Genesis Energy Limited · NZX:GNE
Genesis Energy — Investor Day (2020)
49 slides from Genesis Energy's investor day presentation, 2020
Slide 1: Genesis Stakeholder Day Strategy sessions
Genesis Stakeholder Day Strategy sessions
Slide 2: Refreshing our purpose, strategies and vision as we head into the 2020s
We’re refreshing our purpose, strategies and vision as we head into the 2020’s Our refreshed retail strategy emphasises six key priorities, delivering more for our core whilst building for the future 1 Create residential experiences that build customer loyalty 2 Grow our market share of small busine
Slide 3: Empowering New Zealand's sustainable future
Empowering New Zealand’s sustainable future Continue to leverage the stability from our diverse Deliver more revenue streams, and grow in markets where we identify from our core compelling opportunities Manage an economic transition to a lower carbon Navigate the portfolio, delivering carbon reducti
Slide 4: The strategy break-outs cover three strategic themes
The strategy break-outs cover three strategic themes core to our future but not everything we do Genesis Stakeholder Day 2020 4.
Slide 5: Customer strategy
Customer strategy Delivering more for our customers Second line can be in orange
Slide 6: The first phase has seen good success, building momentum for the next horizon
The first phase has seen good success, building momentum for the next horizon Reduced cost-to-serve from Expanded LPG business, now Increased the proportion of dual Clear brand leadership $160 to $140 per ICP #3 with 26% market share fuel customers from 20% to 25% and ownership of energy management
Slide 7: Delivering more for our core through customer loyalty, retention and care
We are delivering more for our core through customer loyalty, retention and care Key Goals FY22 to FY24 Total Retail EBITDAF Uplift Create residential experiences 2% churn reduction 1 $15 million by FY2024 that build customer loyalty Grow our market share of +7% of SME book 2 (elec & gas) small busi
Slide 8: Residential experiences that build customer loyalty
Residential experiences that build customer loyalty 8.
Slide 9: Power Shout as a reward recognition system for customers
Power Shout as a reward recognition system for customers Power Shout has delivered: Over An immediate Million hours % of free power given , churn improvement to customers over customers in those who have the last 3 years we’re regularly engaging taken up Power Shouts with and rewarding What’s next?
Slide 10: Home move journey an untapped retention opportunity
Home move journey an untapped retention opportunity % ~$ Quick wins yielding million on average more home move of people who move EBITAF opportunity if we retain % digital journeys home, switch providers an additional 5,500 customers from 2019 through home moves Find Settle-in Engage (32.3) Aware &
Slide 11: Manaaki Kenehi – an opportunity to do more for vulnerable customers
Manaaki Kenehi – an opportunity to do more for vulnerable customers Over IMPACT TO DEBT Reduced customer disconnections by % 50 , % 3 18 Average Movement in Debt per ICP 0 customers contacted average debt in 7 weeks through reduction across -21 proactive early Aug 2019 to Aug 2020 all debt buckets -
Slide 12: Grow our market share of small business customers
Grow our market share of small business customers 12.
Slide 13: Smaller businesses bring higher margins; what's next
Smaller businesses bring higher margins and are a large volume segment of the market Grow by Drive Scale digital channel to By FY2024: % % , ICPs Dual Fuel uptake acquisition What’s next? • Targeted acquisition through partnerships and digital channel to drive profitable growth • Leveraging relevant
Slide 14: LPG #1 or #2 in every region
LPG #1 or #2 in every region 14.
Slide 15: Transforming CX and service capability through digital enablement
Transforming CX and service capability through digital enablement By FY2024: “Simplicity and assurance of a Reduce constant gas supply” % volume single fuel % Laying growth foundations for “It’s proactive rather than reactive” churn by future growth “Not having to go and check the bottle. Especially
Slide 16: Digital and innovation strategy
Digital and innovation strategy Powering Genesis’ next horizon
Slide 17: Continuing to explore emerging customer needs to build for the future
We are continuing to explore emerging customer needs to build for the future 1 Create residential experiences that build customer loyalty Grow our market share of 2 small business customers Empowering New Zealand’s 3 LPG #1 or #2 in every region sustainable future 4 Unleash Energy Online in the tier
Slide 18: Several global trends are playing out
Several global trends are playing out Appetite for Adjacent industries Decentralisation de-carbonising participating increasing Digital platform models Oil and gas Distributed generation Government Tech and storage Investors Telco Electric vehicles Businesses Vehicles Demand load shifting Consumers
Slide 19: Future propositions: determining the focus
Future propositions Determining the focus Is the Business Customer proposition commercially Model Problem viable? What customer problem is being solved? Strategy The transition from energy supplier to energy manager What technology Technology is available to enable this proposition? Genesis Stakehol
Slide 20: 4 focus territories for developing future propositions
4 focus territories for developing future propositions EVs IN-HOME ADVICE SUSTAINABILITY • Helping New • To support our • Helping all • To empower Zealand transition to customers with customers customers to electrified transport products and make informed make choices • By supporting an services tha
Slide 21: Our vision for large businesses and energy services
Our vision for large businesses and energy services Genesis Stakeholder Day 2020 21.
