Genesis Energy Limited · NZX:GNE
Genesis Energy — HY19 Earnings Presentation
28 slides from Genesis Energy's earnings presentation, Feb 27, 2019
Slide 1: HY19 Result Presentation
HY19 Result Presentation 27 February 2019 Marc England – CHIEF EXECUTIVE OFFICER Chris Jewell – CHIEF FINANCIAL OFFICER GENESIS ENERGY LIMITED
Slide 2: Agenda
AGENDA 1 Key Highlights 2 Financial Performance 3 Operational and Strategic Update 4 Outlook Genesis Energy Limited 1H FY19 Result Presentation 2.
Slide 3: Key Highlights
Key Highlights GENESIS ENERGY LIMITED genesis
Slide 4: Key highlights
Key highlights EBITDAF $ m Customers purchasing Wholesale portfolio delivers more than 1 product stable earnings in volatile, NPAT grew by m % resource constrained wholesale $ . market. Dividends up 1.8% to cps Electricity netback increased by . Generation asset % Gross yield of . % (Residential) %
Slide 5: Financial Performance
? Financial Performance y J GENESIS ENERGY LIMITED genesis
Slide 6: HY19 financial summary
HY19 financial summary1 — EBITDAF of $196m, underlying earnings up 4%, with operating costs down and net debt down $27m FINANCIAL HIGHLIGHTS $ MILLIONS HY18 HY19 1,183 1,156 198 196 199 171 150 148 130 111 8.30cps 8.45cps 49 41.8 43.3 37 28 27 EBITDAF1 NPAT Underlying Controllable Operating Cashflow
Slide 7: Dividends
Dividends — Interim dividend of 8.45 cps declared (up 1.8%), with 80% imputation, representing a 8.6% gross yield1 DIVIDEND (CPS) & PAYOUT HISTORY 9.00 Dividends (cps) % of Free Cash Flow 145% • An Interim dividend of 8.45 cps, 80% imputed, will have a record date of 4 April 2019, payable to 8.45 12
Slide 8: HY19 EBITDAF
HY19 EBITDAF — Comparable period variance reflects improved Customer performance, offset by Unit 5 outage, gas constraints and record comparable period EBITDAF HY19 vs HY18 EBITDAF 250 $ MILLIONS $ MILLIONS Favourable Unfavourable 198 196 200 173 176 156 3 150 1 6 3 3 100 200 198 196 50 - HY15 HY16
Slide 9: Segment EBITDAF
Segment EBITDAF CUSTOMER EBITDAF HY18 TO HY19 Favourable Unfavourable • Customer improved performance in LPG, Business margins and reduced operating expenses and bad debts. 2 1 • Wholesale performance stable but moderated by 3 swaption calls, gas constraints and an extended Unit 5 1 2 1 1 outage. GW
Slide 10: NPAT & Underlying Earnings
NPAT & Underlying Earnings — 78% increase in NPAT and 4% increase in Underlying Earnings NPAT $ MILLIONS Favourable Unfavourable 5 1 • Depreciation and amortisation costs down driven 8 by reduced production at Kupe and a large write off of Hamilton building hardware in FY18. 49 3 27 28 • Positive fa
Slide 11: Controllable operating expenses
Controllable operating expenses — Controllable operating expenses down 1% on pcp CONTROLLABLE OPERATING EXPENSES1 $ MILLIONS 144 150 148 • Costs have stabilised at HY18 levels following a 142 138 period of investment. • Increased focus on bad debts is improving results. HY15 HY16 HY17 HY18 HY19 CONT
Slide 12: Capital expenditure
Capital expenditure — Total capital expenditure at HY19 was $37m, FY19 guidance being up to $85m CAPITAL EXPENDITURE1 $ MILLIONS • Stay in business capex (SIB) was $30m, significant 80 projects included: ₋ Huntly U5 planned maintenance, Kupe LPG plant maintenance, station crane upgrades, Tuai 47 gen
Slide 13: Capital structure
Capital structure — Net debt reduced by $27 million, credit metrics improving and within target band NET DEBT AND NET DEBT/EBITDAF RATIO1 • S&P reaffirmed BBB+ credit rating in January 2019 • $240m of Capital Bonds maturing in FY 2049 were 1,212 5.0 1,183 1,156 issued on 16 July 2018 at a coupon rat
Slide 14: Operational and Strategic Update
Operational and Strategic Update
Slide 15: Customer brand, loyalty & engagement
