Atlas Arteria · ASX:ALX
Atlas Arteria — Macquarie Atlas Roads — 1H 2014 Earnings Presentation
38 slides from Atlas Arteria's earnings presentation, Aug 28, 2014
Slide 1: 2014 Half Year Results Presentation
Macquarie Atlas Roads 2014 Half Year Results Presentation 28 August 2014
Slide 2: Important notice and disclaimer
I t t notice Important ti and d disclaimer di l i 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
Slide 3: Important notice and disclaimer
I t t notice Important ti and d disclaimer di l i Japan These materials have been prepared solely for qualified institutional investors in Japan as defined under the Financial Instruments and Exchange Act of Japan (FIEA) . They do not constitute an offer of securities for sale in Japan and no regist
Slide 4: Table of Contents
T bl off Contents Table C t t Overview 01 4 Peter Trent, Chief Executive Officer Financial Performance 02 8 Mary Nicholson, Chief Financial Officer Asset Review 03 13 Peter Trent, Chief Executive Officer 04 Questions 29 MACQUARIE ATLAS ROADS PAGE 3
Slide 5: Overview
Overview Peter Trent Chief Executive Officer
Slide 6: 1H 2014 Snapshot
1H 2014 S h t Snapshot Growth in portfolio traffic traffic, revenue and EBITDA levels Traffic 1H 2014 Statutory results summary Loss after tax: A$67.9m (1H 2013: A$1,403.0m profit) +1.8% Current period includes full 2014 performance fee expense. Impact of M6 Toll deconsolidation in 2013 Revenue
Slide 7: 1H 2014 segmented results
1H 2014 segmented t d results lt Improving performance recorded on MQA’s MQA s key assets – APRR and Dulles Greenway Portfolio results dominated by APRR performance 9.3% Positive traffic and toll increases across all assets except Chicago Skyway Operating expenses on ITR affected by one off co
Slide 8: Other corporate activities
Oth corporate Other t activities ti iti MQA increased its economic interest in APRR in July 2014 The Acquisition Purchase of a further 0.71% indirect interest in APRR, settled on 29 July 2014 Economic interest in APRR increased from 19.44% to 20.14% Acquisition price of €41.5m1 consistent with
Slide 9: Financial Performance
Financial Performance Mary Nicholson Chief Financial Officer
Slide 10: Consolidated profit & loss account
Consolidated profit p & loss account Statutory accounts – half year ended 30 June 2014 Half year to Half year to Revenue R includes i l d M6 Toll T ll management A$m 30 Jun 14 30 Jun 13 fee income (annual fee of £750,000 Revenue 1.0 0.2 indexed, paid in July and January) Performance fees (58.2) -
Slide 11: Consolidated balance sheet
Consolidated balance sheet Statutory accounts – as at 30 June 2014 A$m 30 Jun 14 31 Dec 13 Investments I in i associates i includes i l d APRR Current assets 23.1 19.6 and Dulles Greenway accounted for using the equity method Investments in associates 777.5 862.7 Total assets 800.6 882.3 Current
Slide 12: MQA cash flow summary
h flflow summary MQA cash Available cash (A$m) Half year to Half year to Distribution Di ib i from f Financière Fi iè Eiffarie Eiff i off 30 Jun 14 30 Jun 13 €25.6m in March 2014 (€14.6m in March Opening balance – 1 January 17.7 13.7 2013) Distributions from assets 39.6 18.5 Interest on corporate
Slide 13: MQA distribution
MQA di t ib ti distribution MQA 2H 2014 distribution guidance of 8 8.2 2 cents per security Subject to foreign exchange movements and unforeseen events Expect to declare in September and pay in early October Distribution 100% from MARIL. Components will be advised following the conclusion of a
Slide 14: Asset Review
Asset Review Peter Trent Chief Executive Officer
Slide 15: Dulles Greenway 1H 2014 Results
