Infratil Limited · NZX:IFT
Infratil — H1 FY2012 Earnings Presentation
25 slides from Infratil's earnings presentation, Nov 15, 2011
Slide 1: Infratil Limited Half Year Result
INFRATIL LIMITED HALF YEAR RESULT SIX MONTHS ENDED 30 SEPTEMBER 2011 15 NOVEMBER 2011
Slide 2: IFT - Delivering against commitments
IFT - Delivering against commitments • Consistent operating performance with strengthening cash flows, and improving business fundamentals • Key businesses well positioned in their sectors to continue growth throughout FY12 and FY13 • $107m of capital deployed primarily in organic business growth pr
Slide 3: Financial highlights through 30 September
Financial highlights through 30 September Half Year Ended 30 September ($Millions) 2011 2010 (1) Variance % Change EBITDAF $272.9 $254.9 $18.0 7.1% Operating Earnings $114.3 $116.5 ($2.2) (1.9%) Net Surplus after Tax $88.8 $100.5 ($11.7) (11.6%) Net Operating Cash flow $107.5 $93.9 $13.6 14.5% Capit
Slide 4: IFT – Consolidated P/L through 30 September
IFT – Consolidated P/L through 30 September Group financial performance HY Sep 2011 HY Sep 2010 FY Mar 2011 ($Millions) Operating Revenue $1,169.4 $1,065.2 $2,083.3 EBITDAF (1) $272.9 $254.9 $459.6 Net Interest ($92.4) ($80.2) ($168.1) Depreciation & Amortisation ($66.2) ($58.2) ($118.4) Operating E
Slide 5: Improved cash flow and earnings
Improved cash flow and earnings EBITDAF(1) 1st HALF DIVIDEND* • $18m increase to $272.9m (+7% pcp) • Reflects revenue growth of 9% from generation investment in 2010, higher - interim dividend of 3.0 cps fully imputed payable on overall customer numbers, and improving operating margins 16 December t
Slide 6: EBITDAF breakdown by business
EBITDAF breakdown by business HY 30 September • TrustPower – solid performance given mild winter and ($Millions) 2011 2010 strong retail competition • IEA – improved retail margins and absence of 2010 gas TrustPower $161.6 $147.7 benefit arising from gas field outage . Retail competition has also be
Slide 7: Adjusted earnings analysis
Adjusted earnings analysis HY Sep HY Sep % Adjusted Results ($Millions) Variance 2011 2010 Change Net Profit after Tax - as reported $88.8 $100.5 ($11.7) (11.6%) - Fair value gain on acquisition of Z Energy - ($60.7) $60.7 - Non-cash revaluation of derivatives ($10.9) $13.7 ($24.6) - Z Energy equity
Slide 8: Active capital management
Active capital management • Bank capacity retained with $738m of total facilities and around $400m of Comfortable head room at 30 September 2011 gearing and strong support from senior • Total group wholly owned debt (including PIIBs) of $1.2bn resulting in lenders Infratil interest expense of $49.2m
Slide 9: Secure long term funding with flexibility
Secure long term funding with flexibility • Total Infratil and wholly owned subsidiaries(1) borrowing facilities of $738m (net debt drawn $337m at 30 September 2011 including RPS and utilised guarantees) • Senior borrowing facilities include senior debt, RPS and 9 year export credit facility • Matur
Slide 10: New bond issue terms
New bond issue terms • November 2017 maturity (6 year maturity) • 8% coupon • Unsecured unsubordinated offer, which do not have share conversion option • General offer $25m (with option to accept up to $50 over-subscriptions) • Exchange offer of $20m to holders of 15 November 2011 maturing bonds • P
Slide 11: Net asset values
Net asset values • TrustPower value change reflects NZX market Investment / Assets(1) Sep 30 Mar 31 2011 2010 price (i.e. passive portfolio per share valuation) ($Millions) • change in value of IEA due to currency revaluations, hedges and cash earnings (NSW TrustPower $1,127 $1,146 privatisation sug
Slide 12: TPW – strength in a changing market
TPW – strength in a changing market • EBITDAF increased 9% over prior period - Higher NZ generation and firmer wholesale prices - Higher revenue from Snowtown I • Mahinerangi wind farm commissioned during the period • Electricity customer numbers decreased to 218k from 221k at March 31 - Credible pe
Slide 13: Z – Performing in a difficult environment
Z – Performing in a difficult environment • Trading conditions have generally deteriorated over the last six months • Z continues to outperform the industry in terms of volume and market share • 1st half financial performance and 2nd half outlook consistent with guidance provided at the beginning of
Slide 14: Z’s competitive position continues to improve
Z’s competitive position continues to improve Petrol Volumes – all channels 104 102 1H YoY 100 Volumes Industry Z Energy 98 Petrol -4.8% -1.5% 96 94 Diesel +2.5% +9.0% 92 90 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 • Petrol and diesel volumes represent about 70% Z Industry (excl. Z) of Z’s t
Slide 15: Z Energy half year financial performance
Z Energy half year financial performance HY Sep HY Sep • Price competition is depressing retail ($Millions) 2011 2010 (1) margins. Strong commercial diesel Gross Margin 209.0 207.2 volumes but at lower margins Operating costs (126.4) (115.8) • Operating costs for 2011 include run OPERATING EBITDAF (
Slide 16: Z launch gives confidence for full rollout ...
