Infratil Limited · NZX:IFT
Infratil — Investor Day (April 2018)
155 slides from Infratil's investor day presentation, Apr 11, 2018
Slide 1: Infratil 2018 Investor Day and Preliminary Guidance FY2019
Infratil 2018 Investor Day and Preliminary Guidance FY2019 For personal use only 11 April 2018 Infratil has released the presentation material for its annual Investor Day. Presentations are recorded during the day and will be available to view on www.infratil.com after the event. Infratil’s objectiv
Slide 2: Infratil Future Directions Investor Day
Infratil Future Directions For personal use only Investor Day 11 April 2018
Slide 3: Infratil plan is clear
Infratil plan is clear Harvest development options while optimising the portfolio For personal use only • Extract the value from our platforms – Renewables, eldercare and data • Optimise the core – Ongoing performance management and capital management – Core cash generating assets continue to perfor
Slide 4: NAV poised for strong growth given recent platform development
NAV poised for strong growth given recent platform development Emphasis is shifting back to capital growth For personal use only • Proprietary platforms are a critical indicator of future success – Key to generating long-term compound returns • New renewables, eldercare, and data infrastructure plat
Slide 5: Most options are largely independent of macro considerations
Most options are largely independent of macro considerations Growth infrastructure differentiated from rate-exposed low risk infrastructure For personal use only • Macro environment not getting any easier – Risk of global market dislocation over the medium term remains real – Competition for mid-ris
Slide 6: Flexible investment mandate is a competitive advantage
Flexible investment mandate is a competitive advantage Infratil mandate has evolved over time – Longroad the best current example For personal use only • Flexible mandate enables Infratil to maximise returns over the long-term – Portfolio can accommodate development, growth infrastructure and operat
Slide 7: Mandate flexibility matched by multiple levers on capital
Mandate flexibility matched by multiple levers on capital Preserving capital for proprietary pipeline and compound growth For personal use only • Current capital settings: – Approximately $500m of cash and available facilities prior to any potential divestments – Reliable Free Cash Flow from core as
Slide 8: Portfolio construction questions and parameters
Portfolio construction questions and parameters Maintaining pragmatic approach while tightening portfolio construction For personal use only • Why growth infrastructure? Primary and Secondary Portfolio – Less competed Parameters: – Requires operating capability and active management – Stronger absol
Slide 9: Cost of complexity is real
Cost of complexity is real Other portfolio considerations impact overall valuation For personal use only • Portfolio is in equilibrium in terms of return, credit and TSR Outcomes: liquidity metrics, however: – Newer platforms with limited information or near-term visibility - Over the last seven yea
Slide 10: Achieving a new equilibrium with less noise
Achieving a new equilibrium with less noise NAV growth, decluttering and conversion to cash For personal use only • Drive towards achieving independent scale within renewables, eldercare, and data platforms: – Valuation discounts likely to narrow as key platforms achieve independent scale • Good per
Slide 11: Being more precise on portfolio construction
Being more precise on portfolio construction High return development platforms supported by a cash-generating core For personal use only CORE CASH GENERATIVE ASSETS Although the focus is on growth, it is important to retain a proportion of core infra in the portfolio to facilitate the model Renewabl
Slide 12: Platform requirements
Platform requirements How do you qualify as an IFT platform? For personal use only • Has to be an “Idea that Matters” Examples of Ideas that Matter: • Exposure to a clear growth driver with clear - Lowering the cost of energy macro/industry tailwinds - Decarbonisation • Embedded reinvestment options
Slide 13: Core requirements
Core requirements How do you qualify as part of the IFT Core? For personal use only • Acknowledge the difficulty in accessing high-quality infrastructure with low-risk, attractive yield characteristics at reasonable valuations • Any investments (existing or new) performing the role of ‘cash generati
Slide 14: Group capital expenditure and investment
Group capital expenditure and investment Continuing to capture value in existing assets and platforms For personal use only 2018 2019 • The 2019 Outlook includes: Capex Guidance Outlook Outlook – Trustpower reflects generation capex in addition $m $m to its operational and maintenance programme Trus
Slide 15: Infratil FY18 and FY19 guidance
Infratil FY18 and FY19 guidance Core assets and new platforms combine to enable sustained earnings growth For personal use only • Set to deliver a FY18 result at the top end of Guidance 2018 2019 guidance range. This excludes upside from Outlook Outlook associates’ investment valuations that are yet
Slide 16: Committed to investing in ideas that matter
Committed to investing in ideas that matter Willingness to invest early and redefine industries and customer experience For personal use only • Investing in growth infrastructure requires operational capability, access to capital, jurisdictional diversification, and flexible mandates • Why focus on
Slide 17: Tilt Renewables
For personal use only Tilt Renewables presentation for Infratil Investor Day 11 April 2018 01
Slide 18: Agenda
