Challenger Limited · ASX:CGF
Challenger — Challenger Infrastructure Fund — HY11 Earnings Presentation
26 slides from Challenger's earnings presentation, Feb 15, 2011
Slide 1: Challenger Infrastructure Fund Half Year Results Presentation
Challenger Infrastructure Fund Half Year Results Presentation – February 2011 Chief Executive – Emil Pahljina 15 February 2011
Slide 2: Important notice
Important notice Information contained in this publication is current as at 15 February 2011 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: CIF - HY11 Operating summary
CIF - HY11 Operating summary • Asset EBITDA performance in line with expectations Operating • Operational performance of both assets continues to be resilient notwithstanding continuing difficult market Performance conditions • Focused business strategy, with strong pipeline • Focus on implementatio
Slide 4: CIF - Financial performance
CIF - Financial performance Appreciation of the AUD against GBP, USD and EUR has adversely impacted fund earnings Removing currency impacts from the fund level proportionate EBITDA, earnings are flat pcp $A millions – Continuing Business HY11 HY10 % Mvt Statutory Results Proportionate EBITDA1 $62.3
Slide 5: CIF – June NAV updated for currency and cash movements
CIF – June NAV updated for currency and cash movements at the fund level CIF NAV June 2010 NAV updated for currency and cash $2.50 $2.19 $1.96 movements, to $1.96 $2.00 Currency movements (17 c) (7 c) 1c represent 17 cents per security reduction in NAV $1.50 due to the appreciation of the AUD $1
Slide 6: CIF – Financial flexibility
CIF – Financial flexibility $219 Financial flexibility million for CAPEX and 250 $198 capital management million initiatives 200 ($23m) $5m ($3m) 150 $m 100 50 0 Cash at 30 June 2010 June 10 Distribution Net interest, Buy Back Cash at 31 December management fee and 2010 other 6
Slide 7: Inexus
Inexus
Slide 8: Inexus – Financial performance
Inexus – Financial performance Consistent EBITDA growth driven by continued rollout of existing order book £ millions HY11 HY10 % Mvt Trend Revenue £31.6 £29.3 7.8% h Underlying EBITDA £23.1 £21.0 10.0% h Less: Restructuring costs £0.1 - - h EBITDA £23.0 £21.0 9.5% h Underlying EBITDA Margin 73% 72%
Slide 9: Inexus – Key Business Metrics HY11
Inexus – Key Business Metrics HY11 EBITDA 25 80% Summary 70% 20 60% EBITDA in line with expectations 15 50% despite difficult operating conditions Millions 40% 10 30% Solid connections for the half 18,469 5 20% Order book maintains above 10% 0 0% 200,000, so based on current orders Dec-05 Dec-
Slide 10: Inexus – Sales
Inexus – Sales Conversion of HY2011 Sales to UAEs Current Market Conditions Utility HY11 Sales Access to mortgages remains the Gas 1,634 principal obstacle to the recovery Electricity 3,411 British mortgage approvals fell to Water - their lowest level in 24 months, Fibre 1,018 December 20101 Dis
Slide 11: Inexus – Macro economic operating conditions
Inexus – Macro economic operating conditions Trends in Starts & Completions in England - Rolling 12 months Market environment 200,000 180,000 Securing a residential mortgage has 160,000 Starts become a more onerous process with 140,000 Completions increasingly stringent lending criteria 120,000 10
Slide 12: Inexus - Ongoing capital management
Inexus - Ongoing capital management Inexus debt matures August All UK bonds issued by rating (€bn) 2012, both syndicated bank and 25.2 21.2 9.1 9.7 11.0 6.9 10.8 9.0 100% debt capital market structures are 90% being assessed 80% NR 70% B 60% Refinancing structure expected to 50% BB be decided up
Slide 13: Inexus - Strategic Priorities
Inexus - Strategic Priorities 1. Maintain growth in Revenue, EBITDA and operating margins through roll out of the order book : UK housing completions are down 39% on highs of 2006/7 Medium term expectation is for house completions to gradually improve in line with recovery in consumer confidence
Slide 14: LBC
LBC
Slide 15: LBC – Financial performance
LBC – Financial performance Revenue and EBITDA impacted by stronger USD relative to the EUR (3.6%) as well as lower utilisation in Southern Europe and lower service revenues in the US FY11 Underlying EBITDA for LBC is expected to be in line with FY10 $US millions HY11 HY10 % Mvt Trend Revenue $115.6
Slide 16: LBC – Key business metrics HY11
LBC – Key business metrics HY11 EBITDA 140 50% 120 40% Summary 100 30% Utilisation remains high across the Millions 80 60 group particularly in the US and Asia 20% 40 Tank modifications are taking place in 10% 20 Europe in order to boost utilisation 0 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 De
Slide 17: Project progression – 3 year CAPEX plan
Project progression – 3 year CAPEX plan Country Terminal FY11 FY12 FY13 United Sunshine States Antwerp North Rotterdam Europe Cepsa South Santander Europe Nantes Sogestrol Approved Negotiations in progress 17
Slide 18: Sunshine project (Louisiana, USA)
Sunshine project (Louisiana, USA) First tranche of USD $5.8 million approved First tranche, 25,000m3 Payback period ~5 years Contracts agreed with new and existing customers This is the first tranche of a material expansion over 24 months First tranche expected to be above IRR hurdle of
Slide 19: Antwerp project (Belgium)
Antwerp project (Belgium) Two separate projects totalling US$54 million to be undertaken as contracts are negotiated First Antwerp project approved USD $17 million First tranche, 41,000m3 First tranche expected to be above IRR hurdle of 15% Significant demand for larger storage tanks for b
Slide 20: Drivers of storage demand
Drivers of storage demand Global Trade Flows Gasoline (Million tonnes per annum) Source – Wood McKenzie Gulf Coast Trade Petroleum Products1 Port of Rotterdam Throughput 2 700 120 600 100 500 Metric Tonnes (millions) 80 Million Barrels 400 60 300 40 200 20 100 0 0 20 1998 1999 2000 2001 2002 2003 20
Slide 21: LBC - Strategic Priorities
LBC - Strategic Priorities 1. Optimise performance from existing operations : Significant progress being made in Northern Europe Impact of the GFC has been hardest in Southern Europe particularly Marseille and Iberia. Opportunity to improve utilisation at these terminals Prudent management of
Slide 22: CIF Outlook
CIF Outlook
Slide 23: CIF – Outlook
CIF – Outlook Continued EBITDA growth in FY11 expected Maximise unit holder value from existing connections and Inexus management of the order book Maximise first mover advantage in multi utility strategy Progress senior debt refinancing Financial performance for FY11 is expected to be in
Slide 24: Additional information
Additional information
Slide 25: CIF Statutory results
CIF Statutory results $A millions HY11 HY10 % Mvt EBITDA before realised & unrealised items 89.6 79.9 12% Depreciation and amortisation (30.6) (34.5) 11% Financing costs (47.8) (56.0) 15% Realised and unrealised gains/(losses) 5.8 (112.2) Large Impairment change - (60.4) Large Profit / (Loss) before
Slide 26: Slide 26
Challenger Infrastructure Fund — HY11 Earnings Presentation on 6ix