Aurizon Holdings Ltd. · ASX:AZJ
Aurizon — QR National — Credit Suisse Asian Investment Conference 2011
29 slides from Aurizon's conference presentation, Mar 24, 2011
Slide 1: ASX cover letter for investor presentation
Dominic D Smith SVP & Company Secretary QR National Limited ABN 14 146 335 622 Level 14, 305 Edward Street Brisbane QLD 4000, Australia GPO Box 456 Brisbane QLD 4001, Australia T +61 7 3235 9197 F +61 7 3235 2188 companysecretary@qrnational.com.au 24 March 2011 Company Announcements Office Australia
Slide 2: Delivering Australian resources to the world
Delivering Australian resources to the world Credit Suisse Asian Investment Conference Lance Hockridge Managing Director and CEO 24 March 2011
Slide 3: Important Notice
DRAFT Important Notice Reliance on third party information This Presentation was prepared by QR National Limited (ACN 146 335 622) (“QR National”). This Presentation may contain information that has been derived from publicly available sources that have not been independently verified. No representa
Slide 4: Delivering Australian resources to the world
DRAFT Delivering Australian resources to the world 1 A new era for Australia’s largest rail freight business 2 Creating value through business transformation 3 Delivering results as a newly listed company 4 Future growth underpinned by global demand for coal and iron ore 3
Slide 5: A national footprint
DRAFT A national footprint QRN QRN Above RailFreight Above Rail Freight Footprint Footprint Queensland QRN QRN Manage Manage &&Operate Operate DARWIN bulk, QRN Don’t Do Not Operate Operate regional freight & QR National’s Business Profile intermodal FY10A pro forma Cairns Revenue (A$ billion) 2.9 No
Slide 6: Three major operating divisions
DRAFT Three major operating divisions Coal Freight Network Services Largest coal haulage operator in National transporter of bulk Network – 2,300km of track Australia mineral commodities (including across four coal rail systems in >500,000 tonnes hauled per day iron ore), agricultural, minin
Slide 7: Australia's largest IPO in over a decade
DRAFT Australia’s largest IPO in over a decade Listed on ASX in Nov 2010 as a top 50 company with a market cap of $6.4b Qld Government retained 33.8% shareholding March inclusion in the S&P/ASX 100 and S&P/ASX 200 indices Europe United (Excluding UK) Kingdom 6.0% North America 29.3% 38.7% Inst
Slide 8: Highly leveraged to global growth sectors
DRAFT Highly leveraged to global growth sectors Coal Iron ore Other major commodities Global thermal/metallurgical coal consumption Global … crude steel consumption Global other bulk commodities consumption Quadrillion BTU Million Tonnes Kilo Tonnes 200 1,800 50,000 +40% +34% 150 +31% 40,000 1,200 1
Slide 9: Australia's freight task expected to double over next 20 years
Australia’s freight task expected to DRAFT double over next 20 years Australia’s domestic freight growth, 1961 - 2050 SOURCE: IBIS World (2008) 8
Slide 10: Exposed to booming Australian resources
DRAFT Exposed to booming Australian resources 85% revenue derived from Australian resources QR National Other Commodity Mix Agricultural 2.5% (by pro forma revenue - Products FY10) 12.5% Mining & Industrial Inputs 7% Coal Iron Ore 58.5% 8.3% Bulk Mineral Commodities 11.2% 9
Slide 11: Delivering Australian resources to the world
DRAFT Delivering Australian resources to the world 1 A new era for Australia’s largest rail freight business 2 Creating value through business transformation 3 Delivering results as a newly listed company 4 Future growth underpinned by global demand for coal and iron ore 10
Slide 12: Our strategy
DRAFT Our strategy Develop strong and empowered leadership across the A performance-based culture organisation Delivery focused Create a performance culture, improve commercial capabilities and drive greater accountability Committed to people and safety Embed a strong safety culture The right
Slide 13: Creating value through internal reform and external growth
Creating value through internal reform DRAFT and external growth Market Growth Internal Reform New Volume / Value through: Improvements through Efficiency Retaining our leadership position and leveraging the Programs & Integrated Operating Model in: continued growth in the Coal market Capital pr
Slide 14: Redundancy Program
DRAFT Redundancy Program Voluntary Redundancy program announced in February 2011 3,500 employees in scope including head office, administration and shared services to ensure alignment of costs and productivity to benchmark levels Part of cultural change towards performance -based organisation
