Infratil Limited · NZX:IFT
Infratil — H1 FY2017 Earnings Presentation
28 slides from Infratil's earnings presentation, Nov 11, 2016
Slide 1: Infratil Interim Results Announcement
Infratil Interim Results Announcement 11 November 2016
Slide 2: Half Year Overview
Half Year Overview Targeted deployment of capital the highlight of the first half of FY17 • Underlying EBITDAF of $246.0 million slightly down on the comparative half year of $253.1 million (-2.8%) • Operating cash flow of $129.2 million remains strong, up $7.6 million on the prior year • 6 months d
Slide 3: Financial Highlights
Financial Highlights Earnings from core businesses maintained while capital successfully deployed Half Year ended 30 September ($millions) 2016 2015 Variance % Change Underlying EBITDAF (continuing activities)1 246.0 253.1 (7.1) (2.8%) Net Parent Surplus (continuing activities) 28.9 28.3 0.6 2.2% Ne
Slide 4: Results Summary
Results Summary Operating performance impacted by one-off items & challenging market conditions 30 September ($Millions) 2016 2015 • Operating revenue increased 8.8%, offset by increased Operating revenue 971.2 892.5 operating expenses largely relating to the trading difficulties experienced by Pert
Slide 5: Underlying EBITDAF
Underlying EBITDAF Core assets provide stable earnings during the period Underlying EBITDAF ($Millions) 2016 2015 • Trustpower – Weak New Zealand generation performance and increased marketing and customer acquisition costs delivered a Trustpower1 118.7 119.2 flat result. The HY17 number excludes de
Slide 6: Group Capital Expenditure and Investment
Group Capital Expenditure and Investment Continuing to optimise value in existing assets while repositioning the portfolio 30 September ($Millions) 2016 2015 • Trustpower and Tilt capex represents its operational and maintenance capex programme Trustpower 20.2 15.0 • Wellington Airport has several m
Slide 7: Asset Values
Asset Values Strong demand for Infrastructure assets underpins the value of the portfolio Investment ($Millions) September 2016 March 2016 “Lower for longer” expectations continue to drive up valuations in the infrastructure sector Trustpower1 1,230.0 1,223.6 highlighting potentially significant gap
Slide 8: Debt Position
Debt Position Strong capital base remains with cash position, facility head room and duration • Cash position of $255 million and wholly owned subsidiaries bank facilities drawn of $61 million • Senior debt facilities have maturities up to 3.5 years and 5 years (for bus finance export credit facilit
Slide 9: Funds Available for Investment
Funds Available for Investment Significant capacity remains to support further investment • Over $500 million of cash and undrawn bank facilities remain on hand 30 September ($Millions) 2011 2012 2013 2014 2015 2016 Net bank debt (cash on hand) 352 397 42 (640) (682) (194) Infratil bonds (incl. PiiB
Slide 10: Portfolio Composition
Portfolio Composition Higher return development ideas supported by core assets generating cash flows Core assets generating free cash • Total returns to shareholders are enhanced by building and maintaining a well balanced portfolio • Portfolio composition needs to also take account of credit metric
Slide 11: Trustpower
Trustpower Demerger results in two new entities positioned for success Trustpower has demerged into Tilt Renewables and Trustpower (new). Shareholders have received 1 share in each company for each share they owned in Trustpower (old) • Trustpower (new) holds Trustpower’s New Zealand • Tilt Renewabl
Slide 12: Trustpower
Trustpower Multi-product customer growth during demerger and a flat market EBITDAF for 1H17 was $118.7 million, $0.5 million below 1H16 before demerger costs • Customer acquisition costs drove the expected level of customer growth, but strong competition resulted in higher than expected losses leavi
Slide 13: Tilt Renewables
Tilt Renewables Bringing a fresh perspective to the Australasian renewable energy market EBITDAF for 1H17 was $66.1 million, $1.1 million above 1H16 Generation • Strong wind generation conditions in South Australia have resulted in Australian wind approximately 13% above prior period and 7% above lo
Slide 14: Perth Energy
Perth Energy Challenging retail environment with significant uncertainty EBITDAF loss for the period of A$9.1 million driven by a poor performance in the retail business Retail • Perth Energy’s retail business has experienced significant deterioration in trading conditions: • High fixed price produc