D ll G Dulles Greenway 1H 2014 R lt Results Traffic +1.8% Strong gp performance despite p severe winter conditions in the first quarter 47,686 ADT Revenue Supported by the April 2014 toll increases of 4.1% +3.4% (peak)) a (pea and d 2.4% % (o pea )1 (off-peak) US$38.2m Limited toll elasticity
Slide 16: Dulles Greenway performance
D ll G Dulles f Greenway performance Positive traffic growth observed in 2013 continuing into 2014 Growth in EBITDA supported by traffic growth and toll increases Distribution outlook: no distributions expected before 2019 EBITDA (US$m) vs traffic (ADT) US$m ADT 60 50,000 50 49,000 40 48,000 30
Slide 17: Dulles Greenway traffic corridor
D ll G Dulles t ffi corridor Greenway traffic id Dulles Greenway well placed to provide capacity as corridor develops Greenway share of traffic increases as corridor traffic volumes rise Following significant increases, MWAA intends to freeze tolls on the adjoining Dulles Toll Road through to 20
Slide 18: Dulles Greenway financial performance
D ll G Dulles Greenway fifinancial i l performance f Revenue (+3 (+3.4%) 4%) Driven by positive traffic performance and toll increases in effect from 11 April 2014 Operating expenses (+2.6%) Impacted by higher property taxes and winter maintenance expenses Dulles Greenway operating expenses (US$
Slide 19: Dulles Greenway – other developments
D ll G Dulles th d Greenway – other l t developments Capital expenditure Total capex estimated to be US$4.5m for 2014, which includes pavement resurfacing work of ~US$3m Average total annual capex guidance of ~US$2 ~US$2.5m 5m (real) between 2015 20191 2015-2019 State Corporation Commission hear
Slide 20: APRR/Eiffarie 1H 2014 Results
APRR/Eiff i 1H 2014 R APRR/Eiffarie lt Results Traffic +2.0% Traffic continues to improve p for both light g and heavy y vehicles 10.2bn VKT Revenue +2.8% Toll increases in February 2014 of 0.80% for APRR and 0.84% for AREA €1,029.0m EBITDA +3.7% EBITDA margin increased to 71.0% (1H 2013: 70.4
Slide 21: APRR/Eiffarie traffic analysis
APRR/Eiff i traffic APRR/Eiffarie t ffi analysis l i Total VKT up 2 2.0% 2014, benefiting from milder winter conditions and rail strikes in June 0% in 1H 2014 Light vehicles – Half yearly growth on pcp Total – Half yearly growth on pcp 4.0% 3.0% 2.0% 2.0% 2.0% 0.0% % 1H 12 2H 12 1H 13 2H 13 1H 14 (2
Slide 22: APRR performance
f APRR performance EBITDA and EBITDA margin improvements reflect traffic growth and flat operating expenses Revenue (+2.8%) Operating Expenses (+0.6%) Toll revenue attributed to higher traffic levels and toll Impacted by additional land tax2 introduced in July 2013 increases in February Partia
Slide 23: APRR traffic – light vehicles
APRR ttraffic ffi – light li ht vehicles hi l Light vehicle traffic has outperformed GDP Traffic performance continues to be aligned to growth of real household disposable income APRR Light Vehicles and Economic Indicators1,2 110 105 100 95 90 85 80 2005 2006 2007 2008 2009 2010 2011 2012 2013 201
Slide 24: APRR traffic – heavy vehicles
APRR ttraffic ffi – heavy h hi l vehicles Heavy vehicles correlated to French manufacturing Import volumes an additional factor APRR Heavy Vehicles and Economic Indicators1,2 110 100 90 80 70 60 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 HV Traffic Imports Manufacturing 1. Moving 12 month a
Slide 25: European economy outlook
E European tl k economy outlook French economy remains weak weak, as does Europe generally France, Germany and Eurozone GDP forecasts1 2.50% 2.00% 1.50% 1.00% 0.50% 0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 France Germany Eurozone 1. Sources: 2014-2015: Consensus Economics August 201
Slide 26: APRR bond issues
APRR b d iissues bond APRR well supported in bond markets 2014 APRR debt issuances – January: €500m EMTN issued due in 2020 (margin of 90bps over mid-swaps) coupon of 2.25% – April: €500m floating rate notes due in 2019 (margin of 75bps over 3 month EURIBOR) APRR Bonds: Mid-Yield to Maturity1 6.0%
