hy18 result presentation...31 december 2016 31 december 2017 190 290 425 193 100 bank debt wholesale...

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

HY18 Result Presentation

14 February 2018

Marc England – CHIEF EXECUTIVE

Chris Jewell – CHIEF FINANCIAL OFFICER

AGENDA

Key Highlights

Operational and Strategic Update

Financial Performance

Outlook

HY18 RESULT PRESENTATION 2

1. Key Highlights

HY18 key highlights— positive start to FY18 as our diverse portfolio, acquisitions and strategy deliver results


• EBITDAF up 28% to $200m, 15% excluding acquisitions• NPAT down 24% to $28 million, due to fair value movements• Underlying earnings up 14% to $43 million• Free cash flow up 37% to $129 million• Operating cash flow up 57% to $199 million• Operating costs1 up 16%, down 1% on an underlying basis

excluding growth expenditure and carbon costs

• Strong wholesale performance with generation volumes up 25%, GWAP up 80%

• Steady performance for customer segment (EBITDAF impacted by higher costs)

• Kupe gas production at 94% of maximum capacity supporting generation requirements

• TRIFR of 1.37 remains at sector leading levels

• New brand launched with promoter score up 2 ppts• > 100,000 EOL customers, up 5%• Organic LPG growth up 27%. LPG integration on track including

bringing forward third party distributor exit• B2B sales teams drive volumes up 17%• Thermal assets providing an important role in ensuring New

Zealand security of supply

• Dividend declared of 8.3cps, up 1%• Dividend Reinvestment Plan introduced to support growth with

NZ government commitment to retain 51% ownership• 12 month total shareholder return 7% ahead of NZX50

Strong financial performance Delivering business outcomes

Continuing progress on strategy Converting to shareholder returns

1. Operating costs refers to “other operating expenses and employee benefits”, including carbon costs for trading purposes. Refer to Operating costs on slide 9 for further information.

2. Financial Performance

— strong financial performance in variable market conditions

156

37 37

149

95

23

82

200

2843

173

129

27

83

EBITDAF NPAT Underlying Earnings Operating Costs Free Cash Flow Capital Expenditure Interim Dividend

$ MILLIONS

HY17 HY18

FINANCIAL HIGHLIGHTS

+ 28% -24% + 14% + 16% + 17%+ 37% + 1%


HY18 financial highlights

HY18 vs HY17 EBITDAF

$ MILLIONS


— 28% EBITDAF growth driven by strong underlying performance and FY17 acquisitions

HY18 EBITDAF waterfall

156

200

44

7

25

19

27

5

2

HY17 EBITDAF Generationmargin

Kupeacquisition

Kupevolumes and

fuel prices

LPGacquisition

Pricingimprovements

Lines costs Reducedretail

demand

Investmentin growth

opex

Other HY18 EBITDAF

Favourable Unfavourable

EBITDAF down $6 million (9%) to $57 million

Electricity sales 3,008 GWh up 3% Gas sales 4.0PJ down 7%LPG sales 18.3 kilo tonnes up 610%Transfer price impact $(2.5) million

EBITDAF up $24 million (29%) to $106 million

Generation 3,870 GWh up 25%GWAP $96/MWh up 80%Average fuel cost $36/MWh up 17%Transfer price impact $2.5 million

EBITDAF up $24 million (75%) to $56 million

Gas sales 6.1PJ up 61%Oil sales 241kbbl up 64%LPG sales 22.7kt up 96%


— Strong H1 for Wholesale and Kupe with Customer prioritising growth investment

Segment performance

Kupe- Impact of 15% additional stake and strong production levels to support thermal plant

Wholesale- Strong performance as Genesis’ diverse portfolio responds to market conditions

Customer- LPG distribution business acquisition benefit offset by investment in growth

138 137

HY14 HY15 HY16 HY17 HY18

$ MILLIONS

Underlying operating expenses Carbon costs

Investment in growth LPG acquisition

176

149144142

173

OPERATING EXPENSES1 OPERATING EXPENSE BRIDGE


Operating expenses— underlying expenses down 1%, before acquisitions, investment in growth and carbon

