Transurban Group Ltd. · ASX:TCL
Transurban — Debt Investor Presentation (October 2011)
54 slides from Transurban's debt investor presentation, Oct 10, 2011
Slide 1: Transurban European Debt Investor Roadshow ASX release
asx release 10 October 2011 Transurban European Debt Investor Roadshow Attached is a presentation that Transurban is using this week on a European debt investor roadshow. The roadshow is being undertaken in conjunction with the establishment of a Euro Medium Term Note Programme to diversify Transurb
Slide 2: Transurban Debt Investor Presentation October 2011
TRANSURBAN DEBT INVESTOR PRESENTATION OCTOBER 2011 Not for distribution to any U.S. person or to any person or address in the U.S.
Slide 3: Notices
NOTICES 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 (ARBN 121 746 825). The responsible entity of Transurban Holding Trust is Transurban Infr
Slide 4: Agenda
AGENDA Transurban overview Key asset characteristics Financial performance Capital management and funding Supporting material 2
Slide 5: Transurban Overview
transurban TRANSURBAN OVERVIEW
Slide 6: Snapshot
SNAPSHOT AUSTRALIA’S LEADING TOLL ROAD OPERATOR • Ownership interests in eight toll road concessions in Australia (6) and the United States (2) • Predominantly urban toll road concessions in areas of congested traffic, with demonstrated resilience during periods of economic downturn • Long-term conc
Slide 7: Assets
ASSETS PORTFOLIO OF HIGH QUALITY TOLL ROAD CONCESSIONS Australia United States Melbourne, Sydney, Richmond, Washington City, State Victoria New South Wales Virginia DC Lane Cove M1 Eastern M5 Capital CityLink Hills M2 Westlink M7 Pocahontas Tunnel Distributor Motorway Beltway Asset Asset type Urban
Slide 8: Management Approach
MANAGEMENT APPROACH • Focus on core strengths – Specialist toll road concession owner/operator – Long life concessions with embedded inflation protection – Leveraging increasing toll revenue and cost control – Capitalise on traffic forecasting and tolling expertise • Prudent financial and capital ma
Slide 9: Key Asset Characteristics
transurban ei ME KEY ASSET CHARACTERISTICS
Slide 10: Long Life Concessions
LONG LIFE CONCESSIONS Toll revenue % of toll revenue Asset Type Ownership CAGR2 Remaining concession term3 (proportional)1 (FY09-FY11) Melbourne, Victoria CityLink Urban 100.0% 48.8% 8.6% 22.5 years Sydney, New South Wales Hills M2 Urban 100.0% 16.3% 8.0% 31 years Lane Cove Tunnel Urban 100.0% 5.8%
Slide 11: Urban Assets – Melbourne
URBAN ASSETS – MELBOURNE CITYLINK IS AN ESSENTIAL TRANSPORT ROUTE IN MELBOURNE CityLink connects Melbourne's manufacturing hubs and residential areas to the central business district, Victoria’s largest port and Melbourne Airport 48.8% of Group proportional toll revenue CAGR1 Historical FY09 FY10 FY
Slide 12: Urban Assets – Sydney
URBAN ASSETS – SYDNEY AN INTEGRAL PART OF SYDNEY’S ORBITAL NETWORK Five toll road concessions forming an integral part of Sydney’s orbital network, the major ring road connecting the central business district to major growth areas in the north, west and south of Sydney 50% of Group proportional toll
Slide 13: United States Assets
UNITED STATES ASSETS FOCUS ON LONG LIFE ASSETS IN VIRGINIA North American investment strategy focussed on long life concessions in Northern Virginia Capital Beltway Pocahontas The Capital Beltway project is being undertaken on one Pocahontas links Interstates 95 and 295 to create a of the most conge
Slide 14: Tolling Escalation
TOLLING ESCALATION EMBEDDED INFLATION PROTECTION Toll price Tolling Minimum Escalation Asset1 CAGR2,3 Comments escalation? escalation Index4 (FY09-FY11) Until 30 September 2015, tolls can increase by the greater of CPI quarterly CPI or 1.1065% (being 4.5% pa as a quarterly compound rate), subject
