Results Presentation 25 March 2015 Olivier Brousse Chief Executive - - PowerPoint PPT Presentation

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Results Presentation

25 March 2015

1

Olivier Brousse Chief Executive Officer

2

• Strong first set of results following listing

John Laing – a platform for growth

• Our successful flotation in February 2015 marks a new chapter in the

Group’s development

• Track record and pipeline provide us with confidence for the future

Successful IPO Outlook Strong results

• Expect to propose our first dividend at interim stage in August 2015

Dividend

3

Financial highlights

• Record year for new investments with £217 million committed

(2013 - £112 million)

• Realisations of £199 million from the sale of investments
• Investment portfolio valued at £772 million, up 13% on 2013
• 23% increase in NAV, from £528 million to £650 million
• Adjusted NAV of 210p per share
• Group profit before tax of £120 million, up 7% on 2013 on a like-for-like

basis

• 28% increase in external assets under management to £1 billion

4

Operational highlights

• Further international growth with two PPP investment commitments in

Australia and one in the US

• Expansion of renewable energy activities with the Group’s first investment

in a biomass project

• Both phases of the Manchester Waste project, one of our largest

investments, became operational in early 2015

• Successful launch of JLEN, a new listed fund targeting environmental

infrastructure assets

5

New investment commitments

Project Region PPP £m RE £m Total £m

IEP (Phase 2) UK 72.7

• 72.7

East West Link, Melbourne Asia Pacific 62.7

• 62.7

New Perth stadium Asia Pacific 28.6

• 28.6

Speyside biomass UK

• 13.3

13.3 I-4 Ultimate, Florida North America 18.3

• 18.3

IEP (Phase 1) - variation UK 1.0

• 1.0

City Greenwich Lewisham (DLR) – additional 12% shareholding UK 6.0

• 6.0

Other renewable energy projects UK/Europe

• 14.6

14.6 189.3 27.9 217.2

• PPP = Public Private Partnerships; RE = renewable energy

6

Realisations

Project JLEN £m JLIF £m Other £m Total £m

• East London Waste
• Dumfries & Galloway Waste
• Amber Solar Parks
• Bilsthorpe Wind Farm
• Hall Farm Wind Farm
• WALLP Wind Farms

97.8

• 97.8
• Shareholding in JLIF
• 38.9

38.9

• Groningen Tax Office
• Metropolitan Police SEL
• Kirklees Social Housing
• Surrey Street Lighting
• 37.1
• 37.1
• Croydon BWH
• Kinnegar
• 50% of New Perth Stadium
• 24.7

24.7 97.8 37.1 63.6 198.5

JLEN seed portfolio PPP sales to JLIF

• Money multiples on sales to JLIF were above long term average of 2.0 times
• Budget for realisations in 2015 of c. £100 million

7

Primary Investment – key projects under construction

Projects under construction

Dungavel Wind Farm, 26MW, UK Denver Eagle P3, United States Greater Manchester Waste, UK Intercity Express Programme, UK New Royal Adelaide Hospital, Australia

8

Secondary Investment – operational highlights

• Four wind farm projects became operational during 2014:

– Burton Wold, UK – 14.4MW – Carscreugh, UK – 15.3MW – Wear Point, UK – 8.2MW – Svartvallsberget, Sweden – 20MW

A1 Gdansk, Poland Severn River Crossing, UK M6, Hungary

9

Asia Pacific 23% Rest of Europe 35% North America 35% UK & Ireland 7%

Pipeline at 31 December 2014

PPP

Rest of Europe 54% UK & Ireland 46%

Renewable Energy

Expected financial close Project status No. 2015 (£m) 2016 (£m) 2017 (£m) Total (£m) Preferred bidder 2 49

• 49

Shortlisted 3 74

• 74

Pre-qualification 4 13 71

• 84

Pipeline 43 257 340 263 860 Total 52 393 411 263 1,067 Project status No. Total (£m) Commercial close 2 22 Exclusive 4 72 Pipeline 9 170 Total 15 264

10

Patrick O’D Bourke Group Finance Director

11

Key Performance Indicators

KPI 2014 £m 2013 £m NAV 649.8 528.0 Investment portfolio - net 772.0 684.4 Investment portfolio - gross 1,076.3 851.1 Cash yield from investments 24.3 29.3 New investment committed 217.2 112.4 Disposals 198.5 110.5 External Assets under Management £1.0bn £0.8bn

12

Summary Balance Sheet – at 31 December 2014

Pro-forma – re-presented IPO adjustments (£m) Adjusted Balance Sheet 31 Dec 2014 (£m) Key line items 31 Dec 2013 (£m) 30 Sep 2014 (£m) 31 Dec 2014 (£m) Portfolio book value 684.4 780.5 772.0 (79.8) 692.2 Cash collateral 7.9 47.7 60.5

