Transurban Group Ltd. · ASX:TCL
Transurban — H1 2013 Earnings Presentation
53 slides from Transurban's earnings presentation, Feb 5, 2013
Slide 1: Transurban 2013 Half-Year Results
TRANSURBAN 2013 HALF-YEAR RESULTS 5 February 2013
Slide 2: Disclaimer
DISCLAIMER This publication is prepared by the Transurban Group comprising Transurban Holdings Basis of preparation Limited (ACN 098 143 429), Transurban Holding Trust (ARSN 098 807 419) and This document includes presentation of results on a statutory as well as non-statutory basis. Transurban Inte
Slide 3: Agenda
AGENDA 1. Scott Charlton Chief Executive Officer Financial highlights Strategy confirmation Market update 2. Samantha Hogg Chief Financial Officer 2013 half-year results Funding update Investor and media enquiries: Henry Byrne: hbyrne@transurban.com 2
Slide 4: Financial Highlights
FINANCIAL HIGHLIGHTS Resilient traffic across portfolio GROWING DISTRIBUTIONS 6.9% proportional EBITDA growth 4.6% growth in free cash flow Continuing cost discipline Ongoing enhancement of portfolio $5 billion capital project pipeline coming on-line FY13 distribution guidance of 31.0 cents confirme
Slide 5: FY13 Highlights
FY13 HIGHLIGHTS Operations Development Corporate Tolling and Hills M2 84% Restructured operations complete – on executive team successfully schedule for Interim distribution of implemented on mid-2013 completion 15.5 cents delivered 495 Express Lanes 95 Express Lanes FY13 distribution Operations and
Slide 6: Safety
SAFETY “Look up. Stay back” 495 Express Lanes Hills M2 Upgrade campaign on CityLink in achieved five million roadworks safety partnership with safe work hours and campaign Murcotts operating safely Partnership with Aims to cut the number “Bstreetsmart” initiative of nose-to-tail crashes for young dr
Slide 7: Strategy Confirmation
STRATEGY CONFIRMATION Road infrastructure partner of choice providing effective and innovative urban transport solutions Leverage network footprint Leading role in shaping policy Utilise core capabilities Network planning and forecasting Operations and customer management Project development and del
Slide 8: Executive Committee
EXECUTIVE COMMITTEE Restructured corporate team to best deliver strategy Consolidating senior leadership in: Delivery and operations Technology Human resources Scott Charlton Strategy (includes network Chief Executive planning) Officer Vin Sue Lisa Johnson Tobin Samantha Hogg Vin Vassallo* Andrew He
Slide 9: Market Update Victoria
MARKET UPDATE VICTORIA CityLink a critical artery in Melbourne transport network contributing to productivity Continued traffic growth demonstrated through first half of FY13 Further upgrades to CityLink being considered Government targeting further network development Metropolitan Planning Strategy
Slide 10: Market Update New South Wales
MARKET UPDATE NEW SOUTH WALES Government focused on major activity centres and connecting corridors NSW Long-Term Transport Master Plan released in December 2012 WestConnex business case being developed by Government F3-M2 (M3) proposal with NSW Government Leverage existing networks to develop innov
Slide 11: Market Update USA
MARKET UPDATE USA 495 Express Lanes – next generation of motorway commenced operations Market-leading skills in dynamically tolled express lane projects and operations Network footprint around Washington DC further developing with 95 Express Lanes Transurban assets 10
Slide 12: Asset Snapshot
