Sydney Airport : Investor Day Presentation

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

1

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

2

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

2

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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

3

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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

6

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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

3

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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

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Investor Day  /  6 December 2019

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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

				sion a
			er	n
		v			d	u
	n
o						p
								s
C								el
							l

ness e r a w A

a

n

d

							n
							o
						i
						t
						a
						r
					e
				d
			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
	l
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

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Investor Day  /  6 December 2019	Sydney's Airport

Capital project delivery

1

Chris Evans - Chief Assets & Infrastructure Officer

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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

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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

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Sydney Gateway will provide toll-free connections to

Sydney Airport Domestic and International terminals.

5

2

• 6

1

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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

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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

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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

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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
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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

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Thank you