Welcome to
Sydney's Airport
Sydney Airport Investor Day
Investor Day / 6 December 2019
Investor Day / 6 December 2019 | Sydney's Airport |
Introduction & strategy
Geoff Culbert - Chief Executive Officer
Dhruv Gupta - Chief Strategy Officer
Investor Day / 6 December 2019 | Sydney's Airport |
Acknowledgement
of Country
Sydney Airport wishes to acknowledge the Aboriginal people of coastal Sydney who are the Traditional Custodians of the land on which today's airport sits.
They identify themselves in a number of ways including Gamayngal, Bideagal, Gweagal, Gadigal and Gadhugal.
We pay our respects to them, their cultures and to their Elders past, present and emerging and to other Aboriginal and Torres Strait Islander people who have made this area their home.
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Investor Day / 6 December 2019 | Sydney's Airport |
Safety Share
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Investor Day / 6 December 2019 | Sydney's Airport |
Meet the Team
Greg Botham | Hugh Wehby | Vanessa Orth | Dhruv Gupta | Chris Evans |
Chief Financial | Chief Operating | Chief Commercial | Chief Strategy | Chief Assets & |
Officer | Officer | Officer | Officer | Infrastructure Officer |
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Investor Day / 6 December 2019 | Sydney's Airport |
What to expect from today
Introduction and | Foundations for | Commercial | Capital funding |
strategy | growth and aviation | opportunities | and delivery |
Geoff Culbert | opportunities | Vanessa Orth | Greg Botham |
& Dhruv Gupta | Hugh Wehby | & Colin Reay | & Chris Evans |
& Rob Wood |
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Investor Day / 6 December 2019 | Sydney's Airport |
Strategic framework
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Geoff Culbert - Chief Executive Officer
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Investor Day / 6 December 2019 | Sydney's Airport |
Fundamental strategy remains unchanged
Optimise the core
Rethink the core
Expand the core
Operational efficiency | Increase revenue per pax | Grow number of high | Leverage our capabilities | ||||||||
and effectiveness | value pax and movements | beyond the core | |||||||||
Focused capital strategy
Aligned culture
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Investor Day / 6 December 2019 | Sydney's Airport |
Applying the strategy in a different environment
Global | Evolving |
uncertainty | stakeholder environment |
RESPONSE | RESPONSE | ||||||||
Simplify the business | Focus on the customer | ||||||||
Strengthen operational discipline | Deliver for the community | ||||||||
Continue to build revenue diversity | Lead in sustainability |
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Investor Day / 6 December 2019 | Sydney's Airport |
Sydney Airport over the next 20 years
Material passenger growth
Two airport city
Sustainability
- 66 million passengers, with international/ domestic mix ~50/50
- Build capacity for short, medium and long-term
- Southern bag room, international gate expansion and Sydney Gateway
- Deliver world class product
- Continue to improve the customer experience
- Become a global leader in sustainability
- Carbon neutral by 2025
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Investor Day / 6 December 2019 | Sydney's Airport |
Strategy and growth
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Dhruv Gupta - Chief Strategy Officer
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Investor Day / 6 December 2019 | Sydney's Airport |
Sydney Airport faces an evolving operating environment
- Physical infrastructure | - Airports: local, international, |
- Slots and operating restrictions | Western Sydney Airport |
- Commercial: hotels, parking, retail |
Capacity Competition
Partners | Customers | ||
- Airline agreements expiring | (airlines, tenants) | (travellers) | - Mobile-empowered |
- Efficiency focus | - Changing expectations and | |
behaviours | ||
Sustainability | ||
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Investor Day / 6 December 2019 | Sydney's Airport |
Sydney Airport is evolving to meet these changes
Taking an ecosystem perspective | Identifying areas where Sydney Airport could play a greater role |
Moving from "landlord" to partner | |
Growing the overall value pool through collaboration | |
Understanding, meeting and then | |
Initiatives to improve customer experience and deliver business benefits | |
exceeding consumer expectations | |
Using data and technology | |
Data insights and machine-learning to improve performance | |
to improve performance | |
Building capability and investing | |
Reinvigorating approach to culture and building capability | |
in people |
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Investor Day / 6 December 2019 | Sydney's Airport |
Focused on creating value across our strategic pillars
Optimise the core Rethink the core
Expand the core
Operational efficiency
and effectiveness
Continued cost discipline
Use of technology to
better manage operations
and capacity
Increase revenue per pax
Better understanding of the consumer journey, behaviour and needs
Grow number of high | Leverage our capabilities | ||||
value pax and movements | beyond the core | ||||
Grow the right capacity | Explore adjacencies that support the | ||||
broader growth of Sydney Airport, or | |||||
Pursue strategies to improve | |||||
service customer needs | |||||
utilisation | |||||
Commercial Masterplan | |||||
Focused capital strategy
Aligned culture safety, security, community and sustainability
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Investor Day / 6 December 2019 | Sydney's Airport |
Expand the core
Identify areas that are complementary to the overall growth of our core and present an opportunity to deliver value growth
Supporting and | Servicing | ||||
enhancing our partners | customer needs | ||||
Fuel strategy that delivers investment for | Improving access (including through | ||||
growth and competitive fuel supply | the application of Sydney Gateway proceeds) | ||||