Slide 15: Canberra Data Centres
Canberra Data Centres Strong platform in an emerging growth sector • IFT completed its acquisition of 48% of Canberra Data Centres (CDC) on 14 September 2016, for a total cash equity cost of A$385.7 million • Construction of the first stage of the Hume 3 data centre was completed within budget in Oc
Slide 16: Australia National University student accommodation
Australia National University student accommodation Evolving standalone sector with attractive yield and development profile • Student Accommodation is an emerging On a standalone basis, asset class in Australia, supported by ANU provides: strong domestic and international • High single digit cash d
Slide 17: Summary of Longroad investment
Summary of Longroad investment Commitment to the development of renewables in the U.S. • Attractive access point into the U.S. renewable energy market - Experienced team with a demonstrable track record of developing and operating utility scale renewable generating facilities - Infratil’s partnershi
Slide 18: Wellington International Airport
Wellington International Airport Passenger growth responding well to capital expenditure and new routes EBITDAF of $43.7 million +4.5% • Total passengers over 2.9 million, +4.5% or 125,000 increase on prior period (long run average growth 82,000 p.a.) • Domestic passenger growth +5.6% following up-g
Slide 19: NZ Bus
NZ Bus Strong first half year operational performance EBITDAF of $25.0 million, +10% • Revenue growth (+1%) driven by additional services in Auckland and patronage growth in Wellington • Expenses lower than the prior year (1.1%) despite increase to service levels, reflecting a continued focus on pro
Slide 20: NZ Bus
NZ Bus Focus on electric, connected and autonomous transit Fleet Investment • 23 double decker buses purchased for use on key Auckland corridors to reduce congestion are now in service • Development of the prototype combining an existing trolley bus with a Wrightspeed Inc. electric powertrain is pro
Slide 21: Metlifecare
Metlifecare Strong development activity across high-performing portfolio of villages • $8 million Underlying EBITDAF contribution to Infratil, up from $6 million in the prior period: • Underlying Profit of $66.1 million in FY16 up 26% • Revaluation gains $237.2 million and realised resale gains of $
Slide 22: RetireAustralia
RetireAustralia Strong first half year result; care and development strategies on track Operating Performance • Net profit after tax (IFRS) A$30 million • Underlying profit A$13 million. On track to deliver 150+ new villas in FY17 with development weighted to second half. 37 delivered in first half
Slide 23: Distributions
Distributions Growth in dividend per share maintained Dividend Per Share Profile FY 2012-2017(1) INTERIM ORDINARY DIVIDEND 35 30 Interim ordinary dividend of 5.75 cps, fully imputed, payable on 25 15 December 2016 to shareholders 20 recorded as owners by the registry as at 15 28 November 2016 (last
Slide 24: Capital Options
Capital Options Approval to utilise up to $50 million of Infratil’s buyback programme through July 2017 Infratil Share Price and Buybacks • At recent share price of ~$3.00, Infratil is $4.00 5.0 trading approximately 13% off its historical Millions 4.5 highs and at an approximate discount range of $
Slide 25: 2016/17 Outlook
2016/17 Outlook Underlying EBITDAF tracking at the bottom end of $485-$525 million guidance range • Underlying FY17 EBITDAF is tracking at the Investment ($Millions) 2016 2017 bottom end of our previously announced Actual Outlook guidance range of $485-$525 million Underlying EBITDAF 462.1 ~485 • Tr
Slide 26: Summary
Summary Getting set for above average returns for the next 10 years Recent development activity has established several proprietary platforms with significant future optionality: • Tilt Renewables – Australian wind and solar • Longroad – North American wind and solar • Metlifecare/RetireAustralia –
Slide 27: www.infratil.com
For more information: www.infratil.com INFRATIL INTERIM RESULTS PRESENTATION – SEPTEMBER 2016 27
Slide 28: Appendix I – Reconciliation of NPAT to Underlying EBITDAF
Results Summary Appendix I – Reconciliation of NPAT to Underlying EBITDAF 30 September ($Millions) 2016 2015 • Underlying EBITDAF is a non-GAAP measure of Net profit after tax 62.9 470.8 financial performance, presented to show management’s view of the underlying business less: share of MET & RA inv