Auckland International Airport Limited · NZX:AIA
Auckland International Airport — Investor Day (November 2015)
142 slides from Auckland International Airport's investor day presentation, Nov 6, 2015
Slide 1: Delivering for the future
Delivering for the future Investor Day – 6 November 2015
Slide 2: Agenda
Agenda 9:00 a.m. Phil Neutze Acting Chief Financial Officer Welcome 9:05 a.m. Adrian Littlewood Chief Executive Introduction and strategy update 9:20 a.m. Norris Carter GM, Aeronautical Commercial Growing travel markets 10:05 a.m. Judy Nicholl GM, Aeronautical Operations Operational excellence 10:35
Slide 3: Strategy Update
Strategy Update Adrian Littlewood Chief Executive Investor Day: 6 November 2015
Slide 4: Faster Higher Stronger
: : r 4 } FASTER ¢q* HIGHER » ea é “— P aA, 4 / ~ re = _st —_-.,
Slide 5: Annual Meeting 2013 strategy
BE FAST, INVEST EFFICIENT FOR FUTURE & EFFECTIVE GROWTH a a = — a e STRENGTHEN GROW OUR ‘ iat ” CONSUMER 4 A’ BUSINESS
Slide 6: Grow Travel Markets
© GROW TRAVEL MARKETS
Slide 7: 3m visitor arrivals to Aug 2015
At 3m visitor arrivals to Aug 2015 we are at the top of the “Ambitious” targets
Slide 8: Strengthen our consumer business
STRENGTHEN OUR CONSUMER/BUSINESS ,
Slide 9: Be fast, efficient and effective
BE. FAST, EFFICIENT & EFFECTIVE
Slide 10: Invest for future growth
INVEST*FOR FUTURE-GROWTH
Slide 11: Slide 11
Slide 12: Double Chinese arrivals
Double Chinese arrivals to 400,000 by FY17 é é i é é 10 million international passengers by FY18 ft i ft i i 20 million total passengers #8838 6, 2020 Build property rent Bea : to $6O0m by FY17 lt eke
Slide 13: Growing Travel Markets
Growing Travel Markets Norris Carter General Manager Aeronautical Commercial Investor Day: 6 November 2015
Slide 14: Strategic Framework
Strategic Framework Grow travel markets by working with partners across the whole value chain 14
Slide 15: Growing air capacity
Growing air capacity Airline network modelling tools are used to evaluate existing and new routes 15
Slide 16: Opportunities to grow on all routes
Opportunities to grow on all routes China is Canada is Germany is underserved underserved underserved UK is underserved USA is Japan is underserved underserved India is Australia is Brazil is underserved underserved underserved South East Asia is Chile is underserved underserved • Source: Auckland A
Slide 17: Segment view of airline routes
Segment view of airline routes Illustrative Auckland Los Angeles 2600 passengers/week 17
Slide 18: Dynamic network flow model
Dynamic network flow model Illustrative Alternative routes Via San Francisco, Honolulu, Sydney London Nelson Auckland Los Angeles New York Melbourne 2600 passengers/week Miami Queenstown 12% connect through Auckland 70% local traffic 30% connect through Los Angeles 18
Slide 19: North American Traffic Flows
North American Traffic Flows High proportion of West Coast passengers between Auckland and North America 19
Slide 20: Opening eastern North America
Opening eastern North America Two flights to different cities would carry different passengers 20
Slide 21: China Flows
China Flows Growth in non-stop flights to/from China provides increased seat capacity for Chinese inbound travel growth and also releases capacity to/from South East Asian hubs 21
Slide 22: South East Asia and India
South East Asia and India Growth in non-stop flights to/from China releases capacity to South East Asian hubs, enabling growth from South and East Asia 22
Slide 23: United Kingdom and Europe
United Kingdom and Europe Middle East capacity is increasingly important 23
Slide 24: Domestic Network
Domestic Network Domestic capacity growth supports international growth; 19% of international passenger traffic connects with the domestic network at Auckland 24
Slide 25: New airline capacity in 2015
New airline capacity in 2015 Singapore Buenos Aires Houston Perth Domestic 25
Slide 26: Strategic Framework
