Challenger Limited · ASX:CGF
Challenger — Challenger Infrastructure Fund — Non-Deal Roadshow (March 2010)
31 slides from Challenger's roadshow presentation, Mar 3, 2010
Slide 1: Challenger Infrastructure Fund Asian Roadshow Presentation
Challenger Infrastructure Fund Asian Roadshow Presentation Chief Executive - Steve Bickerton
Slide 2: Important notice
Important notice Information contained in this publication is current as at 3 March 2010 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 Investm
Slide 3: Investment highlights
Investment highlights Portfolio - Growth orientated infrastructure/utility portfolio Highlights - High quality predictable cashflows - High return, organic growth potential Attractive Return - Interim distribution of 7 cpu paid on 25 February 2010 - Confirmed distribution guidance of 14 cpu in FY10
Slide 4: Recent developments in CIF portfolio
Recent developments in CIF portfolio Refinance of - Successful refinance of £461m debt facility, demonstrating quality of Inexus b i business model d l Inexus • Existing bank group extended term of facility to 31 August 2012 • £426m senior facility priced at an initial margin of 250bps • £35m junior
Slide 5: Capital management
Capital management Summary Asset Sales 60% Four assets divested at prices at or ount) to NAV 40% above CIF’s NAV leading to: 20% CIF ttrading premium/(disco - Fund’s proportional net debt being 0% Jan-07 Aug-07 Mar-08 Oct-08 May-09 Dec-09 reduced from 67% to 58% over last -20% year -40% - No Fund le
Slide 6: 1. Inexus
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Slide 7: Overview of Inexus
Overview of Inexus Inexus Description - Inexus owns approximately 570,000 regulated utility connections with new product offerings across gas, gas CIF Ownership 82.5% meters, electricity, water, fibre and district heating Date of Initial Investment Sept 05 networks Cost of Acquisition (£m)1 152.0 -
Slide 8: Inexus - Strong growth in asset base
Inexus - Strong growth in asset base Strong connections growth in established gas and electricity market and strong sales in new markets of water and fibre Gas Connections (‘000s) Electricity Connections (‘000s) 600000 30000 500000 25000 400000 20000 300000 15000 200000 10000 100000 5000 0 0 Jun 06
Slide 9: Inexus – Resilient cash flows
Inexus – Resilient cash flows Inexus’ revenue is generated from regulated availability charges for access to its gas networks Gas Network Assets – Stable and Secure Long Term Regulated Revenues: - Inflation linked revenues with no volume exposure - Low operating risks – long useful asset life (>50 y
Slide 10: Inexus – Growth potential
Inexus – Growth potential Multi-utility model and provision of one-stop utility service for developers to drive future connections growth Inexus Growth Capex (£m)2 - Inexus has a strong track record in 20 80% generating ti a 28% CAGR since i i iti 1 acquisition 18 70% 16 60% - Inexus has the ability
Slide 11: Inexus - Example of growth potential
Inexus - Example of growth potential KINGS CROSS Site Facts: 2 500 residential 2,500 id ti l 5 million sq ft commercial IInexus appointed i t d as the th multi lti utility tilit and d llow carbon b energy solution l ti provider to Kings Cross Central – Europe’s largest regeneration project • Inexus
Slide 12: 2. LBC
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Slide 13: Overview of LBC
Overview of LBC LBC Description - LBCC is an independent global operator off storage terminals CIF Ownership 66.2% for bulk liquid chemicals and petroleum products Date of Initial Investment Jun 07 - LBC has 2.7 million cubic metres of tanking capacity Cost of Acquisition (€m)1 214.7 - LBC’s termina
Slide 14: LBC – Strategic growth locations
LBC – Strategic growth locations LBC’s terminals are strategically g y located in worlds highest g petrochemical activity regions The A-R-A (region (Antwerp-Rotterdam-Amsterdam): - #2 petrochemical t h i l region i globally l b ll - c.50% of Europe’s petrochemical activity - Western Europe accounts
Slide 15: LBC - Strong revenue resulting from stable customer base
LBC - Strong revenue resulting from stable customer base Revenue diversified across: 14 terminals; 300 products; 1 1,142 142 tanks; 400 contracts Stable and sustainable revenues - Significant Si ifi portion i off revenues under d take-or-pay k contracts, indexed i d d to iinflation fl i with ih cred
Slide 16: LBC - Strong growth in asset base
