GATWICK AIRPORT LIMITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2013

Transcription

1 GATWICK AIRPORT LIMITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2013

2 OPERATIONAL AND FINANCIAL PERFORMANCE HIGHLIGHTS UNDERLYING TRAFFIC GROWTH * EBITDA GROWTH CAPITAL EXPENDITURE RAB** SENIOR NET DEBT** SENIOR RAR ** + 3.5% % 105m 2,453m 1,474m 0.60x Traffic growth from existing carriers with new routes, fuller planes and increased flight frequencies Additional traffic from new airlines joining Gatwick Investment programme delivering new and improved facilities that transform the passenger and airline experience Continuing trend of improvement in operational performance is delivering near record levels of customer service Robust financial performance reflecting passenger growth, increased income per passenger and careful cost management * Underlying traffic growth is 3.5% as Olympics reduced traffic by an estimated 170k passengers in Actual traffic growth was 4.4% **All figures are for the six months ended 30 September 2013 except RAB, Senior Net Debt and Senior RAR which are shown as at 30 September

3 OUR AMBITION & STRATEGY, CONSISTENTLY APPLIED 3

4 RECORD SERVICE AND SATISFACTION LEVELS Service quality at record levels % Measures Failed % Measures Passed 100% 90% 80% 70% 60% Consistently high on-time departures performance 75.0% 70.0% 65.0% 60.0% Peak months are June, July & August 50% 08/09 09/10 10/11 11/12 12/13 13/ % 10/11 11/12 12/13 13/14 Security queuing beats targets North Terminal Average <5 min South Terminal Average <5 min Target 100% 95% 90% 85% 80% 75% change of ownership 08/09 09/10 10/11 11/12 12/13 13/14 Sustained passenger ratings at near 12/13 record levels Overall QSM Target Average /09 09/10 10/11 11/12 12/13 13/14 ` 4

5 RECORD SERVICE LEVEL RANKINGS (ASQ) Benchmarking Q Average LGW 12th of 21 in Q Results of ASQ rankings from data collected from multiple European airports Benchmarking Q LGW Average 6th of 23 in Q Over 100,000 passengers interviewed at gate each year across Europe Gatwick now achieving both a record score and also a record highest position, in an increasing survey size 5

6 TRAFFIC GROWTH FROM INCUMBENT and NEW AIRLINES Announcements indicate increasingly diversified route mix European market continues to be Gatwick s largest and grew by 5.2% Norwegian launched 12 new routes, Vietnam & Turkish increasing frequencies Growth in long haul leisure complemented by growth in business (Dubai, Moscow, China) BA basing new 777 & Emirates expecting A380 at Gatwick in 2014 Announced new routes to New York, Los Angeles and Paris More new airlines attracted to Gatwick, in competition with other London airports Vueling 14 flights per week to Barcelona Air Arabia 3 per week to North Africa WOWair 14 per week to Iceland Garuda launch delayed to May 14 as Jakarta runway needs remedial work. 3 flights per week, rising to 5 in Sep 14 the UK s only direct connection 6

7 DELIVERING AIRPORT TRANSFORMATION PROGRAMME DELIVERY OF INVESTMENT PROGRAMME ON SCHEDULE 105m invested in H1 2013/14 1,089m invested since start of Q5 (April 2008) 1,172m total projected investment in Q5 PROJECTS COMPLETED IN LAST 6 MONTHS Second phase of ST IDL refurbishment 11 new stores ( 11m) Pier 5 Phase 1 reconfiguration ( 23m) Flood alleviation ( 4m) Redevelopment of UKBF Arrivals area ( 3m) PROJECTS ONGOING IN 2013/14 Pier 5 Phase 2 reconfiguration ( 45m) Pier 1 redevelopment ( 42m) New crew reporting facility ( 20m) Review of capital programme for the period beyond March

