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asx release 3 May 2016 TRANSURBAN INVESTOR DAY PRESENTATION Please find attached a presentation that will be provided at the Transurban Investor Day today. The presentation will also be webcast live from 9:30am AEST on the Transurban website: www.transurban.com. Julie Galligan Company Secretary Investor enquiries Jessica O’Brien Investor Relations Manager +613 8656 8364 For personal use only Classification Transurban Group Transurban International Limited ABN 90 121 746 825 Transurban Holdings Limited ABN 86 098 143 429 Level 23 Transurban Holding Trust Tower One, Collins Square Level 9 ABN 30 169 362 255 727 Collins Street 1 Chifley Square Docklands Sydney ARSN 098 807 419 Victoria 3008 Australia NSW 2000 Australia [email protected] Telephone +613 8656 8900 Telephone +612 9254 4900 www.transurban.com Facsimile +613 9649 7380 Facsimile +612 9254 4990 3 MAY 2016 TRANSURBAN 2016 INVESTOR DAY POSITIONING FOR THE FUTURE For personal use only AGENDA: POSITIONING FOR THE FUTURE OVERVIEW AND STRATEGY WORKING WITH GOVERNMENT PARTNERS 1 Scott Charlton 7 Tony Adams FUTURE ENVIRONMENT GREATER WASHINGTON AREA 2 Michele Huey 8 Jennifer Aument INVESTING IN OUR TECHNOLOGY CAPABILITY SYDNEY 3 Lisa Tobin and David Hanus 9 Andrew Head MORNING TEA MELBOURNE 10 Vin Vassallo ENHANCING OUR CUSTOMER EXPERIENCE 4 Sue Johnson BRISBANE 11 Wesley Ballantine 5 PANEL Q & A 12 PANEL Q & A FUNDING FOR THE FUTURE 6 Adam Watson WRAP-UP 13 Scott Charlton For personal use only LUNCH 2016 INVESTOR DAY | 3 MAY 2016 2 2016 INVESTOR DAY: POSITIONING FOR THE FUTURE OVERVIEW AND STRATEGY SCOTT CHARLTON For personal use only STRATEGY STATEMENT To be the partner of choice with governments providing effective and innovative urban road infrastructure utilising core capabilities For personal use only 2016 INVESTOR DAY | 3 MAY 2016 4 TRANSURBAN STRATEGY WHO WHAT HOW Governments with: . Provide effective and innovative . Long-term owner/operator urban road infrastructure . Location on eastern seaboard . Leveraging existing networks of Australia and North America Offer customers value through . Demonstrating value to the productivity and safety benefits . Significant traffic congestion to client, users and community relieve in urban environment . Leading capabilities in network . Sustainable socio-economic planning/forecasting, position community engagement, development/delivery, . Economic growth potential technology application, . Legislative environment operations and customer supporting private sector management involvement in transport infrastructure . Only pursuing sustainable policy For personal use only 2016 INVESTOR DAY | 3 MAY 2016 5 NEAR-TERM FOCUS . Delivery and execution of $11 billion project pipeline, Transurban’s share $8 billion . Operations and technology Managed Operations & Customer Community & motorways Maintenance stakeholder model (O&M) engagement For personal use only 2016 INVESTOR DAY | 3 MAY 2016 6 MEDIUM TO LONG-TERM FOCUS NEXT GENERATION DEVELOPMENT OPPORTUNITIES Sydney For personal use only 2016 INVESTOR DAY | 3 MAY 2016 7 MEDIUM TO LONG-TERM FOCUS NEXT GENERATION DEVELOPMENT OPPORTUNITIES Melbourne For personal use only 2016 INVESTOR DAY | 3 MAY 2016 8 MEDIUM TO LONG-TERM FOCUS NEXT GENERATION DEVELOPMENT OPPORTUNITIES Brisbane For personal use only 2016 INVESTOR DAY | 3 MAY 2016 9 MEDIUM TO LONG-TERM FOCUS NEXT GENERATION DEVELOPMENT OPPORTUNITIES Greater Washington Area For personal use only 2016 INVESTOR DAY | 3 MAY 2016 10 MEDIUM TO LONG-TERM FOCUS RECENT CHANGES TO POLICY ENVIRONMENT HEADLINES Malcolm Turnbull urged to charge motorists for using roads The Australian | Feb 2016 Driven mad in traffic? We need user pays roads Sydney Morning Herald | Feb 2016 Scott Morrison urged to hold road user pricing inquiry as cars become more efficient Australian Financial Review | Feb 2016 Transurban’s reform rev-up The Age | Oct 2015 For personal use only 2016 INVESTOR DAY | 3 MAY 2016 11 MEDIUM TO LONG-TERM FOCUS POLICY ENVIRONMENT CONSIDERATIONS . Inequity of current road funding model – Fuel efficient and electric cars contribute less in fuel excise – Car registration annual fee not based on usage . Reform inevitable – Transurban preparing for change ROAD USAGE STUDY TIMELINE (OCTOBER 2015 – OCTOBER 2016) OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT PILOT STUDY ROAD USAGE STUDY For personal use only STUDY END 2016 INVESTOR DAY | 3 MAY 2016 12 LONG-TERM FOCUS PREPARING FOR TECHNOLOGY ADVANCES Technology advances impacting capacity: . Connected and autonomous vehicles (CAVs) . Vehicle platooning . Designated lanes Potential for 10-25% increase Vehicle platooning in motorway capacity by 2030s Dedicated lanes for CAVs Safety benefits from reduced Potential to double capacity in dedicated CAV lanes