Transurban Group Ltd. · ASX:TCL
Transurban — Investor Day (May 2021)
57 slides from Transurban's investor day presentation, May 3, 2021
Slide 1: Investor Day
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Slide 2: Disclaimer and Basis of Preparation
DISCLAIMER AND BASIS OF PREPARATION 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 (ACN 121 746 825). The responsible entity of Transurban Holding Trust is
Slide 3: Agenda
AGENDA 1 CEO INTRODUCTION AND 7 CAPITAL MANAGEMENT DISCUSSION INVESTMENT PROPOSITION 2 TRAFFIC AND MOBILITY TRENDS 8 PROJECTS AND PARTNERSHIPS 3 NORTH AMERICA 9 CEO INVESTMENT PROPOSITION DISCUSSION BREAK 4 CUSTOMER AND TECHNOLOGY 10 Q&A SESSION 2 5 ENVIRONMENTAL, SOCIAL AND GOVERNANCE PANEL 6 Q&A S
Slide 4: What You Wanted Covered Today
WHAT YOU WANTED COVERED TODAY Growth Environmental Capital Mobility pipeline Social Governance management trends Including North America Including net zero by 2050, Including supporting growth, Including the impact of and WestConnex social licence and diversity distributions and interest COVID-19 an
Slide 5: Executive Committee
EXECUTIVE COMMITTEE Scott Charlton Henry Byrne Pierce Coffee Suzette Corr Andrew Head Chief Executive Group Executive, President, Group Executive, Chief Executive Officer Victoria and Strategy North America People and Culture Officer, WestConnex Michele Huey Michelle Jablko Sue Johnson Simon Moorfie
Slide 6: Investor Day Hub
INVESTOR DAY HUB TRANSURBAN INVESTOR DAY | 3 MAY 2021 6
Slide 7: Group Strategy
GROUP STRATEGY Stakeholder engagement To provide sustainable Optimal networks transport solutions that offer choice, reliability, safety, transparency Delivery and operations and value Disciplined investment TRANSURBAN INVESTOR DAY | 3 MAY 2021 7
Slide 8: Transurban Investment Proposition
TRANSURBAN INVESTMENT PROPOSITION Leading global toll road developer and operator 21 assets located in five markets with quality structural growth drivers Balancing growth in distributions and investment in new Weighted average concession life of 29 years opportunities to create long-term value Seve
Slide 9: Converging Themes Driving Opportunity in Our Core Markets
CONVERGING THEMES DRIVING OPPORTUNITY IN OUR CORE MARKETS Need for Governments Infrastructure a private-sector increasingly favouring key driver for investment given a development economic stimulus record government partner approach globally debt levels TRANSURBAN INVESTOR DAY | 3 MAY 2021 9
Slide 10: Opportunity Pipeline
OPPORTUNITY PIPELINE Material pipeline of opportunities in core markets enables Transurban to take a disciplined approach in growing the portfolio REGION POTENTIAL OPPORTUNITIES NEXT 5 YEARS 5+ YEARS New South Wales Acquisition of the NSW Government’s 49% stake in WestConnex M7 staged widening and M
Slide 11: Traffic and Mobility Trends
TRAFFIC AND MOBILITY TRENDS HENRY BYRNE SUE JOHNSON GROUP EXECUTIVE, GROUP EXECUTIVE, VICTORIA AND STRATEGY QUEENSLAND
Slide 12: Essential Transport Networks
ESSENTIAL TRANSPORT NETWORKS Recovery in group level average daily traffic (ADT) Customers continuing to use toll roads for diverse reasons1 2.5 0% 10% 20% 30% 40% 50% 60% 70% Seasonal holiday period Travelling to or from work during the week 2.0 North America ADT AVERAGE DAILY TRAFFIC (MILLIONS) Tr
Slide 13: Brisbane Traffic Recovery
BRISBANE TRAFFIC RECOVERY • On a Brisbane portfolio basis, traffic largely recovered to pre-COVID-19 levels in late 2020 in line with restrictions easing • Recovery has continued in 2021 with February average daily traffic (ADT) up 4% year on year and up 6% excluding Airportlink M7 • Range of perfor
Slide 14: Mobility Trends Reverting to Pre-COVID-19 Norms
MOBILITY TRENDS REVERTING TO PRE-COVID-19 NORMS Mobility impacts from COVID-19 largely offsetting Working from home prevalence has had neutral impact on workday • Emerging indicators in Australian markets suggest that working from home is travel patterns not going to fundamentally alter long-term tr
