Manchester Airports Group Investor Presentation February 2014 - PowerPoint PPT Presentation

Manchester Airports Group Investor Presentation February 2014

Contents  CREDIT HI CREDIT HIGHLIGHTS GHLIGHTS  ASSET O ASSET OVERVIEW ERVIEW  FINANCIAL HIGH FINANCIAL HIGHLIGH LIGHTS TS  TRA TRANSA SACTION S ION STRUC RUCTURE TURE  RA RATING TING A AGENCY CY FEEDBA FEEDBACK CK  INDICA INDICATIVE TIVE TERMS TERMS 2

Introduction Charl Charlie Corni Cornish – – Group roup Chie Chief Executi Executive Appointed Group Chief Executive in October 2010. Prior to joining MAG, Charlie was Managing Director of Utility Solutions, the commercial business of United Utilities (UU) with operations in the UK, Middle East, Australia, Bulgaria, Poland, Estonia and Philippines and was a Director of UU plc. Previously he worked for a number of manufacturing and service companies including Plessey Telecommunications, British Aerospace and ABF Ken O’Toole FCA Ken O’Toole FCA – Chief hief Commerci Commercial Offi Officer cer Ken was appointed as Chief Commercial Officer in January 2012. Prior to that he spent six years with Ryanair Holdings plc, joining initially as Head of Revenue Management and latterly as Director of New Route Development. A qualified Chartered Accountant, his previous experience includes Musgrave Group, a leading Irish and UK based retailer, and Credit Suisse First Boston Neil Thompson Nei Thompson ACA, CTA ACA, CTA – Chief hief Financial Financial Offi Officer cer Joined MAG in 2005, being Commercial FD and then Corporate FD, prior to taking on the role of Chief Financial Officer in March 2011. Neil previously held senior finance roles at The MAN Group and ALSTOM, with responsibility across businesses in the UK, Europe, North America, Canada, India, Singapore and Australia. Prior to the power generation sector, Neil spent seven years in financial practice, specialising in Corporate Finance and M&A transactions, latterly with PricewaterhouseCoopers 3

CREDIT HIGHLIGHTS 4

Credit Highlights c.50m people live within 2 hours’ drive of a MAG airport – almost 70% of the UK population  A Truly N A y National Airport tional Airport  Closest counties have high average income per capita. Catchment areas served well by road and rail Group Group National footprint provides more commercial opportunities for airline and retail customers. Group’s scale affords  significant operational efficiencies MCC and District Councils are permanent, long-term shareholders; IFM has 25+ years investment horizon  Long-term, S Lo -term, Suppo portive rtive  Conservative opening leverage and ongoing commitment to prudent financial policy to support strong investment Shareholde eholders rs grade ratings  Equal proportion of aeronautical and non-aeronautical revenues Diversi Diversified Mix Mix Of Of Strong growth in retail yields in recent years at MAN following terminal investment, whilst commercialisation of  Revenues Reven car parking has also generated strong car park yield growth Diversified Mix Diversi Mix Of Of 275 routes served – more than any other UK airport group  Routes Route  20 new routes added April to September 2013 – including Moscow, Cairo, Gdansk, Krakow, Antigua, St Lucia Diversi Diversified Mix Mix Of Of Over 80 airline customers across low-cost, full service and charter  Airlines Airl es Long term contracts signed with 90% of customers de-risks growth  MAN and STN well invested with spare capacity  Wel Well-i -invest nvested With With  Modest investment programme with potential to defer pending operational performance and economic outlook Predi Predicta tabl ble Costs Costs Capex at STN focused on retail re-development and new airside layout  Experi Experienced enced New management team has grown Legacy MAG revenue by 7.0% and EBITDA by 9.3% CAGR since 2011  Management Team Management Team  Intent to replicate MAN success at STN through terminal redevelopment, growing retail and car parking yields 5

