate and reviewing
the outcomes of employee engagement
• assessing cultural indicators such as: – the businesses attitude
to risk; – compliance with the Group’s policies and procedures
and – key performance indicators (KPI’s) including staff retention
and engagement;
• health and safety data
• feedback from our wider stakeholders, including our investors;
• messages received via the Group’s confidential reporting and
whistleblowing system
• training data and spend.
The annual employee survey, in addition to a question asking our
employees to describe our culture, also provides valuable insights into
what is valued and seen as corporate norms. Further information on Board
engagement with employees is on page 94. The Executive Committee has
been delegated responsibility for ensuring that policies and behaviours
set at Board level are effectively communicated and implemented across
the business.
GOVERNANCE FRAMEWORK
The Company has a clear corporate governance framework which was
established to provide clear lines of accountability and responsibility.
The governance framework is set out on the adjacent page and provides
an overview of the roles of the Board, its committees and members of the
Executive Committee.
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 Risk Committee,
Remuneration Committee, Nomination Committee and Sustainability
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.
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
• the Group’s corporate governance and compliance arrangements.
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 carry out its
duties effectively.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
91
THE BOARD
The role of the Board is to promote the long term success of the Company, generating value for shareholders and contributing to wider society
by providing effective leadership and direction to the business as a whole. It sets the Group’s strategy and ESG strategy, having regard to
stakeholders, while maintaining a balanced approach to risk within a framework of effective controls. It has also established the Company’s
purpose and values and monitors culture to ensure alignment. It sets the tone and approach to corporate governance and is responsible for the
overall financial performance of the Group.
BOARD COMMITTEES
AUDIT AND RISK COMMITTEE
Oversees the Group’s financial reporting and reviews the integrity of
the Group’s Financial Statements, the adequacy and effectiveness of the
Group’s systems of internal control and risk management, and maintains
the relationship with the External Auditor
SUSTAINABILITY COMMITTEE
Oversees the Company’s ESG strategy and broader stakeholder engagement
on behalf of the Board
WARRANT SHARE COMMITTEE
Responsible for approval of the allotment and the issue of Warrant Shares in
accordance with the terms of the Warrant Instrument
NOMINATION COMMITTEE
Reviews Board composition and diversity, proposes new Board appointments
and reviews succession planning and talent development
DISCLOSURE COMMITTEE
Responsible for the identification and disclosure of inside information and
comprises the Chief Executive Officer, Chief Financial Officer, General
Counsel, Company Secretary, and the Director of Investor Relations, Director
of Internal Audit & Risk Management, Director of Accounting Banking & Tax
and Director of Finance, Financial Planning and Analysis
REMUNERATION COMMITTEE
Determines the Directors’ Remuneration Policy and sets remuneration
for the Executive Chairman, Executive Directors and Group Executive
Committee taking into account wider Group remuneration policies.
Approves performance- linked pay schemes and share incentive plans
PRODUCT STRATEGY COMMITTEE
Oversees the Company’s product strategy and product planning
EXECUTIVE COMMITTEE
The Board delegates the execution of the Company strategy to the Executive Committee and the day-to-day running of the business.
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.
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.
FURTHER BOARD COMMITTEES
During the year further Board Committees were created to better manage
the Board’s time as follows:
SUSTAINABILITY COMMITTEE
The Sustainability Committee was established in December 2021 to ensure
that the Directors provide a clear focus and support to the Company’s ESG
strategy and targets, and understand the actions required for the Company
to achieve its targets and develop relevant and reliable reporting metrics,
in line with the growing body of standards in this area.
The role of the Committee is to oversee, on behalf of the Board, the
Company’s ESG strategy, which focuses on five strategic pillars: creating
a better environment; tackling climate change; investing in people and
opportunity; exporting success; and delivering the highest standards.
The Committee will also oversee broader stakeholder engagement on
behalf of the Board. The Committee will meet at least twice a year.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 92
GOVERNANCE REPORT CONTINUED
The Committee’s responsibilities are set out in its terms of reference which
can be found at www.astonmartinlagonda.com/investors and include:
• reviewing and making recommendations to the Board on the annual
Sustainability Report
• monitoring progress and receiving updates on the targets contained
in the ESG strategy
• reviewing and approving the annual stakeholder engagement plan;
• monitoring progress and receiving updates on the stakeholder
engagement plan
• reviewing and making recommendations to the Board on the
Group’s ethical policies and procedures
• receiving updates on the Company’s sustainability ratings and
accreditations
• receiving updates on sustainability reporting requirements
and changes to Government’s strategy, policies and laws
impacting sustainability.
The members of the Committee are Independent Non-Executive Directors
Anne Stevens (Chair) and Antony Sheriff and the Chief Executive Officer,
Tobias Moers. This Committee’s first report will appear in the Company’s
2022 Annual Report.
PRODUCT STRATEGY COMMITTEE
A further Board committee, the Product Strategy Committee was established
in January 2022 to ensure that the Directors provide a clear focus and
support to the Company’s product strategy, and product planning activities.
The role of the Committee is to oversee, on behalf of the Board, the
Company’s product strategy and product planning in particular in relation
to its technology and engineering activities as well as providing assurance
on the identification and management of key engineering, technology and
strategic product risks and execution issues. The Committee will meet at
least six times a year.
The Committee’s responsibilities are set out in its terms of reference
which can be found at www.astonmartinlagonda.com/investors
and include:
• formulating, reviewing and implementing the product strategy and
product planning of the Company, in particular in relation to its
technology and engineering activities
• reviewing the wider strategic direction in relation to the products;
• providing assurance on the identification and management of key
engineering, technology and strategic risks and execution issues.
The members of the Committee are Independent Non-Executive Directors
Amedeo Felisa (Chair) and Antony Sheriff, and the Executive Chairman,
Lawrence Stroll, the Chief Executive Officer, Tobias Moers, the Chief
Creative Officer, Marek Reichman, and the Global Chief Brand and
Commercial Officer, Marco Mattiacci. This Committee’s first report will
appear in the Company’s 2022 Annual Report.
WARRANT SHARE COMMITTEE
In October 2020 the Board established the Warrant Share Committee to
approve the allotment and issue of Warrant Shares in accordance with
the terms of the Warrant Instrument. The members of the Committee are
Executive Chairman, Lawrence Stroll, Chief Executive Officer, Tobias
Moers, Chief Financial Officer, Kenneth Gregor, and Non-Executive
Director, Michael de Picciotto. In December 2020 the Company issued
warrants pursuant to a warrant instrument (the Warrant Instrument)
to warrant holders to subscribe for ordinary shares in the Company
(the Warrant Shares). The Committee met four times this year to allot
and issue Warrant shares. See note 22 of the Financial Statements for
further details.
STAKEHOLDER ENGAGEMENT
RELATIONSHIP WITH SHAREHOLDERS,
EMPLOYEES AND OTHER STAKEHOLDERS
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 who 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. Examples of
how the Board considered stakeholder interests during the year are set
out in the Board’s s.172 statement is on page 46.
SHAREHOLDER ENGAGEMENT
The Board is committed to maintaining good communications with
existing and potential shareholders. Shareholders play a valuable role in
safeguarding the Group’s governance through, for example, the annual
re-election of Directors, monitoring and rewarding their performance and
engagement and constructive dialogue with the Board. The Group aims to
be as transparent as possible with the information it provides to investors
and welcomes face- to- face interaction. However, COVID-19 restrictions
have curtailed much of this activity, in the earlier part of the period,
replacing it with a significant increase in virtual meetings and conferences.
The Board’s primary contact with existing and prospective institutional
shareholders is through the Director of Investor Relations who is responsible
for all primary contact with shareholders, potential investors and equity
research professionals. The Executive Chairman, Chief Executive Officer,
and Chief Financial Officer provide regular engagement support together
with other executive management team members. Details of shareholder
engagement activities in 2021 are set out in the table opposite.
There is a regular programme of meetings with major institutional
shareholders to consider the Group’s performance and prospects.
The Group’s investor reach is global, and the Company has liaised
with investors in the UK, USA, Canada, France, Italy, Spain, Germany,
Switzerland, the Netherlands, Luxembourg, Norway, China, Japan and
Australia during the last financial year.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 93
GEOGRAPHIC DISPERSION
SHAREHOLDER TYPES
17%
UK
Europe
28%
(ex. UK)
North America 50%
1%
Asia
4%
Rest of World
%
%
Corporate
Stakeholder
Foreign
Institutions
Domestic
Institutions
Private
Investors
Hedge Funds
Other
41%
26%
12%
11%
6%
4%
MAIN METHODS OF ENGAGEMENT WITH SHAREHOLDERS
SHAREHOLDER
CONSULTATIONS
INVESTOR MEETINGS
INVESTOR
PRESENTATIONS
INVESTOR
CONFERENCES
AGM
The Executive Chairman, Chief Executive Officer and Chief Financial Officer met during the year, in line with COVID-19
protocols, a large number of shareholders 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. The Company will always seek to engage with shareholders when
considering material changes to either our Board, strategy or remuneration policies. In 2021 the Remuneration Committee
consulted with the largest shareholders on our revised Remuneration Policy, a summary of which is on pages 121-126.
During 2021 the Company held over 650 investor meetings with 348 individual existing and potential investors and analysts.
Due to the pandemic the majority of these were virtual meetings. The meetings were attended by a combination of the Executive
Chairman, Chief Executive Officer, Chief Financial Officer and Investor Relations team and with many also including 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. In November, 37 investors and analysts were given a tour of the manufacturing
plant and the design studio at Gaydon to see at first hand the changes that had occurred through Project Horizon.
During 2021, the Group hosted virtual webcasts for all reported results and market updates and took questions from investors and
analysts ensuring an open dialogue with the market. Due to the pandemic, roadshow activity was severely restricted.
Due to the COVID-19 pandemic, the majority of conferences moved to a virtual format. 15 conferences were attended by the
Investor Relations Team during 2021 with the Chief Executive Officer presenting at eight of these conferences.
The AGM provides an opportunity for private shareholders, in particular, to question the Directors and the Chairs of each of the
Board Committees. It was necessary to hold the 2021 AGM virtually due to the UK Government’s lockdown restrictions, however
proceedings included a Q&A session for any shareholder or interested stakeholder to ask questions of the Board. We were able
to make the proceedings of our AGM available by video to shareholders who had registered in advance.
Information on the 2022 AGM is on page 139. The Notice of AGM is issued at least 20 working days in advance of the AGM date,
to provide shareholders with the appropriate time, as set out in the FRC’s guidance on Board Effectiveness, to consider matters.
ANNUAL REPORT
CORPORATE WEBSITE
The Company’s Annual Report is available to all shareholders. Through our electronic communication initiatives, we look to
make our Annual Report as accessible as possible. Shareholders can opt to receive a hard copy in the post or PDF copies via
email or from our website.
The corporate website, www.astonmartinlagonda.com, has a dedicated Investors section which includes our Annual Reports,
results presentations (which are made to analysts and investors at the time of the interim and full year results) along with all
results and other regulatory announcements as well as further information for investors including our financial calendar for
the upcoming year.
SENIOR INDEPENDENT
DIRECTOR
If shareholders have any concerns, which the normal channels of communication to the Chief Executive Officer, Chief Financial
Officer or Executive Chairman have failed to resolve, or for which contact is inappropriate, then our Senior Independent Director
is available to address them.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 94
GOVERNANCE REPORT CONTINUED
EMPLOYEE ENGAGEMENT
The Company has an experienced, diverse and dedicated workforce
which is recognised as a key asset of the business. The Board and its
Committees routinely invite members of the management team to join
meetings to present on the matters being discussed, enabling their input
into discussions. In order to reach all employees (including individuals
engaged under contracts of service, agency workers and remote workers),
the Board utilises a combination of formal and informal engagement
methods which are detailed below.
NON‑EXECUTIVE DIRECTOR ENGAGEMENT
WITH OUR EMPLOYEES
As part of the Board’s work to better understand the views of its employees,
Anne Stevens, the Workforce Independent Non-Executive Director,
as the Company’s chosen method of workforce engagement under
the Code, is responsible to the Board for directly engaging with the
Company’s workforce. During the period, 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. Workforce engagement
during this period was led by the Chief Executive Officer and Directors
of HR and Reward who provided updates to the Board and Committees.
In 2022, the Workforce Independent Non-Executive Director proposes to
actively engage with the workforce through a series of activities including
attendance at Town Hall meetings, regularly meeting with the Company’s
employee representatives, and reviewing the outcome of employee
surveys and monitoring the effectiveness of employee engagement
programmes. More information on our workforce engagement is set out
in the table below.
The Board remains committed to a constructive two-way dialogue with
the workforce, to enable the Board to better reflect their interests in future
Company and strategic decisions, and to help ensure that the Company
is a great place to work.
HOW WE ENGAGE WITH OUR EMPLOYEES
DEDICATED
NON‑EXECUTIVE
DIRECTOR
Anne Stevens is the dedicated Independent Non-
Executive Director for gathering the views of the
workforce. In 2022 Anne will oversee and receive
updates on our employee engagement methods.
Further information on Anne’s role is detailed above
and on page 96.
TOWN HALL
MEETINGS
The Chief Executive Officer regularly hosts Town
Hall meetings to ensure all employees are kept
informed of business activity and engaged. Due to
COVID-19, virtual Town Halls were held, and when
restrictions were lifted, they were held in-person.
EMPLOYEE
SURVEYS
The Company regularly gathers feedback from
employees to assess their levels of engagement.
The Company conducts a formal annual employee
survey, designed and developed in conjunction
with an independent provider and sponsored by
the Executive Directors.
WHISTLEBLOWING
The Company’s confidential reporting and
whistleblowing facility offers an anonymous
Global reporting facility for employees to raise any
concerns, via telephone or online web-reporting.
Further information can be found on page 114.
INTRANET
Our intranet is used as a popular platform for
employees to access the Company policies and be
kept fully informed of the latest Company news.
In addition, during the lockdown restrictions, the
intranet was used to share links to useful information
on social and wellbeing, culture and entertainment,
health and safety and virtual quizzes.
WORKING
GROUPS
The Company currently operates a Diversity and
Inclusion Working Group which is comprised of
employees from across the business and chaired by
the Director of Reward and Policy. The ideas and
comments raised are fed directly into the Board.
A working group is also established after each
formal employee survey with the aim of making
recommendations to the Executive Committee on
matters raised or areas where changes could be
made to further improve employee engagement
and satisfaction.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 95
Employee
engagement has been
a key focus in 2021
WORKPLACE POLICIES AND PRACTICES
The Board and Executive Committee review and approve all key policies
and practices which could impact on the workforce and drive their
behaviours. All policies are checked to ensure they support the Company’s
purpose and reflect our values (see page 90 purpose values and culture).
Policies are published on the intranet and form part of the employee
handbook. Employees are required to confirm their understanding of the
Standards of Corporate Conduct upon recruitment and on an annual basis.
Employees are notified if there are any changes to these policies.
To ensure policies are embedded in our business practices, the Company
operates a mandatory training programme which aims to reinforce key
compliance messages in areas such as code of conduct, anti-bribery and
corruption, confidential reporting and whistleblowing, modern slavery,
equality, diversity and inclusion and conflicts of interest.
All employees and the Board are required to notify the Company as
soon as they become aware of a situation that could give rise to a conflict
or potential conflict of interest. The register of potential conflicts of interest
is regularly reviewed to ensure it remains up to date. The Board is satisfied
that potential conflicts have been effectively managed throughout the year
(see page 96).
There is an appropriate mechanism for employees and contractors to
report any concerns regarding suspected wrongdoing or misconduct.
The “Confidential Reporting and Whistleblowing” policy and procedures
are included within our employee handbook, on our Group intranet and
staff noticeboards, together with annual mandatory training. In addition,
there is an independent telephone line and online portal for anonymous
reporting of concerns.
Following receipt of a whistleblowing report there are procedures in
place to ensure an independent and proportionate investigation led by the
Director of Internal Audit & Risk Management with support from Human
Resources and/or Legal teams depending on the nature of the concern,
with any significant findings reported to the Audit and Risk Committee
and Board. The Audit and Risk Committee receives regular updates from
the Director of Internal Audit & Risk Management with details of any
such reports and on the operation of the whistleblowing procedures.
Further information on this can be found in the Audit and Risk Committee
Report on page 114.
The Board approves the Remuneration Policy for the Executive Directors
and, through the Remuneration Committee, has oversight of the wider
workforce remuneration practices (further information can be found on
pages 121-126).
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
96
GOVERNANCE REPORT CONTINUED
DIVISION OF RESPONSIBILITIES
There is clear division between executive and non-executive responsibilities which ensures accountability and oversight. The roles of Chair
and Chief Executive Officer are separately held and their responsibilities are well defined, set out in writing and regularly reviewed by the Board.
EXECUTIVE CHAIRMAN
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.
WORKFORCE NON‑EXECUTIVE DIRECTOR
The designated Non-Executive Director gathering the views of the workforce is Anne
Stevens. Views are gathered by attendance at key employee and business events,
reviewing the outcome of employee surveys and monitoring the effectiveness of
employee engagement programmes.
CHIEF FINANCIAL OFFICER
The Chief Financial Officer, Kenneth Gregor, is a member of the Executive Committee
team reporting to the Chief Executive Officer. His role is to lead the financial
management, risk, investor relations and internal control teams and to oversee
the Company’s relationship with the investment community.
THE COMPANY SECRETARY
The Company Secretary, Rachael Hambrook, 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.
INDEPENDENCE OF THE BOARD
The Board has identified which Directors are considered to be independent
on page 89.
As at 31 December 2021, 60% of the Board (excluding the Chair) are
Independent Non-Executive Directors. The Independent Non-Executive
Directors play an important role in ensuring that no individual or group
dominates the Board’s decision making and therefore it is of paramount
importance that their independence is maintained. The Board has reconfirmed
that the Independent Non-Executive Directors remain independent from
executive management and free from any business or other relationship which
could materially interfere with the exercise of their judgement.
In the year, the Chair met with the Independent Non-Executive Directors
without executive management being present. Such meetings are useful to
safeguard the independence of the Non-Executive Directors by providing
them with time to discuss their views in a more private environment.
RELATIONSHIP AGREEMENTS
At the start of the financial 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 142.
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.
Directors are required to consult with the Chair and obtain Board
approval before taking on any additional appointments. As part of the
selection process for any new Board candidates, any significant external
time commitments are considered before an appointment is agreed.
All Directors have confirmed (as they are required to do annually) that they
have been able to allocate sufficient time to discharge their responsibilities
effectively (see table on page 89 for Board meeting attendance).
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 ANNUAL REPORT AND ACCOUNTS 2021
97
KEY ACTIVITIES OF THE BOARD
The Board met for nine scheduled Board meetings and an additional six unscheduled meetings which were convened to consider the appointment of
Independent Non-Executive Directors; the approval of the AGM Notice of Meeting; the extension of the F1TM Sponsorship Agreement; the renewal of the
insurance programme; and the resignation of the Chief Financial Officer. Board attendance for the Board meetings during 2021 is set out on page 89.
KEY ACTIVITIES OF THE BOARD DURING THE YEAR
The Board’s key activities are shown below. The Company’s Section 172 Statement can be found on page 46.
STRATEGY
• Received reports from the Chief Executive Officer at each Board meeting
covering business and Project Horizon transformation plans, market and
trading performance, investor feedback and discussions from Executive
Committee meetings
• Reviewed, discussed and adopted the Group’s long term business strategy,
the Group’s ESG strategy and the Group’s new Corporate & Brand strategy
• Discussed information on COVID-19 and its continuing impact across the
business focusing in particular on the impact on the Group’s workforce,
the business plan, operational and financial performance and necessary
mitigation actions
• Reviewed and approved the £70m Bond issue
GOVERNANCE, COMPLIANCE AND REGULATORY
• Reviewed and adopted updated Group policies relating to Confidential
Reporting and Whistleblowing, Anti-Bribery and Corruption, Responsible
Procurement, Environmental, Health and Safety, Tax
• Approved new Diversity and Inclusion and Anti-Slavery & Human Trafficking
Policies, and new Share Dealing code and procedures
• Reviewed and adopted revised Audit and Risk Committee terms of reference
• Conducted the annual Board evaluation in respect of the effectiveness
of the Board and its Committees and discussed the actions to be taken
in the upcoming year
• Approved the resolutions to be put to shareholders at the AGM
• Received updates on material litigation
FINANCIAL PERFORMANCE
• Received reports from the Chief Financial Officer at each Board meeting
covering Group performance for each period, market data, budgets, outlook,
cash flow and liquidity
• Consideration and approval of the Company’s quarterly trading updates, half-
year and full-year results and market announcements, including the going
concern and viability statements
• Reviewed payment of a dividend
• Approved the Annual Report and Accounts for the financial year ended
INTERNAL CONTROLS AND RISK MANAGEMENT
• Reviewed and approved the Risk Management Policy
• Approved the principal risk assessment for interim and year-end
reporting purposes
• Received updates on Information Technology strategy and cyber security
including the progress on Project Agile, being the introduction and
implementation of a new enterprise resource planning system (ERP)
Information received on the Internal Controls Assurance Programme ahead
of any proposed new financial reporting regime (UK SOx)
•
31 December 2020
• Reviewed and approved the Group’s financing strategy and budget for 2022
• Approved the Group’s annual insurance renewal
ENVIRONMENT
• Science Based Target Accreditation application ratified
• Approved the creation of a new Board Sustainability Committee
PEOPLE & CULTURE
• On the recommendation of the Nomination Committee, approved the
appointment of Amedeo Felisa, Robin Freestone, Natalie Massenet, Marigay
McKee, Richard Parry-Jones, Antony Sheriff and Anne Stevens as new
Independent Non-Executive Directors, and Stephan Unger and Franz Reiner
as the Non-Executive Directors Representing MBAG and in January 2022,
the appointment of the new Chief Financial Officer
• Regular updates provided on people and wellbeing covering engagement
survey results, and progress against the key areas of focus
• Reports received from the Chair of the Remuneration Committee on its
activities regarding remuneration of the Executive Directors and Executive
Committee, and the fees paid to the Chair and Non-Executive Directors
• Reports received from the Chair of the Nomination Committee on its activities
•
concerning Board appointments and succession
In January 2022 approved the closure of the Company Defined Benefit
Pension Scheme
STAKEHOLDERS
• Received reports from Investor Relations on investor activity, recent
investor/analyst engagement and investor views and feedback from
investor roadshows
• Undertook Gaydon manufacturing and design studio site visits as part
of workforce engagement activities
• Received reports from the Executive Committee on customers and market
share data
• Reviewed and discussed the current and future products range
• Received regular updates on people and wellbeing covering engagement
survey results and progress against the key areas of focus
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 112) 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 144. The report of the external auditors on pages
145-153 includes a statement concerning their reporting responsibilities.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 98
GOVERNANCE REPORT CONTINUED
COMPOSITION, SUCCESSION AND EVALUATION
APPOINTMENT AND ELECTION OF DIRECTORS TO THE BOARD
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 the 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 the
Company’s Annual General Meeting (“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 MBAG as
set out on page 142, the F1TM Sponsorship Agreement as set out in the
Prospectus dated 27 February 2020 and the Supplementary Prospectus
dated 13 March 2020.
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.
BOARD SUCCESSION AND DIVERSITY
Board succession planning is focused on ensuring the right mix of
experience and skills is retained by the Board. All new appointments are
based on merit, keeping in mind that to deliver our strategy the Company
needs a Board which is diverse and inclusive. Consequently, the Company
believes 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 142. 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 while 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. As a result of
the appointment of Marigay McKee, Natalie Massenet and Anne Stevens to
the Board during the year, under the Board Diversity Policy, as at the date
of this Report, there are three woman out of eight relevant Board members
(being the two Executive Directors and six Independent Non-Executive
Directors), thereby comprising 38% of the Board.
The Board will continue to focus on Board composition and to continue
to improve diversity, with the Board aiming to achieve the Parker Review
recommendation that at least one Director on the Board is from an ethnic
minority background, by 31 December 2024.
BOARD SKILLS EXPERIENCE AND KNOWLEDGE
An effective Board requires the right mix of skills and experience. The Board
is a diverse and effective team focused on promoting the long-term success
of the Group for the benefit of all stakeholders. The Directors’ biographies
are available on pages 84-86 and the chart below provides an overview
of the skills and experience of our Directors as at 31 December 2021.
TRAINING
Tailored induction programmes were put in place for all the new Non-
Executive Directors who joined the Board during the year. These included
visits to the main operational locations, meetings with senior management
and information about the key areas of the business. Further details are
included on page 106. Continuing training and education is available to
all Directors to enable them to fulfil their responsibilities as Directors and
to develop their understanding of the business.
BOARD SKILLS AND EXPERIENCE
Number of Directors
3
Digital/eCommerce
11
People
11
Business Evolution/Strategy
6
Sustainability
9
International
8
Finance/Investment
6
Retail/Sales and Marketing
5
Luxury Goods
7
Automotive/Manufacturing
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 99
BOARD VISIT TO GAYDON MANUFACTURING PLANT AND
DESIGN STUDIO
DESIGN STUDIO TOUR
The production facility visit was followed by a
tour of the tailor-made Design Studio, which is
adjacent to the production facility. The studio is
equipped with five full-size ‘plates’ that enable
full-scale vehicle designs to be worked on
ergonomically, while also offering the studio
the opportunity to retain and develop designs
over a longer period. Senior members of the
design team explained how an Aston Martin
vehicle was designed from the inception ideas
and drawings to a full-scale model of the car
sculpted in clay. The Board was also provided
with a detailed briefing on each of the current
Aston Martin models and the future designs for
the next generation of vehicles.
In October 2021 the Board visited the
Company’s Gaydon manufacturing site and
the Car Design Studio, which gave the Board
the opportunity to meet the teams responsible
for the design and production of the Aston
Martin Valkyrie and front-engine Sport/GT car
models in 2021.
PRODUCTION FACILITY
The Board were taken around the production
facility in small groups, to see at first hand each
step in the manufacture of an Aston Martin
vehicle and at each milestone of production,
specialists from the shopfloor using explanatory
teaching boards provided a detailed overview
of the manufacturing process. The small groups
allowed for questions and easy interaction
with the employee stakeholders. The Board
were able to see the impact of the Project
Horizon transformation at the site including
the consolidation of the assembly line into
one fully flexible line capable of producing all
six Sport/GT car variants and the development
of the hybrid bay build process to improve
flexibility and agility of manufacturing.
“ The benefits of getting
to talk to employees on
the ground at one of
our major UK sites were
enormous. Not only did
we get a detailed view
of the manufacturing
process and the site
transformation but
having the opportunity
to talk to a variety of
colleagues in different
roles in an informal
setting was an excellent
way to get an insight
into the Company and
its culture.”
FRANZ REINER
NON-EXECUTIVE DIRECTOR
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 100
GOVERNANCE REPORT CONTINUED
SILVERSTONE DRIVE EXPERIENCE
To appreciate fully the luxury, and experience
of driving an Aston Martin all the Non-Executive
Directors were given the opportunity to go
to the Stowe Circuit at Silverstone, following
their visit to Gaydon, to drive the latest models
of Aston Martin cars. After receiving one-to-
one professional coaching which focused on
exploring the performance and dynamic handling
capabilities of the cars, the Non-Executive
Directors got behind the wheel and put
the cars through their paces as they lapped
the circuit.
“ What an amazing experience. These are truly
unique cars, which exude British craftsmanship in
every detail wherever you look. The performance,
handling and sound of the engine roar made for
a truly unforgettable experience.”
ANNE STEVENS
NON-EXECUTIVE DIRECTOR
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 101
BOARD AND COMMITTEE EVALUATION AND EFFECTIVENESS
2021 BOARD AND COMMITTEE REVIEW
There is an annual requirement for an evaluation of the Board and its
Committees to monitor their performance and the effectiveness of their
activities and the quality of their decisions. This evaluation is conducted
through a formal performance evaluation which considers the work of
the Board and its Committees. At least once in every three years, in line
with the Code, this evaluation should be externally facilitated. In 2019
and 2020 the evaluations were internally facilitated.
The 2021 evaluation process should have been externally facilitated.
However, the Board decided, given the appointment of all the Independent
Non-Executive Directors to the Board since the beginning of the year,
that an externally facilitated evaluation was unlikely to yield significant
benefits and that such an evaluation should be scheduled for 2022. As a
result, the 2021 performance evaluation was facilitated by the Company
Secretary by an internally-led questionnaire, in consultation with the
Executive Chairman, Chief Executive Officer and Committee Chairs.
BOARD AND COMMITTEE FINDINGS
Overall, it was the collective view of the Directors that the Board is
effective in discharging its responsibilities, operating with an open culture
that allows challenge and debate. Details of the evaluation process, its
findings, commentary and actions for progression in 2022 are set out in
the table below.
The evaluation of the Board Committees’ performance confirmed that each
Committee was effective in providing Board support. Specific findings and
the agreement of actions were overseen by each Committee Chair, with
the consideration of the overall Board findings where such findings, were
relevant to the Committees’ work. Progress will continue to be monitored
and assessed by each Committee.
CHAIR PERFORMANCE
The performance of the Chair was evaluated by the Non-Executive
Directors led by the Senior Independent Director, without the Chair being
present. The consolidated feedback, which was wholly positive in nature,
was discussed with Lawrence Stroll.
2020 BOARD AND COMMITTEE REVIEW
Due to the significant matters facing the Board, the considerable changes
to the Executive Committee and the Board and the impact of COVID-19,
it was considered appropriate to adopt an ongoing dialogue on Board and
Committee effectiveness in 2020.
2021 INTERNAL BOARD AND BOARD COMMITTEE EVALUATION PROCESS
The evaluation process of the Board and its Committees during 2021 was divided into three stages:
1
EVALUATION DESIGN
Questionnaires for the Board and its Committees
for completion by Directors were developed by
the Company Secretary in consultation with the
Executive Chairman, the Chief Executive Officer
and Committee Chairs. Questions were set in
consideration of the relevant findings from the
ongoing dialogue in 2020 and in line with best
practice and revised guidance such as the Code
and Guidance on Board Effectiveness.
Directors were also encouraged in responding to
the questionnaires to provide additional comments
where appropriate.
The anonymised responses were collated by
the Company Secretary, who then prepared draft
reports which summarised the findings and included
proposed recommendations for discussion and
actions for the forthcoming year. These reports were
reviewed by the Executive Chairman and relevant
Committee Chairs for feedback and comment.
2
3
EVALUATION PROCESS
Questionnaires were issued to the Board
members, the Company Secretary and to those
who regularly attend various Board Committees
such as the External Auditors, the remuneration
consultants and the Director of Internal Audit and
Risk Management.
Directors were asked to score each question
using a scale of 1 (extremely dissatisfied) to 10
(extremely satisfied).
DISCUSSION AND ACTIONS
The relevant report with the findings of the respective
evaluations was presented at the corresponding
Board and Committee meetings on 16 December
2021. Following a review and discussion of the
findings and the recommendations, actions were
agreed for the forthcoming year to improve areas
noted by the evaluations.
FINDINGS AND ACTIONS
The evaluations covered areas including Board
composition and expertise, the Company’s
performance, culture, risk management
and internal controls and Board and
Committee governance.
The findings of the evaluations indicated that
overall, the Board and its Committees performed
well. However, the evaluations highlighted that
there were areas of further improvement and the
Board agreed a number of actions to improve the
effectiveness of the Board to support the business
over the next year:
• Additional focus on culture, diversity
and inclusion and internal talent and
succession planning
• Building on the existing understanding
of the views and expectations of
stakeholder population
• Arranging deep dives and discussion time
for certain topics relevant to the Board
• Building on its existing understanding of
the processes for assessing and ensuring the
alignment of the Company’s corporate culture
and operational practices with its purpose,
strategy and values
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
102
GOVERNANCE REPORT CONTINUED
NOMINATION COMMITTEE REPORT
The key focus of the Committee following these appointments was to
further strengthen the Board and improve its diversity by recruiting an
additional number of Non-Executive Directors with relevant automotive
or luxury industry experience and a track record in either an executive
or non-executive capacity, combined with Board-relevant qualities
and skills.
This search culminated in the announcement in July 2021 of
the appointment to the Board of three Independent Non-Executive
Directors, Amedeo Felisa, Natalie Massenet and Marigay McKee. We also
announced the appointment of Non-Executive Director Franz Reiner, the
Representative Director for Mercedes-Benz AG, following the resignation
of Stephan Unger from that role.
It was further announced on 2 December 2021, that Kenneth Gregor
had decided to step down from the Board as Chief Financial Officer for
personal reasons and following a successful search for his successor we
announced on 14 January 2022 the appointment of Doug Lafferty as the
new Chief Financial Officer, who will join the Board on 1 May 2022.
DIVERSITY
The Board has been working towards achieving the recommendations of
the Hampton-Alexander Review to have 33% female representation on
its Board, and I’m pleased to report that with the recent Non-Executive
Director appointments this target has been achieved in line with the
Company Board Diversity Policy. However, it is recognised by the Board
that the gender balance of the leadership positions in the Company remains
an area for further improvement, and the Company has set itself a target
that at least 25% of the leadership positions will be occupied by women
within the next five years.
LOOKING AHEAD
In 2022, the Committee will continue to consider succession planning
for the executive and senior management positions together with the
improvement of diversity for the senior management in the Company
and the Board, with the Committee aiming to achieve the Parker Review
recommendation that at least one Director on the Board is from an ethnic
minority background by 31 December 2024.
I look forward to reporting on our further progress in 2022.
LAWRENCE STROLL
CHAIR, NOMINATION COMMITTEE
22 FEBRUARY 2022
“It’s our ambition that by 2026 least
25% of the leadership positions in the
Company will be occupied by women.”
DEAR SHAREHOLDER
On behalf of the Nomination Committee I am pleased to present the
Committee’s Report for the year ended 31 December 2021. The Report
details the role of the Committee and describes how the Committee has
carried out its responsibilities during the year.
BOARD APPOINTMENTS
As previously reported, following the significant changes to the Board in
2020, we announced in January 2021 the appointment of four 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, and
that Peter Espenhahn (Audit and Risk Committee Chair) and Lord Matthew
Carrington (Remuneration Committee Chair) would be stepping down from
their Chair roles on the publication of our annual results on 25 February
2021 and from the Board at the close of the AGM on 25 May 2021.
Richard Parry-Jones was tragically killed in an accident on 16 April 2021.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
103
ROLE AND RESPONSIBILITIES OF THE COMMITTEE
The Committee’s role is to provide oversight of the leadership needs
of the business, both Executive and Non-Executive, with a view to
ensuring the continued ability of the Company to compete effectively in
the marketplace, to implement the strategy and achieve the Company’s
objectives. The Committee takes into account the challenges and
opportunities facing the Company and the skills, experience and
knowledge required for the future.
KEY RESPONSIBILITIES INCLUDE:
• Reviewing the structure, size and composition of the Board
to ensure it has the proper balance of skills, experience,
independence, and diversity, and of its Committees and making
recommendations to the Board on any changes required to meet
current and future needs
• Succession planning for Directors and senior executives and
ensuring that plans and processes are in place for the orderly
succession of Directors, Executive Committee, and other key
members of the senior management team
• Overseeing the development of a diverse talent pipeline for
succession, considering the challenges and opportunities facing
the Company and the skills, experience and knowledge required
of the Board in the future
• Identifying and nominating candidates to fill Board vacancies
for approval by the Board, approving changes to the Executive
Committee, and ensuring that the procedure for appointing
Directors is formal, rigorous, transparent, objective, merit-based
and has regard for diversity
• Reviewing the Non-Executive Directors’ time commitment,
independence and external appointments, and the annual
performance evaluation results relating to the composition
of the Board
• Keeping under review potential conflicts of interests of Directors
disclosed to the Company and reviewing annually any conflict
declarations by the Directors and any conflict authorisations
granted by the Board
• Making recommendations for the re-election by shareholders
of each Director having due regard to their performance,
ability and contribution to the Board in the light of their skills,
experience and knowledge
• Annually reviewing the Committee’s terms of reference,
which are available on the Company’s website at
www.astonmartinlagonda.com
DIRECTORS AS AT 31 DECEMBER 2021
MEETING ATTENDANCE
Lawrence Stroll
Amr Abou El Seoud1
Matthew Carrington2
Peter Espenhahn2
Robin Freestone
Franz Reiner
Antony Sheriff
Anne Stevens
William Tame3
Stephan Unger4
3/3
1/1
1/1
1/1
2/2
1/1
2/2
2/2
1/1
1. Amr Abou El Seoud stepped down from Board on 18 February 2021
2. Matthew Carrington and Peter Espenhahn stepped down from the Board on 25 May 2021
3. William Tame stepped down from the Board on 28 January 2021
4. Stephan Unger did not attend any Committee meetings and stepped down from the Board
on 8 July 2021
COMMITTEE MEMBERSHIP AND COMMITTEE MEETINGS
The Committee currently consists of the Executive Chairman Lawrence
Stroll who is Chair of the Committee, and three Independent Non-Executive
Directors, Robin Freestone, Antony Sheriff and Anne Stevens who were
all appointed to the Committee on 1 February 2021.
In addition as the Relationship Agreements with the significant
shareholder groups (see page 142) provide that each may appoint a
Director to the Committee, Franz Reiner was appointed to the Committee
as the Representative Director for Mercedes-Benz AG, on 8 July 2021.
Former members of the Committee who have since resigned during
the year are detailed in the table above. Richard Parry-Jones joined the
Committee on 1 February 2021 but died in an accident on 16 April 2021.
Attendance at each meeting comprises the Committee members, the
Company Secretary who is secretary to the Committee and at the request
of the Committee, the Chief Executive Officer, General Counsel, Director
of HR, Director of Reward, and other members of the senior management
team and external advisors who may be invited to attend all or part of any
meeting, as and when appropriate.
The Committee meets at least twice a year and has formal terms
of reference which can be viewed on the Company’s website,
www.astonmartinlagonda.com. The Committee met three times during the
year, with all meetings held via video conference. The Committee members‘
attendance for the period is set out in the table above. Committee meetings
usually take place prior to a Board meeting. The activities of the Committee
and any matters of particular relevance were reported by the Committee
Chair to the subsequent Board meeting.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
104
NOMINATION COMMITTEE REPORT CONTINUED
KEY ACTIVITIES OF THE COMMITTEE DURING THE YEAR
The Committee discussed the following key matters during the year:
•
•
Reviewed the size, structure and composition of the Board and the
Executive Committee with respect to the needs of the business
The appointment of seven Independent Non-Executive Directors and the
appointment of two Representative Directors from MBAG, to the Board
• Reviewed the Board Diversity Policy
•
Reviewed the findings of the 2021 Board evaluation with respect to the
composition of the Board and its Committees (refer to page 101)
• Reviewed the findings of the Committee evaluation report
• Reviewed Directors’ potential conflicts of interest and independence
• Reviewed and approved revised Committee terms of reference
BOARD AND COMMITTEE COMPOSITION
BOARD COMPOSITION
The Committee led the selection and appointment process for the
recruitment of the additional Independent Non-Executive Directors to
the Board. As previously reported the Committee retained a specialist
search firm, Savannah Group, to conduct a wide-ranging Independent
Non-Executive Director search. Savannah Group was also engaged by the
Company in connection with recruitment of senior management positions
during 2021. Savannah Group does not have any other connection with
the Company or individual Directors. The brief, which was in line with the
Board’s composition and diversity principles, was to identify candidates
with relevant automotive or luxury industry experience 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 its aims
relating to Code compliance and diversity.
As a result of this process, in January 2021 the Company announced
the appointment of four Independent Non-Executive Directors Robin
Freestone, Richard Parry-Jones, Antony Sheriff and Anne Stevens. It also
announced the appointment of Non-Executive Director Stephan Unger,
the Representative Director for Mercedes-Benz AG, and that Peter
Espenhahn (Audit and Risk Committee Chair) and Lord Matthew Carrington
(Remuneration Committee Chair) would step down from their Chair roles
on the publication of the 2020 annual results on 25 February 2021 and
from the Board at the close of the AGM on 25 May 2021. Richard Parry-
Jones died in an accident on 16 April 2021.
In continuing the search to strengthen the Board and improve its
diversity, the Company made a further announcement on 8 July 2021
that it had appointed to the Board three further Independent Non-
Executive Directors, Amedeo Felisa, Natalie Massenet and Marigay
McKee. In addition, it also announced the appointment of Non-Executive
Director Franz Reiner, the representative director for Mercedes-Benz AG,
following the resignation of Stephan Unger from that role.
Following the announcement on 2 December 2021 that Kenneth
Gregor had decided to step down from the Board as Chief Financial
Officer for personal reasons, a search process led by the Committee
Chair commenced which saw the engagement of Odgers Berndtson to
undertake a comprehensive search for a new Chief Financial Officer.
Odgers Berndtson was not engaged by the Company for any other purpose
during 2021and Odgers does not have any other connection with the
Company or individual Directors. The brief was to find a candidate to
support the Company in its future ambitions with the required professional
financial skills who had served in a public company and had experience
of the automotive or luxury sectors. On 14 January 2022 the Company
announced the appointment of Doug Lafferty as the new Chief Financial
Officer. Mr Lafferty will join the Board on 1 May 2022.
