REFINING NZ ANNUAL GENERAL MEETING | 12 APRIL 2019 REFINING NZ - - PowerPoint PPT Presentation

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

We are CLEAR about what we need to do to provide value to our shareholders

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

To delight our customers and sustain our community and our environment … …. for the years ahead

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

ANNUAL MEETING

CHAIRMAN

SIMON ALLEN

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

GENERAL BUSINESS AGENDA CHAIRMAN’S ADDRESS RESOLUTIONS CEO’S ADDRESS

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019 6

DISCLAIMER

• This presentation contains forward looking statements concerning the financial condition, results and operations of The New Zealand Refining Company Limited (hereafter

referred to as “Refining NZ”).

• Forward looking statements are subject to the risks and uncertainties associated with the refining environment, including price and foreign currency fluctuations, production

results, demand for Refining NZ’s products or services and other conditions. Forward looking statements are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements.

• Forward looking statements include among other things, statements concerning the potential exposure of Refining NZ to market risk and statements expressing

management’s expectations, beliefs, estimates, forecasts, projections and assumptions. Forward looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “goals”, “intend”, “may”, “objectives”, “outlook”, “plan”, “probably”, “project”, “risks”, “seek”, “should”, “target”, “will” and similar terms and phrases.

• Readers should not place undue reliance on forward looking statements. Forward looking statements should be read in conjunction with Refining NZ’s financial statements

released in the Annual Report. This presentation is for information purposes only and does not constitute legal, financial, tax, financial product advice or investment advice or a recommendation to acquire Refining NZ’s securities, and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, you should consider the appropriateness of the information having regard to your own objectives, financial situation and needs and consult an NZX Firm or solicitor, accountant or other professional adviser if necessary.

• In light of these risks, results could differ materially from those stated, implied or inferred from the forward looking statements contained in this announcement. Refining NZ

does not guarantee future performance and past performance information is for illustrative purposes only. To the maximum extent permitted by law, the directors of Refining NZ, Refining NZ and any of its related bodies corporate and affiliates, and their offices, partners, employees, agents, associates and advisers do not make any representation

• r warranty, express or implied, as to accuracy, reliability or completeness of the information in this presentation, or likelihood of fulfilment of any forward-looking statement or

any event or results expressed or implied in any forward-looking statement, and disclaim all responsibility and liability for these forward-looking statements (including, without limitation, liability for negligence).

• Except as required by law or regulation (including the NZX Main Board Listing Rules), Refining NZ undertakes no obligation to provide any additional or updated information

whether as a result of new information, future events or results or otherwise.

• Forward looking figures in this presentation are unaudited and may include non-GAAP financial measures and information. Not all of the financial information (including any

non-GAAP information) will have been prepared in accordance with, nor is it intended to comply with: (i) the financial or other reporting requirements of any regulatory body;

• r (ii) the accounting principles generally accepted in New Zealand or any other jurisdiction with IFRS. Some figures may be rounded and so actual calculation of the figures

may differ from the figures in this presentation. Non-GAAP financial information does not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information presented by other entities. Non-GAAP financial information in this presentation is not audited or reviewed.

• Each forward looking statement speaks only as of the date of this announcement, 12 April 2019.

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

SIMON ALLEN

CHAIRMAN’S ADDRESS

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019 8

2018 YEAR IN REVIEW

Company is well positioned for the future PLANNED SHUTDOWN COMPLETE

First total refinery shutdown in 14 years Complex engineering Hydrogen manufacturing unit refurbished

OPERATIONAL PERFORMANCE

NPAT $29.6 million Record refinery throughput in 2H19 Record throughput on the pipeline

HEALTH, SAFETY AND ENVIRONMENT

Strong finish for personal safety Safety case submitted Continued reduction in CO2 intensity

STRATEGY REFRESH

Strategy day: June 2019

GOVERNMENT INQUIRIES

One off costs

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

Our new realistic strategy is to:

• retain profitable refining at the core
• harness natural resources
• leverage existing capabilities and assets
• confirm our role in NZ’s transition to a low carbon future
• remain committed to commercial return and shareholder

value Strategic update in June

STRATEGIC DIRECTION

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019 10

2018 YEAR IN REVIEW

Company is well positioned for the future CAPITAL STRUCTURE

$75 million subordinated notes issue Diversifies Refining NZ funding sources

DIVIDENDS

Total dividend 7.5 cents per share Reflects impact of planned maintenance shutdown on performance In line with dividend policy

