International Public Partnerships Ltd · LSE:INPP
International Public Partnerships — Investor Day (February 2024)
45 slides from International Public Partnerships's investor day presentation, Feb 27, 2024
Slide 1: INPP Capital Markets Day
INPP CAPITAL MARKETS DAY 27 February 2024 IMAGE Dudgeon OFTO, UK
Slide 2: Important Information
IMPORTANT INFORMATION By reading this presentation, you agree to be bound by the following limitations: The information in this presentation has been prepared at the direction of International Public Partnerships Limited (“INPP” or the "Company"), a FTSE 250-listed, Guernsey incorporated investment
Slide 3: Agenda
AGENDA 09.00 am Arrival and coffee 09.25 am Welcome and introductions Mike Gerrard, INPP 09:35 am INPP: Six-month review Chris Morgan, Amber Infrastructure 09:50 am Amber Asset Management update Dan Ward, Amber Infrastructure 10:05 am Amber overview and update Gavin Tait, Amber Infrastructure 10:20
Slide 4: Welcome and Introduction
WELCOME AND INTRODUCTION Mike Gerrard, INPP Chair IMAGE BeNEX (ODG), Germany
Slide 5: INPP: Six-Month Review
INPP: SIX-MONTH REVIEW Chris Morgan, Amber Infrastructure IMAGE Wakatipu High School, New Zealand
Slide 6: 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 7: Response to Current Market Environment
RESPONSE TO CURRENT MARKET ENVIRONMENT THE COMPANY PREVIOUSLY ANNOUNCED THAT IT WOULD TAKE THE FOLLOWING ACTIONS TO ENSURE IT REMAINS WELL POSITIONED IN THE CURRENT MARKET ENVIRONMENT Enhancing short-term Realising value from dividend growth the existing portfolio Reducing the use of its Keeping oth
Slide 8: Enhancing Short-Term Dividend Growth
- ENHANCING SHORT-TERM DIVIDEND GROWTH 2023 TARGET DIVIDEND 2023 DIVIDEND GROWTH INCREASED TO 5.0% 1 GROWTH1 5.0% +5.0% +2.5% growth in growth in pence per share 20231 20241 +c.2.5% consistent annual dividend growth 9 Actual Forecast 8 8.13 8.33 7 7.55 7.74 7.18 7.36 6.82 7.00 6 6.15 6.30 6.45 6.65
Slide 9: Realising Value from the Existing Portfolio
- REALISING VALUE FROM THE EXISTING PORTFOLIO AIRBAND OFFSHORE TRANSMISSION OWNERS (‘OFTOS’) ▪ Airband is a leading fibre network operator serving rural and hard-to-reach areas ▪ OFTOs own the electricity transmission infrastructure connecting offshore across the West of England windfarms to the ons
Slide 10: Repayment of Cash Drawings under the CDF
- REPAYMENT OF CASH DRAWINGS UNDER THE CDF REALISATION PROCEEDS HAVE BEEN USED TO REDUCE THE DRAWN ASSET LEVEL DEBT BENEFITS FROM MITIGATIONS IN RELATION TO BALANCE OF THE CDF IN ACCORDANCE WITH THE BOARD’S PREVIOUSLY- CHANGES IN BASE RATES ANNOUNCED COMMITMENT ▪ INPP has historically made prudent u
Slide 11: Disciplined Approach to Capital Allocation
DISCIPLINED APPROACH TO CAPITAL ALLOCATION FOCUS ON DISCIPLINED ALLOCATION OF CAPITAL TO OPTIMISE THE PORTFOLIO AND ENHANCE SHAREHOLDER RETURNS RECYCLING CAPITAL SHARE BUYBACK DIVIDENDS ▪ The Company invested c.£78m into the Moray ▪ Continued belief that the share price materially ▪ 2023 dividend gr
Slide 12: Summary
SUMMARY PORTFOLIO REMAINS WELL-POSITIONED WITH RESILIENT CASH FLOWS AND PREDICTABLE RETURNS Strong Increased High-level of Well covered performance dividends inflation-linkage dividends Strong operational and 2023 dividend target1 0.7% inflation linkage2 which Delivering on forward dividend financia
Slide 13: Asset Management Update
ASSET MANAGEMENT UPDATE Dan Ward, Amber Infrastructure IMAGE Olga Primary School, Tower Hamlets, UK Photo credit: Bob Wheeler
Slide 14: In-House Active Asset Management
IN-HOUSE ACTIVE ASSET MANAGEMENT AMBER’S ASSET MANAGEMENT TEAM IS RESPONSIBLE FOR ENSURING EFFECTIVE RISK MANAGEMENT AND DRIVING THE OVERALL FINANCIAL, OPERATIONAL AND ESG PERFORMANCE OF INPP’S INVESTMENTS TO DELIVER LONG-TERM VALUE FOR ALL STAKEHOLDERS Amber’s active approach to asset management ha