AGENDA • Overview – portfolio and team For personal use only • Tilt Renewables differentiators • Highlights for FY2018 • Australian NEM in transition • Policy trends • Market trends • NZ - Renewable energy landscape • Focus areas for Tilt Renewables
Slide 19: Overview of Tilt Renewables
Overview of Tilt Renewables 19+ years experience developing, owning and operating renewable generation assets across Australasia For personal use only Wholly owned generation Development options capacity (Potential MW) Operational Assets under Wind Solar Storage Assets construction 3,500MW+ AU 582MW
Slide 20: Tilt Renewables Portfolio
Tilt Renewables Portfolio 582 MW operational, 54 MW under construction For personal use only ✓ Source: TLT Analysis 4
Slide 21: Tilt Renewables Value Proposition
Tilt Renewables Value Proposition Key differentiators For personal use only 1 2 3 4 High performing Solid balance sheet Developing storage / Demonstrated ability assets, revenues with strong cashflow firming capability with to develop, execute contracted to strong generated from technology neutral a
Slide 22: Tilt Renewables Value Proposition
Tilt Renewables Value Proposition • Early stage site feasibility, Large operational base and immediate growth opportunities approvals and development For personal use only 1 Competitor Comparison MW 1000 • Procurement, financing and delivery 900 2 800 700 600 • Operations and commercial management 5
Slide 23: Key Differentiator - PPA & Counterparty Overview
Key Differentiator - PPA & Counterparty Overview Tilt Renewables has a high level of contracted revenue, counterparties include Origin Energy, Trustpower, and Meridian Energy For personal use only 100% 98% 90% 84% 83% 83% 82% 82% 82% 82% 82% 82% 82% 82% Contracted capacity1 (%) 80% 71% 70% 60% 50% 4
Slide 24: Australia's National Electricity Market is in transition
Australia’s National Electricity Market is in transition Market characteristics today Opportunities for Tilt Renewables For personal use only • Dominated by black/brown coal, which is • Progressive retirement of 20GW coal, which must ageing be replaced • Low, but growing renewables penetration • Ren
Slide 25: Well positioned: policy trends supportive
Tilt Renewables is well positioned to take advantage of Australian energy market transition 1 Policy Trends are supportive How Tilt Renewables is positioned For personal use only • National Energy Guarantee – components: • Tilt Renewables has a zero emissions portfolio • Emissions linked to Australi
Slide 26: Well positioned: market trends supportive
Tilt Renewables is well positioned to take advantage of Australian energy market transition For personal use only 2 Market Trends are supportive How Tilt Renewables is positioned • Genuine alternatives to traditional PPA market available • Allows TLT to access multiple offtake options to maximise •
Slide 27: New Zealand - Renewable Energy Landscape
New Zealand - Renewable Energy Landscape For personal use only 3 Market Trends are supportive • Relatively stable NZ energy market • Aluminium prices support short-term Tiwai smelter operation • Government review of electricity pricing underway • Labour govt. supportive of transition to zero emissio
Slide 28: Focus areas for Tilt Renewables: Next months
Focus areas for Tilt Renewables: Next 12 months For personal use only Dundonnell / Delivering value Storage and VRET process from the pipeline firming options • Opportunity to grow operational • Diversity across NEM states and • Technology neutral approach: portfolio by 50+% technology batteries, pu
Slide 29: Dundonnell / VRET process
Key project stats Dundonnell Wind Farm Dundonnell / VRET process Turbines 80 wind turbines of up to 4.2MW Installed Capacity 336 MW Key commercial arrangements negotiated For personal use only Annual production ~1,200 GWh lifetime average • Firm EPC and long-term O&M pricing Construction period ~24
Slide 30: Delivering value from the pipeline
Delivering value from the pipeline Overview of key development projects Potential Projects with Environmental Consents Technology Location MW For personal use only Tilt Renewables has made good progress developing its Dundonnell Wind AU-VIC 336 pipeline of near-term investment opportunities beyond 3
Slide 31: Storage and Firming Options - Highbury Pumped Hydro
Storage and Firming Options - Highbury Pumped Hydro Why Storage? For personal use only - Store wind energy at times of high production (low price) - Release wind energy at times of high demand (high price) - Participation in system support ancillary services market - Enables options beyond variable
Slide 32: Storage and Firming Options – Solar and Batteries
Storage and Firming Options – Solar and Batteries For personal use only Co-located wind and solar options at Snowtown and Waddi Source: TLT Analysis • Co-located solar + wind + storage = • smoother energy profile, • lower ancillary services costs, • higher transmission asset utilisation • Batteries
Slide 33: Summary
For personal use only Summary - Diverse operational base, strong cashflows - Revenues highly contracted - Immediate opportunity for significant growth - Key market fundamentals remain positive - Significant development pipeline - Storage and firming options being developed - Real alternatives to tra
Slide 34: Longroad Energy Investor Day
For personal use only INVESTOR DAY April 10, 2018
Slide 35: Confidentiality
CONFIDENTIALITY For personal use only The information set forth in this document (including any written materials provided herewith) is proprietary and shall be maintained in strict confidence. Each recipient hereof acknowledges and agrees that the contents of this presentation (i) constitute propri
Slide 36: Intro to Longroad Energy
