We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Aston Martin Lagonda Global Holdings Plc | LSE:AML | London | Ordinary Share | GB00BN7CG237 | ORD GBP0.10 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -3.00 | -1.95% | 151.20 | 151.30 | 152.20 | 155.20 | 149.60 | 152.50 | 879,980 | 16:35:29 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Motor Vehicles & Car Bodies | 1.63B | -228.1M | -0.2769 | -5.45 | 1.24B |
From Apr 2019 to Apr 2024
TIDMAML
RNS Number : 9199S
Aston Martin Lagonda Global Hld PLC
14 March 2019
14 March 2019
Annual Financial Report
Aston Martin Lagonda Global Holdings plc (the "Company") announces that it has today published its Annual Report and Accounts for the financial period ended 31 December 2018 (the "2018 Annual Report") online and it can be viewed on the Company's website www.astonmartinlagonda.com.
In accordance with Listing Rule 9.6.1R, the 2018 Annual Report has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM.
The 2018 Annual Report will be dispatched to shareholders in due course.
The date for the Company's Annual General Meeting (AGM) and the Notice of AGM will be published on the Company's website and distributed to shareholders in due course.
In compliance with Disclosure Guidance and Transparency Rule ("DTR") 6.3.5, the information in the Appendix below is extracted from the 2018 Annual Report and should be read in conjunction with the Company's Preliminary Announcement issued on 28 February 2019, which can also be viewed at www.astonmartinlagonda.com. Together these constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. This material is not a substitute for reading the 2018 Annual Report in full and page numbers and cross-references in the extracted information below refer to page numbers and cross-references in the 2018 Annual Report.
For further information, please contact:
Aston Martin Lagonda Investors Relations: Charlotte Cowley +44 (0)7771 976764 Press Office: Kevin Watters, Grace Barnie +44 (0)1926 692 019 Teneo Blue Rubicon (public relations advisor to Aston Martin) Tim Burt, Doug Campbell, Haya Herbert-Burns +44 (0)20 7420 3189
APPIX: ADDITIONAL INFORMATION REQUIRED BY DTR 6.3.5
AUDIT REPORTS
The Preliminary Announcement includes a condensed set of financial statements. Audited financial statements for the financial year ended 31 December 2018 are contained in the 2018 Annual Report and Accounts. The Independent Auditors' Report on the Group financial statements and the parent company financial statements is set out in full on pages 149 to 157 of the 2018 Annual Report. The audit report is unmodified and does not contain any statements under section 498(2) or section 498(3) of the Companies Act 2006.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The following information is extracted from page 148 of the 2018 Annual Report.
The directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the group's position and performance, business model and strategy.
Each of the directors, whose names and functions are listed on pages 98 to 101 confirm that, to the best of their knowledge:
-- the financial statements, prepared in accordance with the applicable set of 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; and
-- the strategic report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
PRINCIPAL RISKS
The following information is extracted from pages 80 to 93 of the 2018 Annual Report.
OUR APPROACH TO RISK
The Board is ultimately responsible for oversight of our risk management and internal control systems and it recognises that effective enterprise risk management is essential to executing our strategy to deliver the Second Century Plan, achieving sustainable shareholder value, protecting the brand and ensuring good governance. This includes determining the nature and extent of the principal risks the Board is willing to take in achieving our strategic objectives (the Board's risk appetite), and challenging management's implementation of effective systems of risk identification, assessment, prioritisation and management. We operate a three lines of defence assurance model to manage the ongoing effectiveness of risk and control and to define the relationship between the various management and oversight functions.
The Audit and Risk Committee has been delegated the responsibility for monitoring the effectiveness of the Group's risk management and internal control systems. Ongoing review of these controls is provided through internal governance processes and the work of the Group functions, particularly the work of the Internal Audit and Risk Management Team and the Risk Management Committee. The annual Audit and Risk Committee calendar provides a framework for the ongoing review of these systems and controls by the Committee, particularly through reports provided by our Internal Audit and Risk Management team, the external auditors and opportunities to have "deep dives" to understand the key risks of the business.
Our Internal Audit and Risk Management team maintain the Group's Enterprise Risk Management Framework and System (ERMFS) and co-ordinate risk management activities across the Group. Significant activity was undertaken prior to the IPO to strengthen the Group control environment by embedding the ERMFS to ensure it was appropriate for a public company. We continue to enhance our risk management activity by introducing formal risk mitigation plans, more granular assessments of gross, net and target risk and management and independent Internal Audit assessments of the effectiveness of these plans (see Control Environment on page 115).
