Full Year Results for 2002 - Part 2
March 10 2003 - 2:01AM
UK Regulatory
Group profit and loss account
For the year ended 31 December 2002
2002 2001
Note �m �m
Turnover
Continuing operations 4,639.0 4,433.9
Acquisitions 48.8 -
4,687.8 4,433.9
Discontinued operations 32.8 106.0
Group and share of joint ventures' turnover 4 4,720.6 4,539.9
Less: share of joint ventures' turnover (77.6) (32.7)
Group turnover 4,643.0 4,507.2
Operating profit
Continuing operations 184.6 186.2
Acquisitions 3.7 -
188.3 186.2
Discontinued operations - (2.5)
Group operating profit 188.3 183.7
Share of operating profit of joint ventures, continuing 4.0 1.9
operations
Share of operating profit of associated undertakings, 0.2 1.8
continuing operations
Continuing operations before goodwill 218.1 210.2
Discontinued operations before goodwill - (2.5)
Goodwill amortisation (25.6) (20.3)
Total operating profit 4 192.5 187.4
Profit on disposals of fixed assets in continuing 5 0.9 8.6
operations
Loss on termination and disposals of discontinued 5 (9.0) (10.7)
operations
Less 2001 provision 5 9.0 -
Provision for loss on operations to be discontinued 5 - (10.2)
Costs of reorganisation in continuing operations 5 - (15.0)
Amounts written off investments in continuing operations 5 - (10.7)
Profit on ordinary activities before interest 193.4 149.4
Net interest (12.8) (21.1)
Profit before tax, goodwill and exceptional items 205.3 186.6
Goodwill amortisation (25.6) (20.3)
Exceptional items 0.9 (38.0)
Profit on ordinary activities before taxation 180.6 128.3
Tax on profit on ordinary activities 6 (57.4) (53.1)
Profit on ordinary activities after taxation 123.2 75.2
Equity minority interests (6.4) (7.8)
Profit for the financial year 116.8 67.4
Dividends (67.5) (62.5)
Transferred to reserves 49.3 4.9
EBITDA before exceptional items 7 318.3 304.2
2002 2001
pence Pence
Basic earnings per share 8 39.5 22.9
Basic earnings per share before goodwill and exceptional 8 47.2 41.4
items
Diluted earnings per share 8 39.3 22.8
Diluted earnings per share before goodwill and exceptional 8 46.9 41.2
items
Group statement of total recognised gains and losses
For the year ended 31 December 2002
2002 2001
�m �m
Profit for the financial year
Group 113.9 65.8
Share of joint ventures 2.9 1.6
116.8 67.4
Exchange differences
Translation of overseas net investments (64.6) (1.3)
Foreign currency hedges 52.0 3.7
UK tax on exchange differences - (0.3)
Total recognised gains and losses relating to the year 104.2 69.5
Prior year adjustment - FRS 19 17.8
Total gains and losses recognised since last annual report 122.0
Movements in shareholders' funds
For the year ended 31 December 2002
2002 2001
�m �m
Profit for the financial year 116.8 67.4
Dividends (67.5) (62.5)
49.3 4.9
Shares allotted 1.6 1.2
Goodwill released on disposals - 17.3
Exchange differences (12.6) 2.4
Tax on exchange differences - (0.3)
Movements in shareholders' funds 38.3 25.5
At 1 January (originally �842.5m before adding prior year 860.3 834.8
adjustment of �17.8m)
Shareholders' funds at 31 December 898.6 860.3
Group cash flow statement
For the year ended 31 December 2002
2002 2001
�m �m �m �m
Net cash inflow from operating activities 333.7 271.8
Dividends received from joint ventures 2.8 2.0
and associates
Net cash outflow for returns on investments (19.1) (32.1)
and servicing of finance
Taxation (34.2) (35.4)
Capital expenditure and financial
investment
Purchase of tangible fixed assets (136.5) (123.6)
Purchase of investments (0.5) -
Receipt from joint venture on sale of fixed - 1.0
assets
