Brisa Concessão Rodoviária. Investor Presentation

Transcription

1 Brisa Concessão Rodoviária Investor Presentation May 2017

2 Disclaimer The information contained herein ( Information ) has been prepared by Brisa Concessão Rodoviária, S.A. ("BCR") and which, according to its nature, it is not provisional and which is not intended to give any forward-looking statements, estimates or future projections and should be read accordingly. The Information is publicly disclosed under the applicable rules and regulations and may be freely used under the condition that it shall remain unchanged. BCR renders no representation, warranty or undertaking, express or implied, with respect to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness thereof. Neither BCR nor any of its affiliates, subsidiaries, directors, representatives, employees and/or advisors shall not be held liable nor responsible for any direct or indirect damages whatsoever that may occur or that may arise from any use of the Information or otherwise arising in connection with this presentation or as a result of any use or manipulation, modification or alteration, update, revision or correction, whether intentional or not, of such information the Information. All data referred in this document must be reported to the document s date. Therefore, considering the nature and objective of the disclosure of the Information, BCR shall not be under any obligation to update said Information, nor shall it be under any obligation to make any prior announcement of any amendment or modification thereof its contents and therefore the Information may not be used in the future in connection with any offer (public or private) in relation to securities issued by BCR. Any decision to purchase, subscribe, exchange or otherwise trade any securities in any offering launched by BCR or on its behalf should be made solely on the basis of the information to be contained in the relevant prospectus, base prospectus or offering memorandum to be made available in due course in relation to any such offering in accordance with the applicable rules and regulations. The Information herein is provided for general purposes only and is not intended to constitute professional advice. Furthermore, the Information does not constitute or form part of and should not be construed as, an offer (public or private) to sell, issue, advertise, market, invite to subscribe, submit to investment gathering procedures or the solicitation of an offer (public or private) to buy or acquire securities of BCR or any of its affiliates in any jurisdiction or an inducement to enter into investment activity in any jurisdiction. Use of data contained herein in its original format shall contain a quote as to the source of the information and/or a reference of where it was taken from. Financial statements reported for the year end 2016 were prepared according to International Financial Reporting Standards (IFRS) and have not yet been audited. BRISA Concessão Rodoviária, S.A. Head-Office: Quinta da Torre da Aguilha, Edifício BRISA, São Domingos de Rana Share capital: EUR Registered in the Commerce Registry Office of Cascais under register and corporate tax number

3 Ring-fenced Structure BCR within Brisa Group Simplified organizational chart for illustrative purposes Brisa Auto-Estradas (BAE) (Parent company) Holding Company - No debt Brisa Concessão Rodoviária (BCR) Ring-fenced BCR (70%) Ring-fenced structure (CTA, covenants and security package agreements) Debt (Rated): EIB + Bonds + Bank facilities Solid financial profile Concessão Brisal (70%) Concessão Litoral Oeste (15%) Concessão Baixo Tejo (30%) Project Finance (non-recourse) Other concessions Concessão Douro (100%) Concessão Atlântico (50%) Amortising long-term project finance Non recourse to Brisa Project Finance (non-recourse) Brisa O&M (100%) Brisa I&T (79.2%) Controlauto (74%) Via Verde Contact Services O&M expertise Via Verde (60%) Brisa Engenharia (100%) M-Call (100%) Stable cash-flow generation Funded through Brisa (almost no debt) Via Verde Serviços BCR is ring fenced from the remainder of the group 3

4 BCR at a glance COMPANY OVERVIEW: Largest toll road operator in Portugal km, 12 motorways under concession Long-term concession: December 2035 Above 50% market share in Portugal National Coverage BCR is a SPV set up in 2010 with a ringfenced structure BUSINESS OVERVIEW: Strong operating performance Latest results confirm very positive trend YE16 traffic increased 7.0% YoY, driven by a robust organic growth EBITDA margin reached its highest level since BCR inception Strong cash-flow generation FINANCIAL OVERVIEW: Solid Balance Sheet Conservative financial management and distribution policy Strong liquidity position. No Bond redemptions in 2017 Investment grade rating, above Portuguese sovereign: Baa3 by Moody s and BBB by Fitch 4

