Chesapeake Utilities Corporation · NYSE:CPK
Chesapeake Utilities — SunTrust Robinson Humphrey Power, Utilities & Midstream Summit 2020
32 slides from Chesapeake Utilities's conference presentation, Apr 7, 2020
Slide 1: SunTrust Robinson Humphrey Power, Utilities & Midstream Summit
SunTrust Robinson Humphrey Power, Utilities & Midstream Summit April 7, 2020 Exhibit 99.1
Slide 2: Forward Looking Statements and Other Disclosures
Forward Looking Statements and Other Disclosures COVID-19 Impact: At this time, we cannot quantify the impact that the COVID-19 virus will have on the economy, and more particularly, on the Company. The gross margin, earnings and capital estimates we have included herein do not reflect any estimates
Slide 3: Business Overview
Business Overview Diversified Energy Delivery Business Natural Gas Distribution Delaware, Maryland, Florida Electric Distribution Florida Propane Distribution and AutoGas Delaware, Maryland, Pennsylvania, Virginia, Florida Natural Gas Transmission Delaware, Maryland, Pennsylvania, Florida Marlin Mob
Slide 4: Culture of Sustainability
Culture of Sustainability Modern pipeline infrastructure with zero miles of cast iron Invested $144 million in recent years in Gas Reliability and Infrastructure Project in Florida Own and operate Eight Flags, one of the most energy efficient combined heat and power plants (CHP), which displaced rel
Slide 5: Financial Metrics
Financial Metrics 5
Slide 6: Market Capitalization Increased
Market Capitalization Increased Performance is Driving Increased Value
Slide 7: Growth in Basic GAAP EPS and Dividends
Growth in Basic GAAP EPS and Dividends A Long-Term, Successful Track Record We target dividend growth supported by EPS growth *
Slide 8: Capital Projects – High Return / High Investment
Capital Projects – High Return / High Investment Peer ROE vs. Capital Expenditures (Three Year Performance - January 2017 – December 2019) 8 Chesapeake Utilities Three-Year Performance vs. Normal Peer Group As of 12/31/19 CPK Med 75th Cap EX 21.7% 12.8% 14.2% EPS Growth 11.2% 7.5% 13.5% ROE 11.9% 10
Slide 9: Return on Equity
Return on Equity Chesapeake ROE Consistently Exceeds the Peer Median and 75th Percentile * 10-Year Peer Median – 8.86% * 10-Year Peer 75th Percentile – 10.08% * Normal Comparative Peer Group
Slide 10: Generating Solid Shareholder Returns Over the Long-Term
Generating Solid Shareholder Returns Over the Long-Term Source: Bloomberg Normal Comparative Peer Group
Slide 11: Recent Stock Volatility
Recent Stock Volatility Chesapeake Stock Price Performance vs. Market and Peers CPK all-time high stock price of $101.29 on February 13, 2020 Impact of COVID – 19 on stock market volatility in recent weeks. Normal Comparative Peer Group
Slide 12: Financial Metrics Performance
Financial Metrics Performance Source: Bloomberg Normal Comparative Peer Group
Slide 13: Key Projects Driving Growth
Key Projects Driving Growth 13
Slide 14: 2019 Strategic Accomplishments
2019 Strategic Accomplishments 14 Engaged, energized Chesapeake team to support growth EPS growth: (Basic) 9.5% annualized dividend growth supported by earnings growth Exited Energy Marketing business after strategic review generating $5.4 million after-tax gain Completed Ohl and Boulden acquisition
Slide 15: 2020 – 2022 Strategic Growth Initiatives
2020 – 2022 Strategic Growth Initiatives 2019E: $170mm to $185mm 2018: $283mm 2020 – 2022E: $297mm to $532mm Complete transmission projects DNG and FPU gas organic growth Elkton Gas acquisition Propane business growth via acquisitions, start-ups and AutoGas Develop new transmission infrastructure pr
Slide 16: COVID – Impact
COVID – 19 Impact CPK provides our customers an essential service. We are doing everything we can to ensure the continuity of our day- to-day business to provide uninterrupted natural gas, propane and electric services upon which our customers and communities rely. We have implemented our existing P
Slide 17: Capital Expenditures
Capital Expenditures 2019 and 2020 Actual for Fiscal Estimate for Fiscal 2020 (dollars in thousands) 2019 Low High Regulated Energy: Natural gas distribution $ 62,744 $ 72,000 $ 83,000 Natural gas transmission 62,000 83,000 96,000 Electric distribution 5,860 5,000 7,000 Total Regulated Energy 130,60
Slide 18: West Palm Beach Expansion Enhances Reliability and Provides Additional Customer Growth
West Palm Beach Expansion Enhances Reliability and Provides Additional Customer Growth 18 $33 million capital investment $2.1 million margin in 2019 $5.0 million margin in 2020 $5.2 million margin in 2021 Q4 - 2018 initial service; fully in-service Q1 - 2020 Four PPC projects to serve FPU’s natural
Slide 19: Del-Mar Energy Pathway Project Under Development