Slide 15: Long Term Mobility Trends Offer Opportunity
LONG TERM MOBILITY TRENDS OFFER OPPORTUNITY Convergence of trends to create safer, more sustainable, integrated and automated road networks, supporting more kilometres travelled • Technology and policy development PROGRESSING SLOWER MINIMAL CHANGE PROGRESSING FASTER changes are impacting expected ti
Slide 16: Growth Opportunities in North America
GROWTH OPPORTUNITIES IN NORTH AMERICA PIERCE COFFEE PRESIDENT, NORTH AMERICA
Slide 17: Transurban - North America
TRANSURBAN - NORTH AMERICA Experienced operator in the region • Growing portfolio of high-quality assets, with average concession length of operating 45 years 4 assets across Building regional capability in line with regional growth ambitions two markets • Growing local capability through further de
Slide 18: Update on Maryland Express Lanes Project
UPDATE ON MARYLAND EXPRESS LANES PROJECT Procurement process Scope and status update • Maryland Department of Transportation (MDOT) • Phase 1 includes the right to develop approximately 60 kilometres of high-occupancy toll opted for Predevelopment Agreement (PDA) (HOT) lanes connecting Virginia and
Slide 19: North American Recovery
NORTH AMERICAN RECOVERY Restrictions easing, vaccine roll Traffic recovery anticipated to align with increased freedom of movement out underway • Impact to Express Lanes has been prolonged due to severity of limitations in movement in GWA, but the region is • Restrictions lifting throughout showing
Slide 20: North American Growth Characteristics Represent Long-Term Opportunities
NORTH AMERICAN GROWTH CHARACTERISTICS REPRESENT LONG-TERM OPPORTUNITIES Need for infrastructure investment PPP environment maturing Mobility trends in North American markets providing combined with increasing levels of with acceptance increasing opportunities public debt US roadway condition1 US tra
Slide 21: Customer and Technology
CUSTOMER AND TECHNOLOGY SIMON MOORFIELD GROUP EXECUTIVE, CUSTOMER AND TECHNOLOGY
Slide 22: Customer Insights Overview
CUSTOMER INSIGHTS OVERVIEW Insights into Transurban’s customer base Driven by data Transurban has almost 9 million customers and road users across Australia Transurban customer team analyses around 250,000 pieces of feedback and North America from Australian customers annually through our Voice of t
Slide 23: Customer Insights COVID-19 Commercial Customers
CUSTOMER INSIGHTS COVID-19 COMMERCIAL CUSTOMERS Key commercial customer revenue by sector1 Impacts of COVID-19 on commercial customer traffic varied across industry segments • Commercial customers make up around 20% of Transurban’s customer trips • Given the broad range of customer industries, impac
Slide 24: Customer and Technology Priorities
CUSTOMER AND TECHNOLOGY PRIORITIES Customer focused Customer trust Future driven • Listening to customers provides Transurban • Maintaining customer trust and support • Adapting to a rapid increase in data and with insights to create value, support social means getting the basics right: increasing c
Slide 25: Environmental, Social and Governance Panel
ENVIRONMENTAL, SOCIAL AND GOVERNANCE PANEL
Slide 26: Environmental, Social and Governance Panel
ENVIRONMENTAL, SOCIAL AND GOVERNANCE PANEL Michelle Jablko Andrew Head Suzette Corr Simon Moorfield Chief Financial Chief Executive Group Executive, Group Executive, Officer Officer, WestConnex People and Culture Customer and Technology TRANSURBAN INVESTOR DAY | 3 MAY 2021 26
Slide 27: ESG Investment Proposition
ESG INVESTMENT PROPOSITION Transurban is committed to strengthening communities through transport. Providing leadership and taking action on environmental, social and governance factors is fundamental to upholding the values of the Group and to ensuring the ongoing success and sustainability of the
Slide 28: WestConnex Sentiment Turnaround
