Challenger Limited · ASX:CGF
Challenger — Challenger Infrastructure Fund — H1 2009 Earnings Presentation
28 slides from Challenger's earnings presentation, Feb 17, 2009
Slide 1: Challenger Infrastructure Fund Half Year Results Presentation
Challenger Infrastructure Fund Half Year Results Presentation – February 2009 Chief Executive - Steve Bickerton Chief Financial Officer - Lucas Barry 17 February 2009
Slide 2: Important Notice
Important Notice Information contained in this publication is current as at 17 February 2009 unless otherwise specified and is provided by Challenger Listed Investments Limited (ABN 94 055 293 644) (AFSL 236887) (“CLIL”), as Responsible Entity of CIF Investment Trust 1 (ARSN 114 139 703) and CIF Inv
Slide 3: Agenda
Agenda 1. 2009 Half Year Results 2. Asset Performance 3. Outlook 3
Slide 4: 1. 2009 Half Year Results
1. 2009 Half Year Results
Slide 5: Highlights
Highlights Earnings - Highly predictable yet diversified cashflow – 62% regulated revenues Quality - Revenue of $251.9m up 28% pcp - Underlying Proportionate EBITDA growth of 19% pcp1 Capital - Sale of £100 million of Southern Water at NAV Management - Reduction in total proportional net debt by $1.
Slide 6: Earnings Quality – Resilient Asset Performance
Earnings Quality – Resilient Asset Performance CIF - Revenue growth 28% pcp - Underlying Proportionate EBITDA growth 19% pcp1 Inexus - Revenue growth of 24% pcp, reflecting build out of the order book - Underlying EBITDA growth of 28% pcp - Record half year sales of 59,981 (25% pcp), reflecting pote
Slide 7: Capital Management – Derisking & Prudent Management of Fund
Capital Management – Derisking & Prudent Management of Fund ¾ Completed sale of 1/3 of CIF’s stake in Southern Water for £100m - Sale price at NAV - Repaid £50.7 million of Redeemable Preference Securities (RPS) - Reducing CIF’s proportional net debt by A$560 million - $102 million of cash held at F
Slide 8: Distributions – Strong Operating Cashflow Generation
Distributions – Strong Operating Cashflow Generation ¾ Free cash flow of 31 cents per stapled security1 ¾ Interim distribution of 12 cents per stapled security 0.60 60 54 0.54 18 0.18 50 0.50 40 0.40 Cents per security 6 0.06 31 0.31 0.13 13 30 0.30 0.20 12 0.12 20 0.1 100 6 0.06 0.00 0 Operating Ca
Slide 9: Net Asset Value of $3.35 per Security
Net Asset Value of $3.35 per Security1 4.00 3.74 0.02 0.24 0.32 0.04 0.16 0.07 3.50 3.35 3.00 $AUD per security 2.50 2.00 1.50 1.00 0.50 0.00 NAV 30 Jun Southern Water Inexus LBC FX Spot Net Hedging Working Capital NAV 31 Dec 2008 2008 Notes: 1. Net asset value per security is calculated as the Dire
Slide 10: 2. Financial Performance
2. Financial Performance
Slide 11: CIF Financial Performance – Statutory Consolidated
CIF Financial Performance – Statutory Consolidated 1H09 1H08 % Mvt Trend Revenue $251.9m $196.4m 28% K Expenses ($137.5m) ($108.0m) 27% K Realised gains $19.1m $8.2m 133% K Depreciation ($34.0m) ($28.3m) 20% K EBIT before specific items $99.5m $68.2m 46% K Financing costs ($76.4m) ($63.5m) 20% K Net
Slide 12: CIF Financial Performance
CIF Financial Performance Underlying Proportionate EBITDA grew by 19% pcp 1H09 1H08 % Mvt Trend Underlying Proportionate EBITDA1 $208.0m $175.4m 19% K Underlying Proportionate EBITDA Margin 65% 59% 10% K Proportionate EBITDA2 $197.9m $175.0m 13% K Distribution Per Unit 12.0 14.5 -17% L 1 Underlying
Slide 13: Inexus – Financial Performance
Inexus – Financial Performance Growth in underlying EBITDA of 28% pcp in difficult market conditions 1H09 1H08 % Mvt Trend Revenue £24.6m £19.9m 24% K Underlying EBITDA1 £14.5m £11.3m 28% K Underlying EBITDA Margin 58.8% 56.9% 3% K Sales 59,981 47,885 25% K Connections 29,558 36,870 20% L 1 Underlyi
Slide 14: Inexus – Operating Performance
Inexus – Operating Performance Underlying EBITDA Highlights - Operating in market that has experienced 16 lowest level of housing starts since 1950 14 12 - Revenue growth of 24% pcp 10 £ million 8 - Highly predictable revenue and EBITDA from 6 in the ground assets 4 2 - Underlying EBITDA growth of 2
