Infratil Limited · NZX:IFT
Infratil — Investor Day (February 2009)
80 slides from Infratil's investor day presentation, Feb 24, 2009
Slide 1: Aligning portfolio with long term trends for success
Placeholder for client logo Aligning portfolio with long term trends for success Presentation to Investor Community February 24, 2009
Slide 2: Clear that we are living in turbulent times
Clear that we are living in turbulent times Xxxxx-xx/Footer 1
Slide 3: Two themes of this year's talk
Two themes of this year's talk How to choose the right waves to surf Predictable trends in unpredictable times What's in the portfolio How to navigate to stay on top of the waves Predictable risks in unpredictable times How to manage the portfolio Xxxxx-xx/Footer 2
Slide 4: Agenda
Agenda What are Megatrends—waves to surf Relevant Megatrends for Infratil portfolio Critical success factors for managing through crisis Xxxxx-xx/Footer 3
Slide 5: Most people are familiar with Megatrends from leading stories
Most people are familiar with Megatrends from leading stories... Xxxxx-xx/Footer 4
Slide 6: Megatrends are also being used by companies
Megatrends are also being used by companies to.... Identify What should our growth platform be? Growth Where are the opportunities? Areas Anticipate What are the risks, discontinuities, Global Risks & paradigm shifts I need to anticipate? Spot What are areas where we should be focusing? Strategic Ho
Slide 7: Megatrends are about pattern recognition
Megatrends are about pattern recognition. Some trends are: Linear Cyclical 1,000 1.0 5.0 900 0.9 4.5 800 0.8 4.0 700 0.7 3.5 600 0.6 3.0 500 0.5 2.5 400 0.4 2.0 300 0.3 1.5 200 0.2 1.0 100 0.1 0.5 0 0.0 0.0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 01/1992 01/1994 01/1996 01/1998 01/2000 01/
Slide 8: Much of our focus is on exponential waves
Much of our focus is on exponential waves Companies that Recognize Trends Early Can Gain Competitive Advantage Source: Ray Kurzweil Xxxxx-xx/Footer 7
Slide 9: We track what is happening in the world across four dimensions
We track what is happening in the world ...across four dimensions Terra Trends Economic Trends Tech Trends Meta trends Demographics Economy & Employment Platforms & Connectivity Scarcity vs. Abundance • Productivity/performance focus • Waste/waste management • Population Aging • Bandwidth • Water sc
Slide 10: Infratil's investment focused on energy, renewable energy, airports, & public transportation
Infratil’s investment focused on energy, renewable energy, airports, & public transportation Australia Energy Europe Airports NZ Transport Other NZ Energy NZ Airports Source: Infratil Interim Report, Sept 2008, http://www.infratil.com/media/PDF/ift_interim2008.pdf Xxxxx-xx/Footer 9
Slide 11: Infratil portfolio focused on key Megatrends
Infratil portfolio focused on key Megatrends Global Warming & Rise of Energy Volatility & Rise of Green Rise of multi- Rise of mobility Urbanization/ Aging Rise of Alternatives Products channel/ Web 2.0 infrastructure Risk & Security Rise of Trust Innovation Rise of Services Globalization Power of b
Slide 12: Agenda
Agenda What are Megatrends—waves to surf Relevant Megatrends for Infratil portfolio Critical success factors for managing through crisis Xxxxx-xx/Footer 11
Slide 13: Rise of mobility