WESTCONNEX SENTIMENT TURNAROUND1 2019 2020 POSITIVE SENTIMENT TOWARDS WESTCONNEX 56% 68% MAKES TRAVELLING AROUND SYDNEY EASIER AND FASTER 60% 73% AGREE THAT IT IS GOOD FOR SYDNEY OVERALL 62% 74% POSITIVE FEELINGS ABOUT INCREASED SIGNAGE 60% 80% 1. Transurban commissioned research: ‘Community Attitud
Slide 29: Diversity
DIVERSITY Gender diversity goal: to improve gender equity and ensure all genders Cultural diversity goal: to ensure our workforce reflects the cultural have access to equal opportunities at all levels across Transurban diversity of the broader population and communities we work across, and • 50% gen
Slide 30: Trip Compare Tool Provides Transparency and Choice
TRIP COMPARE TOOL PROVIDES TRANSPARENCY AND CHOICE TRANSURBAN INVESTOR DAY | 3 MAY 2021 30
Slide 31: Helping Customers Through Hardship
HELPING CUSTOMERS THROUGH HARDSHIP Support granted in 2020 Linkt Assist • $10.1 million in toll credits • Ongoing commitment to support • >40,000 people Australian customers experiencing social or financial hardship Take up of 2020 toll credit program • Support services include toll credits, extende
Slide 32: Net Zero Commitments
NET ZERO COMMITMENTS Transurban has committed to net zero GHG emissions by 2050, which extends our existing 2030 GHG emissions reduction targets1 Scope 1: Fuel Scope 2: Electricity Scope 3: Supply Chain Scope 3: Major Projects 50% reduction by 2030 22% reduction by 2030 55% reduction by 2030 Net Zer
Slide 33: Q&A Session One
Q&A SESSION ONE
Slide 34: Q&A Session One
Q&A SESSION ONE Henry Byrne Suzette Corr Andrew Head Sue Johnson Simon Moorfield Group Executive, Group Executive, Chief Executive Group Executive, Group Executive, Victoria and Strategy People and Culture Officer, WestConnex Queensland Customer and Technology TRANSURBAN INVESTOR DAY | 3 MAY 2021 34
Slide 35: Capital Management
CAPITAL MANAGEMENT MICHELLE JABLKO CHIEF FINANCIAL OFFICER WITH TOM MCKAY GM, TREASURY AND CAPITAL MARKETS
Slide 36: Resilience Through COVID-19
RESILIENCE THROUGH COVID-19 Asset resilience Liquidity buffers Rating agencies and covenants Traffic resilience from diversified Sufficient liquidity to meet short and Maintained credit ratings and sufficient regional presence, trip sources medium-term commitments covenant headroom and commercial tr
Slide 37: Capital Management Approach Supports Investment Proposition
CAPITAL MANAGEMENT APPROACH SUPPORTS INVESTMENT PROPOSITION Robust balance sheet provides optionality for investment in new opportunities Balancing growth in Resilient cash flows underpinned by essential infrastructure distributions and investment in new opportunities to create long-term value Long-
Slide 38: Near-Term Growth Opportunities
NEAR-TERM GROWTH OPPORTUNITIES Chesapeake transaction proceeds and Capital Releases to help fund near-term growth opportunities Committed projects / SPEND TO-DATE1 2H21 FY22 FY23 FY24 projects under development2 $600M WESTCONNEX—Sydney ($0.8B)3 $2,550M WEST GATE TUNNEL PROJECT—Melbourne ($4.0B)4 USD
Slide 39: Near-Term Interest Rate Exposure
NEAR-TERM INTEREST RATE EXPOSURE Average cost of upcoming term debt maturities above average cost of debt1 Embedded CPI escalation strengthens interest rate hedge2,3 Average cost of 5% 5% 2% 5% maturing term debt 1.5 1.2 MATURITIES (A$ BILLIONS) 0.9 CPI or greater No CPI floor 0.6 Dynamic FY22 FY23
Slide 40: Projects and Partners
PROJECTS AND PARTNERS HUGH WEHBY MICHELE HUEY GROUP EXECUTIVE, GROUP EXECUTIVE, PARTNERS, DELIVERY NEW SOUTH WALES AND RISK
Slide 41: Health and Safety
HEALTH AND SAFETY Our Contractor Road people safety safety safety Focusing on empowering our people to Striving to develop collaborative Working proactively with the community, demonstrate proactive health and safety relationships with contractors and clients research groups and government to leader
Slide 42: Value of Partnerships
