Atlas Arteria · ASX:ALX
Atlas Arteria — Macquarie Atlas Roads — Macquarie Australia Conference 2013
28 slides from Atlas Arteria's conference presentation, May 2013
Slide 1: Macquarie Atlas Roads - Macquarie Australia Conference May 2013
MACQUARIE ATLAS ROADS MACQUARIE AUSTRALIA CONFERENCE MAY 2013
Slide 2: Disclaimer
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 manager/adviser of MA
Slide 3: Disclaimer
Disclaimer Hong Kong This document has been prepared and intended to be disposed solely to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong for the purpose of providing preliminary information and does not constitute any offer to the public
Slide 4: Contents
Contents 1. Overview 5 2. APRR 10 3. Dulles Greenway 20 4. Outlook 26 Questions 28 4
Slide 5: 1. Overview
1. Overview
Slide 6: MQA Snapshot
MQA Snapshot Macquarie Atlas Roads (MQA) is a global toll road operator and developer Market Capitalisation1 $796,754,841 ASX Ranking Top 200 Number of toll road investments 6 Weighted average length of concession life remaining2 30 years Performance vs pcp3 Year to 31 Dec 12 - Traffic (1.2%) - Reve
Slide 7: Snapshot (continued)
MQA Snapshot (continued) MQA’s toll road investments are located in France, UK, USA and Germany1 1. MQA owns various percentage stakes in these assets. 7
Slide 8: Structure
MQA Structure MQA's structure is integral to its strategy MQA has no corporate level debt and A$12.9m in available cash1 Each asset is in a separate holding company structure All asset level debt is project finance, with no recourse to MQA or any other portfolio asset There are no cross-defa
Slide 9: Strategy & objectives
MQA Strategy & objectives MQA to deliver and grow dividends Manage debt maturities over time De-risk assets Pursue value growth through steps towards securing dividends or sale Deliver growth in the existing portfolio Holding Structure Individual asset risk quarantined from remaining portfolio and M
Slide 10: 2. APRR
2. APRR
Slide 11: APRR 2012 results
APRR 2012 results Traffic -1.7% Impacted by challenging economic 21.1bn VKT environment Revenue +0.8% Supported by increases in tolls and other €2,038.6m income EBITDA1 Benefited from opex savings +2.1% EBITDA margin increased to 70.0% (vs €1,427.5m 69.2% in pcp) 1. Represents APRR EBITDA on
Slide 12: Europe's fourth largest motorway network
APRR Europe’s fourth largest motorway network APRR’s network covers major trade and tourism routes through Western Europe and links Paris and Lyon, France’s two largest cities MQA ownership: — 19.44% Network length: — 2,264km Represents 51 years of development APRR/AREA concession remaining:
Slide 13: French economic indicators
APRR French economic indicators1,2 Weaker economic environment affects travel demand 125.0 Manufacturing Production Road Vehicle Fuel Deliveries New Car Sales 112.5 100.0 87.5 75.0 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 1. Sources: INSEE and SOeS (Observation and Statistics Office). 2. Represents
Slide 14: Traffic analysis
APRR Traffic analysis HV closely correlated to French industrial production Light vehicle traffic (which comprised 85% of total VKT in 2012) is above pre-recession levels while the recovery in heavy vehicle traffic has been impacted by the challenging economic climate APRR reported revenue growt
Slide 15: Traffic analysis (continued)
APRR Traffic analysis (continued) 1Q13 LV traffic up 0.5% vs pcp 1Q13 HV traffic down 3.2% vs pcp Light vehicle traffic positively impacted by a Heavy vehicle levels continues to be impacted number of external factors including: by weak industrial production levels in France — Timing of school a
Slide 16: Performance
APRR Performance Robust performance demonstrated through economic downturn and oil spikes APRR EBITDA1 (€m), average French diesel price and French GDP2 1,399 1,428 1.50 1,326 5.0% 1,244 1,265 1,208 1,068 974 2.5% diesel price (€/L) Average French 1.25 French GDP (%) 0.0% 1.00 -2.5% 0.75 -5.0% 2005
Slide 17: Operations
APRR Operations EBITDA margin at 70.0% Operating expenses (ex operating taxes) broadly flat since 2006 €800m 80.0% 67.8% 68.0% 68.4% 69.2% 70.0% 67.0% 64.0% €600m 60.0% 232 229 231 236 240 2641 258 €400m 40.0% 153 162 149 139 156 140 133 €200m 20.0% 209 209 210 220 218 219 220 €0m -% 2006 2007 200
Slide 18: Free cash flow
APRR/Eiffarie Free cash flow FE distributions, and therefore MQA dividends, reflect only a portion of APRR free cash flow APRR consistently generates cash flow above net profit Undistributed cash is reinvested in the business through capital expenditure and debt repayment Pro forma full year 2
Slide 19: APRR cash flow to MQA
APRR/Eiffarie APRR cash flow to MQA Current structure is a legacy of original acquisition in 2006 and CNA debt terms Simplified holding structure MQA Eiffarie distributions represent a portion of group free cash flow 19.44% of free cash flow HoldCo debt – Margin of 300bps Eiffarie – Cash sweep: 25%
Slide 20: 3. Dulles Greenway
3. Dulles Greenway
Slide 21: Dulles Greenway 2012 results
Dulles Greenway 2012 results Traffic -0.2% Flat but for the effects of Hurricane Sandy 46,342 ADT Benefited from a milder winter Revenue +8.1% Supported by January 2012 increase in tolls US$72.4m EBITDA Reflects higher tolls and increased cost +11.8% efficiencies US$58.2m EBITDA margin inc
Slide 22: Performance
Dulles Greenway Performance EBITDA has grown strongly in spite of declining traffic Growth in EBITDA supported by fixed toll increases and internalisation of O&M Traffic impacted by toll increases, increased capacity on alternate routes and recent economic weakness EBITDA (US$m) vs Average daily
Slide 23: Traffic corridor
Dulles Greenway Traffic corridor Dulles Greenway well placed to provide good service levels as corridor develops The Dulles Greenway has two key competitors – Route 7 and Waxpool Rd Competing roads have received considerable capacity upgrades since 2005, diverting significant traffic away Route
Slide 24: Corridor
Dulles Greenway Corridor Demographic factors expected to progressively increase congestion in corridor and on alternative routes Flat in 2012 but for the effects of Hurricane Sandy — Performance helped by milder winter weather Dynamic Corridor (Population Growth p.a.%) 3.00% 2.50% 2.00% 1.50% 1.00
Slide 25: Other developments
Dulles Greenway Other developments Toll increase of 3.02% approved by SCC on 22 January 2013 (actual tolls rounded downwards to the nearest US$0.05) New SCC hearings into Dulles Greenway tolls have been set during April-July 2013 Urban development in Loudoun county continuing – positive for lo
Slide 26: 4. Outlook
4. Outlook
Slide 27: Outlook
MQA Outlook European traffic outlook expected to remain weak — Anticipated to gradually improve over 2013/14 No update on future APRR management contracts with the State Across the portfolio, management will continue to focus on initiatives to maximise revenue and improve operational efficienc
Slide 28: Questions
Questions
Macquarie Atlas Roads — Macquarie Australia Conference 2013 on 6ix