Slide 1: Transurban Investor Day 2024
Transurban Investor Day 2024 6 May 2024 AirportlinkM7, Clem7 and Inner City Bypass (Brisbane)
Slide 2: Disclaimer and basis of preparation
Disclaimer and basis of preparation This publication is prepared by Transurban Holdings Limited (ACN 098 143 429), Transurban International Limited (ACN 121 746 825) and Transurban Infrastructure Management Limited (ACN 098 147 678; AFSL 246 585) as the responsible entity of Transurban Holding Trust
Slide 3: Agenda
Agenda 4 16 20 26 28 Strategy and Long-term Capital strategy and Future Question and growth growth trends business efficiency direction answer session Michelle Jablko, Darryn Paterson, Henry Byrne, Michelle Jablko, Chief Executive Officer General Manager, Chief Financial Officer Chief Executive Offi
Slide 4: Strategy and growth
Strategy and growth Transurban
Slide 5: Opportunity to grow beyond existing concessions
Opportunity to grow beyond existing concessions Great foundations – Traffic growth Road transport world-class supported by long-term infrastructure needed for infrastructure macro trends growing cities Strong opportunity Further possible Innovation around pipeline in Australian opportunities in Nort
Slide 6: Opportunity and delivery pipeline
Opportunity and delivery pipeline EXPECTED NEXT BEYOND REGION PROJECTS IN DELIVERY AND POTENTIAL OPPORTUNITIES1 DELIVERY4 5 YEARS 5 YEARS Sydney Sydney Gateway2 2024 M7-M12 Integration Project 2026 Potential toll reform opportunities Potential opportunities around Western Harbour Tunnel Potential op
Slide 7: Evolving the approach
Evolving the approach Unlocking growth in Australia and other markets by evolving the approach A shifting external landscape Strategy and purpose • Customer, community and Strong and clear customer value proposition government expectations Trusted government partnerships • Cost of capital • Governme
Slide 8: Strategy and purpose
Strategy and purpose Bringing together the needs of stakeholders Helping cities grow Making lives easier Mobility solutions Customers Governments Investors Providing clear value on and off the road Delivering mobility solutions to support Growing long-term sustainable growing cities as a trusted par
Slide 9: Strong customer value proposition
Strong customer value proposition Demonstrating greater value to customers to enable the right to grow Customer value – key insights Opportunity to demonstrate additional value to customers • Customers have indicated six key areas of highest value to their experience 1 Key focus area Opportunity Roa
Slide 10: Demonstrating and increasing customer value
Demonstrating and increasing customer value Opportunity to provide customers with a market-leading experience on and off the road Example of a Notification of customer journey Traffic road incident Linkt Trip Compare incident ahead via Linkt app to tool and Google inform choice Maps provide of trave
Slide 11: Trusted government partnerships
Trusted government partnerships Lifecycle approach, finding solutions and focusing on customers and communities Delivery Operations Delivering outcomes to benefit communities and Operational delivery to enhance customers’ experience stakeholders Near-term opportunities Near-term opportunities Consis
Slide 12: NSW Toll Review
NSW Toll Review Supporting the NSW Government on opportunity for reform across Sydney’s toll roads to benefit all stakeholders NSW Government – >$36bn of investment1 opportunity for toll into Sydney’s roads over the past two decades reform Independent Toll Review acknowledges NSW Government existing
Slide 13: Optimising the core business
Optimising the core business Enhancing the focus on value by driving business-wide efficiencies, enhanced productivity and re-prioritisation of capital allocation Prioritise Optimise Simplify to align with strategic focus areas to realise faster, better outcomes to enhance flexibility and efficiency
Slide 14: Continuing to grow successfully in North America
Continuing to grow successfully in North America Focus on value-accretive growth Continued growth in existing markets Leveraging Transurban’s strengths to grow beyond existing markets, with a disciplined framework for assessing new opportunities • Four-kilometre extension of 495 Express Lanes toward
Slide 15: New adjacent opportunities
New adjacent opportunities Existing and growing capability positions Transurban to enhance core business and explore adjacent opportunities Key trends Smart transport Customer expectations Connected and Sustainability autonomous vehicles Intelligent transport systems Digital tolling and mobility Sma
Slide 16: Long-term growth trends
Long-term growth trends Transurban
Slide 17: Growth of markets
Growth of markets Macroeconomic projections continue to indicate larger, denser, and wealthier futures for the cities in which Transurban operates, which are expected to drive the need for increased travel, the continued development of new roads and increased congestion Forecast traffic growth suppo
Slide 18: Sydney 2061: Increasing demand
Sydney 2061: Increasing demand Estimated average volumes – AM peak period (6am-9am) for weekdays1 Demand builds across Estimated change in VKT from 2023 (%) the whole network 50% 40% 30% 20% 10% 0% 43% 46% -10% -20% -30% 2016 2023 2031 2041 2051 2061 Freeways & toll roads All other roads 1. Transurb
