Z Energy — FY2013 Earnings Presentation
16 slides from Z Energy's earnings presentation, 2013
Slide 1: Annual Results for FY13
Annual Results for FY13 Momentum with financial performance, strategy delivery and brand development continues
Slide 2: Trading conditions neutral to bearish and remain affected by the pace of economic recovery
Trading conditions neutral to bearish and remain affected by the pace of economic recovery Gross Refinery Margin (US$/bbl) Industry Volumes (million litres) 12 800 700 10 600 8 500 6 400 300 4 200 2 100 0 - 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 2009 2009 2010 2010 2011 2011 2012 2012
Slide 3: Z's market share declined in FY13 albeit our actions were consistent with our goal
Z’s market share declined in FY13 albeit our actions were consistent with our goal to grow profits and returns Market Share - all products • Significant changes amongst four majors in 35% Retail market share arising from AA 33% Smartfuel and supermarket dockets 31% • Retail focus on total dollar mar
Slide 4: Z's gross margin continues to be noticeably less than the MBIE published data
Z’s gross margin continues to be noticeably less than the MBIE published data Total Volumes for all Products Gross Margins excluding Store (ml per half year) ($m per half year) 1,400 250 30 1,200 25 200 1,000 20 150 800 15 600 100 10 400 50 5 200 - 0 0 2005-2009 FY11 FY12 1H FY13 2H FY13 2005-09 FY1
Slide 5: Whilst sales volumes have declined, these are more than offset by unit margin growth
Whilst sales volumes have declined, these are more than offset by unit margin growth despite the volatile markets Gross Margins ($m per half year) 250 20 Product Volumes FY12 (ml) FY13 (ml) Delta 200 Retail petrol 950 867 -9% 15 Retail diesel 279 277 -1% 150 Commercial diesel 655 562 -14% 10 Jet & A
Slide 6: EBITDAF was above the mid-point of guidance with 3Q and 4Q higher than the 2Q trough
EBITDAF was above the mid-point of guidance with 3Q and 4Q higher than the 2Q trough Key Variables Full Year Actual Guidance for FY13 Gross refinery margin (USD/bbl) $7.40 $7.00 RNZ Processing Volume (ml) 1,966 1,880 Sales Volume (ml) 2,524 2,600 Operating Costs* $280m $260-270m Operating EBITDAF (C
Slide 7: We have demonstrated our ability to respond to a volatile macro and competitive environment
We have demonstrated our ability to respond to a volatile macro and competitive environment $m FY12 FY13 Delta Sales volume (ml) 2,647 2,524 -5% Fuels Gross Margin* 385 420 9% Ot her Income* 50 56 11% Operat ing cost s* (263) (280) 7% Operating EBITDAF (Current Cost)* 172 195 13% Cost Of Sales Adjus
Slide 8: There has been a material cost of sales adjustment between current cost and historical cost earnings
There has been a material cost of sales adjustment between current cost and historical cost earnings $m FY13 FY12 FY11 • Historic cost earnings (as required by IFRS) are Operating EBITDAF (CC)* 195 172 157 subject to fluctuations in the value and volume Cost of Sales Adjust ment (32) 30 62 of stock
Slide 9: Sizeable positive cash flow has arisen from sale and leaseback proceeds
Sizeable positive cash flow has arisen from sale and leaseback proceeds as well as lower year end working capital Cash Flow ($m) 500 • The large cash surplus at year end is 450 indicative of the ranges that exist in cash 400 flows supporting the requirement for the $350m working capital facility 350
Slide 10: We remain comfortably within all of our debt covenants
We remain comfortably within all of our debt covenants Banking covenants FY13 FY12 Bank Limit Fixed cost cover ratio 3.7 2.9 > 2.5 Working capital cover ratio - 41.1 > 1.5 Total debt coverage ratio 2.2 2.3 < 3.0 Period end debt and gearing Retail Bond Maturities ($m) 500 50% 160 140 400 120 40% 300
Slide 11: The second year of our three year program of Strategy projects has been successfully executed
The second year of our three year program of Strategy projects has been successfully executed • Procurement of Crude renewed with Shell and Product procurement moved to north Asian refineries • Rebranding completed on time and below $36.5m budget • Customer satisfaction programs fully operational •
Slide 12: The Brand is growing into its potential and continued favorable results provide a platform
The Brand is growing into its potential and continued favorable results provide a platform for future growth Current Mar 2013 June 2012 Nov 2011 Ranking Behavioural preference #1 23% 15% 2% Unprompted awareness #2 81% 71% 59% Attitudinal first choice #1 30% 22% 9% Raving fans #1 34% 25% 18% Service
Slide 13: Appendices
Appendices
Slide 14: Detailed P & L
Detailed P & L $m FY11 FY12 FY13 Processing v olume (ml) 1,901 1,930 1,966 Supply Sales and Exports (ml) 49 68 92 Marketing Sales (ml) 2,606 2,579 2,432 Gross Margin - supply 37 80 114 Gross Margin - fuels marketing 317 305 306 • Certain comparative amounts have been Gross Margin - non fuels 49 50 5
Slide 15: Reconciliations
Reconciliations Reconciliation from operating costs to total operating expenditure (per the statutory accounts) Operat ing cost s 280.4 Add depreciat ion and amort isat ion 41.3 Add impairment s 0.5 Add t reasury gains / losses (0.4) Tot al operat ing expendit ure (st at ut ory account s) 321.8 Reco
Slide 16: Impact on Infratil's Results
Impact on Infratil’s Results Aotea Energy Equity Earnings ($m) FY13 FY12 AEHL net surplus attributable to owners of the 35.0 77.0 company (per statutory accounts) Infratil's share (50%) 17.5 38.5 Shareholder loan interest 8.4 8.6 Shareholder RPS interest 5.1 5.2 Share of AEHL's earnings attributable