Atlas Arteria · ASX:ALX
Atlas Arteria — FY2020 Earnings Presentation
52 slides from Atlas Arteria's earnings presentation, February 2021
Slide 1: Results Presentation
Atlas Arteria | Results Presentation for the year ended 31 December 2020 Results Presentation For the year ended 31 December 2020
Slide 2: Important Information
Atlas Arteria | Results Presentation for the year ended 31 December 2020 2 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 constitu
Slide 3: Contents
Atlas Arteria | Results Presentation for the year ended 31 December 2020 3 Contents 1. Key Highlights Graeme Bevans, CEO 2. Financial Performance Nadine Lennie, CFO 3. Operations Graeme Bevans, CEO 4. Outlook Graeme Bevans, CEO 5. Appendices Photo of Dulles Greenway, source: David Madison photograph
Slide 4: Key Highlights
Atlas Arteria | Results Presentation for the year ended 31 December 2020 4 1 Key Highlights Graeme Bevans Chief Executive Officer Photo of APRR, source: APRR
Slide 5: 2020 Key Highlights
Atlas Arteria | Results Presentation for the year ended 31 December 2020 5 2020 Key Highlights 2020 has been a year for building resilience and capacity for growth at Atlas Arteria Uninterrupted operations - focus on health, customers and communities • Traffic across all the jurisdictions in which o
Slide 6: 2020 Milestones
Atlas Arteria | Results Presentation for the year ended 31 December 2020 6 2020 Milestones Continued delivery against strategy to build resilience, grow cashflows and enhance long-term value Strategic Framework Reduce legacy Maximise operational Disciplined capital complexity to maximise efficienc
Slide 7: Managing through COVID-19
Atlas Arteria | Results Presentation for the year ended 31 December 2020 7 Managing through COVID-19 COVID-19 impact on traffic and operations varied across our businesses, however seamless operations were maintained France (APRR / ADELAC) Considered and measured operational responses • ~2,300km of
Slide 8: Managing through COVID-19
Atlas Arteria | Results Presentation for the year ended 31 December 2020 8 Managing through COVID-19 Businesses well positioned for 2021 and beyond Key trends The Atlas Arteria business Rolling movement restrictions to manage COVID-19 • Business continuity plans well engrained, ensuring seamless ope
Slide 9: COVID-19 Overview by Region
Atlas Arteria | Results Presentation for the year ended 31 December 2020 9 COVID-19 Overview by Region France 1 Feb 2020 1 Apr 2020 1 Jun 2020 1 Aug 2020 1 Oct 2020 1 Dec 2020 1 Feb 2021 Progressive 17 March, border 11 May – 22 June, easing of lockdown 29 October, restrictions return, this time with
Slide 10: Financial Overview
Atlas Arteria | Results Presentation for the year ended 31 December 2020 10 Financial Overview COVID-19 impacted traffic across our portfolio, with European roads showing resilience during the second wave Revenue Performance for 2020 vs 2019 Business Overview Contribution to Traffic Toll EBITDA1 Atl
Slide 11: Traffic in Europe Demonstrates Resilience
Atlas Arteria | Results Presentation for the year ended 31 December 2020 11 Traffic in Europe Demonstrates Resilience APRR Warnow Tunnel APRR Traffic vs. 2019 Rapid recovery post Warnow Tunnel Traffic vs 2019 Rapid recovery post restrictions easing 20.0% restrictions easing Q3, 0.8% Percent change f
Slide 12: Sustainability Achievements in 2020
Atlas Arteria | Results Presentation for the year ended 31 December 2020 12 Sustainability Achievements in 2020 Strong success on our sustainability priorities in 2020 Atlas Arteria SAFETY OUR PEOPLE ranked 4th out of 156 • Improved safety metrics across the business • 50% gender balance achieved ac
Slide 13: Sustainability Priorities for 2021
Atlas Arteria | Results Presentation for the year ended 31 December 2020 13 Sustainability Priorities for 2021 Continuing focus on our sustainability priorities in 2021 CUSTOMERS & ENVIRONMENTAL SAFETY OUR PEOPLE COMMUNITY STEWARDSHIP • Continue to embed a safety-first • Maintain our 40% commitment
