Apa Group · ASX:APA

Apa — Investor Day (November 2013)

45 slides from Apa's investor day presentation, Nov 14, 2013

  1. Slide 1: More Than the Sum of Our Parts – APA Group Investor Day

    For personal use only MORE THAN THE SUM OF OUR PARTS APAGroupInvestorDay 14 November2013Sydney Disclaimer ThispresentationhasbeenpreparedbyAustralianPipelineLimited(ACN091344704)theresponsibleentityoftheAustralian PipelineTrust(ARSN091678778) andAPTInvestmentTrust(ARSN115585441)(APAGroup). Summaryin

  2. Slide 2: Agenda; Business overview and strategy

    Agenda „ BusinessoverviewandstrategyͲ MickMcCormack(MD) „ IndustryfocusͲ RossGersbach(Strategy&Development) For personal use only „ GastransmissionͲ RobWheals(Transmission) „ Q&Asession 10:30Ͳ 10:50amMorningtea „ MajorprojectsͲ KevinLester(InfrastructureDevelopment) „ Networkoperationsandassetmanage

  3. Slide 3: Agenda; APA executive team

    Agenda „ APA’’sexecutiveteam For personal use only „ APA’’sinfrastructureportfolio „ Strategy „ Organicgrowth „ Revenuediversityandsecurity „ Financialstrength „ Safetyandreliability APAGroupInvestorDay2013Æ 5 APAexecutiveteam ChrisKotsaris Headof InvestorRelations &Communications APAGroupInvestorDa

  4. Slide 4: APA's infrastructure portfolio

    APA’’sinfrastructureportfolio Darwin „ Unrivalledgasinfrastructureportfolio „ Integratedportfolioofassets For personal use only „ Attractivegrowthopportunities MountIsa „ Increasedindustryefficiency „ Stableandsecurecashflow Gladstone „ Internallymanagedandoperated Brisbane Moomba APAowned andoperat

  5. Slide 5: Australian gas industry – changes; APA strategy

    AustraliangasindustryͲ changes Respondingtoshortandlongtermchangesintheindustry For personal use only „ Eastcoastgasallocationfordomesticuseandexport „ Gaspricingandimpactsonthesupplyanddemandofgas „ Developmentofnewgassources „ Efficientmarketoperations APAGroupInvestorDay2013Æ 9 APAstrategy Focuso

  6. Slide 6: Successful strategy implementation

    Successfulstrategyimplementation 2001 2004 2007 2010 2013 For personal use only „ Acquiredminorities, achieving100% „ Acquisition–– pipelines, distributionnetworks, „ Pipelineacquisitions ownershipofmajor „ Pipelineacquisitions pipelineasset electricity „ Organicexpansion „ Organicexpansion–– pipeli

  7. Slide 7: Organic growth; Creating value

    Organicgrowth „ Organicgrowthcontinuestobefocus „ Committedprojectsunderwrittenbylongtermrevenuecontracts For personal use only FY2013 FY2014 FY2015 $500m Committedgrowthcapital Roma Brisbane Pipeline Pipelineexpansion Moomba Sydney Pipeline Pipelineexpansion Southernlateralexpansion $400m Victorian

  8. Slide 8: Revenue security and diversity; Financial strength

    Revenuesecurityanddiversity $900m Revenuebybusinesssegment(1) 6% $800m EnergyInvestments 9% FY13Revenuesplit For personal use only $700m AssetManagement Regulated Other1% WAandNT WA (revenuesubjecttoprice VicandSA Energy & 25% regulatedtariffs) $600m 25% Infrastructure NT Qld $500m NSW Vic & 19% $40

  9. Slide 9: Safety and reliability

    Safetyandreliability LTIFR „ Longtermsafetygoalofzeroharm 7.3 6.1 For personal use only դ Allincidentsarepreventable 4.9 դ Ourperformanceisimproving 2.2 2.1 դ NewHSEStrategyandImprovementPlanwilltakeuscloser „ Reliabilityunderpinssafeoperations 2009 2010 2011 2012 2013 „ Effectiveemergencyresponse դ

  10. Slide 10: Agenda; Organisational structure

    Agenda ƒ Structure For personal use only ƒ Gas industry dynamics – East coast –– changing gas dynamics – Western Australian developments ƒ Regulatory developments ƒ Investment opportunities APAGroupInvestorDay2013Æ 19 Organisationalstructure RossGersbach ChiefExecutive Strategy&Development Corporate

  11. Slide 11: East coast grid – changing dynamics

    Eastcoastgrid–– changingdynamics Globalnaturalgasprice $20 ƒ Increaseingasprices JapanLNG(CIF) EUpipeline(CIF) US$/MmBtU $15 – Gaspricesmovingtoparitywithinternationalgasprices UKNBP For personal use only US(HenryHub) $10 – Increasedproductioncostsfromnewfields ƒ Newsourcesofsuppliestomeetexportand