Supporting freight and logistics | Additional services sought by travellers | ||||
(~80% of freight is in the belly | |||||
of passenger aircraft) |
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Investor Day / 6 December 2019 | Sydney's Airport |
Building digital, data and analytics capability to deliver value
1 Digital and data foundations | 2 Data analytics | 3 Future products and analytics | ||
Data warehouse
improve information accessibility
and deliver efficiencies
Improved wi-fi access
improve customer experience, and lay foundations to understand behaviours
Machine-learning | Digital twin | ||
passenger forecasts | |||
more efficiently manage and | |||
support efficient resourcing decisions | |||
maintain infrastructure |
Heatmaps of | Future, seamless | ||||
passenger movement | customer journey | ||||
support planning decisions | create a better experience to enhance | ||||
and assist retail tenants | future value opportunities |
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Investor Day / 6 December 2019 | Sydney's Airport |
Greater focus on customer will deliver business benefits
Approach to customer strategy
Voice of
customer
Digital and | Customer | Tactical |
vision, | ||
technology | improvements | |
journey and | ||
enhancements | ||
strategy |
Infrastructure
investments
Business benefits
Meeting community | 'License to operate' | ||
expectations | |||
Competitive | Future-proofing the business | ||
positioning | |||
Commercial | Inform commercial decisions to | ||
opportunities | increase spend | ||
Delivering value | Sharing of customer insights with airline | ||
to partners | and tenant partners to "grow the pie" | ||
Operational benefits | Improve passenger flows and | ||
reduce impact of disruptions |
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Investor Day / 6 December 2019 | Sydney's Airport |
Future customer journey
Tailored | Relevant | Supportive | Seamless | |||
PLANNING | TRAVEL & ARRIVAL | LANDSIDE DWELL | SECURITY & IMMIGRATION |
Collaboration with airlines and other stakeholders to deliver a better experience
Partnering with airlines and other stakeholders to deliver a better experience
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Investor Day / 6 December 2019 | Sydney's Airport |
Questions?
Geoff Culbert & Dhruv Gupta
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Investor Day / 6 December 2019 | Sydney's Airport |
Foundations for growth and aviation opportunities
Hugh Wehby - Chief Operating Officer
Rob Wood - General Manager Aviation
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Investor Day / 6 December 2019 | Sydney's Airport |
Safety and security
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Hugh Wehby - Chief Operating Officer
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Investor Day / 6 December 2019 | Sydney's Airport |
Safety strategy 2019-2021
Build safety | Enhance | Streamline | |
culture and | safety risk | safety | |
community | management | system | |
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Investor Day / 6 December 2019 | Sydney's Airport |
Safety culture and community
Central to our safety strategy 2019-2021 is building safety culture and creating safety communities
Build SYD
safety
culture
community
Airport Operating Licence (AOL) will drive safety, environment, operational, security and sustainability performance improvements
Target common risks: mental health, foreign object debris, working at height, plant and pedestrian, fatigue
Safety Forums by agencies / airlines / tenants / contractors
Critical Risk Standards implementation targeting contractors
18 month calendar of events: forums, safety week, topics for engagement
Develop relationships and safety professional network, leverage stakeholders
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Investor Day / 6 December 2019 | Sydney's Airport |
SYD Safety rules and safety community
Hazard control | Energy isolation | Hot work | Fit for work | Manual handling | Driving |
Prioritise safety | Verify isolation | Control | Be in a state to | Look after your | Follow safe |
at all times | before work | flammables and | perform work | body and perform | driving rules |
begins | ignition sources | safety | tasks safely | ||
Safe mechanical lifting | Working at height | Line of fire | Safety controls | Safety behaviours | Confined space |
Plan lifting | Protect yourself | Keep yourself | Obtain authorisation | Lead by | Obtain authorisation |
operations and | against a fall when | and others out of | before overriding | example | before entering a |
control the area | working at height | the line of fire | or disabling safety | confined space | |
controls |
Foreign object
debris (FOD)
FOD is everyones
responsibility
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Investor Day / 6 December 2019 | Sydney's Airport |
Regulatory environment
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Investor Day / 6 December 2019 | Sydney's Airport |
Economic regulation
The Productivity Commission delivered the final report on economic regulation of airports
Sydney Airport has not unfairly or systematically exercised its market power in respect of commercial negotiations, aeronautical services or car parking
There is presently no justification for significant change to the current form of regulation of aeronautical services at Sydney Airport
The report acknowledged that there is scope to improve competition and pricing by allowing third parties to access on-airport infrastructure for the supply of fuel
The report recommended that the Australian Government review the Sydney
Airport Slot Management Scheme
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Investor Day / 6 December 2019 | Sydney's Airport |
Operational regulations
Sydney Airport is subject to four main operational constraints
Curfew | Regional | Movement | Noise | |||
ring fence | cap | sharing | ||||
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Investor Day / 6 December 2019 | Sydney's Airport |
