Agl Energy Limited · ASX:AGL
Agl Energy — Non-Deal Roadshow (March 2004)
28 slides from Agl Energy's roadshow presentation, March 2004
Slide 1: Investor Presentation - March 2004
INVESTOR PRESENTATION - MARCH 2004 1 INVESTOR ROADSHOW - MARCH 2004
Slide 2: Agenda
AGENDA • AGL Overview • December 2003 Half Year Results • Australia’s Energy Supply Environment • 2004 Priorities •Power Generation and Loy Yang Power • June 2004 Full Year Outlook 2 INVESTOR ROADSHOW - MARCH 2004
Slide 3: AGL Overview
AGL OVERVIEW 3 INVESTOR ROADSHOW - MARCH 2004
Slide 4: Australian Market Leadership Positions
AUSTRALIAN MARKET LEADERSHIP POSITIONS (A$4.7B Funds Employed) Gas & Electricity Distribution Networks Infrastructure Operations & Management Energy Retailing Australia’s largest energy supply company ... 4 INVESTOR ROADSHOW - MARCH 2004
Slide 5: New Zealand - NGC Holdings Limited
NEW ZEALAND - NGC HOLDINGS LIMITED AGL ownership - 66% (A$0.66B Funds Employed) Energy Metering LPG Production & Distribution Gas Transportation AGL’s principal New Zealand investment ... 5 INVESTOR ROADSHOW - MARCH 2004
Slide 6: December 2003 Half Year Results
DECEMBER 2003 HALF YEAR RESULTS 6 INVESTOR ROADSHOW - MARCH 2004
Slide 7: Financial Results Summary
FINANCIAL RESULTS SUMMARY 1H Underlying* Profit Reported Performance Performance Profit Attributable to $m Shareholders $205.7m Up 7.9% 250 Operating Cash Flow $375.7m Up 10.9% 200 EPS 45.4cps Up 2.9% 150 Dividend 29.0cps Up 11.5% (76% franked) 100 50 Underlying* Performance on core assets 0 2002 20
Slide 8: Major Items of Note
MAJOR ITEMS OF NOTE • Cooler weather in NSW and Victoria compared to prior year • Trade Practices clearance on Loy Yang A • “A” credit ratings reconfirmed • Retail tariff certainty - 4 year price path in Victoria • Successful capital return and bond raising by NGC (NZ) • Moomba Incident Jan 2004 8 I
Slide 9: Financial Performance
FINANCIAL PERFORMANCE 1H 2003 1H 2004 Change $m $m % External Sales Revenue 1 933.7 2 135.4 + 10.4 EBITDA 534.5 514.9 - 3.7 EBIT 397.7 406.0 + 2.1 NPAT 201.9 222.0 + 10.0 Outside Equity Interests (11.3) (16.3) Profit attributable to Shareholders 190.6 205.7 + 7.9 Underlying* Profit 187.4 226.1 + 20.
Slide 10: Significant Items
SIGNIFICANT ITEMS 1H 2004 $m Telecommunications Dingo Blue 16.2 TransACT (25.0) Other Non-core Windimurra Power Gen (3.7) Net Significant Items (12.5) (After Tax) Non – Core Assets Funds Employed: $m COMindico 15.6 WA Power Generation 22.6 Property 47.5 Total 85.7 Non-core assets represent 1.6% of A
Slide 11: Cashflow
CASHFLOW 1H 2003 1H 2004 Change $m $m % E B IT D A 5 3 4 .5 5 1 4 .9 - 3 .7 W o r k in g c a p ita l ( 4 5 .1 ) ( 1 2 .9 ) + 7 1 .4 E q u ity a c c o u n tin g a s s o c ia te s & J V s ( 9 .5 ) ( 6 .1 ) + 3 5 .8 B o r r o w in g c o s ts ( 9 2 .6 ) ( 6 3 .9 ) + 3 1 .0 T a x p a y m e n ts ( 4 5 .8
Slide 12: Strong Financial Position
STRONG FINANCIAL POSITION 1H 2003 1H 2004 Change Funds Employed Australia ($m) 4 452.9 4 628.9 + 4.0% New Zealand ($m) 1 378.1 660.8 - 52.0% EBIT*/FE (%) (Half Yr) 7.4 8.0 + 0.6 Debt Information Net Borrowings ($m) 2 751.2 1 951.4 - 29.1% Interest Coverage (times) 4.3 6.5 + 2.2 Gearing (D/D+E) (%) 4
Slide 13: Segment Results
SEGMENT RESULTS EBIT * 1H 2003 1H 2004 Change $m $m % Energy Sales & Marketing 124.8 156.3 + 25.2 Energy Networks - Gas 80.1 89.4 + 11.6 - Electricity 28.7 33.9 + 18.1 New Zealand 83.7 71.7 - 14.3 Australian Energy Investments 49.1 46.4 - 5.5 Agility 25.6 27.0 + 5.5 Telecommunications 0.0 (0.9) NA O
Slide 14: Energy Sales & Marketing
ENERGY SALES & MARKETING 1H 2003 1H 2004 Change Sales Revenue 1 499.6 1 785.0 + 19.0% EBIT ($m) 124.8 156.3 + 25.2% • Demonstrated EBIT/Sales (%) 8.3 8.8 + 0.5 ability to sustain margins Energy Volume sold • 826 000 dual Gas (PJ) 80.4 89.1 + 10.9% fuel accounts, Electricity (GWh) 10 504 11 208 + 6.6
