London & Edinburgh Investor Meetings - Microsoft...EV/hybrid heavy fleet by 2025 Our intention is to...

G E N E S I S E N E R G Y L I M I T E D

London & Edinburgh Investor Meetings

September 2018

Marc England – CHIEF EXECUTIVE

Cameron Parker – INVESTOR RELATIONS

$308$345 $335 $333

$361

FY14 FY15 FY16 FY17 FY18

0

50

100

150

200

250

300

350

400

EBITDAF

2

Genesis’ value proposition— integrated energy company delivering sustained earnings growth, with five year average dividend yield of ~7.5%

FY18 EBITDAF up 8%, average of 4% growth per annum since FY2014.

DIVIDEND CENTS PER SHARE & YIELD

13.0

16.0 16.4 16.6 16.9

7.2%

9.2%7.7%

6.8% 6.9%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0


Dividends (CPS) Net Yield %2

1. Net dividend yield based on year end closing share price as at 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.

• Investor strategy: TSR target of top quartile, translating to ~14% return, focus on dividend yield plus growth

• Business strategy: FY21 target earnings of $400+ million EBITDAF

• Customer strategy: To be “customers’ first choice in energy management”

SEPTEMBER 18 UK INVESTOR MEETINGS

1

0%

2%

4%

6%

8%

10%

Jan 2014 Jul 2014 Jan 2015 Jul 2015 Jan 2016 Jul 2016 Jan 2017 Jul 2017 Jan 2018 Jul 2018

Mean 90th Percentile 75th Percentile 25th Percentile GNE

3

Genesis’ yield comparison— contextualising Genesis’ average net dividend yield of ~7.5%


NZX 50 / ASX 100 YIELD COMPARISON

FTSE 100 YIELD COMPARISON

Source: Bloomberg

Source: Bloomberg

0%

2%

4%

6%

8%

10%

Jan 2014 Jul 2014 Jan 2015 Jul 2015 Jan 2016 Jul 2016 Jan 2017 Jul 2017 Jan 2018 Jul 2018

Mean 90th Percentile 75th Percentile 25th Percentile GNE

New Zealand Market Overview

5

About New Zealand— good growth in a stable political and regulatory environment

Source: Economy Rankings 2018 (The World Bank), The Heritage Foundation 2017, Legatum Prosperity Index 2017, Energy ArchitecturePerformance Index 2017 (World Economic Forum)


Ease of doing business

st

Investor Protection

st

billion, 3% growth

GDP

Global ProsperityIndex

Providing Sustainable, Secure Energy

th

EconomicFreedom

rd nd

6

Overview of the New Zealand energy market— deregulated unsubsidised market with an established operating system

1 state owned national transmission grid operator1 privately owned gas transmission network

5 major electricity generators15 producing gas fields

29 electricitylines companies

5 gas distributors

4 LPG distributors

2m electricity customers

270,000 gas customers,

220,000 LPG customers

48% residential customers

Retail 39% small, medium enterprises

13% commercial & industrial customers


SUPPLY DEMAND

New Zealand electricity market— >80% renewable, with positive signs of future demand growth and electrification

9,963MWinstalled capacity

>80%renewable

6 - 8 weekshydro storage

~ 1-2% pa1

Forecast demand growth

30+electricity retailers

2%EV percentage

of light fleet

63% North Island

based

44%South Island

based

NZ$75/MWhLRMC for new

generation

12% Tiwai but risks

reduced

7

8%trader

switching

Source: MBIESource: MBIE

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Wind Geothermal Thermal Hydro

GENERATION MIX %

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

GWh

Residential Commercial Industrial Agriculture

ELECTRICITY DEMAND


1. Transpower NZ (https://www.transpower.co.nz/resources/te-mauri-hiko-energy-futures) & New Zealand’s Productivity Commission https://www.productivity.govt.nz/) long-term outlook.

https://www.transpower.co.nz/resources/te-mauri-hiko-energy-futures

https://www.productivity.govt.nz/

New Zealand gas market— over-supply in short term, declining reserves with no new exploration permits to be issued

