Transcript Slide 1

Michael Walsh
Group Finance Director, NTR plc
Presentation to ICAI Business Members
23 February 2007
Contents

Background

The Finance Function

NTR Strategic Evolution

Summary

Q&A
Personal Background
 BComm, ACA
 1978 – 1986 PricewaterhouseCoopers
Dublin and London
 1986 – 1989 Contiki Travel Holdings
London, Sydney, Hong Kong
 1989 – 1992 Wickes Plc
London
 1993 – 2002 Musgrave Group Plc
Cork
 2003 – date NTR plc
Dublin
The Finance Function
“From Accounting…
…to Strategic Financial Management”
The “F” Words
“The Focus of the Finance Function
must be Firmly Fixed on the Future”
Levels of Decision Making
 Strategic
“What to Do?”
 Tactical
“How to Do It?”
 Operational
“Doing It!”
Decision Hierarchy
Strategic
Tactical
Operational
NTR – Strategic Evolution
Pre 1999
1999 - 2002
2003 - 2006
Toll Road
Pioneer
Irish
Diversification
International
Development
Founded
1978
2002 UK
1999
2004 US
1984
1999
1990
2003 UK
2001
2006
Germany
2002
2006 – Strategic Cohesion Stretched
Total
Revenue*
€468m
Energy
Waste
Roads
51.0%
Telecoms
63.2%
88.5%
100.0%
(UK)
100.0%
87.0%
100.0%
38.5%
* 15 month period ended 31 March 2006
33.3%
Market
Capitalisation
€1.536bn
NTR Corporate Strategy
Identified three macro factors shaping
structural growth opportunities:
Security of
Energy Supply
Climate Change
Resource Depletion
Renewable Energy and
Waste Management
Climate Change – Tangible Impacts
1875
2004
 The Pasterze glacier in Austria has been retreating by an annual
average of 15 metres since 1986
 The rate of warming in the Arctic over the last 20 years is eight times
the rate of warming over the previous 100 years
Source: Gary Braasch, Worldview of Global Warming.Org; NASA, October 2003
Energy Security – EU Natural Gas
2010
Norway
Great Britain
Russia
3.000 km
Netherlands
2.000 km
1.000 km
Kazhaksta
n
Ukraine
Azerbaijan
Algeria
Libya
Egypt
Source: Gerhard Schroeder, Chancellor of Germany’s presentation to Vladimir Putin, 2004
Energy Security – EU Natural Gas
2025
Russia
3.000 km
2.000 km
1.000 km
Turkeynistan
Source: Gerhard Schroeder, Chancellor of Germany’s presentation to Vladimir Putin, 2004
Resource Depletion – Oil and Gas
50
Production, Gboe/a
Non-con Gas
40
30
Gas
NGLs
Polar Oil
Deep Water
Heavy
20
Regular
10
0
1930
1950
Source: ASPO, www.peakoil.net
1970
1990
2010
2030
2050
Global Investment in Renewables
Estimated Global Investment in
Clean Energy, 2004 - 2006
$bn
$m
80
70.9
70
11,349
12,000
10,000
60
8,060
49.6
50
8,000
6,000
40
30
Estimated Global VC/PE, 2001 - 2006
27.5
3,300
4,000
20
2,000
10
1,071
1,394
2002
2003
762
0
0
2004
Source: New Energy Finance
2005
2006
2001
Source: New Energy Finance
2004
2005
2006
Growth Platform
Climate
Change
Security of
Energy Supply
Resource
Depletion
Renewable Energy and
Sustainable Waste Management
IRL
UK
US / Canada
Other
IRL
Germany
US
Other
IRL
UK
US
c.€3.0bn in new asset investment anticipated over 3 years
Wind Energy
Wind Energy
 A leading renewable wind energy company in Europe and US
 Generation: 177 MW installed generating capacity
 Construction: 411 MW in construction
 Development: c.10,000 MW in development pipeline
 Turbine supply secured for 2007 build programme and on-going 2008 /
2009 development
 Circa 1,750 MW installed capacity forecast by March 2009
 Successfully closed €310m equity raising in August 2006 (post money
valuation €860m; current Airtricity “grey market” valuation of €1.0bn)
Note: MW references above not adjusted for minority interests
Waste Management
Waste Management
Leading integrated private sector waste operator in Ireland
 4 operating landfills (>650k tonnes per annum)
 13 collection and transfer stations and materials recycling facilities
UK recycling led waste management solution provider
 Servicing c.20,000 waste management customer locations weekly
 Investing to develop a national recycling “footprint”
Actively pursuing US market entry
 Recycling led strategy
 Management team in place; extensive acquisition pipeline
Bioenergy
Biofuels
Biodiesel
 Two biodiesel plants commissioned in Germany (140k tonnes per annum)
 Additional European bio-diesel opportunities under evaluation - expected
capacity c.500-750k tonnes per annum within 3 years
Bioethanol
 Joint Venture with the Virgin Group announced January 2007
 Initial investments in two 100m gallon (330k tonnes p.a.) ethanol plants in
Indiana and Tennessee – c.$185m per plant
 Pursuing additional opportunities
 Strategic players looked upon favourably in the market
 Focus is on securing well located, highly competitive plants
Roads / Telecom
Roads
 Engagement with the NRA on the West Link on-going
 Celtic Roads Group (CRG) actively bidding for new Irish roads PPP
projects
Irish Broadband
 c.40,000 customers at 31 December 2006, growth momentum
Investment & Financing
Illustrative Split of Anticipated
Investment
 c.€3.0bn+ investment
anticipated over next 3 years
Waste
Mgt
20%
Wind
Energy
50%
Sources of funding:
 Project Debt
Bioenergy
30%
 Subsidiary Debt
 Subsidiary Equity
 Equity
Significant investment plan over next phase of development
NTR plc
Unlisted plc
 Incorporated in 1982
 plc Articles
 Compliant with 2003 Combined Code
 Settlement through CREST
 Share price data available at www.ntr.ie
Shares trade on “grey market” – current market capitalisation of c.€1.5bn
Researched and traded by Dublin stockbrokers (Davy, NCB, Goodbody)
Key shareholders: Roche Family (c.43%); One51 (c.26%); Standard Life (c.6%)
€170m equity raising September 2006; priced at €5.30 per share
Company committed to supporting ongoing liquidity for shareholders
Market Capitalisation
€6.50
Market Cap
€3.35
€2.41
€0.97
€1.25
€1.50
€182m
€235m
€285m
€462m
€652m
€1,479m
2001
2002
2003
2004
2005
Current
Market Cap
Share Price
Based on “grey market” trading; NTR completed a €170m equity fundraising in September 2006 at a price per share of €5.30
Summary
FD must be firmly focussed on the future
Emphasis must be strategic – “what to do?”
Finance CAN and MUST be at the heart of
strategy development
Q&A