Management Presentation July 2018 -...
Transcript of Management Presentation July 2018 -...
Management Presentation July 2018
İzmir Adnan Menderes Airport
Investment Highlights
2
Turkey is the fastest growing aviation market in Europe
Diversified, balanced portfolio with leading market positions
Strong momentum with EBITDA posting 28% CAGR between 2006 and 2017
Well-positioned to benefit from further organic and inorganic growth
Attractive market with strong growth prospects
Leading airport operator with diversified portfolio
& integrated structure
Strong financial performance and cash
flow generation “Platform play”
Passenger growth of 12% p.a. during 2002-2017
Projected passenger growth of 10% p.a. between 2017-2023(1)
Aggressive capacity expansion plans of major airlines in Turkey(2)
Access to fast growing MENA region
#1 airport terminal operator in Turkey
15* airports operated in Turkey, Georgia, Tunisia, Macedonia, Saudi Arabia, Croatia and Latvia
78 airports around the world have a TAV Airports subsidiary functioning in them
Strong vertically integrated value chain
As of June 2018
* TAV will add 3 more airports in Saudi Arabia, bringing airports operated to 18.
High earnings visibility given clear / agreed regulatory framework
Proven track record of growth and profitability with attractive organic growth prospects
High financial returns and cash flow generation given fixed cost base (operational leverage) and minimal ongoing capex
Hard currency based cash flow & visible earnings
50% dividend payout policy
TAV will receive compensation for all loss of profit in case of new Istanbul airport opening before 2021
Central and Eastern Europe, Africa, Middle East, South East Asia and Cuba
Inorganic growth of service companies
(1) Source: Turkey’s Ministry of Transport (2) THY and Pegasus web site
Exceptional Growth
3
Revenue (€m)
402 508 627 640 785 881 1099 1205 1092
847 904
983 1079 1,104 1132
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Pre-IFRS11
Post-IFRS11
EBITDAR (€m)
170 189 267 311 342 387 483 555 597
463 524
569 621 611
673
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Pre-IFRS11
Post-IFRS11
23 30
41 42 48
53
72
84 95
102 105 115
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
-71
-38
4
51 50 53
129 133
218 210
127
175
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Passenger (m) Net Profit (€m)
2006 2007
26 51
120
1
5
234 31 44
1
206 222 242
2016 Restated
2016 Restated
TAV Corporate and Shareholder Structure
26 51
120
1
234 31 44
1
242 247 252
9
5.06%
1.29%
3.20%
44.33%
46.12
Shareholder Structure (as of June 2018)
Shareholders
TAV Airports Holding Co.
1
2
3
4
5
*Through Tank oWA Alpha GMBH
1. Groupe ADP* Internationally acclaimed airport operating company with global operations
2. Tepe Insaat Sanayi A.S. Turkish integrated conglomerate focused on infrastructure and construction
3. Sera Yapi Endustrisi A.S. Focused on construction in Turkey & MENA region
4. Other Non-floating
5. Other Free Float
Airport Companies Service Companies
ATU (50%)
BTA (100%)
OS (100%)
TAV Technologies (100%)
Security (100%)
Academy (100%)
Havas (100%)
TGS (50%)
Havas Latvia (100%)
Ataturk (100%)
Esenboga (100%)
Adnan Menderes (100%)
Gazipasa Alanya (100%)
Milas Bodrum (100%)
Medinah (33%)
Tbilisi (80%) & Batumi (76%)
Monastir & Enfidha (67%)
Skopje & Ohrid (100%)
Latvia (100%)
Zagreb (15%)
Havas Saudi (67%)
Yanbu, Hail & Qassim (50%) **
Note: Groupe ADP bought Akfen Holding’s 8.12% stake in TAV Airports as of July 7, 2017
4
Antalya (50%)*
*TAV Airports’ 49% stake in Antalya Airport entitles it to equal governance and 50% of dividends ** TAV Airports won the concession for these airports but has not operated these airports
TAV Airports Business Areas
5
ATU (50%) Largest duty free operator in Turkey Partner with Unifree –owned by Heinemann, leading German travel retailer (Travel Value) Operating in Turkey, Georgia, Tunisia, Macedonia, Latvia, Oman and Medinah Operating in Houston, USA, since September 2015.
BTA (100%) Operating in Turkey, Georgia, Macedonia, Tunisia, Latvia, Saudi Arabia, Oman and Croatia Operates Istanbul Airport Hotel (128 rooms) Operates İzmir Airport Hotel (81 rooms) Total seating capacity of c. 23 thousand at c. 380 points including BTA IDO and UNIQ Baker and pastry factory serving in Turkey BTA Denizyollari (50%) is the F&B operator of Istanbul Deniz Otobusleri (IDO) Operating in New Muscat Int’l Airport since March 2018
HAVAS (100%) Major ground handler in Turkey with a c.70% share Operates in 31 airports in Turkey including Istanbul, Ankara, Izmir and Antalya TGS (50%) operates in Istanbul (IST&SAW), Ankara, Izmir, Antalya, Adana, Bodrum and Dalaman 100% owner of Havas Latvia, with c.66% market share 67% owner of Saudi HAVAS operating in Medina
TAV OS (100%) Commercial area allocations and lounges
TAV Technologies (100%) Airport IT services
TAV Security (100%) Security service provider in Istanbul, Ankara, Izmir and Gazipasa
TAV Latvia (100%) Commercial area management in Riga Airport
Airports Duty free Food and beverage Ground handling Others
Turkey Istanbul Ataturk Airport (100%)
Ankara Esenboga Airport (100%) Izmir Adnan Menderes Airport (100%) Gazipasa Alanya Airport (100%) Milas Bodrum Airport (100%) Antalya Airport (50%)*
Georgia
Tbilisi (80%) and Batumi Airports (76%)
Tunisia Monastir and Enfidha Airports (67%)
Macedonia Skopje and Ohrid Airports (100%)
Saudi-Arabia Medinah (33%) Yanbu, Hail &Qassim (50%)**
Croatia Zagreb Airport (15%)
*TAV Airports’ 49% stake in Antalya Airport entitles it to equal governance and 50% of dividends. ** TAV Airports won the concession for these airports but has not operated these airports .
Source: State Airports Authority
Growth of the Turkish Aviation Market
6
Foreign Visitors in Turkey
Deregulation of the domestic market in 2003
2nd largest country in Europe in terms of population: 81m (1)
In 2016, foreign visitors amounted 25m (vs. 36mn in 2015) (2)
In 2017, foreign visitors reached to 32.4m (+28%)
Passport ownership of Turkish citizens (+18) is only 8%. (3)
Only 11% of Turkish people vacationed abroad. (3)
Aircraft number in Turkey expected to reach 750 in 2023 (4)
Source: DHMI, (1)Turkstat, (2) Ministry Culture and Tourism, (3) Konda Research and Consultancy 2017 Turkey Report (4) Ministry of Transport
41 51 58 65 76 86 97 103 110 122 130 139 180
44 52 59 66
73 80
84 71 83
97 103 107
170
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e 2019e 2020e 2023e
International
Domestic
234
86 104 118
130 149
166 181 174 193
219
350
State Airports Authority Turkish Aviation Market Forecast
Mn, pax
//
Foreign Visitors in Turkey (mn)
16%
7%
16%
11% 7%
6% 4%
7%
38% 32% 35%
28% 27%
-10% -7% -4%
18% 16%
43% 46% 46% 43%
22% 22% 31%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2018/2017 2017/2016 2016/2015
28% -30%
4,5 3,6 0,9
4,7
5,3 5,6
3,9
3,6
14,1 13,5
9,3
9,5
5,7 6,2
4,8
6,9
7,1 7,3
6,6
7,6
2014 2015 2016 2017
Russia Federation Germany Rest of Europe Total Asia Rest of the world
36,8 36,2
25,4
32,4 3%
-11% 16% 8%
-22% 45%
-5%
-31% 3%
6% -30% -8%
-20%
-75% 422%
-2%
-30% 28%
YTD 31%
247
Traffic Outlook
7 Source: IATA, Airbus Global Market Forecast 2018, Boeing Current Market Outlook 2018
Source: IATA, Eurocontrol, DHMI
Source: THY presentation (May 2018) Pegasus Presentation (March 2018)
1
Source: ADI
2 3 4
World Air Traffic will double in 20 years
Turkish air traffic will double in 7 years
Aggressive fleet expansion plans of
major airlines in Turkey
~7% international seat capacity growth in
2018
Eurocontrol, projects 7% CAGR for Turkey until 2020 DHMI expects 10% CAGR in Turkey until 2023 IATA expects Turkish air traffic to grow at a 4.7% CAGR in the next twenty years
Boeing projects 4.7% CAGR for world air traffic (2018-2037) Airbus projects 4.4% CAGR for for world air traffic (2018-2037) IATA expects 7.8 bn pax to travel in 2036 a near doubling of 4 bn in 2017
~7% seat capacity increase expected at Ataturk Airport international scheduled traffic in 2018
THY to expand fleet size to 393 by 2020 (from 329 in 2017) Pegasus to increase fleet to 94 by 2020 (from 76 in 2017)
Traffic Performance
Istanbul Traffic started to recover in Apri 2017 with low base when Turkish Airlines started to re-utilise grounded fleet. Strong O&D recovery since the second quarter of 2017. International O&D +23%, int2int transfer +11% in 1H17
Ankara Significant growth continues thanks to year-on-year effect of routes opened in mid/late 2017
İzmir Increased seat capacity on several routes by Turkish carriers
Milas-Bodrum Traffic started to recover
Gazipasa
Traffic started to recover
Medinah Strong growth in scheduled international and Umrah traffic
Tunisia Recovery started following lift of UK travel ban in late July
Georgia Increase in seat capacity, new routes
Macedonia Driven by WizzAir
Zagreb Driven by new routes, new terminal opened at the end of March 2017
Pax Strong growth in all markets continues Like for like growth of 16%
6
235 242 250
8
0 0 0
çizgiler
251 243 223
8
Source: Turkish State Airports Authority (DHMI), Georgian Authority, TAV Tunisie, TAV Macedonia, TIBAH and MZLZ Note: DHMI figures for 2018 are tentative. 1) Both departing and arriving passengers, including transfer pax 2) Antalya added to portfolion in May 2018. TAV Total 2017 Traffic figures do not include 2017 Antalya Airport figures. TAV Total 2018 figures includes Antalya Airport starting from May.
