Infratil Limited · NZX:IFT
Infratil — Investor Presentation (November 2003)
31 slides from Infratil's investor presentation, November 2003
Slide 1: Investor Presentation November 2003
Investor Presentation November 2003 Infratil Best Corporate Communicator Emerging Leaders 2003
Slide 2: Corporate Introduction
Corporate Introduction Formed 1994 9.5 year record of returns to shareholders >22%pa. after tax Total capital raised $123m. Dividends paid $132m ($+IC). Equity market cap $470m Managed under contract by Morrison&Co Management fee on market cap (debt+equity) Management own 11% of Infratil
Slide 3: Interim Results 30 September 2003
Interim Results 30 September 2003 $000 Interim 03 Interim 02 Mar 2003 Operating Revenue 74,989 65,758 142,517 EBITDA 1 29,055 20,539 54,010 EBT & Realiations 2 15,186 2,291 19,596 Realisations 1,884 19,782 20,010 Net Surplus 12,543 19,604 28,137 NTA 3 487,421 412,985 406,188 Shares on Issue 187,945
Slide 4: Results Deconsolidated
Results Deconsolidated $000 Interim 03 Interim 02 Mar 2003 Dividends + Interest + TPW 12,141 7,006 18,304 Revaluations + Realisations 1,884 19,782 20,010 WIAL Income Contribution 12,706 8,075 22,794 WIAL Tax, Dep, Interest (6,875) (5,391) (12,577) GPIA Income Contribution 5,744 5,705 10,749 GPIA Tax
Slide 5: Recent Events
Recent Events Capital $101m of Infrastructure Bonds mature 2003/4 On target to roll $50m to 2013 maturity 47m warrants to be exercised $66m Transactions Tranz Rail sale Focus Existing assets and investment in emerging airports and waste/energy Returns Solid return on assets. NTA +
Slide 6: Earnings Growth
Earnings Growth $M TrustPower Earnings £M Glasgow Prestwick International Airport Earnings 160 7 140 Earnings Before Interest, Tax, Depreciation, Amortisations 6 Earnings Before Interest, Tax, Depreciation and Amortisations Net Profit After Tax 120 Net Profit After Tax 5 100 4 80 3 60 2 40 1 0 20 -1
Slide 7: Portfolio Evolution
Portfolio Evolution Focus on long term value gains. 1998-2003 capital re-allocation to airports and renewable energy from energy distribution 1998 2000 Interim 2003/4 Generation Energy Distribution Ports Airports Other $209M $490M $623M Page 7
Slide 8: Track Record / Returns
Track Record / Returns Average investment IRR 27% pa Infratil's Sharemarket Performance 900 800 700 600 500 Index 400 300 200 100 0 Mar-94 Sep-94 Mar-95 Sep-95 Mar-96 Sep-96 Mar-97 Sep-97 Mar-98 Sep-98 Mar-99 Sep-99 Mar-00 Sep-00 Mar-01 Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Infratil Accumulation Index
Slide 9: Track Record / Returns
Track Record / Returns IFT Annual Returns 100% 80% 60% 40% 20% 0% -20% -40% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Div Return Capital Return Page 9
Slide 10: Airport Value
Airport Value Exogenous Passengers = reliant on airline competition Competition → Capacity → Price → Demand Income risk Endogenous Charges Costs Passenger services Peripheral land development Financial structure Page 10
Slide 11: Airline Competition
Airline Competition Ryanair September 2003 Quarter Revenue +30% (€351m) London - Barcelona Pretax profit +14% (€143m) Low Cost Operating profit margin 42% Charter Average fare -10% (€50) Traditional Average ancillary spend +30% (€6.8) Op ex per pax -8.5% (€33) Average airport cost per pax €6.05 Capa
Slide 12: Airline Competition
Airline Competition NZ / Tasman lacks Europe’s competitive dynamics: 3 Australasian airlines Growth potential NZ market of circa 20m passenger movements Europe circa 500m passenger movements 2007 Forecast of 600m pax movements. 67% traditional scheduled carriers. 19% charter. 14% VBA Cur
Slide 13: Wellington, Glasgow Prestwick, Targets
Wellington, Glasgow Prestwick, Targets Wellington Satisfactory costs, prices, services, property development Growth dependent on airline competition developing Glasgow Prestwick Passenger activities growing robustly Freight leveraged to UK economy Immediate value focus: Increasing per-pa
Slide 14: WIAL
WIAL Under Infratil Ownership 5 Years Per Passenger Passengers 3.5m to 4.1m +17% Aeronautical income +71% +48% Terminal services income +119% +85% Operating costs -1% -16% Operating cost ex insurance -8% -23% EBITD +181% +140% Owners income +438% +360% Long term record 12 Years Passengers 2.4m to 4.