Rise of mobility Global Warming & Rise of Energy Volatility & Rise of Green Rise of multi- Rise of mobility Urbanization/ Aging Rise of Alternatives Products channel/ Web 2.0 infrastructure Risk & Security Rise of Trust Innovation Rise of Services Globalization Power of brands Focus Economy imperati
Slide 14: Passenger travel volume likely to increase with some modal shifts
Passenger travel volume likely to increase with some modal shifts World passenger travel volume in trillion passenger km +4% CAGR 54.0 12.7 6.0% 3.6 1.8% +7% 12.9 2.2% 23.2 2.2 2.1 6.8 24.8 2.4% 5.5 0,1 1.1 12.1 1.3 3.0 1 1960 1990 2020 Passenger travel volume will still High-speed (planes and incre
Slide 15: Airline industry expected to enter another downturn
Airline industry expected to enter another downturn Net profit (in m$) 15,000 $60B 10,000 5,000 -76% 0 -5,000 -10,000 $74B -15,000 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008F 2009F Source:
Slide 16: Over time passengers bounce back to trend greater than GDP growth
Over time passengers bounce back to trend greater than GDP growth UK airport passenger volumes: 1987–2008 (K) Recent boom 250,000 9/11 dip recovered Total UK passengers in 18 months 1.5x GDP 200,000 Gulf War I, Economic 150,000 downturn 100,000 50,000 1987 1988 1989 1990 1991 1992 1993 1994 1995 199
Slide 17: Premium traffic & Cargo hit harder & earlier than economy passenger traffic
Premium traffic & Cargo hit harder & earlier than economy passenger traffic Cargo: earlier and sharper decline Premium traffic: earlier and sharper decline % Growth1 % Growth1 10 10 Passenger (RPK) Total Passenger Traffic Cargo (TFK) Premium Traffic FY 5 0 +1.6% FY 0 -10 -5 -20 -4.0% FY -10 -30 -15
Slide 18: LCCs are no longer niche players
LCCs are no longer niche players Ryanair & EasyJet now fly more PAX than top-3 flag carriers Intra-European passengers (in M O&D PAX, rolling 12 months; CAGR 2004–2008) Cont PAX rolling 12-month average (M) 60 50 40 30 20 10 0 2003 2004 2005 2006 2007 2008 Source: O&D market size; Internet; 4U und A
Slide 19: LCCs weather downturns better
LCCs weather downturns better Able to adjust cost base more rapidly to changes in demand US legacy carriers: 1986–2004 US Major LCCs: 1986–2004 Margin (%) YOY chg (%) Margin (%) YOY chg (%) 20 120 20 2001 120 2001 12 13 100 100 10 9 10 10 10 9 10 9 8 7 8 7 80 1990 7 1990 6 6 6 80 5 3 4 3 2 2 2 2 2 2
Slide 20: What has shifted is transportation mix
What has shifted is transportation mix Public transport has potential to be a hedge to downturn Trips per annum on Wellington region NZ Bus services Public transport trips per head of population Mill trips per annum Type per capita 20 160 Train 19 140 Bus 18 120 Regions smaller to larger 17 100 16 8
Slide 21: Uncertainties in mobility
Uncertainties in mobility Cost of fuel Impact of recession on mix of transportation options Impact of any stimulus spending Impact of new regulations Time to economic recovery Xxxxx-xx/Footer 20
Slide 22: Energy volatility and rise of alternatives
Energy volatility and rise of alternatives Global Warming & Rise of Energy Volatility & Rise of Green Rise of multi- Rise of mobility Urbanization/ Aging Rise of Alternatives Products channel/ Web 2.0 infrastructure Risk & Security Rise of Trust Innovation Rise of Services Globalization Power of bra
Slide 23: World energy consumption 50% higher by 2025
World energy consumption 50% higher by 2025--China & US 43% of increase ∆ 2002–25 World Energy Consumption by Region: 1980-2025 CAGR (%) Quad. 700 Quad. Btu Btu Africa 11 2.7 600 India 16 3.3 C & S America 15 2.3 Middle East 20 3.1 500 Asia 27 2.8 Cent. & Eastern 26 1.8 400 Europe China 67 4.2 300 W
