3i Infrastructure PLC · LSE:3IN
3i Infrastructure — H1 FY2020 Earnings Presentation
37 slides from 3i Infrastructure's earnings presentation, Nov 7, 2019
Slide 1: Results for the half year to 30 September 2019
Results for the half year to 30 September 2019 7 November 2019
Slide 2: Important information
Important information The sole purpose of this information-only presentation (“Presentation”) is to provide information on a The distribution of this Presentation in certain jurisdictions may be restricted by law. Persons into whose non-reliance basis about 3i Infrastructure plc and its subsidiaries
Slide 3: Paul Masterton, Senior Independent Director
Paul Masterton Senior Independent Director
Slide 4: Today's agenda
Today’s agenda Introduction Paul Masterton Business review Phil White Financial review James Dawes Q&A All 4
Slide 5: HY20 results: another successful period
HY20 results: another successful period 5.8% Total return on opening NAV Good portfolio performance drove growth in net asset value 243.6p NAV per share Income and non-income cash in line with £57m expectations Total income and non-income cash New investment in Ionisos further diversifies £186m the
Slide 6: Share price continues to outperform with low correlation
Share price continues to outperform with low correlation Half-year share price performance Total Shareholder Return 3iN FTSE 250 3iN Half year 8.9% 6.3% FTSE 250 Since IPO 13.6% 7.6% (per annum) BETA - 3iN to FTSE 250 0.085 12 months to 30 September Apr May Jun Jul Aug Sep Note: FTSE 250 rebased to
Slide 7: Phil White, Managing Partner, Infrastructure
Phil White Managing Partner, Infrastructure, 3i Investments plc
Slide 8: Our strategy and objectives
Provide shareholders with sustainable long term returns Our strategy Our objectives To maintain a balanced portfolio of To provide shareholders with: infrastructure investments delivering • A total return of 8% to 10% per an attractive mix of income yield and annum, to be achieved over the capital a
Slide 9: Consistently strong performance
Consistently strong performance 1 Buy well, selectively sell at the right time 2 Active asset management 3 Manage balance sheet efficiently 9
Slide 10: New investment: Ionisos
New investment: Ionisos Cold sterilisation for the healthcare industry • Bilateral deal outside of a formal auction process • Supportive long term and non-cyclical demand dynamics • High barriers to entry Ownership 95% Date invested September 2019 • Growth opportunities organically and Management te
Slide 11: Key management team updates
Key management team updates Attero 5% Infinis 13% 9% 11% Joulz Tampnet 11
Slide 12: Actively managing a balanced portfolio: Joulz
Actively managing a balanced portfolio 27 assets £2.2bn 9% Joulz 12
Slide 13: Actively managing a balanced portfolio: Tampnet
Actively managing a balanced portfolio 27 assets £2.2bn 11% Tampnet 13
Slide 14: Actively managing a balanced portfolio: Valorem
Actively managing a balanced portfolio Valorem 4% 27 assets £2.2bn 14
Slide 15: Actively managing a balanced portfolio: Attero
Actively managing a balanced portfolio Attero 5% 27 assets £2.2bn 15
Slide 16: Actively managing a balanced portfolio: Oystercatcher
Actively managing a balanced portfolio Oystercatcher 7% 27 assets £2.2bn 16
Slide 17: Actively managing a balanced portfolio: ESVAGT
Actively managing a balanced portfolio ESVAGT 8% 27 assets £2.2bn 17
Slide 18: Actively managing a balanced portfolio: Operational projects
Actively managing a balanced portfolio 27 assets £2.2bn 11% Operational projects 18
Slide 19: Actively managing a balanced portfolio: Infinis
Actively managing a balanced portfolio Infinis 13% 27 assets £2.2bn 19
Slide 20: Outlook
Outlook Well positioned to deliver our objectives Liquidity to make new selective investments Large dedicated infrastructure team incentivised to perform Balanced portfolio well placed to deliver on our objectives 20
