Getlink Se · EURONEXT:GET
Getlink — Investor Day (June 2018)
80 slides from Getlink's investor day presentation, Jun 19, 2018
Slide 1: Investor Day: Sustainable Growth and Value Creation
Investor Day SUSTAINABLE GROWTH AND VALUE CREATION
Slide 2: Getlink Investor Day 2018 Agenda and Speakers
June 19 - London GETLINK INVESTOR DAY 2018 AGENDA SPEAKERS 12:30-13:30 Welcome Lunch 13:30-13:50 Getlink: long term sustainable growth and value creation Jacques GOUNON 13:50-14:35 Eurotunnel Shuttle Services Jo WILLACY 14:35-14:45 Unique know how in infrastructure management Laurent FOURTUNE 14:45-
Slide 3: An Experienced Management Team
AN EXPERIENCED MANAGEMENT TEAM Jacques François Jo Laurent Michel Steven GOUNON GAUTHEY WILLACY FOURTUNE BOUDOUSSIER Moore Chairman Deputy Commercial COO Chief Corporate Chief Executive & Chief Executive Chief Executive Director Eurotunnel Officer Officer Officer Officer Eurotunnel ElecLink 3 Invest
Slide 4: Sustainable Growth and Value Creation
SUSTAINABLE GROWTH AND VALUE CREATION Unique assets with sustainable source of growth A responsible & sustainable Solid return policy on corporate, to shareholders social and environment Financial strategy: Promising outlook ability to further create value in all business lines 4 Investor Day June 2
Slide 5: A Major Player in European Transport
Getlink A MAJOR PLAYER IN EUROPEAN TRANSPORT Three activities Eurotunnel: Concessionaire of the cross-Channel Fixed Link until 2086 Europorte 11% Non regulated • Freight and passenger shuttles: freedom to set prices Other tariffs revenues 2% • Railway Network: charges set by the Railway Usage Cont
Slide 6: Unique Asset with Sustainable Source of Growth
Sustainable growth and value creation UNIQUE ASSET WITH SUSTAINABLE SOURCE OF GROWTH Vital Link Vital Link Eurotunnel, Eurotunnel, an underutilized has revolutionized business travel ElecLink will strengthen cross-Channel asset and a concession From London to Brussels in 2h00, to Paris exchanges of
Slide 7: A Responsible and Sustainable Policy on Corporate, Social and Environment
A RESPONSIBLE AND SUSTAINABLE POLICY ON CORPORATE, SOCIAL AND ENVIRONMENT SOCIAL ENVIRONMENT CORPORATE GOVERNANCE Employee safety Continuous reduction Actively committed Board: Independence (77%), is a priority of CO2 emissions to local communities diversity (46% women), international (46% A constru
Slide 8: Promising Outlook in All Business Lines
Sustainable growth and value creation PROMISING OUTLOOK IN ALL BUSINESS LINES ElecLink 11% EUROPORTE • Energy transition 0% • Rationalization and profitable growth • UK & FR security supply of the French rail freight market • Steady diversified revenue stream Revenue EUROTUNNEL Split EUROTUNNEL RAIL
Slide 9: Brexit: Eurotunnel's Unique Position
BREXIT: EUROTUNNEL’S UNIQUE POSITION 1986 Treaty of Canterbury 2018 The Vital Link Bilateral Treaty* between France & the UK “The frontier controls shall be organised 138 billion euros of goods transported in a way which will reconcile, per year, representing 26% of UK-EU trade as far as possible, t
Slide 10: Brexit: Negotiations Likely to Continue Until November 30th
BREXIT: NEGOTIATIONS LIKELY TO CONTINUE UNTIL NOVEMBER 30TH UK Position on Border Likely outcome “We want a comprehensive free trade agreement An agreement with a time limited transition and a new customs agreement which allows period for implementation of customs for trade which is as frictionless
