Slide 1: APA FY24 Results Presentation
APA Group Limited ACN 091 344 704 | APA Infrastructure Trust ARSN 091 678 778 | APA Investment Trust ARSN 115 585 441 Level 25, 580 George Street Sydney NSW 2000 | PO Box R41 Royal Exchange NSW 1225 Phone +61 2 9693 0000 | Fax +61 2 9693 0093 APA Group | apa.com.au 28 August 2024 ASX ANNOUNCEMENT AP
Slide 2: FY24 Full Year Results
FY24 Full Year Results Securing Australia’s energy future 28 August 2024
Slide 3: Disclaimer
Disclaimer Disclaimer This presentation has been prepared by APA Group Limited (ACN 091 344 704) as responsible entity of the APA Estimates. A number of important factors could cause actual results or performance to differ materially from Infrastructure Trust (ARSN 091 678 778) and APA Investment Tr
Slide 4: Acknowledgement of Country
Acknowledgement of Country At APA, we acknowledge the Traditional Owners and Custodians of the lands on which we live and work throughout Australia. We acknowledge their connections to land, sea and community. We pay our respects to their Elders past and present, and commit to ensuring APA operates
Slide 5: Safety share: Basslink Cable Load Prediction System
Safety share: Image: Basslink Interconnector, Victoria Basslink Cable Load Prediction System APA continues to invest in Basslink Cable Load Prediction System (CLPS) – In June 2024 APA successfully commissioned the CLPS its assets to support the – This investment in asset integrity was a key priority
Slide 6: Agenda
01 FY24 highlights and FY25 outlook Agenda 02 FY24 financial performance 03 Market dynamics and strategy 04 Closing remarks FY24 Full Year Results 5 5
Slide 7: FY24 highlights and FY25 outlook
Image: Basslink Interconnector, Victoria 01 FY24 highlights and FY25 outlook FY24 Full Year Results
Slide 8: APA delivered solid growth in FY24 earnings, moderated corporate cost growth
APA delivered solid growth in FY24 earnings, moderated corporate cost growth and continued the strong momentum in growth strategy FY24 results in line Strong contribution Progressed organic with guidance from new assets growth opportunities (1) – Underlying EBITDA of $1,893m, – 8 months contribution
Slide 9: FY24 performance achieved through three delivery pillars
FY24 performance achieved through continued focus on APA’s three delivery pillars Delivery pillars FY24 performance (6) – Safety: TRIFR is 2.2, down 35% from 3.4 in FY23 – Diversity performance: OUR PEOPLE • Total employee representation of women is 32.4%, up from 31.8% in FY23 (7) Ensuring our peop
Slide 10: FY25 Underlying EBITDA guidance
Contribution from Pilbara Energy, inflation-linked revenues and disciplined approach to costs underpins FY25 Underlying EBITDA guidance* of $1,960-$2,020m FY25 Underlying EBITDA guidance* Continued EBITDA Disciplined approach Interest and tax $1,960m-$2,020m growth from new to corporate costs normal
Slide 11: FY24 financial performance
Image: Mondarra Gas Storage & Processing Facility, Western Australia 02 FY24 financial performance FY24 Full Year Results
Slide 12: FY24 delivered growth in Underlying EBITDA and stabilised margin
FY24 delivered growth in Underlying EBITDA and stabilised EBITDA margin, supported by moderation in corporate cost growth FY24 Underlying EBITDA in line with guidance: Underlying EBITDA¹⁸ $m FY24 1,893 FY23 1,725 % Change¹⁷ 9.7 % +$90m +$89m Inflation linked tariff Pilbara Energy Underlying EBITDA m
Slide 13: FY24 Underlying EBITDA $1,893m, up 9.7%
FY24 Underlying EBITDA $1,893m, up 9.7%, driven by inflation-linked tariff escalation, recontracting and contribution from new assets Energy Infrastructure +$166m Higher third party works and lower operational Corporate cost growth of 6.3% costs after excluding non-cash mark- Strong contribution fro
