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Vinci SA — VINCI Airports — Investor Day (November 2014)
68 slides from Vinci SA's investor day presentation, Nov 14, 2014
Slide 1: VINCI Airports Investor Day
VINCI AIRPORTS INVESTOR DAY Lisbon, 14 November 2014
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking objectives and statements about VINCI’s and VINCI Airport’s financial situations, operating results, business activities and expansion strategies. These objectives and statements are based on assumptions that are dependent upon significant risk
Slide 3: Today's speakers
VINCI Airports Investor Day Today’s speakers Nicolas NOTEBAERT Chairman and CEO Jorge PONCE DE LEAO VINCI Airports Chairman ANA Pierre COPPEY Christian LABEYRIE Chairman and CEO Executive Vice-President VINCI Concessions & CFO VINCI Thierry LIGONNIERE COO ANA Benoit TROCHU Business Development Dir.
Slide 4: Welcome & Introduction
1 Welcome & Introduction
Slide 5: VINCI Airports is now a more significant contributor to VINCI's concession activities
VINCI Airports is now a more significant contributor to VINCI’s concession activities Revenue EBITDA EBIT Capital employed 2% 1% 12% 8% 8% 14% 86% 92% 92% 85% Total: €5.3 bn €3.5 bn €2.2 bn €26.9 Total VINCI €0.6 bn bn €0.3 bn €0.2 bn €3.7 bn Airports: VINCI Airports 2014 revenue: VINCI Airports VIN
Slide 6: Presentation of VINCI Airports
2 Presentation of VINCI Airports
Slide 7: VINCI Airports is a major international player
VINCI Airports is a major international player 10 23 airports airports in 10 France > 46 million passengers in 2014(e) airports in 3 airports in > €700m revenue in 2014(e) Portugal Cambodia 100 regular airlines 450 destinations worldwide 8% stake in > 5,000 employees 7
Slide 8: VINCI Airports is at the heart of VINCI's strategy
VINCI Airports is at the heart of VINCI’s strategy VINCI Airports: #1 strategic focus in the concession business ! Take advantage of worldwide air traffic growth (~2x GDP growth) ! Contribute to VINCI’s international expansion ! Extract strong operational leverage ! Diversify revenue streams ! Extend
Slide 9: VINCI Airports' investor / operator business model
VINCI Airports’ investor / operator business model Investor / Operator ! Seek out greenfield and brownfield ! Provide optimum management opportunities ! Develop all business streams ! Strong integration capability " Airport marketing, route expansion, non- æronautical activities ! Financial capacity t
Slide 10: VINCI Airports' value creation proposition
VINCI Airports’ value creation proposition ! Develop traffic Increase revenue ! Maximize revenue per pax ! Cost-efficient management Optimize opex and capex ! Engineering know-how 10
Slide 11: Main concessions maturities: up to 2065
Main concessions maturities: up to 2065 End of concession / public service delegation (PSD) contracts: Cambodia Airports ANA 2014 2040 2063 2016 2029 Aéroports du Grand Ouest (Nantes, Saint-Nazaire) 8 regional airports in 2065 France Long term contracts visibility and stability 11
Slide 12: A diversified portfolio of activities
A diversified portfolio of activities Profitability profile VINCI Airports 2014(e) revenue breakdown 2014(e) EBITDA margin by activity EBITDA margin 60% Cambodian Airports Nantes Airport 9% Ground ANA (ex-GH) Handling (Portugal) 7% VINCI Airports PSD contracts ANA excl. GH Nantes Airport 2014(e) EBI
Slide 13: France: a network of regional airports
France: a network of 10 regional airports 2 types of assets with different 10* contractual frameworks and financial profiles airports Concession: Aéroports du Grand Ouest - Nantes/ Saint-Nazaire 6.0 mpax ! Nantes in 2014(e) ! Rennes 4.2 mpax in 2014(e) ! Clermont " Traffic growth: ~ 6% in 2014(e) ! Greno
Slide 14: Cambodia: a success story
Cambodia: a success story 3 Strong development, self-financed airports " Dynamic emerging markets Strong growth in traffic 5.6 mpax in 2014(e) ! Phnom Penh Passenger 6000 5,600 traffic (kpax) ! Siem Reap ! Sihanoukville 4000 2,800 x2 in 5 years 64,000 ATMs* in 2014(e) 2000 2009 2010 2011 2012 2013 2014(e
Slide 15: ANA: flagship platform with high potential for development
ANA: flagship platform with high potential for development 10 High quality assets including a major European hub airports 35 mpax " Strong traffic dynamics in 2014(e) ! Lisbon International traffic > 80% of total ! Porto " Sound financial track record ! Faro 2009-2014(e) EBITDA CAGR: 10% ! Beja 300,000 !
