TAV Airports Holding
Management Presentation
November 2015
Investment Highlights
Turkey is the fastest growing aviation market in Europe
Passenger growth of 14% p.a. during 2002-2014
Attractive market with strong growth prospects
Projected passenger growth of 9% p.a. between 2014-2023(1)
Aggressive capacity expansion plans of major airlines in Turkey. (2) (fleet to double in 10 years)
Access to fast growing MENA region Diversified, balanced portfolio with leading market positions
#1 airport terminal operator in Turkey
Leading airport operator with diversified portfolio
& integrated structure
14 airports operated in Turkey, Georgia, Tunisia, Macedonia, Saudi Arabia, Croatia and Latvia
(large catchment areas)
65 airports around the world have a TAV Airports subsidiary functioning in them Strong vertically integrated value chain
Strong momentum with EBITDA posting 40% CAGR between 2006 and 2014
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
Strong financial performance and cash flow generation
TAV will receive compensation for all loss of profit in case of new Istanbul airport opening before
2021
Hard currency based cash flow & visible earnings
Well-positioned to benefit from further organic and inorganic growth Istanbul Ataturk Airport expansion project Philippines: with Metro Pacific and ADP Group Inorganic growth of service companies
“Platform play”
(1) Source: Turkey’s Ministry of Transport
2
(2) THY and Pegasus web site
Exceptional Growth Sustained
- EBITDA (€m)
- Revenue (€m)
434
- CAGR (2006-14)
- CAGR (2006-14)
- 12%
- 40%
381
983
904
328
847
Pre-IFRS11 Post-IFRS11
Pre-IFRS11 Post-IFRS11
402 508 627 640 785 881 1099 1205
- 29
- 77 141 167 212 257 339 397
2006 2007 2008 2009 2010 2011 2012 2013 2014
2006 2007 2008 2009 2010 2011 2012 2013 2014
- Passenger (m)
- Net Profit (€m)
- 95
- CAGR (2006-14)
- CAGR (2008-14)
218
- 19%
- 94%
84
72
133
129
53
48
42
41
53
- 51
- 50
30
23
4
2006 2007 2008 2009 2010 2011 2012 2013 2014
-38
-71
2006 2007 2008 2009 2010 2011 2012 2013 2014
3
TAV Corporate and Shareholder Structure
- TAV Airports Holding Co.
- Shareholder Structure
Airport Companies
Service Companies
(2)
8.1%
(3)
8.1%
Ataturk (100%)
ATU (50%)
(4)
2.0%
(1)
38.0%
(5)
3.5%
Esenboga
(100%)
BTA (67%)
Adnan Menderes
(100%)
Havas (100%)
TGS (50%)
(6)
40.3%
Gazipasa Alanya
(100%)
Milas Bodrum
(100%)
Shareholders
Havas Europe (67%)
Medinah (33%)
1. Aéroports De Paris*
Internationally acclaimed airport operating company with global operations
2. Tepe Insaat Sanayi A.S.
Turkish integrated conglomerate focused on infrastructure and
construction
3. Akfen Holding A.S.
Holding company operating in the infrastructure, construction, seaport, REIT and energy sector
4. Sera Yapi Endustrisi A.S.
Tbilisi (80%) & Batumi (76%)
OS (100%) IT (100%)
Monastir & Enfidha (67%)
Skopje & Ohrid
(100%)
Focused on construction in Turkey & MENA region
5. Other Non-floating 6. Other Free Float
Security (100%)
Academy (100%)
Latvia (100%) Zagreb (15%)
4
*Through Tank oWA Alpha GMBH
TAV Airports Business Areas
- Airports
- Duty free
- Food and beverage
- Ground handling
Others
- Turkey
- ATU (50%)
- BTA (67%)
- HAVAS (100%)
- TAV OS (100%)
Istanbul Ataturk Airport
(100%)
Ankara Esenboga Airport
(100%)
Izmir Adnan Menderes Airport (100%)
Gazipasa Alanya Airport
(100%)
Milas Bodrum Airport (100%)
Georgia
Tbilisi (80%) and Batumi Airports (76%)
Tunisia
Monastir and Enfidha Airports (67%)
Largest duty free operator in Turkey
Operating in Turkey, Georgia, Macedonia, Tunisia, Medinah and Oman
Operates Istanbul Airport Hotel (131 rooms)
Total seating capacity of c. 21 thousand at c. 300 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)
Uniq shopping mall foodcourt
Major ground handler in Turkey with a c.65% share
Commercial area allocations and lounges, travel agency services
TAV IT (100%)
Airport IT services
TAV Security (100%)
Security service provider in Istanbul, Ankara, Izmir and Gazipasa
Partner with Unifree–owned by Heinemann, leading German travel retailer (Travel Value)
Operating in Turkey, Georgia, Tunisia, Macedonia and Latvia, Oman and Medinah
Operating in Houston, USA as of September,2015.
