Slide 1: ASX release: Transurban Investor Presentation
asx release For personal use only 17 February 2010 Transurban Investor Presentation Attached please find the Investor Presentation which will be given to analysts this morning . Elizabeth Mildwater Company Secretary Investor enquiries Henry Byrne +61 (0) 438 564 245 Media enquiries Megan Fletcher +
Slide 2: 2010 Interim Results Presentation
TRANSURBAN 2010 INTERIM RESULTS PRESENTATION For personal use only 17 FEBRUARY 2010 1
Slide 3: Disclaimer
DISCLAIMER For personal use only 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 T
Slide 4: Update on Change of Control Proposal
UPDATE ON CHANGE OF CONTROL PROPOSAL For personal use only Unsolicited, highly conditional and non-binding joint proposal by CPP and OTPP on 27 October 2009 to acquire Transurban for $5.25 per security Transurban Board rejected the proposal on 5 November 2009 On 10 December 2009 the Future Fun
Slide 5: Agenda
AGENDA For personal use only 1. Introduction 2. Financial highlights 3. Portfolio and capability 4. Growth opportunities 4
Slide 6: Highlights
HIGHLIGHTS For personal use only Continued double digit % proportional Saving forecasts exceeded EBITDA growth 400 $ 'Millions %001 Total 350 $38.1m %09 $20 Delivered cost savings in 300 .0m %08 excess of forecast Total %07 250 $26.6m %06 200 $21.4m %05 150 %04 Forecast cost savings 100 %03 $20.0m 5
Slide 7: Financial Highlights
TRANSURBAN FINANCIAL HIGHLIGHTS For personal use only TOM HONAN – CHIEF FINANCIAL OFFICER6
Slide 8: Statutory Reporting
STATUTORY REPORTING For personal use only Total revenue - $591.4 million (2009 : $575.2 million) - 2.8% − Toll revenue - $363.3 million (2009 : $343.7 million) - 5.7% − Fee and other revenue - $228.1 million (2009 : $231.5 million) - 1.5% EBITDA (statutory basis) - $288.4 million (2008 : $
Slide 9: Double Digit EBITDA Growth Continues
DOUBLE DIGIT EBITDA GROWTH CONTINUES For personal use only Proportional results for six months ended 31 December 2009 31 Dec 09 31 Dec 08 % Change $M $M Toll revenue 416.1 392.5 6.0 Fee revenue 26.3 23.4 12.4 Other revenue 9.1 8.9 2.2 Operating costs (101.8) (105.9) (3.9) Business developmen
Slide 10: Consistent Growth Across Portfolio
CONSISTENT GROWTH ACROSS PORTFOLIO For personal use only 1st half EBITDA by asset FY05 – FY10 1st half toll revenue by asset FY05 – FY10 400 450 $ 'Millions S 'Millions 350 12.4%↑ 400 11.6%↑ 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 H1 2005 H1 2006 H1 2007 H1 2008 H1 2009 H1 2010 H1 2005
Slide 11: EBITDA Enhanced by Cost Savings
For personal use only $ 'Millions 280 290 300 310 320 330 340 EBITDA H1 297.3 2009 23.6 Toll revenue Fee and COST SAVINGS 3.1 other revenue Incremental (2.0) volume costs Operating 6.1 EBITDA ENHANCED BY Costs Business 0.3 Development Underlying EBITDA movement – 1st half FY09 to 1st half FY10 Corpo
Slide 12: New Cost Structure Forecasts Exceeded
NEW COST STRUCTURE FORECASTS EXCEEDED For personal use only 100% Total cost savings since H2 FY08 $38.1 million December 2009 – delivered 90% Total further $11.5m for total of $38.1m $38.1m Internal company restructure 80% commenced FY08 June 2009 – delivered direct70% cost savings of Total Cult
Slide 13: 18.6% Underlying Free Cash Growth
18.6% UNDERLYING FREE CASH GROWTH For personal use only 31 Dec 09 31 Dec 08 % Change $M $M Underlying free cash (refer Appendix slide 45) 163.2 137.6 18.6 Corporate advisory costs (1.9) - Restructuring costs - (8.3) DRIVe and CBE financial close impacts - (8.8) Free cash 161.3 120.5 33.9 Number
