Irb Infrastructure Developers Limited · NSE:IRB

Irb Infrastructure Developers — Q4 FY2023 Earnings Presentation

58 slides from Irb Infrastructure Developers's earnings presentation, May 2023

  1. Slide 1: Investor Presentation May 2023

    Investor Presentation May 2023 India’s First Multi-National Infrastructure Company in the Highways Sector Press Release – Preferential Allotment October 2021

  2. Slide 2: Table of Contents

    Table of Contents Financial Highlights Page 2 Result Highlights Page 4 Business Overview Page 9 IRB Parent Overview Page 25 Private InvIT Overview Page 33 Public InvIT Overview Page 39 Appendix – Additional Financial Info Page 46 Appendix II – Sector Overview Page 50

  3. Slide 3: Financial Highlights for FY23

    Financial Highlights for FY23 • In general, WPI linked toll roads provides • Strong financial position: Net Debt • IRB member of India Global Compact a natural hedge against interest rate 100.74 Bn, 0.75x Net Debt/Equity, with UN Since July 2022 hikes (e.g., Ahmedabad Vadodara tariff strong liquidit

  4. Slide 4: Result Highlights

    Result Highlights Private & Confidential

  5. Slide 5: Financial Summary (Quarterly YoY)

    Financial Summary (Quarterly YoY) INR in Million Total all segments Construction Segment BOT Segment Particulars Q4FY23 Q4FY22 Q4FY23 Q4FY22 Q4FY23 Q4FY22 Revenue 16,989 16,827 11,514 11,727 5,475 5,101 EBITDA 8,377 8,907 3,325 4,268 5,052 4,639 EBITDA margin 49% 53% 29% 36% 92% 91% Financial expens

  6. Slide 6: Financial Summary (Yearly)

    Financial Summary (Yearly) INR in Million Total all segments Construction Segment BOT Segment Particulars FY23 FY22 FY23 FY22 FY23 FY22 Revenue 67,033 63,554 45,804 44,786 21,229 18,768 EBITDA 35,307 33,492 15,817 16,418 19,490 17,075 EBITDA margin 53% 53% 35% 37% 92% 91% Financial expenses 15,146 1

  7. Slide 7: Financial Summary – Net cash for FY23

    Financial Summary – Net cash for FY23 * Aggregate dividend declared for FY23 is Rs. 1.2 Bn 6

  8. Slide 8: Consolidated Financials: Strong Track Record

    Consolidated Financials: Strong Track Record REVENUE (INR MN) EBITDA & MARGIN (INR MN) 53% 53% 45% 45% 49% 69,026 70,472 63,554 67,033 31,664 33,492 35,307 31,329 54,875 27,016 53% 49% 16,827 16,989 8,907 8,377 FY 2019 FY 2020* FY 2021* FY 2022 FY 2023 Q4FY22 Q4FY23 FY 2019 FY 2020* FY 2021* FY 2022

  9. Slide 9: Business Overview

    Overview Business Private & Confidential

  10. Slide 10: Integrated Highway Developer Connecting India by Developing World Class Highway Infrastructure

    Integrated Highway Developer Connecting India by Developing World Class Highway Infrastructure Pan India presence c. 22 years c. 20% INR 700 bn+ Weighted Of Golden 11 Highway asset 13,739 lane average Quadrilateral States in India base, one of the KM residual owned and where assets largest in India

  11. Slide 11: Owns and Manages c. 14,000 Lane KM of Roads across States in India

    Owns and Manages c. 14,000 Lane KM of Roads across 11 States in India India’s leading portfolio of road assets (lane KMs)1 Operational Under construction 13,739 2,161 8,400 7,903 6,457 3,085 5,362 11,578 4,400 8,400 3,923 3,249 3,232 4,510 520 598 2,361 1,998 4,818 1,852 490 4,400 2,534 2,729 2,633

  12. Slide 12: Fully Integrated Player with In-House Design, Construction, Operations and Maintenance Capabilities

    Fully Integrated Player with In-House Design, Construction, Operations and Maintenance Capabilities  Highly evolved design capabilities  In-house capabilities, with a pool of through 40+ years of experience expert workforce, to carry out EPC  Use of high-grade polymer modified (Construction) and

