International Public Partnerships Ltd · LSE:INPP
International Public Partnerships — FY2021 Earnings Presentation
42 slides from International Public Partnerships's earnings presentation, Mar 24, 2022
Slide 1: FY21 Results Presentation
FY21 Results Presentation March 2022 Investment: Tinglysningsretten in Hobro, Design: Cubo Arktekter, Photo: Helene Høyer Mikkelsen
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
Overview
Slide 4: Our Approach
Our Approach Our purpose is to invest responsibly CONSISTENT AND PREDICTABLE RETURNS in social and public infrastructure that ▪ Resilient, inflation-linked cash flows delivers long-term benefits for all stakeholders. ▪ Focus on growing predictable dividends ▪ Backed mainly by regulated or contracted
Slide 5: Year in numbers
Year in numbers FY21 HIGHLIGHTS The Company supports the 2030 Agenda for Sustainable Development adopted by the UN Member States in 2015. Alignment with the SDGs is a c.2.6% | 1.1x 148.2p | £2.5bn key part of the Company’s approach to ESG integration7 DIVIDEND GROWTH1 | DIVIDEND COVER2 NAV PER SHARE
Slide 6: Portfolio Performance and Valuation
Portfolio Performance and Valuation
Slide 7: Confidence in Long-Term Revenues from Investment Portfolio
Confidence in Long-Term Revenues from Investment Portfolio DIVIDEND GROWTH pence per share 7.74 7.93 FY 2021 FY 2022 FY 2023 Forecast Actual c. 2.5% 7.36 7.55 DIVIDEND TARGET TARGET 7.18 6.82 7.00 DIVIDEND1 DIVIDEND1 6.65 6.30 6.45 6.15 5.85 6.00 5.25 5.40 5.55 5.70 7.55p 7.74p 7.93p per share per s
Slide 8: Valuation Discount Rate Overview
Valuation Discount Rate Overview NAV1 WEIGHTED AVERAGE WEIGHTED AVERAGE RISK CAPITAL DISCOUNT RISK CAPITAL PORTFOLIO RATE RANGE4 DISCOUNT RATE 2 DISCOUNT RATE 3 £2.5bn or 7.38% 6.97% 4.97% - 9.86% 148.2p per share 31 DEC 2021 31 DEC 2020 VARIANCE NAV1 PER SHARE 148.2p 147.1p 1.1p WEIGHTED AVERAGE RI
Slide 9: Net Asset Valuation
Net Asset Valuation £m 2,600 107.2 118.5 2,550 133.6 82.4 163.4 2,528.8 2,500 2,450 25.9 33.0 2,400 2,384.4 2,350 2,300 2,250 2,200 2,150 2,100 2,050 1 NAV at 31 Dec 2020 Capital Raising (post Change in Government Change in Investment Cash Distributed to Change in Foreign Change in NAV Return NAV at
Slide 10: 2021 Portfolio Review
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Slide 11: Cadent gas distribution investment
Cadent is an essential UK gas distribution business with four geographic monopolies, serving c.50% of UK gas customers INVESTMENT OVERVIEW INVESTMENT UPDATE WELL INSULATED FROM GDP ▪ Cadent earns its revenues from providing a safe and reliable gas distribution network to its TRENDS WITH MINIMAL EXPO
Slide 12: Tideway super-sewer investment
Tideway is building a 25km ‘super-sewer’ under the River Thames to create a healthier environment for London INVESTMENT OVERVIEW INVESTMENT UPDATE LONG-TERM INVESTMENT WITH A ▪ Good progress has been made with construction 73% complete as at 31 December 2021 120-YEAR DESIGN LIFE and with the primary
Slide 13: Diabolo rail link investment
Diabolo is a strategic rail transportation asset linking Brussels Airport with Belgium’s national rail network INVESTMENT OVERVIEW INVESTMENT UPDATE ▪ Diabolo has been impacted by the restrictions on international travel and national lockdowns INFLATION-LINKED REVENUES implemented as a result of the
Slide 14: Angel Trains rolling stock leasing
Angel Trains is the UK’s largest rolling stock leasing company owning more than 4,000 vehicles INVESTMENT OVERVIEW INVESTMENT UPDATE DIVERSIFIED ASSET BASE ▪ INPP made its original investment in Angel Trains in 2008. It has been a successful SUPPORTING ADAPTABILITY TO investment for INPP delivering
