3i Infrastructure PLC · LSE:3IN
3i Infrastructure — H1 2021 Earnings Presentation
31 slides from 3i Infrastructure's earnings presentation, Nov 11, 2020
Slide 1: Results for the half year to 30 September 2020
Results for the half year to 30 September 2020 11 November 2020
Slide 2: Important information
Important information The sole purpose of this information-only presentation (“Presentation”) is to provide information on a The distribution of this Presentation in certain jurisdictions may be restricted by law. Persons into whose non-reliance basis about 3i Infrastructure plc and its subsidiaries
Slide 3: Consistently strong performance against our objectives
Consistently strong performance against our objectives Our strategy Our objectives To maintain a balanced portfolio of To provide shareholders with: infrastructure investments delivering an • A total return of 8% to 10% per attractive mix of income yield and capital annum, to be achieved over the ap
Slide 4: Generating value in the current market
Generating value in the current market Asset intensive, resilient Return companies Mid Market Economic Asset bases that are hard to Infrastructure replicate Large Core Providing essential services Infrastructure Established market positions Operational PPPs Good visibility of future cash Our investm
Slide 5: Resilient to the challenges of Covid-19
Resilient to the challenges of Covid-19 3.8% Total return on opening NAV Resilient portfolio underpinning growth in net asset value 259.4p NAV per share Good level of income and non-income cash to support the £48m dividend Total income and non-income cash Strong liquidity position to make new invest
Slide 6: Strong return from a diversified portfolio
Strong return from a diversified portfolio for the half year to 30 September 2020 Total portfolio return 5.5% Infinis 2.5% Tampnet 6.3% Joulz 16.0% Ionisos 8.2% TCR (5.6)% ESVAGT 1.9% Oystercatcher 4.5% Valorem 20.5% Attero (2.9)% Projects 10.6% India Fund 18.5% 6
Slide 7: A well-diversified, balanced portfolio
A well-diversified, balanced portfolio Utilities Portfolio value by sector India Fund Transportation / 4% Projects Infinis 2% logistics Attero 4% 9% Communications 6% 16% 12% 40% Valorem Healthcare 6% 13% Natural Resources 22% Tampnet / energy Oystercatcher 9% 20 assets 13% Social infrastructure £1.
Slide 8: Engaged asset management approach to positively influence our companies
Engaged asset management approach to positively influence our companies 1 Strengthen portfolio company management teams 2 Invest and develop companies to support a sustainable future 3 Growing our platform businesses through acquisitions 8
Slide 9: Infinis
Infinis Generator of electricity • Performed ahead of expectations in the period • Mostly unaffected by the pandemic and continues to benefit from the inflation-linked UK Renewables Obligation Certificate regime until 2027 • Thanks to its near-term hedging strategy, low power prices have had limited
Slide 10: Tampnet
Tampnet Offshore telecom network • Agreed to acquire BP’s fibre assets in the Gulf of Mexico, securing ownership of a key piece of subsea infrastructure and enabling Tampnet to replicate its successful North Sea business model • The acquisition is expected to complete in 2021 and is value accretive
Slide 11: Joulz
Joulz Essential energy infrastructure equipment and services • Performed ahead of our investment case again for the year to date with limited impact from Covid-19 • Carve-out from Stedin and the integration of the new electric vehicle charging solutions business acquired in March are progressing wel
Slide 12: Ionisos
Ionisos Cold sterilisation for the healthcare industry • Performed well during our first year of ownership • Benefited from cold sterilisation being an essential service • Pandemic resulted in reduced demand for surgical, cosmetic and veterinary products but offset by an increase in demand for medic
Slide 13: TCR
TCR Ground support equipment in airports • Performed broadly in line with our expectations during the first half of the year, as flights resumed slightly earlier than anticipated and operating costs were managed well • Assuming a more prolonged and gradual recovery to previous air traffic levels by
Slide 14: ESVAGT
ESVAGT Wind farm maintenance support vessels and emergency response vessels • Overall performance improved compared to the same period last year • ERRV fleet seeing lower utilisation, as a result of lower oil prices • Wind farm SOVs largely unaffected by Covid-19 or reduced oil prices £147m • Commit
Slide 15: Oystercatcher
