Grupo Aeroportuario Del Centro Norte Sab De Cv Class B · BMV:OMA/B
Grupo Aeroportuario Del Centro Norte Sab De Cv Class B — Central North Airport Group — Q1 2018 Earnings Presentation
47 slides from Grupo Aeroportuario Del Centro Norte Sab De Cv Class B's earnings presentation, Apr 18, 2018
Slide 1: OMA announces First Quarter 2018 Operational and Financial Results
OMA announces First Quarter 2018 Operational and Financial Results Monterrey, Mexico, April 17, 2018 — Mexican airport operator Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., known as OMA (NASDAQ: OMAB; BMV: OMA), today reported its unaudited, consolidated results for the first quarter of 201
Slide 2: Footnote on references and exchange rates
1 Unless otherwise stated, all references are to the first quarter of 2018 (1Q18), and all percentage changes are with respect to the same period of the prior year. The exchange rates used to convert foreign currency amounts were Ps. 18.3445 as of March 31, 2018, 19.7354 as of December 31, 2017, and
Slide 3: Investor and media relations contacts
Chief Financial Officer Ruff Pérez Phego +452 (81) 8525 4300 sperezpliego@oma aero Investor Relations: Emmanuel Camacho $52 (Bs) 8625 4308 ‘scamacho@oma. 2200 {nthe US: Daniel Wilson /Zemi Communications +1 (212) 683 9560 ‘SbmyailzonG@zemi.com Media Relations: Paola Femindez +52 (82) 8625 4300 _sfeg
Slide 4: The principal results of the first quarter include
The principal results of the first quarter include: § Total terminal passenger traffic increased 8.0% to 4.9 million passengers. Domestic traffic increased 8.4% and international traffic increased 5.8%. The Monterrey and Culiacán airports contributed the most to passenger growth. § Aeronautical reve
Slide 5: OMA
OMA
Slide 6: Total passenger traffic increased 8.0%
Total passenger traffic increased 8.0% (+363,293 passengers). Of total passenger traffic, 84.9% was domestic and 15.1% was international. Commercial aviation accounted for 98.9% of passenger traffic. Monterrey generated 46.5% of passenger traffic, Culiacán 11.2%, and Chihuahua 6.9%. Domestic passeng
Slide 7: Ciudad Juárez and international traffic
§ Ciudad Juárez (+13.4%; +34,866) from increased traffic on the Guadalajara, Cancún, and Monterrey routes. International passenger traffic increased 5.8%, and ten airports recorded increases in international traffic. Monterrey (+8.7%; +24,454 passengers) had the largest increase, principally as a re
Slide 8: Commercial Operations
Commercial Operations OMA implements our commercial strategy through continuous improvement in the services offerings in our airports. This strategy resulted in the opening of 10 commercial initiatives in 1Q18, including car rental, hotel promotion, advertising, and banking services. The occupancy r
Slide 9: Commercial initiatives implemented
ives Implemented Type Culiacén and San Luis P Monterrey and Zacat 2 Monterrey Advertising a Durango Banking services
Slide 10: Hotel Services
Hotel Services § The NH Collection Terminal 2 Hotel had an 85.7% occupancy rate, compared to 84.3% in 1Q17. The average room rate was Ps. 2,342 per night. Revenues increased 0.5% to Ps. 65 million. § The Hilton Garden Inn had a 78.5% occupancy rate, up 2.5 percentage points compared to 1Q17, with an
Slide 11: Non-aeronautical revenues increased 11.3%
Non-aeronautical revenues increased 11.3% to Ps. 376 million and represented 23.8% of the sum of aeronautical and non-aeronautical revenues. The increase reflected principally the expansion of commercial activities.
Slide 12: Non-aeronautical revenues per passenger
Non-aeronautical revenues per passenger increased 3.0% to Ps. 76.7. Non-aeronautical revenues per passenger, excluding diversification activities, increased 6.2% to Ps. 48.6.
