Ascio Group FY12 Fin Results Presentationdrg.blob.core.windows.net/...presentation_final.pdf ·...
Transcript of Ascio Group FY12 Fin Results Presentationdrg.blob.core.windows.net/...presentation_final.pdf ·...
Asciano Group
FY12 Final Results Presentation
Twelve months ended 30 June 2012
1
• This presentation includes “forward-looking statements.” These can be identified by words such as “may”, “should”, “anticipate”, “believe”,
“intend”, “estimate” and “expect”. Statements which are not based on historic or current facts may be forward-looking statements.
• Forward-looking statements are based on assumptions regarding Asciano’s financial position, business strategies, plans and objectives of
management for future operations and development and the environment in which Asciano will operate.
• Forward-looking statements are based on current views, expectations and beliefs as at the date they are expressed and which are subject to
various risks and uncertainties. Actual results, performance or achievements of Asciano could be materially different from those expressed
in, or implied by, these forward-looking statements. The forward-looking statements contained in this presentation are not guarantees or
assurances of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the
control of Asciano, which may cause the actual results, performance or achievements of Asciano to differ materially from those expressed or
implied by the forward-looking statements. For example, the factors that are likely to affect the results of Asciano include general economic
Disclaimer
2
implied by the forward-looking statements. For example, the factors that are likely to affect the results of Asciano include general economic
conditions in Australia; exchange rates; competition in the markets in which Asciano does and will operate; weather and climate conditions;
and the inherent regulatory risks in the businesses of Asciano. The forward-looking statements contained in this presentation should not be
taken as implying that the assumptions on which the projections have been prepared are correct or exhaustive.
• Asciano disclaims any responsibility for the accuracy or completeness of any forward-looking statement. Asciano disclaims any responsibility
to update or revise any forward-looking statement to reflect any change in Asciano’s financial condition, status or affairs or any change in the
events, conditions or circumstances on which a statement is based, except as required by law.
• The projections or forecasts included in this presentation have not been audited, examined or otherwise reviewed by the independent
auditors of Asciano. Unless otherwise stated, all amounts are based on A-IFRS and are in Australian Dollars. Certain figures may be subject to
rounding differences. Any market share information in this presentation is based on management estimates based on internally available
information unless otherwise indicated.
• You must not place undue reliance on these forward-looking statements.
• This presentation is not an offer or invitation for subscription or purchase of, or a recommendation of securities. The securities referred to in
these materials have not been and will not be registered under the United States Securities Act of 1933 (as amended) and may not be
offered or sold in the United States absent registration or an exemption from registration.
• This presentation is unaudited. Notwithstanding this, the presentation includes certain financial data which is extracted or derived from the
Full Year Financial Report for the year ended 30 June 2012 which has been audited by the Group’s Independent Auditor.
Highlights
Financial Analysis
Outlook
1
2
3
Agenda
3
Questions & Answers4
John MullenManaging Director and CEO
4
FY12 Highlights
Strong financial
performance in tough
environment
� Revenue up 11.7%. EBIT up 14.4%. NPAT up 42.8%
� Strong EPS growth of 42%1111
� 25% increase in full year dividend
� ROCE improved 84bps to 10.5%, on track to reach WACC by FY15
Strengthened funding
profile
� Balance sheet restructure complete, new banking facilities deliver greater flexibility, lower
funding costs and longer duration tenure
� Funding capacity available for growth opportunities across the business
Strong underlying volume growth and refocused business drives growth in earnings
New customer contracts
secured and base
contracts rolled
underpinning future
earnings base
� Extended and expanded relationships with three key Container Terminals customers
� New contracts secured in PN Coal lift annualised contracted coal tonnage in FY14 to 176mtpa
� Key Intermodal customers re-signed early on long term contracts with volume increases
� New bulk commodity rail opportunities secured and services increased to take advantage of
strong agricultural cycle
� New Bulk Ports & Stevedoring contracts secured including services to the Gorgon project
� Autocare new customer contracts signed. Largest customer renewed for further 3 years
5
Strategies in place to
deliver further
performance improvement
� 14% improvement in LTIFR, still significant room for improvement
� Strong turnaround of Bulk Ports & Stevedoring businesses continuing, benefits starting to flow
through to earnings, well positioned for future growth
� Redevelopment and investment underway to further improve Container Terminal returns
� Continued focus on committed improved growth, performance and returns
� 5 year strategic plan still firmly on track
1. The prior period comparative has been adjusted to assume the 1 for 3 share consolidation that was effective December 2011 was also effective in the prior period
Highlights – PN Rail
Financial
performance
� Revenue up 14.6%
� EBIT up 13.3%
� ROCE improved 140bps to 15.5%
Strong underlying volume growth achieved as well as continued efficiency improvements...
