58 slides from Irb Infrastructure Developers's earnings presentation, February 2023
Slide 1: Investor Presentation February 2023
Investor Presentation February 2023 India’s First Multi-National Infrastructure Company in the Highways Sector Press Release – Preferential Allotment October 2021
Slide 2: Table of Contents
Table of Contents Financial Highlights Page 2 Result Highlights Page 4 Business Overview Page 9 IRB Parent Overview Page 26 Private InvIT Overview Page 33 Public InvIT Overview Page 39 Appendix – Additional Financial Info Page 46 Appendix II – Sector Overview Page 50
Slide 3: Financial Highlights for Q3FY23
Financial Highlights for Q3FY23 • In general, WPI linked toll roads • Strong financial position: Net Debt • IRB member of India Global Compact provides a natural hedge against 101.55 Bn, 0.8x Net Debt/Equity, with UN Since July 2022 interest rate hikes (e.g., Ahmedabad strong liquidity for future Eq
Slide 4: Result Highlights
Result Highlights Private & Confidential
Slide 5: Financial Summary (Quarterly YoY)
Financial Summary (Quarterly YoY) INR in Million Total all segments Construction Segment BOT Segment Particulars Q3FY23 Q3FY22 Q3FY23 Q3FY22 Q3FY23 Q3FY22 Revenue 15,702 14,978 10,165 9,907 5,537 5,070 EBITDA 8,006 9,570 2,910 4,915 5,097 4,655 EBITDA margin 51% 64% 29% 50% 92% 92% Financial expense
Slide 6: Financial Summary (9 Months)
Financial Summary (9 Months) INR in Million Total all segments Construction Segment BOT Segment Particulars 9MFY23 9MFY22 9MFY23 9MFY22 9MFY23 9MFY22 Revenue 50,044 46,727 34,290 33,060 15,754 13,668 EBITDA 26,930 24,585 12,492 12,149 14,438 12,436 EBITDA margin 54% 53% 36% 37% 92% 91% Financial exp
Slide 7: Financial Summary – Net cash for H1FY23
Financial Summary – Net cash for H1FY23 6
Slide 8: Consolidated Financials: Strong Track Record
Consolidated Financials: Strong Track Record REVENUE (INR MN) EBITDA & MARGIN (INR MN) 53% 45% 45% 49% 69,026 70,472 31,329 31,664 33,492 54,875 63,554 27,016 64% 51% 14,978 15,702 9,570 8,006 FY 2019 FY 2020* FY 2021* FY 2022 Q3FY22 Q3FY23 FY 2019 FY 2020* FY 2021* FY 2022 Q3FY22 Q3FY23 NET DEBT &
Slide 9: Business Overview
Overview Business Private & Confidential
Slide 10: Integrated Highway Developer Connecting India by Developing World Class Highway Infrastructure
Integrated Highway Developer Connecting India by Developing World Class Highway Infrastructure Pan India presence c. 18 years c. 20% INR 600 bn+ Weighted Of Golden 10 Highway asset 11,930 lane average Quadrilateral States in India base, one of the KM residual owned and where assets largest in India
Slide 11: Owns and Manages c. 12,000 Lane KM of Roads across 10 States in India
Owns and Manages c. 12,000 Lane KM of Roads across 10 States in India India’s leading portfolio of road assets (lane KMs)1 Operational Under construction 11,930 1,616 8,400 7,903 6,457 3,085 5,362 10,314 4,400 8,400 3,923 3,249 3,232 4,510 520 598 2,361 1,998 4,818 1,852 490 4,400 2,534 2,729 2,633
Slide 12: Fully Integrated Player with In-House Design, Construction, O&M Capabilities
Fully Integrated Player with In-House Design, Construction, Operations and Maintenance Capabilities Highly evolved design capabilities In-house capabilities, with a pool of through 40+ years of experience expert workforce, to carry out EPC Use of high-grade polymer modified (Construction) and
Slide 13: Efficient O&M Practices, Employing Latest Technology, With a Strong Focus on ESG
