Genesis Energy Limited · NZX:GNE
Genesis Energy — HY22 Earnings Presentation
47 slides from Genesis Energy's earnings presentation, Feb 28, 2022
Slide 1: Growth through the transition
Growth through the transition HY22 Results Presentation Marc England Chief Executive Officer 28 February 2022 Emma Oettli Acting Chief Financial Officer
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
Agenda 1. Highlights 2. Financial performance 3. Operational performance 4. Strategic outlook 5. FY22 guidance
Slide 4: Highlights
genesis A P W, : f a # Highlights
Slide 5: Performance Highlights
Performance Highlights Financial Operational Social EBITDAF 1 Strong Customer Loyalty Ngā Ara Creating $210m +26 13.2% Pathways Facilitating transformational education, NPAT $85 million Brand NPS Net Churn training and employment opportunities to prepare rangatahi for the future of work. Interim Div
Slide 6: Financial Performance
Financial Performance
Slide 7: HY22 Financial Summary
HY22 Financial Summary KEY FINANCIAL COMPARISONS1 $ millions - 2.6% + 62.9% + 1.0% + 97.4% + 8.0% - 49.5% - 3.4% - 15.4% + 1.2% + 4.5% 1 Due to the Implementation of IFRIC agenda decision on Configuration and Customisation costs incurred in implementing Software-as-a-Service, HY21 and FY21 comparabl
Slide 8: Dividend reinvestment plan reactivated to support growth
Dividend reinvestment plan reactivated to support growth DIVIDEND PER SHARE & PAY-OUT HISTORY • Interim Dividend of 8.7 cps, 80% imputed with a record date of 18 March 2022 will be paid on 1 April 2022. A supplementary dividend of 1.2283 cps will be paid to non- resident shareholders. • Sector leadi
Slide 9: Building value through Retail momentum
Building value through Retail momentum EBITDAF1 EBITDAF1 $ MILLIONS $ MILLIONS 206 • Genesis delivered a consistent EBITDAF performance for the first half, once the impact of arbitration emissions in HY21 are applied to the period the units were incurred. • Continued growth in netback across all fue
Slide 10: Resilient performance of our integrated portfolio
Resilient performance of our integrated portfolio Retail Wholesale Kupe EBITDAF $34m $160m $40m $53m vs pcp $59m vs pcp $9m vs pcp Transfer $(66m) impact vs pcp $75m impact vs pcp $(9m) impact vs pcp • Higher gas, electricity and LPG transfer • Combined benefits from internal transfer Prices prices.
Slide 11: Valuation gains drive higher NPAT
Valuation gains drive higher NPAT NPAT1 $ MILLIONS • Lower wholesale electricity forward prices favourably impacted fair value movements through electricity swaps, partially offset by PPAs2. • $13m in realised cash gains relating to coal derivatives. • Uplift in tax expenses due to increased profita
Slide 12: Investing for growth and a low carbon future
Investing for growth and a low carbon future OPERATING EXPENDITURE $ MILLIONS • Genesis continued to plan for a low carbon future, through investment in Future-gen and positioning Huntly for the long term. This strategy includes progressing the biofuels trial, expected to be completed by the end of
Slide 13: Capital invested for efficiency and long term resilience
Capital invested for efficiency and long term resilience CAPITAL EXPENDITURE1 Stay in business capital2 of $25.5m includes: $ MILLIONS Long term investment to improve the reliability and efficiency of generation assets. This included: • $1.5m invested in the ongoing Tekapo B runner upgrade project.