Slide 22: Our vision for residential energy management
Our vision for residential energy management: Increasing range of data leads to enhanced actionable insights for customers Actionable insights Future Current Customer Suppliers Wholesale Distributors Energy insights Hardware Market services (knowledge + advice) (Action) + (Action) Data Genesis Stake
Slide 23: Investing in the technology needed to deliver our customer strategy
We are investing in the technology needed to deliver our customer strategy 1 Create residential experiences that build customer loyalty Grow our market share of 2 small business customers Empowering New Zealand’s 3 LPG #1 or #2 in every region sustainable future 4 Unleash Energy Online in the tier 2
Slide 24: Range and volume of data is growing
Range and volume of data is growing, presenting ever greater opportunities to understand and serve customers VOLUME OF DATA IN OUR DATA WAREHOUSE Computation, connectedness and potential grow exponentially with growing data sources 40 Data (TB) Enhanced Wholesale and Generation 30 Streaming Hi Res M
Slide 25: Mahi Tahi will simplify data flows
Mahi Tahi will simplify data flows by centralising and decoupling the data landscape FROM TO maintaining many-to-many using data layer as connections between customer facing and a single source of truth core system layers Mahi Tahi CUSTOMER FACING LAYER DATA INTEGRATION LAYER CORE SYSTEM/ INFRASTRUC
Slide 26: Project Rubiks reconsiders several customer systems as a group
Project Rubiks reconsiders several customer systems as a group, re-platforming our sales, service and billing capabilities Rubiks Scope Current Current Salesforce Gentrack Functionality Functionality Product Service CPQ Manage Rating ment Multiple systems Manual processes Sales Compliance Billing Hi
Slide 27: A unique opportunity to pivot technology for business agility
A unique opportunity to pivot technology to obtain business agility and enable rapid delivery of desired customer experiences Major Minor Major Minor Minor version version Multi-year cycle of slow, Continuous, fast, small, low risk change high cost change to achieve high value and velocity Genesi
Slide 28: Rubiks + Mahi Tahi have the potential to deliver a step change in retail
Rubiks + Mahi Tahi have the potential to deliver a step change in retail performance Example business outcomes from international peers + % - % + % self service integration costs NPS - % + % Cross sell - % Time to quote Cost Source: Discussions with potential technology partners and international ut
Slide 29: Future-gen strategy
Future-gen strategy Actively enabling New Zealand’s energy transition
Slide 30: Displace baseload thermal with affordable, reliable renewable electricity
Proactively and economically displace baseload thermal with affordable and reliable renewable electricity An active enabler of New Zealand’s energy transition Thermal Displacement Decarbonisation Enablers Portfolio Flexibility & (Reshape Electricity Portfolio) (Reshape Fuels Portfolio) Regulatory Wo
Slide 31: Long-term opportunity to deliver value uplift through the energy transition
Long-term opportunity to deliver value uplift by actively managing the energy transition Key Metrics By 2030 New renewables displacing baseload 2,650 GWh of 1 thermal renewables Empowering Secure gas flexibility through 110 TJ/day flexibility 2 New Zealand’s contracts and storage and 20PJ storage su
Slide 32: Three areas of focus to create value from flexibility and optionality
Three areas of focus to create value from flexibility and optionality in our generation portfolio An active enabler of New Zealand’s energy transition Thermal Displacement Decarbonisation Enablers Portfolio Flexibility & (Reshape Electricity Portfolio) (Reshape Fuels Portfolio) Regulatory Work Therm
Slide 33: Cheaper renewable electricity will actively displace baseload thermal
Cheaper renewable electricity will actively displace baseload thermal PORTFOLIO CHANGES ASSUMING FLAT DEMAND GWh 6,775 6,775 6,775 Backup Thermal 1,507 1,312 1,312 850 2,200 Baseload Thermal 2,455 1,350 450 450 Hydro 2,813 2,813 2,813 Generation 5 Yr Average 2025 2030 Genesis Renewable Generation (c
Slide 34: Increased optionality lets us create value in any demand scenario
Our increased optionality and flexibility lets us create value in any demand scenario CURRENT PORTFOLIO GWh 6,775 529 POTENTIAL DRIVERS Other OF FUTURE MARKET DEMAND Large business 1,767 Small Business 1,166 Organic demand Some Major Energy New Industrial growth (c. 1% p.a.) Users may close NZ Deman
Slide 35: Actively transform our portfolio to maximise value
We will actively transform our portfolio to maximise value in preparation of inevitable market changes Renewable Unit 5 Increase Plant Thermal Fuel Variabilising Demand Supply Demand Flexible Fixed Costs Thermal e.g. e.g. PPAs, Operations Displacement Gas Tiwai exit New Build Staff / Storage Roster
Slide 36: Portfolio flexibility is required in light of market uncertainties
Portfolio flexibility is required to create opportunities in light of market uncertainties Renewable Electricity Generation Closure of Tiwai Other Market Uncertainties Genesis Stakeholder Day 2020 36.
