Aston Martin Lagonda Global Aktie

Good morning or good afternoon all, and welcome to the Aston Martin Lagonda Q1 2026 Results Call. My name is Adam, and I'll be your operator today. [Operator Instructions] And I will now hand the floor to Doug Lafferty to begin. So Doug, please go ahead when you're ready.

Thanks, Adam. Good morning, everyone. Thanks for joining the call, as always, this morning for our Q1 2026 results. As ever, there'll be time for a few questions after I've provided a short summary of our performance for the first 3 months of this year. Overall, our Q1 2026 performance was in line with our guidance, and we maintain our full year outlook.

As you are all aware, we expected Q1 to be the smallest quarter of the year as we continue to focus on realigning stock levels through a disciplined approach to managing production and delivery. This was achieved with total wholesale volumes similar to the prior year period, whilst core retail volumes were significantly ahead of wholesales by over 50%.

As a result of the around 100 -- well, sorry, as a result of 102 Valhalla deliveries, total ASP increased 17% to GBP 252,000, driving total revenue growth of 16%. As many of you would have seen at the start of the month, the overwhelmingly positive Valhalla driving reviews were published with many giving it 5 stars and some labeling it the Best Aston Martin ever.

We're now building on this positive coverage with an extensive program of global customer driving events for this groundbreaking supercar through until the end of July. We expect the benefits of these to prove further boost to the order book in the coming months. Valhalla deliveries, in addition to the benefits from the ongoing transformation program drove an increase in gross margin to 35% from 28% in the prior year period.

This demonstrates positive progress towards our full year guidance of gross margin improving into the high 30%. Adjusted EBITDA increased year-on-year by GBP 28 million to GBP 23 million, reflecting the improvement in gross profit. Adjusted EBIT increased by 12% to minus GBP 57 million, with D&A increasing by 33% to GBP 80 million, reflecting the delivery of the Valhalla's.

Free cash outflow in Q1 2026 marginally improved compared to the prior year with the benefits from EBITDA and reduced capital expenditure largely being offset by the working capital outflow, which we expect to ebb and flow through the year. As guided at the full year results, we expect free cash outflow in 2026 to materially improve compared to the prior year.

This will be supported by an enhanced product mix and more balanced production cadence from Q2 '26 onwards as we benefit from our expanded range of core models and the reduction in aged stock, which was predominantly executed in the first quarter. Total cash and available facilities were GBP 178 million at the end of the first quarter, benefiting from the gross proceeds of GBP 50 million associated with the completed sale of the Aston Martin Formula 1 naming rights.

We've also proactively sought to enhance our liquidity position. And today, we're pleased to announce that we've agreed a new GBP 50 million committed facility with Lawrence and other members of the Yew Tree Consortium. This improves our pro forma Q1 2026 total liquidity to around GBP 230 million and provides us with additional headroom and flexibility should any unexpected headwinds materialize in the coming period.

With that in mind, we will continue to monitor global macroeconomic and geopolitical events very closely, in particular, relating to any impact they may have on consumer confidence, demand and, of course, supply chains. It's also worth quickly noting that Q1 was the first period in which the quarterly tariff quota mechanism was in operation in the U.S.A.

Our preparedness in terms of managing imports into the market was tested, and we had to carefully navigate the quota volumes based on limited data due to the ongoing impact from the Federal shutdowns that commenced in mid-February. I'm pleased to report, however, that all Q1 shipments to the U.S. were secured at the 10% tariff rate. We will continue to plan and monitor this closely as the remainder of the year plays out.

Finally, despite the heightened levels of macroeconomic uncertainty and with the Group currently experiencing no substantial direct impact from the Middle East conflict, we still expect to deliver materially improved financial performance in 2026 compared with 2025. And as such, our full year guidance and the short to mid-term outlook remain unchanged.

I'll hand back to Adam now so we can start the Q&A. Thank you.

[Operator Instructions] And our first question comes from Henning Cosman from Barclays.

Congratulations on what I think very solid first quarter, especially gross margin, really good and reassuring to see and also on the inventory reduction. So first question goes a bit in that direction. I suppose the retail run rate, especially you said 50% above wholesale. So retail run rate really bodes quite well for your full year guidance. Can you talk a bit to the convergence now of wholesale to retail that you're expecting in the further course of the year starting in Q2 and perhaps if you could a bit model-by-model dynamics as to what's driving the convergence.

The second point is on the [ RPU of ] ASP, as you call it. It was obviously still down in the first quarter because you have the dealer support payments in there. If I recall correctly, you're guiding for plus 5% ASP increase on a full year basis. So obviously, it implies a bit of a swing. I was keen to understand a bit more is that mainly just driven by the significant reduction or absence even of the support payments in the quarters as we go on or maybe you could talk to the new variants also contributing to the ASP increase as we go.

And perhaps a bit of a statement on the dealer support payments. Are they quite concentrated on the -- just on that aging stock that you pointed out, the roughly 400 units, I suppose, is what's implied? Because then I would think that they must be materially higher on those and just really quite marginal on the regular or the new deliveries. And finally, I have to ask on the cash burn, right? You said working capital would ebb and flow.

No particular commitment, I suppose, from your statement that some of that working capital outflow could reverse and support you in a positive manner. I guess you stuck with the statement that the majority of the outflow was still in Q1, right, which I guess means it's going to be significantly less in the 3 other quarters combined than the Q1.

But can you maybe, at this point, give us a bit more color as to the quantification of that outflow that we should still expect or if you're more comfortable to say maybe what kind of liquidity range by year-end we could be getting towards. That would be great. Sorry, it's quite long, but thank you.

Okay Henning, thanks. I'll try and unpick those. So we'll take them in order then, starting with the convergence, as you call it, on the wholesale and retail. So yes, look, I think we'll start to see those converge in Q2 during Q2, and we expect that by the time we get to the end of Q2, that sort of stock realignment will be largely complete. So there'll be a little bit of continuing retails running ahead of wholesales in Q2.

But then after that, it should become much smoother. So it's been quite a long time, certainly a good effort over the last 2 quarters on the aged stock and to improve the stock alignment with the dealers and get the pipeline in better shape, and we expect that to complete through Q2 so that as we enter the second half of the year, we're in a much more aligned position.

And then in terms of the mix, what I would say is that I think when you look at the mix in the first quarter, I would expect the SUV mix to get a little bit better as we move through the second half of the year. You'll probably start to see that reflected in Q2. And then I would expect that to stabilize in the second half of the year.

And then obviously, with the Valhalla, we continue to guide to delivering 500 Valhalla's for the full year with just over 100 of those being delivered in the first quarter means the Valhalla contribution, let's say, to the volume will continue to improve as we go through the quarters as well. So yes, look, I think we're pleased with where we've got to in Q1 with the stock realignment, a little bit more to do in Q2 and then H2 should be smoother.

Second question on ASP. So I think the first statement is, yes, we still expect around 5% core ASP growth for the full year. And then there was quite a lot to unpick in your question, but let me just try and sort of give you my steer on it, my view on it. Obviously, there's been some additional dealer support, incremental dealer support over and above what we would -- the levels that we would normally see. And you've seen that in Q4, and you've seen it again in Q1.

That has largely been focused on the aged stock and the outgoing or the sort of older models, if you like. So the new derivatives that are being launched and have been launched over the last few months don't attract any incremental support. So the support is focused on the cars that we're trying to tidy up from a stock point of view. So as we go through the year, the pricing improvement to get to that level of a 5% increase will be largely supported by coming out of that period of dealer support.

But equally, yes, the derivatives and yes, a continued sort of target to improve the options take across the core portfolio and the contribution from options should all contribute towards the improved ASP. And then finally, on cash flow, I guess you probably won't be surprised that I'm not going to get too much into the detail on it. But what I would say is that from a free cash flow point of view, we still expect the material improvement as we move through the year.

As we get to the end of the year and look at what the free cash flow position is, I still expect but Q1 will represent the vast majority of the free cash position at the end of the year. And I think you alluded to the interest. And yes, that includes obviously the interest payments as we go through. So we still expect to see a material improvement between Q2 and Q4 with the majority of the cash outflow by the time we get to the end of the year having been sort of seen in Q1.

The next question comes from Christian Frenes from Goldman Sachs.

I'll just ask 2. So I think the destock you mentioned already, it sounds like it's largely in line with prior commentary. So just to understand, the second half should then see higher ASPs, higher margins, improved free cash flow versus the first half, at least that's my understanding. Maybe you could confirm. And then also additional color maybe on this net working capital in H2, what to expect versus H1?

And then on a separate question, just the U.S.-U.K. quota mechanism. So it seemed to work out fairly well in Q1. As you look through to Q2, anything to call out? Any risks at this stage that are worth noting? And then my last question, just the financial facility. I think it makes sense to raise financial flexibility, so I understand. But any additional details you can give us at this stage regarding that facility?

Christian, thanks for the question. So I think the first one is probably a little bit of a repeat of one of Henning's questions. But again, yes, just to clarify specifically on your questions with regards to H2 on ASP. Yes, we expect it to be stronger in the second half for the reasons I've outlined. And obviously, that will lead to improved gross margins in the second half versus the first half.

So as we've guided to the high 30s, we're in the mid-30s in Q1. We expect to see that continue to improve towards the margin that we've guided to. And then obviously, all of that supports the sort of profitability and free cash flow position improvement that we've guided to for 2026. So all of that remains intact and yes, driven by a healthy sort of core ASP growth, but of course, also with the added contribution of the Valhalla, which will be there for the entire year.

And as I said, with volumes sort of growing into the full year guidance of GBP 500 million as we move through the quarters. I think you talked about CapEx and net working capital. So CapEx, we're still guiding to GBP 300 million for the year. Obviously, the run rate was a little bit below that for the first quarter, but we expect that to catch up.

And then with regards to net working capital, look, I think the -- if there's going to be an outflow for the full year, the majority of it is done in Q1 and ebb and flow, take what you think from that sort of statement. But I think we'll see small variances around where we are. Obviously, we'll be focused on trying to make sure that net working capital is as tight as possible.

And if we can get some of the outflow back during the year, then all efforts on that. But I think the position for net working capital will be broadly in line with where we see for Q1. So not too material movements as we go through the rest of the year. On the quota mechanism, it was an interesting kind of experience at the end of Q1. Obviously, we had cars on their way in the U.S. and obviously, some high-value cars.

A lot of the Valhalla's that were shipped in Q1 actually went to the U.S. So we have to keep a close eye on where we thought the quota was tracking for the quarter. And as you know, this year, the 100,000 cars that can be exported from the U.K. into the U.S. is split by quarter. So you've got 25,000 a quarter. And we were a little bit short of data because of the government shutdown.

But we managed to get some information towards the end of the quarter, which meant that we [ trot ] carefully over the last few days. But at the end of the quarter, we've managed to get everything that we wanted to get into the U.S. So it was interesting in terms of the way that the whole thing worked. I think the risks are the same as we move into Q2. For us, Q1 was a small quarter.

I can't speak for other companies, other manufacturers and OEMs who are shipping cars from the U.K. to the U.S. as to how their quarters are split. So we'll need to keep an eye on Q2. And the risks are the same. The risks are that the quota gets filled earlier than we've got our final shipments going into the U.S., and then we'd need to hold shipments. And to be clear, that is what we would intend to do because we don't want to ship any cars into the U.S. at a higher tariff rate and swallow the margin impact.

So it's the same risk that we'll manage over Q2, but hopefully, with access to more information should the federal shutdowns allow. And then the third question on the facility. Yes, so look, I completely agree with you, obviously, that it's helpful to have additional flexibility and headroom. More details on the facility, I guess, it is interest-bearing, but only if drawn, there's a small commitment fee, but it's a fairly simple structure.

And as you say, helpful to get us a little bit more headroom as we move into the remainder of the year. And look, I alluded to it in my little opening, we're not -- it's really to protect us against things that we're not expecting. And with the situation in the Middle East, we're not seeing any direct impact from that today. But the longer that goes on, the longer the risk is. So I think it's a prudent move to make sure that we've got appropriate liquidity to make sure that we can execute our plan.

The next question comes from Harry Martin at Bernstein.

So I wanted to ask first about the U.K. We talked a lot about China and the U.S. in the last 12 or 18 months. But can you touch on what's happening in the U.K.? Wholesale is down 25%. I think it's the lowest wholesale quarter for a long time as I look back. So is that just market weakness? Is that where a lot of this aged stock still needs to be cleared?

Any thoughts that you have there would be useful. And then the second question, just a couple on the Valhalla. What's the latest expectation you have around order book extension with some of the driver activation events that are ongoing?

And do we move back to net inflows rather than a net outflow on the deposits that we saw in Q1? And then if you can remind us of the broader strategy around Specials and what we can expect into the medium term, both from the Valhalla platform and from the core platform as well.

Thanks, Harry. Look, I wouldn't read too much into the U.K. on a small quarter. So there's nothing material happening in the U.K. There's no particular market weakness given the size of the volumes that have been sort of going in the U.K. in this Q1 and last Q1, I think it's a big percentage on a small number. So I wouldn't read too much into it. The U.K. is still pretty strong for us.

