Inchcape plc ($INCH)

Well, good morning, everyone. I'm Duncan Tait, Group CEO; and I'm joined by our Group CFO, Adrian Lewis. Here's today's agenda. I'll give an update and overview on market -- end market context. Adrian will then run through 2025 results, and I'll sum up and discuss the outlook for 2026. Today's presentation is available on our website and a recording of today's session will be available later today. After the presentation concludes, we'll take your questions. So let's begin. Inchcape delivered a strong 2025 performance against the backdrop of tariff-related disruption and economic uncertainty, reaffirming the strength of our diversified and scaled business. Our colleagues in the Americas and the Europe and Africa regions posted record PBT performances. Against a number of challenges, APAC delivered a better H2 performance, and we're working with our OEM partners and across the value chain to drive further performance improvements. We continue to execute against our Accelerate+ strategy, winning more distribution contracts and executing an acquisition in a new market for Inchcape. During the year, we returned around GBP 340 million to shareholders through dividends and buybacks, grew EPS and DPS by 13% and with leverage of just 0.4x, we're ready to go again in 2026, starting with a new share buyback program of GBP 175 million. Now this slide shows how we delivered against all of our key growth drivers on the left-hand side of this chart. That includes the financial metrics I mentioned, including our resilient margins, as well as vehicle volumes, customer and colleague related metrics. And on those dynamics, we continue to build on our strong customer reputation in the industry with a 6% increase in our scores on reputation.com. In addition, our employee engagement score of 81%, up 4 points from the previous year, is a clear signal of Inchcape's collaborative, entrepreneurial and high-performance culture, which is a testament to the caliber and talent of our 16,000 people across our 40 markets. Last year, we generated GBP 315 million in free cash flow, which clearly highlights our cash generative and capital-light model. This capital was deployed to drive growth and shareholder returns with a 13% increase in dividends per share, GBP 238 million invested in share buybacks and GBP 35 million utilized on the Iceland acquisition. And we have a healthy pipeline of bolt-on M&A opportunities in place to supplement our organic growth. This delivery of our strategy enabled us to deliver return on capital employed of 29% and helped us grow EPS by 13%. And we continue to execute against our Accelerate+ strategy by scaling and optimizing our regions. Our objective here is to develop our OEM partner portfolio and geographic footprint, thereby enhancing the resilience in our earnings profile. And this will help to drive our progress against our ambition to achieve 10% market share across our markets. Last year, we grew distribution contracts won in previous years. with these contracts being a key driver of our organic revenue growth. We're also awarded 10 new distribution contracts with existing OEM brands, including New Holland and Ethiopia in Kenya, BYD in Lithuania and Latvia, expand in Colombia and GAC AION in Greece as well as new partners, smart in Colombia, Uruguay and Ecuador and Iveco in Hong Kong. To drive operational execution, we continue to optimize our business in a number of ways. Firstly, we further rationalized our brand portfolio mutually exiting 4 immaterial contracts with Komatsu in Ethiopia and 3 Geely contracts in smaller markets in the Americas. In addition, we continue to recycle capital by divesting nonCore assets, and we grew our third-party retail network, enabling broader in-market coverage in a capital-efficient way. We continue to drive the penetration of value-added services, in particular, growing our distribution of relatively high-margin OEM-certified parts as well as delivering and developing financed insurance products by utilizing our global scale and partnerships. We also optimized our business by further collaborating with our OEM partners on product and inventory management, supported by our consistent execution and differentiated technology-based sales and operation planning processes. To that end, we positioned ourselves well for the second half of the year from a stock perspective, successfully reducing the buildup of inventory in the first half with inventory cover at the end of 2025, remaining flat year-on-year. Our sales and operational planning processes are supported by AI in a number of areas. In our parts business, we run pricing optimization and demand models, which enable us to trade tens of thousands of parts [ are ] optimal price points. We're also leveraging AI to drive innovation across our business. For example, we recently launched a vehicle pricing algorithm in Chile, which analyzes price to volume elasticity to ensure we price vehicles even more accurately. Back to our optimization activities. We've also taken decisive action on our cost base, reinforcing our devolved operating model, driving efficiencies and tackling challenges in certain markets. To that end, during the year, we initiated a cost reduction program across the group, with a particular focus on the APAC region. Next, I want to discuss our diversified and scaled OEM portfolio. We have long-standing relationships with many OEMs, some of which go back for over 50 years. Our role in the automotive distribution value chain is more important than ever. We continue to support these manufacturers in an increasingly complex and fast-moving environment, growing their volumes and market share in existing markets and helping them to enter new markets. We also have some relatively new OEMs in our portfolio on the right-hand side of this slide who we've worked with for just a few years. Of those, I wanted to highlight that we are seeing BYD continuing to in-source distribution in medium to large scale markets in Europe. This is a BYD only dynamic, and we are seeing our other OEM partners rely on Inchcape more than ever before. On the next slide, here is some market context in what was a transforming automotive industry in 2025. In general terms, the new energy vehicle transition is becoming more of a multi powertrain story. Importantly, as a powertrain agnostic business and with our deep specialist market knowledge, Inchcape is well positioned to support our OEMs in their individual new energy transition journeys. Overall, market volumes across our markets grew by 2% in 2025 with the indirect impact of tariff-related disruption affecting demand in our markets in the first half of the year. Inchcape outperformed the market, growing our volumes by 3%. The macro environment improved in the second half in a number of our markets, particularly in the Americas and the Europe and Africa Regions, offsetting a challenging backdrop in Asia. In the Americas, market volumes were up 8%, with a multi-dritrain approach playing out. In Chile, our largest market there, there was a 3% TIV growth during the year with a stable market environment. Colombia and Peru experienced strong market growth, while there was a weaker growth in some markets like Costa Rica. In Europe, another multi drivetrain story. Southern European markets like Greece and Bulgaria remained strong, while there was weakness in certain Northern European markets like Finland and Estonia. In APAC, BEV adoption continued to accelerate, partly as a result of the successful rollout of BEV in Asian markets, Chinese brands have grown market share across the region in recent years. These dynamics have created a highly competitive environment in most markets in the region. In addition, the premium segment in APAC remains weak with consumers in that market segment continuing to hold off on buying higher-value vehicles. To date, we've not seen any similar weaknesses in the premium segment in our other regions. Finally, on APAC, Australia, one of the largest vehicle markets in which we operate remains resilient but it is an increasingly competitive environment. That's it from me for now. I'll hand over to Adrian.

