Slide 1: FirstGroup FY 2023 Results
FirstGroup FY 2023 Results Thursday 8 June 2023
Slide 2: Agenda
Agenda 1. Overview 2. Financial review 3. Business review 4. Summary 2 14 June 2022 | Results for 52 weeks to 26 Mar 2022
Slide 3: Strong financial performance underpins potential for further value creation
Strong financial performance underpins potential for further value creation Group adjusted attributable profit more than doubled to £82m - driven by growth in First Bus and First Rail open access operations (Lumo and Hull Trains) Our strategy and disciplined capital allocation policy is deliveri
Slide 4: Agenda
Agenda 1. Overview 2. Financial review 3. Business review 4. Summary 4 14 June 2022 | Results for 52 weeks to 26 Mar 2022
Slide 5: Financial summary
Financial summary FY 2023 FY 2022 FY 2023 change vs £m Continuing Continuing FY 2022 (Continuing) Revenue 4,755.0 4,591.1 +163.9 Group adjusted attributable profit1 82.1 36.2 +45.9 Adjusted2 - Operating profit 161.0 106.7 +54.3 - Profit before tax 104.2 24.8 +79.4 - Earnings per share3 p 10.6p 1.6p
Slide 6: First Bus: growing our margins as funding tapers
First Bus: growing our margins as funding tapers Revenue +14% vs FY 2022 mainly reflecting increased passenger volumes in the second half of the year, partly offset by a £42.8m decrease in funding Passenger volumes increased by 20% vs. FY 2022; total mileage reduced by 9% Revenue per mile incr
Slide 7: First Rail: financial performance driven by growth in open access
First Rail: financial performance driven by growth in open access £m FY 2023 FY 2022 Change Passenger volume changes and industrial action have GWR 18.9 23.1 (4.2) limited impact on fee income under the terms of the SWR 6.1 7.0 (0.9) management fee-based contracts, albeit some WCP (incorporating A
Slide 8: Substantial increase in Group adjusted attributable profit
Substantial increase in Group adjusted attributable profit Our dividend policy focuses on underlying earnings from rail contracts to look through IFRS 16 distortions 6.6 (12.4) 4.1 41.2 82.1 13.2 (6.8) 36.2 FY2022 £m First Bus Management-fee Open access and Central costs Treasury interest Tax FY2023
Slide 9: Significant cash flow generation
Significant cash flow generation £168m of cash generated from operations 48.7 3.3 (96.6) 116.4 (31.6) 116.3 (1.6) 109.9 (36.8) 24.4 (14.0) (14.7) (3.9) FY 2022 EBITDA Management Working Capex Growth Disposal Interest & tax Dividends Greyhound Share Buy Other FY 2023 Adjusted net fees capital Investm
Slide 10: Future sources of contingent value
Future sources of contingent value We have a strong balance sheet and pension position, no significant legacy liabilities and clarity on the remaining sources of value from the North American disposals First Bus and Group pensions On an IAS 19 basis the surplus on the Bus, Group and LGPS pensions
Slide 11: Disciplined capital allocation supported by strong balance sheet
Disciplined capital allocation supported by strong balance sheet First Bus: £94.3m net cash capex in FY 2023, including gross investment of £43.2m in electric buses and infrastructure First Rail: continues to be cash capital-light, with any capital expenditure required by the management fee-base
Slide 12: FY 2024 financial outlook
FY 2024 financial outlook While sensitive to consumer spending and inflation trends, sequential progress expected in FY 2024 First Bus c.£130m net capex, including committed net capex of c.£105m on decarbonisation Financial performance anticipated to be in line with our expectations despite lo
Slide 13: Agenda
Agenda 1. Overview 2. Financial review 3. Business review 4. Summary 13 14 June 2022 | Results for 52 weeks to 26 Mar 2022
Slide 14: A year of delivering against our strategy and operational plans
A year of delivering against our strategy and operational plans Performance in FY 2023 has reflected growth in First Bus in the second half and the outperformance of our open access rail operations throughout the year Improvement in First Bus operating margin reinforces confidence in trajectory to
Slide 15: First Bus: transitioning to a more commercial model
