Tpg Inc. · NASDAQ:TPG
Tpg — Q3 2002 Earnings Presentation
33 slides from Tpg's earnings presentation, Oct 28, 2002
Slide 1: Third Quarter 2002 Results Analyst Conference Call
Third Quarter 2002 Results Analyst Conference Call 28 October 2002
Slide 2: Highlights Q3 2002
Highlights Q3 2002 Satisfactory profit growth in difficult markets Continued strong cash performance Solid Mail revenue growth and stable margin despite accelerating volume declines Strong Express revenue growth and margin improvement Continued revenue and margin pressures in Logistics but
Slide 3: Summary of results
Summary of results Q3 2002 Q3 2001 Growth YTD YTD Growth 2002 2001 € mln € mln € mln € mln Revenues 2,805 2,642 6.2% 8,602 8,205 4.8% Earnings from operations 222 210 5.7% 825 765 7.8% EBITA 230 214 7.5% 818 835 -2.0% Operating Income (EBIT) 191 180 6.1% 703 733 -4.1% Net income 99 97 2.1% 387 416 -
Slide 4: Split by business
Split by business Revenues Earnings 2805 +6.2% 2,642 € mln 222 +5.7% 210 37 822 +9.3% 16.6% -11.9% 42 29.2% 752 28.3% 20.0% 41 +70.8% 24 18.5% 11.4% +6.9% 1,071 1,002 38.1% 37.8% +0.0% 144 144 64.9% 68.6% 918 +2.0% 900 32.7% 33.9% Q3 2002 Q3 2001 Q3 2002 Q3 2001 Mail Express Logistics Mail Express L
Slide 5: Mail Overview
Overview Data and 46 Document Management Q3 2002 Q3 2001 46 +0.0% € mln € mln European Mail Revenues 918 900 2.0% 74 Networks 86 EBITA 144 144 0.0% +16.2% Operating Margin 15.7% 16.0% 160 Cross Border 155 -3.1% 620 Mail NL 631 +1.8% 0 200 400 600 800 1,000 1,200 1,400 Q3 2002 Q3 2001 Revenues 5 5
Slide 6: Mail Revenue growth
Revenue growth +2.0% 1.6% -0.3.% Positive overall organic -3 growth despite pressure 0.7% 14 on volumes 7 Acquisition effect of 918 1.6% mainly from Cerilly in Italy and Redmail in 900 Austria z z z z Q3 2001 Organic Acq. FX Q3 2002 6 6
Slide 7: Addressed mail volume growth in the Netherlands
Addressed mail volume growth in the Netherlands Total 2% 1.7% 1.4% 0.9% 0.9% 0.4% 1% -0.4% 0.2% 0% Q1 02 Q2 02 Q3 02 -1% -2% -2.0% -3% -3.4% -4% -5% 2% * Underlying 1% 0% -0.2% Q1 02 Q2 02 Q3 02 -1% -1.4% -2% -1.4% -3% -2.7% -3.2% -4% -3.4% -4.4% -4.5% -3.8% -5% Domestic Direct Total 7 * Adjusted fo
Slide 8: Organic growth by business
Organic growth by business 1.8% 2% 0.7% -1.2% 0.0% -2% -4.3% -6% Mail NL Cross Border Euro Network Data & Doc Total Mngt. Good organic growth in Mail Netherlands due to price and mix effects and other income Euro Networks and Data & Document Management are affected by declining printed media exp
Slide 9: Margin development
Margin development 24% 21.6% 22.2% 20.2% 20.3% 21% 15.7% 16.0% 18% 15% 12% 9% 6% 3% 0% Q1 Q2 Q3 2002 2001 Stable margin level despite start up costs in European Mail Networks and Privver Continuous cost efficiency programmes in Mail Netherlands 9 9
Slide 10: Mail Outlook 2002
Mail Outlook 2002 Further decline in Dutch volumes expected in Q4 2002 Margin targets remain on track due to ongoing cost programmes Revenue growth approx 3% Margin approx 20% 10 10
Slide 11: Express Overview
