Atlas Arteria · ASX:ALX
Atlas Arteria — H1 2020 Earnings Presentation
48 slides from Atlas Arteria's earnings presentation, Aug 27, 2020
Slide 1: H1 2020 Results Presentation
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 H1 2020 Results Presentation for the six months ending 30 June 2020 27 August 2020
Slide 2: Important Information
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 2 Important Information Stapling Forward Looking Statements Non-IFRS information Atlas Arteria comprises Atlas Arteria Limited (ACN 141 075 201) This presentation may contain forward-looking statements This presentation inclu
Slide 3: US Ownership Restrictions
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 3 US Ownership Restrictions Atlas Arteria's stapled securities (Stapled Securities) are subject to ownership restrictions applying to residents of the United States. The Stapled Securities have not been registered under the U
Slide 4: Contents
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 4 Contents 1. Key Highlights Graeme Bevans, CEO 2. Financial Performance Nadine Lennie, CFO 3. Operations Graeme Bevans, CEO 4. Outlook & Key Priorities Graeme Bevans, CEO 5. Appendices Photo of APRR, source: APRR
Slide 5: Key Highlights
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 5 1 Key Highlights Graeme Bevans Chief Executive Officer Photo of APRR, source: APRR
Slide 6: H1 2020 Highlights
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 6 H1 2020 Highlights Atlas Arteria provides distribution guidance and is well positioned for future growth Strong focus on the safety of our people and customers guided response to COVID-19 pandemic • Operations maintained th
Slide 7: Financial Overview
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 7 Financial Overview The COVID-19 pandemic significantly impacted traffic across our portfolio in H1 2020 Revenue Performance for H1 2020 (vs H1 2019) Business Overview Contribution to Atlas Arteria Traffic Revenue EBITDA • T
Slide 8: Traffic Recovering Strongly
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 8 Traffic Recovering Strongly Traffic in Europe returning to pre-COVID levels APRR Dulles Greenway Warnow Tunnel • Traffic started recovering in May with official easing of • Phase 1 of easing movement restrictions only • The
Slide 9: Sustainability
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 9 Sustainability Continuing focus on our sustainability priorities SAFETY OUR PEOPLE • Embedded a safety first culture amongst our people and across our businesses • Supported the health and wellbeing of our people through th
Slide 10: Financial Performance
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 10 2 Financial Performance Nadine Lennie Chief Financial Officer Photo of APRR, source: APRR
Slide 11: Atlas Arteria Income Statement
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 11 Atlas Arteria Income Statement Atlas Arteria A$m H1 2020 H1 2019 % Chg Atlas Arteria profitability for H1 2020 impacted by COVID-19 Revenue, other income Toll revenue driven by traffic performance reflecting COVID-19 movem
Slide 12: APRR Financial Performance
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 12 APRR Financial Performance COVID-19 movement restrictions impacted H1 2020 results, but traffic recovering well in early H2 2020 €m1 H1 2020 H1 2019 % change Traffic (VKTm) 8,021 11,562 (30.6%) • Revenues exclude IFRIC 12
Slide 13: APRR Financial Position
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 13 APRR Financial Position APRR strong balance sheet rated A- / A-2 with a stable outlook APRR Group pro-forma debt maturity profile as at 30 June 2020 APRR has significant balance sheet flexibility to support growth €m • Rat
Slide 14: Dulles Greenway Financial Overview
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 14 Dulles Greenway Financial Overview COVID-19 movement restrictions impacted results but liquidity at the Dulles Greenway remains strong US$m1 H1 2020 H1 2019 % change • Operating revenues impacted by reduced traffic due to
Slide 15: Atlas Arteria Cashflow for H1 2020
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 15 Atlas Arteria Cashflow for H1 2020 APRR dividends to Atlas Arteria Corporate operational cash flows Capital management cash flows Cash balance (A$m) (€m) (A$m) (A$m) H2 19 Remove APRR Eiffarie ALX ALX APRR net company Dist
Slide 16: Strong Balance Sheet
