Atlas Arteria · ASX:ALX
Atlas Arteria — H1 2021 Earnings Presentation
45 slides from Atlas Arteria's earnings presentation, Aug 26, 2021
Slide 1: H1 2021 Results Presentation
H1 2021 RESULTS PRESENTATION for the six months ending 30 June 2021 26 August 2021
Slide 2: Important Information
IMPORTANT INFORMATION Disclaimer Forward Looking Statements No Offer The information in this presentation is given in good faith and This presentation may contain forward-looking statements This presentation does not constitute an offer to sell, or the derived from sources believed to be accurate at
Slide 3: Contents
CONTENTS KEY HIGHLIGHTS FINANCIAL PERFORMANCE OUTLOOK APPENDICES Atlas Arteria > Results Presentation for the six months ending 30 June 2021 > 3
Slide 4: Key Highlights
KEY HIGHLIGHTS Continued delivery against strategy and positive trends provide cautious optimism Atlas Arteria > Results Presentation for the six months ending 30 June 2021 > 4
Slide 5: H1 2021 Highlights
H1 2021 HIGHLIGHTS Positive trend in traffic, Heavy vehicle traffic >$250m weighted average traffic up at APRR returns in capital expenditure 10% - 15% in to trend and for Q2 was delivered across the June vs January 2021, 0.2% above businesses, with the A41, A75 and A71 in France seasonally adjusted
Slide 6: H1 2021 Financial Overview
H1 2021 FINANCIAL OVERVIEW Traffic was influenced by COVID-19 movement restrictions during the period H1 2021 Traffic H1 2021 Toll Revenue1, 2 H1 2021 EBITDA1, 2 Revenue Contribution to Business Atlas Arteria vs H1 2020 vs H1 2019 vs H1 2020 vs H1 2019 vs H1 2020 vs H1 2019 APRR 91% 19.4% (17.1%) 18
Slide 7: Europe Re-opening for Business
EUROPE RE-OPENING FOR BUSINESS Vaccine roll outs across Europe and increased mobility are setting the stage for recovery Current European Landscape French Mobility German Mobility • Europe is reopening after strict lockdowns in H1 2021 Retail and Recreation Retail and Recreation • Governments keen t
Slide 8: Traffic Recovering Strongly at APRR
TRAFFIC RECOVERING STRONGLY AT APRR Traffic recovers quickly when restrictions ease, again demonstrating resilience Heavy vehicle traffic playing APRR Traffic an important role in growth at APRR Heavy Vehicle • The APRR network is critical for • Over 2019 & 2020, heavy vehicle traffic was Light Vehi
Slide 9: Warnow Tunnel Traffic Remains Resilient
WARNOW TUNNEL TRAFFIC REMAINS RESILIENT Traffic resilient despite strict lockdowns, and recovery well underway Warnow Tunnel demonstrates ability Warnow Tunnel Traffic for rapid recovery post easing of restrictions 1st lockdown + 20% 1.3 1.4 1.2 1.3 10 Percentage change in trips vs. same month 2019
Slide 10: Positive Traffic Trend at the Greenway
POSITIVE TRAFFIC TREND AT THE GREENWAY Trending recovery in traffic with performance linked to workplace mobility Workplace mobility in the region Off-peak traffic on the Dulles Greenway Traffic continues to be impacted Greenway tracking strongly Trips in peak periods Week ending 23-Feb-20 Workplace
Slide 11: Capital Projects Update
CAPITAL PROJECTS UPDATE >$250m in capital expenditure delivered across all businesses in H1 2021, improving the customer experience and increasing traffic flow Total project cost Expected completion Project Value proposition for customers A41 Widening – opened c. € 87m H1 2021 Reduce congestion whil
Slide 12: Sustainability Priorities for 2021
