3i Infrastructure PLC · LSE:3IN
3i Infrastructure — H1 FY2024 Earnings Presentation
37 slides from 3i Infrastructure's earnings presentation, November 2023
Slide 1: Results for the six months to 30 September 2023
Results for the six months to 30 September 2023
Slide 2: Important information
Important information This disclaimer (and any non-contractual obligations arising out of or in connection with it) is governed by English law and applies to these materials and to their presentation and webcast on behalf of 3i Infrastructure plc (together the “Presentation”). The sole purpose of th
Slide 3: Important information (cont.) - US Persons
Important information (cont.) - US Persons The distribution of this Presentation in certain jurisdictions may be restricted by law. Persons into whose possession this Presentation comes are required to inform themselves about and to observe any such restrictions. Terms used in this disclaimer (inclu
Slide 4: Our strategy and objectives
Our strategy and objectives Our strategy Our objectives To maintain a balanced portfolio of To provide shareholders with: infrastructure investments delivering an • A total return of 8% to 10% per attractive mix of income yield and capital annum over the medium term; and appreciation for shareholder
Slide 5: Delivering top-quartile track record for over 15 years
Delivering top-quartile track record for over 15 years 351.4 336.2 1 303.3 rn a l i s e d r2etu n u 1 4 % net an return: 10% 254.5 268.1 rn 1 3iN: edian pee r e d retu M 234.7 ali s 2 nnu 1% 211.0 n et a r return: 1 % 3iN : 18 ian pe e 169.0 Med 161.0 149.9 121.9 121.0 125.2 126.4 112.9 117.7 109.3
Slide 6: The dividend has grown every year since IPO
The dividend has grown every year since IPO Special dividends 3iN: Dividend per share Ordinary dividends FY24 dividend target 6.6% p.a.1 1 41.40 4.8%p.a. 10.2% 6.4% 6.5% 6.6% 6.7% 6.7% 17.00 8.65 9.20 9.80 10.45 11.15 11.90 5.00 5.30 5.50 5.72 5.94 6.49 6.70 7.00 7.25 7.55 7.85 FY08 FY09 FY10 FY11 F
Slide 7: Our approach
Our approach Return Core-plus infrastructure Strong market positions Core infrastructure Supportive megatrends Operational PPPs Our investment focus Exceptional asset management Risk 7
Slide 8: High quality, diverse and differentiated portfolio
High quality, diverse and differentiated portfolio Portfolio value 4% 2% 5% 15% £3.9bn Energy transition 5% Digitalisation Assets 6% 13% Demographic 13 Oyster- catcher 6% change Upgrading ageing infrastructure 7% 11% 8% 9% 9% Note: All numbers are as at 30 September 2023. Aggregate EBITDA shown is f
Slide 9: Another period of outperformance
Another period of outperformance Exceeding our target return of 8-10% per annum 6.3% Total return on opening NAV Continued strong value growth in real terms 351.4p NAV per share Exceptional value uplift achieved on sale of Attero c.31% 5.95p On track to deliver the fully covered FY24 dividend target
Slide 10: Value driven growth across the portfolio
Value driven growth across the portfolio Positioned to continue to outperform Asset contributions to total portfolio return (£m) £233m 4 11 6 12 12 Oyster- 22 catcher 21 22 28 44 45 50 -44 10
Slide 11: Our strategy continues to deliver strong earnings growth
Our strategy continues to deliver strong earnings growth Capex spend is translating into EBITDA in discretionary growth cycle High level of portfolio 11% company earnings growth LTM Portfolio aggregate EBITDA growth Portfolio companies Over £500m investment in growth capex Largely self-funded Growth
Slide 12: Portfolio company leverage
Portfolio company leverage No material amounts of debt requiring refinancing in the short-term 40% 36% Active refinancing approach secured attractive 4.1% weighted 30% average cost of debt Conservative long-term cost of debt assumption 20% 13% 12% 12% Conservative approach to gearing: 10% 10% 9% 34%
Slide 13: A unique realisation track record in the listed space
A unique realisation track record in the listed space Repositioning for value creation upon exit 800 Exit proceeds % Uplift 48% Last reported valuation 600 £m 400 33% 40% 27% 58% 200 31% 0 Total Attero WIG XLT Elenia AWG Eversholt Realised1 Money multiple 2.7x 1.7x 5.9x 4.5x 3.3x 3.3x 2.5x IRR 23% 2
Slide 14: Attero
Attero Another exceptional exit • Partnered with management to grow the c.31% business, and position for future upside Uplift on March 2023 NAV • Doubled EBITDA since acquisition to c.€160m in 2023 c.23% IRR • Major strategic review completed in 2022 ◦ Focused on growing carbon neutral 2.7x energy p
Slide 15: Positioned to deliver further growth
Positioned to deliver further growth High quality portfolio with ongoing opportunities for value accretive capex Valuations are positively correlated to inflation Flexibility around funding Repay RCF through selective realisations at the right time 15
Slide 16: Our Portfolio
30 3) Infrastructure plc Our Portfolio
Slide 17: TCR
TCR Ground support equipment in airports worldwide TCR is the largest independent lessor of airport ground support equipment (“GSE”) and operates at over 210 airports. TCR has defined the market for leased GSE, providing high quality assets under full-service leasing, as well as maintenance and flee
Slide 18: ESVAGT
ESVAGT Wind farm maintenance support vessels and emergency response vessels ESVAGT is the pioneer and market leader in the provision of purpose-built, high performance maintenance vessels (“SOVs”) to offshore wind farms, with eight in operation and three further vessel under construction. They provi