� Two additional, take or pay grain trains contracted with Cargill commenced January 2012
� New contract with Emerald Group for two take or pay grain trains commenced July 2012
� New Bulk shuttle service contracts for Linfox and Toll into Port BotanyCustomers and business
growth
6
Strategies in place to
deliver further
performance improvement
� Ongoing focus on BIP initiatives delivered benefits of $16m
� Further efficiency improvements in fuel usage, slot and path utilisation, labour efficiency
� Exploring fleet rationalisation and locomotive cascading
� New Bulk shuttle service contracts for Linfox and Toll into Port Botany
� Construction of new freight terminal in Perth; K&S and Toll to become anchor tenants
� Agreement reached for the movement of 650k tonnes pa of Hot Rolled Coil steel for BlueScope commencing in FY13 Q2
� Steel Link contract renewed with BlueScope and Arrium for 7 years, starting Jan 2014
Highlights – PN Coal
Financial
performance
� Revenue up 19.5%
� EBIT up 26.6%
� ROCE improved 76bps to 10.4%
Strong underlying volume growth and renewed performance based contracts drive growth
� New 10 year, 8.5mtpa contract signed with Rio Tinto Coal Australia in Queensland to commence in November 2013
� New 15 year contract signed with Bandanna Energy for the movement of up to 4mtpa in Queensland from July 2014
Customers and business
growth
7
Strategies in place to
deliver further
performance improvement
� Work on Greta and Nebo continued, scope of work at Nebo expanded
� Invested $610m in rolling stock and infrastructure to meet growing contract haulage
requirements
� Detailed modelling of Hunter Valley congestion issues and options
� New 15 year contract signed with Bandanna Energy for the movement of up to 4mtpa in Queensland from July 2014
� New contracts with Anglo American and Middlemount commenced in January 2012
� Signed a new 10 year contract with Bloomfield in the Hunter Valley effective 1 July 2012
� Focus on execution of new contracts that commenced 1 July 2012 with Anglo American and commences 1 January 2013 with BHP Mitsui Coal (BMC)
Highlights – Terminals & Logistics
Financial
performance
� Revenue up 11.6%
� EBIT up 8.5%
� ROCE improved 69bps to 8.3% (30.8% excl. Goodwill)
Customers and business
growth
New customer contracts deliver strong growth in volumes
� 5 year agreement with Maersk signed in July 2011 for pro forma volume of 650,000
containers pa
� Rolled over agreement with Mediterranean Shipping Company (MSC) for a further 3 years
with a 2 year option from January 2012 for pro forma volume of 550,000 containers pa.growth
8
Strategies in place to
deliver further
performance improvement
� “Knuckle” lease at Port Botany completed, facilitating an extension of the lease across the
entire terminal to 30 June 2043
� $348m Port Botany upgrade and automation investment announced, increasing capacity
from 1.15m TEU to 1.6m TEU and delivering the flexibility to double capacity over time
� Completed enterprise agreement runs to 30 June 2015
� BIP initiatives delivered $7.3m in benefits despite delays in finalising the EA
with a 2 year option from January 2012 for pro forma volume of 550,000 containers pa.
� Expanded agreement with China Express Services (CAX) to include Brisbane and Sydney
Highlights - Bulk & Automotive Port Services
Financial
performance
� Revenue up 4.5% (10% on underlying basis)
� EBIT up 45.3%
� ROCE improved 553bps to 18.5%
Strong growth and EBIT turnaround of bulk port, stevedoring and related logistics businesses...
� Renewal of long term contracts including NYK, Arrium, Westlink, Swire and Shell
� Secured contract with Agility Services for the provision of marine transport services to the
supply base for the Gorgon project in Western Australia
Customers and business
growth
9
Strategies in place to
deliver further
performance improvement
� Negotiations on EA covering bulk ports and stevedoring activities continuing
� Evaluation of acquisition opportunities
� BIP initiatives delivered $7m in benefits
supply base for the Gorgon project in Western Australia
� Extension of Western Port management contract for a further 5 years to 2017
� Secured other contracts emerging for resource projects including those at Gladstone
� Contract with Mitsubishi recently extended for three years to 2015.
� Secured new contracts with Porsche and Proton
ROCE Improvements
31
18.5 18.5
%
Group ROCE improved 84bps despite impacts of considerable WIP and impact of industrial
relations issues
PN Coal
14.112.9
10.4
13.2
8.3
Terminals & Logistics Bulk Ports &
Automotive Services
15.5
9.6
7.6
PN Rail
9.6
Group
10.511.6
FY12 ROCE excluding GoodwillFY12 ROCE Pre WIPROCE FY12ROCE FY11
10
FINANCIAL ANALYSISAngus McKay, CFO
11
14%
26%
23%
37%
Bulk & Auto Port Services
Terminals & Logistics
PN Rail
PN Coal 9%
34%
24%
33%
Bulk & Auto Port Services
Terminals & Logistics
PN Rail
PN Coal
FY12 Revenue Split by Division FY12 EBITDA Split by Division
Growth in Earnings
Historical Revenue by Division ($m)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
FY12
3,530
FY11
3,153
FY10
2,898
FY09
2,853
FY08
2,933Bulk & Auto Port Services
Terminals & Logistics
PN Rail
PN Coal
Historical EBITDA by Division ($m)
0
100
200
300
400
500
600
700
800
900
1,000
FY12
951
FY11
833
FY10
755
FY09
674
FY08
668Bulk & Auto Port Services
Terminals & Logistics
PN Coal
PN Rail
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Earnings Summary
� Total revenue increased 11.7%. Growth in PN Coal,
PN Rail, Terminals & Logistics and Autocare was
primarily driven by new contracts and underlying
growth in volumes
� EBITDA growth across all divisions was driven by the
growth in volumes and BIP initiatives. Growth was
negatively impacted by the $15.6m turnaround on
the pcp in the valuation of accruals relating to
employee benefits. BAPS EBITDA growth reflects the
benefits of the restructure of the business over the
Earnings driven by strong underlying growth in volumes
Twelve Months Ended 30 June $’mRestated
FY111111 FY12 %Change
Revenue and other income 3,093.3 3,456.7 11.7
-PN Coal 826.0 933.3 13.0
-PN Coal (net of access) 578.0 690.4 19.4
-PN Rail 1,154.7 1,323.2 14.6
-Terminals & Logistics 700.2 781.2 11.6
-Bulk & Automotive Port Services 471.9 492.9 4.5
-Corporate (59.6) (73.9) 24.0
EBITDA 816.8 907.7 11.1
EBIT 539.1 616.7 14.4 benefits of the restructure of the business over the
period
� Net financing costs benefitted from lower overall
funding costs following the restructure of the Group’s
banking facilities and the full year impact of the
funding raised in FY11 in the international 144a/Reg S
debt capital markets
� Dividend per share increased 25% and reflects a
payout ratio at the top end of the stated range of 20-
30%
1. Restatement relates to the voluntary change in accounting policy for the treatment for taxation for customer contracts as detailed in Note 1 of the statutory accounts
2. The prior period comparative has been adjusted to assume the 1 for 3 share consolidation that was effective December 2011 was also effective in the prior period