Slide 27: APRR/Eiffarie debt maturity profile
APRR/Eiff i debt APRR/Eiffarie d bt maturity t it profile fil Financing costs expected to reduce through lower interest rates and deleveraging over time APRR debt principal movements in 1H 2014: – Debt raised of €1,000m, debt repaid of €365m APRR/Eiffarie Debt Maturity Profile (€m)1 4,500 3,966 4,
Slide 28: APRR/Eiffarie – looking forward
APRR/Eiff i – looking APRR/Eiffarie l ki fforward d Stimulus package Additional capex under government stimulus package in return for concession extensions Subject to European Commission and government determinations expected to be concluded during 2014 Land tax Land tax (operational tax based
Slide 29: Other assets
Other assets 1H 2014 results Assets Traffic Revenue EBITDA Comments Chicago Performance impacted by lower light vehicle traffic due to Skyway severe winter conditions. -1.4% -0.4% -1.0% Revenue increase reflects a favourable traffic mix as well as toll increases implemented on 1 July 2013. Operating
Slide 30: Questions
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Slide 31: Appendix
APPENDIX STRICTLY CONFIDENTIAL
Slide 32: Cash flow: APRR to MQA shareholders
C h flflow: APRR tto MQA shareholders Cash h h ld Cash flow: APRR to MQA shareholders Eiffarie/Financière Eiffarie APRR dividend A add APRR tax instalments to FE B add Other1 C less Eiffarie net interest D less FE tax payments/provisions E Distributable cash F=A+B+C–D–E less Debt repayment G = max (
Slide 33: Cash flow: APRR to MQA shareholders (cont'd)
C h flflow: APRR tto MQA shareholders Cash h h ld ((cont’d) t’d) Cash flow: APRR to MQA shareholders Eiffarie/Financière Eiffarie (€m) 2H 2012 1H 2013 2H 2013 1H 2014 APRR dividend 121 188 213 241 add APRR tax instalments to FE 117 125 120 196 add Other1 2 (23) 5 (2) less Eiffarie net interest (103)
Slide 34: APRR free cash flow
APRR ffree cash h flflow Financière Eiffarie distributions, distributions and therefore MQA distributions distributions, reflect only a portion of APRR free cash flow APRR consistently generates cash flow in excess of net profit. The excess is used to fund capex and debt repayments at the APRR lev
Slide 35: MQA free cash flow
f MQA free h flow cash fl Cash flow: APRR to MQA shareholders FY 2013 APRR free cash flow (€m) 737 Eiffarie net interest (€m) (224) Eiffarie opex (€m) (1) Tax grouping (€m) 174 Consolidated free cash flow (€m) 686 MQA’s proportionate share in € (19.44%) (€m) 133 MQA’s proportionate share in A$ (19.4
Slide 36: MQA statutory accounts
t t t MQA statutory t accounts Statutory accounts for the half year ended 2014 Statutory accounting MQA equity accounts all assets All assets t are non-controlled t ll d assets t Equity accounting Initially recognise assets at acquisition value1 P&L Account: recognise share of accounting pro
Slide 37: Statutory accounts vs Management Information Report (MIR)
Statutory y accounts vs Management Information Report (MIR) Statutory result for the period Proportionally consolidated financial performance Non-controlled toll road assets results included in share of Aggregation of operating results of proportionate interests in all toll road profits/losses from
Slide 38: Proportionately consolidated financial performance
Proportionately consolidated financial f performance Actual Pro Forma Actual 6 months ended 6 months ended Change vs 6 months ended A$m 30 Jun 14 30 Jun 13 1 pcp 30 Jun 13 2 Proportionate Revenue 361.9 351.6 2.9% 354.2 Proportionate Operating expenses (102.4) (100.0) (2.3%) (94.9) Proportionate EBIT
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