GATWICK AIRPORT LIMITED RESULTS FOR THE YEAR ENDED 31 MARCH 2015

Transcription

1 GATWICK AIRPORT LIMITED RESULTS FOR THE YEAR ENDED 31 MARCH 2015

2 OPERATIONAL AND FINANCIAL PERFORMANCE HIGHLIGHTS TRAFFIC GROWTH EBITDA GROWTH PROFIT FOR THE YEAR CAPITAL EXPENDITURE SENIOR NET DEBT * SENIOR RAR * SENIOR ICR + 7.8% % 58m 181m 1,711m 0.59x 3.11x Record passengers of 38.7m driven by significant growth in existing airlines Increased airport efficiencies through ACDM55 and maximising the passengers per movement Capital investment programme delivering airport transformation and resilience Contracts and Commitments framework embedded with contracts in place with airlines accounting for 80% of passengers Shortlisted by the Airports Commission for a new runway in the South East Consistently high service and satisfaction levels * All figures are for the year ended 31 March 2015 except Senior Net Debt and Senior RAR which are shown as at 31 March

3 OUR AMBITION & STRATEGY, CONSISTENTLY APPLIED

4 HELP OUR AIRLINES GROW Increased by 12.7% in the year, new routes to Paris, Strasbourg and Brussels from March 2014 with continued focus on business routes with a new connection to Stuttgart. Added 3 additional short haul aircraft, launching 9 new routes to Southern Europe. Replaced older 737 aircraft with A320s with 18% more seats. Increased in 2014 by 66.6%, announced a second Dreamliner at Gatwick from Summer 2015, increased New York to daily and launched a new route to Orlando. New airlines and routes, long & short-haul, business & leisure Expanded service to both Istanbul airports, frequency 4 per day from April Upgraded the second of 3 daily operations to an A380 aircraft. Grown circa 83% YOY, adding a 4th frequency to Barcelona as well as launching new routes to Rome and Bilbao and upgrading to A321s. Launched a new twice daily service to Madrid on A320 aircraft. Launching Spring 2016 with daily routes to North America. 4

5 % of flights successfully served % of flights departing on time) CONSISTENTLY HIGH SERVICE LEVELS AND SATISFACTION Service Quality Remains the Best in the London System On Time Departures remains a key focus 100% % Measures Failed % Measures Passed Percentage of flights departing on time - 12 Month Moving Average Total By Month 90% 95% 80% 85% 75% 70% 60% Change of ownership 65% 55% Change of ownership 50% 08/09 09/10 10/11 11/12 12/13 13/14 14/15 45% 09/10 10/11 11/12 12/13 13/14 14/15 100% Security Clearance Continues to Beat Target North Terminal Average <5 min South Terminal Average <5 min Target Arrivals Bags 100% Percentage of flights last bag delivered within 55 minutes 12 Month Moving Average Total By Month 95% 99% 90% 98% 97% 85% 80% Change of ownership 96% 95% Change of ownership 75% 09/10 10/11 11/12 12/13 13/14 14/15 94% 09/10 10/11 11/12 12/13 13/14 14/15 5

6 CONSISTENTLY HIGH SERVICE LEVELS AND SATISFACTION Significant Improvements Independently Recognised Benchmarking Q Benchmarking Q LGW Avg. Avg. 4.5 LGW Source: The Airport Service Quality (ASQ) - an independent survey run under the auspices of Airports Council International (ACI) Sustained Passenger Ratings at Near 12/13 Record Levels Average Change of ownership Overall QSM Target 09/10 10/11 11/12 12/13 13/14 14/15 6

7 Q5: DELIVERING AIRPORT TRANSFORMATION PROGAMME 7

8 STRATEGIC CAPITAL INVESTMENT CONTINUES Capital investment programme of 1.4bn over 7 years delivery: Improved passenger experience Enhanced capacity allowing for growth Operational resilience Key projects delivered during the year include: Pier 5 phase 1 reconfiguration Gen II security implementation Fast track immigration Asset stewardship and operational resilience Capital Expenditure ( m) - 1.4bn Actively considering opportunities to accelerate capital investment (depending on traffic growth) Selection of key projects ongoing: Pier 1 redevelopment (+ 180m) Pier 5 phase 2 reconfiguration ( 37m) North Terminal check-in, security, arrivals, and IDL (+ 100m) Asset stewardship and operational resilience North Terminal immigration ( 9m) Railway station (+ 30m) IDL capacity expansion in both terminals (+ 35m) HBS Standard 3 replacement ( 140m) - Airlines Moves 14/15 15/16 16/17 17/18 18/19 19/20 20/21 Objective is to have each airline operating from only one terminal British Airways moving to South terminal Virgin moving to North Terminal easyjet moving to North Terminal 8

