Infratil Limited · NZX:IFT
Infratil — Investor Day (April 2019)
104 slides from Infratil's investor day presentation, Apr 10, 2019
Slide 1: Infratil 2019 Investor Day and Preliminary Guidance for the 2020 financial year
10 April 2019 For personal use only Infratil 2019 Investor Day and Preliminary Guidance for the 2020 financial year Infratil has released the presentation material for its annual Investor Day. Presentations are recorded during the day and will be available to view on www.infratil.com after the event
Slide 2: Infratil Investor Day
Infratil Investor Day For personal use only 10 April 2019
Slide 3: Portfolio reconstruction largely complete
Portfolio reconstruction largely complete Focus on divestment programme and enhancing the cash generative core For personal use only • The rebuild of the Infratil portfolio effectively commenced in 2013/14 with sale of Z Energy and Lumo Energy • The establishment of significant renewables, retiremen
Slide 4: Confidence around outlook has steadily improved
Confidence around outlook has steadily improved Transparency of new platforms and delivery of outcomes For personal use only • We have maintained a consistent approach to investment over multiple market cycles – Focus on earlier stage opportunities in well researched areas where we have strong opera
Slide 5: The future looks promising
The future looks promising While there are gaps, the heavy lifting is substantially complete For personal use only • We have now established a balanced portfolio capable of exceeding target equity returns, while operating safely between defined credit and liquidity parameters; – Portfolio will requi
Slide 6: Paul Newfield: Portfolio Strategy
Paul Newfield Portfolio Strategy For personal use only
Slide 7: Our portfolio reset is paying off for shareholders
Our portfolio reset is paying off for shareholders Outstanding returns delivered over short, medium and long term For personal use only Infratil Share Price TSR Performance 4.50 Period TSR 4.00 1 Year 41.3% 3.50 5 Year 20.1% 3.00 10 Year 16.6% 2.50 Inception 17.5% 2.00 1.50 1.00 0.50 - 2009 2010 201
Slide 8: What we said we would do
What we said we would do Last year we outlined a strategy to tighten the portfolio For personal use only Investor Day 2018 Observations: What we said we would do: • Strong pipeline of re-investment options •1 Tighten the portfolio in our existing development platforms •2 Focus capital deployment on
Slide 9: Tightening the portfolio
Tightening the portfolio Expect further activity in 2019 For personal use only Conditional agreements reached on three …with three ongoing strategic reviews sales… Australian Social Infrastructure Partnership (‘ASIP’) • Aspire Schools • New Royal Adelaide Hospital 8 INFRATIL INVESTOR DAY 2019
Slide 10: ANU demonstrates the strategy in action
ANU demonstrates the strategy in action Case Study: ANU Student Accommodation For personal use only Investment thesis (2016): • Cash generative core infra business (high single digit yield) • Capital upside from future development options • Early move into a large emerging PBSA opportunity Achieveme
Slide 11: Focusing capital on our growth platforms
Focusing capital on our growth platforms Committing capital to our high conviction platforms For personal use only Tilt Longroad CDC Capital committed1: Project Phoebe (315MW) Capital committed2: ~$280 million Rio Bravo (238MW) ~$150 million 1 Value of new equity purchases under offer in 2018 by IFT
Slide 12: CDC exemplifies our growth infrastructure focus
CDC exemplifies our growth infrastructure focus Defensive infra characteristics + rapid growth in demand For personal use only Investment thesis (2016): • Rapid growth in data consumption and shift to outsourced data centres • Significant opportunities for expansion • Competitively advantaged to ser
Slide 13: Our portfolio transition is well progressed (Investor Day 2018)
Our portfolio transition is well progressed Portfolio as at Investor Day 2018 For personal use only CORE CASH GENERATIVE ASSETS Future retirement DMF assets and operational renewable assets Renewable Data Retirement & Emerging Energy Infrastructure Aged Care Platforms • Student accomm. • Social infr
Slide 14: Our portfolio transition is well progressed (post tightening)
Our portfolio transition is well progressed Portfolio post 2018-19 “tightening” For personal use only CORE CASH GENERATIVE ASSETS Future retirement DMF assets and operational renewable assets Renewable Data Retirement & Emerging Energy Infrastructure Aged Care Platforms 13 INFRATIL INVESTOR DAY 2019
