Corporate Plan. Presentation

Transcription

1 Corporate Plan Presentation April 2014

2 Table of contents 1 20 Years - Timeline 2 Governance Structure 3 Core Outcomes 4 Strategic Thrusts 5 Operating Environment 6 Strategic Risks 7 Traffic Volumes 8 Economic Regulation Update 9 Financial Highlights 10 Capex 11 Funding Plan 12 Key Focus Areas 13 Conclusion

3 3 20 years of thinking forward and embracing change 23 July 1993, the company officially established and 9 airports transferred to the Company Airports Company South Africa s sole shareholder is the state, through the NDoT Commenced operations in 1994 Opening of O.R. Tambo International Airport Domestic Terminal PIC acquires Adrisa which owns 20% of Airports Company South Africa from Aeroporti di Roma Opening of O.R. Tambo International Airport Central Terminal Building Announcement of the review of the Economic Regulation Framework Adoption of Early Debt Repayment Strategy resulting in R3bn being set aside to repay debt New Economic Regulatory Committee appointed Government sells 25.4% of Airports Company South Africa s shares to Aeroporti di Roma, various empowerment groups, management and employees Airport operator in consortium that was awarded Mumbai International Airport operating concession and acquired a 10% shareholding R12bn DMTN programme registered and R2bn debut bond issued Opening of international pier at O.R. Tambo International Airport Domestic Terminal Opening of Cape Town International Airport Central Terminal Completion of King Shaka International Airport and successful move from Durban International Airport to new site in just 6 hours Successful facilitation of the 2010 FIFA World Cup Updated the DMTN programme to R30bn Airport operator in consortium that was awarded the Guarulhos International Airport operating concession and acquired a 5.1% shareholding Sale of Durban International Airport site The company s airports continue to be recognised as leading airports in Africa through numerous service excellence awards by the Airports Council International

4 4 Achievements: 20 years Airport Service Awards Africa s Leading Airport Africa Airport of the Year Award Airport Council International Awards by Region : Africa Best Airport Best Improved Airport Best Regional Airport Best Improved Regional Airport Hall of Fame Skytrax Worlds Top 100 Airports Worlds Best Domestic Airport 28 th 22 nd 26 th 3 rd Worlds Best Airport by Passenger Numbers Under 5 million 5 10 million million Airport Cargo Excellence 2013 African Airport of the Yea 1 st 1 st 9 th OR Tambo International Airport Cape Town International Airport King Shaka International Airport / Durban International Airport George Airport Port Elizabeth International Airport East London Airport Upington International Airport

5 5 Governance Structure Shareholders Airports Company South Africa Board of Directors Audit & Risk Remuneration & Nomination Treasury & Economic Regulation Commercial Board Social & Ethics Executive Committee Managing Director (Bongani Maseko) Financial Director (Maureen Manyama- Matome)

6 6 Leadership Structure CEO Company Secretary Internal Audit Governance & Assurance Compliance. Legal & Risk COO CFO Group Investments Officer (Subsidiaries, Concessions, 'Propco', 'AMS') HR Chief Information Officer Airports (Corp Office Today - Airport Ops, Aviation Services, Commercial, Support Services) Corporate Affairs (Today - Brand, Communications, Marketing, Stakeholder Management, CSI) Regional Airports King Shaka International Airport Cape Town International Airport O.R. Tambo International Airport

7 7 Core Outcomes Sustainability Growth Efficiency and cost management Relevance Business Performance excellence

8 7 Strategic thrusts 8 7 Strategic Thrusts Deliver shareholder value Build win-win partnerships with all stakeholders Identifying and securing new business Strengthening business excellence Acceleration of sustainability and transformation programmes Facilitation of economic regulatory legislation and funding framework Managing and developing a high performing and engaged team

9 9 Operating Environment Economic climate Government Objectives Economic regulation Stakeholder relations (management) Aviation Industry conditions Credit rating Airport transport policy

