Classification: Public Heathrow (SP) Limited Results for nine months ended 30 September 2017 26 October 2017
Classification: Public Continued strong performance in 2017 • Record service standards complement award winning Operational operations performance 1 highlights • Record 59.1 million passengers, up 3.1% and strong cargo growth, up 10.5% • Revenue of £2,161 million, up 3.2%; Adjusted EBITDA of £1,347 million, up 5.7% Financial 2 performance • Strong cost control and better value • Over £1.0 billion in debt financing completed while simplifying capital structure • Raising service standards and operational resilience Strategic 3 • Focusing on further cost efficiencies and incremental aims revenue • Delivering expansion remains on track 2 See page 22 for notes, sources and defined terms
Classification: Public Strongest traffic growth for several years • Record traffic continues in 2017 Passenger traffic by market 9M 2017 versus 9M 2016 – growth primarily from record load factor of 78.5% UK • Long haul traffic key growth driver Europe 3.6m North America 24.7m – up 3.5% driven by Middle East and Asia Pacific +3.0% 13.2m +2.6% – Middle East up 10.5% due to A380s/new 1.0% services M. East Asia Pacific 5.8m 8.5m – Asia Pacific up 4.0% on growth in existing routes +10.5% +4.0% Africa • Good growth also seen in short haul Latin America 2.3m 1.0m – notable continental Europe increases due to extra -0.7% +4.1% flights and larger planes – continued domestic increase with Flybe services to Scotland • Cargo up 10.5% mainly due to North America 59.1 million passengers and Middle East +3.1% • 12 month rolling traffic at 77.4 million suggests 2017 outturn likely to exceed 76.7 million forecast in June 2017 investor report 3
Classification: Public Heathrow’s traffic growth remains resilient despite capacity constraints Passenger traffic at European hubs Year on year growth in traffic for Recent evolution of change 12 months to 30 September 2017 in rolling 12 month traffic +8.0% 14.0% 12.0% +6.5% 10.0% Passenger volume change Heathrow 8.0% +4.9% 6.0% Frankfurt +4.1% 4.0% Charles de Gaulle 2.0% +2.8% Istanbul 0.0% +1.6% -2.0% Schiphol -4.0% Madrid -6.0% Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Istanbul Heathrow Frankfurt Charles Madrid Schiphol de Gaulle Annual 68.6 77.4 63.0 52.7 67.2 passengers (m) 61.8 Runways 3 4 4 6 2 4 4 See page 22 for notes, sources and defined terms
Classification: Public Record service standards complemented by robust operations Quarterly passenger satisfaction Passenger satisfaction European ranking Q3 2010 – Q3 2017 Q3 2017 4.30 4.20 4.14 ASQ score (out of 5) ASQ score (out of 5) 4.10 4.00 3.80 3.90 3.60 3.70 3.40 3.50 3.20 3.30 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 Q3-17 LHR European competitors European comparators Heathrow European top quartile European average Departures Baggage performance within 15 minutes of schedule misconnect rate per 1,000 passengers 50 90% 40 81% 79% 79% 40 80% 30 70% 14 14 63% 10 20 60% 10 50% 0 2007 2016 9M 2016 9M 2017 2007 2016 9M 2016 9M 2017 Best Airport in Western Europe 2016 Europe’s Best Airport World’s Best Airport Shopping (over 40millionpassengers) World’s Best Independent Airport Lounge 5 See page 22 for notes, sources and defined terms
Classification: Public Heathrow expansion on track Completed To come Heathrow Government CAA CAA NPS Heathrow CAA final decision on consultation consultation 2 consultation 1 report to CAA Category B on expansion launched Secretary of costs regulatory State on airline framework engagement 2019 2020 2021 2018 2017 CAA initial NPS ‘designated’ Government Heathrow Heathrow submits Government CAA policy Government proposals for by Government decision to consultation 2 Development consultation on draft update on H7 regulation decision to grant grant DCO Consent Order National Policy H7 review (DCO) application DCO Statement (NPS) followed by parliamentary scrutiny 6
