National Grid Transco. Acquisition of Crown Castle UK

Transcription

1 National Grid Transco Acquisition of Crown Castle UK

2 Roger Urwin Chief Executive

3 Strategic rationale Group strategy focused on network management Gridcom totally consistent with strategy Crown Castle UK acquisition represents ideal expansion Creates principal independent operator

4 Overview Cash consideration of 1.1bn High quality network infrastructure business with low risk profile Cashflow and earnings enhancing Integration with Gridcom provides value creation in growing markets Contributes to National Grid Transco s growth prospects Financial flexibility maintained

5 A strong management team Peter Abery to be CEO of the enlarged business Steven Marshall appointed COO CFO and key Crown Castle UK management team remain in place

6 Peter Abery President & Managing Director, Crown Castle UK

7 Crown Castle UK mobile and broadcast infrastructure 1997 divisional revenue split 2003 divisional revenue split 60% 40% Broadcast transmission Towers & sites 42% 58% 75m total revenue 233m total revenue

8 Mobile infrastructure

9 Mobile infrastructure development of market 1997 market shares 2003 market shares Independent operators c.5% Mobile operators c.95% Mobile operators 82% CCUK 8% NTL 5% NGT 3% Other independents 2% c15,000 active sites 45,000 active sites Gridcom estimates, derived from publicly available information

10 Mobile infrastructure market characteristics A market with substantial demand growth 2G infill and capacity growth and 3G network build Total tenants projected to double Further potential from fixed wireless networks and outsourcing Business model with high operational gearing Revenues underpinned by long term contracts Blue chip customer base Index-linked Recurring revenue Low customer churn

11 Crown Castle UK s mobile infrastructure business the leading independent operator c.3,500 active sites c.10,200 mobile tenants 2.9 tenants per site (2.2 in 2000) Around 4,000 additional marketable sites through BT rooftops Sites ,330 3,087 3,397 3,487 Management of Northern Ireland mobile network for T-Mobile 8% market share* Tenants ,194 8, , ,168 * Gridcom estimates derived from publicly available information

12 The combined mobile infrastructure business Active sites Marketable sites, not yet developed Tenants Tenants / tower Market share* As at 31 December 2003 * Gridcom estimates derived from publicly available information Crown Castle UK 3,487 4,000 10, % Gridcom 1,405 5,000 2, % Combined 4,892 9,000 12, % Integration will provide significant value creation opportunities

13 Broadcast transmission infrastructure

14 Broadcast industry structure Marketing Platform Radio Analogue TV Digital TV Freeview BBC Sky CCUK Content Provider BBC Comm l Radio BBC ITV/C4/5 BBC1 ITV1 Ch5 BBC Sky Others Licence Holder BBC NTL/GWR BBC ITV/C4/5 BBC ITV + C4 C5 SDN BBC CCUK CCUK Infrastructure Provider CCUK NTL CCUK NTL CCUK NTL NTL CCUK CCUK CCUK

15 Edward Astle Group Director

16 A natural extension of NGT s core skills NGT skills Electricity Mobile Broadcast Site planning Site acquisition Planning / consents / way leaves Construction / project management Network management Asset management Regulatory management

17 Financial performance For the 12 months ended 31 December ( m) 200 Revenues EBITDA (1) (4) Operating profit (1)(2) EBITDA Capex (1)(3) 2001 (1) Adjusted to exclude management fees to CCIC and the cost of share options (2) Excludes goodwill amortisation (3) Normalised to exclude access payments to BT (4) 37m from Broadcast and 64m from Towers & Sites 8 Crown Castle UK Acquisition price represents 2003 EV / EBITDA multiple of 11x

18 Value creation Acquisition price covered by DCF of existing business excluding the benefits of synergies Price substantially underpinned by existing long term contracts with blue chip customers Integration savings of 18m pa Revenue growth opportunities Immediately cash flow enhancing EPS enhancing in first full financial year Premium return above WACC

19 Summary Cash consideration of 1.1bn High quality network infrastructure business with low risk profile Cashflow and earnings enhancing Integration with Gridcom provides value creation in growing markets Contributes to National Grid Transco s growth prospects Financial flexibility maintained

20 Cautionary statement This material contains certain statements that are neither reported financial results nor other historical information. These statements are forwardlooking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Because these forward-looking statements are subject to assumptions, risks and uncertainties, actual future results may differ materially from those expressed in or implied by such statements. Many of these assumptions, risks and uncertainties relate to factors that are beyond National Grid Transco's ability to control or estimate precisely, such as delays in obtaining or adverse conditions contained in regulatory approvals, competition and industry restructuring, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in energy market prices, changes in historical weather patterns, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, the availability of new acquisition opportunities or the timing and success of future acquisition opportunities. Other factors that could cause actual results to differ materially from those described in this material include the ability to integrate the US and UK businesses acquired by or merged with National Grid Transco or to continue to realise the expected synergies from such integrations, the failure for any reason to achieve reductions in costs or to achieve operational efficiencies, unseasonable weather impacting on demand for electricity and gas, the behaviour of UK electricity market participants on system balancing, the timing of amendments in prices to shippers in the UK gas market, the performance of National Grid Transco's pension schemes and the regulatory treatment of pension costs, the impact of any potential separation and disposal by National Grid Transco of any UK gas distribution network(s) and any adverse consequences arising from outages on or otherwise affecting energy networks owned and/or operated by National Grid Transco. For a more detailed description of these assumptions, risks and uncertainties, together with any other risk factors, please see National Grid Transco's filings with the United States Securities and Exchange Commission (and in particular the Directors Operating and Financial Review section filed with its most recent Annual Report on Form 20-F). Recipients are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of publication of this material. National Grid Transco does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of publication of this material.