Slide 15: OFTOs
OFTOs OFTOs comprise the onshore and offshore substations and under-sea cables connecting the offshore wind farm with the onshore grid network INVESTMENT OVERVIEW INVESTMENT UPDATE ▪ INPP is currently invested in nine OFTOs, including two that were acquired in 2021, and is OPERATIONAL AND IMMEDIATEL
Slide 16: Other Asset Management Updates
Other Asset Management Updates BENEX AVAILABILITY-BASED PPPS DIGITAL INFRASTRUCTURE ▪ During 2021, several expiring concessions ▪ Availability-based PPPs account for 31% of the ▪ In July 2017, the Company committed to invest were re-won reducing the risk profile of the Company’s portfolio (by invest
Slide 17: 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 2020 DELIVERED IN 2021 PROPOSED FOR 2022 ▪ Investment Adviser achieved A+ for Strategy ▪ INPP introduced a set of KPIs t
Slide 18: Delivering against ESG KPIs
Delivering against ESG KPIs The Company has introduced POLICY OBJECTIVE POLICY OBJECTIVE a set of KPIs to help monitor The Company will use ESG drivers to create investment The Company will identify and integrate ESG factors into progress against its ESG opportunities in new and existing markets all
Slide 19: Showcasing approach in Sustainability Report
Showcasing approach in Sustainability Report In 2021, the Company released its inaugural Sustainability Report. This report provides a detailed overview of the Company’s approach to sustainability and ESG integration The Sustainability Report is available here. 19 2021 ANNUAL RESULTS PRESENTATION
Slide 20: Looking Forward
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Slide 21: Pipeline Overview
Pipeline Overview KNOWN/COMMITTED LOCATION INVESTMENT TENOR ESTIMATED INVESTMENT 1 ESTIMATED TIMING STATUS East Anglia One OFTO UK c.21 years Up to £90m H2 2022 Preferred bidder Moray East OFTO UK c.24 years Up to £75m H2 2022 Preferred bidder Flinders University Health and Australia 25 years c.£9m
Slide 22: Summary and Outlook
Summary and Outlook CONSISTENT AND PREDICTABLE RETURNS ▪ Investment portfolio is expected to continue to be resilient ▪ We will continue to actively manage and mitigate risk ▪ Strong inflation linkage provides a good level of protection in higher-inflation environments STRONG MACRO FUNDAMENTALS ▪ In
Slide 23: Appendices
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Slide 24: Portfolio Overview and Valuation
Portfolio Overview and Valuation
Slide 25: 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 26: INPP's Top 10 Investments
INPP’s Top 10 Investments % INVESTMENT % INVESTMENT STATUS AT % HOLDING AT PRIMARY SDG NAME OF INVESTMENT LOCATION SECTOR FAIR VALUE AT FAIR VALUE AT 30 JUN 2021 30 JUN 20211 SUPPORTED 31 DEC 2021 31 DEC 2020 Gas UK Operational 7% Risk Capital 15.5% 16.5% Distribution UK Waste Water Under Constructi
Slide 27: Investments at Fair Value
Investments at Fair Value £m 2,700 24.8 29.7 2,650 187.2 33.0 252.7 167.9 2,579.4 2,600 2,550 2,500 2,450 2,430.2 2,400 2,345.4 2,350 2,300 2,250 2,200 2,150 2,100 Investments at Fair Investments Investment Rebased Investments Portfolio Return1 Change in Discount Change in Foreign Change in Investme
Slide 28: Portfolio Analysis
Portfolio Analysis 1 SENIOR DEBT CONSTRUCTION 9% LATER STAGE 9% INVESTOR3 35% MODE OF <50% 46% OWNERSHIP 47% 100% INVESTMENT ACQUISITION/ OWNERSHIP STAKE OWNERSHIP TYPE ASSET STATUS 65% 91% 7% 91% EARLY OPERATIONAL STAGE INVESTOR2 RISK CAPITAL 50% – 100% OWNERSHIP DENMARK IRELAND <1% ITALY COURTS OT
Slide 29: Revenue type and service providers
