Atlas Arteria · ASX:ALX
Atlas Arteria — Macquarie Atlas Roads — H1 2011 Earnings Presentation
40 slides from Atlas Arteria's earnings presentation, Aug 29, 2011
Slide 1: Macquarie Atlas Roads Half Yearly Results Presentation 30 June 2011
MACQUARIE ATLAS ROADS HALF YEARLY RESULTS PRESENTATION 30 JUNE 2011
Slide 2: Disclaimer
Disclaimer 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 318 123) (MFA) is the manager/adviser of MA
Slide 3: Disclaimer
Disclaimer Hong Kong Thi d This documentt h has b been preparedd and d iintended t d d tto b be di disposedd solely l l tto ""professional f i l iinvestors" t " within ithi th the meaning i off th the SSecurities iti and dFFutures t O Ordinance di (C (Cap. 571) of Hong Kong for the purpose of provid
Slide 4: Presentation agenda
Presentation agenda 1. Overview 5 2. Financial Performance 10 3. Asset Review 16 4. Next Steps 30 5. Questions 32 6. Appendix 33 4
Slide 5: Overview
1 Overview 1. Peter Trent, Trent Chief Executive Officer
Slide 6: 1H 2011 highlights
1H 2011 highlights Positive revenue and earnings growth despite weak economic conditions APRR delivers solid revenue and EBITDA growth of 4.5% 1H 2011 Portfolio Results and 6 5% respectively 6.5% Benefits of portfolio toll increases offset by weaker US and UK traffic 72 72.0% 0% portfolio EBIT
Slide 7: 1H 2011 segmented results
1H 2011 segmented results Revenue and EBITDA increased at all assets except the M6 Toll 1H 2011 Traffic and EBITDA growth on pcp % EBITDA contribution to MQA by asset 25% 20% 15% Traffic EBITDA 10% 5% APRR 70% -% (5%) (10%) APRR Greenway M6 Toll Skyway ITR Warnow Greenway M6 Toll Skyway ITR Warnow 7
Slide 8: Portfolio toll revisions
Portfolio toll revisions Portfolio revenue will continue to benefit from toll increases Further toll increases scheduled on most roads in 2012 Asset Date Toll increase APRR 1 Feb 2011 ~2% 2% average Dulles Greenway 1 Jul 2010 ~10% M6 Toll 1 Mar 2011 ~6% 6% (headline rate) Chicago Skyway 1 Jan 2011
Slide 9: Eiffarie refinancing – another step closer
Eiffarie refinancing – another step closer Sufficient liquidity now in place to fund a reduction of Eiffarie debt to ~€2.7bn Jun 2011 Dec 2011 Jun 2012 Dec 2012 €1.55bn raised APRR debt at APRR issuance forduring 1H 2011 liquidity Jan 2011 €1.0bn bonds issued under EMTN program Jan 2011 €50m index-l
Slide 10: 2. Financial Performance
2. Financial Performance Mary Nicholson, Nicholson Chief Financial Officer
Slide 11: Proportionally consolidated performance
Proportionally consolidated performance Actual A t l Pro forma P f Actual A t l (A$m) 6m to 30 Jun 11 6m to 30 Jun 10 Change (%) 5m to 30 Jun 10 Operating revenue 344.3 330.4 4.2% 326.6 Operating expenses (96.3) (95.2) 1.2% (92.8) EBITDA from road assets 248.0 235.2 5.4% 233.8 Asset maintenance cape
Slide 12: MQA statutory accounts
MQA statutory accounts Statutory accounting MQA consolidates the results and balances of its controlled asset (M6 Toll) MQA equity accounts its non-controlled assets (APRR, Dulles Greenway, Chicago Skyway, Indiana Toll Road, Warnow Tunnel) Equity accounting Initially recognise assets at acquis
Slide 13: Consolidated profit & loss account
Consolidated p profit & loss account Statutory accounts – 6 months ended 30 June 2011 Non- N MQA Total T t l MQA T Total t l MQA controlled 6m to Period to (A$m) Corporate M6 Toll assets 30 Jun 2011 30 Jun 2010 Total revenue 0.6 44.5 - 45.1 48.1 Financing costs - (51.2) - (51.2) (49.9) Other operati
Slide 14: Consolidated balance sheet
Consolidated balance sheet Statutory accounts – as at 30 June 2011 Non- N MQA controlled MQA Total MQA Total (A$m) Corporate M6 Toll assets 30 Jun 2011 31 Dec 2010 Current assets 36.3 37.5 - 73.9 75.4 Investments in associates - - 923.6 923.6 931.1 Property, plant and equipment - 747.9 - 747.9 773.2
Slide 15: MQA cash flow summary
MQA cash flow summary Available cash A$m Opening balance – 1 January 2011 19.1 MQA was net operating cash flow positive Distribution from M6 Toll 13.7 for 1H 2011 Cash inflow from assets 13.7 Unlikely to receive further distributions Interest on corporate cash balances 0.6 from assets before Eif
Slide 16: 3. Asset Review
3 Asset Review 3. Peter Trent, Trent Chief Executive Officer
