For personal use only ANNUAL REPORT 2010 MAp PERFORMANCE HIGHLIGHTS Traffic (m)1 40 38 36 +3.1% 34 2 32 CAGR 2006 2007 2008 2009 2010 1 Pro forma results are derived by restating current period ownership interests and foreign exchange rates. 2 Compound Annual Growth Rate. Revenue (A$m)1 1,200 1,000 800 600 +5.7% 400 2 200 0 CAGR 2006 2007 2008 2009 2010 1 Pro forma results are derived by restating current period ownership interests and foreign exchange rates. 2 Compound Annual Growth Rate. Operating profit (A$m)1 900 800 700 600 500 +9.9% 2 400 300 CAGR 2006 2007 2008 2009 2010 1 Pro forma results are derived by restating current period ownership interests and foreign exchange rates. 2 Compound Annual Growth Rate. Proportionate EPS (A$c) 25.0 20.0 15.0 10.0 +9.1% 1 5.0 0.0 CAGR 2006 2007 2008 2009 2010 1 Compound Annual Growth Rate. For personal use only MAp has delivered earnings per security growth of 9.1% per annum between 2006 and 2010. CONTENTS MAp Performance Highlights (inside cover) 2 MAp Snapshot 4 Vision, Mission and Values 5 Letter from the Chairman and the CEO 10 2006-2010 Annual Highlights 12 Operational Review and Financial Highlights 20 Sydney Airport 22 Copenhagen Airports 24 Brussels Airport 27 Environmental Sustainability and Governance 31 Corporate Governance Statement 39 Concise Financial Report 82 Security Holder Information 84 Director Profiles 86 Management and Company Secretary Profiles 88 Special Notice and Disclaimer Corporate Directory (back cover) For personal use only 2 MAp Annual Report 2010 MAp SNAPSHOT Copenhagen Brussels 2 April 2002 Over 34,000 A$5.8 billion Date listed No. of security holders Market capitalisation Sydney Copenhagen Brussels 74% interest 30.8% interest 39% interest 73% of MAp’s portfolio 13% of MAp’s portfolio 14% of MAp’s portfolio 35.6m passengers per annum 21.5m passengers per annum 17.2m passengers per annum For personal use only MAp Annual Report 2010 3 MAp is one of the world’s largest private airport owners and operators, with ownership of three major airports – Sydney, Copenhagen and Brussels. We work closely with the airports’ management teams to improve services and facilities for airline partners and the 74 million passengers who use the airports each year, and to increase returns for investors. For personal use only Sydney MAp airports 4 MAp Annual Report 2010 VISION, MISSION AND VALUES Vision Our vision is to be the global investor, owner and partner of choice for airports, providing world-class facilities and services for the benefit of stakeholders. Mission MAp is committed to meeting the responsibilities of a leading airport investor, owner and partner to create long-term value at our airports and by working to: • Deliver market leading performance for our investors through sustainable long-term growth of the airports in which we invest; • Ensure each airport is managed responsibly and delivers the requirements of passengers, airlines and airport businesses; • Ensure the highest standards of safety and security; • Provide a rewarding and safe workplace for MAp employees by encouraging personal development, recognising good performance, valuing teamwork and fostering equality of opportunity; • Promote proactive and transparent engagement with all levels of government and the communities in which our airports operate; and • Be socially and environmentally responsible. Values Our values underpin the way we do business and the way in which we achieve our vision: For personal use only • Integrity; • Sustainability; • Transparency; • Excellence; • Respect; • Innovation; and • Teamwork. MAp Annual Report 2010 5 LETTER FROM THE CHAIRMAN AND THE CEO FINANCIAL HIGHLIGHTS A year of delivery 2010 was a landmark year for MAp. We delivered an • Proportionate earnings of A$445.4 million, up 19.3% on 2009 outstanding financial performance, growing traffic, revenue and proportionate earnings. While there was • Proportionate Earnings Per Security (EPS) clear evidence of recovery in the aviation market, of 23.9 cents, up 10.9% the backdrop remained a challenging one. Our • Revenue, operating profit and earnings growth airports continued to show resilience in the face of outperformed traffic growth of 6.9% struggling European economies; the depreciation of • Combined airport and corporate expenses the Euro; adverse weather conditions including record declined 3% snowfall across Europe; and the eruption of Iceland’s • Full year regular distribution of 21 cents per Eyjafjallajökull volcano, which shut down European stapled security, more than 90% covered by air space for several days and had an unprecedented operating cash flow, and a special distribution of impact on airlines and airports around the world. 