Brisa Concessão Rodoviária

Brisa Concessão Rodoviária
Investor Presentation
January 2016
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
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damages whatsoever that may occur or that may arise from any use of the Information or otherwise arising in connection with this
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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
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BRISA Concessão Rodoviária, S.A.
Head-Office: Quinta da Torre da Aguilha, Edifício BRISA, São Domingos de Rana
Share capital: EUR 75 000 000
Registered in the Commerce Registry Office of Cascais under register and corporate tax number 502790024
Investor Presentation, January 2016
|2
BCR at a glance
COMPANY OVERVIEW:
Largest toll road operator in Portugal
1 124 km, 12 motorways
Long-term concession: December 2035
Backbone of the Portuguese road network:
Includes the main road corridors with the
highest importance in Portugal
BUSINESS OVERVIEW:
Strong operating performance
Latest results confirm 2nd year of very positive
trend
9M15 traffic increased 7.2% YoY, driven by a
robust organic growth (8th consecutive quarter
of positive traffic growth)
Above 50% market share in Portugal
BCR is a SPV set up in 2010 with a
ring-fenced structure that has already
proven to deliver strong credit
protection to investors
EBITDA margin reached its highest level
since BCR inception (75.6%) on the back
of revenues growth coupled with a
disciplined cost approach
Strong cash-flow generation
FINANCIAL OVERVIEW:
Solid Balance Sheet
Conservative financial management and distribution policy
Sharp deleverage in the last 5 years
Significant headroom to covenant lock-up levels
Solid liquidity position, covering refinancing needs beyond 2017
Investment grade rating, above Portuguese sovereign:
• Baa3 by Moody’s and BBB by Fitch
Investor Presentation, January 2016
|3
Recent Developments
CORPORATE
REORGANIZATION
of Brisa Group led to the
transfer of the main concession
from Brisa Auto-Estradas (BAE) to
Brisa Concessão Rodoviária (BCR)
Traffic declined on the back of a
negative macro environment in
Portugal.
RESTRUCTURING and COST
CONTROL to protect BCR’s
cash-flow generation
2011 - 2013
2010
Dec10
Inception of
BCR with
ring-fencing
structure
Dec12
2012 was the
worst year
for traffic
performance:
-14% YoY
SUSTAINED TRAFFIC RECOVERY
and cost efficiency led to a
significant improvement in
BCR’s activity and financial
indicators
2014 - 2015
4Q13
Traffic
started to
recover
Oct14
BCR’s rating is
upgraded back
to Investment
Grade by
Moody’s.
BCR no longer
prevented
from making
distributions
Apr15
Bond issue in the
amount of 300M€
with the lowest
coupon ever for a
Portuguese Corporate
and successful
completion
of a Liability
Management
3Q15
TRAFFIC
REMAINS
STRONG:
8 consecutive
quarters
with positive
growth
Since its inception BCR faced challenging times, but the credit protective
nature of the ring fenced structure, coupled with proactive management
has proven BCR’s resilience
Investor Presentation, January 2016
|4
Index
Company overview
BCR concession
Corporate reorganization and contractual structure
Business overview
Macroeconomic context
Traffic Performance
9M15 Results
Financial overview
Debt Structure
Liquidity Position
Covenants and self-protective financial structure
Rating
Wrap-up
Annexes
Investor Presentation, January 2016
|5
BCR Concession
Largest
concession
in Portugal
Under operation: 11 motorways, 1 100 km, fully built since
2007 (only 1 motorway to be built: 24 km, link to the new
Lisbon airport)
