AusNet Services Full Year 2020 Results Release and Presentation - - PDF document
12 May 2020 AusNet Services Full Year 2020 Results Release and Presentation Enclosed is an announcement made by AusNet Services which is provided for the information of AusNet Services Holdings Pty Ltd noteholders. Paul Lynch Company Secretary
12 May 2020
AusNet Services Full Year 2020 Results Release and Presentation
Enclosed is an announcement made by AusNet Services which is provided for the information of AusNet Services Holdings Pty Ltd noteholders. Paul Lynch Company Secretary Investor Relations Enquiries John Nicolopoulos Head of Tax & Investor Relations +61 3 9695 6301 or +61 409 672 912 Media Enquiries + 61 3 9483 0989
12 May 2020
AusNet Services Full Year 2020 Results Release and Presentation
The following documents are attached: 1. AusNet Services Full Year 2020 Results Release 2. Investor Presentation Paul Lynch Company Secretary This announcement was authorised for release by the Board of AusNet Services Ltd. Investor Relations Enquiries John Nicolopoulos Head of Tax & Investor Relations +61 3 9695 6301 or +61 409 672 912 Media Enquiries + 61 3 9483 0989
12 May 2020
AusNet Services Full Year 2020 Results
AusNet Services reported its full year results for the period ended 31 March 2020 (FY2020), delivering improved financial performance against a challenging operating environment. The Board declared a dividend of 5.1cps, taking the full year dividend to 10.20cps (FY2019 dividend of 9.72cps), franked to 50% (FY2019 42.5%). Financial performance was driven by increased underlying revenues in line with regulatory determinations as well as transmission excluded project revenues and customer contributions. Despite an overall increase in expenses, underlying operating expenditures declined through the ongoing delivery of efficiency initiatives. Cash flow from operations was impacted by higher income tax paid due to higher immediately deductible capital expenditure in the previous period. Cash flow from operations continues to underpin our ability to fund capital investment and provide dividends to shareholders. Tony Narvaez, Managing Director of AusNet Services said, “Recently, we have seen the unprecedented events of the global COVID-19 pandemic unfold in Australia. AusNet Services' number one priority remains the safety and wellbeing of our people, customers, and the community. We understand this is a challenging time for our customers and maintain a strong commitment to delivering energy reliably and safely, which is of critical importance during this period.” A$M FY 2020 FY 2019 Variance Revenues 1,977.6 1,861.5 ↑6.2% EBITDA 1,196.6 1,134.2 ↑5.5% Earnings before interest and tax 732.1 677.8 ↑8.0% Profit before income tax 415.4 371.9 ↑11.7% Net profit after tax 290.7 253.9 ↑14.5% Cash flow from operations 720.6 813.7 ↓11.4% Dividend (cps) 10.20 9.72 ↑ 4.9% Franking 50% 42.5% ↑ 7.5%
2
Operating & Financial Review
Our overall financial performance improved in FY2020, with increases in all key measures except cash flow from operations, which was impacted by several non-recurring items. The improvement was particularly pleasing as it was achieved despite a range of challenges in the external operating environment, including extreme bushfire and weather events and ongoing uncertainties and changes in the energy landscape. While the improved results were primarily driven by higher regulated revenues and customer contributions, there were also business driven initiatives that will enhance financial performance on an enduring basis:
arrangements with key suppliers, as well as using technology to improve efficiencies of both
renewable generators, which have supported revenue growth. A range of unusual or non-recurring events also affected the financial result for FY2020. These include:
recognised increased our customer contributions revenue by $19.1 million.
and recovery operational costs, and the implementation of our efficiency and transformation programs resulted in an additional $6.4 million in one-off costs compared to the previous year. Other unusual events affected both revenue and expenses equally (or broadly equally):
easement tax in our regulated prices.
through future regulated prices.
and our operating expenses by $8.3 million, with no material impact on net profit. After adjusting for these items, our regulated businesses delivered a $17.5 million reduction in operating expenses, primarily due to the continued cost efficiency focus. This reduction, together with higher incentive revenues, regulated price increases, higher gifted assets, and growth in our unregulated infrastructure business enabled us to improve our net profit after tax by 14.5 per cent. Cash flow from operations fell by 11.4 per cent to $720.6 million. This was primarily due to non-recurring cash payments, including $35.8 million for tax paid related to prior years, and $11.4 million to Downer as part of the transfer of electricity distribution works program. In addition, the bushfire response and higher TUOS expenditure impacted cash flows. Despite the decline in cash flow from operations, our performance on this measure was still strong enough to support the payment of dividends that were within our targeted dividend parameters and 5 per cent higher than last year.
3
Strategic Focus & Outlook
Looking forward, our immediate focus through the COVID-19 pandemic is to support our customers and ensure we can continue to provide essential electricity and gas network services. The pandemic will have an impact on our financial performance in FY2021. The extent of this impact will depend on a range of factors, including macroeconomic and financial market conditions, impacts on
the pandemic, and the impact of current and any future government or regulatory interventions. AusNet Services is well placed to navigate this period of uncertainty. Our revenues are predominantly set on a revenue cap basis or under long term fixed price contracts. We have a strong liquidity position
range of funding sources and stable `A’ range credit ratings from Standard & Poor's and Moody's. In response to the general uncertainty caused by COVID-19 and other factors more specific to AusNet Services (including the development timeframes for various projects and the potential impact of regulatory resets in future years), we are implementing a range of proactive measures, including the advancement of cost management initiatives and reprioritising capital expenditure plans as necessary. Also, AusNet Services is actively considering additional capital management initiatives to further support
securities, additional debt and/or other funding initiatives in the near to medium term. Taking into account the above factors:
9.5 cps, franked at 40%. This guidance is based on our current best estimate of financial impacts from customer support measures and having regard to the current environment, our investment pipeline and expected lower regulated revenues from our upcoming regulatory resets;
performance and having regard to operating cashflows after servicing interest, tax, maintenance capex and a portion of growth capex;
FY2024 (at appropriate risk-adjusted rates of return); and
AusNet Services is monitoring the changing economic and operating landscape and will keep the market updated in the event of any material changes.
