Atlas Arteria · ASX:ALX
Atlas Arteria — Macquarie Atlas Roads — FY2013 Earnings Presentation
41 slides from Atlas Arteria's earnings presentation, Feb 27, 2014
Slide 1: Macquarie Atlas Roads 2013 Full Year Results Presentation
Macquarie Atlas Roads 2013 Full Year Results Presentation 27 February 2014
Slide 2: Important notice and disclaimer
I Important t t notice ti and d disclaimer di l i Disclaimer Macquarie Atlas Roads (MQA) comprises Macquarie Atlas Roads Limited (ACN 141 075 201) (MARL) and Macquarie Atlas Roads International Limited (Registration No. 43828) (MARIL). Macquarie Fund Advisers Pty Limited (ACN 127 735 960) (AFSL 318
Slide 3: Important notice and disclaimer
I Important t t notice ti and d disclaimer di l i Hong Kong This document has been prepared and intended to be disposed solely to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong for the purpose of providing preliminary information and does
Slide 4: Contents
C t t Contents 1. Overview 4 2. Financial Performance 7 3. Asset Review 15 4 4. Q Questions ti 31 5 5. Appendix 32 PAGE 3
Slide 5: Overview
Overview Peter P t Trent T t Chief Executive Officer
Slide 6: 2013 Snapshot
2013 S Snapshot h t Growth in portfolio traffic traffic, revenue and EBITDA levels Traffic 2013 Statutory results summary Profit from continuing operations: A$41.9m (2012: A$58.1m loss) +0.9% Profit after income tax: A$1,423.5m (2012: A$124.4m loss) Revenue Traffic and revenue APRR performance
Slide 7: 2013 segmented results
2013 segmented t d results lt Toll o increases c eases o over e tthe e last ast 12 months o t s suppo supported ted revenue e e ue g growth o t oon MQA’s Q s portfolio toll roads Continued signs of emerging improvement on both APRR and Dulles Greenway Operating expenses on Dulles Greenway and In
Slide 8: Financial Performance
Financial Performance Mary Nicholson M Ni h l Chief Financial Officer
Slide 9: MQA statutory accounts
MQA statutory t t t accounts t Accounting changes flagged in June 2013 ASX release Cessation of hedge accounting for M6 Toll swaps (in late April) and deconsolidation of the M6 Toll group (in early June) have resulted in significant one-off items in the statutory accounts Deconsolidation of M6 Toll
Slide 10: Consolidated profit & loss account
Consolidated profit & loss account Statutory accounts – year ended 31 December 2013 Non- MQA Total MQA Total MQA controlled year to year to A$m Corporate M6 Toll assets 31 Dec 13 31 Dec 12 Revenue 0.4 - - 0.4 0.4 Management fees (20.0) - - (20.0) (14.8) Other operating expenses (3.1) - - (3.1) (2.9)
Slide 11: Consolidated balance sheet
Consolidated balance sheet Statutory accounts – as at 31 December 2013 Non- MQA Total MQA Total MQA controlled as at as at A$m Corporate M6 Toll assets 31 Dec 13 31 Dec 12 Current assets 19.6 - - 19.6 62.4 Investments in associates - - 862.7 862.7 702.8 Property, plant and equipment - - - - 746.7 To
Slide 12: MQA cash flow summary
MQA cash h flflow summary Available cash A$m Distributions from Financière Eiffarie (FE) of €14.6m Opening balance – 1 January 2013 13.7 in March and €21.1m in September 2013 Distributions from assets 48.8 US ttax refund f d 31 3.1 US$3.2m tax refund in January 2013 in respect of US Interest on
Slide 13: Management fees
M Management t fees f Management fee rate payable by MQA has been lowered by 0.25% Reduction to be in effect until further notice by Macquarie Applies to market capitalisations up to A$3 billion Effective new management fee rates are – 1.75% p.a. for market capitalisations up to A$1 billion, p
Slide 14: MQA dividend
MQA dividend di id d MQA 1H 2014 dividend guidance of 5.0 cents per security Subject to foreign exchange movements and unforeseen events Expect to declare in March and pay in early April 100% foreign dividend from MARIL1 Dividend reconciliation A$m March 2014 receipt from Financière Eiffarie ~
Slide 15: APRR free cash flow