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 16 Strong Balance Sheet Substantial liquidity headroom at corporate and business levels Atlas Arteria holds c. A$216 million of liquidity APRR continues to be well capitalised with Dulles Greenway has c. US$200 million of cas
Slide 17: Atlas Arteria Capital Management Strategy
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 17 Atlas Arteria Capital Management Strategy Managing capital for a sustainable business The Approach Capital management in H1 2020 Maintaining balance • Dual focus on cash flow and balance sheet to enable • Refinanced Eiffar
Slide 18: Operations
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 18 3 Operations Graeme Bevans Chief Executive Officer Photo of Dulles Greenway, source: David Madison photography
Slide 19: APRR and ADELAC Operational Update
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 19 APRR and ADELAC Operational Update APRR and ADELAC responded quickly to the challenges of COVID-19 and impact of Government lockdown and safety measures COVID-19 update Operational update • From 11 May, COVID-19 movement r
Slide 20: APRR Capital Expenditure
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 20 APRR Capital Expenditure Investing in capital projects to grow the footprint and improve customer experience Projects currently underway • H1 2020 saw some delays in capex projects as a result of COVID-19. All capex projec
Slide 21: Dulles Greenway Operational Update
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 21 Dulles Greenway Operational Update Northern Virginia in Phase 3 of lockdown restrictions, with uncertainty around the timing for further easing COVID-19 update Operational update New CEO appointed • Lockdown measures in No
Slide 22: Warnow Tunnel Operational Update
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 22 Warnow Tunnel Operational Update Limited COVID-19 outbreak in Rostock, Warnow Tunnel continued strong performance COVID-19 update Operational update • Restrictions began in Germany • In response to COVID-19, key operationa
Slide 23: Outlook & Key Priorities
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 23 4 Outlook & Key Priorities Graeme Bevans Chief Executive Officer Photo of APRR, source: APRR
Slide 24: The Growth Agenda
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 24 The Growth Agenda Atlas Arteria is well positioned to support Governments as they look to reinvigorate their economies • Governments globally are contemplating stimulus measures to RCEA Project (~€600m) €10bn Project Pipel
Slide 25: Key Priorities and Outlook for H2 2020
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 25 Key Priorities and Outlook for H2 2020 Atlas Arteria APRR and ADELAC Dulles Greenway Warnow Tunnel • Focus on growth opportunities to • Traffic returned to 2019 levels - • Network impacts expected to • Traffic has returned
Slide 26: Investment Discipline
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 26 Investment Discipline 1. Governance 2. Focus on Strategy • Good board composition, with • Streamline the existing portfolio 1. Governance diversity in experience and skill sets • New opportunities need to meet • Independen
Slide 27: Attractive Investment Proposition
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 27 Attractive Investment Proposition Atlas Arteria is well positioned to weather the COVID-19 pandemic with strong liquidity and improved flexibility to pursue growth opportunities Ongoing operational focus on safety, our peo
Slide 28: Thank You
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 28 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 29: Appendix – Additional Financial Information
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 29 5A Appendix – Additional Financial Information Photo of APRR, source: APRR
Slide 30: Atlas Arteria Consolidated Balance Sheet
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 30 Atlas Arteria Consolidated Balance Sheet As at As at Statutory accounts 30 Jun 2020 31 Dec 2019 A$m Current assets 194.6 1,593.6 Investments in associates 2,738.9 1,423.3 Tolling concessions 2,314.7 2,438.6 Goodwill 14.4 1
Slide 31: Atlas Arteria Corporate Cash Flow Summary
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 31 Atlas Arteria Corporate Cash Flow Summary Cash (A$m) H1 2020 H1 2019 Opening balance 1,387.6 92.8 Distributions from APRR 206.8 123.4 Interest income on corporate cash balances 1.9 0.7 Manager, adviser base fees & performa
