Irish Continental Group Plc · EURONEXT:IR5B

Irish Continental — H1 2005 Earnings Presentation

54 slides from Irish Continental's earnings presentation, Sep 8, 2005

  1. Slide 1: Irish Continental Group plc Interim Update

    IRISH CONTINENTAL GROUP, plc Interim Update 8th September 2005

  2. Slide 2: ICG Profile

    ICG Profile Capital 1. Irish Ferries Employed Biggest ferry company operating between UK / Continent and Republic of Ireland. ƒ Modern fleet of large ships ƒ Major barriers to entry 65% ƒ Significant operational gearing ƒ Very strong free cash flow 2. Ship Chartering Division Diversified ship charte

  3. Slide 3: Interim Results

    Interim Results Half Year Half Year Full Year 2005 2004 2004 €m €m €m Turnover 139.6 135.8 293.3 EBITDA 17.1 15.1 49.4 Depreciation / Amortisation (12.8) (12.8) (26.1) Operating Profit 4.3 2.3 23.3 Exceptional Item - - (12.4) Interest (2.6) (2.8) (5.4) PBT 1.7 (0.5) 5.5 EPS Basic 6.4c (2.5c) 18.7c E

  4. Slide 4: Container Division

    Container Division Half Year Half Year Full Year 2005 2004 2004 €m €m €m Turnover 67.5 64.7 129.8 EBITDA 3.4 1.9 5.5* Depreciation/ Amortisation (1.4) (1.4) (3.0) Operating Profit 2.0 0.5 2.5 * After exceptional item of €1.5m

  5. Slide 5: Operations

    Operations ƒ Container Routes ƒ Ireland / Continent Door to Door plus Quay to Quay ƒ UK / Continent Quay to Quay container movement ƒ Port Ownership ƒ Container Terminal in Dublin (“DFT”)

  6. Slide 6: Container Routes

    Container Routes Grangemouth 14 ships Belfast South Shields 13 ports Dublin Dublin Liverpool 24 routes Waterford Cork Holyhead Cork Holyhead Immingham Pembroke Pembroke Felixstowe Tilbury Thamesport Southampton Hamburg Rotterdam Rotterdam Antwerp Le Havre

  7. Slide 7: Key Issues

    KEY ISSUES ƒ Competitive Rate environment in door/door freight ƒ Feeder business strong ƒ DFT terminal in Dublin achieving good growth ƒ Dublin Port Tunnel (July 2006) will significantly enhance access to DFT

  8. Slide 8: Ireland - Continent/UK Market Share 27%

    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

  9. Slide 9: Market Share – LoLo

    Market Share – LoLo 2004 All Ireland (UK & Continent) % ICG 27 BGF 24 Geest/Norfolk 19 Seawheel 16 ECS 9 Others 5 Total 100

  10. Slide 10: Container Terminal Market

    Container Terminal Market 1.2 Million Teu in 2004 ƒ 150 year lease of 33 acres from 1971 ƒ Capacity of terminal increased by 50% (July 2004) Picture courtesy of The Irish Times

  11. Slide 11: Container Handling in Ireland Market Share 22%

    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

  12. Slide 12: Interim Results Ferries & Ship Chartering

    Interim Results Ferries & Ship Chartering Half Year Half Year Full Year 2005 2004 2004 €m €m €m Turnover 72.5 71.5 164.3 EBITDA 13.7 13.2 43.9* Depreciation/ Amortisation (11.4) (11.4) (23.1) Operating Profit 2.3 1.8 20.8 * After exceptional item of €10.9m

  13. Slide 13: Operations: Irish Ferries, Ship chartering

    Operations ƒ Irish Ferries ƒ Ship chartering

  14. 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 Challenger Pride of Cherbourg

  15. Slide 15: Ship Chartering Division

    Ship Chartering Division ƒ Use of ship market knowledge and balance sheet strength to avail of potential charter opportunities in ferry and container shipping markets. ƒ “Pride of Bilbao” on charter to P&O since 1992. Next optional renewal date October 2007. “Challenger” on charter to P&O, has been

  16. Slide 16: Irish Ferries

    [rish Ferries co BP Te oe ST ULYSSES ee —— TRISH FERRIES

  17. Slide 17: Ulysses 2001

    Ulysses 2001 Ulysses Boeing 747

  18. Slide 18: Irish Ferries Route Structure

    Irish Ferries Route Structure Larne Stranraer Belfast Cairnryan Dublin Liverpool Rosslare Holyhead Pembroke Rotterdam Roscoff Cherbourg

  19. Slide 19: Irish Ferries Route Structure

    Irish Ferries Route Structure ƒ Focus on short routes with high utilisation of ships. ƒ Major barriers to entry in Holyhead & Pembroke for key slots ƒ UK / Rep. Ireland Routes ƒ Over 89% of cars travel on short routes into Dublin and Rosslare ƒ Over 53% of RoRo units travel on short routes into Dubl

