Atlas Arteria · ASX:ALX
Atlas Arteria — Macquarie Atlas Roads — H1 2013 Earnings Presentation
40 slides from Atlas Arteria's earnings presentation, Aug 29, 2013
Slide 1: Macquarie Atlas Roads Half Year Results Presentation
MACQUARIE ATLAS ROADS HALF YEAR RESULTS PRESENTATION 30 JUNE 2013 1
Slide 2: Disclaimer
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 manager/adviser of MA
Slide 3: Disclaimer
Disclaimer Hong Kong This document has been prepared and intended to be disposed solely to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong for the purpose of providing preliminary information and does not constitute any offer to the public
Slide 4: Presentation agenda
Presentation agenda 1. Overview 5 2. Financial Performance 8 3. Asset Review 15 4. Questions 29 Appendix 30 4
Slide 5: 1. Overview
1. Overview Peter Trent Chief Executive Officer
Slide 6: 1H 2013 snapshot
1H 2013 snapshot Positive traffic, revenue and EBITDA growth 1H 2013 Statutory results summary Portfolio Results Significant one-off items relating to M6 Toll discontinuation of hedge accounting and deconsolidation Profit after tax : A$1.4bn (1H 2012: A$75.2m loss) Traffic Key assets showing s
Slide 7: 1H 2013 segmented results
1H 2013 segmented results Revenue increased on all portfolio toll roads reflecting a stronger traffic performance and toll increases APRR traffic, revenue and EBITDA all increased on 1H 2012 levels Operating expenses on Dulles Greenway, M6 Toll and Indiana Toll Road affected by various one off c
Slide 8: 2. Financial Performance
2. Financial Performance Mary Nicholson Chief Financial Officer
Slide 9: MQA statutory accounts
MQA statutory accounts Accounting changes flagged in June ASX release Cessation of hedge accounting for M6 Toll swaps (in late April) and deconsolidation of the M6 Toll group (in early June) have resulted in significant one-off items in the statutory accounts Deconsolidation of M6 Toll group from
Slide 10: Consolidated profit & loss account
Consolidated p profit & loss account Statutory accounts – half year ended 30 June 2013 Non- MQA Total MQA Total MQA controlled half year to half year to A$m Corporate M6 Toll assets 30 June 13 30 June 12 Total revenue and other income 0.2 - - 0.2 0.3 Management fees (8.4) - - (8.4) (7.1) Other opera
Slide 11: Consolidated balance sheet
Consolidated balance sheet Statutory accounts – as at 30 June 2013 Non- MQA Total MQA Total MQA controlled as at as at A$m Corporate M6 Toll assets 30 June 13 31 Dec 12 Current assets 17.2 - - 17.2 62.4 Investments in associates - - 803.0 803.0 702.8 Property, plant and equipment - - - - 746.7 Tolli
Slide 12: MQA cash flow summary
MQA cash flow summary Available cash A$m Distribution from Financière Eiffarie (FE) of Opening balance – 1 January 2013 13.7 €14.6m in March 2013 reflecting final payment Distributions from assets 18.5 from APRR 1H 2012 profit (€8.0m received in US ttax refund f d 31 3.1 September 2012) Interest o
Slide 13: MQA dividend
MQA dividend MQA 2H 2013 dividend guidance of 3.3 cents per security Subject to foreign exchange movements and unforeseen events Expect E t to t declare d l in i SSeptember t b andd pay iin early l OOctober t b 100% foreign dividend from MARIL1 Dividend reconciliation A$m Forecast available ca
Slide 14: APRR free cash flow
APRR free cash flow FE distributions, and therefore MQA dividends, reflect only a portion of APRR free cash flow APRR consistently generates cash flow in excess of net profit. The excess is used to fund capex and d bt repayments debt t att the th APRR llevel. l 100% APRR profit is distributed to
Slide 15: 3. Asset Review
3. Asset Review Peter Trent Chief Executive Officer
Slide 16: APRR 1H 2013 results
