Slide 1: Financial and Operational Results FY ended 30 June 2022
inancial and Operational Results FULL YEAR ENDED 30 JUNE 2022 26 AUGUST 2022
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements. Forward-looking statements often include words such as “anticipates”, “estimates”, “expects”, “intends”, “plans”, “believes” and similar words in connection with discussions of future operating or financial performance. The forward-lo
Slide 3: Agenda
Agenda • Overview of Performance • FY2022 Business Overview and Highlights • Financial Performance • Segment Performance • Outlook • Q&A 3
Slide 4: Overview of Performance
OVERVIEW OF PERFORMANCE 4
Slide 5: Overview of financial performance
Overview of financial performance FY22 FINANCIAL PERFORMANCE ($M) 1,339.0 1,279.3 FY21 FY22 541.5 545.9 518.8 513.5 510.0 499.1 194.6 167.5 167.5 160.9 Revenue Adjusted EBITDA Capital Expenditure Net Profit Operating Cash Flow Full Year Dividend +4.7% -0.7% +0.8% -17.3% +3.9% +0.0% Adjusted EBITDA i
Slide 6: Dividend
Dividend • Final dividend of 8.50 cents per share Dividend (cents per share) • Taking the full year dividend to 16.75 cents per share − Flat on the prior year 8.00 8.25 8.25 8.50 8.50 8.00 8.00 − Imputation at rate of 10.5% 7.50 7.75 7.75 8.00 7.50 7.50 6.75 7.25 6.50 • Dividend record date of 12 Se
Slide 7: FY2022 Business Overview
FY2022 BUSINESS OVERVIEW 7
Slide 8: FY2022 Business Overview
FY2022 Business Overview Electricity and Gas Distribution Metering Gas Trading Symphony Highlights • Total net connections continue to grow • Undertaking strategic review of the • Earnings impacted by higher cost of LPG input prices including higher CP (Saudi • VTS continues to explore opportunities
Slide 9: FY22 Highlights: Environment, Social and Governance
FY22 Highlights: Environment, Social and Governance TCFD REPORT 1.3GW PUBLISHED Potential avoided peak demand in 2050 through Symphony solutions https://www.vector.co.nz/investors/reports resulting in more efficient network growth investment 16.5% $8,000+ Reduction in our carbon Conservative estimat
Slide 10: Financial Performance
FINANCIAL PERFORMANCE 10
Slide 11: Segment earnings down $3.5m or 0.7%
Segment earnings down $3.5m or 0.7% FY22 ADJUSTED EBITDA MOVEMENT ($M) +5.1 +2.1 -5.5 -5.2 513.5 510.0 Lower earnings as a result of higher cost of LPG input Largely due to the prices including higher Saudi impact of Covid-19 Aramco Contract Price (CP), on HRV and higher ETS and a weaker NZ PowerSma
Slide 12: NPAT is $160.9m, down $33.7m on the prior year
NPAT is $160.9m, down $33.7m on the prior year MOVEMENT IN NET PROFIT AFTER TAX ($M) +21.1 +2.8 -14.2 -0.7 201.1 194.6 -2.5 -40.2 160.9 Change in policy requiring 100% customer funding for electricity and Includes gain on sale of gas connections and introduction 50% share of Treescape, of a developm
Slide 13: Capex driven by Auckland growth & meter deployment in Australia
Capex driven by Auckland growth & meter deployment in Australia GROSS CAPITAL EXPENDITURE ($m) GROSS CAPEX BY SEGMENT FY22 545.9 $49.4m 541.5 9% 488.7 $49.5m 425.1 122.5 151.8 9% 86.4 Regulated Networks 381.2 FY21 367.4 79.3 62.3 71.5 Gas Trading $156.7m 29% $163.1m 419.0 Metering $316.9m 402.3 394.
Slide 14: Group debt
Group debt Vector holds a BBB credit rating by Standard and Poor’s and a Baa1 rating by Moody’s NET ECONOMIC DEBT & GEARING ($M) 58.2% Debt Maturity Profile $m 3,500 56.8% 60.0% 53.6% 55.5% 52.5% 3,000 47.1% 49.2% 50.0% 43.7% 2,500 40.0% 251 250 240 2,000 30.0% 307 1,500 225 20.0% 1,000 574 500 10.0
Slide 15: Segment Performance
SEGMENT PERFORMANCE 15
Slide 16: Network earnings higher
Network earnings higher ADJUSTED EBITDA MOVEMENT ($M) • Electricity revenue is slightly higher due to: 0.9 2.3 2.7 355.8 350.7 − An increase in net connections and an increase in recovery of pass- through costs; partially offset by: -0.8 − Prior period adjustments including release of loss rental re
Slide 17: Continued high level of regulated capex
Continued high level of regulated capex • Regulated capex up 4.7% to $331.9 million GROSS REGULATED NETWORK CAPEX $M − Continued high level of capex expenditure is driven by investment to improve safety, reliability and resilience of our network and to support Auckland growth 331.9 317.1 316.9 • Cap
Slide 18: Gas Trading earnings impacted by higher cost of LPG
Gas Trading earnings impacted by higher cost of LPG ADJUSTED EBITDA MOVEMENT ($M) • Lower Ongas LPG earnings as a result of higher cost of LPG input 27.4 prices including higher CP (Saudi Aramco Contract Price), higher ETS 1.0 21.9 and weaker NZ dollar 6.7 − This has been partially offset by price i
Slide 19: Metering result driven by advanced meter rollout in Australia
Metering result driven by advanced meter rollout in Australia ADJUSTED EBITDA MOVEMENT ($M) 10.2 1.7 171.6 173.7 • FY22 earnings up 1.2% to $173.7 million -4.7 -3.5 -1.6 ‾ Revenue (excluding prior year one off receivable) is up 5% driven by advanced meter rollout in Australia ‾ Covid-19 restrictions
Slide 20: Outlook
OUTLOOK 20
Slide 21: Outlook
Outlook • Growth in electricity and gas connections expected to continue • High level of capex to continue driven by high connection growth in Auckland, advanced meter deployments in Australia and New Zealand, rollout of 4G modems and advanced gas meters in New Zealand • Impact of higher inflation o
Slide 22: Q&A Any Questions?