Slide 14: Free Cash Flow reflects increased debt, higher tax and working capital
Free Cash Flow (FCF) reflects increased debt to partly fund Pilbara acquisition, higher tax payments and changes in working capital FY24 FY23 % Change²⁹ Change in working capital Impacted by timing of customer related liabilities and Underlying EBITDA³⁰ $m 1,893 1,725 9.7% increases in debtors and i
Slide 15: Capital allocation framework
Capital allocation framework designed to ensure FCF is deployed to generate the greatest return for securityholders Productivity improvements Investment Organic growth Strategic acquisitions Free Cash Flow (FCF) Distribution target 60%-70% of FCF Return to securityholders Other returns to securityho
Slide 16: Capex reflective of disciplined investment in long-term growth
Capex reflective of disciplined investment in long-term growth, strengthening foundations and maintaining the reliable operation of assets (34) Capex FY24 ($m) Key FY24 Projects FY25-FY27 considerations* Driving future earnings: – Kurri Kurri lateral pipeline • Healthy development pipeline with FY25
Slide 17: Organic growth pipeline FY25-FY27 ~$1.8 billion
Creating securityholder value through the deployment of capital in markets where we can generate attractive financial returns Organic growth pipeline FY25-FY27 ~$1.8billion* Indicative returns above our post tax WACC (37) Indicative FY25-FY27 growth capex FY25 FY26 FY27 Contracted Power Generation 5
Slide 18: Balance sheet positioned to support investment in growth
Balance sheet positioned to support investment in growth FY24 Capital management initiatives Key metrics – $875m equity raise; $675m institutional placement and $200m Security FY24 FY23 Purchase Plan – Issued €500m ($828m) in hybrid subordinated capital securities Net debt $12.2bn $10.7bn – Raised $
Slide 19: Market dynamics and strategy
Image: Badgingarra Wind Farm, Western Australia 03 Market dynamics and strategy FY24 Full Year Results
Slide 20: Strategy to be partner of choice for energy transition
Our strategy to be the partner of choice in delivering infrastructure solutions for the energy transition remains unchanged APA’s strategy is focused on four asset classes Addressable market* $27bn* $57bn* $8bn* $21bn* *Estimated addressable market sizes in Australia. Estimates are based on a number
Slide 21: Strategy positions APA to capitalise on energy market dynamics
Strategy positions APA to capitalise on energy market dynamics Market dynamics Examples APA strategic growth opportunity Pilbara electricity demand expected to grow ~40x • Remote grid renewables and firming in Pilbara Customer from 2024 to 2050 (39) (Western Australia) Goldfields (Western Australia)
Slide 22: Gas supply source shifting from southern to northern markets
Gas supply source shifting from southern to northern markets: Ongoing investment by APA in gas infrastructure required to enhance system capacity, reliability and security New gas supply required to support demand and Australia’s renewables ambition (43) AEMO forecast supply vs forecast demand, step
Slide 23: APA has invested in capacity ahead of demand
APA has invested in capacity ahead of demand to ensure reliability of gas supply for customers and the community 01 Winter 2022 02 Winter 2023 03 Winter 2024 APA constructs the East Coast Grid APA delivers Stage 1 of the ECG expansion ECG Stage 2 delivered. Longford production (ECG) Stage 1 expansio
Slide 24: Regulatory and policy certainty is critical for gas supply
Regulatory and policy certainty is critical for APA to ensure ongoing low cost, low emissions and reliable domestic gas supply for the East Coast, and to avoid gas shortages Winter 2027 • GSOO 2024 predicts SWQP is running at capacity for most of winter 2027 • Further expansion of the ECG is require