DEMAND

GAS DEMAND

>270,000gas consumers, restricted to NI

10gas retailers

9% trader switching

30%Methanex

-2.0%10 year demand

growth1

SUPPLY

1,917 PJ2P reserves

15 producing

fields

GAS PRODUCTION BY FIELD

192PJproduction in

2016

2 wells drilled in 2016 compared to peak of 52 in

2011

Source: MBIESource: MBIE

1. Excluding non-energy use and petrochemical (Methanex)

8

-

50

100

150

200

250

300

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

PJ

Pohokura Maui Mangahewa Kupe Kapuni Turangi Others

-

20

40

60

80

100

120

140

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

PJ

Electricity Generation Cogeneration Agriculture

Industrial Commercial Residential


9

New Zealand LPG market— likely to move to net import in early 2020’s, currently demand growing at 6% pa

DEMAND

LPG DEMAND

>220,000LPG consumers

4LPG retailers

>6%5 year growth in key 45kg

and bulk markets

SUPPLY

1,416 ktreserves, dominated

by Kupe

6 producing

fields

LPG GROSS REMAINING 2P

169 ktproduction in

2017

0

500

1,000

1,500

2,000

2,500

3,000

2014 2015 2016 2017

Maui Mangahewa Waihapa/Ngaere Others Kupe

9.5

7

5.7

8.4

0

2

4

6

8

10

2P R/P (RHS)

kt Years

Source: MBIE Source: LPGA

>50%South Island

020406080

100120140160180200

Dec

-09

Jun

-10

Dec

-10

Jun

-11

Dec

-11

Jun

-12

Dec

-12

Jun

-13

Dec

-13

Jun

-14

Dec

-14

Jun

-15

Dec

-15

Jun

-16

Dec

-16

Jun

-17

Dec

-17Ro

llin

g A

nn

ual

Vo

lum

e (k

t)

Auto Market 9 KG Market 45 kg Market Forklift Market Bulk Market


New Zealand distributed energy market— solar installations are slow, but EV take-up is accelerating

Hydro

BatterySolar

0

10

20

30

40

50

60

70

2013 2014 2014 2015 2015 2016 2016 2017

SOLAR – INSTALLED CAPACITY (MW)

Industrial Commercial Small Medium Enterprises Residential

$0.00 $0.05 $0.10 $0.15 $0.20 $0.25

2022

2017

UNSUBSIDISED SOLAR STORAGE LCOE1 - (US$/kWh)

Solar LCOE Storage LCOE

Source: Deutsche Bank Estimates

Source: Electricity Authority

1. Levelised cost of solar energy

• Whilst grid parity has been achieved, solar penetration remains low as economics remain poor relative to buying off grid from an already highly renewable market

• EV take up accelerating, likely to be a key driver of energy demand growth longer term

Grid cost of electricity

10SEPTEMBER 18 UK INVESTOR MEETINGS

Hydro

BatterySolarElectric Vehicles

Regulatory environment— fully deregulated market has promoted efficiency and competition

“A world leading example of a well-functioning electricity market, which continues to work effectively” International Energy Agency

• Energy policy set by Government

‒ New government focused on climate change with a Zero Carbon Act to be introduced and an independent Climate Commission established to look at transitioning to zero emissions by 2050 including review of Emissions Trading Scheme

‒ Retail electricity price review underway, 1st report issued 11th September 2018, focusing on consumer affordability. Broadly, market perceived as functioning well.