The Board and Committees composition are currently compliant with
the Code (see page 89 of the Governance Report).
The Committee intends to continue to focus on Board composition and
improve its diversity, with the Board looking to achieve the Parker Review
recommendation that at least one director on the Board is from an ethnic
minority background by 31 December 2024.
COMMITTEE COMPOSITION
The composition of the Company’s Board Committees is designed to
ensure that there is alignment between skillset and specific Committee
responsibilities, and thus prevent undue reliance on the capacity of any
one Director and to comply with recognised guidance including the
Code. Changes are recommended following Directorate appointments
and succession, or in response to formal review. In the year, the Board
approved recommendations resulting in the changes below:
• Anne Stevens joined the Audit and Risk, Nomination and
Remuneration Committees on 1 February 2021 and became Chair
of the Remuneration Committee on 25 May 2021 and Chair of the
Sustainability Committee on 16 December 2021
• Robin Freestone joined the Audit and Risk, Nomination and
Remuneration Committees on 1 February 2021 and became
Chair of the Audit and Risk Committee on 25 May 2021
• Antony Sheriff joined the Audit and Risk, Nomination and
Remuneration Committees on 1 February 2021, the Sustainability
Committee on 16 December 2021 and the Product Strategy
Committee on 17 January 2022
• Amedeo Felisa joined the Audit and Risk Committee on 8 July 2021
and was appointed Chair of the Product Strategy Committee on
17 January 2022
• Natalie Massenet joined the Remuneration Committee on 8 July 2021
• Tobias Moers joined the Sustainability Committee on 16 December
2021 and the Product Strategy Committee on 17 January 2022
• Lawrence Stroll joined the Product Strategy Committee on
17 January 2022
The membership of the three principle Committees, Audit & Risk,
Remuneration and Nomination, is currently compliant with the Code
(see page 89 of the Governance Report).
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
BOARD INDUCTION
MARIGAY MCKEE
105
In July Marigay McKee was welcomed to
the Board and she was offered a bespoke
comprehensive induction programme, which
is tailored to each Director’s individual skills
and experiences and their roles on the Board.
The induction programme covered a range
of areas across the business, including one-
to-one meetings with senior executives to
understand the roles played by the Company’s
senior employees and the specific challenges
facing the business and the progress of
Project Horizon.
Training was also provided by our lawyers,
Freshfields Bruckhaus Deringer, explaining the
legal and regulatory background to her role on
the Board which covered Section 172 obligations
and Directors’ general duties, Market Abuse
Regulations and Financial Conduct Authority
requirements, UK Corporate Governance Code
and Related Party Transactions. Most of the
one-to-one meetings were held virtually due to
the ongoing pandemic. However, Marigay was
able to visit a number of locations in the USA,
where she lives, and once restrictions were lifted
participated in the Gaydon site visit, details of
which can be found on page 99. Now that travel
and meeting restrictions are lifted, Marigay will
continue her induction programme with more
site visits, meeting customers and employees and
getting more familiar with all the latest models
of Aston Martin cars.
A summary of Marigay’s key induction visits
and events is set out below.
TABLE OF EVENTS BY MONTH IN 2021
July
Individual meetings with Executive Chair, Executive Directors, other Non-Executive Directors
•
• Directors‘ training provided by Freshfields Bruckhaus Deringer
August
• Attended the global launch of the new Aston Martin Valhalla and the Aston Martin
Valkyrie Spider at the “Pebble Beach” Concours d’Elegance at Pebble Beach, California
• Site visit to the Beverly Hills Aston Martin Dealership
September •
Individual meetings with Executive Committee members and senior management
October
• Operational site visits to the production facility at Gaydon and the Design Studio
• Aston Martin Driving Experience at Silverstone
“ My induction was very
comprehensive and I
was so impressed with
the level of training,
the knowledge of the
staff, and the iconic
heritage of the brand
was well highlighted
and expressed with
passion, pride and
commitment by all.
From our Chairman’s
vision for the brand
to the manufacturing
plant’s commitment to
excellence in quality,
design, sophistication
and technology, it
reinforced for me why
Aston Martin is the most
iconic, luxury British
brand today.”
MARIGAY MCKEE
NON-EXECUTIVE DIRECTOR
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 106
NOMINATION COMMITTEE REPORT CONTINUED
DIRECTOR INDUCTION
Following appointment, all Directors receive a comprehensive and tailored
induction programme which is designed through discussion with the Chair
and the Company Secretary having regard to existing expertise and any
prospective Board Committee roles. The induction includes but is not
limited to face-to-face meetings with Board members and the Executive
team as appropriate, briefings on the Company’s strategy, investor relations,
Board and Company policies, processes and procedures and training on the
role of a director of a listed company. All new Directors are also provided
with access to the Company electronic Board paper system which provides
easy and immediate access to all key governance documents, including
Board and committee papers, and terms of reference.
In addition, new Directors also undertake site visits to enhance
and develop their understanding of the business and the workforce.
Where appropriate, new Directors also meet with institutional investors, the
Company’s External and Internal auditors and remuneration consultants.
Continuing training and education opportunities are available
to all Directors to support the fulfilment of their individual duties or
collective Board role and to develop their understanding of the business.
The arrangements are overseen by the Company Secretary and can be
internally or externally facilitated. Directors are also encouraged to
participate in seminars and events hosted by external organisations in
different sectors to keep abreast of broader societal trends, expectations
and issues with a view to developing broader perspectives and insights
and developing wider debate within Board discussions.
During the year, opportunities for the Board to meet individuals in
person were limited due to COVID-19; however, the Board is looking
forward to resuming these arrangements during 2022.
SUCCESSION PLANNING
The Board has a duty to ensure the long term success of the Company, which
includes ensuring that it has a steady supply of talent for executive positions
and established succession plans for Board positions. Throughout the year
the Committee has reviewed and assessed the composition of the Board
and its aggregate skills, experience and knowledge and the current and
future needs of the Board as new appointments to the Board have been
made, see page 104. The Committee will continue to consider the Group’s
succession planning on a regular basis to ensure that any further changes
to the Board are proactively planned and coordinated.
The Committee monitors the development of the Executive team to ensure
that there is a diverse supply of senior executives and potential future Board
members with appropriate skills and experience. In late 2020 and in 2021
the Executive Committee was strengthened by the appointment of Michael
Straughan as Chief Operating Officer and Marco Mattiacci as Global Chief
Brand and Commercial Officer, respectively. Their biographies and those of
the other members of the Executive Committee can be found on page 87.
As at 1 January 2022, the Executive Committee consists of six executives.
Further information on the role of the Executive Committee is on page
91. The Executive Committee considers the adequacy of the Group’s
succession plans below the Board as part of its ESG strategy review
and, through the Director of HR, it provides updates to the Committee.
The Group’s talent pipeline has been strengthened through a number of
external appointments, including the recruitment of: Renato Bisignani
(Head of Global Marketing and Communications), Ralph Illenberger
(Head of Powertrain Engineering), Drummond Jacoy (Head of Engineering
and Procurement), Paul Smyth (Head of Sales Operations and Network
Development), Adam Chamberlain (Regional President for Americas) and
Patrick Marinoff (Regional President for EU & MENA).
CONFLICTS OF INTEREST AND INDEPENDENCE
Each Director has a statutory duty to disclose any actual or potential
conflict of interest situations for consideration and approval by the Board
as they arise. The Committee is responsible for reviewing the procedures for
assessing, managing and, where appropriate, recommending the approval
of any conflicts of interest to the Board. These procedures are supported by
an annual conflicts authorisation process, whereby the Committee reviews
the Directors’ Conflicts of Interest Register and seeks confirmation from
each Director of any changes or updates to their position.
Prior to the approval of this Report, the Committee has reviewed all
situational conflicts of interest that the Board has authorised and concluded
that the potential conflicts had been appropriately authorised and no
circumstances existed which would necessitate that any prior authorisation
be revoked or amended, and that the authorisation process continued to
operate effectively during the year.
In the light of the above process, the Committee reviewed the
independence of each Non-Executive Director and was satisfied that all
Independent Non-Executive Directors remain independent under the
definition in the Code. Furthermore, the Committee was also satisfied
as part of this process that each of the Non-Executive Directors commits
sufficient time to fulfil their Board responsibilities. Additional safeguards
to support Director independence of thought and judgement include
meetings between the Chair and the Non-Executive Directors, without the
Executive Directors being present, to discuss areas relevant to the operation
and performance of the Board and the Company, which enables the Non-
Executive Directors to provide constructive challenge and separate and
clearly defined roles for the Chair and the Chief Executive Officer.
COMMITTEE PERFORMANCE EVALUATION
The Committee was evaluated as part of the internal effectiveness review of
the Board and its Committees (details of which can be found on pages 101).
The Committee also reviewed its own performance and was satisfied that
it continued to perform effectively and was rated highly by the members
and other respondents to the evaluation survey. The conclusion of the
evaluation was that the Committee remains focused on key themes of
succession planning and Board composition.
DIVERSITY AND INCLUSION
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 the Company strategy
it is important to promote a high-performing culture, characterised by a
diverse and inclusive workforce.
Diversity and inclusion bring new ideas and fresh perspectives which
fuel innovation and creativity, and therefore we need to actively work to
attract, retain and develop employees to improve our talent pipeline (further
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
107
information on page 62. The Diversity and Inclusion Working Group chaired
by the Director of Reward and Policy, which reports to the Sustainability
Committee, authored the new Diversity and Inclusion Policy, which was
approved by the Board at its meeting in December. The working group has
set itself a number of targets including a commitment to collect and publish a
wider set of demographic data, to reach a target of 25% females in leadership
positions by 2026, and relaunching the Aston Martin Female Advisory Board.
The Board recognises that a diversified Board brings constructive
challenge and fresh perspectives to discussions. The Committee considers
diversity, in its widest sense (and not limited to gender), during Board
composition reviews and the development of recruitment specifications
in connection with appointment of new Board members.
In formulating the Board Diversity Policy the Committee recognised
the Davies Report and the Hampton-Alexander Review target for women
to represent at least 33% of Boards by 2020, while 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 142). 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 are three woman out of eight relevant Board members (being
the two Executive Directors and six independent Non-Executive Directors),
thereby comprising 38% of the Board.
It is acknowledged that the Company needs to further improve its
diversity balance on the Board, principally in the area of ethnic diversity,
and the Board, and with assistance from the Committee, is committed to
achieve the Parker Review recommendation that at least one Director on
the Board is from an ethnic minority background, by 31 December 2024.
It is further acknowledged that the Company needs to do more in the
area of diversity including in relation to the senior management positions
of the Company, and this will be a continued focus for the Committee.
BOARD DIVERSITY AT A GLANCE
BOARD COMPOSITION
AVERAGE AGE OF BOARD
60 YEARS
Executive Directors 2
Independent Non-Executive Directors 6
Representative Non-Executive Directors 2
Chairman 1
50-60 years old 7
60-70 years old 2
70+ 2
Average age: 60 years
SENIOR LEADERSHIP AND
SENIOR MANAGEMENT TEAMS
BOARD GENDER DIVERSITY
Directors as at 31 December 2021
Male 83%
Female 17%
Male 8
Female 3
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
108
GOVERNANCE REPORT CONTINUED
AUDIT AND RISK COMMITTEE REPORT
“It has been a transitional year for
the Committee where, against a
backdrop of COVID-19, a good
deal has been achieved.”
On behalf of the Audit and Risk Committee, I am pleased to present the
Committee’s Report for the year ended 31 December 2021. The Report
details the role of the Committee and describes how the Committee has
carried out its responsibilities during the year and provided assurance on
the integrity of the 2021 Annual Report and Accounts.
COMMITTEE APPOINTMENTS
2021 has been a year of transition for the Committee, with Anne Stevens
and Antony Sherriff and myself all being appointed members with effect
from 1 February 2021. I took up the role of Audit and Risk Committee
Chair on 25 February 2021. Peter Espenhahn stepped down from the
Board together with Matthew Carrington, who was also a member
of the Committee, on 25 May 2021. I would like to thank Peter and
Matthew for their invaluable contributions to the work of the Committee.
Subsequently on 8 July 2021 Amedeo Felisa, the former Chief Executive
Officer of Ferrari, was appointed to the Board and joined the Committee.
COVID-19
The COVID-19 pandemic caused significant disruption and required
adjustment to the way we work and provide oversight. This meant
that the financial reporting and audit process had to adapt in the light
of the COVID-19 restrictions. Despite the disruption that has been
caused by the pandemic, the Committee was pleased with the work and
commitment shown by the Company’s finance team and the Internal and
External Auditors.
CLIMATE CHANGE
The Company has implemented the recommendations of the Taskforce
on Climate-Related Financial Disclosures (TCFD), and has presented its
initial TCFD report which can be found on pages 54-59. As a premium
listed PLC, we are required to include these disclosures within our Annual
Report, together with a statement confirming that we have made disclosures
consistent with the TCFD, or if not explain why. The Group is committed
to being net-zero in its manufacturing facilities by 2030, in line with our
new ESG strategy, see pages 71-75.
AUDIT AND FINANCIAL REPORTING REFORM
Looking ahead, the Committee will monitor audit and financial reporting
governance reform recommendations and the Group’s response.
In particular, the Committee will monitor the preparation of an Audit and
Assurance Policy.
Finally, I would like to thank the members of the Committee, the
management team, Internal Audit and Ernst & Young for their continued
commitment throughout the year, for the open discussions that take place
in our meetings and for the contribution they all provide in support of the
Committee’s work.
ROBIN FREESTONE
CHAIR, AUDIT AND RISK COMMITTEE
22 FEBRUARY 2022
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
109
2022 AREAS OF FOCUS
• Continue to monitor the implementation of the business
strategy and its impact on the Group’s internal control and risk
management framework
• Continue to monitor the Internal Audit findings and the status
of open Internal Audit actions
• Oversee the delivery of the Internal Control improvement
project and
• Project Agile Implementation
ROLE AND RESPONSIBILITIES OF THE COMMITTEE
The Committee’s role is to provide oversight of the Company’s financial and
narrative reporting statements; to monitor the effectiveness of systems of
internal control and risk management; and to monitor the integrity of the
Group’s external and internal audit processes. Key responsibilities include:
• Reviewing and assessing the integrity of the Group’s financial and
narrative statements and formal announcements of the Group’s
performance and significant financial reporting issues and judgements
which they may contain and recommending these for approval
by the Board
• Advising the Board on whether the Annual Report and Accounts, taken as
a whole is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Company’s performance, business
model and strategy
• Ensuring compliance with accounting standards and policies, and
reviewing and challenging the application of such standards and policies
and, if unsatisfied, reporting its views to the Board
• Reviewing for approval by the Board the Company’s going concern
and viability statements and providing advice to the Board on how
the Company’s prospects have been assessed, taking into account the
Company’s position and principal risks
• 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 and assessing whether non-audit services
have a direct or a material effect on the audited financial statements
• Reviewing the Group’s internal financial, operational and compliance
controls and enterprise risk management framework and system and
considering Group policies for identifying and assessing risks and
arrangements for employees to raise concerns (in confidence) about
possible improprieties while ensuring appropriate safeguards are in place
• Reviewing and approving the annual Internal Audit programme
and discussing the findings of any internal investigations and
management’s response
• Annually reviewing the Committee’s terms of reference, which
are available on the Company’s website at www.astonmartinlagonda.com
• Reporting to the Board on how it has discharged its duties
To enable the Committee to discharge its responsibilities, discussions on
a broad range of topics and reports were held with management, Internal
Audit and the External Auditors throughout the year. This provided the
Committee with insight into the progress towards the Company’s strategic
goals and the challenges and risks, and how they are being managed.
The Committee has an open dialogue throughout the year with the
Director of Internal Audit and Risk Management and the External Auditors
in order to raise challenges and questions to support understanding while
sharing experience and an independent perspective.
COMMITTEE MEMBERSHIP AND COMMITTEE MEETINGS
The Committee currently comprises four Independent Non-Executive
Directors, Robin Freestone who is Chair of the Committee, Antony Sheriff
and Anne Stevens, who all joined on 1 February 2021 and Amedeo Felisa
who joined on 8 July 2021. Former members of the Committee who
resigned during the year are detailed in the table below. Richard Parry-
Jones joined the Committee on 1 February 2021, but died in an accident
on 16 April 2021.
In accordance with the Relationship Agreements with the significant
shareholder groups (see page 142), each may appoint an observer of the
Committee with no voting rights. Michael de Picciotto and Franz Reiner
currently serve as observers. Stephan Unger ceased to be an observer on
7 July 2021.
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). This year the
Committee met five times with all meetings held via video conference
due to the on-going COVID-19 restrictions. The Committee members’
attendance for the period is set out in the table below. Committee meetings
usually take place prior to a Board meeting. The activities of the Committee
and any matters of particular relevance were reported by the Committee
Chair to the subsequent Board meeting.
There is time available at each meeting for the Committee to discuss
matters with key individuals such as the External Auditor and the Director
of Internal Audit and Risk Management, without members of management
being present.
DIRECTORS AS AT 31 DECEMBER 2021
MEETING ATTENDANCE
Robin Freestone
Matthew Carrington1
Peter Espenhahn1
Amedeo Felisa
Richard Parry-Jones2
Antony Sheriff
Anne Stevens
5/5
2/2
2/2
3/3
2/2
5/5
5/5
1. Matthew Carrington and Peter Espenhahn stepped down from the Board on 25 May 2021
2. Richard Parry-Jones died on 16 April 2021
Attendees at each meeting comprise the Committee members, the
Observers and the Company Secretary who is secretary to the Committee.
The Executive Chairman, the Chief Executive Officer, the Chief Financial
Officer, the General Counsel, the Director of Internal Audit & Risk
Management, the External Auditors, Ernst & Young LLP (EY), and other
senior members of the finance team also routinely attend meetings
as required.
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, 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. At least one Committee member should have recent and relevant
financial experience and Robin Freestone meets this requirement as he
was previously Chief Financial Officer of Pearson plc and is a qualified
chartered accountant.
Details of the Committee members’ experience can be found in their
biographies on pages 84-86.
The Committee is considered to be independent for Code purposes
as it is made up solely of Independent Non-Executive Directors.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
110
AUDIT AND RISK COMMITTEE CONTINUED
COMMITTEE’S MAIN ACTIVITIES DURING THE YEAR
The Committee focused on the following key areas.
FINANCIAL REPORTING
• Considered and reviewed 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 2020 Annual Report
• Reviewed the half-year accounts, including the material judgements and estimates
• Received and considered reports from the External Auditor on the full-year and half-year audits
• Reviewed the Financial Statements, announcements and other financial reporting matters including the
approval of the interim results announcement, trading updates and the review of the 2020 Annual Report
EXTERNAL AUDIT
• Assessed the External Auditor’s independence, objectivity and effectiveness
• Considered and recommended to the Board the re-appointment of the External Auditor
• Considered External Auditor fees and terms of engagement
• Reviewed the Non-Audit Services Policy
• Reviewed the External Auditor non-audit services and fees
RISK MANAGEMENT AND
INTERNAL CONTROLS
• Monitored the Company’s risk register, including the identification and assessment of the Group’s
principal and emerging risks and movement in such exposures
• Reviewed the effectiveness of the Group’s Enterprise Risk Management Framework and System and
INTERNAL AUDIT
OTHER AREAS
internal control systems
• Considered responses, and their timeliness, to audit findings and recommendations for control improvements
• Reviewed the risk management and internal controls disclosures in the half-year accounts and Annual Report
• Considered Confidential Reporting and Whistleblowing Policy and Procedures including an analysis
of investigations undertaken during the year
• Received regular reports on Project Agile which is the introduction and implementation of a new ERP
system including the implementation plan, and reviewed the key challenges and risks of the project
• Received regular reports on the Internal Controls Assurance Programme ahead of any proposed new
financial reporting regime (UK SOx)
• Reviewed fraud prevention and detection control activities
• Received updates on material litigation
• Approved the annual Internal Audit plan and approach for 2022, including its alignment to the principal
risks, emerging areas of risk, coverage across the Group and continuing review of the Group’s processes
and controls
• Monitored and reviewed the effectiveness and independence of the Internal Audit function including
consideration of key Internal Audit reports, and the implementation of Internal Audit recommendations
• Reviewed Internal Audit reports and findings issued during the year and the status of implementation
of recommended corrective actions
• Reviewed and recommended to the Board approval of the revised Committee terms of reference
• Reviewed the results of the evaluation of the effectiveness of the Committee
• Approved TCFD disclosures for the Annual Report
• Received an update on tax matters for the Group and reviewed and recommended to the Board approval
of the Group’s annual Tax Strategy and publication on the Company website
• Received a Treasury update
• Approved Committee annual calendar and agenda planning
• Received updates on COVID-19 impacts, the pension scheme and the renewal of the Group’s
insurance programme
• Considered the activities of the Disclosure Committee and reviewed its minutes
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 111
FINANCIAL REPORTING
FINANCIAL REPORTING AND SIGNIFICANT FINANCIAL
JUDGEMENTS AND ESTIMATES
One of the Committee’s principal responsibilities is to review and report to
the Board on the clarity and accuracy of the Group’s Financial Statements,
including the Annual Report and the Interim Results Statement. 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 Auditors 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 below.
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 procedures around
the approval of the Group’s Financial Statements
SIGNIFICANT MATTERS FOR THE YEAR
ENDED 31 DECEMBER 2021
HOW THE COMMITTEE ADDRESSED THESE MATTERS
IMPAIRMENT ASSESSMENT
OF FINITE LIFE INTANGIBLE
ASSETS
• The Committee considered the Group’s process in determining whether assets, covered within the
scope of IAS 36 Impairment of Assets, requires impairment. The Committee considered whether there
were any indicators of impairment of assets with a finite life and concluded that the assumptions made,
conclusions reached, and disclosures given were appropriate.
ACCOUNTING FOR
DEFINED BENEFIT PENSION
OBLIGATIONS
GOING CONCERN AND
VIABILITY STATEMENT
REPORTING
• 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 25 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 External Auditor the assumptions
applied, in particular the findings of the External 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 2021 and February 2022 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; and
– Recognition and measurement of adjusting items.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
112
AUDIT AND RISK COMMITTEE 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. To enable the
Board to have confidence in making this statement, it 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 by
the Committee were 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, estimates 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
2021 Annual Report and Accounts.
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 144.
FINANCIAL REPORTING COUNCIL
The Company received a letter from the Financial Reporting Council (FRC)
in September 2021 which related to its thematic review of companies’
disclosures relating to provisions, contingent liabilities and contingent
assets under IAS 37. Based on its review, there were no questions or queries
that the FCA wished to raise with the Company, other than to notify the
Company that the FRC intended to include some of the disclosures from
the Company’s 2020 Annual Report as an example of better practice in
the published results of their thematic review.
In January 2022, the FRC’s Audit Quality Review Team (AQRT)
completed a review of EY’s audit of the Company’s financial statements
for the period ended 31 December 2020. The Committee considered the
final inspection report, which did not raise any significant findings, and
discussed the results with the lead audit partner. The Committee noted
the overall assessment by the AQRT, which was consistent with its own
positive view of the quality and effectiveness of the external audit in respect
of 2020.
COMMITTEE’S OVERSIGHT OF EXTERNAL AUDIT
The Committee oversees the work undertaken by EY. EY were appointed as
External Auditors with effect from 24 April 2019, following an audit tender
process. Shareholders approved EY’s reappointment at the Company’s
AGM on 25 May 2021.
The Committee’s responsibilities include making a recommendation
on the appointment, re-appointment and removal and remuneration of
the External Auditor. The Committee assesses the qualifications, expertise,
resources and independence of the External Auditors and the effectiveness
of the audit process. The Committee Chair also has regular contact with
the external audit partner outside of Committee meetings without the
presence of management. During the period the Committee approved
the External Audit plan, the proposed audit fee and terms of engagement
of EY for FY 2022. It has reviewed the audit process and the quality of the
audit delivery 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 External
Auditor including the nature of other work undertaken for the Group as
set out below.
INDEPENDENCE AND RE-APPOINTMENT OF THE
EXTERNAL AUDITOR
The Committee reviewed the independence and objectivity of the External
Auditor during the year and confirmed that it considers EY to remain
independent. The Committee also 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. The External Auditor is required to rotate the audit engagement
partner every five years. The current engagement partner, Simon O’Neill,
began his appointment at the commencement of the 2019 financial year.
Based on the Committee’s recommendation, the Board is proposing
that EY be re-appointed to office at the AGM on 25 May 2022.
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 permissible 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 Auditors’ 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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
113
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.
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 2021 the Company’s External
Auditor was engaged to provide permitted non-audit services to support
the £70m bond issue (for a fee of £100,000), and the half-year review
(for a fee of £50,000).The Committee considered the nature and level
of non-audit services provided by the External Auditor and was satisfied
that the objectivity and independence of the External Auditor was not
compromised by the non-audit work undertaken during the year.
Details of the fees paid to the External Auditor during the financial year
can be found in note 4 to the Financial Statements.
INTERNAL CONTROLS AND RISK MANAGEMENT
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 FRC. 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 pages 38-43.
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.
During the year the management team have enhanced the
procedures and controls associated with budget and forecasting.
Transformation workstreams were established last year 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 successfully concluded in H1 this year.
A project was commenced in 2020 to replace a number of the Group’s core
IT systems with a new ERP 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. A further project commenced in the summer, the Internal
Controls Assurance Programme, to review and improve the Group’s internal
controls ahead of any proposed new financial reporting regime (UK SOx).
CONTROL ENVIRONMENT – INTERNAL CONTROL FRAMEWORK
The internal control framework is built upon established entity-level
controls which include mandatory training in relation to the Group’s
Code of Conduct (which consists 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:
• Confidential Reporting and Whistleblowing
• Conflicts of Interest
• Responsible Procurement Policy
• Anti-Slavery & Human Trafficking Policy
• Anti-Bribery and Corruption
• Gifts and Hospitality
• Anti-Money Laundering
• 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 the Company 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.
In 2021 the Company was re-awarded ISO 9001 accreditation for its
quality management system which ensures that policies, standards and
procedures are appropriate for the 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.
ENTERPRISE RISK MANAGEMENT FRAMEWORK AND SYSTEM
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 38-43.
The Internal Audit & 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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
114
AUDIT AND RISK COMMITTEE CONTINUED
The Group has developed 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 which 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 Internal Control, Quality Audit, Security, IT, Health
and Safety, Legal and the risk management activities performed by
the Internal Audit & Risk Management team.
THIRD LINE OF DEFENCE – Functions which 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 & Risk Management and the
External Audit and other external providers of assurance including those
which provide assurance over Dealer adherence to operating standards
and assurance over data within our Sustainability Report.
INTERNAL AUDIT
The vision and mission for the Internal Audit & Risk Management
function was approved by the Committee under its Internal Audit & 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 & Risk Management function provides independent,
objective assurance and advice 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 and to
help the Company identify and mitigate any potential control weaknesses
and identify any emerging risks. The Director of Internal Audit & 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, which detail significant
audit findings, progress of and any changes to the internal audit plan and
updates on agreed management actions to rectify control weaknesses.
Where appropriate the Director will provide a deep dive into an issue
where either the Committee has requested more information, or the
Director considers it pertinent. The Committee assesses the effectiveness
of the Internal Audit & Risk Management function on an annual basis.
To ensure that it is meeting its objectives, the Internal Audit & 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. Prior to the start of the new financial year, the
audit plan for 2022 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, current
hot topics and emerging risks in the industry as well as changes based on
engagement with the business.
The Internal Audit team continued to operate through the year despite
the restrictions imposed by the COVID-19 pandemic and took a risk based
approach, and established new ways of working until the restrictions were
lifted, with a number of audits being conducted remotely, or deferred
until 2022 where appropriate. The audit plan for 2022 has considered
and incorporated existing and emerging risks and those audits deferred
from 2021.
CONFIDENTIAL REPORTING AND WHISTLEBLOWING
The Group has established procedures to ensure there is an appropriate
mechanism for employees and other stakeholders to report any concerns
regarding suspected wrongdoing or misconduct. The Confidential
Reporting and Whistleblowing policy sets out the procedures for raising
concerns in strict confidence. This policy is made available to all employees
and contractors on joining the business and is included within the
employee handbook and published on the Group intranet and employee
noticeboards. There is also annual mandatory training on this policy.
Any concerns raised are managed by the Director of Internal Audit &
Risk Management and investigated with support from Human Resources
and/or Legal teams depending on the nature of the concern. The workforce
can raise concerns through their line manager, senior management and
through a third party managed global hotline and an online confidential
reporting tool and a mobile telephone application to facilitate reporting
of concerns. This hotline provides for global confidential reporting, where
required. The investigation reports are received and reviewed by the Chief
Executive Officer, the General Counsel, the Director of HR and the Chair
of the Committee. The investigation outcomes, significant findings and
status are reported to the Committee on a regular basis, with all significant
whistleblowing matters being reported directly to the Board. During the
year four new reports were submitted via the confidential reporting and
whistleblowing facility.
COMMITTEE PERFORMANCE EVALUATION
The Committee was evaluated as part of the internal effectiveness review
of the Board and its Committees (details of which can be found on pages
89-92). The Committee also reviewed its own performance and was
satisfied that it continued to perform effectively and was rated highly by
the members and other respondents to the evaluation survey.
The focus of the Committee for the forthcoming year will be to continue
to monitor the implementation of the business strategy and its impact on
the Group’s internal control and risk management framework, and to
continue to monitor the status of Internal Audit actions.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 115
DIRECTORS’ REMUNERATION REPORT
made and transformational changes achieved to put the right foundations in
place for the Company’s future success, positioning the business as an ultra-
luxury brand and strengthening the financial resilience of the business.
We have made excellent progress on Project Horizon as we drive efficiency
and agility throughout every aspect of the Company. Our technical teams
are focused on developing our future pipeline of compelling products,
having overcome significant challenges to deliver cars to customers under
the Aston Martin Valkyrie programme and increased electrification skills
and resources within the business as we embark on our journey from
combustion to hybrid to electric. Our new Environmental, Social and
Governance Strategy has been developed during the year and we have
established the Sustainability Committee of the Board.
COVID-19 AND FURLOUGH
We continued to grow the business during the pandemic, maintaining
our operations whilst protecting the health and safety of our colleagues
through diligent working practices. As we continued to manage the impact
of COVID-19 into 2021, financial support through the Coronavirus Job
Retention Scheme (CJRS) was accessed during the early part of the year, with
a number of employees furloughed during and post the further UK winter
lockdown. The Board reviewed the need for this funding following the end
of the first half of the year and, after careful consideration, we decided to
repay all furlough funding claimed during 2021 and no further support was
accessed through the scheme during the second half of the year.
LEADERSHIP CHANGES
As we announced in January, we will be welcoming a new CFO to the
Board on 1 May 2022, when Doug Lafferty joins the Company, taking
over from Kenneth Gregor who has decided to step down for personal
reasons. Doug is a seasoned financial professional with strong experience
gained across manufacturing, automotive racing and retail. The Committee
approved the remuneration package for Doug Lafferty in line with our
Remuneration Policy. Full details are set out on page 133.
Kenneth Gregor will step down from the Board on 1 May 2022 and
remain with the Company until 30 June 2022, while he will continue
to be available to assist with the transition of responsibilities to Doug.
Details of Kenneth’s arrangements are set out on page 133. He will receive
no additional payments in relation to his cessation and the Committee
has applied discretion to treat Kenneth as a good leaver with respect to
his outstanding incentives, in line with the policy and plan rules.
FY 2021 ANNUAL BONUS APPROACH AND OUTCOME
The Committee introduced a new Group scorecard of performance
measures for the 2021 annual bonus to better reflect annual progress on
the new business plan and KPIs. For 2021, the scorecard was 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. To earn any bonus, the threshold level of
Adjusted EBITDA that had been set by the Committee had to be achieved.
2021 Adjusted EBITDA was impacted as a result of the timing change
CONTENTS
Executive Directors’ Remuneration At A Glance
Directors’ Remuneration Policy
Annual Report on Remuneration
FY 2021 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 incoming
Chief Financial Officer
Further information on remuneration for outgoing
Chief Financial Officer
Non-Executive Directors’ remuneration
Remuneration Committee in FY 2021
PAGES
117-120
121-126
127-137
127
127
128
129-130
130
132
133
133
134-135
136-137
DEAR SHAREHOLDER,
I am pleased to present the Directors’ Remuneration Report (DRR) for
the year ending 31 December 2021, which has been approved by both
the Remuneration Committee (the Committee) and the Board.
I became Chair of the Remuneration Committee in February 2021,
alongside other all-new Committee members Robin Freestone and Antony
Sheriff, when we took over from the previous Committee. The Company
also announced a number of further new appointments to the Board in the
summer of 2021 and as a result, the Committee was further strengthened
when Natalie Massenet joined us in July. I would like to thank the former
Committee members for all their hard work and also my current Committee
colleagues for their contributions and support during 2021 and so far
into 2022.
As set out by both the Executive Chairman and CEO in their statements,
2021 has been a pivotal year for Aston Martin, with significant progress
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
116
DIRECTORS’ REMUNERATION REPORT CONTINUED
around deliveries of Aston Martin Valkyrie hypercars, with these moving
into 2022. With the resulting 2021 Adjusted EBITDA outcome of £138m,
the threshold target set for the bonus was not achieved and so no bonus
is payable to the Executive Directors (in respect of any measure).
2022 DIRECTORS’ REMUNERATION POLICY
Our current Remuneration Policy (approved in 2019) will reach the end
of its three-year life at our 2022 AGM and so we are seeking approval for
a new policy at the AGM this year.
The Committee has reviewed the policy to ensure it is designed to
support our strategy to create a world-class, self-sustaining ultra-luxury
automaker. As we developed the 2022 policy, we kept a number of
important context factors firmly in mind, including the nature of the
global markets in which we operate, practice in the automotive and luxury
industries from where we are recruiting our executive talent, our Company
vision and purpose, the employee experience of our wider workforce and
evolving governance and best practice trends.
Our previous policy was designed with good flexibility and has proved
broadly fit-for-purpose. We are not proposing to make any changes to the
policy quantum and incentive limits. The changes we now need to make
are not major but intend to further support our strategy and these are set
out in summary on pages 118-120, and the full 2022 policy is set on pages
121-126. In particular there is a small amendment to the operation of our
annual bonus, to facilitate the inclusion of ESG metrics when we are ready,
as we embed our new ESG strategy and as it evolves over time.
FY 2022 REMUNERATION APPROACH
The Committee has decided to operate the annual bonus in 2022 in-line
with the Company-wide approach introduced in 2021, including a Group
scorecard of performance measures to best reflect annual progress on our
business plan and KPIs. For 2022, the scorecard will be weighted 85% on
financial measures (including a 50% weighting on Adjusted EBITDA, 20%
on Free Cash Flow, 15% on volumes – split equally between Wholesale
and Retail) for all, and 15% on Quality performance. The Committee
believes these are the right measures to make annual progress during 2022
towards delivering our long-term strategy. There is no change to the bonus
opportunity for the Executive Directors. Full details of the 2022 annual
bonus approach are set out on page 128.
The Committee has decided to operate the 2022 Long-Term Incentive
Plan (LTIP) on the same basis as in 2021, albeit with updated Adjusted
EBITDA targets which reflect the new three-year period (1 January 2022
to 31 December 2024) of the business plan. There is no change to the
LTIP opportunity for the Executive Directors, and 2022 LTIP awards for the
CEO and new CFO will be subject to a 2-year post vesting holding period,
in-line with our 2022 remuneration policy. Full details of the 2022 LTIP
approach are set out on page 130.
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 2021. These were around the continued
response to the COVID-19 pandemic and focus on the health, safety and
well-being of Aston Martin’s people, communicating and engaging with
our people and the progress made on the ‘I AM Aston Martin’ turnaround
workstream, with a new People strategy developed and establishing Aston
Martin’s performance culture.
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 considered the review of the
Aston Martin Lagonda Limited Pension Scheme (the Defined Benefit
Scheme) and the Company’s proposal to close this scheme to future
accrual. A consultation process with affected employees (c.400 members)
was carried out during 2021, and the Company also engaged with the
trade union (Unite) on the proposals. Following this consultation, the
Company decided to close the Defined Benefit (DB) Scheme to future
accrual on 31 January 2022, with all employees who were active DB
Scheme members immediately before the closure becoming deferred
members and automatically joining the Company’s Defined Contribution
(DC) plan (of which the majority of employees are already members).
The Committee also reviewed the Aston Martin employee population,
salary increases and ranges, incentive approach (including the cascade of
the new Group KPI bonus scorecard) and opportunities, DC pension and
other non-cash benefits. The new Group KPI scorecard applied to 2021
bonus for all employees and while no bonus is payable to the Executive
Directors, the Committee considered the impact on the wider workforce
and decided that a bonus should be paid to other employees to recognise
the significant efforts of the team over the year, further information on this
is set out on page 128. We also discussed our approach to, and results of,
Aston Martin’s Gender Pay Gap 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 GPG
figures, can be found on page 64. There is also information on the Board’s
engagement with our workforce in the Social section of the Environmental,
Social and Governance report and with our other stakeholders in the
Governance report on page 92.
ENGAGEMENT WITH SHAREHOLDERS
We take the views of our shareholders very seriously and the Committee
seeks to establish close engagement relationships with our larger
shareholders to ensure we understand your views and are able to best
reflect these as we make our decisions as a Committee. We have engaged
with our larger shareholders during the past six months, welcoming views
on any aspect of executive remuneration – both in general and at Aston
Martin – and in particular, we wanted to ensure these were considered by
the Committee as we developed our new remuneration policy, ahead of
seeking shareholder approval for this at the 2022 AGM. In particular, the
Committee reflected on feedback around a two-year post vesting holding
period with respect to LTIP awards which had not been applied to 2020
and 2021 awards and decided that this would apply to LTIP awards going
forward under the 2022 policy.
I would like to thank shareholders for the feedback and views
shared with the Committe e and for your continued support.
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.
ANNE STEVENS
CHAIR, REMUNERATION COMMITTEE
22 FEBRUARY 2022
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
117
EXECUTIVE DIRECTORS’ REMUNERATION AT A GLANCE
Our 2022 Remuneration Policy will be put to shareholders for approval at the AGM on 25 May 2022.
This section explains the outcomes from the implementation of our existing Policy during FY 2021 and summarises our new Policy and the changes
we are proposing to make for 2022.
REMUNERATION OUTCOMES FOR FY 2021
FY 2021 TOTAL SINGLE FIGURE REMUNERATION FOR EXECUTIVE DIRECTORS
The table below sets out the 2021 single figure of total remuneration received by the Executive Directors.
ELEMENT
SALARY
BENEFITS
PENSION
ANNUAL BONUS
TOTAL
TOBIAS MOERS CEO (£’000s)
KENNETH GREGOR CFO (£’000s)
850
115
90
0
1,055
425
13
45
0
483
2021 ANNUAL BONUS APPROACH AND OUTCOME
The CEO and CFO were eligible to receive an annual bonus of up to 200% and 150% of salary respectively, subject to performance. The table below
sets out the Group KPI targets that applied for the 2021 annual bonus, the performance achieved and the level of pay out as a % of maximum for
each element. To earn any bonus, the threshold level of Adjusted EBITDA had to be achieved and so no bonus is payable to the Executive Directors
in respect of any measure as the FY 2021 Adjusted EBITDA outcome of £138m is below £150m.
PERFORMANCE
MEASURE (WEIGHTING)
ADJUSTED EBITDA (50%)
FREE CASH FLOW (20%)
WHOLESALE VOLUMES (10%)
QUALITY (20%)
THRESHOLD (20%)
TARGET (50%)
MAXIMUM (100%)
FY 2021 ACHIEVED
To earn any bonus under any measure, at least the threshold level of Adjusted EBITDA must be achieved
£150M
(£210M)
5,500
£200M
(£160M)
6,280
£225M
(£135M)
6,750
£138M
(£123M)
6,178
INTERNAL:
1. CPA – Customer Perception Audit – an audit of a car that has completed
all the production processes and is intercepted as it would be handed
over to the outbound transport company
2. PDI – Pre-Delivery Inspection – a fixed series of checks/ processes that
a dealer completes on a new car when it is received
External – Warranty at 12 months in service:
1. CPU – Cost Per Unit
2. DPU – Defects Per Unit
Significant progress
made but stretching
target level not achieved
Significant progress
made but stretching
target level not achieved
FY 2021 BONUS PAYMENT
(% OF MAXIMUM)
0%
0%
0%
0%
0%
ALIGNMENT BETWEEN EXECUTIVE DIRECTORS AND SHAREHOLDERS
The CEO and CFO are subject to shareholding guidelines of 300% and 200% of salary respectively, which drives long-term alignment with investors.