Slide 13: Commercial Activities
Commercial Activities: Parking 45977 51337137 Advertising 201 12766 (527) Retail? 23,358 28455 28 Restaurants 28,693 26500 48 Car Rentals 38,279 29077594 Passenger Services 694 sro (a7 8) Time Shares & Hotel Promotion 3.072 3780 230 Communications and Networks 2,669 3637363 VIP Lounges 4232 764 739
Slide 14: Commercial activities contributed an incremental increase
Commercial activities contributed an incremental Ps. 21 million (+13.8%). The line items with the largest increases were: § Car rental (+59.1%; +Ps. 11 million), as a result of 21 new rental locations since 3Q17 and better contractual terms starting in 1Q18. § Restaurants (+41.8%; Ps. +8 million), a
Slide 15: Construction revenues and costs
Construction revenues , which represent the value of improvements to concessioned assets, were Ps. 352 million (+32.2%) during the quarter. They are equal to construction costs and generate neither a gain nor a loss. Construction revenues and costs are a function of the advance in execution of proje
Slide 16: OMA
OMA
Slide 17: Major maintenance provision and operating costs
The major maintenance provision decreased 6.8% to Ps. 46 million. The balance of the maintenance provision as of March 31, 2018 was Ps. 885 million, compared to Ps. 858 million at the end of 2017. The airport concession tax increased 15.8% as a result of the growth in revenues. The technical assista
Slide 18: Costs and operating expenses table
Cost of Services 236,790 238,944 09 ‘Administrative Expenses (GA) 145226 154,997 67 Subtotal (Cost of Services + G&A) 382,006 393,942 3a Major Maintenance Provision 49226 45,862 68) Construction Cost 266309 352,055 322 Concession Taxes 6868 73972 a58 Technical Assistance Fee 3257. 39,452 aaa Depreci
Slide 19: Adjusted EBITDA and Operating Income
Adjusted EBITDA and Operating Income Adjusted EBITDA increased 23.1% to Ps. 1,072 million, as a result of OMA’s continuing initiatives to increase revenues and control costs and expenses. The Adjusted EBITDA margin was 67.9%, the highest quarterly margin in OMA’s history. (See Notes to the Financial
Slide 20: Financing Expense
Financing Expense Financing Expense decreased 37.1% to Ps. 91 million, principally because of a smaller exchange loss.
Slide 21: Taxes
Taxes Taxes were Ps. 244 million. The effective tax rate was 28.5%.
Slide 22: Net Income
Net Income Consolidated net income increased 44.0% to Ps. 610 million. Earnings per share , based on net income of the controlling interest, increased 44.7% to Ps. 1.55; earnings per ADS increased 50.6% to US$0.67. Each ADS represents eight Series B shares.
Slide 23: MDP and Strategic Investments
MDP and Strategic Investments Total capital expenditures and major maintenance included in the MDP and strategic investments 3 were Ps. 423 million and included Ps. 352 million in improvements to concessioned assets, Ps. 25 million for major maintenance, and Ps. 46 million for strategic investments.
Slide 24: The most important projects in 1Q18
The most important projects in 1Q18 were:
Slide 25: Debt
Debt As of March 31, 2018, total debt was Ps. 4,612 million and net debt was Ps. 1,946 million. The ratio of net debt to Adjusted EBITDA was 0.48 times. Of total debt, 97% was denominated in Mexican pesos, and 3% in U.S. dollars.
Slide 26: Debt table
Total Shor-Term Debt é Long-Term Debt s10-yt Bond, Ps.3,g00mm: OMAs3 2023 eur 14500000 2,500,000 3,500,000 Finance CAPEX and Refinance Debt Bullet "75 Bond, Ps. 3.000 mm: OMAay 2025 ae "Jo00,e00 3,500,000" 3,000,000, Finance CAPEX and Refinance Debt Bullet “eyyr Term Loan - Private Export Funding Co
Slide 27: Derivative Financial Instruments and Cash Flow Statement
Derivative Financial Instruments As of the date of this report, OMA has no derivatives exposure. Cash Flow Statement For the first three months of 2018, operating activities generated cash of Ps. 843 million, a 25.8% increase compared to the same period of 2017. The increase resulted principally fro
Slide 28: Cash flow table
‘As of March 33, (®s. Thousands) 2037 2028 Income Before Taxes 605,492 853,793 Items net affecting Operating Activities, net 267,524 30275 Changes in operational assets and liabilities, net (202,874), (726) 37 Net Flow from Operating Activities 670,142 843,352 258 Net Flow from Investing Activities
Slide 29: Earnings call and material subsequent events
