Stobart Group

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Investor presentation

Stobart Group LimitedOctober 2020

Trading update – key points

Overall cash flows are trading within the range of management expectations. Stobart Group had £119m of undrawn bank facilities

available at 31 August 2020.

London Southend Airport benefits from uninterrupted activity through its global logistics operations. The

immediate priority is to manage costs to reflect demand.

Stobart Energy is protecting cash generation for the long-term and

has taken the strategic decision to ensure certainty of supply over the

winter period.

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TWO DIVISIONS

Stobart Group has two core operating divisions; Aviation

and Energy.

MONETISING STOBART ENERGY

Stobart Energy is a mature and cash generative biomass fuel supply business. Stobart Group intends to monetise it

in 18-24 months.

FOCUSED ON AVIATION

Stobart Group is focused on developing London Southend

Airport – London’s next big airport.

SELLING NON-CORE ASSETS

A portfolio of infrastructure assets and other investments will be sold within 36 months.

A focused strategyStobart Group

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Focusing on aviation

• Since 2014, Low Cost Carriers have added 9.2 million seats to the London market (+32%), or the equivalent of 41 daily aircraft (+27%).

• Low cost carriers are expected to recover faster than long haul and leisure travel is expected to recover faster than business travel.

• Low cost carriers will be focused on cost management.

London Southend Airport is focused on short haul low cost carrier flying with mainly leisure passengers and can offer airlines a capital efficient base of operation.

Why focus on London aviation?

City Population (2018)

London 14.3m

Paris 12.2m

Madrid 6.6m

Barcelona 5.5m

Berlin 5.3m

Ruhr 5.1m

Rome 4.4m

Milan 4.3m

Manchester 3.7m

Athens 3.6m

City Total visitors (2019)

Bangkok 22.8m

Paris 19.1m

London 19.1m

Dubai 15.9m

Singapore 14.7m

Kuala Lumpar 13.8m

New York 13.6m

Source: Eurostat Metropolitan Region 2018

Source: GDCI Global Report 2019

Source: CAA data

Source: Deloitte State of the Consumer Tracker

London is the most populated city in europe

As a result, London passenger traffic is forecasted to recover and maintain its continuous growth over the last 25+ years

UK customers have expressed an increased intent for international leisure flying since late May

London is one of the most visited places in the world

(m)

60

80

100

120

140

160

180

2025202020152010200520001995

0%

5%

10%

15%

20%

25%

30%

55+34–5418–3425 Jul11 Jul27 Jun13 Jun30 May16 May

c. 5ppt improvement in international Significant age effect

Domestic flights International flights Cruise

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Ingredients in place to develop London’s best airport

CATCHMENT AREA

London Southend Airport has a catchment area of 8m +

people across East London and the South East.

AIRLINE RELATIONSHIPS

London Southend Airport’s airlines include Ryanair and

Wizz Air.

PASSENGER EXPERIENCE

London’s best in class passenger experience with room to grow in the post-

COVID-19 world.

REVENUE SOURCES

Multiple sources of income including an owned train station, car parking, hotel and logistics operation.

AWARD WINNINGBEST LONDON AIRPORT(SIX TIMES)Which?

BEST AIRPORT IN THE UK UNDER 3M PASSENGERS(FOUR TIMES)AOA Awards

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90mins

90mins

M25

M25

M23

M25

M11

M1

M1

A1(M)

M40

M4

M3

M11

A127A12

A13

J29

Ipswich

Felixtowe

Harwich

Colchester

BishopStortford

Chelmsford

Tilbury

Sheerness

Canterbury

Ramsgate

Margate

Cambridge

NewmarketBury St.

Edmonds

Thretford

Diss

Wimbledon

Brighton

Watford

Enfield

Reading

Stratford

Bond St.

Liverpool St.

Luton

St. Pancras50mins

Stansted

Liverpool St.54mins

London Southend

Liverpool St.51mins

Heathrow

Paddington15mins

Gatwick

Victoria30mins

Significant demand from London and the South East

*Between Liverpool Street and Stratford.

catchment population.8.2M

direct train from Liverpool St.

Direct connections to eight tube lines*

51MINS

by road and only 30 mins to

the M25.90MINS

of passengers come from

London.

OVER60%

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Secured the investment to deliver enhanced passenger experience in a post-COVID-19 world

ENHANCED PASSENGER EXPERIENCE

1. Face masks

2. Bio shields

3. Automated bag drop

4. Next-gen security scanners

5. Click and collect outlets

6. Short queue departure gates

7. Extended departure terminal

Stobart Group has secured capital investment to develop an enhanced passenger experience for post-COVID-19 travel.

