Slide 1: Financial and Operational Results FY2023
Vi) vector Financial and Operational Results FULL YEAR ENDED 30 JUNE 2023 25 AUGUST 2023
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements. Forward-looking statements often include words such as “anticipates”, “estimates”, “expects”, “intends”, “plans”, “believes” and similar words in connection with discussions of future operating or financial performance. The forward-lo
Slide 3: Agenda
Agenda • Overview of Performance • FY2023 Highlights • Financial Performance • FY2023 Business Overview and Segment Performance • Outlook • Q&A 3
Slide 4: Overview of Performance
OVERVIEW OF PERFORMANCE 4
Slide 5: Overview of financial performance
Overview of financial performance FY2023 FINANCIAL PERFORMANCE ($M) FY2022 FY2023 1,715.8 1,603.2 1,451.1 1,339.0 1,192.3 1,103.4 700.4 545.9 510.0 523.3 512.7 518.8 517.1 389.2 336.3 335.1 235.6 258.8 222.5 1 173.7 188.2 156.7 187.7 160.9 167.5 102.5 112.6 58.4 Continued Discontinued Combined Conti
Slide 6: Dividend
Dividend • Final ordinary dividend of 8.50 cents Dividend (cents per share) per share and special dividend of 5.50 cents per share 5.50 • Taking total unimputed final dividend to 14.00 cents per share • Dividend record date of 6 8.00 8.25 8.25 8.50 8.50 8.50 8.00 8.00 7.75 8.00 7.75 7.50 7.50 Septem
Slide 7: FY2023 Highlights
FY2023 HIGHLIGHTS 7
Slide 8: FY23 Highlights
FY23 Highlights $1.75B Taskforce for Climate- Electrification and related Financial Sale price for 50% interest in Vector Metering. QIC the climate change Disclosures Report latest example of Vector choosing to grow or partner resilience published with an external Driving a need for significant http
Slide 9: Financial Performance
FINANCIAL PERFORMANCE 9
Slide 10: Earnings from continuing and discontinued operations up $13.3m or 2.6%
Earnings from both continuing and discontinued operations are up $13.3m or 2.6% Continuing Operations Discontinued Operations FY23 ADJUSTED EBITDA MOVEMENT ($M) FY23 ADJUSTED EBITDA MOVEMENT ($M) +15.8 + 5.0 - 22.0 335.1 336.3 Driven by increased investment in VTS, higher computer costs driven by an
Slide 11: NPAT from continuing operations is $112.6m
NPAT from continuing operations is $112.6m MOVEMENT IN NET PROFIT AFTER TAX ($M) +26.3 1,691.5 -7.6 +21.8 112.6 102.5 -0.9 -29.5 Other includes FV change on financial instruments, gain on sale of associates in prior period, impairment in prior period and tax changes FY2022 Earnings Capital Depreciat
Slide 12: NPAT from discontinued operations is $1,603.2m
NPAT from discontinued operations is $1,603.2m Profit and loss of discontinued operations FY23 FY22 • On 30 June 2023, completed sale of 50% $m $m interest in Vector Metering to QIC Revenue 258.8 235.6 Operating expenditure (70.6) (61.9) • Held for sale from Dec22, no depreciation from Adjusted EBIT
Slide 13: Capex driven by Auckland growth and network resilience
Capex driven by Auckland growth, investment to improve the reliability and resilience of our network & meter deployment in Australia and New Zealand GROSS CAPITAL EXPENDITURE ($m) GROSS CAPEX BY SEGMENT FY23 $80.6m 700.4 12% $49.4m 545.9 188.3 9% 541.5 Regulated Networks 488.7 FY22 425.1 122.5 151.8
Slide 14: Group debt
Group debt Vector’s Standard and Poor’s credit rating has been upgraded to BBB+ with a positive outlook Moody’s credit rating is Baa1 with a positive outlook NET ECONOMIC DEBT & GEARING ($M) Debt Maturity Profile $m 3,500 56.8% 58.2% 60.0% 55.5% 52.5% 3,000 47.1% 49.2% 50.0% 43.7% 2,500 40.0% 33.1%
Slide 15: Segment Performance
SEGMENT PERFORMANCE 15
Slide 16: FY2023 Business Overview
FY2023 Business Overview Electricity and Gas Distribution • Total net connections continue to • New electricity and gas • Final IM decision due December grow with electricity connections connections were 18,556, 2023 up 2.1% to 612,909 and gas compared to 16,684 in the prior full connections up 1.4%
Slide 17: Network earnings higher
Network earnings higher • Electricity revenue is higher due to: ADJUSTED EBITDA MOVEMENT ($M) − An increase in net connections; and +9.9 +18.7 371.6 − Increase in recovery of pass-through and recoverable costs -6.2 355.8 -6.6 • The result reflects impacts of higher inflation which are recoverable th
Slide 18: Continued high level of regulated capex
Continued high level of regulated capex • Regulated capex up 27.3% to $422.6 million GROSS REGULATED NETWORK CAPEX $M 422.6 − Continued high level of capex expenditure is driven by investment to improve safety, reliability and resilience of our network and to support Auckland growth 331.9 317.1 316.
