National Express Analysis

Topics: Free cash flow, Business terms, Cash flow Pages: 24 (2619 words) Published: July 23, 2013
Full Year Results
Year ended 31 December 2012
28 February 2013

Cautionary statement
This Review is intended to focus on matters which are relevant to the interests of shareholders in the Company. The purpose of the Review is to assist shareholders in assessing the strategies adopted and performance delivered by the Company and the potential for those strategies to succeed. It should not be relied upon by any other party or for any other purpose. Forward looking statements are made in good faith, based on a number of assumptions concerning future events and information available to Directors at the time of their approval of this report. These forward looking statements should be treated with caution due to the inherent uncertainties underlying any such forward looking information. The user of these accounts should not rely unduly on these forward looking statements, which are not a guarantee of performance and which are subject to a number of uncertainties and other facts, many of which are outside of the Company’s control and could cause actual events to differ materially from those in these statements. No guarantee can be given of future results, levels of activity, performance or achievements

Unless otherwise stated, all profit, margin and EPS data refer to normalised results, which can be found on the face of the Group Income Statement in the first column. The definition of normalised profit is as follows: Statutory result excluding profit or loss on the sale of business, exceptional profit or loss on sale of non-current assets and charges for goodwill impairment, intangible asset amortisation, exceptional items and tax relief thereon. The Board believes that the normalised result gives a better indication of the underlying performance of the Group.

2

Overview
Sir John Armitt Chairman

Overview
o

A unique diversified portfolio of assets
Bus, Coach and Rail o Geographic access
o

o o

The right strategy in place Track record of successive margin growth Strength in delivering operational excellence Impressive cash generation, supported by prudent dividend and gearing policies Market opportunities for liberalisation and new contract concessions

o

o

o

4

2012 Group Results
Jez Maiden Group Finance Director

National Express delivered its 4 strategic objectives in 2012 Delivering operational excellence
o

Driving organic growth
o o

Generating Delivering superior cash new & returns opportunities o

Margin at 11.6% best in class in 4 out of 5 divisions Record Non-Rail profit1 at £185m – 3rd successive year of growth

Revenue up 7%2 New contracts secured – almost £2 billion in revenue

o

Free cash flow3 of £141m – investing for growth Non-Rail pre-tax ROCE stable at 10.6%

o

o

Delivery of $10m annualised synergies from Petermann school bus acquisition $65m revenue US Transit business established

o

1

EBITA

2

Constant currency, adjusted for rail handover, including acquisitions

3

Pre rail handover 6

3 successive years of Non-Rail profit growth
Revenue £m (2012) Operating profit £m

o

Non-Rail
o o o o

o

Rail
o

Delivery of margin progression Return to commercial revenue growth1 Benefits of fleet investment programme Strong capital deployment discipline

o

Continued operation of flagship franchise – c2c – leader in service, passenger satisfaction and profitability Retained & leveraged our bid capability in UK & Germany

1

Non-concession revenue in UK Coach 7

We have driven strong free cash flow

Operating profit

Depn/ other

EBITDA

Replacement capex

Working capital/ other

Pension deficit

Operating cash flow

Tax/ interest/ associates

Free cash flow*

o

Achievements
o o o o

o

Future
o o o

99% conversion of operating profit into operating cash Free cash flow of £141m Well invested fleet – c.1,300 vehicles delivered in 2012 Working capital lower – €22m reduction in...
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