Transurban Group

Thank you for standing by and welcome to the Transurban first half 2025 results call. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Craig Stafford, General Manager, Investor Relations. Please go ahead.

Good morning everyone and thank you for joining us for Transurban's 2025 half-year results briefing. Transurban acknowledges the traditional owners of the land throughout Australia and we pay respects to elders past and present. We acknowledge our roads and infrastructure are built on country And with deep respect, we incorporate the voices of First Nations people in our approach, supporting equitable access to mobility across communities. We're joined today by our CEO, Michelle Jabco, and CFO, Henry Byrne, and together they'll take you through the presentation that we lodged with the ASX earlier this morning. We realise today is a busy reporting day. The presentation should take about 20 minutes and there'll be plenty of time for Q&A. Depending on the questions, we'll look to try and wrap up early and give you back some time. I'll hand over to Michelle to get us started.

Thanks, Craig, and good morning to everyone on the call. Today's results reflect the hard work we've undertaken to unlock the operational performance of our business. We've achieved strong momentum in the first half of 2025. Traffic is up across all markets. Costs have been well managed, driving a 10% increase in free cash for the half. At the same time, we've remained focused on investing in tangible benefits for our customers, strengthening our government partnerships and laying the foundations for our long-term growth. We've reiterated our full year distribution guidance of 65 cents per security for 2025, which we expect to be within our target free cash coverage range of 95 to 105%. If you recall, we set this target range with an aim to support a consistent, predictable distribution profile. Our strategic objectives continue to guide how we're building our business for the future. The three areas work together. Value in the eyes of our major stakeholders sets us up for new growth. Combining that with efficiency and discipline will grow value and distributions for our security holders. And we've made really strong progress this half, as we've set out on this slide. We've delivered some great new benefits for customers, which have resonated really well. We've been working closely and collaboratively with all of our partners, from our significant work on toll reform in New South Wales, to planning for the opening of major projects and building our pipeline of potential new growth initiatives. We've also worked hard to implement our new operating model and drive efficiency across the business, and we're starting to see the benefits play out. We've said before that a successful outcome for all on New South Wales toll reform is one of our biggest priorities, and we're optimistic that this is achievable. The process is a great opportunity to improve outcomes for Sydney motorists while protecting the significant investments we've made and continue to make alongside our partners in Sydney. By constructively engaging with the New South Wales government, we've progressed to stage two of the direct dealing process. It's the type of process that's familiar to us, and it means we're a step closer to finding an outcome that meets the needs of government, motorists and our investors. We're subject to non-disclosure restrictions, so I'm somewhat limited in what I can say. But importantly, the government has reiterated that it respects the value of contracts and revenue. We'll continue to work together to deliver meaningful and practical outcomes over the coming months. While of course there are aspects of the system in Sydney that can be improved, the starting point is a road network that provides enormous liveability, productivity and safety benefits. WestConnex is a great example. During the morning peak, it's nearly 40 minutes faster today to drive to the airport from Parramatta than it was in 2018. And travel on the alternative Parramatta Road is also 18% faster as a result. All of this with a million more people in New South Wales than a decade ago. And it's not just time saved. Motorists also save in fuel costs and wear and tear, which help to offset the cost of a trip. Enhancing the value that motorists get from our roads is central to our strategy and is the first lens through which we consider every investment decision. We've been differentiating ourselves even further through technology to improve the end-to-end customer experience. It's something our business has a long track record of doing well. It was Transurban that rolled out Australia's first multi-lane free-flowing electronic tolling technology in the 90s, removing the need for cash booths, and we've been continuously investing in innovation ever since. More recently, we've rolled out apps, transparency tools, and backend technology upgrades. We're continuing to deploy technology across the business that has wide-ranging benefits for customers. For example, we're using AI to detect and respond to on-road incidents faster across our network. We're also working with governments on how we can introduce electronic communications into the toll notice process to make it simpler. Our focus on technology not only enhances the user experience but also promotes operational excellence, keeping us at the cutting edge of the industry. When we talk about bringing together our physical and digital assets, we want our customers to have the digital tools that connect them to the value they get from using our roads. We rolled out a new app feature this half that displays your estimated travel