Del-Mar Energy Pathway Project Under Development Strategic Growth Initiative 19 Provides additional natural gas transmission pipeline infrastructure in Eastern Sussex County, Delaware and expands service into Somerset County, Maryland; serves four large anchor customers Estimated Project Cost: $ 37
Slide 20: Callahan Pipeline Project in Nassau County, Florida
Callahan Pipeline Project in Nassau County, Florida Another Strategic Growth Initiative 20 Peninsula Pipeline is constructing a jointly owned 26 mile pipeline serving Nassau and Duval counties in Florida; Project will be jointly owned and built with Seacoast Gas Transmission (affiliate of Emera) Est
Slide 21: Aspire Energy – Natural Gas Pipeline Project
Aspire Energy – Natural Gas Pipeline Project Guernsey Power Station Aspire executed a binding precedent agreement with Guernsey Power Station, LLC (GPS) providing for the relocation of an existing 6” steel Aspire pipeline. Aspire received the exclusive rights to provide natural gas transportation se
Slide 22: Propane Growth Initiatives
Propane Growth Initiatives Multiple Streams of Growth Maintain/develop residential builder relationships to capitalize on new development opportunities These relationships are translating into new CGS in non-core markets AutoGas Fueling Stations Strategic partners key Multi-fleet fueling station net
Slide 23: Marlin Gas Services – Engine for Growth and Customer Service
Marlin Gas Services – Engine for Growth and Customer Service Continues to Exceed Performance Expectations 23 Emergency Services Utility Gas Supply Services Pipeline Integrity Services Marlin Gas Services continues to actively expand the territories it serves, as well as leverage its patented technol
Slide 24: Benefits of Boulden Acquisition
Benefits of Boulden Acquisition 25 24 Ohl Acquisition December 2018 Added approximately 5,200 customers in five counties in Delaware, Maryland and Pennsylvania effective 12/16/19 Overlays nicely with Elkton Gas acquisition to establish a strong unified energy delivery platform in Cecil County Solid
Slide 25: Elkton Gas Company Strategic Acquisition for Delmarva Natural Gas
Elkton Gas Company Strategic Acquisition for Delmarva Natural Gas Summary of Transaction: On December 5, 2019, Chesapeake Utilities and South Jersey Industries entered into an agreement under which Chesapeake will acquire Elkton Gas Company for approximately $15 million The transaction is expected t
Slide 26: Existing Cecil County Operations
Existing Cecil County Operations Elkton Gas and Chesapeake Utilities Current SJI – Elkton Cecil County Operations Leased Administrative Office Space Owned Operations Facilities Nine Local Employees 7,000 Customers, Primarily Residential Current CPK - Cecil County Operations No Office or Operations F
Slide 27: Elkton Gas Company Strategic Fit
Elkton Gas Company Strategic Fit Elkton Gas gives CPK an operational platform in Cecil County including personnel, a contractor pool and an operations center which will enable Chesapeake to more quickly expand our footprint in Cecil County Additional growth is expected in the area, due to its proxim
Slide 28: Increasing Shareholder Value by Continuously Seeking and Developing Projects
Increasing Shareholder Value by Continuously Seeking and Developing Projects and Initiatives Key 2019 Margin Increase Drivers: $12.6 MM from new pipeline projects $6.8 MM from recent acquisitions $3.2 MM from regulatory initiatives We continue to pursue projects that will further enhance our margin
Slide 29: Capital Investment Guidance
Capital Investment Guidance Continued Record Investment in Our Business to Drive Growth $303,153 $250,000 Target 2018 – 2022: $750 million - $1 billion Management reaffirms its five year capital expenditure guidance of $750 million to $1 billion. Through the first two years (2018-2019) of the five-y
Slide 30: Current Earnings Guidance
Current Earnings Guidance 2022 EPS Target Range of $4.70 - $4.90 On February 26, 2020, we updated our EPS guidance based on our current strategic plan planned investments and growth prospects. $4.70 $4.55 $3.72 $4.20 $4.90 We are continuing to monitor the COVID-19 impacts and will provide updates, a
Slide 31: Committed to Superior Performance – TSR, EPS, Dividend Growth
Chesapeake Utilities Corporation Committed to Superior Performance – TSR, EPS, Dividend Growth We seek to identify and develop opportunities to drive our future earnings growth and increase shareholder value. Executing on Our Strategy: Seek development projects to serve new customers, provide new se
Slide 32: Thank You!
Thank You! Beth Cooper Executive Vice President, CFO and Asst. Secretary bcooper@chpk.com Any Questions? Thomas E. Mahn Vice President and Treasurer tmahn@chpk.com
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