International Public Partnerships Ltd · LSE:INPP
International Public Partnerships — H1 2021 Earnings Presentation
44 slides from International Public Partnerships's earnings presentation, September 2021
Slide 1: 2021 Interim Results Presentation
2021 Interim Results Presentation September 2021
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: Overview
INTERNATIONAL PUBLIC PARTNERSHIPS Overview
Slide 4: Our Approach
Our Approach Our aim continues to be to deliver long-term benefits for all stakeholders by investing responsibly in public and social infrastructure CONSISTENT AND DIVERSIFIED RESPONSIBLE PREDICTABLE RETURNS PORTFOLIO INVESTMENT Resilient, inflation-linked cash Investments are spread by both ‘Hands-
Slide 5: HY 2021 Performance and Operational Overview
HY 2021 Performance and Operational Overview Continued resilient financial and operational performance from the Company’s investment portfolio DIVIDEND ▪ Maintained dividend cover at 1.3x1 and continued delivery of dividend growth with two-year dividend guidance reaffirmed GROWTH ▪ The financial and
Slide 6: Portfolio Performance and Valuation
Portfolio Performance and Valuation
Slide 7: H1 2021 Financial Highlights
H1 2021 Financial Highlights NET ASSET VALUE (‘NAV’) 1 DIVIDEND GROWTH 2 CASH DIVIDEND PROFIT BEFORE TAX COVER3 £2.4bn (Dec 2020: £2.4bn) or 2.7% 1.3x £27.2m 145.1p/share (Dec 2020: 147.1p/share) (H1 2020: 2.5%) (H1 2020: 1.3x) (H1 2020: £35.4m) FIVE-YEAR CORRELATION4 PORTFOLIO INFLATION ANNUALISED
Slide 8: Confidence in Long-Term Revenues from Investment Portfolio
Confidence in Long-Term Revenues from Investment Portfolio DIVIDEND GROWTH pence per share 7.74 HY 2021 FY 2021 FY 2022 Forecast Actual 7.36 7.55 DIVIDEND TARGET TARGET 7.18 7.00 DIVIDEND1 DIVIDEND1 6.82 6.65 6.30 6.45 6.15 5.85 6.00 5.25 5.40 5.55 5.70 3.78p 7.55p 7.74p per share per share per shar
Slide 9: Valuation Discount Rate Overview
Valuation Discount Rate Overview NAV1 WEIGHTED AVERAGE WEIGHTED AVERAGE RISK CAPITAL DISCOUNT RISK CAPITAL PORTFOLIO RATE RANGE4 DISCOUNT RATE 2 DISCOUNT RATE 3 £2.4bn or 7.29% 6.81% 4.68% - 10.87% 145.1 p per share 30 JUN 2021 31 DEC 2020 VARIANCE NAV1 PER SHARE 145.1p 147.1p (2.0p) WEIGHTED AVERAG
Slide 10: Net Asset Valuation
Net Asset Valuation £m 2,500 2,450 148.2 55.2 2,400 2,384.4 101.0 19.5 33.0 32.6 2,356.5 2,350 2,300 2,250 2,200 2,150 2,100 2,050 NAV at 31 Dec 2020 Change in Government Change in Investment Cash Distributed to INPP Change in Foreign Change in Macroeconomic NAV Return 1 NAV at 30 Jun 2021 Bond Yiel
Slide 11: 2021 Portfolio Review
INTERNATIONAL PUBLI' Cc PARTNERSHIPS 2021 Portfolio Review
Slide 12: Cadent is an essential UK gas distribution business
Cadent is an essential UK gas distribution business with four geographic monopolies, serving c.50% of UK gas customers No exposure to Owned by a highly Inflation-linked revenues Cadent is piloting the use commodity or demand experienced consortium Strong and experienced regulated by Ofgem using of h
Slide 13: Tideway is building a 25km super-sewer under the Thames
Tideway is building a 25km ‘super-sewer’ under the River Thames to create a healthier environment for London Bespoke regulatory Government support Climate-resilient asset Long-term investment arrangement with Inflation-linked revenues provides protection in a constructed with the with a 120-year des
Slide 14: Diabolo is a strategic rail transportation asset
Diabolo is a strategic rail transportation asset linking Brussels Airport with Belgium’s national rail network Covid has led to lower Revenues linked to than projected passenger 100%-owned with influence Long duration asset with Inflation-linked over project operations, Board passenger numbers have
Slide 15: Angel Trains is the UK's largest rolling stock leasing company