VALUE OF PARTNERSHIPS Financial support and flexibility Partnership non-negotiables • Equity partnerships provide Transurban with additional funding capacity to pursue an ambitious growth pipeline in • Transurban has pursued both Australia and North America, while supporting credit metrics and facil
Slide 43: Partner Video
PARTNER VIDEO “AustralianSuper trusts NIK KEMP that Transurban will deliver HEAD OF INFRASTRUCTURE, AUSTRALIANSUPER on its projects… we're both very aligned, when we undertake projects together, to deliver long-term value” TRANSURBAN INVESTOR DAY | 3 MAY 2021 43
Slide 44: West Gate Tunnel Project
WEST GATE TUNNEL PROJECT1 Tunnelling Update • Commencement of tunnelling requires resolution on a range of matters, including spoil disposal site/s preparatory works and progressing commercial matters • Spoil disposal sites at various stages of approval, with two sites now granted both planning and
Slide 45: West Gate Tunnel Update Video
WEST GATE TUNNEL UPDATE VIDEO Major works continuing • Over 23 million worker hours have been clocked by the workforce to date • Over 1,000 noise wall panels installed to date, representing in excess of 30 per cent of total walls • A three-month summer construction blitz program saw 30,000 tonnes of
Slide 46: WestConnex
WESTCONNEX Transurban is the operator of the WestConnex assets, with an agreement in place through to the end of concession in 2060 Major development completed with additional stages well in hand Integration and operations • Major projects in the network (the M4 widening, New M4 Tunnels and • Assets
Slide 47: WestConnex Sale Process
WESTCONNEX SALE PROCESS Transaction approach1 Party Third State STP • Expressions of Interest have been solicited for the Transaction Formal bid process Offer Offer Completion remaining NSW Government stake and the formal sale phase 2Q 2021 T1 T22 date process is expected to commence shortly • Trans
Slide 48: TCL Investment Proposition
TCL INVESTMENT PROPOSITION SCOTT CHARLTON CHIEF EXECUTIVE OFFICER WITH TOM PIOTROWSKI MARKET ANALYST
Slide 49: Q&A Session Two
Q&A SESSION TWO
Slide 50: Q&A Session Two
Q&A SESSION TWO Scott Charlton Pierce Coffee Michele Huey Michelle Jablko Hugh Wehby Chief Executive President, Group Executive, Chief Financial Group Executive, Officer North America New South Wales Officer Partners, Delivery and Risk TRANSURBAN INVESTOR DAY | 3 MAY 2021 50
Slide 51: Summary
SUMMARY 1 2 3 4 5 6 Strategy tested Positive culture Integrated Robust Opportunities Future state of and resilience and refreshed approach to capital position in core markets mobility presents proven through leadership position ESG working to provides funding for ongoing opportunities COVID-19 Trans
Slide 52: Transurban Investor Day | 3 May 2021
TRANSURBAN INVESTOR DAY | 3 MAY 2021
Slide 53: Supplementary Information
SUPPLEMENTARY INFORMATION
Slide 54: Traffic Update
TRAFFIC UPDATE EMERGENCY STOPPING LANE
Slide 55: Monthly Traffic Performance by Asset
MONTHLY TRAFFIC PERFORMANCE BY ASSET1 Transurban M4 M5 West M7 CCT M2 ED LCT CityLink Logan Gateway Legacy Clem7 GBB AirportlinkM7 A25 95 495 Group 2 30% 28% 24% 20% 23% 22% 21% 20% 20% 18% 16% 15% 14% 14% 10% 13% 13% 13% 11% 4% 9% 4% 3% 8% 3% 5% 6% 5% 5% 1% 1% 1% 0% 0% 4% 3% 0% 0% (1%) (1%) (5%) (1
Slide 56: COVID-19 Restrictions
COVID-19 RESTRICTIONS REGION CURRENT RESTRICTIONS LIMITING MOVEMENT1 OUTLOOK New South Wales Density restrictions eased throughout NSW, with no cap on offices, retail, venues, hospitality, entertainment Limited international travel via travel bubble arrangements. or visitors to homes. All venues mus
Slide 57: Glossary
GLOSSARY TERM DEFINITION TERM DEFINITION 95 95 Express Lanes M8 M8 (previously the New M5) 395 395 Express Lanes MD Maryland, United States of America 495 495 Express Lanes MDOT Maryland Department of Transportation 1H/2H First or second half of a financial year (unless specified otherwise) NA North