Efficient O&M Practices, Employing Latest Technology, With a Strong Focus on ESG Technology driven maintenance regime Site level data capture Predictive analytics Timely preventive & corrective maintenance Benchmarking with global standards Real time operations, monitoring & control ESG comp
Slide 14: Supported by Marquee Financial and Strategic Investors
Supported by Marquee Financial and Strategic Investors The largest equity fund raise by a listed Indian infrastructure developer in the roads and highways sector Ownership structure post transaction Access to technical expertise, global experience and long term capital 1 ‒ Cintra brings in 50+ years
Slide 15: Only Integrated Development Platform in India Catering to Shareholders with Diverse Risk Appetite
Only Integrated Development Platform in India Catering to Shareholders with Diverse Risk Appetite Distribution1 Strategy: To Offer HAM Distribution1 assets to Public InvIT after Construction completion Holdco 16% Margin + / - WC 100% 100% BOT / TOT / HAM CONSTRUCTION Private InvIT (IRB 51%, 6 Assets
Slide 16: Approach adopted by analysts for valuation of Integrated Developer Model
Approach adopted by analysts for valuation of Integrated Developer Model Particulars Methodology Value of concession Business DCF of FCFE over concession life Value of Construction Business PE Multiple or EV/EBIDTA Value of Non core assets (Land bank and airport) Multiple on Investment Total Value o
Slide 17: Value evolution for a typical BOT Concession over its life cycle
Value evolution for a typical BOT Concession over its life cycle 16
Slide 18: Significant Improvement in Leverage Position Post Equity Infusion by GIC and Cintra
Significant Improvement in Leverage Position Post Equity Infusion by GIC and Cintra Net Debt position before and after the deal Pre deal net debt Post deal net debt Out of INR 53,470 mn equity infused as a part of the deal, INR 32,500 mn was used for deleveraging, resulting in significant improvemen
Slide 19: Current Ratings for Long Term Credit Facilities
Current Ratings for Long Term Credit Facilities IRB Infrastructure Developers Modern Road Makers Private 1 2 Limited Limited IND AA- / Stable CARE A+ / Stable Crisil AA- / Stable IRB MP Expressway Private Meerut Budaun 3 4 Expressway Limited Limited Ind AA / Stable Ind A- / Stable Pathankot Mandi IR
Slide 20: Share Price Performance
Share Price Performance DEC 2021: Cintra & GIC close IRB transaction IRB share price (rebased to 100) 600.0 DEC 2021: IRB is awarded Ganga Expressway FEB 2021: Raised INR APR 2021: Awarded 1 21.9 bn through NCD new HAM project and issuance to FPIs backed 1 new BOT project OCT 2022: Sale of VK1 HAM a
Slide 21: Projects, Spread Across India, for Optimal Risk – Return Mix
Strategic Focus: Bid for a Diversified Portfolio of BOT, TOT and HAM Projects, Spread Across India, for Optimal Risk – Return Mix 1 Bid for new assets 2 Diversify presence NHAI expected to award HAM projects to the tune of INR 4,000 bn, BOT projects worth INR Strategically expand its presence ou
Slide 22: Constantly Evolving EPC Capabilities: Moving Up the Project Complexity Value Chain
Constantly Evolving EPC Capabilities: Moving Up the Project Complexity Value Chain, Successfully Raising Funds at Crucial Junctures 1977 1995 2004 2008 2016 2017 2018 2020 2021 Length: Length: 1,168 1,234 LKM LKM Cost: INR Cost: INR 11 bn 90 bn Raised Raised INR INR 50 bn Length: Length: 9.45 bn 1,9
Slide 23: Strong Focus on Protecting the Environment and Giving Back to the Community
Strong Focus on Protecting the Environment and Giving Back to the Community Ferrovial is a sustainability champion, ranking highly in various indices… IRB has a strong focus on environment, sustainability and community, which is expected to be further strengthened through Ferrovial’s expertise Fer
