0
TAV Airports HoldingManagement Presentation
January 2009
1
Page
10TAV Airports – Operations
28Conclusion
21TAV Airports – Financial Overview
1TAV Airports – Overview
2
TAV Airports Overview
O&M, IT and SecurityTAV O&M (100%):
Commercial areaallocationsCIP / VIP
TAV IT (97%): Airport IT services
TAV Security(67%):
Security service provider in Istanbul, Ankara and Izmir
Airports Duty Free Food and Beverage
Ground Handling Other
TurkeyIstanbul Ataturk Airport (100%),
Ankara Esenboğa Airport (100%),
Izmir Adnan Menderes Airport (Intl. Terminal) (100%),
Gazipasa Airport (1)
(100%)
GeorgiaTbilisi International Airport(66%) and Batumi Airport
TunisiaMonastir and Enfidha Airports (2) (100%)
MacedoniaSkopje, Ohrid and Shtip Airports (3) (100%)
ATÜ (50%)Largest duty free operator in Turkey
Partner with Unifree– leading German travel retailer (Travel Value)
BTA (67%)109 outlets with a total seating capacity of 10,400 in Turkey andGeorgiaOperates Istanbul Airport Hotel (85 rooms)
Bakery & pastry factory serving in Turkey
€264m
Rev
enue
s9M
08(5
)
€114m €36m€43mNotes: (1) We had signed Gazipasa Airport concession agreement on January 7, 2008 and we have not started operations yet.
(2) We started operations in Monastir Airport on January 1, 2008. Enfidha Airport is under construction (greenfield investment)(3) We are awarded the tender on September 2, 2008 and we have not started operations yet.(4) Based on number of flights for 9M08(5) Revenues represent the proportional interest of these companies in TAV Airports (e.g. 50% of ATÜ revenues, 60% of TAV Georgia for whole period) (before eliminations)
Havaş (100%)Traffic, ramp and cargo handling
Majorgroundhandler in Turkey with a c.52%(4) share
Operates in 18airports in Turkey including Istanbul, Ankara, Izmir and Antalya
€97m
3
Ownership Structure
Founding shareholders
1. Tepe – Turkish integrated conglomerate focused on infrastructure and construction
2. Akfen – holding company operating in the construction, tourism, foreign trade, insurance and natural gas sector
3. Sera Yapi Endustrisi – family of Dr. Sani Sener, CEO of TAV Airports
4. Goldman Sachs International *5. Airports International **6. Babcock & Brown – infrastructure fund7. IDB Infrastructure fund – Bahrain based private
investment vehicle affiliated with the Islamic Development Bank
8. Other Non-floated9. Free Float (24.24%)
a) Global Investment House – a Kuwait based fund (4.87%)
b) Airports International ** (1.25%)c) Other Free Float (18.13%)
Current Shareholder Structure
Other shareholders
* 34,875,000 of the shares owned by Goldman Sachs that correspond to 14.4% of our issuedand outstanding share capital have been provided by Tepe, Akfen Holding and Sera toGoldman Sachs as collateral and the title of those shares have been transferred to GoldmanSachs for this purpose. A pledge granted by Goldman Sachs in favour of Tepe, Akfen Holding and Sera exists on those shares. As a result, the voting rights, right of receiving dividends, pre-emption rights for participating in cash share capital increase in connection with those (exceptfor acquiring gratis shares under any share capital increase) belong to Tepe, Akfen Holding and Sera.** 3,017,688 shares (1.25% stake) held by Airports International ("AI") is shown among floating shares, hence AI owns 10.1% of our share capital
18,86%
16,03%
2,83%
14,40%8,85%
4,32%
4,92%
5,55%
4,87%
1,25%
18,13%
9-c 1
2
3
4(*)5(**)6
8
7
9-a9-b(**)
4
We are the #1 Airport Operator in Turkey and in the Region
Operating 3 of the 4 largest airports in Turkey
(Passenger number, million)
Large catchment areas in operation
5.0
17.7
23.2
5.2 (2)
0
5
10
15
20
25
Istanbul Antalya Ankara Izmir
45% MARKET SHARE
Source: DHMI, Passenger figures for 2007Notes: (1) Excluding transit passengers
(2) TAV only operates the international terminal, which had 1.6m passengers in 2007
Turkey
GeorgiaMacedonia
Tunisia
0.70.7
4.2
0
1
2
3
4
5
Tunisia Monastir Georgia(Tbilisi&Batumi)
Macedonia(Skopje&Ohrid)
(Passenger number, million)
Source: TAV Tunisie, Georgian Authority, Macedonia Aviation Authority,Passenger figures for 2007
TurkeyTAV is the leading airport operator in Turkey with a 45% market share and high quality passengersThe airport terminals which we operate in Turkey handled 27.3 million passengers in 2006 and 29.8 million in 2007(1)
Istanbul is the largest business center in the regionTunisia
The operation is started as of January 1, 2008 in Tunisia Monastir Airport, which handled 4.2 million passengers in 2007.The operation shall be undertaken in Tunisia Enfidha Airport following the completion of the construction (2H09)
GeorgiaTAV operates Tbilisi Airport (capturing 98% of all air traffic in Georgia) and Batumi Airport in Georgia
MacedoniaTAV holds the operation rights of the Alexander the Great Airport in Skopje, the St. Paul the Apostle Airport in Ohrid and the New Cargo Airport in Shtip for 20 years.