Slide 11: Brexit: Eurotunnel's Track Record in Managing Transformation
BREXIT: EUROTUNNEL’S TRACK RECORD IN MANAGING TRANSFORMATION 2013/2015 Exit Checks 2015 Migrant crisis Very negative perception from specialists in 2013/2014 Private company, Bi-lateral treaty (“the end of fluidity” / “hours of queues”.) Vital trading link: Discreet, efficient negotiations from our
Slide 12: Brexit: Strengthened Competitive Position
BREXIT Given Eurotunnel’ unique position, our key Government insights, and our track record in managing transition, we strongly believe that the Group will strengthen its competitive position after the Brexit 12 Investor Day June 2018
Slide 13: Long Concession and Long Dated Financing
LONG CONCESSION AND LONG DATED FINANCING: ABILITY TO CREATE FURTHER VALUE EBITDA Net debt/EBITDA 2017 2022 2017 2022 Very long term concession allows for a higher leverage than what is implied by our 2022 target. Maintaining an appropriate leverage could generate additional cashflow for the Group an
Slide 14: Solid Return to Shareholders
Sustainable growth and value creation SOLID RETURN TO SHAREHOLDERS Total amount distributed including share buy backs €1,100M since 2008: €1.0Bn €110M Dividend policy: +120% +€0.05 p.a. €500M Past 5Y Next 5Y Dividend Share buy back 14 Investor Day June 2018
Slide 15: Eurotunnel Shuttle Services
2 EUROTUNNEL SHUTTLE SERVICES 15 Investor Day June 2018
Slide 16: Contribution to Group Revenues 2017
CONTRIBUTION TO GROUP REVENUES 2017 11% Europorte €118 M 2% Other revenues €18 M Other revenues €18 M 2% Railway Network 32% €293 M Railway Network 28% €293 M Getlink Eurotunnel 2017 revenues 2017 revenues Eurotunnel Eurotunnel 59% Shuttles 68% Shuttles €604 M €604 M Combined Freight & Passenger shu
Slide 17: Sustained Growth Over Time, Driven by Yield
SUSTAINED GROWTH OVER TIME, DRIVEN BY YIELD Eurotunnel Shuttle services Revenue* Yield +24% Volume vs. Eurozone inflation +6% (CPI 2011-2017) vs. UK inflation +11% (CPI 2011-2017) Promoting value, not price *At constant currency Source: Eurotunnel 2011-2017 17 Investor Day June 2018
Slide 18: Key Features of Short Straits Operators
KEY FEATURES OF SHORT STRAITS OPERATORS Eurotunnel P&O DFDS Folkestone-Calais Dover-Calais Dover-Calais | Dover-Dunkirk 18 Freight Shuttles 6 Ferries 6 Ferries 9 Passenger Shuttles Mixed Freight & Passenger Mixed Freight & Passenger Up to 235 crossings/day by direction Up to 28 crossings/day by dire
Slide 19: Eurotunnel Leads the Market
EUROTUNNEL LEADS THE MARKET Accompanied Freight Market Shares Car Market Shares Short Straits Short Straits % % Eurotunnel P&O Ferries DFDS MyFerryLink Sea France LD Lines (FO/CA) (DO/CA) (Combined) (DO/CA) (DO/CA) (DO/BOUL) Source: IRN (2010-2017) 19 Investor Day June 2018
Slide 20: Resilience of the Short Straits Route
RESILIENCE OF THE SHORT STRAITS ROUTE North Sea Freight 8% Pax 4% Short Straits Freight 88% Pax 84% Western Channel Freight 4% Pax 12% Short Straits is the key trading & tourism *Short Straits = Dover to Calais/Dunkirk & Eurotunnel route between UK & mainland Europe % Accompanied Freight & Car volum
Slide 21: Eurotunnel Supports €138bn of Trade p.a.
