International Public Partnerships Ltd · LSE:INPP
International Public Partnerships — FY2022 Earnings Presentation
45 slides from International Public Partnerships's earnings presentation, March 2023
Slide 1: FY 2022 Results Presentation
FY 2022 RESULTS PRESENTATION March 2023
Slide 2: Important Information
IMPORTANT INFORMATION The information in this document has been prepared at the direction of International Public Partnerships Limited (“INPP” or to be taken as a comprehensive over view of the activities of INPP. the "Company") solely for use at an information presentation about INPP. Potential inv
Slide 3: Overview
INTERNATIONAL Y PUBLIC PARTNERSHIPS.
Slide 4: Our Approach
OUR APPROACH OUR PURPOSE IS TO INVEST RESPONSIBLY IN SOCIAL CONSISTENT AND PREDICTABLE RETURNS AND PUBLIC INFRASTRUCTURE THAT DELIVERS ▪ Resilient, inflation-linked cash flows LONG-TERM BENEFITS FOR ALL STAKEHOLDERS. ▪ Focus on growing predictable dividends INPP believes that the financial performan
Slide 5: 2022 in Numbers
2022 IN NUMBERS HIGHLIGHTS Alignment with the UN Sustainable Development Goals (SDGs) is a key part of the Company’s approach to ESG integration8 159.1p c.12.5% >650,000 >2.7m NAV P/SHARE1 NAV TOTAL RETURN2 2021: 148.2p/share PATIENTS TREATED IN HOMES CAPABLE OF BEING 2021: 5.8% HEALTHCARE FACILITIL
Slide 6: Portfolio Performance and Valuation
PORTFOLIO PERFORMANCE AND VALUATION
Slide 7: Predictable, Long-Term Revenues
PREDICTABLE, LONG-TERM REVENUES DIVIDEND GROWTH FY 2022 DIVIDEND 7.74p pence per share 8 7.93 8.13 Actual Forecast 7.74 7.55 7 7.18 7.36 Per share 7.00 6.82 6.65 6 6.45 6.30 6.15 6.00 5.70 5.85 FY 2023 TARGET DIVIDEND1 5.55 5 5.40 5.25 4 7.93p 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2
Slide 8: Valuation Discount Rate Overview
VALUATION DISCOUNT RATE OVERVIEW NAV 1 WEIGHTED AVERAGE RISK WEIGHTED AVERAGE RISK CAPITAL DISCOUNT CAPITAL DISCOUNT RATE 2 PORTFOLIO DISCOUNT RATE 3 RATE RANGE 4 £3.0bn 7.71% 7.51% 5.65% - 10.28% or 159.1 p per share 31 DEC 2022 31 DEC 2021 VARIANCE NAV1 PER SHARE 159.1p 148.2p 10.9p WEIGHTED AVERA
Slide 9: NAV Movements
NAV MOVEMENTS CAPITAL RAISING INVESTMENT RISK PREMIA FOREIGN EXCHANGE RATES MACROECONOMIC ASSUMPTIONS £325.0m (£320.2m net of issuance Impact of the increase in government GBP weakened against all five Near-term inflation assumptions were costs) of new capital raised bond yields was partially offset
Slide 10: FY 2022 Portfolio Review
FY 2022 PORTFOLIO REVIEW
Slide 11: Cadent Is an Essential UK Gas Distribution Business
CADENT IS AN ESSENTIAL UK GAS DISTRIBUTION BUSINESS SERVING C.50% OF UK GAS CUSTOMERS INVESTMENT UPDATE INVESTMENT OVERVIEW ▪ Cadent earns its revenues from providing a safe and reliable gas distribution network to its customers (it is not an energy supplier). Its revenues are regulated by Ofgem and
Slide 12: Tideway Is Building a Super-Sewer Under the Thames
TIDEWAY IS BUILDING A ‘SUPER-SEWER’ UNDER THE RIVER THAMES TO CREATE A HEALTHIER ENVIRONMENT FOR LONDON INVESTMENT UPDATE INVESTMENT OVERVIEW ▪ Tideway reached a number of milestones in 2022, including the end of the primary tunnelling phase and completing the majority of the secondary lining. Overa
Slide 13: Diabolo Rail Link to Brussels Airport