The stock is now in a very healthy position in the U.K. So we're confident that the U.K. will continue to support the overall volume for the year. So there's nothing really to talk about from a U.K. perspective. On the Valhalla, yes, look, I think we're really pleased with what's happened this year. So we've got -- obviously, we're into production. We've been delivering cars for 5 or 6 months.

They've been received very, very well by customers. The media drive event that we ran during March went incredibly well. And I think -- and I hope that all of you have seen the reviews that have come out since that. And we're very, very pleased, unsurprised, but very, very pleased with the positive reviews. And then we very, very recently, I think a couple of weeks ago, just started the activation on events where we now have Valhalla's in every region.

So customers can access the cars. Many of them will get to drive them, but certainly, an awful lot of people will get to see it in the flesh, which, of course, we built the initial order bank for the Valhalla without any of those tools. So we do expect these activities to act as a catalyst and boost the order book as we go through the next couple of months. It takes a little bit of time to get people through the process, but we will start to see an improvement.

And just from a sort of net inflow/outflow point of view, I think it's important to note but obviously, whilst there might be a net outflow from a deposit flow point of view in the balance sheet, we actually have taken more deposits than we've taken net new deposits by a fairly material number during the course of particularly March and into April. So we're pleased with the way it's tracking and very confident in the car.

And then obviously, with special strategy, you won't be surprised to hear me say that core Specials continues to be a big part of the cycle plan strategy going forward. They will offer accretive margin and fabulous customer experience and amazing cars that we can deliver like we did with the Valiant and the Valour and the DBR22's. So it's a kind of dual track on the Specials.

We'll continue to deliver special cars off core platforms, and we'll continue to deliver initially the first run of the Valhalla's and then I suspect that we'll maybe use that platform onwards as well like we did with Valkyrie. So I think it's a watch this space, Harry, but there's exciting things to come definitely from the Specials program.

Our final question today comes from Horst Schneider from Bank of America.

I've got a few questions left. The first one is on this GBP 50 million facility. So maybe you can provide some more details, especially if this loan is pari passu or if it's maybe subordinated or has got any other securitization. Then the second question is, from here, what is your additional debt capacity as of today pro forma for this loan?

So what could you raise on top of that maybe? And the last question is more industrially related. Given that the oil price increase, do you feel at the moment in discussions with customers that it's a disadvantage not to have yet a PHEV, take Valhalla aside, but that you have not yet hybrids on board. Also given that your peers are electrifying more, especially on the SUV side?

Thanks, Horst. Yes, I think I gave a little bit more color on the GBP 50 million facility. It is secured and secured against specific assets in the company. So I don't think there's much further to say on that one. And then with regards to further debt capacity, what you would expect me to say is that the company continues to keep under review its options.

But obviously, you've seen how additional liquidity is coming into the company over the last 12 to 18 months. So we always explore various different options, what's available to us. So we're not purely focused on what debt capacity there is. There is a little bit of remaining debt capacity, but -- we're not going to get into the details. And then on the final question was, I think it's an interesting question.

And obviously, we're going to need to monitor how things evolve from here on in with oil price and the impact it could have on inflation, the impact it could have on consumers. But I don't feel like we feel as though we've got a gap in our portfolio that might suffer as a consequence of not having a PHEV in the core portfolio.

So we're very comfortable with the cars that we've got in the market. We're very happy with the new derivatives that we're bringing to the market, and we think that provides differentiation for our customers and for customers who the brand and the cars might appeal to from other marks.

So we're confident in the portfolio, and we think it's the right portfolio for now. Obviously, we're focused on evolving it in the future. But today, we've got to back ourselves with the cars we have, the [ yes ] derivatives and derivatives to come.

For the time being, it's not -- there's no intention to electrify the DBX, right? So that's a little bit down the road.

Yes. It's down the road and those things take time. They certainly can't be done, as you know. It's not the work at the moment. So they need to be appropriate planned into the cycle plan, which obviously is a event.

So there were no changes to our cycle plan, I would say, over the last few months. Thanks everybody. Sorry, Adam, I'm just going to say a quick thank you for everybody for listening. Any further questions, you know where to find us. So thanks very much, and speak to you again soon.

That concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.

Good morning or good afternoon, and welcome to the Aston Martin Lagonda 2025 Full Year Results Call. My name is Adam, and I'll be your operator today. [Operator Instructions]. I will now hand over to Adrian Hallmark to begin. So please go ahead when you're ready.

Good morning, everyone, and thank you for joining us today for Aston Martin's 2025 full year results. It's a pleasure to be here alongside Doug Lafferty, CFO. And before Doug takes you through the financial performance in detail, I'm going to provide a summary of our key achievements and areas of strategic focus during 2025, followed by a review of the work we have done on the future product lineup.

As we've outlined throughout the year, we have navigated a highly challenging trading environment, an unprecedented backdrop of geopolitical uncertainties and macroeconomic pressures, including heightened tariffs in the U.S. and China weighed on our performance and ability to execute our plans effectively. Despite this, we have delivered some critical milestones. None more so than the commencement of Valhalla deliveries in quarter 4 last year, our first mid-engine plug-in hybrid vehicle supercar.

Alongside this, we've expanded our thrilling core lineup with high-performance derivatives such as the Vantage S and the DBX S, voted the Super SUV of the Year by Top Gear Magazine and the Vanquish Volante with the Vanquish also being recognized as Car of the Year by Robb Report just last month. Whilst maintaining a disciplined approach to balancing production with demand throughout the year, with retails outpacing wholesales, we also took the necessary proactive actions to invest in quality, lower our operational costs, and find ongoing capital expenditure efficiencies. Along with other transformation initiatives, these actions have benefited our performance in 2025, but very importantly, will support enhanced delivery over the coming years. Finally, we took action during the year to strengthen our balance sheet.

Proceeds from the sale of shares in the Aston Martin Aramco Formula One Team, investment from Lawrence Stroll and his Yew Tree Consortium, and improved cash collections in quarter four 2025, resulted in a year-end total liquidity of GBP 250 million. Further enhanced by the proposed sale of Aston Martin naming rights to AMR GP for a consideration of GBP 50 million in this quarter, 2026. Taking all of this together and looking ahead, I remain confident that our strategy and upcoming products will position us strongly for future success. In the full year 2026, we expect to deliver a material improvement in our financial performance and continue to delivering year-on-year improvements over the short to midterm, with a focus on margin improvement and cash flow generation.

Let's begin with a review of what's at the beating heart of Aston Martin and core to our DNA. That's our range of exquisitely designed and handcrafted vehicles. Today, we have the most thrilling and diverse lineup of models in our 113-year history. As we said at the start of 2025, our focus was on continuing to refresh and expand the core model range. Aston Martin has a long-standing tradition of applying the S suffix to special high-performance derivatives of core models, which we've continued with the introduction with the Vantage S, the DBX S, and most recently, the DB12 S. We now have convertible models available for all of our core range of sports cars. We celebrated the 60th anniversary of the iconic Volante name with the release of limited-edition Q by Aston Martin DB12 and Vanquish models.

As I previously mentioned, the awards and recognition for these vehicles were a consistent theme throughout the year and have continued into 2026. As a result of the extensive range of new core models, the order book for these vehicles extends for up to 5 months for the core, and the average selling price has increased by more than 5% to GBP 185,000. A trend we expect to see continue into 2026, with more Aston Martin versions to come as we keep the core range fresh for our future and current customers. Now, undoubtedly, the most anticipated highlight of the year was the start of production and deliveries of Valhalla in Q4 2025. Valhalla has been a monumental project for Aston Martin, with the first 152 units produced and wholesaled in 2025.

A further circa 500 units will be delivered in 2026. The current order bank takes us through to the fourth quarter of this year. Uniquely designed from the ground up at our Gaydon headquarters in the U.K., this supercar with hypercar performance is our first mid-engine plug-in hybrid. It's an important component of our future plans. The financial benefits have already been evidenced in our quarter four, 2025 performance. Reception from customers and the media to driving the prototype has been overwhelmingly positive. Following extensive global driving events during the second half of 2025, we have much more to come in 2026, beginning with over 50 global journalists joining us in Spain next week to drive the first full production versions of the car. Expect to see the reviews of this by the end of March.

With our product portfolio now well-established, let's turn our focus to the current market environment and how we are refining strategy, transformation program, and our future product plans to best position Aston Martin for success and solid financial performance in the future. During my first full year as CEO in 2025, the global luxury automotive market faced one of its most turbulent years in recent times. Consumer demand has been impacted negatively by escalating geopolitical uncertainties and macroeconomic challenges, the most notable being the introduction of tariffs in the U.S. and in China. We were forced to navigate an unpredictable policy landscape and manage supply chain issues that ultimately impacted our volumes, our efficiency, and our margins. We have taken, and will continue to take, proactive steps to strengthen our overall position by maintaining a disciplined approach to balancing production and demand.

This has been key to this year's performance and how we've planned for 2026. It includes establishing a more balanced production cadence through each quarter, while building on the success of our initial Valhalla deliveries. We passed through a second 3% price increase in the U.S. from the 1st of October to offset more of the impact we've been absorbing due to the tariff increases announced earlier this year. We continued to engage with the U.K. government regarding the first-come, first-served U.S. quota mechanism, with volumes allocated on a quarterly basis. This system creates uncertainty for our planning and forecasting. Where possible, we will try to optimize production schedules to reduce this risk associated with the quota mechanism and prioritize working capital management.

As we said at the half-year results, we provided support for our dealers in China with the intention of positioning us strongly to enter 2026 from a low stock perspective. We continue to build more robust relationships and management across our supply chain, including proactively mitigating risks with some of our partners. We're taking immediate and ongoing action to reduce our cost base in order to deliver operational leverage. Simultaneously, we reviewed our future cycle plan to ensure we meet the needs of our customers as regulators and priorities shift. This resulted in a CapEx reduction of about GBP 300 million over the coming five years. 12 months ago, I communicated a strategy that built on the foundations laid by the industrial-scale turnaround undertaken by Lawrence Stroll and the team since 2020. This strategy seeks to turn this high-potential business into a high-performing one.

Underpinning this strategy are our unique strengths, namely our iconic global brand, our uncompromising customer focus, the relentless pursuit of innovation and technical advancement, and the license to operate in the high-performance sector through our F1 association, which feeds into the exclusive, limited edition, high-margin specials. Finally, and most importantly, our highly skilled and capable and loyal workforce. Building on these unique strengths, we took proactive steps and advanced our transformation program in 2025, anchored around our six strategic focus areas. As we look ahead, we will continue to operate with a laser focus on these six areas, because they are the way to achieve our high performance and create value for our stakeholders and shareholders. Many of the achievements this year I've already referenced, I'd like to call out just a few more over the coming moments.

As we seek to drive market demand, we've recently established a private office, which ensures our top 500 clients are assigned a primary Aston Martin contact, supported by head office VIP specialists with a dedicated 2026 events plan. This will be further supported by the opening of the Q London flagship in Berkeley Square later this year, adding to the ultra-luxury flagship store at New York and at the Peninsula in Tokyo. In terms of product creation, we were the first global automotive manufacturer to integrate Apple CarPlay Ultra into all of our models. Additionally, we're expanding our range of personalization, options, and bespoke Q offerings, giving our customers even more choice when it comes to curating their unique Aston Martin. Culture and change management is critical at a time when we are right-sizing the business to align with our future plans.

To demonstrate that we're making changes throughout the organization, my executive committee a year ago, comprised of 11 members, and we will be nearly half that size by the end of this quarter in 2026. Our focus on quality has seen us make additional investments, which are delivering ongoing benefits. The Valhalla program has established a new benchmark for Aston for product launches, and our customer satisfaction scores have rocketed compared with the previous year across all new models. Whilst we are instilling a disciplined approach across our operations, it's important that we don't ignore other key factors, like the health and safety of our colleagues. This is of paramount importance, and I'm pleased to report that our reduced accident frequency rate in 2025 is another step change. Finally, cost optimization.

As you know, this has been a constant theme throughout the 2025 period and will continue to be so in 2026. One of the benefits of having a more disciplined approach to our operations with a smoother production cadence is that we can deliver greater efficiency. As such, I expect us to drive operating leverage in 2026 that will support our improved financial performance and profitable growth. As we look ahead to the future, the key to success of this business will be the next generation of vehicles that we develop. We announced in October that a review was underway of our future product cycle plan, with the dual aim of optimizing capital investment whilst continuing to deliver innovative products that meet customer demands and regulatory requirements.

We now have a clear roadmap that will ensure our product proposition builds on the strong foundations we have established over the past five years. For the remainder of this decade, we will initially focus on extending existing core model lines before the next full refresh commences. This is a capital-efficient approach and the best utilization of funds, whilst being able to offer new and exhilarating products that meet our customers' needs and beat the competition. The derivative approach of the past year is a great example of what to expect over the next three years. We will gradually start shifting from pure combustion engine powertrains to incorporating electrical assistance. That doesn't mean full electric, yet. That strategy will continue to be reviewed and subject to further communications.

