International Public Partnerships Ltd · LSE:INPP
International Public Partnerships — H1 2023 Earnings Presentation
46 slides from International Public Partnerships's earnings presentation, September 2023
Slide 1: HY 2023 Results Presentation
HY 2023 RESULTS PRESENTATION September 2023 IMAGE Northfleet Technology College, Kent, UK Photo credit: Bob Wheeler Photography
Slide 2: Important Information
IMPORTANT INFORMATION The information in this document has been prepared at the direction of International Public Partnerships Limited (“INPP” or the Potential investors should be aware that any investment in the Company is speculative, involves a high degree of risk, and could "Company") solely for
Slide 3: Overview
OVERVIEW IMAGE BeNEX (ODEG), Germany
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: Response to Current Market Environment
RESPONSE TO CURRENT MARKET ENVIRONMENT The Company has committed to taking the following actions to ensure it remains well positioned in the current market environment Enhancing short-term Realising value from its dividend growth existing portfolio Reducing the use of its Keeping its long-term corpo
Slide 6: HY 2023 Highlights
HY 2023 HIGHLIGHTS FINANCIAL HIGHLIGHTS POSITIVE ENVIRONMENTAL AND SOCIAL CHARACTERISTICS5 155.2p >650,000 >2.7m 5.0% PATIENTS TREATED IN HOMES CAPABLE OF BEING NAV P/SHARE1 DIVIDEND GROWTH2 HEALTHCARE FACILITILIES DEVELOPED AND POWERED BY RENEWABLE ENERGY THROUGH OFTOS 31 December 2022: 159.1p/shar
Slide 7: Portfolio Performance and Valuation
PORTFOLIO PERFORMANCE AND VALUATION IMAGE Olga Primary School, Tower Hamlets, UK Photo credit: Bob Wheeler Photography
Slide 8: Predictable, Long-Term Revenues
PREDICTABLE, LONG-TERM REVENUES +5.0% +2.5% DIVIDEND GROWTH growth in growth in 2023 2024 pence per share +c.2.5% 9 consistent annual growth YoY Actual Forecast 8 8.13 8.33 2023 DIVIDEND GROWTH1 7 7.55 7.74 7.36 5.0% 7.00 7.18 6 6.65 6.82 6.15 6.30 6.45 5 5.70 5.85 6.00 5.25 5.40 5.55 4 4.06 3 Divid
Slide 9: Valuation Discount Rate Overview
VALUATION DISCOUNT RATE OVERVIEW NAV 1 PER SHARE WEIGHTED AVERAGE RISK WEIGHTED AVERAGE RISK CAPITAL DISCOUNT CAPITAL DISCOUNT RATE 2 PORTFOLIO DISCOUNT RATE 3 RATE RANGE 4 155.2p 8.1% 8.0% 7.0% - 10.8% 31 December 2022: 159.1p 31 December 2022: 7.7% 31 December 2022: 7.5% 31 December 2022: 5.7% - 1
Slide 10: NAV Movements
NAV MOVEMENTS INVESTMENT RISK PREMIA FOREIGN EXCHANGE RATES MACROECONOMIC ASSUMPTIONS The impact of the increase in GBP strengthened against all six currencies INPP was exposed Impact is due to small changes to short-term inflation rate and government bond yields was partially to during the period,
Slide 11: High Levels of Protection to Increasing Base Rates
HIGH LEVELS OF PROTECTION TO INCREASING BASE RATES ASSET LEVEL DEBT HEDGED FOR THE FULL TERM (PPPS & OFTOS; 62%) ▪ Asset level debt is non-recourse to the Company ▪ Generally fixed-term, fixed-rate debt ▪ Weighted average asset leverage of c.65%1 ▪ Principal generally amortises to nil over the conce
Slide 12: HY 2023 Portfolio Review
HY 2023 PORTFOLIO REVIEW IMAGE Dudgeon OFTO
Slide 13: Cadent: Essential UK Gas Distribution Business
CADENT IS AN ESSENTIAL UK GAS DISTRIBUTION BUSINESS SERVING 11 MILLION HOMES AND BUSINESSES INVESTMENT UPDATE INVESTMENT OVERVIEW ▪ Cadent revenues are regulated by Ofgem and are reviewed every five years with the current price control period running until March 2026. Ofgem is expected to start cons
Slide 14: Tideway Super-Sewer Under the River Thames
TIDEWAY IS BUILDING A ‘SUPER-SEWER’ UNDER THE RIVER THAMES TO CREATE A HEALTHIER ENVIRONMENT FOR LONDON INVESTMENT UPDATE INVESTMENT OVERVIEW ▪ Project remains on course to be fully operational in 2025 following the completion of the secondary lining works and system commissioning phase. When fully