Slide 17: APRR performance 1H 2011
APRR performance 1H 2011 APRR well positioned for another improved year EBITDA Revenue 6.5% Traffic 4.5% 1.5% VKT 10,164m 10 164m €973.5m €973 5m €671.4m €671 4m1 Q1 Toll increase – Continued recovery y in HGV – Effective cost control 1. Represents APRR EBITDA on a standalone basis. Consolidated APR
Slide 18: APRR traffic analysis
APRR traffic analysis Traffic growth mainly reflecting continued strength of recovery in HGV HGV grew 5.5% over the half year albeit remains ~7% behind 2008 levels LV grew marginally by 0.7% however comparison is disadvantaged by positive one-off effects in 2010 APRR vs French Manufacturing1 5%
Slide 19: APRR operational efficiencies
APRR operational efficiencies Cost under control with improving EBITDA margin TAT rates have increased in 2011 (from €6.86 to €7.32 per 1000km) which will lead to a ~€9m increase in annual opex before any growth in traffic above 2010 levels is taken into account Tax increase fully recovered thro
Slide 20: APRR operational efficiencies
APRR operational efficiencies Toll station automation increasing with 105,600 electronic toll badges sold Toll collection by type (+19%) in 1H 2011 vs 1H 2010 Number of active electronic toll badges 16% 23% increased by almost 21% with nearly 965,000 badges in circulation Automated 130 toll p pl
Slide 21: Eiffarie refinancing plan progressing
Eiffarie refinancing plan progressing Refinancing plan unchanged and on track Sufficient liquidity now exists to facilitate net debt reduction at Eiffarie from €3.6bn to ~€2.7bn APRR will remain active in the bond markets Status Actions Minority acquisition materially reduces refinancing risk. E
Slide 22: APRR – a simple credit story
APRR – a simple credit story High quality asset with a resilient track record of growth Mature extensive network providing key road connections within France and the EU – Low traffic volatility, regulated tolls, improving margin Expected Group Net Debt/EBITDA of ~6.0x at December 2012 APRR EBITD
Slide 23: APRR – traded bond yields
APRR – traded bond yields APRR well supported in the bond markets, with recent new issues oversubscribed APRR Bonds: Mid-Yield to Maturity 5.5% Term to maturity: 5.0% 8 years 6 years 4.5% 4 years 4 0% 4.0% 3.5% 3.0% Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 € 00 b €700m bond d - 7.5% %
Slide 24: Dulles Greenway performance 1H 2011
Dulles Greenway performance 1H 2011 Toll increases support revenue growth but corridor traffic remains weak 2.9% Revenue EBITDA Traffic % 7.5% 7 3% 7.3% ADT 46,434 US$33.2m US$23.0m1 1. Includes impact of settlement with Autostrade International Virginia (AIV) 24
Slide 25: Dulles Greenway outlook
Dulles Greenway outlook Internalised operations and maintenance will deliver long term benefits Internalised operations & maintenance commenced in May 2010 Management team has continued to deliver improvements in cost efficiencies One-off AIV settlement expense of ~US$2.9m (including associate
Slide 26: M6 Toll performance 1H 2011
M6 Toll performance 1H 2011 Near term outlook remains subdued Revenue EBITDA EBITDA 4 1% 4.1% Traffic 5.8% 7.6% ADT 35,383 £28.4m £24.4m Negative g impact p from UK economy y and improvements p on M6 26
Slide 27: M6 Toll traffic analysis
M6 Toll traffic analysis M6 Toll serves as a congestion relief road for the M6 M6 is benefiting from improved operations between J8 and J10a, and between J4 and J5 Traffic Variation 2011 on 2005 (April – July)1 20,000 15,000 10,000 5,000 - 2005 2006 2007 2008 2009 2010 2011 (5,000) (10,000) (15,00
Slide 28: M6 Toll traffic corridor
M6 Toll traffic corridor Approximately 2/3’s of M6 Toll’s mainline M6 Toll Corridor traffic is long distance travel Evidence of local traffic resilience – Screenline traffic outperformed corridor traffic growth Long distance travel as measured in the corridor (M1/M6 combined counts) has Legend M
Slide 29: M6 Toll looking forward
M6 Toll looking forward Medium term outlook likely to be mixed Hard Shoulder Running Macro trends of declining fuel sales and declining real wages suggest near term outlook is likely to remain subdued Construction works on the M6 in 2012/2013 should benefit the M6 Toll traffic in those years Leg
