Slide 1: ASX release cover letter
For personal use only ASX RELEASE 5 September 2011 The Manager Company Announcements Office Australian Securities Exchange 4th Floor, 20 Bridge Street Sydney NSW 2000 Electronic Lodgement Dear Sir or Madam Company Announcement I attach the following announcement for release to the market: • Presenta
Slide 2: APA investor information and FY2011 result highlights
For personal use only APA investor information and FY2011 result highlights September 2011
Slide 3: About APA Group
About APA Group For personal use only APA is Australia’s largest natural gas infrastructure business Australian gas transmission pipelines owners by length (km) Energy Infrastructure: Prime – Own and operate gas pipelines and Infrastructure 1,105 (1) interconnected gas storage facilities DUET 1,48
Slide 4: APA well positioned in a growing industry
APA well positioned in a growing industry For personal use only Unrivalled gas asset footprint – Largest transporter of natural gas across Australia (1) Stable and secure cash flow – Regulated and contracted revenue Attractive growth opportunities – Enhancing capacity in APA’s portfolio to mee
Slide 5: Strategy for sustainable growth and security
Strategy for sustainable growth and security For personal use only Continue to maximise value for securityholders Enhancing APA’s portfolio of gas infrastructure assets in Australia’s growing energy market – Abundant and growing gas reserves – Increasing demand for natural gas, particularly for el
Slide 6: Stable and secure revenue
Stable and secure revenue FY11 Revenue Split For personal use only More than 95% of APA’s revenue is derived Other 1% from either price regulated or contracted assets Subject to price Contracted 49% Regulated Price regulated assets revenue regulation 50% – Tariffs on core services are set by reg
Slide 7: Developing profitable growth opportunities
Developing profitable growth opportunities For personal use only Growth capital expenditure Developing opportunities that enhance the value of APA’s energy infrastructure portfolio Emu Downs Further expansion of APA’s wind farm pipelines to meet growing demand acquisition for gas transportation and
Slide 8: Maximising value for securityholders
Maximising value for securityholders Operating cash flow For personal use only Four years of organic growth 300 290 – Operating cash flow CAGR of 17.8%(1) 250 – EBITDA CAGR of 13.5% (1) 200 $ million – Total securityholder return of 46% 150 100 Total securityholder return (4 financial years from 3
Slide 9: FY2011 result highlights
For personal use only FY2011 result highlights 8
Slide 10: Solid, consistent result
Solid, consistent result For personal use only 2011 2010 Change $ million $ million Total revenue excluding pass‐through (1) 720.3 659.5 9.2 % Total revenue 1,102.0 989.5 11.4 % EBITDA (2) 492.1 460.0 7.0 % EBIT 391.8 368.5 6.3 % Net interest expense (247.1) (229.4) (7.7%) Tax (35.9) (38.7) 7.3 % Ne
Slide 11: Strategic and operational highlights
Strategic and operational highlights For personal use only Expanding APA’s energy infrastructure and investments Amadeus Gas Pipeline Acquired (buy‐out of the Facilitating the development residual balance of the lease) of gas‐fired power generation in Mt Isa Roma Brisbane Pipeline Completed lateral
Slide 12: Strategic and operational highlights: secure revenue and strong balance sheet
Strategic and operational highlights For personal use only Secure revenue and operations, strong balance sheet Long term revenue agreements with highly credit‐worthy parties for expansion and acquisitions – Four new contracts with average term of around 20 years Successful debt refinancing and e
Slide 13: Strategic and operational highlights: creating value
Strategic and operational highlights For personal use only Creating value by maintaining or increasing earnings Developing total energy solutions for customers – Using scale and industry expertise to provide customised services across assets – Proposed gas fired power station for Mt Isa would prov
Slide 14: EBITDA by business segment
EBITDA by business segment For personal use only 2011 2010 EBITDA split by segment $ million $ million Change Energy Infrastructure Energy Investments Queensland 106.8 103.3 3.4 % Asset 5.5% New South Wales 101.3 96.8 4.6 % Management 7.9% Victoria & South Australia 115.9 105.7 9.6 % Qld Western Aus
Slide 15: Fully covered distributions