INTRO TO LONGROAD ENERGY Owners For personal use only • Focused on US renewables • Founded April 2016 • Funded October 2016 • Business model and strategy focused on three things: – Development LONGROAD ENERGY – Operating Assets PARTNERS, LLC – Services COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRI
Slide 37: Investment Thesis
For personal use only INVESTMENT THESIS • Significant growth in new plant build (>100 GW wind and solar by 2025) • Deep pool of permanent equity • Development capital more scarce • Operating asset base growing (2023: PV > 120 GW, WIND > 120 GW) • Operating asset turnover constant • Stay close to the
Slide 38: Longroad Today
For personal use only LONGROAD TODAY Development Operating Assets Services 1,118 MW ~6.7 GW 684 MW 1,236 MW Near Term Owned by LEH Services Development Development Pipeline 884 MW 352 MW 238 MW 880 MW 386 MW 298 MW WIND SOLAR WIND SOLAR WIND SOLAR 74 Employees Development Back-office Services 16 6 5
Slide 39: US Market Summary
For personal use only US MARKET SUMMARY Headwinds Neutral Tailwinds • Tax reform • Paris Agreement withdrawal • Continued declining production costs of wind and • Solar trade case • Clean Power Plan revocation solar • Grid resiliency • Coal retirements continuing • Steel and aluminum tariffs • Corpo
Slide 40: Challenges
For personal use only CHALLENGES • 35% reduced to 21%, potentially decreasing tax equity Tax Reform supply and challenging economics • Wind hurt more than solar • POTUS decision 1/22/2018 30% import tariff on solar cells and panels Solar Trade • Longroad procured 880 MW of exempt solar panels from C
Slide 41: Longroad – Months Ago
For personal use only LONGROAD – 18 MONTHS AGO Corporate Office COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 8
Slide 42: Vestas PTC Qualified Components
For personal use only VESTAS PTC QUALIFIED COMPONENTS • Longroad qualified enough components to build out ~600 MW • 100% Production Tax Credit (PTC) value applies so long as operational by end of 2020 • Expect to deploy 238 MW at Rio Wind in near term • Actively developing another 200 MW for 2019 •
Slide 43: Development Pipeline
For personal use only DEVELOPMENT PIPELINE Seven Bridges 150 MW Phoebe Solar Foxhound Solar 315 MW 100 MW Rio Wind 238 MW As of March 2018/Wind MW in AC and Solar in DC COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 10
Slide 44: Development Margins
For personal use only DEVELOPMENT MARGINS • Highly dependent on project specifics; very little public disclosure • Key drivers: revenue contract term and credit quality, equipment vendors (Tier 1 vs. others), post-contract revenue assumptions • Levered project returns of 15-20% selling to buyers at
Slide 45: Phoebe Solar
For personal use only PHOEBE SOLAR • 315 MWdc new build solar project in Texas • Financial closing expected 2Q2018 • 12-year revenue agreement in place • Fully-financed with construction and term lenders plus tax equity • EPC and panel supply by First Solar • Commercial operation expected in late 20
Slide 46: Rio Wind
For personal use only RIO WIND • 238 MW new build wind project in south Texas • Financial closing expected 2Q2018 • 15-year revenue agreement in place at closing • Fully-financed with construction and term lenders plus tax equity • Vestas turbine technology with EPC by Mortenson • Commercial operati
Slide 47: GE Repowering
For personal use only GE REPOWERING • Longroad qualified repowering components for ~200 MW GE 1.5 technology • 80% PTC value applies so long as operational by end of 2021 • Ability to raise new tax equity and re-qualify project’s tax benefits • US: 14.5 GW of pre-2011 GE 1.5 technology • Prioritized
Slide 48: Operating Assets and Services
OPERATING ASSETS AND SERVICES MN Wind For personal use only 80 MW Remote Operations Center Portland, Maine Third Party Services Milford Wind + 498 MW wind = 1,236 MW 54 MW solar 306 MW (not shown) Federal Street 298 MW As of March 2018/Wind MW in AC and Solar in DC COPYRIGHT © LONGROAD ENERGY HOLDIN
Slide 49: Federal Street Solar
For personal use only FEDERAL STREET SOLAR • 14 portfolios of operating distributed generation solar projects • 297 MW at 435 individual projects • ~15 years average remaining contracted revenue life • Longroad acquired on balance sheet in 4Q2017 • Recapitalization closed in 1Q2018 resulting in re-c
Slide 50: Minnesota Wind
For personal use only MINNESOTA WIND • 80 MW operating wind farms • Long term contracts with Xcel Energy • Candidates for repowering using Vestas technology • Investment case: acceptable returns through long term ownership with upside in repowering • Asset management and operations COPYRIGHT © LONGR
Slide 51: Milford Wind
For personal use only MILFORD WIND • Two operating wind farms – 306 MW total • Long term contracts with Southern California Public Power Authority • Asset management and operations • Investment case: low purchase price with upside in longer term residual value and expansions COPYRIGHT © LONGROAD ENE
Slide 52: Longroad Today
For personal use only LONGROAD TODAY • Flexible source of capital allows diversified approach to market • Significant progress on all three fronts: development, operating assets, and services • Key staff in place • Market continues to grow but not without some hurdles • Well positioned for continued
Slide 53: Thank You
For personal use only THANK YOU
Slide 54: Infratil Investor Day
Infratil Investor Day For personal use only 2018
Slide 55: Agenda
Agenda › CDC Overview › What are the main elements of the Microsoft For personal use only partnership? › What is the CDC Ecosystem? › Forecast Growth › Key Achievements in FY2018 › How is CDC going to continue growing? › Market Observations › Conclusion › What is Cloud Computing?
