Mobico Group Plc · LSE:MCG
Mobico — National Express Group — FY2005 Earnings Presentation
31 slides from Mobico's earnings presentation, Mar 9, 2006
Slide 1: Preliminary Results for the year ended 31 December 2005
Preliminary Results For the year ended 31 December 2005 9 March 2006
Slide 2: Phil White, Chief Executive
Phil White Chief Executive 2
Slide 3: 2005 Highlights
2005 HIGHLIGHTS • Earnings at the top end of market expectations • Alsa – key strategic move • Focus on high quality school bus earnings in North America • Continued operational performance across UK Trains • Continual growth in Coaches and London buses • Further dividend growth of 7.5%; buy back pr
Slide 4: Adam Walker, Finance Director
Adam Walker Finance Director 4
Slide 5: Financial Highlights (1)
FINANCIAL HIGHLIGHTS (1) • Strong financial results ¾ growth in operating profit ¾ margin improvement ¾ record EPS ¾ acquisition of Alsa ¾ continued investment in operations ¾ balance sheet re-leveraged to enhance shareholder value 5
Slide 6: Financial Highlights (2)
FINANCIAL HIGHLIGHTS (2) • Revenue of £2.2bn (2004*: £2.4bn) • Normalised operating profit up 8.5% to £155.5m (2004*: £143.3m) • Normalised profit before tax up 10.7% to £135.3m (2004*: £122.2m) • Normalised diluted EPS from continuing operations up 10.1% to 76.3p (2004*: 69.3p) • Final dividend of
Slide 7: Group Income Statement
GROUP INCOME STATEMENT 2005 2004* £m £m Revenue 2,216.0 2,354.5 Normalised operating profit 155.5 143.3 Loss from associates (8.8) (3.4) Finance costs (11.4) (17.7) Normalised profit before tax 135.3 122.2 Exceptional items (7.8) (7.7) Goodwill and intangible asset amortisation (38.2) (35.7) Loss on
Slide 8: Divisional Operating Profit and Margin
DIVISIONAL OPERATING PROFIT AND MARGIN Operating profit Operating margin 2005 2004* 2005 2004* £m £m % % Coaches 21.5 19.3 10.7 9.9 Buses 41.5 41.6 15.5 17.3 Trains 64.2 61.3 4.3 3.6 North America 35.0 29.6 14.5 13.9 Alsa 2.6 - 14.3 - Central Functions (9.3) (8.5) - - 155.5 143.3 7.0 6.1 8 * restate
Slide 9: Alsa
ALSA • Financial and reporting systems integration well underway • Valuation of intangibles ongoing • Growth targets - 5 to 6% per annum • Stability of cash flow from long term concessions • Ongoing investment to support growth • Fuel hedged in 2006 • Favourable tax and funding environment 9
Slide 10: UK Coach
UK COACH UK Coaches cash conversion 28 26 • 64% direct sales 24 • Passenger growth of 11% 22 over 3 years 20 • Compound profit growth of £m 18 16 76% over 3 years 14 12 Op profit Op cash flow 10 2002+ 2003+ 2004* 2005 + 2002-2003 not restated for IFRS * restated for transition to IFRS 10
Slide 11: Trains Financial Performance
TRAINS FINANCIAL PERFORMANCE Midland Mainline - improved performance; passenger growth Central Trains - substantial improvements in performance Wessex - unaffected by July attacks Gatwick - premium increase of £3.9m; remains loss-making GN - passenger decline post July Silverlink - route transfer c2
Slide 12: Revenue Analysis of Trains by Quarter - 2005
REVENUE ANALYSIS OF TRAINS BY QUARTER - 2005 500 2004* 2005 450 400 350 300 £m 250 200 150 100 50 0 Q1 Q2 Q3 Q4 12 * restated for transition to IFRS (ScotRail is excluded from the 2004 numbers)
Slide 13: Bus
BUS • Concessionary fares – third of passenger base • Fuel increase of £7m to be absorbed in 2006 • Claims handling team restructured • Acquisition of Tellings Golden Miller • Margin improvement in London 13
Slide 14: North America
NORTH AMERICA 70 14.60% Operating profit Operating margin 14.50% 60 14.40% 50 14.30% 14.20% 40 US$m 14.10% 30 14.00% 20 13.90% 13.80% 10 13.70% 0 13.60% 2002+ 2003+ 2004* 2005 + 2002-2003 not restated for IFRS 14 * restated for transition to IFRS