3. Calculated on dividends declared divided by NPAT before material items after tax.
4. To provide comparability of EPS between periods EPS of the Asciano Group (assuming the Trust was fully consolidated for the whole of the 2011 financial year )have
been provided
EBIT 539.1 616.7 14.4
Net interest and associated costs (249.5) (220.4) (11.7)
Profit before tax and material items 289.6 396.3 36.8
Material items before tax (69.2) (13.2) (80.9)
Tax expense (50.3) (140.4) 179.1
Net profit after tax 170.0 242.7 42.8
Earnings per share2,417.3¢ 24.7¢ 42.8
Dividends per share26.0¢ 7.5¢ 25
Payout ratio 3 30.0% 28.6% -
Cash conversion 89.8% 97.8% 798 bps
ROCE 9.6% 10.5% 84 bps
ROCE excl WIP 10.2% 11.6% 143 bps
ROCE excl GW 17.7% 18.5% 78 bps
ROCE excl WIP & GW 19.8% 22.4% 268 bps
13
EBIT growth of 14% driven by increased volumes and BIP initiatives
Group - EBIT Bridge
5.83.6
4.415.6
8.5
2.8
16.0
36.8
616.7
139.9
214.8
$’m
BIP: Business improvement program
1. Cost of Industrial disputes includes $21m for Terminals & Logistics incurred this year compared to $8m in the pcp plus $3m for the cost to PN Coal of the industrial
dispute at Port Kembla Coal Terminal
Weather/ Congestion
Actuarial Valuation
Asset SalesCost of industrial disputes¹
BIPCosts/OtherPrice/Mix/ Volume
Legal Settlements
FY11 EBIT
539.1
FY12 EBITOtherIncidents
14
PN Coal - EBIT Bridge
EBIT growth of 27% driven by new contract growth
4.63.052.8
107.1
223.3
$’m
9.0
3.0
10.5
FY12 EBITPort Kembla Industrial disputes
Congestion WeatherFY11 Reported EBIT
165.9
FY11 EBIT Restated
Price/Mix/Volume
176.4
CostsCorporate Charges Adj
15
*Change in corporate cost allocation reflects the decision to more accurately reflect usage of services
EBIT growth of 13% driven by volume growth and ongoing business improvement initiatives
PN Rail - EBIT Bridge
0.7
3.6
15.9
10.1
23.6212.6
$’m
BIP: Business improvement program
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14.5
Asset SalesIncidentsBIPCostsPrice/Mix/VolumeFY11 EBIT Restated
187.6
Corporate Charges Adj
FY11 Reported EBIT
173.1
FY12 EBIT
*Change in corporate cost allocation reflects the decision to more accurately reflect usage of services
EBIT growth of 8.5% driven by container volume growth and asset sales over the period
Terminals & Logistics – EBIT Bridge
$’m
14.2
2.87.3
4.413.0
4.110.652.9
74.0
7.0150.1
170.4
157.1
BIP: Business improvement program
*Change in corporate cost allocation reflects the decision to more accurately reflect usage of services
1. The cost of industrial disputes was $8m in FY11, $15m in FY12 H1 and $6m in FY12 H2
Labour costsCostsPrice/ Mix /Volume
FY11 EBIT Restated
Asset Sales*Corporate Charges Adj
FY11 Reported
EBIT
Legal settlements
FY12 EBITBIPDiscontinued businesses and write
offs
Industrial disputes¹
Rent increases
17
EBIT growth of 45% driven by a restructuring of the business over the last eighteen months
Bulk & Automotive Port Services - EBIT Bridge
$’m
8.4
4.00.9
3.57.0
3.5
10.1
5.0
40.5
66.1
45.5
FY12 EBITDecrease in amortisation
Bluescope Restructure
Lost contract Kia
Japan/ Thailand
BIPCostsPrice/ Mix /Volume
Restated FY11 EBIT
Corporate Changes Adj*
FY11 EBIT
18
BIP: Business improvement program
*Change in corporate cost allocation reflects the decision to more accurately reflect usage of services
Cash Flow
A 22% increase in operating cash flow for the period driven by strong growth in earnings
Twelve months ended 30 June ($’m) 2011 2012
Operating cash flow pre tax and interest 733.3 887.7
Cash tax paid (4.2) (46.4)
Cash net interest (231.7) (233.5)
Operating cash flow after tax and interest 497.5 607.8
Sustaining capex¹ (118.8) (163.3)
Growth capex¹ (297.1) (655.9)
� Operating cash flow post tax and interest increased
22% reflecting strong growth in earnings, 800bps
improvement in cash conversion and timing
differences
� Proceeds from the sale of PPE reflects the sale of
surplus properties across the Group
� Cash tax paid is low relative to tax expense but is
expected to be more reflective of tax expense goingFree cash flow 81.6 (211.4)
Proceeds from sale of PPE 39.1 16.9
Net financing 84.8 0.0
Dividends (29.3) (63.5)
Other 6.9 9.7
Change in cash 183.2 (249.1)
Opening cash 215.3 398.5
Closing cash 398.5 149.4
Cash conversion (%) 89.8 97.8
1. Includes capital expenditure recorded as inventory on the balance sheet
expected to be more reflective of tax expense going
forward following the full utilisation of tax losses in
FY12
� The improvement in cash conversion reflects a
reduction in working capital requirements following
improved cash collection over the pcp
� The increase in “Other” relates primarily to the sale
of the Autostrad™ technology intellectual property to
Cargotec Corporation
19
Capital Expenditure
New contracts underpin increased investment in the business, disciplined approach to allocation
� Capital expenditure projects in FY12 included rolling
stock for new contracts in PN Coal and PN Rail, the
provisioning and maintenance facilities in PN Coal and
new equipment in the Container Terminals and Bulk
Ports businesses
� The top end of the range for capital expenditure in
FY13 has been lifted primarily due to expenditure
budgeted in FY12 flowing into FY13 and additional
investment in the Terminals & Logistics division
595
858
511496
700-800m
800-930m
$’m
* Includes capital expenditure recorded as inventory on the balance sheet
investment in the Terminals & Logistics division
associated with the Port Botany redevelopment
