Investor Day SUSTAINABLE GROWTH AND VALUE CREATION
June 19 - London GETLINK INVESTOR DAY 2018 AGENDA SPEAKERS 12:30-13:30 Welcome Lunch 13:30-13:50 Getlink: long term sustainable growth and value creation Jacques GOUNON 13:50-14:35 Eurotunnel Shuttle Services Jo WILLACY Laurent FOURTUNE 14:35-14:45 Unique know how in infrastructure management Michel BOUDOUSSIER 14:45-15:05 Railway Network 15:05-15:20 Q&A Coffee break 15:20-15:40 ElecLink: a highly value creating project 15:40-16:05 Steven MOORE 16:05-16:10 Europorte: towards a transparent French market François GAUTHEY François GAUTHEY 16:10-16:35 A proven growth model and a focus on shareholder return 16:35-17:00 Q&A 2 Investor Day June 2018
AN EXPERIENCED MANAGEMENT TEAM François Jo Steven Jacques Laurent Michel GAUTHEY WILLACY Moore GOUNON FOURTUNE BOUDOUSSIER Chairman Deputy Commercial COO Chief Corporate Chief Executive & Chief Executive Chief Executive Director Eurotunnel Officer Officer Officer Officer Eurotunnel ElecLink 3 Investor Day June 2018
SUSTAINABLE GROWTH AND VALUE CREATION Unique as Uniq ue assets ets with sustainable source of growth A r A res espo pons nsib ible le & & sus ustainab tainable le Solid Solid return return policy on corporate, to shareholders social and environment Financ Financial ial strategy: strategy: Pr Prom omis ising ou ing outloo tlook ability to further create value in all business lines 4 Investor Day June 2018
Getlink A MAJOR PLAYER IN EUROPEAN TRANSPORT Three activities Eurotunnel: l: Concessionaire of the cross-Channel Fixed Link 11 % Europorte until 2086 Non regulated Other • Freight and passenger shuttles: freedom to set prices tariffs 2 % revenues • Railway Network: charges set by the Railway Usage Contract until 2052 Europor orte: rail freight operator • Only profitable rail freight operator in France ElecLin Link: FR/UK electricity interconnector €1,033M Regulated • Recurring revenue expected from 2020 tariffs 2017 Revenue Growing revenue and cash flow by category Eurotunnel Revenue: +22% vs. 2012 59 % Eurotunnel EBITDA: +25% vs. 2012 28 % Eurotunnel Group Free cash flow: +77% vs. 2012 shuttles Railway Long dated financing to match concession Network Net financial debt: €3,733M (7.1x EBITDA) Interest rate: 3.8% Maturity: 2050 5 Investor Day June 2018
Sustainable growth and value creation UNIQUE ASSET WITH SUSTAINABLE SOURCE OF GROWTH Vital Link Eurotunnel, Vital Link has revolutionized business travel Eurotunnel, an underutilized ElecLink will strengthen cross-Channel asset and a concession exchanges of electricity and accelerate From London to Brussels in 2h00, to Paris to 2086 the energy transition in 2h20 and to Amsterdam in 3h40 Vital Link Vital Link Eurotunnel, has revolutionized international trade Eurotunnel, has revolutionized leisure travel €138bn+ of trade / 26% of all UK trade with EU countries The Tunnel supports a significant leisure The Tunnel helped the development of integrated cross- and lifestyle economy border supply chain (just-in- time logistic, express delivery…) 6 Investor Day June 2018
A RESPONSIBLE AND SUSTAINABLE POLICY ON CORPORATE, SOCIAL AND ENVIRONMENT SOCIAL ENVIRONMENT CORPORATE GOVERNANCE Employee safety Continuous reduction Actively committed Board: Independence (77%), is a priority of CO 2 emissions to local communities diversity (46% women), international (46% A constructive social 2M tonnes of CO 2 saved non French resident) dialogue 14 th best employer by the shuttle service & high and with a senior in France in the Transport speed train every year independent director & Logistics sector in 2016 compared to ferry travel/airlines (Capital) Shareholder committed ElecLink will help energy last 5 AGM: 100% transition and reduction in CO 2 of resolution voted with emissions average 96% in favour 7 Investor Day June 2018
Sustainable growth and value creation PROMISING OUTLOOK IN ALL BUSINESS LINES ElecLink EUROPORTE 11 % • Energy transition 0 % • Rationalization and profitable growth • UK & FR security supply of the French rail freight market • Steady diversified revenue stream Revenue Split EUROTUNNEL EUROTUNNEL RAILWAY NETWORK SHUTTLE in 2017 59 % • New destinations • Pricing power 28 % • Low cost carriers • International trade • Limited capacity • E-commerce at London Airports • Market share gains 8 Investor Day June 2018
