AA Full Year Results. Year Ended 31 st January th May Date

Transcription

1 AA Full Year Results Year Ended 31 st January 2014 Date 27 th May

2 Forward looking statements This document contains various forward-looking statements that reflect management s current views with respect to future events and anticipated financial and operational performance. Forward-looking statements as a general matter are all statements other than statements as to historical facts or present facts or circumstances. The words aim, anticipate, assume, believe, contemplate, continue, could, estimate, expect, forecast, intend, likely, may, might, plan, positioned, potential, predict, project, remain, should, will or would, or, in each case, their negative, or similar expressions, identify certain of these forward-looking statements. Other forward-looking statements can be identified in the context in which the statements are made.; By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance and that the Company s actual financial condition, results of operations and cash flows, and the development of the industry in which it operates, may differ materially from (and be more negative than) those made in, or suggested by, the forward-looking statements contained in this document. In addition, even if its financial condition, results of operations and cash flows and the development of the industry in which we operate are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in subsequent periods. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that they will materialise or prove to be correct. Because these forward-looking statements are based on assumptions or estimates and are subject to risks and uncertainties, the actual results or outcome could differ materially from those set out in the forward-looking statements. These forward-looking statements speak only as of the date of this document. We expressly undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law or regulation. Accordingly, prospective investors are cautioned not to place undue reliance on any of the forward-looking statements herein. In addition, all subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements referred to above. 2

3 We ve demonstrated a strong trading performance through Q4 and for the full year in-line with our business plan Trading EBITDA of 115.0m (up 5.9%) in Q4 and 422.8m (up 7.1%) for the year EBITDA growth driven by Roadside Assistance, supported by AA wide cost efficiency 88% of revenues from repeat business in the year Trading EBITDA margins of 46.8% (up 320 bps) in Q4 and 43.4% (up 260 bps) for the year Solid operating cash flow of 78.0m in the quarter and 397.4m for the year Cash conversion of 68% in the quarter reflects seasonal working capital outflow Cash conversion for the year was 94% of Trading EBITDA - up year-on-year 3

4 Strong deleveraging since the refinancing, substantial liquidity and covenant headroom Leverage of 6.9x (Q1PF: 7.6x) and 5.3x (Q1PF: 5.9x) for total* and senior net debt Pro forma Class A FCF DSCR of 3.3 times at year end (covenant trigger of 1.35 times) Pro forma Class B FCF DSCR of 2.2 times - substantial covenant headroom WBS cash of 144.7m as at 31 January 2014, 140m of working capital facility undrawn * Total debt excludes Senior PIK Toggle Note outside WBS structure. 4

5 Trading performance has continued in-line with plan through the fourth quarter million Q4 14 Q4 13 FY 14 FY 13 Turnover Trading EBITDA Trading EBITDA margin (%) 46.9% 43.1% 43.4% 40.6% Cash inflow from operating activities before tax Cash conversion (%) 62.6% 49.7% 93.9% 89.4% 5

6 We ve demonstrated strong deleveraging since the refinancing and carry substantial covenant headroom 31 January 2014 Net debt ( m) 2,918.3 Net senior secured debt ( m) 2,243.3 Net cash ( m) Q1 pro forma Net debt to EBITDA ratio 6.9x 7.6x Net senior secured debt to EBITDA ratio 5.3x 5.9x Covenant Pro forma Class A free cash flow : debt service x Pro forma Class B free cash flow : debt service x 6

7 Recent highlights and business developments Chris Jansen appointed CEO in January 2014 Deleveraging agenda in-line with refinancing plan Voted the UK s most trusted brand - Y&R s Brand Asset Valuator survey 2014 New business wins confirmed: VW Group, Hyundai and Porsche Successful retention of LBG and Ford contracts Membership and Insurance retention performance strengthening into Q

8 Financing activity completed in May m Class A4 bonds issued; coupon 3.78%, expected maturity 31 July m New Senior Term Facility: Expires on 31 January 2019 Pricing of LIBOR plus 200bps (175bps if >BBB-) Absolute cash lock-up removed Cash pay PIK interest <5.5x Net Senior Leverage, general distributions <5.0x Class B trigger of <6.5x Gross WBS leverage still applies 25% cash sweep based on FY 15 and FY 16 excess cash flow; nil thereafter Working capital pricing aligned at LIBOR plus 200bps (175bps if >BBB-) 8

9 We have moved our reporting to IFRS to come in-line with most publically listed bond issuers Financial statements now converted to IFRS No change in Trading EBITDA or Trading Revenue Accounts provide reconciliation to UKGAAP Impact on covenants has been calculated and is less than 3% No change to covenant calculations 9

10 Summing up Strong financial performance for Q4 and the full year Business fundamentals are strong; retention, margins, cash flow, deleveraging New leadership creating business momentum Bank debt refinanced on improved terms for five years Strong interest from bond investors for A4 bond issuance Thank you for your support 10