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 use personal For
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 use personal For 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 use personal For LUNCH
2016 INVESTOR DAY | 3 MAY 2016 2 2016 INVESTOR DAY: POSITIONING FOR THE FUTURE
OVERVIEW AND STRATEGY
SCOTT CHARLTON For personal use only use personal For STRATEGY STATEMENT
To be the partner of choice with governments providing effective and innovative urban road infrastructure
utilising core capabilities For personal use only use personal For
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 use personal For
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 use personal For
2016 INVESTOR DAY | 3 MAY 2016 6 MEDIUM TO LONG-TERM FOCUS NEXT GENERATION DEVELOPMENT OPPORTUNITIES
Sydney For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 7 MEDIUM TO LONG-TERM FOCUS NEXT GENERATION DEVELOPMENT OPPORTUNITIES
Melbourne For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 8 MEDIUM TO LONG-TERM FOCUS NEXT GENERATION DEVELOPMENT OPPORTUNITIES
Brisbane For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 9 MEDIUM TO LONG-TERM FOCUS NEXT GENERATION DEVELOPMENT OPPORTUNITIES
Greater Washington
Area For personal use only use personal For
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 use personal For
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 use personal For 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 use personal For
2016 INVESTOR DAY | 3 MAY 2016 13 2016 INVESTORDAY 2016 | 3 MAY 2016 . . ENVIRONMENTDEMOGRAPHICFUTURETHE LONG Vehicle trips Transurban’s trips Vehicle National Washington ForEconomics Greater Access population cities Deloitte Australian Sources: personal use only impacting demand impacting Customer impacting growthPopulation environment – –
Capital Region Transportation Planning Planning Transportation Region Capital - TERM FOCUS Changes Changes –
Strategic Transport Models Transport Strategic
all regions all A rea population rea
:
behavioural demand
in car ownership ownership car in in
:
travel
Board
patterns
changes
GREATER BRISBANE SYDNEY MELBOURNE WASHINGTON AREA (MILLIONS) POPULATION 8.8 6.8 3.3 2.1 7.5 4.6 6.7 4.1
(MILLIONS PER WEEK DAY) (MILLIONS TRIPS CAR 26.8 20.4 12.8 13.6 6.4 4.1 8.4 8.3
2040 2041 2010 2011
14
2016 INVESTOR DAY: POSITIONING FOR THE FUTURE
FUTURE ENVIRONMENT
MICHELE HUEY For personal use only use personal For FUTURE ENVIRONMENT MULTIPLE FACTORS DRIVING CHANGE ON TRANSPORT NETWORKS
Technology advances Social changes Policy evolutions For personal use only use personal For
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 use personal For . 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 use personal For
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 use personal For 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 use personal For
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 use personal For
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 priorities collaboration For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 22 FUTURE ENVIRONMENT DIFFERENT VIEWS ON TECHNOLOGY IMPACT AND TIMING
PACE OF CHANGE AND ADOPTION HOW CHANGE WILL SHORT & LONG-TERM IMPACT OF CHANGE MATERIALISE TRILLIONS OF VEHICLE MILES 25% of the fleet will be autonomous Average vehicle by 2035, with 95% penetration by occupancy Historical Forecasted 2040, without a legal driver by 2050 0.95 Deployment of self-driving (Foreign Policy Think Tank Working Group, 2014) vehicles e.g. CAV taxis
Once technological and regulatory 1.2 Melbourne current issues have been resolved, up to observed average 1.67 USA status quo 15% of new cars sold in 2030 could 2.0 Increased carpooling be fully autonomous and ride share (McKinsey, 2016) 75% of fleet autonomous by 2040 (IEEE, 2012) The Victorian Transport Policy Institute predicts 75% market penetration by 2060 Source: USA BTS data, NHTS data, USA Census data, KPMG Analysis, VicRoads Traffic Monitor report For personal use only use personal For (VTPI – Litman, 2015)