Sale of tangible fixed assets 30.1 52.3
Sale of own shares 1.5 4.3
Net cash outflow for capital expenditure (105.4) (66.0)
and financial investment
Free cash flow 177.8 140.3
Acquisitions and disposals
Purchase of businesses (71.4) (116.7)
Sale of businesses - 12.5
Net cash outflow for acquisitions and (71.4) (104.2)
disposals
Equity dividends paid (64.5) (61.6)
Net cash inflow/(outflow) before the use
of liquid
Resources and financing 41.9 (25.5)
Net cash (outflow)/inflow from management
of liquid resources
Current asset investments (14.0) 10.3
Net cash inflow/(outflow) from 19.0 (44.1)
financing
Increase/(decrease) in cash 46.9 (59.3)
Reconciliation of operating profit to operating cash flow
For the year ended 31 December 2002
2002 2001
�m �m
Group operating profit 188.3 183.7
Depreciation 100.5 96.5
Amortisation of goodwill 25.6 20.3
Amortisation of fixed asset investments (0.3) -
Profit on sale of tangible fixed assets 2.3 (3.3)
Movement in pension prepayments (36.5) (34.9)
Movements in provisions 6.2 (0.8)
Movements in working capital 55.8 27.9
341.9 289.4
Costs of reorganisation in continuing operations (8.2) (17.6)
Net cash inflow from operating activities 333.7 271.8
Reconciliation of net cash flow to movement in net debt
For the year ended 31 December 2002
2002 2001
�m �m
Increase/(decrease) in cash 46.9 (59.3)
Cash outflow from change in debt 19.6 44.9
Cash outflow/(inflow) from change in liquid resources 14.0 (10.3)
Change in net funds resulting from cash flows 80.5 (24.7)
Arising on acquisitions (1.6) (10.2)
Released on disposals - 0.1
New leases (2.4) (1.3)
Other non-cash movements 3.3 -
Exchange differences (13.7) (7.8)
Movement in net debt 66.1 (43.9)
Net debt at 1 January (219.8) (175.9)
Net debt at 31 December (153.7) (219.8)
At 31 December 2002 2002 2001
Analysis of net debt �m �m
Cash at bank and in hand 149.7 128.5
Overdrafts (24.5) (25.6)
Loans (280.1) (306.8)
Finance leases (19.6) (23.4)
Current asset investments 20.8 7.5
(153.7) (219.8)
Group balance sheet
As at 31 December 2002
2002 2001 (restated)
�m �m �m �m
Fixed assets
Intangible assets - goodwill 415.8 389.8
Tangible assets 576.2 569.0
Investments
Investment in joint ventures
Share of gross assets 21.6 13.2
Share of gross liabilities (16.4) (10.3)
5.2 2.9
Other investments 26.4 31.1
Own shares 17.6 18.3
49.2 52.3
1,041.2 1,011.1
Current assets
Stocks 9.2 13.9
Debtors
Amounts falling due within one 874.8 896.5
year
Amounts falling due after more than one 378.6 343.3
year
1,253.4 1,239.8
Current asset investments 20.8 7.5
Cash at bank and in hand 149.7 128.5
1,433.1 1,389.7
Creditors: amounts falling due within one (1,058.9) (979.6)
year
Net current assets 374.2 410.1
Total assets less current 1,415.4 1,421.2
liabilities
Creditors: amounts falling due after more (281.7) (332.4)
than one year
Provisions for liabilities and (218.3) (211.6)
charges
915.4 877.2
Capital and reserves
Called up share capital 82.8 82.7
Share premium account 52.5 51.0
Other reserves
Merger reserve 50.7 50.7
Capital redemption reserve 103.5 103.5
154.2 154.2
Profit and loss account 609.1 572.4
Equity shareholders' funds 898.6 860.3
Equity minority interests 16.8 16.9
915.4 877.2
Notes to the preliminary announcement
Accounting policies
This preliminary announcement has been prepared on the basis of the accounting
policies set out in the 2001 financial statements of Exel plc, except for the
adoption of FRS 19 'Deferred tax'. The phased transitional disclosure
requirements of FRS 17 'Retirement benefits' will be included in the Group's
statutory financial statements.
