Slide 1: FY22 Results Presentation
FY22 Results Presentation FY22 Results Presentation Presenters: Marc England Chief Executive Officer James Spence Chief Financial Officer Attending Roadshow: Tracey Hickman Chief Customer Officer (Incoming Interim Chief Executive Officer) 19 August 2022
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Genesis Energy Limited (‘Genesis While all reasonable care has been taken in compiling this presentation, to Energy’) for information purposes only. This disclaimer applies to this the maximum extent permitted by law, Genesis Energy accepts no docume
Slide 3: Agenda
1. Performance Highlights 2. Financial Performance 3. Operational Performance 4. Strategic Outlook 5. FY23 Guidance 6. Appendix
Slide 4: Performance Highlights
Performance Highlights Financial Operational Social EBITDAF 1 Declining Customer Churn Hours of Free Power Donated $440m 12.8% 130,000 24% increase on FY21. 6% increase on By our customers and the company Net Churn, down from 15.9% in FY21 adjusted FY21 EBITDAF 2 to people in need NPAT Greenhouse Ga
Slide 5: Financial Performance
Financial Performance
Slide 6: FY22 Financial Summary
FY22 Financial Summary FY22 FY211 Variance % Movements $ MILLIONS Revenue 2,834.1 3,221.2 -387.1 -12% q EBITDAF 440.3 354.6 85.7 24% p NPAT 221.9 31.7 190.2 600% p p 2 Operating Expenses 298.7 274.3 24.4 9% Operating Cash Flow 261.7 319.5 -57.8 -18% q p 3 Free Cash Flow 263.9 189.5 74.4 39% Capital
Slide 7: FY22 EBITDAF
FY22 EBITDAF EBITDAF1 $ MILLIONS 550 500 9 10 45 450 (24) 56 (10) 440 400 415 2 350 355 300 250 200 150 100 50 0 FY21 EBITDAF Electricity Gas LPG Other Operating Kupe FY22 EBITDAF Gross Margin Gross Margin Gross Margin Gross Margin Expenses Gross Margin 1 Due to the implementation of IFRIC agenda de
Slide 8: Gross Margin Movements
Gross Margin Movements Electricity: • Higher hydro inflows, reduced thermal running ELECTRICITY GROSS MARGIN GAS GROSS MARGIN requirements. • Reduced swaption volumes and a full year’s 600 40 generation at Waipipi significantly improved derivative 500 38 settlement. 529 30 473 • FY21 included costs
Slide 9: Operating Expenditure
Operating Expenditure OPERATING EXPENDITURE $ MILLIONS 7 299 8 9 274 FY21 Staff Costs Digital Other FY22 Operating Transformation Operating Costs Costs • Staff Costs - Employee costs increased, as Genesis worked to retain staff in a competitive market. Investment in Covid testing and talent acquisit
Slide 10: Net Profit After Tax
Net Profit After Tax NPAT1 $ MILLIONS 222 222 (18) 86 (20) (4) 32 (75) FY21 NPAT Change in Depreciation Net Finance costs Income Tax Fair Value and Revaluation of FY22 NPAT EBITDAF (DDA) Expense Other Gains / Loss Generation Assets • Higher depreciation due to upwards revaluation of generation asset
Slide 11: Capital Expenditure
Capital Expenditure Stay in business capital2 of $58m includes: CAPITAL EXPENDITURE1 $ MILLIONS • Completion of a Tuai generator refurbishment, the first of three being replaced over a three-year period increasing generation capacity by 2MW. 106 • Completed first outage of the Piripaua power station
Slide 12: Cash Flow and Balance Sheet
Cash Flow and Balance Sheet FIXED INTEREST RATE PROFILE • Adjusted net debt increased by $76m in the year to $1.35b. Key 8.0% 87% 90% drivers for this were the increase in inventory and the payment of 79% 72% 80% costs relating to the Beach arbitration. 68% 68% 7.0% 64% 70% • Investing outflows incl
Slide 13: Dividends
Dividends DIVIDEND PER SHARE & PAY-OUT HISTORY 17.2 17.4 17.6 130% • Genesis will pay a final dividend of 8.9 cps bringing total 16.6 16.9 17.05 FY22 dividends to 17.6 cps. 106% 110% 97% 97% 89% 89% • The stronger free cash flow enabled Genesis to retain more 90% earnings for future growth while imp
Slide 14: Operational Performance
Operational Performance
Slide 15: Empowering Customers Through Energy IQ
Empowering Customers Through Energy IQ • Genesis launched Energy IQ version 2.0 in FY22, transforming the user experience with a modern look and feel, bringing energy to life and incorporating interactive and customisable features. • The updated version includes new features such as LPG order tracki
Slide 16: Record Levels of Residential Customer Satisfaction and Loyalty
