Accelerating. Forward.
ASTON MARTIN LAGONDA
ANNUAL REPORT AND ACCOUNTS 2022
Aston Martin was deeply
saddened by the passing
of Her Majesty The Queen.
Queen Elizabeth II dedicated
her life to public service, and
throughout her long reign was
a passionate champion for
British culture, enterprise and
innovation. We were honoured
she visited Aston Martin in 1966.
We send our warmest of
wishes to King Charles III,
a passionate lifelong
Aston Martin enthusiast,
and continue to offer our
service to the Royal Family as
a proud Royal Warrant holder.
Our values are: Unity,
Openness, Trust, Ownership
and Courage. At the core
of our values is one single
guiding tenet: No one builds
an Aston Martin on their own.
Our purpose is to create
vehicles with the ultimate
technology, precision and
craftmanship that deliver
thrilling performance
and a bespoke, class-
leading experience.
Our vision is to be the world’s
most desirable, ultra-luxury
British performance brand,
creating the most exquisitely
addictive performance cars.
Our strategy is built on our
key strengths; brand, product
innovation, sustainability and
team which are the pillars
underpinning our strategy
and future growth ambitions.
Contents
Business at a glance
Executive Chairman’s Statement
Chief Executive Officer’s Statement
Strategic Report
3 Highlights
4
8
14
20 Our market
22 Stakeholder engagement
26 Business model
30
44 Key performance indicators
Chief Financial Officer’s Statement
46
Group Financial Review
48
52
Environment, social and governance
79 Non-financial information statement
80 Risk management
Strategy
Corporate Governance
86 Governance at a glance
89
Executive Chairman’s
introduction to governance
90 Board of Directors
94 Executive Committee
96 Leadership and governance
100 Board activities
102 Board and workforce engagement
104 Investor engagement
106 Section 172 Statement
108 Board and Committee evaluation
110 Nomination Committee Report
114 Audit and Risk Committee Report
122 Sustainability Committee Report
124 Directors’ Remuneration Report
146 Directors’ Report
152 Statement of Directors’
Responsibilities
Financial Statements
153 Independent Auditor’s Report
164 Consolidated Financial Statements
169 Notes to the Financial Statements
225 Company Statement
of Financial Position
227 Notes to the Company
Financial Statements
Further information
230 Glossary
232 Shareholder information
Accelerating. Forward.
Highlights
Revenue
Wholesale volumes
£1.4bn
(2021 £1.1bn)
6,412
(2021 6,178)
Adjusted EBITDA
Total average selling price
£190m
(2021 £138m)
£201k
(2021 £162k)
Operating Loss
Net debt
£142m
(2021 £76m)
£766m
(2021 £892m)
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Business at a glance
Delivering our vision
Aston Martin’s vision is to be the world’s most desirable,
ultra-luxury British performance brand, creating the
most exquisitely addictive performance cars.
Why we do it
Aston Martin’s vision is to be
the world’s most desirable,
ultra-luxury British brand,
creating the most exquisitely
addictive performance cars.
Our business is focused on
delivering shareholder
value and continuing our
purpose to create vehicles
with the ultimate technology,
precision and craftsmanship
that deliver thrilling performance
and a bespoke, class-leading
customer experience.
What we do
Founded in 1913 by Lionel
Martin and Robert Bamford,
today 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, DBX and
our first hypercar, the Aston
Martin Valkyrie. Based in
Gaydon, England, Aston Martin
Lagonda designs, creates and
exports cars which are sold in
54 countries around the world.
Our sports cars are skilfully
crafted in Gaydon with our
luxury DBX SUV range proudly
hand built in St Athan, Wales.
Who we are
Aston Martin is an iconic,
globally recognised brand,
with a unique position
transcending ultra-luxury
and high performance.
For more than a century,
our 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
are strengthened by a strong,
passionate and loyal customer
base, which has been significantly
increased by the return of the
Aston Martin brand to the
Formula One® grid for the
first time since 1960.
Focused on sustainability
Aston Martin is embracing
a new, driving ambition: to be
a world-leading sustainable
ultra-luxury automotive
business. This ambition is
the central objective of our
new sustainability strategy,
Racing. Green. Our strategy
embeds principles and goals
that will continue to power
our progress. It makes
sustainability more than
one part of what we do;
it makes sustainability part
of everything we do.
Sustainability strategy goals
Tackling climate change
Creating a better environment
Investing in people
and opportunity
Exporting success
Delivering the
highest standards
p52
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Our global presence
UK
Aston Martin dealers1
21
(2021: 22)
Wholesale volumes
1,110
(2021: 1,109)
EMEA2
Aston Martin dealers*
52
(2021: 53)
Wholesale volumes
1,508
(2021: 1,270)
Americas
Aston Martin dealers*
44
(2021: 44)
Wholesale volumes
1,980
(2021: 1,984)
Asia Pacific
Aston Martin dealers*
48
(2021: 49)
Wholesale volumes
1,814
(2021: 1,815)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
5
1.
2.
All dealers are third-party dealers,
with the exception of one in the UK
EMEA includes Europe, Middle East
and Africa (excluding the UK and South Africa)
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Business strengths at a glance
Our strengths
Strong business model
Aston Martin has a strong business
model focused on creating future
value and aligned to our clear vision
to become the world’s most desirable
ultra-luxury British performance brand.
Growth ambitions
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 stakeholders.
Business Model p26
Financial review p48
Innovation:
Breathtaking portfolio
We are expanding our breath taking
portfolio of ultra-luxury and high-
performance products, including the
expansion of our DBX SUV range, the
upcoming launch of our next generation
of sports cars and our entry into the
mid-engine sports car segment.
New product line-up p40
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
World-class talent
A key element of Aston Martin’s future
growth strategy is investing in our people,
with our highly skilled and innovative team
being complemented with additional talent
to support our success.
Globally renowned
With 110 years of history, Aston Martin
is one of the world’s most renowned
automotive marques, synonymous
with inventive design, luxurious
craftsmanship, thrilling performance
and exclusivity.
Clear sustainability strategy
Through our Racing. Green. sustainability
strategy we have outlined our ambition
to be a leading sustainable ultra-luxury
business, taking action to tackle climate
change, by outlining a net-zero future
for our business.
People p70
Brand p32
Racing. Green. p52
Strong partnerships
A keen collaborator, Aston Martin
has established formidable strategic
technology partnerships and close-knit
ties with its suppliers and stakeholders.
The Secretary of State for Wales, Simon Hart
MP, visited St Athan in May to see the first
DBX707 come off the assembly line.
Stakeholders p22
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Executive Chairman’s statement
Lawrence Stroll
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Clear direction
It has now been three years
since I became Executive
Chairman and had the
privilege of commencing a
new chapter for Aston Martin.
Alongside fellow investors,
our leadership, and our
people, I have been firmly
focused on a shared vision:
to build the world’s most
desirable ultra-luxury
British performance brand.
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Executive Chairman’s statement continued
Delivering on our purpose
We create vehicles with the ultimate technology,
precision and craftmanship that deliver thrilling
performance and a bespoke class leading
customer experience.
2022 has seen Aston Martin
continue to accelerate towards
that goal, establishing strong
foundations for our future
growth and aligning the
business with its future
direction. With continued
development of breath-taking
products, I believe we are
moving towards the strongest
product portfolio across the
entire ultra-luxury segment.
From our awe-inspiring Valkyrie
hypercar to our next generation
of sports cars and the world-
leading DBX707 performance
SUV, we are assembling a
stunning line-up of models
that are inspiring a new breed
of customer and deepening the
connection with those who have
forever loved our brand. I share
their passion. With knowledge
of the products to come in our
110th anniversary year in 2023,
I could not be more excited.
Of course, the last 12 months
have not been without their
challenges. The geopolitical,
macroeconomic and humanitarian
events of 2022 have had an
impact on all businesses, with
Aston Martin no exception.
But in Gaydon, St Athan and
our other locations across the
world, it has also been a year
of positive transformational
importance for our business
and brand. I look to the future
with renewed confidence in
both our ability to deliver on
our vision and the targets we
have set.
Despite the tough operating
environment, we ended 2022
with significantly improved
growth. We have delivered
gross profit margin enhancement,
in line with our commitment to
achieving a minimum 40%
contribution margin on all new
Aston Martin products. In Q4 we
also demonstrated our ability
to be free cash flow positive,
highlighting the potential of our
business to operate sustainably
in the future. We exited 2022
with the strongest order
book this Company has seen
in many years, with heightened
excitement around our brand
and growing demand for
our products. Whilst we
accelerate and continue to
invest in our future, I also want
to acknowledge the excellent
strategic progress we have made.
2022 marked delivery of the
first new models to complete
the product development cycle
since I became Executive
Chairman. In February,
we launched the critically
acclaimed DBX707 – the world’s
most powerful luxury SUV,
combining ultra-luxury with
high performance and, crucially,
increased profitability. DBX707
was followed by our strictly
limited and highly coveted
V12 Vantage and V12 Vantage
Roadster models, all examples
of which were secured by
customers before the cars were
revealed. This huge customer
demand for our most special
of products continued with our
award-winning DBR22 model,
which has been followed in
2023 by the launch of DBS
770 Ultimate – another model
already fully allocated.
Across our organisation,
2022 saw us continue to
strengthen our teams, led by
our CEO Amedeo Felisa, who
has instilled a renewed focus
on innovation, execution
and efficiency to support
our longer-term growth.
Furthermore, we completed
a significant £654m equity
capital raise, which has seen
the Public Investment Fund
welcomed as a new anchor
shareholder and enabled us
to take action to deleverage
our balance sheet. Our target
remains to become free
cash flow positive from 2024.
We have also taken our first
steps towards a new goal of
a net zero future for Aston
Martin, through the launch of
our Racing. Green. sustainability
strategy. Outlining our target
for net-zero manufacturing
facilities by 2030 and across the
Company’s entire supply chain by
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
I remain extremely confident
in the delivery of our strategy
and the path we are on to
deliver our targets.
I thank you for joining
us on our journey.
Lawrence Stroll
Executive Chairman
2039, the strategy also confirms
our shift to electrification, with
the first Aston Martin Battery
Electric Vehicle (BEV) targeted
for launch in 2025.
In the summer, we made the
biggest investment in our iconic
brand for more than a decade,
through the launch of our renewed
iconic wings and bold new creative
strategy and brand positioning
that aligns Aston Martin to our
future ambitions. Retaining the
elegance and sophistication that
our brand and products are
revered for worldwide, our
more emotionally led creative
direction dials up the bolder,
edgier and more intense
characteristics that have always
underscored Aston Martin as
a brand born on the racetrack.
Our high performance DNA
has been further amplified
by our partnership with
the Aston Martin Aramco
Cognizant Formula OneTM team.
Our presence at the pinnacle of
motorsport is driving growing
demand from a new generation
of customers, with more than
60% of all customers new to
the brand. This is a statistic
that rises to 72% for our
Vantage F1® Edition model,
further demonstrating the
potential of this powerful,
and rapidly growing, global
platform to attract new
audiences to Aston Martin.
Our performance credentials
have been further endorsed
by the achievements of our
customers in other motorsport
formats. I congratulate the
TF Sport team on winning the
2022 FIA World Endurance
Championship in the GTE
Am class, the 11th world title
for the Vantage GTE model
since the formation of the
championship in 2012, and a
testament to our production
model from which it is derived.
2023 is poised to be a
significant year for Aston Martin.
In addition to celebrating our
110th anniversary, which will
see the unveiling of a highly-
exclusive commemorative
Special model, 2023 will
also see the start of our next
generation of sports cars
which will truly reposition
Aston Martin for the future.
Executive Chairman
Lawrence Stroll and
other members of
the executive team
held town halls with
employees on the
production floor.
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Highly tuned
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“The V12 Vantage Roadster possesses
the same potency and dynamism
that characterises the V12 Vantage
Coupe, while surpassing it in terms of
raw sensory excitement that you only
achieve with roof down driving.”
Roberto Fedeli
Group Chief Technology Officer, Aston Martin
Innovative product
Launched at the Pebble Beach Concours
d’Elegance in August, the V12 Vantage
Roadster was one of several stand-out
new products to expand Aston Martin’s
breathtaking product portfolio in 2022.
As with its Coupe equivalent, all examples
of the strictly limited production run
were fully allocated ahead of the car’s
reveal, following unprecedented
customer demand.
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In conversation with our CEO
Amedeo Felisa
Precision focus
In May 2022, Aston Martin
announced the appointment
of Amedeo Felisa as Chief
Executive Officer, with a
focus on leading the brand
to a new phase of growth
and development.
A former CEO of Ferrari,
Amedeo is one of the
most highly regarded
leaders and engineering
professionals in the
high‑performance luxury
sports car sector. Formerly
a Non‑executive Director of
Aston Martin, he previously
served as Chairman of
the Company’s Product
Strategy Committee.
He reflects on his first
year as Chief Executive
Officer and how the
business has approached
the challenges of 2022.
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In conversation with our CEO continued
Accelerating forward
“2022 has positioned us well for the future. Given
the health of our iconic brand, the size of the market
opportunity, and our renewed focus on consistently
executing an ultra‑luxury strategy, I have great
confidence that we can deliver on our ambitions.”
What were your first
impressions of Aston Martin?
Through my previous role as a
Board member, I was fortunate
to have already seen the huge
potential of the Aston Martin
brand and developed a good
knowledge of the business
and close relationships across
our senior leadership team.
My work chairing the Product
Strategy Committee allowed
me to see first-hand the
passion and expertise of our
people, but as CEO I have
been even more impressed
by the highly experienced
and impressive pool of talent
we have established here at
Aston Martin, and the culture
of innovation.
When I was appointed, I stood
on our factory floor and told
all our employees that people
would be my greatest focus.
I recognised that we needed
to create more cohesion,
encourage cross-functional
collaboration and optimise
ways of working to achieve
operational efficiencies and
work more effectively. I think
that throughout the second
half of 2022 we have made
strong progress in providing
more support and resources
for colleagues to contribute
to our success and growth.
Becoming CEO in May, I was also
impressed by DBX707. Everyone
involved should take great
pride in creating a truly game-
changing product like this.
We seized the opportunity this
outstanding model creates
in terms of both ramping
up production at St Athan in
a challenging supply chain
environment and successfully
marketing the car globally.
What were your biggest
priorities when becoming CEO?
While it was clear that
tremendous progress had
been made on our journey, we
needed to improve execution
and our capability to deliver
on targets. My immediate
priority was to focus the
organisation on our 2022
targets, delivering DBX707
volume and embedding higher
build rate for the Aston Martin
Valkyrie programme.
As CEO, I have also sought to
optimise our ways of working
to set up the business for
its future success, including
the introduction of a new
organisational structure for
engineering with increased
cross-functional teams.
Throughout the second half
of the year we’ve harnessed
this collective engineering
firepower to progress our
next generation of sports
cars, to be launched from 2023.
In addition to providing continued
cost management, I have also
personally overseen many of
the measures to mitigate the
supply chain and logistical
challenges we’ve encountered
in 2022. This is an area I am
particularly passionate about,
with a belief that any successful
automotive business must work
truly collaboratively and make
suppliers feel like valued partners.
What challenges has
Aston Martin faced in 2022?
Clearly 2022 is a year that will be
remembered for macroeconomic,
geopolitical and health challenges
on a global scale. Whilst all
businesses have been impacted
by those factors, in Gaydon,
St Athan and our other locations
across the world, it has also
been a year of positive
transformational importance
for our business and brand.
That is largely testament to the
collective efforts of our people
to show resilience, commitment
and passion in their work.
Supply chain issues and
logistical disruption have
been well documented across
the entire automotive industry
and we have needed to work
incredibly hard to navigate
those challenges and meet
customer demand, whilst
not compromising on the
incredibly high standards that
our ultra-luxury positioning
requires. I think the operational
challenges we’ve seen across
the industry have further
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
highlighted my long-standing
belief that a business such as
ours must forge incredibly
strong relationships across
the supply chain and seek
to create strategic partners,
not simply suppliers.
How do you summarise the
Group’s performance in 2022?
Having navigated a challenging
operating environment
throughout 2022, I am pleased
with how we ended the year.
We delivered in line with
expectations, took actions
to address the short-term
impacts of supply chain
issues, and continued to make
progress in several key areas
which will support our ability to
meet strong customer demand.
2022 has positioned us well for
the future. Given the health
of our iconic brand, the size
of the market opportunity,
and our renewed focus on
consistently executing an
ultra-luxury strategy, I have
great confidence that we can
deliver on our ambitions.
How is your journey
to a 40% contribution
margin progressing?
Achieving a minimum 40%
contribution margin is a major
focus for all our new models.
Despite the challenges in 2022
of unexpected supply chain
recovery costs and lower
year-on-year gross margin
within Specials, we have still
increased our overall gross
margin to 33% and expect to
deliver significant growth and
higher gross margin in 2023.
What have been your key
achievements in 2022 against
the goals set out last year?
I think the most significant
is the successful launch of
our fantastic new products,
starting with DBX707 and
the final edition V12 Vantage.
Both of these cars are a good
example of how we are uplifting
performance in our product
strategy, whilst crucially
delivering the 40% minimum
contribution margin that our
business plan requires. Our
continued development of
Amedeo Felisa presenting at the
Leadership Conference in October 2022.
Specials such as Valhalla and
the award-winning DBR22 also
carries huge importance to the
business, enhancing levels of
exclusivity and desirability for
our brand. Our record total
Average Selling Price of £201k
is also a positive indicator of
strong desirability, demonstrating
our brand’s ability to justify an
ultra-luxury price tag that so
few in the automotive sector
can command for their products.
results with heightened
awareness and salience
amongst our target audience.
We have made a renewed
commitment to making
Aston Martin a great place
to work, commencing
investment in our facilities,
culture and organisation,
which I believe will help to
drive forward our people
and progress in 2023.
Whilst not foreseen as a 2022
objective, led by our Chairman
Lawrence Stroll, this year we
have also welcomed significant
new investment through the
successful completion of the
£654m equity capital raise
that strengthens our financial
position and enhances our
pathway to becoming
sustainably free cash
flow positive from 2024.
I am also pleased with our
revenue growth, whilst we
have strong demand across
the portfolio with around 80%
of our production of current
sports cars sold out for 2023
and a stronger DBX order
book running into Q3 2023.
In 2022 we also injected
fresh energy into our
iconic brand, with the
reveal of our updated
Aston Martin wings, Intensity.
Driven. brand positioning
and fresh creative identity.
This investment in our brand
is already demonstrating
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Extraordinary bloodline
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“DBR22 is a hot-blooded, purebred Aston Martin
sports car full of speed, agility and spirit, and a
machine that we think will be the basis of many
of tomorrow’s icons.”
Marek Reichman
Chief Creative Officer
The V12-engined, two-seater coach-built
design is the latest in a long line of projects
by our in-house bespoke division, Q by
Aston Martin, which in 2022 celebrated a
decade of building exclusive cars for our
most discerning customers. The instantly
iconic model was declared Best of Show
at the influential Chantilly Arts et Élégance
Richard Mille later in the year. With the
orderbook closed, deliveries are expected
to start in 2023.
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Our market
Aston Martin and the luxury market
Market
expansion
Personalisation
and customisation
Geopolitical and
macroeconomic
Issues
The rising demand for unique and
bespoke personalised products
amongst luxury consumers
The ongoing global impact
of the COVID-19 pandemic,
war in Ukraine and global
macroeconomic challenges
The global
luxury market
The issue/opportunity
The growth in the global market
for luxury goods as the world’s
Ultra High Net Worth Individual
(UHNWI) population increases
What we’re doing
• Operating as an ultra-luxury
brand by aligning demand to
supply, and embracing
a manufacture-to-order model
Investing in our brand and
international marketing to
appeal to luxury consumers
•
• Creating more limited and
Special models to cater for our
most exclusive of customers
The opportunity to expand
Aston Martin’s brand presence
and market share in established
markets of wealth density such
as the USA, and rapidly expanding
markets for luxury cars such as
China and Japan
• Strengthening regional leadership
to deliver our strategic growth
plans for individual markets,
including appointments of new
Regional Presidents in the USA,
Asia and Europe in 2022
• Launching a new brand strategy
and creative identity to further
expand Aston Martin’s appeal
to new audiences globally
• Connecting with dealers and
customers in the USA through
Aston Martin’s significant
presence at the iconic Pebble
Beach Concours d’Elegance
• Growing our brand awareness and
desirability through the global
platform of Formula One®
• Expanding our Q by Aston Martin
offering – our ultimate bespoke
personalisation service, providing the
option for customers 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 – introducing the
introduction of the final V12 Vantage
and ultra-exclusive DBR22 in 2023,
plus the recent DBS 770 Ultimate
• Enhancing our award-winning
online configurator, allowing
customers to personally select
their own unique specification
for each Aston Martin model
• Showcasing development
upgrades to hybrid supercar
Valhalla to customer acclaim
Investing in our ultra-luxury customer
journey and retail experience
•
• Maintaining our production and
business operations through
diligent workplace health
and safety practices
• Deleveraging our balance sheet
through a successful equity capital
raise to strengthen our financial
position and reduce our debt
• Expanding our online presence to
cater for the changing needs of
customers, through new services
like our online configurator
• Suspending all product and parts
sales to Russia, in line with global
trade sanctions
• Working in close partnership with
suppliers to identify supply chain
risk at the earliest opportunity
Investing in supply chain recovery
tactics to overcome isolated
supply chain issues
•
• Regularly reviewing our pricing
to ensure strong gross margin
• Supporting our colleagues
with the higher cost of living
through pay rises approved
by the Remuneration Committee
£583m
Cash balance at the end of year
$200m
Successfully completed debt
tender in October 2022
Statistics
28%
Between 2021 and 2026 it is forecast
that the global UHNWI population
will grow by a further 28%. Over the
ten years to 2026 that represents
a more than doubling in the number
of global UHNWIs
>60%
of Aston Martin customers
are new to the brand
4.8%
year-on-year increase
in Aston Martin exports
By 2026, Asia will surpass
Europe as the second largest
regional wealth hub behind the USA
£201k
record Average Selling Price in 2022
>50%
of the planned 999 Valhalla models
already sold to customers
>10%
increase in web and configurator
sessions year-on-year
Vehicle
electrification
The issue/opportunity
Sustainability
The transition away from the
The need for all businesses
internal combustion engine (ICE)
to act on climate change and
to a range of technologies that
limit the global temperature
use electricity to propel vehicles,
rise to 1.5 degrees.
including plug-in hybrid electric
vehicles (PHEV) and battery
electric vehicles (BEV)
What we’re doing
•
Signed our enhanced technology
• Launching Racing. Green. our
agreement with Mercedes-Benz
new ESG strategy with ambitious
AG, providing access to advanced
commitments to become a
technologies
•
Investing in electrification skills
across our business
world-leading sustainable
luxury automotive business
• Working towards net-zero
• Recruiting new talent, including a
manufacturing facilities and a
dedicated Group Chief Technology
30% reduction in supply chain
Officer and new team of highly
emissions by 2030
skilled powertrain experts
•
In our manufacturing facilities in
•
Introducing hybrid technology
Gaydon and St Athan we continue
through our products such as
Aston Martin Valkyrie and
DBX Straight-Six
our commitments to only use
renewable electricity
• By 2025 we aim to achieve zero
• Preparing to deliver our first PHEV,
single-use plastic packaging from
Valhalla, in 2024 ahead of the first
our Manufacturing facilities and to
Aston Martin BEV in 2025
reduce our water consumption by 15%
Statistics
Zero-
emissions
All new car sales in Europe by 2035
to be zero-emissions at the tail pipe
Reduce 2.5%
In 2022 new targets were set to drive
year-on-year improvements in our
sustainability performance including
reducing CO2 emissions and energy
intensity per car each year by 2.5%.
Reduced 3.9%
In 2022 Scope 1 CO2 emissions
were reduced by 3.9% per car
compared to 2021
Strategic Objectives
• Balance supply to demand,
• Accelerating growth with our
• Targeting minimum of
operating as a true luxury business
• Focussing on building to order,
target to achieve approximately
10,000 wholesales
supporting strong pricing
• By 2024/25 seeking to generate
40% contribution margin
on all new models
• Targeting to become sustainably
free cash flow positive from 2024
c.£2 billion revenue and
c.£500 million adjusted EBITDA
Strategic Objectives
producing emissions-free
vehicles. First BEV targeted
for launch in 2025
– Fully electrified sports car
and SUV portfolio by 2030
• Transforming our products,
• Our Racing. Green. sustainability strategy outlines our target to achieve:
– Carbon Neutral manufacturing facilities
– 100% use of renewable electricity in its manufacturing facilities
– A new goal to achieve a 2.5% year-on-year reduction in CO2 emissions from our manufacturing facilities*
– A new goal to reduce CO2 emissions intensity and energy consumption per car by 2.5% year on year*
– Enhancing our gender diversity aspiration with a new target of women in 25% of leadership positions by 2025
and in 30% of leadership positions by 2030
– A new target to improve biodiversity at our manufacturing facilities
* Scope 1 CO2 emissions.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
The global
luxury market
The issue/opportunity
Market
expansion
Personalisation
and customisation
Geopolitical and
macroeconomic
Issues
The growth in the global market
The opportunity to expand
The rising demand for unique and
The ongoing global impact
for luxury goods as the world’s
Aston Martin’s brand presence
bespoke personalised products
of the COVID-19 pandemic,
Ultra High Net Worth Individual
and market share in established
amongst luxury consumers
(UHNWI) population increases
markets of wealth density such
war in Ukraine and global
macroeconomic challenges
as the USA, and rapidly expanding
markets for luxury cars such as
China and Japan
• Operating as an ultra-luxury
• Strengthening regional leadership
• Expanding our Q by Aston Martin
• Maintaining our production and
What we’re doing
brand by aligning demand to
supply, and embracing
a manufacture-to-order model
•
Investing in our brand and
international marketing to
appeal to luxury consumers
• Creating more limited and
Special models to cater for our
most exclusive of customers
to deliver our strategic growth
plans for individual markets,
including appointments of new
Regional Presidents in the USA,
Asia and Europe in 2022
offering – our ultimate bespoke
business operations through
personalisation service, providing the
diligent workplace health
option for customers to personalise
and safety practices
their Aston Martin beyond the scope
• Deleveraging our balance sheet
of the core option range, and even
through a successful equity capital
• Launching a new brand strategy
commission their own unique model
raise to strengthen our financial
and creative identity to further
expand Aston Martin’s appeal
to new audiences globally
• Launching special, limited-edition
position and reduce our debt
products for our most distinguished
• Expanding our online presence to
customers – introducing the
cater for the changing needs of
• Connecting with dealers and
introduction of the final V12 Vantage
customers, through new services
customers in the USA through
Aston Martin’s significant
presence at the iconic Pebble
Beach Concours d’Elegance
and ultra-exclusive DBR22 in 2023,
like our online configurator
plus the recent DBS 770 Ultimate
• Suspending all product and parts
• Enhancing our award-winning
online configurator, allowing
sales to Russia, in line with global
trade sanctions
• Growing our brand awareness and
customers to personally select
• Working in close partnership with
desirability through the global
platform of Formula One®
their own unique specification
for each Aston Martin model
suppliers to identify supply chain
risk at the earliest opportunity
• Showcasing development
•
Investing in supply chain recovery
upgrades to hybrid supercar
Valhalla to customer acclaim
tactics to overcome isolated
supply chain issues
•
Investing in our ultra-luxury customer
• Regularly reviewing our pricing
journey and retail experience
to ensure strong gross margin
• Supporting our colleagues
with the higher cost of living
through pay rises approved
by the Remuneration Committee
£201k
>50%
£583m
$200m
of the planned 999 Valhalla models
Successfully completed debt
already sold to customers
tender in October 2022
Between 2021 and 2026 it is forecast
of Aston Martin customers
record Average Selling Price in 2022
Cash balance at the end of year
that the global UHNWI population
are new to the brand
Statistics
28%
will grow by a further 28%. Over the
ten years to 2026 that represents
a more than doubling in the number
of global UHNWIs
>60%
4.8%
year-on-year increase
in Aston Martin exports
By 2026, Asia will surpass
Europe as the second largest
regional wealth hub behind the USA
sessions year-on-year
>10%
increase in web and configurator
Vehicle
electrification
The issue/opportunity
The transition away from the
internal combustion engine (ICE)
to a range of technologies that
use electricity to propel vehicles,
including plug-in hybrid electric
vehicles (PHEV) and battery
electric vehicles (BEV)
What we’re doing
Sustainability
The need for all businesses
to act on climate change and
limit the global temperature
rise to 1.5 degrees.
•
•
Signed 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
•
dedicated Group Chief Technology
Officer and new team of highly
skilled powertrain experts
Introducing hybrid technology
through our products such as
Aston Martin Valkyrie and
DBX Straight-Six
• Launching Racing. Green. our
new ESG strategy with ambitious
commitments to become a
world-leading sustainable
luxury automotive business
• Working towards net-zero
•
manufacturing facilities and a
30% reduction in supply chain
emissions by 2030
In our manufacturing facilities in
Gaydon and St Athan we continue
our commitments to only use
renewable electricity
• By 2025 we aim to achieve zero
• Preparing to deliver our first PHEV,
Valhalla, in 2024 ahead of the first
Aston Martin BEV in 2025
single-use plastic packaging from
our Manufacturing facilities and to
reduce our water consumption by 15%
The ten-year view
Projected increase in UNHWIs by region 2016–2026
North America +116%
Latin America +33%
Europe +106%
Africa +16%
Middle East +170%
Asia +65%
Statistics
Zero-
emissions
All new car sales in Europe by 2035
to be zero-emissions at the tail pipe
Reduce 2.5%
In 2022 new targets were set to drive
year-on-year improvements in our
sustainability performance including
reducing CO2 emissions and energy
intensity per car each year by 2.5%.
Reduced 3.9%
In 2022 Scope 1 CO2 emissions
were reduced by 3.9% per car
compared to 2021
Russia and CIS +77%
Australasia +202%
Global +125%
Source: Knight Frank Wealth Report, 2022.
Strategic Objectives
• Balance supply to demand,
• Accelerating growth with our
• Targeting minimum of
operating as a true luxury business
target to achieve approximately
40% contribution margin
• Targeting to become sustainably
free cash flow positive from 2024
• Focussing on building to order,
10,000 wholesales
on all new models
supporting strong pricing
• By 2024/25 seeking to generate
c.£2 billion revenue and
c.£500 million adjusted EBITDA
Strategic Objectives
• Transforming our products,
producing emissions-free
vehicles. First BEV targeted
for launch in 2025
– Fully electrified sports car
and SUV portfolio by 2030
• Our Racing. Green. sustainability strategy outlines our target to achieve:
– Carbon Neutral manufacturing facilities
– 100% use of renewable electricity in its manufacturing facilities
– A new goal to achieve a 2.5% year-on-year reduction in CO2 emissions from our manufacturing facilities*
– A new goal to reduce CO2 emissions intensity and energy consumption per car by 2.5% year on year*
– Enhancing our gender diversity aspiration with a new target of women in 25% of leadership positions by 2025
and in 30% of leadership positions by 2030
– A new target to improve biodiversity at our manufacturing facilities
* Scope 1 CO2 emissions.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Stakeholder engagement
Engaging our stakeholders
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.
Our Section 172 statement
which sets out how the Board
has taken into account the
interests of the Company’s
stakeholders in its decision-
making is set out on pages
106-107.
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 community.
Through effective engagement
with our stakeholders we can
understand what matters to
them and what their priorities
are. A summary of who our key
stakeholders are, what matters
to them and how we engage
with them is set out on the
following pages and is
reinforced throughout this
Report. Engagement at Board
level is highlighted with B .
Quality and safety of products
What matters to them?
•
• Car design and performance
• Brand strength
•
• Ultra-luxury customer experience
• Cost of ownership
• Environmental commitment
• Sense of community
Exclusivity and scarcity
How we engage
• New brand strategy and creative identity
• Launch of new Intensity. Driven. brand campaign
•
Bespoke customer communications and Customer
Relationship Management strategy
Investment in ultra-luxury customer journey
Innovative and engaging content across our
website and social media channels
Major brand campaigns, such as the campaign
for the DBX707 starring actor Felicity Jones
Aston Martin luxury customer magazine
Tailor-made customer events, such as car reveals
and the Valhalla global tour
Dealership events
Customer rallies and gatherings
Formula One® hospitality and events programme B
Executives actively meeting customers at leading
luxury automotive events such as Pebble Beach
and Goodwood Festival of Speed B
Global communications strategy, driving coverage
across automotive and lifestyle media
•
•
•
•
•
•
•
•
•
•
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Dealer network
Suppliers and other partnerships
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.
Our suppliers are fundamental to our business. Carefully chosen
partnerships provide us with an important source of technical
expertise and brand enhancement.
What matters to them?
•
•
•
•
Brand awareness and desire
Brand strength and Company support
Programmes to identify and generate sales opportunities
Increased customer satisfaction and retention targeting
ultra-luxury segment
Ultra-luxury product and product refresh
Return on investment
•
•
How we engage
•
CEO and Board engagement to strengthen dealer
relationships and support demand-driven strategy B
Attendance (physical or virtual) at local dealer
conferences held during the year
Strengthening of central and regional senior management,
supporting closer dealer relationship and communications
Rollout of dealer network programmes to monitor
performance aligned to growth opportunities
Implementation of standards to drive dealers to
consistent ultra-luxury behaviour
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
•
•
•
•
•
•
What matters to them?
• Responsible procurement, trust, ethics and open dialogue
• Operational improvement
• Competitiveness
• Strong relationships
• Financial performance
• Building capability and expertise
• Design and technical expertise
How we engage
• Forging stronger relationships with suppliers is a key focus,
with a desire to create partners, not suppliers
• Strategic Cooperation Agreement with Mercedes-Benz AG
securing access to technologies critical to our long-term plans
• Sponsorship of Aston Martin Aramco Cognizant F1TM team
to provide a direct global marketing platform targeting
key customers and enhancing the brand B
• Dedicated Supplier Quality Development team manages
supplier quality and performance
• Rollout of the new Responsible Procurement Policy with
our suppliers as part of our sustainability 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
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Stakeholder engagement continued
Engaging our stakeholders continued
Our people
Investors
Our people are the key to our success. Our performance
depends on our passionate, knowledgeable, experienced
and creative people.
Continued access to capital is vital to the long term performance
of our business. Our focus is to ensure investors understand our
strategy, value drivers, performance, ambition and culture and
for us to understand their priorities.
What matters to them?
• Personal development and career opportunities
• Health and safety
• Engagement
• Feeling listened to and valued
• Reward and benefits
• Equity, Diversity and Inclusion
• Environmental and social responsibility
How we engage
• C-Suite roundtables with employees B
• People Forum
• Employee Town Halls B
• Dedicated Independent Non-executive Director to gather
views of the workforce and report back to the Board
• Consultation on employee benefits
• Trade Union Business review
• Health and safety review
• Listening sessions supporting our culture and
to deep dive engagement topics B
• Aston Martin internal communications platform
and AM People newsletter
• Aston Martin’s Inclusion Network
• Local Health and Safety Committees
• Local trade union meetings
What matters to them?
• Consistent delivery of the Company’s strategy
• Financial performance relative to expectations
• Demonstrate that the Company is a responsible
and effective steward of capital
• Sustainability
• Governance and transparency
• Confidence in the leadership team
• Stability and predictability, with no surprises
How we engage
• Webcasts, presentations and meetings by the Executive
Chair, Chief Executive Officer, Chief Financial Officer and
the Investor Relations team B
• Gaydon site visit for equity analysts and large investors
held in September, to showcase our strategic progress
and priorities B
• Focused investor relations programme delivered both
remotely and in person B
• Retail shareholders engaged via direct communications,
our website, press activities, Annual Reports and
general meetings B
• For more information see our Governance Report on page 86
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Local communities and
Non-Governmental Organisations
Government and regulators
We aim to build positive relationships with local
communities and organisations interested in our business.
We engage with government and regulators given
public policy and regulatory impacts on our business.
What matters to them?
•
•
•
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
•
•
How we engage
•
Outreach programmes with local schools, including initiatives
to promote Science, Technology, Engineering and Mathematics
and careers in the automotive industry
Philanthropic activities to contribute social and societal benefits
•
• Meetings, site visits and dialogue with Non-Governmental
What matters to them?
•
•
•
•
Compliance with regulations and the law
Sustainable operations
Employment and economic impacts
Contribution to achieving public policy objectives
How we engage
• The Board is committed to proactive engagement
with key stakeholders in government at local, regional
and national level
• We aim to engage positively, constructively and consistently
through various channels, including meetings, site visits,
contributing to public policy development and responding
to consultations
Organisations including organisations representing industry,
social and environmental interests
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Business model
Creating future value
1.
Product
portfolio
•
Performance-driven product
portfolio, covering a wide
segment of the ultra-luxury
performance market
• Clear product advantage and
individuality, driving up average
selling price and margins
• Product portfolio comprises
the front-engine sports cars,
with assertive styling, dynamics
and exhilarating performance,
and an SUV range that has the
world’s fastest, most powerful
and best handling luxury SUVs
representing the height of
design, beauty and style
• In addition to core models,
Aston Martin produces and
sells exclusive limited volume
Special editions, which are
typically oversubscribed and
are highly sought after amongst
the active global community
of automotive collectors and
enthusiasts. Our Q Personalisation
service allows Aston Martin
to serve customers with a
state-of-the-art offering and
a focus on personalisation
Our sustainable approach:
Electrification of our model range
is fundamental to our product
strategy. We expect to launch
our first BEV in 2025 and will
have a fully electrified sports
car and SUV portfolio by 2030.
2.
Engineering
• In-house engineering
expertise with well-
established teams for
Product Development,
Innovation & Advanced
Technology, Vehicle
Engineering, ICE Powertrain,
ePowertrain, Software &
Electronics Technology,
Value Engineering and Project
Management & Planning
• Teams work in a cross-
functional structure to
encourage a collaborative
way of working, greater
efficiency and foster
cutting-edge innovation
• Development Process
optimised to maximise
cross-carline component
sharing and drive
sustainability, thereby
reducing complexity,
improving quality and
delivering engineering
efficiencies
• Network of strategic partners
to co-develop world-class
technology and vehicle
systems, enhance quality and
deliver technical excellence
Our sustainable approach:
We are investing in EV
technology that will be used
to electrify our model range.
We are also investing in the
use of alternative sustainable
materials within vehicles.
Our vision
To be the world’s most
desirable ultra-luxury British
performance brand
Innovation and technology
Network of carefully chosen
strategic technical partners
to co-develop leading-edge
technology and vehicle systems
which will strengthen and enrich
product excellence and create
products with unmistakable
character. The Engineering
team has implemented an
efficient Product Development
process, maximising cross-
carline component sharing
and driving sustainability.
What we put in
Brand and heritage
Iconic ultra-luxury British
brand with over 100 years of
heritage, synonymous with style,
performance and exclusivity.
A new brand positioning and
bold creative identity was
launched in 2022, highlighting
edgier, intense, performance-led
characteristics that underscore
our brand and product DNA,
generating heightened
brand awareness and salience.
Aston Martin fuses the latest
technology, time-honoured
craftsmanship and beautiful
styling to produce its critically
acclaimed luxury models.
People
World-class experienced
management team spanning
all functions from engineering,
operational to commercial,
focused on building a truly
collaborative and functional
way of working that inspires
innovation and develops a
high-performance culture.
Committed to making Aston
Martin a great place to work,
our highly skilled and flexible
manufacturing workforce is
trained by Aston Martin’s own
in-house academy, which is
dedicated to training and
up-skilling our manufacturing
technicians and strengthening
workforce skills and capability.
26
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
3.
4.
5.
Operational excellence
Go-to-market
“No one builds an Aston
The value
Martin on their own”
we create
• Quality organisation transformed
• Intensity. Driven brand creative
• Building cross functional,
Brand
and strengthened with highly
identity repositioned the
multi-project teams and
Aston Martin is an iconic brand,
experienced management hires.
Aston Martin brand to focus
consistent one-team “Ways of
that has been repositioned as
• New model launch function
on ultra-luxury positioning
Working” across the business
a high-performance driven
transformed to lead the
overall build strategy and
product introduction,
and high-performance
• Building on strong retail
that encourage collaboration
ultra-luxury brand. The Aston
and innovation across
Martin Aramco Cognizant
distribution, and an ultra-luxury
organisational boundaries
Formula One Team™, drives
• New practices have been adopted
blend of physical and digital
• Building a performance driven
greater brand awareness, which
with suppliers to stabilise the
customer experience
workforce culture and mindset,
generates top of mind preference,
supply chain and mitigate
disruption to production
• Renewed supply strategy in
place to develop strategic and
• Ultra-luxury experienced
harnessing agility, efficiency
desirability and exclusivity.
dealer partners in all key
growth markets, with new
corporate identity aligned
and speed
• Creating a fulfilling and
Customers
rewarding experience, including
By increasing desirability and
sustainable partnerships to
to ultra-luxury environment
a company-wide performance
exclusivity and using a more
improve supply chain resilience,
and product portfolio
bonus approach to drive
precise data-driven approach,
quality and performance
• Leveraging a demand-driven
performance, embedding key
we are attracting new customers
Our sustainable approach:
We are passionate in moving
towards a better future as
demonstrated by our Racing.
Green. sustainability strategy
and commitment to the Science
Based Targets Initiative (SBTi’s)
Net-Zero Standard.
business model that strengthens
finance and quality measures
from the ultra-luxury segment
the order book, supports
stronger pricing dynamics
and controls inventory
and targets reflecting the
mindset of a performance
driven ultra-luxury brand
to an existing loyal and passionate
customer base.
• Strategic marketing initiatives
• Strengthening workforce
Workforce
intended to drive new levels of
skills, knowledge and capability
Investing in people and
brand awareness, attract new
and fostering engineering
opportunity will continue
customers, increase loyalty
and exclusivity, and build
a stronger community
excellence and passion within
to shape our future. We
our corporate DNA
Our sustainable approach:
Digital customer concierge
Our sustainable approach:
We are committed to building
a workplace and culture where
services and digital touchpoints
all our people feel connected
are fundamental to the
environmentally conscious
to Aston Martin’s purpose,
where they have a voice and
ultra-luxury consumer. Aston
can develop to reach their full
Martin’s best-in-class online
potential. A diverse and inclusive
workforce enhances our culture
and our ability to deliver our
business strategy and objectives.
configurator tool enables
customers to choose the
full exterior and interior
specification of their desired
car remotely, whilst receiving
the full Aston Martin experience.
are committed to building a
culture where our workforce
feels connected and valued,
and thereby enhance our
ability to deliver our business
strategy and objectives.
Investors
We have taken significant
steps to strengthen the
business, increase profitability
and position Aston Martin
for long-term growth and
sustainable free cash flow
generation for our investors.
Sustainable business
We are committed to our
ambition on tackling climate
change and to becoming a
world-leading sustainable
ultra-luxury business.
1.
Product
portfolio
2.
Engineering
•
Performance-driven product
• In-house engineering
portfolio, covering a wide
segment of the ultra-luxury
performance market
• Clear product advantage and
expertise with well-
established teams for
Product Development,
Innovation & Advanced
individuality, driving up average
Technology, Vehicle
selling price and margins
Engineering, ICE Powertrain,
• Product portfolio comprises
the front-engine sports cars,
ePowertrain, Software &
Electronics Technology,
with assertive styling, dynamics
Value Engineering and Project
and exhilarating performance,
Management & Planning
and an SUV range that has the
• Teams work in a cross-
world’s fastest, most powerful
functional structure to
and best handling luxury SUVs
encourage a collaborative
representing the height of
design, beauty and style
• In addition to core models,
way of working, greater
efficiency and foster
cutting-edge innovation
Aston Martin produces and
• Development Process
sells exclusive limited volume
optimised to maximise
Special editions, which are
cross-carline component
typically oversubscribed and
sharing and drive
are highly sought after amongst
sustainability, thereby
the active global community
of automotive collectors and
reducing complexity,
improving quality and
enthusiasts. Our Q Personalisation
delivering engineering
service allows Aston Martin
to serve customers with a
efficiencies
• Network of strategic partners
state-of-the-art offering and
to co-develop world-class
a focus on personalisation
technology and vehicle
Our sustainable approach:
Electrification of our model range
is fundamental to our product
strategy. We expect to launch
our first BEV in 2025 and will
have a fully electrified sports
systems, enhance quality and
deliver technical excellence
Our sustainable approach:
We are investing in EV
technology that will be used
to electrify our model range.
use of alternative sustainable
materials within vehicles.
car and SUV portfolio by 2030.
We are also investing in the
3.
4.
5.
Operational excellence
Go-to-market
“No one builds an Aston
Martin on their own”
The value
we create
• Quality organisation transformed
and strengthened with highly
experienced management hires.
• New model launch function
transformed to lead the
overall build strategy and
product introduction,
• New practices have been adopted
with suppliers to stabilise the
supply chain and mitigate
disruption to production
• Renewed supply strategy in
place to develop strategic and
sustainable partnerships to
improve supply chain resilience,
quality and performance
Our sustainable approach:
We are passionate in moving
towards a better future as
demonstrated by our Racing.
Green. sustainability strategy
and commitment to the Science
Based Targets Initiative (SBTi’s)
Net-Zero Standard.
• Intensity. Driven brand creative
identity repositioned the
Aston Martin brand to focus
on ultra-luxury positioning
and high-performance
• Building on strong retail
distribution, and an ultra-luxury
blend of physical and digital
customer experience
• Ultra-luxury experienced
dealer partners in all key
growth markets, with new
corporate identity aligned
to ultra-luxury environment
and product portfolio
• Leveraging a demand-driven
business model that strengthens
the order book, supports
stronger pricing dynamics
and controls inventory
• Strategic marketing initiatives
intended to drive new levels of
brand awareness, attract new
customers, increase loyalty
and exclusivity, and build
a stronger community
Our sustainable approach:
Digital customer concierge
services and digital touchpoints
are fundamental to the
environmentally conscious
ultra-luxury consumer. Aston
Martin’s best-in-class online
configurator tool enables
customers to choose the
full exterior and interior
specification of their desired
car remotely, whilst receiving
the full Aston Martin experience.
• Building cross functional,
multi-project teams and
consistent one-team “Ways of
Working” across the business
that encourage collaboration
and innovation across
organisational boundaries
• Building a performance driven
workforce culture and mindset,
harnessing agility, efficiency
and speed
• Creating a fulfilling and
rewarding experience, including
a company-wide performance
bonus approach to drive
performance, embedding key
finance and quality measures
and targets reflecting the
mindset of a performance
driven ultra-luxury brand
• Strengthening workforce
skills, knowledge and capability
and fostering engineering
excellence and passion within
our corporate DNA
Our sustainable approach:
We are committed to building
a workplace and culture where
all our people feel connected
to Aston Martin’s purpose,
where they have a voice and
can develop to reach their full
potential. A diverse and inclusive
workforce enhances our culture
and our ability to deliver our
business strategy and objectives.
Brand
Aston Martin is an iconic brand,
that has been repositioned as
a high-performance driven
ultra-luxury brand. The Aston
Martin Aramco Cognizant
Formula One Team™, drives
greater brand awareness, which
generates top of mind preference,
desirability and exclusivity.
Customers
By increasing desirability and
exclusivity and using a more
precise data-driven approach,
we are attracting new customers
from the ultra-luxury segment
to an existing loyal and passionate
customer base.
Workforce
Investing in people and
opportunity will continue
to shape our future. We
are committed to building a
culture where our workforce
feels connected and valued,
and thereby enhance our
ability to deliver our business
strategy and objectives.
Investors
We have taken significant
steps to strengthen the
business, increase profitability
and position Aston Martin
for long-term growth and
sustainable free cash flow
generation for our investors.
Sustainable business
We are committed to our
ambition on tackling climate
change and to becoming a
world-leading sustainable
ultra-luxury business.
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Strategy at a glance
Our new era
A strategy that drives us forward
2023 is a significant year, as we
celebrate the 110th anniversary
of Aston Martin and prepare
to unleash the first of our
highly anticipated next
generation of sports cars,
further enhancing our focus on
ultra-luxury, high-performance
and driving intensity.
28
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Strategy at a glance
Achieving our strategy
Our four strategic foundations are our key strengths which underpin our strategy and future growth ambitions.
Brand
Aston Martin is an iconic
global brand with a unique
position transcending ultra-
luxury and high-performance
underpinned by a strong
and loyal customer base.
Product Innovation
A breathtaking and comprehensive
core portfolio across front-
engine, SUV and mid-engine,
enhanced by a strategically-
aligned Specials programme.
Sustainability
Deepening the integration of
sustainability into our business
and improving our sustainability
performance through our
Racing. Green. strategy.
Team
Talented and skilful team with
experience and understanding
of the ultra-luxury automotive
sector, focused on building
a collaborative and cross-
functional way of working.
Utilise the new Intensity. Driven. brand creative identity and Formula One® platform to
elevate and reposition Aston Martin as an ultra-luxury high-performance brand.
B
r
a
n
d
Create ultra-luxury services and experiences that are seamless, personalised and unique.
Deliver products that create desire and excitement, clear product
advantage and individuality.
P
r
o
d
u
Optimise the product development process to maximise cross-carline
component sharing, reduce complexity and drive engineering efficiencies.
c
t i
n
Key tasks to realise our
strategic goals and deliver
our vision to be the most
desirable ultra-luxury
British performance brand
S ustain a bility
n
o
v
a
ti
o
n
Build a strong network of strategic engineering partners to
co-develop world-class technology and vehicle systems,
enhance quality and deliver technical excellence.
Drive innovation to be a technologically advanced
performance automotive brand.
Deliver operational excellence efficiency, sustainability and agility.
t
c
u
d
o
r
P
Deliver quality assurance in production and aftersales.
Maintain a resilient, stable and structured supply chain and logistics framework.
Build a strong network of strategic supplier partners to minimise supply chain
disruption and achieve cost and resource efficiencies.
Embed the new ESG strategy to realise our ambition to become a world-leading
sustainable ultra-luxury business.
Increase the culture of inclusion leveraging the Aston Martin values, building awareness through
education and measuring through qualitative data.
Improve colleague engagement and alignment by becoming a “Great Place to Work” by 2025.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
T ea m
30
Finance
ESG
B
r
a
n
d
T ea m
P
r
o
d
u
c
t i
n
n
o
v
a
ti
o
n
S ustain a bility
Performance targets
Finance
•
•
•
Medium-term target
of wholesale volumes
of c.10,000 units
Grow revenue to
c.£2bn by 2024/25
Achieve c. £500m adjusted
EBITDA by 2024/25
•
•
All new products to
deliver contribution
margins of 40%+
Next-generation
sports cars delivery
from 2023
•
• PHEV commencing
delivery from 2024
First BEV targeted
for launch in 2025
Fully electrified
sports car and SUV
portfolio by 2030
•
• Sustainability targets to be set in
line with our commitment to the
Science Based Targets initiative
• New goal to achieve a 2.5%
year-on-year reduction in
CO2 emissions from our
manufacturing facilities
• New goal to reduce CO2 emissions
intensity and energy consumption
per car by 2.5% year on year
ESG
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.