EUROTUNNEL SUPPORTS €138BN OF TRADE P.A. 26% of total UK/EU trade in 2016 €69bn UK exports with strong representation in the most time sensitive markets to the EU €22bn (e-commerce, automotive, pharma, fresh…) to UK €15bn to UK €69bn €11bn to UK EU exports to the UK €3bn to UK Source: EY Report May
Slide 22: Why Hauliers Choose Eurotunnel
WHY HAULIERS CHOOSE EUROTUNNEL Reasons for choosing Fast service 94% CCT Easy to use 98% Reliable 89% Meets expectations 89% Offers good value for money 75% Always striving to improve 96% Gives great importance to security 96% Gives great importance to safety 98% Most environmental
Slide 23: Disciplined Approach to Pricing
DISCIPLINED APPROACH TO PRICING Small (<1k crossing pa) Medium (<10k crossing pa) Large (>10k crossing pa) 25% revenue 38% revenue 35% revenue Trucks >13 meters Standard price Max discount: Price 20% per truck Lowest price 0 1,000 5,000 10,000 30,000 Customer annual volume with Eurotunnel Prices neg
Slide 24: Price Premium Is Based on Rational Financial Benefits
PRICE PREMIUM IS BASED ON RATIONAL FINANCIAL BENEFITS Driver time savings + vehicle/fuel cost savings Trucks >13 meters Standard price Max discount: 20% Price €50-70 per truck Lowest price 0 1,000 5,000 10,000 30,000 Customer annual volume with Eurotunnel On average hauliers are charged €50-70 more
Slide 25: Peak Day Pricing
PEAK DAY PRICING Number of peak days 6€m contribution to revenues, without additional costs, in 2017 Source: Eurotunnel 2015-2018 26 Investor Day June 2018
Slide 26: Freight Shuttle Service Going Forward
FREIGHT SHUTTLE SERVICE GOING FORWARD… Aiming for frictionless Favorable long term Full interconnectivity Prepare for next border with Europe environment for ET: with hauliers’ real generation of trucks after Brexit: time operations: Expansion of Web economy/ On going studies to identify Electronic
Slide 27: Why Car Drivers Choose Eurotunnel
WHY CAR DRIVERS CHOOSE EUROTUNNEL Le Shuttle Eurotunnel P&O Ferries Ferry “Premium Service” (FO/CA) 2.6M 1.1M (DO/CA) “Economy Service” High earners Lower income families Time poor travellers Time rich travellers Business travellers Family holidays Second home owners 2017 car School holiday bias Sho
Slide 28: Highly Seasonal Travel Pattern
HIGHLY SEASONAL TRAVEL PATTERN k Summer Xmas Spring ½ term Outs Easter Xmas Returns Feb ½ term October ½ term Source: Eurotunnel 2017 car traffic data 30 Investor Day June 2018
Slide 29: Clear Strategic Focus on Driving High Yield Ticket Sales
CLEAR STRATEGIC FOCUS ON DRIVING HIGH YIELD TICKET SALES Ticket Mix %sales 2017 2017 Volume 2017 Revenue Highest Lowest Yielding Ticket Yielding Ticket Source: Eurotunnel 2017 31 Investor Day June 2018
Slide 30: Ticket Mix Adapts to Peak Travel Periods
TICKET MIX ADAPTS TO PEAK TRAVEL PERIODS 61 64 Ticket Mix % sales Spring Half Term 2018 Volume Revenue 14 11 9 9 9 7 6 5 3 2 Flexiplus Standard Short Break Frequent Traveller Tour Operator Day Trip Highest Lowest Yielding Ticket Yielding Ticket Source: Eurotunnel 2018 32 Investor Day June 2018
Slide 31: Standard Ticket Prices Spring Half Term 2018
STANDARD TICKET PRICES SPRING HALF TERM 2018 5-6 weeks prior to travel Outward Return UK LS Sat 26/05/2018 FOCA UK LS Sat 02/06/2018 CAFO Fare in £ Fare in £ Prices scanned on: Mon 23/04/2018 160 160 140 140 150 150 100 100 80 80 60 60 40 40 20 20 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Slide 32: Standard Ticket Evolution of Pricing vs. Last Year and Competition
