Auckland International Airport Limited · NZX:AIA
Auckland International Airport — London Conference March 2011
36 slides from Auckland International Airport's conference presentation, March 2011
Slide 1: Auckland International Airport Limited London Conference March 2011
Auckland International Airport Limited London Conference March 2011
Slide 2: Presentation Team
Presentation Team Simon Moutter Chief Executive Simon is responsible for the overall leadership, strategic direction and executive management of the Company. Prior to joining us in 2008, Simon was chief operating officer at Telecom New Zealand, managing most parts of the business at one time or anot
Slide 3: Company overview
Company overview Auckland Airport is the largest and busiest airport in New Zealand with few natural competitors • Over 13 million passengers annually - 6.0 million domestic (45%) - 7.4 million international (55%) • 155,000 aircraft movements • 200,000 tonnes of high value freight • 23 airlines (19
Slide 4: NZ's busiest airport
NZ’s busiest airport Auckland Airport is the busiest of NZ’s seven international airports. Over 70% of all international visitors to NZ arrive or depart from Auckland Airport. Few natural competitors. 16 Passengers (millions) 14 13.4 12 10 7.4 8 6.0 6 5.1 1.6 0.6 4 6.0 2 4.4 4.5 0.8 0.1 0 0.7 Auckla
Slide 5: High proportion of high value international passengers
High proportion of high value international passengers Auckland Airport has a balanced distribution of domestic and international passengers. Over 88% of international passengers originate or are destined for NZ. International passengers represent 55% of total passengers, the highest proportion for
Slide 6: Robust business to shocks…
Robust business to shocks… Growth in total passengers has proven its resilience during times of upheaval in the air transport industry (CAGR of approx 5% since 1998). Total passengers (including transits) 16 Sub Prime Crisis and Global Avian Flu Outbreak Recession 14 SARS Outbreak 12 September 11 Pa
Slide 7: but with exposure to high growth
but with exposure to high growth Source: Goldman Sachs Global Aviation Trends Report, 15 November 2010 7
Slide 8: Changing shape of travel markets
Changing shape of travel markets Our Flight-path for Growth strategy % of international 6 months 6 months Growth on launched in March 2009 had a arrivals by region Dec 2010 Dec 2009 pcp significant emphasis on Asia New Zealand 48.4% 47.8% 5.07% passenger growth. Australia 18.9% 19.6% -0.09% “Rapidly
Slide 9: Delivering on our growth plan
Delivering on our growth plan Our vision is to build a great New Zealand business recognised as a world leader in creating value from modern airports. To grow value in our airports for investors we will: Further increase investment in air services and market development to grow passenger volumes f
Slide 10: Growing air services at our airports
Growing air services at our airports Significant route development commencing in the six months to 31 December 2010: Annual Airline Service Airport Route Start Date Capacity Emirates Up-gauge Auckland Melbourne Aug-10 72,000 Jetstar New service Auckland Melbourne Dec-10 130,000 Jetstar Increase freq
Slide 11: Growing air services at our airports
Growing air services at our airports Significant route development announced to start from January 2011: Annual Airline Service Airport Route Start Date Capacity China Airlines New service Auckland Brisbane - Taipei Jan-11 96,000 Emirates Up-gauge Auckland Brisbane Jan-11 72,000 Malaysia Airlines In
Slide 12: Outstanding retail performance
Outstanding retail performance Over 100 shopping outlets across domestic and international terminals. Major programme of retail expansion, refurbishment and re-tenders combined with new data driven retail capability just completed. New tenants opened in the six months to December 2010 include Icebre
Slide 13: Yield management delivers results
Yield management delivers results Parking facilities for over 8,000 Car park product offering at Auckland Airport cars. International Terminal Domestic Terminal Park & Ride Proximate short-term and Multi-level car park with Opened December 2008 long-term parking options direct connectivity into Acti
Slide 14: Stimulate property development
Stimulate property development Over 1,500 hectares (approx 3,700 acres) of freehold land with over 440 hectares (1,095 acres) potentially available for commercial development. Comprehensive land use plan published with broader appeal to non-traditional airport tenants. Property kick-start strategy s
Slide 15: Accelerating property success
Accelerating property success Project Construction Value Auckland Airport Expected $m Construction Cost Completion $m Aviation Security Office 5.9 5.9 Completed Mercedes Parts Warehouse 3.0 3.0 Completed DSV Air and Sea 3.8 3.8 May 2011 Aviation Travel and Training 3.5 3.5 Jun 2011 Novotel Hotel 65.
