Tpg Inc. · NASDAQ:TPG
Tpg — Q1 2003 Earnings Presentation
31 slides from Tpg's earnings presentation, Apr 25, 2003
Slide 1: First Quarter 2003 Results
First Quarter 2003 Results 25 April 2003
Slide 2: Agenda
Agenda Group Mail Express Logistics Financial
Slide 3: Group Highlights
Group Highlights Group Steady performance overall despite continuing tough economic conditions Net income excluding pension increase up 2.8% (4.2% at constant exchange rates) Revenue growth of 0.7% (5.7% at constant exchange rates) Record cash flow performance: free cash flow up 56% Mixed perf
Slide 4: Summary of results
Summary of results Group % Change Million € Q1 2003 Q1 2002 Operational FX Total Revenues 2,917 2,898 5.7% - 5.0% 0.7% EBITA 292 293 1.4% - 1.7% - 0.3% Operating income 254 255 1.6% - 2.0% - 0.4% (EBIT) Net income 140 143 - 0.7% - 1.4% - 2.1% Net income 147 143 4.2% - 1.4% 2.8% excluding pension inc
Slide 5: Revenue growth
Revenue growth Group Good organic revenue growth of 4.1% 3200 4.1% 1.6% - 5.0% + 0.7% 2800 45 118 - 144 2400 2000 1600 2,898 2,917 1200 800 400 z z z z Q1 2002 Organic Acquisition FX Q1 2003
Slide 6: Mail Overview
Mail Overview Mail - 2.4% Revenues 800 695 712 Q1 2003 Q1 2002 600 400 - 3.7% + 9.4% + 8.0% 157 163 200 93 85 54 50 0 Mail NL Cross Border European Mail Data & Document Networks Management Million € Q1 2003 Q1 2002 Revenues 999 1,010 -1.1% EBITA 218 218 0.0% Operating Margin 21.8% 21.6%
Slide 7: Organic revenue growth by business
Organic revenue growth by business Mail Lower Mail NL revenues due to Euro coin project last year High organic growth in international expansion areas 14% 10.0% 10% 7.1% 6% 1.2% 2% - 2.4% - 0.4% -2% -6% Mail NL Cross Border European Mail Data & Total Networks Document Management
Slide 8: Addressed mail volume growth in the Netherlands
Addressed mail volume growth in the Netherlands Mail Lower rate of decline in Dutch mail volumes compared to recent quarters Actual Q1 2003 Underlying Q1 2003* 2% 2% 1% 1.8% 1% 0% 0% - 0.1% - 1.3% -1% -1% - 0.2% - 2.9% - 2.9% -2% -2% -3% -3% Domestic Direct Total * Adjusted for elections
Slide 9: Margin development
Margin development Mail Performance improvement driven by further productivity efficiencies in Mail Netherlands 25 1.1% - 0.9% 20 15 10 21.6% 22.7% 21.8% 5 0 Q1 2002 Performance Q1 2003 Pension Q1 2003 improvement excluding increase pension increase
Slide 10: Mail Outlook 2003
Mail Outlook 2003 Mail Targets Revenue growth: stable EBITA Margin: > 19% (including pensions) Volume decline in Netherlands addressed mail of 2% to 3% Further benefits from Cost Flexibility programme Continued high level of growth in international expansion areas
Slide 11: Express Overview
Express Overview Express + 2.4% 900 Revenues 856 836 Q1 2003 Q1 2002 600 - 1.1% 300 181 183 0 Europe Rest of World Million € Q1 2003 Q1 2002 Revenues 1,037 1,019 1.8% EBITA 52 41 26.8% Operating Margin 5.0% 4.0%
Slide 12: Revenue growth
Revenue growth Express Strong organic revenue growth: Europe 6.3% ROW 13.3% 1,200 + 7.6% - 0.4% - 5.4% 1,100 + 1.8% 77 -4 - 55 1,000 900 800 1,019 1,037 700 600 z z z z Q1 2002 Organic Acquisition FX Q1 2003
Slide 13: Volume and yield growth
Volume and yield growth Express Fourteenth consecutive quarter of positive revenue quality yield Q1 2003 Europe - core Express products Consigments 2.9% Kilos 0.7% Yield 3.3% 0% 1% 2% 3% 4%
Slide 14: Margin development
Margin development Express Significant margin improvement from 4% to 5% due to improved revenue quality yields 6% 1.0% - 0.1% 0.1% 5% 0.1% 4% 3% 3.9% 4.0% 5.0% 2% 1% 0% Q1 2002 Innight Q1 2002 Performance Pension FX Q1 2003 Reported transfer Restated increase
Slide 15: Express Outlook 2003
Express Outlook 2003 Express Targets Revenue growth: > 5% EBITA Margin: > 6% Similar levels of revenue growth to 2002, assuming an unchanged economic environment Continued revenue quality yield improvement Further improvements in operating margin
Slide 16: Logistics Overview
Logistics Overview Logistics + 5.0% Revenues 750 657 Q1 2003 626 Q1 2002 600 450 300 - 14.2% 163 190 + 14.0% 150 65 57 0 Europe North America ROW Million € Q1 2003 Q1 2002 Revenues 885 873 1.4% EBITA 20 39 - 48.7% Operating Margin 2.3% 4.5%
