Mobico Group Plc · LSE:MCG
Mobico — National Express Group — FY2018 Earnings Presentation
32 slides from Mobico's earnings presentation, Feb 28, 2019
Slide 1: Full Year Results
Full Year Results For the year ended 31 December 2018 28 February 2019
Slide 2: Financial highlights
Financial highlights Chris Davies Group Finance Director 2
Slide 3: 2018 Key highlights
2018 Key highlights Improved margin and record profits Strong Record profits Converted to Reinvested revenue cash and returned growth o Revenue up 6.9% at o Normalised PBT up o Generated £199m of o Invested in 11 constant FX 11.3% at constant FX free cash flow acquisitions o Robust organic o Record
Slide 4: 2018 Financial highlights
2018 Financial highlights Strong performance for the year Change in Continuing operations £m 2018 2017 Change Constant FX Revenue 2,450.7 2,321.2 +5.6% 6.9% Group normalised operating profit 257.7 241.5 +6.7% +7.7% Group normalised PBT 220.0 200.0 +10.0% +11.3% Normalised EPS 32.9p 29.1p +13.1% Stat
Slide 5: Revenue
Revenue Growth driven from both organic & recent acquisitions £m 74 (28) 84 2,451 2,321 2,293 2017 Revenue FX Underlying Growth in continuing 2018 acquisitions 2018 Revenue business o Strong revenue increase, up 6.9% in constant currency o Organic growth of 3.6% boosted by acquisitions in North Amer
Slide 6: Operating profit
Operating profit Balanced growth £m 19 (16) (12) 17 (24) 6 (3) 29 258 242 239 Growth in Driver Maintenance 2018 General cost continuing wages in NA & safety Other 2018 2017 FX Underlying acquisitions Fuel inflation business & Spain investment o Operating profit up 7.7% on a constant currency basis o
Slide 7: Divisional summary
Divisional summary Strong growth across all core businesses Revenue (YOY change*) Operating profit FY 2018 Change Margin £68m ALSA €119.1m €10.8m 14.1% ALSA +11.2% £577m £745m North America +8.0% North America $129.4m $7.8m 9.1% UK +2.8% UK £79.9m £9.0m 13.8% German Rail (15.1)% £1,061m Other £(24.4
Slide 8: Income statement
Income statement Record profits £m FY 2018 FY 2017 Change Operating profit 257.7 241.5 +6.7% Share of results of associates & JVs 0.9 (3.5) £4.4m Net finance costs (38.6) (38.0) (£0.6m) Profit before tax 220.0 200.0 +10.0% Tax (ETR 22%) (49.0) (48.0) Profit after tax 171.0 152.0 +12.5% EPS 32.9p 29.
Slide 9: Superior cash and returns
Superior cash and returns Strong free cash flow of £199m £m Operating cash flow conversion % FY 2018 FY 2017 ALSA 104% EBITDA 402.1 377.0 Working capital (17.5) 4.8 North America 83% Net maintenance capex (123.9) (165.2) UK 101% Pension deficit (7.4) (5.0) Group 98% Operating cashflow 253.3 211.6 Ta
Slide 10: Superior cash and returns: investing and returning to shareholders
Superior cash and returns Investing for future growth & returning to shareholders £m FY 2018 FY 2017 Cash flow available for growth & dividends 198.6 146.4 Net growth capital expenditure (5.8) (13.2) Net inflow from discontinued operations 0.4 27.5 Acquisitions (154.5) (101.5) Dividends (70.8) (64.7
Slide 11: Capital allocation
Capital allocation Sustainable compounding growth £400m+ EBITDA EBITDA 5 year Capex @ 1.1x CAGR of 6% depreciation Tax & Interest 5 year average £152m free cash flow Invest in the Manage gearing Return to business (2.5x 2.0x) shareholders at at 15% ROIC 2.0x cover 2018: £143m on 11 acquisitions 20
Slide 12: Balance sheet
Balance sheet Gearing maintained at 2.3x, interest cover increased Gearing Ratios 2018 2017 Covenant Ratings Grade Outlook Net debt/EBITDA 2.3x 2.3x <3.5x Moodys Baa2 Stable Interest cover 10.5x 10.2x >3.5x Fitch BBB- Stable o Gearing stable at 2.3x on net debt of £951m o Remain committed to a robus
Slide 13: Liquidity
Liquidity Well funded through to 2023 Strong debt maturity profile o £644m cash & committed headroom* 400 o Bank facilities extended to 2023 with two additional one year extension options 224 o New 3 year £500m bridge-to-bond 527 facility post the year end to refinance 228 98 22 15 7 FRN and bond du
Slide 14: IFRS 16
IFRS 16 No impact on our economics, how we run the business or the cash we generate o Effective from 1 January 2019 o Will primarily effect the accounting of the Group’s operating leases – increase in the number of leases being recognised on the balance sheet o Rail leases will not come on to the ba
Slide 15: Guidance
Guidance 2019 o Net maintenance capital expenditure of 1.1x to 1.2x depreciation – 2019 target c.£190m o Effective normalised tax rate in the low 20s %, normalised cash tax rate <15% o Fuel costs £6m higher (reverse in 2020) o Free cash flow normalises to c.£150m - £160m o Dividend cover of at least
Slide 16: Strategic review
Strategic review Dean Finch Group Chief Executive
Slide 17: Introduction: Record year for the Group
