HEATHROW (SP) LIMITED R E S U LT S F O R T H E Y E A R E N D E - PowerPoint PPT Presentation

Classification: Internal HEATHROW (SP) LIMITED R E S U LT S F O R T H E Y E A R E N D E D 3 1 s t D E C E M B E R 2 0 1 9

Classification: Internal TH E DEC ADE REV I EW O F CONTENTS H I GH L I GH TS 2019 H I GH L I GH TS BU S I NES S Review of the Decade 03 2019 Highlights 05 Business Highlights 07 REV I EW F I NANC I AL Financial Review 17 Strategic Update 26 Appendices 29 U PDATE S TRATEGI C APPENDI C ES

REV I EW O F 2019 BU S I NES S F I NANC I AL S TRATEGI C APPENDI C ES TH E DEC ADE H I GH L I GH TS H I GH L I GH TS REV I EW U PDATE REVIEW OF THE DECADE Classification: Internal

Classification: Internal TH E DEC ADE REV I EW O F H I GH L I GH TS 2019 Where we • Bottom 10 airport • 66 million passengers in were service in the world 2010 • Regulatory uncertainty H I GH L I GH TS BU S I NES S • 0.67 lost time injuries* • 71% departure • Underperformed Q5 • Expansion blocked punctuality settlement • Edie “responsible business REV I EW F I NANC I AL • Top 10 airport service in • 81 million passengers in • 0.34 lost time injuries* of the year” award the world 2019 Today • London Living Wage • Carbon-neutral airport • Terminal 2 on time and • Operating cost per employer operations on budget passenger 24% lower • Sunday Times Top 30 • Overwhelming • 79% departure • Highest retail income per Large Employer parliamentary vote for U PDATE S TRATEGI C punctuality passenger in the world expansion • At least 142 million • Best airport service in • Connecting all of the UK Our future passengers • Best in class safety the world to global growth plans • Increased airline APPENDI C ES • Up to 40,000 new local • Integrated transport • Zero-carbon airport competition and lower jobs hub operations airfares • 10,000 apprenticeships • Best connected airport • Accelerating the era of • 2x current cargo capacity globally sustainable flight for British exporters *Lost time injuries is a moving annual frequency rate of the number of incidents in the last 12 months per 100,000 working hours. Page 4 See page 32 for notes, sources and defined terms

REV I EW O F 2019 BU S I NES S F I NANC I AL S TRATEGI C APPENDI C ES TH E DEC ADE H I GH L I GH TS H I GH L I GH TS REV I EW U PDATE 2019 HIGHLIGHTS Classification: Internal

Classification: Internal STRONG TH E DEC ADE REV I EW O F PERFORMANCE IN 2019 H I GH L I GH TS 2019 H I GH L I GH TS BU S I NES S Operational highlights Financial performance Strategic priorities REV I EW F I NANC I AL • Record 80.9 million • Adjusted EBITDA (pre IFRS16) • Greater resilience, passengers up 1.0% up 1.7% to £1,869 million better service, lower cost • Best airport in Western Europe • Investing for future growth • Net zero-carbon aviation for 5th year running U PDATE S TRATEGI C • Strong global appetite to • Sustainable, affordable, • Strong service standards with invest in Heathrow with financeable and deliverable more people travelling on time £2.1 billion raised expanded Heathrow with their luggage APPENDI C ES Page 6 See page 32 for notes, sources and defined terms

REV I EW O F 2019 BU S I NES S F I NANC I AL S TRATEGI C APPENDI C ES TH E DEC ADE H I GH L I GH TS H I GH L I GH TS REV I EW U PDATE BUSINESS HIGHLIGHTS Classification: Internal

Classification: Internal TH E DEC ADE REV I EW O F Passenger traffic at European hubs Passenger traffic by market – 2019 vs 2018 H I GH L I GH TS 2019 Year on year growth in traffic for 12 months to 31 December 2019 +6.6% UK 4.8m +5.4% Europe +0.9% North 33.2m America M. East (0.5%) H I GH L I GH TS BU S I NES S 18.8m 7.8m +1.2% +4.1% Africa 3.5m Asia +5.3% +1.5% Pacific Latin +1.0% +0.9% 11.4m America (1.1%) 1.4m +2.3% REV I EW F I NANC I AL Schiphol Heathrow Frankfurt Charles de Gaulle Madrid Runways 4 4 4 6 2 80.9 million passengers Annual +1.0% passengers (m) 71.7 80.9 70.6 76.2 61.7 2018 2019 2018 2019 U PDATE S TRATEGI C Passengers ATM 472,744 473,233 Long-haul traffic growth (%) 3.1 2.2 Load factors (%) 79.4 80.0 Short-haul traffic growth (%) 2.2 (0.3) Seats per ATM 213.4 213.7 New routes to date: APPENDI C ES Cargo tonnage (‘000) 1,700 1,587 British Airways: Charleston, Garuda Indonesia: Bali Pittsburgh, Kansai, Dammam, Valencia Pakistan International Airline: Flybe: Newquay, Guernsey, Sialkot Isle of Man Page 8