As at 31 December 2021, the CEO held 8,815 shares owned outright and 1,866 derferred bonus shares (total value of £145k) and the CFO held 884
deferred bonus shares (total value of £12k). The CEO bought shares in the market during 2021 in order to make progress towards his shareholding
guideline and the CFO will be stepping down from the Board and as CFO on 1 May 2022.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
118
DIRECTORS’ REMUNERATION REPORT CONTINUED
2022 REMUNERATION POLICY SUMMARY,
INCLUDING CHANGES AND IMPLEMENTATION IN FY 2022
2019 REMUNERATION POLICY
2022 POLICY – CHANGES
IMPLEMENTATION/STRATEGY ALIGNMENT
• Any increases generally in line
• Fit for purpose – no change
• CEO £875k (2.9% increase)
from 1 January 2022/ current
CFO £425k/incoming
CFO £450k
• Set at levels to align with
strategy to recruit and retain
best of global automotive/
manufacturing/luxury talent
• Fit for purpose – no change
• In line with maximum pension
contribution available to
majority of employees
• Fit for purpose – no change
• Change – removal of
• Shareholder alignment
shareholding guidelines
which applied to former CEO
and CFO (800% and 300%
of salary respectively) which
were put in place to reflect
significant legacy LTIP awards
granted at IPO
• No change to guidelines
relevant to current CEO
and CFO
• Fit for purpose – no change
NON-INCENTIVE ELEMENTS
ELEMENT
BASE SALARY
PENSION
OTHER BENEFITS
SHAREHOLDING POLICY
MALUS AND CLAWBACK
with wider workforce
• Take account of role, performance,
experience, business performance,
external environment, cost to
Company, wider workforce
and comparable roles at
relevant comparators
• Maximum of 12% of salary
• DC scheme or cash allowance
in lieu of pension (employer’s
NI deducted for cash allowance)
• Typically include participation
in car schemes, private mileage
entitlement, private health, travel
and life insurance
• Other benefits may be offered,
e.g. allowances for relocation
• CEO – 300% of salary
• CFO (other Executive
Directors) – 200%
• Requirement to retain at least 75%
of any shares (net of tax) vesting
under LTIP/ deferred bonus until
guideline met
• Expectation for guideline
to be built up within 5 years
of appointment
• Post-cessation – All Executive
Directors required to retain 50%
of guideline above for two years
post-cessation of employment
• Malus and clawback provisions
operated at discretion of the
RemCo in respect of both annual
bonus and LTIP where it considers
that there are exceptional
circumstances
• May include serious reputational
damage, failure of risk
management, error in available
financial information or
personal misconduct
• Clawback may be applied for a
period of up to three years from
payout/vesting
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 ANNUAL BONUS
ELEMENT
MAXIMUM OPPORTUNITY
AWARD VEHICLE
PERFORMANCE MEASURES
119
2019 REMUNERATION POLICY
2022 POLICY – CHANGES
IMPLEMENTATION/STRATEGY ALIGNMENT
• CEO – up to 200% of salary
• CFO – up to 150%
• Cash
• 50% in deferred shares (where
shareholding guideline not met)
• To be reviewed annually, based
on a combination of financial,
operational, strategic and
individual measures
• Fit for purpose – no change
• Set at levels to align with
strategy to recruit and retain
best of global automotive/
manufacturing/ luxury talent
• Fit for purpose – no change
• Shareholder alignment
• Fit for purpose – no change
• New Company-wide bonus
approach implemented in 2021
based on Group KPI scorecard
• 2022 Group KPI scorecard
(to be 50% Adjusted EBITDA,
20% FCF, 15% volumes – split
equally between Wholesale
and Retail – and 15% Quality)
to align with roadmap to
achieve medium-term plans
and targets:
– Volumes of c.10k units
by 2024/2025
– c.£500m EBITDA (25% +)
by 2024/2025
– FCF positive during 2023
and sustainable thereafter
– Quality aligned to ultra-
luxury British performance
brand
• To increase flexibility for life
of policy
• To accommodate sustainability
targets from 2023 to align with
new clear strategy underscoring
commitment to ESG
PERFORMANCE WEIGHTING
• To be reviewed annually, with at
least 80% of bonus to be based
on financial measures
• Change to weighting – ‘at
least 70% of bonus to be
based on financial measures’
• Up to 20% of bonus could be
based on operational, strategic
and/ or individual measures
PAYOUT SCHEDULE FOR EACH
MEASURE (AS % OF MAX)
• Threshold – 20%
• Maximum – 100%
• Fit for purpose – no change
PERFORMANCE PERIOD
• 1 year – aligned with the financial year (1 Jan to 31 Dec)
• Annual targets to align with
roadmap to achieve medium-
term plans and targets
COMMITTEE DISCRETION
• To adjust bonus outcomes to ensure they reflect underlying business
performance/ any other relevant factors
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 120
DIRECTORS’ REMUNERATION REPORT CONTINUED
LONG-TERM INCENTIVE PLAN (LTIP)
ELEMENT
2019 REMUNERATION POLICY
2022 POLICY – CHANGES
IMPLEMENTATION/STRATEGY ALIGNMENT
MAXIMUM OPPORTUNITY
• CEO – up to 300% of salary
• CFO – up to 200%
• Fit for purpose – no change
• Set at levels to align with
strategy to recruit and retain
best of global automotive/
manufacturing/luxury talent
AWARD VEHICLE
• Shares (granted as nil-cost options or conditional share awards)
• Shareholder alignment
PERFORMANCE MEASURES
• To be determined ahead of each
award, based on a combination
of financial, investor return and
strategic performance measures
PERFORMANCE WEIGHTING
• To be reviewed annually, no
specified minimum, ‘combination’
stipulates at least 2 measures
• Change – remove
‘combination’ from wording
– ‘based on financial,
shareholder return and/
or strategic performance
measures’ – to increase
flexibility for life of policy
to base awards on a single
measure if needed
VESTING SCHEDULE
(AS % OF MAX)
• Threshold – 20%
• Maximum – 100%
• Fit for purpose – no change
PERFORMANCE PERIOD
• Usually measured over 3
• Fit for purpose – no change
financial years
• 2020 and 2021 LTIP subject
to Adjusted EBITDA (80%)
and relative TSR vs. 11 luxury
peers (20%)
• 2022 approach to be consistent
with 2021 to align with
roadmap to achieve medium-
term plans and targets:
– c.£500m EBITDA (25% +)
by 2024/2025
– TSR out-performance of
luxury peers aligned to
becoming an ultra-luxury
British performance brand
• 3 years to align with roadmap
to achieve medium-term plans
and targets
HOLDING PERIOD
• 2 years post vesting
• Fit for purpose – no change
• 2-year holding period to apply
to 2022 LTIP awards and
going forward
• Shareholder alignment
COMMITTEE DISCRETION
• To adjust the vesting levels to ensure they reflect underlying business
performance and any other relevant factors
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 121
DIRECTORS’ REMUNERATION POLICY
Aston Martin’s Directors’ Remuneration Policy as set out in this report (the 2022 Remuneration Policy) will be put to shareholders for approval at the
2022 AGM to be held on 25 May 2022. It is the Committee’s intention that the 2022 Remuneration Policy will apply to payments made from the date
of the 2022 AGM.
The Committee believes that Aston Martin’s executive remuneration should be simple and transparent while being linked to business performance
and strategic direction, taking into account the global markets in which the Company operates and from which it recruits talent, as well as our approach
to remuneration throughout the whole workforce. The views of shareholders and their advisory bodies are very important and so the Committee
engaged with larger shareholders to understand their views during the development of this Policy and its intended implementation. The Committee
takes its duty to shareholders seriously and will continue to seek to maintain an open and constructive dialogue on our approach to remuneration.
REMUNERATION POLICY TABLE FOR EXECUTIVE DIRECTORS
PURPOSE AND LINK
TO STRATEGY
BASE SALARY
To attract and retain
executives of the
right calibre to
successfully develop
and execute the
business strategy.
To recognise the
market value and
responsibilities of
the role, experience,
ability and personal
contribution.
BENEFITS
To offer market
competitive benefits.
OPERATION
MAXIMUM OPPORTUNITY
Typically base salaries will be reviewed annually, with any
increases normally effective from 1 January.
While there is no prescribed maximum, salary increases
will generally be in line with those of the wider workforce.
Base salary levels and any increases take account of:
the individual’s role, performance and experience;
•
• business performance, the external environment
and cost to the Company;
• salary increases for other employees; and
• salary levels for comparable roles at
relevant comparators.
No recovery or withholding applies.
Increases may be made above this level where the
Committee considers it appropriate including (but not
limited to) a significant increase in the scale, scope, market
comparability or responsibilities of the role.
Where an individual has been appointed on a salary
lower than market levels, increases above those of the
wider workforce may be made to recognise experience
gained and performance in the role. Such increases will be
explained in the relevant Annual Report on Remuneration.
PERFORMANCE
MEASURES
Both Company
and individual
performance are
considered when
determining
Executive Directors’
base salaries and
any increases.
Benefits typically include participation in car schemes,
private mileage entitlement, private health insurance,
travel insurance and life insurance. Where appropriate,
other benefits may be offered including, but not limited to,
allowances for relocation.
Executive Directors are eligible to participate in all-
employee share plans on the same basis as other
employees in line with prevailing HMRC limits.
Benefits provided may vary by role and individual
circumstance and are reviewed periodically.
None
There is no overall maximum.
No recovery or withholding applies.
PENSION (OR CASH ALLOWANCE)
To offer market
competitive
retirement benefits
in line with the
wider workforce.
Executive Directors may participate in a defined
contribution scheme. Individuals may receive
a cash allowance in lieu of some or all of their
pension contribution.
No recovery or withholding applies.
Maximum of 12% of salary. The employer’s National
Insurance contribution is typically deducted for a cash
allowance. This is in line with the current maximum
pension contribution available to the majority
of employees.
None
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 122
DIRECTORS’ REMUNERATION REPORT CONTINUED
REMUNERATION POLICY TABLE FOR EXECUTIVE DIRECTORS CONTINUED
PURPOSE AND LINK
TO STRATEGY
ANNUAL BONUS
To focus Executive
Directors on, and
reward them for, the
successful delivery of
the annual strategic
business priorities.
OPERATION
MAXIMUM
OPPORTUNITY
PERFORMANCE MEASURES
The bonus is earned based on the achievement of one
year performance targets and is delivered in cash or a
combination of cash and deferred shares.
Maximum
(as % of salary):
The bonus will be based on a combination of financial,
operational, strategic and individual measures.
If an Executive Director does not meet their shareholding
guideline, 50% of any bonus will be deferred into shares,
typically for a period of three years. Dividend equivalents
may be accrued on deferred shares.
• CEO – 200%
• Other Executive
Directors
– 150%
Performance measures and weightings are reviewed
annually to ensure they continue to support the
achievement of the Company’s key strategic
priorities. At least 70% of the bonus will be
based on financial measures.
Malus and clawback provisions may be applied in
exceptional circumstances as detailed in the notes
to this table.
The bonus pays out from 20% at threshold to 100%
at maximum performance.
The Committee retains discretion to adjust the bonus
outcomes to ensure they reflect underlying business
performance and any other relevant factors. The Committee
will consult with shareholders where appropriate before
the use of discretion to increase the outcome.
LONG-TERM INCENTIVE PLAN (LTIP)
To focus Executive
Directors on, and
reward them for,
long-term delivery
of sustained
performance and
value creation.
To provide longer
term alignment with
the shareholder
experience.
LTIP awards will typically be made annually, and awards
may be in the form of nominal or nil-cost options or
conditional shares.
Maximum
(as % of salary):
Vested shares are typically subject to a holding period of
up to two years (shares may be sold at vesting to satisfy any
tax-related liabilities).
• CEO – 300%
• Other Executive
Directors
– 200%
LTIP awards will be based on financial, shareholder return
and/or strategic performance measures aligned with the
business priorities, usually measured over a three-year
period. The Committee prior to award will determine the
targets, measures and weightings.
For threshold performance, vesting is 20% of maximum.
Dividend equivalents may be accrued on shares that vest.
Malus and clawback provisions may be applied in
exceptional circumstances as detailed in the notes
to this table.
The Committee retains discretion to adjust the vesting
levels to ensure they reflect underlying business
performance and any other relevant factors. The Committee
will consult with shareholders where appropriate before
the use of discretion to increase the outcome.
SHAREHOLDING POLICY
To provide alignment
between the
interests of Executive
Directors and
shareholders over
the longer term.
Executive Directors (as % of salary):
Not applicable.
Not applicable.
• CEO – 300%
• Other Executive Directors – 200%
Executive Directors are required to retain at least 75% of
the shares (net of tax) vesting under the LTIP or deferred
bonus until the shareholding guideline is met. They are
expected to build up their shareholding guideline within a
5 year period from their date of appointment to the Board.
POST-CESSATION SHAREHOLDING POLICY
All Executive Directors are typically required to retain 50%
of the shareholding guideline for Executive Directors (or
full actual holding if lower) for two years post-cessation
of employment, therefore 150% of salary for the CEO and
100% of salary for other Executive Directors.
Appropriate enforcement mechanisms exist.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 123
NOTES TO THE REMUNERATION POLICY TABLE
OPERATION OF INCENTIVE PLANS
The incentive plans will be operated within the Policy at all times
and in accordance with the relevant plan rules and the Listing Rules.
There are a number of areas over which the Committee retains flexibility
as detailed below:
• Participants in each plan;
• Timing and size of an award and/or payment;
• Performance measures, weightings and targets that will apply each
year and any adjustments thereof;
• Treatment of awards in the event of a change of control,
restructuring or other corporate event;
• Treatment of leavers; and
• Amendments of plan rules in accordance with their terms.
In the case of Executive Directors, any use of discretion by the Committee
will be disclosed in the relevant Annual Report on Remuneration and may
be subject to consultation with the Company’s shareholders.
PERFORMANCE MEASURES AND TARGETS
Pay for performance and rewarding sustainable success delivered over the
longer term are central to the Company’s remuneration philosophy and
the Committee gives careful consideration to performance measures and
targets for the incentive plans each year to ensure they are aligned with the
Company’s latest strategy, performance and the shareholder experience.
The annual bonus measures are selected to provide a balance between
rewarding operational excellence and successful execution of the strategy,
which are fundamental to the Company’s future growth. For the LTIP, the
performance measures will align participants with the generation of long-
term sustainable value for shareholders with a focus on the key long-term
objectives of the Company.
Targets for the incentive plans are set taking into account a number of
reference points including the strategic plan, long-term business goals and
external consensus forecasts for the Company and the market to ensure
the level of performance required is appropriately stretching.
Conditions applying to the LTIP may be varied if the Committee
considers this appropriate. If they are varied, they must, in the opinion
of the Committee be fair, reasonable and materially no less or more
challenging than the original conditions.
MALUS AND CLAWBACK PROVISIONS
Consistent with best practice, malus and clawback provisions will be
operated at the discretion of the Committee in respect of both the annual
bonus and 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 from payout or vesting for any bonus and LTIP awards.
LEGACY ARRANGEMENTS
Payments may be made to satisfy commitments made prior to the approval
of this Remuneration Policy. This may include, for example, payments
made to satisfy legacy arrangements agreed prior to an employee (and
not in contemplation of) being promoted to the Board of Directors.
All outstanding obligations may be honoured, and payment will be
permitted under this Remuneration Policy.
MINOR AMENDMENTS
The Committee may make minor amendments to the Policy (for example
for tax, regulatory, exchange control or administrative purposes) without
obtaining shareholder approval.
REMUNERATION POLICY TABLE FOR THE NON-EXECUTIVE CHAIR AND NON-EXECUTIVE DIRECTORS
PURPOSE AND LINK
TO STRATEGY
FEES
To attract and retain high
calibre and experienced
individuals to serve on the
Board by offering market
competitive fee arrangements.
OPERATION
MAXIMUM OPPORTUNITY
PERFORMANCE MEASURES
A Non-Executive Chair receives an annual fee.
Non-Executive Directors receive an annual base fee. They may receive
further fees for additional responsibilities including:
Total fees paid will be within
the limit stated in the Articles
of Association.
None
• Senior Independent Director
• Committee Chair
• Committee member
Fees are subject to review taking into account time commitment,
responsibilities and market practice.
Non-Executive Directors are entitled to be reimbursed for reasonable
expenses incurred during the performance of their duties, including
any tax due on these benefits.
Non-Executive Directors do not participate in incentive or share schemes or receive a pension provision.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 124
DIRECTORS’ REMUNERATION REPORT CONTINUED
ILLUSTRATIONS OF APPLICATION OF REMUNERATION POLICY
The charts below provide estimates of the potential remuneration opportunity for the CEO (Tobias Moers) and the CFO (Doug Lafferty) and the split
between the three different elements of remuneration under three different performance scenarios: ‘Minimum’, ‘Target’ and ‘Maximum’. In line with
the reporting regulations, a scenario assuming 50% share price growth over the three-year LTIP performance period is also shown below (for the
maximum performance scenario). The assumptions used for these charts are set out in the table below. Although technically required, a chart has not
been included for the Executive Chair as he has elected to take a nominal fee of £1 only.
CEO TOTAL REMUNERATION (£’000)
MAX +50% SHARE PRICE GROWTH
CFO TOTAL REMUNERATION (£’000)
MAX +50% SHARE PRICE GROWTH
16%
26%
39%
19%
6,579
16%
26%
39%
19%
3,271
MAXIMUM
MAXIMUM
20%
32%
48%
5,304
19.3%
32.3%
48%
2,633
TARGET
TARGET
33%
27%
40%
3,179
32.3%
27%
40%
1,571
MINIMUM
100%
1,054
MINIMUM
100%
508
Fixed pay
Annual bonus
LTIP
LTIP share price growth
Fixed pay
Annual bonus
LTIP
LTIP share price growth
MINIMUM PERFORMANCE
TARGET PERFORMANCE
MAXIMUM PERFORMANCE
MAXIMUM PERFORMANCE + 50% SHARE PRICE GROWTH
• Fixed remuneration (salary, pension and benefits) only.
• No payout under the annual bonus or LTIP.
• Fixed remuneration.
• 50% of the maximum payout under the annual bonus.
• 50% of the maximum vesting under the LTIP.
• Fixed remuneration.
• 100% of the maximum payout under the annual bonus.
• 100% of the maximum vesting under the LTIP.
• Fixed remuneration.
• 100% of the maximum payout under the annual bonus.
• 100% of the maximum vesting under the LTIP.
• 50% assumed share price growth over three-year LTIP
performance period.
Other than the ‘Maximum performance + 50% share price growth’ scenario, no share price growth or dividend assumptions have been included in
the charts above.
SERVICE AGREEMENTS
The Executive Directors are employed under contracts of employment with Aston Martin Lagonda Limited. Consistent with the Company’s policy,
Executive Directors have service contracts with a notice period of 12 months from the Company and the Executive Director.
The Non-Executive Directors have letters of appointment, as would a Non-Executive Chair. The notice period for a Non-Executive Chair and the
Non-Executive Directors is three months.
The appointment of a Non-Executive Chair and each Non-Executive Director may be terminated immediately in certain circumstances such as
committing a material breach of duties.
The appointment of the Executive Chair and non-Independent Non-Executive Directors may be terminated in accordance with the Relationship
Agreement by the relevant shareholder that appointed them. The Company may also terminate their appointment if the relevant Relationship Agreement
is terminated.
The service contracts and letters of appointment are available for inspection at the Company’s registered office.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 125
POLICY ON PAYMENTS FOR LOSS OF OFFICE
The Company may require the Executive Director to work their notice period or may choose to place the individual on ‘garden leave’ if this is the most
commercially sensible approach. In the event of termination certain restrictions may apply for a period of up to 12 months to protect the business
interests of the Company.
Payment in lieu of notice may be made for the unexpired portion of the notice period which is limited to the Executive Director’s base salary and
is subject to mitigation. The Company may make such payments in monthly instalments. The employment of each Executive Director is terminable
with immediate effect and without payment in lieu of notice in certain circumstances including gross misconduct.
The treatment of any outstanding incentive awards will be determined based on the relevant plan rules as summarised in the table below.
ELEMENT
POLICY AND OPERATION
ANNUAL BONUS
DEFERRED BONUS SHARE
PLAN (DBSP)
LTIP
CORPORATE EVENT/
CHANGE IN CONTROL
There is no entitlement to a bonus payment in the event of termination. The Remuneration Committee may
exercise its discretion to pay a bonus depending on the circumstances of departure. Generally, leavers will
lose entitlement to a bonus unless the individual is considered a ‘good leaver’. Good leavers are eligible to be
considered for a bonus depending on whether performance conditions have been met and any payment will
usually be pro-rated for the period of employment and, where the shareholding guideline has not been met,
deferred into shares on the same basis as for a continuing director, with Committee discretion to treat otherwise.
Deferred bonus shares will lapse on leaving in the case of summary dismissal by the Company or voluntary
resignation, with Committee discretion to treat otherwise. In other circumstances, awards will normally be
released at the usual time, although the Committee can apply discretion to allow earlier release. On death,
awards typically vest immediately.
The default treatment is that any outstanding awards lapse on cessation of employment. In certain circumstances
“good leaver”1 status can be applied. In these circumstances a participant’s awards will usually vest subject to the
satisfaction of the relevant performance criteria and, ordinarily, on a time pro-rated basis with the Committee’s
discretion to treat otherwise. The balance of the awards will lapse. Unless the Committee decides otherwise,
any holding period will continue to apply.
Outstanding shares subject to a holding period will not generally lapse unless the individual is subject
to summary dismissal.
On death, awards will typically vest subject to the satisfaction of performance conditions as determined
by the Committee and no holding period will apply.
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 Committee decides otherwise. Outstanding deferred bonus awards will vest in full
as soon as practicable.
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 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.
1. For the purpose of the table above, a good leaver is generally defined as a participant that ceases employment due to ill-health, injury, disability (in each case evidenced to the satisfaction
of the Remuneration Committee), retirement with the agreement of the Company, the participant’s employing Company ceasing to be a Group Company, the business or part of the business
to which the participant’s employment related being transferred to a person who is not a Group Company or any other reason at the Committee’s discretion.
The Committee reserves the right to make other payments in connection with an Executive Director’s cessation of employment. Any such payment
may include paying a reasonable level of fees for outplacement assistance and/or the Director’s legal or professional advice fees in connection with
his cessation of employment.
No payments are made on termination to any Non-Executive Director of the Company.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 126
DIRECTORS’ REMUNERATION REPORT CONTINUED
POLICY ON RECRUITMENT
Talent is key to the success of the Company and our remuneration framework needs to be able to attract talent of the right calibre to successfully
execute the Group’s business strategy. When determining remuneration on recruitment, the Committee will take into account an individual’s role,
experience and relevant data points such as market data and internal relativities. The Committee is mindful to pay no more than is necessary to facilitate
recruitment of the right talent. On appointment, remuneration will generally be in line with the Policy and the maximum aggregate value of incentives
(excluding buyouts) will be no more than the maximums in the Policy table. The approach on recruitment is summarised below.
ELEMENT
BASE SALARY
PENSION
BENEFITS
ANNUAL BONUS
LTIP
BUYOUT AWARDS
POLICY AND OPERATION
Base salary will be determined with reference to the individual’s role and responsibilities, experience and skills,
relevant market data, internal relativities and their current base salary. Salaries may be set at a level lower than
the prevailing market rate with increases made at a higher than usual rate as the individual gains experience and
performs in the role.
Participation in the Company’s defined contribution pension plan or cash alternative in line with the Policy.
Benefits in line with the Policy, including relocation benefits if appropriate.
The structure described in the Policy table will normally apply for new appointees with the relevant maximum
typically pro-rated to reflect service during the year. For the first year of appointment, the Committee may
determine that the annual bonus may be subject to modified terms considered appropriate in the context
of the recruitment.
LTIP awards will normally be on the same terms as other executives, as described in the Policy table.
The Committee recognises that it may be necessary, in certain circumstances, to provide compensation for
amounts forfeited from a previous employer. Generally any buyout awards will be made on a like-for-like basis
in terms of commercial value, form, application of performance conditions and timing of receipt to ensure that
they reflect the incentives they are replacing.
The approach for an internal promotion will be consistent with the policy
outlined above. Where an individual has contractual commitments
or outstanding awards made prior to their promotion, the Company
will honour these legacy arrangements.
• salary increases;
• opportunities and payments under annual bonus plans;
• operation of incentive plans; and
• total remuneration levels.
For interim positions a cash supplement may be paid rather than salary
(for example a Non-Executive Director taking on an executive function
on a short-term basis).
On appointment of a new Non-Executive Director or Chair, the
information set out in the Policy table will apply.
CONSIDERATION OF EMPLOYMENT CONDITIONS ELSEWHERE
IN THE COMPANY
At a senior level, there is a greater emphasis on long-term, sustainable
performance and alignment with the shareholder experience and LTIP
awards are made at these levels with delivery in shares. The remuneration
arrangements for Executive Directors outlined above are consistent
with those for other senior executives, although quantum and award
opportunities vary by level. The key difference between executive
remuneration and that for the wider workforce is therefore that a higher
proportion is at risk and dependent on Company performance.
The philosophy and principles that apply to remuneration at the
Company are consistent throughout the organisation. In line with the
UK Corporate Governance Code, the Committee is fully informed of and
considers wider employee remuneration and related policies including
the following as they apply to the wider workforce:
The Company believes open communication with employees is very
important and, while the Committee does not formally consult with
employees in respect of the design of the Directors’ remuneration policy,
our employees are able to communicate their views and ask questions on
any topic, including remuneration through either all-employee townhall
sessions or the Trade Union for Non-Management grades, both of which
meet regularly or by using the confidential employee helpline. Pay and
terms and conditions for this group are subject to Trade Union negotiation
and any increases reflect the competitive market for skilled labour within
the automotive and engineering industries.
CONSIDERATION OF SHAREHOLDER VIEWS
The Committee takes the views of and its responsibility to shareholders
very seriously and we are committed to building and maintaining a
relationship that allows for an open and constructive dialogue on a wide-
range of areas, including executive remuneration. Both the general views
of and any direct feedback we receive from our shareholders and their
representative bodies is considered by the Committee when determining
the appropriate approach to remuneration arrangements for the Company.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
127
ANNUAL REPORT ON REMUNERATION
FY 2021 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 2021 (and the prior financial year).
The subsequent sections detail additional information for each element of remuneration.
Shown in £’000s
EXECUTIVE DIRECTOR
SALARY
BENEFITS
PENSION TOTAL FIXED
ANNUAL
BONUS
LTIP
TOTAL
VARIABLE
TOTAL
PRIOR
COMPANY
INCENTIVE
BUYOUT1
LAWRENCE STROLL2
Year to 31 December 2021
Year to 31 December 2020
TOBIAS MOERS
Year to 31 December 2021
Year to 31 December 20203
KENNETH GREGOR
Year to 31 December 2021
Year to 31 December 20204
£1 (ONE)
£1 (ONE)
850
354
425
224
£1 (ONE)
£1 (ONE)
1,055
439
483
255
90
37
45
24
115
48
13
7
–
142
–
67
N/A
N/A
N/A
N/A
–
142
–
67
1,055
581
483
322
–
901
–
–
TOTAL
£1 (ONE)
£1 (ONE)
1,055
1,482
483
322
Notes:
1. As compensation for incentives he forfeited on leaving his previous employer, Tobias Moers received a cash payment of €500,000 on joining and a further €500,000 on 1 August 2021 – the
full amount was 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 in the 2020 DRR
2. Lawrence Stroll has elected to receive a nominal salary only, of £1 per annum, and receives no other elements of remuneration
3. 2020 remuneration for Tobias Moers relates to the period since joining, 1 August to 31 December 2020
4. 2020 remuneration for Kenneth Gregor relates to the period since joining, 22 June to 31 December 2020
SALARY (AUDITED)
From appointment in 2020, Tobias Moers’s salary was £850,000 and Kenneth Gregor’s was £425,000 and no increases were applied to their salaries during 2021.
The Committee reviewed the CEO’s salary for 2022 and decided to increase his salary to £875,000 (a 2.9% increase). This is the first increase to
the CEO’s salary since he joined the business in August 2020 and is lower than the general workforce 2022 pay increase of 6% which was agreed
with the trade union in February 2022.
Doug Lafferty will take over the CFO role and join the Company on 1 May 2022 with a salary of £450,000. This will be first reviewed in 2023.
The Committee recognises that the CEO and CFO salaries appear high in a UK FTSE250 context and continues to benchmark remuneration against
global automotive and luxury companies, as these are the most relevant peers. The Committee considers these salary levels to be appropriate, as they
reflect the experience these executives have as proven talented automotive and manufacturing leaders, and were required to secure the individuals
with the skills required to deliver the turnaround of the business to achieve its full potential.
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.
PENSION (AUDITED)
Each Executive Director receives a cash allowance in lieu of participation in the defined contribution scheme. They receive an allowance 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.
No Director has a prospective entitlement to receive a defined benefit pension.
ALLOWANCES AND BENEFITS (AUDITED)
FY 2021
SHOWN IN £’000s
TOBIAS MOERS1
KENNETH GREGOR
CAR ALLOWANCE AND
PERSONAL MILEAGE
LIFE ASSURANCE
INSURANCE (PRIVATE
MEDICAL AND TRAVEL)
RELOCATION
ALLOWANCE1
17
8
2
3
5
2
91
–
TOTAL
115
13
1. Tobias Moers receives an annual cash allowance of £50,000 as relocation assistance. This will be paid for a period of 5 years from his start date and the Company also meets the tax payable on this allowance.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
128
DIRECTORS’ REMUNERATION REPORT CONTINUED
ANNUAL BONUS
ANNUAL BONUS OUTCOMES FOR FY 2021 (AUDITED)
The Committee introduced a new 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 was cascaded throughout the Company and applied to annual bonus for all employees, to provide
strong alignment of focus and a ‘One Team’ approach.
For 2021, the scorecard was 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 performance targets for each measure were set by the Committee at the start of the
year, considering the business plan for 2021 and market expectations. The table below sets out the Group KPI targets, the performance achieved and
the level of payout of the bonus as a % of maximum for each element. To earn any bonus, the threshold level of Adjusted EBITDA had to be achieved
and so no bonus is payable to the Executive Directors in respect of any measure as the FY 2021 Adjusted EBITDA outcome of £138m is below £150m.
PERFORMANCE
MEASURE (WEIGHTING)
ADJUSTED EBITDA (50%)
FREE CASH FLOW (20%)
WHOLESALE VOLUMES (10%)
QUALITY (20%)
THRESHOLD (20%)
TARGET (50%)
MAXIMUM (100%)
FY 2021 ACHIEVED
To earn any bonus under any measure, at least the threshold level of Adjusted EBITDA must be achieved
£150M
(£210M)
5,500
£200M
(£160M)
6,280
£225M
(£135M)
6,750
£138M
(£123M)
6,178
INTERNAL:
(1) CPA – Customer Perception Audit – an audit of a car that has completed
all the production processes and is intercepted as it would be handed
over to the outbound transport company
(2) PDI – Pre-Delivery Inspection – a fixed series of checks/processes that
a dealer completes on a new car when it is received
EXTERNAL – Warranty at 12 months in service:
(1) CPU – Cost Per Unit
(2) DPU – Defects Per Unit
Significant progress
made but stretching
target level not achieved
Significant progress
made but stretching
target level not achieved
FY 2021 BONUS PAYMENT
(% OF MAXIMUM)
0%
0%
0%
0%
0%
The new Group KPI scorecard applied to 2021 bonus for all employees and while no bonus is payable to the Executive Directors, the Committee
considered the impact on the wider workforce and whether any bonus should be paid to other employees to recognise the significant efforts of the
team over the year. Given the Adjusted EBITDA threshold had not been achieved due to the impact of the timing of the Aston Martin Valkyrie deliveries,
the Committee considered what the bonus outcome would have been based on the performance achieved against the other three measures only.
Based on actual FCF, wholesale volumes and quality performance against the targets set for those measures, the bonus outcome would have been
25% of maximum bonus level. On balance, to recognise how hard the team had worked and the significant progress made on both the business plan
and turnaround programme during 2021, the Committee decided it was important to pay some bonus and applied discretion to pay a bonus to all
employees (except to the CEO and CFO) at 25% of maximum level.
ANNUAL BONUS FOR FY 2022
The Committee has decided to operate the annual bonus in 2022 in-line with the Company-wide approach introduced in 2021, including a Group
scorecard of performance measures to best reflect annual progress on our business plan and KPIs. This Group scorecard will again be cascaded
throughout the Company to apply to annual bonus for all employees, providing strong alignment of focus and a ‘One Team’ approach. For 2022,
the scorecard will be weighted 85% on financial measures (including a 50% weighting on Adjusted EBITDA, 20% on Free Cash Flow and 15%
on volumes) and 15% on Quality performance for all. The Committee believes these are the right measures to make annual progress during 2022
towards delivering our long-term strategy. The 2022 Group KPI scorecard is set out below, the actual targets remain commercially sensitive and will
be disclosed retrospectively in the 2022 DRR, when the 2022 performance year is complete.
AREA
MEASURE
WEIGHTING
PROFIT
CASH
VOLUMES
QUALITY
ADJUSTED EBITDA
FREE CASH FLOW (FCF) RETAIL/WHOLESALE VOLUMES
IN-HOUSE QUALITY/EXTERNAL QUALITY
50%
20%
15%
15%
GROUP KPI SCORECARD TO APPLY TO 2022 ANNUAL BONUS
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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
129
LONG-TERM INCENTIVE PLAN
The following section sets out details of:
• 2021 LTIP awards granted during FY 2021
• 2021 DBSP awards granted during FY 2021
• Approach to 2022 LTIP awards
2021 LTIP AWARDS GRANTED DURING FY 2021 (AUDITED)
The approach to 2021 LTIP awards was set out in detail in the 2020 DRR, ahead of the grant date (in June 2021). The table below summarises the LTIP
share awards that were granted to the Executive Directors during FY 2021.
2021 LTIP SHARE AWARDS
TYPE OF AWARD
BASIS OF AWARD
SHARES AWARDED
FACE VALUE AT GRANT (£’000s)
TOBIAS MOERS
KENNETH GREGOR
LTIP share award
300% of salary
200% of salary
126,865
42,288
£2,550
£850
Notes:
1. The LTIP shares were granted on 14 June 2021 and will vest subject to the performance conditions and vesting schedule set out below
2. Awards were granted in the form of nil-cost options
3. The face value of each award was calculated using the 3-day average price prior to the date of grant (£20.10)
4. Adjusted EBITDA will be assessed over three financial years to 31 December 2023 and TSR will be measured over a three-year period from the date of grant to 13 June 2024
5. Subject to performance, the element of awards subject to Adjusted EBITDA performance will vest following the announcement of results for 2023 (early March 2024) 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
The 2021 LTIP awards are subject to the performance conditions and malus and clawback provisions as detailed below.
2021 LTIP PERFORMANCE MEASURES AND TARGETS
ADJUSTED EBITDA
(£M IN FY23)
(80% OF AWARD)
RELATIVE TSR
(VS. LUXURY PEERS)
(20% OF AWARD)
2021 LTIP TARGETS VESTING* (AS A % OF MAXIMUM)
THRESHOLD
STRETCH
MAXIMUM
300
425
500
THRESHOLD
RANK 6TH (MEDIAN)
MAXIMUM
RANK 3RD OR ABOVE
(80TH PERCENTILE)
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 Adjusted EBITDA element and threshold and maximum for the TSR element
• TSR performance will be measured on a ranked basis 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 from vesting for any LTIP awards.
2021 DBSP AWARDS GRANTED DURING FY 2021 (AUDITED)
The following DBSP share awards were granted to the Executive Directors during FY 2021:
• Tobias Moers (CEO) – 1,866 shares
• Kenneth Gregor (CFO) – 884 shares
The DBSP awards are in relation to the 2020 annual bonus which, as disclosed in the 2020 Directors’ Remuneration Report, was to be delivered 50%
in cash and 50% in deferred shares. The number of shares granted reflects the net bonus amount (post tax and NI). Shares under the DBSP awards are
deferred for a period of 3 years from grant and will be released, subject to continued employment, on 14 June 2024.
MALUS AND CLAWBACK:
• Malus and clawback provisions will be operated at the discretion of the Remuneration Committee in respect of awards granted under the DBSP 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 from release for any DBSP awards.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 130
DIRECTORS’ REMUNERATION REPORT CONTINUED
2022 LTIP AWARDS
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 decided that Adjusted EBITDA continues to be the most appropriate measure of profit for the 2022 LTIP, given market and internal
focus on this key metric, which is used to manage the business. The Committee believes strong performance in Adjusted EBITDA is key to delivering
strong shareholder returns. The Adjusted EBITDA targets have been carefully calibrated based on Aston Martin’s latest business plan and external
expectations. The range has been set to be 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. Total shareholder return (TSR) as the second measure, recognises 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 30
to 35) will be reflected in our Adjusted EBITDA and TSR performance.
It is anticipated that 2022 awards will be granted in June 2022, with awards at the following levels:
• Tobias Moers (CEO) – 300% of salary
• Doug Lafferty (CFO) – 200% of salary
The Committee has given considerable thought and discussed in detail the appropriate 2022 LTIP award levels to grant to the CEO and incoming 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 has decided to grant 2022 LTIP awards at the levels set out above to recognise
and incentivise the size of the task and effort required from these executives to continue the business turnaround.
2022 LTIP PERFORMANCE MEASURES AND TARGETS
ADJUSTED EBITDA
(£M IN FY24)
(80% OF AWARD)
RELATIVE TSR
(VS. LUXURY PEERS)
(20% OF AWARD)
2022 LTIP TARGETS
VESTING* (AS A % OF MAXIMUM)
THRESHOLD
STRETCH
MAXIMUM
THRESHOLD
MAXIMUM
350
450
525
RANK 6TH (MEDIAN)
RANK 3RD OR ABOVE
(80TH PERCEN-TILE)
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 Adjusted EBITDA element and threshold and maximum for the TSR element
** TSR peers as per 2021 LTIP, detailed on page 129
• 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
Performance for both measures will be measured over three financial years to 31 December 2024. Subject to performance, awards will vest 3 years
from grant, following the announcement of results for 2024 but subject to a further 2-year holding period post vest (net of tax).
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 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 2021, as well as the status against the shareholding guidelines. The table also summarises conditional
interests in share or option awards.
The CEO made progress towards his guideline by buying shares in the market during 2021.
AS AT
31 DECEMBER 2021
TOBIAS MOERS
KENNETH GREGOR
SHARES OWNED
OUTRIGHT
SHARES VESTED
BUT SUBJECT TO
FUTURE RELEASE1
8,815
–
1,866
884
–
TOTAL SHARES
OWNED
OUTRIGHT OR
VESTED2
10,681
884
25,644,243
AS A % OF
SALARY3
SHAREHOLDING
GUIDELINE (AS %
OF SALARY)
17.0%
2.8%
N/A
300%
200%
GUIDELINE MET?
NO
NO
LTIP AWARD
SHARES UNVESTED
AND SUBJECT TO
PERFORMANCE4
338,483
112,827
N/A
LAWRENCE STROLL5
25,644,243
Notes:
1. These shares were awarded under the DBSP in respect of 50% of the net (post tax and NI)
2020 annual bonus payment
2. There have been no changes in the period up to and including 22 February 2022
3. Based on the closing share price on 31 December 2021 of £13.53
4. These shares were granted under the 2020 and 2021 LTIP awards
5. The number of shares shown for Lawrence Stroll includes both direct and indirect interests
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
131
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
140
120
100
80
60
40
20
0
8
1
T
C
O
8
1
C
E
D
9
1
B
E
F
9
1
R
P
A
9
1
N
U
J
9
1
G
U
A
9
1
T
C
O
9
1
C
E
D
0
2
B
E
F
0
2
R
P
A
0
2
N
U
J
0
2
G
U
A
0
2
T
C
O
0
2
C
E
D
1
2
B
E
F
1
2
R
P
A
1
2
N
U
J
1
2
G
U
A
1
2
T
C
O
1
2
C
E
D
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 2021 on page 127.
CEO TOTAL REMUNERATION
FY (CEO3)
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
2021
(TM)
1,055
0%
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)
3. Tobias Moers (TM, CEO from 1 August 2020), Dr Andy Palmer (AP, CEO to 25 May 2020)
DIRECTOR REMUNERATION RELATIVE TO EMPLOYEES
The table below compares the total salary/ fees, benefits and bonus received by each Director during FY 2021 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 2020 and
2021 have been included and 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
LAWRENCE
STROLL
SALARY/FEES
BONUS
BENEFITS
0%
0%
0%
0%
N/A
N/A
TOBIAS
MOERS
0%
-100%
0%
KENNETH
GREGOR
AMR ABOU EL
SEOUD
LORD MATTHEW
CARRINGTON
PETER
ESPENHAHN
0%
-100%
-11%
0%
N/A
N/A
12%
N/A
N/A
12%
N/A
N/A
Notes:
4. 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.
5. 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 2021 but
excludes any additional changes made in the year, for example on promotion. Non-management employees received a lump-sum payment of £500 in lieu of a general salary increase, as
agreed with the trade union. Management employees did not receive either a general salary increase or an equivalent lump-sum during 2021.
6. The increase to NED fees year-on-year reflects a fee waiver that applied during April, May and June 2020.
7. The year-on-year change in bonus is also shown for non-management employees only – this population received their contractual annual bonus payments in 2021. Management bonuses
were limited to 20% of opportunity for 2020 and will be 25% of maximum for 2021
8. For benefits, there were no changes to benefit policies or levels during the year
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
132
DIRECTORS’ REMUNERATION REPORT CONTINUED
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 127) to
the remuneration of the median UK employee as well as employees at each of the lower and upper quartiles.