Slide 14: Financial Performance
Atlas Arteria | Results Presentation for the year ended 31 December 2020 14 2 Financial Performance Nadine Lennie Chief Financial Officer Photo of APRR, source: APRR
Slide 15: Setting the Scene: Capital Management Strategy
Atlas Arteria | Results Presentation for the year ended 31 December 2020 15 Setting the Scene: Capital Management Strategy Managing capital for a sustainable business 2020 Objectives Capital management in 2020 Maintaining balance • Dual focus on cash flow and balance sheet to enable • Refinanced Eif
Slide 16: Strong Balance Sheet
Atlas Arteria | Results Presentation for the year ended 31 December 2020 16 Strong Balance Sheet Substantial liquidity headroom at corporate and business levels Atlas Arteria holds c. A$194 million of liquidity APRR continues to be well capitalised with Dulles Greenway has c. US$216 million of cash
Slide 17: Atlas Arteria Cashflow for H2 2020
Atlas Arteria | Results Presentation for the year ended 31 December 2020 17 Atlas Arteria Cashflow for H2 2020 APRR dividends to Atlas Arteria Corporate operational cashflows Cash balance (€m) (A$m) (A$m) H1 20 Remove APRR Eiffarie Dist. from MAF2 ALX ALX Warnow Macquarie Corp. HQ Interest Investmen
Slide 18: Atlas Arteria Income Statement
Atlas Arteria | Results Presentation for the year ended 31 December 2020 18 Atlas Arteria Income Statement Atlas Arteria A$m 2020 2019 % Chg Profitability impacted by COVID-19 Revenue and other income — Toll revenue 95.3 150.4 (37%) Toll revenue performance a result of COVID-19 movement restrictions
Slide 19: APRR Financial Performance
Atlas Arteria | Results Presentation for the year ended 31 December 2020 19 APRR Financial Performance COVID-19 movement restrictions impacted financial performance during 2020, but traffic is recovering well €m1 2020 2019 % change • Revenues exclude IFRIC 12 and were impacted by reduced traffic, pa
Slide 20: APRR Financial Position
Atlas Arteria | Results Presentation for the year ended 31 December 2020 20 APRR Financial Position APRR strong balance sheet rated A- / A-2 with a stable outlook APRR Group pro-forma debt maturity profile as at 31 Dec 2020 APRR has significant balance sheet flexibility to support growth Rating A- S
Slide 21: Warnow Tunnel Financial Overview
Atlas Arteria | Results Presentation for the year ended 31 December 2020 21 Warnow Tunnel Financial Overview Continued strong financial performance at Warnow, with restructured debt to unlock cash flows €m1 2020 2019 % change • Traffic at Warnow continues to perform well, despite lockdowns during th
Slide 22: Dulles Greenway Financial Overview
Atlas Arteria | Results Presentation for the year ended 31 December 2020 22 Dulles Greenway Financial Overview Strong liquidity at the Dulles Greenway, traffic impacted by continued working from home recommendations US$m1 2020 2019 % change • Operating revenues impacted by reduced traffic due to COV
Slide 23: Operations
Atlas Arteria | Results Presentation for the year ended 31 December 2020 23 3 Operations Graeme Bevans Chief Executive Officer Photo of Warnow Tunnel, source: Trent Perrett Photography
Slide 24: Critical Infrastructure that Link Communities
Atlas Arteria | Results Presentation for the year ended 31 December 2020 24 Critical Infrastructure that Link Communities Our networks provide critical infrastructure that connects our customers with their communities Keeping communities connected Edouard is a truck driver, hauling essential supplie
Slide 25: APRR and ADELAC Operational Update
Atlas Arteria | Results Presentation for the year ended 31 December 2020 25 APRR and ADELAC Operational Update Working closely with the French Government to provide services and safe travel Operational update Recognition • Operations were maintained during the COVID-19 pandemic with business continu
