Enav S.p.a. · MIL:ENAV
Enav — Investor Day (March 2024)
52 slides from Enav's investor day presentation, Mar 21, 2024
Slide 1: Investor Day: FY 2023 results and New opportunities in non-regulated markets
Investor Day FY 2023 results and New opportunities in non-regulated markets Milan, 21 March 2024
Slide 2: FY 2023 results
FY 2023 results
Slide 3: Full Year 2023 Highlights
Full Year 2023 Highlights • FY2023 en-route traffic volume up 11% vs. FY2022 and above 5.7% of the pre-pandemic level REGULATED • Italian RP4 (2025-2029) Performance Plan will be likely approved by European Commission by the end of December 2024 BUSINESS • Confirmed to be the 4th largest ANSP amongs
Slide 4: Full Year 2023 Results
Full Year 2023 Results En-route traffic 1 Average Minutes Total Revenue Non-Reg. Revenue 10.6m SUs En-route Delay per +11.0% vs. FY 2022 flight2 €1,000.0m €43.1m Terminal traffic +5.9% vs. FY 2022 +7.9% vs. FY 2022 999.2k Sus 1 0.01 vs. 0.04 +10.9% vs. FY 2022 EBITDA Net Financial Debt3 Net Result C
Slide 5: Sustainability Performance in 2023
Sustainability Performance in 2023 ENAV’s Sustainability Plan 2021-2024 The Sustainability Plan, based on 6 main Assets, defines a series of actions, based on the United Nations 17 Sustainable Development Goals (SDGs), on which the ENAV Group will be committed in the period and that pursue the full
Slide 6: FY 2023 Main Traffic Trends – En-route
FY 2023 Main Traffic Trends – En-route Traffic breakdown by service units Quarterly service units trend1 (‘000/%) FY 2023: 10,618,354 1 ➔ +11.0% YoY 3,314 3,477 2,825 2,574 2,424 National 2,384 2,181 17% 1,827 1,893 1,493 1,016 Overflight 556 44% International 39% En-Route 2021 En-Route 2022 En-Rout
Slide 7: FY 2023 Main Traffic Trends – Terminal
FY 2023 Main Traffic Trends – Terminal Traffic breakdown by service units Quarterly service units trend1 (‘000/%) FY 2023: 999.1921 ➔ +10.9% YoY International 303 285 66% 267 Zone 1 247 237 21% 218 212 181 192 Zone 3 156 45% 98 54 National Zone 2 34% 34% Terminal 2021 Terminal 2022 Terminal 2023 1Q
Slide 8: FY 2023 Financial Overview
FY 2023 Financial Overview
Slide 9: Total Revenue Performance
Total Revenue Performance Total Revenue Breakdown Non-Regulated Revenue €m +5.9% 1,000.0 €m 944.3 92.2 +1.8% +7.9% 90.5 43.1 241.0 +9.3% 39.9 220.5 648.2 695.0 +7.2% -14.8 -28.1 FY 2022 FY 2023 FY 2022 FY 2023 Balance En-route Terminal Other 1 FY 2023 total revenue increased 5.9% YoY (+€55.7m) mainl
Slide 10: Cost Evolution
Cost Evolution Total operating costs Focus on personnel cost €m €m +4.1% 700.0 +4.5% 672.1 544.0 568.3 155.7 160.6 +3.1% 156.4 165.1 80.9 94.0 +16.2% 544.0 568.3 +4.5% 306.7 309.1 +0.8% -27.6 -28.9 +5.0% FY 2022 FY 2023 FY 2022 FY 2023 Capitalized internal works Personnel costs Other operating expen
Slide 11: Main Movements below EBITDA
Main Movements below EBITDA Change FY 2023 FY 2022 thousands euro Amount % EBITDA 300,051 272,188 27,863 10.2% EBITDA margin 30.0% 28.8% 1.2 p.p. D&A (net of capex contributions) (117,159) (117,888) 729 -0.6% Provisions and write-downs (10,222) (5,967) (4,255) 71.3% EBIT 172,670 148,333 24,337 16.4%
Slide 12: Cash Flow and Capitalization
Cash Flow and Capitalization ENAV’s liquidity and financial position remains very strong. We have closed FY 2023 with: • Cash and cash equivalents of €225m • Availability of undrawn credit lines of €199m out of which €150m are committed • Net financial position showing a net debt of €322m, compared
Slide 13: Shareholders Remuneration
Shareholders Remuneration Historical Dividend Distribution €m 180 €180m extraordinary 113 dividend paid 106 in August 2015 108 124.5 95 101 59 47 32 36 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 proposal • 2023 dividend proposal: €124.5m to be distributed on the 29th May equivalent to
Slide 14: 2024 Outlook
2024 Outlook
Slide 15: 2024 Outlook
2024 Outlook Confirming Eurocontrol estimates for Italy1, with traffic expected to reach TRAFFIC 11.3 million service units for en-route in 2024 (+6.7% vs 2023) REVENUES Mid-single digit year-on-year increase NON-REGULATED Double digit year-on-year increase REVENUES EBITDA Mid-single digit year-on-y
Slide 16: New opportunities in non-regulated markets
New opportunities in non-regulated markets
Slide 17: ENAV today
ENAV today Sole provider of air traffic control and navigation services in Italy 4th largest ANSP in Europe… …with a solid financial performance thanks to a strong exposure to regulated business 2023A En-route Service Units (‘000) 21,088 Total Revenue EBITDA €1,000.0m €300.1m o/w 96% regulated 30.0%
Slide 18: ENAV tomorrow: strategic framework
ENAV tomorrow: strategic framework A) Core business remains core…but offering moderate growth B) Upside could be exploited in adjacent areas creating value for our shareholders C) Maintaining a solid financial structure and providing strong remuneration 17
Slide 19: A) Core business remains core
A) Core business remains core
Slide 20: A) Core business remains core
A) Core business remains core Industrial fundamentals remain unchanged Regulated business (96% of revenues in 2023) offering strong protection and high predictability RP4 (2025-2029) will be likely approved by the end of December 2024 Full industrial plan will be released once the performance plan w
