MAG Annual Report and Accounts 2018 Content Section at Start: Page Title at Start: Content Section at Start: Page Title at Start: Overview Our Vision
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ANNUAL REPORT AND ACCOUNTS ANNUAL REPORT FOR THE YEAR ENDED 31 MARCH 2018 MAG Annual Report and Accounts 2018 Content Section at start: Page Title at start: Content Section at start: Page Title at start: Overview Our vision MAG 1 Annual Report and Accounts 2018 Overview Strategic report Governance Financial statements MAG is a leading UK airport group which owns OUR VISION View the latest results online at and operates three major UK airports To be the premier www.magairports.com/ and a successful airport property business. airport management investor-relations/ Manchester London Stansted East Midlands MAG Property and services company. Overview 1 Our vision 2 Our mission 3 Financial highlights 4 At a glance 6 Global connectivity Strategic report 8 Chairman’s statement 10 Key performance indicators 12 Chief Executive’s operating review 18 Business model 20 Our strategy 28 Financial review 40 Risk management Airlines1 CashDestinations generated Revenue 44 Corporate social responsibility supported fromreached operations1 ResultPassenger from Numbers1 £818.1m operations Governance XX £ XXX m 54 Chairman’s introduction to corporate governance CargoPassenger shipped +10.2% 328.8 +XX% +XX%+3.6% £XX.Xmm 56 Board of Directors numbers(tonnes) 2017: £742.7m 206.8 59 Corporate governance report Airlines 2017: £317.3m (2016: X X) ,1 (2016: XXX) +XX%+5.6% 67 Directors’ remuneration report Adjustedsupported EBITDA* XXXkm (2016:2017: £195.8m 55.9) 70 Directors’ report 58.9 73 Directors’ responsibilities statement ,1 +XX%+6.7% £358.8XX m CargoAdjusted* shipped 2017: 55.2m (tonnes) (2016: XXXk) +XX%+5.8% operating profit Financial statements 2017: £339.2m 76 Independent auditor’s report (2016: X X) XXXk 78 Accounting policies £215.4 m 84 Consolidated income statement +XX%+6.2% 85 Consolidated statement of comprehensive income (2016:2017: £202.9m XXXk) 86 Consolidated statement of changes in equity 87 Consolidated statement of financial position 88 Consolidated statement of cash flows 89 Notes to the financial statements Notes 121 Company financial statements Notes 1 All numbers relate to continuing operations, and 2017 numbers 1 All numbers relate to continuing operations, and 2017 numbers have been restated as explained on pages 78 and 120. have been restated as explained on pages 78 and 120. * As explained in the financial review on page 30. * As explained in the financial review on page 30. Content Section at start: Page Title at start: Content Section at start: Page Title at start: Our mission Financial highlights 2 MAG 3 Annual Report and Accounts 2018 Overview Strategic report Governance Financial statements Financial highlights1 OUR MISSION Revenue Adjusted EBITDA* Adjusted operating profit* To deliver sustainable growth in shareholder £818.1m £358.8m £215.4m 2018 818.1 2018 358.8 2018 215.4 value, balancing the needs of our customers, 2017 742.7 2017 339.2 2017 202.9 2016 715.0 2016 317.7 2016 186.9 passengers, employees and the communities +£75.4m +£19.6m +£12.5m in which we work, while maintaining the +10.2% +5.8% +6.2% Passenger Cash generated Result from highest safety and security standards. numbers from operations operations 58.9m £328.8m £206.8m Operating highlights 2018 58.9 2018 328.8 2018 206.8 2017 55.2 2017 317.3 2017 195.8 • Successful route network development over the course of the year with an array of important destinations added 2016 51.2 2016 322.4 2016 175.6 +3.7m +£11. 5 m +£11. 0 m • Emirates announces a daily link from London Stansted to Dubai, +6.7% +3.6% +5.6% the first time a Middle Eastern hub carrier has served London Stansted Notes 1 All numbers relate to continuing operations unless stated, and 2017 and 2016 numbers have been restated as explained on pages 78 and 120. * As explained in the financial review on page 30. • Start of Manchester Airport Transformation Programme, which will give the airport the terminal facilities needed to make best use of its two full-length runways • The initial phases of London Stansted’s Transformation Programme got underway, which will ultimately provide the facilities for long-term growth • London Stansted submitted a planning application to raise limits on the number of passengers that the airport is permitted to serve from 35m passengers per year to 43m – without increasing the currently permitted number of flights or the agreed noise footprint • Let 70,000 sq ft of office space, including 51,000 sq ft to e-commerce giant The Hut Group, at Manchester Airport 280+ • Major new employment programme, destinations by MAG Connect, launched in response to 70 airlines expected growth in the coming years 680k745k tonnes of cargo shipped Content Section at start: Page