Irish Continental Group Plc · EURONEXT:IR5B

Irish Continental — H1 2004 Earnings Presentation

61 slides from Irish Continental's earnings presentation, Sep 9, 2004

  1. Slide 1: ICG Profile

    ICG Profile Capital Employed 2003 1. Irish Ferries % Biggest ferry company operating between UK / Continent and Republic of Ireland. ƒ Modern fleet of large ships ƒ Major barriers to entry 65 ƒ Significant operational gearing ƒ Very strong free cash flow 2. Ship Chartering Division Diversified ship

  2. Slide 2: Interim Results

    Interim Results Half Year Half Year Full Year 2004 2003 2003 €m €m €m Turnover 135.8 136.9 304.3 EBITDA 16.4 18.2 53.4 Depreciation / Amortisation (12.2) (12.7) (24.5) Operating Profit 4.2 5.5 28.9 Exceptional Item - - (4.8) Interest (2.8) (3.6) (6.4) PBT 1.4 1.9 17.7 EPS Basic 5.1c 5.3c 71.6c EPS A

  3. Slide 3: Container Division

    Container Division Half Year Half Year Full Year 2004 2003 2003 €m €m €m Turnover 64.7 65.0 134.8 EBITDA 1.8 3.2 6.2 Depreciation/ Amortisation (1.4) (1.3) (2.6) Operating Profit 0.4 1.9 3.6 ƒ Operating profit significantly affected by late commissioning of new berth in Dublin Terminal and congestio

  4. Slide 4: Key Issues

    KEY ISSUES ƒ Competitive Rate environment door/door ƒ Feeder business strong ƒ Significant disruption and additional costs due to delays by Dublin Port Authority in commissioning new berth (Fully Commissioned in July 2004). ƒ Dublin Port Tunnel (July 2006) will significantly enhance access to DFT

  5. Slide 5: Container Routes

    Container Routes Grangemouth 14 ships Belfast South Shields 13 ports Dublin Dublin Liverpool 24 routes Waterford Cork Holyhead Cork Holyhead Immingham Pembroke Pembroke Felixstowe Tilbury Thamesport Southampton Hamburg Rotterdam Rotterdam Antwerp Le Havre Bilbao

  6. Slide 6: Ireland - Continent/UK Market Share

    Ireland - Continent/UK Market Share 29% 2003 % 19% CAGR - Volume % 20 18 16 13% 14 12 9% 9% 10 8% Market 8 6% 6% ICG 5% 6 4 2 0 Since Last Last 2003 1992 5 Yrs 3 Yrs

  7. Slide 7: Container Terminal Market

    Container Terminal Market 1.1 Million Teu in 2003 ƒ 118 year lease of 33 acres ƒ Capacity of terminal increased by 50% (June 2004) Picture courtesy of The Irish Times

  8. Slide 8: Container Handling in Ireland Market Share

    Container Handling in Ireland Market Share 23% 2003 % CAGR Volume % 12 11% 10 9% 8% 8 6% 6% Market 6 5% ICG 4 3% 2 1% 0 Since Last Last 2003 1992 5 Yrs 3 Yrs

  9. Slide 9: Interim Results Ferries & Ship Chartering

    Interim Results Ferries & Ship Chartering Half Year Half Year Full Year 2004 2003 2003 €m €m €m Turnover 71.5 71.9 170.2 EBITDA 14.6 15.0 42.4* Depreciation/ Amortisation (10.8) (11.4) (21.9) Operating Profit 3.8 3.6 20.5 * After exceptional item of €4.8m

  10. Slide 10: Key Areas

    Key Areas ƒ Irish Ferries ƒ Ship chartering

  11. Slide 11: Ship Chartering Division

    Ship Chartering Division Night Ferry; 2400 Pride of Bilbao Ö beds, 580 cars, built 1986 Day Ferry; 600 cars or 108 trucks built Õ 1995 Pride of Cherbourg

  12. Slide 12: Ship Chartering Division

    Ship Chartering Division ƒ Use of ship market knowledge and balance sheet strength to avail of potential charter opportunities in ferry and container shipping markets. ƒ Pride of Bilbao on charter to P&O since 1992. Next optional renewal date October 2007. Pride of Cherbourg on charter to P&O until

  13. Slide 13: Irish Ferries

    [rish Ferries co BP Te oe ST ULYSSES ee —— TRISH FERRIES

  14. Slide 14: Ulysses 2001

    Ulysses 2001 Ulysses 2001 Boeing 747

  15. Slide 15: Irish Ferries Route Structure

    Irish Ferries Route Structure Larne Stranraer Belfast Cairnryan Dublin Liverpool Rosslare Holyhead Pembroke Rotterdam Roscoff Cherbourg

