Slide 1: Results for FY17
Results for FY17 8 August 2017
Slide 2: Disclaimer and basis of preparation
Disclaimer and basis of preparation This publication is prepared by the Transurban Group comprising Transurban Holdings Limited (ACN 098 143 429), Transurban Holding Trust (ARSN 098 807 419) and Transurban International Limited (ACN 121 746 825). The responsible entity of Transurban Holding Trust is
Slide 3: Highlights
Highlights • FY18 distribution guidance of 56.0 cps; growth of 8.7% TOLL REVENUE over 51.5 cps in FY17 GROWTH EBITDA • Networks delivered average traffic growth of 4.0%2 GROWTH1 • Continued focus on customer experience: – Technology upgrades improving access to information and providing additional a
Slide 4: Strategy
Strategy To be the partner of choice with governments providing effective and innovative urban road infrastructure and services utilising core capabilities Network Community Development Technology Operations Customer planning / engagement / delivery management forecasting TRANSURBAN FY17 RESULTS | 8
Slide 5: FY17 network performance
FY17 network performance TOLL REVENUE ADT TOLL REVENUE EBITDA NETWORK HIGHLIGHTS CONTRIBUTION GROWTH GROWTH GROWTH Sydney • Ongoing network growth from cars and large vehicles • M2 traffic impacted by NCX construction works 40.5% 3.4% 9.2% 10.2% • Weekend and public holiday traffic growth of 4.7% Me
Slide 6: $9 billion development pipeline
$9 billion development pipeline1 FY18 FY19 FY20 FY21 FY22 COMMITTED CITYLINK TULLA WIDENING Melbourne ($1.0 billion) PROJECTS UNDER CONSTRUCTION2 WEBB DOCK ACCESS4 Melbourne 95 EXPRESS LANES SOUTHERN EXTENSION GWA (US$25 million) INNER CITY BYPASS Brisbane ($37.5 million) MONASH FREEWAY UPGRADE4 Mel
Slide 7: Funding growth opportunities
Funding growth opportunities Positioned to fund growth opportunities Potential project timing • Committed projects funded from existing balance sheet Expected project completion date • Equity issuances may be required for West Gate Tunnel Project and potential M&A (e.g. WestConnex) West Gate Tunnel
Slide 8: Investment discipline
Investment discipline Valuation discipline Applying discipline • Alignment of interest as long-term owner-operator Discipline demonstrated in both project selection and valuation approach when participating in bidding • Through-the-cycle approach to assumptions processes • Commitment to clearly defi
Slide 9: Listening to our stakeholders
Listening to our stakeholders Transurban continues to address issues relevant to stakeholders Key focus areas: Employees Community • Empowering customer choice with improved access to information of travel options and costs • Better demonstrating value of toll roads • Assisting people in financial h
Slide 10: Customer experience
Customer experience Delivering an improved customer experience New retail brand—supporting growth • Digital: ‒ Smartphone apps released for CityLink and Transurban Linkt; go via expected mid 2018 • Initial roll-out in NSW ‒ Improved websites • Replaced Roam Express to reduce confusion over • Proacti
Slide 11: Delivering value to customers
Delivering value to customers Customers save more than 310,0001 hours of travel-time each workday on average by choosing to use our roads in Sydney, Melbourne and Brisbane Sydney A parent working in northern Sandgate Brisbane is running late to pick up 160,000 Road their child from a child care cent
Slide 12: Delivering value to customers