Slide 14: A well managed capital structure
A well managed capital structure NET DEBT/EBITDAF RATIO FALLING TO TARGET BAND • S&P reaffirmed BBB+ credit rating in February 2022. • Net debt has increased due to increased inventory and FY21 arbitration costs paid in HY22. Debt/EBITDAF is lower due to higher expected earnings in FY22. • $545 mill
Slide 15: 35% of facilities linked to sustainable assets and outcomes
35% of facilities linked to sustainable assets and outcomes First NZ company to have a Framework, loan and bond aligned to the Climate Transition Finance Handbook DECEMBER 2020 NOVEMBER/ JANUARY 2022 MARCH 2022 DECEMBER 2021 Sustainable Finance Genesis commits to an ambitious Framework Released $225
Slide 16: Operational performance
Operational * performance é —_ ne
Slide 17: Growing customer engagement and loyalty
Growing customer engagement and loyalty • Energy IQ continues to inform and engage customers, with 8.8m BRAND NPS interactions in HY22, equal to 71% of all interactions in FY21. 141,000 visits to the tips centre, 40% up on FY21 total. • Energy IQ and Power Shout continue to drive customer loyalty. C
Slide 18: Continued growth in LPG
Continued growth in LPG • The total New Zealand LPG market has grown 4% on the pcp. Genesis’ SECTOR LPG GROWTH total market share is now 29%, up 2% on the pcp. • Netbacks continued to grow with residential up 5.5% and business up 4.5% on pcp. • Genesis continues to focus on regions with growing cons
Slide 19: More and more customers are engaging with Energy IQ
More and more customers are engaging with Energy IQ ENERGY IQ 1.0 HAS BEEN DELIVERING EXCELLENT EXPERIENCES AND RECORD Solar ENGAGEMENT • With a great range of energy management features and loyalty offers to customers, paired with a robust experience design, Energy IQ is achieving record engagement
Slide 20: Energy Management is changing the way our customers engage
Energy Management is changing the way our customers engage NEW EV ENERGY MANAGEMENT FEATURES RESIDENTIAL CUSTOMERS WITH ENERGY MANAGEMENT PRODUCTS & EIQ FEATURES • Energy EV customers can now monitor their household day/night usage through the new feature in Energy IQ, EV IQ. • Over 40% of our EV cu
Slide 21: Frank Energy relaunch
• Previously, Energy Online. 90,000 Customers. Full relaunch from Feb 2022. • No contracts, no gimmicks. Same great prices offered for both new and existing customers. • Simplify customer propositions and business model to keep prices low and deliver targeted profitability outcomes. Digital sign up,
Slide 22: Ecotricity Sales
Ecotricity Sales 250 Annual Volumes GWh 200 Goal of 50% • Ecotricity are New Zealand’s leaders in providing 100% growth in 2022 carboNZero certified renewable electricity. 150 • The company has delivered strong growth with supply contracts to New Zealand’s two largest EV charging networks. 100 Ecotr
Slide 23: Optimising our generation portfolio to meet market conditions
Optimising our generation portfolio to meet market conditions • Genesis’ flexible generation portfolio continued to provide back-up HUNTLY FLEXIBILITY energy to the market during periods of high prices and pulling back and running short into lower priced periods. • Wholesale gas trading activity ena
Slide 24: A secure supply of fuels and carbon credits
A secure supply of fuels and carbon credits • Genesis continued to provide energy security to New Zealand CARBON HEDGE POSITION through HY22 and is well prepared to provide essential back-up through 2022. At the conclusion of the half, Genesis had 2.1 TWh of stored energy across hydro and thermal. •
Slide 25: Growing Value and supporting New Zealand Energy Security
Growing Value and supporting New Zealand Energy Security • Kupe continues to prove its value to the New Zealand energy system. In HY22 KUPE PRODUCTION a period of rising wholesale oil, gas and LPG prices, Kupe provided Genesis with reliable supply. Successful Inlet Compression • After successful inl
Slide 26: Keeping our people safe and ensuring continued productivity
Keeping our people safe and ensuring continued productivity • Genesis is proud to be keeping our people safe and productive through TESTS CONDUCTED the pandemic. Genesis has distributed and trained over 1,300 staff and contractors in their use of RA test kits so that our people can self-test prior t
Slide 27: Strategic outlook
Strategic outlook
Slide 28: An active enabler of New Zealand's energy transition
An active enabler of New Zealand’s energy transition Future-gen – transitioning our wholesale position to lead NZ’s energy transition Value from flexibility Grow renewables Transition Huntly and reliability Contract for Contract for Trial biofuels new renewable fuel flexibility as a fuel option gene
Slide 29: Varied scenarios trend towards 96% to 98% renewable by 2030
Varied scenarios trend towards 96% to 98% renewable by 2030 Balanced Regulated Renewables Pressure cooker Oversupply Demand growth from EV An incentivised renewable Faster than anticipated Tiwai closure causes and industrials are evenly uptake with a goal of 100% demand growth with oversupply of low
