Apa Group · ASX:APA
Apa — Investor Presentation (August 2020)
41 slides from Apa's investor presentation, Aug 26, 2020
Slide 1: Investor Pack ASX Announcement
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 26 August 2020 ASX ANNOUNCE
Slide 2: APA Group investor pack
APA Group investor pack. For personal use only As at 26 August 2020
Slide 3: Thanks for your interest in APA
Thanks for your interest in APA. For personal use only In this pack you’ll find: • Snapshot, Strategy and Value Proposition 4 - 13 • Company Structure 14 - 16 • Financial Metrics 17 - 22 • Gas Market Overview 23 - 27 • Asset Specific Information 28 - 38
Slide 4: APA overview
For personal use only APA overview 3
Slide 5: Snapshot of APA
snapshot of APA …a leading Australian energy infrastructure business For personal use only Assets owned/operated Market capitalisation ~$22 billion $13.1 billion (as at 21 August 2020) $0.6 billion (as at 30 June 2000) Gas transmission(1) 15,425 km transmission pipelines Credit ratings Moody’s: Baa2
Slide 6: Our footprint
our footprint Darwin APA assets and investments Integrated Operations Centre For personal use only APA operated assets Gas-fired power station Other natural gas pipelines Gas processing plant Electricity interconnectors Gas storage LNG plant Northern Wind Farm Natural Gas & Territory ethane 2P reser
Slide 7: APA's strategy
APA’s strategy • Deliver services our customers value consistent with our Customer Promise For personal use only • Continue to strengthen asset and stakeholder management, development and operational capabilities • Our growth focus is to enhance our portfolio of: – gas transmission pipelines – power
Slide 8: Asset portfolio development
asset portfolio development 2017-2020 20 years / >$14 billion APA’s largest organic growth capex For personal use only program ~$1.7 billion of energy infrastructure added to of investment into the Australian gas market 2014-2016 APA’s footprint over the 4 Access to LNG export year period market Ree
Slide 9: Our value proposition
our value proposition “…owner and operator of energy infrastructure underwritten by long term contracts with highly creditworthy counterparties…” For personal use only Quality & diversified infrastructure Ongoing Low risk organic business growth model 8
Slide 10: Why invest in APA?
why invest in APA? ➢ Uniquely integrated energy infrastructure portfolio For personal use only • Interconnected gas transmission pipeline grid / quality infrastructure assets • • Provide customers with flexibility – multi asset and/or multi service contract options Integrated Operations Centre (IOC)
Slide 11: Reliable guidance (historical)
reliable guidance (historical) • Stable cash flows For personal use only • Low risk business model • Majority take or pay contracts with CPI adjustments • Revenue weighted average contract tenor as at 1 Jul 2020 remains ~12 years • Established customer relationships • Quality and diversified asset p
Slide 12: Capital expenditure
capital expenditure Growth capex: A$m $900m >$400 m pa average over the last 5 years 856 For personal use only $800m >$300 m pa average over the last 10 years $700m $600m 581 $500m 447 427 397 396 $400m 334 341 302 * $300m 249 194 $200m 173 135 $100m $0m FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Slide 13: Continued growth momentum
continued growth momentum Normalised EBITDA Normalised operating cash flow $1,800m $1,200m For personal use only $1,600m $1,654 $1,096 $1,574 $1,000m $1,032 $1,518 $1,012 $1,400m $1,470 $974 $1,331 $1,200m $1,269 $800m $862 $1,000m $600m $800m $545 $773 $747 $600m $400m $433 $440 $400m $200m $200m $
Slide 14: Distributions and TSR returns
distributions and TSR returns APA’s distributions have increased every year for nearly two decades 16.9% compound annual growth rate pa For personal use only TSR cents 2500 60.0 TSR: 2,201%(1) since listing CAGR: 16.9% pa 50.0 2000 50.0 47.0 45.0 43.5 41.5 40.0 1500 38.0 35.5 36.3 34.4 35.0 32.8 30.
Slide 15: Company structure
For personal use only company structure 14
Slide 16: Group structure
group structure • APA Group is listed as a stapled structure on the Group Structure Australian Securities Exchange (ASX:APA) For personal use only APA Group Securityholders • APA is comprised of two registered managed investment schemes: Australian Pipeline Trust APT Investment Trust − Australian Pi
Slide 17: APA's new operating model
APA’s new operating model ➢ Clear accountabilities ➢ Strategic alignment For personal use only ➢ Customer focused ➢ Agile decision making ➢ Empower our people to make the right decisions at the right level ➢ Invest resources into the business where they are needed * Note: *On 12 August 2020, APA ann
Slide 18: Financial metrics
For personal use only financial metrics 17
Slide 19: Year financials
5 year financials Financial Performance (Statutory) FY2020 FY2019 FY2018 FY2017 FY2016 Revenue $m 2,590.6 2,452.2 2,386.7 2,326.4 2,094.3 Revenue excluding pass-through(1) 2,129.5 2,031.0 1,941.4 1,888.3 1,656.0 For personal use only $m EBITDA $m 1,653.9 1,573.8 1,518.5 1,470.1 1,330.5 Depreciation
Slide 20: Year financials (con't)
5 year financials (con’t) For personal use only EBITDA by Segment (Excluding Significant Items) FY2020 FY2019 FY2018 FY2017 FY2016 EBITDA (Continuing businesses) Energy Infrastructure East Coast: Queensland $m 1,007.9 1,010.1 962.2 925.4 855.8 New South Wales $m 160.8 149.4 147.1 149.5 121.7 Victori
Slide 21: Debt maturity profile
debt maturity profile APA maintains diversity of funding sources and spread of maturities(1) For personal use only $1,600m Headroom (undrawn committed facilities) Bank borrowings $1,400m Sterling MTN $1,200m Euro MTN US 144A Notes $1,000m Japanese MTN $800m Australian MTN US Private Placement Notes
Slide 22: Capital management