Oystercatcher Oil product storage terminals • Good first half of the year, outperforming expectations and prior year • Drop in oil prices caused a contango market structure which led to storage rate improvements and customers keen to renew earlier • Negative impact of Covid-19 has been limited to lo
Slide 16: Attero
Attero Waste treatment and processing • Continued to perform well operationally • Waste production in the Netherlands has largely recovered, however waste imports from the UK are still below pre-pandemic levels • Plants were able to continue operating at full capacity during the period by drawing wa
Slide 17: Valorem
Valorem French renewable energy developer • Performed well in the first half of the year, benefiting from favourable wind conditions, good availability and a partial refinancing • All assets continued to operate as normal during the lockdown period and a number of new projects became operational, wh
Slide 18: Projects portfolio
Projects portfolio • Performed in line with expectations • Availability-based revenues unaffected by the Covid-19 pandemic • In October, agreed acquisitions of several co- shareholders’ stakes for a total equity investment of c.€25m £52m £73m £14m Cost Closing value Cash income and proceeds 18
Slide 19: India Infrastructure Fund
India Infrastructure Fund • Significant progress made towards realising the remaining assets in the fund • Agreement reached to sell stake in Krishnapatnam Port, for a price significantly above the latest valuation £108m £32m £25m Cost Closing value Cash income and proceeds 19
Slide 20: Outlook
Outlook 3iN remains well positioned to deliver its objectives Resilient portfolio with strong market positions Strong liquidity to make new investments and invest in our portfolio Continuing to deliver progressive dividend 20
Slide 21: Appendix
3) Infrastructure plc Si Appendix
Slide 22: Share price continues to outperform
Share price continues to outperform 5 year share price and NAV performance Total Shareholder Return 3iN FTSE 250 3iN NAV Note: 1. FTSE 250 rebased to 3iN opening share price at 1 October 2015. 2.Total shareholder return shown per annum. 22
Slide 23: FY21 target dividend growth of 6.5%
FY21 target dividend growth of 6.5% Dividend growth since IPO (pence per share) ▪ Special dividends ▪ Ordinary dividends ▪ FY21 dividend target 41.4 4.2% p.a.1 10.2% 6.4% 6.5% 17.0 6.49 6.70 7.00 7.25 7.55 7.85 8.65 9.20 9.80 5.00 5.30 5.50 5.72 5.94 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
Slide 24: Portfolio summary
Portfolio summary 30 September 2020 (£m) Directors' Allocated Directors' Foreign Underlying Portfolio total Investment in Divestment in Accrued income Value valuation 30 foreign Portfolio assets valuation 31 exchange portfolio income return in the the year the year movement movement September exchan
Slide 25: Income in line with expectations
Income in line with expectations (£m) 0 5 10 15 20 25 30 35 40 Economic infrastructure - interest European projects UK projects Economic infrastructure - dividends Non-income cash Non-portfolio interest Sep-20 Sep-19 25
Slide 26: Discount rate movement
Discount rate movement The weighted average discount rate is 11.2% Portfolio weighted average discount rate 11.3% 11.2% 10.8% 10.5% 9.9% 10.0% Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Sep-20 26
Slide 27: Hedging programme mitigates volatility
Hedging programme mitigates volatility (£m) FX gain before FX gain after hedging hedging ▪ Hedged assets (€/SGD/DKK/NOK) 29 5 Note: SGD exposure is within Oystercatcher, a euro denominated investment. 27
Slide 28: Sensitivities to total return
Sensitivities to total return Inflation linkage Assets with revenues: 12% Sensitivity +1% point -1% point Directly linked to inflation Change in inflation over £21m £(21)m underlying assumption for next 2 years Partly linked to inflation 88% 1% 1% Foreign exchange 7% GBP Sensitivity +5% -5% EUR/SGD
Slide 29: Introduction and Background
Introduction and Background Experienced and well resourced team established in 2006 Phil White Managing Partner Stephane Chris Rowland Bernardo Jim Stoner Thomas Fodor James Dawes Scott Moseley Aaron Church Anna Dellis Grand- John Cavill Nigel Middleton Strategy Sottomayor Senior Counsel IR (D) CFO
Slide 30: Governance and fees
Governance and fees • Independent Chair, five independent non-executive directors and one 3i Group appointed non-executive director • Committed to observe requirements of the AIC Code of Corporate Governance Board of • Responsibilities include: Directors – overall supervision of 3i Investments plc a
Slide 31: 3i Infrastructure plc
3} Infrastructure plc