Through the ERMFS the following activities will form an integral part of our business and include: annual review and approval of the ERMFS and Risk Management Policy; identifying and assessing gross and net risks for potential impact and likelihood; maintaining corporate and departmental risk registers; undertaking top-down/bottom up risk assessments and designing and implementing risk mitigation plans. The risk mitigation plans will be independently validated on a rotational basis by our Internal Audit and Risk Management team led by the Director of Internal Audit and Risk Management, who reports administratively to the EVP and Chief Financial Officer with an independent reporting line to the Chair of the Audit and Risk Committee. The key governing bodies associated with promoting effective risk management within the Group, and their primary responsibilities for risk management, are shown in the diagram opposite.
Hot Features
Premium
BOARD OF DIRECTORS AND AUDIT AND RISK COMMITTEE
* The Board is responsible for regular oversight of the * Regularly monitor risk status through formal risk * The Board has delegated oversight of the Enterprise
Group's risk management and internal control systems, reporting, risk deep dive reviews and the Risk Management Framework and System to the Audit and
assessing the Group's principal risks and setting the commissioning of assurance reviews to independently Risk Committee which regularly monitors the principal
Group's risk appetite. validate the effectiveness of risk mitigation plans. risks and uncertainties along with management's
strategies to mitigate them.
------------------------------------------------------------ ------------------------------------------------------------
RISK MANAGEMENT COMMITTEE (MANAGEMENT COMMITTEE CHAIRED BY DIRECTOR
OF INTERNAL AUDIT AND RISK MANAGEMENT)
* Reviews external and internal environment for * Meets every two months and reports key findings to * Identifies and assesses changes to risks and monitors
emerging risks. the EVP and Chief Financial Officer. Updates are the effectiveness of mitigation plans to reduce risk
provided to the Audit and Risk Committee. exposure to acceptable levels within our risk
appetite.
* Performs deep dive reviews of principal risks and
challenges risk assessments and mitigation plans. * Cross-functional "Risk Champion" attendees,
encompassing senior management from key departments * Champions effective risk management and control
(e.g. IT, Quality, Technology, Manufacturing, Finance across the Group.
* Holds risk owners accountable for implementing ,
effective risk mitigation plans. Legal, Supply Chain).
------------------------------------------------------------ ------------------------------------------------------------
INTERNAL AUDIT AND RISK MANAGEMENT DEPARTMENTAL RISK CHAMPIONS AND
TEAM RISK OWNERS
------------------------------------------------------------------------------------------------------------------------
* Centrally co-ordinates deployment of the "Enterprise * Perform day-to-day risk management activities.
Risk Management Framework and System".
* Identify and assess risk within their departments and
* Facilitates updates to the corporate and functional implement actions to reduce risk exposure to an
risk registers. acceptable target level.
* Provides resources and training to support risk * Assign owners to risks, maintain departmental risk
management activities. registers and manage "Risk Mitigation Plans".
* Prepares Board, Audit and Risk Committee and Risk * Responsible for establishing an appropriate risk
Management Committee status updates. management culture, and for implementing effective
risk management and internal control within their
department.
* Evaluates the design and operating effectiveness of
risk mitigation activities.
------------------------------------------------------------------------------------------------------------------------
RISK APPETITE
The Board determines the amount of risk which is appropriate in the pursuit of the Group's strategic objectives, dependant on the type of risk. For example, in our pursuit of volume growth we are prepared to accept a moderate level of operational risk to firmly establish our position within the global luxury automotive market, whereas we have a lower risk appetite when considering compliance and financial risks. As a result, the Group's risk appetite will vary 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.
We assess the level of risk exposure against our associated risk appetite to ensure that we appropriately prioritise our resources to manage risks within our risk appetite. Initially we assess the gross exposure of identified risks, this being the risk exposure before considering the effect of any mitigating controls or actions. We then measure the net risk to determine the residual risk exposure using a scoring methodology which considers the likelihood and potential impact of the identified risk. Where the residual risk remains outside of the Board's risk tolerance additional actions are identified to further mitigate the risk down to an acceptable target level.
OUR PRINCIPAL RISKS
Our risk management system is designed to identify a broad range of risks and uncertainties which we believe could adversely impact the profitability or prospects of the Group. Our principal risks are those that we regard as the most material to the success of our Second Century Plan, our financial performance and our long-term sustainability. The following pages set out the Group's principal risks, how these risks are linked to our strategy and the primary mitigating actions implemented for each risk during the year ended 31 December 2018. Our principal risks may change over time as some risks assume greater importance and others may become less significant.
We categorise principal risks within one of the following four areas: Strategic, Operational, Compliance and Financial. Each principal risk is linked to one of these categories and may impact one or more of our strategic pillars.