Slide 15: LBC – Financial Performance
LBC – Financial Performance Financial Performance 1H09 1H08 % Mvt Trend Revenue €86.1m €72.0m 20% K Underlying EBITDA1 €35.3m €27.6m 28% K EBITDA Margin 41.0% 38.3% 7% K Utilisation 95% 95% 0% Q Growth Capex €29.5m €33.1m 11% L Maintenance Capex €7.9m €7.4m 7% K 1 Underlying EBITDA excludes restruct
Slide 16: LBC – Operating Performance
LBC – Operating Performance Revenue Highlights 90 - Starting to realise benefits of growth capex 85 investment 80 - 28% growth in underlying EBITDA 75 € million 70 - 20% growth in revenue 65 60 - 52% growth in operating cashflow 55 50 - Utilisation maintained at 95% 1H08 2H08 1H09 - Cash reserves an
Slide 17: Southern Water – Financial Performance
Southern Water – Financial Performance Financial Performance 1H09 1H081 % Mvt Trend Revenue £335.0m £313.1m 7% K EBITDA £248.0m £218.8m 13% K EBITDA Margin 74.0% 69.9% 6% K Nominal Closing RCV2 3,236 2,980 9% K 1 HY08 refers to 6 months ended 31 December 2007. Interest acquired 15 October 2007. 2 Es
Slide 18: Southern Water – Operating Performance
Southern Water – Operating Performance Revenue Composition Highlights: - Southern Water continues to perform in line 100% with expectations 80% - EBITDA growth of 13% driven by capital 60% program 40% - RCV growth of ~9% consistent with regulatory 20% plan 0% 1H07 1H08 - Brighton & Hove received pla
Slide 19: 3. Summary and Outlook
3. Summary and Outlook
Slide 20: Outlook – Inexus
Outlook – Inexus Multi-utility strategy offsets lowest level of housing starts since 1950 ¾ Primary focus on August 2010 refinance options and long term hedging strategy ¾ Lower housing starts will naturally slow growth capex ¾ Proactive response to UK housing market conditions via focus on multi-ut
Slide 21: Outlook – LBC
Outlook – LBC Global economic downturn presents difficult operating conditions ¾ Significant capex investment of €64.3 million over last twelve months, revenue yet to fully reflect these completed growth projects ¾ Capex investment expected to slow in response to economic conditions ¾ LBC will delev
Slide 22: Outlook – Southern Water
Outlook – Southern Water Delivery of draft AMP5 outcomes in current economic conditions ¾ UK government focused on investment in infrastructure as recession stimulus response ¾ Reset to provide certainty to March 2015 - Final Determination released in November 2009 - RCV growth expected to be consis
Slide 23: Fund Outlook – Challenging economic, financial and capital markets
Fund Outlook – Challenging economic, financial and capital markets High Quality - Highly predictable yet diversified cashflow – 62% regulated revenues Assets - Proportional weighted average debt maturity of ~ 11 years - Highly predictable EBITDA in 2009 - Strong financial position to respond to diff
Slide 24: HY2009 Summary
HY2009 Summary Earnings - Highly predictable yet diversified cashflow – 62% regulated revenues Quality - Revenue of $251.9m up 28% pcp - Underlying Proportionate EBITDA growth of 19% pcp1 Capital - Sale of £100 million of Southern Water at NAV Management - Reduction in total proportional net debt by
Slide 25: Questions
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Slide 26: Contacts
Contacts Steve Bickerton Chief Executive Tel: 61 2 9994 7327 Email: [email protected] Lucas Barry Chief Financial Officer Tel: 61 2 9994 7022 Email: [email protected] Jenny Warat-Hughes Investor Relations Manager Tel: 61 2 9994 7663 Email: [email protected] Website: www.cha
Slide 27: Appendix
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Slide 28: Proportionate Debt Maturity Profile
Proportionate Debt Maturity Profile1 ¾ Proportional weighted average maturity of ~11 years1 ¾ Next major refinance point – August 2010 Inexus refinance 1,000 900 800 700 600 AUD $ million 500 400 300 200 100 0 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 and beyond LBC Inexus Southern Wat
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