Infratil Limited · NZX:IFT
Infratil — Investor Day (April 2018)
15 slides from Infratil's investor day presentation, Apr 11, 2018
Slide 1: Infratil Future Directions Investor Day
Infratil Future Directions Investor Day 11 April 2018
Slide 2: Infratil plan is clear
Infratil plan is clear Harvest development options while optimising the portfolio • Extract the value from our platforms – Renewables, eldercare and data • Optimise the core – Ongoing performance management and capital management – Core cash generating assets continue to perform an important role in
Slide 3: NAV poised for strong growth given recent platform development
NAV poised for strong growth given recent platform development Emphasis is shifting back to capital growth • Proprietary platforms are a critical indicator of future success – Key to generating long-term compound returns • New renewables, eldercare, and data infrastructure platforms firmly establish
Slide 4: Most options are largely independent of macro considerations
Most options are largely independent of macro considerations Growth infrastructure differentiated from rate-exposed low risk infrastructure • Macro environment not getting any easier – Risk of global market dislocation over the medium term remains real – Competition for mid-risk growth infra assets
Slide 5: Flexible investment mandate is a competitive advantage
Flexible investment mandate is a competitive advantage Infratil mandate has evolved over time – Longroad the best current example • Flexible mandate enables Infratil to maximise returns over the long-term – Portfolio can accommodate development, growth infrastructure and operational assets – Patienc
Slide 6: Mandate flexibility matched by multiple levers on capital
Mandate flexibility matched by multiple levers on capital Preserving capital for proprietary pipeline and compound growth • Current capital settings: – Approximately $500m of cash and available facilities prior to any potential divestments – Reliable Free Cash Flow from core assets – Aligned JV part
Slide 7: Portfolio construction questions and parameters
Portfolio construction questions and parameters Maintaining pragmatic approach while tightening portfolio construction • Why growth infrastructure? Primary and Secondary Portfolio – Less competed Parameters: – Requires operating capability and active management – Stronger absolute and risk-adjusted
Slide 8: Cost of complexity is real
Cost of complexity is real Other portfolio considerations impact overall valuation • Portfolio is in equilibrium in terms of return, credit and TSR Outcomes: liquidity metrics, however: – Newer platforms with limited information or near-term visibility - Over the last seven years IFT has – Increasin
Slide 9: Achieving a new equilibrium with less noise
Achieving a new equilibrium with less noise NAV growth, decluttering and conversion to cash • Drive towards achieving independent scale within renewables, eldercare, and data platforms: – Valuation discounts likely to narrow as key platforms achieve independent scale • Good performance in smaller st
Slide 10: Being more precise on portfolio construction
Being more precise on portfolio construction High return development platforms supported by a cash-generating core CORE CASH GENERATIVE ASSETS Although the focus is on growth, it is important to retain a proportion of core infra in the portfolio to facilitate the model Renewables Eldercare Data Emer
Slide 11: Platform requirements
Platform requirements How do you qualify as an IFT platform? • Has to be an “Idea that Matters” Examples of Ideas that Matter: • Exposure to a clear growth driver with clear - Lowering the cost of energy macro/industry tailwinds - Decarbonisation • Embedded reinvestment options - Allowing people to
Slide 12: Core requirements
Core requirements How do you qualify as part of the IFT Core? • Acknowledge the difficulty in accessing high-quality infrastructure with low-risk, attractive yield characteristics at reasonable valuations • Any investments (existing or new) performing the role of ‘cash generating core’ will need to
Slide 13: Group capital expenditure and investment
Group capital expenditure and investment Continuing to capture value in existing assets and platforms 2018 2019 • The 2019 Outlook includes: Capex Guidance Outlook Outlook – Trustpower reflects generation capex in addition $m $m to its operational and maintenance programme Trustpower 25-30 40-45 – T
Slide 14: Infratil FY18 and FY19 guidance
Infratil FY18 and FY19 guidance Core assets and new platforms combine to enable sustained earnings growth • Set to deliver a FY18 result at the top end of Guidance 2018 2019 guidance range. This excludes upside from Outlook Outlook associates’ investment valuations that are yet to $m $m be finalised
Slide 15: Committed to investing in ideas that matter
Committed to investing in ideas that matter Willingness to invest early and redefine industries and customer experience • Investing in growth infrastructure requires operational capability, access to capital, jurisdictional diversification, and flexible mandates • Why focus on ideas that matter? – E