Transurban Group Ltd. · ASX:TCL
Transurban — Investor Day (May 2022)
47 slides from Transurban's investor day presentation, May 2, 2022
Slide 1: Transurban Investor Day
Transurban Investor Day 2 May 2022
Slide 2: Disclaimer and basis of preparation
Disclaimer and basis of preparation 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 Transurban Holding Trust is
Slide 3: Presentation agenda
Presentation agenda 04 11 18 24 30 36 Traffic insights Creating Delivering and mobility Capital stakeholder distributions and Introduction trends management value growth Q&A session Scott Charlton Henry Byrne Michelle Jablko Scott Charlton Scott Charlton Executive Committee Chief Executive Officer G
Slide 4: West Gate Tunnel Project
West Gate Tunnel Project Transformational project enhancing transport outcomes for Victoria • Vital alternative to the West Gate Bridge, which carries over 200,000 vehicles per day and regularly experiences congestion • WGTP will deliver around 70km of new traffic lanes, create more than 6,000 const
Slide 5: Leadership
Leadership Scott Charlton Henry Byrne Pierce Coffee Suzette Corr Andrew Head Chief Executive Group Executive, President, Group Executive, Group Executive, Officer Victoria & Strategy North America People & Culture WestConnex Visit the Transurban Investor Day Hub for details on the West Gate Tunnel P
Slide 6: Insights hub
Insights hub Transurban Insights hub Explore our data Every day, m Transurban
Slide 7: Group strategy
Group strategy By understanding what matters to our stakeholders, we create road transport solutions that make us a partner of choice
Slide 8: Transurban investment proposition
Transurban investment proposition Leading global toll 21 assets located in Weighted average Seven projects Long-term road developer five markets with concession life of currently in relationships with and operator quality structural ~30 years development governments growth drivers or delivery and st
Slide 9: Supporting distribution growth
Supporting distribution growth Continued Balance sheet capacity Inflation benefit Delivering momentum in internally to fund with near-term distribution traffic growth existing near-term interest rate growth expected growth opportunities protection Long-term distribution Anticipate near and long- Act
Slide 10: Supporting distribution growth
Supporting distribution growth Long-term distribution growth expected to be supported by traffic growth, inflation-linked toll escalations and balance sheet capacity Traffic growth expected to drive long-term distributions Near-term protection from hedging and inflation-linked tolls1 2,000 400 Growt
Slide 11: Traffic insights and mobility trends
Traffic insights and mobility trends
Slide 12: Weekly traffic data
Weekly traffic data1 Sydney weekly traffic vs 2019 (%) Melbourne weekly traffic vs 2019 (%) Week commencing Week commencing 3-Jan 17-Jan 31-Jan 14-Feb 28-Feb 14-Mar 28-Mar 11-Apr 3-Jan 17-Jan 31-Jan 14-Feb 28-Feb 14-Mar 28-Mar 11-Apr 50% 10% 40% 0% 30% -10% 20% -20% 10% 0% -30% -10% -40% Weather Lab
Slide 13: Traffic insights
Traffic insights Domestic and international travel expected to boost traffic volumes Traffic volumes across airport-related corridors seeing signs of recovery 20 • Airport-exposed corridors were some of the most affected by COVID-19 impacts, including CityLink’s Western Link, Sydney’s Eastern Distri
Slide 14: Traffic insights
Traffic insights Continued preference for private transport over public transport for Private road transport usage has recovered closer to pre-pandemic daily use level compared to public transport modes1 • Latest NSW public transport data1 shows public transport volumes down Change in NSW public tra
Slide 15: Traffic insights
Traffic insights Express Lanes showing signs of rising congestion Montreal traffic recovery • 95 Express Lanes traffic exceeding pre-pandemic levels, with volumes • Prior to COVID-19, Montreal’s highways have historically ranked as some of supported by trip mix favouring discretionary or leisure tra
Slide 16: Fuel prices
Fuel prices Fuel price movements have limited near-term influence on traffic volumes Average toll spend remains a small proportion of typical household expenditure • Traffic volumes across Transurban’s assets have historically had limited • Transurban recognises that cost of living pressure is a gro