SUSTAINABILITY PRIORITIES FOR 2021 Continuing focus on our sustainability priorities in 2021, with development of sustainability targets by the end 2021 CUSTOMERS ENVIRONMENTAL SAFETY OUR PEOPLE & COMMUNITY STEWARDSHIP Continue to embed a safety-first Maintain our 40% commitment to gender Continue t
Slide 13: Electric Vehicle Charging Stations
SUSTAINABILITY CASE STUDY ELECTRIC VEHICLE CHARGING STATIONS Roll out of charging stations at APRR encourages traffic and supports the green agenda Electric charging terminals at APRR and AREA service areas Very high power charging station (150kW+) Roll out plan for electric vehicle charging station
Slide 14: Financial Performance
FINANCIAL PERFORMANCE Strong financial performance underpins future potential Atlas Arteria > Results Presentation for the six months ending 30 June 2021 > 14
Slide 15: Atlas Arteria Income Statement
ATLAS ARTERIA INCOME STATEMENT Profitability impacted by COVID-19 movement restrictions A$m H1 2021 H1 2020 % Chg Revenue and other income Traffic in Germany and US influenced by COVID-19 − Toll revenue 43.1 49.6 (13%) movement restrictions, and revenue affected by − Other income 0.4 7.7 (95%) appre
Slide 16: APRR Financial Performance
APRR FINANCIAL PERFORMANCE COVID-19 movement restrictions impacted financial performance during the half, but traffic is recovering well into the European summer €m1 H1 2021 H1 2020 % change • Revenues supported by increased traffic, toll price increases, and €6m from the integrated Fulli business T
Slide 17: APRR Capital Expenditure Program
APRR CAPITAL EXPENDITURE PROGRAM Investing to grow the footprint and improve customer experience APRR Capital Expenditure Program • Despite ongoing COVID-19 restrictions, capex projects • Projects completed: continued during the half Paris 1 Creation of the A71 ‘Montmarault’ intersection − All proje
Slide 18: APRR Group Financial Position
APRR GROUP FINANCIAL POSITION APRR strong balance sheet rated A- with a stable outlook APRR Group debt maturity profile APRR has significant balance sheet as at 30 June 2021 (€m) flexibility to support growth Rating A- Stable Outlook (S&P and Fitch) Sources of Debt • Rated A-, with a stable outlook
Slide 19: Warnow Tunnel Financial Overview
WARNOW TUNNEL FINANCIAL OVERVIEW Warnow Tunnel financial performance impacted by COVID-19 movement restrictions, while the restructured debt releases cash flows €m1 H1 2021 H1 2020 % chg • Traffic and revenue impacted with strict lockdowns Traffic (m) 2.0 2.1 (8.6%) • A 1.7% increase in weighted ave
Slide 20: Dulles Greenway Financial Overview
DULLES GREENWAY FINANCIAL OVERVIEW Strong liquidity at the Dulles Greenway, traffic impacted by continued working from home preferences US$m1 1H 2021 1H 2020 % chg • Operating revenues impacted by continued COVID-19 movement restrictions and working from home Traffic (m) 5.2 5.2 1.1% • Liquidity wit
Slide 21: Sensitivity of Portfolio to Change in Interest Rates and CPI
SENSITIVITY OF PORTFOLIO TO CHANGE IN INTEREST RATES AND CPI Our businesses are positively impacted by increases in CPI, and rising interest rates have limited impact • Strong positive multiplier to rising inflation with tolls linked to inflation, and year-on-year growth leading to attractive valuat
Slide 22: Atlas Arteria Cashflow for H1 2021
ATLAS ARTERIA CASHFLOW FOR H1 2021 APRR dividends to Atlas Arteria (€m) Corporate operational cashflows (A$m) Cash balance (A$m) 128.5 151.1 0.7 (64.3) (0.5) 128.5 193.7 (16.5) (5.1) (1.2) 111.0 100.0 0.2 100.2 98.1 (11.0) (2.1) 133.2 (124.7) Warnow cash injection H2 2020 distribution Closing cash b