Slide 37: Greater flexibility and optionality in our portfolio
Realising value in uncertain times requires us to think differently to create greater flexibility and optionality in our portfolio Core Outage and Operational Flexible Plant Investment Structures Fuel Supply Governance processes Low cost bias Enable thermal backup Asset strategies vs Operator mainta
Slide 38: Achieving Future-gen goals delivers Science Based Targets
Achieving Future-gen goals is how we will deliver Science Based Targets 1 2 3 Renewable Gas flexibility electricity Carbon credits 110 TJ/day Dryland hits target (55 TJ/day injection / 1,800 GWh (150 kilotonnes 2025 withdrawal) (incl. Waipipi 450 GWh) below market price) 20 PJ Storage Extra 100 kt s
Slide 39: Pipeline for new renewable developments exceeds our stated ambition
Pipeline for new renewable electricity developments exceeds our stated ambition Opportunities identified in MBIE Generation stack Consented renewable c. 100,000 generation 8,000 GWh GWh Future-gen goal (Electricity Authority) Projects with 2030 discussions 2,650 GWh underway circa 3,900 GWh Waipipi
Slide 40: Tilt Strategic Partnership and DrylandCarbon Partnership
Tilt Strategic Partnership DrylandCarbon Partnership 133 MW CAPACITY RAMP-UP 140 100% 94% 120 81% 100 68% 80 60 40 20 90 108 125 133 0 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Genesis Stakeholder Day 2020 40.
Slide 41: Chief Financial Officer Wrap-up
Chief Financial Officer Wrap-up Tracking our path through the transition Second line can be in orange
Slide 42: Financial track record: on track for the $400m target
Our financial track record shows were a business that does what it says it will do – we are on track for the $400m target set in FY16 FY17 to FY21 EBITDAF FY17 TO FY20 DIVIDEND CENTS PER SHARE & PAY-OUT HISTORY Current guidance $ Millions Dividends (CPS) % of Free Cash Flow % of Normalised FCF (2) 3
Slide 43: Our purpose fits within our vision and strategy; plan spans two horizons
Our purpose fits within our vision and strategy Our plan spans two horizons Empowering Horizon 1 – FY22 to FY24 New Zealand’s sustainable Horizon 2 – FY24 and beyond future Genesis Energy Stakeholder Day 2020 43.
Slide 44: Our Horizon Targets
Our Horizon 1 Targets Horizon 1 Targets • Retail EBITDAF - $15m • Delivering sales / service / • Wholesale EBITDAF - $30m billing platform • Delivering core data platform Driven by Empowering • Kupe Strategic review – mid 2021 • Churn New Zealand’s • Skills complementing a • Small business share sus
Slide 45: Opportunities to grow earnings and de-risk carbon exposure
A number of opportunities to grow earnings and de-risk carbon exposure Horizon 2 FY24+ Horizon 1 FY22-24 Restructured Retail growth Leveraging new Growth in core legacy gas contracts opportunities technology platform Markets (electrification) Waipipi Baseload thermal transition Increasing value in (
Slide 46: Genesis is well positioned for market uncertainties
Genesis is well positioned for market uncertainties Market Industrial Gas Pace of Carbon uncertainties closures availability electrification pricing Largest residential supplier We have Transition Future-gen long-term rights to expected to benefit will lower gas electricity Genesis’ Largely emission
Slide 47: Stable capex outlook and strengthening balance sheet
Stable capex outlook and strengthening balance sheet CAPEX OUTLOOK DEBT/EBITDAF Baseline CAPEX spend Upcoming CAPEX decisions (Kupe dev & billing/sales platform) Current guidance up to $95m S&P BBB+ FY21 FY22 FY23 FY24 FY25 FY20 FY21 FY22 FY23 FY24 BALANCE SHEET CAPACITY FREE CASH FLOW AND DIVIDEND
Slide 48: Our commitments; Why invest in Genesis?
Our commitments Why invest in Genesis? Distinctive customer Attractive growing experiences dividend Improve customer Net Promoter Score Earnings growth and improved balance sheet Limit climate change Science based target Reducing carbon for 1.5°C by 2025 exposure Stable diverse earnings Strong team
Slide 49: 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