Genesis Energy Limited · NZX:GNE
Genesis Energy — HY20 Earnings Presentation
29 slides from Genesis Energy's earnings presentation, Feb 21, 2020
Slide 1: Half Year 2020 Results Presentation
Half Year 2020 Results Presentation 21 February 2020 Marc England – CHIEF EXECUTIVE OFFICER Chris Jewell – CHIEF FINANCIAL OFFICER GENESIS ENERGY LIMITED
Slide 2: Agenda
AGENDA 1 Key Highlights 2 Financial Performance 3 Operational Update 4 Outlook Genesis Energy Limited 1H FY20 Result Presentation 2.
Slide 3: 1. Key Highlights
NERGY LIMITED genesis
Slide 4: Results at a glance
Results at a glance EBITDAF 1 m Retail $ ➢ Retail netbacks up across all fuels; Electricity up 4.1%, Gas up 10.3%, LPG up 17.9% ➢ Gross customer churn reduced by 2.5 ppt and net churn by 1.2 ppt NPAT ➢ Customers purchasing more than 1 fuel grew by 5.0%, to over 119k m $ ➢ Cost to serve customers has
Slide 5: 2. Financial Performance
2. Financial Performance
Slide 6: HY20 financial summary
HY20 financial summary KEY FINANCIAL COMPARISONS1 400 $ MILLIONS HY20 HY19 350 1,251 1,239 300 250 198 200 176 167 162 150 123 123 113 94 100 49 42 50 36 37 9 16 8.525cps 8.45cps 0 2 3 4 EBITDAF NPAT Underlying Controllable Operating Free Cash Flow Capital Interim Dividend Net Debt 5 Earnings Operat
Slide 7: Dividends
Dividends — Interim dividend of 8.525 cps declared (up 0.9%), with 80% imputation, representing a 6.9% gross yield1 DIVIDEND (CPS) & PAYOUT HISTORY 2 9.00 Dividends (cps) % of Free Cash Flow 145% 8.45 8.525 8.50 8.30 125% • An Interim dividend of 8.525 cps, 80% imputed, will 8.20 8.20 105% have a re
Slide 8: HY20 EBITDAF
HY20 EBITDAF — Strong Retail result offset by reduced gas availability, higher thermal fuel costs, reduced hydro generation and a planned Kupe outage 1 EBITDAF HY20 vs HY19 EBITDAF $ MILLIONS $ MILLIONS Favourable Unfavourable 9 198 198 176 167 156 30 10 0 198 167 HY16 HY17 HY18 HY19 HY20 HY19 EBITD
Slide 9: Segment EBITDAF
Segment EBITDAF RETAIL EBITDAF HY19 TO HY20 • Retail saw improved margins in residential, achieved from cost and Favourable Unfavourable volume/value mix management. Continued growth in LPG was offset by softer business margins due to escalating wholesale prices 10 3 in electricity, gas and LPG. • W
Slide 10: NPAT & underlying earnings
NPAT & underlying earnings — decrease in NPAT and Underlying Earnings NPAT $ MILLIONS Favourable Unfavourable • Unfavourable movement in Fair Value adjustments of 16 $13m driven by higher future electricity prices, reducing the value of derivatives. 49 30 13 • Unfavourable movement in Depreciation (
Slide 11: Controllable operating expenses
Controllable operating expenses — Operating expenses held flat with continued success on lowering our Retail cost to serve CONTROLLABLE OPERATING EXPENSES1 1H FY20 CONTROLLABLE OPERATING EXPENSES SPLIT2 16% LPG distribution acquisition & increased Retail $ MILLIONS share in Kupe JV 8% 38% Technology
Slide 12: Capital expenditure
Capital expenditure — Total capital expenditure at HY20 was $36m, no change to full year guidance of up to $100m CAPITAL EXPENDITURE1 • Stay in business capex (SIB) was $25m, significant $ MILLIONS maintenance projects included: - Kupe planned statutory outage and other major capex ($6.4m), Tekapo t
Slide 13: Capital structure
Capital structure — Net debt reduced by $12 million, Debt/EBITDAF ratio remains within target band • S&P reaffirmed BBB+ credit rating in December 2019. • Average interest rate of 5.5% in HY20, down from 5.8% for • Dividend reinvestment plan (DRP) in place since the FY18 interim FY19, due to lower f
Slide 14: 3. Operational Update
GENESIS ENERGY LIMITED genesis
Slide 15: Data-driven and customer focused
Data-driven and customer focused Our customer loyalty and engagement strategy is delivering value RESIDENTIAL CUSTOMER GROSS1 CHURN DOWN 2.5 ppt, NET CHURN DOWN 1.2 ppt (12 MONTH AVG) ➢ Gross customer churn continues to fall, down 2.5 ppt and net churn at record low levels Net Churn Gross Chrun ➢ Th
