FirstGroup plc North America Institutional Presentations June 2003 firstgroup - PowerPoint PPT Presentation

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FirstGroup plc North America Institutional Presentations June 2003 firstgroup

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  1. FirstGroup plc North America Institutional Presentations June 2003 www.firstgroup.com

  2. Our businesses We are the largest UK listed surface transport group: c.$1.6bn (£1bn) market cap. $3.7bn (£2.3bn) sales $500m (£315m) EBITDA UK Bus US Bus UK Rail UK No. 2 15% market share 3 rail franchises 20% of Group EBITDA UK No. 1 23% market share 10,000 buses 49% of Group EBITDA US No. 2 15,000 school buses transit management vehicle services 31% of Group EBITDA

  3. Business characteristics

  4. North America - opportunities • Growth engine for the Group • 3-5 year plan + 50% growth • Large, fragmented markets • Contracted revenue for c.5 years • Largely local authority/state funded • Self funding for capex • Bolt on opportunities in Transit and Services • $160m EBITDA / $60m maintenance capex • Student (60%)-Yellow school buses • Transit (30%)-Management/call centres • Services (10%)-Maintenance/add-on services Growth opportunities in markets with contracted revenue, which are resilient to economic and global pressures

  5. North AmericaFeatures of operating markets

  6. UK BusOpportunities • Pressure on central Government to improve public transport • Urban transit bus seen as best solution to city transport issues • Congestion charging working in London – possible roll out to other cities • Emphasis on partnerships with local authorities • Improved marketing is delivering passenger volume growth • 75% Urban (London 20%) • Strong growth in London contracts • Market unregulated outside London • 2 yr growth up to 13% in urban areas Highly cash generative business (£160m EBITDA, £100m free cash after capex) with opportunities for organic growth

  7. UK Rail - opportunities • SRA priority to deliver improvements in UK railways • Focus on refranchising by 2004 • Consolidate number of franchises • Emphasis on service delivery • Infrastructure maintenance improving (Network Rail) • Passenger volumes increasing • Good prospects for rail as road congestion continues to increase • UK total 20 franchises • 10 to be renewed by 2006 • FirstGroup bidding for 4 • Incumbent in 3 • Sales opportunity £1.6bn • Not reflected in company valuation Zero capex, service contract business in which FirstGroup has core skills and strong record of delivery

  8. Financial recordConsistent growth Turnover Operating profit* Cash generation £m £m £m *Before goodwill amortisation and exceptional items UK Bus UK Rail North America

  9. Business HighlightsYear to 31 March 2003 • Strong financial performance • EBITDA £315m • Invested £106m in the business • Debt reduced by £28m • Proactive approach to funding and risk management • Fuel • Interest • New pension arrangements in place • BBB stable credit rating reiterated by S&P

  10. Profit & Loss AccountDivisional analysis

  11. Debt history £m Cashflow and disposals £364m cash consideration for acquisition of Ryder US Bus expansion UK Bus capex upgrading fleet

  12. Summary • Simple, effective business model • Balanced portfolio of operations • Targeting growth across all three divisions • US 50% over next 3-5 years • UK Bus steady profit growth / margin maintained • UK Rail franchise opportunities not in share price Strong businesses, revenue contracted, prepaid or cash. Predominately non-cyclical/resilient to global pressures

  13. Appendices

  14. UK Rail Re-franchising update

  15. Profit and Loss Account (1)Year to 31 March 2003 2003 2002 increase £m £m Group turnover 2,291.0 2,164.1 5.9% Group operating profit1 216.1 215.0 0.5% Interest (56.3) (56.3) Associates/JVs share of losses - (2.0) Pre-exceptional pre-tax profit1 159.8 156.7 2.0% Goodwill (25.8) (29.3) Exceptional items (0.6) (19.5) Profit before tax 133.4 107.9 23.6% 1. Before goodwill amortisation and exceptional items

  16. Profit and Loss Account (2)Year to 31 March 2003 2003 2002 increase £m £m Profit before tax 133.4 107.9 23.6% Tax on operating profit (35.8) (33.9) Profit after tax 97.6 74.0 31.9% Minority interests (0.1) (0.1) Dividends (45.5) (43.1) Profit for the year 52.0 30.8 68.8% Adjusted EPS1 26.8p 25.8p 3.9% Adjusted cash EPS 50.6p 48.5p 4.3% EBITDA2 315.3 310.1 1.7% 1. EPS adjusted for goodwill amortisation and exceptional items 2. Operating profit before goodwill, exceptional items plus depreciation

  17. FirstGroup AmericaYear to 31 March 2003

  18. CashflowYear to 31 March 2003

  19. Cash generation and capexFive year record • Strong underlying cash generation • Capex highly discretionary • UK Bus : fleet now at half life = low maintenance capex • US: now self funding for capex • Capex cover : 2003 cover 2.96x • FirstGroup could cut capex aggressively if required = fast pay down of debt

  20. FirstGroup plc 395 King Street Aberdeen AB24 5RP Moir Lockhead Group Chief Executive Tel: +44 (0)1224 65102 Iain Lanaghan Group Finance Director Tel: +44 (0)1224 650119 FirstGroup plc 3rd Floor, Macmillan House Paddington Station London W2 1FG Michael Mitchell Corporate Communications Director Tel: +44 (0)207 291 0504 Rachael Borthwick Corporate Communications Manager Tel: +44 (0)207 291 0508 FirstGroup contacts www.firstgroup.com