LONDON (dpa-AFX) - Aston Martin Lagonda Global Holdings plc (AML.L) Monday announced that it now expects third-quarter adjusted EBITDA and wholesale volumes to be below current market expectations.
Further, the company updated its fiscal 2024 outlook, now expecting adjusted EBITDA to be slightly below last year. The company previously projected enhanced profitability and EBITDA, supported by high single-digit percentage wholesale volume growth.
Adrian Hallmark, Aston Martin Chief Executive Officer, said, 'Near perfect execution was required to meet the Company's ambitious 2024 plan. However, it has become clear that we need to take decisive action to adjust our production volumes for 2024 given a combination of supplier disruption, the weak macroeconomic environment in China and a proactive decision to strategically re-align our production plans to optimise efficiency and achieve a more balanced delivery cadence in the future.'
For the year, the company now expects adjusted EBITDA margin in the high teen's percentage, down from previously expected low 20s percentage.
Gross margin is now expected to be modestly below 40 percent, while the previous outlook was around 40 percent.
Wholesale volumes for the year are now expected to decline by high single digit percentage from last year, compared to earlier expected high single digit volume growth.
The company added that it no longer expects to achieve positive free cash flow in H2'24.
The outlook revision reflects a strategic realignment of its 2024 wholesale volumes, making around 1,000 unit reduction to address disruption in its supply chain and continued macroeconomic weakness in China.
Aston Martin noted that external factors within the global automotive industry, including supply chain disruption and weak demand in China, are now impacting its volume outlook for the remainder of 2024.
In addition, the company is experiencing a growing number of late component arrivals due to disruption at several of its suppliers, and there is significant ramp-up in production for the second half of the year, following new model introductions.
Due to these, an increasing number of vehicles are taking longer to complete, with these issues impacting the efficiency of its operations and delaying the delivery of its vehicles.
The Company is addressing the supply chain challenges and continues to recognise the significant market opportunity that China represents as its macroeconomic environment improves.
Further ahead, the company remains focused on achieving its previously communicated targets for fiscal 2025.
Aston Martin plans to announce its third-quarter results on October 30.
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