5
Earnings Visibility
Note: Passenger service charges apply to departing passengers only
Non-AviationAviation
IstanbulAgreed passenger service charge
$15 per intl. pax€3 per dom. pax
Ankara
Revenue guarantees€15 per intl. pax€3 per dom. paxFixed PSC €13m + 5% volume growth p.a.
IzmirRevenue guarantees
€15 per intl. paxFixed PSC €15m +3% volume growth p.a.
TbilisiAgreed passenger service charge
$22 per intl. pax – growing at 2% p.a.Fixed $6 per dom. pax
Duty Free and
Catering
Duty Free available to all international inbound and outbound passengers
Increased number of shops, improved selection of products and check-in / security procedures enhanced
Potential to enter local in-flight catering market by 2009
OtherHigh margin and operational leverage
Minimal maintenance capex requirement
Monastir&
Enfidha
Agreed passenger service charge€8.25 per intl. pax in 2008 €9 per intl. pax in 2009
BatumiAgreed passenger service charge
$12 per intl. pax$7 per dom. pax
66
Potential Projects
Airports need development!!!Significant traffic growth expected in the region
Thus, significant number of airport developments continuing and upcoming in the Middle East, North Africa, Central & Eastern Europe and the CIS countries
Thus, experienced international airport operators will be needed as the infrastructure developments reach completion
TAV is ready for the operator demand in the industry due to its,
Strategic shareholders
Internationally recognized JV partners
Established technical and operational know-how in the region
Complete range of services
Ability to reasonably price its services
Potential projects in the region
SJSC Riga International Airport (Latvia)
Pulkovo Airport (St. Petersburg)
Almaty International Airport (Kazakhstan)
Abu Dhabi International Airport
7
Developments in 2008
January
February
March
April
May
June
July
August
September November
October December
1 January 2008 - We started operating the Monastir Airport in Tunisia
7 January 2008 – Antalya-Gazipasa Airport concession agreement is signed.
10 March 2008 – TAV Istanbul signed the refinancing agreement
25 April 2008 – TAV Tunisie signed a project financing agreement
2 May 2008 – We were invited to the second (the last) round of bidding process for the tender of Abu Dhabi International Airport Development Project
30 May 2008 – We have been awarded the PQ for the tender of airports in Macedonia.
2008
30 July 2008 – TAV has submitted a prequalification application for the tender of SJSC Riga International Airport.
8
Developments in 2008
January
February
March
April
May
June
July
August
September November
October December
13 August 2008 – We have been prequalified to bid for the tender of Pulkovo Airport.
2 September 2008 – TAV was awarded the tender in Macedonia.
15 September 2008 – We submitted a non-binding offer for Almaty Airport together with Goldman Sachs
24 September 2008 – The concession agreement for three airports in Macedonia has been signed
31 Ocober 2008 – The ownership stake of TAV Airports Holding in TAV Urban Georgia LLC has increased from 60% to 66%
4 November 2008 – Ataturk Airport expansion project has been signed between TAV Istanbul and State Airport Authority (DHMI)
2008
9
Traffic Performance
TAV Passenger Figures (million pax)
1%12.512.414%13.111.512.411.1Izmir A.Mend. (int’l)
6%8%7%
28%-2%
4%9%6%6%9%8%∆
138.2209.9348.1
6.934.6
36.413.750.1
100.9142.5243.42007
127.6194.1321.7
6.333.5
33.612.646.293.2
130.1223.3
11M07
82.5166.9249.4
5.027.9
23.310.633.959.2
112.3171.52004
109.9183.2293.1
5.631.1
29.110.739.880.8
123.4204.22005
128.8205.6334.3
7.632.7
35.711.347.192.3
142.2234.5
11M08
4%325.0TAV Total 6%194.5Int’l
2%47.4Ankara Esenboga-10%12.5Int’l
6%34.9Dom.
-2%35.2Monastir Airport21%5.4Georgia (inc. Batumi)
-1%95.0Dom.9%130.5Int’l5%225.5Istanbul Ataturk
1%130.5Dom.
∆2006Airports
Source: Turkish State Airports Authority (DHMI), Georgian Civil Aviation Authority, TAV Tunisie
TAV Air Traffic Movements (‘000)
0%4.14.11%4.24.24.13.7Monastir Airport
7%9%8%
16%
10%10%7%9%6%
12%9%∆
13.221.434.60.7
1.63.61.34.99.6
13.623.22007
12.220.132.30.6
1.53.31.24.68.9
12.621.5
11M07
7.616.924.50.4
1.52.21.13.35.4
10.215.62004
10.119.329.40.5
1.72.61.23.87.5
11.819.32005
12.520.933.40.7
1.63.91.25.18.6
13.321.8
11M08
3%32.0TAV Total 4%19.6Int’l
11%4.5Ankara Esenboga-8%1.2Int’l18%3.3Dom.6%1.5Izmir A.Mend. (int’l)
23%0.6Georgia (inc. Batumi)
-4%9.1Dom.6%12.2Int’l2%21.3Istanbul Ataturk
2%12.4Dom.