Strategic Framework Grow travel markets by working with partners across the whole value chain 26
Slide 27: Top NZ visitor markets 2015 to 2025
Top 10 NZ visitor markets 2015 to 2025 27
Slide 28: Four Seasons Five Senses
Four Seasons Five Senses 28
Slide 29: Tourism Partnerships
A Auckland Airport Tourism Partnerships (c) Auckland :*?: Tourism, Events and <= An Aucaland Counc) Orgarasanion AUCKLAND NEW ZEALAND TOURISM TOURISM 2025>/ GROWING VALUE TOGETHER WHAKATIPU UARA NGATAHI aed econ t amet tourism HIKINA WHAKATUTUKI | N DUSTRY 29
Slide 30: Tourism product development
Tourism product development 30
Slide 31: Growing travel markets: summary
Growing travel markets: summary Middle East China Grow capacity to Match capacity to unlock Europe and growth, target high India growth value travellers and year-round travel Americas Tasman Grow capacity to unlock Grow capacity visitor growth to feed the potential Auckland to Americas hub SE Asia U
Slide 32: Operational Excellence
Operational Excellence Judy Nicholl General Manager Aeronautical Operations Investor Day: 6 November 2015
Slide 33: Operational Excellence
Operational Excellence . Multi Nature of our stakeholder schedule and Pace of growth environment location
Slide 34: From Silos to Structure
From Silos to Structure Fueling Ground Baggage reclaim Handler Check in 1 Cabin cleaning Stand Allocation Bio-security Baggage Immigration sorting Ground Airport Co Handler Catering 3 Ground Handler 2 Air Traffic Emigration Apron Control Control Pushback Disposition Passenger Weather intel Bus ops A
Slide 35: Collaborative Vision and Measurement
Collaborative Vision and Measurement COG Vision COG Metrics “We will work collaboratively to deliver 1. Safety a world leading customer experience 2. On Time Performance (OTP) while promoting growth for New 3. Customer experience Zealand, upholding safety and security 4. Passenger processing times a
Slide 36: Structured Collaboration
Structured Collaboration Collaborative Operations Group (COG) Purpose: Quarterly: Oversight and CEO COG Leadership Purpose: Monthly: Strategic Senior COG Continuous improvement projects Purpose: Daily COG Tactical Apron Oversize Arrivals Departures A-CDM Optimise Fragile 36
Slide 37: Airport Operating System (AOS)
Airport Operating System (AOS)
Slide 38: AOS module: A-CDM
AOS module: A-CDM 38
Slide 39: A-CDM Portal: one source of the truth
A-CDM Portal: one source of the truth
Slide 40: A-CDM works like this
Put together, A-CDM works like this…..
Slide 41: Customer Service
Customer Service Ai |Ausktana Airport
Slide 42: Airfield Efficiency and Safety
Airfield Efficiency and Safety 42
Slide 43: Operational Compliance
Operational Compliance
Slide 44: Being a good neighbour
Being a good neighbour • Casper: Noise Management System • Linking communities and aviation through technology 44
Slide 45: Future operating mode
Future operating mode 45
Slide 46: Future Vision: Joint Operations Centre (JOC)
Future Vision: Joint Operations Centre (JOC) 46
Slide 47: Slide 47
Slide 48: Retail & Commercial
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Slide 49: FHS – Strengthening Our Consumer Business
FHS – Strengthening Our Consumer Business Retail & Commercial focus areas at the last investor day: Drive the core business hard • Preserve existing strengths • Extend customer reach • Higher customer engagement • Smart capacity add-ons Secure future growth 49
Slide 50: Major achievements in the last 2 years (Retail)
Major achievements in the last 2 years (Retail) Utilisation of space Upgrades and enhancements Online developments 50
Slide 51: Major achievements in the last 2 years (Transport)
Major achievements in the last 2 years (Transport) Valet Parking Park & Ride Expansion Online Optimisation 51
Slide 52: Major achievements (Advertising, Passenger Products)
Major achievements in the last 2 years (Advertising, Passenger Products) Advertising tender Emperor lounge & concierge services 52