time savings for each month, so you can quickly compare money spent versus time saved, putting the choice in your hands. And the Linked Rewards program can also be accessed in the app, providing an extra layer of value. When we look at our Net Promoter Score, we see that Linked Rewards members are much more likely to recommend Linked to family and friends. So it's clear that customers are seeing real value in the program. And this in turn has resonated well with our government partners, positioning us for future growth. Turning to our construction projects now, we've continued to make real progress in each of our markets. As we forge ahead, these projects exemplify our commitment to creating better, safer and more efficient roads for our communities. As we've noted before, projects like these are naturally complex and not done until they're done, but we're excited about the milestones ahead and the positive impacts they're expected to bring. The work we've been doing to strengthen our stakeholder approach and deliver additional value is underpinning new growth opportunities across our markets. Government priorities will dictate which projects and when. For example, in Queensland, there is a strong focus right now on the legacy infrastructure needed for the 2032 Games. As we look ahead, we continue to refine and engage on our pipeline, ensuring that each opportunity aligns with the needs of the communities we serve. Some of these opportunities we've been discussing for some time. Others are new and emerging. By leaning on our deep traffic expertise and partnerships, we're positioning ourselves to deliver transformative infrastructure that seeks to meet the demands of our cities now and into the future. We've also been taking a disciplined approach to exploring opportunities beyond our existing markets. Looking at where Transurban can add unique value while being mindful that greenfield opportunities in new markets bring their own challenges. Partnerships bring together different strengths to improve the value proposition and lower the risk. We deeply value our partner relationships and we bring many skills to the table too, such as our traffic expertise, our customer focus, our approach to asset enhancements and technology innovation. North America remains a focus. It's very early days, but we're actively testing a couple of new markets in the US with partners outside of Virginia. We're also considering whether a market like New Zealand could make sense with the right partners and the right structures in place, noting that the government there is exploring a significant program of investment and considering new policy settings around things like road user charging, which will be relevant across all of our markets. This approach helps us enter new markets in a disciplined and lower risk way where we can build our presence over time without heavy upfront costs and support long-term value and distribution growth. Our new operating model is gaining momentum and we're starting to see the benefits this half. As a reminder, we brought together functions across our Australian markets last year to support the delivery of our strategy. This was all about bringing the right people together across Transurban to make sure we're operating efficiently and taking a best practice approach to the way we work. We're over six months into the new model and we're starting to achieve tangible and sustainable efficiencies in many areas of the business. And Henry will touch on this in more detail. So looking at traffic now, we've seen positive traffic growth in all our markets for the half, and that includes particularly strong growth of 3.6% for the second quarter. Our North American assets were the standout, up 7.1% for the half, supported by the new Fredericksburg extension and by the Opitz Boulevard ramp opening on the 95 express lanes. And we've started seeing some more positive signs in Melbourne, where weekend and public holiday traffic is up 2.4%. In Brisbane, the impact of the 50 cent public transport fares appears to have been marginal to our traffic. Both workday and weekend traffic is growing strongly. We've experienced construction impacts in Melbourne and Sydney for some time, so I think it's useful to zoom out and look at where we are in the network enhancement cycle. We're undoubtedly seeing impacts from projects like the Warringah Freeway upgrade and the M7-M12 integration project in Sydney, with softer traffic on nearby assets as a direct result of the construction. On the other hand, WestConnex is seeing the benefits of both the Roselle Interchange and Sydney Gateway, with these new assets now contributing to an uplift in trips on the network. So while construction will always cause traffic to fluctuate, we're confident in the longer-term fundamentals that we expect will continue to drive this traffic growth cycle. And if we take an even longer term view, our portfolio is strategically positioned to address future population growth and evolving mobility needs. Australia's population is projected to grow to over 31 million people over the next decade, with approximately 9 million people expected to live within 15 minutes of our existing assets. This growth pattern is reflected in the commercial sector, where freight logistics businesses tend to cluster around our assets for reliable travel. And in our North American markets, traffic congestion is sitting at around 25%, underscoring the value proposition of our express lanes. So we're confident that our ongoing innovations and strategic efforts position us for future growth and success. Let me pass to Henry to take you through the financials and we'll then come back to questions.