Atlas Arteria · ASX:ALX
Atlas Arteria — Macquarie Atlas Roads — FY2016 Earnings Presentation
34 slides from Atlas Arteria's earnings presentation, Feb 23, 2017
Slide 1: Macquarie Atlas Roads 2016 Full Year Results Presentation
Macquarie Atlas Roads 2016 Full Year Results Presentation 23 February 2017 Photo: APRR/Leimdorfer Gilles
Slide 2: Important notice and disclaimer
Important notice and 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
Slide 3: Important notice and disclaimer
Important notice and disclaimer Japan These materials have been prepared solely for qualified institutional investors in Japan as defined under the Financial Instruments and Exchange Act of Japan (FIEA). They do not constitute an offer of securities for sale in Japan and no registration statement ha
Slide 4: Contents
Contents 01 Overview 4 Peter Trent, Chief Executive Officer 02 Financial Performance 7 Mark Goodrick, Chief Financial Officer 03 Asset Review 12 Peter Trent, Chief Executive Officer MACQUARIE ATLAS ROADS PAGE 3
Slide 5: Overview
1 Overview Peter Trent Chief Executive Officer MACQUARIE ATLAS ROADS
Slide 6: 2016 highlights
2016 highlights MQA’s portfolio delivered an improved performance in 20161 EBITDA Strong asset performance during 2016 • 3.7% weighted average traffic growth across portfolio Revenue 6.3% • Continued margin improvement through operational efficiencies 5.4% • Disciplined capital management at portfol
Slide 7: 2016 segmented results
2016 segmented results Positive growth in traffic, revenue and EBITDA across all assets during 20161 APRR Dulles Greenway Warnow Tunnel ▲6.0% ▲8.8%2 ▲5.1%3 ▲5.1% EBITDA ▲7.8% EBITDA ▲6.3% EBITDA ▲3.7% Revenue ▲4.3% Revenue ▲1.6% Revenue Traffic Traffic Traffic Network traffic growth continues to
Slide 8: Financial Performance
2 Financial Performance Mark Goodrick Chief Financial Officer MACQUARIE ATLAS ROADS
Slide 9: Consolidated income statement
Consolidated income statement Statutory accounts Year ended Year ended Revenue includes M6 Toll management fees, A$m 31 Dec 16 31 Dec 15 Warnow Tunnel services fees, interest income and the reversal of the impairment recorded in Revenue 70.6 2.2 2011 relating to Dulles Greenway Share of net profit
Slide 10: Consolidated balance sheet
Consolidated balance sheet Statutory accounts As at As at Current assets are mainly comprised of cash A$m 31 Dec 16 31 Dec 15 Investments in associates includes APRR and Current assets 224.2 83.6 Dulles Greenway accounted for using the equity method including reversal of Dulles Greenway Investme
Slide 11: Cash flow summary
Cash flow summary Year to Year to US$103.9m received following Chicago Skyway Available cash (A$m) 31 Dec 16 31 Dec 15 sale Opening balance – 1 January 65.4 30.1 Distributions from Financière Eiffarie (FE) of Proceeds received from sale of Chicago Skyway 137.3 - €42.2m in March 2016 and €41.8m i
Slide 12: MQA distributions
MQA distributions 1H17 distribution guidance 10.0 cps MQA Distributions (cps) Expect to declare in late March 2017 with payment in early April following the receipt of ~€54m from FE in March 2017 Paid Guidance Wholly from MARIL, anticipated to include foreign dividend and capital return componen
Slide 13: Asset Review
3 Asset Review Peter Trent Chief Executive Officer MACQUARIE ATLAS ROADS
Slide 14: APRR: 2016 results
APRR 2016 results Strong operating performance resulting from continued growth across light and heavy vehicle traffic supplemented by the annual February 2016 toll increases 23.1bn VKT Light Vehicles Heavy Vehicles VTKm VTKm 20,000 3,500 +4.5% Traffic +3.7% +3.6% 19,500 3,400 €2,327.7m 19,000 3,300
Slide 15: APRR: Traffic correlation
APRR Traffic correlation Light vehicle traffic currently trending above growth in real household disposable income Heavy vehicle traffic remains correlated to French manufacturing and imports Light Vehicles and Economic Indicators1,2 Heavy Vehicles and Economic Indicators1,2 115 120 115 110 110 105
Slide 16: APRR: Financial performance
APRR Financial performance Continued EBITDA margin improvement 2016 Revenue Segmentation APRR Financial Performance2 80.0% €3,000m 70.7% 71.8% 72.4% 69.2% 70.0% 70.3% 2,328 €2,500m Light Vehicles 2,214 2,099 2,149 65% 60.0% 2,022 2,039 643 €2,000m 629 625 611 624 623 Other1 40.0% €1,500m 3% €1,000m
Slide 17: APRR: Stable, resilient earnings growth
APRR Stable, resilient earnings growth Record EBITDA achieved in 2016, displaying continued resilience through economic cycles APRR EBITDA1 and France GDP Growth2 €1,750m 1,685 6.0% 1,589 1,520 €1,500m 1,475 1,399 1,428 4.0% 1,326 1,265 €1,250m 1,208 1,244 1,068 2.0% €1,000m 0.0% €750m (2.0%) €500m
Slide 18: APRR: Operations
APRR Operations Improving operations through active management in 2016 Harnessing Technology In-Principle Agreement Customers and Employees 97.5% of tolls collected via automated €222 million investment plan agreed Customer satisfaction ratings >95% transactions during 2016 in January 2017 con