Slide 26: APRR Capital Expenditure
Atlas Arteria | Results Presentation for the year ended 31 December 2020 26 APRR Capital Expenditure Investing to grow the footprint and improve customer experience Projects currently underway • There were some delays as a result of COVID-19, but all capex projects are now progressing well and on tr
Slide 27: Warnow Tunnel Operational Update
Atlas Arteria | Results Presentation for the year ended 31 December 2020 27 Warnow Tunnel Operational Update Operational enhancements continued to be implemented to meet the needs of customers and communities Operational update • Operational highlights: — A survey of almost 1,600 customers in collab
Slide 28: Dulles Greenway Operational Update
Atlas Arteria | Results Presentation for the year ended 31 December 2020 28 Dulles Greenway Operational Update We continue to focus on improving the customer experience and position the Greenway for the return of traffic Operational update • Operational highlights: — Ms. Renée N. Hamilton commenced
Slide 29: Outlook
Atlas Arteria | Results Presentation for the year ended 31 December 2020 29 4 Outlook Graeme Bevans Chief Executive Officer Photo of Dulles Greenway, source: David Madison photography
Slide 30: Key Priorities and Outlook for 2021
Atlas Arteria | Results Presentation for the year ended 31 December 2020 30 Key Priorities and Outlook for 2021 Atlas Arteria APRR and ADELAC Warnow Tunnel Dulles Greenway • Continued focus on sustainability, • Ongoing dialogue with French State • Continue to engage with the local • Finalise the SCC
Slide 31: Attractive Investment Proposition
Atlas Arteria | Results Presentation for the year ended 31 December 2020 31 Attractive Investment Proposition Material exposure to Recognised strong Resilient balance Access to inflation European and French ESG and Sustainability sheet with good linked earnings GDP fundamentals liquidity Experienced
Slide 32: Thank You
Atlas Arteria | Results Presentation for the year ended 31 December 2020 32 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 Photo of APRR, source: APRR
Slide 33: Appendix – Additional Financial Information
Atlas Arteria | Results Presentation for the year ended 31 December 2020 33 5A Appendix – Additional Financial Information Photo of APRR, source: APRR
Slide 34: Atlas Arteria Consolidated Balance Sheet
Atlas Arteria | Results Presentation for the year ended 31 December 2020 34 Atlas Arteria Consolidated Balance Sheet As at As at Statutory accounts 31 Dec 2020 31 Dec 2019 A$m Current assets 267.6 1,593.6 Investments in associates 2,635.5 1,363.8 Tolling concessions 2,064.3 2,438.6 Goodwill 14.1 14.
Slide 35: Atlas Arteria Corporate Cash Flow Summary
Atlas Arteria | Results Presentation for the year ended 31 December 2020 35 Atlas Arteria Corporate Cash Flow Summary (A$m) 2020 2019 Opening balance 1,387.6 92.8 Distributions from APRR 310.9 238.2 Fees from Warnow Tunnel 0.2 0.3 Interest income on corporate cash balances 1.8 1.2 Manager, adviser b
Slide 36: Proportionate EBITDA by Business
Atlas Arteria | Results Presentation for the year ended 31 December 2020 36 Proportionate EBITDA by Business APRR 100% (€m) 2020 2019 % change Dulles Greenway 100% (US$m) 2020 2019 % change Traffic (VKTm) 19,413 24,581 (21.0%) Traffic (m) 10.2 17.8 (42.7%) Operating revenue 2,169.2 2,611.0 (16.9%) O
Slide 37: Cash flow: APRR to Atlas Arteria Securityholders
Atlas Arteria | Results Presentation for the year ended 31 December 2020 37 Cash flow: APRR to Atlas Arteria Securityholders Eiffarie / Financière Eiffarie (FE) (€m) H1 2020 (A) H2 2019 (A) H1 2019 (A) H2 2018 (A) H1 2018 (A) APRR dividend 234 416 371 381 400 add/less Cash withheld / released for 1H
