gatwick airport* · 2015. 11. 18. · help our airlines grow 4 new airlines and routes, long &...
TRANSCRIPT
RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2015
GATWICK AIRPORT*
* Consolidated results for Ivy Holdco Limited, the parent of Gatwick Airport Limited, representing the performance of the Gatwick Airport group of companies
OPERATIONAL AND FINANCIAL PERFORMANCE
2
Contracts and Commitments framework working well with airlines - accounting for over 80% of passengers
Airline moves project commenced – Winter Season 16/17
Strong service and satisfaction levels
Awaiting decision from Government in December 2015 about the next new runway in the South East
Record passengers of 23.5m driven by significant growth in existing airlines resulting in rolling annual total over 40m
+ 4.7%
TRAFFIC GROWTH
£94m
PROFIT FOR THE PERIOD
+ 6.8%
EBITDA GROWTH
£92m
CAPITAL EXPENDITURE
£1,648m
SENIOR NET DEBT *
0.54x
SENIOR RAR *
* All figures are for the six months 30 September 2015 except Senior Net Debt and Senior RAR which are shown as at 30 September 2015
HIGHLIGHTS
3.49x
SENIOR ICR
Air Traffic Control transition commenced and on target for March 2016
OUR AMBITION & STRATEGY, CONSISTENTLY APPLIED
HELP OUR AIRLINES GROW
4
New airlines and
routes, long &
short-haul,
business &
leisure
Increased by 21.8% year to date and declared plans to grow long haul at Gatwick including Puerto Rico, announcing Boston as the first new route from May 2016.
Announced 6 destinations, 4 flights per day from May 2016: Vancouver, Calgary, Edmonton, Winnipeg, Toronto and St. John’s.
New routes launched in November 2015 to Costa Rica and January 2016 to Reykjavik.
Increased by 5.6% year to date, and launched new routes to Friedrichshafen and Corsica. Have reached 17mppa on a rolling annual basis.
Announced the 11th long haul aircraft to be based at LGW from May 2016 flying to Costa Rica and Lima. Also announced a new daily service to New York from April 2016.
Announced a new daily Toronto service from May 2016.
Confirmed that all 3 Gatwick services to Dubai will be operated with A380 aircraft from January 2016.
90% capacity growth in the last 12 months to 49 weekly departures. Have announced a new route to Paris (CDG) from May 2016.
45%
55%
65%
75%
85%
95%
09/10 10/11 11/12 12/13 13/14 14/15 15/16
Percentage of flights departing on time - 12 Month Moving Average Total By Month
% on time
92%
93%
94%
95%
96%
97%
98%
99%
100%
09/10 10/11 11/12 12/13 13/14 14/15 15/16
Percentage of flights last bag delivered within 5mins
% of flights successfully served
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16
% Measures Passed % Measures Failed
75%
80%
85%
90%
95%
100%
09/10 10/11 11/12 12/13 13/14 14/15 15/16
North Terminal Average <5 min South Terminal Average <5 min Target
HIGH SERVICE LEVELS AND SATISFACTION
5
Service Quality Scores Remain Strong
Arrivals Bags Significant Improvement Security Clearance Bounces Back Post New Technology Launch
On Time Departure Remains a Key Focus
Change of ownership
Change of ownership
Change of ownership
Change of ownership
* Service metrics are updated to October 2015
3.9
4.0
4.1
4.2
4.3
09/10 10/11 11/12 12/13 13/14 14/15 15/16
Overall QSM Target
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
HIGH SERVICE LEVELS AND SATISFACTION
6
Sustained Passenger Ratings at Near 12/13 Record Levels
Significant Improvements Independently Recognised
Source: The Airport Service Quality (ASQ) - an independent survey run under the auspices of Airports Council International (ACI)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
Average LGW Average LGW Rankings Q3 2015 Rankings Q4 2009
4.07 4.08
4.16
4.23 4.22
4.20 4.21
180.7
204.9
161.2 171.1
144.1
245.6
294.6
-
50.0
100.0
150.0
200.0
250.0
300.0
350.0
14/15 15/16 16/17 17/18 18/19 19/20 20/21
STRATEGIC CAPITAL INVESTMENT CONTINUES
• Key projects delivered during the period include:
• NT fast bag drop phase 1
• Pier 5 phase 2 reconfiguration
• Selection of key projects ongoing:
• Pier 1 redevelopment (+£180m)
• HBS Standard 3 replacement (£140m)
• North Terminal check-in phase 2 , security, arrivals, and IDL (+£100m), facilitating airline moves
• IDL capacity expansion in both terminals (+£35m)
• Railway station transformation (+£30m)
• North Terminal immigration (+£9m)
7
Capital Expenditure (£m) - £1.4bn
Actively considering opportunities to accelerate capital investment
(depending on traffic growth)
STRONG TRAFFIC GROWTH THROUGH EFFICIENT ASSET UTILISATION
8
• Passenger numbers up 4.7% a factor of larger, fuller planes and increased movements.