2016 INVESTOR DAY | 3 MAY 2016 23 FUTURE ENVIRONMENT TRANSURBAN IS POSITIONED TO BENEFIT FROM THE FUTURE ENVIRONMENT
MOTORWAYS A LOGICAL SMART SCALE OF CANDIDATE FOR CAV MOTORWAYS CUSTOMER BASE APPLICATION
Free flow traffic lane design Optimisation of technology Leveraging data and access Road conditions and lane across the network (rather to road users to deploy new qualities than for individual assets) to technologies and services achieve better utilisation
Infrastructure connectivity and throughput For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 24 2016 INVESTOR DAY: POSITIONING FOR THE FUTURE INVESTING IN OUR TECHNOLOGY CAPABILITY
LISA TOBIN For personal use only use personal For INVESTING IN OUR TECHNOLOGY CAPABILITY
Building smarter Scaling tolling Investing in Cloud, Innovating through
motorways services digital and data partnerships For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 26 INVESTING IN OUR TECHNOLOGY CAPABILITY BUILDING SMARTER MOTORWAYS
Intelligent Transport Systems investment to realise greater network benefits
. Standardising technologies across our roadways . Connecting and sharing data more effectively across our road management systems . Consolidating systems and processes across the network . Applying roadside data to improve planning and traffic management activities . Increasing security and resilience of our roadside networks
. Improving capacity on networks For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 27 INVESTING IN OUR TECHNOLOGY CAPABILITY SCALING TOLLING SERVICES
Harnessing the benefits of our tolling as a service platform
. Proven delivery of our turn-key tolling solutions and services for roadways . Stable and reliable revenue capture processes . Evaluating further opportunities to consolidate tolling systems across our markets . Assessing long-term opportunities to introduce new tolling products and services
. Increase our capacity to scale assets For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 28 INVESTING IN OUR TECHNOLOGY CAPABILITY INVESTING IN CLOUD, DIGITAL AND DATA
A range of value-adding transport technologies: . Integrating digital Application Programing Interface (API) capabilities to enable a more effective customer experience . Implementing cloud services and automation technologies to expand capacity and speed up delivery . Big data technologies to extract more value from the information collected from our roadside, tolling
and operational systems For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 29 INVESTING IN OUR TECHNOLOGY CAPABILITY INNOVATING THROUGH PARTNERSHIPS
Continuing to work with a range of partners . Assessing how we can support the rollout of CAV technology on our networks . Integrating learnings from our road usage study into our long-term technology strategy . Exploring data sharing opportunities to deliver new real-time information services to our customers . Leveraging the R&D capabilities of our partners to
improve safety, throughput and enforcement outcomes For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 30 2016 INVESTOR DAY: POSITIONING FOR THE FUTURE ENHANCING OUR CUSTOMER EXPERIENCE
SUE JOHNSON For personal use only use personal For ENHANCING OUR CUSTOMER EXPERIENCE
Converting our Digital engagement Harnessing our data customers to for road users for future growth
advocates For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 32 ENHANCING OUR CUSTOMER EXPERIENCE TRANSURBAN’S CUSTOMER BASE
Customer service is vital in protecting our licence to operate
30% CORPORATE CUSTOMERS Travel time savings, performance reporting, 5% partnerships 95% of customers have Focus on of customers are no arrangement and transitioning account holders require additional to account services / holders and enforcement streamlining 70% enforcement RETAIL CUSTOMERS Apps, self serve, For personal use only use personal For travel time savings
2016 INVESTOR DAY | 3 MAY 2016 33 ENHANCING OUR CUSTOMER EXPERIENCE DIGITAL IMPROVEMENTS FOR OUR ACCOUNT HOLDERS