Slide 19: APRR: Profitability
APRR Profitability Strong growth in profit, up 25%, driven predominantly by higher revenue and net interest savings APRR Profit Waterfall (€m) French Tax Update3 11 27 2 44 10 671 Reduction in French corporate income tax rate from 33.3% to 28.0% by 114 20204 – Including the 3.3% social 10 44 9 539
Slide 20: APRR: Financing costs
APRR Financing costs APRR net interest decreased €44m in 2016, representing 16% reduction from pcp APRR credit ratings updated by both Standard & Poor’s (S&P) and Fitch during 2016: – S&P upgraded rating from BBB+ (Stable Outlook) to A- (Stable Outlook) in November – Fitch revised rating from BBB+
Slide 21: APRR: Bond issues
APRR Bond issues APRR benefited from favourable bond market conditions during 2016, issuing €1.7bn of bonds under its EMTN program June 2016: €700m issued with a 1.125% coupon at 99.201% of par; January 2026 maturity November 2016: €500m issued with a 1.25% coupon at 98.764% of par; January 2027
Slide 22: ADELAC acquisition
APRR ADELAC acquisition MQA increased its indirect interest in ADELAC from 10.04% to 19.74% through MAF2 in November The Acquisition • 19.6km commuter road between Annecy in eastern Ownership structure France and Geneva in Switzerland MQA Other • Concession expiry in December 2060 40.3% 59.7% • Exis
Slide 23: Dulles Greenway: 2016 results
Dulles Greenway 2016 results Strong traffic performance underpinned by continued corridor population growth and development 53,260 ADT ADT Workday Traffic ADT Non-Workday Traffic 64,000 34,000 +5.3% +1.6% Traffic +4.3% 62,000 33,000 32,000 60,000 US$91.7m 31,000 58,000 30,000 Revenue +7.8% 56,000 29
Slide 24: Dulles Greenway: Traffic segmentation
Dulles Greenway Traffic segmentation Higher growth experienced during workdays indicative of increased commuter usage and continued corridor growth 110 Dulles Greenway Traffic Segmentation1 108 Workday 106 Non-workday 104 Total 102 100 98 2016 growth vs pcp 96 • Workday: 5.3% 94 • Non-workday: 1.6%
Slide 25: Dulles Greenway: Performance
Dulles Greenway Performance Adjusted EBITDA growth of 8.8%1, reflecting traffic growth, toll increases and disciplined cost control Progressive traffic recovery since 2012; 4 year traffic CAGR of 3.5% – Average daily traffic in 2016 surpassed levels achieved in 2008 and 2009 During 2016, an exte
Slide 26: Dulles Greenway: Operations
Dulles Greenway Operations Commitment to enhancing operations and service Harnessing Technology Operational Improvement People and Safety 93.0% non-cash transactions in 2016, Improved EBITDA margin at 80.9%1 Dedicated Virginia State Troopers up 1% on pcp who collaborate to maximise safety As
Slide 27: Warnow Tunnel: 2016 results
Warnow Tunnel 2016 results1 Warnow Tunnel continues to experience positive growth, with record traffic and EBITDA in 2016 18 Financial performance (€m) vs Traffic (ADT) 14,000 11,537 ADT 16 11,358 11,537 11,272 12,000 10,738 10,917 Traffic +1.6% 14 10,281 12 10,000 10.7 10.1 €10.7m 10 8.8 9.0 9.5 8.
Slide 28: Summary
Summary MQA continues to successfully deliver on its strategy to increase returns to securityholders Positive Active Disciplined Aim to grow total Growth asset operational capital securityholder opportunities performance management management returns Growth in traffic, Ongoing cost control €1.
Slide 29: Questions
4 Questions MACQUARIE ATLAS ROADS
Slide 30: Appendix
A Appendix MACQUARIE ATLAS ROADS
Slide 31: Cash flow: APRR to MQA securityholders
Cash flow: APRR to MQA securityholders Cash flow: APRR to Eiffage and MAF2 shareholders Eiffarie/FE/MAF2 (€m) (100%) 1H15 2H15 1H16 2H16 APRR dividend 180 245 287 6401 add APRR tax instalments to FE 181 176 183 159 add Other2 413 (0) 0 (128)4 less Eiffarie net interest (93) (87) (86) (88) less FE ta
Slide 32: APRR free cash flow
APRR free cash flow FE distributions, and therefore MQA distributions, do not reflect all of APRR free cash flow APRR consistently generates cash flow in excess of net profit. The excess is used to fund capex and debt repayments at the APRR level 100% of APRR profit is distributed to Eiffarie, w
Slide 33: MQA statutory accounts
MQA statutory accounts Statutory accounts for the year ended 31 December 2016 Statutory accounting MQA equity accounts all assets All assets are non-controlled assets Equity accounting Initially recognise assets at acquisition value1 Income Statement: recognise share of accounting profits/lo
Slide 34: Proportionately consolidated financial performance
Proportionately consolidated financial performance Actual Pro forma Actual year ended year ended year ended A$m 31 Dec 161 31 Dec 151,2 Change on pcp3 31 Dec 154 Proportionate revenue 770.3 731.0 5.4% 727.2 Proportionate operating expenses5 (207.9) (201.7) (3.1%) (203.4) Proportionate EBITDA from as