Slide 53: Delivering the results (Retail)
Delivering the results (Retail) ITB Retail Sales FY13 - Duty Free Sales FY13 - FY15 ITB F&B Sales FY13 - FY15 ITB Specialty Sales FY13 - FY15 FY15 (excl tobacco) (excl tobacco) 55% growth 3% 19% growth growth 13% growth FY13 FY14 FY15 FY13 FY14 FY15 FY13 FY14 FY15 FY13 FY14 FY15 ITB Retail PSR FY13
Slide 54: Delivering the results (Transport)
Delivering the results (Transport) Valet Revenue per month Strong growth in Valet with revenue in the last 12 months exceeding $2m Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Spaces & ARPS % Growth YoY 7,500 Spaces ARPS % Growth 30% Added substantial capacity 20% 7,000 to our public carparks 10% NB: i
Slide 55: Delivering the results (Emperor Lounge, Advertising)
Delivering the results (Emperor Lounge, Advertising) Emperor Lounge Advertising Sales Revenue and Customers # of customers Emperor Lounge 200 6000 180 5000 160 140 4000 120 100 3000 80 2000 60 New 40 operator 1000 20 Dec-14 0 0 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 JUL 13 NOV 13 MAR 14 JU
Slide 56: However, our market is changing
However, our market is changing ITB Retail PSR FY13 vs FY15 (excl tobacco) 1% growth FY13 FY14 FY15 56
Slide 57: Market Insight: Customer Value Measurement
Market Insight: Customer Value Measurement 57
Slide 58: Market Insight: Spend by passenger nationality
Market Insight: Spend by passenger nationality Retail Segments by Region Size of bubble = Sales (Oct-14 to Sep-15) PAX (millions) 4.5 Australia China 4.0 Other Europe United States 3.5 United Kingdom Although passenger Other Asia growth from China 3.0 Japan is considerably Rest of World higher than
Slide 59: Market Insight: Segments and market share
Market Insight: Segments and market share Spend by customer type Opportunities to grow categories Market Share vs Category Downtown & Online Fashion 1% Jewellery 3% Technology & Entertainment 1% • NZ residents still Destination & Souvenirs 4% contribute almost 80% of total sales in terminal • The ar
Slide 60: Market Insight: Customer Journey
Market Insight: Customer Journey Most passengers decide whether to shop at the airport before they leave home For passengers who made a purchase, Those who plan to purchase are: the decision to buy was made: 8x F&B Retail Duty Free 3x 6x More likely to More likely to More likely to 58% 45% 72% buy F
Slide 61: The big moves: Retail Value Proposition
The big moves: Retail Value Proposition Overarching concept THE BEST OF NEW ZEALAND & THE WORLD The distinctive & unique environment, culture, values, people Our place in the world 1. Enablement 2. Liberated 3. Discovery Functional Emotional Experiential What is there I want. How it feels The retail
Slide 62: The big moves: Duty Free Tender
The big moves: Duty Free Tender 62
Slide 63: The big moves: Duty Free Tender
The big moves: Duty Free Tender 63
Slide 64: The big moves: ITB expansion
The big moves: ITB expansion *Not to scale
Slide 65: The big moves: Smart additions / capacity
The big moves: Smart additions / capacity 65
Slide 66: Future focus areas
Future focus areas • Deliver business results • Lease new space to deliver “Best of NZ & World” • Manage retail through construction disruption • Online transformation
Slide 67: Strengthening Customer Relationships
Strengthening Customer Relationships Jason Delamore General Manager Marketing Investor Day: 6 November 2015
Slide 68: Marketing – New function (Jan 14)
Marketing – New function (Jan 14) • Building team capability – both internal and external. Ranging from creative talent to digital boffins – underpinned by project management and strong delivery • Building platforms to optimise customer knowledge – culling, or shifting effort so we can better delive
Slide 69: Early Forays and Outcomes
