Transurban Group Ltd. · ASX:TCL
Transurban — Investor Presentation (May 2005)
28 slides from Transurban's investor presentation, May 2005
Slide 1: Strong Assets Providing Growing Returns
Strong Assets Providing Growing Returns May 2005
Slide 2: Disclaimer
Disclaimer The Transurban Group is a triple stapled security listed on the Australian Stock Exchange comprising Transurban Holdings Limited (ACN 098 143 429), Transurban Holdings Trust (ARSN 098 807 419) and Transurban Limited (ACN 098 143 410). The responsible entity of the Transurban Holdings Trus
Slide 3: The transport task
The transport task • Massive backlog of transport expenditure worldwide • Road congestion restricts economic growth • Governments increasingly turning to the private sector • Advanced electronic tolling creates opportunities • Private toll road industry still in in infancy
Slide 4: Toll roads as an asset class
Toll roads as an asset class • Low risk, predictable growing revenue streams • Inflation hedged • Traffic growth typically exceeds economic growth • Long–life assets
Slide 5: Who is Transurban
Who is Transurban • Listed on the Australian Stock Exchange 1996 • Formed for the Melbourne CityLink project (100% owned) • Commenced development business 2002 • 40% owner in Westlink M7 • 100% owner Hills Motorway • World leader in 100% electronic toll roads
Slide 6: Transurban transformed
Transurban transformed • One of Australia’s largest infrastructure groups • Low risk diversified portfolio of Australia’s best toll road assets • Strong cash flow and substantial debt capacity CityLink M2 WM7 100% Ownership and Ownership and 40% Ownership and Operations Operations 100% Tolling Opera
Slide 7: Melbourne CityLink
Melbourne CityLink • 22 kilometre motorway • Concession until 2034 • Toll increases 4.5% or inflation • 100% electronically tolled • Over 200 million transactions per year Freeways CityLink
Slide 8: CityLink (Interim Results)
CityLink (Interim Results) Traffic Ï 4.5% Revenue Ï 8.6% CityLink operations costs Ð 6% • Customer service transaction cost Ð 15.5%
Slide 9: Owning concession provides growth options
Owning concession provides growth options CityLink • Tullamarine / Calder Interchange – Fixing a “Black Spot” to increase traffic – Using a prepayment of Concession Notes • Discounted at 9.5% – Sharing incremental traffic revenue with State • Discount rate 11.4% (1) – Incident response taken over •
Slide 10: Westlink M7
Westlink M7 • 40 kilometre motorway • Concession until 2037 • CPI toll increases • 100% electronically tolled Freeways Existing Motorways Committed Motorways Planned Motorways
Slide 11: Westlink M7 — construction well advanced
Westlink M7 — construction well advanced • Over 65% complete • Contract completion date August 2006
Slide 12: Westlink M7 — Transurban contracts ahead of schedule
Westlink M7 — Transurban contracts ahead of schedule • Tolling systems in final testing • Customer service team mobilisation commenced • Marketing and customer brand launch anticipated second quarter 2005
Slide 13: Westlink M7 — strong industrial development continues
Westlink M7 — strong industrial development continues Over next 5 years almost half of Sydney’s industrial construction is expected around the M7/M4 interchange Logistics / Industrial developments: • Woolworths • Coles Myer • Blue Scope Steel • TNT • LG • Coca Cola
Slide 14: Westlink M7 — land releases will drive growth
Westlink M7 — land releases will drive growth M2 Westlink M7 New Land Release M4 M5
Slide 15: M2 - Hills Motorway
M2 - Hills Motorway • 20 kilometre motorway • Concession until 2042 • Toll increases 4.06% or inflation • Hybrid toll collection
Slide 16: Sydney's premier toll road corridor
Sydney’s premier toll road corridor Hills Motorway / Westlink M7 • Integrating 60 kilometres of vital tollroad infrastructure • Creating a crucial transport and freight connection through Australia’s fastest growing corrior
Slide 17: Hills Motorway
Hills Motorway • Bid 1.47 Transurban securities for each Hills Security – Increased distributions in FY06 to 45 cents • Incentive of 25 cents once 80% reached • Increased 2006 Transurban distribution by 5 cents to 50 cents once 100% achieved • Recommended by Hills Board
Slide 18: Hills Motorway
Hills Motorway • Important feeder to Westlink M7 • Operation synergies and cost savings between the two roads • Increased revenue and less leakage from bringing forward full electronic tolling And hence ― Value accretive for both Hills and Transurban holders • As in all bids exhibiting price discipl
Slide 19: Bringing forward full electronic tolling
Bringing forward full electronic tolling High speed tolling Source – Hills Motorway Interim Results
Slide 20: Merged Group — enhanced distributions
Merged Group — enhanced distributions Significantly higher distributions FY06 • Substantially tax deferred 60 June December 28% 50.0 50 increase Distribution per Security (cents) 40 39.0 26.0 30 20.0 20 10 24.0 19.0 0 TCL - Current Guidance Post Merger - 100% ownership
Slide 21: Merged Group — strong distribution profile
Merged Group — strong distribution profile • Strong cash flow and substantial debt capacity • Targeting maintenance of A- rating* enabling – 50 cents distribution FY06 (ICR 2.5x) – 54 cents distribution FY07 (ICR 2.3x) – Distribution growth continues beyond 2007 supported by Westlink M7 free cashflo
Slide 22: Capital management
Capital management • Increasing distributions • IRR accretive • Balancing current yield and long term valuations • Other initiatives – Tax Case win helps nature of distributions
Slide 23: Distributions
Distributions 02/07/01 02/07/02 02/07/03 01/07/04 01/07/05 01/07/06 01/07/07 30/06/08 70 $9.00 60 $8.00 54.0 50.0 50 $7.00 Distributions (Cents per Share) Share Price (Dollars per Share) 40 $6.00 35.0 30 $5.00 25.5 20.0 20 $4.00 10 $3.00 5.3 0 $2.00 2001 2002 2003 2004 2005 2006 2007 2008 Distributi
Slide 24: Growth opportunities - Australia
Growth opportunities - Australia • North / South Tunnel (Brisbane) • M4 East (Sydney) • CityLink enhancements • F3/M2 (Sydney) • West Gate Duplication (Melbourne) • Northern Tunnel (Melbourne) • Pacific Highway (NSW)
Slide 25: Growth opportunities - International
Growth opportunities - International • Focus UK and US – No entrenched players – Low sovereign risk – Language and rule of law – similar US • Private ownership of toll roads expanding quickly • HOT lane projects – Virginia • Capital Beltway – preferred • I 95
Slide 26: Conclusion
Conclusion CityLink – cornerstone asset • Continued strong growth • Active management extracting increasing value • enhancements to add traffic / revenue Westlink M7 • Construction progress excellent • Transurban tolling contract ahead of schedule • Corridor growth exceeding expectations Hills Motor
Slide 27: transurban
transurban delivering sustainable growth
Slide 28: Brisbane
Brisbane Freeways/Motorways Tolled Bridges/ Existing Motorways Planned Motorways Potential Motorways Tunnels