Jardine Motor Interests

• Contribution from Zhongsheng substantially lower due to challenging market environment and accounting change to better reflect current progress
• The sale of the Group’s UK Motors business completed in 2023

The Group received a substantially lower underlying contribution of US$139 million from its 21% interest in Zhongsheng in 2023 (2022 reported contribution from Zhongsheng was US$263 million), as its new car business faced a challenging market environment for new luxury vehicle sales volumes and margins during the year, due to China’s EV transition and intense auto market competition.

As noted last year, we have changed our accounting for Zhongsheng’s results in 2023 to reflect an estimate of their results for the second half of the year, based on recent external analysts’ forecasts. We believe this is a better way to ensure the Group’s financial statements reflect current progress and developments at Zhongsheng, amid the fast-moving automotive market on the Chinese mainland. This change has been adopted prospectively from 1st January 2023 and, as such, the Group’s share of Zhongsheng’s estimated 2023 results is presented as underlying profit. Whereas, for the 2022 contribution from Zhongsheng, the Group reported its results with six months in arrears. Had the current year accounting policy also applied in 2022, the drop in underlying contribution from Zhongsheng recognised in 2023 would have been approximately 40% smaller. The Group’s share of its 2022 second half results is included as a non-trading item, so as not to distort the current year’s underlying performance.

Despite the significant reduction in Zhongsheng’s 2023 contribution and continuing challenging market conditions, we believe that Zhongsheng has strong market insight, deep relationships on the Chinese mainland premium vehicle segment, and superb capabilities to execute its well-developed strategy focussing on aftermarket auto services and used car business, which will deliver long-term value for the Group.

In March 2023, the sale of the Group’s motors business in the United Kingdom was completed.