Apa Group · ASX:APA
Apa — FY2019 Earnings Presentation
32 slides from Apa's earnings presentation, Aug 21, 2019
Slide 1: Financial results year ended 30 June 2019
financial results year ended 30 June 2019. For personal use only 21 August 2019
Slide 2: Disclaimer
disclaimer This presentation has been prepared by Australian Pipeline Limited (ACN 091 344 704) as responsible entity of the Australian Pipeline Trust (ARSN 091 678 778) and APT Investment Trust (ARSN 115 585 441) (APA Group). For personal use only The information in this presentation does not conta
Slide 3: Results overview and strategic highlights
For personal use only results overview and strategic results overview and highlights strategic highlights Rob Wheals Managing Director and CEO. 3
Slide 4: FY2019 highlights – solid performance
FY2019 highlights – solid performance $ million FY2019 FY2018 change For personal use only Statutory results Revenue excluding pass-through(1) 2,031.0 1,941.4 Up 4.6% EBITDA 1,573.8 1,518.5 Up 3.6% Net profit after tax 288.0 264.8 Up 8.8% Operating cash flow(2) 1,012.1 1,031.6 Down (1.9%) Operating
Slide 5: Safety and sustainability
safety and sustainability For personal use only Health and safety Sustainability FY2019 TRIFR result 5.98 • APA believes that climate change is a significant issue facing the energy industry and the Australian community 33.1% improvement on FY2018 • Natural gas and our diversified energy asset po
Slide 6: Customer focus & The Energy Charter
customer focus & The Energy Charter putting customers at the centre of our decision-making For personal use only APA’s Customer Promise • Customer Promise developed and launched • Multi-year improvement program to: Drive the right culture Deliver improvement initiatives Together, deliver energy
Slide 7: APA's largest capex program
APA’s largest capex program Yamarna Gas Pipeline • $1.4 billion plus growth capex FY2017 – connection to the For personal use only FY2019 Gruyere Power Station, WA • $463 million growth capex in FY2019 • $65 million incremental revenue in FY2019 growing to ~$215 million in FY2021 from new asset cont
Slide 8: Responding to customers needs
responding to customers needs new energy infrastructure added in 3 years For personal use only • 8 new assets • Added 272 km of transmission pipelines, 45 MW gas-fired power station, and ~278 MW of renewable generation • 70 TJ/d of gas processing capacity will be added to APA’s portfolio from Q4 CY2
Slide 9: Financial performance
For personal use only financial results overview and performance strategic highlights Peter Fredricson Chief Financial Officer. 9
Slide 10: Summary results
summary results $ million FY2019 FY2018 Change APA made the following For personal use only Revenue excluding contributions to the 2,031.0 1,941.4 4.6% pass-through(1) broader economy EBITDA 1,573.8 1,518.5 3.6% during FY2019: Depreciation and amortisation (611.4) (578.9) (5.6%) • $1,205 million EBI
Slide 11: FY2019 result: EBITDA by business segment
FY2019 result: EBITDA by business segment For personal use only % of FY19 $ million FY2019 FY2018 Change EBITDA(1) Energy Infrastructure Queensland 1,010.1 962.2 5.0% 61.1% New South Wales 149.4 147.1 1.5% 9.0% Victoria & South Australia 116.0 127.2 (8.8%) 7.0% Northern Territory 19.2 22.9 (16.4%) 1
Slide 12: FY2019 EBITDA bridge
FY2019 EBITDA bridge For personal use only Energy Infrastructure $1,650.0 A$m $15.6 ( $12.3 ) $12.5 ( $3.2 ) ( $12.1 ) $21.9 ( $13.2 ) $1,600.0 $5.4 ( $12.2 ) (1) $52.9 $1,573.8 $1,550.0 $1,518.5 $1,500.0 $1,450.0 $1,400.0 Notes: (1) Includes $11.1 million of costs associated with the CKI proposal a
Slide 13: Low risk business model
low risk business model • APA has robust risk management processes in place Manage counterparty risks by: For personal use only • Diversification of customer & industry exposure Assessment of counterparty creditworthiness Putting in place appropriate credit support arrangements Entering into
Slide 14: Capital expenditure
capital expenditure $ million FY2019 FY2018 • Growth capex $462.8 million in FY2019 Growth capex (FY2018: $742.9 million) For personal use only Regulated – Victoria 30.6 33.0 • Expected $300-$400 million per annum over the next Non-regulated two to three years East Coast 208.6 326.6 • Major projects
Slide 15: Capital management
capital management • Credit ratings: S&P BBB (outlook Stable, affirmed Nov 2018) For personal use only Moody’s Baa2 (outlook Stable, affirmed Feb 2019) • Strong credit metrics provide balance sheet flexibility • All outstanding debt is fully hedged into fixed interest rates out to FY2035 • During FY
Slide 16: Debt maturity profile
debt maturity profile APA maintains diversity of funding sources and spread of maturities(1) For personal use only $1,600m Headroom (undrawn committed facilities) Bank borrowings $1,400m Sterling MTN $1,200m Euro MTN US 144A Notes $1,000m Japanese MTN $800m Australian MTN $600m US Private Placement
