Mobico Group Plc · LSE:MCG
Mobico — H1 2023 Earnings Presentation
29 slides from Mobico's earnings presentation, Jul 27, 2023
Slide 1: Half Year Results
Half Year Results For the period ended 30 June 2023 27 July 2023
Slide 2: Introduction and key messages
Introduction and key messages Ignacio Garat Group CEO Mobico Group Half Year Results 2
Slide 3: Introduction & key messages
Introduction & key messages Delivering on Evolve Delivering the • Delivering on Evolve strategy • Strong passenger growth; pricing; and pipeline conversion H2 stronger • Significant, confirmed H2 benefits from actions taken including pricing than H1 and cost-savings Cost saving plan • Annualised cos
Slide 4: Delivering the Evolve strategy
Delivering the evolve strategy Making good progress Mobico Group Half Year Results 4
Slide 5: Delivering the Evolve strategy: Charleston win
Delivering the evolve strategy Charleston Win: Evolve outcomes are the winning formula 10 Year contract 133 Vehicles 4m Annual passengers SAFEST MOST RELIABLE MOST SATISFIED CUSTOMERS • Implemented Global Safety • Successful, challenging • 4 million passengers Standards mobilisation • Great customer
Slide 6: Delivering on: Passenger growth
May-20 Jul-20 peaks Summer Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 H1 23 vs H1 22 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Coach passengers UK Coach and ALSA Long Haul Nov-22 Jan-23 Mar-23 36% May-23 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Note 1: Spain
Slide 7: Delivering on: Pricing
Delivering on: Pricing Benefit in H1 and H2 of FY23 Benefit in H2 of FY23 School Bus Coach UK Bus Price increases on existing portfolio Ticket price increases vs H1 22 Price increase 16% 14% 14% 12% 12% 10% 10% 8% 12.5% 8% 6% 10% 13% 6% 11% 9% 4% 4% 4% 2% 2% 4% 0% 0% SY22/23 SY23/24 UK Coach ALSA LH
Slide 8: Delivering on: Pipeline
Delivering on: Pipeline Conversion: momentum and discipline Number of wins ACV won 27 New contract wins 27 £72m 16 £35m £72m Annualised contract value (ACV) won 28% Conversion rate on bids submitted and awarded Win rate ROCE 28% ROCE on won contracts 28% 28% 22% 15% 3 Strategic acquisitions in ALSA
Slide 9: Delivering on: Pipeline - retention and mobilisation
Delivering on: Pipeline High retention & successful mobilisation High retention rate Mobilising £170m of contracts (ACV) in the year 98% School bus retention (excluding non-regretted) Belfast-Dublin RRX, Germany Porto, Portugal Serveo, Madrid Retention rate in rest of Charleston Geneva ~
Slide 10: Financial and Operational Review
Financial and Operational Review James Stamp Group CFO Mobico Group Half Year Results 10
Slide 11: 2023 half year financial overview
2023 half year financial overview Summary Adjusted £m H1 2023 H1 2022 Change Revenue 1,569.4 1,324.3 18.5% Group Operating Profit 57.5 90.5 (36.5)% Basic EPS 1.0p 6.1p (5.1)p DPS 1.7p - 1.7p Key Metrics Free Cash Flow £m 79.7 63.8 24.9% ROCE 5.9% 5.9% - Covenant Gearing 2.8x 3.1x (0.3)x Statutory £m
Slide 12: Strong revenue growth
Strong revenue growth Profit affected by £60m lower Covid funding and increased costs before delivery of cost recovery and pricing actions in H2 Revenue (£m) Adjusted Operating Profit (£m) H1 2023 YOY % change1 H1 2023 H1 2022 YOY % change1 ALSA ALSA 559.7 +21% 57.6 50.3 +10% UK UK 285.4 +20% (10.8)
Slide 13: Good underlying H1 profit performance
Good underlying H1 profit performance Adjusted Operating Profit: H1 22 vs H1 23 Pay inflation before the price recovery in H2 64 (65) (60) 27 122 91 57 31 2022 H1 Covid funding 2022 H1, School Bus SY22/23 Growth 2023 H1, Inflation 2023 H1 excluding Covid pricing prior to inflation Mobico Group fundi
Slide 14: Strong H2 profit weighting expected
Strong H2 profit weighting expected Adjusted operating profit bridge: H1 23 vs H2 23 +£50m 15 143 57 2023 H1 H2 vs H1 UK Bus pricing School Bus Cost Growth School Bus route 2023 H2 Mobico Group normal SY23/24 pricing net reduction recovery risk / phasing wages programme upside Half Year Results 14
Slide 15: Cost savings ahead of plan