Slide 21: The regulated business benefits from strong and resilient fundamentals
A) Core business remains core The regulated business benefits from strong and resilient fundamentals World annual RPK 1 (trillion) 20 2019-2040 16 Air traffic has doubled +3.9% CAGR 12 every 15 years Air traffic is expected 1 Secular growth of air traffic 8 to double by 2036 4 0 En-route traffic bre
Slide 22: Supportive European regulation provides long-term visibility
A) Core business remains core Supportive European regulation provides long-term visibility En-route regulation overview Reg. Period RP2 (2015 – 2019) RP3 (2020 – 2024) RP4 (2025 – 2029) Mitigated Mitigated (70% protection (70% protection Traffic Risk between ±2% and ±10%) between ±2% and ±10%) (full
Slide 23: RP4 (2025-2029) will be approved by December 2024
A) Core business remains core RP4 (2025-2029) will be approved by December 2024 1Q’24 Jun-24 Oct-24 EU Commission starts EU Commission State adopts consultations with officially issues Performance Plan, states and service Decision on targets transmitted to EU providers on target for 2025-2029 Commis
Slide 24: B) Upside could be exploited in adjacent areas creating value for our shareholders
B) Upside could be exploited in adjacent areas creating value for our shareholders
Slide 25: B) Upside could be exploited in adjacent areas
B) Upside could be exploited in adjacent areas creating value for our shareholders Scouting new opportunities only if value creation is granted Leveraging on ENAV existing capabilities Targeting control also teaming up with skilled players 24
Slide 26: Non-regulated market clusters
B) Upside could be exploited in adjacent areas creating value for our shareholders The experience of the main peers Non-ATM revs. as % of 4% 87% 53% 27% 7% 14% 17% 4% 3% 0% revenues Air space management Air traffic terminals services Non-regulated market clusters Software dev
Slide 27: Choosing targets: key drivers
B) Upside could be exploited in adjacent areas creating value for our shareholders Choosing targets: key drivers Growth opportunities to be based on 4 main directives Business expansion In line with ENAV Core ESG compliance Growing markets Increasing exposure to Focus on markets in line Target poten
Slide 28: Selected markets to be approached
B) Upside could be exploited in adjacent areas creating value for our shareholders Selected markets to be approached A Core markets – Full potential B Core markets - Development C Optional markets Licences and Avio UTM Training SW services consultancies Airports Technical and engineering Flight insp
Slide 29: Leverage on ENAV current capabilities
B) Upside could be exploited in adjacent areas creating value for our shareholders Leverage on ENAV current capabilities Clients Technology Volume driver Regulation Licences and SW services Avio consultancies Tech. and eng. services UTM Training Flight inspection
Slide 30: Maintain and reinforce ESG compliance
B) Upside could be exploited in adjacent areas creating value for our shareholders Maintain and reinforce ESG compliance ENAV will maintain its leading role in sustainable development and ESG performance, aligning its new business ventures with established ESG principles and making sustainability a
Slide 31: Licences and SW services
B) Upside could be exploited in adjacent areas creating value for our shareholders Licences and SW services Evolve in software house specialised Further consolidate the leadership in ATS solutions globally position in the sector Licences and SW services Strengthen cybersecurity expertise Invest in a
Slide 32: Licences and SW services is a key focus for future development
B) Upside could be exploited in adjacent areas creating value for our shareholders Licences and SW services is a key focus for future development …combining the strategic consolidation of ENAV’s core business with the Ambition to grow in the licences and software services market… development of thir
Slide 33: Avio consultancies
B) Upside could be exploited in adjacent areas creating value for our shareholders Avio consultancies Strong marginality thanks to cost Benefit from first-mover strategy optimisation Avio consultancies Upside from new clusters of Leverage on ENAV expertise in the customers regulated market 32
Slide 34: Technical and engineering services
B) Upside could be exploited in adjacent areas creating value for our shareholders Technical and engineering services Focus on innovation and Strengthening ENAV leadership in the development of new technologies Italian market Technical and engineering services Opportunistic M&A to accelerate Upside
Slide 35: Commercial agreements with Leonardo in the Air Traffic Management
B) Upside could be exploited in adjacent areas creating value for our shareholders Commercial agreements with Leonardo in the Air Traffic Management ▪ ENAV and Leonardo signed a Memorandum of Understanding to operate jointly in the Air Traffic Management (ATM) market in Italy and abroad ▪ The indust
Slide 36: Unmanned Traffic Management - UTM
B) Upside could be exploited in adjacent areas creating value for our shareholders Unmanned Traffic Management - UTM Strategic advantages Develop a new market with significant growth to come Unmanned Traffic Mgmt. (“UTM”) Offer innovative services also thanks Leverage on undisputed expertise in to s
