Slide 1: Transurban Investor Presentation ASX release
asx release For personal use only 11 August 2015 Transurban Investor Presentation Please find attached the Investor Presentation that will be given to analysts this morning. The presentation will also be webcast live from 9:30am AEST on the Transurban website: www.transurban.com. Amanda Street Compa
Slide 2: FY15 Results
For personal use only FY15 RESULTS 11 AUGUST 2015
Slide 3: Disclaimer and Basis of Preparation
DISCLAIMER AND BASIS OF PREPARATION For personal use only This publication is prepared by the Transurban Group comprising Transurban Holdings Limited (ACN 098 143 429), Transurban Holding Trust (ARSN 098 807 419) and Transurban International Limited (ACN 121 746 825). The responsible entity of Trans
Slide 4: Year in Review
For personal use only YEAR IN REVIEW
Slide 5: FY15 Highlights
FY15 HIGHLIGHTS For personal use only FY15 FINANCIAL RESULTS TOLL REVENUE GROWTH EBITDA GROWTH1 ` FY15 DISTRIBUTION 39.6% 38.0% 40.0₵ FY15 ADJUSTED RESULTS EXCLUDING ACQUISITIONS2 AND 95 EXPRESS LANES3 TOLL REVENUE GROWTH EBITDA GROWTH ADT GROWTH 10.7% 13.1% 5.0% 1. Excludes significant items relati
Slide 6: Distribution Growth
DISTRIBUTION GROWTH For personal use only FY15 distribution of 40.0 cps − 7.0 cps fully franked component − 100.5 per cent free cash covered − final FY15 distribution of 20.5 cps to be paid 14 August 2015 FY16 distribution guidance of 44.5 cps − approximately 100 per cent free cash covered 24.0₵
Slide 7: FY15 Network Performance
FY15 NETWORK PERFORMANCE For personal use only TOLL REVENUE TOLL ADT EBITDA EBITDA NETWORK HIGHLIGHTS CONTRIBUTION REVENUE (AUD) GROWTH GROWTH MARGIN GROWTH Traffic growth continuing to benefit from additional capacity Sydney1 delivered through widening and ramp projects Truck toll multipliers i
Slide 8: FY15 Safety Highlights
FY15 SAFETY HIGHLIGHTS For personal use only ROAD INJURY CRASH INDEX (RICI)2 COMPARISON 25 HIGHLIGHTS BROADER USA NETWORK RICI – INDICATIVE3 Zero recordable incidents in FY15 20 BROADER AUSTRALIAN NETWORK RICI – INDICATIVE3 ̶ 5.7 million construction hours without a lost-time injury1 15 Focus on
Slide 9: FY15 Operational Highlights
FY15 OPERATIONAL HIGHLIGHTS For personal use only OPERATIONS, CUSTOMER, TECHNOLOGY AND DEVELOPMENT OPERATIONS AND TECHNOLOGY DEVELOPMENT SYDNEY LCT on-ramp completed M5 widening completed GLIDe implemented on M2 and ED GLIDe implemented on M7 and LCT NorthConnex construction commenced CCT/ED consoli
Slide 10: Consistent Strategy
CONSISTENT STRATEGY For personal use only To be the partner of choice with governments providing effective and innovative urban road infrastructure utilising core capabilities NETWORK COMMUNITY DEVELOPMENT TECHNOLOGY OPERATIONS PLANNING / ENGAGEMENT / DELIVERY AND CUSTOMER FORECASTING MANAGEMENT 9
Slide 11: The Value of a Network
THE VALUE OF A NETWORK For personal use only TRAFFIC AND TOLLING OPERATIONAL EFFICIENCIES • Traffic growth through economic cycles • Economies of scale • Fully electronic tolling with dynamic pricing NETWORK • Early adoption of proven technology capability CHARACTERISTICS • Active network management
Slide 12: Economic Contribution of Toll Roads
