Infratil Limited · NZX:IFT
Infratil — Shareholder Meeting (August 2011)
37 slides from Infratil's shareholder meeting presentation, Aug 15, 2011
Slide 1: Infratil Limited Report to Shareholders
INFRATIL LIMITED REPORT TO SHAREHOLDERS AUGUST 15, 2011
Slide 2: David Newman, Chairman
David Newman Chairman • Independent Director since foundation • Substantial senior management experience • Chairman Wellington Airport, Director IAE • Guardian of the NZ Superannuation Fund • Fellow of NZID 2
Slide 3: Duncan Saville, Director
Duncan Saville Director • Foundation Director • Director of Infratil’s manager, Morrison & Co • Director of the manager of Utilico (16.5% Infratil shareholder) • Extensive investment and utility sector experience • Fellow of both the Australian Institute of Directors and Chartered Accountants • Reti
Slide 4: Humphry Rolleston, Director
Humphry Rolleston Director • Independent Director since 2006 • Director of several listed and private companies involved with finance, property, tourism, manufacturing and agriculture • Fellow of NZID and the Institute of Management • Retiring by rotation and available for re- election 4
Slide 5: Mark Tume, Director
Mark Tume Director • Independent Director since 2007. Chairman of the Audit & Risk Committee • Director of IEA, several listed, SOE and private companies, Guardian of NZ Superannuation Fund • Finance industry background 5
Slide 6: Lloyd Morrison, Director
Lloyd Morrison Director • Established Infratil in 1994 • Executive Chairman of Infratil’s manager, Morrison & Co • Director of IAE and Auckland International Airport, Chairman of Snapper • Alternate Director TPW 6
Slide 7: Marko Bogoievski, Chief Executive & Director
Marko Bogoievski Chief Executive & Director • Joined Morrison & Co in 2008, and Infratil Board 2009 • Substantial experience NZ, USA, finance, operations, sales • Chairman Z Energy • Director TrustPower 7
Slide 8: Anthony Muh, Alternate Director
Anthony Muh Alternate Director • Director since 2007, alternate director for Duncan Saville since 2010 • Joined Morrison & Co in 2010 - Hong Kong based • Finance and investment sector experience • Fellow of INFINZ and the Hong Kong Securities Institute 8
Slide 9: Resolution 1 and 2: Re-election of Directors
Resolution 1 and 2: Re-election of Directors • Re-election of Humphry Rolleston: that Humphry Rolleston who retires by rotation in accordance with the Company’s constitution and NZSX Listing Rule 3.3.11, and ASX Listing Rule 14.4, and is eligible for re-election, be elected as a director of the Comp
Slide 10: Resolution 3: Continuation of Infrastructure Bond Programme
Resolution 3: Continuation of Infrastructure Bond Programme • That the Company continue to raise finance through the continuation of its Infrastructure Bond Programme by the issue of Dated Infrastructure Bonds (Bonds that have a maturity date) (referred to as “New Infrastructure Bonds”). The New Inf
Slide 11: Resolution 4: Directors' Remuneration
Resolution 4: Directors’ Remuneration • The proposal for shareholders is that the aggregate limit of the fees payable to Infratil directors, in their capacity as directors of the Company or any of its subsidiaries, be set at $1,114,531 (plus GST or VAT), an increase of $50,364 over the amount approv
Slide 12: Resolution 5: Auditors
Resolution 5: Auditors • To authorise the Directors to fix the auditor’s remuneration 12
Slide 13: Resolution 6: Purchase of Shares by Morrison & Co
Resolution 6: Purchase of Shares by Morrison & Co • That in accordance with Rule 7(c) of the Takeovers Code, the purchase by H.R.L. Morrison & Co Limited of 15,000,000 shares in the Company from Utilico Investments Limited on the basis described in the Explanatory Note to this resolution be approved
Slide 14: Resolution 7: Exercise of Warrants by Morrison & Co
Resolution 7: Exercise of Warrants by Morrison & Co • That, in order to permit H.R.L. Morrison & Co Limited and H.R.L. Morrison & Co Group Limited to retain any increased percentage of voting rights held or controlled by them as a result of the exercise of the IFTWC warrants, allotments by the Compa
Slide 15: Resolution 8: Impact on Morrison & Co of Share Buyback Programme
Resolution 8: Impact on Morrison & Co of Continuation of Share Buyback Programme • That, in order to permit H.R.L. Morrison & Co Limited and H.R.L. Morrison & Co Group Limited to retain any increased percentage of voting rights held or controlled by them as a result of the continuation of the acquis
Slide 16: 2010/11 – A year of highlights
2010/11 – A year of highlights • Significant growth in operating earnings and cash flows with strong momentum leading into 2012 and 2013 • $504m of capital deployed in new investments or high-return capex • Successful first year of operation for Z Energy (formerly Shell NZ) • Australian Energy signi
Slide 17: Infratil Limited Report to Shareholders August 2011
INFRATIL LIMITED REPORT TO SHAREHOLDERS 15 AUGUST 2011
Slide 18: We're a big part of the NZ economy
We’re a big part of the NZ economy … • Electricity - 221,000 customers in NZ • Fuel – 7.3m litres of retail and commercial fuel sold every day • Public transport - 225,000 rides per weekday • Air travel - 15,000 passengers through Wellington airport per day • Convenience retail - 164,000 customers t
Slide 19: A focused and consistent approach
… with a focused and consistent approach • Consistent approach to capital allocation through market cycles: - Active manager targeting long term ownership of growth infrastructure - GDP+ growth assets with attractive reinvestment options and inflation resistant earnings - Deep sector expertise, part
