Transurban Group Ltd. · ASX:TCL
Transurban — FY2006 Earnings Presentation
28 slides from Transurban's earnings presentation, Sep 13, 2006
Slide 1: Disciplined Growth: FY06 Results
DISCIPLINED GROWTH FY06 Results 13 September 2006
Slide 2: Disclaimer
Disclaimer The Transurban Group is a triple stapled security listed on the Australian Stock Exchange comprising Transurban Holdings Limited (ACN 098 143 429), Transurban Holdings Trust (ARSN 098 807 419) and Transurban Limited (ACN 098 143 410). The responsible entity of the Transurban Holdings Trus
Slide 3: Headlines
Headlines Strong Financial Performance • Tolling & Fee Revenue Ï 36% • Cash Surplus Ï 22% • Distribution Ï 43% • Loss After Tax Ð 31%
Slide 4: Headlines (continued)
Headlines (continued) • Negotiated $903 million upgrade to CityLink and feeder roads • Acquired Pocahontas Parkway, Virginia USA • Opened Westlink M7 ahead of time and revenue expectation • Won tax case in High Court • Delivered Hills M2 synergies • Named preferred for I-95 HOT lanes, Virginia USA
Slide 5: Headlines (continued): Other developments
Headlines (continued) Other developments: • CityLink – CityLink revenue initiatives add value – Tulla / Calder Interchange ahead of schedule – I-Tag Parking mobilised in Melbourne • Hills M2 – Delivered high speed tolling lanes – Bought Tollaust – Preferred tag and pass provider for Lane Cove Tunnel
Slide 6: Transurban Group
Transurban Group CityLink • Premier assets generating strong cash flow 100% Ownership and • Market capitalisation ~ A$6.3B (1) Operations • FY07 forecast yield ~ 7.7% (2) Hills M2 Pocahontas 100% Ownership and 4 Operations WM7 11 Westlink M7 45% Ownership CityLink Hills M2 100% Tolling 54 31 Pocahon
Slide 7: Distribution (Cents Per Share)
Consistent strategy – growing distributions 60 FY06: 54.0(1) 50.0 • 27.8c from Distribution (Cents Per Share) 50 operating cash 40 35.0 • 80.6% tax deferred FY07: 30 25.5 20.0 • Substantially tax 20 deferred • Forecast yield 10 5.3 ~ 7.7% (2) 0 2002 2003 2004 2005 2006 2007 1. Transurban Forecast 2.
Slide 8: Conservative gearing
Conservative gearing Gearing 0.39* Senior Debt Rating A- ICR FY06 2.27 Group Debt $2,481m Hills Debt $440m (non recourse) Share of WM7 Debt $562.5m (non recourse) Pocahontas Debt $537.5 (non recourse) Total outstanding debt $4,021m Maturity Weighted average - 7.59 years Locked in debt 86% of long te
Slide 9: Petrol prices – independent survey
Petrol prices – independent survey Findings: • 74% were totally reliant on their car • Motorists recognise fuel saving benefits of toll roads • More likely to cut back on discretionary items such as entertainment, clothing, holidays and food Confirms rising petrol prices having minimal impact on our
Slide 10: CityLink and Petrol price
CityLink and Petrol price 800,000 $2.00 Weekday moving average 700,000 $1.50 Petrol Price ($ per litre) 600,000 $1.00 500,000 $0.50 CityLink 2005 CityLink 2006 petrol price 2005 petrol price 2006 400,000 $0.00 Fe M M N Ja Ap Ju Ju Au Se O D ov ec ct ay ar n ne l b r g p
Slide 11: CityLink
CityLink FY06 result • Traffic Ï 3.05% • Revenue Ï 10.9% • Customer service efficiency Ï 7.3% • Cash contribution Ï13.7% • Successful initiatives – Time to pay – Rear Camera – Taxi toll increase
Slide 12: Continued benefits in the pipeline
Continued benefits in the pipeline Tulla / Calder Interchange upgrade • $150m upgrade • Contract completion mid 2007 – currently ahead of schedule • Forecast uplift of 5% in toll zone 1 West Gate - CityLink - Monash upgrade • $903m expansion over 4 years • Allowance for disruption to traffic • Forec
Slide 13: Hills M2
