Mobico Group Plc · LSE:MCG
Mobico — National Express Group — H1 2021 Earnings Presentation
37 slides from Mobico's earnings presentation, Aug 11, 2021
Slide 1: 1
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Slide 2: Agenda
== Agenda Introduction and highlights Ignacio Garat Financial Review Chris Davies Outlook and priorities Ignacio Garat national express 2
Slide 3: Introduction and highlights
Introduction and highlights ~ Ignacio Garat Group Chief Executive
Slide 4: Introduction and highlights: 2021 H1 results ahead of expectations
z= Introduction and highlights gations 2021 H1 results ahead of our expectations - Our first priority - to reopen safely - Significant improvements in revenue, EBITDA, profit and cash generation — results slightly ahead of management expectations Underlying operating profit increased by £54m despite
Slide 5: Financial Highlights
Financial Highlights Chris Davies Group CFO 2B 0 2. Qn aise
Slide 6: 2021 interim financial review: Summary
waa 2021 interim financial review national express Summary Underlying £m H1 2021 H1 2020 Change Revenue 992.4 1,031.5 (3.8%) EBITDA 128.2 88.3 45.2% Group underlying operating profit 22.9 (30.6) 53.5m Group underlying PBT 0.1 (60.7) 60.8m Underlying EPS (2.1p) (9.9p) 7.8p Statutory £m H1 2021 H1 202
Slide 7: Continuing improved trajectory
a 2021 interim financial review national . . . . express Continuing improved trajectory Monthly revenue compared to 2019 Service Evolution (% of Pre-Covid levels) 30% 100 20% 10% 80 0% 60 -10% -20% 40 -30% 20 -40% -50% 0 60% 1st Lockdown Aug-20 Nov-20 Dec-20 Mar-21 Jun-21 Jan Feb Mar Apr May Jun Jul
Slide 8: H1 20' H2 20' H1 21'
‒ 140 ‒ 120 ‒ 100 ‒ 80 ‒ 60 40 20 0 H1 20' H2 20' H1 21' 8
Slide 9: Underlying operating profit/(loss)
Underlying operating profit/(loss) +32.2% H1 2021 Change (8.9)% +8.4% ALSA €19.8m €27.9m (3.7)% North America $57.6m $47.4m UK (£19.9m) (£4.4m) Other (£15.8m) (£0.2m) Group £22.9m £53.5m 9
Slide 10: £m * This is net of the cost of running the additional year-on-year services
‒ £m ‒ ‒ * This is net of the cost of running the additional year-on-year services in UK Bus in return for the higher year-on-year bus operator grant 10
Slide 11: Operating and free cash flow
£m H1 2021 H1 2020 FY 2020 EBITDA 128.2 88.3 186.6 Working capital (4.5) (139.6) (78.3) Net maintenance capex (56.7) (113.0) (215.9) Pension deficit (3.6) (3.8) (7.4) Operating cash flow 63.4 (168.1) (115.0) Tax & interest (22.8) (24.9) (63.7) Free cash flow 40.6 (193.0) (178.7) – – – – 11
Slide 12: Net funds flow and net debt
£m H1 2021 H1 2020 FY 2020 Cash flow available for growth & dividends 40.6 (193.0) (178.7) Net growth capital expenditure (74.9) (9.1) (35.3) Net acquisitions and disposals (46.9) (39.6) (48.0) Proceeds from equity issues - 230.1 725.6 Hybrid coupon (5.3) - - Separately disclosed items (34.3) (40.1)
Slide 13: Separately disclosed items
Income £m Cash Statement Amortisation of intangibles arising upon acquisition (19.4) - One-off costs, cancellation charges and compensation payments (4.7) (6.1) Discontinuation of fuel trades (0.9) (1.1) Onerous contract provisions and associated impairment (3.1) (14.8) Impairments and associated ch
Slide 14: Gearing ratios and credit ratings
2021 half 2020 year Gearing Ratios year end Ratings Grade Outlook Net debt/EBITDA 4.4x 5.1x Moody’s Baa2 Negative Interest cover 4.1x 2.7x Fitch BBB Negative – – – – – – ‒ ‒ 1 On “frozen GAAP” basis, equates to 3.7x under IFRS 16 ‒ 14
Slide 15: Extended debt maturity profile
Extended debt maturity profile 26 – 41 500 480 400 – 229 250 67 52 26 117 39 67 43 31 15 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Bond RCF Other debt PP Hybrid – £1.0bn cash and committed headroom: – RCF undrawn £0.5bn – Cash £0.5bn – Average maturity of 5 years 15
Slide 16: 2021 a transition year
=a Interim financial review national ‘ A 5 express 2021 a ‘transition year — Exact timing of recovery remains uncertain as restrictions are lifted at varying pace — H2 has started well, seeing a continuation of the improving trends in H1 — Continue to project a robust improvement in H2 as vaccinatio
Slide 17: Outlook and Priorities
Outlook and Priorities Ignacio Garat Group Chief Executive
Slide 18: Industry leading safety scores
==: Outlook and priorities national Our purpose and vision in practice: Industry leading safety scores ° Lytx Risk Score: total risk points = active vehicles + month Lytx DriveCam is installed on —Industry —-NORTH AMERICA —-UK COACH -——UKBUS —ALSA over 20,000 vehicles and monitors driver behaviour 6
Slide 19: Divisional Highlights - ALSA
==: Outlook and priorities national express Divisional Highlights - ALSA H1 Highlights ~ Revenue protection through Urban & Regional ~50% across ALSA Long Haul recovery underway (45% pre-Covid pax) Restructuring programme delivering €25m cost savings Morocco growth Looking forward Consolidate region
Slide 20: Divisional Highlights - North America