Slide 23: Outlook
OUTLOOK Focus on value creation through a clear and simple strategy Atlas Arteria > Results Presentation for the six months ending 30 June 2021 > 23
Slide 24: Delivering on Atlas Arteria's Strategic Framework
DELIVERING ON ATLAS ARTERIA’S STRATEGIC FRAMEWORK Strategic Framework 1 Reduce legacy complexity to maximise our value H1 2021 Key Strategic Outcomes 2 Maximise operational efficiencies in existing businesses • Capital restructure at Warnow Tunnel diversifies Atlas Arteria’s sources of cash flow 3 D
Slide 25: The French Opportunity
THE FRENCH OPPORTUNITY APRR is well positioned to support governments as they look to reinvigorate the economy The Current Situation The Opportunity Europe reopening, high vaccination rates and an EU health APRR traffic well positioned for a strong recovery pass system facilitating travel Actively e
Slide 26: The US Opportunity
THE US OPPORTUNITY Performance at the Greenway is currently constrained, but there remains opportunity to release value The Current Situation The Opportunity The Greenway is well positioned to benefit from growing community Growing confidence increasing mobility trends across Virginia confidence and
Slide 27: Key Priorities and Outlook
KEY PRIORITIES AND OUTLOOK ATLAS ARTERIA APRR AND ADELAC WARNOW TUNNEL DULLES GREENWAY • Focus on opportunities • Continued recovery in • Continued recovery in • Well positioned to benefit to create sustainable traffic with freedom in traffic with freedom in from return to office travel cash flows,
Slide 28: Thank You Q&A
THANK YOU Q&A Contact for investors Jeanette Royce | Director, Investor Relations Australia: 1800 621 694 International: +61 (0)438 493 692 investors@atlasarteria.com Atlas Arteria > Results Presentation for the six months ending 30 June 2021 > 28
Slide 29: Appendix A Additional Financial Information
APPENDIX A Additional Financial Information Atlas Arteria > Results Presentation for the six months ending 30 June 2021 > 29
Slide 30: Atlas Arteria Consolidated Balance Sheet
ATLAS ARTERIA CONSOLIDATED BALANCE SHEET As at As at Statutory accounts 30 June 2021 31 Dec 2020 A$m Current assets 202.7 267.6 Investments in associates 2,589.9 2,635.5 Tolling concessions 2,064.6 2,064.3 Goodwill 13.9 14.1 Other non-current assets 255.6 237.5 Total assets 5,126.7 5,219.0 Current l
Slide 31: Proportionate EBITDA by Business
PROPORTIONATE EBITDA BY BUSINESS APRR 100% (€m) H1 2021 H1 2020 21 vs 20 H1 2019 21 vs 19 Dulles Greenway 100% (US$m) H1 2021 H1 2020 21 vs 20 H1 2019 21 vs 19 Traffic (VKTm) 9,579.2 8,021.1 19.4% 11,561.9 (17.1%) Traffic (m) 5.2 5.2 1.1% 8.9 (41.2%) Operating revenue 1,113.0 934.3 19.1% 1,250.8 (11
Slide 32: Appendix B About the Business
APPENDIX B About the Business Atlas Arteria > Results Presentation for the six months ending 30 June 2021 > 32
Slide 33: The Atlas Arteria Business
THE ATLAS ARTERIA BUSINESS Atlas Arteria Portfolio Virginia, United States Luxembourg Dulles Greenway European HQ Rostock, Germany APRR ADELAC WARNOW TUNNEL DULLES GREENWAY Warnow Tunnel Ownership: 31.14% Ownership: 31.17% Ownership: 100% Ownership: 100%2 2,318km motorway 20km commuter road 2.1km ro
Slide 34: APRR Connecting Paris With Lyon and Central/Eastern France
APRR CONNECTING PARIS WITH LYON AND CENTRAL/EASTERN FRANCE An efficient, safe and cost effective network for customers Comparison between average tolls on APRR versus rest of France1 Paris Toul Stuttgart Troyes Germany 75 Orléans Mulhouse Cosne-Cours-sur-Loire Dijon Euro cents per VKT Zurich Bourges