Thank you, Duncan, and good morning, everyone. I'll take you through our results for 2025. We generated revenues of GBP 9.1 billion with organic revenue growth of 1% and resilient operating margins of 6.2%. Distribution contract wins were a significant portion of growth during the year. Adjusted PBT was GBP 443 million, up 3% in constant currency. And our PBT performance was supported by a contribution of GBP 17 million from the gains arising from the divestment of non-core assets, while translational currency headwinds were approximately GBP 19 million. Excluding the disposal gains, our operating margins were 6% and in line with our medium-term targets. Return on capital employed was again very strong at 29%, highlighting the high return, capital-light nature of our business. Free cash flow delivery was a highlight as we produced GBP 315 million with a stronger performance in the second half and this was 104% free cash flow to adjusted profit after tax conversion rate and in line with our medium-term targets. Closing leverage was 0.4x, down from the 0.6x at the half year, and well within our self-mandated headroom of 1x. Adjusted basic EPS was GBP 80.8p, up 13%, predominantly as a result of a lower share count from our share buybacks. And today, we declared a final dividend per share of GBP 22.8p taking the total dividend per share for the year to GBP 32.3p up 13% from the prior year. So in summary, our performance in 2025 was a reflection of our continued operational delivery and progress against Accelerate+, which ensured we continued to deliver value for shareholders. 2025 was a year of 2 halves, and as expected. And as we highlighted during the course of 2025, our second half performance was much stronger than the first half, supported by a wide range of product launches across our business. And as a result, we saw stronger half 2 growth rates across our regions, supported by product launches. And subsequently, our volumes and revenues swung from negative growth in half 1 to positive growth in half 2, helping to drive profits and cash flow in the second half. And for the year, we delivered organic volume growth of 3%, outperforming the market, which grew by 2%. And as a reminder, we have published our usual market tracker today, which shows the key market trends. Now let's look at each of the regions, starting with the Americas. We built positive momentum in the region during 2025, supported by improving market conditions, our excellent performance and our growth profile in the region highlights the success of our acquisition of Derco in 2022, as well as the other historic acquisitions and contract wins in the region. These transactions have helped us to build scale and market share and as key markets have turned to growth, we have similarly seen a stronger performance. Market volumes and organic revenue were both up 8%, with growth from our core brands, offsetting the impact of the brands we exited in 2024, and this ensured we achieved stable market share across the region. There was a strong performance in our scale markets, including Chile, Colombia and Peru, offsetting the weakness in certain markets like Costa Rica. Operating margins were up 70 basis points to 7%, and this reflected resilient gross margins and operating leverage from higher volumes. In addition, we continue to efficiently scale our business through cost discipline and capital recycling with an GBP 8 million contribution to profits from nonCore asset divestments. And for 2026, we expect the market environment to remain supportive with the typical seasonal weighting towards the second half result in a profitable growth for the year. In APAC, our market volumes, which were down 1%, our organic revenue declined 12%. As expected, our second half performance was an improvement on the first half as a result of product launches. In Australia, our largest business in the region, it is increasingly competitive, and our business remained resilient, supported by our growing and diversified brand portfolio. However, we underperformed in our Asian markets. with a proliferation of Chinese brands increasing the competitive intensity, particularly in markets where BEV penetration is high. And additionally, in some markets, the premium segment remained weak. And as a result of lower revenues, operating margins contracted by 60 basis points to 7.2% despite a GBP 9 million contribution to profits from non-core asset divestments in half 2. Actions were instigated during the year to protect margins, including our enhanced collaboration with our OEM partners on product positioning. We also initiated a cost reduction program focus on the regional headquarters and certain underperforming Asian markets to ensure we are more agile in a fast-moving and dynamic environment. For 2026, Australia is expected to remain stable, but challenges in other markets in the region are expected to continue. We expect operating margins this year to be supported through the ongoing implementation of the management actions I mentioned. And additionally, production disruption is expected to impact certain APAC markets in half 1. This disruption relates to production reconfiguration by some of our OEMs, which will have a short-term impact on supply. On to Europe and Africa, where we again delivered well and outperformed in a growing market. Market volumes were up 3%, with our organic revenue growth ahead of the market at 6%, supported by a contribution from distribution contracts won in recent years. And as Duncan mentioned