  13. Slide 13: Efficient O&M Practices, Employing Latest Technology, With a Strong Focus on ESG

    Efficient O&M Practices, Employing Latest Technology, With a Strong Focus on ESG Technology driven maintenance regime  Site level data capture  Predictive analytics  Timely preventive & corrective maintenance  Benchmarking with global standards Real time operations, monitoring & control ESG comp

  14. Slide 14: Supported by Marquee Financial and Strategic Investors

    Supported by Marquee Financial and Strategic Investors The largest equity fund raise by a listed Indian infrastructure developer in the roads and highways sector Ownership structure post transaction Access to technical expertise, global experience and long term capital 1 ‒ Cintra brings in 50+ years

  15. Slide 15: Only Integrated Development Platform in India Catering to Shareholders with Diverse Risk Appetite

    Only Integrated Development Platform in India Catering to Shareholders with Diverse Risk Appetite Distribution1 Strategy: To Offer HAM Distribution1 assets to Public InvIT after Construction completion Holdco 16% Margin + / - WC 100% 100% BOT / TOT / HAM CONSTRUCTION Private InvIT (IRB 51%, 5 Assets

  16. Slide 16: Approach adopted by analysts for valuation of Integrated Developer Model

    Approach adopted by analysts for valuation of Integrated Developer Model Particulars Methodology Value of concession Business DCF of FCFE over concession life Value of Construction Business PE Multiple or EV/EBIDTA Value of Non core assets (Land bank and airport) Multiple on Investment Total Value o

  17. Slide 17: Value evolution for a typical BOT Concession over its life cycle

    Value evolution for a typical BOT Concession over its life cycle 16

  18. Slide 18: Current Ratings for Long Term Credit Facilities

    Current Ratings for Long Term Credit Facilities IRB Infrastructure Developers Modern Road Makers Private 1 2 Limited Limited IND AA- / Stable CARE AA- / Stable Crisil AA- / Stable IRB MP Expressway Private Meerut Budaun 3 4 Expressway Limited Limited Ind AA / Stable Ind A- / Stable Pathankot Mandi I

  19. Slide 19: Share Price Performance

    Share Price Performance DEC 2021: Cintra & GIC close IRB transaction OCT 2022: Sale of VK1 IRB share price (rebased to 100) HAM asset and achieved 600.0 DEC 2021: IRB is awarded Ganga Expressway Appointed date for FEB 2021: Raised INR APR 2021: Awarded 1 21.9 bn through NCD new HAM project and Ganga

  20. Slide 20: Projects, Spread Across India, for Optimal Risk – Return Mix

    Strategic Focus: Bid for a Diversified Portfolio of BOT, TOT and HAM Projects, Spread Across India, for Optimal Risk – Return Mix 1 Bid for new assets 2 Diversify presence  NHAI expected to award HAM projects to the tune of INR 4,000 bn, BOT projects worth INR  Strategically expand its presence ou

  21. Slide 21: Constantly Evolving EPC Capabilities: Moving Up the Project Complexity Value Chain

    Constantly Evolving EPC Capabilities: Moving Up the Project Complexity Value Chain, Successfully Raising Funds at Crucial Junctures 1977 1995 2004 2008 2016 2017 2018 2020 2021 2023 Length: Length: 1,168 1,234 LKM LKM Cost: INR Cost: INR 11 bn Raised INR 90 bn Raised 9.45 bn Length: INR 50 bn throug

  22. Slide 22: Strong Focus on Protecting the Environment and Giving Back to the Community

    Strong Focus on Protecting the Environment and Giving Back to the Community Ferrovial is a sustainability champion, ranking highly in various indices… IRB has a strong focus on environment, sustainability and community, which is expected to be further strengthened through Ferrovial’s expertise  Fer

  23. Slide 23: Board Driven Robust Governance Policies

    Board Driven Robust Governance Policies Policies Committees  Environment policy  Corporate Social Responsibility Committee  Code of Conduct  Risk Management Committee  ESG Committee of Management Assurance  ESG Commitments  Human rights Policy  Corporate Social Responsibility Policy  Health

