Mobico Group Plc · LSE:MCG
Mobico — National Express Group — FY2021 Earnings Presentation
40 slides from Mobico's earnings presentation, Mar 10, 2022
Slide 1: Full Year Results
Slide 2: Agenda
national express 1 Introduction and highlights 2 Financial review 3 Strategic progress 4 Q&A 5 Appendix
Slide 3: Introduction and highlights
Introduction and highlights Ignacio Garat Group Chief Executive
Slide 4: Introduction and highlights
Introduction and highlights Evolve & demand recovery delivering significantly improved results e Launched Evolve, targeting an incremental £1bn of revenue and at least £100m of EBIT from 2022 to 2027 e Purpose embedded in our strategy and everything we do ¢ Significant benefits from modal shift to s
Slide 5: Financial review
Financial review Chris Davies Chief Financial Officer national express
Slide 6: 2021 full year financial review: Summary
2021 full year financial review Summary Underlying £m 2021 2020 Change Revenue 2,170.3 1,955.9 11.0% EBITDA 300.0 186.6 60.8% Group Operating Profit/(Loss) 87.0 (60.8) 137.8m Group PBT 39.7 (106.1) 145.8m Basic EPS 0.1p (14.6p) 14.7p Statutory £m 2021 2020 Change Group Operating Profit/(Loss) (36.2)
Slide 7: Sequential recovery continues
2021 full year financial review Sequential recovery continues Revenue as a % of 2019 Qi Q2 Q3 a4 Qi Q2 Q3 a4 2020 2021 Allon a constant currency basis national express EBITDA
Slide 8: Separately disclosed items
2021 full year financial review Separately disclosed items Income statement Cash £m 2021 2020 2021 Amortisation of intangibles arising upon acquisition (38.8) (62.6) - Covid-related costs (41.0) (245.7) (31.5) Restructuring costs (12.3) (14.0) (9.4) Re-measurement of RRX onerous contract provision (
Slide 9: Divisional summary
2021 full year financial review Divisional summary Revenue* Underlying Operating Profit/(Loss) ALSA 718m +32.8% €872mM +7.0% £398m 42.5% £182m +35.2% ALSA North America UK Other Group 2021 €65.9m $102.3m (£22.6m) (£21.4m) £87.0m 2020 €7.5m $16.3m (£49.0m) (£20.9m) (£50.8m) Change €58.4m $86.0m £26.4
Slide 10: Fixed costs reduced, variable costs locked
2021 full year financial review Fixed costs reduced, variable costs locked — Costs up only 4% on 11% revenue growth - £100m cost savings programme announced last year is largely complete — Fuel fully hedged for 2022 and into 2024 at prices lower than 2021 - Vehicles and parts subject to long-term su
Slide 11: Return to strong free cash flow
2021 full year financial review Return to strong free cash flow £m H1 2021 FY 2021 FY 2020* EBITDA 128.2 300.0 186.6 Working capital (4.5) 33.0 (95.6) Net maintenance capex (56.7) (142.1) (215.9) Pension deficit (3.6) (7.2) (7.4) Operating cash flow 63.4 183.7 (132.3) Tax & interest (22.8) (60.3) (6
Slide 12: Significant deleveraging
2021 full year financial review Significant deleveraging £m 2021 2020* Free cash flow 123.4 (196.0) Net growth capital expenditure (134.4) (35.3) Net acquisitions and disposals (64.3) (48.0) Proceeds from equity issues - 725.6 Separately disclosed items (44.4) (126.9) Other (mainly FX) 59.8 (87.2) N
Slide 13: ZEVs reduce pollution and costs...and drive growth
2021 full year financial review ZEVs reduce pollution and costs...and drive growth Discounted lifetime costs Undiscounted input costs 14% lower Capital cost* Lifetime operating costs ‘ 3 +£206k// -£431k . 5 £500k £480k £430k ° LJ Diesel outright EVoutright EV availability Diesel Electric Diesel Elec
Slide 14: Significant liquidity headroom
2021 full year financial review Significant liquidity headroom Liquidity profile - committed facilities a | a a Ee om 2022-2023 20242025 2028-2027 250 20 | 2028 = 2029. 203020312032 mleases = RCF mHybrid mDivisional bankloans ™Bonds/USPP - £0.9bn cash and committed headroom: — RCF undrawn £0.5bn — C
Slide 15: Pipeline of opportunities worth an annualised £1.5bn revenue
Pipeline of opportunities worth an Intention to reinstate dividend for Anticipate significant deleveraging annualised £1.5bn revenue, mainly full year 2022, based on during 2022 with gearing of c.2.5x organic expectations for 2022 performance by 31 December
Slide 16: Guidance
Guidance 2022 and longer term Revenue back to around 2019 levels Free cash flow conversion at least 60% Maintenance capex around 0.8 times depreciation Around £100m of growth capex anticipated Gearing expected to be around 2.5x by 31st December Intention to reinstate dividend in respect of full year
Slide 17: Strategic progress
Strategic progress Ignacio Garat Group Chief Executive
Slide 18: Operational progress in 2021
Operational progress in 2021 national express UK & Germany Strong safety results with 5 star BSC safety audits in both Bus and Coach Rebuilt and redesigned our Coach networks, building back patronage Further progress on transition to ZEVs and industry-leading ‘availability contract’ model Emergency
Slide 19: Evolve: a clear vision and strategy
@yolve A clear vision and strategy Our Evolve strategy is rooted in our vision - to be the world’s premier shared mobility operator We have a clear purpose: to lead the modal shift from cars to mass transit We do this through five customer propositions, underpinned by a technology All of which drive
Slide 20: Climate change
Climate change We have a crucial role to play * As governments around the world invest in public transport to meet cleaner air and carbon reduction targets, there is a significant modal shift opportunity * Multiplier effect of modal shift to public transport whilst also decarbonising our own fleet *