STANDARD TICKET EVOLUTION OF PRICING VS. LAST YEAR & VS. COMPETITION Saturday 2nd June (returns) Eurotunnel – 12h00 £149 P&O – 12h00 £114 P&O 2017 P&O 2018 £59 £79 ET 2017 ET 2018 DFDS Calais – 12h00 DFDS Dunkerque – 12h00 DFDS CAL 2017 DFDS DK 2017 DFDS CAL 2018 DFDS DK 2018 £59 £79 £57 £79 2018 Sp
Slide 33: Flexiplus – Strong Driver of Ticket Yield
FLEXIPLUS – STRONG DRIVER OF TICKET YIELD c.€10M investment in Flexiplus facilities Highest yielding tickets: £214 one way Customer Acorn profile: 1. Affluent Achievers 1A. Lavish Lifestyles 1B. Executive Wealth 1C. Mature Money 2. Rising Prosperity 2D. City Sophisticates 2E. Career Climbers Outperf
Slide 34: Pet Passport Scheme – Increasing Contribution to Yield
PET PASSPORT SCHEME – INCREASING CONTRIBUTION TO YIELD k 2 million pets achieved 1 million pets achieved 1 in 10 cars carry pets. 330K in 2017 with revenue contribution of >€7M direct and >€30M indirect (inc. car ticket) Source: Eurotunnel 2000-2017 36 Investor Day June 2018
Slide 35: Passenger Shuttle Service Going Forward
PASSENGER SHUTTLE SERVICE GOING FORWARD… Well positioned to compete Developing the customer Modernising & updating in broader tavel proposition in line with the fleet of shuttles & tourism market customer expectations Competitive advantages secured Introducing pre-check in facility to speed Increase
Slide 36: Unique Know-How in Infrastructure Management – Growth Upsides Through Capex
UNIQUE KNOW-HOW IN INFRASTRUCTURE MANAGEMENT - GROWTH UPSIDES THROUGH CAPEX 38 Investor Day June 2018
Slide 37: Profitable Transport Is About Turning Ideas into Real World Performance
Eurotunnel operation PROFITABLE TRANSPORT IS ABOUT TURNING IDEAS INTO REAL WORLD PERFORMANCE What is now operated is not what was delivered 24 years ago 1.6 M trucks in 2017 vs. 0.4 M in 1995 2.6 M cars vs. 1.2 M Eurotunnel is bringing a unique know-how on real life operations and modernizations Sin
Slide 38: Key Player Future of Transport
Eurotunnel operation KEY PLAYER FUTURE OF TRANSPORT Clean, no pollutions Technology driven Low CO2 Tunnel Integrated railroad Electric powered Customer oriented Linking major urban 20 Mpax/year and industrial areas High Speed rail 41 Investor Day June 2018
Slide 39: Investments at the Initial Point of a Virtuous Circle
Eurotunnel operation INVESTMENTS AT THE INITIAL POINT OF A VIRTUOUS CIRCLE Virtuous Profits INVESTMENTS Circle Quality of service Volumes Customers Pricing 42 Investor Day June 2018
Slide 40: Capex: Source of Improved Profitability
Eurotunnel operation CAPEX: SOURCE OF IMPROVED PROFITABILITY Terminal expansion RETURN ON INVESTMENTS Flexiplus Capex 2017 Next 5/7 years: €80/120M p.a Amsterdam ERTMS 58% Internet of things Capacity utilization Shuttles renewals Productivity & capacity ERTMS Frankfurt Digital vehicles Performance a
Slide 41: Railway Network
4 RAILWAY NETWORK 45 Investor Day June 2018 19 june 2018
Slide 42: Contribution to Group Revenues 2017
Railway Network CONTRIBUTION TO GROUP REVENUES 2017 11% Europorte €118 M 2% Other revenues €18 M Other revenues €18 M 2% Railway Network 32% €293 M Railway Network 28% €293 M Getlink Eurotunnel 2017 revenues 2017 revenues Eurotunnel Eurotunnel 59% Shuttles 68% Shuttles €604 M €604 M Railway network
Slide 43: Rail Passenger Market – Eurostar Historic Performance
Railway Network RAIL PASSENGER MARKET – EUROSTAR HISTORIC PERFORMANCE Rail Passengers (M) Eurostar focus on original Inter-Capital routes: E* yield London-Paris / London-Brussels Strong market leadership vs. airlines on core 9/11 routes: Terror City centre + Fast journey times attacks Market s
Slide 44: Rail Passenger Market – Medium Term Prospects
