Slide 1: Financial Results Presentation
Australian Pipeline Ltd ACN 091 344 704 | Australian Pipeline Trust ARSN 091 678 778 | APT Investment Trust ARSN 115 585 441 Level 25, 580 George Street Sydney NSW 2000 | PO Box R41 Royal Exchange NSW 1225 Phone +61 2 9693 0000 | Fax +61 2 9693 0093 APA Group | apa.com.au 25 August 2021 ASX ANNOUNCE
Slide 2: Results for the full year ended 30 June 2021
Results for the full year ended 30 June 2021 25 August 2021
Slide 3: Disclaimer
disclaimer This presentation has been prepared by Australian Pipeline Limited (ACN 091 344 704) as responsible entity of the Australian Investors should form their own views as to these matters and any assumptions on which any forward-looking statements are Pipeline Trust (ARSN 091 678 778) and APT
Slide 4: Solid financial and operational performance
Solid financial and operational performance • Solid financial performance in challenging market conditions, confirming APA’s resilient business model o Revenue up 0.7%, underlying EBITDA down 1.3%* o Profit after tax of $3.7m, driven by significant items including the $249.3 million non-cash Orbost
Slide 5: Relentless focus on safety and proven reliability in operations
Relentless focus on safety and proven reliability in operations Safety 30% reduction 99.9% Reliable in Total Recordable Gas transmission forefront of Injury Frequency Infrastructure nominations delivery our focus Rate (TRIFR) Improvements in contractor safety >97% Gas transmission compressors 16 ave
Slide 6: Strong progress executing strategy
Strong progress executing strategy Gas, electricity and • Growth pipeline in excess of $1.3b Next generation energy • Gruyere Hybrid Energy Microgrid renewables infrastructure • Achieved $600m FID in FY21, technologies • Parmelia Hydrogen Project in Australia and North 4 times more than FY20 (Pathfi
Slide 7: Growing organic growth pipeline supporting energy security needs
Growing organic growth pipeline supporting energy security needs East Coast Grid Expansion Northern Goldfields Interconnect Kurri Kurri Lateral Pipeline • Increasing winter peak capacity up to • A new 580km pipeline that increases • Development of gas supply to the Hunter 25% through two-staged expa
Slide 8: Gas continuing to play a critical role in supporting the energy transition
Gas continuing to play a critical role in supporting the energy transition Critical energy source − High heat source for hard-to-abate industrial sectors 2021 CEDA keynote address − Essential for energy security ….Gas firming is currently invaluable, − Preferred source of fuel for residential heatin
Slide 9: APA investing in the energy transition
APA investing in the energy transition Gruyere Hybrid Energy Microgrid Mica Creek Solar Farm Parmelia Hydrogen Project • Combined gas, renewable energy • Active engagement with customers • Phase 1 testing confirms technical and battery storge energy solution to develop a solar farm of capacity viabi
Slide 10: Strengthening communities through responsible energy development
Strengthening communities through responsible energy development Case study: Gibson Island Rehabilitation Project Stakeholder Advisory Panel APA contributed to the introduction of over 1,000 native Community engagement sounding board, including: plants • Council of Small Business of Australia • St V
Slide 11: Supporting a sustainable future, including a Net Zero 2050 ambition
Supporting a sustainable future, including a Net Zero 2050 ambition Net Zero ambition Social Performance • Announced ambition for net zero operations Positive active engagement with First Nations' emission by 2050 communities, with mutually beneficial outcomes including: • Development of interim tar
Slide 12: Investing in the community and our people
Investing in the community and our people Community engagement People • A more flexible approach to landholder • Increased senior leadership female representation engagement during COVID-19 increased total by almost 7% and launched our Inclusion and landholder contact visits to over 10,000 Diversity
Slide 13: Our people are the key to our success
Our people are the key to our success APA FY21 Results Investor Presentation 12
Slide 14: Financial performance
Financial performance Adam Watson Chief Financial Officer APA FY21 Results Investor Presentation 13
Slide 15: FY21 financial summary
FY21 financial summary Solid financial performance in challenging market conditions, confirming APA’s resilient business model $2.1 billion Revenue excluding pass-through • Revenue up 0.7%, underlying EBITDA down 1.3% and FCF down 5.7%* up 0.7% • Higher resources customer demand in the West Coast •
Slide 16: FY21 results summary
