Atlas Arteria · ASX:ALX
Atlas Arteria — Macquarie Atlas Roads — Macquarie Australia Conference 2012
29 slides from Atlas Arteria's conference presentation, May 2012
Slide 1: Macquarie Atlas Roads - Macquarie Australia Conference May 2012
MACQUARIE ATLAS ROADS Macquarie Australia Conference May 2012 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. APRR/Eiffarie 10 3. Dulles Greenway 20 4. Outlook 27 5. Questions 29 4
Slide 5: Overview
Overview Macquarie Atlas Roads (MQA) is a global toll road operator and developer Market Capitalisation1 $768,382,728 ASX Ranking Top 200 Number of toll road investments 6 Weighted average length of concession life remaining2 30 years Performance (12 months to 31 December 2011)3 - Traffic (0.7%) - R
Slide 6: Background
Background MQA was created out of the restructure of Macquarie Infrastructure Group MQA assets1 comprise those perceived to require substantial operational and financial management to maximise value 1. MQA holds various economic interests in the assets shown on the map 6
Slide 7: Strategy of value recovery
Strategy of value recovery MQA to commence dividend payments1 Manage debt maturities over time / de de-risk risk assets Explore p and maximise value byy way y of sale or securing dividend Deliver growth in the existing portfolio Holding Structure Individual asset risk quarantined from remaining port
Slide 8: Structure
Structure Protects asset values and is integral to MQA’s MQA s strategy of value recovery MQA has no corporate level debt and A$16.1m in available cash1 E h assett is Each i iin a separate t holding h ldi company structure t t All asset level debt is project finance, with no recourse to MQA or
Slide 9: Value proposition
Value proposition MQA is an investment vehicle for APRR/Eiffarie and Dulles Greenway plus additional value from other assets MQA = APRR/Eiffarie + Dulles Greenway + Other assets APRR/Eiffarie is MQA’s largest and most valuable asset — Refinancing (completed Feb 2012) expected to unlock long-term d
Slide 10: 2. APRR/Eiffarie
2. APRR/Eiffarie
Slide 11: APRR overview
APRR overview Europe’s Europe s 4th largest motorway company operates a motorway network of almost 2,300km MQA ownership: p ~19.4%1 Remaining concession life of 21 years Regulated R l t d ttollll iincreases: — 2011-2013: annual tariff increase of 85% CPI ex tobacco plus 0.5% under Contrats de
Slide 12: APRR
APRR Mature network of 50 years and close to completion Additional 18km to be opened around 2016 2011 Network length: 2,264km 1961 SAPL established to build and 1994 operate A6 (Paris-Lyon) Addition of AREA Network length >1,500km 1963 1987 First section opened Network length >1,000km 1977 Network
Slide 13: APRR Maintaining a high quality asset
APRR Maintaining a high quality asset Since 2006 2006, €2.4bn €2 4bn has been spent to grow grow, improve and maintain the network APRR historical capital expenditure (€m) 500 99 92 400 84 88 300 91 303 171 104 104 200 343 215 123 100 188 159 81 54 45 24 - 2006 2007 2008 2009 2010 2011 Construction
Slide 14: APRR Resilient financial performance
APRR Resilient financial performance Robust performance demonstrated through economic downturn and oil spikes APRR EBITDA1 (€m), average French diesel price2 and French GDP3 1.50 1,399 5.0% 1,326 1,244 1,265 1,208 1,068 974 2 5% 2.5% French GD diesel price (€/L) Average French 1.25 0.0% DP (%) 1.00
Slide 15: APRR traffic analysis
APRR traffic analysis 1 6% in 2011 Traffic grew 1.6% 2011, equivalent to 3 3% above 2007 levels 3.3% LV traffic has recovered to 5.6% above 2007 levels while HV remains 7.7% below 2007 HV remains at 15% of total traffic in 2011 (17% in 2008) HV recovery linked to improvement in economic condit
Slide 16: APRR operational efficiencies
