Go-Ahead — The Go-Ahead Group — Investec conference (November 2020)
34 slides from Go-Ahead's conference presentation, November 2020
Slide 1: The Go-Ahead Group plc
The Go-Ahead Group plc November 2020
Slide 2: Our strengths
Our strengths Clear and Part of the Experts in A proven Areliable important solution our field approach partner purpose Integral part of climate Extensive experience Devolved customer Strong partnerships iverine vi i change and air quality and expertise in bus d and i Delivering vital services agend
Slide 3: Financial overview 2020
Financial overview 2020 Total operating profit * Adjusted net debt ^ Free cashflow # (pre-exceptional items) (pre-IFRS 16) £77.9m £321.6m £352.8m (2019: £121.1m) (2019: £270.3m) (2019: £74.1m) Earnings per share Adjusted net debt / EBITDA Headroom on facilities plus (pre-exceptional items) (pre-IFRS
Slide 4: COVID-19
COVID-19
Slide 5: Strengths coming into the COVID-19 crisis
Strengths coming into the COVID-19 crisis • Increased recognition of the importance of buses • Devolved structure and management teams • Strong collaboration with partners and clients (DfT, TfL, local authorities) • Well planned crisis response • Strong values and well engaged colleague base • Good
Slide 6: COVID-19: Our response
COVID-19: Our response To safeguard the health and To play our role in society in To protect our business wellbeing of our colleagues and challenging times customers • Following government guidelines • Maintained core services through • Swift action to conserve cash and first lockdown reduce costs,
Slide 7: External trends accelerated
External trends accelerated Consumer behaviour • Working from home, flexible working • Food deliveries, online shopping, Deliveroo • Staying local • Staycations and local holidays Air quality and climate change • Car free improvements during lockdown • Increasing congestion coming out of lockdown •
Slide 8: Our strategy
Our strategy
Slide 9: Our strategy
Our strategy A world where every journey is taken care of Will be delivered by our strategy to Protect and grow Win new bus an the core rail contrac With responsibility as a business for Underpinned by our core beliefs and attitudes Technology uojjejnday We believein @ Trusting people @ Accountable
Slide 10: Protect and grow the core
Protect and grow the core • Focus during crisis has been protecting core operations in: Regional bus Highest industry customer satisfaction score (90%) London & International bus Largest operator of contracted bus services in London (24% market share). Successful operations in Singapore and Ireland.
Slide 11: Win new bus and rail contracts
Win new bus and rail contracts • Local bid teams in place for strong pipeline of opportunities in Singapore, Australasia and the Nordics Regional bus • Contract to operate 50% of Cornwall’s bus services through Go South West • Demand Responsive Transport contract in Lincolnshire London & Internation
Slide 12: Develop for the future of transport
Develop for the future of transport • Billion Journey Project delivered partnerships with technology start ups to improve performance and customer experience • Successful air filtering bus trial in Southampton expanding to other regions • Northumberland Park, London has become Europe’s largest overn
Slide 13: Operating divisions
Operating divisions
Slide 14: Operating profit by division - 2020
Operating profit by division - 2020 2020 Year on year 2019 change £m £m % £m £77.9m Regional bus 20.5 (24.0) (53.9) 44.5 London & International bus 48.5 (2.7) (5.3) 51.2 Regional bus Total bus 69.0 (26.7) (27.9) 95.7 London & International bus Rail 8.9 (16.5) (65.0) 25.4 Rail Total 77.9 (43.2) (35.7
Slide 15: Regional bus
Regional bus • Regional bus heavily impacted by COVID-19; passenger demand as low as 10% of previous levels during first lockdown – 2020 operating profit* £20.5m (2019: £44.5m) • Passenger volumes steadily returning before second lockdown to around 50-60% of normal volumes – regional variations • Se
Slide 16: Regional bus scenarios
Regional bus scenarios • Three variables impacting future performance: passenger demand, service levels, government support (CBSSG) Impact as % of prior year Scenarios Passenger demand vs 50-60% 80% 90% pre-COVID-19 Service level vs pre-COVID-19 90% 95% 100% Impact on underlying margin (c. 25ppts)*
Slide 17: London & International bus
London & International bus • Resilient businesses; no exposure to changes in passenger demand and revenue protected by contracted income – 2020 operating profit of £48.5m (2019: £51.2m) • Operating mileage at pre-crisis levels in London, Ireland and Singapore • Delivering service in line with client
Slide 18: Rail
