2024-04-22 17:29:09 ET
Mobico Group Plc (NXPGF)
Q4 2023 Results Conference Call
April 22, 2024 04:00 AM ET
Company Participants
Jose Ignacio Garat - Group Chief Executive Officer & Executive Director
James Stamp - Chief Financial Officer
Conference Call Participants
Gerald Khoo - Liberum
Joe Thomas - HSBC
Ruairi Cullinane - RBC
Othmane Bricha - Bank of America
Presentation
Jose Ignacio Garat
Good morning, and welcome to our 2023 Full Year Results and Q1 Update. Thank you again for your understanding and waiting for this. We are pleased to have completed the supplementary enquiries around German Rail that were deemed necessary, and James will walk you through the conclusions of that, and the [weather] Group performance in a few moments.
Before that, I would like to share the key messages that we have taken from what has been a more challenging '23 than we have hoped or expected. In short, our story is one of continuing positive demand drivers, but with profit recovery and therefore, reduction in net debt somewhat slower than we had hoped.
Yet 2023 has been a year in which important underlying progress has been made in the context of an evolving and challenging market where Mobico has adapted and acted decisively. The fact that demand and revenue growth remains healthy is certainly encouraging, and we see that continuing as well as delivering a strong new business conversion and healthy margins on ROCE, we're also retaining and successfully mobilizing important contracts that both drive revenues and validate our customer offering.
Nonetheless, financial results have been disappointing. The lag between the time when wage rates are agreed and implemented, and their subsequent recovery through higher prices does have an impact on our results today, albeit those higher costs will be covered. The profile of inflationary pressure, followed by pricing recovery is likely to be similar but somewhat tempered going into 2024.
We will now also absorb higher cost in relation to our German Rail business than we had previously budgeted. In that mixed environment, the actions that we have taken are crucial to progress and to successfully leveraging our strength.
New leadership in North America School Bus and in UK & Germany have already made a notable impact. In both businesses, there is a new ambition and commercial rigor being brought to bear through a much clearer direction and leadership and a stronger and more effective execution. Behind these specific pressures, it is also important to understand that our 3 businesses are at different stages of recovery.
ALSA has produced another record result in its centenary year and is expanding its interest successfully. The team has delivered spectacularly over a number of years. North America is making real progress, having launched its most successful school year start-up for many years, and it's already moving towards another.
Transit and Shuttle have been successfully combined into one operation, whilst also managing to navigate a sharp decline in revenue from a key technology customer, partly by establishing a presence in new segments and geographies. UK Coach has also been encouraging -- also -- having also benefited significantly from rail strikes....
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Mobico Group Plc (NXPGF) Q4 2023 Earnings Call Transcript