Slide 15: WIAL
WIAL Index NZ Domestic/International Air Travel Costs: Real 000s Passengers 160 4,500 150 Domestic International 140 4,000 130 120 3,500 110 100 3,000 90 80 2,500 70 Domestic International 60 2,000 Mar-90 Mar-91 Mar-92 Mar-93 Mar-94 Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 1991
Slide 16: TRL Annual Airport Survey
TRL Annual Airport Survey Ae ro nautic al Re v e nue pe r Pas s e ng e r Operating Cos ts per Pas s enger 25.00 16.00 14.00 20.00 12.00 10.00 15.00 8.00 10.00 6.00 4.00 5.00 2.00 - - Return on Capital Employed 25.0% 20.0% 15.0% WIAL’s satisfactory returns from 10.0% Low costs & low charges 5.0% 0.0%
Slide 17: GPIA
GPIA £m Interim 04 March 03 March 02 March 01 Passengers 1,003,000 1,483,000 1,309,000 988,000 Freight (tonnes) 20,479 41,100 42,630 42,164 Aeronautical Income £5.69 £10.44 £8.76 £7.17 Concession £2.59 £3.88 £3.45 £2.23 Property £1.33 £2.76 £3.02 £2.96 Costs £6.57 £12.04 £11.69 £10.16 EBITDA £3.03 £
Slide 18: GPIA Growth
GPIA Growth P a s s e n g e r: M o n th ly G ro w th R a te Annual Passenger Numbers +7 0 % 1,800 +6 0 % Year-on-Year Change 1,500 +5 0 % Passenger Numbers 1,200 +4 0 % +3 0 % 900 +2 0 % 600 +1 0 % - 300 -1 0 % Aug-01 Dec-01 Aug-02 Dec-02 Aug-03 Apr-01 Apr-02 Apr-03 0 1992 1993 1994 1995 1996 1997 1
Slide 19: Future Focus: Emerging Airports
Future Focus: Emerging Airports Aviation industry undergoing a step change with low cost/fare short haul Growth in passenger numbers A different airport package Emerging Airports Suits low-fare and freight airlines Less actively contested investment sector Success depends on skills/exp
Slide 20: Whenuapai
Whenuapai Details on infratil.com/whenuapai_airport_faqs.htm And nzdf.mil.nz/public-documents/downloads/NZDFWhenuapaiFeasibility Infratil working with Waitakere City Council to secure the right to undertake commercial aviation operations as RNZAF redeploy to Ohakea Only by establishing a very lo
Slide 21: Whenuapai: The Economic Case
Whenuapai: “The Economic Case” Crown’s decision for post- RNZAF Airport use Optimise across several criteria Economic, land transport, social, etc. Infratil/Waitakere selection depends on its relative merits Alternatives are of limited benefit viz-a-vis Crown criteria Housing, prisons, etc
Slide 22: Whenuapai: The Airport Case
Whenuapai: “The Airport Case” Commercial Airport Viability Commercial use of the Airport likely to be the highest value use, but is it viable? Within 14k of Whenuapai live 500,000 people (slightly more than within the same distance of Mangere) Major land transport benefits for users Proxim
Slide 23: TrustPower
TrustPower $M TrustPower Earnings 160 140 Earnings Before Interest, Tax, Depreciation, Amortisations 120 Net Profit After Tax 100 80 60 40 20 0 1996 1997 1998 1999 2000 2001 2002 2003 2004* *annualised by adding the 2002/3 second half to the interim 2003/4 Interim Interim 2003 2002 1999 03 04 G ener
Slide 24: TrustPower
TrustPower Corporate focus on returns Renewable generator (hydro/wind) 1,950 GWh pa average output (@ 5c/kwh = $97.5million income pa, @6c/kwh = $117.0million) No fuel costs, low O&M costs Hydro stations last forever. Wind sites last forever Returns depends on energy prices NZ is emerg
Slide 25: TrustPower
TrustPower Income & value derived from electricity prices and projected future prices Wholesale Electricity Price Costs of Generation Alternatives c/kWh 8 25 c/kWh (firm base load equivalent) 7 Backup cost 20 6 5 CO2 Tax @ 15 $15/t Monthly average 4 Half year average Fuel cost 10 3 5 2 Capital & O&M
Slide 26: Energy Developments Limited
Energy Developments Limited Builds, operates, owns, modular power stations that use difficult fuels or generate in remote locations: Methane produced in rubbish dumps and coal seams Natural gas, LPG or diesel to generate in the “outback” 360-390 MW of plant (TrustPower owns about 450MW) Pr
Slide 27: Renewable/Waste Energy: Future Focus
Renewable/Waste Energy: Future Focus People / Society willing to pay to reduce pollution and dumping of rubbish Penalties/levies on waste and emissions Subsidies on “green” services and products Suits small scale projects Small thermal stations Small scale hydro/wind stations Operation
Slide 28: Other Investments
Other Investments Port of Tauranga Continued record performance Expansion “off site” in areas of competance Tranz Rail Exit Ventures Can the sector meet Infratil’s targets? “cup of tea” Page 28
Slide 29: Earnings to September 2003
Earnings to 30 September 2003 Interim 03 Interim 02 Infratil EBITDA $29.06m $20.54m NPAT $12.53m $19.06m TrustPower EBITDA $79.6m $54.7m NPAT $36.9m $23.1m WIAL EBITDA $19.25m $11.87m IFT Earnings $8.56m $2.68m GPIA EBITDA £3.03m £2.58m NPAT £0.97m £0.74m Page 29
Slide 30: Looking Forward: The Issues
Looking Forward : The Issues TrustPower Electricity prices, risk management, Government’s “dry year” initiatives Wellington International Airport Airline competition and services Regulation Glasgow Prestwick International Airport UK economic recovery, new airline services, value per pa
Slide 31: www.infratil.com
www.infratil.com Page 31