5 Index Company overview BCR Concession BCR Contractual and Financial Structure Rating Business overview Traffic Performance 2016 Results Financial overview Liquidity Position Debt Structure Wrap-up Annexes 5

6 BCR Concession Largest concession in Portugal - 12 motorways, km: - Under operation: 11 motorways, km fully built since Only 1 motorway and 1 link to be built, totaling approximately 24 km - Long-term concession, up to December National coverage: includes the main road corridors with the highest importance in the Portuguese motorway network A3 A4 Oporto A14 A1 Tariffs linked to CPI - Tariffs update: annual automatic increase of 100% of CPI (8.5% of the revenue outcome of such increase reverts to State) A10 A9 A5 A13 A6 Above 50% market share % of tolled network * % of travelled km* Lisbon A12 A2 * According to APCAP figures for YE2015 The backbone of the Portuguese road system 6

7 BCR Contractual and Financial Structure BCR is ring fenced through a contractual framework, which is valid for the full life of the concession. This financial and legal structure provides strong credit protection: Covenants Comprehensive set of financial covenants (ICR, Net Senior Debt / EBITDA, CLCR) that ensure deleverage overtime Trigger Events No distributions if: - lock-up ratio tests are not met - investment grade rating is not maintained Additional credit protective provisions Pledge over shares in BCR and over BCR bank accounts Liquidity Reserves: Debt and CAPEX reserve accounts Comprehensive set of terms regarding hedging transactions Strong Governance with a minimum of 3 independent directors Financial structure provides ample protection for creditors and has now more than 6 years of proven track record 7

8 Jun/14 Jun/16 Jun/18 Jun/20 Jun/22 Jun/24 Jun/26 Jun/28 Jun/30 Jun/32 Financial overview BCR Contractual and Financial Structure Net Debt / EBITDA covenants Self-protective financial structure 9x 8x 7x 6x 5x 4x 3x 2x 1x 0x Trigger Default Revenue underperformance EBITDA decrease Lock-up ratio compliance Adjustment in distributions Forward looking financial ratio (CLCR) and a Net Debt to EBITDA profile designed to ensure deleveraging over time Any future traffic underperformance will be accommodated through adjustments in distributions Unique (and proven) self-protective financial structure 8

9 Rating BCR Rating evolution (Moody s) Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3 Ba1 Ba2 Ba3 B1 IG Sub-IG Current Rating Outlook BCR Moody's PGB Moody's Current Rating Baa3 Ba1 Outlook Baa3 Stable BCR BBB Stable Ba1 Stable Portugal BB+ Stable Credit Opinion (12 May 2016) We expect BCR to continue to follow prudent financial policies and maintain adequate headroom against its dividend lock-up and default levels, which will become more demanding over time. ( ) The current rating positioning one notch above the sovereign rating reflects BCR s strong cash flow generation despite mixed traffic performance in the past thanks to strict cost control and reduction in investments, and good liquidity. Sector comment (8 Nov. 2016) This report analyses the impact of protracted zero inflation and zero traffic growth on large European toll road networks BCR is not affected thanks to its creditor protective debt structure which, in case of underperformance, reduces distribution to maintain leverage within the covenant path. Ratings affirmed (13 Dec. 2016) The BBB reflects BCR s strong traffic and financial performances since 4Q13 as well as its creditor-protective debt structure Investment Grade by Moody s and Fitch (above Portugal) 9

10 Index Company overview BCR Concession BCR Contractual and Financial Structure Rating Business overview Traffic Performance 2016 Results Financial overview Liquidity Position Debt Structure Wrap-up Annexes 10

