Atlas Arteria · ASX:ALX
Atlas Arteria — Macquarie Atlas Roads — FY2015 Earnings Presentation
35 slides from Atlas Arteria's earnings presentation, Feb 25, 2016
Slide 1: 2015 Full Year Results Presentation
Macquarie Atlas Roads 2015 Full Year Results Presentation 25 February 2016
Slide 2: Important notice and disclaimer
Important notice and 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
Slide 3: Important notice and disclaimer
Important notice and disclaimer 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 registration statement ha
Slide 4: Contents
Contents 01 Overview 4 Peter Trent, Chief Executive Officer 02 Financial Performance 7 Mark Goodrick, Chief Financial Officer 03 Asset Review 12 Peter Trent, Chief Executive Officer MACQUARIE ATLAS ROADS PAGE 3
Slide 5: Overview
1 Overview Peter Trent Chief Executive Officer MACQUARIE ATLAS ROADS
Slide 6: 2015 results summary
2015 results summary Continued portfolio performance in 20151 Traffic Revenue EBITDA 2.9% 3.5% 4.4% Statutory results • 2015 profit from operations: A$85.1m (2014: A$50.6m loss) Portfolio highlights • Strong growth in traffic, revenue and EBITDA across all portfolio assets • Concession extensions ac
Slide 7: 2015 asset portfolio results
2015 asset portfolio results Growth in traffic, revenue and EBITDA across all assets during 20151 APRR: Record performance despite absence of 2015 toll increase, reflective of an improvement in the French economic environment Dulles Greenway: Strong traffic growth due to further corridor populat
Slide 8: Financial Performance
2 Financial Performance Mark Goodrick Chief Financial Officer MACQUARIE ATLAS ROADS
Slide 9: Consolidated income statement
Consolidated income statement Statutory accounts Year ended Year ended Revenue includes M6 Toll management fee, A$m 31 Dec 15 31 Dec 14 interest income and Warnow Tunnel services fees Revenue 2.6 2.1 Full 2014 performance fee expensed in the year Performance fees - (58.2) ended 31 December 2014
Slide 10: Consolidated balance sheet
Consolidated balance sheet Statutory accounts As at As at Investments in associates includes APRR and A$m 31 Dec 15 31 Dec 14 Dulles Greenway accounted for using the equity method Current assets 83.6 31.0 Current liabilities includes the third instalment of Investments in associates 808.0 835.4
Slide 11: Cash flow summary
Cash flow summary Available cash (A$m) Year to Year to Distributions from Financière Eiffarie (FE) of 31 Dec 15 31 Dec 14 €28.6m in March 2015 and €56.6m in September Opening balance – 1 January 30.1 17.7 2015 Distribution from APRR 130.3 96.6 US$25.0m received following ITR sale. Net receipt fo
Slide 12: MQA distributions
MQA distributions 1H16 distribution guidance of 9.0 cps MQA Distributions (cps) Expect to declare in mid March 2016 with payment by March end 9.0 Wholly from MARIL, anticipated to include foreign dividend and capital 16.0 return components1 13.2 FY16 distribution guidance of 18.0 cps confirmed 9
Slide 13: Asset Review
3 Asset Review Peter Trent Chief Executive Officer MACQUARIE ATLAS ROADS
Slide 14: APRR 2015 milestones
APRR 2015 milestones Further value delivered through key achievements during the past 12 months In-principle agreement reached with Successful APRR bond issuances: Toll increases implemented on the French State: €1bn of bonds issued at or below 1.5%, 1 February 2016: APRR & AREA concession extension
Slide 15: APRR 2015 results
APRR 2015 results Traffic Revenue EBITDA 2.7% 3.0% 4.5% 22.2bn VKT €2,213.8m €1,588.6m1 Continued traffic growth across Revenue growth exceeded EBITDA improvement driven by light and heavy vehicles traffic growth despite absence revenue growth Consistent with an improvement of 2015 toll incr
Slide 16: APRR Traffic
APRR Traffic Consolidating further traffic growth in both light and heavy vehicles during 2015 Light Vehicles (VKTm) Heavy Vehicles (VKTm) Total Vehicles (VKTm) 19,500 3,400 23,000 +2.9% 22,500 +2.7% 19,000 +2.6% 3,200 22,000 21,500 18,500 3,000 21,000 20,500 18,000 2,800 20,000 19,500 17,500 2,600
Slide 17: APRR Traffic correlation
APRR Traffic correlation Light vehicle traffic remains correlated to real household disposable income Heavy vehicle traffic remains correlated to French manufacturing and imports APRR Light Vehicles and Economic Indicators1,2 APRR Heavy Vehicles and Economic Indicators1,2 110 110 105 105 100 100 95
Slide 18: French lending environment
APRR French lending environment Lending growth to non-financial corporations since mid-2014 suggests expansion of business activity Loans to Non-Financial Corporations (Annual Growth Rate)1 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 1. Bank of France
Slide 19: APRR Financial performance