Cost savings ahead of plan Expecting c.50% of annualised benefit of £30m to be delivered in H2 23 Organisation Design Productivity • Reduction of 10% in back- office headcount • 200+ people to exit the Procurement business Digital Enablement Mobico Group Half Year Results 15
Slide 16: Covenant gearing stable
Covenant gearing stable Improvement on prior year, stable with full year 2022 £m H1 2023 H1 2022 EBITDA 166.7 197.8 Net maintenance capex (55.0) (88.3) Working capital (3.6) (24.9) Pension deficit (3.7) (3.6) Operating cash flow 104.4 81.0 >100% FCF Tax & interest (24.7) (17.2) conversion Free cash
Slide 17: Debt maturity improved
Debt maturity improved with liquidity increased, and high visibility over interest costs Liquidity profile – committed • RCF refinanced 917 • £0.8bn cash and committed headroom at 30 June 2023 • 2023 bond refinancing well 537 progressed 482 [x] • Interest charge increases for 2023 to c.£75m (FY 267
Slide 18: Adjusting items
Adjusting items Profit Cash Income Statement Cash £m H1 2023 H1 2022 H1 2023 H1 2022 Adjusted Operating Profit 57.5 90.5 Intangible amortisation for acquired businesses (17.3) (18.7) - - Re-measurement of onerous contracts and impairments resulting from the (0.9) (3.3) (2.5) (8.3) Covid-19 pandemic
Slide 19: ALSA: Record revenue and strong profit growth
ALSA Record revenue and strong profit growth Key Stats H1 2023 H1 2022 % Change Revenue €638.8m €527.5m 21% Adjusted Operating Profit €65.7m €59.7m 10% Adjusted Operating margin 10.3% 11.3% • Strong growth in revenues up 21% on prior year with Adjusted Operating Profit up 10% Long Haul revenues up
Slide 20: North America: Decisive actions to drive H2 improvement
North America Decisive actions to drive H2 improvement Key Stats H1 2023 H1 2022 % Change Revenue $724.3m $673.5m 8% Adjusted Operating Profit $17.1m $74.6m (77)% Adjusted Operating margin 2.4% 11.1% • Revenue growth of 8% as services continue to recover • Operating profit lagging due to: CERTS fu
Slide 21: UK: Action taken to improve profitability
UK Action taken to improve profitability Key Stats H1 2023 H1 2022 % Change Revenue £285.4m £237.3m 20% Adjusted Operating Profit £(10.8)m (£12.8)m 16% Adjusted Operating margin (3.8)% (5.4)% • Strong growth in UK Coach from passenger recovery (+42%) and yields (+11%) • Coach network has grown eight
Slide 22: Germany: Building momentum
Germany Building momentum Key Stats H1 2023 H1 2022 % Change Revenue €156.7m €147.3m 6% Adjusted Operating Profit €6.7m €3.5m 91% Adjusted Operating margin 4.3% 2.4% • Revenue growth of 6% with passenger volumes boosted by €49 monthly travel initiative • Preparation for mobilisation of RRX Lot 1 con
Slide 23: FY23 guidance
FY23 guidance • UK Bus pricing • School Bus pricing • Significant H2 • Cost reduction programme weighting • Normal H2 vs H1 weighting • Growth • FY 2023 EBIT expected to be • School bus route recovery between £200m and risk/upside £215m Actions taken Growth and seasonality Range of outcomes Mobico G
Slide 24: Conclusion & Key messages
Conclusion & Key messages Ignacio Garat Group CEO Mobico Group Half Year Results 24
Slide 25: Key messages
Key messages Delivering on Evolve Delivering the • Delivering on Evolve strategy • Strong passenger growth; pricing; and pipeline conversion H2 stronger • Significant, confirmed H2 benefits from actions taken including pricing than H1 and cost-savings Cost saving plan • Annualised cost-savings now e
Slide 26: Q&A
Q&A Mobico Group Half Year Results 26
Slide 27: Appendix
Appendix Mobico Group Half Year Results 27
Slide 28: Business income by division: ALSA, North America, UK, Germany
ALSA North America Business Income Owned Business Income Owned % Revenue* Contracted % Revenue* Contracted Line Protection Assets Line Protection Assets 1 Long Haul 14% School bus1 70% Regional 32% Transit 16% Urban 14% Shuttle 14% Morocco 13% Note 1: Although operated under exclusive concessions co
Slide 29: Disclaimer
The information in this presentation is general information and background only, and is not intended to be relied upon as advice to investors or potential investors as it does not take into account their particular investment objectives, financial situation or needs. The contents of this presentatio