  20. Slide 20: Passenger Car Market UK-Ireland

    Passenger Car Market UK ÍÎ Ireland Market REPUBLIC OF IRELAND Volumes (Cars) Market Irish Irish Ferries Ferries Share HI : Jan - June 2005 - 7% - 2% 44% July - Aug. 2005 - 10% - 7% 42% Jan – Aug 2005 - 9% - 4% 43% ƒ Weak car market due to low fare airlines (particularly ex. UK to Continent) and rela

  21. Slide 21: Market Share – Cars 2005 v 2004 (H1)

    Market Share – Cars 2005 v 2004 (H1) Republic of Ireland - UK 2005 2004 % % Irish Ferries 44 41 Stena Line 48 48 P&O Irish Sea 1 2 Irish Sea Express / IOMSPC 2 4 Swansea Cork 4 5 Norse Merchant 1 - Total 100 100

  22. Slide 22: Car Performance Irish Ferries Market Share

    Car Performance Irish Ferries Market Share Rep. of Ireland % 42% 43% 41% 40% 41% 44% 45 39% 40 35 30 25 20 15 10 5 0 2000 2001 2002 2003 2004 2004 2005 H.1 H.1

  23. Slide 23: Irish Ferries - Distribution

    Irish Ferries - Distribution Car Booking Report 2005 All Markets Share Half Year Half Year 2005 2004 % % Call Centres 26 30 At our Ports 8 9 Internet 41 36 Direct 75 75 Travel Trade 25 25 Total 100 100

  24. Slide 24: We're clear for rip-off

    (— ) (“We're clear for rip-off” ) Airport taxes. Excess baggage. Parking charges. For real low cost travel, take your car with Irish Ferries. : lyishCerries OCom NI 00353 818 300 400 crseeyor ogee. fhe Low Fares Ferry Company!

  25. Slide 25: If God had meant...

    If God had meant ..re wouldn’t have created deals like this! For real low cost travel, take your car with Irish Ferries. lrishCerries QCom " The Low Fares Ferry Company!

  26. Slide 26: RoRo Freight Market UK-Ireland 2005

    RoRo Freight Market UK-Ireland 2005 REPUBLIC OF IRELAND Volumes Market Irish Market (Freight Units) Ferries Share Jan - June 2005 4% 7% 27% July - Aug 2005 4% 9% 29% Jan – Aug 2005 4% 7% 28% ƒ Strong growth in the market in line with Ireland’s economic growth and further integration with the rest of

  27. Slide 27: Market Share – RoRo 2005 v 2004

    Market Share – RoRo 2005 V 2004 Rep. of Ireland - UK 2005 H.1 2004 H.1 % % Irish Ferries 27 27 Stena Line 27 24 Norse Merchant 26 24 P&O Irish Sea 19 25 Swansea Cork 1 0 Total 100 100

  28. Slide 28: RoRo Freight Performance Irish Ferries Market Share

    RoRo Freight Performance Irish Ferries Market Share Rep. of Ireland % 28% 30 27% 27% 27% 27% 27% 26% 25 20 15 10 5 0 2000 2001 2002 2003 2004 2004 2005 H.1 H.1

  29. Slide 29: 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.

  30. Slide 30: RoRo Freight Traffic Key Slots

    RoRo Freight Traffic Key Slots

  31. Slide 31: RoRo Market Analysis

    RoRo Market Analysis Greater Integration between Ireland & UK/Continent 1992 2004* CAGR % % Value of Imports & Exports €45.1bn €224.2bn 14.3% GDP €40.0bn €148.6bn 11.6% Imports & Exports as % of GDP 113% 151% * Preliminary CSO

  32. Slide 32: Irish Ferries Revenue Mix

    Irish Ferries Revenue Mix 2004

  33. Slide 33: Irish Ferries Cost Analysis

    Irish Ferries Cost Analysis 2004 Payroll 34% Port Charges 21%

  34. Slide 34: Fuel Price Movements

    Fuel Price Movements 2003 2004 2005 2005- Average 2003 Average Brent (US $ per barrel) 28.7 38.8 56.7 Average USD Exchange Rate 1.13 1.22 1.25 Average Brent (€ per barrel) €25.4 €31.1 €45.1 +78% ICG Fuel Cost €20.6m €20.6m €31.1m +51% * 2005 average based on actual to mid August and mid August price

