International Public Partnerships Ltd · LSE:INPP
International Public Partnerships — FY2019 Earnings Presentation
43 slides from International Public Partnerships's earnings presentation, April 2020
Slide 1: 2019 Annual Results Presentation
2019 Annual Results Presentation APRIL 2020
Slide 2: Important Information
Important Information The information in this document has been prepared at the direction of International Public contract or commitment whatsoever. This document does not constitute a recommendation Partnerships Limited (“INPP”) solely for use at an information presentation about INPP. This regardi
Slide 3: Covid-19 Update
INTERNATIONAL PUBLIC PARTNERSHIPS Covid-19 Update
Slide 4: Operational update
Operational update Headlines ▪ The Company reaffirms that the operational performance of its investment portfolio continues as expected. There has been no material change since the Market Update issued on 26 March 2020 in lieu of full-year results for the year-ending 31 December 2019 ▪ The release o
Slide 5: Update on Covid-19
Update on Covid-19 Asset Focus ▪ We continue to monitor the performance of all of our assets but note the following: ▪ Tideway (9.2% of NAV1) - we note Tideway’s announcement on 25 March 2020 that, based on the government’s direction, it has now temporarily reduced operational activities and is cont
Slide 6: Overview
INTERNATIONAL PUBLIC PARTNERSHIPS Overview
Slide 7: Our Approach
Our Approach Our aim is to deliver long-term benefits for all stakeholders by investing responsibly in public and social infrastructure CONSISTENT AND DIVERSIFIED STRONG RESPONSIBLE GROWING RETURNS PORTFOLIO INVESTMENT Predictable, Principally regulated or ‘Hands-on’ asset inflation-linked cash flow
Slide 8: FY 2019 Financial Highlights
FY 2019 Financial Highlights NET ASSET VALUE (‘NAV’) 1 PROFIT BEFORE TAX 2019 DIVIDEND GROWTH 2 CASH DIVIDEND COVER3 £2.4bn (Dec 2018: £2.2bn) or £137.8m 2.6% 1.3x 150.6p/share (Dec 2018: 148.1p/share) (FY 2018: £138.1m) (FY 2018: 2.6%) (FY 2018: 1.2x) CORRELATION TO FTSE PORTFOLIO INFLATION ANNUALI
Slide 9: Portfolio Performance and Valuation
Portfolio Performance and Valuation
Slide 10: FY 2019 Performance Overview
FY 2019 Performance Overview STRONG OPERATIONAL VALUE ENHANCING INVESTMENTS REDUCED POLITICAL RISK PERFORMANCE Following the UK General Continued origination of value- Election the political risk High quality investment cash flows enhancing opportunities in line with reduced as emerging policies rec
Slide 11: Confidence in Future Revenues
Confidence in Future Revenues DIVIDEND GROWTH pence per share 8 FY 2019 FY 2020 FY 2021 7.55 Forecast Actual 7.18 7.36 DIVIDEND TARGET TARGET 7.00 6.82 7 6.65 DIVIDEND1 DIVIDEND1 6.30 6.45 6.15 5.85 6.00 6 5 5.25 5.40 5.55 5.70 7.18p 7.36p 7.55p per share per share per share 4 2007 2008 2009 2010 20
Slide 12: Valuation Discount Rate Overview
Valuation Discount Rate Overview NAV1 WEIGHTED AVERAGE WEIGHTED AVERAGE RISK CAPITAL DISCOUNT RISK CAPITAL PORTFOLIO RATE RANGE3 DISCOUNT RATE 2 DISCOUNT RATE £2.4bn or 7.52% 7.02% 5.46% - 10.94% 150.6 p per share VARIANCE 31 DEC 31 DEC 20194 30 JUN 2019 31 DEC 2018 2019 to 31 DEC 2018 NAV1 PER SHAR
Slide 13: Net Asset Valuation
Net Asset Valuation £m 2,650 2,600 191.8 153.9 2,550 2,500 2,450 101.8 138.5 2,425.2 2,400 190.1 2,350 23.4 14.8 2,300 2,250 2,198.7 2,200 2,150 2,100 2,050 NAV at 31 Dec 2018 Capital Raising (post Change in Government Change in Investment Cash Distributed to INPP Change in Foreign Change in NAV Ret
Slide 14: Investments at Fair Value
Investments at Fair Value £m 2,450 37.9 28.2 168.5 14.8 2,382.6 2,400 281.3 159.6 2,350 2,300 2,250 2,219.2 2,200 2,150 2,097.5 2,100 2,050 Investments at Fair Investments Investment Rebased Investments Portfolio Return1 Change in Discount Change in Foreign Change in Investments at Fair Value at 31
Slide 15: 2019 Portfolio Review
INTERNATIONAL PUBLIC PARTNERSHIPS 2019 Portfolio Review
Slide 16: BeNEX German rail business