Classification: Public Heathrow expansion on track • Government renews support for expansion – call for evidence to develop a new aviation strategy – 2nd NPS consultation on National Air Quality Strategy and updated demand forecast – transport select committee scrutiny – NPS vote expected in H1 2018 – broad cross party support (~70% of MPs) • Response to CAA’s expansion regulatory framework consultation – Q4 2017 further consultation on WACC ranges, Q6+2 price control and Category C costs • CAA encouraged by progress made in Heathrow and airline partners engagement • Other expansion milestones – very strong response to Logistics Hubs expression of interest – 4 out of 7 business summits held this year 7
Classification: Public Financial review
Classification: Public Financial highlights 9M 9M Versus (£ million) 2017 2016 9M 2016 2,161 2,093 Revenue +3.2% Operating costs 814 819 -0.6% Adjusted EBITDA 1,347 1,274 +5.7% 491 477 Capital expenditure +2.9% Change Sep Dec from 2017 2016 31 Dec 16 Consolidated nominal net debt Heathrow (SP) 12,440 11,908 +4.5% Heathrow Finance 13,455 13,005 +3.5% RAB 15,630 15,237 +2.6% 9 See page 22 for notes, sources and defined terms
Classification: Public Strong traffic and retail momentum boost revenues Analysis of revenue (£m) • Record traffic boosts aeronautical revenue 2,093 +3.2% 2,161 – up: traffic growth – down: lower tariff (RPI-1.5% formula); yield dilution 1,288 • Strong momentum in retail income growth 1,276 +0.9% – increased airside participation and greater spend per participating passenger – surging traffic and sterling depreciation boosted 492 449 +9.6% revenue, particularly duty and tax-free and airside specialist shops +3.5% 381 368 – catering income growth driven by Terminal 5 food outlet redevelopment and increased passenger 9M 2016 9M 2017 participation before boarding Aeronautical Retail Other – Terminal 4 luxury retail redevelopment started contributing to growth Per passenger (£) 9M 2016 9M 2017 Change 22.26 21.81 -2.1% Aeronautical revenue Retail revenue 7.83 8.33 +6.4% 10
Classification: Public Robust cost performance Analysis of operating costs (£m) • Operating costs 3.6% lower on a per passenger -0.6% 819 814 basis – achieved whilst welcoming 1.8 million extra 267 274 +2.6% passengers and maintaining world class service – cost reductions mainly in operational costs – new NATS contract, other third party suppliers and lower 194 -6.7% 181 insurance claims -3.0% – higher utility costs driven by non-recurrent one-off 132 128 credit in 2016 95 96 -1.0% – other costs down on expansion costs being +4.6% 136 130 capitalised 9M 2016 9M 2017 • On track to deliver £600 million Q6 efficiencies Employment Operational Maintenance – energy demand management, recurrent savings Business rates Utilities & Other from renegotiated contracts and organisational change 9M 2016 9M 2017 Change Per passenger (£) Operating costs 14.29 13.78 -3.6% 11 See page 22 for notes, sources and defined terms
Classification: Public Operating cash flow significantly exceeds capital expenditure and interest payments Heathrow (SP) nominal net debt January 2017 – September 2017 12,800 397 12,550 39 12,300 455 491 1,319 (£m) 12,050 12,440 272 * 11,800 11,908 197 11,550 11,300 Opening Capital Net interest paid Cash flow from Index-linked Net Tax/other Closing (1 January 2017) expenditure on external debt operations accretion dividends/other (30 September restricted 2017) payments * £272 million net restricted payments funded the £281 million dividends to ultimate shareholders in the financial period 12 See page 22 for notes, sources and defined terms
Classification: Public Substantial gearing headroom retained Evolution of gearing ratios 100% 95% HF 2025 & 2027 Notes covenant 90% HF 2019 Notes covenant 9M 2016 9M 2017 85% Class B gearing trigger 86.1% 84.9% 84.9% 85.4% 84.5% 80% 82.4% 75% 79.5% 79.6% 78.4% 78.7% 77.2% 78.2% 70% Class A gearing trigger (increases to 72.5% in April 2018) 65% 68.0% 68.0% 67.9% 67.6% 67.5% 66.7% 60% 31 December 2013 31 December 2014 31 December 2015 31 December 30 September 30 September 2016 2016 2017 Heathrow (SP) Class A gearing Heathrow (SP) Class B gearing Heathrow Finance gearing 13 See page 22 for notes, sources and defined terms
Recommend
More recommend