Slide 16: Changing capital allocation
Changing capital allocation Capital Expenditure Invested approximately $500 million over 160 5 years (2005-2009) in core infrastructure. 140 Existing aeronautical infrastructure can 120 34.6 accommodate significant growth in 100 NZ$ million aircraft and passenger movements 34.2 31.0 80 without furth
Slide 17: Auckland Airport Master Plan – Moving to a highly efficient future
Auckland Airport Master Plan – Moving to a highly efficient future Auckland Airport strives to balance supply with Long term view of Airport Business District demand to optimise the efficiency of existing infrastructure and deliver additional capacity when needed. Master plan moves to a dual-runway,
Slide 18: Delivering operating leverage benefits
Delivering operating leverage benefits Auckland Airport 25.0% for six months ended 31 December 2010 Volume growth can be achieved 20.0% without incurring significant 15.0% operating costs or capital expenditure to deliver strong cash 10.0% flow and profit growth. 5.0% 0.0% Total Revenue EBITDA Net P
Slide 19: Christchurch earthquake impact uncertain
Christchurch earthquake impact uncertain Significant impact on Christchurch, but uncertain impact on Auckland and NZ tourism Adverse impact on New Zealand tourism market will be mitigated by Auckland Airport’s diverse passenger base and multiple connectivity options for travel itineraries. Business
Slide 20: Diverse tourism offering
Diverse tourism offering Diversified tourism locations in New Zealand. Auckland and Queenstown’s locations are geographically not affected by the Christchurch earthquake. Domestic connections from Auckland provide access to all tourism hubs in New Zealand – capacity can shift easily to meet increase
Slide 21: Supportive airport regulation in NZ
Supportive airport regulation in NZ Dual-till regime with information disclosure requirements • Aeronautical till: subject to limited competition and therefore regulated • Non-aeronautical till: subject to open market competitive forces New Zealand Commerce Commission monitors regulatory regime: • D
Slide 22: The case for investment
The case for investment Low risk exposure to Asia–Pacific growth story. Ownership position in four airports all with considerable upside potential. Growth strategies succeeding in growing passenger volumes, aero revenues, retail yields and property rents and plenty more to come Strong Balance Sheet
Slide 23: Appendix: Auckland Airport Interim Results December 2010
Appendix Auckland Airport Interim Results December 2010 24 February 2011
Slide 24: Results overview
Results overview 6 months 6 months ended ended % Change 31 Dec 2010 31 Dec 2009 $m $m Income 198.3 182.4 8.7% Expenses 47.3 44.1 7.3% EBITDAFI (Earnings before interest, taxation, depreciation, fair value adjustments and 151.0 138.3 9.2% investments in associates) Share of profit of associates 0.8 0
Slide 25: Passenger volume growth
Passenger volume growth International passenger numbers grew 5.0% in the six months to Passenger growth rates July - Dec 2010 7.00% December 2010 compared with prior year. 6.00% 5.00% Still strong domestic passenger 4.00% growth of 2.6% in the six months 3.00% to December 2010, despite the withdrawa
Slide 26: Growth strategy evident in revenue
Growth strategy evident in revenue Airfield income increased 11.7% due 6 months 6 months ended ended to the pricing schedule now back in 31 Dec 2010 31 Dec 2009 place after discounted prices were $m $m% change applied in FY2010, and increased Airfield income 36.7 32.8 11.7% volume in the six months
Slide 27: Market shift in international arrivals
Market shift in international arrivals Arrivals from Asia increased 20.0% in the six months to December 2010 over pcp, with significant growth from China (39.3%), Japan (24.1%) and India (26.1%). New Zealand passengers still a key market at 48.4% of total arrivals and also showing growth. Australia
Slide 28: Aircraft movement trends
Aircraft movement trends International flight movements increased 2.3% in the 6 months to December 2010. The use of A330 and B767 aircraft decreased, however an increase in the use of heavier B777 led to an overall increase in international MCTOW of 3.3%. Domestic flight movements increased 0.3% in
Slide 29: Growth strategy evident in revenue
Growth strategy evident in revenue Airfield income increased 11.7% 6 months 6 months on the back of increased volumes 31 Dec 2010 31 Dec 2009 $m $m % change and reversion to the pricing schedule post the GFC Airfield income 36.7 32.8 11.7% discounted landing charge Passenger service charge 39.4 36.5
Slide 30: Expenses controlled
Expenses controlled Expenses grew by only $3.2m relative to income increase of $15.9m Major component of expenditure increase is $1.5m increase in marketing and promotional activities associated with aeronautical route development. Aeronautical marketing and promotions is an essential part of the sa
Slide 31: Underlying profit increased
Underlying profit increased 6 months 6 months 31 Dec 2010 31 Dec 2009 $m $m % change Reported net profit after tax 65.5 54.0 21.4 Gain on investment property revaluation (2.3) - - Gain on derivative fair value changes (1.4) - - Gain on sale of associates (1.2) - - Tax effect 0.9 - - Underlying Profi
Slide 32: Extended debt maturity profile
Extended debt maturity profile Finalised agreement on refinancing for US$150 million in the US Private Placement (USPP) market in December 2010 to replace debt maturing in March and July 2011. This issuance into a new international debt market achieved: • attractive pricing; • delayed draw downs to
Slide 33: Debt ratios improved
Debt ratios improved 31 Dec 2010 31 Dec 2009 Average Interest Rate 6.63% 6.92% EBITDAFI interest cover ratio 4.06 3.78 Average debt maturity (years) 4.56 3.50 Debt to Debt + Equity 35.8% 36.3% Percentage Fixed 67.8% 86.0% Reduced percentage of fixed rate debt enables benefits from lower floating int
Slide 34: NQA financial results
NQA financial results Key outcomes in Auckland 6 months 6 months 31 % change Airport’s business case for the Passenger movements 31 Dec 2010 Dec 2009 first 12 months in the acquired International – Cairns 360,428 277,507 29.9 (excluding transits) stake: Domestic – Cairns 1,727,937 1,613,343 7.1 Co
Slide 35: Queenstown financial results
Queenstown financial results Exceptional passenger growth 6 months 6 months % change Passenger movements 31 Dec 2010 31 Dec 2009 in the six month period. International 91,371 66,719 36.9 Local and global campaigns Domestic 384,213 342,707 12.1 launched to promote services to the region. 6 months 6 m
Slide 36: Interim dividends
Interim dividends Interim dividend of 4.00 cps, a 6.7% increase from 3.75 cps in FY10, and the first increase in interim dividends since 2005. Total interim dividend of $52.7m an 7.9% increase on the $48.8m interim dividend in FY10. Record date for dividend is 18 March 2011 to be paid on 1 April 201
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