Tpg Inc. · NASDAQ:TPG
Tpg — FY2001 Earnings Presentation
64 slides from Tpg's earnings presentation, Feb 21, 2002
Slide 1: TPG
Slide 2: Analyst Presentation 21 February 2002
Analyst Presentation 21 February 2002
Slide 3: Financial Review / Business Review
Finacial Review f © Businéss Review ~ amp Ate
Slide 4: Business Review
Business Review
Slide 5: Highlights 2001
Highlights 2001 a © Profits achieved in line with expectations © Mail organic growth and margin improved despite decline in Dutch addressed mail volumes © Significant expansion in European Mail Networks and Data & Document Management : © Strong business models for Express and Logistics helped cushio
Slide 6: Key financials 2001 vs 2000
001 2000 oe € min € min Revenues 11218 9,936 12.9% © Revenue growth of 12.9% Eamings 1,128 979 15.2% ' ; ERITA 1,156 gy osne © Growth in Eamings from EBIT 1,017 821 23.9% Operations of 15.2% Net income from continuing © Undenying Net Income operations 555 458 21.2% growth of 21.2% Net Income 585 473
Slide 7: Revenue growth by region
Europe 83% © Significant growth in Americas due to CTI acquisition Asia = Pacific Americas oid © Negative growth in Australia © Total Group organic growth of 5.0% Europe 83% Growth = 2001 Total “129% Asia. | heen Pacific” Americas World Organic 5.0% ” i Acquisition 88% FX -0.9%
Slide 8: Split by Business
ell Split by Business Revenues 11,218 128% €min Logistics 28.0% Voge. Express sect 371% 41.3% 2001 2001 uding Inter-compa ny of € 58 min in 2001; € (94) min in 2000)
Slide 9: Mail
Slide 10: Mail Highlights 2001
—— Highlights 2001 Le © Accelerated growth achieved despite continued decline in Dutch addressed mail volumes © Margin improvements achieved through cost efficiencies — . © Quality of next day delivery in the Netherlands improved © Cost flexibility program commenced © Privver electronic letterbox su
Slide 11: Mail results
MAIL > 2.76 3 3 Border © Revenue growth of 5.1% — © Operating margin improved to gy > 20.0% i Pappa © Significant expansion in 174 European Mail Networks and ee Data and Document € min 2001 Management Revenues Impressive Mail performance 2001 + 2000) gy € min € min aa) Revenues 3,896 3,706 5.1% ae o
Slide 12: Mail revenue growth
MAIL Organic revenue growth of 2.0% Acquisitions in European Mail — Networks and Data & Document iw Management added 3.1% growth 32% e Organic growth higher than last year © Strong growth in Mail Netherlands and Data & Document Management : = : : 5: 2000 Growth Acq. FX 2001 Revenue growth is acceler
Slide 13: Addressed mail volume growth (NL)
a Addressed mail volume growth (NL) 2% 5 ) essed mail volumes down0.8% in 1% year 0% J eo e@ Zero growthin Domestic mail and cae 2@1 3901 F decline of 2.1% in addressed Direct eg r mail Sse eo Q4addressed mail volumes down 0.5% due to fall in Direct mail printed matters = Domestic # Direct = Total T
Slide 14: Mail margin Q4 and full year
MAIL Margin Q4 & Full Year 24% 21.4% 21.5% ake © Improvement in margins in almost em 18% all quarters oa © Price increases and cost reductions eh in Mail Netherlands © Margins in other lines of business positively impacted by acquisitions 2001 = 2000 Positive margin development 0% + Margin First 3 Q
Slide 15: Electronic mail implementation
© Extensivepliotson » 65 phased i oe , implementation in 34 years
Slide 16: Privver digital mailbox
Privver eiiccecetull . a The digital mailbox e — privver S. LE, ea. | 7/7/// © Consumer expectations met © Further developments in functionality will follow 16
Slide 17: European mail networks are expanding
European mail networks are expanding ail networks in ! Belgium Italy UK Germany Austria Czech Republic Slovakia Netherlands ©2e0e80e08e000 Joint ventures in © Germany © Austria W
Slide 18: Strong foothold in UK mail distribution and data management