Overview Q3 2002 Q3 2001 89 Rest of World € mln € mln 99 +11.2% Revenues 1,071 1,002 6.9% EBITA 41 24 70.8% 103 Operating Margin 3.8% 2.4% Australia 91 -11.7% 810 Europe +8.8% 881 0 600 1,200 1,800 Q3 2002 Q3 2001 Revenues 11
Slide 12: Express Revenue growth
Revenue growth +6.9% Organic growth of 6.3% 2.4% -1.8% (8.0% excluding -18 6.3% 24 Australia) Acquisition effect of 63 2.4%, mainly from Bleckmann 1,071 Negative impact from UK Pound and 1,002 Australian Dollar weakening against Euro z z z z Q3 2001 Organic Acq. FX Q3 2002 12
Slide 13: Organic revenue growth
Organic revenue growth 8,5% 8% 7 .4% 8.0 6 .9% 6.1% 6% 5.0 % 6.6% 6 .3% 4% 2.3 % 3,0% 2% -4.8 % 0% 1.1 % -2 % Q1 02 Q2 02 Q3 0 2 -4 % -6 % Europ e ROW To tal Excluding Australia 13
Slide 14: Volume and yield growth
Volume and yield growth Europe - Core Express Products 20% 8% 7% 16% 6% 12% 5% Yield 4% 8% 3% 2% 4% 1% 0% 0% Q1 00 Q2 00 Q3 00 Q4 00 Q1 01 Q2 01 Q3 01 Q4 01 Q1 02 Q2 02 Q3 02 Consignments Kilos Yield 14
Slide 15: Margin development
Margin development 8% 7.0% 6% 5.2% 4.9% 4.5% 4.5% 4% 3.3% 5.9% 3.9% 3.3% 2% 3.8% 3.8% 2.4% 0% Q1 02 Q1 01 Q2 02 Q2 01 Q3 02 Q3 01 2002 2001 Excluding Australia 15
Slide 16: Express Outlook 2002
Express Outlook 2002 Higher revenue growth for the year than originally expected Continued improvements in margins in line with targets Revenue growth > 6% Margin > 5% (Margin excl. Australia > 6% ) 16
Slide 17: Logistics Overview
Overview 58 Rest of world Q3 2002 Q3 2001 +19.0% 69 € mln € mln Revenues 822 752 9.3% EBITA 37 42 -11.9% 175 North America -11.4% Operating Margin 4.5% 5.6% 155 519 Europe 598 +15.2% 0 200 400 600 800 1,000 1,200 Q3 2002 Q3 2001 Revenues 17
Slide 18: Logistics Revenue growth
Revenue growth 6.3% -4.0% +9.3% -30 47 Organic growth increased 7.0% to 7.0% 53 Acquisition effect of 6.3%, mainly Transports Nicolas 822 and TNT DFDS Transport Negative foreign exchange 752 impact of 4%, mainly in the Americas and UK z z z z Q3 2001 Organic Acq. FX Q3 2002 18
Slide 19: Margin development
Margin development 7% 6.1% 6% 5.6% 5.3% 4.7% 4.8% 5% 4.5% 4% 3% Q1 Q2 Q3 2002 2001 Declines in volumes on existing contracts Lower utilisation of capacity on multi-user networks Specific operational issues in several contract start-ups 19
Slide 20: New Business Pipeline
New Business Pipeline €1.7 B Total Pipeline - Sep 2002 Pipeline with project Status >70% 600 500 38% 204 193 8% 400 Rev. (€ m) 77 20% 14% 300 16% 4% 200 346 280 100 F MCG Au to mo tive P ubl ish ing/Medi a Hi-Tech E lectronics 0 Q2 2002 Moving to Won Lost/other Q3 2002 Tyres Othe r 70%-90% Pipelin
Slide 21: Logistics Outlook 2002
Logistics Outlook 2002 Current difficult trading environment will continue into last quarter Cost optimisation actions will take some pressure off margins Revenue growth > 7% Margin > 5% 21
Slide 22: Financial Review
Financial Review Free cash flow of €122 million, up 190% on last year Further improvements in working capital Lower capital expenditure compared to last year Net debt of €1.5 billion at 30 September similar to 30 June 22 22
Slide 23: Key Financial Indicators
