3i Infrastructure PLC · LSE:3IN
3i Infrastructure — FY2024 Earnings Presentation
43 slides from 3i Infrastructure's earnings presentation, May 2024
Slide 1: Results for the year to 31 March 2024
Results for the year to 31 March 2024 1
Slide 2: Important information
Important information This disclaimer (and any non-contractual obligations arising out of or in connection with it) is governed by English law and applies to these materials and to their presentation and webcast on behalf of 3i Infrastructure plc (together the “Presentation”). The sole purpose of th
Slide 3: Important information (cont.) - US Persons
Important information (cont.) - US Persons The distribution of this Presentation in certain jurisdictions may be restricted by law. Persons into whose possession this Presentation comes are required to inform themselves about and to observe any such restrictions. Terms used in this disclaimer (inclu
Slide 4: Our Investment Approach
3) Infrastructure plc Si Our Investment Approach
Slide 5: Our strategy and objectives
Our strategy and objectives Our strategy Our objectives To maintain a balanced portfolio of To provide shareholders with: infrastructure investments delivering an • A total return of 8% to 10% per attractive mix of income yield and capital annum over the medium term; and appreciation for shareholder
Slide 6: Unique approach delivering long-term sustainable returns
Unique approach delivering long-term sustainable returns Strong market positions Supportive megatrends Exceptional asset management 6
Slide 7: Top-quartile track record
Top-quartile track record 14% Net annualised return1 Median peer return: 9%2 18% Net annualised return1 Median peer return: 10%2 Core-plus strategy Financial year 1. Annualised growth rate in NAV per share including ordinary and special dividends. 2. IRR calculation based on historic returns of Euro
Slide 8: Performance skewed to the upside
Performance skewed to the upside Oystercatcher Target Gross IRR Realised 8
Slide 9: A compelling risk-return profile
A compelling risk-return profile Base case returns Upside potential Portfolio return + Exit at a premium 18% Accretive growth Capital + capex Asset IRR since inception Income Strong downside protection 9
Slide 10: Another outstanding return
Another outstanding return Base case returns Upside potential Portfolio return + Repositioned as core infrastructure 22% Extended contracts Asset IRR Capital + Effective capital Exit at a premium 2.7x structure Money Multiple Growth investments Income • Plastic recycling • Biogas • Carbon capture St
Slide 11: Portfolio supported by megatrends
Portfolio supported by megatrends Megatrends Investment themes Our portfolio Renewable energy generation Energy transition Electrification / energy transition Shared resources Automation and digital operations Digitalisation Increasing connectivity and demand for bandwidth Demographic Demand for hea
Slide 12: Reinvestment strategy delivering strong earnings growth
Reinvestment strategy delivering strong earnings growth 16% EBITDA growth 8% EBITDA growth excl. energy companies incl. energy companies Mid-teens Over £400m Unlevered returns Largely self-funded Note: EBITDA reflected is the portfolio companies’ EBITDA (for the twelve months ending 31 December 2023
Slide 13: Value driven by growth
Value driven by growth 36% 109% 191% 24% 96% 34% 50% 14% 31% 28% 18% 2015 2016 2016 2018 2018 2019 2019 2021 2021 2022 2023 13
Slide 14: Exceptional asset management
Exceptional asset management Strategic Select and align Drive ESG and Enable growth control management sustainability 10 100% Of those portfolio Portfolio companies where companies have 5 aligned long-term Refinancings 3i controls the aligned with SBTs management board incentives 14
Slide 15: Our Performance in FY24
3) Infrastructure plc Si Our Performance in FY24
Slide 16: High quality, diverse portfolio
High quality, diverse portfolio Energy transition Digitalisation 12 Demographic change companies Renewing £3.8bn essential infrastructure portfolio Other critical infrastructure Note: All numbers are as at 31 March 2024. 16
Slide 17: Another year of outperformance
Another year of outperformance Exceeded our target return of 8-10% per annum 11.4% Total return on opening NAV Continued strong value growth in real terms 362.3p NAV per share Earnings-driven growth capex reinvested in the portfolio Over £400m Growth capex Delivered FY24 dividend, fully covered 11.9
Slide 18: Value driven growth across the portfolio
Value driven growth across the portfolio Our larger assets continue to outperform Asset contributions to total portfolio return (£m) £460m Oyster- catcher 18
Slide 19: Footprint and leasing penetration driving material outperformance
Footprint and leasing penetration driving material outperformance Upside growth potential Expand leasing model to new types of equipment New geographies with low penetration rate and substantial aviation markets in Asia and North America Operates in 212 airports Base case Bolt-on acquisition of KES
Slide 20: New basins and end markets
New basins and end markets Upside growth potential Expand into new, high growth basins Diversify into connecting offshore wind farms Carbon sequestration projects in North Sea sites New fibre contracts secured in the North Sea Base case and Gulf of Mexico growth in value Further fibre projects being
Slide 21: Internationalisation and latent value in fleet
Internationalisation and latent value in fleet Upside growth potential Export the SOV model to new geographies MoU signed with a JV partner in South Korea Renewal of contracts at higher rates Two tenders won to serve Base case long-term charters growth in value 4 vessels under construction FY24 Key
