Q4 2019 Earnings Call

All participants are no listen only mode. There will be a presentation followed by question answer session.

I should ask a question you'll need to press Starkey followed by the number one on your telephone keypad.

I'd now like to hand, the conference over to Mr. Graham buttons, Chief Executive Officer. Please go ahead.

Thank you operator, and good morning, everyone.

I'd like to thank you all for joining us this morning.

And with at least for them to 2019 full year results.

2019 was the big year for epithets area, we started by successfully internalizing management on one April.

Let me finish the year with the successful capital raise to support the I see double a transaction.

Which will tell you it's become completely independent from Macquarie.

In this presentation, we will take you through the financial performance and the operational background. So this isn't the result.

It was what to expect from Twentytwenty.

Moving to slide four in todays agenda.

Let's start by but then you can see highlights the 2019.

Well, then and I listened today lineal too.

For a discussion on T. financial matters.

Well then talk through our operational progress during 2000 and I'd say.

Likewise, with an overview that strategy and the outlook for the remainder of the you.

Opportunity to ask questions. We'll then be provided.

Turning to slide six.

As we stuff I want to take this opportunity just thing so terrific same way having flight.

It is worked tirelessly and passionately over the past is to deliver such strong results and real transformation for shareholders.

There is evidence that we have successfully built a new organization in a short space of time.

Friendship older they reduced costs and deliberate on important strategic objectives.

On one January last year, that's without Syria was managed fund with Florida.

On one April the new internal management team took over operations.

By removing Macquarie as managers Atlas, Ontario management costs has reduced.

I'm 100, and put a million in anything.

47 million nice thing.

That's including old to see takes from Macquarie. She is as well as corporate head office.

And finally as of November.

2019 episodes here excuses agreement.

For a further 6.14% interesting I'd be double up.

Thus increasing up hurdle engine so 31%.

Market capitalization grew by 2.6 billion during the year.

Andy nearly 6.9 billion.

Which includes the 1.35 to you in capital raise in November.

We're very pleased to announce today.

It will be increasing distribution guidance for the second part 2009, saying.

That's a tough 20, 25% to 6% from that announced in November.

Humaid distribution payments in 2023, 20% or some nice paid last year.

We also launched a rate case the dollars Greenway final outcome, which is anticipated to be Reis se hearing twentytwenty.

As we know culture is critical to the success of any business.

Since commencing the internalization journey. This thing they take focus is but so and the board.

We have developed a strong corporate culture through the implementation of the vision and values.

Which is laid the foundation for growth ahead.

Underpinned by the strength about same businesses, and our vision and values with whom we focus on delivering a sustainable and profitable future.

We have developed a consistent strategy for growth, which I believe we'll continue to unlock value for shareholders.

Other stakeholders moving pool.

Turning to slide seven.

Overall weighted average group traffic was up <unk>, 0.7% for the year.

Please revenue outside 2.5 to thing.

When we reported weighted average proportion as David Yeah.

923 me.

3.1 person for the year.

Performance was underpinned by 80 double a which has continued to perform well increasing traffic, but just what are the ones offensively.

The Dean will talk more about the financial results.

Moving on to fly day. So I mentioned previously we completed the successful 1.35 big capital raise in November last year.

Well completion to be a pick up a lot of transaction.

You simplified shareholder arrangements and negotiate.

Moving old historical option and all remaining management agreements with Macquarie.

Terminated providing us with direct government.

Transaction was subject to anti trust clearance from European Commission.

Foreign investment control clearance from the French Ministry as the economy.

I'm very pleased to see approvals, we received earlier than anticipated in mid February and completion is now expected to occur next week.

Hopefully a birthday present for me.

As part of this transaction it was a great refinance the authority that so just a near term amortizations obligation and bring put incremental cash flow.

This transaction was completed last week.

And we will talk shortly about what this means as part of our capital management strategies.

I wish to recap on the benefits of this transaction because it is a game changer for.

Not only does it increase our position in nicely double a it gives us direct covenants. So they decide to that total investment.

Finalizes the removal of mcclaren.

This means we will be a truly independent polarized and or an operator moving forward.

And the transaction is immediately cash flow and value at Tracy.

With that outlined on slide nine I previously noted.

I'm very pleased today to announce an increasing distribution guidance it two cents to secure <unk>.

To be split between the second half 2019 distribution.

The first half Twentytwenty distribution.

This represents an increase of 6% on previous guidance provided at the time about capital raise in November.

And a 20% titled increase on dividends paid in 2009 thing.

The guidance is of course subject to future business performance foreign exchange movements and off effect.

In determining the appropriate level of distributions to pay a shareholder.

Management and the board take into consideration the number effective.

Consistent with a minute capital management strategy.

Doing well.

I will discuss later in the presentation.

Yeah, sorry, refinances provided us with additional free cash flow and we've chosen a phone a portion of it.

Shareholders, It's Tom.

The remaining free cash flow will be applied towards other capital management initiative.

There's a longer term goal of including sustainable distribution growth probably the Tom.

Turning to slide 10, as we discussed.