‒ New oil & gas exploration permit ban

• Electricity and gas authorities provide regulatory oversight in conjunction with the Commerce Commission

• Local Governments also play a role in issues such as water quality and resource rights

Po

rtu

gal

Ger

man

y

Po

lan

d

Turk

ey

Ital

y

Slo

vak

Rep

ub

lic

Den

mar

k

Gre

ece

Cze

ch R

epu

blic

Irel

and

Hu

nga

ry

Slo

ven

ia

Ch

ile

Jap

an

Bel

giu

m

Au

stri

a

Esto

nia

Net

her

lan

ds

Un

ited

Kin

gdo

m

Fran

ce

Au

stra

lia

New

Zea

lan

d

Luxe

mb

ou

rg

Fin

lan

d

Swed

en

Swit

zerl

and

Isra

el

Mex

ico

Ko

rea

Un

ited

Sta

tes

Can

ada

No

rway

0

50

100

150

200

250

300

350

400

INTERNATIONAL COMPARISON OF RESIDENTIAL ELECTRICITY COSTS

NZ is the 11th lowest out of 32 OECD countries

and is below the OECD average

US

$ p

er M

Wh

(P

PP

)

Average price across OECD

Source: Ministry of Business, Innovation and Employment (2017)


Genesis Energy Overview

About Genesis Energy— our vision is to be customers’ first choice for energy management

13

KEY INFORMATION

Revenue (FY18): NZ$2.3 billion

EBITDAF (FY18): NZ$361 million

Dividend Yield (FY18): 6.9%

Share Price: NZ$2.50

Market Capitalisation: NZ$2.5 billion

Enterprise Value (FY18): NZ$3.7 billion

Average Daily Turnover: 610,000 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.

,


14FY1714

14


FY18 Results at a glance

EBITDAF

FY17 $333m

m

$

m

$

due to generation revaluations FY17 $119m

$

Operating cashflowFY17 $249m

FY18 total dividend

FY17 16.6c Imputation 80%

cps

billing platform servicing EOL & Genesis brands. 100,000+ EOL customers successfully migrated.

Kupe gas production

PJ

Record

m integrated operations centre delivering operational efficiencies, digital interactions up 46%.

integrated LPG distribution platform. Genesis now servicing around 60,000 LPG customers.

Energy IQ launched with over 100,000 unique users engaged

Brand revitalised

“With You, For you”

New Zealand’s 2018 # 1 energy utility (Colmar Brunton & Reptrak)

GWhsupports volatile market

,

Up5%

Up11%

Total generation

NPAT

Our VISION is to be customers’ first choice for energy management

Excellence in execution on foundational investment

Up8%

Down83%

Up2%

Up33%



Caring for our environment

Emissions

Water and Wildlife

2019 on – Reduce and offset our non-generation carbon emissions

2020 - 100% EV / hybrid light fleet by 2020, 50% EV/hybrid heavy fleet by 2025

Our intention is to phase out coal completely by 2030 (and to use only in abnormal market conditions after 2025)

Our ambitions include

Building strong communities

Our Communities

Our People

Living wage in place by 2020

Mobilise Genesis people to volunteer: 2019 onwards

School-gen website used by over 50% of NZ schools by 2020


Putting control in our customers’ hands

Delivering New Zealand’senergy future

40% of customers using information and insight via our digital tools to make active choices about their day-to-day energy use by 2025

At least 2 new sustainable products for customers by 2020


Genesis Sustainability Framework launched FY19

Powering New Zealand

https://www.genesisenergy.co.nz/sustainability

200,000 customers actively providing more information about their homes to access advanced energy services by 2021

Company Strategy

Strategy: We are Performing while Transforming

18

— an update to be provided at Genesis’ Investor Day 7th November 2018

Our VISION is to reimagine energy to be customers’ first choice for energy management

Our PURPOSE is to put control in our customers’ hands

PERFORMING: Operational proficiency and efficiency today

TRANSFORMING: Innovation for long-term value creation and success

Increase # of customers using energy management tools and

increase digital interactions

Grow our earnings and deliver top quartile shareholder returns

Be #1 or #2 in every product market

Energise our people and improve engagement

Keep our people healthy and safe

Maximise the value of our assets, products and businesses

Embrace diversity of thought

Employees are engaged advocates for our brands and products

Move toward a lower carbon future

Be New Zealand’s most loved brand

Our STRATEGY is to use our integration to fuel innovation

Generation, fuels & wholesale

• Our integrated fuel position minimises costs for us and our customers. • Our generation mix gives us flexibility to maximise value in the energy markets.• We are leading the way to transition the NZ energy sector successfully to a more

renewable future.