Angel Trains is the UK’s largest rolling stock leasing company owning more than 4,000 vehicles Experienced Revenues derived from Diversified asset base Enhanced governance Over 20 years of leasing trains to TOCs, supporting adaptability to management team with a rights with board operating history s
Slide 16: Other Asset Management Updates
Other Asset Management Updates OFTOs ▪ INPP’s offshore transmission investments have performed excellently over the period. Revenues have been largely unaffected by the Covid-19 pandemic as assets have continued to remain available and meet performance standards ▪ Ofgem has begun consulting stakehol
Slide 17: Other Asset Management Updates
Other Asset Management Updates Availability-based PPPs Digital Infrastructure ▪ PPP projects account for 33% of the Company’s portfolio (by ▪ In July 2017, the Company committed to invest up to £45m in investment fair value) UK digital infrastructure alongside the UK Government, through NDIF ▪ Notwi
Slide 18: Committed to Responsible Investment
Committed to Responsible Investment The Company continues to demonstrate its leadership in responsible investment and made good progress against its three responsible investment policy objectives during the period H1 2021 progress Drive Sustainable Growth Integrate ESG Advance Environmental and Soci
Slide 19: Sustainability Report
Sustainability Report In 2021, the Company released its inaugural Sustainability Report. This report provides a detailed overview of the Company’s approach to sustainability and ESG integration The Sustainability Report is available here. 19 2021 INTERIM RESULTS PRESENTATION
Slide 20: Looking Forward
INTERNATIONAL PUBLI' Cc PARTNERSHIPS Looking Forward
Slide 21: Pipeline Overview
Pipeline Overview COMMITTED PIPELINE KNOWN COMMITMENTS LOCATION INVESTMENT TENOR ESTIMATED INVESTMENT 1 ESTIMATED TIMING Diabolo Belgium c.26 years c.£12m Contingent on passenger numbers Angel Trains UK Operational business c.£98m Q3 2021 Rampion and East Anglia One OFTOs UK c.20-21 years Up to £130
Slide 22: Summary and Outlook
Summary and Outlook ▪ Investment portfolio is expected to continue to be resilient RESILIENT ▪ We will continue to actively manage and mitigate risk PORTFOLIO ▪ Strong inflation linkage continues to provide protection to projected returns in the event of a higher inflation environment ▪ ESG consider
Slide 23: Appendices
INTERNATIONAL PUBLI' Cc PARTNERSHIPS Appendices
Slide 24: Responsible Investment
INTERNATIONAL PUBLI' Cc PARTNERSHIPS Responsible Investment
Slide 25: Responsible Investment Impact
Responsible Investment Impact The Company supports the 2030 Agenda for Sustainable Development adopted by the UN Member States in 2015. Alignment with the SDGs is a key part of the Company’s approach to ESG integration Through the effective management of ESG risks and potential negative impacts, the
Slide 26: Investment Integration
Investment Integration In line with the Principles for Responsible Investment, INPP identifies and integrates ESG factors into all aspects of investment, development and management decision making and analysis ▪ INPP does this by identifying and managing the issues that are most relevant to our inve
Slide 27: Contribution to the Sustainable Development Goals
Contribution to the Sustainable Development Goals The Company supports the 2030 Agenda for Sustainable Development adopted by the UN Member States in 2015. Alignment with the SDGs is a key part of the Company’s approach to ESG integration. The Company contributes towards the SDGs in two main ways: t
Slide 28: Portfolio Overview and Valuation
Portfolio Overview and Valuation
Slide 29: 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 30: INPP's Top 10 Investments