  24. Slide 24: Business Responsibility and Sustainability Reporting, Mandatory for Listed Companies FY23 Onward

    Business Responsibility and Sustainability Reporting, Mandatory for Listed Companies FY23 Onward1, to Bring About Reporting Transparency Business responsibility and sustainability reporting (BRSR) is intended towards having quantitative and standardized disclosures on ESG parameters, to enable compa

  25. Slide 25: IRB Parent Overview

    Overview IRB Parent Private & Confidential

  26. Slide 26: Strong In-house Project Design, Execution and Maintenance Capabilities

    Strong In-house Project Design, Execution and Maintenance Capabilities Strong construction track Efficient project execution Ability to independently record capabilities Large equipment bank bid for large contracts In-house O&M capabilities  Access to best global  One of the largest fleet of  Exp

  27. Slide 27: IRB is Well Poised to Maintain Margins with Adequate Escalation Provisions for Raw Material Prices

    IRB is Well Poised to Maintain Margins with Adequate Escalation Provisions for Raw Material Prices Cement price (INR per bag) 273 293 266 258 246 246 246 250 250 242 246 246 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Reinforcement steel price (INR per MT)  T

  28. Slide 28: WPI Linked Toll Rates Provide Protection to Toll Cash Flows in an Inflationary Environment

    WPI1 Linked Toll Rates Provide Protection to Toll Cash Flows in an Inflationary Environment with Increasing Interest Rates  Toll rates are linked to inflation  For NHAI projects that were bid for after 2008, toll rate is revised annually in April at 3% fixed rate, plus 40% of change in WPI for Dec

  29. Slide 29: Healthy Mix of BOT, TOT and HAM Projects

    Healthy Mix of BOT, TOT and HAM Projects Original S. Project cost Lane # of Project Counterparty State Concession Status No. (INR mn) KMs Lanes ( in Years) 3 BOT 1 Ahmedabad Vadodara NHAI Gujarat 48,800 987 6 25 Tolling start: January 1, 2013 projects Received Appointed Date as 2 Ganga Expressway –

  30. Slide 30: Mumbai Pune TOT – A Crown Jewel in IRB's Portfolio

    Mumbai Pune TOT – A Crown Jewel in IRB’s Portfolio One of the busiest highway corridors in India which is a part of the Golden Quadrilateral on the Mumbai-Chennai arm Project highlights Project snapshot Project snapshot  Tolling operations, maintenance and transfer of Road  YCEW - 94 Km , NH-48 –

  31. Slide 31: Nehru ORR TOT – New addition in IRB's Portfolio

    Nehru ORR TOT – New addition in IRB’s Portfolio 158 km, 8 lane access-controlled corridor in one of the youngest state of our Country Project highlights Project snapshot Project snapshot Road  158 km (1,264 lane kms)  Tolling, Operation, Maintenance & Transfer of length Overview Nehru Outer Ring R

  32. Slide 32: BOT Toll Revenue Comparative – IRB Projects

    BOT Toll Revenue Comparative – IRB Projects Amount in INR mn MUMBAI - PUNE ** Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Jun 2,309 2,470 1,167 2,373 3,606 52.0% Sept 2,148 939 2,191 3,055 3,347 9.6% Dec 2,372 - 3,106 3,462 3,687 6.5% Mar 2,354 621 3,221 3,342 3,605 7.9% Total 9,182

  33. Slide 33: IRB Private InvIT Overview

    InvIT IRB Private Private & Confidential 32

  34. Slide 34: Private InvIT: IRB Infrastructure Trust (Portfolio of 13 Assets)

    Private InvIT: IRB Infrastructure Trust (Portfolio of 13 Assets) Asset location Asset overview Project Sr. cost Lane Project State Status No. (INR KM mn) 1 Goa Kundapur Karnataka 34,770 758 PCOD achieved Haryana 2 Solapur Yedeshi Maharashtra 15,900 395 COD achieved 3 Yedeshi Aurangabad Maharashtra 4

  35. Slide 35: Strong Recovery in Toll Collection Across Projects

    Strong Recovery in Toll Collection Across Projects Daily toll collection (INR mn) 62.3 63.2 65.0 62.3 61.4 55.1 57.2 57.0 53.6 52.5 53.0 51.9 44.0 44.5 40.0 39.5 32.3 32.3 35.3 34.6 27.3 27.7 30.0 20.0 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY22 FY23 Total toll collection (INR mn) 5,655 186

