Investor Presentation FY17 Interim Results - 30 September 2016 - PowerPoint PPT Presentation

Investor Presentation FY17 Interim Results - 30 September 2016 December 2016

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Introduction Neil Thompson mpson Chief Financial Officer, MAG Ken O’Toole Divisional Chief Executive Officer, Manchester Airport 3

Contents  FY17 H H1 H Highlight ights  Passe seng nger r Growth h & Co Commerc rcial ial Developm pment nt  Trading ding Perfor orma manc nce  Capital al Invest stme ment nt  Financin ncing 4

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FY17 H1 Highlights Anoth ther recor ord d summ mmer for MAG with financial cial outpe performa formance ce agains inst t budget t and continu tinued d invest stment t acros oss s the Group p to support ort long-te term rm growth th Continued strong growth carrying 32 million passengers with increase in load factors and new destinations. STN annual passengers top 24 million for only the second time in its history. Awarded ‘Best London Airport’ 2016. MAN passenger numbers at an all-time high with over 25 million annual passengers and more cargo processed than ever before. Expansion of capacity and routes. First direct route to Beijing outside of London. EBITDA ahead of 5-year plan and 7% up on prior year. STN £80m terminal transformation complete and delivering benefits through increased retail yields. MAN Terminal Development - phased and modular to optimise value and manage risk. Detailed design underway. 2016 CSR showed activities at MAG airports contribute £6.2bn for the UK economy and for our local communities. Well positioned for continued growth – aviation pipeline, spare runway capacity, focussed MAN & STN investment. Inherent resilience in our core business, together with a robust financial strategy, means MAG is in a strong position to deal with potential Brexit impacts. 6 6

FY17 H1 Financial Highlights The continuing success of MAG’s commercial and operational strategy is reflected in a 8% year on year increase in passenger senger numbe bers rs and a 7% increas ase in EBITDA EBITD TDA: £215.9 .9m m (+7%) %) Group p Pax: 32.0 .0m m (+8%) %) Strong EBITDA growth Commercial strategy driving passenger growth ahead of plan Cash genera erate ted from MAN Pax: : 15.2 .2m m (+10%) %) operations ations: : £183.4 .4m m Annual MAN passengers at (+2%) %) all time high passing 25m Excellent cash conversion for the first time Capital tal Inves estm tment ent: : STN Pax: 13.3 .3m m (+6%) %) £65.2 .2m m (+44%) %) STN about to surpass Improving efficiency and annual record supporting growth EMA A and BOH Pax: 3.5 .5m m Leverage: age: 2.8 .8x (-0.2 .2x) (+3%) %). . Cargo income ome up Conservative financial by 4% across ss MAG airpor orts ts leverage Source: MAHL FY17 Interim Report & Accounts Note: For a reconciliation between MAHL and MAGIL FY17 Interim Results see Appendix on Page 29 7 7

Brexit Brexit it consens sensus s forecas casts ts indica icate te slow ow-dow down in growt wth. MAG's 's Financial cial strateg ategy y mean ans s strong g finan ancial cial position ition to deal with the potential tial impact acts of Brexit  Strong Financial Position: Airport Businesses in strong positions:  financial performance ahead of five-year plan  Manchester: and strong growth in its core businesses;  Operates as northern hub – strong catchment area  a capital programme that can be flexed to and good geographical location for airlines. economic conditions, with no significant in-train  Stansted: contractual commitments;  Strength in low cost carrier base historically the most  low leverage and debt levels compared to its resilient passenger segment. higher medium-term optimal levels;  Significant passenger overspill from LHR/LGW system  commitment to two strong BBB+ ratings enabling in the 10-15 years before a runway is built at LHR. efficient capital market access;  50% inbound traffic benefit from FX rates.  core long-term bond financing of £810m; and  Availability of a recently secured £500m five-year bank facility.  MAG will be working closely with the rest of the industry to ensure that the UK remains a member of the single aviation market – at no point have the excellent air links this country’s airports provide been more vital to UK economic growth.  Latest set of results demonstrates resilience to economic and political uncertainty. 8