Risk category Risk description Risk appetite
STRATEGIC RISKS Risks which can directly affect Low - Moderate
the Second Century Plan or could
significantly impact our business
model or long-term market position
and performance.
--------------------------------------- ---------------
OPERATIONAL RISKS Risks which affect business Low - Moderate
activities and operational continuity
and resilience.
--------------------------------------- ---------------
COMPLIANCE RISKS Risks associated with non-compliance Zero tolerance
with laws and regulations which
are relevant to the Group and
the automotive industry.
--------------------------------------- ---------------
FINANCIAL RISKS Risks related to financing, Low
liquidity, currency and financial
reporting.
--------------------------------------- ---------------
STRATEGIC RISKS
MACRO-ECONOMIC AND POLITICAL INSTABILITY
The Group operates in many markets exposing us to changing
economic, regulatory, social and political developments that
may impact customer demand, profitability or our ability to
sell within those markets.
Adverse macro-economic conditions or country-specific changes
to the operating, regulatory or political environment may
lead to an unfavourable business climate and significant tensions
between major trading parties which could impact the Group's
operations. This may include explicit trade protectionism,
differing tax or regulatory regimes, changing public sentiment
or reduced disposable incomes which could affect demand for
our vehicles.
LINK TO STRATEGY ACTIONS TAKEN BY MANAGEMENT
-----------------------------------------------------------
All pillars.
-----------------------------------------------------------
RISK TOLERANCE
Moderate - recognising that
external factors are difficult
to mitigate as they are often
outside our direct control.
EXAMPLES OF RISKS
* Continued diversification into emerging markets
* A key component of the Group's growth strategy is the (China, Asia Pacific, Middle East and Africa) while
expansion of sales in the Asia Pacific and Middle building on our growth in established markets (UK,
East regions, particularly recognising the increasing US) to reduce over reliance on any one territory.
number of high net worth individuals (HNWIs) in these
markets. The extent to which economic growth in these
emerging markets and within the luxury market as a * The Group's brand positioning within the high luxury
whole will be sustained is unknown. automotive segment aimed at HNWIs may be less
impacted by the economic cycle, and its operating
model based on balancing demand and supply to promote
* Increased protectionism in many global jurisdictions strong prices helps to make the Group more resistant
and Brexit could result in increased tariffs, pricing to adverse economic impacts.
pressure and additional operating complexities.
* Monitoring market trends globally to target areas for
* Unfavourable movements in foreign exchange rates or future growth and to ensure a product offer which
commodity prices could adversely affect our ability reflects customer tastes and preferences.
to meet our strategic objectives.
* Brand and customer activities and experiences to
ensure strong brand recognition and customer
relationships.
* Lobbying, where appropriate, to proactively influence
regulatory change which may affect the Group.
* Making appropriate preparations for Brexit including
the establishment of a Brexit steering committee to
manage the risks associated with Brexit (see the
Brexit principal risk set out on page 92).
* Keeping strategic plans under review to adapt to
changes in economic conditions.
-----------------------------------------------------------
INABILITY TO MAINTAIN FAVOURABLE COMPETITIVE POSITIONING
Maintaining our competitiveness in the high luxury segment car
market is critical to achieving our strategic growth objectives.
The Group competes with a number of other manufacturers with
strong brands and reputations and which may have access to greater
financial resources. The high luxury segment is relatively small
due to the price at which cars are sold and significant investment
is required to introduce new models to the market, which relies
on a sufficient level of demand to support the growing levels
of production and competition.
LINK TO STRATEGY ACTIONS TAKEN BY MANAGEMENT
-----------------------------------------------------------
* Strengthened global brand and sales power.
* Inspiring customer-focused luxury products.
* World-class value and lean processes.
* Top-class quality.
-----------------------------------------------------------
RISK TOLERANCE
Low - as we develop our product
portfolio, particularly our
SUV and Sedan vehicles, we need
to ensure that we remain competitive
to win customers across model
segments.
EXAMPLES OF RISKS
* Expanding our product portfolio with our Second
* Failure to maintain leading design which customers Century Plan to produce seven new core models over
value. seven years. This is aimed at increasing demand with
a multi-segment model strategy based on clearly
defined target customers for each model to reflect
* Inability to produce cars that are competitive in customer tastes and preferences.
terms of performance, aesthetics and quality and that
meet customers' needs and tastes.
* Multi-pronged electric vehicle strategy with plans to
introduce hybridised supercars and SUVs (under the
* Inability to keep up with technological advancements Aston Martin marque) and all-electric SUVs and sedans
(e.g. electrification). (under the Lagonda marque).