$7 million of additional investment to support growth in line with market guidance, carbon for trading purposes up in line with increase in carbon costs

Favourable Unfavourable

Operating cost efficiencies in core business, underlying expenses down 1%

2. Carbon costs represent the cost of carbon used for trading purposes, offset by revenue recognised in other revenue.

149

1736

714

3

HY17operatingexpenses

LPGacquisition

Investment ingrowth opex

Carboncosts

Othermovements

HY18operatingexpenses

$ MILLIONS

2

2

1. Operating costs refers to “other operating expenses and employee benefits”.

3. Investment in business sales teams and rebranding.

3

83 92114

95

129


$ MILLIONS

OPERATING CASH FLOW

165136

163127

199


$ MILLIONS

FREE CASH FLOW1


Cash flow— operating cash flow up 57% and free cash flow up 37% in line with EBITDAF growth

Significantly up reflecting higher EBITDAF, reduction in coal inventory and carbon

trading units, reduced tax pre-payments and use of pre-paid gas

Improved free cash flow reflects operating performance improvement

1. Free cash flow represents EBITDAF less tax, interest and stay in business capital expenditure.

5844 40 39

22

24

8

5

FY14 FY15 FY16 FY17 FY18 YTD

Stay in Business Tekapo Canal Growth

CAPITAL EXPENDITURE1

$ MILLIONS


Capital expenditure— disciplined approach as capital reallocated to support growth segments

Reallocation of capital to growth areas with a higher ROCE

CAPITAL EXPENDITURE1

Continued discipline on spend

1. Capital expenditure excludes M&A activities.

FY14 FY15 FY16 FY17 FY18 YTD

Wholesale Customer Kupe Technology & Digital

$ MILLIONS

82

44 4047

27

2

2. Key projects include LPG distribution investment, the Energy Project and Technology and Digital development.

NET DEBT AND NET DEBT/EBITDAF

966905

831

1,2101,158

2.9

2.52.6

3.3

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

FY14 FY15 FY16 FY17 HY18 FY18 Fct

Net debt Net debt/EBITDAF

2.9

SOURCES OF FUNDING


Capital structure— net debt has reduced by $52m with improving debt metrics

Average tenor at HY18 up 3.1 years, interest costs down 20 basis points to 5.8%, improving net debt

to EBITDAF

Reduced reliance on bank debt, S&P rating reaffirmed at BBB+, 15 January 2018

310

240200

193

100

31 DECEMBER 2016 31 DECEMBER 2017

190

290

425

193

100

Bank debt Wholesale domestic bonds

Capital bonds USPP Retail bonds

3.1anticipated30 Jun18 range

DIVIDEND & PAYOUT HISTORY

64

80 82 82 83

77%

87%

72%

87%

64%

0%

20%

40%

60%

80%

100%

120%

0

50


Dividends % of Free Cash Flow


Dividends— continued growth in dividends with a 8.6% gross yield1 and outperformance of TSR relative to peers

Interim dividend of 8.3cpu declared (up 1.2%), with 80% imputation, representing a 8.6% gross yield1

2017 TOTAL SHAREHOLDER RETURN

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Genesis Peer Index NZX50

29.2%

25.1%

22.0%

TSR has exceeded market by 7.2% and peer index by 4.1% in past 12 months

2017 closing share price: $2.52

1. Gross yield based on closing share price as at 29 December 2017.

3. Operational and strategic update

60

70

80

90

100

110

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

De

c-1

7

‘00

0’s

Electricity Gas LPG

LPG SALES VOLUMESNPS AND PROMOTER SCORE


Customer segment highlights— growth in LPG, B2B and EOL, with NPS improving

Significant organic growth, new distribution platform in placeRefreshed brand showing early signs of improved NPS