Slide 15: Student Bus Contracts Retention
STUDENT BUS CONTRACTS RETENTION 100% 90% 80% Number of contracts 70% Lost business 60% Negotiated renew als 50% Contracts re-w on in bids 40% New business 30% 20% 10% 0% 2005 2004 15
Slide 16: Divisional Cash Flow
DIVISIONAL CASH FLOW UK UK UK North Alsa Central Total Trains Bus Coach America Functions £m £m £m £m £m £m £m Normalised operating profit 64.2 41.5 21.5 35.0 2.6 (9.3) 155.5 Normalised operating profit from - - - 3.8 - - 3.8 discontinued operations Depreciation/ amortisation of FA grants/ profit on
Slide 17: Movement in Net Debt
MOVEMENT IN NET DEBT 2005 2004 £m £m Net debt at 1 January (136.6) (307.8) Operating cash flow 70.5 187.5 Interest (22.0) (20.3) Tax (26.7) (3.2) Share buy-back (29.3) - Acquisitions and disposals (359.1) 22.8 Financial investments and shares 8.4 2.6 Dividend (41.6) (36.4) Currency translation (27.0
Slide 18: Slide 18
Slide 19: Alsa Background
ALSA BACKGROUND • Leading coach and bus operator in Spain • Owned by Cosmen family • Annualised revenue of £218m • 75% of revenue generated by coaches • Cosmen continuity through shareholding in Group • Experienced executive management team 19
Slide 20: Alsa Rationale
ALSA RATIONALE • Operations principally in Spain • Coach and bus operations – core NX skills • Quality public transport business – growing • Critical mass • Strong cash flow and margins underpinned by long term concessions and contracts • Added value through operational and marketing initiatives • T
Slide 21: Alsa 1st Days
ALSA 1st 100 DAYS • Rationale for transaction stands • They think like we do • Depth in management teams • Appetite for growth • Identification of synergies • Integration well underway • Stakeholder support 21
Slide 22: Slide 22
Slide 23: Coaches
COACHES • Passenger growth return to pre-July levels • Continuation of dynamic fares policy • Segmentation analysis to broaden coaching market • Significant investment programme in customer facilities • Developing new products for specific customers • Utilising new technology to improve operational
Slide 24: Slide 24
Slide 25: Trains
TRAINS • Industry leader on operational performance • Impact on discretionary travel following July attacks • Further extensions at Central Trains and Silverlink to the end of 2007 • Bidding focus in 2006 on franchises where we are already incumbent • Customer service initiatives launched at MML 25
Slide 26: EL j
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Slide 27: Buses
BUSES • Operational performance underpins quality service ¾ Driver recruitment ¾ Technology ¾ Route strategy • Working with local authorities ¾ Concessionary fares ¾ Quality partnerships ¾ Transport Innovation Fund • Doubled the size of London operations 27
Slide 28: m~ (1) My
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Slide 29: North America
NORTH AMERICA • Strategic focus on student transportation • Record success at the bid table • High retention levels • Relocation to Chicago • Strategic acquisition in Canada • Re-engineering drive to improve efficiencies • Strong growth prospects 29
Slide 30: Current Trading and Prospects
CURRENT TRADING AND PROSPECTS • Current trading in line with expectations • Alsa integration on track • Growth prospects ¾ US bid season ¾ Rail bidding ¾ Top line growth in Coaches and Alsa ¾ Investment in customer facilities ¾ Acquisitions • Shareholder returns ¾ Dividend policy ¾ Buy back 30
Slide 31: Preliminary Results
Preliminary Results For the year ended 31 December 2005
National Express Group — FY2005 Earnings Presentation on 6ix