Disclaimer This presentation has been prepared by Genesis Energy Limited (‘Genesis Energy’) for information purposes only. The informati on in this presentation is of a general nature and does not purport to be complete nor does it contain all the information required for an investor to evaluate an investment. This presentation may contain projections or forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks. Although management may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realised. EBITDAF, underlying profit and free cash flow are non-GAAP (generally accepted accounting practice) measures. While all reasonable care has been taken in compiling this presentation, to the maximum extent permitted by law Genesis Energy accepts no responsibility for any errors or omissions and no representation is made as to the accuracy, completeness or reliability of the information. This presentation does not constitute investment advice. Genesis Energy Limited Investor Day November 2018 2.
Investor Day Agenda 8:00 – 8:30 Welcome breakfast 8:30 – 9:00 Overview of the day Marc England • • Customer platform Nigel Clark • • 9:00 – 10:30 Business update Wholesale market Shaun Goldsbury • • Kupe (with Beach Energy) Andre Gaylard 10:30 – 11:00 Morning tea, including business intelligence demonstration • • Residential value and Business growth James Magill 11:00 – 12:30 Strategy Expo • • Generation transition and fuels optimisation Tracey Hickman and Chris Jewell • 12:30 – 1:00 Genesis outlook, followed by Q&A with Executive team Chris Jewell and Matt Osborne 1:00 – 1:30 Travel to Huntly Power Station 1:30 – 3:00 Tour of Huntly Power Station Genesis Energy Limited Investor Day November 2018 3.
Key messages Genesis Energy Limited Investor Day November 2018 4.
Our investment proposition of strong yield is underpinned by growth NZX 50 / ASX 100 YIELD COMPARISON EBITDAF DIVIDEND CENTS PER SHARE & YIELD Dividends (CPS) Net Yield % $ MILLIONS Mean 90th Percentile 12% 16.9 75th Percentile 25th Percentile 16.6 16.4 16.0 350-370 GNE 10% 10% 361 13.0 345 335 9% 333 7.7% 308 8% 8% 9.2% 6.9% 6.8% 7% 7.2% 6% 6% 5% 4% 4% 3% 2% 2% 1% 0% 0 0% 2015 2015 2016 2016 2017 2017 2018 FY14 FY15 FY16 FY17 FY18 FY19f FY14 FY15 FY16 FY17 FY18 1. Net dividend yield based on year end closing share price as at Bloomberg 30 June (FY18 $2.44) 2. FY18 full year dividend of 16.9 cps declared (up 1.8%), with 80% imputation, representing a 6.9% net yield. DRP offer remains in place with 2.5% discount Genesis Energy Limited Investor Day November 2018 6.
Genesis is powered by a great team… Aligning Continuing Valuing around our strong diversity of strategy to health and people and succeed safety focus ideas together Genesis Energy Limited Investor Day November 2018 7.
… supported by energised and inspiring leaders Directors Barbara Chapman Doug McKay Paul Zealand Joanna Perry Tim Miles Maury Leyland James Moulder Executive team Chris Jewell Tracey Hickman Nigel Clark James Magill Nicola Richardson Matthew Osborne Marc England Chief Financial Officer EGM Generation and EGM Customer and EGM Product EGM People and Culture EGM Corporate Affairs Chief Executive Wholesale Service Operations Marketing Other presenters Shaun Goldsbury Andre Gaylard David Gutteridge Troy Hicks Emma-Kate Greer Cameron Jardine Wendy Jenkins GM Wholesale GM Kupe and GM Residential Segment GM Business Segment GM Corporate Relations GM LPG Operations GM Planning and Corporate Finance Investor Relations Genesis Energy Limited Investor Day November 2018 8.
Our ways of working make us safe, fast and flexible 10% increase in velocity over last 125 people Squads have six months allowing engaged in 18 completed up to 60 for better squads aligned to sprints predictability of four tribes cost and benefit realisation Genesis Energy Limited Investor Day November 2018 9.
