Auckland International Airport Limited · NZX:AIA
Auckland International Airport — FY2009 Earnings Presentation
36 slides from Auckland International Airport's earnings presentation, Aug 28, 2009
Slide 1: Auckland Airport Annual Results to June 2009
Auckland Airport 2009 annual results | 28 August 2009 1 Auckland Airport Annual Results to June 2009
Slide 2: Notes
Auckland Airport 2009 annual results | 28 August 2009 2 Notes This annual results presentation dated 28 August 2009 provides additional comment on the media and financial materials released at the same date. As such, it should be read in conjunction with, and subject to, the explanations and views p
Slide 3: Simon Moutter, Simon Robertson
Auckland Airport 2009 annual results | 28 August 2009 3 Simon Moutter Simon Robertson
Slide 4: The state of the market
Auckland Airport 2009 annual results | 28 August 2009 4 The state of the market Brutal operating conditions Aviation sector under pressure Passenger volumes down Major customer weathering the storm Unsure if we are through worst Auckland Airport proactively managing conditions
Slide 5: Sound strategy in place
Auckland Airport 2009 annual results | 28 August 2009 5 Sound strategy in place Creating value from movement of people and goods Getting “fighting fit” Making the most of what we have Encouraging a healthy market Looking for new opportunities
Slide 6: Solid results achieved
Auckland Airport 2009 annual results | 28 August 2009 6 Solid results achieved Voted one of world‟s top 10 airports Two new international airlines won Revenue $369.2m up 5.2% Operating EBITDA $280.4m up 1.6% Capital expenditure $87.5m down 38.8% Underlying profit $105.9m up 2.1% Balance sheet furthe
Slide 7: The 2009 financial results
Auckland Airport 2009 annual results | 28 August 2009 7 The 2009 financial results Passenger volumes Aircraft movements Revenues Costs Profit Dividends Balance sheet
Slide 8: Results overview
Auckland Airport 2009 annual results | 28 August 2009 8 Results overview 2009 ($m) 2008 ($m) % Change Revenue 369.2 351.0 5.2 Operating EBITDA 280.4 275.8 1.6 Cost relating to ownership proposals - (9.6) - Investment property fair value (64.6) 13.7 - Total EBITDA 215.8 280.0 (22.9) Reported Profit a
Slide 9: Passenger volumes decline
Auckland Airport 2009 annual results | 28 August 2009 9 Passenger volumes decline Economic conditions impact passenger volumes Swine flu added to decline International passengers down 1.4% year on year, 3.2% H2:H2 Domestic passengers down 1.5% year on year, 6.7% H2:H2 Working on stimulating passenge
Slide 10: Passenger markets changing
Auckland Airport 2009 annual results | 28 August 2009 10 Passenger markets changing International long-haul volumes hit hardest UK -9.6%, US -11.0%, Asia -12.5% Competition on trans- Tasman stimulating demand, Australian visitors increased 7.1% Domestic market reflects changes to airline services
Slide 11: International aircraft movements up
Auckland Airport 2009 annual results | 28 August 2009 11 International aircraft movements up Airlines managing air services, frequencies and aircraft size to cope with conditions Our air service development and promotions stimulated volume
Slide 12: Domestic aircraft movements decline
Auckland Airport 2009 annual results | 28 August 2009 12 Domestic aircraft movements decline Domestic performance assisted by full year impact of Pacific Blue Fewer domestic flights but more larger sized aircraft
Slide 13: Revenues strong in non-aero
Auckland Airport 2009 annual results | 28 August 2009 13 Revenues strong in non-aero Aeronautical revenue growth modest Pleasing retail and property growth Pax volumes down but retail yield improving Retail growth boosted by single duty free operator contract (now renegotiated)
Slide 14: Costs up due to unusual items
Auckland Airport 2009 annual results | 28 August 2009 14 Costs up due to unusual items Unusual items in FY08 and FY09 distort comparison Staff costs (excluding one-offs) increased 1.7% Other one-off items include Commerce Commission costs, bad debts and loss on sale Focus on proactively managing cos
Slide 15: Underlying profit up
Auckland Airport 2009 annual results | 28 August 2009 15 Underlying profit up
Slide 16: Dividends maintained
Auckland Airport 2009 annual results | 28 August 2009 16 Dividends maintained Final dividend of 4.45 cps, bringing total dividend for the year to 8.2 cps Dividend payout ratio of 95% of underlying profit Formal dividend policy remains at 90%
Slide 17: Balance sheet strengthened
Auckland Airport 2009 annual results | 28 August 2009 17 Balance sheet strengthened Active management of debt portfolio Two bond issues in FY09 raised $180 million S&P rating A- /A2 (stable outlook) Balance sheet remains robust
Slide 18: Improved debt ratios
Auckland Airport 2009 annual results | 28 August 2009 18 Improved debt ratios 2009 2008 % change Underlying EBITDA Interest cover 3.58 3.42 4.7% Average debt maturity 3.3 3.2 3.1% Debt to Debt + Equity 36.9% 35.5% (3.9%) Percentage Fixed 79% 58% 36.2% Average Interest Rate 7.52% 8.18% (8.1%)
Slide 19: Getting 'Fighting Fit'
Auckland Airport 2009 annual results | 28 August 2009 19 Getting „Fighting Fit‟ This year‟s progress: Reduced capital expenditure programme Restructured management and operations Costs and resources managed proactively Instituted performance management culture Health & Safety performance improved