Long-term concession, up to December 2035
A3
A4
Porto
National coverage: includes the main road corridors with the
highest importance in the Portuguese motorway network
A14
A1
Tariffs
linked to CPI
Tariffs update: annual automatic increase of 100% of CPI
(8.5% of the increase reverts to State)
A10
A13
A9
A6
A5
Lisbon
Above 50%
market share
37.2% of tolled network *
A12
A2
50.2% of travelled km*
* According to APCAP figures for YE2014
The backbone of the Portuguese road system
Investor Presentation, January 2016
|6
Corporate Reorganization
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:
Old Structure
Brisa (BAE)
Parent Co
Main concession holder
O&M Co
Other
concessions
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
New structure
Higher visibility of assets and cash flow
• Clearer portfolio management approach, giving visibility over
the value of each business
Brisa
Parent Co
Higher business unit efficiency
• Better definition of priorities and objectives for each business
and increased level of specific and central skills
Other
concessions
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
BCR
(Main concession
holder)
Brisa O&M
O&M agreement
Corporate reorganization took place in 2010
Investor Presentation, January 2016
|7
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)
(1)
BCR SGPS
Bondholders
Trigger Events
• No distributions if, inter alia, lock-up ratio tests are not met and
investment grade rating is not maintained
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
EIB
(2)
BCR
Others (banks)
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 5 years of proven track record
Investor Presentation, January 2016
|8
Ring-fenced Structure
Simplified organizational chart for illustrative purposes
Brisa Auto-Estradas (BAE)
Holding Company - No debt
(Parent company)
Brisa Concessão
Rodoviária
(BCR)
(70%)
Concessão
Brisal
Concessão
Douro
Brisa
O&M
(70%)
(100%)
(100%)
Concessão
Litoral Oeste
Concessão
Atlântico
Brisa
I&T
Brisa
Engenharia
(15%)
(50%)
(81.2%)
(100%)
Concessão
Baixo Tejo
NWP
Controlauto
M-Call
(100%)
(59.5%)
(100%)
Via Verde
Contact
Via Verde
Serviços
(30%)
Via Verde
(60%)
Ring-fenced
BCR
–
–
–
Ring-fenced structure (CTA,
covenants and security
package agreements)
Debt (Rated): EIB + Bonds +
Bank facilities
Solid financial profile
Project Finance
(non-recourse)
Project Finance
(non-recourse)
Other concessions
Services
–
Amortising long-term project finance
–
O&M expertise
–
Non recourse to Brisa
–
Stable cash-flow generation
–
NWP fully consolidate
–
Funded through Brisa
(almost no debt)
BCR is ring fenced from the remainder of the group
Investor Presentation, January 2016
|9
Index
Company overview
BCR concession
Corporate reorganization and contractual structure
Business overview
Macroeconomic context
Traffic Performance
9M15 Results
Financial overview
Debt Structure
Liquidity Position
Covenants and self-protective financial structure
Rating
Wrap-up
Annexes
Investor Presentation, January 2016
| 10
Macroeconomic Context
GDP & Private Consumption Growth
GDP Growth Forecasts
(yearly data; YoY)
(yearly data; YoY)
2016 (e)
2015 (e)
GDP
2.6%
Private Consumption
1.7%
Moody's
EC
1.7%
BoP
1.7%
Average
1.7%
EC
1.7%
BoP
1.6%
Average
1.7%
IMF
1.6%
IMF
2.1%
1.7%
0.9%
1.8%
1.5%
GDP & Private Consumption Growth
-1.6%-1.5%
-1.8%
Moody's
(quarterly data; YoY)
-3.6%
-4.0%
-5.5%
2011
2012
2013
2014
2015(E)
5.0%
2.5%
0.0%
-2.5%
-5.0%
-7.5%
GDP
Private Consumption
1Q11
4Q11
3Q12
2Q13
Source: European Commission
1Q14
4Q14
3Q15
Source: BoP
Macroeconomic environment significantly improved (I)
Investor Presentation, January 2016
| 11
Macroeconomic Context
Unemployment rate