The impact of adopting FRS 19 has been to increase deferred tax assets within
debtors: amounts falling due after more than one year by �13.4m, decrease
provisions for liabilities and charges by �4.4m, and increase reserves by �
17.8m at 1 January 2001 as prior year adjustments. The impact of this change
in accounting policy on tax on profit on ordinary activities for both the
current and previous year was immaterial.
Statutory group accounts
This preliminary announcement, which was approved by the Board on 7 March 2003,
is not the Group's statutory financial statements. The Auditors' report on the
2002 statutory group financial statements is unqualified and does not include a
statement under sections 237 (2) or (3) of the Companies Act 1985.
Statutory group financial statements for Exel plc for the year ended 31
December 2001, on which the Auditors gave an unqualified report (which made no
statement under sections 237 (2) or (3) of the Companies Act 1985), have been
filed with the Registrar of Companies.
Exchange rates
The significant exchange rates relative to � sterling used in the preparation
of these financial statements are as follows:
Average rate Year end rate
2002 2001 2002 2001
US dollar 1.50 1.44 1.60 1.45
Euro 1.59 1.62 1.54 1.64
Singapore dollar 2.69 2.59 2.78 2.69
Notes to the preliminary announcement (continued)
Segmental information
Analysis of change in turnover
2001 Exchange New Increment Restatements Organic change 2002
acquisitions
on 2001 and movement
in
Acquisitions discontinued
operations
�m �m �m �m �m �m % �m
Logistics
Europe,
Middle East
& Africa
UK & Ireland - 1,168.0 0.7 - - - 51.0 4.4 % 1,219.7
CL
- 256.6 0.3 - 1.9 - (35.2) (13.7) % 223.6
FM
1,424.6 1.0 - 1.9 - 15.8 1.1 % 1,443.3
Continental
Europe
& Africa - 338.6 3.8 - 0.6 - (1.1) (0.3) % 341.9
CL
- 434.8 4.6 - 11.3 - 21.5 4.9 % 472.2
FM
773.4 8.4 - 11.9 - 20.4 2.6 % 814.1
Total Europe,
Middle
East & Africa - 1,506.6 4.5 - 0.6 - 49.9 3.3 % 1,561.6
CL
- 691.4 4.9 - 13.2 - (13.7) (2.0) % 695.8
FM
2,198.0 9.4 - 13.8 - 36.2 1.6 % 2,257.4
Americas - 658.2 (29.4) 22.5 - - 56.1 8.9 % 707.4
CL
- 921.5 (37.0) 0.6 25.0 - (6.2) (0.7) % 903.9
FM
1,579.7 (66.4) 23.1 25.0 - 49.9 3.3 % 1,611.3
Asia Pacific - 67.6 0.4 - - 2.2 19.0 27.9 % 89.2
CL
- 485.6 (20.3) 25.7 - 40.8 93.8 20.2 % 625.6
FM
553.2 (19.9) 25.7 - 43.0 112.8 21.2 % 714.8
Total - 2,232.4 (24.5) 22.5 0.6 2.2 125.0 5.7 % 2,358.2
Logistics CL
- 2,098.5 (52.4) 26.3 38.2 40.8 73.9 3.6 % 2,225.3
FM
4,330.9 (76.9) 48.8 38.8 43.0 198.9 4.7 % 4,583.5
Environmental 103.0 - - - - 1.3 1.3 % 104.3
Continuing 4,433.9 (76.9) 48.8 38.8 43.0 200.2 4.6 % 4,687.8
operations
Discontinued 106.0 1.4 - - (74.6) - - 32.8
operations
Total 4,539.9 (75.5) 48.8 38.8 (31.6) 200.2 4.5 % 4,720.6
Turnover between segments is not material.
Description of Exel's segmental analysis
Exel's segmental analysis splits logistics activities between contract
logistics and freight management.
Contract logistics (CL) includes ground-based supply chain management services,
such as integrated warehousing and transportation, just in time services,
sub-assembly and other value added activities.
Freight management (FM) includes airfreight and seafreight forwarding, customs
broking, transportation management (including US road and rail) and specialist
mail and express services.
Due to the comprehensive range of services provided to customers within
individual contracts there are some cross-overs between these two segments but
these are relatively small.