B2B segment momentum growing with 11% volume increase

EOL, 2nd largest tier 2 retailer, > 100,000 customers, up 4% from June 2017

EOL CONNECTIONS

-10%

0%

10%

20%

30%

40%

NPS - Genesis 3 Month Rolling

Promoter - Genesis 3 Month Rolling

TOTAL B2B VOLUME BILLED

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

0

1

2

3

4

5

6

7

8

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

PJ GE-Rolling 12M (KT) EOL-Rolling 12M (KT) ICP count

2,3532,619

0

500

1,000

1,500

2,000

2,500

3,000

Dec-16 Dec-17

GW

h


Brand refresh— new Genesis brand launched focused on leading the way to a new energy future

5% Improvement in brand ‘Top 2 Consideration’, a lead indicator for sales

conversions

68% of New Zealanders believe the brand relaunch makes

Genesis seem more innovative than other

energy providers1

78% of New Zealander’s

believe that the brand relaunch says something

new about Genesis1

2% Improvement in promoter score whilst NPS trending

positive

1. Based on a representative sample of 524 energy decision makers.

2 Customer websites launched

https://genesisenergyhub.co.nz/

http://www.schoolgen.co.nz/

0%

5%

10%

15%

20%

25%

30%

segment 1 segment 2 segment 3 segment 4 segment 5

Low High

Spend per month

Segment share of total market Genesis share of segment


Residential— Continued progress on optimising residential segment for value

GE RESIDENTIAL VALUE MIX1

Genesis continues to target high value customers7% improvement in customer mix in past 12 months

towards higher value customers

GE SEGMENT VALUE MIX1

1. Source: Commissioned research & Genesis analysis.

Low High

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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

Negative Low Medium Low Medium High High


Energy IQ— a significant step forward in achieving our Energy Management vision

Electricity Forecast Home Comparison Energy Mix

Successful launch of Energy IQ developed with customers and now available to 75% of residential customers

• Agile environment delivering energy management solutions at pace

• Three new features delivered, including Electricity Forecast, an exclusive Genesis Energy innovation

• Services developed with customers, first in the Local Energy Project, followed by a dedicated Beta release section in My Account

• Customer feedback positive, with service ratings at 3.9 out of 5, service enhancements underway


Energy Online— 2nd largest tier 2 retailer with >100,000 connections

TIER 2 RETAILERS1

Significant growth in past 12 months, total customers up 5%, gas up 28%, LPG up 176%

EOL GROWTH

106,506100,492

72,57763,411

27,229 23,37220,156 18,882

44,289

No

vaEn

ergy

Ener

gyO

nlin

e

Pu

lse

Po

wer

sho

p

Glo

-Bu

g

Flic

k

Bo

sco

Ele

ctri

cK

iwi

Oth

ers

Electricity Connections Gas Connections LPG Customers

75,000

80,000

85,000

90,000

95,000

100,000

105,000

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

Electricity Gas LPG

1. Source: Electricity Authority, as at January 2018.


LPG— significant organic growth with integration of new distribution business complete

INTEGRATION UPDATE

ORGANIC GROWTH COMPOSITION

Activity Status

Staff • 100% migrated

Systems • Billing and distribution migrated

Customers • 29,000 migrated, remaining receiving Genesis branded bills • Churn in line with forecast• Self-service ordering of bottles up from 60% to 80%

Call Centre • Fully established, 160,000 calls handled p.a. down to 120,000

Brand • 23 depots, 68 vehicles, customer collateral completed• c.100,000 cylinders well advanced

LPG DISTRIBUTION EXPANSION

• Expanding new distribution capability to match existing customer base by investing in new depots and delivery contractors

• Targeted regions contain approx. 20,000+ customers

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

Cu

sto

mer

Nu

mb

ers

Duel LPG only

Existing depots

New delivery locations


Bad debt— 10% improvement in bad debt expected in FY18

6% reduction in DSO2 for Genesis Brand

17 Days

December 2016

16 Days

December 2017

91%

Drastic drop in medically dependent debt compared to December 2016 due to improved internal processes across both brands

69%

Genesis Energy Online

0.30%

0.32%

0.34%

0.36%

0.38%

0.40%

0.42%

0.44%

JAN

-17

FEB

-17

MA

R-1

7

AP

R-1

7

MA

Y-17

JUN

-17

JUL-

17

AU

G-1

7

SEP

-17

OC

T-1

7

NO

V-1

7

DEC

-17

BAD DEBT % TO REVENUE (ROLLING 12 MONTHS) 1

2. Day sales outstanding refers to how many days of sales are owing on average.1. Bad debt expense refers to the net amount of uncollectible debt written off.