We think very focused on the seven wishing her vision and bags.

Sustainability is a part of.

And it is an important milestone.

But last year, we developed out I know you see frame, but.

The target specific ER business based on feedback from <unk> stakeholders and Oh.

We wanted to ensure that we had and he is cheaper anyway, because this pilot a discipline.

And focus on a small number of important issue that will add value to shareholders.

Over the longer term.

New the S.G. framework is focused on for the a priority.

Safety will of course continue to be a number one focus.

Well you want that same members.

And then to be safe, it would and when using out right.

And this is fundamental to everything we do.

The framework will focus on customer and community engagement.

Turing weeks Nexsan unity <unk> site in foster Transload auction.

Improving the workplace rally people by fostering an engaged celebrities and does it looks like.

<unk> minimizing our environmental impact for environmental stewardship.

I knew is cheap framework will be enabled by cold fundamentals.

Covenant culture sustainable growth.

Technology and innovation.

Slide 11 is provided examples of some of the great outcome, we achieved in 2009 thing.

Against the four priorities as I read the tea framework.

As I mentioned.

Very focused on safety throughout our network because many initiatives taking place in 2019.

We are ahead are extremely disappointed so do they see double a we had a debt at the subcontracts a control construction site during the year.

And we're working through updated action planning with the contracts are involved.

And this becomes a key.

And it's about direct engagement and governance.

The double a become actively involved in occupational health and safety and five control it's going to become.

Namely unfold.

With that I'd like to now hand, Davidson that Dean.

Got that financial performance for 2000, I'm not saying thank you.

Oh, that's the thing that's presented a income second city, yet and the whole type presented an adjusted segment shaking out we think normalized earnings it looks like what are your especially the statutory earnings adjusting for abnormal special I can tell you anything she part of it.

Yeah.

Correct Yeah.

I never get hot wake hold a nice Washington.

The press or would that be nice locker essentially reflects several payable I guess, they're paying for that.

And our normalized basis, we saw net profit after tax at 170 I'd like to me because I know I've said I take that they're not.

Hi, This is a very family dollar.

And I'll just touch on a few items, which contributed to the normalize itself. It's all about some of the high velocity.

Total revenue increased by 19%, reflecting validation of finite and 9 million in currency impact, which I'll wake up performance from the grain way.

Other revenues, which can have started persisting quite well I have been impacted deep Harry it by accounting adjustments, which you see if rates well adjustment.

And they feel like sort of Greenway and the Dallas, Alright connector project and they did they send what's the right we'll talk about where we think 16.6 million yeah.

And this is the largest try to city out within the top line Austin as it was in the hockey result.

Moving down the income statement call.

The business operations line reflects primarily the operating cost I think greenway and bond <unk>.

A 44% increase yeah looks like science 16.6 million, it's a cold.

Like about huh.

I'm, assuming any currency impact and the consolidation that saw nice.

At corporate color, but I can't point 6 million city, yet reflect the ongoing costs associated with the general management at the Atlas that period season.

And explain any of them Macquarie say [laughter] costs actually had if we can satellites action and with Chinese kinda like bashing cost to carry for why the line, which you can say that with a check point 3 million all of which we're fortunate that tough itself.

Well with Macquarie say, just try to mass Naismith faith separately.

Okay, That's still China, South Korea line, that's why a part of the cost side official fighting I think I picked up a lot transaction and its Graham mentioned the transaction is expected to quite nicely.

In addition, there will be replacement costs and athletes like that in November.

Oh here as you think about Twentytwenty, it's a perfect and think about some of the fortune policy on Garen. Thanks.

Good.

[laughter] shot at the corporate costs don't Wanna, Corey Phase 2019, with sites 67 million in Mexico.

Well, just writing down the income statement again, coupled with a couple than high velocity at 30 change supports it makes it less decided to take any payment as 100, if he's saying in U.S. It was across everything he don't bring my holding.

And there was nice said are intended to be December so the difference between what you say in a hot here result in a starting over time and what you see yeah, but just the 165 point Fourmillion, It's just foreign exchange differences [laughter].

That's probably I can't I could give a lot transaction, we executed a currency hedged contingent on the completion date for the transaction. So just accounting for these contracts. We saw the 5.3 million you can say that it makes sense before yearend.

I, just Texas I think what was notable items you can clearly see the link between what we think about in a more normalized sets up a former necessitate result.

Moving on I see that awhile.

On slide 14 without wanting to performance that I think the last 2019.

I did have a lot contributed nearly 86% to that portion of revenue and continues to underpin at castlight.

Unusually strong performance in effect top 3000 I.

I made a one cents pulling traffic set assessed huh.

I bet, a comparison period on a strong fourth quarter Appalachia.

Led to a 1% increasing traffic for the food yeah.

Revenue increased by 3.9% also off the back of totaling crisis and continued focus on operating efficiencies sold to 3.6% increase in agency I'd say that.

It wasn't touching on the substantial reduction in the net interest expense.

Right, Okay, and that's across the structure, including Olivia fiery debt has increased by 466 million you're right that we increased cash balances net that's actually decreased.