Antalya
Traffic growth spurred by strong tourist arrivals
January-June January-December
Passengers (1) 2017 2018 Chg 2016 2017 Chg %
Ataturk Airport 28.876.193 32.558.271 13% 60.415.470 63.727.448 5%
International 19.749.816 23.109.982 17% 41.281.937 44.277.101 7%
Domestic 9.126.377 9.448.289 4% 19.133.533 19.450.347 2%
Esenboga Airport 6.730.236 8.733.087 30% 13.044.116 15.845.878 21%
International 834.580 1.030.829 24% 1.496.876 1.991.979 33%
Domestic 5.895.656 7.702.258 31% 11.547.240 13.853.899 20%
Izmir Airport 5.806.728 6.461.800 11% 12.051.243 12.823.701 6%
International 835.211 986.698 18% 2.096.076 2.354.622 12%
Domestic 4.971.517 5.475.102 10% 9.955.167 10.469.079 5%
Gazipaşa Airport 318.774 478.316 50% 718.718 823.238 15%
Milas-Bodrum 1.207.163 1.498.683 24% 3.221.776 3.509.347 9%
International 263.009 460.756 75% 909.734 935.849 3%
Domestic 944.154 1.037.927 10% 2.312.042 2.573.498 11%
Antalya(2) 9.321.413 11.808.378 27% 18.768.535 25.931.659 38%
International 5.952.673 8.145.494 37% 11.720.296 18.472.418 58%
Domestic 3.368.740 3.662.884 9% 7.048.239 7.459.241 6%
Medinah 3.855.417 4.138.620 7% 6.572.787 7.805.295 19%
Tunisia (Monastir&Enfidha) 519.767 837.948 61% 1.593.780 1.683.604 6%
Georgia (Tbilisi&Batumi) 1.418.620 1.861.530 31% 2.560.462 3.654.389 43%
Macedonia (Skopje&Ohrid) 860.130 1.041.583 21% 1.794.376 2.027.344 13%
Zagreb Airport 1.335.936 1.471.638 10% 2.766.087 3.092.047 12%
TAV TOTAL (1) 50.928.964 66.661.638 31% 104.738.815 114.992.291 10%
International 28.372.078 39.976.301 41% 58.745.737 65.220.285 11%
Domestic 22.556.886 26.685.337 18% 45.993.078 49.772.006 8%
34% 27% 29%
26%
7%
20%
-13% -12%
-5%
10%
-1%
4%
24% 28%
14% 19%
23% 20%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
18/17 change 17/16 change 16/15 change
Istanbul Int2int Transfer and O&D Pax, Yoy % Change
3,0
3,5
4,0
4,5
5,0
5,5
6,0
6,5
7,0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2014 Seat Capacity 2015 Seat Capacity
2016 seat capacity 2017 Seat Capacity
International Scheduled Traffic Developments & Outlook
9
Istanbul International O&D Pax Istanbul International Seat Capacity
Istanbul Transfer Pax / International Pax
2011 30%
2012 33%
2013 38%
2014 38%
2015 40%
2016 49%
2017 47%
+7%
(m, pax)
235 242 250
8
O&D : 6%
Transfer : 21%
2008-2017 CAGR
-16%
THY grounded aircraft 2018e: ~+7%
9% YTD 23%
-30%
-20%
-10%
0%
10%
20%
30%
40%
2016
Jan
2016
Feb
2016
Mar
2016
Ap
r
2016
May
2016
Ju
n
2016
Ju
l
2016
Au
g
2016
Sep
2016
Oct
2016
No
v
2016
Dec
2017
Jan
2017
Feb
2017
Mar
2017
Ap
r
2017
May
2017
Ju
ne
2017
Ju
ly
2017
Au
g
2017
Sep
2017
Oct
2017
No
v
2017
Dec
2018
Jan
20
18
Feb
2018
Mar
2018
Ap
r
2018
May
2018
Ju
ne
O&D Transfer
Antalya International Airport
Transaction Overview
Transaction
TAV acquires IC Ictas’ 49% stake in ICF Antalya, the joint-venture that manages Antalya Airport
Fraport AG maintains 51% stake
Date of signing of SPA 27 February 2018
Date of Closing 8 May 2018
Price EUR 360 million cash
Impact on TAV Transaction expected to be EPS accretive
Source of funding Transaction financed through debt (EUR 300 million) and
equity (EUR 60 million)
Consolidation Consolidated by equity method
TAV acquires 49% of Antalya Airport with co-control; i.e. 50% dividend rights and 50% of voting rights
51% 49%
10
*EBITDAR=IFRS EBITDA which is before rent amortization **EBITDA= Adjused IFRS EBITDA after rent amortization
Antalya Airport Financials (100%)
15,2
18,3
20,5 20,2 21,5 22,1
20,9
11,7
18,5
6,0
8,1
3,1 3,7 4,5 4,9 5,5 6,2 6,9 [VALUE],0 7,5
3,4 3,7
18,3
22,0
25,0 25,1 27,0
28,3 27,8
18,7
26,0
9,3
11,8
2009 2010 2011 2012 2013 2014 2015 2016 2017 2017 6M2018 6M
Antalya Pax (m) Int
Dom
Total
Source for Pax: DHMI
Severe international traffic decrease occured in 2016 with
Russian ban to charters (started late 2015) and security issues
in Turkey.. Majority of Russian traffic recovered in 2017 with
the lift of travel ban. Domestic traffic increased non-stop
during last 10 years.
EUR (m) 2014 2015 2016 2017 Revenue 327 303 182 260 EBITDAR* 283 258 141 223 EBITDA** 151 130 16 106 EBITDA Margin 46% 43% 9% 41% Net Profit 85 68 -24 40
IFRIC 12 Adjusted Financials (in m€, unless stated otherwise) 1H17 (5) 1H18 Chg %
Revenue (1) 510,7 549,7 8%
EBITDAR (2) 283,0 334,6 18%
EBITDAR margin (%) 55,4% 60,9% 5,5 ppt
EBITDA (2) 203,0 253,7 25%
EBITDA margin (%) 39,8% 46,2% 6,4 ppt
FX Loss (2,0) (7,4) 273%
Deferred Tax Expense (5,3) (2,7) -50%
Net Profit (3) 60,0 93,1 55%
Capex 23,3 53,4 129%
Net Debt 830 725 -13%
Average number of employees 16.516 17.781 8%
Number of passengers (m) 50,9 66,7 31%
- International 28,4 40,0 41%
- Domestic 22,6 26,7 18%
Duty free spend per pax (€) (4) 14,0 12,1 -14% (1) IIFRS Revenue – Construction revenue + Ankara guaranteed passenger revenue - Discount Income (please refer to page 21, for
revenue reported by Groupe ADP)
(2) EBITDA(R) – Construction revenue + construction expense + Ankara guaranteed passenger revenue - Discount Income + Equity
accounted investees (EAI). EAI is not classified to EBITDA in Groupe ADP’s accounts. (Please refer to pg. 21 for EBITDA reported by
Groupe ADP)
(3) Attributable to equity holders of the company
(4) Transfer numbers are tentative and subject to change
(5) Restated
1H18 Summary Financials
11
Source: TAV Airports Holding, DHMI, TAV Tunisia, TAV Macedonia, Georgian Aviation Authority, TIBAH , MZLZ
Spend per Pax From €14.0 to €12.1, mainly due to depreciation of TRY impacting Turkish passengers’ spending, as well as weakness in European passengers.