∆2006AirportsIn the first eleven months (January-November period)
Passenger:33.4 million total passenger, 3% growth (13.3 million int’l passenger in Istanbul Ataturk Airport, 6% growth)
Total int’l passenger traffic grew 4%
2% growth in domestic passenger traffic
Air Traffic Movement:334 thousand ATM, 4% growth
Int’l ATM grew 6%
10
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10TAV Airports – Operations
28Conclusion
21TAV Airports – Financial Overview
1TAV Airports – Overview
11
Istanbul Atatürk Airport (100% owned)
Largest in the region
Main hub and home base for Turkish Airlines
Fastest growing airport in Europe
6% YoY int’l passenger volume growth in 9M08
Revenue of €197 million in 9M08, up 9%
€145 million EBITDAR in 9M08, implies 7% growthand 74% margin
Revenue (€m)
THY (58%) Atlas Jet (16%)
Onur Air (23%) Others (3%)
Domestic International
THY (%47) Atlas Jet (2%)
Luf thansa (4%) Onur Air (2%)KTHY (2%) Others (43%)
Source: DHMİ
Passengers per airline (2007)
Source: DHMI, Terminal passenger figures exclude transit passengers
18,017.623.221.319.3
15.612.111.412.6
2001 2002 2003 2004 2005 2006 2007 9M07 9M08
International Domestic
11% CAGR 2001-07
0
50
100
150
200
250
300
2003 2004 2005 2006 2007 9M07 9M08
13% CAGR 2003-07
y-o-y +9%
y-o-y +2%
Passenger traffic 2001-2008 (m)
12
Ankara Esenboga Airport (100% owned)
Newest in the region
Secondary hub of Turkish Airlines
Operations commenced in October 16, 2006.
With the new terminal and relieved capacity constraints, Ankara is expected to grow in the coming years
Revenue (€m)Passengers per airline (2007)
Passenger traffic 2001-2008 (m)
THY (64%)Pegasus (15%)Lufthansa (3%)Onur Air (2%)KTHY (2%)Atlas Jet (5%)Others (9%)
Source: DHMI
+8%CAGR 4,13.8
5.04.53.8
3.32.82.83.2
2001
2002
2003
2004
2005
2006
2007
9M07
9M08
International Domestic
y-o-y 7%
Source: DHMI
13
Izmir Adnan Menderes Airport (100% owned)
Third largest city with the second biggest port in Turkey
Major tourist destination
Operations commenced in September 13, 2006.
Diversified customer base
Talks with Euro flag carriers to fly direct
Revenue (€m)Passengers per airline (2007)
Passenger traffic 2001-2008 (m) (*)
Source: DHMI
Sun Express (30%)Onur Air (12%)Atlas Jet (3%)Pegasus (9%)Lufthansa (7%)KTHY (6%)THY (3%)Others (30%)
1.41.51.7
1.51.41.51.51.3
1.6
2001
2002
2003
2004
2005
2006
2007
9M07
9M08
y-o-y +6%
Source: DHMI(*) International passengers only
14
Tbilisi International Airport (66% owned)
Operations in new terminal commenced in February 7, 2007.
Capturing 98% of all air traffic in Georgia
Capital city of Georgia with promising business opportunities
Capacity: 2.8 million passengers per year
ATÜ and BTA started to operate in the new terminal
Revenue (€m)Passengers per airline (1H08)
Passenger traffic 2001-2008 (‘000)
Georgian Airways (31%)
THY (17%)
Lufthansa (9%)
Azal (7%)
Austrian Airlines (5%)
Air Baltic (4%)
Others (27%)Source: Georgian Civil Aviation Authority
560
252 274 318402
547 567 616460
2001
2002
2003
2004
2005
2006
2007
9M07
9M08
International Domestic
y-o-y +22%
Source: Georgian Civil Aviation Authority
+18%CAGR
15
Batumi International Airport (60% owned)
Operations in the terminal commenced in May 26, 2007.
Second biggest city of Georgia with strategic importance
ATÜ and BTA started to operate in the terminal
Revenue (€m)Passengers per airline (1Q08)
Passenger traffic 2007-2008 (‘000)
65
23
40
2007
9M07
9M07
International Domestic
Source: Georgian Civil Aviation Authority
Georgian Airways (14%)
THY (69%)
JSC TAM AIR (16%)
South Airlines (1%)
Source: Georgian Civil Aviation Authority
16
Monastir International Airport (100% owned)
3.53.54.24.24.13.72.82.9
2002
2003
2004
2005
2006
2007
9M07
9M08
International + Domestic
TAV started to operate in January 1, 2008
Tunisia have potential to be the hub of Africa in near future
Capturing 39% of all air traffic in Tunisia, mainly tourists using charters
90% of travelers (6 million in 2007) visiting Tunisia prefered air transportation
New terminal building construction in Enfidha will be completed by October 2009
Revenue (€m)Passengers per airline (1H08)
Passenger traffic 2001-2008 (m)
Source: TAV Tunisie
y-o-y +1%
Tunis Air (26%)
Nouvelair Tunusia (22%)
Karthago Airlines (6%)
Air Berlin (5%)
Others (41%)
Source: TAV Tunisie
17
ATU Duty Free (50% owned)