Slide 56: Overview: Market Leader
Overview Market Leader For personal use only CDC delivers National › CDC operates 2 accredited and connected Critical Infrastructure Data Centre campuses in Canberra providing highly secure outsourced co- ‘NCI’ to the whole of location Data Centre services to Australian Government entities and third
Slide 57: Overview: CDC has an advantaged market position
Overview CDC has an advantaged market position For personal use only CDC provides highly secure › CDC is well positioned to capitalise on the expected strong market growth outsourced data centre › CDC established its reputation by developing a world class adaptable data centre design that fits uniqu
Slide 58: Operating in a sector with strong demand tailwinds
Overview Operating in a sector with strong demand tailwinds CDC’s investment value is For personal use only CDC is benefiting from massive data processing and storage growth driven by 4 significant trends: propelled by supplying 1. Rapid cloud adoption industry leading products in 2. Government new
Slide 59: Tangible growth pipeline
Overview For personal use only Tangible growth pipeline CDC has a strategy to Numerous growth opportunities are available to CDC: continue delivering › Continued focus on major clients with mission-critical applications innovative new products to a › Utilisation of existing capacity at Fyshwick and
Slide 60: What is the CDC ecosystem?
What is the CDC ecosystem? The CDC ecosystem enables For personal use only customers to connect with one another and trusted suppliers securely within the data centre The CDC ecosystem continues getting stronger, more resilient and more secure as it grows Data has its own gravity Flexibility and con
Slide 61: Key Achievements in FY2018
Key Achievements in FY2018 Growing — Year on year EBITDA run rate growth up ~35%, delivering a contracted run rate at 31 For personal use only Very strong year in March 2018 of $69m and expect to secure growth of a further ~2.0MW to be delivered in the next quarter FY2018 Strengthening — Expanded th
Slide 62: Market Observations
Market Observations Hyperscale — Unprecedented demand, providers are growing revenues at 50%+ annually and moving For personal use only CDC’s addressable to a partnership model to secure capacity in Australia, pricing is competitive but sustainable market is growing rapidly Metronode — Purchase by E
Slide 63: What are the main elements of the Microsoft partnership?
What are the main elements of the Microsoft partnership? For personal use only Strategic for CDC Strategic for Microsoft CDC have embarked on a › Increases the CDC ecosystem › Designed for Government mission-critical multilayer, strategic relationship with › Leading global hyper scale operator appli
Slide 64: What is Cloud Computing?
What is Cloud Computing? Cloud Growth Microsoft define cloud For personal use only › Cloud is a buzzword indicative of an evolving approach to how the internet is used rather than a computing as “the delivery of technology in itself computing services – › Three broad categories of cloud services; So
Slide 65: April 2018 – Microsoft Partnership Launch
3 April 2018 – Microsoft Partnership Launch Media Headlines For personal use only “Microsoft launches its Canberra salvo in cloud wars with “Microsoft’s Australian cloud gets approved to host protected AWS” government data” AFR, 3 April 2018 CRN, 3 April 2018 “Microsoft launches Azure cloud regions
Slide 66: Focusing on Mission-Critical Applications
Focusing on Mission-Critical Applications A mission critical application is essential to the survival of a business or organisation. For personal use only Failure or interruption would significantly disrupt their business operations. Disaster resilience Defence & National Security Reliable high perf
Slide 67: How Mission-Critical Cloud brings value to the CDC ecosystem
How Mission-Critical Cloud brings value to the CDC ecosystem For personal use only Compliance Hybrid Flexibility Connectivity Resilience Restricted Community Manage Unclassified and Co-locate customer legacy Connect via ExpressRoute The 2 Azure regions in Access by invite or application Protected da
Slide 68: Forecast Growth
Forecast Growth For personal use only CDC has an exciting Forecasting 20% YoY EBITDA run rate growth in FY2019 from: pipeline of diverse › Cloud opportunities with new and › Non-organic expansion from new agencies existing clients › Organic growth from existing customers › Expansion of managed servi
Slide 69: How is CDC going to continue growing?
How is CDC going to continue growing? For personal use only The CDC data centre design is Fyshwick 2 Hume 4 always evolving and becoming › On track and on budget 21MW facility › CDC has exchanged on a parcel of land more flexible in order to meet › 1,500m2 of Zone 4 office space › 30,000m2+ site sec
Slide 70: Conclusion
Conclusion CDC is well positioned to For personal use only CDC is a valued advisor and solution partner with deep customer relationships continue growing and provide the essential Financing and land has been secured for medium term business growth services to meet customer Ecosystem continues to get
Slide 71: Questions?
For personal use only Questions?
