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2014 Investor Day – Transalta Corp.

Transalta Corp. · Nov 14, 2014 · 42 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 2014 Investor Day – Transalta Corp. – slide 1
    2014 Investor Day Positioned for Growth November 2014 1
  2. 2014 Investor Day – Transalta Corp. – slide 2
    Dawn Farrell President & CEO Overview 3
  3. 2014 Investor Day – Transalta Corp. – slide 3
    Our Platform Coal Canadas largest publicly traded power 4,930 MW generator & marketer with over 100 years of operating experience Gas Diversified asset base with 64 facilities 1,695 MW strategically positioned in Canada, Western…
  4. 2014 Investor Day – Transalta Corp. – slide 4
    Short-term Plan Continued focus on operational excellence Deliver committed growth of 650 million Funding plan in place to improve balance sheet and finance South Hedland Positioning TransAlta for roll-off of Sundance A PPA…
  5. 2014 Investor Day – Transalta Corp. – slide 5
    Medium-term Plan Leverage our competitive strengths for serving large commercial, industrial and utility scale customers Deliver reliable, low cost, environmentally-sensitive products to our customers Provide generation directly…
  6. 2014 Investor Day – Transalta Corp. – slide 6
    Presenters Wayne Collins Advancing our strategy to position our Executive VP Coal and Mining Operations fleet for a post-PPA world Rob Schaefer Optimizing the value of our assets and Executive VP Trading expanding our customer…
  7. 2014 Investor Day – Transalta Corp. – slide 7
    Investment Proposition Diversified and highly contracted portfolio Significant near and long-term EBITDA growth Well positioned for growth in markets with strong fundamentals Access to low cost capital for funding growth…
  8. 2014 Investor Day – Transalta Corp. – slide 8
    Wayne Collins EVP Coal and Mining Operations Alberta Coal Operations 9
  9. 2014 Investor Day – Transalta Corp. – slide 9
    Driving Performance at Alberta Coal Stabilised mining and coal fired power plant operations Aging plant risks understood and being pro-actively managed Improved Availability Improved competitiveness reduction of costs 10
  10. 2014 Investor Day – Transalta Corp. – slide 10
    Alberta Operations Fundamental Assessment People Strong capability Risks understood Systems and Processes Mature systems underpin consistent, predictable performance Competitiveness Opportunities to improve turnaround…
  11. 2014 Investor Day – Transalta Corp. – slide 11
    Predictable Performance Historical investment supports future Alberta Coal Availability performance (Operated Units) Operations Diagnostic Centre 90% Real time identification of departures from expected performance 88% 86%…
  12. 2014 Investor Day – Transalta Corp. – slide 12
    Aging Plant Risk Understood and Being Managed Generators K1 / K2 rewinds completed Condition monitoring in place Sun 3-6 spare rotor available (early 2015) Sun 3 Stator replacement (early 2015) Boiler Corrosion Fatigue Sun 1 and 2…
  13. 2014 Investor Day – Transalta Corp. – slide 13
    New 3-Year Major Maintenance Contract with Alstom Substantial improvements in cost and duration starting in 2015 Average 15% cost reduction / turnaround Average 5 days duration reduction / year Total cost reduction over 3 years 34…
  14. 2014 Investor Day – Transalta Corp. – slide 14
    Disciplined Operating Cost Management Operating Costs excluding Fuel & Environmental costs Operational cost reduction M initiatives 160 Critical review of work 140 30M EBITDA Rationalize procurement across 120 mine and power…
  15. 2014 Investor Day – Transalta Corp. – slide 15
    Sunhills Mining Fuel Costs Stabilized Alberta Coal Costs /tonne Coal cost / tonne improved in 27 2014 and forecast to be sustained 26 Costs managed despite increases in mining input costs 25 Future cost outcomes leveraged off…
  16. 2014 Investor Day – Transalta Corp. – slide 16
    Rob Schaefer EVP Trading and Marketing Alberta Market 17
  17. 2014 Investor Day – Transalta Corp. – slide 17
    Well Positioned in the Best Market in North America Insulated from near-term low prices with strong hedging program Growing customer business with flexibility to respond to changing customer needs Developed and maintained a broad…
  18. 2014 Investor Day – Transalta Corp. – slide 18
    Short-term Alberta Market Conditions Supply has outpaced load growth putting pressure on prices 2014 vs. 2013 Alberta Power Prices MW /MWh 1,400 140 1,200 120 1,000 100 800 80 600 60 400 40 200 20 - - Q1 Q2 Q3 Q1 Q2…
  19. 2014 Investor Day – Transalta Corp. – slide 19
    Hedges Mitigating Impact of Weaker Power Prices Total portfolio contractedness Alberta MW 7,000 Well hedged through 2015 90% 87% 81% 77% 6,000 Hedge levels assume normal wind and hydro volatility 5,000 Positioned for upside…
  20. 2014 Investor Day – Transalta Corp. – slide 20
    Alberta is One of the Strongest Markets in North America Market pays for investment Strong load growth drives supply /MWh Historical Prices Alberta Reserve Margin 100 80 30% 25% 60 Implied capacity 20% payment 15% 40 10%…
  21. 2014 Investor Day – Transalta Corp. – slide 21
    Alberta Requires Significant New Investment Longer-term Projected load growth and capacity replacement Oil and gas sector remains a MW major economic driver even 10,000 with weaker world oil prices 9,000 3% average historical…
  22. 2014 Investor Day – Transalta Corp. – slide 22
