Event March 2018 Chris Jewell CHIEF FINANCIAL OFFICER G E N E S I - PowerPoint PPT Presentation

NZX Spotlight Event March 2018 Chris Jewell – CHIEF FINANCIAL OFFICER G E N E S I S E N E R G Y L I M I T E D

About Genesis Energy — only integrated energy management company in New Zealand KEY INFORMATION Revenue: NZ$2.0 billion , EBITDAF Guidance (FY18): NZ$350-360 million Dividend Yield: 6.7% Share Price: NZ$2.40 Market Capitalisation: NZ$2.4 billion Average Daily Turnover: 750,000 shares Credit Rating: BBB+ (Standard & Poors) Genesis Energy is a large, fully integrated energy management company. It is New Zealand’s largest energy retailer, generates electricity from a diverse portfolio of thermal and renewable assets located throughout the country, and has an interest in the Kupe oil and gas field offshore of Taranaki. MAR18 NZX SPOTLIGHT EVENT 2

Market fundamentals outlook — continue to be supportive • Electricity demand growth of 1% in 2017 with EV penetration accelerating • Total NZ gas demand down due to industrial however retail growth continues with Customer connections up over 15,500 in past five years • LPG demand growth remains strong, with 6% growth in market over last 12 months • Forward electricity prices more reflective of tightening supply/demand dynamics. Year 2 price is up $4MWh (5%) on prior comparable period Wholesale • Tiwai Point Aluminum Smelter economics stable with a more positive outlook • Forward carbon prices up to $24 per tonne in 2020 • Brent crude up 20% in 2017 with consensus outlook for 2018 in the range of US$59 to $62/bbl Kupe • LPG supply/demand balance tightening with a possible move to net import early 2020’s MAR18 NZX SPOTLIGHT EVENT 3

Strategy Company Financial Investor

Company strategy — five key strategic initiatives underpin our transformation REIMAGINING ENERGY to put control in our customers’ hands Optimise Innovate Invest To improve short term return For medium term growth For long-term value creation Core Strategic Deliver operational Increase value share Targeted growth in Initiatives Grow LPG category Build energy excellence and value of residential business category services optimisation category Insights and Analysis Foundation investments in technology & digital Enabling Embed data-driven decisions Initiatives Ways of working 5 MAR18 NZX SPOTLIGHT EVENT

Company strategy: Recent strategy highlights — transformation journey underway Launched NZ’s first real world research and Reset development energy Strategy and vision community Acquired additional 15% of Kupe for $168 million Acquired retail LPG distribution business of Nova Energy for $200m $192 million Delivered $200m EBITDAF H1 FY18 - Up 28% Supported NZ security Launched loyalty of supply during two program with dry periods >120,000 customers linked NZX SPOTLIGHT EVENT 6 MAR18

Company strategy: Innovating to lead — working with customers collaboratively to build our energy management capabilities Energy Innovation Management R&D Local Energy Energy Project Management New My Technologies Account Technology “Making Energy management real for our “Partnering with customers to test and develop the customers by initiating trials for our new services latest energy innovations and deliver products and which include energy forecasting which went live services that give them control about their energy this month.” use.” MAR18 NZX SPOTLIGHT EVENT 7

Financial strategy: FY21 target — target to deliver $400 - $430 million by FY21 $15m -$20m $12m -$17m $13m -$17m $6m -$10m $2m -$3m $9m -$14m $5m -$8m $400m - $430m $5m -$8m $385m - $410m $333m FY17 EBITDAF Operational Residential Business Grow LPG Energy Kupe Core growth 4 Original Nova Energy Revised FY21 excellence value share category category services FY21 EBITDAF retail LPG EBITDAF growth target business target 3 NOTES 1. Several initiatives are interdependent. As an example, energy services capability will contribute towards residential value share 2. All ranges are net of operational investment required to achieve target outcomes 3. Represents acquired EBITDAF in the acquisition of the Nova Energy retail LPG business not in original FY21 target. $4-6 million of synergies from the acquisition will be reflected in the “grow LPG category” 4. Core growth represents partial benefit from the rolling off of the take or pay gas contracts and natural growth in wholesale prices over time 8 MAR18 NZX SPOTLIGHT EVENT

Investor Strategy — continued growth in dividends with a 8.6% gross yield 1 and outperformance of TSR relative to peers • FY17 16.6c of dividends declared up 1.2% representing a cash yield of 6.7%. Dividend policy to grow in real terms over time with 3.8% growth delivered in past three years against inflation of 2.5% • TSR target of top quartile, translating to ~14%, with a focus on dividend yield plus growth • TSR has exceeded market by 7.2% and peer index by 4.1% in past 12 months DIVIDEND & PAYOUT HISTORY 2017 TOTAL SHAREHOLDER RETURN 200 100% 84% Total Dividends Paid ($millions) 180 90% 81% 2017 closing share price: $2.52 81% 80% 29.2% 73% 160 80% % of Free Cash Flow 25.1% 140 70% 22.0% 120 60% 100 50% 166 164 80 40% 160 130 60 30% 114 40 20% 20 10% 0 0% FY2013 FY2014 FY2015 FY2016 FY2017 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total dividends paid Total Dividend Paid as % of FCF Genesis Peer Index NZX50 1. Gross yield based on closing share price as at 29 December 2017. MAR18 NZX SPOTLIGHT EVENT 9

Dividend reinvestment plan — introduced for the HY18 dividend to support growth • To provide capital support for Genesis’ growth strategy, and provide DRP Details a cost effective way for shareholders to reinvest in Genesis’ growth Discount 2.5% strategy Dividend amount 8.3 cpu Price The volume weighted average sale • A discount of 2.5% will apply to the price, this may be amended for price over a period of five Business future dividends Days starting on the “Ex Date”, less the discount • Shareholders have the option of full, partial or no participation. If a shareholder elects to participate they will remain in the plan at the Key Dates same participation level until they elect to terminate or amend their Ex dividend date 5 April 2018 participation rate Final date to elect to participate 6 April 2018 • The New Zealand government has committed to participate to the Record date 6 April 2018 Payment and share issue date 20 April 2018 extent required to retain its 51% holding • Genesis has the right to terminate or suspend the plan at any time • Details of the plan will be sent to shareholders in early March MAR18 NZX SPOTLIGHT EVENT 10

HY18 financial overview — a diverse portfolio delivering consistent earnings over time • HY18 EBITDAF $200 million, up 28%, FY18 guidance of $350 - $360 million • NPAT down 24% to $28 million, due to fair value movements, underlying earnings up 14% to $43 million • Operating cash flow up 57% to $199 million, and free cash flow up 37% to $129 million EBITDAF BY SEGMENT EBITDAF $ MILLIONS $ MILLIONS 400 55 400 50 350 350 80 94 84 45 107 300 300 40 172 159 250 250 177 157 35 200 200 194 176 56 201 30 169 150 150 25 106 100 200 100 20 176 173 156 151 110 50 50 103 15 87 83 58 0 0 10 FY14 FY15 FY16 FY17 HY18 FY14 FY15 FY16 FY17 HY18 Customer Generation & Wholesale Kupe Corporate MAR18 NZX SPOTLIGHT EVENT 11

A coal free electricity future — Genesis believes in a coal free future At Genesis we are taking steps to ensure New Zealand can move to an even more renewable future – we believe in a coal-free future for electricity generation in New Zealand. MAR18 NZX SPOTLIGHT EVENT 12

Summary

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