  16. Slide 16: Irish Ferries Route Structure

    Irish Ferries Route Structure ƒ Focus on short routes with high utilisation of ships. ƒ Major barriers to entry in Holyhead & Pembroke for key slots ƒ UK / Rep. Ireland Routes ƒ Over 90% of cars travel on short routes into Dublin and Rosslare ƒ Over 50% of RoRo units travel on short routes into Dubl

  17. Slide 17: Passenger Car Market UK-Ireland

    Passenger Car Market UK ÍÎ Ireland Market REPUBLIC OF IRELAND Volumes (Cars) Market Irish Irish Ferries Ferries Share HI : Jan - June 2004 - 4% - 6% 41% July - Aug. 2004 - 3% + 3% 41% 01/01 - 23/08/04 - 3% - 3% 41% ƒ Week car market due to low fare airlines (particularly ex. UK to Continent) and rel

  18. Slide 18: Market Share – Cars 2004 v 2003

    Market Share – Cars 2004 v 2003 Republic of Ireland - UK 2003 2004 H.1 % % Irish Ferries 41 41 Stena Line 47 49 P&O Irish Sea 2 2 Isle of Man Steam Packet Co. 5 4 Swansea Cork 5 4 Total 100 100

  19. Slide 19: Car Performance Irish Ferries Market Share

    Car Performance Irish Ferries Market Share Rep. of Ireland % 43% 50 42% 41% 43% 45 39% 41% 40 35 30 25 20 15 10 5 0 2000 2001 2002 2003 2003 H.1 2004 H.1

  20. Slide 20: Irish Ferries - Distribution

    Irish Ferries - Distribution Car Booking Report 2004 All Markets Share Half Year Half Year 2004 2003 % % Call Centres 30 39 At our Ports 12 12 Internet 36 23 Direct 78 74 Travel Trade 22 26 Total 100 100

  21. Slide 21: Next Time, Let's Take the Car

    “NEXT TIME, LETS TAKE THE CAR” IRELAND. IT'S BETTER BY FAR - BY CAR! For freedom, flexibility and convenience - 1 ~ there's no better way to travel than with |é if your own car. Irish Ferries offer you the most modern fleet, great value fares and inclusive package holidays. Ferries & Holidays to Ire

  22. Slide 22: Ulysses - World's Largest Car Ferry

    Ulysses - World’s Earcest Car BeIEY ros ar , ik a = Te mens nd Bs yd vb fl Maus hei few Var yuo Call 0818 300 400 N.lreland 00353 818 300 400 or see your travel agent = IRISH FERRIES Etats Pay Economy, Travel Furst Class

  23. Slide 23: RoRo Freight Market UK-Ireland 2004

    RoRo Freight Market UK-Ireland 2004 REPUBLIC OF IRELAND Volumes All Routes Market Irish Market (Freight Units) UK - Ireland Ferries Share Jan - June 2004 6% 6% 6% 27% July - Aug. 2004 5% 5% 5% 28% 01/01 - 23/08 6% 6% 5% 27% ƒ Strong growth in the market in line with Ireland’s economic growth and fur

  24. Slide 24: Market Share – RoRo 2004 v 2003

    Market Share – RoRo 2004 V 2003 Rep. of Ireland - UK 2003 2004 H.1 % % Irish Ferries 28 27 Stena Line 20 25 P&O Irish Sea 30 24 Norse Merchant 21 24 Swansea Cork 1 0 Total 100 100 ƒTo June 2004 Short sea share 52% up from 47% in 2003. On Central Corridor short sea growth 20% versus long sea decline

  25. Slide 25: RoRo Freight Performance Irish Ferries Market Share

    RoRo Freight Performance Irish Ferries Market Share Rep. of Ireland % 28% 30 27% 27% 27% 27% 26% 25 20 15 10 5 0 2000 2001 2002 2003 2003 H.1 2004 H.1

  26. Slide 26: RoRo Freight Traffic

    RoRo Freight Traffic (1.48m) 000s Units Compound 1600 Average 1400 Growth Rates 1200 1992 - 2003 50% 1000 3.8% p.a. 800 Via Northern Ireland Ports 600 72% 400 50% 11.7% p.a. 200 28% Via Republic of Ireland Ports 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 6.8% p.a.