Slide 20: 2010/11 – A year of highlights
2010/11 – A year of highlights • Significant growth in operating earnings and cash flows with strong momentum leading into 2012 and 2013 • $504m of capital deployed in new investments or high-return capex • Successful first year of operation for Z Energy (formerly Shell NZ) • Australian Energy signi
Slide 21: We have flexibility to grow
We have flexibility to grow … • Comfortable gearing and strong support from senior lenders • $1.6bn of consolidated bank facilities as at 31 March 2011 (net bank debt of $600m) • Confirmation that the NZ retail bond market remains open to quality issuers with a consistent track record • New sources
Slide 22: Investment will drive future earnings
… and investment will drive future earnings • TrustPower – Mahinerangi wind farm, irrigation, FY 31 March diesel peaker, generation enhancement, and ($Millions) 2011 2012 customer care and billing systems • Australian Energy – generation plant in WA TrustPower $109 $60-$75 and SA, organic customer g
Slide 23: Nearing the end of a consolidation phase
Nearing the end of a consolidation phase • 2008 - 2010 saw a strong focus on rebalancing the portfolio and consolidation around the core Australasian holdings • Emphasis on improving current performance and growth in free cash flow and earnings • Sale of non-strategic or low-potential assets • Consi
Slide 24: Infrastructure is a "hot" sector
Infrastructure is a “hot” sector • Since 2005, 163 infra funds have raised a Our definition of infrastructure: total of USD $146bn. USD $50bn of this remains unspent(1) • Long-lived assets that facilitate the production of goods and services • Over 100 funds are fundraising currently, seeking a furt
Slide 25: Our current thinking
Our current thinking ... • Long term indicators suggest that 2011 and 2012 are likely to be a good time to reset new positions for the next 15 years • Public markets are starting to present more value than private markets • Good time to lock-in long term debt and committed financing at attractive al
Slide 26: New phase = new emphasis
New phase = new emphasis • Complete the sale of businesses or assets with limited growth potential • Actively scanning origination opportunities and co-investment partners outside of Australia and New Zealand • Ensure capital structure and risk management systems can sustain inevitable shocks and fu
Slide 27: Sector Review
Sector Review ¢einfratil
Slide 28: TPW – Core strength with growing options
TPW – Core strength with growing options • Earnings consistent with prior year • Valuable pipeline of material investment options: - Secured consents for approximately 400MW of wind farm and 120MW of hydro developments in the South Island during the year - Significant future irrigation options (prin
Slide 29: Z – Performing ahead of expectations
Z – Performing ahead of expectations • Market leader in most sectors with approximately 30% market share • Excellent first year performance with higher market share, volumes and earnings • ~70 transition projects completed by the end of January with new independent capability and continued emphasis
Slide 30: Z is much more than a simple rebrand
Z is much more than a simple rebrand... • Considered decision to change from Shell based on extensive research • Post that decision, further consumer testing of potential brands and retail offers • 10 Retail pilots operating between June and October • Supported by full marketing campaign • Expected
Slide 31: New POS system and refit of stores
a new POS system a refit of stores diesel at all lanes espresso coffee ne stretchy oses. at Lhe i - . eal all our pumps = - — Q | : = 5 ay hotel style bathrooms
Slide 32: Australian Energy – reaping rewards
Australian Energy – reaping rewards • Australian energy market is a sector still emerging from government ownership and monopoly provision • Recently privatised NSW market will provide opportunities for committed players • Lumo and IEA are building customer incumbency and generation capacity • No st
Slide 33: WIAL – steady growth despite challenges
WIAL– steady growth despite challenges • EBITDAF +6% to $72 million despite relatively flat aviation market • Completion of new international terminal • Future activity - Airline schedules indicate that FY12 will show growth - Car park & domestic terminal expansion • Regulation/Pricing consultation
Slide 34: Public transport – key metrics show promise
Public transport – key metrics show promise • Encouraging earnings improvement - Strong patronage growth in Auckland - Positive growth in more mature Wellington market • Major refurbishment of bus fleet - Investment in 158 new buses through significant bus procurement contract with ADL UK (local ass
Slide 35: 2012 EBITDAF Outlook – growth to continue
2012 EBITDAF Outlook – growth to continue FY 31 March FY 2012 ($Millions) FY 2011 Outlook EBITDAF - normalised $443 $460 - $490 Net Interest ($168) ($180 - $190) Operating Cash Flow $179 $150 - $170 • 2012 EBITDAF range $460-$490m - major assumptions: - Incremental gains for TrustPower, Wellington A
Slide 36: Confidence in the long-term outlook
Confidence in the long-term outlook • Capital investment program and recent portfolio decisions have built a strong platform for growth in free cash flow and earnings • Operating leverage and optionality a feature of our core businesses: - Z Energy only one year into a multi-year restructuring of th
Slide 37: For more information: www.infratil.com
For more information: www.infratil.com