Slide 16: Diversity of revenue streams
Diversity of revenue streams VINCI Airports revenue breakdown by activity (2013): 1 Aviation ! Most of revenues are regulated: passenger & landing fees Security/PRM 4 Drivers: passenger traffic, ATMs*, regulatory framework 13% 2 Non-Aviation 1 Aviation 45% ! Retail, real estate, car parks, car rental,
Slide 17: Dynamic traffic trend
Dynamic traffic trend VINCI Airports passenger traffic (in mpax): +7% +8% >46 40 43 Pax traffic growth: (yoy at 31 Oct. 2014) VINCI Airports: +9.1% ! Portugal: +9.4% ! Cambodia: +13.1% 2012* 2013* 2014(e) ! France: +4.2% * Pro forma with ANA on a full-year basis 17
Slide 18: VINCI Airports Key financials
VINCI Airports Key financials 2013 In €m 2014(e) Pro forma * Passenger traffic (in mpax) 42.9 > 46 Revenue 629 > 700 Portugal 440 > 500 Cambodia 91 ~ 100 France 99 > 100 EBITDA 265 EBITDA margin 42% > 45% EBIT 170 EBIT margin 27% > 30% Capital employed (end of year) 3,684 o/w ANA: 2,942 * 2013 pro for
Slide 19: Focus on ANA
3 Focus on ANA
Slide 20: 10 airports in 5 regions, a 50 year concession
ANA 10 airports in 5 regions 35 million passengers (2014(e)) Strong traffic growth A 50 year concession 100% owned by VINCI Airports 20
Slide 21: Dynamic traffic
Dynamic traffic Airport traffic: Portugal is the 3rd fastest growing country in Europe 15.1% Airport traffic growth in main European countries At the end of September 2014 vs. end of September 2013 (YTD) 11.5% 9.4% 4.6% 4.8% 4.1% 4.2% 3.2% 3.4% 2.6% 2.1% France Germany Norway Finland Italy UK Spain Swed
Slide 22: Main traffic growth levers
Main traffic growth levers 1 2 3 Develop Lisbon potential as the Develop short Benefit from leading hub between city-break increasing share Europe and South concept for of VFR* America/Africa European tourists ! The leading hub towards ! Destination affordability ! One third of the Brazil (25% of the
Slide 23: Dynamic traffic as of October 2014
Dynamic traffic as of October 2014 Lisbon is growing at 13% over 10 months ANA 2014(e) full year traffic expected +9% +9.4% 30.6 28.0 2013 2014(e) Lisbon: targeting +13.4% 15.5 18m pax over full 32.0 m 35 m " 13.7 year 2014 +8.2% 5.9 5.5 PASSENGE +5.0% +9% 5.6 +3.4% 5.8 RS 2.1 2.2 1.1 1.1 284,000 300,
Slide 24: A diversified traffic
A diversified traffic Diversified geographical exposure Balanced mix between airlines Other Portugal Other 16% 24% 31% TAP Spain 37% 37% 8% 3% Brazil 4% 5% UK SATA 18% 5% Germany 9% Ryanair 5% 15% France easyJet 15% 13% 12% 12% At end Sept. 2014 24
Slide 25: A dynamic aviation marketing
A dynamic aviation marketing 74 routes opened in 2014 / 42 in 2013 2 new operational bases New international routes opened by TAP: ! Lisbon / Bogota RYANAIR in LISBON (end of 2014) ! Lisbon / Manaus ! Lisbon / Panama ! 3 aircraft based ! > 1 mpax expected (coming from based and non-based aircraft) B
Slide 26: Lisbon Airport
LISBON AIRPORT Traffic breakdown by geographical area (9M 2014) Yoy growth: ! +13.3% Share of total Lisbon traffic North America Europe ! +18.3% ! +14.0% 3.3% 79.4% Africa ! +7.8% Middle East South America ! +32.0% 6.7% ! +7.5% 1.3% 9.3% 26
Slide 27: ANA regulatory framework
ANA regulatory framework A transparent and incentivizing regulatory framework Concession maturity 50 years Price cap applied to æronautical tariffs on an inflation-linked Aeronautical tariff increases formula with no reference to a regulated asset base Not regulated Non-æronautical revenues Non-æronaut
Slide 28: Aviation tariffs increased according to regulation
