Infratil Annual Meeting 20 August 2020
Infratil Annual Meeting • Chair’s Introduction Agenda • Chief Executive’s Review • Presentation of the Annual Report • Shareholder Questions • Resolutions, including Director elections and Scrip Option • Close Infratil Annual Meeting presentation - 2020 2
Infratil Annual Meeting Online participation The voting box Question box Infratil Annual Meeting presentation - 2020 3
Alison Gerry Independent Director and Chairperson of the Meeting • Independent Director since 2014 • Chair of Audit and Risk Committee • Member of the Manager Engagement Committee • Member of Nomination and Remuneration Committee • Director of Wellington Airport Infratil Annual Meeting presentation - 2020 4
Mark Tume Chair and Independent Director • Independent Director since 2007 • Chair since 2013 • Chair of the Manager Engagement Committee • Chair of Nomination and Remuneration Committee • Director of RetireAustralia Infratil Annual Meeting presentation - 2020
Marko Bogoievski Chief Executive Officer and Director • Chief Executive of Infratil and Director since 2009 • Chief Executive of H.R.L. Morrison & Co Group • Chair of Vodafone New Zealand • Up for re-election Infratil Annual Meeting presentation - 2020 6
Paul Gough Independent Director • Independent Director since 2012 • Member of Manager Engagement Committee • Member of Nomination and Remuneration Committee Infratil Annual Meeting presentation - 2020 7
Kirsty Mactaggart Independent Director • Independent Director since 2019 • Member of Audit and Risk Committee • Member of Manager Engagement Committee Infratil Annual Meeting presentation - 2020 8
Catherine Savage Independent Director • Independent Director since 2019 • Member of Audit and Risk Committee • Member of Manager Engagement Committee Infratil Annual Meeting presentation - 2020 9
Peter Springford Independent Director • Independent Director since 2016 • Member of Manager Engagement Committee • Up for re-election Infratil Annual Meeting presentation - 2020 10
Chief Executive’s Review Infratil Annual Shareholders Meeting 2020
Full Year Overview Full Year • Net parent surplus for the year of $241.2 million, Overview compared to a loss of $19.5 million in the prior year Increasing • 13.5% growth in underlying EBITDAF reflected exposure to our changes in the portfolio and a growing preferred sectors contribution from data and communications infrastructure; of data ‐ Acquisition of 49.9% of Vodafone New Zealand infrastructure completed on 31 July 2019 for $1.03 billion and renewable ‐ Divestments and tightening of the portfolio are energy has now substantially complete driven growth in • Capital expenditure investment of $920 million, a year of including $541 million in renewable energy and $227 million at CDC Data Centres portfolio changes • Strong capital position and liquidity across the Group to support near to medium term capital commitments • Partially imputed dividends of 17.25 cents per share declared Infratil Annual Meeting presentation - 2020 12
Portfolio Resilience and Composition • Infratil is well positioned in scalable high growth sectors with good jurisdictional diversification Recent • Recent investment focused on Renewable Energy and Data & Connectivity platforms: investment Tilt Renewables focused on • 336MW (A$560 million) Dundonnell Wind Farm nearing completion • 133MW (NZ$277 million) Waipipi Wind Farm under construction building scalable Longroad Energy platforms with • 509MW of utility scale solar under construction (Alabama & California) • 313MW of utility scale wind under construction (Minnesota & Texas) defensive Galileo Green Energy characteristics • Newly established development platform based in Europe • Pace of development will reflect COVID-19 realities and ongoing CDC Data Centres demand growth • 105MW of installed Data Centre capacity with a further 25MW under construction • Roadmap to over 270MW of Data Centre capacity • Announced development of two hyperscale Data Centres in Auckland Vodafone New Zealand • $3.4 billion acquisition of Vodafone New Zealand • Launch of 5G network in December 2019 and business transformation programme underway Infratil Annual Meeting presentation - 2020 13
Portfolio Investment Sector Resilience and Composition 3% 3% 3% 5% 5% Portfolio is 18% 11% positioned well to 11% 37% weather the COVID-19 crisis and relatively cushioned from 16% extended 17% economic downturns 27% 44% Trustpower Tilt Renewables Renewable Energy Data & Connectivity CDC Data Centres Vodafone New Zealand Airports Wellington Airport RetireAustralia Retirement Longroad Energy Other Other Infratil Annual Meeting presentation - 2020 14
