Auckland International Airport Limited · NZX:AIA
Auckland International Airport — Investor Day (2017)
107 slides from Auckland International Airport's investor day presentation, 2017
Slide 1: Auckland Airport 2017 Investor Day
Auckland Airport 2017 Investor Day 2017 Investor day
Slide 2: Introduction
Introduction Sir Henry van der Heyden 2017 Investor day
Slide 3: Agenda
Agenda 8.30am Introduction Sir Henry van der Heyden Chairman 8.35am Overview & strategy Adrian Littlewood Chief Executive Officer 9.00am Driving aeronautical growth Scott Tasker GM – Aero Commercial 9.30am Investing for future growth Steven Crook GM – Airport Development & Delivery (Acting) 10.00am
Slide 4: Overview & strategy
Overview & strategy Adrian Littlewood 2017 Investor day
Slide 5: What we are reaching for
What we are reaching for We want be a great In doing so, we are New Zealand committed to making business recognised journeys better for as a world leader in our customers and creating value from partners modern airports Our vision is to be a great New Zealand business that is a world leader in creat
Slide 6: Auckland Airport at a glance
Auckland Airport at a glance 22km from the CBD or ~25 mins via tunnel 19.3m annual Associates passengers • Queenstown (24.99%) $1.3b investment • Cairns and Mackay (24.55%) property 1,500 hectares of freehold land Diverse parking offering 89 retail stores across Two hotels international and domestic
Slide 7: Strong foundations
Strong foundations Positive exposure Strong network Attractive customer Strong development to growth markets base potential 2/3 rds of the global middle class will be 94% #1 #1 share of long haul arrivals to Highest individual footfall residents of the Asia-Pacific New Zealand of any retail operator
Slide 8: The evolution of our four strategic themes
The evolution of our four strategic themes OUTCOMES WE WILL PURSUE WHAT WE WILL DO Grow travel Invest for future Strengthen our Be fast, and trade growth consumer efficient and markets business effective OUR FOUNDATIONS Safety and Customer Focus on our Operate security, always centred people sustain
Slide 9: Core Faster, Higher Stronger strategic themes
Core Faster, Higher Stronger strategic themes Objective Why it matters Example measures of success1 Primary driver of sustainable value • Passenger/cargo growth Grow travel & for Auckland Airport and New • Route/market performance trade markets Zealand’s travel and trade sectors • Network strength D
Slide 10: Our foundations
Our foundations Objective Why it matters Example measures of success1 Safety and Ensure our people, contractors and • Safety outcomes partners can get home safely every security, always day People Our people are able and motivated to • Employee engagement focus do their best • Workforce composition
Slide 11: Delivering on our Faster, Higher Stronger ambitions
Delivering on our Faster, Higher Stronger ambitions Aspirations set in early 2013 June 2013 June 2017 400,000 213,781 356,315 A decrease of 2,955 Double Chinese arrivals to 400,000 by FY17 (0.8%) in FY17 $60m Build property rent roll to $60 million by FY17 $44m $72.9m An increase of $9.9 million
Slide 12: Our track record
Our track record Objective Example outcomes Setting high safety standard for wide number of PCBU on airport Safety and Staff health and safety engagement increased to 68% in FY17 security Employee recordable injuries down 22% in FY17 Contractor lost time injury frequency rate down 81% in FY1
Slide 13: Proven passenger and earnings growth over the last five years
Proven passenger and earnings growth over the last five years Since FY13, passengers increased at a CAGR of 7.0% and the number of Underlying profit has grown at an average rate of 12.7% driven by greater airlines using Auckland Airport is up 12% p.a. passengers and operational efficiencies Internat
Slide 14: Putting recent growth in context
Putting recent growth in context; growth has been remarkably resilient over 50 years 50 year passenger growth trend Work begins on: 10.0 New domestic jet facility Arrivals expansion 9.0 Second runway New International international terminal Pier B opens 8.0 terminal opened expansion 7.0 Refurbished
Slide 15: Setting up for the next 50 years
Setting up for the next 50 years Investment today… …enables tomorrow’s growth 30 year master plan Principled airport development Enables 30+ years of growth supported Planning addressing legacy issues by efficient and timely development Development consents in place Lowers future marginal cost of As
Slide 16: Focus for FY18 and key themes for today