Z launch gives confidence for full rollout ... • Brand tracker research was completed in September • Brand strength shows in unprompted awareness of 50% • Z owns the “NZ owned and operated” association and features strongly in the other attributes we want to be famous for – speed and service • Extre
Slide 17: Good progress on key strategic initiatives
Good progress on key strategic initiatives RETAIL SUPPLY & DISTRIBUTION • Replace POS (220 sites) • New 3x10ml tanks at Lyttelton • $35m site rebrand (210 sites) • Capital recovery charge • $23m store refit (90 sites) • New inventory forecasting system • Car wash upgrade (42 sites) • Optimisation of
Slide 18: Z Outlook remains stable …
Z Outlook remains stable … FCST Actual Mar 2012 Mar 2011 Gross refinery margin (USD/bbl) $7.50 $7.53 NZRC Processing Volume (ml) 1,970 1,901 Sales Volume (ml) 2,600 2,654 Operating Costs $250m - $265m $244m Capex $85m - $90m $29m Operating EBITDAF (CC) $170m - $190m $157m • Processing volumes origin
Slide 19: Australian Energy – credible performance
Australian Energy – credible performance • Half year EBITDAF A$36m (versus A$49m for prior period) • Revenue growth 9% over prior period from growing customer base at Lumo and Perth Energy plus new generation plant • Lumo mass market retail customers net increase of ~1% from March 31 to 414,400 bill
Slide 20: Structural factors suggest a bright future …
Structural factors suggest a bright future … • Australian energy market currently characterised by low wholesale energy prices and heightened competition following NSW privatisation - Carbon pricing adding ~2c/kwh from 1 July 2012 - Further industry consolidation likely • Lumo and IEA continuing to
Slide 21: PAX Growth and systems improvements
PAX Growth and systems improvements • NZ Bus - strong earnings improvement +16% - Reflecting strong patronage growth in Auckland (+5%) vs prior period - Higher average yields - Focus on cost efficiency, HSE and reliability • Major fleet, route and asset upgrade - Roll-out of 1st stage of fleet repla
Slide 22: Capital expenditure on track
Capital expenditure on track • TrustPower – Generation Capex HY Sep F’cst Mar enhancement, and customer care and ($Millions) 2011 2012 billing systems TrustPower $26 $60-$75 • Australian Energy – organic customer growth and ongoing system Australian Energy $11 $25-$35 enhancements Wellington Airport
Slide 23: IFT - outlook through 31 March 2012
IFT - outlook through 31 March 2012 FY 31 March FY 2011 FY 2012 ($Millions) Actual Outlook EBITDAF - normalised $443 $460 - $490 Net Interest ($168) ($180 - $190) Operating Cash Flow $179 $170 - $190 • 2012 EBITDAF outlook reaffirmed at $460m - $490m - major assumptions: - Incremental gains for Trus
Slide 24: Earnings growth set to continue …
Earnings growth set to continue … • Capital investment program and recent portfolio decisions have built a strong platform for growth in free cash flow and earnings • Operating leverage and optionality remains a feature of our core businesses • Infratil’s expertise and access to capital will continu
Slide 25: For more information: www.infratil.com
For more information: www.infratil.com