Auckland International Airport Limited · NZX:AIA
Auckland International Airport — Non-Deal Roadshow (December 2014)
44 slides from Auckland International Airport's roadshow presentation, December 2014
Slide 1: Investor Presentation December 2014
Investor Presentation Auckland International Airport Limited December 2014 For our future 1
Slide 2: Adrian Littlewood and Simon Robertson
Adrian Littlewood Chief Executive Simon Robertson Chief Financial Officer
Slide 3: Investment
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Slide 4: International Gateway to New Zealand
2014 Investor Presentation International Gateway to New Zealand • New Zealand is an island nation and arrival by road and rail is impossible. Sea transport is unattractive for most overseas travellers. • Auckland Airport is the only commercial airport in New Zealand’s largest city. • Approximately 2
Slide 5: International Gateway to New Zealand
2014 Investor Presentation International Gateway to New Zealand • Highest proportion of international passengers (53%) of all Australasian airports and third highest number of international passengers. • 18 international airlines connecting to 32 international destinations. • Proven passenger growth
Slide 6: Aeronautical Regulatory Environment
2014 Investor Presentation Aeronautical Regulatory Environment • Dual-till regime under the Commerce Act 1986 (NZ) with information disclosure regulation. • Aeronautical is subject to disclosure regulation. • Non-aeronautical till faces open market competitive forces. • Airport Authorities Act 1966
Slide 7: Positioned in high growth Asia-Pacific
2014 Investor Presentation Positioned in high growth Asia-Pacific Grow travel markets • Unique approach to driving airline capacity. • AIA does not discount landing charges but rather offers cooperative marketing campaigns to help drive traffic on new routes as well as wider marketing initiatives su
Slide 8: High growth Asia-Pacific also highest retail earners
2014 Investor Presentation High growth Asia-Pacific also highest retail earners Retail Spend Rates By Nationality • Chinese passengers (NZ resident + non-resident) represent 7% of all traffic, yet 14% of international terminal retail spend. • Non-resident Chinese spend rate is +166% above the overal
Slide 9: The Retail Equation
2014 Investor Presentation The Retail Equation Passengers x (Penetration (%) x Conversion (%)) x ATV ($) = Sales ($) x Yield (%) = Revenue ($) # of pax # of Average entering a purchases Transaction store made Value Passenger Spend Rate (PSR) Income Per Passenger (IPP) 9
Slide 10: Car Parking Business
2014 Investor Presentation Car Parking Business • Dynamic, direct to consumer, online sales channel provides high car park occupancy to maximise car park revenue • As at December 2014, the Airport had 9,924 parking spaces. • In FY15 Auckland Airport moved some airline and other staff car parking fro
Slide 11: Significant Land Holdings
2014 Investor Presentation Significant Land Holdings Auckland Airport boundary Auckland CBD boundary (Harbour bounded by motorways) • Auckland Airport owns approximately 3,707 acres (1,500 hectares) of freehold land. • Land value NZ$2,650 million as at 30 June 2014 (excluding Investment Property), c
Slide 12: Property Business
2014 Investor Presentation Property Business • Developments comprise all types of land use except Historic WALT permanent residential and heavy industrial. The 5.0 Auckland Airport business district (“The District”) has 4.8 4.6 been divided into seven precincts reflecting logical 4.4 groupings of in
Slide 13: Hotels
2014 Investor Presentation Hotels • Auckland Airport completed its first Hotel in May 2011. • The Novotel is a 263 room (4+ star) hotel. • The hotel was a joint venture with Tainui Holdings and Accor Hospitality with Auckland Airport holding a 20% stake. • Auckland Airport also collects ground renta
Slide 14: Associates – Queenstown Airport
2014 Investor Presentation Associates – Queenstown Airport • Queenstown Airport is the gateway airport to New Zealand’s adventure capital, a major tourist destination and the fourth largest international airport in New Zealand. It is the fastest growing airport in New Zealand and is pivotal to the t
Slide 15: Associates – North Queensland Airports