Slide 24: Board Driven Robust Governance Policies
Board Driven Robust Governance Policies Policies Committees Environment policy Corporate Social Responsibility Committee Code of Conduct Risk Management Committee ESG Committee of Management Assurance ESG Commitments Human rights Policy Corporate Social Responsibility Policy Health
Slide 25: Business Responsibility and Sustainability Reporting, Mandatory for Listed Companies
Business Responsibility and Sustainability Reporting, Mandatory for Listed Companies FY23 Onward1, to Bring About Reporting Transparency Business responsibility and sustainability reporting (BRSR) is intended towards having quantitative and standardized disclosures on ESG parameters, to enable compa
Slide 26: IRB Parent Overview
Overview IRB Parent Private & Confidential
Slide 27: Strong In-house Project Design, Execution and Maintenance Capabilities
Strong In-house Project Design, Execution and Maintenance Capabilities Strong construction track Efficient project execution Ability to independently record capabilities Large equipment bank bid for large contracts In-house O&M capabilities Access to best global One of the largest fleet of Exp
Slide 28: IRB is Well Poised to Maintain Margins with Adequate Escalation Provisions
IRB is Well Poised to Maintain Margins with Adequate Escalation Provisions for Raw Material Prices Cement price (INR per bag) 273 293 250 266 258 246 246 246 250 250 234 238 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Reinforcement steel price (INR per MT) T
Slide 29: WPI Linked Toll Rates Provide Protection to Toll Cash Flows
WPI1 Linked Toll Rates Provide Protection to Toll Cash Flows in an Inflationary Environment with Increasing Interest Rates Toll rates are linked to inflation For NHAI projects that were bid for after 2008, toll rate is revised annually in April at 3% fixed rate, plus 40% of change in WPI for Dec
Slide 30: Healthy Mix of BOT, TOT and HAM Projects
Healthy Mix of BOT, TOT and HAM Projects Original S. Project cost Lane # of Project Counterparty State Concession Status No. (INR mn) KMs Lanes ( in Years) 2 BOT 1 Ahmedabad Vadodara NHAI Gujarat 48,800 987 6 25 Tolling start: January 1, 2013 projects Received Appointed Date as 2 Ganga Expressway –
Slide 31: Mumbai Pune TOT – A Crown Jewel in IRB’s Portfolio
Mumbai Pune TOT – A Crown Jewel in IRB’s Portfolio One of the busiest highway corridors in India which is a part of the Golden Quadrilateral on the Mumbai-Chennai arm Project highlights Project snapshot Project snapshot Tolling operations, maintenance and transfer of Road YCEW - 94 Km , NH-48 –
Slide 32: BOT Toll Revenue Comparative – IRB Projects
BOT Toll Revenue Comparative – IRB Projects Amount in INR mn MUMBAI - PUNE ** Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Jun 2,309 2,470 1,167 2,373 3,606 52.0% Sept 2,148 939 2,191 3,055 3,347 9.6% Dec 2,372 - 3,106 3,462 3,687 6.5% Mar 2,354 621 3,221 3,342 Total 9,182 4,031 9,68
Slide 33: IRB Private InvIT Overview
InvIT IRB Private Private & Confidential 32
Slide 34: Private InvIT: IRB Infrastructure Trust (Portfolio of 10 Assets)
Private InvIT: IRB Infrastructure Trust (Portfolio of 10 Assets) Asset location Asset overview Sr. Project cost Project Lane KM Status No. (INR mn) Karnataka 758 1 Goa Kundapur 34,770 758 PCOD achieved Maharashtra 1,151 Haryana 2 Solapur Yedeshi 15,900 395 COD achieved Rajasthan Uttar Pradesh 3 Yede
Slide 35: Strong Recovery in Toll Collection Across Projects
