Firstgroup Plc · LSE:FGP
Firstgroup — H1 2022 Earnings Presentation
32 slides from Firstgroup's earnings presentation, Dec 9, 2021
Slide 1: FirstGroup plc Half-yearly results
FirstGroup plc Half-yearly results for the 26 weeks to 25 September 2021 Thursday 9 December 2021
Slide 2: Agenda
Agenda 1. Overview 2. Financial review 3. Business review 2 9 Dec 2021 | Half-yearly results to 25 Sep 2021
Slide 3: A transformed business
A transformed business ▪ Refocused on our leading public transport operations in bus and rail following sale of North American businesses and the £500m return of value to shareholders ▪ Resilient financial performance in period; no change to FY22 expectations, recognising there is uncertainty around
Slide 4: Agenda
Agenda 1. Overview 2. Financial review 3. Business review 4 9 Dec 2021 | Half-yearly results to 25 Sep 2021
Slide 5: Financial review
Financial review agenda ▪ Continuing operations (First Bus, First Rail and Group items) performed in line with our expectations ▪ Substantial corporate activity since the start of the period: ▪ Three North American divisions sold for combined EV of $4.6bn, c.£2.2bn in debt and other liabilities have
Slide 6: Financial summary
Financial summary Resilient financial performance continues H1 2022 H1 2022 H1 2022 H1 2022 change vs H1 £m Continuing Discontinued Total 2021 (Continuing) Revenue 2,139.1 970.6 3,109.7 +86.0 Adjusted1 - Operating profit 51.8 121.3 173.1 (3.9) - Margin % 2.4% 12.5% 5.6% - Net finance costs2 (58.1) (
Slide 7: Continuing operations – First Bus
Continuing operations – First Bus In-line results, with majority of period under government arrangements to procure essential bus services ▪ Passenger revenue +46% vs H1 2021 reflecting improved £m H1 2022 H1 2021 Change volumes, partly mitigated by lower pandemic-related funding Revenue 392.5 311.0
Slide 8: Continuing operations – First Rail
Continuing operations – First Rail In-line results, reflecting expected performance fee recoveries and the initial open access losses £m H1 2022 H1 2021 Change ▪ The four management fee-based Train Operating Companies (TOCs) provided service under emergency agreements put in Revenue 1,746.6 1,741.9
Slide 9: Group performance measures adjusted for rail management fees
Group performance measures adjusted for rail management fees Increasing focus on the underlying cash generated from the rail fee income attributable to the Group ▪ Rail attributable net income from management fee- £m H1 2022 based TOCs1 represents the Group’s share of the Group’s Rail management fee
Slide 10: Group cash flow
Group cash flow Net cash position at period end mainly reflects the extensive corporate activity underway at the balance sheet date ▪ First Bus cash positive after capex, includes Adjusted First Rail ring- IFRS 16 Statutory CBSSG cash receipts relating to prior periods £m Net Debt fenced cash leases
Slide 11: Balance sheet and future sources of value
Balance sheet and future sources of value Well-capitalised business, no longer encumbered by pension deficit repayments or any significant contingent liabilities, with further value to be realised over time c.£10-20m Adjusted Net Debt expected by end of FY22 Future sources of value update (FY23 and
Slide 12: Financial framework
Financial framework Expect to build momentum in current financial year, providing a solid foundation for delivering our financial framework objectives – including commencing regular dividends within the next 12 months ▪ First Bus: no change to current year expectations which reflect the current pand
Slide 13: Agenda
Agenda 1. Overview 2. Financial review 3. Business review 13 9 Dec 2021 | Half-yearly results to 25 Sep 2021
Slide 14: Strong platform for further value creation
Strong platform for further value creation Disposals have created a focused group, strengthened the balance sheet, released cash to shareholders and will enable further value creation over time FirstGroup investment case Balance sheet and shareholder distribution plans ▪ Leading positions in bus and
Slide 15: First Bus: a regional bus market leader
First Bus: a regional bus market leader Passenger volumes have been rebuilding, faster in England than Scotland and Wales Our key focus in light of the inherent operating leverage of the business CBSSG in place in England First Bus 100% ▪ Second largest regional bus operator, 80% serving two thirds
Slide 16: First Bus margin improvement plan
First Bus margin improvement plan On track to deliver 10% margin in first full financial year after pandemic-related restrictions end Key levers to drive delivery (in addition to operating leverage) Margin improvement plan trajectory A+B. Passenger volume reset and network realignment post-pandemic:
Slide 17: Consistent support for essential services and decarbonisation
Consistent support for essential services and decarbonisation National and local governments continue to demonstrate willingness to support service provision as volumes recover, while underpinning investment to strengthen bus networks longer term England (71% of LTM First Bus revenue) Scotland (22%
Slide 18: Taking First Bus forward
Taking First Bus forward First Bus continues to develop and build on its strong platform B2B contracted buses Arrival buses partnership Hitachi Europe / Glasgow Caledonia ▪ First Bus is currently a leader in rail replacement and events, with c.7% of £1.4bn B2B addressable market ▪ Approach recently
Slide 19: First Rail: the leading passenger rail operator
First Rail: the leading passenger rail operator Management fee-based portfolio is delivering for passengers and shareholders, as the transition to the new model railway begins to take shape First Rail ▪ Delivering in-line passenger and other performance metrics on the management fee-based TOCs: ▪ UK
Slide 20: Taking rail forward
Taking rail forward First Rail continues to develop ancillary revenue opportunities (£46m of revenues not generated from management fee-based train operations in H1) and enhance its environmental profile Open Access evo-rail onboard Wi-Fi solution ▪ Next generation track to train connectivity soluti
Slide 21: Delivering the strategy, unlocking the Group's potential
Delivering the strategy, unlocking the Group’s potential ▪ Refocused on our leading public transport operations in bus and rail ▪ Future value to be realised including from First Transit earnout, pension escrow and Greyhound property disposals and other receipts, in addition to the £500m recently re
Slide 22: FirstGroup plc
FirstGroup plc Half-yearly results for the 26 weeks to 25 September 2021
Slide 23: Appendix: Divisional adjusted operating profit
Appendix: Divisional adjusted operating profit Revenue Operating profit1 Operating margin1 H1 2022 H1 2021 H1 2022 H1 2021 H1 2022 H1 2021 £m First Bus 392.5 311.0 26.8 17.4 6.8% 5.6% First Rail 1,746.6 1,741.9 39.2 59.4 2.2% 3.4% Group items - - (13.8) (13.7) n/a n/a Continuing total 2,139.1 2,052.