Aviation tariffs increased according to regulation Aviation tariff increases by airport: June 2013 Dec. 2013 April 2014 Lisbon +3.5% +3.6% +2.5% Porto +1.7% - +2.7% Faro +2.6% - +3.0% ! Aviation tariffs increased every year based on an inflation-linked formula 28
Slide 29: Structure of revenues
Structure of revenues Security & PRM* Real 11% estate 14% Retail Misc. 58% Non- Aviation Aviation 4% 49% 26% Car rental 9% Car Parks Handling 15% 14% In % of ANA 2014(e) revenue * PRM: Persons with Reduced Mobility 29
Slide 30: Cost structure
Cost structure Effective and efficient cost management % of Nature % of 2013 rev. 2013 PF Revenue 2014 Evolution Surveillance and security 5.5% 1 Operating costs 24% ! Stable Subcontracting 3.9% Utilities 3.8% Maintenance & repair 3.5% Specialised work 2.8% 2 Staff costs 24% ! Slight increase Other oper
Slide 31: Limited capex over the next years
Limited capex over the next 5 years 2013-2017 capex plan approved by the grantor 5-year capex plan: approx. €50m per year ! Terminal extension, ! Terminal 1: mostly in 2015 & 2016 improvements of Faro ! Pavements of runway passengers flows, 25% and aircraft parking check-in area and Lisbon stands imm
Slide 32: New Lisbon Airport (NLA)
New Lisbon Airport (NLA) Trigger for discussions on NLA with grantor: Traffic = 22m pax Adjusted 4-year period regulatory for discussion framework for with grantor 2014 NLA* Initial estimate: 11 years * In case of disagreement on new NLA framework: indemnification of initial investment 32
Slide 33: ANA: outlook update
ANA: outlook update What we forecasted back in Sept. 2013 Where we stand today +2% to +3% Traffic CAGR 2012-2014: 7.2% 2012-2022 CAGR Non-æronautical > 5% CAGR 2012-2014: 8.0% revenue 2012-2022 CAGR EBITDA margin ~50% in 2018 2 - 3 years ahead of plan c. €50m / year Forecast confirmed Capex 2013-2022 C
Slide 34: Airline Marketing
Airline Marketing 4,
Slide 35: VINCI Airports develops the full range of airlines on all its airports
VINCI Airports develops the full range of airlines on all the airports of its network In 2013 ! > 100 schedule airlines ! > 25 LCCs ! > 50 charter airlines ! > 200 tour operators / import & export ! > 250 business aviation airlines In 2014 (YTD) ! > 100 new routes; 74 for ANA ! 13 new airlines; 9 fo
Slide 36: VINCI Airports has proven expertise in aviation marketing
VINCI Airports has proven expertise in aviation marketing Methodology Good understanding of market drivers Relationships Strong with airlines and Tour Operators Development Traffic and network 36
Slide 37: Airport marketing: PPP+1
Airport marketing: ”PPP+1” Product to attract airlines and Tour Operators generally not enough Price key in some markets Promotion important, especially for LCCs Place constrained de facto 37
Slide 38: Methodology: good understanding of market drivers
Methodology: good understanding of market drivers Air travel demand drivers analysis and Airport market research strategic positioning ! Economy ! Airport statistics ! Population & propensity to fly ! Passenger profiles ! Outbound and inbound* tourism ! Alternative airports and modes of travel ! Diasp
Slide 39: Airports connected to Portugal
Ryanair Clermont-Ferrand: new route to Porto Analysis of the Portuguese community in France Portuguese nationals by region: 187 – 1,263 1,264 – Airports connected to Portugal 2,405 VINCI Airports 2,406 – 5,305 5,306 – 43,455 39
Slide 40: Close relationships with airlines and Tour Operators
Close relationships with airlines and Tour Operators (TOs) Sometimes we play the role of broker: ! We gather TOs demands to reduce the airline risk ! Recent example of success: Vueling Barcelona – Funchal for summer 2015 We organize fame trips: ! We work with tourism authorities, airlines and TOs !