rong foothold in the UK mail distrib and data management market 2 A leading mail distributor in the UK - the market leader ii unaddressed mailand sampling One of UK’s leading providers of integrat Litsourcing services for Data & Document Management e Outsourcing of data andimage capture, database ma
Slide 19: Spring launched as brand for joint venture
Spring launched as brand for —s Joint Venturer Networks Delivery of cross border business mail around the world including value added services with annual revenues of € 450 million
Slide 20: Mail
MAIL
Slide 21: Netherlands regulatory environment
Netherlands regulatory environment © OPTA court case on cost allocation system © Started on 23 January © TPGclaims OPTA have imposed invalid extra conditions to their approval i) Outcome expected in early March © Possibility of appeal to higher court © Review of price control system © Routine review
Slide 22: Mail objectives, assumptions and outlook
jectives = - Assumptions - e Make substantial progress with cost flexibility pilots and consultations with = > Continued gradual decline in Netherlands employees addressed mail e Significantly increase organic growthin §. Higher organic growth in EMN and D&DM European mail networks © Slightly lower
Slide 23: Express
Slide 24: Express Highlights 2001
© Margin and yield improvements achieved in every quarter © Implementation of new commercial policy on a worldwide basis © Continued expansion of integrated European air and road network © Network capacity and cost flexed to lower demand © Australia turnaround in line with recovery plan © Worldwide
Slide 25: Express results
© Flat headline revenues but positive organic growth © Margin improvement despite > py economic slowdown —\_ROW Europe 81% Australia 10% 996 © Australia has had significant negative impact 2001 Focus on quality pays off Australia 2001 2000 12% 2 € min € min Revenues 4,139 4145 0.1% oe now EBITA 167
Slide 26: Express revenue growth
E XPRES: 1.8% AX © Organic revenue growth of > <i> 1.8% (3.4% outside Australia) as 64 = © Underlying growth in Europe - of 5.1% © High growth in International business excluding Australia : : : 2000 Growth Acq. FX 2001 Solid underlying revenue growth 4 84% -11.0% 2.9% —5 =2 f%. 1 Ex Australia lia T
Slide 27: Express Q4 and full year margin
EXPRESS Q4 & Full Year © Improved margins throughout oe the year © Focus on operational service 5.2% excellence and revenue yield 6.5% management 40% 2 Strong network capacity management and cost control as Qt Full Year Continued margin improvements First 3 Quarters 5% Legend 4% Pf | oe 4B oe : [ in
Slide 28: Australia turnaround commenced
—,. turnaround comme © Problems caused by integration of businesses © Solutions now being impl imall problem areas f © Week sses have ly 2001 © Loss of € 28 million i estimates a © Write-downs of € 30 million in 2001 ——
Slide 29: Volume growth and revenue yield
Volume growth 20% Europe - Core Express Products 16% © Trend towards heavier road-based consignments 12% © Lowest growth level reached in Q4 aid aod 200 GeO tat a2a1 aaai arai F¥aI = Consignment t Kilos Volume and Revenue quality yield growth Europe - Core Express Products 6% © Core product revenue
Slide 30: Available capacity
a Available Capacity © Airnetwork capacity cut back in Q3 in response to slowing demand © Costs reduced year on year through removal of aircraft and increased network reliability Strong air network capacity management and cost control ~ Cost Qi Q2 Q5 Q4
Slide 31: New commercial policy and right first time processes
New commercial policy and 7 “right a: ul time” processes are the key to success © Deployment of simplified no-discount tariffs © Focus on small to mid-sized ad-hoc customers © Continuous review of large customer profitability © Strengthened commercial policy © The 7 “right first time” processes:
Slide 32: Key masters video
<ey masters video
Slide 33: Extensions to European air network
tensions to European air networt ao continue “aD Es) Airports opened in 2001 oan cap
Slide 34: European road network expanding eastwards
European road network ee expanding eastwards = Road networks opened in 2001 }
Slide 35: Record on time service delivery levels
Record on time service delivery levels International © Continuous management % focus on becoming the fastest and most reliable express delivery company © Introduction of new technology including Incab © Increased network reliability 1999 2000 2001 35
Slide 36: Express objectives, assumptions and outlook
a ive sATIArmc Ls aS = & . onal ] elia_ PwWICCLIVES AsSSUulivpioiis © Providethe fastest and most reliable 2 Continued global economic express delivery service through network uncertainty enhancement and technology development © Possible improvement in global Full dep! it of TNT jal poli ra oe 7 © F
Slide 37: Logistics
Slide 38: Logistics Highlights 2001
© Margin improvements achieved © Scale in key countries strengthened Focussed development of individual industry sectors Improvement in business development pipeline Operational excellence initiatives launched globally Creation of auto and high-tech spare parts service networks
Slide 39: Logistics results
-Locistics— Rest of Yforld i 4% ; N-Americoa bs 24% fL.. | Asia Pacific © Margin improvement to 5.8% © Significant increase in North America revenues due to CTl 7 ie acquisition 2001 Sound business model in difficult times Europe 725 Rest of World - oo ae 2001 <j € min e min — N-america Revenues 3,1
Slide 40: Logistics revenue growth
35.4% “12% 3128 -26 © Overall 9.2% organic revenue growth, despite slowdown during second half of year 9.2% © Big impact from acquisitions ig imp q sy a 2000 Growth , Acq_ ’ FX ’ 2001 growth due to economic downturm — _ Organic Revenue Growth — © Organic revenue growth has 17.5% been affected by eco
Slide 41: Revenue by industry sector
wom © Share of non-automotive sectors has increased to 58% © Strategic focus areas FMCG and Hi-tech Electronics up to almost 30% of total Logistics revenue H Automotive @ publishing/ Media @ itech Electronics Tyres a Other
Slide 42: Logistics Q4 and full year margin
“MOGISTICS— Q4 & Full Year © Margins under pressure but offset 6.4% ae by excellent execution om See 5.0% performance and cost controls as © CTl acquisition and improvements an in other recent acquisitions have om 4 EY helped raise overall margin 2001 =2000 Positive margin development First 3 Quarte
Slide 43: Key expansion areas in 2001
Key expansion areas in 2001 France ttaly 20% stake Acquisition of acquired in CAT ALS/SITTAM E ee RAS China 3 od i Joint venture Z +| with Shanghai ) Automotive - ae : Tl, Turkey North America Acquisition of Successful I Cargotech : i pe integration of ii $ Nal fe : CTI Logistx 3 “Ses - Brazil Signi
Slide 44: Important contract wins in 2001
Rr crcscive Contract Wine Important wins in 2001 Contract ‘Main Geographic area Operational starting date © B&Q UK Feb 2001 © Rugby Cemen UK Jan 2001 © Andersen Windows USA Jan 2002 © Fiat Europe May/Sep 2001 © Migros Turkey Feb 2002 © Ford USA/Brazil May 2001 © Michelin Germany April 2001 ‘© Home D
Slide 45: Pipeline value
© Increase in total pipeline value compared to September 2001 © 65% is in non-automotive sectors © High certainty element (>70% probability) is <0.4billion FMCG H Automotive @ publishing/ Media @ ii-tech Electronics 7 maul 32% Tyres a Other
Slide 46: Revenue bridge to 2002 target
€ billion pocc------ Actual 2001 Acquisition ic Balance of Pipeline Target organic revenues impact revenue 2001 contract wins revenue 200 contracts lost
Slide 47: Logistics objectives, assumptions and outlook