• 40m passengers on a moving annual total basis to date.
• Record breaking passenger numbers a decade ahead of forecasts prepared by DfT and Airports Commission.
• ACDM55 project enabled 55 runway movements an hour to be declared and delivered in Summer 2015.
• Expectations are that passengers numbers will reach 41 million by the end of the financial year.
30m
32m
34m
36m
38m
40m
42m
08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16
Passengers – Rolling Annual Total (millions)
Change of ownership
6 MTHS ENDED 30 SEP
2014
6 MTHS ENDED 30 SEP
2015
Passengers (m) 22.5 23.5 +4.7%
Seats per ATM 179.3 181.2 +1.1%
Load factors 86.1% 87.2% +1.1% pts
ATMs (k) 145.5 148.9 +2.3%
GATWICK STANSTED LUTON HEATHROW
TRAFFIC GROWTH IN A COMPETITIVE MARKET
9
Targeted business development efforts have resulted in increased volumes
Market remains competitive with growth opportunities being distributed across rival airports
5.3%
1.7%
4.5%
1.8%
8.1%
1.9%
10.9% 9.9%
7.4%
1.6%
22.6%
11.9%
4.7%
2.3%
10.8%
15.9%
6 mths to Mar 14 6 mths to Sep 14 6 mths to Mar 15 6 mths to Sep 15
Last 12 months
+5.7%
Last 12 months
+2.0%
Last 12 months
+15.7%
Last 12 months
+14.3%
£m 6 MTHS ENDED
30 SEP 2014 Unaudited
6 MTHS ENDED 30 SEP 2015
Unaudited CHANGE
Passengers (m) 22.5 23.5 4.7%
Turnover 391.6 411.8 5.2%
Operating costs (excl depreciation and exceptional items) (165.9) (170.8) 3.0%
EBITDA (pre-exceptionals) 225.7 241.0 6.8%
Depreciation (62.3) (61.1) (1.9)%
Exceptional costs - (5.9) -
EBIT 163.4 174.0 6.5%
Capital expenditure 90.9 92.3 1.5%
Net debt** 1,480.4 1,597.2 7.9%
SOLID FINANCIAL PERFORMANCE FOR GATWICK AIRPORT* First reporting period following transition to IFRS
10
* Consolidated results for Ivy Holdco Limited, the parent of Gatwick Airport Limited, representing the performance of the Gatwick Airport group of companies ** Net debt is shown as at 30 September 2014 and 2015
45.2 49.7
44.4 47.7
84.3 85.5
217.7 228.9
Other income Car parking Retail Aeronautical
5.2% INCREASE IN TURNOVER REFLECTING TRAFFIC GROWTH
11
Turnover analysis
TOTAL £391.6m £411.8m +5.2%
Aeronautical revenues increased by 5.1%, due to 4.7% rise in departing passengers and an increase in the level of airport charges, offset by discounts and traffic mix changes.