Focus for FY18 and key themes for today Themes for today Grow travel & trade markets • Grow, sustain, diversify capacity and market mix • Continue pursuing multiple route development opportunities and drive off-peak demand Invest for future growth • Deliver on our capital plan by adding leading syst
Slide 17: Driving aeronautical growth
Driving aeronautical growth Scott Tasker 2017 Investor day
Slide 18: Aeronautical business
Aeronautical business 55% 65 30 The busiest airport in New International 46 international destinations and International airlines and Zealand passengers 19 domestic destinations 5 domestic airlines Market fundamentals Located in the high growth Asia- New Zealand remains 3,635 metres of runway, plus
Slide 19: Significant increase in connectivity over the last two years
Significant increase in connectivity over the last two years Network 11 18 +20% FY15-17 New Routes New Destinations Capacity Added Tianjin Chongqing Beijing Haneda San Francisco Chengdu Osaka Los Angeles Dubai Shanghai Shenzhen Houston Doha Hong Kong Manila Ho Chi Minh City Rarotonga Buenos Aires Do
Slide 20: Growth driven by a supportive macro environment
Growth driven by a supportive macro environment Singapore jet fuel (USD) 200 150 100 50 0 New Zealand is underserved Aircraft technology is making more Jet fuel remains ~30% lower than long haul routes to New Zealand three years ago1 viable and more profitable 2015 2035 118.4 million Active Consider
Slide 21: Structural change in airline economics enabling supply by next generation aircraft
Structural change in airline economics is enabling supply Step change in economics to serve New Zealand from next generation Proportion of next generation aircraft still aircraft remains relatively low 100% Auckland Airport seat capacity served 80% by next generation aircraft Current Twins 60% Next
Slide 22: With the appropriate investment New Zealand tourism can continue to grow
With the appropriate investment New Zealand tourism can continue to grow sustainably New Zealand tourism density is low compared with The New Zealand government is investing in tourism infrastructure peer group countries and hotel capacity constraints are forecast to ease Visitation per capita New g
Slide 23: Active approach to developing tourism markets
Active approach to developing tourism markets Strategy Outcome Auckland’s airline network has the Airline capacity right capacity to the right destinations to serve demand Diversify markets Consumers and Source channels in target Grow capacity markets have markets desire and ability to and passenger
Slide 24: Demand for travel to New Zealand remains high
Demand for travel to New Zealand remains high Hong Kong China Japan Canada 15% 36% 26% 33% Germany 42% 37% 48% 33% UK S.Korea USA 24% Taiwan 32% 42% Philippines 38% India Brazil 35% 24% Chile 38% New Zealand = underserved demand Domestic for travel to New Zealand 29% 39% 25% Argentina Singapore Indo
Slide 25: China direct flights have increased NZ's competitiveness as a destination
China direct flights have increased NZ’s competitiveness as a destination and opened up SE Asia routes Modelled passenger flows in IATA Northern Summer 2015 2017 North Asia 7% 10% Seats on SE Asia routes opened China direct services have up to other passenger flows as Non Stop enhanced New Zealand’s
Slide 26: Chinese market is evolving quickly
Chinese market is evolving quickly Chinese passenger mix has changed significantly towards We remain confident in future Chinese passenger growth higher value independent travellers 400,000 +350m Rolling 12 month Chinese visitor visa Shopping as a reason for vising 350,000 other countries 300,000 Ad
Slide 27: Driving passenger demand from the China market
Driving passenger demand from the China market Market Gap Supporting and Opportunities Partnering with Airlines 2017 Investor day 27
Slide 28: Direct Middle East flights transformed European visitation
Direct Middle East flights transformed European visitation Modelled passenger flows in IATA Northern Summer 2015 2017 North Asia 3% 9% Middle East direct flights China create a one stop 3% 7% connection to 40 European North America cities, increasing Middle East (via AUS) SE Asia 20% 18% connectivit
Slide 29: India is underserved, traffic flows through multiple hubs
India is underserved, traffic flows through multiple hubs similar to China flows before direct flights to New Zealand Modelled passenger flows in IATA Northern Summer 2015 2017 China 7% 6% Due to the absence of direct India – New Zealand flights all North Asia passengers must take 7% 11% Middle East
Slide 30: 13.7 million Indians are actively considering travel to New Zealand
