Grupo Aeroportuario Del Centro Norte Sab De Cv Class B · BMV:OMA/B
Grupo Aeroportuario Del Centro Norte Sab De Cv Class B — Central North Airport Group — Q3 2017 Earnings Presentation
49 slides from Grupo Aeroportuario Del Centro Norte Sab De Cv Class B's earnings presentation, Oct 18, 2017
Slide 1: OMA announces Third Quarter 2017 Operational and Financial Results
OMA announces Third Quarter 2017 Operational and Financial Results Monterrey, Mexico, October 17, 2017 — Mexican airport operator Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., known as OMA (NASDAQ: OMAB; BMV: OMA), today reported its unaudited, consolidated results for the third quarter of 2
Slide 2: Footnote on references and exchange rates
________________ 1 Unless otherwise stated, all references are to the third quarter of 2017 (3Q17), and all percentage changes are with respect to the same period of the prior year. The exchange rates used to convert foreign currency amounts were Ps. 19.5965 as of September 30, 2016, Ps. 20.6640 as
Slide 3: Investor and media relations contacts
Chief Financial Officer: Investor Relations: Media Relations: Viesaly Tomes Ruiz Emmanuel Camacho Paul RiveroZavala Pola Fernandez +52 (8) 8625 4300 +52 (1) 8625 4308 +522) 8525 4334, +452 (62) 8625 4300 wtorres@oma 2er0 ecamacho@oma.2ero | piyssoGDoma aa pfernandes@ oma 2er0 Laury Franco Casilo__ I
Slide 4: The principal results of the third quarter
The principal results of the third quarter include: § Total terminal passenger traffic increased 1.3% to 5.2 million in 3Q17. Domestic and international traffic each increased 1.3%. The Monterrey, Culiacán, and Ciudad Juárez airports recorded the most growth. § Aeronautical revenues increased 10.2%,
Slide 5: 3Q17 Operating Results
3Q17 Operating Results Operations, Passengers, and Cargo During the quarter, several factors resulted in a deceleration in the rate of passenger traffic growth. Changes in slot assignments at the Mexico City International Airport (AICM) and the optimization of fleets by some airlines resulted in clo
Slide 6: Total passenger traffic increased
Total passenger traffic increased 1.3% (+65,843 passengers). Of total passenger traffic, 89.1% was domestic, and 10.9% was international. Commercial aviation accounted for 98.6% of passenger traffic. Monterrey generated 52.0% of passenger traffic, Culiacán 9.3%, and Chihuahua 7.2%. Domestic passenge
Slide 7: Reynosa, Torreón and other airport traffic changes
§ Reynosa (-20.8%; -34,246 passengers); Torreón (-16.0%; -25,875); Acapulco (-8.9%; -15,131); Durango (-12.6%; -12,795); and Mazatlán (-5.5%; -10,407) had the largest decreases, as a result of reductions on their Mexico City routes. International passenger traffic increased 1.3%, and nine airports r
Slide 8: Commercial Operations
Commercial Operations OMA implements its commercial strategy through continuous improvement in the services offerings in its airports. This strategy resulted in the opening of 17 commercial initiatives in 3Q17, including communications, restaurants, advertising, car rental, retail stores, and a VIP
Slide 9: OMA
OMA
Slide 10: Hotel Services
Hotel Services § The NH Collection Terminal 2 Hotel had an 83.3% occupancy rate and a 1.2% increase in the average room rate to Ps. 2,175 per night. Revenues increased 3.7% to Ps. 56 million. The earthquake on September 19 resulted in the suspension of operations for one week, as the result of losin
Slide 11: Consolidated Financial Results
Consolidated Financial Results Revenues Aeronautical revenues increased 10.2% to Ps. 1,163 million, principally as a result of higher traffic volumes and increases in specific tariffs in 2Q17. Revenue from domestic passenger charges increased 14.1%, revenue from international passenger charges incre
Slide 12: Non-aeronautical revenues increased
Non-aeronautical revenues increased 8.8% to Ps. 368 million, and represented 24.1% of the sum of aeronautical and non-aeronautical revenues. The increase reflected principally the expansion of commercial activities. Non-aeronautical revenues per passenger increased 7.4% to Ps. 70.8. Non-aeronautical
Slide 13: OMA
OMA
Slide 14: Non-aeronautical revenues table
(Ps. Thousands) 3017 %Var Ma oMi7__‘%Var Commercial Activities: Parking 52878 53,654 15 142,540 148,220 40 Advertsing 26,647 28,408 66 91,482 e2s77 (93) Retail) 22871 264680173 66,685 78987 15.4 Restaurants 2,087 21-33 60,417 7481 166 Car Rentals 19,387 23,296 203 53,340 e362 194 Passenger Senices e
Slide 15: Commercial activities contributed
Commercial activities contributed an incremental Ps. 17 million (+10.3%). The line items that had the largest variations were: § Restaurants (+23.3%; Ps. +5 million), as a result of the increase in participation revenues from restaurants that opened in 2016 and the opening of five new establishments
Slide 16: Construction revenues and costs
Construction revenues , which represent the value of improvements to concessioned assets, were Ps. 352 million (+244%) during the quarter. They are equal to construction costs recognized, and generate neither a gain nor a loss. Construction revenues and costs are a function of the advance in executi
Slide 17: Hotel costs and expenses increased
Hotel costs and expenses increased in line with operations.