Slide 15: Diabolo Rail Link Brussels Airport
DIABOLO IS A RAIL TRANSPORTATION ASSET LINKING BRUSSELS AIRPORT WITH BELGIUM’S NATIONAL RAIL NETWORK INVESTMENT UPDATE INVESTMENT OVERVIEW ▪ Passenger numbers continue to recover and are currently running at c.95% of pre-Covid levels. The latest traffic forecast report for Diabolo continues to assum
Slide 16: OFTOs
OFTOS OFTOS COMPRISE ELECTRICITY TRANSMISSION ASSETS CONNECTING OFFSHORE WIND FARMS TO THE ONSHORE GRID INVESTMENT UPDATE INVESTMENT OVERVIEW ▪ INPP’s existing 10 OFTOs have the combined capability of transmitting enough renewable electricity to power an estimated equivalent of c.2.7m homes, contrib
Slide 17: 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 Trains continued to perform well and in line with expectations during the period with its trains on lease to TOCs across the UK as planned REVENUES DERIVED FRO
Slide 18: Other Asset Management Updates
OTHER ASSET MANAGEMENT UPDATES AVAILABILITY-BASED PPPS BENEX DIGITAL INFRASTRUCTURE ▪ Excellent operational performance with ▪ The transport authorities have introduced a ▪ In May 2023, the Company announced its availability at 99.8% and performance subsidised regional rail ticket for a period of tw
Slide 19: 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 DELIVERED IN H1 2023 ▪ The Company categorised itself as an Article 8 ▪ Monitoring emerging requirements for Taskfo
Slide 20: Looking Forward
LOOKING FORWARD IMAGE Wakatipu High School, Queenstown, New Zealand
Slide 21: Value-Focused Portfolio Development
VALUE-FOCUSED PORTFOLIO DEVELOPMENT EXISTING COMMITMENTS The Company has long-standing commitments to invest in the following two projects. These two commitments are supported by letters of credit already issued under the Company’s CDF: EXISTING COMMITMENTS LOCATION ESTIMATED INVESTMENT STATUS Flind
Slide 22: H1 2023 Summary
H1 2023 SUMMARY RESILIENT PORTFOLIO WITH CONSISTENT RETURNS Strong Increased High-level of Well covered performance dividends inflation-linkage dividends Strong operational and 2023 dividend target1 Maintained 0.7% inflation Delivered on forward dividend financial performance despite represents a li
Slide 23: Positive Outlook
POSITIVE OUTLOOK COMMITMENT TO LONG-TERM SHAREHOLDER VALUE UNDERPINNED BY SECTOR FUNDAMENTALS ▪ To ensure the Company remains well positioned, the Board has committed to: ▪ Enhancing short-term dividend growth ▪ Realising value from its existing portfolio ▪ Reducing the use of the Company’s CDF ▪ Re
Slide 24: Appendices
APPENDICES IMAGE Olga Primary School, Tower Hamlets, UK Photo credit: Bob Wheeler Photography
Slide 25: Portfolio Overview and Valuation
PORTFOLIO OVERVIEW AND VALUATION IMAGE Angel Trains, UK Photo credit: Angel Trains
Slide 26: 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 27: Historic NAV Performance
80.0 90.0 100.0 110.0 120.0 130.0 140.0 150.0 160.0 170.0 Nov 06 Feb 07 May 07 Aug 07 NAV1 PER SHARE Nov 07 Feb 08 May 08 Aug 08 Nov 08 Feb 09 NAV SINCE INCEPTION May 09 Aug 09 INPP NAV – 1 TO 5 YEARS Nov 09 Feb 10 May 10 Aug 10 Nov 10 Feb 11 May 11 30 Jun 18 Aug 11 146.3p Nov 11 Feb 12 May 12 1. Th
Slide 28: 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 30 JUN 2023 30 JUN 20231 30 JUN 2023 31 DEC 2022 SUPPORTED Gas UK Operational 7% Risk Capital 14.8% 14.5% Distribution UK Waste Water Under Constructi
Slide 29: Investments at Fair Value
INVESTMENTS AT FAIR VALUE INVESTMENTS INVESTMENTS AT FAIR VALUE PORTFOLIO RETURN FOREIGN EXCHANGE RATES An increase of £108.1m The rebased investments at fair value The Portfolio Return captures broadly During the period, Sterling strengthened owing to new investments is presented to allow an assess