Slide 14: Growth Across Portfolio
GROWTH ACROSS PORTFOLIO For personal use only Six months ended 31 December 20091 % of prop Traffic Toll Revenue EBITDA toll revenue Growth (%) Growth (%) Growth (%) 46.5 CityLink 0.9 6.2 CityLink 9.2 17.2 Hills M2 2.1 12.4 Hills M2 21.4 7.5 M1 Eastern Distributor 3.6 Eastern Distributor 4.1 M1 4.3 6
Slide 15: Attractive to Lenders
ATTRACTIVE TO LENDERS ASSET QUALITY AND FINANCIAL DISCIPLINE For personal use only Successfully refinanced M1 Eastern Distributor (July 2009) Successfully refinanced M5 (December 2009) Strong bank support on asset refinancings Long dated tenor in corporate facilities Undrawn capacity creates
Slide 16: Corporate Debt Maturities
CORPORATE DEBT MATURITIES For personal use only Refinancing requirements – 7 year forward view at half yearly intervals 500 450 AUD $ million (equivalent if USD) 400 129 350 300 250 5 223 200 375 136 150 300 300 100 190 123 50 97 100 0 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 D
Slide 17: Non Recourse Debt Maturities
NON RECOURSE DEBT MATURITIES For personal use only Refinancing requirements – 7 year forward view at half yearly intervals 1,400 13 1,200 AUD $ million (equivalent if USD) 1,000 500 800 600 510 400 500 200 291 260 250 195 175 0 60 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14
Slide 18: Summary: Transparent Secure Returns
SUMMARY TRANSPARENT SECURE RETURNS For personal use only Excellent performance on key metrics – Toll revenue 6.0% – Direct cost 8.4% – Underlying EBITDA 12.4% – Underlying free cash 18.6% Refinanced more than $1 billion of non- recourse facilities 1st half distribution of 12 cents – Fu
Slide 19: Portfolio and Capability
TRANSURBAN PORTFOLIO AND CAPABILITY For personal use only CHRIS LYNCH – CHIEF EXECUTIVE OFFICER 18
Slide 20: Portfolio and Capability
PORTFOLIO AND CAPABILITY For personal use only Strong demographic characteristics Proven resilience in economic downturns Embedded inflation protection Industry leader in toll roads Track record of innovation and pursuit of excellence Financial Discipline 19
Slide 21: Strong Demographic Characteristics
STRONG DEMOGRAPHIC CHARACTERISTICS For personal use only Portfolio through key urban corridors Melbourne, Australia – Congestion – Wealth – Population growth Attractive economic drivers Opportunity to lead innovation in the US Northern Virginia, US Sydney, Australia 20
Slide 22: Proven Resilience in Economic Downturns
PROVEN RESILIENCE IN ECONOMIC DOWNTURNS For personal use only % Transurban proportional toll revenue Traffic on Transurban roads versus Sydney M7 10.3% Warnow Tunnel global peers during Global Financial Sydney M5 10.1% Crisis – data for 12 months ended 30 Euroscut Norte Litoral Sydney M2 16.0% 98.2%
Slide 23: Embedded Inflation Protection
EMBEDDED INFLATION PROTECTION For personal use only Asset Toll Escalation Escalated quarterly by the greater of quarterly CPI or 1.1065% (being 4.5% p.a. as a quarterly CityLink compound rate) for the first 15 years, then quarterly by CPI. This is subject to a cap of annual CPI plus 2.5%, which cann
Slide 24: Track Record: Operational Capability
TRACK RECORD OPERATIONAL CAPABILITY For personal use only Demonstrated leader in technological innovation Product innovation Leader in network management 23
Slide 25: Growth Opportunities
TRANSURBAN GROWTH OPPORTUNITIES For personal use only 24
