Key Performance Indicators and Summary of 2022 Results

The Group uses a set of headline Key Performance Indicators (KPIs) to measure the performance of its operations and of the Group as a whole which are set out and defined below.

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.

Leverage

The debt leverage ratio is calculated per the terms of our lending agreement and is calculated as bank debt, excluding lease liabilities, expressed as times EBITDA. The calculation is set out at note 21 to the Financial Statements.

Provides an indication of the Group’s borrowing capacity.

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 profit (EBIT) for the financial year to EBITDA, free cash flow and net debt. See note 11 to the Consolidated Financial Statements for the calculation of Basic and Adjusted Basic EPS.

Cash Flow

2022
€m

2021
€m

Operating profit / (loss) (EBIT)

66.7

(0.2)

Depreciation and amortisation (note 9)

60.5

52.5

EBITDA

127.2

52.3

Working capital movements (note 33)

1.2

11.7

Retirement benefit scheme movements (note 33)

1.1

0.6

Share-based payments expense (note 30)

3.0

1.3

Other

(0.5)

1.1

Cash generated from operations

132.0

67.0

Interest paid

(4.0)

(8.4)

Tax paid

(1.7)

(0.8)

Maintenance capital expenditure

(18.3)

(13.5)

Free cash flow before strategic capital expenditure

108.0

44.3

Strategic capital expenditure

(57.4)

(41.7)

Free cash flow after strategic capital expenditure

50.6

2.6

Proceeds on disposal of property, plant and equipment

3.0

2.8

Share buybacks

(49.2)

(19.8)

Dividends paid

(24.2)

-

Settlement of employee equity plans through market purchases

(2.9)

(1.0)

Proceeds on issue of ordinary share capital

0.1

0.7

Net cash flows

(22.6)

(14.7)

Opening net debt

(142.2)

(88.5)

Recognition of right-of-use asset lease obligations

(6.2)

(38.5)

Translation / other

(0.1)

(0.5)

Closing net debt

(171.1)

(142.2)

The following table sets forth the reconciliation from the Group’s ROACE calculation:

ROACE

2022
€m

2021
€m

Equity

260.8

249.7

Net debt

171.1

142.2

Asset under construction (including prepayment deposits)

(14.1)

(9.2)

Retirement benefit obligations

0.4

1.4

 

418.2

384.1

Retirement benefit surplus

(33.6)

(6.7)

Capital employed

384.6

377.4

Average capital employed

381.0

364.9

Operating profit / (loss)

66.7

(0.2)

ROACE

17.5%

(0.1%)

The following table provides a reconciliation of the Group’s net debt position:

Net debt

2022
€m

2021
€m

Cash and cash equivalents (note 18)

39.0

38.5

Non-current borrowings (note 21)

(160.4)

(115.8)

Current borrowings (note 21)

(7.3)

(7.3)

Non-current lease obligations (note 22)

(30.7)

(37.5)

Current lease obligations (note 22)

(11.7)

(20.1)

Net debt

(171.1)

(142.2)

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 22 to 30.

 

 

Ferries

Container & Terminal

Inter- Segment

Group

2022

2021

2022

2021

2022

2021

2022

2021

 

Comment

€m

€m

€m

€m

€m

€m

€m

€m

Revenue

 

399.9

175.5

221.5

174.0

(36.5)

(15.0)

584.9

334.5

EBITDA

1

95.7

23.2

31.5

29.1

-

-

127.2

52.3

Depreciation and amortisation

 

(49.3)

(40.6)

(11.2)

(11.9)

-

-

(60.5)

(52.5)

Operating profit / (loss) (EBIT)

2

46.4

(17.4)

20.3

17.2

-

-

66.7

(0.2)

Finance costs (note 7)

 

(3.1)

(2.0)

(1.2)

(2.0)

-

-

(4.3)

(4.0)

Finance income (note 6)

 

0.1

-

-

0.1

-

-

0.1

0.1

Profit / (loss) before tax

 

43.4

(19.4)

19.1

15.3

-

-

62.5

(4.1)

 

 

 

 

 

 

 

 

 

 

ROACE

3

14.9%

(5.9)%

29.3%

25.5%

 

 

17.5%

(0.1)%

EPS: (note 11)

 

 

 

 

 

 

 

 

 

EPS Basic

4

 

 

 

 

 

 

33.6

(2.6)c

EPS Adjusted Basic

4

 

 

 

 

 

 

33.6

(2.7)c

Free cash flow

5

 

 

 

 

 

 

108.0

44.3

Comment:

Financial KPIs

  1. EBITDA: Group EBITDA for the year increased by 143.2%, to €127.2 million (2021: €52.3 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 312.5%, to €95.7 million, while the Container and Terminal Division increased by 8.2%, to €31.5 million.
  2. EBIT: Group EBIT for the year increased to €66.7 million (2021: €(0.2) million). The Ferries Division increase in underlying EBIT was €63.8 million, primarily due to a full year of trading without Covid-19 restrictions, while the Container and Terminal Division was €3.1 million higher, as a result of higher revenues.
  3. ROACE: The Group achieved a return on average capital employed of 17.5% (2021: (0.1)%). The Ferries Division achieved a return on average capital employed of 14.9% (2021: (5.9)%) while the Container and Terminal Division achieved 29.3% (2021: 25.5%).
  4. EPS: Basic EPS was 33.6 cent compared with (2.6) cent in 2021. Adjusted Basic EPS (before net interest (income) / cost on defined benefit obligations) was 33.6 cent compared with (2.7) cent in 2021.
  5. Free cash flow before strategic capital expenditure: The Group’s free cash flow before strategic capital expenditure was €108.0 million (2021: €44.3 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 across all services during 2022 (2021: 96%).