Pax -+31%
Like-for-Like pax growth is 16%, Antalya added in May 18 Istanbul Airport international pax +17% in 1H18 with +11% in international-to-international transfer pax and +23% in international O&D O&D recovery started in Q2 2017 Share of transfer is 46% in Istanbul (1H17: 48%)
6
235 242 250
8
0 0 0
çizgiler
251 243 223
Revenue +8%
Revenue growth supported by traffic growth, while impacted by depreciation of TRY and strong EUR vs USD 47% aero, 53% non-aero
EBITDA +25%
EBITDA margin expansion due to cost control and TAV Istanbul’s rent expense staying almost flat vs 1H17
FX Loss +273%
Forward EUR transactions and depreciation of TRY impacted FX loss in 1Q18
Net Profit +55%
Operating performance reflected in bottomline
Net Debt -13%
Net debt decreased with cash generation
EBITDAR +18%
EBITDAR margin expansion, mainly due to cost control and depreciation of TRY
203,0
54,6
20,9 4,7 1,0 8,0
8,6 11,9
253,7
1H
17
Vo
lum
e
EPU
**
Mix
Ren
t
Oth
er
F/X
Price
1H
18
510,7
81,8
6,8 6,7 3,7 0,5 60,6
549,7
1H
17
Vo
lum
e
Price
Mix
Oth
er
On
e-O
ffs
F/X
1H
18
1H18 Revenue and EBITDA Bridges *
Revenue Bridges (€m) EBITDA Bridges (€m)
26 51
120
1
5
234 31 44
1
206 222 242
* Please refer to page 21, for revenue reported by Groupe ADP, 2017 restated
251 243 223
12
** Equity Pick -up
Ege
Ege
510,7
12,3 5,5 4,3 4,0 2,9 2,0 2,3 1,7 1,3 1,1 1,0 0,5
549,7
1H
17
Istanb
ul
BTA
Geo
rgia
Havas
Tun
isia
Bo
dru
m
Oth
ers
Maced
on
ia
Elimin
ation
Izmir
Gazip
asa
An
kara
1H
18
203,0
20,9
14,7 9,9
4,2 3,9 2,4 1,6 1,4 1,1 0,6 0,3 8,5
253,7
1H
17
Oth
ers***
Istanb
ul
Havas
Geo
rgia
Tun
isia
Bo
dru
m
Izmir
Maced
on
ia
Gazip
asa
BTA
An
kara
Elimin
ation
1H
18
***Others includes equity pick-up
(Ege)
(Ege)
2018 1H Comparison (2017 figures restated)
54% 31%
2% 8% 5%
47%
29%
2% 10%
12%
Istanbul Other Airports BTA
HAVAS Other Services
13
Consolidated Revenue (1) (€m) Net Profit (2) (€m)
Consolidated Revenue (%) EBITDA (%) Opex (%)
511 550
1H17 1H18
203
254
1H17 1H18
60
93
1H17 1H18
(1) Please refer to page 21, for revenue and EBITDA reported by Groupe ADP
(2) Attributable to equity holders of the company
32%
22% 15%
16%
9% 5% 32%
22% 19%
15%
8% 5%
Personnel Concession rent
Other D&A
Services rendered Catering
1H17
1H18
EBITDAR (1) (€m)
26 51
120
144 146 148
247 166 63
234 31 44
85 129 193
186 186 186
206 222 242
230 231 232
253 219 151
248 182 187
5
228 238 248
245 245 247
EBITDA (1) (€m)
283 335
1H17 1H18
21%
33% 13%
9%
23%
21%
34% 13%
10%
23%
Duty-free Aviation Ground-handling F&B Other
2017 FY Comparison (2016 figures restated)
54% 33%
3% 4%
48%
35%
3% 9%
5%
Istanbul Other Airports BTA HAVAS Other Services
14
Consolidated Revenue (1) (€m) Net Profit (2) (€m)
Consolidated Revenue (%) EBITDA (%) Opex (%)
1092 1132
FY16 FY17
447 508
FY16 FY17
127
175
FY16 FY17
(1) IFRIC 12 adjusted
(2) Attributable to equity holders of the company
22%
32% 13%
8%
25%
21%
34% 13%
9%
23%
Duty-free Aviation Ground-handling F&B Other
33%
20% 17%
14%
9% 7% 31%
21% 15%
18%
9% 5%
Personnel Concession rent Other
D&A Services rendered Catering
FY16
FY17
EBITDAR (1) (€m)
26 51
120
144 146 148
247 166 63
234 31 44
85 129 193
186 186 186
206 222 242
230 231 232
253 219 151
248 182 187
5
228 238 248
245 245 247
EBITDA (1) (€m)
599 673
FY16 FY17
Selected Financials by Assets (IFRIC 12 Adjusted) and Employee #s (1H18)
15
(€m) Revenue EBITDA EBITDA
Margin (%) Net Debt
Airports 383,3 200,5 52% 765 Istanbul 249,9 124,1 50% -23 Ankara 26,1 13,6 52% 9 Ege (İzmir) 30,0 18,7 62% 211 Gazipasa 2,5 0,9 38% 48 Tunisia 10,9 0,4 3% 356 Georgia 40,1 31,6 79% -13 Macedonia 13,9 5,7 41% 41 Bodrum 9,8 5,5 56% 136
Services 223,3 62,4 28% -40 Havas 64,8 25,8 40% -4 BTA 78,4 4,5 6% 4 Others* 80,2 32,1 40% -40
Total 606,7 262,9 43% 725
Elimination -57,0 -9,2 0
Consolidated 549,7 253,7 46% 725
Revenue (€m) 1H17* 1H18 Chg.(%)
Airports 357,4 383,3 7% İstanbul 237,6 249,9 5% Ankara 25,6 26,1 2% Ege (İzmir) 28,9 30,0 4% Gazipasa 1,5 2,5 67% Tunisia 8,0 10,9 36% Georgia 35,8 40,1 12% Macedonia 12,2 13,9 14% Bodrum 7,8 9,8 26%
Services 211,5 223,3 6% Havas 60,8 64,8 7% BTA 72,9 78,4 8% Others 77,8 80,2 3%
Total 568,9 606,7 7% Elimination -58,2 -57,0 -2% Consolidated 510,7 549,7 8% ATU** 154,1 164,2 7% TGS** 57,6 65,5 14% TIBAH (Medinah)** 35,0 34,1 -2%
Number of Employees (eop) 1H17* 1H18
Istanbul 2.908 3.088 Ankara 964 944 Ege (İzmir) 915 931 Tunisia 791 789 Gazipasa 62 67 Georgia 873 982 Macedonia 695 709 Havas 4.471 4.988 BTA 3.161 3.591 Holding 109 113 O&S 716 744 Technologies 328 328 Security 1.057 1.304 Latvia 6 6 Bodrum 98 108 Academy 2 2
TOTAL 17.156 18.694
EBITDA (€m) 1H17* 1H18 Chg.(%)
Airports 171,6 200,5 17% Istanbul 109,4 124,1 13% Ankara 14,0 13,6 -3% Ege (İzmir) 17,1 18,7 9% Gazipasa -0,1 0,9 nm Tunisia -3,5 0,4 nm Georgia 27,3 31,6 16% Macedonia 4,3 5,7 33% Bodrum 3,1 5,5 75%
Services 32,2 62,4 94% Havas 15,9 25,8 62% BTA 5,1 4,5 -11% Others* 11,2 32,1 186%
Total 203,8 262,9 29% Elimination -0,7 -9,2 1145% Consolidated 203,0 253,7 25% ATU** 12,3 17,0 38% TGS** 5,7 7,9 40% TIBAH (Medinah)** 7,6 8,1 6%
*Others EBITDA includes share of profit of equity accounted investees (equity-pick up).
6
235 242 250
8
0 0 0
çizgiler
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**Equity accounted investee *Others EBITDA includes share of profit of equity accounted investees (equity-pick up). * Restated
Selected Financials by Assets (IFRIC 12 Adjusted) and employee #s (FY17)
16
(€m) Revenue EBITDA EBITDA
Margin (%) Net Debt
Airports 796,0 419.6 53% 668 Istanbul 506.3 249.6 49% -76 Ankara 56.4 33.5 59% 18 Ege 68.5 44.0 64% 186 Gazipasa 4.4 1.1 25% 48 Tunisia 23.0 -2.5 nm 348 Georgia 85.5 68.1 80% -15 Macedonia 28.0 11.7 42% 43 Bodrum 24.0 14.1 59% 116
Services 458.0 88.7 19% -81 Havas 139.5 49.1 35% 7 BTA 158.4 13.7 9% 7 Others* 160.1 25.9 16% -95
Total 1,253.9 508.3 41% 586
Elimination -122.2 -0.4 0
Consolidated 1,131.7 507.9 45% 586
Revenue (€m) FY16* FY17 Chg.(%)
Airports 765.7 796.0 4% İstanbul 500.9 506.3 1% Ankara 55.7 56.4 1% Ege 66.5 68.5 3% Gazipasa 4.5 4.4 -1% Tunisia 24.3 23.0 -5% Georgia 62.8 85.5 36% Macedonia 26.6 28.0 5% Bodrum 24.4 24.0 -2%
Services 456.9 458.0 0% Havas 131.6 139.5 6% BTA 170.2 158.4 -7% Others 155.0 160.1 3%
Total 1,222.6 1253.9 3% Elimination -130.2 -122.2 -6% Consolidated 1,092.3 1131.7 4% ATU** 336.4 342.1 2% TGS** 130.2 126.7 -3% TIBAH** 59.8 70.2 17%
Number of Employees (eop) FY16* FY17
Istanbul 2,936 2,993 Ankara 928 941 Ege 878 928 Tunisia 672 778 Gazipasa 57 62 Georgia 781 876 Macedonia 675 681 Havas 3,853 4,135 BTA 2,904 3,165 Holding 105 111 O&S 700 678 Technologies 277 332 Security 774 1,070 Latvia 6 6 Bodrum 75 78 Academy 3 2
TOTAL 15,624 16,836
EBITDA (€m) FY16* FY17 Chg.(%)
Airports 383.2 419.6 9% Istanbul 245.8 249.6 2% Ankara 28.8 33.5 16% Ege 39.5 44.0 12% Gazipasa 0.9 1.1 25% Tunisia -3.7 -2.5 -32% Georgia 47.1 68.1 45% Macedonia 11.6 11.7 1% Bodrum 13.2 14.1 7%
Services 63.4 88.7 40% Havas 31.8 49.1 54% BTA 13.5 13.7 2% Others* 18.2 25.9 42%
Total 446.7 508.3 14% Elimination 0.3 -0.4 nm Consolidated 447.0 507.9 14% ATU** 27.4 28.7 5% TGS** 11.2 15.6 40% TIBAH** 26.8 15.1 -43%
*Others EBITDA includes share of profit of equity accounted investees (equity-pick up).