ECONOMIC CONTRIBUTION OF TOLL ROADS For personal use only Detailed modelling estimates the direct economic benefit of toll roads over ten years is $52 billion across Australian business, households and environment compared to a scenario in which these toll roads did not exist over that same period1
Slide 13: Financial Results
For personal use only FINANCIAL RESULTS
Slide 14: Statutory Results Summary
STATUTORY RESULTS For personal use only SUMMARY FY15 ($M) FY14 ($M) KEY DRIVERS Toll revenue 1,514 906 Toll revenue $524 million increase driven by TQ and CCT acquisitions and consolidation of US EBITDA 782 759 business (which was previously equity accounted) Growth from existing assets driven l
Slide 15: Proportional Results Summary
PROPORTIONAL RESULTS For personal use only SUMMARY FY15 FY14 FY15 ($M) FY14 ($M) 1 adjusted1 adjusted2 % CHANGE3 KEY DRIVERS ($M) ($M) Toll revenue 1,559 1,117 1,223 1,105 10.7% Toll revenue Fee and other revenue 167 115 141 115 22.6% Contributions from new assets including: TQ $247 million, CCT $
Slide 16: EBITDA Movement
EBITDA MOVEMENT For personal use only +23.0% Margin improvement driven by $5M $1,289M $11M revenue growth, operational $225M efficiencies and the benefit of recent capital investment into the networks +13.1% $121M $1,048M $927M FY14 Adjusted EBITDA Existing FY15 Adjusted EBITDA Acquisitions (TQ &
Slide 17: Cost Movement
COST MOVEMENT For personal use only $121M $437M Operational efficiencies reflected in margin expansion Increased capability in technology, development and project delivery Business expansion and delivery of network strategy ̶ Increased development activities in all markets ̶ Technology project
Slide 18: Free Cash Flow
FREE CASH FLOW For personal use only Weighted average number of securities available for distribution has increased as a result of the equity FREE CASH FLOW FY15 FY14 % CHANGE raising to support the QM acquisition Movement in free cash influenced by: Free cash $768M $572M 34.3% ̶ Growth in EBITD
Slide 19: Diversification of Funding Sources
DIVERSIFICATION OF FUNDING SOURCES For personal use only DEBT RAISED TO SUPPORT ACQUISITIONS, CAPITAL INVESTMENT AND REFINANCING FY151 GROUP DEBT FY141 GROUP DEBT CAPITAL STRATEGY BANK DEBT Diversify where pricing is AUD NOTES favourable CAD NOTES Extend average tenor A$15,146M A$9,994M EUR NOTE
Slide 20: Extension of Debt Maturity Profile
EXTENSION OF DEBT MATURITY PROFILE For personal use only MATURITY PROFILE AT JULY 20141 (A$ MILLION) EXISTING DEBT REFINANCED DURING FY151 FUNDING ACTIVITIES 4,000 3,000 Majority of refinanced debt is now 2,000 longer dated capital markets debt 1,000 Major issuances during FY15: - ̶ A$1.54 billi
Slide 21: Tax Profile
TAX PROFILE For personal use only Infrastructure assets require billions of dollars in upfront capital investment, leading to accounting and tax losses in early years 1 International and Australian accounting and tax principles require amortisation SIGNIFICANT of capital investment INVESTMENT
Slide 22: Market Update
For personal use only MARKET UPDATE
Slide 23: Sydney Network
