Irish Continental Group Plc · EURONEXT:IR5B

Irish Continental — H1 2006 Earnings Presentation

50 slides from Irish Continental's earnings presentation, Sep 7, 2006

  1. Slide 1: ICG Profile

    ICG Profile Capital 1. Irish Ferries Employed Leading ferry company operating between UK / Continent and Republic of Ireland. 63% ƒ Modern fleet of large ships ƒ Major barriers to entry ƒ Significant operational gearing ƒ Very strong free cash flow 2. Ship Chartering Division Diversified ship charte

  2. Slide 2: ICG - Group Performance

    ICG - Group Performance Half Year Half Year Full Year 2006 2005 2005 €m €m €m Turnover 141.9 139.6 298.7 EBITDA 18.5 17.1 46.7 Depreciation/Amortisation (13.0) (12.8) (27.7) Operating Profit 5.5 4.3 19.0 Interest 2.8 (2.6) (4.7) PBT 2.7 1.7 14.3 EPS Basic (cent) 10.6c 6.4c (66.9c) EPS Adjusted (cent

  3. Slide 3: Container Division

    Container Division Half Year Half Year Full Year 2006 2005 2005 €m €m €m Turnover 70.2 67.5 136.4 EBITDA 2.7 3.4 7.9 Depreciation/Amortisation (1.5) (1.4) (3.7) Operating Profit 1.2 2.0 4.2 3

  4. Slide 4: Operations & Key Issues

    Operations & Key Issues ƒ Container Routes ¾ Ireland / Continent - Door to Door plus Quay to Quay ¾ UK / Continent - Quay to Quay container movement ƒ Port Ownership ¾ Container Terminal in Dublin ¾ Development in Belfast late 2006 ƒ Key Issues ¾ High fuel costs (up 45% in H1) ¾ Higher charter costs

  5. Slide 5: Container Routes

    Container Routes Grangemouth Belfast South Shields 14 ships Dublin Dublin Liverpool Holyhead 13 ports Waterford Cork Cork Holyhead Immingham 25 routes Pembroke Pembroke Felixstowe Tilbury Southampton Rotterdam Rotterdam Antwerp Le Havre 5

  6. Slide 6: Market Share – LoLo 2005 (est.)

    Market Share – LoLo 2005 (est.) All Ireland (UK & Continent) % Peel Holdings 33 ICG 24 Samskip 16 Norfolk Line (Maersk)* 9 C2C 8 Others 10 Total 100 * Now DFDS

  7. Slide 7: Container Terminal Market

    Container Terminal Market 1.3 Million Teu in 2005 ¾150 year lease of 33 acres from 1971 ¾500 metres of berths (9 - 11 metres depth) 7 Picture courtesy of The Irish Times

  8. Slide 8: Container handling in Ireland Market Share 22% 2005

    Container handling in Ireland Market Share 22% 2005 CAGR Volume % % 14 13% 12 10 8 7% 7% 7% 6% 6% Market 6% 6 ICG 4% 4 2 0 Last Last Last 2005 8 10 Yrs 5 Yrs 3 Yrs

  9. Slide 9: Ferries & Ship Chartering

    Ferries & Ship Chartering Half Year Half Year Full Year 2006 2005 2005 €m €m €m Turnover 72.3 72.5 162.7 EBITDA 14.8 13.7 38.8 Depreciation/Amortisation (11.5) (11.4) (24.0) Operating Profit 4.3 2.3 14.8 9

  10. Slide 10: Ship Chartering / Irish Ferries Operations

    Operations ƒ Ship Chartering ¾2 ferries on charter to P&O ƒ Irish Ferries ¾4000 departures to and from UK ¾250 departures to and from France 10

  11. Slide 11: Ship Chartering Division

    Ship Chartering Division Pride of Bilbao Night Ferry; 2400 Ö beds, 580 cars, built 1986 Challenger Day Ferry; 600 cars or 108 trucks built Õ 1995 Pride of Cherbourg 11

  12. Slide 12: Ship Chartering Division

    Ship Chartering Division ƒ Use of ship market knowledge and balance sheet strength to avail of potential charter opportunities in ferry and container shipping markets. ƒ Pride of Bilbao on charter to P&O since 1992. Next optional renewal date October 2007. Pride of Cherbourg on charter to P&O until

  13. Slide 13: Irish Ferries - Ships

    | lrish Ferries - Ships Wes IRISH CONTINENTAL GROUP A . ye. ununeen ad eae ‘ oP re — | i ea SS hist Ferries ,

  14. Slide 14: Irish Ferries - Ships

    ry Irish Ferries = Ships IRISH Bonin eetean GROUP

  15. Slide 15: Irish Ferries Route Structure

    Irish Ferries Route Structure Larne Stranraer Belfast Cairnryan Dublin Liverpool Rosslare Holyhead Pembroke Rotterdam Roscoff Cherbourg 15