138 145 120 109172

265

14129

38

0

50

100

150

200

250

300

350

Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

Tota

l Em

issi

on

s (k

t C

O2

) Genesis Emissions Swaption Emisssions Demand

53.4

96.2

GWAP $MWh

GWAP/TWAP


Generation & Wholesale segment highlights— diverse portfolio creating value in volatile market conditions

Portfolio responding well in volatile market conditions Continuing to find ways to optimise portfolio

OUTAGE MANAGEMENT EMISSIONS SUMMARY

Improved outage planning increasing generation days

14851625

2173

1697

ThermalGeneration

GWh

RenewableGeneration

GWh

+ 80.2%+ 4.5%+ 46.3%

Partly driven by swaption demand

HY17 HY18

1.171.01

1.50

1.01 0.99 1.06 1.02 1.03

1.55

1.03

1.421.04

0.98

1.071.01

1.10

Rankines Unit 5 Unit 6 Tokaanu Rangipo Waikare-moana

Tekapo Portfolio

Historic 2017

0.0%

1.0%

2.0%

3.0%

4.0%


75%

80%

85%

90%

95%

Forc

ed O

uta

ge F

acto

r

(FO

F) %

Equ

ipm

ent

Ava

ilab

ility

Fa

cto

r (E

AF)

%

HY FOF HY EAF

GENERATION & GWAP1

1. GWAP is the Generation Weighted Average Price (or the price received for generation).

-

1

2

3

4

5

6

7

8

9

10

-

20

40

60

80

100

120

140

160

180

200

July August September October November December

Wee

kly

GW

h &

Ave

rage

Sp

ot

Pri

ce (

$/M

Wh Rankines Rankine Swaptions Spot Price GNE Gross Margin*

Unit 5 and Tekapo outages limit gross margin, high Kupe production, Rankines on, and

hydro generation sustained


Wholesale market performance— consistent results in a volatile market

GENERATION & WHOLESALE PERFORMANCE HY18

Swaption demand limits long volume at high price period

Deferred hydro generation realised, low swaption demand and profitable

hedges sold in July

Gross margin maintained in low demand period by buying hedges

rather than running Rankines.

* Gross margin is represented by shape only


Rankine units supporting market during dry months— 90% of Rankine output in 2017 was bought by other retailers & spot customers

-

50

100

150

200

250

Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

GWh

Genesis customers Other retailers/spot customers Swaptions

RANKINE OUTPUT

$0

$20

$40

$60

$80

$100

$120

0

50

100

150

200

250

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47

$/MWhMW

Trading Period

Rankine MW Rangipo MW NI Price• GWAP/TWAP1 ratio lift is driven by plant availability, water values, flexible fuel, spot trading and hedging tactics

• 7% improvement in ratio in past year -c4% due to favourable market conditions, but c3% due to decisions driven by strategic priorities

• Portfolio with no wind or geothermal gives us price responsive plant with control over dispatch of generation

• Each portfolio GWAP/TWAP per cent improvement is worth c$2 million in gross margin improvement per year


Strategic priorities help lift GWAP/TWAP ratios— active trading decisions have driven $5-7 million of extra value in 2017

SECTOR GWAP/TWAP RATIO

PRICE RESPONSIVENESS VS BASE-LOAD PLANT

1.03

1.10

1.06

1.03

0.98

GenesisHistorical

Genesis2017

Mercury2017

Contact2017

Meridian2017

1. GWAP is the Generation Weighted Average Price (or the price received for generation), and TWAP is the Time Weighted Average Price of a particular period.


