gatwick airport limited · dreamliner, new routes to north america with new york daily from summer...
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RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2014
GATWICK AIRPORT LIMITED
OPERATIONAL AND FINANCIAL PERFORMANCE
2
Record passengers each month with a period total of 22.5m
Airports Commission public consultation for a new runway in the South East commenced 14 November for 3 months
Contracts and Commitments framework operational with over three quarters of passenger volumes under contract
Increased airport efficiencies through ACDM55 leads to a world record number of movements of 906
Increase in business traffic with one in five passengers now travelling for business
+ 8.0%
TRAFFIC GROWTH
£97m
PROFIT FOR THE PERIOD
+ 12.7%
EBITDA GROWTH
£91m
CAPITAL EXPENDITURE
£1,573m
SENIOR NET DEBT
Figures are for the period ended 30 September 2014 except Senior Net Debt and Senior RAR which are shown as at 30 September 2014
HIGHLIGHTS
0.55x
SENIOR RAR
Capital investment focused on delivering improved passenger experience along with operational resilience
OUR AMBITION & STRATEGY, CONSISTENTLY APPLIED
HELP OUR AIRLINES GROW
4
New airlines and routes, long &
short-haul, business & leisure
Vueling increased ATM’s on their Barcelona service by 47% during the period and added a new route to Florence. Further new routes are planned for the summer 2015 season.
Norwegian Air traffic increased in the period by 52.9%, 6 aircraft based at Gatwick including a Dreamliner, new routes to North America with New York daily from Summer 2015
Daily A380 service complemented by 2x777 aircraft daily with additional seat capacity (increase of 25%) to Dubai
Vietnam Airlines offers only direct flight from the UK to Vietnam with new Dreamliner aircraft and increased frequencies from Summer 2015
easyJet had traffic growth of 14.0% in the period following the acquisition of Flybe slots, new business routes to Paris, Strasbourg and Brussels, over 60 based aircraft during summer 2014
New capacity, hand baggage only fares and marketing activity lead to a 6.3% growth, with 10 long haul aircraft now in the LGW fleet. 7 new routes are planned for the summer 2015 season.
75%
80%
85%
90%
95%
100%
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
2014/15
North Terminal Average <5 min South Terminal Average <5 min Target
3.9
4.0
4.1
4.2
4.3
14/15
4.22
50%
60%
70%
80%
90%
100%
08/09 09/10 10/11 11/12 12/13 13/14 14/15
% Measures Passed % Measures Failed
CONSISTENTLY HIGH SERVICE AND SATISFACTION LEVELS
5
4.07 4.08
4.16 Average
Service Quality Remains the Best in the London System
Sustained Passenger Ratings at Near 12/13 Record Levels Security Clearance Continues to Beat Target
4.06
4.19
4.23
Change of ownership
Change of ownership
Significant Improvements Independently Recognised
Source: The Airport Service Quality (ASQ) - an independent survey run under the auspices of Airports Council International (ACI)
0.0
1.0
2.0
3.0
4.0
5.0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
0.0
1.0
2.0
3.0
4.0
5.0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
Benchmarking Q3 2014
Benchmarking Q4 2009
LGW
LGW Avg.
Avg.