10 10 Strategic Risks 1. Real GDP growth; 2. Resilience of Airlines - fuel price and foreign exchange affects airlines more, 3. Interest rates 4. Finalization of a predictable and transparent economic regulation; 5. Succession planning; 6. National transport master plan (Natmap) and aviation policies; 7. Rate of economic recovery; 8. Fitch rating impact on cost of capital; and 9. Security of energy supply (fuel and electricity)

11 Thousands Millions 11 Traffic Volumes: Assumptions Departing Passengers A 2012A 2013A 2014F 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E Domestic International Regional Unscheduled Aircraft Landings A 2012A 2013A 2014F 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E Domestic International Regional Unscheduled

12 Economic Regulation May 2011 amended permission Promulgated tariff increase 30.6% 5.5% 5.6% Current 10 year investment plan Capex claw-back and smoothing assumed 2012/ / / / / / / /20 Indicative tariff increase based on current approach (12.0%) Steering Committee of the Economic Regulatory Review Draft amendment bill scheduled to go before parliament during the 2014 calendar year Merit-based appeal mechanism and enabling regulations remain the items to be agreed on Good progress on agreement of funding model A number of aspects dependent on regulatory capacity, i.e. full-time regulatory body Permission Application Submission due by 30 June 2014 Draft approach document issued in November 2013 awaiting final approach document Positive developments such as hybrid till for non-aviation land (property development strategy) and share investments (international strategy) No pre-funding allowances expected in final approach document Much improved consultation process delivering on capex programme revisions and agreements on major infrastructure developments. This is expected to reduce regulatory discretion. 12

13 Financial Highlights 2015B 2016E 2017E Departing Passengers 17.8m 18.4m 19.0m Aircraft Landings Tariff Increase on Previous Year 5.6% -12.0% 0% Revenue R7.6bn R7.4bn R7.9bn EBITDA R4.6bn R4.2bn R4.4bn Net Profit R1.3bn R1.1bn R1.2bn Capex R1.3bn R3.1bn R3.2bn Return on Capital Employed (Target %) Net Debt / EBITDA (Target <3.0x) EBITDA Interest Cover (Target >3.1x) 9.7% 8.0% 7.6% 2.1x 2.4x 2.4x 3.3x 3.6x 4.0x CE v

14 14 10 Year Plan Revenue Analysis & EBITDA 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Revenue 48% 41% 39% 40% 41% 42% 44% 44% 44% 44% 45% 45% 36% 36% 35% 2011A 2012A 2013A 2014F 2015B 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E Non-aeronautical revenue Aeronautical revenue Non-aeronautical revenue % 60% 50% 40% 30% 20% 10% 0% 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - EBITDA & EBITDA margin 63% 64% 60% 60% 56% 56% 56% 56% 55% 57% 58% 59% 60% 61% 52% 2011A 2012A 2013A 2014F 2015B 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 70% 60% 50% 40% 30% 20% 10% 0% EBITDA EBITDA margin

15 15 10 Year Plan Profit & Returns 2,500 2,000 1,500 15% 16% 17% Net profit & Net profit margin 15% 15% 14% 12% 9% 14% 16% 19% 17% 15% 20% 15% 10% 1, % 3% 2011A 2012A 2013A 2014F 2015B 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 5% 0% -5% -10% Net profit / (loss) Net profit margin Return on Capital Employed 12.0% 10.0% 8.0% 6.0% 5.3% 7.8% 9.1% 9.8% 8.1% 7.7% 7.1% 6.7% 5.9% 7.1% 7.5% 7.7% 7.5% 7.5% 4.0% 2.9% 2.0% 0.0% 2011A 2012A 2013A 2014F 2015B 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E Return on capital employed Regulatory WACC

16 16 Capital Expenditure FY R1.3 billion R7.7 billion

17 Millions Year Plan Capex profile 12,000 ORTIA: Remote aprons ORTIA: Midfield (all) & fuel tanks 10,000 CTIA: Realignment of runway & T2 8,000 6,000 4,000 2, A 2012A 2013A 2014F 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E Capital expenditure (incl. capitalised interest) Capital expenditure in 2013 monetary terms