Slide 35: APRR
APRR Historically strong traffic and EBITDA growth with attractive margins APRR Light Vehicle Traffic APRR Heavy Vehicle Traffic APRR EBITDA & EBITDA Margin APRR LV VKT APRR HV VKT EBITDA 74.4 Linear (APRR LV VKT) Linear (APRR HV VKT) EBITDA margin 73.8 73.2 72.4 71.8 Annual VKT, millions Annual VKT
Slide 36: APRR Tariff Formula
APRR TARIFF FORMULA APRR’s predictable cashflows are underpinned by inflation-linked tolling and established regulatory regime • Stable concession regime: In place for another 14-15 years • Predictable, inflation linked toll increases: Contracted toll increase of 70% of CPI to concession end • Upsid
Slide 37: French Tax Rates
FRENCH TAX RATES The Current Tax Situation Corporate Income Tax Motorway Specific Tax Territorial economic contribution (CET) • The French Parliament approved the Finance Bill for • The French Tax Code provides for a specific tax payable • The territorial economic contribution (Contribution 2021 (20
Slide 38: Warnow Tunnel
WARNOW TUNNEL Warnow’s strong historic performance underpinned by program of work on surrounding networks Warnemünde Warnow Tunnel Traffic AADT Linear (AADT) 15,000 Warnow Tunnel 13,500 AADT 12,000 4 10,500 Program of roadworks in and around Rostock Rostock 9000 3 5 CAGR 2008-2019 = 2.5% 1 2008 2021
Slide 39: Warnow Tunnel Tariff Formula
WARNOW TUNNEL TARIFF FORMULA Warnow Tunnel toll escalation • Tolls may be escalated annually and are subject to approval by the Ministry of Energy, Infrastructure and State Development for the State of Mecklenburg-Vorpommern • Toll increases are linked to pre-tax equity IRR of the concession as outl
Slide 40: Dulles Greenway Overview
DULLES GREENWAY OVERVIEW Connecting growing, prosperous communities to connector roads and Washington DC On a stand alone basis, tolls on the Dulles Leesburg Greenway are in the mid to high end of prices On a per mile basis, the Dulles Greenway Rockville for the roads in Virginia1 offers good value
Slide 41: Dulles Greenway Earnings History
DULLES GREENWAY EARNINGS HISTORY Stable historical financial performance Historically, surrounding network events have negatively Dulles Greenway EBITDA & EBITDA Margin impacted traffic however these projects are finishing in 2021 EBITDA EBITDA Margin AADT 60,000 1 80.5 78.5 79.8 80.8 81.6 81.4 81.3
Slide 42: Dulles Greenway Toll Regime
DULLES GREENWAY TOLL REGIME Tolls on the Dulles Greenway are set on application by the Virginia State Corporation Commission (SCC) under the Virginia Highway Corporation Act (1988) (VHCA) • From 1 Jan 2022 onward, the SCC will determine the toll rates under the VHCA in accordance with Section §56-54
Slide 43: Atlas Arteria Summary Corporate Structure
ATLAS ARTERIA SUMMARY CORPORATE STRUCTURE Stapled ATLAX (Australia) ATLIX (Bermuda) 13.43% 86.57% economic interest (via loans) Dulles Greenway 100% Third Party Investors Eiffage MIBL 33.71% 4.00% 62.29% Eiffage MAF/MAF2 50% + 1 share 50% – 1 share 100% Tax consolidated group Warnow Tunnel Financièr
Slide 44: Appendix C References
APPENDIX C References Atlas Arteria > Results Presentation for the six months ending 30 June 2021 > 44
Slide 45: Glossary of Terms
GLOSSARY OF TERMS AADT Average annual daily trips ESG Environmental, Social and Corporate Governance m millions ADELAC Autoroute des deux Lacs EU European Union MIBL MIBL Finance Luxembourg S.à r.l. ALX Atlas Arteria ex Excluding pa Per annum ATLAX Atlas Arteria Limited FX Foreign Exchange RCEA Rout