ASSET SNAPSHOT Resilient traffic despite construction impacts across portfolio Proportional EBITDA increased 6.9%1 % OF PROPORTIONAL TRAFFIC TOLL REVENUE ASSET EBITDA GROWTH (%) TOLL REVENUE GROWTH (%) GROWTH (%) 49.8% CityLink 2.0% 5.3%2 5.6%2 14.5% Hills M2 (2.0%) (1.7%) (1.9%) 6.3% Lane Cove Tunn
Slide 13: Hills M2 Upgrade
HILLS M2 UPGRADE Construction 84% complete Opening targeted for mid-2013, positioning for strong FY14 Windsor ramps opened to traffic July 2012 Macquarie Park ramp completed January 2013 Staggered opening of final works New roadside tolling equipment commissioned and operating 12
Slide 14: M5 South West Widening
M5 SOUTH WEST WIDENING Construction under way Targeted completion end of 2014 Extra lanes in each direction over 21kms Construction divided into three zones and 22% complete Progress has included: Excavation and stabilisation work in the median First asphalt in zone one 13
Slide 15: 95 Express Lanes
95 EXPRESS LANES Work commenced August 2012 23% complete Estimated completion late 2014 29 mile (46km), reversible two and three lane express lanes facility Construction includes: Nine new bridges Four flyover ramps Noise and retaining walls Widening roadway for additional HOV lane 14
Slide 16: 495 Express Lanes
495 EXPRESS LANES Opened to traffic in November 2012 Operations and tolling system functioning well Initial traffic below expectations Adjustment to traffic patterns and motorist preferences required Road user awareness growing and expected to develop Biggest change to local network since 1960s Too
Slide 17: Delivering
DELIVERING Established growth platform Existing pipeline delivering progressively 95 Express Lanes M5 Widening $943.9m $891.0m Hills M2 Upgrade $773.9m $724.9m $688.7m 495 Express Lanes M1 – CityLink Upgrade Lane Cove Tunnel 2008 2009 2010 2011 2012 2013 2014 2015 2016 FINANCIAL YEARS Figures for pr
Slide 18: Financial Results
FINANCIAL RESULTS SAMANTHA HOGG – CHIEF FINANCIAL OFFICER
Slide 19: Statutory Results
STATUTORY RESULTS Net profit $81.1 million (2011: $96.6 million profit) – 16.0% 2011 included a pre-tax net benefit of $33.4 million Ibonds1 ( 2012: $0) Toll revenue $397.7 million (2011: $385.6 million) – 3.1% Fee and other road revenue $41.7 million (2011: $38.7 million ) – 7.9% EBITDA (statutory
Slide 20: Statutory Results – Income Statement
STATUTORY RESULTS INCOME STATEMENT HALF YEAR ENDED 31 DECEMBER 2012 31 Dec ‘12 ($M) 31 Dec ‘11 ($M) % CHANGE Toll revenue 397.7 385.6 3.1% Fee and other road revenue 41.7 38.7 7.9% Construction revenue 124.6 138.6 (10.1%) Business development & other revenue 21.2 7.8 171.8% Total revenue 585.2 570.7
Slide 21: Proportional Results
PROPORTIONAL RESULTS Toll revenue $491.8 million (2011: $473.8 million) – 3.8% Fee revenue $36.1 million (2011: $32.1 million ) – 12.5% TTMS and other revenue $34.7 million (2011: $15.7 million) – 121.0% I-95 success fee ($8.6 million) TTMS revenue for Express Lanes tolling system development ($8.2
Slide 22: Proportional Result
PROPORTIONAL RESULT HALF YEAR ENDED 31 DECEMBER 2012 31 DEC ‘12 ($M) 31 DEC ‘11 ($M) % CHANGE Toll revenue 491.8 473.8 3.8% Fee revenue 36.1 32.1 12.5% TTMS revenue 18.3 10.1 81.2% Other revenue 16.4 5.6 192.9% Total revenue 562.6 521.6 7.9% Operating costs (114.9) (108.3) (6.1%) Business developmen
Slide 23: Toll Revenue Growth
TOLL REVENUE GROWTH CityLink – Transurban’s largest asset leading revenue PROPORTIONAL TOLL REVENUE GROWTH $m growth in portfolio (## ',( Northern Sydney network ',# (Hills M2, Lane Cove Tunnel '+( and Westlink M7) revenue '+# '*( disrupted by construction '*# ')( M1 Eastern Distributor and ')# * $