• It intends to expand the security area using existing unutilised space.

• It will ultimately establish a new low cost arrivals terminal freeing up further space for an extended retail space in the departure lounge.

• The airport can already offer 17m2 of space per passenger and has installed hand sanitizing stations every 20 paces.

SPACIOUS 17m2 of space per passenger

CLEANcontinues cleaning teams and hand sanitizer every 20 paces

FASTUK’s joint fastest security

queues to avoid bottlenecks

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3

4

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7New arrivals terminal

Giraffe STOP WHSmith

Costa

World Duty Free

Bourgee

Costa

The Navigator

Existing unused space

Reduce bottlenecks to maintain quick passenger flow.

Check in

Security

Departure gates

Departure gates

Route through terminal

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3

4

56

7

Train station

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STRATEGIES ALIGNED

London Southend Airport aligns with airlines’ growth

strategies.

LOWER COST OF OPERATION

Airlines can generate similar yields to other London

airports but at a lower cost of operation.

Airline partnerships with Ryanair and Wizz Air

VALUABLE LONDON MARKET

The airport’s location expands the airlines’ catchment to almost

complete coverage of valuable London market.

SECURE LONDON SLOTS

The airport provides the best opportunity to secure London

slots as the UK recovers from the pandemic over the

coming years.

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Airport revenue sources

HOTEL

DROP OFF CAR PARK

LONG STAY CAR PARK

CAR PARKS

TRAIN STATION

TERMINAL F&B

NON AERO REVENUES

FUEL SALE

GROUND HANDLING

LOGISTICS OPERATION

JET CENTRE

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Stobart Aviation Services is focused on differentiating its service offering away from the large incumbents,

Swissport and Menzies.

It employs cost-plus model to provide the right services, at the right time at the right cost.

It currently serves five airports and has a number of important airline customers, and management believe

it is well placed to increase market share.

Expecting return on investment to be high and provide a strong shareholder return.

Stobart Aviation Services

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Monetising Stobart Energy

It has invested £25 million to establish six strategically located waste wood processing centres across the UK.

Stobart Energy has contracts to supply nearly 2 million tonnes of fuel to dedicated biomass plants on a base price per tonne basis. These provide mature de-risked RPI linked cash flows supported by ROCs to 2037.

These processing centres provide c100,000 tonnes of storage capacity and the ability to produce over 750,000

tonnes of biomass fuel.

Stobart Energy has a 350 strong cus-tomer base that supplies waste wood to these processing sites, and charges gate

fees to its suppliers.

Stobart Energy is the UK’s number one supplier of biomass fuel

It then processes that waste wood to generate c1.7MT of biomass fuel. This

fuel is supplied to dedicated biomass plants utilising its fleet of 135 vehicles.

These biomass plants use the fuel to generate renewable energy equivalent to the annual domestic electricity needs

of 2% of the UK population.

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Stobart Group intends to monetise the business within 18-24 months and utilise the proceeds to fund the next stage of growth at London Southend Airport.

...TO UK LOW CARBON ECONOMY

Stobart Energy reduced the UK’s CO2 emissions by about

480,000 tonnes in 2019.

STRATEGIC SIGNIFICANCE...

Stobart Energy processes around 20% of the UK’s annual waste wood

(1.2MT out of 5.6MT).

A UNIQUE OFFERING WITH HIGH BARRIERS TO ENTRY

A high margin business with reliable cash generation and limited CAPEX

requirements.

Significance to low carbon economy makes it attractive to infrastructure investors

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Infrastructure and investment portfolio

Disposing of non core assets within the next 36 months

STOBART BRAND

Sold for £10m.

EDDIE STOBART

11% of Eddie Stobart Logistics equity –

dispose at the right time.

STOBART AIR

Actively seeking a strategic partner.

STOBART RAIL & CIVILS

Sold to Bavaria Holdings.

CARLISLE LAKE DISTRICT AIRPORT

Reviewing development options.

WIDNES

Industrial and commercial

development land - to be disposed of within

36 months.

POLLINGTON

Industrial and commercial

development land - to be disposed of within

36 months.

MERSEY BIOENERGY PLANT

40% stake in energy plant - to be disposed of within 36 months.

RUNCORN

Port / Industrial and commercial

development land - to be disposed of within

36 months.

CHELFORD

Residential development land - to be disposed of within

36 months.