8 LARGEST RETAIL DEVELOPMENT IN GATWICK S HISTORY GATWICK RETAIL IS CHANGING - 23 retail redevelopment projects in last year in NT alone - Summer 13 saw a record number of new store openings in the ST in one day, including a new 6,000ft 2 Harrods department store - ST development completes in Dec13 when new brands launching include Victoria s Secret, Zara, Joules, Superdry, Snow & Rock, Ted Baker and Fat Face AND PASSENGERS LOVE IT! Customer satisfaction is at a record high - in Oct13, 81.5% of passengers rated retail outlets as excellent or good - Catering was at 85% on the same basis and has received 2 awards for best in class in the last 3 months 8

9 INCREASED MOVEMENTS, INCREASED SIZE AND FULLER PLANES results in higher capacity from Gatwick s most limiting resource a single runway 2012 H H1 Change % ATMs (k) % Seats per ATM % Load factors 84.3% 85.6% +1.3% pts Passengers (m) % 9

10 Jun-08 Aug-08 Oct-08 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Monthly year-on-year traffic growth (%) Moving Average Total CONTINUED TREND OF STEADY TRAFFIC GROWTH 16% 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% -12% -14% -16% YOY Growth by month (%) Moving Average Total Recent growth 2013 H1 total traffic has increased by +4.4% Underlying 2013 H1 growth +3.5% (Olympics reduced traffic by an estimated 170k passengers in 2012) 12 month trailing traffic at 35.2m, by end October 2013; 3.3% higher than the equivalent period last year 10

11 TRAFFIC GROWTH IN A COMPETITIVE MARKET 12.0% 10.0% 8.0% 8.5% GATWICK HEATHROW STANSTED LUTON 11.9% Last 12 months +3.1% 7.6% Last 12 months +3.1% Last 12 months +1.5% Last 12 months +0.6% 6.0% 4.0% 4.7% 4.4% 4.3% 4.1% 3.8% 2.0% 1.2% 1.3% 1.8% 1.8% 1.3% 1.3% 1.0% 0.3% 0.0% -2.0% -0.9% -0.4% -4.0% -6.0% -5.3% -4.4% 6 mths to Sep11 6 mths to Mar12 6 mths to Sep12 6 mths to Mar13 6 mths to Sep13 Gatwick s ability to attract new airlines as well as expand existing carriers is reflected in an increase in traffic growth However, the market remains competitive with growth opportunities being distributed across rival airports 11

12 SOLID FINANCIAL PERFORMANCE DELIVERING EBITDA TARGET m 6 MTHS ENDED 30 SEP MTHS ENDED 30 SEP 2013 CHANGE Passengers (m) % Turnover % Operating costs (excl depreciation and amortisation) (153.8) (163.9) 6.6% EBITDA (pre-exceptionals) % Depreciation (61.0) (52.1) (14.6)% Interest and other charges (31.6) (46.4) 46.8% Profit for the 6 months to 30 Sep % Capital expenditure (12.0)% Net debt* 1, , % RAB* 2, , % *Net debt and RAB are shown as at 30 Sep 2012 and

13 10.7% INCREASE IN TURNOVER REFLECTING TRAFFIC GROWTH AND HIGHER SPEND PER PASSENGER Aeronautical revenues increased by 11.6%, half of which is due to capex trigger payments in 2012 Turnover analysis TOTAL 325.8m +10.7% 360.6m Net retail income per passenger increased by 2.0% to 3.55 as new stores and rejuvenated IDL drive higher spending 23 projects in NT in last 12 months 11 new stores in H in ST Includes new 6,000ft 2 Harrods store Net car parking revenue per passenger increased by 15.7% to 1.47 Improved yield management in peak season Increased premium products eg valet New offers eg hotel park and stay % % % % H H1 Aeronautical Retail Car parking Other income 13

14 6.6% INCREASE IN COSTS TO SUPPORT SERVICE LEVELS, INCREASE EFFICIENCY AND REGULATORY WORK Staff costs increase driven by Increase in security staff to support improved service levels 2% increase in average salaries Pension costs up 1.7m Severance costs 1.0m Operating costs analysis TOTAL 153.8m +6.6% 163.9m % 69.5 General expenses reflects Increased consultancy cost to support Q6 regulatory and R2 work Contract savings Rates costs increase as Capital Programme returns more assets to operational status Maintenance & IT costs increase due to reprioritisation and rephasing of maintenance spend % % % H H1 Staff Costs (net) General + Other Expenses Rates + Utilities Maintenance + IT Note: operating costs excluding depreciation and amortisation 14