• 60.5

Non-investment assets 5.5 7.0 8.1

• 8.1

Total investments 697.8 835.2 840.6 (79.8) 760.8 Other long term assets 9.1 8.6 3.4

• 3.4

Cash 49.3 57.1 19.5 99.8 119.3 Total Assets 756.2 900.9 863.5 20.0 883.5 Working capital and provisions (17.8) (20.2) (27.9)

• (27.9)

Cash borrowings (6.0) (53.5)

• Pension deficit (IAS 19)

(196.8) (189.6) (177.6) 100.0 (77.6) Other retirement benefit

• bligations

(7.6) (7.8) (8.2)

• (8.2)

Total Liabilities (228.2) (271.1) (213.7) 100.0 (113.7) Net Assets1 528.0 629.8 649.8 120.0 769.8

• 1. Exclude shareholder loan which was capitalised / waived in January 2015

Assets Liabilities

13

Primary and Secondary portfolio overview

Investment Portfolio Book Value at 31 December 2014

Primary Investment (projects under construction) Secondary Investment (projects in operation)  17 PPP projects  4 Renewable Energy projects  Book value excludes associated future cash injections of £304.3m1  14 PPP projects  5 Renewable Energy projects  Stake in JLEN (held at JLEN share price)

• 1. Representing letters of credit and cash collateral outstanding

£414m £292m £66m £772m

Value £m Valuation WADR

10.0% 9.2% 9.8%

14

Portfolio valuation bridge

Portfolio valuation movement – year ended 31 December 2014 684.4 613.4 772.0 198.5 24.3 88.3 63.5 158.6 200 300 400 500 600 700 800

Portfolio valuation December 2013 Realisations Cash Yield Cash invested: Projects Cash invested: JLEN Rebased valuation Movement in fair value Portfolio valuation December 2014

(£m)

25.9% increase on rebased portfolio valuation

• Movement in fair value of £158.6m includes discount rate unwind (£53.0m), reduction of construction risk

premia (£16.3m), FX movements (negative £7.8m), value enhancements and other changes to forecast cash flows (£97.1m, £38.4m of which from new financial closes)

15

Pension deficit

• The IAS19 deficit on the John Laing Pension Fund was £177.6 million at

31 December 2014, based on a discount rate of 3.6%

• 10% reduction in 31 December 2013 liability of £196.8 million
• £100m special contribution in February 2015 as part of the IPO process
• Estimated deficit of £94.9 million at 28 February 2015, based on a discount rate
• f 3.4%

Schedule of Contributions Date Original Revised March 2014 £26.1m (paid) £26.1m (paid) IPO (Feb 2015)

• £100m assets / cash

March 2015 £27.0m £27.0m March 2016 £28.0m £18.0m March 2017 £29.0m £19.0m

• Next triennial actuarial valuation as at 31 March 2016

16

Pro-forma Cash Flow – re-presented

• 1. Includes cash distributions from portfolio projects plus distributions from non-portfolio assets (e.g. JV with Croydon council)
• 2. Includes cash injections into portfolio projects plus investments in non-portfolio assets (e.g. JV with Croydon council)

Key line items Year ended 31 Dec 2014 (£m) Year ended 31 Dec 2013 (£m) Cash yield1 27.9 32.0 Operating cash flow (5.5) (11.9) Total operating cash flows 22.4 20.1 Cash investments in projects2 (92.3) (122.2) Proceeds from disposals 159.6 119.6 Disposal of JLIF shares 38.9

• Investment in JLEN shares

(63.5)

• Net investing cash flows

42.7 (2.6) Net finance charges (9.0) (17.2) Cash contributions to JLPF (incl. PPF levy) (26.3) (25.5) (35.3) (42.7) Effect of FX rate changes (1.0) 0.5 Cash inflow/(outflow) 28.8 (24.7) Opening cash balances (net) 51.2 75.9 Closing cash balances (net) 80.0 51.2

17

Corporate banking facility - utilisation

31 December 2014 (£m) 31 December 2013 (£m)

Corporate banking facility1 353.9 305.0 Letters of credit issued (243.8) (158.8) Other guarantees / commitments (1.1) (1.1) Short term borrowings

• (6.0)

Net facility utilisation (244.9) (165.9) Facility headroom 109.0 139.1 Cash and bank deposits2 19.5 49.3 Net available financial resources 128.5 188.4 Letters of credit issued 243.8 158.8 Cash collateral 60.5 7.9 Future cash investment into projects 304.3 166.7

• 1. New 5 year £350m corporate banking facility signed in February 2015
• 2. Excludes cash collateral balances of £60.5m (31 Dec 2013 - £7.9m)

