Mobico Group Plc (MCG) Q4 2023 Earnings Call

Investor webinar replay

Replay transcript excerpt

Good morning and welcome to our 2023 full year results and Q1 update. Thank you again for your understanding in waiting for this. We are pleased to have completed the supplementary inquiries around German rail that were deemed necessary and James will walk you through the conclusions of that and the weather group performance in a few moments. Before that, I would like to share the key messages that we have taken from what has been a more challenging 23 than we have hoped or expected. In short, our story is one of continuing positive demand drivers, but with profit recovery and therefore reduction in net debt somewhat slower than we had hoped. Yet, 2023 has been a year in which important underlying progress has been made in the context of an evolving and challenging market where Movico has adapted and acted decisively. The fact that demand and revenue growth remains healthy is certainly encouraging, and we see that continuing. As well as delivering a strong new business conversion and healthy margins on Rocky, we're also retaining and successfully mobilizing important contracts that both drive revenues and validate our customer offering. Nonetheless, financial results have been disappointing. The lag between the time when wage rates are agreed and implemented and their subsequent recovery through higher prices does have an impact on our results today, albeit those higher costs will be covered. The profile of inflationary pressure followed by pricing recovery is likely to be similar but somewhat tempered going into 2024. We will now also absorb higher costs in relation to our German rail business than we had previously budgeted. In that mixed environment, the actions that we have taken are crucial to progress and to successfully leveraging our strengths. New leadership...