We don't believe our customers want that technology right now. We won't be pushed down that path by regulation either, due to the changes that have occurred. What it does mean is hybrid technology, alongside ever more efficient and compliant combustion engines, will be the core part of our business going forward. This will be complemented by our continued specials program, a fundamental part of our future financial and competitive success. As we look further into the following decade, that s when we plan to incrementally add all-electric drivetrains that will incorporate the latest innovative battery technology at a time when customer demand has likely shifted to be more closely aligned with regulatory requirements. I'm really excited by what we have to offer in the years to come.

At the appropriate time, we'll provide more color on our thrilling and innovative future product lineup, which puts customers' requirements at the heart of everything that we do. For now, thank you, and I would like to hand over to Doug, who will take you through the financial detail.

Thank you, Adrian. Good morning, all. Before we move into the Q&A, I'll take you through our financial performance for 2025, and our guidance for 2026 and onwards. Overall, our full year 2025 performance reflects, as we guided, fewer specials deliveries and the disciplined approach we took to operations as we navigated the heightened challenges and uncertainty in the global macroeconomic and geopolitical environments, particularly in relation to tariffs and the quota mechanism in the U.S. Looking at the detail on the slide, wholesale volumes were down 10% at 5,448. Retail volumes outpaced wholesales as we continued to maintain a disciplined approach to managing the balance between production and demand.

As expected, Q4 was the strongest period in 2025, benefiting from our planned expansion of the core derivatives and the first 152 deliveries of Valhalla, supporting marginally positive free cash flow in the quarter. In terms of revenue, at GBP 1.26 billion, this reflected a 21% reduction compared to the prior year, largely as a result of the core volume decline and the guided fewer specials deliveries compared to 2024. Core ASP increased by 5% to GBP 185,000, benefiting from our expanded range of derivatives, while total ASP was broadly flat due to the mix of specials. Demand for unique product personalization continued to drive strong contribution to core revenue of 18%, broadly in line with the prior year period.

As a result of the lower specials volumes, dealer support to reduce aged stock, increased warranty costs and other investments made in enhancing product quality, as well as the impact of tariffs in the US and China, adjusted EBIT decreased to a negative GBP 189 million, with depreciation amortization decreasing by 16% to GBP 297 million, also primarily driven by fewer specials. The split of our wholesales for 2025 is shown on the left-hand side of the slide. Core volumes for sport, GT, and SUV were down in line with the overall trend, whilst fewer specials were due to the timing of the Valhalla deliveries commencing only in Q4.

As expected, Q4 wholesales increased sequentially, up 47% on the previous quarter, benefiting from both the expanded range of core models, including the DBX S, Vantage S, and Volante 60th Anniversary Limited editions, as well as initial Valhalla deliveries. As Adrian has mentioned, we expect to continue to realize the benefits of our full range of new core derivatives through 2026. On the right-hand side of the slide, total ASP decreased by 15%, again, reflecting the fewer specials deliveries and the mix compared to the prior year, while core ASP, as I've already mentioned, increased by 5%. On a constant currency basis, I would expect to see a similar improvement in core ASP in 2026, whilst total ASP will benefit from around 500 Valhallas we expect to deliver, as well as the Valkyrie LM editions.

Overall, volumes remained similarly balanced across all regions in 2025, with the Americas and EMEA, excluding the U.K., collectively representing 63% of wholesales. This was despite the ongoing challenges related to the U.S. tariff implementation. In addition to the reasons previously outlined, the timing of various model transitions and deliveries across the regions impacted volumes compared to the prior year. The movements in volumes across EMEA and APAC were weaker due to market conditions and destocking activities. Despite tariff-related volatility in the U.S., volumes there and in the U.K. remained reasonably robust relative to overall group performance. While China is a market with long-term growth potential, demand there remained extremely subdued, in line with other luxury automotive peers, due to weak macroeconomic environment and changes to luxury car tariff effective from July 2025.

We continued to support our China dealer network through 2025 to help position them well to benefit from our next generation core model range when the market conditions improve. As we turn to the next slide, the impact of fewer specials deliveries is reflected in the decline in gross margin year-over-year. The impact of core wholesales, despite a slight improvement in the mix from the next generation of derivatives, was also diluted to gross margin as a result of the previously communicated additional warranty costs, increased dealer support, and other investments made in product quality, which amounted to an increase on the prior year of around GBP 65 million. Additionally, gross margin was impacted by the U.S. tariff increases.

Q4 2025 gross margin improved sequentially to 31% from 29%, supported by core volumes and specials, whilst ongoing warranty costs and dealer support to reduce aged stock still impacted the period. I'll come on to guidance shortly. We expect a material improvement in financial performance in 2026, including gross margin, benefiting from our ongoing transformation program and continued disciplined approach to operations, new core derivatives, and the enhanced contribution from Valhalla. We remain steadfast in targeting a minimum 40% gross margin for all of our new vehicles. Adjusted EBIT decreased year-on-year to a negative GBP 189 million, primarily reflecting the gross profit movement and foreign exchange, which were partially offset by a 16% decrease in both adjusted operating expenses, excluding D&A and adjusted D&A.

The decrease in adjusted operating expenses aligns with our focus on optimizing the cost base as part of our ongoing transformation program, and to drive operating leverage through disciplined cost management from 2026 onwards. It also includes the previously announced GBP 11 million benefit from the revaluation uplift of the secondary warrant options associated with the disposal of the group's AMR GP investment. As shown on the right-hand side of the slide, net adjusted financing costs decreased to GBP 109 million from GBP 173 million, primarily due to a GBP 71 million year-on-year gain of non-cash US dollar debt revaluations, resulting from a weaker US dollar. Turning to free cash flow, the year-on-year outflow increased by GBP 18 million to GBP 410 million.

This reflects both the decrease in cash inflow from operating activities and increased net cash interest paid of GBP 143 million, partially offset by the GBP 60 million reduction in capital expenditure. As expected, working capital improved year-on-year to an inflow of GBP 6 million, compared to the GBP 118 million outflow seen in 2024. The key drivers here being the deposit inflow relating to Valhalla, with deposits held increasing by GBP 3 million, compared with GBP 187 million outflow in the prior year period, in addition to a GBP 2 million increase in receivables, compared to a GBP 107 million decrease in 2024, following improved cash collections at the year end.

Capital expenditure of GBP 341 million was below the comparative period, in line with the group's revised guidance, reflecting the initial benefits from the immediate actions announced by the group at Q3 2025, to reduce both cost and CapEx. As Adrian has mentioned, we have completed a review of the group's future product cycle plan, resulting in the five-year CapEx plan reducing from around GBP 2 billion to around GBP 1.7 billion. This is through a continued focus on utilizing existing platform architecture for internal combustion engine vehicles, in line with regulatory trends and customer demand. To finish with cash and debt, we ended the year with total liquidity of GBP 250 million, flat on Q3, given the strong performance in Q4 2025, and improved cash collections at the year end.

Total liquidity reflects the GBP 410 million free cash outflow in the year, partially offset by the around GBP 106 million inflow of net proceeds following the completed sale of the AMR GP's shares, and the GBP 52.5 million investment from the Yew Tree Consortium. This has been further enhanced following our recent announcement of the proposed sale of the Aston Martin naming rights to AMR GP for a consideration of GBP 50 million. Net debt increased to GBP 1.38 billion, reflecting a decrease in the cash balance and increased drawing on the RCF. Combined with the decline in EBITDA year-on-year, this resulted in an adjusted net leverage ratio of 12.8 times.

As we prepare to deliver the material improvement in 2026, and through disciplined strategic delivery and profitable growth in the future, we expect this ratio to materially improve over the coming years. Finally, and looking ahead, as Adrian has outlined, we expect to deliver a materially improved financial performance in 2026. As the indicative EBIT walk on the right-hand slide highlights, key to this improvement is our enhanced product mix, including the 500 Valhalla deliveries that we expect, and benefits from the ongoing transformation program and a disciplined approach to operations. We continue to acknowledge that the global macroeconomic and geopolitical environment impacting the wider automotive industry remains challenging. This includes the U.S. tariff and quota mechanism uncertainty, which Adrian has already mentioned.

Taking this into consideration, we still expect to continue delivering year-on-year improved financial performance over the short to midterm, with a focus on margin expansion and cash flow generation, benefiting from the ongoing transformation program initiatives and an enhanced product mix from the future portfolio of both core and special models. You can see the group's detailed 2026 guidance on the left-hand side of the slide. What I would highlight is that we have planned carefully for 2026 to align production with retail demand and expect a much smoother delivery cadence from the second quarter onwards. This will support more efficient delivery of our plan, which, in addition to the ongoing benefits from our transformation program, will generate operating leverage. We expect the adjusted EBIT margin to materially improve towards breakeven.

Free cash outflow is similarly expected to improve, and following the majority of the cash outflow occurring in Q1 2026, we expect a cumulative year-on-year improvement from Q2 onwards. As you would expect, we remain laser focused on cash optimization and liquidity management. Thank you. I'll now hand back over to the operator to open for the Q&A.

Our first question comes from Henning Cosman of Barclays.

I have a few, but maybe start with three and get back in the queue afterwards. Maybe I can ask on inventory first. Perhaps for Adrian, if you could please comment on where the channel inventory stands now. I think you spoke to China and low stock at year-end in China specifically. If you could help us understand when you think wholesale and retail can start converging because you've reached a normalized stock level. In the context of that, the costs that you've had for support, mainly dealer support, in 2025, do you think they will be fully non-repeating in 2026? That is the first question.

Second question, perhaps on free cash flow and liquidity, maybe more for Doug. I don't know, Doug, if you're prepared to comment on a target liquidity level by year-end 2026, or alternatively, on a ballpark free cash flow corridor that you have in mind. Could you confirm perhaps whether GBP 50 million to GBP 100 million negative free cash flow corridor is that a realistic ballpark? And do I understand you correctly, therefore, a substantially neutral free cash flow development starting with the second quarter of 2026?

Finally, on free cash flow, would you entertain that you are targeting a positive free cash flow for 2027? Maybe just finally on volumes, back to maybe Adrian. Adrian, is there an updated volume target at all, perhaps for the core volume range? You re obviously guiding to sort of flattish volumes with higher specials, implying declining core volumes in 2026. Do you have an updated mid-term volume target in mind? What would be the key building blocks to get you there in terms of the things you can control outside of improvements in the macro?

Okay. Thanks, Henning. I'll do both the kind of demand questions first, then we'll finish with Doug on free cash flow. I think as far as inventory is concerned, we are -- we hoped to have got the inventory fully balanced by the end of last year, as you know, there were a few disruptions during the year that knocked us off track. I won't go through those. We ended up where we did. We've been, again, quite ruthless in the first quarter and in the first half of this year, replanning. We are destocking further in quarter one. Most of the destocking that we need to do for the year will be done in quarter one, it's already fully on track, both from the January performance and what we're seeing in February. What does that mean?

We've talked in the past about getting all models and all markets in balance. The aged stock profile is now radically improved compared with the beginning of 25 and even the end of 2025. By the end of Q1, we'll be into tens of units around the world, less than one per dealer, that is what we would define as aged, and that is more than six months since it was passed to sales. That includes shipping times as well, don't forget. It's not that they're really old, we just like to keep stock as fresh as possible. The aged stock profile is massively improved. The total stock by the end of March, in the major markets, will be balanced. From Q2, we should see retails matching wholesales. There's still a bit of overhang in China.

The aged stock is now -- is fully under control, the total stock, almost under control, and that will be end of April, approximately, by the time we get corrected in China, too. Overall, in the next one to two months, we'll be in a really good position. In terms of ongoing cost, it's -- there \'s no question that the quarter four last year, to accelerate the sale of those older cars in all markets, we did double down. That cost will not be recurring. We'll revert back to normal levels of support on lease programs, et cetera, after the first quarter of this year. We are in that cleansing phase of the stock, and as we get into the second quarter and the second half of the year, we'll start to see that normalize.

As far as volume is concerned, yeah, absolutely, as per the previous guidance, we don't see a path to 8,000 to 10,000 units a year. We -- sorry, in the near term. We've reset our expectations and then rightsized the business to meet that new business model structure. I won't give specific numbers, but the core models are selling 5,500, 6,000 a year, even in the current market conditions, with different levels of BM effort. We see that is a conservative and achievable level that we can continue with. The specials, depends on which year you look at, we should be in the 250 to 500 range with Valhalla, and then with other specials coming in over the next 3 years.

One thing I would say is that the derivative strategy, and there's other questions being raised about that, so I'll answer some of them preemptively. The derivative strategy is all about an opportunity to relaunch each nameplate every year, to improve the product offer and quality and optionality each year, and to destock the previous models and continually shift the mix of cars so that we support residual values. The good news is that the order cover for those S derivatives is much, much higher than the residual stock, which shows that it's worked, and the dealers are positive about them. That's part of the strategy for derivatives. 5,500, 6,000 is the core business that we expect in the midterm, and the specials on top, with a significantly improved revenue per car and margin.

