Genesis Energy Limited · NZX:GNE
Genesis Energy — Non-Deal Roadshow (November 2018)
34 slides from Genesis Energy's roadshow presentation, November 2018
Slide 1: Investor Roadshow November 2018
Investor Roadshow November 2018 Marc England – CHIEF EXECUTIVE Chris Jewell – CHIEF FINANCIAL OFFICER Wendy Jenkins – GROUP MANAGER INVESTOR RELATIONS GENESIS ENERGY LIMITED Tokyo, Hong Kong, Singapore, New York, Boston, Chicago & Los Angeles
Slide 2: 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
Slide 3: Our investment proposition of strong yield is underpinned by growth
Our investment proposition of strong yield is underpinned by growth NZX 50 / ASX 100 YIELD COMPARISON EBITDAF DIVIDEND CENTS PER SHARE & YIELD $ MILLIONS Dividends (CPS) Net Yield % Mean 90th Percentile 75th Percentile 25th Percentile 16.6 16.9 12% 16.0 16.4 GNE 350-370 10% 10% 361 13.0 9% 345 335 3
Slide 4: The New Zealand Market
The New Zealand Market GENESIS ENERGY LIMITED
Slide 5: About New Zealand
About New Zealand — Good growth in a stable political and regulatory environment GDP st billion, Ease of doing 3% growth business st th Investor Providing Protection Sustainable, Secure Energy rd nd Economic Global Prosperity Freedom Index Source: Economy Rankings 2018 (The World Bank), The Heritage
Slide 6: New Zealand’s energy market
New Zealand’s energy market — Deregulated unsubsidised market with an established operating system 2m electricity customers 270,000 gas customers, 220,000 LPG customers 29 electricity lines companies 5 gas distributors 48% residential 4 LPG distributors customers 5 major electricity generators 15 pr
Slide 7: Core markets stable or growing
Core markets stable or growing GRID DEMAND GRID DEMAND FORECASTS (GWH) 65,000 4,000 SHOWING SIGNS OF GROWTH (GWH) 60,000 Growth is 3,800 55,000 3,600 forecast in 3,400 Est. 50,000 NZ energy 3,200 45,000 demand 3,000 40,000 2,800 35,000 2008 2024 2004 2005 2006 2007 2009 2010 2011 2012 2013 2014 2015
Slide 8: …with electricity markets reflecting tighter capacity margins
…with electricity markets reflecting tighter capacity margins Regulatory Energy and Tiwai 4th review of capacity potline electricity shortages adds to prices showing demand underway RESIDENTIAL ELECTRICITY PRICE (C/KWH) 400 WHOLESALE ELECTRICITY PRICE ($/MWH) NEW ZEALAND WINTER ENERGY 32 350 MARGIN
Slide 9: …and fuel markets tightening
…and fuel markets tightening LPG Oil and gas International market exploration to oil prices have moves to be restricted increased net import FORECAST GAS AND LPG PRODUCTION PROFILE NZ LPG IMPORT/EXPORT PARITY PRICING (NZD/T) BRENT CRUDE (USD/BBL) 250 1,800 120 14 1,600 100 200 12 1,400 10 1,200 80 1
Slide 10: Energy transformation is creating opportunities
Energy transformation is creating opportunities ENERGY SEARCH VOLUME TREND NEW ZEALAND CARBON UNITS PRICE 1.4 WIND TURBINE PRICE INDEX 250 $30 $25 200 Desktop search $20 1.2 150 $15 100 $10 1 Mobile search $5 50 $0 0.8 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Dec-15 Dec-20 Dec-14 Dec-
Slide 11: Regulatory environment
Regulatory environment Policy cohesion is key, underpinned by principles of collaboration and customer-centric approach Our focus is on making thoughtful contributions to meaningful solutions KEY OBSERVATIONS / RECOMMENDATIONS Retail market • Competition is working to deliver choice & innovation • S
Slide 12: Genesis Energy Overview
Genesis Energy Overview GENESIS ENERGY LIMITED
Slide 13: About Genesis Energy
About Genesis Energy — Our vision is to be customers’ first choice for energy management KEY INFORMATION Revenue (FY18): NZ$2.3 billion EBITDAF (FY18): NZ$361 million , Dividend Yield (FY18): 6.9% Share Price: NZ$2.50 Market Capitalisation: NZ$2.5 billion Enterprise Value (FY18): NZ$3.7 billion Aver
Slide 14: Why Genesis?
Why Genesis? Genesis Energy Limited Investor Roadshow November 2018 14.