Slide 15: Portfolio designed to deliver our return target
Portfolio designed to deliver our return target We remain committed to a ten year 11-15% TSR target For personal use only Infratil Expected Leverage Management Return to Portfolio Returns Assumption Cost Shareholders 8 – 10% 11% - 15% Core Per annum Lower Risk Per annum Average Debt 1% of assets Fun
Slide 16: Moving to a decluttered portfolio
Moving to a “decluttered” portfolio Smaller number of more substantial positions For personal use only FY18 Portfolio Post “Decluttering” 8% 6% 26% 29% 10% 18% 10% 19% 20% 17% 23% Trustpower CDC RetireAustralia ANU ASIP Wellington Airport Tilt Renewables NZ Bus Perth Energy Longroad Property & Other
Slide 17: Focusing on a few key sectors
Focusing on a few key sectors Renewable energy, data infrastructure and airports dominate For personal use only FY18 Portfolio Post “Decluttering” 8% 8% 6% 10% 39% 23% 23% 47% 48% 17% 19% 20% 20% Renewable Energy Data Infrastructure Transport Energy Airports Retirement Australian Social Infrastructu
Slide 18: Tapping growth opportunities beyond New Zealand
Tapping growth opportunities beyond New Zealand Current growth platforms are focusing investment offshore For personal use only FY18 Portfolio Post “Decluttering” 38% 50% 46% 61% NZ AUS USA 17 INFRATIL INVESTOR DAY 2019
Slide 19: Maintaining a balanced risk vs return profile
Maintaining a balanced risk vs return profile Evolving mix reflects strength of current development platforms For personal use only FY18 Portfolio Post “Decluttering” 7% 20% 30% 52% 63% 28% Core Core + Development 18 INFRATIL INVESTOR DAY 2019
Slide 20: Managing a dynamic portfolio
Managing a dynamic portfolio Key considerations shaping future portfolio mix For personal use only Current growth and development platforms • Options held across multiple markets • Infratil controls the rate and prioritisation of development spend • Development platforms “manufacture” core infra ass
Slide 21: Infratil Portfolio Strategy: key conclusions
Infratil Portfolio Strategy Key conclusions For personal use only Infratil’s portfolio strategy remains consistent • Cash generating core assets supporting reinvestment in high returning growth platforms We have executed on the plan presented at last year’s Investor Day • “Portfolio tightening” is w
Slide 22: Phillippa Harford: Performance & Outlook
Phillippa Harford Performance & For personal use only Outlook
Slide 23: Role of assets in the portfolio
Role of assets in the portfolio Development platforms supported by cash generating assets For personal use only Current portfolio Role • Important role in cash generating core and source of imputation credits • Defensive characteristics as an essential service • Reliable GDP+ earnings growth and str
Slide 24: Trustpower
Trustpower Generation outlook remains strong For personal use only • Solid generation outlook, supported by long-term trend towards electrification of transportation and industrial heat • Well placed to support the transition to a low-emissions and increased-renewable-electricity future • Differenti
Slide 25: Wellington International Airport
Wellington International Airport High quality asset with GDP+ growth and attractive reinvestment options For personal use only • $300 million five year investment programme completed in January 2019, with the opening of the Rydges hotel • Continues to provide reliable cashflows, supported by defensi
Slide 26: RetireAustralia
RetireAustralia Strong long-term investment thematic with near term choices For personal use only • Population growth in the aging demographic supports the long- term investment thematic • Sector headwinds and execution challenges have resulted in a slow down in unit resales • Continuing demand for
Slide 27: Phillippa Harford: Performance & Outlook
Phillippa Harford Performance & For personal use only Outlook
Slide 28: Asset valuation and drivers
Asset valuation and drivers Updated valuations reflect a high quality portfolio of assets For personal use only Current portfolio Equity Value (NZD) Basis of Valuation $1,125m • Market Price as at 8 April 2019 $750m - $800m • 16x Multiple of forecast EBITDA (Auckland Airport >20x) $290m - $320m • 1x
Slide 29: Asset valuation and drivers
Asset valuation and drivers Updated valuations reflect a high quality portfolio of assets For personal use only Current portfolio Equity Value (NZD) Basis of Valuation • Independent Valuation as at 31 March 2019 • Includes A$42 million Infratil equity contribution in December 2018 • FY19 EBITDA run-
Slide 30: 2019 Updated Guidance