With the cost structure measures that we've taken, the SG&A improvements that we've planned, we can see a way to that cash flow inflection and to profitable operations in the midterm.

Okay, nice segue. Morning, everyone. Morning, Henning, and thanks for sticking with us through the technical challenges this morning. Henning, I guess probably somewhat unsurprisingly, I'm not going to put a number on the free cash outflow that we expect in 2025, but obviously, we have stated that we expect -- sorry, 2026, we do expect a material improvement versus last year. I think linked very closely to what Adrian has just been describing in terms of the flow for the year, we've said that we're going to see the majority of the burn or the outflow in the first quarter of this year, and then a stabilizing through Q2 to the end of the year, in sync with that stabilization and transformation in the operation.

I fully expect us to have momentum as we exit 2026 into 2027. As we've also said today, from a short to midterm perspective, we do retain that focus on cash optimization, profitable growth, and the objective of getting the business into a form which generates its own cash as soon as possible. Sorry, I can't put any numbers on it or specific timing on it, but the sentiment and the message is still very much there, and the focus is on delivering exactly what I've just said.

Especially the granularity on the remaining stock is very helpful.

And the next question comes from Christian Frenes from Goldman Sachs.

Yes, I'll just kick off with deleveraging and free cash flow. You've talked about a material improvement in 2026 free cash flow. I think the CapEx is clear. You've also made comments on the top line. But in terms of the P&L improvement, can you comment a little bit on some of the key buckets that could drive the material free cash flow improvement? So for example, I think savings are talked about the nonrepeat of GBP 65 million is talked about. You alluded -- you commented just now on the dealer support. But if you could just walk us through some of those buckets and the cadence of that, including net working capital impact. And also if we should include any more assumptions on nonorganic deleveraging aside from the disposal of the Nemi rights? Maybe that's question number one. And then I'll ask question number two.

Okay. There's a lot of questions in question number 1, Christian, but, good morning. Let me have a crack at that. Yeah, look, I think the margin build, in 2026, we tried to illustrate, I think, in the final slide of the deck. Obviously, that is going to be largely underpinned by the fact that we have, you know, a strong sort of specials volume returning back to the mix in 2026. With the 500 Valhallas versus the number of specials that we delivered last year, and obviously that comes with accretive margin, and that will flow through. Specials is a big chunk of that.

Within core, you're right, we expect a stronger performance from the core perspective as well, because we don't expect to see a repeat of the full GBP 65 million of headwind that we suffered in 2025 on the things that we've already talked about, being the dealer support, obviously the investment that we've made in quality and the warranty costs. We'd expect, you know, to continue to invest in the quality of the products, of course, but not to the extent that we did it to last year, with things such as, you know, the big upgrade on thousands of cars on the software earlier in the year. Indeed, we'd expect some of those quality improvements to mean that the warranty costs start to come back down and normalize.

We will be sort of lapping, those as we go through the year. With regards to working capital, I think, relatively stable throughout the course of the year. We're definitely not going to see some of those big swings that we've seen in the last couple of years when it comes to deposit, outflow. We think that'll be much more, sort of normalized and neutral during the course of this year. Then look, as regards to, the F1 IP deal, we're delighted to get that done. I think, you know, it's a good deal for us and a good deal for them.

So GBP 50 million to sort of bolster liquidity to a certain extent as we go through the course of this year, but no further plans to announce at this point.

And just to clarify on your response there. So we should expect the full GBP 65 million incremental savings next year. And should we add savings of GBP 40 million, I think, there on top of that?

Well, we've guided to SG&A will be below GBP 300 million. That's how we guided SG&A this year. Don't forget that last year's SG&A benefited from an GBP 11 million uplift in the revaluation of the AMR warrants, which obviously won't repeat this year. So there's a couple of headwinds in SG&A, but we expect to remain below GBP 300 million. And on the GBP 65 million, as I said, we don't expect all of that to recur. In fact, I would expect the majority of it not to. But as Adrian said, we will still have a little bit of additional dealer support in Q1 before that sort of normalizes and there'll be ongoing incremental improvements in quality, but nothing like the extent to which we saw in 2025.

Okay, that is clear. Thank you. My second question is just on the Valhalla average selling price. If you could just comment on your expectations for that going forward. Should it be the same as we saw in Q4, or any change? Also specifically with respect to the U.S. market, where you talked about an October price increase. I'm just curious also how that applies to the Valhalla. Also, associated with this, the Valkyrie Le Mans edition in Q4, could you just comment on how many units you actually shipped in Q4 and what the implication for 2026 is?

First of all, on Valhalla pricing or Valhalla ASP, I think first of all, the retail base price of the car, we have listed from 1st of April in 2026. That will come into effect on the 1st of April '26 for orders thereafter. What we've seen on option uptake and specification of the first cars that have been delivered and are in the pipeline, is a significant uplift versus the base price. We expect the ASP to continue similar to quarter four as we get through this year. We've seen no fall off in the average value per car. That price increase should give us a little bit of a lift in the second half of the year or last quarter, because that is when it would be effective.

You can assume pretty much consistent with what you've seen on Q4, with a slight upside. In terms of overall pricing -- sorry, in terms of the Le Mans cars, we delivered two cars physically. The rest of those cars will be delivered this year.

The next question comes from Michael Tyndall from HSBC.

A couple of questions, if I may. One for Doug. Doug, Q1, you've been pretty clear about what's going to happen on cash flow. You've got the GBP 50 million in from the F1 naming rights. That puts you, I guess, at about GBP 300 million gross cash. Where are we -- I mean, without asking you for a number on Q1, but I mean, will you stay within that comfortable GBP 200 million to GBP 300 million range that you've spoken to before? I'll come back with the second one.

Okay. All right. Yes. Look, again, I'm not going to get into the specifics. I think we've been pretty clear on how we expect the shape of the year to be from a free cash flow perspective. For Q1, it's the majority of the burn. I'd like to think that we stay close to the range that we've talked about previously. So Q1 this year, we would expect to be an improvement on Q1 last year, but still the majority of the burn for this year.

Okay. And then the second question for Adrian. Just with regards to cyclicality, which I guess at least from where we sit, but I would imagine from where you sit, has been one of the burdens of the business, the cyclicality, which we are trying to kind of move out. I just -- I wonder a bit about why we've released all the specials broadly at the same time. Does that not exacerbate cyclicality? Is there a way that we can sort of start to space these things out? And is that in the plan?

Okay. Thank you, Michael. It's a dilemma, isn't it? Because we wanted to get the specials in because we want to support the life cycle volumes. And yes, there is always a trade-off to make. I don't think that the specials -- sorry, the derivatives, will increase the cyclicality. Why is that the case? They're designed to do the exact opposite. If you just think about DBX, I'll give you one simple example. What we've now done is evacuated the production pipeline of pretty much all non-S derivatives of DBX S, DBX. Which means if you want a non-S version, you buy a stock car. If you want an S version, you'll wait three to six to nine months before you get one, depends on which market you re in. What that does is pre-loads a pipeline with sold orders and encourages the sale of the cars that are in stock or a deposit for a future car.

Because we're doing them all at the same time, but they're all different, there's very few customers, I can't think of one that would come in and want a DBX, a DB12, and a Vantage all at the same time. They will be looking for one of those cars. They have the choice of a stock car, which is an older model, or a fresh car, which is a new model with a different price value proposition and a very different product proposition. We actually see it as a way of bolstering the future order cover and giving the customers a clear choice. When we get through the DBX S, for example, we'll be introducing another derivative for early next year.

Again, we'll back off the S production in the plan, ramp up that new derivative, and people can still order an S, but it will be to order. We get back to that order bank situation. The whole idea of this, again, is to smooth out the actual order profile and to give the customer a clear choice. We know it works from other brands; we just haven t done it before. We are now.

Got it. Got it. One last one, if I can, just for Doug. It's around the agreement with Lucid. You talk in this statement around a GBP 73 million cash liability, which is due in 2026 or later. I'm just curious to know what determines whether it happens in 2026 or later. The comments you made, Adrian, about the future for electric, you know, and this minimum spend of GBP 177 million, how does that work if electric is getting pushed to the right? Is that commitment still there, or is it negotiable?

Hi, Mike again. Yes, so let me take both of those in one sort of answer. You know, we made the initial payments to Lucid back in 2023 when we signed the agreement, I think obviously an awful lot has changed since 2023 with regards to, you know, the way the market sees the evolution to BEV and our transition. We've talked quite openly about the delays as we've gone through the last couple of years that we're expecting. We're in discussions with Lucid over, you know, the timing of those payments relative to when we now expect to start production. That is both with regards to the initial access fee payments and also the commitments on the volumes.

It's all a discussion to when are we actually going to start production on a BEV.

The next question comes from Horst Schneider from Bank of America.

Not many are left. The first one that I have is more on the details regarding the model mix in FY '25, but also in Q4 on the Range cars. Maybe you can provide more granularity on the split within sport cars, city cars. Here, the split between Vantage, DB12, and Vanquish. Regarding the outlook on model mix on the Range models in 2026, where do you expect overall, you expect these flat unit sales, flat wholesale, but within that and the Range models, where you expect the movements, what is going up, what is going down? In that context as well, you talked about this 5 months visibility order book.

What is the order intake by models that you are seeing? Is there any highlight you would point out? The last one is, if you could give any insight into your residual value development, because I think that is a key metric, and we hardly have good insight into that. Any insight into that would be appreciated.

Okay. Thanks, Horst. I'll start with -- going in reverse if I may, I'll start with residual values. I think the key message, as most of you will be aware, is that if we -- when we get supply and demand in balance, and when we get the derivatives launched and the pull from the market for those derivatives, our residuals will improve further. We've already done a lot of work in 2025 on residual values. I'll give you some examples. If you go back a year and a half, we were 5-10 points below the competition, as I say, a three-year period on leasing in the major markets on RVs. We're now much, much closer. I'll give you an example of Vantage without going through every single model in every market.

Specifically Vantage, Vanquish as well, are incredible in terms of the way that they've been set. We are absolutely on par with the strategic competition. The key to supporting residuals is making sure that we don't oversupply. Whilst we've had excess stocks, oversupply is inevitable. As we get through quarter 2 and quarter 3 this year, I already mentioned earlier, this will balance out. Together with those strong, third-party residuals offered on core models, we're heading in the right direction. I still think it's going to take another 3 to 9 months to properly stabilize all of the above, but we're good on track. Vanquish and Vantage are already strong. DBX -- sorry, DB12, just behind them. It's DBX where we need to do the work.

In the meantime, we subvent, marginally, those cars to make sure that they're competitive on the leasing rate. In terms of model-by-model description of order bank, we won't do that. To give you an indication, the S models are well over 50% order cover.

The rest of it, we've got about a five-month order bank on average, but the Ss are way stronger than the non-Ss. Valhalla, of course, is about nine months. If I look across the spectrum, it is improving. As we balance supply and demand, it will naturally improve even further. That s all the foundation for residual value improvements as we move forward.

Try and pick it up a little bit without going into, you know, vast details. Just try and give you a couple of soundbites. If I look at last year, you know, it was relatively stable from a mixed point of view through the year.

For that, Q4 was a little heavier on DBX, on the SUV, because of the launch of the S. Obviously Q4 benefited, obviously, from the strong mix of specials with 152 Valhalla deliveries. As we, as we go into this year, I mean, there's not really too much to highlight. It's relatively smooth, I would say. Q1, probably a little bit light on the SUV mix. We've said today that we expect up to 100 of the Valhallas to be delivered in Q1, so they'll be sort of reweighted Q2 to Q4, a little heavier. Other than that, it's just the ebbs and flows of when the derivative launches come, so nothing particularly special to remark on.

Okay. But in summary, I think the DBX is most critical model, right? So that's maybe where some weakness is. I think it's just the segment, the market, right? It's not the product.

Yes. I think -- well, if you look at the results of all the road tests that have been done on DBX S, it's incredible. I mean, a car that s been in the market a couple of years with some really solid technical improvements to create S, and some visual ones, has beaten Urus and Purosangue repeatedly now in different markets in road tests. The product substance and performance is tremendous. There is a sectoral issue. I mean, you'll probably know, most brands are seeing a shift in 2025 and 2026 compared with, say, '23 or early '24. The market has definitely changed. That said, if you look at the outlook, the macroeconomic rather than the geopolitical, the outlook going forward is, say, mildly positive. It depends which market you look at.

We don't expect a deterioration. We expect stability or slight improvements in conditions as we get through the year. We're well placed with those derivatives to take full advantage of any upside that occurs.

The next question comes from Philippe Houchois from Jefferies.

I've got 2 questions. The first one may be for Doug. is on the 40% gross margin. You reiterated it in your speech, that clears one hurdle. I'm trying to understand, with 29%, if I give you the benefit of the warranty span, we get to 35%, who is above 40%? It almost looks like from the outside that Valhalla could be diluted. Could you confirm that Valhalla gross margin is above group average, or is it below? If it is below, what gets it above? What are the hurdles to really get to 40%? The initial guidance was that it's going to be, you know, valid for all the vehicles range as well as specials.