Slide 17: Future mobility trends
Future mobility trends The future of transport is expected to involve safer and more sustainable mobility options that provide convenience and personalised transport choices. Transurban is well-positioned for future opportunities through integrating data capabilities with decades of operating experi
Slide 18: Capital management
Capital management » sha Transurban
Slide 19: Capital management approach
Capital management approach Cash flow growth Long-term growth in Funding risk mitigation Balance sheet strength underpinned Free Cash to fund and diversification provides optionality for by essential distributions investment in new infrastructure opportunities Balancing growth in distributions over
Slide 20: Near-term interest rate protection
Near-term interest rate protection Debt hedging profile and inflation linked toll escalations provide protection in a rising interest rate environment and would likely result in a net benefit over the near term Embedded CPI escalation across 68% of revenue1 Likely net benefit from short-term rises i
Slide 21: Funding the growth pipeline
Funding the growth pipeline Estimated capital expenditure on projects under development or delivery Sources and uses of capital4 1H22 2H22 FY23 FY24 FY25 FY26 • Capex profile expected to broadly align with timing of Capital Releases over the near-term M4-M5 Link (WCX Stage 3A) West Gate Tunnel Proje
Slide 22: Distributions from non-100% entities
Distributions from non-100% entities1 Timing difference on distributions from non-100% entities Distributions from non-100% entities determined by Board discretion Current quarter Delayed one quarter Delayed two quarters • Distributions received determined by respective Board discretion following co
Slide 23: Financial considerations
Financial considerations FY22 considerations Capital Releases • Anticipate traffic growth to continue over the near-term across all • Transurban currently expects to receive more than $2.3 billion of markets as the remainder of COVID-19 related government restrictions potential Capital Releases betw
Slide 24: Creating stakeholder value
AS = ._ —— Creating mee \ we Transurban
Slide 25: Working with partners
Working with partners Track record of successfully working with government and community stakeholders to develop and maintain road transport solutions that improve the productivity and livability of urban cities Working together with governments Supporting job creation Investing in local to create c
Slide 26: Government and communities
Government and communities Delivering what matters to government stakeholders Positive impact through community partnerships • Private sector capital to help fund and accelerate critical • Listening to and engaging with the community to adapt project infrastructure design and delivery − Approximatel
Slide 27: Tolling reform
Tolling reform Evolution of Sydney’s toll roads Opportunities for policy reform • Tolling arrangements across NSW have evolved primarily on a case-by- • Cost of living considerations are likely to provide ongoing reliance on case basis around specific assets across successive NSW governments cashbac
Slide 28: Customers and workforce
Customers and workforce Meeting the needs of customers Positioning and preparing the workforce • Around nine million customers across five markets value toll • Transurban is positioned to continually innovate for a digital roads for travel-time savings, reliability and safety benefits future and man
Slide 29: Suppliers and investment partners
Suppliers and investment partners Sophisticated and collaborative working relationships Providing confidence for investment partners with business partners and suppliers • Direct funding support in assets by investment partners • Working with suppliers to ensure ESG values embedded enables access to
Slide 30: Delivering distributions and growth
Delivering distributions and growth
Slide 31: Long-term growth
Long-term growth Building a long-term sustainable business model Total net concession life contribution from new assets1 Transurban • Disciplined investment from 7 to 21 assets over the last decade has Queensland acquisition resulted in a weighted average concession life of ~30 years 200 Legacy Way
Slide 32: Asset lifecycle