18 R billion 18 Credit rating and debt profile o Fitch Ratings affirmed ACSA s rating on 29 November 2013: Long-term local currency Issuer Default Rating of BBB National long-term rating & ZAR30bn domestic medium term note at AA-(zaf) National short term at F1+(zaf) ACSA will endeavour to maintain / improve the current rating & considering second rating o 10 Year Debt Profile Change in debt levels Debt levels

19 19 Debt Book 31 March 2014 Diversified funding sources Debt composition 31 Mar Mar 2013 *31 Mar 2014 Total debt consideration R16.7 bn R14.7 bn R13.1 bn WACB 10% NACS 10% NACS 10% NACS Gearing 60% 53% 47% In 2013/14 FY a total of about R2 billion mainly by repaying Buyback of the AIR02U (R500 million) on the 5 th July 2013 Redemption of the AIRL02 (R1.3 billion) on the 18 th February 2014

20 20 3 Year Funding / Borrowing Plan FY Funding Requirements (2015E -2017E) 31% 69% Available cash Gross debt financing Total capex Funding Composition (Per Year) Debt Funding Required & Sources Funding up to financial year end 31 March 2015 No debt funding required Funding up to financial year end 31 March 2016 & 2017 Required Sources Funding R2.3 billion Domestic Debt Capital Markets (DMTN) Refinance AIR03 maturing Commercial Paper Tap AIR02 maturing Issue new benchmark bond Bank credit facilities and financing Development Finance Institutions (DFIs) E 2016E 2017E Cash Flow Debt

21 R million 21 Refinancing Strategy FY 2015 Debt Maturity Profile Gaps Refinancing Considerations Investor Appetite 2013 Road show Existing Maturity Profile Gaps Factors Assessed Time to maturity (duration), Trading price Maturity Gap Areas Redemption volume Spread above benchmark government bond 2022E (8yrs) Fixed rate bonds Inflation linked bonds Bank Loans Floating Rate Notes DFI Loans (DBSA, INCA & AFD) Funding space 20125E (10yrs) 2031E (16yrs)

22 22 10 Year Funding / Borrowing Plan FY Capital Expenditure R55 billion New Debt Funding Requirement R29 billion (53% funding of capex) Credit Ratings to be maintained at current levels as projected credit matrix are within an investment grade credit rating Funding Sources Domestic Debt Capital Market issuances through R30 billion registered DMTN Bank funding through facilities and loans Development Finance Institution financing Export Credit Agency (ECA) backed funding International bond issuances and private placements Project Financing

23 10 Year Plan Credit Metrics Net Debt / EBITDA Net debt / EBITDA Target (below this line) Net Debt / Capitalisation EBITDA Interest Cover 70% 60% 50% 40% 30% 20% 10% 0% 62% 60% 53% 49% 43% 41% 40% 44% 44% 45% 46% 49% 52% 51% 48% Net debt / Capitalisation Target (below this line) EBITDA interest cover Target (above this line) 23

24 24 Key focus areas FY 2015 Deliver shareholder value Issue of Minority Shareholders Finalise model to secure new business in Africa and other emerging markets Unlock value potential in land at ACSA airports Acceleration of sustainability and transformation programmes Facilitation of economic regulatory legislation and funding framework Managing and developing a high performing and engaged team

25 25 Key focus areas FY o o o o o o o o o Strengthened the stakeholder engagement process; Continued admiration of passengers and airlines for its customer focussed services and facilities; Delivered on the imperatives of the government agenda (transformation and sustainability programmes); o o Job Creation Delivered on the BBBEE codes of good practice Contributed to economic growth; Established ring-fenced property development and international investment businesses; Achieved a respected presence in emerging markets; Optimised its infrastructure and efficient processes; Enabled information technology platforms; and Developed a transformed workforce that is energetic.

26 26 Conclusion 1. Key risks for delivering this plan remain o GDP growth; and o economic regulation 2. The following ever changing economic elements to be closely monitored: o fuel price; o interest rates; o foreign exchange rates; and o cost of borrowing 3. The implementation of new capacity infrastructure dependant on favourable economic conditions 4. Stakeholder management with industry, economic regulator and Investors will be maintained 5. ACSA will maintain its course to meet shareholder expectations