project and equipment upgrade
� The increase in forecast capital expenditure in FY14
primarily relates to expenditure in Terminals &
Logistics associated with the Port Botany
redevelopment, investment in rolling stock in PN Rail
and PN Coal and PN Rail engine replacements
� Based on current investment plans capital
expenditure is forecast to decline post FY14
20
107 115 119163
245
358
235
FY14FFY13FFY12
100
FY11
62
FY10
38
FY09
144
416
Sustaining Capex
Growth Capex - rest of Asciano
Growth Capex - Coal
Capital Expenditure
FY13 Capital Expenditure expected to be in the range $700-800m
� Investment in PN Coal in FY13 is once again supported
by signed contracts scheduled to commence over the
period FY13-FY15. Investment in PN Coal in FY13 will
be lower than the $610m in FY12
� Capital expenditure in Terminals & Logistics is
primarily focused around the redevelopment of Port
Botany and the equipment upgrade occurring at all
four container terminals
400
$’m
� PN Rail capital expenditure is being directed towards
the upgrade of freight terminals in NSW, Victoria and
Perth and rolling stock to meet the growth in demand
for services, new contracts and replacement of
inefficient old equipment
� BAPS expenditure is related to new prime movers and
trailers in Autocare and new equipment in Bulk Ports
& Stevedoring to fulfill new contracts
� Capital expenditure in Corporate relates to the
upgrading and outsourcing of AIO’s IT infrastructure
21
Corporate
20
Bulk Ports &
Auto. Port
Services
39
Terminals
& Logistics
190
PN Rail
150
PN Coal
Potential Projects
Growth Capex
Sustaining Capex
Business Improvement Program
Business Improvement Program (BIP) delivered $36.8m in initiatives over the period
PN Rail15.9
Corporate
6.6
BAPS 7.0
$’m
38 38
50
50
38 38
50
50
148148
196
233
45
61
53
$’m
Cumulative BIP savings FY12 BIP divisional split
22
Terminals & Logistics
7.3
BAPS 7.0
� BIP initiatives delivered savings across fuel, slot utilisation, crewing arrangements, productivity improvements, telecommunications,
property, fleet replacement, restructure of under performing sites and yard efficiencies
� The longer than anticipated time associated with finalising the Terminals EA has resulted in delays to the implementation of planned
BIP initiatives in Terminals & Logistics. This resulted in BIP targets for FY12 not being met however BIP targets for Terminals & Logistics
are still expected to be achieved over the five year time frame
� AIO remains confident in achieving the $150m in BIP savings over the 5 year plan period
40
62 62 63 7062 62 63 70
FY10
19
29
FY09
19
29
FY08
38
FY11 FY12
53
CorporatePN Coal Patrick*PN Rail
*Patrick – Includes Terminals & Logistics and BAPS
Cash Flow to Net Debt
$’m 214.3
63.4
23.4
46.4233.5
2,708.8
802.3
2,260.0
A 21% increase in operating cash flow before interest & tax (OCFPIT) assisted in funding the
increase in capital investment for new contracts
Net interestOCFPIT
887.7
June 12 Net DebtNon-cash itemsDividends paidOther*Net capex #TaxJune 11 Net Debt
23
*Includes $25.6m proceeds from the sale of businesses during the year
# Cash capex net of sale proceeds
Financial Profile
Facility Type Maturity
Drawn
A$'m
Undrawn
A$’m
Syndicated bank facility ¹ Revolving working capital Oct-13 137.2 12.8
Syndicated bank facility Revolving cash advance Oct-14 650.0 -
Syndicated bank facility Revolving cash advance Oct-16 100.0 550.0
US$ bonds 2 144a/ Reg S Sep-15 428.8
US$ bonds 2 144a/ Reg S Apr-18 727.6
US$ bonds 2 144a/ Reg S Sep-20 643.2
US$ bonds 2 144a/ Reg S Apr-23 242.6
Reconciliation of Loans and Borrowings
24
US$ bonds 2 144a/ Reg S Apr-23 242.6
Total hedged A$ equivalent balance 2,929.4 562.8
Less: working capital facility drawn as bank guarantees ¹ (87.2)
Less: unamortised discount on US$ bonds (6.0)
Less: unamortised debt issuance costs (17.1)
Less: unrealized foreign exchange gain on US$ bonds (89.1)
Add: fair value adjustments to US$ bonds 128.2
Loans and borrowings as per balance sheet at 30 June 2012 2,858.2
Cash and liquid assets as at 30 June 2012 (149.4) 149.4
Net debt / available liquidity as at 30 June 2012 2,708.8 712.2
Notes:
1. Drawings under the working capital facility comprise $50m in cash and $87.2m in performance bonds and bank guarantees
2. Outstanding amounts for US$ bonds are shown at the hedged A$ balances
Debt Maturity Profile
$’m
800
700
600
500
400
25
� As a result of the recent refinancing Asciano has no outstandings due until FY14 and a weighted average debt maturity of 5.3 years
400
300
200
100
0
FY23FY22FY21FY20FY19FY18FY17FY16FY15FY14FY13FY12
BondsDrawn bank facilitiesUndrawn bank facilities
Balance Sheet - Gearing
Net Debt to EBITDA (x)* EBITDA to net interest (x)*
6.5x
3
4
5
6
7
3.3x
3.7x
4.3x
2.5
3
3.5
4
4.5
5
26
3.5x
2.8x 3.0x
0
1
2
3
FY09 FY10 FY11 FY12
2.0x
3.3x
0
0.5
1
1.5
2
FY09 FY10 FY11 FY12
* Net interest and EBITDA based on rolling 12 month period
� Leverage for the period increased primarily due to the utilisation of cash balances for growth capital expenditure
� Net debt comprises loans and borrowings as reported on balance sheet less cash and liquid assets
Net Financing Costs
Twelve months ended June $’m 2011 2012 Drivers of net finance expense
Interest expense (244.0) (217.7) • Expect FY13 WACD of less than 8%
• Payable on gross hedged debt outstanding ($2,842m at
June-12)
Interest income 20.1 15.1
Amortisation of capitalised borrowing costs (10.2) (4.9) • Amortise at future run rate of approximately 25% p.a.