6
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8
0 0 0
çizgiler
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**Equity accounted investee *Others EBITDA includes share of profit of equity accounted investees (equity-pick up). * Restated
2,7 3,3 3,4 3,5
5,5
4,6 4,5
2011 2012 2013 2014 2015 2016 2017
39 62 66
109 105
64 87
53
124 133
218 210
127
175 74%
50%
2011 2012 2013 2014 2015 2016 2017
Dividends Paid Net Income Payout Ratio
CAPEX Development / Dividends
17
Quarterly Capex (€m)(i) 2018 Capex
Dividend Yield (%) Dividend History (€m)
The bulk of the capex was made for new headquarter building and new international lounges
(i) Adjusted to exclude effects of IFRIC 12 accounting change
TAV Airports’ dividend policy: 50% of the consolidated IFRS net profit.
26 51
120
1
5
206 222 242
251 243 223
2018 1H CAPEX
€53m 14
8 14 13 12 14
6
20
9 6
16 11
20 13
19
10 12 12 6
20
33
1Q152Q153Q154Q151Q162Q163Q164Q161Q172Q173Q174Q171Q182Q18
Istanbul Other
Decentralized Debt Structure - Prudently Levered
18
Net Debt (eop, €m) June
2017 March
2018 June 2018
Airports 842 803 765
İstanbul 46 32 -23
Ankara 31 7 9
Ege (İzmir) 214 213 211
Gazipasa 48 49 48
Tunisia* 346 355 356
Georgia -15 -14 -13
Macedonia 49 42 41
Bodrum 124 118 135
Services -12 -57 -40
HAVAS 24 8 -4
BTA 6 6 4
Holding (stand alone) -
55 -80 -51
Others 13 9 11
Total 830 746 725
Gross Debt Maturity Profile (€m)
Door to Door Maturity 7.5 Years
Average Maturity 4.8 Years
Average € Cost of Debt (Hedged*) 4.1%
Net Debt / 2017 FY EBITDA 1.2
* 64% of all loans have fixed rates. -as of June 30, 2018
6
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8
0 0 0
çizgiler
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With the Istanbul refinancing the average cost of debt decreased from 4.6% in 2015 to 4.1% in 2018. ·
*Due to the trilateral negotiations in Tunisia, all financial debt has been reclassified to short term borrowings. Details can be found in IFRS financials Note 15
Non-recourse
207
97 121 72 64
240
363
1 Year 2 Years 3 Years 4 Years 5 Years 6+ Years
Tunisia
TAV Airports
2018 Guidance - Revised
2018 Initial Guidance
Istanbul Ataturk
Airport Int. Pax
Total TAV Airports
Pax Revenue EBITDA CAPEX Net Profit
Notes: All financial targets have been adjusted to reverse the effects of IFRIC 12 and are compliant with IFRS 11; assuming Istanbul Ataturk Airport will operate for the full year in 2018. Antalya Airport included since May, excluding the losses in the first four months of 2018. Revenue: IFRS Revenue – Construction revenue + Ankara guaranteed passenger revenue - Discount Income related to Ankara guaranteed passenger revenue. EBITDA: IFRS EBIT + Depreciation & Amortisation – Construction revenue + construction expense + Ankara guaranteed passenger revenue - Discount Income related to Ankara guaranteed passenger revenue + Equity accounted investees (EAI). EAI is not classified to EBITDA in Groupe ADP’s accounts. Please refer to pg. 27 for reconciliation to ADP’s reporting of TAV Airports financials.
Istanbul Ataturk
Airport Int. O&D Pax
19
6 to 8 Percent
10 to 12 Percent
2 to 4 Percent
double digit
~ €80m 9 to 11 Percent
5 to 7 Percent
Subject to our traffic and FX assumptions
2018 Revised Guidance Istanbul
Ataturk Airport Int.
Pax
Total TAV Airports
Pax Revenue EBITDA CAPEX Net Profit
Istanbul Ataturk
Airport Int. O&D Pax
8 to 10 Percent
> 30 Percent
4 to 6 Percent
significant double digit
~ €120m
11 to 13 Percent
14 to 16 Percent
Subject to our revised traffic (with Antalya Airport since May 2018) and FX assumptions
2017 Guidance and Realization
2017 Revised Guidance
Istanbul Ataturk
Airport Int. Pax
Total TAV Airports
Pax Revenue
EBITDAR (EBITDA before concession &
rent)
CAPEX Net Profit
Notes: All financial targets have been adjusted to reverse the effects of IFRIC 12 and are compliant with IFRS 11.
Istanbul Ataturk
Airport Int. O&D Pax
Realization
Guidance is revised due to better than expected passenger recovery and updated FX assumptions.
20
4 to 6 percent
6 to 8 percent
1 to 3 percent
significant increase
~ €50m 6 to 8 percent
6 to 8 percent
7 percent
9 percent
10 percent
3 percent
12 percent
37 percent
€41m
FX Exposure of Operations (FY17)
21
10%
23%
10%
57%
Opex (1)(2)
€75m
€182m
€79m
€452m
98%
1%
Gross Debt
€1092m
4%
18%
56%
22%
Revenue (1)
€716m
€230m
€54m
€281m
96%
4%
Concession Rent Expense
€7m
€158m
€4m
€1282m
€165m
€788m
€1119m
EUR USD TRY Other
(1) Combined figures, pre-elimination IFRIC12 adjusted, includes equity-pick up (€16m) (2) Includes concession rent expenses (€165m), does not include depreciation (€141m)
€22m
FX Exposure
22
Hedging
Subsidiaries, TAV Ege, TAV Macedonia, TAV İsletme and TAV Milas Bodrum enter into swap transactions in order to diminish exposure interest rate risk to manage exposure to the floating interest rates relating to loans used. Interest payments of 100%, 100%, 100% and 90% of floating bank loans for TAV Ege, TAV Macedonia, TAV İsletme and TAV Milas Bodrum respectively are fixed with interest rate swaps. Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognized directly in equity to the extent that the hedge is highly effective. To the extent that the hedge is ineffective, changes in fair value of the ineffective are recognized in profit or loss.
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Equity Profit or loss
(‘000)
Strengthening of EUR
Weakening of EUR
Strengthening of EUR
Weakening of EUR
30 June 2018 - -
USD - - (12,550) 12,550
TRY - - (6,192) 6,192
Other - - (1,191) 1,191
Total (19,933) 19,933 31 December 2017
USD - - (23,331) 23,331
TRY - - (2,799) 2,799
Other - - (1,634) 1,634
Total - - (27,764) 27,764
Sensitivity Analysis
The Group’s principal currency risk relates to changes in the value of the Euro relative to TRL and USD. The Group manages its exposure to foreign currency risk by entering into derivative contracts and, where possible, seeks to incur expenses with respect to each contract in the currency in which the contract is denominated and attempt to maintain its cash and cash equivalents in currencies consistent with its obligations. The basis for the sensitivity analysis to measure foreign exchange risk is an aggregate corporate-level currency exposure. The aggregate foreign exchange exposure is composed of all assets and liabilities denominated in foreign currencies, both short-term and long-term purchase contracts. A 10 percent strengthening / (weakening) of EUR against the following currencies at 30 June 2018 and 31 December 2017 would have increased / (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
ATU (50%)
23
ATU Financials (€m) Duty Free Spend per Pax (€)
16,6 16,5 16,0
14,4 15,3 15,3
14,2
15,1 13,2 14,9 15,0 14,8
13,3 14,3 14,2
13,1 14,0
12,1
2011 2012 2013 2014 2015 2016 2017 1H17 1H18
Istanbul TAV
SPP dropped in 1H18, mainly due to TRY depreciation impacting Turkish passengers’ spending, as well as weakness in European passengers.
Operations started in 5 Tunisian airports in Q4 2014, ramp up in 2017 (one-off income in Q4 2016).