Impactful new brand creative identity
Intensity. Driven. has heightened
brand desirability.
Aston Martin Aramco Cognizant
Formula OneTM Team continues to connect
the brand with engaged audiences and
to raise consideration in key markets.
V12 Vantage and DBS 770 Ultimate
iconic finale models sold out.
t
c
u
d
o
r
P
We have the most exciting and compelling
product pipeline coming to market,
including a new generation of front-
engine sports cars from 2023.
We have strong underlying year-on-year
core gross margin progression, aligned
with our ultra-luxury strategy.
We have accelerated progress towards
the Racing. Green. goals, embedding
sustainability throughout the business.
We have continued our commitment
to the SBTi.
We have made changes to our organisational
structure and operational improvements
focused on enhancing quality and
overall efficiencies.
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Strategy in action
A new brand positioning
This brand’s new era takes flight
In July 2022, Aston Martin
launched a bold new creative
brand strategy and global
marketing campaign to further
accelerate our growth amongst
new audiences. Celebrating
the Company’s position as
makers of the most exquisitely
addictive performance cars,
the new creative centres on
the brand idea Intensity. Driven.
The radical redesign includes
a contemporary update to
the iconic wings, created by
our world-renowned design
function in collaboration
with acclaimed British art
director and graphic
designer Peter Saville.
“Retaining the elegance and sophistication that
our brand and products are revered for worldwide,
this emotionally-led creative direction dials up the
bolder, edgier and more intense characteristics
that have always underscored Aston Martin.”
Renato Bisignani
Head of Global Marketing and Communications
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Strategy in action continued
New customer penetration
We make sure that when all eyes are
on us there is an immediate connection
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
The brand’s presence at the
pinnacle of motorsport with
the sponsorship of Aston Martin
Aramco Cognizant Formula One™
Team is shining a spotlight
on Aston Martin’s high-
performance credentials and
heightening brand desirability
and product familiarity, as
the sport enjoys growing
popularity worldwide.
2022 research shows that more
than 95% of US customers feel
Aston Martin’s presence in
F1®️ made them more likely
to consider the brand. More
than 70% of Vantage F1®️
Edition owners are new to the
Aston Martin brand, further
demonstrating the positive
impact that Aston Martin’s
global presence in the sport
is having on its brand image
and appeal to new customers.
Interest in F1 is strong and strengthening
amongst our US customers (%)
66
Very interested
Fairly interested
Not particularly interested
Not at all interested
23
8
3
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Strategy in action continued
High performance products
Another
accolade for
world-beating
Vantage
Through the incredible
performance of our Aston Martin
Racing partner team TF Sport,
2022 saw the Aston Martin
Vantage GTE claim its 11th FIA
World Endurance Championship
title, including a thrilling victory
for our British-built race car at
the 90th running of the 24 Hours
of Le Mans, in the GTE-Am class.
The victory further reinforces
Aston Martin’s performance
credentials and is testament to
the Vantage production model
from which the car is derived.
11th
championship trophy win
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World Endurance Championship
winning driver ‘Ben Keating’.
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Strategy in action continued
100th anniversary Grand Prix
Built on an
unforgettable legacy
A century on from its racing
debut, in July Aston Martin’s
original Grand Prix car
roared back to the French
Grand Prix for a thrilling
celebratory lap. Four-time F1®️
world champion Sebastian
Vettel had the chance to pilot
TT1 – affectionately nicknamed
‘Green Pea’ – around Circuit
Paul Ricard, 100 years on from
the storied car taking to the
road circuit of Strasbourg
for a 60-lap, 800 km race
that ignited Aston Martin’s
passion for top-flight
international competition.
“ The racing spirit and will to win is
something that defines Aston Martin,
and it’s fantastic to celebrate it.”
Sebastian Vettel
Aston Martin Aramco Cognizant
Formula One™ Team
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Strategy in action continued
A thrilling product line-up
2022 marked the start of an
exciting new product line-up
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
All 249 examples of the
V12 Vantage Roadster,
which combines the thrilling
performance of the most
powerful Aston Martin
Vantage ever made with
the freedom of roof down
driving were secured by
customers before the
model’s reveal.
Similar enthusiasm was
generated for the instantly
iconic DBR22, which was
declared Best of Show at
the influential Chantilly Arts
et Élégance Richard Mille.
Priced at £1.75m and with the
orderbook closed, deliveries
are expected to start in 2023.
2023, Aston Martin’s 110th
anniversary, is a significant
year as we prepare to
unleash the start of
our highly-anticipated
next generation of sports
cars, which will further
enhance Aston Martin’s
focus on ultra-luxury,
high-performance and
driving intensity.
Building on the strong
momentum from new
introductions in 2021,
Aston Martin continues to
thrill drivers with breath-taking
new products.
2022 saw the launch of the
game-changing DBX707, our
market-leading and critically-
acclaimed high-performance
luxury SUV.
This was followed by the
highly desirable final edition
V12 Vantage. The final edition
of an iconic bloodline of
outstanding two-door British
V12 sportscars, the model
enjoyed unprecedented
demand with all 333 units
fully allocated prior to its
global release.
Our continued development
of exclusive Specials was also
showcased to acclaim at some
of the world’s most prestigious
luxury automotive events.
At the Pebble Beach Concours
d’Elegance in August, we
introduced two spectacular
new models – V12 Vantage
Roadster and the ultra-
exclusive DBR22, along
with showcasing the latest
development updates to
our hybrid supercar Valhalla.
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Strategy in action continued
Supporting charities
An icon for good
An Aston Martin DB5 replica
stunt car featured in No Time
To Die raised £2.75m for good
causes in a charity auction at
Christie’s to celebrate 60 years
of the James Bond films.
One of three special Aston
Martin models included
in the multi-million-pound
charity auction, the replica
DB5 donated by Aston Martin
Lagonda was the star lot on
the night, accelerating beyond
the auctioneer’s estimate.
The proceeds of the DB5
auction benefited The
Prince’s Trust in its work with
young people; The Prince of
Wales’s Charitable Fund in
support of charities assisting
serving and former members
of the UK Intelligence Agencies;
and three charities supporting
serving and former members
of the UK Special Forces.
£2.75m
raised by AML for charity
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Key performance indicators
Measuring our performance
Financial
Legend
Revenue
Wholesale volumes
Operating
profit/(loss)
Adjusted EBITDA
Brand
Product
Innovation
Sustainability
Team
(£’m)
2022
2021
(Units)
1,381.5
1.095.3
2022
2021
6,412
6,178
2020
611.8
2020
3,394
(£’m)
2022
2021
2020
(£’m)
(141.8)
(76.5)
2022
2021
190.2
137.9
(322.9)
2020
(70.1)
Description
Revenue measures the
appeal of our brands,
our ability to build and
sustain brand equity and
increase market share
through product expansion
Definition
Revenue is defined in
note 2 of the Financial
Statements
Remuneration linkage
None
Target
The Company expects
to generate revenue of
c. £2bn by 2024/25
Description
This measures sales from
the Company to its dealers
and direct customers
Definition
Number of vehicles,
including Specials, sold by
the Company to its dealers
and direct customers
Remuneration linkage
Represents 7.5% of the
Group scorecard of
performance measures
for the annual bonus
Target
The Company expects
to generate medium-term
wholesale volumes of
c.10,000 units
Description
Operating profit/(loss)
measures our actual,
reported operating
profitability
Definition
Net revenue, less Cost
of Sales, less all other
operational expenses
(See note 4 of the
Financial Statements)
Remuneration linkage
None
Target
Not applicable
Description
This measures our underlying
operating profitability,
stripping out the impact
of adjusting items from
operating profit/(loss) and
interest, tax, depreciation
and amortisation
Definition
Adjusted EBITDA is
defined in note 33 of
the Financial Statements
Remuneration linkage
Represents 50% of the
Group scorecard of
performance measures
for the annual bonus
Target
The Company expects to
generate c. £500m adjusted
EBITDA by 2024/25
Link to strategy
Link to strategy
Link to strategy
Link to strategy
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Non financial
Net debt
Net debt to
adjusted EBITDA
Free cashflow
Quality – customer
perception audit
Health & Safety -
accident frequency
rate
(£’m)
2022
2021
2020
(‘adjusted leverage’)
(£’m)
(CPA) quality score
(AFR)
765.5
891.6
726.7
2022
2021
2020
4.0
2022
2021
2020
6.5
NM
(298.8)
(123.2)
(539.3)
2022
2021
2020
*
NM
NM
2022
2021
2020
0.53
1.01
1.44
Description
Net debt measures
the amount of total
indebtedness at the
Company, net of any
cash and cash equivalents
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)
Remuneration linkage
None
Target
None
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
Definition
Net debt divided by
adjusted EBITDA over
the last 12 months
(See note 33 of the
Financial Statements)
Remuneration linkage
None
Target
Not applicable
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)
Remuneration linkage
Represents 20% of the
Group scorecard of
performance measures
in the annual bonus
Target
The Company expects
to turn free cashflow
positive by 2024
Description
The AFR measures work
related recordable injuries
or illnesses (as defined by
the Occuptional Health
and Safety Administration)
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
Remuneration linkage
None
Target
Ambition for continuous
year-on-year reduction
* Significant progress
made but stretching
target level not achieved.
Description
This is an internal measure
of the quality of each
completed car at the end
of the production line
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
Remuneration linkage
Quality measures,
including CPA score,
represent 15% of the
Group scorecard of
measures for the
annual bonus
Target
Ambition for continuous
year-on-year improvement
in CPA scores for GT/
sports cars and DBX
Link to strategy
Link to strategy
Link to strategy
Link to strategy
Link to strategy
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Chief Financial Officer’s Statement
Making strong progress
“I am pleased with how we ended
the year and the progress we
have made towards meeting
our medium-term targets.”
During 2022 the Company continued to make strong progress
towards meeting its medium-term financial targets. Despite
a challenging operating environment, our full year financial
results are in line with expectations, driven by strong demand,
record pricing and the launch of new products with enhanced
profitability. The equity capital raise completed in September
enabled us to deleverage the balance sheet and the thrilling
new products we plan to launch in 2023 and 2024 will further
enhance our growth.
We enjoyed strong demand across the product portfolio, which
resulted in wholesale volumes increasing by 4%, driven by strong
volume growth in Q4. Our ultra-luxury strategy is supporting
improved pricing power and record high total ASPs of more than
£200k in 2022. This was a key driver of revenue growth, which
increased by 26% to £1.4bn.
This growth was delivered in a complex operating environment,
particularly impacted by supply chain and logistics disruptions,
which limited our ability to meet this strong demand. Moreover,
we incurred material levels of supply chain recovery costs to
mitigate these disruptions and support customer demand,
particularly for the DBX707. Including these costs, gross profit
improved by 31% year-on-year to £451m and gross margin
increased to 33%, driven by a stronger contribution from core
models, including the V12 Vantage and DBX707, offset by a
weaker contribution from Specials, related to a transitional
shift in product mix.
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“The equity capital raise enabled us
to strengthen our financial position,
reduce our debt and support our
target to become sustainably free
cash flow positive from 2024.”
Adjusted EBITDA increased by 38% year-on-year to £190m,
delivering 120 basis points of margin expansion. Although this
included foreign exchange tailwinds, these were more than offset
by higher brand and marketing initiatives to support the ongoing
elevation of the Aston Martin brand.
In summary, I am pleased with how we ended the year and the
progress we have made towards meeting our medium-term
targets. 2023 is poised to be a year where our transformation
accelerates – particularly in the second half of the year – as we
start to deliver our next generation of sports cars, all targeting
a 40%+ contribution margin.
Free cash outflow of £299m (2021: £123m) included a significant
increase in capital expenditure related to future product launches,
as well as adverse movements in working capital, which were
impacted by supply chain and logistics disruptions.
In the second half of the year we completed a £654m equity
capital raise in order to strengthen our financial position, reduce
our debt and support our target to become sustainably free cash
flow positive from 2024. We also welcomed PIF as a new anchor
shareholder. Using a portion of the proceeds from the capital
raise, we completed a tender offer for a total consideration of
$200m, for a partial repurchase of our US dollar-denominated
Senior Secured Notes and Second Lien Split Coupon Notes.
Supported by the capital raise, our year-end cash balance was
much improved at £583m, with reduced net debt of £766m,
despite a £156m adverse non-cash revaluation impact resulting
from the weaker GBP versus the US dollar.
This is my first letter to you as Chief Financial Officer of Aston
Martin Lagonda, having joined the business in May. I have been
impressed by the passion and commitment of the teams here,
the desire of all our people to ensure the Company’s success
and the renewed excitement about the opportunity ahead of us.
I will continue to play my part, alongside the rest of the Board, in
executing our strategy to help deliver value to all of our stakeholders.
Doug Lafferty
Chief Financial Officer
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Financial Review
Financial Review
Financial Highlights
• Continued strong demand across all product lines with c.80%
of current range of GT/Sports cars sold out for 2023 ahead
of upcoming launches and DBX order book into Q3 2023
Despite the impact of supply chain and logistics disruptions,
most notably in Q2 and Q3, wholesale volumes in 2022 grew
in line with revised range:
– Wholesale volumes increased by 4% year-on-year to 6,412
•
•
•
Successfully completed $200m debt tender in October 2022
Year-end cash of £583m (2021: £419m); Net debt of £766m
(2021: £892m), including a negative £156m impact of non-cash
FX revaluation of US dollar-denominated debt as the GBP
weakened significantly against the US dollar during the year
Financial Review
Sales and revenue analysis
(2021: 6,178)
• Volumes included more than 3,200 DBXs, driven by
Number
of vehicles
FY-22
FY-21 % change
Q4-22
Q4-21 % change
– Foreign exchange tailwinds for ASPs due to GBP weakness
APAC
launch of the DBX707 which represented more than 50%
of overall DBX volumes
– Q4 wholesale volumes of 2,352 increased by 22%
year-on-year (Q4 2021: 1,928)
• Revenue increased by 26% year-on-year to £1.4bn and Q4
revenue increased by 46% year-on-year to £524m driven by:
– Strong pricing dynamics and favourable mix in the core portfolio:
• FY 2022 core ASP of £177k, up 18% from £150k in FY 2021
•
Q4 2022 core ASP of £184k, up 21% from £152k in Q4 2021
– 80 Aston Martin Valkyrie programme deliveries during 2022,
including 36 in Q4
versus major currencies
• Gross profit increased by 31% year-on-year to £451m
(2021: £344m) and gross margin increased to 33% (2021: 31%),
reflecting improved pricing and gross margin for core models,
partially offset by the impact of lower year-on-year gross
margin within Specials. In addition, year-on-year gross margin
performance was impacted by approximately £20 million of
supply chain recovery costs incurred in the second half of the year
Adjusted EBITDA increased by 38% year-on-year to £190m,
primarily driven by higher revenue and gross profit, partially
offset by higher operating expenses including reinvestments
into brand, marketing and new product launch activities, as
well as inflationary impacts on general costs
Operating loss of £142m included a £96m year-on-year increase in
depreciation and amortisation, primarily driven by higher year-on-
year Aston Martin Valkyrie programme deliveries and, to a lesser
extent, by accelerated amortisation of capitalised development
costs ahead of the next generation of sports car launches
Loss before tax of £495m was materially impacted by a £156m
negative non-cash FX revaluation of US dollar-denominated
debt as the GBP weakened significantly against the US dollar
during the year
Net cash inflow from operating activities of £127m. Free cash
outflow of £299m included:
– Capital expenditure of £287m, primarily related to new model
development including the next generation of sports cars
– Net cash interest payments of £139m
Positive free cash flow in Q4 of £37m, driven by strong
profitability and cash inflows from working capital following
the impact of supply chain and logistics disruptions, earlier
in the year
•
•
•
•
•
Wholesale
6,412
6,178
4%
2,352
1,928
22%
Core
(excluding
Specials)
By region:
6,323
6,080
4%
2,313
1,886
23%
UK
1,110
1,109
Americas
1,980
1,984
EMEA
(ex. UK)
1,508
1,814
1,270
1,815
0%
0%
19%
0%
416
828
723
385
By model:
Sports
GT
SUV
Other
Specials
1,833
1,271
3,219
0
89
1,479
24%
1,589
(20%)
614
306
3,001
7%
1,393
11
98
n.m.
(9%)
0
39
381
546
372
629
520
546
815
5
42
9%
52%
94%
(39%)
18%
(44%)
71%
n.m.
(7%)
Note: Sports includes Vantage, GT includes DB11 and DBS, SUV includes DBX
and Other includes prior generation models.
Despite a challenging and uncertain operating environment,
characterised by the war in Ukraine, supply chain and logistics
disruptions, inflationary pressures, as well as intermittent
COVID-19 lockdowns in China, total wholesales increased by
4% year-on-year, driven by strong demand across the portfolio.
Total wholesales of 6,412 units included 89 Specials in 2022,
comprised of 80 Aston Martin Valkyrie programme vehicles and
9 other vehicles. This compared to 6,178 total wholesales, which
included 98 Specials, in 2021.
Given significant supply chain and logistics disruptions, most
notably in Q2 and Q3, which delayed the Company’s ability to
meet customer demand, the fourth quarter represented the
peak of volumes for the year, as expected.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Total wholesales of 2,352 units in Q4 increased by 70% compared
to Q3 and by 22% year-on-year. The year-on-year growth in Q4
wholesales was primarily driven by significantly higher DBX
volumes, supported by strong customer demand and strong
operational execution, as the Company actively managed the
supply chain and logistics disruptions which had restricted its
ability to meet demand earlier in the year. This was partially
offset by lower year-on-year wholesales in China, following
the strong growth achieved in Q4 2021 and, to a lesser extent,
by the COVID-19 lockdowns during the quarter.
Aligned with its ultra-luxury strategy, the Company continues
to operate a demand-led operating model. However, given
the timing of deliveries towards the end of Q4, total wholesale
volumes were temporarily ahead of retail volumes at the end
of 2022. Many of those vehicles were retailed in early Q1, and
the Company expects to see retails outpace wholesales in 2023.
Geographically, wholesale volumes remained well balanced
across all regions, reflecting the broad customer appeal of
the Company’s product portfolio. In addition, supply chain
disruptions throughout the year, most notably in Q2 and Q3,
impacted our geographic and product mix, as well as our ability
to meet strong customer demand.
The Americas and APAC were the largest regions, collectively
representing approximately 60% of total volumes. Despite
geopolitical challenges, EMEA wholesales increased by 19%
year-on-year, driven by strong customer demand for the
DBX707 and higher year-on-year Sports volumes.
Q4 revenues increased by 46% year-on-year to £524m
(Q4 2021: £359m), driven by strong ASP growth and higher
wholesale volumes, most notably DBX. Total Q4 ASP of £213k
(Q4 2021: £175k) increased by 22% year-on-year, reflecting
higher Aston Martin Valkyrie deliveries (36 in Q4 2022, compared
to 10 in Q4 2021) and higher core ASPs. Core Q4 ASP of £184k
(Q4 2021: £152k) increased by 21% year-on-year driven by strong
pricing and mix dynamics, as well as foreign exchange tailwinds.
Pricing dynamics were strong throughout 2022, aligned with the
Company’s ultra-luxury strategy. This included price increases
implemented across the range during late 2021 and in the first half
of 2022, reflecting the strong pricing power of the Aston Martin
brand. ASPs also benefited from favourable mix, as well as lower
incentive support.
Summary income statement and analysis
£m
Revenue
Cost of sales
Gross profit
FY-22
FY-21
Q4-22
Q4-21
1,381.5 1,095.3
524.3
358.9
(930.8)
(751.6)
(359.8)
(237.1)
450.7
343.7
164.5
121.8
Gross margin %
32.6%
31.4%
31.4%
33.9%
Operating expenses1
(568.6)
(418.0)
(154.2)
(131.0)
of which depreciation
& amortisation
Adjusted operating
(loss)/profit2
Adjusting operating items
(23.9)
(2.2)
Operating (loss)/profit
(141.8)
(76.5)
(117.9)
(74.3)
10.3
(3.7)
6.6
(9.2)
0.9
(8.3)
308.1
212.2
100.1
74.8
Revenue by category
£m
Sale of vehicles
Sale of parts
Servicing of vehicles
Brand and motorsport
Total
FY-22
FY-21 % change
1,291.5 1,005.4
28%
70.8
9.3
9.9
65.5
10.6
13.8
8%
(12%)
(28%)
Net financing
(expense)/income
of which adjusting
financing items
(353.2)
(137.3)
9.7
(16.9)
(20.1)
34.1
(39.1)
21.2
(Loss)/profit before tax
(495.0)
(213.8)
16.3
(25.2)
1,381.5 1,095.3
26%
Taxation
(32.7)
24.5
(26.0)
(7.5)
Revenues increased by 26% year-on-year to £1.4bn (2021: £1.1bn),
primarily due to strong wholesale average selling price (ASP)
growth and, to a lesser extent, due to higher wholesale volumes.
Total ASP of £201k (2021: £162k) – a record level for Aston Martin
– increased by 24% year-on-year, reflecting higher Aston Martin
Valkyrie deliveries (80 in 2022, compared to 10 in 2021) and higher
core ASPs. Core ASP of £177k (2021: £150k) increased by 18%
year-on-year driven by strong pricing and mix dynamics, as well
as foreign exchange tailwinds.
(Loss)/profit for the period
(527.7)
(189.3)
(9.7)
(32.7)
Adjusted EBITDA1,2
190.2
137.9
110.4
65.6
Adjusted EBITDA margin
13.8%
12.6%
21.1%
18.3%
Adjusted (loss)/profit
before tax1
(451.0)
(245.7)
59.1
(47.3)
EPS (pence)
(124.5)
(58.6)
Adjusted EPS (pence)2
(114.1)
(70.9)
1. Excludes adjusting items.
2. For definition of alternative performance measures please see Appendix.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Financial review continued
Financial review continued
In 2022, gross profit of £451m increased by £107m, or 31%,
year-on-year. This translated to a gross margin of 33%, a
year-on-year expansion of approximately 120 basis points.
The gross margin expansion was primarily due to higher
year-on-year gross margin within the core range of vehicles,
supported by the introduction of new products – most notably the
V12 Vantage and DBX707 – as well as foreign exchange tailwinds.
This was partially offset by lower year-on-year gross margin
within Specials driven by higher Aston Martin Valkyrie programme
deliveries related to Nebula Project AG during 2022. As disclosed
on 22 June 2021, the Company has filed for civil legal proceedings
against Nebula Project AG and criminal proceedings against its
board members, after it became aware that Nebula had taken
deposits from its customers and failed to pass them on to the
Company. Aston Martin has continued to work with its affected
customers to ensure they receive their Aston Martin Valkyrie
vehicles despite Nebula’s actions.
In addition, year-on-year gross margin was negatively impacted
by higher supply chain and logistics costs, including approximately
£20m of incremental supply chain recovery costs in the second
half of the year.
Q4 gross profit of £165m increased by £43m, or 35%, year-on-year.
This translated to a gross margin of 31%, a decline of approximately
250 basis points year-on-year, as lower gross margin within Specials
and higher manufacturing and logistics costs were partially offset
by higher year-on-year gross margin from the core range of
vehicles and, to a lesser extent, from higher overall core volumes.
The Company continues to target a 40%+ gross margin from
its future products.
In 2022, adjusted EBITDA of £190m increased by £52m year-on-
year, or by 38%. This translated to an adjusted EBITDA margin of
14%, an increase of approximately 120 basis points compared to the
prior year and within the revised guidance range of approximately
100-300 basis points of year-on-year margin expansion.
Q4 adjusted EBITDA of £110m increased by £45m year-on-year,
or by 68%. This translated to an adjusted EBITDA margin of 21%,
an increase of approximately 280 basis points compared to the
prior year period, driven by strong operating leverage.
The operating loss of £142m compared to a £77m loss in the prior
year. The £65m year-on-year change was primarily driven by:
•
•
A £96m increase in depreciation and amortisation charges,
principally related to Aston Martin Valkyrie deliveries and
accelerated depreciation ahead of the next generation of
sports cars starting in 2023
Increased investment in brand and product launches such as the
DBX707, V12 Vantage and Valhalla, marketing initiatives at events
such as the Goodwood Festival of Speed and Pebble Beach
•
Higher general costs, including inflationary pressures, to
support the Company’s future growth
These factors were partially offset by:
•
Higher year-on-year gross profit, as described above,
which included a £31m benefit to operating profit from
exchange rate movements
Adjusting operating items of £24m (2021: £2m) predominantly
related to the closure to future accrual of the pension scheme
disclosed at the Full Year 2021 results, ERP implementation costs,
as well as one-time expenses related to the change of CEO and
appointment of other new executives.
Net adjusted financing costs of £333m increased significantly
from £171m in the prior year, reflecting the revaluation of the
US dollar-denominated Senior Secured Notes giving a non-cash
FX charge of £156m (2021 included a £12m FX charge). The £20m
adjusting finance charge related to costs associated with the
equity capital raise and debt tender, partially offset by the fair
value movements of outstanding warrants (2021: £34m adjusting
finance credit).
The loss before tax was £495m (2021: £214m loss) and the loss
for the period was £528m (2021: £189m loss), both significantly
impacted by the revaluation of the US dollar-denominated Senior
Secured Notes.
The tax charge on the adjusted loss before tax was £33m. The
effective tax rate at (7.3)% differs from the 19% standard UK tax
rate mainly due to movements in unprovided deferred tax and
derecognition of deferred tax related to losses, accelerated
capital allowances and a restriction on the amount of interest
that can be deducted for tax purposes. Tax on adjusting items
was nil as a result of the unprovided deferred tax.
The total share count at 31 December 2022 was 699 million
following the placing of new ordinary shares to PIF, as well as the
4-for-1 rights issue completed in September 2022. The weighted
average number of shares in 2022 was 425 million. 28.8 million
shares in relation to the 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 during 2023.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Net cash inflow of £157m resulted in a closing cash balance of
£583m as at 31 December 2022 (31 December 2021: £419m). Net
debt of £766m, a £126m reduction from £892m at the end of 2021,
included a £156m negative impact of non-cash FX revaluation of
US dollar-denominated debt as the pound weakened against the
US dollar during the year.
£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
31 Dec-22 31 Dec-21
(1,104.0) (1,074.9)
(38.2)
(19.7)
(107.1)
(114.3)
(99.8)
(103.4)
(1,349.1) (1,312.3)
583.3
418.9
0.3
1.8
(765.5)
(891.6)
1. US$ notes of £1.1bn equivalent (First Lien of £935m at 10.5% interest maturing
in November 2025; Second Lien of £169m 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 two years for the Second Lien and three
years for the First Lien.
Cash flow and net debt
£m
FY-22
FY-21
Q4-22
Q4-21
Cash generated from
operating activities
Cash used in investing activities
(excl. interest)
127.1
178.9
184.0
27.5
(286.9)
(185.2)
(73.5)
(49.0)
Net cash interest paid
(139.0)
(116.9)
(73.7)
(62.6)
Free Cash (outflow)/inflow
(298.8)
(123.2)
36.8
(84.1)
Cash inflow/(outflow)
from financing activities
(excl. interest)
456.2
51.5
(210.5)
7.5
Increase/(decrease) in net cash
157.4
(71.7)
(173.7)
(76.6)
Effect of exchange rates on
cash and cash equivalents
7.0
1.2
(14.8)
0.3
Cash balance
583.3
418.9
583.3
418.9
Net cash inflow from operating activities was £127m
(2021: £179m). The year-on-year change in cash flow from
operating activities was primarily due to adverse movements
in working capital. Cash flow from operating activities in 2022
included a £15m outflow related to movements in working capital,
compared with a £56m inflow in 2021. The largest movement in
2022 was a £82m increase in trade and other payables, principally
associated with higher accruals related to future product rollout
plans, which was partially offset by a £78m increase in inventories,
which was significantly impacted by supply chain and logistics
disruptions, most notably in Q2 and Q3.
Demand for Specials remained strong throughout the year, with
deposit intake for Valhalla and the Aston Martin Valkyrie Spider.
However, this was offset by higher deliveries of Aston Martin
Valkyrie programme vehicles, resulting in a net £18m outflow
from deposits during the year.
As expected, the Company generated a significant improvement
in cash flow from operating activities in Q4, driven by a combination
of strong profitability and cash inflows from working capital. Cash
inflow from operating activities was £184m in Q4 (Q4 2021: £28m).
Capital expenditure was £287m in 2022, an increase of £102m
year-on-year, with investment focused on the future product
pipeline, particularly the next generation of sports cars, as well
as development of the Company’s electrification programme.
Free cash was a net outflow of £299m, compared to a £123m
outflow in 2021. This was primarily due to the year-on-year
increase in capital expenditure, as well as the changes in
working capital-related cashflows described above.
Cash inflow from financing (excluding interest) of £456m
(2021: £52m) included £654m of gross proceeds from the
equity capital raise, partially offset by a £187m net cash outflow
related to the $200m debt tender, which was completed in Q4.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Environment, social and governance
Racing. Green.
We have set ourselves
an ambition to be a world-
leading sustainable ultra-
luxury automotive business.
This ambition is a key pillar
of our corporate strategy and
the central objective of our
sustainability strategy Racing.
Green. Our strategy is built
on five core priority areas
that reflect Aston Martin’s
approach to sustainability,
aligned with the UN’s
Sustainable Development Goals,
and a deeper understanding
of the priorities that our
customers, employees and
other stakeholders care about.
These five areas are: tackling
climate change; creating a
better environment; investing
in people and opportunity;
exporting success; and delivering
the highest standards.
52
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
2022 highlights
3.9%
fall in CO2 emissions per car manufactured
in 2022 compared to 2021 (tCO2e)*
7.5%
fall in water consumed per car
manufactured between 2021 and 2022 (m3)
100%
renewable electricity powering
all our UK operations
79%
increase in apprentices completing Aston Martin’s
industry-leading apprenticeship programme
12.2%
decrease in electricity used
£2.75 million
raised for charities including The Prince’s Trust
10.2%
increase in proportion of waste recycled
*Scope 1 CO2 emissions
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Environmental, social and governance continued
Sustainability strategy
In 2022, we intensified and
accelerated our Racing. Green.
strategy. Our updated targets
now include:
• Carbon Neutral
manufacturing facilities;
• 100% use of renewable
electricity in our
manufacturing facilities;
• a new goal to achieve a 2.5%
year-on-year reduction in
CO2 emissions from our
manufacturing facilities*;
• a new goal to reduce CO2
emissions intensity and
energy consumption per
car by 2.5% year-on-year*;
• zero waste diverted to
landfill from our
manufacturing facilities;
• enhancing our gender
diversity aspiration with a
new target of women in 25%
of leadership positions by
2025 and in 30% of leadership
positions by 2030; and
• a new target to improve
biodiversity at our
manufacturing facilities.
1 2
Tackling
climate change
Creating a better
environment
Transforming products
• Next generation Plug-In Hybrid
Electric Vehicle (PHEV) commencing
delivery in 2024
• First Battery Electric Vehicle (BEV)
targeted for launch in 2025
• Fully electrified sports and SUV
portfolio by 2030
Minimising impacts
• Zero single-use plastic packaging waste
from our manufacturing facilities by 2025
• Zero waste to landfill from our
•
manufacturing operations
15% reduction in water consumption at
our manufacturing operations by 2025
(compared with 2019)
Maximising sustainable materials
• Continue to work with supply chain
partners to enable the use of more
sustainable materials
Boosting biodiversity
• Improve biodiversity at our
manufacturing facilities
Transforming production
• Carbon Neutral manufacturing facilities
• Net-Zero manufacturing facilities
by 2030
• 100% use of renewable electricity
in our manufacturing facilities
• Reduce CO2 emissions from our
manufacturing operations by
2.5% year-on-year*
• Reduce CO2 emissions intensity
and energy consumption per car
by 2.5% year-on-year*
• Implement ISO 50001 Energy
Management Systems at key
manufacturing facilities by 2025
• 30% reduction in supply chain CO2
emissions by 2030 (compared to 2020)
• Net-zero across our supply chain by 2039
* Scope 1 CO2 emissions.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
3 4 5
Investing in people
and opportunity
Exporting
success
Delivering the
highest standards
Working with government
• Continue to work with the UK
Government to showcase the very
best in advanced British engineering
and design worldwide
• Maintain engagement with government
to support sustainable growth across
the UK automotive sector, including
expansion of the UK-based supply chain
• Help achieve the UK Government’s aim
to increase UK exports to £1 trillion per
year by 2030
Embracing industry best practice
Continue commitment to the
•
Science Based Targets initiative
Continue commitment to the Task Force
on Climate-related Financial Disclosures
•
• Understand and engage in emerging
areas of sustainability best practice
Pioneering leadership
•
Understand and engage in emerging
areas of best practice such as the
Science Based Targets Network for
Nature and the Taskforce on Nature-
related Financial Disclosures
Employee wellbeing
•
• Continue to deliver industry-leading
Target zero accidents
initiatives to support employee wellbeing
Advancing diversity and inclusion
• Women in 25% of leadership positions
by 2025 and in 30% of leadership
positions by 2030
• Work with ‘Racing Pride’ to promote
LGBTQ+ inclusion
• Continue commitment to ‘Valuable 500’
and the UK Disability Confident scheme
Growing talent and raising aspirations
• Sustain new apprenticeship recruitment
• Update skills and training to support
transition to electric vehicle production
• Continue commitment to promoting
Science, Technology, Engineering and
Mathematics (STEM)
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Environmental, social and governance continued
Tackling climate change
Tackling climate change
UN Sustainable Development Goals
Overview
During the year, we committed
to accelerating action on
climate change. We remain on
course to deliver our planned
portfolio of PHEVs and BEVs.
been completed or are
underway. Work to install
solar photovoltaic (Solar PV)
generation at our manufacturing
facilities continues.
Several initiatives to reduce
CO2 emissions across our
manufacturing facilities
and supply chain have
We are in the process of
establishing a pathway
to reduce CO2 emissions
towards our net-zero targets.
Highlights
3.9%
fall in CO2 emissions per car manufactured
in 2022 compared to 2021 (tCO2e)*
100%
renewable electricity powering all our UK operations
12.2%
decrease in electricity used
* Scope 1 CO2 emissions.
A new destination: We are on a journey
towards transforming our products.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Energy efficiency:
In 2022, we reduced
electricity use by 7.5%
at our St Athan site.
Our goals
Transforming products:
• First PHEV commences
delivery in 2024
• First BEV targeted for
Transforming production:
• Carbon Neutral
manufacturing facilities
• Net-zero manufacturing
launch in 2025
facilities by 2030
Progress in 2022
Actions:
• EV Transformation
Programme on
track covering all
business functions
Data :
• 3.9% fall in CO2 emissions
per car manufactured in
2022 compared to 2021
(tCO2e)*
• Fully electrified sports and
• 100% use of renewable
• Dedicated training facility,
• 12.2% decrease in
SUV portfolio by 2030
electricity in our
manufacturing facilities
• Reduce CO2 emissions
from our manufacturing
operations by 2.5%
year-on-year*
• Reduce CO2 emissions
intensity and energy
consumption per car
by 2.5% year-on-year*
• Implement ISO 50001
Energy Management
Systems at key
manufacturing
facilities by 2025
• A 30% reduction in supply
chain CO2 emissions by 2030
(compared to 2020)
• Net-zero across our
supply chain by 2039
* Scope 1 CO2 emissions
Electrification Centre
of Excellence, under
development and EV
Champion network
established to support
transition to EV production
• 130 colleagues completed
electricity consumed
• 100% renewable
electricity powering
all our UK operations
* Scope 1 CO2 emissions.
3,344 hours of initial
EV-related instructor-
led training
• Work to deliver Solar
PV on-site electricity
generation continues
• On course to deliver
ISO 50001 Energy
Management Systems
at key manufacturing
facilities by 2025
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Environmental, social and governance
Task Force on Climate-related Financial Disclosures
We believe businesses have an important role to play
in taking decisive action to fight climate change.
Aston Martin is accelerating
on its journey to become a
world-leading sustainable
ultra-luxury automotive
business by transforming our
products and the way they are
manufactured. We recognise
that climate change will
continue to impact global
weather trends and we
acknowledge that we have an
important role to play in taking
decisive action to reduce our
impact on the environment.
This focus continues to intensify
as the need for more urgent
action to limit the average
rise in global temperatures to
1.5°C by 2100 becomes clear
as highlighted by the United
Nations Framework Convention
on Climate Change. Our key
targets are to achieve:
Net-zero manufacturing
facilities by
2030
Net-zero across our
supply chain by
2039
Our Task Force on Climate-
related Financial Disclosures
(TCFD) report has been
produced to address the
requirements of Listing Rule
9.8.6R(8) and the TCFD
Recommendations and
Recommended Disclosures
set out in Implementing the
Recommendations of the
Task Force on Climate-related
Financial Disclosures published
in October 2021. The summary
compliance table on page 66
provides disclosure of our
status of compliance with the
11 Recommended Disclosures
as prescribed by the TCFD.
For metrics and targets
disclosures (b) and (c) further
work is underway to determine
appropriate short- and
medium-term targets together
with the associated plans to
achieve them. These plans will
ultimately enable us to achieve
our stated net-zero targets,
and further information on the
financial impacts of these plans
and associated quantified risk
and opportunity sensitivities
will be provided as the
implementation plans mature.
We expect these plans to be
developed over the next
12 months. We have structured
our reporting in line with the
four TCFD pillars:
We have already commenced
several activities to reduce
the Company’s impact on
the environment including:
•
•
•
•
Governance
Strategy
Risk Management
Metrics and Targets
• sourcing 100% renewable
electricity to power all
our UK operations;
• exploring the use of
•
•
sustainable materials;
initiatives to reduce single-
use plastic waste and
water consumption
within our operations;
committing to our journey
towards electrification with
our first PHEV delivery
planned for 2024 and BEV
targeted for launch in 2025
with a fully electrified sports
and SUV portfolio by 2030;
• establishing a year-on-year
2.5% Scope 1 greenhouse gas
(“GHG”) emissions reduction
target; and
• delivering a 3.9% fall in
CO2 emissions per car
manufactured in 2022
compared with 2021 (tCO2e).
In April 2022 we announced
our sustainability strategy,
Racing. Green., which makes
sustainability part of everything
we do and informs our overall
business strategy and business
plan. Our climate-related risk
and opportunity assessments
are embedded within our
enterprise risk management
approach with further
disclosure included within
the Risk Management section
of this Annual Report and
the Sustainability Report.
We continue to assess the
physical and transition risks
and opportunities that we face
which could affect our strategy
and business model under three
different warming scenarios,
being a 1.5°C, 2°C and 4°C
average increase in global
temperatures by 2100.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Governance
As a signatory to the UN
Global Compact, Aston Martin
is committed to doing business
in an ethical and transparent
manner, overseen by good
corporate governance. In
2021 the Board established
our Board Sustainability
Committee to oversee and
monitor the delivery of our
Racing. Green. strategy. The
Committee meets at least twice
a year and is chaired by Anne
Stevens, Independent Non-
executive Director. It provides
strategic guidance and scrutiny
of management’s assessment
and management of climate-
related risks and opportunities
and environmental matters with
Risk Management
Committee
Key ESG issues are
listed on the Corporate
risk register and regularly
reviewed by the Risk
Management Committee
with bi-annual reporting
to the Audit and
Risk Committee
reporting to the Board
following each Committee.
Significant climate-related
risks are also reviewed by the
company’s Risk Management
Committee and managed using
our business-wide enterprise
risk management procedures.
Climate-related risks are
incorporated into the corporate
risk register where appropriate.
The Sustainability Committee
is supported by ten dedicated
sustainability working groups
focused on areas ranging
from energy management to
development of a sustainable
supply chain.
These groups harness leading
talent within the business and
specialist expertise to develop
and execute credible action
plans to achieve clear targets
in their respective areas.
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,
promoting the use of sustainable
materials and sourcing of
100% renewable electricity
to power all our UK operations.
Significant climate-related
risks are assigned to functional
Risk Champions to develop
appropriate risk mitigation
plans. Each function maintains
a risk register which is reviewed
twice a year by the Company’s
Risk Management Committee.
The Audit and Risk Committee
then provides oversight of the
corporate climate-related and
other risks.
To date management
remuneration has not been
linked to climate-related
performance objectives. The
Remuneration Report provides
further detail as this is being
considered for the financial
year ending 31 December 2024.
Aston Martin Lagonda Global Holdings plc
Board Sustainability Committee
Sustainability Committee has delegated Board
authority to approve ESG strategy and act on
ESG-related matters
Executive Committee
Working groups
Energy Strategy
Modern Slavery
Environment
Water, Waste
and Recycling
Electric Vehicles
Sustainable
Supply Chain
ESG
Communications
Diversity
and Inclusion
Health and Safety
(ISO 45001)
Design and
Sustainability
Innovation
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Task Force on Climate-related Financial Disclosures continued
Climate-related strategy
The automotive industry is
having to rapidly respond to
address the challenges it faces
as a result of climate change.
Some of the solutions being
implemented include shifting
to the production of more
fuel-efficient vehicles, use
of cleaner fuels and a move
towards electrified
powertrains. Our scenario
analysis assesses 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 to medium term (the next
five years) 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 climate-related
elements of our Racing. Green.
strategy are:
Tackling climate change
Transforming products
• First PHEV commences delivery in 2024
• First BEV targeted for launch in 2025
• Fully electrified sports and SUV
portfolio by 2030
Creating a better
environment
Minimising impacts
• Zero single-use plastic packaging waste
from our manufacturing facilities by 2025
• Zero waste to landfill from our
manufacturing operations
• 15% reduction in water consumption at
our manufacturing operations by 2025
(compared with 2019)
Maximising
sustainable materials
• Continue to work with supply chain
partners to enable the use of more
sustainable materials
Boosting biodiversity
• Improve biodiversity at our
manufacturing facilities
Transforming production
• Carbon neutral manufacturing facilities
from 2023 onwards
• Net-zero manufacturing facilities by 2030
• 100% use of renewable electricity
in our manufacturing facilities
(from 2019 onwards)
• Reduce Scope 1 CO2 emissions from
our manufacturing operations by
2.5% year-on-year
• Reduce Scope 1 CO2 emissions
intensity and energy consumption
per car by 2.5% year-on-year
• Implement ISO 50001 Energy
Management Systems at key
manufacturing facilities by 2025
• A 30% reduction in supply chain CO2
emissions by 2030 (compared with 2020)
• Net-zero across our supply chain by 2039
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
We are transforming our
products and the way they
are manufactured to help
tackle climate change. In 2024
Aston Martin will commence
delivery of Valhalla, our first
PHEV, followed by our first
BEV targeted for launch in
2025 and a fully electrified
sports and SUV portfolio
by 2030. Whilst embracing
electrification, we also believe
our sustainability ambitions
must be broader than just
producing tailpipe emissions-
free vehicles. We want to
ensure our manufacturing
footprint is sustainable
enabling the production of
our vehicles with a reduced
environmental impact.
Last year we committed to set
near and long term Company-
wide emissions reduction
targets in line with the SBTi.
Our strategy also targets the
elimination of single-use plastic
waste by 2025, the reduction of
water consumption by 15% by
the same year and maximising
the use of sustainable materials
within our vehicles. As part
of our ambition we are aiming to
achieve net-zero manufacturing
facilities by 2030, and across
our supply chain by 2039.
We will continue to develop
a detailed plan to drive
further reductions in our GHG
emissions through 2023 and
beyond, with the SBTi providing
an independent assessment to
make sure this plan is robust
and will achieve our objective.
We engaged a third-party
consultancy to build our
scenario analysis model which
we have used to evaluate
the potential impact of both
transitional and physical risks
and opportunities on Aston
Martin, with risks being
categorised in accordance
with the TCFD Recommendations
in three warming pathways,
as depicted in the table below.
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 GHG 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
our commercial resilience
we also considered different
socioeconomic futures, known
as the Shared Socioeconomic
Pathways (SSPs).
We will actively reduce
emissions generated from our
manufacturing operations and
supply chain whilst at the same
time developing an electrified
product portfolio which will
reduce the emissions arising
from the sale of our products
to customers.
Since 2019 100% of our
electricity used in the UK has
been sourced from verified
renewable sources and we
continue to look for further
opportunities to reduce water
and energy consumption,
reduce waste and enhance
biodiversity across our
facilities. Further details of
these activities can be found
in our Sustainability Report.
Scenario pathways
Scenario
SSP/RCP*
Description
Societal response
Global dynamics
Temperature rise
Likelihood
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)
Proactive
Proactive
Reactive
Open, collaborative, global
Independent, regional
Open, collaborative, global
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 2022
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Supply chain
Manufacturing & distribution
Customer
Potential financial impact
Time horizon
1.5°C
2°C
4°C
TCFD risk classification
Warming scenarios ( risk/opportunity relevant to this scenario)
•
Increased operating costs
Long term
Physical Acute
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)
Potential impact of extreme weather events on distribution chain (e.g. delayed
deliveries due to hurricanes preventing ships docking on time at key periods)
Supply chain disruption exacerbated by reliance on single-source vendors
for certain components
Increasing insurance costs due to a
hardening Property Damage and Business
Interruption market caused by additional
climate-related damage claims
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)
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) and/or delayed inclusion of sustainable materials in production
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 may not be price competitive due to its low volume strategy and inability to drive material/
component costs down
Not keeping pace with regulations in
key markets, in particular potential loss
of small volume derogation
Increasing carbon related taxes/import duties designed to limit the use of
high-emissions vehicles, particularly within urban areas
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. Insufficient access to EV skills
and capabilities
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
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
BEV technology partner inability to deliver in line with AML EV timelines
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
Potential for strategic partnerships
with other organisations, e.g., 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
Risk management
The Board is ultimately
responsible for ensuring that
theCompany has an effective
Enterprise Risk Management
Framework and System (“ERMFS”)
implemented across the
business to facilitate delivery
of its strategic objectives.
For further information on this
refer to the Risk and Viability
Report on pages 80 to 85 and
the Audit and Risk Committee
Report on pages 114 to 121,
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 ERMFS. Climate change
has been identified as a risk
factor impacting many of the
key risks faced by our business.
As part of our business as usual
annual risk assessment activity
we have considered how the
impact of climate change
affects our existing corporate
risks, as well as identified any
new and emerging climate-
related risks and opportunities.
We also engage with external
risk management networks
to develop a broader
understanding of the global
impact of climate change.
Secure operational cost efficiencies through waste reduction, more efficient use
of water and more efficient energy consumption
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
•
Increased operating costs
• Decreased revenue
•
Increased operating costs
• Decreased revenue
Short term
Short term
•
Increased capex/R&D
• Asset write-offs/impairment
• Decreased revenue
• Financial Penalties
•
•
Increased operating costs
Increased capex/R&D
• Asset write-offs/impairment
• Decreased margins
• Decreased revenue
Short term
Short term
Medium term
Short term
•
Increased operating costs
Short term
•
Increased operating costs
• Decreased revenue
•
Increased financing costs
• Decreased capex/R&D
Short term
Short term
•
Increased operating costs
• Decreased revenue
Short term
• Decreased revenues
Medium term
• Decreased revenues
•
Increased capex/R&D
• Asset write-offs/impairment
• Decreased revenues
•
Increased capex/R&D
• Asset write-offs/impairment
Medium term
Short term
• Decreased revenues
Short term
• Decreased revenues
• Decreased revenues
Medium term
Short term
• Decreased operating costs
•
Increased revenues
Short term
•
Increased revenues
Medium term
•
•
Increased revenues
Increased margins
Short term
• Decreased operating costs
Short term
Physical Acute & Chronic
Physical Acute & Chronic
Market, Policy & Legal
Technology
Reputation
Market
Policy & Legal
Policy & Legal
Market
Market
Market
Market
Market
Market
Technology
Reputation
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)
Potential impact of extreme weather events on distribution chain (e.g. delayed
deliveries due to hurricanes preventing ships docking on time at key periods)
Supply chain disruption exacerbated by reliance on single-source vendors
for certain components
Increasing insurance costs due to a
hardening Property Damage and Business
Interruption market caused by additional
climate-related damage claims
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)
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) and/or delayed inclusion of sustainable materials in production
Lack of a globally coordinated transition to EVs may result in increased market segmentation and the need for a more
diverse product portfolio
component costs down
Aston Martin EV portfolio may not be price competitive due to its low volume strategy and inability to drive material/
Not keeping pace with regulations in
key markets, in particular potential loss
of small volume derogation
Increasing carbon related taxes/import duties designed to limit the use of
high-emissions vehicles, particularly within urban areas
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. Insufficient access to EV skills
and capabilities
Market disruption from technology-orientated corporates/new entrants developing non-ICE alternative powertrain vehicles
BEV technology partner inability to deliver in line with AML EV timelines
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
Inability to convert traditional ICE
customer base to an Aston Martin EV
vehicle proposition
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, e.g., 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
Secure operational cost efficiencies through waste reduction, more efficient use
of water and more efficient energy consumption
Supply chain
Manufacturing & distribution
Customer
Potential financial impact
Time horizon
1.5°C
2°C
4°C
TCFD risk classification
Warming scenarios ( risk/opportunity relevant to this scenario)
Increased operating costs
•
• Decreased revenue
Increased operating costs
•
• Decreased revenue
Short term
Short term
Physical Acute & Chronic
Physical Acute & Chronic
•
Increased operating costs
Long term
Physical Acute
Increased capex/R&D
•
• Asset write-offs/impairment
• Decreased revenue
• Financial Penalties
Increased operating costs
Increased capex/R&D
•
•
• Asset write-offs/impairment
• Decreased margins
• Decreased revenue
Short term
Short term
Medium term
Short term
•
Increased operating costs
Short term
Increased operating costs
•
• Decreased revenue
Increased financing costs
•
• Decreased capex/R&D
Short term
Short term
Increased operating costs
•
• Decreased revenue
Short term
• Decreased revenues
Medium term
• Decreased revenues
•
• Asset write-offs/impairment
Increased capex/R&D
• Decreased revenues
•
• Asset write-offs/impairment
Increased capex/R&D
Medium term
Short term
• Decreased revenues
Short term
• Decreased revenues
• Decreased revenues
Medium term
Short term
• Decreased operating costs
•
Increased revenues
Short term
•
Increased revenues
Medium term
•
•
Increased revenues
Increased margins
Short term
• Decreased operating costs
Short term
Technology
Reputation
Market, Policy & Legal
Market
Policy & Legal
Policy & Legal
Market
Market
Market
Market
Market
Market
Technology
Reputation
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We categorise climate-related
risks and opportunities using
the TCFD recommended
classifications:
• Transition risks – risks
arising from economic
and regulatory transition
toward a low-carbon future,
e.g., changing emissions
regulations, changing
consumer preferences
and behaviour:
– Policy & Legal risk
– Technology risk
– Market risk
– Reputation risk
• Physical risks – risks
caused by physical
shocks and stressors to
infrastructure and natural
systems, e.g. extreme
temperatures, drought,
severe weather events:
– Acute risk
– Chronic risk
When considering climate-
related risks and opportunities
we assess their potential impact
over three time horizons, short
term (< 2 years), medium term
(2-5 years), covering the five
year business plan period, and
long term (beyond 5 years and
up to 2050). All risks included
within the corporate risk register
are assigned a Risk Owner
responsible for performing
periodic likelihood and
impact risk assessments and
developing formal documented
risk management plans.