ATU is the sole duty free operator at Istanbul Ataturk, Ankara, Izmir, Tbilisi and BatumiCompetitive concession fee (~43%) paid to TAV for ATÜ-operated shops in Ataturk AirportSpending per pax increased from €14.4 in 9M07 to€15.0 in 9M08, mainly because of new layout of duty free area at Istanbul Ataturk Airport. Spending per pax increased to €13.2 (9M07: €11.1) in Ankara EsenbogaATÜ also pursues tenders outside TAV operations
Spend per pax (€)*
Note: Figures imply 100% of ATU
Revenue (€m)
Financial Data
14.46.0%12.2
203.19M07
14.86.4%17.6
276.92007
-7%-
132%27%
∆
48%18.07.6EBITDA12%228.4217.2Total Revenues
4%15.016.0Spend per pax (€) -7.9%3.5%EBITDA Margin
∆9M082006(€ m)
15.014.814.814.8 16.014.414.3
2003 2004 2005 2006 2007 9M07 9M082003 2004 2005 2006 2007 9M07 9M08
188.0217.2
276.9
y-o-y +12%
165.5141.9
* 2007 and 2008 duty-free spend per pax includes Istanbul, Ankara & Izmir; whileprevious periods indicate Istanbul only
203228
18
BTA Catering Services (67% owned)
BTA is the food and beverage operator at Istanbul Ataturk (Int’l), Ankara, Izmir, Tbilisi and BatumiTotal revenue increased by 19% in 9M08, reflectingthe increase in per pax spend and improvement of Cakes&Bakes operations.Concession fees: BTA pays c40% of its revenues to TAVSpend per pax increased from €1.7 in 9M07 to€1.9 in 9M08. BTA is in negotiations to provide in-flight catering operations within the local market
Spend per pax (€)*
1.8
n.m.-0.250.32007
-25%
-n.m.44%
∆
1.7
7.6%2.8
36.69M07
-14%.2.43.0EBITDA19%43.435.0Total Revenues
11%1.92.4Spend per pax (€)
-5.5%8.6%EBITDA Margin
∆9M082006(€ m)
2003 2004 2005 2006 2007 9M07 9M08
2003 2004 2005 2006 2007 9M07 9M08
29.435.0 50.3
y-o-y +19%
1.8 1.72.4
1.9
Note: Figures imply 100% of BTA
* 2007 and 2008 food & beverage spend per pax includes Istanbul, Ankara & Izmir; while previous periods indicate Istanbul only
21.114.9
1.31.6
Revenue (€m)
Financial Data
3743 1.9
19
Havaş Ground Handling (100% owned)(*)
108.3
58.554.8
121.8122.7
2004 2005 2006 2007 9M07 9M08
Total revenue of Havas increased by 13% in 9M08, with 16% YoY growth in ground handling revenues.
Currently operating at 18 airports in Turkey
Formed strategic partnership with Cyprus TurkishAirlines (KTHY) to undertake ground handlingoperations in Nothern Cyprus (Ercan Airport)
Havaş has been elected by THY as a 50% partner for the TGS Ground Handling Services Inc.
Revenue (€m) # Aircrafts handled (‘000)
Financial Data
139.3
18.7%20.3
108.12007
14%
-83%9%∆
108.3
25.8%22.185.6
9M07
7%23.711.1EBITDA13%96.699.5Total Revenues
13%121.8122.7# Aircrafts handled(‘000)
-24.5%11.2%EBITDA Margin
∆9M082006(€ m)
2005 2006 2007 9M07 9M08
84.199.5
y-o-y 13%
Note: Figures imply 100% of HAVAS
108.1
y-o-y +13%
139.3
* TAV increased its stake in Havaş to 100% in Nov 2007.
85.696.6
20
Other Services
Other services income mainly contains incomesfrom maintenance, CIP lounge services, securityservices and software sales.
TAV O&M (100%), incorporated in 2004
Commercial area allocations and maintenance
CIP / VIP
TAV IT (97%), become a separate entity in 2005
Airport IT services, software and hardware sales
TAV Security (67%), became a separate entity in 2006
Security service provider in Istanbul, Ankara and Izmir
Revenue Breakdown (9M08)
Note: All periods include TAV Holding, TAV O&M, TAV IT and TAV Security
17.3%6.7
38.82006
n.m.-6.650.32007
-n.m.30%
∆
n.m.-4.7-0.9EBITDA-2%35.936.5Total Revenues
-n.m.n.m.EBITDA Margin
∆9M089M07(€ m)
2006 2007 9M07 9M08
10.3
38.8
y-o-y -2%
50.3
Revenue (€m)
36.5 35.9
Financial Data
TAV O&M48%
TAV Holding
25%TAV IT13%
TAV Security
14%
21
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10TAV Airports – Operations
28Conclusion
21TAV Airports – Financial Overview
1TAV Airports – Overview
22
Operational Performance
* Construction revenue and construction expenditure are excluded while computing the operational performance in the table.18%11,2249,473Average number of employees22%758.2620.8Net Debt3%350.3339.8Shareholders’ Equityn.m.(34.1)(72.7)Free Cash Flow
267%155.742.4Capexn.m.135.1(19.5)Cash flow from operationsn.m.10.3(19.1)Net Income (Loss)
-45.4%43.7%EBITDAR margin33%207.6156.4EBITDAR
-19.9%14.3%EBITDA margin78%91.051.1EBITDA28%457.1357.9Revenues
∆ y-o-y9M20089M2007(in million €)*
€10.3 million net profit for the first nine months period ended September 30, 2008.
Cash flow from operating activities reached €135 million during the period, the highest level since 2006.