FY 2021
CEO PAY RATIOS (OPTION A)
25TH PERCENTILE
(P25)
27 TO 1
MEDIAN
(P50)
23 TO 1
75TH PERCENTILE
(P75)
19 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 2021 using a calculation approach consistent with that used for the incumbent
CEO in the single figure table on page 127. 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 2021 for the employees identified at P25, P50 and P75 was £39k,
£45k, and £55k, respectively. The base salary for FY 2021 for the employees at P25, P50 and P75 was £38k, £43k and £54k respectively.
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 2021
The table below sets out the total payroll costs for all employees for FY 2021 compared to distributions to shareholders by way of dividend and share
buyback. Adjusted EBITDA is also shown as context.
ADJUSTED EBITDA
DISTRIBUTIONS TO SHAREHOLDERS
PAYROLL COSTS FOR ALL EMPLOYEES
£M
% CHANGE
£M
% CHANGE
£M
% CHANGE
SERVICE AGREEMENTS
The table below sets out information on service agreements for the Executive Directors.
EXECUTIVE DIRECTOR
LAWRENCE STROLL
TITLE
EXECUTIVE CHAIRMAN
FY 2021
138
N/A
0
0%
152
+1.3%
FY 2020
(70)
0
150
EFFECTIVE DATE OF
SERVICE AGREEMENT
NOTICE PERIOD TO AND FROM THE
COMPANY
20 APRIL 2020
Mr Stroll’s appointment is terminable
in accordance with the Yew Tree
Relationship Agreement
TOBIAS MOERS
KENNETH GREGOR
DOUG LAFFERTY
CHIEF EXECUTIVE OFFICER
CHIEF FINANCIAL OFFICER
25 MAY 2020
20 JUNE 2020
INCOMING CHIEF FINANCIAL OFFICER
13 JANUARY 2022
12 MONTHS
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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
133
FURTHER INFORMATION ON REMUNERATION FOR INCOMING AND OUTGOING EXECUTIVE DIRECTORS
REMUNERATION FOR THE INCOMING CFO (DOUG LAFFERTY)
Doug Lafferty’s remuneration for his role as CFO (from 1 May 2022) is detailed below:
• Base salary of £450,000 reflecting his experience as a seasoned financial professional with a strong leadership track record gained across
manufacturing, automotive racing and retail
• A pension allowance 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 employment in 2022
• Annual award under the Long-Term Incentive Plan of up to 200% of salary
BUYOUT AWARDS
In order to secure Doug Lafferty’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.
Doug will receive buyout awards in cash and shares to compensate him for outstanding annual bonus and LTIP awards with his current employer
which are due to become payable/ vest in FY 2022 and FY 2023 and that he will forfeit on joining Aston Martin. The Committee has taken a best
practice approach to these buyout awards which are structured to reflect actual outcomes (once determined by the current employer) and timing of
the outstanding incentives being forfeited by Doug and will be disclosed in full in the 2022 DRR, once they have been awarded.
The buyout awards are subject to clawback provisions and Doug will be required to repay the awards in full if he resigns or is terminated for cause
within 12 months of each relevant payment or award date. In addition, if subsequently any award under the outstanding incentives is paid to Doug
by his current employer, the buy-out awards will be reduced by the same amount.
REMUNERATION FOR THE OUTGOING CFO (KENNETH GREGOR)
Kenneth Gregor will step down as Chief Financial Officer and as an Executive Director on 1 May 2022, when Doug Lafferty joins the business.
The Board approved a termination date of 30 June 2022, and between 1 May 2022 and 30 June 2022, Kenneth will continue to be available to the
Company to assist with the transition of responsibilities to Doug. The following leaver terms have been agreed by the Committee in connection with
the termination of Kenneth’s employment:
• Kenneth Gregor will continue to be paid salary, pension and receive benefits as an employee in the period to 30 June 2022
• Salary, pension and benefits will cease following the termination date and no payment in lieu of notice will be made for the unserved notice
period beyond the termination date
• 2021 bonus – no bonus payment is due in respect of 2021, as detailed on page 128
• 2022 bonus – the Committee has decided to apply discretion to treat Kenneth as a good leaver. Kenneth will remain eligible for any bonus
on a pro-rata basis for his period of 2022 service to the termination date. Any 2022 annual bonus due (subject to 2022 performance) will
be delivered 50% in cash and 50% in deferred shares under the DBSP
• In respect of his outstanding 2020 and 2021 LTIP awards, the Committee has decided to apply discretion to treat Kenneth as a good leaver
and these awards will be pro-rated based on period of service from grant date to the termination date. The pro-rata number of shares under
each award (2020 LTIP award – 46,510 shares and 2021 LTIP – 15,946 shares) will remain subject to the original performance conditions
and vesting dates
• No 2022 LTIP award will be granted
• In respect of his outstanding 2021 DBSP award, the Committee has decided to apply discretion to treat Kenneth as a good leaver and this award
will be released in full on the original release date (884 shares on 14 June 2024)
• Kenneth will be required to retain all those shares in the Company that he holds as at 30 June 2022 (including shares under the DBSP awards)
for a period of two years until 30 June 2024
• Kenneth will continue to be covered by the Company’s D&O insurance and received a contribution towards his legal advice of £3,000 plus VAT
• No payments for loss of office will be paid to Kenneth
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 134
DIRECTORS’ REMUNERATION REPORT CONTINUED
NON-EXECUTIVE DIRECTORS’ REMUNERATION (AUDITED)
The Policy on remuneration for Non-Executive Directors is set out on page 123.
The table below sets out the single figure of total remuneration received or receivable by the Non-Executive Directors in respect of FY 2021
(and the prior financial year).
Shown in £’000s
NON EXECUTIVE DIRECTORS
MICHAEL DE PICCIOTTO
Year to 31 December 2021
Year to 31 December 2020
AMEDEO FELISA1
Year to 31 December 2021
ROBIN FREESTONE2
Year to 31 December 2021
MARIGAY MCKEE3
Year to 31 December 2021
NATALIE MASSENET4
Year to 31 December 2021
FRANZ REINER5
Year to 31 December 2021
ANTONY SHERIFF6
Year to 31 December 2021
ANNE STEVENS7
Year to 31 December 2021
FORMER NON EXECUTIVE DIRECTORS
AMR ABOU EL SEOUD8
Year to 31 December 2021
Year to 31 December 2020
LORD MATTHEW CARRINGTON9
Year to 31 December 2021
Year to 31 December 2020
PETER ESPENHAHN10
Year to 31 December 2021
Year to 31 December 2020
RICHARD PARRY-JONES11
Year to 31 December 2021
BILL TAME12
Year to 31 December 2021
Year to 31 December 2020
STEPHAN UNGER13
Year to 31 December 2021
Notes:
1. Amedeo Felisa joined the Board on 8 July 2021
2. Robin Freestone joined the Board on 1 February 2021
3. Marigay McKee joined the Board on 8 July 2021
4. Natalie Massenet joined the Board on 8 July 2021
5. Franz Reiner joined the Board on 8 July 2021
6. Antony Sheriff joined the Board on 1 February 2021
7. Anne Stevens joined the Board on 1 February 2021
8. Amr Abou El Seoud stepped down from the Board on 18 February 2021
9. Lord Carrington stepped down from the Board on 25 May 2021
10. Peter Espenhahn stepped down from the Board on 25 May 2021
11. Richard Parry-Jones sadly passed away on 16 April 2021
12. Bill Tame stepped down from the Board on 28 January 2021
13. Stephan Unger joined the Board on 1 February 2021 and stepped down from the Board on 8 July 2021
TOTAL FEES
–
–
34
71
30
32
29
83
78
8
55
32
71
32
71
16
25
39
28
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 135
SUMMARY OF NON-EXECUTIVE DIRECTORS’ FEES FOR FY 2022
The table below sets out the annual fee structure for the NEDs for 2022 (there are no changes to the fee levels that applied in 2021).
NED ROLE
BASIC NED FEE
SID FEE
COMMITTEE CHAIR
COMMITTEE MEMBER
FY 2021 FEE (£’000s)
FY 2022 FEE (£’000s)
60
15
15
5
60
15
15
5
As detailed in the Governance Report on page 91, the Sustainability Committee was established in December 2021, fees for the Chair and each non-
executive member of this Committee were approved by the Board (excluding the Non-Executive Directors) at £15k and £5k p.a. respectively, in-line
with the structure set out in the table above.
A further Board committee, the Product Strategy Committee, was established in January 2022. Detailed information on this Committee is also set
out in the Governance Report on page 92. The Board (excluding the Non-Executive Directors) approved fees at the following levels for the Chair and
non-executive member for 2022 operation of the Product Strategy Committee:
• Chair (Non-Executive Director) – £10,000 per meeting
• Member (Non-Executive Director) – £5,000 per meeting
NON-EXECUTIVE DIRECTOR SHAREHOLDINGS (AUDITED)
The table above summarises the total interests of the Non-Executive Directors (and their connected persons) in ordinary shares of Aston Martin Lagonda
Global Holdings plc as at 31 December 2021 (or at the date of stepping down, if earlier).
NON-EXECUTIVE DIRECTORS
MICHAEL DE PICCIOTTO2
AMEDEO FELISA3
ROBIN FREESTONE
MARIGAY MCKEE
NATALIE MASSENET
FRANZ REINER
ANTONY SHERIFF
ANNE STEVENS
FORMER NON-EXECUTIVE DIRECTORS
AMR ABOU EL SEOUD
LORD MATTHEW CARRINGTON
PETER ESPENHAHN
RICHARD PARRY-JONES
BILL TAME
STEPHAN UNGER
Notes:
1. Other than those stated below, there have been no changes in the period up to and including 22 February 2022
2. Held via St James Invest SA
3. Held via FA Consult
TOTAL NUMBER OF SHARES OWNED1
1,150,000
2,000
13,850
–
4,000
–
–
7,000
–
–
132
–
–
–
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 136
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.
The terms and conditions of appointment for Non-Executive Directors are available for inspection by shareholders at the registered office
of the Company.
DATE OF APPOINTMENT
NOTICE PERIOD
24 APRIL 2020
8 JULY 2021
1 FEBRUARY 2021
8 JULY 2021
8 JULY 2021
8 JULY 2021
1 FEBRUARY 2021
1 FEBRUARY 2021
3 MONTHS
3 MONTHS
3 MONTHS
3 MONTHS
3 MONTHS
3 MONTHS
3 MONTHS
3 MONTHS
NON-EXECUTIVE DIRECTORS
MICHAEL DE PICCIOTTO
AMEDEO FELISA
ROBIN FREESTONE
MARIGAY MCKEE
NATALIE MASSENET
FRANZ REINER
ANTONY SHERIFF
ANNE STEVENS
REMUNERATION COMMITTEE IN FY 2021
COMMITTEE MEMBERSHIP
The following Directors served as members of the Committee during FY 2021:
• Anne Stevens (from 1 February 2021, Chair from 25 February 2021)
• Robin Freestone (from 1 February 2021)
• Antony Sheriff (from 1 February 2021)
• Natalie Massenet (from 8 July 2021)
• Lord Matthew Carrington (until 25 February 2021, Chair until this date)
• Peter Espenhahn (until 25 February 2021)
• Richard Parry-Jones (until 16 April 2021)
• Bill Tame (until 28 January 2021)
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 other Chief-level roles (including Chief Operating Officer, Chief Creative Officer, Global Chief Brand and Commercial Officer, General Counsel).
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
137
SUMMARY OF MEETINGS
The Committee typically meets four to six times a year. During FY 2021,
the Committee met six times and the agenda items discussed at these
meetings are summarised below.
EARLY
FEBRUARY
• FY 2021 annual bonus approach
• FY 2021 LTIP approach
• Review of draft FY 2020 DRR
• Updated Committee terms of reference
• Committee effectiveness review
LATE
FEBRUARY
• Broader employee reward – pay negotiations
update and review of DB pension
• Approval of 2020 annual bonus payment
• Approval of 2021 annual bonus approach
• Approval of 2021 LTIP approach
• Approval of CEO and CFO remuneration
• Approval of 2020 Directors’ Remuneration Report
• Gender Pay Gap Report
MARCH
• Approval of Global Chief Brand and Commercial
JULY
SEPTEMBER
DECEMBER
Officer remuneration
• Annual Remuneration Committee cycle summary
• 2022 Remuneration Policy review
• Update on external executive pay environment
• Broader employee reward update
• 2022 Remuneration Policy review
• 2022 Remuneration Policy review update
• Expected annual bonus outcome for 2021
• FY 2022 incentives approach
• Update on DB pension closure
• Updated Committee terms of reference
• Remuneration Committee annual evaluation
• CFO leaver terms
COMMITTEE PERFORMANCE EVALUATION
The Committee was evaluated as part of the internal effectiveness review
of the Board and its Committees (details of which can be found on page
101). The Committee also reviewed its own performance and was satisfied
that it continued to perform effectively and had worked constructively
and collaboratively in year of many Committee changes and business
activities and was rated highly by the members and other respondents to
the evaluation survey.
The focus of the Committee for the forthcoming year will be to review
the adequacy of the maintenance of dialogue with key institutional
investors and their representatives and to improve the dialogue with and
visibility of the external advisors and the Committee.
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,
CEO, CFO, General Counsel, Company Secretary and Director of Reward
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 2021 were £40,981, which had been charged on a
time spent basis.
Freshfields Braukhaus Deringer also provided legal advice to the
Committee in relation to the operation of the Company’s share plans,
employment law considerations and compliance with legislation.
ATTENDANCE AT COMMITTEE MEETINGS
The following table sets out the number of meetings attended by each
Committee member during FY 2021.
REMUNERATION VOTING RESULTS
The table below shows the results of the shareholder votes at the 2021 AGM
on the DRR and at the 2019 AGM on the Directors’ Remuneration Policy.
DIRECTORS AS AT 31 DECEMBER 2021
MEETING ATTENDANCE
AGM VOTING RESULTS
VOTES FOR
VOTES
AGAINST
VOTES
WITHHELD
LORD MATTHEW CARRINGTON1
PETER ESPENHAHN1
ROBIN FREESTONE
RICHARD PARRY-JONES2
NATALIE MASSENET3
ANTONY SHERIFF
ANNE STEVENS
BILL TAME4
2021 AGM: TO APPROVE THE
DRR FOR THE YEAR ENDING
31 DECEMBER 2020
2019 AGM: TO APPROVE
THE DIRECTORS’
REMUNERATION POLICY
56,014,841
(81.80%)
12,461,411
(18.20%)
277,313
198,266,590
(93.39%)
14,022,935
(6.61%)
299
APPROVAL
This report has been approved by the Board and signed on its behalf by:
2/2
2/2
6/6
3/3
3/3
6/6
6/6
0/0
1. Matthew Carrington and Peter Espenhahn stepped down from the Committee
on 25 February 2021
2. Richard Parry-Jones died on 16 April 2021
3. Natalie Massenet joined the Committee on 8 July 2021
4. Bill Tame stepped down from the Committee on 28 January 2021
ANNE STEVENS
CHAIR, REMUNERATION COMMITTEE
22 FEBRUARY 2022
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
138
DIRECTORS’
REPORT
ABOUT THE DIRECTORS’ REPORT
This Directors’ Report sets out the information required to be disclosed
by the Company in compliance with the Act, the UK Listing Rules and the
Financial Conduct Authority’s Disclosure and Transparency Rules (DTR).
It forms part of the management report as required under the DTR, along
with the Strategic Report (pages 5-81) and other sections of this Annual
Report and Accounts including the Corporate Governance Report (pages
82-137) all of which are incorporated by reference, as outlined in the
table below.
INFORMATION
Business Model
Corporate Governance Framework
Community and Charitable Giving
Directors’ Conflicts of interest
Directors’ Share Interests and Remuneration
Director Training and Development
Diversity, Equality and Inclusion
Employee Engagement
Financial Instruments
Future Developments and Strategic Priorities
Going Concern Statement
Greenhouse Gas Emissions
Health & Safety
Human Rights
Modern Slavery Statement
Principal Risks and Risk Management
Post Balance Sheet Events
Non-Financial Information
Results
Risk Management and Internal Control
Section 172 Statement
Stakeholder Engagement
Statement of Directors’ Responsibilities
Viability Statement
REPORTED IN
Strategic Report
Corporate Governance Report
Strategic Report
Corporate Governance Report
Directors’ Report on Remuneration
Corporate Governance Report
Strategic Report
Strategic Report
Financial Statements (note 22)
Strategic Report
Financial Statements (note 1)
Strategic Report
Strategic Report
Strategic Report
Strategic Report
Strategic Report
Financial Statements (note 31)
Strategic Report
Consolidated Income Statement
Strategic Report
Strategic Report
Strategic Report
Directors’ Report
Strategic Report
PAGES
30-31
90-92
67
96
127-137
98
62
65
186-197
34-35
157
51-52
61
69
69
38-43
205
70
152
38-39
46-47
44-45
144
43
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 NAME
ROBIN FREESTONE
RICHARD PARRY-JONES
ANTONY SHERIFF
ANNE STEVENS
STEPHAN UNGER
AMEDEO FELISA
MARIGAY MCKEE
NATALIE MASSENET
FRANZ REINER
WILLIAM TAME
AMR ABOU EL SEOUD
MATTHEW CARRINGTON
PETER ESPENHAHN
139
DATE OF APPOINTMENT
DATE OF CESSATION
1 FEBRUARY 2021
1 FEBRUARY 2021
1 FEBRUARY 2021
1 FEBRUARY 2021
1 FEBRUARY 2021
8 JULY 2021
8 JULY 2021
8 JULY 2021
8 JULY 2021
16 APRIL 2021
7 JULY 2021
28 JANUARY 2021
18 FEBRUARY 2021
25 MAY 2021
25 MAY 2021
ANNUAL GENERAL MEETING
The Company’s Annual General Meeting (AGM) will be held at
10:00am on Wednesday 25 May 2022 at the offices of Freshfields
Bruckhaus Deringer. The Notice of the AGM accompanies the Annual
Report and Accounts and is available on the Company’s website at
www.astonmartinlagonda.com/investors.
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 91.
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 142.
CORPORATE GOVERNANCE STATEMENT
Under the Disclosure Guidance and Transparency Rules (“DTRs”), a
requirement exists for a corporate governance statement to be included
in this Directors’ Report. The corporate governance statement, explaining
how the Group complies with the Governance Code, is set out on page 89.
A description of the composition and operation of the Board and its Committees
is set out on pages 89-101. Other than the areas of non-compliance identified
on page 89, the Company has complied throughout the accounting period
with the 2018 UK Corporate Governance Code.
DIRECTORS
The names and details of the Directors as at the date of this Report are set
out on pages 84-86.
The names of the individuals who became or ceased to be Directors
during the year ended 31 December 2021 are set out in the above table.
As stated elsewhere in the Annual Report, William Tame and Amr
Abou El Seoud ceased to be Directors with effect from 28 January 2021
and 18 February 2021 respectively and Matthew Carrington and Peter
Espenhahn both stepped down from the Board following the conclusion
of the AGM on 25 May 2021. Anne Stevens, Robin Freestone, Richard
Parry-Jones and Antony Sheriff joined the Board with effect from 1 February
2021. Stephan Unger as the Representative Director of MBAG joined the
Board on 1 February 2021 and ceased to be a Director on 7 July 2021.
Richard Parry-Jones died in an accident on 16 April 2021. Amedeo Felisa,
Marigay McKee, Natalie Massanet and Franz Reiner joined the Board with
effect from 8 July 2021.
Amedeo Felisa, Marigay Mckee, Natalie Massenet and Franz Reiner
will be offering themselves for election and all remaining members of the
Board will be offering themselves for re-election at the AGM.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 140
DIRECTORS’ REPORT CONTINUED
DIRECTORS’ INSURANCE AND INDEMNITIES
The Company’s Articles of Association provide for the Directors and
officers of the Company to be appropriately indemnified subject to the
provisions of the Companies Act 2006. In addition, the Company maintains
Directors’ and Officers’ liability insurance, which provides cover for legal
actions brought against its Directors and officers. Neither the Company’s
indemnity nor insurance covers claims arising from dishonesty or fraud.
In addition, 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 2021
and up to the date of this Report.
DISCLOSURE PURSUANT TO LISTING RULE LR9.8.4R
In accordance with LR9.8.4R, the table below sets out the location of the
information required to be disclosed, where applicable.
APPLICABLE SUB-PARAGRAPH WITHIN LR9.8.4R
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
127
N/A
201
N/A
N/A
98
N/A
N/A
141
N/A
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.
DIVIDEND AND RESULTS
Revenue from the continuing business during the period amounted to
£1.1bn (2020: £612m). A review of the Group’s consolidated results is
set out from page 152.
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.
EQUAL OPPORTUNITIES AND EMPLOYMENT OF PERSONS
WITH DISABILITIES
The Group has policies on equal opportunities and the employment of
persons with disabilities 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 persons with disabilities are always
fully considered, bearing in mind the respective aptitudes and abilities of
the applicant concerned. In the event of employees 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
persons with disabilities should, as far as possible, be identical to that of
a person who does not have a disability.
GOING CONCERN
After due enquiry, the Directors have a reasonable expectation that the
Group have adequate resources to continue in operational existence for
the foreseeable future and to comply with its financial covenants. For these
reasons, they continue to adopt the going concern basis in preparing the
Financial Statements. Further details of the going concern statement for the
Group are set out in note 1 of the Financial Statements and the Viability
Statement is set out on page 43.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
141
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 26 to the Financial Statements. This is incorporated by reference and
deemed to be part of this Report.
At 31 December 2021, 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 2021, the Company had
116,459,513 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 (and were submitted
and approved at the 2020 AGM).
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 which can be found on the Company’s website.
Since 1 July 2021, 30,318,600 subscription rights have been
exercised by warrantholders and 1,525,926 new ordinary shares have
been admitted to trading on the Main Market for listed securities of the
London Stock Exchange. Further details are contained in note 22. to the
Financial Statements.
On 31 December 2021 the Aston Martin Lagonda Global Holdings
plc PSP plan held 74,526 shares issued but not allocated in the Employee
Benefit Trust under the legacy IPO LTIP. The right to receive any dividend
has been waived by the Trustee of the Employee Benefit Trust over the
entire holding of the Trust.
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 2021,
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 61.
POLITICAL DONATIONS
It is the Company’s policy not to make political donations and no such
political donations were made during the period. In line with 2021
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.
RESEARCH AND DEVELOPMENT
The Group spent £191m (2020: £182m) on research and development
during the year. See note 4 to the Financial Statements.
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, MBAG 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 ANNUAL REPORT AND ACCOUNTS 2021
142
DIRECTORS’ REPORT CONTINUED
SIGNIFICANT SHAREHOLDER GROUP
Yew Tree Consortium
Mercedes-Benz AG
% OF VOTING RIGHTS TO
NOMINATE 2 DIRECTORS
10% OR ABOVE
15% OR ABOVE
% OF VOTING RIGHTS TO
NOMINATE 1 DIRECTOR
BETWEEN 7% AND 10%
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%
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, 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.
SIGNIFICANT CONTRACTS
At 31 December 2021, the Group had a Revolving Credit Facility of
£90.6m which contains a change of control clause. The Group also had
US$ 1,184m of 10.50% Senior Secured Notes due 2025, and US$355m
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.
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 MBAG. The relationship between
the Company and each of these significant shareholder groups is
governed by two separate relationship agreements (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.
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 in the table above.
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) were issued to MBAG on 7 December 2020.
The Company is embedding the first tranche of technology from MBAG
into its product renewal and expansion pipeline. There are currently no
plans to issue additional shares to MBAG until early 2023. Further details
of the terms of the Strategic Cooperation Agreement are set out in the
Combined Prospectus and Circular dated18 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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
143
In early 2020, the Group entered into a 10 year initial term agreement
under which the Racing Point F1TM team was re-launched as the Aston
Martin Cognizant F1TM team with effect from the 2021 season, bringing
an Aston Martin team back to the F1TM grid for the first time since 1960.
The agreement includes a sponsorship arrangement effective from 2021 to
2025 with expenses commensurate with the Group’s previous annual F1TM
expenditure and is renewable for additional five years, subject to certain
conditions. The Group anticipates that this agreement will strengthen its
brand presence without being associated with the direct costs of owning
an F1TM team. Under the agreement, the Group will move to an enhanced
presence by providing the chassis and the team name Aston Martin.
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 the
year ended 31 December 2021, and a description of the principal risks
and uncertainties faced by the Company. The Strategic Report on pages
5 to 81 is incorporated by reference and shall be deemed to form part of
this Directors’ Report.
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:
SHAREHOLDER
Lawrence Stroll1
Yew Tree Overseas Ltd
Mercedes-Benz AG
Invesco Limited
Permian Investment Partners, LP
NUMBER OF
ORDINARY
SHARES
% OF TOTAL
VOTING
RIGHTS
25,644,243
19,050,922
13,615,299
10,157,104
3,971,126
22.02%
16.98%
11.69%
8.72%
3.41%
1.
Includes 19,050,922 shares also disclosed by Yew Tree Overseas Ltd
In the period from 1 January 2022 to 22 February 2022, Invesco has
increased their holding above the 10% disclosure level. Their holding as
at 22 February 2022 is 12,077,847 shares representing 10.37%.
There have been no other changes notified to the Company in
accordance with Rule 5 of the Disclosure Guidance and Transparency
Rules to the holdings as disclosed above.
TRANSACTIONS WITH RELATED PARTIES
Details of Related Party Transactions which have been undertaken in
the year ended 31 December 2021 are included within note 30 to the
Financial Statements.
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.
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.
The Strategic Report (from pages 5 to 81) and the Directors’ Report
(as described above) have been approved by the Board on 22 February 2022.
By order of the Board
RACHAEL HAMBROOK
COMPANY SECRETARY AND
DIRECTOR OF GOVERNANCE
Aston Martin Lagonda Global Holdings Plc Registered Office: Banbury
Road, Gaydon Warwick CV35 0DB
Registered in England and Wales Registered number: 11488166
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 144
GOVERNANCE REPORT
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE
ANNUAL REPORT AND FINANCIAL STATEMENTS
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 UK-adopted international accounting standards (IFRSs)
and have elected to prepare the parent Company Financial Statements in
accordance with United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards and applicable law), including
Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101).
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:
The Directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the parent Company’s and Group’s
transactions and disclose with reasonable accuracy at any time the
financial position of the parent Company and the Group and enable them
to ensure that the parent Company and Group Financial Statements comply
with the Companies Act 2006. They are also responsible for safeguarding
the assets of the Group and parent Company and for taking reasonable
steps for the prevention and detection of 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 comply 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.
STATEMENT OF DIRECTOR RESPONSIBILITIES UNDER THE
DISCLOSURE AND TRANSPARENCY RULES
Each of the Directors, at the date of this Report whose names and functions
are listed on pages 84 to 86, confirm that, to the best of their knowledge:
• select suitable accounting policies in accordance with International
Accounting Standard 8 Accounting Policies, Changes in Accounting
Estimates and Errors and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• present information, including accounting policies, in
a manner that provides relevant, reliable, comparable
and understandable information;
• provide additional disclosures when compliance with the specific
requirements in IFRSs and in respect of the parent Company Financial
Statements, FRS 101 is insufficient to enable users to understand the
impact of particular transactions, other events and conditions on the
Group and Company financial position and financial performance;
• for the Group Financial Statements, state whether UK-adopted
international accounting standards 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, including FRS 101 have been
followed, subject to any material departures disclosed and explained
in the parent Company Financial Statements; and
• prepare the Financial Statements on the going concern basis unless it
is inappropriate to presume that the Company and/or the Group will
continue in business.
• that the consolidated Financial Statements, prepared in accordance
with UK-adopted international accounting standards, 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;
• that the Annual Report and Accounts, including the Strategic Report,
includes a fair review of the development and performance of the
business and the position of the Company and 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 22 February 2022 and
signed on its behalf by:
TOBIAS MOERS
CHIEF EXECUTIVE CHIEF FINANCIAL
OFFICER
KENNETH GREGOR
OFFICER
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
145
FINANCIAL STATEMENT
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 2021 and of the Group’s loss for the
year then ended;
• the Group Financial Statements have been properly prepared in accordance with UK adopted international accounting standards;
• 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 plc (the ‘parent company’) and its subsidiaries (the ‘Group’) for
the year ended 31 December 2021 which comprise:
GROUP
PARENT COMPANY
Consolidated statement of financial position as at 31 December 2021
Balance sheet as at 31 December 2021
Consolidated statement of comprehensive income for the year then ended
Statement of changes in equity for the year then ended
Consolidated 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 33 to the Financial Statements, including a summary
of significant accounting policies
The financial reporting framework that has been applied in the preparation of the Goup Financial Statements is applicable law and UK adopted
international accounting standards. 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 believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
INDEPENDENCE
We are independent of the Group and parent 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.
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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC CONTINUED
146
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 2023, and which includes cashflow and liquidity
forecasts, details of facilities available, forecast covenant calculations and the results of management’s downside scenarios, and testing the
integrity of the model, 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. To do this we specifically considered forecast wholesale volumes compared to historical volumes, current
confirmed orders and competitor volumes, sales margins and capital expenditure plans;
• Ensuring that these forecasts appropriately reflect the assessed impact of COVID-19 and climate change commitments;
• Analysing the historical accuracy of forecasting by comparing management’s forecasts to actual results, both for 2021 and through the
subsequent events period and performing inquiries to the date of this report to determine whether forecast cash flows are reliable based
on past experience;
• Considering external factors that could impact liquidity/forecasts 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 note 1 of the Financial Statements, assessing whether there
are any other scenarios which should be considered, and assessing whether the quantum of the impact of the downside scenario modelled in
the going concern period is realistic;
• Performing reverse stress testing on the going concern model by independently determining what reduction in wholesale volumes would be
required before liquidity would be exhausted. This included comparing this scenario to the downside scenario contemplated by management
and considering the likelihood of the events required to exhaust available liquidity;
• 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.
We observed that the Group achieved the forecast total core wholesale volumes that it was targeting in 2021 and that the forecast core wholesale
volumes for the going concern assessment period are reasonable compared to historic performance and the those reported by comparable brands
in the luxury automotive sector. We observed the control exercised over capital expenditure in comparison to amounts forecast which corroborates
management’s assertion that in the event of the modelled downside occurring some of this expenditure could be deferred. Further, the Group has the
borrowings disclosed in note 22 which includes details of the maturities of those facilities.
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 a period to 30 June 2023.
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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 147
OVERVIEW OF OUR AUDIT APPROACH
Audit scope
• We performed an audit of the complete financial information of four components and audit procedures on specific balances for a further
two components.
• The components where we performed full or specific audit procedures accounted for 100% of Adjusted EBITDA, 100% of Revenue and
Key audit matters
• Revenue recognition, specifically;
100% of Total assets.
– 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 £3.5m which represents 2.5% of Adjusted EBITDA.
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 seven reporting
components of the Group, we selected six components covering entities
within the UK, Europe, USA, Japan and China which represent the principal
business units within the Group.
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 100% of the Group’s Adjusted EBITDA (2020: 99% of the
Group’s Gross Margin, the basis for materiality in the prior year), 100%
(2020: 100%) of the Group’s Revenue and 100% (2020: 100%) of the
Group’s Total assets. For the current year, the full scope components
contributed 94% of the Group’s Adjusted EBITDA (2020: 94% of the
Group’s Gross Margin), 94% (2020: 99%) of the Group’s Revenue and 98%
(2020: 100%) of the Group’s Total assets. The specific scope components
contributed 6% of the Group’s Adjusted EBITDA (2020: 5% of the Group’s
Gross Margin), 6% (2020: 1%) of the Group’s Revenue and 2% (2020: 0%)
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 of selected significant accounts of
the Group.
Of the six components selected, we performed an audit of the complete
financial information of four components (“full scope components”)
which were selected based on their size or risk characteristics. For the
remaining two components (“specific scope components”), we performed
audit procedures on specific accounts within that component that we
considered had the potential for the greatest impact on the significant
The remaining one component that represents 0% of the Group’s Adjusted
EBITDA, 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.
ADJUSTED EBITDA
REVENUE
TOTAL ASSETS
%
%
%
Full scope components
Specific scope components
94
6
Full scope components
Specific scope components
94
6
Full scope components
Specific scope components
98
2
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC CONTINUED
148
CHANGES FROM THE PRIOR YEAR
One component designated as full scope in the prior year was classified as specific scope in the current year as a result of a decrease in the level of
contribution to the Groups’ Adjusted EBITDA.
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
four full scope components, audit procedures were performed on three of these directly by the primary audit team. For the two specific scope
components, audit procedures were performed on one of these directly by the primary audit team. For the components not audited by the primary
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.
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 2021, these visits were conducted virtually due to the COVID-19 pandemic. During the
current year’s audit cycle visits were undertaken by the primary audit team to the component teams in the UK and China. For China the component visit
was virtual and for the UK the component team review was in person. These 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 where appropriate during various stages of the audit. We ensured they had adequate time and resources to complete the audit
procedures, reviewed selected working papers in significant risk areas and we were responsible for the scope and direction of the audit process. This,
together with the additional procedures performed at Group level, gave us appropriate evidence for our opinion on the Group Financial Statements.
CLIMATE CHANGE
There has been increasing interest from stakeholders as to how climate change will impact Aston Martin Lagonda. The Group has determined that
the most significant future impacts from climate change on its operations will be from the transition to EV (‘Electric vehicle’) powertrains, managing
the brand/reputational impact of continuing to sell ICE (‘Internal combustion engine’) powered vehicles in the short to medium term and managing
the financial impact of increasing carbon related costs in response to changes in legislation. These are explained on pages 54-59 in the required Task
Force for Climate related Financial Disclosures and on pages 38-43 in the principal risks and uncertainties, which form part of the “Other information,”
rather than the audited Financial Statements. Our procedures on these disclosures therefore consisted solely of considering whether they are materially
inconsistent with the Financial Statements or our knowledge obtained in the course of the audit or otherwise appear to be materially misstated.
Governmental and societal responses to climate change risks are still developing, and are interdependent upon each other, and consequently Financial
Statements cannot capture all possible future outcomes as these are not yet known.
As explained in note 1 in preparing the Consolidated Financial Statements management has considered the impact of climate change, particularly
in the context of the disclosures included in the Strategic Report this year and the new sustainability goals including the stated net-zero targets.
These considerations did not have a material impact on the financial reporting judgements and estimates, consistent with the assessment that climate
change is not expected to have a significant impact on the Group’s going concern assessment to June 2023 nor the viability of the Group over the
next five years.
Our audit effort in considering climate change was focused on ensuring that the effects of material climate risks disclosed on pages 38-43 have been
appropriately reflected in asset values where values are determined through modelling future cash flows, being the impairment testing of capitalised
development costs. Details of our procedures and findings on impairment are included in our key audit matters below. We also challenged the
Directors’ considerations of climate change in their assessment of going concern and viability and associated disclosures.
Whilst the Group have stated their commitment to achieve net-zero carbon emissions from its factories by 2030 and net-zero carbon emissions across
the entire value chain by 2039, the Group are currently unable to determine the full future economic impact on their business model, operational
plans and customers to achieve this and therefore as set out above the potential impacts are not fully incorporated in these Financial Statements.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 149
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.
RISK
OUR RESPONSE TO THE RISK
Revenue Recognition (2021:
£1,095.3m, 2020: £611.8m)
Refer to the Audit and Risk Committee
Report (page 108-114); Accounting
policies (note 2 of the Financial
Statements)
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.
Capitalisation and amortisation of
development costs (Net book value
of capitalised development costs:
£833.3m, 2020: £784.1m, Amounts
capitalised in the year: £178.2m,
2020: £177.6m, Amortisation charge
£129.0m, 2020 £93.6m)
Refer to the Audit and Risk Committee
Report (page 108-114); Accounting
policies (note 2 of the Financial
Statements)
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 within the
sales process, paying particular attention to those around cut-off and bill and
hold transactions.
• For a sample of sales transactions 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 confirming the transaction directly
with the third-party dealer or by obtaining the customer requests to hold the vehicles
on their behalf.
• 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 audit procedures over this risk area in four full and specific scope
locations, which covered 100% of the risk amount.
• 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 Group’s 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 journals related to capitalised
development costs.
• We performed full scope audit procedures over this risk area in one location, which
covered 100% of the risk amount.
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.
Our audit procedures did
not identify evidence of
material misstatement of
the amortisation charge for
development costs recorded
in the period.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC CONTINUED
150
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.
RISK
OUR RESPONSE TO THE RISK
Impairment of capitalised development
costs (Net book value of development
costs: £833.3m, 2020: £784.1m,
Impairment charge £nil, 2020 £69.4m)
Refer to the Audit and Risk Committee
Report (page 108-114); Accounting
policies (note 2 of the Financial
Statements)
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 confirmed the existence and the design effectiveness of controls around
management’s impairment assessment for capitalised development costs.
• 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 and reflect appropriately the effects of material climate risks as
disclosed on pages 38-43.
• 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.
• We have analysed the historical accuracy of budgets to actual results to determine
whether forecast cash flows are reliable based on past experience.
• We considered market data and the results of wider procedures in our audit
in contemplation of whether any contra evidence existed.
• We calculated the degree to which the key assumptions would need to fluctuate before
an impairment arose and considered the likelihood of this occurring.
• 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 audit procedures over this risk area in one full scope location, 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 £3.5 million (2020: £2.2 million), which is 2.5% of Adjusted EBITDA (2020: 2% of Gross Margin). We believe that
Adjusted EBITDA provides us with an appropriate basis for materiality as it is a key metric used by investors and management in assessing the
performance of the Group. The materiality basis has changed from Gross Margin in the prior year to Adjusted EBITDA in the current year as a result
of the Group’s improved profitability.
We determined materiality for the parent company to be £21.8 million (2020: £13.9 million), which is 1.5% (2020: 1.0%) of Equity.
STARTING BASIS
• Loss before tax – £(213.8)m
ADJUSTMENTS
• Adjusting items – £(31.9)m
• Net adjusting
finance expense – £171.4m
• Depreciation and
Amortisation – £212.2m
MATERIALITY
• Totals – £137.9m
• Materiality of £3.5m
(2.5% of materiality basis)
During the course of our audit, we reassessed initial materiality and updated this for actual results.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 151
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% (2020: 50%) of our planning materiality, namely £1.7m (2020: £1.1m). We have set performance materiality at this percentage
due to the level of audit adjustments identified in the prior year.
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 £0.34m to £1.7m (2020: £0.24m to £1.1m).
REPORTING THRESHOLD
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit and Risk Committee that we would report to them all uncorrected audit differences in excess of £0.17m (2020: £0.11m),
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 this annual report, 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 this gives rise to 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
• the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ASTON MARTIN LAGONDA GLOBAL HOLDINGS PLC CONTINUED
152
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
We have reviewed 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 by the Listing Rules.
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 140;
• 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 43;
• Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in operation and meets its liabilities
set out on page 43 and 140;
• Directors’ statement on fair, balanced and understandable set out on page 97;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 113;
• The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out
on page 113; and
• The section describing the work of the Audit and Risk Committee set out on page 110.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors’ Responsibilities Statement set out on page 144, 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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 153
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
(UK adopted international accounting standards, 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 and Risk 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 and Risk Committee and performing focused testing, as referred to in the key audit matters section above.
• 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 and Risk 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 three years, covering the years ending 2019
to 2021.
• The audit opinion is consistent with the additional report to the Audit and Risk 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
22 FEBRUARY 2022
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2021
154
152
Revenue
Cost of sales
Gross profit
Selling and distribution expenses
Administrative and other operating expenses
Operating loss
Finance income
Finance expense
Loss before tax
Income tax credit
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
Effect of change in rate in taxation
Items that are or may be reclassified to the Income Statement
Foreign currency 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 income/(loss) 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
Notes
3
4
7
8
9
25
9
9
22
22
9
11
11
Adjusted
£m
1,095.3
(751.6)
343.7
(84.8)
(333.2)
(74.3)
2.3
(173.7)
(245.7)
16.2
(229.5)
Adjusting
items*
£m
–
–
–
–
(2.2)
(2.2)
34.1
–
31.9
8.3
40.2
2021
Total
£m
1,095.3
(751.6)
343.7
(84.8)
(335.4)
(76.5)
36.4
(173.7)
(213.8)
24.5
(189.3)
(191.6)
2.3
(189.3)
3.8
(1.0)
6.0
2.3
(0.3)
(4.3)
1.2
7.7
(181.6)
(183.9)
2.3
(181.6)
(165.9p)
(165.9p)
All operations of the Group are continuing.
* Adjusting items are defined in note 2 with further detail shown in note 5.
The notes on pages 159 to 210 form an integral part of the Financial Statements.
