63 slides from Irb Infrastructure Developers's earnings presentation, December 2023
Slide 1: Investor Presentation Q3FY24
Investor Presentation | Q3FY24 India’s First Multi-National Infrastructure Company in the Highways Sector Hyderabad Outer Ring Road
Slide 2: Table of Contents
Table of Contents Financial Highlights Page 2 Result Highlights Page 5 Business Overview Page 10 IRB Parent Overview Page 26 Private InvIT Overview Page 33 Public InvIT Overview Page 43 Appendix – Additional Financial Info Page 50 Appendix II – Sector Overview Page 55
Slide 3: Financial Highlights for Q3FY24
Financial Highlights for Q3FY24 • IRB Infrastructure Trust (Private • Refinancing at Private InvIT- IRB • Rated among the top Infra InvIT) bags TOT -13 Project and Infrastructure Trust completed the Companies in India for ESG: signed the concession agreement. Refinancing of Debt of Rs. 63.90 Bn Rati
Slide 4: Rejig in the Management
Rejig in the Management In line with overall growth in business of IRB Group, board of IRB has approved rejig in the management: As CEO – Corporate, Dr. Satinder Singh Rana will oversee the following business areas - finance, accounts, taxation, corporate affairs, interaction with clients and repres
Slide 5: Result Highlights
Result Highlights Private & Confidential
Slide 6: Financial Summary (Quarterly YoY)
Financial Summary (Quarterly YoY) INR in Million Total all segments Construction Segment BOT Segment Particulars Q3FY24 Q3FY23 Q3FY24 Q3FY23 Q3FY24 Q3FY23 Revenue 20,773 15,702 14,407 10,165 6,366 5,537 EBITDA 9,782 8,006 4,106 2,910 5,677 5,097 EBITDA margin 47% 51% 28% 29% 89% 92% Financial expens
Slide 7: Financial Summary (9 Months)
Financial Summary (9 Months) INR in Million Total all segments Construction Segment BOT Segment Particulars 9MFY24 9MFY23* 9MFY24 9MFY23 9MFY24 9MFY23 Revenue 56,973 50,044 38,598 34,290 18,375 15,754 EBITDA 27,914 26,930 11,592 12,492 16,323 14,438 EBITDA margin 49% 54% 30% 36% 89% 92% Financial ex
Slide 8: Financial Summary – Net cash for H1FY24
Financial Summary – Net cash for H1FY24 7
Slide 9: Consolidated Financials: Strong Track Record
Consolidated Financials: Strong Track Record REVENUE (INR MN) EBITDA & MARGIN (INR MN) 53% 53% 45% 49% 70,472 63,554 67,033 33,492 35,307 31,664 54,875 27,016 51% 47% 15,702 20,773 8,006 9,782 FY 2020* FY 2021* FY 2022 FY 2023 Q3FY23 Q3FY24 FY 2020* FY 2021* FY 2022 FY 2023 Q3FY23 Q3FY24 NET DEBT &
Slide 10: Business Overview
Business Overview Private & Confidential
Slide 11: Integrated Highway Developer Connecting India by Developing World Class Highway Infrastructure
Integrated Highway Developer Connecting India by Developing World Class Highway Infrastructure Pan India presence c. 22 years c. 20% INR 800 bn+ Weighted Of Golden 12 Highway asset 15,444 lane average Quadrilateral States in India base, one of the KM residual owned and where assets largest in India
Slide 12: Owns and Manages c. 15,000 Lane KM of Roads across 12 States in India
Owns and Manages c. 15,000 Lane KM of Roads across 12 States in India India’s leading portfolio of road assets (lane KMs)1 Under construction Operational 15,444 2,161 13,283 8,400 8,400 5,473 5,363 5,473 4,510 3,398 3,398 1,710 1,212 853 1,710 1,212 IRB Cube Indinfravit Trust Adani Oriental HIT (KKR
Slide 13: Fully Integrated Player with In-House Design, Construction, O&M Capabilities
Fully Integrated Player with In-House Design, Construction, Operations and Maintenance Capabilities ▪ Highly evolved design capabilities ▪ In-house capabilities, with a pool of through 40+ years of experience expert workforce, to carry out EPC ▪ Use of high-grade polymer modified (Construction) and
Slide 14: Efficient O&M Practices, Employing Latest Technology, With a Strong Focus on ESG
Efficient O&M Practices, Employing Latest Technology, With a Strong Focus on ESG Technology driven maintenance regime ▪ Site level data capture ▪ Predictive analytics ▪ Timely preventive & corrective maintenance ▪ Benchmarking with global standards Real time operations, monitoring & control ESG comp