Slide 24: Cost
COST Cost increase of $14.7 million (10.5%) to $155.3 million Large component associated with new 495 Express Lane costs and the acceleration of accounting for previously issued LTIs to former CEO Costs associated with new 495 operations ($2.2 million) 495 tolling system development ($3.7 million) –
Slide 25: Free Cash Flow
FREE CASH FLOW FREE CASH FLOW 31 DEC ‘12($M) 31 DEC ‘11($M) % CHANGE Free Cash 192.8 184.2 4.6% Free cash per security (cents) – weighted average securities on issue during 13.2 12.7 3.9% half- year Supporting track record on Key timing differences point to distribution growth weighting of less free
Slide 26: Funding Snapshot
FUNDING SNAPSHOT US$242 million 20-year Private DEBT MATURITIES1 – FIVE YEAR FORWARD VIEW CORPORATE Activity Bonds issued for 95 Express Lanes in July AU$505 million bank debt refinance for Westlink M7: 3 and 5 year tranches US$300 million TIFIA financing ASSET secured for 95 Express Lanes in Novemb
Slide 27: Conclusion
CONCLUSION Quality asset portfolio 3.8% proportional toll revenue growth despite construction impacts across network 6.9% proportional EBITDA growth Distribution growth supported Interim distribution of 15.5 cents declared Confirmed guidance for full-year distribution of 31.0 cents Continued focus o
Slide 28: Appendix 1: Detailed Financials
APPENDIX 1 DETAILED FINANCIALS
Slide 29: Reconciliation
RECONCILIATION STATUTORY EBITDA TO PROPORTIONAL EBITDA 31 DEC ’12 ($M) 31 DEC ’11 ($M) % CHANGE Statutory EBITDA 340.8 317.5 7.3% Less: EBITDA attributable to Non-controlling interest (9.3) (9.0) (3.3%) Add: M5 proportional EBITDA 44.5 39.9 11.5% Add: M7 proportional EBITDA 41.4 40.2 3.0% Add: Pocah
Slide 30: Reconciliation – December 2012
RECONCILIATION STATUTORY INCOME STATEMENT TO EBITDA – 31 DECEMBER 2012 OFFSET CONSTRUCTION OTHER REVENUE NET BUSINESS REALLOCATION OF $M STATUTORY P&L ACCOUNTING DISCLOSURE TOTAL REALLOCATION DEVELOPMENT CAPITALISED COSTS UNDER AASB I 12 Toll revenue 397.7 397.7 Fee & other road revenue 41.7 (1.1) 8
Slide 31: Reconciliation – December 2011
RECONCILIATION STATUTORY INCOME STATEMENT TO EBITDA – 31 DECEMBER 2011 OFFSET CONSTRUCTION STATUTORY OTHER REVENUE NET BUSINESS REALLOCATION OF $M(4.3) ACCOUNTING DISCLOSURE TOTAL P&L REALLOCATION DEVELOPMENT CAPITALISED COSTS UNDER AASB I 12 Toll revenue 385.6 385.6 Fee & other road revenue 38.7 (3
Slide 32: Result by Asset – 100%
RESULT BY ASSET – 100% CONSOLIDATED ASSETS – 31 DECEMBER 2012 LANE COVE $M CITYLINK HILLS M2 TOLLAUST M1 ED ROAM OTHER TOTAL TUNNEL Toll revenue 244.7 71.2 30.8 - 51.0 - - 397.7 Fee & other revenue 22.4 2.2 0.9 4.4 0.3 8.3 29.0 67.5 Total revenue 267.1 73.4 31.7 4.4 51.3 8.3 29.0 465.2 Total cost (5
Slide 33: Result by Asset – 100%
RESULT BY ASSET – 100% EQUITY ASSETS – 31 DECEMBER 2012 M5 SOUTH WEST POCAHONTAS 495 EXPRESS 95 EXPRESS $M WESTLINK M7 DRIVE TOTAL MOTORWAY 895 LANES LANES Toll revenue 96.7 104.8 7.4 0.8 - - 209.7 Fee & other revenue 6.4 1.8 - 0.2 - - 8.4 Total revenue 103.1 106.6 7.4 1.0 - - 218.1 Total cost (14.2
Slide 34: Result by Asset – 100%
RESULT BY ASSET – 100% CONSOLIDATED ASSETS – 31 DECEMBER 2011 LANE COVE $M CITYLINK HILLS M2 TOLLAUST M1 ED ROAM OTHER TOTAL TUNNEL Toll revenue 235.4 72.4 30.7 - 47.1 - - 385.6 Fee & other revenue 21.2 1.1 0.7 3.6 - 8.2 10.6 45.4 Total revenue 256.6 73.5 31.4 3.6 47.1 8.2 10.6 431.0 Total cost (49.
