IGI Logo

JLR’s FY23 annual report highlights that its strategy for transitioning to a modern luxury vision, centered around electric vehicles, is driven by three platforms. Refocus 2.0 ‘value creation system’ will simplify its operating framework and governance, with greater focus on systematic value creation and business excellence. It is strengthening and upskilling its human capital for skills of the future and preparing for the targeted transition. Additionally, it has entered into strategic partnerships for bringing new technologies to support the transformation and growth of its business. Lastly, it has maintained its sustainability goal of carbon net zero by 2039 by driving transition to all electric future. Key insights from the annual report are:

* JLR is reimagining its approach to position itself as a genuine modern luxury brand, adopting a House of Brands organizational structure. The objective is to amplify the distinctive identity of each of its four focused JLR’s brands, viz Range Rover, Defender, Discovery, and Jaguar, and accelerate the realization of JLR’s vision of being a modern luxury brand.

* JLR’s roadmap for EV transition would be driven by three platforms, viz. a) Electrified Modular Architecture (EMA) – EV only platform, b) flexible Modular Longitudinal Architecture (MLA) platform, offering flexibility between ICE, hybrid, and pure-electric, and c) JEA for all electric Jaguars. The BEV RR/RR Sport are on track for 2024 launch and Jaguar for 2025.

* ‘Reimagine’ is the roadmap for the transformation of JLR into a sustainable, electric-first modern luxury business, enabling it to deliver double-digit EBIT margins by FY26 and become net cash positive by FY25. Refocus 2.0, transformation program for fulfilment of ‘Reimagine’, is a “Value Creation System” that will govern everything it does as a business.

* It is actively reinforcing and upskilling its human capital to acquire the skills required for the future and is proactively preparing for the targeted transition. It strengthened its senior management team in FY23 and have added over 800 professionals to get future ready. Also, it is reskilling 29,000 people (including retailer employees) over the next three years in skills vital to electrification, digital, and autonomous cars.

* Through global partnerships announced in FY23, it plans to deliver a) automated driving systems and AI-powered connected services from 2025 with NVIDIA, b) increase performance and range for its next gen EVs using silicon carbide semiconductor inverter technologies developed with Wolfspeed, and c) accelerate the digital transformation of its industrial operations with Tata Technologies.

* JLRs volumes (ex JV) grew ~9% in FY23 to 321k, whereas realizations grew 14.4% to GBP71.2k/units, leading to 24.5% growth in net revenues to GBP22.8b. EBITDA margins expanded by 100bp to 11.3%, and EBITDA grew 36% to GBP2.57b. Adj. PAT stood at GBP40m (vs. net loss of GBP744m in FY22). CFO grew 2.3x to GBP2.87b and capex grew 16% to GBP2.35b, leading to FCF of GBP521m (vs. FCF outflow of GBP1.16b in FY22). Net debt reduced to GBP3b (from GBP3.2b in FY22).

To Read Complete Report & Disclaimer Click Here

For More Motilal Oswal Securities Ltd Disclaimer http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html SEBI Registration number is INH000000412

Above views are of the author and not of the website kindly read disclaimer