Slide 15: Strong, Stable Earnings Growth
STRONG, STABLE EARNINGS GROWTH AUSTRALIAN ASSETS TOLL REVENUE CAGR1,2 (%) EBITDA CAGR1,2 (%) FY09 TO FY11 FY09 TO FY11 15.0% 15.0% 13.6% 12.9% 12.7% 12.0% 12.0% 8.6% 9.1% 9.0% 8.0% 8.2% 9.0% 8.3% 6.0% 6.0% 3.3% 2.6% 3.0% 3.0% 0.0% 0.0% nk 2 r ay 7 to 2 ay nk Li 7 r M M to M u w M lls or nk w Li ti y
Slide 16: Proven Resilience
PROVEN RESILIENCE URBAN ASSETS – RESILIENCE IN ECONOMIC DOWNTURNS % of Group proportional toll revenue1 Traffic volume growth on Transurban assets Sydney M7 Warnow Tunnel 10.3% versus global peers during 2008-091 Sydney M5 Euroscut Norte Litoral 10.1% Sydney M2 Sydney M4 16.0% 6.9% 98.2% CityLink (n
Slide 17: Financial Performance
hy \ \. transurban FINANCIAL PERFORMANCE ~
Slide 18: Financial Highlights
FINANCIAL HIGHLIGHTS 718.7 Consistent underlying 606.9 536.9 • EBITDA CAGR of 15.7% over past proportional EBITDA two years growth 2009 2010 2011 347.5 390.4 • 21.7% CAGR over the past Continued underlying 263.6 two years free cash flow1 growth • Traffic and toll increases converted 2009 2010 2011 t
Slide 19: EBITDA Growth
EBITDA GROWTH CONSISTENT EBITDA GROWTH AND DISCIPLINED COST CONTROL REVENUE VERSUS DIRECT COSTS1 • Underlying proportional EBITDA 500 1,000 increased by A$112 million in FY11 Direct costs (LHS) 965.6 with nominally flat direct costs. 400 Revenue (RHS) 900 A$ millions A$ millions 842.4 EBITDA margin
Slide 20: Free Cash Flow / Interest Coverage
FREE CASH FLOW / INTEREST COVERAGE UNDERLYING FREE CASH FLOW1 SICR2 400 390.4 3.0 380 2.9 360 347.5 2.78 2.8 340 2.70 2.7 A$ millions 320 300 2.6 2.46 280 263.6 2.5 260 2.4 240 220 2.3 200 2.2 2009 2010 2011 2009 2010 2011 • Free cash flow CAGR3 of 21.7% over the last • Growing SICR driven by ongoin
Slide 21: Measured, Controlled Growth
MEASURED, CONTROLLED GROWTH FOCUS ON ASSET ENHANCEMENT AND KEY MARKETS Project Completion date Result / status CityLink Phased over 2010-11 • Delivered on time and budget Southern Link Upgrade • FY11 traffic volumes up 8.8%; EBITDA up 16.4% Major recently completed investments / Lane Cove Tunnel acq
Slide 22: Historical Performance
HISTORICAL PERFORMANCE Historical proportional results1 FY09 (A$m) FY10 (A$m) FY11 (A$m) CAGR4 Toll revenue 724.9 773.9 891.0 Fee revenue 46.7 59.5² 62.8 Other revenue 16.1 9.0² 11.8 Total revenue 787.7 842.4 965.6 10.7% Operating costs (200.3) (198.9) (214.6) Business development costs (26.0) (17.0
Slide 23: Capital Management and Funding
CAPITAL MANAGEMENT AND FUNDING
Slide 24: Capital Management Strategy
CAPITAL MANAGEMENT STRATEGY COMMITTED TO PRUDENT CAPITAL MANAGEMENT • Appropriate leverage • Mix of bank debt and capital markets debt • Debt maturities spread over time to reduce refinancing risk • Refinancing actively managed and funds are secured early • Board policy – distributions aligned with
Slide 25: Transurban Corporate Debt
TRANSURBAN CORPORATE DEBT CORPORATE FUNDING SOURCES 13% • Diverse funding sources with a mix of bank 16% debt and capital markets debt US$ notes A$ notes Syndicated facilities • EMTN programme being established for 38% Working capital facilities further funding diversity and flexibility (includes un
Slide 26: Corporate Debt Maturity Profile
CORPORATE DEBT MATURITY PROFILE COMMITTED FACILITIES AS AT 30 JUNE 20111,2,3 700 600 125 500 A$ millions (equivalent if US$) . 230 400 270 500 300 300 200 375 100 250 247 100 2034 219 206 136 165 147 129 130 92 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 US
Slide 27: Non-Recourse Asset Debt
NON-RECOURSE ASSET DEBT • Debt in the NSW and United States assets is non-recourse to Transurban • Ability to increase asset debt regulated by concession agreement provisions As at 30 June 2011 • Track record of successful financing Non-recourse (A$m) Asset debt Ownership Proportional – Jul-11: refi