If you can help me navigate that'll be very helpful.

Well, I can certainly confirm that Valhalla is accretive to the overall group margin, you know, significantly above the 40%. As I said earlier, the 40% remains the target on all new vehicles we're bringing to the market. I think, you know, we'll see an improvement in the margin for some of the reasons that we outlined earlier in terms of lapping some of the costs and investments that we made during the course of last year, and also as we continue to stabilize the operations. You know, we can see the path to the high thirties for this year, which is still the plan.

The target still remains to get every car at 40% or above as we move forward. Obviously, complemented by both the Valhalla being materially above that sort of margin level, but also, you know, a continuation, and I think this is an important point, a continuation of other special models that we will bring to the market that are out there today unannounced, that I think is important from a financial point of view, that you understand that program will continue. Cars like, you know, the Valour and the Valiant and the DBR22 that we've done in the past will continue as part of our cycle plan in the future. And obviously be accretive to margin on the go forward.

Yes. And we can assume those are effectively the most accretive because they leverage a Range car into a special. Is that a fair assumption?

I think we've talked about that in the past where we've looked at, yes, like the Valiant and the Valour, certainly in the era of the Valkyrie, those costs were materially more accretive to margin than the Valkyrie, yes.

Right. And can I get another question on -- I'm a bit confused right now between what we hear from you today. And by the way, a good presentation. I think you've reassured us in many ways. But then I guess stuff from the press, which is not part of your communication. We hear about 20% staff reduction, GBP 40 million savings. I don't see that in the release. Are you validating those numbers we get separately from you? Or what's going on? Where is the mismatch between what you're telling us and what the press is basically talking about right now?

Yes, I'll jump in. Adrian here. We have talked about that openly. That's not speculation. It's actually in the release. So the part of the SG&A push that we can't solve our right sizing or resolve our right-sizing needs purely through headcount, but it is an important part of the overall picture. We have said that we will -- there's already a process underway. We're in consultation. We will reduce the total people costs by circa 20%. It doesn't necessarily mean a direct 20% reduction in absolute headcount numbers, because of the mix of people, and we also account in that headcount cost for some contract and kind of contracted services resource. That is in the plan. It is part of that SG&A restructuring approach. It's not the biggest lever, but it's an important one in order to get us lean and effective for the future.

Let me just specifically pointing to where it is in the release on Page 4 paragraph. So it's all in there, and I guess just an indication of how other people pick up the news and what's important to them in terms of the story.

The next question comes from Nicolai Kempf from Deutsche Bank.

Well done on the 152 Valhallas delivered in Q4. And that's also my first question. The 500 you target this year, is that production driven? Or do you have clients backing all these 500 units? And my second one, just to get some color on the cash out in Q1. Do you have any magnitude how big that could be?

I'll start with Valhalla. We have -- first of all, we have a good order bank for Valhalla, which takes us through almost to the end of this year for delivery. We still have some to sell, but it's quite low numbers. So the build rate and the shipment rate in the next 6 to 8 months is more related to production capacity. This is a very complex car. It was a ground-up development, and we plan for certain capacities in our supply base, which are very difficult to increase. So we're pretty much fixed at the rate that we're currently at, plus or minus a car a week, something of that order of magnitude. So no major opportunity to do it quicker. We could always go slower, but no opportunity to go quicker. So that's the situation with Valhalla.

Yes. And then on the second one, I think, referenced earlier. So obviously, we've been quite clear that Q1 is going to be the biggest outflow. I don't expect it to be worse than the first quarter of...

This concludes today's Q&A session. So I'll hand the call back to Adrian and Doug for any closing comments.

I'd just like to thank again, everybody, for participating in the call today and apologize profusely for the technical issues that we had at the beginning. It may be bad for you, but we had to listen to ourselves twice, which was a great start to a Wednesday morning. So thanks for your time, everybody.

Thanks, everybody. Speak soon.

This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.

Good morning or good afternoon all, and welcome to the Aston Martin Lagonda Q3 2025 Results. My name is Adam, and I'll be your operator today.

I will now hand the floor to Adrian Hallmark to begin. Adrian, please go ahead when you're ready.

Good morning, and thank you, Adam. First of all, a warm welcome to everybody, and thank you for joining the call for the Aston Martin Q3 2025 results. Before we take questions on the line, Doug and I would like to provide a summary of our operational and financial outlook during the last -- sorry, review for the last quarter and outlook for the rest of the year.

Recognize that we already updated the market earlier this month, much of what we will share today, you'll be already aware of, but it is important that we focus now on what we're doing and building forward to highlight some of the actions that we've already taken in response to the challenges that we face.

Let's start with operations, the heart of our business, and that's essentially our cards. As we said at the beginning of this year, we remain focused on refreshing our core models available to customers. Aston has a long-standing tradition of using the S suffix for the high-performance derivatives of core models, and we've continued that tradition this year by adding the Vantage S, DBX S and most recently, the DB12 S.

We now also have the Valante or Roadster models available for all of our sports cars, and we recently celebrated the 60th anniversary of the iconic Valante name with the release of limited edition, Q by Aston Martin, DB 12 and Vanquish models. There will be much more to come in 2026 and each of these small product events providing an opportunity for communications, product relaunch and customer engagement on a global basis.

Valhalla has been a monumental and groundbreaking product for Aston Martin. It's our first mid-engine PHEV in series production, and it's set to transform the business. I'm delighted to confirm that this week, we commenced initial deliveries of Valhalla to Europe. We've achieved homologation there and the first cars have been shipped and will be ready to be delivered to customers in the coming days and weeks. So that's just the start. We will continue that process through the end of this year, and we expect to deliver about 150 cars before we close out 2025.

In parallel to this, there is an extensive customer driving program where some 600 customers, existing and new, are testing the vehicle around the world. This week, the team are in Miami and the feedback has already been incredible. I can only concur with the positive feedback that we've had, having driven the car myself, both on public roads around Warren Shire, but also at pace on the limit again, and the car is truly phenomenal, and that's the feedback we get from all participants in these events.

As you're probably aware, already more than 50% of these cars are already deposited and sold for the full lifetime of the vehicle. That means that any new orders that we generate over the coming days, weeks and months will be delivered successively towards the end of 2026. This level of direct customer engagement is the platform that we will use going forward for the rest of the core range.

We've seen fantastic response actually from these Valhalla supercar buyers when testing the advantage on the same tracks before they go in the high-performance car, we've actually sold core models as a result of them being tested before the main reason for those visits. A clear example, the getting behind of the wheel of the Aston makes a truly unique threading experience and surprises the unconverted.

However, as we flagged earlier this month, our performance this year from a financial and operational point of view has been challenged by some significant macroeconomic headwinds, sustained impact of the U.S. tariffs and continued weak demand in China, compounded by a change in luxury taxation in the second and third quarter of this year.

This trend has also been noted by other premium and luxury automotive peers, but obviously, we have to respond in our way to our specific situation. We've taken decisive and proactive steps to strengthen our position. First of all, we've passed through a second 3% price increase in the U.S. from the 1st of October to offset more of the impact that we've been absorbing due to the tariff increases announced earlier this year.

As we said at the half year results, we provided support to dealers in China in order to accelerate sales, clear stocks and get us ready for a strong '26. Unfortunately, this new luxury tax slowed that process down, but we redoubled our efforts, and we're making strong strides to ensure that we recover the situation by the end of '25 as originally planned.

What we're also doing is taking a long hard look at our OpEx and CapEx plans, both for '25 and in subsequent years. With that in mind, work is underway to review our future cycle plan with the dual aim of optimizing capital investment, while continuing to secure innovative products that meet customer demand in our plan and, of course, meet regulatory requirements. We will not mortgage the future. We will merely reprioritize, retime and refocus that CapEx to make it more efficient going forward.

We'll give you more details on that as we get to the full-year results, but you can expect that the 5-year CapEx envelope instead of the previously indicated GBP 2 billion range will be more in the GBP 1.6 billion to GBP 1.7 billion range, a significant shift, but without damaging our future prospects.

We'll continue to build on our current strengths of exquisitely designed high-performance cars, GTs and SUVs, together with V8 and V12 engines. This is at the heart of Aston Martin's strategy, and we need to embrace this and ensure that we have a business fit for today and the future.

With that overview, I'd now like to hand over to Doug, who will take you through the key financials before we take questions from the invited guests. Thank you. Doug?

Thanks, Adrian. Good morning, everybody. Overall, our Q3 performance reflects the position that we announced earlier in the month and really predicated on the lower-than-expected wholesale volumes. Our Q3 wholesale volumes of 1,430 were down 13% compared to the prior year period and below our previous guidance of expecting Q3 to be broadly in line with the Q3 of last year.

This volume performance reflected the heightened challenges in the global macroeconomic environment, including the ongoing effects of tariffs, weak demand in China and the planned delivery of fewer specials versus last year. Year-to-date revenue and total ASP also reflected the lower specials volumes, when compared with the prior year period.

As a result, revenue decreased by 26% and total ASP decreased by 22%. However, year-to-date core ASP increased by 4%, driven by improved mix, including both Vanquish and Vanquish Valante as well as continued strong options contribution stable at around 18% of core revenue. Core ASP was lower sequentially in Q3 compared to Q2 this year due to the additional dealer support, including in China that we mentioned earlier, foreign exchange and mix within the sports car portfolio.

The fewer special deliveries and to a lesser extent, the lower core volumes also impacted year-to-date gross profit and gross margin. The margin also reflected the impact of the previously communicated warranty costs and other investments made in product quality earlier in the year as well as the elements impacting the core ASP I've just mentioned.

We expect to deliver an improved gross margin performance in Q4, benefiting from additional core derivatives and the contribution from around 150 Valhallas. Year-to-date adjusted EBITDA decreased against the prior year period by GBP 105 million to GBP 8 million, reflecting the gross profit movement. This was partially offset by a 24% decrease in adjusted operating expenses, excluding D&A, as we continue to focus on optimizing our cost base and to drive operating leverage.

Here, we've taken further action and now expect to reduce full-year 2025 adjusted operating expenses, excluding the D&A, to around GBP 275 million from GBP 313 million in 2024. Year-to-date adjusted EBIT decreased by 42% to minus GBP 172 million, with D&A decreasing by 23% to GBP 180 million, primarily reflecting the lower specials volumes ahead of Valhalla deliveries commencing in Q4.

Capital expenditure of GBP 254 million was below the comparative period, and we've taken action to further reduce full-year 2025 CapEx to around GBP 350 million, down from the initial GBP 400 million guidance at the start of the year and the GBP 375 million referenced at the Q3 trading update.

Free cash outflow in Q3 was GBP 94 million, and from a liquidity perspective, and as previously announced, we received the net proceeds of GBP 106 million for the sale of the shares in AMLGP, which resulted in total liquidity at the end of Q3 of GBP 248 million. Whilst we announced at the beginning of the month, our expectation that we'd no longer be free cash flow positive in H2 2025, we do expect to deliver an improved sequential Q4 performance for the reasons already outlined.

As we move into next year, we expect to complement the current core portfolio with additional derivatives and to deliver around 500 Valhallas with our production and delivery cadence established at the end of 2025. This, in addition to driving further operating leverage and being disciplined in our approach to CapEx supports our outlook for materially improved financial performance in 2026.

With that, I'll hand back to Adam, so we can start to take some questions in the time we have remaining.

[Operator Instructions]. Our first question today comes from Henning Cosman from Barclays.

I have 3, please, if I may. Really good to see the further action on CapEx and OpEx, but I have to ask, how do you manage to do that with no effect to cycle plans or so on? Obviously, you're telling us the cycle plan is under review, but do you have that leeway headroom to cut these costs? Perhaps, in other words, why wouldn't you have done that anyway? That's the first question. What are the effects?

Second question, it's also great to see these new variants come through, S variants across the model range, but what levers do you really have to stimulate demand because I believe these variants, they tend to take up quite a large share of the overall model mix and don't really tend to be that incremental over and above the existing unit sales. Perhaps, you could remind us, what levers you're foreseeing to increase overall unit sales?

Finally, third question on the liquidity. I don't know, Doug, if you can give us a feel for where you think you might be ending the full-year '25 in terms of liquidity? Perhaps, also a feel beyond 2025, perhaps not the time to talk about whether you're foreseeing free cash flow breakeven next year or not. If you could just give us a bit of color if you think you can stay well within that GBP 200 million to GBP 300 million liquidity range without any need for further debt or equity, that would be great.

Adrian here. I'll kick off, and I'll pick up on the demand and variance and their influence, and then we'll come on to the financials. I think, first of all, the idea of the variance without giving a detailed forecast of next year's volume, even without incremental volume, the variances are a better average selling price and a different product proposition to the products that we've sold in 2025.

The levers that we have are they're new models. They offer new performance, new features and a different price value relationship. They give us some reason to go back to existing customers, which is clearly a significant opportunity for resell and upgrading through their life cycle, but also an opportunity in a platform to recommunicate the nameplate because there's still people that don't know every model that we do in the world and get new business to. It's an ASP activation. It's an existing customer repurchase opportunity. Of course, it's comms up to get more awareness for each nameplate and keep the brand salient in between the big life cycle changes on new product launches, so that's the basis of those.