SYDNEY NETWORK For personal use only NORTHCONNEX RENEGOTIATION OF O&M • Construction • Previous evergreen O&M Environmental contract on ED Management plan renegotiated approved June 2015 • Insourced ED and CCT • Shaft excavation operations scheduled to commence • Contractor providing September 2015
Slide 24: Melbourne Network
MELBOURNE NETWORK For personal use only WESTERN CITYLINK TULLA DISTRIBUTOR WIDENING • Victorian Government • Contract renegotiation commenced reached financial close assessment of TCL’s April 2015 proposal • Construction scheduled • TCL is working to commence October collaboratively with 2015 the Vi
Slide 25: Western Distributor
WESTERN DISTRIBUTOR For personal use only ENHANCING MELBOURNE'S TRANSPORT NETWORK NETWORK SOLUTION An incident on the West Gate Bridge can create traffic queues through to the southeast and western suburbs Delays on the West Gate Freeway can also impact the northern corridor The Western Distri
Slide 26: Brisbane Network
BRISBANE NETWORK For personal use only AIRPORTLINK GATEWAY UPGRADE • Sale process confirmed NORTH • Operational efficiencies • TQ managing project on uniquely available to TQ behalf of the Queensland consortium Government • D&C contractor appointed TQ INTEGRATION LEGACY WAY • Integration program on
Slide 27: Northern Virginia Network
NORTHERN VIRGINIA NETWORK For personal use only I-66 495 NORTHBOUND • VDOT announced on 15 SHOULDER LANE PROJECT July 2015 its intention to • VDOT opened the shoulder procure the design, build lane July 2015 to address and operation of the 25 mile bottlenecks that were HOT Lanes system on I-66 impac
Slide 28: Ramp Up Continues for 95 and 495 Express Lanes
RAMP UP CONTINUES FOR For personal use only 495 AND 95 EXPRESS LANES GROWING TRAFFIC VOLUMES, TOLL PRICE AND REVENUE AVERAGE WEEKDAY AVERAGE WEEKDAY AVERAGE WEEKDAY TRAFFIC (‘000)1 TOLL (USD) REVENUE (USD ‘000) 55 $6 $250 $200 45 $4 $150 $100 35 $2 $50 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-1
Slide 29: Outlook
OUTLOOK For personal use only Networks FY16 distribution Core focus on safe Technology to Leadership in delivering growth guidance of 44.5 and efficient improve customer policy and positioned to cps representing operation of interaction and development, provide further 11 per cent growth networks op
Slide 30: Appendix
For personal use only APPENDIX
Slide 31: Accounting Changes
ACCOUNTING CHANGES For personal use only KEY CHANGES TO ACCOUNTING FOR ASSETS TQ Financial close on the acquisition of QM occurred 2 July 2014. Following acquisition, QM was renamed TQ. The results of TQ are included from that date with no contribution in the pcp. Legacy Way opened to traffic on 25
Slide 32: Statutory Results
STATUTORY RESULTS For personal use only FY15 ($M) FY14 ($M) % CHANGE Toll revenue 1,514 906 67.1% Fee revenue 112 79 41.8% Construction revenue 190 110 72.7% Other revenue 44 55 (20.0%) Total revenue 1,860 1,150 61.7% Employee benefit expense (116) (82) 41.5% Road operating costs (243) (135) 80.0% C
Slide 33: Proportional Results
PROPORTIONAL RESULTS For personal use only PROPORTIONAL EARNINGS FY15 ($M) FY14 ($M) % CHANGE Toll revenue 1,559 1,117 39.6% Fee and other revenue 167 115 45.2% Total revenue 1,726 1,232 40.1% Total costs (437) (298) 46.6% EBITDA excluding significant items 1,289 934 38.0% Significant items (272) -
