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John Allan Chief Executive, Exel plc Highlights Strong operating performance despite tough market conditions -Turnover up 10% 1 -Profit before tax up.

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Presentation on theme: "John Allan Chief Executive, Exel plc Highlights Strong operating performance despite tough market conditions -Turnover up 10% 1 -Profit before tax up."— Presentation transcript:


2 John Allan Chief Executive, Exel plc

3 Highlights Strong operating performance despite tough market conditions -Turnover up 10% 1 -Profit before tax up 13% 1 -Earnings per share up 14% 2 -Free cash flow of £193m Annualised new contract gains exceed £700m Strong second half performance Invested over £110m 3 in acquisitions in 2003 1: at constant exchange rates 2: at constant exchange rates, pre goodwill amortisation, exceptional items and net return on pension schemes 3: excludes acquired debt of £24.4m Review of 2003

4 Good progress gaining new business and reducing contract losses Record contract gains in 2003 Lower percentage of contract losses Good mix between contract logistics and freight management £m 2003 700 Net annualised gains450 (250) Contract Logistics Freight Mgt % turnover9% 210 240 8% 11% £m Annualised gains Annualised losses 2002 625 350 (275) 8% 185 165 8% 7% 2003 2002 Review of 2003

5 Americas - Freight Management8042.6 Asia Pacific - Contract Logistics1053.1 Operating performance by segment Year to 31 December at constant exchange rates Review of 2003 Americas - Contract Logistics82744.5 32% Asia Pacific - Freight Management64534.4 25% UK & Ireland - Contract Logistics1,37735.1 25% Cont. Europe - Freight Management56811.3 8% UK & Ireland - Freight Management2202.9 2% Op Profit £m Turnover £m 1: % of logistics operating profit 2% Cont. Europe - Contract Logistics4126.3 4% 2% Margin trend H1 H2 % Profits 1

6 Cash flow analysis Year to 31 December 2003 0 50 100 150 200 250 300 254.0m Working Capital 3.4m Pensions 42.1m Sirva 26.0m Net Capex 76.4m Tax, Int. and other 49.3m Dividend 68.4m M&A 110.5m Operating profit and depreciation £m Net cash inflow £14.1m Free cash flow £193.0m Review of 2003

7 Spread and Balance of Activities Total logistics by geography and sector * includes Africa & Middle East Geographic BalanceSector Focus Other 4% Consumer 26% Retail 19% Healthcare 5% Technology 22% Chemical 5% Automotive 12% United Kingdom & Ireland 32% Asia Pacific 15% Americas 33% Continental Europe* 20% Industrial 7% Based on 2003 full year information Review of 2003

8 Strategy for growth: building on strong foundations global coverage integrated capability customer focus skilled people consistent processes local strength breadth of solutions supply chain expertise operational excellence Mission To be the preferred supply chain partner to our customers To create new value in the supply chain for our customers, employees and shareholders through consistently superior delivery of innovative business solutions Strategy review

9 Strategic focus Balanced growth across key sectors and regions Priorities Regions Major Asian economies including China Central and Eastern Europe Sectors Non-food retail, particularly in the US Services Seafreight including consolidation services Strategy review

10 Airfreight - European #2 #1 Ireland #1 Hungary #1 The Netherlands #1 Sweden #2 UK #3 Italy #5 Denmark #5 Germany Strategy review

11 Outsourcing trends suggest strong market growth over the medium term Strategy review

12 Exel continues to improve the standard of service Strategy review

13 Exel continues to be recognised as the industry leader on all important measures Strategy review

14 Exels focus on integrated capability is closely aligned with real customer needs Strategy review

15 Contract wins continue to come from a broad spectrum of leading companies including… Americas 150+ new contract logistics gains Particularly good performances in automotive, chemical, consumer, industrial, retail Europe 100+ new contract logistics gains Particularly good performances in retail and consumer Asia Pacific 45+ new contract logistics gains Breakthroughs in automotive and solid growth in consumer, healthcare, retail and technology Strategy review

16 Acquisitions strategy Over the last 18 months Exel has completed 6 major acquisitions totalling nearly £200m Focus has been on developing sector capabilities and strengthening geographic presence CompanySectorMain operations in Power LogisticsConsumer and RetailUS and UK Eagle FreightFreight ManagementSouthern Africa Transbeynak HealthcareTurkey Unidock's HealthcareBrazil CappellettiConsumerItaly Pharma LogisticsHealthcareBelgium, Italy Fujitsu Logistics 1 TechnologyJapan 1 Agreed in principle and not included in the above figures Strategy review

17 Investing in Healthcare Unidocks Total Logistics Company Invested £44m over three years; £28m on acquisitions, £16m in capex Transbeynak Traditional strengths in the US, Europe and Singapore Strategy review

18 Relationships with leading multi-national pharmaceutical customers Integrated logistics services covering inbound, storage, labeling, pick/pack, outbound to final customer Warehouses in São Paulo and Rio de Janeiro Growth of 14% per annum Market share of over 30% in Brazil Key facts Strategy review

19 Belgium Key location in Huizingen Comprises 16,500 m 2 warehouse space Including 550m 2 chilled storage Additional 7,000m 2 warehouse space in Turnhout Typically 300,000 orders per annum Italy Eight operational locations Four in Settala industrial park campus One in Cerro al Lambro One at Peschiera Borromeo Two in Rome – Pomezia and Via Collatina Comprises 60,000m 2 of warehouse space includes 2,000m 2 of chilled storage Typically 800,000 orders per annum Strategy review

20 Growth Sustain strong organic revenue growth Identify and execute strategically sound, sensibly priced acquisitions Customer Relationships Leverage and deepen relationships with key customers globally Underperformers Continue to fix underperforming business units inc. US freight mgt Technology Use technological developments to provide competitive advantage, reduce costs and create value for our customers Talent Attract, retain and develop management talent throughout Exel 2004 management priorities Strategy review


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