Fully covered distributions For personal use only 2011 distribution in line with guidance 60 51.9 52.6 2011 distributions 48.2 50 payout ratio(1) of 42.7 65.7% (2010: 64.4%) 39.7 cents per security 40 30 34.4 31.0 32.75 28.0 29.5 20 10 0 2007 2008 2009 2010 2011 (1) Distribution payout ratio: total
Slide 16: Capital expenditure and funding
Capital expenditure(1) and funding For personal use only 2011 2011 $ million $ million Growth capital expenditure Funds Regulated Operating cash flow 290 Victoria Transmission System 33.4 Less distributions, SIB capex, APA Gas Networks (Qld) 16.1 debt and security issue Major Projects costs, and cas
Slide 17: Prudent capital management
Prudent capital management For personal use only Cash and committed undrawn facilities of $320 million at 30 June 2011 – Reduced debt headroom by cancelling $412 million undrawn syndicated bank facilities . 2011 metrics 2011 2010 Gearing (1) at 30 June 66.2 % 69.8 % Interest cover ratio at 30 Ju
Slide 18: Capital management strategy
Capital management strategy For personal use only Managing balance sheet to maintain minimum investment grade credit rating metrics – Standard & Poor’s BBB; Moody’s Baa2 Refinancing program focused on extending debt maturity, diversifying funding sources and reducing borrowing costs – Next refin
Slide 19: FY2012 guidance
FY2012 guidance For personal use only EBITDA – expected within a range of $530 million to $540 million Net interest cost – expected within a range of $260 million to $265 million Distribution – at least equal to FY2011 total distributions per security APA ‐ developing attractive growth project
Slide 20: Drivers underpinning APA's long term growth
For personal use only Drivers underpinning APA’s long term growth 19
Slide 21: Opportunities in the energy landscape
Opportunities in the energy landscape For personal use only Growth catalysts Carbon Carbon reducing measures increase price competitiveness of natural gas reduction policy – Natural gas produces 30 to 50 per cent of the carbon emissions produced by current coal technologies in generating electrici
Slide 22: Abundant east coast gas supply
Abundant east coast gas supply For personal use only East Australia proven and probable gas reserves (PJ) End 2000 End 2000 Mid 2011 Vic (Gippsland, Bass, Otway) 5,907 5,778 SA (Cooper) 3,435 1,373 Qld (Bowen/Surat) 108 183 Qld coal seam gas 0 34,986 NSW coal seam gas 0 2,910 TOTAL 9,450 45,230 3,43
Slide 23: Electricity generation driving gas demand
Electricity generation driving gas demand For personal use only Growth in gas volumes (1) – Average annual growth rate of 3.4% pa over the next 20 years (compared with 1.4% for primary energy) – 1,240 PJ in 2007‐08, doubling to 2,570 PJ in 2029‐30 Factors influencing gas demand increase – Invest
Slide 24: Good reasons for gas-fired generation
Good reasons for gas‐fired generation For personal use only Reduced carbon emissions – Produces 30 to 50 per cent of the emissions produced by current coal technologies in generating electricity Quick start generation – Suitable for managing peak demand – Provides ‘natural hedge’ for electricity
Slide 25: A well positioned portfolio
A well positioned portfolio For personal use only APA infrastructure benefit – Incrementally expand pipeline capacity – Deliver gas from multiple sources – Supply security Eastern WA & NT Generation (MW) market market Gas generation Existing ‐ network 8,446 4,122 Existing ‐ non network 333 1,495 U
Slide 26: APA's storage capability
APA’s storage capability For personal use only Current storage capability and expansion opportunities Mondarra Gas Storage Facility (Western Australia) – Underground gas storage (depleted gas reservoir) connected to Parmelia Gas Pipeline (APA) and Dampier Bunbury Pipeline – Capacity expansion proj
Slide 27: Discretionary capital expenditure
Discretionary capital expenditure For personal use only Growth capex enables APA to leverage additional value from its existing assets APA maintains flexibility in relation to the amount and timing of larger growth capex projects – All growth capex is underpinned by regulatory framework or long
Slide 28: Summary - delivering growth, security and value
Summary ‐ delivering growth, security and value For personal use only APA’s energy infrastructure portfolio is well positioned in the Australian market – Connected to all major gas sources and gas markets Enhancing our position in a growing market – Expanding our energy infrastructure portfolio
Slide 29: Supplementary information
For personal use only Supplementary information 28
Slide 30: APA asset and investment portfolio