Inflation Rate (CPI)
(monthly data)
(monthly data; YoY)
17.5%
Nov:
12.4%
12.2%
5.0% 2011: 3.6%
2012: 2.8%
2013: 0.4%
2.5%
jan-11 out-11 jul-12 abr-13 jan-14 out-14 jul-15
Nov:
0.6%
Source: BoP
Budget Deficit
2011
2012
2013
2014 *
2015(E) *
0.0%
2014: -0.2%
-3.4%
-5.7%
-2.8%
-2.5%
-4.8%
jan-11
out-11
jul-12
abr-13
jan-14
out-14
jul-15
-7.4%
* including one-off effects (such as NB recapitalization in 2014 and Banif resolution in 2015) budget
deficit was 7.2% in 2014 and is estimated to be 4.2% in 2015
Source: European Commission; BoP
Source: IGCP
Macroeconomic environment significantly improved (II)
Investor Presentation, January 2016
| 12
Macroeconomic Context
Oil Price
Average Fuel Price Evolution: 9M15
(€/liter at the pump)
150
120
-7.6%
2014
2015
90
60
Brent (USD)
Brent (EUR)
30
0
jan-11
jan-12
jan-13
-9.3%
jan-14
jan-15
1.60
jan-16
1.48
Source: Bloomberg
Gasoline
Average fuel price evolution
1.40
1.27
(€/liter at the pump)
-10.0%
-11.9%
-6.5%
-9.4%
2014
2015
1.41
1.24
1Q
1.40 1.31
1.38 1.25
2Q
3Q
Combined
1.33
4Q
1.20
Diesel
Fuel price continues to decrease, driven by the sharp fall in oil prices
Investor Presentation, January 2016
| 13
Traffic Performance
Average Daily Traffic
BCR Total traffic figures
Total traffic reported by
major European toll road operators
(YOY)
4.5%
-1.8%
-4.0%
5.7%
1.5%
-2.8%
-3.9%
-13.7%
2012
7.0%
-1.6%
0.9%
2011
7.2%
2013
2014
2.8%
2.3%
ADT
GDP
2.2%
9M2015
2.2%
2.2%
1.7%
Source: Moody’s
Strong traffic performance after an increase of 4,5%
in 2014, BCR shows the 8th consecutive quarter with
YoY traffic growth
In 1H2015 BCR reported the highest traffic growth
among peers
Recent BCR traffic performance reinforces recovery trend
Investor Presentation, January 2016
| 14
Traffic Performance
9M15 Analysis
Quarterly ADT (Average Daily Traffic)
Quarterly VKM growth
2014
21 595
2014
2015
1Q 14
2Q14
20 061
17 128
14 370
9M14
+6.5%
3Q14
+5.2%
4Q14
+4.6%
+4.5%
16 082
15 350
2015
9M15
1Q 15
13 364
2Q15
1Q
+1.2%
2Q
3Q
4Q
3Q15
+7.5%
+6.5%
+7.2%
+7.6%
During 3Q15, traffic grew 7.6%.
9M15 accumulated traffic growth at 7.2%
Investor Presentation, January 2016
| 15
Traffic Performance
9M15 detailed analysis
Average Daily Traffic
A3
A4
62 146
Porto
29 712
14 537 17 224
26 375
5 511
4 719
A14
A1
A2
A3
A4
A5
A6
A9
18 888
18 457
16 256
A10
4 201 4 353
A12
A13
A14
7.2%
8.1%
8.8%
A12
A13
A14
BCR
A1
A10
A13
A9
A6
Traffic Growth Rate (YoY)
A5
Lisbon
11.1%
A12
A2
8.7%
9.1%
8.0%
6.2%
A1
5.5%
A2
A3
A4
A5
A6
6.3%
6.1%
A9
A10
7.2%
BCR
Positive growth across all network
Investor Presentation, January 2016
| 16
9M15 Results
Revenues & Expenses
9M14
9M15
AADT (organic)
4.2%
7.7%
Calendar effect
0.3%
-0.4%
Others
0.0%
-0.1%
Like-for-like
4.5%
7.2%
Mix effect
0.4%
-0.3%
Tariff increase
0.0%
0.0%
Others
0.2%
0.1%
Total (toll revenue)
5.1%
7.0%
Operating Income (M€)
377
Traffic
346
Toll
Revenue
Traffic increased 7.2% in 9M15, which compares to an
increase of 4.5% in the same period of 2014
9M12
+7.1%
352
334
9M13
9M14
9M15
Operating Expenses (M€)
94.4
Toll revenue increased 7.0% in 9M15, above the
already strong increase of 5.1% in 9M14
-0.1%
91.7
92.1
92.0
9M13
9M14
9M15
Performance significantly above guidance (>5% FY15)
9M12
Strong performance of toll revenues, backed by organic traffic
growth. Costs under control, despite significant activity expansion
Investor Presentation, January 2016
| 17
9M15
Business
Results
overview
Operating results (EBITDA)
EBITDA and EBITDA Margin (M€; %)
9M14
9M15
YoY
Operating income
351.8
376.8
7.1%
Toll revenues
342.5
366.5
7.0%
350
Service areas
6.0
6.1
2.8%
300
Other income
3.4
4.2
26.3%
250
[M€]
72.7%
72.6%
73.8%
75.6%
80.00%
1.875.00%
p.p.