Slide 24: Extremely volatile year for energy prices
Extremely volatile year for energy prices Average oil, natural gas and coal prices: 1980-2009 $/M Btu (2006 $) 16 1980-2008 CAGR (%) 14 12 Petroleum 4.4 10 8 6 Natural Gas 5.7 4 2 Coal 0.9 0 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 Source: Annual Ener
Slide 25: Oil and jet fuel prices have dropped by ~60% since peak levels
Oil and jet fuel prices have dropped by ~60% since peak levels USD/ barrel USD 200 -60% Jet fuel Oil 150 Futures up to 100 2015 now trading at ~USD 65-75 per barrel 50 0 January 2003 2004 2005 2006 2007 2008 January 2009 Several airlines now posting significant hedging losses as a result Source: BCG
Slide 26: Oil dominates (39%); Renewable sources small (8%) but growing
Oil dominates (39%); Renewable sources small (8%) but growing (2.4%) World Primary Energy Consumption by Fuel Type: 1980-2030 ∆ 2003–30 CAGR Quad. Btu 2003 2030 Quad. Btu (%) 800 Quad. Btu Quad. Btu 700 33 62 30 2.4 27 35 8 1.0 600 100 196 96 2.5 500 400 99 190 91 2.4 300 200 162 239 77 1.4 100 421
Slide 27: New Zealand shares of total primary energy supply reflect changing mix
New Zealand shares of total primary energy supply reflect changing mix 1990 2007 Hydro Hydro 13.1% Gas 11.3% Gas 22.6% 28.7% Geothermal Geothermal 14.7% 12.5% Other Renewables1 Other 6.7% Renewables1 5.3% Coal (net) Coal (net) Oil (net) 9.2% 8.4% 37.7% Oil (net) 22.4% 1. Includes solar water heating
Slide 28: Renewable electric production grew 9.4% vs 1.8% for total primary energy supply
Renewable electric production grew 9.4% vs 1.8% for total primary energy supply Wind the clear winner Renewable electricity sources1 Annual growth rates from 1990 to 2006 Solar & Tide 25 24.5 2% Wind 26% 20 Biomass Anual electricity 38% growth 15 1990- 2006 Average growth 9,4 %2 [%] 10 9.3 Geotherma
Slide 29: Investments in renewable energy tripled in last three years
Investments in renewable energy tripled in last three years: Unclear if 5x increase over the next 10 years will happen Global investment in renewable energy US$B 750 5X 746 700 200 150 150 3X 100 71 50 50 +15% 24 28 19 20 9 10 12 14 8 8 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2
Slide 30: Investments slowing off strong base
Investments slowing off strong base Global new investment Private equity new investment by sector in clean energy, 2004-2008 Q1 2004 - Q3 2008 -4% decline +60% growth ($B) ($B) 148.4 5 150 142.0 4.3 4.2 +58% growth 4 100 92.6 3.0 +76% 3 2.7 growth 2.4 2.5 2.2 2.2 58.7 2.0 2 50 1.6 1.4 Other 33.4 1 B
Slide 31: Wind expected to be the most important renewable energy source by 2025
Wind expected to be the most important renewable energy source by 2025 Forecast annual global CO2 savings in 2025, by industry(1) MtCO2 1,600 Wind is likely to be renewable with the 1,200 biggest CO2 impact 800 400 0 Effici- Wind on Bio- Fuel Wind offSolar PV 2G Geo- Etha- nol Bio- Marine ency mass
Slide 32: Unknowns in energy volatility
Unknowns in energy volatility Will energy price volatility continue at this pace? Will recession place sustained downward pressure on prices? Which alternatives will achieve mass scale and falling price curves? Level of subsidies and policies governments will put in place? Amount of stimulus spendin
Slide 33: Global warming & rise of green products
