Apa Group · ASX:APA
Apa — Investor Presentation (September 2014)
37 slides from Apa's investor presentation, September 2014
Slide 1: APA investor information and FY14 highlights
APA investor information and FY14 highlights September 2014
Slide 2: About APA Group
About APA Group APA is Australia’s largest gas infrastructure business APA (29 August 2014) Market A$6.6 billion Gas transmission pipelines and storage capitalisation USD 6.2bn; GBP 3.8bn; EUR 4.7bn; CHF 5.7bn – Owning and operating two thirds of Australia’s onshore S&P/ASX 50 pipelines MSCI All W
Slide 3: APA's long term strategy
APA’s long term strategy Strategy is focused on our core business of gas pipeline infrastructure Facilitating development Enhancing APA’s portfolio of gas infrastructure assets in Australia’s of gas related projects growing energy market that enhance APA’s infrastructure portfolio Pursuing opportuni
Slide 4: Strategic development of pipeline grids
Strategic development of pipeline grids NT link to east coast grid: Feasibility study East coast grid APA’s east coast grid: – Interconnected transmission Darwin > 7,000 km of pipelines pipelines operating as one APA’s WA infrastructure: 5 major pipelines system Servicing mining regions 5 states a
Slide 5: Australian gas industry – abundant supply
Australian gas industry – abundant supply Supply fundamentals remain strong Proven and probable gas 981 PJ reserves total 142,000 PJ (1) 17,384 PJ – Domestic gas use for 2013 was 1,110 PJ(1) 44,495 PJ 70,386 PJ – A further 1,090 PJ(1) of gas was used for LNG export More than 50 years of gas 181
Slide 6: Australian gas industry – domestic and export demand
Australian gas industry – domestic and export demand Australia’s gas production, consumption and exports Australian gas consumption and LNG export projections are all projected to grow over the period to 2034–35 – Domestic use forecast to increase by one third, or 1.3%/a Growth underpinned by: –
Slide 7: Revenue security and diversity
Revenue security and diversity FY14 Revenue split Revenue secured by long term take-or-pay contracts or regulatory arrangements Other < 1% Regulated Diversified revenue base – single assets supply no more than 20% (revenue subject to price regulated tariffs) of revenue 23% Revenue by business se
Slide 8: Proven growth and value creation
Proven growth and value creation $ million Operating cash flow cents Operating cash flow per security 500 60 $440m 52.6 c 400 50 40 300 30 200 20 100 10 0 0 FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY10 FY11 FY12 FY13 FY14 FY1 FY2 FY3 FY4 FY5 FY6 FY7 FY8 FY9 FY10 FY11 FY12 FY13 FY14 $ million EBITDA cent
Slide 9: Maximising value for securityholders
Maximising value for securityholders 1400 Total securityholder returns since listing APA TSR: 1,113% 1200 APA CAGR: 19.2% 1000 Total annual returns 50% 800 43% 40% 600 31% 29% 30% 23% 22% 400 20% 18% 200 10% 0 0% 2009 2010 2011 2012 2013 2014 -10% APA total securityholder returns S&P/ASX 200 accumul
Slide 10: FY14 result highlights
FY14 result highlights APA Investor Presentation – September 2014 10
Slide 11: FY14 result: Value creation and innovation
FY 14 result: Value creation and innovation FY14 highlights Developing opportunities in a dynamic industry – Expanding and extending our infrastructure portfolio $1 billion of organic projects completed or in progress – Grid services in the east and west providing tailored gas transportation and
Slide 12: FY14 result: Another solid financial performance
FY14 result: Another solid financial performance $ million 2014 2013 (1) Change Normalised results (2) EBITDA 747 662 up 13 % Net profit after tax 200 175 up 14 % Operating cash flow (3) 440 433 up 2% Operating cash flow per security (cents) 52.6 56.0 down (6) % Statutory results EBITDA 747 764 down
Slide 13: FY14 result: EBITDA by business segment