earlier, BYD continues to in-source automotive distribution in medium to large scale markets in Europe. We have a contract with them in Belgium and Luxembourg, which contributed less than 5% of regional revenue and around 1/3 of our 6% regional organic growth. At a group level, this contract represents less than 2% of group revenue and less than 1% of group adjusted PBT. So it's a financially immaterial contract in the context of the group and the region. And while we have performed well for BYD in Belux since our appointment in '22, given the commercial approach in medium to large scale markets in Europe, we do not anticipate that this contract will be renewed. It expires in Q3 '27. Our role in the value chain is a critical part of our OEMs access markets where we specialize. And as Duncan mentioned, we are not seeing other similar moves by other OEMs. Now back to my regional review of Europe and Africa. Our acquisition in Iceland is performing well, and there was a particularly strong performance across our business in Southern Europe, supported by good consumer take-up of a range of hybrid products and strong growth in the market. Africa continued to grow through distribution contract expansion. Operating margins were down 10 basis points to 4.6%, but in line with historical norms, with gross margin resilience and operating leverage from scale offsetting the initial dilution from immature distribution contracts. During 2026, growth rates are set to slow in certain markets, which will be partly offset by the full contribution of Iceland as well as continued operational execution and momentum across the region and the growing contribution from the multiple contracts won in recent years. And on to our financial performance, and this slide shows our income statement. We delivered adjusted operating profit for the year of GBP 563 million, down 1% in constant currency. Regional mix impacted gross margins, but this was largely offset by the continued cost discipline, where our overhead to revenue ratio fell by 20 basis points. Adjusted net finance cost decreased by GBP 19 million to GBP 123 million, driven by lower average net debt and a more favorable interest rate environment. Adjusting items amounted to an expense of GBP 37 million, and this was primarily driven by one-off costs relating to acquisition and integration of GBP 10 million. mainly in relation to the final stages of the Derco integration. And there were also restructuring costs of GBP 23 million, broadly split evenly between the cost reduction actions that I mentioned earlier, and the continuation of our back office restructure following the U.K. disposal. And adjusted PBT was GBP 443 million, 3% higher on a constant currency basis and the effective tax rate was flat to 31.4%. Adjusted basic EPS was up 13% to 80.8p and up 17% in constant currency, so well ahead of our medium-term target. And this was supported by a reduced number of shares in issue as a result of the share buyback programs executed during the year and the effect of averaging from the buyback program in 2024. Now this slide shows our net debt bridge. Inchcape has a strong balance sheet supported by consistently strong free cash flow generation, which ensures we can execute a disciplined approach to capital allocation. having generated over GBP 300 million in free cash flow. Dividend payments amounted to GBP 101 million, and share buybacks amounted to GBP 238 million as we executed our capital allocation policy. There was net M&A spend of GBP 29 million, including the GBP 35 million in cash invested in the Iceland deal. And the net of these elements saw leverage fall to 0.6x EBITDA down from the 0.6x seen at the half year, providing the group with capacity to continue to allocate capital to drive growth and shareholder value, which brings me to our capital allocation approach, which remains disciplined and returns based. We will continue to pay dividends at 40% of earnings. We will continue to act with discipline in the balance of capital allocation between the value accretion from share buybacks and value-accretive acquisitions whilst running leverage below 1x EBITDA. And having completed the Iceland deal last year, we will continue to activate our healthy pipeline of bolt-on acquisitions, acting with discipline on valuations. We see merit and strategic value in expanding the scale of the group. However, a large deal is not currently in our consideration set in the near term. And since August 2024, we have repurchased GBP 400 million in shares through our share buyback program, reducing our shares in issue by around 13%. And today, we are announcing a new share buyback program of GBP 175 million, which is expected to complete over the next 12 months. And it is worth noting that if the 2025 buyback program, where we repurchased 9% of our equity, only around half of this has been recognized in EPS with the effect of averaging, and this will provide a tailwind to EPS for 2026 of around 4% to 5%. Our capital allocation policy will help to drive EPS growth and deliver further value for shareholders, whilst retaining the capacity to expand through acquisitions. So to sum up my section here is a reminder of our medium-term targets, which we are reiterating today. To the end of 2030, we expect to generate GBP 2.5 billion in free cash flow. We will deploy this free cash flow to drive shareholder value with a consistent dividend policy and in excess of 10% compound growth in EPS. So that's it for me. I'll now hand back to Duncan.