APRR/Eiffarie APRR 1H 2013 results Traffic +0.2% +0 2% Light vehicle ehicle traffic up p00.5% 5% 10.0bn VKT Heavy vehicle traffic down 1.6% Revenue +1.9% Toll increases implemented on 1 February 2013 €1,001.4m EBITDA1 EBITDA margin flat at 70.4% (vs 70.6% in pcp) impacted by +1.6% higher win
Slide 17: APRR traffic analysis
APRR/Eiffarie APRR traffic analysis Traffic volumes up 0.2% in 1H 2013 Light vehicle traffic positive in both 1Q and 2Q 2013 Heavy vehicle traffic decline is gradually moderating Light vehicles – Quarterly growth on pcp Heavy vehicles – Quarterly growth on pcp 2.0% 2.0% -% -% 1Q 12 2Q 12 3Q 12 4
Slide 18: APRR traffic – Light vehicles
APRR/Eiffarie APRR traffic – Light vehicles Light vehicle traffic has outperformed GDP. Contribution from growth of real household disposable income APRR Light Vehicles and Economic Indicators1,2 110.0 105.0 100.0 95.0 90.0 85 0 85.0 80.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 LV Traffic GDP D
Slide 19: APRR traffic – Heavy vehicles
APRR/Eiffarie APRR traffic – Heavy vehicles Heavy vehicles correlated to French manufacturing. Foreign trade volumes an additional factor APRR Heavy Vehicles and Economic Indicators1,2 110.0 100.0 90.0 80.0 70.0 60.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 HV Traffic Imports Manufacturing 1. Mo
Slide 20: European economic sentiment indicator
APRR/Eiffarie European economic sentiment indicator European economic sentiment has been trending up since late 2012 European Economic Sentiment Indicator1,2 120 HGV decline commences 110 100 90 Improving HGV 80 outlook 70 60 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 E
Slide 21: APRR performance
APRR/Eiffarie APRR performance Growth maintained through economic cycles APRR EBITDA (€m)1 and France GDP growth (%)2 €1,750m , 3.0% €1,500m 1,399 1,428 2.0% 1,326 1,265 €1 250m €1,250m 1,208 1,244 1 0% 1.0% €1,000m -% 9413 974 1,068 888 924 €750m 841 (1 0%) (1.0%) €500m (2.0%) 1H 1H 694 705 €250m (
Slide 22: Financing
APRR/Eiffarie Financing APRR well supported in bond markets APRR Bonds: Mid-Yield to Maturity 6.0% 5.0% 4.0% 2,765 3.0% 2.0% 1.0% 0.0% Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 €700m - 7.5% 7 5% 2015 €1,000m €1 000m - 5.0% 5 0% 2017 €500m - 4.875% 4 875% 2019 €500m
Slide 23: APRR liquidity
APRR/Eiffarie APRR liquidity Strong liquidity position with manageable maturity profile Financing costs expected to trend lower €348m CNA debt repaid in 1H 2013 from cash reserves €300m floating rate notes issued (0.87% margin) due in 2016; applied in July 2013 to prepay €250m loans due 2014 A
Slide 24: APRR cash flow to MQA
APRR/Eiffarie APRR cash flow to MQA Potential to improve overall financing terms over time Simplified holding structure MQA 19.44% of free cash flow HoldCo debt – Margin g 300bp p ((350bp p Feb 2015)) Eiffarie HoldCo o dCo sswap: ap 4.6% 6% fixed ed u until t – Cash sweep: 25% free cash flow1 (HoldC
Slide 25: Looking forward
APRR/Eiffarie Looking forward Management contract Tariff path under existing management contract ends in 2013 Discussions ongoing regarding new management contract Land tax Land tax (operational tax based on revenue and network length) increased by ~€24m p.a. (pre-tax) commencing July 20131
Slide 26: Dulles Greenway 1H 2013 results
Dulles Greenwayy 1H 2013 results Traffic +0.3% 0.3% Reflects emerging improvement impro ement in local economic conditions 46,831 ADT Revenue +1.9% Toll increases implemented on 22 January 2013 US$36.9m EBITDA1 -0.7% EBITDA lower due to higher g operating p g expenses p which include US$28.8m
Slide 27: Dulles Greenway Other developments
Dulles Greenwayy Other developments Dulles Greenway corridor Base traffic continues to show signs of emerging growth — Urban development in Loudoun county continuing – positive for long term traffic trends Commonwealth of Virginia Reported intention of Commonwealth of Virginia to consider a purc