* Failure to meet regulatory requirements such as * Maintaining a regular pipeline of special editions
emissions restrictions. and a fully bespoke customisation offer through the
'Q' division, to drive exclusivity and increase
demand.
* Competitor brands with greater financial resources
enabling them to invest in technology (see technology
principal risk on page 86) and stronger negotiating * Continuous improvement in product performance,
power with the suppliers due to higher volumes. technology, quality and other car features.
* Use of modular architecture and "carry over-carry
across" principle for key systems and components to
minimise engineering and tooling investment and time
to market and improve overall quality.
* "Beyond Lean"(TM) manufacturing techniques to improve
efficiency and cost savings.
* Connected car strategy to ensure we keep pace with
the market demand for in-car technology and
connectivity, autonomous capability and
electromobility.
* Strong brand positioning in the high luxury segment
of the car market and strong secondary market values.
* Expanded dealer network and improved dealer training
to ensure luxury customer experience consistent with
the brand.
* "Built-in" quality processes to achieve customer
satisfaction.
-----------------------------------------------------------
BRAND/REPUTATIONAL DAMAGE ARISING FROM POOR QUALITY, LATE DELIVERY, PRODUCT RECALL OR INEFFECTIVE BRAND POSITIONING AND AWARENESS
Our brand and reputation are critical in securing demand for
our vehicles and in developing additional revenue streams.
Damage to our brand or reputation for any reason could significantly
impact our ability to deliver the volume growth required by
the Second Century Plan.
LINK TO STRATEGY ACTIONS TAKEN BY MANAGEMENT
-----------------------------------------------------------
* Strengthened global brand and sales power.
* Top-class quality.
* Inspiring customer-focused luxury products.
-----------------------------------------------------------
RISK TOLERANCE
Low - the value of the brand
has been built upon delivering
exceptional luxury products
to our customers. Any real or
perceived quality or customer
experience issues could significantly
affect demand for our products.
EXAMPLES OF RISKS
* Clear brand vision and establishment of a consistent
* Customer confidence and loyalty could be affected due brand identity across platforms.
to product recall, late delivery, quality defects or
not meeting customer expectations and vehicle
specifications. * Selective licensing and other use of the brand assets
within AML Partnerships.
* Reliance on a franchised dealer network to raise and
maintain brand awareness. * Monthly Brand Steering Committee meetings attended by
senior executives and regular marketing and
communications reports highlighting brand activities.
* Inadequate training of our dealership network in new
products and technologies as we expand our product
portfolio could result in a poor customer experience. * Cross-functional project team established to deliver
new model launches.
* "Right first time" engineering approach and
"Built-in" vehicle quality audit processes to improve
quality.
* Customer satisfaction feedback through customer
audits and expansion of client services team to
improve global customer support.
* Quality remediation process in place where quality
issues are managed through the Technical Review Group
,
Critical Concerns Review Group and the Recall
Committee.
* Expanded dealer network and improved dealer training
to ensure luxury customer experience consistent with
the brand.
-----------------------------------------------------------
INABILITY TO INCORPORATE AUTOMOTIVE TECHNOLOGICAL ADVANCEMENTS (E.G. ACTIVE SAFETY, CONNECTED CAR, ELECTRIFICATION, AUTONOMOUS DRIVING)
Inability to keep pace with changing customer requirements and
expectations with the move towards more advanced technologies
due to reliance on third parties for key components and availability
of funds to invest internally on product development.
The Group's current liquidity position and funding structure
may restrict the availability of funds to pursue potential acquisitions,
invest in organic growth projects or exploit emerging business
opportunities to maintain our competitiveness in relation to
technological change. In particular, keeping abreast of the
development of new technology (e.g. active safety, connected
car, electrification, autonomous driving) in line with changes
in trends and customer tastes.
The Group is currently reliant upon certain key suppliers maintaining
their pace of technological development and making this available
to the Group in a timely manner.
LINK TO STRATEGY ACTIONS TAKEN BY MANAGEMENT
-----------------------------------------------------------
* Inspiring customer-focused luxury products.
* Strengthened global brand and sales power.
* World-class value and lean processes.
* Top-class quality.
-----------------------------------------------------------
RISK TOLERANCE
Low - technology requirements
in the automotive industry are
changing with increasing pace
and the Group needs to anticipate
these to remain competitive.
EXAMPLES OF RISKS
* Strategic partnerships with key partners enable the
* The Group may not have access to the latest provision of engines, electrical architecture and
technologies due to its reliance on third parties for entertainment systems as well as providing a more
key components. cost-effective platform to enhance our design and
engineering capabilities.