Thanks, Adrian. So I wanted to give you a midterm review of how we have transformed Inchcape's investment proposition over the last 6 years, driving growth and value for shareholders. Over that period, we have become a pure-play automotive distribution business, divesting of a number of retail-only assets and ensuring our business is more resilient, higher margin and generating better returns and more cash. Over decades, we have built an unrivaled diversified portfolio of global OEM partners, winning over 50 contracts with a range of the world's best manufacturers since 2019. As a distributor, our powerful commercial relationships with these partners operate across global, regional and local levels. We have continued to deliver a strong performance for them, supported by our differentiated data-driven approach, nearly doubling our distribution revenues. We've also delivered a 200 basis point improvement in our operating margins from 4% in 2019 to 6% today, increasing return on capital employed over that period from 22% to 29%. Driven by this growth and strategic focus, we've generated GBP 2.3 billion in total free cash flow and raised around GBP 900 million in cash from the divestment of non-core retail-only assets. This has enabled us to return GBP 1.3 billion to shareholders through dividends and buybacks, while we continue to invest in value-accretive acquisitions EPS grew 35% over the period. And I hope that by reinforcing our track record of delivery, this gives you a sense of what we expect to deliver in the coming years as a capital-light automotive distribution pure play. We have a compelling capital allocation policy and clear medium-term operation and financial ambitions, which we are very confident of delivering against. And to that end, as a management team, we're extremely excited about the future for Inchcape. Now this is a reminder of our Accelerate+ strategic framework and that enabled our performance as we continue to scale and optimize our business. And we will continue to deliver against our medium-term ambitions, supported by our strategic enablers outlined here. So finally from me today, onto the outlook for 2026. We expect to deliver a year of growth at constant currency, in line with our medium-term guidance. This will be achieved by the delivery of organic volume growth towards the lower end of our 3% to 5% guidance range, supported by contract wins. We expect continued momentum in the Americas and Europe and Africa regions, while we are decisively addressing the challenges in APAC. We expect to deliver resilient operating margins of circa 6% this year, in line with our medium-term guidance, supported by further penetration in after sales and finance insurance, enhanced collaboration with our OEM partners and our actions on cost reduction. We also expect to deliver free cash flow conversion of circa 100% and EPS growth of more than 10%. Our performance this year will be skewed to the second half due to usual seasonality in the Americas and supply chain phasing in APAC. We also reiterate our medium-term targets, which will be delivered through our highly cash generative and capital-light business model and a disciplined approach to capital allocation to deliver greater than 10% EPS CAGR to the end of 2030. So just to sum up, Inchcape delivered a strong 2025 performance, reaffirming the strength of our diversified and scaled business as we continue to execute against our Accelerate+ strategy. We expect to deliver another year of growth in 2026, and our confidence about our prospects for the year is underlined by our new GBP 175 million share buyback program.

