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MacBook Pro National Express Group is a leading public transport operator with bus, coach and rail services in the UK, Continental Europe, North Africa, North America and the Middle East Our Vision Our Vision is to earn the lifetime loyalty of our customers by consistently delivering frequent, high performing public transport services which offer excellent value. Read more p18 Our Values Excellence We constantly strive to be excellent in all that we do Safety We only do what is safe and stop any unsafe behaviour Community We are active in the communities we serve to generate economic, social and environmental value Customers We place them at the heart of our business and relentlessly meet their expectations Visit our Group website to read our latest news, access investor information and find out more about how we operate. www.nationalexpressgroup.com People We develop the talents, reward the exceptional performance and respect the rights of all our employees Unless otherwise stated, all operating profit, operating 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: IFRS result found in the third column, excluding 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. Underlying revenue compares the current year with the prior year on a consistent basis, after adjusting for the impact of currency. In UK Bus, commercial revenue is that from fare-paying customers and excludes concessions and contracted services. In UK Coach, core express revenue is that from the scheduled National Express network. Constant currency basis compares the current year’s results with the prior year’s results translated at the current year’s exchange rate. Operating margin is the ratio of normalised operating profit to revenue. ‘Return on capital employed’ (‘ROCE’) is normalised operating profit divided by tangible and intangible assets. ‘Return on assets’ (‘ROA’) is normalised operating profit divided by tangible assets. Operating cash flow is the cash flow equivalent of normalised operating profit. Free cash flow is the cash flow equivalent of normalised profit after tax. A reconciliation is set out in the table within the Group Finance Director’s review. EBITDA is ‘Earnings Before Interest, Tax, Depreciation and Amortisation’. It is calculated by taking normalised operating profit and adding depreciation, fixed asset grant amortisation, normalised profit on disposal of non-current assets and share-based payments. Net debt is defined as cash and cash equivalents (cash overnight deposits and other short-term deposits) and other debt receivables, offset by borrowings (loan notes, bank loans and finance lease obligations) and other debt payable (excluding accrued interest). Gearing ratio is the ratio of net debt to EBITDA over the last 12 months, including any pre-acquisition EBITDA generated in that 12-month period by businesses acquired by the Group during the period. The annual punctuality measure for c2c is the moving annual average (‘MAA’) public performance measure (‘PPM’) to 6 February 2016. Safety Incidents measure those for which the Group is responsible and is based on the Fatalities and Weighted Injuries index used in the UK rail industry. Earnings per share (‘EPS’) is the profit for the year attributable to shareholders, divided by the weighted average number of shares in issue, excluding those held in the Employee Benefit Trust which are treated as cancelled.
Strong financial performance Front cover One of our new German trains departs Cologne station – a key destination for our new rail services. Read more about them on page 48–49 Group revenue increased by 3.8% to £1.92 billion on a constant currency basis; up 2.8% on a reported basis (2014: £1.87bn) Group normalised operating profit up 15.5% to £193.5 million (2014: £167.6m*) Group normalised profit before tax rose by 25.2% to £150.1 million (2014: £119.9m*) Statutory Group profit before tax grew by 87.1% to £124.4 million (2014: £66.5m) with no exceptional costs in 2015 Group ROCE increased to 11.7% (2014: 10.7%*) Year-on-year normalised EPS growth of 23.8% to 23.4 pence (2014: 18.9p*) Free cash flow of £111.0 million, £11.0 million ahead of target (2014: £164.8m) Net debt increased by £81.2 million to £745.5 million, reflecting £105.8 million spent on acquisitions and growth capital expenditure Full year proposed dividend of 11.33 pence, up 10% year-on-year (2014: 10.3p) STRATEGIC REPORT CORPORATE GOVERNANCE Strategic Report 1 Financial highlights 2 National Express Group at a glance 4 Chairman’s letter 5 Investment case 6 Market overview 8 Group Chief Executive’s review 14 Our business model and strategy 16 Our strategy at a glance 18 Managing our resources and relationships 26 Key performance indicators 28 Risk and risk management 30 Principal risks and uncertainties 32 Group Finance Director’s review 38 Spain and Morocco 40 North America 42 UK Bus 44 UK Coach 46 Rail Corporate Governance 50 Chairman’s introduction to governance 52 Governance in practice 54 Board of Directors 56 Governance Report 64 Audit Committee Report 68 Nomination Committee Report 70 Safety & Environment Committee Report 72 Directors’ Remuneration Report 83 Annual Report on Remuneration 96 Other statutory information 100 Directors’ responsibilities statement Financial Statements 101 Independent Auditor’s Report 106 Group Income Statement 107 Group Statement of Comprehensive Income 108 Group Balance Sheet 109 Group Statement