LBC - Strong growth in asset base Capacity (‘000 cubic metres) Revenue ($US‘000s) $ 140 2,800 120 2,700 100 2,600 80 2,500 60 2,400 40 2,300 20 2,200 0 2,100 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Utilisation (%) EBTIDA ($US ($US‘000s) 000s) 100% 60 90% 80% 50 CAGR = [
Slide 17: LBC – Growth potential
LBC – Growth potential Increasing demand for bulk liquid storage in Gulf Coast and ARA to drive future expansion EBITDA and EBITDA Margin (USDm) - Capacity has increased 23% across the portfolio since acquisition with 60 45% 41% EBITDA margins1 achieved and 50 40% 35% high utilisation rates maintain
Slide 18: LBC - Example of growth potential
LBC - Example of growth potential HOUSTON - Houston is the largest LBC site with 839,000 cbm capacity. - The land bank offers significant expansion potential in a key, global chemical and petroleum hub where competitors exhibit service and demerge issues. - This potential, subject to customer demand
Slide 19: 3. 2010 Interim Financial Results Overview
3. 2010 Interim Financial Results Overview
Slide 20: 1H10 Highlights
1H10 Highlights Solid - Continued strong asset performance with increasing EBITDA margins across both assets - Inexus’ EBITDA and EBITDA margin growth resulting from opex management operating - LBC’s performance driven by continued high demand for bulk liquid storage performance Capital - Successful
Slide 21: Net Asset Value of $2.50 per Security
Net Asset Value of $2 $2.50 50 per Security CIF NAV NAV updated d t d tto include: i l d $3.00 2.89 0.05 (0.30) (0.07) $2.50 (0.07) 2.50 - Significant foreign exchange $2.00 impact due to strengthened A t li D Australian Dollar ll vs St Sterling li and d Security Price $ $1.50 Euro $1.00 - Inexus va
Slide 22: CIF Statutory Results
CIF Statutory Results $A millions illi 1H10 1H09 %M Mvtt T Trend d EBITDA before realised & unrealised items 74.6 114.4 (35%) L Depreciation (34.5) (34.0) (1%) L Financing costs (49.7) (80.1) 38% L NP(L)BT & realised & unrealised items (9.6) 0.3 L Unrealised movements – derivatives1 (62.0) (33.7) N/
Slide 23: Inexus – Financial Performance
Inexus – Financial Performance Significant improvement in EBITDA margin driven by opex savings £ millions 1H10 1H09 % Mvt Trend Revenue from operations £25.1 £24.6 2% K Developer contributions – accounting change1 £4.2 £5.4 (22%) L Total revenue £29.3 £30.0 (2%) L Opex (£8.3) (£12.7) 35% L EBITDA1 £
Slide 24: Inexus – Operating Performance
Inexus – Operating Performance Highlights EBITDA1 - EBITDA growth of 21% from opex management 30 80% Underlying EBITDA (£ million) 70% - EBITDA margin improvement of 14% increasing Underlying EBITDA margin 25 60% 20 50% EBITDA margins to 72% 15 40% - Opex savings of £4.4 million on pcp due to 30% 10
Slide 25: LBC – Financial Performance
LBC – Financial Performance EBITDA growth of 15% during period $US millions 1H10 1H09 % Mvt Trend Revenue $123.7 $121.4 2% K Opex ($73.5) ($77.9) (3%) K EBITDA $50.2 $43.5 15% K EBITDA margin (%) 41% 36% 5% K Underlying EBITDA $50.2 $49.81 1% K 1 Excludes US$6.3m one-off non-recurring opex items. Fu
Slide 26: LBC – Operating Performance
LBC – Operating Performance EBITDA and d margin i Highlights 60 45% - Resilient revenue performance of 50 40% US$123.7 million in difficult market 35% 40 30% conditions $USD million 25% 30 20% - EBITDA growth of 15% as a result of 20 15% growth capex investment since acquisition 10% 10 5% - Solid pe
Slide 27: 4. Summary and Outlook
4. Summary and Outlook
Slide 28: Outlook – Continued Focus on Operational Performance
Outlook – Continued Focus on O Operational ti lP Performance f LBC - Maximise M i i operational ti l performance f off strategically t t i ll llocated t dEEuropean terminal assets - Investment in highly accretive growth capex to deliver ongoing revenue and EBITDA growth - Enhanced EBITDA margins Ine
Slide 29: Summary
Summary Strong Track - Delivered 107 cents in distributions since listing Record - Sold 4 assets at or above NAV - Reduced net proportional gearing by $2 billion over last 18 months - Delivered 28% g growth in EBITDA from existing gpportfolio 12 months - Purchased 19.8 million securities under the o
Slide 30: Questions
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Slide 31: Contacts
Contacts Steve Bickerton Chief Executive Tel: 61 2 9994 7327 Email: [email protected] L Lucas B Barry Chief Financial Officer Tel: 61 2 9994 7022 Email: lbarry@challenger [email protected] com au Jenny Warat Investor Relations Manager Tel: 61 2 9994 7663 Email: [email protected]
Challenger Infrastructure Fund — Non-Deal Roadshow (March 2010) on 6ix