08/09 09/10 10/11 11/12 12/13 13/14
Change of ownership
During H1 the Company passed 233 out of 234 SQR measures with a pass rate of 99.6%
08/09 09/10 10/11 11/12 12/13 13/14 14/15
DELIVERING AIRPORT TRANSFORMATION PROGRAMME
6
Major airport transformation programme delivered
• £1.2bn total investment in 6 years of Q5+1
• Over £1bn to be invested during the Commitments period
Projects completed during Q5+1
• New baggage systems for both terminals (£90m)
• South Terminal IDL and Walkthrough Duty Free (£64m)
• Main runway and taxiway resurfacing (£50m)
• South Terminal security (£47m)
• Pier 5 Phase 1 reconfiguration (£45m)
• ACDM55 airfield capacity and operations projects (£8m)
• A380 pier service (£6m)
Investment programme for the 7 year Commitments period commenced: • Pier 1 and Baggage Facility (£180m+)
• North Terminal Development Programme (£100m+)
• Pier 5 phase 2 reconfiguration (£37m)
• Asset Stewardship and Resilience
188.0
201.0
215.0 212.0
123.0
£0
£50
£100
£150
£200
£250
14/15 15/16 16/17 17/18 18/19
Forecast Capital Investment Programme (£939m)
PASSENGER GROWTH DRIVERS
7
…Gatwick’s most limiting resource enhanced by ACDM55 55 runway movements an hour declared and taken up for Summer 2014 compared to 53 in Summer 2013
2014/15 2013/14 Change %
ATMs (k) 145.5 139.0 4.7%
Seats per ATM 179.3 174.9 2.5%
Load factors 86.1% 85.6% 0.5% pts
Passengers (m) 22.5 20.8 8.0%
CONTINUED TREND OF STEADY TRAFFIC GROWTH
8
Recent growth • +8.0% in H1 2014/15 • H1 2014/15 was 22.5m passengers
Latest traffic forecasts • +7.8% forecast growth for 2014/15 • Growing to 38.6m passengers in 2014/15
30
31
32
33
34
35
36
37
38
08/09 09/10 10/11 11/12 12/13 13/14 14/15
Ro
llin
g A
nn
ual
To
tal (m
illio
ns)
Passenger - Rolling Annual Total
GATWICK STANSTED LUTON HEATHROW
TRAFFIC GROWTH IN A COMPETITIVE MARKET
9
Contracts and Commitments frameworks has resulted in increased volumes
Market remains competitive with growth opportunities being distributed across rival airports
Last 12 months
+1.8% Last 12 months
+8.1% Last 12 months
+6.6%
Last 12 months
+6.9%
0%
2%
4%
6%
8%
10%
12%
6 mths to Sep 14 6 mths to Mar 14 6 mths to Sep 13 6 mths to Mar 13
SOLID FINANCIAL PERFORMANCE DELIVERING EBITDA TARGET
10
£m 6 MTHS ENDED
30 SEP 2014 6 MTHS ENDED
30 SEP 2013 CHANGE
Passengers (m) 22.5 20.8 8.0%
Turnover 391.6 360.6 8.6%
Operating costs (excl depreciation and amortisation) (170.0) (163.9) 3.7%
EBITDA (pre-exceptionals) 221.6 196.7 12.7%
Depreciation (59.1) (52.1) 13.4%
EBIT (pre-exceptionals) 162.5 144.6 12.4%
Capital expenditure 90.5 104.8 (13.6)%
Net debt* 1,480.4 1,399.2 5.8%
*Net debt is shown as at 30 September 2014 and 2013
39.6 45.2
39.5 44.4
74.6 84.3
206.9 217.7
2013 2014
Aeronautical Retail Car parking Other income
8.6% INCREASE IN TURNOVER REFLECTING TRAFFIC GROWTH AND HIGHER SPEND PER PASSENGER
11
Turnover analysis
TOTAL £360.6m £391.6m +8.6%
Aeronautical revenues increased by 5.2% due to an increase in airport charges and an 8.0% rise in passengers, offset by discounts under the Commitments framework
13% increase in retail income with net retail income per passenger up by 4.5% to £3.71 • 33 new retail units open for the full 6
months supporting growth • New outlets including Nando’s in the
Food and Beverage sector led to improved performance
Net car parking revenue per passenger increased by 1.4% to £1.49 • New premium products, improved
website and online marketing
+13.0%
+12.4%
+14.1%
+5.2%
19.4 17.6
27.1 28.1
47.9 53.3
69.5 71.0
2013 2014Staff Costs (net) General + Other Expenses
Rates + Utilities Maintenance + IT
CAREFUL CONTROL OF UNDERLYING COSTS
12
Staff costs increase driven by • Second year of 2 year pay deal for all staff
General expenses reflects • Increased R2 marketing and consultancy
costs • Additional car parks costs to drive revenue
per passenger growth
Utilities costs remained largely flat offset by an increase in business rates
Operating costs analysis
TOTAL £163.9m £170.0m +3.7%
Note: operating costs excluding depreciation and amortisation
+11.3%
+3.7%
-9.3%
+2.2%
Maintenance and IT costs reduced due to substantial Capital Investment over Q5 resulting in efficiencies and a reduction in the required maintenance
NET DEBT 31 MARCH 2014 TO 30 SEPTEMBER 2014
13
(194.6)
1.0
82.7 4.0
80.0
1,507.3 1,480.4
1,200.0
1,250.0
1,300.0
1,350.0
1,400.0
1,450.0
1,500.0
1,550.0
1,600.0
1,650.0
Opening Capitalexpenditure
Net interest Cash flow fromops
Restrictedpayments
Other Closing
£m
BANK FACILITIES REFINANCED AND TRANSITION TO TRANSFER RAB
14
FINANCIAL RATIO
12 Months Ended 30 SEPTEMBER
2014
YEAR ENDING 31 MARCH
2015
YEAR ENDING 31 MARCH
2016
YEAR ENDING 31 MARCH