206 222 242
72,1 84,7
93,0 86,5
68,3
85,8 102,0
86,0 76,0
88,2
1,5 4,7 10,2 11,1
5,9 6,4 12,7
3,8 6,9 10,1
2%
6%
11%
13%
9%
7%
12%
8% 9%
11%
0%
2%
4%
6%
8%
10%
12%
14%
0
20
40
60
80
100
120
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
Revenue EBITDA Margin
BTA
24
BTA Financials (€m)
39,5 44,6 48,3
37,8 32,7
40,1 47,5
38,1 36,7 41,72
1,9 4,1
6,3
0,7 1,9 2,9 7,0
1,8 1,6 2,91
5%
9%
13%
2%
6%
7%
15%
5% 4%
7%
0%
2%
4%
6%
8%
10%
12%
14%
16%
0,0
10,0
20,0
30,0
40,0
50,0
60,0
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
1Q
18
2Q
18
Revenue EBITDA
TAV F&B Spend per Pax (€)
1,8
2,1 2
1,6
1,3 1,3 1,3 1,3 1,3 1,3 1,2 1,2
1,1
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1H17 1H18
Predominantly TRY based revenue and opex Cease of third party operations of BTA Logistics during 2016 Croatia added in 4Q17, Muscat added end of March 2018
49
148
10
207
66
170
13
250
HAVAS TGS HVS E HAVAS + TGS +HVS E
1H17
1H18
HAVAS
25
Havas Consolidated * Financials (€m) TGS Financials (50%) (€m)
Havas Solo FX Exposure FY 2017 # of Flights Served (‘000)
* Post IFRS 11
9%
40%
51%
Revenue
3%
73%
24%
Cost
28,0 33,3
39,0
31,3 26,0
34,8
46,9
31,8 27,0
37,8
4,2
9,7
17,1
0,4 4,0
11,7
24,0
9,3 6,0
19,8
0%
20%
40%
60%
0,0
10,0
20,0
30,0
40,0
50,0
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
1Q
18
2Q
18
Revenue EBITDA Margin
32,4 36,0
39,5
22,3 25,5
32,0 36,8
32,4 29,0
36,4
3,3 4,9 5,8
-2,8
1,9 3,8
7,3 2,6 1,1
6,8
-20%
-10%
0%
10%
20%
30%
-10,0-5,00,05,0
10,015,020,025,030,035,040,045,0
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
1Q
18
2Q
18
Revenue EBITDA Margin
EUR USD TRY
26 51
120
1
5
206 222 242
IFRIC 12 & Our Adjusted Financials Policy
26
Introduction to IFRIC 12 IFRIC 12 booking model
IFRIC 12- is an accounting application treating BOT assets with special provisions for guaranteed income. Ankara Esenboga Airport and Izmir Adnan Menderes Airport International Terminal, with their guaranteed passenger fee structures, fall under the scope.
The capex we incur on our BOT assets, is routinely booked as “airport operation right” in the balance sheet. However when there are guaranteed passenger fees in question, these fees are discounted to their NPV and subtracted from the “airport operation right” of the BOT in question. The remaining capex amount gets booked as “airport operation right” and the NPV of guaranteed passenger fees gets booked as “trade receivables.”
When the guaranteed passenger fees become earned during the course of operations, these are credited from the balance sheet and the difference between discounted (NPV of) guaranteed passenger fees and the actual fees as they are earned are booked as finance income.
Due to the application of IFRIC 12, guaranteed passenger fees stop being P&L items and get treated as Balance Sheet/Cash Flow items, while at the same time, part of these fees gets shown as finance income. This unduely decreases aviation income and increases finance income and distorts our P&L. To adjust for the distortion we add back guaranteed passenger fees while reporting our adjusted revenues.
On the other hand the capex incurred during the construction phase is immediately transferred to P&L with an offsetting construction income assigned to it. This income may or may not carry a mark-up on it. Since this method of booking also distorts both the P&L and the Balance Sheet we adjust our financials to disregard the effects of both “construction expense” and “construction income.”
Debit Credit
1. During Construction
BS Debt
BS Cash
BS Construction in progress
PL Construction Expense Construction Income
2. Completion of Construction
BS Construction in progress
BS (NPV of) Passenger Revenue Receivable (Trade Receivables)
BS Airport Operation Right *
3. Operations During Year
PL Aviation Income for the Current Year **
BS Cash **
4. Year Close
PL Aviation Income for the Current Year ***
PL
Was: Finance Income Is: Other operating revenue (Difference between discounted receivables and the actual receivables)
BS Passenger Revenue Receivable****
PL Amortisation of Airport Operation Right
BS Accumulated Amortisation of Airport Operation Right
* AOR = Construction in progress-(NPV of Passenger Revenue Receivable ** TR-GAAP *** IFRS (IFRIC 12 application) **** Discounted guaranteed passenger revenues for that period
Guaranteed Pax Structure 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
An
kara
International Departing Pax (m) 0.8 0.8 0.9 0.9 1.0 1.0 1.1 1.1 1.2 1.2 1.3 1.3 1.4 1.5 1.6 0.6
Guaranteed Pax Income (€m) 11.8 12.4 13.0 13.7 14.4 15.1 15.8 16.6 17.5 18.3 19.2 20.2 21.2 22.3 23.4 9.6
Domestic Departing Pax (m) 0.6 0.7 0.7 0.7 0.8 0.8 0.8 0.9 0.9 1.0 1.0 1.1 1.1 1.2 1.2 0.5
Guaranteed Pax Income (€m) 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.7 2.8 2.9 3.1 3.2 3.4 3.6 3.7 1.5
Total Guaranteed Pax Income (€m) 13.7 14.4 15.1 15.9 16.7 17.5 18.4 19.3 20.2 21.3 22.3 23.4 24.6 25.8 27.1 11.1
Discount Income (€m) 11.80 10.96 9.93 8.69 7.21 5.47 3.43 0.43
İzm
ir
International Departing Pax (m) 1.1 1.1 1.1 1.2 1.2 1.2 1.3
Guaranteed Pax Income (€m) 15.9 16.4 16.9 17.4 17.9 18.4 19.0
Total Guaranteed Pax Income (€m) 29.6 30.8 32.0 33.3 34.6 35.9 37.4 19.3 20.2 21.3 22.3 23.4 24.6 25.8 27.1 11.1
6
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8
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Reconciliation of Revenue and EBITDA (1H 2018)
27
Revenue Reconciliation EBITDA Reconciliation
545,3
4,4 0,0
549,7
IFR
S R
eve
nu
e(r
epo
rted
by
AD
P)
An
kara
Gu
aran
teed
Pax
Rev
enu
e
Co
nst
ruct
ion
Rev
enu
e
Ad
just
ed R
eve
nu
e(r
epo
rted
by
TAV
)
227,7
4,4 21,6
253,7
EBIT
DA
rep
ort
ed b
yA
DP
An
kara
Gu
aran
teed
Pax
Rev
enu
e
Equ
ity
Pic
k-u
p
EBIT
DA
rep
ort
ed b
yTA
V
(Net
of
dis
cou
nt
inco
me)
(Net
of
dis
cou
nt
inco
me)
Equity Accounted Investees – IFRS 11
28
1Q16 2Q16 3Q16 4Q16 FY16 1Q17 2Q17 3Q17 4Q17 FY17 1Q18 2Q18 Antalya (50%) ¹ Revenue 8,9 23,2 39,2 19,6 90,9 7,5 35,4 65,0 22.3 130.2 12,0 43,4
EBITDAR ² 4.1 18.3 33.9 14.3 70.6 3.8 30.5 59.6 17.4 111.3 4.3 41.1 EBITDA ² -11,4 2,8 18,2 -1,4 8,2 -6,9 14,7 43,6 1.4 52.8 -10,9 25,8 Net Profit -16,3 1,2 9,6 -6,2 -11,8 -10,1 8,2 24,7 -2,8 20,0 -12,4 16.8 Net Debt 113,2 104,7 76,2 63,4 63,4 63,8 47,6 2,1 -21,2 -21,2 29,9 54,0
PPAA ³ -8,5
Net Profit+PPAA 8.3 (⁴) 1Q16 2Q16 3Q16 4Q16 FY16 1Q17 2Q17 3Q17 4Q17 FY17 1Q18 2Q18 ATU (%50) Revenue 72.1 84.7 93.0 86.7 336.4 68.3 85.8 102.0 86.0 342.1 76.0 88.2
EBITDA* 1.5 4.7 10.2 11.1 27.4 5.9 6.4 12.7 3.8 28.7 6.9 10.1 Net Profit 1.3 3.5 1.8 10.4 16.9 3.3 4.5 8.4 4.3 20.5 5.0 7.5 Net Debt 13.3 12.2 18.0 9.3 9.3 8.8 4.5 -1.1 -4.6 -4.6 -9.3 -5.4
1Q16 2Q16 3Q16 4Q16 FY16 1Q17 2Q17 3Q17 4Q17 FY17 1Q18 2Q18
TGS (50%) Revenue 32.4 36.0 39.5 22.3 130.2 25.5 32.0 36.8 32.4 126.7 29.0 36.4 EBITDA 3.3 4.9 5.9 -2.8 11.2 1.9 3.8 7.3 2.6 15.6 1.1 6.8 Net Profit 1.8 2.7 3.5 -3.6 4.4 0.6 2.0 5.0 1.8 9.4 0.3 5.2 Net Debt 0 0.0 0.0 0.1 0.1 - 0.0 0.0 -11.4 -11.4 0.0 0.0
1Q16 2Q16 3Q16 4Q16 FY16 1Q17 2Q17 3Q17 4Q17 FY17 1Q18 2Q18
TIBAH (33%) Revenue 14.1 14.8 16.5 14.3 59.8 16.8 18.2 21.4 13.8 70.2 16.8 17,3
(Medinah) EBITDA 8.8 6.1 7.1 4.8 26.8 3.4 4.1 5.5 2.1 15.1 4.2 3,9
Net Profit 0.8 -1.3 -0.7 -2.9 -4.2 -4.5 -3.7 -0.7 -2.7 -11.6 -1.6 -1,8
Net Debt 317.0 322.6 315.6 316.5 316.5 311.0 300.7 300.3 283.0 283.0 274.9 294.4
6
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8
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¹ TAV Airports’ 49% stake in TAV Antalya entitles it to equal governance and 50% of dividends. ² Adjusted EBITDA after concession rent amortization (IFRS EBITDA is before concession rent amortization) ³ TAV Airports’ Purchase Price Allocation (PPA) Amortization for Antalya Airport ⁴ While TAV Antalya’s contribution to TAV Airports Q2 2018 consolidated financials only includes May and June 2018 amounting to EUR 8.5 million, the EUR 8.3 million is calculated for Q2 2018.