Slide 72: Infratil Investor Day
For personal use only Infratil Investor Day April 2018
Slide 73: Overview
Overview For personal use only Core business Growing business Investment execution and and pipeline of thesis performance opportunities 2
Slide 74: Retirement accommodation demand and dynamics
Retirement accommodation demand and dynamics Ageing population Care policy changes For personal use only Australians over 65 years ^~ (LHS) supports greater supports higher RV residents at 5.7% penetration * (RHS) demand demand RV residents at 7.5% penetration * (RHS) 10 0.80 • Over the next 30 year
Slide 75: Our strategic vision set post acquisition remains unchanged
Our strategic vision set post acquisition remains unchanged For personal use only STRATEGIC Our vision is to be the recognised leader in customer-centric retirement communities and VISION care services to make us the first choice of older Australians and their families. Core Focus – Existing portfol
Slide 76: RetireAustralia – Future (2021) consistent focus since 2016
RetireAustralia – Future (2021) consistent focus since 2016 For personal use only 5
Slide 77: RetireAustralia – End FY18 achievements
RetireAustralia – End FY18 achievements For personal use only 6
Slide 78: Core business execution
Core business execution For personal use only Financial drivers of existing resales Outcomes FY16-FY18 Closely monitoring three measurable indicators of RetireAustralia’s core business success Drive entry 16.3% price growth Increase average 1% to 80.6 years age Speed to market 20% reinstate an
Slide 79: Industry in the spotlight
Industry in the spotlight • In June 2017, Fairfax and ABC published an investigation into Aveo For personal use only • Several months of negative media coverage about the retirement village industry in Australia “It’s like a financial sinkhole. Once you’re “Bleed them dry until they die” in, it’s ve
Slide 80: Operator impact – resales downturn, recovery underway
Operator impact – resales downturn, recovery underway Publicly owned operators have reported a downturn in enquiry and sales and For personal use only an increase in deposit fallovers, resulting in higher vacancy rates. Key industry player sales results to prior comparable period (PCP) Perception of
Slide 81: Retirement industry rallies – opportunity to reset for the future
Retirement industry rallies – opportunity to reset for the future Retirement Living Council developed an Eight For personal use only Point Plan • Consistent national • Village accreditation legislation • Code of conduct 1. Support nationally consistent retirement village legislation and contracts. 2
Slide 82: Review of capital structure to support growth
Review of capital structure to support growth Since acquisition there had been For personal use only no review of the capital structure Initial capital structure Final capital structure December 2014 March 2018 • Brownfield development and site acquisitions have been $250m core business $120m core b
Slide 83: Development pipeline being secured and delivered in FY18
Development pipeline being secured and delivered in FY18 • 3 Brownfield projects were completed • 2 Greenfield development projects achieved For personal use only development approval with 1 more imminent • 2 Brownfield projects under construction • 3 Greenfield developments in development • All bro
Slide 84: Medium term development pipeline
Medium term development pipeline – delivering 200 per annum* For personal use only Green field villages FY19 FY20 FY21 FY22 Beyond Brownfield villages FY19 FY20 FY21 FY22 Beyond Village Product Type Delivery stages Village Product Type Delivery stages Burleigh Golf Independent Wood Glen Independent
Slide 85: Developing the care continuum the RetireAustralia way
Developing the care continuum the RetireAustralia way For personal use only What are Care Apartments? – Transitioning from the traditional Serviced Apartment offering (which is primarily domiciliary Built form services) to a “private aged care” offering which – 40 – 45 m2 apartments expands the serv
Slide 86: RetireAustralia Care
RetireAustralia Care Australia’s care funding For personal use only model is changing • Australia is moving to consumer directed care • Home care has already transitioned • Quality and reporting framework across home care and residential aged care is being standardised from July 2018 • Government si
Slide 87: RetireAustralia Care – positioned well for changing funding model
RetireAustralia Care – positioned well for changing funding model For personal use only Anticipated Australian Government Policy reforms RetireAustralia’s progress • Transitioning existing portfolio of more Short term • Merge home support and home care package than 400 serviced apartments to care fu
Slide 88: Robust operations and development pipeline
For personal use only 2 urban villages under construction and continue to build development pipeline 200-300 pa Robust Existing portfolio of broad acre operations villages aligned to our long term and resales strategy
Slide 89: Infratil Governance
Infratil Governance For personal use only 11 April 2018
Slide 90: Infratil's Governance
Infratil’s Governance For personal use only • Infratil’s 6 directors. Between 2 and 12 years experience in the role 2 INFRATIL INVESTOR DAY 2018
Slide 91: Infratil's Governance: Where it's the same and where it differs
Infratil’s Governance: Where it’s the same and where it differs For personal use only • Infratil management contract with H.R.L. Morrison & Co frames Board-Management interactions – Investments and divestments approved by the Board – Capital management, capital structure, risk appetite/management ar
Slide 92: Infratil's Governance
Infratil’s Governance For personal use only • The Board recognises that the interests of the Manager and the interests of Infratil shareholders have the potential to conflict – Board must be aware of and assess potential conflicts in relation to strategies and Manager revenues – Monitoring the perfo