Delivering value to customers1 Usage levels vary among customers. More than 50% of consumer account customers pay $10 or less per month 54% 68% 93% 0.3% of our consumer of our consumer of our consumer of our consumer account customers account customers account customers account customers pay pay pay
Slide 13: Commitment to sustainability
Commitment to sustainability Recognition of Transurban’s approach Sustainability highlights • Dow Jones Sustainability Index (DJSI): • Launched second Reconciliation Action Plan—“Innovate RAP” – Recognised in DJSI World Leadership Index – Investigate transport mobility challenges faced by Aboriginal
Slide 14: Safety initiatives
Safety initiatives As a part of our commitment to road safety we have partnered with Neuroscience Research Australia (NeuRA) to launch the Transurban Road Safety Centre • NeuRA is one of the world’s leading centres for neuroscience research • Studies practical injury prevention strategies using faci
Slide 15: Financial results
Financial results
Slide 16: Statutory results
Statutory results FY16 ($M) FY17 ($M) KEY DRIVERS Toll revenue 1,870 2,083 Toll revenue • $128 million increase from existing assets driven by traffic growth and toll price escalation EBITDA 1,248 1,526 • $85 million increase from full year ownership of AirportlinkM7 Net profit 22 209 EBITDA EBITDA
Slide 17: Proportional results
Proportional results FY16 ($M) FY17 ($M) % CHANGE KEY DRIVERS Toll revenue 1,946 2,153 10.6% Toll revenue • $154 million increase from existing assets driven by traffic growth and Other revenue 60 58 (3.3)% toll price escalation • $53 million increase from full year ownership of AirportlinkM7 Total
Slide 18: EBITDA movement
EBITDA movement +10.1% 1,629 +7.4% 40 (4) 1,589 113 1,480 FY16 EBITDA1 Exisiting Foreign exchange FY17 existing AirportlinkM7 FY17 EBITDA business growth business EBITDA 1. Excluding significant items. TRANSURBAN FY17 RESULTS | 8 AUGUST 2017 18
Slide 19: Network EBITDA margins
Network EBITDA margins EBITDA MARGINS1 FY15 FY16 FY17 • FY17 EBITDA margin growth across all regions Sydney 79.6% 79.7% 80.5% • Group EBITDA margin impacted by higher proportion of lower margin businesses (GWA and Brisbane) Melbourne 85.0% 85.5% 86.5% contributing to overall business Brisbane2 69.6%
Slide 20: Cost movement
Cost movement Cost increase to support strategic growth project opportunities, customer and technology initiatives, and underlying business growth +10.6% 582 +8.2% 13 (3) 569 26 0.5 19 Strategic growth projects 526 Business development and bidding costs for new projects; ongoing investment in custom
Slide 21: Free cash flow movement
Free cash flow movement +31.7% FCF coverage (58) 1,220 5 FCF coverage for (1) FY17 is 115.7%; 174 excluding NWRG capital release Net finance costs FCF coverage is 99.2% $58 million decrease due to timing of interest 38 payments from recent debt refinancings 1,055 77 NWRG 59 $174 million increase due
Slide 22: Balance sheet positioned for macro environment
Balance sheet positioned for macro environment Funding activities FY17 DEBT CAPITAL MARKET ISSUANCES (TOTAL $3.1B) • Raised $3.1 billion1,2 of debt in a range of capital Market Tenor markets including: NOK Notes 18 Years – USD 144A CHF Notes 15 Years – AUD domestic bonds 12 Years USD 144A – NOK and
Slide 23: Market update
Market update
Slide 24: Sydney network
Sydney network TRANSURBAN FY17 RESULTS | 8 AUGUST 2017 24
Slide 25: Sydney network
Sydney network NorthConnex update Operations Potential future projects • Project currently on time and • Commissioned ED • Opportunities identified by on budget integrated variable speed NSW Government: management and lane • 19 road headers in operation ̶ NSW State Budget for control signal system—