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Financial summary

Key performance indicators

202020192018

25.8

39.4

56.8

+44.1%

202020192018

5.84.9

8.6

+73.8%

202020192018

1.13

1.50

2.14

+43.1%

202020192018

4.974.33

3.17

+36.6%

202020192018

54.865.1

76.3

+17.2%

202020192018

12.1

19.2

24.2

+25.9%

202020192018

0.89

1.341.50

+11.5%

202020192018

0.9

1.4

1.7

+24.1%

202020192018

105.4

146.9170.2

+15.9%

202020192018

14.2

10.8

16.0

+48.2%

AVIATION ENERGY GROUP

Revenue(£m)

Underlying EBITDA(£m)

Revenue(£m)

Underlying EBITDA(£m)

Revenue(£m)

Passenger numbers at LSA(Million)

EBITDA per passenger(£)

Tonnes supplied(Million)

Contributed MW output(Million)

Underlying EBITDA(£m)

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Potential new airline partner agreements. Over next six months (and ongoing).

Sale of further infrastructure assets.

Increase in pax numbers to 2.5m and invest in airport expansion.

Key milestones

Increased waste wood supply.

Over next six months.

Confirmation of (positive) Summer flying schedule.

Three - six months.

Sale of Stobart Energy. 15 – 21 months’ time.

Increase in pax numbers to 3.25m.

2020 2021 2022 2023

Resolution/sale of Stobart Air.

Potential contract

extension with global logistics

customer.

Sale of infrastructure

assets – Widnes, Widnes land.

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Stobart Energy and all non-core assets to be monetised

within the next three years

Focused on developing London Southend Airport

Clear plan for growth over the next three years

Immediate focus is to actively engage with parties interested in acquiring the Group’s stake

in Stobart Air.

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Appendix

£m 2020

2019 Movement

Aviation 56.8 39.4 44.1%

Energy 76.3 65.1 17.2%

Two main operating divisions 133.1 104.5 27.4%

Rail & Civils 41.5 52.3 (20.8%)

Investments and Non-Strategic Infrastructure 4.9 4.9 1.3%

Central revenue and eliminations (9.3) (14.8) 37.2%

Revenue 170.2 146.9 15.9%

DIVISIONAL REVENUE SUMMARY ADJUSTED UNDERLYING EBITDA BY DIVISION

£m 2020 2019 Movement

Aviation 8.6 4.9 73.8%

Energy 24.2 19.2 25.9%

Two main operating divisions 32.8 24.1 35.7%

Rail & Civils (7.1) (4.8) (47.6%)

Investments and Non-Strategic Infrastructure (2.1) (0.6) (216.5%)

Central costs and eliminations (7.6) (7.9) 4.2%

Adjusted underlying EBITDA 16.0 10.8 48.2%

Revenue and adjusted underlying EBITDA performance

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Bridge from adjusted underlying EBITDA to loss after tax for 2020

Cash (£27.3m)

Non-cash (£138.3m)

1. LSA (£9.3m)

2. Energy (£9.2m)

3. CLDA (£0.6m)

New business andcontract set up

costs

Adjustedunderlying

EBITDA

Depreciation Net finance costincluding FX and

SWAPS

Impairment ofloan notes

Underlying lossbefore tax

Litigationand claims

Amortisation Impairments Non-underlyingshare of associatesand joint ventures

Tax Loss after tax

16.0

(22.7)

(7.2)

(9.3)

(9.2)

(0.6)

0.9

(1.9) (7.5)

(101.9)

(9.1) 8.4

(2.7)

(2.8)

(19.4)

(149.6)

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Net debt

NET DEBT MOVEMENT

Cash used indiscontinuedoperations

including cashdisposed ofon sale of subsidiary

28 Feb2019

01 Mar2019post

IFRS 16

New HPon assets

Operatingcash flow

Cashpurchaseof assets

Dividendspaid

Netinterest

paid

Investmentin and

loans tojoint

venture

Proceedsfrom thesale ofassets

29 Feb2020

OtherIFRS 16

83.1

161.3

235.5

78.2

19.8

16.2

14.6

11.1

7.25.4

4.8 2.5(7.4)

£m 2020

2019

RCF 74.8 57.6

Asset financing 42.4 40.0

Exchangeable bond 51.7 –

Cash (9.8) (14.4)

Net debt (excluding IFRS 16) 159.0 83.1

IFRS 16 obligations 76.4 –

Net debt 235.5 83.1

NET DEBT

Note: IFRS 16 leases transitioned on 1 March 2019 with an opening liability of £78m.

• Subsequent to year-end the RCF facility is now fully drawn at £80m.

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