Enav S.p.a. · MIL:ENAV
Enav — Investor Presentation (June 2022)
44 slides from Enav's investor presentation, Jun 21, 2022
Slide 1: Investor Presentation
Investor Presentation J u ne 2 1 , 2 0 22 e n a v. i t
Slide 2: A Unique Asset
A Unique Asset Leading Air Traffic Control Service Provider Italian Airspace Managed ▪ Only Air Navigation Service Provider (ANSP) worldwide listed on a stock exchange ▪ Sole provider of air traffic control and navigation services in Italy entrusted by national law without time limit ▪ Supportive pa
Slide 3: 2021 Group's Highlights
2021 Group’s Highlights Regulated revenue Total Revenue Non-Reg. Revenue 96% (1) (1) En-route Terminal €836.6m €33.0m 70% 30% +8.5% vs. 2020 +22.3% vs. 2020 Non-regulated revenue 4% EBITDA Net Profit CAPEX Net Financial Debt €222.4m €484m +5.5% vs. 2020 €78.0m €85.6m vs. €245m in 2020 EBITDA Margin
Slide 4: Shareholders Remuneration
Shareholders Remuneration Historical Dividend Distribution €m 180 €180m extraordinary 113 dividend paid in August 2015 108 95 101 58.5 No 47 36 Dividend 32 2013 2014 2015 2016 2017 2018 2019 2020 2021 ▪ Clear dividend policy of no less than 80% of Equity FCF calculated as normalized net Income + D&A
Slide 5: Top Performance in 2021
Top Performance in 2021 En-route Service Units (‘000) +30.8% +12.9% +43.9% +44.9% YoY change Amongst Member States subject to EU 11,181 Performance Scheme, ENAV: 7,777 6,383 5,783 • Is the 4th largest Air Navigation Service Provider (1) Performance Quality Leader in Europe • Shows a faster post-pand
Slide 6: Core Regulated Business
Core Regulated Business En-route and Terminal Services ▪ ENAV’s core business is to manage the regulated Air Traffic Control Services (ATCS), for which it is entrusted by law, 24 hours a-day, 365 days a-year: • En-route services: handling of air traffic crossing Italian airspace managed from 4 Area
Slide 7: Non-Regulated Business – Worldwide Presence
Non-Regulated Business – Worldwide Presence ENAV Group proactively looks towards the future, seeking worldwide opportunities to develop innovative technologies for ATC EUROPE ASIA AFRICA AMERICAS Blue countries: ENAV Group presence OCEANIA AFRICA: Botswana, Egypt, Ivory Coast, Eritrea, Kenya, Libya,
Slide 8: Non-Regulated Business – IDS AirNav
Non-Regulated Business – IDS AirNav IDS AirNav joined the Group in 2019 and represents the forefront for the promotion and sale in the non-regulated market of the services and technological solutions available within the Group offers portfolio ▪ Price paid of €41m for 100% of Air Navigation Division
Slide 9: Non-Regulated Business – ENAV & Techno Sky
Non-Regulated Business – ENAV & Techno Sky Leveraging on Strong Technical Capabilities to Provide Non-regulated Services to Third Parties ▪ ENAV provides supporting services to other ANSPs on a commercial basis, forming an independent source of revenue which is not regulated Aeronautical “The Academ
Slide 10: Non-Regulated Business – Aireon & D-Flight
Non-Regulated Business – Aireon & D-Flight ▪ Aireon is the first company that has developed a global satellite surveillance system for Air Traffic Control and ENAV is one of the shareholders ▪ Using 75 satellites that make up the new Iridium Next constellation, Aireon LLC provides an aviation survei
Slide 11: ENAV's Sustainability Path to Value Creation
ENAV’s Sustainability Path to Value Creation 2021: acquisition of ISO 37001 ENAV strives to combine the excellence achieved in 2021: from Stakeholder Engagement to «Stakeholder Management» its core business with an increasingly sustainable approach in order to create value for all stakeholders 2021:
Slide 12: Sustainability Performance in 2021
Sustainability Performance in 2021 COMMUNITY • Europe's leader for punctuality with 0.053 min ATFM delay allocated en-route • 114,358 hours of Group in-house operational training • About 1,400 hours flown by aircraft of the Flight Inspection and Validation service • 1,180,526 flights handled in 2021
Slide 13: 2021-2023 Sustainability Plan and 2021 Achievements
2021-2023 Sustainability Plan and 2021 Achievements The Sustainability Plan, based on 6 main Assets, defines a series of actions, based on the United Nations 17 Sustainable Development Goals (SDGs), on which the ENAV Group will be committed in the period and that pursue the full integration of ESG e
Slide 14: Carbon Footprint & Strategy to Reduce Emissions
Carbon Footprint & Strategy to Reduce Emissions The roadmap defined by ENAV to reduce emissions foreseen the achievement 2021 Carbon Footprint of two ambitious targets: 1. 2022 - Carbon Neutrality 5.6% Carbon neutrality by 2022 passes through the reduction of Scope 1 and 2 Scope 1 - Direct emissions
Slide 15: Operating in a Favorable Market Environment
Operating in a Favorable Market Environment