Early Forays and Outcomes Tourism • Successful Tourism Growth engines Partnership with MBIE significantly improved • Delivering FIT and high net worth travellers through referral channels • Digital footprints improved – seasonal campaigns targeting right segments • MOU with Tourism NZ (leverage in-
Slide 70: Early Forays and Outcomes
Early Forays and Outcomes Search and • 15% YOY improvement in online digital to parking bookings and 79% YOY drive base improvement in online Emperor assets lounge bookings • 5.8M digital sessions. Mobile access grew by 27% and is now half of all our traffic • Effectiveness of digital ad spend impro
Slide 71: Core Themes
Core Themes Outbound NZ Inbound Customer Experience Customer engagement Participate in markets Pan-business and value exchange that need support framework created (data, behaviour, (China, Australia) influence) CE and revenue are Leverage partner reach, linked – drivers vary Marketing effectiveness
Slide 72: Customer Experience
Customer Experience - an ambitious programme of activity 72
Slide 73: Understanding customer behaviour
Understanding customer behaviour Understanding behaviour leads to knowing what customers are doing, when and how often. The next phase is to capture who they are, predict behaviour and recognise appropriately • Unique NZ • “ASQ”- travellers per year understanding = 1.7M what matters to customers – •
Slide 74: Our vision – real relationships
Our vision – real relationships SOCIAL INTERACTION MOBILE Creating social Recognize and Being with the currency engagement respond to every customer, wherever and leveraging reach interaction, not just and whenever and the transaction before they arrive at the airport REAL-TIME ACHIEVEMENT SCALE Sho
Slide 75: Developing a robust digital framework
Developing a robust digital framework • Enabling customer choice • Enhancing end-to-end Insights & Opportunities experience (before airport- at airport- beyond airport)…where relevant Optimisation Auckland Strategy • Building depth and breadth of Airport customer knowledge and insights Digital Frame
Slide 76: Macro Digital Trends
Macro Digital Trends Mobile (whether App or browser) is dominating the digital experience 76
Slide 77: eCommerce continues to grow
eCommerce continues to grow 77
Slide 78: mCommerce chasing hard
mCommerce chasing hard Mobile commerce is growing at high rates …But desktop is ‘currently’ still the engine room of online sales 78
Slide 79: NZ Context
NZ Context NZ Retail & Consumer Goods Market $m (Categories relevant to Auckland Airport Retailers) International Auckland Airport growing mobile Online Sales presence $1,781m Retail Store Sales (22.7% growth) $3,818m (5% growth) • Approx 50% of digital traffic now via mobile devices $1,680m • App g
Slide 80: Bringing campaigns to life
Bringing campaigns to life 80
Slide 81: Coming soon – new online experience
Coming soon – new online experience 81
Slide 82: Coming soon – new online experience
Coming soon – new online experience Log-in for personalisation Quick home page access to key transactions and areas Featured deals and offers 82
Slide 83: Coming soon – new online experience
Coming soon – new online experience
Slide 84: Coming soon – new online experience
Coming soon – new online experience Quick cross-sell specific to Upgrade selected and upsell terminal options Presentment options (price, convenience, promotions)
Slide 85: Coming soon – new online experience
Coming soon – new online experience 85
Slide 86: Coming soon – new online experience
Coming soon – new online experience Cross-sell promotional area Shopping filters and search area Promotional and collections areas 86
Slide 87: Next steps
Next steps Optimising • Execute on variety of projects (improving overall experience) Customer • More dynamic/ granular measures so we can target initiatives Experience more effectively • More collaboration with broad range of stakeholders (airlines, border agencies) • Provide focus on customer expe