Slide 25: LNG import terminals likely to result in higher energy costs
Alternative to more domestic gas supply is LNG import terminals which are likely to result in higher energy costs and higher emissions If LNG imports set the price of gas all year, industrial customers (45) 01 along the East Coast could see prices double Import terminals expose southern markets to i
Slide 26: Closing remarks
Image: Basslink Interconnector, Victoria 04 Closing remarks FY24 Full Year Results
Slide 27: Today's key messages
Today’s key messages Solid FY24 result Executing our Outlook remains positive – FY24 Underlying EBITDA up (46) growth strategy – Attractive market dynamics for 9.7%, driven by inflation-linked – Remote grid renewables and the role of gas in securing tariff escalation, recontracting firming in the Pi
Slide 28: Supplementary Financials
Image: Darling Downs Solar Farm, Queensland 05 Supplementary Financials FY24 Full Year Results
Slide 29: FY24 Financial results summary
FY24 Financial results summary FY24 FY23 % Change⁵⁰ Revenue (excluding pass-through)⁵¹ $m 2,591 2,401 7.9 % Segment revenue (excluding pass-through)⁵² $m 2,582 2,353 9.7 % Underlying EBITDA⁵³ $m 1,893 1,725 9.7 % Non-operating items⁵⁴ $m (157) (39) n.m Reported EBITDA⁵⁵ $m 1,736 1,686 3.0 % Deprecia
Slide 30: Non-operating items
Non-operating items includes ongoing non-cash items and foundational investment FY24 FY23 % Change⁶⁰ Key drivers Underlying EBITDA⁶¹ $m 1,893 1,725 9.7% • Technology transformation costs increased with the Technology transformation projects⁶² $m (84) (67) (25.4)% investment in key foundational proje
Slide 31: Historical Underlying EBITDA by asset – Energy Infrastructure
(70) Historical Underlying EBITDA by asset – Energy Infrastructure $ Million FY24 FY23 FY22 FY21⁷¹ FY20⁷¹ East Coast Grid Wallumbilla Gladstone Pipeline 657 620 578 550 539 South West Queensland Pipeline 295 262 245 233 254 Moomba Sydney Pipeline 125 126 136 152 161 Victorian Transmission System 125
Slide 32: Revenue and Underlying EBITDA by geography
Revenue and Underlying EBITDA by geography $ million FY24 FY23 Change ($) Change (%)⁷³ Revenue Energy Infrastructure Queensland 1,340 1,330 10 0.8% New South Wales 175 167 8 4.8% Victoria 233 220 13 5.9% South Australia 1 1 – –% Northern Territory 27 28 (1) (3.6%) Western Australia 648 462 186 40.3%
Slide 33: FY24 Capital and investment expenditure
(76) FY24 Capital and investment expenditure $ million Description of major projects FY24 FY23 Growth capex Regulated Western Outer Ring Main (WORM), Victorian Transmission System, Basslink 109 242 Non-Regulated – East Coast Gas Kurri Kurri lateral pipeline, East Coast Gas Grid Expansion 536 172 – W
Slide 34: 5-year normalised financials
5-year normalised financials Financial Performance FY24 FY23 FY22 FY21 FY20 Total revenue $m 3,064 2,913 2,732 2,605 2,591 Total revenue excluding pass-through⁷⁷ $m 2,591 2,401 2,236 2,145 2,130 Underlying EBITDA⁷⁸ $m 1,893 1,725 1,692 1,629 1,650 Total reported EBITDA⁷⁹ $m 1,736 1,686 1,630 1,639 1
Slide 35: Appendix
Image: Diamantina Power Station, Mount Isa, Queensland 06 Appendix FY24 Full Year Results
Slide 36: APA's diverse energy infrastructure portfolio
APA’s diverse energy infrastructure portfolio GAS TRANSMISSION AND CONTRACTED POWER ELECTRICITY STORAGE GENERATION TRANSMISSION (86) (86) Transmission Renewable energy >800 km high voltage electricity (86) transmission , including 290 km deep- >15,000 km transmission pipelines 342 MW Wind sea cable
Slide 37: Diversified business model
APA’s operational footprint is across a range of energy infrastructure assets FY24 Full Year Results 36
Slide 38: Diversified business model: revenue characteristics