Adjusted
£m
611.8
(500.7)
111.1
(79.6)
(256.4)
(224.9)
33.1
(107.6)
(299.4)
22.6
(276.8)
Adjusting
items*
£m
–
–
–
–
(98.0)
(98.0)
6.9
(75.5)
(166.6)
32.9
(133.7)
2020
Total
£m
611.8
(500.7)
111.1
(79.6)
(354.4)
(322.9)
40.0
(183.1)
(466.0)
55.5
(410.5)
(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)
(543.0p)
(543.0p)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
155
153
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
Capital
£m
11.5
Share
Premium
£m
1,108.2
Merger
Reserve
£m
144.0
Capital
Redemption
Reserve
£m
9.3
Capital
Reserve
£m
6.6
Translation
Reserve
£m
0.4
Hedge
Reserves
£m
10.9
Retained
Earnings
£m
(503.1)
Non-
controlling
Interest
£m
16.3
Total
Equity
£m
804.1
Group
At 1 January 2021
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 22)
Amounts reclassified to the
Income Statement – cash flow
hedges (note 22)
Remeasurement of Defined
Benefit liability (note 25)
Effect of change in rate of
taxation (note 9)
Tax on other comprehensive
income (note 9)
Total other comprehensive
income / (loss)
Total comprehensive income /
(loss) for the year
Transactions with owners,
recorded directly in equity
Warrant options exercised
(note 26)
Credit for the year under equity
settled share-based payments
(note 28)
Effect of change in rate
of taxation (note 9)
Tax on items credited to equity
(note 9)
Reclassification (note 26)
Total transactions with owners
At 31 December 2021
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.1
15.1
–
–
–
–
–
–
0.1
11.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(191.6)
2.3
(189.3)
2.3
–
–
–
–
3.8
6.8
(0.3)
(4.3)
–
(0.8)
1.2
(1.0)
(4.2)
9.6
–
–
–
–
–
–
–
2.3
(0.3)
(4.3)
3.8
6.0
0.2
7.7
(4.2)
(182.0)
2.3
(181.6)
–
–
–
–
–
–
6.7
14.8
–
30.0
3.1
4.7
0.1
–
22.7
(662.4)
3.1
4.7
0.1
–
37.9
660.4
–
–
–
–
18.6
–
–
–
–
–
2.3
2.3
–
–
–
–
–
–
2.7
–
0.1
15.2
1,123.4
–
(0.1)
(0.1)
143.9
–
–
–
9.3
–
–
–
6.6
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONTINUED
156
154
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 22)
Amounts reclassified to the
Income Statement – cash flow
hedges (note 22)
Remeasurement of Defined
Benefit liability (note 25)
Tax on other comprehensive
income (note 9)
Total other comprehensive
income/(loss)
Total comprehensive
income/(loss) for the year
Transactions with owners,
recorded directly in equity
Issue of ordinary shares
(note 26)
Capital reduction
Credit for the year under equity
settled share-based payments
(note 28)
Dividend paid to non-
controlling interest (note 10)
Tax on items credited to equity
(note 9)
Total transactions with owners
At 31 December 2020
Share
Capital
£m
2.1
Share
Premium
£m
352.3
Merger
Reserve
£m
–
Capital
Redemption
Reserve
£m
–
Capital
Reserve
£m
6.6
Translation
Reserve
£m
(0.4)
Hedge
Reserves
£m
(2.3)
Retained
Earnings
£m
(42.8)
Non-
controlling
Interest
£m
14.1
Total
Equity
£m
329.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
18.7
(9.3)
755.9
–
144.0
–
–
–
–
–
–
–
–
9.4
11.5
–
755.9
1,108.2
–
144.0
144.0
–
–
–
–
–
–
–
–
–
9.3
–
–
–
9.3
9.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6.6
–
–
(419.3)
8.8
(410.5)
0.8
–
–
–
–
0.8
0.8
–
–
–
–
–
–
0.4
–
6.6
9.7
–
–
–
–
(59.1)
(3.1)
12.3
13.2
(46.8)
–
–
–
–
–
–
0.8
6.6
9.7
(59.1)
9.2
(32.8)
13.2
(466.1)
8.8
(443.3)
–
–
–
–
–
–
4.2
–
–
–
–
918.6
–
4.2
(6.6)
(6.6)
–
–
10.9
1.6
5.8
(503.1)
–
(6.6)
16.3
1.6
917.8
804.1
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2021
157
155
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
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
31 December
2021
£m
31 December
2020
£m
Notes
12
14
15
17
19
9
16
17
19
18
22
20
21
15
24
22
20
15
24
25
9
26
22
1,384.1
355.5
76.0
2.1
0.5
156.4
1,974.6
196.8
243.4
1.5
7.3
418.9
867.9
2,842.5
114.3
721.0
5.5
34.8
9.7
19.9
905.2
1,074.9
9.8
93.7
19.0
78.7
0.8
1,276.9
2,182.1
660.4
11.6
1,123.4
143.9
9.3
6.6
2.7
6.7
(662.4)
641.8
18.6
660.4
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
971.3
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
The Financial Statements were approved by the Board of Directors on 22 February 2022 and were signed on its behalf by
TOBIAS MOERS
CHIEF EXECUTIVE OFFICER
COMPANY NUMBER: 11488166
KENNETH GREGOR
CHIEF FINANCIAL OFFICER
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2021
158
156
157
NOTES TO THE FINANCIAL STATEMENTS
Operating activities
Loss for the year
Adjustments to reconcile loss for the year to net cash inflow from operating activities
Tax credit on operations
Net finance costs
Other non-cash movements
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
Decrease/(increase) in inventories
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Increase/(decrease) in advances and customer deposits
Movement in provisions
Cash generated from/(used in) operations
Decrease/(increase) in cash held not available for short term use
Income taxes paid
Net cash inflow/(outflow) from operating activities
Cash flows from investing activities
Interest received
Increase in loan assets
Decrease in loan assets
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 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 (outflow)/inflow from financing activities
Net (decrease)/increase 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
Notes
2021
£m
2020
£m
(189.3)
(410.5)
9
4
4
4
20
19
9
7
17
17
14
12
27
27
27
20
27
27
23
(24.5)
137.3
(0.1)
65.3
9.3
137.6
(11.4)
7.7
(75.4)
52.8
70.7
(0.2)
179.8
8.1
(9.0)
178.9
1.1
(1.4)
0.9
(40.7)
(144.0)
(184.1)
(118.0)
–
15.3
–
(9.9)
(37.3)
19.0
(40.0)
108.5
(1.3)
(2.8)
(66.5)
(71.7)
489.4
1.2
418.9
(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
1 BASIS OF ACCOUNTING
The Group meets its day-to-day working capital requirements and
Aston Martin Lagonda Global Holdings plc (the “Company”) is a
medium term funding requirements through a mixture of $1,184.0m of
company incorporated in England and Wales and domiciled in the UK.
First Lien notes at 10.5% which mature in November 2025, $335.0m of
The Group Financial Statements consolidate those of the Company and
Second Lien split coupon notes at 15% per annum (8.89 % cash and
its subsidiaries (together referred to as the “Group”).
6.11% PIK) which mature in November 2026, a revolving credit facility
(£90.6m) which matures August 2025, facilities to finance inventory,
The Group Financial Statements have been prepared and approved
a bilateral RCF agreement and a wholesale vehicle financing facility (as
by the Directors
in accordance with UK adopted
international
described in note 17 of the Financial Statements). Under the RCF the
accounting standards.
Group is required to comply with a liquidity covenant until May 2022
and a leverage covenant thereafter tested quarterly from June 2022.
The Group Financial Statements have been prepared under the historical
cost convention except where the measurement of balances at fair value
The amounts outstanding on all the borrowings are shown in note 22
is required as explained below. The Financial Statements are prepared
to the Group Financial Statements.
in millions to one decimal place, and in sterling which is the Company’s
functional currency.
CLIMATE CHANGE
The Directors have developed trading and cash flow forecasts for the
period from the date of approval of these Financial Statements through
30 June 2023 (the going concern review period). These forecasts show
In preparing the Consolidated Financial Statements management has
that the Group has sufficient financial resources to meet its obligations
considered the impact of climate change, particularly in the context of
as they fall due and to comply with covenants for the going concern
the disclosures included in the Strategic Report this year and the new
review period.
sustainability goals including the stated net-zero targets. These
considerations did not have a material impact on the financial reporting
The forecasts reflect our strategy of rebalancing supply and demand and
judgements and estimates, consistent with the assessment that climate
the decisive actions taken to improve cost efficiency, in alignment with
change is not expected to have a significant impact on the Group’s going
the ultra-luxury performance-oriented strategy. The forecasts include the
concern assessment to June 2023 nor the viability of the Group over the
costs of the Group's environmental, social and governance ("ESG")
next five years. The following specific points were considered:
commitments and make assumptions in respect of future market
conditions and, in particular, wholesale volumes, average selling price,
• The Group has a Strategic Co-operation Agreement with Mercedes
the launch of new models, and future operating costs. The nature of the
Benz AG. The agreement provides the Company with access to a
Group's business is such that there can be variation in the timing of cash
wide range of world-class technologies for the next generation of
flows around the development and launch of new models. In addition,
luxury vehicles which are planned to be launched through to 2027,
the availability of funds provided through the vehicle wholesale finance
in particular, powertrain architecture for conventional, hybrid and
facility changes as the availability of credit insurance and sales volumes
electric vehicles as well as future electric/electronic architecture.
vary, in total and seasonally. The forecasts take into account these
• The Group continues to invest in onsite renewable energy
factors to the extent which the Directors consider them to represent their
generation solutions for our facilities and the use of sustainable
best estimate of the future based on the information that is available to
materials within production and the required capital investment is
them at the time of approval of these Financial Statements.
included in our five year forecasts to enable us to meet our target
for net-zero manufacturing facilities by 2030.
The Directors have considered a severe but plausible downside scenario
• Management has considered the impact of climate change on a
that includes considering the impact of a 25% reduction in DBX
number of key estimates within the financial statements, including
volumes from forecast levels and operating costs higher than the
the estimates of future cash flows used in impairment assessments
base plan.
of the carrying value of non-current assets (such as capitalised
development cost intangible assets) and the estimates of future
The Group plans to make continued investment for growth in the period
profitability used in our assessment of the recoverability of deferred
and, accordingly, funds generated through operations are expected to
tax assets in the UK.
GOING CONCERN
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
An overview of the business activities of Aston Martin Lagonda Global
particularly severe effect on the Group, as identified in the severe but
Holdings plc, including a review of the principal risks that the Group
plausible downside scenario, actions such as constraining capital
faces, is given in the Strategic Report on pages 5 to 81. The debt facilities
spending, working capital improvements, reduction in marketing
available to the Group and the maturity profile of this debt is shown in
expenditure and the continuation of strict and immediate expense
note 22 of the Financial Statements.
control would be taken to safeguard the Group’s financial position.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
159
157
NOTES TO THE FINANCIAL STATEMENTS
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
international
accounting standards.
in accordance with UK adopted
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.
CLIMATE CHANGE
In preparing the Consolidated Financial Statements management has
considered the impact of climate change, particularly in the context of
the disclosures included in the Strategic Report this year and the new
sustainability goals including the stated net-zero targets. These
considerations did not have a material impact on the financial reporting
judgements and estimates, consistent with the assessment that climate
change is not expected to have a significant impact on the Group’s going
concern assessment to June 2023 nor the viability of the Group over the
next five years. The following specific points were considered:
• The Group has a Strategic Co-operation Agreement with Mercedes
Benz AG. The agreement provides the Company with access to a
wide range of world-class technologies for the next generation of
luxury vehicles which are planned to be launched through to 2027,
in particular, powertrain architecture for conventional, hybrid and
electric vehicles as well as future electric/electronic architecture.
• The Group continues to invest in onsite renewable energy
generation solutions for our facilities and the use of sustainable
materials within production and the required capital investment is
included in our five year forecasts to enable us to meet our target
for net-zero manufacturing facilities by 2030.
• Management has considered the impact of climate change on a
number of key estimates within the financial statements, including
the estimates of future cash flows used in impairment assessments
of the carrying value of non-current assets (such as capitalised
development cost intangible assets) and the estimates of future
profitability used in our assessment of the recoverability of deferred
tax assets in the UK.
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 5 to 81. The debt facilities
available to the Group and the maturity profile of this debt is shown in
note 22 of the Financial Statements.
The Group meets its day-to-day working capital requirements and
medium term funding requirements through a mixture of $1,184.0m of
First Lien notes at 10.5% which mature in November 2025, $335.0m of
Second 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 bilateral RCF agreement and a wholesale vehicle financing facility (as
described in note 17 of the Financial Statements). Under the RCF the
Group is required to comply with a liquidity covenant until May 2022
and a leverage covenant thereafter tested quarterly from June 2022.
The amounts outstanding on all the borrowings are shown in note 22
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 2023 (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
the ultra-luxury performance-oriented strategy. The forecasts include the
costs of the Group's environmental, social and governance ("ESG")
commitments and make assumptions in respect of future market
conditions and, in particular, wholesale volumes, average selling price,
the launch of new models, and future operating costs. 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 25% reduction in DBX
volumes from forecast levels 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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 160
158
159
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
1 BASIS OF ACCOUNTING CONTINUED
GOING CONCERN CONTINUED
In addition, we also considered the circumstances which would be
needed to exhaust the Group’s liquidity over the assessment period, a
reverse stress test. This would indicate that vehicle sales would need to
reduce by 40% from forecast levels without any of the above mitigations
to result in having no liquidity. The likelihood of these circumstances
occurring is considered remote both in terms of the magnitude of the
reduction and that over such a long period, management could take
substantial mitigating actions, such as reducing capital spending to
preserve liquidity.
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.
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 through 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.
2 ACCOUNTING POLICIES CONTINUED
REVENUE RECOGNITION CONTINUED
Sales of parts
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
Revenue from the sale of parts is recognised upon transfer of control to
finance expense.
the customer, generally when the parts are released to the carrier
responsible for transporting them. Where the dealer is Aston Martin
CURRENT/NON-CURRENT CLASSIFICATION
Works Limited, an indirect subsidiary of the Company, revenue is
Current assets include assets held primarily for trading purposes, cash
recognised upon despatch to a customer outside of the Group.
and cash equivalents, and assets expected to be realised in, or intended
Servicing and restoration of vehicles
Revenue is recognised upon completion of the service/restoration
for sale or consumption as part of the Group’s normal identifiable
operating cycle. All other assets are classified as non-current assets.
typically when the service or restoration is completed in accordance
Current
liabilities
include
liabilities held primarily
for
trading
with the customers’ requirements.
Brands and motorsport
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
Revenue from brands and motorsport is recognised when the performance
as non-current liabilities.
obligations, principally use of the Aston Martin brand name or supply of a
motorsport vehicle, are satisfied. Revenue is recognised either at a point
GOODWILL
in time or over a period of time in line with IFRS 15 according to the terms
For acquisitions on or after 1 January 2010, the Group measures
of the contract.
goodwill at the acquisition date as:
Customer advance payments
the fair value of the consideration transferred; plus
The Group receives advance cash payments from customers to secure
the recognised amount of any non-controlling interests in the
their allocation of a vehicle produced in limited quantities, typically
acquiree; plus
with a lead time of greater than 12 months. The value of the advance,
the fair value of the existing equity interest in the acquiree; less
both contractually refundable or non-refundable, is held as a contract
the net recognised amount (generally fair value) of the identifiable
liability in the Statement of Financial Position. Upon satisfaction of the
assets acquired and liabilities assumed.
•
•
•
•
performance obligation, the liability is released to revenue in the Income
Statement. If the deposit is returned to the customer prior to satisfaction
Costs related to the acquisition, other than those associated with the
of the performance obligation, the contract liability is derecognised.
issue of debt or equity securities, are expensed as incurred.
Where a significant financing component exists, the contract liability is
For the purpose of impairment testing, goodwill is allocated to the
increased over the same period of time as the contract liability is held to
related cash-generating unit. The only cash-generating unit of the Group
account for the time value of money. A corresponding charge is
is that of Aston Martin Lagonda Group as there are no smaller groups of
recognised in the Consolidated Income Statement within finance
assets that can be identified with certainty which generate specific cash
expenses. Upon satisfaction of the linked performance obligation,
flows independent of the inflows generated by other assets or groups of
the liability is released to revenue.
assets. Where the recoverable amount of the cash-generating unit is less
than the carrying amount, an impairment loss is recognised in the
The Group applies a practical expedient for short term advances
Income Statement.
received from customers whereby the advanced payment is not adjusted
for the effects of a significant financing component.
INTANGIBLE ASSETS
Finance income comprises interest receivable on invested funds
is recognised outside of goodwill if the asset is separable or arises from
calculated using the effective interest rate method, interest income and
contractual or other legal rights and its fair value can be measured
currency gains arising on foreign currency denominated borrowings
reliably. Fair value adjustments are considered to be provisional at the
(not designated under a hedge relationship) that are recognised in the
first-year end date after the acquisition to allow the maximum time to
Intangible assets acquired separately from a business are carried initially
at cost. An intangible asset acquired as part of a business combination
FINANCE INCOME
Income Statement.
FINANCE EXPENSE
elapse for management to make a reliable estimate.
Business combinations
Finance expense comprises interest payable on borrowings calculated
Business combinations are accounted for using the acquisition method
using the effective interest rate method, interest expense on the net
as at the acquisition date, which is the date on which control is
Defined Benefit pension liability, losses on financial instruments that are
transferred to the Group.
recognised at fair value through the Income Statement and foreign
exchange losses on foreign currency denominated financial liabilities.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
161
159
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2 ACCOUNTING POLICIES CONTINUED
REVENUE RECOGNITION CONTINUED
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.
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.
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.
include
liabilities
liabilities held primarily
Current
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.
for
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.
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2 ACCOUNTING POLICIES CONTINUED
INTANGIBLE ASSETS CONTINUED
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.
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.
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.
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.
in 2019.
Leases under which the Group acts as lessee
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
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
have been met:
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.
2 ACCOUNTING POLICIES CONTINUED
GOVERNMENT GRANTS
Lease payments included in the measurement of the lease liability
comprise either fixed lease payments or lease payments subject to
Government grants are recognised in the Income Statement, either on a
periodic fixed increases. The lease liability is measured at amortised cost
systematic basis when the Group recognises the related costs that the
using the effective interest rate method. Lease payments are allocated
grants are intended to compensate for, or immediately if the costs have
between principal and interest cost with the interest costs charged to the
already been incurred.
Income Statement over the lease period.
Government grants related to assets are deducted from the cost of the
The liability is remeasured when there is an increase/decrease in future
asset and amortised over the useful life of the asset.
lease payments arising from a change in an index or rate specified.
Government grants are recognised when there is reasonable assurance
Short term leases and leases of low value assets
that the Group will comply with the relevant conditions and the grant
The Group does not recognise right of-use-assets and lease liabilities for
will be received.
short term leases that have a lease term of fewer than twelve months and
leases of low-value assets. The Group recognises the lease payments
Amounts recognised in the statement of cash flows are presented net
associated with these leases as an expense on a straight-line basis in the
of proceeds of applicable government grants.
Income Statement over the lease term.
RIGHT-OF-USE ASSETS AND LEASE LIABILITIES – IFRS 16
Leases under which the Group acts as lessor
The Group adopted IFRS 16 using the modified retrospective approach
When the Group acts as a lessor, it determines at lease inception
The Group is a party to lease contracts for buildings, plant and
the underlying right-of-use asset. If this is the case, then the lease is a
machinery and IT equipment. The Group recognises a right-of-use asset
finance lease; if not, then it is an operating lease. As part of this
and a lease liability at the lease commencement date. The right-of-use
assessment, the Group considers certain indicators such as whether the
asset is initially measured at cost, which comprises the initial amount of
lease period forms a major part of the economic life of the asset.
the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an
The Group recognises lease payments received under operating leases
estimate of costs to dismantle and remove the underlying asset or to
on a straight-line basis over the lease term in the Income Statement.
restore the underlying asset or the site on which it is located, less any
lease incentives received.
The Group has no sub-leases that qualify as finance leases.
The right-of-use asset is subsequently depreciated using the straight-line
IMPAIRMENT OF ASSETS
method from the commencement date to the earlier of the end of the
The Group assesses at each reporting date whether there is an indication
useful life of the right-of-use asset or the end of the lease term. If the
that an asset may be impaired. If any such indication exists, or when
Group is reasonably certain to exercise a purchase option, the right-of-
annual impairment testing for an asset is required, the Group makes an
use asset is depreciated over the underlying asset’s useful life. The
estimate of the asset’s recoverable amount. An asset’s recoverable
estimated useful lives of right-of-use assets are determined on the same
amount is the higher of an asset, or cash-generating unit’s, fair value less
basis as those of property, plant and equipment. Moreover, the right-of-
costs to sell and its value-in-use. Where the carrying amount of an asset
use asset is periodically reduced by impairment losses, if any, and
exceeds its recoverable amount, the asset is considered impaired and is
adjusted for certain remeasurements of the lease liability.
written down to its recoverable amount. In assessing value-in-use, the
estimated future cash flows are discounted to their present value using a
The lease liability is initially measured at the present value of the lease
pre-tax discount rate that reflects current market assessments of the time
payments unpaid at the commencement date, discounted using the
value of money and the risks specific to the asset. Impairment losses on
interest rate implicit in the lease or, if that rate cannot be readily
continuing operations are recognised in the Income Statement.
determined, an estimate of the Group’s incremental borrowing rate at
that point in time.
For goodwill, brands and other intangible assets that have an indefinite
life, the recoverable amount is estimated annually or more frequently
The Group estimates the incremental borrowing rate by taking a credit
when there is an indication that the asset is impaired.
risk adjusted risk-free rate in addition to making other specific
adjustments to account for certain characteristics in the lease such as
For intangible assets, property, plant and equipment, and right-of-use
geography, type of asset and security pledged.
lease assets that have a finite life, the recoverable amount is estimated
when there is an indication that the asset is impaired.
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.
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 lifecycle 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.
the project’s technical feasibility and commercial viability, based on
an estimate of future cash flows, 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.
•
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2 ACCOUNTING POLICIES CONTINUED
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.
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.
Government grants related to assets are deducted from the cost of the
asset and amortised over the useful life of the asset.
The liability is remeasured when there is an increase/decrease in future
lease payments arising from a change in an index or rate specified.
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.
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 asset’s 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.
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 fewer 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.
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.
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NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2 ACCOUNTING POLICIES CONTINUED
IMPAIRMENT OF ASSETS CONTINUED
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 such 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
financing
arrangements are recognised when control is transferred to the Group.
Inventories held under
recovered.
fully
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 cash flows is
either attributable to a particular risk associated with a recognised asset
or liability, or a highly probable 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.
the Income Statement.
Subsequent accounting
2 ACCOUNTING POLICIES CONTINUED
HEDGE ACCOUNTING CONTINUED
Derivative financial instruments
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
The effective portion of the gain or loss on the hedging instrument is
future benefit that employees have earned in the current and prior
recognised in Other Comprehensive Income in the cash flow hedge
periods, discounting that amount and deducting the fair value of any
reserve, while any ineffective portion is recognised immediately in the
plan assets.
Income Statement. The Group designates only the spot element of
forward contracts as a hedging instrument. The forward element is
The calculation of Defined Benefit obligations is performed annually by
recognised in Other Comprehensive Income and accumulated in a
a qualified actuary using the projected unit credit method. When the
separate component of equity under cost of hedging reserve.
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
Financial Liability as a hedge
Foreign currency differences arising on the retranslation of a financial
to the plan.
liability designated as a cash flow hedge are recognised directly in Other
Comprehensive Income to the extent that the hedge is effective. To the
When the calculation results in a deficit for the Group, the recognised
extent that the hedge is ineffective, such differences are recognised in
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
The amounts accumulated in both the cash flow hedge reserve and the
comprise actuarial gains and losses, the interest on plan assets, and the
cost of hedging reserve are accounted for depending on the nature of
effect of the asset ceiling or minimum funding requirements, are
the underlying hedged
transaction.
If
the hedged
transaction
recognised immediately in Other Comprehensive Income. The Group
subsequently results in the recognition of a non-financial item, the
determines the net interest expense (income) on the net Defined Benefit
amount accumulated in the hedge reserve is removed and included in
asset or liability, considering any changes in the net defined asset or
the initial cost of the hedge item. For any other cash flow hedges, the
liability during the period as a result of contributions and benefit
amount accumulated in the hedge reserve is reclassified to the Income
payments. Net interest expense and other expenses related to Defined
Statement as a reclassification adjustment in the same period or periods
Benefit plans are recognised in the Income Statement.
during which the hedged cash flow affects profit or loss.
When the benefits of the plan are changed or when a plan is curtailed,
If hedge accounting is discontinued, the amount that has been
the resulting change in benefit that relates to past service cost or the gain
accumulated in the hedge reserve must remain in equity if the hedged
or loss on curtailment is recognised immediately in the Income
future cash flows are still expected to occur. Otherwise, the amount will
Statement. The Group recognises gains and losses on the settlement of a
be immediately reclassified to the Income Statement as a reclassification
Defined Benefit plan when the settlement occurs.
adjustment. After discontinuation, once the hedged cash flow occurs,
any amount remaining in the hedge reserve is accounted for depending
SHARE-BASED PAYMENT TRANSACTIONS
on the nature of the underlying transaction.
BORROWINGS
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
Borrowings are recognised initially at fair value less attributable
Statement, with a corresponding increase in equity over the period that
transaction costs. Subsequent to initial recognition, borrowings are
the employees become unconditionally entitled to the shares.
stated at amortised cost with any difference between the amount initially
recorded and redemption value being recognised in the Income
The amount recognised as an expense is adjusted to reflect both non-
Statement as a finance expense over the period of the borrowings on an
market-based conditions, such as continued employment and profit-
effective interest basis.
PENSIONS
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.
The Group operates a Defined Contribution pension plan under which
the Group pays fixed contributions into a separate entity and has no
Where the Group obtains goods or services in exchange for the issuance
legal or constructive obligation to pay further amounts. Obligations for
of shares, these are accounted for as equity-settled share-based
contributions to Defined Contribution pension plans are recognised as
payments in accordance with IFRS 2. Where the fair value of the goods
an expense in the Income Statement in the periods during which services
or services can be estimated reliably, these are recorded at fair value
are rendered by employees.
with a corresponding increase in equity.
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HEDGE ACCOUNTING CONTINUED
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.
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.
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.
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
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 cash flow affects profit or loss.
the hedged
transaction.
If
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.
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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
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166
164
165
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS 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.
Details in respect of adjusting items recognised in the current and prior
year are set out in note 5 in the Financial Statements.
2 ACCOUNTING POLICIES CONTINUED
PROVISIONS
The Group provides product warranties on all new vehicle sales.
Warranty provisions are recognised when vehicles are sold or when new
warranty programmes 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.
2 ACCOUNTING POLICIES CONTINUED
The result of the calculation of the value-in-use is sensitive to the
CRITICAL ACCOUNTING ASSUMPTIONS AND KEY SOURCES
assumptions made and is a subjective estimate (note 13).
OF ESTIMATION UNCERTAINTY ESTIMATES
The preparation of Financial Statements requires management to make
Measurement of pension assets and obligations
estimates and assumptions that affect the amounts reported for assets
There are a range of assumptions that could be made, and the
and liabilities as at the reporting date and the amounts reported for
measurement of Defined Benefit pension assets and obligations is very
revenues and expenses during the period. The nature of estimation
sensitive to these. Note 25 provides information on these assumptions
means that actual outcomes could differ from those estimates.
and the inherent sensitivities.
In the process of applying the Group’s accounting policies, which are
Measurement of Defined Benefit pension obligations requires estimation
described in this note, management has made estimates. Other than as
of future changes in salaries and inflation, mortality rates, the expected
set out below, variations in the remaining estimates are not considered
return on assets and suitable discount rates (note 25).
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
NEW ACCOUNTING STANDARDS
Group considers it appropriate to identify the nature of the estimates
In 2021 the following standards were endorsed by the UK, became
used in preparing the Group Financial Statements and the main sources
effective and adopted by the Group:
of estimation uncertainty are:
•
•
impairment of finite life intangible assets;
9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
the measurement of Defined Benefit pension assets and obligations;
• Covid-19-Related Rent Concessions beyond 30 June 2021 –
•
Interest Rate Benchmark Reform – Phase 2 – Amendments to IFRS
Amendment to IFRS 16
Impairment of finite life intangible assets
For intangible assets that have a finite life, the recoverable amount is
These are not expected to have a material impact on the Group.
estimated when there is an indication that the asset is impaired.
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 and Africa
2021
£m
1,005.4
65.5
10.6
13.8
1,095.3
2021
£m
231.3
302.7
233.8
327.5
1,095.3
2020
£m
535.1
56.6
6.6
13.5
611.8
2020
£m
106.0
162.5
184.9
158.4
611.8
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
167
165
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
2 ACCOUNTING POLICIES CONTINUED
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.
The result of the calculation of the value-in-use is sensitive to the
assumptions made and is a subjective estimate (note 13).
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 25 provides information on these assumptions
and the inherent sensitivities.
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 considers it appropriate to identify the nature of the estimates
used in preparing the Group Financial Statements and the main sources
of estimation uncertainty are:
•
•
impairment of finite life intangible assets;
the measurement of Defined Benefit pension assets and obligations;
Impairment of finite life intangible assets
For intangible assets that have a finite life, the recoverable amount is
estimated when there is an indication that the asset is impaired.
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 (note 25).
NEW ACCOUNTING STANDARDS
In 2021 the following standards were endorsed by the UK, became
effective and adopted by the Group:
•
Interest Rate Benchmark Reform – Phase 2 – Amendments to IFRS
9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
• Covid-19-Related Rent Concessions beyond 30 June 2021 –
Amendment to IFRS 16
These are not expected to have a material impact on the Group.
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 and Africa
Asia Pacific
2021
£m
1,005.4
65.5
10.6
13.8
1,095.3
2021
£m
231.3
302.7
233.8
327.5
1,095.3
2020
£m
535.1
56.6
6.6
13.5
611.8
2020
£m
106.0
162.5
184.9
158.4
611.8
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
168
166
167
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
3 SEGMENTAL REPORTING CONTINUED
NON-CURRENT ASSETS OTHER THAN FINANCIAL INSTRUMENTS AND DEFERRED TAX ASSETS BY GEOGRAPHIC LOCATION
4 OPERATING LOSS CONTINUED
As at 31 December 2021
United Kingdom
The Americas
Rest of Europe
Asia Pacific
As at 31 December 2020
United Kingdom
The Americas
Rest of Europe
Asia Pacific
Right-of-use
lease asset
£m
61.1
7.4
–
7.5
76.0
Property, plant,
equipment
£m
267.8
0.7
86.8
0.2
355.5
Right-of-use
lease asset
£m
62.0
0.1
0.1
9.2
71.4
Property, plant,
equipment
£m
281.1
1.6
104.1
2.8
389.6
Goodwill
£m
85.4
–
–
–
85.4
Goodwill
£m
85.4
–
–
–
85.4
Intangible
assets
£m
1,145.1
–
153.6
–
1,298.7
Intangible
assets
£m
1,095.4
–
156.0
–
1,251.4
Other
receivables
£m
–
–
2.1
–
2.1
Other
receivables
£m
–
–
0.9
–
0.9
4 OPERATING LOSS
The Group’s operating loss is stated after charging/(crediting):
Depreciation and impairment of property, plant and equipment (note 14)
Depreciation released from/(absorbed into) inventory under standard costing
Depreciation and impairment of right-of-use lease assets (note 15)
Amortisation and impairment of intangible assets (note 12)
Amortisation released from/(absorbed into) inventory under standard costing
Depreciation, amortisation and impairment charges included in administrative and other operating expenses
Increase in trade receivable loss allowance – administrative and other operating expenses (note 22)
Net foreign currency differences
Cost of inventories recognised as an expense
Write-down of inventories to net realisable value
(Decrease)/increase in fair value of other derivative contracts
Expenditure-related grant income*
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
2021
£m
65.0
0.3
9.3
135.0
2.6
212.2
3.1
11.2
641.4
0.2
(0.7)
–
0.3
(0.6)
0.3
0.3
0.1
0.1
–
13.0
Total
£m
1,559.4
8.1
242.5
7.7
1,817.7
Total
£m
1,523.9
1.7
261.1
12.0
1,798.7
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
* 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.
Total research and development expenditure
Capitalised research and development expenditure (note 12)
Research and development expenditure recognised as an expense
5 ADJUSTING ITEMS
Adjusting operating expenses:
Impairment of assets (note 14):
Development costs (note 13)6
Plant, machinery, fixtures and fittings (note 15)7
Tooling (note 15)6
Right-of-use lease assets (note 16)7
Director settlement arrangements and incentive payments9
Restructuring:
Employee restructuring costs1
Motorsport exit costs8
Lease early exit costs2
ERP implementation costs3
Initial Public Offering costs:
Staff incentives10
Adjusting finance income:
Foreign exchange gain on financial instrument utilised during refinance transactions11
Gain on financial instruments recognised at fair value through Income Statement4
Adjusting finance expenses:
Premium paid on the early redemption of Senior Secured Notes11
Write-off of capitalised borrowing fees upon early settlement of Senior Secured Notes11
Loss on financial instruments recognised at fair value through Income Statement4
Professional fees incurred on refinancing expensed directly to the Income Statement12
Tax credit due to remeasurement of deferred tax on previously classified adjusting items5
Total adjusting items before tax
Tax (charge)/credit on adjusting items5
Adjusting items after tax
Summary of 2021 adjusting items
2021
£m
191.2
(178.2)
13.0
2020
£m
182.1
(177.6)
4.5
2021
£m
2020
£m
–
–
–
–
–
–
–
–
–
–
–
2.4
(0.6)
(4.0)
–
(2.2)
–
34.1
34.1
31.9
(8.1)
16.4
40.2
(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)
1. During 2020 the Group provided £12.1m for 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. A revision to the estimated total costs resulting from greater natural attrition has resulted
in £2.4m of the existing provision being released to the Income Statement during the year ended 31 December 2021. The cash impact of the restructuring cost is realised in line with the
movement in the provision (note 24). The credit to the Consolidated Income Statement in 2021 has no cash impact.
2.
In the year ended 31 December 2021 the Group continued to rationalise its geographical footprint. The Group incurred £0.6m of costs associated with surrendering a lease 30
months early. These costs have been disclosed consistent with prior periods. The rationalisation of the geographical footprint is now complete. The associated cash outflow related to this
adjustment will be realised during 2022 and 2023 in line with the exit agreement.
3. During the year ended 31 December 2021 the Group commenced a digital transformation strategy project which includes the implementation of a cloud-based ERP for which the Group
will not own any Intellectual Property. This project will continue into 2022. £4.0m of costs have been incurred in the period under the service contract and expensed to the Income
Statement. Due to the infrequent recurrence of such costs and the expected quantum during the implementation phase, these have been separately presented as adjusting. The cash
impact of this item is a working capital outflow at the time of invoice payment.
4. The Group issued second lien Senior Secured Notes (“SSNs”) during the year ended 31 December 2020 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. The movement in fair value of the liability in the year ended 31 December 2021 resulted in a gain of £34.1m
being recognised in the Income Statement. There is no cash impact of this adjustment.
5.
In 2021, a total tax credit of £8.3m has been recognised as an adjusting item. The effective tax rate associated with the tax credit on adjusting items in the period is not in line with the standard rate
of income tax for the Group at 19% (2020: 19%). This is due to a £16.4m tax credit attributable to deferred tax balances on items treated as adjusting in previous years being re-measured at 25%.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
169
167
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
4 OPERATING LOSS CONTINUED
Total research and development expenditure
Capitalised research and development expenditure (note 12)
Research and development expenditure recognised as an expense
5 ADJUSTING ITEMS
Adjusting operating expenses:
Impairment of assets (note 14):
Development costs (note 13)6
Plant, machinery, fixtures and fittings (note 15)7
Tooling (note 15)6
Right-of-use lease assets (note 16)7
Restructuring:
Employee restructuring costs1
Motorsport exit costs8
Director settlement arrangements and incentive payments9
Lease early exit costs2
ERP implementation costs3
Initial Public Offering costs:
Staff incentives10
Adjusting finance income:
Foreign exchange gain on financial instrument utilised during refinance transactions11
Gain on financial instruments recognised at fair value through Income Statement4
Adjusting finance expenses:
Premium paid on the early redemption of Senior Secured Notes11
Write-off of capitalised borrowing fees upon early settlement of Senior Secured Notes11
Loss on financial instruments recognised at fair value through Income Statement4
Professional fees incurred on refinancing expensed directly to the Income Statement12
Total adjusting items before tax
Tax (charge)/credit on adjusting items5
Tax credit due to remeasurement of deferred tax on previously classified adjusting items5
Adjusting items after tax
2021
£m
191.2
(178.2)
13.0
2020
£m
182.1
(177.6)
4.5
2021
£m
2020
£m
–
–
–
–
–
2.4
–
–
(0.6)
(4.0)
–
(2.2)
–
34.1
–
–
–
–
34.1
31.9
(8.1)
16.4
40.2
(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)
Summary of 2021 adjusting items
1. During 2020 the Group provided £12.1m for 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. A revision to the estimated total costs resulting from greater natural attrition has resulted
in £2.4m of the existing provision being released to the Income Statement during the year ended 31 December 2021. The cash impact of the restructuring cost is realised in line with the
movement in the provision (note 24). The credit to the Consolidated Income Statement in 2021 has no cash impact.
In the year ended 31 December 2021 the Group continued to rationalise its geographical footprint. The Group incurred £0.6m of costs associated with surrendering a lease 30
months early. These costs have been disclosed consistent with prior periods. The rationalisation of the geographical footprint is now complete. The associated cash outflow related to this
adjustment will be realised during 2022 and 2023 in line with the exit agreement.
2.
3. During the year ended 31 December 2021 the Group commenced a digital transformation strategy project which includes the implementation of a cloud-based ERP for which the Group
will not own any Intellectual Property. This project will continue into 2022. £4.0m of costs have been incurred in the period under the service contract and expensed to the Income
Statement. Due to the infrequent recurrence of such costs and the expected quantum during the implementation phase, these have been separately presented as adjusting. The cash
impact of this item is a working capital outflow at the time of invoice payment.
4. The Group issued second lien Senior Secured Notes (“SSNs”) during the year ended 31 December 2020 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. The movement in fair value of the liability in the year ended 31 December 2021 resulted in a gain of £34.1m
being recognised in the Income Statement. There is no cash impact of this adjustment.
In 2021, a total tax credit of £8.3m has been recognised as an adjusting item. The effective tax rate associated with the tax credit on adjusting items in the period is not in line with the standard rate
of income tax for the Group at 19% (2020: 19%). This is due to a £16.4m tax credit attributable to deferred tax balances on items treated as adjusting in previous years being re-measured at 25%.
5.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
170
168
169
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
5 ADJUSTING ITEMS CONTINUED
9.
8.
7.
Summary of 2020 adjusting items
6. 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. There was no cash impact of this item.
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. There was no cash impact of this item.
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. The cash outflow associated with this item is realised during 2022-2024 in line with the termination agreement.
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. The associated cash outflow took place during 2020 and 2021 in line with the relevant individuals’ agreement.
6 STAFF COSTS AND DIRECTORS’ EMOLUMENTS CONTINUED
(C) COMPENSATION OF KEY MANAGEMENT PERSONNEL (INCLUDING EXECUTIVE DIRECTORS)
Short term employee benefits
Post employment benefits
Compensation for loss of office
Share related awards
7 FINANCE INCOME
Foreign exchange gain on borrowings not designated as part of a hedging relationship
Bank deposit and other interest income
Finance income before adjusting items
Adjusting finance income items:
Foreign exchange gain on financial instrument utilised during refinance transactions
Gain on financial instruments recognised at fair value through Income Statement (note 22)
Total Adjusting finance income
Total finance income
8 FINANCE EXPENSE
Bank loans, overdrafts and secured notes
Foreign exchange loss on borrowings not designated as part of a hedging relationship
Interest on lease liabilities (note 15)
Net interest expense on the net Defined Benefit liability (note 25)
Hedge ineffectiveness
Interest on contract liabilities held (note 20)
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 22)
Professional fees incurred on refinancing expensed directly to the Income Statement
Total Adjusting finance expense
Total finance expense
2021
£m
3.9
0.2
–
–
4.1
2021
£m
2.3
–
2.3
–
34.1
34.1
36.4
2021
£m
151.3
12.4
3.9
1.3
–
4.8
–
–
–
–
–
2020
£m
6.1
0.5
0.1
1.1
7.8
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
173.7
107.6
173.7
183.1
10. In the year ended 31 December 2020 a Legacy Long term Incentive Plan (“LTIP”) charge of £3.8m was recognised within ‘Staff incentives’. 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.
11. On 27 October the Group announced the successful arrangement of a new financing package including the issuance of $1,085.5m of US dollar First Lien notes and $335m of US dollar
Second 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. The cash effect of these items was realised at the point in time of the transaction.
12. 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. The cash impact of this item was realised at the transaction date upon payment of the fees.
6 STAFF COSTS AND DIRECTORS’ EMOLUMENTS
(A) STAFF COSTS (INCLUDING DIRECTORS)
Wages and salaries1,2
Social security costs1,2
Expenses related to post employment Defined Benefit plan
Contributions to Defined Contribution plans2
2021
£m
120.5
12.0
8.8
10.7
152.0
2020
£m
119.3
11.2
8.6
10.4
149.5
1. The values presented for the year ended 31 December 2020 include the release of accrued staff incentives totalling £6.4m offset by the legacy LTIP charge of £3.8m, both of which are
presented as adjusting items – see note 5 for further detail. No such amounts are included in the year ended 31 December 2021.