2017
Cash flow (per covenant) £235.8m £227.8m £265.7m £260.4m
Total interest (net) £61.7m £78.3m £82.0m £85.0m
Senior ICR ( trigger <1.50x) 3.82x 2.91x 3.24x 3.06x
Senior Net Debt (per covenant) £1,573.3m £1,708.5m £1,730.9m £1,793.1m
Transfer RAB £2,835.6m £2,864.5m £3,254.9m £3,630.4m
Senior RAR (trigger >0.70x) 0.55x 0.60x 0.53x 0.49x
Net Debt : EBITDA 5.5x 6.0x 5.2x 5.0x
DEBT MATURITY PROFILE REDUCES REFINANCING RISK
STRONG LIQUIDITY POSITION TO FUND ONGOING CAPITAL INVESTMENT PROGRAMME
£1,550m Class A Bonds – Maturities 2024-2041
£300m Bank Facilities – March 2019
Annual cash flow from operations £290m for the 12 months ended 30 September 2014
Undrawn bank commitments £300m as at 30 September 2014
Restricted payment proposed £53m interim dividend
TRANSITION TO TRANSFER RAB
Transfer date 1 April 2014
Relevant Multiple – 11.1
15 15
CONNECTING TO THE FUTURE. FASTER.
Expansion at Gatwick can:
Give passengers the choice they want
Give the economy the growth we need
Be fully privately financed
Be delivered for a fraction of the environmental impacts
16
GATWICK’S PLANS ARE DELIVERABLE
Two world class airports in London helping connect the UK to the world
Gatwick grows
Heathrow improves
• Robust financial performance in line with expectations; reflecting passenger growth, new retail and car parking products delivering increased income per passenger and careful cost management
• Continued success in service quality measures with Gatwick remaining the best performing London airport
• Traffic growth has continued through both incumbent and new airlines and routes allowing the
airport to achieve record number of passengers. Growth is expected to continue throughout 2014/15
• Capital investment programme ongoing; delivering new, improved and innovative facilities
• Contracts and Commitments proposal in operation; tailored offerings to each airline enhancing the customer experience
• Airports Commission – continuing to make Gatwick’s case as the obvious solution to future airport capacity in the UK
CONCLUSION
17
Full details of today’s announcement at: gatwickairport.com/investor
DISCLAIMER
18
This material contains certain tables and other statistical analyses (the “Statistical Information”) which have been prepared in reliance on publicly available information and may be subject to rounding. Numerous assumptions were used in preparing the Statistical Information, which may or may not be reflected herein. Actual events may differ from those assumed and changes to any assumptions may have a material impact on the position or results shown by the Statistical Information. As such, no assurance can be given as to the Statistical Information’s accuracy, appropriateness or completeness in any particular context; nor as to whether the Statistical Information and/or the assumptions upon which it is based reflect present market conditions or future market performance. The Statistical Information should not be construed as either projections or predictions nor should any information herein be relied upon as legal, tax, financial or accounting advice. Gatwick Airport Limited (“GAL”) does not make any representation or warranty as to the accuracy or completeness of the Statistical Information.
These materials contain statements that are not purely historical in nature, but are “forward-looking statements”. These include, among other things, projections, forecasts, estimates of income, yield and return, and future performance targets. These forward-looking statements are based upon certain assumptions, not all of which are stated. Future events are difficult to predict and are beyond GAL’s control. Actual future events may differ from those assumed. All forward-looking statements are based on information available on the date hereof and neither GAL nor any of its affiliates or advisers assumes any duty to update any forward-looking statements. Accordingly, there can be no assurance that estimated returns or projections will be realised, that forward-looking statements will materialise or that actual returns or results will not be materially lower that those presented.
This material should not be construed as an offer or solicitation to buy or sell any securities, or any interest in any securities, and nothing herein should be construed as a recommendation or advice to invest in any securities.
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Any reference to “GAL” will include any of its affiliated associated companies and their respective directors, representatives or employees and/or any persons connected with them.
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