Irish Continental Group Plc · EURONEXT:IR5B
Irish Continental — FY2004 Earnings Presentation
54 slides from Irish Continental's earnings presentation, Mar 21, 2005
Slide 1: Irish Continental Group plc Results Presentation
IRISH CONTINENTAL GROUP, plc Results Presentation 21st March 2005
Slide 2: ICG Profile
ICG Profile Capital Employed* 2004 1. Irish Ferries Biggest ferry company operating between UK / Continent and Republic of Ireland. Modern fleet of large ships Major barriers to entry 65% Significant operational gearing Very strong free cash flow 2. Ship Chartering Division Diversified ship
Slide 3: ICG - Financial Performance
ICG - Financial Performance 2004 2003 €m €m Turnover 293.3 304.3 EBITDA* 51.5 53.4 EBIT* 26.5 28.9 PBT* 21.1 22.5 Exceptional Restructuring Charges 11.9 4.8 Adjusted EPS (cent)** 84.7 91.4 Dividend (Redemption) per Share (cent) 25.9 22.5 * Pre exceptional ** Adjusted EPS is EPS before exceptional ch
Slide 4: Container Division
Container Division 2004 2003 €m €m Turnover 129.8 134.8 -3.7% EBITDA 5.5 6.3 -12.7% Depreciation/ Amortisation (3.0) (2.9) +3.4% Operating Profit 2.5 3.6 - 31% Operating profit significantly affected by late commissioning of new berth in Dublin Terminal and congestion in deep sea ports for feeder
Slide 5: Operations
Operations Container Routes Ireland / Continent Door to Door plus Quay to Quay UK / Continent Quay to Quay container movement Port Ownership Container Terminal in Dublin
Slide 6: Key Issues
KEY ISSUES Competitive Rate environment door/door Feeder business strong Significant disruption and additional costs due to delays by Dublin Port Authority in commissioning new berth (Fully Commissioned in July 2004). Dublin Port Tunnel (July 2006) will significantly enhance access to DFT
Slide 7: Container Routes
Container Routes Grangemouth 14 ships Belfast South Shields 13 ports Dublin Dublin Liverpool 25 routes Waterford Cork Holyhead Cork Holyhead Immingham Pembroke Pembroke Felixstowe Tilbury Southampton Rotterdam Rotterdam Antwerp Le Havre
Slide 8: Ireland - Continent/UK Market Share
Ireland - Continent/UK Market Share 27% 2004 % CAGR - Volume % 16 15% 14 12 10 8% 8 7% 7% 7% 6% Market 6 5% ICG 4 2 -2% 0 -2 Since Last Last 2004 1992 5 Yrs 3 Yrs
Slide 9: Market Share – LoLo 2004 (est.)
Market Share – LoLo 2004 (est.) All Ireland (UK & Continent) % ICG 27 BGF 24 Geest/Norfolk 19 Seawheel 16 ECS 9 Others 5 Total 100
Slide 10: Container Terminal Market
Container Terminal Market 1.2 Million Teu in 2004 150 year lease of 33 acres from 1971 Capacity of terminal increased by 50% (July 2004) Picture courtesy of The Irish Times
Slide 11: Container Handling in Ireland Market Share
Container Handling in Ireland Market Share 22% 2004 % CAGR Volume % 12 11% 10% 10% 10 8 7% 7% 7% 6% Market 6 5% ICG 4 2 0 Since Last Last 2004 1992 5 Yrs 3 Yrs
Slide 12: Ferries Division
Ferries Division 2004 2003 €m €m Turnover 164.3 170.2 -3.5% EBITDA 46.0 47.2 -2.5% Depreciation/ Amortisation (22.0) (21.9) Operating Profit 24.0 25.3 -5.1%
Slide 13: Operations
Operations Irish Ferries Ireland-UK – 4,500 sailings p.a. Ireland-France – 300 sailings p.a. Ship chartering 2 vessels chartered
Slide 14: 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
Slide 15: Ship Chartering Division
Ship Chartering Division Use of ship market knowledge and balance sheet strength to avail of potential charter opportunities in ferry and container shipping markets. 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
Slide 16: Irish Ferries Route Structure
Irish Ferries Route Structure Larne Stranraer Belfast Cairnryan Dublin Liverpool Rosslare Holyhead Pembroke Rotterdam Roscoff Cherbourg
Slide 17: Irish Ferries Route Structure
Irish Ferries Route Structure Focus on short routes with high utilisation of ships. Major barriers to entry in Holyhead & Pembroke for key slots UK / Rep. Ireland Routes Over 89% of cars travel on short routes into Dublin and Rosslare Over 53% of RoRo units travel on short routes into Dubl