Slide 21: James Dawes, CFO, Infrastructure
James Dawes CFO, Infrastructure, 3i Investments plc
Slide 22: Efficient balance sheet
Efficient balance sheet (£m) 503 RCF 200 Accordion 16 300 RCF (192) 223 Cash 3 3 Cash Drawn RCF (41) (176) Net debt Equity issue Interim dividend Pro forma cash Total liquidity 22
Slide 23: Income growing as expected
Income growing as expected (£m) Non-income cash Income 132 81 86 57 33 6 48 46 51 HY18 HY19 HY20 23
Slide 24: NAV progression
NAV progression HY20 growth driven by capital return (£m) 243.6p 230.4p 51 1,974 74 (18) 1,867 Opening NAV at Net capital return Total income Net costs Closing NAV at 30 1 1 April 2019 September 2019 1. Net of final dividend for the prior year of £35.1m. 24
Slide 25: Pro forma NAV
Pro forma NAV Ex-dividend date for 3iN interim dividend is 28 November 2019. 25
Slide 26: Good asset returns across the portfolio
Good asset returns across the portfolio Total portfolio return 6.0% WIG 4.9% Infinis 4.0% Tampnet 14.2% TCR 5.7% Joulz 4.9% Ionisos 0.4% ESVAGT 4.9% Oystercatcher (0.5)% Attero 7.0% Valorem 11.7% Projects 12.6% India fund 3.4% 26
Slide 27: Discount rate movement
Discount rate movement The weighted average discount rate has decreased to 10.7% Portfolio weighted average discount rate 13.8% 13.2% 12.4% 12.5% 12.6% 12.0% 11.8% 10.5% 10.8% 10.2% 9.9% 10.0% 10.7% Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Sep-19 Mar-20 HY
Slide 28: Q&A
3) Infrastructure plc @ Q&A
Slide 29: Appendix
3) Infrastructure ple Si Appendix
Slide 30: FY20 target dividend growth of 6.4%
FY20 target dividend growth of 6.4% Dividend growth since IPO (pence per share) Special dividends Ordinary dividends FY20 dividend target 41.4 17.0 10.2% 6.4% 4.2% p.a.1 6.49 6.70 7.00 7.25 7.55 7.85 8.65 9.20 5.00 5.30 5.50 5.72 5.94 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
Slide 31: Portfolio summary
Portfolio summary 30 September 2019 (£m) Directors' Allocated Directors' Accrued Foreign Underlying Portfolio total Investment in Divestment in Value valuation 30 foreign Portfolio assets valuation 31 income exchange portfolio income return in the the period the period movement September exchange Ma
Slide 32: Portfolio breakdowns
Portfolio breakdowns Portfolio value by sector Portfolio value by geography 16% Continental Europe 1% 33% 34% 8% UK 65% 20% 23% India Utilities Portfolio value by currency EUR Communications 8% 1% 10% GBP Transportation / logistics 47% NOK Natural Resources / energy DKK 34% Social infrastructure INR
Slide 33: Sensitivities to total return
Sensitivities to total return Inflation linkage Assets with revenues: 29% Sensitivity Directly linked to UK inflation (for European assets only) +1% point -1% point Change in inflation over £51m £(48)m underlying assumption for Partly linked to inflation next 2 years 71% 3% 1% Foreign exchange 7% EU
Slide 34: Hedging programme mitigates volatility
Hedging programme mitigates volatility (£m) FX gains before hedging FX gains after hedging Hedged assets (€/SGD/DKK/NOK) Unhedged assets (£/rupee) 21 6 1 1 Note: SGD exposure is within Oystercatcher, a euro denominated investment. 34
Slide 35: The 3i Infrastructure European team
The 3i Infrastructure European team Experienced and well-resourced team established in 2006 Phil White Managing Partner Chris Stephane Jim Stoner Thomas James Scott Bernardo Aaron Nigel Rowland Anna Dellis Grand- John Cavill Senior Fodor Dawes Moseley Sottomayor Church Middleton Strategy Partner gui
Slide 36: Governance and fees
Governance and fees • Independent chair, four independent non-executive directors and one 3i Group appointed non-executive director • Committed to observe requirements of the UK Corporate Governance Code Board of • Responsibilities include: Directors – overall supervision of 3i Investments plc as th
Slide 37: 3i Infrastructure plc
3} Infrastructure plc