By around 250 million you're right.

The debt programs also being supported by substantial commercial type of programs negative yield to maturity must talk about that in the minutes.

Just as a reminder, the 7% cost of the sorry debt in 2018 reflects a lot period before <unk> sorry, as a 3.2 billion any interest rate hedges that were put in place before that it reductions that happened in 2012 insane.

Well the average cost of debt across I picked up a lot was 1.5% for 2000, 19.9% for sorry, and olean it was around 1.4% across the structure.

So moving on then talk about the I.T. double our capital structure.

What kind of outlined on slide six Jane.

Yeah, Hey, Ray centric I my credit ratings I picked up a lot in November 18.

Featuring a sound if I'm honest writing in December last year and again in February following the refinancing.

And I did have a lot clearly still has sufficient balance sheet flexibility for a couple of right.

Never happened so I'm trying just to the balance sheet. Since December I'll. Just quickly took you through nice try and just the schools I presented in the shot on the West Ham size that's life.

Well as shown on the shot in the dark Blue dotted line you can say, they're about 20 to 23 time instead of could in January yeah.

It's a recently announced I see double successfully issued 500 million euro bonds in early January just yeah, with a negative yield to maturity and maturity date in 2023 and as you can say there.

500 million blocks, you can refine it see now I think things right.

In terms of remaining refinancing for Twentytwenty.

This is primarily the current short term revolving commercial type of program, which at yearend without to 1.2 opinions.

Shifting focus that sorry.

We were very pleased turned out to refinance the v., sorry that last week, the fairing Amortizations twice right.

As you can saying with the grain of salt headline thoughts in the shot you haven't talked question for a call has changed from the 150 million in 2020 enough 160, meaning 2021.

The electric Blue Bell.

The refinery currently China is occurring in 2025, but there aren't any one year extension I'm just talking although it sends it previous facility was reclassified you know.

Turning now to the grain why.

As outlined on slide six thing given the traffic before the growing why did not make the one you walk up 15 29 times.

However, as a result of a reveals a capital on Magnus plants were able to reduce the estimated capex and fund our 10 and 20 and we just have free alone upset.

And as you can say from a child her loans have been fly talking to one year lots has become easier. This year on next year as it gets set up for Quanta a law.

So the grain level required around that 70 to 73 million U.S. dollar of net toll revenues yeah. The path for one year.

But they'll be not totally crazy. She said traffic will really be important driver if our ability to pass the test as well obviously company controlled.

There is 79.3 million of locked up capital given the green lights that wouldn't be available for outside very possible walk up to something top almost fully talk about a couple of minutes of flat.

Okay now back half for.

I can currently so our investment in I picked up a while.

The cash flow waterfall slide 17 illustrates again, that's lost cash that is calculated from the numbers that you say in the consolidated financial statements I picked up a lot.

We develop it for a full forever previous without further traction distressed Easter everyone understand passionately <unk> operating expenses to the shareholders I.

We have some really good feedback coating put or they can yeah. So looks like the movements in cash <unk> gene.

Just tonight. These numbers do not include any impact attached form or as a result for the capital Rice appeal, only having a little ones coming from they'll phrases huh.

As you will be aware dividend distributions from French companies are fixed to the company net profit after tax.

Importantly, this is company net profit after tax and all this consolidated position.

Definitely saw on the West 10 side, we see I picked up a lot consolidated in the pet Mr. He gene.

It was 440, yet and again you're right.

This can be sending a half your account.

If you take 25% of if you get to 112 million you're right that was reported that.

I think that a lot subsidiary the pay their accounts on a French gap, which 90 employed a variety of different accounting adjustments, including IFRIC 12, which I mentioned, though.

In addition until 2020 straight there is just having a difference between the consolidated an individual in pet floors at around 40 million euros huh.

So if you pull any adjustments to get off take 25 to kind of if you get the 19.3 million you're right removals consolidated adjustments, which is the second bookings right.

Well I think there are married I'd eat up a lot company in Pat is 370.9 again. It was 25 cents, a 93.7 million, which then becomes a cash that sports free to holding structure.

As you can say, they're a financing costs to come out of that and see if sorry debt.

Syntax and all of them on Paul.

And then we can but the remaining 71.3 million to all the dollars, which gives US 114 point I mean, all the doors.

And at the thought here at distribution from that's true and that's the festival in after the line.

We received 300000 Aussie dollars in management phase from Avodart.

Then we take out the knievel financing payments of course management say corporate costs and various other true.

It's been stars and net cash inflows for the house, excluding as I mentioned the capital right now.

The net cash in floors with the I'd be 6.3 million you can say that.

Reflecting performance in the first half with type 103.5 meeting distribution during the second half of Yep.

They give us any final closing castrol somebody that was South Korea head office 60, now if you're trying to reconcile numbers from the annual financial statements.

Just as a reminder, these cash flows that I've walked through a second half cash flows on like.

Because those are the hurricane you construct the first half numbers, which we provided in the presentation Uh huh.