Slide 35: Result by Asset – 100%
RESULT BY ASSET – 100% EQUITY ASSETS – 31 DECEMBER 2011 M5 SOUTH WEST POCAHONTAS 495 EXPRESS $M WESTLINK M7 DRIVE TOTAL MOTORWAY 895 LANES Toll revenue 87.8 101.5 7.0 - - 196.3 Fee & other revenue 5.4 1.4 0.1 - - 6.9 Total revenue 93.2 102.9 7.1 - - 203.2 Total cost (13.4) (22.5) (2.6) - (2.5) (41.0
Slide 36: Free Cash Flow
FREE CASH FLOW 31 DEC ‘12 ($M) 31 DEC ‘11($M) % CHANGE Cashflows from operating activities (Refer Group Statutory Accounts) 181.0 182.8 (1.0%) M7 Term Loan Notes received (18.7) (10.4) (79.8%) Payments for maintenance capital expenditure 5.3 13.1 (59.5%) Cashflows from operating activities – M1 and
Slide 37: Reconciliation of Free Cash
RECONCILIATION OF FREE CASH EBITDA GROWTH TRANSLATING INTO FREE CASH 31 DEC ‘12 ($M) 31 DEC ‘11 ($M) % CHANGE Proportional EBITDA 416.9 390.0 6.9% Adjusted for proportional: Maintenance provision 15.4 11.7 31.6% Operating and working capital movements (8.2) (15.7) 47.8% Non-cash items (6.2) (1.1) (4
Slide 38: Taxation
TAXATION STATUTORY AND PROPORTIONAL STATUTORY TAX PAID / (REFUNDS RECEIVED) 31 DEC ‘12 31 DEC ’11 INCLUDES ($M) ($M) Corporate - 1.7 M1 Eastern Distributor (7.3) (38.7) M4 0.3 (0.1) Transurban US - (0.6) Westlink holding companies (1.9) (1.0) TOTAL (8.9) (38.7) PROPORTIONAL (TAX PAID) / REFUNDS RECE
Slide 39: Maintenance Expense
MAINTENANCE EXPENSE INCLUDED IN OPERATING COSTS ADDITIONAL MAINTENANCE PROVISION RECOGNISED DURING THE YEAR – 100% 31 DEC ‘12 ($M) 31 DEC ‘11 ($M) CityLink 5.2 4.0 Hills M2 1.1 0.9 Lane Cove Tunnel 2.4 2.4 M1 Eastern Distributor 2.3 2.1 M5 South West Motorway 2.3 1.2 Westlink M7 5.2 3.8 Pocahontas 8
Slide 40: Finance Costs – December 2012
FINANCE COSTS NET FINANCE COSTS PAID – 31 DECEMBER 2012 NON-CASH ITEMS CONCESSION AND PROPORTIONAL STATUTORY DEBT FEES ACCRETION, OTHER NON-CASH NET INTEREST OWNERSHIP MAINTENANCE NET INTEREST NET INTEREST AMORTISATION TIFIA & TLN ITEMS PAID UNWIND PAID Controlled entities CityLink 100% (27.6) 1.0 3
Slide 41: Finance Costs – December 2011
FINANCE COSTS NET FINANCE COSTS PAID – 31 DECEMBER 2011 NON-CASH ITEMS CONCESSION AND ACCRETION, PROPORTIONAL STATUTORY DEBT FEES OTHER NON-CASH NET INTEREST OWNERSHIP MAINTENANCE TIFIA, TLN & NET INTEREST NET INTEREST AMORTISATION ITEMS PAID UNWIND USPP PAID Controlled entities CityLink 100% (34.9)
Slide 42: Appendix 2: Detailed Treasury and Funding
APPENDIX 2 DETAILED TREASURY AND FUNDING
Slide 43: Group Drawn Debt
GROUP DRAWN DEBT AT 31 DECEMBER 2012 TRANSURBAN CORPORATE DEBT AUD ($M) USD ($M) Working capital lines1 7 197 Term bank debt 600 - US Private Placements 1,336 162 Domestic AUD bonds 1,050 - Canadian MTN (CAD Notes) 233 - Total 3,226 359 NON RECOURSE (AUD $ million) ASSET DEBT OWNERSHIP PROPORTIONAL
Slide 44: Total Group Drawn Debt