Retail income up by 1.4%, but net income per passenger decreased 3.0% to £3.60 due to challenging trading in the Duty and tax-free category.
Car parking income up by 7.4% and net income per passenger increased 11.9% to £1.60 due to improved yield management, valet capacity increases and cost savings.
+1.4%
+7.4%
+10.0%
+5.1%
Other income increased by 10.0% largely as a result of increased traffic related operational facilities income and revised pricing structure for passengers with reduced mobility.
2014 H1 2015 H1
17.6 16.3
23.8 23.1
51.9 58.6
72.6 72.8
2014 H1 2015 H1
Maintenance + IT Rent, rates & utilities
General & other expenses Staff costs (net)
+0.3%
-2.9%
-7.4%
+12.9%
3.0% INCREASE IN OPERATING COSTS – REDUCED COSTS PER PASSENGER
12
Staff costs increase reflects • 2 ½ year pay deal agreed to September
2017 • Offset by reduced salary costs for new
starters • Increase in pension costs under IFRS
General & other expenses increase reflects various factors, including: • Rebates of £2.1m payable to airlines for
service standards • Increase in passengers with reduced
mobility and associated costs
Operating costs analysis *
TOTAL £165.9m £170.8m +3.0%
• Operating costs excluding depreciation and exceptional items
Utilities decrease reflects • A change in membership requirements for
the carbon credit scheme
CASHFLOW POSITIVE AFTER CAPITAL INVESTMENT AND NET INTEREST
13
226.4
100.3
12.1
52.0
0.3
1,658.9 1,597.2
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1,800
1,900
Opening Capitalinvestment
Net interest Cash flow fromoperations
Restrictedpayments
Other Closing
£m NET DEBT 1 APRIL 2015 TO 30 SEPTEMBER 2015
CREDIT OVERVIEW
14
FINANCIAL RATIO
12 Months ended 30 SEPTEMBER
2015
YEAR ENDING 31 MARCH 2016
YEAR ENDING 31 MARCH 2017
YEAR ENDING 31 MARCH 2018
Cash flow (per covenant) £272.8m £255.9m £269.1m £290.8m
Total interest (net) £78.2m £85.3m £90.5m £96.3m
Senior ICR ( trigger <1.50x) 3.49x 3.00x 2.97x 3.02x
Senior Net Debt (per covenant) £1,648.3m £1,791.0m £1,901.5m £2,024.0m
Transfer RAB £3,027.5m £3,266.1m £3,640.6m £4,023.9m
Senior RAR (trigger >0.70x) 0.54x 0.55x 0.52x 0.50x
Net Debt to EBITDA 5.46 5.45 5.27 5.10
FFO to Net Debt 15.4% 13.0% 13.9% 14.9%
DEBT MATURITY PROFILE REDUCES FINANCING RISK
STRONG LIQUIDITY POSITION TO FUND ONGOING CAPITAL INVESTMENT PROGRAMME
£1,550m Class A Bonds – Maturities 2024-2041
£300m Bank Facilities – March 2019
Annual cash flow from operations £290m for the year ended 31 March 2015
Undrawn bank commitments £225m as at 31 March 2015
Restricted payments proposed £100m during 2015/2016 (£52m paid July 2015)
TRANSITION TO TRANSFER RAB
Transfer date 1 April 2014
Relevant Multiple – 11.1
GATWICK’S SECOND RUNWAY PROPOSAL
15
“Gatwick is the best solution, does not breach air quality legal limits - even with a second runway - requires no taxpayer funding and can be delivered quickly. A decision for Gatwick is a decision for a runway which can actually be delivered and built by 2025.”
• 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 over 80% of passengers for the six months to 30 September 2015 with a CAA review due in November 2016.
• 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. • 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.
• Investment programme continuing to deliver new, improved and innovative facilities. • Pressing Government to back Gatwick’s proposal for the next new runway in the South East - the
only deliverable solution.
CONCLUSION
16
Full details of today’s announcement at: gatwickairport.com/investor
DISCLAIMER
17
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 than those presented.
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