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. No such amounts are included in the year
ended 31 December 2021.
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
2021
Number
1,030
276
1,045
2,351
2021
£m
1.5
–
2020
Number
1,209
358
920
2,487
2020
£m
3.3
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 115 to 137.
No compensation for loss of office payments were paid in either the current or prior year to Directors.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
171
169
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
6 STAFF COSTS AND DIRECTORS’ EMOLUMENTS CONTINUED
(C) COMPENSATION OF KEY MANAGEMENT PERSONNEL (INCLUDING EXECUTIVE DIRECTORS)
Short term employee benefits
Post employment benefits
Compensation for loss of office
Share related awards
7 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
Gain on financial instruments recognised at fair value through Income Statement (note 22)
Total Adjusting finance income
Total finance income
8 FINANCE EXPENSE
Bank loans, overdrafts and secured notes
Foreign exchange loss on borrowings not designated as part of a hedging relationship
Interest on lease liabilities (note 15)
Net interest expense on the net Defined Benefit liability (note 25)
Hedge ineffectiveness
Interest on contract liabilities held (note 20)
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 22)
Professional fees incurred on refinancing expensed directly to the Income Statement
Total Adjusting finance expense
Total finance expense
2021
£m
3.9
0.2
–
–
4.1
2021
£m
2.3
–
2.3
–
34.1
34.1
36.4
2021
£m
151.3
12.4
3.9
1.3
–
4.8
173.7
–
–
–
–
–
173.7
2020
£m
6.1
0.5
0.1
1.1
7.8
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
107.6
21.4
7.6
45.3
1.2
75.5
183.1
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
172
170
171
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
9 TAXATION
UK corporation tax on profits
Overseas tax
Prior period movement
Total current income tax charge/(credit)
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 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
Tax relating to items charged in equity – deferred tax
Effect of change in deferred tax rate
9 TAXATION CONTINUED
(D) DEFERRED TAX
Recognised deferred tax assets and liabilities.
Deferred tax assets and liabilities are attributable to the following:
Where the right exists in certain jurisdictions, deferred tax assets and liabilities have been offset.
2021
£m
0.5
10.8
–
11.3
(16.1)
(2.4)
(17.3)
(35.8)
(24.5)
1.0
(1.2)
(6.0)
–
(6.2)
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)
(4.8)
(1.6)
(A) RECONCILIATION OF THE TOTAL INCOME TAX CREDIT
The tax credit in the Consolidated Statement of Comprehensive Income for the year is lower (2020: lower) than the standard rate of corporation tax
in the UK of 19.0% (2020: 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% (2020: 19.0%)
Difference to total income tax credit due to effects of:
Expenses not deductible for tax purposes
Movement in unprovided deferred tax
Derecognition of deferred tax assets
Irrecoverable overseas withholding taxes
Adjustments in respect of prior periods
Effect of change in deferred tax rate
Difference in UK tax rates
Difference in overseas tax rates
Other
Total income tax credit
(B) TAX PAID
Total net tax paid during the year of £9.0m (2020: £9.2m).
2021
£m
(213.8)
(40.6)
0.5
15.0
17.7
1.4
(2.4)
(17.3)
(4.8)
2.9
3.1
(24.5)
2020
£m
(466.0)
(88.5)
0.2
26.1
–
0.3
3.5
1.3
–
0.6
1.0
(55.5)
(C) FACTORS AFFECTING FUTURE TAX CHARGES
The tax rate applied to UK profits is impacted by the UK Budget 2021 announcement to increase the UK’s main rate of corporation tax from 19%
to 25%, effective from 1 April 2023.
Property, plant and equipment
Intangible assets
Employee benefits
Provisions
RDEC credit
Losses
Share based payments
Other
Deferred tax (assets)/liabilities
Offset of tax liabilities/(assets)
Total deferred tax (assets)/liabilities
Movement in deferred tax in 2021
Property, plant and equipment
Intangible assets
Employee benefits
Provisions
RDEC credit
Losses
Share based payments
Other
Movement in deferred tax in 2020
Property, plant and equipment
Intangible assets
Employee benefits
Provisions
RDEC credit
Losses
Share based payments
Other
Assets
2021
£m
(111.1)
–
(19.9)
(6.3)
(12.6)
(192.6)
(0.7)
–
(343.2)
186.8
(156.4)
Gross tax
recognised
in Income
and OCI
£m
(40.0)
51.6
(2.3)
4.8
–
(55.7)
(0.6)
0.2
(42.0)
Gross tax
recognised
in Income
and OCI
£m
(16.9)
17.9
(11.3)
2.4
(58.0)
–
–
(0.1)
(66.0)
Assets
2020
£m
(71.1)
–
(17.6)
(11.1)
(9.7)
(117.3)
(14.9)
–
(241.7)
135.2
(106.5)
Liabilities
Liabilities
2021
£m
2020
£m
186.8
135.2
–
–
–
–
–
–
–
–
–
–
–
–
0.8
187.6
(186.8)
0.8
0.6
135.8
(135.2)
0.6
Gross tax
recognised
in Equity
£m
Other
31 December
movement
£m
2021
£m
(111.1)
186.8
(19.9)
(6.3)
(12.6)
(192.6)
(0.7)
0.8
(155.6)
2020
£m
(71.1)
135.2
(17.6)
(11.1)
(9.7)
(117.3)
(14.9)
0.6
(105.9)
–
–
–
–
(2.9)
(14.9)
14.9
–
(2.9)
–
–
–
–
–
–
0.2
(2.7)
(2.5)
–
–
–
–
–
–
(4.7)
(0.1)
(4.8)
–
–
–
–
–
–
–
(1.6)
(1.6)
Gross tax
recognised
in Equity
£m
Other
31 December
movement
£m
1 January
2021
£m
(71.1)
135.2
(17.6)
(11.1)
(9.7)
(117.3)
(14.9)
0.6
(105.9)
1 January
2020
£m
(54.2)
117.3
(6.3)
(13.7)
(7.0)
(59.3)
(13.3)
0.7
(35.8)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
173
171
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
9 TAXATION CONTINUED
(D) DEFERRED TAX
Recognised deferred tax assets and liabilities.
Deferred tax assets and liabilities are attributable to the following:
Property, plant and equipment
Intangible assets
Employee benefits
Provisions
RDEC credit
Losses
Share based payments
Other
Deferred tax (assets)/liabilities
Offset of tax liabilities/(assets)
Total deferred tax (assets)/liabilities
Assets
2021
£m
(111.1)
–
(19.9)
(6.3)
(12.6)
(192.6)
(0.7)
–
(343.2)
186.8
(156.4)
Where the right exists in certain jurisdictions, deferred tax assets and liabilities have been offset.
Movement in deferred tax in 2021
Property, plant and equipment
Intangible assets
Employee benefits
Provisions
RDEC credit
Losses
Share based payments
Other
Movement in deferred tax in 2020
Property, plant and equipment
Intangible assets
Employee benefits
Provisions
RDEC credit
Losses
Share based payments
Other
1 January
2021
£m
(71.1)
135.2
(17.6)
(11.1)
(9.7)
(117.3)
(14.9)
0.6
(105.9)
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
(40.0)
51.6
(2.3)
4.8
–
(55.7)
(0.6)
0.2
(42.0)
Gross tax
recognised
in Income
and OCI
£m
(16.9)
17.9
(11.3)
2.4
–
(58.0)
–
(0.1)
(66.0)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
Assets
2020
£m
(71.1)
–
(17.6)
(11.1)
(9.7)
(117.3)
(14.9)
–
(241.7)
135.2
(106.5)
Gross tax
recognised
in Equity
£m
–
–
–
–
–
(4.7)
(0.1)
–
(4.8)
Gross tax
recognised
in Equity
£m
–
–
–
–
–
–
(1.6)
–
(1.6)
Liabilities
2021
£m
–
186.8
–
–
–
–
–
0.8
187.6
(186.8)
0.8
Other
movement
£m
–
–
–
–
(2.9)
(14.9)
14.9
–
(2.9)
Other
movement
£m
–
–
–
0.2
(2.7)
–
–
–
(2.5)
Liabilities
2020
£m
–
135.2
–
–
–
–
–
0.6
135.8
(135.2)
0.6
31 December
2021
£m
(111.1)
186.8
(19.9)
(6.3)
(12.6)
(192.6)
(0.7)
0.8
(155.6)
31 December
2020
£m
(71.1)
135.2
(17.6)
(11.1)
(9.7)
(117.3)
(14.9)
0.6
(105.9)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
174
172
173
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
9 TAXATION CONTINUED
(D) DEFERRED TAX CONTINUED
Losses and other deductions of £192.6m includes £83.8m of interest deductions deductible in future periods.
Deferred tax assets on unused tax losses have been recognised to the extent that it is probable that sufficient taxable profits will be generated to
utilise these losses. Based upon the current business plan, together with the investment by the Yew Tree Consortium, a new Board, the Board
securing financing and the Strategic Cooperation Agreement entered into with MBAG, it is forecast that taxable profits will start being generated in
the UK in the short term which provides convincing evidence for recognising those deferred tax assets.
The Group also has £102.4m of unrecognised deferred tax assets which primarily relate to unused tax losses that have no expiry date.
The aggregate amount of temporary differences associated with investments in subsidiaries and branches for which deferred tax liabilities have not
been recognised is £34.0m for the year ended 31 December 2021 (2020: £38.0m).
10 DIVIDENDS
No dividends were declared or paid by the Company in the year ended 31 December 2021 (2020: £nil).
During the year ended 31 December 2021 no dividend was declared by Aston Martin Works Limited (2020: £13.1m), of which the Group holds
50% of the voting rights and share capital. The terms of the 2020 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.
11 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 12). The Agreement includes an obligation to issue further shares for access to
further technology in a future period (note 29). Warrants to acquire shares in the Company were issued in December 2020 as part of the refinancing
of the Group (see note 22). A total of 6,332,393 ordinary shares could be issued to warrantholders who can exercise their rights from 1 July 2021
through to 7 December 2027. During the period a total of 1,525,926 ordinary shares were issued (note 26) resulting in 4,806,467 unexercised
options. Both the future MBAG tranches and the future issuance of warrants 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)1
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)1
Diluted loss per ordinary share (pence)
2021
2020
(191.6)
115.5
(165.9p)
(191.6)
115.5
(165.9p)
(419.3)
77.2
(543.0p)
(419.3)
77.2
(543.0p)
11 EARNINGS PER ORDINARY SHARE CONTINUED
Diluted weighted average number of ordinary shares is calculated as:
Basic weighted average number of ordinary shares (million)
Adjustments for calculation of diluted earnings per share:1
Long term incentive plans
Issue of unexercised ordinary share warrants
Issue of tranche 2 shares
Weighted average number of diluted ordinary shares (million)
1. 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, and the
future issuance of shares for access to Mercedes-Benz AG technology have been excluded from the weighted average number of diluted ordinary shares as including them is anti-dilutive
Adjusted earnings per share is disclosed in note 33 to show performance undistorted by adjusting items and to give a more meaningful comparison
to diluted earnings per share.
of the Group’s performance.
12 INTANGIBLE ASSETS
Cost
Additions
Balance at 1 January 2020
Balance at 31 December 2020
Balance at 1 January 2021
Additions
Balance at 31 December 2021
Amortisation
Balance at 1 January 2020
Charge for the year
Impairment (note 13)
Balance at 31 December 2020
Balance at 1 January 2021
Charge for the year
Balance at 31 December 2021
Net book value
At 1 January 2020
At 31 December 2020
At 1 January 2021
At 31 December 2021
Goodwill
£m
Brands
£m
Technology
development cost
£m
£m
Capitalised
Dealer
network
£m
Software
and other
£m
85.4
–
85.4
85.4
–
85.4
–
–
–
–
–
–
–
297.6
–
297.6
297.6
–
297.6
–
–
–
–
–
–
–
85.4
85.4
85.4
85.4
297.6
297.6
297.6
297.6
21.2
142.3
163.5
163.5
–
163.5
6.2
1.9
–
8.1
8.1
1.8
9.9
15.0
155.4
155.4
153.6
1,258.1
177.6
1,435.7
1,435.7
178.2
1,613.9
488.6
93.6
69.4
651.6
651.6
129.0
780.6
769.5
784.1
784.1
833.3
15.4
–
15.4
15.4
–
15.4
9.3
0.8
–
10.1
10.1
0.7
10.8
6.1
5.3
5.3
4.6
2021
Number
2020
Number
115.5
77.2
–
–
–
–
–
–
115.5
77.2
Total
£m
1,738.6
322.0
2,060.6
2,060.6
182.3
2,242.9
555.0
99.4
69.4
723.8
723.8
135.0
858.8
1,183.6
1,336.8
1,336.8
1,384.1
60.9
2.1
63.0
63.0
4.1
67.1
50.9
3.1
–
54.0
54.0
3.5
57.5
10.0
9.0
9.0
9.6
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 is aligned to the expected pattern of consumption of the economic benefits.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
175
173
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
11 EARNINGS PER ORDINARY SHARE CONTINUED
Diluted weighted average number of ordinary shares is calculated as:
Basic weighted average number of ordinary shares (million)
Adjustments for calculation of diluted earnings per share:1
Long term incentive plans
Issue of unexercised ordinary share warrants
Issue of tranche 2 shares
Weighted average number of diluted ordinary shares (million)
2021
Number
2020
Number
115.5
–
–
–
115.5
77.2
–
–
–
77.2
1. 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, and the
future issuance of shares for access to Mercedes-Benz AG technology 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 33 to show performance undistorted by adjusting items and to give a more meaningful comparison
of the Group’s performance.
12 INTANGIBLE ASSETS
Cost
Balance at 1 January 2020
Additions
Balance at 31 December 2020
Balance at 1 January 2021
Additions
Balance at 31 December 2021
Amortisation
Balance at 1 January 2020
Charge for the year
Impairment (note 13)
Balance at 31 December 2020
Balance at 1 January 2021
Charge for the year
Balance at 31 December 2021
Net book value
At 1 January 2020
At 31 December 2020
At 1 January 2021
At 31 December 2021
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
–
–
–
–
–
–
–
297.6
–
297.6
297.6
–
297.6
–
–
–
–
–
–
–
85.4
85.4
85.4
85.4
297.6
297.6
297.6
297.6
21.2
142.3
163.5
163.5
–
163.5
6.2
1.9
–
8.1
8.1
1.8
9.9
15.0
155.4
155.4
153.6
1,258.1
177.6
1,435.7
1,435.7
178.2
1,613.9
488.6
93.6
69.4
651.6
651.6
129.0
780.6
769.5
784.1
784.1
833.3
15.4
–
15.4
15.4
–
15.4
9.3
0.8
–
10.1
10.1
0.7
10.8
6.1
5.3
5.3
4.6
60.9
2.1
63.0
63.0
4.1
67.1
50.9
3.1
–
54.0
54.0
3.5
57.5
10.0
9.0
9.0
9.6
Total
£m
1,738.6
322.0
2,060.6
2,060.6
182.3
2,242.9
555.0
99.4
69.4
723.8
723.8
135.0
858.8
1,183.6
1,336.8
1,336.8
1,384.1
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 is aligned to the expected pattern of consumption of the economic benefits.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
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176
174
175
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
13 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 has considered 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 £1.6bn at 31 December 2021.
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 capitalised development costs and technology.
13 IMPAIRMENT TESTING CONTINUED
IMPAIRMENT CONTINUED
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 cash flows still anticipated to flow from those assets where they remain in use. Any assets where no future benefit is
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 assets. The recoverable amount is
the higher of the assets’ fair value less costs of disposal and its value-in-use.
expected were written off in full.
14 PROPERTY, PLANT AND EQUIPMENT
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.
Key assumptions used in value-in-use calculations
Where there are indicators of impairment, the calculation of value-in-use for the assets is most sensitive to the following assumptions:
• Cash flows are projected based on actual operating results and the current five-year plan; and
• 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 11.7% (2020: 11.1%).
Sensitivity analysis
• As at 31 December 2021 the uncommitted volumes would need to decrease by 21.0% before any of the finite life assets become impaired.
The Group has considered the carrying value of its assets in conjunction with the trading and cash flow forecasts for the Group including factors
related to the Group’s ongoing climate commitments (see note 1). The Group is satisfied no impairment is required at 31 December 2021.
IMPAIRMENT
The following table details impairments made to the Group’s assets during 2020.
Development costs (note 12)
Plant, machinery, fixtures and fittings (note 14)
Tooling (note 14)
Right-of-use lease assets (note 15)
Total impairment charge recognised as adjusting in the Consolidated Income Statement (note 5)
2021
£m
–
–
–
–
–
2020
£m
69.4
3.8
3.3
2.8
79.3
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 two 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.
Cost
Additions
Balance at 1 January 2020
Transfer to right-of-use lease assets (note 15)
Effect of movements in exchange rates
Balance at 31 December 2020
Balance at 1 January 2021
Additions
Disposals
Effect of movements in exchange rates
Balance at 31 December 2021
Depreciation
Balance at 1 January 2020
Charge for the year
Impairment (note 13)
Effect of movements in exchange rates
Balance at 31 December 2020
Balance at 1 January 2021
Charge for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2021
Net book value
At 1 January 2020
At 31 December 2020
At 1 January 2021
At 31 December 2021
Freehold
land and
buildings
£m
Plant, machinery,
fixtures
and fittings
£m
Tooling
£m
Motor
vehicles
£m
68.5
–
–
0.2
68.7
68.7
3.0
–
(0.2)
71.5
27.5
2.3
–
0.1
29.9
29.9
2.4
–
–
32.3
41.0
38.8
38.8
39.2
463.2
70.5
–
–
533.7
533.7
13.9
–
–
547.6
295.1
29.0
3.3
–
327.4
327.4
36.3
–
–
363.7
168.1
206.3
206.3
183.9
205.8
23.4
(2.4)
–
226.8
226.8
14.2
(2.4)
(0.1)
238.5
64.9
14.1
3.8
–
82.8
82.8
26.3
(2.4)
–
106.7
140.9
144.0
144.0
131.8
Total
£m
738.2
93.9
(2.4)
0.2
829.9
829.9
31.2
(2.4)
(0.3)
858.4
387.7
45.4
7.1
0.1
440.3
440.3
65.0
(2.4)
–
502.9
350.5
389.6
389.6
355.5
0.7
–
–
–
0.7
0.7
0.1
–
–
0.8
0.2
0.2
0.2
–
–
–
–
–
–
0.2
0.5
0.5
0.5
0.6
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
177
175
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
13 IMPAIRMENT TESTING CONTINUED
IMPAIRMENT CONTINUED
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 cash flows 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.
14 PROPERTY, PLANT AND EQUIPMENT
Cost
Balance at 1 January 2020
Additions
Transfer to right-of-use lease assets (note 15)
Effect of movements in exchange rates
Balance at 31 December 2020
Balance at 1 January 2021
Additions
Disposals
Effect of movements in exchange rates
Balance at 31 December 2021
Depreciation
Balance at 1 January 2020
Charge for the year
Impairment (note 13)
Effect of movements in exchange rates
Balance at 31 December 2020
Balance at 1 January 2021
Charge for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2021
Net book value
At 1 January 2020
At 31 December 2020
At 1 January 2021
At 31 December 2021
Freehold
land and
buildings
£m
Plant, machinery,
fixtures
and fittings
£m
Tooling
£m
Motor
vehicles
£m
68.5
–
–
0.2
68.7
68.7
3.0
–
(0.2)
71.5
27.5
2.3
–
0.1
29.9
29.9
2.4
–
–
32.3
41.0
38.8
38.8
39.2
463.2
70.5
–
–
533.7
533.7
13.9
–
–
547.6
295.1
29.0
3.3
–
327.4
327.4
36.3
–
–
363.7
168.1
206.3
206.3
183.9
205.8
23.4
(2.4)
–
226.8
226.8
14.2
(2.4)
(0.1)
238.5
64.9
14.1
3.8
–
82.8
82.8
26.3
(2.4)
–
106.7
140.9
144.0
144.0
131.8
0.7
–
–
–
0.7
0.7
0.1
–
–
0.8
0.2
–
–
–
0.2
0.2
–
–
–
0.2
0.5
0.5
0.5
0.6
Total
£m
738.2
93.9
(2.4)
0.2
829.9
829.9
31.2
(2.4)
(0.3)
858.4
387.7
45.4
7.1
0.1
440.3
440.3
65.0
(2.4)
–
502.9
350.5
389.6
389.6
355.5
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
178
176
177
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
14 PROPERTY, PLANT AND EQUIPMENT CONTINUED
Property, plant and equipment provides security for a fixed and floating charge in favour of the Aston Martin Lagonda Limited pension scheme.
15 LEASES
The Group holds lease contracts for buildings, plant and machinery and IT equipment.
Assets in the course of construction at a cost of £3.8m (2020: £21.7m) 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 (2020: £6.1m) which is not depreciated.
Capital commitments are disclosed in note 29. In 2021 the Group received £nil of government grants relating to qualifying tooling expenditure
(2020: £0.6m). 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 2021
Freehold land and buildings
Tooling
Plant, machinery, fixtures and fittings, and motor vehicles
At 31 December 2020
Freehold land and buildings
Tooling
Plant, machinery, fixtures and fittings, and motor vehicles
United Kingdom
£m
37.3
98.5
132.0
267.8
Rest of Europe
£m
1.9
84.5
0.4
86.8
The Americas
£m
–
0.7
–
0.7
United Kingdom
£m
36.7
100.3
144.0
281.0
Rest of Europe
£m
2.1
101.7
0.3
104.1
The Americas
£m
–
1.5
0.2
1.7
Asia Pacific
£m
–
0.2
–
0.2
Asia Pacific
£m
–
2.8
–
2.8
Total
£m
39.2
183.9
132.4
355.5
Total
£m
38.8
206.3
144.5
389.6
A) RIGHT-OF-USE LEASE ASSETS
Balance at 1 January 2020
Cost
Additions
Transfer from tangible fixed assets (note 14)
Modifications
Effect of movements in exchange rates
Balance at 31 December 2020
Balance at 1 January 2021
Additions
Disposals
Modifications
Effect of movements in exchange rates
Balance at 31 December 2021
Depreciation
Balance at 1 January 2020
Charge for the year
Impairment (note 13)
Effect of movements in exchange rates
Balance at 31 December 2020
Balance at 1 January 2021
Charge for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2021
Carrying value
At 1 January 2020
At 31 December 2020
At 1 January 2021
At 31 December 2021
Income Statement.
Properties
£m
Plant and
machinery
£m
IT equipment
15.6
6.5
111.3
75.3
0.1
–
1.7
0.3
77.4
77.4
11.4
(1.9)
3.3
(1.0)
89.2
8.5
7.2
2.8
0.2
18.7
18.7
7.7
(1.9)
(0.2)
24.3
66.8
58.7
58.7
64.9
13.2
2.4
–
–
–
15.6
15.6
–
–
–
–
2.1
2.5
–
–
4.6
4.6
0.5
–
–
5.1
11.1
11.0
11.0
10.5
£m
6.4
0.1
6.5
6.5
–
–
–
–
–
–
–
2.5
2.3
–
–
4.8
4.8
1.1
–
–
5.9
3.9
1.7
1.7
0.6
Total
£m
94.9
0.2
2.4
1.7
0.3
99.5
99.5
11.4
(1.9)
3.3
(1.0)
13.1
12.0
2.8
0.2
28.1
28.1
9.3
(1.9)
(0.2)
35.3
81.8
71.4
71.4
76.0
Income from the sub-leasing of right-of-use assets in the year 31 December 2021 was £0.6m (2020: £0.7m). 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
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
179
177
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
15 LEASES
The Group holds lease contracts for buildings, plant and machinery and IT equipment.
A) RIGHT-OF-USE LEASE ASSETS
Cost
Balance at 1 January 2020
Additions
Transfer from tangible fixed assets (note 14)
Modifications
Effect of movements in exchange rates
Balance at 31 December 2020
Balance at 1 January 2021
Additions
Disposals
Modifications
Effect of movements in exchange rates
Balance at 31 December 2021
Depreciation
Balance at 1 January 2020
Charge for the year
Impairment (note 13)
Effect of movements in exchange rates
Balance at 31 December 2020
Balance at 1 January 2021
Charge for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2021
Carrying value
At 1 January 2020
At 31 December 2020
At 1 January 2021
At 31 December 2021
Properties
£m
Plant and
machinery
£m
IT equipment
£m
75.3
0.1
–
1.7
0.3
77.4
77.4
11.4
(1.9)
3.3
(1.0)
89.2
8.5
7.2
2.8
0.2
18.7
18.7
7.7
(1.9)
(0.2)
24.3
66.8
58.7
58.7
64.9
13.2
–
2.4
–
–
15.6
15.6
–
–
–
–
15.6
2.1
2.5
–
–
4.6
4.6
0.5
–
–
5.1
11.1
11.0
11.0
10.5
6.4
0.1
–
–
–
6.5
6.5
–
–
–
–
6.5
2.5
2.3
–
–
4.8
4.8
1.1
–
–
5.9
3.9
1.7
1.7
0.6
Total
£m
94.9
0.2
2.4
1.7
0.3
99.5
99.5
11.4
(1.9)
3.3
(1.0)
111.3
13.1
12.0
2.8
0.2
28.1
28.1
9.3
(1.9)
(0.2)
35.3
81.8
71.4
71.4
76.0
Income from the sub-leasing of right-of-use assets in the year 31 December 2021 was £0.6m (2020: £0.7m). 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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
180
178
179
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
15 LEASES CONTINUED
B) OBLIGATIONS UNDER LEASES
The maturity profile of undiscounted lease cash flows accounted for under IFRS 16 are:
15 LEASES CONTINUED
B) OBLIGATIONS UNDER LEASES CONTINUED
The impact of IFRS 16 on the Consolidated Income Statement excluding tax, for the year ended 31 December 2020 is:
Less than one year
One to five year
More than five years
The maturity profile of discounted lease cash flows accounted for under IFRS 16 are:
Less than one year
One to five years
More than five years
Analysed as:
Current
Non-current
2021
£m
13.5
36.6
96.3
146.4
2021
£m
9.7
24.1
69.6
103.4
9.7
93.7
103.4
2020
£m
13.0
42.2
93.0
148.2
2020
£m
9.3
27.3
66.4
103.0
9.3
93.7
103.0
A reconciliation of the lease liability from 1 January to 31 December for the current and prior year is disclosed within note 27.
The total lease interest expense for the year ended 31 December 2021 was £3.9m (2020: £4.1m). Total cash outflow for leases accounted for under
IFRS 16 for the current year was £13.8m (2020: £16.3m). Expenses charged to the Consolidated Income Statement for short term leases for the year
ended 31 December 2021 were £0.3m (2020: £0.6m). The portfolio of short term leases at 31 December 2021 is representative of the expected
annual short term lease expense in future years.
Parts for resale, service parts and production stock
Work in progress
Finished vehicles
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 IAS 17.
Finished vehicles include Group-owned service cars at a net realisable value of £30.8m (2020: £35.7m).
The impact of IFRS 16 on the Consolidated Income Statement excluding tax, for the year ended 31 December 2021 is:
and production stock. These inventories were sold and subsequently repurchased – see note 20 for further details.
During the years ended 31 December 2021 and 2020 inventory repurchase arrangements were entered for certain parts for resale, service parts
As reported
31 December
2021
£m
1,095.3
(751.6)
343.7
(84.8)
(335.4)
(76.5)
36.4
(173.7)
(213.8)
137.9
Add back
IFRS 16
interest
charge
£m
–
–
–
–
–
–
–
3.9
3.9
–
Add back
IFRS 16
depreciation
charge
£m
–
–
–
–
Less
amortisation
of Legal fees
£m
–
–
–
–
8.4
8.4
–
–
8.4
–
(0.1)
(0.1)
–
–
(0.1)
(0.1)
Less lease
incentives
£m
–
–
–
–
1.1
1.1
–
–
1.1
1.1
Excluding
impact of
IFRS 16
31 December
2021
£m
1,095.3
(751.6)
343.7
(84.8)
(335.9)
(77.0)
36.4
(169.8)
(210.4)
129.0
Less
IAS 17
lease cost
£m
–
–
–
–
(9.9)
(9.9)
–
–
(9.9)
(9.9)
Revenue
Cost of sales
Gross profit
Selling and distribution expenses
Administrative and other
operating expenses
Operating loss
Finance income
Finance expense
(Loss)/profit before tax
Adjusted EBITDA (note 33)
17 TRADE AND OTHER RECEIVABLES
Amounts included in current assets
Trade receivables
Indirect taxation
Prepayments
Other receivables
Amounts included in non-current assets
Other receivables
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 22.
2.1
0.9
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
As reported
31 December
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
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
12.0
–
–
–
–
–
–
–
(0.1)
(0.1)
(0.1)
(0.1)
–
–
–
–
–
–
–
1.1
1.1
1.1
1.1
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 33)
16 INVENTORIES
(13.9)
(83.0)
2020
£m
611.8
(500.7)
111.1
(79.6)
(355.3)
–
(323.8)
40.0
(179.0)
(462.8)
2020
£m
80.9
43.9
82.6
207.4
2020
£m
101.7
33.2
23.6
19.4
177.9
–
–
–
–
–
–
–
(13.9)
(13.9)
(13.9)
2021
£m
115.5
29.8
51.5
196.8
2021
£m
139.5
37.1
48.8
18.0
243.4
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
181
179
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
15 LEASES CONTINUED
B) OBLIGATIONS UNDER LEASES CONTINUED
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
611.8
(500.7)
111.1
(79.6)
(354.4)
–
(322.9)
40.0
(183.1)
(466.0)
(70.1)
Add back
IFRS 16
interest
charge
£m
–
–
–
–
Add back
IFRS 16
depreciation
charge
£m
–
–
–
–
Less
amortisation
of Legal fees
£m
–
–
–
–
–
–
–
–
4.1
4.1
–
12.0
–
12.0
–
–
12.0
–
(0.1)
–
(0.1)
–
–
(0.1)
(0.1)
Less lease
incentives
£m
–
–
–
–
1.1
–
1.1
–
–
1.1
1.1
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 33)
16 INVENTORIES
Parts for resale, service parts and production stock
Work in progress
Finished vehicles
Excluding
impact of
IFRS 16
31 December
2020
£m
611.8
(500.7)
111.1
(79.6)
(355.3)
–
(323.8)
40.0
(179.0)
(462.8)
Less
IAS 17
lease cost
£m
–
–
–
–
(13.9)
–
(13.9)
–
–
(13.9)
(13.9)
(83.0)
2021
£m
115.5
29.8
51.5
196.8
2020
£m
80.9
43.9
82.6
207.4
Finished vehicles include Group-owned service cars at a net realisable value of £30.8m (2020: £35.7m).
During the years ended 31 December 2021 and 2020 inventory repurchase arrangements were entered for certain parts for resale, service parts
and production stock. These inventories were sold and subsequently repurchased – see note 20 for further details.
17 TRADE AND OTHER RECEIVABLES
Amounts included in current assets
Trade receivables
Indirect taxation
Prepayments
Other receivables
Amounts included in non-current assets
Other receivables
2021
£m
139.5
37.1
48.8
18.0
243.4
2020
£m
101.7
33.2
23.6
19.4
177.9
2.1
0.9
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 22.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
182
180
181
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
17 TRADE AND OTHER RECEIVABLES CONTINUED
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
2021
£m
108.4
2.6
30.5
27.4
27.8
196.7
2020
£m
81.2
1.7
9.8
34.2
28.3
155.2
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
Cash is held in the following currencies; those held in currencies other than sterling have been converted into sterling at year end exchange rates:
WHOLESALE FINANCE FACILITY
Sales to third-party Aston Martin franchised dealers are eligible, subject to individual dealer approved credit limits, through a wholesale
finance facility.
At 31 December 2021, the Group held a wholesale finance facility with Velocitas Funding Designated Activity Company (“Velocitas”) a special
purpose vehicle established for the purpose and financed by a panel of banks led by JPMorgan Chase Bank, N.A., London Branch. At 31 December
2021 the multi-currency facility totalled £60.0m with option under the agreements to increase to £80.0m. The facility was renewed during the
period and the current facility expires in the second half of 2022. The utilisation of the facility as at 31 December 2021 was £16.9m.
Under the facility, the Group finances dealer debt with Velocitas once a sale has been made under the Group’s revenue recognition policy, and
receives consideration equal to the value of the debt financed less a finance charge which accrues whilst the debt is outstanding and is estimated
and accrued in full at the time the debt is financed. The Group incurs a finance charge on vehicles financed through the scheme based on each
currency LIBOR plus a margin (subsequently superseded by SONIA plus a margin).
The Group acts as a senior and subordinated lender to Velocitas providing 5% of all funding into the entity in order to comply with securitisation
rules. Amounts advanced to Velocitas comprise a long term subordinated loan repayable at the end of the facility once all financed dealer debt is
settled and a short term senior loan which fluctuates on a monthly basis depending on the level of financed dealer debt. The initial facility resulted
in a total of £0.9m being advanced in the form of a GBP subordinated loan to Velocitas. Upon renewal of the facility the initial subordinated loan
was repaid and replaced with a smaller mixed-currency subordinated loan of £0.5m (note 19) sterling equivalent which remains outstanding at 31
December 2021. At 31 December 2021, the senior loan amounted to £1.6m (note 19). The Group also has an interest in a Profit Participating Loan
of £0.1m which is carried at fair value of £nil and receives interest only in the event that Velocitas has positive retained earnings at the end of the
facility. The senior and subordinated loans are both held at amortised cost.
Velocitas is an unconsolidated structured entity. The Group have assessed whether it had any control over the entity and concluded that as it has
limited exposure to variable returns in respect of the entity, being solely a residual risk that the subordinated or senior loans advanced to Velocitas
may not be repaid in full and no significant ability to influence those returns, Velocitas should not be consolidated under IFRS 10. The maximum
exposure of the Group to Velocitas at 31 December 2021 is £2.1m.
The Group has also considered the IFRS 9 criteria for asset derecognition in respect of the dealer debt financed through Velocitas. Having established
that whilst it has neither transferred nor retained substantially all of its exposure to variable cash flows associated with the dealer debt, having
transferred all default risk but retained cash flow risks associated with the timing of settlement, that Velocitas is now able to control the financed
debt such that the derecognition criteria have been met. As a result, the wholesale finance facility is off balance sheet. Due to this classification,
financing costs of £8.0m associated with the scheme are presented in operating cash flows (note 27).
In 2020 the previous facility with Standard Chartered Bank plc was £75.0m supported by a credit insurance policy. The utilisation of the facility as
at 31 December 2020 was £37.8m and, due to the off-balance sheet treatment, was not recorded in trade receivables in the Group’s Statement of
Financial Position. The scheme wound down in the first half of 2021.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
18 CASH AND CASH EQUIVALENTS
Cash at bank and in hand
approximates to their fair value.
Sterling
Chinese renminbi
Euro
US dollar
Other
Included within the above:
Restricted cash
to-back loans were fully repaid in 2021.
19 OTHER FINANCIAL ASSETS
Forward currency contracts held at fair value
Loan assets
Cash held not available for short term use
Other derivative contracts
Analysed as:
Current
Non-current
financial asset.
(note 17).
During 2021, the Group entered into a bilateral revolving credit facility with HSBC Bank plc (“HSBC”), whereby Chinese renminbi with an initial
value of £31.9m were deposited in a restricted account with HSBC in China in exchange for a £30.0m sterling overdraft facility with HSBC
in the United Kingdom. The restricted cash has been revalued at 31 December 2021 to £33.0m and is shown in the cash and cash equivalents
value above. The cash in China cannot be withdrawn whilst the loan remains in place.
In 2020, the Group held a series of one-year back-to-back loan arrangements with HSBC whereby Chinese renminbi to a value at the time of
£34.4m had been deposited in a restricted account with HSBC in China in exchange for a sterling overdraft facility with HSBC in the United
Kingdom. The restricted cash was revalued at 31 December 2020 to £35.8m and is shown in the cash and cash equivalents value above. The back-
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 2021 £1.8m held in certain local bank accounts had been frozen in relation to local arbitration proceedings (2020: £9.9m). 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
At 31 December 2021 the Group held £0.5m of subordinated loan and £1.6m of senior loan assets relating to the wholesale financing facility
2021
£m
418.9
2020
£m
489.4
2021
£m
263.3
73.5
15.8
59.0
7.3
418.9
2020
£m
365.0
58.2
7.4
46.5
12.3
489.4
33.0
35.8
2021
£m
0.6
2.1
1.8
3.3
7.8
7.3
0.5
7.8
2020
£m
0.8
–
9.9
4.0
14.7
14.6
0.1
14.7
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
183
181
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
18 CASH AND CASH EQUIVALENTS
Cash at bank and in hand
2021
£m
418.9
2020
£m
489.4
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
2021
£m
263.3
73.5
15.8
59.0
7.3
418.9
2020
£m
365.0
58.2
7.4
46.5
12.3
489.4
33.0
35.8
During 2021, the Group entered into a bilateral revolving credit facility with HSBC Bank plc (“HSBC”), whereby Chinese renminbi with an initial
value of £31.9m were deposited in a restricted account with HSBC in China in exchange for a £30.0m sterling overdraft facility with HSBC
in the United Kingdom. The restricted cash has been revalued at 31 December 2021 to £33.0m and is shown in the cash and cash equivalents
value above. The cash in China cannot be withdrawn whilst the loan remains in place.
In 2020, the Group held a series of one-year back-to-back loan arrangements with HSBC whereby Chinese renminbi to a value at the time of
£34.4m had been deposited in a restricted account with HSBC in China in exchange for a sterling overdraft facility with HSBC in the United
Kingdom. The restricted cash was revalued at 31 December 2020 to £35.8m and is shown in the cash and cash equivalents value above. The back-
to-back loans were fully repaid in 2021.
19 OTHER FINANCIAL ASSETS
Forward currency contracts held at fair value
Loan assets
Cash held not available for short term use
Other derivative contracts
Analysed as:
Current
Non-current
2021
£m
0.6
2.1
1.8
3.3
7.8
7.3
0.5
7.8
2020
£m
0.8
–
9.9
4.0
14.7
14.6
0.1
14.7
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 2021 £1.8m held in certain local bank accounts had been frozen in relation to local arbitration proceedings (2020: £9.9m). 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.
At 31 December 2021 the Group held £0.5m of subordinated loan and £1.6m of senior loan assets relating to the wholesale financing facility
(note 17).
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
184
182
183
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
19 OTHER FINANCIAL ASSETS CONTINUED
Other derivative contracts comprise warrant options and non-option derivatives both of which entitle the Group to subscribe for equity in AMR GP
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 2021 was a £0.5m decrease (2020: £0.7m increase) and is recognised within the
Income Statement in administrative expenses. A corresponding liability was recognised on inception of the arrangement (see note 22) which
represents an accrual for that element of future sponsorship payments. If the option is exercised within the next five 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 five years.
20 TRADE AND OTHER PAYABLES CONTINUED
CURRENT TRADE AND OTHER PAYABLES CONTINUED
Changes in the Group’s contract liabilities during the year are summarised as follows:
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.
Customer deposits and advances
Deferred income – service packages
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 2021 was a £0.2m decrease (2020: £0.4m increase) 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.
20 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 30)
2021
£m
134.1
342.6
239.2
5.1
–
721.0
2020
£m
104.3
268.5
200.4
4.4
1.3
578.9
Trade payables are non-interest bearing, and it is the Group’s policy to settle the liability within 90 days.
At 31 December 2021 a repurchase liability of £19.7m including accrued interest of £0.7m has been recognised in accruals and other payables
and Net Debt (see note 23). In 2021, £16.7m of parts for resale, service parts and production stock were sold for £19.0m (gross of indirect tax) and
subsequently repurchased. Under these repurchase agreements, the Group will repay a further £20.0m (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 2022.
At 31 December 2020 a repurchase liability of £38.2m including accrued interest of £0.3m was recognised in accruals and other payables and Net
Debt (note 23). 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 was been subsequently repaid. Under these repurchase agreements, the Group repaid 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. This liability was settled
in 2021.
£m
£m
Customer deposits and advances
Deferred income – service packages
be recognised in 2022.
point in time.
Additional
Amounts
component for
amounts arising
recognised
which an interest
At 1 January
during the
2021
268.5
11.9
period
174.6
3.8
within
revenue
(75.6)
(0.8)
Additional
Amounts
component for
amounts arising
recognised
which an interest
At 1 January
during the
2020
319.3
13.1
period
87.8
4.0
within
revenue
(61.6)
(5.2)
Significant
financing
charge is
recognised
4.8
–
Significant
financing
charge is
recognised
1.9
–
Amounts
returned
and other
changes
(29.7)
–
Amounts
returned
and other
changes
(78.9)
–
At 31
December
2021
342.6
14.9
At 31
December
2020
268.5
11.9
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 three years with approximately £137.9m expected to
In the year ended 31 December 2021, a finance expense of £4.8m (see note 8) was recognised as a significant financing component on contract
liabilities held for greater than 12 months (2020: £1.9m). 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
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 2021 the Group held £85.0m of
contractually refundable deposits (before the impact of significant financing components) (2020: £43.1m). The Special Vehicle programmes 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 22.
