International Public Partnerships Ltd · LSE:INPP
International Public Partnerships — FY2023 Earnings Presentation
47 slides from International Public Partnerships's earnings presentation, March 2024
Slide 1: 2023 Annual Results Presentation
2023 ANNUAL RESULTS PRESENTATION IMAGE March 2024 Wakatipu High School, Queenstown, New Zealand
Slide 2: Important Information
IMPORTANT INFORMATION The information in this document has been prepared at the direction of International Public Partnerships Limited (“INPP” or the Potential investors should be aware that any investment in the Company is speculative, involves a high degree of risk, and could "Company") solely for
Slide 3: Overview
OVERVIEW IMAGE Durham Regional Courthouse, Ontario, Canada 3 Photo credit: WZMH Architects
Slide 4: Our Approach
OUR APPROACH OUR PURPOSE IS TO INVEST RESPONSIBLY IN SOCIAL CONSISTENT AND PREDICTABLE RETURNS AND PUBLIC INFRASTRUCTURE THAT DELIVERS ▪ Resilient, inflation-linked cash flows LONG-TERM BENEFITS FOR ALL STAKEHOLDERS. ▪ Focus on growing predictable dividends INPP believes that the financial performan
Slide 5: 2023 Highlights
2023 HIGHLIGHTS FINANCIAL HIGHLIGHTS POSITIVE ENVIRONMENTAL AND SOCIAL CHARACTERISTICS5 152.6p 5.0% >610,000 >2.7m PATIENTS TREATED IN HOMES CAPABLE OF BEING NAV P/SHARE1 DIVIDEND GROWTH2 HEALTHCARE FACILITILIES DEVELOPED AND POWERED BY RENEWABLE ENERGY THROUGH OFTOS 31 December 2022: 159.1p/share 2
Slide 6: Response to Current Market Environment
RESPONSE TO CURRENT MARKET ENVIRONMENT THE COMPANY PREVIOUSLY ANNOUNCED THAT IT WOULD TAKE THE FOLLOWING ACTIONS TO ENSURE IT REMAINS WELL POSITIONED IN THE CURRENT MARKET ENVIRONMENT In addition to the actions already undertaken, the Board will continue to monitor the extent to which these initiati
Slide 7: Financial Performance and Response to Current Market Environment
FINANCIAL PERFORMANCE AND RESPONSE TO CURRENT MARKET ENVIRONMENT IMAGE Moray East OFTO, UK
Slide 8: Valuation Discount Rate Overview
VALUATION DISCOUNT RATE OVERVIEW NAV 1 PER SHARE WEIGHTED AVERAGE RISK CAPITAL DISCOUNT PORTFOLIO DISCOUNT RATE2 RATE RANGE 3 152.6p 8.4% 7.2% - 10.8% 31 December 2022: 159.1p 31 December 2022: 7.5% 31 December 2022: 5.7% - 10.3% Variance: (6.5)p Variance: 90bps Variance: 150bps - 50bps DISCOUNT RAT
Slide 9: NAV Movements
NAV MOVEMENTS INVESTMENT RISK PREMIA FOREIGN EXCHANGE RATES MACROECONOMIC ASSUMPTIONS The impact of the increase in GBP strengthened against all six currencies INPP was exposed Adjustments to short-term inflation and deposit rate assumptions government bond yields was partially to during the year, b
Slide 10: Predictable, Long-Term Revenues
PREDICTABLE, LONG-TERM REVENUES DIVIDEND GROWTH 2023 DIVIDEND GROWTH1 5.0% Dividend increase from FY 2022 2024 TARGET DIVIDEND GROWTH2 3.0% To 8.37 pence per share PROJECTED INVESTMENT RECEIPTS 3 2025 TARGET DIVIDEND GROWTH2 2.5% To 8.58 pence per share DIVIDEND YIELD4 6.1% As at 31 December 2023 1.