Slide 22: Update
Update 4% of portfolio value • Sector remains challenging • Recruited a new Valuation (£m) management team • Early progress connecting homes onto the network Follow-on investment 22
Slide 23: Moving forward with confidence
Moving forward with confidence High performing portfolio of core-plus assets Value creation opportunities across the portfolio Strong track record 23
Slide 24: Our Portfolio
3) Infrastructure plc Si Our Portfolio
Slide 25: TCR
TCR Ground support equipment in airports worldwide TCR is the largest independent lessor of airport ground support equipment (“GSE”) and operates at over 210 airports across more than 20 countries. TCR has defined the market for leased GSE, providing high quality assets under full-service leasing, a
Slide 26: ESVAGT
ESVAGT Wind farm maintenance support vessels and emergency response vessels ESVAGT is the pioneer and market leader in the provision of purpose-built, high performance maintenance vessels (“SOVs”) to offshore wind farms, with nine in operation and four further vessels under construction. They provid
Slide 27: Infinis
Infinis Renewable power generator in the UK Infinis is the largest generator of low carbon electricity from captured methane in the UK, with a portfolio of renewable baseload and low carbon flexible generation across 137 operational sites and a total installed capacity of 530MW. Infinis had a strong
Slide 28: GCX
GCX The largest private subsea cable network globally GCX owns one of the most comprehensive subsea cable networks globally, serving customers in over 180 countries. Its 66,000km of cables, spanning from North America to Asia, would require large upfront investments and a multi-year lead time to rep
Slide 29: Tampnet
Tampnet Offshore telecom network Tampnet operates the world’s largest offshore, high-capacity communication network in the North Sea and the Gulf of Mexico. It provides customers with mission-critical reliable communications including high speed, low latency and resilient data connectivity offshore
Slide 30: Ionisos
Ionisos Cold sterilisation facilities across Europe Ionisos is the third largest cold sterilisation provider globally. It has a highly diversified customer base and delivers a mission-critical, non- discretionary service for the medical, pharmaceutical and cosmetics industries for whom cold sterilis
Slide 31: Joulz
Joulz Essential energy infrastructure equipment and services Joulz is a provider of essential energy infrastructure equipment and services in the Netherlands. It owns and leases medium voltage electricity infrastructure such as transformers, switchgears and cables alongside a metering business which
Slide 32: Oystercatcher
Oystercatcher Oil product storage in Singapore Oystercatcher is the holding company through which the Company holds a 45% interest in Advario Singapore Limited. Advario Singapore is a 1.3 million cubic metre facility focused on storage and blending of refined clean petroleum products for a range of
Slide 33: SRL
SRL Leading lessor of temporary traffic management equipment in the UK SRL is the market leading temporary traffic equipment (“TTE”) rental company in the UK. Its market-leading reputation is supported by its network of 30 depots nationwide, providing a 24/7 365 days a year service on which customer
Slide 34: Valorem
Valorem Diversified renewable energy developer and producer Valorem is a leading independent European renewable energy developer and power producing company. It is one of the largest onshore wind developers in France, having developed over 1GW of capacity over the last 15 years. Valorem had a very g
Slide 35: DNS:NET
DNS:NET Fibre network owner and developer in Germany DNS:NET is an independent telecommunications provider based in Berlin. It has an existing FTTC network in Berlin and the surrounding areas. In 2020 it moved its focus to rolling out a FTTH network in its home region. It is the largest alternative
Slide 36: Future Biogas
Future Biogas Renewable energy Future Biogas is one of the largest anaerobic digestion (“AD”) plant developers and biogas producers in the UK. Biomethane from AD is a ready-to-use and commercially-viable solution for hard to decarbonise industrial sectors and will help meet the UK Government’s Net Z
Slide 37: Appendix
3) Infrastructure plc Si Appendix
Slide 38: The dividend has grown every year since IPO
The dividend has grown every year since IPO Special dividends 3iN: Dividend per share Ordinary dividends FY25 dividend target 6.6% p.a.1 4.8%p.a.1 10.2% 6.4% 6.5% 6.6% 6.7% 6.3% (pence per share) 1. Annualised growth rate in ordinary dividends to FY18, and from FY19 to FY25. 38
Slide 39: Portfolio company leverage
Portfolio company leverage No material amounts of debt requiring refinancing in the short-term Conservative approach to gearing: 32% average LTV1 Actively managing debt profile of portfolio Portfolio weighted average cost of companies long-term debt of 4.5% Targeting investment grade senior debt str
Slide 40: Discount rate movement
Discount rate movement Consistent approach to discount rates 3iN Weighted Average Discount Rate1 1 Weighted Average Discount Rate excludes India Infrastructure. 40
Slide 41: Portfolio summary
Portfolio summary 31 March 2024 (£m) Portfolio assets Directors’ Investment in Divestment in Accrued Value Foreign Directors’ Allocated Underlying Portfolio total valuation the year the year income movement exchange valuation foreign portfolio return 31 March 2023 movement translation 31 March excha
Slide 42: Sensitivities to total return
Sensitivities to total return Note: Figures show the impact on portfolio value under these different scenarios. 42
Slide 43: 3i Infrastructure plc
3) Infrastructure plc