human error For personal use only 2016 INVESTOR DAY | 3 MAY 2016 13 LONG-TERM FOCUS THE FUTURE DEMOGRAPHIC ENVIRONMENT POPULATION CAR TRIPS . Customer behavioural changes (MILLIONS) (MILLIONS PER WEEK DAY) impacting demand 4.1 8.3 – Changes in travel patterns MELBOURNE 6.7 13.6 – Changes in car ownership 4.6 8.4 . Population growth environment impacting demand SYDNEY 7.5 12.8 2.1 4.1 BRISBANE 3.3 6.4 2011 Sources: Australian cities population: 2041 Deloitte Access Economics 6.8 20.4 Greater Washington Area population: 2010 For personal use only National Capital Region Transportation Planning Board AREA GREATER GREATER 8.8 26.8 Vehicle trips – all regions WASHINGTON 2040 Transurban’s Strategic Transport Models 2016 INVESTOR DAY | 3 MAY 2016 14 2016 INVESTOR DAY: POSITIONING FOR THE FUTURE FUTURE ENVIRONMENT MICHELE HUEY For personal use only FUTURE ENVIRONMENT MULTIPLE FACTORS DRIVING CHANGE ON TRANSPORT NETWORKS Technology advances Social changes Policy evolutions For personal use only 2016 INVESTOR DAY | 3 MAY 2016 16 FUTURE ENVIRONMENT ADVANCES IN VEHICLE TECHNOLOGY AND INFRASTRUCTURE CONNECTIVITY Long-range radar Short/medium range radar Light detection & ranging Camera Ultrasound Rapid pace in vehicle technology Infrastructure connectivity critical advancement . Hazard and situation awareness . Safety assist and response . Vehicle performance . Traffic flow synchronisation For personal use only . Vehicle-to-vehicle connectivity . Connected navigation 2016 INVESTOR DAY | 3 MAY 2016 17 FUTURE ENVIRONMENT PROGRESSIVE ROLL-OUT OF CAVS Vehicle automation level as defined by National USA VEHICLE FLEET BY AUTOMATION LEVEL Highway Traffic Safety Administration (USA) % OF TOTAL FLEET . Level 4 – Complete self-driving automation . Level 3 – Limited self-driving automation . Level 2 – Combined function automation . Level 1 – Function-specific automation . Level 0 – No automation For personal use only Source; University of Minnesota, Levinson, The End of Traffic and the Future of Transport Funding (Aug 2015) 2016 INVESTOR DAY | 3 MAY 2016 18 FUTURE ENVIRONMENT POSITIVE IMPACT ON ROAD SAFETY Crash reduction with the use of CAVs Leveraging technology on our assets today CRASH RATE PER MILLION MILES . Incident prevention measures – E.g. over-height vehicle detection and incident management . Road conditions response – E.g. variable messaging and variable speed signs to manage real-time road conditions and incidents . Improvement priority identification Level 1 Crashes with airbag deployment, injury, rollover, a high Delta-V, or that require towing. Injury, if – E.g. incident hot spots analysis and traffic present, should be sufficient to require a doctor’s visit. High Delta-V is defined as a change in speed of the subject vehicle in any direction during impact greater than 20 mph (excluding curb strikes) or acceleration on flow breakdown solutions any axis greater than ±2 g (excluding curb strikes). Level 2 Crashes that do not meet the requirements for a Level 1 crash. Includes sufficient property damage that one would anticipate is reported to authorities (minimum of $1,500 worth of damage, as estimated from video). For personal use only Level 3 Crashes involving physical conflict with another object (but with minimal damage) that do not meet the requirements for a Level 1 or Level 2 crash. Source: VTTI, Automated Vehicle Crash Rate Comparison Using Naturalistic Data (Jan 2016) 2016 INVESTOR DAY | 3 MAY 2016 19 FUTURE ENVIRONMENT POSITIVE IMPACT ON ROAD CAPACITY Combination of CAVs and infrastructure connectivity to increase throughput TYPICAL WORKDAY PROFILE Potential technology enabled capacity Current capacity CONCEPTUAL / ILLUSTRATIVE Technology enabled throughput Theoretical throughput Current throughput For personal use only 2016 INVESTOR DAY | 3 MAY 2016 20 FUTURE ENVIRONMENT SOCIAL CHANGES SHIFTING THE WAY VEHICLES ARE USED Key trends DRIVERS LICENCE OWNERSHIP CAV TAXIS COULD REPLACE TRADITIONAL . Population growth BY AGE (VICTORIA) TAXIS AND CARS IN MEGACITIES Average number of Total cost per passenger mile . Service and passengers per vehicle in New York City knowledge economy Public transport N/A $1.00 . Collaborative Vehicle ownership 1.6 $1.20 economy Taxi 1.2 $2.80 . Access versus asset CAV taxi 1.2 $1.80 ownership CAV taxis that 1 $2.20 accommodate at least two people could be 2 $1.10 . Sustainability cost-competitive with mass transit if capital 3 $0.70 priorities budgets and government subsidies 4 $0.60 . Urbanisation are taken into account Source: BCG, Revolution in the Drivers Seat (Apr 2015) Source: Charting Transport For personal use only 2016 INVESTOR DAY | 3 MAY 2016 21 FUTURE ENVIRONMENT KEY POLICY EVOLUTIONS Productivity Heavy and light Infrastructure Public and improvement vehicle charging investment private sector reform