Retail APP FEATURES INCLUDE: . Continued migration to self service through . Easier account management website improvements . New payment options . Mobile apps . Real-time notifications . GPS data for personalised notifications . Roadside camera feeds . Expanded payment and communication channels . Use of social network profiles for account management
Corporates . Advanced consolidated billing and reporting . Dedicated web tools for easier account management
.only use personal For Partnering with corporates on new technologies e.g. GPS data
2016 INVESTOR DAY | 3 MAY 2016 34 ENHANCING OUR CUSTOMER EXPERIENCE DATA IMPROVEMENTS FOR OUR ACCOUNT HOLDERS
Retail NETWORK TIME SAVINGS . Project to provide travel time savings Traffic lights Peak travel bypassed time savings on statements 34 M5 South West 16 mins
. Web based interactive travel time 51 Westlink M7 23 mins savings map 34 Hills M2 28 mins
10 Lane Cove Tunnel 5 mins Corporates 28 Eastern Distributor 15 mins
. Travel time savings corporate reporting 17 Cross City Tunnel 7 mins
. Proactive notifications for fleet review 42 CityLink—Western Link 18 mins . Account management integration into 22 CityLink—Southern Link 20 mins corporate systems 63 Gateway Motorway 18 mins 36 Clem7 9 mins
30 Logan Motorway 20 mins For personal use only use personal For *One direction compared with alternate route Source: Tom Tom Data
2016 INVESTOR DAY | 3 MAY 2016 35 ENHANCING OUR CUSTOMER EXPERIENCE IMPROVING CUSTOMER EXPERIENCE FOR NON-ACCOUNT HOLDERS
Improving the transition to account holders and streamlining the enforcement process:
First time fee Campaigns to convert Proactive outbound Innovating through waiver program non-account communications partnerships customers to customers
More than 95% of infringement In the USA, Transurban manages recoveries retained by State/Council penalty and court process and collects Authority in Australia and retains the majority of enforcement
recoveries For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 36 ENHANCING OUR CUSTOMER EXPERIENCE CUSTOMER TRENDS
. Consolidation of accounts GROWTH IN CAR-SHARE MEMBERSHIPS – Corporate customers shifting towards
fleet leasing arrangements resulting in need for
large scale account management tollspend by Monthly Transurban
Growth in car-share driving increase in on-billing car – - arrangements ($’000) share accounts
– Increased appetite for data on effective road usage
. Potential for real time billing through the use of APIs
share membership (‘000) membership share
- Car . Potential to expand reporting and data integration with
commercial accounts . Demand for more digital interaction
. Building stronger partnerships with other transport Members Toll spend For personal use only use personal For —
service providers Source: City of Sydney
2016 INVESTOR DAY | 3 MAY 2016 37 2016 INVESTOR DAY: POSITIONING FOR THE FUTURE
FUNDING FOR THE FUTURE
ADAM WATSON For personal use only use personal For FUNDING FOR THE FUTURE
Disciplined cost Optimal capital Managing funding
management structuring risk For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 39 FINANCIAL CONSIDERATIONS DISCIPLINED COST MANAGEMENT DURING GROWTH PHASE
$’000 . Earnings growth and USA assets minority interest acquired margin expansion Legacy Way opened achieved despite significant increase 95 Express Lanes opened in business activity M5 Widening completed . A number of Queensland Motorways acquired initiatives, such as in- CCT acquired housing maintenance
M2 Upgrade completed planning, are cost GLIDe roll out completed neutral in the near 495 Express Lanes opened on M2, ED, M7, LCT term but delivered an National procurement program rolled out immediate uplift in Move to national customer operations model lane availability and revenue growth LCT acquired
GLIDe rolled out M2 and LCT O&M CityLink O&M to CityLink in-housed in-housed Total revenue
For personal use only use personal For New assets FY09 FY10 FY11 FY12 FY13 FY14 FY15 Total costs Operational initiatives 1 68.2% 72.0% 73.9% 74.9% 75.0% 75.8% 74.7% Underlying EBITDA
1. Calculated by dividing EBITDA by total revenue. 2016 INVESTOR DAY | 3 MAY 2016 40 FINANCIAL CONSIDERATIONS MANAGING KEY COST DRIVERS
