International Public Partnerships Ltd · LSE:INPP
International Public Partnerships — H1 2020 Earnings Presentation
38 slides from International Public Partnerships's earnings presentation, September 2020
Slide 1: 2020 Interim Results Presentation
2020 Interim Results Presentation SEPTEMBER 2020
Slide 2: Important Information
Important Information The information in this document has been prepared at the direction of International Public contract or commitment whatsoever. This document does not constitute a recommendation Partnerships Limited (“INPP”) solely for use at an information presentation about INPP. This regardi
Slide 3: Overview
INTERNATIONAL PUBLIC PARTNERSHIPS we VO Pat | | Overview jet
Slide 4: Our Approach
Our Approach Our aim is to deliver long-term benefits for all stakeholders by investing responsibly in public and social infrastructure CONSISTENT AND DIVERSIFIED STRONG RESPONSIBLE PREDICTABLE RETURNS PORTFOLIO INVESTMENT Mainly regulated Strong, inflation-linked cash ‘Hands-on’ asset or contractua
Slide 5: HY 2020 Performance and Operational Overview
HY 2020 Performance and Operational Overview RESILIENT OPERATIONAL PERFORMANCE IN THE PERIOD • Overall our portfolio continued to perform well, both for shareholders and wider stakeholders and overall net cashflow in the period was as projected • The Company has, to date, experienced limited impact
Slide 6: HY 2020 Financial Highlights
HY 2020 Financial Highlights NET ASSET VALUE (‘NAV’) 1 DIVIDEND GROWTH 2 CASH DIVIDEND PROFIT BEFORE TAX COVER3 £2.4bn (Dec 2019: £2.4bn) or 2.5% 1.3x £35.4m 149.2p/share (Dec 2019: 150.6p/share) (HY 2019: 2.6%) (HY 2019: 1.3x) (HY 2019: £83.7m) FIVE-YEAR CORRELATION PORTFOLIO INFLATION ANNUALISED T
Slide 7: Portfolio Performance and Valuation
Portfolio Performance and Valuation
Slide 8: Confidence in Long-Term Revenues
Confidence in Long-Term Revenues DIVIDEND GROWTH pence per share Forecast Actual HY 2020 FY 2020 FY 2021 7.36 7.55 DIVIDEND 7.00 7.18 TARGET TARGET 6.82 6.65 DIVIDEND1 DIVIDEND1 6.30 6.45 5.85 6.00 6.15 5.25 5.40 5.55 5.70 3.68 3.68p 7.36p 7.55p per share per share per share 2007 2008 2009 2010 2011
Slide 9: Valuation Discount Rate Overview
Valuation Discount Rate Overview NAV1 WEIGHTED AVERAGE WEIGHTED AVERAGE RISK CAPITAL DISCOUNT RISK CAPITAL PORTFOLIO RATE RANGE3 DISCOUNT RATE 2 DISCOUNT RATE £2.4bn or 7.64% 7.08% 5.55% - 11.18% 149.2 p per share 30 JUN 2020 31 DEC 2019 VARIANCE NAV1 PER SHARE 149.2p 150.6p (1.4p) WEIGHTED AVERAGE
Slide 10: Net Asset Valuation
Net Asset Valuation £m 2,550 76.5 100.8 2,500 2,450 2,425.2 52.1 2,409.4 51.5 2,400 30.4 22.5 2,350 2,300 2,250 2,200 2,150 2,100 2,050 NAV at 31 Dec 2019 Change in Government Change in Investment Cash Distributed to INPP Change in Foreign Change in Macroeconomic NAV Return 2 NAV at 30 Jun 2020 Bond
Slide 11: Investments at Fair Value
Investments at Fair Value £m 2,450 11.7 82.9 35.2 22.5 2,400 2,382.6 75.4 24.3 2,375.2 2,350 2,311.4 2,300 2,250 2,200 2,150 2,100 2,050 Investments at Fair Investments Investment Rebased Investments Portfolio Return1 Change in Discount Change in Foreign Change in Investments at Fair Value at 31 Dec
Slide 12: 2020 Portfolio Review
INTERNATIONAL PUBLIC PARTNERSHIPS 2020 Portfolio Review
Slide 13: Tideway super-sewer under the River Thames
