ASCENDANT GROUP LIMITED
Annual General Meeting 18 May 2018
ASCENDANT GROUP LIMITED Annual General Meeting 18 May 2018 FORWARD - - PowerPoint PPT Presentation
ASCENDANT GROUP LIMITED Annual General Meeting 18 May 2018 FORWARD LOOKING INFORMATION This document contains forward-looking statements that reflect managements current beliefs with respect to Ascendant Group Limiteds (Ascendant)
Annual General Meeting 18 May 2018
This document contains forward-looking statements that reflect management’s current beliefs with respect to Ascendant Group Limited’s (“Ascendant”) future growth, results of operations, performance, business prospects and opportunities. All such information and statements are made pursuant to safe harbor provisions contained in applicable securities legislation. Statements that are not historical facts, including statements about management’s beliefs and expectations, are forward- looking statements. The words “anticipates”, “believes”, “could”, “estimates”, “expects”, “intends”, “may”, “plans”, “projects”, “schedule”, “should”, “budget"," forecast”, “might”, “will”, “would”, “targets” and similar expressions are often intended to identify forward-looking information, although not all forward-looking information contains these identifying words. These statements are based on information currently available to Ascendant’s management and should not be read as guarantees of future events, performance or results, and will not necessarily be accurate indications of whether, or the time at which, such events, performance or results will be achieved. The forward-looking information is based on reasonable assumptions and is subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. Factors that could cause results or events to differ from current expectations are discussed in the “Primary Factors Affecting Ascendant’s Business” section of our Management’s Discussion and Analysis as at April 20, 2018 and may also include: capital market and liquidity risk; estimated energy consumption rates; maintenance of adequate insurance coverage; changes in customer energy usage patterns; developments in technology that could reduce demand for electricity; interest rate risk; credit risk; foreign exchange risk; risks associated with pension plan performance and funding requirements; loss of service area; risk of failure of information technology infrastructure and cybersecurity risks; and availability of labour and management resources. Readers are cautioned not to place undue reliance on forward-looking information as actual results could differ materially from the plans, expectations, estimates or intentions and statements expressed in the forward-looking information. All forward-looking information in this document is qualified in its entirety by the above cautionary statements and, except as required by law, Ascendant undertakes no obligation to revise or update any forward-looking information as a result of new information, future events or otherwise. Unless otherwise specified, all financial information referenced is in US dollars. Nothing in this document should be construed as an offer or sale of securities of Ascendant or any other person.
2
3
Electric Vehicles Power Generation Transmission, Distribution and Retail Energy Services
(25%) (5%) 15% 35% 55% 75% 95% 115% 135% 155% Jan 2016 Apr 2016 Jul 2016 Oct 2016 Jan 2017 Apr 2017 Jul 2017 Oct 2017 Jan 2018 Apr 2018 AGL S&P/TSX Capped Utility Index
5
CEO transition Licences granted
2 Year Total Shareholder Return
Replacement generation approved Electricity Act 2016 Electricity regulation transfers to Regulatory Authority Energy Commission directive setting rate methodology Replacement generation proposal submitted IRP submitted New strategy adopted Dividend increased 50%
Source: FactSet, Bloomberg.
(2017 vs. 2016)
(2017 vs. 2016)
(2017 vs. 2016)
(March 2018)
(2017 vs. 2016)
6
7
$1.32 Unregulated businesses $0.28 Reduction in corporate expenses $0.20 Other $0.10 $1.90
2016 2017
Core Earnings Per Share
Capital spending Increase in cash Dividend / Share repurchase Debt repayment
2016 FFO 2017 FFO
Cash Flow Per Share
$4.28 $3.14
8
$24.3
Fuel and purchased power Inventory Obsolescence Fuel adjustment revenue Tariff stabilisation fund Other
$23.3
2016 2017
BELCO Core Earnings ($ millions) $0.5
AIRCARE IFM Other
$3.3
2016 2017
AGH Core Earnings ($ millions)
9
297 250 2016 2017
Customer outages in minutes1
90% 85% 2016 2017
Plant Availability Sales (kWh)
2.66 2.19 3.29
2016 2017 CARILEC benchmark
Injury frequency rate2
1 System average interruption duration index 2 Lost time injury frequency rate
400 450 500 550 600 650 700 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
(in millions)
Strategic Priorities
11
Strategic Pillars Engaged passionate people Operational excellence Superior customer experience
progressive energy and services organisation in the Atlantic
services to enhance their lives Reduced Customer Rates Increased Shareholder Value
Outcomes
Execute $250M capital plan Achieve competitive valuation Achieve productive regulatory compact Grow non-regulated business Improve cost and efficiency
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Execute $250M capital plan Achieve competitive valuation Achieve productive regulatory compact
Strategic Priorities
Grow non-regulated business
2018 2019 2020 2021 2022
Improve cost and efficiency
methodology in place
efficiencies to bring rates in line with peers
exchange
credit rating
markets
resolution by year-end.
13
TD&R IPPs Distributed generation End-user
Vertically integrated utility PPA PPA + net benefit test Feed-in tariffs
Proposed regulatory structure Generation
14
$- $100 $200 $300 $400 $500 $600 2017 2018 2019 2020 2021 2022
$ Millions
Capital Profile
Other fixed assets Grid rate base Generation rate base Debt Rate Base
15
North Power Station & Battery Storage
16
Engineering and civil works
Equipment delivery
Construction Commissioning
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019
North Power Station & Battery Storage
17
Belmont to Lighthouse
Prospect to Flatts
Lighthouse to NOB Flatts to Mullet Bay
2018 2019 2020 2021
18
Fuel $55.9 Fuel Tax $29.2 Other $11.4 D&A $25.0 Labour $51.1 Supplies and other O&M $40.1
2017 Operating Costs ($ Millions) Controllable Non- controllable
19
0.0 x 0.5 x 1.0 x 1.5 x 2.0 x 2.5 x 3.0 x 3.5 x 4.0 x 4.5 x
Debt to EBITDA
2017 2022e Industry benchmark 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%
Debt / Equity
2017 2022e Industry benchmark
20
$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00
Core EPS
2016 2017 2022e $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00
FFO/sh
2016 2017 2022e
21
Balanced skill-set across diverse range of industries Extensive public company experience Mix of local and global experience
Management Team with combined industry experience of more than 100 years Extensive experience with well- known global public companies Mix of local and global experience
0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 14.0x AGL Island utility average (1) US Small Cap average (2) Canadian utility average (3) 0.0x 0.2x 0.4x 0.6x 0.8x 1.0x 1.2x 1.4x 1.6x 1.8x 2.0x AGL Island utility average (1) US Small Cap average (2) Canadian utility average (3)
22
TEV / EBITDA (trailing 12 mths)
________________________ Source: FactSet as of April 24, 2018. (1) Includes Caribbean Utilities, Hawaiian Electric (2) Includes Portland General Electric, ALLETE, El Paso Electric, Ottertail Corporation (3) Includes ATCO, Fortis, HydroOne, Algonquin, Emera, AltaGas
Price / Book Value
23
value in 24 to 36 months
regulatory compact
growth over next five years
contracts