Slide 1: Financial and Operational Results
Financial and Operational Results HALF YEAR ENDING 31 DECEMBER 2023 27 FEBRUARY 2024
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 Financial Performance • Financial Performance • Segment Performance • Outlook & Market Commentary • Q&A 3
Slide 4: Overview of Financial Performance
OVERVIEW OF FINANCIAL PERFORMANCE 4
Slide 5: Overview of financial performance
Overview of financial performance H1 FY24 vs H1 FY23 Discontinued 128 Figures shown in Operations Metering $NZD Millions 57 55 Discontinued Operations Natural Gas 571 260 559 92 95 99 188 7 7 7 2 225 238 173 185 32 5 159 181 4 63 22 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 Adjusted Capital
Slide 6: Financial Performance
FINANCIAL PERFORMANCE 6
Slide 7: Earnings from continuing operations are up $12m or 7%
Earnings from continuing operations are up $12m or 7% H1 Year on Year Adjusted EBITDA Movement ($M) +6 +1 185 173 +4 FY23 Regulated Gas Corporate FY24 Networks Trading and Other* *Corporate and Other includes Corporate, VTS, HRV, PowerSmart and Vector Fibre. Corporate and Other is not a reportable s
Slide 8: NPAT from continuing operations is $22m
NPAT from continuing operations is $22m H1 Year on Year NPAT from Continuing Operations Movement ($M) +43 -60 +12 -4 -14 63 -19 22 FY23 Adj. EBITDA Capital Depreciation Net Interest Impairment Other FY24 Contributions and Amortisation “Other” includes fair value change on financial instruments, shar
Slide 9: Metering Transaction – Recap
Metering Transaction – Recap • On 30 June 2023, we completed the sale of 50% interest in Vector Metering to QIC. Now known as Bluecurrent. • The sale resulted in proceeds of $1.75b to Vector and this was used to reduce debt with gearing decreasing from 58% June 22 to 33% June 23. • Vector’s interest
Slide 10: Gross capex increase of 6% driven by replacement work on the Network
Gross capex increase of 6% driven by replacement work on the Network post last year’s extreme weather Gross Capital Expenditure ($M) H1 Year on Year Capex Movement ($M) Net capex 238 +31 +0 -9 238 Capital contributions 225 Gas Trading 225 -9 & Other 179 190 175 93 Gross Capex 97 141 45 51 72 41 220
Slide 11: Group debt
Group debt Vector’s Standard and Poor’s credit rating remains at BBB+ with a positive outlook Moody’s credit rating is Baa1 with a positive outlook Net Economic Debt and Gearing ($B) Debt Maturity Profile ($M) 57% 59% 4,000 56% 60% 53% 50% 3,500 47% 44% 50% 250 3,000 3.41 3.16 36% 3.01 40% 307 2,500
Slide 12: Segment Performance
SEGMENT PERFORMANCE 12
Slide 13: Network earnings higher
Network earnings higher • Electricity revenue is higher due to: Adjusted EBITDA Movement ($M) − An increase in net connections; +15 +3 -7 -7 201 197 − 3.9% increase in volume; and − Price adjustments reflecting the impact of higher historical inflation. We are now recovering this through higher pric
Slide 14: Gas Trading earnings benefitted from higher Ongas LPG margins
Gas Trading earnings benefitted from higher Ongas LPG margins Adjusted EBITDA Movement ($M) • Improved performance from the LPG business. Higher +6 +1 -1 13 LPG revenue due to higher prices and lower cost of LPG input prices including CP (Saudi Aramco price) is partially offset by higher cost of tra
Slide 15: Outlook & Market Commentary
OUTLOOK & MARKET COMMENTARY 15
Slide 16: Outlook
Outlook • Auckland growth expected to continue. − On track to exceed c16,000 new electricity connections in FY24, up 2,000 from the indication provided in August 23 − Connections & infrastructure activity remain elevated, necessitating significant capital expenditure • We are currently tracking towa
Slide 17: Interim Dividend
Interim Dividend • Interim dividend of 9.25 cents per Dividend (cents per share) share with no imputation • Dividend record date of 28 March 2024 and payment date of 9 April 5.50 2024 • We have deferred a decision on our future dividend policy pending 8.00 8.00 8.25 8.25 8.50 8.50 8.50 7.75 7.75 8.0
Slide 18: Q&A Any Questions?
Q&A ANY QUESTIONS? 18
Slide 19: Appendices
APPENDICES 19
Slide 20: Segment Results – Continuing Operations
Segment Results – Continuing Operations Inter-Segment Networks Gas Trading Corporate & Other1 Total Group Elimination H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 Δ Δ Δ Δ FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 EBITDA Revenue excl. Capital 369 376 +2% 63 68 +9% 43 45 +4% (13) (12) 462 478 +3% Contributio
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Vector’s standard profit measure prepared under New Zealand GAAP GAAP to Non-GAAP reconciliation H1 FY23 H1 FY24 is net profit. Vector has used non-GAAP profit measures when Group EBITDA and Adjusted EBITDA $M $M discussing financial performance in this document. The
Slide 22: End
END 22
Slide 23: Supplementary Interim Information
Supplementary Interim Information Regulated Networks Adjusted EBITDA $m H1 FY2013 H1 FY2014 H1 FY2015 H1 FY2016 H1 FY2017 H1 FY2018 H1 FY2019 H1 FY2020 H1 FY2021 H1 FY2022 H1 FY2023 H1 FY2024 Electricity 190.8 174.5 169.9 172.6 172.2 170.1 177.9 168.3 174.9 166.3 173.7 175.0 Gas Distribution Aucklan
Slide 24: 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 FY2024 Q1 620 524 839 616 878 872 560 674 624 368 397 228 Q2 415 566 713 727 718 728 700 778 848 788 382 443 Q3 508 558 584 809 626 468 378 484 582 30 617 Q4 377 892 645 605 126 491 775 382 458
Slide 25: Gas Distribution Adjusted EBITDA, Capital Contributions, Regulated Capex
Gas Distribution Adjusted EBITDA $m FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 H1 24.5 23.1 21.4 23.8 23.5 22.6 20.8 20.9 21.0 19.2 23.3 26.3 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 37.8 38.4 36.3 45.