Slide 88: Next steps
Next steps Exploring • Targeting repeat customers with high spend potential reward & • 40-50% of travellers park – improving online experience presents recognition more choice and enhances knowledge with Retail partners • 75% of high value customers have indicated interest in developing a stronger r
Slide 89: FB aitport®
FB aitport®
Slide 90: Airport Development
AIRPORT DEVELOPMENT
Slide 91: Why? Total passenger growth
Why? 60,000,000 40 year Total Passenger Growth 55,000,000 50,000,000 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 High Forecast Total PAX (CAGR 3.6%) Low Forecast Total PAX (CAGR 2.3%) Base Forecast Total PAX (CAGR 3.2%) Actual Total PAX (CAGR 4.8
Slide 92: How? Our Development Platform
How? Our Development Platform Leading-edge planning tools • Project process • Airport Development Plan • Transport and utilities strategies Technology • GIS • BIM
Slide 93: How? Our Team
How? Our Team • Strong internal team with international experience • International framework consultant panel We do three things • Development planning building our vision • Statutory planning obtaining permissions • Delivery design and construction 93
Slide 94: Development Planning
Development Planning Our 30-year vision Airport Masterplan • Published 2014 • 30-year vision • High-level view Airport Development Plan • Detailed 30-year plan • Input to capital planning and pricing Planning Studies • Northern Runway • Core Infrastructure • Transport & Utilities Strategies Programm
Slide 95: Statutory Planning
Statutory Planning • Proposed Auckland Unitary Plan • Notice of Requirement • Social licence
Slide 96: Delivery: Summary of key projects
Delivery Summary of key projects
Slide 97: Delivery: Key projects to 2022
Delivery Summary of key projects – to 2022 InTB Phase 4 Terminal Plaza Extended Pier B InTB Phase 3 Extended outbound processing & dwell InTB Phase 5 Domestic Terminal For illustrative purposes only
Slide 98: Delivery: Key projects to 2030
Delivery Summary of key projects – to 2030 Road Northern Runway infrastructure (first stage) InTB Phase 6 Extended international arrivals Airport Rail (tentative alignment) Terminal precinct For illustrative purposes only
Slide 99: Delivery: Key projects to 2044
Delivery Summary of key projects – to 2044 Developed road infrastructure Extended International Terminal plus Pier C Extended domestic & regional capacity For illustrative purposes only
Slide 100: Delivery: Key projects post 2044
Delivery Summary of key projects – post 2044 Extended northern runway Additional roads infrastructure. Airport access re-alignment For illustrative purposes only
Slide 101: Delivery: Our programmes
Delivery Our programmes • Domestic Terminal • Integrated Terminal • Airfield • Transport and utilities
Slide 102: Delivery: Existing Domestic Terminal
Delivery Existing Domestic Terminal Extension and upgrade September 2014 Further extension: • Regional Stands 49 and 50 September 2015 • Western Regional Facility • Stage 1 Christmas 2015 • Stage 2 February 2016
Slide 103: Delivery: Integrated Terminal
Delivery Integrated Terminal Built in phases, a combined domestic and international terminal Phase 1.1 Additional Code F baggage belt Complete November 2014 Phase 1.2 Second additional Code F Scheduled November 2015 baggage belt Phase 2 Reconfigured inbound processing Completed November 2015 Phase 3
Slide 104: Phase 3: Outbound processing and airside dwell
Delivery Integrated terminal: Phase 3: Outbound processing and airside dwell
Slide 105: Phase 3: Recompose area
Delivery Integrated terminal: Phase 3: Outbound processing and airside dwell Recompose area 105
Slide 106: Phase 3: Airside dwell
Delivery Integrated terminal: Phase 3: Outbound processing and airside dwell Airside dwell 106
Slide 107: Phase 3: Airside dwell – from mezzanine
Delivery Integrated terminal: Phase 3: Outbound processing and airside dwell Airside dwell – from mezzanine 107