Slide 18: Irish Ferries - Ships
[rish Ferries - Ships ch i: > SSitresssccsser; ae + OOS. a wnunnennn wevenenney ego en =| Se hist FERRIES ays
Slide 19: Ulysses
Ulysses Boeing 747
Slide 20: Car Market
Car Market 1.5m Cars y/e 31/12/04 Irish Ferries Share - All Ireland 27% - Rep. Of Ireland 43% Larne Stranraer Belfast Belfast Cairnryan Volume CAGR Dublin Since Last Last Galway Dublin% 1992 5 Yrs 3 Yrs 2004 Liverpool Holyhead Rosslare All Irl Market 3 -1 1 -3 Cork Rosslare Holyhead Irish Ferries 4
Slide 21: Car Performance
Car Performance CAGR - Yield Rep. Of Ireland 4% 4 3.5 3 2.5 2% 2% 2 1.5 1% 1 0.5 0 Since Last 5 Last 3 2004 1992 Years years
Slide 22: Market Share – Cars
Market Share – Cars 2004 Rep. of Ireland All Ireland (UK & Continent) (UK & Continent) % % Irish Ferries 43 27 Stena Line 44 46 P&O Irish Sea 2 13 Isle of Man Steam Packet Co. 4 7 Swansea Cork 4 3 Norse Merchant 1 3 Brittany Ferries 2 1 Total 100 100
Slide 23: Irish Ferries - Distribution
Irish Ferries - Distribution Car Booking Report Calendar Year 2004 All Markets Share 2004 % Call Centres 28 At our Ports 11 Internet 36 Direct 75 Travel Trade 25 Total 100
Slide 24: RoRo Freight Market
RoRo Freight Market 1.6m Freight Units y/e 31/12/04 Irish Ferries Share - All Ireland 13% - Rep. Of Ireland 26% Larne Stranraer Belfast Belfast Cairnryan Volume CAGR Since Last Last Dublin Galway Dublin % 1992 5 Yrs 3 Yrs 2004 All Irl Market 7 4 3 4 Holyhead Liverpool Rosslare Cork Rosslare Irish Fe
Slide 25: RoRo Freight Performance
RoRo Freight Performance CAGR - Yield Rep. of Ireland % -4% 0% -2% -2% 0 -0.5 -1 -1.5 -2 -2.5 -3 -3.5 -4 Since Since Last Last 2004 1992 5 Yrs 3 Yrs
Slide 26: Market Share – RoRo
Market Share – RoRo 2004 Rep. of Ireland All Ireland (UK & Continent) (UK & Continent) % % Irish Ferries 26 13 Stena Line 25 29 P&O Irish Sea 23 28 Norse Merchant 25 26 Swansea Cork 1 0 Seatruck 0 4 Total 100 100
Slide 27: RoRo Freight Traffic (1.6m)
RoRo Freight Traffic (1.6m) 000s Units Compound 1600 Average 1400 Growth Rates 1200 1992 - 2004 51% 1000 4.0% p.a. 800 Via Northern Ireland Ports 600 72% 400 49% 11.2% p.a. 200 28% Via Republic of Ireland Ports 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 6.8% p.a.
Slide 28: RoRo Freight Traffic Key Slots
RoRo Freight Traffic Key Slots
Slide 29: RoRo Market Analysis
RoRo Market Analysis Greater Integration between Ireland & UK/Continent 1992 2004 CAGR % % Value of Imports & Exports €45.1bn €216.8bn (e) 14.0% GDP €40.0bn €146.5bn(e) 11.4% Imports & Exports as % of GDP 113% 148%
Slide 30: Irish Ferries Revenue Mix
Irish Ferries Revenue Mix 2004
Slide 31: Irish Ferries Cost Analysis
Irish Ferries Cost Analysis 2004 Payroll 34% Port Charges 21%
Slide 32: Fuel Price Movements
Fuel Price Movements 2003 2004 Variance Average Brent (US Dollars per barrel) 28.7 38.7 35% Average USD Exchange Rate 1.13 1.24 10% Average Brent (€ per barrel) €25.4 €31.1 22% Heavy Fuel Oil /Gas Oil* €175 €185 6% ** * ICG uses a mixture of each ** Lagged response to Brent
Slide 33: Restructuring Provision
Restructuring Provision Benefit Charge 2005 €m €m Outsourcing crew on French route 8.1 3.0 Less lower fares (1.5) Shore side restructuring 2.1 0.7 Dublin Ferryport Terminal - Working time directive 0.8 - - Closure maintenance 0.9 0.9 11.9 3.1
Slide 34: Operational Gearing
OPERATIONAL GEARING
Slide 35: Ulysses - RoRo Freight
Ulysses - RoRo Freight 77% night time utilisation 6 years growth at 5% p.a. 100% night time utilisation in 2004 would yield additional €8.4m operating profit or 33 cent per share
Slide 36: Ulysses - Cars
Ulysses - Cars 12% day time utilisation (higher in holiday peaks)
Slide 37: Sensitivities for 2005
Sensitivities for 2005 Each 1% change in car revenue equals 3.0 cent in EPS. Each 1% change in RoRo freight revenue equals 2.5 cent in EPS. Each 1% change in fuel equals 0.6 cent in EPS.