18

Pro-forma Income Statement – re-presented

Revenue Costs Key line items Year ended 31 Dec 2014 (£m) Year ended 31 Dec 2013 (£m) Investment Management Services (IMS) revenue 22.1 17.7 Project Management Services (PMS) revenue 14.6 15.5 Bid cost recoveries on financial close 13.2 9.7 Investment fees from projects 7.1 4.6 Movement in fair value – investment portfolio 158.6 134.0 Movement in fair value – other 2.6 7.7 Total Income 218.2 189.2 Third party bid costs (7.1) (8.9) Staff costs (33.2) (30.1) General overheads (14.7) (12.8) Internal Asset Management fee charge (10.2) (8.2) Exceptional gains/(losses) (5.9) 24.4 EBIT 147.1 153.6 Finance charges (16.7) (10.2) Pension and other charges (10.0) (9.3) Profit before tax (before discontinued operations) 120.4 134.1 Others

19

External Assets under Management

Strong external AUM growth reaching £1,020m of assets under management as at 31 December 2014

John Laing Infrastructure Fund  Raised £270m at IPO in November 2010; additional £577m equity raised since launch  Portfolio value at 31 December 2014 of £865m  Market capitalisation at 31 December 2014 of £997m  Targets public sector or government-backed investments  JLIF acquired four investments from John Laing in 2014 for £37m John Laing Environmental Assets Group  Raised £160m at IPO in March 2014  Portfolio value at 30 September 2014 of £155m  Market capitalisation at 31 December 2014 of £165m  Targets environmental infrastructure investments  At 31 December 2014, JL held a 39.7% stake in JLEN within its Secondary Investment portfolio  29.9% shareholding in JLEN transferred to JLPF in February 2015, leaving John Laing with a 9.8% share holding

20

Outlook

• Investment portfolio:

– Further progress on projects under construction – Positive signs in secondary market

• Budget for realisations in 2015 of c.£100 million
• £150 – 200 million budget target for 2015 new investment

commitments

– Sydney Light Rail (£41 million) closed February 2015 – PPP: a number of opportunities being pursued – most scheduled to reach financial close in the second half – Renewable energy: expect to convert some exclusive positions in next few months

• Track record and pipeline provide us with confidence for the future

21

Q&A

22

Appendices

23

Portfolio valuation bridge – Q4 2014

Portfolio valuation movement – Q4 2014 780.5 748.0 772.0 58.1 15.7 41.3 24.0 200 300 400 500 600 700 800

Portfolio valuation September 2014 Realisations Cash Yield Cash invested: Projects Rebased valuation Movement in fair value Portfolio valuation December 2014

(£m)

• Movement in fair value of £24.0m includes discount rate unwind, reduction of construction risk premia, FX

movements, value enhancements and other changes to forecast cash flows

24

Portfolio characteristics

UK 58% Europe 18% APAC 9% North America 6% JLEN 9%

By Geography

Top 5 projects 42% Next 5 projects 20% JLEN 9% Others 29%

By Project Size

Transport - other 33% Transport - rolling stock 15% Renewable Energy 16% Social 14% Environmental 13% JLEN 9%

By Sector

Availability 69% Volume (Incl. RE investments) 20% Shadow toll 2% JLEN 9%

By Revenue basis

25

John Laing Pension Fund

 De-risking measures: – Transfer of all risks relating to c.40% of liabilities in respect of pensioner members under a buy-in policy implemented with Aviva in 2008 – Inflation hedging with long-dated zero coupon inflation swaps with a notional amount of c.£75 million – Interest rate hedging via a pooled hedging vehicle, equivalent notional amount of c.£190 million as at 31 December 2014 – De-risking of the investment portfolio, including a reduction in the allocation to riskier asset classes

31 December 2014 adjusted Asset allocation 31 Dec 2014 (£m) Special contribution (£m) (£m) Percentage Gilts 242.9

• 242.9

25% Corporate bonds 112.1

• 112.1

12% Aviva buy-in policy 226.3

• 226.3

24% Equities 244.1 50.3 294.4 31% Property 8.7

• 8.7

1% PPP assets 7.0 29.6 36.6 4% Cash 12.1 20.1 32.2 3% Total 853.2 100.0 953.2 100%

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Segmental reporting

Primary Investment Secondary Investment Asset Management Total £m 2014 2013 2014 2013 2014 2013 2014 2013 Profit before tax excluding JLIS 99.4 20.9 30.1 80.8 9.7 8.8 139.2 110.5 JLIS profit before tax

• 3.2
• 3.2

Total profit before tax on continuing operations 99.4 20.9 30.1 80.8 9.7 12.0 139.2 113.7 Post retirement charges (10.0) (8.8) Costs relating to discontinued operations and other (8.8) 8.0 Profit before tax excluding gain on disposal of JLIS 120.4 112.9 Gain on disposal of JLIS

• 21.2

Profit before tax (before discontinued operations) 120.4 134.1