COST CATEGORIES DRIVERS
ASSET MANAGEMENT Number of lane kilometres O&M, major maintenance and Asset mix (tunnel vs open road) technology roadside costs In-housing O&M activities
TOLLING & RETAIL Customer account management, Trips/transactions transaction processing and customer Customer experience initiatives initiatives
TECHNOLOGY Business growth Corporate platform development and Security enhancements security and capability improvement Revenue enhancing initiatives
Business growth CORPORATE Strategic initiatives
Asset management Technology – Lane kms For personal use only use personal For Tolling and retail Corporate
2016 INVESTOR DAY | 3 MAY 2016 41 FUNDING FOR THE FUTURE CAPITAL STRATEGY
CONSISTENTLY EFFICIENTLY MAINTAIN STRONG COST EFFICIENT GROWING FUND GROWTH INVESTMENT GRADE FUNDING THROUGH
DISTRIBUTIONS CREDIT METRICS MARKET CYCLES For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 42 FUNDING FOR THE FUTURE OPTIMISING CAPITAL STRUCTURE
Maintaining Maturity of asset Concession Ownership Development investment restrictions structure considerations grade credit
metrics For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 43 FUNDING FOR THE FUTURE MANAGING FUNDING RISK
Percentage 1 Total drawn of Dec 15 DEC 15 GROUP DEBT . Hedging interest debt A$’000 debt rates (98% hedged) and currency (100% hedged), consistent with relevant debt A$12,194M instrument . Investment grade credit metrics . Diversified funding Bank debt USD notes sources AUD notes Letters of credit CAD notes USD govt debt . Early refinancing EUR notes 1. Proportional drawn debt. Non AUD debt is plan converted at the hedged rate where cross currency swaps are in place. Unhedged USD debt is converted at the spot exchange rate of
$0.7306 at 31 December 2015. For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 44 FUNDING FOR THE FUTURE GROUP DEBT MATURITY AS AT DEC 15
A$’000 For personal use only use personal For
Dec 15
2016 INVESTOR DAY | 3 MAY 2016 45 2016 INVESTOR DAY: POSITIONING FOR THE FUTURE WORKING WITH GOVERNMENT PARTNERS
TONY ADAMS For personal use only use personal For WORKING WITH GOVERNMENT PARTNERS OPPORTUNITIES TO ENHANCE TRADITIONAL PROJECT ROLES
Transurban demonstrating value to government during each project phase
Identify transport Network design Procurement Community and Delivery solutions stakeholder
engagement For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 47 WORKING WITH GOVERNMENT PARTNERS DELIVERING EFFICIENCIES THROUGH IMPROVED PROCUREMENT PROCESS
YEAR 1 YEAR 2 YEAR 3
. Benefits of Transurban’s approach to NorthConnex Decision to Proceed procurement process: Reference Design Prelim EA, Prepare EIS, Exhibit and Sub Report – Greater interaction with Planning Approval contractor to improve EOI CoA considered in tenders project design TRADITIONAL PROCESSTRADITIONAL RFT Evaluation Contract
Finalisation – More opportunities for
Decision to Proceed Award the community to Prelim EA Contract Design Prepare EIS participate in the Input Exhibit EIS and Prep process EOI Interaction Sub Report RFT Planning Approval – Contract awarded 12 Evaluation Preferred Tender Contract Finalisation months earlier than
For personal use only use personal For Award Contract traditional process
NORTHCONNEX PROCESSNORTHCONNEX 12 month saving
2016 INVESTOR DAY | 3 MAY 2016 48 WORKING WITH GOVERNMENT PARTNERS MINIMISING TRAFFIC DISRUPTION DURING CITYLINK-TULLA WIDENING DELIVERY
. Shared objective with Government TIME PERIODS ALL LANES ARE OPEN ON CITYLINK DURING CONSTRUCTION to reduce impact on road users . All lanes on CityLink open during peak periods 54% 46% 42% . Additional incident response crews . Extensive communications program to advise road users
of traffic impacts Weekday Saturday Sunday For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 49 POSITIONING FOR THE FUTURE CITYLINK-TULLA WIDENING CONSTRUCTION ON TRACK