2014 Investor Presentation Associates – North Queensland Airports • Cairns Airport is the gateway airport to Tropical North Queensland, a major Australian leisure destination. Two world heritage listed attractions, the Great Barrier Reef and Wet Tropics Rainforests are accessed from Cairns • The air
Slide 16: Current Position
2014 Investor Presentation Current Position Register Composition Market Capitalisation $4,702m * Cost of Total Returns to Share Price Share Price Capital Cancelled Total Shareholder Opening Closing Dividend Return Shares Return Return Shareholders $ $ cps cps cps $ % 1 July 2010 to 30 June 2011 1.87
Slide 17: Strategy for our Future
Strategy for our Future
Slide 18: Going forward – Faster, Higher, Stronger
2014 Investor Presentation Going forward – Faster, Higher, Stronger Adopt an ambitious and Strengthen and extend our Continue to improve our Build on our strong innovative approach to help retail, transport and performance by increasing foundations for long-term New Zealand to sustainably accommodat
Slide 19: Grow Travel Markets
2014 Investor Presentation Grow Travel Markets • NZ has an opportunity to capture a larger share of the fast growing Asia-Pacific aviation market. • Aligning industry on opportunities is a key part of our “Ambition 2025: High Opportunity Target”. Refer: www.ambition2025.co.nz • We are working with T
Slide 20: Grow Travel Markets
2014 Investor Presentation Grow Travel Markets Select announcements during the 2014 financial year • Emirates started flying a third A380 to Auckland in October 2013, servicing the airline’s Dubai-Brisbane-Auckland route. • China Southern Airlines commenced flying New Zealand’s first commercial B787
Slide 21: Grow Travel Markets
2014 Investor Presentation Grow Travel Markets Subsequent Announcements • China Eastern announced four flights per week starting December increasing the seasonal service to daily through January 2015. This will add an extra 47,000 seats on the Auckland to Shanghai route. • China Southern has up gaug
Slide 22: Strengthen our consumer business: Retail
2014 Investor Presentation Strengthen our consumer business: Retail • Continued to introduce new retail stores throughout 2014 and 2015 into incremental space additions • Duty free retender currently in progress has shown a strong interest from a number of parties. We are focused on delivering a wid
Slide 23: Concept design for international passenger area
2014 Investor Presentation Concept design for international passenger area 23
Slide 24: Strengthen our consumer business: Hotel
2014 Investor Presentation Strengthen our consumer business: Hotel • Auckland Airport has 100% ownership of the Ibis Budget 2+ star hotel and 20% ownership in 4+ star Novotel hotel joint venture situated next to the international terminal in Auckland. • Occupancy continued to grow in FY14: 86.5% f
Slide 25: Responding to challenges in retail
2014 Annual Results Responding to challenges in retail • Strong programme to lift future retail performance: • Continue temporary/pop-up retail programme to test new brands and categories. • Launch new speciality and F&B concessions/refurbishments: e.g. 3WiseMen, Shaky Isles at domestic; Juicy Detai
Slide 26: Strengthen our consumer business: Car parking
2014 Investor Presentation Strengthen our consumer business: Car parking • Expansion of higher value parking products while expanding assets with low cost “at grade” capacity increases. • Valet product launched at domestic terminal to extend the premium car parking offer. Expansion of the valet serv
Slide 27: Be fast, efficient & effective: Operational
2014 Investor Presentation Be fast, efficient & effective: Operational • Successfully managing airport operations requires pro- active collaboration, data sharing and real-time information. • We are investing in systems to leverage more from collaboration with Airport Operating Systems (AOS) upgrade
Slide 28: Be fast, efficient & effective: Financial
2014 Investor Presentation Be fast, efficient & effective: Financial • We are monitoring cost drivers throughout the business to improve our EBITDA margin. The focus on cost efficiency led to a 1.1% drop in operating costs per passenger throughout FY2014. • We are carefully managing our capital prog
Slide 29: Invest for Future Growth: The potential of the Business District
