Genesis Energy Limited · NZX:GNE
Genesis Energy — Non-Deal Roadshow (March 2019)
39 slides from Genesis Energy's roadshow presentation, March 2019
Slide 1: Genesis Energy Investor Roadshow March 2019
Marc England – CHIEF EXECUTIVE OFFICER Chris Jewell – CHIEF FINANCIAL OFFICER James Magill – EXECUTIVE GROUP MANAGER CUSTOMER & INNOVATION Australia: Melbourne, Sydney, Brisbane
Slide 2: 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
Slide 3: Our investment proposition is a strong yield underpinned by growth
Our investment proposition is a strong yield underpinned by growth NZX 50 / ASX 100 YIELD COMPARISON EBITDAF Mean Yield (LHS) 90th Percentile Yield (LHS) 75th Percentile Yield (LHS) NZ$ MILLIONS 25th Percentile Yield (LHS) GNE Yield (LHS) GNE Share Price (NZ$) 360-375 10% $3.00 9% 361 $2.50 345 335
Slide 4: Supplementary dividend for Australian investors
Supplementary dividend for Australian investors DIVIDEND CENTS PER SHARE (NZ$) & PAYOUT HISTORY Dividends (CPS) Payout % of FCF • HY19 interim dividend1 of 8.45 cps, 80% 16.9 Policy is to grow120% imputed, has a record date of 4 April 2019, 16.4 16.6 16.0 dividends in real terms payable to sharehold
Slide 5: The New Zealand Market
% — The New Zealand Market GENESIS ENERGY LIMITED genesis
Slide 6: About New Zealand
About New Zealand — Good growth in a stable political and regulatory environment GDP st billion, Ease of doing 3% growth business st th Investor Providing Protection Sustainable, Secure Energy rd nd Economic Global Prosperity Freedom Index Source: Economy Rankings 2018 (The World Bank), The Heritage
Slide 7: New Zealand's domestic energy market
New Zealand’s domestic energy market — Deregulated unsubsidised market with an established operating system 2m electricity customers 270,000 gas customers, 220,000 LPG customers 29 electricity lines companies 5 gas distributors 48% residential 4 LPG distributors customers 5 major electricity generat
Slide 8: Core markets stable or growing
Core markets stable or growing GRID DEMAND GRID DEMAND FORECASTS (GWH) 65,000 SHOWING SIGNS OF GROWTH (GWH) 4,000 60,000 Growth is 3,800 55,000 forecast in 3,600 50,000 3,400 NZ energy 3,200 45,000 demand 3,000 40,000 2,800 35,000 2023 2027 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 9: …with electricity markets reflecting tighter capacity margins
…with electricity markets reflecting tighter capacity margins Regulatory Energy and Tiwai 4th review of capacity potline electricity shortages adds to prices showing demand underway 400 RESIDENTIAL ELECTRICITY PRICE (C/KWH) WHOLESALE ELECTRICITY PRICE ($/MWH) NEW ZEALAND WINTER ENERGY MARGIN 350 25%
Slide 10: …and fuel markets tightening
…and fuel markets tightening LPG International Oil and gas market oil price exploration to moving to volatility be restricted net import continues FORECAST GAS AND LPG PRODUCTION PROFILE NZ LPG IMPORT/EXPORT PARITY PRICING BRENT CRUDE (USD/BBL) 250 (NZD/T) 120 14 2,000 100 200 12 1,800 1,600 10 80 1
Slide 11: Energy transformation is creating opportunities
Energy transformation is creating opportunities ENERGY SEARCH VOLUME TREND NEW ZEALAND CARBON UNITS PRICE WIND TURBINE PRICE INDEX $30 1.4 250 $25 200 Desktop search $20 1.2 150 $15 100 $10 1 Mobile search 50 $5 0 $0 0.8 Jan-16 Jan-14 Jan-15 Jan-17 Jan-18 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Ju
Slide 12: Regulatory environment
Regulatory environment Meaningful solutions sought, underpinned by principles of collaboration and customer-centric approach TRANSITIONING TO A LOW ELECTRICITY MARKET ENHANCEMENTS EMISSIONS ECONOMY • EPR Panel presented 41 options, indicating its support for a package • A change to the terms of refe
Slide 13: Genesis Energy Overview
4 7 Genesis Energy Overview ff > GENESIS ENERGY LIMITED genesis
Slide 14: About Genesis Energy
About Genesis Energy — Our vision is to be customers’ first choice for energy management KEY INFORMATION Revenue (FY18): NZ$2.3 billion EBITDAF (FY18): NZ$361 million , Dividend Yield (FY18): 6.9% Share Price: NZ$2.90 Market Capitalisation: NZ$2.9 billion Enterprise Value (HY19): NZ$4.1 billion Aver
Slide 15: Why Genesis?
Why Genesis? Genesis Energy Limited Investor Roadshow March 2019 15.