Kupe segment highlights— record production volumes due to acquired 15% and generation demand

BRENT CRUDE OIL PRICE USD/BBl

$20

$30

$40

$50

$60

$70

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

12 mths to Dec16 12 mths to Dec17

1.5

2.0

2.5

3.0

3.5

4.0

4.5

30.0

40.0

50.0

60.0

70.0

80.0

90.0

FY14 FY15 FY16 FY17 YTD FY18LP

G (

kt/T

J)

Oil

(bb

l/TJ

)

Oil Yield LPG Yield

OIL & LPG YIELDS

GAS PRODUCTION (PJ) & PLANT UTILISATION (%)

3.5 3.5 3.43.8

6.1


GAS SALES VOLUME (PJ)

Gas production for Kupe plant up 8.2% on H1 FY17

Genesis oil sales up 64% to 241 kbbls on H1 FY17, LPG sales up 96% to 22.7 kt

Genesis gas sales up 61% on H1 FY17

Oil spot price up 20% in 12 months to December 2017, average hedge price up 3% to USD59/bbl

23.0 24.3 24.0 24.3

13.2

75%

80%

85%

90%

95%

100%

-

5.00

10.00

15.00

20.00

25.00

30.00

FY14 FY15 FY16 FY17 YTD FY18

Environmental and social responsibility — making a tangible difference for our people, our community and our shared natural resources


Gender mix

%male

%female

of senior management including Directors are female

%

Minding the Gap - gender pay gap has dropped from

Commitment to being an inclusive and diverse employer

.%

.%

provided with real time updates of their school’s solar electricity generation

,

More than

through Genesis’ partnership with curtain banks in Auckland, Wellington and Christchurch

NZ families assisted in HY18

participated in Graeme Dingle Foundation Kiwi-can programmes in the calendar year ending December

students at 12 schools

supported in Whanganui, the Coromandel peninsula, Marlborough and Canterbury through an agreement with Green Growth Forests Ltd that serves to diversify Genesis’ carbon offset investments, whilst supporting the regeneration of native forest in New Zealand

hectares of forest

Whio Bootcamp game was played

meaning more people are learning about whio and why they are an indicator of healthy water

times

Genesis people Identify with more than

,

ethnicities

,

,

Iwi relationships in placealongside several hapu/runanga relationships within the rohe of the Company’s generation assets and offices, all of which are highly valued by Genesis.

to

children at92 School-gen schools

A coal free electricity future— Genesis believes in a coal free future


At Genesis we are taking steps to ensure New Zealand can move to an even more renewable future – we believe in a coal-free future for electricity generation in New Zealand.

4. Outlook

• To provide capital support for Genesis’ growth strategy, and provide a cost effective way for shareholders to reinvest in Genesis’ growth strategy

• A discount of 2.5% will apply to the price, this may be amended for future dividends

• Shareholders have the option of full, partial or no participation. If a shareholder elects to participate they will remain in the plan at the same participation level until they elect to terminate or amend their participation rate

• The New Zealand government has committed to participate to the extent required to retain its 51% holding

• Genesis has the right to terminate or suspend the plan at any time

• Details of the plan will be sent to shareholders in early March


Dividend reinvestment plan— to be introduced for the HY18 dividend to support growth

DRP Details

Discount 2.5%

Dividend amount 8.3 cpu

Price The volume weighted average sale price over a period of five Business Days starting on the “Ex Date”, less

the discount

Key Dates

Ex dividend date 5 April 2018

Final date to elect to participate 6 April 2018

Record date 6 April 2018

Payment and share issue date 20 April 2016


Market fundamentals outlook— continue to be supportive

• Electricity demand growth of 1% in 2017 with EV penetration accelerating

• Total NZ gas demand down due to industrial however retail growth continues with connections up over 15,500 in past five years

• LPG demand growth remains strong, with 6% growth in market over last 12 months

Customer

Wholesale

Kupe

• Forward electricity prices more reflective of tightening supply/demand dynamics. Year 2 price is up $4MWh (5%) on prior comparable period

• Tiwai Point Aluminum Smelter economics stable with a more positive outlook

• Forward carbon prices up to $24 per tonne in 2020

• Brent crude up 20% in 2017 with consensus outlook for 2018 in the range of US$59 to $62/bbl

• LPG supply/demand balance tightening with a possible move to net import early 2020’s


