Aston Martin Lagonda (AML.L) experienced a significant stock decline of 13% on Wednesday, becoming the FTSE 250’s biggest loser. This drop followed the luxury carmaker’s announcement of job cuts and a postponement of its electric vehicle (EV) launch. The news accompanied the release of the company’s 2024 preliminary financial results.
Table Content:
Restructuring and Financial Performance
Known for its iconic association with the James Bond franchise, Aston Martin (AML.L) revealed plans to eliminate approximately 170 roles, representing 5% of its global workforce. This strategic move aims to optimize the company’s cost structure and is projected to generate annual savings of around £25 million ($31.6 million). Roughly half of these savings are anticipated to materialize in the 2025 fiscal year, offset by approximately £10 million in transformation costs.
The company’s 2024 preliminary results indicated a 3% decline in revenue to £1.58 billion. Adjusted EBITDA also decreased by 11% to £271 million, landing at the lower end of the guidance provided in November, which projected adjusted EBITDA between £270 million and £280 million. While the operating loss narrowed to £99.5 million, net debt saw a substantial increase of 43%, reaching £1.16 billion. 2024 proved challenging for Aston Martin (AML.L), marked by profit warnings and two instances of seeking additional funding from investors.
Future Outlook and Electric Vehicle Strategy
Looking ahead to 2025, Aston Martin (AML.L) anticipates “material financial performance improvement” and positive adjusted EBIT. The company reaffirmed its medium-term guidance for 2027/28, forecasting revenue of around £2.5 billion and adjusted EBIT of approximately £400 million. However, the launch of its first battery electric vehicle (BEV) has been pushed back to the “latter part of this decade.” This marks the second delay for the BEV, initially slated for a 2026 release.
In recent years, Aston Martin (AML.L) has introduced a revamped core model lineup, starting with the DB12 in the latter half of 2023, followed by the new Vantage in February 2024. A 2025 upgrade for the DBX707 SUV was also announced, along with the September launch of the flagship V12 Vanquish sports car. The company confirmed that the DB12 leads in sales, followed by the Vantage, Vanquish, and then the DBX707.
Focus on the Valhalla Supercar
For 2025, Aston Martin (AML.L) is prioritizing the launch of the plug-in hybrid Valhalla supercar, with orders already exceeding the first year’s production capacity. Hargreaves Lansdown (HL.L) equity analyst Aarin Chiekrie observed that Aston Martin (AML.L) aims to revitalize revenue growth by stimulating demand for its ultra-luxury, high-profitability models, particularly in markets like the USA and China.
However, Chiekrie cautioned investors about potential challenges, including the rumored imposition of a 25% tariff by former US President Trump on British car imports, which could significantly impact Aston Martin (AML.L).
Conclusion
Aston Martin’s recent announcements signal a period of strategic restructuring and adaptation. While the company remains optimistic about its future prospects, challenges persist, including the delayed EV launch and potential trade implications. The success of the Valhalla supercar and the company’s ability to navigate these obstacles will be crucial in determining its future financial performance.