Slide 93: Infratil's Governance
Infratil’s Governance For personal use only • Conflicts with MCO clients – deal allocation – Infratil has used investment joint ventures for many years and expects to continue to do so • The Board encourages MCO to find aligned parties with which to co-invest – Success of the MCO business should be
Slide 94: Trustpower presentation to Infratil Investor Day
For personal use only Infratil Investor Day | 11 April 2018 1. Trustpower presentation to Infratil Investor Day 11 April 2018
Slide 95: Trustpower re-positioning post demerger complete
Trustpower re-positioning post demerger complete For personal use only • A New Zealand focused multi-product platform with scale and growth potential • Divestment of GSP Energy Australian Hydro assets adds value and tightens focus • Completion of King Country Energy take over with King Country Elect
Slide 96: Trustpower's strategy – to create executable options driving shareholder returns
Trustpower’s strategy – to create executable options driving shareholder returns For personal use only Bundling Energy and Generation Portfolio Maximising Identifying New Telco Performance Electricity Value Markets Strategic Pillars Shareholder Value Driving action based Meeting our Strong, positive
Slide 97: Generation portfolio performance
For personal use only Generation portfolio performance
Slide 98: FY18 Generation volume – drives performance
FY18 Generation volume – drives performance For personal use only Generation volume 2,000,000 1,500,000 GWh 1,000,000 Generation volume well above long run average, however return to average would out perform 500,000 FY14 – FY16 0 Total NI (Excl KCE) Total SI KCE 5. Trustpower presentation to Infrat
Slide 99: Wholesale price and volume risk management
Wholesale price and volume risk management – delivers sustainable earnings For personal use only Well positioned for the start of Trustpower Controlled Storage winter 2017 200 $400 • Geographically distributed 180 Peter C- original graph from $350 generation James T I think $300 • Strong generation
Slide 100: Generation performance focus
Generation performance focus For personal use only • Emphasis on health & safety, dam/civil safety and maintaining our licence to operate and compliance projects • Sharper focus on enhancement and incremental growth to create earnings uplift • Improving asset management maturity – more predictive an
Slide 101: Bundling energy and telecommunications
For personal use only Bundling energy and telecommunications
Slide 102: Focus on execution of proven products with increasing customer acceptance
Focus on execution of proven products with increasing customer acceptance For personal use only Current connections TOTAL CUSTOMERS BY REGION Bay of Plenty Metro Regional 273,000 electricity 24% 44% 38,000 gas 32% 88,000 telco Comment • 2/3rds of all new customers are taking 2 or more products • We
Slide 103: Now the leading multiproduct business
Now the leading multiproduct business – differentiates from competition For personal use only BUNDLE CUSTOMERS BY BUNDLED CUSTOMERS BY TENURE REGION Less than 1 Year 1-3 Years Bay of Plenty Metro Regional 3-5 Years > 5 Years 22% 32% 28% 21% 11% 40% 46% Focused cross sell and retention in FY18 Target
Slide 104: Value based offers outperform discounting
Value based offers outperform discounting For personal use only Acquisition incentive costs aligned to cost of discounts or cash incentives, however value based offers outperform: • Better sales conversion and lower sales leakage • Lower churn and lower credit risk • Higher energy consumption and la
Slide 105: Maximising electricity value
For personal use only Maximising electricity value
Slide 106: Electricity segment – Demonstrates diversity & tenure
Electricity segment – Demonstrates diversity & tenure For personal use only Electricity only Consumer Market • Electricity segment remains highly competitive with consolidation and failures likely ELECTRICITY CUSTOMER BASE • Balanced portfolio across Commercial, Industrial, BY REGION Government and
Slide 107: Meeting our customer needs
For personal use only Meeting our customer needs
Slide 108: Focus on efficiency, automation and digital solutions
Focus on efficiency, automation and digital solutions For personal use only • Increase in the numbers of products supplied and associated customer contacts is offset by the migration of customers to non staffed channels, leading to lower staff numbers • Productivity of our staffed workforce has incr
Slide 109: Automation providing customers with choice
Automation providing customers with choice For personal use only • 45.7% of all customer contacts are now serviced without human intervention • Chatbot receiving customer satisfaction ratings on par with an agent • Trustpower App released with 29,000 interactions to date and achieving high satisfact
Slide 110: Growth and industry overview
For personal use only Growth and industry overview
Slide 111: Evolution of TECT process
Evolution of TECT process For personal use only TECT Proposal withdrawn • The trustees of the Tauranga Energy Consumer Trust ("TECT") announced, following consultation, they will not be proceeding further with their proposal announced on 25 January 2018 • Under that proposal, the trustees proposed t
Slide 112: Key regulatory issues
Key regulatory issues For personal use only Low emissions economy • Trustpower supports and is well placed to contribute to the transition to 100% renewable electricity by 2035 Electricity price review • The current market structure functions well. The focus should be on barriers for ▪ transition to
Slide 113: Industry consolidation
Industry consolidation For personal use only Trustpower is well positioned to capitalise on emerging market opportunities • The joint KCE takeover offer by Trustpower and the King Country Electric Power Trust (KCEPT) was successful. Trustpower and KCEPT are now working together to achieve synergies,
Slide 114: In summary