Introduction Record year for the Group o Record performance with improving trajectory through the year % Revenue growth o Based around success through focus on our 3 pillars: o Operational excellence o Deployment of technology o Acquisition & market diversification o Balanced portfolio, strong busin
Slide 18: Consistent delivery
Consistent delivery 5 years of reliable growth across all financial KPIs Continuing operations 2018 2013 CAGR Highlights restated o Statutory PBT CAGR of Revenue £m 2,450.7 1,739.9 7.1% 21.9% o EBITDA now over £400m EBITDA £m 402.1 301.0 6.0% o £450m dividend payments Normalised operating profit £m
Slide 19: Operational excellence with technology
Operational excellence with technology o Digital technology improvements: Improves safety Real-time management of on-time performance Lowering costs Driver behaviour tracking Improving revenue per mile Vehicle diagnostic alerting Vehicle utilisation Increasing average load o Deliveri
Slide 20: Excellent safety culture driving lower insurance costs
Excellent safety culture driving lower insurance costs o Accident prevention and claims cost £90m p.a. o Lytx DriveCam now installed in nearly 19,000 vehicles across the Group: Monitoring & coaching better driving performance, lowering speed & reducing collisions o We are just at the beginning of
Slide 21: Excellence & technology securing commercial growth
Excellence & technology securing commercial growth Modernising ticketing, booking & payment • Website and/or app improvements in every division 10% growth in Group digital sales Third party channels saw 63% growth (UK Coach and ALSA) Our channels becoming a platform for other modes and sales M
Slide 22: Transforming our UK Bus business
Transforming our UK Bus business o Transforming pricing with granular and targeted fares: Very positive momentum in 2018: • Fare-paying pax 1.1% better 50% say digital means they travel more • Commercial rev per mile up 4% (highest since 2012) Customer sat 88% (the best ever) o Transforming paym
Slide 23: Transforming our UK Coach business
Transforming our UK Coach business o Transforming into a digital retailer: Very positive momentum in 2018: • 70% sold on digital channels, 85%+ for InterCity routes Core Coach revenue growth 7% • 10 clicks to purchase (was 26 in 2014) • App at 4.5 stars and delivering 8% of revenue Core Coach pa
Slide 24: Transforming our North American business
Transforming our North American business o Transforming safety performance: DriveCam, speed monitoring and communications Service and insurance benefits o Transforming driver hour monitoring and customer billing: Jan 2019 150 bps improvement over Q4 2018 Granular link to pricing o Transformi
Slide 25: North American customer service premium
North American customer service premium Comprehensive 2018 customer survey in US School Bus showed 46% of our School Bus customers are Highly Satisfied Margins are higher in regions where the majority of our Customer satisfaction and likelihood not to seek renewal for customers are Highly Satisfied
Slide 26: Acquisitions in 2018
Acquisitions in 2018 o Returns continue to exceed 15% in first year of acquisition o More even distribution of spending on acquisitions in 2018: 56% (NA); 34% (ALSA); 10% (UK) o 99% of business acquired in North America still retained o Early acquisitions now paying back, e.g. Petermann: made in 201
Slide 27: Building multi-modal hubs - ALSA
Consistent execution Building multi-modal hubs - ALSA €108m to €152m rev in 4 years Madrid Geneva €0 to €15m rev in 3 years And 5 other Additional types of discretionary services services Airport transfers & airline crew Urban bus shuttle services ALSA cab & Sightseeing mini cabs excursions & tours
Slide 28: Building multi-modal hubs - North America
Consistent execution Building multi-modal hubs – North America $0 to $51m rev in 2 years Chicago New York $0 to $96m rev in 4 years Emergency School bus replacement work Further Coach shuttle work School bus Shuttle expansion Charter & Coach, shuttle field trips & charter Paratransit Paratransit & s
Slide 29: ALSA's record year
ALSA’s record year • Record revenue, profit and passengers Marrakech: €0 to €24m rev in 20 years • Concession renewal not resumed Urban, long haul BRT and inter-city • Organic growth& across regional all parts • Best ever customer satisfaction ALSA cab & (76%) Tourist, employee mini cabs shuttle and
Slide 30: Outlook
Outlook o Spanish concession renewals may be further delayed by General Election o Rabat & RRX will launch over the summer – both €1bn revenue contracts o Good pipeline of M&A opportunities o Continue to deploy technology to drive operational improvements, driving faster customer growth & better mar
Slide 31: Q&A
Q&A 31
Slide 32: Full Year Results
Full Year Results For the year ended 31 December 2018 28 February 2019
National Express Group — FY2018 Earnings Presentation on 6ix