Great. Well, let's take your questions. Thanks very much all the questions so far. And for those of you who want to ask a question, you just can just type it in the Q&A box on the top hand right of your screen. First question is around AI. I think this is for you, Duncan. Can you just talk a little bit about how we're using AI within the business? And do we see it as a threat or opportunity?

Very good. Thank you, Rob. So we use AI in 2 ways. We've been using machine learning for some time and machine learning issues right throughout the business to price parts. So we have tens of thousands of parts in our markets, which AI is pricing for us. AI is also helping us with a machine learning sense to determine what part holding will have in a country and what vehicle volume we should request from OEMs to serve demand in a particular market. Now if I talk then about GenAI. So we're using GenAI in a number of ways. It produces a lot of our marketing material in places like the Americas, we're using GenAI in certain places to engage with customers around service booking and which models people might be interested in. And we are also using it in our functions across the business such as legal. Now in terms of is it an opportunity or a threat, I think for us, Rob, it's an opportunity to continue to improve customer satisfaction improve the way we work with our OEM partners and the way we deliver our financial results.

Right. Quite a few questions on capital allocation, Adrian, particularly on the buyback. I'll try to aggregate them as much as possible, but can you discuss around the buyback? How do you think about it in terms of valuation share price? How do you think about it in terms of paying down debt and if the share price stays at the same level this time next year, what would be your thinking around buybacks?