Just in terms of the mix of them, to clarify that point, as we move through the year, we intend to essentially switch most production to these new models so that the existing core range is ordered on demand and is a much smaller percentage of our total mix. That also helps the residual values.

Okay. I'll pick up on the questions 1 and 3, Henning, which I think was kind of linked to be honest with you. Obviously, from a cost and CapEx point of view, you can see that we're taking the action that we outlined that we would when we updated the market early in October, and indeed, on the cost front, so on SG&A, it's really a continuation of the action that we've been sort of taking all year. I think you can expect SG&A at the end of this year, as I said, around GBP 275 million. Hopefully, a little bit improved versus what we previously indicated. Then our job is to try and obviously offset the impact of any inflationary or other impacts on the SG&A cost base as we move into next year and try and make sure that we do deliver operating leverage.

From a CapEx perspective, it's really about having a really good long hard look at the product cycle plan, making sure that we do it in the most efficient way that we possibly can, a little bit of rephasing with the benefit of electrification moving to the right, as we've already outlined earlier in the year. We're already running at the kind of rate that I would expect CapEx to be in the window of next year, so we're guiding to circa GBP 350 million this year. I think next year, it's probably likely to be somewhere between GBP 300 million and GBP 350 million. We're focused on ensuring that we don't impact any near-term revenue-generating products with the rephasing of the CapEx plan. That's how we'll go about doing that.

Of course, those 2 things are then linked to your third question around liquidity. Of course, we're absolutely laser-focused on ensuring that the company has the liquidity it requires. That GBP 200 million to GBP 300 million window that I've talked about previously remains the sort of goal and the avenue that we're operating within. We were around GBP 250 million of liquidity at the end of Q3. Look, we're targeting to make sure that we stay in that window as we move through next year.

The next question comes from Harry Martin at Bernstein.

I have 2 questions on the Valhalla to start with. The first one, with the activation going on right now and in the coming months, would you expect to be fully sold for the 2026 build slots by the year-end of this year? What is your updated expectation for the full 999?

Then the second question on the Valhalla is just how many of the 150 deliveries in the guide for this year are earmarked for the U.S. if we do get an ongoing government shutdown there?

Okay. Harry, so I'll start with the easy one first. The number of cars going to the states is around 40 in the final quarter of this year, 4-0. In respect to the government shutdown, the certification process that we have to run is complete. The documentation is all being submitted. Until about 10 days ago, we were still getting responses from them until they ran out of funding, so it is tight. We no longer have a significant risk on quotas.

We're not belieful about this, but the unfortunate and critical situation that JLR found themselves in has probably taken significant pressure off the quota allocation risk for quarter 4. So yes, you're right, we now just still face the certification risk, but until a few days ago, we were still in active contact. The work has been done. The documents are submitted. We're cautiously optimistic that, that will flow, and we should know in the coming weeks how that looks.

In terms of the sellout of Valhalla, I mean, it would be great if we could sell them all tomorrow. By the year-end, I think certainly, we will have sold the majority that will be available in 2026 because we've already sold most of them as we sit here today, if you add the total numbers up.

Yes, and in terms of the 999, that's still a plan over the 2-year period or the bit year period while the car is in the marketplace. We are encouraged by the fact we've got more than 50% -- we had more than 50% of those sold before anybody saw the actual car or drove it, so we have a high number of people that are currently specing, negotiating and finalizing arrangements for the car. I won't predict exact numbers and exact dates, but it's looking positive as we open up the marketing channel.

Then I wondered Adrian, if I could just ask for an update on some of the strategic agenda. It's totally acceptable with a lot of the market issues hitting demand for the luxury manufacturers out there, but when you came in, you highlighted opportunities versus peers in terms of option availability and more personalization revenue and also on optimizing manufacturing and supplier processes. I wondered if you could share any data points that you have, maybe the personalization rates on those new S variants or any other data points that you have on some of those strategic goals that you had when you came in?

Yes. I think if we start from the really good news, if you think of, I don't know, 6 or 9 months ago, the condition that we were in operationally as a company was pretty dire. The first-time or right first-time performance in manufacturing was nowhere near industry norms. I think we quoted 55%, 65% of vehicles being right first time out of the factory, massive shortages from suppliers, problems with production and launch of cars, etc., some of which is caused by external and some by internal factors.

The good news is we fixed all of that. If you were to sit in the regular reviews that we have on a weekly basis, supply stability, manufacturing KPIs are normal, 96% to 98% right first time and 4 or 5 suppliers that we are monitoring or working with on a weekly basis to ensure that things move smoothly compared with 30, 40 critical ones going back a year. I call that business as usual.

The quality process at the end of the line, the quality flow to dealers, we've seen massive reductions in demerits and in issues in that part of the process. From an industrial operational point of view, I would say, we have done the turnaround. We have a balanced production system and it works. We've also taken huge cost out of it.

We mentioned the transformation program, which covers cost of quality, material costs, etc., all of the 39 fields of action that we've defined are well underway with huge amounts of energy and effective activities going on across the company. That's partly the reason why we've been able to cap the SG&A this year, and we're, again, quietly confident that we can sustain similar levels of SG&A next year despite the inflationary effects. The underlying efficiency and capability of the company, we have made a step change with.

If I look at the external side and the added-value and incremental value per car, I have to be honest that the rate of development and launch of those incremental options to catch up with competition has been slower than we originally planned, and it's for 3 reasons. One, these derivatives that we've launched, bear in mind, we didn't have any of these assets, all of them take time and effort. They didn't have -- or sorry, they took a lot of the resource effort that we had in engineering and in the whole process chain last year, and we, I guess, underestimated the effort that would take.

Together with the significant quality improvements that we've made during the period, it meant that there was more limited resource to be able to really boost those options. We have added circa 15, but we didn't add the circa 40 that we wanted. The derivatives have been done, body styles as well as these performance and character models. Options, that will continue, and it will ramp up during this year and watch this space for that. Operationally, strengthened market ASP and customer attractiveness, derivatives are very successful. About 1/3 of the incremental options that we wanted this year have been delivered, but we will play catch-up next year.

The next question is from Michael Tyndall from HSBC.

Just the one for me. If I look at your guide for shipments, it feels like we are again expecting a very strong Q4. I guess the concern in my head, I can see that Valhalla is incremental, and that's part of why we're going to see that sequential lift, but it also feels like there's a big lift in the core volumes. What confidence do you have that we don't end up in the same situation we were this year where first half of next year, you are then trying to unwind that inventory?

Okay, Michael, thanks for the question. The first thing I would say, if you look at the inventory development through the year this year, we've also been pretty effective at bringing that down significantly. As we get towards the year-end, you're right, we have a disproportional reliance on Q4 for various historic reasons, but the market is also stronger in Q4 than other quarters and particularly December. If I separate 2 elements, if I look at the retail rate for this year, we will see a step-up in retail rate in quarter 4. That's predicted, and we're again, quietly confident that, that will occur.

As we stand today from the low point that we've seen in stocks, we do and can imagine that by the year-end, that total stock in the pipeline will go up again to somewhere between the low point and the start of the year, but not at the level of the beginning of the year. That's based around the combination of retails and the phasing of those wholesales. You're right that those late Valhallas in particular, we will be able to invoice them, but some of them will be so late that maybe some customers won't take delivery in this year, so the wholesale will happen, but the retail may be held off until the 1st of January for residual value reasons.

Looking forward and part of our planning that we've done for the CapEx, OpEx and outlook, we have made sure that for next year, we have an even more balanced approach throughout the 4 quarters and that we continue this trend to bring the stock down in line with norms and market expectations. Final thought, we have been quite prudent, at least on the baseline planning for next year. on core models, and we have already preplanned production, sales and stocks accordingly.

[Operator Instructions]. The next question comes from Akshat Kacker from JPMorgan.

Akshat from JPMorgan. Two quick ones, please. The first one, coming back to the core portfolio. Given the product cycle plan review, and as you mentioned, electrification is moving to the right, could you just give us some more insight on what that means for the core portfolio going forward? How are you thinking about powertrain derivatives or probably if there's a new generation of core cards that is within that CapEx plan of GBP 1.7 billion over 5 years?

The second question is on the underlying demand trends. I see you have talked about an order book that is still at 5 months of sales. Could you just give us more insight on the regional demand that you're seeing, specifically in the U.S. as you have implemented a second price hike in the region? Also, if you could talk about some demand trends in Europe?

Thanks for the questions. I think first, powertrains, it's pretty consistent with what we said in that we will be predominantly between now and in 2035, if you use that time window, we will be predominantly combustion engine and electrified combustion engine dominated. We will have BEVs in the first part of the 2030s, but it will be -- in total, it will be a low proportion of the volume over that 10-year run. We believe high-performance ICE and ever more efficient EU7 engines, both V8 and V12 should be our foundation stones for the future.

Between now and the relaunch of the current core models, we will also be launching a number of specials based around the various technology stacks that we have available to us. Without going through those today, each of them sequentially and well timed will give us an ASP and a cash boost each year between '26 all the way through to 2030, 2031. That's as far as we planned the specials at this stage.

In respect to the core programs, which is key, I can absolutely confirm that the period between late 20s and early 30s in the next 5 years, we will refresh all of our core nameplates with new models that are both exterior, interior and powertrain and e-architecture and technology renewed from the ground up. That is secured within the CapEx plan that we've indicated in this GBP 1.6 billion, GBP 1.7 billion range that we've now defined. As Doug mentioned, how we've done that is ruthless prioritization of the specials and efficient use of technologies across all programs, SUVs and sports cars and changing the way that we buy and create that platform in the next generation of cars.

I think in terms of demand and the outlook, the U.S. is interesting. Overall, we definitely can see there's a little bit of holdback or more competition because of tariffs. It has created inflation and it's created a bit of macro uncertainty, which is making customers slower to make decisions. We still have good footfall. We still have great interest in the products and helped massively by the great press that we get on everything that we launch, including DBX S being ranked better than the Purosangue, which was fantastic. The general demand is strong, but the conversion rate is slower than we would normally expect and competitors are working a lot harder to keep their customers.

China is very difficult and remains very difficult. U.K. is pretty strong. Europe is in line with our expectations. Between the 2, we're slightly above. Middle East remains an area that we want to develop in the future, but there's particular reasons why we can't fully activate the brand potential there, but that will be an area of focus for us in 2026. Finally, India, with a trade deal at least highlighted or outlined, we're working with government and within the team to look at what can we do to get ready for that opening up of India, which could be quite significant as a result of the drop in import tariffs on cars built in the U.K. is a significant opportunity. That's the outlook for the next 12 months.

We have no further questions. I'll hand the call back to the team for any closing comments.

Just thank you for your time and the clear questions and look forward to seeing you for the year-end call. Thank you, very much.

Thanks, everyone. Have a good day.

This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.

Good morning, everyone, and thank you for joining us today for Aston Martin's Half 1 2025 results. It's a pleasure to be here alongside Doug Lafferty, CFO; and James Arnold, Head of Investor Relations.

Before Doug takes you through the financial performance in detail, I'm going to provide a summary of our key achievements and areas of focus during the first half, as we prepare for a planned increase in volumes, which will drive enhanced financial performance in the second half of 2025. This includes the expected delivery of positive free cash flow generation in the second half and a 2025 adjusted EBIT improving towards breakeven.

As we outlined at the 2024 results, following an intense period of product development, our focus has shifted from pure volume orientation to value-driven growth in order to create a sustainably profitable business model. And I'm delighted to report that we're progressing well with our operational and cost transformation program, the details of which I'll share with you shortly.

Our first half performance, as guided, reflected our disciplined approach to production and deliveries. This resulted in retail volumes outpacing our wholesale volume by over 40% as we seek to optimize our stock levels around the world by model. We're already seeing the benefits from the investment in our next generation of core models through strong ASP growth, up 7% to GBP 192,000. And this will further improve as we continue to launch new derivatives, including the recently announced Vantage S, DBX S, Vantage Roadster and Vanquish Volante and drive further option sales. Supported by robust demand and a disciplined supply policy, once these core models become established across our markets, I expect to see our forward order book improve beyond the current 5-month horizon.

As we look at the broader global operating environment, tariffs imposed by the U.S. government have been a particular issue for us to deal with, adding a degree of uncertainty to global trade and economic performance. While the U.K. government moved quickly to secure a trade agreement with the U.S., announcing this on the 8th of May, the scheme only became operational on the 30th of June. This left us with 24 hours to invoice the entire quarter worth of vehicle sales in the U.S.

Under which the first 100,000 U.K.-made cars imported into the U.S. each calendar year qualify for a reduced tariff of 10%. And any U.K.-made cars sold beyond the 100,000 units will attract the higher rate of tariffs of 27.5%. We thank the U.K. government for their efforts in negotiating this preferential rate, which currently puts the U.K. carmakers at a better position than those in many other countries. But at the same time, let's not forget the 10% rate remains far higher than the previous rate of 2.5%.

