Firstgroup Plc · LSE:FGP
Firstgroup — Shareholder Meeting (July 2008)
66 slides from Firstgroup's shareholder meeting presentation, Jul 10, 2008
Slide 1: FirstGroup plc Annual General Meeting Thursday 10 July 2008
FirstGroup plc Annual General Meeting Thursday 10 July 2008 1
Slide 2: Martin Gilbert, Chairman
First (> transforming travel Martin Gilbert Chairman
Slide 3: Business Review
Business Review Sir Moir Lockhead OBE Chief Executive 3
Slide 4: Overview
Overview • Record results from strong trading across the Group including the significant contribution from Laidlaw acquisition on 1 October 2007 • North America: – Integration progressing very well – Better than expected synergies $150m per annum from April 2009 – Well positioned for further growth
Slide 5: Highlights
Highlights Year to 31 March 2008 • Strong Group results -Revenue £4.7bn up 27% -Operating profit1 £360m up 39% -Operating margin1 7.6% up 0.6% -EBITDA2 of £561m up 41% -Adjusted EPS1 40.9p up 21% • Record earnings for all divisions • North America synergies run rate $100m p.a. • UK Rail strong passe
Slide 6: Financial Highlights
Financial Highlights Year to 31 March 2008 Revenue £4,707.6m Up 27% EBITDA2 £560.8m Up 41% Operating profit1 £360.1m Up 39% Profit before tax1 £249.0m Up 27% Net debt £2,161m Up 319% Adjusted basic EPS1 40.9p Up 21% Dividend per share 17.05p Up 10% EBITDA2: interest cover 5.0x Down 21% 1. Before amo
Slide 7: UK Bus
UK Bus • Margin up 1.4% to 11.0% • Strong trading performance – operating profit up 18.4% • Passenger revenue up 5% • Focus on service quality, operational performance, efficient working practices and turnaround strategy 7
Slide 8: UK Rail
UK Rail • Operating profit up 10.3% • Double digit growth in passenger revenue • Successful launch of Scotland – Manchester Airport services at TPE • FGW remedial plan • FSR 3 year extension 8
Slide 9: Rail Passenger Income Growth
Rail Passenger Income Growth Year to 31 March 2008 Continued strong growth across all our TOCs1 % FGW 9.6 FCC 13.5 FTPE 13.2 FSR 8.3 Hull 11.9 Total 10.8 1Adjusted for FGW flooding (2006/07), Blackpool services (2006/07) & Scottish services (2007/08) at TPE 9
Slide 10: North America
North America • Integration of Laidlaw businesses • Significant synergies achieved • Student margin improved by 0.4% to 11.3% • Student bidding season started well • Transit margin increased to 5.9% and new business wins • Greyhound significant value opportunities • Positive outlook 10
Slide 11: Capital structure and equity placing
Capital structure and equity placing • Acquired Laidlaw International, Inc. in October 2007 for $3.5 billion • Debt portion of $3 billion was financed from committed bank facilities of $3.75 billion - of which $2.25 billion was on a 3 year term facility due February 2010 • Group now refinancing this
Slide 12: Dean Finch, Chief Operating Officer – North America
Dean Finch Chief Operating Officer – North America Integration & growth prospects 12
Slide 13: Highlights
Highlights • Excellent progress on integration • Significant synergies : – $100m current run rate – $150m per annum from April 2009 • Further margin improvement despite fuel cost pressure • Created a national sales platform to build on growth prospects • Significant opportunities emerging at Greyhou
Slide 14: Integration progress
Integration progress • Key priority of customer retention achieved • Integrated businesses to single management team and HQ operation and harmonised systems • Excess fleet – well advanced with plan to reduce by 2,000 buses no impact to service • Procurement review progressing well – first phase of c
Slide 15: Synergies achieved
Synergies achieved • Synergies delivering ahead of plan – 4% of combined costs • Closure of Laidlaw corporate office ($30m) • Procurement savings: – $20m opex – $20m capex – $10m insurance • Branch Operations ($10m) • Transit Overheads ($15m) • Student Overheads ($20m) • Tax efficient investment str
Slide 16: Synergy prospects
Synergy prospects • Further opportunity in Phase 2 from : – Further procurement synergies – Branch operations – Revenue synergies More to come: EBIT synergies $150m per annum from April 2009 16
Slide 17: First Student
First Student • Focus on customer relationships – more than 1,500 customers surveyed • Strong contract retention >90% • Divestment process complete – less than 3% of combined business • New bus growth despite attrition/divestment • Increased operating margin by 40bps – targeting further improvement
Slide 18: Greyhound
Greyhound • Good quality asset with clear opportunities to increase value for shareholders • Significant cost reduction and revenue growth opportunities • Real progress already made to On Time Performance • Early initiatives are yielding results • Achieving yoy revenue growth 18
Slide 19: Greyhound progress update: revenue initiatives