Income Statement / Balance Sheet
29
INCOME STATEMENT (€m) 1H17 1H18
Construction revenue 13,5 0,0 Total operating revenue 507,9 545,3 Other operating income 0,3 0,3 Aviation income 161,5 181,7 Ground handling income 67,8 71,1 Commission from sales of duty free goods 109,5 116,0 Catering services income 48,3 52,6 Other operating revenue 120,9 123,8 Construction expenditure (13,5) 0,0 Operating expenses (367,4) (372,3) Cost of catering inventory sold (19,7) (19,0) Cost of services rendered (33,3) (29,7) Personnel expenses (119,1) (118,2) Concession rent expenses (79,9) (80,9) Depreciation and amortization expense (58,8) (54,5) Other operating expenses (56,5) (70,0) Equity Pick-up 0,6 21,6 Operating profit 141,5 194,8 Finance income 2,6 7,1 Finance expenses (52,4) (63,1) Profit before income tax 91,7 138,8 Income tax expense (30,2) (43,4) Profit for the period from continuing operations 60,0 93,1 Attributable to: Owners of the Company 60.0 93.1 Non-controlling interest 1.5 2.3
EQUITY AND LIABILITIES (€m) 1H17 1H18
EQUITY
Share capital 162,4 162,4
Share premium 220,3 220,3
Legal reserves 109,7 118,9
Other reserves -70,2 -81,3
Revaluation surplus 0,0 0,0
Purchase of shares of entities under common control 40,1 40,1
Cash flow hedge reserve -53,9 -47,1
Translation reserves -31,1 -45,2
Retained earnings / (Accumulated losses) 429,0 540,8
Total equity attributable to equity holders of the Company 806,2 908,8
Non-controlling interest -1,4 -2,9
Total Equity 804,8 905,9
Loans and borrowings 541,7 605,9
Reserve for employee severance indemnity 23,4 18,1
Due to related parties 0,0 301,4
Derivative financial instruments 43,5 28,7
Deferred income 30,0 18,0
Other payables 564,7 541,1
Deferred tax liabilities 18,8 15,2
Total non-current liabilities 1.222,2 1.528,3
Bank overdraft 3,1 -0,0
Loans and borrowings 627,8 572,3
Trade payables 44,3 46,7
Due to related parties 5,7 1,0
Current tax liabilities 14,7 24,3
Other payables 250,7 221,3
Provisions 7,3 6,4
Deferred income 13,5 11,9
Derivative financial instruments 0,0 -0,0
Total current liabilities 967,0 883,8
Total Liabilities 2.189,2 2.412,2
TOTAL EQUITY AND LIABILITIES 2.994,0 3.318,0
ASSETS (€m) 1H17 1H18
Property and equipment 210,1 216,0
Intangible assets 13,2 11,4
Airport operation rights 1.677,5 1.597,4
Other investments 0,0 -0,0
Goodwill 136,1 136,0
Prepaid concession expenses 7,7 4,7
Derivative Financial Instruments 0,0 0,1
Trade receivables 85,0 72,7
Other non-current assets 5,4 5,8
Deferred tax assets 35,2 29,5
Equity pick-up assets 76,0 441,2
Total non-current assets 2.246,2 2.514,7
Inventories 10,2 9,8
Prepaid concession expenses 150,6 110,9
Trade receivables 157,7 143,0
Due from related parties 22,2 28,9
Derivative financial instruments 0,0 0,0
Other receivables and current assets 64,2 57,9
Cash and cash equivalents 192,7 248,1
Restricted bank balances 150,1 204,7
Total current assets 747,8 803,3
TOTAL ASSETS 2.994,0 3.318,0
6
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Cash Flow Statement
30
CASH FLOWS FROM OPERATING ACTIVITIES 1H17 1H18
Profit for the period 61.5 95.5
Adjustments for:
Amortisation of airport operation right 31.0 26.7
Depreciation of property and equipment 25.7 26.4
Amortisation of intangible assets 2.2 1.3
Concession and rent expenses 79.9 80.9
Provision for employee severance indemnity 3.0 2.6
Provision for doubtful receivables 0.4 0.4
Discount on receivables and payables, net -0.1 0.0
Provision set for unused vacation 0.9 1.1
Interest income -4.6 -7.1
Interest expense on financial liabilities 30.9 34.5
Tax expense 30.2 43.4
Unwinding of discount on concession receivable and payable
11.4 11.2
Share of profit of equity-accounted investees, net of tax -0.6 -21.6
Unrealised foreign exchange differences on statement of financial position items
-2.2 -9.8
Cash flows from operating activities 269.5 285.3
Change in current trade receivables -27.7 -13.3
Change in non-current trade receivables 11.0 11.6
Change in inventories -1.4 0.1
Change in due from related parties -6.3 -3.3
Change in other receivables and assets -0.6 13.8
Change in trade payables -11.8 0.4
Change in due to related parties 2.8 0.3
Change in other payables and provisions -38.9 -71.3
Cash provided from operations 196.6 223.6
Income taxes paid -33.6 -36.2
Retirement benefits paid -2.1 -2.1
Additions to prepaid concession and rent expenses -134.1 -116.0
Net cash provided from operating activities 26.8 69.2
CASH FLOWS FROM INVESTING ACTIVITIES 1H17 1H18
Proceeds from sale of property, equipment and intangible assets
0.5 0.8
Acquisition of property and equipment -9.3 -52.3
Additions to airport operation right -13.3 0.0
Acquisition of joint venture net of cash acquired 0.0 -360.0
Acquisition of intangible assets -0.7 -1.1
Change in due from related parties 4.1 -3.3
Change in due to related parties 0.0 0.0
Dividends from equity-accounted investees 18.7 22.8
Net cash used in investing activities -0.1 -393.1
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 28.1 170.1
Repayment of borrowings -100.1 -115.8
Dividends paid -68.8 -88.5
Interest received 4.7 9.4
Interest paid -23.4 -22.6
Change in due to related parties 0.0 301.4
Change in restricted bank balances 8.9 -25.7
Change in finance lease liabilities -2.0 -0.5
Net cash used in financing activities -152.5 227.8
NET INCREASE IN CASH AND CASH EQUIVALENTS -125.8 -96.1
CASH AND CASH EQUIVALENTS AT 1 JANUARY 315.3 344.2
CASH AND CASH EQUIVALENTS AT 30 JUNE 189.5 248.1
6
235 242 250
8
251 243 223
Airport Type/Expire TAV Stake Scope 2016 Pax (mppa)
fee/pax Int'l
fee/pax Dom.
