Transurban Group Ltd. · ASX:TCL
Transurban — Investor Day (April 2013)
67 slides from Transurban's investor day presentation, Apr 19, 2013
Slide 1: Transurban 2013 Investor Day
TRANSURBAN 2013 INVESTOR DAY 19 APRIL 2013
Slide 2: Disclaimer
DISCLAIMER 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 Transurban Infrastructur
Slide 3: Welcome
WELCOME SCOTT CHARLTON transurban
Slide 4: Agenda
AGENDA TIME PRESENTATION SPEAKER 09:15 WELCOME SCOTT CHARLTON – Chief Executive Officer 09:30 STRATEGY WESLEY BALLANTINE – Group General Manager Strategy 10:00 NSW MARKET UPDATE ANDREW HEAD – Group General Manager NSW TIM STEINHILBER – Group General Manager Delivery and Operations 10:30 BREAK 10:45
Slide 5: Strategy Confirmation
STRATEGY CONFIRMATION ROAD CLEAR INFRASTRUCTURE COMPETITIVE MARKET PARTNER OF ADVANTAGE DEFINITION CHOICE
Slide 6: Strategy
STRATEGY WESLEY BALLANTINE transurban
Slide 7: Strategic Approach
STRATEGIC APPROACH ACTIVE MANAGEMENT LEVERAGE NETWORKS ASSET ENHANCEMENTS INNOVATIONS ORGANIC GROWTH
Slide 8: Growth in Sydney
GROWTH IN SYDNEY NETWORK DEMOGRAPHICS 7
Slide 9: Growth in Melbourne
GROWTH IN MELBOURNE NETWORK DEMOGRAPHICS
Slide 10: Asset Lifecycle
ASSET LIFECYCLE AUSTRALIAN PORTFOLIO GROWTH CHARACTERISTICS 9
Slide 11: Asset Lifecycle
ASSET LIFECYCLE AUSTRALIAN PORTFOLIO GROWTH CHARACTERISTICS
Slide 12: Monash-CityLink-West Gate Upgrade
MONASH-CITYLINK-WEST GATE UPGRADE UNLOCKING CAPACITY FORECAST UPLIFT ON CITYLINK FROM MONASH-CITYLINK-WEST GATE UPGRADE PROJECT 11
Slide 13: Asset Lifecycle
ASSET LIFECYCLE AUSTRALIAN PORTFOLIO GROWTH CHARACTERISTICS
Slide 14: Hills M2 Upgrade
HILLS M2 UPGRADE UNLOCKING CAPACITY FORECAST UPLIFT FROM HILLS M2 UPGRADE PROJECT 13
Slide 15: Efficient Network Usage
EFFICIENT NETWORK USAGE CO-ORDINATED RAMP METERING Co-ordinated ramp metering on Monash Freeway – demonstrated improvements in speed and flow1 Before (Oct 2007) After (Oct 2008) Change Average Flow (vehicle/hr/lane) 1731 1816 +4.9% Travel Speed (km/h) 48.9 66 +34.9% Average Delay (min/km) 0.49 0.17
Slide 16: Innovative Network Management
INNOVATIVE NETWORK MANAGEMENT EXPRESS LANES 15
Slide 17: Policy
POLICY NETWORK EFFICIENCIES GREATER INTEGRATED FUND INVESTMENT PRICING MANAGE EFFICIENCIES IN MODES OF IN TRANSPORT MECHANISMS DEMAND ROAD NETWORK TRANSPORT INFRASTRUCTURE
Slide 18: Sustainability
SUSTAINABILITY ENHANCING OUR LICENCE TO OPERATE BE GOOD USE THINK NEIGHBOURS LESS LONG-TERM MANAGEMENT METHODOLOGY 17