Customer brand, loyalty & engagement — Focus on multi-fuels and loyalty continues to drive down churn BRAND NPS UP 6 ppt AND PROMOTER SCORE UP 3 ppt IN 12 MONTHS RESIDENTIAL CUSTOMER GROSS2 CHURN DOWN 4.8 ppt, NET CHURN DOWN 3.4 ppt (HY AVERGAES) NPS - Genesis 3 Month Rolling Promoter - Genesis 3 Mo
Slide 16: Customer service excellence
Customer service excellence — Customer service is increasingly digital and automated, bad debt down $2m DIGITAL INTERACTIONS UP 22 ppt SINCE FY16 15 ppt INCREASE IN CUSTOMER E-BILL ADOPTION SINCE FY16 Phone WebChat Email Digital 60% E-bill adoption 1H FY19 30% 14% 56% 1% up 15 ppt Customer Uptake %
Slide 17: Optimising the Customer Segment for value
Optimising the Customer Segment for value — Volume growth a focus but not at the expense of value. RESIDENTIAL ELECTRICITY SALES VOLUMES (GWh) & NETBACK1 ($/MWh) BUSINESS ELECTRICITY SALES VOLUMES (GWh) & NETBACK ($/MWh) Sales Volume Netback Sales Volume Netback 1,700 $130 $115 Volume/value Sales Vo
Slide 18: Rankines crucial for national security of supply
Rankines crucial for national security of supply — Wholesale result moderated by gas shortages, planned 50-day Unit 5 outage, low storage and swaption calls A TIGHTER WHOLESALE MARKET RESPONDS QUICKLY TO HYDRO SHORTAGES SHORTAGE OF BOTH GAS AND WATER DRIVES WHOLESALE PRICE VOLATILITY, GWAP 1 OF $146
Slide 19: Plant reliability key in volatile market
Plant reliability key in volatile market — However market making costs increase sharply due to ASX volatility CONTINUED HIGH PLANT RELIABILITY – UNIT 5 MAINTENANCE DELIVERED ON TIME AND VOLUNTARY MARKET MAKER COSTS INCREASE WITH VOLATILITY BELOW BUDGET Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Month
Slide 20: Enabling a more sustainable future
Enabling a more sustainable future We’re driving electric - Ohope Beach School joins Genesis signed up Whio population boosted School-gen solar to EV 100, EVs programme a global November 2018 business ducks initiative released now part of January 2019 driving the Caring for our Genesis fleet switch
Slide 21: Outlook
| Outlook | GENESIS ENERGY LIMITED genesis
Slide 22: Outlook and guidance
Outlook and guidance — Updated guidance for FY19 EBITDAF is $360 to $375 million Market Outlook • 2H FY19 – wholesale market remains volatile with ongoing gas outages, drier conditions, uncertainty in the availability of competitor thermal plant. The FY19 guidance range reflects these conditions. •
Slide 23: Appendices
Appendices GENESIS ENERGY LIMITED genesis
Slide 24: Financial statements
Financial statements1 Income Statement HY19 HY18 Variance Balance Sheet HY19 FY18 Variance ($m) ($m) ($m) ($m) Revenue 1,361.0 1,213.0 +12.2% Cash and Cash Equivalents 38.0 49.3 Total Operating Expenses (1,165.5) (1,014.6) +14.9% Other Current Assets 341.6 341.3 EBITDAF 195.5 198.4 (1.5%) Non-Curren
Slide 25: Debt information
Debt information Debt Information HY19 FY18 Variance GENESIS ENERGY DEBT PROFILE ($m) ($m) Total Debt $ 1,223.6 1,255.4 $m Cash and Cash Equivalents $ 38.0 49.3 $300 Headline Net Debt $ 1,185.6 1,206.1 (1.7%) $250 USPP FX and FV Adjustments $ 29.8 23.2 $200 Adjusted Net Debt1 $ 1,155.8 1,182.9 (2.3%
Slide 26: Operational highlights
Operational highlights Customer Key Information HY19 HY18 Variance Wholesale Key Information HY19 HY18 Variance EBITDAF ($ millions) 61.7 56.1 +10.0% EBITDAF ($ millions) 103.8 106.4 (2.4%) Electricity Netback ($/MWh) $103.98 $99.75 +4.2% Renewable Generation (GWh) 1,713 1,697 +0.9% Gas Netback ($/G
Slide 27: Disclaimer
Disclaimer This presentation has been prepared by Genesis Energy Limited (‘Genesis Energy’) for information purposes only. The information in this presentation is of a general nature and does not purport to be complete nor does it contain all the information required for an investor to evaluate an i
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