A summary of the key significant
risks and opportunities which
have been assessed and
incorporated within the scenario
analysis has been presented on
the previous page.
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 in the
adjacent table. This focuses
on transition risks as these
represent the material risks
identified within the short
and medium term.
Transition risks
Mitigating actions taken/planned to be taken to address risks
Policy
Managing our
exposure to
changes in
legislation
Technology
Modifying
our product
offering
Market
Adapt to meet
customer
needs and
desires
Reputation
Positioning
Aston Martin
as an
ultra-luxury
sustainable
brand
•
•
•
•
•
•
•
•
•
R&D investment to develop lower fleet
emissions portfolio
Maintenance of small volume derogation
status exemptions where available
Establishment of emissions-pooling
agreements with third parties to manage
exposure to carbon pricing
Consideration of forward purchasing of
carbon offsets to manage exposure to
increased pricing and reduced capacity
R&D investment in EV technology
Improving energy efficiency in our
manufacturing plants
Selection of a strategic partner to provide
access to EV powertrain technology
Investment in use of alternative sustainable
materials within vehicles
Launch of our Racing. Green.
sustainability strategy
• Continued focus on waste reduction
and elimination with zero single-use plastic
waste target to be achieved by 2025
Working with our supply chain to reduce
global emissions and waste
Development of electrified powertrain
options within the product portfolio and
increased use of sustainable materials to
meet customers’ evolving requirements
Development of our Racing. Green.
sustainability 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
Deployment of our bold new brand strategy
•
• Clear strategy to electrify our product
•
•
•
•
•
•
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
portfolio and increase use of sustainable
materials (including green aluminium)
2030
Fully
electrified
sports and SUV portfolio
Net-zero
manufacturing facilities
30%
reduction in supply chain CO2
emissions (from 2020 baseline)
2039
Net-zero
across our supply chain
Metrics and Targets
Racing. Green. incorporates
a number of climate-related
targets which demonstrate
the Company’s commitment
to tackling climate change in
the short-, medium- and
longer-term. We are committed
to the SBTi Net-Zero Standard
and are in the process of setting
near and long term Company-
wide emissions reduction
targets in line with science-
based net-zero with the SBTi.
We expect these targets to
be validated by the SBTi over
the next 24 months.
Tackling climate change
2019
100%
use of renewable
electricity to power our
manufacturing operations
2022
CO2
Reduce CO2 emissions from our
manufacturing operations by
2.5% year-on-year*
Reduce CO2 emissions intensity
and energy consumption per
car by 2.5% year-on-year*
We listen to our stakeholders
and monitor developments
from regulatory and
governance bodies to provide
input into our materiality
assessment for climate-related
disclosure purposes. The
targets and metrics disclosed
have been identified by the
Sustainability Committee as
being those that have a material
impact on our business due to
their nature, size or complexity.
In summary, these include:
2024
PHEV
Commence delivery
of our first PHEV
2025
BEV
Target for launch
of our first BEV
Creating a better environment
2025
Zero
single-use plastic
packaging waste
15%
reduction in water consumption
(from 2019 baseline)
We have determined that there
is no difference between our
Scope 1, 2 and 3 disclosures
for TCFD and SECR reporting
purposes and refer you to
the metrics disclosed in the
Environmental, Social and
Governance section of this
Annual Report.
In preparing our Scope 3
emissions disclosures we have
considered the completeness
and robustness of our calculations
and recognise that the current
disclosure is based on the data
we have available at this time.
During 2023, we will develop
plans to broaden the categories
of Scope 3 emissions which we
measure and report. For this
reason we consider ourselves
to not be in full compliance
with the TCFD requirements
at this stage.
We continue to enhance
our data collection methods,
working across our value
chain, and seek to obtain
external assurance to validate
a number of our reportable
metrics as outlined in our
Sustainability Report.
Refer to our Sustainability
Report for further details
relating to the targets we have
set and how we monitor them
in relation to climate change.
* Scope 1 CO2 emissions.
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Disclosure level
Full
Partial
Omitted
Pillar
Recommended Disclosures and disclosure level
Response
Disclosure
location
Page 62, 80
and 82
Page 62, 80
and 82
Governance
Disclose the
organisation’s
governance
around
climate-related
risks and
opportunities.
Strategy
Disclose the
actual and
potential
impacts of
climate-
related risks and
opportunities on
the organisation’s
businesses,
strategy,
and financial
planning where
such information
is material.
Risk Management
Disclose how
the organisation
identifies,
assesses,
and manages
climate-
related risks.
Metrics and
Targets
Disclose the
metrics and
targets used
to assess and
manage relevant
climate-related
risks and
opportunities
where such
information is
material.
a) Describe the board’s oversight of climate-
related risks and opportunities.
The Board is responsible for climate ambition, strategy and risk and
has established the Sustainability Committee to oversee delivery
of the Group’s Racing. Green. strategy.
b) Describe management’s role in
assessing and managing climate-
related risks and opportunities.
The Executive Committee members are responsible for managing
risks and opportunities within their functions by deploying the
ERMFS. They are supported by Functional Risk Champions who
attend the Risk Management Committee on a quarterly basis. The
Head of Government Affairs and Sustainability holds management
responsibility for the Sustainability Committee.
a) Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium, and long term.
We face multiple climate-related risks, primarily arising from the
transition to a low-carbon economy and the need for us to address
technological, legal, market and reputational risks. Physical risks
pose a lesser threat to our direct operations, whilst we do recognise
their potential impact on our supply chain.
Page 62-63
b) Describe the impact of climate-related
risks and opportunities on the organisation’s
businesses, strategy, and financial planning.
We are investing in electrification of our product portfolio to
mitigate the technological and regulatory risks associated with
transition to a low carbon economy together with investment in
sustainable materials. We are also investing in our manufacturing
facilities to drive increased energy efficiency and reduced waste.
Page 62-63,
68-78
c) Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C
or lower scenario.
Our business plan takes into account planned investment and capital
expenditure to electrify our powertrains, and capital projects to
reduce carbon emissions from within our facilities and operations.
Disclosures regarding the resilience of our strategy in each of the
warming scenarios will be further enhanced in 2023.
Page 58-65
a) Describe the organisation’s processes
for identifying and assessing climate-
related risks.
Our ERMFS is used to identify, assess and manage all types of risks
across the business. This includes specific consideration of both
transitional and physical climate-related risks.
Page 62, 80
and 82
b) Describe the organisation’s processes
for managing climate-related risks.
c) Describe how processes for identifying,
assessing, and managing climate-related risks
are integrated into the organisation’s overall
risk management.
In 2021 we identified and disclosed a new principal risk relating to
climate change and the need for the business to transition its product
portfolio to electrified powertrains over the medium term and
reduce our carbon footprint. Refer to the Principle Risk summary
table within this Annual Report and Accounts.
Page 62 and
80
Climate-related risks are considered and managed within our ERMFS.
Page 62, 80
and 82
a) Disclose the metrics used by the
organisation to assess climate-related risks
and opportunities in line with its strategy
and risk management process.
We have identified and disclosed a wide range of climate-related
metrics in order to manage our exposure to climate risks and
opportunities (refer the Sustainability Report). Additional interim
targets will be developed for our longer-term ambitions during 2023.
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b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas
(GHG) emissions, and the related risks.
We have disclosed our Scope 1 and Scope 2 emissions for our own
operations and made partial disclosure in relation to our Scope 3
emissions (covering business travel). We recognise that our current
Scope 3 disclosures are not sufficient to fully comply with the
TCFD Recommendations and will work to broaden the disclosures
through 2023.
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c) Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets.
We are in the process of establishing interim targets, to enable
us to track progress towards our stated longer term net-zero
targets Current targets are disclosed in the Sustainability
section of this Annual Report and Accounts with further detail
in the Sustainability Report.
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Data
Greenhouse gas emissions
Our greenhouse gas (‘GHG’) emissions
reported are in accordance with the
Greenhouse Gas Protocol Corporate
Standard for the year to 31 December 2022.
The intensity ratio is measured as tonnes
of CO2 equivalent per car manufactured.
Methodology
We calculate our GHG 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.
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.
Scope 3 – Includes emissions from
business air travel, management car
miles, personal car mileage, employee
commuting, water consumed and supply
chain logistics.
The UK Government Department for
Environment, Food and Rural Affairs
(‘Defra’)-approved International Energy
Agency (‘IEA’) emissions factor for 2022
are used to calculate the Scope 1, 2 and 3
figures, and the IEA emission factors were
used to calculate emissions from scope 2
for rest of the world.
The 3.9% fall in Scope 1 CO2 emissions
per car manufactured in 2022 compared
with 2021 (tCO2e) was mainly driven by
increased energy use efficiencies including
those arising from the consolidation of
our paintshop activities in St Athan.
Total greenhouse gas emissions
GHG Emissions Under Scope 1
(tCO2e)
GHG Emissions Under Scope 2
(tCO2e) – Location based
GHG Emissions Under Scope 2
(tCO2e) – Market based
GHG Emissions Under Scope 3
(tCO2e)
UK Total Gross Scope (Scope 1
& Scope 2 – Location based)
Rest of World Total Gross Scope
(Scope 1 & Scope 2 – Location based)
Total Gross Scope (Scope 1 & Scope 2
– Location based)
^ Values previously assured by ERM CVS.
^^ Values assured by ERM CVS.
Greenhouse gas emissions per unit
2019
2020^
2021^
2022^^
8,981.40
9,200.67
8,705.35
9,272.50
8,683.50
7,545.86
7,366.72
5,923.26
3,484.61
687.28
192.38
118.16
8,806.94
6,620.37
6,446.74
11,187.29
17,664.90
16,642.17
15,984.15
15,014.02
–
104.36
101.82
181.74
17,664.90
16,746.53
16,085.97
15,195.76
2019
2020^
2021^
2022^^
Manufactured Volume (units)
6,176
3,343
5,778
6,404
Total Scope 1 Emissions per unit
Total Scope 2 Emissions per unit
1.45
1.41
2.75
2.26
1.51
1.27
1.45
0.92
^ Values previously assured by ERM CVS.
^^ Values assured by ERM CVS.
Total energy consumption within organisation
2019
2020^
2021^
2022^^
Electricity (MWh)
33,973.01
32,144.15
34,506.66
30,308.19
Gas (MWh)
Diesel (MWh)
43,574.51
44,796.00
43,923.02
41,904.94
14.92
4.34
72.93
77.66*
Gasoline (MWh)
2,712.98
1,779.25
2,450.28
3,029.99*
LPG (MWh)
563.60
43.52
Nil
384.02
UK Total Consumption (MWh)
80,839.02
78,573.14
80,952.90
75,114.65
Rest of World Total Consumption
(MWh)
–
194.11
230.96
590.15
Total (MWh)
80,839.02
78,767.26
81,183.86
75,704.80
^ Values previously assured by ERM CVS.
^^ Values assured by ERM CVS.
*
Does not include consumption of diesel
and gasoline (‘petrol’) by pool cars.
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Environmental, social and governance continued
Creating a better environment
Creating a better environment
UN Sustainable Development Goals
Overview
Protecting and enhancing
the natural environment is
central to our efforts to be
a responsible business.
During 2022, we appointed
Environmental Champions
to promote environmental
awareness across the Company.
In 2022, key initiatives included:
• further measures to reduce
water consumption to save
around 1 million litres of
water every year, from 2023;
• a project to remove surplus
on-site waste; and
• a new biodiversity survey and
management plan for Gaydon.
Highlights
Up to
80,000
bees take up residence in new beehives at Gaydon
7.5%
fall in water consumed per car manufactured
between 2021 and 2022 (m3)
10.2%
increase in proportion of waste recycled (tonnes)
Biodiversity: A colleague works under the guidance of our Head Beekeeper, Alan
Rodricks, who is also our Head of High Voltage. Our beehives at Gaydon are home
to up to 80,000 bees, which are an important part of the UK’s ecosystem and are
perfectly adapted to pollinate, helping plants to grow.
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Our goals
Minimising impacts
• Zero single-use plastic
packing waste from our
manufacturing facilities
by 2025
• Zero waste to
landfill from our
manufacturing operations
• 15% reduction in water
consumption by 2025
(compared to 2019)
Maximising
sustainable materials
• Continue to work with
supply chain partners to
enable the use of more
sustainable materials
Boosting biodiversity
• Improve biodiversity at
our manufacturing facilities
Data
Waste
Total waste (tonnes)
Total waste (tonnes)*
Reused (tonnes)
Recycled (tonnes)
Recovered (Waste to Energy) (tonnes)
Incineration (not recovered) (tonnes)
2019
2020
2021
2022^
2,830.99
1,566.02
394.39
858.62
2,366.23
40.21
987.81
538.01
-
8.72
243.82
141.85
-
6.40
380.60
471.62
-
-**
1,383.19
979.69
3.35
^ Values ERM CVS assured.
* Data excludes Newport Pagnell. See Sustainability Report for further information.
** No data available due to transition to new waste contractor.
The increase in the total volume of waste compared with 2021 is due to the successful completion
of a legacy waste recovery project and an enhanced waste tracking methodology. The increase in
the volume of waste recycled, resulting in a 10.2% rise in the Company’s recycling rate is due to the
implementation of new recycling streams facilitated by a new waste contractor. In 2022, due to a
process error some contractor and construction waste resulting from facilities and maintenance
activities was discharged to landfill. This process error has now been corrected. Waste accounting
does not include contractor and construction-related waste streams from maintenance and facilities.
Water
Water consumption (m3)
^ Values ERM CVS assured.
2019
2020
2021
2022^
59,233.78
34,477.65
64,681.40
66,279.99
Enhancements to manufacturing processes enabled the Company to achieve a 7.5% decrease
in water consumed per car manufactured between 2021 and 2022.
Data:
• 95% of suppliers compliant
with ISO 14001: 2015
environmental
management standard.
• Responsible Procurement
Policy signed by 73% of
main suppliers
• 7.5% reduction in water
consumed per car
manufactured compared
to 2021 (m3)
• 2.5% increase in water
consumed compared
to 2021 (m3)
Progress in 2022
Actions:
• 36 employees appointed
Environmental Champions
to drive improvements in
environmental performance
across the Company
• New pilot recycling centre
delivered at Wellesbourne
logistics facility
• Further steps towards
achieving zero plastic
packaging waste by
2025 underway
• Investment in water-saving
technologies to save
1 million litres of water
every year from 2023
• Ecological Biodiversity
Assessment surveys
completed at Gaydon
and St Athan with new
quantitative metrics
established to drive
biodiversity improvements
over time
• New Biodiversity
Management Plan
completed for Gaydon
• Six beehives installed
at Gaydon for up to
80,000 bees
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Environmental, social and governance continued
Investing in people and opportunity
Investing in people and opportunity
UN Sustainable Development Goals
Overview
2022 saw the Company
continue to focus on targeting
zero accidents, launching a
new safety training programme
and campaign, Zero Harm.
Zero Tolerance. We have also
delivered further improvements
to our safety management
systems, enhancing incident
monitoring and reporting
across all our sites and facilities.
We continue to act on mental
health, including delivering
training around mental
health awareness and
stress management.
In 2022, we established a new
Employee Inclusion Network to
champion all areas of inclusion
and, with the support of our
Executive Committee, put in
place a new Company-wide
Highlights
79%
increase in apprentices completing industry-leading
training programme in 2022 compared to 2021
19,646
hours of training delivered to employees in 2022
£2.75million
raised for charities including The Prince’s Trust
Equity, Diversity and Inclusion
(‘EDI’) Strategy. Working with
Racing Pride, an innovative
movement developed to
positively promote LGBTQ+
inclusivity within the motorsport
industry and among its
technological and commercial
partners, we have completed a
review of our People policies to
make sure they are inclusive and
support people transitioning
at work; we also delivered
LGBTQ+ awareness sessions
during Pride Month, and
educational communications
around other key landmarks
such as International Non-
Binary People’s Day.
In 2022, the Company recruited
20 apprentices, 23 graduates
and welcomed 13 industrial
placements as part of our
commitment to nurturing talent
that is key to our future success.
We also expanded training, with
a particular focus on the
transition to EV production. As
we emerge from the COVID-19
pandemic, we have been able to
restart our work on promoting
STEM in schools and colleges,
as well as boost our wider
contribution to communities.
In September, a replica stunt
car donated by Aston Martin
raised £2.75 million at the Sixty
Years of James Bond auction at
Christie’s in London, benefiting
The Prince’s Trust, The Prince
of Wales’s Charitable Fund,
and charities supporting
serving and former members
of the UK Special Forces.
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Early Careers intake: In September, our
Early Careers intake of 56 new employees
took part in a two-week training course at
Ashorne Management College near Gaydon.
Goals
Employee wellbeing
• Target zero accidents
• Continue to deliver industry-
leading initiatives to support
employee wellbeing
Equity, diversity and inclusion
• Women in 25% of leadership
positions by 2025 and in 30% of
leadership positions by 2030*
• Increase the culture of
inclusion by leveraging the
Aston Martin values
• Improve workplace
engagement and culture,
and secure accreditation as a
Great Place to Work® by 2025
Growing talent and inspiring
future generations
• Sustain new apprenticeship
recruitment
• Update skills and training
to support transition to
EV production
• Continue commitment to
promoting Science,
Technology, Engineering
and Mathematics (STEM)
* Leadership includes Senior
management team, senior
leadership team and other
management grades.
Progress in 2022
Actions:
• New safety training and
campaign, Zero Harm.
Zero Tolerance
• Mandatory safety
leadership training for
all senior staff underway
• Transition to new
independent safety
audit provider, UTAC,
with new focus on electric
vehicle production
• 130 colleagues completed
3,344 hours of initial
EV-related instructor-
led training
• Significant apprentice
and graduate recruitment
• Increased training for
Aston Martin dealer network
• New EDI Strategy signed
off by the Board
• Employee Inclusion Network
launched. Diversity and
Inclusion training underway
across the organisation
• Working with Racing Pride to
promote LGBTQ+ awareness
and update People policies.
• £2.75 million raised
for charities, including
£1.375 million for The
Prince’s Trust, from auction
of a DB5 James Bond stunt car
Data:
Accident Frequency Rate
(‘AFR’) of 0.53 accidents per
100 workers (1.01 in 2021)*
• 9 Lost Time Accidents
(‘LTAs’) resulting in 185 days
lost (5 LTAs with a total of
163 days lost in 2021)
• 9 RIDDOR** incidents (6
RIDDOR incidents in 2021)
• 43 apprentices completed our
apprenticeship programme,
a 79% increase compared
to 2021
• 20 new apprentices recruited
• 23 graduates recruited
• 13 industrial placements
• 19,646 hours of training
delivered to Aston Martin
employees in 2022
• 253 commercial and
technical courses scheduled/
offered to dealer employees
(214 in 2021)
• Mean Gender Pay Gap
favouring men by 9.9%
(6.9% in 2021) and a median
pay gap favouring men by
4.9% (2.0% in 2021)
*
In 2022, we strengthened
the scope of our safety data,
capturing a wider range of
functions and sites in addition
to production operations. This
figure is calculated on that
basis and represents a change in
methodology compared to 2021.
The AFR now reflects recordable
incidents and not just reportables.
** Reporting of Injuries, Diseases and
Dangerous Occurrences Regulations.
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Environmental, social and governance continued
Strategy goals
Equity, Diversity and Inclusion Pledge
To reinforce our EDI Policy, we have developed our EDI Pledge:
At Aston Martin,
we believe in
each other and
our unique
abilities, and
understand we
are stronger
together.
We support
everyone to
be heard, and
cherish diverse
perspectives
that help us
collaboratively
thrive.
No one
builds an
Aston Martin
on their own.
I AM Inclusive;
I AM, because we
are Aston Martin.
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Our values
In 2022, we updated our
Company values. At the core
of our values is one single
guiding tenet: No one builds
an Aston Martin on their own.
Our values are: Unity,
Openness, Trust, Ownership
and Courage. These values
set the tone for how we do
things and the culture we
want to establish.
Data
Employees by gender (as at 31 December 2022)^
Female
Male
Senior management team
Senior leadership team
Other leadership
Other employees
Total
8
68
251
2,018
2,094
0
12
51
367
379
Employees by region (as at 31 December 2022)^
Female
Male
Asia Pacific
EMEA
UK
Americas
Total
22
59
1,986
27
2,094
17
9
345
8
379
Note: Data by gender and region is shown for 2,473 permanent
Company employees only.
^ Values assured by ERM CVS.
% Female
0.0%
15.0%
16.9%
15.4%
15.3%
% Female
43.6%
13.2%
14.8%
22.9%
15.3%
Apprentices
• 43 apprentices completed
apprenticeship programme
• 20 new apprentices recruited
Graduates
• 23 new graduate
trainees recruited
• 13 students joined on
industrial placements
Training – Aston Martin
employees
• 19,646 hours of training
delivered
• 187 commercial courses
scheduled/offered
(142 in 2021)
• 66 technical courses
scheduled/offered
(72 in 2021)
• 1,689 dealer employees
trained in classroom courses
(2,089 in 2021)
• Six new e-learning modules
developed and published
• Two new technical training
courses developed and
introduced
• 3,344 hours of initial
EV-related instructor-led
training delivered
STEM
• 20 events, including career
days, school and factory visits
Training – Aston Martin
dealerships
• 2,477 registered Dealer
Training Academy users
(2,193 in 2021)
Charity
• £2.75 million raised for
charities, including The
Prince’s Trust and The Prince
of Wales’s Charitable Fund
Gender pay gap
The difference between men
and women’s average pay
(expressed as a percentage of
the men’s pay) was a mean pay
gap of 9.9% and a median pay
gap of 4.9% in 2022, favouring
men. These have increased
compared to 2021 (mean pay
gap of 6.9% and median pay
gap of 2.0%, also favouring
men. Our mean pay gap is
largely due to the make-up of
the senior team (which includes
significantly more men) and
working patterns, particularly
in Production roles, where
shifts (that more men than
women choose to work)
command shift premium
and overtime payments.
The year-on-year increase
reflects growth in the senior
management and leadership
teams, particularly within
the engineering area of the
business. Our median pay gap
has increased due to the roles
held by our median man and
median woman in 2022, which
are (respectively) a Lead
Technician in production and
a Senior Analyst in Finance.
Although the woman has a
higher annual salary, the man
has also received overtime and
shift premium payments due to
the requirements of his role. We
are working to improve gender
equality which will contribute
to narrowing the gap, with the
ultimate aim to close it completely.
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Environmental, social and governance continued
Exporting success
Exporting success
UN Sustainable Development Goals
Overview
We continue to serve as a
flag bearer for British industry
and British exporters in particular,
selling our world-class products
in more than 50 countries
worldwide and representing the
very best of British advanced
engineering and design.
In 2022, we were pleased to
welcome numerous politicians
to our facilities in both Wales
and England, including those
representing areas in which
our facilities are located. These
visits allowed us to engage on
a range of matters, including
new opportunities for trade and
growth, industry challenges,
and Aston Martin’s essential
contribution to local economies
and communities.
Highlights
4.4%
increase in cars exported compared with 2021
17.7%
increase in cars exported to EMEA
(excluding the UK)
83%
of total wholesale cars exported
Platinum Jubilee: Aston Martin was delighted to celebrate Queen Elizabeth II’s
Platinum Jubilee in 2022. Our commemorations included a parade of iconic Aston
Martin models through Central London, led by a Coronation-era DB2 with images
celebrating this important national celebration across Aston Martin’s global social
media platforms.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Selling worldwide:
Our global network of
dealerships includes
Sao Paulo in Brazil.
Our goals
Working with government
• Continue to work with
the UK Government
to showcase the very
best in advanced
British engineering
and design worldwide
• Maintain engagement with
the UK Government and
Welsh Parliament to support
sustainable growth across
the UK automotive sector,
including expansion of the
UK-based supply chain
• Help to achieve the UK
Government’s aim to
increase UK exports to
£1 trillion per year by 2030
Progress in 2022
Actions:
• Successful global launches
of new models, including the
ground-breaking DBX707 –
the world’s fastest and most
powerful luxury SUV
• Visits to our world-class
manufacturing facilities by
the Rt Hon Simon Hart MP,
the Secretary of State for
Wales, and Trudy Harrison
MP, transport minister
• Visit by Tony Danker, the
Director General of the
Confederation of British
Industry (CBI), to our
Gaydon headquarters,
reinforcing collaboration
to foster a positive
environment for business
and export growth
• Showcasing UK engineering
and design excellence by
featuring Aston Martin
vehicles at the Commonwealth
Games and HM Queen’s
Jubilee Parade
Data:
• 4.4% increase in
cars exported
• 17.7% increase in cars
exported to EMEA
• 83% of total wholesale
cars exported
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Environmental, social and governance continued
Delivering the highest standards
Delivering the highest standards
UN Sustainable Development Goals
Overview
A commitment to delivering the
highest standards forms the
bedrock of our business. We
operate in a heavily regulated
sector and work hard towards
ensuring compliance with legal
and regulatory obligations in
areas ranging from anti-slavery
to vehicle safety.
We are striving to meet
international best-practice
standards in areas such
as occupational health
and safety (ISO 45001),
environmental management
systems (ISO 14001:2015)
and energy management
systems (ISO 50001).
In 2021, we established a
dedicated Sustainability
Committee to oversee our
sustainability programme,
Racing. Green. The Committee
meets every quarter to provide
direction and oversight of the
Company’s sustainability strategy,
targets and performance.
Our ten sustainability
working groups drive the
implementation of our
sustainability strategy.
Highlights
More than
30
sustainability working group meetings
95%
of suppliers compliant with ISO 14001: 2015
environmental management standard.
194
employees received Modern Slavery training in 2022
Leadership: Our leadership meets regularly to drive the Company forward.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Delivering the highest standards defines everything
we do. That includes strong governance and a
rigorous approach to compliance.
Our goals
Embracing industry
best practice
• Continue commitment
to the Science Based
Targets initiative
• Continue commitment
to the Task Force on
Climate-related
Financial Disclosures
Pioneering leadership
• Understand and engage
in emerging areas of
best practice such as
the Science Based
Targets Network for
Nature and the Taskforce
on Nature-related
Financial Disclosures
Progress in 2022
Actions:
• Campaign to promote
awareness of the ‘Speak Up’:
confidential reporting system
• Review and update of
People policies
• Updated Cyber Security Policy
• ESG data audit
• New governance model
to support delivery of
EDI objectives
Data
• Four Sustainability
Committee meetings
• Over 30 sustainability
working group meetings
• Responsible Procurement
Policy signed by 73% of
main suppliers
• 95% of suppliers compliant
with ISO 14001: 2015
environmental
management standard
• 12 whistleblowing reports
(four in 2021)
• Modern Slavery
training delivered to 194
employees in targeted
areas of the business
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Environmental, social and governance continued
Our people: Aston Martin’s success is thanks to the skill and commitment of its people, dedicated to becoming the world’s most desirable ultra-luxury British
performance brand. In 2022 we celebrated their invaluable contribution by unveiling a new feature at main locations, listing each individual who has worked for
and contributed to Aston Martin’s success since 1913.
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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.
Reporting requirements
Policies and standards which govern our approach
Where material information can be found
Environmental
Matters
• Environmental Policy
Employees
• Diversity and Inclusion Policy
• Group Health and Safety Policy
• Confidential Reporting and Whistleblowing Policy
• Gender Pay Gap Report
Anti-Bribery
and Corruption
Human Rights
Stakeholder
• Anti-Bribery and Corruption Policy
• Group Conflicts of Interest Policy
• Hospitality and Gifts Policy
• Anti-Money Laundering Policy
• Anti-Slavery and Human Trafficking Policy
• Modern Slavery Statement
• Responsible Procurement Policy
• Data Protection Policy
Social
• Environmental Policy
Non-Financial Key
Performance Indicators
Principal Risks
Business Model
• ESG disclosures, pages 52-78
• Sustainability Report www.astonmartinlagonda.com
• Stakeholder engagement, pages 22-25
• TCFD report pages 58-67
• Caring for our people and stakeholder engagement,
pages 70-73
• Governance Report, pages 86-145
• Audit and Risk Committee Report, pages 114-121
• Remuneration Report, pages 124-145
• Gender Pay Gap Report, page 73 and
www.astonmartinlagonda.com
• ESG disclosures, page 52-78
• Governance Report, pages 86-145
• Audit and Risk Committee Report, pages 114-121
• Modern Slavery Statement,
www.astonmartinlagonda.com
• ESG disclosures, pages 52-78
• Stakeholder engagement, pages 22-25
• s.172 Statement, pages 106-107
• Board activities, pages 100-101
• ESG disclosures, pages 52-78
• Stakeholder engagement, pages 22-25
• Key performance indicators, pages 44-45
• Strategic Report, pages 4-85
• Our approach to risk, pages 80-85
• Principal and emerging risks, pages 80-85
• Business model, pages 26-27
• Business model, pages 26-27
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Risk and viability report
Risk management
How we manage risk
Our Internal Audit & Risk
Management team maintains
the ERMFS and coordinates risk
management activities across
the Group, leveraging a
network of functional Risk
Champions embedded within
management (our first line of
defence). Each principal risk
has a risk mitigation plan
incorporating management’s
assessment of gross, net and
target risk together with an
assessment of 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.
Risk governance
We manage risks in the pursuit
of our strategic objectives
using our ERMFS which provides
the Board, the 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.
•
The key elements and activities
supporting our ERMFS include:
annual review and approval
•
of the ERMFS and Risk
Management Policy;
bi-annual review of principal
risks to assess the gross, net
and target 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;
•
•
• creating formal risk
•
mitigation plans for all
principal risks; and
provision of independent and
objective assurance by the
Internal Audit team 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 as the Group has
been subject to ongoing
supply chain issues through
the second half of the year
which has disrupted production;
• brand/reputational damage
– risk reducing reflecting the
positive impact of successful
rebranding and fixed
marketing investment
which has enhanced the
brand proposition;
• cyber security and IT
resilience – risk reducing
reflecting further
enhancement in the cyber-
security prevention and
detection capabilities; and
• climate change – risk
reducing as the control and
governance framework
matures to deliver on our
Racing. Green. strategy,
with actions taken to date
and plans being developed to
deliver on our net-zero ambition.
80
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Risk category
Risk appetite
Compliance
Zero tolerance
Financial
Low tolerance
Climate change Low tolerance
Strategic
Operational
Moderate
tolerance
Moderate
tolerance
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.
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.
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 2022. 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 Management
Committee
Board and Audit and
Risk Committee
• Identifies and assesses
new and emerging risks
• Performs deep-dive reviews
of risk mitigation plans
• Meets quarterly and
reports to the Audit and
Risk Committee and
Executive Committee
• Representation from
all functions across
the business
• Ensures risks are managed
in accordance with the
Board’s defined risk appetite
Champions effective risk
management and control
across the business
•
• 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
• Review outputs of principal
risk mitigation plan reviews
Internal Audit & Risk Management
• Coordinates deployment of the ERMFS
• Maintains the corporate risk register
• Presents Board, Audit and Risk Committee
and Executive Committee risk status updates
• Provides resources and training to support risk
management activities
• Evaluates the design and operating effectiveness
of principal risk mitigation plans
Functional risk champions and risk owners
• Responsible for risk management at a
functional level
• Maintain functional (bottom-up) risk registers
and manage and develop risk mitigation plans
• Champion adherence to ERMFS principles and
guidance within their functions
• Consider emerging risks and escalate to the
Risk Management Committee as appropriate
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
81
Strategic Report
Corporate Governance
Financial Statements
Further Information
4
86
164
230
Risk and viability report continued
Principal risk summary
Strategic risks
Macroeconomic and
political instability
Brand/reputational
damage
Technological
advancement
Climate
change
Climate change risks
Financial risks
Compliance risks
Operational risks
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,
remain competitive and stay ahead
of regulatory requirements.
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, taxes and other
regulatory restrictions on ICE vehicles.
Liquidity
development costs
and regulations
and retention
Impairment of capitalised
Compliance with laws
Talent acquisition
The Group may not be able to generate
The value of capitalised development
Non-compliance with local laws or
We may fail to retain, engage and
costs continues to grow as we invest in
regulations could damage our
develop a productive workforce
and expand our product portfolio.
corporate reputation and subject the
and to develop key talent.
sufficient cash to fund its capital
expenditure, service its debt or
sustain its operations.
Group to significant financial penalties
and/or trading sanctions/restrictions.
Risk movement
Risk appetite
MODERATE
Risk movement
Risk appetite
LOW
Risk movement
Risk appetite
LOW
Risk movement
Risk appetite
LOW
Risk movement
Risk appetite
Risk movement
Risk appetite
Risk movement
Risk appetite
Risk movement
LOW
LOW
ZERO
Risk appetite
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
Potential impact on business
• Global economic slowdown
reducing demand for vehicles
• Unfavourable movement in
exchange rates
• Adverse economic global
conditions could adversely impact
our dealer network or supply chain
• Commodity price increases and
•
other inflationary pressure
Increasing interest rates
impacting the affordability
of finance for customers
Potential impact on business
• Product recall or quality issues
could impact customer confidence
and result in reduced demand
• Late delivery of new models/variants
could impact customer confidence
and loyalty and delay sales
• Failure to adhere to Dealer
Operating Standards may result in
the dealer network being ineffective
in promoting and maintaining brand
awareness and interest
Inadequate dealer training in new
products and technologies could
impair the customer experience
•
• Activist action could result in
damaged brand perception
Potential impact on business
• The Group is reliant on strategic
partnerships with 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
• Failure to incorporate new
technology into vehicles may affect
our ability to remain competitive
Risk mitigation
• Regular operational and financial
Risk mitigation
• Standardised embedded quality
reviews of the business
• Capital raise completed in 2022
to provide additional liquidity
• Business plan developed taking
account of current macroeconomic
environment
• Monitoring global market trends
to target areas for future growth
• Routine monitoring of dealer
stock levels to support build-to-
order 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
• Regional marketing plans developed
quarterly to drive sales pipeline
programme to drive increased
brand awareness and salience,
including sponsorship of the
Aston Martin Aramco Cognizant
Formula One™ Team
• 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
• Development of commodity
•
strategy plans
Investment in Electrical
Engineering team
for new sports cars
• Fixed marketing investment
• Development of new interiors
Legend
Brand
Product innovation
Sustainability
Team
• Establishment of Connected Car
team to develop stronger customer
proposition for in-car technology
carbon credits to reduce exposure
to carbon-related financial penalties
and taxes and carbon offsetting
• Creation of an Innovation and
• Sourcing of 100% renewable
Advanced Technology group with
dedicated budget and process to
advance innovative technology in
advance of programme requirements
82
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Potential impact on business
Transition risks
• Policy – new tailpipe emissions
reduction targets or loss of small
volume derogation status could
lead to increased carbon taxes
and import tariffs
• Market – customer preferences may
move towards non-ICE powertrain
options faster than anticipated
• Technology – disruption from new
technologies or new market
entrants together with increased
demand for sustainable products
• Reputation – inability to create a
credible sustainability proposition
as we manage the transition from
ICE to EV powertrains, or brand
damage caused by activist activity
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
• Racing. Green. strategy launched and
the establishment of the Sustainability
Committee to oversee its implementation
• Strategic partnerships to develop
•
•
PHEV and EV powertrains
Investment in R&D to develop PHEV/
BEV powertrain capabilities to enable
first delivery of PHEV in 2024 and
targeting our first BEV launch in 2025
Investment in R&D to reduce average
fleet GHG emissions
• Forward purchase/pooling of
electricity to power UK 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 target to increase biodiversity
at our operations.
• Setting annual 2.5% reduction in
Scope 1 emissions targets and plans
Potential impact on business
• Significant leverage levels
Potential impact on business
Potential impact on business
• Vehicle sales volumes fall below
• Non-compliance with product
Potential impact on business
• Failure to build the right
may inhibit our ability to raise
lifecycle plans and targets as a
regulations (including emissions,
capabilities and behaviours
additional capital
result of the impact of
noise, connected car security etc.)
in our leadership team
• Significant debt servicing
macroeconomic factors such
could inhibit the Group’s ability to
• Failure to engage or equip our
requirements reduce cash available
as the current cost of living crisis
sell in certain markets
to support other operational needs
and continuing global economic
• Non-compliance with corporate
• Liquidity restrictions could impact
uncertainty and inflationary
planned R&D investment
pressure or rising interest costs
• Delays in payment to suppliers to
• Vehicle pricing and contribution
conduct laws and regulations
(including labour laws, human
rights laws etc.) could result in
teams to deliver our strategy
or address key capability gaps
•
Inability to fill key open positions
may inhibit our ability to electrify
our product portfolio in line with
manage short term cash requirements
reduce to levels which no longer
financial penalties and/or brand/
published timeframes
could result in supply chain disruption
support the carrying value of the
reputational damage
attributable capitalised costs
• Failure to keep pace with increasing
• Uncertainty of ‘Carry Over – Carry
stakeholder expectations to go
Across’ utilisation on future vehicle
beyond evolving ESG reporting
models and derivatives
requirements could result in brand/
reputational damage which could
ultimately affect our sales pipeline
and planned growth
Risk mitigation
Risk mitigation
Risk mitigation
Risk mitigation
• £654m equity capital raise
• Capitalisation policy and
• Procedures are in place to obtain
• Remuneration Committee oversight
completed in July 2022
procedures reviewed annually
Vehicle Type Approval and
of senior leadership remuneration
• Renewed wholesale financing
•
Impairment reviews performed
homologation for all new production
to ensure it is aligned to the strategy
facilities implemented to facilitate
where triggering events have
vehicles from the appropriate vehicle
and appropriate for staff retention
faster cash collection
been identified
certification agencies to ensure that
• Regular review of talent and
• Successful completion of $200m
• Regular vehicle line reviews
vehicles meet the required performance
resource risks leveraging succession
debt tender in October 2022
undertaken to monitor sales
standards for the markets they are sold in
plans and employee engagement
• New products targeting minimum
volume and contribution
• Processes in place to track and monitor
survey results
contribution levels of 40% to drive
performance for all car lines
compliance with emissions reduction
• Benchmarking of bonus and
profit and cash generation
with any concerns communicated
targets and other regulatory standards
remuneration packages to drive
• Regular management review of cash
to Finance for consideration of
• Corporate policies define our
and working capital balances
potential impairment
• Regular expenditure reviews held
• New product set entry level
with the CEO and CFO and regular
investment targets of 40%
standards of behaviour in relation
to key compliance areas (including
anti-bribery and corruption,
employee performance and
behaviours and remain attractive
to external candidates in a buoyant
UK job market
liquidity-focused Board reviews
minimum contribution levels
responsible procurement, health
• Launch of Company values; Unity,
• Monthly Treasury Committee
• Ongoing transformation activity
to deliver targeted cost savings
and efficiencies
• Cash pooling and repatriation of
cash to ensure funds are available
for Group priorities
and safety, anti-slavery and human
Openness, Trust, Ownership and
trafficking, environmental). We have
Courage, based around the concept
a confidential reporting system,
overseen by the Audit and Risk
Committee, which enables the
that ‘no-one builds an Aston Martin
on their own’
• Talent review exercise undertaken
reporting of any suspected breach
for senior management and
of policy or misconduct.
above population
• Sustainability Committee provides
• Company-wide performance bonus
oversight of the implementation of
scheme to drive performance,
the Group’s Racing. Green. strategy,
embedding key finance and quality
supported by ten working groups.
measures and targets
Strategic risks
Macroeconomic and
political instability
Brand/reputational
damage
Technological
advancement
Climate change risks
Climate
change
Exposure to multiple political and
Our brand and reputation are critical
It is essential to maintain pace with
The impact of climate change could
economic factors could impact
customer demand or affect the
markets in which we operate.
in securing demand for our vehicles
technological development to meet
significantly impact demand for our
and in developing additional
evolving customer expectations,
vehicles, our ability to sell within
revenue streams.
remain competitive and stay ahead
certain markets or have financial
of regulatory requirements.
consequences through increased
carbon pricing, taxes and other
regulatory restrictions on ICE vehicles.
Financial risks
Liquidity
Impairment of capitalised
development costs
Compliance with laws
and regulations
Compliance risks
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 could damage our
corporate reputation and subject the
Group to significant financial penalties
and/or trading sanctions/restrictions.
Operational risks
Talent acquisition
and retention
We may fail to retain, engage and
develop a productive workforce
and to develop key talent.
Risk movement
Risk movement
Risk appetite
Risk movement
Risk appetite
Risk movement
Risk appetite
LOW
LOW
LOW
Risk appetite
MODERATE
Risk movement
Risk appetite
LOW
Risk movement
Risk appetite
LOW
Risk movement
Risk appetite
ZERO
Risk movement
Risk appetite
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
Potential impact on business
• Significant leverage levels
may inhibit our ability to raise
additional capital
• Significant debt servicing
requirements reduce cash available
to support other operational needs
• Liquidity restrictions could impact
planned R&D investment
• Delays in payment to suppliers to
manage short term cash requirements
could result in supply chain disruption
Potential impact on business
• Vehicle sales volumes fall below
lifecycle plans and targets as a
result of the impact of
macroeconomic factors such
as the current cost of living crisis
and continuing global economic
uncertainty and inflationary
pressure or rising interest costs
• 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
Potential impact on business
• Non-compliance with product
regulations (including emissions,
noise, connected car security etc.)
could inhibit the Group’s ability to
sell in certain markets
• Non-compliance with corporate
conduct laws and regulations
(including labour laws, human
rights laws etc.) could result in
financial penalties and/or brand/
reputational damage
• Failure to keep pace with increasing
stakeholder expectations to go
beyond evolving ESG reporting
requirements could result in brand/
reputational damage which could
ultimately affect our sales pipeline
and planned growth
Potential 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
Inability to fill key open positions
may inhibit our ability to electrify
our product portfolio in line with
published timeframes
•
Risk mitigation
• £654m equity capital raise
completed in July 2022
• Renewed wholesale financing
•
facilities implemented to facilitate
faster cash collection
• Successful completion of $200m
debt tender in October 2022
• New products targeting minimum
contribution levels of 40% to drive
profit and cash generation
• Regular management review of cash
and working capital balances
Risk mitigation
• Capitalisation policy and
procedures reviewed annually
Impairment reviews performed
where triggering events have
been identified
• Regular vehicle line reviews
undertaken to monitor sales
volume and contribution
performance for all car lines
with any concerns communicated
to Finance for consideration of
potential impairment
• Regular expenditure reviews held
with the CEO and CFO and regular
liquidity-focused Board reviews
• New product set entry level
investment targets of 40%
minimum contribution levels
• Monthly Treasury Committee
• Ongoing transformation activity
to deliver targeted cost savings
and efficiencies
• Cash pooling and repatriation of
cash to ensure funds are available
for Group priorities
Risk mitigation
• Procedures are in place to obtain
Vehicle Type Approval and
homologation for all new production
vehicles from the appropriate vehicle
certification agencies to ensure that
vehicles meet the required performance
standards for the markets they are sold in
• Processes in place to track and monitor
compliance with emissions reduction
targets and other regulatory standards
• Corporate policies define our
standards of behaviour in relation
to key compliance areas (including
anti-bribery and corruption,
responsible procurement, health
and safety, anti-slavery and human
trafficking, environmental). We have
a confidential reporting system,
overseen by the Audit and Risk
Committee, which enables the
reporting of any suspected breach
of policy or misconduct.
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
• Launch of Company values; Unity,
Openness, Trust, Ownership and
Courage, based around the concept
that ‘no-one builds an Aston Martin
on their own’
• Talent review exercise undertaken
for senior management and
above population
• Sustainability Committee provides
oversight of the implementation of
the Group’s Racing. Green. strategy,
supported by ten working groups.
• Company-wide performance bonus
scheme to drive performance,
embedding key finance and quality
measures and targets
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
83
Potential impact on business
Potential impact on business
Potential impact on business
Potential impact on business
• Global economic slowdown
reducing demand for vehicles
• Unfavourable movement in
exchange rates
• Product recall or quality issues
• The Group is reliant on strategic
could impact customer confidence
partnerships with third parties
and result in reduced demand
to support development of new
• Late delivery of new models/variants
and emerging technologies
• Adverse economic global
could impact customer confidence
• Competitors may have better
conditions could adversely impact
and loyalty and delay sales
our dealer network or supply chain
• Failure to adhere to Dealer
access to funding to develop
new technology faster and be
• Commodity price increases and
Operating Standards may result in
first to market
other inflationary pressure
•
Increasing interest rates
impacting the affordability
of finance for customers
the dealer network being ineffective
• Changing and more stringent
in promoting and maintaining brand
regulations may make current
awareness and interest
technology obsolete and increase
•
Inadequate dealer training in new
the risk of future non-compliance
products and technologies could
• Failure to incorporate new
impair the customer experience
technology into vehicles may affect
our ability to remain competitive
• Activist action could result in
damaged brand perception
Transition risks
• Policy – new tailpipe emissions
reduction targets or loss of small
volume derogation status could
lead to increased carbon taxes
and import tariffs
• Market – customer preferences may
move towards non-ICE powertrain
options faster than anticipated
• Technology – disruption from new
technologies or new market
entrants together with increased
demand for sustainable products
• Reputation – inability to create a
credible sustainability proposition
as we manage the transition from
ICE to EV powertrains, or brand
damage caused by activist activity
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
Risk mitigation
Risk mitigation
Risk mitigation
• Regular operational and financial
• Standardised embedded quality
• Strategic arrangements with key
• Racing. Green. strategy launched and
reviews of the business
• Capital raise completed in 2022
to provide additional liquidity
• Business plan developed taking
procedures (e.g., 300 Call
Procedure, Customer Perception
Audit, Parts Approval Process) to
maintain focus on vehicle quality
account of current macroeconomic
• Expanded dealer network and
powertrain and
electrical architecture
partners, including the Strategic
Cooperation Agreement with
the establishment of the Sustainability
Committee to oversee its implementation
Mercedes-Benz AG, to provide
• Strategic partnerships to develop
environment
improved training to ensure delivery
• Development of commodity
• Monitoring global market trends
of a luxury customer experience
strategy plans
to target areas for future growth
• Regional marketing plans developed
•
Investment in Electrical
• Routine monitoring of dealer
quarterly to drive sales pipeline
Engineering team
stock levels to support build-to-
• Fixed marketing investment
• Development of new interiors
fleet GHG emissions
order strategy
PHEV and EV powertrains
•
Investment in R&D to develop PHEV/
BEV powertrain capabilities to enable
first delivery of PHEV in 2024 and
targeting our first BEV launch in 2025
•
Investment in R&D to reduce average
programme to drive increased
brand awareness and salience,
including sponsorship of the
for new sports cars
• Forward purchase/pooling of
• Establishment of Connected Car
carbon credits to reduce exposure
team to develop stronger customer
to carbon-related financial penalties
Aston Martin Aramco Cognizant
proposition for in-car technology
and taxes and carbon offsetting
Formula One™ Team
• Creation of an Innovation and
• Sourcing of 100% renewable
• Quality-led production ramp up for
Advanced Technology group with
electricity to power UK operations
the Aston Martin Valkyrie programme
dedicated budget and process to
• Committing to the SBTi to establish
advance innovative technology in
and track GHG reduction targets to
advance of programme requirements
establish a credible roadmap to
net-zero in our manufacturing facilities
by 2030 and our supply chain by 2039
• Setting target to increase biodiversity
at our operations.
• Setting annual 2.5% reduction in
Scope 1 emissions targets and plans
Strategic Report
Corporate Governance
Financial Statements
Further Information
4
86
164
230
Risk and viability report continued
Principal risk summary continued
Operational risks
Programme
delivery
Failure to implement major
programmes on time, within
budget and to the right technical
specification could jeopardise
delivery of our strategy and have
significant adverse financial and
reputational consequences.
Achieving financial and
cost-reduction targets
Cyber security
and IT resilience
Supply chain
disruption
The Group’s size and low-volume
demand-led 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 increased costs.
Risk movement
Risk appetite
MODERATE
Risk movement
Risk appetite
LOW
Risk movement
Risk appetite
LOW
Risk movement
Risk appetite
LOW
Link to strategy
Link to strategy
Link to strategy
Link to strategy
Potential impact on business
•
Insufficient funds to support current
programme investment requirements
Inability to manage third-party
delivery in line with programme
timelines and milestones
•
• Failure to adhere to the ‘Mission’
programme delivery governance
framework could result in delayed
launch of vehicles or unforeseen
quality issues
• Delays in new Enterprise Resource
Planning (“ERP”) system go-live
dates could expose the Group to
increased risk of IT failure and
resultant disruption to production
and engineering activities
Potential 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
Potential impact on business
• Suppliers may be unable to
meet delivery schedules due
to being in financial distress
• Unforeseen supplier failures,
or disruption, can lead to
production stoppages caused
by delays in sourcing parts
• 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
•
Potential impact on business
• High levels of complexity across
car lines can drive increased
engineering requirements with
associated increased resource
and cash requirements
Inflationary pressure on key
input costs (e.g., raw materials,
commodities, energy, labour)
makes achievement of targeted
reductions more challenging
Instability in the supply base
due to economic volatility may
reduce opportunities to identify
cost savings
•
• Ultra-luxury positioning demands
the necessary marketing spend
to generate brand and product
awareness to build desirability
and create future demand
Risk mitigation
• Deployment of an established
Risk mitigation
• Cross functional team
programme delivery methodology
and regular Product Committee
status reporting and oversight
• Restructure of business to Project
Team focus with a Team Leader
responsible for financials /
quality / timing
• Enhanced focus on R&D financial
forecasting for all capital expenditure
• Addition of innovation team to
create new technologies to an
appropriate Technology /
Manufacturing Readiness Level
• New model pilot production line
established in Gaydon to facilitate
new product development
• Establishment of New Model
Quality and Quality Business
Planning teams to improve
quality management activity
transformation activity with
agreed cost target process and
regular CEO-led cost reviews
• Development of commodity
strategy with strategic suppliers to
drive resilience and cost efficiency
• Synergies from leveraging
common commodity strategies
across platforms
Increased focus on supply
chain risk analysis
•
• Targeted marketing activity with
support from key external agencies
to ensure the necessary return on
investment is obtained from
marketing spend
• Budget and business planning
activity reassessed in consideration
of current inflationary headwinds
Risk mitigation
• Project continuing to deliver a
new ERP system through 2023 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,
SentinelOne and cyber incident
response procedures
• Significant investment in in-house
Information Security team to mature
cyber security control framework
• Benchmarking of cyber security
controls against the National
Institute of Standards & Technology
(“NIST”) governance framework
Risk mitigation
• 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
•
• Periodic due diligence performed
on key suppliers including Dun &
Bradstreet financial health checks
• Supplier strategy implemented to
develop strategic and sustainable
partnerships to improve supply
chain resilience
• Supply chain and logistics
transformation project commenced
Legend
Brand
Product innovation
Sustainability
Team
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Risk management activities
in 2022 and plans for 2023
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.