Operates in 25 airports in Turkey including Istanbul, Ankara, Izmir and Antalya
TGS (50%) operates in Istanbul (AHL&SGA), Ankara, Izmir, Antalya, Adana, Bodrum and Dalaman
67% owner of Havas Europe, operating in Riga and 6 airports in Germany
TAV Latvia (100%)
Commercial area management in Riga Airport
TAV Academy (100%)
Macedonia
Skopje and Ohrid Airports
(100%)
Saudi-Arabia
Medinah (33%)
Croatia
Zagreb Airport (15%)
5
Growth of the Turkish Aviation Market and TAV Airports
- Turkish Aviation Market (mPax)
- Number of Aircraft in Turkey
- Domestic
- Int'l
- Total
130
441
CAGR (2002-14)
12%
166
385
150
CAGR (2002-14)
370
14%
349
332
118
299
103
86
270
259
250
79
70
240
65
202
57
45
162
34
34
110
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
TAV Airports Passenger Traffic (mPax)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
95
84
Deregulation of the domestic market in 2003
CAGR (2002-14)
72
22%
2nd largest country in Europe in terms of population:
75m (1)
53
48
In 2014, foreign visitors reached 37m (2)
42
41
30
Limited alternative transport infrastructure
23
17
10
- 9
- 9
Aircraft number in Turkey expected to reach
750 in 2023 (3)
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: DHMI, (1)Turkstat, (2) Ministry Culture and Tourism, (3) Ministry of Transport
6
State Airports Authority Turkish Aviation Market Forecast
- Domestic
- International
Mn, pax
350
CAGR
(2009-23)
11%
CAGR (2014-
170
18)
8%
226
204
192
178
20% 2%
166
6% 6%
115
9%
149
96
91
130
83
118
80
104
73
86
66
180
59
52
7%
44
- 110
- 107
101
95
86
76
65
58
51
41
- 2009
- 2010
- 2011
- 2012
- 2013
- 2014
- 2015e
- 2016e
- 2017e
- 2018e
- //
- 2023e
Source: State Airports Authority
7
Traffic Outlook
1.
- 2. 3.
- 5.
4.
Turkish air traffic will double in the next 10 years
Aggressive fleet expansion plans of major airlines in Turkey
11% seat capacity growth in 2015
World Air Traffic will double in the next 15 years
Extension plans at Ataturk Airport
. Terminal capacity will increase by extension of International
. Pax to double in 10
. 11% seat capacity increase expected at Ataturk Airport
int’l scheduled
. Boeing projects 4.9%
CAGR for world air
. THY to expand
fleet size to 428 by 2020. years. traffic (2014-2034)
Terminal.
. Eurocontrol, projects
7% CAGR for Turkey
until 2020 while DHMI
expects 9% CAGR in Turkey until 2023. traffic in 2015 following 13% increase in 2014.
. Airbus projects 4.6%
CAGR for for world air traffic (2014-2034)
. Pegasus to
increase fleet to 100 by 2020.
. Number of aircraft parking positions to increase from 102 to 145 (funded by DHMI).
Source: THY Presentation (3Q 2015) Pegasus Presentation (3Q 2015)
Source: Airbus Global Market Forecast 2015, Boeing Current Market Outlook 2015
Source: ADI
Source: DHMI, Ministry of Transport
Source: Eurocontrol, DHMI
8
Traffic Performance
10M
2015
47.774.322 52.162.125 32.112.128 35.672.335 15.662.194 16.489.790
9.248.659 10.209.125
FY
Passengers (1)
Ataturk Airport
International Domestic
Esenboga Airport
International
Istanbul: 11% international pax growth with 16% increase in int-to-int transfer pax.