Slide 19: Gas Trading earnings benefitted from higher natural gas margins
Gas Trading earnings benefitted from higher natural gas margins ADJUSTED EBITDA MOVEMENT ($M) +4.2 +0.2 26.9 • Improved performance from the LPG business. Higher 21.9 +0.6 LPG revenue due to higher prices is partially offset by higher cost of transportation and continued high cost of LPG input price
Slide 20: Discontinued operations: Metering result driven by advanced meter rollout
Discontinued operations: Metering result driven by advanced meter rollout in Australia • On 30 June 2023, completed transaction to sell 50% interest of ADJUSTED EBITDA MOVEMENT ($M) Vector Metering to QIC +6.5 188.2 +11.9 • FY23 earnings up 8.3% to $188.2 million driven by continued 173.7 -3.9 rollo
Slide 21: Outlook
OUTLOOK 21
Slide 22: Outlook
Outlook • Auckland growth expected to continue − Targeting c14,000 new electricity connections in FY24 − Connections & infrastructure activity remain elevated, necessitating significant capital expenditure − The extreme weather we’ve seen this year makes it clear that we have to look at adding more
Slide 23: Q&A Any Questions?
Q&A ANY QUESTIONS? 23
Slide 24: Appendices
APPENDICES 24
Slide 25: 5 Year Adjusted EBITDA Performance by Business
5 Year Adjusted EBITDA Performance by Business (includes continued and discontinued) Adjusted EBITDA $million 523.3 513.5 510.0 For the year ended 30 June 485.8 490.0 FY2019 FY2020 FY2021 FY2022 FY2023 Regulated Networks 367.0 337.6 350.7 355.8 371.6 Gas Trading 31.3 33.9 27.4 21.9 26.9 Metering* 13
Slide 26: Segment Results
Segment Results Year ended 30 June ($m) Continuing operations Discontinued operations REGULATED NETWORKS GAS TRADING CORPORATE AND OTHER1 METERING Change Change Change Change 2023 2022 2023 2022 2023 2022 2023 2022 % % % % Revenue excluding 715.6 681.2 +5.1 228.4 201.9 +13.1 77.2* 85.1* -9.3 258.8 2
Slide 27: Group Profit Statement
Group Profit Statement Year ended 30 June ($m) 2023 2022 Change INCOME STATEMENT $m $m % Revenue (excluding capital contributions) 1,004.0 951.6 +5.5 Operating expenditure (668.9) (615.3) -8.7 Adjusted EBITDA 335.1 336.3 -0.4 Capital Contributions 188.3 151.8 +24.0 Depreciation and amortisation (204
Slide 28: Group Cash Flow
Group Cash Flow Year ended 30 June ($m) 2023 2022 CASH FLOW $m $m Operating cash flow 517.1 518.8 Replacement capex (269.7) (230.0) Dividends paid (169.9) (169.1) Cash available for growth and debt repayment 77.5 119.7 Growth capex (369.3) (328.8) Proceeds from contingent consideration 14.2 6.1 Proc
Slide 29: Segment Adjusted EBITDA
Segment Adjusted EBITDA SEGMENT ADJUSTED EBITDA ($m) 2023 2022 less capital less capital contributions contributions Year ended 30 June Segment and other Segment Segment and other Segment EBITDA movements adjusted EBITDA EBITDA movements adjusted EBITDA Gas Trading 26.9 - 26.9 21.9 - 21.9 Regulated
Slide 30: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Vector’s standard profit measure prepared under New Zealand GAAP is net profit. Vector has used non-GAAP profit measures GAAP to Non-GAAP reconciliation when discussing financial performance in this document. The Group EBITDA and Adjusted EBITDA directors and manageme
Slide 31: End
END 31
Slide 32: Supplementary Annual Information: Adjusted EBITDA, Gas Distribution Volumes
Supplementary Annual Information Regulated Networks Adjusted EBITDA $m FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 Electricity 347.1 312.8 309.9 325.2 317.7 318.7 329.9 299.9 312.2 319.5 326.2 Gas Distribution Auckland 44.8 38.3 39.9 43.4 43.5 40.0 37.0 37.7 38.4 36.
Slide 33: Net Gas ICPs, Total Gas ICPs, Gas Distribution Lines Revenue
Net New ICPs # of ICPs (net) FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 Q1 620 524 839 616 878 872 560 674 624 368 397 Q2 415 566 713 727 718 728 700 778 848 788 382 Q3 508 558 584 809 626 468 378 484 582 30 617 Q4 377 892 645 605 126 491 775 382 458 337 240 Total 1
Slide 34: Gas Distribution Adjusted EBITDA, Capital Contributions, Regulated Capex
Gas Distribution Adjusted EBITDA $m FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 H1 24.5 23.1 21.4 23.8 23.5 22.6 20.8 20.8 21.0 19.2 23.3 H2 20.2 15.2 18.5 19.5 20.0 17.4 16.3 16.9 17.4 17.1 22.1 Total 44.8 38.3 39.9 43.4 43.5 40.0 37.0 37.7 38.4 36.3 45.4 Gas Distri