23
Operational Performance
Continuing revenue growth:Consolidated revenue increased by 28% to €457 million in 9M08
Improving operational performance:EBITDAR increased by 33% to €208 million, implying 45% margin
Swinging to a net profit:€10.3 million net profit in 9M08, compared to €19.1 million net loss in 9M07
EBITDAR (€m)
Consolidated Revenue (€m)
2006 2007 9M07 9M08
95
358
457y-o-y +28%
508
402
2006 2007 9M07 9M08
34
156
208
y-o-y +33%218
170
Net Income (Loss) (€m)
-19.1
10.3
-38,4
-70,3
2006 2007 9M07
9M08
24
Revenue Profile
TAV Airports Revenues
Total revenues increased by 28% to €457 million in 9M08.
There is no historical financial information for Ankara, Izmir and Tbilisi (only passenger data) for 2006– in 2007 the volumes at these airports were approximately 31% of Istanbul’s volumes
Services commenced operations at the new airports in the last months of 2006 2007 was the first full year of operations at Ankara, Izmir and new terminal of Tbilisi.
125%67307019Others9%197181244227Istanbul
25%264211314247Airports
19%43375035BTA12%114102138109ATU (50%)28%290226313244Services
28%457358508402Consolidated-97-79-119-89Eliminations
27%554437627490Total-2%36375039Others88%97517461Havas (60%)(*)
Change9M089M0720072006(€ million)
(*) Fully consolidated for 4Q07 and 9M08 while 60% proportionally consolidated before
25
EBITDAR Build-up
Total revenues increased by 28% to €457million in 9M08
Aviation operations (including ground handling), account for 40% of total operating income and non-aviation operations account for 60% of total operating income in 9M08.
Operating expenses increased by 19% to €392million in 9M08
EBITDA: reached €91 million in 9M08, which was €51 million in 9M07.
Concession rent expenses increased by 11%to €117 million in 9M08, due to the concessionpayment for Monastir Airport
EBITDAR rose by 33% to €208 million in 9M08, implying 45% margin.
Rev
enue
s
Ope
x
EBIT
D&
A
Con
c. e
xp.
EBIT
DA
R
Non
-avi
atio
nA
viat
ion
185
272
392
6526
117 208
9M08 EBITDAR Build-up (€m)
26
EBITDAR Profile
TAV Airports EBITDAR (*)
EBITDAR rose by 33% to €208 million in 9M08, implying 45% margin.
Istanbul has a good like-for-like EBITDAR track record
n.m.301201Others7%145135180150Istanbul
29%175136200151Airports
-14%2303BTA48%9694ATU (50%)43%30211419Services
33%208156218170Consolidated2-140Eliminations
31%205157214170Totaln.m.-5-1-77Others78%2413125Havas (60%)(**)
Change9M089M0720072006(€ million)
(*) EBITDAR figure for Istanbul includes concession rent expense(**) Fully consolidated for 4Q07 and 9M08 while 60% proportionally consolidated before
27
9M08 Financial Summary
TAV Airports Consolidated– 9M08
(*) EBITDAR figure is used for Istanbul(**) Fully consolidated for 4Q07 and 9M08 while 60% proportionally consolidated before
9077%2533Tunisie00%00Batumi
2044%37Tbilisi (60%)
2-97Eliminations75837%205554Total194-13%-536Others
1166%115Ankara685%111Izmir
2-00Gazipasa
26374%145197Istanbul55966%175264Airports
-15%243BTA178%9114ATU (50%)
19910%30290Services
75845%208457Consolidated
-1224%2497Havas (**)
Net DebtEBITDAR(*) MarginEBITDAR(*)Revenues(€ million)
28
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10TAV Airports – Operations
28Conclusion
21TAV Airports – Financial Overview
1TAV Airports – Overview
29
Outlook
Traffic &passenger growth
CommercialCommercialrevenuesrevenues
New New concessionsconcessions
THY joined Star Alliance in April 2008 expected to boost pax by 2 million
ATÜ and BTA expected to increase revenues at new airports
All international passengers eligible for duty free (departing and arriving)
BTA – potential from in-flight catering operations within local market (2009)
2007 was the first full year of operations at Ankara, Izmir and Tbilisi
Recently won two concessions in Tunisia and one in Turkey (Gazipasa) and three airports in Macedonia
Started operations in Batumi Airport in 2007 and Monastir Airport in Tunisia in 2008
CapexCapexMinimal maintenance capex on existing concessions as all terminals are brand new
30
Appendix
Consolidated Income Statement
Cash Flow Hedge Accounting
Consolidated Balance Sheet
IFRIC 12
Concession Overview
Consolidated Cash Flow Statement
Historic Overview
Share Performance
31
Share Performance (as of January 16, 2009)
Market Performance
-33%-77%-68%YTD
49%28%39%3M
-42%-70%-66%Since IPO
3%-3%0%Weekly
Share Price Performance
4%-1%1%1M
Relative toISE-100USDYTL
Avg. Daily Volume US$ 7.9 mn (last 3 months)
Free Float 24.24%
Foreign ownership 69.1% of free float
Closing Price TRY 3.42 (US$ 2.13) per share
Market Cap US$ 517 mn
Notes: Share figures in this page was prepared as of 16 January 2009.