2014
Chg %
- 2013
- 2014
Chg %
11%
12%
9%
1%
-8% 2%
9% 51,297,790 56,954,790
11% 34,079,118 38,200,788
5% 17,218,672 18,754,002
10% 10,942,060 11,012,119
Spearheaded by THY’s fleet expansion
1.260.473 7.988.186
1.367.096 8.842.029
8%
11%
1,572,228 9,369,832
1,445,044 9,567,075
Domestic
9.358.577 10.292.790
10% 10,233,140 10,936,772
7%
4% 8%
Izmir Airport
International Domestic
Gazipasa Airport
International Domestic
Milas-Bodrum Domestic Medinah
Istanbul transfer share: 39%, 38% in 9M14
2.391.070 6.967.507
676.345
2.399.733 7.893.057
855.562
0%
13% 26%
29% 23%
15%
1%
-58% 16% 20%
7%
2,479,157 7,753,983
338,522
227,932 110,590
1,738,027 4,669,181 3,437,849 1,642,597 1,067,467 2,300,231
2,577,908 8,358,864
726,252
409,253 316,999
2,017,703 5,703,349 3,332,391 1,788,571 1,278,343 2,430,971
115%
80%
187%
16% 22% -3% 9%
20%
6%
14%
15% 12%
Ankara: Increased international capacity by various carriers and domestic capacity by Anadolu Jet
390.720
504.022
285.625
351.540
1.861.035 5.008.516 3.148.655 1.551.497 1.098.636 2.091.449
2.137.850 5.078.354 1.337.455 1.801.854 1.321.328 2.233.166
Izmir: Domestic driven by THY, Pegasus & Sunexpress
Tunisia (Monastir&Enfidha) Georgia (Tbilisi&Batumi) Macedonia (Skopje&Ohrid) Zagreb Airport
Gazipasa: THY and Anadolu Jet introduced year round domestic flights.
(3)
80.767.908 87.429.609 46.895.510 49.588.283 33.872.398 37.841.326
8% 83,628,606 95,127,477
6% 47,407,199 54,615,845
12% 36,221,407 40,511,632
TAV TOTAL
International Domestic
Milas-Bodrum: THY increased frequency of flights Medinah: Ongoing construction in the Harem area Tunisia: Impact of Bardo and Sousse attacks
- 10M
- FY
Air Traffic Movements (2)
Ataturk Airport
International Domestic
Esenboga Airport
International Domestic
Izmir Airport
International Domestic
Gazipasa Airport
International Domestic
Milas-Bodrum Domestic Medinah
2014
351.148 238.562 112.586
69.101 10.063 59.038 61.500 15.974 45.526
4.837
2015
375.337 261.603 113.734
73.883 10.500 63.383 68.591 17.986 50.605
6.188
Chg %
7%
10%
1%
2013
385,998
259,432 126,566
85,077
13,051 72,026
69,216
16,617 52,599
2,469
2014
422,174
287,519 134,655
82,239
11,697 70,542
74,048
17,770 56,278
5,349
Chg %
9%
11%
6%
-3%
-10%
-2%
7% 4% 7%
12% 13% 11% 28%
33% 22%
13%
0%
-46%
5%
10%
5%
7%
7% 7%
Georgia: New routes by Aeroflot and THY, increased capacity in CIS and Middle Eastern routes
117%
66%
228%
23% 21% -11%
1%
13% -1% 15%
17% 11%
2.665 2.172
3.534 2.654
1,698
771
2,822 2,527
Macedonia: Driven by WizzAir
13.873 41.913 20.811 20.384 11.902 32.502
620.266 366.830 253.436
15.618 42.112 11.321 21.492 13.033 34.056
661.631 389.545 272.086
12,718 40,000 30,077 23,512 12,380 38,894
648,729
374,678 274,051
15,642 48,549 26,763 23,804 13,969 38,348
742,892
438,379 304,513
Tunisia (Monastir&Enfidha) Georgia (Tbilisi&Batumi) Macedonia (Skopje&Ohrid) Zagreb Airport
Zagreb: Driven by Croatian Airlines
Pax+%: +7% like-for-like growth, +1% from Milas Bodrum
domestic terminal
(3)
7% 6% 7%
TAV TOTAL
International Domestic
Source: Turkish State Airports Authority (DHMI), Georgian Authority, TAV Tunisie, TAV Macedonia, TIBAH and MZLZ Note: DHMI figures for 2015 are tentative. (1) Both departing and arriving passengers, including transfer pax, pax numbers NOT stake adjusted (2) Commercial flights only (3) 2014 TAV totals do not include Milas-Bodrum until August.
9
International Scheduled Traffic Developments & Outlook
- Istanbul International Seat Capacity
- Istanbul International Pax
(m, pax)
- 2012 Pax
- 2013 Pax
- 2014 Pax
- 2015 Pax
5
5443322
(m, pax)
65
544332
Ramadan Effect
10M15: +11%
+11%
+13%
Harsh winter
- +11%
- +12%
+14%
2012 Seat Capacity 2014 Seat Capacity
2013 Seat Capacity 2015 Seat Capacity
- Jan Feb Mar Apr May Jun
- Jul
- Aug Sep Oct Nov Dec
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Istanbul Transfer Pax / International Pax
11% Seat Capacity increase in 2013 vs 2012 13% Seat Capacity Increase in 2014 vs 2013 11% Seat Capacity Increase in 2015 vs 2014