Slide 11: Realising Value from the Existing Portfolio
REALISING VALUE FROM THE EXISTING PORTFOLIO AIRBAND OFFSHORE TRANSMISSION OWNERS (‘OFTOS’) ▪ Airband is a leading fibre network operator serving rural and hard-to-reach ▪ OFTOs own the electricity transmission infrastructure connecting offshore areas across the West of England windfarms to the onsho
Slide 12: Repayment of Cash Drawings under the CDF
REPAYMENT OF CASH DRAWINGS UNDER THE CDF REALISATION PROCEEDS HAVE BEEN USED TO REDUCE THE ASSET LEVEL DEBT BENEFITS FROM MITIGATIONS IN DRAWN BALANCE OF THE CDF RELATION TO CHANGES IN BASE RATES1 ▪ INPP has historically made prudent use of its CDF to efficiently acquire new assets ▪ Asset level deb
Slide 13: Other Initiatives to Enhance Total Returns
OTHER INITIATIVES TO ENHANCE TOTAL RETURNS FOCUS ON DISCIPLINED ALLOCATION OF CAPITAL TO OPTIMISE THE PORTFOLIO AND ENHANCE SHAREHOLDER RETURNS TARGET RETURNS SHARE BUYBACKS ▪ Following a reassessment of the Company’s long-term total return target of 7%, ▪ Continued belief that the share price mater
Slide 14: 2023 Portfolio Review
2023 PORTFOLIO REVIEW IMAGE Dudgeon OFTO, UK
Slide 15: 2023 Updates - Regulated Investments
2023 UPDATES - REGULATED INVESTMENTS Cadent ▪ Cadent’s revenues are determined by Ofgem for each price control period. The current price control period ends in March 2026 and Ofgem is now consulting on The UK’s largest gas the next price control period which will run to March 2031 distribution netwo
Slide 16: 2023 Updates - PPPs
2023 UPDATES - PPPs ▪ The Company made its first investment in New Zealand during the year by acquiring three education investments, a correctional facility, and a purpose- Acquisition of five built student accommodation facility operational PPP ▪ Consistent with the Investment Adviser’s approach of
Slide 17: 2023 Updates - Operating Businesses
2023 UPDATES - OPERATING BUSINESSES ▪ Angel Trains continues to perform well with contracted lease revenues Angel Trains unaffected by passenger numbers A rolling stock leasing ▪ Despite disruption from industrial action, passenger numbers have continued to company which owns more improve since the
Slide 18: Responsible Investment Progress
RESPONSIBLE INVESTMENT PROGRESS THE COMPANY CONTINUES TO DEMONSTRATE ITS LEADERSHIP IN RESPONSIBLE INVESTMENT AND MADE GOOD PROGRESS AGAINST ITS ESG POLICY OBJECTIVES DELIVERED IN 2023 SELECTED ESG DISCLOSURES ▪ Post year end, the Company released the third edition of the Sustainability Report, incl
Slide 19: Looking Forward
LOOKING FORWARD IMAGE Northfleet Technology College, Kent, UK Photo credit: Bob Wheeler Photography
Slide 20: Investment Commitments and Future Opportunities
INVESTMENT COMMITMENTS AND FUTURE OPPORTUNITIES EXISTING COMMITMENTS The Company has two long-standing investment commitments to Flinders University and Gold Coast Light Rail – Stage 3 projects which continue to be supported by letters of credit issued under the Company’s CDF. The Company has also p
Slide 21: 2023 Summary and Outlook
2023 SUMMARY AND OUTLOOK RESILIENT PORTFOLIO WITH CONSISTENT RETURNS Strong High-level of Well-covered, growing Strong liquidity performance inflation-linkage dividends position Strong operational and Maintained 0.7% inflation Delivered on forward dividend CDF undrawn since the end financial perform
Slide 22: Appendices
APPENDICES IMAGE Gold Coast Light Rail, Australia Photo credit: TransLink, Department of Transport and Main Roads
Slide 23: Portfolio Overview and Valuation
PORTFOLIO OVERVIEW AND VALUATION IMAGE Angel Trains, UK Photo credit: Angel Trains
Slide 24: Valuation Methodology