4
Dividend Key Dates
The FY2020 final dividend of 5.1 Australian cps is 50% franked. The Dividend Reinvestment Plan (DRP) will be in operation for the FY2020 final dividend at 2% discount to the average trading price. The average trading price will be the average of the volume weighted average price of shares sold in ordinary market transactions on the ASX between 25 May 2020 and 5 June 2020 (inclusive). For further information please refer to the DRP rules at www.ausnetservices.com.au. Relevant dates: 20 May 2020 Ex-date for final dividend 21 May 2020 Record date to identify shareholders entitled to the final dividend 22 May 2020 Last election date for participation in the DRP 25 June 2020 Payment of final dividend
About AusNet Services
AusNet Services is the largest diversified energy network business in Victoria, owning and operating
networks - electricity distribution, gas distribution and the state-wide electricity transmission network. The company also has an unregulated business called Mondo, focusing on contracted infrastructure and energy services. Headquartered in Melbourne, Australia, AusNet Services employs around 1,700 people to service around 1.5 million consumers. For more information visit AusNet Services’ website, www.ausnetservices.com.au. Paul Lynch Company Secretary This announcement was authorised for release by the Board of AusNet Services Ltd. Investor Relations Enquiries John Nicolopoulos Head of Tax & Investor Relations +61 3 9695 6301 or +61 409 672 912 Media Enquiries + 61 3 9483 0989
F
T he AusNe t Se rvic e s Gro up (AusNe t Se rvic e s) c o mprise s AusNe t Se rvic e s L td a nd its sub sidia rie s. T he info rma tio n in this pre se nta tio n is no t a pro spe c tus, pro duc t disc lo sure sta te me nt o r o the r o ffe ring do c ume nt a nd do e s no t c o nstitute a n o ffe r, invita tio n o r re c o mme nda tio n to sub sc rib e fo r, re ta in o r purc ha se a ny se c uritie s in AusNe t Se rvic e s. T he info rma tio n is a n o ve rvie w (in summa ry fo rm) a nd do e s no t purpo rt to b e c o mple te o r c o nta in a ll the info rma tio n ne c e ssa ry to ma ke a n inve stme nt de c isio n. T his pre se nta tio n is no t fina nc ia l pro duc t a dvic e a nd do e s no t ta ke into c o nside ra tio n the inve stme nt o b je c tive s, fina nc ia l situa tio n o r pa rtic ula r ne e ds o f a ny pa rtic ula r pe rso n. Yo u sho uld c o nside r the a ppro pria te ne ss o f the info rma tio n ha ving re g a rd to yo ur individua l o b je c tive s, fina nc ia l situa tio n (inc luding ta xa tio n po sitio n) a nd ne e ds, a nd se e k inde pe nde nt pro fe ssio na l a dvic e . T his pre se nta tio n, a nd the info rma tio n in this pre se nta tio n, will no t fo rm the b a sis o f a ny c o ntra c t o r c o mmitme nt. T his pre se nta tio n ha s b e e n pre pa re d b y AusNe t Se rvic e s o n the info rma tio n a va ila b le . T
e xpre ss o r implie d, is ma de a s to the fa irne ss, a c c ura c y, c o mple te ne ss o r c o rre c tne ss o f the info rma tio n, o pinio ns a nd c o nc lusio ns in this pre se nta tio n a nd AusNe t Se rvic e s, its dire c to rs, o ffic e rs, e mplo ye e s, a g e nts a nd a dvise rs disc la im a ll lia b ility a nd re spo nsib ility (inc luding fo r ne g lig e nc e ) fo r a ny dire c t o r indire c t lo ss o r da ma g e whic h ma y b e suffe re d b y a ny re c ipie nt thro ug h use o r re lia nc e o n a nything c o nta ine d in o r o mitte d fro m this pre se nta tio n. T his pre se nta tio n c o nta ins c e rta in “fo rwa rd-lo o king sta te me nts” a nd pro spe c tive fina nc ia l info rma tio n. T he se fo rwa rd lo o king sta te me nts a nd info rma tio n a re b a se d o n the re a so na b ly he ld b e lie fs o f AusNe t Se rvic e s ma na g e me nt a s we ll a s re a so na b le a ssumptio ns ma de b y a nd info rma tio n c urre ntly a va ila b le to AusNe t Se rvic e s ma na g e me nt, a nd a re c urre nt o nly a s o f the da te o f this pre se nta tio n. All sta te me nts o the r tha n sta te me nts o f histo ric a l fa c ts inc lude d in this pre se nta tio n, inc luding witho ut limita tio n, sta te me nts re g a rding AusNe t Se rvic e s fo re c a sts, b usine ss stra te g y, syne rg ie s, pla ns a nd o b je c tive s, a re fo rwa rd-lo o king sta te me nts. Pa st pe rfo rma nc e is a lso no t a n indic a to r o f future pe rfo rma nc e . I n a dditio n, whe n use d in this pre se nta tio n, the wo rds “g uida nc e ”, “fo re c a st”, “e stima te ”, “e xpe c t”, “a ntic ipa te d” a nd simila r e xpre ssio ns a re inte nde d to ide ntify fo rwa rd lo o king sta te me nts. Suc h sta te me nts a re sub je c t to sig nific a nt a ssumptio ns, risks a nd unc e rta intie s, ma ny o f whic h a re o utside the c o ntro l o f AusNe t Se rvic e s a nd a re no t re lia b ly pre dic ta b le , whic h c o uld c a use a c tua l re sults to diffe r ma te ria lly, in te rms o f q ua ntum a nd timing , fro m tho se de sc rib e d in this pre se nta tio n. In re c e iving this pre se nta tio n, yo u a g re e to the a b o ve re stric tio ns a nd limita tio ns. Yo u a re stro ng ly c a utio ne d no t to pla c e undue re lia nc e o n fo rwa rd-lo o king sta te me nts, pa rtic ula rly in lig ht o f the c urre nt e c o no mic c lima te a nd sig nific a nt vo la tility, unc e rta inty a nd disruptio n c a use d b y the COVID-19 pa nde mic . No n-IF RS info rma tio n
hro ug ho ut this do c ume nt so me no n-IF RS fina nc ia l info rma tio n is sta te d (o pe ra ting e xpe nse s e xc luding c e rta in ite ms a nd re g ula te d a nd c o ntra c te d a sse t b a se s). We b e lie ve the se no n-sta tuto ry me a sure s pro vide use ful info rma tio n to unde rsta nd the fina nc ia l pe rfo rma nc e o f the Gro up, b ut sho uld no t b e c o nside re d a s a n indic a tio n o f, o r sub stitutio n fo r re po rte d info rma tio n.