Slide 15: Supported by Marquee Financial and Strategic Investors
Supported by Marquee Financial and Strategic Investors The largest equity fund raise by a listed Indian infrastructure developer in the roads and highways sector Ownership structure post transaction Access to technical expertise, global experience and long term capital 1 ‒ Cintra brings in 50+ years
Slide 16: Only Integrated Development Platform in India
Only Integrated Development Platform in India Catering to Shareholders with Diverse Risk Appetite Distribution1 Strategy: To Offer HAM Distribution1 assets to Public InvIT after Construction completion Holdco 16% Margin + / - WC 100% 100% BOT / TOT / HAM CONSTRUCTION Private InvIT (IRB 51%, 5 Assets
Slide 17: Approach adopted by analysts for valuation of Integrated Developer Model
Approach adopted by analysts for valuation of Integrated Developer Model Particulars Methodology Value of concession Business DCF of FCFE over concession life Value of Construction Business PE Multiple or EV/EBIDTA Value of Non core assets (Land bank and airport) Multiple on Investment Total Value o
Slide 18: Value evolution for a typical BOT Concession over its life cycle
Value evolution for a typical BOT Concession over its life cycle 17
Slide 19: Current Ratings for Long Term Credit Facilities
Current Ratings for Long Term Credit Facilities IRB Infrastructure Developers Modern Road Makers Private 1 2 Limited Limited IND AA- / Stable CARE AA- / Stable Crisil AA- / Stable IRB MP Expressway Private Meerut Budaun 3 4 Expressway Limited Limited IND AA / Stable IND A- / Stable Pathankot Mandi I
Slide 20: Share Price Performance
Share Price Performance IRB share price (rebased to 100) DEC 2023: Achieved AUG 2023: Achieved Appointed date for SS BOT 300.0 DEC 2021: Cintra & GIC OCT 2022: Sale of VK1 FEB 2023: Awarded Appointed date for new BOT project APR 2023: Awarded Project and awarded new close IRB transaction HAM asset a
Slide 21: Board Driven Robust Governance Policies
Board Driven Robust Governance Policies Policies Committees ▪ Environment policy ▪ Corporate Social Responsibility Committee ▪ Code of Conduct ▪ Risk Management Committee ▪ ESG Committee of Management Assurance ▪ ESG Commitments ▪ Human rights Policy ▪ Corporate Social Responsibility Policy ▪ Health
Slide 22: Strategic Focus: Bid for a Diversified Portfolio of BOT, TOT and HAM Projects
Strategic Focus: Bid for a Diversified Portfolio of BOT, TOT and HAM Projects, Spread Across India, for Optimal Risk – Return Mix 1 Bid for new assets 2 Diversify presence ▪ NHAI expected to award BOT projects worth INR 200 bn and TOT bundles amounting to INR 400 ▪ Strategically expand its presence
Slide 23: Constantly Evolving EPC Capabilities
Constantly Evolving EPC Capabilities: Moving Up the Project Complexity Value Chain, Successfully Raising Funds at Crucial Junctures 1977 1995 2004 2008 2016 2017 2018 2020 2021 2023 Length: Length: Length: 1,234 1,396 LKM 1,168 LKM Cost: INR LKM Cost: 108 bn Cost: INR 11 Raised INR Length: Length: R
Slide 24: Strong Focus on Protecting the Environment and Giving Back to the Community
Strong Focus on Protecting the Environment and Giving Back to the Community Ferrovial is a sustainability champion, ranking highly in various indices… IRB has a strong focus on environment, sustainability and community, which is expected to be further strengthened through Ferrovial’s expertise ▪ Fer
Slide 25: Business Responsibility and Sustainability Reporting
Business Responsibility and Sustainability Reporting, Mandatory for Listed Companies FY23 Onward1, to Bring About Reporting Transparency Business responsibility and sustainability reporting (BRSR) is intended towards having quantitative and standardized disclosures on ESG parameters, to enable compa
Slide 26: IRB Parent Overview
Overview IRB Parent Private & Confidential