9 STRATEGIC CAPITAL INVESTMENT CONTINUES 9

10 GATWICK S RETAIL IS AMONG EUROPE S BEST AND INCOME CRITICAL TO COMPETITIVENESS EVER IMPROVING CUSTOMER SATISFACTION Customer satisfaction is at an all time high across both terminals 85% of our passengers rated the selection of food & beverage outlets as excellent or good at the end of Q % gave the same ratings to the selection of retail outlets Gatwick was ranked No. 1 for its provision of restaurant facilities in the ASQ survey which benchmarks Gatwick against 22 major European Airports 10

11 STRONG TRAFFIC GROWTH THROUGH EFFICIENT ASSET UTILISATION ACDM55 project enabling 55 runway movements an hour to be declared and taken up for Summer 2015 Trend towards larger aircraft continues (e.g easyjet acquisition of Flybe slots) Load factors continue to improve 2013/ /15 Change % Passengers (m) % Seats per ATM % Load factors 83.0% 83.9% 0.9% pts ATMs (k) % 11

12 MARKET FOR TRAFFIC INCREASINGLY COMPETITIVE GATWICK HEATHROW STANSTED LUTON Last 12 months +7.8% Last 12 months +1.8% Last 12 months +16.0% Last 12 months +10.7% 16.0% 10.7% 7.8% 4.7% 1.3% 6.9% 1.8% 3.0% 2.7% 0.3% 6.0% 0.9% 1.1% 8.1% -1.8% -2.5% 12 mths to Mar mths to Mar mths to Mar mths to Mar 12 12

13 TRAFFIC GROWTH EXPECTED TO CONTINUE, BUT CONSTRAINED BY RUNWAY CAPACITY 40m Passengers Rolling Annual Total (millions) 39m 38m 37m 36m Change of ownership 35m 34m 33m 32m 31m 30m 08/09 09/10 10/11 11/12 12/13 13/14 14/15 Latest traffic forecasts +4.1% forecast growth for 2015/16 Growing to over 40.0m passengers in 2015/16 Gatwick s traffic now a decade ahead of forecasts prepared by DfT and Airports Commission 13

14 SOLID FINANCIAL PERFORMANCE m YEAR ENDED 31 MARCH 2014 YEAR ENDED 31 MARCH 2015 CHANGE Passengers (m) % Turnover % Operating costs (excl depreciation and amortisation) (334.3) (346.3) 3.6% EBITDA (pre-exceptionals) % Depreciation (112.4) (119.0) 5.9% Exceptional costs (3.9) (17.8) 356.4% EBIT % Profit % Capital expenditure (10.0)% Net debt* 1, , % *Net debt is shown as at 31 March 2014 and

15 7.5% INCREASE IN TURNOVER REFLECTING TRAFFIC GROWTH AND HIGHER SPEND PER PASSENGER Aeronautical revenues increased by 4.8%, due to a RPI-1% increase in the underlying yield and 7.8% rise in passengers, offset by a reduction due to 1 st year of discounts under Contracts and Commitments Turnover analysis TOTAL 593.7m +7.5% 638.0m Net retail income per passenger increased by 2.4% to new or refitted retail units opened this year Ranked No. 1 by passengers for catering facilities vs. 22 major European Airports Duty free income up 4% % +10.4% Net car parking revenue per passenger increased by 1.5% to 1.37 New premium products, improved website and online marketing % +10.8% Other Income Car parking Retail Aeronautical 15

16 3.6% INCREASE IN COSTS - FLAT OPERATING COSTS OFFSET BY WORK ON AIRPORTS COMMISSION AND ATC TRANSFER Net staff costs flat reflecting Reduction in headcount driven by productivity savings. Second year of 2 year pay deal for all staff. Reduced bonus payments reflecting balanced scorecard approach. General & other expenses reflects Increased consultancy cost to support Airports Commission. Costs associated with transfer of Air Traffic Control contract. Additional car parks costs to drive revenue per passenger growth. Utilities costs remained flat Maintenance and IT reduced due to ongoing investment programme and contract efficiencies Operating costs analysis TOTAL 334.3m +3.6% 346.3m Maintenance + IT General + other expenses 0.0% +15.6% -0.9% -8.2% Rates+Utilities Staff costs Note: operating costs excluding depreciation and amortisation 16