. Contractors working around the clock . Bolte Bridge to West Gate Freeway traffic switch implemented March 2016. Travel times in line with modelling . Partnership between CityLink, VicRoads and Victoria Police on 80km/h speed limit blitz . Construction has started on major interchange upgrade, Bell Street and
Flemington Road For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 50 2016 INVESTOR DAY: POSITIONING FOR THE FUTURE GREATER WASHINGTON AREA
JENNIFER AUMENT For personal use only use personal For GREATER WASHINGTON AREA NETWORK STRATEGY
. Deliver value to customers to increase traffic and revenue and position for expansion opportunities . Expand 95 Express Lanes to the north and south . Continue competitive bids for 66 Express Lanes projects . Leverage industry position into new North American markets
For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 52 POSITIONING FOR THE FUTURE VALUE PROPOSITION FOR CUSTOMERS
95 EXPRESS LANES: DAILY PERFORMANCE EXAMPLE . 15% reduction in incidents on 95 Express Lanes since 100 Time savings conversion to HOT 90 — General purpose lanes average time — Express Lanes average time 80 . Average >40% higher 70 speeds on Express Lanes vs general purpose lanes 60 during peak 50
40 . Customer satisfaction Minutessaved 30 greater than 80% when toll 20 rates are highest 10 0 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
For personal use only use personal For Hour of day
2016 INVESTOR DAY | 3 MAY 2016 53 EXPRESS LANES
INTERPRETING EXPRESS LANES’ PERFORMANCE
GWA EXPRESS LANES: AVERAGE WEEKDAY REVENUE FUNDAMENTALS 300 95 EXPRESS LANES
Corridor demand driven by 250
population and employment 200
TOLLROADS growth, land use and network 150 495 EXPRESS LANES
capacity constraints 100 EXPRESSLANES 50
REVENUE ($’000) REVENUE 0 Nov-12 Nov-13 Nov-14 Nov-15
INCREMENTAL CONSIDERATIONS 495 EXPRESS LANES: CONSISTENT TRENDS YEAR ON YEAR 300 Express Lanes demand driven 250 FY16 FY15 by general purpose lane 200 FY14 congestion, trip purpose and 150 user familiarity 100 FY13 50
For personal use only use personal For Higher demand leads to REVENUE ($’000) REVENUE increased average toll price 0 J A S O N D J F M A M J
2016 INVESTOR DAY | 3 MAY 2016 54 EXPRESS LANES MAINTAINING INVESTMENT DISCIPLINE
FORECAST REVENUE COMPARISON FOR EXPRESS LANES PROJECTS . Commitment to accurate forecasting – alignment of interest as long-term operator
. In-house traffic team understands
nuances of forecasting Express Lanes projects, particularly in
Revenue GWA
. Ensures investment discipline maintained while also providing realistic government revenue sharing payments
Year For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 55 POSITIONING FOR THE FUTURE SUCCESS OF TRANSURBAN'S EXPRESS LANES CREATING NEW OPPORTUNITIES
95 CORRIDOR Expanding network through existing concession . 395 Express Lanes - exclusive negotiations with VDOT to expand to the north by ~13km . In-principle agreement executed to expand to the south by ~3km . Negotiations underway to expand to the south by a further ~13km
66 CORRIDOR New expansion opportunities . Outside the Beltway - competing for DBFOM concession for ~40km of Express Lanes . Inside the Beltway - submitted proposal to provide tolling and traffic management services for the conversion of existing
For personal use only use personal For HOV Lanes to Express Lanes
2016 INVESTOR DAY | 3 MAY 2016 56 LONG-TERM FOCUS LENS FOR CONSIDERING FUTURE MARKETS
NETWORK POTENTIAL IN NORTH AMERICA’S Demographics MOST CONGESTED CITIES 50%
Government readiness / 40% San Francisco Los Angeles Vancouver willingness for PPP Toronto Greater Washington Area (GWA) Seattle 30% Miami Orlando Chicago
Individuals’ propensity Houston
Congestionlevel 20% to pay tolls Denver Dallas-Fort Worth Boston
10% Charlotte Bubble size San Antonio represents network
Network potential Norfolk / VA Beach potential
0% For personal use only use personal For 0 5 10 15 20 Population (millions) Source: Tom Tom 2014 Data
2016 INVESTOR DAY | 3 MAY 2016 57 2016 INVESTOR DAY: POSITIONING FOR THE FUTURE
SYDNEY
ANDREW HEAD For personal use only use personal For SYDNEY NETWORK STRATEGY
