Atlas Arteria · ASX:ALX
Atlas Arteria — FY2021 Earnings Presentation
47 slides from Atlas Arteria's earnings presentation, Feb 24, 2022
Slide 1: Results Presentation for the 12 months ending 31 December 2021
RESULTS PRESENTATION for the 12 months ending 31 December 2021 24 February 2022
Slide 2: Important Information
IMPORTANT INFORMATION Disclaimer Forward Looking Statements No Offer The information in this presentation is given in good faith This presentation may contain forward-looking statements This presentation does not constitute an offer to sell, or the and derived from sources believed to be accurate at
Slide 3: Contents
CONTENTS KEY HIGHLIGHTS FINANCIAL PERFORMANCE OUTLOOK APPENDICES Atlas Arteria > Results Presentation for the 12 months ending 31 December 2021 > 3
Slide 4: Key Highlights
KEY HIGHLIGHTS Strong financial performance and continued delivery against strategy Atlas Arteria > Results Presentation for the 12 months ending 31 December 2021 > 4
Slide 5: 2021 Highlights
2021 HIGHLIGHTS H2 distribution Strong weighted guidance of average traffic up Completion of the 20.5 cps 1 18.6% in 2021 vs 2020 Warnow Tunnel capital restructure leading to a record led by record levels of traffic at APRR during H2 36.0 cps distribution for the 2021 year Construction of RCEA Perfo
Slide 6: 2021 Financial Overview
2021 FINANCIAL OVERVIEW Strong performance reflects recovery at APRR over the European summer which continued into Autumn 2021 Traffic 2021 Toll Revenue1,2 2021 EBITDA1,2 Revenue Contribution Business Atlas Arteria VS 2020 VS 2019 VS 2020 VS 2019 VS 2020 VS 2019 APRR 91% 19.5% (5.6%) 17.5% (2.6%) 22
Slide 7: Atlas Arteria Distributions
ATLAS ARTERIA DISTRIBUTIONS Record distribution guidance for Atlas Arteria H2 2021 distribution guidance of 20.5 cps Atlas Arteria Distributions – by period earned (cps) H2 Guidance • Reflects the strong performance of both APRR and Earned in H2 Warnow Tunnel during the H2 2021 period Earned in H1 •
Slide 8: Record Traffic Performance at APRR
RECORD TRAFFIC PERFORMANCE AT APRR Record high traffic volumes in second half of 2021 following COVID-19 impacted first half APRR Traffic Healthy trade recovery1 Excess household savings2 Heavy Vehicle VKT France Spain Heavy Vehicle VKT Actual 12-month moving average, 2010 = 100 Light Vehicle VKT 18
Slide 9: RCEA/A79 Project Update
RCEA/A79 PROJECT UPDATE Growing the network and improving safety for our customers Project Overview Project Location • RCEA is a key East-West transversal link from Royan on the Atlantic coast to the Rhone Valley and beyond towards Germany, Switzerland and Italy Paris Toul Troyes • On an average day
Slide 10: Warnow Traffic Near Pre-COVID Levels Over Summer
WARNOW TRAFFIC NEAR PRE-COVID LEVELS OVER SUMMER Traffic resilient and recovered quickly post strict lockdowns in early 2021 Warnow Tunnel Traffic Case counts and daily traffic Trips COVID cases. Germany 1.3 1.4 18,000 Lockdowns Fifth COVID wave, 70,000 1.3 1.3 Trips, seven-day average 1.2 ‘2G’ rest
Slide 11: Traffic Recovery Continues at Dulles Greenway
TRAFFIC RECOVERY CONTINUES AT DULLES GREENWAY Progressive improvement in traffic throughout 2021 Dulles Greenway Traffic Mobility recovery Peak and off-peak traffic Retail and Recreation Peak trips Total trips Percent change from same month 2019 Workplaces Off-peak trips Google mobility index – 7-da
Slide 12: Sustainability Achievements in 2021
SUSTAINABILITY ACHIEVEMENTS IN 2021 Atlas Arteria achieved a APRR ranked 2nd in the Atlas Arteria ranked 7th out Atlas Arteria rated AA in B rating in GRESB’s of 169 peers by Sustainalytics European motorway sector the MSCI ESG Ratings Infrastructure Public Disclosure by GRESB assessment with a scor
Slide 13: Sustainability Priorities for 2022