Thank you very much. Robin, thank you for the question. A lot to unpack there. So if I look back on last year's share buyback, which -- as most of you will all know, it was around GBP 250 million. We bought -- we deployed around GBP 238 million of that within 2025 specifically. And over the program, we bought back 9% of our equity, and that takes us to about 13% of our equity since August 2024. I think I look back on that overall program as an excellent use of capital for shareholders. It provides a good return. And we think in the low to mid-teens from a post-tax return on invested capital or a PRR for our investors. And so it's a good use of cash. If I think about where it sits against leverage, we started the year at 0.3x for 2025. It went up a little bit about half year to 0.6x and then came back down to around 0.4x. So the balance sheet is in good shape at only 0.4x leverage. We have capacity to continue to invest. And then I think about the GBP 175 million buyback that we have announced for 2026. Think about it in the context of the free cash we're going to generate. We start the year having generated GBP 315 million of free cash flow last year. We have continued to guide consistently as we have done in our medium-term guidance, profit after tax to cash at 100%. And so a similar, if not slightly larger number for 2026, dividend flows, we expect to be about GBP 110 million. After GBP 175 million, the balance sheet retains its capacity to invest in inorganic growth through acquisitions, which is consistent with our -- with our capital allocation policy. And really, as I said in the video on last Tuesday, this is a returns-based equation. We look for optimum use of shareholders' funds. We are very pleased with that Askja acquisition in Iceland in '25. We think the pipeline is healthy for 2026, but we'll continue to be disciplined. And then longer term, I'd point you back to our medium-term guidance. Free cash flow at 100% of profit after tax. We'll continue to pay 40% of EPS and dividend flows and we'll continue to deploy the balance in either share buybacks or acquisitions based on whichever is the best returning -- return for our shareholders.

Thanks, Adrian. And on a follow-up, and maybe this is for both of you actually, on M&A, can you just talk a little bit about the pipeline and the prospects for deals in the next 12 months?

Sure. Do you want me to go first?

Go for it.

So as we said last Tuesday, the APAC team have got some work to do, but we can have a healthy pipeline across our Europe and Africa business and our Americas very much shifted to bolt-ons, we saw value in the Iceland acquisition to Adrian's point relative to share buyback returns. So if we see value for M&A with the right OEMs in the right country, subject to where our share price is, then it would make sense to activate our pipeline.

Yes. Just from a geography perspective, focus more in Europe and Africa, focused more in Latin America. And Asia Pac, we're focused more on operational execution in the near term. And so that's the area of focus for the pipeline.

A couple of questions on Chinese manufacturers. Firstly, is the BYD in sourcing? Is that something that we could see from other players? First question. Second question is around oversupply from Chinese OEMs and how that's impacting our markets and could it impact it even further going forward? And the third question is, do we see any opportunities with Chinese OEMs going forward?

Right. So 3 questions. Keep me honest, Rob, but I do answer questions. So do we see Chinese OEMs as an opportunity or a threat? I see them as an opportunity for our business. We've won over 50 contracts in the last few years. 70% or more have been with Chinese OEMs. And I think we'll continue to get some contract wins for the business over time, Rob. And then we've been a big part of Chinese OEM growth, particularly post the Derco acquisition we made in Latin America which gave us 20-year-plus relationships with OEMs. So your BYD point, look, we don't see our other Chinese OEMs, bringing back in-house distribution contracts. And I'll go back to what I just said about contract wins, the majority of those contract wins with Chinese OEMs that we have a relationship with. Remind me about the last question.

The oversupply and the impact on our markets.

Yes, sure. So there has been a pretty aggressive expansion by Chinese OEMs overseas. But it's also clear at the same time that the China market itself has been very difficult for Chinese OEMs in terms of their ability to make money and their dealer networks. And when I'm talking to Chinese OEMs, they are talking about making sure they don't replicate that outside of China, losing money in China and then outside would not be a good blend. Now in terms of oversupply, I go back to what I said about AI, we are absolutely using our sales and operations planning processes and AI to make sure that we land the right amount of stock into a market. You don't have excess inventory. Now we can't legislate for what others do, but I guarantee you we will look after our own inventory levels in markets because that's good for margins.

Very good. Thank you, Duncan. Next question is around the current global environment. And given the uncertainty and the volatility, if the car market went into a downturn tomorrow, how resilient would Inchcape be?

You could answer this.