Slide 27: Strong In-house Project Design, Execution and Maintenance Capabilities
Strong In-house Project Design, Execution and Maintenance Capabilities Strong construction track Efficient project execution Ability to independently record capabilities Large equipment bank bid for large contracts In-house O&M capabilities ▪ Access to best global ▪ One of the largest fleet of ▪ Exp
Slide 28: Well Poised to Maintain Margins with Adequate Escalation Provisions
IRB is Well Poised to Maintain Margins with Adequate Escalation Provisions for Raw Material Prices Cement price (INR per bag) 275 281 282 275 266 269 273 270 261 242 246 246 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Reinforcement steel price (INR per MT) 63,
Slide 29: WPI Linked Toll Rates Provide Protection to Toll Cash Flows
WPI1 Linked Toll Rates Provide Protection to Toll Cash Flows in an Inflationary Environment with Increasing Interest Rates ▪ Toll rates are linked to inflation ▪ For NHAI projects that were bid for after 2008, toll rate is revised annually in April at 3% fixed rate, plus 40% of change in WPI for Dec
Slide 30: Healthy Mix of BOT, TOT and HAM Projects
Healthy Mix of BOT, TOT and HAM Projects Original S. Project cost Lane # of Project Counterparty State Concession Status No. (INR mn) KMs Lanes ( in Years) 2 BOT projects 1 Ahmedabad Vadodara NHAI Gujarat 48,800 987 6 25 Tolling start: January 1, 2013 Received Appointed Date as 2 Ganga Expressway –
Slide 31: Mumbai Pune TOT – A Crown Jewel in IRB’s Portfolio
Mumbai Pune TOT – A Crown Jewel in IRB’s Portfolio One of the busiest highway corridors in India which is a part of the Golden Quadrilateral on the Mumbai-Chennai arm Project highlights Project snapshot Project snapshot ▪ Tolling operations, maintenance and transfer of Road ▪ YCEW - 94 Km , NH-48 –
Slide 32: BOT Toll Revenue Comparative – IRB Projects
BOT Toll Revenue Comparative – IRB Projects Amount in INR mn ** MUMBAI - PUNE Quarter 2019-20 2020-21* 2021-22* 2022-23 2023-24 % Variance Jun 2,470 1,167 2,373 3,606 4,238 17.5% Sept 939 2,191 3,055 3,347 4,105 22.7% Dec - 3,106 3,462 3,687 4,405 19.5% Mar 621 3,221 3,342 3,605 Total 4,031 9,685 12
Slide 33: IRB Private InvIT Overview
InvIT IRB Private Private & Confidential 32
Slide 34: Private InvIT: IRB Infrastructure Trust
Private InvIT: IRB Infrastructure Trust (Portfolio of 15 Assets) Asset location Asset overview Sr. Project Lane No Project State cost Status KM . (INR mn) 1 Goa Kundapur Karnataka 34,770 758 PCOD achieved 2 Solapur Yedeshi Maharashtra 15,900 395 COD achieved Haryana 3 Yedeshi Aurangabad Maharashtra
Slide 35: Nehru Outer Ring Road TOT project in Hyderabad
Nehru Outer Ring Road TOT project in Hyderabad 158 km, 8 lane access-controlled corridor in one of the youngest state of our Country Project highlights Project snapshot Project snapshot Road length ▪ 158 km (1,264 lane kms) ▪ Tolling, Operation, Maintenance & Transfer of Overview Nehru Outer Ring Ro
Slide 36: Lalitpur Lakhnadon TOT – New addition in the Portfolio
Lalitpur Lakhnadon TOT – New addition in the Portfolio 316 km, 4 lane road on North South Corridor connecting Srinagar to Kanyakumari Project highlights Project snapshot Project snapshot Road length ▪ 316.084 km (1,264 lane kms) ▪ Tolling, Operation, Maintenance & Transfer of Lalitpur – Sagar – Lakh
Slide 37: TOT-13 Bundle (a) Gwalior Jhansi Section on NH-44
TOT – 13 Bundle (a) Gwalior Jhansi Section on NH-44 ~ 83 km, 4 lane road on North South Corridor connecting Srinagar to Kanyakumari Project highlights Project snapshot Project snapshot ▪ Tolling, Operation, Maintenance & Road length ▪ 82.46 km (330 lane kms) Transfer Gwalior – Jhansi section from km
Slide 38: TOT-13 Bundle (b) Kota Bypass and Cable Stay Bridge on NH-76
TOT – 13 Bundle (b) Kota Bypass and Cable Stay Bridge on NH-76 ~ 28 km, 4 lane road on East West Corridor connecting Gujarat and Assam Project highlights Project snapshot Project snapshot ▪ Tolling, Operation, Maintenance & Transfer Road length ▪ 27.82 ( 111 lane kms) of Kota Bypass and Cable Stay B