TOTAL GROUP DRAWN DEBT PROPORTIONAL DRAWN DEBT GROUP DEBT 31 DEC ‘12 30 JUN ‘12 MOVEMENT EXPLANATION AUD1 Corporate 3,226 3,219 7 $7m increase in drawn working capital. $51m increase in M2 Hills debt drawn for the upgrade project. $11m increase in M5 debt Non recourse 2,253 2,189 64 drawn for the wi
Slide 45: Key Debt Metrics
KEY DEBT METRICS 31 DEC ‘12 30 JUN ‘12 TRANSURBAN NON TRANSURBAN NON CORPORATE CORPORATE GROUP RECOURSE GROUP RECOURSE Weighted average maturity (years) 1 9.6 yrs 4.4 yrs 13.3 yrs 9.6 yrs 5.1 yrs 12.8 yrs Weighted average cost of AUD debt 2 6.6% 6.5% 6.9% 6.9% 6.9% 7.0% Weighted average cost of USD
Slide 46: Corporate Debt Maturities
CORPORATE DEBT MATURITIES BY FINANCIAL YEAR – AS AT 31 DECEMBER 2012 1. Debt is shown in financial year it matures. 2. Debt values are as at 31 December 2012. C$ and US$ debt converted at the hedged rate where cross currency swaps are in place. Unhedged US$ debt converted to A$ at spot exchange rate
Slide 47: Asset Debt Maturities
ASSET DEBT MATURITIES BY FINANCIAL YEAR – AS AT 31 DECEMBER 2012 95 Express Lanes TIFIA Funding 95 Express Lanes Private Activity Bonds Pocahontas TIFIA Funding Pocahontas Term Bank Debt 495 Express Lanes TIFIA Funding 495 Express Lanes Private Activity Bonds 495 Express Lanes Letter of Credit Lane
Slide 48: Appendix 3: Portfolio Summary
APPENDIX 3 PORTFOLIO SUMMARY
Slide 49: Operating Asset Portfolio
OPERATING ASSET PORTFOLIO SUMMARY STATISTICS M5 SOUTH WEST M1 EASTERN LANE COVE 495 EXPRESS HILLS M2 WESTLINK M7 CITYLINK POCAHONTAS 895 MOTORWAY DISTRIBUTOR TUNNEL LANES OVERVIEW NSW NSW NSW NSW NSW VIC Virginia, USA Opening date AUG1992 MAY 1997 DEC1999 DEC 2005 MAR 2007 DEC 2000 JAN 2002 NOV 2012
Slide 50: Tolling Escalation
TOLLING ESCALATION EMBEDDED INFLATION PROTECTION MOTORWAY ESCALATION* Escalated quarterly by quarterly CPI. The toll cannot be lowered as a result of deflation, however, until inflation counteracts the deflation the toll M5 South West Motorway* cannot be increased. Hills M2* Escalated quarterly by t
Slide 51: Victoria Detailed Map
+ Population farecast to grow by + Population forecast to increase by 97,000 at least 118,000 peopte by 2031 people over the next 30 years + Almost 44,000 new homes + Employment expected to grow to between needed to support growth 90,000 and 95,00 jabs over the next 30 years Donnybrook s Whittlesea
Slide 52: NSW Detailed Map
RX QQ. MQ a»W SS S QQQ_EEAE_EA AA MAA QA A DETAILED + Population forecast to increase 30% (to nearly 260,000) from 2011 to 2034 + Employment forecast to increase more than 20% {to 93,000] from 2009 to 2025 | © An estimated 99,000 jobs created by 2036 - with over x 55,000 in the immediate vicrity oft
Slide 53: Click to edit Master text styles
Click to edit Master text styles Second level > Third level 52