Slide 34: FY15 Proportional Result by Asset
FY15 PROPORTIONAL RESULT BY ASSET For personal use only FEE & OTHER NET FINANCE INCOME TAX OWNERSHIP ASSET TOLL REVENUE EBITDA D&A NPBT NPAT REVENUE COST EXPENSE (EXP) / BENEFIT % $M $M $M $M $M $M $M $M 100.0% M2 221 10 192 (84) (41) 67 14 81 100.0% LCT 75 3 47 (19) (12) 16 (4) 12 100.0% CCT 55 2 3
Slide 35: FY14 Proportional Result by Asset
FY14 PROPORTIONAL RESULT BY ASSET For personal use only FEE & OTHER NET FINANCE INCOME TAX OWNERSHIP ASSET TOLL REVENUE EBITDA D&A NPBT NPAT REVENUE COST EXPENSE (EXP) / BENEFIT % $M $M $M $M $M $M $M $M 100.0% M2 193 6 162 (83) (52) 27 16 43 100.0% LCT 69 3 51 (25) (13) 13 (5) 8 100.0% CCT 1 - 1 -
Slide 36: Maintenance Provision
MAINTENANCE PROVISION1 For personal use only MAINTENANCE EXPENSE RECOGNISED MAINTENANCE CASH SPEND FY15 ($M) FY14 ($M) FY15 ($M) FY14 ($M) CityLink (12) (12) (7) (21) M2 (5) (5) (4) (1) LCT (9) - (8) (1) CCT (6) N/A (1) N/A ED (11) (15) (22) (13) M5 (2) (2) (3) (2) M7 1 (6) (4) (1) Gateway Motorway
Slide 37: Net Finance Costs
NET FINANCE COSTS For personal use only STATUTORY NET FINANCE COST EXPENSE PROPORTIONAL NET FINANCE COST PAID FY15 ($M) FY14 ($M) FY15 ($M) FY14 ($M) Controlled assets CityLink (27) (33) (22) (28) M2 (41) (52) (44) (47) LCT (12) (13) (12) (11) CCT (12) 2 (12) 1 ED (30) (39) (24) (30) DRIVe (1) - - -
Slide 38: Free Cash Calculation
FREE CASH CALCULATION For personal use only FREE CASH CALCULATION SOURCE OF INFORMATION/EXPLANATION Cash flows from operating activities Statutory Transurban Holdings Limited operating cash flow (includes cash inflow from M7 TLNs and M5 loan notes). (refer Group Statutory accounts) Add back transact
Slide 39: Free Cash Flow
FREE CASH FLOW For personal use only FY15 ($M) FY14 ($M) % CHANGE Cash flows from operating activities (refer Group Statutory accounts) 304 521 (41.9%) Add back transaction and integration costs related to acquisitions (non 100% owned entities) 419 - 100.0% Add back payments for maintenance of intan
Slide 40: Funding Structure at June 2015
FUNDING STRUCTURE AT 30 JUNE 2015 For personal use only Transurban Bank Debt Capital Markets Debt Government Debt Non Recourse Corporate Debt NSW TQ US Capital Markets Bank Debt Term Debt M5 M2 CCT AMTN 495 Express Lanes 95 Express Lanes AMTN A$0.1B A$0.7B A$0.8B A$0.3B A$0.5B A$0.8B US$0.1B Private
Slide 41: Group Debt at June 2015
GROUP DEBT AT 30 JUNE 2015 For personal use only FACILITY FACILITY TOTAL FACILITY PROPORTIONAL STATUTORY DRAWN (US$M) (A$M) (A$M) DRAWN ($M) (A$M) CORPORATE DEBT1 Working capital lines2 - 875 875 515 515 Term bank debt 93 125 246 246 246 USPP 162 1,201 1,412 1,412 1,369 AUD Notes - 800 800 800 800 E
Slide 42: Drawn Debt
DRAWN DEBT For personal use only PROPORTIONAL BASIS AUD1 30 JUN 2015 30 JUN 2014 MOVEMENT EXPLANATION3 ($M) ($M) ($M) A$833 million Euro Notes raised in September 2014 and used to prepay A$375 million term debt and A$136 Corporate 4,297 3,268 1,029 million of USPP. A$706 million Euro Notes also rais
Slide 43: Key Debt Metrics
KEY DEBT METRICS For personal use only 30 JUN 2015 30 JUN 2014 TRANSURBAN NON TRANSURBAN NON GROUP CORPORATE RECOURSE GROUP CORPORATE RECOURSE Weighted average maturity (years)1 7.8 yrs 5.0 yrs 9.7 yrs2 7.5 yrs 3.9 yrs 10.4 yrs3 Weighted average cost of AUD debt4 5.3% 5.6% 5.1% 6.3% 6.4% 6.2% Weight