INPP’s Top 10 Investments % INVESTMENT % INVESTMENT STATUS AT % HOLDING AT PRIMARY SDG NAME OF INVESTMENT LOCATION SECTOR FAIR VALUE AT FAIR VALUE AT 30 JUN 2021 30 JUN 20211 SUPPORTED 30 JUN 2021 31 DEC 2020 Gas UK Operational 7% Risk Capital 16.5% 16.5% Distribution UK Waste Water Under Constructi
Slide 31: Investments at Fair Value
Investments at Fair Value £m 2,500 2,450 2,400 47.2 22.3 87.1 22.5 2,345.4 33.0 2,350 48.0 2,320.3 2,300 2,280.6 2,250 2,200 2,150 2,100 Investments at Fair Investments Investment Rebased Investments Portfolio Return1 Change in Discount Change in Foreign Change in Investments at Fair Value at 31 Dec
Slide 32: Portfolio Analysis
Portfolio Analysis 1 SENIOR DEBT CONSTRUCTION 11% LATER STAGE 9% INVESTOR3 32% 44% MODE OF <50% OWNERSHIP 49% 100% INVESTMENT ACQUISITION/ OWNERSHIP STAKE OWNERSHIP TYPE ASSET STATUS 68% 91% 7% 89% EARLY OPERATIONAL STAGE INVESTOR2 RISK CAPITAL 50% – 100% OWNERSHIP IRELAND ITALY OTHER4 CANADA 1%<1%
Slide 33: Revenue type and service providers
Revenue type and service providers PORTFOLIO BY REVENUE TYPE 1 INPP SERVICE PROVIDERS 1 DIGITAL OTHER - ANGEL TRAINS, INFRASTRUCTURE 3 DOWNER & BENEX AND NDIF OTHER ROLLING SPOTLESS 4 STOCK 3% 8% 7% 9% INFRABEL NV PPPs WITH VAN PUBLIEK RECHT REVENUE RISK 3 7% MECHANISMS 10% 1% 5% MITIE2 REGULATED 21
Slide 34: Valuation Sensitivities and Discount Rate Trends
Valuation Sensitivities and Discount Rate Trends ESTIMATED IMPACT OF CHANGES IN KEY VARIABLES ON 30 JUNE 2021 NAV OF 145.1p PER SHARE PORTFOLIO INFLATION LINKAGE1 Discount rates +/-1% -13.2 15.8 Inflation +/- 1% Foreign Exchange +/-10% -12.2 -3.8 3.8 14.2 0.75% p.a. (Dec 2020: 0.78% p.a.) Deposit ra
Slide 35: 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) 400 350 300 250 200 150 100 50 0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 20
Slide 36: Macroeconomic Assumptions
Macroeconomic Assumptions ASSUMPTION JURISDICTION 30 JUN 2021 31 DEC 2020 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 1.00% 1.00% Australia 2.00% 2.00% LONG-TERM Europe 0.50% 0.50% DEPOSIT RATES2 Canada 1.50%
Slide 37: Portfolio Information
Portfolio Information INVESTMENTS MADE DURING THE SIX-MONTHS TO 30 JUNE 2021 PRIMARY SDG INVESTMENT LOCATION OPERATIONAL STATUS AMOUNT INVESTMENT DATE SUPPORTED OFFENBACH POLICE CENTRE GERMANY Operational £8.1m1 June 2021 TOOB UK Operational £14.2m April 2021 TOTAL £22.3m INVESTMENTS MADE AFTER PERI
Slide 38: Cash Generation and Operating Costs
Cash Generation and Operating Costs 30 JUN 2021 30 JUN 2020 SUMMARY CASH FLOW (£m) (£m) NOTES Opening cash balance 44.3 45.6 Cash from investments 87.1 82.9 Increase reflects the further growth and maturity of the portfolio Corporate costs (for ongoing charges ratio) (14.7) (14.6) Other corporate co
Slide 39: Gearing and Investment Life
Gearing and Investment Life TIDEWAY ASSET LEVEL DEBT CADENT 9% ▪ Asset level debt is non-recourse to the Company OFTOS 17% PPP & OFTOS 21% ▪ Generally fixed-term, fixed-rate debt ▪ Principal generally amortised over the life of the project ▪ Structure is intended to minimise risk 9% REGULATED INVEST
Slide 40: About Amber Infrastructure
INTERNATIONAL PUBLIC PARTNERSHIPS About Amber Infrastructure
Slide 41: Specialist fund manager
Specialist fund manager Amber manages or advises seven co-mingled funds and other managed accounts. Of these, seven are closed-ended unlisted structures AMBER FUND FOCUS HIGHLIGHTS PARTNERS SIZE 15-year track record; Long-term public £2.7bn FTSE 250-listed investment Listed investors infrastructure
Slide 42: 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 and Australia Helsinki UNITED KINGDOM EUROPE ▪ Cadent Gas Distribution ▪ Federal German Ministry of Education ▪ Thames Tideway Tunnel and Research Headquarters ▪ Angel Trains ▪ Dubl
Slide 43: Contacts
INTERNATIONAL PUBLI' Cc PARTNERSHIPS Contacts
Slide 44: 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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