2019 Updated Guidance Underlying EBITDAF guidance range revised to $535-$545 million For personal use only • Underlying EBITDAF guidance (year to 31 March 2019) revised to NZ$535-$545 million • Net increase in estimated contribution from CDC, primarily from receipt of CDC’s draft 31 March 2019 inves
Slide 31: 2019 Updated Guidance: performance fees
2019 Updated Guidance Performance fees – movements from 30 September accrual For personal use only September September March March $Millions Fair Value Accrued Independent Estimated Guide Fee Valuation Fee Canberra Data Centres 590 13.4 841 - 942 64 Longroad Energy 163 16.3 128 22 Tilt Renewables 47
Slide 32: 2020 Outlook
2020 Outlook Underlying EBITDAF guidance range set at $510-$540 million For personal use only FY20 Underlying EBITDAF guidance range from continuing operations set at $510-$540 million • Trustpower EBITDAF guidance of $205-$225 million • Tilt EBITDAF guidance of A$122-$129 million • CDC’s reported E
Slide 33: Moderate gearing and funds available
Moderate gearing and funds available Capital structure positioned to maintain flexibility for investment For personal use only ($Millions) March 2019 • Total Infratil bonds on issue were extended following the November 2018 maturity of Net bank debt (cash on hand) 45 $111 million, which was replaced
Slide 34: Jason Boyes: New investment
For personal use only Jason Boyes New investment
Slide 35: Future portfolio choices
Future portfolio choices Available capacity can be used to support existing platforms or create a new one For personal use only FY20F Portfolio Available capacity and forecast divestment proceeds Trustpower Wellington Airport RetireAustralia Other CDC Tilt Renewables Longroad 34 INFRATIL INVESTOR DA
Slide 36: Future portfolio choices: new investment opportunities
Future portfolio choices Looking for new investment opportunities For personal use only Investment opportunities Cash generating core Extending growth platforms New opportunities • A number of core assets • Significant development • Continuing to invest to realised underway in existing identify the
Slide 37: Replace and top-up the cash generating core
Replace and top-up the cash generating core Keeping the portfolio in balance For personal use only • Some core assets realised • Left to run, the portfolio will become underweight core • Imputation credits helpful, but not critical • Issues are finding value and managing portfolio complexity 36 INFR
Slide 38: Extending growth and development platforms
Extending growth and development platforms Optimising existing and new opportunities For personal use only • Development rate in existing growth and development platforms • Extending existing platforms to other jurisdictions • Actively seeking renewable energy development opportunities beyond the US
Slide 39: A case study for extending to other jurisdictions
A case study for extending to other jurisdictions Longroad Energy could be a template for future extensions For personal use only Investment thesis is apparent elsewhere too • Strong sector tailwinds • Aligned with existing operational capability • Jurisdictional diversification • Increased scale fo
Slide 40: Establishing a renewables platform in Europe
Establishing a renewables platform in Europe Rationale looks just as strong as Longroad For personal use only Opportunity in Europe looks attractive • If anything, stronger sector tailwinds than the US, with more regulatory support – Late 2018, IHS Markit forecast 140GW of renewables build in the EU
Slide 41: New opportunities
New opportunities Continuing to invest to identify the next platform For personal use only • Potentially long lead times, however, Infratil’s track record is built on being “ahead of the pack” • Looking beyond renewable energy to decarbonisation more broadly – Alternative fuels, carbon capture and s
Slide 42: Appendices
Appendices For personal use only INFRATIL INVESTOR DAY 2019
Slide 43: Canberra Data Centres Valuation
Canberra Data Centres Valuation Additional valuation information For personal use only Valuation Principles Key valuation metrics March 2019 • The fair market valuation of IFT’s 48.2% share of CDC as at 31 March 2019 is between NZ$841 – $942 million • The independent valuer adopted a Discounted Cash
Slide 44: Longroad Energy Valuation
Longroad Energy Valuation Additional valuation information For personal use only Valuation Principles • The fair market valuation of IFT’s share of Longroad as at 31 March 2019 is NZ$128 million Key valuation metrics March 2019 • The independent valuer adopted a sum-of-the parts valuation approach t