  27. Slide 27: RoRo Freight Traffic Key Slots

    RoRo Freight Traffic Key Slots

  28. Slide 28: RoRo Market Analysis

    RoRo Market Analysis Greater Integration between Ireland & UK/Continent 1992 2003 CAGR % % Value of Imports & Exports €45.1bn €200.5bn 14.6% GDP €40.0bn €137.9bn(e) 11.9% Imports & Exports as % of GDP 113% 145%

  29. Slide 29: Irish Ferries Revenue Mix

    Irish Ferries Revenue Mix 2003

  30. Slide 30: Irish Ferries Cost Analysis

    Irish Ferries Cost Analysis 2003 Repairs/Insurance 10% Sales & Mktg 10% Port Charges 26%

  31. Slide 31: Fuel Price Movements June – August 2004

    Fuel Price Movements June – August 2004 2003 2004 Variance Average Brent (US Dollars per barrel) 28.53 38.82 36% Average USD Exchange Rate 1.1391 1.2197 7% Average Brent (€ per barrel) 25.04 31.83 27% HFO / GO per ton* (blended) €159 €183 15% * ICG uses a mixture of HFO/GO

  32. Slide 32: Crew Cost Savings – Irish Ferries

    Crew Cost Savings – Irish Ferries € Restructuring provision 2003 4.8m Spent by 30th June 2004 1.6m Committed 2nd Half 3.2m 4.8m Savings 2004 (6 months) 1.1m Savings 2005+ 2.2m / 2.5m p.a. Base Payroll 2003 46m

  33. Slide 33: Operational Gearing

    OPERATIONAL GEARING

  34. Slide 34: Slide 34

  35. Slide 35: Ulysses - RoRo Freight

    Ulysses - RoRo Freight 72% night time utilisation 7 years growth at 5% p.a. 100% night time utilisation in 2004 would yield additional €9.5m operating profit or 35 cent per share

  36. Slide 36: Ulysses - Car

    Ulysses - Car 12% day time utilisation 45 years growth at 5% p.a. 25% day time utilisation in 2004 would yield additional operating profit of €20m or 75 cent per share.

  37. Slide 37: Cash Flow

    Cash Flow 6 Months 6 Months Full year 2004 2003 2003 €m €m €m Operating Profit before exceptional items 4.2 5.5 28.9 Depreciation 12.2 12.7 24.5 EBITDA 16.4 18.2 53.4 Working Capital Movement 4.7 0.6 3.1 Operating Cash Flow 21.1 18.8 56.5 Interest (2.3) (1.9) (6.0) Tax - (0.2) (0.3) Capex (8.2) (9.7

  38. Slide 38: 5/6 Year Performance Cash EPS

    5/6 Year Performance Cash EPS 191 192 Cent 153 151 143 135 56.5 56.7 H.1 1998 1999 2000 2001 2002 2003 2004 H.1

  39. Slide 39: Share Buybacks / Dividends

    SHARE BUYBACKS / DIVIDENDS SHARES % VALUE AV. SHARE PRICE BUYBACKS Financial Year 2002 2.16m 8% €14.5m 6.7 Financial Year 2003 1.23m 5% € 9.8m 8.0 Financial Year 2004 0.54m 2% € 6.4m 11.8 TOTAL 3.93m 15% €30.7m 7.8 Authority to purchase up to an additional 2.4m. Shares (10%) valid up to 2005 AGM. DI

  40. Slide 40: Summary Balance Sheet

    SUMMARY BALANCE SHEET JUNE JUNE DEC 2004 2003 2003 Fixed Assets €m €m €m Ships 294 310 293 Other 43 44 42 337 354 335 Working Capital (18) (15) (14) 319 339 321 Shareholders Equity 180 174 184 Net Debt 127 156 125 Provisions 12 9 12 319 339 321 Net Assets per Share €7.42 €7.25 €7.60

  41. Slide 41: Composition of Net Debt

    COMPOSITION OF NET DEBT CURRENCY €m FIXED* RATE $ 20 80% 4.6% £ 42 68% 5.2% € 81 76% 4.6% 143 74% 4.6% Cash (16) Net Debt 127 * More than 2 Years

  42. Slide 42: Tax / Pensions

    TAX / PENSIONS ƒ LOW TAX ƒ “Tonnage tax” for Irish shipping activities (very low) ƒ Std Corporation Tax for other activities (12.5%) ƒ Low blended corporate rate going forward ƒ WELL FUNDED PENSION SCHEME ƒ 90% Permanent Staff in DB Scheme, in surplus €m €m 2003 2002 ƒ Assets at market value 190 175

  43. Slide 43: International Financial Reporting Standards from 2005

    International Financial Reporting Standards from 2005 ƒ Main impact for ICG is in pensions. ƒ Old standard (SSAP24) employed smoothing by actuaries. ƒ New standard (IAS19 / FRS17) marks pension assets / liabilities to market – P&L more volatile as a result 2004(e) 2003 2002 ƒ P&L credit Old standard