Greyhound progress update: revenue initiatives • Revenue initiatives: will deliver >$30m per annum • A number of initiatives already implemented including: – New BoltBus services – Priority seating charge – Excess baggage charges – Yield management and ticketing initiatives – New charging structure
Slide 20: Greyhound progress update: cost initiatives
Greyhound progress update: cost initiatives • Identified and implemented a number of cost initiatives: will deliver $30-40m per annum in savings including: – Reduced cost of sale – Reduction in agents commission rates and arrangements – Integration of US subsidiaries – Consolidation to one HQ operat
Slide 21: Summary
Summary • Integration progressing well • Synergies better than expected • National sales platform established good prospects for growth • Greyhound clear revenue and cost opportunities – encouraged by results of early initiatives • Significant opportunity to increase value across North American oper
Slide 22: Sir Moir Lockhead OBE, Chief Executive
Sir Moir Lockhead OBE Chief Executive 22
Slide 23: Corporate Social Responsibility (CSR)
Corporate Social Responsibility (CSR) • Actively managing the opportunities and challenges of growth • Key objective to continue to integrate our enlarged North American business • Core values are safety and customer service • Employees are our greatest asset • Important role to play in lessening ne
Slide 24: Safety
Safety ‘Injury prevention is a way of life’ • Goal is to prevent injuries to our staff and customers and prevent vehicle collisions • Every First employee has responsibility for safety • Aim to make safe behaviour a way of life • Promote Injury Prevention to drive cultural change across the Group •
Slide 25: Customer service – delivering the promise
Customer service – delivering the promise • We are committed to delivering the promise to our customers • Improving service delivery monitoring • Committed to reducing cancellations • Partnership working with local authorities, Network Rail and our customers essential • Investment a key factor in im
Slide 26: Employees
Employees • Employees key to Group’s success • Goal to be ‘employer of choice’ • Committed to valuing our employees and delivering a positive work environment • Helping employees achieve full potential • Development and talent management programmes • Employee engagement programme 26
Slide 27: Environment
Environment • Climate change is a pressing issue • Bus and rail travel produces fewer emissions than cars and helps reduce congestion • Managing our environmental impacts – CO2 emissions, energy, water and waste • Published Climate Change Strategy last year • Commissioned poll of attitudes to public
Slide 28: Community
Community • Our services support a strong economy and bring communities together • We engage with communities to develop services to meet local needs • We support the community through charitable donations and sponsorships and this year we: – Established partnership with Save the Children – Corporat
Slide 29: Summary
Summary • Delivering strategy to increase shareholder value by profitable growth in core markets • Balanced portfolio of business c.50% of Group revenues contracted • Good growth prospects in all our businesses • Established national platform in both UK and North America • New trading year started w
Slide 30: Martin Gilbert, Chairman
First (> transforming travel Martin Gilbert Chairman 30
Slide 31: Annual General Meeting Formal Business
Annual General Meeting Formal Business 31
Slide 32: Resolution 1: Annual Report & Financial Statements
Resolution 1 Annual Report & Financial Statements 32
Slide 33: Resolution 1 Annual Report & Financial Statements
Resolution 1 Annual Report & Financial Statements Proxy votes cast in favour – 315,929,104 (99.70%) Proxy votes cast as discretionary – 550,162 (0.17%) Proxy votes cast against – 314,603 (0.10%) Abstentions – 100,448 (0.03%) 33
Slide 34: Resolution 2: Directors' Remuneration Report
Resolution 2 Directors’ Remuneration Report 34
Slide 35: Resolution 2 Directors' Remuneration Report
Resolution 2 Directors’ Remuneration Report Proxy votes cast in favour – 309,274,131 (97.60%) Proxy votes cast as discretionary – 587,525 (0.19%) Proxy votes cast against – 312,741 (0.10%) Abstentions – 6,719,920 (2.11%) 35
Slide 36: Resolution 3: Dividend
First (> transforming travel Resolution 3 Dividend 36
Slide 37: Resolution 3 Dividend
Resolution 3 Dividend Proxy votes cast in favour – 315,985,370 (99.71%) Proxy votes cast as discretionary – 543,422 (0.17%) Proxy votes cast against – 26,702 (0.01%) Abstentions – 338,823 (0.11%) 37
Slide 38: Resolution 4: Re-election of Martin Gilbert
Resolution 4 Re-election of Martin Gilbert 38
Slide 39: Resolution 4 Re-election of Martin Gilbert
Resolution 4 Re-election of Martin Gilbert Proxy votes cast in favour – 315,348,825 (99.51%) Proxy votes cast as discretionary – 575,194 (0.18%) Proxy votes cast against – 894,423 (0.28%) Abstentions – 75,875 (0.03%) 39
Slide 40: Resolution 5: Re-election of David Dunn
