Auckland International Airport Limited · NZX:AIA
Auckland International Airport — FY2017 Earnings Presentation
37 slides from Auckland International Airport's earnings presentation, 2017
Slide 1: 2017 Annual Results
2017 Annual Results Adrian Littlewood Chief Executive Philip Neutze Chief Financial Officer
Slide 2: Highlights
Highlights 2017 annual results Adrian Littlewood, chief executive
Slide 3: Results at a glance
Results at a glance 2017 Annual Results Highlights Revenue Passenger movements 9.7% $629.3m 10.2% 19.0m performance Financial Operating EBITDAFI Aircraft movements Our continuing journey 9.9 % $473.1m 7.3% 169,245 Underlying profit Full year dividend per share 16.5% $247.8m 17.1% 20.5 cents 3
Slide 4: Strong growth across the business
Strong growth across the business 2017 Annual Results Aeronautical Retail Car park Highlights $293.9m revenue, 13.8% $162.8m revenue, 5.2%1 $56.3m revenue, 8.1% Strong passenger growth: performance Financial 11.0% International 5.2% revenue growth 8.9% Domestic Our continuing journey Investment Prop
Slide 5: Investing in our infrastructure, tourism growth and customer experience
Highlights 2017 Annual Results Investing in our infrastructure Highlights • Progressed international terminal upgrade and Pier B extension • Fast tracked a number of transport upgrades given the ongoing strong growth performance Financial • $1.9b aeronautical capital expenditure ($real) anticipate
Slide 6: Financial performance
performance Financial 2017 annual results Philip Neutze, chief financial officer
Slide 7: Underlying profit up 16.5%
Underlying profit up 16.5% 2017 Annual Results 2017 financial results Highlights 2017 2016 Change For the year ended 30 June $m $m Revenue 629.3 573.9 9.7% performance Financial Expenses 156.2 143.6 8.8% Earnings before interest, taxation, depreciation, fair value adjustments and investments in asso
Slide 8: Growth across all revenue streams
Growth across all revenue streams 2017 Annual Results Revenue Highlights 2017 2016 Change For the year ended 30 June $m $m Airfield income 119.6 103.4 15.7% performance Financial Passenger services charge 174.3 154.9 12.5% Retail income 162.8 157.5 3.4% Car park income 56.3 52.1 8.1% Our continuing
Slide 9: Double digit passenger growth
Double digit passenger growth 2017 Annual Results Passenger movements Highlights For the year ended 30 June 2017 2016* Change International arrivals 4,906,383 4,420,659 11.0% performance Financial International departures 4,836,597 4,358,907 11.0% International passengers excluding transits 9,742,98
Slide 10: Strong aircraft movement and MCTOW growth
Strong aircraft movement and MCTOW growth 2017 Annual Results Aircraft movements and MCTOW Highlights For the year ended 30 June 2017 2016 Change Aircraft movements performance Financial International aircraft movements 54,879 49,828 10.1% Domestic aircraft movements 114,366 107,944 5.9% Total aircr
Slide 11: Expenses reflect operational investment for growth
Expenses reflect operational investment for growth 2017 Annual Results 2017 2016 Change Highlights For the year ended 30 June $m $m Staff 50.5 46.8 7.9% Asset management, maintenance and airport operations 55.6 49.1 13.2% performance Financial Rates and insurance 12.2 11.5 6.1% Marketing and promoti
Slide 12: Associates' performance
Associates’ performance 2017 Annual Results 2017 2016 Change For the year ended 30 June Highlights $m $m Queenstown Airport (24.99% ownership) Total Revenue 39.0 31.5 23.8% EBITDAFI 26.2 21.5 21.9% performance Financial Domestic Passengers 1,360,158 1,176,330 15.6% International Passengers 532,285 4
Slide 13: Capital expenditure
Capital expenditure 2017 Annual Results Capital expenditure by type Highlights Guidance 450 400 350 Capital expenditure ($m) performance 300 Financial 250 Aeronautical Retail and car parking 200 Infrastructure and other 150 Our continuing Property development journey 100 50 0 2014 2015 2016 2017 201
Slide 14: Funding
Funding 2017 Annual Results • Reflecting greater investment, total Debt maturity profile – as at 30 June 2017 Highlights borrowings at 30 June rose 9% to less than 1 $2,057m year • Committed headroom of $280m at 30 1 to 3 years performance June Financial 3 to 5 years • Committed to our A- credit rat
Slide 15: Our continuing journey
Our continuing journey 2017 annual results Adrian Littlewood, chief executive
Slide 16: Growing Travel and Trade Markets
Strategic priority: Growing Travel and Trade Markets 2017 Annual Results Diverse international passenger growth in FY17 Highlights Seven new international Strong international Arrivals growth driven by airlines capacity growth multiple regions1 performance Financial Other 12% Asia +14.5 % 10% New Ou
Slide 17: Macro environment
Macro environment 2017 Annual Results Supportive of continued, albeit slower, capacity growth Highlights Aircraft technology is making long Fuel Prices rose in 2017 but remain New aircraft growth is forecast to haul routes to NZ more profitable well below 2011/2 levels remain strong in the Asia Paci
Slide 18: NZ remains underserved
NZ remains underserved 2017 Annual Results China is S. Korea is Canada is 36% 48% 33% underserved underserved underserved UK is 37% USA is underserved Japan is Germany is 26% 33% underserved 42% underserved underserved Brazil is India is 38% 32% Indonesia is Chile is underserved underserved 39% 35%
Slide 19: Changing passenger trends
Changing passenger trends 2017 Annual Results Shift in passenger mix on Chinese routes Rolling 12 month Chinese visitor visa approvals Highlights • Change in visitor type with a higher proportion of 200,000 free independent travellers (58% of visa approvals) 150,000 • Load factors on Chinese routes
