International Public Partnerships Ltd · LSE:INPP
International Public Partnerships — H1 2022 Earnings Presentation
41 slides from International Public Partnerships's earnings presentation, September 2022
Slide 1: HY 2022 Results Presentation
HY 2022 Results Presentation September 2022 Investment: Thames Tideway Tunnel, UK Photo credit: Tideway
Slide 2: Important Information
Important Information The information in this document has been prepared at the direction of International Public contract or commitment whatsoever. This document does not constitute a recommendation Partnerships Limited (“INPP”) solely for use at an information presentation about INPP. This regardi
Slide 3: Overview
INTERNATIONAL = PUBLIC = PARTNERSHIPS = Overview
Slide 4: Our Approach
Our Approach Our purpose is to invest responsibly CONSISTENT AND PREDICTABLE RETURNS in social and public infrastructure that ▪ Resilient, inflation-linked cash flows delivers long-term benefits for all stakeholders. ▪ Focus on growing predictable dividends ▪ Backed mainly by regulated or contracted
Slide 5: HY 2022 in Numbers
HY 2022 in Numbers HIGHLIGHTS Alignment with the UN Sustainable Development Goals (SDGs) is a key part of the Company’s approach to ESG integration8 157.3p | 6.1% c.2.5% | 1.2x NAV P/SHARE1 | INCREASE IN NAV P/SHARE 31 DEC 2021: 148.2p/share DIVIDEND GROWTH2 | DIVIDEND COVER3 H1 2021: 2.7% | 1.3x >5
Slide 6: Portfolio Performance and Valuation
Portfolio Performance and Valuation
Slide 7: Confidence in Long-Term Revenues from Investment Portfolio
Confidence in Long-Term Revenues from Investment Portfolio DIVIDEND GROWTH pence per share 7.74 7.93 HY 2022 FY 2022 FY 2023 Forecast Actual c. 2.5% 7.36 7.55 DIVIDEND TARGET TARGET 7.18 6.82 7.00 DIVIDEND1 DIVIDEND1 6.65 6.30 6.45 6.15 5.85 6.00 5.25 5.40 5.55 5.70 3.87p 7.74p 7.93p per share per s
Slide 8: Valuation Discount Rate Overview
Valuation Discount Rate Overview NAV1 WEIGHTED AVERAGE WEIGHTED AVERAGE RISK CAPITAL DISCOUNT RISK CAPITAL PORTFOLIO RATE RANGE4 DISCOUNT RATE2 DISCOUNT RATE3 £3.0bn or 7.40% 7.11% 4.99% - 9.84% 157.3p per share 30 JUN 2022 31 DEC 2021 VARIANCE NAV1 PER SHARE 157.3p 148.2p 9.1p WEIGHTED AVERAGE RISK
Slide 9: Net Asset Valuation
Net Asset Valuation £m 3,100 3,050 82.8 3,006.2 3,000 2,950 95.4 2,900 320.2 218.2 231.7 62.0 2,850 27.5 2,800 2,750 2,700 2,650 2,600 2,550 2,528.8 2,500 2,450 2,400 2,350 2,300 2,250 2,200 2,150 2,100 2,050 1 NAV at 31 Dec 2021 Capital Raising (post Change in Government Change in Investment Cash D
Slide 10: Short-term inflation sensitivities
Short-term inflation sensitivities ▪ Given the ongoing higher-inflation environment, additional sensitivities have been prepared to allow investors to understand the estimated impact on the Inflation sensitivities as at 30 June 2022 Company’s NAV, other things being equal, of higher inflation rates
Slide 11: HY 2022 Portfolio Review
INTERNATIONAL = PUBLIC = PARTNERSHIPS = HY 2022 Portfolio Review
Slide 12: Cadent is an essential UK gas distribution business
Cadent is an essential UK gas distribution business with four geographic monopolies, serving c.50% of UK gas customers INVESTMENT OVERVIEW INVESTMENT UPDATE WELL-INSULATED FROM GDP ▪ Cadent earns its revenues from providing a safe and reliable gas distribution network to its TRENDS WITH MINIMAL EXPO
Slide 13: Tideway is building a 25km super-sewer under the Thames
Tideway is building a 25km ‘super-sewer’ under the River Thames to create a healthier environment for London INVESTMENT OVERVIEW INVESTMENT UPDATE ▪ Tideway reached the end of the primary tunnelling phase during the period and over half of the LONG-TERM INVESTMENT WITH A secondary lining had been co
Slide 14: Diabolo is a strategic rail transportation asset
Diabolo is a strategic rail transportation asset linking Brussels Airport with Belgium’s national rail network INVESTMENT OVERVIEW INVESTMENT UPDATE ▪ Diabolo has been impacted by the restrictions on international travel and national lockdowns INFLATION-LINKED REVENUES implemented as a result of the
