Mobico Group Plc · LSE:MCG
Mobico — National Express Group — FY2004 Earnings Presentation
38 slides from Mobico's earnings presentation, Feb 24, 2005
Slide 1: Preliminary Results
Preliminary Results For the year ended 31 December 2004 24 February 2005
Slide 2: Phil White, Chief Executive
Phil White Chief Executive 2
Slide 3: 2004 Highlights
2004 HIGHLIGHTS • Strong financial performance – ahead of expectations • Exceptional operational performance • Innovation driving passenger growth in the UK • Most successful bid season in North America • Integration of UK’s largest rail franchise • Final dividend increased by 18% • Initiation of sh
Slide 4: Adam Walker, Finance Director
Adam Walker Finance Director 4
Slide 5: Financial Highlights (1)
FINANCIAL HIGHLIGHTS (1) • Operating profit up 18% to £152m • Margin improvement • Normalised EPS growth of 35% • Free cash flow yield 17.1% (2003: 12.9%) • Operating cash flow £187.5m (2003: £139.7m) • £100m share buy-back programme announced • Debt reduced by £171.2m 5
Slide 6: Financial Highlights (2)
FINANCIAL HIGHLIGHTS (2) 200 80 Op c'flow EPS 180 75 Normali sed diluted EPS (p) Operating cash flow (£m) 70 160 65 • Strong conversion of profits 140 60 into cash 120 55 100 50 • Record earnings – 71.8p 80 45 60 40 2001 2002 2003 2004 400 32 350 31 • Significant reduction in debt 300 30 Full year d
Slide 7: Profit & Loss Account
PROFIT & LOSS ACCOUNT 2004 2003 £m £m* Turnover 2,560.2 2,565.7 Continuing operating profit 149.5 125.1 Discontinued businesses 2.5 3.8 Operating profit before goodwill and exceptionals 152.0 128.9 Loss from associates (3.4) (4.1) Interest (18.1) (25.0) Normalised profit before tax 130.5 99.8 Except
Slide 8: Divisional Operating Profit
DIVISIONAL OPERATING PROFIT BEFORE GOODWILL & EXCEPTIONAL ITEMS 2004 2003 £m £m* Trains 58.5 33.2 Buses – continuing 43.9 47.5 – acquisitions 0.3 - Coaches 18.8 15.9 North America (1) - Student 29.6 32.4 - Public Transit 7.3 4.6 Australia Bus - discontinued 2.1 3.4 Central functions (8.5) (8.1) 152.
Slide 9: Coach – A Growth Story
COACH – A GROWTH STORY UK Coaches cash conversion 26 Op Profit Op cas h flow 24 • Passenger growth of 14% 22 over 3 years 20 • Compound growth on £m 18 operating profit of 77% over 16 3 years 14 12 • 61% direct sales 10 2001 2002 2003 2004 9
Slide 10: Trains
TRAINS Turnover Operating Profit/(Loss) 2004 2003 2004 2003 £m £m* £m £m* Long Distance 214.3 206.9 1.5 13.2 London & SE 786.7 555.8 33.2 23.3 Regional 704.2 939.5 25.3 2.0 Bid costs - - (1.5) (5.3) 1,705.2 1,702.2 58.5 33.2 10 * restated for change in revenue recognition, bid costs and central func
Slide 11: Bus
BUS Operating Margins 25% 20% • Returns well in excess of 15% WACC 10% 5% 0% 2003 2004 TWM Other operators Bus Industry Passenger Volume Trends over the last 5 years 0.0% (0.5)% • West Midlands outperforming (1.0)% other regional areas (1.5)% (2.0)% (2.5)% West Midlands Region 11 (3.0)% Other region
Slide 12: North America Profit Growth & Margin Improvement
NORTH AMERICA PROFIT GROWTH & MARGIN IMPROVEMENT 80 11% Operating profit Operating margin 70 60 • Best in class - 14% Student 10% 50 • Improved margins for Thousands 40 Public Transit 30 9% 20 10 0 8% 2002 2003 2004 12
Slide 13: Divisional Cash Flow
DIVISIONAL CASH FLOW UK UK UK North Australia Central Total Trains Bus Coach America Bus Functions £m £m £m £m £m £m £m Operating profit before exceptionals 58.5 44.2 18.8 36.9 2.1 (8.5) 152.0 Depreciation/ amortisation of FA 15.1 10.1 6.3 21.2 3.5 0.9 57.1 grants/ profit on disposal EBITDA 73.6 54.