First Bus: transitioning to a more commercial model Running better quality mileage by using our enhanced data to align services to demand, implement smarter fares and drive operational efficiencies 98.0 (62.6) Passenger volumes +20%, aided by free travel for under-22s in Scotland and £2 fare cap i
Slide 16: First Bus: leveraging our assets and market capabilities
First Bus: leveraging our assets and market capabilities This is a considerable market where we are actively looking to grow our market share Revenue from our adjacent services of £175m FY 2023 (FY 2022: £121m): 26.7 175.1 Acquisitions 12.6 14.9 Somerset Passenger Solutions (now 100% owned): trans
Slide 17: First Bus electrification in action
First Bus electrification in action Good progress towards our 2035 decarbonisation target as we identify opportunities to accelerate the electrification of our fleet and infrastructure and generate adjacent revenue streams Progress to Date Future Opportunities Our strong balance sheet and ownershi
Slide 18: Lumo – first full year performance ahead of expectations
Lumo – first full year performance ahead of expectations Our fully electric service has helped to make rail the favoured mode of transport between London and Edinburgh FY 2023 FY 2022 Change Revenue (£m) 38.6 6.5 +32.1 Passenger journeys (m) 1.1 0.2 +0.9 Seat capacity utilisation (%) 71 64 +7bps l
Slide 19: Hull Trains – strong performance on growth in passenger journeys
Hull Trains – strong performance on growth in passenger journeys Performing ahead of expectations on strong recovery in passenger journeys FY 2023 FY 2022 Change Revenue (£m) 32.1 19.9 +12.2 Passenger journeys (m) 1.1 0.7 +0.4 Seat capacity utilisation (%) 59 45 +14bps launched September 2000 we
Slide 20: First Rail's management fee-based operations – focused on delivery
First Rail’s management fee-based operations – focused on delivery Private operators have an important role to work with the government to reinvigorate the UK rail industry and attract more customers to the railway The management fee-based TOCs delivered £38.7m of attributable net income in FY 2023
Slide 21: First Rail's platform for additional value
First Rail’s platform for additional value As a leading operator with considerable experience and capability, we are well positioned to grow and diversify our earnings base Additional Services Pipeline of opportunities to create additional value Evo-rail: installation on SWR network continues Re
Slide 22: Agenda
Agenda 1. Overview 2. Financial review 3. Business review 4. Summary 22 14 June 2022 | Results for 52 weeks to 26 Mar 2022
Slide 23: Looking forward
Looking forward Our improved financial performance in FY 2023 demonstrates our leading capability with an ambition to grow, innovate and create sustainable value for all our stakeholders First Bus: a more agile and commercial business on track to deliver a 10% operating margin Significant invest
Slide 24: Appendix
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Slide 25: Building on our strong sustainability foundations
Appendix: Building on our strong sustainability foundations Public transport is central to levelling up, urbanisation and decarbonisation agendas as well as a source of green jobs throughout the supply chain Selected FirstGroup credentials and ratings: Responsible business remains intrinsic to our o
Slide 26: First Rail accounting
Appendix: First Rail accounting FirstGroup includes alternative measures in the accounts that adjust for the underlying economics of the rail contracts: Attributable net income from management fee-based operations: cash fee income attributable to the Group from these businesses – with adj. £m FY 2
Slide 27: Rail performance fee summary
Appendix: Rail performance fee summary The performance of train operators is subject to a detailed review process that is independently assessed SWR TPE GWR WCP National Rail £m National Rail National Rail ERMA1 Contract Contract Contract (70% share) (70% share) Fixed annual management fee 3.3 2.3 6
Slide 28: TPE Accounting