Slide 24: Appendix: Divisional EBITDA
Appendix: Divisional EBITDA Revenue EBITDA1 EBITDA margin1 H1 2022 H1 2021 H1 2022 H1 2021 H1 2022 H1 2021 £m First Bus 392.5 311.0 55.5 48.1 14.1% 15.5% First Rail 1,746.6 1,741.9 304.2 333.8 17.4% 19.2% Group items - - (12.2) (11.9) n/a n/a Continuing total 2,139.1 2,052.9 347.5 370.0 16.2% 18.0%
Slide 25: Appendix: Other key profit and loss items
Appendix: Other key profit and loss items £m H1 2022 H1 2021 ▪ Group items: changes initiated during the period to reflect the portfolio rationalisation; expect to deliver c.£10m reduction in FY23 Adjusted1 First Bus 26.8 17.4 ▪ Net finance costs: principally £200m 6.875% bond, finance First Rail 39
Slide 26: Appendix: Net adjusting items
Appendix: Net adjusting items £471.4m credit from net adjusting items in period, mainly reflecting portfolio rationalisation and uses of proceeds H1 2022 H1 2022 H1 2022 ▪ Rail termination sums reflect final ‘true-up’ of the £m pre-pandemic TPE and SWR franchises Cont. Disc. total Amortisation charg
Slide 27: Appendix: IFRS 16 (leases)
Appendix: IFRS 16 (leases) ▪ As at 25 September 2021, £1.4bn of leased assets were recognised as Right Of Use assets on the balance sheet. Rail track access payments, leases of <1 year, low values excluded; no retrospective restatement H1 2022 H1 2021 £m Under IAS17 IFRS 16 effect Under IFRS 16 Unde
Slide 28: Appendix: Diesel hedge position as at 6 December
Appendix: Diesel hedge position as at 6 December UK FY22 FY23 FY24 Annual volume (barrels 'm) 0.7m 0.6m 0.7m % hedged 73% 63% 14% Crude rate ($/barrel) $58.97 $62.68 $74.92 Diesel rate ($/barrel) $69.12 $70.21 $78.63 Equivalent cost per litre 32.4p 33.0p 36.4p ▪ Prices include crude and refining cos
Slide 29: Appendix: Net finance costs and taxation
Appendix: Net finance costs and taxation £m H1 2022 H1 2021 Bonds 15.4 27.5 Bank borrowings 14.9 9.2 CCFF (commercial paper) - 0.9 Senior unsecured loan notes 3.2 4.7 Lease interest 24.6 36.7 Notional interest on long-term provisions 3.4 2.5 Notional interest on pensions 5.8 3.8 Notional interest –
Slide 30: Appendix: Total capital expenditure and acquisitions
Appendix: Total capital expenditure and acquisitions Fixed asset / software additions Cash £m (including acquisitions) H1 2022 H1 2021 H1 2022 H1 2021 First Student 72.6 28.7 94.7 110.0 First Transit 21.8 18.6 13.5 16.1 Greyhound 11.0 0.8 12.3 1.4 First Bus 8.7 10.2 11.9 9.7 First Rail 25.1 70.4 44.
Slide 31: Appendix: Pensions
Appendix: Pensions Deficit Cash contributions P&L charge1 £m 6m to Sep 12m to Mar 6m to Sep 6m to Sep 12m to Mar 6m to Sep Sep 2021 Mar 2021 Sep 2020 2021 2021 2020 2021 2021 2020 North America (47.4) (129.4) (236.7) 79.1 34.1 0.9 (25.3) 9.5 4.4 First Bus 61.2 (163.6) (118.7) 239.4 44.0 16.7 5.1 9.1
Slide 32: Important notice
Important notice This presentation includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including (but not limited to) the terms anticipates, believes, could, estimates, expects