Slide 15: Diversity of earnings across sectors, fuels and markets
Diversity of earnings across sectors, fuels and markets GROSS MARGIN CONTRIBUTION (FY18) KUPE 20% WHOLESALE 43% CUSTOMER 37% Gas 11% Business Renewable generation 30% Residential electricity 20% electricity 6% Oil 6% LPG 3% LPG 1% Thermal generation 12% LPG 7% Gas 4% Electricity Gas LPG Oil Genesis
Slide 16: FY18 Results at a glance
FY18 Results at a glance EBITDAF Total generation Record Up Up Up $ 8% 11% 5% m , GWh supports volatile market PJ Kupe gas production FY17 $333m NPAT FY18 total dividend Brand revitalised Up $ Down 83% 2% “With You, Energy IQ m cps For you” launched with over 100,000 unique users FY17 16.6c due to g
Slide 17: Outlook and guidance
Outlook and guidance — Guidance for FY19 EBITDAF is $350 to $370 million • FY19 EBITDAF guidance range is $350 to $370 million subject to hydrological conditions, any material events, one-off expenses or other unforeseeable circumstances. Key assumptions include: • $10 million negative impact from H
Slide 18: Our Company Strategy
Our Company Strategy GENESIS ENERGY LIMITED
Slide 19: We are performing while transforming
We are performing while transforming Our VISION is to be customers’ first choice for energy management Our PURPOSE is to reimagine energy to put control in our customers’ hands Our STRATEGY is to maximise value through our market position Wholesale & Kupe segment Customer segment • Our integrated fu
Slide 20: Our diversity and culture drive our successful strategy delivery
Our diversity and culture drive our successful strategy delivery Commitment to being an Engagement and confidence in Wellbeing and safety is more inclusive and diverse employer business success on the rise than just a responsibility GENDER MIX 38% of employees have bought nearly Two thirds of $1 mil
Slide 21: Genesis Sustainability Framework launched FY19
Genesis Sustainability Framework launched FY19 Caring for our Building strong Powering environment communities New Zealand Putting control in our Emissions Our Communities customers’ hands Water and Wildlife Our People Delivering New Zealand’s energy future Our ambitions include Our ambitions includ
Slide 22: Our purpose is to reimagine energy to put control in our customers’ hands
Our purpose is to reimagine energy to put control in our customers’ hands Fuels Brands Platform Genesis Energy Limited Investor Roadshow November 2018 22.
Slide 23: Our brand re-launch has helped us regain market leadership
Our brand re-launch has helped us regain market leadership WHEN ASKED, PEOPLE RECOGNISED GENESIS AS: “THE MARKET LEADER” 28 19 17 19 9 +7 PTS +4 PTS +7 PTS NC +1 PT “PUTTING PEOPLE IN CONTROL OF THEIR ENERGY USE” 23 15 11 16 11 +8 PTS +3 PTS +1 PTS +1 PT +1 PT “LEADING THE WAY WITH 28 15 15 13 9 NEW
Slide 24: Focusing on enhancing loyalty
Focusing on enhancing loyalty FY19 will deliver product differentiation at scale GENESIS CUSTOMER CHURN RATE (BY MONTH, ALL FUELS)1 Bottle Gas 30% Monitoring Launch Electricity Monitoring Launch Power Energy IQ Shout I Launch Power 25% Shout III Power Move to the Shout II Move to the Future I Dual F
Slide 25: Focus on growing business volume
BUSINESS SALES TEAM COVERAGE Focus on growing business volume FY17 FY19 Targeted growth in agriculture and hospitality BUSINESS BILLED VOLUME 4,000 35,000 3,500 30,000 3,000 Monitoring 25,000 Electricity & Gas GWh 2,500 LPG tonne 20,000 2,000 Bottled gas Electricity & Gas monitoring 15,000 1,500 Ele
Slide 26: Integrated portfolio provides flexibility
Integrated portfolio provides flexibility Maximising value as NZ transitions to a low carbon future Securing low cost renewable electricity Flexibility from fuels and working towards a transition from coal Creating flexibility from existing assets. Weekly and seasonal flex Genesis Energy Limited Inv
Slide 27: Our emissions are largely hedged through to 2025
Our emissions are largely hedged through to 2025 We are also investigating longer term hedging options CARBON HEDGE POSITION $6 $9-14 $15-20 $17-22 $17-22 $19-24 $20-25 $20-25 NZ Units as % of potential exposure Short-hedging has been successful to date For longer term hedging, we are investigating
Slide 28: The Kupe stake and fuel contract position provide commercial upside
The Kupe stake and fuel contract position provide commercial upside GENESIS ENERGY LIMITED
Slide 29: Kupe Gas Project
Kupe Gas Project Settled joint venture focused on enhancing Kupe’s value Economic interests Improved Phase Two Development aligned Collaboration Two distinct projects Engagement Transparency Inlet compression Development well Discussion Genesis Energy Limited Investor Roadshow November 2018 29.
Slide 30: Long-term Gas Contract Position
Long-term Gas Contract Position TAKE-OR-PAY FORWARD GAS PURCHASES1 BENEFITS AND TIMING OF ALTERNATIVE GAS PURCHASE COST2 $7.50 - $8.00 - 40 $8.50 $9.00 $6/GJ $7/GJ $90 35 $8.00 - $80 $9.00 30 $70 25 $8.00 - $60 $9.00 $8.50 - $9.50 $50 PJ 20 $8.50 - $40 15 $9.50 $30 10 $20 $8.50 - 5 $9.50 $10 0 $- FY
Slide 31: Targeting FY21 EBITDAF of $400-430m & top quartile TSR
Targeting FY21 EBITDAF of $400-430m & top quartile TSR GENESIS ENERGY LIMITED
Slide 32: The plan is in place to FY21 and beyond
The plan is in place to FY21 and beyond Driven by retail growth, optimisation and rolling off of legacy contracts PATHWAY TO FY21 EBITDAF FY21 SENSITIVTIES 430 Extended Dry Sequence 25th P. 10th P. 27 400 Extended Wet Perc. change in 75th P. 90th P. 17 Sequence hydro sequence 15 +/- $2/MWh 30 10 GWA
Slide 33: Sustained earnings and dividend growth
Sustained earnings and dividend growth Underpinned by long dated debt book EBITDAF DIVIDEND CENTS PER SHARE & PAYOUT HISTORY1 $ MILLIONS Dividends (CPS) % of Free Cash Flow 400 350-370 16.4 16.6 16.9 130% 16.0 345 361 87% 92% 300 335 333 13.0 91% 308 74% 80% 200 70% Target Dividend/ Free Cash Flow 3
Slide 34: Slide 34