Slide 26: Track Record: Portfolio Enhancement
TRACK RECORD PORTFOLIO ENHANCEMENT For personal use only Proven value creation through greenfield project development Portfolio enhancement through M&A Major asset enhancements Strong capital discipline 25
Slide 27: Substantial Pipeline of Growth Opportunities
SUBSTANTIAL PIPELINE OF GROWTH OPPORTUNITIES For personal use only Significant prospective value enhancements from the existing Transurban network to deliver benefits over the near, medium and longer term – Not all in external valuations of Transurban Projects in progress CityLink upgrade Restores
Slide 28: CityLink M1 Upgrade
CITYLINK M1 UPGRADE PROJECTS IN PROGRESS For personal use only Restores strong growth profile on Transurban’s largest asset Significant uplift to CityLink traffic forecast including: – Recovery of traffic lost during two years of construction; PLUS – Additional 7% Average Daily Transactions (ADT
Slide 29: Capital Beltway
CAPITAL BELTWAY PROJECTS IN PROGRESS For personal use only HOT lanes - potential to transform Beltway Construction 30% complete Uncapped dynamic tolling optimises revenue – Minimum speed 45mph 75 year concession (post construction) Three worst US roads for congestion1 1. Hollywood Freeway, L
Slide 30: M2 Upgrade In-Principle Agreement
M2 UPGRADE IN-PRINCIPLE AGREEMENT For personal use only PROJECTS IN NEGOTIATION Restores capacity for sustained long term growth on Transurban’s 2nd largest asset Value delivery for Transurban security holders clear – Near term - traffic uplift, ~8% toll price increase on completion, and two new
Slide 31: M5 Widening Initial Agreement
M5 WIDENING INITIAL AGREEMENT For personal use only PROJECTS IN NEGOTIATION Highly congested corridor on Sydney orbital Key growth corridor – Port Botany, Sydney Airport and land development in South West region (eg. Bringelly) Strong Government support for broader corridor solution – Currentl
Slide 32: I-95/395 HOT Lanes
I-95/395 HOT LANES PROJECTS IN NEGOTIATION For personal use only Second major HOT Lane opportunity for Transurban in Virginia Connects to Capital Beltway Timing dependent on resolution of local government concerns 31
Slide 33: Conclusion
TRANSURBAN CONCLUSION For personal use only 32
Slide 34: Outstanding Long Term Value
OUTSTANDING LONG TERM VALUE For personal use only Another great financial performance in the first half of FY10 – Toll revenue growth 6.0% – Traffic growth on all Australian assets – Outstanding performance on cost control – another $11.5m savings – Underlying EBITDA growth 12.4% – Underlying free
Slide 35: For personal use only
For personal use only 34
Slide 36: Appendix: Detailed Financials
TRANSURBAN APPENDIX 1 For personal use only DETAILED FINANCIALS 35
Slide 37: One-offs
ONE-OFFS For personal use only EBITDA Cash Effect 31 Dec 09 31 Dec 08 31 Dec 09 31 Dec 08 $M $M $M $M Loss on CEU Investment - (12.9) - - Corporate advisory costs (3.0) - (1.9) - Restructuring costs - - - (8.3) DRIVe and CBE financial close - - - (8.8) Total (3.0) (12.9) (1.9) (17.1) 36
Slide 38: Key Financial Highlights Statutory
KEY FINANCIAL HIGHLIGHTS STATUTORY For personal use only 31 Dec 09 31 Dec 08 % Change $M $M Toll revenue 363.3 342.1 6.2 Fee and other revenue 32.7 29.7 10.1 Operating costs (91.5) (97.3) (5.9) Net business development costs (6.3) (9.6) (34.4) Net CEU Investment loss - (12.9) (100.0) Corporate costs
Slide 39: Reconciliation of Statutory P&L to Statutory EBITDA December 2009