he no n-IF RS fina nc ia l info rma tio n ha s no t b e e n a udite d b y the Gro up’ s a udito rs. 2
ntro duc tio n
ina nc ia l Pe rfo rma nc e
ne rg y Se rvic e s
3
4
FY20 RIFR ↑ 13%.
Wo rking with de live ry pa rtne rs, re fre shing c ritic a l risk a nd a udit pro g ra m to ma inta in sa fe ty fo c us a nd a ddre ss pe rfo rma nc e
6.91 6.59 5.46 3.53 3.99 F Y16 F Y17 F Y18 F Y19 F Y20
Re c o rd a b le Injury F re q ue nc y Ra te (RIF R)
Our e xpe r ie nc e in de aling with r apid c hange and signific ant c halle nge s in the e xte r nal e nvir
Ope r a ting E nvir
D-19 pande mic
nc re ase d distrib ute d g e ne ratio n so urc e s and c hang ing c usto me rpre fe re nc e s
AusNe t Se r vic e s Re spo nse
Y19 and F Y20, impro ving ne two rk re liab ility and safe ty
D-19 pande mic . Custo me r c e ntric ity fo c use d o n pro viding b ill re lie f fo r ho use ho lds and small b usine sse s e nduring hardship and de fe rring no n-e sse ntialmainte nanc e to minimise disruptio n and o utag e s
xe c utive Manag e me nt T e am me mb e rs in F Y2020
ne rg y Co unc ilawards fo r I nno vatio n and Co mmunity E ng ag e me nt
nstalling le ading -e dg e te c hno lo g y ac ro ss o ure le c tric ity ne two rk to re duc e the risk o f po we rline -re late d b ushfire s
damag e d e le c tric ity asse ts, and re sto ring supply as q uic kly and safe ly as po ssib le
5
Re silie nt r e ve nue s
Re silie nt re ve nue s a nd lo ng -te rm fixe d pric e c o ntra c ts
Stable c r e dit r atings
A-/ Sta b le (S&P) A3/ Sta b le (Mo o dy's)
Inte r e st c ove r
1
3.3x
Ge ar ing
67% Ne t De b t/ RCAB 2
$1.5bn of L iquidity3
$768m undra wn b a nk de b t fa c ilitie s $650m c a sh & $100m sho rt te rm de po sits
De bt c ove nants
No fina nc ia l c o ve na nt re stric tio ns4
Dive r sifie d funding mix & ac c e ss to c apital mar ke ts
9 funding ma rke ts 7 c urre nc ie s (c urre nc y risk he dg e d)
We ighte d ave r age de bt matur ity
6.8 ye a rs
6
No te s: 1. Ca lc ula te d a s E BIT DA (inc luding le a se inc o me ) le ss c usto me r c o ntrib utio ns a nd ta x pa id, divide d b y ne t inte re st e xpe nse . T his is ho w inte re st c o ve r is me a sure d fo r inte rna l ma na g e me nt purpo se s, a s it pro vide s a n a c c ura te re fle c tio n o f ho w a fte r-ta x o pe ra ting c a sh flo ws a re use d to me e t inte re st pa yme nts. Inc lude s full a mo unt o f $A706m in Hyb rids, de spite re c e iving 50% e q uity c re dit 2. De b t a t fa c e va lue le ss c a sh divide d b y Re g ula te d / Co ntra c te d Asse t Ba se . De mo nstra te s ho w AusNe t Se rvic e s funds its c a pe x in te rms o f de b t vs. inc o me g e ne ra ting a sse ts. Inc lude s full a mo unt o f $A706m in Hyb rids, de spite re c e iving 50% e q uity c re dit 3. As a t 11 Ma y 2020 4. As a t 11 Ma y 2020. No fina nc ia l c o ve na nt re stric tio ns re la ting to inte re st c o ve r o r g e a ring
Ac tive ly e xplo r ing c apital manage me nt initiative s to fund signific ant gr
the r suppo r t c r e dit pr
his may inc lude a pr
ata e ntitle me nt o ffe r o f o r dinar y shar e s (within e xisting shar e ho lde r appr
ame te r s), the issuanc e
id c apital se c ur itie s and/ o r o the r funding initiative s in the ne arto me dium te r m
7
Co mmunity
a st tra c ke d g ua ra nte e d se rvic e le ve l pa yme nts a nd wa ive d ne two rk c ha rg e s to c usto me rs impa c te d fo r mo re tha n se ve n c o nse c utive da ys due to b ushfire s
ne rg y Co unc il Awa rds fo r c o mmunity e ng a g e me nt & inno va tio n
Gro wth
Y20 divide nd up 5% (50% fra nke d)
ra nsmissio n Ne two rk Pro je c t
I nno va tio n
DPR 2022-26 pro po sa l
iDAR ima g e ry to b uild a 3D ne two rk ma p fo r a sse t inspe c tio n a nd ve g e ta tio n ma na g e me nt in b ushfire risk a re a s
E ffic ie nc y
re so urc e a llo c a tio n
8
9
nc re a se s in pa ss-thro ug h ite ms, e a se me nt ta x (↑$34m) a nd T UOS (↑$15m)
to e xpa nsio n o f e le c tric ity distrib utio n
c o ntra c t with Do wne r E DI (Do wne r)
(F Y19 42.5% fra nke d)
A$M F Y 2020 F Y 2019 Var ianc e Statutor y Re sult
Re ve nue s
1,977.6
1,861.5
↑6.2%
E BIT DA
1,196.6
1,134.2
↑5.5%
E BIT
732.1
677.8
↑8.0%
PBT
415.4
371.9
↑11.7%