Slot strategy
Efficient use of slots is critically important
- Review of the Sydney Airport demand management scheme
- Working with stakeholders
- World Airports Slot Board (WASB)
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Investor Day / 6 December 2019 | Sydney's Airport |
Capacity
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Investor Day / 6 December 2019 | Sydney's Airport |
Creating capacity on airport
Sydney Airport has numerous near-term projects to address international capacity pinch points
Project | Primary Elements | |
T1 Pier A | Provision of new contact gates | |
Jet fuel | ||
T1 Southern expansion | ||
A new outbound baggage facility | ||
Northern Ponds aprons | Conversion of layover bays to active (fuelled) bays | |
South West Sector | Conversion of layover bays to active (fuelled) bays | |
Potential for a new satellite pier with | ||
additional contact gates | ||
South East Sector aprons | Construction of new layover bays | |
Jet fuel | Jet fuel storage infrastructure and the | |
hydrant reticulation system | ||
South West | ||
Sector |
T1 Pier A
T1 Southern
expansion
Northern
Ponds aprons
South East
Sector aprons
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Investor Day / 6 December 2019 | Sydney's Airport |
Pier A
Aug | Pier A and commercial | Feb | Procurement phase | Sep | ||
2019 | tower design phase | 2020 | 2020 | |||
Q1 2021 +
~30 months construction
Design subject to change
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Investor Day / 6 December 2019 | Sydney's Airport |
Jet fuel - facilitating competition
Sydney Airport is seeking innovative models to improve competition and support the effective investment and operation of jet fuel storage infrastructure and the hydrant reticulation system
REQUEST FOR SOLUTION (RFS)
- The RFS process commenced and will allow participants to propose solutions consistent with the SYD principles
- An RFS allows for an innovative and market-led approach that is guided by appropriate boundaries
TIMING
- Sydney Airport released the RFS in late October 2019
- Responses are due mid December 2019
- A decision on a preferred model is likely in early 2020
SUSTAINABILITY
- Biofuels
- Efficiency
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Investor Day / 6 December 2019
Jet Base and Colocation
It is the optimal time to enhance our product offering and infrastructure due to these factors:
- The Qantas Jet Base lease expires on 30 June 2020
- Sydney Airport now has operational control of all terminals
- Colocation of domestic and international service is being reviewed
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Sydney's Airport
Investor Day / 6 December 2019 | Sydney's Airport |
Focus on sustainability
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Investor Day / 6 December 2019 | Sydney's Airport |
Sustainability Strategy 2019-2021
Sydney Airport is a global leader in Environmental, Social and Corporate Governance (ESG) performance with sustainability integrated in to all aspects of our business
Flagships
Climate resilience | Fleet electrification | Airspace and airfield efficiency | |
Understand impacts on our assets | Reduce emissions and improve health | Support future growth through | |
and operations and build resilience | and safety by supporting airside and | utilisation and optimisation | |
landside vehicle electrification | of assets | ||
Pillars
Responsible business | Being ethically responsible and transparent in how we do business | |
Planning for the future | Delivering operational excellence through innovative solutions and supporting customer needs now and into the future | |
Supporting our communities | Working with our communities to protect the environment and create shared value |
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Investor Day / 6 December 2019 | Sydney's Airport |
Working with our partners
We are taking action and seeing results
Airport Collaborative | Tackling Scope 3 | Airport Operators | ||
Decision Making (ACDM) | emissions | Licence | ||
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Investor Day / 6 December 2019 | Sydney's Airport |
Aeronautical growth opportunities
5
Rob Wood - General Manager Aviation
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Investor Day / 6 December 2019 | Sydney's Airport |
Sydney Airport recently launched new services and increased seat capacity to a number of global destinations, ensuring continued growth
China Eastern Partly upgauged Shanghai service to B787
Qantas (new) New seasonal 3pw Sapporo service
Cathay Pacific | |
Upgauged 1 daily | |
Hong Kong service | |
to A350 | |
Qantas | |
Increased Jakarta | |
frequencies to ~6pw | |
Qantas | |
Upgauged | |
Denpasar service | |
36 | to A330 |
Qantas Increased Osaka frequencies to ~3pw
Qantas Increased Manila frequencies to daily
Malindo (new) | Fiji Airways |
Partly upgauged | |
Launched daily | |
Nadi service to | |
Denpasar service | |
A350 | |
Qantas
Launched 4pw
Nadi service
Qantas
Increased Noumea frequencies to 4pw
LATAM (new) Launched Santiago direct 3pw services
Qantas
To increase frequencies to daily
Investor Day / 6 December 2019 | Sydney's Airport |
Supporting growth
Sydney Airport has restructured the Airline Partnerships team in order to support our existing and new airline partners
The objective is to deliver innovative marketing that creates demonstrable value for partners by:
TRACK To gain
- Ensuring potential revenue is optimised for both new and existing routes through passenger growth
- Providing a competitive advantage that drives the acquisition of new routes for Sydney Airport
- Deepening beneficial relationships with key partners including airlines, tourism boards, travel media and travel distributors
- Producing marketing innovation for SYD that counters threats and weaknesses
- Delivering value to internal teams including on cooperative projects that drive revenue
DELIVER
Structured measurable campaigns
insights that
drive future work
DISCOVER
What is the opportunity?