  12. Slide 12: Regulatory update; Investment opportunities

    Regulatoryupdate FY13Revenuesplit „ AERisworkingonnewregulatoryguidelineswitha particularfocusonelectricitybusinesses Other1% For personal use only Regulated (revenuesubjecttoprice „ RateofreturnguidelineismostpertinenttoAPA regulatedtariffs) 25% „ Debatefocusedonbetaandgamma „ Recentchangestocostof

  13. Slide 13: Gas transmission; Agenda

    For personal use only Gastransmission RobWheals GroupExecutiveTransmission APAGroupInvestorDay2013Æ 25 Agenda „ Overview – Teamstructure – Keymetrics „ Strongbusinessfundamentals „ Market – Overview – Opportunities – Respondingtocustomerneeds „ Transmissionportfolio „ Summary Capturingvalueinachangi

  14. Slide 14: Transmission team; Overview – key metrics

    Transmissionteam RobWheals For personal use only GroupExecutiveTransmission Eastern Western Northern Portfolio Portfolio Portfolio Transmission PipelineOperation Operations &Maintenance StrategyandService CustomerExperience& Delivery StrategicPlanning Transmission BusinessImprovement Projects Nation

  15. Slide 15: Strong business fundamentals

    Strongbusinessfundamentals „ SignificantgasreservesͲ combinedwithunrivalledgasassetfootprint For personal use only „ DomesticgasdemandͲ fundamentalsstillstrong „ Longlifeassets „ Longtermcontractsand/orregulatorycertainty „ Strongcustomerrelationships,bluechipcustomerbase „ 80%ofrevenuefromtop10cust

  16. Slide 16: Market – overview; opportunities

    MarketͲ overview „ Stepchangeingasdemand – EastcoastLNGdemand2Ͳ3xdomestic(6Ͳ9trains) For personal use only – DemandlargelybeingmetbyQueenslandcoalseamgas – ReͲbalancingofNSWsupplyawayfromMoomba „ Gaspricelinkagetotheglobalmarket – Pricetrendinghigher(upwardsof$7/GJ) – PriceincreaseͲ Permanent?Ormaym

  17. Slide 17: Responding to customer needs; Case study

    MarketͲ respondingtocustomerneeds „ Marketchangesanduncertaintydrivingcustomersneeds – Changingsupplyand/ordemand For personal use only – Respondingtogreatervolatility – Assistingcustomersreduceenergycosts „ APAworkingcloselywithcustomers – Expandingassetsinresponsetodemand – Deliveringseamlessandfl

  18. Slide 18: Transmission portfolio; Eastern portfolio

    Transmissionportfolio „ Assetportfolio „ Diversificationacross – Eachassetisintegraltotheportfolio – Industrysector – Meetscustomersneedsseamlessly For personal use only – Geographicalregions – ‘‘oneͲstopshop’’todelivergasacrossmultipleassets – Pipelineassets FY13EBITDAbybusinesssegment AustralianPr

  19. Slide 19: System flexibility; APA Grid service capability

    SystemflexibilityͲ strategyinaction past…… ……future Capacity For personal use only expansions BiͲdirectional capability Buildinggreaterflexibilityintoour easternportfolio APAGroupInvestorDay2013Æ 37 APAGrid–– servicecapability „ StrategicfocusͲ seamlessandflexibletransportationandstorageservices „ N

  20. Slide 20: APA Grid customer and APA dashboards

    APAGrid Customer““dashboard”” For personal use only ™ customerthroughput information ™ maintenance information ™ statusofcustomer datafunctions ™ accesstomultiple pipelinesfromone screen APAGroupInvestorDay2013Æ 39 APAGrid APA““dashboard”” ™ Customerthroughput information ™ Linepackstatus ™ Operatio

  21. Slide 21: Delivering the strategy – East Coast Grid

    Deliveringthestrategy EastCoastGrid 33ReceiptPointand98DeliveryPoints For personal use only Servicelayer APAGrid–– CustomerManagementSystem Victorian SouthWest Dandenong LNG MoombaSydney Transmission Queensland (DLNG) Pipeline(MSP) System(VTS) Pipeline(SWQP) Assetlayer Berwyndale RomaBrisbane Carpen

  22. Slide 22: NSW market in transition; transitional impacts

    NSWmarketintransition „ Marketchanges – ShorttermshiftofNSWsupplyawayfromMoomba For personal use only – ConstraintsondevelopingNSWcoalseamgas……impactstiming – Relianceonwidersourcesofgas……allconnectedtoAPA’’sassets „ Needflexibility Ͳ APAresponding „ Successfullycontractedkeycustomers – MetbyAPA’’se

