Aston Martin aims for quadrupled earnings, £2 billion revenue

Luxury car manufacturer Aston Martin Lagonda has shared its optimistic outlook for the coming years, projecting a quadrupling of earnings by 2027. The company remains on track to meet and potentially exceed its targets for 2024 and 2025.

The financial goals set by Aston Martin in 2020 aim to achieve approximately £2 billion in revenue and £500 million in adjusted earnings before interest, tax, depreciation, and amortization (EBITDA). The company expects to substantially achieve these targets in 2024 and potentially surpass them in 2025.

In 2022, Aston Martin reported revenue of £1.38 billion and adjusted EBITDA of £190.2 million, indicating its current financial strength.

Looking ahead, Aston Martin has established ambitious mid-term targets for 2027 and 2028. These targets include generating around £2.5 billion in revenue and £800 million in adjusted EBITDA, with an approximate margin of 30%. This demonstrates the company’s commitment to solidifying its position in the luxury car market.

Additionally, Aston Martin aims to improve its balance sheet by reducing leverage. The company has set a new target leverage ratio of approximately 1.5 times within the next two years. Furthermore, it anticipates achieving “sustainably positive” free cash flow and maintaining a net leverage ratio of around 1.0 times between 2027 and 2028.

To support its growth and innovation, Aston Martin plans to invest approximately £2 billion between 2023 and 2027. This investment will comprise approximately £1.8 billion in capital expenditures and £200 million in technology access fees paid to strategic suppliers and partners.

A notable recent partnership for Aston Martin is the agreement with Lucid Group Inc, announced on Monday. Through this agreement, Aston Martin will gain access to Lucid’s battery electric vehicle technology. In return, Aston Martin will provide $132 million in total cash and issue 28.4 million shares to Lucid, making Lucid a 3.7% shareholder in Aston Martin.

Aston Martin’s bright future relies on its commitment to meeting and surpassing its financial targets, reducing leverage, and investing in cutting-edge technology.

Aston Martin’s shares (LSE: AML) have declined 4.5% during early trading in London, with the stock price reaching 346.20 pence.