11 Traffic Performance Average Daily Traffic BCR Total traffic figures (YOY) Total traffic reported by major European toll road operators VkM (BCR) GDP (Portugal) 4.5% 0.9% 7.0% 7.0% 1.6% 1.4% 7.0% 5.3% 3.7% 3.4% 3.1% -1.6% -2.8% % 2.2% Source: BoP Strong traffic performance, maintaining a high rate of traffic growth In 2016 BCR reported the highest traffic growth among peers Source: Moody s Traffic maintains a strong performance. The highest among peers 11

12 2016 Results Traffic Evolution Quarterly ADT * (Average Daily Traffic) Quarterly VKM growth Q15 2Q15 3Q15 4Q % +6.5% +7.6% +6.3% % 1Q 2Q 3Q 4Q * ADT does not include positive leap year effect Q % Traffic mix (2016) 5.3% 94.7% LV/HV traffic growth (yoy) 9.6% 6.9% 1Q16 benefitted from positive leap year and Easter calendar effect. Easter had the opposite impact in the 2Q16. 2Q16 3Q16 4Q % +6.9% +6.6% +7.0% Traffic maintained a strong performance 12

13 2016 Results Traffic Evolution Average Daily Traffic (ADT*) Oporto A3 A ADT A1 A2 A3 A4 A5 A6 A9 A10 A12 A13 A14 BCR A14 A1 5.9% 8.2% 7.1% 7.9% 3.9% 8.6% 10.2% 8.0% 7.0% 7.7% 3.0% 6.7% YoY% A10 A9 A5 Lisbon A12 A13 A2 A6 Breakdown of 2016 VKM (%) A3; 10% A2; 18% A4; 7% A5; 6% A6; 4% * ADT does not include leap year effect A9 (due to increased overload of IC17 / CRIL) and A2, A6, A10 or A13 (more seasonal and more associated with leisure trips) presented higher ADT growth rates A1; 46% Positive growth across all network A9; 3% A10; 1% A12; 3% A13; 2% A14; 1% As expected, A5 (mainly a commuter) and A14 (due to a landslide that conditioned traffic during April and May) had less expressive ADT growth rates 13

14 2016 Results Operating Performance (Toll Revenues) Traffic & Toll Revenues (M ) Toll Revenues (M ) ADT (organic) 7.2% 6.2% Calendar effect -0.2% 0.5% Others 0.0% 0.3% Like-for-like 7.0% 7.0% Traffic \ % Mix effect -0.2% 0.1% Tariff increase 0.0% 0.3% Others 0.0% -0.3% Total (toll revenue) 6.7% 7.1% Toll Revenue was the 3 rd consecutive year of strong traffic growth, with a 7% YoY increase Toll revenue increased 7.1% in 2016, with performance above guidance (c. 6% as per 1H16 results presentation) Leap year with a positive impact of 0.2% Strong top line growth, with toll revenues increasing 7.1% YoY 14

15 Business 2016 Results overview Operating Performance (EBITDA) (M ) YoY EBITDA and EBITDA Margin (M ; %) Operating income % Toll revenues % Service areas % Other income % Operating expenses % Supplies and services % % 72.1% % 75.2% 76.2% ,5% 1.0 p.p. 7,0% 6,5% 6,0% 5,5% 7.5% 5,0% 4,5% Personnel costs % 295 4,0% Other expenses % ,5% EBITDA % EBITDA Margin 75.2% 76.2% 1.0 pp EBITDA EBITDA Margin EBITDA margin reached 76.2% in 2016 (the highest annual level since BCR inception), driven by a strong increase in operating revenues together with an ongoing disciplined cost management EBITDA increased 7.5% YoY to M 15

16 Business 2016 Results overview CAPEX and Cash-flow generation (EBITDA CAPEX) (M ) YoY EBITDA CAPEX (M ) EBITDA % EBITDA Margin 75.2% 76.2% 1.0 pp Capex % New works % % Widening works % Major repairs¹ % Other (equipment, supervision, etc) % EBITDA - Capex % 1 Under the framework of IFRIC12, major repairs are provision costs, not CAPEX Capex is mainly related to pavement works in A2, A5, A6 and A14 Widening works underway in two sub-stretches (A1-Carvalhos/Santo Ovídeo and A4-Águas Santas/Ermesinde) Strong cash-flow generation, with the increase in EBITDA more than compensating higher Capex 16

