NWS Holdings FY2018 Annual ResultsMedia Briefing

19 September 2018

Draft as of 14 Sep 2018

NWS Holdings FY2018 Annual ResultsMedia Briefing

19 September 2018

Performance Highlights

� Record-high revenue and earnings

� Roads, Environment and Aviation of Infrastructure division

recorded notable growth in earnings

� Mixed performances in Services division with Construction

being the bright spot

� Partial disposal and fair value gain from Beijing Capital

International Airport

� Dividend maintained at no less than 50% of Profit Attributable

to Shareholders (PAT)

� Strong funding resources to boost continual growth

2

* Total dividend for FY2018 increased by 7% after excluding the special dividend of HK$0.72 per share

for FY2017

Capital Expenditure: Over HK$5B

Total cash and bank balances: HK$6,657M (As at 31 Dec 2017: HK$6,421M)

Net Gearing Ratio: 7% (As at 31 Dec 2017: 13%)

Financial SummaryFor the year ended

30 June

2018

(HK$’M)

2017

(HK$’M)

Change %

Revenue 35,114.8 31,385.0 12

Attributable Operating Profit (AOP) 5,231.9 4,840.3 8

Profit attributable to shareholders

(PAT)6,068.8 5,628.9 8

Basic earnings per share (HK$) 1.56 1.46 7

Dividend per share (HK$) 0.78 1.45 *

3

3,500

4,500

5,500

6,500

FY2013 FY2014 FY2015 FY2016 FY2017 FY2018

4

HK$’MHK$’MHK$’MHK$’M

PAT – Five Year Summary

Achieved CAGR growth at 9%

4,3254,3254,3254,325 4,4784,4784,4784,478

4,9134,9134,9134,913

5,6295,6295,6295,629

6,0696,0696,0696,069

4,0084,0084,0084,008

5

AOP by Division

Infrastructure

72%

Services

28%

AOP by Region

Mainland China

50%

Hong Kong

39%

Others

11%

AOP Distribution

6

Performance of Infrastructure Division

Roads Environment

Logistics

Aviation

7

Infrastructure - AOP Breakdown

For the year ended 30 June2018

(HK$’M)

2017

(HK$’M)

Change %

Roads 1,947.1 1,479.1 32

Environment 494.1 392.1 26

Logistics 654.6 641.2 2

Aviation 695.2 610.5 14

Total 3,791.0 3,122.9 21

0

500

1,000

1,500

2,000

FY2017 FY2018

8

Roads

HK$’MHK$’MHK$’MHK$’M

For the year ended30 Jun

� 15 projects in Mainland China,

approx. 700km in length

� Traffic growth of 10%

� RMB exchange gains

� Six-month AOP from newly

acquired Suiyuenan Expressway

AOP

1,4791,4791,4791,4791,9471,9471,9471,947

(+32%)(+32%)(+32%)(+32%)

13,000

15,000

17,000

19,000

21,000

600

800

1,000

1,200

1,400

9

Roads (cont’d)Road Projects Five Year Summary

Average Daily Traffic Flow *

RMB’000

Average Daily Toll Revenue *

Vehicles’000

CAGR:

11%

CAGR:

9%

783858

973

1,081

1,197

14,206

15,205

17,042

18,415

19,901

* For existing projects as at 30 June 2018, excluding

Suiyuenan Expressway which was acquired in Jan 2018

0

100

200

300

400

500

FY2017 FY2018

10

Environment

HKHKHKHK$’M$’M$’M$’M(+26%)(+26%)(+26%)(+26%)

AOP

� SUEZ NWS Limited

蘇蘇蘇蘇伊士新創建伊士新創建伊士新創建伊士新創建

� Water sales and wastewater

treatment volume up 9%

� Waste treatment volume up 8%

� Chongqing Derun Environment 重慶德潤環境重慶德潤環境重慶德潤環境重慶德潤環境

� New waste-to-energy plant in

Chongqing commenced operation in

Jan 2018

� Lump sum VAT subsidy on sewage

business

494494494494392392392392

For the year ended30 Jun

11

Location ProjectDaily Capacity

(tonnes(t)/m3)Total Investment Expected Completion

Shaanxi

Wastewater

5,000 m3 RMB 80M 2019

Hainan 12,000 m3 RMB 100MPhase 1 – operational

Phase 2 – 2020

Jiangsu 40,000 m3 RMB 84MPhase 1 – operational

Phase 2 – 2021

Kaohsiung Waste Incineration 80 tonnes NT$ 650M * 2018

SUEZ NWS Limited

Location Project Scale Total Investment Expected Completion

Chongqing

Changsheng River

Remediation

River length

29 kmRMB 2.5B 2021

Changsheng Bridge

Landfill Restoration 1,037 mu RMB 253M Operational

ChengduEnvironmental

Remediation **

River length

18.68 kmRMB 1.4B 2020

Chongqing Derun Environment

Environment – Summary of New Investments

* Acquisition cost of SUEZ NWS Limited

** Selected as preferred bidder in Jun 2018

SUEZ NWS

Recycling &

Recovery

Water

Water &

treatment

Water &

wastewater

treatment

Sludge treatment

Industrial &

incineration

Industrial &

municipal waste

incineration

Waste collection

& treatment

Landfill & landfill

restoration

4

11

8

9

9.1M m335

2,140 tonnes

9,250 tonnes

2,060 tonnes

No. of Projects

(as at 30 Jun 2018) Daily Capacity

Water

Infrastructure

Design, engineering

& procurement

services

Environment (cont’d)

