Aurizon Holdings Ltd. · ASX:AZJ
Aurizon — FY2024 Earnings Presentation
50 slides from Aurizon's earnings presentation, Aug 12, 2024
Slide 1: Aurizon FY2024 Results
Aurizon FY2024 Results _ 12 August 2024
Slide 2: No Reliance on This Document / Statements About the Future
NO RELIANCE ON THIS DOCUMENT STATEMENTS ABOUT THE FUTURE This document was prepared by Aurizon Holdings Limited (ACN 146 335 622) (referred to as “Aurizon” which includes its related This document contains “forward-looking statements”. The words “expect”, “anticipate”, “likely”, “intend”, “should”,
Slide 3: Network, Coal, Bulk and Containerised Freight overview
Network Coal Bulk Containerised Freight 2,670km of rail infrastructure, servicing Largest fleet in Australia, servicing 2,200km Tarcoola-to-Darwin National capacity of premium coking coal basin all East-Coast coal terminals rail line ~350k TEUs per annum Regulated Return1, across a $6.1b Over 90% of
Slide 4: FY2024 Results
FY2024 RESULTS AURIZON.
Slide 5: TRIFR, LTIFR and serious injury frequency rates
TOTAL RECORDABLE INJURY FREQUENCY RATE (TRIFR)1 AND LOST ACTUAL AND POTENTIAL SERIOUS INJURY AND FATALITY TIME INJURY FREQUENCY RATE (LTIFR) FREQUENCY RATE (SIFRa+p)2 Incidents per million hours worked Incidents per million hours worked -15% 8.51 8.65 7.36 -29% 4.41 2.28 3.49 3.92 3.51 1.63 FY2022 F
Slide 6: Introduction
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Slide 7: EBITDA up $196m (+14%) with growth from Network, Coal and Bulk
EBITDA up $196m (+14%) with growth National interstate Containerised Freight from Network, Coal and Bulk full schedule in operation Payout ratio for final dividend increased Land-bridging trials in operation for from 75% to 80% of NPAT imported motor vehicles Announced an on-market buy-back of FY202
Slide 8: FY2024 key results: EBITDA, NPAT, ROIC, free cash flow, dividends
EBITDA NPAT ROIC $1,624m $406m 8.9% up 14% up 11% up 1.4ppts Free Cash Flow2 Full Year Dividends Capital Management $661m 17.0cps UP TO $150m up 123% up 13% on-market buy-back — Final: 7.3cps (DPR of 80%), franked at 60%3 1. All amounts are underlying and on a continuing basis unless otherwise state
Slide 9: Coal haulage by corridor
› While total volume increased, mine sequencing and unscheduled Coal Haulage (By Corridor/Region) Total (million tonnes) and change compared to FY2023 stoppages, as well as supply chain cancellations impacted volumes › Corridor/customer mix has been the primary driver of yield improvement, Newlands
Slide 10: Bulk haulage by geography
› Increased minerals (QLD) and iron ore volumes (WA and Bulk Central), Bulk Haulage (By Geography): Total (million tonnes) and change compared to FY2023 partly offset by lower grain volumes (QLD, NSW and WA) and customer specific production challenges (QLD) › Multi-week weather-related rail network
Slide 11: Network volumes and allowable revenue
› Allowable Revenue increased due to the Regulatory Asset Base (RAB) Network Volumes (By System, All Rail Operators) reset on 1 July 2023 and the preliminary reset Weighted Average Cost of Total (million tonnes) and change compared to FY2023 Capital (WACC) of 8.18% (compared to 6.30% in FY2023) › Vo
Slide 12: Containerised Freight ramp-up to full schedule
› Completed ramp-up to the full schedule (seven weekly services1) in Containerised Freight Network April 2024 › A (third) East-Coast service has been added in addition to a Melbourne- Darwin Adelaide (shuttle) › Railing (spot volume) for nine additional customers Townsville › Secured leases at Glenl
Slide 13: Customer Value Proposition and land-bridging progress
› Customer Value Proposition: Progress (including land-bridging trials) - Material time saving (7 days2), enabling faster freight delivery for customers and/or better inventory management by reducing › Stevedoring licence granted and two mobile harbour cranes in operation freight in transit (includi