2014 Investor Presentation Invest for Future Growth: The potential of the Business District 29
Slide 30: Invest for Future Growth: Building more rent roll
2014 Investor Presentation Invest for Future Growth: Building more rent roll • The Auckland property market is recovering after a subdued 5 years and we are starting to see more active enquiry and demand. • FY2014 tenancy additions included Harrison Grierson, Specsavers, BASF and Meridian Energy. •
Slide 31: Invest for Future Growth: Building more rent roll
2014 Investor Presentation Invest for Future Growth: Building more rent roll • Developments completed during FY14 included a new 130,000 square feet (12,000 square metre) warehouse facility for DHL, additional facilities completed for Panalpina and Hobbs. A new 135,000 square foot (12,500 square met
Slide 32: Invest for Future Growth: Airport investments
2014 Investor Presentation Invest for Future Growth: Airport investments • Queenstown Airport international passenger growth outstanding and outlook strong with safety case for after dark flights established. Flights anticipated from mid-2016. • NQA financial growth continued in FY14. Positive outlo
Slide 33: Our future – 30-year vision launched
2014 Investor Presentation Invest for Future Growth: Our future – 30-year vision launched • Bold 30-year vision developed with international experts (www.airportofthefuture.co.nz). Very positive stakeholder feedback. • Vision is based on a combined domestic and international terminal as well as an e
Slide 34: Financial performance
performance Financial FY14 annual results Simon Robertson, chief financial officer
Slide 35: Great financial outcome
2014 Investor Presentation Great financial outcome Auckland International Airport Group 30 Jun 2014 30 June 2013 30 June 2012 30 June 2011 30 June 2010 (NZ$’000) Revenue 475,814 448,458 426,813 397,723 363,113 Expenses 120,646 117,624 107,524 99,494 86,802 Earnings before interest expense, taxation,
Slide 36: Healthy underlying trend
2014 Investor Presentation Healthy underlying trend Underlying profit 2014 2013 Reported Underlying Reported Underlying earnings Adjustments earnings earnings Adjustments earnings $000 $000 $000 $000 $000 $000 EBITDAFI 355,168 - 355,168 330,834 - 330,834 Share of profit from associates 11,632 (2,938
Slide 37: Broad international passenger growth
2014 Investor Presentation Broad international passenger growth Auckland Airport passenger movements 12 months to 12 months to Change 30 June 2014 30 June 2013 % International arrivals 3,847,132 3,664,376 5.0 International departures 3,840,704 3,652,948 5.1 International passengers excluding transit
Slide 38: Broad international passenger growth
2014 Investor Presentation Broad international passenger growth 38
Slide 39: Larger domestic aircraft + more international frequency
2014 Investor Presentation Larger domestic aircraft + more international frequency Aircraft movements and MCTOW 12 months to 12 months to Change 30 June 2014 30 June 2013 % Aircraft movements International departures 45,809 44,315 3.4 Domestic aircraft movements 107,454 110,832 (3.0) Total aircraft
Slide 40: International passenger growth leads to revenue growth
2014 Investor Presentation International passenger growth leads to revenue growth Revenue 12 months to 12 months to Change 30 June 2014 30 June 2013 % $m $m Airfield income 87.607 81.573 7.4 Passenger services charges (PSC) 131.552 120.242 9.4 Retail income 127.073 124.308 2.2 Car park income 42.815
Slide 41: Cost base maintained
2014 Investor Presentation Cost base maintained Expenses 12 months to 12 months to Change 30 June 2014 30 June 2013 % $m $m Staff 42.502 39.953 6.4 Asset management, maintenance and airport operations 40.310 39.607 1.8 Rates and insurance 10.081 9.707 3.9 Marketing and promotions 13.750 14.138 (2.7)
Slide 42: Guidance
2014 Investor Presentation Guidance • We are confident in Auckland Airport’s ability to grow revenues and EBITDAFI in the 2015 financial year. • Allowing for the increased interest costs from the $454 million capital return we expect underlying net profit after tax (excluding any fair value changes
Slide 43: Questions
Questions 43
Slide 44: 44
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Auckland International Airport — Non-Deal Roadshow (December 2014) on 6ix