Agl Energy Limited · ASX:AGL
Agl Energy — Macquarie Australia Conference 2016
23 slides from Agl Energy's conference presentation, May 6, 2016
Slide 1: Macquarie Australia Conference
Macquarie Australia Conference | 6 May 2016 1 Macquarie Australia Conference Brett Redman Chief Financial Officer Date 6 May 2016
Slide 2: Agenda
Macquarie Australia Conference | 6 May 2016 2 Agenda 1 2 3 4 5 AGL The NEM The NEM Innovation Conclusion today - tomorrow - in Retail – A fuel story The path to Giving decarbonisation customers control
Slide 3: Snapshot of AGL
Macquarie Australia Conference | 6 May 2016 3 Snapshot of AGL “Harnessing insights to enrich the customer’s energy experience”. Customers Generation › 178 years young Hydro Solar » Second oldest Gas Wind company on ASX Brown › Planning for the future Coal Gas » Greenhouse Gas Policy Electricity » In
Slide 4: FY16 Interim highlights
Macquarie Australia Conference | 6 May 2016 4 FY16 Interim highlights Underlying Profit up $73 million with Underlying EPS up 17%. › Statutory Loss of $449 million › Underlying Profit of $375 million up 24% » Higher electricity generation volumes (7 TWh) added $36 million » Higher wholesale electric
Slide 5: Queensland wholesale gas market
Macquarie Australia Conference | 6 May 2016 5 Queensland wholesale gas market Update on AGL sales position. › Queensland wholesale volumes strong AGL Queensland wholesale gas sales » FY17 margin ~$1/GJ lower due to mix 70 Firm Sales Potential Sales 60 50 40 PJ 30 20 10 0 FY16 FY17 FY18 FY19
Slide 6: Strategy update
Macquarie Australia Conference | 6 May 2016 6 Strategy update Strategic roadmap delivering results. Embrace transformation Drive productivity Unlock growth › Exiting gas exploration and › Leverage market › Investment in renewables production opportunities and customer value strategy › Targeted inves
Slide 7: The NEM today - A fuel story
Macquarie Australia Conference | 6 May 2016 7 The NEM today - A fuel story 2
Slide 8: Decline in residential electricity demand stabilising
Macquarie Australia Conference | 6 May 2016 8 Decline in residential electricity demand stabilising Leaving market over supplied. Change in residential electricity demand per customer (weather adjusted) (6%) (3%) (2%) (1%) 1H12 1H13 1H14 1H15 1H16
Slide 9: Wholesale electricity prices are rising
Macquarie Australia Conference | 6 May 2016 9 Wholesale electricity prices are rising From a low base, largely driven up by change in fuel landscape. Fuel landscape Electricity forward curve across National Electricity Market › Gas prices up driven by LNG $100 › Black coal domestic contracts $90 res
Slide 10: The NEM tomorrow – The path to decarbonisation
Macquarie Australia Conference | 6 May 2016 10 The NEM tomorrow – The path to decarbonisation 3
Slide 11: The National Electricity Market (NEM) needs to be refreshed
Macquarie Australia Conference | 6 May 2016 11 The National Electricity Market (NEM) needs to be refreshed ~75% of thermal plants in the NEM are past their original design life. NEM installed capacity by type NEM generation by age 50+ years Other Other Renewable 0-15 years 36-50 Hydro years 16-25 ye
Slide 12: Powering Australian Renewables Fund
Macquarie Australia Conference | 6 May 2016 12 Powering Australian Renewables Fund AGL to lead new innovative renewable investment funding. New initiative to stimulate investment Australia’s Renewable Energy Target › Announced February 2016 35 › $2-3 billion Fund ~5,000 MW required 30 » AGL to contr
Slide 13: Market over supply blocks new investment
Macquarie Australia Conference | 6 May 2016 13 Market over supply blocks new investment New build cost must compete with cash only running cost of sunk investment. Thermal generation cash running costs Renewable generation long run cost Cost Cost ($/MWh) ($/MWh) 100 100 80 80 60 60 40 40 20 20 - - B
Slide 14: Government policy needed to facilitate new renewables
Macquarie Australia Conference | 6 May 2016 14 Government policy needed to facilitate new renewables Closing old generation is the final step to unlocking a wave of new investment. › The national fleet needs to be refreshed › Funding is available › Market over supply blocks new investment › Permanen
Slide 15: Innovation in Retail – Giving customers control
Macquarie Australia Conference | 6 May 2016 15 Innovation in Retail – Giving customers control 4
Slide 16: Innovation in Retail Markets
Macquarie Australia Conference | 6 May 2016 16 Innovation in Retail Markets Giving customers the ability to take back control. FROM: TO: › Centralised generation › Rooftop solar › Mechanical meter › Digital meters › Read every 3 months › Battery storage › Simple tariff › Energy management › Pay by c
Slide 17: AGL is building a digital capability
Macquarie Australia Conference | 6 May 2016 17 AGL is building a digital capability From an analogue business publishing digitally into an end to end digital experience. Mobile App now includes “Solar Command” › 91,000 downloads to date Online sales up 51% year-on-year › Run rate ~90,000 sales per y
Slide 18: Targeted investments also add new capability
Macquarie Australia Conference | 6 May 2016 18 Targeted investments also add new capability Investing in new initiatives to grow business in carbon constrained future. Sunverge › Demand response management for batteries in homes › Strategic partnership in Australian market Solar Analytics › Real-tim
Slide 19: New Energy business unit up and running
Macquarie Australia Conference | 6 May 2016 19 New Energy business unit up and running Investing in emerging distributed technologies. Results progressing at customer level Cumulative solar sold (kW) 10,000 › Solar sales ramping up 1H15 1H16 8,000 › Digital meters will enable customer 6,000 experien
Slide 20: Conclusion
Macquarie Australia Conference | 6 May 2016 20 Conclusion 5
Slide 21: A change in the market is under way
Macquarie Australia Conference | 6 May 2016 21 A change in the market is under way And AGL is anticipating what it means to our customers. Electricity prices in the NEM are rising › Demand stabilizing › Different impacts of fuel driving up price from low base The market is preparing to decarbonise ›
Slide 22: Contact information
Macquarie Australia Conference | 6 May 2016 22 Contact information Investors Media Nicole Rizgalla Kathryn Lamond Investor Relations Manager Media Manager phone: +61 2 9921 2691 phone: +61 2 9921 2170 mobile: +61 (0) 400 488 836 mobile: +61 (0) 424 465 464 e-mail: [email protected] e-mail: klamon
Slide 23: Disclaimer and important information
Macquarie Australia Conference | 6 May 2016 23 Disclaimer and important information 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 pot