  35. Slide 35: Fuel Price History

    Fuel Price History Brent Crude (brl) vs HFO Dublin (ton) 350.00 60.00 Brent 300.00 50.00 HFO 250.00 $ per Tonne HFO 40.00 $ per Barrel 200.00 30.00 150.00 20.00 100.00 10.00 50.00 - - Jan-03 Mar-03 May-03 Jul-03 Sep-03 Nov-03 Jan-04 Mar-04 May-04 Jul-04 Sep-04 Nov-04 Jan-05 Mar-05 May-05 Jul-05

  36. Slide 36: Industrial Relations

    Industrial Relations ƒ Most of our competitors in the RoRo ferry market and all of the operators in the LoLo market have outsourced crewing using East European or Far Eastern crews. ƒ This is both a threat to our business model and an opportunity for us to reduce our cost base. ƒ We have, with some

  37. Slide 37: Industrial Relations

    Industrial Relations ƒ We are in the middle of a cost review of our Irish Sea routes which is being conducted by two consultants nominated by SIPTU who represent Ships’ Officers and some crew. ƒ If the outcome of this review is unsatisfactory, we have little option but to develop a framework that al

  38. Slide 38: Cash Flow

    Cash Flow Half Year Half Year Full year 2005 2004 2004 €m €m €m Operating Profit before restructuring 4.3 2.3 23.3 Depreciation 12.8 12.8 26.1 EBITDA (before restructuring) 17.1 15.1 49.4 Restructuring costs - - (12.4) 17.1 15.1 37.0 Working Capital Movement 7.0 5.1 0.6 Operating Cash Flow 24.1 20.2

  39. Slide 39: 5/6 Year Performance Cash Flow Per Share

    5/6 Year Performance Cash Flow Per Share 220.9 217.7 196.2 191.5 137.4 82.0 79.3 27% H.1 2000 2001 2002 2003 2004 2005 H1

  40. Slide 40: 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 2.3m shares (10%) valid up to 2006 AGM. DIVIDEND GROWTH SINCE IPO Dividend (1988 -

  41. Slide 41: Summary Balance Sheet

    SUMMARY BALANCE SHEET JUNE JUNE DEC 2005 2004 2004 €m €m €m Non Current Assets Ships 259 272 252 Other 48 47 49 307 319 301 Retirement benefit asset 0 9 0 Working Capital (28) (23) (18) 279 305 283 Shareholders Equity 150 166 151 Net Debt 116 127 118 Retirement benefit obligation 6 0 3 Provisions 7

  42. Slide 42: Composition of Net Debt

    COMPOSITION OF NET DEBT CURRENCY €m FIXED* RATE $ 16 53% 3.6% £ 33 54% 5.6% € 78 56% 4.7% 127 56% 4.8% Cash (11) Net Debt 116 * Up to 2 years from 30 June 2005

  43. Slide 43: Tax

    TAX ƒ LOW TAX ƒ “Tonnage tax” for Irish shipping activities (very low). Approved / encouraged by EU ƒ Std Corporation Tax for other activities (12.5%) ƒ Low blended corporate rate going forward

  44. Slide 44: Conclusion

    Conclusion ƒ No. 1 position - Republic of Ireland / UK & Continent ƒ Huge capacity for growth ƒ Significant capex reduction in future years, while offering best product/service to customers ƒ Threat/opportunity to reduce our cost base ƒ Strong free cash flow

  45. Slide 45: Appendices

    Appendices IRISH CONTINENTAL GROUP

  46. Slide 46: Operational Gearing

    OPERATIONAL GEARING

  47. Slide 47: Ulysses - RoRo Freight

    Ulysses - RoRo Freight 72% night time utilisation 7 years growth at 5% p.a. 100% night time utilisation in 2004 would yield additional €9.5m operating profit or 35 cent per share

  48. Slide 48: Ulysses - Car

    Ulysses - Car 12% day time utilisation 45 years growth at 5% p.a. 25% day time utilisation in 2004 would yield additional operating profit of €20m or 75 cent per share.

  49. Slide 49: Isle of Inishmore 1997

    Isle of Inishmore 1997 Price: €85m Year Built: 1997 Cars: 855 Trucks: 122 Passengers: 2,200

  50. Slide 50: Jonathan Swift 1999

    Jonathan Swift 1999 Price: €38m Year Built: 1999 Cars: 200 Coaches: 10 Passengers: 800

  51. Slide 51: Ulysses 2001

    Ulysses 2001 Price: €107m Year Built: 2001 Cars: 1,342 Passengers: 1,900 Trucks: 240

  52. Slide 52: Normandy 1982

    Normandy 1982 Price: €20.8m Year Built: 1982 Cars: 420 Passengers: 1,577 Trucks: 43

  53. Slide 53: Irish Continental Group plc Interim Update

    IRISH CONTINENTAL GROUP, plc Interim Update 8th September 2005

  54. Slide 54: Slide 54

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