Slide 20: Getting 'Fighting Fit'
Auckland Airport 2009 annual results | 28 August 2009 20 Getting „Fighting Fit‟ Next year‟s focus: Capital expenditure in range of $60 to $65 million (excluding yet to be committed property development) Sharpen capital allocation methodologies Strategic sourcing review Introduce new smart technologi
Slide 21: Making the most of what we have
Auckland Airport 2009 annual results | 28 August 2009 21 Making the most of what we have Retail: Outlook for duty free lower FY09 benefited from duty free MAG “premium” JR Duty Free joined the offering Departure redevelopment underway Pro-active management of retail concessions to improve yields Par
Slide 22: Making the most of what we have
Auckland Airport 2009 annual results | 28 August 2009 22 Making the most of what we have Property: Rental growth through active management Hotel offering will add to the wider airport offering Investment property revaluation down 12.1% Despite this, property portfolio shows significant value increas
Slide 23: Making the most of what we have
Auckland Airport 2009 annual results | 28 August 2009 23 Making the most of what we have Aeronautical: Two new international airlines won in FY09: Pacific Blue expanded into international Jetstar commenced international and domestic Emirates‟ A380 attracted to New Zealand Big investment in scaling u
Slide 24: Making the most of what we have
Auckland Airport 2009 annual results | 28 August 2009 24 Making the most of what we have Next year‟s focus: Progress departures redevelopment Expand Lean Six Sigma programme Implement common border initiatives Lift passenger yield through better match to customer needs, better value propositions, be
Slide 25: Encouraging a healthy market
Auckland Airport 2009 annual results | 28 August 2009 25 Encouraging a healthy market This year‟s progress: Aeronautical charge increase deferred Air NZ judicial review dropped Well managed reversion to dual duty-free arrangement Many long-standing commercial issues resolved with Air NZ and other te
Slide 26: Encouraging a healthy market
Auckland Airport 2009 annual results | 28 August 2009 26 Encouraging a healthy market Next year‟s focus: Even more stable, long-term commercial relationships with customers Respond to varying needs of airlines individually Effective and fit-for-purpose disclosure regime Alignment on fair land valuat
Slide 27: New opportunities
Auckland Airport 2009 annual results | 28 August 2009 27 New opportunities This year‟s progress: Focus shifted to volume and yield maximisation Reworked departures redevelopment New air services sales pipeline established Tourism promotions undertaken Airport hotel deal finalised
Slide 28: New opportunities
Auckland Airport 2009 annual results | 28 August 2009 28 New opportunities Next year‟s focus: Further air services development Accelerate property development activity Freight business investigation Capturing future opportunities
Slide 29: The case for investment in Auckland Airport is as strong as ever
Auckland Airport 2009 annual results | 28 August 2009 29 The case for investment in Auckland Airport is as strong as ever
Slide 30: Leveraged for growth
Auckland Airport 2009 annual results | 28 August 2009 30 Leveraged for growth Forecasts impossible Base expectations are for decrease in FY10 before increasing Focused on influencing above base Impact of each 100k increase in international Pax to EBITDA is approximately $2.0 to $2.3m
Slide 31: Delivering tourism value
Auckland Airport 2009 annual results | 28 August 2009 31 Delivering tourism value Further air service development activity High-growth market opportunities Growing supply to stimulate demand Value to Auckland Airport delivers value to New Zealand
Slide 32: Managing retail opportunity
Auckland Airport 2009 annual results | 28 August 2009 32 Managing retail opportunity Minimum guarantees a feature of most concession agreements Typical structure is 80-90% trailing ratchet Benefit is high exposure to upside, protection to downside Biggest driver is duty free, currently affected by u
Slide 33: Reducing regulatory risk
Auckland Airport 2009 annual results | 28 August 2009 33 Reducing regulatory risk Process continuing, a regulatory pathway clearing Scope of Commerce Commission involvement is defined Regime limited to information disclosure, does not recommend price control, dual-till maintained Emerging as similar
Slide 34: Improving capital intensity
Auckland Airport 2009 annual results | 28 August 2009 34 Improving capital intensity Changing conditions make it sensible to review spend and planning priorities Northern runway deferred, other medium-term plans being reviewed Process efficiency and new technology enables more Pax Today using curren
Slide 35: The case for investment
Auckland Airport 2009 annual results | 28 August 2009 35 The case for investment Outlook for FY10 net profit after tax $93m to $100m Capex forecast range $60m to $65m, excluding yet to be committed property development Downside risks being mitigated Unsure if we are through the worst but may be near
Slide 36: Questions
Auckland Airport 2009 annual results | 28 August 2009 36 Questions
Auckland International Airport — FY2009 Earnings Presentation on 6ix