Slide 45: International Portfolio Incentive Fees
International Portfolio Incentive Fees Additional information For personal use only Overview • The International Portfolio comprises all Non-New Zealand Entities, being Infratil Limited (‘Infratil’) portfolio entities with more than 50% of their assets domiciled outside New Zealand. The Internationa
Slide 46: International Portfolio Incentive Fees
International Portfolio Incentive Fees Additional information For personal use only 1. International Portfolio Initial Incentive Fee • Every 31 March, it is necessary to determine whether Infratil has any International Investments which have been held continuously by the Company “from a date between
Slide 47: Infratil Investor Day: Canberra Data Centres
Infratil Investor Day For personal use only 2019
Slide 48: Agenda
Agenda › Macro Technology Trends › Eastern Creek Strategic Opportunities For personal use only › Global Data Centre Trends › Report Card – Strategic Goals › Government Hosting Strategy › Report Card – Ecosystem › ANZ Data Centre Trends › Report Card – Financials › Eastern Creek Acquisition › The Yea
Slide 49: Macro Technology Trends
Macro Technology Trends For personal use only › Everyday, increasing amounts Cloud migration of data is captured, stored and › Data and processes are increasingly migrating to cloud hosted environments › More Software and Apps than ever are being delivered from the cloud accessed › The boundaries of
Slide 50: Global Data Centre Trends
Global Data Centre Trends For personal use only › Large scale users are shaping Client Trends infrastructure and markets › Security, Business Continuity and Resilience remain the top client concerns › The biggest growth area is from hyperscale providers › Demand is for large, › Expect market consoli
Slide 51: Government Hosting Strategy
Government Hosting Strategy › Data Centres are recognised as A new Australian Whole-of-Government Hosting Strategy was released on 29 March 2019 For personal use only the cornerstones that safeguard The strategy provides a new framework that strengthens: government held data › data sovereignty, › su
Slide 52: ANZ Data Centre Trends
ANZ Data Centre Trends For personal use only › Strong demand driven by data › Increasing demand for high density, secure and resilient data centres growth and continued › Rising demand for flexibility; DC’s need capability to support cloud and high performance computing applications alongside client
Slide 53: Eastern Creek Acquisition
Eastern Creek Acquisition › CDC purchased a high quality, › 145,000sqm Data Centre campus is located For personal use only 36km west of Sydney’s CBD operational Data Centre with › Existing building is 6 years old with zero significant growth options shutdowns or failures › Two existing 6,000sqm data
Slide 54: Eastern Creek Strategic Opportunities
Eastern Creek Strategic Opportunities For personal use only › The campus meets hyperscale › Good Initial Income with low vacancy risk in DC1 – underwrites the purchase for early years needs; offering rapid initial › Upside – by upgrading the existing DC1 and leasing up the vacant racks deployment an
Slide 55: Report Card – Strategic Goals
Report Card – Strategic Goals For personal use only › Quality projects delivered on We said… We delivered… time and within budget ✓ Fyshwick 2 – Operational December 2018 Deliver Fyshwick 2 (21MW total load) and now ~50% contracted › The acquisition’s ability to ✓ Hume 3 fully leased value add excee
Slide 56: Report Card – Ecosystem
Report Card – Ecosystem We said… We delivered… For personal use only › Depth and breadth of ✓ ~24MW contracted with delivery underway Ecosystem expansion was We want to expand cloud ✓ ~24MW Reserved or First Right of even greater than we had Refusal (FROR) anticipated Organic growth from existing cl
Slide 57: Report Card – Financials
Report Card – Financials For personal use only › Growth rate has accelerated We said… We delivered… ✓ Achieved 35%+ growth; EBITDA run rate at › Business value increased in 22.5% Year-on-Year run rate growth 31 March 2019 of ~$90m last 12 months ✓ $300m deployed that includes the Sydney $100m Capex
Slide 58: The Year Ahead
The Year Ahead For personal use only › Execute and deliver both › Bring 24MW capacity to income production › Grow EBITDA run rate by over 50% Year-on-Year short and mid-term › Eastern Creek DC2 (10MW out of 13MW › Expand and secure income for Eastern Creek potential ICT load) to go live in 2019 › Es
Slide 59: Questions?
For personal use only Questions?
