Auckland International Airport Limited · NZX:AIA
Auckland International Airport — FY2019 Earnings Presentation
36 slides from Auckland International Airport's earnings presentation, Aug 22, 2019
Slide 1: Annual Results Presentation
Annual Results Presentation 22 August 2019 Adrian Littlewood Chief Executive Philip Neutze Chief Financial Officer
Slide 2: Important notice
Important notice 2019 Annual Results Disclaimer This presentation is given on behalf of Auckland International Airport Limited (NZX: AIA; ASX: AIA; ADR: AUKNY). Information in this presentation: • is provided for general information purposes only, and is not an offer or invitation for subscription,
Slide 3: Highlights
Highlights
Slide 4: Results at a glance
Results at a glance 2019 Annual Results Highlights Revenue Underlying Passenger Operating profit movements cashflow performance $743.4m $274.7m 21.1m $375.9m Financial 8.7% 4.4% 2.8% 17.0% Our continuing journey and guidance Regulatory EBITDAFI Earnings per Aircraft Capital share* movements investme
Slide 5: Growth across the business
Growth across the business 2019 Annual Results Highlights Aeronautical Retail Transport performance Financial $312.7m revenue 3.8% $225.8m income 18.5% $64.2m revenue 5.2% Moderating passenger growth: Finalising expansion project: Replacement capacity built: Our continuing 3.0% International 32 new
Slide 6: performance
Regulatory Our continuing Financial Highlights 2019 and guidance journey performance 6 Annual Results MSCP 3
Slide 7: Financial performance
Financial performance
Slide 8: Solid growth in revenue and EBITDA
Solid growth in revenue and EBITDA 2019 Annual Results For the year ended 30 June 2019 ($m) 2019 2018 Change Highlights Revenue 743.4 683.9 8.7% Expenses 188.6 177.5 6.3% performance Financial Earnings before interest, taxation, depreciation, 554.8 506.4 9.6% fair value adjustments and investments i
Slide 9: Revenue growth across the business
Revenue growth across the business 2019 Annual Results For the year ended 30 June 2019 ($m) 2019 2018 Change Highlights Airfield income 127.6 122.1 4.5% Passenger services charge 185.1 179.1 3.4% performance Financial Retail income 225.8 190.6 18.5% Car park income 64.2 61.0 5.2% Our continuing Inve
Slide 10: Passenger growth moderating
Passenger growth moderating 2019 Annual Results For the year ended 30 June 2019 ($m) 2019 2018 Change Highlights International arrivals 5,284,325 5,116,341 3.3% International departures 5,222,335 5,086,185 2.7% performance Financial International passengers excluding transits 10,506,660 10,202,526 3
Slide 11: Aircraft movements and MCTOW still growing
Aircraft movements and MCTOW still growing 2019 Annual Results Highlights For the year ended 30 June ($m) 2019 2018 Change Aircraft movements International aircraft movements 57,082 55,693 2.5% performance Financial Domestic aircraft movements 121,689 118,583 2.6% Total aircraft movements 178,771 17
Slide 12: Opex growth well down on 1H FY19 and FY18
Opex growth well down on 1H FY19 and FY18 2019 Annual Results For the year ended 30 June ($m) 2019 2018 Change Highlights Staff 59.1 57.9 2.1% Asset management, maintenance and airport operations 81.1 69.5 16.7% performance Financial Rates and insurance 16.1 13.7 17.5% Marketing and promotions 12.7
Slide 13: Associates' performance
Associates’ performance 2019 Annual Results Highlights For the year ended 30 June ($m) 2019 2018 Change Queenstown Airport (24.99% ownership) Total Revenue 49.6 45.7 8.5% performance Financial EBITDA 34.3 31.6 8.5% Underlying Earnings (Auckland Airport share) 4.1 3.8 7.9% Our continuing Domestic Pas
Slide 14: Capital expenditure update
Capital expenditure update 2019 Annual Results Over $1bn value of projects under construction Historical capital expenditure Highlights • FY19 capital expenditure was $284.1m as the airport 500 continued to invest in key projects 400 performance • The year on year capex decline was due to a reductio
Slide 15: Funding
Funding 2019 Annual Results • Total borrowings at 30 June increased to $2,190.4m, Debt maturity profile Highlights 6.3% up on the prior year less than 1 year • Committed undrawn facility headroom at 30 June of c.$374.0m 1 to 3 years performance Financial • Committed to our A- credit rating 3 to 5 ye
Slide 16: Our continuing journey
Our continuing Ps "Al journey f | eer
Slide 17: Growing travel and trade markets
Strategic priority: Growing travel and trade markets 2019 Annual Results Moderating growth as industry responds to changing market dynamics* Highlights Capacity Passengers Domestic 2.5% 3.6% International 3.0% 3.0% performance Financial Total ex Transits 2.8% 3.3% North Asia Our continuing Capacity
Slide 18: Summary of key market announcements in 2019
Strategic priority: Growing travel and trade markets 2019 Annual Results Summary of key market announcements in 2019 Highlights AirNZ/Singapore alliance receives regulatory approval; performance third daily AKL- Financial Singapore service AirNZ launches AKL- Taipei Air Canada to launch Our continui
Slide 19: Near term challenges and long term opportunities
Strategic priority: Growing travel and trade markets 2019 Annual Results Near term challenges Long term opportunities Highlights Markets Markets • China slowdown impacting groups and dual • China, India and South East Asia – emerging Australia / New Zealand destination; Mono- middle class of travell