NPAT
290.7
253.9
↑14.5%
Ca sh flo w fro m o pe ra tio ns
720.6
813.7
↓11.4%
Divid e nd s (c ps)
10.20
9.72
↑4.9%
Re ve nue inc re a se re fle c ts ne t e ffe c t o f
10
No te : Cha rt e xc lude s e a se me nt ta x (F Y19: $136m, F Y20: $171m) whic h is a pa ss-thro ug h. Also e xc lude s $13m sa le o f inve nto ry to Do wne r a t b o o k va lue . * Inc lude d a s ‘ re turn o n o the r fina nc ia l a sse ts’ in ne t fina nc e c o sts
254 291 69 6 8 11 7 NPAT FY19 Ope ra ting Re ve nue s Ope ra ting Co sts De pre c ia tio n & Amo rtisa tio n Ne t Fina nc e Co sts I nc o me T a x E xpe nse NPAT FY20
$M
11
R na tura l disa ste r pa ss thro ug h a pplic a tio n Offse tting re ve nue s
No te : E a se me nt ta x a nd T UOS (tra nsmissio n use o f syste m c ha rg e s) a re pa ss thro ug h ite ms. Do wne r c o sts o ffse t b y sa le o f inve nto ry a t b o o k va lue .
628 687 34 15 13 15 6 7 17 F Y19 Re g ula te d Ope ra ting Co sts E a se me nt T a x T UOS Do wne r c o sts Bushfire re spo nse E ffic ie nc y imple me nta tio n c o sts AASB 16 Co st re duc tio ns F Y20 Re g ula te d Ope ra ting Co sts
$M
12
pa yme nt fo r fina lisa tio n o f F Y19 ta x re turn
814 721 4 25 56 16 F Y19 Ca sh flo w E BI T DA (e xc luding no n- c a sh ite ms) Ne t Fina nc e Co sts Pa id I nc o me T a x pa id Cha ng e in Wo rking Ca pita l F Y20 Ca sh flo w
$M
13
mitig a tio n o f $147m (F Y19: $125m) a nd o the r sa fe ty me a sure s
c usto me r-initia te d wo rks a nd c o mple tio n o f No rth-We st c o mmunic a tio ns lo o p
ma jo r wind fa rm c o nne c tio ns
a ppro xima te ly 65/ 35
Y20 c a pita l inve stme nt inc lude s c usto me r c o ntrib utio ns o f $124m (F Y19: $132m)
T
Cape x $989M T
Cape x $970M
461 502 211 228 107 105 191 154
F Y 2019 F Y 2020
$M
E le c tric ity Distrib utio n E le c tric ity T ra nsmissio n Ga s Distrib utio n Mo nd o
BI T DA is use d a s a pro xy whe n c o nside ring divide nds)
No te : Ca pita l inve stme nt a s pe r c a sh flo w sta te me nt = $874m. E stima te d ne t re g ula to ry a nd c o ntra c te d a sse t b a se de pre c ia tio n = $294m (I nde xa tio n $225m) 14 1,116 Ca sh 56 De bt 395 299 99 296 366 DR P 127 E BI T DA (e xc luding no n- c a sh ite ms) Ne t Fina nc e Co sts Pa id I nc o me T a x Pa id Ma inte na nc e Ca pe x Gro ss Divide nd Gro wth Ca pe x F und ing
$M
Gr
$578m
8.0 8.2 8.36 8.36 8.53 8.80 9.25 9.72 10.20 9.25
F Y12 F Y13 F Y14 F Y15 F Y16 F Y17 F Y18 F Y19 F Y20 F Y21
15
Y21 d ivid e nd g uid a nc e o f 9.0 - 9.5 c ps (40% fra nke d )
Y21 g uid a nc e is b a se d o n c urre nt b e st e stima te o f c usto me r suppo rt me a sure s a nd prud e ntly re fle c ts the unc e rta in ma c ro e c o no mic c o nd itio ns re sulting fro m COVID-19
Y21 g uid a nc e a lso re fle c ts o ur sig nific a nt inve stme nt pipe line a nd e xpe c te d lo we r re g ula te d re ve nue s fro m upc o ming re g ula to ry re se ts
sc a la te d me a sure s to ma na g e c o st b a se a nd d e plo y o the r
ma rke t c o nd itio ns a nd fina nc ia l pe rfo rma nc e a nd ha ving re g a rd to
c a pe x a nd a po rtio n o f g ro wth c a pe x
po sitio n re ma in ke y prio ritie s
c ps
Divide nd pr
Y12
No te : Chart e xc lude s F Y17 spe c ial divide nd o f 1c ps
0% 0%
9.0- 9.5
710 543 825 252 806 100 250 335 125 425 550 350 200 107 51 207 284 99 110 63
48
160 246 160 200 506
A$'M E UR Ba nk De b t Dra wn A$ MT Ns US$ HK D JPY WC NOK $SGD Hyb rid* USD Hyb rid*
16
UR 500m (A$806m) in F e b rua ry 2020
Y19: 6.5 ye a rs)
* F irst c a ll da te s fo r SGD a nd USD hyb rids is Se pte mb e r 2021
18
ASTRe sponse & Impac ts:
ina nc ial suppo rt fo r c usto me rs, inc lud ing fa st tra c king GSL pa yme nts, wa iving ne two rk a nd c o nne c tio n c ha rg e s fo r a ffe c te d c usto me rs
mo nths o f ve g e ta tio n ma na g e me nt, c le a ring a c tivitie s will be e xte nsive
Y20 c o sts o f $15m (se e king AE R a ppro va l fo r Na tura l Disa ste r p a ss thro ug h)
re q ue nt a nd time ly c usto me r c o mmunic a tio ns (b o th d ig ita l a nd pa pe r)
fe e d b a c k re c e ive d fro m c usto me rs a nd g o ve rnme nt o n AST re spo nse e ffo rts
19
E le c tric ity T ra nsmission E le c tric ity Distribution Ga s Distribution