FY18 outlook— guidance refined to $350 to $360 million

• A positive start to FY18, more challenging conditions in the second half

– $12 million FY18 impact of Tekapo B outage (largely weighted to second half), some benefit to be realised in FY19

– First half had significant North Island inflows

– Kupe production contracts favour first half result

– Increase in emissions costs in line with change in ETS obligations

• FY18 EBITDAF updated guidance range of $350 to $360 million subject to hydrological conditions, any material events, one-off expenses or other unforeseeable circumstances

• FY18 capital expenditure guidance is up to $75 million including an early Tekapo B G3 upgrade, bringing forward third party LPG distributor exit with associated depot builds and Phase 2 expenditure at Kupe

Appendices

Balance Sheet HY18($m)

FY17($m)

Variance

Cash and Cash Equivalents 40.6 27.8

Other Current Assets 309.5 344.5

Non-Current Assets 3,770.3 3,847.0

Total Assets 4,120.4 4,219.3 -2.3%

Total Borrowings 1,229.1 1,259.8

Other Liabilities 978.4 977.6

Total Equity 1,912.9 1,981.9 -3.5%

Adjusted Net Debt 1,163.3 1,211.5 -4.0%

Gearing 39.1% 38.9%

EBITDAF Interest Cover 6.9x 6.6x

Net Debt/EBITDAF 3.0x 3.3x

Income Statement HY18($m)

HY17($m)

Variance

Revenue 1,214.5 965.3 +25.8%

Total Operating Expenses (1,015.0) (809.6) +25.4%

EBITDAF 199.5 155.7 +28.1%

Depreciation, Depletion & Amortisation (103.5) (73.6)

Impairment of Non-Current Assets - (0.8)

Fair Value Change (19.7) 1.9

Other Gains (Losses) 0.9 (1.6)

Earnings Before Interest & Tax 77.2 81.6 -5.4%

Interest (37.4) (28.7)

Tax (11.4) (15.5)

Net Profit After Tax 28.4 37.4 -24.0%

Earnings Per Share (cps) 2.84 3.74 -24.1%

Stay in Business Capital Expenditure 21.6 16.8 +28.6%

Free Cash Flow 129.1 94.6 +36.5%

Dividends Per Share (cps) 8.3 8.2 +1.2%

Dividends Declared as a % of FCF 64.3% 86.7%

Cash Flow Summary HY18($m)

HY17($m)

Variance($m)

Net Operating Cash Flow 198.4 126.5

Net Investing Cash Flow (30.7) (29.8)

Net Financing Cash Flow (155.4) 78.1

Net Increase (Decrease) in Cash 12.8 174.8 -92.7%


Financial statements

Income Statement HY18($m)

HY17($m)

EBITDAF 199.5 155.7

Depreciation, Depletion & Amortisation (103.5) (73.6)

Impairment of Non-Current Assets - (0.8)

Change in Fair Value of Financial Instruments

(19.7) 1.9

Other Gains (Losses) 0.9 (1.6)

Profit Before Net Finance Expense and Income Tax

77.2 81.6

Finance Revenue 0.4 0.9

Finance Expense (37.8) (29.6)

Profit Before Income Tax 39.8 52.9

Income Tax Expense (11.4) (15.5)

Net Profit After Tax 28.4 37.4

• EBITDAF is a non-GAAP item but is used as a key metric by management to monitor performance at a business segment and group level

• Genesis Energy believes that reporting EBITDAF assists stakeholders and investors in understanding the Company’s operational performance

• In HY18 EBITDAF was up 28% on HY17

• HY17 Net Profit After Tax is down 24%, materially affected by change in fair value of financial instruments


Reconciliation of EBITDAF to NPAT


Underlying earnings

Underlying Earnings HY18($m)

HY17($m)

Net Profit After Tax 28.4 37.4

Business acquisition costs - 0.8

Change in fair value of financial instruments

19.7 (1.9)

Impairment of non-current assets - 0.8

Underlying Net Profit Before Tax 48.1 37.1

Tax expense on adjustments (5.5) 0.3

Underlying Earnings 42.6 37.4

• Underlying Earnings is a non-GAAP item but is used as a key metric by management to assess underlying performance by adjusting for items outside managements control or items that relate to strategic rather than operational actions

