GATWICK AIRPORT LIMITED RESULTS FOR THE YEAR ENDED 31 MARCH 2015 - PowerPoint PPT Presentation

GATWICK AIRPORT LIMITED RESULTS FOR THE YEAR ENDED 31 MARCH 2015

OPERATIONAL AND FINANCIAL PERFORMANCE HIGHLIGHTS TRAFFIC EBITDA PROFIT FOR CAPITAL SENIOR NET SENIOR SENIOR GROWTH GROWTH THE YEAR EXPENDITURE DEBT * RAR * ICR + 7.8% + 13.2% £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 2015 2

OUR AMBITION & STRATEGY, CONSISTENTLY APPLIED

HELP OUR AIRLINES GROW Increased by 12.7% in the year, new routes to Paris, Strasbourg New airlines and routes, long & and Brussels from March 2014 with continued focus on short-haul, business & leisure 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. Expanded service to both Istanbul airports, frequency 4 per day from April 2014. 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

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

CONSISTENTLY HIGH SERVICE LEVELS AND SATISFACTION Significant Improvements Independently Recognised Benchmarking Q1 2015 Benchmarking Q4 2009 LGW Avg. 4.5 Avg. 4.5 LGW 4.0 4.0 3.5 3.5 3.0 3.0 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0.0 0.0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 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 4.22 4.23 4.16 4.3 4.20 4.08 4.2 4.07 Average 4.1 4.0 Change of ownership Overall QSM Target 3.9 09/10 10/11 11/12 12/13 13/14 14/15 6

Q5: DELIVERING AIRPORT TRANSFORMATION PROGAMME 7

STRATEGIC CAPITAL INVESTMENT CONTINUES • Capital investment programme of £1.4bn over 7 years Capital Expenditure (£m) - £1.4bn delivery: • Improved passenger experience 350.0 Actively considering opportunities • Enhanced capacity allowing for growth 294.6 to accelerate capital investment 300.0 • Operational resilience (depending on traffic growth) 245.6 250.0 204.9 • 200.0 180.7 Key projects delivered during the year include: 171.1 161.2 • Pier 5 phase 1 reconfiguration 144.1 150.0 • Gen II security implementation • Fast track immigration 100.0 • Asset stewardship and operational resilience 50.0 - • 14/15 15/16 16/17 17/18 18/19 19/20 20/21 Selection of key projects ongoing: • Pier 1 redevelopment (+£180m) • Airlines Moves Pier 5 phase 2 reconfiguration (£37m) • North Terminal check-in, security, arrivals, and IDL • Objective is to have each airline operating from only one (+£100m) terminal • Asset stewardship and operational resilience • British Airways moving to South terminal • North Terminal immigration (£9m) • Virgin moving to North Terminal • Railway station (+£30m) • easyJet moving to North Terminal • IDL capacity expansion in both terminals (+£35m) • HBS Standard 3 replacement (£140m) 8

STRATEGIC CAPITAL INVESTMENT CONTINUES 9

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 Q1 2015  84% 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

STRONG TRAFFIC GROWTH THROUGH EFFICIENT ASSET UTILISATION • ACDM55 project enabling 2013/14 2014/15 Change % 55 runway movements an Passengers (m) 35.9 38.7 7.8% hour to be declared and taken up for Summer 2015 • Trend towards larger Seats per ATM 175.0 180.3 3.0% aircraft continues (e.g easyJet acquisition of Flybe slots) Load factors 83.0% 83.9% 0.9% pts • Load factors continue to ATMs (k) 247.9 255.8 3.2% improve 11

MARKET FOR TRAFFIC INCREASINGLY COMPETITIVE GATWICK HEATHROW STANSTED LUTON Last 12 months Last 12 months Last 12 months Last 12 months +7.8% +10.7% +1.8% +16.0% 16.0% 10.7% 8.1% 7.8% 6.9% 6.0% 4.7% 3.0% 2.7% 1.8% 1.3% 1.1% 0.9% 0.3% -1.8% -2.5% 12 mths to Mar 15 12 mths to Mar 14 12 mths to Mar 13 12 mths to Mar 12 12

TRAFFIC GROWTH EXPECTED TO CONTINUE, BUT CONSTRAINED BY RUNWAY CAPACITY Passengers – Rolling Annual Total (millions) 40m 39m 38m 37m Change of ownership 36m 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

SOLID FINANCIAL PERFORMANCE YEAR ENDED YEAR ENDED £m CHANGE 31 MARCH 2014 31 MARCH 2015 Passengers (m) 35.9 38.7 7.8% Turnover 593.7 638.0 7.5% Operating costs (excl depreciation and amortisation) (334.3) (346.3) 3.6% EBITDA (pre-exceptionals) 259.4 293.7 13.2% Depreciation (112.4) (119.0) 5.9% Exceptional costs (3.9) (17.8) 356.4% EBIT 143.1 156.9 9.6% Profit 57.5 58.2 1.2% Capital expenditure 201.0 181.0 (10.0)% Net debt* 1,507.3 1,658.9 10.1% *Net debt is shown as at 31 March 2014 and 2015 14

7.5% INCREASE IN TURNOVER REFLECTING TRAFFIC GROWTH AND HIGHER SPEND PER PASSENGER Turnover analysis Aeronautical revenues increased by 4.8%, due to a RPI-1% increase in the underlying TOTAL £593.7m +7.5% £638.0m yield and 7.8% rise in passengers, offset by a reduction due to 1 st year of discounts under “Contracts and Commitments” Net retail income per passenger increased by 332.7 2.4% to £3.81 +4.8% 317.4 • 20 new or refitted retail units opened this year • Ranked No. 1 by passengers for catering facilities vs. 22 major European Airports 149.1 +10.4% • Duty free income up 4% 135.1 72.4 +10.4% 65.6 Net car parking revenue per passenger +10.8% 83.8 75.6 increased by 1.5% to £1.37 • New premium products, improved 2014 2015 website and online marketing Other Income Car parking Retail Aeronautical 15

3.6% INCREASE IN COSTS - FLAT OPERATING COSTS OFFSET BY WORK ON AIRPORTS COMMISSION AND ATC TRANSFER Net staff costs flat reflecting Operating costs analysis • Reduction in headcount driven by TOTAL £334.3m +3.6% £346.3m productivity savings. • 350 Second year of 2 year pay deal for all staff. • Reduced bonus payments reflecting 300 balanced scorecard approach. 0.0% 142.0 142.1 250 General & other expenses reflects • Increased consultancy cost to support 200 Airports Commission. • Costs associated with transfer of Air Traffic 150 +15.6% 115.3 99.7 Control contract. • Additional car parks costs to drive revenue 100 per passenger growth. 55.8 -0.9% 55.3 50 Utilities costs remained flat 36.7 -8.2% 33.7 0 2014 2015 Maintenance and IT reduced due to ongoing Maintenance + IT Rates+Utilities investment programme and contract efficiencies General + other expenses Staff costs Note: operating costs excluding depreciation and amortisation 16

CASHFLOW POSITIVE AFTER CAPITAL INVESTMENT AND NET INTEREST £m NET DEBT 31 MARCH 2014 TO 31 MARCH 2015 1,800.0 75.6 1,700.0 5.8 44.9 290.0 1,600.0 182.3 133.0 1,500.0 1,400.0 1,658.9 1,507.3 1,300.0 1,200.0 1,100.0 Opening Capital Net interest Cash flow from Restricted Inflation Other Closing investment operations payments accretion 17