Slide 15: Angel Trains is the UK's largest rolling stock leasing company
Angel Trains is the UK’s largest rolling stock leasing company owning more than 4,000 vehicles INVESTMENT OVERVIEW INVESTMENT UPDATE REVENUES DERIVED FROM LEASING ▪ Angel generates the majority of its revenues from the contractual leasing of its rolling stock to TRAINS TO TOCs, SOME TOCs and therefo
Slide 16: OFTOs
OFTOs OFTOs comprise the onshore and offshore substations and under-sea cables connecting the offshore wind farm with the onshore grid network INVESTMENT OVERVIEW INVESTMENT UPDATE ▪ INPP is currently invested in nine OFTOs and is currently preferred bidder on two further OPERATIONAL AND IMMEDIATELY
Slide 17: Responsible Investment Progress
Responsible Investment Progress The Company continues to demonstrate its leadership in responsible investment and made good progress against its ESG policy objectives DELIVERED IN H1 2022 PROPOSED FOR 2022/23 ▪ Categorised INPP as an Article 8 Financial Product under the EU ▪ Finalise enhanced clima
Slide 18: Looking Forward
INTERNATIONAL = PUBLIC = PARTNERSHIPS = Looking Forward
Slide 19: Pipeline Overview
Pipeline Overview The Company has a committed pipeline of high-quality opportunities totalling c.£230m, as set out in the table below. KNOWN/COMMITTED LOCATION INVESTMENT TENOR ESTIMATED INVESTMENT 1 STATUS Diabolo Belgium 26 years Up to £5.8m2 A further contingent commitment available, if required
Slide 20: Summary and Outlook
Summary and Outlook HIGH PERFORMING PORTFOLIO WITH DEFENSIVE CHARACTERISTICS ▪ Significant uplift in NAV with total NAV return for the six-month period of 8.7%1 ▪ Strong inflation linkage continues to provide a good level of protection in higher-inflation environments ▪ Excellent operational perform
Slide 21: Appendices
INTERNATIONAL = PUBLIC = PARTNERSHIPS Appendices
Slide 22: Portfolio Overview and Valuation
Portfolio Overview and Valuation
Slide 23: Valuation Methodology
Valuation Methodology NAV CALCULATION 1 ADDITIONAL VALUE DRIVERS ▪ ‘Sum-of-the-parts’ aggregation of the present value of We believe additional value may exist additional to that each of the Company’s investments plus other balance captured in our valuation process. These items are not sheet items c
Slide 24: INPP's Top 10 Investments
INPP’s Top 10 Investments % INVESTMENT % INVESTMENT STATUS AT % HOLDING AT PRIMARY SDG NAME OF INVESTMENT LOCATION SECTOR FAIR VALUE AT FAIR VALUE AT 30 JUN 2022 30 JUN 20221 SUPPORTED 30 JUN 2022 31 DEC 2021 Gas UK Operational 7% Risk Capital 15.1% 15.5% Distribution UK Waste Water Under Constructi
Slide 25: Investments at Fair Value
Investments at Fair Value £m 2,800 2,750 95.4 2,728.2 2,700 2,650 31.1 7.0 91.4 93.2 13.5 2,600 2,579.4 2,550 2,495.0 2,500 2,450 2,400 2,350 2,300 2,250 2,200 2,150 2,100 Investments at Fair Investments Investment Rebased Investments Portfolio Return1 Change in Discount Change in Foreign Change in
Slide 26: Portfolio Analysis
Portfolio Analysis 1 SENIOR DEBT CONSTRUCTION 8% LATER STAGE 13% INVESTOR3 34% MODE OF <50% 49% OWNERSHIP 45% 100% INVESTMENT ACQUISITION/ OWNERSHIP STAKE OWNERSHIP TYPE ASSET STATUS 66% 87% 6% 92% EARLY OPERATIONAL STAGE INVESTOR2 RISK CAPITAL 50% – 100% OWNERSHIP IRELAND DENMARK COURTS OTHER CANAD
Slide 27: Revenue type and service providers
Revenue type and service providers PORTFOLIO BY REVENUE TYPE 1 INPP SERVICE PROVIDERS 1 DIGITAL OTHER - ANGEL TRAINS, DOWNER & INFRASTRUCTURE BENEX AND NDIF OTHER ROLLING SPOTLESS 4 STOCK 2% 7% INFRABEL NV 10% 12% VAN PUBLIEK RECHT PPPs WITH 7% REVENUE RISK 3 MECHANISMS MITIE2 1% 4% 10% 3 REGULATED
Slide 28: Valuation Sensitivities and Discount Rate Trends
Valuation Sensitivities and Discount Rate Trends ESTIMATED IMPACT OF CHANGES IN KEY VARIABLES ON 30 JUNE 2022 NAV OF 157.3p PER SHARE PORTFOLIO INFLATION LINKAGE1 Discount rates +/-1% -13.9 17.0 Inflation +/- 1% Foreign Exchange +/-10% -12.3 -3.4 3.4 14.2 0.7% p.a. (Dec 2021: 0.7% p.a.) Deposit rate