Asset lifecycle1 Anticipate long-term Free Cash and distribution growth as new assets ramp up and transition into developed assets Pre-development Under construction Ramp up Developed asset Opportunities to extend growth Long-term Free Cash Working together with Upfront capital Occurs at the commiss
Slide 33: Opportunity pipeline
Opportunity pipeline Long term investment horizon and pipeline of opportunities in core markets enables Transurban to take a disciplined approach in growing the portfolio REGION POTENTIAL OPPORTUNITIES1 NEXT 5 YEARS 5+ YEARS Brisbane Sydney Western Harbour Tunnel and Sydney Harbour Tunnel potential
Slide 34: Project updates
Project updates M7-M12 Integration Project— M7-M12 Integration Project—new • Delivering value for government, Fredericksburg overview and update connections for Western Sydney community and business. Creating road Extension transport solutions for government that update • M7 is a ~39km, four lane mo
Slide 35: Supporting distribution growth
Supporting distribution growth Continued Balance sheet capacity Inflation benefit Delivering momentum in internally to fund with near-term distributions traffic growth existing near-term interest rate growth expected growth opportunities protection
Slide 36: Question and answer session
Ss Question and session sha Transurban
Slide 37: Analyst data
~~ * - Ss Analyst data CS wy NO Transurban
Slide 38: Traffic performance
Traffic performance1 Traffic data—March 2022 quarter average daily trips (‘000)2,3 Traffic data—YTD average daily trips (‘000) % large Mar 19 Mar 21 Mar 22 % change % change vehicle FY19 FY21 FY22 % change % change Asset Ownership quarter quarter quarter vs Mar 19 vs Mar 21 traffic4 Asset Ownership
Slide 39: Reconciliation of proportional EBITDA to Free Cash
Reconciliation of proportional EBITDA to Free Cash 1H21 ($M) 1H22 ($M) 1H22 COMMENTS Proportional EBITDA 840 805 − Transaction and integration costs 4 4 Transaction and integration costs associated with STP JV acquisition of the remaining 49% share in WestConnex Proportional net finance costs paid (
Slide 40: Free Cash
Free Cash Reconciliation of statutory cash flow from operating activities to Free Cash 1H21 ($M) 1H22 ($M) 1H21 1H22 % CHANGE Cash flows from operating activities 411 366 Free Cash $467M $459M (1.6%) Add back transaction and integration costs related to acquisitions 4 4 Weighted average securities e
Slide 41: Transurban tax groups—estimated timing
Transurban tax groups—estimated timing Tax group 1H22 EBITDA as FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29+ proportion of Transurban Timing is indicative only and not shown by month. Group proportional EBITDA WestConnex 1 6.4% A25 4.6% Currently paying tax: Subject to corporate tax in Canada North
Slide 42: Glossary and notes
Glossary and notes
Slide 43: Tolling escalation
Tolling escalation MOTORWAY ESCALATION MOTORWAY ESCALATION M2 Tolls escalate quarterly by the greater of quarterly CPI or 1% Tolls escalate quarterly by an equivalent of 4.25% per annum to 30 West Gate Tunnel1 June 2029 and quarterly CPI thereafter LCT Class A tolls escalate quarterly by quarterly C
Slide 44: Near-term interest rate protection notes
Near-term interest rate protection notes Footnotes to slide 10 (Supporting distribution growth) and slide 20 (Near term interest rate protection) 2. Based on 1H22 proportional toll revenue by asset excluding Roam Tolling and Tollaust revenue. 3. CPI linked category includes assets where toll prices
Slide 45: Traffic performance notes
Traffic performance notes Footnotes to slide 38: Traffic performance 2. Transurban improved the calculation of ADT during the June 2020 quarter. Traffic measurement involves the correlation of images and tags from detected vehicles. Reporting improvements enabled faster removal of duplicate trips, f
Slide 46: Glossary
Glossary TERM DEFINITION TERM DEFINITION 95 95 Express Lanes E-WAY M5 West retail tolling brand 395 395 Express Lanes FFO Funds From Operations 495 495 Express Lanes FFO/DEBT Based on S&P methodology. FFO is calculated as statutory EBITDA (where EBITDA equals 1H/2H First or second half of a financia
Slide 47: Glossary
Glossary TERM DEFINITION TERM DEFINITION MD Maryland, United States of America SLN Shareholder Loan Note. An interest bearing shareholder loan MDOT Maryland Department of Transportation SPV Special Purpose Vehicle MTQ Ministère des Transports du Québec STATE WORKS The capital contribution for WestCo