SUSTAINABILITY PRIORITIES FOR 2022 CUSTOMERS ENVIRONMENTAL SAFETY OUR PEOPLE & COMMUNITY STEWARDSHIP Headline • Lost time injury frequency rate1 • Maintain our 40% commitment • Establish a baseline customer • 25% reduction in scope 1 and 2 targets target for large businesses ≤3; to gender balance an
Slide 14: Financial Performance
FINANCIAL PERFORMANCE Strong financial performance leads to record distribution guidance Atlas Arteria > Results Presentation for the 12 months ending 31 December 2021 > 14
Slide 15: Capital Management
CAPITAL MANAGEMENT Disciplined balance sheet management facilitating pass through of underlying business cashflow to securityholders • Objective: Dual focus on cash flow and balance sheet to enable flexibility in funding for future growth Maintaining balance − Atlas Arteria corporate balance sheet h
Slide 16: Atlas Arteria Cashflow for H2 2021
ATLAS ARTERIA CASHFLOW FOR H2 2021 APRR dividends to Atlas Arteria (€m) Corporate operational cashflows (A$m) Cash balance (A$m) 149.2 156.8 4.2 0.8 149.2 127.2 (10.7) (2.0) 105.3 104.0 97.8 (22.0) 133.2 133.8 (1.2) (6.3) (148.6) Closing cash balance H1 1021 APRR consol NPAT Remove net consol adjust
Slide 17: APRR Financial Performance
APRR FINANCIAL PERFORMANCE Strong traffic throughout the second half contributed to record profits €m (excluding construction revenue & expenses under IFRIC 12) 2021 2020 % change • Revenues supported by increased traffic, toll price increases, and €27m from the integrated Fulli business Traffic (VK
Slide 18: APRR Capital Expenditure Program
APRR CAPITAL EXPENDITURE PROGRAM Investing to grow the footprint and improve customer experience APRR Capital Expenditure Program • Capex projects continued during the year • Projects completed: − All projects progressing well and on track for Paris 1 Creation of the A71 ‘Montmarault’ intersection c
Slide 19: APRR Group Financial Position
APRR GROUP FINANCIAL POSITION APRR strong balance sheet rated A- with a stable outlook APRR Group debt maturity profile APRR has significant balance sheet as at 31 December 2021 (€m)1 flexibility to support growth Rating A- Stable Outlook (S&P and Fitch) Sources of Debt • Rated A-, with a stable out
Slide 20: Warnow Tunnel Financial Overview
WARNOW TUNNEL FINANCIAL OVERVIEW Financial performance impacted by COVID-19 movement restrictions, while the restructured balance sheet releases cash flows €m 2021 2020 % chg • Traffic and revenue impacted by strict lockdowns in H1 2021 Traffic (m) 4.4 4.6 (4.3%) • A 2.5% increase in the average eff
Slide 21: Dulles Greenway Financial Overview
DULLES GREENWAY FINANCIAL OVERVIEW Financial performance improved, business remains supported with good liquidity US$m (excluding construction revenue & expenses under IFRIC 12) 2021 2020 % chg • Increased operating revenues reflect improved traffic performance and a 5.3% increase in off-peak toll T
Slide 22: Atlas Arteria Income Statement
ATLAS ARTERIA INCOME STATEMENT Improved profitability reflecting increase in share of net profits in associates A$m 2021 20201 % Chg Revenue and other income Increase driven by higher Dulles Greenway toll revenue − Toll revenue 99.5 95.3 4% as a result of higher traffic and increased toll rates offs
Slide 23: Impact of Inflation on the Business
IMPACT OF INFLATION ON THE BUSINESS Inflationary environment supports toll increases and earnings, with continued reduction in borrowing costs • Toll prices at APRR, ADELAC and Warnow are directly impacted by France CPI (annual to October)1 6 Month Euribor rate inflation, with inflation rates in Fra
Slide 24: Outlook
OUTLOOK Focus on value creation through a clear and simple strategy Atlas Arteria > Results Presentation for the 12 months ending 31 December 2021 > 24
Slide 25: How Is Atlas Arteria Executing Its Strategy?