Slide 108: Integrated terminal – Expansion of Pier B
Delivery Integrated terminal – Phase 4 Expansion of Pier B Deliverables Timing Bus Lounge, at ramp level December 2015 Stage 1 - Pier extension to the west December 2016 - Contact stand at gate 17 (MARS) - Remote stand 19 extended west Stage 2 - Pier extension to the north December 2017 - Contact st
Slide 109: Delivery: Airfield
Delivery Airfield Providing capacity to meet growth • Aprons, stands and taxiways • Fuel hydrants and support services • Northern runway
Slide 110: Airfield – Northern runway
Delivery Airfield – Northern runway Factors influencing runway capacity and timing Separation distances Peak spreading Up-gauging Fleet-mix Regulatory requirements DKMA forecast update in 2017
Slide 111: Airfield – Northern runway
Delivery Airfield – Northern runway Design and staging based on comprehensive analysis Masterplan MACAD modelling by MIT o Existing runway has a capacity for 41-43 peak-hour movements o By comparison London Gatwick has 55 peak-hour capacity LGW AIRCRAFT MIX AKL AIRCRAFT MIX Medium Heavy Other (i
Slide 112: Transport Strategy
Delivery Transport Strategy Transport Strategy • Infrastructure development • Modal shift • Demand management
Slide 113: Transport – Infrastructure development
Delivery Transport – Infrastructure development Wider network improvements Close working relationship Waterview Connection with Auckland Transport and New Zealand Transport Agency East-West link Kirkbride Road Verissimo Drive Puhinui Road
Slide 114: Transport – modal shift
Average Daily Traffic - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 Harbour Bridge Newmarket Viaduct Vic Park SH20 - Mangere Crossing SH16 (Patiki Road) Delivery SH16 (Lincoln Road) SH18 (Caribbean Drive) SH18 (Upper Harbour Bridge) SH1 S of Warkworth reliability. SH1 Wgtn Ng
Slide 115: Transport – Modal shift
Delivery Transport – Modal shift Enhanced bus network – 2016 Rail
Slide 116: Transport – Demand management
Delivery Transport – Demand management • Advancing traffic management technology • Better traffic information 116
Slide 117: Transport – Demand management
Delivery Transport – Demand management Into the future… • Road-user charging • Transport-on-demand
Slide 118: Property
Property
Slide 119: Highlights
Highlights • FY15 leasing and development success lifted rent roll >20% • Airport campus attracting quality customers • Hotel portfolio performing ahead of expectations • Excellent safety record • Portfolio Value $998M (includes $235M of development land) – up 36% since 2013 • Rent Roll $56M – up 28
Slide 120: Precincts
Precincts Alauesans i The Quad D The Landing a Cargo 120
Slide 121: Faster Higher Stronger – 2013 Strategy
Faster Higher Stronger – 2013 Strategy • Develop New Zealand’s best business location • ‘Place’ based strategy • Capability, proposition, track-record • $60M rent roll by 2017
Slide 122: Faster Higher Stronger – Status
Faster Higher Stronger – Status Property Rent Roll - FHS vs Forecast • 2013 aspirational goal was to lift rent roll $65 to $60M by 30 June 2017 On track to deliver in FY16 $60 • FY15 was our best year ever 20% lift in rent roll $55 Millions • All hotels performing ahead of expectations $50 Hotel 3 i
Slide 123: Portfolio Snapshot
Portfolio Snapshot FY16 Revenue by Category FY16 Revenue by Precinct Other, 3% The Terminal, The Common, 1% 4% Commercial, Altitude, 9% 6% Retail, 8% The Landing, 16% Hotel, 4% Cargo South, Office, 7% Industrial, 52% 36% The Quad, 12% Ground Lease, 17% Cargo North, 25% WALT Occupancy 5.5 100% 98% 5
Slide 124: Market Outlook
Market Outlook Grade A Auckland Industrial Vacancy Prime Industrial Combined Net Effective Rents 4.5% $130 $120 3.0% $110 $100 1.5% $90 0.0% $80 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Auckland Airport Corridor Auckland Airport Corridor Chang
Slide 125: How do we compare?