Slide 28: Debt Metrics
DEBT METRICS SOLID METRICS Transurban Group Corporate debt Non-recourse 30 June 2011 asset debt Weighted average maturity (years)1 8.9 yrs 5.3 years 11.8 years Weighted average cost of A$ debt 7.0% 6.7% 7.3% Weighted average cost of US$ debt 5.5% 4.8% 5.7% Hedged / fixed2 95.0% 99.0% 90.0% Gearing3
Slide 29: Security Structure
SECURITY STRUCTURE1 COMPREHENSIVE SECURITY STRUCTURE FOR SENIOR LENDERS • Common borrowing and security structure for all corporate senior lenders, including any EMTN holders • All corporate debt borrowed by Transurban Finance Company, a wholly owned subsidiary of Transurban Holdings Limited • All s
Slide 30: Security Structure
SECURITY STRUCTURE1 Senior ratings Total FY11 (Moody’s / Senior secured asset debt EBITDA Transurban Finance Fitch) lenders Company (rank pari passu) Hills M2 Not rated A$529m2 A$119.7m (100%) Lane Cove Tunnel Not rated A$260m A$29.8m3 (100%) CityLink assets Equity distributions M1 Eastern Security
Slide 31: EMTN Programme
EMTN PROGRAMME Issuer Transurban Finance Company Pty Ltd Status Senior, secured Ranks equally with all other Transurban corporate debt Issue ratings A- / Baa1 / A- (all stable) (S&P / Moody’s / Fitch) Programme1 US$2 billion Secured Euro Medium Term Note Programme Trustee The Bank of New York Mellon
Slide 32: Conclusion
CONCLUSION A STRONG INVESTMENT PROPOSITION • Ownership stake in eight toll road concessions in Australia and the United States – Long life concessions – Essential urban routes in Australia’s two largest and most densely populated cities – Embedded inflation protection – Resilience in economic downtu
Slide 33: Appendix 1 – Asset Portfolio
transurban a MA APPENDIX 1 — ASSET PORTFOLIO.
Slide 34: CityLink
CITYLINK KEY INFRASTRUCTURE FOR MELBOURNE CAGR 100% Historicals FY09 FY10 FY11 1% ownership Traffic (AADT) ‘000 660.5 686.8 747.0 6.3 Toll revenue A$m 368.4 389.9 434.6 8.6 48.8% of EBITDA A$m 295.9 328.3 382.1 13.6 Group proportional EBITDA margin % 80.3 84.2 87.9 toll revenue • Connects Melbourne'
Slide 35: Hills M2
HILLS M2 LINKING SYDNEY’S CBD TO THE NORTHERN SUBURBS CAGR 100% Historicals FY09 FY10 FY11 1% ownership Traffic (AADT) ‘000 93.3 95.0 95.2 1.0 Toll revenue A$m 124.9 141.5 145.7 8.0 16.3% of EBITDA A$m 94.0 112.7 119.7 12.9 Group proportional EBITDA margin % 75.3 79.6 82.2 toll revenue • Fastest rou
Slide 36: Lane Cove Tunnel
LANE COVE TUNNEL RECENT ACQUISITION DELIVERING CAGR 100% Historicals FY09 FY10 FY111 2% ownership Traffic (AADT) ‘000 - - 69.1 - Toll revenue A$m - - 51.7 - 5.8% of EBITDA A$m - - 29.8 - Group proportional EBITDA margin % - - 57.6 toll revenue • Opened in 2007 with a construction cost of • Successfu
Slide 37: M1 Eastern Distributor
M1 EASTERN DISTRIBUTOR CONNECTING SYDNEY AIRPORT TO THE CBD CAGR 75.1% Historicals1 FY09 FY10 FY11 2% ownership 100% Traffic ‘000 47.4 49.2 50.5 3.2 (AADT)3 Proportional 7.8% of toll revenue A$m 59.1 61.8 69.2 8.2 Group Proportional proportional A$m 41.2 43.8 52.4 12.7 EBITDA toll revenue Proportion
Slide 38: Westlink M7
WESTLINK M7 FASTEST GROWING SYDNEY TOLL ROAD CAGR 50% Historicals1 FY09 FY10 FY11 2% ownership 100% Traffic ‘000 119.8 127.7 135.7 6.5 (AADT)3 Proportional 10.7% of toll revenue A$m 80.1 87.7 95.3 9.1 Group Proportional proportional A$m 63.7 69.5 74.7 8.3 EBITDA toll revenue Proportional % 79.4 79.2
Slide 39: M5 Motorway
M5 MOTORWAY ESTABLISHED HIGH USE ROAD CAGR 50% Historicals1 FY09 FY10 FY11 2% ownership 100% Traffic ‘000 117.7 121.7 123.6 2.5 (AADT)3 Proportional 9.4% of toll revenue A$m 78.5 81.3 83.7 3.3 Group Proportional proportional A$m 71.5 74.7 75.2 2.6 EBITDA toll revenue Proportional % 91.1 92.0 89.8 EB
Slide 40: United States