* Competitors may have better access to funding to
develop new technology faster and be first to market. * Given their desirability, special models are often
fully allocated prior to any significant capital
commitment and achieve a higher margin. Customer
* Changing regulations may make current technology deposits are required on allocation and typically
obsolete. allow special editions to be cash flow positive from
design to the end of product life-cycle.
* The Group exploits further opportunities by levering
our brand and design expertise to create
opportunities to leverage into other luxury goods.
* Active management of the Group's liquidity and cash
flow to prioritise use of funds to deliver the Second
Century Plan.
* Through our modular architecture "carry over-carry
across" approach for key systems and components and
"Beyond lean"(TM) method of manufacturing, the Group
aims to maximise its efficiency, cost effectiveness
and quality of operations.
* The Group retains a high level of in-house powertrain
expertise, in both conventional internal combustion
engine technology and next-generation electric
drivetrains, which enables the Group to assess the
relative financial and operational merits of sourcing
these from third parties or developing comparable
engines in-house.
* Customer-focused product development to ensure that
innovation aligns with customer expectations.
* Connected car strategy to ensure we keep pace with
the market demand for in-car technology and
connectivity, autonomous capability and
electromobility.
* Multi-pronged electric vehicle strategy with plans to
introduce hybridised supercars and SUVs (under the
Aston Martin marque) and all-electric SUVs and sedans
(under the Lagonda marque).
-----------------------------------------------------------
OPERATIONAL RISKS
FAILURE TO ATTRACT, DEVELOP AND RETAIN TOP TALENT
Inability to attract, motivate, develop and retain our people
to perform to the best of their ability to meet our strategic
objectives.
Our performance, operating results and future growth depend
on our ability to attract, motivate and retain talent with the
appropriate level of expertise to deliver our Second Century
Plan.
LINK TO STRATEGY ACTIONS TAKEN BY MANAGEMENT
-----------------------------------------------------------
* Passionate people and culture.
* World-class value and lean processes.
-----------------------------------------------------------
RISK TOLERANCE
Low to Moderate - recognising
the importance of having the
right people and skills to deliver
our strategy. We are reliant
in certain areas on highly skilled
technicians to maintain the
attractiveness and quality of
our vehicles.
EXAMPLES OF RISKS
* Oversight by our Remuneration Committee to ensure
* Failure to engage or equip our teams to deliver our that the remuneration packages for senior leadership
strategy or address key capability gaps (e.g. roles are appropriate to retain key individuals and
inability to meet recruitment targets at St Athan). align with our strategy.
* Failure to build the right capabilities and * Succession planning for key roles and positions.
behaviours in our leadership population.
* Regular review of talent and resource risks related
* Failure to have appropriate succession planning in to key roles/positions by the Board and Committees.
place should key positions become vacant through
resignation, ill health or accident.
* Annual bonus plans in place for management and staff
to reward individual and corporate performance.
* Loss of critical talent/ knowledge/ unmanageable
levels of attrition due to a competitive local labour
market. * Annual benchmarking of remuneration levels across
grades.
* Investment in HR recruitment team to increase the
capacity and efficiency of recruitment activity.
* Track record of internal promotions, demonstrating
availability for career progression within the Group.
* Employee engagement survey and action plan.
* Ongoing investment in our Apprenticeship Programme.
* Introduction of our online Learning Management System
to facilitate employees' personal development and
skills acquisition.
* Establishment of the Development Committee to focus
on employee career development and progression.
-----------------------------------------------------------
INABILITY TO DELIVER MAJOR PROGRAMMES
Failure to implement major programmes on time, within budget
and to the right technical specification could jeopardise delivery
of the Second Century Plan and have significant adverse financial
and reputational consequences.
Successful delivery of significant programmes (including the
new manufacturing facility in St Athan and core (DBX) and special
(Valkyrie) vehicle programmes) is fundamental to the achievement
of the Group's strategic objectives.
LINK TO STRATEGY ACTIONS TAKEN BY MANAGEMENT
-----------------------------------------------------------
* Inspiring customer-focused luxury products.
* World-class value and lean processes.
* Strengthened global brand and sales power.
-----------------------------------------------------------
RISK TOLERANCE
Low - due to the significance
of these projects in driving
the required levels of volume
growth and cash generation to
support the Second Century Plan.
EXAMPLES OF RISKS
* Deployment of an established stage and gate Programme
* Failure to engage sufficient personnel with the Delivery Methodology to drive consistent governance
correct programme management skills and capabilities and management across the programme portfolio.
to deliver programmes.
* Major programmes are subject to Executive Committee
* Failure to follow a standard programme methodology approval and oversight.
could result in required outcomes not being
delivered.
* Dedicated discrete programme management teams are
established to deliver each programme.
* Delayed new model or special project launch.