With the numbers in need to try and that will give you. The annual passport and you will say they can the investor reference back on pricing.

Turning to slide I tight.

Which is that capital management strategies.

Three 550 as far as yet we'll bring forward cashless outlets I carry out over the next few years.

As I said, the grain white, you'll find cash look up because it needs to posses trade financing pets.

[laughter] the one year walkup tested the ended the year cash will be available to distribute in 2021.

So how do we think about the way in which we usually additional cash flows out of winning that business off at distribution from my shareholders.

And as I said previously considering to live with future distributions with focus on building a business that create assignable growing distributions by the time and we want to wish will strengthen our underlying business is really supports a sustainable distribution growth that we're talking about.

We do not many cities now so specific you're on your distribution growth targets.

So when there's additional cash rents arise as you'd expect us tree, we will consider most appropriate you said that.

But just talking about three points that we really used to consider that.

Firstly the board wants to my soul of the fourth wants to make sure that the company mines highest adequate liquidity to protect against financially well also supporting they need it makes it would be enough.

And that's what's talked about quite a bit we intend to came at least <unk> coverage on about Chase a cup of coffee interest obligations.

Secondly, appropriate gearing is important.

In order to create assignable distributions or would you squeeze it won't be preferable, it's Dallas and bar, it's about a sustainable distribution floors.

We also have the middle facility with all the time needs to be considered in Washington, you haven't Dyson profile at a sorry at any future growth that I picked up a lot.

Firstly my tank capacity said about funding or the time from various different markets, including debt and equity funding is important so that we have flexibility you're going to write capital to support airport.

We do not intend to cage cash on the balance sheets, it cannot be used efficiently manage liquidity or create value for shareholders.

So again, it's sustainable district group distribution growth over time studies out quite yet.

An example of how we bring all of these together I have things they refinancing of the if I read it and management has provided got US an additional three cents so security for distributions to be tight in 2020.

Hi, this demonstrates their attention to strike that balance between distribution growth and long term sustainability.

Well I have actually grinding halt for operational upside growth, but again as well.

Thank you knitting.

Turning to slide 20 like old businesses, that's without serious results in gross I believe its phase providing value to our customers.

Okay, we offer superior experience traveling on that right.

And with congested full speed limit the alternative troubled was.

As you'll see on the flaws Paula we are very focused on continually improving our businesses.

Enhance the experience and benefits for our customers.

No no looks as good double a in more detail on slide 21.

As many of you know this is an expansive network across the southeast of friends.

That's can be seen on the chart on the right hand side. This is flawed basically double a provides customers with excellent value for money fund it took longer to basis.

Compared with all the French tolerance.

The cool idle acts appears relatively high so because nearly 23% of idle assets totaled tripling just some of that but.

And it's effectively it's a mutual route in Philadelphia area.

Turning to slide 22, we show the longer timeframe Tonight, the double a light vehicle and heavy vehicle traffic.

Last April traffic through this year is that just over 1%, which was a positive results given the very strong 2018.

Performance, we've already mentioned.

Heavy vehicle traffic continued to grow through 2009 said.

Well they more in line with historic trend.

The fourth quarter was adversely affected by the involved into truck drivers in the strikes against suppose French government pension reform.

Yeah, I'd be double a network continues to benefit from the strong underlying fundamentals driven by French household incomes.

And French manufacturing growth.

Turning to slide 23.

Well I, increasing customer satisfaction with improved some indications, but variable message fun.

Electric charging stations why five rest stops in this division the top who hockey.

The lower overall environmental impact I see double a has continued to create value for all stakeholders.

Overall focus on efficiency continues to improve congestion and customer satisfaction.

Which is also lead to improved margins.

The number of examples on the fly touch on some of these initiatives.

Such as automation to toll collection, an increased number of customers using electronic toll to.

Yeah, I see a project is expected to be freight flow tolling will set the stage for improvements across the network in the future.

As you can see from slide 24, maybe talk a lot has received approval from the regulators in France regarding the off the acreage it.

We expect the council of sites reviews refer to the final approval during the first quarter is slated twice.

I see I will take around two and I'll hop used to do and as I mentioned will be the first free flow totaling concession friends.

Laying the ground customer experience improvement so you could double a network.

During the year I'd be double a complete as a number of projects some of which are outlined on the slot.

Oh, so a number of projects due to be completed over the coming years.

Notably the completion of the right widening between from offer on the electorate in.

In mid Twentytwenty lung.

Enhancing the overall experience and safety about comfortable.

Turning to the Greenway on slide 25.

Greenway remains the fundamental part of the Nicolas and love themselves.

Over the surrounding free road Nicholas continues to expand and just get to stabilize.

Well it sounds like it has a pretty broad economic development strategy, including promoting mixed use.

Slide medium and high density developed along the card.

The thing further residential and commercial property developments along that road.

This remains a good long term story for the future, it's a green light business.

Well on the Standalone basis Greenway amazing hopefully.

As you can see on a per mile basis. It off is very good value for customers.

Having said that we believe the regime, but just some place tolling.

Provide better values, so customers over all the long term.