DIABOLO IS A RAIL TRANSPORTATION ASSET LINKING BRUSSELS AIRPORT WITH BELGIUM’S NATIONAL RAIL NETWORK INVESTMENT UPDATE INVESTMENT OVERVIEW ▪ Passenger numbers for Diabolo are continuing to improve after being impacted by the national lockdowns and restrictions on international travel implemented as
Slide 14: OFTOs
OFTOS OFTOS COMPRISE ELECTRICITY TRANSMISSION ASSETS CONNECTING OFFSHORE WIND FARMS TO THE ONSHORE GRID INVESTMENT UPDATE INVESTMENT OVERVIEW ▪ INPP is currently invested in 10 OFTOs and is currently preferred bidder on one further OFTO (Moray East) which is expected to close in 2023 01 OPERATIONAL
Slide 15: Angel Trains Rolling Stock Leasing
ANGEL TRAINS IS THE UK’S LARGEST ROLLING STOCK LEASING COMPANY OWNING MORE THAN 4,000 VEHICLES INVESTMENT UPDATE INVESTMENT OVERVIEW ▪ Angel generates revenues from the contractual leasing of its rolling stock to Train Operating Companies (‘TOCs’) and therefore its current revenues are largely unaff
Slide 16: ESG Reporting Framework
ESG REPORTING FRAMEWORK INPP SEEKS TO PROVIDE ESG KPIS AND DISCLOSURES, WHICH HAVE BEEN DESIGNED TO SUPPORT INVESTOR REPORTING REQUIREMENTS AND TO HIGHLIGHT THE POSITIVE IMPACT OF THE FUND’S APPROACH TO ESG DISCLOSURE FRAMEWORK KPIs AND DISCLOSURES REPORTING CATEGORY POSITIVE Sector-specific disclos
Slide 17: Responsible Investment Progress
RESPONSIBLE INVESTMENT PROGRESS THE COMPANY CONTINUES TO DEMONSTRATE ITS LEADERSHIP IN RESPONSIBLE INVESTMENT AND MADE GOOD PROGRESS AGAINST ITS ESG POLICY OBJECTIVES DELIVERED IN 2022 SELECTED OUTCOMES ESG DISCLOSURES ▪ The Company categorised itself as an Article 8 Regulatory 100% 97% 27 145 Finan
Slide 18: Looking Forward
LOOKING FORWARD
Slide 19: Pipeline Overview
PIPELINE OVERVIEW THE COMPANY HAS A STRONG PIPELINE AS WELL AS KNOWN OR COMMITTED OPPORTUNITIES TOTALING C.£230M THAT CONTINUE TO BE IN LINE WITH INPP’S INVESTMENT OBJECTIVES AND RISK PROFILE ESTIMATED KNOWN/COMMITTED LOCATION INVESTMENT TENOR STATUS INVESTMENT1 Preferred bidder. Moray East OFTO UK
Slide 20: Summary and Outlook
SUMMARY AND OUTLOOK RESILIENT PORTFOLIO WITH CONSISTENT RETURNS ▪ Strong financial and operational performance achieved during the period ▪ High-level of inflation-linkage continues to provide a good level of protection in higher-inflation environments ▪ FY 2022 dividend targets met with guidance no
Slide 21: Appendices
APPENDICES
Slide 22: Portfolio Overview and Valuation
PORTFOLIO OVERVIEW AND VALUATION
Slide 23: Valuation Methodology
VALUATION METHODOLOGY NAV CALCULATION1 ADDITIONAL VALUE DRIVERS ▪ Sum-of-the-parts’ aggregation of the present value of each of the We believe additional value may exist additional to that captured in our Company’s investments plus other balance sheet items valuation process. These items are not cap
Slide 24: Historic NAV Performance
HISTORIC NAV PERFORMANCE INPP NAV – 1 TO 5 YEARS 31 DEC 2017 31 DEC 2018 31 DEC 2019 31 DEC 2020 31 DEC 2021 31 DEC 2022 NAV1 PER SHARE 145.0p 148.1p 150.6p 147.1p 148.2p 159.1p NAV SINCE INCEPTION 170.0 160.0 150.0 140.0 NAV per share 130.0 120.0 110.0 100.0 90.0 80.0 Dec 06 Dec 07 Dec 08 Dec 09 De
Slide 25: INPP's Top 10 Investments
INPP’S TOP 10 INVESTMENTS % INVESTMENT % INVESTMENT STATUS AT % HOLDING AT FAIR VALUE AT FAIR VALUE AT PRIMARY SDG NAME OF INVESTMENT LOCATION SECTOR 31 DEC 2022 31 DEC 20221 31 DEC 2022 31 DEC 2021 SUPPORTED Gas UK Operational 7% Risk Capital 14.5% 15.5% Distribution UK Waste Water Under Constructi