Slide 60: Investor Day: Longroad Energy
For personal use only INVESTOR DAY Longroad Energy April 10, 2019
Slide 61: Confidentiality
For personal use only CONFIDENTIALITY The information set forth in this document (including any written materials provided herewith) is proprietary and shall be maintained in strict confidence. Each recipient hereof acknowledges and agrees that the contents of this presentation (i) constitute propri
Slide 62: Agenda
For personal use only AGENDA • Introduction • Development Company • Operating Company • Services Company • Wrap-Up and Questions COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 3
Slide 63: Longroad Refresher
For personal use only LONGROAD REFRESHER • Focused on North American renewables (excluding residential) • Founded April 2016 and funded October 2016 Ownership • Flexible business model and capital focused on LONGROAD three segments: ENERGY PARTNERS – Development 20% 40% 40% – Operating Assets – Serv
Slide 64: Longroad: A Solid Start
For personal use only LONGROAD: A SOLID START Solid growth inception to 2019 growth plan in motion today Up to 800 MW of new development deals 1.2 GW acquired and developed ~$100 mm Longroad cash and LCs 1.4 GW services under contract Requiring $2 B of third party capital ~$2 B third party capital r
Slide 65: Business Model and Segments
For personal use only BUSINESS MODEL AND SEGMENTS • Develop and/or acquire and • Higher risk, higher return control high quality assets; DevCo opportunities optimize balance between hold and monetize • O&M, asset management, Flexible and remote operations • Acquire operating assets Capital • Adds va
Slide 66: High Velocity Development Capital
For personal use only HIGH VELOCITY DEVELOPMENT CAPITAL Cash Facility + Credit Facility LC capacity returned Return of Cost of capital capital and profits to shareholders, $150 net of write- mm $100 offs and mm overhead Commitments Cash Spend • Pre-financial close • Costs and • Development • PPA/int
Slide 67: Investment Thesis: Wall of Capital
For personal use only INVESTMENT THESIS: “WALL” OF CAPITAL Pension Funds & Insurance Private Equity & Infrastructure Funds Strategic Acquirers COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 8
Slide 68: Investment Thesis: Scale
For personal use only INVESTMENT THESIS: SCALE Utility Scale • New wind build 2021- 2030 = ~28 GW • New solar build 2021- 2030 = ~41 GW • ~ $60 B investment opportunity • Driven by retirements COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 9
Slide 69: Investment Thesis: Years of Growth
For personal use only INVESTMENT THESIS: 5 YEARS OF GROWTH US Renewable Market Size Near Term Opportunity Set (to 2023) • > 100 GW expected new build • > $85 B investment opportunity • Results in > 250 GW total installed capacity by end of 2023 • 2-4% market share = Longroad success COPYRIGHT © LONG
Slide 70: Key Driver: State Level Demand
For personal use only KEY DRIVER: STATE LEVEL DEMAND Source: EQ Research COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 11
Slide 71: Key Driver: Corporate PPA Demand
KEY DRIVER: CORPORATE PPA DEMAND 2018 use only Summary of 2018 Corporate PPAs • 57 deals • 70% wind, 30% solar Deal Size (MW) • 42% first time buyers For personal • 58% repeat buyers • 13 deals in TX • 13 in SPP • ~50% broker driven Source: Schneider Electric COPYRIGHT © LONGROAD ENERGY HOLDINGS, LL
Slide 72: Performance to Date: OpCo & DevCo
For personal use only PERFORMANCE TO DATE: OPCO & DEVCO Longroad: MW Acquired and Developed 1400 553 Project MW Status 1200 Federal Street Solar 299 Retained 1000 +81% YOY MN Wind 80 Retained 800 685 Milford Wind 306 Retained 600 Rio Wind 238 Sold 400 Phoebe Solar 315 Sold 200 Total 1,238 0 2016 201
Slide 73: Retained Assets: MW
For personal use only RETAINED ASSETS: 685 MW Milford Wind Minnesota Wind 306 MW 80 MW • Buy and hold • Buy and hold • Attractive service • Option to repower contract for Longroad • Long term option value given location Federal Street (Solar) 299 MW • Buy and hold • Optionality in lessor buyouts and
Slide 74: DevCo Assets: MW
For personal use only DEVCO ASSETS: 553 MW Rio Wind (Texas) Phoebe Solar (Texas) 238 MW 315 MWdc • LEH developed, financed, •LEH developed, financed, and sold; also providing and sold at FNTP; also construction management providing construction • LES to provide O&M, AM, management and ROC services •
Slide 75: 2019 DevCo Assets: MW
