Contact Energy Limited · NZX:CEN
Contact Energy — Debt Investor Presentation (October 2021)
25 slides from Contact Energy's debt investor presentation, Oct 29, 2021
Slide 1: Capital Bond Offer
Capital Bond Offer Investor presentation 29 October 2021 1
Slide 2: Disclaimer and important information
Disclaimer and important information This presentation has been prepared by Contact Energy Limited (Issuer) in relation to the guidance on, future earnings and financial position and performance. Such projections offer of unsecured, subordinated green capital bonds (Capital Bonds) (Offer). The Offer
Slide 3: Contact presenters
Contact presenters Dorian Devers Chief Financial Officer Will Thomson Corporate Treasurer 3
Slide 4: Agenda
Agenda Electricity market overview 5-9 Contact Energy strategy 10 Business performance update 11-13 Funding 14-17 Capital Bonds & the Offer 18-24 4
Slide 5: Introduction to Contact
Introduction to Contact Presented by Dorian Devers Chief Financial Officer Electricity market overview Contact Energy strategy Business performance update 5
Slide 6: New Zealand enjoys a reliable, affordable and environmentally sustainable electricity system
New Zealand enjoys a reliable, affordable and environmentally sustainable electricity system What does your power bill pay for? Spot 5 electricity pool 1 29 15* 2.1m Major State-owned national Distribution Retailers Households “New Zealand serves as a model for effective energy generators transmissi
Slide 7: The five largest electricity companies are vertically integrated and publicly listed
The five largest electricity companies are vertically integrated and publicly listed Contact’s diverse generation portfolio allows for generation when hydro storage levels are low to continuously meets customer demand Generation market share by volume Retail electricity market share by customer conn
Slide 8: NZ electricity supply is highly renewable
NZ electricity supply is highly renewable Contact has led the way in decarbonising the NZ electricity system through geothermal development Electricity generation carbon emissions (units of CO2e) Current national quarterly supply and demand (TWh) Measured at the station grid entry point -47% 11.6 10
Slide 9: Contact Energy is one of New Zealand's most significant companies
Contact Energy is one of New Zealand’s most significant companies It is an owner and operator of low-cost, long-life renewable generation assets and is developing its consented geothermal development options 81% Long term renewable contract for gas storage generation 5 8.4TWh geothermal FY21 station
Slide 10: Our strategy to lead NZ's decarbonisation
Our strategy to lead NZ’s decarbonisation Strategic Grow Grow renewable Decarbonise Create outstanding theme demand development our portfolio customer experiences Objective Attract new industrial Build renewable generation Lead an orderly Create NZ's leading sustainable demand with globally and flex
Slide 11: Contact has delivered stable EBITDAF over the past four years
Contact has delivered stable EBITDAF over the past four years despite volatile wholesale markets and rising thermal fuel costs EBITDAF, $m, continuing operations rolling 12 months average FY21 FY18 FY19 FY20 553 497 509 509 510 510 506 499 497 504 502 492 513 528 479 487 491 480 476 485 492 496 449
Slide 12: Key financial metrics
Key financial metrics Operating Cash Flow less Investing Cash Flow ($m) Capital Employed ($m) & S&P Net Debt to EBITDAF 720 3.0 2.8 2.3 390 1.9 1.7 4,321 4,209 312 255 9 303 3,831 3,775 6 235 371 3,633 341 1,543 1,482 305 301 290 1,049 706 1,154 421 401 432 379 341 -78 -60 -51 -61 2,782 2,927 -116 -
Slide 13: Growth investment funding strategy
Growth investment funding strategy Complementing conventional debt funding and hybrid debt instruments, Contact has already accessed equity funding to support our medium term investment programme Medium-term capital investment programme* Potential sources of funding Geofutures Debt capacity pre-equi
Slide 14: Funding
Funding Presented by Will Thomson Corporate Treasurer Funding 14
Slide 15: Balance sheet and funding portfolio
Balance sheet and funding portfolio Funding maturity profile (at 30 June 2021, including new capital bonds) Sources of funding Balanced debt portfolio with diverse (at 30 June 2021) sources of funding; comprising bank 400 debt, domestic bonds and USPP 350 300 29% All bank facilities have been 250 36
Slide 16: Green Borrowing Programme
Green Borrowing Programme In August 2017, Contact obtained green certification from The new 2021 Capital Bond will be a certified green bond the Climate Bonds Initiative for all debt in the funding It will be the first green capital bond in New Zealand portfolio – the “Green Borrowing Programme” The
Slide 17: Green Borrowing Programme
Green Borrowing Programme 17
Slide 18: Capital Bonds and the Offer
Capital Bonds and the Offer 18
Slide 19: Key terms of the Capital Bonds
Key terms of the Capital Bonds Description Subordinated, unsecured, redeemable, interest bearing debt securities of Contact Issuer Contact Energy Limited Guarantors None The Capital Bonds rank behind bank debt, senior bonds, US private placement notes, commercial paper and any amounts owing to unsub
Slide 20: Interest payments
Interest payments Interest Rate Interest deferral The Margin and the Interest Rate for the period until the First Reset Date (19 An interest payment may be deferred at Contact's sole discretion for up to November 2026) is to be set by Bookbuild five years Before each Reset Date, Contact may propose,
Slide 21: Issuer redemption rights
Issuer redemption rights Contact must Redeem Capital Bonds on the The redemption price will be: Maturity Date or if an Event of Default occurs If Redemption is on the Maturity Date, on a Reset Date or due to the occurrence of a Tax Event: Contact has a right to Redeem: • the Principal Amount plus Un
Slide 22: Key early redemption drivers
Key early redemption drivers 2026 2031 Year five Year 10 Contact can Redeem the Capital Bonds or run an Election Process • Equity content falls to minimal, Standard & Poor’s treats the Capital Bonds as 100% debt in Contact's financial ratios • If the Election Process is unsuccessful the effective Ma
Slide 23: The Election Process
The Election Process Election Notice given proposing New Conditions Bondholders decide to: a) accept New Conditions b) reject New Conditions: or c) do nothing Contact declares a Successful Election Process Election Process not successful Bondholders who did nothing Bondholders who accepted Bondholde
Slide 24: Key information and timeline
Key information and timeline The Offer 29 October PDS lodged Bookbuild process Offer opens 8 November NZX Firms, institutional investors and Indicative pricing released other approved parties to be invited to participate in the bookbuild process 2021 Closing Date 12 November Rate Set Date No public
Slide 25: Thank you
Thank you 25
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