Classification: Internal TH E DEC ADE REV I EW O F H I GH L I GH TS 2019 Quarterly passenger satisfaction Passenger satisfaction European ranking 2019 Q4 2009 – Q4 2019 4.30 4.30 4.17 ASQ score (out of 5) ASQ score (out of 5) 4.10 4.10 H I GH L I GH TS BU S I NES S 3.90 3.75 3.90 3.70 3.70 3.50 3.50 3.30 Q4-09 Q2-10 Q4-10 Q2-11 Q4-11 Q2-12 Q4-12 Q2-13 Q4-13 Q2-14 Q4-14 Q2-15 Q4-15 Q2-16 Q4-16 Q2-17 Q4-17 Q2-18 Q4-18 Q2-19 Q4-19 LHR 2009 LHR 2019 REV I EW F I NANC I AL European competitors European comparators Heathrow European top quartile European average Departures Baggage performance Within 15 minutes of schedule Connection rate per 1,000 passengers U PDATE S TRATEGI C 85% 99% 99.0% 98.8% 79% 78% 77% 99% 75% 98.1% 98% 65% 97% 2009 2018 2019 APPENDI C ES 2009 2018 2019 Terminal 5 - World’s Best Airport Terminal Best Airport in Western Europe World’s Best Airport Shopping Page 9 See page 32 for notes, sources and defined terms

Classification: Internal TH E DEC ADE REV I EW O F Completed To come H I GH L I GH TS 2019 Heathrow Heathrow consultation Government 1 launched Heathrow Innovation Partners short list H I GH L I GH TS BU S I NES S REV I EW F I NANC I AL 2018 2028-2029 2021 2019 2020 2022 U PDATE S TRATEGI C Government consultation on Heathrow statutory Heathrow submits Government Runway draft National Policy consultation Development Consent decision to opens Statement (‘NPS’) Order (DCO) application grant DCO Airspace and Future NPS consultation 2 Operations consultation APPENDI C ES Parliamentary scrutiny NPS ‘designated’ by Government Page 10

Classification: Internal TH E DEC ADE REV I EW O F H I GH L I GH TS 2019 HEATHROW 2.0 PILLAR SUSTAINABLE DEVELOPMENT GOALS H I GH L I GH TS BU S I NES S A GREAT PLACE TO WORK REV I EW F I NANC I AL A GREAT PLACE TO LIVE A THRIVING SUSTAINABLE U PDATE S TRATEGI C ECONOMY APPENDI C ES A WORLD WORTH TRAVELLING Page 11

Classification: Internal TH E DEC ADE REV I EW O F Our Environmentally Managed Growth framework H I GH L I GH TS 2019 Mitigating the environmental impact of construction. Capacity to be released based on legally binding, strict environmental limits. Limits based around: H I GH L I GH TS BU S I NES S • Noise and Air Quality; • Surface Access; and • Carbon. Independent Scrutiny Panel to validate monitoring and ensure compliance. REV I EW F I NANC I AL AIRCRAFT NOISE AIR QUALITY SURFACE ACCESS CARBON 25% reduction in colleague car trips by Heathrow Ultra Low U PDATE S TRATEGI C 6.5 hour ban on Delivered Carbon- 2030 and 50% by Emissions Zone by 2022. scheduled night flights. neutral airport 2040. operations. Expanded infrastructure Fewer people impacted At least 50% of for charging electric and by noise contour than in Zero-carbon airport journeys made to the hybrid vehicles. 2013. operations by 2050. airport by public APPENDI C ES Vehicle access charge. Greatly expanded noise transport by 2030 and Aspire for Carbon- insulation programme at least 55% by 2040. neutral growth from the Surface Access Strategy for eligible properties. new runway. implementation. Improving bus and rail connectivity. Page 12

Classification: Internal TH E DEC ADE REV I EW O F Our carbon plan brings together partners in the industry, Government H I GH L I GH TS 2019 and passengers to get aviation to net zero emissions by 2050 Get our own house in order Decarbonise flight • Global aviation ‘high ambition coalition’ to agree • Airport infrastructure and vehicles industry net-zero emissions target H I GH L I GH TS BU S I NES S Eliminate carbon on the ground • Accelerate production and use of Sustainable • Vehicles to meet ultra-low emissions Alternative Fuels standards by 2025 • Support development of new aircraft technologies • Make it easier for all that travel in the Removing carbon from the atmosphere local area to reduce emissions from travel REV I EW F I NANC I AL on the ground • Help passengers to offset their flights and up our • We will become a world-leader on low own investment in natural and technological solutions carbon construction Heathrow’s 2018 carbon emissions Aviation and global emissions U PDATE S TRATEGI C Third party operational Colleague vehicles, 2% surface access, Global aviation industry contributes to 2% of all CO2 emissions Utilities, 1% 6% Passenger surface APPENDI C ES 2% access, 27% Aircraft in LTO, 64% 0% 5% 10% 15% 20% Page 13 See page 32 for notes, sources and defined terms