Slide 20: Customers are seeing the benefits of our infrastructure programme
Strategic priority: Invest for future growth 2019 Annual Results Customers are seeing the benefits of our infrastructure Highlights programme • The international departures expansion (Phase 3) project reached practical completion in 2019 delivering 36,000m² of new and performance Financial refurbish
Slide 21: Anchor projects
Strategic priority: Anchor projects Invest for future growth • Eight anchor projects 2019 Annual Results create significant additional aeronautical Our seven anchor projects capacity to cater for future Highlights growth Northern road network • Since setting pricing for PSE3 we have been Northern ru
Slide 22: Invest for future growth: terminal
Strategic priority: Invest for future growth 2019 Annual Results FY19 FY20 Beyond Highlights Phase 3 • Principal design elements • Procurement model completed • Continue enabling works Extended outbound established • Commence enabling works • Complete detailed design Terminal processing & dwell • De
Slide 23: Invest for future growth: airfield
Strategic priority: Invest for future growth 2019 Annual Results FY19 FY20 Beyond Highlights Phase 3 • Finalised detailed design • Commencement of enabling • Taxiway Mike and Lima Extended outbound • Agreed design and acceleration and civil works operational testing Airfield processing & dwell of pr
Slide 24: Development momentum underpins strong growth
Strategic priority: Invest for future growth 2019 Annual Results Development momentum underpins strong growth $100m Investment property rent roll Highlights • Investment property portfolio now $1.7bn Occupancy in the • During FY19, completed 3 developments with a net lettable area 97.7% portfolio of
Slide 25: Be fast, efficient and effective
Strategic priority: 2019 Be fast, efficient and effective Annual Results In 2019 we have… Next year we are… Highlights • Agreed pathway with ACE* forum to increase air • Continuing the rollout of check in kiosks, aiming to traffic movements to 47 per hour in 1H20 and 50 process 80% of international
Slide 26: We are focused on overall system performance
Strategic priority: 2019 Be fast, efficient and effective Annual Results We are focused on overall system performance Highlights • ITB annual ASQ score lifted to highest in 7 years • Baggage reclaim time continued to improve in 2H19 4.5 4.26 12:58 performance 4.12 International baggage claim Financi
Slide 27: Strengthen our consumer business: departures upgrade finalised
Strategic priority: 2019 Strengthen our consumer business Annual Results Departures upgrade finalised 18.5% Increase in retail Highlights income • Retail income up 18.5% and income per passenger grew by 15.4%* - moderated in 2H19 as we cycled prior year store openings Increase in retail On-terminal
Slide 28: Newly opened Food and Beverage offering
Regulatory Our continuing Financial Highlights 2019 and guidance journey performance Annual Results Newly opened Food and Beverage offering
Slide 29: Parking revenue moderating but still outpacing passenger growth
Strategic priority: 2019 Strengthen our consumer business Annual Results Parking revenue moderating but still outpacing passenger growth Highlights • Parking income increased by 5.2% while ARPS grew by 3.8% driven by customer demand, particularly for higher 29.5% Valet revenue growth value products
Slide 30: People, place and community
People, place and community 2019 Annual Results Highlights Customer Safety and Education and experience sustainability employment performance Financial Invest in infrastructure that enhances the Commit to operating in a safe and Share the benefits of our investment customer experience environmentall
Slide 31: Regulatory and guidance
Regulatory and rN guidance | {Mihi
Slide 32: Regulatory update
Regulatory update 2019 Annual Results PSE3 Pricing Highlights • In 2019, we considered the Commerce Commission’s final assessment and reached a decision to provide a discount to our published aeronautical prices for FY20, performance Financial FY21 and FY22, an outcome which was well received by the
Slide 33: Outlook
Outlook 2019 Annual Results Guidance Highlights • We expect underlying net profit after tax (excluding any fair value changes and other one-off items) in FY20 to be between $265m and $275m performance Financial ‒ FY20 is the first year where the discounted aeronautical prices apply to reduce our tar
Slide 34: Questions
Questions
Slide 35: Appendix: Underlying profit reconciliation
Appendix: Underlying profit reconciliation 2019 Annual Results 2019 2018 Highlights Reported Adjustments Underlying Reported Adjustments Underlying For the year ended 30 June ($m) profit profit profit profit EBITDAFI per Income Statement 554.8 - 554.8 506.4 - 506.4 performance Financial Share of pro
Slide 36: Glossary
Glossary 2019 Annual Results ACE Airfield Capacity Enhancement AMTN Australian medium term notes ARPS Average revenue per parking space ASQ Airport Service Quality ATV Average transaction value AVSEC Aviation Security Service BARNZ Board of Airline Representatives New Zealand Inc. DTB Domestic Termi
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