Slide 14: Financial Performance
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Slide 15: Group financial results summary
› Revenue growth from Network driven by uplift in (allowable) $m FY2024 FY2023 Variance (%) Variance revenue and volume over-recovery, Coal due to higher Revenue (and other income) 3,844 3,511 9% 333 volumes and yield, and Bulk due to higher minerals and iron ore revenue more than offsetting decline
Slide 16: Coal EBITDA: major drivers
EBITDA: Major drivers ($M) Revenue 1 Operating costs 2 net of fuel and access (revenue and cost) $1,283m ($755m) 11 68 528 105 +9% (4%) 455 25 EBITDA Tonnes hauled $528m 189.0m FY2023 Volume Net Revenue Other Operating Costs FY2024 Yield +16% +2% › EBITDA increased due to an uplift in revenue result
Slide 17: Bulk EBITDA: major drivers
EBITDA: Major drivers ($M) Total Revenue Operating Costs net of fuel and access (revenue and cost) $1,096m ($867m) 18 229 +3% (2%) 29 4 214 EBITDA Rail Tonnes Hauled $229m 66.6m FY2023 Revenue Operating Costs Other FY2024 +7% (2%) › EBITDA increased by $15m to $229m driven by minerals and iron ore v
Slide 18: Network EBITDA: major drivers
EBITDA1: Major drivers ($M) Total Revenue Operating Costs net of fuel and energy/electric charges (revenue and cost) $1,435m ($505m) 14 44 930 +7% +4% 146 813 EBITDA Tonnes $930m 209.6m FY2023 Access Revenue Other Revenue Operating Costs FY2024 › Higher access revenue driven by an uplift in allowabl
Slide 19: FY2024 capital expenditure
FY2024 CAPITAL EXPENDITURE1 ($M) Growth Capex Growth Capital Expenditure1 FY2024 95% Bulk & Containerised Non-Growth Capex2 Freight 60% Network Rollingstock $144m Standard Gauge Locomotives & Wagons (and Containers) Port and Terminal Equipment $29m $842m Terminal Land and Infrastructure $10m Non-Gro
Slide 20: Free cash flow allocation: growth capital, dividends and buy-backs
FREE CASH FLOW 1 ($M) ALLOCATION: GROWTH CAPITAL, DIVIDENDS AND BUY-BACKS 771 778 765 Shareholder returns FY2016-FY2021 716 100% › ~100% NPAT Dividend Payout Ratio 661 › Limited growth opportunities average: 626 633 587 › $1 billion buy-backs FY2022-FY2024 456 100% › ~75% NPAT Dividend Payout Ratio
Slide 21: Group Funding Structure
Group Funding Structure DEBT MATURITY PROFILE AS AT 30 JUNE 20247 ($M) › ~70% of Group debt held in Network GROUP DEBT METRICS FY2024 FY2023 includes undrawn amounts › Step down in both Network and Operations debt ratios from 4.5x and 2.3x net debt/EBITDA1 at June 2023 to 3.9x and 1,828 Weighted ave
Slide 22: Outlook
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Slide 23: Strategic pillars and divisional EBITDA trends
Drive Bulk growth Establish nationally significant containerised Resilient Coal and Network businesses across national footprint freight supply chain Coal plus Network EBITDA ($m) Bulk EBITDA ($m) TEUs3 (‘000) $1,458 $1,415 $1,382 $1,331 $1,342 $1,268 159 $229 $214 97 $140 $135 $110 $55 0 0 0 0 FY19
Slide 24: FY2025 guidance and key assumptions
FY2025: › Group underlying EBITDA expected to be in the range of $1,660m - $1,740m › Sustaining capex expected to be $640m - $720m (including ~$80m of transformation capital) › Growth capex expected to be $125m - $175m Key assumptions › Network: EBITDA expected to be higher than FY2024 with an incre
Slide 25: Appendix
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Slide 26: Additional information
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Slide 27: About Aurizon
FY2024 RESULTS — ADDITIONAL INFORMATION <> purizon. About Aurizon Aurizon is Australia’s largest rail freight operator. Our operational footprint soans across mainland Australia, with over 5,000km of track infrastructure and the largest fleet of locomotives and wagons - ‘Aurizon Operations Coal, Bul