Customer & energy management

• We offer a full three fuel (electricity, gas and LPG) solution for our customers.• We aim to differentiate our products with seamless service, useful insights and digital tools.• Our ambition is to change how consumers engage with their energy.


19

Outlook and guidance— guidance for FY19 EBITDAF is $350 to $370 million

• FY19 EBITDAF guidance range is $350 to $370 million subject to hydrological conditions, any material events, one-off expenses or other unforeseeable circumstances. Key assumptions include:

• $10 million negative impact from Huntly Unit 5 mid-life inspection

• Return to normal hydrology

• Increase in emissions costs through higher carbon prices (average of $6/tCO2 achieved FY18) and change to ETS1

• Growth in Customer segment

• FY19 capital expenditure guidance of up to $85 million. Key assumptions include:• $11 million for Huntly Unit 5 mid-life inspection excluding plant parts included in Long-term Maintenance Agreement

• Replacement of turbine runners at Tekapo, Unit 1 Rankine cold survey

• Ongoing investment for LPG business expansion

• $10 million Kupe BAU investment plus development studies for inlet compressor and subsurface studies for wells. If the Kupe JV commits to proceeding with the inlet compressor project further capital of up to $30 million is expected over the period FY20 to FY212

• FY20 EBITDAF to be impacted by planned Kupe 25-30 day outage and increased emissions costs

• FY21 target remains to deliver $400+ million EBITDAF

1. Reflects change to the Emissions Trading Scheme to move to a one-for-one unit obligation from 1 January 20192. FY19 development studies incorporates (Front End Engineering Design) FEED to the value of $3 to $4 million. Kupe capex guidance estimates are Genesis Energy’s assessment of an incomplete

proposal. No development study (incorporating FEED) has been completed for the inlet compressor project and the joint venture has not agreed a settled estimate of the timing or cost. No capital estimate beyond FY19 is provided for additional wells as part of phase two expansion.


FY17 EBITDAF Operationalexcellence

Residentialvalue share

Businesscategorygrowth

Grow LPGcategory

Energyservices

Kupe Core growth OriginalFY21 EBITDAF

target

Nova Energyretail LPGbusiness

Revised FY21EBITDAF

target

$333m

$5m -$8m

$9m -$14m$5m -$8m

$6m -$10m $2m -$3m

$13m -$17m$12m -$17m

$15m -$20m

$385m -$410m

$400m -$430m

FY17 $15m delivered

20

NOTES1. Several initiatives are interdependent. As an example, energy services capability will contribute towards residential value share2. All ranges are net of operational investment required to achieve target outcomes3. 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

4

3

FY21 target EBITDAF— target to deliver $400 - $430 million by FY21 and top quartile TSR, as set out in FY17 and will be updated for

our November Investor Day, rebased from FY18 actuals


21

Generation flexibility— flexible assets and fuels portfolio delivers value in volatile hydro conditions

NEW ZEALAND HYDRO CONDITIONS

RANKINE UNIT DEMAND (MONTHLY GWh)

0

50

100

150

200

250

300

350

400

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-1

7

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

GW

h

Genesis Retail & Huntly Outage Support Other Retailers / Spot Customers Swaptions

0.5

0.7

0.9

1.1

1.3

1.5

Nat

ion

al S

tora

ge a

s %

of

Ave

rage

FY18

Normal Storage Band National Storage as % of Average

3 fuels An integrated portfolio

means flexibility and security

7,105 GWh Generation up 11% to

support volatile market

88 % of Rankine demand coming from market

GENERATION BY FUEL TYPE (GWh)

0

1,000

2,000

3,000

4,000

5,000

FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Coal Gas Renewable

‘normal’ conditions only 1/3rd of year

$92 MWh ↑ 51%

Average price received for generation (GWAP)


-250

-150

-50

50

150

250

2013 2014 2015 2016 2017

Sup

ply

/ D

eman

d (

kt)

