3i Infrastructure PLC · LSE:3IN
3i Infrastructure — H1 2007 Earnings Presentation
27 slides from 3i Infrastructure's earnings presentation, Nov 22, 2007
Slide 1: Interim results to 30 September 2007
Interim results to 30 September 2007 22 November 2007
Slide 2: Introduction
Introduction Peter Sedgwick Chairman, 3i Infrastructure Limited
Slide 3: Agenda
Agenda Introduction Peter Sedgwick Financial review Stephen Halliwell Investment review Michael Queen 3
Slide 4: Board of Directors
Board of Directors Peter Sedgwick Phil Austin Martin Dryden Peter Wagner Paul Waller Steven Wilderspin
Slide 5: Financial review
s Financial review Stephen Halliwell CFO, Infrastructure, 3i Investments plc 5
Slide 6: Key messages
Key messages Board of Directors • On track to being fully invested within two years of IPO • Portfolio delivering returns in line with expectations – Total return £33.3m, or 4.8% on opening shareholders’ equity • Board of Directors approved interim dividend of 2.0p per share • Net asset value per sh
Slide 7: Income statement
Income statement Period from 16 January to 30 September 2007 Investment basis Consolidated basis (£m) (£m) Unrealised profits on revaluation of investments 11.3 18.8 Portfolio exchange gains / (losses) 2.4 2.4 Portfolio income 13.6 16.2 Treasury interest receivable 13.0 13.0 Investment return 40.3 5
Slide 8: Cash flow
Cash flow Period from 16 January to 30 September 2007 Investment basis Consolidated basis (£m) (£m) Funds raised at IPO 702.9 702.9 Cash invested (412.7) (534.7) Borrowings in acquisition subsidiaries - 128.7 Income received 24.6 29.3 Operating expenses and formation costs (15.1) (18.9) Finance cost
Slide 9: Balance sheet
Balance sheet As at 30 September 2007 Investment basis Consolidated basis (£m) (£m) Investment assets 426.4 671.1 Other net assets 3.6 8.3 Cash and cash equivalents 296.7 300.3 726.7 979.7 Borrowings - 134.8 Shareholders’ equity 726.7 722.7 Minority interest - 122.2 726.7 979.7 Diluted NAV per share
Slide 10: Valuation methodology
Valuation methodology • Valuation policy – IPEVC guidelines • Methodology – Discounted cash flow basis – Share of Fund net assets – Quoted – closing bid price – Sales basis 10
Slide 11: Reconciliation in movement in portfolio value
Reconciliation in movement in portfolio value £28.0m £426.4m £178.3m £(14.3)m £234.4m Initial portfolio New investment Asset returns Income received Closing portfolio value value Weighted average discount rate: 13% 11
Slide 12: Investment review
Investment review Michael Queen Managing Partner, Infrastructure, 3i Investments plc 12
Slide 13: What 3i Infrastructure set out to do
What 3i Infrastructure set out to do • Invest in infrastructure assets • IPO proceeds fully invested within – Asset intensive businesses two years of admission – Providing essential services over the long term • 12% total return objective on initial – Often on a regulated basis net proceeds over the
Slide 14: Investment Partners
Investment Partners Michael Queen Cressida Hogg Neil King Girish Baliga Anil Ahuja Chris Rowlands Paul Waller Richard Kilner 14
Slide 15: Investment activity since IPO
Investment activity since IPO Cumulative Balance of net investment value: £234.4 £265.3 £271.8 £356.3 £412.7 IPO proceeds £180.3m £56.4m £84.5m Committed £100.1m £30.9m £6.5m Alpha: £0.2m Octagon: £12.2m I2: £82.0m AWG: £140.0m Initial Portfolio Further T2C Oystercatcher India Fund Cash Balance inve
Slide 16: Portfolio breakdown by value
Portfolio breakdown by value By sector By maturity By geography (1) Social Early-stage Asia infrastructure 15% 13% Utilities 30% 50% Continental Europe Mature 22% 59% UK Operational 65% growth Transportation 26% 20% (1) Continental Europe includes investment in Oiltanking, with operations in the Net
Slide 17: Initial portfolio – Anglian Water Group
Initial portfolio – Anglian Water Group Interest • 9% equity interest and loan notes in Anglian Water Group Limited Description • Owner of Anglian Water, the fourth largest water/waste water company in England and Wales, Morrison plc (support services) and a property development business Strategy As
Slide 18: Initial portfolio – I2
Initial portfolio – I2 Interest • 31.2% limited partnership interest Description • Infrastructure investment fund • Makes and manages investments in secondary market public and private infrastructure projects Strategy • Build a diversified portfolio of PFI assets, generating stable returns for inves
Slide 19: New investment – Oystercatcher
New investment – Oystercatcher Interest • 45% equity holding in three Oiltanking subsidiaries through Oystercatcher acquisition company Description • Provider of third-party storage facilities for petroleum products in Amsterdam, Malta and Singapore Strategy Asset total return (£m) • Partner with ex
Slide 20: New investment – 3i India Infrastructure Fund
New investment – 3i India Infrastructure Fund Interest • US$250 million commitment – no additional fees payable by 3i Infrastructure to 3i Group Description • Fund set up by 3i Group to invest in Indian infrastructure assets, with a target size of US$1 billion • Cornerstone commitments of US$250 mil
Slide 21: Market environment
Market environment • Market opportunity for infrastructure • Significant infrastructure requirements in the investment remains strong US and Europe • Strong GDP growth in Asia – India in particular • Competition resulting in pricing pressure • Auctions still predominant in Europe and the in mature m
Slide 22: Closing remarks
Closing remarks • On track to achieve full investment within two years of Admission • Returns and strategic development in line with objectives • Market prospects for infrastructure remain positive • First dividend announced by the Company 22
Slide 23: Appendix
Appendix 3i Infrastructure Limited | Si 23
Slide 24: Initial portfolio - Octagon
Initial portfolio - Octagon Interest • 26.3% equity interest and loans Description • £229 million project to build and maintain Norfolk and Norwich University Hospital • NHS Trust committed to making RPI-linked payments to cover use and maintenance of buildings Asset total return (£m) Strategy 0.6 0
Slide 25: Initial portfolio – Alpha Schools
Initial portfolio – Alpha Schools Interest • 50% equity interest • Commitment to invest a further £7.6 million in loan notes Description • £134 million project to build and refurbish 11 new schools in Scotland under a 30-year PFI contract Strategy Asset total return (£m) • Monitor and influence comp
Slide 26: New investment – T2C
New investment – T2C Interest • 16.7% equity interest and loans Description • Construction of a new-build waste to energy plant to generate heat and power from refuse-derived fuels Strategy • Monitor and influence the construction phase to ensure project remains on track and delivers full Asset tota
Slide 27: Governance
Governance W • Independent Chairman, four independent non-executive directors and 3i Group appointed non-executive director • Committed to observe requirements of the Combined Code Board of Directors • Responsibilities: – Acts as investment committee / approves investment opportunities – Responsible