Global warming & rise of green products Global Warming & Rise of Energy Volatility & Rise of Green Rise of multi- Rise of mobility Urbanization/ Aging Rise of Alternatives Products channel/ Web 2.0 infrastructure Risk & Security Rise of Trust Innovation Rise of Services Globalization Power of brands
Slide 34: Scenarios show current emission levels raise atmospheric CO2 concentrations
Scenarios show current emission levels raise atmospheric CO2 concentrations Global anthropogenic carbon emissions Annual global carbon emissions (BtC1) 25 Atmospheric CO2 300 312 325 380 440 530 Concentration (PPM) 20 18.5 15 11.9 10 6.4 5 3.0 2.0 0.5 0 1900 1950 1970 2000 2030 2050 1. Billion Ton o
Slide 35: Today's current path will dramatically rise atmospheric carbon concentration
Today’s current path will dramatically rise atmospheric carbon concentration If “business as usual1” continues , annual CO2 emissions will double to reach ~52 Gt in 2055 52 Historic CO2 emissions2 (until CO2 (Gt) 2004) Forecasted CO2 emissions1,2 + 26 Gt What needs to be reduced (as a minimum) 26 to
Slide 36: To mitigate these increases would require a large-scale portfolio of responses
To mitigate these increases would require a large-scale portfolio of responses Princeton University has developed the “7 wedge theory” to ...each wedge represents a major tackle CO2 emissions... investment challenge 52 E.g. how to reduce / prevent 1 wedge ~3-4 Gt1 CO2 (Gt) 11• Increasing efficiency
Slide 37: New Zealand Greenhouse Gas Emissions by Sector
New Zealand Greenhouse Gas Emissions by Sector Source:http://www.mfe.govt.nz/publications/climate/greenhouse-gas-inventory-overview-apr08/html/figure-3.html Xxxxx-xx/Footer 36
Slide 38: What has changed is mainstream markets: $100B emerging green market
What has changed is mainstream markets: $100B emerging green market Expected growth for Green markets (2006-2011) ($B) 230+ 250 4.7 Fuel cells 32.9 Solar 200 33.0 Wind 150 40.7 Biofuel 100+ 1.4 Fuel cells 100 15.6 Solar 47.2 Green building1 17.9 Wind 9.7 Organic cotton (retail) 20.5 Biofuel 50 14.0
Slide 39: Unknowns in climate change
Unknowns in climate change Will governments lower priority on environmental investment and regulation given economic crisis? How will the cost of green alternatives develop compared to non- environmentally friendly options? Which alternatives will achieve mass scale and falling price curves? What le
Slide 40: Rise of Urbanization/Infrastructure
Rise of Urbanization/Infrastructure Energy Volatility & Global Warming & Rise of Rise of mobility Rise of Green Aging Rise of multi- Rise of Alternatives Urbanization/ Products channel/ Web 2.0 infrastructure Risk & Security Rise of Trust Innovation Rise of Services Globalization Power of brands Foc
Slide 41: Urbanization: 2006 was an inflection point
Urbanization: 2006 was an inflection point The urban and rural population of the world, 1950-2030 Population (k) 9.0 8.0 World total population World urban population 7.0 World rural population 6.0 5.0 4.0 3.0 2.0 1.0 0.0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 202
Slide 42: Creating new Megacities
Creating new Megacities 1980 1990 2000 2010 21.9 Tokyo 25.1 Tokyo 26.4 Tokyo 26.4 Tokyo 15.6 New York 16.1 New York 18.1 Mexico City 23.6 Bombay Bombay 13.9 Mexico City 15.1 Mexico City 18.1 Bombay 20.2 Lagos 12.5 Sao Paulo 15.1 Sao Paulo 17.8 Sao Paulo 19.7 Sao Paulo 11.7 Shanghai 13.3 Shanghai 16.
