Certain financial measures used are not defined under International Financial Reporting Standards (IFRS). Presentation of these Alternative Performance Measures (APMs) provides useful supplementary information which, when viewed in conjunction with the Group’s IFRS financial information, allows for a more meaningful understanding of the underlying financial and operating performance of the Group. These non-IFRS measures should not be considered as an alternative to financial measures as defined under IFRS. Descriptions of the APMs included in this report are disclosed below.
APM | Description | Benefit of APM |
EBITDA | EBITDA represents earnings before interest, tax, depreciation, impairment, amortisation and non-trading items. | Eliminates the effects of financing and accounting decisions to allow assessment of the profitability and performance of the Group. |
EBIT | EBIT represents earnings before interest, tax and non-trading items. | Measures the Group’s earnings from ongoing operations. |
Free cash flow before strategic capital expenditure | Free cash flow comprises operating cash flow less capital expenditure before strategic capital expenditure which comprises expenditure on vessels excluding annual overhaul and repairs, and other assets with an expected economic life of over 10 years which increases capacity or efficiency of operations. | Assesses the availability to the Group of funds for reinvestment or for return to shareholders. |
Net debt | Net debt comprises total borrowings plus lease liabilities less cash and cash equivalents. | Measures the Group’s ability to repay its debts if they were to fall due immediately. |
Adjusted Basic Earnings Per Share (EPS) | EPS is adjusted to exclude the non- trading items and net interest (income) / cost on defined benefit obligations. | Directors consider Adjusted Basic EPS to be a key indicator of long-term financial performance and value creation of a public listed company. |
ROACE | ROACE represents return on average capital employed. Operating profit (before non-trading items) expressed as a percentage of average capital employed (consolidated net assets, excluding net (debt) / cash, retirement benefit surplus / (obligation) and asset under construction net of related liabilities. | Measures the Group’s profitability and the efficiency with which its capital is employed. |
Pre-IFRS 16 | Use of the term Pre-IFRS 16 denotes that the APM or IFRS measure has been adjusted to remove the effects of the application of IFRS 16: Leases. | Measurement of covenants for bank facility purposes |
Non-Financial KPI | Description | Benefit of non-financial KPI |
Schedule integrity | Schedule integrity (the number of sailings completed versus scheduled sailings). | Schedule integrity is an important measure for Irish Ferries’ vessels as it reflects the reliability and punctuality of our service. This measure is meaningful to both our passenger and freight customers alike in facilitating them and their cargo to arrive on time at their final destination. |
The following table sets forth the reconciliation from the Group’s operating loss (EBIT) for the financial year to EBITDA, free cash flow and net debt. See note 12 to the Consolidated Financial Statements for the calculation of Basic and Adjusted Basic EPS.
Cash Flow | 2021 | 2020 |
Operating loss (EBIT) | (0.2) | (10.4) |
Non-trading items (note 10) | - | 11.2 |
Net depreciation, impairment and amortisation (note 9) | 52.5 | 41.3 |
EBITDA | 52.3 | 42.1 |
Working capital movements (note 34) | 11.7 | 10.6 |
Pension service costs less payments (note 34) | 0.6 | (1.1) |
Share based payments expense | 0.3 | 0.2 |
Other | 1.1 | (0.6) |
Cash generated from operations | 66.0 | 51.2 |
Interest paid | (8.4) | (3.7) |
Tax paid | (0.8) | (1.4) |
Maintenance capital expenditure | (13.5) | (10.8) |
Free cash flow before strategic capital expenditure | 43.3 | 35.3 |
Strategic capital expenditure | (41.7) | (19.3) |
Repayment of vessel contract deposit | - | 33.0 |
Free cash flow after strategic capital expenditure | 1.6 | 49.0 |
Proceeds on disposal of property, plant and equipment | 2.8 | 4.9 |
Buyback of equity | (19.8) | (1.7) |
Proceeds on issue of ordinary share capital | 0.7 | 0.2 |
Net cash flows | (14.7) | 52.4 |
Opening net debt | (88.5) | (129.0) |
Recognition of right-of-use asset lease obligations | (38.5) | (12.5) |
Translation / other | (0.5) | 0.6 |
Closing net debt | (142.2) | (88.5) |
The following table sets forth the reconciliation from the Group’s ROACE calculation:
ROACE | 2021 | 2020 |
Equity | 249.7 | 265.9 |
Net debt | 142.2 | 88.5 |
Asset under construction (including prepayment deposits) | (9.2) | (3.3) |
Retirement benefit obligations | 1.4 | 2.2 |
384.1 | 353.3 | |
Retirement benefit surplus | (6.7) | (1.0) |
Capital employed | 377.4 | 352.3 |
Average capital employed | 364.9 | 358.3 |
Operating (loss) / profit (before non-trading items) | (0.2) | 0.8 |
ROACE | (0.1%) | 0.2% |
The following table provides a reconciliation of the Group’s net debt position:
Net debt | 2021 | 2020 |
Cash and cash equivalents (note 19) | 38.5 | 150.4 |
Non-current borrowings (note 22) | (115.8) | (113.1) |
Current borrowings (note 22) | (7.3) | (87.3) |
Non-current lease obligations (note 23) | (37.5) | (27.8) |
Current lease obligations (note 23) | (20.1) | (10.7) |
Net debt | (142.2) | (88.5) |
The calculation and performance of KPIs and a summary of the key financial results for the year is set out in the table below. A detailed review of the divisional operations is set out in the Strategic Report on pages 24 to 34.