Slide 15: PPP Investments Represent 40% of INPP's Portfolio
PPP INVESTMENTS REPRESENT 40% OF INPP’S PORTFOLIO PORTFOLIO BREAKDOWN1 PPP BREAKDOWN1 INPP’s 125 PPP investments are spread across nine jurisdictions and various subsectors OTHER2 OTHER 10% JUDICIAL 9% 4% 13% NORTH FHSP4 10% AMERICA 41% EDUCATION 50% REGULATED 39% UK INVESTMENTS 24% AUSTRALASIA PPPs
Slide 16: PPP Portfolio Value Enhancement Activities
PPP PORTFOLIO VALUE ENHANCEMENT ACTIVITIES AMBER ACTIVELY MANAGES THE PPP PORTFOLIO TO IDENTIFY INSURANCE – PROJ CO INSURANCE - AUTHORITY OPPORTUNITIES TO ENHANCE INVESTOR VALUE AND TO DELIVER SAVINGS TO THE PUBLIC SECTOR THROUGH CONTRACTUAL GAIN SHARE MECHANISMS c.50% >£5m Saving achieved on 2023 r
Slide 17: PPP Hand Back - Overview
PPP HAND BACK - OVERVIEW HAND BACK IS COMING INTO SHARPER FOCUS ACROSS THE INDUSTRY AS INPP HAND BACK DATES SPREAD OVER NEXT 25 YEARS SCHEMES START TO BE HANDED BACK TO THE PUBLIC SECTOR INPP PPP hand back dates1 ▪ Authority rights 10% ▪ Survey the property to assess condition relative to hand back
Slide 18: PPP Hand Back - Opportunity & Guiding Principles
PPP HAND BACK - OPPORTUNITY & GUIDING PRINCIPLES OPPORTUNITY TO DEMONSTRATE THE POSITIVE CONTRIBUTION OF PRIVATE SECTOR INVOLVEMENT IN PUBLIC INFRASTRUCTURE BY DELIVERING AN EFFICIENT, WELL-MANAGED PROCESS We believe a successful hand back process will be predicated on building a strong sense of col
Slide 19: Amber Overview and Update
AMBER OVERVIEW AND UPDATE Gavin Tait, CEO of Amber Infrastructure IMAGE Epinay School, South Shields, UK
Slide 20: Amber Infrastructure
AMBER INFRASTRUCTURE ESTABLISHED TEAM INTERNATIONAL PRESENCE SPECIALISED FUND MANAGER ~180 professionals including specialist investment, personnel and offices in 12 countries across with 8 funds under management investing in infrastructure asset and fund management Europe, Australia and North Ameri
Slide 21: Government Stimulus and Support for Infrastructure Investment
GOVERNMENT STIMULUS AND SUPPORT FOR INFRASTRUCTURE INVESTMENT OECD GOVERNMENTS ARE REQUIRED TO DELIVER UNPRECEDENTED SPENDING, FOCUS AND FACILITATION OF CRITICAL INFRASTRUCTURE INFRASTRUCTURE IN RESPONSE TO DEGLOBALISATION, DECARBONISATION AND DETERIORATING INFRASTRUCTURE “GAP” TO 20371 UK £650bn in
Slide 22: Responsible Investment Track Record
RESPONSIBLE INVESTMENT TRACK RECORD AMBER HAS EXTENSIVE EXPERIENCE WORKING WITH GOVERNMENTS TO DELIVER POSITIVE ENVIRONMENTAL AND SOCIAL OUTCOMES. HAVING LAUNCHED ITS FIRST IMPACT FUND IN 2011, AMBER HAS OVER 10 YEARS OF EXPERIENCE IN MEASURING AND REPORTING NON-FINANCIAL DATA ACROSS Positive enviro
Slide 23: Q&A
Q&A IMAGE Wakatipu High School, New Zealand
Slide 24: The Energy Transition Pathway to 2050
THE ENERGY TRANSITION PATHWAY TO 2050 Opportunities and Risks Graham Bennett IMAGE Angel Trains, UK
Slide 25: Presentation Outline
PRESENTATION OUTLINE 1 The Energy Transition Outlook to 2050 2 The Opportunity for Infrastructure 3 Points to Consider IMAGE Tideway, UK INPP CAPITAL MARKETS DAY - 27 FEBRUARY 2024 25
Slide 26: Outlook
Qi OUTLOOK ae IMAGE Tideway, UK
Slide 27: Building Blocks of the Energy Transition
BUILDING BLOCKS OF THE ENERGY TRANSITION Demand: Infrastructure: How will energy demand Critical to successful evolve? delivery Supply: Investment: A resilient low carbon energy Investment for both change supply and adaptation. Government Action: Stable and supportive policies and regulations Consum
Slide 28: Energy Transition Overview
ENERGY TRANSITION OVERVIEW 28
Slide 29: Global Energy Demand Peaks, Levels Off Towards 2050
GLOBAL ENERGY DEMAND PEAKS LEVELS OFF TOWARDS 2050 INPP CAPITAL MARKETS DAY - 27 FEBRUARY 2024 29
Slide 30: 80% of Global Grid Electricity Supply from Renewables and Nuclear in 2050
80% OF GLOBAL GRID ELECTRICITY SUPPLY WILL COME FROM RENEWABLES AND NUCLEAR IN 2050 INPP CAPITAL MARKETS DAY - 27 FEBRUARY 2024 30
