Capstone Infrastructure Corp · TSX:CSE.PR.A
Capstone Infrastructure — Shareholder Meeting (June 2014)
37 slides from Capstone Infrastructure's shareholder meeting presentation, Jun 17, 2014
Slide 1: Building for Tomorrow – Annual General Meeting
BUILDING FOR TOMORROW Annual General Meeting of Shareholders June 17, 2014
Slide 2: Notice to Readers
Notice to Readers Certain of the statements contained within this document are forward-looking and reflect management's expectations regarding the future growth, results of operations, performance and business of the Capstone Infrastructure Corporation (the "Corporation") based on information curren
Slide 3: Formal Proceedings
INFRASTRUCTURE CAPSTONE
Slide 4: Agenda
AGENDA Formal proceedings ► Call to Order ► Notice of Meeting ► Quorum & Voting Procedure ► Minutes of Last Meeting ► Financial Statements & Auditor’s Report ► Nomination & Election of Directors ► Advance Notice Policy ► Re-appointment of Auditors ► Other Business ► Termination of Formal Meeting
Slide 5: Management's Presentation – Michael Bernstein
MANAGEMENT’S PRESENTATION Michael Bernstein President and Chief Executive Officer
Slide 6: Fiscal 2013
FISCAL 2013 Building Capstone’s fundamental value Performance highlights Opportunities Creating value for shareholders
Slide 7: Growing: Strengthening, diversifying, transforming
GROWING Strengthening, diversifying, transforming Acquired Bristol Water & Värmevärden Built a growing power development business Secured new long-term contract for Cardinal
Slide 8: Our Platforms
CANADA SWEDEN UNITED KINGDOM OUR PLATFORMS Diverse, low risk portfolio with investments in high quality utilities & power businesses …and poised for growth.
Slide 9: Growing
GROWING 10 years as a public company Growth in assets Growth in Adjusted EBITDA Solid financial performance in 2013 & 2014 to date Advancing strategy to create value for shareholders
Slide 10: Highlights: Acquisition of Renewable Energy Developers
HIGHLIGHTS Acquisition of Renewable Energy Developers ► Expanded portfolio of operating wind power facilities to 194 MW ► Gained new development projects & capabilities ► Three near-term projects under construction now ￚ 10 MW Skyway 8 (ON) ￚ 24 MW Saint-Philémon (PQ) ￚ 25 MW Goulais (ON) 79 MW Net
Slide 11: Highlights: New contract for Cardinal
HIGHLIGHTS New contract for Cardinal ► New contract with Ontario Power Authority starting January 1, 2015 ► Dispatchable operations rather than 24/7 ► Agreement with Ingredion secures land for Cardinal facility ► Gained certainty on Cardinal’s future 20 YEARS Duration of new contract
Slide 12: Highlights: Advancing Bristol Water's capex program
HIGHLIGHTS Advancing Bristol Water’s capex program ► Cumulative capex of C$444M at March 31, 2014 ► Expect to complete full C$540M program by March 2015 Growth in Regulated Capital Value 26% Real RCV growth in current regulatory period
Slide 13: Highlights: Steady growth from Bristol Water
HIGHLIGHTS Steady growth from Bristol Water Capex Drives Growth in Equity Value $1.20 Increase in equity $1.00 value Key contributor to Capstone’s long-term cash flow & overall value of company
Slide 14: Building Value
BUILDING VALUE Investment quality is growing Maximizing performance of portfolio Developing new capabilities Making smart acquisitions Increasing our capacity for growth Stable long-term dividend
Slide 15: Management's Presentation – Michael Smerdon
MANAGEMENT’S PRESENTATION Michael Smerdon Executive Vice President and Chief Financial Officer
Slide 16: Delivering: Solid financial performance
DELIVERING Solid financial performance Achieved 2013 Adjusted EBITDA of $128.4M, at high end of forecasted range Better than expected results in 2014 to date Expect Adjusted EBITDA in 2014 between $150M - $160M
Slide 17: Financial Position
FINANCIAL POSITION Capital structure aligned to cash flow profile 63.6% $34M $90M Debt to capitalization ratio1 In cash resources1 Corporate credit facility 1As at March 31, 2014
Slide 18: Cash Flow Profile
CASH FLOW PROFILE 2017 is Capstone’s run-rate year Adjusted EBITDA1 Profile ($000s) In $000s 70 - 80% Long-term AFFO payout ratio target 1 Graph illustrates contribution for the businesses and excludes the corporate component.