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 in July 2022.
The Risk Management
Committee met three
times during 2022.
Management actions
and deep dives
The Internal Audit &
Risk Management team
incorporates independent
validation reviews of the
principal risk mitigation plans
within its annual Audit Plan,
the purpose being to provide
independent assurance to
management, the Audit
and Risk Committee and
the Board on the effectiveness
of management actions to
mitigate risks.
The 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 2022 the following key
risk management activities
have been undertaken:
• Three Risk Management
Committee meetings
with deep-dive risk
reviews covering:
– political instability and
supply chain risks associated
with the war in Ukraine
– climate change transitional
and physical risks; and
– fraud risk assessment.
• Workshops held to formalise
Group response to climate-
related transition risks.
• Independent cyber security
risk and control maturity
assessment and
benchmarking against the
NIST global framework.
• 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 and
Risk Management Policy.
The following principal risk
mitigation plan reviews have
been included within the 2023
Internal Audit plan:
• Programme delivery
• Ability to recruit and retain
required talent.
Viability Statement
The Directors have carried out
a robust review of the principal
risks of the Group, which are
set out on pages 82-84,
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 2022 to December 2027.
This was considered appropriate
by the Directors because it aligns
with the business plan and 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 to 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 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
2027 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 2027.
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.
The Strategic Report was
approved by the Board and
signed on its behalf by:
Amedeo Felisa
Chief Executive Officer
28 February 2023
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Corporate Governance
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
“Strong leadership and governance
provide us with the foundations
for our long-term growth.”
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Corporate Governance continued
An overview of governance
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.
Board nationality statistics
British
American
Canadian
Italian
Saudi Arabian
5
5
1
3
1
Natalie Massenet has dual British and American nationality and Antony Sheriff
has dual Italian and American nationality
Our Board composition
Board sector experience
Shareholder Representative Directors
(including the Executive Chairman) 5
Executive Directors
2
Independent
Non-executive Directors
6
Engineering
Automotive
Luxury brand
Finance/banking
Marketing/commercial
Legal
3
3
4
4
3
1
Some members of the Board have sector experience in more than one category
Board gender statistics
Our major shareholders
38%
50%
of Board positions which are
not shareholder nominated
are held by women
of our Independent
Non-executive Directors
are women
Yew Tree Consortium*
Public Investment Fund*
Invesco
Mercedes*
Geely
%
28.4
18.7
10.2
9.8
7.6
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
*
Denotes a major shareholder with Board representation in accordance with
the respective Relationship Agreement entered into between the Company
and that shareholder.
Executive Chairman’s introduction to governance
onwards, that at least one
Director on the Board is from
an ethnic minority background.
Listening to our employees
Success is through our people
and our culture is as important
as strategy. As a Board we need
to understand the culture at
Aston Martin, how it is changing
and how it impacts the delivery
of our strategy. Anne Stevens
and Marigay McKee both took
the opportunity to spend time
with members of the workforce
during the year, sharing their
experience and listening to
employee feedback. You
can read more about this
on pages 102-103.
Board evaluation
Due to the Board composition
significantly changing again
this year, rather than an external
Board evaluation, we decided
to undertake an internal
evaluation but with the
assistance of a third-party
provider which assisted with
the questionnaires and the
analysis of the results and
provided external benchmark
data. More information on our
Board evaluation is set out
on pages 108-109.
I would like to thank all the
members of the Board for their
significant efforts and valuable
contributions during the year.
I would also like to take this
opportunity to thank our
employees, our customers,
our shareholders and all our
other stakeholders for your
continued support.
Yours sincerely,
Lawrence Stroll
Executive Chairman
In October we announced
the appointment of Sir Nigel
Boardman as an Independent
Non-executive Director. Sir
Nigel has also been appointed
to the Audit and Risk Committee
and the Nomination Committee.
Sir Nigel was a partner at the law
firm Slaughter and May from
1992–2019 and his extensive
corporate experience makes him
a great addition to our independent
Non-executive Directors.
Following the completion of
our capital raise, in November
we announced the appointment
of the two Shareholder
Representative Directors for
the Public Investment Fund,
Ahmed Al-Subaey and Scott
Robertson. Their appointments
to the Board are an important
part of our relationship with the
Public Investment Fund, our
second largest shareholder.
Board diversity
We have amended our Board
Diversity Policy to reflect the
spirit of the FTSE Women
Leaders Review and the
Financial Conduct Authority’s
new diversity targets, so that
the Board seeks to achieve
and maintain 40% of Board
positions which are not
subject to shareholder
appointments to be held
by women. That percentage
is currently 38%. The Board
is committed to achieving
and maintaining diversity at
Board level and throughout
the business in line with the
FTSE Women Leaders Review
and the Financial Conduct
Authority’s new diversity
targets and will continue
to monitor the progress
being made.
The Board has already met
one of the Financial Conduct
Authority’s new targets,
which will be effective for
financial accounting periods
commencing 1 April 2022
Dear shareholder
I am pleased to introduce the
Governance section of this
year’s Annual Report. In this
section we provide detail on our
corporate governance at Aston
Martin, how we make decisions
and how we comply with the UK
Corporate Governance Code.
Effective governance, together
with the strength of leadership
of our Board, provides us with
the foundations to execute and
deliver our strategic objectives.
Good governance also provides
a platform for us to achieve
cultural change. It creates an
environment of accountability
and empowerment, in line with
our values.
The Board has closely
monitored culture within
the business throughout the
year as we continue to navigate
times of macro uncertainty
and challenges specific to our
business. The Board is confident
that we have the right leadership
and talent throughout the
business to Accelerate. Forward.
Board changes
The composition of the Board
has continued to evolve this
year. Amedeo Felisa became
our Chief Executive Officer
in May, having been a Non-
executive Director of the
Company since July 2021.
Amedeo is one of the most
highly regarded leaders and
engineering professionals in
the high-performance luxury
sports car sector having spent
his entire career in automotive
and engineering with over
26 years in leadership roles
at Ferrari, including eight as
Chief Executive Officer. We are
very fortunate to benefit from
his engineering and product
development expertise as we
work towards our roadmap
to electrification.
Also in May, Doug Lafferty
became Chief Financial Officer.
Doug’s experience as a FTSE
250 Chief Financial Officer and
his work for the Williams racing
team is incredibly valuable to
the Board as we continue to
focus on delivering our
strategic objectives and
financial targets.
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Corporate Governance continued
Board of Directors
Executive Directors
Key
Chair
Observer
A Audit and Risk Committee
N Nomination Committee
R Remuneration Committee
S Sustainability Committee
W Warrant Share Committee
Other Directors serving
during the year
Tobias Moers
Stepped down as Chief Executive
Officer on 4 May 2022.
Kenneth Gregor
Stepped down as Chief Financial
Officer on 1 May 2022.
Lawrence Stroll N R W
Executive Chairman
20.04.20
Amedeo Felisa W
Chief Executive Officer
since May 2022 04.05.22
Doug Lafferty W
Chief Financial Officer
since May 2022 01.05.22
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 including
Polo Ralph Lauren, Tommy Hilfiger
and Michael Kors 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 Aramco
Cognizant F1® team in 2021.
External appointments
Member of Yew Tree Consortium
Co-owner Aston Martin Aramco
Cognizant F1™ team
AMR GP Services Limited
AMR GP Limited
Skills and relevant experience
Amedeo was appointed Chief
Executive Officer in May 2022
having previously served on the
Board as a Non-executive Director
since July 2021. 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.
Prior to joining Ferrari, Amedeo was
a product development team leader
at Alfa Romeo S.p.A. Amedeo was
awarded a degree in mechanical
engineering from the Milan
Polytechnic University.
Skills and relevant experience
Doug Lafferty was appointed
Chief Financial Officer in May 2022.
Prior to joining Aston Martin, Doug
was the Chief Financial Officer of
FTSE 250-listed fuel retailer Vivo
Energy plc. He previously spent
three years as Chief Financial Officer
for Williams Grand Prix Holdings
plc and 16 years in a wide range of
senior finance and leadership roles
at British American Tobacco.
Doug is a member of CIMA and
holds a BSc Hons in Management
Studies from Royal Holloway,
University of London
External appointments
None
External appointments
Atop S.p.A (Chairman)
IMA Group (Senior Advisor
to the Chairman)
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Independent Non-executive Directors
Antony Sheriff A N R S
Senior Independent Non-executive
Director
01.02.21
Robin Freestone A N R
Independent Non-executive
Director 01.02.21
Dame Natalie Massenet, DBE R
Independent Non-executive
Director
08.07.21
Marigay McKee MBE S
Independent Non-executive
Director 08.07.21
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.
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
(Chief Executive Officer)
Pininfarina S.p.A.
(Independent Non-executive Director)
Bugatti Rimac d.o.o.
(Independent Non-executive Director)
Skills and relevant experience
Robin 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 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)
Capri Holdings Ltd (Lead Director)
Skills and relevant experience
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. 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.
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).
In 2016 Natalie was made Dame
Commander of the British Empire
in recognition of her contributions
to the UK fashion and retail industry.
External appointments
Imaginary Ventures
(Managing Partner)
Everlane Inc (Director)
Skills and relevant experience
Marigay has extensive retail sales,
marketing and luxury brand
experience. In 2018, Marigay co-
founded Fernbrook Capital LLC,
a venture fund based in New York
and Los Angeles, specialising in
consumer tech. 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’ luxury launch
platform for new and emerging
and international brands.
In the 2022 Queen’s New Year
Honours List, Marigay was awarded
an MBE in recognition of her
services to British retail overseas.
External appointments
Fernbrook Capital LLC (Director)
EShopWorld
(Advisory Council Member)
The Webster (Board Member)
The Shed (Board Member)
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Corporate Governance continued
Board of Directors continued
Independent Non-executive Directors continued
Shareholder
representative Directors
Lawrence Stroll Executive
Chairman, Representative of the Yew
Tree Consortium (see page 90)
Key
Chair
Observer
A Audit and Risk Committee
N Nomination Committee
R Remuneration Committee
S Sustainability Committee
W Warrant Share Committee
Dr. Anne Stevens A N R S
Independent Non-executive
Director 01.02.21
Workforce engagement Director
Sir Nigel Boardman A N
Independent Non-executive
Director 01.10.22
Skills and relevant experience
Sir Nigel joined the Board in
October 2022. He was partner at
the law firm Slaughter and May
from 1982 until 2019 specialising
in mergers and acquisitions and
corporate advisory and remained
a consultant at the firm until early
2022. Sir Nigel was awarded a
Knighthood in the Queen’s Birthday
Honours List in June 2022 for
services to the legal profession.
Sir Nigel is Chair of Help for Heroes,
a military veterans charity, is Trustee
and Chair designate of The Medical
College of Saint Bartholomew’s
Hospital Trust, a charity funding
medical research and is Trustee
Emeritus and member of the audit
committee for the British Museum.
He was previously a Non-executive
board member of the Department
for Business, Energy & Industrial
Strategy and chaired its audit
committee.
External appointments
Arbuthnot Latham (Chair)
Arbuthnot Banking Group
(Non-executive Director)
Mile Group Unlimited (Chair)
Glyde Group Unlimited (Chair)
Skills and relevant experience
Anne brings to the Board significant
operational, commercial and
transformational experience in
global businesses. Anne is an
engineer and started her career in
the chemical industry with Exxon
Corporation 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
and Lockheed Martin before joining
GKN plc as a Non-executive
Director where she was briefly
CEO during the hostile takeover by
Melrose plc in 2018. 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
Harbour Energy plc
(Non-executive Director and
Remuneration Committee Chair)
Michael de Picciotto A W
Non-executive Director,
Representative of the
Yew Tree Consortium 24.04.20
Skills and relevant experience
Michael is a prominent investor
and businessman who has extensive
experience in asset management,
private banking and trading.
Michael started his career at RBC
Dominion Securities, a global
Canadian investment bank before
joining 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.
He also served as a long-standing
member of the Executive Board
of UBP 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, which was sold
in August 2021 to the investment
fund Permira.
Michael studied at the Ecole des
Hautes Etudes Commerciales
at the University of Lausanne.
External appointments
Member of the Yew Tree
Consortium
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Shareholder representative Directors
Company Secretary
Franz Reiner A N R
Non-executive Director,
Representative of
Mercedes-Benz AG 08.07.21
Ahmed Al-Subaey
Non-executive Director
Representative of the Public
Investment Fund 01.11.22
Scott Robertson A N R
Non-executive Director:
Representative of the Public
Investment Fund 01.11.22
Liz Miles
Company Secretary
20.06.22
Skills and relevant experience
Ahmed Al-Subaey joined the Board
as Representative Non-executive
Director of the Public Investment
Fund in November 2022.
Skills and relevant experience
Scott Robertson joined the Board
as Representative Non-executive
Director of the Public Investment
Fund in November 2022.
Ahmed is Chief Executive Officer
of Bahri, the National Shipping
Company of Saudi Arabia, which is
listed on the Saudi Stock Exchange.
He was previously the CEO of S-Oil
in South Korea and has held various
leading roles in Saudi Aramco,
most recently Vice President
for Marketing, Sales and Supply
Planning. Ahmed holds a BSC
and Masters degree in electrical
engineering from the University
of Arizona and an executive MBA
from Stanford University.
External appointments
Bahri (CEO)
He is a Senior Director and the
Head of Public Investments in the
International Investments Division
at the Public Investment Fund (PIF)
of the Kingdom of Saudi Arabia.
Prior to joining the Public
Investment Fund in 2018, Scott
worked in various investment
positions at Soros Fund Management,
Paulson & Co. and Stonepeak
Partners. Scott holds a Bachelor
of Arts in Economics from Cornell
University, where he graduated
Phi Beta Kappa.
External appointments
Public Investment Fund
(Senior Director)
Skills and relevant experience
Liz joined Aston Martin as Company
Secretary in June 2022. Liz is a
solicitor and company secretary
with significant experience of
listed company governance
and compliance.
Prior to joining Aston Martin, Liz
was Company Secretary at Landsec,
a FTSE 100 property investment
and development company, having
previously worked at Vodafone
Group Plc in a variety of legal and
company secretariat roles and prior
to that in private practice at Linklaters.
Liz is a Fellow of the Chartered
Governance Institute.
The Company Secretary provides
advice and support to the Board,
its Committees and the Chairman,
and is responsible for corporate
governance across the Group.
The appointment and removal
of the Company Secretary is a
matter for the Board as a whole.
Skills and relevant experience
Franz is an industrial engineer
who holds a wealth of executive
experience and a deep understanding
of the global automotive industry.
He joined the Mercedes-Benz
Group in 1992 and in his 29 years
with Mercedes-Benz he has held
various senior and management
board positions within sales,
product management, banking and
financial services. In his current role
as Chairman and CEO of Mercedes-
Benz Mobility AG, he promotes
Mercedes-Benz’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.
External appointments
Mercedes-Benz Mobility AG
(CEO and Chairman of the Board)
VfB Stuttgart 1983 AG
(Supervisory Board Member)
Mercedes-Benz Leasing
Deutschland GmbH
(Supervisory Board member)
Allianz Global Corporate and
Speciality SE (Advisory Council)
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Executive Committee
Our Executive Committee
is made up of our Executive
Chairman, Chief Executive
Officer, Chief Financial
Officer (details of whom
are set out on page 90) and
the Chief roles set out below.
Michael Straughan
Chief Operating Officer
07.12.20
Marek Reichman
Chief Creative Officer
01.05.05
Marco Mattiacci
Chief Global Brand and
Commercial Officer 01.10.21
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 Nissan, 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.
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.
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
ten 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 One™ racing team. In
2016, Marco joined Faraday Future
in the USA, as its Global Chief Brand
Officer and Chief Commercial
Officer. Upon leaving Faraday in
2017, Marco advised automotive
clients with McKinsey & Company.
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Roberto Fedeli
Group Chief Technology Officer
Giorgio Lasagni
Chief Procurement Officer
01.06.22
01.01.23
Michael Marecki
General Counsel
02.07.07
Simon Smith
Chief People officer
11.04.22
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.
Simon joined Aston Martin Lagonda
in April 2022 as Chief People Officer.
Simon has extensive HR experience
across the engineering and
manufacturing sector, starting his
career with Peugeot and spending
a significant part of his career at
both Alstom and Rolls-Royce.
More recently Simon has held
transformation and strategy leading
HR roles at Johnson Matthey and
Legal and General Modular Homes.
Simon is a fellow of the CIPD,
is a qualified Executive Coach
and holds a BA Hons in Politics
and International Relations from
Lancaster University.
Roberto is Group Chief Technology
Officer at Aston Martin Lagonda,
leading the engineering team,
having joined the Company in
June 2022.
Giorgio joined Aston Martin
in January 2023 to lead the
procurement function. Giorgio
has extensive experience of
procurement and supply chain
management and strategy.
Roberto is a proven leader in the
luxury high-performance sports
cars sector. He is considered the
creator of Ferrari LaFerrari, the
Italian company’s first hybrid
supercar as well as some of its
most iconic models during his 26
year tenure.
Roberto brings his extensive
knowledge, passion for innovation
and his most recent experiences
in the implementation of
electrification technologies
during his time at BMW.
Roberto holds a Master’s degree
in Aerospace.
Giorgio joined Aston Martin from
Zoppas Industries S.p.A, an Italian
heating element company where
he was Global Purchasing and
Supplier Development Director
and redesigned the purchasing
and supplier development
functions. Prior to that Giorgio
was at Robur S.p.A, and Candy
Hoover Group S.p.A, holding a
number of Business Unit Director
and procurement positions.
Giorgio spent just under eight
years of his career at Ferrari S.p.A,
holding a variety of roles including
Purchasing and Supplier Development
Director and Ferrari & Maserati
Engine Manufacturing Director.
Giorgio holds a Master’s degree in
Architecture from the Politecnico
of Milan.
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Corporate Governance continued
Leadership and governance
Overview
This Report sets out the Board’s corporate governance structures
and work from 1 January 2022 to 31 December 2022. Together
with the Directors’ Remuneration Report on pages 125-145, 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.
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 2022, 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 149).
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, a major shareholder.
As disclosed in February 2020, his appointment was a condition
of the Yew Tree Consortium’s investment in the Company and
was in accordance with the Relationship Agreement entered
into between the Company and the Yew Tree Consortium. The
Nomination Committee and the Board consider that Lawrence
Stroll has demonstrated objective judgement throughout his
tenure and him continuing in the role of Executive Chairman for
the foreseeable future is in the best interests of the Group and
its stakeholders in order to utilise his proven leadership qualities
and his significant experience in building luxury brands. He has
offered himself for re-election every year since his appointment
and shareholders have overwhelmingly voted in favour of his
re-election. In the Board’s opinion, the Company’s governance
checks and balances are strong and effective:
• the Executive Chairman is subject to challenge from the Company’s
Senior Independent Director, the Executive Directors and the
Independent Non-executive Directors;
• the Independent Non-executive Directors make up 50% of the
Board (excluding the Executive Chair) and play an important
role in ensuring that no individual or group dominates the
Board’s decision-making process; and
• there is a clear division between the responsibilities of the
Executive Chairman, the Senior Independent Director, the
Executive Directors and the Independent Non-executive
Directors, which ensures accountability and oversight.
Code provision 21 states that the chair should consider having
a regular externally facilitated board evaluation. In FTSE 350
companies this should happen at least every three years.
The Board evaluation was due to be externally facilitated in
2021 but 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 postpone the
external evaluation. Due to the continuing Board changes in
2022, with a new Chief Executive Officer, a new Chief Financial
Officer, a new Independent Non-executive Director and two
new Shareholder Representative Directors joining the Board,
the Board concluded that once again there would be little value
in an externally facilitated evaluation. Therefore it was agreed
that a more rigorous internal evaluation would be carried out for
2022, with the assistance of a third-party survey which provided
a platform for more meaningful analysis of results. Further details
can be found on pages 108-109.
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 90-93. Details of the changes to
the Board during 2022 are set out on page 89. At the date of this
Report the Board comprised 13 members: the Executive Chairman,
the Chief Executive Officer, the Chief Financial Officer and ten
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 149 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.
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
pages 98-99 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. The
term of reference 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.
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A total of 14 Board meetings were held during the year: seven
scheduled and seven unscheduled. Attendance is set out below.
Lawrence Stroll
Amedeo Felisa
Doug Lafferty1
Antony Sheriff
Robin Freestone2
Natalie Massenet3
Marigay McKee4
Anne Stevens
Michael de Picciotto
Franz Reiner5
New Directors
Sir Nigel Boardman6
Ahmed Al-Subaey7
Scott Robertson8
Former Directors
Tobias Moers9
Ken Gregor10
14/14
14/14
9/9
14/14
11/14
12/14
13/14
14/14
14/14
12/14
2/2
1/1
1/1
5/6
5/6
1 Doug Lafferty joined the Board on 1 May 2022.
2
Robin Freestone missed three unscheduled Board meetings
due to the meetings being called at very short notice.
Natalie Massenet missed three unscheduled Board meetings
due to the meetings being called at very short notice.
Marigay McKee missed one unscheduled Board meeting due
to the meeting being called at very short notice
Franz Reiner missed a scheduled Board meeting in September
due to unavoidable business commitments.
3
4
5
6 Sir Nigel Boardman joined the Board on 1 October 2022.
7 Ahmed Al-Subaey joined the Board on 1 November 2022.
8 Scott Robertson joined the Board on 1 November 2022.
9 Tobias Moers stepped down from the Board on 4 May 2022.
10 Ken Gregor stepped down from the Board on 1 May 2022.
In instances where unscheduled Board meetings were called
upon very short notice and certain Board members were unable
to attend, the Company Secretary updated the Board members
following the meeting and the Directors were invited to provide
any comments or observations to the Executive Chairman.
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 advisors.
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.
Additionally, Directors have access to the advice and services
The Board’s terms of reference state that it must consider
and approve the following:
The Group’s strategic
aims, objectives and
commercial strategy
Major changes to
the Group’s corporate
structure, including
acquisitions and disposals
Major changes to the capital
structure including tax and
treasury management
Financial statements
and the Group dividend
policy including any
recommendation of
a final dividend
Review of performance
relative to the Group’s
business plans and budgets
The system of internal
controls and Risk
Management Policy
Major changes to accounting
policies or practices
The Group’s corporate
governance and compliance
arrangements
The Group’s risk appetite
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.
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 Executive
Chairman works closely with the Company Secretary to plan
and schedule Board and Committee meetings and to make
quality information available in a timely fashion.
Disclosure Committee
The Board delegates responsibility for the final approval of its
financial results disclosures and Annual Report to the Disclosure
Committee. The Disclosure Committee is also responsible for the
identification and disclosure of inside information. The Disclosure
Committee is chaired by the Chief Financial Officer with the Chief
Executive Officer, General Counsel, Company Secretary, Director
of Investor Relations, Director of Internal Audit & Risk, Director of
Accounting, Banking & Tax and the Director of Finance, Financial
Planning & Analysis as members of the Committee.
Product Strategy Committee
Between January and April 2022, the Product Strategy Committee
operated as a Committee of the Board to provide a clear focus
and support to the Company’s product strategy and product
planning activities, in particular in relation to its technology
and engineering activities. The members of the Committee were
Antony Sheriff and Amedeo Felisa as Independent Non-Executive
Directors, the Executive Chairman, Chief Executive Officer, Chief
Creative Officer and Global Chief Brand and Commercial Officer.
This Committee was disbanded as a Board Committee in May 2022
upon the new Executive Committee team being established and
continues to now operate as a management committee.
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Corporate Governance continued
Leadership and governance continued
The Board
Board Committees
Executive Committee
The Board delegate the execution
of the Company strategy and the
day-to-day running of the business
to the Executive Committee.
The Executive Committee meets twice
a month. One meeting is focused on
operations and the other meeting is
focused on performance.
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.
Nomination Committee
Reviews Board composition
and diversity, proposes new
Board appointments and
reviews succession planning
and talent development.
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.
Warrant Share Committee
Responsible for approval of
the allotment and the issue
of Warrant Shares in
accordance with the terms
of the Warrant Instrument.
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.
Sustainability Committee
Oversees the Company’s
ESG strategy and broader
stakeholder engagement
on behalf of the Board.
Independence of the Board
The Board has identified which Directors are considered to be
independent on page 112. As at 31 December 2022, 50% 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. For further
information on independence of the Board please refer
to pages 110-113 in the Nomination Committee Report.
Relationship Agreements
At the start of the financial year, the Company had two groups
of significant shareholders, namely, the Yew Tree Consortium
and Mercedes-Benz AG (“MBAG”). Following the capital raise
in 2022, at the end of the year, the Company had three groups
of significant shareholders namely the Yew Tree Consortium,
MBAG and PIF.
The relationships between the Company and each of these
significant shareholder groups are 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 149.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Division of responsibilities
There is clear division between Executive and
Non-executive responsibilities which ensures
accountability and oversight. The roles of Chairmen
and Chief Executive Officer are separately held
and their responsibilities are well defined, set out
in writing and regularly reviewed by the Board.
Chief Executive Officer
The Chief Executive Officer, Amedeo Felisa,
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
The Senior Independent Director, Antony Sheriff,
supports the Executive Chairman in his role and
leads the Non-executive Directors. The Senior
Independent Director is also available as an
additional point of contact for shareholders.
Company Secretary
The Company Secretary, Liz Miles, 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.
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,
Amedeo Felisa, 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 Financial Officer
The Chief Financial Officer, Doug Lafferty, is
a member of the Executive Committee team
reports 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.
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.
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Corporate Governance continued
Board activities
The Board met during the year for seven scheduled Board
meetings, a Board Strategy Day and an additional seven
unscheduled meetings. Of the seven unscheduled Board
meetings, four were convened to discuss the placing to
PIF and rights issue to raise £654m and the other three were in
relation to Chief Executive Officer and Chief Financial Officer
changes, the January trading update and the closure of the
Defined Benefit Pension scheme.
Board attendance for the scheduled Board meetings during
2022 is set out on page 97. The Board’s key activities during
the year are set out over the next two pages.
Strategy
•
Received reports from
the Chief Executive
Officer at each Board
meeting covering
organisational and process
improvements focused
on supplier strategy,
cost optimisation and
ways of working
Reviewed, discussed and
adopted revisions to the
Group’s ESG strategy
Discussed electrification
strategy and BEV
technology selection
Approved the £654m
Capital Raise
Discussed product
development and
project strategy
Reviewed and discussed
the current and future
products range
Received a deep dive into
the Aston Martin customer,
how the demographics
are shifting, the variances
between markets and how
the Company is responding
Reviewed market data
Reviewed the new
brand launch
Discussed the Net
Promoter Score, how
it is calculated and how
the data is used
Reviewed actual sales
volumes versus forecasts,
wholesale and retail
•
•
•
•
•
•
•
•
•
Operations
•
Received reports from
the Chief Operating
Officer on production
at St Athan and Gaydon
Discussed supply chain
challenges and the
actions being taken
to resolve them
•
• Discussed new model
activity and preparing
for production in the
year ahead
•
•
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
implementing the new
enterprise resource
planning (ERP) system
• Received information on
the Internal Controls
Assurance Programme
ahead of any proposed
new financial reporting
regime (UK SOX)
Financial performance
•
Commercial
•
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
Considered and approved
the Company’s quarterly
trading updates, half year
and full year results and
market announcements,
including the going
concern and viability
statements
Approved the Annual
Report and Accounts for
the financial year ended
31 December 2021
Reviewed and approved the
Group’s financing strategy
and budget for 2022
Approved the Group’s
annual insurance renewal
•
•
•
•
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People and culture
•
On the recommendation of
the Nomination Committee,
approved the appointment
of Sir Nigel Boardman as
a new Independent
Non-executive Director
Received regular updates
provided on people and
wellbeing covering
diversity data, attrition
rates, employee tenure,
outputs of Town Halls and
outputs of listening groups
•
•
•
Received a report of the
output of the leadership
conference held in October
2022 for over 70 director
level employees to review
the strategy and launch the
new Aston Martin values
Reports received
from the Chair of the
Nomination Committee
on its activities concerning
Board appointments
and succession
Governance, compliance and regulatory
•
•
•
•
•
Reviewed and approved
revised Share Dealing Policy
Reviewed and approved
Modern Slavery Statement
Reviewed and
approved updated
Board Diversity Policy
Reviewed and adopted
revised Committee Terms
of Reference and Matters
Reserved for the Board
Conducted the annual
Board evaluation in respect
of the effectiveness of the
Board and its Committees
and discussed the output
of the review
Approved the resolutions
to be put to shareholders
at the 2022 AGM
Received updates and
discussed material litigation
•
•
Capital raise
In July 2022, the Board
approved the capital raise.
The Board held four
unscheduled meetings to
discuss the capital raise.
Once the Board provided
its approval to proceed,
it delegated authority to
a Transaction Committee
of the Board comprising the
Executive Chairman, the
Chief Financial Officer,
the Senior Independent
Director and Michael de
Picciotto, to approve the
implementation of the
capital raise and all
incidental matters. The
Transaction Committee met
four times throughout
the capital raise process.
Board Strategy Day
The Board spent a day
together in Gaydon focusing
on strategy. There were
deep dives throughout
the day on the following
aspects of the business:
• Commercial: sales,
marketing, product
and aftersales
• Engineering and the
electrification strategy
• Operations:
manufacturing, supplier
management and strategy
• Design: (including
a visit to the Design
Studio and briefing from
Marek Reichman,
Chief Creative Officer)
• People and culture
The Board and culture
Driving cultural change is
a key focus for the Board
and the Board will continue
to monitor progress on
this during the year ahead.
Culture is strongly linked to
governance. An appropriate
governance framework
for decision-making,
together with promoting an
environment of trust, respect
and accountability, are all
fundamental to our culture.
The Board plays
an important role in
monitoring and assessing
our culture, particularly
as the Company’s culture
continues to evolve
throughout times of
significant change.
People and culture is a standing
agenda item as part of the
Chief Executive Officer’s
Report to the Board and the
Board’s discussions with
the Chief People Officer has
particularly focused on specific
culture drivers including
promotion of talent and
development within the
business, and diversity and
inclusion. The Board has
requested attrition data to
be broken down into gender
and reported at each Board
meeting to help identify any
trends that might emerge on
the challenges of retaining
a diverse workforce.
The Board has also benefited
from first-hand insight into
culture reported by Marigay
McKee and Anne Stevens
from their workforce
engagement activities.
See pages 102 and 103.
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Corporate Governance continued
Board and workforce engagement
“There is clearly a lot of female talent at Aston Martin and
a huge desire to build something wonderful together.
Supporting each other and creating a great work environment
where your voice is heard is truly a great start!”
Marigay McKee
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Marigay Mckee
and female leaders
In November, Marigay, one of
our Independent Non-executive
Directors spent a day in Gaydon
meeting with small groups
of female employees within
the business, hearing about
their experience of working
for Aston Martin.
Marigay also spent time with
a cohort of women who had
just completed the Empowering
Women in Leadership course.
These women were all Manager
or Senior Manger grade and the
course was designed to enable
and empower their continued
success at Aston Martin and to
go back into the business with
strong leadership skills to
model for others.
Marigay enjoyed a tour of
the Design Studio, meeting
with female members of the
design team and shared the
input she had received from
female customers on design
features of our cars.
The day was a huge success
with attendees feeling they
were being listened to and
inspired by Marigay sharing
her own experiences and
challenges. It was also a
great insight into culture
at Aston Martin for Marigay
and first-hand insight into
the Company’s diversity and
inclusion journey. Marigay
reported back the outcome
of her day to the Board and
the key outputs are being
addressed as part of the
wider listening opportunities
sessions that are being held
throughout the business with
different groups of employees.
For further information
on workforce engagement
see page 24.
Anne Stevens’ visit on
International Women’s Day
Anne Stevens, Independent
Non-executive Director came
to Gaydon in March 2022 to
address Aston Martin employees
on International Women’s Day.
Anne shared with employees
her inspirational story and long
association with the automotive
industry and the ongoing drive
for better female representation.
Employees had the opportunity
to ask Anne questions about her
career, the challenges she has
overcome and her views on the
business. By engaging directly
with employees, Anne was also
able to gauge a sense of what
employees cared about, levels
of morale and what the culture
is like at Aston Martin.
Anne Stevens is the dedicated
Independent Non-executive
Director gathering the views
of the workforce and reporting
them back to the Board.
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Corporate Governance continued
Investor engagement
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, as well as 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 2022
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,
Germany, Switzerland, Ireland,
the Netherlands, Norway, Hong
Kong, Singapore, Malaysia,
South Africa and Australia
during the last financial year.
Geographic dispersion
UK
Europe (ex UK)
North America
Asia
Rest of World
Unknown
Shareholder types
Corporate stakeholders
Foreign institutions
Private stakeholders/
investors
Domestic institutions
Hedge funds
Domestic brokers
Foreign brokers
Employees etc
Unknown
%
9.2
16.7
45.5
8.7
19.9
0.1
%
46.9
34.5
5.8
5.8
3.2
2.1
1.5
0.1
0.1
Main methods of engagement with shareholders in 2022
Shareholder consultation
The Executive Chairman, Chief Executive Officer and Chief Financial
Officer met a large number of shareholders after each financial
results announcement. The Executive Chairman has also 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 2022 the Remuneration Committee Chair
consulted with the largest shareholders on our revised Remuneration
Policy, a summary of which can be found in our 2021 Annual Report
which is available on our website www.astonmartinlagonda.com
Investor meetings
The Company held almost 400 investor meetings with 230 individual
existing and potential investors and analysts. These were a blend of
physical and virtual meetings. The meetings were attended by a
combination of the Executive Chairman, Chief Executive Officer, Chief
Financial Officer and Investor Relations team and some members of the
Executive Committee. The Director of Investor Relations was a regular
Board attendee to provide feedback from these meetings and updates on
other market matters. In September a number of investors and analysts
met the management team and were given a tour of the manufacturing
plant at Gaydon, to see at first hand the Company’s progress towards its
medium-term targets. For further information about this investor visit,
please see page 105.
Investor presentations
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. In addition, investor roadshows were
held following the full year and half year results. An additional roadshow
was held for current and prospective shareholders in the context of the
capital raise.
Investor conferences
The Investor Relations team presented to investors at five conferences
during 2022, with the Chief Financial Officer presenting at two of
these conferences.
General meetings
The AGM provides an opportunity for private shareholders in particular
to question the Directors and the Chairs of each of the Board Committees.
Information on the 2023 AGM is on page 232. The Notice of AGM is issued
at least 20 working days in advance of the AGM date, to provide shareholders
with the appropriate time to consider matters, as set out in the FRC’s
Guidance on Board Effectiveness.
A further General Meeting was held in September 2022 in relation to
the Company’s capital raise.
Annual Report
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.
Corporate 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.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
“The employees I met were excellent advocates for the
quality of the Aston Martin product and the passion
they all have in working for the company and brand.”
Investor Day attendee
Investor Day in Gaydon,
September 2022
In September 2022 the
Company arranged a visit
to the Gaydon headquarters
for key shareholders and
equity analysts. The day
began with presentations
from the Executive Chairman,
Chief Executive Officer, Chief
Financial Officer, Group Chief
Technology Officer, Chief
Creative Officer and Global
Chief Brand & Commercial
Officer. These presentations
covered strategic progress
and priorities, our approach
to the use of technology,
Aston Martin’s design process,
current and future product
line-up, the H1 2022 financials
and the evolution of our
ultra-luxury brand.
Participants were taken
on a tour of the production
facility in small groups, to see
at first hand each step in the
manufacture of an Aston Martin
vehicle. Specialists from the
shop floor used explanatory
teaching boards to give a
detailed overview of the
manufacturing process and
investors were able to ask
questions of the employees.
The investors gained an
understanding of the flexible
production line, which produces
all six GT/Sports car variants,
in addition to Limited Editions
such as the V12 Vantage.
The tour included a visit to
the Specials room, to witness
the unique Aston Martin
Valkyrie being produced and
tested. Various models from
Aston Martin’s current and
former product line-up were
on display in the Atrium and
outside the facility, including
some famous James Bond cars
and the first example of the
DBR22. The investors were also
able to participate in a driving
experience, taking current
production cars such as DB11
and DBX707 for a spin on public
roads near to the facility.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Corporate Governance continued
Section 172 Statement
The Board is pleased to provide a statement that supports
Section 172(1) of the Companies Act 2006. This requires that
Directors promote the success of the Company for the benefit
of the members, having regard to the interest of stakeholders
in their decision-making. A description of the Company’s key
stakeholders, what matters to them and how the Group,
including the Board, engages with them is set out on pages 22-25.
Some of the key decisions that the Board has made throughout
the year and how it took stakeholder factors into account in
making those decisions are set out below. All decisions made
by the Board are in line with the Company’s values. This is
essential to the Company’s reputation for high standards of
business conduct and for long-term success and sets the tone
for everyone at all levels of the business to act at all times in
line with our Company values.
Capital raise
In July 2022, the Board approved the £654m capital raise. In order
to conclude that the capital raise was likely to promote the success
of the Company for the benefit of the members as a whole, it took
into consideration the impact on its key stakeholders.
Section 172 matters
and stakeholders
Impact of the capital raise
Customers
Investors
Employees
Defined Benefit
Pension Scheme
The equity proceeds are being used
to accelerate capital expenditure which
will therefore benefit future customers
in terms of new product offering.
The capital raise provided a substantial
liquidity cushion in an uncertain global
operating environment and enhance
the Company’s prospects of becoming
free cash flow positive and ultimately
increasing investor returns.
Communication of the rationale for
the capital raise was key to ensure
that it was not incorrectly perceived
by employees/employee shareholders
or the wider stakeholder community.
The Board concluded that the capital
raise was expected to have a positive
impact on the employer covenant
supporting the Pension Scheme because
the Company would use up to half of the
equity proceeds of the capital raise to
repay debt which would significantly
reduce the annual cash interest costs
and improve cash flow generation and
financial flexibility of the business.
Acting fairly
between members
of the Company
In consideration of acting fairly between
members of the Company, the Board
considered the impact of the capital
raise on warrant holders. As a result,
an adjustment was made to the Warrant
Instrument to put the warrant holders into
the same position they would have been
in had the capital raise not taken place.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Leadership changes
The Board approved a number of significant leadership changes
throughout the year, including the appointment of a new Chief
Executive Officer, Chief Financial Officer, Chief People Officer,
Group Chief Technology Officer and Chief Procurement Officer.
Revisions to ESG strategy
During the year, the Board oversaw the rollout of the
new ESG strategy, Racing. Green. At the end of the year,
upon the recommendation of the Sustainability Committee,
it approved refinements to the targets and metrics set.
This included elevating existing targets to give them
prominence within our overall sustainability strategy,
enhancing gender diversity targets and setting some
new targets to align with competitors and ESG ratings.
Section 172 matters
and stakeholders
Impact of the leadership changes
Section 172 matters
and stakeholders
Revisions to ESG strategy
Employees
Investors
Leadership changes bring uncertainty
for employees in terms of culture, ways
of working and strategic direction. The
Board appreciates the impact leadership
changes have on employees, particularly
the amount of change within a short
timeframe and ensured that the impact
on employees and culture was taken into
account in the initial decision on those
appointments but most importantly that
the Board monitors the resulting impact
going forward as new leadership embeds
into the business. At times of leadership
change, Board/workforce engagement
and the monitoring of culture are more
important than ever and will continue
to be a focus in the year ahead.
Employees
Investors
Environment
Changes at Board and Executive Committee
level also bring uncertainty for investors
and therefore the Board needed to ensure
that the decisions for the changes were
well founded, based on the long-term
growth and success of the business and
communicated effectively, addressing
any concerns about lack of leadership
consistency and continuity.
Governments
and regulators
The Board challenged whether there was
sufficient resource within the business to
implement the changes to the strategy and
whether the correct skillset was in place.
Consideration was taken as to what would
be communicated externally to ensure that
there was clarity and no confusion as to
how the Company’s targets and strategy
had changed.
The Board concluded that there was
substantial value available to the Company
through implementing actions across a
range of different sustainability actions
such as using energy more efficiently,
reducing water use and CO2 emissions.
The Board requested more oversight
through reporting from management
to the Sustainability Committee of the
engagement that the Company has with
government and regulators, to enable it
to make effective decisions relating to
ESG going forward.
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Corporate Governance continued
Board and Committee evaluation and effectiveness
There is an annual requirement for an evaluation of the
Board and its Committees to monitor their performance,
the effectiveness of their activities and the quality of their
decisions. 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 in line with the recommendations of the Code.
However, the Board concluded, given the appointment of
all the Independent Non-executive Directors to the Board
since the beginning of that year, that an externally facilitated
evaluation was unlikely to yield significant benefits and that
an external evaluation should be postponed until 2022.
Given the further significant changes to Board composition
during 2022, including a new Chief Executive Officer, Chief
Financial Officer, two Shareholder Representative Directors
and one Independent Non-executive Director, the Board took
the decision that an external evaluation for 2022 would again
not be of value. Therefore, the Board agreed to carry out a
more rigorous internal evaluation, using BoardClic, a third-party
(with no connection to the Company or the individual Directors)
platform to assist with the provision of the questionnaire
and analysis of results. The benefit of using this third-party
platform was that it enabled the data to be broken down
between Executive Directors, Independent Non-executive
Directors and Shareholder Representative Directors so that
alignment between the three groups of directors could be
assessed. It also enabled the results to be benchmarked
against the results of other FTSE companies.
The conclusions of the evaluation were very positive,
concluding that the Board is highly effective and there is
general alignment between the views of the Shareholder
Representative Directors, Independent Directors and Executive
Directors. The Company’s results meet or exceed the benchmark
in all areas (except timing of distribution of Board papers which
was previously acknowledged as an area for improvement).
•
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.
“ The Chair is very open, transparent and
supportive of the Board and asks questions
and opinions frequently. He listens to others
and solicits feedback. When we give feedback he
always tries to incorporate it into policy and format.”
Non-executive Director
Suggestions identified
from the evaluation which
could enhance the Board’s
effectiveness in 2023
Risk
More discussion on
risk management
would be beneficial
Culture
•
Continue to monitor
progression of cultural change
and talent development
Board papers to be sent out
with five clear days for reading
Strategy
More time for focused
discussion by the Board on
strategy would enhance
effectiveness of the Board to
help drive the strategy forward
Succession planning
More focus on succession
planning for key roles in the
management team
These suggestions will be
addressed in the year ahead.
The Board intends to carry out
an external evaluation in 2023.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Outputs of the 2021 Board
evaluation and progress made
The output of last year’s internal
evaluation are set out below. In a year
of further leadership changes and a
significant capital raise, the Board
nonetheless made progress on the
topics highlighted and will continue
to do so in the year ahead.
“The focus on sustainability and on risk is palpable and
evident. There is clear evolution of the sustainability
journey and the pipeline of activations to become
more sustainable every year. We discuss risk at every
Board meeting and weigh the risks and opportunities
against each other carefully.”
Board evaluation output 2021
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
This is being addressed in the
course of all Board discussions.
Particular attention has been
given to relationships with
suppliers and employees
and culture. The Sustainability
Committee has particular
focus on the Company’s
key stakeholder groups
and reports back to the Board.
The Board received a deep dive
and discussion on a number of
topics including the Company’s
electrification strategy, how
the customer demographic is
evolving, Net Promoter Score
and supplier strategy.
Progress made during 2022
With the arrival of the new
Chief People Officer, Head
of Culture and Talent and
Diversity and Inclusion
Lead, the Board is pleased
to have the support of this
management team and looks
forward to monitoring the
progress made on diversity,
cultural change and promotion
of talent over the next year.
Succession planning has been
highlighted in the 2022 Board
evaluation as an area of focus
for the Board in 2023.
Building on its existing
understanding of the
processes for assessing
and ensuring alignment
of the Company’s corporate
culture and operational
practices with its purpose,
strategy and values
As stated above, with the
appointment of the new
Chief People Officer and
Head of Culture and Talent
and Diversity and Inclusion
Lead, the right management
team is now established for
this to be taken forward.
New corporate values were
launched at the beginning of
2023 and will be reported on
in the 2023 Annual Report.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Nomination Committee Report
“ It’s our ambition that by 2025 at 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 2022.
The Report details the role of the Committee and describes how
the Committee has carried out its responsibilities during the year.
The Board recognises that the gender balance across 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 leadership positions will be
occupied by women by 2025.
The Board has already met one of the FCA diversity targets
which will be effective for financial accounting periods
commencing 1 April 2022 onward of at least one Director
on the Board being from an ethnic minority background.
Looking ahead
In 2023, 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, in an effort to
meet all of the FCA’s targets. I look forward to reporting on
our further progress in 2023.
Lawrence Stroll
Chair, Nomination Committee
28 February 2023
Board appointments
During the year, the Committee oversaw the process for the
appointment of Amedeo Felisa as Chief Executive Officer, Doug
Lafferty as the new Chief Financial Officer and Sir Nigel Boardman
as an Independent Non-executive Director. The Committee has
carefully monitored the composition of the Board and ensured
that as a whole, the Board continues to meet the independence
requirements of the UK Corporate Governance Code.
Diversity
The Board remains committed to increasing and maintaining
diversity in the broadest sense , not just gender and ethnicity but
also experience, skills and professional background. Diversity at
Board level sets the tone for diversity throughout the business.
Diversity brings news ideas and fresh perspectives and will
position us to achieve our strategy and long-term growth.
Importantly, our Board Diversity Policy reflects the unique
composition of our Board, with five Shareholder Representative
Directors of the Board and sets the Company’s target to achieve
and maintain at least 40% of non-shareholder representatives
of the Board as female. Currently 38% of our Board, excluding
Shareholder Representatives, are female which is just short of
our proposed target. 23% of the whole Board (Executive Directors,
Shareholder Representatives Directors and Independent
Directors) are female.
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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.
to the Committee and, at the request of the Committee, the Chief
Executive Officer, General Counsel, Chief People Officer, 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.
Key responsibilities
• 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 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
Committee membership and Committee meetings
The Committee currently consists of the Executive Chairman
Lawrence Stroll who is Chair of the Committee and four
Independent Non-executive Directors: Robin Freestone,
Antony Sheriff, Anne Stevens and Sir Nigel Boardman (who
was appointed to the Committee in October of this year).
In addition, the Relationship Agreements with the significant
shareholder groups (see page 149) provide that each may appoint
a Director to the Committee. Franz Reiner represents MBAG and
Scott Robertson was appointed to the Committee as the
Representative Director for the Public Investment Fund on
1 November 2022. The Executive Chairman represents the Yew
Tree Consortium. Attendance at each meeting comprises the
Committee members, the Company Secretary who is secretary
The Committee met five times during 2022. 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.
Committee members
Lawrence Stroll (Chair)
Sir Nigel Boardman1
Robin Freestone2
Antony Sheriff
Anne Stevens
Franz Reiner
Scott Robertson3
Meeting attendance
5/5
1/1
4/5
5/5
5/5
5/5
1/1
1 Sir Nigel Boardman joined the Committee in October 2022.
2
Robin Freestone missed one unscheduled meeting due to the meeting
being called at very short notice.
3 Scott Robinson joined the Committee in November 2022.
Key activities of the Committee during the year
• Considered candidates for the role of Chief Financial Officer
•
•
•
•
•
•
and made a recommendation to the Board for approval
Recommended to the Board for approval the appointment
of Amedeo Felisa as Chief Executive Officer
Recommended to the Board for approval the
appointment of Sir Nigel Boardman as an Independent
Non-executive Director
Agreed the composition of the Sustainability Committee
upon establishment and the addition of Marigay McKee
to the Committee midway through the year
Reviewed the size, structure and composition of the
Board and the Executive Committee with respect to
the needs of the business
Reviewed the Board Diversity Policy and increased its
diversity target to 40% in line with the FTSE Women
Leaders target
Reviewed the independence of Sir Nigel Boardman
(see page 112)
The Committee engaged Odgers Berndtson to undertake
the search process to identify suitable Chief Financial Officer
candidates. Odgers Berndtson has no connection with the
Company or any of the Directors.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Corporate Governance continued
Nomination Committee Report continued
Board independence and conflicts of interest
The independence, effectiveness and commitment of each of the
Non-executive Directors has been reviewed by the Committee.
The Committee is satisfied with the contributions and time
commitment of all the Non-executive Directors during the year.
The Committee will always discuss the additional commitments
of all Directors (including the Chairman) before recommending
their approval to the Board. It considers potential conflict issues
as part of that assessment. This process is supported by an annual
conflicts review by the Committee whereby the Committee
reviews the Directors’ conflicts of interest register and seeks
confirmation from each Director of any changes or updates to
their position. No new conflicts were declared during the year.
The Committee is confident that each of the Non-executive
Directors remains independent and will be in a position to
discharge their duties and responsibilities in the coming year. From
a governance perspective, the Board as a whole is independent.
The Nomination Committee notes that under the UK Corporate
Governance Code, receiving additional remuneration from the
Company separate from a Director’s fee could appear to impair
a Non-executive Director’s independence. Following Sir Nigel’s
appointment to the Board in October 2022 as an Independent
Non-executive Director, the Committee was asked to consider
the proposal that Sir Nigel advises the Company and Executive
Chairman from a strategic perspective in relation to the two
significant legal claims that the Company is currently party to.
The intended scope of Sir Nigel’s work would be oversight only,
to offer an alternative strategic perspective over and above the
operational advice which would continue to be provided by the
Company’s external lawyers and internal counsel. The work would
be carried out in exchange for a fee under a separate consultancy
agreement and would not be related to the services Sir Nigel
would provide as an Independent Non-executive Director,
and it is anticipated that this legal advice would be provided
for a period of up to 12 months.