* Ra pid E a rth F a ult Curre nt L imite r
c o mple te a s pa rt o f stre ng the ning the ne two rk
wind a nd so la r fa rm c o nne c tio ns
c o mple te d with 478km o f fib re insta lle d fro m Ho rsha m to Re d Cliffs to K e ra ng
I nte g ra tio n inte rfa c e wo rks
ina lise d o pe ra tio na l a nd ma inte na nc e se rvic e s c o ntra c t with Zinfra
sta b lishe d Custo me r Adviso ry Pa ne l to wo rk
ra nsmissio n Re ve nue Re se t
F CL * T ra nc he 1- a ll 8 zo ne sub sta tio ns in se rvic e fo r this summe r. 6 o ut o f 8 zo ne sub sta tio ns a re c o mplia nt. T ime e xte nsio ns g ra nte d fo r the two re ma ining zo ne sub sta tio ns to a c hie ve full c o mplia nc e
F CL T ra nc he s 2 a nd 3 o n tra c k to me e t c o mplia nc e da te s with time e xte nsio ns like ly to b e re q ue ste d to a llo w HV c usto me rs a t 2 zo ne sub sta tio ns to a c hie ve RE F CL c a pa b ility
c o ntra c t to Do wne r, e xpa nding fo o tprint fro m 70% to 100% o f ne two rk
g a s pipe line s a nd 3% c usto me r g ro wth
Se rvic e s Co ntra c t c o mme nc ing April 2021
mpro ve d o ve ra ll c usto me r sa tisfa c tio n b y 11% a nd ne w c usto me r c o nne c tio n sa tisfa c tio n b y 28%
mpro ve d Una c c o unte d fo r Ga s re ve nue s b y ne t $1.3m
Ce ntre
E le c tric ity T ra nsmissio n E le c tric ity Distrib utio n Ga s Distrib utio n
Re g ula to ry pe rio d Be g inning o f ne w re se t pe rio d
ina l d e c isio n e xpe c te d b y April 2021
ina l d e c isio n e xpe c te d b y Ja nua ry 2022
Re g ula tor y pe r iod 1 E le c tr ic ity distr ibution 2016- 20 E le c tr ic ity distr ibution 2022- 26 Pr
Be ta 0.7 0.6 Risk F re e Ra te 2.93% 1.26% Co st o f De b t 5.52% 4.79% Ga mma 0.4 0.585 Ma rke t Risk Pre mium 6.50% 6.10% WACC 6.31% 4.84% Re turn o n E q uity 7.50% 4.92% Ne t Ca pe x $1,788m $1,468m Ope x $1,355m $1,328m Re ve nue $3,524m $3,421m CY 2020 CY 2021 CY 2022 CY 2023
1 Curre nt E DPR pe rio d c o nc lude s 31 De c e mb e r 2020, inte rim 6-mo nth pe rio d fro m 1 Ja n 2021 to 30 June 2021 to a pply with a n upda te d WACC e tc
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ra nsmissio n Ne two rk Pro je c t ("WVT
NP") is a
c o mmitte d pro je c t tha t is re q uire d to unlo c k re ne wa b le e ne rg y re so urc e s in the we ste rn a nd no rth-we ste rn Vic to ria re ne wa b le e ne rg y zo ne s
he WVT NP is e xpe c te d to re d uc e c o ng e stio n a nd impro ve the pro d uc tivity o f e xisting a sse ts
T he I nte g ra te d Syste m Pla n pre se nts a sig nific a nt o ppo rtunity fo r AusNe t Se rvic e s, with ~$4.0b n – $6.8b n o f lo ng te rm, la rg e sc a le tra nsmissio n o ppo rtunitie s a vaila ble
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Proje c t ISP Group T a rg e t de live ry Indic a tive c ost2
WVT NP Gro up 1 F Y24-25
Sub je c t to fina l a p p ro va l
VNI We st (K e ra ng link) Gro up 1 F Y26-27 A$1.86b n3 Ma rinuslink Gro up 3 F Y27-281 / F Y37-38 A$2.76b n4
T
A$4.62bn4
MO in the 2020 Dra ft ISP T ra nsmissio n Outlo o k Summa ry
Committe d pr
AusNe t Se r vic e s pr e fe r r e d pa r tne r
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Contr ac ted Infr astr uc tur e
Mondo’s suc c e ss in c onne c ting g r id-sc a le g e ne r a tion pr
e c e nt te nde r a wa r d of the We ste r n Vic tor ia T r a nsmission Ne twor k Pr
e s Mondo r e ma ins we ll pla c e d to g r
a c te d Asse t Ba se to $1.5B by 2024 Mondo’s long -te r m inve stme nts in c ontr a c te d infr a str uc tur e r e duc e Mondo’s e xposur e to fina nc ia l vola tility
530MW
Stoc kya r d Hill Wind F a r m
336MW
Dundonne ll Wind F a r m
Wind far m c onne c tions in F Y20
226MW
Mur r a Wa r r a Wind F a r m
2021 AND BE YOND T ODAY In c halle nging time s, Mondo has a str
re ne wa b le e ne rg y
ME GA PROJE CT S L ar ge - sc ale infr astr uc tur e pr
a sNe two rks
this sig nific a nt pro je c t
Pre limina ry Wo rks
inte rsta te
Sola r Wind Pumpe d hydro Stora g e
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De live r ing ur ge nt tr ansmission c apac ity to we ste r n and nor th- we ste r n Vic tor ia Unloc king r e ne wable e ne r gy r e sour c e s in the r e gion Maximising the pr
ge ne r ation asse ts