Diversified business model Characteristics of APA’s Energy FY24 Energy Infrastructure FY24 Energy Infrastructure revenue FY24 Energy Infrastructure revenue (88) Infrastructure revenue: by revenue type by counterparty credit rating by customer industry segment – Risk management policies 1% and proces
Slide 39: Inflation linked revenues
Inflation linked revenues (89) (90) Revenue Drawn debt Commentary Majority of APA’s fixed revenue is indexed to Fully hedged/fixed with average maturity of 5.3 – A mix of annual and quarterly inflators in inflation yrs Australia – WGP US revenue is adjusted for US inflation indices annually from 1 J
Slide 40: Diversity of funding sources and maturities
Diversity of funding sources and maturities as at 30 June 2024 2,500 2,000 928 350 Syndicated Term Loan 1,500 EUR Hybrid⁹⁵ 550 JPY MTN 1,018 EUR MTN GBP MTN⁹³ 1,038 US144a⁹⁴ 1,000 1,544 828 NAIF ARENA Corporate liquidity facilities 1,329 1,109 133 500 700 750 742 774 500 500 500 450 452 198 77 24 FY
Slide 41: Regulatory update
Regulatory update Form of regulation reviews Basslink Goldfields Gas Pipeline The AER is reviewing the form of regulation for the South West Queensland Pipeline – The conversion application and – Next regulatory access arrangement (SWQP). We believe we have a strong case revenue proposal are current
Slide 42: Strong recognition of the critical role of gas
Strong recognition federally and in every state and territory of the critical role of gas (96) (97) The Australian Government’s Future Gas Strategy and AEMO’s 2024 Gas Statement of Opportunities (GSOO) report highlight gas as essential to supporting Australia’s decarbonisation and ensuring affordabl
Slide 43: APA's Sustainability Roadmap FY25-FY27
APA’s Sustainability Roadmap FY25-FY27 focuses on our ten material sustainability topics Securing Australia’s energy future and supporting sustainable outcomes for our key stakeholders and the environment Our People Operational Excellence Creating Value Our initiatives Work health, Modern slavery Fi
Slide 44: Group structure
Group structure Group APA Infrastructure Trust APA Investment Trust Tax (99) structure (APA Infra) (APA Invest) structure APA Infra APA Invest APA Group Limited 30% tax 0% tax (Responsible Entity) 77% 23% APA Infrastructure Ltd 100% APA Group Operating assets Passive investments and investments – AP
Slide 45: Endnotes
Endnotes 1. Page: 7 Underlying earnings before interest, tax, depreciation, and amortisation (Underlying EBITDA) excludes recurring items arising from other activities, transactions that are not directly attributable to the performance of APA Group's business operations and significant items. Report
Slide 46: Endnotes
Endnotes 26. Page: 12 Wallumbilla Gladstone Pipeline is separated from East Coast Grid in this chart as a result of the significance of its revenue and EBITDA to the Group. It is categorised as part of the East Coast Grid cash-generating unit for impairment assessment purposes. 27. Page: 12 The Elec
Slide 47: Endnotes
Endnotes 53. Page: 28 Underlying earnings before interest, tax, depreciation, and amortisation (Underlying EBITDA) excludes recurring items arising from other activities, transactions that are not directly attributable to the performance of APA Group's business operations and significant items. 54.
Slide 48: Endnotes
Endnotes 77. Page: 33 Pass-through revenue is offset by pass-through expenses within EBITDA. Any management fee earned for the provision of these services is recognised as part of asset management revenues. 78. Page: 33 Underlying earnings before interest, tax, depreciation, and amortisation (Underl
Slide 49: Andrew Nairn Michael Cox
Andrew Nairn General Manager Investor Relations M: +61 437 166 497 E: ir@apa.com.au Michael Cox Head of Media Relations & Financial Communications M: +61 429 465 227 E: michael.cox@apa.com.au www.apa.com.au