FY21 results summary Results $ million FY21 FY20(1) Change Key Drivers Revenue(2) 2,144.5 2,129.5 0.7% Moderate revenue growth Softer recontracting, higher investment in strategic development Underlying EBITDA(3) 1,633.0 1,653.9 (1.3%) opportunities and capability, higher insurance and compliance co
Slide 17: FY21 EBITDA
FY21 EBITDA Key Drivers • Tariff escalation impacted by lower CPI during FY21 • Operational revenue reduction consistent with 1H21: • Softer contract renewals and reduced industrial and commercial volumes across the East Coast • Positive operational revenue from West Coast mining regions and Diamant
Slide 18: FY21 operating expenditure
FY21 operating expenditure Key Drivers • New assets contribution from Orbost Gas Processing Plant since August 2020 • Operations and maintenance cost growth consistent with inflation • Asset Management costs favourable following system upgrades in FY20 • Greater investment in development opportuniti
Slide 19: FY21 Free Cash Flow and distributions
FY21 Free Cash Flow and distributions Key Drivers • Non-recurring distribution and interest income from SEAGas in FY20 • Higher tax payments due to increased taxable income FY21 distributions • Higher interest paid impact with Orbost interest no longer capitalised • FY21 final distribution of 27.0 c
Slide 20: FY21 capital expenditure
FY21 capital expenditure $ Million FY21 FY20(1) Key drivers: Growth Capex Major growth capex projects: Regulated 50.2 46.5 • Western Outer Ring Main project Non-Regulated • Wallumbilla Hub capacity upgrade • Orbost Gas Processing Plant improvements East Coast Gas 47.9 184.2 • Northern Goldfields Int
Slide 21: Growing organic growth pipeline, now in excess of $1.3 billion
Growing organic growth pipeline, now in excess of $1.3 billion FY22 FY23 FY24 Select major growth projects Northern Goldfields Interconnect $460m Gruyere Hybrid Energy Microgrid $38m Western Outer Ring Main $167m ECG Expansion stage 1 & 2* $270m Kurri Kurri Pipeline* Notes: *East Coast Grid expansio
Slide 22: Strong balance sheet to support growth
Strong balance sheet to support growth Benefits of the $2.2bn debt refinance in March 2021: • Issued at an average tenor of 11 years and all-in cost of 536 3.5% 50 • Annualised FY22 interest cost reduced to 4.8% from 5.2%(1) 650 • Average term to maturity of APA's drawn debt portfolio increased to 7
Slide 23: Strong long-term outlook supporting ongoing distribution growth
Strong long-term outlook supporting ongoing distribution growth Near term growth in Free Cash Flow Distribution policy supporting growth Ongoing investment to drive growth • Lower ongoing interest costs following • Targeted payout ratio of 60-70% of Free • Ensuring growth is enduring and execution o
Slide 24: Capital strategy complements strong investment fundamentals
Capital strategy complements strong investment fundamentals Stable business operations Enhanced investor Strong distributions (60% to and solid cash flow engagement and 70% of free cash flow) conversion communication High level of liquidity reflects Low cost of capital and Strong balance sheet prude
Slide 25: Summary and Outlook
Summary and Outlook Rob Wheals CEO and Managing Director APA FY21 Results Investor Presentation 24
Slide 26: Results summary and outlook
Results summary and outlook FY21 Summary FY22 Outlook • Solid FY21 financial performance in challenging market • FY22 distribution per security 53.0 cps, a 3.9% increase on conditions, confirming APA’s resilient business model FY21 • Improved our safety performance and maintained reliable • Backdrop
Slide 27: Strategy and capability to deliver our vision
Strategy and capability to deliver our vision Strategy Growth opportunities Technology and innovation Aligned with purpose and vision Pipeline growing and now Pathfinder Program and targeted at energy in excess of $1.3 billion, up delivering new energy infrastructure growth markets from $1.0 billion
Slide 28: Supplementary information
Supplementary information APA FY21 Results Investor Presentation 27
Slide 29: APA overview
APA overview APA FY21 Results Investor Presentation 28
Slide 30: Proven success as a leading Australian energy infrastructure business
Proven success as a leading Australian energy infrastructure business The drivers of our success to date Diverse energy infrastructure portfolio • Consolidated pipeline assets across Australia over the past 20 years Gas infrastructure Power Generation − Built the East Coast Grid Transmission (1) Ren
Slide 31: Existing APA operational footprint diversified across energy infrastructure assets
Existing APA operational footprint diversified across a range of energy infrastructure assets Assets Gas pipelines, processing & storage Gas-fired generation Renewables generation Electricity transmission Customers Servicing ~100 wholesale and >1.4 million network customers Operations >1,200 employe
Slide 32: Low risk business model