Revenue type and service providers PORTFOLIO BY REVENUE TYPE 1 INPP SERVICE PROVIDERS 1 DIGITAL OTHER - ANGEL TRAINS, DOWNER & 3 INFRASTRUCTURE BENEX AND NDIF SPOTLESS OTHER ROLLING 4 STOCK 2% 7% INFRABEL NV 10% 12% VAN PUBLIEK RECHT PPPs WITH REVENUE RISK 7% 3 MECHANISMS MITIE2 1% 10% 4% ENGIE REGU
Slide 30: Valuation Sensitivities and Discount Rate Trends
Valuation Sensitivities and Discount Rate Trends ESTIMATED IMPACT OF CHANGES IN KEY VARIABLES ON 31 DEC 2021 NAV OF 148.2p PER SHARE PORTFOLIO INFLATION LINKAGE1 Discount rates +/-1% -14.4 17.3 Inflation +/- 1% Foreign Exchange +/-10% -11.6 -3.7 3.7 13.5 0.7% p.a. (Dec 2020: 0.8% p.a.) Deposit rates
Slide 31: 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 400 350 300 250 200 150 100 50 0 2022 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
Slide 32: Indicative impact of changes in short-term inflation
Indicative impact of changes in short-term inflation ‒ Historically, cash flow and NAV sensitivities have been published which enable users to understand the estimated impact of a scenario in which Indicative impact of changes in inflation runs at 100bps above the assumptions used to determine the s
Slide 33: Macroeconomic Assumptions
Macroeconomic Assumptions ASSUMPTION JURISDICTION 31 DEC 2021 31 DEC 2020 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% 1.00% Australia 2.00% 2.00% LONG-TERM Europe 0.50% 0.50% DEPOSIT RATES2 Canada 1
Slide 34: Portfolio Information
Portfolio Information INVESTMENTS MADE DURING THE YEAR TO 31 DEC 2021 PRIMARY SDG INVESTMENT LOCATION OPERATIONAL STATUS AMOUNT INVESTMENT DATE SUPPORTED OFFENBACH POLICE CENTRE Germany Operational £8.1m1 June 2021 TOOB UK Operational £14.2m Various BEATRICE OFTO UK Operational £49.8m July 2021 ANGE
Slide 35: Portfolio Information (Continued)
Portfolio Information (Continued) ASSETS UNDER CONSTRUCTION CONSTRUCTION DEFECTS % INVESTMENT PRIMARY SDG INVESTMENT LOCATION COMPLETION DATE COMPLETION DATE STATUS FAIR VALUE SUPPORTED Behind original TIDEWAY UK 20252 2028 9.1% schedule4 HMRB Australia 2024 N/A3 On schedule 0.0%5 TOTAL 9.1% 1. The
Slide 36: Cash Generation and Operating Costs
Cash Generation and Operating Costs SUMMARY CASH FLOW 31 DEC 2021 (£M) 31 DEC 2020 (£M) NOTES Opening cash balance 44.3 45.6 Cash from investments 167.9 153.0 Increase reflects the further growth and maturity of the portfolio Corporate costs (28.5) (28.3) Increase reflects the renewal and utilisatio
Slide 37: Gearing and Investment Life
Gearing and Investment Life TIDEWAY ASSET LEVEL DEBT 9% ▪ Asset level debt is non-recourse to the Company OFTOS CADENT 22% PPP & OFTOS 15% ▪ Generally fixed-term, fixed-rate debt ▪ Principal generally amortised over the life of the project ▪ Structure is intended to minimise risk OPERATING 12% BUSIN
Slide 38: About Amber Infrastructure
About Amber Infrastructure
Slide 39: Specialist fund manager
Specialist fund manager Amber manages or advises eight co-mingled funds and other managed accounts AMBER FUND FOCUS HIGHLIGHTS PARTNERS SIZE 15-year track record; Long-term public infrastructure c.£2.9bn FTSE 250-listed investment Listed investors assets market cap1 company First dedicated Digital H
Slide 40: 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 and Australia Helsinki EUROPE UNITED KINGDOM ▪ Federal German Ministry of Education ▪ Cadent Gas Distribution and Research Headquarters ▪ Thames Tideway Tunnel ▪ Dublin Courts (Irel
Slide 41: Contacts
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Slide 42: 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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