Aurizon Holdings Ltd. · ASX:AZJ
Aurizon — QR National — Macquarie 12th Annual Australia Conference (May 2011)
26 slides from Aurizon's conference presentation, May 4, 2011
Slide 1: QR National - a story of transformation, reform and growth
QR National - a story of transformation, reform and growth Macquarie 12th Annual Australia Conference Lance Hockridge Managing Director and CEO 4 May 2011
Slide 2: Important Notice
Important Notice Reliance on third party information This Presentation was prepared by QR National Limited (ACN 146 335 622) (“QR National”). This Presentation may contain information that has been derived from publicly available sources that have not been independently verified. No representation o
Slide 3: QR National – a story of transformation, reform and growth
QR National – DRAFT a story of transformation, reform and growth 1 A new era for Australia’s largest rail freight business 2 Creating value through business transformation and reform 3 Leveraged to the resources sector and generational growth 3
Slide 4: QR National – a story of transformation, reform and growth
QR National – DRAFT a story of transformation, reform and growth 1 A new era for Australia’s largest rail freight business 2 Creating value through business transformation and reform 3 Leveraged to the resources sector and generational growth 4
Slide 5: Australia's largest rail freight business
DRAFT Australia’s largest rail freight business QRN QRNAbove Above Rail Rail Freight Footprint Freight Footprint Queensland QRN QRN Manage Manage & & Operate Operate DARWIN bulk, QRN QRN Do NotOperate Don’t Operate regional freight & QR National’s Business Profile intermodal FY10A pro forma Cairns R
Slide 6: Exposed to booming Australian resources
DRAFT Exposed to booming Australian resources 85% revenue derived from Australian resources QR National Other Commodity Mix Agricultural 2.5% (by pro forma revenue - FY10) Products 12.5% Mining & Industrial Inputs 7% Coal Iron Ore 58.5% 8.3% Bulk Mineral Commodities 11.2% 6
Slide 7: Australia's largest IPO in over a decade
DRAFT Australia’s largest IPO in over a decade Strong Share response to VR Price $600m Jellinbah Program $ GAPE contract announced 3.7 5492.836 Inclusion in Earnings guidance S&P/ASX indices 5292.836 on Qld weather 3.5 impact HY 5092.836 Results 3.3 4892.836 Cyclone Yasi ASX debut impact announced M
Slide 8: An IPO with global investment interest
DRAFT An IPO with global investment interest Listed on ASX in Nov 2010 as a top 50 company with a market cap of $6.4b Qld Government retain 33.7% shareholding March inclusion in the S&P/ASX 100 and S&P/ASX 200 indices Market capitalisation of ~$8b as at early May Rest of World, Asia, 4.90% 0
Slide 9: Life as an ASX listed company has brought new opportunities
Life as an ASX listed company has brought DRAFT new opportunities Will help to drive improved commercial outcomes Greater freedom to advance our transformation program Greater scope to pursue investment opportunities outside Queensland What has changed More options available to us in funding
Slide 10: and a new focus on delivering shareholder value
and a new focus on delivering DRAFT shareholder value A primary focus on commercial returns and not market share A commercial focus on relationships with customers and improvement in operational performance Close the performance gaps with our global peers and execute our transformation program
Slide 11: Smooth transition to privatisation
DRAFT Smooth transition to privatisation Smooth transition from Government ownership to ASX listed entity Safety performance continues to improve 41% improvement in LTIFR for calendar year 2010 LTIFR at March 3.7 (per million hours worked) Transformation initiatives are gaining traction
Slide 12: Solid first half performance
DRAFT Solid first half performance Underlying EBITDA of $446 million up 17% Underlying EBIT of $226 million up 31% Statutory profit of $278 million up >100% Coal volumes of 99.6mt are broadly in line with HY10 despite record rainfall in Q2 12
Slide 13: Strong focus on revenue quality uplift
DRAFT Strong focus on revenue quality uplift Revenue quality uplift in new & renegotiated coal contracts in Coal Coal contracts announced in HY11 Jellinbah Resources – up to 5.1mta to the Port of Gladstone Peabody Energy – up to 9mta to DBCT Coal contracts announced since 31 December 2010