  16. Slide 16: Irish Ferries Route Structure

    Irish Ferries Route Structure ƒ Focus on short routes with high utilisation of ships. ƒ Major barriers to entry in Holyhead & Pembroke for key slots ƒ UK / Rep. Ireland Routes ¾ Over 92% of cars travel on short routes into Dublin and Rosslare ¾ Over 54% of RoRo units travel on short routes into Dubl

  17. Slide 17: UK-Ireland Passenger Car Market

    Passenger Car Market UK ÍÎ Ireland Market REPUBLIC OF IRELAND Volumes (Cars) Market Irish Irish Ferries Ferries Share H1: Jan - June 2006 - 6% - 11% 41% July – Aug* 2006 - 7% - 13% 39% Jan – Aug* 2006 - 6% - 12% 40% ƒ Weak car market due to low fare airlines and reduced ferry capacity. ISE ceased op

  18. Slide 18: Market Share – Cars 2006 v 2005 (H1)

    Market Share – Cars 2006 v 2005 (H1) Republic of Ireland - UK 2006 2005 % % Irish Ferries 41 44 Stena Line 50 48 P&O Irish Sea 2 1 Irish Sea Express / IOMSPC 0 2 Swansea Cork 4 4 Norfolkline 3 1 Total 100 100 18

  19. Slide 19: Irish Ferries - Advertisements

    Irish Ferries - Advertisements 19

  20. Slide 20: Irish Ferries - Distribution

    Irish Ferries - Distribution Car Booking Report 2006 All Markets Share Half Year Half Year 2006 2005 % % Call Centres 19 25 At our Ports 10 8 Internet 48 40 Direct 77 73 Travel Trade 23 27 Total 100 100 20

  21. Slide 21: RoRo Freight Market UK-Ireland 2006

    RoRo Freight Market UK-Ireland 2006 REPUBLIC OF IRELAND Volumes Market Irish Market (Freight Units) Ferries Share Jan - June 2006 6% 3% 27% July – Aug* 2006 6% 3% 28% Jan – Aug* 2006 6% 3% 27% ƒ Strong growth in the market in line with Ireland’s economic growth and further integration with the rest

  22. Slide 22: Market Share – RoRo 2006 V 2005

    Market Share – RoRo 2006 V 2005 Rep. of Ireland - UK 2006 H.1 2005 H.1 % % Irish Ferries 27 27 Stena Line 28 27 Norfolkline 26 26 P&O Irish Sea 18 19 Celtic Link 1 0 Swansea Cork 0 1 Total 100 100 22

  23. Slide 23: RoRo Freight Traffic Key Slots

    RoRo Freight Traffic Key Slots 23

  24. Slide 24: RoRo Market Analysis

    RoRo Market Analysis Greater integration between Ireland & UK/Continent 1992 2005*(e) CAGR % % Value of Imports & Exports €45.1bn €241.5bn 13.8% GDP €40.0bn €161.2bn 11.3% Imports & Exports as % of GDP 113% 150%

  25. Slide 25: Irish Ferries Revenue Mix

    Irish Ferries Revenue Mix 2006 25

  26. Slide 26: Irish Ferries Cost Analysis

    Irish Ferries Cost Analysis 2006 Payroll 26% Port Charges 26% 26

  27. Slide 27: Restructuring Provision

    Restructuring Provision Benefit Charge 2006 €m €m 2004 Outsourcing crew on French route 8.1 2.5 Shore side restructuring 2.6 0.7 Dublin Ferryport Terminal 1.7 0.9 2005 Outsourcing crew on Irish Sea routes 38.5 5.3* Rebate of statutory redundancy (60%) (4.1) Pension curtailment (5.3) - 41.5 9.4 * Ful

  28. Slide 28: Headcount Reduction Direct Employees

    Headcount Reduction ƒ Direct Employees June June June 2006 2005 2004 Irish Ferries Seagoing 37 590 960 Shore (incl. ports) 315 309 348 Total 352 899 1308 Container & Terminal & Group 193 210 202 545 1109 1510 28

  29. Slide 29: Fuel Costs

    Fuel Costs 2006 2005 2004 (f) Consumption (000 tons) Heavy Fuel Oil 98.0 96.6 96.2 Marine Diesel 15.4 20.9 19.4 113.4 117.5 115.6 Price (€ per ton) Heavy Fuel Oil €281 €216 €144 Marine Diesel €491 €384 €298 Cost (2006 V’s 2005) +21% €35m €29m €20m (2006 V’s 2004) +75% 29

  30. Slide 30: Cash Flow

    Cash Flow Half Year Half Year Full year 2006 2005 2005 €m €m €m Operating Profit before restructuring 5.5 4.3 19.0 Depreciation 13.0 12.8 27.7 EBITDA (before restructuring) 18.5 17.1 46.7 Working Capital Movement 6.0 9.1 (1.1) Operating Cash Flow 24.5 26.2 45.6 Interest (net) (2.6) (1.8) (4.9) Tax (