Slide 16: Benefiting From Long Term Growth Trends of Global Aviation Market
Benefiting From Long Term Growth Trends of Global Aviation Market Global Traffic Increase Supporting Service Units Growth in the Medium-long Term World annual RPK (1) (trillion) 20 2019-2040 ▪ Independent source indicates a 16 Air traffic has doubled +3.9 CAGR global growth in traffic reflecting a e
Slide 17: Diversified Customer Base and Business Mix Provide Resilient Results
Diversified Customer Base and Business Mix Provide Resilient Results Diversified Business Mix (1) En-route traffic breakdown (by Service Units) Terminal traffic breakdown (by Service Units) ▪ Diversified business mix with (2) National majority of revenue from en- Overflight 24% National route servic
Slide 18: European Regulatory Framework Providing Long-term Visibility (1/2)
European Regulatory Framework Providing Long-term Visibility (1/2) En-route (70% of regulated revenue (1)) RP3 performance plan 2020- Regulatory Period RP2 (2015 – 2019) RP3 (2020 – 2024) 2024 defined and approved Mitigated Mitigated (70% protection (70% protection ▪ Visibility through 5-year regula
Slide 19: European Regulatory Framework Providing Long-term Visibility (2/2)
European Regulatory Framework Providing Long-term Visibility (2/2) Terminal (30% of regulated revenue (1)) Charging % of regulated Difference Airports Charging regulation Zone revenue (1) from en-route 3% Subject to traffic risk sharing and PERFORMANCE AND Terminal CHARGING SCHEME ▪ Rome Fiumicino c
Slide 20: Business Plan Overview
2022-2024 Business Plan Overview
Slide 21: Business Plan – Highlights
Business Plan – Highlights The 2022-2024 Business Plan is fully oriented to the sustainable success of the Group, keeping, as always, safety as main priority, increasing value for all stakeholders “Future Sky 2031” Is part of the wider long-term future strategic vision which have a 10 years horizon
Slide 22: Business Plan – Objectives
Business Plan – Objectives ENAV as a Frontier Service Provider ENAV global market leader Leadership in Core business Leadership in Non-Regulated business Maintain and enhance leadership in providing core To be global leader in contestable markets, business’ services, through the evolution of the str
Slide 23: Future Strategic Vision & Business Plan – Timeline
Future Strategic Vision & Business Plan – Timeline The 2022-2024 Business Plan is fully integrated within ENAV’s future strategic vision, structured in three steps, to address the current uncertainty and pave the way for the relaunch of the Group Business Plan Horizon 2020 2021 2022 2023 2024 2025 2
Slide 24: Sustainability as Basement of our Business Plan
Sustainability as Basement of our Business Plan Initiatives included in the 2022-2024 Business Plan are in line and increase the value of ENAV’s Sustainability Assets Sustainability Assets in ENAV’s Sustainability Plan Strategy and Technological Reporting and Corporate Climate Policies Governance In
Slide 25: Business Plan – Pillars
Business Plan – Pillars Environmental, Social and Economic Sustainability Maintain the Paramount Target of Maximum Safety 1 2 3 Technological & Operational Digital Innovation New Market Positioning Excellence • New Technical and Operational Model • Commercial offering enhancement • ENAV Digital Inno
Slide 26: Business Plan – Pillar 1
Business Plan – Pillar 1 Environmental, Social and Economic Sustainability Maintain the Paramount Target of Maximum Safety 1 Technological & Operational Excellence • ACCs Consolidation • New ATM platform Initiatives • APP integration into ACCs • New maintenance management centralized • Remote Towers
Slide 27: Pillar 1 – Focus on ACCs Consolidation & Remote Towers
Pillar 1 – Focus on ACCs Consolidation & Remote Towers Environmental, Social and Economic Sustainability Maintain the Paramount Target of Maximum Safety 1 As is To be 4 ACC Padova 2 ACC Padova TWR + APP (12) Milano 2 RTCC Milano RTCC Strategic TWR (19) ACC TWR (33) ACC 26 R-TWR in RTCC ACC Brindisi
Slide 28: Business Plan – Pillar 2
Business Plan – Pillar 2 Environmental, Social and Economic Sustainability Maintain the Paramount Target of Maximum Safety 2 Digital Innovation • ATM Virtualization and Cloudification • Artificial Intelligence and Internet of Things Initiatives throughout hyper-automation tools as a support implemen
Slide 29: Business Plan – Pillar 3
Business Plan – Pillar 3 Environmental, Social and Economic Sustainability Maintain the Paramount Target of Maximum Safety 3 New Market Positioning Initiatives • Enhancement and integration of Group’s • Define and implement new services for UAV products and offerings vehicles, coherently with market
Slide 30: Business Plan – Horizontal Pillars