diminishing value
Commitment and other facility fees (13.9) (10.2) • Commitment fee on undrawn balances at 50% of average
bank margin
27
� Financing cost savings during the period were associated with new debt facilities announced in October 2011
� FY13 weighted average cost of debt is forecast to be lower than 8%
� At the end of the period debt was 75% hedged at fixed rates. Foreign currency risk is fully hedged
bank margin
• Bank guarantee fee on outstandings at average bank margin
Unwind of discount on long term provisions (2.6) (2.7)
Material items (53.2) (13.2) • No further material items expected in FY13
Net finance expense (303.8) (233.6)
Tax expense rate increased from 17.4% to 35.4%
Twelve months ended 30 June $’mRestated¹
20112012 % chg
Profit before tax and before material items 289.7 396.3 36.9
Material items (69.2) (13.2) (81.0)
Profit before tax and after material items 220.3 383.1 73.9
Income tax at 30% (2010: 30%) 66.1 114.9 73.9
Capital losses recognised (6.2) (5.0) (24.2)
Non assessable equity accounted profit (4.6) (5.2) 13
Tax Expense
Non assessable equity accounted profit (4.6) (5.2) 13
Removal of rights to future income deduction from prior years - 20.1 -
Other (18.9) 8.9 -
Total income tax expense recognised in the Income Statement 50.3 140.4 179.1
Effective Tax rate 17.4% 35.4%
1. The restatement relates to the voluntary change in accounting policy for the treatment of taxation of the rights to future income contracts as detailed in Note 1 of the
Statutory accounts
Tax expense increased 179% to $140.4m representing an effective tax rate of 35.4% for the year ended 30 June 2012 compared with 17.4%
in the pcp. The difference in the effective tax rate in FY12 as compared with the corporate tax rate of 30% has primarily been driven by the
following:
� In the 31 December 2011 financial statements, Asciano foreshadowed a possible increase in tax expense due to changes in the tax
consolidation legislation.
� The profit on the sale of assets offset by capital losses over the period
� Provision of $15.4m raised in relation to the potential application of section 974-80 of the Income Tax assessment Act 1997. No
assessment has been received at this time
� Non assessable equity accounted profit 28
Material items reconciliation
Material items declined significantly on pcp
Twelve months ended June ($’m) Restated 2011 2012
EBITDA 816.8 907.7
Restructure costs (17.4) -
Operating profit before individually material items, depn & amortisation 799.4 907.7
Impairment of intangibles (3.0) -
Impairment reversal / (impairment) of PP&E 4.4 -
29
Impairment of goodwill - -
Depreciation & amortisation (277.7) (291.0)
Profit (loss) before financing costs and tax 523.1 616.7
Net finance & fees before significant items (249.5) (220.4)
Swap de-designation and write off of establishment fees (53.2) (13.2)
Profit (loss) before tax 220.3 383.1
Tax expense (50.3) (140.4)
Profit (loss) after tax 170.0 242.7
� The FY12 material item relates to the writedown of the unamortised up-front costs relating to the Company’s banking facilities
replaced in October 2011
OUTLOOKJohn Mullen
30
External Environment
� Trading conditions remain challenging across the Australian economy.
� Despite these challenges Asciano has met its objectives and continues to perform well but we do not see this
environment changing dramatically in the coming year.
� Asciano remains well positioned with good underlying fundamentals in each core market;
• Coal fundamentals still positive despite price fluctuation. Strong growth in Queensland
• Rail business still growing above GDP driven by bulk, agriculture and resilient demand
Asciano is well positioned to continue to deliver earnings growth despite macro headwinds
31
• Container volumes still growing despite worldwide shipping industry downturn
• Stevedoring market growth strong. 2012 calendar year on track to be a record year for automotive sales
• Most contracts are volume based so little exposure to direct commodity prices
� Diversification across multiple, related business units further dilutes risk to Asciano overall
� Significant percentage of revenue on Take or Pay basis with new ToP contracts still being signed
� New contracts and rollover of existing customer contracts further underpin AIO’s earnings base
� Longevity of customer commitments in most divisions a significant positive
� Limited exposure to overseas markets, especially Europe
� Labour cost and productivity remain a difficult but manageable issue
Outlook – PN Rail
Outlook Strategic Priorities
� Underlying growth in Intermodal is expected to remain at
GDP+ with the demand for Express services continuing to be
above this rate of growth
� New and renewed existing contracts in FY12 will underpin and
drive growth in FY13
• Following a new contract with the Emerald Group and
additional services for Cargill, PN Rail expects to operate 19
� Focus on BIP initiatives will continue
• Ongoing focus on fuel consumption, slot utilisation and
crewing
• Benchmarking performance reveals further upside
� Service performance and customer retention
• The Intermodal business will be focused on growing volume
through improving the service performance of rail over road
New Bulk and Intermodal contracts will underpin and drive further growth in FY13
additional services for Cargill, PN Rail expects to operate 19
export grain trains in FY13 H1 (compared to 13 train sets in
pcp) and 19 train sets in FY13 H2 (compared to 17 export
train sets in FY12 H2)
• Additional shuttle services for Linfox and Toll Holdings into
Port Botany
• Agreement with Bluescope for the haulage 650K tonnes pa of
product between Port Kembla and Western Port. This is
expected to commence FY13 Q2.