Slide 31: Global Gas Demand
GLOBAL GAS DEMAND KEY POINTS - In 2022, annual global gas demand was 4,795 billion m3, 25% of global primary energy demand - In 2050, gas will still provide 21% of global primary energy demand - Gas demand is forecast to continue to grow until 2028, when it will plateau, then only decline slowly by
Slide 32: Buildings
BUILDINGS KEY POINTS ▪ Despite increasing electrification and improvements in the efficiency of thermal insulation and heating/cooling equipment, global energy demand for buildings is set to grow nearly 30% over the next three decades ▪ In 2022, 28% of the world’s energy and nearly 50% of global ele
Slide 33: Railways
RAILWAYS KEY POINTS ▪ Rail travel has the lowest energy consumption and CO2 emissions per passenger mile ▪ Global passenger numbers are expected to more than double (+140%) led by significant growth in demand for China and India. The Indian Subcontinent is forecast a 57% share of global rail passeng
Slide 34: The Opportunity
THE OPPORTUNITY IMAGE Northfleet Technology College, Kent, UK Photo credit: Bob Wheeler Photography
Slide 35: In 2050, the Electricity System Will Be Dramatically Different
IN 2050, THE ELECTRICITY SYSTEM WILL BE DRAMATICALLY DIFFERENT THAN TODAY – CONNECTIVITY WILL BE KEY 55,000 5,000 12,000 1.5 billion utility scale 80 MW 400 MW offshore 400 MW onshore passenger electric PV plants wind farms wind farms vehicles DNV ETO 2023 INPP CAPITAL MARKETS DAY - 27 FEBRUARY 2024
Slide 36: Global Energy Investment
GLOBAL ENERGY INVESTMENT UPSTREAM ENERGY COSTS ▪ Global annual energy expenditure was USD 5.2trn in 2022 ▪ DNV projects world energy annual expenditure to increase 22% to USD 6.4trn by 2050 ▪ Although this is a significant increase, when taking into account the growth of GDP over the same period, it
Slide 37: Electrical Grid Expansion
ELECTRICAL GRID EXPANSION ELECTRICAL GRID EXPANSION
Slide 38: UK Will Require Major Expansion of Generation and Grid Infrastructure
THE UK WILL REQUIRE A MAJOR EXPANSION OF ELECTRICITY GENERATION & GRID INFRASTRUCTURE KEY POINTS ▪ UK will require 180 GW of additional generation capacity by 2050 Offshore Wind ▪ 90% of new capacity will be Variable Renewables – dominated by offshore +92 GW wind – both fixed and floating Solar +60
Slide 39: Points to Consider
POINTS TO CONSIDER IMAGE Dublin Criminal Courts,Ireland
Slide 40: The Global Energy Transition
THE GLOBAL ENERGY TRANSITION Geopolitical developments We are not on track to over the last 18 meet Paris Agreement months have brought ambitions and are heading energy security into for 2.2oC warming by 2100 increasing focus Electrification is Fossil fuels are still a increasing, but not quickly su
Slide 41: UK Energy Transition
UK ENERGY TRANSITION Electricity generation will The UK will not meet Net shift fundamentally to Zero 2050 and will fall variable renewables. It will short of its Nationally be 75% of total electricity Determined Contribution in 2050 compared to only commitment for 2030. 25% today. Decarbonising hea
Slide 42: The Transition Will Bring Opportunity
THE TRANSITION WILL BRING OPPORTUNITY THE TRANSITION TO NET ZERO WILL BRING OPPORTUNITY, BUT THERE ARE SEVERAL POINTS THAT NEED TO BE CONSIDERED ▪ Electricity and gas infrastructure are key enablers for delivering a resilient, low carbon energy system ▪ Energy production, both in the form of electro
Slide 43: Panel Discussion and Q&A
PANEL DISCUSSION AND Q&A IMAGE Olga Primary School, Tower Hamlets, UK Photo credit: Bob Wheeler
Slide 44: Contacts
CONTACTS IMAGE INPP CAPITAL MARKETS DAY - 27 FEBRUARY 2024 44 Shirley Boys' and Avonside Girls' Schools, New Zealand
Slide 45: 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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