Challenger Limited · ASX:CGF
Challenger — Challenger Infrastructure Fund — FY2011 Earnings Presentation
28 slides from Challenger's earnings presentation, Aug 26, 2011
Slide 1: Challenger Infrastructure Fund Results presentation
Challenger Infrastructure Fund (ASX: CIF) Results presentation for full year ended 30 June 2011 Emil Pahljina, Chief Executive 26 August 2011
Slide 2: Important notice
Important notice Information contained in this publication is current as at 26 August 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 Inves
Slide 3: CIF – Sum of the Parts
CIF – Sum of the Parts • Inexus Maintained impressive growth in revenue and underlying EBITDA Highly certain income streams with inflation-linked revenue from 622,570 utility connections in the UK Continued growth in EBITDA underpinned by the rollout of the order book of 186,435 additional fut
Slide 4: CIF - FY11 Overview
CIF - FY11 Overview • FY11 underlying EBITDA of £47.5m, up 10% on FY10 • Exclusive contract negotiations progressing on three Inexus Group new projects (total UAEs of circa 85,000) • August 2012 Inexus refinance negotiations are progressing • FY11 underlying EBITDA of US$96.0m is ahead of expectatio
Slide 5: Inexus – Financial Performance
Inexus – Financial Performance • Ten consecutive years of underlying EBITDA growth underpinned by: Revenues from the continued rollout of existing order book Inflation-linked revenue Diligent management of operating costs £ millions FY11 FY10 Mvt Trend Revenue £63.3 £60.3 5% h Underlying EBITD
Slide 6: LBC – Financial Performance
LBC – Financial Performance • Revenue and underlying EBITDA up 2% on pcp Improved performance in Asia and Northern Europe North America steady and improving Iberia and Southern France have been adversely impacted by local economic conditions $US millions FY11 FY10 Mvt Trend Revenue $241.5 $237
Slide 7: CIF - Statutory Results
CIF - Statutory Results • Currency impact on EBITDA ($27.0) million • EBITDA normalised for currency movements $205.3m up 1% $A millions FY11 FY10 % Mvt Trend EBITDA before realised & unrealised 178.3 203.1 (12)% i items Less: Depreciation and amortisation 59.4 61.5 3% h Financing costs 101.7 119.8
Slide 8: CIF - Strategic Review
CIF - Strategic Review • Management have consistently worked to close the gap between unit price and asset value, selling assets at or above NAV, paying down debt and other initiatives • The unit price has however continued to trade at a substantial discount • The Board has initiated a strategic rev
Slide 9: Inexus
Inexus challenger “2 ce 9
Slide 10: Inexus - Business Outline
Inexus - Business Outline • Inexus designs, builds, owns, operates and maintains a diverse range of low pressure and low voltage utility networks for housing developments throughout the UK • Inexus focuses on originating and owning highly predictable long-term revenue streams underpinned by stable a
Slide 11: Inexus - Key Business Characteristics
Inexus - Key Business Characteristics • Stable and secure inflation-linked regulated Diversified Asset Base revenue • Highly certain regulated income streams, EBITDA margins of 75%, highly predictable opex and little maintenance capex • Largest independent portfolio of utility assets in the United K
Slide 12: Inexus – Track Record
Inexus – Track Record Underlying EBITDA & margin • Inexus became a fully independent utility 50 80% network company in 2001 70% • 10 consecutive years of growth in 40 60% Pounds (£ millions) underlying EBITDA and operating 50% 30 margins 40% • Total number of installed and contracted 20 30% connecti
Slide 13: Inexus – Current Operating Environment
Inexus – Current Operating Environment UK Consumer Confidence index Market environment • Annual housing starts in England reached 110 98,300 for the 12 months to June 2011, 2% down on pcp 90 • Annual completions to June 2011 were 70 107,220, 39% below their peak (December 2007) and 4% down on pcp 50
Slide 14: Inexus - Outlook for New Housing