Appendix: TPE Accounting TPE contributed net attributable income of £8.5m in FY 2023 to the Group’s total of £82.1m (FY 2022: £8.9m) TPE FY 2023 income includes Transpennine Route Upgrade fees and settlements relating to previous period TPE fees for April 2022 to end of May 2023 will be paid t
Slide 29: Divisional adjusted operating profit
Appendix: Divisional adjusted operating profit Revenue Operating profit1 Operating margin1 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 £m First Bus 902.5 789.9 58.4 45.2 6.5% 5.7% First Rail 3,893.2 3,801.2 124.8 87.8 3.2% 2.3% Group items (40.7) - (22.2) (26.3) n/a n/a Continuing total 4,755.0
Slide 30: Divisional EBITDA
Appendix: Divisional EBITDA Revenue EBITDA1 EBITDA margin1 £m FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 First Bus 902.5 789.9 120.9 104.4 13.4% 13.2% First Rail 3,893.2 3,801.2 661.0 649.9 17.0% 17.1% Group items2 (40.7) - (19.5) (23.1) n/a n/a Continuing total 4,755.0 4,591.1 762.4 731.2 16.0
Slide 31: Group adjusted attributable profit
Group adjusted attributable profit £m FY 2023 FY 2022 Change Group adjusted attributable profit comprises: - First Bus adjusted operating profit 58.4 45.2 +13.2 - Attributable net income from rail management fee-based operations1 38.7 45.5 (6.8) - Adjusted operating profit from rail open access and
Slide 32: Other key profit and loss items
Appendix: Other key profit and loss items £m FY 2023 FY 2022 Group items: central costs £4.1m lower than prior year, reflecting the Adjusted1 actions to resize the organisation following the North American First Bus 58.4 45.2 disposals. First Rail 124.8 87.8 Group items (22.2) (26.3) Net finance
Slide 33: Reconciliation to First Rail-adjusted metrics
Appendix: reconciliation to First Rail-adjusted metrics FY 2023 Movements FY 2023 Group Adjusted First Adjusted £m adjusted Rail earnings Gross up tax Actual interest earnings attributable to IFRS 16 and minority and tax interests after tax profit basis First Bus adjusted operating profit 58.4 - - -
Slide 34: Net adjusting items
Appendix: Net adjusting items £30.8m credit from net adjusting items principally reflects gains on sale of legacy Greyhound US properties, offset by the First Transit earnout valuation adjustment (both discontinued operations) Adjusting charges in the Continuing business of £(7.1)m relate primarily
Slide 35: Movement in net debt
Appendix: Movement in net debt Adjusted Statutory £m Ring-fenced cash IFRS 16 leases Net cash / (debt) net (debt) EBITDA 116.3 - - 116.3 Management fees 48.7 - - 48.7 Working capital 3.3 - - 3.3 Cash flow from operations 168.3 - - 168.3 Capex (96.6) - - (96.6) Growth investments (36.8) - - (36.8) Di
Slide 36: Total capital expenditure and acquisitions
Appendix: Total capital expenditure and acquisitions Fixed asset / software additions Cash £m (including acquisitions) FY 2023 FY 2022 FY 2023 FY 2022 First Bus 119.1 61.1 150.1 63.2 First Rail 56.6 57.3 56.7 52.6 Group items 1.0 1.7 1.1 5.1 Total 176.7 120.1 207.9 120.9 In FY 2023 we entered into
Slide 37: Net finance costs and taxation
Appendix: Net finance costs and taxation £m FY 2023 FY 2022 Bonds 13.5 22.2 Bank borrowings 3.5 14.1 CCFF (commercial paper) - 0.7 Supplier financing - 1.5 Senior unsecured loan notes - 3.2 Lease interest1 52.1 43.3 Notional interest on long-term provisions 0.2 4.9 Notional interest on pensions (6.5
Slide 38: IFRS 16 (leases)
Appendix: IFRS 16 (leases) As at 25 March 2023, £1.7bn of leased assets were recognised as Right of Use assets on the balance sheet. FY 2023 FY 2022 £m Under IAS17 IFRS 16 effect Under IFRS 16 Under IFRS 16 Adjusted and Continuing EBITDA 170.1 +592.3 762.4 731.2 Operating profit 119.1 +41.9 161.0
Slide 39: Diesel and Electricity hedge positions as at June 2023
Appendix: Diesel and Electricity hedge positions as at June 2023 UK Bus Diesel Exposure FY 2023 FY 2024 FY 2025 Annual ‘At risk’ volume (litres ‘m) 89.9 81.4 73.4 % hedged 92% 85% 55% Diesel rate ($/barrel) 79.6 93.6 98.9 Equivalent cost per litre 38p 46p 50p Prices include crude and refining cost
Slide 40: Important notice
Important notice This presentation includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including (but not limited to) the terms anticipates, believes, could, estimates, expects