17 CASHFLOW POSITIVE AFTER CAPITAL INVESTMENT AND NET INTEREST m 1,800.0 NET DEBT 31 MARCH 2014 TO 31 MARCH , , , , , , , , ,100.0 Opening Capital investment Net interest Cash flow from operations Restricted payments Inflation accretion Other Closing 17

18 NEW BANK FACILITY AND TRANSITION TO TRANSFER RAB DEBT MATURITY PROFILE REDUCES REFINANCING RISK 1,550m Class A Bonds Maturities m Bank Facilities March 2019 TRANSITION TO TRANSFER RAB Transfer date 1 April 2014 Relevant Multiple 11.1 STRONG LIQUIDITY POSITION TO FUND ONGOING CAPITAL INVESTMENT PROGRAMME Annual cash flow from operations 290.0m for the year ended 31 March 2015 Undrawn bank commitments 160m as at 31 March 2015 Restricted payments proposed 100m during 2015/2016 FINANCIAL RATIO YEAR ENDED 31 MARCH 2015 YEAR ENDING 31 MARCH 2016 YEAR ENDING 31 MARCH 2017 YEAR ENDING 31 MARCH 2018 Cash flow (per covenant) 234.8m 249.9m 278.8m 296.0m Total interest (net) 75.6m 85.6m 86.5m 87.0m Senior ICR ( trigger <1.50x) 3.11x 2.92x 3.23x 3.40x Senior Net Debt (per covenant) 1,711.3m 1,805.4m 1,820.1m 1,825.2m Transfer RAB 2,889.0m 3,238.0m 3,647.6m 4,051.7m Senior RAR (trigger >0.70x) 0.59x 0.56x 0.50x 0.45x Net Debt to EBITDA FFO to Net Debt 12.5% 12.5% 15.3% 17.3% 18

19 REGULATORY RECAP Contracts & Commitments framework backed by a licence from 1 April Price Limitation on gross core yield from airport charges: RPI+1.0% p.a. Based on published tariff over 7 years Limitation on net blended yield from airport charges: RPI+0% p.a. Based on published tariff less contract discounts Measured over 7 year term prices may be lower / higher than price path in a given year Represents the yield actually received by Gatwick CAA price monitoring: fair price benchmark using traditional RAB-based building block approach: Net blended yield of RPI-1.6% p.a. Forms part of the monitoring regime and is therefore a benchmark, not a licence price cap Service Based on Q5 service quality regime, but with two additional measures Outbound baggage system performance Security queues <30mins any measurement period on a day Service rebates remain up to 7% of airport charges in aggregate but no bonuses are available Other Terms Investment & consultation commitment Minimum capex requirements - 100m p.a. average with no capital expenditure triggers Information commitment - no separate regulatory accounts Operational and financial resilience commitments No RAB CAA review of operation of Commitments in second half of 2016 Contracts in place with airlines which accounted for 80% of passengers. 19

20 THE RUNWAY DEBATE Airports Commission: There is a clear case for one net additional runway in London and the South East, to come into operation by 2030 the optimal approach is to continue to invest in an airport system that caters for a range of airline business models. Feb: public consultation closes Airports Commission Created Dec: Interim report published Gatwick & Heathrow plans are shortlisted to meet capacity for 2030 Commission says a further runway may be needed by 2050 May: Submissions made to AC for Gatwick, Heathrow & Estuary options Sept: Estuary option ruled out for 2030 Nov: Commission opens a public consultation on Gatwick & Heathrow options May: Air Quality consultation Commission to make its recommendation to Government within weeks Post Recommendation: Government makes decision by Christmas for subsequent consultation

21 GATWICK IS THE ONLY DELIVERABLE SOLUTION 21

22 CONCLUSION Assisted by the early signs of UK economic recovery, traffic growth has continued through both incumbent and new airlines and routes allowing the airport to achieve record number of passengers. Growth is expected to continue throughout 2015/16 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 Continued success in service quality measures with Gatwick remaining the best performing London airport Investment programme continuing to deliver new, improved and innovative facilities Contracts and Commitments proposal adopted by the CAA tailored offerings to each airline enhancing the customer experience with contracts in place with airlines which accounted for 80% of passengers Continuing to make submissions to the Airports Commission supporting Gatwick s unique opportunities in being the only deliverable solution. Full details of today s announcement at: gatwickairport.com/investor 22

23 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. 23

24 QUESTIONS