Turning to slide 26.

For the year was a little disappointing overall traffic was lower than 2000, the nice thing by 2.9%.

Total revenue down by 1.2%.

However, a number effectively this outcome, including price rises on the T. Rowe.

Right, which we estimate.

Surrounding Nicolas improvements during the year.

As mentioned today, if you recall.

The operational review of the Greenway W series assistance in prisons initiative.

We've been implementing during the second half will continue to work on June 2020.

Just have it remains a challenging business.

The post dosing regime at the Greenway spot on so generally twentytwenty.

We launched direct faced with the regulator in December.

He picked tolling places for 6% to 7% Brian.

Hello peak increases of 5% to 6% for them.

Regulator thing you guys see see works through a process to determine the funnel tomlinson.

We expect to take effect from one January 21.

And run through the end of 25.

Yes, we see that currently working through they approach.

We anticipate an outcome at the end of the good.

The search for a new CEO used for the Green light is progressing well, it's a very strong shortlisted how does it seems like.

We hope to make an announcement to this led to kind of choice.

Turning to slide 27.

We're undertaking several different approaches plays into the Green was.

So these conditions during peak.

This is being undertaken to improve the overall customer experience.

At the Ace in the first phase Ctr connector project.

Completed during the second for 2019.

In phase two study with completion expected by the end of the you.

This is already showing improvement.

At the with them into the Greenway, we started to work to alleviate often to based on just.

With the Greenway images on at least 35.

We have two projects thing for me.

Reconfiguring, the greenway offering and widen the middle East 35.

We have now started as they split up two separate projects so the mix to use it.

Finally on slide 20, I found the tunnel in Germany.

Continued its strong traffic growth due to the right, but some completing the fruit during the year.

Once fried works is completed we expect longer term traffic, but to return the historic slip.

Despite its strong financial performance.

It's excess cash from this business continues to be used to reduce it.

We are continuing to examine opportunity to better manage.

Moving onto the apples to apples Syria.

It is the start of the new era for up and shortly we will begin independent.

Slide 30 outlined a high level approached creating value for shareholders.

Oh strategy for creating value is clear we set out to streamline the current structure.

Adopt a disciplined capital management approach to build sustainable distribution.

Undertakes active operational management.

Links to know weighted average concession long.

And diversify and manage risk.

In 2019, we built a new coal could change.

Managed to save money transfer management arrangements.

And delivered strong underlying performance.

We secured arrangement to increase that without serious interest in IP double.

And become a truly independent fruit.

Ending old management agreements at Macquarie.

We now turned our attention to other strategic priority.

If lengthening our average sufficient.

And diversifying risk.

While continuing to add value through active management business.

We will focus on diversifying risk say endeavoring to create sustainable distribution of all of that business.

Moving on to slide 30 wells, our approach to investment opportunities in the criteria to the does not change.

Having a rigorous and disciplined approach to investment opportunities.

Allows us to ensure.

They were looking up to shareholders and create long term they.

We have recruited a low because then should see strong experience and considering the merits of each opportunity.

So your traffic forecasting operations and maintenance.

Oh finance.

As I sit in August this is an approach to the same friends of mine through the whole leadership team.

Our strong valuation discipline with demonstrated the AC double our transaction.

Hey, we took out time to ensure we achieved a now so it was a crazy to shareholders.

Moving on to slide 32.

As you would expect where across many opportunities to broaden and diversify our portfolio of businesses from time to Todd.

Any new opportunity must absolutely Mesa safety subject.

Our preference is to expand upon our existing platform, there's opportunities to grow within existing businesses.

For example, a geography a project in France, which is expected to have a couple of calls around 600 medium.

We also continue to look at opportunities to expand our portfolios in geographies that makes sense.

Many cities around the world a highly congested.

Which provides us with the opportunity globally, but.

Well, the covenants and gauge staging with private investors in privatization discussion there also asset recycling helps true.

Turning to slide 33.

We have achieved a loss in the short place to Tom.

Great team and strong business.

We continue to grow revenues and deliver long term bags.

We are focused on a broad range of activity across our businesses.

All of which we've outlined today.

These activities are focused on improving the quality of Bernie.

Distribution and overall value enhancement for that business.

I would like to touch briefly on the matter that is relevant tool businesses operating globally at present.

That's the Corona bar.

The situation is obviously evolving.

And we have been monitoring it closely.

If we think about a double a week 2300 kilometers abroad.

The material risk is any sort of regional shutdowns from say in the range and that may prevent people traveling with in France.

The other hand may simply be the people choose to draw it rather than using public transport options.

So this could increase dresses.

Of course, there are many pay mutations in between.

If it starts with the spread to the U.S.

The biggest fits for us would be significant parts of the word for working sometimes give them. Some musa nature of about rose the.

Obviously, the full impact as far as to be on nine for some time.

However, given the exposure to I think though we believe the impact on our business more reflective.

General economic activity.

And more defensive than many other sectors.

We will continue to monitor the situation and update them up and that's more information becomes available.

Importantly, we had the liquidity to absorb a significant disruption to the road.