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Commercial Growth Strategy Yielding Results The success of MAG’s commercial strategy is reflected in a 8% year -on on-ye year ar incre reas ase in passenger sengers  MAN and STN pax growing strongly. FY17 7 H1 Pass sseng engers ers (millions ons)  Benefiting from a commercial strategy that Group incentivises growth.  Increased frequencies, additional capacity, and new routes.  Record passenger numbers.  Around 70 airlines flying to c.200 MAN destinations.  Demonstrates importance of MAN to UK aviation and wider capacity debate.  More European cities than any other UK Airport - Jet2’s first Southern base opening in 2017. STN  Named ‘Best London Airport’ 2016 - Growing role in meeting demand in the London system.  EMA and BOH delivering broadly stable passenger numbers.  EMA is now DHL’s second biggest global EMA & BOH hub and continues to be the biggest UK all-cargo airport. Source: MAHL FY17 Interim Report & Accounts Note: For a reconciliation between MAHL and MAGIL FY17 Interim Results see Appendix on Page 29 10

Long- term Passenger Trends…Success of MAG’s Strategy The continued strong growth at MAN and STN illustrates the success of MAG’s commercial strategy and the extensive reach of the catch chment ment areas MAN...now N...now in sixth xth year ar of sustaine ustained growt wth STN…strongest growth in the UK Acquisition - February 2013 26.0 24.8 26.0 25.0 23.5 24.0 24.0 23.2 24.0 22.3 23.0 Passengers (m) gers (m) 22.0 20.8 22.0 20.9 21.0 senge 19.8 20.0 19.1 20.0 Passe 19.0 18.3 18.0 17.7 17.8 17.5 18.0 18.0 17.0 16.0 16.0 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Sep-16 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Sep-16 EMA…consistent performance BOH…broadly stable but small component of MAG total 0.8 4.8 0.7 0.7 4.7 0.7 0.7 4.6 0.7 0.7 0.7 4.5 0.6 4.6 Passengers (m) Passengers (m) 4.3 0.6 4.4 4.3 0.5 4.2 4.1 4.0 0.4 4.0 0.3 3.8 0.2 3.6 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Sep-16 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Sep-16 Source: Management Information Note: Volumes for Sept-16 on a rolling 12 months basis 11

Above-Market Growth & Rising Market Share A comm mmercial rcial strat ategy gy that t incentivis tivises s growth th is translat slating ing into o above-marke market performa ormance ce and rising ing marke ket t share (20.4% 4% of UK marke ket t reflectin ting g +0.3% % increas ase)* )* MAG AG has s 2 o of the e top 4 UK airports orts for pass sseng enger growth. owth. Both h MAN N and STN N have e added ed more re pass sseng ngers ers than n LHR. R. MAN N is the fast stes est t growing wing outs tside e of the Lond ndon on syst stem em. . STN is the lead ading ng UK airport ort for Europ opea ean n touris rists ts. Source: CAA – Rolling 12 months to June 2016 – CAA data unavailable from July to September * 28.8% excluding Heathrow 12

A Growing and Diversified Route Network MAG continu inues s to diversify rsify its s routes and airline ine network ork and now serves ves 279 routes – more than any other UK airpor ort t group. Capacity city is growing ing togeth ther r with introd oduction ction of some me exciting iting new routes s announced ced for Winter r 2016 and Summ mmer r 2017 North Americ ica Europe pe / North Afric ica   Jet2 - new 6 aircraft base at STN from Addit dition ional MAN – New York Summer’17, serving 21 destinations capacity with Thomas Cook in  Summer’16 New Ryana nair ir and EasyJet yJet rout utes from  STN/MAN/BOH in Winter ‘16 New MAN Thomas Cook link to  Los Angeles and Boston for New Ryanair ir routes from EMA to Summer’16, Tobago from Girona, Reus and Budapest  Winter’16 and San Francisco New Monarch services from MAN to from 2017 Zagreb, Oporto and Stockholm this  Virgin gin to operate to San Francisco winter  and Boston from 2017 from MAN Flybe be – new winter services from MAN to  Singa gapo pore Airli lines to commence Chambery and Innsbruck  new service to Houston in New Naple ples and d Dubr brovnik ik services Winter’16 from BOH   New Thomson services from STN New Vueling ing and d Norwegian services to Montego Bay in 2017 from MAN  Coba balt lt Aero – new service to Cyprus from MAN Middl dle East Far East  Adding capacity – now over 50 50 direct links ks a week from MAN  Haina inan Airli lines launc unched d a 4 x x  New Shaheen Air services from weekly kly service to Beijing from MAN MAN to Islamabad - 4 times per in June 2016 week  Singapore Airlines to operate non-  Emirates at MAN to become an stop p to Singapo pore all Airbus A380 operation from  Thomson set to grow w its MAN long January 2017 13 haul network with services to Source: Management Information Phuket, Mauritius and Goa

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