Auckland International Airport Limited · NZX:AIA
Auckland International Airport — FY2018 Earnings Presentation
38 slides from Auckland International Airport's earnings presentation, Aug 23, 2018
Slide 1: Annual Results Presentation
Delivering Annual Results Presentation —— Adrian Littlewood Chief Executive Philip Neutze Chief Financia\Officer 4
Slide 2: Important notice
Important notice 2018 Annual Results For personal use only Disclaimer This presentation is given on behalf of Auckland International Airport Limited (NZX: AIA; ASX: AIA; ADR: AUKNY). Information in this presentation: • is provided for general information purposes only, and is not an offer or invitat
Slide 3: Highlights
For personal use only Highlights
Slide 4: Results at a glance
Results at a glance 2018 Annual Results For personal use only Highlights Revenue Underlying Passenger Operating profit movements cashflow $683.9m $263.1m 20.5m $321.2m performance Financial 8.7% 6.2% 5.7% 4.6% Our continuing journey and guidance EBITDAFI Earnings Aircraft Capital Regulatory per shar
Slide 5: Growth across the business
Growth across the business 2018 Annual Results For personal use only Highlights Aeronautical Retail Transport performance Financial $301.2m revenue 2.5% $190.6m revenue 17.1% $61.0m revenue 8.3% Strong passenger growth: Footprint expansion driving growth: Capacity growth and product choice: Our cont
Slide 6: Delivering key infrastructure
Regulatory Our continuing Financial Highlights 2018 and guidance journey performance 2018 6 For personal use only Annual Results Annual Results Delivering key infrastructure
Slide 7: Financial performance
For personal use only Financial performance
Slide 8: Solid growth in underlying profit
Solid growth in underlying profit 2018 Annual Results For personal use only For the year ended 30 June ($m) 2018 2017 Change Highlights Revenue 683.9 629.3 8.7% Expenses 177.5 156.2 13.6% performance Financial Earnings before interest, taxation, depreciation, 506.4 473.1 7.0% fair value adjustments
Slide 9: Revenue growth across the business
Revenue growth across the business 2018 Annual Results For personal use only For the year ended 30 June ($m) 2018 2017 Change Highlights Airfield income 122.1 119.6 2.1% Passenger services charge 179.1 174.3 2.8% performance Financial Retail income 190.6 162.8 17.1% Car park income 61.0 56.3 8.3% Ou
Slide 10: Steady passenger growth
Steady passenger growth 2018 Annual Results For personal use only For the year ended 30 June 2018 2017 Change Highlights International arrivals 5,116,341 4,906,383 4.3% International departures 5,086,185 4,836,896 5.2% performance Financial International passengers excluding transits 10,202,526 9,74
Slide 11: Steady growth in movements and MCTOW
Steady growth in movements and MCTOW 2018 Annual Results For personal use only For the year ended 30 June ($m) 2018 2017 Change Highlights Aircraft movements International aircraft movements 55,693 54,879 1.5% performance Financial Domestic aircraft movements 118,583 114,366 3.7% Total aircraft move
Slide 12: Expenses driven by business growth
Expenses driven by business growth 2018 Annual Results For personal use only For the year ended 30 June ($m) 2018 2017 Change Highlights Staff 57.9 50.5 14.7% Asset management, maintenance and airport operations 69.5 55.6 25.0% performance Financial Rates and insurance 13.7 12.2 12.3% Marketing and
Slide 13: Associates' performance
Associates’ performance 2018 Annual Results For personal use only Highlights For the year ended 30 June ($m) 2018 2017 Change Queenstown Airport (24.99% ownership) Total Revenue 45.7 39.0 17.2% performance Financial EBITDA 31.6 26.2 20.6% Underlying Earnings (Auckland Airport share) 3.8 3.0 26.7% Ou
Slide 14: Capital expenditure
Capital expenditure 2018 Annual Results • Capital expenditure in 2018 increased 8.1% to Historical and forecast capital expenditure For personal use only Highlights $405.2m 600 • Over 90% of the capital expenditure is investing 500 for future earnings growth, c.$40m renewals performance 400 Financia
Slide 15: Funding
Funding 2018 Annual Results • Reflecting increased infrastructure investment, Debt maturity profile For personal use only Highlights offset by proceeds from the sale of NQA, total borrowings at 30 June were flat with the prior year less than 1 year at $2,060m performance Financial • Committed undraw
Slide 16: Our continuing journey
For personal use only Our continuing journey
Slide 17: Growing travel and trade markets
Strategic priority: Growing travel and trade markets 2018 Annual Results 2018 has seen growth across a number of markets For personal use only Highlights performance North Asia Financial Middle East Capacity 13.3% North America Capacity 42.3% Passengers 11.7% Capacity 1.7% Passengers 52.0% China Pas
Slide 18: Growing travel and trade markets: outlook
Strategic priority: Growing travel and trade markets 2018 Annual Results Long-term the outlook remains positive… Multiple opportunities for growth remain For personal use only Highlights • Chinese and Indian middle-class • Continue to focus on emergence and passenger growth forecasts underserved mar
Slide 19: Invest for future growth
Strategic priority: Invest for future growth 2018 Annual Results We have continued to invest more than $1m every day on airport infrastructure For personal use only Highlights Delivery • In 2018 Auckland Airport reached some important milestones in its core aeronautical and infrastructure performanc
Slide 20: Invest for future growth: project timeline