==: Outlook and priorities national express Divisional Highlights —- North America H1 Highlights ~ 96% of schools back by end of school year Transit portfolio review delivering improved returns Driving Excellence delivering operational and customer benefits Strong recovery in operating margin and ca
Slide 21: Divisional Highlights - UK
== Outlook and priorities national H1 Highlights ~ Increasing service and occupancy Reducing reliance on CBSSG Network optimisation of Coach on restart of services NETS recovery Looking forward ~ Consolidate fragmented NETS and NEAT markets Opportunities from franchising and consolidation ZEV ‘avail
Slide 22: Driven by our purpose
== Outlook and priorities national . express Driven by our purpose Our vision “The world’s premier mass transit operator with services offering leading safety, reliability and environmental standards that customers trust and value.” Our purpose “We aim to make mass transit an increasingly attractive
Slide 23: An exciting time for public transport
== Outlook and priorities national aye . . express An exciting time for public transport Governments are acting decisively to push people from private to public transport and to decarbonise Population growth, congestion, air pollution and environmental damage requires a step-change in mobility habit
Slide 24: Revenue exposure by market
‒ ‒ ‒ ‒ Key (% of revenue) <5% 5-10% ‒ 10-25% 25-50% >50% 24
Slide 25: As the 'solutions provider' for our customers
==: Outlook and priorities ..-As the ‘solutions provider’ for our customers Reinvigorate public transport Multi-modal expansion Operational transformation Fill the Transit Gap national express Consolidate & compound Grow use of public transport in cities suffering congestion by building partnerships
Slide 26: The NX Way
== Outlook and priorities national ‘The NX Way’ oe — ‘How’ we operate is as important as ‘where’ we participate and ‘what’ we offer — Instilled a sense of urgency to drive a high performance culture — Rapid and consistent roll-out and training in new quality management framework — Standardise and sc
Slide 27: Case Study: Driving Excellence
==z Outlook and priorities Case Study: Driving Excellence On Time Performance On-time performance % gs RR LD's per route segment ($) N ros 8 2020/21 ——=2019/20 Sep Oct Nov Dec Jan Feb March April May June Yard Depart Performance On-time yard depart % 30/08/20 30/09/20 31/10/20 30/11/20 31/12/20 31/0
Slide 28: Stabilise then grow
== Outlook and priorities national Stabilise then grow Stabilise Restore pre Covid levels of revenue, profit and cash Embed quality management processes (replicate Driving Excellence) Organise to win Prioritise asset-light opportunities Return to paying dividend Reduce gearing to 1.5-2 times Broaden
Slide 29: In summary
==: Outlook and priorities national express In summary — First half performance has exceeded our expectations and shows an improving positive trajectory — We expect to see this trend continue through the second half — Whilst our first focus is on accelerating the recovery to pre-Covid levels of trad
Slide 30: Appendix
Appendix
Slide 31: North America
North America Improving trajectory across each business line sasasneg =o. We Summary — School bus back to 96% service (mixture of traditional & hybrid) by end of school year, followed by strong summer school season — Transit now operating at 80% service levels — Shuttle operating at 47% service leve
Slide 32: ALSA
ALS, national express Improving trajectory and return to revenue growth and profit Summary ; Returns eer revenue protected: nearly 50% of revenue protected across H1 2021 H1 2020 — Long haul significantly impacted by inter-regional travel restrictions | Revenue €331.1m €305.4m — Recovering as restri
Slide 33: UK
UK Improving trajectory from H2 2020 Summary — Revenue decline reflects mothballing of Coach operations in Q1 with 3'¢ national lockdown, with significantly reduced services in Q2 — Coach revenue starting to rebuild with ramp up of services — now at 37% of pre-Covid service levels & 33% pre-Covid pa
Slide 34: German Rail
German Rail Strong revenue growth with the start up of new services Summary — Strong revenue growth reflecting start-up of final service in the RRX contract in December 2020 — Revenue partially protected: RRX contract being a gross cost contract — Service running at 100% of pre-Covid levels — Patron
Slide 35: Strong environmental credentials
== Strong environmental credentials Taking cars off the road, easing congestion, reducing emissions — Public transport key to tackling climate change & provision of clean transport ~ Each coach takes up to a mile of traffic off the road ~ Each bus takes up to 75 cars off the road, reducing congestio
Slide 36: External recognition - ESG ratings
za External recognition - ESG ratings national MSCI and Sustainalytics express MSCI* —As of 2020, National Express received an MSCI ESG rating of AA MSCI ESG RATINGS [ecc| 8 | 88 | e88| A MEY aAaa| Sustainalytics —National Express rated ‘low risk’ for ESG overall - & ‘low’ or ‘negligible’ risk in ev
Slide 37: national
national
National Express Group — H1 2021 Earnings Presentation on 6ix