Atlas Arteria · ASX:ALX
Atlas Arteria — Macquarie Atlas Roads — H1 2015 Earnings Presentation
35 slides from Atlas Arteria's earnings presentation, Aug 27, 2015
Slide 1: 2015 Half Year Results Presentation
Macquarie Atlas Roads 2015 Half Year Results Presentation 27 August 2015
Slide 2: Important notice and disclaimer
Important notice and disclaimer Disclaimer Macquarie Atlas Roads (MQA) comprises Macquarie Atlas Roads Limited (ACN 141 075 201) (MARL) and Macquarie Atlas Roads International Limited (Registration No. 43828) (MARIL). Macquarie Fund Advisers Pty Limited (ACN 127 735 960) (AFSL 318 123) (MFA) is the
Slide 3: Important notice and disclaimer
Important notice and disclaimer Japan These materials have been prepared solely for qualified institutional investors in Japan as defined under the Financial Instruments and Exchange Act of Japan (FIEA) . They do not constitute an offer of securities for sale in Japan and no registration statement h
Slide 4: Contents
Contents 01 Overview 4 Peter Trent, Chief Executive Officer 02 Financial Performance 7 Mark Goodrick, Chief Financial Officer 03 Asset Review 12 Peter Trent, Chief Executive Officer MACQUARIE ATLAS ROADS PAGE 3
Slide 5: Overview
1 Overview Peter Trent Chief Executive Officer MACQUARIE ATLAS ROADS
Slide 6: 1H15 snapshot
1H15 snapshot 1H15 delivered an improved performance across the portfolio Traffic1 Revenue1 EBITDA1 +2.3% +3.4% +8.4% 1H15 Statutory results Profit from operations: A$40.3m (1H14: A$67.9m loss) Portfolio highlights Strong performance reflective of higher traffic volumes on APRR and Dulles Greenw
Slide 7: 1H15 segmented results
1H15 segmented results Traffic, revenue and earnings increased across all assets, building on the momentum of 2014 APRR: revenue growth driven by increased traffic volumes Dulles Greenway: improved performance reflective of continued corridor traffic growth Chicago Skyway: revenue growth suppo
Slide 8: Financial Performance
2 Financial Performance Mark Goodrick Chief Financial Officer MACQUARIE ATLAS ROADS
Slide 9: Consolidated profit & loss account
Consolidated profit & loss account Statutory accounts – half year ended 30 June 2015 Half year to Half year to Revenue includes M6 Toll management fee, A$m 30 Jun 15 30 Jun 14 interest income and Warnow Tunnel services Revenue 1.7 1.0 fees Performance fees - (58.2) 100% of 2014 performance fee e
Slide 10: Consolidated balance sheet
Consolidated balance sheet Statutory accounts – as at 30 June 2015 As at As at Investments in associates includes APRR A$m 30 Jun 15 31 Dec 14 and Dulles Greenway accounted for using Current assets 44.8 31.0 the equity method Investments in associates 815.6 835.4 Current liabilities includes the
Slide 11: MQA cash flow summary
MQA cash flow summary Available cash (A$m) Half year to Half year to Distributions from Financière Eiffarie (FE) of 30 Jun 15 30 Jun 14 €28.6m in March 2015 (€25.6m in March 2014) Opening balance – 1 January 30.1 17.7 US$25.0m (A$32.3m) received following ITR Distribution from APRR 39.8 39.6 sal
Slide 12: MQA distributions
MQA distributions 2H15 distribution guidance of 10.0 cps Expect to declare mid September 2015 with payment by September end Wholly from MARIL, anticipated to include foreign dividend and capital return components1 Cash reconciliation A$m Pro-forma available cash 30.72 Add: September 2015 receipt
Slide 13: Asset Review
3 Asset Review Peter Trent Chief Executive Officer MACQUARIE ATLAS ROADS
Slide 14: APRR 1H15 results
APRR 1H15 results Traffic Revenue EBITDA1 +2.2% +2.7% +8.3%2 10.4bn VKT €1,056.8m €791.1m Continued traffic growth across Revenue growth exceeded High quality earnings with light and heavy vehicles traffic growth despite absence ongoing operating cost controls Underpinned by an improving of
Slide 15: APRR French macro environment
APRR French macro environment Lending growth to non-financial corporations since mid 2014 implies expansion of business activity Loans to non-financial corporations (annual growth rate)1 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% (1.0%) Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 1. Bank of France: August 2
Slide 16: APRR Traffic analysis
APRR Traffic analysis Increased traffic volumes across light and heavy vehicles reflect improving economic outlook Light vehicles – half yearly growth on pcp Total – half yearly growth on pcp 3.0% 3.0% 2.3% 2.0% 2.2% 1.0% 2.0% 0.0% 1H12 2H12 1H13 2H13 1H14 2H14 1H15 (1.0%) 1.0% (2.0%) Heavy vehicles
Slide 17: APRR Traffic correlation
APRR Traffic correlation Light vehicle traffic remains correlated to real household disposable income Heavy vehicle traffic remains correlated to French manufacturing and imports APRR light vehicles and economic indicators1,2 APRR heavy vehicles and economic indicators1,2 110 110 105 105 100 100 95
Slide 18: APRR Revenue segmentation
APRR Revenue segmentation Continued revenue growth despite absence of 2015 toll increase 1H15 revenue increased by 2.7%, driven by traffic growth and higher average tolls Half year revenue breakdown (€m) Half year financial performance (€m)1 2 1,600 74.9% 80.0% 69.0% 70.6% 70.4% 71.0% 67.7% 1,400