APA asset and investment portfolio For personal use only APA, September 2011 29
Slide 31: Total committed debt facilities at June 2011
Financials For personal use only Total committed debt facilities at 30 June 2011 Facility Facility amount (1) Tenor 2009 Bilateral borrowing (2) $150 million August 2014 2011 Bilateral borrowings (3) $225 million July 2014 2007 Syndicated facility (2) $900 million June 2012 2009 Syndicated facility
Slide 32: Economic regulation
Economic regulation For personal use only APA’s major price regulated assets Regulatory resets over the next five years Regulatory resets are spread out over five years, with on average one reset per year – Goldfields Gas Pipeline new access arrangement commenced on 20 August 2010 – APA Gas Netw
Slide 33: Economic regulation of gas pipelines and networks
Economic regulation of gas pipelines and networks For personal use only Regulator The Australian Energy Regulator (AER) is responsible for the economic regulation of gas transmission and distribution networks and enforcing the National Gas Law and National Gas Rules in all jurisdictions except Wes
Slide 34: APA business segments
APA business segments FY2011 EBITDA % For personal use only Australia’s largest gas pipeline owner, present in each mainland state and 86.6% territory APA manages and operates all its energy infrastructure assets Gas transmission pipelines: – Approximately 10,400 km of high pressure gas transm
Slide 35: FY11 performance: Energy Infrastructure Queensland
FY11 performance: Energy Infrastructure For personal use only Queensland Roma Brisbane Pipeline – Completion of lateral to large industrial customer – Commenced major expansion project, underpinned by revenue agreements – Flood damage and repairs Repairing the Roma Brisbane Pipeline post floods
Slide 36: FY11 performance: Energy Infrastructure New South Wales
FY11 performance: Energy Infrastructure For personal use only New South Wales Moomba Sydney Pipeline expansion – 3rd year in 5‐year expansion program (FY11 capex $8 million, with total spend to date of $59 million) – Compressor reconfiguration ($6 million) – Fully contracted – gas transportation a
Slide 37: FY11 performance: Energy Infrastructure Victoria & South Australia
FY11 performance: Energy Infrastructure For personal use only Victoria & South Australia Increased gas flow due to a cooler winter – 8% increase in gas flows to 246 PJ Northern augmentation program completed – Wollert compressor station upgrade, Springhurst and flow reversal Wollert compressor s
Slide 38: FY11 performance: Energy Infrastructure WA & NT
FY11 performance: Energy Infrastructure For personal use only Western Australia & Northern Territory Goldfields Gas Pipeline – 10% reduction in access arrangement reference tariffs (from August 2010), affecting ~40% of APA’s GGP revenue – Merits review process underway Mondarra Gas Storage Facil
Slide 39: FY11 performance: Asset Management, Energy Investments
FY11 performance: Asset Management, Energy Investments For personal use only 38.7 Asset Management EBITDA $ million 40 Increased revenue from Envestra asset 20 management and additional third party work ‐ Added asset management of Wagga Wagga gas 2008 2009 2010 2011 network acquired by Envestra
Slide 40: Year history of delivering growth and value: TSR
11 year history of delivering growth and value For personal use only Total securityholder returns since listing 600 APA total securityholder returns TSR of 427%, 500 ASX All Ords accumulation index CAGR of 16.2% Utilities accumulation index 400 300 200 100 0 Jun‐00 Jun‐01 Jun‐02 Jun‐03 Jun‐04 Jun‐05
Slide 41: Year history of delivering growth and value
11 year history of delivering growth and value Operating cash flow Operating cash flow per security For personal use only 300 290 60 52.6 250 50 200 40 $ million cents 150 30 100 20 50 10 0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 201
Slide 42: Disclaimer
Disclaimer For personal use only This presentation has been prepared by Australian Pipeline Limited (ACN 091 344 704) the responsible entity of the Australian Pipeline Trust (ARSN 091 678 778) and APT Investment Trust (ARSN 115 585 441) (APA Group). Summary information This presentation contains sum
Slide 43: For further information contact
For personal use only For further information contact Delivering Australia’s energy Chris Kotsaris Investor Relations, APA Group Tel: +61 2 9693 0049 E‐mail: chris.kotsaris@apa.com.au or visit APA’s website www.apa.com.au