BeNEX is a German rail business that both leases rolling stock to train operating companies (‘TOCs’) and invests in TOCs KEY INVESTMENT FEATURES Provides INPP with The six TOCs in which Potential for future growth Ownership of a diverse Concession agreements additional government- BeNEX is invested
Slide 17: Cadent UK gas distribution
Cadent is an essential UK gas distribution business with four geographic monopolies, serving c.50% of UK gas customers KEY INVESTMENT FEATURES No exposure to Owned by a highly Inflation-linked revenues Strong and Cadent is piloting the commodity or demand experienced consortium regulated by Ofgem us
Slide 18: Offshore Transmission Projects
Offshore Transmission Projects Offshore transmission assets comprise the onshore and offshore substations and under-sea cables connecting the offshore wind farm with onshore grid network KEY INVESTMENT FEATURES The portfolio connects Predominately operational 1.5GW of renewable Availability-based Re
Slide 19: Tideway super-sewer
Tideway is building the 25km ‘super-sewer’ under the River Thames to create a healthier environment for London KEY INVESTMENT FEATURES Yielding investment Climate-resilient asset through both the Bespoke regulatory Inflation-linked Government support provides constructed with the construction and ar
Slide 20: Market Environment and Opportunities
Market Environment and Opportunities
Slide 21: Growth Drivers Remain Strong – Long Term Return Target Reduced
Growth Drivers Remain Strong – Long Term Return Target Reduced 30-year Government Bond Yields Global Unlisted Infrastructure – Uninvested Capital1 3.50% 250 3.00% 212 200 177 2.50% 159 146 2.00% 150 $bn 106 101 104 1.50% 100 85 66 70 74 1.00% 50 0.50% 0 0.00% Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 1
Slide 22: Pipeline Overview
Pipeline Overview ESTIMATE UK EUROPE NORTH AMERICA AUSTRALIA CAPITAL VALUE1 OFTO ✓ c.£1.0bn Other Regulated ✓ c.£7.0bn Education ✓ ✓ ✓ c.£0.7bn Health ✓ c.£1.0bn Transport ✓ ✓ c.£0.7bn Other ✓ ✓ ✓ ✓ c.£10.0bn ESTIMATED KNOWN COMMITMENTS INVESTMENT2 Digital Infrastructure ✓ £17.2m Offenbach Police He
Slide 23: Outlook
Outlook ROBUST AND CURRENT SUPPORTIVE RESILIENT PORTFOLIO MARKET MACRO ENVIRONMENT Operational performance of high- Continue to monitor the rapidly Lower-for-longer interest rate quality portfolio continues to meet evolving developments around environment supports attractiveness expectations, with p
Slide 24: Appendices
INTERNATIONAL PUBLIC PARTNERSHIPS Appendices
Slide 25: Strong Responsible Investment
Strong Responsible Investment
Slide 26: Responsible Investment Update
Responsible Investment Update In 2019, the Company and its Investment Adviser undertook several initiatives to continue to integrate ESG into core investment activities UN PRI Signatory ‒ The Company’s Investment Adviser became a signatory of the United Nations backed Principles for Responsible Inve
Slide 27: Responsible Investment Objectives
Responsible Investment Objectives DRIVE SUSTAINABLE GROWTH INTEGRATE ESG ADVANCE ENVIRONMENTAL AND SOCIAL PROGRESS INPP integrates ESG Through strong governance, INPP sees ESG drivers as consideration into all aspects of INPP actively works towards an opportunity to find its business. In line with t
Slide 28: Responsible Investment Impact
Responsible Investment Impact The Investment Adviser, on the behalf of the Company, has aligned with the UN SDGs. Infrastructure appears both as an explicit goal and as an implicit means to support other UN SDGs. For each investment sector, the Company has identified which UN SDGs its investments ar
Slide 29: Portfolio Overview and Valuation
Portfolio Overview and Valuation
Slide 30: INPP's Top Investments
INPP’s Top 10 Investments NAME OF STATUS AT % HOLDING AT % INVESTMENT FAIR % INVESTMENT FAIR INVESTMENT LOCATION SECTOR 31 DEC 2019 31 DEC 20191 VALUE AT 31 DEC 2019 VALUE AT 31 DEC 2018 UK Gas Distribution Operational 7% Risk Capital 17.1% 12.4% Under UK Waste Water 16% Risk Capital 9.2% 10.6% Cons