. Deliver NorthConnex safely and successfully — demonstration project for Transurban’s network model . Drive O&M of our assets towards best practice . Prepare for WestConnex sell down . Continue to propose other network development
opportunities For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 59 SYDNEY BENEFITS OF FIRST GENERATION PROJECTS COMING THROUGH
PROJECT ASSETS BENEFITS
M2 Upgrade . M2 . LCT and Military Road E-Ramp . M7 Lane Cove Road . LCT and Military Road E-Ramp East Facing Ramp . M2 . M7
M5 Widening . M5 South . M7 (South)
NorthConnex . M7 truck toll multiplier . Other network benefits upon completion
(M2 and M7) For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 60 NORTHCONNEX – DEMONSTRATION PROJECT FOR TRANSURBAN’S NETWORK MODEL BEST PRACTICE DELIVERY
Safety Community and Stakeholder Engagement
Sustainability Environment For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 61 POSITIONING FOR THE FUTURE ENHANCING OPERATIONS IN PREPARATION FOR FUTURE GROWTH
O&M EXCELLENCE CONTINUOUS IMPROVEMENT
2014 M2 and LCT operations brought in-house Invested in capability
2015 Renegotiated ED maintenance contract to remove evergreen term
Improving quality 2016 Commenced discussions with evergreen contract holder on M7
BEYOND . NorthConnex operations
. Other Sydney network opportunities Reducing risk For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 62 LONG-TERM FOCUS SIGNIFICANT FUTURE OPPORTUNITY IN SYDNEY NorthConnex . $3 billion Transurban project in construction, linking the M1 Pacific Motorway to the M2 Motorway . Due for completion late 2019
Northern Beaches Link . $2.4-3.1 billion project linking Northern Beaches to Warringah Freeway . Proposed development 2024-2034
Western Harbour Tunnel . $4.5 billion project providing an additional harbour crossing . Proposed development by 2024
WestConnex . $4.3 billion Stage 1 (M4 Widening and M4 East) in construction, due to be completed in 2019 Western Sydney Gateway to the South . $5.3 billion Stage 2 (new M5 project and King Georges Road
. M12 link to planned Western Sydney airport site . $300 million reserved for pinch points including interchange upgrade), due for completion 2019 and Sydney For personal use only use personal For from M7 motorway A1, A3 and A6 corridors Gateway due for completion by 2023 . Part of $3.6 billion road investment plan for . Scoping studies commissioned on A6 and M1 . $7.2 billion Stage 3 (M4-M5 link) project to be funded, Western Sydney (previously known as F6) corridors anticipated to be completed by 2023
2016 INVESTOR DAY | 3 MAY 2016 63 2016 INVESTOR DAY: POSITIONING FOR THE FUTURE
MELBOURNE
VIN VASSALLO For personal use only use personal For MELBOURNE NETWORK STRATEGY . Improve lane availability and throughput via operational improvements . Improve capacity on network by delivering CityLink-Tulla Widening project . Work with government partners to enhance network, through delivery of Western Distributor . Demonstrate best practice in O&M to position for ongoing
development opportunities For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 65 POSITIONING FOR THE FUTURE IMPROVING INCIDENT MANAGEMENT TO INCREASE LANE AVAILABILITY
. Introduction of a Freeway Management System (FMS) enables Transurban to move from an ‘attendance’ to ‘safe clearance’ 1 incident response model − Vehicle removed from asset as soon as possible − Transurban not reliant on third-party tow truck provider
. Benefits: − Increased safety
For personal use only use personal For − Increased lane availability
1. Examples of incidents include flat tyres, vehicles out of fuel, broken-down vehicles, debris on motorway and collisions. 2016 INVESTOR DAY | 3 MAY 2016 66 POSITIONING FOR THE FUTURE EXTENSIVE COMMUNITY AND STAKEHOLDER ENGAGEMENT PROGRESSING
MID-LATE 2015 EARLY-MID 2016 MID-LATE 2016 EARLY-MID 2017 2017-2018