Slide 17: Fully covered distributions
fully covered distributions • FY2019 distribution payout ratio(1) of 54.8% Franking Credits For personal use only • Components for FY2019 final distribution: • $71.8 million tax payable for FY2019 8.53 cents APT profit distribution (FY2018: $52.0 million) 10.44 cents APT capital distribution • FY201
Slide 18: Strategy and outlook
For personal use only strategy results overview andand outlook strategic highlights Rob Wheals Managing Director and CEO. 18
Slide 19: APA's strategy
APA’s strategy East coast gas demand & production by field • Deliver services our customers value consistent with For personal use only APA’s Customer Promise Contingent and Prospectives 2,500PJ 2P Undeveloped 2P Developed • Continue to strengthen asset and stakeholder 2,000PJ AEMO gas demand foreca
Slide 20: Energy infrastructure contracting
energy infrastructure contracting Pipeline recontracting ongoing: Number of renewed firm service contracts 60 For personal use only • No formal access requests which may trigger arbitration process 50 • Since the GMRG reforms (1 Aug 2017) were 40 introduced, APA has entered into ~173 contracts or 30
Slide 21: North America – continuing due diligence
North America – continuing due diligence • Ongoing due diligence of the North American gas infrastructure sector continuing For personal use only with a focus on: acquiring a gas infrastructure business that will provide a strong platform for future growth targeting businesses with similar busin
Slide 22: FY2020 guidance
FY2020 guidance Based on current operating plans and available information: For personal use only • EBITDA is expected to be in the range of $1,660 million to $1,690 million • Net interest costs are expected within a range of $505 million to $515 million • Distributions per security are expected to
Slide 23: Priorities for FY2020
priorities for FY2020 • complete review of APA’s purpose, vision and strategic imperatives For personal use only • implement new organisational model to support strategy execution • progress APA’s growth strategy, both organic in Australia, and possible US acquisition • continued focus on operationa
Slide 24: APA's uniquely integrated energy infrastructure
APA’s uniquely integrated energy infrastructure Assets and Investments Glossary For personal use only AGPGLOS Amadeus Gas Pipeline AL Agnew Lateral Darwin WPP BGP Bonaparte Gas Pipeline 783 PJ BWSF Badgingarra Wind and Solar Farms BGP BWP Berwyndale Wallumbilla Pipeline CGP Carpentaria Gas Pipeline
Slide 25: Supplementary information
For personal use only supplementary information 25
Slide 26: Solid historical performance
solid historical performance Normalised EBITDA Normalised operating cash flow $1,800m $1,200m For personal use only $1,600m $1,574 $1,000m $1,032 $1,518 $1,012 $1,400m $1,470 $974 $1,331 $1,200m $800m $862 $1,000m $600m $800m $822 $545 $747 $600m $662 $400m $433 $440 $535 $336 $400m $200m $200m $0m
Slide 27: FY2019 operational summary – Energy Infrastructure
FY2019 operational summary – Energy Infrastructure Wallumbilla Gladstone Pipeline South West Queensland Pipeline Roma Brisbane Pipeline Carpentaria Gas Pipeline Diamantina Power Station Darling Downs Solar Farm Other Qld assets Moomba Sydney Pipeline For personal use only and other NSW pipelines Vic
Slide 28: Historical normalised EBITDA by asset – Energy Infrastructure
historical normalised EBITDA by asset – Energy Infrastructure $ millions FY15 FY16 FY17 FY18 FY19 East Coast Grid For personal use only Wallumbilla Gladstone Pipeline 35.8 475.2 488.0 515.9 542.4 South West Queensland Pipeline 188.3 240.3 242.4 244.3 250.0 Moomba Sydney Pipeline and other NSW pipeli
Slide 29: Asset Management and Energy Investments
Asset Management and Energy Investments Asset Management EBITDA For personal use only Asset Management A$ 70 m • EBITDA decreased to $53.0 million due to lower 60 customer contributions and incentive fees One-off Customer compared to FY2018 50 Contributions • Long term average of customer contributi
Slide 30: Corporate costs
Corporate costs • Corporate costs have been steady throughout a record growth period for APA For personal use only A$ m 1,800 10% 1,600 8% 1,400 1,200 6% 1,000 (1) 800 (2) 4% 600 400 2% 200 0 0% FY14 FY15 FY16 FY17 FY18 FY19 Corporate costs (LHS) EBITDA (LHS) Corporate costs/EBITDA* (RHS) Notes: *EB
Slide 31: Debt facilities
debt facilities Total committed debt facilities at 31 July 2019 For personal use only $ million Facility Drawn Tenor amount amount 2015, 2016, 2017, 2018 & 2019 550 130 3 to 5 year facilities maturing between December 2019 to July 2022 Bilateral bank facilities 2018 Syndicated bank facilities 1,000
Slide 32: For further information contact
For personal use only For further information contact: Jennifer Blake Group Head of Investor Relations Tel: +61 2 9693 0097 / +61 455 071 006 E-mail: jennifer.blake@apa.com.au Or visit the APA website at: www.apa.com.au 32