PITCH
Ensure we hit the right note
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Investor Day / 6 December 2019 | Sydney's Airport |
Targeting new markets
There are key opportunities to target under-served markets and new, medium sized origin and destination markets from mid 2020
Mumbai | 87,186 |
Colombo
78,937
*
Dhaka
55,530
Bengaluru 52,761
Las
Vegas
47,544
Hyderabad 44,055
38,651 Paulo Sao
Seattle | 37,801 | 36,920 |
Chennai | ||
Busan
25,464 Ahmedabad
32,105 | 31,355 |
Shenyang | |
Penh | |
Phnom | |
28,585 | 24,985 | |||||
Aviv | 23,175 | |||||
Tel | Istanbul | 22,946 | ||||
Tianjin | ||||||
22,676 | ||||||
Calgary | 20,871 | |||||
Aires | ||||||
Buenos | 20,749 | |||||
Town | ||||||
Cape | ||||||
Kathmandu 121,260
Lahore | 19,728 |
Koh Samui 19,661
Source: Sabre ADI MIDT - O&D Passengers YE June 2019; *based on Sydney Airport analysis of DIBP OAD Data YE June 2019 between Sydney - Sri Lanka
Sydney Airport's largest unserved markets
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Investor Day / 6 December 2019 | Sydney's Airport |
Ultra long haul aircraft
When equipped with ULR seat configurations, the range capability of Boeing's 787-9 and B777-X are creating new market opportunities within reach of Sydney
London
Paris
Rome Istanbul
Marrakesh Cairo
Lagos Addis
Ababa
Toronto | |
Chicago | New |
York |
Destinations currently served
Future possibilities based on low seat density Boeing
787-9 and 777-X capability
Cape Town
Rio Sao Paulo
Buenos Aires
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Investor Day / 6 December 2019 | Sydney's Airport |
Emergingnarrow body markets
SydneyAirport also sees great opportunities for newnarrow body markets to be serviced with ultra long haul aircraftand narrow body aircraft
A321 neo range from SYD - 3,400 nm
A320 neo range from SYD - 3,400 nm
B737 MAX 8 range from SYD - 3,000 nm
SYD
Source: Boeing and Airbus
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Investor Day / 6 December 2019 | Sydney's Airport |
China continues to be Sydney's largest international source market
Chinese residents lead Sydney's international inbound markets totalling 1.23m passengers in the 12 months to June 2019
13 14 15
12
11
10
9
8
16
7
Australian | Foreign | 6 |
53% | 47% |
5
1
4
3
2
Source: based on Sydney Airport analysis of DIBP OAD Data YE June 2019 (sector passengers - millions)
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-
China 7%
2 USA 6%
31 New Zealand 5%
4 UK 3%
5 Japan 3%
6 South Korea 2%
7 India 2%
8 Hong Kong 2%
9 Singapore 1%
10 Canada 1%
11 Taiwan 1%
12 Indonesia 1%
13 Malaysia 1%
14 Germany 1%
15 France 1%
16 Other 9%
Investor Day / 6 December 2019 | Sydney's Airport |
Australian outbound travel to China
Destination China growth has been strong since 2015, with +5% growth in Australian residents visiting China in the 12 months to June 2019 to total 604,000 per annum
Foreign Australian
47% 53%
13 | 14 15 | 1 | USA 7% | |||
12 | ||||||
2 | New Zealand 6% | |||||
11 | ||||||
10 | 3 | China 4% | ||||
9 | ||||||
4 | Indonesia 3% | |||||
8 | 5 | UK 3% | ||||
Thailand 2% | ||||||
6 | ||||||
7 | 7 | Fiji 2% | ||||
8 | Japan 2% | |||||
6 | 16 | India 2% | ||||
9 | ||||||
5 | 10 | Hong Kong 2% | ||||
11 | Singapore 1% | |||||
12 | Vietnam 1% | |||||
4 | Philippines 1% | |||||
13 | ||||||
1 | 14 | Italy 1% | ||||
3 | ||||||
2 | 15 | Canada 1% | ||||
16 | Other 14% |
Source: based on Sydney Airport analysis of DIBP OAD Data YE June 2019 (sector passengers - millions)
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Investor Day / 6 December 2019 | Sydney's Airport |
Airline agreements
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Investor Day / 6 December 2019 | Sydney's Airport |
Airline agreements
Negotiations have commenced on the majority of aeronautical agreements across airport
T3 runway | ||||||||
agreement | ||||||||
- Restructured charges | ||||||||
promoting efficiency | ||||||||
Today | Dec | Jun | - Service levels | |||||
2019 | 2020 | - Longer term deals | ||||||
promoting capital | ||||||||
investment | ||||||||
International | ||||||||
T2 terminal | ||||||||
terminal and | ||||||||
and runway | ||||||||
runway | ||||||||
agreements | ||||||||
agreements | ||||||||
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Investor Day / 6 December 2019 | Sydney's Airport |
Aeronautical agreements
Sydney Airport's commercial negotiations are seeking to deliver the following:
Build the right infrastructure
Break the five-year negotiation cycle for increased investment certainty
Promote efficient use of slots
- Shift to a different pricing approach
Capacity and product
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Investor Day / 6 December 2019 | Sydney's Airport |
Ready for the challenge
Target sustainable, consistent and optimised growth
Enter flexible agreements that allow step changes in infrastructure and service
Address the three key risks and opportunities: infrastructure, capacity and competition
FUTURE SYD