Ferries | Container & Terminal | Inter- Segment | Group | ||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||
Comment | €m | €m | €m | €m | €m | €m | €m | €m | |
Revenue | 175.5 | 141.4 | 174.0 | 146.5 | (15.0) | (10.8) | 334.5 | 277.1 | |
EBITDA | 1 | 23.2 | 22.3 | 29.1 | 19.8 | - | - | 52.3 | 42.1 |
Depreciation, impairment and amortisation | (40.6) | (34.6) | (11.9) | (6.7) | - | - | (52.5) | (41.3) | |
Operating (loss) / profit (EBIT) | 2 | (17.4) | (12.3) | 17.2 | 13.1 | - | - | (0.2) | 0.8 |
Non-trading item (note 10) | - | (11.2) | - | - | - | - | - | (11.2) | |
Finance costs (note 7) | (2.0) | (6.4) | (2.0) | (1.4) | - | - | (4.0) | (7.8) | |
Finance income (note 6) | - | 0.2 | 0.1 | - | - | - | 0.1 | 0.2 | |
(Loss) / profit before tax | (19.4) | (29.7) | 15.3 | 11.7 | - | - | (4.1) | (18.0) | |
ROACE | 3 | (5.9)% | (4.2)% | 25.5% | 21.0% | (0.1)% | 0.2% | ||
EPS: (note 12) | |||||||||
EPS Basic | 4 | (2.6)c | (10.2)c | ||||||
EPS Adjusted Basic | 4 | (2.7)c | (4.3)c | ||||||
Free cash flow | 5 | 43.3 | 35.3 | ||||||
Comment:
Financial KPIs
- EBITDA: Group EBITDA for the year increased by 24.2%, to €52.3 million (2020: €42.1 million). The increase in underlying EBITDA was primarily due to due to increased revenues and a continued focus on cost optimisation. EBITDA in the Ferries Division increased by 4.0%, to €23.2 million, while the Container and Terminal Division increased by 47.0%, to €29.1 million.
- EBIT: Group EBIT (pre non-trading items) for the year decreased to €(0.2) million (2020: €0.8 million). The Ferries Division decrease in underlying EBIT was 41.5%, primarily due to the set-up costs on the Dover – Calais route, while the Container and Terminal Division was 31.3% higher, as a result of higher volumes and revenues. Group EBIT including non-trading items increased to €(0.2) million (2020: €(10.4) million). The non-trading item in the prior period relates to the transfer of pension liabilities to a third-party insurer.
- ROACE: The Group achieved a return on average capital employed of (0.1)% (2020: 0.2%). The Ferries Division achieved a return on average capital employed of (5.9)% (2020: (4.2)%) while the Container and Terminal Division achieved 25.5% (2020: 21.0%).
- EPS: Basic EPS was (2.6) cent compared with (10.2) cent in 2020. Adjusted Basic EPS (before non-trading items and the net interest (income) / cost on defined benefit obligations) was (2.7) cent compared with (4.3) cent in 2020.
- Free cash flow before strategic capital expenditure: The Group’s free cash flow before strategic capital expenditure was €43.3 million (2020: €35.3 million). The increase in free cash flow is mainly due to the increase in EBITDA. Free cash flow before strategic capital expenditure is a meaningful measure of cash generated for investment or return to shareholders.
Non-Financial KPIs
Schedule integrity: The Ferries Division delivered 96% of scheduled sailings compared with 98% in the previous year across all services.