In summary For personal use only • Trustpower repositioned as a New Zealand focused multi-product platform • Multi-product platform delivering for customers and shareholders • Well positioned in an uncertain and changing world for further convergence with proven integration capability 21. Trustpower
Slide 115: Disclaimer
Disclaimer For personal use only While all reasonable care has been taken in the preparation of this presentation, Trustpower Limited and its related entities, directors, officers and employees (collectively "Trustpower") do not accept, and expressly disclaim, any liability whatsoever (including for
Slide 116: Thank You
For personal use only Thank You
Slide 117: Appendix
For personal use only Appendix
Slide 118: Generation volumes
Generation volumes For personal use only FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Long run average MWh MWh MWh MWh MWh MWh MWh MWh MWh MWh MWh MWh MWh MWh Long Term NI Generation 690,401 780,391 546,024 749,931 614,570 779,535 921,240 724,997 566,207 516,092 626,126 758,366 9
Slide 119: For personal use only
For personal use only
Slide 120: $250M invested over the last five years
›› $250M INVESTED OVER THE LAST FIVE YEARS For personal use only 01 02 03 04 Terminal Redevelopment Multi Level Car Park Rydges Airport Hotel Taxiway Overlay NZ$60m NZ$70m NZ$36m NZ$25m Extension complete. 30% 50% increase in parking spaces. Strategic upside with regional Resurfacing and widening fo
Slide 121: Customer Service
›› CUSTOMER SERVICE For personal use only Airport Service Quality Score vs Peer Group Benchmark 2017 (ASQ Score) 5.00 • Ranked #3 in Australasia 4.60 • 4.3 out of 5.0 for Service Quality 4.20 3.80 3.40 3.00 Wayfinding Info Screens Baggage Washrooms Waiting Areas Ambience Check-in Trolleys Flight Wal
Slide 122: Innovation and Efficiency
›› INNOVATION AND EFFICIENCY For personal use only • Airfield optimisation - two additional taxi lanes and increased aircraft parking stands, nose-in guidance systems, automated airbridges • Accelerometers to enable accurate and efficient earthquake decision making • Online portal for real time info
Slide 123: Aeronautical Returns
›› AERONAUTICAL RETURNS For personal use only • Regulatory profit of $36.8m FY17 • ROI of 8.58%, excl revaluations 6.7% • Current airline prices expire 31 March 2019 • Preparing for next airline pricing consultation “The review concluded that information disclosure has largely worked well to date, a
Slide 124: International Passenger Growth 1998 - 2018
›› INTERNATIONAL PASSENGER GROWTH 1998 - 2018 For personal use only 4.1 % over last 20 years 605k 900k 4.2 % over last 10 years 404k 1998 2008 2017 4.4 % over last 5 years Wellington International Passengers
Slide 125: New Arrivals
For personal use only ›› NEW ARRIVALS
Slide 126: New Arrivals – Fiji Airways
›› NEW ARRIVALS – FIJI AIRWAYS For personal use only Fiji 47 % Fiji traffic 78% used to fly via Auckland 52% now fly direct 67 % Air NZ capacity 242 Auckland % Wellington Wellington – Fiji direct traffic
Slide 127: New Arrivals – Singapore Airlines
›› NEW ARRIVALS – SINGAPORE AIRLINES For personal use only “After 16 months of operation it is quite clear that Wellington has performed very well for us” 20 86 Asia % Singapore % 83 56 India % Indonesia % Increase in International arrivals into Wellington Airport since Singapore Airlines service co
Slide 128: Connectivity vs Market Share
›› CONNECTIVITY VS MARKET SHARE For personal use only 3.1 China % 2.5 Korea % 4.1 Japan % Bad connectivity 8.2 Australia % Good connectivity % Visitor spend in Wellington Year ended 2017
Slide 129: $250M forecast over the next five years
›› $250M FORECAST OVER THE NEXT FIVE YEARS For personal use only • Airfield improvements - southern apron, runway overlay, taxiway reconstruction • Baggage handling system • Fire Station • Seawall reconstruction • Navigation aids • Hotel stage 2 • Second stage retail expansion • Further commercial d
Slide 130: Draft 2037 Masterplan
›› DRAFT 2037 MASTERPLAN For personal use only • Developing draft Masterplan for 2037 • Passengers forecast to exceed 10M • Demand for aircraft parking sees the need for some golf course land • Possibility of International Terminal expansion to the South • Aircraft type, gates, stands, apron • Bagga
Slide 131: Draft 2037 Masterplan
›› DRAFT 2037 MASTERPLAN For personal use only Apron Apron/ aviation International support Terminal Regional Aviation Cargo apron support /catering
Slide 132: Runway Extension – Reapplying to CAA on safety length
›› RUNWAY EXTENSION – REAPPLYING TO CAA ON SAFETY LENGTH For personal use only Airport • April 2018 Update RESA information for CAA reconsideration Judicial hearing on request to hold existing consent application • September 2018 Possible CAA decision on RESA length • March 2019 Proceed with existin
Slide 133: Structural Changes in NZ Tourism
›› STRUCTURAL CHANGES IN NZ TOURISM For personal use only
Slide 134: Structural Changes in NZ Tourism
›› STRUCTURAL CHANGES IN NZ TOURISM For personal use only • Tourism hotspots are filling up • Focus on Auckland must change and growth is reliant on regional dispersal
Slide 135: Structural Changes in NZ Tourism
›› STRUCTURAL CHANGES IN NZ TOURISM For personal use only • New itineraries including Wellington • Marlborough and Nelson increasingly linked to Wellington Marahau Picton Wellington Central Nelson Central Blenheim St Arnaud
Slide 136: Structural Changes in NZ Tourism
›› STRUCTURAL CHANGES IN NZ TOURISM For personal use only 260k 157k 37k 2008 2017 2018 It was difficult to link Wellington and Queenstown That’s changed with a 600% increase in direct capacity
Slide 137: Questions
›› QUESTIONS For personal use only • Well positioned for international traffic growth • Investing $250M over the next five years • Airfield improvements • Hotel stage 2 • Second stage retail expansion • Further commercial development on western land • Masterplan 2037
Slide 138: Infratil Portfolio Strategy