Following discussion, the Committee agreed to recommend the
proposal for approval to the Board on the basis that the Board
could continue to deem Sir Nigel as independent given that the
fee Sir Nigel would receive for these services was not personally
material to Sir Nigel, and that it would be of a short-term nature for
the duration of these complex legal disputes. The Board agreed
with the Committee’s recommendation.
Overboarding
The Board follows the Institutional Shareholder Services (ISS)
proxy voting guidelines on overboarding and accordingly deems
all its Non-executive Directors to be within these guidelines.
The Board appreciates that other proxy bodies and institutional
investors impose more stringent guidelines than ISS and that
each individual’s portfolio of appointments must be considered
on a case-by-case basis, which the Board duly does before
approving any appointments and then, on an annual basis, to assess
whether each member of the Board is able to continue contributing
effectively. The Board was not asked to approve any additional
external appointments for any of our Directors during the year.
Election and re-election of Directors
The election, in accordance with the Company’s Articles of
Association, of Sir Nigel Boardman, Ahmed Al-Subaey and Scott
Robinson will be proposed for shareholder approval at the AGM
in May 2023. All the other Directors will stand for re-election at
the AGM in May 2023 with the support of the Board. The Board
considers all Directors to be effective and committed to their
roles and to have sufficient time to perform their duties.
Director induction and training
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.
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.
In connection with the capital raise, Freshfields gave a presentation
to the Directors on their responsibilities, liabilities and obligations
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.
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 Committee’s direct reports team to ensure
that there is a diverse supply of senior executives in the
talent pipeline. The Committee intends to focus on Executive
Committee succession planning in the year ahead.
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During the year, the Executive Committee was strengthened by
the appointment of Roberto Fedeli as Group Chief Technology
Officer and Simon Smith as Chief People Officer. Their biographies
and those of the other members of the Executive Committee can
be found on pages 90-95. At the beginning of 2023, Giorgio
Lasagni joined the Executive Committee as Chief Procurement
Officer.
As at 1 January 2023, the Executive Committee consists of the
three Executive Directors and seven other Chief roles. Further
information on the role of the Executive Committee is on page 98.
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’s 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. 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
acknowledges the FTSE Women Leader Review target for
women to represent at least 40% of boards by 2025, 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 149). Accordingly,
the Board’s Diversity Policy reflects the Board’s target to maintain
a balance so that, as a minimum, 40% 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 women out of eight relevant Board
members (being the two Executive Directors and six Independent
Non-executive Directors), thereby comprising 38% of the Board.
50% of our Independent Non-executive Directors are female.
In April 2022, the Financial Conduct Authority announced additional
diversity targets for FTSE listed companies, the reporting of which
will be effective for financial accounting periods commencing 1 April
2022 onward. The targets are: (i) at least 40 per cent of the board
should be women; (ii) at least one of the senior board positions (the
Chair, Chief Executive Officer, Senior Independent Director and/or
Chief Financial Officer) should be a woman; and (iii) at least one
member of the board should be from a minority ethnic background.
Whilst we currently already meet one of the three additional
diversity targets, that at least one Director should be from a
minority ethnic background, the Company will continue to
monitor the Board’s diversity when recruiting new directors.
Diversity at Board level sets the tone for diversity throughout
the business and the Board will continue to promote diversity
at Board and Executive Committee level and throughout the
business. The Company acknowledges that it needs to improve
diversity at leadership level and this will be a continued focus for
the Committee. For gender balance of senior management and
their direct reports, please see page 73. The Committee monitors
the talent pipeline to ensure we have a diverse succession pool of
talent being developed and importantly maintained at all levels
of the business. Maintaining a diverse workforce is as important as
diverse recruitment and the Committee will focus on overseeing
the work being carried out by the business to achieve this.
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 108-109). 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. A key focus for the
Committee for the year ahead is succession planning at
Executive Committee level.
Board gender diversity
Board composition
38%
50%
of Board positions which are
not shareholder nominated
are held by women
of our Independent
Non-executive Directors
are women
Shareholder Representative Directors
(including the Executive Chairman) 5
Executive Directors
2
Independent
Non-executive Directors
6
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“Ensuring the integrity of financial
reporting, effective management of
risk and a robust system of internal
controls are critical to the Company’s
long-term success.”
TCFD
For the second year, we present our Task Force on Climate-
Related Financial Disclosures (“TCFD”) report which is largely
consistent with the recommendations of the TCFD. Our TCFD
report can be found on pages 58-67 and the statement of
compliance is on page 66.
Internal Audit
This year, the Internal Audit plan incorporated a number of audits
including supply chain risk management, warehouse inventory
management, Aston Martin The Americas key financial controls
and dealer network management. The Internal Audit team also
provided data validation assurance over the capital raise
documentation. The Committee discusses the outcomes of internal
audits and monitors any remediation actions that are identified.
Audit and financial reporting reform
The Committee awaits the implementation of the UK Corporate
Governance reforms and continues to monitor the potential
impact for the Company and for the Committee. The Committee
has also received updates at every meeting on the Company’s
progress to design, implement, embed and test enhanced SOX
style controls across finance and IT operations in preparation for
the new financial reporting regime.
Committee membership
I was delighted to welcome Sir Nigel Boardman as a member
of the Audit and Risk Committee during the year and also Scott
Robertson who has joined the Committee as an observer. Both
Sir Nigel and Scott are valuable additions to the Committee and
I look forward to working with them both and the contributions
and perspectives that they will provide.
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
28 February 2023
Dear shareholder
On behalf of the Audit and Risk Committee, I am pleased to
present the Committee’s Report for the year ended 31 December
2022. This 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 2022 Annual
Report and Accounts.
Financial reporting
The Committee monitors the integrity of the Company’s
reporting processes and financial management, reviewing and
discussing in detail the half year and full year financial results
and the conclusions of the External Auditor. The Committee has
continued to focus on the appropriateness of adopting the going
concern assumption in preparing the financial statements for the
year ended 31 December 2022. The going concern assessment is
set out on pages 169-170.
Risk management
On behalf of the Board, the Committee manages the process by
which risks are identified, assessed and managed. The Committee
considered the principal risks contained in the Group’s corporate
risk register as the basis for its activity during the year and used
the three lines of defence model and assurance mapping to
monitor how the Company manages and obtains assurance over
its principal risks. The Committee discussed and agreed changes
to our risk profile which is disclosed on pages 80-85.
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Committee membership and Committee meetings
The Committee currently comprises four Independent
Non-executive Directors: Robin Freestone who is Chair
of the Committee, Antony Sheriff, Anne Stevens and
Sir Nigel Boardman. The Committee therefore meets
the independence requirements of the Code.
In accordance with the Relationship Agreements with
the significant shareholder groups (see page 149), each
may appoint an observer of the Committee with no voting
rights. Michael de Picciotto, Franz Reiner and Scott Robertson
currently serve as observers.
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
six times. The Committee members’ attendance for the period is
set out in the table below. 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 the end of each meeting for the Committee to discuss matters
with the External Auditor and the Director of Internal Audit & Risk
without members of management being present.
Audit and Risk Committee membership
Committee members
Robin Freestone (Chair)
Amedeo Felisa1
Sir Nigel Boardman2
Antony Sheriff
Anne Stevens
Meeting attendance
6/6
3/3
1/1
6/6
6/6
1
Amedeo Felisa was a member of the Committee until the beginning
of May when he became an Executive Director.
2 Sir Nigel Boardman joined the Committee on 1 October 2022.
Attendees at each meeting comprise the Committee members,
the observers and the Company Secretary who is secretary to
the Committee. The Chief Executive Officer, the Chief Financial
Officer, the General Counsel, the Director of Internal Audit & Risk,
the External Auditor, Ernst & Young LLP (“EY”), and other senior
members of the finance team also routinely attend meetings upon
invitation by the Chairman.
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 of financial reporting and/or international business,
engineering or ultra-luxury and collectively have a broad range
of expertise that enables them to provide oversight of both
financial and risk matters, and to advise the Board accordingly.
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 90-93.
Key responsibilities of the Committee
• Reviewing and assessing the integrity of the Group’s financial
and narrative statements, 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 Auditor, monitoring its effectiveness and
independence and making recommendations to the
Board in respect of its remuneration and appointment
Overseeing policies on the engagement of the External
Auditor 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
•
•
•
•
•
•
•
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Key activities of the Committee during the year
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 estimates, 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
2021 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 2021 Annual Report
• Reviewed and responded to a letter from the Financial Reporting
Council in relation to its thematic review of the Groups’ disclosures
relating to deferred tax assets
External audit
• Assessed the External Auditor’s independence, objectivity
and effectiveness
• Considered and recommended to the Board the
reappointment 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 corporate 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
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 related to the implementation of
the new ERP system 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
•
•
•
•
•
Internal Audit
• Approved the annual Internal Audit plan and approach for 2023,
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
• Provided oversight of delivery of the 2022 Internal Audit plan,
reviewing Internal Audit reports and findings issued during
the year and the status of implementation of recommended
corrective actions
Other areas
•
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 the renewal of the Group’s insurance programme
•
•
•
•
•
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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 Auditor to ensure the Group reaches appropriate
conclusions and provides the required level of disclosure.
The significant issues considered by the Committee in respect
of the Annual Report are set out below.
Management are 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 2022
and how the Committee addressed these matters
Impairment assessment of goodwill and other intangible assets
•
The Committee considered the Group’s process in determining
whether the carrying value of any asset, 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
•
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 2 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
advisor. 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. The Committee also
considered the pension scheme closure costs and related
disclosures set out in notes 5 and 25 and concluded that the
assumptions made, closure costs recognised and disclosures
given were appropriate.
Recognition and measurement of deferred tax assets
The Group has considered the forecasts presented by management
that indicated the capability of the Group to generate future
taxable profits to recover the deferred tax asset of £133.7m.
The Committee concluded that the recognition of the deferred
tax asset and the disclosures given were appropriate.
Going concern and viability statement reporting
•
•
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 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 2022 and February 2023 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;
– The Group’s revenue recognition policies;
– Recognition and measurement of the Group’s warranty
provision;
– Recognition and measurement of adjusting items; and
– Accounting for the financing and capital arrangements.
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Fair, balanced and understandable
The Board recognises its duty to ensure that the Annual
Report and Accounts, taken as a whole, are 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
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:
• 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 2022 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 152.
Financial Reporting Council (FRC)
In October 2022 the Group received a letter from the FRC in
relation to its thematic review of groups’ disclosures relating to
deferred tax assets. The letter asked for additional information
and explanations to help the FRC better understand how the
Group satisfied the requirements of IAS 12 ‘Income Taxes’
in relation to deferred tax asset accounting and disclosure in
its December 2021 Annual Report and Accounts. A response
was submitted to the FRC within the requested timeframe
and this closed out the majority of its queries. The FRC sent
further letters to the Group in November 2022 and January 2023
requesting additional information in relation to the accounting and
disclosures of the Group’s research and development expenditure
credits (RDEC) which was submitted. The Group’s accounting
policy in relation to government grants has been expanded to
specifically set out the policy applied to the Group’s RDEC claims.
The Group acknowledges that the FRC’s review provided
no assurance that its annual report is correct in all material
respects and the FRC’s role is not to verify information provided
but to consider compliance with reporting requirements. The
FRC accepts no liability for reliance on its letters by the Group
or any third party, including but not limited to investors.
The Company also received a letter from the FRC in November
2022 which related to its thematic review of the Group’s
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 2021 Annual
Report as an example of better practice in its “What makes
a Good Annual Report and Accounts” publication.
Committee’s oversight of external audit
The Committee oversees the work undertaken by EY. EY was
appointed as External Auditor with effect from 24 April 2019,
following an audit tender process. Shareholders approved
EY’s re-appointment at the Company’s AGM on 25 May 2022.
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 Auditor
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 2023. It has reviewed the audit process and the quality of the
audit delivery and the quality and experience of the audit partner
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 17 May 2023.
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Non-audit services
The Committee recognises that the independence of the External
Auditor 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 Auditor’s independence or objectivity.
This includes, but is not limited to, assessing:
• any threats to independence and objectivity resulting from
•
•
•
the provision of such services;
any safeguards in place to eliminate or reduce these threats
to a level where they would not compromise the Auditor’s
independence and objectivity;
the nature of the non-audit services; and
whether the skills and experience of the audit firm make it
the most suitable supplier of the non-audit service.
The total value of non-audit services that can be billed by
the External Auditor is restricted by a cap set at 70% of the
average audit fees for the preceding three years. This cap
became effective for the first time in the 2022 financial year,
being EY’s fourth year of tenure as the Company’s External
Auditor. The cap is set at £400,000.
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 2022 the following permitted services have been
approved in accordance with this policy:
Permitted audit-related services:
•
•
Review of the Company’s Interim Financial Statements
for the period ended 31 March 2022 (£72,500)
Review of the Company’s Interim Financial Statements
for the period ended 30 June 2022 (£55,000)
Permitted non-audit services:
•
Reporting accountant services in connection with the
capital raise (£175,000)
In granting approval for these services, the Chief Financial
Officer and Chair of 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 page 85.
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.
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Corporate Governance continued
Audit and Risk Committee Report continued
The Group continues to strengthen the control
environment by embedding the Enterprise Risk
Management Framework and System which is
supported by Risk Champions within each function.
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 and Human Trafficking Policy
• Anti-Bribery and Corruption
• Gifts and Hospitality
• Anti-Money Laundering
• Diversity and Inclusion
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 page 85. 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.
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
controls and risk management across the organisation. This
comprises the following:
The Group’s Code of Conduct will be reviewed and updated
during 2023.
FIRST LINE OF DEFENCE – Functional management who
are responsible for embedding risk management and internal
control systems into their business processes.
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 2022 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 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.
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 Auditor 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.
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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.
Internal Audit
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 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 Internal Audit plan for 2023 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.
During the year, 11 internal audits were carried out including business
continuity and disaster recovery, the Capital Raise verification
process, cyber security, supply chain risk management, inventory
management and an audit of Aston Martin The Americas. The
conclusions of the audits were discussed by the Committee and
remediation actions were agreed where required.
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, 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, 12 new reports
were submitted via the confidential reporting and whistleblowing
facility. The Committee monitored and assessed the outcome of
the resulting investigations.
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 108-109). The Committee also reviewed its
own performance and concluded that it continued to perform
effectively and was rated highly by all the members. There were
no areas flagged for improvement, but it was suggested that
more time could be spent discussing risk mitigation actions and
gaining a deeper understanding of challenges faced could make
the functioning of the Committee even more effective. This will
be a focus in the year ahead.
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Sustainability Committee Report
“ Backed by a clear strategy,
a committed team and an
uncompromising focus on
delivery, sustainability will continue
to shape the Company’s future.”
Dear shareholder,
On behalf of the Sustainability Committee, I am pleased
to present the Committee’s Report for the year ended
31 December 2022. The Committee was newly established
in March 2022 and I am delighted to have overseen
the progress being made in embedding sustainability
throughout the business during the course of this year.
Our sustainability strategy sets out goals that will continue
to guide our journey towards becoming a world-leading
sustainable ultra-luxury automotive business. As an independent
small volume manufacturer, delivering these goals demands
significant effort from everyone across the Company and it has
been fantastic to see that effort continue to gain momentum.
The scale of change demanded by the transition to EV production
cannot be underestimated. I am pleased that the business is rising
to the challenge with initiatives such as the EV Transformation
Programme. Work on projects targeting net-zero manufacturing
facilities by 2030, a net-zero supply chain by 2039 and many other
key environmental, social and governance (“ESG”) goals continues
through ten dedicated sustainability working groups which
provide updates to the Sustainability Committee at each meeting.
Where appropriate, we have also strengthened our sustainability
goals to better align with our ambition. For example, we have
brought forward our target to have 25% of women in leadership
positions by setting a deadline of 2025, whilst adding an extra
commitment to reach 30% by 2030.
Importantly, we are seeking to embed sustainability in every
part of Aston Martin’s business. Backed by a clear strategy,
a committed team and an uncompromising focus on delivery,
sustainability will continue to shape the Company’s future.
I would like to thank all members of the sustainability working
groups for all their efforts in making progress towards all
our goals and helping to put sustainability at the forefront
of everything we do.
Dr Anne Stevens
Chair, Sustainability Committee
28 February 2023
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Committee membership and Committee meetings
The Committee currently comprises three Independent Non-
executive Directors: Anne Stevens who is Chair of the Committee,
Antony Sheriff and Marigay McKee. Upon establishment of the
Committee, Tobias Moers, the previous Chief Executive Officer
was a member of the Committee and attended the first meeting
before he left the business in May. Marigay McKee joined the
Committee in July.
The Chief Financial Officer and Chief Executive Officer attend
the Committee meetings along with the Head of Government
Affairs and Sustainability and the leads of the sustainability
working groups.
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. This year the Committee met four
times. The Committee members’ attendance for the period is set
out in the table below. The activities of the Committee and any
matters of particular relevance were reported by the Committee
Chair to the subsequent Board meeting.
Committee members
Anne Stevens (Chair)
Antony Sheriff
Marigay McKee1
Tobias Moers2
Meeting attendance
4/4
4/4
2/2
1/1
1 Marigay McKee joined the Committee on 25 July 2022.
2 Tobias Moers stepped down from the Board on 4 May 2022.
Key responsibilities of the Committee
The role of the Committee is to oversee, on behalf of the Board,
the Company’s sustainability strategy, which focuses on five
strategic pillars:
• Tackling climate change
•
•
•
•
Creating a better environment
Investing in people and opportunity
Exporting success
Delivering the highest standards
The Sustainability Committee is supported by ten dedicated
working groups focused on areas ranging from energy
management to development of a sustainable supply chain.
For further information, see pages 59.
Key responsibilities of the Committee
•
Reviewing and making a recommendation to the Board to
approve the Sustainability Report, the TCFD Report and
the Modern Slavery Statement
Reviewing periodically the sustainability strategy and
considering whether there should be any changes, including
to the targets detailed in the sustainability strategy and
making a recommendation to the Board for approval
Monitoring the progress of the sustainability strategy
Reviewing the annual Sustainability Materiality Assessment
and provide comments and guidance
•
•
•
• Considering and making a recommendation to the Board
to approve the Company’s Sustainability Report and
where relevant recommend to the Board any other public
documents to be approved for disclosure concerning
sustainability-related matters
Receiving regular updates from the various ESG working
groups which are executing the sustainability strategy
•
•
•
• Receiving updates on and reviewing (on an ongoing basis) the
Company’s external sustainability ratings and accreditations
Receiving updates on (and reviewing on an ongoing basis)
sustainability reporting requirements and changes to
government strategy, policies and laws impacting sustainability
Monitoring external trends, developments and emerging
best practices that may affect the Company’s reputation
or sustainability and ESG strategy, objectives and targets
Monitoring the level of resource, competence and
commitment applied to the management of sustainability
and ESG issues
Receiving relevant sustainability audit findings and details
of sustainability-related assurance activity
•
•
Key activities of the Committee during the year
•
•
Reviewed and approved 2021 Sustainability Report
Approved the enhancements to the Company’s
sustainability strategy, Racing. Green.
Reviewed reports from the Company’s sustainability
working groups, including progress in reducing CO2
emissions and the Company’s electrification strategy
Considered the findings of the Company’s ESG data audit
Recommended to advance quarterly ESG reporting and
updates, including information on the use of sustainable
materials and ESG metrics
•
•
•
• Assessed the impact of new ESG-related legislation
•
Carried out a deep dive on the Company’s new diversity
and inclusion strategy
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 108-109). The report is very positive highlighting
that the Committee is highly effective, despite its recent
conception and has outstanding leadership.
The Committee agreed that it would keep the composition of
the Committee under review and consider adding more members
in the future. The Committee further included the importance of
ensuring that there is sufficient agenda time to facilitate effective
discussion at Committee meetings going forward.
Further information on sustainability can be found on page
59 and also in the Company’s 2022 Sustainability Report.
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Directors’ Remuneration Report
“ Passionate, motivated and
professional people are critical
to the success of Aston Martin
and, to attract and retain the
best talent, our employee
offering must be competitive. ”
Dear shareholder
I am pleased to present the Directors’ Remuneration Report
(“DRR”) for the year ended 31 December 2022, which has
been approved by both the Remuneration Committee
(the “Committee”) and the Board.
As set out by both the Executive Chairman and CEO in their
statements, against an external backdrop of global macroeconomic,
geopolitical and health challenges, the efforts of Aston Martin’s
people have ensured 2022 has been a year of positive transformational
importance for our business and brand. The team has worked
incredibly hard on our journey to strengthen Aston Martin’s position
as an ultra-luxury brand and the financial resilience of the business.
Key 2022 achievements include the successful launches of the
DBX707 and V12 Vantage, updated Aston Martin wings and brand
positioning and completion of the £654m equity capital raise.
Our technical teams are focused on developing our future pipeline
of compelling products and have overcome significant industry-
wide supply chain challenges during 2022 to meet customer
demand and the high standards expected of Aston Martin.
Contents
Pages
Executive Director’s remuneration at a glance
Annual Report on Remuneration
FY 2022 total single figure remuneration
Salary, pension and benefits
Annual bonus
Long-Term Incentive Plan
Share interests and shareholding guidelines
CEO remuneration relative to employees
Further information on remuneration for
new executive directors
Further information on remuneration for
executive directors who left during the year
Non-executive Directors’ remuneration
Remuneration Committee in FY 2022
127
129
129
130
130
132
136
138
139
140
141
143
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Senior leadership Board-level changes
As set out by the Executive Chairman, the composition of the
Board continued to evolve this year, with Amedeo Felisa becoming
our CEO and Doug Lafferty appointed to our CFO role in early
May. Both Amedeo and Doug have considerable industry-leading
experience that has already proved invaluable to the continued
delivery of our strategy and directing the next stage of AML’s
transformation, as we focus on leading the brand through a new
phase of growth and development.
Full details of Amedeo and Doug’s remuneration are set out on
pages 139 and 140, and while all elements are in line with our
Remuneration Policy, I would highlight the following areas:
CEO
• Base salary of £875,000
• An annual cash allowance of £50,000 for a period of 5 years
as relocation assistance
• 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
200% of salary, pro rata for period of employment in 2022
• A tailored 2022 LTIP one-off award to recognise the importance
of alignment with the share price of the Company (and so directly
with shareholder interests) and incentivising successful execution
of the near-term strategy:
– An LTIP award of 300% of salary which is in line with our usual
Policy to recognise and incentivise the size of the task and
effort required from Amedeo to lead the business over the
critical next phase of the business turnaround
– Vesting of this award is subject to the average absolute share
price of Aston Martin Lagonda Global Holdings plc over the
2-year period from grant date (13 June 2022 to 12 June 2024),
and so the CEO is directly aligned to shareholder interests and
will only receive value from the award for significant share
price growth during the period
– The targets represent significant stretch with threshold
vesting starting at £10 and maximum vesting at £18.
Consistent with the principle of shareholder alignment,
these share price targets were not adjusted for the rights
issue completed in September 2022
– No 2-year post vesting holding period applies to the award,
but rather an open-ended requirement to hold at least 75%
of any LTIP shares that vest (net of tax) will apply (in line with
the CEO’s shareholding guidelines)
– Full details of the tailored 2022 LTIP one-off award are set
out on page 133
– The Committee is cognisant that this award is not in line with
the standard approach either in the UK listed environment
or that usually taken at Aston Martin. The Committee, in
agreement with the Executive Chairman, was mindful of the
need to drive exceptional and sustainable growth over the
near-term and agreed that such a structure was necessary
for the CEO on taking up this role on an exceptional basis
– To recognise that this is not a standard approach, no LTIP
award will be made to the CEO in 2023
CFO
• Base salary of £450,000
•
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 LTIP of up to 200% of salary
He also received buyout awards to compensate him for awards
forfeited at his previous employer. The buyout awards were
structured to mirror the value and timing of the awards forfeited
•
•
•
As previously disclosed, Tobias Moers and Ken Gregor left
the Company on 31 July and 30 June respectively and details
of the final payments to both Tobias and Ken are set out on
pages 140 and 141.
FY 2022 annual bonus approach and outcome
The Committee 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. The Group
scorecard was cascaded throughout the Company to apply to
annual bonus for all employees, providing strong alignment of
focus. For 2022, the scorecard was weighted 85% on financial
measures (including a 50% weighting on Adjusted EBITDA, 20%
on Free Cash Flow (“FCF”) and 15% on volumes) and 15% on
Quality performance for all.
For 2022, all elements of the bonus operated independently,
and so although the FY 2022 Adjusted EBITDA outcome of £190m
was below the threshold of £200m, a payment of 5.05% of bonus
(10.1% of target) will be paid based on wholesale volumes and
quality metrics achieved (and no payment with respect to the
FCF or retail volumes measures). As both the CEO and CFO are
new to the business, their bonus payments will be pro rata for
their period of 2022 service and 50% of the net 2022 bonus
payment will be delivered in shares, deferred for three years
(as they are yet to meet their shareholding guideline).
FY 2023 remuneration approach
The Committee reviewed the CEO and CFO’s salaries for 2023 and
decided to apply increases of 2.9% and 4.4% respectively, taking
their salaries to £900,000 and £470,000 (from 1 January 2023).
This level of increase is lower than the 2023 pay increases that
applied to employees across the workforce.
The Committee has decided to operate the annual bonus in 2023
in line with the Company-wide approach operated in both 2021
and 2022, including a Group scorecard of performance measures
to best reflect annual progress on our business plan and KPIs.
This Group scorecard will once again be cascaded throughout
the Company to apply to annual bonus for all employees,
providing strong alignment of focus. For 2023, 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
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believes these are the right measures to continue to make
annual progress during 2023 towards delivering our long-term
strategy. There is no change to the bonus opportunity for
the Executive Directors. Full details of the 2023 annual bonus
approach are set out on page 132.
The Committee has decided to operate the 2023 LTIP on the
same basis as in 2022, albeit with updated Adjusted EBITDA
targets which reflect the new three-year period (1 January 2023
to 31 December 2025) of the business plan. There is no change
to the LTIP opportunity for the Executive Directors, and 2023
LTIP awards for Executive Directors will be subject to a 2-year post
vesting holding period, in line with our 2022 Remuneration Policy.
Full details of the 2023 LTIP approach are set out on page 135.
Broader workforce reward
Passionate, motivated and professional people are critical to the
success of Aston Martin and, to attract and retain the best talent,
our employee offering (including pay and benefits) must be
competitive. When considering the remuneration of the Executive
Directors and 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 2022. With the appointment of a Chief People
Officer in April, the leadership team made a renewed commitment
to making Aston Martin a great place to work, with significant
investment begun into our facilities, culture and organisation,
to help to drive forward our people and progress in 2023.
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 closure of the Aston Martin
Lagonda Limited Pension Scheme (the “Defined Benefit Scheme”)
to future accrual which was concluded 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 Defined Contribution plan
(of which the majority of employees were already members).
The Committee considered and approved Aston Martin’s first
ever all employee share award, with the particular objective
of giving everyone the chance to share in the future success of
the Company. Starting in 2023, an annual award of free shares
will be made to all employees, which we believe will build
engagement across the workforce and a culture where our
employees feel and behave like owners.
In respect of 2022 bonus, the Committee noted that the Group
KPI scorecard applied to 2022 bonus for all employees and
while the outcome based on this alone was low at 5.05% of
maximum bonus, a higher level of bonus was generally paid
to the wider workforce, which the Committee considered
important to recognise how hard the team had worked and
the significant progress made on both the business plan and
turnaround programme during 2022.
We also discussed our approach to, and results of, Aston Martin’s
Gender Pay Gap (“GPG”) reporting. Our aim is to foster a culture
where everybody feels valued, motivated and rewarded to
achieve their best work – detailed information on our people,
including our Gender Pay Gap figures, can be found on pages 70
to 73. There is also information on the Board’s engagement
with our workforce in the People section and with our other
stakeholders on pages 22 to 25.
I would like to thank shareholders for the feedback and views
shared with the Committee 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
28 February 2023
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Executive Directors’ remuneration at a glance
Our Remuneration Policy was approved by shareholders at the AGM on 25 May 2022 and is set out in full in the 2021 DRR.
This can be found in the Annual Report FY 2021 at www.astonmartinlagonda.com.
This section explains the outcomes from the implementation of our Policy during FY 2022.
Remuneration outcomes for FY 2022
FY 2022 total single figure remuneration for Executive Directors
The table below sets out the 2022 single figure of total remuneration received by the Executive Directors.
Element
Salary
Benefits
Pension
Annual bonus
LTIP
Total
Prior company incentives buyout
Total
Amedeo Felisa
CEO from
4 May 2022
(£’000s)
Doug Lafferty
CFO from
1 May 2022
(£’000s)
Tobias Moers
CEO until
4 May 2022
(£’000s)
Ken Gregor
CFO until
30 April 2022
(£’000s)
577
60
60
58
n/a
756
n/a
756
299
16
31
23
n/a
369
1,313
1,682
301
40
31
30
0
402
n/a
402
142
8
15
11
0
175
n/a
175
2022 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 2022 annual bonus, the achieved performance and the level of
payout as a % of maximum for each element.
Performance measure
(weighting)
Adjusted EBITDA (50%)
Free Cash Flow (20%)
Wholesale volumes (7.5%)
Retail volumes (7.5%)
Quality (15%)
Threshold
(20%)
£200m
- £170m
6,000
6,450
Target
(50%)
£250m
- £135m
6,750
7,200
Maximum
(100%)
£275m
- £100m
7,250
7,700
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
PDI – Pre-Delivery Inspection – a fixed series of checks/ processes
that a dealer completes on a new car when it is received
(2)
FY 2022
achieved
FY 2022 bonus payment
(% of maximum)
£190m
- £299m
6,412
5,970
Significant progress
made but stretching
target level not
achieved
0%
0%
2.7%
0%
0%
External – Warranty at 3 and 12 months in service:
(1)
CPU – Cost Per Unit
(2) DPU – Defects Per Unit
5 of 8 targets achieved
2.35%
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For 2022, all elements of the bonus operated independently, and
so although the FY 2022 Adjusted EBITDA outcome of £190m
was below the threshold of £200m, a payment of 5.05% of bonus
(10.1% of target) will be paid based on wholesale volumes
and quality metrics achieved (and no payment with respect to
the FCF or retail volumes measures). As both the CEO and CFO
are new to the business, they are yet to meet their shareholding
guideline and so 50% of the net 2022 bonus payment will be
delivered in shares, deferred for three years.
2020 LTIP awards due to vest based on FY 2022 Adjusted EBITDA
2020 LTIP awards were granted to the prior CEO and CFO in
December 2020. In respect of outstanding 2020 LTIP, awards for
both Tobias Moers and Ken Gregor were preserved but pro rated
based on period of service to their respective termination dates.
The 2020 LTIP awards were subject to Adjusted EBITDA targets
(80% of awards) and relative Total Shareholder Retuen (“TSR”)
(20%), with Adjusted EBITDA assessed over three financial years to
31 December 2022 and TSR measured over a three-year period
from the date of grant to 13 December 2023. The outcome with
respect to the Adjusted EBITDA measure was below the threshold
set and so none of the shares based on Adjusted EBITDA will vest.
Alignment between Executive Directors and shareholders
The new CEO and CFO are subject to shareholding guidelines
of 300% and 200% of salary respectively, which drive long-term
alignment with investors. Having only recently taken up their
Executive Director positions, the CEO held 25,000 shares (value
of £38,513) and the CFO held 358,769 shares (value of £552,684
or 123% of salary) as at 31 December 2022. Of the CFO’s shares,
349,329 are the net number awarded as part of his buyout
arrangements for awards forfeited on leaving his previous
employer (full details are set out on pages 139 and 140).
Remuneration Policy and implementation in FY 2023
The implementation of our Remuneration Policy for FY 2023 is
set out in the following section (Annual Report on Remuneration).
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Annual Report on Remuneration
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.
As disclosed last year, 2022 salaries for Tobias Moers and Ken Gregor were £875,000 and £425,000 respectively; they remained at these
levels to the date they stepped down from the Board.
FY 2022 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 2022
(and the prior financial year). The subsequent sections detail additional information for each element of remuneration.
Shown in £’000s
Executive Director
Lawrence Stroll2
Salary
Benefits
Pension
Total
fixed
Annual
bonus
LTIP
Total
variable
Total
Year to 31 December 2022
Year to 31 December 2021
£1 (one)
£1 (one)
£1 (one)
£1 (one)
Prior
company
incentive
buyout1
Total
£1 (one)
£1 (one)
Amedeo Felisa3
Year to 31 December 2022
Doug Lafferty4
Year to 31 December 2022
Former Executive Directors
Tobias Moers5
Year to 31 December 2022
Year to 31 December 2021
Ken Gregor6
Year to 31 December 2022
Year to 31 December 2021
577
299
301
850
142
425
60
16
40
115
8
13
60
697
58]
n/a
58
756
–
756
31
346
23
n/a
23
369
1,313
1,682
31
90
15
45
372
1,055
164
483
30
–
11
–
–
n/a
–
n/a
30]
402
–
1,055
11
–
175
483
–
–
–
–
402
1,055
175
483
Notes:
1.
As compensation for incentives he forfeited on leaving his previous employer, Doug Lafferty received a cash payment of £442,200 in May 2022 and a further
award of shares with a face value of £771,163 in November 2022 and will receive £100,000 in March 2023, half in cash and half in deferred shares. The buyout
awards are subject to clawback provisions should Doug leave the Company under certain circumstances and full details are set out on pages 139 and 140.
2. Lawrence Stroll has elected to receive a nominal salary only, of £1 per annum, and receives no other elements of remuneration.
3.
2022 remuneration for Amedeo Felisa relates to the period since becoming CEO, 4 May to 31 December 2022; fees in relation to his prior NED role are shown
on page 141.
4. 2022 remuneration for Doug Lafferty relates to the period since joining, 1 May to 31 December 2022.
5. 2022 remuneration for Tobias Moers relates to the period 1 January to 4 May 2022, when he stepped down from the Board.
6. 2022 remuneration for Ken Gregor relates to the period 1 January to 30 April 2022, when he stepped down from the Board.
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Salary (audited)
Amedeo Felisa’s 2022 salary from the date of taking on the CEO role was set at £875,000, consistent with the previous CEO.
Doug Lafferty’s 2022 salary from his date of appointment was £450,000.
The Committee reviewed the CEO and CFO’s salaries for 2023 and decided to apply increases of 2.9% and 4.4% respectively, taking
their salaries to £900,000 and £470,000 (from 1 January 2023). This level of increase is lower than the 2023 pay increases that applied
to employees across the workforce.
The Committee recognises that the CEO and CFO salaries appear high in a UK FTSE 250 context and continues to benchmark
remuneration against global automotive and luxury companies, as these are the most relevant peers. The Committee considers
the 2023 salary levels to be appropriate, as they:
• reflect the experience these executives have as proven talented automotive and manufacturing leaders
• value the skills required to deliver the Company’s strategic objectives and financial targets
• recognise the size of the task to deliver the turnaround of Aston Martin to achieve its full potential
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 NI 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 2022
Shown in £’000s
Amedeo Felisa
Doug Lafferty
Former Executive Directors
Tobias Moers
Ken Gregor
Car
allowance
and personal
mileage
Insurance
(private
medical and
travel)
Life
assurance
Relocation
allowance
Total
–
13
6
5
–
2
1
1
–
1
2
2
60
–
31
–
60
16
40
8
Amedeo Felisa receives an annual cash allowance of £50,000 as relocation assistance. This will be paid for a period of five years from his
start date and the Company also meets the tax payable on this allowance. Tobias Moers received the same relocation allowance until
the date he stepped down from the Board.
Annual bonus
Annual bonus outcomes for FY 2022 (audited)
The Committee 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. The Group scorecard
was cascaded throughout the Company to apply to annual bonus for all employees, providing strong alignment of focus.
For 2022, the scorecard was 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 performance targets for each measure were set by
the Committee at the start of the year, considering the business plan for 2022 and market expectations. The table below sets out
the Group KPI targets, the achieved performance and the level of payout of the bonus as a % of maximum for each element.
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2022 Group KPI targets
Performance measure
(weighting)
Adjusted EBITDA (50%)
Free Cash Flow (20%)
Wholesale volumes (7.5%)
Retail volumes (7.5%)
Quality (15%)
Threshold
(20%)
£200m
- £170m
6,000
6,450
Target
(50%)
£250m
- £135m
6,750
7,200
Maximum
(100%)
£275m
- £100m
7,250
7,700
Internal:
(3)
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
PDI – Pre-Delivery Inspection – a fixed series of checks/processes
that a dealer completes on a new car when it is received
(4)
FY 2022 bonus
payment
(% of maximum)
0%
0%
2.7%
0%
0%
FY 2022 achieved
£190m
- £299m
6,412
5,970
Significant progress
made but stretching
target level not
achieved
External – Warranty at 3 and 12 months in service:
(3)
(4)
CPU – Cost Per Unit
DPU – Defects Per Unit
5 of 8 targets achieved
2.35%
For 2022, all elements of the bonus operated independently, and so although the FY 2022 Adjusted EBITDA outcome of £190m
was below the threshold of £200m, a payment of 5.05% of bonus (10.1% of target) will be paid based on wholesale volumes and
quality metrics achieved (and no payment with respect to the FCF or retail volumes measures). As both the CEO and CFO are new
to the business, their bonus payments will be pro rata for their period of 2022 service and 50% of the net 2022 bonus payment will
be delivered in shares, deferred for three years (as they are yet to meet their shareholding guideline).
The previous CEO and CFO were treated as good leavers and so will receive a pro rata annual bonus with respect to FY 2022.
Annual bonus for FY 2022
Amedeo Felisa
Doug Lafferty
Former Executive Directors
Tobias Moers
Ken Gregor
Maximum
bonus
opportunity
(% of salary)
200%
150%
200%
150%
Performance
measures/
targets
Level of 2022
achievement
Group KPI
targets
See table
above
Group KPI
targets
See table
above
2022 bonus
payment
(% of
maximum)
2022 bonus
payment
(% of salary)
2022 bonus
payment*
(£’000s)
5.05%
10.1%
5.05%
7.6%
5.05%
10.1%
5.05%
7.6%
£58
£23
£30
£11
*
50% of the net 2022 bonus payment will be delivered in shares, deferred for three years.
Bonus shown above for former Executive Directors is for period of 2022 until they stepped down from the Board.
In determining this outcome, the Committee noted that the Group KPI scorecard applied to the 2022 bonus for all employees and while
the outcome based on this alone was low at 5.05% of maximum, the bonus operated below the senior leadership team incorporates
an element of personal performance. A higher level was therefore generally paid to the wider workforce, recognising how hard the
team had worked and the significant continued progress made on both the business plan and turnaround programme during 2022.
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Annual bonus for FY 2023
The Committee has decided to operate the annual bonus in 2023 in line with the Company-wide approach operated in both 2021
and 2022, including a Group scorecard of performance measures to best reflect annual progress on our business plan and KPIs. This
Group scorecard will once again be cascaded throughout the Company to apply to annual bonus for all employees, providing strong
alignment of focus. For 2023, 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 continue to make annual progress during 2023 towards delivering our long term strategy. As we continue to embed
our ESG strategy during 2023, it may be appropriate to link incentives in part to ESG measures from 2024 but we believe 2023 focus
should be on our financial and quality metrics as priorities. The 2023 Group KPI scorecard is set out below; the actual targets remain
commercially sensitive and will be disclosed retrospectively in the 2023 DRR, when the 2023 performance year is complete.
Area
Measure
Weighting
Group KPI scorecard to apply to 2023 annual bonus
Profit
Cash
Volumes
Adjusted
EBITDA
Free Cash
Flow
(FCF)
Wholesale
volumes
50%
20%
7.5%
Retail
volumes
7.5%
Quality
In-house
quality
External
quality
15%
The Committee will continue to have the discretion to adjust bonus outcomes to ensure they are appropriate and reflect underlying
business performance and any other relevant factors.
Long-Term Incentive Plan
The following section sets out details of:
• 2020 LTIP awards due to vest based on FY 2022 Adjusted EBITDA
• 2022 LTIP awards granted during FY 2022
• Approach to 2023 LTIP awards
2020 LTIP awards due to vest based on FY 2022 Adjusted EBITDA
2020 LTIP awards were granted to the senior management team (including the prior CEO and CFO) on 14 December 2020. As set out
in the Committee Chair’s letter and on pages 140 and 141, in respect of outstanding 2020 (and 2021) LTIP awards, awards for both
Tobias Moers and Ken Gregor were preserved but pro rated based on period of service to their respective termination dates. The 2020
LTIP awards were subject to Adjusted EBITDA targets (80% of awards) and relative TSR (20%), with Adjusted EBITDA assessed over
three financial years to 31 December 2022 and TSR measured over a three-year period from the date of grant to 13 December 2023.
The table below sets out the Adjusted EBITDA performance targets and actual performance achieved against these. The outcome with
respect to this measure was below the threshold set and so none of the shares based on Adjusted EBITDA will vest.
LTIP outcomes for FY 2022
Former Executive Directors
Tobias Moers
Ken Gregor
2020 LTIP award
(no. of shares
outstanding
based on 2022
EBITDA)
Performance
measure
Vesting schedule
Level of
performance
achieved
FY 2022 LTIP
vesting (% of
maximum)
FY 2022 LTIP
vesting
(£’000s)
117,774
37,208
FY 2022
Adjusted
EBITDA
(£m)
20% for £200m
80% for £300m
100% for £350m
£190m
0%
0%
£0
£0
Notes
The table above sets out the outcome for the Adjusted EBITDA element of 2020 LTIP awards (80% of awards).
20% of 2020 LTIP awards were subject to relative TSR performance, as set out in the FY 2020 DRR, and this will be measured over 3 years to 13 December 2023.
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2022 LTIP awards granted during FY 2022 (audited)
2022 LTIP share award – CEO
As highlighted in the Committee Chair’s letter, the Committee gave considerable thought to and discussed in detail the
appropriate LTIP award approach to take for Amedeo Felisa, in the role of CEO, and decided to take a tailored one-off approach
to recognise a number of factors. These factors included the importance of aligning the CEO with the share price of the Company
(and so directly with shareholder interests), incentivising and rewarding successful execution of the near term strategy over the
critical period of the business turnaround, the performance of the Company in terms of both financial outcomes and share price,
and the external environment.
With support from the Executive Chairman, the Committee decided to grant an LTIP award of 300% of salary to the CEO (at maximum)
to recognise and incentivise the size of the task and effort required from him to the lead business over the next phase of the business
turnaround. This is fully in line with our Policy and the levels of award historically granted. Vesting of this award is subject to the average
absolute share price of Aston Martin Lagonda Global Holdings plc over the 2-year period from grant date (13 June 2022 to 12 June
2024). With the award based 100% on the Company’s share price, the CEO is directly aligned to shareholder interests and will only
receive value from the award for significant share price growth during the period. The Committee (and Board as a whole) believe
that successful execution of the near term strategy will be reflected in the Company’s share price performance in this period.
The 2-year performance/vesting period was considered important to recognise, incentivise and reward the critical period of the business
turnaround – the 2-year period was fully supported by the Executive Chairman. The Committee also decided following careful consideration
that no self-standing 2-year post vesting holding period would be applied to the award, but rather an open-ended requirement to hold at
least 75% of any LTIP shares that vest (net of tax) will apply (in line with the CEO’s shareholding guidelines).
The table below summarises the 2022 LTIP award granted to the CEO (Amedeo Felisa).
FY 2022
Amedeo Felisa
Type of award
Basis of award
Number of shares
awarded
LTIP share award
300% of salary
872,828
Face value
at grant
(£’000s)
£2,625
Notes:
(1)
In line with standard market practice in the event of an equity capital raise, the number of shares outstanding under 2022 LTIP awards was adjusted to reflect the
dilutive effect of the open offer using the standard theoretical ex-rights price (“TERP”) approach. No adjustments were made in respect of the firm placing.
The LTIP shares were granted on 13 June 2022 and will vest subject to the performance conditions and vesting schedule set out on the following page.
The award was granted in the form of nil-cost options.
(2)
(3)
(4) The face value of the award was calculated using the 3-month average price prior to the date of grant (£3.01 on the TERP adjusted basis).
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The 2022 LTIP award granted to the CEO is subject to the performance conditions detailed below.
2022 LTIP performance measures and targets – CEO
•
Share price performance will be assessed based on the share price of the Company during any period of 30 consecutive days during
the performance period (from 13 June 2022 to 12 June 2024)
• The shares under the award will commence vesting if the share price exceeds £10 and will vest as follows:
Share price of the Company to
exceed £x for 30 consecutive days
* Vesting will be on a straight-line basis between threshold and maximum.
Threshold
Maximum
2022 LTIP targets
£10 (or less)
£18
Vesting*
(as a % of maximum)
0%
100%
While the recent capital raise has impacted the share price, no adjustments have been made to the targets.
2022 LTIP share award – CFO
The more general approach to 2022 LTIP awards was set out in detail in the 2021 DRR, ahead of the grant date (in June 2022). This
approach applied to the 2022 LTIP award granted to the CFO (Doug Lafferty) and the table below summarises this award, including
both the number of shares granted and the number of shares now under award post the adjustment made to the number of awarded
shares to take account of the September 2022 rights issue.
FY 2022
Doug Lafferty
Type of award
Basis of award
Number of shares
awarded
LTIP share award
200% of salary
299,255
Face value
at grant
(£’000s)
£900
Notes:
(1)
In line with standard market practice in the event of an equity capital raise, the number of shares outstanding under 2022 LTIP awards were adjusted to reflect
the dilutive effect of the open offer using the standard theoretical ex-rights price (“TERP”) approach. No adjustments were made in respect of the firm placing.
(2) The LTIP shares were granted on 13 June 2022 and will vest subject to the performance conditions and vesting schedule set out below.
(3) The award was granted in the form of nil-cost options.
(4) The face value of the award was calculated using the 3-month average price prior to the date of grant (£3.01 on the TERP adjusted basis).
The 2022 LTIP award granted to the CFO is subject to the performance conditions detailed below.
2022 LTIP performance measures and targets – CFO
Adjusted EBITDA
(£m in FY 24)
(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 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 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.
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The 2022 LTIP awards granted to both the CEO and CFO are subject to Committee discretion and malus and clawback provisions as
detailed below:
• 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 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.
• The former Executive Directors, Tobias Moers and Ken Gregor, were not granted awards under the LTIP in FY 2022.
2023 LTIP awards
The Committee decided that Adjusted EBITDA continues to be the most appropriate measure of profit for the 2023 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. 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 and 31) will be reflected in our Adjusted
EBITDA and TSR performance.
It is anticipated that 2023 LTIP awards will be granted in May 2023, with an award to the CFO at 200% of salary. No award will be
granted to the CEO given the tailored one-off LTIP award granted in 2022.
The Committee has given considerable thought and discussed in detail the appropriate 2023 LTIP award level to grant to the CFO,
given the external environment, the performance of the Company in terms of both financial outcomes and share price, and the need
to incentivise new leadership and commitments made on his appointment. The Committee has decided to grant the CFO a 2023 LTIP
award at the level set out above to recognise and incentivise the size of the task and effort required to execute the business turnaround.
2023 LTIP performance measures and targets
Adjusted EBITDA
(£m in FY 25)
(80% of award)
Relative TSR**
(vs. luxury peers)
(20% of award)
2023 LTIP targets
Vesting*
(as a % of maximum)
Threshold
Stretch
Maximum
Threshold
Maximum
400
475
550
Rank 6th (median)
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 EBITDA element and threshold and maximum for
the TSR element.
TSR peers as per 2022 LTIP, detailed above.
• 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.
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Performance period
Performance for both measures will be measured over three financial years to 31 December 2025. Subject to performance, awards
will vest 3 years from grant, following the announcement of results for 2025 but subject to a further 2-year holding period post vest
(net of tax).
The CFO will be required to hold at least 75% of any shares that vest (net of tax) until he has met his 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 drive 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 the Company as at 31 December 2022 (or at the date of stepping down, if earlier), as well as the status against the shareholding
guidelines. The table also summarises conditional interests in share or option awards.
As at 31 December 2022
Amedeo Felisa
Doug Lafferty
Shares owned
outright
25,000
358,769
Lawrence Stroll
104,993,195
Former executive directors
Shares vested
but subject to
future release1
Total shares
owned outright
or vested2
As a %
of salary3
Shareholding
guideline
(as % of salary)
Guideline met?
LTIP award shares
unvested and
subject to
performance4
–
–
–
25,000
358,769
104,993,195
4.4%
123%
n/a
1.9%
0.3%
300%
200%
150%
100%
No
No
No
No
872,828
299,255
n/a
198,950
62,456
Tobias Moers
Ken Gregor
8,815
–
1,866
884
10,681
884
Notes:
(1) These shares were awarded under the deferred bonus plan 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 28 February 2023.
(3) Based on the closing share price on 31 December 2022 of £1.54.
(4)
These shares were granted under the 2020, 2021 and 2022 LTIP awards (a pro rata number is shown for Tobias Moers and Ken Gregor to their termination dates,
as per the good lever treatment applied).
(5) The number of shares shown for Lawrence Stroll includes both direct and indirect interests.
(6)
Information for Tobias Moers and Ken Gregor is shown as at the date they stepped down from the Board (4 May 2022 and 30 April 2022 respectively).
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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 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 2022 on page 129.
140
120
100
80
60
40
20
0
O ct-18
D ec-18
Fe b-19
A pr-19
Ju n-19
A u g-19
O ct-19
D ec-19
Fe b-2 0
A pr-2 0
Ju n-2 0
A u g-2 0
O ct-2 0
D ec-2 0
Fe b-21
A pr-21
Ju n-21
A u g-21
O ct-21
D ec-21
Fe b-22
A pr-22
Ju n-22
A u g-22
O ct-22
D ec-22
AML
FTSE 250
CEO total remuneration
FY
Total remuneration (£’000s)
Bonus (% of maximum)
LTIP (% of maximum)
20181
(AP)
407
0%
n/a
20182
(AP)
2019
(AP)
1,347
1,353
0%
n/a
0%
n/a
2020
(AP)
476
0%
n/a
2020
(TM)
2021
(TM)
1,482
1,055
2022
(TM)
402
2022
(AF)
756
20%
n/a
0%
n/a
5.05%
5.05%
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) Amedeo Felisa (AF, CEO from 4 May 2022), Tobias Moers (TM, CEO from 1 August 2020 to 4 May 2022), Dr Andy Palmer (AP, CEO to 25 May 2020).