For personal use only 2019 DEVCO ASSETS: 800 MW MN Wind Repower Foxhound Solar 70 MW 108 MWdc • Lincoln and Pipestone • Halifax County, VA Counties, MN • FNTP Q4 2019 • FNTP Q3 2019 • COD Q4 2020 • COD Q3 2020 Prospero Prospero I Solar I Solar El Campo Wind 379379 MWMW dc dc 243 MW • Andrews • Andre
Slide 76: Expected Performance: OpCo & DevCo
For personal use only EXPECTED PERFORMANCE: OPCO & DEVCO Longroad: MW Acquired and Developed 2,500 EOY 2019 Total > 2.0 GW Foxhound Solar • Objective to achieve 2,000 MN Wind financial closing on four El Campo Wind additional development +45% YOY 1,500 deals (800 MW) Prospero I Solar – Development a
Slide 77: Wind Safe Harbor Strategy
For personal use only WIND SAFE HARBOR STRATEGY • Rio Wind – 238 MW – FNTP Q2 2018 $44 mm safe – COD Q2 2019 harbor • El Campo investment Catalyzed > $75~95 mm – 242 MW in Vestas gross profit plus capital – FNTP Q2 2019 (est.) components return ($44 mm) – COD Q2 2020 (est.) (December 2016) • MN Wind
Slide 78: Comprehensive End to End Services
For personal use only COMPREHENSIVE END TO END SERVICES Asset Balance of Plant 24/7/365 & End-to-end platform and Management Services Analytics internal capabilities designed • Commercial • Total project • 24/7/365 remote to maximize long-term asset optimization and value creation oversight monitori
Slide 79: Performance to Date: Services
For personal use only PERFORMANCE TO DATE: SERVICES MW Under Contract ~1.5 GW in 1,600 2 years • Longroad Energy Services 1,400 Third Party Third Party Wind (Rio) • 1,476 MW to EOY 2018 1,200 Solar 1,000 Third Party – 685 MW Longroad owned Wind 800 – 791 MW third party 600 Longroad Owned – Milford W
Slide 80: Expected Performance: Services
For personal use only EXPECTED PERFORMANCE: SERVICES MW Under Contract 2,000 Total 1.7 GW EOY 2019 1,800 +8% YOY 1,600 (Advanced Third Party • 256 MW new growth in Discussions) Wind Third Party advanced discussions 1,400 Solar 1,200 – Project sales could 1,000 bring further growth 800 – Pursuit of o
Slide 81: Performance to Date: Capital Raising
For personal use only PERFORMANCE TO DATE: CAPITAL RAISING Lenders Third Party Capital Raising Inception to 3/31/2019 Tax Equity ($ mm) 1,800 1,600 1,400 1,200 1,000 800 1,702 M&A 600 400 200 307 - Debt, Tax Equity, M&A LCs COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 22
Slide 82: Performance to Date: Financial
For personal use only PERFORMANCE TO DATE: FINANCIAL $77 mm realized profit Net $76 mm invested in the business Realized profit Capital invested Capital returned Note: Excludes LES COPYRIGHT © LONGROAD ENERGY HOLDINGS, LLC. STRICTLY CONFIDENTIAL. 23
Slide 83: Expected Performance: Financial
For personal use only EXPECTED PERFORMANCE: FINANCIAL Unrealized >$200 mm of realized plus Projected profit on unrealized 2019 cumulative portfolio - High profit Realized (3/31/2019) Projected profit on Unrealized 2019 profit on portfolio - closed deals Projected Low Unrealized - High Projected capi
Slide 84: Post 2019
For personal use only POST 2019 Growth expected to • Well positioned with our solar pipeline (> 7 GW) remain, especially in solar • Evaluating panel supply and safe harbor options out to 2023 similar to wind • Insolated Longroad from near term tariff and trade Tariffs and Trade Disputes dispute expo
Slide 85: Wrap Up
For personal use only WRAP UP • Real momentum and traction with solid deal flow, DevCo growth, and attractive returns Flexible Capital • Provides incremental • Continual flow of M&A growth and adds scale to opportunities plus OpCo Services the overall business and is improving the financial an impor
Slide 86: Thank You
For personal use only THANK YOU
Slide 87: Tilt Renewables: Infratil Investor Day
For personal use only Tilt Renewables Infratil Investor Day 10 April 2019
Slide 88: Agenda
AGENDA For personal use only • 12 month highlights • Delivering the strategy • Current company position • Look to the future
Slide 89: Overall Highlights for FY2019
Overall Highlights for FY2019 Operational Shareholder Pipeline For personal use only Performance Value Growth Enhancement • Fleet availability 96.7% (11 • Salt Creek 54MW delivered • Liverpool up to 1GW months) (A$100M) • Waverley now 130MW • Full year production >2TWh • Dundonnell 336MW in • Consen
Slide 90: Operational Highlights for FY2019
Operational Highlights for FY2019 TLT portfolio production (TWh) 2.5 Actual FY17 Actual FY18 Actual FY19 Soft Q4 wind brings full year production back to “P50” 2.0 For personal use only • 9 months production to 31 December 2018 was 1.6 TWh 1.5 • Soft March quarter wind conditions in AU and NZ 1.0 0.
