AGL Energy Limited · ASX:AGL
AGL Energy — Macquarie Capital Securities Australia Conference 2008
23 slides from AGL Energy's conference presentation, May 7, 2008
Slide 1: ASX statement: Macquarie Capital Securities Australia Conference presentation
AGL Energy Limited Tel: +61 2 9921 2999 ABN 74 115 061 375 Fax: +61 2 9921 2552 AGL Centre, 72 Christie Street Locked Bag 1837 St Leonards, 2065 St Leonards, 2065 www.agl.com.au asx statement 7 May 2008 For personal use only The following presentation will be made by Managing Director, Michael Frase
Slide 2: Renewables… Actions, not words
AGL Energy Limited For personal use only Renewables… Actions, not words Michael Fraser Managing Director & CEO Macquarie Capital Securities Australia Conference Sydney, May 2008
Slide 3: Disclaimer
2 Disclaimer For personal use only The information in this presentation: • Is not an offer or recommendation to purchase or subscribe for securities in AGL Energy Limited or to retain any securities currently held. • Does not take into account the potential and current individual investment objectiv
Slide 4: About AGL Energy
3 About AGL Energy For personal use only Australia’s largest energy retailer & leading integrated renewable energy company • Australia’s largest retailer of gas & electricity; • ~3.4m customer accounts across NSW, Victoria, South Australia, Queensland & the ACT (includes 100% of ActewAGL JV) • ~1.3m
Slide 5: AGL Energy – Asset Profile
4 AGL Energy – Asset Profile For personal use only
Slide 6: 2008 Interim Result - Overview
5 2008 Interim Result - Overview For personal use only On track to deliver FY08 EBITDA & NPAT guidance Victorian Gas Spot Price • $471.3m operating EBITDA, up 14.1% on pcp 45 • $372.9m operating EBIT, up 14.9% on pcp 40 • $182.8m underlying NPAT, down 6.5% on pcp Financial 35 • Interim Dividend of 2
Slide 7: 2008 Interim Result - Capital Management
6 2008 Interim Result - Capital Management For personal use only Modest debt refinancing requirements $m Active program underway to reduce debt by Debt maturing within 12 months 759.5 approximately $600 to $700 million in order to return ratio of FFO 1 to interest expense to 5x. Less: Undrawn facili
Slide 8: The Integrated Strategy
7 The Integrated Strategy For personal use only Building a world class energy company Gas Renewable Thermal Production Generation Generation • Market leadership in Upstream Supply renewables to benefit under a carbon constrained future Capturing value & growth Capturing value & growth Contract gas T
Slide 9: The Integrated Strategy - 'in action'
8 The Integrated Strategy - ‘in action’ For personal use only Energy Sales Indicative Costs & Retail Margins Retail margins Operating costs Deployment of the integrated Wholesale strategy ultimately energy costs of reduces cost ~$2.6 billion inputs and (~$1.7b electricity & ~$0.9b gas) improves fina
Slide 10: Market Leading Retail Capability
9 Market Leading Retail Capability For personal use only Project Phoenix is a 4 year program which is completely rebuilding AGL’s customer management processes & systems • Capture full synergy benefits - Release 1 and 2A delivered on time and budget – no systemic issues. - ~1.65 million VIC, SA & QL
Slide 11: Investing in the AGL Brand
10 Investing in the AGL Brand For personal use only Leveraging latent value in the brand • Extensive television and media campaign commenced late February 2008 • Align advertising with sales - Actively lifting investment in brand marketing to be consistent with leading market position. - Driving sal
Slide 12: Upstream Gas
11 Upstream Gas For personal use only Value optionality QGC1 QGC 4.00 3.50 • LNG project with BG Plc adds material upside to AGL 2P reserves $/GJ 3.00 +268% investment. 2.50 • No change to 540 PJ, 20 year GSA with 200 PJ option 2.00 3.57 (100 PJ already exercised). 1.50 • No change to domestic gas m
Slide 13: Wholesale Gas Competitiveness
12 Wholesale Gas Competitiveness For personal use only Market pricing mechanisms ensure ongoing margin maintenance • Considerable portfolio flexibility: ACQ ‘up & down’, MDQ, ToP & flexible delivery points. • Rolling buy long / sell short portfolio strategy. • Pricing mechanism & flexibility ensure
Slide 14: Expanding Gas Generation Portfolio
13 Expanding Gas Generation Portfolio For personal use only The current AGL generation portfolio already delivers material portfolio benefits via reduced COGS Existing gas generation Torrens Island Power Station (South Australia) • 1,280 MW - intermediate & peaking plant, additional underground gas
Slide 15: Generation - a Balanced Portfolio
14 Generation - a Balanced Portfolio For personal use only A diverse generation portfolio to mitigate market risks & benefit under a carbon constrained future • Diversity of fuel type (renewables, gas & coal) • Diversity of generation type – base, intermediate & peak • Current generation asset mix a
Slide 16: Market Leadership in Renewable Energy
15 Market Leadership in Renewable Energy For personal use only Australia’s largest privately owned renewable portfolio Existing renewable portfolio (owned &/or operated) • 645.5 MW Hydro • 101 MW Landfill, Biomass, Bagasse & Solar • 90.4 MW Wind (operator & capacity rights) Under construction • 140
Slide 17: Expanded Mandatory Renewable Energy Targets (MRET)
Expanded Mandatory Renewable Energy Targets 16 (MRET) – additional renewables For personal use only • New Federal Government Policy - By 2020, an additional 35,500 GWh of renewable energy required • Will require construction of ~12,000 MW of new renewable capacity • Total investment value anticipate
Slide 18: Indicative New Build Generation Mix
Indicative New Build Generation Mix 17 Under a carbon constrained environment For personal use only Investment in renewable generation under an expanded MRET displaces gas fired generation and moderates the demand for gas as a transitional fuel Current MRET + ETS Expanded MRET + ETS Current MRET 202
Slide 19: Expanded MRET – Moderates Gas Demand
18 Expanded MRET – Moderates Gas Demand For personal use only Gas demand is materially moderated under the proposed Federal Governments combined ETS and expanded MRET Policies Indicative Gas Demand Scenarios1 Proposed › Expanded MRET drives Federal uptake of renewable Govt generation at the expense
Slide 20: A Carbon Effective Portfolio
19 A Carbon Effective Portfolio For personal use only Both the current & potential AGL generation portfolios are well positioned to deliver material upside in a carbon environment • Emissions Trading to be introduced by 2010 • AGL modelling indicates that under either permit allocation for dispropor
Slide 21: The Integrated Strategy – Opportunities
20 The Integrated Strategy – Opportunities For personal use only 95 MW Hallett 1 On schedule & on budget, due for completion 2HFY08 (SA) wind: 140 MW Bogong (Vic) hydro: Ahead of schedule & on budget, due for completion 1HFY10 71 MW Hallett 2 (SA) wind: Under construction, due for completion 1HFY10
Slide 22: Financial Outlook & Strategic Priorities
21 Financial Outlook & Strategic Priorities For personal use only • On track to deliver FY08 guidance: - Operating EBITDA $830 to $875 million. Financial - Underlying NPAT $3301 to $3601 million. outlook • Total FY08 annual dividend 52 to 55 cents per share, fully franked. • Modest (calendar 2008) r
Slide 23: Further Information & contacts
22 For personal use only Further Information & contacts A range of information on AGL Energy Limited including ASX & Media Releases, Presentations, Financial Results as well as historical ‘The Australian Gas Light Company’ Scheme Booklets, Annual Reports, Sustainability Reports, Presentations and Fi
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