Slide 39: Strong Recovery in Toll Collection Across Projects
Strong Recovery in Toll Collection Across Projects Daily toll collection (INR mn) 88.4 77.3 80.2 78.9 70.8 64.6 64.9 63.8 56.9 62.3 63.2 61.4 65.0 62.3 53.6 52.5 53.0 55.1 57.2 57.0 51.9 Apr May Jun Jul Aug * Sep Oct Nov Dec Jan Feb Mar FY23 FY24 Total toll collection (INR mn) 7,488 2366 2635 2487 2
Slide 40: BOT Toll Revenue Comparative – Private InvIT Projects
BOT Toll Revenue Comparative – Private InvIT Projects Amount in INR mn Gulabpura Chittorgarh Hapur Moradabad Quarter 2019-20 2020-21* 2021-22* 2022-23 2023-24 % Variance Quarter 2019-20 2020-21* 2021-22* 2022-23 2023-24 % Variance Jun 419 217 329 822 931 13.4% Jun 132 180 310 388 767 97.9% Sept 394
Slide 41: BOT Toll Revenue Comparative – Private InvIT Projects
BOT Toll Revenue Comparative – Private InvIT Projects Amount in INR mn Kishangarh Gulabpura Agra Etawah Quarter 2019-20 2020-21* 2021-22* 2022-23 2023-24 % Variance Quarter 2019-20 2020-21* 2021-22* 2022-23 2023-24 % Variance Jun 294 146 209 303 615 102.6% Jun 206 150 419 550 588 6.9% Sept 279 248 2
Slide 42: BOT Toll Revenue Comparative – Private InvIT Projects
BOT Toll Revenue Comparative – Private InvIT Projects Amount in INR mn Solapur Yedeshi Palsit Dankuni Quarter 2019-20 2020-21* 2021-22* 2022-23 2023-24 % Variance Quarter 2022-23 2023-24 % Variance Jun 181 90 167 308 367 18.9% Jun 545 469 -13.8% Sept 150 158 194 295 308 4.1% Sept 498 396 -20.4% Dec
Slide 43: IRB Public InvIT Overview
InvIT IRB Public Private & Confidential
Slide 44: Structure of Public InvIT
Structure of Public InvIT Fund structure Unit holders holding more than 1% as on Dec 31, 2023 Sr. % UNITHOLDERS HOLDING MORE THAN 1% Holding Investor in units of trust No. 1 IRB INFRASTRUCTURE DEVELOPERS LIMITED 15.97 Quarterly distribution 2 GOVERNMENT OF SINGAPORE 7.41 ADITYA BIRLA SUN LIFE TRUSTE
Slide 45: Public InvIT (Portfolio of 6 Assets)
Public InvIT (Portfolio of 6 Assets) ▪ Listed in May-2017 with initial portfolio of six operational assets; seventh asset was transferred in Sep-2017 ▪ Two assets were successfully completed and handed back to the authority. One HAM asset acquired in Oct-2022 ▪ BOT-Toll assets with proven traffic hi
Slide 46: Strong Recovery in Toll Collection Across Projects
Strong Recovery in Toll Collection Across Projects Daily toll collection (INR mn) * 27.7 27.9 27.6 27.5 29.1 26.0 26.1 26.5 27.0 25.8 27.4 25.9 27.0 26.2 25.6 25.7 24.2 24.2 24.8 25.6 23.5 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY23 FY24 Total toll collection (INR mn) * 810 902 832 865 853
Slide 47: Financial Highlights
Financial Highlights Gross income1 (INR mn) EBITDA (INR mn) 81% 80% 80% 83% 80% 12,701 14,003 12,334 11,609 11,584 10,386 9,989 10,218 9,343 8,279 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 EBITDA margin Net distributable cash flow (INR mn) Net debt2 (INR mn) 0.2x 0.2x 0.2x 0.2x 0.3x 7,639 22
Slide 48: Unit Price Performance Since Inception
Unit Price Performance Since Inception Price (rebased to 100) Distribution per unit (DPU) 300.0 INR FY18 FY19 FY20 FY21 FY22 FY23 DPU 10.6 12.3 10.0 8.5 9.0 8.0 Yield1 11.5% 16.4% 17.6% 20.8% 16.1% 13.4% 101% 200.0 18% 100.0 - May-20 Aug-20 Nov-20 Feb-21 May-21 Aug-21 Nov-21 Feb-22 May-22 Aug-22 Nov
Slide 49: IRB 2.0 is well geared to respond to the upcoming market opportunities
Key Takeaways 1 Large pipeline of future growth with upcoming national & state highway bids 2 Proven credentials in the highways space Significant improvement in financial metrics post GIC and Cintra –transaction ; further supported by 3 monetization of VK1 HAM Asset 4 Access to complementary capabi
Slide 50: Appendix I: Additional Financial Information
Appendix I Additional Financial Information Private & Confidential
Slide 51: Financial Summary (Quarterly - QoQ)