APRR Financial performance Continued revenue growth and operating margin improvements 2015 Revenue Segmentation APRR Financial Performance2 €3,000m 80% 70.0% 70.3% 70.7% 71.8% 68.4% 69.2% Light Vehicles 2,149 2,214 2,039 2,099 60% 65% 2,022 1,940 €2,000m 629 625 611 624 623 Other1 614 3% 40% €1,000m
Slide 20: APRR Stable, resilient earnings growth
APRR Stable, resilient earnings growth Another year of record EBITDA performance, demonstrating resilience through economic cycles APRR EBITDA1 and France GDP Growth2 €1,750m 3.0% 1,589 1,520 €1,500m 1,475 2.0% 1,399 1,428 1,326 1,265 €1,250m 1,208 1,244 1.0% €1,000m 0.0% €750m (1.0%) €500m 1,068 (2
Slide 21: APRR Earnings
APRR Earnings 28% growth in earnings mainly driven by higher revenue and net interest savings €550m 9 44 539 €500m 14 17 9 19 10 26 50 12 €450m 56 65 442 420 €400m D&A, provisions, other 1 D&A, provisions, other Income tax 2,3 Operating taxes Operating taxes Net profit 2013 Net profit 2014 Net profi
Slide 22: APRR Financing costs
APRR Financing costs Progressive reduction in average cost of debt APRR group net interest decreased €44m in 2015, 14% down from pcp, with further interest saving opportunities in the medium term APRR rated BBB+ (Stable outlook) by both Standard & Poor’s and Fitch Sustainable debt maturity pro
Slide 23: Bond issues
APRR Bond issues APRR issued €1.0bn of bonds during 2015 €500m bond at 1.50% due 2024 €500m floating rate note at Euribor+70bps due 2020 APRR also signed a €275m loan facility with the European Investment Bank, at an average margin of 39bps over Euribor at the time of drawdown 6.0% APRR Bonds:
Slide 24: Dulles Greenway 2015 results
Dulles Greenway 2015 results Traffic Revenue EBITDA 5.4% 7.9% 5.1% 51,054 ADT US$85.1m US$66.2m1 Strong traffic performance Reflects traffic performance and EBITDA margin of 77.8% underpinned by continued toll increases in March 2015 EBITDA reduced by US$2.0m corridor population growth and
Slide 25: Dulles Greenway Traffic analysis
Dulles Greenway Traffic analysis Strong growth in off-peak traffic over the past 12 months Highest growth rates observed during off-peak periods on weekdays, reflecting increased leisure and convenience travel Dulles Greenway Traffic Segmentation1 2 104 Peak (weekdays) Non-Peak (weekdays) Weekend
Slide 26: Dulles Greenway Corridor growth
Dulles Greenway Corridor growth Corridor traffic expected to further increase with regional growth Loudoun county is one of the fastest growing and most affluent counties in the US, with the 4th fastest population growth and the highest median income in 20141 Employment, population and housing u
Slide 27: Dulles Greenway Performance
Dulles Greenway Performance A combination of higher traffic volumes and toll increases have led to consistent growth in EBITDA State Corporation Commission toll review finalised in September 2015; remains subject to appeal 2016 toll increase approved; implemented 23 February 2016 Distribution
Slide 28: Summary
Summary Improved Continued Distribution portfolio portfolio growth performance evolution Growth in traffic, revenue and Simplification of portfolio 1H16 guidance: 9.0 cps EBITDA across all portfolio through divestment of non-core FY16 guidance: 18.0 cps2 assets during 2015 assets Concessio
Slide 29: Questions
4 Questions MACQUARIE ATLAS ROADS
Slide 30: Appendix
A Appendix MACQUARIE ATLAS ROADS
Slide 31: Cash flow: APRR to MQA security holders
Cash flow: APRR to MQA security holders Cash flow: APRR to MQA security holders Eiffarie/Financière Eiffarie (FE) 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 Cash ava
Slide 32: Cash flow: APRR to MQA security holders (cont'd)
Cash flow: APRR to MQA security holders (cont’d) Cash flow: APRR to MQA security holders Eiffarie/Financière Eiffarie (€m) 1H14 2H14 1H15 2H15 APRR dividend 241 209 180 245 add APRR tax instalments to FE 196 147 181 176 add Other1 (2) (1) 412 (0) less Eiffarie net interest (118) (120) (93) (87) less
Slide 33: APRR free cash flow
APRR free cash flow FE distributions, and therefore MQA 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 level 100% of APRR profit is distributed to Eiffari
Slide 34: MQA statutory accounts
MQA statutory accounts Statutory accounts for the year ended 31 December 2015 Statutory accounting MQA equity accounts all assets All assets are non-controlled assets Equity accounting Initially recognise assets at acquisition value1 Income Statement: recognise share of accounting profits/lo
Slide 35: Proportionately consolidated financial performance
Proportionately consolidated financial performance Actual Pro Forma Actual year ended Year ended Change vs Year ended A$m 31 Dec 15 31 Dec 141 pcp2 31 Dec 143 Proportionate revenue 727.2 702.9 3.5% 697.3 Proportionate operating expenses (203.4) (201.4) (1.0%) (197.5) Proportionate EBITDA from assets