Slide 19: APRR Ongoing initiatives
APRR Ongoing initiatives Ongoing initiatives to automate toll collection • Automated transaction reached 96.2% in 1H15 with ETC accounting for over 55% of total transaction – Automation rate steadily improved since acquisition • Continuing commitment to cost control and operational improvement Toll
Slide 20: APRR Concession contract amendments
APRR Concession contract amendments APRR and AREA concession contracts amended via formalised agreement with the French State Amendments formalised 23 August 2015. Significant measures include: Stimulus Package & Supplemental toll Changes to key concession extension adjustments contractual terms
Slide 21: APRR Capital projects
APRR Capital projects Continue to focus on maintenance and expansion of the existing network Since 2006 approximately €3.5bn has been spent to grow, improve and maintain the network Capital expenditure guidance (real as at December 2014) – 2015-2019: average €430m p.a. (includes 2014-2018 manage
Slide 22: APRR Financing costs
APRR Financing costs Opportunity for continued reduction in financing costs €275m loan facility signed with European Investment Bank (EIB) in June 2015 (7 year, EIB rate +0.38%)1 – €170m drawn on 30 June 2015 APRR rated BBB+ (Stable outlook) by both S&P and Fitch Sustainable debt maturity prof
Slide 23: Dulles Greenway 1H15 results
Dulles Greenway 1H15 results Traffic Revenue EBITDA +4.3% +7.3% +7.3% 49,727 ADT US$41.0m US$32.0m Strong traffic performance Revenue growth supported by Reflects revenue growth and resulting from continued March 2015 toll increases ongoing cost control discipline corridor development and Of
Slide 24: Dulles Greenway Traffic
Dulles Greenway Traffic Positive traffic growth has continued in 2015 Dulles Greenway traffic has grown at a higher rate than the adjoining Dulles Toll Road. Non-weather affected periods show strong underlying growth trends Quarterly traffic growth (%) 6.0% 4.0% 2.0% 0% 1Q 13 2Q 13 3Q 13 4Q 13 1Q
Slide 25: Dulles Greenway EBITDA performance
Dulles Greenway EBITDA performance Higher traffic volumes and toll increases have led to consistent growth in EBITDA Improving traffic trends evident since 2012 SCC toll review expected to conclude during 2H15 Distribution outlook: no distributions expected before 2019 EBITDA (US$m) vs traffic
Slide 26: Dulles Greenway Corridor
Dulles Greenway Corridor Corridor traffic expected to continue to increase with regional growth Loudoun county continues to be the fastest growing county in northern Virginia, attracting over 40% of new housing starts in the region in 2014 Continued traffic growth in off-peak periods Dulles Gree
Slide 27: Other assets
Other assets 1H15 results Chicago Skyway Warnow Tunnel Traffic Revenue EBITDA Traffic Revenue EBITDA +0.4% +14.9% +14.5% +2.8% +5.1% +0.3% Traffic impacted by moderate elasticity to toll Traffic benefited from increased tourist usage increases, single lane closures on ramps and improved weather
Slide 28: Summary
Summary Delivering value through improved portfolio performance Ongoing improvement to APRR performance expected through increased traffic volumes, effective operating cost controls and reduction in financing costs Conclusion of agreements with the French State Strong regional growth in Dulles
Slide 29: Questions
4 Questions MACQUARIE ATLAS ROADS
Slide 30: Appendix
A Appendix MACQUARIE ATLAS ROADS
Slide 31: Cash flow: APRR to MQA shareholders
Cash flow: APRR to MQA shareholders Cash flow: APRR to MQA shareholders Eiffarie/Financière Eiffarie APRR dividend A add APRR tax instalments to FE B add Other1 C less Eiffarie net interest D less FE tax payments/provisions E Distributable cash F=A+B+C–D–E less Debt repayment G Cash available to Eif
Slide 32: Cash flow: APRR to MQA shareholders (cont'd)
Cash flow: APRR to MQA shareholders (cont’d) Cash flow: APRR to MQA shareholders Eiffarie/Financière Eiffarie (€m) 2H13 1H14 2H14 1H15 APRR dividend 213 241 209 180 add APRR tax instalments to FE 120 196 147 181 add Other1 5 (2) (1) 412 less Eiffarie net interest (123) (118) (120) (93) less FE tax p
Slide 33: Toll formulas 2016-2023
Toll formulas 2016-2023 Toll formulas 2016-2023 • Compensation for the 2013 land tax increase via supplemental toll increases over 2016-2018; such supplements will be in addition to the existing contractual toll increase formula Supplemental toll increases (“X”) Applicable toll formula 2016 2017 201
Slide 34: MQA statutory accounts
MQA statutory accounts Statutory accounts for the half year ended June 2015 Statutory accounting MQA equity accounts all assets All assets are non-controlled assets Equity accounting Initially recognise assets at acquisition value1 P&L Account: recognise share of accounting profits/losses fr
Slide 35: Proportionately consolidated financial performance
Proportionately consolidated financial performance Actual Pro Forma Actual 6 months ended 6 months ended Change vs 6 months ended A$m 30 Jun 15 30 Jun 141 pcp 30 Jun 142 Proportionate revenue 347.0 335.4 3.4% 361.9 Proportionate operating expenses (85.5) (94.0) 9.1% (102.4) Proportionate EBITDA from
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