of Changes in Equity 110 Group Statement of Cash Flows 111 Notes to the Consolidated Accounts 172 Company Balance Sheet 173 Notes to the Company Accounts Additional Information 186 Shareholder information 187 Dividends and financial calendar 188 Glossary 190 Five Year Summary 191 Corporate information Group revenue (£m) £1,919.8m Free cash flow* (£m) £111.0m 2013 1,891.3 2013 2014 1,867.4 2014 2015 1,919.8 2015 111.0 ROCE* (%) 11.7% Operating profit* (£m) £193.5m 167.1 164.8 2013 10.8 2013 177.2 2014 10.7 2014 167.6 2015 11.7 2015 193.5 Dividend per share (p) 11.33p 2013 2014 10.0 10.3 11.33 Operating margin* (%) 10.1% 9.4 9.0 2015 2015 10.1 * Historical results restated to adjust for the impact of Rail and Middle East bid costs previously treated as exceptional items. Summary of results 2015 2013 2014 Normalised basis 2015 £m 2014 £m 2015 £m IFRS basis Revenue 1,919.8 1,867.4 1,919.8 1,867.4 Operating profit 193.5 167.6 167.8 114.2 Profit before tax 150.1 119.9 124.4 66.5 Profit for the year 121.6 98.1 109.1 60.6 Basic earnings per share (pence) 23.4 18.9 20.9 11.6 Net debt 745.5 664.3 745.5 664.3 2014 £m FINANCIAL STATEMENTS ADDITIONAL INFORMATION www.nationalexpressgroup.com 1
Page 1: National Express… Cologne to Cali
Page 5 and 6: STRATEGIC REPORT UK: Bus • Nation
Page 7 and 8: Investment case A sound investment
Page 9 and 10: Here we put each of our markets int
Page 11 and 12: esults and are no longer taken as e
Page 13 and 14: As I have already mentioned, safety
Page 15 and 16: efinement of our competitive streng
Page 17 and 18: 1 We serve our customers The custom
Page 19 and 20: There are a number of KPIs which he
Page 21 and 22: Safety is the first agenda item on
Page 23 and 24: feedback from the staff who have be
Page 25 and 26: STRATEGIC REPORT CORPORATE GOVERNAN
Page 27 and 28: Driving excellence One of our key g
Page 29 and 30: STRATEGIC REPORT Safety - Fatalitie
Page 31 and 32: STRATEGIC REPORT During 2015 the Gr
Page 33 and 34: Risks Assessment Management Potenti
Page 35 and 36: Profit bridge £m % change 2014 nor
Page 37 and 38: IFRS results Intangible amortisatio
Page 39 and 40: We pursue a cautious approach to ou
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Page 43 and 44: improved wage packages in highly co
Page 45 and 46: Entitlement Cards. In line with our
Page 47 and 48: Cash and returns The UK Coach busin
Page 49 and 50: In December 2015 we saw a successfu
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Annual General Meeting This year we
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People - a great place to work Jane
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7. Chris Muntwyler Independent Non-
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Senior Independent Director Lee San
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Board activity throughout 2015 (exc
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Diversity, in its wider sense, is p
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During the year shareholders are ke
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Qualifications of Audit Committee m
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During 2015, a carefully targeted i
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Role and responsibilities The prima
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The Committee’s terms of referenc
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At a glance Introduction In this se
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STRATEGIC REPORT In particular, the
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STRATEGIC REPORT Maximum potential
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STRATEGIC REPORT Maximum potential
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Executive Directors’ termination
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Corporate Governance - Directors’
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Performance-related bonus A summary
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Matthew Ashley Objective Safety •
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Indicative percentage of LTIP award
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Changes since year end There have b
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Statement of implementation of Remu
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Appendix LTIP Awards to Executive D
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ability to act in accordance with h
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The Company is not aware of any oth
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Financial Statements Independent au
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Tax provisions We used our tax spec
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Corporate Governance Statement Our
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Group Statement of of Comprehensive
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Group Statement of of Changes in in
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Dividends and financial calendar Fi
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Normalised earnings per share Norma
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Corporate information STRATEGIC REP
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National Express Group PLC National
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