Slide 14: Movement in Net Debt
MOVEMENT IN NET DEBT 2004 2003 £m £m Effective net debt at 1 January (307.8) (334.6) Operating cash flow 187.5 139.7 Interest (20.3) (23.9) Tax (3.2) (22.3) Free cash flow 164.0 93.5 Acquisitions and disposals 22.8 (54.1) Financial investments and shares 2.6 10.6 Dividend (36.4) (33.2) Currency tran
Slide 15: IFRS
IFRS • IFRS to be introduced at Interims reporting stage • Market briefing on IFRS 3 May 2005 • Areas impacted: ! Pensions ! Share-based payments ! Goodwill ! Financial instruments ! Dividends ! Taxation 15
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Slide 17: Coaches
COACHES Innovation and investment drive growth ! Passenger growth of 6% ! More customer focus ! Dynamic pricing across the network ! Segmenting the market ! Developing new products ! Innovation and new technology 17
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Slide 19: Trains
TRAINS Performance drives passenger growth ! Improved offer to customers: passenger growth of 5% ! Substantial improvements in performance quality ! Successful launch and integration of ‘one’ franchise ! Franchise extensions at Silverlink, Great Northern and Wessex ! Bidding for more business ! Acti
Slide 20: Rail Performance
RAIL PERFORMANCE Towards PPM History of NX TOCs compared to Other TOCs in dustry target of 85% 84% 82% 80% 78% Implementation of internal 76% performance programme NX TOC PPM Non-NX PPM 74% P8 P9 P1 P1 P1 P1 P1 P 2 /03 P3 P4 P5 P6 P7 P8 P9 P1 P1 P1 P1 P1 P 2 /04 P3 P4 P5 P6 P7 P8 P9 P1 P1 P1 P1 P1 P
Slide 21: Trains Performance
TRAINS PERFORMANCE L&SE Operators (All Day) PPM (MAA at Long Distance PPM (MAA at 30 Sep 04) Operators 30 Sep 04) Chiltern Railways 91.9 ‘one’ (InterCity) 81.1 c2c 89.5 1 Midland Mainline 80.0 ‘one’ 89.3 First Great Western 79.4 WAGN 84.9 GNER 76.4 First Great Western Link 82.3 Virgin Cross Country
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Slide 23: Buses
BUSES Low fares, high frequency, strong cash flow and high margins ! Market segmentation and innovation ! Continued investment in new buses ! Fares simplification ! Driver recruitment initiatives ! Successful entry into London ! Developing stakeholder relationships 23
Slide 24: Buses – Saver Bus Passenger Numbers
BUSES SAVER BUS PASSENGER NUMBERS 75% 50% 25% % increase in PJs YoY 0% -25% -50% -75% launch 26/7/04 De c 2003 Jul-04 Total Pax Log. (Total Pax) Dec 2004 24
Slide 25: Buses
BUSES Low fares, high frequency, strong cash flow and high margins ! Market segmentation and innovation ! Continued investment in new buses ! Fares simplification ! Driver recruitment initiatives ! Successful entry into London ! Developing stakeholder relationships 25
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Slide 27: North America
NORTH AMERICA Targeted growth with predictable earnings and strong cash flow generation ! Successful bid season ! New contract wins in Student Bus ! Cost and efficiency programme ! Expansion in Canadian market ! Reduced frequency of accidents ! Improved financial performance in Public Transit 27
Slide 28: Student Bus Contracts Retention
STUDENT BUS CONTRACTS RETENTION 100% 90% 80% Number of contracts 70% Lost business 60% Negotiated renewals 50% Contracts re-won in bids 40% 30% New business 20% 10% 0% 2003 2004 28
Slide 29: Current Trading and Prospects
CURRENT TRADING AND PROSPECTS • Current trading in line with expectations • On target for further growth • Strong cash flow to enhance shareholder value ! strategic investment ! acquisitions ! buy back programme ! dividend policy • Real confidence for 2005 29
Slide 30: Appendices
APPENDICES
Slide 31: Divisional Turnover
APPENDICES DIVISIONAL TURNOVER 2004 2003 £m £m* Buses - continuing 216.2 211.9 - acquisitions 22.8 - Trains 1,705.2 1,702.2 Coaches 192.4 186.4 North America - Student 208.5 228.1 - Public Transit 156.1 172.0 Australia Bus 59.0 65.1 2,560.2 2,565.7 31 * restated for change in revenue recognition
Slide 32: Balance Sheet
APPENDICES BALANCE SHEET 2004 2003 £m £m* Goodwill 324.4 404.6 Fixed assets 390.8 412.9 715.2 817.5 Working capital (238.0) (205.4) Net borrowings (136.6) (289.1) Provisions for liabilities (76.1) (58.8) Net assets 264.5 264.2 32 * restated for change in revenue recognition and accounting policy for
Slide 33: Exceptional Items
APPENDICES EXCEPTIONAL ITEMS • Trains reorganisation £7.2m and integration • UK and North American £0.7m Bus reorganisation £7.9m 33
Slide 34: North America
APPENDICES NORTH AMERICA 2004 2003 $m $m Student Transportation - Turnover 383.7 374.1 - Operating profit 54.5 53.1 - Margin 14.2% 14.2% Public Transit - Turnover 287.2 282.1 - Operating profit 13.4 7.6 - Margin 4.7% 2.7% Average FX rates 2004: £:$1.84 2003: £:$1.64 34
Slide 35: Currency
APPENDICES CURRENCY Closing Rate Average Rate 2004 2003 2004 2003 US Dollar 1.92 1.79 1.84 1.64 Australian Dollar 2.45 2.37 2.48 2.53 Canadian Dollar 2.31 2.32 2.38 2.31 35
Slide 36: Pensions
APPENDICES PENSIONS A slight FRS 17 deterioration: FRS 17 FRS 17 December 2004 Deterioration From Dec 03 (Deficit) Funding £m level £m % 1. UK Bus (36.2) 90% 2.5 2. UK Coach (11.0) 72% (6.3) Deferred tax asset 14.2 1.2 Net deficit (33.0) (2.6) 1. UK Buses 25% (1,600 members) in local authority DB sc
Slide 37: Trains – TOC Portfolio
APPENDICES TRAINS – TOC PORTFOLIO Central April 2006 To be remapped Great Northern April 2006 To become part of the GN / Thameslink franchise; AQ submitted Wessex April 2006 To become part of the Greater Western franchise; AQ submitted Silverlink October 2006 Two year extension negotiated MML April
Slide 38: Preliminary Results
Preliminary Results For the year ended 31 December 2004
National Express Group — FY2004 Earnings Presentation on 6ix