Genesis Energy Limited · NZX:GNE
Genesis Energy — Merger or Acquisition (May 2017)
22 slides from Genesis Energy's merger presentation, May 1, 2017
Slide 1: Acquisition of Nova Energy Retail LPG Business
GENESIS ENERGY Acquisition of Nova Energy Retail LPG Business 1 May 2017 Marc England, CEO Chris Jewell, CFO
Slide 2: Transaction Highlights
Transaction ____ Highlights
Slide 3: Genesis Energy's Strategy in Action
Genesis Energy’s Strategy in Action Genesis Energy has entered into a binding agreement1 to acquire Nova Energy’s retail LPG business, a leading supplier of LPG in New Zealand, for NZ$192 million Positions Genesis Energy as a leading player in a key growth market Delivers strategic synergies in dist
Slide 4: Nova Energy Retail LPG Highlights
Nova Energy Retail LPG Highlights Pivotal moment in customer centric-growth strategy Significant LPG distribution network covering key demand centres in New Zealand and complementary to Genesis Energy’s existing footprint Well established customer base across residential, commercial and industri
Slide 5: Strategic Benefits for Genesis Energy
Strategic Benefits for Genesis Energy Creating value in our LPG business in an attractive market whilst supporting the strategy of delivering a superior offering of integrated energy management solutions Becoming a LPG Improved Unlocking new Capturing Scale capability retailer of scale customer cust
Slide 6: Transaction Summary
Transaction Summary Accelerated platform for LPG segment growth Acquisition of Nova Energy’s LPG distribution assets and customer base for $192 million with an option to Transaction acquire Nova’s 12.5% interest in Liquigas for up to $15 million Positions Genesis as the second largest LPG retailer (
Slide 7: Strategic Benefits for Genesis
Strategic____ Benefits for Genesis
Slide 8: Becoming an LPG retailer of scale
Becoming an LPG retailer of scale Step change in LPG market share from 3% to 19% in a growth market with higher margins Residential Margins2 • Genesis Energy is the largest electricity and gas retailer LPG Market Share1 Total Market 45kg with a 25% and 38% market share respectively, but Genesis LPG
Slide 9: Improved customer experience
Improved customer experience Scale allows an improved holistic customer offering and acceleration of innovation activities • Genesis Energy now has a unique industry position of combining three fuels on one billing and CRM platform, allowing complete integration of the customer experience • A range
Slide 10: Unlocking new customer segments
Unlocking new customer segments Superior distribution network will allow Genesis Energy to target new customers • Previous restriction to distribute to SME customer segment Customer Churn 18% removed supporting strategic SME growth priority 17% 14% 11% • Ability to leverage Genesis Energy’s successf
Slide 11: Capture upstream benefits
Capture upstream benefits Rebalancing upstream and downstream LPG positions Existing Composition of Genesis Pro Forma Composition of Genesis • With the acquisition of the additional 15% of Kupe, Energy’s LPG Sales Energy’s LPG Sales (Post Existing Wholesale Contracts)(1) Genesis Energy will produce
Slide 12: Scale capability in distribution
Scale capability in distribution Leveraging distribution network capabilities to reduce costs • Genesis Energy currently uses an external third party contractor to serve its LPG customer base − LPG distribution costs represent 45% of the total delivered cost in the 45kg market − This results in sign
Slide 13: Business Overview
Business ____ Overview
Slide 14: Summary of Acquisition
Summary of Acquisition Nova Retail LPG Genesis Energy LPG Production Production New capability, staff, Depots, Vehicles, Cylinders, OHSE and Asset Management skills added as well as a Asset Management and Distribution potential interest in Liquigas and Distribution Marketing, Sales Marketing, Sales
Slide 15: Summary of Asset Base
Summary of Asset Base 23 depots across the country servicing ~35,000 customers • Significant distribution network covering most of New Zealand with opportunities to expand coverage into Wellington, Upper South Island and West Coast • Assets include: − 23 depots or which 15 are Nova owned and operate
Slide 16: LPG Distribution Chain
LPG Distribution Chain “Just-in-time” delivery approach minimises storage requirements • A combination of road, rail and trucks are used to move LPG stock around the country to depots and storage facilities − LPG will be taken from production at Kupe or Mangahewa to New Plymouth railhead by truck −
Slide 17: Financial Impact and Timetable
Financial____ Impact and Timetable
Slide 18: Financial Impacts
Financial Impacts 5% EPS accretion after synergies are delivered1 • ~$17 million additional EBITDAF in FY18 before integration costs 1 Month FY17 FY18 Year Ended 30 June EBITDAF Impact and synergies $ millions $millions Revenue 5.0 53.5 • Synergies of $4-6 million per annum expected to be delivered
Slide 19: Completion Timetable
Completion Timetable Independently run and rebranded business from 1 August 2017 Estimated timing Announcement of transaction 1 May 2017 Completion of confirmatory due diligence(1) 15 May 2017 Effective date of acquisition 31 May 2017 Transition service period starts(2) 1 June 2017 Transition servic
Slide 20: Transaction Summary
Transaction Summary Creating a platform for delivering superior integrated energy management solutions • Unique industry advantage in integrating the customer experience across three fuel types • Increased exposure to a growing market with higher margins relative to other fuels • Immediate distribut
Slide 21: Thank You
Thank You Ww j ENERGY
Slide 22: Disclaimer
Disclaimer This presentation has been prepared by Genesis Energy Limited (‘Genesis Energy’) for information purposes only. The information in this presentation is of a general nature and does not purport to be complete nor does it contain all the information required for an investor to evaluate an i