Slide 19: Wind Projects: Achieving all milestones
WIND PROJECTS Achieving all milestones Skyway 8 & Saint-Philémon to be commissioned in 2014 & early 2015, respectively ~$80M in project-level financing established to date Goulais construction started in June with additional $65M - $75M in project financing planned Balance of pipeline expected to be
Slide 20: Building Value: Well positioned for the future
BUILDING VALUE Strong fundamentals ► Investments delivering on metrics ► Diversified portfolio of high quality, long life businesses ► Disciplined approach to financial management ► Value of company is growing ￚ Bristol Water’s organic growth profile ￚ Low-risk contracted power projects Well positio
Slide 21: Management's Presentation – Michael Bernstein
MANAGEMENT’S PRESENTATION Michael Bernstein President and Chief Executive Officer
Slide 22: 2014 Priorities: Maximize performance
2014 PRIORITIES Maximize performance ► Preventative & predictive maintenance ► Planning for capital expenditures ► Finding new ways to increase cash flow ► Focused on Cardinal’s transition to dispatchable operations $30M Expected capital investment in Cardinal to upgrade & convert facility
Slide 23: 2014 Priorities: Maximize performance – availability
2014 PRIORITIES Maximize performance Availability Five-Year Facility 2013 Average Cardinal 98.2% 96.9% Wind1 97.2% 97.2% Hydro 99.1% 98.5% Whitecourt 96.1% 92.9% Amherstburg2 99.6% n/a 1 Includes Erie Shores & operating wind power facilities acquired from ReD on October 1, 2013 2 Amherstburg commenc
Slide 24: 2014 Priorities: Advance organic growth – Bristol Water
2014 PRIORITIES Advance organic growth initiatives ► Complete Bristol Water’s capital program for AMP5 (2010 – 2015) ► Navigate process for next regulatory period ► Expect rate base to continue to grow for years to come AMP6 Regulatory period from 2015 - 2010
Slide 25: 2014 Priorities: Advance organic growth – Värmevärden
2014 PRIORITIES Advance organic growth initiatives ► Explore tack-on opportunities at Värmevärden 3% Värmevärden’s market share, making it the 7th largest provider
Slide 26: 2014 Priorities: Complete near-term wind projects
2014 PRIORITIES Advance organic growth initiatives ► Complete near-term wind power projects NET 34 MW Amount of new wind power coming online for Capstone in 2014 & 2015
Slide 27: 2014 Priorities: Pursue acquisitions
2014 PRIORITIES Pursue acquisitions Power Utilities P3 Transportation • Traditional • Water • Courts • Roads • Renewable • Gas (transmission & • Hospitals • Rails • District heating & distribution) • Schools • Airports cooling • Electric (transmission • Transportation • Ports • Waste to energy & dis
Slide 28: 2014 Priorities: Pursue acquisitions – risk and return
2014 PRIORITIES Pursue acquisitions Development power projects Return Regulated utilities Operating contracted power Availability-Based P3s Risk 10% Seeking a blend of opportunities Targeted total return on the investments we make
Slide 29: Opportunity: Unique infrastructure company
OPPORTUNITY Unique infrastructure company Shifting portfolio toward long-life, perpetual businesses
Slide 30: Opportunity: Cash flow profile 2010 and now
OPPORTUNITY Unique infrastructure company Our cash flow profile in 2010… and now in 2014 Whitecourt Chapais Cardinal Erie Shores NS&ON Wind Wind Projects Amherstburg Sechelt Dryden Hluey Lakes Wawatay Bristol Water Värmevärden 2010 2017 2022 2027 2032 2037 2042 2047 2052
Slide 31: Opportunity: Amortizing debt profile
OPPORTUNITY Unique infrastructure company Amortizing debt profile builds equity value of power businesses
Slide 32: Opportunity: Unique infrastructure company
OPPORTUNITY Unique infrastructure company ► Poised to deliver three largest wind power projects on time & on budget ► Dividends from Bristol Water expected to increase sharply starting in 2015 ► Actively pursuing growth opportunities
Slide 33: Why Invest?
WHY INVEST? Committed to delivering an attractive total return High quality, low risk businesses delivering everyday essential services
Slide 34: Why Invest? High-growth regulated water utility
WHY INVEST? Committed to delivering an attractive total return High-growth regulated water utility High quality, generating increasing low risk portfolio & perpetual cash flow
Slide 35: Why Invest? Sizable power portfolio
WHY INVEST? Committed to delivering an attractive total return Sizable power portfolio generating clean electricity for 220,000 people
Slide 36: Why Invest? A strong foundation to grow
WHY INVEST? Committed to delivering an attractive total return A strong foundation from which to grow Sizable power portfolio generating clean electricity for 220,000 people
Slide 37: Questions?
QUESTIONS?
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