Slide 30: Portfolio Analysis
PORTFOLIO ANALYSIS 1. The majority of projects and businesses benefit from availability-based or regulated revenues. ‘Other’ includes Family Housing for Service Personnel (‘FHSP’) (4%), Health (4%), Digital (2%) and Courts (2%) among other assets. 2. Risk Capital includes both investment and busines
Slide 31: 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% 50% IN
Slide 32: Valuation Sensitivities and Discount Rate Trends
VALUATION SENSITIVITIES AND DISCOUNT RATE TRENDS ESTIMATED IMPACT OF CHANGES IN KEY VARIABLES TO 30 JUNE 2023 BASED ON NAV OF 155.2 PENCE PORTFOLIO INFLATION- PER SHARE LINKAGE1 0.7%p.a. (31 December 2022: 0.7% p.a.) HISTORICAL WEIGHTED AVERAGE RISK CAPITAL DISCOUNT RATE 10% 8% 6% 4% 2% 0% Dec-10 Ju
Slide 33: Macroeconomic Assumptions
MACROECONOMIC ASSUMPTIONS 30 JUNE 2023 31 DECEMBER 2022 Inflation rates UK RPI: 9.00% until Dec 2023, RPI: 8.00% until Dec 2023, 3.75% until Dec 2024, 2.75% thereafter 2.75 thereafter1 CPIH: 7.00% until Dec 2023, CPIH: 7.00% until Dec 2023, 2.75% until Dec 2024, 2.00% thereafter 2.00% thereafter Aus
Slide 34: Short-Term Inflation Sensitivities
SHORT-TERM INFLATION SENSITIVITIES INFLATION SENSITIVITIES AS AT 30 JUNE 2023 ▪ 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 rates
Slide 35: 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) 500 400 300 200 100 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 2048 2049 2050 Cas
Slide 36: 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 37: 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 38: 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 39: Portfolio Information
PORTFOLIO INFORMATION INVESTMENTS MADE DURING THE SIX MONTHS TO 30 JUNE 2023 EALING BUILDING SCHOOLS FOR THE FUTURE (‘BSF’) Location Investment Date Description UK March 2023 In March 2023, the Company acquired a further 20% investment in Ealing BSF, increasing its holding to 100%. This BSF scheme p
Slide 40: Portfolio Information Continued
PORTFOLIO INFORMATION CONTINUED PROJECTS UNDER CONSTRUCTION TIDEWAY FLINDERS UNIVERSITY HEALTH AND MEDICAL RESEARCH BUILDING Location Status at 30 June 2023 Location Status at 30 June 2023 UK Scheduled for completion in 20252 Australia On schedule Construction % of investment at fair value Construct
Slide 41: Cash Generation and Operating Costs
CASH GENERATION AND OPERATING COSTS Six months to 30 Six months to 30 Year to SUMMARY OF CASH FLOWS June 2023 June 2022 31 December 2022 £ Million £ Million £ Million Opening cash balance 92.8 56.1 56.1 Increase reflects the continued growth and inflation- Cash from investments 108.6 91.4 205.9 link
Slide 42: About Amber Infrastructure
ABOUT AMBER INFRASTRUCTURE IMAGE Tideway, UK Photo credit: Tideway
Slide 43: 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 investing in First dedicated Digital Infrastructure fund investing in long-term public infras
Slide 44: 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, AUSTRALIA AND NEW ZEALAND Helsinki EUROPE 20 Federal German Ministry of Education and Research Headquarters Dublin Courts (Ireland) | Diabolo Rail Link (Belgium) | BeNEX Rail UNITE
Slide 45: Contacts
CONTACTS IMAGE Shirley Boys' and Avonside Girls' Schools, New Zealand
Slide 46: Contact Details
CONTACT DETAILS AMBER FUND MANAGEMENT (INVESTMENT ADVISER) FTI CONSULTING (PR & COMMUNICATIONS) Director, INPP: Giles Frost Ed Berry, Mitch Barltrop, Jenny Boyd Telephone: +44 (0)20 7939 0550 Telephone: +44 (0) 7703 330 199 / (0) 7807 296 032 Email: Giles.Frost@amberinfrastructure.com / (0) 7971 005
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