Slide 41: Turkish Airlines in Porto: new route to Istanbul
Turkish Airlines in Porto: new route to Istanbul EU Rank Airport Pax 2012 TK PGS 1 London 70,038,857 ! Porto airport was one of the biggest 2 Paris CDG 61,556,202 EU airports to which Turkish Airlines 3 Frankfurt 57,520,001 was not flying 4 Amsterdam 51,035,590 28 Lisbon 15,301,236 37 Gran Canaria 9,
Slide 42: Capacity to boost traffic
Capacity to boost traffic VINCI Airports outperforms natural traffic growth 7.2% 2,0% 7.0% 11.5% 1.8% 4.4% Heathrow 1.6% 1.6% Frankfurt ADP 6% Bangkok Suvarnabhu Cambodia Airports ADP Nante Mulhouse -0.2% mi s 5.7% 0.2% 3.7% 10.4% 2.4% Lyon AENA 3.6% Kuala Lumpur ADR Bordeaux ANA 5.6% - 2% Toulouse
Slide 43: Ability to do long-term forecasts
Ability to do long-term forecasts Key to business development Drivers ! Analysis of demand drivers: GDP, tourism, population, ticket prices… ! Bottom-up forecast with airlines ! Mathematical forecast ! Analysis of infrastructure constraints (Air Traffic Control) and external constraints (access to tou
Slide 44: Non-Aviation Marketing
5 Non-Aviation Marketing
Slide 45: The growing importance of Non-Aeronautical
The growing importance of Non-Aeronautical It’s vital ! The traffic will mature ! The pressure on æronautical tariffs is increasing ! The retail and commercial activities need to be our growth driver It’s dynamic ! Passengers are the best customers ! Airports are good locations It’s profitable ! High re
Slide 46: Unlocking Non-Aeronautical Value
Unlocking Non-Aeronautical Value 4 steps to growth 1 INVESTIGATION & DISCOVERY 2 STRATEGY DEVELOPMENT 3 QUICK-WINS 0 – 18 MONTHS 4 MID / LONG TERM 0 – 5 YEARS 46
Slide 47: Investigation / Discovery: Lisbon Airport
Investigation / Discovery Lisbon Airport Food Duty Premium Passenger flows court Free offer bypass product Downstairs Security & Check-in Central Plaza Oversized areas for undersized reducing dwell times – NOT central processing 47
Slide 48: Strong impact on revenue / pax
Strong impact on revenue / pax Retail revenue / pax 9M 2013 9M 2014 % change Lisbon 2.29 2.59 +13.5% Porto 1.15 1.40 +21.7% Faro 1.55 1.87 +20.6% ANA 1.77 2.06 +16.4% 48
Slide 49: Mid / Long Term Strategy: Lisbon
Mid / Long Term Strategy Revision of Lisbon: +2,500 m² of retail space 100% of Pax Central Plaza Enhanced Increased Allows check- see 100% of becomes truly concession High yield security in expansion our offer central yields capacity 49
Slide 50: Mid / Long Term Strategy: Airport development
Mid / Long Term Strategy Airport development PORTO FARO FUNCHAL ! Increase in Duty Free ! General revamp of ! New walkthrough mainshop area with the terminal Duty Free store new walkthrough ! Increase and review ! Increase operational format of commercial areas efficiencies in ! Retail offer ! Increase
Slide 51: Mid / Long Term Strategy: Phnom Penh terminal extension
Mid / Long Term Strategy Phnom Penh terminal extension ! 80% increase in terminal area ! 100% increase in departures capacity ! 100% increase in commercial areas 51
Slide 52: Capex Management
6 Capex Management
Slide 53: Smart capex
Smart capex VINCI Airports policy to optimize investments 1 1. Long term CAPEX planning 2 2. Defining initial requirements: functional programming 33. Efficient monitoring 4 4. Life-cycle costs and project value One goal: deliver cost-effective projects 53
Slide 54: Long term capex planning
Long term capex planning Planning investments creates value ! Anticipate the long run (masterplan)… ! …but remain flexible to adapt to actual evolution ! 5-year plan is the right medium term planning horizon ! Economical justification of investment projects 54
Slide 55: Long term capex planning: investment objectives