123456789101112
16-0
1-09
28-1
1-08
16-1
0-08
01-0
9-08
21-0
7-08
09-0
6-08
25-0
4-08
13-0
3-08
31-0
1-08
17-1
2-07
05-1
1-07
20-0
9-07
08-0
8-07
27-0
6-07
16-0
5-07
03-0
4-07
Relative
0,30,40,50,60,70,80,91,01,11,21,31,4 Price ($)
TAVHL ($) Relative to ISE
5
10
15
20
25
30
35
16.0
1.09
28.1
1.08
16.1
0.08
01.0
9.08
21.0
7.08
09.0
6.08
25.0
4.08
13.0
3.08
31.0
1.08
17.1
2.07
05.1
1.07
20.0
9.07
08.0
8.07
27.0
6.07
16.0
5.07
03.0
4.07
Volume ($m)
123456789
1011 Price ($)
32
Concession Overview
(*) As of 30 June 2008
Type / expire Scope Concession fee Net Debt (*)2007
Pax (mppa)Fee/paxIntern’l
Fee/paxdomesticAirport
Concession(2021) Intl + dom $165m/yr €313m23.2 US$15 €3Istanbul
Ataturk
BOT(2023) Intl + dom - €120m4.96 €15 €3Ankara
Esenboga
BOT(2015) Intl - €75m1.60 €15 -Izmir A
Menderes
BOT(2027) Intl + dom - €19m0.62 US$22
(+ 2% p.a.) US$6Tbilisi
Volume guarantee
No
0.6m Dom.0.75 Int’l for 2007 + 5%
p.a.
1.0m Int’l for 2006 + 3%
p.a.
No
TAV stake
100%
100%
100%
60%
BOT + concession
(2047)Intl + dom
11-26% of revenuesfrom2010 to 2047
€14m4.3 €8.25 in 2008€9 in 2009
€8.25 in 2008€9 in 2009
Monastir&
EnfidhaNo100%
BOT(2027) Intl + dom - -- US$12 US$7Batumi No60%
33
Historic Overview
1997 1998 2000 2003 200620022001
January 2000ATÜ began operationsInternational terminal building completed c.8 months ahead of schedule
June 2000Concession agreement extended through to 2nd July 2005 in return for a 30% enlargement of the int’l terminal
1999 20052004
Established under the name of Tepe AkfenVie Yatirim Yapim veIsletme A.S.TAV successfully tendered for BOT project for Istanbul Atatürk Airport(Concession deadline May 7, 2004)
May 2004BTA started operating the Istanbul International Airport Hotel
August 2004Executed the BOT agreement for Ankara Esenboğa International Airport (right to operate through mid-2023)
September 2004TAV O&M incorporated
June 2005TAV won the tender for Ataturk Airport tooperate for 15.5 years (through 2nd Jan 2021)
July 2005TAV acquired 60% of Havaş sharesTAV obtained control of the BOT for Izmir AdnanMenderes Airport (right to operate through Jan 2015) through the acquisition of Havaş
August 2005TAV IT became a separate entity
September 2005TAV Urban Georgia LLC won the BOT tender for the Tbilisi Airport (10.5 years operating contract) with a 9.5-year extension granted in return for the re-development of the Batumi Airport
March 2006TAV Security became a separate entity
August 2006Name changed to TAV HavalimanlariHolding A.S.
September 2006Completed the construction of Izmir Adnan Menderes Airport’s international terminal
October 2006Ankara Esenboğa’s new domestic and international terminals completedBTA was founded
2007
February 2007IPO: TAV Havalimanlari Holding offered 44.56 million of its shares to public
March 2007TAV won the tender to operate Monastir and EnfidhaAirports in Tunisia for 40 years
May 2007TAV started to operate Batumi Airport
July 2007TAV acquired remaining 25% of TAV Esenboga and5% of TAV Izmir
August 2007TAV is awarded the tender of Antalya-GazipasaAirport
November 2007TAV increased its stake in Havaş to 100% from 60%
2008
January 2008TAV started operating Monastir Airport
March 2008TAV Istanbul refinancing
April 2008TAV Tunisie signed project financing agreement
September 2008TAV is awarded the tender for Macedonian Airport Infrastructure Development
34
IFRIC 12
IFRIC 12 is a new application regarding to interpretation of most of existing standards in the IFRS for example, IAS 11-Construction Contracts, IAS 16-Property Plant and equipment, IAS 17-Leases, IAS 36-Impairment of Assets and IAS 38-Intangible Assets.
IFRIC 12 Service Concession Arrangements was developed by the International Financial Reporting Interpretations Committee. Effective date of the application is 1 January 2008.
TAV Airports adopted IFRIC 12 in the consolidated financial statements for the first time as of 31 March 2008 retrospectively.
IFRIC 12 affects P&L in terms of the decrease in aviation income (for the guaranteed passenger fees) and depreciation expenses while the increase in financial income in accordance with such interpretation. “BOT assets” are classified as “airport operation right” and “trade receivable” in the consolidated financial statements.
It means the operator (TAV Airports) should account these investments as cost and book construction revenue (if a mark-up on costs) on its financials instead of investments according to the completion of infrastructure troughtout the construction periods. Mark-up rates for TAV İzmir, TAV Esenboğa, TAV Tbilisi and TAV Tunisia, which are in the application of IFRIC 12 are assessed by the management as 0%, 0%, 15% and 5% during the application periods, respectively.
The remaining discounted guaranteed passenger fee to be received from DHMİ according to the agreements made for the operations of Ankara Esenboğa Airport and İzmir Adnan Menderes Airport is represented as guaranteed passenger fee receivable in the balance sheet as a result of IFRIC 12 application.
