Good Energy — FY2017 Earnings Presentation
27 slides from Good Energy's earnings presentation, Mar 21, 2018
Slide 1: Good Energy Group plc 2017 Full Year Results
Good Energy Group plc 2017 Full Year Results 21 March 2018 Good Energy ©2017 – Private & confidential 1 21 March 2018
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an invitation to underwrite, subscribe for, acquire, dispose of or otherwise deal in any shares or other securities of Good Energy Group plc (the Company) or otherwise to engage in investment activity for the purposes of section 21 of the Financial Se
Slide 3: Management team
Management team Juliet Davenport – CEO Denise Cockrem – CFO Rupert Sanderson – FD Juliet is the Denise was Rupert will be founder and appointed appointed FD CEO of Good CFO in May effective 1 April Energy, one of 2014. 2018. the UK’s first entirely renewable Her previous electricity His previous exp
Slide 4: Today's agenda
Today’s agenda 1. Highlights Juliet Davenport, CEO 2. Financial performance Denise Cockrem, CFO 3. Strategic and operational performance Juliet Davenport, CEO 4. Q&A Juliet Davenport, CEO Denise Cockrem, CFO Rupert Sanderson, FD Good Energy ©2017 – Private & confidential 4 21 March 2018
Slide 5: Highlights
Highlights Led by Juliet Davenport Chief Executive Officer Good Energy ©2017 – Private & confidential 5 21 March 2018
Slide 6: Responding to a market in transition
Responding to a market in transition Shifting away from Shifting to growth Investing in focus on retail in business supply future value for supply and FIT services energy services • Traditionally focused on • Focus on business supply • Domestic margin retail supply market market with strong volume i
Slide 7: Highlights of 2017
Highlights of 2017 +16.6% +4.3% YoY Increased customers in B2B and FIT YoY Revenue driven by supply volume services with lower retail growth +8.2% -£1.3m Shift in margin mix from B2C to B2B in Includes £1.1m of restructuring and YoY YoY the supply business strategic consultancy investment Good Energ
Slide 8: Financial Results
Financial Results Led by Denise Cockrem Chief Financial Officer Good Energy ©2017 – Private & confidential 8 21 March 2018
Slide 9: Resilient performance in a challenging market
Resilient performance in a challenging market Majority of Supply profit from B2B and FIT 2017 2017 2016 % change Revenue + 16.5% 2017 Year end £000s continued Discontinued reported continued continued • Driven by B2B supply volumes operations operations operations operations +46% Revenue 104,509 17
Slide 10: Profit bridge 2016 - 2017
Profit bridge 2016 - 2017 Build Build • Volume growth driven by B2B volumes offset by margin mix Economise Invest and delayed price rise Economise • F4G transformation costs offset by realisation of profits from asset development Invest • Investment in capabilities to support strategic development G
Slide 11: Segmentation performance
Segmentation performance Majority of Supply profit from B2B and FIT Supply Year end £m 2017 2016 2015 Consolidated - continued operations • 2017 EBITDA delivered by Revenue 104.4 89.7 64.3 B2B and FIT services Gross Profit Margin 28% 30% 33% EBITDA 9.9 10.1 7.3 • Shift to lower margin B2B EBITDA Mar
Slide 12: Increased collection in 2018
Increased collection in 2018 CIS Billing • New system was implemented to provide scale and digital platform for future growth, including being Smart enabled • Delays in billing lead to accrued income peaking at c. £10m higher in June 2017, with c. 60% of customers billed • By December 2017, accrued
Slide 13: Solid and improving cash flow despite billing issues
Solid and improving cash flow despite billing issues 2016-2017 CIS Billing Year end £000s 2017 2016 2015 change • Billing issues have Operational cashflow before working capital 5,132 10,356 7,341 impacted 2017 cash flow Working capital movement (5,106) 300 (5,751) Cash generated from operations 27
Slide 14: Net Debt & Capital Structure
Net Debt & Capital Structure Funding update 2017 Borrowings • Completion of Good Energy Bond I and launch of Bond II • Bonds together raising £25m gross • Good Energy Bond I redeemed in 2018 • £3.6m continuing in Good Energy Bond 1 £40.2m £25.0 • £4.2m due to be repaid in March 2018 • Will lower fut
Slide 15: 2018 expectations
2018 expectations Build on areas of Returns and Economise success investment • Continued growth in B2B • F4G growth operating model • Repayment of £4.3m of GEB I and FIT already delivered annualised will reduce interest costs by savings of £1m £0.3m • Discontinued operations – explore options for th
Slide 16: Market detail & outlook
Market detail & outlook Led by Juliet Davenport Chief Executive Officer Good Energy ©2017 – Private & confidential 16 21 March 2018
Slide 17: Building for the future
Building for the future Zero marginal This has led to Energy market is cost fuels have significant low in transition reduced the value cost competition of energy in retail Decentralised Energy Good Energy is an Future value will be in services has huge market established player in the energy service
Slide 18: How will we get there?
How will we get there? Build on Economise Invest Success Grow our core business A F4G operating model Generate future business opportunities • Retain existing domestic • Lean the existing business • New Service Development customers model to improve margins • Digital platform to deliver • Upskill te
Slide 19: Drivers of market growth
Drivers of market growth • Increased support for EV • Greater than 35% Renewable networks and storage Increasing capacity growth since 2014 Expanding • Green transition and capacity of • Decreasing cost of Policy & infrastructure part of the renewables generation and storage Regulation Industrial St
Slide 20: Delivering our competitive advantage
Delivering our competitive advantage Leveraging our leadership in Green technology • Market leader for over 20 • Green price war in the retail years in Green energy sector Leaders in delivering • Experience in supplying, Competitive • Changes in the wholesale developing and trading 100% landscape ma
Slide 21: Vision for the Customer
Vision for the Customer The future of the business Environment Security Value Investing in energy balancing Battery storage combined Both solar and storage and renewable generation in with renewable energy or suggest that these will be households and businesses standalone will be able to value enhan
Slide 22: Investing in strategic initiatives
Investing in strategic initiatives The future of the business R&D projects Pilot New services with projects development partners • Exploring Vehicle to grid • Launch trial in Q4 2017 with • Working strongly with third solutions New Motion for electric parties in partnership • Partnership with Europe
Slide 23: Well positioned for future growth
Well positioned for future growth • Building on the business supply and FIT business that will grow profitability providing, a sustainable green yield long term • 2017 is the first year of transition for the Group as we evolve to focus on energy services, achieved by: • Build will focus on business
Slide 24: Appendix
Appendix Good Energy ©2017 – Private & confidential 24 21 March 2018
Slide 25: Development – the story so far
Development – the story so far Successfully achieving £23m from asset sales over 5 years 2013 2014 2017 £23.1m Proceeds of sale of developed sites over 5 years Homeland West Oaklands Newton Brynwhilach £8.2m Rose Farm Cottage Raynham Downs 2018 Profit from site sales Dec ’13 Dec ‘13 Nov ‘14 Jan ‘17
Slide 26: 2017 Highlights
2017 Highlights Well positioned for future growth FiT Services Supply - Business Supply - Retail • 18% of market share today • Strong volume growth in • New customer system with 1% growth of market 2017 off the back of low implemented to deliver on share market penetration SMART metering, and better
Slide 27: Continuing to invest for growth
Continuing to invest for growth Ensuring the business is will positioned to maximise future growth potential Data Digital Brand • Investment in digital and • New customer focused app • Customer experience to technology team map the Brand • Business portal for SME • Data architecture and customers •