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Investor Day / 6 December 2019 | Sydney's Airport |
Commercial opportunities
Vanessa Orth - Chief Commercial Officer
Colin Reay - General Manager Commercial Development
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Investor Day / 6 December 2019 | Sydney's Airport |
Commercial operations - a diversified real estate portfolio
Retail | Office | Logistics |
150+ tenants | 50+ tenants | 90+ tenants |
31,300 square metres | 38,900 square metres | 879,000 square metres |
99% occupancy | 98% occupancy | 98% occupancy |
Hotel
2 Hotels Mantra & Ibis
414 rooms
278 budget rooms and 136 mid scale rooms
85% occupancy
Parking
7,700 international car spaces
7,600 domestic car spaces
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Investor Day / 6 December 2019 | Sydney's Airport |
Delivering real estate solutions for both our partners and customers
In 2020 we remain focused on maximising the value of our real estate whilst enhancing our digital platforms to better understand our customer and create an integrated community asset
Developing a Commercial | Maximising the value of our | Enhancing our digital platforms |
masterplan | real estate | and selling channels |
Mixed-use opportunities | Terminal enhancements | Revenue management system improvements |
Road to runway capacity | Road access and parking improvements | Yield management system improvements |
Connected airport | Domestic hotel development | Digital marketing capability |
Precinct focus - support aviation | Freight and logistics expansion | Customer database improvements |
operations | ||
Explore off-airport opportunities | ||
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Investor Day / 6 December 2019 | Sydney's Airport |
Commercial Masterplan
2
Colin Reay - General Manager Commercial Development
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Investor Day / 6 December 2019 | Sydney's Airport |
The Commercial Masterplan will unlock value in a timely and disciplined manner
Discovery | Brief Development | Delivery |
2019 | 2020 | 2021 |
Current position | Value | Business | Preferred | Delivery of |
+ | case | selected development | ||
proposition | solution | |||
Future potential | options | strategy opportunities | ||
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Investor Day / 6 December 2019 | Sydney's Airport |
Creating real estate solutions to meet the needs of our communities
Strategic objectives of the Commercial Masterplan
- Establish market valuation for all real estate
- Complete a market needs analysis for community
- Define and deliver individual terminal value propositions
- Develop and deliver a Sydney Airport hotel strategy
- Develop and deliver a Sydney Airport freight and e-commerce strategy
- Create an adjacent land strategy
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Investor Day / 6 December 2019 | Sydney's Airport |
2020 Development Pipeline
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Investor Day / 6 December 2019 | Sydney's Airport |
We are building a dedicated hotel precinct to leverage operational synergies
Hotel market
- Increased supply entering the airport hotel market in the short-term
- Demand is forecast to remain strong increasing at 5% per annum over the next 5 years
- The airport market is forecast to absorb an additional 2,000 rooms over the next 10 years whilst still retaining high occupancy (>80%)
Domestic on-airport hotel precinct
- An alternative opportunity for a new hotel adjacent to Mantra has been identified with the objective of forming an on-airport hotel precinct
The hotel development will
- deliver a new hotel adjacent to the Mantra and Ibis Budget creating an integrated precinct offer
- target a minimum increase in rooms of 250+
- target upper to upper midscale room positioning to complement the existing assets
Mantra | Ibis |
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Investor Day / 6 December 2019 | Sydney's Airport |
On-Airport demand for freight and logistics remains strong
Freight market
- Sydney Airport is Australia's most significant air freight hub that facilitates movement of 45% of Australia's imports and exports by volume and value (estimated at $53 billion in value in 2018- 2019)
- Approximately 80% of freight is carried within the belly of commercial aircraft
- Freight contributes to commercial airline profitability, circa 8-10% of revenues
- Freight volumes are estimated to increase by 58% by 2039 from 2017 levels (including freight operations from Western Sydney Airport from 2026)
Freight strategy
- Creation of a freight precinct
- Support growth of e-commerce though enhanced facilities
- Enhance import, export and distribution capabilities
- Formation of strategic partnerships
Source: 2019 International Airfreight Indicator
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Investor Day / 6 December 2019 | Sydney's Airport |
Maximising our real estate
3
Vanessa Orth - Chief Commercial Officer
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Investor Day / 6 December 2019 | Sydney's Airport |