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Director remuneration relative to employees
The table below compares the total salary/fees, benefits and bonus received by each Director during FY 2022 compared with 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 2021 and 2022 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
FY 22
Salary fees
Bonus
Benefits
FY21
Salary fees
Bonus
Benefits
6%
23%
0%
0%
0%
0%
0%
n/a
n/a
0%
n/a
n/a
Tobias
Moers
3%
0%
+100%
+100%
0%
3%
72%
0%
-100%
-100%
0%
72%
Ken
Gregor
Robin
Freestone
Natalie
Massenet
Marigay
McKee
Franz
Reiner
Antony
Sheriff
Anne
Stevens
0%
n/a
n/a
1%
n/a
n/a
2%
n/a
n/a
0%
n/a
n/a
60%
n/a
n/a
19%
n/a
n/a
Notes:
(1)
The comparator group includes all UK employees. This group represents the majority of Aston Martin employees and is the same group used for the pay ratio
reporting below
For the comparator group of employees, the salary year-on-year change is shown includes the annual salary review from 1 January 2022 but excludes any
additional changes made in the year, for example on promotion. Non-management employees also received a lump-sum payment of £750 as well as the general
salary increase, as agreed with the trade union
The year-on-year change in bonus is shown for non-management employees only – this population received their fixed contractual annual bonus payments in
2021 and a Company-performance related bonus in 2022. The increase for the former CEO and CFO reflects the bonus payment set out on page 131 in respect
of 2022 and a zero payment in respect of 2021
For benefits, there were no changes to benefit policies or levels during the year – the year-on-year change shown for Ken Gregor results from the annualising
of one mileage payment that was received during his period on the Board (but no further payments were made for the remainder of his service)
Natalie Massenet, Marigay McKee and Anne Stevens are paid in USD – the small % increases are rounding from FX rate conversions. The majority of the increase
for Anne Stevens results from her fees received as the chair of the Sustainability Committee established in 2022
(2)
(3)
(4)
(5)
(6) The increase for Antony Sheriff results from his fees received as a member of the Product Strategy Committee established in 2022 – these are detailed on page 142
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 129) to the remuneration of the median UK employee as well as employees at each of the lower and upper quartiles. Due to the
change of CEO during the year, the FY 2022 values are derived from the total single figure of remuneration table on page 129 for the
periods that each of Amedeo Felisa and Tobias Moers held the CEO role (and added together).
CEO pay ratios (Option A)
FY 22
FY 21
FY 20
FY 19
25th
percentile
(P25)
(P25)
26 to 1
27 to 1
53 to 1
34 to 1
Median
(P50)
(P50)
22 to 1
23 to 1
45 to 1
29 to 1
75th
percentile
(P75)
(P75)
18 to 1
19 to 1
37 to 1
24 to 1
The ratios are calculated using ‘option A’ as set out in the disclosure regulations. The employees at the lower quartile, median and upper
quartile (P25, P50 and P75) were determined based on total remuneration for FY 2022 using a calculation approach consistent with
that used for the incumbent CEO in the single figure table on page 129. 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 2022 for the employees identified at P25, P50 and P75 was £44k, £52k, and £63k respectively. The base salary for FY 2022 for
the employees at P25, P50 and P75 was £37k, £52k and £52k 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.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Relative importance of spend on pay for FY 2022
The table below sets out the total payroll costs for all employees for FY 2022 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
FY 2021
FY 2022
£m
190
% change
+37.7%
£m
% change
£m
0
0%
191
% change
+25.7%
138
n/a
0
0%
152
Service agreements
The table below sets out information on service agreements for the Executive Directors.
Executive Director
Title
Lawrence Stroll
Executive Chairman
Amedeo Felisa
Doug Lafferty
Chief Executive Officer
Chief Financial Officer
Effective date of
service agreement
20 April 2020
4 May 2022
1 May 2022
Notice period to
and from the Company
Mr Stroll’s appointment is
terminable in accordance
with the Yew Tree
Relationship Agreement
12 months
12 months
The service agreements for Executive Directors are available for inspection by shareholders at the registered office of the Company.
External appointments
It is recognised that Non-executive Directorships can provide a further level of experience that can benefit the Company. As such, Executive
Directors may usually take up one Non-executive Directorship (broadly equivalent in terms of time commitment to a FTSE 350 Non-
executive Directorship role) subject to the Board’s approval as long as there is no conflict of interest. A Director may retain any fee received
in respect of such Non-Executive Directorship. The CEO is the Chairman of Atop S.p.A. and the CFO does not hold any Non-executive
Directorships.
Further information on remuneration for new Executive Directors
Remuneration for the CEO
Amedeo Felisa’s 2022 remuneration for his role as CEO (from 4 May 2022) is detailed below and is in line with remuneration for the previous
CEO and the Remuneration Policy:
• Base salary of £875,000, in line with the previous CEO and reflecting his experience one of the most highly regarded leaders and
engineering professionals in the high-performance luxury sports car sector
• An annual cash allowance of £50,000 for a period of 5 years as relocation assistance (the Company will also meet tax payable on
this allowance)
• 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 200% of salary, pro rata for period of employment in 2022
• A tailored 2022 LTIP award, as set out on page 133
Remuneration for the CFO
Doug Lafferty’s remuneration from his date of appointment was detailed in last year’s report. Further information is set out below on the
buyout awards Doug received during 2022.
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/last year’s report, the Committee agreed to buyout awards forfeited on leaving his previous employer. The buyout awards
were structured to mirror the value and timing of the forfeited awards. 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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Financial Statements
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Corporate Governance continued
Directors’ Remuneration Report continued
1. Annual bonus buyouts
As compensation for his 2021 annual bonus that Doug forfeited on leaving his previous employment, he was paid £442,200 in cash in
May 2022. This payment was based on a combination of company and personal performance at his previous employer and subject to
time pro rating to reflect his period in employment in 2021. The outcome and forfeiture of this bonus was confirmed in writing by his
previous employer.
As compensation for his 2022 annual bonus that Doug forfeited on leaving his previous employment, he will be paid £50,000 in cash in
March 2023 and an award of value £50,000 in AML shares will be made which will be subject to deferral for three years.
2. 2021 LTIP award buyout
As compensation for his 2021 LTIP award that Doug forfeited on leaving his previous employment:
Doug was granted a one-off buyout award of AML shares in November 2022
•
• the value of this award was determined at £771,163 – this was the value of the forfeited LTIP award as at the date it would have
crystallised, upon the completion of the acquisition of the CFO’s previous employer (25 July 2022)
• the value was calculated based on the number of shares in Doug’s forfeited 2021 LTIP award, the value per share as per the acquisition
terms of his previous employer, the performance outcome and time pro rating as determined by the previous employer’s
remuneration committee
• the outcome and forfeiture of the 2021 LTIP were confirmed in writing by the previous employer
• the number of shares in the award was calculated based on this value and the share price as at the time of grant (average price over
the 3 days preceding grant date)
• these AML shares vested immediately, and Doug is required to retain at least 75% of the shares (net of tax), in accordance with his
shareholding guideline
Further information on remuneration for Executive Directors who left during the year
Remuneration for the prior CEO (Tobias Moers)
Tobias Moers stepped down as an Executive Director of the Company and as CEO on 4 May 2022. The following remuneration
arrangements applied in connection with the termination of his employment:
•
•
•
•
•
Tobias Moers had a 12-month notice period which commenced on 4 May 2022. He stepped down from the Board on that date but
remained employed and available to the Group until 31 July 2022 at which point his employment terminated. He was paid his normal
salary and received benefits as an employee until his termination date and was paid £664,041 (less applicable tax deductions) in lieu
of the unserved part of his notice period.
Tobias Moers remained eligible to receive a pro rata annual bonus for the period of service from 1 January 2022 to 31 July 2022. His
2022 annual bonus (detailed on page 131) will be delivered 50% in cash and 50% in deferred shares under the Deferred Bonus Share
Plan (DBSP). His 2021 DBSP awards over 1,866 shares will be released in full on the original release date (14 June 2024).
In respect of outstanding 2020 and 2021 LTIP awards, these awards were preserved but pro rated based on period of service from
grant date to 31 July 2022. The pro rata number of shares under each award (2020 LTIP award – 147,218 and 2021 LTIP award – 51,732)
remain subject to the original performance conditions and vesting dates. The outcome with respect to the Adjusted EBITDA element
of the 2020 LTIP award is shown on page 132 (zero vesting). Tobias was not eligible for a 2022 LTIP award.
Tobias Moers had not yet achieved his target shareholding of 150% of his base salary and so will maintain his full actual shareholding
for two years from the date he stepped down as a Director.
The Company will cover the reasonable costs of advice and assistance for tax filings in respect of payments that he receives from
Aston Martin Lagonda. Tobias will continue to be covered by the Company’s D&O insurance and received a contribution towards
his legal advice of £6,000 plus VAT.
• No payments for loss of office were or will be paid to Tobias Moers.
Remuneration for the prior CFO (Kenneth Gregor)
Kenneth Gregor stepped down as Chief Financial Officer and as an Executive Director on 1 May 2022. The following remuneration
arrangements applied in connection with the termination of Kenneth Gregor’s employment:
•
•
•
Kenneth Gregor stepped down from the Board on 1 May 2022 but remained employment and available to the Group until 30 June 2022.
He continued to be paid salary, pension and receive benefits as an employee in the period to 30 June 2022.
Salary, pension and benefits ceased following the termination date and no payment in lieu of notice was made for the unserved notice
period beyond the termination date.
2022 bonus – the Committee decided to apply discretion to treat Kenneth Gregor as a good leaver. Kenneth Gregor remained eligible
to receive a pro rata bonus for his period of 2022 service to the termination date. His 2022 annual bonus (detailed on page 131) will be
delivered 50% in cash and 50% in deferred shares under the Deferred Bonus Share Plan (DBSP).
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
•
•
•
•
•
In respect of his outstanding 2021 DBSP award, the Committee decided to apply discretion to treat Kenneth Gregor as a good leaver
and this award will be released in full on the original release date (884 shares on 14 June 2024).
In respect of his outstanding 2020 and 2021 LTIP awards, the Committee decided to apply discretion to treat Kenneth Gregor as
a good leaver and these awards were 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) remain subject to the original
performance conditions and vesting dates. The outcome with respect to the Adjusted EBITDA element of the 2020 LTIP award is
shown on page 132 (zero vesting). Ken was not eligible for a 2022 LTIP award.
Kenneth Gregor is required to retain all those shares in the Company that he held as at 30 June 2022 (including shares under the
DBSP awards) for a period of two years until 30 June 2024.
Kenneth Gregor 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 were or will be paid to Kenneth Gregor.
Non-executive Directors’ remuneration (audited)
The Policy on remuneration for Non-executive Directors is set out in the Directors’ Remuneration Report FY 2021 (which can be found in
the Annual Report FY 2021 at www.astonmartinlagonda.com).
The table below sets out the single figure of total remuneration received or receivable by the Non-executive Directors in respect of
FY 2022 (and the prior financial year).
Shown in £’000s
Non-executive Directors
Ahmed Al-Subaey1
Year to 31 December 2022
Nigel Boardman2
Year to 31 December 2022
Michael de Picciotto
Year to 31 December 2022
Year to 31 December 2021
Robin Freestone
Year to 31 December 2022
Year to 31 December 2021
Natalie Massenet
Year to 31 December 2022
Year to 31 December 2021
Marigay McKee3
Year to 31 December 2022
Year to 31 December 2021
Franz Reiner
Year to 31 December 2022
Year to 31 December 2021
Scott Robertson4
Year to 31 December 2022
Antony Sheriff5
Year to 31 December 2022
Year to 31 December 2021
Anne Stevens6
Year to 31 December 2022
Year to 31 December 2021
Former Non-executive Directors
Amedeo Felisa7
Year to 31 December 2022
Year to 31 December 2021
Total fees
10
15
–
–
85
71
67
32
63
30
60
29
11
145
83
101
78
123
34
Notes:
(1) Ahmed Al-Subaey joined the Board on 1 November 2022.
(2) Nigel Boardman joined the Board on 1 October 2022.
(3) Marigay McKee became a member of the Sustainability Committee on 24 July 2022.
(4) Scott Robertson joined the Board on 1 November 2022.
(5)
Antony Sheriff was a member of the Product Strategy Committee from 19 January to 4 May 2022 and attended 10 meetings during FY 2022; he also became
a member of the Sustainability Committee on 24 July 2022.
(6) Anne Stevens became the Chair of the Sustainability Committee on 24 Juy 2022.
(7)
Amedeo Felisa was the Chair of the Product Strategy Committee from 19 January to 4 May 2022 and attended 10 meetings during FY 2022; Amedeo was an
NED from 1 January to 4 May 2022, he then became the CEO – fees shown above are for his service as an NED, his CEO remuneration is set out on page 129.
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Directors’ Remuneration Report continued
Summary of Non-executive Directors’ fees for FY 2023
The table below sets out the annual fee structure for the NEDs for 2023. Following a review of NED fee levels, the Board (excluding the
NEDs) decided to apply a modest increase to all fees, recognising that fees had not been reviewed since 2020 (at which time NED fees
had been reduced) and the significant workload of the Board. The 2023 fee levels shown below are effective 1 January 2023. NED fee
levels will be reviewed (but not necessarily increased) on an annual basis going forward.
NED role
Basic NED fee
SID fee
Committee Chair
Committee member
FY 2022 fee
(£’000s)
FY 2023 fee
(£’000s)
60
15
15
5
65
17
17
6
The Product Strategy Committee was established on 19 January 2022 and remained in operation until 4 May 2022. The Committee
met 10 times during the 2022 period of operation and the Chair and Non-executive member received the following fees as set out
in last year’s DRR:
•
•
Chair (Non-executive Director) – £10,000 per meeting
Member (Non-executive Director) – £5,000 per meeting
Non-executive Director shareholdings (audited)
The table below 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 2022.
Non-executive Directors
Ahmed Al-Subaey
Nigel Boardman
Michael de Picciotto2
Robin Freestone
Natalie Massenet
Marigay McKee
Franz Reiner
Scott Robertson
Antony Sheriff
Anne Stevens
Former Non-executive Directors
Amedeo Felisa3
Notes:
(1) Other than those stated below, there have been no changes in the period up to and including 28 February 2022.
(2) Held via St James Invest SA.
(3) Held via FA Consult.
Total number of shares owned1
–
38,400
6,993,787
33,355
20,000
–
–
–
–
35,000
25,000
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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.
Non-Executive Directors
Ahmed Al-Subaey
Nigel Boardman
Michael de Picciotto
Robin Freestone
Natalie Massenet
Marigay McKee
Franz Reiner
Scott Robertson
Antony Sheriff
Anne Stevens
Date of appointment
1 November 2022
1 October 2022
24 April 2020
1 February 2021
8 July 2021
8 July 2021
8 July 2021
1 November 2022
1 February 2021
1 February 2021
Notice period
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
The terms and conditions of appointment for Non-executive Directors are available for inspection by shareholders at the registered
office of the Company.
Remuneration Committee in FY 2022
Committee membership
The following Directors served as members of the Committee during FY 2022:
• Anne Stevens (Chair)
• Robin Freestone
• Antony Sheriff
• Natalie Massenet
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, Chief Global Brand and
Commercial Officer, General Counsel, Group Chief Technology Officer, Chief People Officer and Chief Procurement Officer).
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Financial Statements
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Corporate Governance continued
Directors’ Remuneration Report continued
Summary of meetings
The Committee typically meets four to six times a year. During FY 2022, the Committee met eight times and the agenda items discussed
at these meetings are summarised below.
January
• Approval of incoming CFO remuneration
Early February
Late February
April
May
September
October
December
• Expected 2021 annual bonus outcome
• 2022 approach to incentives – financial measure targets
• Review of draft FY 2021 Directors’ Remuneration Report
• Approval of 2021 annual bonus payment
• Approval of 2022 annual bonus quality measures and targets
• Approval of 2022 LTIP awards
• Approval of 2021 Directors’ Remuneration Report
• Approval of 2021 Gender Pay Gap report
• Approval of Chief People Officer remuneration
• Update on 2022 trade union pay negotiations
• Approval of Chief population 2022 remuneration
• Approval of CEO 2022 remuneration
• Approval of Group Chief Technology Officer remuneration
• Incoming CEO remuneration
• Outgoing CEO remuneration terms
• Update on external executive pay environment
• Update on broader employee reward
• 2022 annual bonus – performance update
• Approval of all-employee share award
• Broader employee retention discussion
• Approval of CFO buyout share award – actual grant
• Approval of Chief Procurement Officer remuneration
• Approval of consultancy fee for Nigel Boardman related to legal advice
• Update on external reward environment and latest investor guidelines
• Update on broader employee reward
• Expected 2022 annual bonus and 2020 LTIP outcomes
• FY 2023 incentives approach
• Approval of adjustment to 2022 LTIP awards for rights issue
• Remuneration Committee annual evaluation
• Approval of updated Remuneration Committee terms of reference
Attendance at Committee meetings
The following table sets out the number of meetings attended by each Committee member during FY 2022
Director
Robin Freestone*
Natalie Massenet
Antony Sheriff
Anne Stevens
Meetings attended
7/8
8/8
8/8
8/8
*
Robin Freestone missed one unscheduled meeting due to the meeting being called at very short notice.
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 108 and 109). 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.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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, VP and General
Counsel, Company Secretary, Chief People Officer 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 2022 were £36,763, which had been charged on a time spent basis.
Freshfields 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.
Remuneration voting results
The table below shows the results of the shareholder votes at the 2022 AGM on the DRR and the Directors’ Remuneration Policy.
AGM voting results
2022 AGM:
Votes for
Votes against Votes withheld
To approve the DRR for the year ending 31 December 2021
69,221,928
461,486
4,411
To approve the 2022 Directors’ Remuneration Policy
67,922,049
1,772,525
4,251
(97.46%)
(2.54%)
(99.34%)
(0.64%)
Approval
This report has been approved by the Board and signed on its behalf by:
Anne Stevens
Chair, Remuneration Committee
28 February 2023
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Directors’ Report
About the Directors’ Report
This Directors’ Report sets out the information required
to be disclosed by the Company in compliance with the
Companies Act 2006, the UK Listing Rules and the Financial
Conduct Authority’s Disclosure Guidance and Transparency
Rules (DTRs). It forms part of the management report as required
under the DTR, along with the Strategic Report (pages 4-85)
and other sections of this Annual Report and Accounts including
the Corporate Governance Report (pages 86-145) all of which
are incorporated by reference, as outlined in the table below.
Information
Business model
Reported in
Strategic Report
Corporate governance framework
Corporate Governance Report
Community and charitable giving
Strategic Report
Credit market and liquidity risks
Directors’ conflicts of interest
Financial Statements (note 22)
Corporate Governance Report
Directors’ share interests and remuneration
Directors’ Report on Remuneration
Director training and development
Corporate Governance Report
Equity, Diversity and Inclusion
Employee engagement
Strategic Report
Nomination Committee Report
Strategic Report
Governance Report
Financial instruments
Financial Statements (note 22)
Future developments and strategic priorities
Strategic Report
Going concern statement
Greenhouse gas emissions
Health and safety
Human rights
Modern Slavery Statement
Principal risks and risk management
Non-financial information
Financial Statements (note 1)
Strategic Report
Strategic Report
Directors’ Report
Strategic Report
Strategic Report
Strategic Report
Non-pro rata allotments for cash
Financial Statements (note 26)
Results
Consolidated Income Statement
Risk management and internal control
Section 172 Statement
Stakeholder engagement
Statement of Directors’ Responsibilities
Viability Statement
Workforce engagement
Strategic Report
Strategic Report
Strategic Report
Directors’ Report
Strategic Report
Governance Report
Pages
26-27
98-99
70
199
112
136
112
70-73
113
24
102-103
199
30-31
169-170
67
70-71
151
79
80-85
79
216
164
80-85
106-107
22-25
152
85
102-103
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Directors
Details of Directors who served throughout the year are set out in the table below. Sir Nigel Boardman, Ahmed Al-Subaey and
Scott Robertson will be offering themselves for election in accordance with the Company’s Articles of Association at the 2023 AGM
and all the remaining existing Directors will be offering themselves for re-election.
Name
Lawrence Stroll
Amedeo Felisa
Doug Lafferty
Ahmed Al-Subaey
Sir Nigel Boardman
Michael de Picciotto
Robin Freestone
Kenneth Gregor
Dame Natalie Massenet, DBE
Marigay McKee, MBE
Tobias Moers
Franz Reiner
Scott Robertson
Antony Sheriff
Dr Anne Stevens
Date of appointment
Date of cessation
20 April 2020
4 May 2022 as CEO1
1 May 2022
1 November 2022
1 October 2022
24 April 2020
1 February 2021
22 June 2020
8 July 2021
8 July 2021
1 August 2020
8 July 2021
1 November 2022
1 February 2021
1 February 2021
1 May 2022
4 May 2022
1
Amedeo Felisa was appointed an Independent Non-executive Director on 8 July 2021 and was appointed Chief Executive Officer on 4 May 2022.
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):
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 2022 and up to
the date of this Report.
Annual General Meeting
The Company’s Annual General Meeting (AGM) will be held at
10.30am on Wednesday 17 May 2023 at the offices of Freshfields
Bruckhaus Deringer. The Notice of the AGM will be available on the
Company’s website at www.astonmartinlagonda.com/investors.
•
•
•
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.
The Company’s prospectus dated 5 September 2022 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.
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, Directors
can be appointed or removed by the Board or by shareholders
in a general meeting. Amendments to the Articles 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, the Directors may exercise all the powers
of the Company, 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 98.
The rules governing the appointment and removal of a Director
are set out in the Articles of the Company. Specific details relating
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Strategic Report
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Further Information
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86
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230
Corporate Governance continued
Directors’ Report continued
to the significant shareholder groups and their right to appoint
Directors are set out on page 149.
Corporate Governance Statement
Under the 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 96. A description of the
composition and operation of the Board and its Committees is set
out on pages 96-145. Other than the areas of non-compliance
identified on page 96, the Company has complied throughout the
accounting period with the 2018 UK Corporate Governance Code.
Going concern
After due enquiry, 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. 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
to the Financial Statements and the Viability Statement is set out
on page 85.
Dividend and results
Revenue from the continuing business during the period amounted
to £1.4bn (2021: £1.1bn). A review of the Group’s consolidated
results is set out from page 164.
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. The Directors
are not recommending any dividend for the 2022 financial year.
Following shareholder approval at the general meeting on
4 December 2020 and pursuant to the Warrant Instrument
dated 7 December 2020, as amended on 28 September 2022
(Warrant Instrument), the Company issued 126,647,852 warrants
granting rights to subscribe for up to 37,994,356 ordinary shares
of £0.10. Each warrant entitles a warrantholder to subscribe for
0.3 warrant shares at the subscription price of £1.67 per warrant
share. 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 Prospectus dated 5 September 2022 and the announcement
by the Company on 28 September 2022 which can be found on
the Company’s website. No subscription rights were exercised
by warrantholders during 2022. Further details are contained
in note 22 to the Financial Statements.
On 31 December 2022 the Employee Benefit Trust held a total of
368,868 ordinary shares (4,575 unallocated shares and 364,293
shares allocated from prior share awards, held as Nominee Shares).
The right to receive any dividend has been waived by the Trustee
of the Employee Benefit Trust over the entire unallocated shares
and we note that any dividend due to be paid over allocated shares
would be paid directly to the Company (as the Trustee Paying
Agent) for onward distribution to the respective individuals.
The Trustee has the right to exercise any voting rights in respect
of the unallocated shares it holds and will vote in accordance
with the voting instructions received from the beneficial owners
of the allocated shares.
Substantial shareholdings
The Company has received notifications of major interests in
its issued ordinary share capital in accordance with Rule 5 of
the DTRs. Details of the position as at the end of the financial
year are as follows:
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.
Shareholder
Lawrence Stroll1
The Public
Investment Fund
Number of
ordinary shares
198,681,199
130,459,510
At 31 December 2022, 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.
Yew Tree Overseas Ltd
104,993,195
Invesco Limited
Ernesto Bertarelli
Mercedes-Benz AG
Li Shufu (Geely)
71,151,282
69,984,367
68,194,802
53,073,720
% of total voting rights
28.43%
18.67%
15.03%
10.18%
10.02%
9.76%
7.60%
As at 31 December 2022, the Company had 698,757,075 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 2022 AGM).
1
Includes 104,993,195 shares also disclosed by Yew Tree Overseas Ltd
and 69,984,367 shares also disclosed by Ernesto Bertarelli.
There have been no changes notified to the Company in accordance
with Rule 5 of the DTRs to the holdings disclosed above.
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
148
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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 Coopration Agreement
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.
% of voting rights
to nominate
one director as
a member of
the Nomination
Committee and an
observer to the
Remuneration and
Audit and Risk
Committees
7%
7%
7.5%
Significant
shareholder group
Yew Tree
Consortium
Public
Investment Fund
Mercedes-
Benz AG
% of voting rights
to nominate two
directors
% of voting rights
to nominate one
director
10% or above
10% or above
15% or above
Between 7%
and 10%
Between 7%
and 10%
Between 7.5%
And 15%
Transactions with related parties
Details of Related Party Transactions which have been undertaken
in the year ended 31 December 2022 are included within note 30 to
the Financial Statements.
Significant contracts
At 31 December 2022, the Group had a Revolving Credit Facility
of £90.6m which contains a change of control clause. The Group
also had US$1,143.7m of 10.50% Senior Secured Notes due 2025,
and US$229.1m 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 three groups of significant shareholders,
namely the Yew Tree Consortium, The Public Investment Fund and
Mercedes-Benz AG. The relationship between the Company and
each of these significant shareholder groups is governed by three
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.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Corporate Governance
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Corporate Governance continued
Directors’ Report continued
Each of the Relationship Agreements provides that each significant
shareholder group is entitled to nominate director(s) to the Board
and the Nomination Committee and an observer to the Remuneration
and Audit and Risk Committees, subject to the size of its respective
interest in the voting rights of the Company as set out in the table
on the previous page.
On 27 October 2020, the Company announced that it had entered into
an enhanced strategic cooperation arrangement, and subsequently
amended it by a deed of amendment of 28 July 2022 (the “Strategic
Cooperation Agreement”) with one of its existing shareholders,
MBAG. Under the Strategic Cooperation Agreement, the Company
has agreed, by no later than July 2024 and in at least two tranches,
to issue 22,947,138 ordinary shares of £0.10 each 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 11,232,864 ordinary shares of £0.10 were issued to
MBAG on 7 December 2020. There are currently no plans to issue
additional shares to MBAG until 2024. Further details of the terms of
the Strategic Cooperation Agreement are set out in the Prospectus
dated 5 September 2022.
In addition to the terms agreed in the Strategic Cooperation
Agreement, the Group has a long-standing technical partnership
with MBAG for the provision of engines, electrical architecture
and entertainment systems. This partnership began in 2013,
when MBAG became one of Aston Martin Holdings (UK) Limited’s
shareholders. The agreements governing this relationship contain
provisions that provide that where a strategic MBAG 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.
In early 2020, the Group entered into a sponsorship agreement, as
amended in 2022, for a ten-year initial term under which the Racing
Point F1® 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 F1® 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 F1®
expenditure and renewable for an additional five year term, subject
to certain conditions being satisfied. After that first five year
renewal term, the sponsorship arrangements will be renewable at
the Board’s discretion for additional ten year periods up to the end
of 2060. The Group anticipates that this agreement will strengthen
its brand presence without being associated with the direct costs
of owning an F1® team. Under the agreement, the Group will move
to an enhanced presence by providing the chassis and the team
name Aston Martin.
On 29 July 2022, the Company entered into a placing agreement
with The Public Investment Fund (Placing Agreement). The
Company provided certain customary representations, warranties
and undertakings in favour of The Public Investment Fund pursuant
to the Placing Agreement, including an undertaking that, between
the date of the Placing Agreement and 180 calendar days after the
settlement date of the 2022 capital raise (being 29 March 2023),
inclusive, it would not without the prior written consent of The
Public Investment Fund, enter into certain transactions involving or
relating to ordinary shares, subject to certain carve-outs and waivers,
including the issue of any ordinary shares or options or the grant
of any right to acquire ordinary shares pursuant to any employees’
share schemes that existed at the date of the Placing Agreement,
which were disclosed in the Prospectus dated 5 September 2022.
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.
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.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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.
Disclaimer
As set out in more detail on the inside back cover of this agreement,
the purpose of this Annual Report is to provide information to the
members of the Company and it has been prepared for and only for,
the members of the Company as a body, and no other persons. The
Company, its Directors and officers, employees and advisors do not
accept or assume responsibility to any other person to whom this
document is shown or into whose hands it may come and any such
responsibility or liability is expressly disclaimed.
A cautionary statement in respect of forward-looking statements
contained in this Annual Report appears on the inside back cover
of this document.
The Strategic Report (from pages 4 to 85) and the Directors’
Report (as described above) have been approved by the Board
on 28 February 2023.
By order of the Board
Liz Miles
Company Secretary
Aston Martin Lagonda Holdings Plc
Registered Office: Banbury Road, Gaydon, Warwick, CV35 0DB
Registered in England and Wales.
Registered Number: 11488166.
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.
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 2022, 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.
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 2022 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 will be provided in the
Notice of this year’s AGM.
Research and development
The Group spent £246m (2021: £191m) on research and development
during the year. See note 4 to the Financial Statements.
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
2022, and a description of the principal risks and uncertainties
faced by the Company. The Strategic Report on pages 4 to 85
is incorporated by reference and shall be deemed to form part
of this Directors’ Report.
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
151
Strategic Report
Corporate Governance
Financial Statements
Further Information
4
86
164
230
Corporate Governance continued
Statement of Directors’ Responsibilities
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report
which includes the Strategic Report, the Directors’ Report, the
Directors’ Remuneration Report and the Group and parent
Company Financial Statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare Group and parent
Company Financial Statements for each financial year. Under that
law the Directors have elected to prepare the Group Financial
Statements in accordance with 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:
• 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;
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 Directors’ 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 90-93, confirm to the best
of their knowledge:
• 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
• provide additional disclosures when compliance with the
• that they consider the Annual Report and Accounts, taken as
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.
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 28 February 2023
and signed on its behalf by:
Amedeo Felisa
Chief Executive Officer
Doug Lafferty
Chief Financial Officer Office
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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 2022 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 2022 which comprise:
Group
Parent company
Consolidated statement of financial position
as at 31 December 2022
Consolidated statement of comprehensive income
for the year then ended
Parent company statement of financial position
as at 31 December 2022
Parent company 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 group 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.
153
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022 Corporate Governance continued
Independent Auditor’s Report to the members
of Aston Martin Lagonda Global Holdings plc continued
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation
of the financial statements is appropriate. Our evaluation of the directors’ assessment of the group and parent company’s ability to
continue to adopt the going concern basis of accounting included the following procedures:
• Understanding and walking through management’s process for and controls related to assessing going concern including discussion
with management to ensure all key factors were taken into account;
• Obtaining management’s going concern assessment, which covers the period to 30 June 2024, 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 the current macro-economic circumstances and the
disclosed climate change commitments of the group;
• Analysing the historical accuracy of forecasting by comparing management’s forecasts to actual results, both for 2020, 2021 and
2022 as well as 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, the
current macro-economic climate, and the threat of potential litigations and claims;
• Considering the downside scenario identified by management in their assessment on pages 169-170, 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 while the group achieved lower than forecast total core wholesale volumes than it was originally targeting in 2022,
this was driven by supply chain challenges impacting the timing of production and the related vehicle wholesale. 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 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 2024.
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.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022Strategic Report4Corporate Governance86Financial Statements164Further Information 230 Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this
report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the group’s ability
to continue as a going concern.
Overview of our audit approach
Audit scope
• We performed an audit of the complete financial information of 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,
Key audit matters
• Revenue recognition, specifically;
100% of Revenue and 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 £4.75m which represents 2.5% of Adjusted Earnings before interest, tax, depreciation
and amortisation (‘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, the potential impact of climate change and other factors such as recent Internal audit results when assessing the level
of work to be performed at each component.
In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate quantitative coverage
of significant accounts in the financial statements, of the 7 reporting components of the Group, we selected 6 components covering
entities within the UK, Europe, USA, Japan and China, which represent the principal business units within the Group.
Of the 6 components selected, we performed an audit of the complete financial information of 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 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% (2021: 100%) of the Group’s Adjusted
EBITDA, 100% (2021: 100%) of the Group’s Revenue and 100% (2021: 100%) of the Group’s Total assets. For the current year, the full
scope components contributed 98% (2021:94%) of the Group’s Adjusted EBITDA, 97% (2021: 94%) of the Group’s Revenue and 98%
(2021: 98%) of the Group’s Total assets. The specific scope component contributed 2% (2021: 6%) of the Group’s Adjusted EBITDA, 3%
(2021: 6%) of the Group’s Revenue and 2% (2021: 2%) 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 significant accounts tested
for the Group.
For 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.
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The charts below illustrate the coverage obtained from the work performed by our audit teams.
Adjusted EBITDA
Revenue
Total assets
98% Full scope components
2% Specific scope components
97% Full scope components
3% Specific scope components
98% Full scope components
2% Specific scope components
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 directly by the primary audit team. For the
component 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 the full scope component audited by the EY global network firm each year. During the current year’s
audit cycle, visits were undertaken by the primary audit team to the component team in China. In FY 2022, these visits were conducted
virtually due to the COVID-19 pandemic. The sessions involved meeting with our local component team 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. The
primary team interacted regularly with the component teams where appropriate during various stages of the audit, reviewed relevant
working papers and 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
Stakeholders are increasingly interested in 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 58-67 in the required Task Force for Climate related Financial Disclosures and on pages 82-84 in the
principal risks and uncertainties. They have also explained their climate commitments on page 65. All of these disclosures form part
of the “Other information,” rather than the audited financial statements. Our procedures on these unaudited 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, in line with our responsibilities on “Other information”.
In planning and performing our audit we assessed the potential impacts of climate change on the Group’s business and any consequential
material impact on its financial statements.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022Strategic Report4Corporate Governance86Financial Statements164Further Information 230 The Group has explained in Note 1 how they have reflected the impact of climate change in their financial statements including how this
aligns with their commitment to the aspirations of the Paris Agreement to achieve net zero emissions by 2050. 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 2024 nor the viability of the Group over
the next five years.
Our audit effort in considering the impact of climate change on the financial statements was focused on evaluating management’s
assessment of the impact of climate risk, physical and transition, their climate commitments, the effects of material climate risks
disclosed on pages 62–63 and whether these have been appropriately reflected in asset values where these are impacted by
future cash flows, being the impairment testing of capitalised development costs and deferred tax asset recoverability following the
requirements of UK adopted international accounting standards. As part of this evaluation, we performed our own risk assessment,
supported by our climate change internal specialists, to determine the risks of material misstatement in the financial statements
from climate change which needed to be considered in our audit.
We also challenged the Directors’ considerations of climate change risks in their assessment of going concern and viability and associated
disclosures. Where considerations of climate change were relevant to our assessment of going concern, these are described above.
Based on our work we have considered the impact of climate change on the financial statements to impact certain key audit matters.
Details of our procedures and findings are included in our explanation of key audit matters below.
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.
Key observations communicated
to the Audit and Risk 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.
Risk
Our response to the risk
Revenue Recognition
(2022: £1,381.5m, 2021: £1,095.3m)
Refer to the Audit and Risk
Committee Report (page 117);
Accounting policies (page 171);
and Note 3 of the Consolidated
Financial Statements (page 180)
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.
In the current year the business and
industry has experienced supply
chain challenges and as a result
there is an increased risk that
revenue is recognised ahead of
the vehicle build being complete.
There is also a risk of overstatement
of revenue through inappropriate
manual journal entries.
• We confirmed the existence and the design effectiveness of
controls within the sales process, paying particular attention
to those around cut-off and bill and hold transactions.
• For a sample 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 and 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 the full
and specific scope locations.
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Key observations communicated
to the Audit and Risk Committee
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.
Key observations communicated
to the Audit and Risk 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
Capitalisation and amortisation
of development costs (Net book
value of capitalised development
costs: £843.9m, 2021: £833.3m,
Amounts capitalised in the
year: £232.0m, 2021: £178.2m,
Amortisation charge £221.4m,
2021 £129.0m)
Refer to the Audit and Risk
Committee Report (page 117);
Accounting policies (page 172);
and Note 12 of the Consolidated
Financial Statements (page 188)
There is a risk that costs are
capitalised which do not meet
the criteria set out within IAS 38
or that the amortisation period
is inappropriate.
There is also a risk of overstatement
of capitalised development costs
through inappropriate manual
journal entries.
• We confirmed the existence and the design effectiveness of
controls around the intangibles process and in particular around
the approval of capitalised development expenditure.
• For a sample of costs capitalised we confirmed that the costs
incurred were; capitalised against the correct project; measured
correctly; eligible for capitalisation, and the timing of the expense
capitalisation was appropriate.
• For a sample of projects we compared the actual spend against
the budgeted spend to ensure the projects continue to meet the
IAS 38 criteria for capitalisation and remain commercially viable.
• For capitalised development costs we confirmed the amortisation
period was aligned to the period over which commercial benefits
are expected to be received and is consistent with the 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.
Risk
Our response to the risk
Impairment of capitalised
development costs (Net book
value of development costs:
£843.9m, 2021: £833.3m,
Impairment charge £nil, 2021 £nil)
Refer to the Audit and Risk
Committee Report (page 117);
Accounting policies (pages 174-175);
and Note 13 of the Consolidated
Financial Statements (page 189)
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 62-63.
• 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.
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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 £4.75 million (2021: £3.5 million), which is 2.5% (2021 2.5%) of Adjusted EBITDA.
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.
We determined materiality for the Parent Company to be £30.8 million (2021: £21.8 million), which is 1.5% (2021: 1.5%) of Equity.
When auditing balances included within to the Group financial statements we reduced this to the Group materiality.
Starting basis
• Loss before tax – £(495.0)m
Adjustments
• Adjusting items – £44.0m
• Adjusted net
finance expense – £333.1m
• Depreciation and
Amortisation – £308.1m
Materiality
• EBITDA – £190.2m
• Materiality of £4.75m
(2.5% of materiality basis)
During the course of our audit, we reassessed initial materiality and updated this for actual results.
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level
the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgement was
that performance materiality was 50% (2021: 50%) of our planning materiality, namely £2.4m (2021: £1.7m). 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 £0.47m to £2.4m (2021: £0.34m to £1.7m).
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 £0.24m
(2021: £0.17m), 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.
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Other information
The other information comprises the information included in the annual report set out on pages 1 to 232, 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.
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.
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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 pages 169-170;
• 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 85;
• 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 148 and 169-170;
• Directors’ statement on fair, balanced and understandable set out on pages 118 and 152;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page119;
• The section of the annual report that describes the review of effectiveness of risk management and internal control systems
set out on page 120; and;
• The section describing the work of the Audit and Risk Committee set out on pages 114-121.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement set out on page 152, 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.
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Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to
fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example,
forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance
of the company and management.
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and determined that the
most significant are frameworks which are directly relevant to specific assertions in the financial statements are those that relate
to the reporting framework (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; reading 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 team 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.
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 four years, covering the years
ending 2019 to 2022.
• The audit opinion is consistent with the additional report to the Audit and Risk Committee.
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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
28 February 2023
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022 Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Financial Statements
Consolidated Statement of Comprehensive Income
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2022
for the year ended 31 December 2022
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 (charge)/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 for the year, net of income tax
Total comprehensive loss for the year
Total comprehensive (loss)/income for the year
attributable to:
Owners of the Group
Non-controlling interests
Earnings per ordinary share
Basic loss per share
Diluted loss per share
All operations of the Group are continuing.
Notes
Adjusted
£m
3
1,381.5
(930.8)
450.7
(113.0)
(455.6)
(117.9)
3.0
(336.1)
(451.0)
(32.7)
(483.7)
4
7
8
9
32
25
9
9
22
22
9
11
11
Adjusting
items*
£m
–
–
–
–
(23.9)
(23.9)
12.5
(32.6)
(44.0)
–
2022
Total
£m
Adjusted
£m
1,381.5
1,095.3
(930.8)
(751.6)
450.7
(113.0)
(479.5)
(141.8)
15.5
(368.7)
(495.0)
(32.7)
343.7
(84.8)
(333.2)
(74.3)
2.3
(173.7)
(245.7)
16.2
(44.0)
(527.7)
(229.5)
Adjusting
items*
£m
–
–
–
–
(2.2)
(2.2)
34.1
–
31.9
8.3
40.2
(528.6)
0.9
(527.7)
6.8
(1.7)
–
3.8
(6.1)
2.9
0.8
6.5
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
(521.2)
(181.6)
(522.1)
0.9
(521.2)
(124.5p)
(124.5p)
(183.9)
2.3
(181.6)
Restated**
(58.6p)
(58.6p)
* Adjusting items are defined in note 2 with further detail shown in note 5
** Earnings per ordinary share has been adjusted to reflect the bonus element of the rights issue undertaken in September 2022. See notes 11 and 26
The notes on pages 169 to 224 form an integral part of the Financial Statements.
153
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022Strategic Report4Corporate Governance86Financial Statements164Further Information 230
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity
Group
Share
capital
£m
Share
premium
£m
Merger
reserve
£m
Capital
redemption
reserve
£m
Capital
reserve
£m
Translation
reserve
£m
Hedge
reserves
£m
Retained
earnings
£m
Non-
controlling
interest
£m
At 1 January 2022
11.6
1,123.4
143.9
9.3
6.6
2.7
6.7
(662.4)
18.6
Total
equity
£m
660.4
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
Issuance of new shares
(note 26)
Credit for the year under
equity-settled share-based
payments (note 28)
Tax on items credited
to equity
Total transactions
with owners
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
58.3
574.0
–
–
–
–
58.3
574.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(528.6)
0.9
(527.7)
3.8
–
(6.1)
2.9
–
–
–
–
6.8
0.8
(1.7)
(2.4)
5.1
–
–
–
–
–
–
3.8
(6.1)
2.9
6.8
(0.9)
6.5
(2.4)
(523.5)
0.9
(521.2)
–
–
–
–
–
1.0
–
1.0
–
–
–
–
632.3
1.0
–
633.3
–
–
–
–
3.8
3.8
–
–
–
–
At 31 December 2022
69.9
1,697.4
143.9
9.3
6.6
6.5
4.3
(1,184.9)
19.5
772.5
154
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
165
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Financial Statements continued
Consolidated Statement of Changes in Equity continued
Consolidated Statement of Changes in Equity continued
Share
capital
£m
Share
premium
£m
11.5
1,108.2
Merger
reserve
£m
144.0
Capital
redemption
reserve
£m
Capital
reserve
£m
Translation
reserve
£m
Hedge
reserves
£m
Retained
earnings
£m
Non-
controlling
interest
£m
9.3
6.6
0.4
10.9
(503.1)
16.3
Total
equity
£m
804.1
Group
At 1 January 2021
Total comprehensive loss
for the year
(Loss)/profit for the year
–
–
–
–
–
–
–
(191.6)
2.3
(189.3)
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
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.1
15.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.1
(0.1)
0.1
15.2
(0.1)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2.3
2.3
–
–
–
–
–
–
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)
–
–
–
–
–
–
14.8
–
30.0
3.1
4.7
0.1
–
22.7
–
–
–
–
3.1
4.7
0.1
–
37.9
660.4
At 31 December 2021
11.6
1,123.4
143.9
9.3
6.6
2.7
6.7
(662.4)
18.6
155
166
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022Strategic Report4Corporate Governance86Financial Statements164Further Information 230
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position
at 31 December 2022
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
2022
£m
31 December
2021
£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
1,394.6
369.9
74.4
6.3
–
133.7
1,978.9
286.2
245.7
1.4
8.8
583.3
1,125.4
3,104.3
107.1
876.3
6.3
26.2
7.4
18.6
1,041.9
1,104.0
9.1
92.4
22.5
61.2
0.7
1,289.9
2,331.8
772.5
69.9
1,697.4
143.9
9.3
6.6
6.5
4.3
(1,184.9)
753.0
19.5
772.5
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
The Financial Statements were approved by the Board of Directors on 28 February 2023 and were signed on its behalf by
Amedeo Felisa
Chief Executive Officer
Company Number: 11488166
Doug Lafferty
Chief Financial Officer
156
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Financial Statements continued
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
for the year ended 31 December 2022
for the year ended 31 December 2022
Operating activities
Loss for the year
Adjustments to reconcile loss for the year to net cash inflow from operating activities
Tax charge/(credit) on operations
Net finance costs
Depreciation and impairment of property, plant and equipment
Depreciation and impairment of right-of-use lease assets
Amortisation and impairment of intangible assets
Difference between pension contributions paid and amounts recognised in Income Statement
(Increase)/decrease in inventories
Decrease/(increase) in trade and other receivables
Increase in trade and other payables
(Decrease)/increase in advances and customer deposits
Movement in provisions
Other non-cash movements
Other non-cash movements – (Increase)/decrease in other derivative contracts
Other non-cash movements – Movements in RDEC credit
Cash generated from operations
Decrease in cash held not available for short term use
Income taxes paid
Net cash inflow 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
Cash outflow on development expenditure
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 during refinancing transactions
Principal element of lease payments
Repayment of existing borrowings
Premium paid upon redemption of borrowings
Proceeds from inventory repurchase arrangement
Repayment of inventory repurchase arrangement
Proceeds from new borrowings
Transaction fees paid on issuance of shares
Transaction fees paid on financing activities
Net cash inflow/(outflow) from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rates on cash and cash equivalents
Cash and cash equivalents at the end of the year
Notes
2022
£m
2021
£m
(527.7)
(189.3)
9
4
4
4
20
19
9
19
9
7
17
17
14
12
27
7
27
27
27
20
20
27
27
23
32.7
353.2
77.8
11.0
219.3
(12.1)
(78.4)
0.1
81.5
(17.9)
0.7
(2.0)
(2.3)
(3.5)
132.4
1.5
(6.8)
127.1
2.2
–
–
(58.6)
(228.3)
(284.7)
(141.2)
653.9
–
4.1
(10.0)
(172.7)
(14.3)
75.7
(60.0)
–
(18.6)
(1.9)
315.0
157.4
418.9
7.0
583.3
(24.5)
137.3
65.3
9.3
137.6
(11.4)
7.7
(75.4)
52.8
70.7
(0.2)
2.1
0.7
(2.9)
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
157
168
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022Strategic Report4Corporate Governance86Financial Statements164Further Information 230
Notes to the Financial Statements
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 in accordance with UK adopted
international accounting standards.
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 have considered the impact of climate change,
particularly in the context of the disclosures included in the
Strategic Report this year and the sustainability goals including
the stated net-zero targets. Climate change is not expected
to have a significant impact on the Group’s going concern
assessment to June 2024 nor the viability of the Group over
the next five years following consideration of the below points:
The Group has modelled various scenarios to take account
of the risks and opportunities identified with the impact
of climate change to assess the financial impact on its
business plan and viability.
The Group has a Strategic Cooperation 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.
The Group is planning to leverage strategic long term
partnerships with vendors to develop EV powertrain
technology with significant capital expenditure planned
to support the transition to a fully electrified portfolio of
Sport/GT cars and SUVs by 2030.
The Group continues to invest in onsite renewable energy
generation solutions for our facilities and the increased 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.
The Group has a clear plan in place to deliver
a transformed product range to meet climate change
regulations impacting the automotive sector, launching
a Plug-In Hybrid Electric Vehicle (“PHEV”) by 2024 and
targeting the launch of our first Battery Electric Vehicle
(“BEV”) in 2025.
•
•
•
•
•
158
Consistent with the above, management have further
considered the impact of climate change on a number of key
estimates within the Financial Statements and has not found
climate change to have a material impact on the conclusions
reached. Climate change considerations have been factored
into the Directors impairment assessments of the carrying
value of non-current assets (such as capitalised development
cost intangible assets) through usage of a pre-tax discount rate
which reflects the individual nature and specific risks relating
to the business and the market in which the Group operates.
In addition, the forecast cash flows used in both the impairment
assessments of the carrying value of non-current assets and
the assessment of the recoverability of deferred tax assets
reflect the current energy cost headwinds and future costs
to achieve net-zero manufacturing facilities by 2030 as well
as the forecast volumes for both existing and future car lines
given current order books and the assessment of changing
customer preferences.
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 are shown in note 22.
The Group meets its day-to-day working capital requirements
and medium term funding requirements through a mixture of
$1,143.7m First Lien Notes at 10.5% which mature in November
2025, $229.1m of Second Lien split coupon notes at 15% per
annum (8.89 % cash and 6.11% Payment in Kind) 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). Under the RCF the Group is required
to comply with a leverage covenant tested quarterly.
The amounts outstanding on all the borrowings are shown
in note 22.
The Directors have developed trading and cash flow forecasts
for the period from the date of approval of these Financial
Statements through 30 June 2024 (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 ultra-luxury performance-oriented
strategy, balancing supply and demand and the actions taken
to improve cost efficiency and gross margin. 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
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
169
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
1 Basis of accounting continued
Going concern continued
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 that 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 and a 8% reduction in sports volumes
from forecast levels, operating costs higher than the base plan,
incremental working capital requirements such as reduced
deposit inflows or increased deposit outflows and the impact
of the strengthening of the sterling-dollar exchange rate.
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, the Directors 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 35% 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 Group and all entities controlled by the
Group. 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 Group 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.
159
170
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Notes to the Financial Statements continued
2 Accounting policies continued
Revenue recognition
Revenue is recognised when the Group satisfies its
performance obligation to supply a product or service to
the customer. Revenue is measured at the fair value of the
consideration receivable, deducting dealer incentives, VAT
and other sales taxes or duty. The following criteria must also
be met before revenue is recognised.
Sale of vehicles
Revenue from the sale of vehicles is recognised when control of
the vehicle is passed to the dealer or individual, thus evidencing
the satisfaction of the associated performance obligation under
that contract. Control is passed when the buyer can direct the
use of and obtain substantially all of the benefits of the vehicle,
which is typically at the point of despatch. When despatch is
deferred at the formal request of the buyer and a written
request to hold the vehicle until a specified delivery date has
been received, revenue is recognised when the vehicle is ready
for despatch and the Group can no longer use or direct the
vehicle to an alternative buyer.
The Group estimates the consideration to which it will be
entitled in exchange for satisfaction of the performance
obligation as part of the sale of a vehicle. Revenue is recognised
at the wholesale selling price net of dealer incentives (variable
marketing expense or “VME”). VME is estimated and accrued
for at the time of the wholesale sale to the dealer, other than
those elements of VME connected with retail sales by the
dealer where there is also a contractual requirement for the
dealer to make additional wholesale purchases at that time to
receive the incentive, which is accrued at the time of the retail
sale by the dealer to the end customer.