Slide 38: Return on Capital
Return on Capital Ferries Container Group 2004 2003 2004 2003 2004 2003 €m €m €m €m €m €m Turnover 164.3 170.2 129.8 134.8 293.3 304.3 EBITDA* 46.0 47.2 5.5 6.2 51.5 53.4 EBIT (pre goodwill) 24.0 25.3 2.5 3.6 26.5 28.9 Average Capital Employed 279.1 307.2 30.7 28.4 309.8 335.6 EBITDA Return on Avera
Slide 39: Cash Flow
Cash Flow 2004 2003 €m €m Operating Profit 26.5 28.4 Depreciation/Amortisation 25.0 24.5 EBITDA 51.5 53.4 Working Capital Movement 0.3 1.0 Operating Cash Flow 51.8 54.4 Interest -6.4 -6.0 Tax -0.4 -0.3 Capex -13.3 -8.8 Restructuring -12.2 - Free Cash Flow 19.2 34.3 Dividends/Redemptions -5.5 -5.0 Sh
Slide 40: 5 Year Performance
5 Year Performance Cash EPS 192* 191* 191* Cent 153 151 143 1999 2000 2001 2002 2003 2004 * Pre exceptional
Slide 41: Composition of Net Debt
COMPOSITION OF NET DEBT CURRENCY €m FIXED* RATE $ 14 55% 3.9% £ 32 54% 5.6% € 81 76% 4.4% 127 68% 4.6% Cash (9) Net Debt 118 * More than 2 Years
Slide 42: Tax
TAX LOW TAX “Tonnage tax” for Irish shipping activities (very low) Std Corporation Tax for other activities Low corporate rate going forward (less than 10%)
Slide 43: Share Buybacks / Dividends
SHARE BUYBACKS / DIVIDENDS SHARES % VALUE AV. SHARE PRICE BUYBACKS 2002 2.16m 8.1% €14.5m 6.7 2003 1.23m 4.9% €9.8m 8.0 2004 0.69m 2.9% €7.9m 11.4 TOTAL 4.08m 15.9% €32.2m 7.9 Authority to purchase up to an additional 2.2m. Shares (9%) valid up to 2005 AGM. DIVIDEND GROWTH SINCE IPO Dividend (1988 -
Slide 44: Share Price Vs EPS
Share Price Vs EPS Price 1988 – 2004: Capital CAGR = 19.4% p.a. EPS (Euro) EPS CAGR = 16.5% p. a. (Cent) 18 90 16 80 14 70 12 60 10 50 8 40 6 30 4 20 2 10 0 0
Slide 45: Transition to IFRS
Transition to IFRS Pensions - P&L charge will increase by approximately €2m - €2.5m p.a. Share Options - no impact Derivatives - no impact Depreciation - minor impact from component depreciation
Slide 46: Pensions - IFRS
Pensions - IFRS Profit & Loss Charge 2005 (f) 2004 2003 P&L credit / (charge)* Old standard (SSAP 24) N/A (0.4) 0.7 New Standard (IAS19 / FRS17) (2.3) (2.6) (2.1) Variation (2.3) (2.2) (2.8) Balance Sheet Company Schemes FRS17 Basis €m €m €m 2004 2003 2002 Assets at market value 206 190 175 Liab
Slide 47: Irish Ferries voted Best Ferry Company for 8th year
Irish Ferries voted “Best Ferry Company” for 8th year in a row at the 2004 Irish Travel Trade News Awards
Slide 48: Conclusion
Conclusion No. 1 position - Republic of Ireland / UK & Continent Significant capacity for growth in freight although tourism will remain challenging Need to reduce labour cost despite possible industrial unrest No significant capex required, while offering best product/service to customers
Slide 49: Irish Continental Group plc Results Presentation
IRISH CONTINENTAL GROUP, plc Results Presentation Goodbody Stockbrokers 21st March 2005
Slide 50: Appendices
Appendices IRISH CONTINENTAL GROUP
Slide 51: Isle of Inishmore 1997
Isle of Inishmore 1997 Price: €85m Year Built: 1997 Cars: 855 Trucks: 122 Passengers: 2,200
Slide 52: Jonathan Swift 1999
Jonathan Swift 1999 Price: €38m Year Built: 1999 Cars: 200 Coaches: 10 Passengers: 800
Slide 53: Ulysses 2001
Ulysses 2001 Price: €107m Year Built: 2001 Cars: 1,342 Passengers: 1,900 Trucks: 240
Slide 54: Normandy 1982
Normandy 1982 Price: €20.8m Year Built: 1982 Cars: 420 Passengers: 1,577 Trucks: 43
Irish Continental Group — FY2004 Earnings Presentation on 6ix