Drax Group Plc · LSE:DRX
Drax — Investor Day (October 2013)
13 slides from Drax's investor day presentation, Oct 17, 2013
Slide 1: Haven Power – Capital Markets Day
Haven Power Capital Markets Day 17 October 2013
Slide 2: Agenda
Agenda Peter Bennell – CEO Haven Power Background and History Management Team The Electricity Market Role of Haven Delivering Growth Credit Management Drax Group plc 2
Slide 3: Background and History
Background and History Haven founded in 2006 • Strong management team, 140+ years energy experience • Initial shareholding 76:24 Carron Energy / Welsh Power: management People Power • Initial focus was SME(1) electricity – traditionally not well served by the Big Six • Space in the market for a good
Slide 4: Management Team
Management Team Strength in depth Norweb Peter Bennell Eastern Electricity CEO TXU Independent consultant 35 years electricity / gas experience John Talbot Richard Robey David Antony Badger Rachel Kemsley Natalie Keogh Power Crossman Sales & Supplier Finance Operations Purchasing & Marketing IT Mana
Slide 5: The Electricity Market
The Electricity Market c.£30bn market; c.300TWh Electricity Market by Volume Domestic SME I&C Margins ~ 5% ~1% ~0.25% Simple Simple Complex Evergreen Fixed-term Fixed-term Products Some fixed- Some Some term evergreen rolling Domestic Consultants SME Online Brokers I&C Sales Brokers Telesales Telesa
Slide 6: Role of Haven
Role of Haven Haven’s value to Drax Committed Book – Historical Growth 20 Access to the business electricity market Contracted Volume at NBP (TWh) 18 • I&C customers 16 14 • SME customers 12 • c.190TWh market 10 8 6 Credit-efficient route to market 4 • No collateral support required for retail contr
Slide 7: Role of Haven – Scale of operations
Role of Haven Scale of operations Power Sales Currently targeting 12–15 TWh business 10 • 2–3 TWh in SME Volume at NBP (TWh) 8 • 10–12 TWh in I&C 6 Haven has met its RO(1) entirely through 4 ROCs since Drax acquisition • RO set annually by DECC 2 • RO is currently c.21% of power supplied by 0 Haven
Slide 8: Delivering Growth – Market Presence
Delivering Growth – Market Presence Establishing the brand Primarily to support I&C sales • ‘No-one ever got fired for buying IBM’ • Competitors very entrenched • Haven had low recognition amongst target customer groups • Drax / Haven operate as one business Targeted low cost marketing • Lever Drax
Slide 9: Delivering Growth – Products and Sales
Delivering Growth – Products and Sales Active in both SME and I&C markets Contract Type Energy Fixed Fixed Fixed Pass Through Market-leading product range Distribution Inc from Threshold Fixed Pass Through Pass Through • Standard Transmission Inc from Threshold Fixed Pass Through Pass Through • Assu
Slide 10: Delivering Growth – Serving Customers
Delivering Growth – Serving Customers All Haven customers have a named account manager • Direct dial telephone and email address • Account manager is responsible for the customer • Combined trading desk for Flex customers Strong focus on cash • Daily cash meetings • Bad debt experience remains low •
Slide 11: Credit Management
Credit Management Concentration of Credit Check Outcomes - I&C Prospects Big pool of quality customers • Can deliver required volume without reducing credit Number of Credit Checks with this 100 thresholds 80 • Plenty of headroom in current thresholds 60 score Credit management critical 40 • Strong
Slide 12: Summary
Summary Credit-efficient route to market Substantial sales growth delivered in a tough market Capability to flex business model to optimise value to Group Can deliver against both RO and CfD outcomes Good track record on systems delivery Capability to support 12–15TWh business Efficient route to mar
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