Hills M2 FY06 result • Traffic Ï 7.8% • Revenue Ï 7.9% • Savings & synergies exceeding forecasts – $5.4 million achieved – Additional $3.6 million over next 2 years Second half FY06 • Traffic Ï 14.3% – Westlink M7 open – M2 high speed tolling
Slide 14: Hills M2 traffic uplift to continue
Hills M2 traffic uplift to continue • Residual ramp up from Westlink M7 • Lane Cove Tunnel to open end of year • Latent corridor demand returning
Slide 15: Westlink M7 – ramp up continues
Westlink M7 – ramp up continues • 45% owned – $600,000 Revenue Forecast * agreement to $550,000 Average Gross Daily Toll Revenue $500,000 acquire additional $450,000 2.5% $400,000 Actual $350,000 • 35% longer trips $300,000 than forecast $250,000 $200,000 $150,000 • Development $100,000 outstripping
Slide 16: M7 - Greenfield Project in growth corridor
M7 - Greenfield Project in growth corridor NORTH-WEST • 100,000 jobs GROWTH CENTRE • 140,000 dwellings • 80% Greenfield • 929 ha of Employment Hub WESTERN • Up to 36,000 jobs SYDNEY EMPLOYMENT • Already Growing – at M7 Hub HUB 265,000sqm committed Industrial Building Area completed by 2008 SOUTH-WES
Slide 17: Evidence of Growth - M7 Business Hub
Evidence of Growth - M7 Business Hub Coles Myer 66,500 Coca Cola Amatil 49,310 Hanson Australia 15,000 Miscellaneous Lots 135,000 M7 HUB TOTAL 265,810 Note: M7 Business Hub serviced by Walgrove Road
Slide 18: Impact of growth - Wallgrove Rd
Impact of growth - Wallgrove Rd A M P e a k T r a f f ic V o lu m e s 1750 1500 1250 Vehicles per Hour 1000 750 500 250 0 B e fo r e W M 7 A fte r W M 7 2008 2.00 1.80 After WM7 2006 2008 following M7 Travel Time(min/km) 1.60 Hub Development 1.40 1.20 1.00 Before WM7 0.80 0.60 0.40 0.20 0.00 0 200 4
Slide 19: International
International • Strategic and disciplined – United Kingdom and United States • Primary international focus is USA – First investment complete • International structure and funding being finalised
Slide 20: Consolidating in Virginia
Consolidating in Virginia • Pocahontas acquired 29 June 2006 • Awarded preferred status on I-95 • Exclusive on Capital Beltway
Slide 21: Pocahontas Parkway, Virginia
Pocahontas Parkway, Virginia Acquisition Statistics • Acquired for US$604 million • Equity IRR 12.6% • Equity of up to US$191 million funded through DRP – (~A$200m already raised) • Financial Close June 2006 Key Facts • 14 km • 99 year concession • Fixed toll schedule to 2016 (5.9% CAGR) then greate
Slide 22: Wilton on the James
Wilton on the James HHHunt artists impression
Slide 23: Funding for international business
Funding for international business How are our security-holders best served? • Participation in asset ownership and re-rating • Get paid for work already done • Derive reward for efforts going forward Without continual sizeable calls for capital
Slide 24: Option being considered
Option being considered • Formation of an unlisted international investment vehicle • Transurban a foundation investor • Additional capital sourced externally • Transurban to operate and manage vehicle for co-investors
Slide 25: Next steps
Next steps • Corporate restructure to enable flexibility • Consult with existing Transurban security holders • Sound the market for interest
Slide 26: Transurban
Transurban • Strong balance sheet • Premier assets, growing cashflows, increasing distributions • Growing market opportunities • Discipline
Slide 27: rban —
rban — transul
Slide 28: Virginia - HOT Lanes
Virginia - HOT Lanes Capital Beltway I95 • Exclusive agreement • Preferred proponent with VDoT • 94 kms (56 miles) • 22.4 kms (14 miles) • Environmental approval • Environmental clearance process underway in June 2006 • Financial Close expected • Financial Close late 2007 / early 2008 SR 91 HOT Lane