17 2016 Results Financial Results (M ) YoY WACD* & Fixed rate debt (%) Net financial results Financial income % 79.1% 68.2% 70.1% 69.9% 69.5% Financial expenses % Interest expenses % IFRIC % Other financial expenses % 4.2% 4.4% 4.3% 3.7% 3.3% bps Annual average cost of debt continues on a downward trend, reaching 3.3%. Year-end WACD at 2.9% Net financial results slightly worse, as a result of: Higher level of gross debt due to the prefunding of the M bond redeemed in December 2016 (4.5% coupon) One-off impact from the call option exercise to early redeem the 120 M floating rate bond (that was to mature in June 2020) Lower financial income due to lower interest rates on cash deposits Low interest rate risk exposure WACD % Fixed (YE) Net Financial Results (M ) * Weighted average cost of debt Financial results impacted by higher pre-funding and one-off effects. WACD continued to improve 17

18 Business 2016 Results overview Net Profit (M ) YoY Net Profit (M ) EBITDA % EBITDA Margin 75.2% 76.2% 1.0 pp Amort., deprec., adjust., prov. and reversals % % EBIT % EBIT Margin 42.6% 44.1% 1.5pp Net financial results Profit before tax % Income tax % Net profit % Profitability significantly increased, with net profit reaching 91.7 M (+15.4% YoY), backed by toll revenue increase together with a disciplined operating and financial cost approach Bottom line increased 15.4%, backed by higher toll revenues and cost control 18

19 Index Company overview BCR Concession BCR Contractual and Financial Structure Rating Business overview Traffic Performance 2016 Results Financial overview Liquidity Position Debt Structure Wrap-up Annexes 19

20 Liquidity Position Liquidity position MLT debt redemptions up to 2020 (M ) BCR has plenty of funds and facilities in place to meet it s forthcoming debt maturities: 1 2 Strong cash flow generation (222 M * in 2016) 225 M in undrawn committed credit lines (all with highly rated international banks) M in cash Smoother debt amortization profile, with highest annual debt redemption lower than 340 M No Bond redemptions in 2017 EIB Bonds Other * Measured as the difference between Distributions and change in Net Debt Solid liquidity position and low refinancing risk 20

21 Debt profile Financial overview New financing transactions in January: additional 75 M bank financing (150M total, with 50% maturing in 2019 and 50% in 2020) March: 7-year 300M bond with a 2% coupon and redemption in 2023 June: 120 M floating rate bond (maturing in 2022) and early call exercise of the 120 M Bond 2020 November: Committed credit line in the amount of 50 M December: Bank financing in the amount of 50 M MLT debt amortization profile (M ) Debt Breakdown Other Bonds EIB 11% 25% 64% Bonds EIB Other Gross debt: 2 216M BCR actively managed and smoothened its debt maturity profile 21

22 Financial overview Covenants and self-protective financial structure Net Debt (M ) Net Debt / EBITDA 1 (active restriction) \ +7.6% % 6.00x 5.75x (up to YE18) Significant headroom to lock-up Trigger Level (Lock-up) YE14 YE15 YE EBITDA (M ) YE14 YE15 YE Inputs for this ratio may slightly differ from reported figures due to the adjustments made in order to reflect the CTA ratio definitions +9.3% +7.5% Net Debt / EBITDA decreased from 5.30x to 5.25x, with net debt increasing at a slower pace than EBITDA: - Net debt increased 138M (7.0%), with distributions of 360M - EBITDA increased 7.5% Headroom to lock-up levels remained at a significant level Conservative financial management and distribution policy 22

23 Index Company overview BCR Concession BCR Contractual and Financial Structure Rating Business overview Traffic Performance 2016 Results Financial overview Liquidity Position Debt Structure Wrap-up Annexes 23

