Challenger Limited · ASX:CGF
Challenger — Challenger Infrastructure Fund — H1 2010 Earnings Presentation
23 slides from Challenger's earnings presentation, Feb 18, 2010
Slide 1: Challenger Infrastructure Fund Interim Results Presentation
Challenger Infrastructure Fund Interim Results Presentation – 18 February 2010 Chief Executive - Steve Bickerton Chief Financial Officer - Lucas Barry 18 F February b 2010
Slide 2: Important Notice
Important Notice Information contained in this publication is current as at 18 February 2010 unless otherwise specified and is provided by Challenger Listed Investments Limited (ABN 94 055 293 644) (AFSL 236887) (“CLIL”), as Responsible Entity of CIF Investment Trust 1 (ARSN 114 139 703) and CIF Inv
Slide 3: Agenda
Agenda 1 2010 Interim 1. I t i Results R lt 2. Financial Performance 3. Capital Management 4. Growth Opportunities 5. Outlook 3
Slide 4: 1. 2010 Interim Results
1. 2010 Interim Results
Slide 5: 1H10 Highlights
1H10 Highlights Solid - Continued strong asset performance with increasing EBITDA margins across both assets - Inexus’ EBITDA and EBITDA margin growth resulting from opex management operating - LBC’s performance driven by continued high demand for bulk liquid storage performance Capital - Successful
Slide 6: 2. Financial Performance
2. Financial Performance
Slide 7: Net Asset Value of $2.50 per Security
Net Asset Value of $2 $2.50 50 per Security CIF NAV $3.00 2.89 0.05 (0.30) NAV updated to include: (0.07) (0.07) 2.50 $2.50 - Significant foreign exchange $2.00 impact due to strengthened Security Price $ $1.50 Australian Dollar vs Sterling and $1.00 Euro $0.50 - Inexus valuation updated p to $0.00
Slide 8: CIF Statutory Results
CIF Statutory Results $A millions illi 1H10 1H09 %M Mvtt T Trend d EBITDA before realised & unrealised items 74.6 114.4 (35%) L Depreciation (34.5) (34.0) (1%) L Financing costs (49.7) (80.1) 38% L NP(L)BT & realised & unrealised items (9.6) 0.3 L Unrealised movements – derivatives1 (62.0) (33.7) N/
Slide 9: Inexus – Financial Performance
Inexus – Financial Performance Significant improvement in EBITDA margin driven by opex savings £ millions 1H10 1H09 % Mvt Trend Revenue from operations £25.1 £24.6 2% K Developer contributions – accounting change1 £4.2 £5.4 (22%) L Total revenue £29.3 £30.0 (2%) L Opex (£8.3) (£12.7) 35% L EBITDA1 £
Slide 10: Inexus – Operating Performance
Inexus – Operating Performance Highlights EBITDA1 - EBITDA growth of 21% from opex management 30 80% Underlying EBITDA (£ million) 70% - EBITDA margin improvement of 14% increasing Underlying EBITDA margin 25 60% 20 50% EBITDA margins to 72% 15 40% - Opex savings of £4.4 million on pcp due to 30% 10
Slide 11: LBC – Financial Performance
LBC – Financial Performance EBITDA growth of 15% during period $US millions 1H10 1H09 % Mvt Trend Revenue $123.7 $121.4 2% K Opex ($73.5) ($77.9) (3%) K EBITDA $50.2 $43.5 15% K EBITDA margin (%) 41% 36% 5% K Underlying EBITDA $50.2 $49.81 1% K 1 Excludes US$6.3m one-off non-recurring opex items. Fu
Slide 12: LBC – Operating Performance
LBC – Operating Performance EBITDA and d margin i Highlights 60 45% - Resilient revenue performance of 50 40% US$123.7 million in difficult market 35% 40 30% conditions $USD million 25% 30 20% - EBITDA growth of 15% as a result of 20 15% growth capex investment since acquisition 10% 10 5% - Solid pe
Slide 13: Capital Management
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Slide 14: Capital Management Initiatives
Capital Management Initiatives Refinance of - Successful refinance of £461m debt facility, demonstrating quality of Inexus business model Inexus • Existing bank group extended term of facility to 31 August 2012 • £426m senior facility priced at an initial margin of 250bp • £35m junior facility price
Slide 15: Capital Management Summary
Capital Management Summary Asset Sales 60% Four assets divested at prices at or ount) to NAV 40% above CIF’s NAV leading to: 20% CIF trading premium/(discou - Fund’s proportional net debt being 0% Jan-07 Aug-07 Mar-08 Oct-08 May-09 Dec-09 reduced from 67% to 58% over last -20% year -40% -60% - No Fu
Slide 16: Growth Opportunities
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Slide 17: Inexus – Growth Potential
Inexus – Growth Potential Multi utility model and provision of one Multi-utility one-stop stop utility service for developers to drive future connections growth Inexus Growth Capex (£m)2 - Inexus has a strong track record in 20 80% generating a 28% CAGR since acquisition1 18 70% 16 - Inexus has the
Slide 18: LBC – Growth Potential
LBC – Growth Potential Increasing demand for bulk liquid storage in Gulf Coast and ARA to drive future expansion EBITDA and EBITDA Margin (USDm) - Capacity has increased 23% across the portfolio since acquisition with 60 45% 41% EBITDA margins1 achieved and 50 40% 35% high utilisation rates maintain
Slide 19: Summary and Outlook
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Slide 20: Outlook – Continued Focus on Operational Performance
Outlook – Continued Focus on O Operational ti lP Performance f LBC - Maximise M i i operational ti l performance f off strategically t t i ll llocated t dE European terminal assets - Investment in highly accretive growth capex to deliver ongoing revenue and EBITDA growth g - Enhanced EBITDA margins
Slide 21: Outlook – Strengthened financial position to support growth
Outlook – Strengthened financial position t supportt growth to th The capital management initiatives implemented over the last two years have transformed the Fund - strengthening its financial position, debt profile and the growth outlook for the portfolio CIF’s key characteristics include: - Two ma
Slide 22: Questions
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Slide 23: Contacts
Contacts Steve Bickerton Chief Executive Tel: 61 2 9994 7327 Email: sbickerton@challenger.com.au L Lucas B Barry Chief Financial Officer Tel: 61 2 9994 7022 Email: lbarry@challenger lbarry@challenger.com.au com au Jenny Warat Investor Relations Manager Tel: 61 2 9994 7663 Email: jjwarat@challenger.c
Challenger Infrastructure Fund — H1 2010 Earnings Presentation on 6ix