Record Levels of Residential Customer Satisfaction and Loyalty • Residential customer satisfaction and loyalty continued to grow RESIDENTIAL NETBACK GROWTH with net customer churn falling to 12.8%. $150 $20 • Customer satisfaction was strong, with interaction Net Promoter $140 Score (iNPS) growing t
Slide 17: Supporting Business in the Transition to a Renewable Future
Supporting Business in the Transition to a Renewable Future • Value growth continued in SME with electricity netback up and 30% of SME NETBACK customers re-contracting in the year. Gas netbacks grew as customers re-contracted at current market prices. $130 $20 • Genesis continues to use partnerships
Slide 18: Frank Energy digital sales and churn
Digital Sales Mix ICP Movement 51.4% +2.7k 46.1% +2.0k +1.5k 29.6% 30.5% • In November 2021 Energy Online was rebranded as Frank*Energy; an affordable, -1.5k no-contract offering for customers who want an energy provider that “sells it to FY21 H1 FY21 H2 FY22 H1 FY22 H2 FY21 H1 FY21 H2 FY22 H1 FY22
Slide 19: Managing the Transition to Decarbonisation
Managing the Transition to Decarbonisation • Genesis’ priority remains decarbonising our portfolio through CARBON HEDGE POSITION displacing thermal generation and supporting our customers in making sustainable choices. 100% • Additional carbon hedges were secured in FY22 and Genesis is now fully hed
Slide 20: Keeping our People Safe, Motivated and Valued
Keeping our People Safe, Motivated and Valued • Our employees remained safe and engaged through a productive year at Genesis. Our employee NPS score remained strong at over 65 Leadership Progression Gap throughout the year. FY21 Male 55% Female 45% • Diversity and inclusion remains a priority for Ge
Slide 21: Delivering Sustainable Outcomes for our People, Communities and New Zealand
Delivering Sustainable Outcomes for our People, Communities and New Zealand • 44% reduction in Scope 1 and 2 emissions since FY21. A low carbon • 29% of C&I customers purchasing energy services, including decarbonisation roadmaps. future for all • Trialling of Energy as a Service programmes to suppo
Slide 22: Sustainability Reporting
Sustainability Reporting CLIMATE-RELATED RISK ASSESSMENT This year the following disclosures have been made and are available for review: • Climate Risk Report. Outlines climate-related financial risks and opportunities under different climate scenarios. The report aligns with the TCFD Framework. •
Slide 23: Strategic Outlook
Strategic Outlook Empowering New Zealand’s sustainable future 23.
Slide 24: A Refreshed Leadership Team to Navigate the Transition
A Refreshed Leadership Team to Navigate the Transition Marc England Tracey Hickman James Spence Chief Executive Chief Customer Officer Chief Financial Officer MBA, MENG MA (Hons), AMP (Harvard) BSc, CA Joined Genesis in May 2016, Over 28 years energy sector Experience as CFO at three previous execut
Slide 25: Together, Inspiring Millions of Sustainable Choices
Together, Inspiring Millions of Sustainable Choices Sustainable choices Genesis offers COMPARE Sustainable choices Genesis could to customers now: offer to customers in the future: CHOOSE EVerywhere Decarbonising Gas & LPG Encouraging EV usage through Through fuel switching or carbon offsets flexibi
Slide 26: An Active Enabler of New Zealand's Energy Transition
An Active Enabler of New Zealand’s Energy Transition FUTURE-GEN PORTFOLIO PIPELINE Power Purchase Agreements (PPA) 3,000 2,500 • Inflationary pressures have increased costs of renewable development. 2,000 MWh 1,500 • Due to delays and increasing costs, Mercury have advised 1,000 that Kaiwaikawe fina
Slide 27: New Zealand, Insulated from Global Energy Crisis so far
New Zealand, Insulated from Global Energy Crisis so far • The New Zealand electricity market has, to date, been protected from the GLOBAL WHOLESALE ELECTRICITY FUTURES1 unprecedented rise in global energy prices. The domestic market’s only 800 global link is through imported coal. 700 600 • Genesis
Slide 28: Genesis to Launch Market Security Options to Reduce Price Volatility
Genesis to Launch Market Security Options to Reduce Price Volatility How Market Security Options will work • The existing Swaption contracts with Meridian and Contact expire in December 2022. Commercial terms • On August 30th, market participants will be offered the have not been reached to renew th