* Regular programme and Operating Committee status
* Inability to effectively control costs within reviews with escalation routes for issues to be
programmes could undermine projected financial managed.
targets.
* Mandatory lessons learned sessions to ensure that
* Late delivery of new models could damage our subsequent programmes benefit from previous
brand/reputation and potentially result in reduced experience.
sales volumes or pricing.
* Technical and quality audits are performed at
critical stages by independent parties.
* ISO 9001 and 14001 certifications in relation to
Quality and Environmental management systems.
* Move to modular architecture strategy with increased
focus on leveraging core architecture across multiple
applications to reduce vehicle programme delivery
times.
-----------------------------------------------------------
INADEQUATE PROTECTION AGAINST CYBER ATTACK RESULTING IN POTENTIAL LOSS OF DATA, SYSTEM AVAILABILITY OR OPERATIONAL DISRUPTION
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.
The Group's technology environment is critical to its success.
A robust control environment helps decrease the risks to core
business operations and/or major data loss.
LINK TO STRATEGY ACTIONS TAKEN BY MANAGEMENT
-----------------------------------------------------------
* World-class value and lean processes.
* Strengthened global brand and sales power.
-----------------------------------------------------------
RISK TOLERANCE
Low - protecting the brand and
its reputation globally is at
the heart of everything we do.
We have a low tolerance and
take a risk-averse approach,
adopting a strategy to avoid
or mitigate any reputational/brand
risk arising from cyber threat.
EXAMPLES OF RISKS
* Established a cross-functional Cyber Security
* Denial of service resulting in disruption of business Steering group with Executive membership and
activities. President and Group CEO sponsorship.
* An external hacker exploits a security vulnerability * Continued investment in the cyber security programme
resulting in a loss of system control and/or major and completion of independent risk assessments to
data loss. validate the strategy and identify capabilities
required to achieve the appropriate levels of
security.
* A malicious insider abuses privileged access to gain
entry to sensitive information and/or conduct
unauthorised activities. * 24/7 monitoring using Darktrace and AlienVault
supported by robust security incident response
processes.
* Malware results in a loss of system control causing
business disruption and/or major data loss.
* Independent Cyber Vulnerability Assessment completed
in the year to identify and understand control gaps.
* Fines due to failure to comply with the General Data
Protection Regulations (GDPR).
* Internal controls in place to minimise employee error
- password policies, regular communications regarding
phishing emails.
* Regular third-party penetration testing performed to
validate the ongoing effectiveness of network
controls.
* GDPR compliance project undertaken to identify data
sets, classify them and ensure effective controls in
place to manage data access and use.
* Firewalls, anti-virus and patch management controls.
* Use of Bitlocker encryption enforced to protect data
in transit and at rest.
* Company policy mandates the use of MX Majenta for the
exchange of sensitive information outside of the
organisation, which allows us to ensure that the
correct recipient has accessed the information and
provides an audit trail of access.
-----------------------------------------------------------
POTENTIAL DISRUPTION TO THE SUPPLY CHAIN
Supply chain disruption could result in production stoppages,
delays, quality issues and/or increased costs resulting in adverse
operational and financial consequences for the Group.
Potential loss of key Tier 1 supplier or a single-source supplier,
or deterioration in quality could seriously jeopardise production
resulting in delayed or lost sales and brand/reputational damage.
(See also the principal risk relating to Brexit).
LINK TO STRATEGY ACTIONS TAKEN BY MANAGEMENT
-----------------------------------------------------------
* Inspiring customer-focused luxury products.
* Top-class quality.
* World-class value and lean processes.
-----------------------------------------------------------
RISK TOLERANCE
Low - as production is at capacity
the business model cannot absorb
any significant delays in production
and/or sales.
EXAMPLES OF RISKS
* Commodity strategies established for core suppliers
* Supplier may be unable to meet delivery schedules due detailing alternative supply routes in the event of
to financial difficulties or the inability to meet disruption to current supply.
increasing volume demand.
* Mapping our supply chain to provide real-time
* Third parties may withdraw their permission to use information about supplier performance.
their components.
* Software tool enables us to load the vehicle BOM so
* Reliance on the use of several smaller, bespoke it can automatically flag issues, risks and
suppliers for specific components. disruptions in the supply chain, and their potential
impact.
* Reliance on key suppliers (e.g. engines and
electrical architecture from Daimler). * Assessment of supplier financial strength and
performance prior to contracting with them.
* Stock levels continuously monitored, and all vendor
tooling regularly accounted for and maintained on an
asset register.
* Independent reviews by the Procurement team of key
supplier Business Continuity plans.
* Establishment of the Supplier Quality Development
team to actively manage supplier quality and
performance.