The restatements of Asia Pacific contract logistics and freight management
represent the incremental results of Exel-Sinotrans, following the
reclassification of the Group's investment in the company as a joint venture;
previously Exel-Sinotrans was included in the Group's results as an associated
undertaking. The impact of the restatements on the Group's results is an
increase in turnover of �43.0m. There was no change to the Group's profit for
the financial year due to this reclassification.
Discontinued operations are the German chilled food logistics business which
was closed in 2002, and the German frozen food logistics business which was
sold in 2001.
Notes to the preliminary announcement (continued)
Segmental information (continued)
Analysis of change in operating profit before goodwill
New Increment Movement in
Acquisitions on 2001 discontinued
2001 Exchange 2002 acquisitions Operations Organic 2002
change
�m �m �m �m �m �m % �m
Logistics
Europe, Middle
East
& Africa
UK & Ireland - 56.1 - - - - 3.3 5.9 % 59.4
CL
- 5.8 0.1 - 0.1 - 0.1 1.7 % 6.1
FM
61.9 0.1 - 0.1 - 3.4 5.5 % 65.5
Continental
Europe
& Africa - 8.2 0.2 - 0.2 - (7.9) (94.0) % 0.7
CL
- 6.2 0.1 - 0.4 - 5.5 87.3 % 12.2
FM
14.4 0.3 - 0.6 - (2.4) (16.3) % 12.9
Total Europe,
Middle
East & Africa - 64.3 0.2 - 0.2 - (4.6) (7.1) % 60.1
CL
- 12.0 0.2 - 0.5 - 5.6 45.9 % 18.3
FM
76.3 0.4 - 0.7 - 1.0 1.3 % 78.4
Americas - 37.1 (1.6) 1.5 - - (2.2) (6.2) % 34.8
CL
- 18.6 (1.0) 2.0 0.6 - (2.5) (14.2) % 17.7
FM
55.7 (2.6) 3.5 0.6 - (4.7) (8.9) % 52.5
Asia Pacific - 2.3 0.1 - - - 0.3 12.5 % 2.7
CL
- 26.7 (1.3) 2.0 - - 5.6 22.0 % 33.0
FM
29.0 (1.2) 2.0 - - 5.9 21.2 % 35.7
Total Logistics - 103.7 (1.3) 1.5 0.2 - (6.5) (6.3) % 97.6
CL
- 57.3 (2.1) 4.0 1.1 - 8.7 15.8 % 69.0
FM
161.0 (3.4) 5.5 1.3 - 2.2 1.4 % 166.6
Environmental 14.7 - - - - 0.8 5.4 % 15.5
175.7 (3.4) 5.5 1.3 - 3.0 1.7 182.1
Pensions credit 34.5 - - - - 1.5 4.3 % 36.0
(UK)
Continuing
operations
before goodwill 210.2 (3.4) 5.5 1.3 - 4.5 2.2 % 218.1
Discontinued (2.5) - - - 2.5 - - -
operations
Goodwill (20.3) 0.5 (1.8) (3.0) - (1.0) (5.1) % (25.6)
Total 187.4 (2.9) 3.7 (1.7) 2.5 3.5 1.9 % 192.5
Notes to the preliminary announcement (continued)
Segmental information (continued)
Operating profit Net assets Net assets
after goodwill before goodwill after goodwill
2002 2001 2002 2001 2002 2001
(restated) (restated)
By business �m �m �m �m �m �m
sector
Logistics
Europe,
Middle East &
Africa
UK & Ireland - 59.1 55.9 148.9 187.9 150.2 189.8
CL
- 3.6 3.8 7.9 9.5 36.8 40.7
FM
62.7 59.7 156.8 197.4 187.0 230.5
Continental - (0.6) 8.0 92.6 105.0 96.0 108.7
Europe & CL
Africa
- 10.9 5.3 35.0 38.7 52.9 57.1
FM
10.3 13.3 127.6 143.7 148.9 165.8
Total
Europe,
Middle East
& Africa - 58.5 63.9 241.5 292.9 246.2 298.5
CL
- 14.5 9.1 42.9 48.2 89.7 97.8
FM
73.0 73.0 284.4 341.1 335.9 396.3
Americas - 34.0 37.1 105.3 136.3 163.4 136.3
CL
- 1.5 4.4 55.4 32.7 302.1 318.2
FM
35.5 41.5 160.7 169.0 465.5 454.5
Asia Pacific - 2.1 1.8 6.4 6.7 17.0 16.6
CL
- 32.3 26.3 6.8 16.1 24.0 21.7
FM
34.4 28.1 13.2 22.8 41.0 38.3
Total - 94.6 102.8 353.2 435.9 426.6 451.4
Logistics CL
- 48.3 39.8 105.1 97.0 415.8 437.7
FM
142.9 142.6 458.3 532.9 842.4 889.1
Environmental 13.6 12.8 29.9 18.6 61.6 52.2