70.00%
Operating expenses
-92.1
-92.0
-0.1%
Supplies and services
-90.1
-90.0
-0.1%
65.00%
200
60.00%
150
252
260
243
285
50.00%
9.7%
100
Personnel costs
Other expenses
EBITDA
EBITDA Margin
-1.1
-1.1
-1.6%
-0.8
-0.9
4.2%
259.7
284.8
9.7%
73.8%
75.6%
1.8pp
Operating income increased 7.1%, backed by strong
traffic performance
Costs remain controlled, with Opex slightly down
despite significant increase in revenues
55.00%
45.00%
50
40.00%
35.00%
0
9M12
9M13
9M14
EBITDA
9M15
EBITDA Margin
Strong increase in revenues together with a disciplined
cost management led to a 1.8 p.p. YoY increase in
EBITDA margin, making it the highest level since BCR
inception
EBITDA increased 9.7% to 284.8 M€
Investor Presentation, January 2016
| 18
9M15
Business
Results
overview
Cash-flow generation (EBITDA – CAPEX)
[M€]
EBITDA
259.7
284.8
9.7%
73.8%
75.6%
1.8pp
18.5
31.4
69.4%
New junctions
1.2
0.0
-97%
Widening works
2.4
6.2
155%
Major repairs¹
9.4
18.9
102%
5.5
6.2
13%
241.2
253.4
5.1%
EBITDA Margin
Capex
Other (equipment,
supervision, etc)
EBITDA - Capex
1
9M14 9M15 YoY
EBITDA – CAPEX (M€)
253.0
241.0
227.0
+5.1%
214.0
9M12
9M13
9M14
9M15
Under the framework of IFRIC12, major repairs are provision costs, not CAPEX
Capex is mainly related to pavement works in A1, A2, A3 and A5
Widening works under way 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
Investor Presentation, January 2016
| 19
9M15
Business
Results
overview
Financial Results
[M€]
Net financial results
9M14 9M15
YoY
-89.5
-76.7
-14.3%
3.2
1.3
-58.1%
Financial expenses
-92.7
-78.1
-15.8%
Interest expenses
-73.8
-61.5
-16.7%
-6.0
-6.4
6.6%
-12.9
-10.2
-20.5%
Financial income
IFRIC12
Other financial expenses
BCR benefits from the positive net effect between recent
debt additions (new 300 M€ bonds issued in both 2014
and 2015) and recent debt redemptions (225 M€ in Dec.
14; 63.5 M€ bond in Mar 15; 192.7 M€ in Apr. 15)
–
lower gross debt, impacting positively ‘Interest
expenses’
–
lower coupons, impacting positively ‘Interest expenses’
–
lower placement costs, impacting positively
‘Other financial expenses’
Net financial results down 14.3% YoY, reflecting
better market conditions
Financial Results (M€)
9M12
9M13
9M14
9M15
14.3%
-89.4
-89.5
-96.6
-76.7
WACD & Fixed rate debt (%)
79%
72%
70%
4.1%
4.3%
4.3%
3.6%
9M12
9M13
9M14
9M15
61%
Lowest level since BCR inception
WACD
% Fixed
Low interest rate risk exposure
Financial expenses on a downward trend
Investor Presentation, January 2016
| 20
9M15
Business
Results
overview
Net Profit
[M€]
9M14 9M15
YoY
259.7
284.8
9.7%
EBITDA Margin
73.8%
75.6%
1.8pp
Depreciation & prov.