As a consequence of the potential let's say the CROI end of on it.

In conclusion.

I also saw Cheerier office exposure to stable G seven GDP growth.

As long term linkage to inflation.

It continues to be an exciting time for our business.

The total shareholder returns love to 32%.

And the 20% increase in distribution focus to be play in 2026.

The team is looking forward to continuing to evolve the business from the strong foundation, we have built.

And we'll continue to focus on adding value for our shareholders into the future.

With that I'd like to hand back to the operator, so loud analysts and investors to ask any questions you might have.

Thank you.

I wish Casco question. Please press star one on your telephone and wait for your name skin <unk>.

Have you wish to cancel your question Please press star too.

Sure on a speakerphone, please pick up the handset to ask your question.

The first question comes from Rob Cool with Morgan Stanley. Please go ahead.

Good morning, everyone. Thank you very much for the the presentation and the M. on roughly CLIA disclosures is pretty much appreciated.

Talk just and Graham. Thank you for your comments on uncovered 19, obviously very sensitive and developing just wanted to be clear. So you got in statement for this year does that explicitly exclude and any kind of estimated impact.

On your right networks.

Yes, it's an unknown so are we comfortable cost benefits.

Okay and could you, possibly come in on they networks linkage to easily I guess way things a little more serious.

And obviously, we do have a topic that come through the mobile funnel into next season.

With us for all three Switzerland.

The point I would make is that when you look it's.

Origination origination and destination for traffic.

Sarah there are many payers that which Italy is softball.

Oh, yeah understood. Thank you all right if I can ask a question stealing in the European region, and possibly more of an accounting style question send the Dane.

I'm just thinking about the provisions in the IP and right paying now and I understand the change in that year on year, which is a function of accounting and the discount factor, but could you, perhaps just give us a sense over time would that provision number be increasing or decreasing over time just to help with that.

Total calibration that's nice.

Yeah, Rob I think it's really hard for me and I kept prediction on that front. So I think the best thinks that they always have a look at I mean, you want to San had a pretty surprised that boy.

And what is trying to generate in flatlining some of the expectations around capex going through the Panelled, sorry, I think that's really what we can site.

Okay. Thanks, Alright, and then moving to a Virginia and I guess today, so thinking about the overall tell burden on nitrogen switch I see is one of the kind of SCC criteria for the total increase application and with more told rights at more more Roger.

And then DC area beat being told can you give a sense of how you think about that that overall television and a and if you can how do you guys see she thinks about it.

So yes, Ccs role is to tradeoffs is a regulated business. So.

It does not consider liberal told that.

They made the submission late in life pumping.

That's not the fundamentals basis on which fell toll application.

Okay, No worries sounds good and then as I recall, it will separate discussions in relation to.

Or the the total escalation agreement Oh, Oh boy outlook beyond just kind of reshaped PVH Lisa.

Josh and various other members of the government. There is there any update on on that front.

Rob will make the show last question, if you don't mind a show the.

Hey.

The issue with the with the Dod is given where we have formed on the legislation is there's a continual a political discussion and debate.

We announced in late 2000, and I've seen a concept to put this in space tolling, we continue our dialogue at various.

Levels of closed the door.

Loving County, and so representatives in the Senate and.

And representatives potential solution, obviously, if we get to a point of the evolution of those two something societies and and Implementable. We will obviously make the an announcement at that point in time.

Okay, great. Many thanks guys.

Thank you.

Yes that if you wish to ask a question today. Please limit it to two per turn and then rejoin the queue <unk>.

The next question comes from C N milestone from Macquarie. Please go ahead.

Good morning, guys I'm, just trying to 20 touched price on your sustainable dividend comments, you talked about de gearing greenway worn out and interesting minimal NIM nibbles amortization.

Can you maybe give some color how much value accretive in a world where a lot as it did he speaks right.

And that you guys tend to get on the fixed rate debt [laughter] discounts.

So it's that would be a simplistic analysis of what we're trying to achieve obviously how focuses on creating sustainable increasing distribution.

And value accretion to investors and.

That's a fundamental place on which we always said any see leveraging.

Opportunity or restructuring opportunities.

[noise] any mature in the case told bomb Graeme White House <unk> progress because that was one way you you youve talked quite extensively in the past about looking at that.

Play, we have arranger options on the table, which we're working through.

We have a fairly clear perspectives as the direction, we're going in and when we execute that obviously, we'll announce to them often.

Okay.

Thank you for the next question comes from Simon Mitchell with P.S. investment Bank. Please go ahead.

Good morning, I, just don't tell the screen why given the importance of traffic to hitting that M.C.

Ah ratios.

Lets touch on you did I performance and just how you're thinking about tropicana's here.

So as you know you Simon we issued quarterly traffic numbers, which will be in.

Mid to late April and that's probably the first point of which we saw it on traffic for this year.

But I guess, given there was a quarterly calling a last quarter of lochee.

Okay great.

I expect that those declines have east all stopped.

Well you just comment at all.

Oh, sorry, I think you have a little bit the comparisons to 2019 were starting to step into an easier comparison period.