Warranties are issued on new vehicles sold with no separate
purchase option available to the customer and, on this basis,
are accounted for in accordance with IAS 37. Service packages
sold as part of the supply of a vehicle are accounted for as a
separate performance obligation with the revenue deferred,
based on the term of the package, at the original point of sale.
The deferred revenue is released to the Income Statement over
the shorter of the period that the service package covers or the
number of vehicle services that the end user is entitled to.
Where a sale of a vehicle(s) includes multiple performance
obligations, the Group determines the allocation of the total
transaction price by reference to their relative standalone
selling prices.
Sales of parts
Revenue from the sale of parts is recognised upon transfer of
control to the customer, generally when the parts are released
to the carrier responsible for transporting them. Where the
dealer is Aston Martin Works Limited, an indirect subsidiary
of the Company, revenue is recognised upon despatch to
a customer outside of the Group.
Servicing and restoration of vehicles
Revenue is recognised upon completion of the service/
restoration typically when the service or restoration is
completed in accordance with the customers’ requirements.
Brands and motorsport
Revenue from brands and motorsport is recognised when the
performance obligations, principally use of the Aston Martin
brand name or supply of a motorsport vehicle, are satisfied.
Revenue is recognised either at a point in time or over a period
of time in line with IFRS 15 according to the terms of the contract.
Customer advance payments
The Group receives advance cash payments from customers
to secure their allocation of a vehicle produced in limited
quantities, typically with a lead time of greater than 12 months.
The value of the advance, both contractually refundable or
non-refundable, is held as a contract liability in the Statement
of Financial Position. Upon satisfaction of the performance
obligation, the liability is released to revenue in the Income
Statement. If the deposit is returned to the customer prior
to satisfaction of the performance obligation, the contract
liability is derecognised.
Where a significant financing component exists, the contract
liability is increased over the same period of time as the
contract liability is held to account for the time value of money.
A corresponding charge is recognised in the Consolidated
Income Statement within finance expenses. Upon satisfaction
of the linked performance obligation, the liability is released
to revenue.
The Group applies a practical expedient for short term
advances received from customers whereby the advanced
payment is not adjusted for the effects of a significant
financing component.
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.
160
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
171
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
2 Accounting policies continued
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.
Current liabilities include liabilities held primarily for trading
purposes in line with the Group’s identifiable normal operating
cycle. These liabilities are expected to be settled as part of the
Group’s normal course of business. All other liabilities are
classified as non-current liabilities.
Goodwill
For acquisitions on or after 1 January 2010, the Group measures
goodwill at the acquisition date as:
•
•
•
•
the fair value of the consideration transferred; plus
the recognised amount of any non-controlling interests
in the acquiree; plus
the fair value of the existing equity interest in the
acquiree; less
the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
Costs related to the acquisition, other than those associated
with the issue of debt or equity securities, are expensed
as incurred.
For the purpose of impairment testing, goodwill is allocated to
the related cash-generating unit. The only cash-generating unit
of the Group is that of Aston Martin Lagonda Group as there
are no smaller groups of assets that can be identified with
certainty which generate specific cash flows independent of the
inflows generated by other assets or groups of assets. Where
the recoverable amount of the cash-generating unit is less than
the carrying amount, an impairment loss is recognised in the
Income Statement.
Intangible assets
Intangible assets acquired separately from a business are
carried initially at cost. An intangible asset acquired as part of
a business combination is recognised outside of goodwill if the
asset is separable or arises from contractual or other legal
rights and its fair value can be measured reliably.
Fair value adjustments are considered to be provisional at the
first year-end date after the acquisition to allow the maximum
time to elapse for management to make a reliable estimate.
Business combinations
Business combinations are accounted for using the acquisition
method as at the acquisition date, which is the date on which
control is transferred to the Group.
Purchased intellectual property
Purchased intellectual property that is not integral to an item
of property, plant and equipment is recognised separately as an
intangible asset stated at cost less accumulated depreciation.
Brands
An acquired brand is only recognised in the Statement of
Financial Position as an intangible asset where it is supported
by a registered trademark, is established in the marketplace,
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 goodwill and
the underlying fair values of the tangible assets, brands and
other intangible assets acquired, using an income approach
following the multi-period excess earnings methodology.
Acquired brands have an indefinite life when there is no
foreseeable limit to the period over which the asset is
expected to generate cash inflows.
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:
•
•
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.
•
The correlation between development costs and future
revenues has been established.
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Intangible assets continued
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 measured at the
acquisition date fair value using the cost approach.
Dealer network
Save for certain direct sales of some special edition and buyer-
commissioned vehicles, the Group sells its vehicles exclusively
through a network of dealers. All dealers in the dealer network
are independent dealers with the exception of Aston Martin
Works Limited. To the extent that the Group benefits from the
network, the dealer network has been valued based on costs
incurred by the Group.
Amortisation
Following initial recognition, the historical cost model is
applied, with intangible assets being carried at cost less
accumulated amortisation and accumulated impairment losses.
Amortisation of these capitalised costs begins when the asset
is available for use. Intangible assets with a finite life have no
residual value and are amortised on a straight-line basis over
their expected useful lives as follows:
Purchased intellectual property
Development costs
Technology
Software and other
Dealer network
Years
5
1 to 10
10
3 to 10
20
The useful lives and residual values of capitalised development
costs are determined at the time of capitalisation and are
reviewed annually for appropriateness and recoverability.
Amortisation of Special Vehicle development costs are spread
evenly across the limited quantity of vehicles produced and
charged to the Income Statement at the point of sale for
each vehicle.
Property, plant and equipment
Property, plant and equipment is stated at cost less
accumulated depreciation and accumulated impairment losses.
Cost comprises the aggregate amount paid, and the fair value
of any other consideration given, to acquire the asset including
directly attributable costs to make the asset capable of
operation. Borrowing costs directly attributable to assets
under construction are capitalised.
Depreciation is provided on all property, plant and equipment,
other than land, on a straight-line basis to its residual value over
its expected useful life as follows:
Freehold buildings
Plant and machinery
Fixtures and fittings
Tooling
Motor vehicles
Years
30
5 to 30
3 to 12
1 to 15
3 to 5
Tooling is depreciated over the life of the project. Assets in the
course of construction are included in their respective category
but are not depreciated until available for use. The carrying
values of property, plant and equipment are reviewed for
impairment if events or changes in circumstances indicate the
carrying value may not be recoverable and are written down
immediately to their recoverable amount. Useful lives and
residual values are reviewed annually and where adjustments
are required these are made prospectively.
An item of property, plant and equipment is derecognised
upon disposal. Any gain or loss arising on the derecognition
of the asset is included in the Income Statement in the
period of derecognition.
Government grants
Government grants are recognised in the Income Statement,
either on a systematic basis when the Group recognises the
related costs that the grants are intended to compensate for,
or immediately if the costs have already been incurred.
Government grants related to assets are deducted from the
cost of the asset and amortised over the useful life of the asset.
Government grants are recognised when there is reasonable
assurance that the Group will comply with the relevant
conditions and the grant will be received.
Research and development tax relief in the form of the
Research and Development Expenditure Credit (“RDEC”) is
recognised in the income statement over the periods in which
the qualifying expenditure giving rise to the RDEC claim is
recognised, as the Group’s assessment of the conditions of
receipt of the RDEC concludes that it meets the definition of
a Government grant. Claims are submitted annually based
on the qualifying expenditure for a given accounting period.
If the subsidiary submitting the claim is loss-making, the RDEC
claim is restricted by an amount equal to the current rate of
UK corporation tax. The restricted amount can be applied in
discharging any liability of the subsidiary to pay corporation tax
in any subsequent tax period and has been accounted for as an
unused tax credit in accordance with IAS 12 and is included
within deferred tax assets.
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Notes to the Financial Statements continued
2 Accounting policies continued
Government grants continued
Amounts recognised in operating cash flows are presented net
of proceeds of applicable Government grants.
Carbon credits
The import of vehicles into certain jurisdictions can trigger
a requirement to eliminate negative carbon credits, which
gives rise to a present obligation as a result of a past event.
In accordance with IAS 37, the Group recognises a provision
for this obligation, measured at the cost of purchasing positive
credits to offset the negative credits. As at 31 December 2022
the provision recognised for these carbon credits was
not material
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.
Lease payments included in the measurement of the lease
liability comprise either fixed lease payments or lease
payments subject to periodic fixed increases. The lease liability
is measured at amortised cost using the effective interest rate
method. Lease payments are allocated between principal and
interest cost with the interest costs charged to the Income
Statement over the lease period.
The liability is remeasured when there is an increase/decrease
in future lease payments arising from a change in an index or
rate specified.
Short term leases and leases of low-value assets
The Group does not recognise right of-use-assets and lease
liabilities for short term leases that have a lease term of fewer
than 12 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.
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Impairment of assets continued
For goodwill, brands and other intangible assets that have an
indefinite life, the recoverable amount is estimated annually
or more frequently when there is an indication that the asset
is impaired.
For intangible assets, property, plant and equipment, and right-
of-use lease assets that have a finite life, the recoverable amount
is estimated when there is an indication that the asset is impaired.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to
the revised estimate of the recoverable amount, but 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 fully recovered. Inventories held
under financing arrangements are recognised when control is
transferred to the Group.
Cash and cash equivalents
Cash and cash equivalent in the Statement of Financial
Position comprise:
•
•
cash, being cash at banks and in hand as well as demand
deposits; and
cash equivalents, being short term deposits with an
original maturity of three months or less, subject to
insignificant changes in value. which are readily
convertible to known amounts and held to meet short
term commitments.
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.
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Hedge accounting
The Group uses derivative financial instruments in the form of
forward currency contracts, and certain 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 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.
The theoretical hedge ratio of the hedging relationship
is the same as practically occurs.
Derivative financial instruments
The effective portion of the gain or loss on the hedging
instrument is recognised in Other Comprehensive Income in
the cash flow hedge reserve, while any ineffective portion is
recognised immediately in the Income Statement. The Group
designates only the spot element of forward contracts as a
hedging instrument. The forward element is recognised in
Other Comprehensive Income and accumulated in a separate
component of equity under cost of hedging reserve.
Financial liability as a hedge
Foreign currency differences arising on the retranslation
of a financial liability designated as a cash flow hedge are
recognised directly in Other Comprehensive Income to the
extent that the hedge is effective. To the extent that the
hedge is ineffective, such differences are recognised in the
Income Statement.
Subsequent accounting
The amounts accumulated in both the cash flow hedge reserve
and the cost of hedging reserve are accounted for depending
on the nature of the underlying hedged transaction. If the
hedged transaction subsequently results in the recognition
of a non-financial item, the amount accumulated in the hedge
reserve is removed and included in the initial cost of the hedge
item. For any other cash flow hedges, the amount accumulated
in the hedge reserve is reclassified to the Income Statement as
a reclassification adjustment in the same period or periods
during which the hedged cash flow affects profit or loss.
If hedge accounting is discontinued, the amount that has been
accumulated in the hedge reserve must remain in equity
if the hedged future cash flows are still expected to occur.
Otherwise, the amount will be immediately reclassified to
the Income Statement as a reclassification adjustment. After
discontinuation, once the hedged cash flow occurs, any amount
remaining in the hedge reserve is accounted for depending
on the nature of the underlying transaction.
Borrowings
Borrowings are recognised initially at fair value less attributable
transaction costs. Subsequent to initial recognition, borrowings
are stated at amortised cost with any difference between the
amount initially recorded and redemption value being
recognised in the Income Statement as a finance expense over
the period of the borrowings on an effective interest basis.
Pensions
The Group operates a Defined Contribution pension plan under
which the Group pays fixed contributions into a separate entity
and has no legal or constructive obligation to pay further
amounts. Obligations for contributions to Defined Contribution
pension plans are recognised as an expense in the Income
Statement in the periods during which services are rendered
by employees.
The Group operates a Defined Benefit pension plan, which is
contracted out of the state scheme. The Group’s net obligation
in respect of Defined Benefit plans is calculated for the plan by
estimating the amount of the future benefit that employees
have earned in the current and prior periods, discounting that
amount and deducting the fair value of any plan assets.
The calculation of Defined Benefit obligations is performed
annually by a qualified actuary using the projected unit credit
method. When the calculation results in a potential asset for the
Group, the recognised asset is limited to the present value of
economic benefits available in the form of any future refunds
from the plan or reductions in future contributions to the plan.
When the calculation results in a deficit for the Group, the
recognised liability is adjusted for the discounted value
of future deficit reduction contributions in excess of the
calculated deficit.
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Pensions continued
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.
In the instance of a scheme modification the number of shares
comprised in an award is adjusted to reflect equity changes in
the Group and will therefore not impact underlying charges.
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.
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.
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XX
XX
Notes to the Financial Statements continued
2 Accounting policies continued
Income taxes continued
•
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.
• 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.
Critical accounting assumptions and key sources
of estimation uncertainty estimates
The preparation of Financial Statements requires management
to make estimates and assumptions that affect the amounts
reported for assets and liabilities as at the reporting date and
the amounts reported for revenues and expenses during the
period. The nature of estimation means that actual outcomes
could differ from those estimates.
In the process of applying the Group’s accounting policies,
which are described in this note, management have 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; and
the recognition of deferred tax assets.
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.
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
are sensitive to these. Note 25 provides information on these
assumptions and the inherent sensitivities.
Measurement of Defined Benefit pension obligations requires
estimation of future changes in salaries and inflation, mortality
rates, the expected return on assets and suitable discount rates
(note 25).
Recognition of deferred tax assets
Deferred tax assets are first recognised against deferred tax
liabilities relating to the same taxation authority and the
same taxable company which are expected to reverse in the
same period.
Net deferred tax assets remaining are then only recognised
to the extent that it is probable that sufficient future taxable
profits will be available against which the deductible temporary
difference or unused tax losses or credits can be recovered or
utilised. The Group reviews the same underlying assumptions
and future forecasts used for impairment testing, going
concern and viability assessments to evaluate the level of
estimated future taxable profits and the associated level of
net deferred tax assets which are supportable for recognition
at the reporting date.
In considering recoverability of the deferred tax assets
the Group relies upon future forecasts, which inherently
increases the level of significant estimation uncertainty in
the later periods. Note 9 provides information on the
inherent sensitivities.
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New accounting standards
The following standards, amendments and interpretations
were applicable for the period beginning 1 January 2022 and
were adopted by the Group for the year to 31 December 2022.
They have not had a significant impact on the Group’s result for
the year, equity or disclosures:
• Onerous Contracts – Costs of Fulfilling a Contract –
•
Amendments to IAS 37
Property, Plant and Equipment: Proceeds before Intended
Use – Amendments to IAS 16
The following are new accounting standards and amendments
to existing standards that have been published and are
applicable for the Group’s accounting periods beginning
1 January 2023 onwards, which the Group has not
adopted early:
• Definition of Accounting Estimates – Amendments to IAS 8
• Classification of Liabilities as Current or Non-current –
Amendments to IAS 1
• Deferred Tax related to Assets and Liabilities arising from
a Single Transaction – Amendments to IAS 12
The adoption of these standards and amendments is not
expected to have a material impact on the Group’s
Consolidated Financial Statements.
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Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
3 Segmental reporting
Operating segments are defined as components of the Group about which separate financial information is available and is
evaluated regularly by the chief operating decision-maker in assessing performance. The Group has only one operating segment,
the automotive segment, and therefore no separate segmental report is disclosed. The automotive segment includes all activities
relating to design, development, manufacture and marketing of vehicles including consulting services; as well as the sale of parts,
servicing and automotive brand activities from which the Group derives its revenues.
Revenue
Analysis by category
Sale of vehicles
Sale of parts
Servicing of vehicles
Brands and motorsport
Revenue
Analysis by geographical location
United Kingdom
The Americas
Rest of Europe, Middle East and Africa
Asia Pacific
Non-current assets other than financial instruments and deferred tax assets by geographical location
Right-of-use
lease asset
£m
Property, plant,
equipment
£m
Intangible
assets
£m
As at 31 December 2022
Goodwill
£m
United Kingdom
The Americas
Rest of Europe
Asia Pacific
As at 31 December 2021
United Kingdom
The Americas
Rest of Europe
Asia Pacific
60.7
8.3
0.1
5.3
74.4
301.6
4.0
64.3
–
369.9
85.4
1,155.8
–
–
–
–
153.4
–
85.4
1,309.2
Right-of-use
lease asset
£m
Property, plant,
equipment
£m
61.1
7.4
–
7.5
76.0
267.8
0.7
86.8
0.2
355.5
Goodwill
£m
85.4
–
–
–
Intangible
assets
£m
1,145.1
–
153.6
–
85.4
1,298.7
2022
£m
2021
£m
1,291.5
1,005.4
70.8
9.3
9.9
65.5
10.6
13.8
1,381.5
1,095.3
2022
£m
366.0
401.8
260.2
353.5
2021
£m
231.3
302.7
233.8
327.5
1,381.5
1,095.3
Other
receivables
£m
–
4.3
2.0
–
6.3
Other
receivables
£m
–
–
2.1
–
2.1
Total
£m
1,603.5
16.6
219.8
5.3
1,845.2
Total
£m
1,559.4
8.1
242.5
7.7
1,817.7
169
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Notes to the Financial Statements continued
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)
Research and development expenditure tax credit
Net foreign currency differences
Cost of inventories recognised as an expense
Write-down of inventories to net realisable value
(Increase)/decrease in fair value of other derivative contracts
Lease payments (gross of sub-lease receipts)
Plant, machinery and IT equipment*
Sub-lease receipts
Land and buildings
Auditor’s remuneration:
Audit of these Financial Statements
Audit of Financial Statements of subsidiaries pursuant to legislation
Audit-related assurance
Services related to corporate finance transactions
Research and development expenditure recognised as an expense
* 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
2022
£m
80.7
(2.9)
11.0
227.4
(8.1)
308.1
0.6
(18.4)
8.7
798.0
8.9
(2.3)
0.7
(0.6)
0.3
0.4
0.1
0.2
14.1
2021
£m
65.0
0.3
9.3
135.0
2.6
212.2
3.1
(16.6)
11.2
641.4
0.2
0.7
0.3
(0.6)
0.3
0.3
0.1
0.1
13.0
2022
£m
246.1
(232.0)
14.1
2021
£m
191.2
(178.2)
13.0
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Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
5 Adjusting items
Adjusting operating expenses:
ERP implementation costs1
Defined Benefit pension scheme closure costs2
Director settlement and incentive arrangements3
Restructuring costs7
Lease early exit costs8
Adjusting finance income:
Foreign exchange gain on financial instrument utilised during refinance transactions4
Gain on financial instruments recognised at fair value through Income Statement5
Adjusting finance expenses:
Premium paid on the early redemption of Senior Secured Notes4
Write-off of capitalised borrowing fees upon early settlement of Senior Secured Notes4
Professional fees incurred on refinancing expensed directly to the Income Statement4
Total adjusting items before tax
Tax charge on adjusting items6
Tax credit due to remeasurement of deferred tax on previously classified adjusting items6
Adjusting items after tax
2022
£m
(6.9)
(13.5)
(3.5)
–
–
(23.9)
4.1
8.4
(14.3)
(16.4)
(1.9)
(20.1)
(44.0)
–
–
(44.0)
2021
£m
(4.0)
–
–
2.4
(0.6)
(2.2)
–
34.1
–
–
–
34.1
31.9
(8.1)
16.4
40.2
Summary of 2022 adjusting items
1.
In the year ended 31 December 2022 the Group incurred further implementation costs for a cloud-based Enterprise Resource Planning (ERP) system for which the
Group will not own any intellectual property. £6.9m of costs have been incurred in the period under the service contract and expensed to the Income Statement during
the business readiness phase of the project. The project continues to undergo a phased rollout during 2023 following the previous migration of finance in 2022. 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.
2. On 31 January 2022, the Group closed its Defined Benefit Pension Scheme to future accrual incurring a past service cost of £2.8m. Under the terms of the closure
agreement, employees were granted cash payments both in the current year and the following two financial years totalling £8.7m. These costs have been fully
accrued. In addition, the affected the employees were each granted 185 shares incurring a share-based payment charge of £1.0m during the year. The terms of the
agreement provide the employees with a minimum guaranteed value for these shares subject to their ongoing employment with the Group. The Group will pay the
employees a further cash sum if the share price at 1 February 2024 does not meet this value. The charge associated with this portion is £1.0m in the year ended
31 December 2022 and is being accounted for in accordance with IFRS2 as a cash settled share-based payment scheme. Further costs are expected in future periods
under this guarantee until the liability crystallises in February 2024. The Group will continue to present these costs in adjusting items due to their volatile nature and
connection with the closure of the pension scheme which is considered a non-recurring event.
3. On 14 January 2022, it was announced that Doug Lafferty would be joining the Group as Chief Financial Officer replacing Ken Gregor who stepped down from the
Board on 1 May 2022. On 4 May, it was announced that Tobias Moers would be stepping down as Chief Executive Officer and Chief Technical Officer. Amedeo Felisa
was appointed as Chief Executive Officer and Roberto Fedeli was appointed as Chief Technical Officer on the same day. The total cost associated with these changes
was £3.5m, of which £1.8m represents joining incentives, £0.7m represents severance (note 6), and £1.0m comprises social security and other costs. Due to the
quantum of such costs incurred in the period, they have been separately presented. The cash outflows associated with this expense are expected to be incurred within
a period of 12 months from the appointment of each individual.
4. Following the successful equity raise in September 2022, the Group paid down $40.3m of First Lien Senior Secured Notes (“SSNs”) and $143.8m of Second Lien SSNs.
The early settlement of these notes incurred a redemption premium of £14.3m and transaction fees of £1.9m and resulted in the acceleration of capitalised borrowing
costs of £16.4m. The cash impact of the fees and premium are incurred within the year ended 31 December 2022. The acceleration of the borrowing costs is a non-
cash item.
In order to facilitate the repayment of the SSNs the Group placed a forward currency contract to purchase US dollars. Due to favourable movements in the exchange
rates, a gain of £4.1m was realised in the Income Statement at the transaction date
5. The Group issued Second Lien SSNs during the year ended 31 December 2020 which included detachable warrants classified as a derivative option liability initially
6.
valued at £34.6m. The movement in fair value of the liability in the year ended 31 December 2022 resulted in a gain of £8.4m (2021: £34.1m) being recognised in the
Income Statement. There is no cash impact of this adjustment.
In 2022, nil tax has been recognised as an adjusting item (2021: £8.3m credit) which is not in line with the standard rate of income tax for the Group of 19% (2021: 19%).
This is on the basis that the adjusting items generate net deferred tax assets, specifically unused tax losses and interest amounts disallowed under the corporate interest
restriction legislation, which have not been recognised to the extent that sufficient taxable profits are not forecast in the foreseeable future to which the unused tax
losses and interest amounts disallowed under the corporate interest restriction legislation would be utilised. In 2021, a total tax credit of £8.3m was recognised as an
adjusting item. The effective tax rate associated with the tax credit on adjusting items in the prior period was not in line with the standard rate of income tax for the
Group at 19%. This was 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%.
Summary of 2021 adjusting items
7. 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 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 had
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 consistently 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.
8.
171
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Notes to the Financial Statements continued
6 Staff costs and Directors’ emoluments
(a) Staff costs (including Directors)
Wages and salaries
Social security costs
Expenses related to post-employment Defined Benefit plan1
Contributions to Defined Contribution plans
2022
£m
139.4
16.4
16.0
17.6
189.4
2021
£m
120.5
12.0
8.8
10.7
152.0
1. The year ended 2022 includes Defined Benefit plan closure costs of £12.5m as separately described in note 5 alongside the total in-year service costs of £3.5m
separately disclosed in note 25
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
Share related awards
Compensation for loss of office
2022
Number
1,123
276
1,138
2,537
2022
£m
3.1
0.1
0.8
0.7
4.7
2021
Number
1,030
276
1,045
2,351
2021
£m
1.5
–
–
–
1.5
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 124 to 145.
(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
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
2022
£m
5.6
0.4
0.7
0.8
7.5
2022
£m
3.0
3.0
4.1
8.4
12.5
15.5
2021
£m
3.9
0.2
–
–
4.1
2021
£m
2.3
2.3
–
34.1
34.1
36.4
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Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
8 Finance expense
Bank loans, overdrafts and senior 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)
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
Professional fees incurred on refinancing expensed directly to the Income Statement
Total adjusting finance expense
Total finance expense
9 Taxation
UK corporation tax on profits
Overseas tax
Total current income tax charge
Deferred tax credit
Origination and reversal of temporary differences
Prior period movement
Effect of change in deferred tax rate
Total deferred tax charge/(credit)
Total income tax charge/(credit) in the Income Statement
Tax relating to items credited to other comprehensive income
Deferred tax
Actuarial movement on Defined Benefit plan
Fair value adjustment on cash flow hedges
Effect of change in deferred tax rate
2022
£m
166.0
156.2
4.5
1.4
8.0
2021
£m
151.3
12.4
3.9
1.3
4.8
336.1
173.7
14.3
16.4
1.9
32.6
–
–
–
–
368.7
173.7
2022
£m
0.2
7.4
7.6
29.4
(4.3)
–
25.1
32.7
1.7
(0.8)
–
0.9
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)
Tax relating to items charged in equity – deferred tax
Effect of change in deferred tax rate
–
(4.8)
173
184
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Notes to the Financial Statements continued
9 Taxation continued
(a) Reconciliation of the total income tax charge/(credit)
The tax charge in the Consolidated Statement of Comprehensive Income for the year is higher (2021: lower) than the standard
rate of corporation tax in the UK of 19% (2021: 19%). The differences are reconciled below:
2022
£m
2021
£m
(495.0)
(213.8)
(94.0)
(40.6)
2.0
84.7
15.6
25.6
0.8
(4.3)
–
1.1
1.2
–
32.7
0.5
15.0
–
17.7
1.4
(2.4)
(17.3)
(4.8)
2.9
3.1
(24.5)
Loss from operations before taxation
Loss from operations before taxation multiplied by standard rate of corporation tax in the UK of 19.0% (2021:
19.0%)
Difference to total income tax charge/(credit) due to effects of:
Expenses not deductible for tax purposes
Movement in unprovided deferred tax on current period losses and restricted tax interest
Movement in unprovided deferred tax on current period accelerated capital allowances
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 charge/(credit)
(b) Tax paid
Total net tax paid during the year was £6.8m (2021: £9.0m).
(c) Factors affecting future tax charges
The UK’s main rate of corporation tax will increase from 19% to 25%, effective from 1 April 2023.
(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 credit1
Losses and other deductions2
Share-based payments
Other3
Deferred tax (assets)/liabilities
Offset of tax liabilities/(assets)
Total deferred tax (assets)/liabilities
Assets
2022
£m
(76.2)
–
(15.5)
(8.4)
(16.1)
(198.6)
(0.2)
–
(315.0)
181.3
(133.7)
Assets
2021
£m
(111.1)
–
(19.9)
(6.3)
(12.6)
(192.6)
(0.7)
–
(343.2)
186.8
(156.4)
Liabilities
2022
£m
–
181.3
Liabilities
2021
£m
–
186.8
–
–
–
–
–
–
–
–
–
–
0.7
182.0
0.8
187.6
(181.3)
(186.8)
0.7
0.8
1. Deferred tax assets categorised as ‘RDEC credit’ relate to the cumulative restricted amount of the payable tax credits which can be applied or surrendered
in discharging any future corporation tax liability of the claimant company, as detailed in the Government Grants section of the Accounting Policies (Note 2).
2. Deferred tax assets categorised as ‘Losses and other deductions’ relate to tax losses and tax interest amounts disallowed under the corporate interest
restriction legislation.
3. Deferred tax liabilities categorised as ‘Other’ relate to withholding tax amounts on unremitted earnings expected to be distributed in the foreseeable future.
174
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Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
9 Taxation continued
(d) Deferred tax continued
Where the right exists in certain jurisdictions, deferred tax assets and liabilities have been offset.
Movement in deferred tax in 2022
Property, plant and equipment
Intangible assets
Employee benefits
Provisions
RDEC credit
Losses and other deductions
Share-based payments
Other1
1 January
2022
£m
(111.1)
186.8
(19.9)
(6.3)
(12.6)
(192.6)
(0.7)
0.8
(155.6)
Net tax
recognised
in Income
Statement
£m
Net tax
recognised
in OCI
£m
Net tax
recognised
in equity
£m
Other
movement
£m
31 December
2022
£m
34.9
(5.5)
2.7
(0.9)
–
(6.4)
0.5
(0.1)
25.2
–
–
1.7
(1.2)
–
0.4
–
–
0.9
–
–
–
–
–
–
–
–
–
–
–
–
–
(3.5)
–
–
–
(76.2)
181.3
(15.5)
(8.4)
(16.1)
(198.6)
(0.2)
0.7
(3.5)
(133.0)
1. The ‘Other’ deferred tax movement categorised above relates to the restricted amount of the payable RDEC claim projected for the financial year ended
31 December 2022.
Movement in deferred tax in 2021
Property, plant and equipment
Intangible assets
Employee benefits
Provisions
RDEC credit
Losses and other deductions
Share-based payments
Other
1 January
2021
£m
(71.1)
135.2
(17.6)
(11.1)
(9.7)
(117.3)
(14.9)
0.6
Net tax
recognised
in Income
Statement
£m
Net tax
recognised
in OCI
£m
Net tax
recognised
in equity
£m
Other
movement
£m
31 December
2021
£m
(40.0)
51.6
3.5
4.7
–
(55.1)
(0.6)
0.2
–
–
(5.8)
0.1
–
(0.6)
–
–
–
–
–
–
–
(4.7)
(0.1)
–
–
–
–
–
(2.9)
(14.9)
14.9
–
(111.1)
186.8
(19.9)
(6.3)
(12.6)
(192.6)
(0.7)
0.8
(155.6)
The Losses and other deductions of £198.6m (£794.3m gross) comprises UK tax losses of £90.1m (£360.5m gross) and disallowed
tax interest amounts of £108.5m (£433.8m gross).
(105.9)
(35.7)
(2.9)
(4.8)
(6.3)
Net deferred tax assets have been recognised to the extent that it is probable that future taxable profits will be available against
which the deductible temporary difference or unused tax losses or credits can be recovered or utilised. In evaluating the level of
probable future taxable profits the Group reviews the same underlying assumptions and future forecasts used for impairment
testing, going concern and viability assessments.
The future forecasts cover an extended period, which inherently increases the level of significant estimation uncertainty in the
later periods and, given the recent history of accumulating tax losses, the Group has also evaluated whether there is convincing
other evidence that sufficient taxable profit will be available in determining the supportable level of net deferred tax assets which
have been recognised at the reporting date. Based upon the current business plan, together with the equity capital raise and
a strengthened Executive team 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 has gross deferred tax assets unrecognised at the reporting date totalling £1,005.3m comprised of £623.7m tax losses,
£223.0m accelerated capital allowances, £14.3m US provisions and £144.3m of disallowed tax interest amounts.
The aggregate amount of temporary differences associated with investments in subsidiaries and branches for which deferred tax
liabilities have not been recognised is £38.4m for the financial year ended 31 December 2022 (2021: 34.0m). An increase/decrease
of 10% in forecast profits in each period would increase/decrease the level of net deferred tax recognised on losses by £6.8m.
175
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Notes to the Financial Statements continued
10 Dividends
No dividends were declared or paid by the Company in the year ended 31 December 2022 (2021: £nil).
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.
On 28 September 2022 the Company issued 559.0m ordinary shares by way of a rights issue. Due to the shares being issued at
substantially below market price, a bonus issue is deemed to have taken place. A total of 211.6m shares issued were considered
bonus shares. The weighted average shares used to calculate earnings per share in both the current and the prior year have been
adjusted accordingly.
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)
2022
2021
Restated*
(528.6)
424.7
(124.5p)
(191.6)
327.1
(58.6p)
1. To aid users understanding of the movement in the basic and diluted earnings per ordinary share presented for the comparative period, the following table reconciles
the numbers presented in the 2021 Annual Report and Accounts to those presented above
Continuing and total operations –
12 months ended 31 December 2021
Basic earnings per ordinary share
Loss available for equity holders (£m)
Basic weighted average number of ordinary
shares (million)
Basic loss per ordinary share (pence)
Diluted earnings per ordinary share
Loss available for equity holders (£m)
Diluted weighted average number of ordinary
shares (million)
Diluted loss per ordinary share (pence)
As presented 2021 Annual Report
Bonus element of rights issue
(note 26)
As presented above
(191.6)
115.5
(165.9p)
(191.6)
115.5
(165.9p)
–
211.6
107.3p
–
211.6
107.3p
(191.6)
327.1
(58.6p)
(191.6)
327.1
(58.6p)
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.
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)
2022
Number
2021
Number
Restated*
424.7
327.1
–
–
–
–
–
–
424.7
327.1
1. The number of ordinary shares issued as part of the long term incentive plans, 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 MBAG technology have been excluded from the weighted average number of diluted ordinary shares as
including them is anti-dilutive to diluted earnings per share
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Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
11 Earnings per ordinary share continued
As part of the Strategic Cooperation Agreement entered into in December 2020 with MBAG, shares were issued for access to
tranche 1 technology. 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 alongside the Second Lien SSNs in December 2020 which
can be exercised from 1 July 2021 through to 7 December 2027. As a consequence of the rights issue during the period (note 26)
the number of ordinary shares issuable via the options was increased by a multiple of 6 to ensure the warrant holders’ interests
were not diluted. As at 31 December 2022 96,129,252 options, each entitled to 0.3 ordinary shares, remain unexercised. 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.
Adjusted earnings per share is disclosed in note 33 to show performance undistorted by adjusting items to assist in providing
useful information on the underlying performance of the Group and enhance the comparability of information between
reporting periods.
Goodwill
£m
Brands
£m
Technology
£m
Capitalised
development
cost
£m
Dealer
network
£m
Software
and other
£m
12 Intangible assets
Cost
Balance at 1 January 2021
Additions
Balance at 31 December 2021
Balance at 1 January 2022
Additions
85.4
–
85.4
85.4
297.6
–
297.6
163.5
–
163.5
297.6
163.5
Balance at 31 December 2022
85.4
297.6
163.5
Amortisation
Balance at 1 January 2021
Charge for the year
Balance at 31 December 2021
Balance at 1 January 2022
Charge for the year
Balance at 31 December 2022
Net book value
At 1 January 2021
At 31 December 2021
At 1 January 2022
At 31 December 2022
–
–
–
–
–
85.4
85.4
85.4
85.4
–
–
–
–
–
297.6
297.6
297.6
297.6
8.1
1.8
9.9
9.9
1.9
11.8
155.4
153.6
153.6
151.7
1,435.7
178.2
1,613.9
1,613.9
232.0
1,845.9
651.6
129.0
780.6
780.6
221.4
1,002.0
784.1
833.3
833.3
843.9
15.4
–
15.4
15.4
15.4
10.1
0.7
10.8
10.8
0.8
11.6
5.3
4.6
4.6
3.8
63.0
4.1
67.1
67.1
5.9
73.0
54.0
3.5
57.5
57.5
3.3
60.8
9.0
9.6
9.6
12.2
Total
£m
2,060.6
182.3
2,242.9
2,242.9
237.9
2,480.8
723.8
135.0
858.8
858.8
227.4
1,086.2
1,336.8
1,384.1
1,384.1
1,394.6
On 7 December 2020, the Company issued 224,657,287 shares to 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 from which point the cost model has been adopted.
Amortisation is aligned to when the asset is available for use – i.e. when it is in the location and condition necessary for it to be
capable of operating in the manner intended by management.
177
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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 £1.1bn at 31 December 2022.
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.
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.
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.
• 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
14.0% (2021: 11.7%).
Sensitivity analysis
• As at 31 December 2022 the gross margin would need to decrease by 27.0% 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 2022.
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Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
14 Property, plant and equipment
Cost
Balance at 1 January 2021
Additions
Disposals
Effect of movements in exchange rates
Balance at 31 December 2021
Balance at 1 January 2022
Additions
Disposals
Effect of movements in exchange rates
Balance at 31 December 2022
Depreciation
Balance at 1 January 2021
Charge for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2021
Balance at 1 January 2022
Charge for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2022
Net book value
At 1 January 2021
At 31 December 2021
At 1 January 2022
At 31 December 2022
Plant,
machinery,
fixtures
and fittings
£m
Motor
vehicles
£m
Freehold
land and
buildings
£m
68.7
3.0
–
(0.2)
71.5
71.5
2.9
–
0.3
74.7
29.9
2.4
–
–
Tooling
£m
533.7
13.9
–
–
547.6
547.6
64.1
–
–
611.7
327.4
36.3
–
–
226.8
14.2
(2.4)
(0.1)
238.5
238.5
27.8
(0.6)
0.1
265.8
82.8
26.3
(2.4)
–
32.3
363.7
106.7
32.3
2.7
–
0.1
35.1
38.8
39.2
39.2
39.6
363.7
60.5
–
–
424.2
206.3
183.9
183.9
187.5
106.7
17.3
(0.6)
0.1
123.5
144.0
131.8
131.8
142.3
Total
£m
829.9
31.2
(2.4)
(0.3)
858.4
858.4
94.9
(0.8)
0.4
952.9
440.3
65.0
(2.4)
–
502.9
502.9
80.7
(0.8)
0.2
583.0
389.6
355.5
355.5
369.9
0.7
0.1
–
–
0.8
0.8
0.1
(0.2)
–
0.7
0.2
–
–
–
0.2
0.2
0.2
(0.2)
–
0.2
0.5
0.6
0.6
0.5
179
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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.
Assets in the course of construction at a cost of £32.9m (2021: £3.8m) 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 (2021: £6.1m)
which is not depreciated. Capital commitments are disclosed in note 29.
The tables below analyse the net book value of the Group’s property, plant and equipment by geographical location.
At 31 December 2022
Freehold land and buildings
Tooling
Plant, machinery, fixtures and fittings, and motor vehicles
At 31 December 2021
Freehold land and buildings
Tooling
Plant, machinery, fixtures and fittings, and motor vehicles
United
Kingdom
£m
36.6
120.3
144.7
301.6
United
Kingdom
£m
37.3
98.5
132.0
267.8
Rest of Europe
£m
The Americas
£m
Asia Pacific
£m
1.8
61.8
0.7
64.3
2.9
1.1
–
4.0
–
–
–
–
Rest of Europe
£m
The Americas
£m
Asia Pacific
£m
1.9
84.5
0.4
86.8
–
0.7
–
0.7
–
0.2
–
0.2
Total
£m
41.3
183.2
145.4
369.9
Total
£m
39.2
183.9
132.4
355.5
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
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 2021
Additions
Modifications
Disposals
Effect of movements in exchange rates
Balance at 31 December 2021
Balance at 1 January 2022
Additions
Modifications
Disposals
Effect of movements in exchange rates
Balance at 31 December 2022
Depreciation
Balance at 1 January 2021
Charge for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2021
Balance at 1 January 2022
Charge for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2022
Carrying value
At 1 January 2021
At 31 December 2021
At 1 January 2022
At 31 December 2022
Properties
£m
Plant and
machinery
£m
IT equipment
£m
77.4
11.4
3.3
(1.9)
(1.0)
89.2
89.2
4.0
3.3
(5.5)
1.2
92.2
18.7
7.7
(1.9)
(0.2)
24.3
24.3
9.9
(5.5)
(0.7)
28.0
58.7
64.9
64.9
64.2
15.6
6.5
–
–
–
–
15.6
15.6
–
–
(4.5)
–
11.1
4.6
0.5
–
–
5.1
5.1
0.6
(4.5)
–
1.2
11.0
10.5
10.5
9.9
–
–
–
–
6.5
6.5
–
0.2
(5.8)
–
0.9
4.8
1.1
–
–
5.9
5.9
0.5
(5.8)
–
0.6
1.7
0.6
0.6
0.3
Total
£m
99.5
11.4
3.3
(1.9)
(1.0)
111.3
111.3
4.0
3.5
(15.8)
1.2
104.2
28.1
9.3
(1.9)
(0.2)
35.3
35.3
11.0
(15.8)
(0.7)
29.8
71.4
76.0
76.0
74.4
Income from the sub-leasing of right-of-use assets in the year 31 December 2022 was £0.6m (2021: £0.6m). 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.
181
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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 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 is:
Less than one year
One to five years
More than five years
Analysed as:
Current
Non-current
2022
£m
9.9
39.1
90.1
2021
£m
13.5
36.6
96.3
139.2
146.4
2022
£m
7.4
26.8
65.6
99.8
7.4
92.4
99.8
2021
£m
9.7
24.1
69.6
103.4
9.7
93.7
103.4
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 2022 was £4.5m (2021: £3.9m). Total cash outflow for leases
accounted for under IFRS 16 for the current year was £10.0m (2021: £13.8m). Expenses charged to the Consolidated Income
Statement for short term leases for the year ended 31 December 2022 were £0.7m (2021: £0.3m). The portfolio of short term
leases at 31 December 2022 is representative of the expected annual short term lease expense in future years.
The following disclosure has been included to facilitate the understanding of the impact of adopting IFRS 16 on the Group due to
covenants in the Group’s finance arrangements that continue to use IAS 17.
The impact of IFRS 16 on the Consolidated Income Statement excluding tax for the year ended 31 December 2022 is:
As reported
31 December
2022
£m
Add back
IFRS 16
interest
charge
£m
Add back
IFRS 16
depreciation
charge
£m
Less
amortisation
of legal fees
£m
Less lease
incentives
£m
Less
IAS 17
lease cost
£m
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
1,381.5
(930.8)
450.7
(113.0)
(479.5)
(141.8)
15.5
(368.7)
(495.0)
Adjusted EBITDA (note 33)
190.2
–
–
–
–
–
–
–
4.5
4.5
–
–
–
–
–
11.0
11.0
–
–
11.0
–
–
–
–
–
(0.1)
(0.1)
–
–
(0.1)
(0.1)
–
–
–
–
1.1
1.1
–
–
1.1
1.1
Excluding
impact of
IFRS 16
31 December
2022
£m
1,381.5
(930.8)
450.7
(113.0)
(482.0)
(144.3)
15.5
(364.2)
(493.0)
–
–
–
–
(14.5)
(14.5)
–
–
(14.5)
(14.5)
176.6
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
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 2021 is:
As reported
31 December
2021
£m
Add back
IFRS 16
interest
charge
£m
Add back
IFRS 16
depreciation
charge
£m
Less
amortisation
of legal fees
£m
Less lease
incentives
£m
Less
IAS 17
lease cost
£m
–
–
–
–
–
–
–
3.9
3.9
–
–
–
–
–
8.4
8.4
–
–
8.4
–
–
–
–
–
(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
Operating loss
Finance income
Finance expense
(Loss)/profit before tax
1,095.3
(751.6)
343.7
(84.8)
(335.4)
(76.5)
36.4
(173.7)
(213.8)
Adjusted EBITDA (note 33)
137.9
16 Inventories
Parts for resale, service parts and production stock
Work in progress
Finished vehicles
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)
–
–
–
–
(9.9)
(9.9)
–
–
(9.9)
(9.9)
129.0
2022
£m
152.2
48.5
85.5
286.2
2021
£m
115.5
29.8
51.5
196.8
Finished vehicles include Group-owned service cars at a net realisable value of £44.4m (2021: £30.8m).
During the years ended 31 December 2022 and 2021 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
2022
£m
137.0
42.5
46.8
19.4
245.7
2021
£m
139.5
37.1
48.8
18.0
243.4
6.3
2.1
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.
183
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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
Japanese yen
Other
2022
£m
75.6
15.2
50.8
21.7
31.0
11.4
2021
£m
108.4
2.6
30.5
27.4
19.3
8.5
205.7
196.7
Wholesale finance facility
Sales to third-party Aston Martin franchised dealers are eligible, subject to individual dealer approved credit limits, to be financed
through a wholesale finance facility.
In the year ended 31 December 2022, the Group entered into a new multi-currency wholesale finance facility with FCA Bank S.p.A.
(“FCAB”) and its regional designates. Under the facility, the Group finances dealer trade receivables with FCAB around the time
a sale has been made under the Group’s revenue recognition policy and receives consideration equal to the value of the trade
receivable financed. The Group has the option to subvent the dealer financing cost which provides the dealer network an interest-
free period. The cost of this subvention is presented as a financing expense in the Consolidated Income Statement. The Group has
considered the IFRS 9 criteria for asset derecognition in respect of the trade receivables financed through FCAB. The Group is
satisfied that substantially all the risks are transferred to FCAB. As a result, the wholesale finance facility is off balance sheet.
Due to this classification, financing costs of £0.3m associated with the scheme are presented in operating cash flows (note 27).
The Group’s previous wholesale finance facility was 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 2022 the multi-currency facility was closed to new financing, is currently in a wind down period and will be fully
closed in the first half of 2023. The utilisation of the facility as at 31 December 2022 was £11.4m (2021: £16.9m). A full explanation
of the facility structure and the rationale behind the off balance sheet recognition is outlined in the 2021 Annual Report. As at
31 December 2022, the only remaining balances related to the facility were the subordinated loan of £0.5m (2021: £0.5m), the
balance on the senior loan of £0.1m (2021: £1.6m) (note 19), and an interest in a Profit Participating Loan of £0.1m which is carried
at a 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. Due to the off balance sheet classification, financing costs of
£3.8m (2021: £8.0m) associated with the scheme are presented in operating cash flows.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
Notes to the Financial Statements continued
Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
18 Cash and cash equivalents
Cash and cash equivalents
2022
£m
583.3
2021
£m
418.9
Cash at bank when placed on deposit earns interest at floating rates based on daily bank deposit rates. The book value of cash and
cash equivalents approximates to their fair value.
Cash is held in the following currencies; those held in currencies other than sterling have been converted into sterling at year-end
exchange rates:
Sterling
Chinese renminbi
Euro
US dollar
Japanese yen
Other
Included within the above:
Restricted cash
2022
£m
336.8
59.8
26.1
130.5
4.5
25.6
583.3
2021
£m
263.3
73.5
15.8
59.0
2.3
5.0
418.9
32.8
33.0
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 UK. The restricted cash has been revalued at 31 December 2022 to £32.8m and is shown in the
cash and cash equivalents value above. The cash in China cannot be withdrawn whilst the loan remains in place.
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
2022
£m
2.3
0.6
0.3
5.6
8.8
8.8
–
8.8
2021
£m
0.6
2.1
1.8
3.3
7.8
7.3
0.5
7.8
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 2022 £0.3m held in certain local bank accounts had been frozen in relation to local arbitration proceedings
(2021: £1.8m). 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 2022 the Group held £0.5m (2021: £0.5m) of subordinated loan and £0.1m (2021: £1.6m) of senior loan assets
relating to a wholesale financing facility (note 17).
185
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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 Holdings Limited, the immediate parent company of 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 2022 was a £1.6m increase (2021: £0.5m decrease) 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.
The fair value of the warrant equity option above has been established by applying the proportion of equity represented by the
derivative to an assessment of the enterprise value of AMR GP Limited, which is then adjusted to reflect marketability and control
commensurate with the size of the investment.
The enterprise value has been estimated using a blend of measures including an income-based approach and a market-based
approach. Due to the size of the potential investment, as a proportion of the equity of AMR GP Limited, there are no plausible
sensitivities which would give rise to a material variation in the carrying value of the derivative.
There is a further embedded derivative in the agreement in respect of an additional economic interest in the equity of AMR GP
Holdings Limited which was 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 five-year period.
The fair value movement in this derivative for the year ended 31 December 2022 was a £0.7m increase (2021: £0.2m decrease)
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
Repurchase liability
Customer deposits and advances
Accruals and other payables
Deferred income – service packages
2022
£m
151.2
38.2
335.7
346.0
5.2
876.3
2021
£m
114.4
19.7
342.6
239.2
5.1
721.0
Trade payables are non-interest bearing, and it is the Group’s policy to settle the liability within 90 days.
Accruals and other payables consist of product development and capital accruals of £135.7m (2021: £89.8m), sales and marketing
accruals of £59.0m (2021: £59.8m), manufacturing accruals of £40.7m (2021: £25.4m) and administrative and other accruals of
£110.6m (2021: £64.2m).
At 31 December 2022 a repurchase liability of £38.2m including accrued interest of £0.2m has been recognised in accruals and
other payables and net debt (see note 23). In 2022, across multiple transactions, £66.7m of parts for resale, service parts and
production stock were sold for £75.7m (gross of indirect tax) and subsequently repurchased. Under these repurchase agreements,
the Group will repay a total of £80.0m (gross of indirect tax). As part of this arrangement legal title to the parts was surrendered;
however, control remained with the Group. At 31 December 2022, £40.0m of the total £80.0m had been repaid with the remaining
amount to be repaid within 2023. A further £20.0m was repaid in the year relating to a similar repurchase liability which was valued
at £19.7m at 31 December 2021.
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Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
20 Trade and other payables continued
Contract liabilities
Changes in the Group’s contract liabilities during the year are summarised as follows:
Additional
amounts arising
during the
period
£m
108.5
3.2
At 1 January
2022
£m
342.6
14.9
Amounts
recognised
within
revenue
£m
(111.0)
(4.7)
Additional
amounts arising
during the
period
£m
174.6
3.8
At 1 January
2021
£m
268.5
11.9
Amounts
recognised
within
revenue
£m
(75.6)
(0.8)
Significant
financing
component for
which an
interest
charge is
recognised
£m
8.0
–
Significant
financing
component for
which an
interest
charge is
recognised
£m
4.8
–
Amounts
returned
and other
changes
£m
(12.4)
0.3
At 31
December
2022
£m
335.7
13.7
Amounts
returned
and other
changes
£m
(29.7)
–
At 31
December
2021
£m
342.6
14.9
Customer deposits and advances
Deferred income – service packages
Customer deposits and advances
Deferred income – service packages
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, to
which these customer deposits primarily relate, the Group expects to derecognise a significant proportion over the next three
years with approximately £119.3m expected to be recognised in 2023. This unwind relates to the balance held as at 31 December
2022 and does not take into consideration any additional deposits and advances arising during 2023.
In the year ended 31 December 2022, a finance expense of £8.0m (see note 8) was recognised as a significant financing
component on contract liabilities held for greater than 12 months (2021: £4.8m). Upon satisfaction of the linked performance
obligation, the liability is released to revenue so that the total amount taken to the Consolidated Income Statement reflects the
sales price the customer would have paid for the vehicle at that point in time.
The Group applies a practical expedient for short term advances received from customers whereby the advanced payment is not
adjusted for the effects of a significant financing component. According to the individual terms of the Special Vehicle contract and
the position of the customer in the staged deposit and vehicle specification process, some deposits are contractually refundable.