HOW IS ATLAS ARTERIA EXECUTING ITS STRATEGY? Strategic Framework 1 Reduce legacy complexity to maximise our value Key Strategic Outcomes • Capital restructure at Warnow Tunnel diversifies Atlas Arteria’s sources 2 Maximise operational efficiencies in existing businesses of cash flow • Developing a l
Slide 26: Attractive Investment Proposition
ATTRACTIVE INVESTMENT PROPOSITION Strong growth potential within and external to the current portfolio A uniquely experienced team and culture, with a proven track record of executing complex multi-party transactions to unlock value Resilient balance sheet with good liquidity Strong distribution yie
Slide 27: The European Opportunity
THE EUROPEAN OPPORTUNITY Outlook for growth in Europe remains strong Growth Projects for APRR on Existing Network Opportunity Pipeline • Positive dialogue with the French Government • Opportunities for APRR to develop new toll at all levels focused on their: road concessions − road development objec
Slide 28: The US Opportunity
THE US OPPORTUNITY Performance at the Greenway is currently constrained, but there remains opportunity to release value The Current Situation The Opportunity Traffic has continued to improve in peak-periods, in line with the Gradual return in workplace mobility recovery in workplace mobility Financi
Slide 29: Key Priorities and Outlook
KEY PRIORITIES AND OUTLOOK ATLAS ARTERIA APRR AND ADELAC WARNOW TUNNEL DULLES GREENWAY • Focus on opportunities • Freedom in movement and • Long-term traffic growth • Steady return to the office to create sustainable excess household savings expected to stabilise supports traffic growth, cash flows,
Slide 30: Thank You Q&A
THANK YOU Q&A Contact for investors Australia: 1800 621 694 International: +61 (0)438 493 692 investors@atlasarteria.com Atlas Arteria > Results Presentation for the 12 months ending 31 December 2021 > 30
Slide 31: Appendix A: Additional Financial Information
APPENDIX A Additional Financial Information Atlas Arteria > Results Presentation for the 12 months ending 31 December 2021 > 31
Slide 32: Atlas Arteria Consolidated Balance Sheet
ATLAS ARTERIA CONSOLIDATED BALANCE SHEET As at As at Statutory accounts 31 Dec 2021 31 Dec 20201 A$m Current assets 245.2 267.6 Investments in associates 2,591.8 2,685.4 Tolling concessions 2,101.4 2,064.3 Goodwill 13.7 14.1 Other non-current assets 267.1 237.5 Total assets 5,219.2 5,268.9 Current l
Slide 33: Proportionate EBITDA by Business
PROPORTIONATE EBITDA BY BUSINESS APRR 100% % % Dulles Greenway 100% % % (€m) 2021 2020 change 2019 change (US$m) 2021 2020 change 2019 change Traffic (VKTm) 23,195 19,413 19.5% 24,581 (5.6%) Traffic (m) 11.6 10.2 13.3% 17.8 (35.1%) Operating revenue 2,569.2 2,169.2 18.4% 2,611.0 (1.6%) Operating rev
Slide 34: Appendix B: About the Business
APPENDIX B About the Business Atlas Arteria > Results Presentation for the 12 months ending 31 December 2021 > 34
Slide 35: The Atlas Arteria Business
THE ATLAS ARTERIA BUSINESS Atlas Arteria Portfolio Virginia, United States Luxembourg Dulles Greenway European HQ Rostock, Germany APRR ADELAC DULLES GREENWAY WARNOW TUNNEL Warnow Tunnel Ownership: 31.14% Ownership: 31.17% Ownership: 100%2 Ownership: 100% 2,318km motorway 20km commuter road 22km com
Slide 36: APRR Connecting Paris with Lyon and Central/Eastern France
APRR CONNECTING PARIS WITH LYON AND CENTRAL/EASTERN FRANCE An efficient, safe and cost effective network for customers Comparison between average tolls on APRR versus rest of France1 Paris Toul Stuttgart Troyes Germany 75 Orléans Mulhouse Cosne-Cours-sur-Loire Dijon Euro cents per VKT Zurich Bourges