Inexus - Outlook for New Housing Projected Annual Number of New Households • Consensus is that there is a significant England up to 20251 and persistent shortage of housing in the UK • IPPR1 estimate the projected number of additional households in England for the period to 2025 to be between 206,00
Slide 15: Inexus - Growth Outlook
Inexus - Growth Outlook • In the short to medium term revenue and Conversion of Order Book to UAEs EBITDA growth will be driven by the continued rollout of the order book of 186,435 Gas 84,865 contracted connections or 307,123 Utility Electricity 52,794 Asset Equivalent (UAE) Water 30,640 • UAE is t
Slide 16: Inexus - Martello Lakes
Inexus - Martello Lakes • 1,050 plot development 67 miles south east of central London on the east coast of Kent • Outline planning granted May 2010 • Inexus submitted an integrated utility proposal in October 2010 • In November 2010 Inexus were selected preferred bidder and have signed heads of ter
Slide 17: Inexus – Refinance
Inexus – Refinance • Inexus debt matures August 2012 • Management continue to target new debt facilities, which should provide some capex funding support to roll-out the order book and new growth • Inexus management are in advanced discussions with a syndicate of banks • The timetable may be delayed
Slide 18: LBC
LBC 18
Slide 19: LBC - Business Outline
LBC - Business Outline • LBC is one of the world’s largest independent operators of bulk liquid storage terminals for chemical and petroleum products • LBC operates 14 terminals at strategic locations in the United States, France, Belgium, Netherlands, Spain, Portugal and China • The LBC terminal po
Slide 20: LBC - Key Business Characteristics
LBC - Key Business Characteristics • Diversified portfolio in strategic locations including the trading hubs Rotterdam, Antwerp and the United States Gulf Coast • Solid demand for storage in key ports underpinned by growing structural imbalances in the supply and consumption of transport fuels and k
Slide 21: LBC – Track Record
LBC – Track Record EBITDA & Revenue 400 50% 350 • Resilience in underlying EBITDA and 300 40% operating margins throughout the GFC • $US millions 250 30% Utilisation remains high across the Group 200 20% in particular the US (97%), Northern 150 100 Europe (91%) and Asia (99%) 10% 50 • Utilisation in
Slide 22: LBC – 3 year CAPEX Plan (T100)
LBC – 3 year CAPEX Plan (T100) Region Terminal FY11 FY12 FY13 United Baton Rouge States (Sunshine) Antwerp (TP 14) Northern Antwerp (2 projects) Europe ARA, multiple projects Southern Nantes/Bayonne Europe Board approved Contract negotiations & construction 22
Slide 23: LBC – T100
LBC – T100 New Project (Nantes/Bayonne, France) • New bitumen storage currently under negotiation with an oil major under a long term contract • Capex of US$23 million • Total development capacity of 26,000m3 utilising existing and available land at Bayonne and Nantes • Planned construction start da
Slide 24: LBC – T100
LBC – T100 Antwerp project (Belgium) - Update • LBC Antwerp is looking to capitalise on demand for base oils storage in Port of Antwerp • Additional tank pit (TP14) to add 41,000m3 at Antwerp • Total capex of US$18 million • Several parties have expressed interest in the available capacity • Contrac
Slide 25: CIF Outlook
CIF Outlook
Slide 26: CIF – Outlook
CIF – Outlook Historical momentum in EBITDA growth expected to continue Inexus Refinance of debt facilities on acceptable terms Conclude negotiations on three additional projects, total sales of circa 85,000 UAEs Continued growth in underlying EBITDA is expected for FY12 In the US and Nort
Slide 27: Appendix
Appendix
Slide 28: Source: Zero Carbon Hub
Source: Zero Carbon Hub Task Group Terms of Reference Carbon Compliance in Part L 2016 As Built Performance The recommended compliance levels {in blue) are for ‘as built’ performance (not the performance predicted from z design calculations). Task Group : narrowed zone : Apartments Houses : Carbon C
Challenger Infrastructure Fund — FY2011 Earnings Presentation on 6ix