• Genesis Energy believes that reporting underlying earnings assists stakeholders and investors in understanding the Company’s operational performance

• In HY18 underlying earnings were up 14% on HY17

Debt Information HY18($m)

FY17($m)

Variance ($m)

Total Debt $ 1,229.1 1,259.8

Cash and Cash Equivalents $ 40.6 27.8

Headline Net Debt $ 1,188.5 1,232.0 -3.5%

USPP FX and FV Adjustments $ 25.2 20.5

Adjusted Net Debt1 $ 1,163.3 1,211.5 -4.0%

Headline Gearing 39.1% 38.9% +0.2ppts

Adjusted Gearing 38.6% 38.5% +0.1ppts

Covenant Gearing 32.3% 32.3% Flat

Net Debt/EBITDAF2 3.0x 3.3x

Interest Cover 6.9x 6.6x

Average Interest Rate 5.8% 6.0%

Average Debt Tenure 11.0 yrs 11.4 yrs

1. Net debt has been adjusted for foreign currency translation and fair value movements related to USD denominated borrowings which have been fully hedged with cross currency swaps

2. EBITDAF is based on the midpoint of the guidance range provided for FY18

GENESIS ENERGY DEBT PROFILE


Debt information

$0

$50

$100

$150

$200

$250

$300

FY2018

FY2019

FY2020

FY2021

FY2022

FY2023

FY2024

FY2025

FY2026

FY2027

FY2042

FY2047

$m

Retailable Bonds Wholesale Domestic Drawn Bank

Undrawn Bank Capital Bonds USPP

Customer Key Information HY18 HY17 Variance

EBITDAF ($ millions) 57.2 62.7 (8.8%)

Netback $80.80 $82.14 (1.6%)

Electricity Only Customers 342,500 NA

Gas Only Customers 18,111 NA

LPG Only Customers 32,991 NA

Customers with > 1 Fuel 109,734 NA

Total Customers 503,336 NA

Total Electricity and Gas ICP’s 607,279 621,917 (2.4%)

Volume Weighted Average Electricity Selling Price – Resi ($/MWh)

248.52 247.66 +0.3%

Volume Weighted Average Electricity Selling Price – SME ($/MWh)

216.03 213.55 +1.2%

Volume Weighted Average Electricity Selling Price – C&I ($/MWh)

120.45 117.12 +2.8%

Volume Weighted Average Gas Selling Price ($/GJ)

25.59 25.43 +0.6%

Customer Electricity Sales (GWh) 3,008 2,916 +3.3%

Customer Gas Sales (PJ) 4.0 4.3 (7.1%)

Customer LPG Sales (tonnes) 18,251 2,570 +610.2%

Wholesale Key Information HY18 HY17 Variance

EBITDAF ($ millions) 106.4 82.8 +28.5%

Renewable Generation (GWh) 1,697 1,625 +4.5%

Thermal Generation (GWh) 2,173 1,485 +46.3%

Total Generation (GWh) 3,870 3,110 +24.5%

GWAP ($/MWh) 96.16 53.36 +80.2%

LWAP/GWAP Ratio 103% 100% +3 ppts

Weighted Average Fuel Cost ($/MWh) 35.72 30.04 +16.8%

Coal/Gas Mix (Rankines only) 63/27 30/70

Kupe Key Information HY18 HY17 Variance

EBITDAF ($m) 55.7 31.9 +74.6%

Gas Sales (PJ) 6.1 3.8 +60.5%

Oil Production (kbbl) 277.8 195.8 +41.9%

Oil Sales (kbbl) 241.0 146.8 +64.2%

LPG Sales (PJ) 22.7 11.5 +96.3%

Average Brent Crude Oil (USD/bbl) 57 48 +19.1%

Average Hedged Price (USD/bbl) 59 57 +3.3%


Operational highlights

hy18 result presentation...31 december 2016 31 december 2017 190 290 425 193 100 bank debt wholesale...

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