Slide 37: APRR
APRR Historically strong traffic and EBITDA growth with market leading margins APRR Light Vehicle Traffic APRR Heavy Vehicle Traffic APRR EBITDA & EBITDA Margin APRR LV VKT APRR HV VKT EBITDA EBITDA margin EBITDA margin (excl. operating taxes) Linear (APRR LV VKT) Linear (APRR HV VKT) 86.5 87.1 87.5
Slide 38: APRR Tariff Formula
APRR TARIFF FORMULA APRR’s predictable cashflows are underpinned by inflation-linked tolling and established regulatory regime • Stable concession regime: In place for another 14–15 years • Predictable, inflation linked toll increases: Contracted toll increase of 70% of CPI to concession end • Upsid
Slide 39: French Tax Rates
FRENCH TAX RATES The Current Tax Situation Corporate Income Tax Motorway Specific Tax Territorial economic contribution (CET) • The French Parliament approved the Finance Bill for 2022 • The French Tax Code provides for a specific tax • The territorial economic contribution (Contribution (2022 Finan
Slide 40: Warnow Tunnel
WARNOW TUNNEL Warnow’s strong recent performance underpinned by program of work on surrounding networks Warnemünde Warnow Tunnel Traffic AADT Linear (AADT) 15,000 Warnow Tunnel 13,500 AADT 12,000 4 10,500 Program of roadworks in and around Rostock Rostock 9,000 3 5 CAGR 2008–2019 = 2.5% 1 2008 2021
Slide 41: Warnow Tunnel Tariff Formula
WARNOW TUNNEL TARIFF FORMULA Warnow Tunnel toll escalation • Tolls may be escalated annually and are subject to approval by the Ministry of Energy, Infrastructure and State Development for the State of Mecklenburg-Vorpommern • Toll increases are linked to pre-tax equity IRR of the concession as outl
Slide 42: Dulles Greenway Overview
DULLES GREENWAY OVERVIEW Connecting growing, prosperous communities to connector roads and Washington DC On a stand alone basis, tolls on the Dulles Leesburg Greenway are in the mid to high end of prices On a per mile basis, the Dulles Greenway Rockville for the roads in Virginia1 offers good value
Slide 43: Dulles Greenway Earnings History
DULLES GREENWAY EARNINGS HISTORY Stable historical financial performance prior to COVID-19 Historically, surrounding network events have negatively Dulles Greenway EBITDA & EBITDA Margin impacted traffic however the current program is now complete EBITDA EBITDA Margin AADT 60,000 1 80.5 78.5 79.8 80
Slide 44: Dulles Greenway Toll Regime
DULLES GREENWAY TOLL REGIME Tolls on the Dulles Greenway are set on application by the Virginia State Corporation Commission (SCC) under the Virginia Highway Corporation Act (1988) (VHCA) • From 1 Jan 2022 onward, the SCC will determine the toll rates under the VHCA in accordance with Section §56-54
Slide 45: Atlas Arteria Summary Corporate Structure
ATLAS ARTERIA SUMMARY CORPORATE STRUCTURE AS AT 31 DECEMBER 2021 Stapled ATLAX (Australia) ATLIX (Bermuda) 13.43% 86.57% economic interest (via loans) Dulles Greenway 100% Third Party Investors Eiffage MIBL 33.71% 4.00% 62.29% Eiffage MAF/MAF2 50% + 1 share 50% – 1 share 100% Tax consolidated group
Slide 46: Appendix C: References
APPENDIX C References Atlas Arteria > Results Presentation for the 12 months ending 31 December 2021 > 46
Slide 47: Glossary of Terms
GLOSSARY OF TERMS AADT Average annual daily trips ESG Environmental, Social and Corporate Governance m millions ADELAC Autoroute des deux Lacs EV Electric Vehicles MIBL MIBL Finance Luxembourg S.à r.l. ALX Atlas Arteria EU European Union O&M Operations and Maintenance ATLAX Atlas Arteria Limited FE