Our diversity and culture drive our successful strategy delivery Wellbeing and safety is more Commitment to being an Engagement and confidence in than just a responsibility inclusive and diverse employer business success on the rise Two thirds of 38% of employees have bought nearly GENDER MIX employees engaged into $1 million of shares Genesis R U OK through Genesis’ employee share scheme % % programmes female male 4 8 GENESIS EMPLOYEE & CONTRACTORS TRIFR STAFF BELIEVE OUR PRODUCTS AND 7 Oct 2016 - Oct 2018 1 SERVICES ARE AS GOOD AS, OR BETTER % 3 6 THAN, OUR COMPETITORS of senior Frequency Rate management 5 80% 0.26 Actual Injuries 1.20 including Directors 2 4 70% are female 30% point lift 3 60% 1 2 50% MINDING THE GAP 1 40% Gender pay gap has dropped 0 0 30% Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 20% % % 10% Lost Time Restricted Work 0% Medical TRIFR FY17 FY18 1 LPG business purchased August 2017 Genesis Energy Limited Investor Day November 2018 10.
Our purpose is to reimagine energy to put control in our customers’ hands Platform Fuels Brands Genesis Energy Limited Investor Day November 2018 11.
Genesis in numbers Genesis Energy Limited Investor Day November 2018 12.
Diversity of earnings across sectors, fuels and markets GROSS MARGIN CONTRIBUTION (FY18) KUPE 20% WHOLESALE 43% CUSTOMER 37% Gas 11% Business Residential electricity 20% electricity Renewable generation 30% 6% Oil 6% LPG 3% LPG 1% LPG 7% Gas 4% Thermal generation 12% Electricity Gas LPG Oil Genesis Energy Limited Investor Day November 2018 13.
Core markets stable or growing GRID DEMAND FORECASTS (GWH) GRID DEMAND 65,000 SHOWING SIGNS OF GROWTH (GWH) 4,000 60,000 Growth is 3,800 55,000 3,600 forecast in Est. 50,000 3,400 NZ energy 45,000 3,200 demand 3,000 40,000 2,800 35,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 5 year range 2018 Historical demand Transpower EA data MBIE - Low MBIE - High Productivity Comm. - Low Productivity Comm. - High GAS DEMAND STABLE LPG GROWTH CONTINUES 4 QUARTER MOVING AVERAGE (PJ) 60 ROLLING 12 MONTH SALES (KT) 200,000 50 160,000 LPG 45 kg 40 120,000 market grew 30 80,000 6% in last 20 40,000 12 months 10 0 - Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Consumption Energy Transformation Non-Energy Use Bulk Market 45 kg Market Forklift Market 9 KG Market kg Auto Market MBIE LPG data Genesis Energy Limited Investor Day November 2018 14.
…with electricity markets reflecting tighter capacity margins Regulatory Tiwai 4 th Energy and review of capacity potline electricity shortages adds to prices showing demand underway RESIDENTIAL ELECTRICITY PRICE (C/KWH) 400 WHOLESALE ELECTRICITY PRICE ($/MWH) NEW ZEALAND WINTER ENERGY 350 32 MARGIN FORECAST TO TIGHTEN 31 25% 300 30 250 29 20% 28 200 15% REQUIRED SECURITY MARGIN 27 150 26 10% 25 100 24 5% 50 23 0 0% 22 Jul-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Jan-16 Apr-16 Jul-16 Jan-17 Apr-17 Jul-17 Jan-18 Apr-18 Jul-18 Oct-13 Oct-15 Oct-16 Oct-17 Oct-18 2018 2019 2020 2021 2022 2013 2014 2015 2016 2017 2018 1% demand growth 2% demand growth MBIE data Average over the period EA data Transpower data Genesis Energy Limited Investor Day November 2018 15.
…and fuel markets tightening LPG Oil and gas International market exploration to oil prices have moves to be restricted increased net import FORECAST GAS AND LPG PRODUCTION PROFILE NZ LPG IMPORT/EXPORT PARITY PRICING (NZD/T) BRENT CRUDE (USD/BBL) 1,800 250 120 14 1,600 100 200 12 1,400 10 80 1,200 150 1,000 8 60 800 100 6 40 600 4 400 50 20 2 200 0 0 0 - 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Gas (PJ - LH Axis) LPG (PJ - RH Axis) Export parity Import parity Woodward Bloomberg MBIE data Genesis Energy Limited Investor Day November 2018 16.
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