Infratil Limited · NZX:IFT
Infratil — Trustpower — Shareholder Meeting (September 2016)
26 slides from Infratil's shareholder meeting presentation, Sep 9, 2016
Slide 1: Trustpower AGM 9 September 2016
Trustpower AGM 9 September 2016
Slide 2: Chairman's Update
CHAIRMAN’S UPDATE
Slide 3: Key Strategic Issues
Key Strategic Issues • Energy sector regulations o Electricity Authority consultation on transmission pricing and distributed generation pricing principles • Multi-product strategy • Role of renewable energy in New Zealand • Water
Slide 4: Electricity Authority Consultation on Transmission Pricing and Distributed Generation Pricing Principles
Electricity Authority Consultation on Transmission Pricing and Distributed Generation Pricing Principles • Electricity Authority released draft proposals in May 2016 • If adopted as is, these proposals will reduce incentives on owners of distributed generation to respond to peak demand • As drafted,
Slide 5: Trustpower's Position
Trustpower’s Position: • The consultation process proposed by the Electricity Authority is flawed: ― Insufficient time ― Insufficient process • Trustpower has initiated court proceedings to challenge the process. This will be heard on 14 September • Proposals of this magnitude demand robust and fuls
Slide 6: Role of Renewable Energy
Role of Renewable Energy • Post demerger, Trustpower is 100% hydroelectric powered • Hydroelectric provides: • 55% of national installed capacity (by MW) • 57% of average national electricity output (by GWh) • 72% of average national renewable electricity output (by GWh) • Trustpower’s stations are
Slide 7: Implications for Water
Implications for Water This highlights the water issues: o Quality o Allocation o Flexibility o Pricing/Resource rentals Trustpower’s use is ‘non-consumptive’ (i.e. it can be used for agriculture and recreation after use by us) Trustpower can, and does, work co-operatively with consumptive users (mo
Slide 8: Chief Executive's Update
CHIEF EXECUTIVE’S UPDATE
Slide 9: Highlights 2016 financial year
Highlights 2016 financial year
Slide 10: FY16 Financial Highlights
FY16 Financial Highlights March 2016 March 2015 EBITDAF ($m) 329 331 Underlying Earnings after tax ($m) 101 123 Dividends paid (cents per share) 42 40 Gearing Ratio 41% 40% Net Tangible assets ($ per share) 5.69 5.55 Total connections (000’s) 370 304 Total generation (GWh) 3,763 3,681
Slide 11: EBITDAF bridge full year 2015 - 2016
EBITDAF bridge full year 2015 - 2016 360 355 350 345 $M 340 335 330 325 320
Slide 12: Trustpower retail – customer growth FY 2016
Trustpower retail – customer growth FY 2016 • Customer numbers up 14.5% • Successful brand and entry strategy in urban markets
Slide 13: Customer retention is critical – Trustpower outperforms
Customer retention is critical – Trustpower outperforms
Slide 14: Multi product strategy delivers customer loyalty
Multi product strategy delivers customer loyalty • Energy and Telco Markets remain highly competitive • In July Customers on bundles with Telco churned at about half the rate of customers on bundles without Telco • Churn rate of about 2% as customers transition from the $49 price to $79 Source : Tru
Slide 15: Multi product – targets being met
Multi product – targets being met March 2016 35% 65% One product March 2017 (Target) Two or more products 42% 58%
Slide 16: New metro-markets – bundle take exceeds expectations
New metro-markets – bundle take exceeds expectations Overall Campaign Conversion 1 April 2016 – 31 July 2016 31% 69% One product Two or more Up from 56% last year products
Slide 17: Generation highlights
Generation highlights • In 2016 projects that have enhanced generation value by $7.5m have been completed with a further $8.3m of value creation in progress from a potential pipeline of $35m identified. Hydro pic • In-sourcing of previously contracted services in Marlborough, Central Otago, and thro
Slide 18: King Country Energy acquisition a positive addition
King Country Energy acquisition a positive addition • Trustpower holds 64.5% of KCE acquired at an offer price of $4.78 per share. • KCE owns and operates 5 hydro stations with a combined installed capacity of 54MW and generates around 190GWh/pa. - The Mangahao power scheme located near Palmerston N
Slide 19: Health and Safety
Health and Safety ® Health and Safety at Work Act (HSWA) 2015 @ Our Direction Risk based effort (don’t sweat the small stuff) with structured focus on effective controls An audit of our Safety Management Systems has been undertaken and confirmed both our compliance with requirements and a focus for
Slide 20: Community Focus
Community Focus Supporting community volunteer groups who create better communities
Slide 21: Tilt Renewables transition
Tilt Renewables transition New Trustpower is expected to: • Support the creation of Tilt Renewables • Provide Services through the Transition Services Agreement • Recognise that the success of Tilt Renewables is validation of the Trustpower Strategy
Slide 22: First quarter FY 2016
First quarter FY 2016 June 2016 June 2015 Electricity Connections 279,000 248,000 Gas Connections 32,000 26,000 Telco Connections 66,000 44,000 Total Sales 1,014GWh 1,029GWh Total NZ Generation 609GWh 599GWh Australian Generation 371GWh 295GWh
Slide 23: Strategic focus FY 2017 (New Trustpower)
Strategic focus FY 2017 (New Trustpower) • Maintaining momentum for the Trustpower Brand in Energy and Telco Markets • Integrating EDNZ into the Trustpower business • Maximising value from our existing generation asset base • Successful transition of Tilt Renewables to a stand alone business • Ensur
Slide 24: Non-GAAP Measures
Non-GAAP Measures • Underlying Earnings is a non GAAP (Generally Accepted Accounting Principles) financial measure. Trustpower believes that this measure is an important additional financial measure to disclose as it excludes movements in the fair value of financial instruments which can be volatile
Slide 25: Thank You
AM. -z THANK YOU
Slide 26: Disclaimer
Disclaimer This presentation has been prepared by Trustpower Limited (Trustpower) in relation to a proposed demerger transaction (Demerger). Information: This presentation contains summary information about Trustpower and the currently intended activities of New Trustpower (currently a subsidiary of