-123.2
-123.1
0.0%
136.6
161.6
18.4%
38.8%
42.9%
4.1pp
-89.5
-76.7
-14.3%
47.0
84.9
80.5%
-13.0
-23.5
80.1%
34.0
61.4
80.6%
EBITDA
EBIT
EBIT Margin
Net financial results
Profit before tax
Income tax
Net profit
Net profit reached 61.4 M€ (+81% YoY), backed by toll
revenue increase, controlled costs and better financial
results
Net Profit (M€)
61.4
35.1
34.0
+81%
19.2
9M12
9M13
9M14
9M15
Profitability significantly increased
Higher revenues, flat OPEX and better financials significantly
improved bottom line
Investor Presentation, January 2016
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Index
Company overview
BCR concession
Corporate reorganization and contractual structure
Business overview
Macroeconomic context
Traffic Performance
9M15 Results
Financial overview
Debt Structure
Liquidity Position
Covenants and self-protective financial structure
Rating
Wrap-up
Annexes
Investor Presentation, January 2016
| 22
Financial
overview
Debt Structure (nominal)
Debt Breakdown (3Q15)
Net Debt, Gross Debt & Cash [million Eur]
∑ 2 457
141
2 526
2 153
2 159
2 206
139
339
365
4%
310
2 316
2 216
Cash
27%
Net Debt
2 014
1 820
1 841
69%
Gross Debt
Bonds
YE11
YE12
YE13
YE14
EIB
Bank Facilities
3Q15
Gross debt totalled 2 206 M€ in Sep.15, of which 69% are Bonds issued under the EMTN programme. The 46 M€ YtD
increase in gross debt is mainly explained by:
–
A LM transaction concluded in April (300 M€ @ 1.875% issued and 192.7 M€ @ 4.5% tendered)
–
A private placement that reached its maturity (63.5 M€ @ 6.4% redeemed)
Cash position in Sep. 15 at 365 M€ (up 26 M€ YtD), with the first distribution made since inception (in the amount of
184 M€) mostly funded through cash-flow generation
Considerable net debt reduction over the recent years
(-21% or 475 M€ since YE11)
Investor Presentation, January 2016
| 23
Financial
overview
MLT debt amortization profile
BCR continues to actively manage its MLT debt maturity profile
In April, a liability management (LM) transaction was successfully concluded:
–
Issuance of a new 10y 300 M€ bond, with a coupon of 1.875% (the lowest ever for a Portuguese corporate).