Demand ExportSupply ImportLinear (Supply Decline) Linear (Demand Increase)

22

Value through integration— integrated Kupe position driving value through Wholesale flexibility and LPG Customer growth potential

MASS MARKET LPG CUSTOMERS & CHURNGENESIS CUSTOMER LPG DEMAND

KUPE PRODUCTION (GENESIS SHARE, PJe) NEW ZEALAND LPG SUPPLY/DEMAND (BY CALENDAR YEAR)

0

2

4

6

8

10

12

14

16

18


PJe

Gas Oil LPG

0%

5%

10%

15%

20%

25%

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

Dec

-17

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Mo

nth

ly C

hu

rn

LPG

Cu

sto

mer

Nu

mer

s

LPG Dual Fuel LPG Only

Post-migration LPG Only Churn Post-migration LPG Dual Fuel Churn

SOURCE: LPGA

Residential

Commercial

Bulk

0

5

10

15

20

25

30

35

40

45

50


Tho

usa

nd

to

nn

es (

kt)

KupeSupply

*-5% pa

*+6% pa

* Average annual supply/demand decline/increase since 2014


15%

17%

19%

21%

23%

25%

27%

Jan

-17

Feb

-17

Mar

-17

Ap

r-1

7

May

-17

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

Dec

-17

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Genesis Market (excl Genesis)

-5%0%5%

10%15%20%25%30%35%40%

Jun

-17

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

De

c-1

7

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

NPS - Genesis 3 Month Rolling Promoter - Genesis 3 Month Rolling

23

Brand performance— a focus on brand and loyalty initiatives is shifting perceptions and reducing churn versus market

RESIDENTIAL ELECTRICITY CHURN (EXCL EOL, ROLLING 3 MONTH)

GENESIS NPS AND PROMOTER SCORE

+10 ppt

+5 ppt

CORPORATE REPUTATION RANKINGS

2017 2018Genesis vs

Competitors

20th 13th 1st

13th 5th 1st

New Zealand’s 2018 # 1 ranked energy utility

2.6 ppt2.1 ppt

BRAND METRIC

SOURCE: Campaign Tracking, The Purpose Business

Genesis May 17

Genesis May 18

Genesis vs Competitors

First to market with new technology 14% 29% +14 ppt

Puts people in control of their energy use 15% 23% +11 ppt

Market leader 21% 33% +15 ppt

Knows you and understands what you need

60% 67% +8 ppt


24

Product innovation— providing knowledge and insight to customers to help them manage their bills

DAILY ENERGY IQ USERS / NEW USERS SINCE LAUNCH (MAY 2018)

DUAL FUEL CUSTOMER GROWTH (UP 5%) AND CHURN (ROLLING 3 MONTH)

↑30 % on pcp

Customers linked to Fly Buys, >150,000

> 100,000 Total unique users for My Account/Energy IQ

> 280,000 Power Shouts

redeemed1

0%

5%

10%

15%

20%

25%

30%

Churn at July17 12 Mth Avg Customer Churn Churn at June 18

Fly Buys Customer Churn Non Fly Buys Customer Churn

FLYBUY CHURN IMPACT (EXCL EOL)

“Hi. Your app is the best - it helps me to keep my power bill down as I now know exactly which appliances

use the most electricity. “

0%

5%

10%

15%

20%

25%

30%

102,000

104,000

106,000

108,000

110,000

112,000

Jul-

17

Au

g-1

7

Sep

-17

Oct

-17

No

v-1

7

Dec

-17

Jan

-18

Feb

-18

Mar

-18

Ap

r-1

8

May

-18

Jun

-18

Dual Fuel Customers (LHS) Single Fuel Churn Multi-fuel Churn

1. Power Shouts redeemed from March to August 2018

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

0

5,000

10,000

15,000

20,000

25,000 Daily Unique IQ Users (LHS) New Energy IQ Users (RHS)