WE ARE PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 HERE Consultation on proposal Consultation on concept Ongoing discussion on Public exhibition of Updates on how planning design to inform further design to inform reference design as Environment Effects process outcomes will design work contractor requirements, contractors prepare bids Statement inform design and reference design and for design and construction approach ▪ 13 pop up stalls impact assessments construction ▪ 8 information sessions, with over 500 attendees ▪ 7 community sessions ▪ More than 150 meetings ▪ 400 houses doorknocked with key stakeholders ▪ Personally addressed ▪ Over 30,000 households letters to over 3,000 reached via newsletters residents ▪ Community liaison group
For personal use only use personal For established ▪ Online consultation hub
2016 INVESTOR DAY | 3 MAY 2016 67 POSITIONING FOR THE FUTURE FEEDBACK INFLUENCING PROJECT DESIGN
TUNNEL / DESIGN IMPROVED ACCESS UPGRADE TO WALKING POWER LINES POSITION TO PORT AND CYCLING PATHS
. Two tunnel designs . Direct connections to . Increased bicycle and . Up to 14 overhead power under consideration both east and west walking tracks included lines removed Swanson Dock in project design . Increased amenity in . Separating existing local area cycling routes to remove
conflicts with vehicles For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 68 POSITIONING FOR THE FUTURE WESTERN DISTRIBUTOR PROJECT PROGRESSING ON SCHEDULE
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 WEBB DOCK ACCESS
COMMUNITY CONSULTATION
IN-PRINCIPLE AGREEMENT EXECUTED WITH STATE
RELEASE OF RFT PUBLIC EXHIBITION OF EES COMMENCES
MONASH FREEWAY UPGRADE PROJECT WORKS
WESTERN DISTRIBUTOR PROJECT WORKS For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 69 POSITIONING FOR THE FUTURE LEADING THE WAY ON MANAGED MOTORWAYS
Working with VicRoads to implement common FMS across the network Components of a FMS: . Lane use management system – Increased control of traffic – Increased capability to manage incidents safely . Ramp metering – Improves flow of traffic on the freeway – During peak periods: • ~42% increase in average speed • ~6% increase in throughput . Automated incident detection – Automated alerts of incidents, For personal use only use personal For enabling faster response
2016 INVESTOR DAY | 3 MAY 2016 70 2016 INVESTOR DAY: POSITIONING FOR THE FUTURE
BRISBANE
WESLEY BALLANTINE For personal use only use personal For BRISBANE NETWORK STRATEGY
. Complete integration of TQ and AirportlinkM7 – Roll-out GLIDe – Align O&M model with Transurban’s national approach . Assist Government to successfully deliver Gateway Upgrade North project . Achieve financial close on Logan Enhancement Project
. Explore further opportunities to deliver network solutions For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 72 EXECUTING STRATEGY INTEGRATION PROGRAM ON SCHEDULE
EXPECTED COMPLETION
2016 LATE 2017 ONGOING
PHASE 1 PHASE 2 PHASE 3 Organisation structure Technology O&M
90% 50% 10% complete complete complete
. TQ organisational . Work underway to align . O&M contracts to be structure aligned to back office systems and renegotiated Transurban introduction of national . AirportlinkM7 contract up platform . AirportlinkM7 for renegotiation May 2018 organisational structure . Roll-out of GLIDe
For personal use only use personal For . Alignment with review under way— commenced Transurban’s operating expected completion in model 60 days
2016 INVESTOR DAY | 3 MAY 2016 73 EXECUTING STRATEGY FOCUSED ON PHASE 3: O&M STAGE OF INTEGRATION PROGRAM
CURRENT STATE FUTURE STATE
Individual Routine Road Operations Assets Maintenance Gateway GMS Governance Transurban . External service providers Motorway (Ventia /Lendlease) Routine Asset currently managing road Broadspectrum maintenance strategy and operations on four of six assets Logan Motorway Transurban Services condition . Transurban moving towards BMS BMS Clem7 network approach (Ventia/Lendlease) (Ventia/Lendlease) Road – Transurban manages road Intelligent Legacy Way Transcity/Egis Transcity/Egis operations Transport operations across network Systems A1 Highways/ A1 Highways/ – O&M integrated into broader Go Between Brisbane City Brisbane City Project network strategy Bridge delivery Council Council AirportlinkM7 Ventia Ventia For personal use only use personal For Transurban