Slide 26: Comparison between markets
Comparison between markets • Australia has a smaller proportion of tolled motorways compared to many international markets • New South Wales has fewer tolled kilometres than many American states INTERNATIONAL COMPARISONS1 TOTAL TOLLED KM ACROSS AUSTRALIAN AND AMERICAN STATES2 100% Louisiana 56 Victo
Slide 27: WestConnex
WestConnex • NSW Government announced proposed sale of at least 51% of WestConnex: – Process to commence with EOI late 2017 – Targeting transaction close in mid 2018 • Stage 1: 1A – M4 widening opened July 2017; 1B – M4 East under construction, opening 2019 • Stage 2: King Georges Road Interchange U
Slide 28: Melbourne network
Melbourne network TRANSURBAN FY17 RESULTS | 8 AUGUST 2017 28
Slide 29: Melbourne network
Melbourne network West Gate Tunnel Project1 CityLink Tulla Widening CityLink operations • Total project cost • Total project cost • CityLink CAV trials to approximately $5.5 billion2 approximately $1.3 billion3 commence in August 2017 • CPB Contractors John • CityLink upgrade to be ̶ Researching how
Slide 30: West Gate Tunnel Project
West Gate Tunnel Project THIS IS AN ILLUSTRATION FOR INDICATIVE PURPOSES ONLY, DOES NOT REFLECT SCALE TRANSURBAN FY17 RESULTS | 8 AUGUST 2017 30
Slide 31: West Gate Tunnel Project
West Gate Tunnel Project Benefits of West Gate Key enhancements driven Freight benefits Expected timeline Tunnel Project by community engagement • 70 km of new traffic lanes • 26 months of engagement: • Direct freeway access to the 2017 Port • More reliable, safer and ̶ 5,700+ face-to-face faster tr
Slide 32: Brisbane network
Brisbane network TRANSURBAN FY17 RESULTS | 8 AUGUST 2017 32
Slide 33: Brisbane network
Brisbane network Logan Enhancement Project Inner City Bypass Operations and upgrades • Total project cost $512 million • Major construction started in • GLIDe on schedule for July 2017 implementation by the end of • Construction underway 2017. Enables customer • Transurban to manage delivery • Logan
Slide 34: Greater Washington Area network
Greater Washington Area network TRANSURBAN FY17 RESULTS | 8 AUGUST 2017 34
Slide 35: Greater Washington Area network
Greater Washington Area network Southern extensions Operations to 95 Express Lanes Shifting landscape • New CAV trials to begin on 95 • Anticipated early completion in • White House commitment to and 495 Express Lanes mid- late 2017 on three km southern infrastructure investment: 2018, testing: exte
Slide 36: 395 Express Lanes
395 Express Lanes Project summary Project funding • 13 km extension of 95 Express • Total project cost US$475 million Lanes, converting two high occupancy vehicle lanes to three • US$251 million PABs Express Lanes • US$45 million VTIB loans • I-395 is the fourth most congested • US$179 million equit
Slide 37: Outlook
Outlook Distribution Continued Transurban Further Balance sheet CAV trials on guidance of 56.0 investment in continues to work development positioned to CityLink; new CAV cps—represents technology and with all stakeholders opportunities in fund growth trials on 95 and 8.7% growth customer to improve
Slide 38: Supplementary information
Supplementary information 1 Detailed financials 2 Treasury 3 Corporate overview 4 Glossary
Slide 39: Detailed financials
Supplementary information 1 Detailed financials
Slide 40: Traffic and revenue performance