System migration/outage


FY18 Financial Performance

333

119

74

284249

182

47

166

1,212

361

20

58

305331

184

80

170

1,183

EBITDAF NPAT Underlying Earnings Operating Costs Operating Cashflow Free Cash Flow Capital Expenditure Dividend Net Debt

$ MILLIONS FY17 FY18

12

— EBITDAF up 8%, investment in operating and capital expenditure up, free cash flow up 1%, net debt down $29m

FINANCIAL HIGHLIGHTS

26

FY18 financial highlights

+ 8% - 83% - 22% + 7% + 71%+ 1% + 2% - 2%

1. Net Debt is shown on a separate scale to other financial comparisons2. Impacted by $100.3m non-cash fair value asset adjustments on Huntly Rankine units, FY18 $48.8m decrease against a FY17 $51.5m gain.

+ 33%


FY18 vs FY17 EBITDAF

$ MILLIONS

27

— EBITDAF growth of 8% driven by record Kupe gas production, strong thermal generation and acquisitions

FY18 EBITDAF waterfall

333

364 361

13

5

32

2 12

FY17 EBITDAF Acquisitions FY18 BaselineEBITDAF

Customer Wholesale Kupe Corporate FY18 EBITDAF

Favourable Unfavourable


172198 186 182 184


$ MILLIONS

OPERATING CASH FLOW

304 319 325

249

331


$ MILLIONS

FREE CASH FLOW1

28

Cash flow— operating cash flow up 33% and free cash flow up $2m

Higher operating cash flow reflects growth in EBITDAF, and timing differences in

working capital.

Free cash flow has increased $2m on FY17, reflecting higher EBITDAF offset by higher

interest expense and stay in business capital

1. Free cash flow represents EBITDAF less tax paid, net interest and stay in business capital expenditure. This is a change in methodology from FY17 with tax paid replacing an adjusted tax calculation. All historical information has been restated to the new measure.SEPTEMBER 18 UK INVESTOR MEETINGS

29

Capital expenditure— increase reflects a year of investment in integration of LPG operations and platform investment in Customer

Growth capex coupled with stay in business requirements

CAPITAL EXPENDITURE1

• Stay in business capex (SIB) includes ($51m, FY18 guidance issued was $50-60m):

₋ Tekapo G3 refurbishment, EOL billing migration, Tuai generator refurbishments, Tokaanu U4 turbine maintenance, Rangipo fire protection upgrade, and other generation asset useful life extensions and Kupe

• Other capex includes ($26m):₋ LPG integration costs, the Local Energy Project,

Technology and Digital development projects; and₋ Early exit of third party LPG distribution contract

related capex i.e. trucks, cylinders and depots

• Corporate capex includes the fit-out for the new Kenehiregional operations office in Hamilton, $3.6m, where 60% of Genesis’ staff work.

1. Capital expenditure excludes M&A activities.


Wholesale Customer LPG Operations

Kupe Technology & Digital Corporate

$ MILLIONS

82

44 4047

80


NET DEBT AND NET DEBT/EBITDAF RATIO1

966905

833

1,212 1,183

2.9 2.5 2.6

3.3

3.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0

200

400

600

800

1000

1200


Net debt Net debt/EBITDAF Target debt ratio band (2.4 to 3.0)

30

Capital structure— net debt has reduced by $29m, debt/EBITDAF down 0.3 to 3.0

Net debt to EBITDAF metric improving, average debt tenor at 11.4 years

• S&P reaffirmed BBB+ credit rating post acquisitions in January 2018

• Dividend reinvestment plan (DRP) announced at HY18. A 23% uptake delivered $19m of new capital

• $240m of Capital Bonds maturing in FY 2049 were issued on 16 July 2018 at a favourable coupon rate of 4.65%. $200m of existing Capital Bonds with a coupon rate of 6.19% were redeemed at the same time.

• Continuation of DRP and increased Capital Bond issuance demonstrates commitment to maintain BBB+ credit rating

1. Standard and Poor’s make a number of adjustments to Net Debt and EBITDAF for the purpose of calculating credit metrics. The most significant of these is the 50% equity treatment attributed to the Capital Bonds.


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