ASX ANNOUNCEMENT
Tuesday 24 November 2009
The Manager
Company Announcements Office
Australian Securities Exchange
Level 45, South Tower Rialto
525 Collins Street
MELBOURNE VIC 3000
ELECTRONIC LODGEMENT
Dear Sir or Madam
Deutsche Bank Transport Conference
I attach for release to the market a copy of Asciano's presentation to the Deutsche Bank
Transport Conference today.
Yours faithfully
Fiona Mead
Company Secretary
© Asciano Limited. Level 6/380 St Kilda Road Melbourne Vic 3004
Deutsche Bank Transport Conference
Delivering the growth options
24 November 2009
Mark Rowsthorn
CEO and Managing Director
2
Important to the
National Economy
A Market Leader
COMPANY OVERVIEW
Asciano is ...
1
2
Unique
Diversified
Transport
Infrastructure
3
4
3
Portfolio snapshot
INTERMODAL
Footprint
Key assets
FY09 Rail Market
share
FY09 EBITDA
FY09 Revenue
National
202 locos & 4,003 wagons
4 freight terminals, maintenance
facilities
> 70% on East-West and long haul
North-South
$189 million
$885 million
COAL
Footprint
Key assets
FY09 Market
share
FY09 EBITDA
FY09 Revenue
NSW, South Australia, Queensland
178 locos & 4,106 wagons
Maintenance facilities
~ 85% NSW
~ 15% in Qld by June 2010
$147 million
$528 million
4
Portfolio snapshot
AUTO, BULK & GENERAL
Footprint
Key assets
FY09 Market
share
FY09 EBITDA
FY09 Revenue
National
229 locos & 4,991 wagons
Port facilities & equipment
~55% in Stevedoring , ~80% in
SEA Grain, ~50% in Autocare
$122 million
$696 million
CONTAINER PORTS
Footprint
Key assets
FY09 Market
share
FY09 EBITDA
FY09 Revenue
National
4 container terminals, 25 cranes,
103 straddles, trucks & trailers
~ 50% in Terminals
~ 20% in Port Logistics
$217 million
$744 million
5
Board and Management Structure
Board of Directors
Mark Rowsthorn
Managing Director & CEO
David Irwin
DGM, Coal
Chris Keast
DGM, Intermodal
Paul Garaty
DGM, Container Ports
Steven Ford
DGM, AB&G
Peter McGregor
CFO
Saul Cannon
Director Commercial
and Group General
Counsel
Helen Newell
Director, Corporate
Development and
Govt Relations
Fiona Mead
Company Secretary
Tom Angliss
Director, Property
Chris Barlow
Non-Executive
Director
Peter George
Non-Executive
Director
Bob Edgar
Non-Executive
Director
Geoff Kleemann
Non-Executive
Director
Malcolm
Broomhead
Chairman
Mark Rowsthorn
Managing Director
6
Strategy and Execution
Focus on Core
Businesses
·
Contract extension with Xstrata in NSW for up to 10 years, and extensions being
negotiated with Rio Tinto, Centennial, Whitehaven and Idemitsu
·
Commissioning of Fisherman Islands AutoStrad terminal
·
Agreement reached to divest PN Tasmania
Maximise Returns
From Existing
Businesses
·
Coal contract extensions completed on a take-or-pay basis
·
On target for delivery of $95m annualised Efficiency Review gains by FY11
·
83% of targeted Efficiency Review headcount reductions completed
·
Grain business restructured to remove harvest risk and restore profitability
Leverage Operating
Capabilities Into New
Opportunities
·
Queensland coal haulage operations commenced 6 months ahead of schedule
·
New 10 year take-or-pay contracts with Anglo & Macarthur in Queensland
·
Repositioning of Grain and Industrial businesses into AB&G to further develop integrated
bulk rail and ports capability
Optimise
Capital Structure
·
$2.45 billion recapitalisation completed, resulting in leverage almost halving
·
Well progressed to refinancing May 2010 maturities and securing new bank maturities in
2013 and 2014
1
2
3
4
7
Funding Strategy
Recapitalisation
Completed
August 2009
Bank
Renegotiation
Nearing
Completion
Credit
Ratings
Post Bank
Renegotiations
May 2012
Debt
Maturity
Commence
Execution
From
2010
·
$2.45b received
·
$450m or 20%
oversubscriptions
accepted
·
99.5%
securityholder
approval
·
Approx $4.7b
market
capitalisation
·
Within ASX 50
·
High quality
institutional register
·
Targeting new
maturities
to 2013 and 2014
·
Following bank
renegotiation will
have no maturities
until mid 2012
·
Improved flexibility
·
Targeting 2
investment grade
credit ratings
·
Access long term
debt
·
Diversify funding
base
·
Reduce reliance
on bank debt
·
Build around debt
capital markets
and asset finance
·
Potential for longer
term (10 to 30
year) issuance
·
Reduce individual
maturities
·
Two and a half year
refinancing window
·
Target material
reduction by end
of FY11
·
Multiple issuance
windows with
interim/annual
results
·
Ability to use
forward start
structure for any
balance not
refinanced in other
markets
I N C R E A S I N G F I N A N C I A L F L E X I B I L I T Y
8
Positioned for organic growth and new opportunities
Basis of Competition
Asciano provides essential
services which key customers
consider the "umbilical cord"
between their operations and
end markets
Operational performance is a
critical basis of competition in
all businesses
Significant Economies of
Scale
Replacement cost of Asciano's
equipment and facilities
approximately $6 billion