Traffic and revenue performance JUN 17 QUARTER1 FY171 PROPORTIONAL PROPORTIONAL ADT ADT TOLL REVENUE TOLL REVENUE % CHANGE % CHANGE % CHANGE % CHANGE Sydney 9.3% 2.9% 9.2% 3.4% Melbourne 10.0% (2.1%) 4.1% (1.0%) Brisbane 4.4% 3.0% 22.9%2 15.0%3 GWA4 29.8% 12.6% 23.7% 12.8% 1. Compared to pcp. 2. Tra
Slide 41: Traffic and revenue data
Traffic and revenue data 1 JUN 16 JUN 17 ASSET QUARTER QUARTER % CHANGE FY16 FY17 % CHANGE Sydney M2 Total Toll Revenue ($M) $64 $71 11.2% $255 $277 8.6% Average Daily Trips (‘000) 126 130 2.9% 125 129 3.3% LCT Total Toll Revenue ($M) $23 $24 4.5% $89 $93 4.7% Average Daily Trips (‘000) 87 90 3.1% 8
Slide 42: Traffic and revenue data
Traffic and revenue data 1 JUN 16 JUN 17 ASSET QUARTER QUARTER % CHANGE FY16 FY17 % CHANGE Brisbane Gateway Motorway Total Toll Revenue ($M) $53 $55 3.6% $211 $219 3.7% Average Daily Trips (‘000) 114 115 0.5% 114 115 1.0% Logan Motorway Total Toll Revenue ($M) $44 $46 5.7% $172 $183 6.0% Average Dai
Slide 43: Proportional toll revenue by asset
Proportional toll revenue by asset OWNERSHIP JUN 17 QUARTER ($M) FY17 ($M) 100% PROPORTIONAL 100% PROPORTIONAL M2 100.0% 71 71 277 277 LCT 100.0% 24 24 93 93 CCT 100.0% 16 16 63 63 ED 75.1% 34 26 135 101 M7 50.0% 103 52 397 199 M5 50.0% 69 35 271 136 CityLink 100.0% 183 183 687 687 Gateway Motorway
Slide 44: Statutory results
Statutory results FY16 ($M) FY17 ($M) % CHANGE Toll revenue 1,870 2,083 11.4% Construction revenue 282 592 109.9% Other revenue 58 57 (1.7%) Total revenue 2,210 2,732 23.6% Employee benefit expense (149) (168) 12.8% Road operating costs (309) (335) 8.4% Construction costs (282) (592) 109.9% Transact
Slide 45: Proportional results
Proportional results PROPORTIONAL EARNINGS FY16 ($M) FY17 ($M) % CHANGE Toll revenue 1,946 2,153 10.6% Other revenue 60 58 (3.3%) Total revenue 2,006 2,211 10.2% Total costs (526) (582) 10.6% EBITDA (excluding significant items) 1,480 1,629 10.1% Significant items (82) - 100.0% EBITDA 1,398 1,629 16
Slide 46: FY17 proportional result by asset
FY17 proportional result by asset NET FINANCE INCOME TAX TOLL OTHER COST (EXP) / REVENUE REVENUE EBITDA D&A EXPENSE NPBT BENEFIT NPAT OWNERSHIP ASSET ($M) ($M) ($M) ($M) ($M) ($M) ($M) ($M) 100.0% M2 277 3 236 (74) (32) 130 12 142 100.0% LCT 93 - 58 (21) (30) 7 (8) (1) 100.0% CCT 63 - 39 (24) (12) 3
Slide 47: FY16 proportional result by asset
FY16 proportional result by asset NET FINANCE INCOME TAX TOLL OTHER COST (EXP) / REVENUE REVENUE EBITDA D&A EXPENSE NPBT BENEFIT NPAT OWNERSHIP ASSET ($M) ($M) ($M) ($M) ($M) ($M) ($M) ($M) 100.0% M2 255 3 213 (74) (50) 89 17 106 100.0% LCT 89 - 55 (23) (24) 8 3 11 100.0% CCT 60 - 39 (24) (13) 2 (1)
Slide 48: FY17 net finance costs paid
FY17 net finance costs paid NON-CASH ITEMS CONCESSION PAYMENTS & STATUTORY MAINTENANCE NET PROPORTIONAL NET DEBT PROVISION INTEREST INTEREST INTEREST NET INTEREST INTEREST FEES UNWIND CAPITALISATION ACCRUALS1 PAID PAID CONTROLLED ENTITIES OWNERSHIP ($M) ($M) ($M) ($M) ($M) ($M) ($M) CityLink 100.0%
Slide 49: FY16 net finance costs paid
FY16 net finance costs paid NON-CASH ITEMS CONCESSION PAYMENTS & STATUTORY MAINTENANCE NET PROPORTIONAL NET DEBT PROVISION INTEREST INTEREST INTEREST NET INTEREST INTEREST FEES UNWIND CAPITALISATION ACCRUALS1 PAID PAID CONTROLLED ENTITIES OWNERSHIP ($M) ($M) ($M) ($M) ($M) ($M) ($M) CityLink 100.0%
Slide 50: Maintenance provision
Maintenance provision 1 MAINTENANCE EXPENSE MAINTENANCE CASH 2 RECOGNISED SPEND FY16 ($M) FY17 ($M) FY16 ($M) FY17 ($M) CityLink (17) (14) (15) (11) M2 (6) (2) (4) (4) LCT (8) (8) (8) (6) CCT (6) (8) (3) (4) ED (8) (7) (8) (7) M7 (8) (10) (3) (13) M5 (4) (4) - (1) Gateway Motorway (11) (9) (3) (7) L