Slide 19: Infinis
Infinis Renewable power generator in the UK Infinis is the largest generator of low carbon electricity from captured methane in the UK, with a portfolio of renewable baseload and low carbon flexible generation across 146 operational sites and a total installed capacity of 460MW. Financial performanc
Slide 20: GCX
GCX The largest private subsea cable network globally GCX owns one of the most comprehensive subsea cable networks globally, serving customers in over 180 countries. Its 66,000km of cables, spanning from North America to Asia, would require large upfront investments and a multi-year lead time to rep
Slide 21: Tampnet
Tampnet Offshore telecom network Tampnet operates the world’s largest offshore, high-capacity communication network in the North Sea and the Gulf of Mexico. It provides customers with mission-critical reliable communications including high speed, low latency and resilient data connectivity offshore
Slide 22: Ionisos
Ionisos Cold sterilisation facilities across Europe Ionisos is the third largest cold sterilisation provider globally. It has a highly diversified customer base and delivers a mission-critical, non- discretionary service for the medical, pharmaceutical and cosmetics industries for whom cold sterilis
Slide 23: Joulz
Joulz Essential energy infrastructure equipment and services Joulz is a provider of essential energy infrastructure equipment and services in the Netherlands. It owns and leases medium voltage electricity infrastructure such as transformers, switchgears and cables alongside a metering business which
Slide 24: Oystercatcher
Oystercatcher Oil product storage in Singapore Oystercatcher is the holding company through which the Company holds a 45% interest in Advario Singapore Limited. Advario Singapore is a 1.3 million cubic metre facility focused on storage and blending of refined clean petroleum products for a range of
Slide 25: SRL
SRL Leading lessor of temporary traffic management equipment in the UK SRL is the market leading temporary traffic equipment (“TTE”) rental company in the UK. Its market-leading reputation is supported by its network of 30 depots nationwide, providing a 24/7 365 days a year service on which customer
Slide 26: Valorem
Valorem Diversified renewable energy developer and producer Valorem is a leading independent European renewable energy developer and power producing company. It is one of the largest onshore wind developers in France, having developed over 1GW of capacity over the last 15 years. Performance in the p
Slide 27: DNS:NET
DNS:NET Fibre network owner and developer in Germany DNS:NET is an independent telecommunications provider based in Berlin. It has an existing FTTC network in Berlin and the surrounding areas. In 2020 it moved its focus to rolling out a FTTH network in its home region. It is the largest alternative
Slide 28: Future Biogas
Future Biogas Renewable energy Future Biogas is one of the largest anaerobic digestion (“AD”) plant developers and biogas producers in the UK, currently employing 143 staff and operating 12 AD plants. Biomethane from AD is a ready-to-use and commercially-viable solution for hard to decarbonise indus
Slide 29: Appendix
30 3) Infrastructure plc Appendix
Slide 30: Portfolio summary
Portfolio summary 30 September 2023 (£m) Directors’ Allocated Underlying Directors’ Accrued Foreign valuation 30 foreign portfolio Portfolio valuation 31 Investment Divestment income Value exchange September exchange income in total return 1 Portfolio assets March 2023 in the year in the year moveme
Slide 31: Flexible funding model
Flexible funding model Balance sheet managed to be symmetrical around zero cash / debt Liquidity £463m Cash and undrawn facilities after Attero proceeds Revolving Credit £900m RCF Facility (“RCF”) Maturity: November 2026 Realisations Selective divestment of assets at the right time 31
Slide 32: Flexible funding model
Flexible funding model Balance sheet managed to be symmetrical around zero cash / debt Net cash/(debt) averages 26% 3 year average: £(84)m or (3%) 5 year average: £28m or 1% 20% 11% (8)% (9)% (11)% (14)% Sept-20 Mar-21 Sept-21 Mar-22 Sept-22 Mar-23 Sept-23 Net cash as a % of Portfolio value Note: Po
Slide 33: Sensitivities to total return
Sensitivities to total return Discount rate -1% £376m Discount +1% £(327)m Inflation rates (next two years) - 1% £(44)m Inflation rates (next two years) +1% £43m Inflation rates (full projection periods) -1% £(346)m Inflation rates (full projection periods) +1% £372m Long-term interest rates -1% £22
Slide 34: Capital allocation
Capital allocation Repay RCF Proceeds from future realisations to be used to repay RCF Invest through Modest equity requirements to pursue value accretive capex portfolio through the portfolio 34
Slide 35: Predominantly non-UK portfolio
Predominantly non-UK portfolio (£m) 4% 2% 5% 15% 5% 4 6% UK 13% Oyster- catcher 6% Non-UK 7% 11% (15) 8% 9% 9% FX gain/(loss) before FX gain/(loss) after hedging hedging 35
Slide 36: Discount rate movement
Discount rate movement Approach to calculating discount rate remains consistent 3iN Weighted Average Discount Rate1 12.7% 12.8% 12.2% 12.3% 11.7% 11.6% 11.3% 11.3% 11.3% 11.3% 10.8% 10.8% 10.9% 10.5% 10.0% 9.8% 10.0% FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 HY2
Slide 37: 3i Infrastructure plc
3) Infrastructure plc