Within Terminal 1 we continue to meet the demands from luxury retailers
Terminal 1
1 | 2 | 3 | 4 |
Relocation of the | Pier A commercial and | Enhanced Sydney Culinary | Development of the |
Tourist Refund Scheme (TRS) | customer strategy to | market leasing engagement | Duty-Free strategy |
to leverage high demand from | align with the broader | strategy for approval | for approval and |
global luxury fashion brands and | offering will be ready | and execution at lease | execution at lease |
extend the T1 Luxury precinct | for execution in 2022 | expiry in 2022 | expiry in 2022 |
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Investor Day / 6 December 2019 | Sydney's Airport |
Securing Moncler and Saint Laurent
Proposed
Before
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Investor Day / 6 December 2019 | Sydney's Airport |
Whilst our Duty-Free offer continues to perform strongly
Global comparison of Duty Free Sales per departing international PAX June MAT
AUD($) | |||||
Americas | Asia-Pacific | Europe | Global AVG | SYD 2018 | SYD 2019 |
Working with Heinemann on future opportunities
Concept photograph
Source: The Airport Commercial Resources Study - 2018/2019
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Investor Day / 6 December 2019 | Sydney's Airport |
The retail improvements are continuing across Terminal 2
Terminal 2
1 | 2 | 3 | 4 |
Realignment of the | Terminal | Delivering four | Improving the |
Pier A specialty | enhancement works | new tenancies | ambience through |
retail layout | events and activations |
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Investor Day / 6 December 2019 | Sydney's Airport |
Investor Day / 6 December 2019 | Sydney's Airport |
xxx
xxxx
- xxx
Investor Day / 6 December 2019 | Sydney's Airport |
Remixing Pier A to create an 'Aspirational Lifestyle' precinct
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Investor Day / 6 December 2019 | Sydney's Airport |
Re-positioning Terminal 3 to meet the needs of our domestic traveller
Terminal 3
1 | 2 | 3 | 4 |
Create a premium | Substantially elevate the | Secure retailers that | Recognise revenue upside |
aspirational specialty retail | food & beverage offer | are either iconic, first | through optimisation of |
precinct that is tailored | creating a benchmark | to Australia or first to | existing leases and new |
to the unique customer | retail proposition, | a Domestic Airport | tenant deals |
demographic | differentiated from T2 |
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Investor Day / 6 December 2019 | Sydney's Airport |
Across the terminal creating distinct travel retail precincts
Technology and beauty
Precinct D Sydney's finest, best of local dining
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Key
Precinct A
Precinct B
Precinct C
Food and Beverage
News, Books
and Services
Investor Day / 6 December 2019 | Sydney's Airport |
Maintaining our parking revenue remains a priority
- SYD car parking income per PAX is in line with the global average
- SYD achieves 25% higher revenue per departing PAX than Asia-Pacific
- As more customers convert online our opportunity to increase pre-book revenue creates an engaged parking customer
Car parking income per departing PAX >30m pax | High customer knowledge = higher pre-book |
2019 Parking revenue
AUD($) | Driveup | Prebook | |||
55% | 45% | ||||
Americas | Asia-Pacific | Europe | Global AVG | SYD 2019 | |
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Investor Day / 6 December 2019 | Sydney's Airport |
To maximise car park revenue firstly we need to understand our customer
We have undertaken value based customer segmentation and are building an engagement plan around these segments focused on product mix, pricing and selling strategies to drive conversion
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i | |||||||
o | n | s | More people | ||||
c | |||||||
considering SYD parking options
More people aware of SYD parking options
More | Spending |
people | |
more | |
parking | |
money | |
at SYD | |
on more | |
products |
R | |
e | |
s | |
e | |
l | |
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More | a |
d | |
n | |
parkers | r |
returning | e |
e | |
t | |
SYD | t |
n | |
i | |
o | |
n |
Parking more often at SYD
Customer | Aims | Segmentation |
Journey |
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Investor Day / 6 December 2019 | Sydney's Airport |
Exploring new revenue opportunities
4
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Investor Day / 6 December 2019 | Sydney's Airport |
New products launched to meet the changing traveller needs
Lounges - departures and arrivals | VIP services - departures and arrivals | |
Amex lounge tripled in | First paid lounge | SYD EOI in-market | |
The House, by No. 1 | Aerotel | ||
size to meet demand | for VIP services | ||
Lounges | |||
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Investor Day / 6 December 2019 | Sydney's Airport |
Questions?