Slide 28: Strategic aspirations and enterprise targets
Resilient Coal and Drive Bulk growth Establish nationally significant Network businesses across national footprint containerised freight supply chain Our aspiration to achieve Our aspiration to achieve Highly disciplined businesses, supporting Aurizon's 25-30% >500k TEU diversified portfolio share o
Slide 29: Capital Allocation Hierarchy
Capital Allocation Hierarchy Capital Management › Opportunities if there is surplus capital Determine Available Capital Non-Growth Capital Dividends › Ongoing operating cash flows › Sustaining and transformation › Within 70-100% payout ratio → › Additional funding capacity projects and/or available
Slide 30: ESG-related aspirations and targets
› › › › › › › 1. Deloitte Access Economics Value of Rail 2020 2. NSW Government: Consultation Paper: Clean Air for NSW, 2016 3. ESG-related aspirations and targets described in this presentation are discussed in detail in Aurizon’s Sustainability Reports and Climate Strategy and Action Plan, availab
Slide 31: Global steel production and Asian thermal coal imports
GLOBAL CRUDE STEEL PRODUCTION | BLAST FURNACE-BASIC OXYGEN FURNACE ASIA: THERMAL (STEAM) COAL IMPORT VOLUME | SHARE OF GLOBAL THERMAL SHARE1 (STEAM) COAL IMPORT MARKET2 2.0bt 1,000mt 83% 90% +3% 80% 800mt 1.5bt 70% 600mt 1.0bt 60% 400mt 74% 73% 71% 50% 0.5bt 69% 65% 200mt 35% 40% 55% 58% 62% 0.0bt 0
Slide 32: Australian base metals exploration, mining capex and grain exports
AUSTRALIA: BASE METALS EXPLORATION EXPENDITURE1 GRAIN EXPORT VOLUME: FY20243 Calendar year By State (million tonnes), change compared to FY2023 A$1.5b A$1.0b 18.3 7.4 flat A$0.5b 7.3 4.2 2.3 A$0.0b WA SA NSW Vic. Qld. 2019 2020 2021 2022 2023 AUSTRALIA: METAL ORE MINING CAPITAL EXPENDITURE2 AUSTRALI
Slide 33: Quarterly volumes by business
Quarter Ending Financial Year to date Sep-23 Dec-23 Mar-24 Jun-24 FY2023 FY2024 Variance Coal CQCN mt 32.7 33.6 31.8 34.3 133.6 132.5 (1%) NSW & SEQ mt 13.5 14.2 14.2 14.6 51.4 56.5 10% Coal Total Volumes mt 46.2 47.8 46.0 49.0 185.0 189.0 2% CQCN NTKs bn 8.4 8.4 7.8 8.5 33.0 33.1 - NSW & SEQ NTKs b
Slide 34: Enterprise Agreements
# Staff Headline Increases Term Enterprise Agreement Covered Expiry Date Status (years) Year 1 Year 2 Year 3 Year 4 (approx.) National Bulk Rail Operations 40 Bargaining SA/NT Bulk Terminal Operations 20 4 2 Apr 2024 3.0% 3.0% 3.0% 3.0% Bargaining WA Bulk Rail Operations 450 2 9 Dec 2024 5.3% 4.5% P
Slide 35: EBITDA by segment
FY2024 FY2023 Variance Coal 528 455 73 Bulk 229 214 15 Network 930 813 117 Other (63) (54) (9) EBITDA 1,624 1,428 196 35 1. Continuing operations
Slide 36: EBITDA bridge FY2023 to FY2024
9 1,624 15 73 117 1,428 FY2023 Network Coal Bulk Other FY2024 1. Continuing operations 36 Note: Due to rounding, the sum of components may not equal the corresponding total
Slide 37: Balance sheet summary
30 June 2024 30 June 2023 Current assets 991 1,193 Property, plant and equipment (PP&E) 10,153 9,945 Other non-current assets 452 541 Total Assets 11,596 11,679 Total borrowings (4,897) (5,142) Other current liabilities (772) (744) Other non-current liabilities (1,489) (1,440) Total Liabilities (7,1
Slide 38: Debt maturity profile: Aurizon Network and Operations
1,353 AURIZON NETWORK ($m) 470 105 711 550 50 425 372 778 310 310 50 264 205 115 500 142 240 80 270 50 68 20 145 184 122 40 82 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 AURIZON OPERATIONS ($m) 700 200 475 465 335 500 196 153 103 50 130 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 F
Slide 39: Capital expenditure by segment