156.5 155.4 488.2 551.5 904.0 941.3
Pensions 36.0 34.5 361.0 324.4 361.0 324.4
credit (UK)
Continuing 192.5 189.9 849.2 875.9 1,265.0 1,265.7
operations
before goodwill
Discontinued - (2.5) (5.9) (6.1) (5.9) (6.1)
operations
Goodwill - - 415.8 389.8 - -
Total 192.5 187.4 1,259.1 1,259.6 1,259.1 1,259.6
Non-operating (343.7) (382.4) (343.7) (382.4)
net
liabilities
Net assets 915.4 877.2 915.4 877.2
Net assets by business sector comprise intangible and tangible assets, stocks
and debtors less creditors and provisions. Non-operating net liabilities
comprise other investments, net debt, taxation, dividends and related items.
Notes to the preliminary announcement (continued)
Exceptional items
2002 2001
�m �m
Profit on disposals of fixed assets in continuing operations 0.9 8.6
Loss on termination and disposals of discontinued operations
Loss on termination of German chilled food logistics business (9.0) -
Less 2001 provision 9.0 -
- -
Loss on disposal of German frozen food logistics business
(after
reinstated goodwill of �16.1m) - (23.1)
Allied Pickfords disposal further consideration - 12.3
Profit on disposal of Cory Towage - 2.4
Other disposals (2001: including goodwill �2.7m) - (2.3)
- (10.7)
Provision for loss on operations to be discontinued
German chilled food logistics business - (9.0)
German chilled food logistics business - reinstated goodwill - (1.2)
written off
- (10.2)
Costs of reorganisation in continuing operations - (15.0)
Amounts written off investments in continuing operations
Investment in Allied Worldwide - (10.7)
Total exceptional items 0.9 (38.0)
Tax on profit on ordinary activities
2002 2001
�m �m
UK tax 33.9 28.7
Foreign tax 23.5 24.4
57.4 53.1
The tax charge is analysed as follows:
On ordinary activities before exceptional items 59.5 56.9
On exceptional items (2.1) (3.8)
57.4 53.1
Notes to the preliminary announcement (continued)
Earnings before interest, tax, depreciation and amortisation (EBITDA)
2002 2001
�m �m
Profit on ordinary activities before taxation 180.6 128.3
Add back
Depreciation 100.5 96.5
Amortisation of goodwill 25.6 20.3
Amortisation of fixed asset investments (0.3) -
Exceptional items (0.9) 38.0
Net interest 12.8 21.1
EBITDA before exceptional items 318.3 304.2
Earnings per share
2002 2001
Earnings per Earnings per
share share
Earnings Basic Diluted Earnings Basic Diluted
�m Pence pence �m pence pence
Profit for the financial year 116.8 39.5 39.3 67.4 22.9 22.8
Add back
Amortisation of goodwill 25.6 8.7 8.6 20.3 6.9 6.9
Exceptional items (0.9) (0.3) (0.3) 38.0 12.9 12.8
Tax on exceptional items (2.1) (0.7) (0.7) (3.8) (1.3) (1.3)
Before goodwill and exceptional 139.4 47.2 46.9 121.9 41.4 41.2
items
2002 2001
Weighted average number of shares
(millions)
Basic average number of shares 295.5 294.2
Dilutive potential ordinary 1.7 1.9
shares
Diluted average number of 297.2 296.1
shares
Basic earnings per share of 39.5p (2001: 22.9p) represents the profit
attributable to each share. It is based on the profit attributable to ordinary
shareholders for the financial year of �116.8m (2001: �67.4m) divided by 295.5m
(2001: 294.2m) being the weighted average number of shares in issue during the
year, excluding shares held by the Group in share ownership plan trusts.