Slide 32: Proportionate EBITDA by Business
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 32 Proportionate EBITDA by Business APRR 100% (€m) H1 2020 H1 2019 % change Dulles Greenway 100% (US$m) H1 2020 H1 2019 % change Traffic (VKTm) 8,021 11,562 (30.6%) Traffic (m) 5.2 8.9 (41.8%) Operating revenue 934.3 1,250.8
Slide 33: Cash flow: APRR to Atlas Arteria Securityholders
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 33 Cash flow: APRR to Atlas Arteria Securityholders Eiffarie / Financière Eiffarie (FE) (€m) H2 2019 (A) H1 2019 (A) H2 2018 (A) H1 2018 (A) APRR dividend 416 371 381 400 add/less Cash withheld / released for 1H19 tax change
Slide 34: Appendix – About the Business
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 34 5B Appendix – About the Business Photo of APRR, source: APRR
Slide 35: The Atlas Arteria Business
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 35 The Atlas Arteria Business Atlas Arteria Portfolio Dulles Warnow APRR ADELAC Greenway Tunnel 31.14% 31.17% 100%2 100% 2,318km 20km commuter 22km commuter 2.1km road motorway road connecting route into the and tunnel in net
Slide 36: Value for Customers
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 36 Value for Customers Each day the APRR network provides customers with substantial savings on their travel time APRR Case study: Don’t be late for your mother’s birthday! Pierre is a student studying at INSEAD in Fontainebl
Slide 37: APRR and ADELAC connecting Paris with Lyon and eastern France
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 37 APRR and ADELAC connecting Paris with Lyon and eastern France An efficient, safe and cost effective network for customers Comparison between average tolls on APRR versus rest of France1 35 30 25 Euro cents per VKT 20 15 10
Slide 38: APRR Traffic Growth
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 38 APRR Traffic Growth Heavy vehicle closely correlated to French Manufacturing, while light vehicle growth is correlated to French Household Income APRR Light Vehicle Traffic APRR LV Traffic Growth vs French Household Income
Slide 39: APRR Earnings Stability
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 39 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 4.0% €1,600m 1,685 1,589 1,520 €1,400m 1,475 1,399 1,428 2.0%
Slide 40: APRR Tariff Formula
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 40 APRR Tariff Formula APRR’s predictable cashflows are underpinned by inflation-linked tolling and established regulatory regime • Stable concession regime: In place for another 15-16 years • Predictable, inflation linked to
Slide 41: Dulles Greenway Overview
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 41 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
Slide 42: Dulles Greenway Earnings History
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 42 Dulles Greenway Earnings History Stable historical financial performance Financial performance vs Traffic ADT US$120m 55,000 US$100m 50,000 91.0 92.2 90.8 89.7 84.4 78.2 16.8 17.2 17.0 US$80m 16.5 45,000 74.1 71.6 16.2 64.
Slide 43: Dulles Greenway Toll Regime
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 43 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 stipula
Slide 44: Warnow connecting the Baltic sea with Rostock and highways to Berlin
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 44 Warnow connecting the Baltic sea with Rostock and highways to Berlin Stable growth in an asset located in a favourable part of Europe 14,000 AADT Linear (AADT) 13,000 12,000 AADT 11,000 10,000 9,000 8,000 2012 2013 2014 20
Slide 45: Warnow Tunnel Tariff Formula
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 45 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-Vorpomme
Slide 46: Atlas Arteria Summary Corporate Structure
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 46 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
Slide 47: Appendix – References
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 47 5C Appendix – References Photo of APRR, source: APRR
Slide 48: Glossary of terms
Atlas Arteria | Results Presentation for the six months ended 30 June 2020 48 Glossary of terms AADT Average annual daily trips FE Financière Eiffarie SAS RCEA Route Centre-Europe Atlantique ADELAC Autoroute des deux Lacs FX Foreign Exchange RCF Revolving Credit Facility ADT Average daily trips H1 F