Firstgroup Plc · LSE:FGP
Firstgroup — Merger or Acquisition (April 2021)
24 slides from Firstgroup's merger presentation, Apr 23, 2021
Slide 1: Proposed sale of First Student and First Transit
FirstGroup plc Proposed sale of First Student and First Transit 23 April 2021
Slide 2: Successfully delivering the strategy
Successfully delivering the strategy ▪ Deal signed for sale of First Student and First Transit to EQT Infrastructure for EV of $4.6bn ▪ Full strategic value achieved for these high quality assets – 8.9x FY20 EBITDA (pre-IFRS 16) ▪ Transaction rationalises portfolio, addresses longstanding North Amer
Slide 3: Unlocking the value
Unlocking the value ▪ Transaction follows full review of all strategic options by the Board and is the best means to unlock value for all shareholders ▪ Agreement with EQT Infrastructure follows a comprehensive and competitive process ▪ Recognises long-term, strategic value of First Student and Firs
Slide 4: Use of proceeds
Use of proceeds Board focused on balancing five principal considerations in determining the use of proceeds: ▪ Return value to shareholders, recognising value achieved on the sale of First Student and First Transit ▪ Address the substantial legacy liabilities of the Group, including for pensions and
Slide 5: Use of proceeds
Use of proceeds Transaction strengthens balance sheet, addresses key legacy liabilities of the Group, and allows for a return of c.£365m or 30p per share in value to shareholders: 1 Significant reduction in level of debt for Retained Group: £m ▪ March 2021 net debt of c.£1.4bn, of which c.£220m will
Slide 6: Transaction timeline
Transaction timeline ▪ Transaction conditional on FirstGroup shareholder and North American regulatory approval ▪ Shareholder circular expected to be published as soon as practicable ▪ Shareholder General Meeting to approve transaction expected to be held in calendar Q2 2021 ▪ Completion expected in
Slide 7: The Retained Group is a strong platform for sustainable value creation and shareholder returns
The Retained Group is a strong platform for sustainable value creation and shareholder returns
Slide 8: A strong platform for further value creation
A strong platform for further value creation A leader in public transportation in the UK, with a well-capitalised balance sheet and a strategy focused on the future 1 Leading positions in bus and rail transportation in the UK 2 Inflection point for growth, underpinned by supportive government and so
Slide 9: Leading positions in bus and rail transportation in the UK
1 Leading positions in bus and rail transportation in the UK First Bus and First Rail are leaders in their respective sectors of UK public transport ▪ One of the largest regional bus operators, serving two thirds of the ▪ UK’s largest rail operator, many years experience running all types of UK’s 15
Slide 10: Inflection point for growth, underpinned by supportive government and social policies
2 Inflection point for growth, underpinned by supportive government and social policies Significant opportunities for public transport as society looks to ‘build back better’ Secular trends Our role English National Bus Strategy, 15 March 2021 ▪ £3bn in bus funding during current Parliament, includi
Slide 11: Digital innovation to attract more customers, enhance business efficiency and flexibility
3 Digital innovation to attract more customers, enhance business efficiency and flexibility Innovating to support convenience for our First Bus customers… Real-time seat capacity available on Bus app ‘Tap and Cap’ ticketing ▪ First bus app to allow customers to check how many ▪ Daily and weekly tick
Slide 12: First Bus: ready to complete trajectory to 10% margin post-pandemic
4 First Bus: ready to complete trajectory to 10% margin post-pandemic Margin progress was interrupted by the pandemic – but transformation underpinning it has continued A Efficiency actions underway pre-pandemic ▪ Operational/engineering efficiency action plans were accelerated during pandemic 10% ▪
Slide 13: First Rail: well-placed for lower risk, long term and cash generative rail operations
5 First Rail: well-placed for lower risk, long term and cash generative rail operations As the largest incumbent with four UK rail operations expected to be in place until at least 2023, we will benefit from the transition to a new contract structure with a far better balance of risk and reward Prev
Slide 14: Opportunities from adjacent markets in UK bus and rail and new geographies
6 Opportunities from adjacent markets in UK bus and rail and new geographies over time Growth potential in our core addressable markets with opportunities to leverage our considerable industry knowledge, skills and experience in adjacent markets ▪ Additional post-pandemic local authority tenders thr
Slide 15: Critical enabler of society's ESG goals
7 Critical enabler of society’s ESG goals, accelerating the transition to a zero-carbon world FirstGroup has a clear social purpose – we provide easy and convenient mobility, improving quality of life by connecting people and communities ▪ Public transport has proven to be critical, long-term green
Slide 16: Investment case underpins financial framework
Investment case underpins financial framework The Retained Group will be a cash generative business with a well-capitalised balance sheet and an operating model that will support an attractive dividend ▪ Bus: Planning for a range of post-pandemic scenarios; central case envisages passenger volumes r
Slide 17: Delivering the strategy, unlocking the Retained Group's potential
Delivering the strategy, unlocking the Retained Group’s potential ▪ Long-term strategic value achieved for high quality First Student and First Transit businesses ▪ Transaction substantially rationalises portfolio and addresses significant longstanding liabilities ▪ 30p per share or c.£365m proposed
Slide 18: Appendix
First Appendix B c © i rag S % is
Slide 19: Greyhound
Greyhound ▪ Greyhound remains non-core and we continue to pursue all exit options to conclude the Group’s portfolio rationalisation strategy − Sale discussions ongoing; process affected by the pandemic’s impact on this passenger volume-based business − Effect on financial performance continues to be
Slide 20: Historical financials for First Student and First Transit
Historical financials for First Student and First Transit 12 months ended 6 months ended 30 Unaudited, £m 31 March 2018 31 March 2019 31 March 2020 September 2020 Revenue 2,840.6 2,918.2 3,109.1 888.9 EBITDA 414.5 423.0 450.1 96.0 EBITDA margin 14.6% 14.5% 14.5% 10.8% Adjusted operating profit1 214.
Slide 21: Retained Group pro forma net debt overview
Retained Group pro forma net debt1 overview Underlying Cash held for legacy liabilities 31 March 2021 £m £m $m Gross debt Greyhound pension and insurance 180 250 Rail termination sums and short term - Bonds (200) 165 capital requirements - Finance leases and other excl. IFRS 16 (45) Total 345 Total
Slide 22: Pro forma statement of net assets
Pro forma statement of net assets 30 Sep 2020 FirstGroup Adjustment for Greyhound Pro forma Greyhound adjusted for Transaction (as reported Student and legacy liability Retained property sales Greyhound fund flows £m, unaudited 30 Sep 2020) Transit1 de-risking Group2,3 property sales Non-current ass
Slide 23: Pro forma historical financials for Retained Group
Pro forma historical financials for Retained Group 12 months ended 6 months ended 30 Unaudited, £m 31 March 2018 31 March 2019 31 March 2020 September 2020 Retained Group revenue 3,554.6 4,205.2 4,642.8 2,212.7 First Bus 879.4 876.1 835.9 311.0 First Rail 1,985.0 2,683.7 3,203.6 1,741.9 Group items
Slide 24: Disclaimer
Disclaimer This document 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, intends,