Firstgroup Plc · LSE:FGP
Firstgroup — Investor Presentation (May 2021)
14 slides from Firstgroup's investor presentation, May 20, 2021
Slide 1: SWR and TPE National Rail Contracts
FirstGroup plc SWR and TPE National Rail Contracts Thursday 20 May 2021
Slide 2: Transitioning to a lower risk rail model
Transitioning to a lower risk rail model ▪ FirstGroup has signed agreements with Department for Transport (DfT) to operate new National Rail Contracts (NRCs) for South Western Railway (SWR) and TransPennine Express (TPE) ▪ SWR and TPE are among the first wave of NRCs to be announced ▪ As the largest
Slide 3: Key commercial terms
Key commercial terms More consistent and resilient cash generation for operators incentivised to deliver for passengers ▪ Concession-based National Rail Contract; Train Operating Companies (TOCs) earn annual fee for service delivery with performance incentives Contractual ▪ Both SWR and TPE contract
Slide 4: Deliverables for passengers
Deliverables for passengers NRCs provide continuity for customers, employees and other stakeholders. Both TOCs will work with industry partners and stakeholders to build back patronage, while upgrading their service offerings SWR will deliver improvements for customers and communities In the NRC per
Slide 5: Fee summary
Fee summary Although the financial statements of the TOCs will continue to be consolidated in the Group statutory accounts, the key economics for FirstGroup shareholders will be the management fees SWR (70% £m TPE share) Fixed annual management fee 3.3 2.3 Performance-based fee Up to 9.9 Up to 5.2 A
Slide 6: First Rail portfolio status
First Rail portfolio status First Rail’s portfolio of operations in the coming years is becoming more certain Rail operation Status South Western Railway (SWR) National Rail Contract (NRC) AGREED to May 2023, with extension up to May 2025 TransPennine Express (TPE) NRC AGREED to May 2023, with exten
Slide 7: FirstGroup – a strong platform for further value creation
FirstGroup – a strong platform for further value creation The NRCs are in line with our plans for a lower risk and sustainably cash generative future for FirstGroup, as we set out in the sale of First Student and First Transit announcement in April 20 May 2021 SWR and TPE National Rail Contracts 7
Slide 8: Summary
Summary ▪ We welcome the Secretary of State’s plan for the future of the UK rail industry with the expertise, innovation and experience of private sector rail operators at the heart of the model ▪ Going forward, the more resilient and lower risk contracted passenger rail earnings form a core part of
Slide 9: Appendix
First a "ih TRANSPENNINE EXPRESS es Appendix
Slide 10: Investment case underpins financial framework
Investment case underpins financial framework The Retained Group will be a cash generative business with a well-capitalised balance sheet and an operating model that will support an attractive dividend ▪ Bus: Planning for a range of post-pandemic scenarios; central case envisages passenger volumes r
Slide 11: Accounting for Rail
Accounting for Rail The Group anticipates including alternative performance measures in the accounts going forward that adjust for the underlying economics of the rail contracts: ▪ ‘Adjusted net debt’ will continue to exclude rail ring-fenced cash and IFRS 16 right of use assets ▪ ‘Adjusted profit a
Slide 12: Contingent capital
Contingent capital The Group’s share of contingent capital for both SWR and TPE NRCs total £15m (50% bonded), with limited routes for this to be called upon mainly in the event of early termination of the contracts SWR (70% £m TPE share of JV) Early Termination Indemnity (ETI) 4.2 5.0 Guarantor Supp
Slide 13: Franchise termination sums
Franchise termination sums As announced on 11 May, FirstGroup has now agreed franchise termination sums with DfT in respect of all of its obligations under Emergency Recovery Measures Agreements Avanti (70% share of venture SWR (70% share of £m TPE (100% owned) Total with Trenitalia) venture with MT
Slide 14: Disclaimer
Disclaimer This document 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, intends,