Slide 26: Investments at Fair Value
INVESTMENTS AT FAIR VALUE INVESTMENTS INVESTMENTS AT FAIR VALUE PORTFOLIO RETURN FOREIGN EXCHANGE RATES An increase of £191.6m The Rebased Investments at Fair The Portfolio Return of £252.9m During the period, Sterling weakened against the AUD, owing to new Value of £2,565.1m is presented to capture
Slide 27: Portfolio Analysis
PORTFOLIO ANALYSIS 1. The majority of projects and businesses benefit from availability-based or regulated revenues. 2. Risk Capital includes both investment and business level equity and subordinated shareholder debt. 3. Early Stage Investor – investments developed or originated by the Investment A
Slide 28: Revenue Type and Service Providers
REVENUE TYPE AND SERVICE PROVIDERS PORTFOLIO BY REVENUE TYPE1 INPP SERVICE PROVIDERS1 DIGITAL INFRASTRUCTURE OPERATING INFRABEL OTHER ROLLING BUSINESSES2 STOCK4 DOWNER & 2% 7% SPOTLESS 10% 8% 6% HUNT MILITARY PPPs WITH COMMUNITIES REVENUE RISK 4% MECHANISMS3 11% BOUYGUES 3% MITIE REGULATED 3% 52% IN
Slide 29: Valuation Sensitivities and Discount Rate Trends
VALUATION SENSITIVITIES AND DISCOUNT RATE TRENDS ESTIMATED IMPACT OF CHANGES IN KEY VARIABLES ON 31 DECEMBER 2022 NAV OF 159.1p PER SHARE PORTFOLIO INFLATION- LINKAGE1 0.7%p.a. (2021: 0.7% p.a.) HISTORICAL WEIGHTED AVERAGE RISK CAPITAL DISCOUNT RATE 10% 8% 6% 4% 2% 0% Dec-10 Jun-11 Dec-11 Jun-12 Dec
Slide 30: Projected Cash Flows Under a +100bps Inflation Scenario
PROJECTED CASH FLOWS UNDER A +100BPS INFLATION SCENARIO PROJECTED ANNUAL CASH FLOWS AVAILABLE FOR DIVIDENDS (+100BPS INFLATION) 1 (£m) 450 400 350 300 250 200 150 100 50 0 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 204
Slide 31: Short-Term Inflation Sensitivities
SHORT-TERM INFLATION SENSITIVITIES INFLATION SENSITIVITIES AS AT 31 DECEMBER 2022 ▪ Given the ongoing higher-inflation environment, additional sensitivities have been prepared to allow investors to understand the estimated impact on the Company’s NAV, other things being equal, of higher inflation ra
Slide 32: Macroeconomic Assumptions
MACROECONOMIC ASSUMPTIONS 31 DECEMBER 2022 31 DECEMBER 2021 Inflation rates UK RPI: 8.00% until Dec 2023, RPI: 2.75% 2.75% thereafter CPIH: 7.00% until Dec 2023, CPIH: 2.00% 2.00% thereafter Australia 5.25% until Dec 2023 2.50% 3.00% until Dec 2024, 2.50% thereafter Europe 5.00% until Dec 2023, 2.00
Slide 33: Delivering Against ESG KPIs
DELIVERING AGAINST ESG KPIS THE COMPANY DREW ON ITS KPIS TO HELP MONITOR PROGRESS AGAINST ITS ESG POLICY OBJECTIVES ▪ The Company monitors material ESG risks and opportunities at the individual investment level ▪ This includes tracking over 40 different ESG indicators as part of its ESG data collect
Slide 34: Sustainability Indicators
SUSTAINABILITY INDICATORS THE COMPANY HAS ENHANCED DATA COLLECTION IN LINE WITH SFDR These indicators have been collated to enable the Company’s shareholders to meet their own regulatory and voluntary reporting requirements, and to support the Company in better understanding the non-financial impact
Slide 35: Portfolio Information
PORTFOLIO INFORMATION INVESTMENTS MADE DURING THE YEAR UK PPP PORTFOLIO1 TIDEWAY Location Investment Date Location Investment Date UK Jun 2022 UK Sep 2022 Operational Status Primary SDG supported Operational Status Primary SDG supported Operational Under construction Investment Investment £1.5m £41.
