3i Infrastructure PLC · LSE:3IN
3i Infrastructure — H1 FY2025 Earnings Presentation
39 slides from 3i Infrastructure's earnings presentation, Nov 12, 2024
Slide 1: Results for the six months to 30 September 2024
Results for the six months to 30 September 2024 12 November 2024
Slide 2: Important information
Important information This disclaimer (and any non-contractual obligations arising out of or in connection with it) is governed by English law and applies to these materials and to their presentation and webcast on behalf of 3i Infrastructure plc (together the “Presentation”). The sole purpose of th
Slide 3: Important information (cont.) - US Persons
Important information (cont.) - US Persons The distribution of this Presentation in certain jurisdictions may be restricted by law. Persons into whose possession this Presentation comes are required to inform themselves about and to observe any such restrictions. Terms used in this disclaimer (inclu
Slide 4: Richard Laing
3i Infrastructure ple Richard Laing Chair
Slide 5: Today's agenda
Today’s agenda Introduction Richard Laing Business review Scott Moseley and Bernardo Sottomayor Financial review James Dawes Q&A All 5
Slide 6: Another period of good performance
Another period of good performance Exceeding our target return of 8-10% per annum 5.1% Total return on opening NAV Continued strong value growth in real terms 374.7p NAV per share Valorem sale proceeds to be used to pay down the RCF €309m Expected Valorem proceeds 6.325p On track to deliver the full
Slide 7: Scott Moseley and Bernardo Sottomayor
Scott Moseley and Bernardo Sottomayor Managing Partners and Co-Heads of European Infrastructure, 3i Investments plc
Slide 8: Clearly defined and well proven strategy
Clearly defined and well proven strategy Our investment focus Our strategy Return Buyouts High-quality assets with strong market positions Core-plus Supported by long-term growth trends Core / PPPs Exceptional asset management Risk 8
Slide 9: Driving growth
Driving growth De-risk and Accretive growth Define white space and enhance infrastructure capex prepare for exit characteristics Clear strategy at acquisition Prioritise accretive Identify and demonstrate to strengthen downside opportunities that generate white space available to grow protection ret
Slide 10: Consistently achieving a premium at exit
Consistently achieving a premium at exit A deliberate focus on exit is integral to our approach 37% Avg. uplift on realisation2 23% Gross realised 1 IRR 58% 40% 48% 27% 33% 27% 31% 2.8x Gross realised MOIC £2.8bn Realised proceeds FY16 FY17 FY17 FY19 FY20 FY24 FY25 Last reported valuation Exit proce
Slide 11: Valorem: from asset developer to leading independent renewable power producer
From asset developer to leading independent renewable power producer c.31% Uplift since start of sale process1 • Operational asset base growth to >850MW c.21% IRR • 4x EBITDA growth • Development pipeline 3.5x grown to 6.6GW Money multiple 1 Pre-sale process carrying value as at 30 September 2023 11
Slide 12: Ongoing transition from plant operator and developer to asset-owning platform
Ongoing transition from plant operator and developer to asset- owning platform • Leading European utility • Strategic partnership *JLEN now known as Foresight Environmental Infrastructure 12
Slide 13: Transitioning a pure-play landfill gas business to a development platform
Transitioning a pure-play landfill gas business to a development platform Note: Installed capacity and EBITDA excludes Flexible Generation 13
Slide 14: Delivering top-quartile track record for over 15 years
Delivering top-quartile track record for over 15 years Core-plus strategy 1. Annualised growth rate in NAV per share including ordinary and special dividends 2. IRR calculation based on historic returns of European Infrastructure funds. Source: Pitchbook 14
Slide 15: Reinvestment driving strong earnings growth
Reinvestment driving strong earnings growth 14% EBITDA growth 10% EBITDA growth excl. energy companies incl. energy companies Mid-teens Over £400m Unlevered returns Largely self-funded Note: EBITDA reflected is the portfolio companies’ EBITDA (for the twelve months ending 30 June 2024) multiplied by
Slide 16: Value driven growth across the portfolio
Value driven growth across the portfolio Asset contributions to total portfolio return (£m) £212m 16
Slide 17: Portfolio highlights: SRL
Portfolio highlights SRL Challenging market backdrop Local authorities delaying roadworks New CEO has identified new growth initiatives Energy transition Digitalisation Renewing essential infrastructure Demographic change 17
Slide 18: Portfolio highlights: DNS:NET
