Corporación América Airports S.A. Third Quarter 2018 Earnings Call Presentation
Disclaimer and forward looking statement Statements relating to our future plans, projections, events or prospects are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “believes,” “continue,” “could,” “potential,” “remain,” “will,” “would” or similar expressions and the negat ives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward- looking statements, including, but not limited to: delays or unexpected casualties related to construction under our investment plan and master plans, our ability to generate or obtain the requisite capital to fully develop and operate our airports, general economic, political, demographic and business conditions in the geographic markets we serve, decreases in passenger traffic, changes in the fees we may charge under our concession agreements, inflation, depreciation and devaluation of the AR$, EUR, BRL, UYU, AMD or the PEN against the U.S. dollar, the early termination, revocation or failure to renew or extend any of our concession agreements, the right of the Argentine Government to buy out the AA2000 Concession Agreement, changes in our investment commitments or our ability to meet our obligations thereunder, existing and future governmental regulations, natural disaster-related losses which may not be fully insurable, terrorism in the international markets we serve, epidemics, pandemics and other public health crises and changes in interest rates or foreign exchange rates. The Company encourages you to review the ‘Cautionary Statement’ and the ‘Risk Factor’ sections of our Registration Statement on Form F -1 filed with the SEC for additional information concerning factors that could cause those differences.
Strong Adjusted EBITDA margin expansion despite difficult macro backdrop in Argentina and FX depreciation in Argentina and Brazil • Passenger traffic +5.8% YoY reaching 22.1 million passengers in 3Q18 • As reported consolidated results impacted by adoption of Hyperinflation Accounting in Argentina (IAS 29) • Revenues Ex-IAS 29 fell 7.7 % YoY mainly as a result of lower international travel demand and mix-shift to domestic in Argentina, along with FX translation impact in Brazil and on share of local currency revenues in Argentina • Adjusted EBITDA Ex-IAS 29 up 8.8% with Ex- IFRIC margin expansion of 469 bps; core markets Argentina, Brazil and Italy continued to deliver strong margin expansion • Invested US$ 51.3 million to enhance airport infrastructure mainly in Argentina and Italy
Slower traffic growth of 5.8% impacted by Argentina & Brazil; solid performance across majority of other countries of operations 12% 48% Corporación América Airports ITALY ARGENTINA 37 Airports 2 Airports 52 Airports Passengers +5.9% Passengers +3.2% Cargo -5.4% Passengers +5.8% Cargo +9.2% 4% ARMENIA Cargo +1.2% Movements +0.2% Movements +3.9% Movements +2.6% 2 Airports Passengers +13.8% ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY ITALY 5% ECUADOR Cargo -16.7% ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA ARMENIA Movements +14.7% 2 Airports (1) Passengers +10.4% Cargo +20.0% BRAZIL 24% Movements +3.1% 2 Airports ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR Passengers +5.2% ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR ECUADOR Cargo +27.6% 4% Movements -2.6% PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU PERU BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL URUGUAY 2% BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL BRAZIL 5 Airports (2) 2 Airports Passengers +10.3% Passengers -4.8% Cargo -10.8% URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY URUGUAY Cargo -5.3% Movements +13.6% % of total passengers for 3Q18 ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA ARGENTINA Movements +0.4% 1)CAAP owns 99.9% of ECOGAL which operates the Galapagos Airport, but due to terms of the concession agreement the ECOGAL’s results are accounted for by the equity method. However, 100% of ECOGAL’s passenger traffic and aircraft movements are included in this table. 2)CAAP owns 50.0% of AAP and accounts its results by the equity method. However, 100% of AAP’s passenger traffic and aircraft movements are included in this table
Revenue growth impacted by slower travel demand in Argentina and currency depreciation in both Argentina and Brazil ▪ Ex IAS 29 and Ex-IFRIC Revenues fell 3.8% YoY ▪ Total Revenues Ex-IAS 29 fell 7.7% YoY in the quarter ▪ Aeronautical fell 4.4% YoY impacted by: i) Argentina due to mix-shift from international to domestic traffic and currency depreciation ii) Brazil mainly due to currency depreciation, iii) Italy due to the deduction of marketing support expenses previously recorded in SG&A. Revenue growth in Uruguay, Ecuador and Armenia. ▪ Commercial declined 3.0%, growth in Italy and Armenia more than offset by Argentina and Brazil Net Revenue by geography (Ex- IAS 29) Net Revenue by type In US$ million 3Q18 ex 3Q18 as % Var as % Var ex 10% 3Q17 IAS 29 IAS 29 reported reported IAS 29 6% Aeronautical Revenue 205.1 196.0 -19.0 177.1 -13.7% -4.4% Non-aeronautical Revenue 216.0 192.8 -21.9 170.9 -20.9% -10.7% 7% Commercial revenue 142.9 138.6 -13.9 124.7 -12.7% -3.0% 8% 57% Construction service revenue (1) 72.7 53.6 -8.0 45.6 -37.3% -26.3% Other revenue 0.5 0.6 0.0 0.6 30.8% 30.8% Total Consolidated Revenue 421.1 388.9 -40.9 348.0 -17.4% -7.7% 12% Total Revenue excluding Construction 348.4 335.3 -32.9 302.4 -13.2% -3.8% Service revenue (2) Argentina Italia Brazil Uruguay Ecuador Armenia 1 Construction Service revenue equals the construction or upgrade costs plus a reasonable margin. 2 Excludes Construction Service revenue.
Strong cost dilution driven mainly from currency depreciation… ▪ Total operating costs and expenses, ex-IAS 29 and ex-IFRIC12 Ex- IAS 29 Consolidated Operating Costs and Expenses declined 7.4% YoY to $231.1M US$ Million ▪ Cost of services fell 5.1% YoY to $189.6M reflecting : 322 ✓ Decrease in salaries benefitting from FX depreciation in 0,6 284 Argentina and Brazil 49 1 ✓ Lower concession fees in Argentina and Brazil. 41 72 ✓ Partially offset by higher cost of fuel in Armenia 53 ▪ SG&A fell 17.5% YoY to $40.6M in 3Q18 mainly due to: ✓ Marketing support expenses in Italy, now reported 200 190 under Aeronautical Revenues ✓ Lower sales taxes in Argentina due to the decrease in revenues ✓ A decrease in salaries benefitting from FX depreciation 3Q17 3Q18 in Argentina Cost of services Ex Construction Construction Costs SG&A Other expenses
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