Auckland International Airport Limited · NZX:AIA
Auckland International Airport — H1 FY14 Earnings Presentation
27 slides from Auckland International Airport's earnings presentation, Feb 20, 2014
Slide 1: Interim Results 2014
Interim Results 2014 Auckland International Airport Limited 20 February 2014
Slide 2: Interim results presentation notice
This interim results presentation dated 20 February 2014 provides additional comment on the media and financial materials released before the market opened on the same date. As such, it should be read in conjunction with, and subject to, the explanations and views provided in that release. 2
Slide 3: Summary of the first half of FY14
Summary of the first half of FY14 Adrian Littlewood 3
Slide 4: A great start to FY14
Interim Results 2014 A great start to FY14 Passenger movements Total profit 7.6m up 4.8% $85.9m up 11.7% Revenue Underlying profit $238.5m up 6.7% $86.7m up 13.9% Operating EBITDAFI Proposed capital return $177.9mup 6.9% $453.7m anticipated April 2014 4
Slide 5: Our plan in action
Interim Results 2014 Our plan in action • New routes and capacity underpin passenger growth in first half of year • Key participant in development of tourism industry’s Tourism 2025 strategy to deliver growth for the country • Constantly improving passenger experience to meet changing passenger mix
Slide 6: Our plan in action
Interim Results 2014 Our plan in action • Capital return announced and approved by shareholders • Continuing productivity drive in airspace and terminal areas with industry partners • Ongoing investment in new airport operating system • Announced 30-year vision for the ‘airport of the future’ • Dome
Slide 7: Financial performance
Financial performance Simon Robertson 7
Slide 8: Profitability climbing strongly
Interim Results 2014 Profitability climbing strongly Half year financial results 6 months to 6 months to 31 Dec 2013 31 Dec 2012 Change $m $m % Revenue 238.506 223.552 6.7 Expenses 60.607 57.191 6.0 Earnings before interest, taxation, depreciation, fair value adjustments and investments in 177.899 1
Slide 9: Underlying profit reconciliation
Interim Results 2014 Results of the plan in action Underlying profit 6 months to 6 months to 31 Dec 2013 31 Dec 2012 Reported Underlying Reported Underlying profit Adjustments earnings profit Adjustments earnings $000 $000 $000 $000 $000 $000 Earnings before interest, taxation, depreciation, fair va
Slide 10: Market growth lifts passengers
Interim Results 2014 Market growth lifts passengers Profitability climbing strongly Auckland passenger movements 6 months to 6 months to Change 31 Dec 2013 31 Dec 2012 % International arrivals 1,967,636 1,873,277 5.0 International departures 1,870,949 1,781,041 5.0 International passengers excluding
Slide 11: Broad based growth
Interim Results 2014 Broad based growth Route capacity and passenger growth -0.7% +4.1% +13.1% +19% capacity passenger capacity passenger +16.1% +23.6% +4.8% +4.1% capacity passenger capacity passenger 11
Slide 12: Bigger aircraft deliver capacity
Interim Results 2014 Bigger aircraft deliver capacity Movements and MCTOW 6 months to 6 months to Change 31 Dec 2013 31 Dec 2012 % Aircraft movements International departures 23,080 22,412 3.0 Domestic aircraft movements 55,879 55,838 0.1 Total aircraft movements 78,959 78,250 0.9 MCTOW (tonnes) Int
Slide 13: Aeronautical revenue stands out
Interim Results 2014 Aeronautical revenue stands out 6 months to 6 months to 31 Dec 2013 31 Dec 2012 Change $m $m % Airfield income 44.162 40.386 9.3 Passenger services charge 65.826 59.950 9.8 Retail income 63.779 62.371 2.3 Car park income 21.880 20.450 7.0 Rental income 29.038 27.013 7.5 Rates re
Slide 14: Costs match drivers
Interim Results 2014 Costs match drivers Expenses 6 months to 6 months to Change 31 Dec 2013 31 Dec 2012 % Staff 21,299 18,174 17.2 Asset management, maintenance and airport 20,322 19,276 5.4 operations Rates and insurance 5,033 4,766 5.6 Marketing and promotions 6,822 6,977 (2.2) Professional servi