RECONCILIATION OF STATUTORY P&L TO STATUTORY EBITDA For personal use only 31 DECEMBER 2009 Interest & Offset finance fee construction Reallocation of Statutory Other revenue Net business $M revenue moved accounting capitalised Total P&L reallocation development to net finance disclosure under costs
Slide 40: Reconciliation of Statutory P&L to Statutory EBITDA December 2008
RECONCILIATION OF STATUTORY P&L TO STATUTORY EBITDA For personal use only 31 DECEMBER 2008 Interest/ finance Offset construction Allocation Other FX gain/loss fee revenue Net business accounting of $M Stat P&L revenue moved from CEU loss Total moved to net development disclosure under capitalised al
Slide 41: Reconciliation of Proportional to Statutory EBITDA
RECONCILIATION OF PROPORTIONAL TO STATUTORY EBITDA For personal use only 31 Dec 09 31 Dec 08 $M $M Statutory EBITDA 288.4 245.4 Less: M1 ED EBITDA attributable to Minority Interest (7.3) (6.9) Less: M4 EBITDA attributable to Minority Interest (23.5) (22.4) Add: M5 Proportional EBITDA 39.1 36.7 Add:
Slide 42: Result by Asset (Consolidated) December 2009
RESULT BY ASSET (CONSOLIDATED) For personal use only 31 DECEMBER 2009 Bus Dev/ $M CityLink Hills M2 Tollaust M1 ED M4 Roam Total Corporate Revenue Toll revenue 193.5 71.5 - 41.5 56.8 - - 363.3 Fees and other revenue 18.3 0.2 4.2 0.1 2.1 7.4 0.4 32.7 Total revenue 211.8 71.7 4.2 41.6 58.9 7.4 0.4 396
Slide 43: Result by Asset (Equity) December 2009
RESULT BY ASSET (EQUITY) 31 DECEMBER 2009 For personal use only M5 Westlink Pocahontas DRIVe $M Total Motorway M7 895 Operations Revenue Toll revenue 82.5 87.7 8.0 - 178.2 Fee and other revenue 6.6 1.0 - - 7.6 Total revenue 89.1 88.7 8.0 - 185.8 Total cost (11.0) (17.9) (6.1) (3.1) (38.1) EBITDA 78.
Slide 44: Result by Asset (Consolidated) December 2008
RESULT BY ASSET (CONSOLIDATED) For personal use only 31 DECEMBER 2008 Bus Dev/ $M CityLink Hills M2 Tollaust M1 ED M4 Roam Total Corporate Revenue Toll revenue 186.0 63.6 - 39.9 52.6 - - 342.1 Fees and other revenue 16.3 0.3 3.4 0.1 2.2 6.8 0.6 29.7 Total revenue 202.3 63.9 3.4 40.0 54.8 6.8 0.6 371
Slide 45: Result by Asset (Equity) December 2008
RESULT BY ASSET (EQUITY) 31 DECEMBER 2008 For personal use only M5 Westlink Pocahontas DRIVe $M Total Motorway M7 895 Operations Revenue Toll revenue 79.6 79.7 8.8 - 168.1 Fee and other revenue 6.4 1.0 - - 7.4 Total revenue 86.0 80.7 8.8 - 175.5 Total cost (12.6) (19.1) (3.7) (4.0) (39.4) EBITDA 73.
Slide 46: Free Cash
FREE CASH For personal use only 31 Dec 09 31 Dec 08 % Change $M $M Cashflows from operating activities (Refer Group Statutory Accounts) 185.5 168.4 Cashflows from operating activities – M1 ED and M4 (56.9) (84.6) Controlled cash 128.6 83.8 53.5 M1 Eastern Distributor 21.8 26.4 M4 – Statewide Roads 1
Slide 47: Proportional Finance Costs
PROPORTIONAL FINANCE COSTS For personal use only 31 Dec 09 31 Dec 08 $M $M Statutory net finance costs (86.8) (82.1) Less: M1 ED net finance costs attributable to the Minority Interest 0.5 0.7 Less: M4 net finance costs attributable to the Minority Interest 1.4 1.1 Add: M5 proportional finance costs
Slide 48: Cash Based Interest Charges Remain Consistent
CASH BASED INTEREST CHARGES REMAIN CONSISTENT For personal use only FINANCE COSTS Proportional Statutory 31 Dec 09 31 Dec 08 Change 31 Dec 09 31 Dec 08 Change $M $M % $M $M % Debt interest expense – cash (197.6) (193.7) 2.0 (130.1) (122.7) 6.0 Debt interest expense – accretion (15.7) (14.7) 6.8 (15.
