Agl Energy Limited · ASX:AGL
Agl Energy — Shareholder Meeting (2005)
26 slides from Agl Energy's shareholder meeting presentation, 2005
Slide 1: Annual General Meeting 2005
2005 Annual General Meeting Greg Martin, Managing Director
Slide 2: 2004 - 2005 Priorities
2004 - 2005 Priorities Ø Increasing Shareholder Value w organic growth w greenfield opportunities w optimal capital structure Ø Strengthening the business platform w improve efficiency to compete effectively w acquisition opportunities Ø Building people and organisational capabilities 2
Slide 3: Business Unit Performance
Business Unit Performance % change in Earnings Before Interest & Tax (EBIT) 2005 vs 2004 40 30 20 10 0 % 10 20 30 40 ES&M Gas Electricity Agility Power NZ * Energy Networks Networks Generation Investments $206.2m $163.9m $75.5m $63.4m $31.2m $73.7m $96.0m 3 *NGC divested December 04
Slide 4: Gas Networks
Gas Networks Ø Steady customer connection growth w 951,591 sites +2.9% w network length 23,541km +206km Ø Mild weather impacts load w 95,750 TJ distributed -0.7% w Sydney experienced unseasonably mild temperatures in April & October Ø Network reliability performance solid & within regulatory targets
Slide 5: Electricity Networks
Electricity Networks Ø Steady customer connection and load growth w 285,693 sites +2.4% w 4,174GWh load distributed +1.2% w network length 10,285km +105km Ø Network reliability performance solid & within regulatory targets Ø Electricity Distribution Price Review (EDPR) disappointing w identified err
Slide 6: National Regulation from July 2005
National Regulation from July 2005 Ministerial Council on Energy (MCE) Commonwealth, State & Territory Energy Ministers National policy and governance body Gas and electricity markets ACCC Competition MCE can initiate/direct reviews Regulation of NEM & NE Rules MOU Reports directly to MCE/provides p
Slide 7: Servicing a National Client Base
Servicing a National Client Base Ø One of the few companies with the capabilities to construct, service and manage assets for the gas, electricity and water utility sectors across all states and territories of Australia Power and Water APT Ergon Energy Santos Energex APT Apache Hamersley Iron APC Go
Slide 8: Growing 3rd Party Client Base
Growing 3rd Party Client Base Ø Won in excess of $70m additional third party contracts Ø Ongoing expansion of client and project portfolio w Sydney Water w Powerco w Energex 3rd Party Order Book $m 100 w Aurora 80 w Integral Energy 60 w Ergon 40 w APT/Arrow Energy 20 w Western Power 0 2003-2004 2004
Slide 9: Retail Sales and Marketing
Retail Sales and Marketing Ø Defended and grew retail market share w intensely competitive market with ongoing high churn levels w milder winter and summer than 2004 w increase in energy accounts w increase in accounts under contract w increase in dual-fuel accounts Ø Ongoing development of customer
Slide 10: Retail Sales & Marketing
Retail Sales & Marketing Ø Commenced 2005 financial year as Australia’s largest energy retailer Gas Accounts 1.29 million Electricity Accounts 1.52 million Total Accounts 2.81 million 10
Slide 11: Retail Sales & Marketing
Retail Sales & Marketing Ø Market characterised by intense competition Churn Churn Gas +40,600 27% Gas -18,900 5% Electricity -80,000 11% Electricity +74,500 6% Churn Gas +19,200 20% Electricity -19,500 22% 11
Slide 12: Retail Sales & Marketing
Retail Sales & Marketing Ø Maintained position as Australia’s largest energy retailer at year’s end Gas Accounts 1.33 million Electricity Accounts 1.49 million Total Accounts 2.82 million 12
Slide 13: Retail Sales & Marketing
Retail Sales & Marketing Ø Improved the quality and value of the customer franchise Dual-Fuel Accounts +276,102 1,036,680 in total Contract Customer +462,095 Accounts 777,936 in total 13