Bond was placed mainly with international institutional investors
–
192.7 M€ tendered on the 600 M€, 4.5% coupon, Dec. 2016 bond (outstanding amount at 407.3 M€)
MLT debt amortization profile [million Eur]
700
600
500
Amount
Tendered
Liability
Management
New 10y Bond
@ 1.875%
EIB
Bonds
400
300
200
100
0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
LM transaction concluded in April 2015 allows for a smoother
debt amortization profile
Investor Presentation, January 2016
| 24
Liquidity position
YE2015
Recent developments
October: Distribution made in the amount of € 150 million, but keeping a significant headroom in BCR ratios
December:
December Existing committed credit line extended in maturity to 2020 and increased by € 50 million
YE15 Liquidity position
BCR has plenty of funds and facilities in place to
meet its forthcoming debt maturities:
1 € 228 million in cash
2 € 375 million in committed credit lines (all
maturing after YE16; € 300 million undrawn)
MLT redemptions until YE17 [million Eur]
500
78.0
400
300
500.2
402.7
200
3 Strong free cash flow generation
100
4 Debt maturities evenly spread
EMTN
EIB
Total
Despite strong liquidity position, future bond issuances would keep undrawn credit
lines as back-up facilities, improve debt efficiency and address potential distributions
Strong liquidity position, with MLT redemptions fully covered
Investor Presentation, January 2016
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Financial
overview
Covenants and self-protective financial structure
Net Debt / EBITDA covenants
Self-protective financial structure
9x
Trigger
8x
Revenue
underperformance
Default
7x
6x
EBITDA
decrease
5x
4x
3x
Lock-up ratio
compliance
2x
1x
Adjustment in
distributions
Jun-32
Jun-30
Jun-28
Jun-26
Jun-24
Jun-22
Jun-20
Jun-18
Jun-16
Jun-14
0x
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
Investor Presentation, January 2016
| 26
Financial
overview
Covenants and self-protective financial structure
Net debt reduction coupled with increasing EBITDA led to a substantial Net Debt / EBITDA decrease
over recent years
Despite distributions, headroom to lock-up levels remained at a significant level
Net debt / EBITDA1 (active restriction)
6.50x
6.25x
6.00x
5.75x (up to YE18)
6.44
Significant headroom to
lock-up
5.98
5.38
YE13
1
1H14
YE14
5.49
1H15
Level of
Trigger/Lock-up
c.5.3
YE15 (e)
Inputs for this ratio may slightly differ from reported figures due to the adjustments made in order to reflect the CTA ratio definitions
Conservative financial management and distribution policy
Investor Presentation, January 2016
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Rating
BCR Rating evolution (Moody’s)
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Baa3
Ba1
Ba2
Ba3
B1
Credit Opinion (8 June 2015)
Stand-alone rating remained
at investment grade level
Baa3
IG
Ba1
Sub-IG
“(…) best performance among Moody's rated
European toll road operators over this period. (…)
improvement in business sentiment in the
Portuguese economy and growth in domestic
consumption, also helped by a decline in fuel
prices.”
“(…) we expect BCR to follow prudent financial
policies and maintain adequate headroom against
its trigger levels, which will become more
demanding over time.”
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
BCR Moody's
Current
Outlook
Rating
PGB Moody's
Industry Outlook (8 October 2015)
Current
Rating
Outlook
Baa3
Stable
BCR
BBB
Stable
Baa1
-
-
-
Ba1
Stable
BCR (stand-alone)
Portugal
BB+
Stable
“Traffic at toll roads and airports will continue to
grow, driven by improved economic activity and
business sentiment.(…) We estimate toll road traffic
to grow by 2-3% in France and Italy and
4-7% in Iberia in 2015, followed by 0.5-2.5% and
2-4% respectively in 2016.
Investment Grade by Moody’s and Fitch (above Portugal).
Without sovereign constraint BCR rating would be higher
Investor Presentation, January 2016
| 28
Index
Company overview
BCR concession
Corporate reorganization and contractual structure
Business overview
Macroeconomic context
Traffic Performance
9M15 Results
Financial overview
Debt Structure
Liquidity Position
Covenants and self-protective financial structure
Rating
Wrap-up
Annexes
Investor Presentation, January 2016
| 29
Wrap-up
Above 50% market share in Portugal:
Largest toll road
operator in
portugal
–
National coverage: includes the main road corridors with the highest importance in the
Portuguese motorway network
–
37.2% of tolled network *
–
50.2% of travelled km*
Credit protective financial structure:
Ring-fenced
structure
–
Comprehensive set of covenants
–
Trigger events and additional credit protective provisions
–
SPV with restrictions on nature of activities and intercreditor arrangements
9M15 Results confirms positive trend:
Strong
operating
performance
–
7.2% traffic increase, driven by a robust organic growth (8th consecutive quarter of positive
traffic growth)
–
Increasing revenues, flat opex and better financial results significantly improved profitability,
which is now close to pre-crisis levels
Conservative financial management and distribution policy support a solid B/S:
Solid financial
position
–
Sharp deleverage in the last 5 years
–
Significant headroom to covenants lock-up levels
–
Solid liquidity position, covering funding needs beyond 2017
–
Investment grade rating, despite sovereign constraint
* According to APCAP figures from YE2014
Investor Presentation, January 2016
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INDEX
Company overview
BCR concession
Corporate reorganization and contractual structure
Rating
Business overview
Macroeconomic context
Traffic Performance
9M15 Results
Financial overview
Debt Structure
Liquidity Position
Covenants and self-protective financial structure
Wrap-up
Annexes
Investor Presentation, January 2016
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Annexes
9M15 P&L
[M€]
9M14
9M15
YoY
Operating income
351.8
376.8
7.1%
Toll revenue increase comfortably above
guidance
Operating expenses
-92.1
-92.0
-0.1%
Opex change in line with guidance
despite significant increase in revenues
EBITDA
259.7
284.8
9.7%
EBITDA Margin
73.8%
75.6%
1.8pp
Depreciation & prov.
