McLaren's 2020 Results

[SSO]

Just posted my analysis of McLaren's 2020 results and a few perspectives on their future:

https://karenable.com/mclarens-2020-results/

Thoughts? Will they make it?

[RobYob]

Interesting to see how the financial sausage is made.

They certainly seen to have a healthier position and better plan for the future than some manufacturers.

Quality is an interesting one, I don't know myself if it's all about technical robustness of design or a culture of continuous improvement or some other mantra. McLaren seem to want to lean toward the first as they do have an work culture of thoroughly burning people out after a few years resulting in a lot of engineering staff churn.

[Jobbo]

The two figures which are telling to me are the two which aren’t in the estimate range. They sold more cars at retail than they estimated but EBITDA was worse than the worst estimate.

[V8Granite]

I probably see 20 Mclarens to every Ferrari I see, they seem far more attainable or just have much nicer finance packages or deals.

Dave!

[SSO]

The two figures which are telling to me are the two which aren’t in the estimate range. They sold more cars at retail than they estimated but EBITDA was worse than the worst estimate.

The EBITDA miss was more likely due to a shortfall in the F1 prize money they were expecting.

[Jobbo]

That would be reflected in the group revenue figure, which was bang in the middle of the estimate, wouldn’t it?

[mik]

More likely they thought they had some variable cost they could flex down.... only to realise it wasn’t that flexible?

[Sundayjumper]

Wrong mix of cars ? Lots of low margin cars and not enough specials ?

[Jobbo]

Wrong mix of cars ? Lots of low margin cars and not enough specials ?

That sounds like the reason, yet McLaren's own statement (from SSO's article) said:
The good news is McLaren broadly delivered against the Q3 expectations. They did this through a very rich product mix. Over 60% of the cars sold in Q4 were high margin Speedtails, Sabres, Elvas, and 765LTs. McLaren delivered an estimated 78 Ultimate Series cars in Q4 2020 with 120-130 still to come in 2021.

I know they're not a public company so the reporting requirements are far less onerous but this just sounds inconsistent.

[SSO]

Wrong mix of cars ? Lots of low margin cars and not enough specials ?

The miss was GBP 4 mil. To put it in perspective, if delivery on two Speedtails and a Sabre moved from end Dec to beginning of Jan, that would result in the miss.