Slide 36: Portfolio Information Continued
PORTFOLIO INFORMATION CONTINUED INVESTMENTS COMMITMENTS MADE DURING THE YEAR INVESTMENT MADE POST-PERIOD END GOLD COAST LIGHT RAIL – STAGE 3 EALING BSF Location Commitment Date Location Commitment Date Australia Mar 2022 UK Mar 2023 Operational Status Primary SDG supported Operational Status Primary
Slide 37: Portfolio Information Continued: Projects Under Construction
PORTFOLIO INFORMATION CONTINUED PROJECTS UNDER CONSTRUCTION TIDEWAY FLINDERS UNIVERSITY HEALTH AND MEDICAL RESEARCH BUILDING Location Status at 31 Dec 2022 Location Status at 31 Dec 2022 UK Scheduled for completion in 20252 Australia On schedule Construction % of investment at fair value Constructio
Slide 38: Other Asset Management Updates
OTHER ASSET MANAGEMENT UPDATES BENEX AVAILABILITY-BASED PPPS DIGITAL INFRASTRUCTURE ▪ Revenues generated through the contractual ▪ Availability-based PPPs account for 38% of the ▪ In July 2017, INPP committed to invest up to leasing of rolling stock and through direct Company’s portfolio by investme
Slide 39: Cash Generation and Operating Costs
CASH GENERATION AND OPERATING COSTS YEAR TO YEAR TO SUMMARY OF CONSOLIDATED CASH FLOW 31 DECEMBER 2022 31 DECEMBER 2021 £M £M Opening cash balance 56.1 44.3 Cash from investments 205.9 167.9 Increase reflects the growth and inflation-linkage of the portfolio Corporate costs (30.2) (28.5) Net financi
Slide 40: Gearing and Investment Life
GEARING AND INVESTMENT LIFE TIDEWAY 14% ASSET LEVEL DEBT OFTOS CADENT ▪ Asset level debt is non-recourse to the Company 23% 15% PPP & OFTOS ▪ Generally fixed-term, fixed-rate debt ▪ Principal generally amortised over the life of the project OPERATING 10% BUSINESSES – ▪ Structure is intended to minim
Slide 41: About Amber Infrastructure
ABOUT AMBER en INFRASTRUCTURE
Slide 42: Specialist Fund Manager
SPECIALIST FUND MANAGER AMBER MANAGES OR ADVISES EIGHT FUNDS AND OTHER MANAGED ACCOUNTS SAIF5 Equity-focused funds FTSE 250-listed investment company Greenfield fund enhancing key Co-mingled managed account First dedicated Digital Infrastructure investing in long-term public infrastructure across th
Slide 43: Amber's Extensive International Track Record and Presence
AMBER’S EXTENSIVE INTERNATIONAL TRACK RECORD AND PRESENCE AMBER HAS OFFICES AND PERSONNEL ACROSS EUROPE, NORTH AMERICA AND AUSTRALIA >120 Helsinki EUROPE 17 – Federal German Ministry of Education UNITED KINGDOM and Research Headquarters – Cadent Gas Distribution – Dublin Courts (Ireland) – Thames Ti
Slide 44: Contacts
INTERNATIONAL CONTACTS U8. yy SAS Yj Fs y WAGER eA
Slide 45: Contact Details
CONTACT DETAILS AMBER FUND MANAGEMENT FTI CONSULTING (PR & COMMUNICATIONS) Director, INPP: Giles Frost Senior Director: Ed Berry Telephone: +44 (0)20 7939 0550 Telephone: +44 (0)20 3727 1046 Email: Giles.Frost@amberinfrastructure.com Email: Edward.Berry@fticonsulting.com Senior Investment Director:
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