24 Wrap-up Largest toll road operator in Portugal Above 50% Market Share National coverage: includes the main road corridors with the highest importance in the Portuguese motorway network 37.2% of tolled network * 50.1% of travelled km* Ring-fenced structure Strong operating performance Solid financial position Credit protective financial structure 2016 results confirmed positive trend Conservative financial management and distribution policy Comprehensive set of covenants Trigger events and additional credit protective provisions SPV with restrictions on nature of activities and intercreditor arrangements EBITDA increased 7.5% YoY to M, supported by: Strong increase in operating revenues and Ongoing disciplined cost management EBITDA margin at 76.2% in 2016, the highest level since BCR inception Net profit up 15.4% to 91.7 M 7.0 % YoY traffic increase, driven by a robust organic growth Significant headroom to covenants lock-up levels Strong liquidity position. No Bond redemptions in 2017 Investment grade rating, despite sovereign constraint * According to APCAP figures from YE

25 Index Company overview BCR Concession BCR Contractual and Financial Structure Rating Business overview Traffic Performance 2016 Results Financial overview Liquidity Position Debt Structure Wrap-up Annexes 25

26 Annex 2016 P&L (M ) YoY Operating income % Operating expenses % EBITDA % EBITDA Margin 75.2% 76.2% 1.0pp Amort., deprec., adjust., prov. and reversals % EBIT % EBIT Margin 42.6% 44.1% 1.5pp Net financial results Profit before tax % Income tax % Net profit % Increase in profitability led by strong top line and cost control 26

27 Annex 2016 Balance Sheet (M ) YoY Assets % Non-current % Intangibles % Other % Current % Cash & Cash Equivalents % Other % Equity % Liabilities % M/Long-term financial debt % Short-term financial debt % Other % Solid balance sheet 27

28 Annexes Corporate Reorganization in 2010 Following the approval of the new Concession Contract, BAE worked with multiple stakeholders, including the Portuguese Government, EIB and other funders, supervisory and regulatory authorities and rating agencies, in its Corporate Reorganization process which led to BAE transferring its main concession to BCR and its operation and maintenance activities to Brisa O&M in December 2010: Greater ratings stability and predictability BCR is ring-fenced from the remainder of the Brisa group Comprehensive set of covenants to limit maximum debt levels Higher visibility of assets and cash flow Clearer portfolio management approach, giving visibility over the value of each business Higher business unit efficiency Better definition of priorities and objectives for each business and increased level of specific and central skills Improved concession agreement management Maximization of the economic and financial potential, splitting the assets from the servicing companies which do not revert to the State at the end of the Concession Focus on operations and relationship with the Grantor Other concessions Old Structure Brisa (BAE) Parent Co Main concession holder O&M Co Other concessions New structure Brisa Parent Co BCR (Main concession holder) O&M agreement Brisa O&M Corporate reorganization took place in

29 Annexes Contractual Structure Together with the transfer of the main concession to BCR, a ring fenced structure was set-up through a contractual framework (Common Terms Agreement CTA), which is valid for the full life of the concession. This financial and legal structure provides additional credit protection: BAE Parent Co 70% Covenants Comprehensive set of covenants, including historic and forward looking financial covenants (ICR, Net Senior Debt / EBITDA, CLCR) Trigger Events No distributions if, inter alia, lock-up ratio tests are not met and investment grade rating is not maintained Bondholders EIB BCR SGPS BCR Additional credit protective provisions, such as: Security: Pledge over shares in BCR and over BCR bank accounts and assignment of concession agreement and other contracts Liquidity reserves: Debt Service Reserve Account equivalent to 12 months of interest and amortizing debt and Capex Reserve Account equivalent to 6 months of future capex Hedging Policy: Comprehensive set of terms regarding hedging transactions Governance: Minimum of 3 independent directors, who must approve distributions and contracts with Brisa entities Other: Restrictions on nature of activities and Intercreditor arrangements Others (banks) (1) (2) Intercreditor agreement Common Terms Agreement (1) Pledge of shares of BCR (2) Pledge of company s accounts Additional information on annexes. Simplified organizational chart for illustrative purposes Financial structure provides ample protection for creditors and has now more than 5 years of proven track record 29