Business Plan – Horizontal Pillars Environmental, Social and Economic Sustainability Maintain the Paramount Target of Maximum Safety 4 5 6 Corporate Corporate Structure Empowering Efficiency Evolution People • Internalization of ATM • Young talent selection and Initiatives platform maintenance • End
Slide 31: 2022 – 2024 Business Plan Targets
2022 – 2024 Business Plan Targets Total revenue CAGR mid single digit Non-regulated revenue approximately €50m in 2024 EBITDA CAGR high single digit EBIT margin approximately 17% in 2024 CAPEX approximately €350m Total investments 2022-2031 approximately €1 billion 31
Slide 32: Appendix
CVlenav group Appendix
Slide 33: Overview of Customer Base
Overview of Customer Base Well Diversified Customer Base (1) 2021 2020 19.7% 17.3% 5.2% 5.4% ▪ Broad customer base which includes carriers from diversified geographies 5.1% 10.0% 5.1% 3.0% ▪ Balanced exposure towards low-cost and full- 4.3% 4.1% service airlines 2.8% 2.4% 2.7% 2.6% ▪ Empty routes qu
Slide 34: Reference Regulation – Key Principles of Tariffs
Reference Regulation – Key Principles of Tariffs ▪ The system adopted by all Air Navigation Service Providers of the Member States provides for the payment of a tariff for both en-route and terminal services ▪ Tariffs are determined as planned costs divided by planned traffic volumes (measured as “S
Slide 35: En-route Tariff – Chargeable Costs
En-route Tariff – Chargeable Costs Total Cost Base Calculation (Chargeable Costs) Determined Costs Breakdown A ENAV Determined costs ENAV costs Non-ENAV costs ~ 90% 10% ▪ Labour + Other Opex + Eurocontrol costs ▪ D&A Cost of capital ▪ Cost of capital 9% Labour + Other Opex B Non-ENAV Determined cost
Slide 36: Traffic Balance
Traffic Balance Key Principles Deviation between planned traffic from Performance Scheme and current traffic leads to a traffic risk borne: ▪ Entirely by ENAV if the delta is within the +/- 2% range ▪ 30% by ENAV and 70% by airlines if the delta is within: • -2% / -10% or • +2% / +10% ▪ 100% by airl
Slide 37: The Balance from Traffic Risk Sharing Mechanism
The Balance from Traffic Risk Sharing Mechanism Year N: Economic Effect Year N+2: Financial Effect Balance Planned Costs (e.g. +10 under Define the Step 1 Applicable Tariff as: recovery) Planned Traffic Define the Planned Costs + Balance (+10) Step 1 Applicable Tariff as: Planned Traffic Step 2 Plan
Slide 38: En-route Tariff – Efficiency Target for DUC in RP3
En-route Tariff – Efficiency Target for DUC in RP3 RP3 Performance Plan (2020-2024): Key Economic Assumptions (1) ▪ The level of efficiency, agreed with the European Commission and officially approved via the Executive Decision of European Commission 2022/773, shows an average of 1.9% decrease per y
Slide 39: Historical Income Statement 2015-2021
Historical Income Statement 2015-2021 €m 2015 2016 2017 2018 2019 2020 2021 Net Sales 850 865 882 890 903 771 836.6 En-Route 566 583 615 675 689 233 324.0 Terminal 180 195 220 223 231 82 136.3 (1) Other 104 87 47 (8) (18) 456 376.2 Operating costs (607) (610) (598) (592) (600) (561) (614.2) Personne
Slide 40: Historical Revenue, Net Revenue and Opex Overview 2015-2021
Historical Revenue, Net Revenue and Opex Overview 2015-2021 ▪ Main drivers of ENAV’s net revenue are en-route and €m 2015 2016 2017 2018 2019 2020 2021 terminal businesses, representing about 96% of net Revenue 859 875 892 899 912 781 845.1 revenue Capex contribution (9) (10) (10) (9) (9) (10) (8.5)
Slide 41: Historical Balance Sheet 2015-2021
Historical Balance Sheet 2015-2021 €m 2015 2016 2017 2018 2019 2020 2021 (1) Property, plant and equipment & right-of-use assets 1,084 1,056 1,028 1,000 985 930 885 Intangible assets 122 123 124 122 172 176 176 Investments 35 36 51 60 63 50 47 Other non-current assets and liabilities 67 84 17 (118)
Slide 42: 2021 Cash Flow and Capitalization
2021 Cash Flow and Capitalization Maturity Total debt Current outstanding/ Non-current cash (€m) (<1 year) Financial Debt 252 415 667 Trade Payable* 42 42 Total Debt 252 457 709 Cash & Equivalents 225 Net Debt (Net Cash) 484 Net Debt / EBITDA 2.17 x • ENAV’s liquidity and financial position remains
Slide 43: 2021 Cash Flow Details
2021 Cash Flow Details €m 129.3 (74.8) (289.6) 78.0 317.4 180.0 8.6 225.3 (59.9) (63.7) Cash 2020 (1) Net profit D&A Change (2) Change in (3) Cash Debt Debt Other Cash 2021 in NWC other A&L Capex repayment increase items • The cash balance decreased by €92,1m in 2021 vs 2020 (1) as a result of: • Ne
Slide 44: Disclaimer
Disclaimer This presentation contains certain forward-looking statements that reflect the Company’s management current views with respect to future events and financial and operational performance of the Company and its subsidiaries. These forward-looking statements are based on ENAV S.p.A.’s curren