Investor Presentation Offer of Fixed Rate 2023 Bonds 2 May 2016
Important Information and Disclaimer Disclaimer Important Information This document does not constitute a recommendation by the Issuer, ANZ Bank New The offer of debt securities by Wellington International Airport Limited (WIAL or Zealand Limited (Organising Participant and Joint Lead Manager), First NZ Capital the Issuer) is made in reliance upon the exclusion in clause 19 of schedule 1 of Securities Limited, Forsyth Barr Limited, Westpac Banking Corporation (acting the Financial Markets Conduct Act 2013 (FMCA). through its New Zealand branch) (Together Joint Lead Managers), Trustees The offer of WIAL’s fixed rate bonds (2023 Bonds) is an offer of bonds that have Executors Limited (Supervisor), nor any of their respective directors, officers, identical rights, privileges, limitations and conditions (except for the interest rate employees, affiliates or agents to subscribe for, or purchase, any of the 2023 Bonds. and maturity date) as WIAL’s $75,000,000 unsecured, unsubordinated, fixed rate, To the extent permitted by law, none of the Issuer, Joint Lead Managers or Supervisor interest bearing bonds maturing on 15 May 2021 which are currently quoted on nor any of their respective directors, officers, employees, affiliates or agents accept the NZX Debt Market under the ticker code WIA020 (Existing Bonds). The 2023 any liability whatsoever for any loss arising from this document or its contents, or Bonds are of the same class as the Existing Bonds for the purposes of the FMCA otherwise in connection with the offer or any person’s investment in these 2023 and the Financial Markets Conduct Regulations 2014. Bonds. The Issuer is subject to a disclosure obligation that requires it to notify certain This document is for preliminary information purposes only and is not an offer to sell material information to NZX Limited (NZX) for the purpose of that information or the solicitation of an offer to purchase or subscribe for the 2023 Bonds and no part being made available to participants in the market and that information can be of it shall form the basis of or be relied upon in connection with any contract or found by visiting www.nzx.com/companies/WIA. commitment whatsoever. The information in this document is given in good faith and has been obtained from sources believed to be reliable and accurate at the date of The Existing Bonds are the only debt securities of WIAL that are currently quoted preparation, but its accuracy, correctness and completeness cannot be guaranteed. and of the same class as the 2023 Bonds. A terms sheet (Terms Sheet) has been prepared by the Issuer in respect of the offer Investors should look to the market price of the Existing Bonds (WIA020) (which of the 2023 Bonds, which sets out how 2023 Bonds may be applied for. have a fixed interest rate of 6.25% per annum) to find out how the market assesses the returns and risk premium for those bonds. Application has been made to NZX for permission to quote the 2023 Bonds on the NZX Debt Market and all the requirements of NZX relating thereto that can be complied with on or before the distribution of the Terms Sheet have been duly complied with. However, NZX accepts no responsibility for any statement in this document. NZX is a licensed market operator, and the NZX Debt Market is a licensed market under the FMCA. Page 1
Agenda • Business Overview • Aeronautical and Commercial Business • Capital Expenditure – Major Projects • Capital Expenditure – Runway Extension • Financial Results • Regulatory Environment • Treasury • Key Credit Considerations • Bond Offer Issue Terms & Timetable • Questions? Page 2
Business Overview – Gateway to capital and central region • WIAL employs approximately 94 of the 1,500 people estimated to work at the airport • 5.8 million passengers and 96,000 aircraft movements for year ended 31 March 2016 • Passenger growth is driven by airline competition, economic growth and propensity to travel • Net profit after tax for year ended 31 March 2015 was 1959 $9.7m • EBITDAF before subvention payment 1 for year ended 31 March 2015 was $82.1m • $843m in total assets and $427m total liabilities as at 30 September 2015 (unaudited) TODAY 1. EBITDAF before subvention payment is a non-GAAP financial measure – refer to slide 9 for further detail. Page 3
Business Overview – High service quality and BBB+ credit rating • Rated amongst the best airports for service quality in Australasia (#2 in Australasia in 2015 ASQ annual survey) • Most cost efficient of the major airports in Australasia • NZ Airports (wholly owned by Infratil) 66% ownership (since 1998) and Wellington City Council 34% ownership • Long-term credit rating of BBB+/Stable Outlook (S&P) • Light handed airport regulation • $250m forecast infrastructure expenditure over next five years ($125m aeronautical facilities) Page 4
Aeronautical Business – Consistent passenger growth and proven resilience • Aeronautical charges approximately 60% of total revenue • Passengers (“pax”) mainly domestic (approximately 85%) with high proportion of business travellers and passengers visiting friends/family • Aeronautical charges reset at least once every five years under Airport Authorities Act 1966 (AAA) – current prices set for 1 June Resilience to external negative events, e.g. pandemics, 2014 to 31 March 2019 GFC, earthquakes and airline entry/exit • Strong demand on main trunk and regional routes, driven by an increase in Jetstar capacity and competitive response from Air NZ • Trans-Tasman market is changing with Air New Zealand/Virgin Australia and Qantas/Emirates alliances encouraging better connectivity with long- haul markets, and Jetstar’s recent launch stimulating point-to-point traffic Last 10 years average pax growth 2.4% pa • Multiple new routes launched in last 18 months including: • Fiji Airways commenced year-round service to Nadi • Jetstar flying the Tasman (Gold Coast and Melbourne) • Jetstar regional services to Dunedin and Nelson • Singapore Airlines to commence 4x weekly service to Singapore via Canberra from September Page 5
Commercial Business – New initiatives & capital investment driving revenue growth • Terminal Extension – 6,000sqm extension will meet future pax growth and make way for new retail and food and beverage offerings in mid 2016 • Main Terminal Optimisation – existing terminal area to be opened up and optimised for retail, food and beverage, driving up income per passenger with improved mix and high yield offerings • Duty free contract tendered and under review – announcement due shortly with expected uplift in revenue • Multi-level car park (1,000 new spaces) – construction commenced in February 2016 to support growth in the car parking business – scheduled for completion in late 2017 • Rydges Airport Hotel (4 star, 134 bed) – construction to start in late 2016 (subject to final design and construction tender) • Airport Retail Park – 2,400sqm expansion complete – new tenants include World Market, Pet Centre, Chipmunks Playland and House of Beds Page 6
Capital Expenditure – $250m forecast over five years Major Projects • Expansion of the Main Terminal Building and Southern Piers (in progress) • Redevelopment of the land transport hub and parking infrastructure including multi-level car parking building (in progress) • On-site airport hotel (scheduled to commence late 2016) • International arrivals expansion – consultation with airlines to commence in 2016 • Runway and taxiway works (ongoing) • Noise mitigation programme of local properties (ongoing) • Major capex projects consistent with 2030 Master Plan – further information available at www.wellingtonairport.co.nz/corporate/2030-masterplan Page 7
Runway Extension – Applying for resource consent • Development cost not included in $250m capex forecast • 350 metre extension at circa $300m to accommodate long haul flights • 80% of public submissions supportive in some form or another • Required funding would be on commercial terms – likely to require support from central and/or local Government • Regulatory approval obtained from the Civil Aviation Authority – currently being challenged by NZ Airline Pilots’ Association • Filing for consent in late April – to be lodged with Wellington City Council and Greater Wellington Regional Council • At least a 10 year option to construct (subject to consent) • Further information available at www.connectwellington.co.nz Page 8
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