Hugh Wehby & Vanessa Orth
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Investor Day / 6 December 2019 | Sydney's Airport |
Capital funding and delivery
Chris Evans - Chief Assets & Infrastructure Officer
Greg Botham - Chief Financial Officer
71
Investor Day / 6 December 2019 | Sydney's Airport |
Capital project delivery
1
Chris Evans - Chief Assets & Infrastructure Officer
72
Investor Day / 6 December 2019 | Sydney's Airport |
Historic delivery
A range of successful projects have been delivered over recent years
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Investor Day / 6 December 2019 | Sydney's Airport |
Southern bag room project (SBR)
A new baggage room to meet future requirements
SBR on
ground level and level 1 in
this section SBR on ground level
up to level 3 in
this section
Reconfigured Arrivals road and relocated loading dock
What
- First phase in a broader baggage handling system upgrade across the 2020s
Why
- Improve safety outcomes
- Increase system resilience
- Leverage new technology & automation
- New checked baggage screening requirements
- Accommodate future growth
How
- Significant airline engagement conducted
- Operational by 2022
- Whole of life approach including maintenance and operational support
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Investor Day / 6 December 2019 | Sydney's Airport |
Northern Ponds and South East Sector project
Creating more bays for international departure and arrivals, meeting peak demand
Northern Ponds: | |
Expansion and | |
conversion of | |
three layover bays | |
to Code E active | Terminal 3 |
bays | |
Terminal 2 |
Terminal 1
SE Sector:
Construction of four
additional layover bays bringing the total to 6
Additional
layover bays
required to
replace bays converted to active
What
- Fuelling of 3 existing bays at the Northern Ponds
- Construction of 4 additional 'layover' bays in the South East Sector
Why
- Meets growing demand for peak international aircraft movements
- Provides short-term capacity to facilitate future development of aprons at terminals
How
- Northern Ponds currently at tender and early procurement stage
- Sector delivery: Fulton Hogan
- Targeted completion: Northern Ponds 1H 2021; South East Sector 1H 2022
- Significant airline engagement conducted
75
Investor Day / 6 December 2019 | Sydney's Airport |
Sydney
Gateway
1
Widening of Qantas Drive
2
Connection to the international terminal
3
New Link Road
4
New elevated road or 'flyover'
5
Connection to St Peters Interchange and beyond
6
Alternative shared cycle and pedestrian pathway
76
Sydney Gateway will provide toll-free connections to
Sydney Airport Domestic and International terminals.
5
2
- 6
1
4
Investor Day / 6 December 2019 | Sydney's Airport |
Sydney Gateway
Sydney Gateway provides a new, toll free alternative route to Sydney Airport from the Sydney motorway network at St Peters Interchange
Benefits | Delivery |
- Supports growth of SYD pax numbers | - SYD is working in partnership with Roads |
- Improving journey times and reliability | and Maritime Services and TfNSW (the |
- Separates airport and through traffic | NSW Government) to deliver Sydney |
- Faster journey between terminals | Gateway while maintaining essential airport |
- Reduces trucks and congestion in local | operations |
precinct | - The NSW Government will construct Sydney |
- Unlocks up to 18 hectares of airside land | Gateway with the support of SYD |
- SYD and the NSW Government will consult | |
extensively with key stakeholders | |
- Construction works expected to start in | |
late 2020 | |
Funding
- Sydney Gateway is estimated to cost $2.2-2.6bn predominantly funded by the NSW Government
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Investor Day / 6 December 2019 | Sydney's Airport |
Success factors
SYD has the critical success factors in place to deliver projects effectively
Safety and | Informed leadership | Capable and | ||
sustainability focus | committed teams | |||
Comprehensive planning | Collaborative and aligned | Customer centric focus | ||
for operational overlay | win-win culture | |||
Communication | Well defined criteria | Robust and effective | ||
and objectives | controls and governance | |||
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Investor Day / 6 December 2019 | Sydney's Airport |
Enhanced governance approach to planning and delivery
SYD has in place a comprehensive framework covering all stages of project delivery
Planning and Strategic Project Delivery | Planning and Design | Design and Delivery | Delivery |
0 | 1 | 2 | 3 | 4 |
Inclusion in | Endorsement | Approval of | Approval to proceed | Approval to |
corporate plan | of preliminary | final business | to delivery and | occupy/trade/ |
business case | case | implementation | go live |
Visionary | |||||
Wishlist | $ | $ | $ | $ | |
Demand | Release of capex | Release of capex | Release of capex | Approval to | Approval to |
seed funding | funding (design | funding (design and/ | engage a delivery | release final | |
development) | or delivery) | partner | payments |
79
Delivery and Facilities
Management
5
Approval to close project