Slide 91: Strategy Execution – Setting Up Our Future
Strategy Execution – Setting Up Our Future • Salt Creek delivered, on time and budget Revenue Contract Mix (incl. Dundonnell) For personal use only • Dundonnell contracted at 87% - maintains room 4,000 Portfolio generation GWh per annum Existing Contracts for further merchant exposure in portfolio N
Slide 92: Operational and Development Projects - Geographical View
Operational and Development Projects - Geographical View 636 MW operational across 322 turbines → 973 MW with Dundonnell across 402 turbines For personal use only 0.7GW pipe in QLD 1.3GW pipe in NSW 06
Slide 93: Summarised – At Demerger vs Today
Summarised Company Update – At Demerger vs Today Demerger (October 2016) Today (April 2019) For personal use only 2.5 years 2,800 A$660M new 4,400 MW investment MW committed Renewables capacity MW Demerger Today Key progress (October 2016) (April 2019) Operational 582 636 2,300MW+ Salt Creek WF deli
Slide 94: The Future for TLT?
For personal use only The Future for TLT? 08
Slide 95: Operational Outlook for FY2020
Operational Outlook for FY2020 Area Relative to FY19 FY2020 earnings reflects portfolio before Dundonnell P50 assumed, Salt Creek full year For personal use only Production • Full 12 months of Salt Creek under Meridian PPA offset by some SA curtailment • P50 portfolio production circa 2 TWh in l
Slide 96: Long-term Fundamentals for Australian Renewables Remain Encouraging
Long-term Fundamentals for Australian Renewables Remain Encouraging • Decarbonisation of Australia’s electricity market will continue over the next 20 – 30 years, as coal fired power stations reach ‘end of life’ and are replaced by lower cost renewables For personal use only • Private sector investm
Slide 97: Energy Transition Underway in Australia
Energy Transition Underway in Australia ~35 GW ‘Grid Scale’ For personal use only Relative change in NEM capacity mix Renewables Opportunity 011 Source: AEMO Integrated System Plan – Generation mix forecasts – neutral case
Slide 98: Energy Mix Change Depends on the State
Energy Mix Change Depends on the State Key Points For personal use only • Overall growth in demand • Move away from coal • Utility storage plays a role, especially in heavy solar penetration areas • Transmission system must adapt Generation Mix Black coal Brown Coal Gas/Liquid/Biomass Hydro Wind Uti
Slide 99: Australian Market - Short Term Pain is Real
Australian Market - Short Term Pain is Real Policy Technical Commercial For personal use only Energy & Climate will be Traditional PPA market is fairly Transmission system a huge stagnant, tenors tightening Federal election issues constraint (connection, losses and curtailment) Government CfDs are l
Slide 100: Strategic Considerations: Australian Market
Appropriate scale in 1 – 5 Strategic Considerations years? Short term For personal use only Access to capability headwinds Australian Market gaps (build or due to grid buy) and politics Patience is required Technology Sources of flexibility debt and (solar, wind, equity (cost storage) and flexibilit
Slide 101: Strategic Considerations: New Zealand Market
Market activity is increasing as supply tightens Strategic Considerations For personal use only Operation of TLT is the only older assets on credible New Zealand Market tough sites is a independent key skill developer in NZ Opportunity will knock Growing our pipeline of Government quality options– .
Slide 102: Summary
Summary • Strategy of securing a range of development options and For personal use only delivering into opportunities, is being successfully executed • Immediate focus is on Dundonnell delivery, the performance of the operational business and the next growth options • Core Australia investment thesi
Slide 103: Thank you
For personal use only Thank you
Slide 104: Disclaimer
Disclaimer For personal use only This presentation is issued by Tilt Renewables Limited. While all reasonable care has been taken in the preparation of this presentation, Tilt Renewables Limited and its related entities, directors, officers and employees (collectively “Tilt Renewables”) do not accep