Profit on ordinary activities before taxation and earnings per share, both
before goodwill amortisation and exceptional items, are provided in addition to
the earnings per share required by FRS 14 because, in the opinion of the
Directors, they will assist shareholders to consider more readily the
underlying performance trends of the Group.
Notes to the preliminary announcement (continued)
Analysis of net debt
At 1 Acquisitions Non-cash Exchange At 31
Jan Dec
2002 Cash and New movements differences 2002
flow disposals leases
�m �m �m �m �m �m �m
Cash at bank 128.5 47.2 (26.0) 149.7
and in hand
Overdrafts (25.6) (0.3) 1.4 (24.5)
102.9 46.9 (24.6) 125.2
Loans (306.8) 16.0 (1.6) - (0.2) 12.5 (280.1)
Finance (23.4) 3.6 - (2.4) 3.5 (0.9) (19.6)
leases
Current 7.5 14.0 - - - (0.7) 20.8
asset
investments
Total (219.8) 80.5 (1.6) (2.4) 3.3 (13.7) (153.7)
Summary of second half results
2002 2001
�m �m
Turnover
Continuing operations 2,452.9 2,258.8
Discontinued operations 5.9 54.8
2,458.8 2,313.6
Total operating profit
Continuing operations before goodwill and exceptional items 110.6 107.3
Discontinued operations before goodwill and exceptional - (1.2)
items
Goodwill amortisation (13.8) (11.1)
96.8 95.0
Exceptional items 0.1 (36.4)
Net interest (5.6) (8.1)
Profit before tax, goodwill and exceptional items 105.0 98.0
Goodwill amortisation (13.8) (11.1)
Exceptional items 0.1 (36.4)
Profit on ordinary activities before taxation 91.3 50.5
Tax on profit on ordinary activities (29.0) (28.7)
Profit on ordinary activities after taxation 62.3 21.8
Equity minority interests (3.2) (4.3)
Profit for the financial year 59.1 17.5
Dividends (45.2) (42.2)
Transferred to/(from) reserves 13.9 (24.7)
Notes to the preliminary announcement (continued)
Pro-forma FRS 17 profit and loss account
Half year to Half year to 2002
June December
2002 2002
�m �m �m
Turnover
Continuing operations 2,234.9 2,452.9 4,687.8
Discontinued operations 26.9 5.9 32.8
2,261.8 2,458.8 4,720.6
Total operating profit
Continuing operations before goodwill and 72.7 75.4 148.1
exceptional items
Goodwill amortisation (11.8) (13.8) (25.6)
60.9 61.6 122.5
Exceptional items 0.8 0.1 0.9
Net interest (7.2) (5.6) (12.8)
Finance income FRS 17 30.2 30.3 60.5
Profit before tax, goodwill and exceptional 95.7 100.1 195.8
items
Goodwill amortisation (11.8) (13.8) (25.6)
Exceptional items 0.8 0.1 0.9
Profit on ordinary activities before 84.7 86.4 171.1
taxation
Tax on profit on ordinary activities (27.1) (27.4) (54.5)
Profit on ordinary activities after 57.6 59.0 116.6
taxation
Equity minority interests (3.2) (3.2) (6.4)
Profit for the financial period 54.4 55.8 110.2
Pro-forma earnings per share
pence pence pence
Basic earnings per share 18.4 18.9 37.3
Basic earnings per share before goodwill and exceptional 21.6 23.3 44.9
items
Earnings �m �m �m
Profit for the financial period 54.4 55.8 110.2
Add back
Amortisation of goodwill 11.8 13.8 25.6
Exceptional items (0.8) (0.1) (0.9)
Tax on exceptional items (1.7) (0.4) (2.1)
Before goodwill and exceptional items 63.7 69.1 132.8
Weighted average number of shares (millions) 295.3 295.7 295.5
END