Slide 28: Other assets
Other assets 1H 2013 results Assets Traffic Revenue EBITDA Comments Traffic performance was higher in 1H 2013 reflecting the benefit of road works on competing sections of M6 Toll the M6 motorway which is expected to continue +12.1% +12.7% +8.8% throughout 2013. New toll rates implemented on 1 Janua
Slide 29: 4. Questions
4. Questions Q
Slide 30: Appendix
Appendix pp
Slide 31: Cash flow: APRR to MQA shareholders
APRR/Eiffarie Cash flow: APRR to MQA shareholders Cash flow: APRR to MQA shareholders (€m) Eiffarie/FE 1H 2013 APRR dividend A 188 add APRR tax instalments to FE B 125 less Other1 C (18) less Eiffarie net interest D (101) less FE tax payments/provisions E (38) Distributable cash F=A+B–C–D–E 156 less
Slide 32: MQA free cash flow
APRR/Eiffarie MQA free cash flow Cash flow: APRR to MQA shareholders FY 2012 APRR free cash flow (€m) 871 Eiffarie net interest (€m) (184) Eiffarie opex1 (€m) (1) Tax grouping (€m) 174 Consolidated free cash flow (€m) 859 MQA’s proportionate share (19.44%) (€m) 167 MQA’s proportionate share in A$ (1
Slide 33: APRR capital expenditure
APRR/Eiffarie APRR capital expenditure Since 2006, ~€2.75bn has been spent to grow, improve and maintain the network APRR historical capital expenditure (€m) €600m €500m 24 81 €400m 45 159 €300m 187 343 27 44 303 54 69 215 €200m 75 171 165 104 123 168 66 139 €100m 100 110 122 115 102 115 108 94 57 7
Slide 34: APRR operations
APRR/Eiffarie APRR operations EBITDA margin at 70.0% Operating expenses (ex operating taxes) broadly flat since 2006 €800m 80.0% 67.8% 68.0% 68.4% 69.2% 70.0% 67.0% 64.0% €600m 60.0% 1 232 229 231 236 240 264 258 €400m 40.0% 153 162 149 139 156 140 133 €200m 20.0% 209 209 210 220 218 219 220 €0m -
Slide 35: MQA statutory accounts
MQA statutory accounts Statutory accounts for 1H 2013 shaped by deconsolidation of the M6 Toll Statutory accounting MQA Q ceased consolidating g the M6 Toll in June 2013 MQA equity accounts its non-controlled assets: APRR, Dulles Greenway, Chicago Skyway, Indiana Toll Road, Warnow Tunnel and, si
Slide 36: Statutory accounts vs Management Information Report (MIR)
Statutory accounts vs Management Information Report (MIR) St t t Statutory resultlt for f the th period i d P Proportionally ti ll consolidated lid t d financial fi i l performance f M6 Toll results from 1 January 2013 to 4 June 2013 are shown as Aggregation of operating results of proportionate int
Slide 37: Proportionately consolidated performance
Proportionately consolidated performance Actual Pro Forma Actual 6 months ended 6 months ended Change vs 6 months ended A$m 30 Jun 13 30 Jun 121, 2 pcp 30 Jun 122 Operating revenue 354.2 341.5 3.7% 330.8 Operating expenses (94.9) (89.0) 6.6% (85.9) EBITDA from road assets 259.3 252.5 2.7% 244.8 EBIT
Slide 38: Reconciliation
Reconciliation Statutory results to proportionate earnings A$ A$m 6 months th ended d d 6 months th ended d d 30 Jun 13 30 Jun 12 Gain/(loss) attributable to MQA security holders 1,403.0 (75.2) M6 Toll related adjustments included within profit/(loss) from deconsolidated operations1: Non-cash financ
Slide 39: Reconciliation
Reconciliation Cash flow and cash balance A$m $ 6 months ended 6 months ended 30 Jun 13 30 Jun 12 Net statutory operating cash flows 40.9 26.7 M6 Toll related adjustments: T ll revenue received Toll i d (45 4) (45.4) (49 2) (49.2) Interest income received (0.2) (1.5) Net indirect taxes paid 7.9 8.0
Slide 40: Security price performance
Security price performance 1H 2013 security price increase has reflected EUR appreciation against the AUD MQA security price (A$) vs EUR/AUD $2 50 $2.50 16 1.6 $2.25 1.5 $2.00 1.4 $1 75 $1.75 13 1.3 $1.50 1.2 $1.25 1.1 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13 Jul 13 MQA (LHS) EUR/AUD (RHS) 4
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