Slide 30: A highly renewable market will require peaking capacity and seasonal storage
A highly renewable market will require peaking capacity and seasonal storage - market settings may need to adapt Near 100% renewable, spill makes further renewable build a A highly renewable1 grid draws on backup generation to cover costly way to displace remaining thermal infrequent peak capacity n
Slide 31: Biofuel at Huntly could provide a seasonal storage solution
Biofuel at Huntly could provide a seasonal storage solution but not short notice peaking capacity WORK COMPLETED TO DATE PAINTS A POSITIVE PICTURE FOR ADVANCED BIOFUELS EXPECTED TO BE COMPETITIVE WITH COAL BIOMASS AT HUNTLY AT CURRENT CARBON PRICES (PRIOR TO FREIGHT) $300 Biofuels resource assessmen
Slide 32: Regulatory environment creates an opportunity to shape a low carbon energy system
Regulatory environment creates an opportunity for business, Government and regulators to collectively shape a low carbon energy system MfE Emissions Reductions Plan MBIE: NZ Battery Project assessment 1 • Delivered in 2022 determining the policy plans to meet • Work programme identifying renewable o
Slide 33: Future-gen programme on track to deliver lower cost renewables
Future-gen programme on track to deliver lower cost renewables • Future-gen has already displaced an estimated 330,000 GENESIS GENERATION DIVERSITY tonnes of carbon emissions through the Waipipi windfarm. Ownership Joint Venture PPA • Waipipi is now generating 455 GWh per annum. Hydro NI/SI • Kaiwai
Slide 34: Considering further long-term carbon reduction commitments
Genesis is considering what further long-term carbon reduction commitments we can make • Genesis has committed to a 1.5 degree SCOPE 1 EMISSIONS - GENERATION INTENSITY (MEAN YEAR) Science-Based Target1 by 2025, which will reduce emissions by at least 1.2 million tonnes by FY252. • Our Future-gen str
Slide 35: Customers' first choice for energy management
Customers’ first choice for energy management Create consistent, distinctive end-to-end customer experiences Create residential Grow our market Become an LPG Unleash Frank* in Design products for experiences that build share of small market leader the tier 2 market emerging energy customer loyalty b
Slide 36: Transforming how we provide our customers energy
Transforming how we provide our customers energy Key capability uplifts MAHI TAHI RUBIKS BOWIE USE CASE EXAMPLE: NEW ENERGY PLANS Pricing Product Quoting time configuration configuration Current situation Post implementation A new cloud Genesis Data Platform (GDP) New Information Design of a Target
Slide 37: A refreshed Leadership Team to navigate the transition
A refreshed Leadership Team to navigate the transition Marc England James Spence Rebecca Larking CEO CFO (Incoming) COO (Incoming) Responsible for the leadership, Responsible for overseeing Responsible for our generation strategic direction and all finance functions, treasury, assets, Kupe and leadi
Slide 38: FY22 guidance
FY22 guidance
Slide 39: FY22 EBITDAF is $430 to $440 million
FY22 EBITDAF is $430 to $440 million • The FY22 EBITDAF guidance range has been updated to $430 to $440 million subject to hydrological conditions, gas availability, any material events, one-off expense or other unforeseeable circumstances. FY22 capital expenditure guidance is up to $84 million. • A
Slide 40: Appendices
Appendices
Slide 41: Financial statements
Financial statements HY22 HY21 Variance HY22 FY21 Variance Income Statement Balance Sheet ($m) ($m) ($m) ($m) Revenue 1,382.4 1,419.4 (2.6)% Cash and Cash Equivalents 71.6 104.3 Expenses (1,172.1) (1,203.4) (2.6)% Other Current Assets 574.7 825.1 EBITDAF 210.3 216.0 (2.6)% Non-Current Assets 4,151.6
Slide 42: Debt information
Debt information GENESIS DEBT PROFILE AT 31 DECEMBER 2021 Debt Information HY22 FY21 Variance ($m) ($m) Total Debt $ 1,446 1,428 $m $450 Cash and Cash Equivalents $ 72 104 $400 Headline Net Debt $ 1,374 1,324 +3.8% $350 $300 $250 USPP FX and FV Adjustments $ 41 48 $200 Adjusted Net Debt1 $ 1,333 1,2
Slide 43: Operational metrics
Operational metrics Retail Key Information1 HY22 HY21 Variance Retail Key Information HY22 HY21 Variance EBITDAF ($ millions) 34.1 87.1 (60.8)% Retail Electricity Sales (GWh) 3,121 3,286 (5.0)% Customers with > 1 Fuel 129,920 124,996 3.9% Retail Gas Sales (PJ) 4.2 4.5 (6.7)% Electricity Only Custome
Slide 44: Operational metrics
Operational metrics Wholesale Key Information1 HY22 HY21 Variance Kupe Key Information HY22 HY21 Variance EBITDAF ($ millions) 160.2 101.7 57.5% EBITDAF ($ millions) 40.3 49.4 (18.4)% Renewable Generation (GWh) 1,426 1,466 (2.7)% Gas Production (PJ) 5.4 5.7 (5.3)% Thermal Generation (GWh) 1,680 2,30
Slide 45: Glossary
Glossary 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 would you be to recommend
Slide 46: Glossary
Glossary 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 - LWAP Excludes settle
Slide 47: Investor relations enquiries
Investor relations enquiries Tim McSweeney GM Investor Relations & Market Risk +64 27 200 5548