Bulk & Network Coal Corporate Total Containerised Freight Non-Growth2 379 122 108 30 639 Growth - 11 192 - 203 Total 379 133 300 30 842 1. Includes capitalised interest and capital accruals. Excludes any M&A activity and any Network externally funded projects 2. Non-Growth capital expenditure includ
Slide 40: Total debt reconciliation to financial statements
$m Commentary Total debt including working capital facility 5,038 Borrowings on a cash basis Reconciliation to Financial Statements Add/(less): Borrowings acquired in connection with the Tarcoola-to-Darwin Concession Deed for face value of $50m Corporation Loan 6 issued at below market interest rate
Slide 41: Coal financials
$m FY2024 FY2023 Variance Above rail 1,266 1,175 8% Track access 460 350 31% Other 17 6 183% Total Revenue 1,743 1,531 14% Access costs (474) (400) (19%) Operating costs (741) (676) (10%) EBITDA 528 455 16% Depreciation & Amortisation (213) (204) (4%) EBIT 315 251 25% Tonnes (m) 189.0 185.0 2% NTKs
Slide 42: Coal volumes by system
FY2024 FY2023 Variance Central Queensland Coal Network (CQCN) Newlands 13.2 16.1 (18%) Goonyella 58.2 60.1 (3%) Blackwater 46.8 44.4 5% Moura 14.3 13.0 10% Total CQCN 132.5 133.6 (1%) New South Wales and South East Queensland (NSW & SEQ) West Moreton 3.5 2.1 67% Hunter Valley and Illawarra 53.0 49.3
Slide 43: Coal contract volume expiry by year
AURIZON COAL CONTRACT VOLUME EXPIRY BY YEAR1 COAL CONTRACT PORTFOLIO EXPIRY1 AS AT 30 JUNE 2024 AS AT 30 JUNE 2024 75 7% 23% 0-3 years 3-7 years 60 7+ years Million tonnes per annum (Mtpa) 70% 45 COAL CONTRACTED VOLUMES (MT) 30 230 228 235 57 60 66 15 173 168 170 0 FY25 FY26 FY27 FY28 FY29 FY30 FY31
Slide 44: Bulk financials
$m FY2024 FY2023 Variance Revenue and other income 1,096 1,063 3% Access costs (117) (104) (13%) Operating costs (750) (745) (1%) EBITDA 229 214 7% Depreciation & Amortisation (128) (108) (19%) EBIT 101 106 (5%) Above Rail Tonnes (m) 66.6 68.2 (2%) 44 Note: Due to rounding, the sum of components may
Slide 45: Network financials
$m FY2024 FY2023 Variance Track Access 1,340 1,255 7% Services & Other 95 82 16% Revenue 1,435 1,337 7% Energy & Fuel (160) (215) 26% Other Operating Costs (345) (309) (12%) EBITDA 930 813 14% Depreciation & Amortisation (353) (351) (1%) EBIT 577 462 25% Tonnes (m) 209.6 207.6 1% NTK (bn) 51.0 50.4
Slide 46: Network volumes by system
FY2024 FY2023 Variance Goonyella 104.1 107.0 (3%) Blackwater 54.7 52.4 4% Moura 14.9 12.9 16% Newlands 19.5 20.7 (6%) GAPE 16.3 14.6 12% Total (mt) 209.6 207.6 1% 46 Note: Due to rounding, the sum of components may not equal the corresponding total
Slide 47: Network revenue breakdown
FY2024 FY2023 $m Change Actual Actual Allowable Revenue excluding GAPE and Revenue Cap 1,065 964 101 Revenue Cap excluding GAPE 29 (1) 30 Volume-Related Over/Under Recovery excluding GAPE 19 (21) 40 Actual Allowable Revenue excluding GAPE 1,113 942 171 GAPE Regulatory and Non-Regulatory 149 152 (3)
Slide 48: Indicative Network adjusted maximum allowable revenue FY2023-FY2025
INDICATIVE NETWORK ADJUSTED MAXIMUM ALLOWABLE REVENUE (MAR)1 FY2023 – FY2025 ($M) +$81m Over- 1,195 collection Adjustments 76 1,113 19 15 38 29 106 Adjustments Under- collection 963 29 5 1 21 942 FY23 Cap Rec Rev Cap FY21 Rev Cap FY22 Non-Adjustment FY24 Actual Cap Rec Rev Cap FY22 Rev Cap FY23 Non-
Slide 49: Revenue adjustment amounts
AT2-4 AT5 Total Total › Revenue adjustment amounts (RAA) are the difference by system Financial Year (inc-GAPE) (ex-GAPE) between Aurizon’s Total Actual AT2-5 Revenue and Allowable AT2-5 $m $m $m $m Revenue › The RAA amounts are collected or repaid through a tariff adjustment 2024 1 20.0 8.0 28.0 24
Slide 50: Investor relations contacts
+617 3019 7526 James.Coe@aurizon.com.au > s Jason Di Pietro Manager Investor Relations — +617 3019 1135 é Jason.DiPietro@aurizon.co! ASX: AZJ