* Creation of Supply Chain Management team to aid with
onboarding new suppliers.
* "Supplier Champions" identified to actively manage at
risk suppliers.
* Identification of alternative suppliers where risk of
sole supply is deemed too significant.
* Appointment of new VP and Chief Purchasing and Supply
Officer to lead the continuing optimisation of our
supply chain and oversight of our planned Brexit
mitigations.
-----------------------------------------------------------
COMPLIANCE RISKS
POTENTIAL NON-COMPLIANCE WITH LAWS AND REGULATIONS
The Group's operations are subject to a broad spectrum of national
and regional laws and regulations in the various jurisdictions
in which we operate.
These include product safety, emissions, trademarks, competition,
employee and customer health and safety, data, corporate governance,
employment and tax. Changes to laws and regulations or a major
compliance breach could have a material impact on the business.
There are new regulatory requirements which the Group needs
to comply with as a publicly listed company.
LINK TO STRATEGY ACTIONS TAKEN BY MANAGEMENT
-----------------------------------------------------------
* World-class value and lean processes.
* Inspiring customer-focused luxury products.
* Strengthened global brand and sales power.
-----------------------------------------------------------
RISK TOLERANCE
Zero - the Board adopts a zero
tolerance to noncompliance with
laws and regulations as this
could seriously impact the Group's
ability to trade in certain
markets and result in significant
brand/reputational damage.
EXAMPLES OF RISKS
* Secured "Small-volume" derogation status within the
* Regulatory non-compliance. EU which establishes bespoke emissions targets.
* Non-compliance with emissions regulations could * Vehicle safety certification is obtained for all
inhibit the Group's ability to trade in certain markets.
markets.
* Reduction in average emissions across the product
* Failure by the Group or associated third parties to portfolio.
act in an ethical manner.
* The HR and legal and compliance functions are
* Non-compliance with labour, human rights and responsible for ensuring that employees are aware of
environmental standards across our own operations and regulations relevant to their roles. We have
extended supply chain could result in financial strengthened our public company regulatory expertise
penalties, disruption in production and reputational through a number of recent hires.
damage to our business.
* Framework of policies that aim to drive best practice
* Tax is a complex area where laws and their across our business. These include our Anti-Bribery
interpretations are changing regularly leading to the and Corruption Policy and Data Protection Policy.
risk of unexpected tax and financial loss exposures.
* GDPR policies and procedures within the business and
appointed a dedicated Data Protection Officer to
monitor and drive GDPR compliance.
* Assurance processes are in place to monitor
compliance in key risk areas, with results being
reported to our Audit and Risk Committee and Risk
Management Committee.
* Our culture and policies encourage employees to speak
up and report any issues without fear of retribution
via our Whistleblowing process.
* In-house Legal and Compliance team that manages any
ongoing regulatory investigations.
* Third-party support is obtained in areas of new or
emerging regulatory guidance to support the
implementation of appropriate new processes and
controls.
-----------------------------------------------------------
UNCERTAINTY SURROUNDING BREXIT
Various Brexit scenarios could impact the Group's financial
position, supply chain and people.
The current uncertainty regarding the way the UK leaves the
EU makes it very difficult to plan for, with multiple scenarios
having to be considered and addressed.
LINK TO STRATEGY ACTIONS TAKEN BY MANAGEMENT
----------------------------------------------------------
* All pillars.
----------------------------------------------------------
RISK TOLERANCE
Low - although we have a low
tolerance for risk caused by
Brexit there is still uncertainty
about the long--term impact.
EXAMPLES OF RISKS
* Establishment of a cross-functional Brexit Committee
* Additional customs duty from the cessation of with fortnightly status reporting to the Executive
existing free trade agreements and VAT cash flow Committee.
costs at the new UK trade border.
* Review of SMMT guidance regarding the key impacts of
* Extended supply lead times increasing working capital Brexit to the automotive industry.
investment.
* Strong engagement with the UK Government and various
* Uncertainty over the rights of EU nationals, which industry bodies.
has increased the risk of losing talent.
* AEO accreditation is being obtained which would
* Exchange and interest rate volatility impacting Group partially mitigate supply chain risks.
revenues, margins, profits and cash flow.
* Steps taken to prepare our supply chain and sales
network to mitigate Brexit impacts on the business.
* Plans in place to manage alternative supply routes
including, but not limited to, different ports of
entry and methods of transport.
* Strengthened our production purchasing function with
the recent appointment of a VP and Chief Purchasing
and Supply Officer who will also oversee the
execution of planned Brexit mitigations.