35
IFRIC 12
RemovedBuild-operate-transfer (“BOT”) Investment
IncreaseTrade receivables AddedAirport operation right
The effect of adoption of IFRIC 12
Balance Sheet (Assets)
Income Statement
Decrease (guaranteed pax fees)Aviation income
AddedDiscount interest income
DecreaseDepreciation and amortisation expense (-)
AddedConstruction expenditure (-)AddedConstruction revenue
36
Cash Flow Hedge Accounting
Subsidiaries, TAV Istanbul, TAV Esenboğa and TAV İzmir enter into swap transactions in order to diminish exposure to foreign currency mismatch relating to DHMI instalments and interest rate risk to manage exposure to the floating interest rates relating to loans used.
100%, 100%, 80% and 100% of floating bank loans for TAV İstanbul, TAV Tunisia, TAV İzmir and TAV Esenboğa, respectively are fixed with financial derivatives.
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 effective. To the extent that the hedge is ineffective, changes in fair value are recognized in profit or loss.
Sensitivity Analysis
A 10% strengthening of the Euro against other currencies (assuming that other currencies are constant) at 30 September 2008 would have positive effect amounting to approximately €3.2 million on profit or loss statement when ignoring the effect of derivative financial instruments.
Based on the Group’s current borrowing profile, a 50 basis points increase in Euribor or Libor would have resulted in additional annual interest expense of approximately €4.3 million on the Group’s variable rate debt when ignoring effect of derivative financial instruments. €2.5 million of the exposure is hedged through IRS contracts. Therefore, the net exposure on income statement would be €1.8 million.
37
Consolidated Income Statement
(0.03)(0.08)0.110.04Income / (loss) per share – basic 238,958,333238,958,333240,717,076240,717,076Weighted average number of shares outstanding
(6,517,012)(19,114,841)27,246,58210,333,089Profit / (loss) for the period1,099,242893,995216,320477,830Minority interest
(7,616,254)(20,008,836)27,030,2629,855,259Equity holders of the Group
Attributable to:(6,517,012)(19,114,841)27,246,58210,333,089Profit / (loss) for the period
2,340,2214,958,063(1,103,495)(6,552,447)Income tax (expense) / benefit
(8,857,233)(24,072,904)28,350,07716,885,536Profit / (loss) before income tax(31,301,989)(51,811,641)(13,851,356)(56,499,675)Net finance expense(35,675,197)(64,377,041)(17,970,247)(68,225,828)Finance expenses
4,373,20812,565,4004,118,89111,726,153Finance income
22,444,75627,738,73742,141,43373,385,211Operating profit(18,853,119)(61,613,967)(21,313,186)(55,336,091)Other operating expenses
(7,701,577)(22,761,613)(8,844,318)(25,743,229)Depreciation and amortisation expense
(35,486,543)(105,302,461)(41,236,512)(116,600,677)Concession rent expenses
(27,319,121)(75,995,546)(39,173,986)(110,783,078)Personnel expenses
(7,222,438)(14,396,631)(12,258,986)(27,902,282)Cost of services rendered
(15,234,607)(41,759,427)(16,803,611)(45,708,068)Cost of duty free inventory sold
(2,898,691)(7,774,327)(3,691,923)(9,717,329)Cost of catering inventory sold
(5,331,512)(21,820,001)(58,833,495)(162,439,320)Construction expenditure
7,177,67315,849,3187,261,96219,936,183Other operating income
130,202,569342,098,592175,260,318437,117,816Operating revenue
5,112,12221,214,80061,775,170170,561,286Construction revenue
3Q079M073Q089M08(€ million)
38
Consolidated Balance Sheet
ASSETS
1,474,895,5631,598,527,131TOTAL ASSETS570,185,929583,961,077Total current assets
248,683 -Investments held for trading
257,520,816248,746,207Restricted bank balances
64,652,43336,150,212Cash and cash equivalents
43,579,33143,287,581Other receivables and current assets
-14,115,612Derivative financial instruments
4,194,406 20,058,578Due from related parties
49,883,34676,162,609Trade receivables
140,797,438133,215,353Prepaid concession expenses, current portion
9,309,47612,224,925Inventories
904,709,6341,014,566,054Total non-current assets21,157,80820,201,132Deferred tax assets
24,788,4525,827,998Other non-current assets
179,431,221162,087,945Non-current trade receivables
154,155,439151,239,126Prepaid concession expenses, non-current portion
131,564,539131,564,539Goodwill
1,235,34824,238Other investments
295,835,595444,513,602Airport operation right
30,395,63630,684,773Intangible assets
66,145,59668,422,701Property and equipment
31 December 2007 30 September 2008 (€ million)
39
Consolidated Balance Sheet
EQUITY
337,468,308365,194,213Total Equity14,986,68014,924,637Minority interest
322,481,628350,269,576Total equity attributable to equity holders of the Company(56,584,597)(50,994,192)Accumulated losses
343,0393,795,414Translation reserves
-14,498,343Cash flow hedge reserve
40,063,86040,063,860Purchase of shares of entities under common control
3,007,5392,751,334Revaluation surplus
10,559,03915,062,069Legal reserves
220,182,481220,182,481Share premium
104,910,267104,910,267Share capital
31 December 2007 30 September 2008 (€ million)
40
Consolidated Balance Sheet
LIABILITIES
1,474,895,5631,598,527,131TOTAL EQUITY AND LIABILITIES1,137,427,2551,233,332,918Total Liabilities
