Agl Energy Limited · ASX:AGL
Agl Energy — Non-Deal Roadshow (April 2009)
43 slides from Agl Energy's roadshow presentation, Apr 27, 2009
Slide 1: ASX statement
AGL Energy Limited Locked Bag 1837 Level 22, 101 Miller St T: +61 2 9921 2999 ABN: 74 115 061 375 St Leonards NSW 2065 North Sydney NSW 2060 F: +61 2 9921 2552 For personal use only AUSTRALIA AUSTRALIA www.agl.com.au ASX statement 27 April 2009 Attached is a presentation to be made by Managing Direc
Slide 2: Asia Investor Roadshow April 2009
AGL Energy Limited For personal use only …Australia’s largest integrated renewable energy company... Asia Investor Roadshow April 2009
Slide 3: Disclaimer
2 Disclaimer For personal use only The information in this presentation: › Is not an offer or recommendation to purchase or subscribe for securities in AGL Energy Limited or to retain any securities currently held. › Does not take into account the potential and current individual investment objectiv
Slide 4: Agenda
3 Agenda For personal use only › About AGL Energy – Background, Strategy & 1H09 Result Overview › Australian Energy Landscape & Renewable Policies › AGL Renewable Positioning & Portfolio Opportunities › Outlook & Way Forward › Supplementary Information » Asia Investor Roadshow » April 2009 » AGL Ext
Slide 5: About AGL Energy
4 For personal use only About AGL Energy » Asia Investor Roadshow » April 2009 » AGL External
Slide 6: About AGL Energy
5 About AGL Energy For personal use only Australia’s largest integrated renewable energy company. › Australia’s largest private owner, operator & developer of renewable generation › Australia's largest natural gas & electricity customer base › A world class, scaleable customer management & billing s
Slide 7: AGL Energy Today – Asset Profile
6 AGL Energy Today – Asset Profile For personal use only » Asia Investor Roadshow » April 2009 » AGL External
Slide 8: The Integrated Strategy
7 The Integrated Strategy For personal use only Balancing risk between upstream supply, retail markets & providing access to multiple profit pools. UPSTREAM SUPPLY (Core) Capturing value & growth Capturing value & growth Upstream Gas: Gas Production Renewable Generation Thermal Generation Generation
Slide 9: The Integrated Strategy – In Action
8 The Integrated Strategy – In Action Divesting non core assets, acquiring & creating long term growth opportunities. For personal use only » Asia Investor Roadshow » April 2009 » AGL External
Slide 10: 1H09 Result Highlights
9 1H09 Result Highlights Delivering on strategy, creating value & long term growth. For personal use only › Revenue: $2,977.7m, Ï 5.1% FINANCIAL › Operating EBIT from continuing operations: $322.7m, Ï 10.2% › Statutory NPAT: $1,654.8m › Underlying NPAT: $192.5m, Ï 5.3% › Interim dividend 26 cps, ful
Slide 11: 1H09 Profit & Loss
10 1H09 Profit & Loss (excluding significant items & fair value movements) Result in line with full year guidance. For personal use only 6 months to 31 Dec 2008 31 Dec 2007 Change $m Revenue 2,977.7 2,833.8 5.1% Operating EBITDA 443.9 471.4 (5.8%) Operating EBIT Retail 145.7 134.8 8.1% Merchant 211.