Slide 14: Retail Sales & Marketing
Retail Sales & Marketing Ø Improving the quality and value of the customer franchise Ø Attracting new customers, maintaining existing customers 14
Slide 15: Integrating Across the Value Chain
Integrating Across the Value Chain Generation/ Transmission Distribution Retail Production NSW, Vic, SA NSW, Vic, SA Vic Electricity QLD QLD NSW, Vic, SA Natural Gas QLD, NSW, SA, VIC NSW and LPG QLD Operations Agility Renewable Energy APT Energy Investments Loy Yang ActewAGL GasValpo Existing footp
Slide 16: Upstream Gas
Upstream Gas Ø Sydney Gas JV w $42.25m, 50% interest in coal seam production leases and exploration licences w 10 year 14.5PJ gas sale agreement w competitively priced gas into NSW w further supports gas-fired power generation opportunities Ø PNG gas agreements w $400m, 10% equity interest in PNG ga
Slide 17: Wholesale Electricity
Wholesale Electricity Considering Greenfield / build opportunities Considering Greenfield / build / acquisition opportunities Considering Existing Greenfield / 180MW Hallett build / acquisition Power opportunities Extension Existing Approved 150MW Somerton Power expansion Progressing Station 250-260
Slide 18: Managing Wholesale Electricity Cost
Managing Wholesale Electricity Cost Ø Reducing exposure to high demand electricity pricing periods lowers AGL’s cost of energy and increases margins Indicative 24hr electricity pool price Potential cost savings from running own plant MWh/cost 0:00 3:00 6:00 9:00 12:00 15:00 18:00 21:00 0:00 Time of
Slide 19: Improved cost efficiency drives EBIT
Improved cost efficiency drives EBIT Gas & Electricity Sales Indicative Costs & EBIT EBIT Cost to serve Cost to compete Wholesale Opex Other costs Energy COGS Transmission & distribution costs 19
Slide 20: Improved cost efficiency drives EBIT
Improved cost efficiency drives EBIT Gas & Electricity Sales Indicative Costs & EBIT EBIT Cost to compete Cost to serve Wholesale Other costs Opex Energy COGS Transmission & distribution costs 20
Slide 21: PNG Pipeline
PNG Pipeline Ø 50:50 JV between AGL & Petronas Kutubu Gobe PAPUA - Kopi NEW GUINEA Ø Estimated development cost of $2.5-3.0bn Torres Strait Port Moresby Ø FEED underway Bamaga Cape York Gove AGL/Petronas PNG - Qld Gas Pipeline w Gove extension will bring AGL share Weipa Potential Lateral Pipelines U
Slide 22: Queensland Gas Demand Forecast
Queensland Gas Demand Forecast Ø Queensland a key market for PNG Gas / AGL Ø ACIL Tasman forecast Queensland demand will continue climbing on the back of existing rapid growth Ø Estimated growth of approximately 5% p.a. over next 20 years Existing Contracts Potential Demand Source: ACIL Tasman 2004
Slide 23: Outlook - Business Units
Outlook - Business Units Ø Retail Energy focus: w continue to maintain market leadership w ongoing improvement of internal systems, processes and capabilities w positioning for future growth opportunities as they arise Ø Wholesale Energy focus: w execute PNG upstream Gas Supply Agreement & Upstream
Slide 24: Outlook - Business Units
Outlook - Business Units Ø Networks focus: w effectively manage networks to meet customer growth/connections, load demand and supply reliability w pro actively manage VIC electricity price determination - seek a more reasonable outcome (final decision due tomorrow) - appeal decision if necessary Ø A
Slide 25: Integrating Across the Energy Value Chain
Integrating Across the Energy Value Chain Generation/ Transmission Distribution Retail Production NSW, Vic, SA NSW, Vic, SA Vic Electricity QLD QLD PNG Sydney PNG Pipeline NSW, Vic, SA Natural Gas Gas NSW and LPG QLD, NSW, SA, VIC QLD Operations Agility Renewable Energy APT Energy Investments Loy Ya
Slide 26: Annual General Meeting 2005
2005 Annual General Meeting Greg Martin, Managing Director 26