Service provider
2016 INVESTOR DAY | 3 MAY 2016 74 ACQUISITION STRENGTHING PORTFOLIO AIRPORTLINKM7 BENEFITING FROM OPENING OF LEGACY WAY
AIRPORTLINKM7 ADT GROWTH JAN 2015 – MAR 2016 Integration plan . 90-day integration plan ADT (‘000) OPENING OF LEGACY WAY 60 FY15 ADT . Target state: FY16 ADT – Head count reduced by ~90% 55 – Single tolling brand with all customers on ‘go via’
50 – Back office integrated with TQ
45 For personal use only use personal For
40 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2016 INVESTOR DAY | 3 MAY 2016 75 ACQUISITION STRENGTHING PORTFOLIO LEGACY WAY REVENUE AT HIGHER END OF EXPECTATIONS
. Traffic continues LEGACY WAY WEEKLY REVENUE SINCE OPENING
to grow $600,000
. Full tolls $550,000 introduced 2 May 2016 $500,000 EASTER HOLIDAY PERIOD $450,000
$400,000
$350,000 CHRISTMAS HOLIDAY PERIOD $300,000 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16
For personal use only use personal For Revenue Trend line
2016 INVESTOR DAY | 3 MAY 2016 76 POSITIONING FOR THE FUTURE OPPORTUNTIES ARISING FROM NETWORK POSITION
. Working with Queensland Government to identify opportunities to improve service delivery . Control room consolidation . Improved customer experience – Coordinated signage and information – Integrated incident response and
management For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 77 2016 INVESTOR DAY: POSITIONING FOR THE FUTURE
WRAP-UP
SCOTT CHARLTON For personal use only use personal For NEAR-TERM FOCUS: POSITIONING FOR THE FUTURE SUMMARY
PROJECT PIPELINE OPERATIONS TECHNOLOGY POLICY
. $11 billion project . Deliver best in class . Investing in Intelligent . Deliver findings of road pipeline asset O&M Transport Systems and usage study value added transport . One project underway . Continue to insource . Contribute to policy technologies and another one in management of asset reform for future discussion in each life-cycle model . Working with partners to infrastructure provision market bring new innovations to market . Balance sheet structured
to deliver pipeline For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 79 MEDIUM TO LONG-TERM FOCUS: POSITIONING FOR THE FUTURE SUMMARY
Next generation development Sustained growth profile opportunities in each market
Strategically positioning for Increased throughput technology advances and lane availability
Transurban is Policy reform is inevitable
preparing for change For personal use only use personal For
2016 INVESTOR DAY | 3 MAY 2016 80 2016 INVESTOR DAY: POSITIONING FOR THE FUTURE
GLOSSARY For personal use only use personal For GLOSSARY
ADT Average Daily Traffic HOT High Occupancy Toll Lane API Application Program Interface IEEE Institute of Electrical and Electronics Engineers AUD Australian Dollars KMS Kilometres BCG Boston Consulting Group KM/H Kilometres per hour BMS Brisbane Motorways Services LCT Lane Cove Tunnel BTS Bureau of Transportation Statistics M2 Hills M2 CAVs Connected Autonomous Vehicles M5 M5 South West Motorway CCT Cross City Tunnel M7 Westlink M7 COA Conditions of Approval MPH Miles per hour CTW CityLink-Tulla Widening O&M Operations and Maintenance DBFOM Design, Build, Finance, Operate and Maintain NHTS National Household Travel Survey EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation PPP Public Private Partnership EA Environmental Assessment R&D Research and Development ED Eastern Distributor RFT Request for Tender EES Environment Effects Statement TCL Transurban ASX code EIS Environmental Impact Statement TQ Transurban Queensland EOI Expression of Interest USD USA Dollars FMS Freeway Management System VDOT Virginia Department Of Transportation FY Financial Year Virginia Tech Virginia Polytechnic Institute and State University GLIDe Tolling back office system VMT Vehicle Miles Travelled GMS Gateway Motorway Services VTPI Victoria Transport Policy Institute GPSonly use personal For Global Positioning System VTTI Virginia Tech Transportation Institute GWA Greater Washington Area YOY Year on Year HOV High Occupancy Vehicle
2016 INVESTOR DAY | 3 MAY 2016 82