Deferred service package income is recognised in revenue over the service package period.
NON-CURRENT TRADE AND OTHER PAYABLES
Deferred income – service packages
2021
£m
9.8
2020
£m
7.5
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
185
183
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
20 TRADE AND OTHER PAYABLES CONTINUED
CURRENT TRADE AND OTHER PAYABLES CONTINUED
Changes in the Group’s contract liabilities during the year are summarised as follows:
£m
Customer deposits and advances
Deferred income – service packages
£m
Customer deposits and advances
Deferred income – service packages
Additional
amounts arising
during the
period
174.6
3.8
At 1 January
2021
268.5
11.9
Additional
amounts arising
during the
period
87.8
4.0
At 1 January
2020
319.3
13.1
Significant
financing
component for
which an interest
charge is
recognised
4.8
–
Amounts
recognised
within
revenue
(75.6)
(0.8)
Significant
financing
component for
which an interest
charge is
recognised
1.9
–
Amounts
recognised
within
revenue
(61.6)
(5.2)
Amounts
returned
and other
changes
(29.7)
–
Amounts
returned
and other
changes
(78.9)
–
At 31
December
2021
342.6
14.9
At 31
December
2020
268.5
11.9
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 three years with approximately £137.9m expected to
be recognised in 2022.
In the year ended 31 December 2021, a finance expense of £4.8m (see note 8) was recognised as a significant financing component on contract
liabilities held for greater than 12 months (2020: £1.9m). 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 2021 the Group held £85.0m of
contractually refundable deposits (before the impact of significant financing components) (2020: £43.1m). The Special Vehicle programmes 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 22.
Deferred service package income is recognised in revenue over the service package period.
NON-CURRENT TRADE AND OTHER PAYABLES
Deferred income – service packages
2021
£m
9.8
2020
£m
7.5
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
186
184
185
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
21 OTHER FINANCIAL LIABILITIES
Forward currency contracts held at fair value
Other derivative contracts (see note 19)
Derivative option over own shares (see note 22)
Analysed as:
Current
Non-current
2021
£m
0.9
2.9
31.0
34.8
34.8
–
34.8
2020
£m
0.5
2.9
79.9
83.3
83.3
–
83.3
22 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, a bilateral RCF, loan assets, derivative options,
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 has 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 oversees 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 17). Credit risk on receivables purchased by Velocitas under the wholesale finance
facility is borne by Velocitas. The Group, as a senior and subordinated lender, retains 5% of the credit risk associated with such sales. An appropriate
expected credit loss provision is made in respect of the Group’s loan assets to Velocitas. 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, among 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 five 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.
22 FINANCIAL INSTRUMENTS CONTINUED
CREDIT RISK CONTINUED
31 December is as follows:
In presenting the loss allowance summary below for both 2021 and 2020, the specific loss allowance and original receivable balance of £19.0m
related to historic other operating income has been excluded so as not to distort the expected loss rate. The trade receivable loss allowance as at
Current
1 – 30 days past due
31 – 60 days past due
61+ days past due
As at 31 December 2021
Gross Carrying
Expected
Loss Rate
As at 31 December 2020
Gross Carrying
Expected
Loss Rate
Amount
Allowance
Amount
Allowance
%
*
*
*
74.7%
£m
124.8
10.0
2.8
7.5
145.1
Loss
£m
–
–
–
5.6
5.6
%
*
*
*
33.8%
* 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 of £19.0m relating to historic other income noted above,
reconciles to the opening loss allowance as follows:
Opening loss allowance as at 1 January
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
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
Sterling
US dollar
Total borrowings
Total borrowings are denominated in the following currencies, in sterling at the year end exchange rates:
£m
91.8
5.2
0.3
8.0
105.3
2021
£m
21.7
3.1
(0.2)
24.6
Loss
£m
–
–
–
2.7
2.7
2020
£m
20.2
1.5
–
21.7
2021
£m
2020
£m
114.3
113.5
1,074.9
–
1,074.9
1,189.2
2021
£m
114.3
1,074.9
1,189.2
965.0
6.3
971.3
1,084.8
2020
£m
119.8
965.0
1,084.8
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
187
185
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22 FINANCIAL INSTRUMENTS CONTINUED
CREDIT RISK CONTINUED
In presenting the loss allowance summary below for both 2021 and 2020, the specific loss allowance and original receivable balance of £19.0m
related to historic other operating income has been excluded so as not to 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 2021
As at 31 December 2020
Expected
Loss Rate
%
*
*
*
74.7%
Gross Carrying
Amount
£m
124.8
10.0
2.8
7.5
145.1
Loss
Allowance
£m
–
–
–
5.6
5.6
Expected
Loss Rate
%
*
*
*
33.8%
Gross Carrying
Amount
£m
91.8
5.2
0.3
8.0
105.3
Loss
Allowance
£m
–
–
–
2.7
2.7
* 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 of £19.0m relating to historic other income noted above,
reconciles to the opening loss allowance as follows:
Opening loss allowance as at 1 January
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
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
2021
£m
21.7
3.1
(0.2)
24.6
2020
£m
20.2
1.5
–
21.7
2021
£m
2020
£m
114.3
113.5
1,074.9
–
1,074.9
1,189.2
2021
£m
114.3
1,074.9
1,189.2
965.0
6.3
971.3
1,084.8
2020
£m
119.8
965.0
1,084.8
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
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188
186
187
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22 FINANCIAL INSTRUMENTS CONTINUED
BORROWINGS CONTINUED
Current Borrowings
The Group has a Revolving Credit Facility (“RCF”) attached to the SSNs (see Non-Current Borrowings below). 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 2021 are £78.0m (2020: £76.2m). At 31 December 2021 £80.0m of the £90.6m RCF
was drawn as cash (2020: £78.6m of the £90.6m facility).
During 2021, the Group entered into a bilateral revolving credit facility with HSBC Bank plc (“HSBC”), whereby Chinese renminbi to a value at
the time of £31.9m were deposited in a restricted account with HSBC in China in exchange for a £30.0m sterling overdraft facility with HSBC Bank
plc in the UK. The restricted cash has been revalued at 31 December 2021 to £33.0m and is shown in the cash and cash equivalents. The facility
of £30.0m is shown within Borrowings in Current Liabilities on the Statement of Financial Position.
In 2020, the Group held a series of one-year back-to-back loan arrangements with HSBC whereby Chinese renminbi to a value at the time of
£34.4m had been deposited in a restricted account with HSBC in China in exchange for a sterling overdraft facility with HSBC in the UK. The
restricted cash was revalued at 31 December 2020 to £35.8m and is shown in the cash and cash equivalents value above. The back-to-back loans
were fully repaid in 2021.
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 2021 the amount included in current
borrowings was £6.3m (2020: £2.9m).
Non-Current Borrowings held at 31 December 2021
In March 2021 the Group issued an additional £70.7m equivalent of 10.5% First Lien SSNs with a nominal value of $98.5m at a premium of £6.3m.
Transaction costs of £1.7m and the premium are amortised using the effective interest rate.
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 held £965.0m 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. 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 were included in adjusting
items (note 5) in the year of issuance.
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 £nil at
31 December 2021 (2020: £6.3m).
Derivative option over own shares
The Second Lien SSNs include detachable warrants enabling the warrantholders to subscribe for a number of ordinary shares in the Company at
the subscription price of £10 per share. The warrantholders 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.
22 FINANCIAL INSTRUMENTS CONTINUED
BORROWINGS CONTINUED
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
assess separately 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 warrantholders 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 was recognised in the year ended 31 December 2020 and is presented in adjusting items (see note 5). During the year ended
31 December 2021, changes to the fair value of the derivative option have resulted in a credit to the Income Statement of £34.1m which is presented
in adjusting items. A total of 30,518,600 warrants have been exercised resulting in extinguishment of the associated liability and a transfer to
The only interest rate risk that the Group is exposed to at 31 December 2021 is on the bilateral RCF facility with HSBC, whereby Chinese renminbi
have been deposited in a restricted account with HSBC in China in exchange for a sterling overdraft facility with HSBC in the UK. The interest rate
charged on the overdraft facility is based on SONIA. During the year ended 31 December 2020, a back-to-back loan arrangement was the only
facility exposed to interest rate risk. That facility operated in the same manner as the bilateral RCF, however interest variability was based on the
retained earnings of £14.8m.
INTEREST RATE RISK
Bank of England Base Rate.
Profile
Fixed rate instruments
Financial liabilities
Variable rate instruments
Financial liabilities
2021
£m
2020
£m
1,159.2
1,050.4
30.0
34.4
Borrowings, including the new SSNs drawn in March 2021 and 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.
In 2021 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. During the year ended
31 December 2021 LIBOR was replaced by SONIA. This change has had an immaterial impact on the Group’s finance income.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
189
187
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22 FINANCIAL INSTRUMENTS CONTINUED
BORROWINGS CONTINUED
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
assess separately 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 warrantholders 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 was recognised in the year ended 31 December 2020 and is presented in adjusting items (see note 5). During the year ended
31 December 2021, changes to the fair value of the derivative option have resulted in a credit to the Income Statement of £34.1m which is presented
in adjusting items. A total of 30,518,600 warrants have been exercised resulting in extinguishment of the associated liability and a transfer to
retained earnings of £14.8m.
INTEREST RATE RISK
The only interest rate risk that the Group is exposed to at 31 December 2021 is on the bilateral RCF facility with HSBC, whereby Chinese renminbi
have been deposited in a restricted account with HSBC in China in exchange for a sterling overdraft facility with HSBC in the UK. The interest rate
charged on the overdraft facility is based on SONIA. During the year ended 31 December 2020, a back-to-back loan arrangement was the only
facility exposed to interest rate risk. That facility operated in the same manner as the bilateral RCF, however interest variability was based on the
Bank of England Base Rate.
Profile
Fixed rate instruments
Financial liabilities
Variable rate instruments
Financial liabilities
2021
£m
2020
£m
1,159.2
1,050.4
30.0
34.4
Borrowings, including the new SSNs drawn in March 2021 and 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.
In 2021 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. During the year ended
31 December 2021 LIBOR was replaced by SONIA. This change has had an immaterial impact on the Group’s finance income.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
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190
188
189
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22 FINANCIAL INSTRUMENTS CONTINUED
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 bilateral RCF with HSBC (2020: back-to-back loan arrangement with HSBC).
22 FINANCIAL INSTRUMENTS CONTINUED
FOREIGN CURRENCY EXPOSURE CONTINUED
SONIA/Bank of England Base Rate
(Increase)/
decrease in
interest rate
1.00%
2021
£m
Effect
on profit
after tax
0.2
2020
£m
Effect
on profit
after tax
0.3
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 2021 the Group hedged 37% for 2022 (2020: 70% and 31% for 2021 and 2022 respectively), of its US dollar denominated highly
probable inter-company sales, and 11% its Euro denominated purchases for 2022 (2020: 10% and 2% of its Euro denominated purchases for 2021
and 2022). These foreign currency risks are hedged by using foreign currency forward contracts.
FOREIGN CURRENCY EXPOSURE
The Group’s sterling equivalents of financial assets and liabilities (excluding borrowings analysed by currency above) denominated in foreign
currencies at 31 December were:
The following significant exchange rates applied:
Average rate
Average rate
Closing rate
Closing rate
At 31 December 2021
Financial assets
Trade and other receivables
Loan assets
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
Euros
£m
30.5
0.4
–
–
15.8
46.7
(118.9)
–
(10.0)
(0.4)
(129.3)
(82.6)
US dollars
£m
Chinese
renminbi
£m
27.4
–
0.3
–
59.0
86.7
(21.2)
(7.7)
(19.5)
(0.4)
(48.8)
37.9
2.6
–
–
1.8
73.5
77.9
(21.7)
(1.0)
(9.7)
–
(32.4)
45.5
Other
£m
27.8
0.1
0.3
–
7.3
35.5
(2.5)
(5.6)
(5.0)
–
(13.1)
22.4
Total
£m
88.3
0.5
0.6
1.8
155.6
246.8
(164.3)
(14.3)
(44.2)
(0.8)
(223.6)
23.2
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
Euro
Chinese renminbi
US dollar
CURRENCY RISK – SENSITIVITY
US dollar
US dollar
Euro
Euro
Chinese renminbi
Chinese renminbi
US dollars
£m
Chinese
renminbi
£m
Euros
£m
9.8
–
–
7.4
17.2
(10.2)
(0.1)
(14.5)
–
(24.8)
(7.6)
34.2
0.6
–
46.5
81.3
(29.5)
(0.1)
(13.5)
(0.3)
(43.4)
37.9
2021
1.16
8.90
1.37
1.7
–
9.9
58.2
69.8
(11.6)
(0.2)
(6.4)
–
(18.2)
51.6
2020
1.13
8.92
1.28
(Increase)/
decrease
in rate
(5%)
5%
(5%)
5%
(5%)
5%
Other
£m
28.3
0.2
–
12.3
40.8
(1.3)
(7.2)
(6.0)
(0.2)
(14.7)
26.1
2021
1.19
8.63
1.35
2021
£m
(4.9)
5.5
9.6
(10.6)
(5.0)
5.6
Total
£m
74.0
0.8
9.9
124.4
209.1
(52.6)
(7.6)
(40.4)
(0.5)
(101.1)
108.0
2020
1.12
8.93
1.37
2020
£m
(4.6)
5.0
7.7
(8.5)
(1.9)
2.1
Effect on profit
Effect on profit
after tax
after tax
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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
191
189
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22 FINANCIAL INSTRUMENTS CONTINUED
FOREIGN CURRENCY EXPOSURE CONTINUED
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
The following significant exchange rates applied:
Euro
Chinese renminbi
US dollar
Euros
£m
9.8
–
–
7.4
17.2
(10.2)
(0.1)
(14.5)
–
(24.8)
(7.6)
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
Other
£m
28.3
0.2
–
12.3
40.8
(1.3)
(7.2)
(6.0)
(0.2)
(14.7)
26.1
Total
£m
74.0
0.8
9.9
124.4
209.1
(52.6)
(7.6)
(40.4)
(0.5)
(101.1)
108.0
Average rate
2021
1.16
8.90
1.37
Average rate
2020
1.13
8.92
1.28
Closing rate
2021
1.19
8.63
1.35
Closing rate
2020
1.12
8.93
1.37
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.
US dollar
US dollar
Euro
Euro
Chinese renminbi
Chinese renminbi
(Increase)/
decrease
in rate
(5%)
5%
(5%)
5%
(5%)
5%
Effect on profit
after tax
2021
£m
(4.9)
5.5
9.6
(10.6)
(5.0)
5.6
Effect on profit
after tax
2020
£m
(4.6)
5.0
7.7
(8.5)
(1.9)
2.1
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
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192
190
191
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22 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. In March 2021, the Group issued
additional First Lien SSNs of $98.5m. No hedging relationship has been established in 2021.
$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, when practical, with currency forward contracts on a reducing basis with the highest coverage in the year immediately following the
The impact of hedging instruments on the Statement of Financial Position is as follows:
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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
22 FINANCIAL INSTRUMENTS CONTINUED
HEDGE ACCOUNTING CONTINUED
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 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 (2020: all cost of sales), except for ineffective amounts relating to the $400m SSNs which have been recorded
as finance expense in the Income Statement.
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.
31 December 2021
31 December 2020
Notional
Carrying
Change in fair
value used for
measuring
ineffectiveness
value
£m
26.6
33.6
180.9
value
£m
0.6
(0.8)
–
Notional
value
£m
56.8
28.2
299.6
Carrying
value
£m
0.8
(0.5)
–
Change in fair
value used for
measuring
ineffectiveness
Foreign exchange forward contracts – other financial
Foreign exchange forward contracts – other financial
assets
liabilities
$400m Senior Secured Notes – hedge instrument
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 2021
31 December 2020
Cash flow hedge
Cost of hedging
Cash flow hedge
Cost of hedging
reserve
reserve
reserve
reserve
£m
(0.6)
–
0.2
£m
4.7
10.5
(3.0)
£m
0.6
(0.9)
–
£m
0.7
8.8
(2.4)
£m
1.3
1.4
2.0
£m
(1.6)
–
0.3
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
193
191
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22 FINANCIAL INSTRUMENTS CONTINUED
HEDGE ACCOUNTING CONTINUED
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 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 (2020: all cost of sales), except for ineffective amounts relating to the $400m SSNs which have been recorded
as finance expense in the Income Statement.
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 2021
31 December 2020
Notional
value
£m
26.6
33.6
180.9
Change in fair
value used for
measuring
ineffectiveness
£m
0.6
(0.9)
–
Carrying
value
£m
0.6
(0.8)
–
Notional
value
£m
56.8
28.2
299.6
Change in fair
value used for
measuring
ineffectiveness
£m
1.3
1.4
2.0
Carrying
value
£m
0.8
(0.5)
–
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 2021
31 December 2020
Cash flow hedge
reserve
£m
0.7
8.8
(2.4)
Cost of hedging
reserve
£m
(0.6)
–
0.2
Cash flow hedge
reserve
£m
4.7
10.5
(3.0)
Cost of hedging
reserve
£m
(1.6)
–
0.3
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
194
192
193
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22 FINANCIAL INSTRUMENTS CONTINUED
HEDGE ACCOUNTING CONTINUED
The effect of the cash flow hedge in the Consolidated Income Statement and Other Comprehensive Income is:
22 FINANCIAL INSTRUMENTS CONTINUED
LIQUIDITY RISK CONTINUED
Year ended 31 December 2021
Foreign exchange forward contracts
$400m Senior Secured Notes – hedge instrument
Tax on fair value movements recognised in OCI
Total hedging
(loss)/gain
recognised
in OCI
£m
(2.9)
(1.7)
1.2
Ineffectiveness
recognised in the
Income Statement
£m
(0.6)
–
–
Income
Statement
line item
Cost of Sales
Cost of Sales
–
Fair value
movement
on cash flow
hedges
£m
(0.3)
–
0.1
Year ended 31 December 2020
Foreign exchange forward contracts
$400m Senior Secured Notes – hedge instrument
Total hedging
gain/(loss)
recognised
in OCI
£m
5.0
4.5
Ineffectiveness
recognised in the
Income Statement
£m
2.3
2.5
$400m Senior Secured Notes – hedge instrument
Tax on fair value movements recognised in OCI
6.8
(3.1)
–
–
Income
Statement
line item
Cost of Sales
Finance
Expense
Cost of Sales
–
Fair value
movement
on cash flow
hedges
£m
4.6
2.0
Amount
reclassified
from OCI to
the Income
Statement
£m
(2.6)
(1.7)
1.1
Amount
reclassified
from OCI to
the Income
Statement
£m
0.4
2.5
Income
Statement
line item
Cost of Sales
Cost of Sales
–
Income
Statement
line item
Cost of Sales
Cost of Sales
–
(1.3)
6.8
(1.8)
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 2021 and 2020 there are no balances remaining in the cash flow hedge reserve from hedging
relationships for which hedge accounting is no longer required.
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.
During 2021, the Group entered into a bilateral revolving credit facility with HSBC Bank plc (“HSBC”), whereby Chinese renminbi to a value at
the time of £31.9m were deposited in a restricted account with HSBC in China in exchange for a £30.0m sterling overdraft facility with HSBC Bank
plc in the UK. The restricted cash has been revalued at 31 December 2021 to £33.0m and is shown in the cash and cash equivalents. The facility
of £30.0m is shown within Borrowings in Current Liabilities on the Statement of Financial Position. The facility is available until 31 August 2025
and the total facility size is £50m.
In 2020, the Group held a series of one-year back-to-back loan arrangements with HSBC whereby Chinese renminbi to a value at the time of
£34.4m had been deposited in a restricted account with HSBC in China in exchange for a sterling overdraft facility with HSBC in the UK. The
restricted cash was revalued at 31 December 2020 to £35.8m and is shown in the cash and cash equivalents value above. The back-to-back loans
were fully repaid in 2021.
At 31 December 2021 the Group holds £1,074.9m (2020: £965.0m) of SSNs following the additional draw down of £70.7m First Lien SSNs in
March 2021 at a premium of £6.3m. 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 22). 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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
Attached to the new SSNs is a £90.6m RCF of which £80.0m (2020: £78.6m) was drawn in cash. The amount recorded in the Statement of Financial
Position is net of unamortised transaction costs. £5.9m (2020: £12.0m) of the remaining ancillary facility has been utilised through the issuance of
letters of credit and guarantees. 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 2021 the Group held refundable deposits of £85.0m (2020: £43.1m). 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 2021 based on contractual undiscounted payments is as follows.
On demand
£m
Less than 3
months
£m
>5 years
£m
Contractual Cash
Flows Total
£m
Included in the tables above and below are interest bearing loans and borrowings at a carrying value of £1,189.2m (2020: £1,084.8m). The liquidity
profile associated with leases accounted under IFRS 16 is detailed in note 15.
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
>5 years
£m
Contractual Cash
Flows Total
£m
3 to 12
months
£m
81.1
115.5
94.9
–
1 to 5
years
£m
1,614.3
–
9.8
–
0.8
292.3
–
1,624.1
3 to 12
months
£m
101.9
109.3
65.6
–
1 to 5
years
£m
6.4
7.5
–
1,267.9
436.6
0.5
277.3
–
1,281.8
436.6
–
–
–
–
–
–
–
–
–
–
117.5
1,729.8
387.5
85.0
0.8
2,320.6
124.1
1,813.8
318.6
43.1
0.5
2,300.1
–
–
–
85.0
–
85.0
–
–
–
43.1
–
43.1
36.4
282.8
–
–
–
319.2
15.8
245.5
–
–
–
261.3
Non-derivative financial liabilities
Bank loans and overdrafts
Senior Secured Notes
Trade and other payables
Refundable customer deposits and advances
Derivative financial liabilities
Forward exchange contracts
Non-derivative financial liabilities
Bank loans and overdrafts
Senior Secured Notes
Trade and other payables
Refundable customer deposits and advances
Derivative financial liabilities
Forward exchange contracts
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
195
193
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22 FINANCIAL INSTRUMENTS CONTINUED
LIQUIDITY RISK CONTINUED
Attached to the new SSNs is a £90.6m RCF of which £80.0m (2020: £78.6m) was drawn in cash. The amount recorded in the Statement of Financial
Position is net of unamortised transaction costs. £5.9m (2020: £12.0m) of the remaining ancillary facility has been utilised through the issuance of
letters of credit and guarantees. 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 2021 the Group held refundable deposits of £85.0m (2020: £43.1m). 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 2021 based on contractual undiscounted payments is as follows.
Non-derivative financial liabilities
Bank loans and overdrafts
Senior Secured Notes
Trade and other payables
Refundable customer deposits and advances
Derivative financial liabilities
Forward exchange contracts
On demand
£m
Less than 3
months
£m
–
–
–
85.0
–
85.0
36.4
–
282.8
–
–
319.2
3 to 12
months
£m
81.1
115.5
94.9
–
1 to 5
years
£m
–
1,614.3
9.8
–
0.8
292.3
–
1,624.1
>5 years
£m
Contractual Cash
Flows Total
£m
–
–
–
–
–
–
117.5
1,729.8
387.5
85.0
0.8
2,320.6
Included in the tables above and below are interest bearing loans and borrowings at a carrying value of £1,189.2m (2020: £1,084.8m). The liquidity
profile associated with leases accounted under IFRS 16 is detailed in note 15.
The maturity profile of the Group’s financial liabilities at 31 December 2020 based on contractual undiscounted payments is as follows.
Non-derivative financial liabilities
Bank loans and overdrafts
Senior Secured Notes
Trade and other payables
Refundable customer deposits and advances
Derivative financial liabilities
Forward exchange contracts
On demand
£m
Less than 3
months
£m
–
–
–
43.1
–
43.1
15.8
–
245.5
–
–
261.3
3 to 12
months
£m
101.9
109.3
65.6
–
1 to 5
years
£m
6.4
1,267.9
7.5
–
0.5
277.3
–
1,281.8
>5 years
£m
Contractual Cash
Flows Total
£m
–
436.6
–
–
–
436.6
124.1
1,813.8
318.6
43.1
0.5
2,300.1
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
196
194
195
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22 FINANCIAL INSTRUMENTS CONTINUED
ESTIMATION OF FAIR VALUES
Included in assets
Level 2
Forward foreign exchange contracts
Loan assets
Level 3
Other derivative contracts
Included in liabilities
Level 1
$1,184.0m (2020: $1,085.5m) 10.5% US dollar First Lien
Notes
$335m 15.0% US dollar Second Lien Split Coupon Notes
Level 2
Forward exchange contracts
Derivative option over own shares
As at 31 December 2021
As at 31 December 2020
Nominal value
£m
Book value
£m
Fair value
£m
Nominal value
£m
Book value
£m
Fair value
£m
–
2.1
–
2.1
0.6
2.1
3.3
6.0
0.6
2.1
3.3
6.0
–
–
–
–
0.8
–
4.0
4.8
0.8
–
4.0
4.8
23 NET DEBT
in note 27.
22 FINANCIAL INSTRUMENTS CONTINUED
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.
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 additional cash flow disclosures required under IAS 7 are made
874.2
242.6
852.5
222.4
959.4
279.6
793.8
245.0
763.2
201.8
861.2
248.9
–
48.1
1,164.9
0.8
31.0
1,106.7
0.8
31.0
1,270.8
–
63.3
1,102.1
0.5
79.9
1,045.4
0.5
79.9
1,190.5
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. 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, current borrowings and trade and other payables are deemed to have the same fair value as their book value and, as
such, the table above only includes assets and liabilities 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. Loan assets are held at cost
less any expected credit loss provision (note 17). The SSNs are all valued at amortised cost retranslated at 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 19).
The derivative option over own shares reflects the detachable warrants issued alongside the second lien SSNs (see borrowings section of note 22)
enabling the warrantholders 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. The reduction in nominal value represents options exercised by warrantholders during the year.
For all other receivables and payables, the carrying amount is deemed to reflect the fair value.
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 (decrease)/increase in cash and cash equivalents
Add back cash flows in respect of other components of net debt:
New borrowings
Proceeds from inventory repurchase arrangement
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:
(Increase)/decrease in net debt arising from cash flows
Foreign exchange (loss)/gain on secured loan
Interest added to debt
Premium on the early redemption of SSNs
Borrowing fee amortisation
Lease liability interest charge
Lease modifications
New leases
Unpaid transaction fees
Foreign exchange gain and other movements
(Increase)/decrease in net debt
Net debt at beginning of the year
Net debt at the end of the year
(70.5)
381.5
2021
£m
418.9
1.8
(19.7)
(9.7)
(93.7)
(114.3)
(1,074.9)
(891.6)
(108.5)
(19.0)
37.3
40.0
9.9
(8.1)
1.9
(117.0)
(12.4)
(13.4)
–
(7.5)
(3.9)
0.4
(11.5)
–
0.4
(164.9)
(726.7)
(891.6)
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
279.3
30.8
(8.6)
(21.4)
(13.0)
(4.1)
(1.7)
2.6
0.8
(3.8)
260.9
(987.6)
(726.7)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
197
195
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
22 FINANCIAL INSTRUMENTS CONTINUED
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.
23 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 additional cash flow disclosures required under IAS 7 are made
in note 27.
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 (decrease)/increase in cash and cash equivalents
Add back cash flows in respect of other components of net debt:
New borrowings
Proceeds from inventory repurchase arrangement
Repayment of existing borrowings
Repayment of inventory repurchase arrangement
Lease liability payments
Movement in cash held not available for short term use
Transaction fees
(Increase)/decrease in net debt arising from cash flows
Non-cash movements:
Foreign exchange (loss)/gain on secured loan
Interest added to debt
Premium on the early redemption of SSNs
Borrowing fee amortisation
Lease liability interest charge
Lease modifications
New leases
Unpaid transaction fees
Foreign exchange gain and other movements
(Increase)/decrease in net debt
Net debt at beginning of the year
Net debt at the end of the year
2021
£m
418.9
1.8
(19.7)
(9.7)
(93.7)
(114.3)
(1,074.9)
(891.6)
2020
£m
489.4
9.9
(38.2)
(9.3)
(93.7)
(113.5)
(971.3)
(726.7)
(70.5)
381.5
(108.5)
(19.0)
37.3
40.0
9.9
(8.1)
1.9
(117.0)
(12.4)
(13.4)
–
(7.5)
(3.9)
0.4
(11.5)
–
0.4
(164.9)
(726.7)
(891.6)
(1,252.7)
(76.8)
1,092.3
80.0
12.2
0.9
41.9
279.3
30.8
(8.6)
(21.4)
(13.0)
(4.1)
(1.7)
2.6
0.8
(3.8)
260.9
(987.6)
(726.7)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
198
196
197
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
24 PROVISIONS
At the beginning of the year
Charge for the year
Utilisation
Effect of movements in exchange rates
Release to the Income Statement
At the end of the year
Analysed as:
Current
Non-current
2021 £m
2020 £m
Restructuring
7.8
–
(5.0)
–
(2.4)
0.4
Warranty
31.1
31.8
(23.9)
0.2
(0.7)
38.5
Total
38.9
31.8
(28.9)
0.2
(3.1)
38.9
Restructuring
–
12.1
(4.3)
–
–
7.8
Warranty
28.2
33.0
(29.8)
(0.3)
–
31.1
0.4
–
0.4
19.5
19.0
38.5
19.9
19.0
38.9
7.8
–
7.8
14.3
16.8
31.1
Total
28.2
45.1
(34.1)
(0.3)
–
38.9
22.1
16.8
38.9
In the year ended 31 December 2020, the Group launched a consultation process to reduce employee numbers reflecting lower than originally
planned production volumes resulting in an exceptional charge to the Income Statement in 2020. The restructuring is materially complete with an
exceptional release to the income statement reflecting unutilised amounts of the provision during the year ended 31 December 2021 (note 5).
The warranty provision is calculated based on the level of historic claims and is expected to be substantially utilised within the next three years.
25 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 2021
was £10.6m (2020: £10.2m). Outstanding contributions at the year end were £0.9m (2020: £0.9m). 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 was appointed
during 2019.
The pension scheme exposes the Group to the following risks:
• Asset volatility – the scheme’s Statement of Investment Principles targets 40% return-enhancing assets and 60% risk-reducing assets. The
•
Trustee monitors the appropriateness of the scheme’s investment strategy, in consultation with the Group, on an ongoing 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 2021 or 31 December 2020 (note 31). The projected unit method has
been used to determine the liabilities.
25 PENSION OBLIGATIONS CONTINUED
DEFINED BENEFIT SCHEME CONTINUED
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 investment return would be based on the
Bank of England Gilt curve plus 0.5% per annum and that salary increases would be equivalent to CPI inflation plus 1.0% per annum.
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.
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 2022 are £20.4m.
A full actuarial valuation was carried out as at 6 April 2020. The 2020 valuation was updated by an independent qualified actuary to 31 December
2020 and 2021 respectively 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:
Rate of increase in pensions in payment attracting LPI
Discount rate
Rate of increase in salaries
Rate of revaluation in deferment
Expected return on scheme assets
RPI Inflation assumption
CPI Inflation assumption
Projected life expectancy from age 65
Male
Female
Average duration of the liabilities in years as at 31 December 2021
Average duration of the liabilities in years as at 31 December 2020
31 December
31 December
2021
2.00%
3.10%
2.50%
3.00%
2.00%
3.10%
2.50%
2020
1.60%
2.70%
2.10%
2.70%
1.60%
2.70%
2.10%
Current
Currently
aged 65
2020
21.8
24.2
Years
26
25
Future
Currently
aged 45
2021
22.8
25.5
Current
Currently
aged 65
2021
21.5
24.0
Future
Currently
aged 45
2020
23.2
25.7
The Group’s inflation assumption reflects its long term expectations and has not been amended for short term variability. The 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 2041 (2021 assumptions) or 2040 (2020 assumptions).
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
199
197
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
25 PENSION OBLIGATIONS CONTINUED
DEFINED BENEFIT SCHEME CONTINUED
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 investment return would be based on the
Bank of England Gilt curve plus 0.5% per annum and that salary increases would be equivalent to CPI inflation plus 1.0% per annum.
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.
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 2022 are £20.4m.
A full actuarial valuation was carried out as at 6 April 2020. The 2020 valuation was updated by an independent qualified actuary to 31 December
2020 and 2021 respectively 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
2021
2.00%
3.10%
2.50%
3.00%
2.00%
3.10%
2.50%
31 December
2020
1.60%
2.70%
2.10%
2.70%
1.60%
2.70%
2.10%
The Group’s inflation assumption reflects its long term expectations and has not been amended for short term variability. The 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 2041 (2021 assumptions) or 2040 (2020 assumptions).
Projected life expectancy from age 65
Male
Female
Average duration of the liabilities in years as at 31 December 2021
Average duration of the liabilities in years as at 31 December 2020
Future
Currently
aged 45
2021
22.8
25.5
Current
Currently
aged 65
2021
21.5
24.0
Future
Currently
aged 45
2020
23.2
25.7
Current
Currently
aged 65
2020
21.8
24.2
Years
26
25
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
200
198
199
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
25 PENSION OBLIGATIONS CONTINUED
The following table provides information on the composition and fair value of the assets of the scheme:
25 PENSION OBLIGATIONS CONTINUED
Changes in present value of the Defined Benefit pensions obligations are analysed as follows:
31 December
2021
Quoted
£m
31 December
2021
Unquoted
£m
31 December
2021
Total
£m
31 December
2020
Quoted
£m
31 December
2020
Unquoted
£m
31 December
2020
Total
£m
Asset class
UK equities
Overseas equities
Private debt
Liability driven investment
Absolute return bonds
Diversified alternatives
Cash
Insurance policies
Total
–
41.0
–
64.9
–
–
89.3
6.0
201.2
–
–
32.8
56.0
72.6
1.3
–
–
162.7
–
41.0
32.8
120.9
72.6
1.3
89.3
6.0
363.9
36.8
46.0
–
74.3
–
–
52.8
–
209.9
The scheme assets and funded obligations at 31 December are summarised below:
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
Liability recognised in the Statement of Financial Position
–
–
30.8
34.2
71.4
1.6
–
6.2
144.2
2021
£m
363.9
(368.4)
(4.5)
(74.2)
(78.7)
36.8
46.0
30.8
108.5
71.4
1.6
52.8
6.2
354.1
2020
£m
354.1
(378.7)
(24.6)
(67.9)
(92.5)
At the beginning of the year
Current service cost
Past service cost
Interest cost
Experience gains
Distributions
Actuarial gains/(losses) arising from changes in financial assumptions
Actuarial gains arising from changes in demographic assumptions
Obligation at the end of the year
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
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.
Actual return on scheme assets
Amounts recognised in the Consolidated Income Statement during the year ending 31 December were as follows:
Analysis of amounts recognised in the Statement of Financial Position:
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
2021
£m
(8.8)
–
(8.8)
(0.2)
(1.1)
(10.1)
2020
£m
(8.6)
–
(8.6)
(0.3)
(0.4)
(9.3)
Liability at the beginning of the year
Net expense recognised in the Income Statement
Employer contributions
Gain/(loss) recognised in Other Comprehensive Income
Liability recognised in the Statement of Financial Position at the end of the year
Analysis of amount taken to Other Comprehensive Income:
Return on scheme assets excluding interest income
Experience gains arising on funded obligations
Gains/(losses) arising due to changes in financial assumptions underlying the present value of funded obligations
Losses arising as a result of adjustment made to reflect minimum funding requirements
Gains arising due to changes in demographic assumptions
Amount recognised in Other Comprehensive Income
2021
£m
(378.7)
(8.8)
–
(6.0)
3.3
6.6
10.6
4.6
(368.4)
2021
£m
354.1
5.8
20.1
(5.5)
(10.6)
363.9
2021
£m
0.3
2021
£m
(92.5)
(10.1)
20.1
3.8
(78.7)
2021
£m
(5.5)
3.3
6.6
(5.2)
4.6
3.8
2020
£m
(333.4)
(8.6)
–
(7.2)
9.0
(54.7)
15.6
0.6
(378.7)
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)
2020
£m
38.3
9.0
(54.7)
(52.3)
0.6
(59.1)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
201
199
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
25 PENSION OBLIGATIONS CONTINUED
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
Actuarial gains/(losses) arising from changes in financial assumptions
Distributions
Actuarial gains arising from changes in demographic assumptions
Obligation at the end of the year
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
Gain/(loss) recognised in Other Comprehensive Income
Liability recognised in the Statement of Financial Position at the end of the year
Analysis of amount taken to Other Comprehensive Income:
Return on scheme assets excluding interest income
Experience gains arising on funded obligations
Gains/(losses) arising due to changes in financial assumptions underlying the present value of funded obligations
Losses arising as a result of adjustment made to reflect minimum funding requirements
Gains arising due to changes in demographic assumptions
Amount recognised in Other Comprehensive Income
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
2021
£m
(378.7)
(8.8)
–
(6.0)
3.3
6.6
10.6
4.6
(368.4)
2021
£m
354.1
5.8
20.1
(5.5)
(10.6)
363.9
2021
£m
0.3
2021
£m
(92.5)
(10.1)
20.1
3.8
(78.7)
2021
£m
(5.5)
3.3
6.6
(5.2)
4.6
3.8
2020
£m
(333.4)
(8.6)
–
(7.2)
9.0
(54.7)
15.6
0.6
(378.7)
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)
2020
£m
38.3
9.0
(54.7)
(52.3)
0.6
(59.1)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
202
200
201
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
25 PENSION OBLIGATIONS CONTINUED
SENSITIVITY ANALYSIS OF THE PRINCIPAL ASSUMPTIONS USED TO MEASURE SCHEME LIABILITIES
At 31 December 2021 the present value of the benefit obligation is £368.4m (2020: £378.7m) and its sensitivity to changes in key assumptions are:
26 SHARE CAPITAL AND OTHER RESERVES
Discount rate
Rate of inflation*
Life expectancy increased by approximately 1 year
Present value
of benefit
obligations at
31 December
2021
£m
392.4
388.4
384.7
Present value
of benefit
obligations at
31 December
2020
£m
403.6
399.8
395.7
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 members’ 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 (2022/2021)
Year 2 (2023/2022)
Year 3 (2024/2023)
Year 4 (2025/2024)
Year 5 (2026/2025)
Years 6 to 10 (2027 to 2031)
HISTORY OF SCHEME EXPERIENCE
Present value of the scheme liabilities (£m)
Fair value of the scheme assets (£m)
Deficit in the scheme before adjusting to reflect minimum funding requirements (£m)
Experience (losses)/gains on scheme assets excluding interest income (£m)
Percentage of scheme assets
Return 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
2021
£m
11.0
11.3
11.7
12.0
12.4
66.7
2021
(368.4)
363.9
(4.5)
(5.5)
(1.5%)
3.3
(0.9%)
3.8
(1.0%)
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%)
Allotted, called up and fully paid
Opening balance at 1 January 2020
Private placing1
Rights issue2
Placing Shares4
Non-pre-emptive placing and retail offer3
Tranche 1 Consideration Shares5
Issue of new shares6
Transaction costs arising on the issuance
of ordinary shares
Share split – original shares7
Share split – deferred shares7
Cancellation of deferred shares7
Consolidation of shares7
Share
Capital
Share
Premium
Merger
Reserve
£m
Capital
Redemption
Reserve
£m
Number of
Shares
Nominal
Value
£
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
0.009039687
2,298,671,740
0.009039687
2,298,671,740
0.005000000
2,298,671,740
0.004039687
(2,298,671,740)
(0.004039687)
2,298,671,740
0.005000000
(2,183,738,153)
3
–
–
–
–
–
£m
2.1
0.7
11.0
2.7
2.3
2.0
–
–
20.8
11.5
9.3
(9.3)
11.5
–
11.5
0.1
–
£m
352.3
170.3
353.7
122.7
140.3
–
–
–
–
–
–
149.4
–
–
–
–
–
–
–
–
–
–
(31.1)
1,108.2
(5.4)
144.0
1,108.2
144.0
–
–
–
–
–
–
–
–
–
–
–
9.3
9.3
–
9.3
–
–
9.3
Balance as at 31 December 2020 and 1 January 2021
114,933,587
0.100000000
1,108.2
144.0
Exercise of warrant options8
Transfer between reserves
1,525,926
0.100000000
15.1
0.1
–
(0.1)
Closing balance at 31 December 2021
116,459,513
0.100000000
11.6
1,123.4
143.9
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 11) 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 12), 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.