Slide 19: Economic and Community Benefits
ECONOMIC AND COMMUNITY BENEFITS TOLL ROAD NETWORKS ENHANCED SAFETY $14.5 BILLION $22.7 BILLION LOWER CARBON COMMUNITY BENEFITS NPV ECONOMIC EMISSIONS CONTRIBUTION CONNECTIVITY M1 – CITYLINK SYDNEY’S TOLL UPGRADE* DEVELOPMENT ROAD NETWORK – 2008* EMPLOYMENT *Victorian Government estimate *Ernst & You
Slide 20: NSW Market Update
NSW MARKET UPDATE ANDREW HEAD & Tim STEINHILBER
Slide 21: NSW Market Overview
NSW MARKET OVERVIEW Hills M2 Upgrade Nearing completion F3–M2 (M3) Proposal Hills M2 / LCT O&M integration and Lane Cove Road On-Ramp M5 West Widening Under construction
Slide 22: Hills M2 Upgrade
HILLS M2 UPGRADE COMPLETION EXPECTED AUGUST 2013 Windsor Rd Herring/Christie Toll increases Traffic Concession ramps Rd ramps PHR Plaza uplift extension Opened Opened April 2013 and other From mid 2013 4 years – 25 July 2012 20 January 2013 toll points Aug 2013 2042 to 2046 PROJECT COST M7 M2 Origin
Slide 23: Hills M2 Upgrade Near-Term Returns
HILLS M2 UPGRADE NEAR-TERM RETURNS 14.5% 22.2% 8.8% 15 APRIL 2013 AT COMPLETION $3.15 $2.75 $6.05 $4.95 $2.98* & $1.94 $2.74 $2.11* * PENNANT HILLS MAIN PLAZA MACQUARIE PARK* ROAD PLAZA & WINDSOR ROAD** RAMPS Increases are estimates based on indexation assumptions and timing of project completion
Slide 24: Hills M2 Upgrade Unlocking Capacity
HILLS M2 UPGRADE UNLOCKING CAPACITY FORECAST UPLIFT FROM HILLS M2 UPGRADE PROJECT 23
Slide 25: Lane Cove Tunnel
LANE COVE TUNNEL ASSET INTEGRATION AND OPTIMISATION PRE-ACQUISITION OPERATING LANE COVE ROAD CONSOLIDATION 42% 65% O&M RAMP MARGIN* MARGIN** *Based on FY09 normalised results **Delivered 31 December 2010
Slide 26: M5 West Widening
M5 WEST WIDENING PROGRESS ON SCHEDULE 25
Slide 27: Diversified Funding Sources
DIVERSIFIED FUNDING SOURCES HILLS M2 UPGRADE M5 WEST WIDENING TRAFFIC CONCESSION TRAFFIC UPLIFT EXTENSION UPLIFT TOLL NEW CONCESSION TRUCK TOLL INCREASE RAMPS EXTENSION MULTIPLIER
Slide 28: M3 Proposal
M3 PROPOSAL PROPOSED ALIGNMENT 27
Slide 29: M3 Proposal
M3 PROPOSAL THREE STAGE UNSOLICITED PROPOSAL PROCESS STAGE 1 STAGE 2 STAGE 3 CURRENT STATUS D&C PROCUREMENT, UNSOLICITED PROPOSAL ENVIRONMENTAL ASSESSMENT EARLY 2012 FINANCIAL CLOSE TARGETED FOR LATE 2014
Slide 30: Missing Links
MISSING LINKS NSW LONG-TERM TRANSPORT MASTER PLAN 29
Slide 31: Victorian Market Update / Technology
VICTORIAN MARKET UPDATE / TECHNOLOGY VIN VASSALLO & LISA TOBIN
Slide 32: Victorian Market