APRR operational efficiencies Segmented cost base (€m) and EBITDA margin (%) 64.0% 67.0% 67.8% 68.0% 68.4% 69.2% 900 600 232 229 231 236 240 264 300 370 366 359 359 357 355 - 2006 2007 2008 2009 20101 20111 Operational Taxes EBITDA Margin Number of Liber-t badges g ((m)) in circulation and level of
Slide 17: APRR cash generation
APRR cash generation APRR generates substantial cash flow in excess of profit Surplus cash to fund capex and debt maturities (supplemented by bond issues) Group expected to naturally deleverage over time Tax grouping provides additional benefit from deductions at Eiffarie APRR profit vs operat
Slide 18: APRR cash flow to MQA
APRR cash flow to MQA Current structure is a legacy of original acquisition in 2006 and CNA debt terms Simplified holding structure1 MQA 19.4% of free cash flow Holdco debt carries a margin of 300bps p and cash sweep p of Eiffarie 25% free cash flow (H ld d (Holdco debt) bt) APRR distributions 100%
Slide 19: APRR traded bond yields
APRR traded bond yields APRR well supported in the bond markets markets, with recent new issues oversubscribed APRR Bonds: Mid-Yield to Maturity 6 0% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2 5% 2.5% 2.0% Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 €700 b €700m bond d - 7.5% 7 5% 2015 €1 000 b €1,000m bond
Slide 20: 3. Dulles Greenway
3. Dulles Greenway
Slide 21: Dulles Greenway overview
Dulles Greenway overview 22km toll road located in Loudoun County County, one of the fastest growing US counties MQA economic ownership: p ~50.0% Remaining concession life of 44 years Regulated R l t d ttollll iincreases: — Fixed toll increases until 2012 — From 2013 to 2020, escalate by great
Slide 22: Dulles Greenway performance
Dulles Greenway performance EBITDA h has grown strongly t l iin spite it off d declining li i ttraffic ffi Growth in EBITDA supported by fixed toll increases Traffic impacted by toll increases, increased capacity on alternate routes and recent economic weakness EBITDA (US$m) vs traffic (ADT) 60
Slide 23: Dulles Greenway traffic corridor
Dulles Greenway traffic corridor Route 7 and Waxpool Rd are Route 7 two key competitors 6 lanes Improvements to junctions Considerable capacity p y and traffic signals since 2006 R t 28 Route upgrades on competing routes 6 lanes since 2005 Widening with full interchanges 2005-2006 — Service leve
Slide 24: Dulles Greenway traffic analysis
Dulles Greenway traffic analysis Recent traffic performance suggests improving outlook 1Q 2012 comparison benefiting from milder winter conditions Quarterly YoY traffic growth (%) 2.0% 1.0% -% 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 (1.0%) (2.0%) (3.0%) (4 0%) (4.0%) (5.0%) (6.0%) (7.0%) 24
Slide 25: Dulles Greenway initiatives
Dulles Greenway initiatives Internalised operations & maintenance delivered ~US$3m of annualised savings First full year of internalised operations & maintenance (commenced in May 2010) Total opex includes non recurring legal expenses of US$0 non-recurring 7m US$0.7m In addition a non-recurrin
Slide 26: Dulles Greenway initiatives cont'd
Dulles Greenway initiatives cont’d cont d Bond buyback program enhancing return on locked up cash To date a total of US$34.3m of locked up cash has been used to repurchase bonds Bonds purchased are due to mature in each year from 2018-2021 Average yield to maturity of 7.8% Further buyback op
Slide 27: 4. Outlook
4. Outlook
Slide 28: 2012 Outlook
2012 Outlook APRR/Eiffarie 1Q traffic weak but anticipated to gradually improve over 2012 Revenue expected to be above pcp, pcp supported by the toll increase in February 2012 Other portfolio assets Improving traffic performance for US roads generally UK traffic conditions expected to remain
Slide 29: 5. Questions
5. Questions
Macquarie Atlas Roads — Macquarie Australia Conference 2012 on 6ix