Slide 18: The major maintenance provision
The major maintenance provision was a charge of Ps. 77 million in 3Q17. The balance of the maintenance provision as of September 30, 2017 was Ps. 810 million, compared to Ps. 670 million at the end of 2016. The airport concession tax increased 8.7% as a result of the growth in revenues. The technica
Slide 19: OMA
OMA
Slide 20: Adjusted EBITDA and Operating Income
Adjusted EBITDA and Operating Income As a result of the Company’s continuing initiatives to increase revenues and control costs and expenses, Adjusted EBITDA increased 9.8% to Ps. 1,023 million. The Adjusted EBITDA margin was 66.8%, unchanged from the prior year period. (See Notes to the Financial I
Slide 21: Adjusted EBITDA reconciliation
(Ps. Thousands) 301 3017 %Var Ex 17 Var Consolidated Net Income 487,030 979,890 19.4 1,306,351 1,512,905 158 = Financing (Expense) Income (101,833) (72,214) (29.1) (203,627) (307,326) 809 + __Income Taxes 211,758 216,801 24 544,074 588,832 a2 Operating Income 800,621 868,905 85 2,054,052 2,409,063 1
Slide 22: Financing Expense
Financing Expense Financing expense decreased by Ps. 30 million to Ps. 72 million in 3Q17. The variation was principally the result of a smaller exchange loss.
Slide 23: Net Income
Net Income Consolidated net income increased 19.1% to Ps. 580 million. Earnings per share , based on net income of the controlling interest, increased 19.6% to Ps. 1.47; earnings per ADS increased 31.3% to US$0.66. Each ADS represents eight Series B shares.
Slide 24: Net income and earnings per share table
(Ps. Thousands) 3a16 3017 % Var M16 MIT %V Consolidated Net Income 497,030 579,890 19.1 1,306,351 1,512,905 158 Net Margin % 325% 30.8% 32.0% 28.9% Net Income of Non.Controlling Interest 4055 1.218 = (70.0) 3,739 6329693. ‘Net Income of Controlling Interest 492974 578,672 19.8 1,302,612 1,506,576 15
Slide 25: MDP, Strategic Investment, and Quality Improvement
MDP, Strategic Investment, and Quality Improvement Expenditures OMA maintains its firm commitment to provide services of the highest quality for its passengers and airline clients in all thirteen airports. As a result, we are constantly undertaking maintenance projects, developing and optimizing inf
Slide 26: Footnotes on MDP and strategic investments
________________ 3 The amounts for MDP and strategic investments include works, services, and paid and unpaid acquisitions; the latter are included in accounts payable for the period. 4 In Pesos of December 31, 2016 purchasing power.
Slide 27: Debt
Debt As of September 30, 2017, total debt was Ps. 4,629 million and net debt was Ps. 2,476 million. The ratio of net debt to Adjusted EBITDA was 0.67. Of total debt, 97% was denominated in Mexican pesos, and 3% in U.S. dollars.