Slide 43: Much of future growth will be in India & China
Much of future growth will be in India & China Mumbai Delhi Paris (Bombay) London Moscow Beijing Calcutta Istanbul Shanghai Seoul Dhaka Rhein- Karachi Ruhr Milan New York Chicago Tokyo Philadelphia Osaka Los Angelos Cairo Mexico City Lagos Buenos Aires Metro Manila 1960 Jakarta 2000 Rio de Janeiro S
Slide 44: Urbanization creates a tree of potential opportunities
Urbanization creates a tree of potential opportunities Needs Opportunities Multi-family units Housing Shelter Single units Office Comm. real estate Retail Road network (urban, inter-city) Cars/Trucks Road Ferries Buses Marine Bikes Mobility Rail network (mass transit, intercity) Rail Rolling stock A
Slide 45: Public infrastructure requires substantial investment
Public infrastructure requires substantial investment Total of planned spending on infrastructure over the next 20 years: Percent about EUR 15 trillion 100% 25% 22% Europe 27% EUR 4.0T 80% 38% Asia-Pacific 21% 60% EUR 6.0T 46% 53% 29% 40% North and South America 49% EUR 3.8T 20% 26% 26% 17% Africa,
Slide 46: Governments have stepped in
Governments have stepped in Public Commitments as of January 2009 675 756 6 297 525 Denmark 108 34 8 211 Netherlands Germany1 Belgium Belgium 20 30 194 1372 2 Russia 1,0003 Ireland U.K. 260 Sweden 586 700 486 6 31 Switzerl. 7 EU 250 Hungary Poland 35 38 212 USA France Greece China Japan 27 1 135 92
Slide 47: Unknowns in urbanization
Unknowns in urbanization Environmental Impact Vibrant Megacities or large slums Exact pattern and impact on transportation networks Impact of government regulations & stimulus spending Upside option for Infratil capabilities? Xxxxx-xx/Footer 46
Slide 48: Aging
Aging Global Warming & Rise of Energy Volatility & Rise of Green Rise of multi- Rise of mobility Urbanization/ Aging Rise of Alternatives Products channel/ Web 2.0 infrastructure Risk & Security Rise of Trust Innovation Rise of Services Globalization Power of brands Focus Economy imperative Entertai
Slide 49: Life expectancy has increased dramatically
Life expectancy has increased dramatically: Creating a third phase of life Age (years) 90 80 70 60 50 40 30 20 10 0 Prehistoric Egypt Ancient Roman 1620 1850 1900 2000 Times Greece Times (Mass.) (England) (USA) (USA) Source: Ross JA. International Encyclopedia of Population. New York-London; Santroc
Slide 50: Age wave is coming at different rates in different countries
Age wave is coming at different rates in different countries...But at predictable rates Demographic change in Germany—age pyramid 60-70 Years 35-45 Years 15–25 Years Men Women Men Women Men Women Age difference quotient(1): 23% Age difference quotient(1): 30% Age difference quotient(1): 38% 1980 201
Slide 51: New Zealand age pyramid is a bit less dramatic in terms of median age
New Zealand age pyramid is a bit less dramatic in terms of median age Age 1951 Age 2006 (years) Median age = 29 years (years) Median age = 36 years 100+ 100+ 80 80 60 60 40 40 20 20 0 0 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 Percent Percent Age 2031 Age 2061 (years) Median age = 41
Slide 52: But New Zealand population aged 65+ years expected to grow
But New Zealand population aged 65+ years expected to grow 1951 – 2061 (K) 700 65-74 years 600 500 75-84 years 400 85+ years 300 200 100 0 1951 1961 1971 1981 1991 2001 2011 2021 2031 2041 2051 2061 Estimated Projected Source: Statistics NZ, National Population Projections: 2006-2061 Xxxxx-xx/Footer
Slide 53: First order implication of the aging trend: Silver market
First order implication of the aging trend: Silver market ~$400B in US; over $1 Tr globally Needs Opportunities 14% of all housing expenses for 65+ Housing Shelter Stay in home market $50B in US Nursing home providers going global Nursing Homes Nursing homes $121B in US 32% of all health care costs
Slide 54: Although data is well known most companies not acting on it