Slide 38: Appendix – About the Business
Atlas Arteria | Results Presentation for the year ended 31 December 2020 38 5B Appendix – About the Business Photo of APRR, source: APRR
Slide 39: The Atlas Arteria Business
Atlas Arteria | Results Presentation for the year ended 31 December 2020 39 The Atlas Arteria Business Atlas Arteria Portfolio Warnow Dulles APRR ADELAC Tunnel Greenway 31.14% 31.17% 100% 100%2 2,318km 20km commuter 2.1km road 22km commuter motorway road connecting and tunnel in route into the netwo
Slide 40: APRR and ADELAC connecting Paris with Lyon and central/eastern France
Atlas Arteria | Results Presentation for the year ended 31 December 2020 40 APRR and ADELAC 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 France 1 70 60 Euro cents per VKT 50 4
Slide 41: APRR Traffic Growth
Atlas Arteria | Results Presentation for the year ended 31 December 2020 41 APRR Traffic Growth Heavy vehicle traffic continues to be closely correlated to French Manufacturing, while the imposition of COVID-19 lockdown measures has resulted in a temporary departure to long-term correlations between
Slide 42: APRR Earnings Stability
Atlas Arteria | Results Presentation for the year ended 31 December 2020 42 APRR Earnings Stability EBITDA has historically been resilient through economic cycles APRR EBITDA1 vs France GDP2 growth € 2,000m 6.0% 1,942 € 1,800m 1,874 1,775 3.0% € 1,600m 1,685 1,589 1,520 1,550 - € 1,400m 1,475 1,399
Slide 43: APRR Tariff Formula
Atlas Arteria | Results Presentation for the year ended 31 December 2020 43 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
Slide 44: French Tax Rates
Atlas Arteria | Results Presentation for the year ended 31 December 2020 44 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 specifi
Slide 45: Warnow connecting the Baltic sea with Rostock and highways to Berlin
Atlas Arteria | Results Presentation for the year ended 31 December 2020 45 Warnow connecting the Baltic sea with Rostock and highways to Berlin Stable growth in an asset located in a favourable part of Europe AADT Linear (AADT) 14,000 13,000 12,000 AADT 11,000 10,000 9,000 8,000 2012 2013 2014 2015
Slide 46: Warnow Tunnel Tariff Formula
Atlas Arteria | Results Presentation for the year ended 31 December 2020 46 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
Slide 47: Dulles Greenway Overview
Atlas Arteria | Results Presentation for the year ended 31 December 2020 47 Dulles Greenway Overview Connecting growing, prosperous communities to connector roads and Washington DC On a stand alone basis, tolls on the Dulles Greenway are in the mid to high end of prices for the roads in Virginia1 20
Slide 48: Dulles Greenway Earnings History
Atlas Arteria | Results Presentation for the year ended 31 December 2020 48 Dulles Greenway Earnings History Stable historical financial performance Financial performance vs Traffic ADT US$120m 60,000 US$100m 92.2 50,000 91.0 90.8 89.7 84.4 78.2 16.8 17.2 17.0 US$80m 74.1 16.5 40,000 71.6 16.2 64.7
Slide 49: Dulles Greenway Toll Regime
Atlas Arteria | Results Presentation for the year ended 31 December 2020 49 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) • Section §56-542I of VHCA stipulate
Slide 50: Atlas Arteria Summary Corporate Structure
Atlas Arteria | Results Presentation for the year ended 31 December 2020 50 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 1
Slide 51: Appendix – References
Atlas Arteria | Results Presentation for the year ended 31 December 2020 51 5C Appendix – References Photo of APRR, source: APRR
Slide 52: Glossary of terms
Atlas Arteria | Results Presentation for the year ended 31 December 2020 52 Glossary of terms AADT Average annual daily trips ESG Environmental, Social and Corporate Governance MIBL MIBL Finance Luxembourg S.à r.l. ADELAC Autoroute des deux Lacs FE Financière Eiffarie SAS NUMA Numerique Autoroute (d