APRR ffree cash h flflow Financière Eiffarie distributions, distributions and therefore MQA dividends dividends, reflect only a portion of APRR free cash flow APRR consistently generates cash flow in excess of net profit. The excess is used to fund capex and debt repayments at the APRR level level
Slide 16: Asset Review
Asset Review Peter P t Trent T t Chief Executive Officer
Slide 17: APRR/Eiffarie 2013 Results
APRR/Eiffarie 2013 Results Traffic +0.8% Impacted by challenging economic environment 21.3bn VKT Revenue +3.0% Supported by increases in tolls and higher fees from retail and telecommunication facilities €2,099.2m EBITDA1 +3.4% Benefited from opex controls €1,475.4m EBITDA margin i iincrease
Slide 18: APRR traffic analysis
APRR/Eiffarie APRR traffic analysis Total VKT up 0.8% in 2013 Light vehicle traffic positive during all four quarters Heavy vehicle traffic growth trending upwards Light vehicles – Quarterly growth on pcp Total – Quarterly growth on pcp 3.0% 3.0% 2.0% 0% 2.0% 1.0% 0.0% 1Q 13 2Q 13 3Q 13 4Q 13 1
Slide 19: APRR traffic – light vehicles
APRR/Eiffarie APRR traffic – light vehicles Light g vehicle traffic has outperformed p GDP Contribution from growth of real household disposable income APRR Light Vehicles and Economic Indicators1,2 110 105 100 95 90 85 80 2005 2006 2007 2008 2009 2010 2011 2012 2013 LV Traffic GDP Disposal Income 1
Slide 20: APRR traffic – heavy vehicles
APRR/Eiffarie APRR traffic – heavy vehicles Heavy y vehicles correlated to French manufacturing g Foreign trade volumes an additional factor APRR Heavy Vehicles and Economic Indicators1,2 110 100 90 80 70 60 2005 2006 2007 2008 2009 2010 2011 2012 2013 HV Traffic Imports Manufacturing 1. Moving 12 m
Slide 21: European economic sentiment indicator
APRR/Eiffarie European economic sentiment indicator European p economic sentiment has continued its upward p trend since late 2012 IMF projects French GDP to grow by 0.9% in 20141 European Economic Sentiment Indicator2,3 120 HGV decline commences 110 100 90 Improving HGV 80 outlook 70 60 1990 1992 1
Slide 22: APRR performance
APRR/Eiffarie APRR performance Growth maintained through g economic cycles y APRR EBITDA (€m)1 and France GDP growth (%)2 €1,750m 3.0% 1,475 €1,500m 1,399 1,428 2.0% 1,326 1,265 €1,250m 1,208 1,244 1.0% €1,000m -% 974 1,068 924 9413 €750m 841 888 (1.0%) €500m (2.0%) €250m ((3.0%)) €0m (4.0%) 2001 20
Slide 23: Operating profit bridge
€300m €350m €400m €450m €500m Net profit 2 2011 395 APRR profit 17 Reve enue Increase in APRR’s APRR/Eiffarie 6 Op pex 6 Operatin ng taxes 7 D&A, provis D sions, otherr 36 Net intterest 4 Incom me tax Net profit 2 2012 392 61 Reve enue 2 Op pex APRR s profit reflecting higher revenue and interest sa
Slide 24: Financing
APRR/Eiffarie Financing APRR well supported in bond markets 2013/14 APRR debt issuances – €300m floating rate notes issued (0.87% margin) due in 2016 – €500m EMTN issued due in 2020 (margin of 90bps over midmid-rate rate swaps) coupon of 2 2.25% 25% APRR Bonds: Mid-Yield to Maturity 6.0% 5.0% 2,76
Slide 25: APRR/Eiffarie liquidity
APRR/Eiffarie APRR/Eiffarie liquidity Strong liquidity position with manageable maturity profile Financing costs expected to trend lower – Potential to improve overall financing terms over time S&P upgraded APRRAPRR’s s credit rating to BBB (positive outlook) in December 2013 – Fitch: BBB+ (stab
Slide 26: Management Contract
APRR/Eiffarie Management Contract APRR and AREA entered into new management contracts with the French State in early 2014 Capital expenditure Management contract capital expenditure of around €500m Average total annual capex forecast of ~€320m (real) between 2014-20181 Tariff increases Annual
Slide 27: Looking forward
APRR/Eiffarie Looking forward Stimulus package Potential for additional capex under government stimulus package in return for concession extensions. European Commission determinations anticipated to be concluded during 2014 Land tax Land tax (operational tax based on revenue and network length)
Slide 28: Dulles Greenway 2013 Results
