Enav S.p.a. · MIL:ENAV
Enav — Investor Presentation (May 2023)
44 slides from Enav's investor presentation, May 24, 2023
Slide 1: Investor Presentation
Investor Presentation May 24, 2023
Slide 2: ENAV Leading Air Traffic Control Service Provider
ENAV Leading Air Traffic Control Service Provider Only Air Navigation Service Provider (ANSP) worldwide listed on a stock exchange and 1 4th largest ANSP in Europe 1 Sole provider of air traffic control and navigation services in Italy entrusted by national 2 law without time limit Supportive pan-Eu
Slide 3: ENAV in a Nutshell
ENAV in a Nutshell ENAV Group Structure Italian Airspace Managed 4,185 employees as of December 31, 2022 DA AGGIORNARE PERCENTUALE AIREON Proprietary Infrastructure Controlled air space 751,742 Km2 of which Italian land territory 302,071 Km2 Airports 45 Area Control Centres 4 Primary and secondary r
Slide 4: 2022 Group's Highlights
2022 Group’s Highlights Flight handled Total EBITDA Net Result 1,875,685 Revenue €272.2m (1) +22.4% vs. FY 2021 €104.5m One day peak €944.3m +33.9% vs. FY 2021 EBITDA margin 6,867 +12.9% vs. FY 2021 28.8% (2) CAPEX Net Financial Debt Scope 1 and Scope 2 Total classroom and CO2 emissions e-learning t
Slide 5: Governance & Shareholders' Structure
Governance & Shareholders’ Structure (1) Shareholding Governance Shareholders by type Shareholders by geographic Treasury Rest of EU + Alessandra Bruni UK + Rest of the (4) Shares Unidentified Ireland Switzerland world and Chair of the Board of Directors 0.2% 7.9% 4.5% 3.1% undisclosed Retail 4.7% 4
Slide 6: Historical Shareholders Remuneration
Historical Shareholders Remuneration Historical Dividend Distribution €m 180 €180m extraordinary dividend paid 113 in August 2015 108 106.4 95 101 58.5 47 32 36 0 2013A 2014A 2015A 2016A 2017A 2018A 2019A 2020A 2021A 2022A • 2022 dividend: €106.4m to be distributed on the 25 October equivalent to 0.
Slide 7: Top Performance Through the Years
Top Performance Through the Years Average Minutes of En-route Delay per Flight 0.25 Amongst Member States subject to EU Performance Scheme, ENAV: 0.11 0.11 0.11 0.07 0.07 0.05 0.024 0.021 0.007 • is the 4th largest Air Navigation (1) 2018 2019 2020 2021 2022 Service Provider (2) Actual average minut
Slide 8: 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 (75% of total revenue1): handling of air traffic crossing Italian airsp
Slide 9: Non-Regulated Business – Worldwide Presence
Non-Regulated Business – Worldwide Presence ENAV Group proactively seeks 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, Morocco, Mauritius, Mozambi
Slide 10: 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 11: 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 12: 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 13: Sustainability Performance in 2022
Sustainability Performance in 2022 ENAV’S PURPOSE: Every day we let passengers fly with reliability and safety. We design the sky of the future, investing on people and innovation for sustainable air transport and the economic growth of our Country PEOPLE • 99.9% of employees on full-time permanent
Slide 14: 2021-2024 Sustainability Plan and 2022 Achievements
2021-2024 Sustainability Plan and 2022 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 15: Strategy to Reduce Emissions
Strategy to Reduce Emissions Emissions Annual Trend (1) 65,080 (tons CO 2 eq. ) 54,368 51,689 53,996 -74.5% 34,500 31,064 23,891 3,005 4,316 3,537 4,781 4,300 2019 2020 2021 2022 The roadmap defined by ENAV to reduce emissions foreseen two main targets: 1. 2022 - Carbon Neutrality The achievement of
Slide 16: Operating in a Favorable Market Environment
Operating in a Favorable Market Environment
Slide 17: Benefiting From Long Term Growth Trend of Global Aviation Market
Benefiting From Long Term Growth Trend of Global Aviation Market Global Traffic Increase Supporting Service Units Growth in the Medium-long Term World annual RPK (1) (trillion) 20 2019-2040 ▪ External source indicates a global 16 Air traffic has doubled +3.9% CAGR growth in traffic reflecting a ever
Slide 18: Diversified Customer Base and Business Mix Provide Resilient Results
Diversified Customer Base and Business Mix Provide Resilient Results Diversified Business Mix (1) 2022 En-route traffic breakdown (by Service Units) 2022 Terminal traffic breakdown (by Service Units) ▪ Diversified business mix with (2) National majority of revenue from en- Overflight 20% National ro
Slide 19: European Regulatory Framework Providing Long-term Visibility (1/2)
European Regulatory Framework Providing Long-term Visibility (1/2) En-route (75% 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 regulato
Slide 20: European Regulatory Framework Providing Long-term Visibility (2/2)
European Regulatory Framework Providing Long-term Visibility (2/2) Terminal (25% 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 cos
Slide 21: 2022-2024 Business Plan Overview
2022-2024 Business Plan Overview
Slide 22: 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 23: 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 24: 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 25: 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 26: 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 27: 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 28: 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 29: 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 30: 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 31: 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 32: 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 33: Appendix
Investor Presentation Appendix
Slide 34: Overview of Customer Base
Overview of Customer Base Well Diversified Customer Base (1) 2022 2021 20.1% 19.7% • Broad customer base which includes carriers 6.3% 5.2% from diversified geographies 5.8% 1.6% 5.6% 5.1% • Balanced exposure towards low-cost and 3.9% 4.3% full-service airlines 2.8% 2.8% 2.6% 2.7% • Empty routes quic
Slide 35: 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 36: 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 37: 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 38: 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 39: 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 40: Historical Income Statement 2015-2022
Historical Income Statement 2015-2022 €m 2015 2016 2017 2018 2019 2020 2021 2022 Net Sales 850 865 882 890 903 771 837 944 En-Route 566 583 615 675 689 233 324 648 Terminal 180 195 220 223 231 82 136 220 (1) Other 104 87 47 (8) (18) 456 376 76 Operating costs (607) (610) (598) (592) (600) (561) (614
Slide 41: Historical Revenue, Net Revenue and Opex 2015-2022
Historical Revenue, Net Revenue and Opex 2015-2022 • Main drivers of ENAV’s net revenue are en-route and terminal businesses, representing about 96% of net €m 2015 2016 2017 2018 2019 2020 2021 2022 revenue Revenue 859 875 892 899 912 781 845 953 Capex contribution (9) (10) (10) (9) (9) (10) (9) (8)
Slide 42: Historical Balance Sheet 2015-2022
Historical Balance Sheet 2015-2022 €m 2015 2016 2017 2018 2019 2020 2021 (1) 2022 (1) Property, plant and equipment & right-of-use assets 1,084 1,056 1,028 1,000 985 930 885 852 Intangible assets 122 123 124 122 172 176 176 180 Investments 35 36 51 60 63 50 47 36 Other non-current assets and liabili
Slide 43: 2022 Cash Flow and Capitalization
2022 Cash Flow and Capitalization FY 2022 FY 2021 Maturity Total debt Total debt D €m Current outstanding/ outstanding/ Non-current cash cash (<1 year) Financial Debt 434 168 601 667 (66) Trade Payable* 74 74 42 33 Total Debt 434 242 676 709 (33) Cash & Cash Equivalents 268 225 42 Net Debt 408 484 (
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