Slide 37: U-Space: a set of services, provided digitally and authorized
B) Upside could be exploited in adjacent areas creating value for our shareholders U-Space: a set of services, provided digitally and authorized within a portion of airspace In Italy, ENAC has authorized D-Flight to perform the role of CISP, but D-Flight can also operate as USSP CISP ATM Designated
Slide 38: In a market niche with attractive fundamentals to entry both at CISP and USSP level
B) Upside could be exploited in adjacent areas creating value for our shareholders In a market niche with attractive fundamentals to entry both at CISP and USSP level Key value drivers Strategic advantages ➢ Regulated tariffs (same rationale as for ENAV ➢ Monopolistic role as per regulation z z ATM
Slide 39: Joint project with Amazon
B) Upside could be exploited in adjacent areas creating value for our shareholders Joint project with Amazon ▪ Opportunity to ▪ Contribution to the develop and test the rapid creation of a U-Space service U-space offering, consistent with its ambition ▪ Privileged access to services required to ▪ Pr
Slide 40: Training
B) Upside could be exploited in adjacent areas creating value for our shareholders Training Development of strategic ENAV Academy as Italian excellence partnerships Training Potential expansion to extra-industry Digital platform for training focused trainings on aviation 39
Slide 41: Flight inspection
B) Upside could be exploited in adjacent areas creating value for our shareholders Flight inspection Footprint in additional geographical Cost structure optimisation areas Flight inspection Development of partnerships with Saturation of current operating other Mediterranean countries capacity of ENA
Slide 42: Meteorology
B) Upside could be exploited in adjacent areas creating value for our shareholders Meteorology AI and machine learning solutions to Platform development and value ENAV meteorological database commercialization of weather data Meteorology Potential export of ENAV Development of strategic meteorologic
Slide 43: Airports
B) Upside could be exploited in adjacent areas creating value for our shareholders Airports Preliminary analysis of the airport Strong sector fundamentals and business supportive regulation Airports Potential partnerships with like- Leverage on affinity with current minded operators ENAV core busine
Slide 44: Italian airport sector is one of the most attractive in Europe
B) Upside could be exploited in adjacent areas creating value for our shareholders Italian airport sector is one of the most attractive in Europe 243 224 165 155 144 Top-5 Aviation Italy is the third largest aviation Markets in EU 1 market in Europe… (#m pax, 2022) #3 Top-5 EU 68 65 countries by # o
Slide 45: Also backed by a strong regulatory regime
B) Upside could be exploited in adjacent areas creating value for our shareholders Also backed by a strong regulatory regime Pure Dual-till RAB-based regulatory system based on cost orientation principle… …with full downside protection Commercial margin Revenues Cost related to related to non no
Slide 46: ENAV targets to reach ~2x non-regulated revenues by 2026
B) Upside could be exploited in adjacent areas creating value for our shareholders ENAV targets to reach ~2x non-regulated revenues through organic growth by 2026 with on top the potential upside driven by M&A A development plan with ambitious targets…. …backed by solid organic growth and potential
Slide 47: C) Maintaining a solid financial structure and providing strong remuneration
C) Maintaining a solid financial structure and providing strong remuneration
Slide 48: C) Maintaining a solid financial structure and providing strong remuneration
C) Maintaining a solid financial structure and providing strong remuneration Financial structure will remain sound, with ND/EBITDA <2x and without impact of new initiatives on debt sustainability New opportunities will be financed raising new debt FCF generation will continue to be totally devoted t
Slide 49: Sound financial structure also following growth initiatives
C) Maintaining a solid financial structure and providing strong remuneration Sound financial structure also following growth initiatives ▪ ENAV will maintain a solid and sustainable financial structure with a target leverage substantially below 2x ➢ ENAV is expected to invest up to € 250m in new pot
Slide 50: Solid shareholder remuneration
C) Maintaining a solid financial structure and providing strong remuneration Solid shareholder remuneration € p.s. 0.18 0.19 0.20 0.21 0.11 0.20 0.23 2024-2029 Dividend policy € million 124.5 Based on “pure” free cash flow 106 To be announced after the approval of RP4 108 113 95 101 (Beginning of 20
Slide 51: Thanks for your attention
THANKS FOR YOUR ATTENTION Q&A SESSION enav.it
Slide 52: Disclaimer
Disclaimer This presentation contains certain forward-looking statements that reflect the Company’s management current views with respect to future events and the financial and operational performance of the Company and its subsidiaries. These forward-looking statements are based on ENAV S.p.A.’s cu