As a consequence of these changes, we have already implemented a dynamic pricing strategy, announcing in June an initial 3% increase in the U.S. as we seek to mitigate the financial impact of the 10% tariff. We continue to engage with the U.K. government regarding the first come, first served quota mechanism. This is due to the uncertainty that it creates in terms of planning and forecasting the current financial year and then quarterly planning from '26 onwards. We have been assured that government understands our concerns and we will wait further clarification on how we will ensure that there is a fair allocation within this U.S. quota, providing the whole U.K. car industry with the ability to access this 10% rate on an ongoing basis.

Also, when we look at the global operating environment, the market for luxury vehicles in China remains extremely subdued. As such, we're taking further action to support our China dealer partners to reduce their stock levels, and this will help us to benefit from the next generation of cars and improved market conditions that we expect to emerge in the beginning of 2026.

Finally, I'm pleased to announce today that we shortly expect to complete the sale of our shares in the Aramco Formula One Team. This follows the announcement in March this year of our intention to enhance liquidity through the sale alongside further investment from the Yew Tree Consortium. In total, these combined activities will exceed our guided liquidity enhancement of GBP 125 million, with the gross proceeds alone from the AMR GP sale expected to be around GBP 110 million.

Adjusting for the forthcoming sale, total liquidity at the end of the period will have increased to circa GBP 340 million, positioning us well ahead of our expected free cash flow generation in the second half of this year.

Now moving on to recent exciting developments across our core product range. Our product innovation focus, which will support sustainable profit growth in the future, has seen the launch this year of 4 new derivatives as promised.

These include the Vantage Roadster and Vanquish Volante convertibles in addition to the new performance-focused DBX S and the Vantage S. As I mentioned in the Q1 results, the S Brand has a long association with Aston Martin and remains very much a part of our strategy moving forward to introduce derivatives through the life cycle and across the whole product range. This keeps our models fresh and continues to offer customers a growing range of choice with greater focus on personalization and options. I'm confident these derivatives will support a strong ramp-up in volumes and financial performance in the second half of this year and beyond.

As I've mentioned previously, Aston Martin is fortunate to be one of a few global brands who can successfully deliver ultra-exclusive specials. These models epitomize the innovation and performance at the beating heart of the Aston Martin brand. Continuing with this momentum in specials, key milestone for 2025 is the eagerly awaited delivery of Valhalla, our first mid-engine plug-in hybrid electric vehicle and it's a game changer for the brand, bringing hypercar performance to a supercar price segment. We expect it to be a significant contributor to our financial performance over the next 2 to 2.5 years.

Valhalla will mark our entry into a new segment of the market for Aston Martin, as well as a step forward in our commitment to hybrid and electrified technologies with performance at the core of their purpose. With the initial low volume production now underway, deliveries are expected to commence in the fourth quarter of 2025, and we have been advancing customer specifications for around 1/3 of the vehicles already ordered and scheduled into production. We plan to build just 999 units over a 2.5-year period, and we already have a 12-month order book in place. This impressive order book is prior to customers even driving the vehicle. And in the coming weeks, we will have prominent dynamic and static displays following the great experiences we already delivered at Monaco and Goodwood Festival.

Looking ahead to the third quarter of this year, media and customer drives will be happening on a global basis to further develop the awareness of this vehicle. As we enter the final stages of the project, one of the key outstanding processes is the timely completion of certification and homologation across our key markets. We're currently working successfully and tirelessly to ensure that we meet all of those time lines. And it looks today like we're fully on track.

Following the return of Aston Martin to the pinnacle of endurance rating with the Valkyrie hypercar and its recent participation at Léman and the World Endurance Championship, announced the launch also of 10 track only Valkyrie Léman specials. We expect about half of these to be delivered in 2025 with the remainder in 2026.

Now moving to a key focus for us this year, our transformation program. This forms part of the unique foundations of Aston Martin, underpinned by the strategy and investment in recent years of Lawrence Stroll, the Yew Tree Consortium and all of our strategic investors. I want to introduce the same passion and energy that we brought to our brand and products into how we operate as a business. And we'll do this alongside instilling operational excellence and discipline.

Shortly after I joined last year, we've been analyzing all areas of the company to identify how we benchmark and where significant improvements can be made. And I'm delighted to say that there are many areas and opportunities, as you'll see in the coming slides and we're already starting to demonstrate real progress, which in the years to follow, will enhance our performance as we realize the full potential of this iconic brand.

Starting with brand awareness and demand generation which should enhance the quality of our order book. We set out clear plans this year to operate with a disciplined approach to production and to supply that position us strongly as we enter 2026. In '26, we will have our enhanced range of core models and new derivatives. And in addition to these, we're seeking to maximize the value of every vehicle, which is why we're continuing to deliver additional options to offer customers and meet the desire for even greater personalization. We've maintained a stable rate of contribution to core revenue at about 18%. And in the future, we'll look to build on this.

Customer loyalty and retention is another key factor that will underpin our future success. We have a great opportunity with the upcoming Valhalla with over 50% of the orders to date from customers new to Aston Martin. Not only does this demonstrate the power and awareness of our brand, but it also provides us with the opportunity to showcase our core range of cars to circa 500 new customers. From a cost base and productivity point of view, we've continued to work with our colleagues across the business to deliver on the previously announced head count reductions.

In line with guidance, the operational cost savings from this will start to be realized in the second half of this year with a circa GBP 25 million annualized rate of savings just in this single activity. But that's not the end. There are other savings that we're activating across the business through a disciplined approach and we expect to deliver operating leverage with a '25 financial year SG&A falling well below the GBP 300 million that we saw in '24, supporting our goal of improved effectiveness.

We also successfully completed the rollout of our new ERP system in our production sites. The rollout of Gaydon in quarter 2 was executed with minimal interruption to the business, thanks to careful planning and intense execution. We've progressed a modern, integrated and efficient cloud-based systems that will drive greater operating efficiencies across the supply chain.

A key to product innovation through a life cycle is offering our customers the most relevant, exciting and compelling vehicles in the sector. We've clearly demonstrated that already with the derivatives I've outlined, we can assure you that we'll have more to offer in the future as we progress towards hybrid electrified performance technology.

And finally, delivering excellence in quality and product launch cycles. Here, we plan to build on the significant learnings from the intense period of new launches that we've been through over the past couple of years.

In particular, ensuring that we provide sufficient capacity and time between launches to be able to deliver programs and ramps up effectively. And Valhalla now remains our key focus, as I mentioned, and we are on track for the first customer deliveries in the last quarter of this year. We also need to deliver the high standards and consistency across our portfolio. We've already seen significant improvement in cars completing production process right first time from about 65% during the second half of 2024 to 95% today. As I previously indicated, was our target.

This has huge benefits across the organization, removing unnecessary costs and efficiencies and delays. Also benefiting the business is the decision that we announced in quarter 1 this year to invest in software and infotainment system improvements in our cars. This, in addition to some further warranty cost increased spend, circa GBP 20 million in half 1 compared to last year, but already we are seeing the benefits from this program with improved customer satisfaction scores, a trend I would expect to see accelerate as we move into the second half of this year.

So lots of positive developments as we aim to get the business consistently performing and becoming sustainably profitable for the future.

With that, I'd now like to hand over to Doug so he can take you through the financial results in detail as well as the outlook for the rest of the year. Thank you.

Thank you, Adrian, and good morning, everyone. Before we move into Q&A, I'll take you through our financial performance for the first half of 2025 and our guidance for the remainder of the year.

As Adrian mentioned, overall, our first half performance was largely in line with guidance. Reflecting fewer specials deliveries and the uncertainty we and many of our peers have experienced in relation to changes in U.S. tariffs and the wider macroeconomic environment. Looking at the detail on the slide. Wholesale volumes were broadly in line with the prior year at 1,922 as we followed a disciplined approach to production and deliveries in support of stock optimization. This resulted in retail volumes outpacing wholesales by over 40% as we prepare for growth in the second half of the year, particularly in Q4, driven by our new core derivatives and specials.

In terms of revenue at GBP 454 million, this reflected a 25% reduction compared to the first half of 2024, largely as a result of fewer specials delivered as we prepare to commence our Valhalla deliveries in Q4 2025. Looking at our core performance. ASP increased by 7% to GBP 192,000, benefiting from our next-generation models, including the flagship V12 Vanquish, Additionally, demand for unique product personalization continued to drive strong contribution to core revenue of 18%, broadly in line with the prior year period.

As a result of the lower specials volumes, increased warranty costs and other investments made in enhancing product quality, adjusted EBIT decreased by 22% in the first half to GBP 122 million loss with depreciation and amortization decreasing by 27% to GBP 119 million, also primarily driven by the fewer specials.

As we turn to our first half performance in more detail, the split of our wholesales is shown on the left-hand side of the slide. Sport and GT volumes increased slightly year-on-year to represent over 70% of the mix, reflecting next-generation models of DB12, Vantage and Vanquish. SUV volumes remained in line with the first half of 2024 at just over 25% of the mix.

As Adrian has mentioned, we expect to realize the benefits of our full range of new core models and derivatives, including Vantage Roadster, Vanquish Volante, DBX S and Vantage S as we ramp up deliveries through the second half of the year. Specials reduced by 100 units to just 18 deliveries in the first half, reflecting the completion of previous programs ahead of the commencement of our Valhalla deliveries expected in Q4 this year. For the full year, we continue to expect to deliver modest total wholesale volume growth when compared to 2024.

On the right-hand side of the slide, total ASP decreased by 25%, again reflecting the fewer specials deliveries compared to the prior year period, while core ASP, as I've already mentioned, increased by 7%. Overall, volumes remained well balanced across all regions in H1 2025, with the Americas and EMEA, excluding the U.K., collectively representing 62% of wholesales. This was despite the challenges relating to the U.S. tariff implementation, which only came into effect on the 30th of June 2025. The movements in volumes across the U.K. and EMEA reflected the timing of model transitions and deliveries into these markets.

Volumes in APAC decreased by 9% with volumes in China remaining broadly flat compared with the first half of 2024, reflecting ongoing macroeconomic weakness continuing to impact demand, a trend we expect to continue at least in the near term.

As Adrian has outlined, we are taking further action to support our China dealer network to help position them well to benefit from our next-generation core model range when the market conditions improve.

As we turn to the next slide, as expected, the impact of fewer specials deliveries is reflected in the decline in gross margin year-on-year. The impact of core wholesales despite a slight increase in volumes and improved mix from the next generation of models was also dilutive to gross margin as a result of the warranty costs and other investments made in product quality. This includes the previously communicated investment in software and infotainment enhancements, which has resulted in recent improvements in customer satisfaction.

Additionally, gross margin was impacted by the U.S. tariff increases. As Adrian has mentioned, we have implemented a dynamic pricing strategy announcing in June an initial 3% increase in the U.S. as we seek to mitigate the financial impact of the additional tariff. As we ramp up production in H2, benefiting from additional derivatives and the contribution from Valhalla, we now expect full year 2025 gross margin to improve from current levels to be broadly in line with the prior year.

Adjusted EBIT decreased by 22% year-on-year to a loss of GBP 122 million, primarily reflecting the gross profit movement, which was partially offset by a 24% decrease in adjusted operating expenses, excluding D&A, with D&A also decreasing by 27%. The decrease in adjusted operating expenses aligns with our focus on optimizing the cost base as part of our ongoing transformation program. It also includes an GBP 11 million benefit from the secondary warrant revaluation uplift associated with the forthcoming sale of our investment in AMR GP.

Our previously announced organizational adjustments are progressing as planned, and we are on track to deliver a reduction in adjusted operating expenses, excluding D&A, in the full year 2025, now expected to be below GBP 300 million. With updated D&A guidance of circa GBP 340 million, adjusted EBIT is now expected to improve towards breakeven. This also reflects the impact from foreign exchange rate movements, the additional investment in software and infotainment enhancements and the support for our China dealer network.

As shown on the right-hand side of the slide, net adjusted financing costs decreased to GBP 9 million from GBP 88 million, primarily due to a GBP 78 million year-on-year impact of noncash U.S. dollar debt revaluations resulting from the weaker U.S. dollar. Finally, first half of 2025 adjusting items excluded the redemption premiums associated with the refinancing of our senior secured notes in H1 2024, though included the expected costs associated with the organizational adjustments.

Turning to free cash flow, which was broadly stable year-on-year with an outflow of GBP 321 million. This reflects the lower EBIT in addition to higher net cash interest paid of GBP 69 million. As expected, working capital improved year-on-year to an outflow of GBP 45 million compared to the GBP 119 million outflow in the first half of 2024. The key driver here being the deposit inflow relating to Valhalla with deposits held increasing by GBP 28 million compared with an GBP 84 million outflow in the prior year period relating mainly to the delivery of Valour and Valkyrie specials.