  23. Slide 23: MSP integral to east coast grid; Supporting LNG projects

    MSPintegraltoeastcoastgrid „ Demandforrangeofservicesacrossthegrid,includingMSP „ MSPprovidesvitalnorthͲsouthͲnorthlink For personal use only Moomba „ Storagekeyopportunity – CanprovidepeakdaycapacityforVIC,NSWandQLD – ManagingvolatilityforLNGexport Linepack storage „ Otheropportunities – Services‘‘

  24. Slide 24: Storage; Western portfolio – Pilbara

    Storage „ Significantstorageportfolio – Dandenong LNG For personal use only – Linepackstorageinmajorpipelines „ Services – Peakday – PowergenerationͲ pricevolatility – LNGplantcommissioningandoperationaldisruption – Upstreamproductionissues „ PricingͲ basedonvolumestored APApositionedtobenefitfromde

  25. Slide 25: Western portfolio – Goldfields; Mondarra gas storage

    WesternportfolioͲ Goldfieldsregion „ Currentgoldandnickelpricesshiftedfocustocost For personal use only reductionformines – Providingsignificantopportunitiestoreplacedieselfired powergenerationwithgasfiredgeneration „ Upsidefromnewprojectsifeconomicfundamentals improve „ Continuinginterestfornewconn

  26. Slide 26: Northern portfolio; Summary

    Northernportfolio „ LongtermcontractwithPower&WaterCorporation Gove „ GastoGove For personal use only – FederalandNTGovernmentsupport – RioTintodecision – Ifproceeds ¾ APAexistingassetsinvolved ¾ APAwillparticipateinanyprocess „ NTLink – PotentialtoconnectNTassetsandeastcoastgrid – BiͲdirectional––

  27. Slide 27: Major projects overview

    For personal use only Majorprojectsoverview KevinLester GroupExecutiveInfrastructureDevelopment APAGroupInvestorDay2013Æ 53 Agenda „ InfrastructureDevelopmentdivisionoverview – Teamstructure – Projectdevelopmentanddelivery „ Currentsignificantprojectsoverview – GoldfieldsGasPipelineexpansion – Moomb

  28. Slide 28: Organisational structure; Project development and delivery

    Organisationalstructure KevinLester GroupExecutive For personal use only InfrastructureDevelopment Projects Infrastructure InfrastructureStrategy Strategic Infrastructure Development Construction &Engineering Procurement Support • ProjectDevelopment • Implement&manage • AssetCapacityPlanning • Const

  29. Slide 29: Current capital projects; Goldfields Gas Pipeline expansion

    Currentcapitalprojects For personal use only APAGroupInvestorDay2013Æ 57 GoldfieldsGasPipelineexpansion Theproject: „ Compressionstations,2additionalofftakes and meterstations „ Combinationofbrownfieldsandgreenfields work „ Prefabricationofmodulesandremoteconstruction Capex: „ $150million InͲservice

  30. Slide 30: Moomba compression; Wallumbilla expansion and Eastern haul

    Moombacompressionexpansion Theproject: „ 3unitcompressionstationͲ capacitytoincreaseto5units For personal use only „ Engineeringhousefordetaileddesign Capex: „ $125million InͲservice: „ CompletionFY2015 Outcomes: „ Compressgasfrom6.4MPato14.1MPaintoSWQP „ Expandingexistingassets „ Closeandpositivewo

  31. Slide 31: Victorian Transmission System expansion; Summary

    VictorianTransmissionSystemexpansion Theproject: „ NorthernInterconnectlooping For personal use only – Stage1–– 27kmlooping – Stage2–– 135kmlooping „ WinchelseacompressorstationonSouthWestPipeline Capex: „ $200million InͲservice: „ Stage1:FY2014 „ Stage2:FY2015 Outcomes: „ Increaseof145%ofwintercapa

  32. Slide 32: Network operations and asset management

    For personal use only Networkoperationsandassetmanagement JohnFerguson GroupExecutiveNetworks APAGroupInvestorDay2013Æ 63 Agenda „ Networksstructure „ Assetmanagementoverview „ Contractoverview „ Networksassetoverview „ O&MandCommercialservicesprovided APAGroupInvestorDay2013Æ 64

  33. Slide 33: Networks team; APA asset and investment portfolio

    Networksteam JohnFerguson GroupExecutiveNetworks For personal use only Victoria SouthAustralia Queensland (incl southernNSW) (incl NTandMildura) (incl TamworthandNSW) ““Nationalstrategieslocallydelivered”” Commercial Businessdevelopmentsupport Networks Systems,businessprocesses SupportServices Mains