Tideway is building the 25km ‘super-sewer’ under the River Thames to create a healthier environment for London KEY INVESTMENT FEATURES Climate-resilient asset Long-term investment Bespoke regulatory Inflation-linked Government support provides constructed with the with a 120-year design arrangement
Slide 14: Diabolo rail link to Brussels airport
Diabolo is a strategic rail transportation asset linking Brussels airport with Belgium’s national rail network KEY INVESTMENT FEATURES Historically, overall Revenues dependent 100%-owned with influence Long duration asset Inflation-linked passenger numbers on passenger numbers over project operation
Slide 15: Cadent UK gas distribution business
Cadent is an essential UK gas distribution business with four geographic monopolies, serving c.50% of UK gas customers KEY INVESTMENT FEATURES No exposure to Owned by a highly Inflation-linked revenues Strong and Cadent is piloting the commodity or demand experienced consortium regulated by Ofgem us
Slide 16: Other – Covid-19 impacts
Other – Covid-19 impacts ▪ Notwithstanding the closure of many of the Company’s PPP buildings, the revenues have been largely unaffected owing PPP projects to their availability-based nature. In some instances, facilities were repurposed to help support the wider community whilst protecting the heal
Slide 17: Market Environment and Opportunities
Market Environment and Opportunities
Slide 18: Pipeline Overview
Pipeline Overview KNOWN COMMITMENTS LOCATION EXPECTED INVESTMENT PERIOD ESTIMATED INVESTMENT 1 Digital Infrastructure UK Operational businesses £12.1m Offenbach Police Headquarters2 Germany c.30 years £8.5m Rampion OFTO UK c.20 years £35 - 45m Beatrice OFTO UK c.23 years Up to £60m ESTIMATED CAPITAL
Slide 19: Outlook
Outlook ROBUST AND RESILIENT FUTURE SUPPORTIVE PORTFOLIO OPPORTUNITIES MACRO ENVIRONMENT We have a strong portfolio and Lower-for-longer interest rate We have a number of preferred continue to expect long term environment supports attractiveness bidder and other new investment performance in line wi
Slide 20: Appendices
INTERNATIONAL PUBLIC PARTNERSHIPS Appendices
Slide 21: Responsible Investment
Responsible Investment
Slide 22: Responsible Investment Objectives and Progress
Responsible Investment Objectives and Progress ADVANCE ENVIRONMENTAL DRIVE SUSTAINABLE GROWTH INTEGRATE ESG AND SOCIAL PROGRESS The Company integrates ESG Through strong governance, the consideration into all aspects of its Company actively works towards The Company sees ESG drivers as business. In
Slide 23: Responsible Investment Impact
Responsible Investment Impact The Investment Adviser, on the behalf of the Company, has aligned its investment approach with the SDGs. For each investment sector, the Company has identified which SDGs its investments are positively impacting TRANSPORT SOCIAL INFRASTRUCTURE >229,000,000 Annual passen
Slide 24: Portfolio Overview and Valuation
Portfolio Overview and Valuation
Slide 25: INPP's Top Investments
INPP’s Top 10 Investments NAME OF STATUS AT % HOLDING AT % INVESTMENT FAIR % INVESTMENT FAIR LOCATION SECTOR INVESTMENT 30 JUN 2020 30 JUN 20201 VALUE AT 30 JUN 2020 VALUE AT 31 DEC 2019 UK Gas Distribution Operational 7% Risk Capital 16.6% 17.1% Under UK Waste Water 16% Risk Capital 8.9% 9.2% Const
Slide 26: Valuation Methodology
Valuation Methodology NAV CALCULATION 1 ADDITIONAL VALUE DRIVERS ▪ ‘Sum-of-the-parts’ aggregation of the present value of We believe additional value may exist additional to that each of the Company’s investments plus other balance captured in our valuation process. These items are not sheet items c