Slide 17: Revenue growth
Revenue growth Logistics A high level of new contract wins has boosted organic growth 1000 5.4% - 9.0% 5.0% 47 - 79 + 1.4% 44 800 873 885 600 400 Q1 2002 Organic Acquisition FX Q1 2003
Slide 18: Organic revenue growth
Organic revenue growth Logistics TOTAL 5.0% - 6.2% Terminated contracts - 0.6% Existing contracts New contracts 11.8% -10% -5% 0% 5% 10% 15%
Slide 19: Margin development
Margin development Logistics Pressure on earnings and margin continues mainly from existing business Below standard performance in certain countries 5% - 0.2% 0.2% - 0.3% - 2.0% 4% 3% - 0.1% 4.7% 4.5% 2% 2.3% 1% 0% Q1 2002 Innight Q1 2002 New Term inated Existing FX Q1 2003 Reported transfer Res
Slide 20: Poor performing countries
Poor performing countries Logistics 88% of earnings shortfall is accounted for by France, Germany and Italy Revenues Earnings shortfall Underlying reasons Q1 2003 Q1 2003 vs Q1 2002 100% = € 885 million 100% = € 19 million Recent acquisitions still not operating up 12% to group standards Others 54
Slide 21: Transformation Through Standardisation
Transformation Through Standardisation Logistics Category Initiative Actions - in progress Optimisation and integration Freeze/rationalise investments in vehicles of transport and distribution Integrate networks in Italy networks Warehouse restructuring Set up new central/local procurement
Slide 22: Logistics Outlook 2003
Logistics Outlook 2003 Logistics Targets Revenue growth: High single digit EBITA Margin: approx. 4% Continuing difficult market conditions High single digit revenue growth through new contracts Margin addressed via the “Transformation through Standardisation” plan fix the poor performers r
Slide 23: Financial highlights
Financial highlights Group Excellent cash flow performance Operating cash flow up 27% on last year Free cash flow up 56% Further strengthening of key financial ratios Reduction of 20% in net debt from 31 December 2002 to € 1.1 billion Improvements in key financial ratios in line with S&P tar
Slide 24: Free cash flow
Free cash flow Group Further working capital efficiencies achieved Net capex down 42% year on year 350 300 19 - 43 41 250 200 150 324 281 264 100 50 0 Net Income Δ Working Cap. Δ Provisions/ Net Operating Net Capex FCF before D & A pensions Cash
Slide 25: Group Outlook
Group Outlook Group We reiterate our previous outlook statement for 2003 despite the continuing weak economic climate We expect medium to high single digit growth in net income from continuing operations excluding the additional pension costs, barring any further deterioration in global economic con
Slide 26: Additional information
Additional information ATPG
Slide 27: Split by Business
Split by Business Group Revenues Earnings 2,917 + 0.7% 2,898 290 - 2.7% 298 20 12.3% - 48.7% 39 13.1% 52 885 + 1.4% 873 26.8% + 26.8% 41 30.3% 30.1% 13.8% 1,037 + 1.8% 1,019 35.6% 35.2% 218 218 0.0% 75.2% 73.2% 999 - 1.1% 1,010 34.2% 34.9% Q1 2003 Q1 2002 Q1 2003 Q1 2002 Mail Express Logistics (Incl
Slide 28: Free cash flow
Free cash flow Group Q1 Q1 Million € % Change 2003 2002 Net Income 140 143 Depreciation & amortisation 124 117 Changes in working capital 41 37 Changes in pension liabilities (50) (32) Changes in other provisions (16) (16) Changes in deferred taxes 85 5 Net Operating Cash 324 254 27.6% Capital expen
Slide 29: Important new contract wins
Important new contract wins Logistics New business wins of €220 million annualised in Q1 2003 Contract terminations of €53 million annualised in Q1 2003 Selection of key wins Italy Hi-Tech Italy Hi-Tech Telis Benelux Hi-Tech Germany Automotive Germany Tyres
Slide 30: New business pipeline
New business pipeline Logistics Stable pipeline maintained High certainty level temporarily lower due to high level of recent contract wins 2000 1600 1200 800 400 0 Q1 2002 Q4 2002 Q1 2003 High certainty element (in € m)
Slide 31: Pipeline by sector
Pipeline by sector Logistics Reduced FMCG and Hi-Tech Electronics in pipeline due to recent contract wins Q1 2003 revenues Q1 2003 pipeline 17% 13% 18% 19% 3% 9% 7% 8% 13% 38% 6% 49% FMCG Automotive Publishing/Media Hi-Tech Electronics Tyres Other