Slide 14: Rapid recovery from record flooding
DRAFT Rapid recovery from record flooding All QR National systems operational West Moreton system re-opened on 28 March 2011 Work to recover infrastructure completed within days of floods receding Flood Recovery Taskforce co-ordinates recovery & maximises system-wide railings Maintenance b
Slide 15: QR National - a story of transformation, reform and growth
QR National - DRAFT a story of transformation, reform and growth 1 A new era for Australia’s largest rail freight business 2 Creating value through business transformation and reform 3 Leveraged to the resources sector and generational growth 15
Slide 16: Creating value through internal reform and business growth
Creating value through internal reform DRAFT and business growth Business Growth Internal Reform New Volume / Value through: Improvements through Efficiency Programs & Retaining our leadership position and leveraging the Integrated Operating Model in: continued growth in the Coal market Capital
Slide 17: Transformation gaining traction
DRAFT Transformation gaining traction Enterprise wide projects Key results 41% reduction in LTIFR over calendar year 2010 – now 3.7 (per million hours World class safety worked) Safety Interactions progressing toward target at 6,000 per month Established Safety, Health and Environment communit
Slide 18: Voluntary Redundancy Program
DRAFT Voluntary Redundancy Program Voluntary Redundancy program announced in February 2011 3,500 employees in scope including head office, administration and shared services to ensure alignment of costs and productivity to benchmark levels Part of cultural change towards performance based orga
Slide 19: Business growth will underpin future employment
Business growth will underpin DRAFT future employment Positioning the company for long term growth and sustainable success We need a highly skilled workforce to deliver on our growth plans Requires an ongoing commitment to recruit the right people and continue to develop the skills of our work
Slide 20: Improving our focus on customer service
DRAFT Improving our focus on customer service We serve 22 major customers in the coal markets in Queensland and New South Wales And many hundreds of customers in our Freight businesses We are committed to improving our service delivery in all markets Significant improvements in service perfo
Slide 21: QR National – a story of transformation, reform and growth
QR National – DRAFT a story of transformation, reform and growth 1 A new era for Australia’s largest rail freight business 2 Creating value through business transformation and reform 3 Leveraged to the resources sector and generational growth 21
Slide 22: Highly leveraged to global growth sectors
DRAFT Highly leveraged to global growth sectors Coal Iron ore Other major commodities Global thermal/metallurgical coal consumption Global … crude steel consumption Global other bulk commodities consumption Kilo Quadrillion BTU Million Tonnes Tonnes 200 1,800 50,000 +40% +34% 150 +31% 40,000 1,200 1
Slide 23: Strong demand growth in global coal markets
DRAFT Strong demand growth in global coal markets QRN’s track record of coal haulage growth Global coal import demand – 2005 to 2015 Note: Above data is calendar year data Source: Australian Commodities, ABARE, March 2010. The above data is calendar year data Source: Australian Commodities, ABARE, M
Slide 24: Positioned for growing iron ore demand
DRAFT Positioned for growing iron ore demand Global iron ore imports Growth opportunities Iron Ore – 2005 to 2015 Iron ore demand is a key driver of expected future growth Heads of agreement for 14mtpa with two key customers in the Mid West contestable iron ore markets in Western Australia Pla
Slide 25: Australia's freight task expected to double over next 20 years
Australia’s freight task expectedDRAFT to double over next 20 years Australia’s domestic freight growth, 1961 - 2050 SOURCE: IBIS World (2008) 25
Slide 26: Questions
QR National - a story of transformation, reform and growth Macquarie 12th Annual Australia Conference Questions
QR National — Macquarie 12th Annual Australia Conference (May 2011) on 6ix