Yes. Okay. Yes, very happy to. I mean, if you stand back and look at the car market that we operate in, the global market is about 90 million cars. The majority of those cars are sold through the large markets of the world, such as the U.S., Germany, France, the U.K. and these sort of -- and China and these very scaled markets where Inchcape doesn't necessarily have a role to play for our OEM partners. Our job is in the markets that we operate in, more complex at times, lower scale in their nature, places like Colombia, places like Chile, Peru, Indonesia, Philippines, Bulgaria, Greece to name but a few. That's a car market. It's only about 11 million cars in the -- in and amongst the 90 million. And naturally, that market sees more volatility. We look at our end markets and we see markets both growing at 20% a year, but also seeing markets that aren't necessarily seeing any growth at all. So we're used to dealing with volatility in our end markets and our business is structured to accommodate for that. So we have flexibility in how we respond. And if there is a global downturn in the context of the geopolitical environment that we're seeing today, then our business will respond accordingly, we'll flex our cost base will flex our supply and will flex the products we offer it -- offering to our customers to make sure we are most relevant in that particular moment. That's what -- that's our role in the value chain. And that's what we are -- that's why we -- what we are good at doing.

Thanks, Adrian. And a follow-up on FX. How sensitive is the business the currency fluctuations given current global issues and our global footprint?

Yes. So we think about FX in 2 ways, so I'll describe both. Firstly, there's transactional FX on many of our businesses around the world. buy cars in Japanese yen, renminbi, U.S. dollar or euro, the major currencies of the world. And then we sell them in our local currencies, whether it be Colombian peso, Chilean peso, Aussie dollars or euros. And our business takes hedging positions to eradicate effectively the short-term volatility you see because we're of a view philosophically that structural shifts in FX rates, end up in price, be it good or bad news for pricing for consumers in the end market and consumers in our markets understand that. From a -- so effectively, that is all margin agnostic. It's built into our cost of operating. And so you shouldn't see any impact on our trading results. From a translation perspective, part of the Inchcape model is that we have businesses around the world, and that means we have profit centers in different currencies, Australian dollar, euro, U.S. dollar, Chilean peso are our major currencies. And we do give a guide on the translation effect of shifts in those against our reporting currency of the pound. But broadly speaking, a 1% move is the equivalent to a GBP 1 million of translational impact headwind or tailwind. And there is another disclosure in our annual report accounts around those currencies that represent 1% move-up represents around GBP 0.5 million. And we give guidance at the end of every year on the impact of those translational effects on our currency, but it does flow to results, good and bad.

Great. Thank you very much. Another one for you, I think, Adrian, on remuneration incentivization, how invested is the management team and how you remunerated relative to the success of the business?

So I would say that both Duncan and I and the majority of -- and the management team across the group are heavily incentivized around our medium term framework. And you'll note there are a number of components to that medium-term framework, but fundamentally, it's all about driving EPS growth. And some of the changes we've made in recent years are very consistent with that where we have EPS as the lead indicator. We also have free cash flow and return on capital employed, but EPS is the predominant majority of our incentive program. More recently, you'll see some changes that are coming where we'll introduce the TSR measure, which will closer align Duncan and I and the management team's experience with that of shareholders and that's going forward in April for a vote at the AGM and has been consulted through our RemCo Chair with -- directly with some of our shareholders. So I would say, very highly incentivized, very well aligned to our medium-term targets and fully invested.

A couple of questions on EVs. Do you see EV as an opportunity or a threat in the business? And then what are the different rates of EV rollout in the various regions and markets. Maybe that's one for you, Duncan. And then in terms of profitability of EVs, are they more or less profitable for distributors compared to ICE vehicles?

Look, what's very clear is the pace of move a market move to EV is different by market. You see some of our markets with less than 1% EV penetration. You see other markets with 86% penetration with EV. Each moves at a different pace. It's our role to make sure we have a portfolio of brands that is able to move at the pace that the market moves to a lower carbon future. It means we have to have hybrid products and EV products from our OEM partners in each of those markets. So I don't see it necessarily as a threat. We need to make sure that we are moving at the right pace, and it's large about OEM portfolio end markets. .

