Infratil Limited · NZX:IFT
Infratil — Investor Day (March 2011)
19 slides from Infratil's investor day presentation, Mar 8, 2011
Slide 1: Infratil Overview Investor Day
INFRATIL OVERVIEW INVESTOR DAY MARCH 8, 2011 1
Slide 2: Infratil Investor Day 2011 - Agenda
Infratil Investor Day 2011 - Agenda Time Presenter Topic 9.00am Marko Bogoievski ‐ CEO Infratil Infratil overview and introduction 9.45am Dr Philip Verleger – PKVerleger LLC The global oil market and future oil prices 10.45am Break 11.00am Mike Bennetts ‐ CEO Greenstone Current plans and the future
Slide 3: Objectives for the day
Objectives for the day • Principal objectives: - Introduce the team - Update the facts - Highlight the challenges and the opportunities - Lay out the plan - Get your perspective • Focus is on capital allocation, NZ energy markets and positioning of Greenstone Energy and TrustPower: - Australian ener
Slide 4: Infratil – focus and consistency are reaping rewards
Infratil – focus and consistency are reaping rewards • Strengthening cash flow and earnings • Increased proportion of portfolio with strong market positions in sectors we believe are fundamentally attractive • Improving value of internal development pipeline and reinvestment options • Better access
Slide 5: Current context … pressure building for a re-rating
Current context … pressure building for a re-rating • Emphasis on improving free cash flow and earnings continues • Core holdings performing very well and current outlook is significantly ahead of our base 2010-11 plan targets • Value of internal development pipeline continues to grow • Less competi
Slide 6: Investors seeking confirmation and follow through
Investors seeking confirmation and follow through • The Greenstone transaction has forced a partial re-examination of IFT following a busy 2008-2010 - good execution in a number of financial and operational initiatives - most investors now looking for follow through and confirmation of recent perfor
Slide 7: 2010/11 delivery - better performance with less risk
2010/11 delivery - better performance with less risk • Greenstone Energy - Market share gains and improving margins in rapidly changing market - Opportunities to reinvest - Capex consistent with bid case • Lumo Energy (formerly Infratil Energy Australia) - Material earnings contribution - NSW privat
Slide 8: Investors are adept at finding new concerns …
Investors are adept at finding new concerns … • Immediate outlook for TPW - recent TPW performance and spike in customer churn following SOE asset swaps has raised some question over the medium term outlook • Privatisation of SOE’s - SOE privatizations – although good for long term market discipline
Slide 9: So, what will drive the re-rating?
So, what will drive the re-rating? Dividends Total Growing Closing the NTA Underlying NTA Shareholder Discount Returns Buybacks 9
Slide 10: We've been working on the qualitative factors…
We’ve been working on the qualitative factors… Dividends Closing the NTA Discount Growing Total Underlying NTA Shareholder Returns - Discipline - Consistency of the investment model - Access to capital - Origination outlook Buybacks 10
Slide 11: But focus is always on growing underlying NTA …
But focus is always on growing underlying NTA … Dividends Growing Underlying NTA Total Closing the NTA Shareholder Discount Returns - Sector allocation - Performance management - Sequence and timing of projects - M&A Buybacks 11
Slide 12: High conviction around our major assumptions ...
High conviction around our major assumptions ... Related Net Asset Confidence Fundamental Assumption or Trend Asset Exposure Levels Rising electricity price path in NZ TPW $1.1bn High Inherent NPV in exclusive development TPW, Lumo, options and internal capex PE, GEL $2.0bn High Future value of dual
Slide 13: Satisfaction with our secondary assumptions …
Satisfaction with our secondary assumptions … Related Net Asset Confidence Fundamental Assumption or Trend Asset Exposure Levels Development of carbon pricing in Australia and New Zealand TPW, Lumo, PE $1.6bn Med Further development of LCC airline model in Australasia and Asia WIAL $0.4bn Med Public
Slide 14: Capital allocation priorities are under constant review
Capital allocation priorities are under constant review • Portfolio rebalancing is not complete - Still monitoring public transport and European airport sectors - Other opportunities to recycle capital (e.g. Snowtown I) • Group capital expenditure largely depends on decisions around TPW, Greenstone,
Slide 15: And sector choices are being actively managed …
And sector choices are being actively managed … Activity Recent Examples Future Focus (example) Drive short‐term Greenstone, Lumo Energy, NZ Greenstone, Lumo, TPW performance Bus Deliver greenfield Kwinana, Port Stanvac, Snowtown II, Arnold hydro, construction projects Mahinerangi NSW gas‐fired powe
Slide 16: Momentum + activity = compound growth
Momentum + activity = compound growth Activity Recent Examples Future Focus (example) Influence industry SOE privatisations in the NZ structure Air NZ/Virgin alliance electricity market Develop resource consents Arnold and Wairau hydro for future projects schemes Water and irrigation in NZ Influence
Slide 17: 2011 Outlook - upside bias to EBITDAF earnings
2011 Outlook - upside bias to EBITDAF earnings • EBITDAF range $415 million to $435 million – major assumptions: - approx $30 million equity earnings contribution from HY 30 Sept 2010 FY 2011 50% of Greenstone Energy ($Millions) H1 2011 Guidance - TrustPower EBITDAF in line with FY 2010 EBITDAF $258
Slide 18: Confidence in the long-term outlook
Confidence in the long-term outlook • Favourable sector trends and capital investment program will drive consolidated EBITDAF towards $500 million - exposure to rising energy prices and consumption, changing NZ fuels industry, air travel and urban mobility • Next phase of investment cycle will suit
Slide 19: mpatil
mpatil