Slide 29: Appropriate Regulatory Settings are Required for a Stable Transition
Appropriate Regulatory Settings are Required to Ensure a Stable Transition to a Low Carbon Future Market Challenges Genesis Position • To date, Genesis' coal stockpile has provided dry period support to • Genesis is proposing Market Security Options to provide market Dry Year Support New Zealand’s r
Slide 30: Guidance
Guidance
Slide 31: Guidance
Guidance FY23 EBITDAF is expected to be around $455 million, subject to hydrological conditions, gas availability, and any material adverse events or unforeseeable circumstances; • The current Swaption contracts will end in December 2022. Depending on the outcome of negotiations and market condition
Slide 32: Appendix
IX Append a
Slide 33: Electricity and Gas Gross Margin Breakdown
Electricity and Gas Gross Margin Breakdown FY22 FY21 Variance Volume Rate per unit ($m) Volume Rate per unit ($m) Volume Rate per unit ($m) Electricity Retail Sales C&I 1.9 TWh $142/MWh 273.6 2.3 TWh $141/MWh 320.6 -0.4 TWh $1/MWh (47.0) Retail Sales Mass Market 3.9 TWh $262/MWh 1,016.4 4.0 TWh $254
Slide 34: LPG and Other Gross Margin Breakdown
LPG and Other Gross Margin Breakdown FY22 FY21 Variance Volume Rate per unit ($m) Volume Rate per unit ($m) Volume Rate per unit ($m) LPG Retail Sales 44.3 kt $1,946/t 86.3 43.5 kt $1,905/t 82.9 0.8 kt $41/t 3.4 Wholesale Sales 17.1 kt $1,174/t 20.1 15.5 kt $765/t 11.8 1.6 kt $409/t 8.3 Emission Uni
Slide 35: Kupe Gross Margin and Reconciliation to EBITDAF
Kupe Gross Margin and Reconciliation to EBITDAF FY22 FY21 Variance Volume Rate per unit ($ m) Volume Rate per unit ($ m) Volume Rate per unit ($ m) Oil Sales 292 Kbbl $85.9/bbl 25.1 306 Kbbl $75.5/bbl 23.1 -14 Kbbl $10.5/bbl 2.0 Gas Sales 11.1 PJ $7.1/GJ 78.8 10.6 PJ $8.5/GJ 89.8 0.5 PJ -$1.4/GJ (11
Slide 36: Financial Summary
Financial Summary FY22 FY211 Variance FY22 FY211 Variance Income Statement Balance Sheet ($m) ($m) ($m) ($m) Revenue 2,834.1 3,221.2 (12.0)% Cash and Cash Equivalents 105.6 104.3 1.2% Expenses (2,393.8) (2,866.6) (16.5)% Other Current Assets 626.0 825.1 EBITDAF 440.3 354.6 24.2% Non-Current Assets 4
Slide 37: Debt Information
Debt Information GENESIS DEBT PROFILE AT 30 JUNE 2022 Debt Information FY22 FY21 Variance $m ($m) ($m) $300 Total Debt $ 1,493 1,428 $250 Cash and Cash Equivalents $ 106 104 Headline Net Debt $ 1,387 1,324 +4.8% $200 $150 USPP FX and FV Adjustments $ 35 48 $100 Adjusted Net Debt1 $ 1,352 1,276 +6.0%
Slide 38: Operational Metrics
Operational Metrics Retail Key Information FY22 FY21 Variance Retail Key Information FY22 FY21 Variance EBITDAF ($ millions) 55.7 169.2 (67.1)% Retail Electricity Sales (GWh) 5,806 6,241 (7.0)% Customers with > 1 Fuel 133,550 128,214 4.2% Retail Gas Sales (PJ) 7.4 8.0 (7.5)% Electricity Only Custome
Slide 39: Operational Metrics
Operational Metrics Wholesale Key Information FY22 FY21 Variance Kupe Key Information FY22 FY21 Variance EBITDAF ($ millions) 353.5 144.1 145.3% EBITDAF ($ millions) 77.4 87.4 (11.4)% Renewable Generation (GWh) 2,743 2,526 8.6% Gas Production (PJ) 11.1 10.6 4.7% Thermal Generation (GWh) 3,736 5,501
Slide 40: Glossary – Gross Margin Breakdown
Glossary – Gross Margin Breakdown ELECTRICITY Retail Sales C&I Sale of electricity to commercial and industrial customers. Retail Sales Mass Market Sale of electricity to residential and small business customers. Wholesale Sales Sale of generated electricity onto spot market, excluding PPA settlemen
Slide 41: Glossary – Operational Metrics
Glossary – Operational Metrics RETAIL Brand Net Promoter Score Based on survey question “How likely would you be to recommend Genesis Energy/Energy Online to your friends or family?”. Interaction Net Promoter Score Based on survey question “Based on your recent interaction with GE/EOL, how likely wo
Slide 42: Glossary – Operational Metrics
Glossary – Operational Metrics POWER PURCHASE AGREEMENTS Wind (GWh) Energy purchased through long term agreements with generator Average Price Received for Generation - GWAP Price received at production node. (E.g. Waipipi at WVY1101 node) ($/MWh) WHOLESALE Average Retail Electricity Purchase Price
Slide 43: Investor Relations Enquiries
Investor Relations Enquiries Tim McSweeney GM Investor Relations & Market Risk +64 27 200 5548