BOARD CHANGES

November 2018 Independent Director James Miller appointed February 2019 Independent Director Mark Tume resigns

MANAGEMENT CHANGE

August 2018 CEO Mike Fuge appointed

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

Mike Fuge

CEO

ANNUAL MEETING

CHIEF EXECUTIVE OFFICER

MIKE FUGE

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

SHUTDOWN 2018

An enormous logistical undertaking successfully completed

Major re-life of key units Complex brownfield retrofits Extended economic life:

• Hydrogen

Manufacturing Unit

• High Vacuum Unit

1,700 Jobs finished to a high quality Positions us well for a low carbon future

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

TAKING A STAND FOR SAFETY – E Tū Tangata

• Safety culture initiative launched Jan 2019
• Engaging our people about best practice

workplace safety

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019 14

JET FUEL IMPORT FACILITY

2017/2018 Completed Projects

First tank conversion, import line, filtering and dosing

2019/2020 Projects

Second tank conversion

DELIVERING VALUE

PIPELINE CAPACITY

Stages I and II delivered Trialling drag reducing agent (DRA) in Q3 DRA could increase pipeline capacity by around 15%

PIPELINE RESILIENCE

LIDAR

Mobile truck loading skids

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019 15

DREDGING CONSENTED

A major milestone for this margin enhancing initiative

APPEAL TO THE ENVIRONMENT COURT RESOLVED

Conditions agreed by all parties 12 months of baseline water quality monitoring Reviewing phasing of tank maintenance to accelerate dredging Final investment decision to be taken in 2019 Estimated cost $60-$70 million Expected GRM uplift USc/bbl 30+

PRODUCT / CRUDE COST FREIGHT

GRM

increase Current

GRM

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019 16

Produce 0.5% sulphur marine fuel oil Increase bitumen production by debottlenecking existing plant Expand our crude diet Improve logistics

• f High Sulphur Fuel Oil

exports

MARPOL – OUR STRATEGIES INCLUDE

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

LOOKING AHEAD

Asian demand growth expected to outstrip capacity additions (at least until 2025) Global weakness in gasoline prices likely to continue in H1 2019 (caveat Chinese exports) Jet fuel and diesel demand expected to grow. Supports long term refining margins RNZ expects margin benefit from MARPOL market disruption

Source:

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019 18

(34) 326 (46) 342 (56) 356 (65) 369 4 273 (10) 293 (23) 311 (34) 326 43 220 25 244 10 265 (3) 283 81 169 61 195 43 220 27 241 120 131 96 154 76 174 58 198 158 92 131 119 109 142 89 161

4.00

GRM US$

5.00 6.00 7.00 8.00 9.00

US$ EXCHANGE RATE

0.60 0.65 0.70 0.75

44 Production, Mbbl 101 Non Processing Fee Revenue, $m 103 Depreciation, $m

PLAN TO IMPROVE SHAREHOLDER RETURNS

Continued excellent

• perational performance

Action asset management

• Cost control
• Aggregated programmes
• Productivity lift
• New tech & innovation

Growth projects

• Dredging
• Low sulphur fuel oil
• Bitumen

Diversified earnings via new boundaries:

• Green hydrogen
• Solar

Profit Matrix reissued for 2019

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

ANNUAL MEETING

CHAIRMAN

SIMON ALLEN

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

RESOLUTIONS

RESOLUTIONS

ANNUAL MEETING

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

APPOINTMENT OF AUDITOR

RESOLUTION

APPOINTMENT OF AUDITOR

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

“That Directors be authorised to fix the fees and expenses of PricewaterhouseCoopers as auditors to the Company for the financial year ending 31 December 2019.”

RESOLUTION 1

FOR AGAINST DISCRETIONARY TOTAL ABSTAIN

Proxies and Postal votes

84,094,243 2,162,855 134,419,475 220,676,573 336,508

RESOLUTION 1

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

RE-ELECTION/ ELECTION OF DIRECTORS

RESOLUTION

RE RE-ELECTION/ ELECTION OF DIRECTORS

RESOLUTION

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

“That Mr R.Cavallo, who retires by rotation in accordance with clause 8.9 of the Constitution be re-elected as a Director of the Company.”