Strong Recovery in Toll Collection Across Projects Daily toll collection (INR mn) 62.3 63.2 55.1 57.2 57.0 53.6 52.5 53.0 51.9 44.0 44.5 40.0 39.5 32.3 32.3 35.3 34.6 27.3 27.7 30.0 20.0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY22 FY23 Total toll collection (INR mn) 5,592 1868 1716 1958 159
Slide 36: BOT Toll Revenue Comparative – Private InvIT Projects
BOT Toll Revenue Comparative – Private InvIT Projects Amount in INR mn Gulabpura Chittorgarh ** Yedeshi Aurangabad Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Jun 533 419 217 329 822 149.6% Jun - 288 153 346 574 65.8% Sept
Slide 37: BOT Toll Revenue Comparative – Private InvIT Projects
BOT Toll Revenue Comparative – Private InvIT Projects Amount in INR mn Kishangarh Gulabpura Agra Etawah Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Jun 344 294 146 209 303 44.9% Jun 231 206 150 419 550 31.3% Sept 342 279 2
Slide 38: BOT Toll Revenue Comparative – Private InvIT Projects
BOT Toll Revenue Comparative – Private InvIT Projects Amount in INR mn Karwar Kundapura Palsit Dankuni Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Quarter 2021-22* 2022-23 % Variance Jun - - 93 156 298 91.7% Jun - 545 - Sept - - 156 197 262 32.8% Sept - 498 - Dec - - 218 250 326 30.
Slide 39: IRB Public InvIT Overview
InvIT IRB Public Private & Confidential 38
Slide 40: Structure of Public InvIT
Structure of Public InvIT Fund structure Unit holders holding more than 1% % S. No. Unit holder Investor in units of trust holding IRB INFRASTRUCTURE DEVELOPERS 1 15.97 LIMITED Quarterly distribution 2 GOVERNMENT OF SINGAPORE 7.61 ADITYA BIRLA SUN LIFE TRUSTEE Invests in Distributes 3 PRIVATE LIMITE
Slide 41: Public InvIT (Portfolio of 6 Assets)
Public InvIT (Portfolio of 6 Assets) Listed in May-2017 with initial portfolio of six operational assets; seventh asset was transferred in Sep-2017 Two assets were successfully completed and handed back to the authority. One HAM asset acquired in Oct-2022 BOT-Toll assets with proven traffic hi
Slide 42: Strong Recovery in Toll Collection Across Projects
Strong Recovery in Toll Collection Across Projects Daily toll collection (INR mn) * 40.0 25.8 27.4 25.6 25.7 24.2 24.2 24.8 25.6 23.5 20.0 22.8 23.9 24.1 21.1 16.8 17.0 17.4 17.9 17.1 15.8 13.7 10.3 - Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY22 FY2023 Total toll collection (INR mn) * 775 79
Slide 43: Financial Highlights
Financial Highlights Gross income1 (INR mn) EBITDA (INR mn) CAGR: 9% 81% 81% 80% 80% 83% 12,701 14,003 12,334 11,609 11,584 10,052 9,989 10,218 9,343 8,191 FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 EBITDA margin Net distributable cash flow (INR mn) Net debt (INR mn) 0.2x 0.2x 0.3x 0.3x 0.3x
Slide 44: Unit Price Performance Since Inception
Unit Price Performance Since Inception Price (rebased to 100) Distribution per unit (DPU) 300.0 INR FY18 FY19 FY20 FY21 FY22 DPU 10.6 12.3 10.0 8.5 9.0 Yield1 11.5% 16.4% 17.6% 20.8% 16.1% 90% 200.0 100.0 22% - May-20 Aug-20 Nov-20 Feb-21 May-21 Aug-21 Nov-21 Feb-22 May-22 Aug-22 Nov-22 IRB InvIT 10
Slide 45: Key Takeaways
Key Takeaways 1 Large pipeline of future growth with upcoming national & state highway bids 2 Proven credentials in the highways space Significant improvement in financial metrics post GIC and Cintra –transaction ; further supported by 3 monetization of VK1 HAM Asset 4 Access to complementary capabi
Slide 46: Appendix I – Additional Financial Information
Appendix I Additional Financial Information Private & Confidential
Slide 47: Financial Summary (Quarterly - QoQ)