ives - Assumptions - © Continued focus on potential acquisitions in targeted countries and industry sectors © Spread of best practice to boost organic growth © Establishment of technology up pace in second half © Low organic revenue growth in first six months ® Outsourcing decisions pick competency
Slide 48: Management focus 2002
— i Management focus 2002 Be ready to start implementation of Mail cost flexibility plans in 2003 Pick up the pace significantly european mail networks Continue to improve the Express operating margin Get back on track to 15% organic growth in Logistics Manage for value
Slide 49: Financial Review
—— Financial Review
Slide 50: Financial Highlights
ie © Net income increased by 23.7% to €585 million Financial Highlights © Effective tax rate improved to 36. 3% © Net debt increased by 30% to e1 .7 billion © Cash from operating activities increased by 35% to €773 million © €1 billion Eurobond issued © Confirmation of A and Aa3 ratings
Slide 51: Key financials and indicators
| 2001 2000 oe € min € min Revenues 11218 9,936 12.9% © Revenue growth of 12.9% Eamings 1,128 979 15.2% ' ; ERITA 1,156 gy osne © Growth in Eamings from EBIT 1,017 821 23.9% Operamees OF 152% Net income from © Underlying Net Income continuing operations 555 458 21.2% growth of 21.2% Net Income 585 4
Slide 52: Statement of Income
Statement of Income Revenues Salaries and ‘social security : (3,230) Depreciation (298) (245) Other operating expenses (5,956) (5,482) Earnings from operations 1,128 979 15.2% Exceptional items 28 (60) EBITA 1,156 919 25.8% Goodwill amortisation (139) (98) EBIT 1,017 821 23.9%
Slide 53: Exceptional Items
ee Exceptional Items * After-tax 30
Slide 54: Statement of Income
Statement of Income EBIT Fin. income & expenses Income taxes pesuts rom affiliates Minorities Net income 585 473 23.7% Effective tax rate 36.3% 37.1%
Slide 55: Cash Flow Overview
Cash Flow Overview Net Cash » provided by ¥ activities Net Cash used in (698) (1,242) investing activities Net Cash used 125 592 in financing activities —, Net Cash Flow 200 (78)
Slide 56: Capital Expenditure
Capital Expenditure property, pian € 481 min Logistics
Slide 57: Balance Sheet
Balance Sheet Fixed assets Current assets Cash and cash equivalents Total assets 8,454 7,596 Fi 2,499 2,090 Provisions 1,173 1,311 Interest bearing liabilities 2,180 1,579 Non Interest bearing liabilities 2,602 2,616 Total liabilities and equity 8,454 7,596
Slide 58: Timeline for managing for value
ee Timeline for managing for value Internal " [= EP performance | performance = Value based measure in all compensation reporting units = 2002 value based budget - EP structure = Integrated div sions for business decision criteria - capex & * EV completed acquisitions measurement External | = managi
Slide 59: Outlook 2002
Outlook 2002 : © Net income growth from continued operations of 5- 10%, assuming stable exchange rates
Slide 60: Appendix
Slide 61: Accounting policy changes
* Accounting policy changes P & L impact 2000 émin 2000 Eamingsfrom Operations 1,111 Amortisation goodwil (98) Non-recurring (93) Operating Inc -ome 920 Financial income (3) Income taxes (310) Affiliates/minority (6) Net income 526 Restr. 2000 items restated (253) 979 (98) 76 (60) (177) 78 821 62 (1
Slide 62: FY 2000 Restatement Earnings from Operations
FY 2000 Restatement Earnings fro . m Operations €min Express Logistics ea 7 ’ Earnings from Operations =-‘1111 (253) 121 979
Slide 63: Balance Sheet Restatement
Balance Sheet Restatement — 2000 Restr. Pension 2000 reported items items restated nn (31 Dec 00) (1 Jan. 01) Fixed assets 5,051 5 160 5,216 Current assets 2,410 (30) 2,380 Total assets 7,461 (25) 160 7,596 Group equity 2,459 52 1D 2,090 - pensions 414 648 1,062 - festruchaep/Oiner 459 (321) 138 - d
Slide 64: TPG