  34. Slide 34: Contract overview

    Contractoverview Envestra „ Queensland,VictoriaandSouthAustraliagasdistribution,operatorsince2007 For personal use only „ NSWgasdistribution(Wagga,Cooma,TumutValley,MonaroandRiverinaTowns), operatorsince2011 „ OperatingAgreements – Costrecoveryplusmanagementfee,witha limitedincentivemechanismforredu

  35. Slide 35: Networks asset overview; O&M services; Summary

    O&Mandservicesprovided „ Gashaulage For personal use only „ Operationsandmaintenance „ Networkextensions–– endtoend „ Marketingnaturalgasbrand „ Billing „ Nationalregulatorsubmissions „ Financialbudgets „ Financialandmanagementadvice APAGroupInvestorDay2013Æ 69 Summary „ Strongpresenceacross5states

  36. Slide 36: Energy Investments

    For personal use only EnergyInvestments RossGersbach ChiefExecutiveStrategyandDevelopment APAGroupInvestorDay2013Æ 71 Agenda „ TheEnergyInvestmentsplatform „ APA’’sexistingInfrastructureInvestments „ Powergeneration – DiamantinaPowerStation(DPS) – LeichhardtPowerStation(LPS) APAGroupInvestorDay2013Æ

  37. Slide 37: APA's Energy Investments platform

    APA’’sEnergyInvestmentsplatform „ Existsprimarilytomaximise revenuetoAPAfromitsinvestmentassets,acrossallaspectsof itsinvolvement For personal use only – Returnoninvestedcapital – FeesforO&Mservices – Feesforcommercialandinvestmentmanagementservices „ Sustainabilityofearningsstreams–– forallinvestor

  38. Slide 38: Drivers of success; Diamantina and Leichhardt power stations

    Driversofsuccess „ Suitabilityoftheinvestmentfortheinvestmentmanagementplatform – Stable,securelongtermcashflows SEAGasPipelinecompressorstation For personal use only – Knownoperatingenvironmentandcoststructures – Limited/verypredictablefuturecapex requirements „ SuitabilityofcoͲinvestors: – Complem

  39. Slide 39: Finance and capital management

    For personal use only Financeandcapitalmanagement PeterFredricson ChiefFinancialOfficer APAGroupInvestorDay2013Æ 77 Agenda „ Financestructure „ Investmentcriteria „ Capitalexpenditure „ Distributionpolicy „ Capitalmanagementpolicy APAGroupInvestorDay2013Æ 78

  40. Slide 40: Finance team; Investment criteria

    Financeteam ManagingDirector PeterFredricson For personal use only ChiefFinancialOfficer Financial Management Taxation Shared InvestorRelations Treasury Accounting Accounting Services &Communications Risk& Information Insurance Technology APAGroupInvestorDay2013Æ 79 Investmentcriteria APArigorouslya

  41. Slide 41: Distribution policy; Funding capacity for growth projects

    Distributionpolicy „ Maximisingtotalsecurityholderreturnsbybalancingthe needtosupportfundingofAPA’’sgrowthopportunitieswith cents theneedtosustainandgrowdistributionsoverthelongterm 60 For personal use only 51.9 52.6 52.5 „ Distributionstocontinuetobesustainableovertimeand 50 48.2 tobefundedfromoper

  42. Slide 42: Funding growth – past and future; Capital management

    Fundinggrowth–– pastandfuture „ Fundingforthe4yearsfromFY2010–– 13 „ ExpectedfundingforFY2014andFY2015 For personal use only դ $1.45billionofgrowthcapex,acquisitions andinvestmentshasbeenfundedwitha mixofoperatingcash,debtandequity $1.45billion Estimate$400m/a Investments Debt Debt Debtand Equity FY

  43. Slide 43: APA debt profile; FY14 guidance confirmed

    APAdebtprofile Maintainfundingflexibility MaturityProfileofDebtPortfolio (30September2013) „ Mixofbankandshorterterm $1,000m For personal use only (1Ͳ5years)funding $800m $43m „ Growingportfolioofoffshore issuance(7Ͳ12years) $600m $483m „ Likelyconstrainedatmaximum 12yearsissuance(swaps““right $400m

  44. Slide 44: Summary

    For personal use only Summary MickMcCormack ManagingDirectorandCEO APAGroupInvestorDay2013Æ 87 Summary „ Strengthanddiversityofassetportfolio–– unrivalledorganicgrowth „ Eastcoastgrid–– capturingvalueinachangingmarket „ FinancialstrengthandflexibilityͲ connectingopportunities Deliveringonourlongterm

  45. Slide 45: For further information contact

    For personal use only Forfurtherinformationcontact ChrisKotsaris–– Headof DeliveringAustralia’’sEnergy InvestorRelationsand Communications,APAGroup Tel:+61296930049 EͲmail:chris.kotsaris@apa.com.au orvisitAPA’’swebsite www.apa.com.au APAGroupInvestorDay2013Æ 89

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