15 NET DEBT 31 MARCH 2013 TO 30 SEPTEMBER 2013 m 1, , , , , , , , , , , ,100.0 Opening Capital expenditure Net interest Cash flow from ops Restricted payment Other Closing Note: net interest includes 5.5m capitalised interest 15

16 FUNDING PLATFORM ESTABLISHED BANK REFINANCING WITHIN NEXT YEAR DEBT MATURITY PROFILE REDUCES REFINANCING RISK 300m 2041/43 Class A Bond 300m 2037/39 Class A Bond 300m 2026/28 Class A Bond 300m 2024/26 Class A Bond 222m Dec-14 Bank Facilities (drawn) STRONG LIQUIDITY POSITION TO FUND REMAINING Q5 INVESTMENT PROGRAMME OF 82m : Annual cash flow from operations 269m for the 12 months ended 30 September 2013 Undrawn bank commitments 234m as at 30 September 2013 Restricted payment proposed 55m December 2013 FINANCIAL RATIO 12 MONTHS ENDED 30 SEPTEMBER MONTHS ENDED 30 SEPTEMBER 2013 Cash flow (per covenant) 180.1m 220.4m Total interest (net) 36.5m 70.9m Senior ICR 4.93x 3.11x Trigger <1.50x <1.50x Senior Net Debt (per covenant) 1,382.7m 1,474.4m RAB 2,297.2m 2,453.1m Senior RAR 0.60x 0.60x Trigger >0.70x >0.70x 16

17 REGULATORY UPDATE CAA published Q6 Final Proposals on 3 October, 2013 CAA will introduce a new regulatory approach for GAL based on the airport s commitments to airlines and underpinned by a CAA licence Commitments are a 7 year, legally binding contractual undertaking between GAL and its airlines, embedded in the airport's Conditions of Use Regulatory timetable 30 day consultation on Q6 Final Proposal, ended 4 November 2013 CAA publishes market power determination & proposed licence January 2014 CAA grants licence February 2014 Appeal (if any) of market power determination or licence terms March 2014 Airport Commitments & licence come into force 1 April 2014 Appeal hearings (if any) with CAT or CMA Spring/Summer

18 THE AIRPORTS COMMISSION - TIMELINE 28 Feb Mar Mar May July Jul Sept Sept 2013 Spring 2014 Summer 2014 Dec 2013 Summer

19 LONDON GATWICK THE BEST SOLUTION Gatwick delivers the increased connectivity that the UK needs True competition leads to passenger choice, better service and lower fares Economic benefits spread more widely across the south east More certainty of delivery Great resilience to disruption Less environmental impact Supported by County Councils around Gatwick 19

20 LONDON GATWICK: THE DELIVERABLE SOLUTION LONDON GATWICK BAA Heathrow Connectivity Legacy Charter Low Cost Legacy Charter Low Cost Noise Lden (55-60 dba) ,700 13,800 households affected 256,000 households affected Air Quality Complies with legal standards Breaches legal standards today Cost 5bn+ Up to 18bn Speed Open 2025 Open earliest 2030 Surface Access Manageable Minimal funding Congested billion public contribution Resilience HIGH LOW Consumer choice Grows Shrinks Economy Distributed Concentrated 20

21 CONCLUSION Despite the ongoing tough economic conditions in key European markets, traffic growth has continued through incumbent and new airlines and routes 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 All service quality measures achieved for all but one month and significant improvements in customer survey scores and overall airport ranking Investment programme on track, delivering new, improved and innovative facilities Continuing to state London Gatwick s case as the obvious choice for further expansion of airport capacity Full details of today s announcement at: gatwickairport.com/investor 21

22 DISCLAIMER 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. This document has been sent to you in electronic form. You are reminded that documents transmitted via this medium may be altered or changed during the process of electronic transmission and consequently neither GAL nor any person who controls it (nor any director, officer, employee not agent of it or affiliate or adviser of such person) accepts any liability or responsibility whatsoever in respect of the difference between the document sent to you in electronic format and the hard copy version available to you upon request from GAL. 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. 22

23 QUESTIONS