At 31 December 2022 the Group held £102.9m of contractually refundable deposits (before the impact of significant financing
components) (2021: £85.0m). 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 who 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
Other payables
2022
£m
8.5
0.6
9.1
2021
£m
9.8
–
9.8
187
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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
2022
£m
0.7
2.9
22.6
26.2
26.2
–
26.2
2021
£m
0.9
2.9
31.0
34.8
34.8
–
34.8
22 Financial instruments
Group
The Group's principal financial instruments comprise cash and cash equivalents, Senior Secured Notes (“SSNs”), a Revolving Credit
Facility (“RCF”), a finished vehicle financing facility, 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, 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 FCAB
or Velocitas under the wholesale finance facilities is borne by FCAB or Velocitas respectively. The Group, as a senior and
subordinated lender to Velocitas, retains 5% of the credit risk associated with such sales. The Group has no credit risk associated
with the FCAB facility. The Group’s remaining vehicle sales to territories where there is currently no wholesale financing are made
on credit terms ranging from 30 to 180 days. The Group manages the default risk of such sales via a credit risk insurance policy.
An appropriate expected credit loss provision is made in respect of the Group’s loan assets to Velocitas. Dealers within
North America are allowed ten-day credit terms from the date of invoice. 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 net 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.
The expected credit loss related to default of other receivables (note 17) is assessed as zero.
In generating the expected credit loss provision for trade receivables, 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,
and applied to the trade and other receivable ageing 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.
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Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
22 Financial instruments continued
Credit risk continued
In presenting the loss allowance summary below for 2021, the specific loss allowance and original receivable balance of £19.0m
related to historical other operating income has been excluded so as not to distort the expected loss rate. This balance was written
off during 2022. 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 2022
As at 31 December 2021
Expected
loss rate
%
Gross carrying
amount
£m
Loss
allowance
£m
Expected
loss rate
%
Gross carrying
amount
£m
Loss
allowance
£m
*
*
*
93.8%
129.1
5.8
1.7
6.5
143.1
–
–
–
6.1
6.1
*
*
*
74.7%
124.8
10.0
2.8
7.5
145.1
–
–
–
5.6
5.6
* 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 as at 31 December 2021 for trade receivables, including the specific loss allowance of £19.0m relating
to historical other income noted above, reconciles to the opening loss allowance as at 1 January 2022 as below. The specific
allowance of £19.0m was written off during 2022.
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
Effect of foreign exchange
At 31 December
Borrowings
The following table analyses Group borrowings:
Current
Bank loans and overdrafts
Non-current
Senior Secured Notes
Total borrowings
Total borrowings are denominated in the following currencies, in sterling at the year-end exchange rates:
2022
£m
24.6
0.6
(19.2)
0.1
6.1
2021
£m
21.7
3.1
(0.2)
–
24.6
2022
£m
2021
£m
107.1
114.3
1,104.0
1,211.1
1,074.9
1,189.2
2022
£m
107.1
1,104.0
1,211.1
2021
£m
114.3
1,074.9
1,189.2
Sterling
US dollar
Total borrowings
189
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Notes to the Financial Statements continued
22 Financial instruments continued
Borrowings continued
Current borrowings
The Group has an RCF attached to the SSNs (see Non-current borrowings below). The carrying amount net of unamortised
arrangement fees included in current borrowings relating to the RCF at 31 December 2022 was £77.1m (2021: £78.0m).
At 31 December 2022 £78.5m of the £90.6m RCF was drawn as cash (2021: £80.0m of the £90.6m facility).
During 2021, the Group entered into a bilateral RCF 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 2022 to £32.8m (2021: £33.0m) and is shown in cash and
cash equivalents. The facility of £30.0m is shown within borrowings in current liabilities on the Statement of Financial Position.
In 2018 the Group entered into a fixed rate loan to finance the construction of the paint shop at the new St Athan manufacturing
facility for which the final repayment was made during the year. At 31 December 2021 the amount included in current borrowings
was £6.3m.
Non-current borrowings
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. 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 October 2022 the Group repurchased $40.3m of First Lien SSNs and $143.8m of Second Lien SSNs. The portion
of unamortised fees and the redemption premium was charged to the Income Statement at the point of redemption as an
accelerated charge and presented within adjusting items (note 5). Transaction costs of £1.9m relating to the repurchase are
included in adjusting items (note 5). The US dollar amounts have been converted to sterling equivalents for reporting purposes.
At 31 December 2022 the Group held £1,104.0m of SSNs (2021: £1,074.9m) comprising First Lien SSNs of $1,143.7m
(2021: $1,184.0m) at 10.5% cash interest and Second Lien SSNs of $229.1m (2021: $355.3m) 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.
Derivative option over own shares
The Second Lien SSNs include detachable warrants enabling the warrant holders to subscribe for a number of ordinary shares in
the Company at the subscription price of £1.67 (previously £10 per share prior to the rights issue in September 2022). The warrant
holders have the right to exchange their warrant options for a reduced number of warrant shares resulting in no cash being paid to
receive the shares. The ratio at which this exchange can be transacted is determined by the share price at execution of the options.
A derivative option liability was initially recorded at 31 December 2020 due to the uncertain number of shares which will be issued
under the agreement, which is subsequently remeasured at fair value through the Income Statement.
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 warrant holders and when they might exercise their holdings.
The derivative option liability was initially recognised as a derivative forward at fair value with changes in the fair value being
recognised in the Income Statement until issuance of the warrants on 7 December 2020 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. During the year ended 31 December 2022, changes to the fair value of the
derivative option have resulted in a credit to the Income Statement of £8.4m (2021: £34.1m) which is presented in adjusting items.
A total of nil (2021: 30,518,600 warrants) were exercised resulting in no change to the associated liability (2021: partial
extinguishment of the liability and a transfer to retained earnings of £14.8m).
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
22 Financial instruments continued
Borrowings continued
Interest rate risk
The Group is exposed interest rate risk on the RCF attached to the SSNs and 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 both facilities is based on SONIA and compounded in arrears.
Profile
At 31 December the interest rate profile of the Group’s interest-bearing financial instruments was:
Fixed rate instruments
Financial liabilities
Variable rate instruments
Financial liabilities
2022
£m
2021
£m
1,104.0
1,159.2
107.1
30.0
Borrowings, including the SSNs and the loan to finance the paint shop in St Athan repaid during March 2022, are at fixed interest
rates. During 2021 the rate of interest on the RCF, which is attached to the SSNs, was based on LIBOR plus a percentage spread
and was predetermined at the date of the drawdown of the RCF so was considered to be fixed rate for the analysis above.
In 2022 and 2021 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 SONIA.
Interest rate risks – sensitivity
The following table demonstrates the sensitivity, with all other variables held constant, of the Group’s loss after tax
to a reasonably possible change in interest rates on the bilateral RCF with HSBC and the RCF attached to the SSNs
at 31 December 2022. (2021: bi-lateral RCF only).
SONIA/Bank of England Base Rate
SONIA/Bank of England Base Rate
Increase/
(decrease) in
interest rate
3.00%
(3.00%)
2022
£m
Effect
on loss
after tax
(2.6)
2.6
2021
£m
Effect
on loss
after tax
(0.7)
0.7
191
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Notes to the Financial Statements continued
22 Financial instruments continued
Foreign currency exposure
The Group’s exposure to the risk of changes in foreign currency exchange relates primarily to US dollar sales (including inter-
Group sales), Chinese renminbi sales, Japanese yen sales and Euro denominated purchases.
At 31 December 2022 the Group hedged 29% for 2023 (2021: 37% for 2022) of its US dollar denominated highly probable inter-
Group sales, 19% of its Japanese yen sales (2021: 12% for 2022) and 15% of its Euro denominated purchases for 2023 (2021: 11%
for 2022). These foreign currency risks are hedged by using foreign currency forward contracts.
The Group’s sterling equivalents of financial assets and liabilities (excluding borrowings analysed by currency above)
denominated in foreign currencies at 31 December were:
At 31 December 2022
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
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
US dollars
£m
Chinese
renminbi
£m
Japanese yen
£m
Other
£m
50.8
0.2
0.8
–
26.1
77.9
(153.1)
(0.1)
(17.8)
–
(171.0)
(93.1)
21.7
–
1.5
–
130.5
153.7
(134.3)
(9.5)
(44.3)
(0.1)
(188.2)
(34.5)
15.2
–
–
0.3
59.8
75.3
(34.2)
(0.7)
(7.6)
–
(42.5)
32.8
31.0
–
–
–
4.5
35.5
(9.5)
(5.0)
(4.8)
(0.6)
(19.9)
15.6
Euros
£m
US dollars
£m
Chinese
renminbi
£m
Japanese Yen
£m
30.5
0.4
–
–
15.8
46.7
(118.9)
–
(10.0)
(0.4)
(129.3)
(82.6)
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
19.3
–
0.3
–
2.3
21.9
(0.4)
(5.5)
(4.6)
–
(10.5)
11.4
11.4
0.1
–
–
25.6
37.1
(5.4)
(0.1)
(1.9)
–
(7.4)
29.7
Other
£m
8.5
0.1
–
–
5.0
13.6
(2.1)
(0.1)
(0.4)
–
(2.6)
11.0
Total
£m
130.1
0.3
2.3
0.3
246.5
379.5
(336.5)
(15.4)
(76.4)
(0.7)
(429.0)
(49.5)
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
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
22 Financial instruments continued
Foreign currency exposure continued
The following significant exchange rates applied:
Euro
Chinese renminbi
US dollar
Japanese yen
Average rate
2022
Average rate
2021
Closing rate
2022
Closing rate
2021
1.17
8.26
1.25
1.16
8.90
1.37
1.13
8.36
1.20
1.19
8.63
1.35
160.24
149.37
158.72
155.97
Currency risk – sensitivity
The following table demonstrates the sensitivity to a change in the US dollar, Euro, Chinese renminbi and Japanese yen exchange
rates, with all other variables held constant, of the Group's result 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
Japanese yen
Japanese yen
(Increase)/
decrease
in rate
Effect on result
after tax
2022
£m
Effect on result
after tax
2021
£m
(5%)
5%
(5%)
5%
(5%)
5%
(5%)
5%
(7.8)
8.6
12.5
(13.8)
(4.3)
4.8
(1.7)
1.9
(4.9)
5.5
9.6
(10.6)
(5.0)
5.6
(2.0)
2.2
$1,085.5m and $335m Senior Secured Notes
In December 2020 the Group took out 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. Following the successful equity raise in September
2022, the Group paid down $40.3m of First Lien Senior Secured Notes (“SSNs) and $143.8m of Second Lien SSNs. No hedging
relationship has been established in 2021 or 2022.
$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.
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Notes to the Financial Statements continued
22 Financial instruments continued
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 $400m of repaid SSNs as part of a cash flow hedging
relationship, to manage the exchange rate risk resulting from forecast US dollar inter-Group 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 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 repaid 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 Cost of Sales within the Income
Statement in line with the profile of the future US dollar sales to which it relates.
The Group currently has no active currency forward contract cash flow hedges beyond 2023. 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 the cash flow hedge reserve relating to the discontinued
portion remains in the cash flow hedge reserve until the future cash flows occur. If the hedged future cash flows are no longer
expected to occur, then that amount is immediately reclassified from the cash flow hedge reserve to the Income Statement as
a reclassification adjustment.
Certain forward foreign exchange contracts were designated as hedges with effect from 1 July 2019. Prior to this, all movements
in the fair value had been recorded within finance expense as an adjusting item 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.
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Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
22 Financial instruments continued
Hedge accounting continued
$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 when translated 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 (2021: all cost of sales), except for ineffective
amounts relating to the $400m SSNs which would be 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 2022
31 December 2021
Notional
value
£m
Carrying
value
£m
Change in fair
value used for
measuring
ineffectiveness
£m
Notional
value
£m
Carrying
value
£m
Change in fair
value used for
measuring
ineffectiveness
£m
96.1
33.1
105.6
2.3
(0.7)
–
2.3
(0.7)
–
26.6
33.6
180.9
0.6
(0.8)
–
0.6
(0.9)
–
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 2022
31 December 2021
Cash flow
hedge reserve
£m
Cost of hedging
reserve
£m
Cash flow
hedge reserve
£m
Cost of hedging
reserve
£m
2.9
3.9
(1.8)
(0.9)
–
0.2
0.7
8.8
(2.4)
(0.6)
–
0.2
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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:
Year ended 31 December 2022
Foreign exchange forward contracts
$400m Senior Secured Notes – hedge instrument
Tax on fair value movements recognised in OCI
Total hedging
gain/(loss)
recognised
in OCI
£m
Ineffectiveness
recognised in
the Income
Statement
£m
Income
Statement
line item
1.7
(4.9)
0.9
(0.3) Cost of sales
– Cost of sales
–
–
Fair value
movement
on cash flow
hedges
£m
(6.1)
–
1.5
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
Ineffectiveness
recognised in
the Income
Statement
£m
Income
Statement
line item
(2.9)
(1.7)
1.2
(0.6) Cost of sales
– Cost of sales
–
–
Fair value
movement
on cash flow
hedges
£m
(0.3)
–
0.1
Amount
reclassified
from OCI to
the Income
Statement
£m
Income
Statement
line item
7.8 Cost of sales
(4.9) Cost of sales
(0.7)
–
Amount
reclassified
from OCI to
the Income
Statement
£m
Income
Statement
line item
(2.6) Cost of sales
(1.7) Cost of sales
1.1
–
Hedge ineffectiveness recognised within the Consolidated Income Statement relates to differences in the nominal value of the
hedged items and the hedging instrument. At 31 December 2022 and 2021 there were no balances remaining in the cash flow
hedge reserve from hedging relationships for which hedge accounting is no longer required.
All hedging instruments recognised by the Group at 31 December 2022 have a maturity date of less than one year.
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 2022 the Group undertook a share placing and
rights issue to strengthen the liquidity of the business.
During 2021, the Group entered into a bilateral RCF 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 2022 to £32.8m (2021: £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.
At 31 December 2022 the Group held £1,104.0m (2021: £1,094.9m) of SSNs. In October 2022 the Group repurchased $40.3m
of First Lien SSNs and $143.8m of Second Lien SSNs with a premium paid of £14.3m on early redemption. The First Lien Notes are
repayable in November 2025 and the Second Lien Notes in November 2026. The portion of unamortised fees and the redemption
premium was charged to the Income Statement at the point of redemption as an accelerated charge and presented within
adjusting items (note 5). Transaction costs of £1.9m relating to the repurchase are included in adjusting items (note 5). The US
dollar amounts have been converted to sterling equivalents for reporting purposes.
Attached to the SSNs is a £90.6m RCF of which £78.5m (2021: £80.0m) was drawn in cash at the reporting date. The amount
recorded in the Statement of Financial Position is net of unamortised transaction costs. £5.2m (2021: £5.9m) of the remaining
ancillary facility has been utilised through the issuance of letters of credit and guarantees. The RCF attached to the SSNs is
available until August 2025.
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Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
22 Financial instruments continued
Liquidity risk continued
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 2022 the Group held refundable deposits of
£102.9m (2021: £85.0m). 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, who is required
to make an equivalent advanced payment.
The maturity profile of the Group’s financial liabilities at 31 December 2022 based on contractual undiscounted payments
was as follows.
On demand
£m
Less than 3
months
£m
Non-derivative financial liabilities
Bank loans and overdrafts
Senior Secured Notes
Trade and other payables
–
–
–
Refundable customer deposits and advances
102.9
Derivative financial liabilities
Forward exchange contracts
–
102.9
109.0
–
443.1
–
0.5
552.6
3 to 12
months
£m
–
117.0
138.1
–
1 to 5
years
£m
–
1,462.4
8.6
–
0.2
255.3
–
1,471.0
Contractual
cash flows
Total
£m
>5 years
£m
–
–
0.6
–
–
0.6
109.0
1,579.4
590.4
102.9
0.7
2,382.4
Included in the tables above and below are interest bearing loans and borrowings at a carrying value of £1,211.1m (2021:
£1,189.2m). 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 2021 based on contractual undiscounted payments
was 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
Contractual
cash flows
Total
£m
>5 years
£m
–
–
–
–
–
–
117.5
1,729.8
387.5
85.0
0.8
2,320.6
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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
$1,143.7m (2021: $1,184.0m) 10.5% US dollar
First Lien Notes
$229.1m (2021: $355.3) 15.0% US dollar
Second Lien Split Coupon Notes
Level 2
Forward exchange contracts
Derivative option over own shares
As at 31 December 2022
As at 31 December 2021
Nominal value
£m
Book value
£m
Fair value
£m
Nominal value
£m
Book value
£m
Fair value
£m
–
0.6
–
0.6
2.3
0.6
5.6
8.5
2.3
0.6
5.6
8.5
–
2.1
–
2.1
0.6
2.1
3.3
6.0
0.6
2.1
3.3
6.0
950.8
935.0
893.0
874.2
852.5
959.4
190.5
169.0
194.4
262.3*
222.4
302.3*
–
48.1
1,189.4
0.7
22.6
1,127.3
0.7
22.6
1,110.7
–
48.1
1,184.6
0.8
31.0
1,106.7
0.8
31.0
1,293.5
* The fair value of the Second Lien SSNs includes $9.8m, $10.5m, $10.8m and $6.8m of PIK notes issued in April 2021, November 2021, April 2022 and November 2022
respectively. The 31 December 2021 comparative for nominal value and fair value has been updated to include the two issuances during 2021. The issued PIK already
forms part of the book value at each reporting period and no change has been made to the presentation of these numbers
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).
Level 3 assets and liabilities are 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 warrant holders to subscribe for a number of ordinary shares in the Company. The fair value is
calculated using a binomial model and updated at each period end reflecting the latest market conditions. The inputs used in the
valuation model include the quoted share price, market volatility, exercise ratio and risk free rate. The reduction in nominal value
represents options exercised by warrant holders during the year.
For all other receivables and payables, the carrying amount is deemed to reflect the fair value.
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Corporate Governance
Financial Statements
XX
XX
XX
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 Statement 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 increase/(decrease) in cash and cash equivalents
Add back cash flows in respect of other components of net debt:
New borrowings
Proceeds from inventory repurchase arrangement
Repayment of existing borrowings
Repayment of inventory repurchase arrangement
Lease liability payments
Movement in cash held not available for short term use
Transaction fees
Decrease/(increase) in net debt arising from cash flows
Non-cash movements:
Foreign exchange loss on secured loan
Interest added to debt
Borrowing fee amortisation
Lease liability interest charge
Lease modifications
New leases
Foreign exchange gain and other movements
Decrease/(increase) in net debt
Net debt at beginning of the year
Net debt at the end of the year
2022
£m
583.3
0.3
(38.2)
(7.4)
(92.4)
2021
£m
418.9
1.8
(19.7)
(9.7)
(93.7)
(107.1)
(114.3)
(1,104.0)
(1,074.9)
(765.5)
(891.6)
164.4
(70.5)
–
(75.7)
172.7
60.0
10.0
(1.5)
–
(108.5)
(19.0)
37.3
40.0
9.9
(8.1)
1.9
329.9
(117.0)
(156.2)
(15.7)
(25.4)
(4.5)
(3.5)
(2.2)
3.7
126.1
(891.6)
(765.5)
(12.4)
(13.4)
(7.5)
(3.9)
0.4
(11.5)
0.4
(164.9)
(726.7)
(891.6)
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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
2022
£m
2021
£m
Restructuring
Warranty
Total
Restructuring
Warranty
0.4
–
(0.4)
–
–
–
–
–
–
38.5
30.9
(26.5)
(1.5)
(0.3)
41.1
18.6
22.5
41.1
38.9
30.9
(26.9)
(1.5)
(0.3)
41.1
18.6
22.5
41.1
7.8
–
(5.0)
–
(2.4)
0.4
0.4
–
0.4
31.1
31.8
(23.9)
0.2
(0.7)
38.5
19.5
19.0
38.5
Total
38.9
31.8
(28.9)
0.2
(3.1)
38.9
19.9
19.0
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
was substantially completed during 2021 with the final amounts being utilised during the year ended 31 December 2022.
The warranty provision is calculated based on the level of historical 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 2022 was £17.6m (2021: £10.6m). Outstanding contributions at the year end were £1.5m (2021: £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.
On 31 January 2022 the scheme was closed to future accrual resulting in a curtailment loss of £2.8m (note 5).
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 comprises representatives of the Group and members of the scheme and
an independent, professional Trustee was appointed during 2019.
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Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
25 Pension obligations continued
Defined Benefit scheme continued
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.
•
•
• Changes in bond yields - A decrease in corporate bond yields will increase the value placed on the Scheme liabilities, although
this will be partially offset by an increase in the value of the Scheme's bond holdings.
The projected unit method has been used to determine the liabilities.
The pension cost is assessed in accordance with the advice of an independent qualified actuary. The latest actuarial valuation of
the scheme had an effective date of 6 April 2020. The assumptions that make the most significant effect on the valuation are those
relating to the rate of return on investments, the rate of increase in salaries and pensions and expected longevity. It was assumed
that the 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.
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 2023
are £15.0m.
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 2021 and 2022 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 Limited Price Indexation
Expected return on scheme assets
RPI Inflation assumption
CPI Inflation assumption
31 December
2022
31 December
2021
4.85%
N/A
2.45%
2.95%
4.85%
3.00%
2.45%
2.00%
3.10%
2.50%
3.00%
2.00%
3.10%
2.50%
201
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Notes to the Financial Statements continued
25 Pension obligations continued
Assumptions continued
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’ relating to an employee retiring in 2042
(2022 assumptions) or 2041 (2021 assumptions).
Projected life expectancy at age 65
Male
Female
Future
Currently
aged 45
2022
22.5
25.3
Current
Currently
aged 65
2022
21.3
23.9
Future
Currently
aged 45
2021
22.8
25.5
Average duration of the liabilities in years as at 31 December 2022
Average duration of the liabilities in years as at 31 December 2021
The following table provides information on the composition and fair value of the assets of the scheme:
Current
Currently
aged 65
2021
21.5
24.0
Years
19
26
31 December
2022
Quoted
£m
31 December
2022
Unquoted
£m
31 December
2022
Total
£m
31 December
2021
Quoted
£m
31 December
2021
Unquoted
£m
31 December
2021
Total
£m
Asset class
Overseas equities
Private debt
Asset-Backed Securities
Liability driven investment
Corporate bonds
Absolute return bonds
Diversified alternatives
Cash
Insurance policies
Total
25.9
–
37.7
26.3
24.5
–
–
12.8
3.6
130.8
–
34.6
–
9.5
–
11.2
0.9
–
–
25.9
34.6
37.7
35.8
24.5
11.2
0.9
12.8
3.6
56.2
187.0
41.0
–
–
64.9
–
–
–
89.3
6.0
201.2
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
–
32.8
–
56.0
–
72.6
1.3
–
–
41.0
32.8
–
120.9
–
72.6
1.3
89.3
6.0
162.7
363.9
2022
£m
187.0
(188.9)
(1.9)
(59.3)
(61.2)
2021
£m
363.9
(368.4)
(4.5)
(74.2)
(78.7)
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.
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Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
25 Pension obligations continued
Assumptions continued
Amounts recognised in the Consolidated Income Statement during the year ended 31 December were as follows:
Amounts charged to operating loss:
Current service cost
Past service cost
Amounts charged to finance expense:
Net interest expense on the net Defined Benefit liability
Interest expense on the adjustment to reflect minimum funding requirements
Total expense recognised in the Income Statement
Changes in present value of the Defined Benefit pensions obligations are analysed as follows:
At the beginning of the year
Current service cost
Past service cost
Interest cost
Experience (losses)/gains
Actuarial gains 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
2022
£m
(0.7)
(2.8)
(3.5)
0.1
(1.5)
(4.9)
2021
£m
(8.8)
–
(8.8)
(0.2)
(1.1)
(10.1)
2022
£m
2021
£m
(368.4)
(378.7)
(0.7)
(2.8)
(7.2)
(14.7)
190.7
11.3
2.8
(8.8)
–
(6.0)
3.3
6.6
10.6
4.6
(189.0)
(368.4)
2022
£m
363.9
7.3
15.6
(188.5)
(11.3)
187.0
2022
£m
(181.2)
2021
£m
354.1
5.8
20.1
(5.5)
(10.6)
363.9
2021
£m
0.3
203
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Notes to the Financial Statements continued
25 Pension obligations continued
Assumptions continued
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 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 (losses)/gain arising on funded obligations
Gains arising due to changes in financial assumptions underlying the present value of funded obligations
Gains/(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
2022
£m
(78.7)
(4.9)
15.6
6.8
(61.2)
2022
£m
(188.5)
(14.7)
190.7
16.5
2.8
6.8
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
Sensitivity analysis of the principal assumptions used to measure scheme liabilities
At 31 December 2022 the present value of the benefit obligation was £189.0m (2021: £368.4m) and its sensitivity to changes in
key assumptions were:
Discount rate
Rate of inflation*
Life expectancy increased by approximately 1 year
Present value
of benefit
obligations at
31 December
2022
£m
Present value
of benefit
obligations at
31 December
2021
£m
228.7
196.7
194.7
474.5
388.4
384.7
Change in
assumption
Decrease by 1.00%
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 (2022/2023)
Year 2 (2023/2024)
Year 3 (2024/2025)
Year 4 (2025/2026)
Year 5 (2026/2027)
Years 6 to 10 (2028 to 2032)
2022
£m
11.2
11.6
11.9
12.3
12.6
67.9
2021
£m
11.0
11.3
11.7
12.0
12.4
66.7
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Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
25 Pension obligations continued
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 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
26 Share capital and other reserves
Allotted, called up and fully paid
Opening balance at 1 January 2021
Exercise of warrant options1
Transfer between reserves
Balance as at 31 December 2021
and 1 January 2022
Private placing2
Rights issue3
Closing balance at 31 December 2022
Number of
shares
114,933,587
1,525,926
–
116,459,513
23,291,902
559,005,660
698,757,075
Nominal
value
£
0.1
–
0.1
0.1
Share
capital
£m
11.5
0.1
–
11.6
2.4
55.9
69.9
Share
premium
£m
1,108.2
15.1
0.1
1,123.4
75.7
498.3
1,697.4
2022
(188.9)
187.0
(1.9)
(188.5)
(100.8%)
(14.7)
7.8%
6.8
(3.6%)
Merger
reserve
£m
144.0
–
(0.1)
143.9
–
–
143.9
2021
(368.4)
363.9
(4.5)
(5.5)
(1.5%)
3.3
(0.9%)
3.8
(1.0%)
Capital
redemption
reserve
£m
9.3
–
–
9.3
–
–
9.3
1. 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
2. On 9 September 2022 the Company issued 23.2m ordinary shares by way of a private placing. The shares were issued at 335p raising gross proceeds of £78.1m,
with £2.4m recognised as share capital and the remaining £75.7m recognised as share premium
3. On 28 September 2022 the Company issued 559.0m ordinary shares by way of a rights issue. The shares were issued at 103p raising gross proceeds of £575.8m,
with £55.9m recognised as share capital and the remaining £519.9m recognised as share premium. Share premium is reduced by £21.6m reflecting transaction fees
paid of which £2.9m are accrued as at 31 December 2022. Due to the shares being issued at substantially below market price, a bonus issue is deemed to have taken
place. A total of 211.6m shares issued were considered bonus shares. The weighted average shares used to calculate earnings per share (see note 11) has been
adjusted accordingly
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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 liabilities classified within net debt (note 23) to cash flows arising from financing
activities for the years ended 31 December 2022 and 2021.
Liabilities
At 1 January 2022
Changes from financing cash flows
Interest paid
Principal lease payment
Repayment of existing borrowings
Premium paid on the early redemption of Senior Secured Notes
Inventory repurchase repayment
Inventory repurchase drawdown
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
Financing expense in the Income Statement classified
as operating cash flow
Balance at 31 December 2022
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
Other
borrowings and
inventory
arrangements
£m
134.0
(4.6)
–
(7.8)
–
(60.0)
75.7
–
3.3
–
–
–
12.3
0.9
(5.2)
145.3
Other
borrowings and
inventory
arrangements
£m
158.0
(5.0)
–
(37.3)
(40.0)
19.0
31.5
(0.1)
(31.9)
–
–
–
16.5
(0.6)
–
(8.0)
134.0
Lease
Liabilities
£m
103.4
(4.5)
(10.0)
–
–
–
–
–
(14.5)
0.7
2.2
3.5
4.5
–
–
99.8
Lease
Liability
£m
103.0
(3.9)
(9.9)
–
–
–
–
–
(13.8)
(0.8)
11.5
(0.4)
3.9
–
–
–
103.4
$1,184.0m
10.5%
First Lien Notes
£m
$335m 15%
Second Lien
Notes
£m
Total
£m
852.5
222.4
1,312.3
(96.3)
–
(36.1)
–
–
–
(1.9)
(134.3)
113.5
–
–
103.5
(0.2)
–
935.0
(35.8)
–
(128.8)
(14.3)
–
–
–
(178.9)
42.7
–
–
82.8
–
–
(141.2)
(10.0)
(172.7)
(14.3)
(60.0)
75.7
(1.9)
(324.4)
156.9
2.2
3.5
203.1
0.7
(5.2)
169.0
1,349.1
$1,184.0m
10.5%
First Lien Notes
£m
$335m
15%
Second Lien
Notes
£m
Total
£m
763.2
201.8
1,226.0
(87.5)
(21.6)
(118.0)
–
–
–
–
77.0
(2.5)
(13.0)
9.9
–
–
93.4
(1.8)
0.8
–
852.5
–
–
–
–
–
(0.2)
(21.8)
2.5
–
–
41.4
(1.5)
–
–
(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
(8.0)
222.4
1,312.3
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Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
28 Share-based payments
Long term incentive schemes
On 13 and 14 June 2022, Executive Directors and certain other employees were granted conditional share awards under the
Company’s Long Term Incentive Plan (“2022 LTIP”). On 15 December 2022, 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 £0.9m (2021: £nil).
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 £0.4m (2021: £1.2m).
On 14 December 2020, Executive Directors and certain other employees were granted conditional share awards under the
Company’s “2020 LTIP”. The total credit recognised in the Consolidated Income Statement in relation to this scheme was £1.4m
(2020: charge of £1.9m).
Aggregate fair value at measurement date (£m)
Exercise price (p)
Expected volatility (%)
Dividend yield (%)
Risk free interest rate (%)
2022 grant
of 2022 LTIP
2021 grant
of 2021 LTIP
2020 grant of
2020 LTIP
6.1
£nil
50.0%
N/A
2.16%
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.
Other share-based payments
On 31 January 2022, the Group’s Defined Benefit Pension Scheme was closed to future accrual. As part of the closure cost, the
affected employees were each granted 185 shares incurring a share-based payment charge of £1.0m during the year. The terms
of the agreement provide the employees with a minimum guaranteed value for these shares subject to their ongoing employment
with the Group. The Group will pay the employees a further cash sum if the share price at 1 February 2024 does not meet this
value. The charge associated with this portion is £1.0m in the year ended 31 December 2022.
On 8 November 2022, a Group Director was granted 659,113 shares for nil consideration in relation to forfeited awards at
a previous employer and therefore securing his employment with the Group. The award is subject to clawback provisions for
a period of 12 months from the award date. The total cost incurred related to this award was £0.8m.
The total expense arising from equity-settled share-based payments is as follows:
2022 LTIP share option charge
2021 LTIP share option charge
2020 LTIP share option (credit)/charge
Grant of shares upon closure of the Defined Benefit Pension Scheme (notes 5, 25)
Group Director buyout
2022
£m
0.9
0.5
(1.4)
1.0
0.8
1.8
2021
£m
–
1.2
1.9
–
–
3.1
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Notes to the Financial Statements continued
29 Capital commitments
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 July 2024 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
in December 2020) to MBAG in exchange for access to certain technology and intellectual property to be provided to the Group
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) was issued to MBAG on 7 December 2020. A total of 11,714,274 ordinary shares remain unissued at
31 December 2022.
Property, plant and equipment expenditure contracts to the value of £10.8m (2021: £14.4m) have been committed but not
provided for as at 31 December 2022. Contracts to the value of £51.4m have been committed for the acquisition of intangible
assets but not provided for as at 31 December 2022. Certain contracts contain financial commitments, in particular purchase
commitments and guarantees, which are of a magnitude typical for the industry.
30 Related party transactions
Transactions between Group undertakings, which are related parties, have been eliminated on consolidation and accordingly are
not disclosed.
Transactions with Directors and related undertakings
Transactions during 2022
During the year ended 31 December 2022, a net marketing expense amounting to £20.2m of sponsorship has been incurred in
the normal course of business with AMR GP Limited (“AMR GP”), an entity indirectly controlled by a member of the Group’s Key
Management Personnel (“KMP”). 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. In addition, the Group incurred costs of £2.0m associated with
engineering design on an upcoming vehicle programme from Aston Martin Performance Technologies Limited (“AMPT”) of which
£2.0m is outstanding to AMPT at 31 December 2022. AMPT is an associated entity of AMR GP. In addition, AMR GP acquired a
vehicle from the Group at a total cost of £0.7m. Less than £0.1m remains due from AMR GP at 31 December 2022 relating to these
transactions. 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 KMP. A separate immediate family member of one of the Group’s KMP purchased two vehicles from a Group company
for £0.4m. £nil is outstanding at 31 December 2022. During the year ended 31 December 2022, Classic Automobiles Inc. placed
a deposit of £0.5m with a Group company for the future purchase of a Group vehicle. Classic Automobiles Inc. is controlled by
a member of the Group’s KMP.
During the year ended 31 December 2022, a separate member of the Group’s KMP and Non-Executive Director placed a deposit
of £1.5m with a Group company for the future purchase of a vehicle.
During the year ended 31 December 2022, a further separate member of the Group’s KMP and Non-Executive Director transacted
with a Group company to undertake service work on a vehicle for a total cost of less than £0.1m. £nil was outstanding at
31 December 2022.
During the year end 31 December 2022, the Group incurred costs of £1.3m for design and engineering work from Pininfarina S.p.A.
A member of the Group’s KMP and Non-Executive Director is also a member of Pininfarina S.p.A’s KMP.
During the year ended 31 December 2022, the Group incurred a rental expense of £0.7m from Michael Kors (USA), Inc.,
a Company which is owned by Capri Holdings Limited. A member of the Group’s KMP and Non-Executive Director is also
a member of Michael Kors (USA), Inc.’s KMP.
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Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
30 Related party transactions continued
Transactions with Directors and related undertakings continued
Transactions during 2021
During the year ended 31 December 2021, a net marketing expense amounting to £21.5m of sponsorship was incurred in the
normal course of business with AMR GP Limited, an entity indirectly controlled by a member of the Group’s KMP. 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. All balances between the two parties relating to 2021 have been settled. 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 KMP.
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 KMP. £nil is outstanding
from Falcon Racing Inc at 31 December 2022. 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 KMP has an indirect ownership interest. £nil is
outstanding from Flair Investment Holdings Limited at 31 December 2022. During the year ended 31 December 2021, a member
of KMP transacted with a Group company to undertake restoration work on a historic vehicle. £0.3m has been received by the
Group with £0.3m of works being completed in the year. £nil is outstanding at 31 December 2022. A member of KMP acquired
three vehicles from a Group company during the period each priced at £0.2m. £nil is outstanding at 31 December 2022.
A member of KMP acquired one historic vehicle from a Group Company during the period priced at £0.5m. £nil is outstanding
at 31 December 2022. A member of KMP placed a deposit of £1.5m with a Group company for the future purchase of a vehicle.
An immediate family member of one of the Group’s KMP placed a deposit of less than £0.1m with a Group company for the
future purchase of a vehicle.
Terms and conditions of transactions with related parties
Sales and purchases between related parties were made at normal market prices unless otherwise stated. Outstanding balances
with entities other than subsidiaries are unsecured and 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 inter-
company accounts. The Group has not provided or benefited from any guarantees for any related party receivables or payables.
31 Contingent liabilities
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 denies the claims made and is working to resolve the matter.
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Notes to the Financial Statements continued
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 2022 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**>
Proportion of
voting rights
and shares held
Holding
Ordinary
100%
Ordinary
100%
Ordinary
100%
Ordinary
100%
Ordinary
100%
Ordinary
100%
Ordinary
100%
Ordinary
100%
Ordinary
100%
Ordinary
100%
Ordinary
100%
AML Overseas Services Limited**
Ordinary
Aston Martin Lagonda (China) Automobile Distribution Co., Ltd**√ Ordinary
Ordinary
AM Nurburgring Racing Limited**
100%
100%
100%
Aston Martin Japan GK**<<
Ordinary
100%
Aston Martin Lagonda – Asia Pacific PTE Limited**>>
Ordinary
100%
Nature of business
Dormant company
Financing company holding the Senior
Secured Notes
Holding company
Dormant company – financing company that
held Senior Secured Notes that were repaid
in 2017
Holding company
Luxury sports car distributor
Dormant company
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
Non-trading company
Provision of engineering and sales and
marketing services
Dormant company
Luxury sports car distributor
Dormant company
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
AMWS Limited**◊
Aston Martin Works Limited**
Ordinary
50%***
Ordinary
50%***
Holding company
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. The individual results, aggregate assets and aggregate liabilities included within the Consolidated Financial Statements are summarised on pages 164-168
Incorporated in the People’s Republic of China
210
ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
32 Group companies continued
Total assets
Total liabilities
Net assets
Revenue
Profit before tax
Group’s share of profit
Aston Martin
Works Limited
2022
£m
AMWS Limited
2022
£m
Aston Martin
Works Limited
2021
£m
AMWS Limited
2021
£m
42.5
(3.8)
38.7
40.6
1.7
0.9
–
–
–
–
–
–
42.5
(5.5)
37.0
53.5
4.6
2.3
–
–
–
–
–
–
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
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
Floor 22, 11 West 42nd Street, New York, NY, 10036-8002,
United States of America
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
Aston Martin Lagonda Pension Trustees Limited
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
Aston Martin Lagonda Limited
AM Brands Limited
Aston Martin Lagonda of Europe GmbH
AML Overseas Services Limited
Aston Martin Lagonda (China) Automobile Distribution Co., Ltd
AM Nurburgring Racing Limited
Aston Martin Japan GK
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
Unit 2901, Raffles City Office Tower, No. 268 Xi Zang Middle Road,
Huangpu District, Shanghai, China 200001
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
1-2-3 Kita-Aoyama, Minato-ku, Tokyo 107-0061, Japan
Aston Martin Lagonda – Asia Pacific PTE Limited
8 Marina View, # 41-05, Asia Square Tower 1, Singapore 018960
AMWS Limited
Aston Martin Works Limited
28 Esplanade, St Helier, Jersey, JE2 3QA
Banbury Road, Gaydon, Warwickshire, England, CV35 0DB
211
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Notes to the Financial Statements continued
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 EBIT 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 12 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.
Income Statement
Loss before tax
Adjusting operating expenses (note 5)
Adjusting finance income (notes 5, 7)
Adjusting finance expense (notes 5, 8)
Adjusted loss before tax (EBT)
Adjusted finance income (note 7)
Adjusted finance expense (note 8)
Adjusted operating loss (EBIT)
Adjusted operating margin
Reported depreciation
Reported amortisation
Adjusted EBITDA
Adjusted EBITDA margin
2022
£m
(495.0)
23.9
(12.5)
32.6
(451.0)
(3.0)
336.1
(117.9)
(8.5%)
88.8
219.3
190.2
13.8%
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%
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Financial Statements continued
* Earnings per ordinary share has been adjusted to reflect the bonus element of the rights issue undertaken in September 2022. See notes 11 and 26
33 Alternative performance measures continued
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)
Net debt
Opening cash and cash equivalents
Cash inflow from operating activities
Cash outflow from investing activities
Cash inflow/(outflow) 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 from operating activities
Cash used in investing activities (excluding interest received)
Interest paid less interest received
Free cash flow
2022
£m
2021
Restated*
£m
(528.6)
(191.6)
44.0
–
(484.6)
424.7
(114.1p)
(484.6)
424.7
(114.1p)
2022
£m
418.9
127.1
(284.7)
315.0
7.0
583.3
0.3
(31.9)
(8.3)
(231.8)
327.1
(70.9p)
(231.8)
327.1
(70.9p)
2021
£m
489.4
178.9
(184.1)
(66.5)
1.2
418.9
1.8
(1,211.1)
(1,189.2)
(99.8)
(38.2)
(765.5)
190.2
4.0x
2022
£m
127.1
(286.9)
(139.0)
(298.8)
(103.4)
(19.7)
(891.6)
137.9
6.5x
2021
£m
178.9
(185.2)
(116.9)
(123.2)
213
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Strategic report
XX
Corporate Governance
XX
Parent Company Statement of Financial Position
Financial Statements
XX
as at 31 December 2022
Parent Company Financial Statements
Non-current assets
Investments
Current assets
Debtors: amounts falling due within one year
Total assets
Current liabilities
Creditors: amounts falling due within one year
Net assets
Capital and reserves
Share capital
Share premium
Capital redemption reserve
Capital reserve
Merger reserve
Retained earnings
Shareholder equity
31 December
2022
£m
31 December
2021
£m
Notes
3
4
5
6
6
6
6
957.4
957.4
1,357.6
2,315.0
713.7
1,671.1
(213.5)
2,101.5
(219.1)
1,452.0
69.9
1,697.4
9.3
2.0
143.9
179.0
11.6
1,123.4
9.3
2.0
143.9
161.8
2,101.5
1,452.0
The Financial Statements were approved by the Board of Directors on 28 February 2023 and were signed on its behalf by
Amedeo Felisa
Chief Executive Officer
Company Number: 11488166
Doug Lafferty
Chief Financial Officer
The profit on ordinary activities after taxation amounts to £17.2m (2021: profit of £34.9m).
214
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Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Financial Statements continued
Parent Company Financial Statements continued
Parent Company Statement of Changes in Equity
Company
At 1 January 2022
Total comprehensive income
for the year
Profit for the year
Total comprehensive income
for the year
Transactions with owners
recorded directly in equity
Issuance of new shares
Total transactions with owners
Share
capital
£m
11.6
Share
premium
£m
1,123.4
Capital
redemption
reserve
£m
9.3
Capital
reserve
£m
2.0
Merger
reserve
£m
143.9
Retained
earnings
£m
161.8
Total
equity
£m
1,452.0
–
–
–
–
58.3
58.3
574.0
574.0
–
–
–
–
–
–
–
–
–
–
–
–
17.2
17.2
17.2
17.2
–
–
632.3
632.3
At 31 December 2022
69.9
1,697.4
9.3
2.0
143.9
179.0
2,101.5
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
–
–
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
215
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Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Notes to the Parent Company Financial Statements
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
28 February 2023 and the Statement of Financial Position
was signed on the Board’s behalf by Amedeo Felisa and
Doug Lafferty. 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 are shown in note 22 to the
Group Financial Statements.
The Group meets its day-to-day working capital requirements
and medium term funding requirements through a mixture
of $1,143.7m of First Lien Notes at 10.5% which mature in
November 2025, $229.1m 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 to 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 2024 (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 the 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, the Directors 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 more than 35% 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 (2021: £nil)
in Other Comprehensive Income. The fee relating to the audit
of these Financial Statements of £0.3m was borne by the
Company (2021: £0.3m).
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Strategic report
Corporate Governance
Financial Statements
XX
XX
XX
Financial Statements continued
Notes to the Company Financial Statements continued
Notes to the Parent 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 the financial reporting
requirements and disclosure exemptions in the individual
Financial Statements of qualifying entities that otherwise apply
this recognition, measurement and disclosure requirements
of UK adopted IFRS.
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’.
• Disclosures in respect of the compensation of key
management personnel as required by paragraph 17
of IAS 24 ‘Related Party Disclosures’.
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.
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:
It was concluded that the value of investments at the reporting
date (£957.4m) are recoverable owing to the Group’s market
capitalisation of £1,076.4m at 31 December 2022.
•
•
The requirements of paragraphs 45(b) and 46 to 52 of
IFRS 2 ‘Share-based Payment’ in respect of group-settled
shared based payments.
The requirements of paragraphs 91 to 99 of IFRS 13
‘Fair Value Measurement’ and the disclosures required
by IFRS 7 ‘Financial Instruments: Disclosures’.
The accounting policies set out herein have, unless otherwise
stated, been applied consistently to all periods presented in
these Financial Statements.
Auditors remuneration
Auditors remuneration has been included in the group
accounts. The Group accounts are required to comply
with regulation 5(1)(b) of the Companies (Disclosure of
Auditor Remuneration and Liability Limitation Agreements)
Regulations 2008
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 £24.8m (2021:
£36.0m) has been recognised.
217
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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.
2 Directors’ remuneration
The Company has no employees other than the Directors.
Full details of the Directors’ remuneration is given in the
Directors’ Remuneration Report.
3 Investments
Cost and net book value
At 1 January 2022
Additions in 2022
At 31 December 2021 and 31 December 2022
957.4
–
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 to
the Group Financial Statements.
4 Debtors
Amounts due from Group undertakings
Other receivables
Total
2022
£m
1,357.3
0.3
2021
£m
713.7
–
1,357.6
713.7
Amounts owed by group undertakings are unsecured, interest
free, have no fixed date of repayment and are repayable
on demand.
5 Creditors
Amounts due to Group undertakings
Accrued expenses
Derivative option over own shares
2022
£m
187.9
2.9
22.7
213.5
2021
£m
187.9
0.2
31.0
219.1
Amounts owed to group undertakings are unsecured, interest
free, have no fixed date of repayment and are repayable
on demand.
Share warrants
As part of the issue of the Second Lien SSNs by Aston Martin
Capital Holdings Limited, the Company issued share warrants
enabling warrant holders to subscribe for a number of ordinary
shares in the Company at the subscription price of £1.67 per
share (previously £10 per share prior to the rights issue in
September 2022). 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 £8.4m has been recognised in the year
ended 31 December 2022 (2021: credit of £34.1m). No
warrants were exercised in the current year. A total of
30,518,600 warrants were exercised in the prior year ended
31 December 2021 resulting in the issuance of 1,525,926
ordinary shares (note 6).
6 Capital and reserves
Allotted, called up and fully paid
£m
698,757,075 shares of 10.0p each (2021:
116,459,513 ordinary shares of 10p each)
2022
£m
2021
£m
69.9
11.6
On 28 September 2022 the Company issued 559.0m ordinary
shares by way of a rights issue. The shares were issued at 103p
raising gross proceeds of £575.8m, with £55.9m recognised as
share capital and the remaining £519.9m recognised as share
premium. Share premium is reduced by £21.6m reflecting
transaction fees paid of which £2.9m or accrued as at
31 December 2022. Due to the shares being issued at
substantially below market price, a bonus issue is deemed
to have taken place. A total of 211.6m shares issued were
considered bonus shares. A capital redemption reserve of
£9.3m was recognised when deferred shares were repurchased
during the 2020 capital reorganisation of the Company.
Merger reserve
On 26 June 2020 the Company issued 304.0m ordinary shares
through a non-pre-emptive placing and retail offer. The shares
were issued at 50p raising gross proceeds of £152.1m, with
£2.7m recognised as share capital and the remaining £149.4m
recognised as merger reserve. The merger reserve is used
where more than 90% of the shares in a subsidiary are acquired
and the consideration includes the issue of new shares by the
Company, thereby attracting merger relief under the
Companies Act 2006. The merger reserve value was reduced
by £5.4m of transaction costs associated with the equity raise.
Capital reserve
The capital reserve of £2.0m arose from the share-for-share
exchange on the acquisition of the entire share capital of
Aston Martin Holdings (UK) Limited in 2018.
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Corporate Governance
Financial Statements
Further Information
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Further Information
Glossary
Adjusted EBITDA
Removes depreciation, loss/(profit)
on sale of fixed assets and amortisation
from adjusted operating profit/(loss)
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
APM
Alternative Performance Measures;
for detail of the measures adopted see
note 33 to the Financial Statements
ASP
Average Selling Price
BEV
Battery Electric Vehicle
Core
The Company’s models in ongoing
production excluding Specials.
These currently comprise Vantage,
DB11, DBS and DBX
D&A
Depreciation and Amortisation
EBITDA
Earnings before interest, tax,
depreciation and amortisation
GRI
Global Reporting Initiative
GT
Grand Tourer, a sports car with two
front seats plus smaller rear seats
HNWIs
High Net Worth Individuals
HY
Half year
EPS
Earnings per share
ICE
Internal combustion engine
ERP
Enterprise resource planning
IFRS
International Financial Reporting Standards
ESG
Environmental, social and governance
IPO
Initial Public Offering
EY
Ernst & Young LLP, the Company’s
current External Auditor
Fixed Marketing or FM
Explicit marketing costs incurred
directly by the Company, such as
hosting launch events
FRC
Financial Reporting Council
KPIs
Key Performance Indicators
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
Free Cash Flow
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
MBAG
Mercedes-Benz AG
NED
Non-executive Director
Carbon neutral
Carbon neutral means that any CO2
released into the atmosphere from a
company’s activities is balanced by an
equivalent amount being removed
FTSE
Financial Times Stock Exchange
FY
Financial year, full year
Consensus
The mean of all current financial forecasts
published by equity research analysts
following the Company
GHG
Greenhouse gas
GPG
Gender Pay Gap
Net debt
Current and non-current borrowings
in addition to inventory financing
arrangements and lease liabilities
recognised following the adoption of
IFRS 16, less cash and cash equivalents,
cash held not available for short term use
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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 neutralising any residual emissions
at the net-zero target year and any
GHG emissions released into the
atmosphere thereafter
OEM
Original equipment manufacturer
OSHA
Occupational Safety and
Health Administration
SBTi
Science Based Targets initiative
UHNWI
Ultra-High Net Worth Individual
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
V8, V12
An eight-cylinder internal combustion
engine; a twelve-cylinder internal
combustion engine
SID
Senior Independent Director
SONIA
Sterling Overnight Index Average
SOX
Sarbanes-Oxley Act
PHEV
Plug-in Hybrid Electric Vehicle
Specials
Vehicles produced in limited numbers
PIK
Payment-in-kind interest, whereby
interest on a bond is paid by scrip issuance
of further bonds, rather than in cash
Speedster
A barchetta-style car without
roof or windscreen
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, MBAG dated
27 October 2020 and the Public Investment
Fund dated 29 July 2022 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
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
and Mathematics
SUV
Sports Utility Vehicle
TCFD
Task Force on Climate-related
Financial Disclosures
TSR
Total shareholder return
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Financial Statements
Further Information
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Further Information continued
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:
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.
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 +44 333 207 5973
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 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. There were no warrants exercised during
the financial year ended 31 December 2022.
Further information on the warrants is set out in the combined
prospectus and circular dated 18 November 2020.
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 020 7930 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.
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.
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/.
The voting results for the 2023 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.
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.
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ASTON MARTIN LAGONDA ANNUAL REPORT AND ACCOUNTS 2022
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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