Slide 30: 4. Next Steps
4 Next Steps 4.
Slide 31: Eiffarie refinancing
Eiffarie refinancing The refinancing process is expected to be completed over the coming months Simple and sound credit story – Easy to understand, profitable business – Strong track record demonstrating steady growth over the last 6 years in spite of economic shocks – Outlook for the year remains
Slide 32: 5. Questions
5 Questions 5.
Slide 33: 6. Appendices
6 Appendices 6.
Slide 34: Management information report vs Statutory accounts – overview
Management information report vs Statutory accounts – overview Proportionally consolidated financial performance Statutory performance Aggregation of operating results of proportionate interests in consolidated other toll road asset results M6 Toll results consolidated, all toll road assets included
Slide 35: Management information report v Statutory accounts – reconciliation
Management information report v Statutory accounts – reconciliation 6 months ended 30 June 2011 A$m MQA proportionate ti t earnings i from f road d assets t per Management M t Information I f ti 86.2 Report (MIR) Corporate net interest income 0.6 Corporate net expenses (29.9) Proportionate earnings
Slide 36: Traffic and revenue performance
Traffic and revenue performance 12 months 12 months Change Quarter vs. pcp Asset 31 Dec 09 31 Dec 10 vs. pcp Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 APRR Light Vehicle VKT (millions) 17,609 17,953 2.0% Heavy Vehicle VKT (millions) 3,019 3,203 6.1% Total VKT (millions) 20,628 21,157 2.6% 1.6% 4.5%
Slide 37: Traffic and revenue performance (cont'd)
Traffic and revenue performance (cont d) (cont’d) 12 months 12 months Change Quarter vs. pcp Asset 31 Dec 09 31 Dec 10 vs. pcp Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Chicago Skyway Av Workday Traffic 46,311 43,476 (6.1%) Av Non-workday Traffic 49,493 48,312 (2.4%) Av All day Traffic 47,296 44,987
Slide 38: Proportionate earnings – by asset
Proportionate earnings – by asset A t lP Actual ti t E Proportionate i Earnings lit by split b assett for f the th 6 months th ended d d 30 June J 2011 Dulles Chicago Warnow 1 APRR Greenway M6 Toll Skyway ITR Tunnel Total A$m A$m A$m A$m A$m A$m A$m Operating revenue 252.3 16.0 44.4 6.9 20.7 3.9 344
Slide 39: Debt maturity profile of assets
Debt maturity profile of assets Debt maturity profile of assets Year (as at 30 Jun 2011)1 Currency 2H 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020+ APRR/Eiffarie €m 24.7 529.8 4,104.4 1,115.3 1,329.0 422.1 1,391.0 714.0 504.2 211.0 Dulles Greenway US$m - 45 8 45.8 46 1 46.1 46 5 46.5 46 8 46.8
Slide 40: Asset debt metrics
Asset debt metrics D bt metrics Debt ti C Currency N tD Net bt Debt N tD Net bt / Debt EBITDA/I t t EBITDA/Interest DSCR L kU Lock-Up 2011 H d i Hedging (as at 30 Jun 2011)1 (Local m) EBITDA (x) (x) (x) (x) (%) APRR/Eiffarie2 € 10,093.9 7.43x 4.26x 1.87x 1.25x 94.1% Dulles Greenway3 US$ 844.8 16.48x
Macquarie Atlas Roads — H1 2011 Earnings Presentation on 6ix