Slide 31: Valuation Methodology
Valuation Methodology NAV CALCULATION 1 ADDITIONAL VALUE DRIVERS ▪ ‘Sum-of-the-parts’ aggregation of the present value of We believe additional value may exist additional to that each of the Company’s investments plus other balance captured in our valuation process. These items are not sheet items c
Slide 32: Portfolio Analysis
Portfolio Analysis 1 LATER STAGE CONSTRUCTION SENIOR DEBT INVESTOR2 11% 10% 32% 44% MODE OF <50% OWNERSHIP 50% 100% INVESTMENT ACQUISITION/ STAKE OWNERSHIP OWNERSHIP TYPE ASSET STATUS 68% 6% 89% 90% OPERATIONAL EARLY STAGE INVESTOR3 50% – 100% RISK CAPITAL OWNERSHIP IRELAND ITALY MILITARY HOUSING OT
Slide 33: Valuation Sensitivities and Discount Rate Trends
Valuation Sensitivities and Discount Rate Trends ESTIMATED IMPACT OF CHANGES IN KEY VARIABLES ON THE 31 DECEMBER 2019 NAV OF PORTFOLIO INFLATION 150.6p PER SHARE LINKAGE1 Discount rates +/-1% -13.8 16.5 Inflation +/- 1% -12.7 15.4 0.82% p.a. Foreign Exchange +/-10% -3.9 3.9 (Dec 2018: 0.82% p.a.) De
Slide 34: Macroeconomic Assumptions
Macroeconomic Assumptions VARIABLE JURISDICTION 31 DEC 2019 31 DEC 2018 UK 2.75% RPI / 2.00% CPIH 2.75% RPI / 2.00% CPIH Australia 2.50% 2.50% INFLATION RATES Europe 2.00% 2.00% Canada 2.00% 2.00% US1 N/A N/A UK 2.00% 2.00% Australia 3.00% 3.00% LONG-TERM Europe 2.00% 2.00% DEPOSIT RATES2 Canada 2.5
Slide 35: Diversified Portfolio and Partners
Diversified Portfolio and Partners PORTFOLIO BY INVESTMENT TYPE 1 INPP SERVICE PROVIDERS 1 OTHER - ANGEL TRAINS, UK BSF 2 INFRABEL NV VAN BENEX AND NDIF PUBLIEK RECHT PFI DEBT 8% 9% AGGREGATOR DEBT 1% 8% 9% 2% 8% UK 'CLASSIC' PFI DOWNER & OFTO DEBT 18% 7% SPOTLESS OPERATING 7% 8% BUSINESSES UK NHS L
Slide 36: Portfolio Information
Portfolio Information INVESTMENTS DURING YEAR TO 31 DECEMBER 2019 INVESTMENT LOCATION OPERATIONAL STATUS AMOUNT INVESTMENT DATE BSF LUTON PROJECT UK Operational £0.2m 17 January 2019 MIDLANDS BATCH UK Operational £12.4m 30 April 2019 BSF WOLVERHAMPTON PROJECTS 1 & 2 UK Operational £1.8m 7 June 2019
Slide 37: Cash Generation and Operating Costs
Cash Generation and Operating Costs SUMMARY CASH FLOW 31 DEC 2019 (£m) 31 DEC 2018 (£m) NOTES Opening cash balance 84.7 33.9 Cash from investments 159.6 138.8 Increase reflects further growth and maturity of the portfolio Corporate costs (for ongoing charges (25.1) (24.5) ratio) Other corporate cost
Slide 38: Gearing and Investment Life
Gearing and Investment Life TIDEWAY ASSET LEVEL DEBT CADENT 9% OFTOS ▪ Asset level debt is non-recourse to the Company 14% 17% PPP & OFTOS ▪ Generally fixed-term, fixed-rate debt 11% ▪ Principal generally amortised over the life of the project SENIOR DEBT ▪ Structure is intended to minimise risk 8%
Slide 39: About Amber Infrastructure
INTERNATIONAL PUBLIC PARTNERSHIPS About Amber Infrastructure
Slide 40: Specialist Fund Manager
Specialist Fund Manager AMBER FUND FOCUS HIGHLIGHTS PARTNERS SIZE 13-year track record; Long-term public c.£2.7bn FTSE 250-listed Listed investors infrastructure assets market cap1 investment company First dedicated Digital HM Treasury Digital infrastructure Infrastructure fund in £400m target2 Priv
Slide 41: Amber's footprint
Amber’s footprint Amber has offices and personnel in London, Munich, Brussels, Edinburgh, Australia and the United States Darwin Edinburgh Brussels San Munich Francisco New York Sydney London Melbourne NORTH AMERICA UNITED KINGDOM EUROPE AUSTRALIA ▪ US Military Housing (Various, US) ▪ Cadent Gas Dis
Slide 42: Contacts
INTERNATIONAL PUBLIC PARTNERSHIPS Contacts
Slide 43: Contact Details
Contact Details AMBER FUND MANAGEMENT FTI CONSULTING (PR & COMMUNICATIONS) Director, INPP: Giles Frost Senior Director: Ed Berry Telephone: +44 (0)20 7939 0550 Telephone: +44 (0)20 3727 1046 Email: Giles.Frost@amberinfrastructure.com Email: Edward.Berry@fticonsulting.com Investment Director: Chris M
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