Slide 49: Infrastructure Bonds Post-Tax Cash Flow Impact
INFRASTRUCTURE BONDS POST-TAX CASH FLOW IMPACT For personal use only FY10 M1 Eastern Distributor - $M FY09 H1 Interest received (including placement fee) 132.6 139.9 Interest paid (88.3) (96.1) Net interest revenue 44.3 43.8 Tax payable (35.7) (39.8) Net interest after tax 8.6 4.0 FY10 Hills M2 - $M
Slide 50: Analysis of Taxation
ANALYSIS OF TAXATION STATUTORY AND PROPORTIONAL For personal use only 31 Dec 09 31 Dec 08 Statutory tax paid includes $M $M Corporate - (0.5) M1 Eastern Distributor (29.7) (6.9) Hills M2 - - M4 (16.7) (10.9) Transurban US - (0.6) Westlink holding companies (2.4) (0.5) Total (48.8) (19.4) 31 Dec 09 3
Slide 51: Maintenance Expense Included in Operating Costs
MAINTENANCE EXPENSE INCLUDED IN OPERATING COSTS For personal use only 31 Dec 09 31 Dec 08 Asset $M $M CityLink 4.7 6.3 Hills M2 1.0 2.2 M1 – Eastern Distributor 1.7 1.1 M4 – Statewide Roads - - M5 – Interlink (1.3) 1.0 M7 – Westlink 3.2 4.6 Pocahontas Parkway 3.0 0.6 1. The above information has bee
Slide 52: Appendix: Detailed Treasury and Funding
TRANSURBAN APPENDIX 2 For personal use only DETAILED TREASURY AND FUNDING 51
Slide 53: Group Debt Facilities at December 2009
GROUP DEBT FACILITIES AT 31 DECEMBER 2009 For personal use only Transurban corporate debt AUD ($ million) USD ($ million) Working capital lines¹ 265 20 Term bank debt 600 - US Private Placements 1,283 144 Domestic unwrapped bonds 300 - Domestic wrapped bonds 600 - Total 3,048 164 Non recourse (AUD $
Slide 54: Total Group Drawn Debt
TOTAL GROUP DRAWN DEBT For personal use only Group 31 December 30 June 2009 Movement Explanation3 Debt 2009 AUD1 Corporate 3,048 3,003 + 45 $150m domestic bonds repaid offset by $185m increase in drawn working capital and $10.7m increase in 2006 USPP (accreting interest) Non recourse (Proportional)
Slide 55: Key Debt Metrics
KEY DEBT METRICS For personal use only 31 December 2009 30 June 2009 Transurban Non Transurban Non Corporate Corporate Group recourse Group recourse Weighted average maturity (years)1 10.1 6.3 13.2 10.1 yrs 6.9 yrs 13.9 yrs Weighted average cost of AUD debt 6.7% 6.4% 7.3% 6.4% 6.5% 6.4% Weighted ave
Slide 56: Corporate Debt Maturities: Full Profile
CORPORATE DEBT MATURITIES For personal use only Full profile 600 AUD $ million (or equivalent) 500 165 400 129 300 300 5 223 200 375 136 300 300 100 223 219 206 190 161 123 125 97 100 82 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Financial Year Unwrap
Slide 57: Non-Recourse Debt Maturities (100%)
NON-RECOURSE DEBT MATURITIES (100%) For personal use only Non-recourse debt maturity profile 2010 to 2030 1,400 13 1,200 AUD $ million (equivalent if USD) 1,000 500 800 600 510 400 500 200 291 260 250 195 175 60 0 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Financial Year M7 M2 M1 ED M5 M
Slide 58: Non-Recourse Debt (100%): Maturities Beyond 2030
NON-RECOURSE DEBT (100%) For personal use only Maturities beyond 2030 1,400 1,200 AUD $ million (equivalent if USD) 495 1,000 800 600 400 819 200 341 123 39 0 19 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 Financial Year Capital Beltway - drawn Capital Beltway - undrawn Pocahontas - drawn Poca
Slide 59: Appendix: Asset Snapshot
TRANSURBAN APPENDIX 3 For personal use only ASSET SNAPSHOT 58
Slide 60: CityLink: Next Phase Begins