Slide 29: Projected Cash Flows Under a +100bps Inflation Scenario
Projected Cash Flows Under a +100bps Inflation Scenario Projected annual cash flows available for dividends (+100bps inflation) 1 £m 400 350 300 250 200 150 100 50 0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048
Slide 30: Macroeconomic Assumptions
Macroeconomic Assumptions MACROECONOMIC ASSUMPTIONS 30 JUNE 2022 31 DECEMBER 2021 Inflation rates UK RPI: 9.00% (2022), 2.75% RPI 5.00% (2023), 2.75% thereafter CPIH: 7.00% (2022), 4.00% (2023), 2.00% thereafter 2.00% CPIH Australia 5.00% (2022), 2.50% thereafter 2.50% Europe 6.00% (2022), 2.00% the
Slide 31: Delivering against ESG KPIs
Delivering against ESG KPIs The Company drew on its POLICY OBJECTIVE POLICY OBJECTIVE KPIs to help monitor The Company will use ESG drivers to create investment The Company will identify and integrate ESG factors into progress against its ESG opportunities in new and existing markets all aspects of
Slide 32: Portfolio Information
Portfolio Information INVESTMENTS MADE DURING THE PERIOD TO 30 JUNE 2022 PRIMARY SDG INVESTMENT LOCATION OPERATIONAL STATUS AMOUNT INVESTMENT DATE SUPPORTED UK PPP PORTFOLIO1 UK Operational £1.5m June 2022 DIABOLO Belgium Operational £4.32,3 June 2022 NDIF UK Operational £1.2m Various TOTAL £7.0m IN
Slide 33: Portfolio Information (Continued)
Portfolio Information (Continued) ASSETS UNDER CONSTRUCTION CONSTRUCTION DEFECTS % INVESTMENT PRIMARY SDG INVESTMENT LOCATION COMPLETION DATE COMPLETION DATE STATUS FAIR VALUE SUPPORTED Behind original TIDEWAY UK 20251 2028 13.0% schedule2 HMRB Australia 2024 N/A3 On schedule 0.0%4 GOLD COAST LIGHT
Slide 34: Other Asset Management Updates
Other Asset Management Updates BENEX AVAILABILITY-BASED PPPS DIGITAL INFRASTRUCTURE ▪ Revenues generated through the contractual ▪ Availability-based PPPs account for 29% of the ▪ In July 2017, INPP committed to invest up to leasing of rolling stock and through direct Company’s portfolio by investme
Slide 35: Cash Generation and Operating Costs
Cash Generation and Operating Costs 30 JUN 2022 31 DEC 2021 30 JUN 2021 SUMMARY CASH FLOW (£M) (£M) (£M) NOTES Opening cash balance 56.1 44.3 44.3 Increase over H1 21 reflects the continued good operational Cash from investments 91.4 167.9 87.1 performance of the portfolio Corporate costs (for ongoi
Slide 36: Gearing and Investment Life
Gearing and Investment Life TIDEWAY ASSET LEVEL DEBT 13% ▪ Asset level debt is non-recourse to the Company OFTOS CADENT 21% PPP & OFTOS 15% ▪ Generally fixed-term, fixed-rate debt ▪ Principal generally amortised over the life of the project ▪ Structure is intended to minimise risk OPERATING 12% BUSI
Slide 37: About Amber Infrastructure
INTERNATIONAL — PUBLIC — PARTNERSHIPS = About Amber” Infrastructure
Slide 38: Specialist fund manager
CONFIDENTIAL Specialist fund manager Amber manages or advises eight co-mingled funds and other managed accounts AMBER FUND FOCUS HIGHLIGHTS PARTNERS SIZE 15-year track record; Long-term public infrastructure Predominantly institutional and c.£3.1bn assets FTSE 250-listed investment private wealth ma
Slide 39: Amber's extensive international track record and presence
CONFIDENTIAL Amber’s extensive international track record and presence Amber has offices and personnel across Europe, North America and Australia Helsinki EUROPE UNITED KINGDOM ▪ Federal German Ministry of Education ▪ Cadent Gas Distribution and Research Headquarters ▪ Thames Tideway Tunnel ▪ Dublin
Slide 40: Contacts
INTERNATIONAL = PUBLIC = PARTNERSHIPS = Contacts
Slide 41: Contact Details
Contact Details AMBER FUND MANAGEMENT FTI CONSULTING (PR & COMMUNICATIONS) Director, INPP: Giles Frost Senior Director: Ed Berry Telephone: +44 (0)20 7939 0550 Telephone: +44 (0)20 3727 1046 Email: Giles.Frost@amberinfrastructure.com Email: Edward.Berry@fticonsulting.com Investment Director: Chris M
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