12.5 cents per stapled security from the ASUR We continued to make important investments in sale proceeds our airports, to improve services and facilities • Cash balance of A$755 million for airlines and passengers. Revenue, operating • Statutory profit of A$100.8 million profit and earnings all outperformed traffic growth. Growth across the three airports was driven by new airlines and increased flight frequencies, revenue increases across all major business lines and ongoing For personal use only OPERATIONAL HIGHLIGHTS cost management. • Record levels of traffic at Sydney and Copenhagen airports towards the end of 2010 • A$1.9 billion refinancing of all 2011 and 2012 debt maturities completed at Sydney Airport • Successful completion of aeronautical charges agreements at Brussels and Copenhagen airports • Completed Sydney Airport’s international terminal redevelopment and the opening of CPH Go, a low cost facility at Copenhagen Airport • Continued cost management 6 MAp Annual Report 2010 LETTER FROM THE CHAIRMAN AND THE CEO CONTINUED Key success factors Distribution The strong results for the year reflected MAp’s active MAp continued to deliver an attractive yield to its management model driving: investors. A regular distribution of 21 cents per • traffic growth, with all three airports now stapled security was paid. This was fully covered by recovering strongly from the global financial crisis proportionate earnings and more than 90% covered and continuing to attract new airlines and services; by operating cash flow. • foresight to invest in our airports through a In August, MAp sold its 16% direct interest in challenging environment; Mexico’s Grupo Aeroportuario del Sureste (ASUR) for • commercial business expansion; and A$230 million. Proceeds of the sale were returned to • ongoing cost discipline, resulting in investors in October through a special distribution of improved margins. 12.5 cents per stapled security. Strategic focus Airport highlights Throughout 2010 we focussed on our existing airports. MAp’s airports delivered an impressive performance Sydney, Copenhagen and Brussels airports each with earnings growth across the board. Our airports delivered improved services and facilities through continued to demonstrate their resilience with Sydney targeted and efficient investment programmes. We and Copenhagen airports delivering strong traffic continued to build on our sustainable growth platform growth, and Brussels Airport recovering strongly in to ensure our airports maintain strong the final quarter of 2010. long-term earnings growth, with a focus on: Growth • ensuring our airports are well positioned to take advantage of structural changes within the Full year operating profit1 growth of 12% at Sydney aviation industry, including new aircraft technology Airport was the result of 7.8% traffic growth delivering larger and more efficient aircraft, the supported by a successful investment programme. liberalisation of air rights, the growth of low cost Our European airports also performed very well, carriers, alliance expansion and airline integration; despite the challenging environment and impact of the • working with our airline partners to agree ash cloud-related closures. Copenhagen Airport grew long-term commercial arrangements that include operating profit by 12.6% driven by traffic growth of charges, facilities, investment and service levels; 9.1%, while Brussels Airport delivered 1.1% traffic growth and 1.4% operating profit growth. • ensuring ongoing certainty of retail returns through long-term contracts with quality operators; and Airline networks • delivering investment programmes that meet the needs of passengers and airlines. All three airports continued to attract new airlines, routes and services. Sydney Airport boosted its MAp finished the year in a strong financial position, capacity from China and the US. Sydney now has with a robust balance sheet, substantial cash reserves seven airlines serving China and, with the speed of of A$755 million, no corporate debt and no debt uptake of bilateral air rights, further demand is likely maturities at our airports until December 2012. This to drive more capacity. We have also developed the gives us significant flexibility. widest direct route network to North America and will become the first Australian airport to serve Dallas- Fort Worth. Copenhagen expanded its long haul network and now serves a record 22 intercontinental destinations. Brussels Airport has started to develop as an important European Star Alliance hub, which has boosted transfer traffic substantially. Investment We completed a number of major investments in 2010, to improve services and facilities for passengers and airlines. These include Sydney Airport’s international terminal redevelopment and the CPH For personal use only Go low cost facility. Each of these investments will play a major role in driving future growth. 1 The term operating profit is used for consistency throughout this report. It is equivalent to earnings before interest, tax, depreciation and amortisation (EBITDA) and is not statutory or accounting operating profit. MAp Annual Report 2010 7 Aeronautical agreements Outlook Brussels Airport reached a new five-year agreement MAp enters 2011 in an excellent position. Our with its airline partners, setting the annual charges sustainable platform for growth across the business increase at an average of the local inflation rate will be supported by increasing traffic across all +1.43%, providing certainty through to 2016.