VALUATION METHODOLOGY NAV CALCULATION1 ADDITIONAL VALUE DRIVERS ▪ Sum-of-the-parts’ aggregation of the present value of each of the We believe additional value may exist relative to that captured in our valuation Company’s investments plus other balance sheet items process. These items are not captu
Slide 25: Historic NAV Performance
HISTORIC NAV PERFORMANCE INPP NAV – 1 TO 5 YEARS 31 Dec 19 31 Dec 20 31 Dec 21 31 Dec 22 31 Dec 23 NAV1 PER SHARE 150.6p 147.1p 148.2p 159.1p 152.6 180 160 140 120 100 80 60 40 20 0 Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 20 Dec 21 Dec 22
Slide 26: Top 10 Investments
TOP 10 INVESTMENTS % INVESTMENT % INVESTMENT STATUS AT % HOLDING AT FAIR VALUE AT FAIR VALUE AT PRIMARY SDG NAME OF INVESTMENT LOCATION SECTOR 30 JUN 2023 31 DEC 20231 31 DEC 2023 31 DEC 2022 SUPPORTED Gas UK Operational 7% Risk Capital 16.2% 14.5% Distribution UK Waste Water Under Construction 18%
Slide 27: Investments at Fair Value
INVESTMENTS AT FAIR VALUE INVESTMENTS INVESTMENTS AT FAIR VALUE PORTFOLIO RETURN FOREIGN EXCHANGE RATES An increase of £108.1m The rebased investments at fair value The Portfolio Return captures broadly During the year, Sterling strengthened against owing to new investments is presented to allow an
Slide 28: Portfolio Analysis as at 31 December 2023
PORTFOLIO ANALYSIS AS AT 31 DECEMBER 2023 1. The majority of projects and businesses benefit from availability-based or regulated revenues. ‘Other’ includes Family Housing for Service Personnel (‘FHSP’) (4%), Health (4%), Judicial (2%) and Digital (1%) among other assets. 2. Risk Capital includes bo
Slide 29: Revenue Type and Service Providers
REVENUE TYPE AND SERVICE PROVIDERS PORTFOLIO BY REVENUE TYPE1 INPP SERVICE PROVIDERS1 DIGITAL INFRASTRUCTURE OPERATING BUSINESSES2 INFRABEL OTHER ROLLING STOCK4 1% DOWNER & 8% SPOTLESS 9% 10% 7% HUNT MILITARY PPPs WITH COMMUNITIES REVENUE RISK 12% 4% MECHANISMS3 BOUYGUES REGULATED 3% 48% INVESTMENTS
Slide 30: PPP Hand Back - Overview
PPP HAND BACK - OVERVIEW HAND BACK IS COMING INTO SHARPER FOCUS ACROSS THE INDUSTRY INPP HAND BACK DATES SPREAD OVER NEXT 25 YEARS AS SCHEMES START TO BE HANDED BACK TO THE PUBLIC SECTOR INPP PPP hand back dates1 ▪ Authority rights 10% ▪ Survey the property to assess condition relative to hand back
Slide 31: Valuation Sensitivities and Discount Rate Trends
VALUATION SENSITIVITIES AND DISCOUNT RATE TRENDS ESTIMATED IMPACT OF CHANGES IN KEY VARIABLES TO 31 DECEMBER 2023 BASED ON PORTFOLIO INFLATION- NAV OF 152.6 PENCE PER SHARE LINKAGE1 0.7%p.a. (31 December 2022: 0.7% p.a.) HISTORICAL WEIGHTED AVERAGE RISK CAPITAL DISCOUNT RATE 10% 8% 6% 4% 2% 0% Dec-1
Slide 32: High Levels of Protection to Increasing Base Rates
HIGH LEVELS OF PROTECTION TO INCREASING BASE RATES ASSET LEVEL DEBT HEDGED FOR THE FULL TERM (PPPS & OFTOS; 59%) ▪ Asset level debt is non-recourse to the Company ▪ Generally fixed-term, fixed-rate debt ▪ Weighted average asset leverage of c.67%1 ▪ Principal generally amortises to nil over the conce
Slide 33: Macroeconomic Assumptions
MACROECONOMIC ASSUMPTIONS 31 DECEMBER 2023 31 DECEMBER 2022 Inflation rates UK RPI: 4.50% until Dec 2024, RPI: 8.00% until Dec 2023, 3.00% until Dec 2025, 2.75% thereafter 2.75 thereafter1 CPIH: 3.25% until Dec 2024, CPIH: 7.00% until Dec 2023, 2.25% until Dec 2025, 2.00% thereafter 2.00% thereafter
Slide 34: Projected Cash Flows Under a +100bps Inflation Scenario
PROJECTED CASH FLOWS UNDER A +100BPS INFLATION SCENARIO PROJECTED ANNUAL CASH FLOWS AVAILABLE FOR DIVIDENDS (+100BPS INFLATION) 1 (£m) 500 400 300 200 100 0 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 Cash Ava
Slide 35: ESG Reporting Framework
ESG REPORTING FRAMEWORK INPP SEEKS TO PROVIDE ESG KPIS AND DISCLOSURES, WHICH HAVE BEEN DESIGNED TO SUPPORT INVESTOR REPORTING REQUIREMENTS AND TO HIGHLIGHT THE POSITIVE IMPACT OF THE FUND’S APPROACH TO ESG DISCLOSURE FRAMEWORK KPIs AND DISCLOSURES REPORTING CATEGORY POSITIVE Sector-specific disclos