Slide 21: Social mobility
Social mobility * Transforming peoples’ lives through access to clean, affordable, safe and reliable services * Annual cost of using a bus is around 20% of the cost of running a car + 44% of bus trips are for work or education compared to 27% of solo car journeys * Inthe US, 26m students rely on the
Slide 22: Evolve in action
@yolve in action Fatalities Weighted Index per milion miles, Safety improvements in North America Fill the Transit GaP Mobility as a service national express ZEV transition in the UK
Slide 23: Living with Covid-19
Living with Covid-19 Positive outlook for public transport Returning to the office Returning to travel Returning to public transport national express * Source: CBRE ** CAZ = clean air zone, LEZ = low emission zone US Tech industry leased 76% more office space year-on-year in last three quarters of 2
Slide 24: Demand recovery
Demand recovery Monthly passengers as a % of 2019 from September 2021 to February 2022 90% 80% Omicron impact in fi in Dec 21 & 1 22 o 5 70% 6 60% © 8 ag 50% ® 2 5 40% a ng (a © 30% 2 2 3 20% a 10% 0% Jan Jan fj Feb Jan Spain Long Haul UK Bus UK Coach Shuttle national express Note: the Spain Long Ha
Slide 25: Summary
Summary Improving financial results Environmental leadership E est Midlands al = Fectaic7 Positioned for profitable growth national express
Slide 26: Q&A
Q&A national express 26
Slide 27: Appendix
Appendix
Slide 28: An attractive investment case
An attractive investment case We have five We are the compelling, best-in-class hard-to-replicate operator customer propositions to leverage this growth national express
Slide 29: Our long-term financial targets
Our long-term financial targets Revenue back to 2019 levels in Free cash conversion 2022, targeting an a year, targeting at least Margin averaging 9% for 2022 to 2027, of free cash generation from 2022 to 2027 national express Paying a dividend at least targeting 2022 reinstatement A lower levered b
Slide 30: North America
North America Significant improvement in financial returns Summary Returns — Improving trajectory in trading across each business line 2021 2020 — Schools fully back in 2021/2022 school year, but with operational challenges with driver shortages Revenue $1,199.7m $1,121.5m — Transit operating at aro
Slide 31: ALSA
ALSA Strong recovery in revenue growth & profit Summary — Strong recovery in trading with significantly improved financial results —Long-haul passenger demand peaking at 70% of pre-pandemic levels — Morocco traded ahead of pre-pandemic levels: c.290m passengers carried, up 50% versus 2019; driven by
Slide 32: UK: Improving trajectory with stronger H2
UK Improving trajectory with stronger H2 Summary — Stronger H2 with improving trajectory following the Q1 3 national lockdown and significantly reduced services in Coach in Q2 — Coach revenue rebuilding; passengers peaking at 55% of pre- pandemic levels; much higher demand on intercity versus airpor
Slide 33: Germany
Germany Strong revenue growth & return to profit em Summary — Strong revenue growth reflecting full year of third RRX service — Revenue partially protected: RRX contract being a gross cost contract — Service running at 100% of pre-pandemic levels — Continued to build our reputation for high performa
Slide 34: Risk management: Fuel risk largely fixed until 2023
Risk management Fuel risk largely fixed until 2023 Fuel hedging 2021 2022 2023 2024 % hedged* 100% 100% 64% 25% Price per litre™* 37.8 34.0 34.4 38.5 -2021 fuel costs broadly flat year-on-year on a like-for-like basis -2022 fuel cost benefit forecast c.£3m on a like-for-like basis national express 3
Slide 35: Covenants and ratings
Covenants and ratings Robust Balance Sheet; Investment Grade ratings confirmed Covenant ratios 2021 2020 Ratings Grade Outlook Gearing 3.6x 6.6x Moodys Baa2 Negative Interest cover 6.3x 2.7x Fitch BBB Stable - Gearing almost back within pre-amendment limit of 3.5x. Gearing covenant test waived at De
Slide 36: Risk management: Pension deficit
Risk management Pension deficit - payments agreed through to 2026 582 } i Pensions £m (IAS19) 680 736 L L be | | MAssets "Liabilities mSurplus/(Deficit) | (90) (135) @5) 2019 2020 2021 Surplus /(Deficit) Surplus /(Deficit) Charge Charge £m 31 Dec 2021 31 Dec 2020 2021 2020 UK Bus (96.1) (141.6) (3.9
Slide 37: Covid-related government support
Covid-related government support UK CBSSG Available up to 31 August 2021 and provided funding for bus operators to run full services during the pandemic. The grant funded the difference between the passenger revenue and operating costs, to bring the operator to broadly breakeven. BRG (Bus Recovery G
Slide 38: MSCI ESG Research disclaimer
*The use by National Express Group of any MSCI ESG RESEARCH LLC or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of national express group by MSCI. MSCI services and
Slide 39: Sustainability is embedded in our Evolve strategy
Sustainability is embedded in our @yolve strategy PY e ® Ej ) 2 3 ey g 7 6 ° Vision: The world’s premier shared mobility operator Purpose: To lead the modal shift from cars to mass transit The most reliable Sustainability is deeply embedded within our Evolve strategy, starting with our Purpose: To l
Slide 40: 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
National Express Group — FY2021 Earnings Presentation on 6ix