13.7 million Indians are actively considering travel to New Zealand …and New Zealand is capturing an Indian outbound departures are increasing share, but still only represents Indian visitors often travel in the off peak growing rapidly… 0.3% of total outbound departures1 season in New Zealand3 2013
Slide 31: Route development is focused on multiple opportunities for growth
Route development is focused on multiple opportunities for growth India direct China direct capacity capacity Year-round US carriers Middle East Incremental carriers growth Asia Choice for domestic travellers Competition and choice Hub carrier scale 2017 Investor day 31
Slide 32: Market development is focused on driving off peak passenger demand
Market development is focused on driving off peak passenger demand Australian market Australian winter United States Auckland as a short break market Driving demand across the year destination North Island as a winter holiday destination China SE & North Asia, UK/EU, Argentina Winter visitation, dig
Slide 33: Driving aeronautical growth summary
Driving aeronautical growth summary Grow travel & trade markets • New Zealand is underserved • Macro environment is supportive of continued growth • Strategy to grow, sustain, diversify capacity and market mix • Market development work is focused on driving off-peak demand and future growth markets
Slide 34: Market development activity is extensive
Market development activity is extensive Online link to video: https://vimeo.com/231978222/b99f7de826 2017 Investor day 34
Slide 35: Investing for future growth
Investing for future growth Steven Crook 2017 Investor day
Slide 36: Substantial growth and asset renewal driving capital investment
Substantial growth and asset renewal driving capital investment As growth has Regulated Capex & Pax Volumes FY8-FY22 accelerated, capital 700 25 spend has been brought forward to meet demand 600 20 We invested 80% more capex than planned in 500 PSE2 15 400 Pax (m) Capex ($m) 300 10 200 5 100 0 - FY7
Slide 37: Fundamental change in masterplan led to significant planning demands
Fundamental change in masterplan after airline feedback led to significant planning demands, but development continued in parallel 2012 2013 2014 2015 2016 2017 Primary NTF Masterplan updated Airport Development Plan Terminal Development Plan planning Masterplan reset Consolidated land use plan Aero
Slide 38: Considerable expertise put in place
Considerable expertise put in place Step change in the airport’s delivery capability That have worked on some of the worlds leading infrastructure projects 2013 2017 Industry leadership on the delivery team 4 11 Heathrow T5 Melbourne Airport Hamad Airport Qatar Expansion Airport delivery team size 1
Slide 39: Supported by key partnerships
Supported by key partnerships Examples Delivery specialists / partners Supported by key partners and a Execution highly experienced specialists Board Key relationships 2017 Investor day 39
Slide 40: Adding leading systems, tools and technology to enhance long term capability
Adding leading systems, tools and technology to enhance long term capability Opportunities • 3D project models integrate with schedule and cost to drive efficient and effective collaborative planning • Stakeholder VR visualisation of the 5 dimensional BIM built environment during design reduces rewo
Slide 41: An illustration of our project tool: efficiency through BIM
An illustration of our project tool: efficiency through BIM 2017 Investor day 41
Slide 42: Our investment in capability is delivering results
Our investment in capability is delivering results 100% Investment against plan1 100% Completed against plan1 97% Incepted against plan1 >40 Projects over $1m delivered 1/5 Construction accident 50,000 sqm of new or completely since 2015 frequency rate refurbished terminal space2 to maintain, enhanc
Slide 43: Our programme over the next five years
Our programme over the next five years 2017 Investor day 43
Slide 44: Phase 3 – International departures expansion
Phase 3 – International departures expansion Key benefits: • ~35,000 sqm of new and New farewell refurbished floor space area • Doubled capacity for departure processing including customs Void clearance and security infill New truck dock & screening emigration • New decompression area Refurbished ai
Slide 45: New Domestic Jet Terminal
New Domestic Jet Terminal Key benefits: • Integrated terminal allowing direct access between domestic and international travel • Step change increase in passenger processing capability • Common landside functions • Swing operations on the airfield • New airline lounge facilities • Enhanced transport
Slide 46: Northern Runway