Slide 16: Customer service excellence
Customer service excellence AN INCREASINGLY DIGITAL AND AUTOMATED SERVICE OFFERING IS IMPROVED LPG COST TO DELIVER (CTD) IS DRIVING MARGIN GROWTH, CTD DOWN 18% LOWERING OUR COST TO SERVE: Fuel Cost ($/t) Cost to Deliver ($/t) Margin ($/t) ➢ Digital interactions now make up over two thirds of all int
Slide 17: Optimising the Retail Segment for value
Optimising the Retail Segment for value RESIDENTIAL ELECTRICITY SALES VOLUMES (GWh) & NETBACK1 ($/MWh) BUSINESS ELECTRICITY SALES VOLUMES (GWh) & NETBACK ($/MWh) Sales Volume Netback Sales Volume Netback 1,800 $140.00 Volume/value 1,800 $100.00 Sales Volume (GWh) 1,644 Volume/value Sales Volume (GWh
Slide 18: Hydro conditions and thermal fuel costs impact Wholesale Segment
Hydro conditions and thermal fuel costs impact Wholesale Segment LOW INFLOWS AND CONSERVATION FOR Q1 2020 IMPACT HYDRO GENERATION: THERMAL FUEL COST UP 19%, PORTFOLIO FUEL COST UP 38% TO $47/MWh: ➢ Total generation of 3,454 GWh, renewable generation down 15% to 1,465 GWh. ➢ The Weighted Average Fuel
Slide 19: Fuel and carbon costs are key drivers of market prices
Fuel and carbon costs are key drivers of market prices KUPE PRODUCTION DOWN BUT WILL RECOVER IN 2H FY20: CARBON PRICES ARE EXPECTED TO FLOW THROUGH TO WHOLESALE PRICING: ➢ Kupe’s planned statutory 30-day outage completed successfully. ➢ Carbon prices continue to rise and contribute, in part, to mark
Slide 20: Enabling a more sustainable future
Enabling a more sustainable future $ To be confirmed Genesis Energy Limited 1H FY20 Result Presentation 20.
Slide 21: Photos courtesy of Tilt Renewables, Waipipi Wind Farm construction
Photos curtesy of Tilt Renewables, Waipipi Wind Farm construction
Slide 22: Outlook and guidance
Outlook and guidance — Updated guidance for FY20 EBITDAF is $360 to $370 million • Genesis expects an improved performance in H2 FY20 1H FY20 vs 2H FY20 EBITDAF ($M) Minimum Maximum relative to the first half. • Improved thermal margins due to a lower average cost of coal with higher priced coal use
Slide 23: Appendices
Appendices
Slide 24: Financial statements
Financial statements1 HY20 HY19 Balance Sheet HY20 FY19 Variance Income Statement Variance ($m) ($m) ($m) ($m) Revenue 1,334.2 1,361.0 (2.0%) Cash and Cash Equivalents 26.1 61.9 Other Current Assets 374.6 417.0 Total Operating Expenses (1,167.0) (1,163.5) +0.3% EBITDAF 167.2 197.5 (15.3%) Non-Curren
Slide 25: Debt information
Debt information Debt Information HY20 FY19 Variance GENESIS ENERGY DEBT PROFILE ($m) ($m) Total Debt $ 1,306.7 1,355.0 $m Cash and Cash Equivalents $ 26.1 61.9 $350 Headline Net Debt $ 1,280.6 1,293.1 (1.0%) $300 $250 USPP FX and FV Adjustments $ 41.2 41.7 Adjusted Net Debt1 $ 1,239.4 1,251.4 (1.0%
Slide 26: Operational highlights
Operational highlights Retail Key Information HY20 HY19 Variance Wholesale Key Information HY20 HY19 Variance EBITDAF ($ millions) 64.0 55.1 +16.2% EBITDAF ($ millions) 79.0 108.8 (27.4%) Electricity Netback ($/MWh) $108.20 $103.98 +4.1% Renewable Generation (GWh) 1,465 1,713 (14.5%) Gas Netback ($/
Slide 27: Glossary
Glossary CUSTOMER Brand Net Promoter Score (%) Based on survey question "How likely would you be to recommend Genesis Energy/Energy Online to your friends or family?" Interaction Net Promoter Score (%) Based on survey question "Based on your recent Interaction With GE/EOL, how likely would you be to
Slide 28: Disclaimer
Disclaimer This presentation has been prepared by Genesis Energy Limited (‘Genesis Energy’) for information purposes only. The information in this presentation is of a general nature and does not purport to be complete nor does it contain all the information required for an investor to evaluate an i
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