Long term capex planning Investment objectives: ! Allowing traffic growth ! Answering to operational needs ! Increasing commercial efficiency ! Supplying new B2B and B2C services ! Complying with evolving regulations and standards 55
Slide 56: Life cycle cost
Life cycle cost OPTIMIZING OPEX and REPEX requires: Breakdown of the life cycle cost of an airport: ! Smart definition of requirements: better balance CAPEX/ OPEX and major OPEX savings Opex ! Infrastructure value management 55% Initial Capex 30% ! Feedback from extensive airport perimeter and histor
Slide 57: Construction projects: example of Cambodia
Construction projects Example of Cambodia 2011 2012 2013 2014 2015 2016 Functional Design phase Works Phased entry program into service Contract negotiation ! New areas: 25,000 sqm ! Refurbished areas: 21,500 sqm ! Total EPC contract cost: USD 90m ! On schedule, ! On budget 57
Slide 58: Smart Capex
Smart Capex ! Cost efficient facilities ! Value creation projects ! Optimized life cycle-cost ! Local responsibility and central monitoring 58
Slide 59: What's next?
7 What’s next?
Slide 60: VINCI Airports development approach (1/2)
VINCI Airports development approach (1/2) VINCI Airports is looking for: Long term Value creation Strong position maturities potential in governance …in a wide array of geographies 60
Slide 61: VINCI Airports development approach (2/2)
VINCI Airports development approach (2/2) VINCI Airports is able to position on different types of projects, all over the world from small platforms to large hub airports Growth Seeds Optimization Greenfield ! Strong growth ! Transformation of ! Leverage with ! Large projects expectations public asset
Slide 62: VINCI Airports' strengths
VINCI Airports’ strengths ! Commitment to develop traffic through relations with airlines and strong market understanding ! Development of non-aviation activities ! Capex optimization ! Cost control ! Financial strength of VINCI ! Synergies with other VINCI businesses ! Teams integration 62
Slide 63: Appendices
Appendices Additional financial information VINCI Airports platforms
Slide 64: VINCI Airports Key figures
VINCI Airports Key figures In € millions 2013 2013 in VINCI’s accounts pro forma* Revenue 315 629 EBITDA 102 265 % of revenue 33% 42% EBIT 65 170 % of revenue 21% 27% Net profit Group share 151** 178** Capital employed (end-of-year) 3,684 3,684 * Provisional (purchase accounting under course) ** Incl
Slide 65: ANA key figures
ANA key figures* In € millions 2013 Pro forma Revenue 440 EBITDA 200 % of revenue 45% EBIT 142 % of revenue 32% Net profit 40 * Contribution to VINCI’s accounts on a full-year basis – provisional data (purchase accounting under course) EBITDA: Cash flow from operations before tax and financing costs EB
Slide 66: ANA – reconciliation between reported data and adjusted data
ANA – reconciliation between reported data and adjusted data In € millions IFRIC 12 2013 2013 VINCI 2013 impacts on excl. IFRIC 12 reported adjustments Pro forma* provisions impacts Revenue 456 456 (17) 440 EBITDA 169 +60 229 (29) 200 % of revenue 37% 50% 45% EBIT 111 +60 171 (29) 142 % of revenue 2
Slide 67: 2013 key figures by country
2013 key figures by country In € millions ANA France Cambodia pro forma* (12 months) Revenue 440 99 91 EBITDA** 200 28 55 % of revenue 45% 28% 60% * Contribution to VINCI’s accounts – provisional data (purchase accounting under course) ** Excluding central overheads and development costs EBITDA: Cas
Slide 68: VINCI Airports platforms
VINCI Airports platforms End of VINCI Traffic Consoli- Country Name Type of contract concession share risk dation* Cambodia Phnom Penh Concession 2013: Siem Reap Concession 2040 70 % Yes FC 5,077 KPAX Sihanoukville Concession France** Clermont-Ferrand Auvergne PSD (2013: 426 KPAX) 2026 100 % Yes FC Qu