Northern Runway Key benefits: • A step change in runway capacity • Enhanced resilience to the airport runway system Timing: • Around 2028 based on forecast demand Next steps: • Notice of requirement process underway • Working with stakeholders to maximise the efficiency of the existing runway • Unde
Slide 47: Transport
Transport Transport Nth Park & Ride Key benefits: Key benefits: Nixon Rd Bypass • Improving land transport is a key • priority Improving land transport for Auckland Airportis a key Altitude Drive priority for Auckland Airport Tom Pearce HOV • Requires a multi-mode solution GBMD HOV • Requires a mult
Slide 48: Investing for future growth summary
Investing for future growth summary Investing for future growth • Our careful planning has provided a robust platform for focused expansion • We have built an enviable team with a wealth of experience in efficient delivery • We have built solid partnerships with key stakeholders and suppliers • We a
Slide 49: Q&A
Q&A 2017 Investor day
Slide 50: Enhancing the retail experience
Enhancing the retail experience Richard Barker 2017 Investor day
Slide 51: Auckland Airport's retail business
Auckland Airport’s retail business Retail income Other, 13% PSR x PAX = Sales Sales x Yield = Concession income Retail income is largely driven by Retail income is the greater of the the international minimum annual guaranteed rent by terminal retailer and the concession income ITB, 87% 65 24 11k $5
Slide 52: What is unique about our retail business
What is unique about our retail business #1 >$10b 2x Highest individual footfall Size of domestic retail Retail sales growth p.a. vs of any retail operator in New markets we compete in equivalent high street and Zealand shopping mall competitors in greater Auckland Source: Marketview NZ spend data o
Slide 53: Retail income has grown at a CAGR of 5.7% since FY08
Retail income has grown at a CAGR of 5.7% since FY08 Retail income growth driven by: passenger growth, strong Retail income per passenger has trended up over the last ten leasing program, new space and continuous upgrade of offer years, but at a slower rate. Our challenge is to accelerate this 2011
Slide 54: Retail performance compares well to industry benchmarks
Retail performance compares well to industry benchmarks Retail productivity fares well compared with Income per international passenger is on par Terminal retail sales are growing faster Sydney, consistent with temporary limited with Melbourne, which has similar than the wider Auckland retail market
Slide 55: Retail and parking strategy is focused on three horizons
Retail and parking strategy is focused on three horizons To provide a solid foundation for growth and remain relevant to our customers we are focused on achieving the following objectives: 1 2 3 Leverage physical travel 3 Extending reach and Strengthen the relationship retail model improving conveni
Slide 56: New way of segmenting our customers is driving force behind Strata Club
New way of segmenting our customers is driving force behind Strata Club Traditionally we measured retail performance by passenger …however we can now also add a customer lens to our market aligned to passenger growth by route/region… approach International Duty Free PSR by country of residence Avera
Slide 57: Multi-Retailer Mall will leverage strong growth in e-commerce
Multi-Retailer Mall will leverage strong growth in e-commerce Digital and web influenced sales are growing rapidly in the We are investing in our business to enhance the online Asia-Pacific market and at Auckland Airport shopping experience Digital vs Web-influenced sales as a % of total retail sale
Slide 58: An improved connected cross-channel customer experience
An improved connected cross-channel customer experience A typical illustrative journey showing how we aim to extend customer touchpoints beyond the physical interaction with the airport Visit Auckland Book parking App push with offers Pick up order at Pick up order at Airport parking online Click &
Slide 59: International departures expansion first stages delivered
International departures expansion first stages delivered Doubled emigration area New lounge and duty free 2017 Investor day 59
Slide 60: International departures upgrade phasing
International departures upgrade phasing Proposed phasing: Expanded Duty Free and Q2 FY18 Western precinct Q3 FY18 Remaining Destination offer Q4 FY18 Standalone store Q1 FY19 Specialty & Luxury High Street Additional retail storage H1 FY19 Food & Beverage area to facilitate new click and collect mo
Slide 61: New and exclusive brands with more to come