Capital expenditure of GBP 171 million was slightly below the comparative period which meant focused on future product pipeline, including Valhalla. In H2, we will accelerate our investment in new product developments, which will support our growth strategy. CapEx for the full year is still expected to be around GBP 400 million. As we ramp up deliveries of our new derivatives and specials through the rest of the year, we still expect to deliver positive free cash flow generation in H2 driven by performance in the fourth quarter.

To finish with cash and debt, we ended the first half of the year with total liquidity of GBP 228 million. We expect to enhance liquidity with the gross proceeds of around GBP 110 million in Q3 2025 from the forthcoming completion of the sale of our investment in AMR GP. Net debt increased to GBP 1.38 billion, combined with the decline in EBITDA year-on-year, this resulted in an adjusted net leverage ratio of 6.7x. As we prepare to deliver a significantly stronger second half performance and through disciplined strategic delivery and profitable growth in the future, we expect to deleverage in line with our medium-term targets.

Finally, looking ahead to the remainder of 2025. We continue to closely monitor global events and will remain agile and responding to changes in the external environment. That said, we continue to expect to deliver a significantly stronger performance in the second half of the year compared with the first half, commencing with Q3 improvements but primarily driven by Q4. This is due to the benefits from initial Valhalla deliveries in addition to the contribution from our full range of core models, including first deliveries of Vantage Roadster, Vanquish Volante, the DBX S and the Vantage S.

As I've already mentioned and as shown in detail on the slide, we've slightly revised some of our guidance for 2025. Additionally, the impact of the recently announced U.S. tariffs on the global economy remains uncertain. And whilst we now have clarity on the 10% tariff rate for the U.K. automotive manufacturers, we continue to monitor the current quota mechanism and how this will impact our deliveries, especially for the higher-priced specials, including Valhalla towards the end of the year.

Thank you. And I'll now hand over to the operator to open for the Q&A.

[Operator Instructions] And our first question comes from Harry Martin at Bernstein.

I'll start on the U.S. tariff the disclosure on the 3% price increase. I just had a couple of clarifications. Firstly, is it right to infer you're expecting to be able to absorb and offset 2/3 of the tariff, so the other 7%? And then also, can we expect U.S. deliveries in the future, maybe even this year, skew more to January versus Q4 with that uncertainty about the quota limit? And can you simply skew Q4 deliveries in the future to Europe and the other key markets to smooth the impact on the rest of the business?

And then the remainder of my question is on the order book. So starting with Valhalla. When we spoke 3 months ago, Adrian, you said that the 2026 Valhalla deliveries were 90% covered, a 12-month order book still implies some slots available in the second half of next year and limited incremental progress. So can I just ask about what the progress has been in the order book on the Valhalla this quarter? Have there been any cancellations in the U.S. around the tariffs or any other impacts there? And do you expect the full 999 units to be sold?

And then just a final one on the order book. For the wider group, the ambition has been for some time to increase the length of the book beyond that 5 months. I think that the hope was that in H1 this year by limiting deliveries to dealers as you've done successfully versus retail sales that you might be able to extend that order book. So should we see some progress in the second half of the year?

Okay. Thanks, Harry. We'll start with the tariffs then. First of all, on the price increases, we clearly are in a dynamic situation. We will remain vigilant as to the responsive manufacturers that we compete with. And any further pricing will be a result of that analysis. So it's probably not the end, but to now, we're watching and waiting for all the other movements to occur.

A great example being until a few days ago, there was no deal with Europe. That would have made -- if that hadn't been achieved, it would make obviously a difference. But remain vigilant. We will not be planning to absorb all of the tariff cost. We'll be addressing that on a competitive basis.

In terms of timing of cars, you're absolutely right. The quota system is the remaining jeopardy with the tariff system. We're delighted with the fact that there's been a deal done with the U.K. and U.S., the government have worked hard to achieve that, and it was fast, and that was a major relief despite the fact we had to almost stop shipments for the quarter of the year for 1/3 of our volume, which was quite exciting to put it mildly. The good news is we didn't catch it all up on the last day of the quarter.

But going forward, you're absolutely right, because of the nature of the U.K. export profile, the first come, first served basis of the current agreement means that by default with JLR being about 3/4 of the total U.S. imports from the U.K., it could put pressure at any given period on the number of slots available at the 10% quota.

So we would -- if the quota run out would be exposed to 27.5% ,so we will remain dynamic on that as well. Of course, going forward, exactly as you've suggested, the difficulty is that quarter 4 is historically and naturally the biggest quarter for sales for all companies in the U.S. market, not just in Aston Martin phenomenon.

So moving to quarter 1, it means that we have to bring production forward earlier in the year to meet that quarter 4 demand. And because of the timing of what's happened with the tariffs, we cannot do that this year. So we have to rely upon the quota system working for 2025, but we definitely will adapt in '26. Just like we did in quarter 1 for quarter 2, we switched production for the U.S. into quarter 1 and out of the rest of the world, got the vehicles into the U.S. and switched out to the U.S. in quarter 2 and back to the rest of the world. We manage that first tariff uncertainty period effectively. We've now got to do that ongoing.

In terms of the order book for Valhalla, it's a moving feast. The net position between quarter 1 and quarter 2 is that we have more orders for Valhalla. I said the end of '26 as a general statement, and it's still about the end of '26. What we've not seen yet because people are holding off until they've seen the car physically and driven the car. We've not seen the next spike in orders. We're largely covered for 2026. And if you walk in today to order a Valhalla, it would be late in quarter 4 that you get the build slot in some markets even at quarter 1 in '27. So we're still plus or minus in the same space.

We haven't seen massive orders that we have -- sorry, we haven't seen massive cancellations. We've seen some as a result of the tariff situation and general economic environment, but the net position is still better than it was in quarter 1. And I'm confident, following Goodwood, Monaco and the events that we've done and all the activities we've coming for the rest of this year, including drive events, from September through to November in Europe and America, where people get into the car, we'll see another acceleration of orders on the vehicle.

To put it in context, just overall, 1/3 of the lifetime built for Valhalla is already secured with second deposits. We're in good state.

I think that was...

U.S. tariffs.

Just on the 5-month order...

Sorry, the rest of the range, yes. It's definitely by model. If I look across the range, with Vanquish, we're way beyond 5 months. With Vantage Roadster, same, Vantage generally, we're about on track and the same with DB12, DBX707 is remaining the challenge. But the S model, which we're just launching will be shifted to markets in quarter 3 in real volumes. And effectively, we'll be 90% of the build for the rest of this year.

We're quite confident from dealer first reactions and dealer first activity that we will, with DBX extend the order cover better than we have seen with 707 to date. And just as a taste, early next year, there are 2 more product actions of DBX derivatives to further polarize the range, focus it in 2 different directions, and we're confident that S through to these next 2 derivatives will be a great bridge to building that order bank worldwide.

Next question comes from Akshat Kacker from JPMorgan.

Three questions, please. The first one on China. Could you just talk about the level of dealer support that's expected in 2025, and if you could help us understand the nature of these payments, is this a one-off payment? Or do you expect further payout if market demand does not improve?

The second question is on inventories. After a volatile quarter that we have seen in the second quarter, could you please talk about the current situation of core car model inventories in the U.S.? Are stock levels in line with your expectations? Or will you be restocking in Q3?

And the last question is on capital investments. I think you have reiterated the GBP 400 million spend this year after the full refresh of your core car product portfolio. Could you just give us more details on CapEx allocation? Is there a higher-than-expected spend on the Valkyrie? Is it going towards powertrain transition? Are you upgrading manufacturing facilities? Just trying to understand this better.

Okay. So on China, in specific details on exactly how much we're supporting dealers by, but it's a sort of double-digit million sum to give you some guide low double digits. And that support is really in the guide of additional variable marketing to allow the dealers to move vehicles, which would be in inventory for a little while through to end customers. So we don't expect it to repeat. We expect that action to have the impact that we'd like it to have during the second half of this year and for the action to leave the dealers in China in a better position as and when the market returns to some kind of normality.

So the market in China is remains very, very stagnant, I think, for ourselves and for others. So this action is to help stimulate the sale of the inventory of the dealers have so that we can free up space together new products in next year.

On the CapEx, yes, so we're reiterating the GBP 400 million. We're obviously running slightly behind that from a run rate point of view in the first half, but that was exactly as we expected.

But in terms of construct, it's not dissimilar to how we've described it before. So the vast majority of the CapEx is obviously on the engineering programs. And as you'd expect, there's quite a chunk of CapEx on the Valhalla in the first half of this year. But then as we move through the second half of the year, that starts to pivot to the next range of vehicles that we're going to be bringing out. So at least 80%, 85% of the total CapEx bill is on R&D engineering for vehicles. The remainder is on -- what I call keeping the lights on and things like that, but nothing material in terms of changes and capital investment from a factory point of view is more just ongoing maintenance, investments in IT and a little bit of investment in marketing CapEx, but the vast majority remains behind the car programs.

Great. And just the last one on coal car model inventories in the U.S., please?

Yes. So if we look globally, first of all, the inventory is down by about 1/3 compared with the first of January this year. So major shift and we're just about in line with our ideal stock level, give or take, 100, 150 units. We're in a really good shape.

In particular, in the U.S., because of that 3 months moratorium on shipping, we were able to run down stocks significantly. So they are even slightly better than the global average reduction that we have achieved.

Of course, the -- not only the total quantum, the stock has reduced significantly. But as we go through the year and launch these new derivatives before that Doug mentioned in particular, the stock levels will stay similar to the point that we've achieved in the midpart of the year, but the mix will be totally changed. So there will be, Volantes and Roadster and DBS in there, and Vantage S when they weren't in the first half. But it's not just a different level in total quantum but also it's the fresh projects, new products with new appeal. So that's why we're more confident about the growth potential in the second half of the year now that we've reset

[Operator Instructions] The next question comes from Horst Schneider from Bank of America.

Just a few questions left from my side. The first one is, as you can imagine, is about gross liquidity in relation to the cash burn that you had in Q2, we all have got in mind that you always said you feel comfortable with this GBP 200 million to GBP 300 million of gross liquidity, you are now rather at the lower end of this range. And it sounds that there's still going to be a cash burn in Q3, which could push you basically by the end of Q3 below your target gross liquidity level. Is that the reason of concern? And does that maybe require any action? That's question number one.

Question number two, I hear you on inventories. But when I look at your balance sheet, I can't really see that the inventories have come down. So maybe you can explain that again to a stupid analyst?

And the third question that I have on, when you talk about orders, and I heard you on the various models, can you also maybe specify what's the demand trend by region. I think it's still really bad in China also because the luxury tax has increased there. But maybe what's the trade-off between U.S. and Europe?

I think I'll probably take the first 2. So on the liquidity, yes, obviously, we've talked in our release about the position from a liquidity point of view. The free cash flow in Q2 was impacted a little bit by timing. So as Adrian mentioned, we actually ended up shipping or crossing the sort of tax line, if you like, on all of the cars that went into the U.S. only on the 30th of June, and that makes it very difficult to collect all the cash in relation to those vehicles. We did a very good job as a team to get the cars across the line, but there's a little bit of an overhang, so there's a catch-up from a receivables point of view.

And secondly, sort of front and center on the announcement here is that we're expecting very imminently to have the liquidity boost from the sale of the Formula One shares, and that's around GBP 110 million. So between those 2 sorts of things, that will put us squarely back in the territory of being more comfortable than it would appear at the end of Q2. And then, of course, we're expecting to generate cash in the second half of the year. So from a liquidity point of view, we don't have any concerns, and there's no action at this stage for sure.

With regards to the inventory, I think there's sort of perhaps a little misunderstanding. So we don't hold any dealer inventory on our balance sheet. So when Adrian is talking about dealer inventory and when we talk about the relationship between retail and wholesale, you'll never see that on the balance sheet. The inventory on the balance sheet is inventory pertaining to either company work in progress, company stock or anything like that. So there's no swings on the inventory and the balance sheet as it relates to the inventory in the field.

And the third question, I think, was again on retail?

Sorry, just quickly, but then we should see basically a more meaningful reduction in the trade receivables, they have come down, but not really that meaningful. That should reflect the dealer inventories, right?

Yes, to an extent, but it also, of course, reflects the timing of the sales force. So over the last several periods, the timing of the sales has certainly been the biggest swing from a trade receivables point of view. But as I said, from an inventory perspective, that's the company inventory.

And on the demand by region, I think -- if we break it down into 6 parts, U.K. is pretty much on plan and doing okay. Europe, the same. U.S., despite the tariff disruption, the underlying performance is what we expected. So it's fairly stable. It's our supply that's being disrupted, not the dealers' ability to sell the stock that they had. Middle East is not at its full potential for us, but it's stable and predictable.

China is a big problem, child, no question. And we have a small tactical problem in Asia Pacific, again, not as significant -- anywhere near as significant as China, just a little bit of rebalancing. So overall, 4 out of the 6 regions are in good shape, and we can rely upon.

So on that point, I think we're just about out of time. I'd like to thank everybody for participating again, and we're looking forward to acceleration in the second half and some more clarity on the tariffs in particular and the quota system. Thank you, everybody.

Thank you very much for your attendance. You may now disconnect your lines.