  36. Slide 36: BOT Toll Revenue Comparative – Private InvIT Projects

    BOT Toll Revenue Comparative – Private InvIT Projects ** Amount in INR mn Gulabpura Chittorgarh Yedeshi Aurangabad Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Jun 533 419 217 329 822 149.6% Jun - 288 153 346 574 65.8% Sept

  37. Slide 37: BOT Toll Revenue Comparative – Private InvIT Projects

    BOT Toll Revenue Comparative – Private InvIT Projects Amount in INR mn Agra Etawah Kishangarh Gulabpura Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Jun 231 206 150 419 550 31.3% Jun 344 294 146 209 303 44.9% Sept 204 191 2

  38. Slide 38: BOT Toll Revenue Comparative – Private InvIT Projects

    BOT Toll Revenue Comparative – Private InvIT Projects Amount in INR mn Karwar Kundapura Palsit Dankuni Quarter 2018-19 2019-20 2020-21* 2021-22* 2022-23 % Variance Quarter 2021-22 2022-23# % Variance Jun - - 93 156 298 91.7% Jun - 545 - Sept - - 156 197 262 32.8% Sept - 498 - Dec - - 218 250 326 30.

  39. Slide 39: IRB Public InvIT Overview

    InvIT IRB Public Private & Confidential

  40. Slide 40: Structure of Public InvIT

    Structure of Public InvIT Fund structure Unit holders holding more than 1% % S. No. Unit holder Investor in units of trust holding IRB INFRASTRUCTURE DEVELOPERS 1 15.97 LIMITED Quarterly distribution 2 GOVERNMENT OF SINGAPORE 7.58 ADITYA BIRLA SUN LIFE TRUSTEE 3 PRIVATE LIMITED A/C ADITYA BIRLA SUN

  41. Slide 41: Public InvIT (Portfolio of 6 Assets)

    Public InvIT (Portfolio of 6 Assets)  Listed in May-2017 with initial portfolio of six operational assets; seventh asset was transferred in Sep-2017  Two assets were successfully completed and handed back to the authority. One HAM asset acquired in Oct-2022  BOT-Toll assets with proven traffic hi

  42. Slide 42: Strong Recovery in Toll Collection Across Projects

    Strong Recovery in Toll Collection Across Projects Daily toll collection (INR mn) * 40.0 25.8 27.4 25.9 27.0 26.2 25.6 25.7 24.2 24.2 24.8 25.6 23.5 20.0 22.8 23.9 24.1 21.1 16.8 17.0 17.4 17.9 17.1 15.8 13.7 10.3 - Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar FY22 FY2023 Total toll collection (I

  43. Slide 43: Financial Highlights

    Financial Highlights Gross income1 (INR mn) EBITDA (INR mn) 81% 80% 80% 83% 80% 12,701 14,003 12,334 11,609 11,584 10,386 9,989 10,218 9,343 8,279 FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23 EBITDA margin Net distributable cash flow (INR mn) Net debt (INR mn) 0.2x 0.2x 0.2x 0.2x 0.3x 7,639 22,

  44. Slide 44: Unit Price Performance Since Inception

    Unit Price Performance Since Inception Price (rebased to 100) Distribution per unit (DPU) 300.0 INR FY18 FY19 FY20 FY21 FY22 FY23 DPU 10.6 12.3 10.0 8.5 9.0 8.0 Yield1 11.5% 16.4% 17.6% 20.8% 16.1% 13.4% 200.0 109% 100.0 17% - May-20 Aug-20 Nov-20 Feb-21 May-21 Aug-21 Nov-21 Feb-22 May-22 Aug-22 Nov

  45. Slide 45: Key Takeaways

    Key Takeaways 1 Large pipeline of future growth with upcoming national & state highway bids 2 Proven credentials in the highways space Significant improvement in financial metrics post GIC and Cintra –transaction ; further supported by 3 monetization of VK1 HAM Asset 4 Access to complementary capabi