Strategic priority: Invest for future growth 2018 Annual Results Completed 1H FY18 2H FY18 FY19 and beyond For personal use only Highlights Phase 3 • New emigration hall • Phased opening of first new • Remaining Speciality & Extended outbound • Recompose space Speciality stores & Luxury Luxury high
Slide 21: Investing in transport improvements
Strategic priority: Invest for future growth 2018 Annual Results Investing in transport improvements Key projects completed in 2018 For personal use only Highlights Delivery • Investing in a multi-modal transport system to Image 1 Image 2 prioritise staff, passenger and crew access performance Finan
Slide 22: Investment property growth
Strategic priority: Invest for future growth 2018 Annual Results 16.2% growth in property rental, 23.7% growth in rent roll $90.2m Investment property For personal use only Highlights rent roll • Completed 6 developments during FY18, with a land area of 105,000m2 and net lettable area of 42,000m2 pl
Slide 23: Property land bank and anchor projects
Strategic priority: Invest for future growth 2018 Annual Results Well-positioned to service market growth in one of Auckland’s most sought-after locations For personal use only Highlights • One of the largest developers of high-quality commercial property in New Zealand, with 250ha available land ba
Slide 24: Investing in our core operations
Strategic priority: Be fast, efficient and effective 2018 Annual Results Investing in our core operations For personal use only Highlights To improve airport coordination To improve operational effectiveness To improve passenger services performance Financial Our continuing journey First stage trial
Slide 25: Investing in our customer experience
Strategic priority: Be fast, efficient and effective 2018 Annual Results Investing in our customer experience For personal use only Highlights To improve passenger services To improve passenger experience To improve passenger accessibility performance Financial Our continuing journey Strata Lounge w
Slide 26: Strengthen our consumer business: retail
Strategic priority: Strengthen our consumer business 2018 Annual Results Improved retail offering driving strong revenue growth New retail concepts opened 13 For personal use only Highlights during the year • 2018 was a milestone year for our most complex project to date - the expansion of the inter
Slide 27: International departures delivering an improved experience
Strategic priority: Strengthen our consumer business 2018 Annual Results International departures delivering an improved experience For personal use only Highlights Events during the year • Opened new enlarged security screening, ‘decompression’ and dwell areas performance Financial • First stage of
Slide 28: New and exclusive names are coming
New and exclusive names are coming 2018 Annual Results New and exclusive names coming to the airport* For personal use only Highlights Luxury Destination Food & Beverage performance Financial Our continuing journey and guidance Regulatory 28 *Excludes existing brands
Slide 29: Digital future
Regulatory Our continuing Financial Highlights 2018 and guidance journey performance For personal use only Annual Results
Slide 30: Realising our vision for a digital future
Strategic priority: Realising our vision for a digital future 2018 Annual Results ‘The Mall’ is our world-leading online retail platform For personal use only Highlights • The Mall represents the culmination of a strategy to bring physical and online retail together and make us match fit for the mod
Slide 31: Parking revenue increase following capacity additions
Strategic priority: Strengthen our consumer business 2018 Annual Results Parking revenue increase following capacity additions For personal use only Highlights • Car parking income for the year up 8.3% and ARPS up 1.9% as a result of higher demand, improved 34% Increase in Valet exits utilisation an
Slide 32: Focusing on what's important
Focusing on what’s important 2018 Annual Results For personal use only Highlights Customer Safety and Education and experience sustainability employment performance Financial Invested in infrastructure that has Committed to operating in a safe and Sharing the benefits of our enhanced the customer ex
Slide 33: Regulatory and guidance
For personal use only Regulatory and guidance
Slide 34: Regulatory update
Regulatory update 2018 Annual Results • On 26 April, the Commerce Commission published its draft For personal use only Highlights report on Auckland Airport’s PSE3 aeronautical pricing, with submissions and cross-submissions completed in June • The Commission expects to publish its final report on p
Slide 35: Outlook
Outlook 2018 Annual Results Guidance For personal use only Highlights • Moderate underlying profit growth anticipated as we enter the second year of international aeronautical price reductions in the new FY18-22 pricing period performance Financial and infrastructure investment continues at pace • W
Slide 36: Questions
For personal use only Questions
Slide 37: Appendix: Underlying profit reconciliation
Appendix: Underlying profit reconciliation 2018 Annual Results 2018 2017 For personal use only Highlights For the year ended 30 June ($m) Reported Adjustments Underlying Reported Adjustments Underlying profit profit profit profit EBITDAFI per Income Statement 506.4 - 506.4 473.1 - 473.1 performance
Slide 38: Glossary
Glossary 2018 Annual Results For personal use only APOC Airport operations centre ARPS Average revenue per parking space AT Auckland Transport EBITDAFI Earnings before interest, taxation, depreciation, fair value adjustments and investments in associates GDP Gross domestic product HOV High occupancy
Auckland International Airport — FY2018 Earnings Presentation on 6ix