Atlas Arteria · ASX:ALX
Atlas Arteria — Macquarie Atlas Roads — H1 2012 Earnings Presentation
35 slides from Atlas Arteria's earnings presentation, Aug 30, 2012
Slide 1: Macquarie Atlas Roads Half Year Results Presentation 30 June 2012
MACQUARIE ATLAS ROADS HALF YEAR RESULTS PRESENTATION 30 JUNE 2012
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 14 4. Outlook 26 5. Questions 28 6. Appendices 29 4
Slide 5: 1. Overview
1. Overview Peter Trent, Chief Executive Officer
Slide 6: 1H 2012 snapshot
1H 2012 snapshot Positive EBITDA growth continues in spite of difficult economic conditions 1H 2012 Statutory results summary Revenue: A$43.0m (2011: A$45.1m) Loss after income tax : A$75.2m (2011: A$106.4m loss) 1H 2012 Portfolio results TRAFFIC -1.9% REVENUE1 +1.4% EBITDA1 +3.5% 1.4% 3.0% AP
Slide 7: 1H 2012 segmented results
1H 2012 segmented results APRR recorded an increase in EBITDA of 3.3% with toll increases and cost control mitigating lower traffic US traffic flat to positive with solid EBITDA performance Warnow Tunnel traffic unfavourable due to pcp benefiting from disruption to alternative route M6 Toll
Slide 8: 2. Financial Performance
2. Financial Performance Mary Nicholson, Chief Financial Officer
Slide 9: MQA statutory accounts
MQA statutory accounts Statutory accounting MQA consolidates the results and balances of its controlled asset (M6 Toll) MQA equity accounts its non-controlled assets: — APRR, Dulles Greenway, Chicago Skyway, Indiana Toll Road, Warnow Tunnel Equity accounting Initially recognise assets at acqui
Slide 10: Consolidated profit & loss account
Consolidated profit & loss account Statutory accounts – 6 months ended 30 June 2012 MQA Total MQA Total Non- 6 months 6 months MQA controlled ended ended A$m Corporate M6 Toll assets 30 Jun 2012 30 Jun 2011 Total revenue and other income 0.4 42.7 - 43.1 45.1 Financing costs - (51.7) - (51.7) (51.2)
Slide 11: Consolidated balance sheet
Consolidated balance sheet Statutory accounts – as at 30 June 2012 Non- MQA controlled MQA Total MQA Total A$m Corporate M6 Toll assets 30 Jun 2012 31 Dec 2011 Current assets 17.8 46.9 - 64.7 64.0 Investments in associates - - 706.9 706.9 753.4 Property, plant and equipment - 739.9 - 739.9 742.2 Tol
Slide 12: MQA cash flow summary
MQA cash flow summary Available cash A$m Management fees reflect security price Opening balance – 1 January 2012 17.3 — May be applied to a subscription for new MQA Distributions from assets - securities, subject to agreement between MQA’s independent directors and Macquarie Interest on corporate
Slide 13: Eiffarie distribution
Eiffarie distribution Small distribution from Eiffarie expected during 3Q 2012 Distributable cash at Eiffarie of ~€48m as of 30 June 2012 (MQA share ~€9m) Main Eiffarie 1H 2012 cash flows (excluding February refinancing cash flows) include: — €62m interim dividend from APRR in April 2012 — €83m
Slide 14: 3. Asset Review
3. Asset Review Peter Trent, Chief Executive Officer
Slide 15: APRR: 1H 2012 results
APRR: 1H 2012 results -1.6% Impacted by challenging economic environment TRAFFIC 10.0bn VKT +1.0% REVENUE €983.1m Supported by increases in tolls and higher fees from retail and telecommunication facilities +3.3% EBITDA1 Benefited from opex savings €693.8m EBITDA margin increased to 70.6% (v
Slide 16: APRR: traffic
APRR: traffic LV and HV decreased by 1.1% and 3.8% respectively during 1H 2012 Total traffic lower despite extra day reflecting weak economic environment, principally felt by HV LV additionally impacted by high fuel prices and poor weather APRR traffic vs French Manufacturing1 8.0% 4.0% -% (4.0%
Slide 17: APRR: macroeconomic indicators
APRR: macroeconomic indicators Confidence indices reflecting general macro Demand for manufacturing falling across concerns Europe Consumers anticipating rising unemployment French business & consumer confidence France Manufacturing PMI 60.0 120.0 110.0 55.0 100.0 90.0 50.0 80.0 45.0 70.0 60.0
Slide 18: APRR: operational efficiencies
APRR: operational efficiencies 1H 2012 Opex Breakdown (€289.4m) Cost Category 1H 2012 Savings Purchases and External Charges (€5.8m) 20% Staff opex (€6.5m) 43% Operational taxes (€0.4m) Total (€12.7m) 37% Automation progressing steadily 17.8%: Increase in number of active electronic toll badges
Slide 19: APRR: liquidity
APRR: liquidity Strong liquidity position maintained with no significant maturities in the medium term APRR generated €368m of operating cash Consolidated debt ratios (including Eiffarie) flow (pre capex) remain solid as at 30 June 2012 Over €1.5bn available cash/liquidity as at 30 — Consolida