FY14 result: EBITDA by business segment $ million 2014(1) 2013(1,2,3) Change FY14 EBITDA by business segment Energy Infrastructure Energy Asset Investments Queensland 212.8 163.7 30.0 % 9.1% Management New South Wales 106.6 112.1 (4.9)% 7.5% Victoria & South Australia 116.9 124.7 (6.3)% Queensland W
Slide 14: FY14 result: Fully covered distributions
FY14 result: Fully covered distributions cents 60 56.0 50 51.9 52.6 52.5 52.6 FY14 distribution payout ratio(1,2) of 68.9% 40 Distribution components: 35.0 35.5 36.25 35.61 cents profit distribution 30 32.8 34.4 0.64 cents capital distribution 20 36.25 cents 0 10 2.1% growth in distributions 0
Slide 15: Developing growth capital projects across Australia
Developing growth capital projects across Australia Continued expansion and enhancement of APA’s gas infrastructure portfolio, with many growth opportunities unique to APA – $1 billion capital projects completed or in progress in FY14 Committed projects underwritten by long term revenue contract
Slide 16: Capital expenditure
Capital expenditure $ million 2014(1) 2013(1) Growth capex Regulated - Victoria 65.5 22.6 Committed growth capex Major Projects $400m Queensland 206.6 80.8 New South Wales 13.2 23.8 $300m Western Australia 73.4 208.9 Other 23.8 29.0 $200m 317.0 342.6 Total growth capex 382.5 365.2 $100m Stay in busi
Slide 17: Capital management
Capital management Maintain strong BBB/Baa2 investment grade ratings Maintain funding flexibility – internal cash flows plus additional equity and/or debt Cash and committed undrawn facilities of around $800 million at 30 June 2014 Debt maturity profile (30 June 2014) $1,200m $1,000m 30 Jun 30
Slide 18: East coast grid services creating value
East coast grid services creating value Customer take-up of grid services – New short and longer term gas transportation Gladstone agreements across multiple pipelines – Storage services available throughout the grid, close to source or end use – Flexibility services to manage shifts in gas supply
Slide 19: Developing an integrated Western Australian portfolio
Developing an integrated Western Australian portfolio Gas supply security and flexibility – Mondarra Gas Storage Facility expansion commenced commercial operation July 2013 PILBARA PIPELINE SYSTEM – Underpinned by 20 year contract with Synergy (electricity generator/retailer) Pilbara mining – Addi
Slide 20: Focus on safety and operational excellence
Focus on safety and operational excellence LTIFR Health and safety 7.3 – Long-term safety goal of Zero Harm – 6.1 4.9 a program of continuous improvement – Decrease of LTIFR(1) to 0.7, down from 2.1 2.2 2.1 Enhancing infrastructure operations and 0.7 maintenance FY09 FY10 FY11 FY12 FY13 FY14 – C
Slide 21: Well positioned and equipped for growth
Well positioned and equipped for growth Darwin Organic growth – Capacity expansions in line with customer requirements – Grid enhancement and service developments Brownfield and greenfield Gladstone developments – Eastern Goldfields Pipeline Moomba Brisbane – NT – east coast grid pipeline link
Slide 22: Outlook and guidance for FY15
Outlook and guidance for FY15 Outlook Continued development of expansion projects and east coast gas grid Northern Territory – east coast interconnection feasibility study Guidance Statutory EBITDA expected within a range of $1,170 million to $1,190 million Normalised continuing business EBI
Slide 23: Supplementary information
Supplementary information APA Investor Presentation – September 2014 23
Slide 24: APA asset and investment portfolio
APA asset and investment portfolio APA Investor Presentation – September 2014 24
Slide 25: APA Group structure
APA Group structure APA is a stapled entity comprising two registered managed investment schemes: APA Group Securityholders – Australian Pipeline Trust (ARSN 091 678 778) – APT Investment Trust (ARSN 115 585 441) is a tax pass-through trust Australian Pipeline Limited (ACN 091 344 704) is Austra