30 Annexes Key features of the financial structure Financial covenant definitions Three financial ratios are defined in the CTA, which are used to set default tests, distribution lock-up tests and tests for the incurrence of additional indebtedness Net Senior Debt / EBITDA The ratio of (i) Senior Debt less balances on BCR s accounts, to (ii) EBITDA for last 12 months Interest Coverage Ratio on a historic ( Historic ICR ) and forward looking basis ( Forward Looking ICR ) The ratio of Available Cashflow to Financing Costs Available Cashflow equal to (i) EBITDA, plus (ii) interest income, less (iii) tax paid, less (iv) net change in working capital, and (v) adjusted for the changes in the amount standing to the credit of the Capex Reserve Account Financing Costs equals interest and fees and hedging payments on Senior Debt Concession Life Coverage Ratio ( CLCR ) The ratio of (i) net present value of the Available Cashflow until the scheduled expiry date of the Concession Contract and the amount standing to the credit of the Debt Service Reserve Account to (ii) Net Senior Debt In addition to financial covenants, financial ratio tests also applied to determine whether distributions can be paid or additional indebtedness incurred 30

31 Annexes Key features of the financial structure Trigger Event definitions The CTA defines a series of Trigger Events, which are aimed at providing early warning signals to Senior Creditors Trigger Events include: Breach of the Trigger level financial ratio tests Debt Service Reserve Account required balance, equivalent to 12 months of debt service, not being met Capex Reserve Account not being funded with an amount equal to the next 6 months of capex Any solicited rating falls below Baa3/BBB- or the company ceases to maintain 2 solicited ratings No distributions can be made while a Trigger Event is outstanding, so as to conserve cash in the company Following the occurrence of a Trigger Event, Senior Creditors have certain additional rights, aimed at helping them to try to get the problems giving rise to the Trigger Event resolved, including: Right of access to additional information Right to appoint an independent adviser to review the circumstances which have caused the Trigger Event and to propose a plan to remedy it Trigger Event regime provides early warning system and leads to distribution lock-up 31

32 Annexes Key features of the financial structure Additional Indebtedness Tests BCR s financing structure will be a dynamic one, with new debt being raised and existing debt maturing and being refinanced on a regular basis The CTA defines certain tests that must be satisfied for the company to be able to raise Additional Senior Debt, including that: Specified Net Debt / EBITDA ratios are complied with through to the end of concession (taking into account, if relevant, that the new debt raised will be used to refinance or cash collateralise existing debt) No more than 750 M (indexed) of debt may mature in any 2-year period and, during the last five years of the concession, no debt amount equivalent to more than 50% of EBITDA for the relevant year may mature in a single year No debt may mature later than 2 years before the end of the concession Hedging policy is complied with No Trigger Event or Event of Default is outstanding (taking into account, if relevant, that the new debt raised will be used to refinance or cash collateralise existing debt) The providers of Additional Senior Debt are required to execute a Senior Creditor Accession Document so that they become parties to the CTA and ICA also The CTA contains restrictions on BCR having debt other than Senior Debt, with a carve-out of 5 M for leases and hire purchase contracts Additional indebtedness tests protect on-going credit profile of BCR 32

33 Annexes Key features of the financial structure ICR and CLCR Trigger/ Addit Debt Default Historic ICR 2.25x 1.75x Forward Looking ICR 2.25x 1.75x CLCR 2.00x 1.80x Leverage and coverage ratios valid for the life of the concession Net Debt to EBITDA profile designed to ensure deleveraging over time Levels based on years before concession end to ensure flexibility if concession is extended Ratios consistent with strong investment grade rating De-leveraging profile Net Senior Debt to EBITDA Years before end of concession Trigger/ Addit Debt Years before end of concession Default Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x Up to x 33

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