Although data is well known & knowable most companies not acting on it Disparity in Marketing Disparity in Product Offerings 40% of the European population is over 50 75% of privately owned capital is in their hands 5% of marketing campaigns spend to reach this group. Xxxxx-xx/Footer 53
Slide 55: 'Active Seniors' are an increasingly significant market for NZ Bus
‘Active Seniors’ are an increasingly significant market for NZ Bus ‘SuperGold’ card gives over-65s free off- peak travel on NZ public transport Launched Oct 2008, triggering a significant boost in patronage 105% increase in over-65s on Auckland buses 48% increase in over-65s on ‘Go Wellington’ buses
Slide 56: Rise of multi-channel/Web 2.0
Rise of multi-channel/Web 2.0 Global Warming & Rise of Energy Volatility & Rise of Green Rise of multi- Rise of mobility Urbanization/ Aging Rise of Alternatives Products channel/ Web 2.0 infrastructure Risk & Security Rise of Trust Innovation Rise of Services Globalization Power of brands Focus Eco
Slide 57: On-line commerce is still growing rapidly
On-line commerce is still growing rapidly Worldwide e-Commerce ... and personalized and effective Sales – Forecast advertising Billions US Online Advertising Spending, by Format ($ Bill) $8,758 60 $9,000 Sponsorships $8,000 $7,612 $1,156 E-Mail Lead generation/referrals $7,000 $896 $6,326 Rich Media
Slide 58: Wireless and internet users growing
Wireless and internet users growing 13-15% Number of internet Number of mobile users users has been growing also experiencing huge growth Mobile users (Millions) Internet users (Million) 4,000 1,500 1,459 3,500 3,233 1,326 +13% 1,199 16% 3,000 +15% 3,015 10% 18% 2,776 10% 1,069 2,493 11% 20% 19% 21%
Slide 59: Multi-channel shoppers worth more than single- or dual-channel shoppers
Multi-channel shoppers worth more than single- or dual-channel shoppers BCG analysis shows shoppers across multiple channels spent 120-150% Multi-channel usage also shown to have a more at an apparel retailer causal effect over time Example multi-channel spend from a Example from apparel retailer si
Slide 60: Despite cost efficiencies, online is still only fraction of total global ad spend
Despite cost efficiencies, online is still only fraction of total global ad spend Ad budgets do not appear to have kept Internet made up less than 6% of up with changes in consumer behavior global advertising spend in 2006 Shares of US ad $ (%)1 US $B 50 TV 700 600 40 Out-of-Home 500 Over-investment
Slide 61: Proliferation of type of devices and information
Proliferation of type of devices and information Digital information growth: Exabytes1 Data growing faster than ability to process 2,000 : end hs Data tr nt ng o 1,500 r gi 9 m DVD, e ry Em eve RFID, 2x Digital TV, MP3 players, 1,000 Digital cameras, Moore’s Law (indexed) Camera phones, VoIP, Medica
Slide 62: Airlines experiencing the beginning of Web 2.0 across whole value chain
Airlines experiencing the beginning of Web 2.0 across whole value chain Research Customer Market Sell Service delivery Loyalty and develop service Examples of how airline customers are already interacting online Researching Receiving Buying tickets Learning about Changing flight Managing FF fares, f
Slide 63: Infratil developing on-line applications
Infratil developing on-line applications Online customer service for power customers (www.trustpower.co.nz and www.victoriaelectricity.com.au) Parking calculations and booking on line (Glasgow Prestwick airport, Wellington Airport shortly) (www.wellington-airport.co.nz/) Energy price updates SMS'd t
Slide 64: ...and positioning for the future
...and positioning for the future Xxxxx-xx/Footer 63
Slide 65: Agenda
Agenda What are Megatrends—waves to surf Relevant Megatrends for Infratil portfolio Critical success factors for managing through crisis Xxxxx-xx/Footer 64
Slide 66: Themes of this year's talk
Themes of this year's talk How to choose the right waves to surf Predictable trends in unpredictable times What's in the portfolio How to navigate to stay on top of the waves Predictable risks in unpredictable times How to manage the portfolio Xxxxx-xx/Footer 65