Slide 26: Reconciliation – statutory and normalised results
Reconciliation – statutory and normalised results $ million 2014 2013(1) Change Normalised Significant Statutory Normalised Significant Statutory Normalised items items Revenue excluding pass-through(2) 992.5 - 992.5 919.5 - 919.5 7.9 % EBITDA 747.3 - 747.3 661.9 101.7 763.6 12.9 % Depreciation and
Slide 27: Energy Infrastructure
Energy Infrastructure Queensland EBITDA $240m South West Queensland Pipeline New short term agreements $213 million $200m Moomba compression Construction nearing completion $160m Wallumbilla compression South West Queensland Long-term agreement for compression services Pipeline Construction
Slide 28: Energy Infrastructure
Energy Infrastructure EBITDA $120m $107 million New South Wales Three agreements to transport increased gas volumes north from Victoria, commencing $80m Jan 2014, Jan 2015 and Jun 2015 A new 7-year grid services agreement, mainly utilising Moomba $40m Sydney the Moomba Sydney Pipeline Pipeline
Slide 29: Energy Infrastructure
Energy Infrastructure Western Australia & Northern Territory Goldfields Gas Pipeline Expansion project nearing completion EBITDA Pilbara Pipeline System $200m $187 million 12 months’ contribution Amadeus Gas Pipeline Additional revenue agreements $160m Emu Downs Mondarra Gas Storage Facility W
Slide 30: Asset Management and Energy Investments
Asset Management and Energy Investments Asset Management EBITDA $80m Increase in one-off customer contributions for relocating APA infrastructure $56 million One-off customer One-off customer contributions $40m $30m contributions Contracted $20m services Average $10m/a $10m $0m $0m FY11 FY12 FY13
Slide 31: FY14 Balance sheet
FY14 Balance sheet $ million 30 June 2014 30 June 2013 Change Current assets 203 280 (28) % Property, plant and equipment 5,574 5,280 6% Other non-current assets 2,196 2,139 3% Total Assets 7,973 7,699 4% Current debt - 81 - Other current liabilities 374 411 (9) % Total current liabilities 374 492 (
Slide 32: Debt facilities
Debt facilities Total committed debt facilities at 30 June 2014 Facility Drawn $million(1) amount amount Tenor 2011 Bilateral borrowing 150 110 5 years maturing October 2016 2011 Bilateral borrowings (2) 400 280 5 years maturing December 2018 2014 Syndicated facilities (3) 1,250 625 2.25, 3.25 and 5
Slide 33: Regulatory update
Regulatory update APA’s major price regulated assets Regulatory resets over the next five years Victorian Transmission System access arrangement – AER final decision (May 2013) reviewed by Australian Competition Tribunal, decision Sep 2013 – Recovered approximately $20m in business value from AE
Slide 34: Economic regulation of gas pipelines and networks
Economic regulation of gas pipelines and networks Regulator The Australian Energy Regulator (AER) is responsible for the economic regulation of gas transmission and distribution networks and enforcing the National Gas Law and National Gas Rules in all jurisdictions except Western Australia The E
Slide 35: Regulatory coverage of APA's pipelines
Regulatory coverage of APA’s pipelines Reduced regulatory coverage – Most pipelines on the east coast are uncovered due to interconnection of pipelines and increased supply options for markets Coverage of greenfield pipelines – Apply for 15 year exemption from coverage Pipeline expansions may
Slide 36: Disclaimer
Disclaimer This presentation has been prepared by Australian Pipeline Limited (ACN 091 344 704) the responsible entity of the Australian Pipeline Trust (ARSN 091 678 778) and APT Investment Trust (ARSN 115 585 441) (APA Group). Summary information: This presentation contains summary information abou
Slide 37: Delivering Australia's energy
For further information contact Ian Duncan Delivering Australia’s energy Capital Markets, APA Group Tel: +61 2 9693 0074 E-mail: ian.duncan@apa.com.au or visit APA’s website www.apa.com.au