Slide 19: Sydney 2061: Decreasing speeds
Sydney 2061: Decreasing speeds Estimated average speeds – AM peak period (6am-9am) for weekdays1 Deteriorating speeds and Estimated average speed (km/h) heightened congestion without continued infrastructure investment 60 50 40 30 20 10 0 52 27 2016 2023 2031 2041 2051 2061 Freeways & toll roads All
Slide 20: Capital strategy and business efficiency
Capital strategy and business efficiency
Slide 21: Capital strategy
Capital strategy Improve business efficiency and resource allocation • Business efficiencies to align with strategic focus areas • Simplification and optimisation of operational cost base Maintain a strong balance sheet Focus areas • Capital allocation framework • Funding risk mitigation and diversi
Slide 22: Business efficiency to support growth
Business efficiency to support growth Continued focus on productivity and efficiency gains to support growth and capital allocation Opportunities identified across the operational cost base1 EBITDA margins continue to be a Spend category % 1H24 operational cost base Opportunity focus • Operating mod
Slide 23: Capital allocation framework
Capital allocation framework Balancing capital allocation to support investment in growth and distributions Internal capital Core growth from existing portfolio generation (price and volume growth) EBITDA growth External sources of capital • Existing debt facilities and capacity for additional debt
Slide 24: Revised Free Cash definition
Revised Free Cash definition Free Cash definition more aligned to operational performance Revised basis for calculating Free Cash from FY251 Alignment to proportional reporting Proportional EBITDA Revised basis for reporting proportional EBITDA: • Add back outcome of derivative PPA movement Increase
Slide 25: Improved predictability of Free Cash
Improved predictability of Free Cash Revised definition aligns business performance and Free Cash Key areas adjusted under the revised Free Cash definition Working Major Distribution Debt capital maintenance timing amortisation movements • Working capital movements are • Maintenance spend incurred •
Slide 26: Future direction
Future direction Transurban
Slide 27: Future direction: Markers of success
Future direction Markers of success Achieve strategic Build trust with, and provide Strong operational and objectives real value to, stakeholders financial management Continued growth in core markets to support Clear value to customers both on and off Continue to be known for operational avera
Slide 28: Q&A
Q&A Transurban
Slide 29: Supplementary information
Supplementary information Transurban
Slide 30: Historical Free Cash comparison
Historical Free Cash comparison Transparency and underlying operational performance the basis for Free Cash $m FY19 FY20 FY21 FY22 FY23 PROPORTIONAL EBITDA (AS REPORTED) 1,696 1,874 1,812 1,900 2,448 Add back major maintenance provision expense 99 121 129 142 152 (Less) major maintenance spend incur
Slide 31: Revised Free Cash definition
Revised Free Cash definition FREE CASH CALCULATION SOURCE OF INFORMATION/EXPLANATION Proportional EBITDA Maintenance expense is removed and replaced with maintenance cash expense, and mark-to-market movements in PPAs are excluded Add back transaction and integration costs related to acquisitions and
Slide 32: Previous Free Cash definition
Previous Free Cash definition FREE CASH CALCULATION SOURCE OF INFORMATION/EXPLANATION Cash flows from operating activities (refer Group Statutory accounts) Statutory Transurban Holdings Limited operating cash flow Add back transaction and integration costs related to acquisitions and Transaction and
Slide 33: Ongoing construction impacts in Sydney
Ongoing construction impacts in Sydney Impact of ongoing construction projects on Sydney traffic1 Key construction projects and Transurban assets in proximity to projects • General disruption is being observed across Transurban assets from ongoing construction projects in Sydney • Various factors th
Slide 34: Growth in North America
Growth in North America Examples in North America of markets with favourable characteristics Ontario Quebec Supporting legislation California Colorado Texas Existing PPP framework Virginia Tennessee Maryland North Carolina Population and economic growth Alabama Florida Georgia Shaded regions indicat
Slide 35: ESG investment proposition
ESG investment proposition Transurban is committed to strengthening communities through transport. Providing leadership and taking action on environmental, social and governance factors is fundamental to upholding Transurban’s values and supporting the ongoing succe ss and sustainability of the busi
Slide 36: Climate Change Framework priority areas
Climate change framework Scope 1 & 2 science-based emission reduction target: 50% reduction by 2030 Scope 1 & 2 emission reduction target: Scope 3 does not Expected initiatives to reach Net Zero Transition to zero-emission Transurban fleet; contractor targets for fuel efficiency and transition to ze
Slide 37: Glossary
Glossary Transurban
Slide 38: Glossary
Glossary TERM DEFINITION TERM DEFINITION 1H First half of a financial year (unless specified otherwise) LINKT Transurban’s retail tolling brand A25 A25 toll road M2 Hills M2 ACN Australian Company Number M4 M4 motorway AUD Australian Dollars M4-M8 M4-M8 link CAPEX Capital Expenditure CAPITAL RELEASE