Energy Infrastructure revenue by Low risk business model Revenue type 10.7% Capacity charge 2.6% Regulated 7.8% ~88% Contracted fixed Take or Throughput & other variable • Solid risk management processes in place pay/ Flexible short term regulated • Continue to manage counterparty risks by: Other 77
Slide 33: Group Structure
Group Structure Group structure Australian Pipeline Trust APT Investment Trust (APT) (APTIT) • APA Group is listed as a stapled structure on the Australian Australian Pipeline Limited Securities Exchange (ASX:APA) (Responsible Entity) • APA is comprised of two registered managed investment schemes:
Slide 34: Financial Metrics
Financial Metrics APA FY21 Results Investor Presentation 33
Slide 35: Historical financial performance
Historical financial performance Underlying EBITDA Free Cash Flow $1,654 $1,633 $957 $1,574 $905 $919 $894 $902 $1,470 $1,518 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Total Asset Distribution $15,994 50c 51c $15,046 $15,227 $15,429 47c $14,743 45c 44c FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19
Slide 36: Revenue and underlying EBITDA by business segment
Revenue and underlying EBITDA by business segment $ Million FY21 FY20(1) FY19(1) FY18(1) FY17 Revenue Energy Infrastructure East Coast Gas 768.6 771.5 766.9 760.6 764.4 West Coast Gas 328.8 323.2 289.0 263.6 261.4 Wallumbilla Gladstone Pipeline 552.3 541.6 545.3 518.4 490.4 Power Generation 339.6 33
Slide 37: Underlying EBITDA by state
Underlying EBITDA by state $ million FY21 FY20(1) Change Key drivers Queensland 995.0 1007.9 (1.3%) • Softer contract renewals New South Wales 151.5 160.8 (5.8%) • Lower contracted capacity • Orbost Gas Processing Plant contribution started in August Victoria & South Australia 115.8 104.2 11.1% 2020
Slide 38: 5 year normalised financials
5 year normalised financials Financial Performance FY21 FY20(1) FY19(1) FY18(1) FY17 Revenue $m 2,605.3 2,590.6 2,452.2 2,386.7 2,326.4 Revenue excluding pass-through(2) $m 2,144.5 2,129.5 2,031.0 1,941.4 1,888.3 Underlying EBITDA(3) $m 1,633.0 1,653.9 1,573.8 1,518.5 1,470.1 Total reported EBITDA(3
Slide 39: Historical underlying EBITDA by asset – Energy Infrastructure
Historical underlying EBITDA by asset – Energy Infrastructure $ millions FY21 FY20 FY19 FY18 FY17 East Coast Grid Wallumbilla Gladstone Pipeline 549.7 538.9 542.4 515.9 488.0 South West Queensland Pipeline 232.8 254.4 250.0 244.3 242.4 Moomba Sydney Pipeline (1) 151.5 160.8 149.4 147.1 149.5 Victori
Slide 40: Net Profit Before Tax to Cash Tax Reconciliation FY21
Net Profit Before Tax to Cash Tax Reconciliation FY21 Key Drivers $ millions Source APA Group Net Profit Before Tax 66.6 Consolidated statement of P&L add Accounting depreciation 491.9 Financial statements note 5 Impairment of property plant & equipment (Orbost) 249.3 Financial statements note 5 Amo
Slide 41: Debt maturity profile
Debt maturity profile APA maintains diversity of funding sources and spread of maturities Undrawn committed facilities 536 AUD DCM bonds(2) USD DCM bonds(3) 1,396 (USD 1,100) 1,140 (USD 886) 879 (USD 683) 1,109 1,018 928 500 774 742 381 (USD 300) 650 452 200 50 50 133 FY22 FY23 FY24 FY25 FY26 FY27 F
Slide 42: Energy market dynamics and overview
Energy market dynamics and overview APA FY21 Results Investor Presentation 41
Slide 43: Australian gas market supply source transformation
Australian gas market supply source transformation AEMO forecast suggest shortfall in Eastern New Supply required to meet peak southern Australia gas production vs demand demand 2,000 PJ 2,116 PJ 1,943 PJ Forecast demand Northern production 17.2% 1,500 PJ storage 16.3% Supply Gap(1) 62.4% 1,000 PJ O
Slide 44: Electricity market transition
Electricity market transition AEMO Integrated System Plan 2020 State based support for continued renewables investment 50 GW 40 GW Solar Category NSW 1 16% Generation Capacity 30 GW Category QLD 2 11% 50% Wind 20 GW Category VIC 3 22% 50% 10 GW Dispatchable(1) Category SA 4 50% 100% 0 GW Coal TASTAS
Slide 45: Regulation of Australian gas pipelines
Regulation of Australian gas pipelines APA pipelines by regulation type • In FY21, 7.8% of Energy Infrastructure revenue was from full regulated assets • Gas pipelines are regulated by the Australian Energy Regulator (AER) or, the Economic Regulation Authority of Western Australia (ERA) • Australia’
Slide 46: Regulation of Australian gas pipelines (con't)
Regulation of Australian gas pipelines (con’t) Schedule of Current regulatory period 2022 2023 2024 2025 2026 regulatory reset dates for APA Roma Brisbane Pipeline Victorian Transmission System Goldfields Gas Pipeline Amadeus Gas Pipeline Access • Apply for a term, generally 5 years arrangement • Se
Slide 47: For further information
For further information Mark Ley General Manager, Investor Relations M: +61 2 8044 7045 E: mark.ley@apa.com.au www.apa.com.au