Wester n Vic tor ia T r ansmission Networ k Pr
T he We ste r n Vic tor ia T r a nsmission Ne twor k Pr
itic a l, sta te -sig nific a nt pr
sity a nd a va ila bility of e ne r g y supply
Capac ity Re ne wable e ne r gy E xisting ge ne r ation Bulgana T e r minal Station 220kV tr ansmission line Ne w T e r minal Station nor th of Ballar at Nor th Syde nham T e r minal Station 500kV tr ansmission line
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Suppor ting c ommunitie s and busine sse s
1 E
le c tric ity Ne two rk T ra nsfo rma tio n Ro a dma p: F ina l Re po rt Mondo wins pr e stigious 2019 awar d for c ommunity e ngage me nt
Investing in New E ner gy Solutions for the F utur e
Up to 45% of a ll e le c tr ic ity will be g e ne r a te d by c ustome r s in 20501 Mondo is in a ma r ke t-le a ding position to le ve r a g e its e xisting unr e g ula te d ope r a tions to e nte r ne w ma r ke ts by de ve loping r e lia ble a nd c ost-e ffe c tive solutions for its c ustome r s Our foc us is on c r e a ting a futur e for e ne r g y se r vic e s tha t le ve r a g e s our e xpe r tise a nd te c hnolog y to suppor t c ustome r s a s the y tr a nsition to this ne w e ne r g y futur e
A pr
ac k r e c or d Str
c ial par tne r ships
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26
F ina nc ia l re silie nc e a nd a sse t ba se g rowth
Y21 divide nd g uida nc e o f 9.0 - 9.5 c ps, (40% fra nke d). F Y21 g uida nc e prude ntly re fle c ts unpre c e de nte d e c o no mic a nd o pe ra ting unc e rta inty a s a re sult o f COVID-19 pa nde mic , sig nific a nt inve stme nt pipe line a nd impa c ts o f upc o ming re g ula to ry re se ts
Y24
a rg e ting $1.5b n o f c o ntra c te d e ne rg y infra struc ture a sse ts b y F Y24 (a t a ppro pria te risk a djuste d ra te s o f re turn)
Y24
suppo rt c re dit pro file . T his ma y inc lude a pro -ra ta e ntitle me nt o ffe r o f o rdina ry sha re s (within e xisting sha re ho lde r a ppro ve d pa ra me te rs), the issua nc e o f hyb rid c a pita l se c uritie s a nd/ o r o the r funding initia tive s in the ne a r to me dium te rm
COVID- 19 Pa nde mic
pa rtne rs during this diffic ult time
28
1. Ne two rk c ha rg e s will no t a pply to re sid e ntia l c usto me rs o f small re ta ile rs tha t g o into d e fa ult a s a re sult o f COVID-19 (e xc lude s c usto me rs o f la rg e re ta ile rs2) 2. Ne two rk c ha rg e s will no t a pply to small busine ss c usto me rs e xpe rie nc ing fina nc ia l stre ss a nd who ha ve te mpo ra rily c e a se d tra d ing a s a re sult o f COVID-19. Small busine ss c usto me rs a re tho se tha t c o nsume le ss tha n 40MWh o r 400GJ pe r a nnum (b a se d o n 2019 c o nsumptio n) a nd use le ss tha n 25% o f histo ric a l a ve ra g e c o nsumptio n fo r the pe rio d (1 April to 30 June 2020) 3. Ne two rk c ha rg e s will b e de fe rre d fo r re sid e ntial c usto me rs o f la rg e re ta ile rs who g o o n pa yme nt pla ns o r ha rd ship a rra ng e me nts put in pla c e a s a re sult o f COVID-19 4. We will suppo rt re ta ile rs in no t d isc o nne c ting a ny re sid e ntia l o r small b usine ss c usto me rs, witho ut the ir a g re e me nt, b e fo re 31 July 2020 a nd po te ntia lly b e yo nd 5. We will suppo rt re ta ile rs in no t d isc o nne c ting a ny la rg e b usine ss c usto me r, witho ut the ir a g re e me nt, b e fo re 31 July 2020, a nd po te ntia lly b e yo nd , if tha t c usto me r is o n-se lling e ne rg y to re sid e ntial o r small b usine ss c usto me rs (fo r e xa mple , in re sid e ntia l pa rks o r re tire me nt villa g e s) 6. We will wa ive d isc o nne c tio n a nd / o r re c o nne c tio n fe e s fo r sma ll b usine sse s tha t ha ve te mpo ra rily c e a se d o pe ra tio n 7. During this pe rio d o f d isc o nne c tio n, sma ll b usine sse s will no t pa y the d a ily supply c ha rg e s d uring the pe rio d o f d isc o nne c tio n
1 Applie s to AusNe t Se rvic e s e le c tric ity distrib utio n and g as distrib utio n ne two rks 2 L
arg e re taile rs are AGL E ne rg y, E ne rg yAustralia, E RM Po we r, L umo E ne rg y, Mo me ntum E ne rg y, Orig in E ne rg y, Re d E ne rg y, Simply E ne rg y, Stanwe ll Co rpo ratio n and all o f the ir affiliate s