  44. Slide 44: Pension Charge / Credit

    Pension Charge / Credit 2004 (e) 2003 2002 SSAP FRS SSAP FRS SSAP FRS 24 17 24 17 24 17 €m €m €m €m €m €m Service Cost (4.2) (4.0) (4.0) (4.0) (3.7) (3.8) Amortisation of Surplus 5.7 5.6 5.8 Return on Fund (Interest) 3.5* 2.3* 6.0* DC Schemes / Other (1.0) (0.5) (0.9) (0.4) (0.9) (0.4) Net (Charge)

  45. Slide 45: Conclusion

    Conclusion ƒ No. 1 position - Republic of Ireland / UK & Continent ƒ Huge capacity for growth ƒ Significant capex reduction in future years, while offering best product/service to customers ƒ Very strong free cash flow

  46. Slide 46: Slide 46

  47. Slide 47: Irish Continental Group plc Interim Update

    IRISH CONTINENTAL GROUP, plc Interim Update 9th September 2004

  48. Slide 48: Appendices

    Appendices IRISH CONTINENTAL GROUP

  49. Slide 49: Isle of Inishmore 1997

    Isle of Inishmore 1997 Price: €85m Year Built: 1997 Cars: 855 Trucks: 122 Passengers: 2,200

  50. Slide 50: Jonathan Swift 1999

    Jonathan Swift 1999 Price: €38m Year Built: 1999 Cars: 200 Coaches: 10 Passengers: 800

  51. Slide 51: Ulysses 2001

    Ulysses 2001 Price: €107m Year Built: 2001 Cars: 1,342 Passengers: 1,900 Trucks: 240

  52. Slide 52: Normandy 1982

    Normandy 1982 Price: €20.8m Year Built: 1982 Cars: 420 Passengers: 1,577 Trucks: 43

  53. Slide 53: Market Share – RoRo 2004 v 2003

    Market Share – RoRo 2004 v 2003 All Ireland (UK & Continent) 2003 2004 (F/cast) % % Irish Ferries 14 14 Stena Line 18 27 P&O Irish Sea 40 30 Norse Merchant 24 26 Seatruck 4 4 Total 100 100

  54. Slide 54: Market Share – Cars 2004 v 2003

    Market Share – CARS 2004 v 2003 All Ireland (UK & Continent) 2003 2004 (F/cast) % % Irish Ferries 27 27 Stena Line 44 46 P&O Irish Sea 14 13 Isle of Man Steam Packet Co. 8 8 Swansea Cork 3 3 Norse Merchant 3 3 Brittany Ferries 1 1 Total 100 100

  55. Slide 55: Passenger Car Market UK-Ireland

    Passenger Car Market UK ÍÎ Ireland Market REPUBLIC OF IRELAND Volumes (Cars) All Routes Market Irish Irish UK - Ireland Ferries Ferries Share HI : Jan - June 2004 - 3% - 4% - 6% 41% July - Aug. 2004 - 2% - 3% + 3% 41% 01/01 - 23/08/04 - 2% - 3% - 3% 41% ƒ Week car market due to low fare airlines (pa

  56. Slide 56: Car Trips To/From UK 2003

    Car Trips To/From UK 2003 Trips % France 6.5m 77 Ireland / N. Ireland 1.5m 18% Other 0.4m 5% All Countries 59.4m 100

  57. Slide 57: Visits Abroad by UK Residents

    Visits Abroad by UK Residents 2003 Visits % Spain 12.5m 21 France 12.1m 20 North America 4.2m 7 Ireland 3.9m 6 Greece 2.9m 5 Italy 2.7m 5 All Countries 59.4m 100

  58. Slide 58: Slide 58

  59. Slide 59: Isle of Inishmore

    ISLE OF INISHMORE mbroke - Rosslare Dep Arr 1430 18.15 02,45 06.30 1 and 26th December ULYSSES Holyhead - Dublin Dep Arr 15.00 18.15 02.50 06.05 0303/2003 eve DUBLIN SWIFT blin Holyhead Holyhead - Dublin Dep 0 14.50 20.15 EY: Arr 11.09 16.39 22.04

  60. Slide 60: Container Terminal Market

    Container Terminal Market 1.1 Million Teu in 2003 ƒ 150 year lease of 33 acres, dating from 1972 ƒ Increasing capacity of terminal by 50% (completed June 2004)

  61. Slide 61: Container Terminal Market

    Container Terminal Market 1.1 Million Teu in 2003 • 150 year lease of 33 acres, dating from 1972 • Increasing capacity of terminal by 50% (completed June 2004)

Irish Continental Group — H1 2004 Earnings Presentation on 6ix