Portfolio highlights DNS:NET New management making progress on business plan Incentivising contractors Early momentum in rolling out fibre-to-the-home network Energy transition Digitalisation Renewing essential infrastructure Demographic change 18
Slide 19: Portfolio highlights: Tampnet
Portfolio highlights Tampnet Exceeding EBITDA growth expectations First fibre-backed contract in Gulf of Mexico Ongoing development of future projects Energy transition Digitalisation Renewing essential infrastructure Demographic change 19
Slide 20: Portfolio highlights: TCR
Portfolio highlights TCR Strong demand for rental products Won notable new contracts Investing in new electric Ground Support Equipment ("GSE") Energy transition Digitalisation Renewing essential infrastructure Demographic change 20
Slide 21: Portfolio highlights: ESVAGT
Portfolio highlights ESVAGT Increasing vessel day rates and utilisation 4 new vessels under construction Contracted revenue up 50% since stake increased Energy transition Digitalisation Renewing essential infrastructure Demographic change 21
Slide 22: Portfolio highlights: GCX
Portfolio highlights GCX Digitalisation driving demand for bandwidth Converting sales pipeline New attractive network investment opportunities Energy transition Digitalisation Renewing essential infrastructure Demographic change 22
Slide 23: Delivering top-quartile track record for over 15 years
Delivering top-quartile track record for over 15 years More growth to come from our portfolio Core-plus strategy 1. Annualised growth rate in NAV per share including ordinary and special dividends 2. IRR calculation based on historic returns of European Infrastructure funds. Source: Pitchbook 23
Slide 24: James Dawes
James Dawes CFO, Infrastructure, 3i Investments plc
Slide 25: 3iN is differentiated
3iN is differentiated Diversified portfolio Portfolio of growing businesses Active asset management and exceptional management teams 25
Slide 26: Funding portfolio company growth
Funding portfolio company growth Portfolio company cash generation Increased earnings increases debt capacity Proactive management of portfolio company leverage 26
Slide 27: Portfolio company leverage
Portfolio company leverage No material amounts of debt requiring refinancing in the short-term Conservative approach to gearing: 32% average LTV1 Actively extending tenor of portfolio debt Portfolio weighted average cost of drawn long-term debt of 4.8% Targeting investment grade senior debt structur
Slide 28: Flexible funding model
Flexible funding model Balance sheet managed to be symmetrical around zero cash / debt £23m Average net debt1 Note: Portfolio value as per IFRS Balance Sheet. September 2024 is pro-forma following the expected receipt of the Valorem proceeds 1 Average of six-monthly reported net cash / (debt) 28
Slide 29: Flexible funding model
Flexible funding model Proceeds from the expected Valorem sale to pay down the RCF Liquidity £562m Cash and undrawn facilities after Valorem proceeds Revolving Credit £900m RCF Facility Maturity: November 2026 Realisations Selective divestment at the right time 29
Slide 30: NAV progression
NAV progression Growth driven by capital return and income 375p 356p (£m) 1 1. Net of final dividend for the prior year of £55m 30
Slide 31: Discount rate movement
Discount rate movement Approach to calculating discount rate remains consistent 3iN Weighted Average Discount Rate1 2% CPI Long-term inflation assumption for UK and Europe 1. Weighted Average Discount Rate excludes India Infrastructure 31
Slide 32: Value creation over last 12 months
Value creation over last 12 months 3iN Listed infrastructure sector companies1 1. Source of listed infrastructure sector companies: JP Morgan, last 12 months of published data 32
Slide 33: 3) Infrastructure plc Si
3) Infrastructure plc Si
Slide 34: Appendix
3) Infrastructure plc Si Appendix
Slide 35: Portfolio summary
Portfolio summary 30 September 2024 (£m) Directors’ Allocated Underlying 1 Directors’ Accrued Foreign valuation 30 foreign portfolio Portfolio valuation 31 Investment Divestment income Value exchange September exchange income in total return Portfolio assets March 2024 in the period2 in the period m
Slide 36: The dividend has grown every year since IPO
The dividend has grown every year since IPO Special dividends Ordinary dividends FY24 dividend target 6.5% p.a.1 4.8%p.a.1 10.2% 6.4% 6.5% 6.6% 6.7% 6.3% (pence per share) 1. Annualised growth rate in ordinary dividends to FY18, and from FY20 to FY25 36
Slide 37: Sensitivities to total return
Sensitivities to total return Note: Figures show the impact on portfolio value under these different scenarios 37
Slide 38: 10-year growth of 3i Infrastructure
10-year growth of 3i Infrastructure Steady NAV growth and balance sheet discipline 38
Slide 39: 3i Infrastructure plc
3) Infrastructure plc