Slide 36: Delivering Against ESG KPIs
DELIVERING AGAINST ESG KPIs THE COMPANY DREW ON ITS KPIS TO HELP MONITOR PROGRESS AGAINST ITS ESG POLICY OBJECTIVES ESG KPI1 Target 31 December 2023 31 December 2022 1. Contribution to Sustainable Development Goals 100% 100% 100% Positive SDG contribution for new investments 2. Investment Adviser ES
Slide 37: Sustainability Indicators
SUSTAINABILITY INDICATORS THE COMPANY HAS COLLECTED DATA IN LINE WITH SFDR These indicators have been collated to enable the Company’s shareholders to meet their own regulatory and voluntary reporting requirements, and to support the Company in better understanding the non-financial impact of its in
Slide 38: Sustainability Indicators
SUSTAINABILITY INDICATORS Sustainability linked Metric Unit 31 December 31 December 2022 Comments indicator 2023 Biodiversity Share of investments in investee companies with sites/operations % 0% 0% No change located in or near to biodiversity-sensitive areas where activities of those investee compa
Slide 39: EU Taxonomy Alignment
EU TAXONOMY ALIGNMENT THE COMPANY HAS UNDERTAKEN AN INTERNAL ASSESSMENT OF EU TAXONOMY ALIGNMENT FOR THE PORTFOLIO ▪ The Company’s investments fall outside the Taxonomy regulation, either by geography or threshold. Subsequently, they do not quantify and disclose the alignment of their activities. Th
Slide 40: Portfolio Information
PORTFOLIO INFORMATION INVESTMENTS MADE DURING THE YEAR TO 31 DECEMBER 2023 EALING BUILDING SCHOOLS FOR THE FUTURE (‘BSF’) Location Investment Date Description UK March 2023 In March 2023, the Company acquired a further 20% investment in Ealing BSF, increasing its holding to 100%. This BSF scheme pro
Slide 41: Portfolio Information Continued
PORTFOLIO INFORMATION CONTINUED PROJECTS UNDER CONSTRUCTION TIDEWAY FLINDERS UNIVERSITY HEALTH AND MEDICAL RESEARCH BUILDING Location Status at 31 December 2023 Location Status at 31 December 2023 UK Scheduled for completion in 20252 Australia Scheduled for completion in 2024 Construction % of inves
Slide 42: Cash Generation and Operating Costs
CASH GENERATION AND OPERATING COSTS Year to Year to SUMMARY OF CASH FLOWS 31 December 2023 31 December 2022 £(m) £(m) Opening cash balance 92.8 56.1 Increase reflects the continued growth and inflation-linkage of the Cash from investments 307.1 205.9 portfolio as well as cash proceeds received in th
Slide 43: About Amber Infrastructure
ABOUT AMBER INFRASTRUCTURE IMAGE Tideway, UK Photo credit: Tideway
Slide 44: Amber's Managed or Advised Funds
AMBER’S MANAGED OR ADVISED FUNDS AMBER MANAGES OR ADVISES EIGHT FUNDS AND OTHER MANAGED ACCOUNTS FUND SIZE OVERVIEW GEOGRAPHY SECTORS VINTAGE INVESTMENTS FTSE 250-listed investment Company Public/social infrastructure £2.9bn1 investing in long-term public infrastructure OECD 2006 144 and low risk re
Slide 45: Amber's Extensive International Track Record and Presence
AMBER’S EXTENSIVE INTERNATIONAL TRACK RECORD AND PRESENCE AMBER HAS OFFICES AND PERSONNEL ACROSS EUROPE, NORTH AMERICA, AUSTRALIA AND NEW ZEALAND EUROPE ~20 Federal German Ministry of Education and Research Headquarters Dublin Courts (Ireland) | Diabolo Rail Link (Belgium) | BeNEX Rail UNITED KINGDO
Slide 46: Contacts
CONTACTS IMAGE Shirley Boys' and Avonside Girls' Schools, New Zealand
Slide 47: Contact Details
CONTACT DETAILS AMBER FUND MANAGEMENT (INVESTMENT ADVISER) FTI CONSULTING (PR & COMMUNICATIONS) Director, INPP: Giles Frost Ed Berry, Mitch Barltrop, Jenny Boyd Telephone: +44 (0)20 7939 0550 Telephone: +44 (0) 7703 330 199 / (0) 7807 296 032 Email: Giles.Frost@amberinfrastructure.com / (0) 7971 005
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