UNITED STATES POCAHONTAS CAPITAL BELTWAY 75% 67.5% ownership ownership 1.2% of Scheduled Group to open in proportional early 2013 toll revenue • Long life concession to 2105 • Long life concession to 2087 • Richmond Airport Connector opened January • Scheduled to open on time (2013) and on budget 20
Slide 41: Appendix 2 – Asset Debt Maturity Profile
APPENDIX 2 – ASSET DEBT MATURITY PROFILE
Slide 42: Asset Debt Maturity Profile
ASSET DEBT MATURITY PROFILE COMMITTED FACILITIES AS AT 30 JUNE 20111 1,400 1,200 A$ millions (equivalent if US$) 1,000 500 505 800 548 600 548 523 400 400 548 200 340 285 195 260 260 250 60 111 49 0 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 M1 Eas
Slide 43: Appendix 3 – Tolling Escalation
APPENDIX 3 – TOLLING ESCALATION
Slide 44: Detailed Escalation Index and CAGR
DETAILED ESCALATION INDEX AND CAGR Escalation Concession Escalation Index definition CAGR¹,² CAGR toll price reference Index CityLink CPI CPI is the All Groups Consumer Price Index Weighted Average of 6.4% Average of car and truck trip cap Eight Capital Cities published quarterly by the Australian
Slide 45: Appendix 4 – Additional Financial Information
APPENDIX 4 – ADDITIONAL FINANCIAL INFORMATION
Slide 46: Reconciliation: Statutory to Proportional EBITDA
RECONCILIATION STATUTORY TO PROPORTIONAL EBITDA FY09 (A$m) FY10 (A$m) FY11 (A$m) Statutory EBITDA 479.4 527.5 603.9 Less: EBITDA attributable to Non-controlling Interest (59.0) (42.3) (18.7) Add: M5 Proportional EBITDA 71.5 74.7 75.2 Add: M7 Proportional EBITDA 63.7 69.5 74.7 Add: Pocahontas Proport
Slide 47: Free Cash
FREE CASH FY09 (A$m) FY10 (A$m) FY11 (A$m) Cashflows from operating activities (Refer Group Statutory Accounts) 306.0 333.4 374.7 Adjusted for: M7 Term Loan Notes received (26.4) (32.8) (37.0) 1 Payments for maintenance capital expenditure 14.0 22.4 18.4 Cashflows from operating activities – M1 and
Slide 48: Balance Sheet
BALANCE SHEET Summarised Balance Sheet data taken from the audited consolidated annual financial statements of the Transurban Group consisting of Transurban Holdings Limited (ABN 86 098 143 429) (THL), Transurban International Limited (ARBN 121 746 825) (TIL) and Transurban Holding Trust (ARSN 098 8
Slide 49: Endnotes
transurban ENDNOTES
Slide 50: Endnotes
ENDNOTES Slide 4 - Snapshot 1. Market capitalisation as at 30 June 2011. 2. Underlying proportional results, refer to Slide 1. Further detail on underlying proportional EBITDA is provided on Slide 20 and a reconciliation between statutory EBITDA and proportional EBITDA is provided on Slide 44. 3. As
Slide 51: Endnotes – Continued
ENDNOTES – CONTINUED Slide 12 – Tolling escalation 1. Excludes M4 as the motorway assets and infrastructure were handed back to the New South Wales State Government in February 2010. 2. CAGR is the compound annual growth rate calculated as a two year rate beginning with the 2009 result and ending wi
Slide 52: Endnotes – Continued
ENDNOTES – CONTINUED Slide 23 – Transurban corporate debt 1. Amounts differ from the amounts shown in the statutory financial statements due to capitalised borrowing costs, which are not included in the table and chart above. 2. The amounts of US private placement notes differ from amounts shown in
Slide 53: Endnotes – Continued
ENDNOTES – CONTINUED Slide 32 – CityLink 1. CAGR is the compound annual growth rate calculated as a two year rate beginning with the 2009 result and ending with the 2011 result. Slide 33 – Hills M2 1. CAGR is the compound annual growth rate calculated as a two year rate beginning with the 2009 resul
Slide 54: • Click to edit Master text styles − Second level
• Click to edit Master text styles − Second level > Third level
Transurban Group — Debt Investor Presentation (October 2011) on 6ix