BREXIT: EUROTUNNEL’S UNIQUE POSITION 1986 Treaty of Canterbury 2018 The Vital Link Bilateral Treaty* between France & the UK “The frontier controls shall be organised 138 billion euros of goods transported in a way which will reconcile, per year, representing 26% of UK-EU trade as far as possible, the rapid flow of traffic Exceptional value-added (health, pharma, with the efficiency of the controls. ………………….. IT, Just-In-Time) in an area in the territory of the other State where controls are juxtaposed. ” Geographically binding An ultra modern transport system that has changed the face of UK-EU trade (time is money) and long-term aspirations from consumers (e- commerce…) *Her Majesty Queen Elisabeth II, President François Mitterrand 9 Investor Day June 2018
BREXIT: NEGOTIATIONS LIKELY TO CONTINUE UNTIL NOVEMBER 30TH UK Position on Border Likely outcome “We want a comprehensive free trade agreement An agreement with a time limited transition and a new customs agreement which allows period for implementation of customs for trade which is as frictionless as possible” and animal and plant health controls T echnology will speed up border processing *Prime Minister’s Spokesperson Eurotunnel’s team closely involved in practical preparations with authorities on both sides. Eg. 500+ visits to site and meetings with EU & British politicians & officials since 2016 providing key insights 10 10 Investor Day June 2018
BREXIT: EUROTUNNEL’S TRACK RECORD IN MANAGING TRANSFORMATION 2013/2015 Exit Checks 2015 Migrant crisis Very negative perception from specialists in 2013/2014 Private company, Bi-lateral treaty (“the end of fluidity” / “hours of queues”.) Vital trading link: Discreet, efficient negotiations from our PA team Capacity to access top levels of Government across departments Capacity to deliver large transformation of infrastructure T echnology led solution & process in less than 4 months Leading to Zero additional time In view of Brexit and required proximity with Governments, for customers and Zero impact on traffic the Board asked Jacques Gounon to remain a further 2-years Strong track record with Government and developing innovative solutions leads to confidence in delivering smooth border for Brexit 11 11 Investor Day June 2018
BREXIT Given Eurotunnel’ uniq ique ue pos osition ition, our key Government insights , and our track record in managing transition, we strongly believe that the Group will strengthen its competitive position after the Brexit 12 12 Investor Day June 2018
LONG CONCESSION AND LONG DATED FINANCING: ABILITY TO CREATE FURTHER VALUE EBITDA Net debt/EBITDA 2017 2022 2017 2022 Very long term concession allows for a higher leverage than what is implied by our 2022 target. Maintaining an appropriate leverage could generate additional cashflow for the Group and its shareholders 13 13 Investor Day June 2018
Sustainable growth and value creation SOLID RETURN TO SHAREHOLDERS T otal amount distributed including share buy backs €1,100M since 2008: €1.0Bn €110M Dividend policy: +120% +€0.05 p.a. €500M Past 5Y Next 5Y Dividend Share buy back 14 14 Investor Day June 2018
2 EUROTUNNEL SHUTTLE SERVICES 15 15 Investor Day June 2018
CONTRIBUTION TO GROUP REVENUES 2017 Europorte 2 % Other revenues 11 % €118 M €18 M Other revenues 2 % Railway €18 M 32 % Network €293 M Railway 28 % Network €293 M Getlink Eurotunnel 2017 revenues 2017 revenues Eurotunnel Eurotunnel 59 % 68 % Shuttles Shuttles €604 M €604 M Combined Freight & Passenger shuttle services delivered 59% of group revenues & 66% of Eurotunnel revenues in 2017 Key characteristic: non regulated tariffs, freedom to set prices Source: Getlink Annual Review 2017 16 16 Investor Day June 2018
SUSTAINED GROWTH OVER TIME, DRIVEN BY YIELD Eurotunnel Shuttle services Revenue* Yield +24% Volume vs. Eurozone inflation +6% (CPI 2011-2017) vs. UK inflation +11% (CPI 2011-2017) Promoting value, not price *At constant currency Source: Eurotunnel 2011-2017 17 17 Investor Day June 2018
KEY FEATURES OF SHORT STRAITS OPERATORS Eurotunnel P&O DFDS Folkestone-Calais Dover-Calais Dover-Calais | Dover-Dunkirk 18 Freight Shuttles 6 Ferries 6 Ferries 9 Passenger Shuttles Mixed Freight & Passenger Mixed Freight & Passenger Up to 235 crossings/day by direction Up to 28 crossings/day by direction Up to 28 crossings/day by direction Freight 144; Pax 91 DOCA 16; DODU 12 DOCA 90 min crossing time 35 min crossing time 90 min crossing time DODU 120 min crossing time Cost of 1 freight shuttle: €20 M Cost of 1 ferry: +€150 M Extra capacity: +5% Extra capacity: +15/20% 18 18 Investor Day June 2018
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