New and exclusive brands with more to come Delivered by Partridge Jewellers First NZ airport store First standalone NZ store First standalone NZ store First NZ airport store First NZ airport store First NZ airport store First standalone NZ store 2017 Investor day 61
Slide 62: Best of New Zealand and the world
Best of New Zealand and the world • The increase in international airside dwell area and footprint will help showcase fantastic new concepts • Includes upgrades to a number of concepts operated by existing retailers providing passengers with a much improved retail experience • Right: A render of our
Slide 63: Parking growth driven by passengers and new products
Parking growth driven by passengers and new products diversifying +8% +101 +22 % % Car parking the product income has mix been driven passenger by a number growth Parking income Valet income Park & Ride FY17 growth (2 year CAGR) (2 year CAGR) of key factors investment including: in space Parking inc
Slide 64: Positioning our parking business for the future
Positioning our parking business for the future +3,000 Net additional carparks brought on board between New parking products are in the pipeline FY18 and FY20, subject to demand Assessing service-based offerings to Primarily around the International terminal in advance complement our car grooming of
Slide 65: What are we delivering
What are we delivering Additional Strata Club First phase of New exclusive Upgraded Food Additional parking International brands & Beverage Close, covered, airside level 1 connected redevelopment parking New parking Strata Lounge Expanded New and MRM + Click products duty free improved Store & Colle
Slide 66: Enhancing the retail experience summary
Enhancing the retail experience summary Investing for future growth • Adapting to market conditions and providing consumer choice Strengthen our consumer business • Executing on our vision of delivering the Best of NZ and the World • Exclusive brands with flagship store concepts and compelling desig
Slide 67: Digital innovation
Digital innovation Jason Delamore 2017 Investor day
Slide 68: Delivering better customer service, efficiency and value
Delivering better customer service, efficiency and value Where we have come from? To where are we going to? Outcomes to date Known and engaged Unknown customers, 285k known customers, up customers in a multi transactional activity 65% year on year channel environment Total airport 44% more passenger
Slide 69: Customer platform that will drive insights
Customer platform that will drive insights Opportunities Journey mapping • Real time customer feedback enabling enhanced passenger experience • Personalised, timely and relevant E-commerce messages based on real history and behaviour • Extending customer engagement to before Mobile applications and
Slide 70: Operations platform that will drive efficiency
Operations platform that will drive efficiency Opportunities • Real time operations data (CX, PAX, plane, ground transport) feeding real time decision making Customer feedback • Detect and address issues before they arise, or before they escalate • Streamline data and processes to CCTV optimise reso
Slide 71: Achieving the vision of Total Airport Management
Achieving the vision of Total Airport Management to drive productivity and efficiency of the airport system Land Landside exit Transport Check-in Baggage Land Lounge / Baggage Claim Transport Landside Gate Handling access Boarding De-boarding Bio security Security Immigration Utilising data and coll
Slide 72: Digital innovation summary
Digital innovation summary Investing for future growth • Setting up scalable pan-organisation technology platforms • Utilising operational tools to optimise capital investment Be fast, efficient and effective • Greater and more effective customer engagement – Strata, Omni, AI • Developing the multi-
Slide 73: Investment property
Investment property Mark Thomson 2017 Investor day
Slide 74: Auckland Airport's investment property
Auckland Airport’s investment property $1.3b 341,189m2 $72.9m Portfolio Value - up 82% Net Lettable Area – up Rent Roll – up 65% since June 20131 55% since 2013 since June 2013 1) Includes both Investment Property and all rent generating Plant, Property and Equipment 2017 Investor day 74
Slide 75: Investment property highlights
Investment property highlights Accelerated development Stabilised asset base is Uniquely positioned for strategy has underpinned performing strongly growth growth • Portfolio value $1.3b – up • Record rentals achieved in • 21 new income producing from $727m in June 2013 new projects translating into
Slide 76: How did we perform against our Faster Higher Stronger aspirations?