Slide 51: Free cash calculation
Free cash calculation FREE CASH CALCULATION SOURCE OF INFORMATION/EXPLANATION Cash flows from operating activities Statutory Transurban Holdings Limited operating cash flow (includes cash inflow from M5 TLNs). (refer Group Statutory accounts) Add back transaction and integration costs related Transa
Slide 52: Free cash flow
Free cash flow RECONCILIATION OF STATUTORY CASH FLOW FROM OPERATING ACTIVITIES TO FREE CASH FY16 ($M) FY17 ($M) FREE CASH FLOW FY16 FY17 % CHANGE Cash flows from operating activities 910 837 Free cash $926M $1,220M 31.7% Add back transaction and integration costs related to 23 113 Weighted average s
Slide 53: Reconciliation of proportional EBITDA to free cash
Reconciliation of proportional EBITDA to free cash FY17 ($M) Comments Proportional EBITDA 1,629 Refer to slide 45 for further detail Proportional net finance costs paid (cash) (577) Refer to slides 48 and 49 for further detail Add back proportional maintenance expense (non-100% owned assets) 37 Refe
Slide 54: Treasury
Supplementary information 2 Treasury
Slide 55: Funding structure at June 2017
Funding structure at 30 June 2017 Transurban3 BBB+/Baa1/A- Non- Corporate Recourse Sydney Brisbane GWA Working AMTN capital2 ED3 Airportlink 495 Express 95 Express A$0.3B M2 LCT CCT M73 M53 TQ A$0.9B M7 Lanes Lanes3 4 EMTN -/A3/A- -/A3/A- -/A2/- BBB/-/- BBB-/-/BBB- €1.6B Term debt A$0.3B AMTN AMTN A
Slide 56: Group debt at June 2017
Group debt at 30 June 2017 FACILITY FACILITY TOTAL FACILITY TOTAL DRAWN PROPORTIONAL STATUTORY (US$M)1 ($M)1 ($M) ($M) DRAWN ($M) DRAWN ($M) CORPORATE DEBT2 Working capital facilities3 - 900 900 33 33 33 USPP 162 940 1,150 1,150 1,150 1,114 AMTN - 300 300 300 300 300 EMTN (CAD, NOK and EUR Notes) 30
Slide 57: Drawn debt
Drawn debt PROPORTIONAL BASIS 30 JUN 16 30 JUN 17 MOVEMENT AUD1 ($M) ($M) ($M) EXPLANATION3 $733 million 144A issuance, $117 million NOK issuance, $133 million USPP matured, $55 million working Corporate 3,668 4,330 662 capital repayment. Net $74 million increase in TQ debt as a result of capital ma
Slide 58: Key debt metrics
Key debt metrics 30 JUNE 2016 30 JUNE 2017 TRANSURBAN NON- TRANSURBAN NON- GROUP CORPORATE RECOURSE GROUP CORPORATE RECOURSE Weighted average maturity (years)1,2 8.7 yrs 5.8 yrs 10.2 yrs3 9.0 yrs 5.8 yrs 10.7 yrs4 Weighted average cost of AUD debt1,5 5.2% 5.7% 4.9% 4.9% 5.5% 4.5% Weighted average co
Slide 59: Extension of Group debt maturity profile
Extension of Group debt maturity profile JUNE 2016 MATURITY PROFILE1,2,3 3,000 Existing debt 2,500 refinanced during A$ MILLION FY17 2,000 1,500 1,000 500 - FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 - 29 FY30 - 34 FY35+ JUNE 2017 MATURITY PROFILE1,2,3 3,000 New debt 2,500 raised during A$ MI
Slide 60: Corporate debt maturities
Corporate debt maturities at 30 June 2017 Working capital facilities USPP AMTN EMTN 144A Letters of credit 2,000 1,800 1,600 1,400 A$ MILLION 1,200 720 1,000 800 233 600 300 795 254 296 733 400 165 833 706 200 219 211 300 375 206 125 100 94 117 - 1. Debt is shown in the financial year in which it ma
Slide 61: Non-recourse debt maturities
Non-recourse debt maturities at 30 June 2017 TQ (incl ALM7) ED M2 M7 CCT M5 LCT 495 95 2,200 2,000 80 1,800 278 1,600 423 1,400 369 A$ MILLION 1,200 292 1,000 350 160 800 85 77 535 225 300 108 1,310 600 90 200 400 75 845 400 40 315 225 98 60 100 495 475 116 440 200 405 406 250 279 302 293 277 200 20