Key Financial Indicators Q3 2002 Q3 2001 YTD YTD 2002 2001 EPS (€) 0.21 0.20 0.81 0.88 EPS from continuing operations (€) 0.21 0.20 0.81 0.81 Cash EPS (€) 0.29 0.28 1.06 1.09 Dividend (€) 0.15 0.14 ROC (%) 11.3% 12.6% Gearing (%) 54.0% 73.6% Interest cover (times) 8.5 8.7 23 23
Slide 24: Statement of Income - I
Statement of Income - I Q3 Q3 Growth YTD YTD Growth 2002 2001 2002 2001 € mln € mln € mln € mln Revenues 2,805 2,642 6.2% 8,602 8,205 4.8% Salaries and social security (971) (921) (2,994) (2,830) Depreciation (80) (73) (240) (215) Other operating expenses (1,532) (1,438) (4,543) (4,395) Earnings fro
Slide 25: Non-Allocated items
Non-Allocated items YTD YTD 2002 2001 € mln € mln Gross Net Gross Net Profit on sale of non-core business - - 33 33 Sale of real estate - - 78 50 Australia restructuring - - (30) (20) One-off items - - 81 63 Other non-allocated (7) (5) (11) (7) Total income/ (cost) (7) (5) 70 56 25 25
Slide 26: Statement of Income - II
Statement of Income - II Q3 Q3 Growth YTD YTD Growth 2002 2001 2002 2001 € mln € mln € mln € mln EBIT 191 180 6.1% 703 733 -4.1% Fin. income & expenses (31) (29) (83) (84) Income taxes (60) (56) (226) (232) Results from affiliates (1) 2 (4) 0 Minorities 0 0 (3) (1) Net income 99 97 2.1% 387 416 -7.0
Slide 27: Cash Flow Overview
Cash Flow Overview Q3 Q3 YTD YTD 2002 2001 2002 2001 € mln € mln € mln € mln Net Cash provided by operating activities 214 161 805 517 Net Cash used in investing activities (96) (147) (377) (471) Net Cash used in financing activities (130) (16) (587) (116) Net Cash Flow (12) (2) (159) (70) 27 27
Slide 28: Free Cash Flow
Free Cash Flow Q3 Q3 YTD YTD 2002 2001 2002 2001 € mln € mln € mln € mln Net Income 99 97 387 416 Depreciation & amortisation 119 107 355 317 Changes in working capital 31 27 145 (78) Changes in pension provisions (47) (31) (118) (93) Changes in other provisions 12 (15) 25 (40) Changes in deferred t
Slide 29: Capital Expenditure
Capital Expenditure 155 334 € mln 320 111 56 106 118 42 39 142 123 41 60 79 86 28 Q3 2002 Q3 2001 YTD 2002 YTD 2001 Mail Express Logistics Mail Express Logistics 29 29
Slide 30: Balance Sheet
Balance Sheet Q3 2002 FY 2001 Fixed assets 5,589 5,587 Current assets 2,295 2,416 Cash and cash equivalents 285 451 Total assets 8,169 8,454 Equity 2,796 2,499 Provisions 1,075 1,173 Interest bearing liabilities 1,796 2,180 Non Interest bearing liabilities 2,502 2,602 Total liabilities and equity 8,
Slide 31: Pension costs
Pension costs Capital market situation is not going to affect TPG’s pension cost in 2002 No additional cash contribution is likely to be required from TPG in 2002 Capital losses may necessitate additional cash contributions in 2003 Pension costs in 2003 P&L are expected to be higher 31
Slide 32: Outlook
Outlook Current world economic climate remains uncertain and shows little sign of improvement in the short term Tough trading environment is expected to continue into 2003 For full year 2002, the outlook statement is consistent TPG expects to grow net income from continuing operations at the
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