8. On 15 July 2021 945,131 ordinary shares in the Company were issued to satisfy the redemption of 18,902,665 warrant options. £9.5m of cash was received for the shares. On 22 July
2021 330,795 ordinary shares in the Company were issued to satisfy the redemption of 6,615,932 warrant options. £3.3m of cash was received for the shares. On 11 December 2021
250,000 ordinary shares in the Company were issued to satisfy the redemption of 5,000,003 warrant options. £2.5m of cash was received for the shares. Upon issuance of the shares the
corresponding derivative option liability is extinguished resulting in a total credit to Retained Earnings during the year ended 31 December 2021 of £14.8m.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
203
201
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
26 SHARE CAPITAL AND OTHER RESERVES
Allotted, called up and fully paid
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
Share split – original shares7
Share split – deferred shares7
Cancellation of deferred shares7
Consolidation of shares7
Balance as at 31 December 2020 and 1 January 2021
Exercise of warrant options8
Transfer between reserves
Number of
Shares
228,002,890
76,000,000
1,216,011,560
304,000,000
250,000,000
224,657,287
3
Nominal
Value
£
0.009039687
0.009039687
0.009039687
0.009039687
0.009039687
0.009039687
0.009039687
–
2,298,671,740
–
0.009039687
2,298,671,740
2,298,671,740
(2,298,671,740)
2,298,671,740
(2,183,738,153)
114,933,587
0.005000000
0.004039687
(0.004039687)
0.005000000
–
0.100000000
1,525,926
–
0.100000000
–
Share
Capital
£m
2.1
0.7
11.0
2.7
2.3
2.0
–
–
20.8
11.5
9.3
(9.3)
11.5
–
11.5
0.1
–
Share
Premium
£m
352.3
170.3
353.7
–
122.7
140.3
–
(31.1)
1,108.2
–
–
–
1,108.2
–
1,108.2
15.1
0.1
Merger
Reserve
£m
–
–
–
149.4
–
–
–
(5.4)
144.0
–
–
–
144.0
–
144.0
–
(0.1)
Closing balance at 31 December 2021
116,459,513
0.100000000
11.6
1,123.4
143.9
Capital
Redemption
Reserve
£m
–
–
–
–
–
–
–
–
–
–
–
9.3
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 11) 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 12), 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.
8. On 15 July 2021 945,131 ordinary shares in the Company were issued to satisfy the redemption of 18,902,665 warrant options. £9.5m of cash was received for the shares. On 22 July
2021 330,795 ordinary shares in the Company were issued to satisfy the redemption of 6,615,932 warrant options. £3.3m of cash was received for the shares. On 11 December 2021
250,000 ordinary shares in the Company were issued to satisfy the redemption of 5,000,003 warrant options. £2.5m of cash was received for the shares. Upon issuance of the shares the
corresponding derivative option liability is extinguished resulting in a total credit to Retained Earnings during the year ended 31 December 2021 of £14.8m.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
204
202
203
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
27 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 2021
and 2020.
28 SHARE BASED PAYMENTS
LONG TERM INCENTIVE SCHEMES
Liabilities
At 1 January 2021
Changes from financing cash flows
Interest paid
Principal lease payment
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
Interest expense
Movement in accrued interest
Movement in accrued fees
Financing expense in the Income
Statement classified as
operating cash flow
Balance at 31 December 2021
Liabilities
At 1 January 2020
Changes from financing cash flows
Interest paid
Principal lease payment
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
Balance at 31 December 2020
Other
borrowings and
inventory
arrangements
£m
158.0
Lease
Liability
£m
103.0
$150m
12.0%
SSN
£m
–
$190m
6.5%
SSN
£m
–
£285m
5.75%
SSN
£m
–
$400m
6.5%
SSN
£m
–
$1,184.0m
10.5%
First Lien
Notes
£m
763.2
$335m
15%
Second Lien
Notes
£m
201.8
$68m
DDN
£m
–
(5.0)
–
(37.3)
(40.0)
19.0
31.5
(0.1)
(31.9)
–
–
–
16.5
(0.6)
–
(3.9)
(9.9)
–
–
–
–
–
(13.8)
(0.8)
11.5
(0.4)
3.9
–
–
(8.0)
134.0
–
103.4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
TOTAL
£m
1,226.0
(118.0)
(9.9)
(37.3)
(40.0)
19.0
108.5
(2.8)
(80.5)
11.6
11.5
(0.4)
155.2
(3.9)
0.8
(87.5)
–
–
–
–
77.0
(2.5)
(13.0)
9.9
–
–
93.4
(1.8)
0.8
(21.6)
–
–
–
–
–
(0.2)
(21.8)
2.5
–
–
41.4
(1.5)
–
–
852.5
–
222.4
(8.0)
1,312.3
Other
borrowings and
inventory
arrangements
£m
162.7
(9.1)
–
(175.4)
(80.0)
76.8
173.6
(2.7)
(16.8)
–
–
–
–
12.2
(0.1)
158.0
Lease
Liability
£m
111.4
(4.1)
(12.2)
–
–
–
–
–
(16.3)
(0.5)
2.6
1.7
–
4.1
–
103.0
$150m
12.0%
SSN
£m
112.0
(11.4)
–
(124.8)
–
–
–
(1.2)
(137.4)
(0.5)
–
–
–
23.4
2.5
–
$190m
6.5%
SSN
£m
137.2
(11.1)
–
(144.6)
–
–
–
(0.8)
(156.5)
(0.3)
–
–
–
17.6
2.0
–
£285m
5.75%
SSN
£m
279.0
(18.8)
–
(289.1)
–
–
–
–
(307.9)
–
–
–
–
25.5
3.4
–
$400m
6.5%
SSN
£m
301.7
(23.3)
–
(304.5)
–
–
–
–
(327.8)
(0.9)
–
–
–
24.0
3.0
–
$1,085.5m
10.5%
First Lien
Notes
£m
–
$335m
15%
Second Lien
Notes
£m
–
–
–
–
–
–
812.9
(30.7)
782.2
(19.1)
–
–
(0.5)
11.1
(10.5)
763.2
–
–
–
–
–
211.3
(5.8)
205.5
(5.8)
–
–
(0.3)
5.2
(2.8)
201.8
$68m
DDN
£m
–
(4.5)
–
(53.9)
–
–
54.9
(0.7)
(4.2)
(4.2)
–
–
–
8.4
–
–
TOTAL
£m
1,104.0
(82.3)
(12.2)
(1,092.3)
(80.0)
76.8
1,252.7
(41.9)
20.8
(31.3)
2.6
1.7
(0.8)
131.5
(2.5)
1,226.0
Aggregate fair value at measurement date (£m)
Exercise price (p)
Expected volatility (%)
Dividend yield (%)
Risk free interest rate (%)
each award.
2021 LTIP share option charge
2020 LTIP share option charge
2019 LTIP share option charge
Legacy LTIP share option charge (note 5)
The expected volatility is wholly based on the historical volatility of listed automotive peers over a period commensurate with the terms of
The total expense recognised for LTIP schemes and the Legacy LTIP in the period arising from equity-settled share-based payments is as follows:
29 CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
On 27 October 2020, the Group 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 Group 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 Group by MBAG in several stages.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
On 14 June 2021, Executive Directors and certain other employees were granted conditional share awards under the Company’s Long Term
Incentive Plan (“2021 LTIP”). On 14 December 2021, additional employees were granted conditional share awards under an extension to the same
plan. The total charge recognised in the Consolidated Income Statement in relation to this scheme was £1.2m (2020: £nil).
On 14 December 2020 Executive Directors and certain other employees were granted conditional share awards under the Company’s “2020 LTIP”.
In respect of this arrangement total charges to the Consolidated Income Statement were £1.9m (2020: £0.2m).
Aggregate fair value at measurement date (£m)
Exercise price (p)
Expected volatility (%)
Dividend yield (%)
Risk free interest rate (%)
2021 grant
of 2021 LTIP
2020 grant
of 2020 LTIP
7.3
£nil
50.0%
n/a
0.15%
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 “2019 LTIP”. On
26 October 2020 this LTIP was cancelled with total charges during the prior period amounting to £0.2m. The Directors consider this not material
and hence further detailed disclosures have been omitted.
LEGACY EXECUTIVE LONG TERM INCENTIVE PLAN
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.
2018 grant
2018 grant
2018 grant
of 2014 Legacy
of 2017 Legacy
of 2018 Legacy
LTIP
4.8
–
30
0
1.70
LTIP
25.5
–
22
0
0.14
2021
£m
1.2
1.9
–
–
3.1
LTIP
1.2
–
23
0
0.65
2020
£m
–
0.2
0.2
3.8
4.2
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
205
203
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
28 SHARE BASED PAYMENTS
LONG TERM INCENTIVE SCHEMES
On 14 June 2021, Executive Directors and certain other employees were granted conditional share awards under the Company’s Long Term
Incentive Plan (“2021 LTIP”). On 14 December 2021, additional employees were granted conditional share awards under an extension to the same
plan. The total charge recognised in the Consolidated Income Statement in relation to this scheme was £1.2m (2020: £nil).
On 14 December 2020 Executive Directors and certain other employees were granted conditional share awards under the Company’s “2020 LTIP”.
In respect of this arrangement total charges to the Consolidated Income Statement were £1.9m (2020: £0.2m).
Aggregate fair value at measurement date (£m)
Exercise price (p)
Expected volatility (%)
Dividend yield (%)
Risk free interest rate (%)
2021 grant
of 2021 LTIP
7.3
£nil
50.0%
n/a
0.15%
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 “2019 LTIP”. On
26 October 2020 this LTIP was cancelled with total charges during the prior period amounting to £0.2m. The Directors consider this not material
and hence further detailed disclosures have been omitted.
LEGACY EXECUTIVE LONG TERM INCENTIVE PLAN
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
4.8
–
30
0
1.70
2018 grant
of 2017 Legacy
LTIP
25.5
–
22
0
0.14
2018 grant
of 2018 Legacy
LTIP
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:
2021 LTIP share option charge
2020 LTIP share option charge
2019 LTIP share option charge
Legacy LTIP share option charge (note 5)
2021
£m
1.2
1.9
–
–
3.1
2020
£m
–
0.2
0.2
3.8
4.2
29 CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES
On 27 October 2020, the Group 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 Group 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 Group by MBAG in several stages.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
206
204
205
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
29 CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES CONTINUED
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) was issued to MBAG on 7 December 2020. A total of 11,714,274 ordinary shares remain unissued at 31 December 2021.
Capital expenditure contracts to the value of £14.4m (2020: £3.1m) have been committed but not provided for as at 31 December 2021.
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. There is presently a dispute between the Group and
the other shareholders of one of its subsidiary entities, which is ongoing and from which a future obligation may arise. The Group believes there is
no basis for the dispute and is working to resolve the matters raised.
30 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. Those entities
were considered to have ceased having significant control over the Group during the year ended 31 December 2021 and therefore no figures are
presented in respect of the year ended 31 December 2021. Transactions entered into, and trading balances outstanding at 31 December 2020 with
entities with significant influence over the Group, are as follows:
Related party – Group
Entities with significant influence over the Group
31 December 2020
Sales to
related
party
£m
1.4
Purchases
from related
party
£m
2.7
Amounts
owed by
related party
£m
–
Amounts owed
to related
party
£m
1.3
TRANSACTIONS WITH DIRECTORS
During the year ended 31 December 2021, a net marketing expense amounting to £21.5m of sponsorship has been incurred in the normal course
of business with AMR GP Limited, an entity indirectly controlled by a member of the Group’s Key Management Personnel. AMR GP and its legal
structure is separate to that of the Group and the Group does not have control or significant influence over AMR GP or its affiliates. £0.1m remains
due from AMR GP Limited at the balance sheet date. Under the terms of the sponsorship agreement the Group is required to provide one fleet
vehicle to the two AMR GP racing drivers free of charge. This arrangement is expected to continue for the life of the contract and is not expected
to materially affect the financial position and performance of the Group. One of the racing drivers is an immediate family member of one of the
Group’s Key Management Personnel.
During the year ended 31 December 2021, marketing transactions under the normal course of business amounting to less than £0.1m have been
undertaken with Falcon Racing Inc, an entity controlled by a member of the Group’s Key Management Personnel. £nil is outstanding from Falcon
Racing Inc at the balance sheet date. During the year ended 31 December 2021, design services of less than £0.1m were provided to Flair Investment
Holdings Limited, an entity in which a member of a Key Management Personnel has an indirect ownership interest. Less than £0.1m was outstanding
at the balance sheet date. During the year ended 31 December 2021, a member of Key Management Personnel transacted with a Group company
to undertake restoration work on a historic car. £0.3m has been received by the Group with £0.3m of works being completed in the year. £nil was
outstanding at the balance sheet date. A member of Key Management Personnel acquired three vehicles from a Group company during the period
each priced at £0.2m. £nil was outstanding at the balance sheet date. A member of Key Management Personal acquired one historic vehicle from
a Group Company during the period priced at £0.5m. £nil was outstanding at the balance sheet date. A member of Key Management Personnel
placed a deposit of £1.5m with a Group company for the future sale of a vehicle. An immediate family member of one of the Group’s Key
Management Personnel placed a deposit of less than £0.1m with a Group company for the future sale of a vehicle.
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.
TERMS AND CONDITIONS OF TRANSACTIONS WITH RELATED PARTIES
Sales and purchases between related parties are made at normal market prices unless otherwise stated. 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 31 January 2022, the Defined Benefit pension scheme operated by the Group was closed to future accrual. All active scheme participants have
become deferred members. A curtailment loss of c.£3m and other associated closure costs of c.£11m are expected to be recognised by the Group
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 2021 are disclosed below.
Proportion of
voting rights
Holding
and shares held Nature of business
100% Dormant company
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
Financing company holding the Senior Secured Notes
100% Holding company
Dormant company – financing company that held Senior
100%
Secured Notes that were repaid in 2017
100% Holding company
100%
Luxury sports car distributor
100% Dormant company
100%
Trustee of the Aston Martin Lagonda Limited Pension Scheme
Manufacture and sale of luxury sports cars, the sale of parts,
100%
brand licensing and motorsport activities
100% Non-trading company
100%
Provision of engineering and sales and marketing services
100% Dormant company
100% Dormant company
100% Dormant company
Operator of the sales office in Japan and certain other countries
Operator of the sales office in Singapore and certain other
100%
countries in the Asia Pacific region
50%*** Holding company
50%*** Sale, servicing and restoration of Aston Martin cars
Aston Martin Lagonda (China) Automobile Distribution Co., Ltd**√
100%
Luxury sports car distributor
Aston Martin Japan GK**<<
Ordinary
100%
in the Asia Pacific region
All subsidiaries are incorporated in England and Wales unless otherwise stated.
31 POST BALANCE SHEET EVENTS
during 2022.
32 GROUP COMPANIES
Investments in subsidiary undertakings
Subsidiary undertakings
Aston Martin Holdings (UK) Limited*
Aston Martin Capital Holdings Limited**◊
Aston Martin Investments Limited**
Aston Martin Capital Limited**◊
Aston Martin Lagonda Group Limited**
Aston Martin Lagonda of North America Incorporated**^
Lagonda Properties Limited**
Aston Martin Lagonda Pension Trustees Limited**
Aston Martin Lagonda Limited**
AM Brands Limited**◊
Aston Martin Lagonda of Europe GmbH**>
AML Overseas Services Limited**
Aston Martin Italy S.r.l (liquidated in 2021)**<
AM Nurburgring Racing Limited**
Aston Martin Lagonda – Asia Pacific PTE Limited**>>
AMWS Limited**◊
Aston Martin Works Limited**
incorporated in Jersey (tax resident in the UK)
◊
^
>
<
incorporated in the USA
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 pages 154-158.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
207
205
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
31 POST BALANCE SHEET EVENTS
On 31 January 2022, the Defined Benefit pension scheme operated by the Group was closed to future accrual. All active scheme participants have
become deferred members. A curtailment loss of c.£3m and other associated closure costs of c.£11m are expected to be recognised by the Group
during 2022.
32 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 2021 are disclosed below.
Investments in subsidiary undertakings
Subsidiary undertakings
Aston Martin Holdings (UK) Limited*
Aston Martin Capital Holdings Limited**◊
Aston Martin Investments Limited**
Aston Martin Capital Limited**◊
Aston Martin Lagonda Group Limited**
Aston Martin Lagonda of North America Incorporated**^
Lagonda Properties Limited**
Aston Martin Lagonda Pension Trustees Limited**
Aston Martin Lagonda Limited**
AM Brands Limited**◊
Aston Martin Lagonda of Europe GmbH**>
AML Overseas Services Limited**
Aston Martin Italy S.r.l (liquidated in 2021)**<
Aston Martin Lagonda (China) Automobile Distribution Co., Ltd**√
AM Nurburgring Racing Limited**
Aston Martin Japan GK**<<
Aston Martin Lagonda – Asia Pacific PTE Limited**>>
AMWS Limited**◊
Aston Martin Works Limited**
Holding
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Proportion of
voting rights
and shares held Nature of business
100% Dormant company
100%
100% Holding company
Financing company holding the Senior Secured Notes
Dormant company – financing company that held Senior
Secured Notes that were repaid in 2017
100%
100% Holding company
100%
100% Dormant company
100%
Luxury sports car distributor
100%
100% Non-trading company
100%
100% Dormant company
100% Dormant company
100%
100% Dormant company
Luxury sports car distributor
Trustee of the Aston Martin Lagonda Limited Pension Scheme
Manufacture and sale of luxury sports cars, the sale of parts,
brand licensing and motorsport activities
Provision of engineering and sales and marketing services
100%
100%
Operator of the sales office in Japan and certain other countries
in the Asia Pacific region
Operator of the sales office in Singapore and certain other
countries in the Asia Pacific region
50%*** Holding company
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 UK)
incorporated in the USA
incorporated in Germany
incorporated in Italy
◊
^
>
<
<< incorporated in Japan
>> incorporated in Singapore
√
* 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.
incorporated in the People’s Republic of China
The individual results, aggregate assets and aggregate liabilities included within the Consolidated Financial Statements are summarised on pages 154-158.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
208
206
207
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
33 ALTERNATIVE PERFORMANCE MEASURES CONTINUED
INCOME STATEMENT
Loss before tax
Adjusting operating expenses (note 4)
Adjusting finance expense (note 8)
Adjusting finance income (note 7)
Adjusted loss before tax (EBT)
Adjusted finance income
Adjusted finance expense
Adjusted Operating Loss (EBIT)
Adjusted Operating Margin
Reported depreciation
Reported amortisation
Adjusted EBITDA
Adjusted EBITDA Margin
EARNINGS PER SHARE
Adjusted earnings per ordinary share
Loss available for equity holders (£m)
Adjusting items (note 5)
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)
1. Average number of ordinary shares has been reduced by a ratio of 20:1 reflecting the share consolidation undertaken in December 2020.
2021
£m
(213.8)
2.2
–
(34.1)
(245.7)
(2.3)
173.7
(74.3)
(6.8%)
74.6
137.6
137.9
12.6%
2020
£m
(466.0)
98.0
75.5
(6.9)
(299.4)
(33.1)
107.6
(224.9)
(36.8%)
55.7
99.1
(70.1)
(11.5%)
2021
£m
2020
£m
(191.6)
(419.3)
(31.9)
(8.3)
(231.8)
115.5
166.6
(32.9)
(285.6)
77.2
(200.8p)
(369.9p)
(231.8)
115.5
(200.8p)
(285.6)
77.2
(369.9p)
32 GROUP COMPANIES CONTINUED
Total assets
Total liabilities
Net assets
Revenue
Profit before 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 Lagonda Group Limited
Aston Martin Lagonda of North America Incorporated
Lagonda Properties Limited
Aston Martin Lagonda Pension Trustees Limited
Aston Martin Lagonda Limited
AM Brands Limited
Aston Martin Lagonda of Europe GmbH
AML Overseas Services Limited
Aston Martin Italy S.r.l
Aston Martin Lagonda (China) Automobile Distribution Co., Ltd
AM Nurburgring Racing Limited
Aston Martin Japan GK
Aston Martin Lagonda – Asia Pacific PTE Limited
AMWS Limited
Aston Martin Works Limited
Aston Martin
Works Limited
2021
£m
42.5
(5.5)
37.0
53.5
4.6
2.3
AMWS Limited
2021
£m
–
–
–
–
–
–
Aston Martin
Works Limited
2020
£m
37.2
(4.9)
32.3
69.8
17.5
8.8
AMWS Limited
2020
£m
–
–
–
–
–
–
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
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
9920 Irvine Center Drive, Irvine, CA 92618, United States of America
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
28 Esplanade, St.Helier, Jersey, JE2 3QA
Gottlieb-Daimler-Strasse 30, 53520 Meuspath, Germany
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
8 Marina View,# 41-05, Asia Square Tower 1, Singapore 018960
28 Esplanade, St.Helier, Jersey, JE2 3QA
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
33 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.
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 cash flow is represented by cash (outflow)/inflow from operating activities less the cash used in investing activities (excluding interest
received) plus interest paid in the year less interest received.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
209
207
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
33 ALTERNATIVE PERFORMANCE MEASURES CONTINUED
INCOME STATEMENT
Loss before tax
Adjusting operating expenses (note 4)
Adjusting finance expense (note 8)
Adjusting finance income (note 7)
Adjusted loss before tax (EBT)
Adjusted finance income
Adjusted finance expense
Adjusted Operating Loss (EBIT)
Adjusted Operating Margin
Reported depreciation
Reported amortisation
Adjusted EBITDA
Adjusted EBITDA Margin
EARNINGS PER SHARE
Adjusted earnings per ordinary share
Loss available for equity holders (£m)
Adjusting items (note 5)
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)
1. Average number of ordinary shares has been reduced by a ratio of 20:1 reflecting the share consolidation undertaken in December 2020.
2021
£m
(213.8)
2.2
–
(34.1)
(245.7)
(2.3)
173.7
(74.3)
(6.8%)
74.6
137.6
137.9
12.6%
2020
£m
(466.0)
98.0
75.5
(6.9)
(299.4)
(33.1)
107.6
(224.9)
(36.8%)
55.7
99.1
(70.1)
(11.5%)
2021
£m
2020
£m
(191.6)
(419.3)
(31.9)
(8.3)
(231.8)
115.5
(200.8p)
(231.8)
115.5
(200.8p)
166.6
(32.9)
(285.6)
77.2
(369.9p)
(285.6)
77.2
(369.9p)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
210
208
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
209
PARENT COMPANY FINANCIAL STATEMENTS
33 ALTERNATIVE PERFORMANCE MEASURES CONTINUED
NET DEBT
PARENT COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021
Opening cash and cash equivalents
Cash inflow/(outflow) from operating activities
Cash outflow from investing activities
Cash (outflow)/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 CASH FLOW
Net cash inflow/(outflow) from operating activities
Cash used in investing activities (excluding interest received)
Interest paid less interest received
Free cash flow
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
2021
£m
489.4
178.9
(184.1)
(66.5)
1.2
418.9
1.8
(1,189.2)
(103.4)
(19.7)
(891.6)
137.9
6.5x
2021
£m
178.9
(185.2)
(116.9)
(123.2)
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)
31 December
31 December
2021
£m
2020
£m
Notes
3
4
5
6
6
6
6
957.4
957.4
713.7
(219.1)
1,452.0
759.7
(330.0)
1,387.1
11.6
1,123.4
9.3
2.0
143.9
161.8
1,452.0
11.5
1,108.2
9.3
2.0
144.0
112.1
1,387.1
The Financial Statements were approved by the Board of Directors on 22 February 2022 and were signed on its behalf by
TOBIAS MOERS
CHIEF EXECUTIVE OFFICER
Company Number: 11488166
KENNETH GREGOR
CHIEF FINANCIAL OFFICER
The profit on ordinary activities after taxation amounts to £34.9m (2020: loss of £90.1m).
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
211
209
PARENT COMPANY FINANCIAL STATEMENTS
PARENT COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021
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
31 December
2021
£m
31 December
2020
£m
Notes
3
4
5
6
6
6
6
957.4
957.4
713.7
(219.1)
1,452.0
759.7
(330.0)
1,387.1
11.6
1,123.4
9.3
2.0
143.9
161.8
1,452.0
11.5
1,108.2
9.3
2.0
144.0
112.1
1,387.1
The Financial Statements were approved by the Board of Directors on 22 February 2022 and were signed on its behalf by
TOBIAS MOERS
CHIEF EXECUTIVE OFFICER
Company Number: 11488166
KENNETH GREGOR
CHIEF FINANCIAL OFFICER
The profit on ordinary activities after taxation amounts to £34.9m (2020: loss of £90.1m).
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
212
210
211
PARENT COMPANY FINANCIAL STATEMENTS CONTINUED
NOTES TO THE COMPANY FINANCIAL STATEMENTS
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
Company
At 1 January 2021
Total comprehensive income
for the year
Profit for the year
Total comprehensive income
for the year
Transactions with owners recorded
directly in equity
Warrant options exercised (note 5)
Transfer between categories
Total transactions with owners
Share
Capital
£m
11.5
Share
Premium
£m
1,108.2
Capital
Redemption
Reserve
£m
9.3
Capital
Reserve
£m
2.0
Merger
Reserve
£m
144.0
Retained
Earnings
£m
112.1
Total
Equity
£m
1,387.1
FRS 101.
–
–
0.1
–
0.1
–
–
15.1
0.1
15.2
–
–
–
–
–
–
–
–
–
–
–
–
–
(0.1)
(0.1)
34.9
34.9
14.8
–
14.8
34.9
34.9
30.0
–
30.0
At 31 December 2021
11.6
1,123.4
9.3
2.0
143.9
161.8
1,452.0
note 22 of the Group Financial Statements.
Company
At 1 January 2020
Total comprehensive income
for the year
Loss for the year
Total comprehensive income
for the year
Transactions with owners recorded
directly in equity
Issuance of ordinary shares (note 6)
Capital reduction
Total transactions with owners
Share
Capital
£m
2.1
Share
Premium
£m
352.3
Capital
Redemption
Reserve
£m
–
Capital
Reserve
£m
2.0
Merger
Reserve
£m
–
Retained
Earnings
£m
202.2
–
–
18.7
(9.3)
9.4
–
–
755.9
–
755.9
–
–
–
9.3
9.3
9.3
–
–
–
–
–
–
–
(90.1)
(90.1)
144.0
–
144.0
–
–
–
Total
Equity
£m
558.6
(90.1)
(90.1)
918.6
–
918.6
At 31 December 2020
11.5
1,108.2
2.0
144.0
112.1
1,387.1
1 ACCOUNTING POLICIES
flows around the development and launch of new models. In addition,
Authorisation of Financial Statements and statement of compliance with
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
The Parent Company Financial Statements of Aston Martin Lagonda
factors to the extent which the Directors consider them to represent their
Global Holdings plc (the Company) for the year were authorised for
best estimate of the future based on the information that is available to
issue by the Board of Directors on 22 February 2022 and the Statement
them at the time of approval of these Financial Statements.
of Financial Position was signed on the Board’s behalf by Tobias Moers
and Kenneth Gregor. The Company is a public limited company
The Directors have considered a severe but plausible downside scenario
incorporated and domiciled in the UK. The Company’s ordinary shares
that includes considering the impact of a 25% reduction in DBX volumes
are traded on the London Stock Exchange and it is not under the control
from forecast levels and operating costs higher than the base plan.
of any single shareholder.
An overview of the business activities of Aston Martin Lagonda Global
and, accordingly, funds generated through operations are expected to
Holdings plc, including a review of the key business risks that the Group
be reinvested in the business mainly through new model development
faces, is given in the Strategic Report on pages 5 to 81. The debt facilities
and other capital expenditure. To a certain extent such expenditure is
available to the Group and the maturity profile of this debt is shown in
discretionary and, in the event of risks occurring which could have a
The Group plans to make continued investment for growth in the period
particularly severe effect on the Group, as identified in the severe but
plausible downside scenario, actions such as constraining capital
The Group meets its day-to-day working capital requirements and
spending, working capital improvements, reduction in marketing
medium term funding requirements through a mixture of $1,184.0m of
expenditure and the continuation of strict and immediate expense
First Lien notes at 10.5% which mature in November 2025, $335.0m of
control would be taken to safeguard the Group’s financial position.
Second Lien split coupon notes at 15% per annum (8.89 % cash and
6.11% PIK) which mature in November 2026, a revolving credit facility
In addition, we also considered the circumstances which would be
(£90.6m) which matures August 2025, facilities to finance inventory,
needed to exhaust the Group’s liquidity over the assessment period, a
a bilateral RCF agreement and a wholesale vehicle financing facility
reverse stress test. This would indicate that vehicle sales would need to
(as described in note 17 of the Group Financial Statements). Under the
reduce by 40% from forecast levels without any of the above mitigations
RCF the Group is required to comply with a liquidity covenant until
to result in having no liquidity. The likelihood of these circumstances
May 2022 and a leverage covenant thereafter tested quarterly from
occurring is considered remote both in terms of the magnitude of the
June 2022.
reduction and that over such a long period, management could take
substantial mitigating actions, such as reducing capital spending to
The amounts outstanding on all the borrowings are shown in note 22
preserve liquidity.
to the Group Financial Statements.
The Directors have developed trading and cash flow forecasts for the
current trading and available facilities, the Directors have a reasonable
period from the date of approval of these Financial Statements through
expectation that the Group has adequate resources to continue in
30 June 2023 (the going concern review period). These forecasts show
operational existence for the foreseeable future and to comply with its
that the Group has sufficient financial resources to meet its obligations
financial covenants therefore the Directors continue to adopt the going
as they fall due and to comply with covenants for the going concern
concern basis in preparing the Financial Statements.
Accordingly, after considering the forecasts, appropriate sensitivities,
review period.
The Parent Company Financial Statements are presented in sterling.
The forecasts reflect our strategy of rebalancing supply and demand and
the decisive actions taken to improve cost efficiency, in alignment with
These Financial Statements have been prepared in accordance with
the ultra-luxury performance-oriented strategy. The forecasts include the
Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (FRS
costs of the Group's environmental, social and governance ("ESG")
101). No Income Statement is presented for the Company as permitted
commitments and make assumptions in respect of future market
by Section 408 of the Companies Act 2006. There were no gains or
conditions and, in particular, wholesale volumes, average selling price,
losses in the year (2020: £nil) in Other Comprehensive Income. The fee
the launch of new models, and future operating costs. The nature of the
relating to the audit of these Financial Statements of £0.3m was borne
Group's business is such that there can be variation in the timing of cash
by the Company (2020: £0.2m).
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
213
211
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 22 February 2022 and the Statement
of Financial Position was signed on the Board’s behalf by Tobias Moers
and Kenneth Gregor. 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 5 to 81. The debt facilities
available to the Group and the maturity profile of this debt is shown in
note 22 of the Group Financial Statements.
The Group meets its day-to-day working capital requirements and
medium term funding requirements through a mixture of $1,184.0m of
First Lien notes at 10.5% which mature in November 2025, $335.0m of
Second 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 bilateral RCF agreement and a wholesale vehicle financing facility
(as described in note 17 of the Group Financial Statements). Under the
RCF the Group is required to comply with a liquidity covenant until
May 2022 and a leverage covenant thereafter tested quarterly from
June 2022.
The amounts outstanding on all the borrowings are shown in note 22
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 2023 (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
the ultra-luxury performance-oriented strategy. The forecasts include the
costs of the Group's environmental, social and governance ("ESG")
commitments and make assumptions in respect of future market
conditions and, in particular, wholesale volumes, average selling price,
the launch of new models, and future operating costs. 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 25% reduction in DBX volumes
from forecast levels 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 addition, we also considered the circumstances which would be
needed to exhaust the Group’s liquidity over the assessment period, a
reverse stress test. This would indicate that vehicle sales would need to
reduce by 40% from forecast levels without any of the above mitigations
to result in having no liquidity. The likelihood of these circumstances
occurring is considered remote both in terms of the magnitude of the
reduction and that over such a long period, management could take
substantial mitigating actions, such as reducing capital spending to
preserve liquidity.
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 (2020: £nil) in Other Comprehensive Income. The fee
relating to the audit of these Financial Statements of £0.3m was borne
by the Company (2020: £0.2m).
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 214
212
213
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
1 ACCOUNTING POLICIES CONTINUED
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
requirements and disclosure
exemptions in the individual Financial Statements of qualifying entities
that otherwise apply this recognition, measurement and disclosure
requirements of UK adopted IFRS.
reporting
financial
the
FRS 101 sets out amendments to UK adopted IFRS 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
these
Financial Statements.
to all periods presented
in
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.
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 2021, the net assets of the Company (£1,452.0m) were
considerably higher than those of the Group (£660.4m). 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 £1.6bn at 31 December 2021.
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 from 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 £36.0m
(2020: £38.3m) has
been recognised.
1 ACCOUNTING POLICIES CONTINUED
FINANCIAL ASSETS AND LIABILITIES
SHARE WARRANTS
As part of the issue of the second lien SSNs by Aston Martin Capital
Financial assets are cash or a contractual right to receive cash or another
Holdings Limited, the Company issued share warrants enabling
financial asset from another entity or to exchange financial assets or
warrantholders to subscribe for a number of ordinary shares in the
liabilities with another entity under conditions that are potentially
Company at the Subscription price of £10 per share. The warrants can
favourable to the entity. In addition, contracts that result in another
be exercised from 1 July 2021 through to 7 December 2027. The fair
entity delivering a variable number of its own equity instruments are
value of the warrants is determined at each period end. A credit to the
financial assets.
Income Statement of £34.1m has been recognised in the year ended 31
December 2021 (2020: charge of £45.3m). A total of 30,518,600
Derivative financial instruments including equity options are held at fair
warrants have been exercised in the year ended 31 December 2021
value. All other financial instruments are held at amortised cost.
resulting in the issuance of 1,525,926 ordinary shares (note 6).
2 DIRECTORS’ REMUNERATION
6 CAPITAL AND RESERVES
The Company has no employees other than the Directors. Full
details of the Directors’ remuneration is given in the Directors’
Allotted, called up and fully paid
116,459,513 shares of 10.0p each (2020:
114,933,587 ordinary shares of 10p each)
2021
£m
11.6
2020
£m
11.5
Remuneration Report.
3 INVESTMENTS
Cost and net book value
At 1 January 2020
Additions in 2020
At 31 December 2020 and 31 December 2021
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 32 of the Group Financial Statements.
4 DEBTORS
5 CREDITORS
Amounts due to Group undertakings
Accrued expenses
Derivative option over own shares
2021
£m
713.7
2021
£m
187.9
0.2
31.0
219.1
£m
815.1
142.3
957.4
The Company undertook a rights issue and 3 placings of ordinary equity
shares during the year ended 31 December 2020 (see note 26 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.
2020
£m
MERGER RESERVE
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.
2020
£m
248.6
1.5
79.9
330.0
CAPITAL RESERVE
Limited in 2018.
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)
Amounts due from Group undertakings
759.7
On 26 June 2020 the Company issued 304.0m ordinary shares through
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
215
213
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
1 ACCOUNTING POLICIES CONTINUED
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.
SHARE WARRANTS
As part of the issue of the second lien SSNs by Aston Martin Capital
Holdings Limited, the Company issued share warrants enabling
warrantholders 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 is determined at each period end. A credit to the
Income Statement of £34.1m has been recognised in the year ended 31
December 2021 (2020: charge of £45.3m). A total of 30,518,600
warrants have been exercised in the year ended 31 December 2021
resulting in the issuance of 1,525,926 ordinary shares (note 6).
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.
6 CAPITAL AND RESERVES
Allotted, called up and fully paid
116,459,513 shares of 10.0p each (2020:
114,933,587 ordinary shares of 10p each)
2021
£m
11.6
2020
£m
11.5
3 INVESTMENTS
Cost and net book value
At 1 January 2020
Additions in 2020
At 31 December 2020 and 31 December 2021
£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 32 of the Group Financial Statements.
The Company undertook a rights issue and 3 placings of ordinary equity
shares during the year ended 31 December 2020 (see note 26 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.
4 DEBTORS
Amounts due from Group undertakings
5 CREDITORS
Amounts due to Group undertakings
Accrued expenses
Derivative option over own shares
2021
£m
713.7
2021
£m
187.9
0.2
31.0
219.1
2020
£m
759.7
2020
£m
248.6
1.5
79.9
330.0
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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
216
GLOSSARY
Adjusted EBITDA
Removes depreciation, loss/(profit) on sale of fixed assets and amortisation
from adjusted operating profit/(loss)
EPS
Earnings Per Share
Adjusted EBITDA margin
Adjusted EBITDA divided by revenue
Adjusted EBT
Profit/(loss) before tax and adjusting items as shown in the Consolidated
Income Statement
Adjusted Earnings Per Share
Profit/(loss) after income tax before adjusting items, divided by the weighted
average number of ordinary shares in issue during the reporting period
Adjusted operating margin
Adjusted operating profit/(loss) divided by revenue
Adjusted operating profit/(loss)
Profit/(loss) from operating activities before adjusting items
AGM
Annual General Meeting
ERP
Enterprise Resource Planning
ESG
Environmental, Social and Governance
EY
Ernst & Young LLP, the Company’s current External Auditors
Fixed Marketing or FM
Explicit marketing costs incurred directly by the Company, such as hosting
launch events
FRC
Financial Reporting Council
Free Cashflow
Cash inflow/(outflow) from operating activities plus the cash used in
investing activities (excluding interest received) plus interest paid in the
year less interest received
APM’s
Alternative Performance Measures, for detail of the measures adopted
see note 33
FTSE
Financial Times Stock Exchange
ASP
Average Selling Price
BEV
Battery Electric Vehicle
Consensus
The mean of all current financial forecasts published by equity research
analysts following the Company
FY
Financial Year, Full Year
GHG
Greenhouse Gas
GPG
Gender Pay Gap
GRI
Global Reporting Initiative
Core
The Company’s models in ongoing production excluding Limited Editions.
These currently comprise Vantage, DB11, DBS and DBX
GT
Grand Tourer, a sports car with two front seats plus smaller rear seats
D&A
Depreciation and Amortisation
HNWI’s
High Net Worth Individuals
EBITDA
Earnings Before Interest, Tax, Depreciation and Amortisation
HY
Half Year
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 217
ICE
Internal Combustion Engine
OSHA
Occupational Safety and Health Administration
IFRS
International Financial Reporting Standards
PHEV
Plug-in Hybrid Electric Vehicle
IPO
Initial Public Offering
KPI’s
Key Performance Indicators
LTI
Lost Time Injury Frequency rate, a safety benchmarking measure calculated
as the number of lost time injuries occurring in a workplace per 100,000
hours worked
LTIP
Long Term Incentive Plan
Materiality Assessment
An assessment which determines an organisation’s material sources of
Environmental, Social and Governance risk and opportunity to inform
sustainability reporting processes
MBAG
Mercedes-Benz AG
NED
Non-Executive Director
Net Debt
Current and non-current borrowings in addition to inventory financing
arrangements, lease liabilities recognised following the adoption
of IFRS 16, less cash and cash equivalents, cash held not available for
short-term use
Net-Zero
Reducing scope 1, 2, and 3 emissions to zero or to a residual level that is
consistent with reaching net-zero emissions at the global or sector level in
eligible 1.5°C-aligned pathways and neutralizing any residual emissions
at the net-zero target year and any GHG emissions released into the
atmosphere thereafter
PIK
Payment-in-Kind interest, whereby interest on a bond is paid by scrip
issuance of further bonds, rather than in cash
Project Horizon
The Company’s transformation programme, covering all areas of
the business
PSP
Performance Share Plan
R&D
Research and Development
RCF
Revolving Credit Facility
Relationship Agreements
Relationship Agreements between the Company and the Yew Tree
Consortium dated 27 February 2020 and MBAG dated 27 October 2020
which govern the relationship between the Company and each of these
shareholder groups
Retails
A volume measure of unit sales of vehicles by dealers to customers; and/
or Company sales of certain Specials direct to customers
SASB
Sustainability Accounting Standards Board
SBTi
Science-Based Targets initiative
Section 172 or s.172
Section 172 of the Companies Act 2006 requires the Board to consider
a number of factors in its decision-making, including the interests
of its stakeholders
OEM
Original Equipment Manufacturer
SID
Senior Independent Director
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 218
GLOSSARY CONTINUED
SONIA
Sterling Overnight Index Average
SOx
Sarbanes-Oxley Act
Specials
Vehicles produced in limited numbers
Speedster
A barchetta-style car without roof or windscreen
Spider
A car with removable roof
SSNs
Senior Secured Notes
Stakeholder
A party which has an interest in a company and can either affect or be
affected by the business
STEM
Science, Technology, Engineering, Maths
SUV
Sports Utility Vehicle
TCFD
Task Force on Climate-related Financial Disclosures
TSR
Total Shareholder Return
UHNWI
Ultra-High Net Worth Individual
V8, V12
An eight-cylinder internal combustion engine, a twelve-cylinder internal
combustion engine
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021 219
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
As previously reported 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”).
Further information on the Capital Reorganisation can be found in
the Combined Prospectus and Circular dated 18 November 2020 and
accessible on www.astonmartinlagonda.com.
SHARE WARRANTS
The Company 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. Details of the number of
warrants exercised since 1 July 2021 are set out on in note 22 of this report.
Further information on the warrants is set out in the combined
prospectus and circular dated 18 November 2020.
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 2022 Annual General Meeting will also be
accessible on www.astonmartinlagonda.com shortly after the meeting.
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.
SHARE DEALING
Aston Martin Lagonda Global Holdings plc shares can be traded through
most banks, building societies or stockbrokers. 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/.
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.
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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2021
220
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, among 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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