• This additional task will form part of the new 7 year Steel Link
contract which commences 1 January 2015 with Bluescope
and Arrium
• Magnetite contract for Xstrata commenced April 2011 with
one train consist; second commenced August 2011
through improving the service performance of rail over road
� Bulk commodity development opportunities
• Opportunities continue to be explored with a focus on
developing innovative solutions to meet industry needs
� Asset replacement and cascading programme
• Group wide evaluation of locomotive cascading
• Ongoing focus on maintenance programme to extend life and
improve reliability
32
PN Rail - Focus on BIP
Achievements to date
� Optimise the assets
• Improvement in Intermodal slot utilisation (wagon slots
used on each service) of 8.2% since FY09
• Improvement in locomotive utilisation (locomotive HP
capacity used) of 4.2% since FY09
� Cost reductions
• Improved fuel consumption with a 6.4% reduction in
litres per GTK (gross tonne kilometre) since FY090
1
2
3
4
5
6
7
8
9
Slot Utilisation%
33
0
FY12FY11FY10
Cumulative Slot Utilisation Improvement
0
1
2
3
4
5
6
7
FY11FY10 FY12
Cumulative Litres per GTK improvement
%
0
1
2
3
4
5
FY12FY11FY10
Cumulative Loco Utilisation Improvement
%
Fuel Consumption Locomotive Utilisation
Outlook – PN Coal
Outlook Strategic Priorities
� The full year impact of new contracts commenced in January
2012 in Queensland will have a positive impact on FY13 result
• 10.9mtpa contract with Anglo American in Queensland
• 3mtpa contract for Middlemount mine (JV between Yancoal
(Gloucester Coal) and Peabody (Macarthur Coal)) in
Queensland
� A 3.5mtpa contract with Anglo American commenced on 1 July
� Focus on resolving congestion issues in the Hunter Valley
• Working with key stakeholder groups including ARTC,
HVCCC, port operators and coal producers
• Impacts are expected at least until ARTC holding roads are
completed
� Focus on productivity and operational efficiency to improve
returns in the Hunter Valley
New contracts and a focus on operational efficiencies expected to drive growth in FY13
� A 3.5mtpa contract with Anglo American commenced on 1 July
2012 expected to ramp up over FY13.
� A contract for the movement of up to 4.2mtpa with BHP Mitsui
Coal commencing 1 January 2013
� New contracts secured in FY12 take FY14 annualised
contracted tonnage to 176m tonnes
• Rio Tinto 10 year 8.5mtpa performance based contract in
Queensland to commence November 2013
• Bandanna Energy 4mtpa performance based contract in
Queensland expected to commence July 2014
returns in the Hunter Valley
� Completion of work on Nebo and Greta provisioning and
maintenance facilities and commencement of operation
• Construction and fit out work at Nebo is being finalised
and the transition to full operations has commenced
• Completion at Greta in NSW expected December 2012
� Focus on identifying and managing downside risk in current
uncertain macro environment
� Continue to look at ways to achieve a competitive advantage
through the offer of an integrated solution
34
Outlook – Terminals & Logistics
Outlook Strategic Priorities
� AIO growth in container volumes will be dependent on:
• Market growth rates have slowed will be dependent on
Australian economic environment
• The rapidly changing structure of shipping line consortia and
services coming into Australia may affect market shares
� New contracts secured in FY12 and productivity improvements
should have a positive impact on FY13 volume growth and
� Ongoing assessment of AIO’s competitive response to entry of
third competitor including strong customer focus and
differentiated service offerings
� Lift performance of Port Botany through improved
productivity
• Need to lift PB terminal performance to provide a seamless
East Coast service to customers
Focus on driving productivity improvements and leveraging strategic assets to cement
competitive position in the market
should have a positive impact on FY13 volume growth and
margins:
• A new three year contract signed with NEAX to include
services to East Swanson Dock as well as existing services to
Fisherman Islands and Port Botany
• A full year contribution from the contract with MSC that
commenced on 1 January 2012
• A reduction in the volume subcontracted or lost through
vessel omissions caused by industrial action during FY12
• Improvement in productivity and customer service following
the implementation of new rostering and work practices and
additional quay cranes and yard equipment
� Robust plans to defend market share and compete with new
entrants
East Coast service to customers
� Focus on execution of Port Botany development project
• Development of the “Knuckle” to ensure the extension of the
lease over the expanded Port Botany terminal until 2043
• Ensuring a seamless experience for our customers during the
development period
• Ensure automation rollout is successful as key to achieving
efficiency improvements
� Focus on options and opportunities to expand container port
capacity at Port of Melbourne
• Part of negotiations over the early termination of Webb Dock
lease
� Continue to develop improved land side logistics services to
enhance our value proposition to the ultimate freight owners
35
Container Terminals Scorecard
Fisherman Islands Port Botany East Swanson Dock
FY12 Coastal Window Performance % 95 30 71
FY12 Labour cost per lift $ 61.6 109.7 72.6
Terminal performance scorecard reflects the benefits that can be delivered for customers, employees
and shareholders through the introduction of more efficient and productive work practices
East Coast Container Terminal Performance
FY12 Lost time to injuries (LTIs) 2 77 11
FY12 Workers compensation cost $m 0.3 6.7 2.1
36
� Some of the variation across these performance metrics can be attributed to the difference in volume and type of freight flowing
through each terminal