Railway Network RAIL PASSENGER MARKET – MEDIUM TERM PROSPECTS Strong growth opportunity Organic growth: Fundamentals work in our favour: New route growth: Existing London-Paris & London-Brussels Increasing London airport congestion London-Amsterdam started in 2018 routes: Fluidity and juxtaposed con
Slide 45: Other Rail Passenger Market Opportunities
Railway Network OTHER RAIL PASSENGER MARKET OPPORTUNITIES London- Amsterdam 3h40 5 Mpax 45% Paris Birmingham Paris Manchester 4h 1 Mpax London- 40% Frankfurt c.5h00 3.5 Mpax 30% Route Journey Time Market size Rail gain London- Roissy 2h15 9.5 Mpax London- Destination 10% Geneva c.5h00 Journey time 2
Slide 46: Focus on London – Amsterdam Route
Railway Network FOCUS ON LONDON – AMSTERDAM ROUTE Market share vs journey time (rail vs. air) 3h40 100% 90% 5 Mpax 80% 70% 60% 50% 40% 30% 20% 10% 0% 00:00 01:00 02:00 03:00 04:00 05:00 06:00 Journey time => City Market Size Rail potential Market share% Largest cross-Channel air market London- 3h40
Slide 47: Focus on London – Bordeaux Route
Railway Network FOCUS ON LONDON – BORDEAUX ROUTE Market share vs journey time (rail vs. air) 100% 0,5 Mpax 90% 80% 70% 60% 50% 40% 30% 20% 4h30 10% 0% 00:00 01:00 02:00 03:00 04:00 05:00 06:00 Potential for direct seasonal service, with growing span Journey time => Relatively simple to develop City
Slide 48: London – Paris Low Cost Operator
Railway Network LONDON – PARIS LOW COST OPERATOR London 9.5 Mpax Key success factors vs. incumbent Greater capacity: +20% seat capacity through dense seating plan Paris Cheaper stations: Stratford Intl & CDG Discounted fares vs. incumbent 2h15 Independent study reveals market potential for Low Cost
Slide 49: Rail Passenger Market Barriers and Development Efforts
Railway Network RAIL PASSENGER MARKET BARRIERS & DEVELOPMENT EFFORTS Lengthy delays in regulatory Alignment of IGC Fixed Link requirements with EU TSIs (rolling stock standards approval of Rolling Stock & Safety without reference to incumbent) Acceptance by IGC of multiple unit operation safety Depl
Slide 50: Rail Freight Market – Historic Performance
Railway Network RAIL FREIGHT MARKET – HISTORIC PERFORMANCE Rail Freight Very strong growth potential Wagonload Trains (k) Open access development success restructuring Tonnes (M) ETICA assisting service creation Double-digit growth when stable Efficient Intermodal & Trainload modes Perfectly
Slide 51: Rail Freight Development Plan
Railway Network RAIL FREIGHT DEVELOPMENT PLAN Rail Freight Growth Objective: 5,000 trains/year in 5 years (+€10M) Double-digit growth achieved in 2013-2015 (before migrants…) Growth target for 2018 delivered in Q1 (before SNCF strike…) Silk road connection: UK-Germany container train connectin
Slide 52: Rail Freight Market Barriers and Development Efforts
Railway Network RAIL FREIGHT MARKET BARRIERS & DEVELOPMENT EFFORTS ETICA programme (ET Incentive for Capacity Additions) to assist High service launch costs & reward operators’ development efforts Formulation of cost efficient gauge enhancement programme (single strategic route UK Kent Route Restric
Slide 53: ElecLink: A High Value Creating Project
ELECLINK: A HIGH VALUE CREATING PROJECT 57 Investor Day June 2018
Slide 54: Agenda
AGENDA Introduction Market context & project overview & business readiness Construction highlights 58 Investor Day June 2018
Slide 55: A Strategic Investment for Getlink
A STRATEGIC INVESTMENT FOR GETLINK Strong expected Expansion into profitability a new market segment A high value creating project Leverages existing Diversified revenue stream infrastructure Robust Enhanced Getlink economics environmental credentials 59 Investor Day June 2018