Slide 28: Derivative Financial Instruments and Cash Flow Statement
Derivative Financial Instruments As of the date of this report, OMA has no derivatives exposure. Cash Flow Statement For the first nine months of 2017, operating activities generated cash of Ps. 2,266 million, a 44.9% increase compared to the same period of 2016. The increase resulted principally fr
Slide 29: Financing activities generated an outflow
Financing activities generated an outflow of Ps. 1,897 million, 32% higher than the prior year period. The dividend paid increased by Ps. 200 million, and there were share repurchases of Ps. 34 million in the first nine month of 2017. As a result of the foregoing, cash decreased Ps. 716 million duri
Slide 30: Material and Subsequent Events
Material and Subsequent Events The NH Collection Hotel T2 temporarily suspended operations. As a result of the earthquake on September 19 th , which resulted in loss of electricity and other utilities, the NH Collection Hotel in Terminal 2 of the Mexico City International Airport temporarily suspend
Slide 31: 3Q17 earnings conference call details
OMA (NASDAQ: OMAB; BMV: OMA) will hold its 3Q17 earnings conference call on October 18, 2017 at 11 am Eastern time, 10 am Mexico City time. The conference call is accessible by calling 1-888-668-1648 toll-free from the U.S. or 1-719-325-2329 from outside the U.S. The conference ID is 9486747 . The c
Slide 32: Annex Table
Annex Table 1
Slide 33: Passenger Traffic by airport
Paseng (Terminal Passengers -Excudes Transit Passengers) Trafic Grupo Aeroporiuario del Cenro More, SAB. de CV. Total Passengers sae sa17 Var ois ouiT Var ‘esulco a eC) Ciudad ees cose 228026, ee eissre senna Cclsein ame 423073 1 tze7s tenet Chinas gross oraz (ta) nama csone 112 Durango u7es7 107.11
Slide 34: Annex Table
Annex Table 2
Slide 35: Consolidated Statement of Financial Position
(Thousands of Pesos) September December 31, September Bae si 30,2018 mrs 32017 Septtisept6_Sept7iDect6 ‘Assets Current Assets Ccash and Cash Equivalents zeriago 300572 2.182.880, Trade Accounts Receivable - Net e7e.118 = 718,130 587,634 Trade Accounts Receivable fom Related Parties 44,281 48,032 To,
Slide 36: Annex Table
Annex Table 3
Slide 37: Consolidated Statement of Comprehensive Income
jo del Centro Norte, S. de CV. ymprehensive income (Thousands of Pesos) 3016 3017 ‘evar Mig tT %Var Revenues Aeronautical Revenues 1055410 1,163,441 10.2 «-2,818,876 3.256.860 15.5 Non-Aeronautical Revenues 336,772 368,475 88 971,855 1,068,301 97 ‘Aeronautical Revenues +Non-Aeronautical Revenues 1,3
Slide 38: Annex Table
Annex Table 4
Slide 39: Unaudited Consolidated Cash Flow Statement
‘Grupo Aeroportuario del Centro Norte, SAB. de CV. Unauxited Consolidated Cazh Flow Statement (Thousands of Pesce) ‘As of September 20, 2016 2017 evar. ‘Dperating Activites Income Before Taxes 4950405 2,401,797. 126, ‘change inthe velue of cash and cash equiwlents fr frvalve ~) 137.374 na. Depreciat
Slide 40: Annex Table
Annex Table 5
Slide 41: Statement of Changes in Stockholders' Equity
Grupo Aeroportuario del Centro Norte, S.A.B. de C. Unaudited Statement of Changes in Stockholders’ Equity ‘As of September 30, 2016 (Thousand Pesos) ‘Additional Share Non- Total Number of Capital stock Paidin Retained Repurchase Labor Controlling Stockholder’: Shares __Nominal__Capital__Eamnings Res
Slide 42: Annex Table
Annex Table 6
Slide 43: Results by airport
Monterey jo 30 gM tay uci 36 30 Mss aM Total Pasenges 33 ayqa——«ygeq «77 Total Paseiges 33 87 ta aglow Teal Revenues Sax esy7do 70358725437 —_TotaRenmes 6454 sar Bray maa ‘Perna Reverses SASS SBoasE 208/664 agnBgr2 Aronia Reverses saado soaty ad sags Non Acetic evens su7se2 343370 aagssy 692 Non-Aao
Slide 44: Analysts covering OMA
Annex Table 7 In accordance with the requirements of the Mexican Stock Exchange, the analysts covering OMA are:
Slide 45: Analyst coverage list
Company Name Actinver Casa de Bolsa Pablo Abraham Bank of America Menill Lynch Roberto Otero Banorte-XE José Espitia Barclays Bank PLC Pablo Monsivais, BBVA Bancomer Mauricio Hemandez Prida Bradesco BBI Leandro Fontanesi Citigroup ‘Stephen Trent Credit Suisse Felipe Vinagre Goldman Sachs Marcio Prad
Slide 46: Notes to the Financial Information
Notes to the Financial Information Financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”), and presented in accordance with IAS 34 “Interim Financial Reporting.” In December 2015, OMA elected early adoption of the amendments established by Internati
Slide 47: Notes on baggage screening and construction revenue
in checked baggage. The cost of maintenance of the screening equipment is considered a regulated activity and will be recovered through the maximum rates, while the operational aspects are assessed as a non-regulated service charge. In accordance with the Civil Aviation Law and the regulations issue
Slide 48: Notes on maintenance provision, MDP and maximum rate system
terminal buildings. The provision is increased periodically for the wear and tear to the concessioned assets and the Company’s estimates of the disbursements it needs to make. The use of the provision corresponds to the outflows made for the conservation of these operational assets. Master Developme
Slide 49: Workload and forward-looking statements
Workload Unit: one terminal passenger or one cargo unit. This report may contain forward-looking information and statements. Forward-looking statements are statements that are not historical facts. These statements are only predictions based on our current information and expectations and projection
Central North Airport Group — Q3 2017 Earnings Presentation on 6ix