Slide 44: Corporate Debt Maturities
CORPORATE DEBT MATURITIES For personal use only BY FINANCIAL YEAR – AS AT 30 JUNE 2015 2,200 2,000 Working Capital Facilities Term Bank Debt Working Capital Facilities Term Bank Debt 1,800 A$ notes A$ notes USPP A$ Notes EMTN Letters of Credit 1,600 EMTN Letters of Credit A$ MILLION 1,400 1,200 1,00
Slide 45: Non Recourse Debt Maturities
NON RECOURSE DEBT MATURITIES For personal use only BY FINANCIAL YEAR – AS AT 30 JUNE 2015 2,200 2,000 TQ (inc. Clem7) ED 1,800 520 M2 M5 M7 LCT 1,600 495 Express Lanes CCT A$ MILLION 1,400 95 Express Lanes 403 277 405 525 1,200 1,000 260 350 800 288 600 293 1150 1226 400 750 225 625 200 447 225 300
Slide 46: Operating Asset Portfolio
OPERATING ASSET PORTFOLIO For personal use only SUMMARY STATISTICS CITYLINK M5 M2 ED M7 LCT CCT OVERVIEW VIC NSW NSW NSW NSW NSW NSW Opening date Dec 2000 Aug 1992 May 1997 Dec 1999 Dec 2005 Mar 2007 Aug 2005 Concession period from financial close 35 years 34 years 51 years 48 years 41 years 40 year
Slide 47: Operating Asset Portfolio
OPERATING ASSET PORTFOLIO For personal use only SUMMARY STATISTICS GATEWAY GO BETWEEN LEGACY 495 EXPRESS 95 EXPRESS LOGAN MOTORWAY CLEM7 MOTORWAY BRIDGE WAY LANES2 LANES2 OVERVIEW QLD QLD QLD QLD QLD USA USA Opening date Dec 1986 Dec 1988 Mar 2010 July 2010 June 2015 Nov 2012 Jan 2015 Concession per
Slide 48: Tolling Escalation
TOLLING ESCALATION For personal use only EMBEDDED INFLATION PROTECTION MOTORWAY ESCALATION CityLink Escalated quarterly by the greater of quarterly CPI or 1.1065 per for the first 16 years, then quarterly by CPI. This is subject to a cap of annual CPI plus 2.5 per cent, which cannot be exceeded. M2
Slide 49: Summarised Group Structure
SUMMARISED GROUP STRUCTURE For personal use only STAPLED STRUCTURE TRANSURBAN HOLDINGS LIMITED TRANSURBAN HOLDING TRUST TRANSURBAN INTERNATIONAL LIMITED CORPORATE ROAD/OPERATING ROAD/OPERATING ENTITIES OTHER ENTITIES CORPORATE ENTITIES ENTITIES ENTITIES Including: Companies operating and maintaining
Slide 50: Glossary
For personal use only GLOSSARY
Slide 51: Glossary
GLOSSARY For personal use only TERM DEFINITION ADT Average Daily Traffic. ADT is calculated by dividing the total number of trips on each asset (transactions on CityLink) by the number of days in the period. AMTN Australian Medium Term Note AUD Australian Dollars AWE Average Weekly Earnings CAD Cana
Slide 52: Glossary
GLOSSARY For personal use only TERM DEFINITION HOV High Occupancy Vehicle LCT Lane Cove Tunnel LCV Light Commercial Vehicle M2 Hills M2 M5 M5 South West Motorway M7 Westlink M7 N.M. Not Meaningful NPAT Net Profit After Tax NWRG North Western Roads Group O&M Operations and Maintenance PAB Private Act
Slide 53: Glossary
GLOSSARY For personal use only TERM DEFINITION TCL Transurban ASX code TIFIA Transportation Infrastructure Finance and Innovation Act TLN/SLN Term Loan Note/Shareholder Loan Note. An interest bearing shareholder loan. Currently Transurban has TLNs in place on NWRG, M5 and SLNs on TQ. TQ Transurban Q
Slide 54: FY15 Results August 2015
For personal use only FY15 RESULTS 11 AUGUST 2015