Slide 15: Balance sheet strengthens further
Interim Results 2014 Balance sheet strengthens further Profitability climbing strongly December 2013 June 2013 December 2012 Debt / debt + equity 31.3% 31.8% 32.4% Debt / enterprise value 19.5% 22.8% 24.9% Debt / EBITDAFI (times) 3.19 3.45 3.55 FFO interest cover (times) 4.56 4.16 3.98 Average inter
Slide 16: Shareholders benefiting
Interim Results 2014 Shareholders benefiting Share price appreciation - local currency 3.9 7,038 AIA Share Price NZX50 NZX10 6,538 3.4 6,038 5,538 2.9 5,038 4,538 2.4 4,038 1.9 3,538 3,038 1.4 2,538 1-Jul-09 1-Jan-10 1-Jul-10 1-Jan-11 1-Jul-11 1-Jan-12 1-Jul-12 1-Jan-13 1-Jul-13 Share price Share pr
Slide 17: Faster, higher, stronger
Faster, higher, stronger Adrian Littlewood 17
Slide 18: Market investment pays off
Interim Results 2014 Market investment pays off New capacity announcements in first six months: • Malaysia Airlines: 6pw to 7pw Nov-Jan • China Southern: 7pw to 10pw until Mar 2014; plus 2 Chinese New Year return flights; +5% capacity using B787 • China Airlines: +30% capacity Nov-Feb • Qantas: A330
Slide 19: Tourism industry aspirations
Interim Results 2014 Tourism industry aspirations Prioritise insight to drive and track progress Focus on Grow sustainable productivity for air connectivity profit for volume Drive value Target for value through outstanding visitor experience 19
Slide 20: Seeking more retail space
Interim Results 2014 Seeking more retail space • Retail passenger spend rate decreased 3.1% in first six months, largely due to restrictions in Australian outbound tobacco sales, together with changes in Chinese travel laws and a material change in Australian currency • Strong programme and range of
Slide 21: Car-parking lifting
Interim Results 2014 Car-parking lifting • First six months benefitted from 400 new car-parks at the domestic terminal, with revenue increasing 8% notwithstanding an 8% decrease in average revenue per parking space (ARPS) • Overall ARPS rose 0.9% • Future car-parking plans include an extra 1,000 Par
Slide 22: Hotel investment focus
Interim Results 2014 Hotel investment focus • Very strong average occupancy rates: Novotel up 5.8% to 86.4%; Ibis Budget up 21% to 93.5% • Committed $7.8m to extend Ibis Budget by 73 rooms – construction commencing in April • Confidence to extend hotel portfolio in the future Change on prior July Au
Slide 23: Property transformation
Interim Results 2014 Property transformation • Transformation from a collection of projects to a place to shop, eat, work and play is taking shape • Momentum building with several projects under construction: Panalpina (3,600m2 warehouse and office), DHL (12,000m2 warehouse) and 9 ha of land invento
Slide 24: Airport of the future
Interim Results 2014 Airport of the future • In November we outlined our 30-year vision for the ‘airport of the future’ that delivers ‘southern hub’ aspiration and supports our growth from 14.5m to 40m passengers • Since November we have been formally engaging with the broader aviation sector and ot
Slide 25: Regulatory update
Interim Results 2014 Regulatory update • Commerce Commission's Christchurch 56G conclusions are that key market conditions (earthquakes) appear to have had more influence than information disclosure regulation and that while expected returns are within an acceptable range for the first five-year pri
Slide 26: Outlook is strengthening
Interim Results 2014 Outlook is strengthening • We continue to see the aviation market solidifying recent gains and growth is extending further into the 2014 financial year • As always our guidance is subject to any material adverse events, one-off items, non-cash fair value changes to property and
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