Slide 67: Collateral damage: The credit crisis is driving a downturn in real economy
Collateral damage: The credit crisis is driving a downturn in real economy What began as a credit crisis … … is driving a downturn in the real economy Credit crisis Lower 1 1 in U.S. real investment estate Corporate credit crunch and cash flow/ liquidity crisis Further Leverage crisis 5 reduction 2
Slide 68: Recessions combining credit crunch, equity crashes & real estate bubbles are the worst
Recessions combining credit crunch, equity crashes & real estate bubbles are the worst 76 most severe OECD recessions since 1960 We are now in #5 Credit/ banking 10 crunches 3 1 4 Housing Equity price 18 31 market crashes 9 crashes Xxxxx-xx/Footer 67
Slide 69: Companies need to plan for multiple waves
Companies need to plan for multiple waves & to still be surfing on other side Housing value Retail sales crash hit Government spending cuts locally Plant closings Job Securitization Mortgage default losses and spreading Asset sales Consumer of risk Bankruptcy spending & Consolidation cuts Investment
Slide 70: The real economy will face significant challenges
The real economy will face significant challenges No access to funds: increasingly difficult to secure short-term financing Access to financing will be Weak stock markets: less attractive and more difficult to raise new equity difficult and Significantly higher cost of capital: higher borrowing cost
Slide 71: Financial markets are in disarray
Financial markets are in disarray S&P Index from 1825 to 2007 2007 2005 Positive years: 129 (70%) 1994 1993 Negative years: 54 (30%) 1992 1987 1984 1978 1970 1960 2006 1956 2004 1948 1988 1947 1986 1923 1979 1916 1972 1912 1971 2000 1911 1968 1990 1906 1965 1981 1902 1964 1977 1899 1959 1969 1896 19
Slide 72: Severity of impact varies by sector
Severity of impact varies by sector Global earnings forecast by industry (2009 vs. 2008)1 – Nov 2008 Earnings forecast 2009 vs. 2008 (in %) 10% 0% -10% -20% -30% -40% -50% Basic Auto Oil& Gas Banks Chemicals Financial Constr. & Technology Industrial Retail Telecom Media Healthcare Travel & Utilities
Slide 73: 5 C's of successful crisis navigation
5 C's of successful crisis navigation Cost Cutting Culture Cash & Credit Line Management—Sufficient operating funds Contingency Plan—Smart Scenarios Consolidate—Position for Strength Communicate Key is to manage volatility and capture growth options for the future Xxxxx-xx/Footer 72
Slide 74: Most experts believe the financial crisis was not a black swan event
Most experts believe the financial crisis was not a black swan event "Black Swans" are rare events with three defining characteristics: 1. The event is highly improbable and unpredictable 2. It will have "massive consequences" 3. And, afterwards, experts invent reasons why it was predictable, not ra
Slide 75: Dozens of experts saw it coming
Dozens of experts saw it coming But labelled as Cassandras Nassim Nicholas Taleb Nouriel Roubini " Derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal -Warren Buffett Berkshire Hathaway Annual Report 2002 "Globalization creates inter
Slide 76: Not claiming that Infratil has a crystal ball
Not claiming that Infratil has a crystal ball Xxxxx-xx/Footer 75
Slide 77: ...but they are prepared for range of potential scenarios
...but they are prepared for range of potential scenarios Three potential scenarios Quick “Beat the recovery cycle” Deeper “Weather the downturn Storm” Prolonged “Keep Afloat” recession Xxxxx-xx/Footer 76
Slide 78: Some believe
Some believe Key to managing a crisis... is to keep an eye on the long term while you are dancing in the flames Xxxxx-xx/Footer 77
Slide 79: Or to remember there is a shoreline as you surf the waves
Or to remember there is a shoreline as you surf the waves Xxxxx-xx/Footer 78
Slide 80: For questions or further information on this presentation please contact
For questions or further information on this presentation please contact: Alison Sander, BCG Center for Sensing & Mining the Future [email protected] 001-617-973-1346 Xxxxx-xx/Footer 79