In c ollabor ation with E ne r gy Ne twor ks Austr alia, AusNe t Se r vic e s is imple me nting the following c ustome r r e lie f me asur e s1 T he Austra lia n E ne rg y Re g ula to r ha s pro po se d a n urg e nt rule c ha ng e to the AE MC to e xte nd re ta ile r’ s pa yme nt te rms (e .g . de fe rra l o f ne two rk c ha rg e s) fro m 1 July to 31 De c e mb e r 2020, fo r c usto me rs who a re in fina nc ia l stre ss a s a re sult o f COVID-19 pa nde mic
29 Custome r Numbe r s by se g me nt
Re side ntia l 680,819 Sma ll b usine ss (<40 MWh) 59,057 Me dium b usine ss (40-160 MWh) 9,751 L a rg e b usine ss (>160MWh) 3,974
T
753,601 % R e ve nue by se g me nt
Re side ntia l 52.5% Sma ll b usine ss (<40 MWh) 12.0% Me dium b usine ss (40-160 MWh) 10.2% L a rg e b usine ss (>160MWh ) 25.3%
100% % Volume by se g me nt
Re side ntia l 44.3% Sma ll b usine ss (<40 MWh) 8.3% Me dium b usine ss (40-160 MWh) 8.4% L a rg e b usine ss (>160MWh ) 39.0%
100%
18%
2%
(20)% (15)% (10)% (5)% 0% 5% 10% 15% 20% Re side ntia l Sma ll b usine ss (<40 MWh p.a .) Me dium b usine ss (40-160 MWh p.a .) L a rg e b usine ss (>160 MWh p.a .) T
Apr il 2020 vs Apr il 2019 e le c tr ic ity c onsumption
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2.76 2.86 3.04 2.88 2.93 2.96 3.37 3.50 3.53 3.62 2.33 2.57 3.01 3.25 3.60 3.76 3.95 4.19 4.42 4.69 1.16 1.21 1.28 1.37 1.42 1.46 1.50 1.57 1.61 1.67 0.45 0.45 0.53 0.54 0.56 0.71 0.85
F Y11 F Y12 F Y13 F Y14 F Y15 F Y16 F Y17 F Y18 F Y19 F Y20
E le c tric ity tra nsmissio n E le c tric ity distrib utio n Ga s distrib utio n Mo ndo (Co ntra c te d Asse t Ba se )
6.25 6.64 7.33 7.96 8.40 8.72 9.37 9.81
$bn
10.27
Y11-F Y20 a sse t b a se g ro wth o f ~6.25% p.a . CAGR
10.83
31
F utur e - r e ady Capabilitie s & Cultur e Gr
Cost E ffic ie nc y Custome r Ce ntr ic ity Digital Utility
Ac c re tive a sse t b a se g ro wth
Obje c tive s
Impro ve e ffic ie nc y a nd re d uc e c o sts E na b le c usto me r c ho ic e a nd c o ntro l Inve st in d ig ita l to o ls a nd pro c e sse s to impro ve pe rfo rma nc e E nsure we ha ve the rig ht c ulture a nd c a pa b ilitie s fo r susta ina b le hig h pe rfo rma nc e a nd a d a pt to the future
T ar ge te d Outc ome s
pa rtne rships
nha nc e d c usto me r e xpe rie nc e a c ro ss the po rtfo lio
ng a g e d e mplo ye e s a nd a d a ptive wa ys o f wo rking
E ne rg ising F uture s re spo nds to industry tra nsfo rma tio n, whic h is c ha ra c te rise d b y a shift to wa rds re ne wa b le s, ne w te c hno lo g ie s, c ha ng ing c usto me r e xpe c ta tio ns, po lic y unc e rta inty a nd pre ssure o n e ne rg y a ffo rda b ility
32
d ue to hig he r e a se me nt ta x pa ss-thro ug h ($34m)
xc lud e d re ve nue s $85m (F Y19: $74m), inc re a se d d ue to We st Ga te tunne l wo rks
Y21 re ve nue c a p $570m
A$M F Y 2020 F Y 2019 Va ria nc e
Re ve nue
670.9
618.2 ↑8.5% E BI T DA
421.2
390.4 ↑7.9% E BI T DA Ma rg in
62.8%
63.2% ↓0.4% E BI T
309.2
292.9 ↑5.6% E BI T Ma rg in
46.1%
47.4% ↓1.3% Re g ula te d Asse t Ba se
3,620
3,533 ↑2.4%
33
UOS pa ss thro ug h o f a ro und $80m a nd $9m ST PIS re ve nue )
UOS pa ss thro ug h o f a ro und $113m a nd $5m ST PIS re ve nue )
Y20 me te ring re ve nue $48m (F Y19: $51m)
xpe c t CY20 me te ring re ve nue s o f $46m
Y19: $70m), inc re a se d d ue to hig he r ho using d e ve lo pme nt a c tivity
xc lud e d re ve nue s $27m (F Y19: $25m)
A$M F Y 2020 F Y 2019 Va ria nc e
Re ve nue
937.1
866.2 ↑8.2% E BI T DA
564.1
528.5 ↑6.7% E BI T DA Ma rg in
60.2%
61.0% ↓0.8% E BI T
302.7
244.1 ↑24.0% E BI T Ma rg in
32.3%
28.2% ↑4.1% Vo lume s (GWh)
7,531
7,608 ↓1.0% Co nne c tio ns
753,601
736,841 ↑2.3% Re g ula te d Asse t Ba se
4,694
4,427 ↑6.0%
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g a s re ve nue s ($1.3m ne t o f una c c o unte d fo r g a s e xpe nse )
Y19: $7m)
Y19: $5m)
lo we r ind ustria l usa g e in the prio r pe rio d
A$M F Y 2020 F Y 2019 Va ria nc e
Re ve nue
223.8
215.1 ↑4.0% E BI T DA
159.0
152.5 ↑4.3% E BI T DA Ma rg in
71.0%
70.9% ↑0.1% E BI T
96.9
100.7 ↓3.8% E BI T Ma rg in
43.3%
46.8% ↓3.5% Vo lume (PJ)
68.3
63.3 ↑7.9% Co nne c tio ns
732,479
711,310 ↑3.0% Re g ula te d Asse t Ba se
1,676
1,617 ↑3.7%