VICTORIAN MARKET OVERVIEW Southern Link Southern Link traffic growth since upgrade completion 2010 Western Link CITYLINK • Capacity constraint WESTERN LINK • Major resurfacing work undertaken SUCCESSFUL ROLLOUT CITYLINK SOUTHERN LINK OF GLIDE ON CITYLINK
Slide 33: Monash-CityLink-West Gate Upgrade
MONASH-CITYLINK-WEST GATE UPGRADE UNLOCKING CAPACITY FORECAST UPLIFT ON CITYLINK FROM MONASH-CITYLINK-WEST GATE UPGRADE PROJECT 33
Slide 34: Tunnel Speeds
TUNNEL SPEEDS STRENGTHENED VALUE PROPOSITION
Slide 35: Increased Throughput
INCREASED THROUGHPUT UNLOCKING CAPACITY TIME OF DAY TRAVEL – SOUTHERN LINK OUTBOUND (YARRA BLVD) 35
Slide 36: Bolte Bridge
BOLTE BRIDGE transurban, OPPORTUNITY
Slide 37: Western Link Average Speed
AVERAGE SPEED (AM PEAK) 7AM-—10AM — WEEKDAYS ON WESTERN LINK “| => BELL ST TO FLEMINGTON RD al => _FLEMINGTON RD TO BOLTE 80) — —_—— ————— 7oF S ee OSS 60} Reg Se . sof —— “| ee 30 20) 10 ——__—— TT. transurban
Slide 38: Missing Links
MISSING LINKS POTENTIAL NORTH EAST East West Link LINK
Slide 39: Glide
GLIDE ROADSIDE TO CUSTOMER ROADSIDE EQUIPMENT Communication & payment channels CUSTOMER Interoperability Identification & enforcement 39
Slide 40: Customer Management
CUSTOMER MANAGEMENT EFFICIENCIES ACHIEVED CUSTOMER MOVING TO WEB DUE TO ENHANCED CAPABILITIES
Slide 41: Technology
TECHNOLOGY END-TO-END SYSTEMS APPROACH TARGET OPERATING ENVIRONMENT BACK OFFICE SYSTEM Electronic Toll Collection Pricing System Traffic Management System Maintenance Online Management System Tolling Roadside Equipment TMS Roadside Equipment 41
Slide 42: Technology
TECHNOLOGY STABLE FUTURE - LONG TERM PLANNING REQUIRED Source: Deloitte report - Building the Lucky Country #2 Digital Disruption: Short fuse, big bang?
Slide 43: USA Market Update
USA MARKET UPDATE MICHAEL KULPER & Tim STEINHILBER
Slide 44: US Market Overview
US MARKET OVERVIEW TRANSURBAN ASSETS
Slide 45: 495 Express Lanes
495 EXPRESS LANES EFFECTIVE START UP B A 495 Express Lanes A B New ramps C Flexible divider posts B C C 45
Slide 46: Solid Foundation
SOLID FOUNDATION FOCUS ON VALUE DRIVERS EFFECTIVE NORTHERN TOLL DELIVERY & EFFECTIVE SPEED LIMIT SETTING VALUE MARKETING TERMINUS OPERATIONS OPERATIONS INCREASE INITIATIVES PROGRAM ALIGNMENT APPROACH START UP
Slide 47: Trip Mix
TRIP MIX IN LINE WITH EXPECTATIONS 47
Slide 48: Toll Price Increasing
TOLL PRICE INCREASING MAJOR DRIVER OF REVENUE GROWTH (1) E-ZPass Toll Revenue; excludes revenue from violations. Weekday is Monday – Friday, excluding holidays.