� The throughput of Port Botany and East Swanson Dock is very similar with terminal layouts and equipment that is also very
comparable. There are significant improvements in safety, customer service and efficiency that can be achieved if the performance at
Port Botany can be lifted to match East Swanson Dock even before the significant benefits of automation are delivered
Outlook – Bulk & Automotive Port Services
Outlook Strategic Priorities
� Volume growth will be determined by activity in the resources
and bulk commodities market and growth of the automotive
supply chain
� A number of new contracts signed and existing contracts
renewed in FY12
• Renewed a number of long term contracts in FY12 including
NYK, Arrium, Westlink, Swire and Shell
� Continue to focus on restructure of the business and
improvement in margins and business sustainability
� Work with Port of Melbourne Corporation and Victorian
Government to identify options for the movement of current
activities at Webb Dock
� Settle outstanding issues and finalise Stevedoring EA with the
MUA
Improved performance from both restructuring and increased revenue growth to continue
• In April 2012 secured a contract with Agility Services for the
provision of marine transport services to the supply base for
the Gorgon project off the coast of Western Australia
• Recently renewed contract with Mitsubishi for a three year
period
• Recently secured Porsche contract and pitching for a number
of other specialist brands
• In February 2012 AIO increased its ownership interest in the
Port of Geelong from 30% to 50%
• The division has exercised the option to renew the
management agreement for 5 years between Port of
Hastings Development Authority and Patrick to 2017 at
Western Port Bay in Victoria
MUA
� Continue to target new business opportunities around
strategic infrastructure projects
� Identify opportunities to expand ports portfolio and leverage
experience and skill set
� Autocare to look at opportunities to diversify and leverage
expertise and strategic assets
37
Outlook - Asciano
Outlook positive with Asciano well positioned to continue to deliver earnings growth
� Despite the difficult macro environment AIO has and will continue to focus on achieving its five year
business plan and meeting its financial targets
• Last 18 months have seen consistent delivery against those targets
• Although the macro environment may result in changes in the business mix and the timing of cost savings, the
management team still intends delivering on its original objectives
• Original goals of exceeding WACC and higher return performance within original timetable remain intact
� Continued de-risking of business to be further pursued
38
• Continued focus on high return, long term business opportunities. No chasing of market shares or volume growth on
low margins and increased focus on counterparty risk
� Continue to explore synergy opportunities from AIO’s existing portfolio and leveraging the supply chain
� Ongoing focus on lifting customer service levels through innovation and integrated service offerings
� Continued focus on cultural change, safety and sustainability and the creation of a highly motivated
workforce establishing a culture of performance through shared understandings of goals and objectives
• Significantly improve waterfront industrial relations environment
� Continued strong focus on cost efficiencies and productivity throughout all divisions
� Conditions unsuitable for more specific market guidance but update to be given at AGM
Appendices
39
Definitions
• Revenue - Revenue and other income
• Material items - Material items include continuing material items, discontinued material items and gains or losses on sale of
discontinued operations
• EBITDA - Profit before interest, tax, depreciation and amortisation (divisional EBITDA exclude corporate costs)
• EBIT - Profit before interest and tax (divisional EBIT exclude corporate costs)
• NPAT - Net profit after tax
• OCFPIT - Operating cash flow pre interest and tax
40
• OCFPIT - Operating cash flow pre interest and tax
• PCP - Prior corresponding period
• ROCE - Return on capital employed (EBIT / average capital employed) 12 months rolling
• EPS - Earnings per share (NPAT / weighted average number of shares outstanding)
• Capital employed - Net assets less cash, debt, other financial assets/liabilities, tax, and intercompany accounts (for divisional
ROCE)
• Cash conversion (group) - OCFPIT / EBITDA
• Cash conversion (divisional) - Operating cash flow / EBITDA
• Operating cash flow - EBITDA + change in net working capital
• BAPS – Bulk & Automotive Port Services
Result – PN Coal
27% EBIT growth driven by the contribution from new contracts
� Revenue growth net of access of 19.5% was driven by
new contracts that have commenced in Queensland
in the last eighteen months and a net weather benefit
over the period compared to pcp. Revenue growth
was positively impacted by the renegotiation of
contracts in the Hunter Valley.
� Tonnage hauled in Queensland increased 28% over
the period driven by new contracts and the reduced
impact of the wet season versus pcp. Tonnage hauled
Twelve mths ended June 2011 2012 % chg
Total Tonnes (‘m) 122 120 (1.6)
Total NTKs (‘m) 19,097 19,988 4.7
Revenue (net of access) ($m) 577.9 690.4 19.5
Access charges ($m) (248.1) (242.9) (2.1)
EBITDA ($m) 266.8 327.0 22.6
EBIT ($m) 176.4 223.3 26.6
41
impact of the wet season versus pcp. Tonnage hauled
in South East Australia declined 7.4% impacted by
lost tonnage in the pcp, industrial action at Port
Kembla Coal Terminal and ongoing Hunter Valley coal
chain congestion
� EBITDA increased 22.6% reflecting growth in revenues
and the transition of the contract base to take or pay
performance based contracts
� Depreciation over the period increased 19% reflecting
the deployment of new rolling stock for new
contracts that commenced over the period.