Title at start: Content Section at start: Page Title at start: Corporate social responsibility 44 MAG 45 Annual Report and Accounts 2018 Overview Strategic report Governance Financial statements Corporate social responsibility The last year has seen MAG embark on one of the most ambitious CSR strategy focuses on supporting our communities and protecting their environment, providing a wider economic periods in its history, beginning more than £1.5bn worth of investments benefit to the areas we serve and working across the business to provide a safe, to transform the capacity, capability and customer experience of our supportive and fair workplace. business. This growth depends not simply on the scale of our ambition or investment, but also on the ongoing support of our employees and local communities as well. That’s why MAG’s CSR strategy focuses Our approach to CSR To make sure we are able to take into on supporting our communities and Our airports support a huge variety of account the views and expectations of Our CSR objectives protecting their environment, providing jobs and play an important role in both people right across both our business and a wider economic benefit to the areas the national and regional economies they our local communities, each year we we serve and working across the business serve. MAG’s CSR strategy recognises commission an independent review of our to provide a safe, supportive and fair that the nature of our business comes with material issues so we can reflect those workplace for all the people and a duty to act responsibly, work closely that matter most to our communities, businesses that work with us. with our colleagues and local communities colleagues, investors and customers in Our Business Our Environment in a way that is fair, safe and sustainable. our plans. You can read more about our materiality process here: Working in the spirit of partnership, we will We will make the best use of natural resources www.magairports.com/responsible- maximise our social and economic contributions and minimise the environmental impact of business/csr-reports/ in the regions we serve. our operations. In line with best practice, we publish a full CSR report, modern slavery statement and gender pay gap report, all can be located on our Corporate website www.magairports.com Our Colleagues Our Community Shareholders Gross Keeping them safe at all times, we will support By building enduring relationships with our local • Progressive dividend and develop our people so they consistently deliver communities, we will seek to understand the issues that Value Added XX% high performance. are important to them, and use our combined skills and resources to work together for our mutual benefit. £ 7.dividend 7 5growth b n Our business impact But as these important changes at MAG surpassed the 28m passenger mark on Shareholders The last year has seen MAG experience come to fruition, we know that the value a rolling 12 month basis, the first time in All• Progressive three airports dividend another year of impressive growth, to the UK will grow alongside them. The the airport’s history. Ryanair has also areXX% carbon increasing the number of passengers Government’s aviation strategy notes that committed to a significant investment at “the Secretary of State underlined the Manchester Airport by basing an dividendneutral growth travelling through our airports by 6.7% from 55.2m to 58.9m, and the tonnage of importance of aviation to delivering a truly additional three aircraft at the UK’s global cargo carried from 697,635 to 745,214, global Britain”, and we agree. As we gateway in the North, which will also an increase of 7%. This growth underlined leave the EU, the importance of MAG’s see the airline deliver ten additional ShareholdersOver the need for us to invest in our business role in the economy will increase too. destinations. At £1bn, the Manchester • Progressive dividend and develop it for the future. As a result, Transformation Project is one of the largest 40,000XX% this year our airports have contributed Manchester Airport is the largest UK private investments in the North. It will peopledividend growth are £7.75bn to the UK economy, an increase airport outside London, the third largest in revolutionise the way the airport functions working across of 8% on last year. the UK and vital to the future of the and support the region’s economic growth our sites Northern economy. We have recently for decades to come. Content Section at start: Page Title at start: Content Section at start: Page Title at start: Global connectivity 6 MAG 7 Annual Report and Accounts 2018 Overview Strategic report Governance Financial statements Global connectivity 40,000+40,000 people employed onon our site sites £7.XX.X 7 5 bn Contributedcontributed toto thethe UK economy from MAG airports Manchester East Midlands London Stansted