And profitability. Look, our role is to provide our OEMs with a route to market, whether it be for ICE cars, hybrid cars or EV cars. And our approach with that is very consistent with -- as we brought in different products. So from a margin perspective on vehicles, it's largely agnostic. We are agnostic to those aspects. You tend to find EVs have a slightly higher selling price, but from a percentage perspective, is very consistent. From an aftersales perspective, it's a very important part of our value chain and value equation. There's a few offsets. I think naturally, the amount of gross profit available in the near term on EVs is a bit lower with fewer moving parts. But we expect EVs to stay in the value chain effectively for a longer period of time due to the complexity of them. And those 2 things will offset against each other.

But that dynamic has quite a long way to play out given that only 4% of our sales are EVs.

A couple of more questions. One on medium-term guidance. What's the biggest risk to achieving the 3% to 5% volume growth -- top line growth over the coming years?

Sure. So the 3% to 5% volume growth is made up of 2 components. One, there is market momentum. We think our markets in aggregate will grow between 1% to 2% on a compound basis. That's going to be a mixture of plus 10s and 20s and minus 10s and 20s because we know all of our markets are volatile. And then because of the contracts we've been running, and we've won over 50 of them in the last 3 or 4 years, we would anticipate our market -- our business to outperform as we did last year when our volumes grew 3% in a market that grew 2%. In terms of risks to that, I think, look, the market -- the big component of our growth is going to be the market and how that moves and whilst we accept there's volatility, we also do expect with our markets being typically seeing higher GDP growth environment and lower motorization rates, we do expect them over the longer term to be -- to grow -- and so I would say the biggest risks that is we don't see that growth in our markets and in our broad footprint. But ultimately, this is a diversified business. We've got presence in over 40 markets with an appetite for organic growth and the potential for us to inorganic growth, I should say, and the potential to expand the footprint to create diversification, which will create that sort of growth driver that underpins that 3% to 5% volume growth.

And a couple of more final questions. The share pricing is relatively cheap compared to the cash generated by the business. What do you think the market is discounting or missing in Inchcape?

Look, there's a little bit of uncertainty about global autos, Rob, maybe a little bit about certain emerging markets. Look, fundamentally, if we look inside our company, the midterm targets we put in place in March of last year, so we're going to grow EPS by better than 10% per annum. We have to continue to put scores on the doors. We've delivered year 1 of our Accelerate+ targets. Adrian and I and the team have to come back and do exactly the same in 2026 and '27 and '28 just to reinforce what a great investment proposition this company is. And the reason I say that is, of course, we did see EPS come down a little bit in '24 before it went back up. We have to consistently knock the ball out the park on EPS growth.

Great. And final question. 10 contracts won last year. What's the outlook for contracts going forward when you've got new distribution contracts?

So look, a few things. We have won an awful lot of contracts over the last years. A lot of it, of course, with Chinese OEMs as they have moved out of China pretty aggressively. I think the bulk of those contracts, we've gone through that contracting period. But generally, I'd like us to win high single-digit numbers of contracts each year depending on where we are, but it will be a bit lumpy, Rob. So don't expect us to be winning just under 1 per month to give us our around 10% or so per annum, they are a bit lumpy.

Very good. That was all the questions. Duncan, I don't know if you wanted to sum up for 30 seconds.

Very good. Thanks, Rob. Thank you, Adrian. So we had a good 2025. We delivered EPS growth of 13%. Business, we have good momentum in Europe and Africa, good momentum in the Americas. We've got all sorts of good things going on in APAC to get that business back to where we want it to be, and our objective is to grow EPS by greater than 10% in '26. Thank you.

Thank you.

Thank you to the management team for joining us today. That concludes the Inchcape investor presentation. Please take a moment to complete a short survey following this event. The recording of this presentation will be made available on Engage Investor. I hope you enjoyed today's webinar.