Slide 56: Overview
OVERVIEW 1,000 MW bi-directional capacity Tested and proven technology Awarded 25-year exemption No subsea cables or overhead lines World class EPC contractors Not underwritten by consumers Minimal environmental impact High reliability and availability Not owned by national grid operators 60 Investo
Slide 57: Our Journey So Far
OUR JOURNEY SO FAR Licence, exemption Feasibility & grid connections studies Sales & commercial operations EPC tender Establishment of 51:49 JV Eurotunnel obtains with Star Capital Dispatch & physical operations 100% control Maintenance & repairs Commissioning starts 1st revenues secured EPC contrac
Slide 58: Converter Stations
Construction highlights CONVERTER STATIONS Foundations completed Steelwork underway Cladding in progress 63 Investor Day June 2018
Slide 59: Tunnel and Cable Works
Construction highlights TUNNEL & CABLE WORKS 5,300 brackets installed 1,526 monorail components completed 3,335 meters of ducts completed 64 Investor Day June 2018
Slide 60: A Well-Established Interconnected Market
A WELL-ESTABLISHED INTERCONNECTED MARKET 65 Investor Day June 2018
Slide 61: Day-Ahead Baseload Electricity Prices
Market fundamentals DAY-AHEAD BASELOAD ELECTRICITY PRICES UK prices have retained a premium over FR prices with the exception of certain winter periods ElecLink will enable bi-directional flows in response to market conditions, thereby monetizing the hourly price differences in either direction of f
Slide 62: Hourly Price Differences
Market fundamentals HOURLY PRICE DIFFERENCES Hourly price differentials remain significant even when average baseload prices converge Hourly price differential Hourly price differential 40 50 140 20 30 120 0 10 100 -20 -10 80 -40 -30 60 40 20 - (20) (40) Av. spread: 2.8 €/MWh Av. spread: 1.6 €/MWh A
Slide 63: Outlook
Market fundamentals OUTLOOK The expanding share of intermittent renewables is only likely to increase hourly price volatility thereby reinforcing the value of interconnectors Forecast trend in offshore wind capacity (GB) Forecast trend in onshore wind capacity (FR) 15000 30,000 25,000 20,000 10000 1
Slide 64: Congestion Rents
Market fundamentals CONGESTION RENTS The economic environment for ElecLink is robust and uncorrelated to Eurotunnel traffic and revenue 5-year rolling average theoretical congestion rents, GB-FR border, 1,000 MW (in € millions) 140 126 126 120 109 107 104 118 120 100 94 € million 80 60 40 20 - 2006-
Slide 65: Premium Infrastructure – Premium Expertise
PREMIUM INFRASTRUCTURE – PREMIUM EXPERTISE We are developing state-of-the-art capabilities for reliable 24/7 operations Systems IT infrastructure Operational procedures Business readiness Market interfaces People A new centre of expertise within the Group delivering complex infrastructure 70 Investo
Slide 66: Europorte: Towards a Transparent French Market
EUROPORTE: TOWARDS A TRANSPARENT FRENCH MARKET 71 Investor Day June 2018
Slide 67: 2017: Strong Management Achievement
Europorte 2017: STRONG MANAGEMENT ACHIEVEMENT In €M 2016 Change 2017 Revenue 116 +2% 118 Operating costs (116) -3% (112) EBITDA 0 +€6M 6 % of revenue 0% 5% Net profit (11) +€11M 0.3 72 Investor Day June 2018
Slide 68: 2022 and Beyond: Rationalisation and Profitable Growth of the French Rail Market
Europorte 2022 AND BEYOND: RATIONALISATION AND PROFITABLE GROWTH OF THE FRENCH RAIL MARKET In €M 2017 2022* Revenue 118 135+ EBITDA 6 12+ % of revenue 5% 8%-10% Net profit 0.3 5+ * £1 = €1.14 73 Investor Day June 2018