Sorry.

If you what was reported everything here, we think the Dallas would need that's how I would need to have around 73.3 million a net total revenues for the theater process here.

We don't have a tolling crisis with said sorry last year, we had 73 point I'm sorry, what we kind of want to say is traffic about same time to helocs yeah.

Okay. That's helpful. Thank you and then just my second question on the dividend cashless train from <unk>.

Oh, the table on page six of the Investor reference pack.

So if you look at the how the numbers you have provided for the second half dividend from IP Iraq.

There is an 11 million euros consolidation of Josten line.

And that's down what's changed significantly from the first top 27 and.

It's quite volatile if you look over previous he is he's touch on what's driving that.

Significant change and how we should be thinking about that going forward.

Oh, sorry way would tend to think about that on an annual by because it apart. So a hockey a basis just because there are many adjustments that you would put through the consolidated accounts on an annual basis, rather than H. huh.

The material Awesome Tonight is that we have these 40 million Euro 18 million euros harassing them structural difference between the company and Pat and consolidating pets and that will continue until the end of Twentytwenty right.

Then there are a range of all the if purchase accounting adjustments that you would put through of wish they IFRIC 12, which I've talked about last construction pay is part of that sorry, again, just thinking about on an annual rather than a semiannual basis I think will be helpful.

Okay. I think if you look at the 2018 annual number.

That was significantly different too.

Hey, anyone else in 2019.

Yeah. It is just because of the accounting adjustments that are flights right.

Which there are many sorry, it is difficult to sit here and provide guidance around what that should look like going forward, which is why I'm, suggesting you just have a little bit somewhat material aspects, which as they 18 million you're right structural adjustments.

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Okay. Thank you.

Thank you for the next question comes from all in parallel with Goldman Sachs. Please go ahead.

Hi, guys. It's just a firstly just follow up on on Simon's question around I guess the traffic on dollars Crane why.

Donlins Cobra downstream, obviously increased its holes for quite a significant amount, which obviously impacting the flow of traffic for dollars grain why can you tell us when those toll increases were introduced during the Ya and then secondly, the construction impact we've seen dollar's toll word out when that first real.

We started to manage and how long do you expect that construction impact to continue for.

Yes.

The.

The increase in toll which was quite significant came in on first of January 19.

As you said that has had a significant a perfect on their traffic.

Well beyond the negative effect on our traffic.

So we weren't has affected as they were bought by their increase.

In 2019, I think the information city publicly available.

I think that's a that's that's where it is.

I think the Knicks increases a few years, though as proposed.

So we'll see how about evolves.

It is anytime soon reaching politically and Ah So we'll see Oh.

Sure.

The railway line is still on the completion and that's pretty Pivotals to what happens.

And I guess, a second question for me on.

You mentioned that you know the opportunity for possible what extensions or acquisitions I'm, just trying to balance out that comment we used to dave's comment about not wanting to sit on cash is that suggesting that give you ought to find opportunities down. The track. How you will have to rise capital to trying to take those or you're right either another.

<unk>.

There are two elements to that.

We then I'd be double the as we are doing with us he.

There's significant opportunity to grow.

Opportunities within that business side is that with a solid.

Hey, minus rating, probably trending closer to two a rating so.

Good opportunity for.

Free leveraging and and internally funding.

Project to reasonable Scott.

So the extensive or other opportunities, saying clearly we would need to come to the market and explain what we were doing.

The value, we see a arising from that and to raise capital recording a were not proposing to hold capital.

From a acquisition.

That's fantastic Thanks, Ryan Thanks.

Thank you next question comes from Paul Butler with Credit Suisse.

Please go ahead.

Hi, good morning.

I just wonder if I could continue on that same around your objective of lengthening the tenure of the average concession loss.

Can you just remind us where see Oh I see a a project is there a concession extension expected with something should watch.

That's what Steve said.

Potential because it shouldn't.

So I'll say is a standalone project, it's it's fine concessions, which went to the public tender.

And that's a concession, but the greater than 40 years.

So it's down the line that's fine from basically double but from from the <unk> double.

And our area network.

It it separately, so effectively using 80 double or the holding entity to Sybil another ROI opportunities within front.

Okay and and.

Can you just give us be more detail about how are you.

Sure we intend to go about.

Lengthening the the average tenure I mean, obviously.

States this projects as potential assets that you could.

You could acquire huh.

Yeah look as we've.

Sitting in my speech, we have focused on.

Thing very disciplined in our approach to investment whether its opportunities within the portfolio rose four.

Related to the portfolio companies that we businesses that we all right.

And all the opportunities could approach regularly on Oh, we apply the filled as we've described are setting any opportunity that's to be accretive to our investors.

That's not negatively affect our distribution buzz and it's great to.

To extend our average concession long, but that's.

Okay, and and what geography East would you consider I mean would you consider any of the geography sort of listed on that.

That chart on page 32 of the presentation.

I think that would say just by way of example, we've stated quite clearly we have focused on always see.

Hey races sovereigns all data is he is oh.