Rail • Resilient business; limited exposure to changes in passenger demand. Majority of revenue generated through contractual payments – 2020 operating profit (before exceptional items) was £8.9m, down £16.5m largely due to changing contractual arrangements (not COVID related) and challenges in Germ
Slide 19: Rail - Germany
Rail - Germany • Significant operational challenges since contracts began in June 2019 - Late delivery of trains and driver shortages • Material financial loss - Contractual penalties incurred and additional costs of hiring temporary drivers and leasing temporary vehicles • Ongoing claims against ro
Slide 20: Net debt
Net debt • Material impact of IFRS 16 – bank covenants remain on pre-IFRS 16 basis • Adjusted net debt / EBITDA of 1.96x (pre-IFRS 16) at 27 June 2020 - within target range of 1.5x - 2.5x • Expected to peak towards the upper end of the target range at H1'21 • BBB- / Baa3 (stable) rating. Ratings rea
Slide 21: Liquidity
Liquidity Liquidity position • Headroom at year ended 27 June 2020 was c. £230m including unrestricted cash At 27 June 2020 • EBITDA positive £m • No debt maturities to 2024 Syndicated facility 2024 280.0 7 Year £250m Sterling Bond 2024 250.0 Actions taken to further strengthen liquidity Euro financ
Slide 22: Financial outlook
Financial outlook • Regional bus outlook remains uncertain. Financial performance dependent on balance of passenger demand, service levels and government funding • London & International bus is expected to deliver a similar operating result in 2021 • Rail is expected to deliver a breakeven operating
Slide 23: Responsible business
Responsible business
Slide 24: Better teams
Better teams Our 30,000 colleagues are the foundation of our business. Their dedication, innovation and ambition contribute to the delivery of convenient and reliable transport services for our customers • Investment in health and wellbeing – mental health ambassadors, more colleague engagement • Di
Slide 25: Happier customers
Happier customers Our vision is a world where every journey is taken care of • Innovation in customer information – app, website and journey planners include Seat Finder and When2Travel information on bus and rail • Increased cashless payments through increased mobile ticketing, smartcard and contac
Slide 26: Stronger communities
Stronger communities Our services provide vital links to work, education and health services, and connect people with friends and family • Adapting services to meet local needs for NHS and other key workers during lockdown • Supporting wider community needs for equipment and practical assistance • S
Slide 27: Safer working
Safer working Providing a safe and supportive environment for our colleagues, customers and communities. • Ensuring workplaces and customer environments are COVID secure – hi-tech sanitising, swab testing, driver screens • Continued innovation and investment in technology – remote camera monitoring,
Slide 28: Cleaner environment
Cleaner environment Public transport reduces carbon emissions and improves air quality by taking cars off the road • Largest electric bus operator in UK, now around 180 vehicles • 172 low or zero emission buses introduced in the year • Target of zero emission bus fleet by 2035 • UK rail's largest EV
Slide 29: Group outlook and focus
Group outlook and focus • Continue to build confidence in customers in using buses and trains • Agile response through local teams to reshape schedules and networks to match customer demand patterns • Rebuilding as a lean business; maintain strong financial discipline • Strong partnerships and relat
Slide 30: Appendices
Appendices
Slide 31: IFRS 16 – divisional impact
IFRS 16 – divisional impact Operating profit (on a pre-exceptional basis) 2020 2019 IFRS 16 basis IFRS 16 effect IAS 17 basis IAS 17 basis £m £m £m £m Regional bus 20.5 0.3 20.2 44.5 London & International bus 48.5 0.6 47.9 51.2 Total bus 69.0 0.9 68.1 95.7 Rail 8.9 8.8 0.1 25.4 Total 77.9 9.7 68.2
Slide 32: IFRS 16 – Impact on key metrics
IFRS 16 – Impact on key metrics 2020* 2019* Impact of IFRS 16 on profit before tax IFRS 16 IFRS 16 IAS 17 basis IAS 17 basis basis effect £m £m £m £m EBITDA 547.8 383.9 163.9 205.5 Group operating profit – pre- 77.9 9.7 68.2 121.1 exceptional items Net finance costs (20.4) (13.7) (6.7) (6.8) Profit
Slide 33: Accreditations and recognition
Accreditations and recognition • “Low risk” rating from Sustainalytics • “AAA" rated by MSCI • FTSE4Good percentile rating of 99 out of a maximum of 100 • London Stock Exchange Green Economy Mark • Carbon Disclosure Project – B grade 33
Slide 34: Contact us
Contact us @ investorrelations@go-ahead.com 34
The Go-Ahead Group — Investec conference (November 2020) on 6ix