OMA (NASDAQ: OMAB; BMV: OMA) will hold its 1Q18 earnings conference call on Thursday, April 19, 2018 at 10 am Eastern time, 9 am Mexico City time. The conference call is accessible by calling 1-800-239-9838 toll-free from the U.S. or 1-323-794-2551 from outside the U.S. The conference ID is 6016697
Slide 30: Annex Table
Annex Table 1
Slide 31: Passenger traffic by airport
(TerminalPassengers- Excludes Trans Passenges) Total Passengers 0x7 20:8 9% Var Acapulco 32,609 208602 20 Ciudad uses 22729542 as Culiscen weg 47.203 74 Chihushus pase BSS 3 Durenge sasz sou 39 Mazetlén sezmg 338507 as Monterey 2op6a7o 2.278.483 87 Reynose 235298 34604 cr) Sen Luis Potosi m5 a7 36 T
Slide 32: Annex Table
Annex Table 2
Slide 33: Consolidated statement of financial position
rio del Centro Norte, ited Consolidated (Thousands of Pesos) March32, December 3a, March33, 9% Var 9% Var 27 ony 2e18__Mara8/Maray_Mara8/Deca7 Assets Current Assets Cash and Cash Equivalents BaTn276 2333007 2.665650, 63) 243 Other Investments Held to Maturity 49.389 20,248 na ‘Trade Accounts Receiva
Slide 34: Annex Table
Annex Table 3
Slide 35: Consolidated income statement
(Thouzands of Pesos) 2037 208 séVar Revenues ‘Aeronautical Revenues soteag@ 203982 287 Non. Aeronautical Revenues aa7826 yeaa aaa ‘Aeronautical Revenues « Non-Aeronautical Revenues aasag 4,579,882 16.8 ‘Senstrustion Revenues 286309._.....35205 222 Total Revenues 4618621497936 19.4 Operating Costs Co
Slide 36: Annex Table
Annex Table 4
Slide 37: Consolidated cash flow statement
(Thousands of Pesos) As of March, 2007 218 saver. Operating Activities Income Before Taxes eos.493, 83792, 20, CChange'n the vais of cash and cath quivaenteforfarvaie 99,007 sgeg22 na Depreciation ang Amonization nea pes 337 MajorMaintanance Provaion 49236 45862 3) Doubtful Accounts Provision (aaa)
Slide 38: Annex Table
Annex Table 5
Slide 39: Changes in stockholders' equity
Additional Share Non. Total Number of Capitalstock Paid-in Retained Repurchase Labor Controlling Stockholder's Shares ___Nominal___Capital_Earnings Reserve Obligations _Interest__Equity Balance as of December 33, 2036 393,770,973 303,644 29,786 846,045 2,383,424 (8,052) 332,433 6,686,980 Increase in
Slide 40: Annex Table
Annex Table 6
Slide 41: Results by airport and subsidiary
Total Pomeae resis 78s TotlPaargers ase Tota Revenuet fism2raagst TeualReues aanse 9703 Avonautes Revenues aa5gz2guzgngAwsnautka Reems Bg ana Conmrumion Reverses 6368 syaxt_—CaneuuetanRevenuer sata 73 Income trom Opens aogayll 392,04 _lncometrom Operations cae See Total Revenuet asec urges TotslReen
Slide 42: Analysts covering OMA
Annex Table 7 In accordance with the requirements of the Mexican Stock Exchange, the analysts covering OMA are:
Slide 43: Analyst coverage list
Actinver Casa de Bolsa Bank of America Merrill Lynch Banorte-IKE Barclays Bank PLC BBVA Bancomer Bradesco BB! Citigroup Credit Suisse Goldman Sachs Grupo Bursétil Mexicano (GBM) Grupo Financiere Interacciones HSBC Intercam Casa de Bolsa Insight Investment Research trad BBA LP. Morgan Morgan Stanley
Slide 44: Notes to the Financial Information
Notes to the Financial Information Financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”), and presented in accordance with IAS 34 “Interim Financial Reporting.” Adjusted EBITDA: OMA defines Adjusted EBITDA as EBITDA less construction revenue plus c
Slide 45: Construction revenue, construction cost
Construction revenue, construction cost: IFRIC 12 “Service Concession Arrangements” addresses how service concession operators should apply existing International Financial Reporting Standards (IFRSs) to account for the obligations they undertake and rights they receive in service concession arrange
Slide 46: Definitions: maximum rate and non-aeronautical revenues
(one terminal passenger or 100kg of cargo) that may be earned by each airport each year from all regulated revenue sources. The concessionaire sets and registers the specific prices for services subject to regulation, which may be adjusted every nine months as long as the combined revenue from regul
Slide 47: Forward-looking information
This report may contain forward-looking information and statements. Forward-looking statements are statements that are not historical facts. These statements are only predictions based on our current information and expectations and projections about future events. Forward-looking statements may be
Central North Airport Group — Q1 2018 Earnings Presentation on 6ix