Infratil Portfolio Strategy For personal use only Paul Newfield, CIO Infratil Investor Day April 2018
Slide 139: Bringing you inside the Infratil Portfolio Strategy Process
Bringing you inside the Infratil Portfolio Strategy Process Taking a portfolio-wide view to maximise risk-adjusted returns For personal use only • IFT Investor Day is the culmination of our annual investment strategy review process • Presentations today aimed to provide greater insight into the perf
Slide 140: The Infratil Portfolio Strategy Process
The Infratil Portfolio Strategy Process Prioritising capital across an option-rich portfolio For personal use only Macro & Market Conditions IFT’s Strategic Purpose Overall Portfolio Portfolio Review Positioning Capacity and Cashflow & Opportunity Prioritisation Capital Allocation Choices Existing P
Slide 141: Macro & Market Environment
Macro & Market Environment Developed economies recovering, but long term growth capacity remains constrained For personal use only OECD Real GDP Growth Unemployment – Four largest advanced economies % change from year earlier % of labour force 5.0 12 4.5 4.0 11 3.5 3.0 10 2.5 2.0 9 1.5 1.0 8 0.5 0.0
Slide 142: Interest rate outlook starting to turn
Macro & Market Environment Interest rate outlook starting to turn For personal use only Changing Interest Rate Expectations since the GFC US Federal reserve rate and forward curves as at 1 Jan each year (2007-2018), % 6 5 4 3 2 Actual fed rate Forward curve at 1 Jan each year 1 Actual fed rate - LTM
Slide 143: US Pressure Cooker Economy
Macro & Market Environment Last year we flagged our fear of a US “Pressure Cooker Economy”, all the ingredients are now in place For personal use only Fiscal Populist Stimulus Politics Tax Cuts Protectionism Aging Population Defence Spend Stagnant Productivity Immigration Restrictions Infrastructure
Slide 144: Rising trend of nationalism & interventionism
Macro & Market Environment Rising trend of nationalism & interventionism For personal use only 7 INFRATIL INVESTOR DAY 2018
Slide 145: The flow of capital into infrastructure shows no sign of abating
The flow of capital into infrastructure shows no sign of abating Institutions increasing allocations, a mountain of dry powder is forming For personal use only Unlisted Infrastructure Fund Dry Powder (excludes Direct Investors) Total World ($bn) 160 161 152 +10.3% p.a. 109 105 109 84 73 66 64 68 200
Slide 146: However deal flow is declining as major privatizations dry up
However deal flow is declining as major privatizations dry up Decline particularly notable in Australian core infrastructure For personal use only Aggregate infrastructure deal value Total World ($bn) -28.3% 470 390 334 337 278 267 259 248 187 201 61 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Slide 147: Macro and market conditions: Summary
Macro and market conditions: Summary For personal use only Observations IFT Implications • Short term, stimulus-driven growth • Manage IFT equity allocation aggressively • Increasing short term pressure on rates • Term out debt positions • Longer term growth constrained by • Prioritise embedded opti
Slide 148: Infratil's Strategic Purpose: Excess Returns from Growth Infrastructure
Infratil’s Strategic Purpose: Excess Returns from Growth Infrastructure Recap: Our Definition of “Growth Infrastructure” For personal use only • An “idea that matters” • Solving long term needs Secular growth • Demographic, economic & drivers technological megatrends Growth Infra Proprietary • Barri
Slide 149: Capacity and Cashflow
Capacity and Cashflow IFT’s core assets providing balance sheet strength and cashflows to support reinvestment For personal use only CORE CASH GENERATIVE ASSETS Core assets Core assets support dividends generate >$150m and debt service pa of free cash Renewables Eldercare Data Emerging Platform Plat
Slide 150: Capacity & Cashflow: Prudent Management of IFT Balance Sheet
Capacity & Cashflow: Prudent Management of IFT Balance Sheet Current gearing headroom provides opportunity for further investment For personal use only Infratil debt maturity profile • Maintaining IFT balance sheet capacity NZ$m – $269 million (excluding ECGD) of undrawn bank facilities and $250+ mi
Slide 151: Existing platforms presenting proprietary investment options
Existing platforms presenting proprietary investment options Multi-year programme of option development is now bearing fruit For personal use only CORE CASH GENERATIVE ASSETS Material pipeline of Continue R&D on investment options emerging platforms across existing - Essential to remain platforms ah
Slide 152: Existing Platforms: Renewable Energy
Existing Platforms: Renewable Energy IFT’s established positions place it ahead of the pack For personal use only Tilt and Longroad offer attractive access points… …to the most sought after infrastructure asset class % of investors specifically targeting each sub-sector • Renewable energy is the mos
Slide 153: Existing Platforms: Data Infrastructure
Existing Platforms: Data Infrastructure Data Centres increasingly in the cross-hairs of infrastructure investors For personal use only Risk/Return attributes increasingly understood… …And valuation metrics are rising accordingly Australian data centre operator NTM EV/EBITDA(R)1 multiples (x) • “Data
Slide 154: IFT Portfolio Positioning & Capital Allocation
IFT Portfolio Positioning & Capital Allocation Attractive set of investment options will force tough capital allocation calls For personal use only • IFT portfolio is well set to deliver excess returns – Strong cashflow generation and capacity for new investment – New platforms delivering high retur
Slide 155: IFT Portfolio Strategy: Ultimate Focus on Shareholder Returns
IFT Portfolio Strategy: Ultimate Focus on Shareholder Returns Recognising the need for portfolio simplification, while sowing seeds for future value For personal use only • Small assets struggle for recognition within the IFT share price – Implies a tightening of the portfolio – Growth platforms wil