Slide 15: An experienced Board and Management Team to lead the transformation
DRAFT Management execution capability An experienced Board and Management Team to lead the transformation 14
Slide 16: Delivering Australian resources to the world
DRAFT Delivering Australian resources to the world 1 A new era for Australia’s largest rail freight business 2 Creating value through business transformation 3 Delivering results as a newly listed company 4 Future growth underpinned by global demand for coal and iron ore 15
Slide 17: Solid first half performance
DRAFT Solid first half performance Underlying EBITDA of $446 million up 17% Underlying EBIT of $226 million up 31% Statutory profit of $278 million up >100% Coal volumes of 99.6mt are broadly in line with HY10 despite record rainfall in Q2 16
Slide 18: Rapid recovery from record flooding
DRAFT Rapid recovery from record flooding All systems now operational Work to recover infrastructure completed within days of floods receding Flood Recovery Taskforce co-ordinates recovery & maximises system-wide railings Maintenance brought forward, anticipating strong Q4 railings Infrast
Slide 19: Smooth transition to privatisation
DRAFT Smooth transition to privatisation Smooth transition from Government ownership to ASX listed entity Safety performance continues to improve 41% improvement in LTIFR for calendar year 2010 LTIFR now 3.7 (per million hours worked) Transformation initiatives are gaining traction Opera
Slide 20: Transformation gaining traction
DRAFT Transformation gaining traction Enterprise wide projects Key results 41% reduction in LTIFR over calendar year 2010 – now 3.7 (per million World class safety hours worked) Safety Interactions progressing toward target at 6,000 per month Established Safety, Health and Environment communit
Slide 21: Strong focus on revenue quality uplift
DRAFT Strong focus on revenue quality uplift Revenue quality uplift in new & renegotiated coal contracts in Coal Coal contracts announced in HY11 Jellinbah Resources – up to 5.1mta to the Port of Gladstone Peabody Energy – up to 9mta to DBCT Coal contracts announced since 31 December 2010
Slide 22: Share price trend since float
DRAFT Share price trend since float Inclusion in S&P/ASX QRN S&P/ASX 100 $600m indices Jellinbah GAPE HY Results contract Cyclone Yasi impact announced Negative media Earnings coverage of QLD guidance floods on Qld weather ASX debut impact 21
Slide 23: Delivering Australian resources to the world
DRAFT Delivering Australian resources to the world 1 A new era for Australia’s largest rail freight business 2 Creating value through business transformation 3 Delivering results as a newly listed company 4 Future growth underpinned by global demand for coal and iron ore 22
Slide 24: Strong demand growth in global coal markets
DRAFT Strong demand growth in global coal markets QRN’s track record of coal haulage growth Global coal import demand – 2005 to 2015 Note: Above data is calendar year data Source: Australian Commodities, ABARE, March 2010. The above data is calendar Source: Australian Commodities, ABARE, March 2010
Slide 25: Positioned for growing iron ore demand
DRAFT Positioned for growing iron ore demand Global iron ore imports Growth opportunities Iron Ore – 2005 to 2015 Iron ore demand is a key driver of expected future growth Heads of agreement for 14mtpa with two key customers in the Mid West contestable iron ore markets in Western Australia Pla
Slide 26: Committed capital projects on schedule
DRAFT Committed capital projects on schedule Project at halfway point. All major milestones achieved on scope and GAPE X50 budget Blackwater Largest electrical upgrade on the coal network since 1980s Electrification Projects remain on schedule for commissioning in the latter half of 2012 Exp
Slide 27: Outlook
DRAFT Outlook Financial Volume impact from floods now expected to be 25 million tonnes for the remainder of FY11 Underlying EBIT for FY11 expected to be in the range of $380m to $410m (Statutory EBIT $280m to $310m) Queensland Coal Readiness for customers to return to normal volumes in 4Q
Slide 28: Delivering Australian resources to the world
DRAFT Delivering Australian resources to the world 1 A new era for Australia’s largest rail freight business 2 Creating value through business transformation 3 Delivering results as a newly listed company 4 Future growth underpinned by global demand for coal and iron ore 27
Slide 29: Questions
Questions QR NATIONAL.
QR National — Credit Suisse Asian Investment Conference 2011 on 6ix