How did we perform against our Faster Higher Stronger aspirations? FHS vs Recalibrated Targets Millions $110 New aspirational $100 goal of $100m $7m of hotel rent roll by FY20 EBIT included $90 $80 Rent roll ($m) $70 Project at Same Run Rate $60 Original aspirational $50 goal of $60m rent roll by FY
Slide 77: Strategy for the future
Strategy for the future $100m Grow Rent Roll to $100m by FY2020 Grow hotel capacity to 900 rooms by 2020 Position Auckland Airport as New Zealand’s Transform our trade and cargo precinct and best business location grow trade volumes to and from New Zealand 2017 Investor day 77
Slide 78: Auckland industrial market
Auckland industrial market Auckland Airport has one of the largest reserves of development- Grade A Auckland industrial vacancy ready land in the Auckland region 3.00% 2,500,000 2.50% Precinct Sizes (sqm) Auckland Industrial 2,000,000 2.00% 1,500,000 1.50% 1,000,000 1.00% 500,000 0.50% - 0.00% Auckl
Slide 79: Portfolio snapshot
Portfolio snapshot FY17 Revenue by category Change in revenue by category FY17 Revenue by precinct Other, 3% The Common, 3% Retail, 5% Category Change vs FY15 Altitude, 4% Commercial, 7% Industrial 1% The Terminal, 9% Ground Lease 3% Office, 8% Hotel 6% The Quad, 11% The Landing, 35% Hotel, 10% Indu
Slide 80: Recent developments
Recent developments Hellmann 15 Maurice Coca Worldwide Wilson Cola Ave Fonterra Agility Amatil Rohlig Logistics (Spec Quad Fuji Logistics Build) (NZ)7Ltd Xerox Logistics 2017 Investor day 80
Slide 81: Projects underway
Projects underway Ministry of Primary Industries Ministry of Primary Industries Bunnings Distribution Centre Airways Corporation 2017 Investor day 81
Slide 82: Investing in future development capacity
Investing in future development capacity Aligning development capacity with demand • Civil works for Phase 3B at The Landing now complete, adding 14ha of developable land • Immediate capacity to accommodate ~100,000sqm of new projects 2017 Investor day 82
Slide 83: How do we compare?
How do we compare? Company Portfolio Value ($) WALT Occupancy Kiwi Property 2,969,000,000 5.6 98.80% Goodman 2,400,000,000 5.8 98.00% Precinct Properties 2,040,000,000 8.7 100.00% Augusta Capital 1,700,000,000 5.3 98.00% Argosy 1,440,000,000 5.59 98.60% Auckland Airport 1,321,000,000 6.51 96.90% Pro
Slide 84: Transitioning to an integrated airport community
Transitioning to an integrated airport community 2017 Investor day 84
Slide 85: Auckland Airport 2020: The Landing and Quad
Bypass Altitude Drive Terminal Roads The Landing Business Park The Quad Office Campus • New Zealand’s leading mixed use business park • Airport Town Centre • Developable Land Area: >100 Ha • Retail and Recreational Facilities • Highest Standard of Design and Excellence • Premier Office Accommodation
Slide 86: Auckland Airport 2020: Central Connector and Gateway Bridge
Central Connector The Central Connector is a walking cycling route that connects our airport terminals with amenities for passengers and tenants Gateway Bridge A new bridge for pedestrians and cyclists over George Bolt Memorial Drive. This will better connect our airport terminals with amenities for
Slide 87: Auckland Airport 2020: Public Spaces
Public Spaces Parks, walking and running trials, mountain biking tracks, and sports fields provide amenity to both staff and our visitors. Auckland Airport 2020 2017 Investor day 87
Slide 88: Auckland Airport 2020: Hotels
Ibis Hotel Future Hotel Sites New 5-Star Pullman Hotel Novotel Hotel Together with Tainui Group Holdings we are developing a new 5-star, Pullman hotel. This new 300-room hotel will be operated by Accor Hotels and located close to our international terminal. Auckland Airport 2020 2017 Investor day 88
Slide 89: Auckland Airport 2020: Cargo Central
Cargo Central Long Term Asset Management Planning • Optimising Land Use • Facilitating Cargo/Trade • Land Transport Infrastructure Auckland Airport 2020 2017 Investor day 89
Slide 90: Hotel market
Hotel market Auckland Airport hotel portfolio AIA’s Novotel compared to the Auckland 5-star hotel market $250 $250 Revenue per available room Revenue per available room $200 $200 $150 $150 $100 $100 $50 $50 $0 $0 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16 Jul 16 Jan 17 Jul 17 2013 2014 2015 20
Slide 91: Hotel