Slide 20: APRR: bond trading
APRR: bond trading APRR continues to be well supported in the bond markets APRR Bonds: Mid-Yield to Maturity 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 €700m - 7.5% 2015 €1,000m - 5.0% 2017 €500m - 4.875% 2019 €500m - 4.375% 2016 €500m - 5.125% 2018 Source: B
Slide 21: Dulles Greenway: 1H 2012 results
Dulles Greenway: 1H 2012 results +0.5% Limited toll elasticity to January toll increase TRAFFIC 46,678 ADT Benefited from a milder winter +9.2% REVENUE Supported by increases in tolls and additional day in US$36.2m period Reflects higher tolls, one-off costs in pcp and savings in +15.9% EBIT
Slide 22: Dulles Greenway: traffic
Dulles Greenway: traffic Small traffic growth posted during two consecutive quarters — Performance helped by milder winter weather Demographic factors expected to progressively increase congestion in corridor and on alternative routes Dynamic Corridor (Population Growth p.a.%) 3.00% 2.50% 2.00%
Slide 23: Dulles Greenway: corridor developments
Dulles Greenway: corridor developments Metrorail Project Dulles Greenway Corridor 23 mile extension of existing Metrorail system by Phase 1 to Wiehle Ave (Reston) Metropolitan Washington Airports Authority (MWAA) Phase 2 to Dulles Airport/Route 772 Scheduled to open: — Phase 1 completion date of
Slide 24: Dulles Greenway: cash flow
Dulles Greenway: cash flow Strong revenue growth continues but insufficient to meet increasing lock-up threshold Management continue to assess opportunities to improve capital structure — ~US$126m remain in cash reserves post bond buyback program Net toll revenue versus lock up hurdle 2008-1H 2012
Slide 25: Other assets: 1H 2012 results
Other assets: 1H 2012 results Results Assets Comments Traffic Revenue EBITDA (6.1%) (2.0%) (2.1%) Traffic impacted by weak economic conditions and improvements on competing M6 Toll M6 partially offset by start of construction on M6 commencing April 2012 0.3% 4.0% 5.3% Increase in speed limit on the
Slide 26: 4. Outlook
4. Outlook
Slide 27: 2012 Outlook
2012 Outlook APRR/Eiffarie Some negative growth in traffic may continue for the rest of the year Revenue and EBITDA growth expected to be positive for the full year Minority acquisition process likely to conclude 2H 2012 Economic conditions in Europe create uncertainty over near term Dulles
Slide 28: 5. Questions
5. Questions
Slide 29: 6. Appendices
6. Appendices 7
Slide 30: Proportionally consolidated performance
Proportionally consolidated performance Actual Pro forma Actual 6 months ended 6 months ended Change 6 months ended A$m 30 Jun 12 30 Jun 111, 2 (%) 30 Jun 112 Operating revenue 330.8 326.2 1.4% 344.2 Operating expenses (86.0) (89.7) (4.2%) (95.3) EBITDA from road assets 244.8 236.4 3.5% 248.9 Asset
Slide 31: Statutory accounts vs Management Information Report (MIR)
Statutory accounts vs Management Information Report (MIR) Statutory result for the period Proportionally consolidated financial performance M6 Toll results consolidated. Non-controlled toll road asset results included in share of Aggregation of operating results of proportionate losses from associat
Slide 32: Reconciliation – statutory results to proportionate earnings
Reconciliation – statutory results to proportionate earnings 6 months ended 6 months ended 30 Jun 2012 30 Jun 2011 A$m A$m Loss attributable to MQA security holders (75.2) (106.4) M6 Toll related adjustments: Less: Non-cash financing costs 15.5 21.2 Less: Depreciation and amortisation net of mainten
Slide 33: Reconciliation – cash flows
Reconciliation – cash flows Statutory to MIR operating cash flows 6 months ended 6 months ended 30 Jun 2012 30 Jun 2011 A$m A$m Net statutory operating cash flows 26.7 30.4 M6 Toll related adjustments: Less: Toll revenue received (49.2) (51.5) Less: Interest and other income received (1.5) (1.4) Add
Slide 34: Recap: Dividend Framework
Recap: Dividend Framework Dividends from MQA are currently anticipated to be declared and paid during 1H 2013 MQA will pass through Eiffarie distributions after addressing corporate requirements: — Meeting corporate expenses (including base and any performance fees paid in cash) — Maintaining a pr
Slide 35: Simplified distribution mechanics
Simplified distribution mechanics Cash flow: APRR to MQA shareholders EIFFARIE/FE APRR dividend A Add: APRR tax instalments to FE B Less: Other1 C Less: Eiffarie net interest D Less: FE tax payments to State E Distributable cash F=A+B–C–D–E Less: Debt repayment (Cash sweep) G = CASH SWEEP % *(F) Cas
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