  31. Slide 31: Share Buybacks / Dividends

    Share Buybacks / Dividends Shares % Value AV. Share Price Buybacks 2002 2.16m 8.1% €14.5m 6.7 2003 1.23m 4.9% €9.8m 8.0 2004 0.69m 2.9% €7.9m 11.4 TOTAL 4.08m 15.9% €32.2m 7.9 Authority to purchase up to an additional 2.3m shares (10%) valid up to 2007 AGM. Dividend Growth Since IPO Dividend (1988 -

  32. Slide 32: Summary Balance Sheet

    Summary Balance Sheet June Dec 2006 2005 €m €m Ships 240 248 Other 48 48 288 296 Retirement benefit asset 14 7 Working Capital (27) (22) 275 281 Shareholders Equity 140 139 Net Debt 132 106 Provisions 3 36 275 281

  33. Slide 33: Conclusion

    Conclusion ƒ Leading position - Republic of Ireland / UK & Continent ƒ Significant capacity for growth in freight although tourism will remain challenging ƒ Restructuring of crew costs – virtually complete ƒ No significant capex required, while offering best product/service to customers ƒ Strong fre

  34. Slide 34: Appendices

    IRISH CONTINENTAL GROUP Appendices

  35. Slide 35: Operational Gearing

    OPERATIONAL GEARING 35

  36. Slide 36: Ulysses - RoRo Freight

    Ulysses - RoRo Freight 81% night time utilisation 5 years growth at 5% p.a.100% night time utilisation in 2006 would yield additional €6.6m operating profit or 28.5 cent per share 36

  37. Slide 37: Ulysses - Cars

    Ulysses - Cars 12% day time utilisation (higher in holiday peaks) 37

  38. Slide 38: Isle of Inishmore 1997

    Isle of Inishmore 1997 Price: €85m Year Built: 1997 Cars: 855 Trucks: 122 Passengers: 2,200 38

  39. Slide 39: Jonathan Swift 1999

    Jonathan Swift 1999 Price: €38m Year Built: 1999 Cars: 200 Coaches: 10 39 Passengers: 800

  40. Slide 40: Ulysses 2001

    Ulysses 2001 Price: €107m Year Built: 2001 Cars: 1,342 Passengers: 1,900 40 Trucks: 240

  41. Slide 41: Normandy 1982

    Normandy 1982 Price: €20.8m Year Built: 1982 Cars: 420 Passengers: 1,577 Trucks: 43 41

  42. Slide 42: Irish – Continent/UK Market Share 24% 2005

    Irish – Continent/UK Market Share 24% 2005 CAGR – Volume % % 14% 14 12 10 8 6% 7% 6% 6% 6 4% 4 1% Market 2 -6% ICG 0 -2 -4 -6 Last Last Last 2005 10 Yrs 5 Yrs 3 Yrs 42

  43. Slide 43: Ulysses

    Ulysses Boeing 747 43

  44. Slide 44: Car Performance Irish Ferries Market Share

    Car Performance Irish Ferries Market Share Rep. of Ireland % 50 43% 43% 44% 43% 44% 46% 43% 45 40 35 30 25 20 15 10 5 0 2001 2002 2003 2004 2005 2005 2006 H. 1 H. 1 44

  45. Slide 45: RoRo Freight Performance Irish Ferries Market Share

    RoRo Freight Performance Irish Ferries Market Share Rep. of Ireland % 30 27% 27% 28% 27% 26% 27% 27% 25 20 15 10 5 0 2001 2002 2003 2004 2005 2005 2006 H.1 H.1 45

  46. Slide 46: RoRo Freight Traffic (1.6m)

    RoRo Freight Traffic (1.6m) 000s Units Compound Average 1600 Growth Rates 1400 1995 - 2005 1200 50% 3% p.a. 1000 800 Via Northern Ireland Ports 600 10% p.a. 72% 400 50% 200 28% Via Republic of Ireland Ports 6% p.a. 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 46

  47. Slide 47: 5/6 Year Performance Cash Flow Per Share

    5/6 Year Performance Cash Flow Per Share 220.9 217.7 196.2 191.5 137.4 82.0 79.3 27% H.1 2000 2001 2002 2003 2004 2005 H1 47

  48. Slide 48: Composition Of Net Debt

    Composition Of Net Debt Currency €m Fixed* Rate $ 15 26% 3.8% £ 24 36% 5.4% € 105 62% 4.0% 144 54% 4.1% Cash (12.0) Net Debt 132 * Up to 3.5 years from 30 June 2006 48

  49. Slide 49: Tax

    TAX ƒ LOW TAX ¾ “Tonnage tax” for Irish shipping activities (very low). Approved / encouraged by EU ¾ Std Corporation Tax for other activities (12.5%) ¾ Low blended corporate rate going forward 49

  50. Slide 50: Interim Update 7th September 2006

    Interim Update 7th September 2006 50

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