Slide 12: Disciplined Capital Management
11 Disciplined Capital Management For personal use only Well positioned for future growth opportunities. › October 09 maturities covered by cash reserves › Immediate debt capacity of ~A$1.2b to A$1.8b › Reinstated BBB stable credit rating Facilities @ 20 Feb 2009 $m Limit Usage Available Maturity Cu
Slide 13: Defensive Earnings Profile
12 Defensive Earnings Profile Robust earnings during deteriorating economic conditions. For personal use only › Majority of electricity & gas gross margin is derived from mass market customer base which historically has had limited volume impacts during economic downturns Electricity Gross Margin Co
Slide 14: Upstream Gas
13 Upstream Gas For personal use only Strategic acquisitions to deliver upside growth & optionality. › Recent transactions deliver access & control over additional certified 2P reserves with further, material upside potential & optionality: » Investment in Galilee Basin CSG production pilot & explor
Slide 15: Retail – Phoenix (SAP) Business Transformation
14 Retail – Phoenix (SAP) Business Transformation Capturing Benefits. For personal use only Cumulative EBIT Benefits $60m › Final core retail migration to SAP (Phoenix) completed Nov 2008: $25m $25m » ~93% of total customer base now serviced out of $12m FY10 SAP FY08 FY09 FY07 › Business Transformat
Slide 16: Australian Energy Landscape & Renewable Policies
15 For personal use only Australian Energy Landscape & Renewable Policies » Asia Investor Roadshow » April 2009 » AGL External
Slide 17: Australia's National Electricity Market (NEM)
16 Australia’s National Electricity Market (NEM) For personal use only › National Electricity Market (NEM) began operating as a wholesale market for supply of electricity to retailers and end-users in 1998 Queensland › World’s longest interconnected power system – ~51,700GWh 4,000 km (2,500 miles) A
Slide 18: Australian NEM Generation Mix
17 Australian NEM Generation Mix For personal use only Coal dominates the current Australian landscape. Generation Capacity: ~43,000 MW Generation Output: ~210,000 GWh Gas Gas 15% Wind 8% 1% Hydro Wind 6% 2% Oil 1% Coal Hydro 65% 17% Oil Coal 1% 84% » Asia Investor Roadshow » April 2009 » AGL Extern
Slide 19: Proposed Renewable Legislative Changes
18 Proposed Renewable Legislative Changes. For personal use only Federal Government to legislate two schemes – Expanded Renewable Energy Target (RET) & Carbon Pollution Reduction Scheme (CPRS). Expanded RET scheme (Expanded RET previously called MRET) › Target to increase from 9,500 GWh in 2010 to 4
Slide 20: Required Renewables Growth
19 Required Renewables Growth For personal use only Expanded Renewable Energy Target (RET) Drives Growth. 50000 Exisiting MRET Expanded RET 45000 › New federal Government Policy – by 40000 2020 an additional 35,500 GWh p.a. of renewable energy required to meet the 35000 target of 45,000 GWh p.a. 300
Slide 21: AGL Renewable Positioning and Portfolio Opportunities
20 For personal use only AGL Renewable Positioning and Portfolio Opportunities » Asia Investor Roadshow » April 2009 » AGL External
Slide 22: Renewables & Carbon: First Mover Advantage
21 Renewables & Carbon: First Mover Advantage For personal use only AGL’s strategy benefits from recent Government announcements. » Asia Investor Roadshow » April 2009 » AGL External
Slide 23: Australia - World Class Wind Resource
22 Australia - World Class Wind Resource For personal use only Average wind speeds (metres per second) › Wind resource is best in Tasmania and areas in Western Australia, South Australia and Victoria › NSW, Queensland and the Northern Territory have limited large scale wind potential › The best wind
Slide 24: Renewable Generation – Growth Pipeline
23 Renewable Generation – Growth Pipeline Developing a portfolio with strategic depth and optionality. For personal use only › Probable Projects: Projects which are under development with an approved budget and pending final investment decision › Possible Projects: Projects where AGL holds rights to
Slide 25: Gas Generation – Growth Pipeline
24 Gas Generation – Growth Pipeline Developing a portfolio with strategic depth and optionality. For personal use only › Probable Projects: Projects which are under development with an approved budget and pending final investment decision › Possible Projects: Projects where AGL holds rights to the s
Slide 26: Upstream Gas – Growth Pipeline
25 Upstream Gas – Growth Pipeline Developing a portfolio with strategic depth, duration and optionality. For personal use only » Asia Investor Roadshow » April 2009 » AGL External
Slide 27: Upstream Gas – Delivering Duration & Flexibility
26 Upstream Gas – Delivering Duration & Flexibility For personal use only Increasing self supply. › Existing portfolio flexibility allows timely development of gas production projects › AGL will continue to be a significant contractor of wholesale gas › Anticipate recent acquisitions of Gloucester,
Slide 28: Outlook & Way Forward