Slide 20: Strategy to grow, sustain and diversify
Strategy to grow, sustain and diversify 2017 Annual Results Highlights performance Financial Grow Capacity Sustain Capacity Diversify markets Our continuing journey • Continue to focus on • Successful three year 4 • Australia campaigns re- underserved markets e.g. seasons 5 senses China positioning
Slide 21: Strengthen our consumer business
Strategic priority: Strengthen our consumer business 2017 Annual Results Revenue growth despite significant disruption Highlights • FY17 has been a formative year in the commercial businesses enhancing our physical offering, undertaking a significant leasing program and performance building our onli
Slide 22: International departures expansion
International departures expansion 2017 Annual Results First phase of the new duty free stores Highlights performance Financial Our continuing journey 22
Slide 23: International departures expansion: retail development
International departures expansion 2017 Annual Results Significant retail development is ongoing Highlights • 57 new retail concepts will be launched over the next 18 months, 42 related to the departures expansion performance • Retail terminal area decreased in FY17 and Financial will continue being
Slide 24: Future of retail
Future of retail 2017 Annual Results • New departures upgrade will enhance physical Highlights offer and enable execution of digital strategy with expanded click and collect and improved payment channels • We are focused on the digital future, developing performance Financial enhanced multi-channel
Slide 25: Long term retail trends
Long term retail trends 2017 Annual Results Retail income 2015/16 Highlights Added ~15% more international retail space, largely Pier A $160 2011 Expanded duty free open for all FY11, FY18 performance with expanded F&B and speciality open 65% Retail sqm Financial $140 in phases throughout FY11 incre
Slide 26: Diverse parking product offering
Diverse parking product offering 2017 Annual Results Revenue in line with domestic passenger Total Parking Capacity Highlights growth Terminal/ • Parking income up 8.1% with ARPS down 4.2% Use 30 Jun 17 30 Jun 16 Change % reflecting capacity additions International 3,770 3,596 4.8 performance • 858
Slide 27: Invest for future growth
Strategic priority: Invest for future growth 2017 Annual Results Investing more than $1m every working day on airport infrastructure Highlights • Progressed international departures upgrade. It is a complex project but sets up for the future • Commenced international terminal Pier B extension. perfo
Slide 28: Improving our transport network
Improving our transport network 2017 Annual Results Investing in a multi-mode transport solution Highlights • Improving land transport access remains a priority. It requires a long term multi-mode transport solution performance Financial • Auckland Airport is investing over $40m on transport initiat
Slide 29: Developing our property business
Developing our property business 2017 Annual Results Investment property 15.2% growth in property revenue $72.9m rent roll Highlights • Rent roll up $10m or 15.7% on the prior year • Completed $85m in new developments: 268 ha Land available for development performance – 9,000 m2 Quad 7 office buildi
Slide 30: Be fast, efficient and effective
Strategic priority: Be fast, efficient and effective 2017 Annual Results Investing in our customer experience 71% Increase in Auckland Highlights Airport app downloads • Invested in innovative new technology: – sophisticated aeronautical operations modelling tool improving system wide capacity manag
Slide 31: Being a good employer and neighbour
Being a good employer and neighbour 2017 Annual Results Our people Highlights • Continued focus on health and safety supported by a growing team and increased staff engagement, resulting in a 22% decrease in employee injury rate performance Financial • Investing in our employees through increased le
Slide 32: Aeronautical prices set for PSE3
Aeronautical prices set for PSE3 2017 Annual Results Modest price path and strong infrastructure investment Highlights • Average international revenues per passenger reducing by 1.7% p.a. and domestic increasing by 0.8% p.a. in real terms over the next five years (excluding the Runway Land Charge) •
Slide 33: Outlook
Outlook 2017 Annual Results Strategic review Highlights • North Queensland Airports review completed, confirming it is a highly attractive asset but not integral to our current business strategy performance Financial Guidance • Relative to recent years, more modest underlying Our continuing profit g
Slide 34: Questions
Questions
Slide 35: Appendix
Appendix
Slide 36: Underlying profit reconciliation
Underlying profit reconciliation 2017 Annual Results 2017 2016 Reported Adjustments Underlying Reported Adjustments Underlying For the year ended 30 June profit $m profit profit $m profit $m $m $m $m EBITDAFI 473.1 - 473.1 430.3 - 430.3 Share of profits of associates 19.4 (4.5) 14.9 (8.4) 19.9 11.5
Slide 37: Important Notice and Glossary
Important Notice and Glossary 2017 Annual Results Disclaimer This presentation is given on behalf of Auckland International Airport Limited. Information in this presentation: • is provided for general information purposes only, and is not an offer or invitation for subscription, purchase, or recomme
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