Financial Summary (Quarterly - QoQ) INR in Million Total all segments Construction Segment BOT Segment Particulars Q3FY24 Q2FY24 Q3FY24 Q2FY24 Q3FY24 Q2FY24 Revenue 20,773 18,745 14,407 12,862 6,366 5,883 EBITDA 9,782 9,241 4,106 4,053 5,677 5,188 EBITDA margin 47% 49% 28% 32% 89% 88% Financial expe
Slide 52: Financial Summary (Yearly)
Financial Summary (Yearly) INR in Million Total all segments Construction Segment BOT Segment Particulars FY23 FY22 FY23 FY22 FY23 FY22 Revenue 67,033 63,554 45,804 44,786 21,229 18,768 EBITDA 35,307 33,492 15,817 16,418 19,490 17,075 EBITDA margin 53% 53% 35% 37% 92% 91% Financial expenses 15,146 1
Slide 53: Offshore Bond Issue – Covenant Structure
Offshore Bond Issue – Covenant Structure Surplus IRB 100% Investments Business segment I 100% 51% 49% GIC Toll & HAM Private InvIT affiliates Business segment II 16% Construction Public InvIT Mumbai Pune TOT Engineering, construction, operation and maintenance of Ahd Vadodara BOT Key highlights Proj
Slide 54: Leverage Summary – Bond Covenant
Leverage Summary – Bond Covenant INR in Mn TTM ending TTM ending Particulars December 31, 2023 March 31, 2021 Business Segment I: Toll & HAM Revenues 22,985 16,112 EBITDA 14,425 14,532 Gross Debt 87,590 97,711 Business Segment II : Construction + Surplus from other businesses (Combined Gp) Revenues
Slide 55: Appendix II: Sector Overview
Appendix II Sector Overview Private & Confidential
Slide 56: Indian Road Sector Outlook
Indian Road Sector Outlook Healthy awarding activity seen during last 2-3 years While pace of construction slightly reduced in FY23, Consistent increase in Budgetary estimated to be maintained going forward.. improvement is expected going forward allocation 00’ KM KM 13,298 13,000 Capital Outlay for
Slide 57: Attractive Sector with Strong Underlying Fundamentals
Attractive Sector with Strong Underlying Fundamentals Indian highways exhibit strong fundamentals, secular growth trends and stable regulations ✓ Growing urbanization and rising personal disposable income Bharatmala Pariyojana Phase 1 Secular growth ✓ Amongst the fastest growing vehicle markets ✓ In
Slide 58: Roads Sector has a Significant Share in Government’s Infrastructure Development Pipeline
Roads Sector has a Significant Share in Government’s Infrastructure Development Pipeline National Monetization Pipeline PM Gati Shakti Master Plan ▪ Monetization of INR 6 tn of brownfield assets, with stable revenue streams, ▪ Construction of INR 111 tn of greenfield assets in the core infrastructur
Slide 59: Regulatory Overview
Regulatory Overview Variety of PPP Models with a highly evolved & stable regulatory regime backed by well established contract structure through NHAI Model Concession Agreement NHAI has successfully attracted investments in the roads sector through and array of PPP models Build Operate Transfer (BOT
Slide 60: Bankable Concession Terms
Bankable Concession Terms Key positive of Indian Roads & Highways sector Typical terms Details ▪ NHAI is an agency appointed by the federal government for development of roads and highways in India NHAI as counterparty ▪ NHAI is a quasi-sovereign entity with a ‘AAA’ rating ▪ Well-funded by federal g
Slide 61: Sector Witnessed Subdued Bid Activity Recently, Outlook Remains Positive
While the Sector has Witnessed Subdued Bid Activity Recently, Outlook Remains Positive Key sector trends 1 Weak bidding activity improved in FY23 2 Increased competition intensity 3 Asset Monetization Pipeline: A mixed bag Bids tendered for road projects (INR bn) ▪ FY23 witnessed continued ▪ Upto FY
Slide 62: Disclaimer
Disclaimer Except for the historical information contained herein, statements in this presentation and any subsequent discussions, which include words or phrases such as ‘will’, ‘aim’, ‘will likely result’, ‘would’, ‘believe’, ‘may’, ‘expect’, ‘will continue’, ‘anticipate’, estimate’, ‘intend’, ‘pla
Slide 63: Thank You
THANK YOU For Further Information, Kindly Contact : Investor relations : Investors.relations@irb.co.in 62