A$M F Y 2020 F Y 2019 Va ria nc e
Re ve nue
156.3
172.1 ↓9.2% E BI T DA
52.3
62.8 ↓16.7% L e a se I nte re st I nc o me
24.7
11.7 ↑111.1% E BI T DA a fte r le a se inc o me (E BI T DAa l)
77.0
74.5 ↑3.4% E BI T DAa l ma rg in
42.5%
40.5% ↑2.0% E BI T
23.3
40.1 ↓41.9% E BI T a fte r le a se inc o me (E BI T a l)
48.0
51.8 ↓7.3% E BI T a l Ma rg in
26.5%
28.2% ↓1.7% Co ntra c te d I nfra struc ture Asse t Ba se
848
712 ↑19.1%
c o mple te d a nd e a rly wo rks c o ntra c ts a re ne tte d b y re d uc e d lo w-ma rg in fie ld se rvic e s c o ntra c ts e xite d a nd no n-re c urring F Y2019 a sse t inte llig e nc e pro je c ts
re ve nue / le a se inte re st inc o me b ut 2% inc re a se in E BIT DAa l ma rg in
impa c ting infra struc ture a sse ts. Cha ng e s inc lud e :
›
De d ic a te d c usto me r c o nne c tio n a sse ts no w tre a te d a s a fina nc e le a se , with pre vio us re ve nue stre a ms no w split b e twe e n inte re st inc o me , princ ipa l re pa yme nt a nd o pe ra ting re ve nue
›
Mo nd o ’ s ke y pe rfo rma nc e me tric s a fte r le a se inc o me a re a b e tte r re fle c tio n o f b usine ss pe rfo rma nc e
35
36
F inanc ial Me tr ic s
F Y 2020 F Y 2019
Ma rke t Ca pita lisa tio n
$6.4bn
$6.5b n T
$14.3bn
$12.8b n Re g ula te d / Co ntra c te d Asse t Ba se
$10.8bn
$10.3b n T
a c e Va lue )
$7.7bn
$7.2b n Ne t De b t 1
$8.9bn
$7.6b n Ne t Ge a ring (Ca rrying Va lue ) 2
75%
70% Ne t De b t (F a c e Va lue ) to Re g ula te d / Co ntra c te d Asse t Ba se 3
67%
67% Inte re st Co ve r 4
3.3x
3.3x Cre dit Ra ting s (S&P / Mo o dy’ s)
A- / A3
A- / A3
No te
nc lude s full amo unt o f $A706m in Hyb rids, de spite re c e iving 50% e q uity c re dit.
Co ntrac te d Asse t Base . De mo nstrate s ho w AusNe t S e rvic e s funds its c ape x in te rms o f de b t vs. inc o me g e ne rating asse ts. I nc lude s full amo unt o f $A706m in Hyb rids, de spite re c e iving 50% e q uity c re dit.
BI T DA (inc luding le ase inc o me ) le ss c usto me r c o ntrib utio ns and tax paid, divide d b y ne t inte re st e xpe nse . T his is ho w inte re st c o ve r is me asure d fo r inte rnal manag e me nt purpo se s, as it pro vide s an ac c urate re fle c tio n o f ho w afte r-tax o pe rating c ash flo ws are use d to me e t inte re st payme nts. I nc lude s full amo unt o f $A706m in Hyb rids, de spite re c e iving 50% e q uity c re dit.
37
Re gulator y pe r iod Gas distr ibution 2018- 22 E le c tr ic ity distr ibution 2016- 20 E le c tr ic ity tr ansmission 2017- 22 Be ta 0.70 0.70 0.70 Risk F re e Ra te 2.73% 2.93% 2.52% Co st o f De b t 5.04% 5.52% 4.94% Ga mma 0.40 0.40 0.40 Ma rke t Risk Pre mium 6.50% 6.50% 6.50% No mina l Va nilla WACC 5.94% 6.31% 5.80% Re turn o n E q uity 7.30% 7.50% 7.10% Ne t Ca pe x (No mina l) $522m $1,788m $780m Ope x (No mina l) $293m $1,355m $1,225m Re ve nue (No mina l) $1,040m $3,524m $2,742m
No te : Data in tab le is b ase d o n o rig inal re g ulato ry de te rminatio ns
38
AusNe t Se rvic e s is the la rg e st d ive rsifie d e ne rg y ne two rk b usine ss in Vic to ria , o wning a nd o pe ra ting a ro und $10.8 b illio n o f re g ula te d a nd c o ntra c te d a sse ts. T he c o mpa ny o wns a nd o pe ra te s thre e re g ula te d ne two rks - e le c tric ity d istrib utio n, g a s d istrib utio n a nd the sta te -wid e e le c tric ity tra nsmissio n ne two rk. T he c o mpa ny a lso ha s a n unre g ula te d b usine ss c a lle d Mo nd o , fo c using o n c o ntra c te d infra struc ture a nd e ne rg y se rvic e s. He a d q ua rte re d in Me lb o urne , Austra lia , AusNe t Se rvic e s e mplo ys a ro und 1,700 pe o ple to se rvic e a ro und 1.5 millio n c usto me rs.
F
e infor mation visit www.ausne tse r vic e s.c om.au
F
fur the r infor mation c ontac t:
Me dia Re la tions
Jo hn Pre sto n GM Co rpo ra te Affa irs +61 416 209 351
AusNe t Se rvic e s L td
L e ve l 31 2 So uthb a nk Bo ule va rd So uthb a nk Vic to ria 3006 Austra lia L
Me lb o urne City Ma il Ce ntre Vic to ria 8001 Austra lia T e l: +61 3 9695 6000 F a x: +61 3 9695 6666 He a d o f T a x & I nve sto r Re la tio ns Jo hn Nic o lo po ulo s +61 3 9695 6301 o r +61 409 672 912
Inve stor Re la tions
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