How do we compare? Occupancy WALT Company Occupancy Company WALT (years) Property for Industry 100% Vital Healthcare 17.6 Vital Healthcare 99.4% Stride Property 8.3 Stride Property 99.4% NPT Ltd 6.0 AUCKLAND AIRPORT 99.3% Augusta Capital 5.9 Argosy Property 98.8% Property for Industry 5.3 Precinct P
Slide 126: The Landing Business Park
The Landing Business Park Stage 3B
Slide 127: The Landing Business Park
The Landing Business Park World Class Asset • Premium product • Over 100ha of developable land Development Momentum Building • $110M of new projects in FY16 • Quality tenants, long leases Positive Outlook • Sound development pipeline
Slide 128: The Landing – Capacity
The Landing – Capacity Stage 3B
Slide 129: The Landing – Projects under Construction
The Landing – Projects under Construction 129
Slide 130: Speculative Building
Speculative Building • Low vacancy levels and strong demand • $40M of speculative industrial projects embarked upon in past 18 months • 94% of projects leased prior to project completion • Construction of $13M four unit development in Timberly Place commencing in January 2016
Slide 131: The Quad Office Park
The Quad Office Park • Campus style office park Office space 100% let • Airport community epicentre • Linking terminals via connecting boulevard and planned pedestrian bridge • Quad 7 project underway 8,500sqm grade A office space Completes November 2016
Slide 132: Hotels
Hotels • Existing hotels performing strongly • Novotel has stabilised occupancy at 87% with strong room rate growth • Ibis budget expanded by 73 rooms in December 2014. Maintained occupancy at 89%, room rate up 5.4% • Coherent suite of hotel products • Planning advanced on hotel 3 Hotel operator R
Slide 133: Future Focus
Future Focus • Maintain high standard of safety performance • Accelerating development programme • Cement The Landing as NZ’s premium business park • Increase hotel capacity
Slide 134: Capital Expenditure
Capital Expenditure Auckland Airport Capex 250 200 150 $ million 100 50 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F Total Aeronautical Property development Infrastructure & other Retail Car parking Into phase of higher aeronautical and investment property capex. At
Slide 135: Capex Principles
Capex Principles Individual projects: Overall capex programme: • align with Faster Higher Stronger • Aeronautical programme delivers strategy affordable aero price path • business-cased • Total company capex programme consistent with maintaining credit • must meet forecast return hurdles, eg: rating
Slide 136: ITB Level 1 Redevelopment
ITB Level 1 Redevelopment Expanded outbound processing, airside dwell and retail project (Phase 3) • Enabling works underway • Project to be delivered in 3 phases (Dec 16, Dec 17, Mar 18) • EFC - $160-$180m: • 50+ year building (may find surprises) • Possible design evolution (tenancies) • More deta
Slide 137: Funding & Capital Management
Funding & Capital Management Funding future investment Capital management: • Retained cashflow (depreciation) • No foreseeable need to raise equity • Debt: • If forecast credit metrics again First commercial paper or bank approach levels consistent with debt, then ‘term-out’ with: rating upgrade,
Slide 138: Auckland Airport Borrowings
Auckland Airport Borrowings Upcoming debt facility maturities Type Maturity Date Drawn Volume The ANZ, Westpac and BNZ standby facilities all support our NZD Bond November 2015 $100m commercial paper programme, which had a balance of $92 Wpac Facility April 2016 Nil million as at 30 October 2015, an
Slide 139: Regulatory Environment
Regulatory Environment • Dual-till regime under the Commerce Act 1986 with information disclosure regulation • Aeronautical till faces limited competition / subject to information disclosure regulation • Airport Authorities Act 1966 provides for and requires: Airports to set charges as they see fi
Slide 140: PSE2 Aeronautical Returns
PSE2 Aeronautical Returns Figures above exclude revaluations • FY15 outturn to be finalised and published end of November this year • Entire PSE2 period IRR expected to be close to 75th percentile WACC target 140
Slide 141: Commerce Commission Review
Commerce Commission Review • ‘Input Methodology Review’ underway (December 2016 completion) • Key issues for AIAL: WACC percentile treatment of land held for future aeronautical use risk apportionment (when under/over deliver versus forecast) • Auckland Airport’s FY18-22 aeronautical price pat
Slide 142: Auckland Airport
Fi airport
Auckland International Airport — Investor Day (November 2015) on 6ix