345,081,222380,652,015Total current liabilities9,364,3557,190,815Deferred income
11,533,5604,193,433Provisions
18,014,08134,698,705Other payables
1,487,6985,116,055Current tax liabilities
17,144,780-Derivative financial instruments
28,790,208 81,403,681Due to related parties
22,007,74927,302,346Trade payables
234,768,093 219,429,286Loans and borrowings
1,970,6981,317,694Bank overdraft
792,346,033852,680,903Total non-current liabilities4,581,2034,696,010Deferred tax liabilities
-763,611Other long term liabilities
19,068,15018,544,318Deferred income
4,884,1076,344,653Reserve for employee severence indemnity
763,812,573822,332,311Loans and borrowings
31 December 2007 30 September 2008 (€ million)
41
Consolidated Cash Flow Statement
CASH FLOWS FROM OPERATING ACTIVITIES
148,258,170138,805,017Cash flows from operating activities8,267,299(16,117,150)Marked to market valuation of derivative instruments
(4,958,063)6,552,447Income tax expense / (benefit)
45,079,20649,691,352Interest expense on financial liabilities
(1,333,050)(624,051)Accrued interest income / (expense)
(15,015,510)(56,843,896)Unrealized foreign exchange differences on balance sheet items
(202,654)-Reversal of provision for slow moving inventory
437,431412,238Unused vacation accrual
(273,063)(384,924)Gain on sale of property and equipment
400,096136,401Discount on receivables and payables
-608,688Provisions set
(205,101)229,794Provision / (reversal of provision) for doubtful receivables
(815,634)2,467,123Provision / (reversal of provision) for employment termination benefits
7,927,980-Non-recoverable VAT related to concession payments
105,302,461116,600,677Amortisation of concession asset
1,886,7572,764,719Amortisation of intangible assets
6,775,9108,776,160Depreciation of property and equipment
14,098,94614,202,350Amortisation of airport operation right
Adjustments to reconcile net profit / (loss) to net cash provided by operating activities:
(19,114,841)10,333,089Profit / (loss) for the period
9M079M08(€ million)
42
Consolidated Cash Flow Statement
(19,515,814)135,101,152Net cash provided from / (used in) operating activities (495,419)(798,336)Retirement benefits paid
(29,545,712)(21,061,502)Interest paid
(2,719,181)(2,497,506)Income taxes paid
13,244,498159,458,496Cash generated from operations(7,801,633)(38,605,549)Change in VAT portion of prepaid rent
(107,355,756)(95,196,116)Additions to prepaid concession expenses
-37,459,376Change in other long term assets
4,514,9726,951,801Change in other payables and provisions
(36,317,033)52,613,473Change in due to related parties
(30,237,031)(5,685,254)Change in trade payables
(3,117,604)22,233,539Change in other receivables and current assets
38,283,01868,890,325Change in restricted bank balances
1,890,594(15,864,173)Change in due from related parties
1,827,788(2,915,449)Change in inventories
12,907,30117,343,274Change in non-current trade receivables
(9,608,288)(26,571,768)Change in trade receivables
9M079M08(€ million)
43
Consolidated Cash Flow Statement
CASH FLOWS FROM INVESTING ACTIVITIES
(52,680,787)(165,614,052)Net cash used in investing activities (923,211)(2,430,588)Acquisition of intangible assets
(42,410,701)(155,745,118)Additions to airport operation right
(9,801,077)(11,007,190)Acquisition of property and equipment
1,097,3543,320,161Proceeds from sale of property and equipment
(643,152)248,683Net change in investments held for trading
9M079M08(€ million)
52,751,85834,832,518CASH AND CASH EQUIVALENTS AT 30 SEPTEMBER6,254,14662,681,735CASH AND CASH EQUIVALENTS AT 1 JANUARY
46,497,712(27,849,217)NET (DECREASE) / INCREASE FROM CASH AND CASH EQUIVALENTS118,694,3132,663,683Net cash provided from financing activities
5,366,739-Increase of share capital
48,300,648-Increase in share premium
635,493-Addition in finance lease liabilities
(19,202,214)-Purchase of shares under common control
(369,959)(62,043)Minority change
-3,196,170Change in revaluation surplus and translation reserves
81,700,050(60,115,716)Change in restricted bank balances(251,409,280)(698,907,986)Repayment of borrowings
253,672,836758,553,258New borrowings raised
CASH FLOWS FROM FINANCING ACTIVITIES
52,751,85834,832,518CASH AND CASH EQUIVALENTS AT 30 SEPTEMBER6,254,14662,681,735CASH AND CASH EQUIVALENTS AT 1 JANUARY
46,497,712(27,849,217)NET (DECREASE) / INCREASE FROM CASH AND CASH EQUIVALENTS118,694,3132,663,683Net cash provided from financing activities
5,366,739-Increase of share capital
48,300,648-Increase in share premium
635,493-Addition in finance lease liabilities
(19,202,214)-Purchase of shares under common control
(369,959)(62,043)Minority change
-3,196,170Change in revaluation surplus and translation reserves
81,700,050(60,115,716)Change in restricted bank balances(251,409,280)(698,907,986)Repayment of borrowings
253,672,836758,553,258New borrowings raised
CASH FLOWS FROM FINANCING ACTIVITIES
44
Disclaimer
This presentation does not constitute an offer to sell or the solicitation of an offer to buy or acquire any shares of TAV HavalimanlariHolding A.Ş. (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 noresponsibility 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 16 January, 2009.