Slide 49: Maximum Toll Price
MAXIMUM TOLL PRICE WEEKDAY MAX TOLL CHARGED1 FOR END TO END TRIP (1) Maximum toll charged per weekday E-ZPass Trip (weekday is Monday – Friday, excluding holidays). 49
Slide 50: Growing the Customer Base
GROWING THE CUSTOMER BASE POSITIVE EXPERIENCES AND LARGE MARKET TO TAP 75% of customers likely to use again 40% of frequent Beltway travellers say they are likely to use the Express Lanes 67% haven’t tried Express Lanes yet
Slide 51: 95 Express Lanes
95 EXPRESS LANES COMPARATIVE PROFILES LENGTH LENGTH 29 miles 12 miles CONFIGURATION CONFIGURATION 2 – 3 reversible lanes 2 lanes in each direction FACILITY TYPE FACILITY TYPE Radial Circumferential CAPACITY CAPACITY 17%1 50% GENERAL PURPOSE LANE IMPACTS GENERAL PURPOSE LANE IMPACTS Corridor capacity
Slide 52: 95 Express Lanes Project Update
95 EXPRESS LANES PROJECT UPDATE 31% COMPLETE GOOD SAFETY RECORD 45 OUT OF 51 DESIGN PACKAGES APPROVED CONSTRUCTION OF BRIDGES & FLYOVER RAMPS UNDER WAY
Slide 53: Structure
STRUCTURE SUE JOHNSON transurban
Slide 54: Core Competencies
CORE COMPETENCIES NETWORK OPERATIONS PROJECT APPLICATION OF COMMUNITY PLANNING & & CUSTOMER DEVELOPMENT TECHNOLOGY ENGAGEMENT FORECASTING MANAGEMENT & DELIVERY
Slide 55: Delivery Matrix Structure
DELIVERY MATRIX STRUCTURE VIC NSW USA FINANCE DELIVERY TECHNOLOGY STRATEGY HR 55
Slide 56: Delivery & Operations
DELIVERY & OPERATIONS VIC NSW USA DELIVERY • Major projects: • Hills M2 Upgrade • 95 Express Lanes • M5 West Widening • M3 • Operations and maintenance
Slide 57: Network Planning and Forecasting
NETWORK PLANNING AND FORECASTING VIC NSW USA STRATEGY • Traffic services group - Network models - Input to major projects - Sector-leading capability
Slide 58: Investment Process
INVESTMENT PROCESS SAMANTHA HOGG
Slide 59: Investment Evaluation Process
INVESTMENT EVALUATION PROCESS PORTFOLIO FIT RISK PROFILE • Network features • Project characteristics • Demographics • Risk allocation • Future growth • Cash flow profile PROSPECTIVE INVESTMENT EVALUATION CONTRACTUAL KEY METRICS PROTECTIONS • Investment returns • Concession terms • Leverage • Financ
Slide 60: Strategic Opportunities
STRATEGIC OPPORTUNITIES • Negotiated transactions LEVERAGE NEAR TERM • Existing roads – brownfields risk NETWORKS • Multiple funding sources RETURNS ACHIEVABLE (tolls, concessions, etc) 61
Slide 61: Diversified Funding Sources
DIVERSIFIED FUNDING SOURCES HILLS M2 UPGRADE M5 WEST WIDENING CONCESSION TRAFFIC TRAFFIC EXTENSION UPLIFT UPLIFT TOLL NEW CONCESSION TRUCK TOLL INCREASE RAMPS EXTENSION MULTIPLIER
Slide 62: Investment Criteria
INVESTMENT CRITERIA BENCHMARK EXPECTED FUNDING FUNDING BASE CASE UPFRONT DISTRIBUTION PROJECT INVESTMENT EQUITY PROFILE RETURNS DECISION RETURNS RISK ADJUSTED 63
Slide 63: Growing Balance Sheet Capacity
GROWING BALANCE SHEET CAPACITY
Slide 64: Long Gestation for Projects
LONG GESTATION FOR PROJECTS NEGOTIATION PHASE CONSTRUCTION PHASE 3 YEARS M2 2007 – 2010 Dec 2010 – Aug 2013 Earlier proposal 2008 2 YEARS M5 Apr 2010 – June 2012 July 2012 – late 2014 95 2005 – 2012 2 YEARS 65
Slide 65: Summary
SUMMARY SCOTT CHARLTON transurban
Slide 66: Summary
SUMMARY STRATEGY NETWORK GROWTH DISCIPLINED STRENGTHENED CONFIRMED LEVERAGE OPPORTUNITIES APPROACH TEAM 69
Slide 67: Transurban
transurban