RESOLUTION 2(a)

FOR AGAINST DISCRETIONARY TOTAL ABSTAIN

Proxies and Postal votes

85,220,698 901,789 134,540,072 220,662,559 350,522

RESOLUTION 2(a)

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

“That Mr P.A.Zealand, who retires by rotation in accordance with clause 8.9 of the Constitution be re-elected as a Director of the Company.”

RESOLUTION 2(b)

FOR AGAINST DISCRETIONARY TOTAL ABSTAIN

Proxies and Postal votes

84,856,208 1,273,413 134,528,905 220,658,526 354,555

RESOLUTION 2(b)

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

“That Mr J.B.Miller be elected as a Director of the Company.”

RESOLUTION 2(c)

FOR AGAINST DISCRETIONARY TOTAL ABSTAIN

Proxies and Postal votes

84,848,003 1,254,413 134,549,305 220,651,721 361,360

RESOLUTION 2(c)

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

RESOLUTION

CHANGE TO THE CONSTITUTION

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

“That the existing Constitution of the Company be revoked and a new Constitution in the form tabled at the meeting and signed by the Chairperson for the purposes of identification be adopted with effect from 1 July 2019 or such earlier date notified through NZX by the Company.”

RESOLUTION 3

FOR AGAINST DISCRETIONARY TOTAL ABSTAIN

85,992,973 70,953 134,593,801 220,657,727 355,354

RESOLUTION 3

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019

GENERAL BUSINESS

GENERAL BUSINESS

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019 30

DISCLAIMER

• This presentation contains forward looking statements concerning the financial condition, results and operations of The New Zealand Refining Company Limited (hereafter

referred to as “Refining NZ”).

• Forward looking statements are subject to the risks and uncertainties associated with the refining environment, including price and foreign currency fluctuations, production

results, demand for Refining NZ’s products or services and other conditions. Forward looking statements are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements.

• Forward looking statements include among other things, statements concerning the potential exposure of Refining NZ to market risk and statements expressing

management’s expectations, beliefs, estimates, forecasts, projections and assumptions. Forward looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “goals”, “intend”, “may”, “objectives”, “outlook”, “plan”, “probably”, “project”, “risks”, “seek”, “should”, “target”, “will” and similar terms and phrases.

• Readers should not place undue reliance on forward looking statements. Forward looking statements should be read in conjunction with Refining NZ’s financial statements

released in the Annual Report. This presentation is for information purposes only and does not constitute legal, financial, tax, financial product advice or investment advice or a recommendation to acquire Refining NZ’s securities, and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, you should consider the appropriateness of the information having regard to your own objectives, financial situation and needs and consult an NZX Firm or solicitor, accountant or other professional adviser if necessary.

• In light of these risks, results could differ materially from those stated, implied or inferred from the forward looking statements contained in this announcement. Refining NZ

does not guarantee future performance and past performance information is for illustrative purposes only. To the maximum extent permitted by law, the directors of Refining NZ, Refining NZ and any of its related bodies corporate and affiliates, and their offices, partners, employees, agents, associates and advisers do not make any representation

• r warranty, express or implied, as to accuracy, reliability or completeness of the information in this presentation, or likelihood of fulfilment of any forward-looking statement or

any event or results expressed or implied in any forward-looking statement, and disclaim all responsibility and liability for these forward-looking statements (including, without limitation, liability for negligence).

• Except as required by law or regulation (including the NZX Main Board Listing Rules), Refining NZ undertakes no obligation to provide any additional or updated information

whether as a result of new information, future events or results or otherwise.

• Forward looking figures in this presentation are unaudited and may include non-GAAP financial measures and information. Not all of the financial information (including any

non-GAAP information) will have been prepared in accordance with, nor is it intended to comply with: (i) the financial or other reporting requirements of any regulatory body;

• r (ii) the accounting principles generally accepted in New Zealand or any other jurisdiction with IFRS. Some figures may be rounded and so actual calculation of the figures

may differ from the figures in this presentation. Non-GAAP financial information does not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information presented by other entities. Non-GAAP financial information in this presentation is not audited or reviewed.

• Each forward looking statement speaks only as of the date of this announcement, 12 April 2019.

REFINING NZ

ANNUAL GENERAL MEETING | 12 APRIL 2019