Slide 69: A Proven Growth Model and a Focus on Shareholder Return
A PROVEN GROWTH MODEL AND A FOCUS ON SHAREHOLDER RETURN 74 Investor Day June 2018
Slide 70: Eurotunnel: Yield Increase + Traffic Growth + Cost Control = EBITDA Growth
A proven growth model and a focus on shareholder return EUROTUNNEL: YIELD INCREASE + TRAFFIC GROWTH + COST CONTROL = EBITDA GROWTH Eurotunnel 2017-2022 growth* (€M) EBITDA +5% p.a. Revenue +4%/+4.5% p.a. (+€25/30M p.a.) EBITDA EBITDA Opex +3%/+3.5% p.a. Opex Opex 2017 2022 Revenue Opex EBITDA Traffi
Slide 71: Getlink: Sustainable Profit Growth Beyond 2022
A proven growth model and a focus on shareholder return GETLINK: SUSTAINABLE PROFIT GROWTH BEYOND 2022 Getlink 2017-2022 EBITDA* growth prospects €735M+ ElecLink Eurotunnel Europorte €6M+ €80M+ €526M €125M+ 2017 2018-2022 2022 2086 * £1 = €1.14 76 Investor Day June 2018
Slide 72: EBITDA Growth Drives Strong FCF Growth
A proven growth model and a focus on shareholder return EBITDA GROWTH DRIVES STRONG FCF GROWTH In €M 2017 2022* EBITDA (& other) 533 735+ Debt service (217) (230) Investments (79) (100/120) Tax (1) (10) €6bn tax credit FCF 236 c.400 * £1 = €1.14 +70% vs. 2017 77 Investor Day June 2018
Slide 73: Focus on Inflation
A proven growth model and a focus on shareholder return FOCUS ON INFLATION Impact Extra EBITDA*: of 100bp cumulative c.€900M inflation increase in 2018 Extra debt service: only cumulative c.€30M Extra EBITDA*: Impact of 100bp cumulative c.€65BN inflation Extra debt service: increase over 2018/ cumul
Slide 74: Long Dated Financing
A proven growth model and a focus on shareholder return LONG DATED FINANCING (Rated BBB+/BAA2/BBB BY S&P/MOODY’S/FITCH) Fixed rate Long duration Inflation linked tranches aligned Cash with Railways Usage Contract revenue Tranche Nominal Coupon Maturity Interest A1-3 £1,016M 3.13% 31.8M 2042 Principa
Slide 75: 2017/2018 Debt Improvement
A proven growth model and a focus on shareholder return 2017/2018 DEBT IMPROVEMENT May 2017 €2.0B of new notes issued by CLEF to refinance C tranches. Cash cost of debt reduced by 2% to 3.8% saving €60M pa for next 5 years Interest rate* WACC** Impact on DCF valuation: +15% 2016 2018e Dec. 2016 Dec.
Slide 76: Solid Return to Shareholders
A proven growth model and a focus on shareholder return SOLID RETURN TO SHAREHOLDERS Total amount distributed including share buy backs €1,100M since 2008: €1.0Bn €110M Dividend policy: +120% +€0.05 p.a. €500M Past 5Y Next 5Y Dividend Share buy back 81 Investor Day June 2018
Slide 77: Priority for Shareholder Return
A proven growth model and a focus on shareholder return PRIORITY FOR SHAREHOLDER RETURN 2022 horizon Cash allocation scenario Impact for shareholders Net debt/EBITDA Appropriate leverage Accelerated return to shareholders Dividend + cash from releverage Development Dividends + Development IRR Strict
Slide 78: High Correlation Between EV/EBITDA Multiple and Length of Concession
A proven growth model and a focus on shareholder return HIGH CORRELATION BETWEEN EV/EBITDA MULTIPLE AND LENGTH OF CONCESSION 35x Chicago Skyway Lamsac, Lima Indiana Toll 30x Pocahontas Parkway Metropista AirportlinkM7 25x ETR 407 Nice Airport Fortaleza/Porto 20x Lyon Airport Alegre Airports NTE/LBJ
Slide 79: #VitalLink
#VitalLink
Slide 80: Contacts
CONTACTS Jean Baptiste Michael ROUSSILLE SCHULLER co-Head of IR Corporate Finance Director 00 33 1 40 98 04 81 co-Head of IR 00 44 1303 288 719 Jean-baptiste.roussille@getlinkgroup.com Michael.schuller@getlinkgroup.com