Slide 62: Hedging profile
Hedging profile TRANSURBAN INTEREST RATE HEDGING PROFILE1 • 99.4% interest rate hedged at 18,000 30 June 2017 GWA Sydney Brisbane Corporate Fixed amount • Hedge tenor is matched to the 16,000 tenor of the debt on 97%2 of drawn debt 14,000 • All foreign currency debt issued 12,000 in FY17 was swapped
Slide 63: Diversification of funding sources
Diversification of funding sources Funding activities JUN 16 GROUP DEBT1 JUN 17 GROUP DEBT1 BANK DEBT Major issuances during FY17: AMTN • A$733 million corporate USD 144A notes AUD PRIVATE PLACEMENT CAD NOTES • A$117 million corporate NOK notes EUR NOTES • A$500 million M7 AMTN A$13,639M A$12,484M C
Slide 64: Corporate overview
Supplementary information 3 Corporate overview
Slide 65: Summarised Group structure
Summarised Group structure TRANSURBAN HOLDINGS LIMITED TRANSURBAN HOLDING TRUST TRANSURBAN INTERNATIONAL LIMITED CORPORATE ENTITIES ROAD/OPERATING ENTITIES OTHER ENTITIES ROAD/OPERATING ENTITIES CORPORATE ENTITIES Including: Companies operating and maintaining roads Trusts holding asset and financin
Slide 66: Asset portfolio at June 2017
Asset portfolio at 30 June 2017 MELBOURNE SYDNEY OVERVIEW CITYLINK M5 M2 ED M7 NCX LCT CCT Opening date Dec 2000 Aug 1992 May 1997 Dec 1999 Dec 2005 Under construction Mar 2007 Aug 2005 Remaining concession period 18 years 9 years 31 years 31 years 31 years 28 years1 31 years 18 years Concession end
Slide 67: Asset portfolio at June 2017
Asset portfolio at 30 June 2017 BRISBANE GREATER WASHINGTON AREA GATEWAY LOGAN GO BETWEEN LEGACY AIRPORTLINK 495 EXPRESS 95 EXPRESS 395 EXPRESS OVERVIEW CLEM7 MOTORWAY MOTORWAY BRIDGE WAY M7 LANES LANES LANES Under Opening date Dec 1986 Dec 1988 Mar 2010 Jul 2010 Jun 2015 Jul 2012 Nov 2012 Dec 2014
Slide 68: Tolling escalation
Tolling escalation EMBEDDED INFLATION PROTECTION MOTORWAY ESCALATION CityLink Escalated quarterly by the greater of quarterly CPI or 1.011065% per quarter for the first 16 years (until 31 December 2016), then quarterly by CPI. This is subject to a cap of annual CPI plus 2.5%, which cannot be exceede
Slide 69: Safety highlights
Safety highlights Results TRANSURBAN RICI • RICI has remained steady throughout 2017 – this measures the 7.0 number of serious road injuries (an individual transported from, or receives medical treatment, at scene) and crashes per 100 6.0 million vehicle km travelled on Transurban’s networks 5.0 • Z
Slide 70: Potential opportunities in government transport plans
Potential opportunities in government transport plans FY17-FY19 FY20-FY22 FY23-FY25 FY26-FY28 FY29+ UNDER WESTCONNEX STAGE 1A Sydney CONSTRUCTION/PROCUREMENT2 WESTCONNEX STAGE 1B Sydney WESTCONNEX STAGE 2 Sydney SYDNEY GATEWAY Sydney WESTCONNEX STAGE 3 Sydney POTENTIAL CENTENARY/WESTERN MOTORWAY WID
Slide 71: Glossary
Supplementary information 4 Glossary
Slide 72: Glossary
Glossary TERM DEFINITION TERM DEFINITION 1H/2H First or second half of a financial year Free cash is calculated as statutory cash flows from operating activities from 100% owned FREE CASH/FCF ACSI Australian Council of Superannuation Investors subsidiaries plus distributions and interest received fr
Slide 73: Glossary
Glossary TERM DEFINITION TERM DEFINITION SERVICE AND FEE Service and fee revenue includes customer administration charges and enforcement recoveries LTI Lost time injury REVENUE M&A Mergers and Acquisitions SLN Shareholder Loan Note. An interest bearing shareholder loan. Currently Transurban has SLN