----------------------------------------------------------
FINANCIAL RISKS
POTENTIAL IMPAIRMENT OF CAPITALISED DEVELOPMENT COSTS
The value of capitalised development costs continues to grow
as we expand our product portfolio.
The carrying value of development costs in our balance sheet
is dependent upon the future profitability of the vehicle platforms
to which they are attributed. A significant reduction in vehicle
lifecycle profitability could result in the need to impair the
capitalised development intangible asset.
LINK TO STRATEGY ACTIONS TAKEN BY MANAGEMENT
------------------------------------------------------------
* Robust financing and funding.
* World-class value and lean processes.
------------------------------------------------------------
RISK TOLERANCE
Zero - we have a zero tolerance
in relation to financial reporting
risk.
EXAMPLES OF RISKS
* Modular architecture platform application approach
* Vehicle sales volumes reduce below lifecycle plans/ adopted for new model development to reduce cost of
forecasts. investment across the portfolio.
* Vehicle pricing and margins reduce to levels which no * Strategic component development plan being deployed
longer support the carrying value of the attributable to reduce investment cost of new models.
capitalised costs.
* Impairment reviews are performed where management
* Uncertainty of carry over-carry across of components considers there to have been a triggering event (e.g.
on future vehicle models. a significant reduction in sales volumes, or vehicle
pricing and margins for a model).
* Regular vehicle line reviews to monitor sales volumes,
average prices and margins. Any significant
deterioration below plan is communicated to the
Financial Reporting and Accounting team for
consideration.
------------------------------------------------------------
RELATED PARTY TRANSACTIONS
The following information is extracted from pages 146 to 147 and 201 of the 2018 Annual Report.
The subsisting material transactions which the Company has entered into with related parties are the Underwriting and Sponsors Agreement and the Relationship Agreements each of which was entered into on 20 September 2018.
The Company (for itself and acting as agent for the Other Selling Shareholders), the Directors, the Selling Shareholders and the Banks entered into an Underwriting and Sponsors Agreement relating to the sale of shares in connection with the IPO offer among other matters. The Agreement provides for lock-up arrangements agreed to by the Company, the Selling Shareholders, the Other Selling Shareholders and the Directors.
The Relationship Agreements comply with the requirements of the Listing Rules, including LR 9.2.2ADR(2)(a), and LR 6.5.4R. In accordance with the requirements of Listing Rule 9.8.4R(14), the Board confirms that the Company has complied with its obligations under the Relationship Agreements, including in respect of the independence provisions and, so far as the Company is aware, each Controlling Shareholder Group has complied with the provisions of its respective Relationship Agreement (including the independence and non-compete provisions set out therein), at all times since 20 September 2018. Further information on the Relationship Agreements is on page 105.
Other related party transactions are detailed in notes 2 and 32.
Transactions between Group undertakings, which are related parties, have been eliminated on consolidation and accordingly are not disclosed.
The Group has entered into transactions, in the ordinary course of business, with entities with significant influence over the Group and other related parties of the Group. Transactions entered into, and trading balances outstanding at each year end with entities with significant influence over the Group and other related parties of the Group are as follows:
Sales Purchases Amounts Amounts
to related from owed owed
party related by related to related
party party party
GBPm GBPm GBPm GBPm
------------------------------------------ ------------ ---------- ------------ ------------
Related party - Group
Entities with significant 31 December
influence over the Group 2018 1.4 2.4 - 1.1
Entities with significant 31 December
influence over the Group 2017 2.0 4.3 - 0.6
--------------------------- ------------- ------------ ---------- ------------ ------------
During the year ended 31 December 2018 a payment of GBP9.5m (2017: GBP5.6m) was made to an existing shareholder (see note 2).
TRANSACTIONS WITH DIRECTORS
In the year ended 31 December 2018 one car was sold to a director, Dr Andrew Palmer, for GBP0.1m excluding value added tax (year ended 31 December 2017: one car for GBP0.1m excluding value added tax).
No amounts were outstanding at either year end.
TERMS AND CONDITIONS OF TRANSACTIONS WITH RELATED PARTIES (GROUP)
Sales and purchases between related parties are made at normal market prices. Outstanding balances with entities other than subsidiaries are unsecured, interest free and cash settlement is expected within 60 days of invoice. Terms and conditions for transactions with subsidiaries are the same, with the exception that balances are placed on intercompany accounts. The Group has not provided or benefited from any guarantees for any related party receivables or payables. The Group has not made any provision for impairment relating to amounts owed by related parties at either year end.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
ACSSFIFDLFUSEED
(END) Dow Jones Newswires
March 14, 2019 10:00 ET (14:00 GMT)
1 Year Aston Martin Lagonda Glo... Chart |
1 Month Aston Martin Lagonda Glo... Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