Q&A ANY QUESTIONS? 22
Slide 23: Appendices
APPENDICES 23
Slide 24: 5 Year Adjusted EBITDA Performance by Segment
5 Year Adjusted EBITDA Performance by Segment Adjusted EBITDA (Continuing Operations Only) $million For the year ended 30 June 513.5 510.0 485.8 490.0 470.1 FY2018 FY2019 FY2020 FY2021 FY2022 Regulated Networks 358.6 367.0 337.6 350.7 355.8 Gas Trading 34.4 31.3 33.9 27.4 21.9 Metering 124.7 138.7 1
Slide 25: Segment Results
Segment Results Year ended 30 June ($m) REGULATED NETWORKS METERING GAS TRADING CORPORATE AND OTHER1 2022 2021 Change % 2022 2021 Change % 2022 2021 Change % 2022 2021 Change % Revenue excluding 681.2 646.4 +5.4 235.6 227.0 +3.8 201.9 209.0 -3.4 85.2* 91.1* -6.5 Third-party Contributions Operating e
Slide 26: Group Profit Statement
Group Profit Statement Year ended 30 June ($m) 2022 2021 Change INCOME STATEMENT $m $m % Revenue (excluding third-party contributions) 1,187.2 1,156.8 +2.6 Operating expenditure (677.2) (643.3) -5.3 Adjusted EBITDA 510.0 513.5 -0.7 Third-party Contributions 151.8 122.5 +23.9 Depreciation and amortis
Slide 27: Group Cash Flow
Group Cash Flow Year ended 30 June ($m) 2022 2021 CASH FLOW $m $m Operating cash flow 518.8 499.1 Replacement capex (230.0) (198.6) Dividends paid (169.1) (165.8) Cash available for growth and debt repayment 119.7 134.7 Growth capex (328.8) (317.6) Proceeds from contingent consideration 6.1 4.4 Othe
Slide 28: Segment Adjusted EBITDA
Segment Adjusted EBITDA N SEGMENT ADJUSTED EBITDA ($m) 2022 2021 n n Year ended 30 June less third-party less third-party n Reported segment contributions and Segment adjusted Reported segment contributions and Segment adjusted EBITDA other movements EBITDA EBITDA other movements EBITDA n Metering 1
Slide 29: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Vector’s standard profit measure prepared under New Zealand GAAP is net profit. Vector GAAP to Non-GAAP reconciliation has used non-GAAP profit measures when discussing financial performance in this EBITDA and Adjusted EBITDA document. The directors and management bel
Slide 30: End
END 30
Slide 31: Supplementary Annual Information: Regulated Networks Adjusted EBITDA
Supplementary Annual Information Regulated Networks Adjusted EBITDA $m FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 Electricity 347.1 312.8 309.9 325.2 317.7 318.7 329.9 299.9 312.2 319.5 Gas Distribution Auckland 44.8 38.3 39.9 43.4 43.5 40.0 37.0 37.7 38.4 36.3 Total 391.9
Slide 32: Net Gas ICPs and Total Gas ICPs
Net New ICPs # of ICPs (net) FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 Q1 620 524 839 616 878 872 560 674 624 368 Q2 415 566 713 727 718 728 700 778 848 788 Q3 508 558 584 809 626 468 378 484 582 30 Q4 377 892 645 605 126 491 775 382 458 337 Total 1,920 2,540 2,781 2,757
Slide 33: Gas Distribution Adjusted EBITDA, Capital Contributions, Regulated Capex
Gas Distribution Adjusted EBITDA $m FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 H1 24.5 23.1 21.4 23.8 23.5 22.6 20.8 20.9 21.0 19.2 H2 20.2 15.2 18.5 19.5 20.0 17.4 16.3 16.9 17.4 17.1 Total 44.8 38.3 39.9 43.4 43.5 40.0 37.0 37.8 38.4 36.3 Gas Distribution Adjusted EBITDA