Slide 15: Energy Sales & Marketing: Retail Business Focus
ENERGY SALES & MARKETING Retail Business Focus AGL Market Share* by Customer AGL Customer Spread* 5% Numbers - Vic, NSW, ACT, SA 3% 26% 23% 36% 1% 64% 16% 26% NSW Gas NSW Elec Vic Gas Vic Elec AGL Other SA Elec ACT Gas ACT Elec Key Business Drivers • Leveraging scale • Optimising wholesale energy po
Slide 16: Energy Sales & Marketing: Retail Tariff Regulatory Outcomes
ENERGY SALES & MARKETING Retail Tariff Regulatory Outcomes Regulatory Outcomes – from July 2003 Gas Electricity NSW • 8.7% increase from 1 July 2003 South • 1.7% increase from Australia 1 Jul 2003 Regulatory Outcomes – from Jan 2004 South • No change Australia Victoria • 5% increase for • 0.5% and 1
Slide 17: Energy Networks
ENERGY NETWORKS 1H 2003 1H 2004 Change EBIT ($m) 108.8 123.3 + 13.3% Volume Transported Gas (PJ) 50.5 52.2 + 3.4% Electricity (GWh) 2 037 2 096 + 2.9% Customer Connections Gas 879 000 910 000 + 3.5% Electricity 269 000 276 000 + 2.6% Network Length Gas (km) 22 859 23 099 + 1.0% Electricity (km) 7 15
Slide 18: Australia's Energy Supply Environment
AUSTRALIA’S ENERGY SUPPLY ENVIRONMENT 18 INVESTOR ROADSHOW - MARCH 2004
Slide 19: Australian Energy Supply Sector Environment
AUSTRALIAN ENERGY SUPPLY SECTOR ENVIRONMENT Industry Gas & consolidation Electricity continuing demand growing Establishment of Interconnections Single National facilitating national Regulator market development National Energy Greenhouse Policy pricing signals being developed emerging Energy Supply
Slide 20: 2004 Priorities
2004 PRIORITIES 20 INVESTOR ROADSHOW - MARCH 2004
Slide 21: 2004 Priorities
2004 PRIORITIES • Organic growth initiatives in existing operations • Mid-stream pipeline opportunities • Power Generation & Renewables opportunities • NZ value enhancing opportunities Pursuing profitable growth ... 21 INVESTOR ROADSHOW - MARCH 2004
Slide 22: Power Generation
POWER GENERATION Power Generation Strategy • Positions of vertical integration where appropriate: • Peaking Generation integrated with retail business - Somerton, Hallett • Acquisition /Expansion/ Greenfields • Power Generation Investments: • Earnings & portfolio diversification • Loy Yang A Investm
Slide 23: Transaction Overview
TRANSACTION OVERVIEW • Acquisition of a 32.5% interest in Loy Yang A • Largest base-load electricity power generator in Victoria and adjacent coal mine with more than 40 years of resource. • Lowest cost generator in the National Energy Market (NEM) • Output of 2,200 MW represents • 24% of Victoria’s
Slide 24: Strategic Rationale
STRATEGIC RATIONALE • Loy Yang A investment • Attractive financial returns • Earnings and portfolio diversification • Opportunity to enter base load generation market with experienced partner • Provides natural income hedge to existing business • Reduction in counterparty contracting risk • AGL will
Slide 25: Ownership Structure
OWNERSHIP STRUCTURE AGL TEPCO CBA MTAA Mitsui Westscheme 32.5% 32.5% 15.2% 10.3% 5.5% 4.0% GEAC* Consortium Marketing LOY YANG A Agency agreement Management Power Station Company & Coal Mine (no AGL ownership or involvement, consistent with ACCC undertaking) * GEAC: Great Energy Alliance Corporation
Slide 26: 2004 Full Year Outlook
2004 FULL YEAR OUTLOOK 26 INVESTOR ROADSHOW - MARCH 2004
Slide 27: 2004 Full Year Outlook
2004 FULL YEAR OUTLOOK Building on a strong first Half Underlying Profit Performance Overall result impacted by: • Moomba supply incident - anticipated impact about $5m (pre-tax) • Summer electricity demand & wholesale electricity prices • Non-core assets - COMindico equity accounting impact to cont
Slide 28: Investor Presentation - March 2004
INVESTOR PRESENTATION - MARCH 2004 28 INVESTOR ROADSHOW - MARCH 2004