Investor Day / 6 December 2019 | Sydney's Airport |
Capital funding and allocation
2
Greg Botham - Chief Financial Officer
80
Investor Day / 6 December 2019 | Sydney's Airport |
Ongoing capital allocation discipline
Well established and consistent framework ensures Sydney Airport delivers the right projects the right way
Identify
AERONAUTICAL OPPORTUNITIES
+
COMMERCIAL
OPPORTUNITIES
Evaluate
Business Case
Aeronautical Hurdle Rate
Commercial Hurdle Rate
Value creation
Net Operating Receipts
Credit Metric Impact
Strategic Risks and Benefits
Internal and External Benchmarking
Alternative investment considerations
Fund
Source
DEBT
and / or
EQUITY
and / or
CASH
Deliver
Additional Capacity
+
Sustainable Outcomes
+
Improved Operational Performance
+
New Products
+
Improved Customer Experience
+
Operational Risk Reduction
Review
During & Post- Implementation
Benefits
Realisation /
Post Review
Tracking &
Review
Lessons Learnt
81
Investor Day / 6 December 2019 | Sydney's Airport |
Capital evaluation
Disciplined evaluation of projects via well established Investment Evaluation Framework
- Capital plan core to annual business planning
- Capital plan set as part of annual business plan
- Projects included in plan based on both an individual and portfolio wide assessment on key financial metrics
- Plan regularly refreshed as projects progress
- Return on investment is key
- All investment evaluated against target hurdle rates
- Aeronautical investment recovered through airline charges
- Commercial growth projects only pursued if minimum target return hurdles are met
- Projects and framework regularly reviewed
- Constant review of projects during and post delivery to ensure forecast returns are achieved
- Investment framework reviewed at least annually to ensure it remains fit-for-purpose
- Consideration of other factors
- In-depthinvestigation of project specific risk and returns
- Analysis of strategic factors and other long term objectives
- Alignment with safety, sustainability and environmental plans
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Investor Day / 6 December 2019 | Sydney's Airport |
Proactive and consistent funding approach
Proactive capital management with funding available across multiple debt capital markets1
1,750 | A$m | |||||||||||||||||||||||
1,500 | ||||||||||||||||||||||||
1,320 | 1,332 | 1,333 | ||||||||||||||||||||||
1,234 | No more than 15% of debt | |||||||||||||||||||||||
1,250 | 1,163 | |||||||||||||||||||||||
maturing in any given year | ||||||||||||||||||||||||
1,000 | ||||||||||||||||||||||||
848 | 750 | 802 | 438 | |||||||||||||||||||||
750 | 719 | 1,033 | 643 | 659 | ||||||||||||||||||||
500 | 763 | 519 | 304 | 401 | ||||||||||||||||||||
796 | ||||||||||||||||||||||||
250 | 7 | 530 | 300 | 136 | 62 | 135 | 100 | 100 | ||||||||||||||||
266 | ||||||||||||||||||||||||
200 | ||||||||||||||||||||||||
0 | 78 | |||||||||||||||||||||||
19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 | 28 | 29 | 30 | 34 | 39 | 44 | 49 | |||||||||
Drawn Bank | Undrawn Bank | Domestic Bonds | US144A Bonds | Euro Bonds | USPP Bonds | |||||||||||||||||||
Ample liquidity to cover | Presence across multiple | Ultra-long tenors | ||||||||||||||||||||||
future debt maturities | core and opportunistic | available at currently | ||||||||||||||||||||||
and investment | debt capital markets | attractive rates |
1 Debt maturity profile as at 30 June 2019
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Investor Day / 6 December 2019 | Sydney's Airport |
Sustainability Linked Loan
Commitment to sustainability reinforced; sustainability performance - funding cost link
- A$1.4 billion of bank debt facilities refinanced at lower margins
- Direct link established between sustainability performance and funding costs
- Bank debt margins may marginally increase or decrease depending on sustainability performance over time
- Performance measured with respect to Sustainalytics' Environmental, Social and Governance risk rating across the airport sector
- Loan not based on pre-set targets / business as usual, with focus on driving performance across the entire ESG spectrum
Sustainalytics material rating areas
Corporate | Community |
Governance | Relations |
Product | Occupational |
Governance | Health and Safety |
Human Capital | Emissions, Effluents |
Business Ethics | and Waste |
84 |
Examples of sustainability initiatives
Committed to becoming carbon neutral by 2025
Refreshed safety strategy and launch of SYD Safety Rules
Developed a precinct-wide waste strategy to 2030
Updated whistleblower policy
Updating our anti-bribery and corruption program
Industry recognition
Global Capital Most Impressive Green/SRI Loan Borrower
Global Capital Green/SRI Loan of the Year
FinanceAsia Issuer of the Year - Sustainable Award
KangaNews Syndicated Loan Deal of the year
Investor Day / 6 December 2019 | Sydney's Airport | |
Questions?
Chris Evans & Greg Botham
85
Thank you
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Disclaimer
Sydney Airport Holdings Limited published this content on 06 December 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 December 2019 22:40:15 UTC