-123.2
-123.1
0.0%
136.6
161.6
18.4%
38.8%
42.9%
4.1pp
-89.5
-76.7
-14.3%
47.0
84.9
80.5%
-13.0
-23.5
80.1%
34.0
61.4
80.6%
EBIT
EBIT Margin
Net financial results
Profit before tax
Income tax
Net profit
Highest EBITDA margin since inception
Lowest level since inception
All resulting in significant increase
of profitability
Higher revenues, flat opex and better financials significantly
improved bottom line
Investor Presentation, January 2016
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Annexes
3Q15 Balance Sheet
[M€]
Assets
YE14
3Q15
YtD
3 155
3 085
-2%
2 725
2 635
-3%
378
397
5%
52
54
3%
727
561
-23%
2 428
2 524
4%
1 956
2 036
4%
Short-term financial debt
182
146
-20%
Other
290
342
18%
Non-current
Current
Deferred tax
Equity
Liabilities
M/Long-term financial debt
Current assets include
€ 365 million in cash
Impact of the distribution
made in April
Solid balance sheet
Investor Presentation, January 2016
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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
Investor Presentation, January 2016
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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
Investor Presentation, January 2016
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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
Investor Presentation, January 2016
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Annexes
Key features of the financial structure
ICR and CLCR
Net Senior Debt to EBITDA
Trigger/
Addit Debt
Default
Historic ICR
2.25x
1.75x
Up to 22.0
6.50x
Up to 20.0
8.00x
Forward Looking ICR
2.25x
1.75x
Up to 21.0
6.25x
Up to 18.0
7.75x
CLCR
2.00x
1.80x
Up to 20.5
6.00x
Up to 17.0
7.25x
Up to 17.0
5.75x
Up to 16.0
7.00x
Up to 16.0
5.50x
Up to 15.0
6.75x
Leverage and coverage ratios valid for the life
of the concession
Up to 15.0
5.25x
Up to 14.0
6.50x
Up to 14.0
5.00x
Up to 13.0
6.25x
Net Debt to EBITDA profile designed to ensure
deleveraging over time
Up to 13.0
4.75x
Up to 12.0
5.75x
Up to 12.0
4.25x
Up to 11.0
5.50x
Up to 11.0
4.00x
Up to 10.0
5.00x
Up to 10.0
3.50x
Up to 9.0
4.50x
Up to 9.0
3.00x
Up to 8.0
4.25x
Up to 8.0
2.75x
Up to 7.0
3.75x
Up to 7.0
2.25x
Up to 6.0
3.25x
Up to 6.0
1.75x
Up to 4.0
3.00x
Up to 4.0
1.50x
Up to 2.0
2.50x
Up to 2.0
1.00x
–
Levels based on years before concession end
to ensure flexibility if concession is extended
Ratios consistent with strong investment
grade rating
Years before end
of concession
Trigger/
Addit Debt
Years before end
of concession
Default
De-leveraging profile
Investor Presentation, January 2016
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