12

SUEZ NWS Limited – 67 projects in 28 cities across Greater China

96M m³ *

(excluding

landfill

restoration)

* Total capacity

0

200

400

600

800

FY2017 FY2018

13

Logistics

HKHKHKHK$’M$’M$’M$’M

AOP

� ATL Logistics Centre

� 97.2% average occupancy rate;

average rental up 4%

� HK$400 million renovation to be

completed in 2H2018

� Xiamen Container Terminal Group

� Stable throughput, up by 1% to

over 8.2M TEUs

� Tianjin port projects

� Throughput up 7% to 3.8M TEUs

655655655655641641641641

(+2%)(+2%)(+2%)(+2%)

For the year ended30 Jun

14

Logistics (cont’d)

� China United Int’l Rail Containers (CUIRC)

中鐵聯集

� Stable growth momentum with

throughput up 8% to over 2.7M TEUs

� Europe bound international block-train

services from five terminals*

� Guangzhou terminal under planning

10 terminals in operation

* Chongqing Qingdao

* Chengdu Kunming

* Zhengzhou Tianjin

* Wuhan Dalian

* Xian Urumqi

0

200

400

600

800

FY2017 FY2018

15

Aviation

For the year ended 30 Jun

HK$’MHK$’MHK$’MHK$’M

� Aircraft Leasing

� Robust growth - acquisition of Sky

Aviation Leasing International Limited

and direct orders

� Fleet of owned, managed and

committed aircraft increased rapidly

within three years from 27 to 223

aircraft

� Beijing Capital International Airport Co.,

Ltd.

� Disposed 208M shares in Jan 2018

� Remaining shareholding of 240M

shares reclassified as an available-for-

sale financial asset

695695695695

611611611611

(+14%)(+14%)(+14%)(+14%)

AOP

16

Performance of Services Division

Facilities Management

Construction & Transport

Services - AOP Breakdown

For the year

ended 30 June2018

(HK$’M)

2017

(HK$’M)

Change %

Facilities Management (73.1) 301.1 124

Construction & Transport 1,212.9 1,131.8 7

Strategic Investments 301.1 284.5 6

Total 1,440.9 1,717.4 16

17

(100)

0

100

200

300

400

FY2017 FY2018

Facilities Management

HKHKHKHK$’M$’M$’M$’M

For the year ended 30 Jun � HKCEC

� Won Phase II contract to 2028

through a global tender exercise

� Stable revenue growth with over

1,000 events held in FY2018

� Free Duty

� Performance impacted by

operating costs and sluggish

tourist spending

� Clear signs of recovery in second

half of FY2018

(73)(73)(73)(73)

301301301301

((((----124%)124%)124%)124%)

18

AOP

19

Facilities Management (cont’d)

� Patient volume ramp-up meets

expectation

� Full range of specialties in good

progress

� 24-hour clinic in operation since

Dec 2017

� Total of 1,000 permanent staff,

plus over 800 visiting doctors

� Gleneagles Hong Kong Hospital

0

200

400

600

800

1,000

1,200

1,400

FY2017 FY2018

Construction & Transport

� Construction

� AOP up 16% reflecting good job

progress and improving gross profits

� Hip Hing Group

• Gross contract-on-hand: HK$47.1B

• Remaining value: HK$21.2B

HKHKHKHK$’M$’M$’M$’M

AOP

1,1321,1321,1321,132 1,2131,2131,2131,213

(+7%)(+7%)(+7%)(+7%)

20

For the year ended 30 Jun

� Transport

� Bus company profit declined by 63%

due to:

• Increase in staff cost

• Reduction in fare revenue and

advertising income

� Awaiting government approval on

fare increase

Mid- to long-term growth drivers:

� Roads

� Sustained double digit growth in traffic volume

� Environment

� Continue to leverage government environmental policies

� Construction

� Continue to benefit from the buoyant construction market in Hong Kong

� Aircraft Leasing

� Robust global air travel demand - aircraft leasing accorded high priority in

our investment strategy

21

Business Outlook

Aircraft Leasing

� Goshawk Aviation Limited

� 50/50 aircraft leasing JV with Chow Tai Fook

Enterprises, headquartered in Dublin with a

regional office set up in Hong Kong

� Young, liquid fleet (average 3.5 years) with

long leases attached (average 7.4 years

remaining)

� Acquired Sky Aviation Leasing International

Limited in Jun 2018, adding 51 aircraft and

increased its owned, managed and committed

fleet to 183 aircraft

� Subsequent first direct orders with Airbus and

Boeing for 40 new aircraft, further expanded

the fleet to 223 aircraft valued at US$11.4B

22

23

Aircraft Leasing (cont’d)

Goshawk’s Customer Composition (excluding direct orders)

More diversified airline lessees

and balanced geographical

spread resulted from fleet

expansion

Aircraft Airline Countries

Jun 2018 183 64 34

Feb 2015 27 15 13

APAC 50%

Europe 18%North America

10%

Others 9%

Middle East 13%

24

Business

Strategy

Risk

Management

An integrated solution provider with strengthening capabilities in:

� Core portfolio management

� Portfolio acquisition and merger

� Trading

� Servicing

� Focus on high demand of young, fuel efficient, new technology

aircraft

� Balanced customer base, geographical spread and staggering

leasing periods

� Best-in-class risk management processes and credit risk team

Aircraft Leasing (cont’d)

Financing

Strategy

� Prudent approach, low corporate leverage of around 70%

� Diversify funding source and location. Matching lease and

debt maturity as close as possible

� Aim to achieve public investment grade credit rating

25

Q&A Session