Very broad screen and ER or anything in that category is potentially or an opportunity for Uh huh, obviously geography is that a proximate to our existing operations.

In Europe, U.S., and Australia would be the place.

Thank you once again, if you wish to ask a question. Please press star one.

Our next question comes from it May sound lead with Morgan Financial. Please go ahead.

Hi, guys. Thanks, you presentation, just as I've just off a little bit more in tell us surprise on the Aussie I, probably Jack just for modeling perspective can you maybe touch on stuff like and I like the construction period tolling structure et cetera.

The Uh huh.

The length of concessions as I said is greater than 40, you as we said see.

Construction cost is.

Around 60, 600 million euros and the construction time frame is to an Oh yeah.

Maybe double a little takeover the existing road on the things as much.

And Ah operation, but the commencing imminently tolling will stop on completion of the one.

Got it can you give us an odd years, what sort of average told what would be on the north.

Oh notices to okay.

Second question for me is you talked about the design to lengthen the average concession times and I'm, assuming that require a big like a price capex to do that you talked about your willingness to re lever I pay your balance sheet could you talk a bit maybe how much.

No funding capacity I think you have on that balance sheet, even after allowing for the Oh I see I funding.

I think what I'd say as most of the things we are looking at in terms that they picked up a lot can be funded within its capabilities.

As we see the horizon at this point in time.

Anything outside that would mean coming back to the marketing and raising capital is we did so the.

The.

I'd like to.

Acquiring the remaining Macquarie Stakes in.

Like the double a and.

I mean, the contractual arrangements as a SaaS and before.

Thank you. The next question comes from James and I've been with RBC. Please go ahead.

Pardon me James you're now live in the call.

Thank you.

Thanks, It once a pickup on your comments on.

This is nice toning I, just want to screen right [laughter] sales.

Maybe are you considering.

Hi, good morning to displace Tony I think originally.

And based on my understanding.

And your offerings that I've never said this is placed totaling over short distance is like two to three moyles.

Given the change in Mike in your mind right around us.

Offering to some space tone out over the full supposed to the roads.

Provide better ones you too.

And maybe customers and maybe encourage more traffic was up there.

James it's sort of a work in progress, but I think the foundation study going too so what we put out to the market in 2001 nice thing.

And so relative to the anything we looked at me.

Needs to be a.

At least neutral to a bit.

Okay.

On the I'm just trying to understand then [laughter], hey, PR or does it significantly kind of Capex profile over the next few years then on top of thoughts then.

When I see a starts to get funded roughly potentially like yeah, they're not definitely PR and would potentially be.

Increasing.

Just wondering how you look at that would be any.

Impact on distributions payable from a pure R&D and to choose enough.

Well, obviously the distributions that come out of I paid up a lot depends on a cash for that has a viable wage changes either the 17 years of the remaining concession lives.

But there is no intent at that we wherever the moment to change the distribution policy around saying, yes, the the impacts.

The Lady there is still Oh, yeah, they depending on how the credit metrics work and what type of credit writing that I pay double R&D as far as production decides to many children on buying back to there is still quite a lot of capability using that to be able to rise cash, but the distributions that come out looks like say net profit.

Performance at the business.

Okay, Yeah [laughter], let me just asked so just one more on the type capex.

I think.

Displaced of Capex or they pay arbitron maintenance and growth like a significant.

Vincent in growth over the last few years like I mean over a billion euros.

[laughter].

We expect should we expect that's come through and potentially increasing entropic. Like this is an additional nine kilometers being I did there are it's not reflected in the incremental increments to the tone probably stick, but this compares last few years.

Well the effectively all the projects where possible.

Hey, a package if we would switch for for a great.

With the state.

And the voters will work through agreed and the consequence was so the combination.

In return for undertaking those would switch to the nearing completion. The next few years.

So a combination of concession extension and increasing Oh the on the.

70% of inflation.

So this is how the the concessions extended over many many years of.

I agree.

And then as sort of a review of the road and capacities and where the constraints are the network.

And as I mean negotiations and discussions with the site.

Which usually involves some combination of.

The capex.

Compensations food.

Ah concession extension and ER and totaling place to go on Buddy.

The 70%.

Standards.

<unk>.

It's a sort of a regular.

Part of a relationship.

Thank you.

I only have time for one last question.

Last question comes from Adrian I can with Morningstar. Please go ahead.

Hi, Graham and Hanting.

I'm, just wondering about the Corona vars and if you've seen any impact on IP double our traffic in recent weeks.

And Uh huh.

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No I effect on five all Nicole commented that traffic has been performing well since yearend as a result, as they continue to impact the strikes as well as what on sand is quite a strong stay safe enough of it.

Thank you that does conclude that question and answer session I'll now hand back to Mr. bivens for closing remarks.

Like to thank everyone for the support of a hypothetical Syria over the last year.

Yeah analysts and investors, who are very supportive or the capital raise in November, but it's obviously been a very successful and ER.

Rightfully, So you will support and ER and we will be very focus this year to continue to deliver performance in line with your expectations.

Thank you.

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