Volume Guarantee
Yearly Lease/ Concession Fee Paid
Net Debt (1)
Istanbul Ataturk Lease
100% Terminal 63.7 US$15
€3 No $140m + VAT €-23m (January 2021) €2.5 (Transfer)
Ankara Esenboga BOT
100% Terminal 15.8 €15
€2.5 (Transfer) €3
0.6m Dom. , 0.75m Int'l for 2007+5% p.a
- €9m (May 2023)
Izmir A.Menderes (Ege)
Concession 100% Terminal 12.8
€15 €2.5 (Transfer)
€3 No €29m+VAT (2)
€211m
(December 2032)
Gazipasa Alanya Lease
100% Airport 0.8 €10(3) TL7.5(3) No $50,000+VAT(4) €48m (May 2034)
Milas Bodrum Concession
(December 2035) 100% Terminal 3.5 €15 €3 No
€143.4m upfront+ €28.7m+VAT (5)
€135m
Tbilisi BOT
80% Airport 3.2 US$24 US$6 No - €-8m (February 2027)
Antalya Concession
(December 2024) 50%(10) Terminal 26.0
€15 €2.5(Transfer)
€3 No $100.5m + VAT -
Batumi BOT
76% Airport 0.5 US$12 US$7 No - €-6m (August 2027)
Monastir&Enfidha BOT+Concession
67% Airport 1.7 €9 €1 No
11-26% of revenue from €356m
(May 2047) 2010 to 2047
Skopje & Ohrid BOT+Concession
100% Airport 2.0 €17.5 in Skopje, €16.2 in Ohrid
- No 4% of the gross annual
turnover (6) €41m
(March 2030)
Medinah (TIBAH)
BTO+Concession 33% Airport 7.8 SAR 87 (7) - No 54.5% (8) -
(2037)
Yanbu, Hail & Qassim(7,9)
BTO+Concession
50% Airport
3.5 SAR 87(7) SAR 10 No
3% of the gross annual turnover for Yanbu
3,6% of the gross annual turnover until 2026, 7,2% between 2026-2047 for
Hail&Qassim
- (2047)
Zagreb (MZLZ)
BOT+Concession (April 2042)
15% Airport 3.1 €15
€7 No €2.0 - €11.5m fixed 0.5% (2016) - 61%
(2042) variable -
€4 (Transfer)
Concession Overview
31
1) As of 30 June 2018 2) Accrual basis: Depreciation expense of €13.5m in 2015 to €32.4m in 2032 plus finance expense of €17.8m in
2015 to €0m in 2032 3) TAV Gazipasa tariff increased on January 1, 2015 4) TAV Gazipasa will make a yearly rent payment of US$ 50,000 + VAT plus 65% of net profit to DHMI. 5) Yearly payments start October 2015. Accrual basis: Depreciation expense of €11.1m in 2016 to €38.0m in 2032 plus
finance expense of €18.8m in 2016 to €0m in 2032
6) The percentage will be tapered towards 2% as passenger numbers increase. 7) SAR 87 from both departing and arriving international pax. Pax charge will be increase as per cumulative CPI in Saudi
Arabia every three years 8) The concession charge was reduced to 27.25 % for the first two years that follow the completion of the construction
of the new terminal in Q2 2015 9) TAV Airports won the concession for these airports but has not operated these airports 10) TAV Airports’ 49% stake in Antalya Airport entitles it to equal governance and 50% of dividends.
6
235 242 250
8
251 243 223
Airport Type/Expire TAV Stake Scope 2017 Pax (mppa)
fee/pax Int'l
fee/pax Dom.
Volume Guarantee
Yearly Lease/ Concession Fee Paid
Net Debt (1)
TAV became 100% shareholder of BTA
EUR25million impairment of Milas Bodrum (net profit impact of EUR20million, after deferred tax)
Havas Germany operations shut down
Accounting methodology changes
~EUR15m software sales revenue accrued in Q4, mainly from Abu Dhabi and Saudi projects
MoU signed to undertake exclusive negotiations with the Cuban government for Havana Airport
Q4
Timeline
32
2017 2018 2016
TRY 348 million cash dividends paid
Macedonia loan refinanced with one-off cost of ~EUR7m
Q1
TRY 248 million cash dividends paid
Adverse weather conditions in January led to flight cancellations in İstanbul
New terminal building of Zagreb Airport opened at the end of March
Q1
TRY 406 million cash dividends paid
Signed SPA to purchase 49% of Antalya Airport with co-control and equal dividend rights from IC for EUR 360 million
Q1
Istanbul loan refinanced with one-off cost of ~EUR11m (will be net income neutral by year-end)
Tunisia deferred tax asset reversal of ~EUR14m
Ataturk extension complete
Tbilisi runway and taxiway rehabilitation complete
Attack on the airport (June 28), coup attempt (July 15)
Q2
Consortium with TAV invited to exclusive negotiations for Havana Airports, Cuba
Started negotiations with Saudi Oger Ltd. to purchase half of its 33.3% shares of Tibah
Q3
Philippines regional airports tender cancelled
Saudi airports awarded (Yanbu, Qasim and Hail)
New arrival terminal building of Tbilisi Airport opened at the end of June
Q2
Change in shareholder structure
Guidance Revision for 2017
Q3
Q4
Antalya Airport share transfer took place in May 2018
TGS contract renewed for 15 more years
Q2
Tax Regimes
33
Corporate income tax rate of 25%
Corporate income tax rate of 10%
Corporate income tax rate of 20% as of 2018 (15% previously)
Corporate income tax rate of 20% for non-residents
Corporate income tax rate of 18%
Corporate income tax rate of 22% for 2018-2019-2020 (20% previously) %. Advance tax returns are filed on a quarterly basis Losses can be carried forward for offsetting against future taxable income for up to 5 years
Corporate income tax rate of 15%
Turkey
Georgia
Tunisia
Macedonia
Latvia
Saudi Arabia
Croatia
Share Price Performance 1M 3M YTD
TRY 23% 15% 29%
USD 17% -4% 1%
Relative to BIST -100 21% 29% 56%
Share Performance (July 25, 2018)
ESG & Share Performance
34
Corporate Governance rating has increased to 96.17 (9.62 out of 10) from a rating of 95.38 (9.54 out of 10), owing to our strong emphasis on developing good corporate governance practices. The previous rating was announced on 19.08.2016.
Corporate Governance Rating Weight Grade
Shareholders 25% 95.77
Public Disclosure and Transparency 25% 97.34
Stakeholders 15% 98.82
Board of Directors 35% 94.48
Total 100% 96.17 Closing Price (TRY)
27.76 Market Cap USD 2.1 bn
Avg. Daily Volume** USD 8 m
Free Float* 44%
Effective Free Float* 44%
Foreign Ownership
~90%
* Source: Central Registry Agency (MKK) ** 2018 yearly average
85 129 193
247 166 63
TAV Airports was included in the BIST Sustainability Index on November 4, 2014.
6
235 242 250
8
251 243 223
Sustainability
3,0
4,0
5,0
6,0
7,0
8,0
9,0
10,0
25.
07.2
01
8
27.
04.2
01
8
31.
01.2
01
8
6.1
1.2
017
8.0
8.2
017
10.
05.2
01
7
13.
02.2
01
7
18.
11.2
01
6
18.
08.2
01
6
20.
05.2
01
6
24.
02.2
01
6
30.
11.2
01
5
01.
09.2
01
5
05.
06.2
01
5
09.
03.2
01
5
11.
12.2
01
4
12.
09.2
01
4
16.
06.2
01
4
18.
03.2
01
4
20.
12.2
01
3
19.
09.2
01
3
21.
06.2
01
3
26.
03.2
01
3
TAVHL ($)
TUNISIA
UAE
QATAR
GEORGIA
TURKEY
OMAN KENYA
SAUDI ARABIA
LATVIA
GERMANY
USA CROATIA
MACEDONIA
Global Presence with Service Companies in 20 Countries and 78 Airports
35
CHILE
INDONESIA
JORDAN
DENMARK
SWITZERLAND
EGYPT
RWANDA
Source: Groupe ADP, TAV Airports ( as of end-2017) * Groupe ADP sold its stake in the Mexican company Servicios de Tecnología Aeroportuaria (SETA), which itself has a 16.7% stake in holding company Grupo Aeroportuario del Centro Norte (GACN), which controls 13 airports in the north and centre of Mexico, including Monterrey International Airport. Since end of December 2016, Groupe ADP manages Antananarivo & Nosy Be airports in Madagascar but Group traffic figures do not include yet in 2016 their traffic figures. ** Passenger numbers are for FY 2017, excluding passenger numbers for Schiphol, Riga Airports and Yanbu, Hail and Qassim Airports in Saudi Arabia. This calculation takes into account Paris Aéroport and TAV Airports’ figures at 100% for 2017 and, for minority stakes, it takes into account the traffic weighted by stake of ownership. 36
A Platform of 23 airports* and 228 million passengers**
FRANCE Paris-CDG: 69.5mn pax Paris-Orly: 32.0mn pax Owner and operator
Schiphol Group (8%) 68.5mn pax Industrial cooperation
Liège (25.6%) Strategic partner Croatia (TAV 15% ADPM
21%) Zagreb Airport:3.1mn pax Concession operator
Turkey Istanbul Ataturk: 63.7mn pax Ankara: 15.8mn pax Izmir: 12.8mn pax Mlas-Bodrum: 3.5mn pax Gazipasa: 0.8mn Concession operator
Amman – Jordan (9.5%) 7.9 mn pax Management contract Strategic partner
Medinah (Saudi Arabia) (33%) 7.8mn pax
Concession operator
Tunisia (67%) Enfidha & Monastir 1.7mn pax Concession operator
Jeddah (Hajj Terminal) – Saudi Arabia
8.0mn pax Management contract
Mauritius (10%) 3.7mn pax Operator Strategic partner
Conakry Airport (29%) 0.5mn pax Operator
Santiago de Chile (45%) 21.4mn pax Concession
ADP TAV Airports
Groupe ADP – TAV Airports: A Global Footprint
Macedonia (100%) Skopje & Ohrid: 2.0 mn pax
Concession operator
Georgia Tbilisi(80%) & Batumi(76%): 3.7 mn pax Concession operator
Madagascar (35%) (Since December 2016)
1.1mn pax Concession Operator
Major Airports in Turkey
37
Istanbul / Ataturk Airport Tender Date: 2005 Type: Lease Expire: 2021
63,7 m Intl: 44,3 m
Dom: 19,5 m
Ankara / Esenboga Airport Tender Date: 2006 Type: BOT Expire: 2023
15,8 m Intl: 2,0 m
Dom: 13,9 m
İzmir / A.Menderes Airport Tender Date: 2011* Type: Lease Expire: 2032
12,8 m Intl: 2,4 m
Dom: 10,5 m
Milas-Bodrum Airport Tender Date: 2014* Type: Lease Expire: October 22,2035
3,5 m Intl: 0,9 m
Dom: 2,6 m Mugla / Dalaman Airport
Tender Date: 2014 Type: BOT+Lease Expire: 2039
3,7 m Intl: 2,3 m
Dom: 1,4 m
Antalya Airport Tender Date: 2007 Type: Lease Expire: 2024
25,9 m Intl: 18,5 m Dom: 7,5 m
Gaziantep Airport 2,9 m Intl: 0,3 m
Dom: 2,6 m
Adana Airport 5,6 m Intl: 0,6 m
Dom: 5,0 m
Kapadokya Airport 0,1 m Intl: 0 m
Dom: 0,1 m
Trabzon Airport 4,2 m Intl: 0,2 m
Dom: 4,0 m
Samsun Airport 1,2 m Intl: 0,0 m
Dom: 1,1 m
GazipasaAirport Tender Date: 2007 Type: Lease Expire: 2034
0,8 m Intl: 0,3 m
Dom: 0,5 m
* International terminal taken over in October 2015 ** Pax numbers are for 2017.