� The 139% increase in capital expenditure over the
period is underwritten by new customer contracts
commencing over the next two years and investment
in Nebo and Greta infrastructure
EBIT ($m) 176.4 223.3 26.6
EBITDA margin (%) 46.2 47.4 119 bps
EBIT margin (%) 30.5 32.3 182 bps
ROCE (%) 9.6 10.4 76 bps
ROCE excl WIP (%) 11.0 13.2 227 bps
Cash conversion (%) 101.3 106.3 493bps
Capital expenditure ($m) 255.3 610.1 139
Result – PN Rail
13.3% growth in EBIT driven by new contracts and BIP benefits
� Revenue growth of 14.6% was driven by a 9.8%
increase in Intermodal revenue and a 28.5% increase
in Bulk revenue
� Revenue growth reflects the benefits of new
contracts, a strong agricultural cycle and strong
demand for Intermodal services into Perth in Western
Australia
� EBITDA growth was boosted by the benefits flowing
Twelve mths ended June 2011 2012 % chg
Intermodal NTKs (‘m) 21,833.9 22,974.8 5.2
Intermodal TEUs (‘000) 676.6 694.0 2.6
Bulk NTKs (‘m) 4,282.9 5,645.6 31.8
Bulk tonnes (‘000) 13,663.5 16,707.4 22.3
Steel tonnes (‘000) 2,639 2,674 1.3
Total Revenue ($m) 1,154.7 1,323.2 14.6
42
� EBITDA growth was boosted by the benefits flowing
from the divisions BIP initiatives which contributed
savings of $16m in the period.
� EBITDA was negatively impacted by the increased cost
of derailments in the period and higher labor costs
associated with the recruitment and training of new
train crews to support the higher export grain volume
� Cash conversion improved due to a lower net working
capital requirement from improved cash collection
over the pcp.
� Free cash flow, after the 33.5% increase in capital
expenditure, increased 8.2% to $170.2m
Total Revenue ($m) 1,154.7 1,323.2 14.6
EBITDA ($m) 286.9 316.4 10.3
EBIT ($m) 187.6 212.6 13.3
EBITDA margin (%) 24.8 23.9 (90) bps
EBIT margin (%) 16.2 16.1 (10)bps
ROCE (%) 14.1 15.5 140 bps
Cash conversion (%) 91.8 98.5 700 bps
Capital expenditure ($m) 106.0 141.5 33.5
Result– Terminals & Logistics
Strong underlying container volume growth of 13.6% driven by gains in market share
� Revenue growth of 11.6% was driven by underlying
growth in container volume market share. Revenue
included legal claim settlement receipts of $2.8m on
pcp and asset sale proceeds of $14.2m offset to an
extent by $11.3m in costs associated with industrial
disputes
� Underlying revenue growth in the Container Terminals
business was 13.5% driven by an 11.9% increase in
lifts and a 13.6% increase in TEUs over the period
Twelve mths ended June 2011 2012 %chg
Container Volume - TEUs (‘000) 2,563 2,912 13.6
Container Volume - lifts (‘000)¹ 1,759 1,967 11.9
Revenue ($m) 700.2 781.2 11.6
EBITDA ($m) 210.8 225.6 7.0
EBIT ($m) 157.1 170.4 8.5
EBITDA margin (%) 30.1 28.9 (123)bps
43
lifts and a 13.6% increase in TEUs over the period
� EBITDA was impacted by a number of one-off items
including the impact of industrial disputes during the
year of $21m, combined with a 21% increase in labor
costs and a 31% increase in property costs over the
period. The result includes $14.2m profit made on the
sale of the automation technology intellectual
property
� EBIT growth benefited from the restructure of the
logistics business and the closure of some loss making
activities
EBITDA margin (%) 30.1 28.9 (123)bps
EBIT margin (%) 22.4 21.8 (62)bps
ROCE (%) 7.6 8.3 69bps
Cash conversion (%) 96.9 110.4 1352bps
Capital expenditure ($’m) 40.5 74.8 84.8
Result – Bulk & Automotive Port Services
45% EBIT growth driven by restructuring of the business over the last eighteen months
� Revenue growth of 4.4% was driven by an underlying
increase in volumes in the Stevedoring business and
the Autocare business. Stripping out the impact of
discontinued and restructured businesses revenue
increased 10.3%
� EBITDA growth of 19.2% was driven by a 22%
increase from the Bulk Ports & Stevedoring
businesses following a significant restructure over the
last eighteen months and a 12.9% increase in the
Twelve mths ended June 2011 2012 %chg
Vehicle storage days (‘000) 11,971 11,811 (1.3)
Vehicle movements (‘000) 977 944 (3.4)
Revenue ($m) 471.9 492.9 4.4
EBITDA ($m) 68.8 82.0 19.2
EBIT ($m) 45.5 66.1 45.3
EBITDA margin (%) 14.6 16.6 207 bps
44
last eighteen months and a 12.9% increase in the
contribution from Autocare. BIP initiatives delivered
$7m over the period.
� EBIT growth reflects the growth in the business
combined with the benefits of lower amortisation
due to the roll-off of customer contracts in the
Autocare business.
� ROCE improved significantly and is now well above
AIO’s WACC and reflects the significant restructuring
of the business over the last eighteen months.
EBITDA margin (%) 14.6 16.6 207 bps
EBIT margin (%) 9.6 13.4 376 bps
ROCE (%) 12.9 18.5 553 bps
Cash conversion (%) 107.8 81.0 (2681)bps
Capital expenditure ($’m) 11.8 17.6 48.8
Headcount
1,782
2,204
1,7621,818
2,349
7,446
6,873
20122011
FTE Headcount¹ increased 8.3% reflecting the growth in the business over the period
186
1,6901,782
1,011
242
1,7621,818
1,274
TotalCorporateBulk Ports & Automotive
Port Services
Terminals & LogisticsPN RailPN Coal
1. FTE (full time employee) as at year end