Resolution 5 Re-election of David Dunn 40
Slide 41: Resolution 5 Re-election of David Dunn
Resolution 5 Re-election of David Dunn Proxy votes cast in favour – 315,648,466 (99.61%) Proxy votes cast as discretionary – 571,995 (0.18%) Proxy votes cast against – 599,859 (0.19%) Abstentions – 73,997 (0.02%) 41
Slide 42: Resolution 6: Re-election of Professor David Begg
Resolution 6 Re-election of Professor David Begg 42
Slide 43: Resolution 6 Re-election of Professor David Begg
Resolution 6 Re-election of Professor David Begg Proxy votes cast in favour – 315,604,372 (99.59%) Proxy votes cast as discretionary – 576,711 (0.18%) Proxy votes cast against – 633,594 (0.20%) Abstentions –79,640 (0.03%) 43
Slide 44: Resolution 7: Re-appointment of Auditors
Resolution 7 Re-appointment of Auditors 44
Slide 45: Resolution 7 Re-appointment of Auditors
Resolution 7 Re-appointment of Auditors Proxy votes cast in favour – 312,204,875 (98.52%) Proxy votes cast as discretionary – 553,777 (0.17%) Proxy votes cast against – 1,299,137 (0.41%) Abstentions – 2,836,527 (0.90%) 45
Slide 46: Resolution 8: Remuneration of Auditors
Resolution 8 Remuneration of Auditors 46
Slide 47: Resolution 8 Remuneration of Auditors
Resolution 8 Remuneration of Auditors Proxy votes cast in favour – 315,199,611 (99.47%) Proxy votes cast as discretionary – 569,172 (0.18%) Proxy votes cast against – 1,070,392 (0.34%) Abstentions – 55,142 (0.01%) 47
Slide 48: Resolution 9: Authority to reduce authorised share capital
Resolution 9 Authority to reduce authorised share capital 48
Slide 49: Resolution 9 Authority to reduce authorised share capital
Resolution 9 Authority to reduce authorised share capital Proxy votes cast in favour – 315,853,502 (99.67%) Proxy votes cast as discretionary – 603,153 (0.19%) Proxy votes cast against – 243,187 (0.08%) Abstentions – 194,475 (0.06%) 49
Slide 50: Resolution 10: Authority to allot shares
Resolution 10 Authority to allot shares 50
Slide 51: Resolution 10 Authority to allot shares
Resolution 10 Authority to allot shares Proxy votes cast in favour – 310,459,351 (97.97%) Proxy votes cast as discretionary – 607,018 (0.19%) Proxy votes cast against – 5,684,322 (1.79%) Abstentions – 143,626 (0.05%) 51
Slide 52: Annual General Meeting Special Resolutions
FirstGroup plc Annual General Meeting Special Resolutions 52
Slide 53: Resolution 11: Disapplication of pre-emption rights
Resolution 11 Disapplication of pre-emption rights 53
Slide 54: Resolution 11 Disapplication of pre-emption rights
Resolution 11 Disapplication of pre-emption rights Proxy votes cast in favour – 315,515,508 (99.56%) Proxy votes cast as discretionary – 609,976 (0.19%) Proxy votes cast against – 564,738 (0.18%) Abstentions – 204,095 (0.07%) 54
Slide 55: Resolution 12: Authority to make market purchases of own shares
Resolution 12 Authority to make market purchases of own shares 55
Slide 56: Resolution 12 Authority to make market purchases of own shares
Resolution 12 Authority to make market purchases of own shares Proxy votes cast in favour – 315,978,888 (99.71%) Proxy votes cast as discretionary – 613,955 (0.19%) Proxy votes cast against – 234,116 (0.07%) Abstentions – 67,358 (0.03%) 56
Slide 57: Annual General Meeting Ordinary Resolution
FirstGroup plc Annual General Meeting Ordinary Resolution 57
Slide 58: Resolution 13: Authority to make Political Donations
Resolution 13 Authority to make Political Donations and incur Political Expenditure 58
Slide 59: Resolution 13 Authority to make Political Donations
Resolution 13 Authority to make Political Donations and incur Political Expenditure Proxy votes cast in favour – 312,541,703 (98.63%) Proxy votes cast as discretionary – 582,006 (0.18%) Proxy votes cast against – 3,181,292 (1.00%) Abstentions – 589,316 (0.19%) 59
Slide 60: Annual General Meeting Special Resolution
FirstGroup plc Annual General Meeting Special Resolution 60
Slide 61: Resolution 14: Adoption of Articles of Association
Resolution 14 Adoption of Articles of Association 61
Slide 62: Resolution 14 Adoption of Articles of Association
Resolution 14 Adoption of Articles of Association Proxy votes cast in favour – 315,283,960 (99.49%) Proxy votes cast as discretionary – 584,103 (0.18%) Proxy votes cast against – 835,566 (0.26%) Abstentions – 190,688 (0.07%) 62
Slide 63: Annual General Meeting Ordinary Resolution
FirstGroup plc Annual General Meeting Ordinary Resolution 63
Slide 64: Resolution 15: Approval of Long Term Incentive Plan
Resolution 15 Approval of Long Term Incentive Plan 64
Slide 65: Resolution 15 Approval of Long Term Incentive Plan
Resolution 15 Approval of Long Term Incentive Plan Proxy votes cast in favour – 311,589,937 (98.33%) Proxy votes cast as discretionary – 580,060 (0.18%) Proxy votes cast against – 1,571,857 (0.50%) Abstentions – 3,152,462 (0.99%) 65
Slide 66: FirstGroup plc Annual General Meeting Thursday 10 July 2008
FirstGroup plc Annual General Meeting Thursday 10 July 2008 66