Slide 16: Diversity of earnings across sectors, fuels and markets
Diversity of earnings across sectors, fuels and markets GROSS MARGIN CONTRIBUTION (FY18) KUPE 20% WHOLESALE 43% CUSTOMER 37% Gas 11% Business Renewable generation 30% Residential electricity 20% electricity 6% Oil 6% LPG 3% LPG 1% Thermal generation 12% LPG 7% Gas 4% Electricity Gas LPG Oil Genesis
Slide 17: 1H FY19 highlights
1H FY19 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 18: 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 19: Our Company Strategy
if Our Company Strategy 7 GENESIS ENERGY LIMITED genesis
Slide 20: We are performing while transforming
We are performing while transforming Our VISION is to be customers’ first choice for energy management Our PURPOSE is to reimagine energy to put control in our customers’ hands Our STRATEGY is to maximise value through our market position Wholesale & Kupe segment Customer segment • Our integrated fu
Slide 21: Our purpose is to reimagine energy to put control in our customers' hands
Our purpose is to reimagine energy to put control in our customers’ hands Fuels Brands Platform Genesis Energy Limited Investor Roadshow March 2019 21.
Slide 22: Our brand re-launch has helped us regain market leadership
Our brand re-launch has helped us regain market leadership WHEN ASKED, PEOPLE RECOGNISED GENESIS AS: “THE MARKET LEADER” 28 19 17 19 9 +7 PTS +4 PTS +7 PTS NC +1 PT “PUTTING PEOPLE IN CONTROL OF THEIR ENERGY USE” 23 15 11 16 11 +8 PTS +3 PTS +1 PTS +1 PT +1 PT “LEADING THE WAY WITH NEW TECHNOLOGY” 2
Slide 23: Focusing on enhancing loyalty
Focusing on enhancing loyalty FY19 will deliver product differentiation at scale GENESIS CUSTOMER CHURN RATE (BY MONTH, ALL FUELS) 1 30% Bottle Gas Monitoring Launch Electricity Monitoring Launch Energy IQ 25% Power Launch Shout I Power Power Shout III Move to the Shout II Future I 20% Dual “Go all
Slide 24: Our product led strategy
Our product led strategy Progress include the launch of energy audits for business customers and passing the 1,000 connections milestone Half year highlights Provide knowledge 1,200 Energy Management Provide energy insights to Connections1 customers Knowledge Electricity Electricity Bottle gas monit
Slide 25: Focus on growing business volume
BUSINESS SALES TEAM COVERAGE Focus on growing business volume FY17 FY19 Targeted growth in agriculture and hospitality BUSINESS BILLED VOLUME 4,000 35,000 3,500 30,000 3,000 Monitoring 25,000 Electricity & Gas GWh 2,500 LPG tonne 20,000 2,000 Bottled gas Electricity & Gas monitoring 15,000 1,500 Ele
Slide 26: Integrated portfolio provides flexibility
Integrated portfolio provides flexibility Maximising value as NZ transitions to a low carbon future Securing low cost renewable electricity Flexibility from fuels and working towards a transition from coal Creating flexibility from existing assets. Weekly and seasonal flex Genesis Energy Limited Inv
Slide 27: Our emissions are largely hedged through to 2025
Our emissions are largely hedged through to 2025 We are also investigating longer term hedging options, such as forestry CARBON HEDGE POSITION $6 $9-14 $15-20 $17-22 $17-22 $19-24 $20-25 $20-25 NZ Units as % of potential exposure Short-hedging has been successful to date For longer term hedging, we
Slide 28: 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 29: The Kupe stake and fuel contract position provide commercial upside
The Kupe stake and fuel contract ~ position provide commercial upside S J GENESIS ENERGY LIMITED genesis
Slide 30: Kupe Gas Project
Kupe Gas Project Settled joint venture focused on enhancing Kupe’s value Economic interests Improved Phase Two Development aligned Collaboration Two distinct projects Engagement Transparency Inlet compression Development well Discussion Genesis Energy Limited Investor Roadshow March 2019 30.
Slide 31: Long-term Gas Contract Position
Long-term Gas Contract Position TAKE-OR-PAY FORWARD GAS PURCHASES1 BENEFITS AND TIMING OF ALTERNATIVE GAS PURCHASE COST 2 $7.50 - $8.00 - 40 $8.50 $9.00 $6/GJ $7/GJ $90 35 $8.00 - $80 $9.00 30 $70 25 $8.00 - $60 $9.00 $8.50 - $9.50 $50 PJ 20 $8.50 - $40 15 $9.50 $30 10 $20 $8.50 - 5 $9.50 $10 0 $- F
Slide 32: Targeting FY21 EBITDAF of $400-430m
-_ Targeting FY21 EBITDAF of $400-430m & J GENESIS ENERGY LIMITED genesis
Slide 33: The plan is in place to FY21 and beyond
The plan is in place to FY21 and beyond Driven by retail growth, optimisation and rolling off of legacy contracts PATHWAY TO FY21 EBITDAF FY21 SENSITIVTIES 430 Extended Dry Sequence 25th P. 10th P. 27 Extended Wet Perc. change in 75th P. 90th P. 400 Sequence hydro sequence 17 15 +/- $2/MWh GWAP 30 1
Slide 34: Sustained earnings and dividend growth
Sustained earnings and dividend growth Underpinned by long dated debt book EBITDAF DIVIDEND CENTS PER SHARE & PAYOUT HISTORY1 $ MILLIONS Dividends (CPS) % of Free Cash Flow 400 360-375 Target Dividend/ 16.4 16.6 16.9 Free Cash Flow 130% 16.0 361 of < 90% 300 345 335 87% 91% 92% 333 74% 80% 200 8.45
Slide 35: Appendices
Appendices GENESIS ENERGY LIMITED genesis
Slide 36: HY19 Financial statements
HY19 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-C
Slide 37: HY19 Debt information
HY19 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
Slide 38: HY19 Operational highlights
HY19 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
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