  46. Slide 46: Appendix I – Additional Financial Information

    Appendix I Additional Financial Information Private & Confidential

  47. Slide 47: Financial Summary (Quarterly - QoQ)

    Financial Summary (Quarterly - QoQ) INR in Million Total all segments Construction Segment BOT Segment Particulars Q4FY23 Q3FY23 Q4FY23 Q3FY23 Q4FY23 Q3FY23 Revenue 16,989 15,702 11,514 10,165 5,475 5,537 EBITDA 8,377 8,006 3,325 2,910 5,052 5,097 EBITDA margin 49% 51% 29% 29% 92% 92% Financial expe

  48. Slide 48: Offshore Bond Issue – Covenant Structure

    Offshore Bond Issue – Covenant Structure Surplus IRB 100% Investments Business segment I 100% 51% 49% GIC Toll & HAM Private InvIT affiliates Business segment II 16% Construction Public InvIT Mumbai Pune TOT Engineering, construction, operation and maintenance of Ahd Vadodara BOT Key highlights Proj

  49. Slide 49: Leverage Summary – Bond Covenant

    Leverage Summary – Bond Covenant INR in Mn TTM ending TTM ending TTM ending Particulars March 31, 2023 March 31, 2022 March 31, 2021 Business Segment I: Toll & HAM Revenues 20,729 18,277 16,112 EBITDA 17,291 16,083 14,532 Gross Debt 90,859 102,541 97,711 Business Segment II : Construction + Surplus

  50. Slide 50: Appendix II – Sector Overview

    Appendix II Sector Overview Private & Confidential

  51. Slide 51: Indian Road Sector Outlook

    Indian Road Sector Outlook Healthy awarding activity seen during last 2-3 years While pace of construction slightly reduced in FY23, Consistent increase in Budgetary estimated to be maintained going forward.. improvement is expected going forward allocation 00’ KM KM 13,298 13,000 Capital Outlay for

  52. Slide 52: Attractive Sector with Strong Underlying Fundamentals

    Attractive Sector with Strong Underlying Fundamentals Indian highways exhibit strong fundamentals, secular growth trends and stable regulations  Growing urbanization and rising personal disposable income Bharatmala Pariyojana Phase 1 Secular growth  Amongst the fastest growing vehicle markets  In

  53. Slide 53: Roads Sector has a Significant Share in Government's Infrastructure Development Pipeline

    Roads Sector has a Significant Share in Government’s Infrastructure Development Pipeline National Monetization Pipeline PM Gati Shakti Master Plan  Monetization of INR 6 tn of brownfield assets, with stable revenue streams,  Construction of INR 111 tn of greenfield assets in the core infrastructur

  54. Slide 54: Regulatory Overview

    Regulatory Overview Variety of PPP Models with a highly evolved & stable regulatory regime backed by well established contract structure through NHAI Model Concession Agreement NHAI has successfully attracted investments in the roads sector through and array of PPP models Build Operate Transfer (BOT

  55. Slide 55: Bankable Concession Terms

    Bankable Concession Terms Key positive of Indian Roads & Highways sector Typical terms Details  NHAI is an agency appointed by the federal government for development of roads and highways in India NHAI as counterparty  NHAI is a quasi-sovereign entity with a ‘AAA’ rating  Well-funded by federal g

  56. Slide 56: While the Sector has Witnessed Subdued Bid Activity Recently, Outlook Remains Positive

    While the Sector has Witnessed Subdued Bid Activity Recently, Outlook Remains Positive Key sector trends 1 Weak bidding activity improved in FY23 2 Increased competition intensity 3 Asset Monetization Pipeline: A mixed bag Bids tendered for road projects (INR bn)  FY23 witnessed continued  Upto FY

  57. Slide 57: Disclaimer

    Disclaimer Except for the historical information contained herein, statements in this presentation and any subsequent discussions, which include words or phrases such as ‘will’, ‘aim’, ‘will likely result’, ‘would’, ‘believe’, ‘may’, ‘expect’, ‘will continue’, ‘anticipate’, estimate’, ‘intend’, ‘pla

  58. Slide 58: Thank You

    THANK YOU For Further Information, Kindly Contact : Investor relations : Investors.relations@irb.co.in 57

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