Market Leadership
Market shares of 50% to 80%
in all businesses
Financial Flexibility
Capital raising significantly
improved balance sheet
Credit ratings will facilitate
market access, diversification
of funding and lengthening of
maturity profile
High Quality, Low Risk
Growth
$100 million annual EBITDA
from Queensland coal haulage
from FY11 with initial 10 train
sets. Efficiency Review
benefits by FY11
Earnings Protection
Performance in the global
financial crisis and recession
demonstrates earnings
resilience
9
Organic growth
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2002
2003
2004
2005
2006
2007
2008
C
o
nt
a
i
ne
r
T
E
U
(
'
0
0
0
)
Brisbane
Sydney
Melbourne
Adelaide
Fremantle
CAGR = 9%
Growth in container volumes
Source: Waterline 45, April 2009
CONTAINER PORTS
Historical and Projected Freight Growth
0
25
50
75
100
125
150
175
1970
1980
1990
2000
2010
2020
B
i
l
l
i
o
n T
onn
e
k
m
Source: BTRE
Forecast
INTERMODAL
100
300
500
700
900
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Imports
Locally Manufactured (LM)
Australian Automotive retail sales
Australian Production Wheat, Barley, Sorghum
Source: ABARE Australian Commodities, September quarter 2009, vol 16, no 3
0
5,000
10,000
15,000
20,000
25,000
2006-07
2007-08
2008-09
2009-10F
kt
per
ann
u
m
Sorghum
Barley
Wheat
AUTO, BULK & GENERAL
Source: Vfacts
10
Secure Revenue
FY10 Revenue Mix
80%
11%
9%
Contracted
Uncontracted but
secure
Contestable
FY10 Customer Contract Mix
26%
9%
19%
46%
Contracts > 5yrs
Extensions > 5 yrs
Currently under negotiation
Contracts < 5yrs
Uncontracted
80%
11
Coal - South Eastern Australia: Operational Summary
16.1 Mtpa / 2,971 MNTK
82.3 Mtpa / 10,693 MNTK
Haulage Task
Australian Rail Track Corp, Rail Infrastructure Corp and Rail Corporation New South Wales
91% export / 9% domestic
20% Metallurgical / 80% Thermal
460
97 locomotives / 2,150 wagons
58% export / 42% domestic
36% Metallurgical / 64% Thermal
143
45 locomotives / 758 wagons
Employees
Export / Domestic
Type of Coal
Access providers
Rolling Stock
Southern Region
Note: all data is FY09, Southern Region includes Port Augusta
Northern Region
12
Coal - North Eastern Australia: Operational Summary
30.0 Mtpa
Haulage Task
108
Employees
100% export / 0% domestic
Export / Domestic
80% Metallurgical / 20% Thermal
Type of Coal
QR Network
Access providers
36 locomotives / 1,198 wagons
Rolling Stock
Note: all data is FY11 forecast
13
Coal Market Growth
0
20
40
60
80
100
120
140
160
NCIG (NSW)
PWCS (NSW)
DBCT (QLD)
Hay Point (QLD)
Abbot Point (QLD)
Wiggins Island (QLD)
C
a
p
a
c
i
ty
(Mtp
a
)
Existing capacity
Increase to 2011
Increase to 2020
Expected Capacity Increases
Source: NSW and Queensland Government Port Development Plans
14
Coal
·
Pacific National coal expects to retain approximately 75% market share in NSW in the next
five years and grow from its approximate 15% market share in Queensland over the same
period
Container Ports
·
Patrick Container Ports market share will continue to move between approximately 50% and
55% prior to additional operator/s entering market
·
Any new entrant would need a national presence to viably compete
·
Port of Brisbane awarded concession to Hutchison Port Holdings - scheduled to commence
2012?
·
Sydney Port Corporation's expansion progressing - no preferred operator announced
·
Port of Melbourne Corporation conducting market soundings - stated intention is to use of
Webb Dock where Asciano has lease tenure in place to Dec 2017
·
Patrick will continue to have superior facilities in all three locations and the ability to increase
footprint
Competition in the coal and container ports markets
15
Summary - Growth Strategy
Focus
on Core
Businesses
Maximise
Returns
Leverage
Operating
Capabilities
Optimise
Capital
Structure
·
Core defined as essential transport infrastructure services in structurally attractive supply chains
·
Divest or exit non-core or structurally unattractive businesses to redeploy capital
·
Growth predominantly via greenfield, brownfield & organic opportunities rather than acquisitions
·
Apply hurdle rates rigorously and grow where returns above the cost of capital can be sustained
·
Target opportunities to secure and leverage ownership and control of strategic assets / facilities
·
Role for Container Ports, Intermodal and AB&G is cash generation to support growth in Coal
·
Demonstrated capabilities in high intensity coal supply chains (e.g., Hunter Valley)
·
Distinctive bulk ports and rail capability
·
Focus in Coal and, potentially, integrated bulk ports and rail
·
Sustainable capital structure and access to funding must be maintained
·
Growth therefore subject to minimum rating and maximum leverage targets
·
Maximise returns and earnings protection via, for example, long term take-or-pay contracts
© Asciano Limited. Level 6/380 St Kilda Road Melbourne Vic 3004
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