Portfolio Resilience and Funding and Liquidity Composition • $300 million equity raised in June 2020 provides additional balance sheet flexibility to fund growth investments across Infratil’s existing portfolio companies and to take advantage of Equity raised opportunities that may arise as a result of current market conditions provides • Tilt Renewables' capital return completed in July 2020 (Infratil's share ~NZ$180 million) • Cash on hand and undrawn debt facilities provide Infratil with ~NZ$630 million of liquidity flexibility to fund • Infratil's next bank maturity is NZ$32 million in February 2021 growth • Infratil's next two bond maturities are NZ$93.9 million of IFT220 bonds in June 2021 and investments NZ$93.7 million of IFT190 bonds in June 2022 across the portfolio Debt Maturity Profile as at 31 July 2020 800 700 600 500 194 Bonds 400 662 300 Wholly owned bank facilities 122 200 350 94 232 100 32 148 115 50 - - FY21 FY22 FY23 FY24 FY25-31 >FY31 Infratil Annual Meeting presentation - 2020 15
Portfolio Target Returns Infratil Expected Leverage Management Return to Portfolio Portfolio Returns Assumption Costs Shareholders composition and active Core 8 – 10% management Lower Risk Per annum approach Average net debt/ designed to 10 – 15% 1% of assets 11 – 15% Core Plus / total capital 30% + + – = + + = – Growth at 6% p.a. Per annum Per annum Per annum deliver interest rate targeted returns Development 15 – 25% Higher Risk Per annum Notes: 1. Infratil’s Absolute Return Target set 1 April 2018 2. Based on composition of existing Infratil portfolio Infratil Annual Meeting presentation - 2020 16
Share Price Infratil Share Price Performance 6.00 Outstanding returns delivered $4.88 5.00 over the medium and long-term 4.00 $3.91 3.00 Total Shareholder Return Period TSR 2.00 1 April – 19 August 2020 27.7% 1 Year 1 (2.1%) 1.00 5 Year 1 9.6% 10 Year 1 14.2% Inception – 26 years 1 16.6% - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 1 Total shareholder returns are to 31 March 2020 based on a closing share price of $3.91 Infratil Annual Meeting presentation - 2020 17
COVID-19 Response COVID-19 Update Keeping the • Prioritising the health & wellbeing of all lights on, employees and customers while ensuring helping to keep delivery across critical national infrastructure people working • Significant resources redirected to most and connected urgent requirements with a focus on preserving free cash flow and capital and protecting • Ongoing focus on safety and the delivery of our retirement significant capital projects that are under village residents construction • All debt maturing in CY2020 has been refinanced and additional liquidity has been secured where required • Learnings being applied to reposition portfolio businesses for future challenges and opportunities Infratil Annual Meeting presentation - 2020 18
Assessing and responding to the impact of CDC Data Centres Tilt Renewables COVID-19 • Increased demand for resilient digital • Melbourne-based team continues to work infrastructure effectively from home Strong platforms • Minimal forecast volume or profitability • Operating assets producing predictable impacts given nature of customer base cashflows that are largely resilient to that can sustain (Government and Enterprise) short-term market fluctuations growth in • Favourable short-term outlook as • Depressed Australian wholesale electricity challenging customers increase deployments to manage prices will impact non-contracted increased reliance on digital assets generation economic • Medium-term sales outlook remains robust • Significant cash position and strong conditions given continued outsourcing, cloud balance sheet to support medium-term adoption and the underlying growth in data development pipeline • Current capital projects remain on track, • Working closely with project partners to with development activity being actively manage international supply chain, managed to accommodate COVID-19 construction activities and movements of management measures key personnel • Significant refinancing completed in • All 80 turbines erected at Dundonnell November 2019 with no maturities until (Victoria), in‐line with the original project November 2022 schedule. Waipipi is progressing in-line with expectations, with 4 turbines now erected Infratil Annual Meeting presentation - 2020 19
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