capital management APA’s parameters for capital management and distributions For personal use only Capital Management: • Retain our 2 credit ratings at Baa2/Stable (Moody’s) and BBB/Stable (S&P) to facilitate access to global debt capital markets • Fund growth with an appropriate mix of funds retain
Slide 23: Debt facilities
debt facilities Total committed debt facilities at 31 July 2020 For personal use only $ million Facility Drawn Tenor amount amount 2015, 2017, & 2019 Bilateral bank 300 0 3 to 5 year facilities maturing between December 2020 to July 2022 facilities 2018 Syndicated bank facilities 1,000 0 5 and 5.5 y
Slide 24: Gas market overview
gas market overview For personal use only 23
Slide 25: Gas demand, supply, price trends
gas demand, supply, price trends Gas supply and demand East coast gas demand & production For personal use only Anticipated developments AEMO 2020 Gas Statement of Opportunities: 2,500PJ 2P Undeveloped 2P Developed • Supply/demand balance on the east coast remains AEMO gas demand forecast 2,000PJ ti
Slide 26: Energy infrastructure contracting
energy infrastructure contracting Number of renewed firm service contracts Pipeline recontracting ongoing: 60 For personal use only • No formal access requests which may trigger arbitration process 50 • Since the GMRG reforms (1 Aug 2017) were 40 introduced, APA has entered into ~300 contracts or va
Slide 27: Regulation of Australian gas pipelines
regulation of Australian gas pipelines • In FY2020, 8.0% of APA’s EBITDA in Energy Infrastructure was from For personal use only full regulated assets APA pipelines by regulation type • Gas pipelines are regulated by the Australian Energy Regulator (AER) or, the Economic Regulation Authority of West
Slide 28: Regulation of Australian gas pipelines (con't)
regulation of Australian gas pipelines (con’t) Schedule of regulatory For personal use only reset dates for APA Access • Apply for a term, generally 5 years arrangement • Set out the terms and conditions of third party access, including • At least one reference service that is commonly sought by cus
Slide 29: Asset specifics
For personal use only asset specifics 28
Slide 30: History - Energy Infrastructure business segment
history - Energy Infrastructure business segment 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Roma Brisbane Pipeline 85%,60 TJ/d 100%, 208 TJ/d 233 TJ/d Bi-directional Carpentaria Gas Pipeline 70%, 90 TJ/d 100%, 102 TJ/d 119 TJ/d Bi-directi
Slide 31: History - Energy Investments and Asset Management segments
history - Energy Investments and Asset Management segments For personal use only 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 SEA Gas Pipeline 33.3% 50% Allgas Gas Distribution Network 100% 20% AGN (Envestra) 17% 30.6% 33% 0%, O&M until 2027 Daandine and X41 Power Stati
Slide 32: Historical normalised EBITDA by asset – Energy Infrastructure
historical normalised EBITDA by asset – Energy Infrastructure $ millions FY16 FY17 FY18 FY19 FY20 East Coast Grid For personal use only Wallumbilla Gladstone Pipeline 475.2 488.0 515.9 542.4 538.9 South West Queensland Pipeline 240.3 242.4 244.3 250.0 254.4 Moomba Sydney Pipeline(1) 121.7 149.5 147.
Slide 33: Wallumbilla Gladstone Pipeline, QLD
Wallumbilla Gladstone Pipeline, QLD • Delivers gas to Gladstone for LNG Mount export Isa For personal use only • Fully contracted revenue through to 2035, derived Queensland through take-or-pay GTAs with foundation shippers (BG Group & CNOOC) with two 10 year options to Wallumbilla extend Gladstone
Slide 34: East Coast and Central Region
East Coast and Central Region APA’s 7,600 plus kilometre integrated pipeline grid on the east coast of Revenue by customer industry Australia has the ability to transport gas seamlessly from multiple gas For personal use only production facilities to gas users across four states and the ACT, as well
Slide 35: Western Australia
Western Australia APA services a range of customers in Western Australia within Revenue by customer industry the resources, industrial and utility sectors. APA’s assets enable For personal use only our customers to have a reliable energy source to supply their iron ore, nickel and gold mining operat
Slide 36: Power generation - gas and renewables
power generation - gas and renewables Diamantina Power Station in Queensland • APA owns and/or operates a portfolio of gas, wind and solar power generation assets totalling ~909 MW For personal use only • Assets are located in Queensland, South Australia and Western Australia • Our key power generat
Slide 37: Mid stream processing and storage
mid stream processing and storage Orbost Gas Processing Plant • Located approximately 375km east of Melbourne on the Victorian east coast For personal use only • Connects Cooper Energy’s Sole gas field to eastern Australian gas market • Capacity to process up to ~68 TJ/day, practical completion yet
Slide 38: Asset Management business segment
Asset Management business segment • Provides asset management and operational services for most of APA’s energy infrastructure assets, energy investments, as well as to third parties. For personal use only • Generally provided under long-term contracts (e.g. AGN contract until 2027) • Covers assets
Slide 39: Energy investments business segment
Energy investments business segment For personal use only 38
Slide 40: Disclaimer
Disclaimer This presentation has been prepared by Australian Pipeline Limited (ACN 091 344 704) as responsible entity of the Australian Pipeline Trust (ARSN 091 678 778) and APT Investment Trust (ARSN 115 585 441) (APA Group). For personal use only The information in this presentation does not conta
Slide 41: For further information contact
For personal use only For further information contact: Jennifer Blake Head of Investor Relations Tel: +61 455 071 006 E-mail: jennifer.blake@apa.com.au Or visit the APA website at: www.apa.com.au 40