CITYLINK NEXT PHASE BEGINS For personal use only Positive outlook reflecting progressive % growth EBITDA completion of works on Southern Link Traffic Toll revenue EBITDA Margin and adjacent sections 0.9% 6.2% 9.2% 85% − Monash Freeway works complete Elements of CityLink toll revenue growth − South
Slide 61: Hills M2: Ready to Upgrade
HILLS M2 READY TO UPGRADE For personal use only Pricing strength evident % growth EBITDA Margin − 12.5 per cent toll price increase at Traffic Toll revenue EBITDA the Main Toll Point in July 2009 2.1% 12.4% 21.4% 80% − Transition to truck toll multiple of 3 times cars began in April 2009 Elements
Slide 62: M1 Eastern Distributor Continues to Deliver
M1 EASTERN DISTRIBUTOR CONTINUES TO DELIVER For personal use only Weekend growth particularly strong % growth EBITDA reflecting increasing discretionary Traffic Toll revenue EBITDA Margin travel 3.6% 4.1% 4.3% 71% 11.5% growth in trips feeding Sydney Harbour Bridge Elements of Eastern Distributo
Slide 63: M4 Motorway: End of Concession
M4 MOTORWAY END OF CONCESSION For personal use only Concession ended 15 February 2010 % growth EBITDA Traffic Toll revenue EBITDA Margin NSW Auditor General’s report released 2.5% 7.9% 4.8% 84% in October 2009 noted the following: “...the sections of the M4 built and maintained by SWR should be
Slide 64: Westlink M7: Strong Growth Drivers
WESTLINK M7 STRONG GROWTH DRIVERS For personal use only Traffic growth returning to pre-GFC % growth EBITDA levels Traffic Toll revenue EBITDA Margin – 10 per cent revenue growth in first 6.1% 10.0% 14.9% 81% half of FY10 Elements of Westlink M7 toll revenue growth Southern section of M7 continu
Slide 65: M5: Next Step - Widening
M5 NEXT STEP - WIDENING For personal use only Strong recovery in truck traffic in % growth EBITDA December quarter 2009 (+4.3% vs. Traffic Toll revenue EBITDA Margin pcp) 3.9% 3.7% 6.4% 95% Initial agreement with NSW Government on M5 widening Elements of M5 toll revenue growth 5% 3.9% 0.0% 0.0%
Slide 66: Pocahontas
POCAHONTAS For personal use only Construction of Richmond Airport % growth EBITDA Traffic Toll revenue EBITDA Margin Connector underway (11.6%) (1.9%) (62.7%) 24% Depressed economic climate in Richmond, Virginia continues Elements of Pocahontas toll revenue decrease (1.0%) 9.1% (1.9%) (3.0%) (0.
Slide 67: Capital Beltway: On Track
CAPITAL BELTWAY ON TRACK For personal use only Construction on track (30% complete) Design 99% complete Right of way acquisition on track – offers made on 91% of parcels First bridge associated with the project has been opened to traffic Projected funding schedule US$’ million Equity PABs TI
Slide 68: Appendix: Other Information
TRANSURBAN APPENDIX 4 For personal use only OTHER INFORMATION 67
Slide 69: Elements of Toll Revenue Growth
For personal use only $ 'Millions 370 380 390 400 410 420 430 H1 2009 Toll 392.5 revenue CityLink 11.0 M1 CityLink upgrade (3.5) provision 7.9 M2 1.2 M1 2.1 M4 1.5 M5 4.0 M7 Pocahontas (0.6) Toll revenue growth by asset 1st half FY10 REVENUE GROWTH H1 2010 Toll ELEMENTS OF TOLL 416.1 revenue $ 'Mill
Slide 70: Half Yearly EBITDA and Revenue Growth
HALF YEARLY EBITDA AND REVENUE GROWTH For personal use only Half yearly EBITDA by asset – FY05 – FY10 Half yearly toll revenue by asset – FY05 – FY10 400,000.00 450,000.00 Thousands Thousands 400,000.00 350,000.00 350,000.00 300,000.00 300,000.00 250,000.00 M5 Interlink M5 Interlink M4 Statewide Roa
Slide 71: For personal use only
For personal use only 70