Truly National: uly National: The UK’s Second Largest Airports Group MAG is G is the U UK’s seco ’s second la largest a est airport g group se servin ing 4 42 million llion p passen ssenger ers p s per a annum Manchest Manchester Airpo Airport - t - MAN AN Key Proforma Key Profo ma Metrics Metrics  UK’s 3rd larg UK’s 3rd largest airp airport rt  70+ airlines & 200+ destinations  Passengers (m) 20 18 5 42m 42m 2 runways with potential 64% spa 64% spare e capa capacity ty  £638m £638m 21m people within a 2 hour drive Revenues (£m) 307 244 87 0% 50% 100% MAN STN Other Lo London S on Stansted Airport - sted Airport - STN East Midland East Midl ands Airport Airport - EMA EMA .  UK’s 4th UK’s 4th larg largest airpo airport  UK’s UK’s larg largest fre freigh ght t airpo airport after after  150+ destinations Heathr Heathrow – – 296,000 tonnes p.a.   1 runway with 50% spa 50% spare e capa capacity ty Located next to key road interchanges  25m people within two hours’’ drive – four hours from virtually all UK  Acquired February 2013 commerce Bournemo Bourne mouth Airpor Airport - t - BOH OH  Significant investment in new t terminal al increasing passenger capacity to 3.0m MAG Property MAG Property p.a.   Weal Wealthy catc y catchment t area area MAG has a property portfolio of >  Large land holding – on-s -site ite b business siness £550m Ca Catch tchment a ent area ea within 2 hours’ drive of:  park par c.500 properties and 1,000 tenants MAN STN Source: MAG Annual report, MAG Pro Forma Consolidated Financial Statements, Prospectus 6

Long-Term, Supportive Shareholders IFM sel IFM selected by MA by MAG sharehol shareholders rs as as equity partner for equity partner for alignme alignment of t of interests interests and experie and experience ce in sector in sector Stable, long-term long-term shareholders Ownershi Owner hip structu p structure Stable, shareholders  Fully aligned intere Full aligned interests sts reflected in equal equal voting rig voting rights ts for IFM and MCC Greater Manchester Greater Manchester The The Co Council uncil of the City the City of IFM IFM  Boroug rough Counc h Councils ils Manc Ma nchester hester (“MCC (“MCC”) ”) Long term Long term com commitme ment nt matches IFM pension fund ownership  25+ years investment horizon 29.0% 29.0% 35.5% 35.5% 35.5% 35.5%  Open-ended fund structure with no exit requirement  Shared control – 50% Shareholders suppor Sharehold rs support m management str nagement strategy tegy Manchester Airports Manchester Airports voting rights each  Holdings Limited Holdings Limited Dividend policy contemplates and monitors leverage, credit rating and growth investments Manchester Airport Group Manchester Airport Group IFM 1 IFM Investments Limited Investments Limited  Leading Leading invest investment manager wi ment manager with £28 th £28bn equi bn equity ty funds funds under under Manchester Airport Group Manchester Airport Group management manageme nt Manchester Airport Group Manchester Airport Group Fu Funding plc nding plc Finance Limited Finance Limited  Interest in MAG is held in an open ended fund  33% of IFM’s investment portfolio in infrastructure sector  East Midlands Eas Midlands Airport Airport Extensive experience in the airport sector through shareholdings Nottingham Nottingham Derby Derby Manchester Airport Plc Manchester Airport Plc Stanst ansted Airport Airport Limit Limited in: Leice Le icester Limit r Limited  Mel Melbou ourn rne Airp Airport ort, acquired in 1997, 28.2m passengers  Brisba isbane Airport ne Airport, acquired in 1997, 21.0m passengers  Perth Airport Perth Airport, acquired in 1997, 12.6m passengers Bour urnemo nemouth Inter uth Internatio ional nal Eas East Midlands Midlands Internation International l Airport Airport Limit Limited Airport Airport Limit Limited  Ade Adelaide Airport aide Airport, acquired in 2002, 7.7m passengers Notes/Sources: (1) Company Website. Passenger numbers for FY 2012 7

Overview of Manchester Airport MAN serv MA serves the North of England – the North of England – a regi region with a on with a divers diverse pass passenger base enger base Introduction to Introduct on to MAN MAN 201 2011 Strat Strategy gy del deliver ering strong g strong EBITDA EBITDA growt growth  Third largest airport in the UK with 19.8m passengers p.a. EBITDA (£m) EBITD (£m) Passeng Passengers rs (m) (m)  Diversified customer offer with 70 airlines serving over 200 19.8 140.0 20.0 134.6 destinations 19.1 126.9 130.0 19.0  Three terminals with combined capacity of 28 million passengers, 17.7 120.0 which can be increased to 42 million passengers with relatively 18.0 111.8 modest investment 110.0 17.0 CAGR: 9.7% CAGR: 9.7%  CAGR: 5.8% CAGR: 5.8% Potential to grow its annual terminal capacity to 55 million 100.0 16.0 passengers without any further runway-related capex 2010/11 2011/12 2012/13 2010/11 2011/12 2012/13 1 of 1 of onl only 2 2 Airports ts i in UK wi UK with 2 2 run runway ays Divers versified ified a airline o e offer 8