Dulles Greenway 2013 Results Traffic +1.5% Continued signs of emerging improvement 47,053 ADT Revenue +3.5% Supported by the January 2013 toll increases US$74.9m Limited toll elasticity EBITDA +1.0% Operational expenses affected by property taxes and various one off costs US$58.8m PAGE 27
Slide 29: Dulles Greenway
Dulles Greenway Other developments Dulles Greenway corridor Base B ttraffic ffi continues ti to t show h signs i off emerging i growth th Urban development in Loudoun county continuing – positive for long term traffic trends C Commonwealth lth off Virginia Vi i i Commonwealth of Virginia will
Slide 30: M6 Toll Refinancing
M6 Toll Refinancing M6 Toll successfully refinanced during 2013 Debt Debt D bt reorganised i d with ith an extended t d d maturity t it tto 1 JJune 2020 Ownership MQA will remain the legal owner of all of the ordinary equity in the M6 Toll Management fee MQA will receive an annual fee of £750,
Slide 31: Other assets
Other assets 2013 results Assets Traffic Revenue EBITDA Comments Chicago New toll rates implemented on 1 January 2013 resulted in Skyway both weaker traffic and higher revenue over the period. -2.3% +14.3% +15.3% Revenue performance driven by the July 2012 toll Indiana increase and higher traffic vo
Slide 32: Questions
Questions
Slide 33: Appendix
Appendix
Slide 34: Cash flow: APRR to MQA shareholders
APRR/Eiffarie Cash flow: APRR to MQA shareholders Cash flow: APRR to MQA shareholders (€m) Eiffarie/Financière Eiffarie 2H 2013 APRR dividend A 213 add APRR tax instalments to FE B 120 add Other1 C 5 less Eiffarie net interest D (123) less FE tax payments/provisions E (38) Distributable cash F=A+B+C
Slide 35: MQA free cash flow
APRR/Eiffarie MQA free cash flow Cash flow: APRR to MQA shareholders FY 2013 APRR free cash flow (€m) 737 Eiffarie net interest (€m) (224) Eiffarie opex (€m) (1) Tax grouping (€m) 174 Consolidated free cash flow (€m) 686 MQA’s proportionate share in € (19.44%) (€m) 133 MQA’s proportionate share in A
Slide 36: APRR capital expenditure
APRR/Eiffarie APRR capital expenditure Since 2006, ~€3.15bn has been spent to grow, improve and maintain the network $600m $500m 24 81 $400m 65 45 159 $300m 187 343 44 303 27 54 69 215 $200m 75 240 171 168 165 104 123 66 139 $100m 100 110 122 115 102 115 108 78 94 93 57 $0m 2003 2004 2005 2006 2007
Slide 37: APRR operations
APRR/Eiffarie APRR operations EBITDA margin at 70.3% Operating expenses (ex operating taxes) broadly flat since 2006 €800m 80.0% 68.4% 69.2% 70.0% 70.3% 67.0% 67.8% 68.0% 64.0% €600m 60.0% 232 229 231 236 240 2641 258 2752 €400m 40.0% 153 162 149 139 156 140 133 132 €200m 20.0% 209 209 210 220 218 2
Slide 38: MQA statutory accounts
MQA statutory t t t accounts t Statutory accounts for the year ended 2013 shaped by deconsolidation of the M6 Toll Statutory accounting MQA ceased consolidating the M6 Toll in June 2013 MQA equity accounts its non-controlled assets: APRR, Dulles Greenway, Chicago Skyway, Indiana Toll Road, Warno
Slide 39: Statutory accounts vs Management Information Report (MIR)
Statutory accounts vs M Management t Information I f ti Report R t (MIR) Statutory result for the period Proportionally consolidated financial performance M6 Toll results from 1 January 2013 to 4 June 2013 are shown as Aggregation of operating results of proportionate interests in all toll road deco
Slide 40: Proportionately consolidated performance
Proportionately consolidated performance f Actual Pro Forma Actual Year ended Year ended Change vs Year ended A$m 31 Dec 13 31 Dec 121 2 pcp 31 Dec 12² Operating revenue 682.9 659.1 3.6% 590.8 Operating expenses (193.2) (185.9) 3.9% (166.2) EBITDA from road assets 489.7 473.3 3.5% 424.6 EBITDA margi
Slide 41: Reconciliation
Reconciliation Cash flow and cash balance Y Year ended d d Y Year ended d d A$m 31 Dec 2013 31 Dec 2012 Net statutory operating cash flows 10.9 45.3 M6 Toll related adjustment ((28.3)) ((63.0)) MQA corporate level adjustments: Proceeds from investments 48.3 10.0 Other items 0.0 2.4 Net operating cas