Inchcape LON: INCH reported first-quarter results that management said were in line with expectations, supported by growth in the Americas and contributions from distribution contracts won in recent years. On the company’s Q1 2026 trading call, Group Chief Financial Officer Adrian Lewis said organic revenue grew 6% in the quarter, while reported revenue increased 8% to £2.3 billion.
Lewis said performance benefited from Inchcape’s “diversified market and brand portfolio,” which he said provides resilience. He added that the quarter’s growth was “substantially driven” by the scaling of distribution contracts secured over recent years, helping deliver share gains across a range of markets.
Inchcape’s volumes rose 9% versus what Lewis described as 6% growth in its markets. Lewis noted volume growth ran ahead of organic revenue growth due to share gains and regional mix, particularly faster-growing markets in the Americas where average selling prices are lower. He also cautioned that Q1 comparisons were “relatively soft” and become more challenging later in the year, while reiterating that the first quarter is typically the smallest due to seasonal patterns.
Regional performance: strength in the Americas, pressure in APAC
Lewis said the Americas delivered strong growth amid supportive market conditions. Market volumes in the region rose 18%, with “very high levels of market growth” in Colombia and Peru and a growing market in Chile. Looking ahead, Lewis said Inchcape expects the Americas environment to remain supportive through the rest of 2026, with the typical seasonal weighting toward the second half.
In Asia-Pacific (APAC), Lewis said market volumes rose 4% but Inchcape’s market share “moderated” and the company underperformed, continuing trends seen in the second half of 2025. He pointed to several headwinds, including weakness in the premium segment in markets where Inchcape over-indexes, and rising competition from Chinese brands, particularly in Australia where the macro environment has softened and “our core brand performance in that market has been weak.”
Lewis also cited partial offsets, including “momentum building” in recently won contracts with Chinese OEMs, naming Foton and Deepal in Australia and Great Wall Motors in Indonesia.
In Europe and Africa, Lewis said market volumes increased 1% and Inchcape grew its market share. He attributed outperformance to the core business, contributions from distribution contracts won in recent years, and a “good performance” from the recently acquired business in Iceland. Lewis said the company’s Africa business also performed well, and he expects continued momentum in Europe and Africa for the remainder of 2026, supported by a full-year contribution from Iceland and growing contributions from recent contract wins.
APAC actions: OEM collaboration, cost cuts, and portfolio optimization
Management outlined a set of actions to address APAC challenges. Lewis said the company is increasing collaboration with OEM partners on product positioning, implementing a cost reduction program focused on regional headquarters and specific markets, and optimizing the contract portfolio in the region. He said Inchcape would provide an update at its half-year results in July.
For the remainder of 2026, Lewis said Inchcape expects continued challenges in APAC that will impact first-half revenue and margins. He added that this will be compounded by “brand supply phasing in half one” as key OEMs reconfigure facilities for new energy vehicle production. However, he said management actions are expected to start improving performance and supporting margins in the second half.
During Q&A, Lewis addressed questions on why APAC performance lagged despite strong growth in some markets. He highlighted Hong Kong as an outlier, saying demand was pulled forward after incentives for electric vehicles were “substantially withdrawn,” driving market growth of over 100% in Q1, which he called “not a sustainable level of growth.” Lewis said Inchcape does not expect Hong Kong to “materially” grow this year.
Lewis also said operational leverage in the Americas would help offset APAC challenges, which he cited as a reason the company reiterated its guidance.
Demand indicators and macro monitoring
Asked about early signs of demand changes and the potential impact of geopolitical developments, Lewis said the company monitors lead indicators including website traffic, test drives, and customer engagement on advertising and sales platforms. He said Inchcape has seen “no real change in demand” across the markets it operates.
Lewis noted that in some markets experiencing fuel price increases or duty changes, the company has seen shifts in what consumers are researching—toward new energy vehicles—though he said this has not yet shown up in underlying demand or purchases. He added that the timing of macro impacts varies by market, and that Inchcape invests in AI and technology to link changes in indicators to sales and operational planning decisions, including vehicle ordering and supply planning.
Lewis also touched on the Middle East situation, saying there had been “no direct impact” on the business to date, though there had been “some immaterial disruption to logistics” in Europe and Africa. He said consumer demand trends remained unchanged and the company was closely monitoring developments.
Contracts, competition, and capital allocation
Lewis said Inchcape continues to execute its Accelerate+ strategy, highlighting recent contract awards including Volvo in Ecuador and Deepal in Barbados, as well as the continued contribution from contracts secured in prior years.
Responding to a question on contract wins, Lewis said the company won “over 50 contracts” across 2023 and 2024, and that “about 80%” were with Chinese brands across all three regions. He said Inchcape typically brings new brands into markets with relatively low initial capital investment and that it can take one to three years to figure out positioning, with meaningful scaling often occurring in years three to five. Lewis described scale as averaging “1%-2% of the local market share.” He also said launches have sometimes taken longer than expected due to homologation, specification alignment, and production allocation.
On competitive dynamics in Australia, Lewis said Chinese brands accounted for “just over 20%” of the market last year and were “just in and around the 30% level” in the first quarter. He said Inchcape has seen momentum in its Deepal EV brand and early traction in Foton as it expands into the ute segment.
On capital allocation, Lewis said the company remains committed to share buybacks and has made progress on its latest £175 million program, repurchasing approximately £27 million as of April 29. He said Inchcape has reduced its share count by around 14% over the last 21 months through buybacks. Lewis added that acquisitions remain “a critical part” of value creation, describing an active bolt-on pipeline with a focus on disciplined valuations and value accretion, particularly in existing markets. He also said the company has ruled out near-term acquisitions in APAC while it focuses on execution there, citing Latin America and Europe and Africa as areas of opportunity.
Outlook reiterated, with second-half weighting expected
Lewis reiterated Inchcape’s 2026 guidance, saying the company still expects growth at constant currency in line with medium-term targets and another second-half weighted performance for revenue and profit. He said second-half weighting reflects the typical seasonality of the Americas and the expected recovery in APAC as supply phasing normalizes and management actions take effect.
For 2026, Lewis said the company expects to deliver EPS growth of greater than 10%, driven by:
- Organic volume growth toward the lower end of the 3%-5% guidance range
- Resilient operating margins of around 6%
- Free cash flow conversion of circa 100%
In closing remarks, Lewis said Inchcape “performed well in the first quarter” and remains positioned to deliver its EPS growth target for the year and over the medium term.
About Inchcape LON: INCH
Inchcape is the leading global automotive distributor, with operations across six continents. By combining our in-market expertise with our unique technology and advanced data analytics, we create innovative customer experiences that deliver outstanding performance for our partners – building stronger automotive brands and creating sustainable growth. Our distribution platform connects the products of mobility company partners with customers, and our responsibilities span product planning and pricing, import and logistics, brand and marketing to operating digital sales, managing physical sales and aftermarket service channels.
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