    Marketing Platform Positioned for PPA Roll-off TransAlta customer growth Low-cost asset base MW enables competitive 3,000 product offerings 2,500 Marketing platform balances our supply Large Industrial portfolio with customer…
  23. 2014 Investor Day – Transalta Corp. – slide 23
    Low Cost Generation Optionality Serves Customers /MWh Marginal Costs Customer Representation 60 50 40 TransAltas Average 30 Marginal Cost 20 Providing our 10 customers with a competitive and - reliable offering Hydro Wind…
  24. 2014 Investor Day – Transalta Corp. – slide 24
    Brett Gellner Chief Investment Officer Growth 25
  25. 2014 Investor Day – Transalta Corp. – slide 25
    Positioned for Growth Strong track record of growth 4.7 Billion invested last ten years Significant growth underway 650 Million being invested generating an additional 90 Million of EBITDA by 2017 Significant growth opportunities…
  26. 2014 Investor Day – Transalta Corp. – slide 26
    Proven Track Record of Growth Growth through a combination of greenfield and acquisitions1 M 2,000 1,800 1,600 650M in 1,400 committed 1,200 capital 1,000 90M in 800 incremental 600 EBITDA 400 200 - Greenfield…
  27. 2014 Investor Day – Transalta Corp. – slide 27
    Initiatives Offsetting Lower Power Prices Growth and other proactive initiatives have offset declines in PacNW power prices M EBITDA (M): 2011 to 2014 Est 1,200 1,000 - Growth & Other initiatives 800 - Impact of lower power…
  28. 2014 Investor Day – Transalta Corp. – slide 28
    Significant Near to Medium-term EBITDA Growth 190 million incremental EBITDA by 2018 M 1,250 1,200 1,150 1,100 1,050 1,000 950 900 2014E 2017E 2018E Existing Business Australia Sundance A Committed growth &…
  29. 2014 Investor Day – Transalta Corp. – slide 29
    Solomon Power Station 128 MW dual fuel located in Western Australia Acquired in 2012 under PPA for 21 years EBITDA USD40 million Cost: USD315 million Project Description Output is fully contracted for 21 years with Fortescue…
  30. 2014 Investor Day – Transalta Corp. – slide 30
    Fortescue River Gas Pipeline (FRGP) 270km 16-inch diameter pipeline located in Western Australia Under Construction - COD Q1, 2015 under long-term contract for 21 years EBITDA1 AUD12 million Capital Cost: AUD80 million Expansion…
  31. 2014 Investor Day – Transalta Corp. – slide 31
    South Hedland Generating Station 150 MW gas fired located in Western Australia Under Construction - COD Q1, 2017 under long-term contract for 25 years EBITDA1 AUD80 million Capital Cost: AUD570 million Expansion Opportunities…
  32. 2014 Investor Day – Transalta Corp. – slide 32
    Potential Investment Opportunities Gas-fired Gas-fired well positioned to meet 3,000 MW + of additional generation required in Alberta by 2020 Sundance 7, low cost option in our portfolio Saskatchewan and B.C. require additional…
  33. 2014 Investor Day – Transalta Corp. – slide 33
    Competitive Strengths Significant experience operating power generation assets for industrial/utility customers Ability to take on development and construction risk Positioned to manage merchant risk and add incremental value to the…
  34. 2014 Investor Day – Transalta Corp. – slide 34
    Donald Tremblay Chief Financial Officer Funding Plan 35
  35. 2014 Investor Day – Transalta Corp. – slide 35
    Strategic Initiatives and Priorities Continue to strengthen our balance sheet Prepare our balance sheet for post Alberta PPA period Fund construction of South Hedland Use TransAlta Renewables as a competitive source of…
  36. 2014 Investor Day – Transalta Corp. – slide 36
    Recent Accomplishments 500 million reduction in net M Debt Maturity Schedule debt since YE 2013 800 Rating agencies have all re- affirmed our investment grade in 2014 600 As at Sept 30th, 2014, 1.6 billion in liquidity including…
  37. 2014 Investor Day – Transalta Corp. – slide 37
    Strengthening the Balance Sheet Deliver FFO / Debt target in 2015 Financing options / flexibility using TransAlta Renewables and out sources of funding Ability to meet all obligations including sustaining dividend and investment…
  38. 2014 Investor Day – Transalta Corp. – slide 38
    Significant Financial Capacity TransAlta will use RNW as an efficient way to fund South Hedland and other growth opportunities at TransAlta Committed Funding Requirements (2015 - 2017) millions Low High Debt Reductions (300) -…
  39. 2014 Investor Day – Transalta Corp. – slide 39
    Strategic Flexibility Leveraging TransAlta Renewables Sponsored vehicle to own long-term contracted assets TransAlta Public Access lower cost funding and enhance returns for contracted assets Release capital to TransAlta as…
  40. 2014 Investor Day – Transalta Corp. – slide 40
    Significant Inventory of Drop-Down Opportunities Alberta Hydro 13 units, representing 90% of Albertas hydro 60 - 120 mm EBITDA Six power stations with long-term contracts Australia Business 270 km gas pipeline 100 mm EBITDA…
  41. 2014 Investor Day – Transalta Corp. – slide 41
    Long-term Upside Potential Potential incremental annual Significant potential upside EBITDA from Alberta PPAfacilities once the Alberta legislated 1,000 PPAs expire Incremental EBITDA M Alberta prices have 800 averaged…
  42. 2014 Investor Day – Transalta Corp. – slide 42
    2015 Outlook 2015 cashflow and capital guidance to be provided in February on Q4 call Forward prices for 2015 in Alberta are in range of 50/MWh, PacNW 35/MWh Sustaining capital expenditures in line with 2014 Fleet availability…

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