Operated by TAV Airports
Not privatized
Operated by others
230 231 232
İstanbul / Sabiha Gokcen Airport
Tender Date: 2007 Type: BOT Expire: 2032
31,4 m Intl:10,3 m
Dom: 21,1 m
New Airport
Sabiha Gokcen
Ataturk Int.
Airport
3rd Bridge
Macro Outlook
38
Country Subject Descriptor Units Scale 2016 2017 2018 2019 2020 2021 2022 2023
Gross domestic product, constant prices % Ch. 3,2 2,8 2,8 2,6 2,4 2,3 2,2 2,2
Croatia
Gross domestic product, current prices USD Billions 51,4 54,5 61,1 63,8 66,6 69,1 72,0 73,9
Gross domestic product per capita, current prices USD Thousands 12,3 13,1 14,8 15,5 16,3 17,0 17,8 18,4
Inflation, average consumer prices % Ch. -1,1 1,1 1,5 1,5 1,6 1,7 1,8 1,8
Population Persons Millions 4,2 4,1 4,1 4,1 4,1 4,1 4,0 4,0
Gross domestic product, constant prices % Ch. 2,8 4,8 4,5 4,8 5,0 5,2 5,2 5,2
Georgia
Gross domestic product, current prices USD Billions 14,3 15,1 16,1 17,4 18,8 20,4 22,1 24,0
Gross domestic product per capita, current prices USD Thousands 3,9 4,1 4,4 4,7 5,1 5,5 6,0 6,5
Inflation, average consumer prices % Ch. 2,1 6,0 3,6 3,0 3,0 3,0 3,0 3,0
Population Persons Millions 3,7 3,7 3,7 3,7 3,7 3,7 3,7 3,7
Gross domestic product, constant prices % Ch. 2,2 4,5 4,0 3,5 3,3 3,2 3,1 3,0
Latvia
Gross domestic product, current prices USD Billions 27,6 30,3 35,9 38,6 41,4 44,0 46,8 49,5
Gross domestic product per capita, current prices USD Thousands 14,0 15,5 18,5 19,9 21,4 22,8 24,3 25,7
Inflation, average consumer prices % Ch. 0,1 2,9 3,0 2,5 2,5 2,4 2,4 2,3
Population Persons Millions 2,0 2,0 1,9 1,9 1,9 1,9 1,9 1,9
Gross domestic product, constant prices % Ch. 2,9 2,9 2,8 3,0 3,2 3,4 3,5 3,5
FYR Macedonia
Gross domestic product, current prices USD Billions 10,8 11,4 13,1 13,9 14,8 15,8 16,8 17,9
Gross domestic product per capita, current prices USD Thousands 5,2 5,5 6,3 6,7 7,1 7,6 8,1 8,6
Inflation, average consumer prices % Ch. -0,2 1,4 1,8 1,9 2,0 2,0 2,0 2,0
Population Persons Millions 2,1 2,1 2,1 2,1 2,1 2,1 2,1 2,1
Gross domestic product, constant prices % Ch. 1,7 -0,7 1,7 1,9 1,9 2,1 2,2 2,3
Saudi Arabia
Gross domestic product, current prices USD Billions 644,9 683,8 748,0 759,2 776,3 801,6 832,0 866,0
Gross domestic product per capita, current prices USD Thousands 20,3 21,1 22,6 22,5 22,6 22,9 23,3 23,8
Inflation, average consumer prices % Ch. 2,0 -0,9 3,7 2,0 2,2 2,2 2,1 2,1
Population Persons Millions 31,7 32,4 33,0 33,7 34,4 35,0 35,7 36,5
Gross domestic product, constant prices % Ch. 1,0 1,9 2,4 2,9 3,4 3,6 4 4,2
Tunisia
Gross domestic product, current prices USD Billions 42,1 40,3 40,3 42,0 43,8 46,3 48,9 51,8
Gross domestic product per capita, current prices USD Thousands 3,7 3,5 3,5 3,6 3,7 3,9 4,0 4,2
Inflation, average consumer prices % Ch. 3,7 5,3 7,0 6,1 5,2 4,3 4,0 3,9
Population Persons Millions 11,4 11,5 11,6 11,8 11,9 12,0 12,1 12,2
Gross domestic product, constant prices % Ch. 3,2 7,0 4,4 4,0 3,6 3,6 3,6 3,6
Turkey
Gross domestic product, current prices USD Billions 863,4 849,5 909,9 961,7 1.025,0 1.089,0 1.155,0 1.223,0
Gross domestic product per capita, current prices USD Thousands 10,8 10,5 11,1 11,6 12,2 12,8 13,5 14,1
Inflation, average consumer prices % Ch. 7,8 11,1 11,4 10,5 9,0 8,0 8,0 8,0
Population Persons Millions 79,8 80,8 81,9 82,9 83,9 84,9 85,9 86,9
IMF, World Economic Outlook Database, April 2018
228 238 248
10
242 247 252
9
Contact IR
39
IR Team About TAV Airports
Nursel İLGEN, CFA Director, Head of Investor Relations [email protected] Tel :+90 212 463 3000 / 2122 Fax : +90 212 465 3100
Besim MERİC Investor Relations Coordinator [email protected] Tel :+90 212 463 3000 / 2123 Fax : +90 212 465 3100
Ali Ozgu CANERİ Investor Relations Coordinator [email protected] Tel :+90 212 463 3000 / 2124 Fax : +90 212 465 3100
IR Website http://ir.tav.aero
e-mail [email protected]
Phone +90-212-463 3000 (x2122 – 2123 – 2124 - 2125)
Twitter twitter.com/irTAV
Facebook facebook.com/irTAV
Address TAV Airports Holding Co. Istanbul Ataturk Airport International Terminal (Besides Gate A and VIP) 34149 Yesilkoy, Istanbul
Turkey
Georgia
Tunisia
Macedonia
Saudi Arabia
Latvia
Croatia
Istanbul Ataturk Ankara Esenboga Izmir Adnan Menderes
Gazipasa Alanya Milas Bodrum Antalya
Tbilisi and Batumi
Monastir and Enfidha
Skopje and Ohrid
Medinah Yanbu, Hail & Qassim*
Riga (only commercial areas)
Zagreb
TAV Airports through its affiliates and subsidiaries, in auxiliary airport services including duty free, food and beverage, ground handling services, IT, security and operation services. As part of these diversified services TAV Airports also operates the duty-free, food and beverage and other commercial areas at Riga Airport in Latvia. In 2017, the company provided services for 836K flights and more than 115 million passengers. The Company’s shares are listed in Borsa Istanbul since February 23, 2007, under the ticker code “TAVHL”
*TAV Airports won the concession for these airports but has not operated these airports
Disclaimer
This presentation does not constitute an offer to sell or the solicitation of an offer to buy or acquire any shares of TAV Havalimanlari Holding A.S. (the "Company") in any jurisdiction or an inducement to enter into investment activity. No information set out in this document or referred to in such other written or oral information will form the basis of any contract.
The information used in preparing these materials was obtained from or through the Company or the Company’s representatives or from public sources. No reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its accuracy, completeness or fairness. The information in this presentation is subject to verification, completion and change. While the information herein has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by the Company or any of its group undertakings, employees or agents as to or in relation to the accuracy, completeness or fairness of the information contained in this presentation or any other written or oral information made available to any interested party or its advisers and any such liability is expressly disclaimed. This disclaimer will not exclude any liability for, or remedy in respect of fraudulent misrepresentation by the Company.
This presentation contains forward-looking statements. These statements, which may contain the words “anticipate”, “believe”, “intend”, “estimate”, “expect” and words of similar meaning, reflect the Company’s beliefs, opinions and expectations and, particularly where such statements relate to possible or assumed future financial or other performance of the Company, are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, among other factors, changing business or other market conditions and the prospects for growth anticipated by the management of the Company. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. These forward-looking statements speak only as at the date of this presentation. The Company expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Past performance cannot be relied upon as a guide to future performance. As a result, you are cautioned not to place reliance on such forward-looking statements.
Information in this presentation was prepared as of July 26, 2018.
40