Financial Summary (Quarterly - QoQ) INR in Million Total all segments Construction Segment BOT Segment Particulars Q3FY23 Q2FY23 Q3FY23 Q2FY23 Q3FY23 Q2FY23 Revenue 15,702 14,388 10,165 9,444 5,537 4,944 EBITDA 8,006 7,610 2,910 3,113 5,097 4,497 EBITDA margin 51% 53% 29% 33% 92% 91% Financial expen
Slide 48: Offshore Bond Issue – Covenant Structure
Offshore Bond Issue – Covenant Structure Surplus IRB 100% Investments Business segment I 100% 51% 49% GIC Toll & HAM Private InvIT affiliates Business segment II 16% Construction Public InvIT Mumbai Pune TOT Engineering, construction, Ahd Vadodara operation and maintenance of BOT Gandeva Ena HAM Pro
Slide 49: Leverage Summary – Bond Covenant
Leverage Summary – Bond Covenant INR in Mn TTM ending TTM ending TTM ending Particulars Dec 31, 2023 March 31, 2022 March 31, 2021 Business Segment I: Toll & HAM Revenues 20,405 18,277 16,112 EBITDA 17,307 16,083 14,532 Gross Debt 91,430 102,541 97,711 Business Segment II : Construction + Surplus fr
Slide 50: Appendix II – Sector Overview
Appendix II Sector Overview Private & Confidential
Slide 51: Indian Road Sector Outlook
Indian Road Sector Outlook Healthy awarding activity seen during last 2-3 years While pace of construction reduced in FY22, improvement Consistent increase in Budgetary estimated to be maintained going forward.. is expected going forward allocation 00’ KM KM Capital Outlay for MoRTH (INR bn) 14,235
Slide 52: Attractive Sector with Strong Underlying Fundamentals
Attractive Sector with Strong Underlying Fundamentals Indian highways exhibit strong fundamentals, secular growth trends and stable regulations Growing urbanization and rising personal disposable income Bharatmala Pariyojana Phase 1 Secular growth Amongst the fastest growing vehicle markets In
Slide 53: Roads Sector has a Significant Share in Government’s Infrastructure Development Pipeline
Roads Sector has a Significant Share in Government’s Infrastructure Development Pipeline National Monetization Pipeline PM Gati Shakti Master Plan Monetization of INR 6 tn of brownfield assets, with stable revenue streams, Construction of INR 111 tn of greenfield assets in the core infrastructur
Slide 54: Regulatory Overview
Regulatory Overview Variety of PPP Models with a highly evolved & stable regulatory regime backed by well established contract structure through NHAI Model Concession Agreement NHAI has successfully attracted investments in the roads sector through and array of PPP models Build Operate Transfer (BOT
Slide 55: Bankable Concession Terms
Bankable Concession Terms Key positive of Indian Roads & Highways sector Typical terms Details NHAI is an agency appointed by the federal government for development of roads and highways in India NHAI as counterparty NHAI is a quasi-sovereign entity with a ‘AAA’ rating Well-funded by federal g
Slide 56: While the Sector has Witnessed Subdued Bid Activity Recently, Outlook Remains Positive
While the Sector has Witnessed Subdued Bid Activity Recently, Outlook Remains Positive Key sector trends 1 Weak bidding activity in FY22 2 Increased competition intensity 3 Monetization through TOT: A mixed bag Bids tendered for road projects (INR bn) MoRTH has provided relaxations NHAI had bid
Slide 57: Disclaimer
Disclaimer Except for the historical information contained herein, statements in this presentation and any subsequent discussions, which include words or phrases such as ‘will’, ‘aim’, ‘will likely result’, ‘would’, ‘believe’, ‘may’, ‘expect’, ‘will continue’, ‘anticipate’, estimate’, ‘intend’, ‘pla
Slide 58: Thank You
THANK YOU 57