27 For personal use only Outlook & Way Forward » Asia Investor Roadshow » April 2009 » AGL External
Slide 29: Financial Outlook & Strategic Priorities
28 Financial Outlook & Strategic Priorities For personal use only › Reconfirm FY09 EBITDA guidance of $775 million to $820 million › Reconfirm FY09 underlying NPAT guidance of $370 million to $400 million: Financial » Excludes SunGas & Powerdirect customer amortisation charge of $18.1m outlook › Rec
Slide 30: Further Information / Contacts
29 Further Information / Contacts For personal use only A range of information on AGL Energy Limited including ASX & Media Releases, Presentations, Financial Results, Annual Reports and Sustainability Reports is available from our website: www.agl.com.au alternatively, contact: Graeme Thompson Head
Slide 31: Supplementary Information
30 For personal use only Supplementary Information » Asia Investor Roadshow » April 2009 » AGL External
Slide 32: Significant Items
31 Significant Items Asset sales deliver substantial profits. For personal use only 6 months to 31 Dec 2008 Pre Tax Tax After Tax $m Divestment of PNG 926.6 (36.0) 890.6 Divestment of QGC 754.4 (247.5) 506.9 Divestment of Elgas 149.9 (29.0) 120.9 Divestment of North Queensland Pipeline 23.1 (9.5) 13
Slide 33: Balance Sheet
32 Balance Sheet For personal use only As at 31 Dec 2008 31 Dec 2007 $m Current assets 3,932.9 3,576.8 PPE and oil & gas assets 2,561.9 2,331.4 Other non current assets 3,752.6 4,291.0 Total Assets 10,247.4 10,199.2 Current liabilities 1,609.1 2,053.4 Total debt 1,756.0 2,390.9 Other non current lia
Slide 34: Operating Cash Flow Summary
33 Operating Cash Flow Summary Continued focus and improvement. For personal use only 6 months to 31 Dec 2008 31 Dec 2007 $m EBITDA (before significant items) 443.9 471.4 Equity accounted associates & joint ventures (net of dividends received) 4.6 (6.9) Net finance costs (69.1) (91.9) Tax refunded (
Slide 35: Generation – Building a Balanced Portfolio
34 Generation – Building a Balanced Portfolio Diversity mitigates market risks & benefits from a carbon constrained For personal use only future. › Diversity of fuel type - renewables, gas & coal › Diversity of generation type – base, intermediate & peak › Diversity of geography – across all NEM sta
Slide 36: Renewable Energy Certificates (RECs)
35 Renewable Energy Certificates (RECs) For personal use only Expanded RET to put upward pressure on pricing $80.00 SPOT 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 $70.00 $60.00 $50.00 $/REC $40.00 $30.00 $20.00 $10.00 3 4 5 6 7 8 03 04 05 06 07 08 09 -0 -0 -0 -0 -0 -0 r- r- r- r- r- r- ct ct
Slide 37: Electricity Flat Forward Price Curve
36 Electricity Flat Forward Price Curve (Calendar year contract) For personal use only Carbon, coal pricing and electricity demand growth to drive pricing. $ MW/h 100 NSW QLD SA VIC 90 80 70 60 50 40 30 20 10 0 09 3 4 4 5 5 6 6 7 7 8 8 -0 r-0 -0 r-0 -0 r-0 -0 r-0 -0 r-0 -0 b- ct ct ct ct ct ct Ap Ap
Slide 38: Australian NEM Generation Demand Growth
37 Australian NEM Generation Demand Growth For personal use only Average growth in peak demand and total load of ~3% p.a. Peak Demand Total Load 40,000 250,000 35,000 200,000 30,000 25,000 GWhs MWs 150,000 20,000 100,000 15,000 10,000 50,000 5,000 - - 99 00 01 02 03 04 05 06 07 99 00 01 02 03 04 05
Slide 39: Current Renewable Legislative Landscape
38 Current Renewable Legislative Landscape. For personal use only Disparate collection of state and federal based policies. › The Mandatory Renewable Energy Target (MRET) requires all retailers (& wholesale purchasers) to purchase set proportion of their energy from ‘new renewable’ generation (post
Slide 40: Carbon Pollution Reduction Scheme – White Paper
39 Carbon Pollution Reduction Scheme – White Paper AGL industry leading generation portfolio to benefit. For personal use only Indicative AGL financial outcomes under CPRS1,2 $350 › All indicators suggest measured start to Carbon Pollution Reduction Scheme (CPRS) in $300 2010 Earnings change NPV to
Slide 41: Carbon Pollution Reduction Scheme - White Paper
40 Carbon Pollution Reduction Scheme - White Paper AGL industry leading generation portfolio to benefit. For personal use only AGL Power Station Regional NPV Uplift Region Stations Intensity Intensity (to 2020) Queensland Yabulu 0.5 1.040 Oakey 0.7 New South Wales - - 1.062 Victoria Somerton 0.7 1.3
Slide 42: East Coast Gas - Substantial Reserves & Duration
41 East Coast Gas - Substantial Reserves & Duration Security of supply given quantum of ongoing Eastern Australia gas reserves. For personal use only 9,530 PJ CONTRACTED RESERVES 490 16,580 PJ 460 UNCONTRACTED RESERVES N. QLD – 950 Eastern Australia 2P gas reserves and 42,650 PJ CONTINGENT RESOURCES
Slide 43: Upstream Gas Interests – Permit Details
42 Upstream Gas Interests – Permit Details For personal use only Permits Working Basin Project Exploration Production (Area km2) (Area km2) Interest PEL 2 (6,696) - 100% PEL 5 (400) - 100% - PPL 1 (48) 100% Camden Gas Project - PPL 2 (1) 100% (Post SGL takeover) - PPL 4 (55) 100% Sydney - PPL 5 (103