Genesis Energy Limited · NZX:GNE
Genesis Energy — Non-Deal Roadshow (March 2019)
40 slides from Genesis Energy's roadshow presentation, Mar 26, 2019
Slide 1: Genesis Investor Roadshow Presentation
MARKET RELEASE Date: 26 March 2019 NZX: GNE / ASX: GNE GENESIS INVESTOR ROADSHOW PRESENTATION For personal use only Genesis Energy will be meetings with investors this week in Melbourne, Sydney and Brisbane. CEO Marc England, CFO Chris Jewell, and James Magill, Executive General Manager of Customer
Slide 2: Presenters and roadshow cities
For personal use only Marc England – CHIEF EXECUTIVE OFFICER Chris Jewell – CHIEF FINANCIAL OFFICER James Magill – EXECUTIVE GROUP MANAGER CUSTOMER & INNOVATION Australia: Melbourne, Sydney, Brisbane
Slide 3: Disclaimer
Disclaimer For personal use only 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 inv
Slide 4: Our investment proposition is a strong yield underpinned by growth
Our investment proposition is a strong yield underpinned by growth For personal use only 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% $3.00
Slide 5: Supplementary dividend for Australian investors
Supplementary dividend for Australian investors For personal use only DIVIDEND CENTS PER SHARE (NZ$) & 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 term
Slide 6: The New Zealand Market
For personal USe Only GENESIS ENERGY LIMITED | ] The New Zealand Market genesis
Slide 7: About New Zealand
About New Zealand — Good growth in a stable political and regulatory environment For personal use only 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 Wor
Slide 8: New Zealand's domestic energy market
New Zealand’s domestic energy market — Deregulated unsubsidised market with an established operating system For personal use only 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 maj
Slide 9: Core markets stable or growing
Core markets stable or growing For personal use only 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 20
Slide 10: …with electricity markets reflecting tighter capacity margins
…with electricity markets reflecting tighter capacity margins For personal use only 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
Slide 11: …and fuel markets tightening
…and fuel markets tightening For personal use only 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
Slide 12: Energy transformation is creating opportunities
Energy transformation is creating opportunities For personal use only 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 J
Slide 13: Regulatory environment
Regulatory environment For personal use only 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 chang
Slide 14: Genesis Energy Overview
For personal USe Only GENESIS ENERGY LIMITED Genesis Energy Overview genesis
Slide 15: About Genesis Energy
About Genesis Energy — Our vision is to be customers’ first choice for energy management For personal use only 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
Slide 16: Why Genesis?
Why Genesis? For personal use only Genesis Energy Limited Investor Roadshow March 2019 15.
Slide 17: Diversity of earnings across sectors, fuels and markets
Diversity of earnings across sectors, fuels and markets For personal use only 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% Electricit
Slide 18: 1H FY19 highlights
1H FY19 highlights EBITDAF For personal use only $ 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 yie
Slide 19: Outlook and guidance
Outlook and guidance — Updated guidance for FY19 EBITDAF is $360 to $375 million For personal use only 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 reflect
Slide 20: Our Company Strategy
For personal USe Only B \. GENESIS ENERGY LIMITED Our Company Strategy genesis
Slide 21: We are performing while transforming
We are performing while transforming For personal use only 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 segme
Slide 22: 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 For personal use only Fuels Brands Platform Genesis Energy Limited Investor Roadshow March 2019 21.
Slide 23: Our brand re-launch has helped us regain market leadership
Our brand re-launch has helped us regain market leadership For personal use only 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
Slide 24: Focusing on enhancing loyalty
Focusing on enhancing loyalty For personal use only 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 Futu
Slide 25: Our product led strategy
Our product led strategy For personal use only 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 Electr
Slide 26: Focus on growing business volume
BUSINESS SALES TEAM COVERAGE Focus on growing business volume FY17 FY19 For personal use only 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 monit
Slide 27: Integrated portfolio provides flexibility
Integrated portfolio provides flexibility For personal use only 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 Gene
Slide 28: Our emissions are largely hedged through to 2025
Our emissions are largely hedged through to 2025 For personal use only 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 lo
Slide 29: Enabling a more sustainable future
Enabling a more sustainable future We’re driving electric - Ohope Beach School joins Genesis signed up Whio population boosted For personal use only 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
Slide 30: The Kupe stake and fuel contract position provide commercial upside
For personal USe Only GENESIS ENERGY LIMITED The Kupe stake and fuel contract position provide commercial upside genesis
Slide 31: Kupe Gas Project
Kupe Gas Project For personal use only 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
Slide 32: Long-term Gas Contract Position
Long-term Gas Contract Position For personal use only 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 $8.5
Slide 33: Targeting FY21 EBITDAF of $400-430m
For personal USe Only p NN GENESIS ENERGY LIMITED Targeting FY21 EBITDAF of $400-430m genesis
Slide 34: The plan is in place to FY21 and beyond
The plan is in place to FY21 and beyond For personal use only 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 1
Slide 35: Sustained earnings and dividend growth
Sustained earnings and dividend growth For personal use only 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%
Slide 36: Appendices
Appendices For personal USe Only GENESIS ENERGY LIMITED genesis
Slide 37: HY19 Financial statements
HY19 Financial statements1 For personal use only 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 19
Slide 38: HY19 Debt information
HY19 Debt information For personal use only 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 $200 Adjusted Net De
Slide 39: HY19 Operational highlights
HY19 Operational highlights Customer Key Information HY19 HY18 Variance Wholesale Key Information HY19 HY18 Variance For personal use only EBITDAF ($ 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
Slide 40: For personal use only
For personal use only