Slide 27: Portfolio Analysis
Portfolio Analysis 1 SENIOR DEBT CONSTRUCTION 11% LATER STAGE 9% INVESTOR3 32% 44% MODE OF <50% OWNERSHIP 50% 100% INVESTMENT ACQUISITION/ OWNERSHIP STAKE OWNERSHIP TYPE ASSET STATUS 68% 91% 6% 89% EARLY OPERATIONAL STAGE INVESTOR2 RISK CAPITAL 50% – 100% OWNERSHIP IRELAND ITALY OTHER CANADA 1%<1% M
Slide 28: Valuation Sensitivities and Discount Rate Trends
Valuation Sensitivities and Discount Rate Trends ESTIMATED IMPACT OF CHANGES IN KEY VARIABLES ON THE 30 JUN 2020 NAV OF 149.2p PER PORTFOLIO INFLATION SHARE LINKAGE1 Discount rates +/-1% -13.9 16.8 Inflation +/- 1% -12.9 15.8 0.78% p.a. Foreign Exchange +/-10% -3.9 3.9 (Dec 2019: 0.82% p.a.) Deposit
Slide 29: Macroeconomic Assumptions
Macroeconomic Assumptions ASSUMPTION JURISDICTION 30 JUN 2020 31 DEC 2019 UK 2.75% RPI/2.00% CPIH 2.75% RPI / 2.00% CPIH Australia 2.50% 2.50% INFLATION RATES Europe 2.00% 2.00% Canada 2.00% 2.00% US1 N/A N/A UK 1.00% 2.00% Australia 2.00% 3.00% LONG-TERM Europe 1.00% 2.00% DEPOSIT RATES2 Canada 2.0
Slide 30: Diversified Portfolio and Partners
Diversified Portfolio and Partners PORTFOLIO BY INVESTMENT TYPE 1 INPP SERVICE PROVIDERS 1 OTHER - ANGEL TRAINS, UK BSF 2 INFRABEL NV VAN BENEX AND NDIF PUBLIEK RECHT PFI DEBT 8% 8% AGGREGATOR DEBT 1% 8% 8% 3% 8% UK 'CLASSIC' PFI DOWNER & OFTO DEBT 17% 7% SPOTLESS OPERATING UK NHS LIFT 8% BUSINESSES
Slide 31: Portfolio Information
Portfolio Information INVESTMENTS DURING THE SIX MONTHS TO 30 JUNE 2020 INVESTMENT LOCATION OPERATIONAL STATUS AMOUNT INVESTMENT DATE BSF ESSEX PROJECT UK Operational £6.7m 26 May 2020 NDIF UK Operational £5.0m Various TOTAL £11.7m INVESTMENTS MADE POST PERIOD END INVESTMENT LOCATION OPERATIONAL STA
Slide 32: Cash Generation and Operating Costs
Cash Generation and Operating Costs SUMMARY CASH FLOW 30 JUN 2020 (£m) 30 JUN 2019 (£m) NOTES Opening cash balance 45.6 84.7 Cash from investments 82.9 77.9 Increase reflects further growth and maturity of the portfolio Corporate costs (for ongoing charges ratio) (14.6) (12.8) Other corporate costs
Slide 33: Gearing and Investment Life
Gearing and Investment Life TIDEWAY ASSET LEVEL DEBT CADENT 9% ▪ Asset level debt is non-recourse to the Company 17% OFTOS PPP & OFTOS 22% ▪ Generally fixed-term, fixed-rate debt ▪ Principal generally amortised over the life of the project ▪ Structure is intended to minimise risk 8% REGULATED INVEST
Slide 34: About Amber Infrastructure
About Amber Infrastructure
Slide 35: Specialist fund manager
Specialist fund manager Amber manages and advises six co-mingled funds and two managed accounts. Of these, six are closed-ended unlisted structures AMBER FUND FOCUS HIGHLIGHTS PARTNERS SIZE 14-year track record; Long-term public c.£2.7bn FTSE 250-listed Listed investors infrastructure assets market
Slide 36: Amber's extensive international track record and presence
Amber’s extensive international track record and presence Amber has offices and personnel in London, Brussels, Edinburgh, Munich, Prague, Vienna, Warsaw, Australia and the United States Darwin Prague Edinburgh Brussels Warsaw San Vienna New York Munich Sydney Francisco London Melbourne NORTH AMERICA
Slide 37: Contacts
INTERNATIONAL PUBLIC PARTNERSHIPS Contacts
Slide 38: 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 Investment Director: Chris M
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