Hotel 3 Pullman Hotel 300 Rooms In 50/50 partnership with Tainui Group Holdings Expected construction start date Q4 2018 Expected opening 2020 Rooftop restaurant and bar 2017 Investor day 91
Slide 92: Trade
Trade Auckland Airport is New Zealand’s third largest Cargo Port (by value), handling >200,000 tonnes of cargo annually1 Transformational project underway to position Auckland Airport as a world class gateway for the movement of goods to, from and through New Zealand Emphasis on growing trade for th
Slide 93: Investment property summary
Investment property summary Investing for the future • Position Auckland Airport as New Zealand’s best business location • Accelerate development momentum • Increase hotel capacity • Transform cargo activities and grow trade volumes to, from, and through Auckland Airport 2017 Investor day 93
Slide 94: Financial management & regulation
Financial management & regulation Philip Neutze 2017 Investor day
Slide 95: Key investment highlights
Key investment highlights High quality New Zealand’s Maturing regulatory Exposure to growth Track record of asset with gateway environment markets delivery strong long term growth 2017 Investor day 95
Slide 96: A unique business model
A unique business model Steady margin business Targeting operating leverage Broad business mix ~35% 76.0% EBITDAFI margin 75.5% 75.0% 74.5% 74.0% 73.5% variable costs 73.0% 2013 2014 2015 2016 2017 Even balance between regulated Considerable financial strength Own our assets and non-regulated activi
Slide 97: What has changed?
What has changed? In 2012 the next decade looked like this… Five years on, it now looks like this… 70% increase in 10 80% increase in year forecast pax growth FY22 RAB estimate vs PSE2 estimate 25 2.5 25 2.5 20 2.0 20 2.0 Regulated asset base, billions Regulated asset base, billions Passengers, mill
Slide 98: Pricing completed, now focusing on delivery
Pricing completed, now focusing on delivery Comprehensive consultation delivered reasonable Now focused on delivery aeronautical prices for PSE3 (FY18-22) Aeronautical prices in place for the five year period to 30 June 2022 Average annual change in real revenue per PAX International Domestic Custom
Slide 99: How we fund the capital plan
How we fund the capital plan Efficiently fund infrastructure while delivering fair returns for shareholders Dividends Passengers & Planes Commercial Earnings Cashflow Investors Dividend Non-cash reinvestment depreciation plan Aeronautical Commercial Funding New debt Capital management levers Lenders
Slide 100: Our borrowing programme
Our borrowing programme Funding diversified across three Core funding from shorter dated Well diversified maturity profile core markets bank borrowings, medium term creates considerable flexibility for NZDCM issuance and long-term the term of debt issues offshore issues Auckland Airport debt composi
Slide 101: Committed to maintaining our A- credit rating
Committed to maintaining our A- credit rating Headroom in key credit metrics Capital investment will soften credit metrics 6.0 25.0% Increasing capital 5.0 20.0% investment will lessen credit 4.0 metric headroom $454m capital 15.0% return 3.0 10.0% 2.0 Utilise capital management 5.0% 1.0 levers wher
Slide 102: Committed to operating efficiently and effectively
Committed to operating efficiently and effectively Successfully increased operating Focus on efficiency will deliver better Our philosophy is to: efficiency outcomes Real aeronautical operating costs per PAX (2017$) $30 75.5% Provide quality $6.40 1 services $25 $6.20 75.0% $6.00 $20 $5.80 maximise
Slide 103: Financial management summary
Financial management summary Investing for the future • Capital management strategy delivering infrastructure funding flexibility and efficiency Innovation driving improved customer experience and efficiency • Managing growth with a disciplined focus on efficiency and operating leverage 2017 Investo
Slide 104: Wrap up
Wrap up Adrian Littlewood 2017 Investor day
Slide 105: Summary
Summary 2017 Investor day 105
Slide 106: Q&A
Q&A 2017 Investor day
Slide 107: Important notice
Important notice Disclaimer This presentation is given on behalf of Auckland International Airport Limited. Information in this presentation: • is provided for general information purposes only, and is not an offer or invitation for subscription, purchase, or recommendation of securities in Auckland