Infratil Limited

Kia ora tatou. I'm Jason Boyes, the Chief Executive of Infratil, and welcome to Infratil's annual results presentation for the year-ended 31 March 2026. I'm here with our CFO, Andy Carroll. Morning, Andy. Morning. And together, we're going to run through the annual results presentation that was released to the ASX and the NZX this morning. You can also find our annual report and a whole bunch of other supporting information in that release. So without further ado... This is an overview of the company that all of you will hopefully be familiar with. We're very proud of the strong track record that we're showing on the right-hand side there. Very strong growth over many periods and remarkable over such a long period since inception. If we then switch to having a quick look at the portfolio, this is a snapshot of the portfolio as at 31 March. We had some farewells and a welcome during the year. During the year, we sold Retire Australia, Infantile Property, and 40 South, our Towers business. We also sold Manawa Energy into Contact Energy. As we progressed our median term target that we described last year of divesting up to $1 billion of assets over the median term, one welcomes the Anytime Radiology, which was established during the year, our Tally Radiology business that we spun out of our ANZ Radiology businesses. I'll talk about that a little bit more later on. So quickly to the highlights. We delivered growth in what were very volatile markets. I'll let Andy talk to the numbers in a second, but quickly focus on the two main drivers of growth, CDC and Long Road. Both have their growth being accelerated by the massive build-out of AI infrastructure globally. CDC is now a global scale data center operator with more than a gigawatt of contracted capacity and a strong growth outlook. That's underpinned by its new Moody's BAA2 public credit rating, which shows what a differentiated platform CDC continues to be for us. Long Road Energy is also accelerating, delivering strong earnings growth during the year. and with a strong growth outlook as well that I'll talk about in a second. Our largest New Zealand businesses were resilient with Wellington Airport and 1NZ delivering their guidance and positive EBITDAF growth despite challenging market conditions. It wasn't all rosy though with Gurren Energy and Galileo and renewable energy development having a difficult year and our New Zealand radiology business dealing with a weak local economy. I'll talk about both of those in a second. We're on track to achieve that $1 billion divestment target I talked about with 600 sold and the sales process underway for QSCAN. And we also announced a credit rating, Standard & Poor's BBB+, which transforms our access to debt markets, which is perfect timing given the strong growth we're seeing from CBC and Long Road in particular. Lastly, strong ESG performance across the portfolio is translating into higher ratings, as we've put out here, which exposes us to more ESG-oriented investors around the world. Over to you, Andy, on the financial highlights.

Thanks, Jason. Yes, a couple of quick call-outs, which I'll touch on in a little more detail later on. So 989 million proportionate operational EBITDAFs, so almost a billion in the top half of guidance. $2.7 billion of proportionate capex. You know, we've talked about that in the past, that investment driving future earnings growth. And then in terms of total asset value, that's up 13%. There's a few other stats there, but I'll touch on those a little later. Thanks, Jason.

Thanks, Andy. Back to you later. And let's go through some of the portfolio companies. And, of course, starting with the big one, CDC. A strong operating performance from CBC achieving their guidance, a nearly 20% uplift in EBITDAF during the year. Large uplifts in built operating capacity with 350 of the 450 megawatts that were under construction at the start of the year completing construction. CapEx was up. $400 million to $2.1 billion completing those builds, but also getting started on further builds with 572 megawatts under construction at year end. The big news, of course, was the 555 megawatt customer contract announced on 5 May, just after the 31 March cutoff, but important to mention, lifting our contracted capacity to over a gigawatt as we've got here. together with existing contracts that are expected to come billing as construction completes, as shown in this graph on the right-hand side, which is the same as the one we showed on the fifth. CDC has good funding flexibility to deliver that growth and more, as CDC's CFO outlined on the call we had then. This is supported by the credit rating I mentioned before, which gives it access to multiple debt capital markets at a much lower cost than if it weren't rated correctly. The first step in that program is the hybrid AMTN wholesale bond program or bond issuance announced by CDC yesterday. Looking ahead, the FY27 EBITDAF guidance is that big jump we showed in March and again on the 5th to $680 to $720 million. This exceeds our guidance last year that we were doubling the $330 million delivered in FY25. We're maintaining that $1 billion EBITDA for FY28F that we talked about in May, more than doubling again last year's earnings over the next two years. And we're on track to double again to $2 billion in FY30 once the contracted capacity is fully deployed over FY29. So remarkable growth, really, doubling earnings every two years, and that all contracted already. Lots of work to do, but the contracted side is in good shape. CAPEX guidance is understandably increasing also, double last year's $2.1 billion at the top end, excluding land because that is lumpy. And lastly, but importantly, we see further growth potential from here with unprecedented demand continuing for further small, medium and large scale deployments that have the potential to accelerate the business even further towards the back end of this decade and beyond. The team are currently... Contract discussions are progressing well for more signings, I should say, in the first half of this financial year and beyond as well. And finally, the team are actively progressing a gigawatt or more of extensions to their growth pipeline, which as at 31 March was, say, a bit over a gigawatt, which you can see on the next slide here as well, just on the right-hand side. That's unchanged from what we showed in May. CDC is well positioned to continue to capture... outsize growth as what we see and what we've been saying for some time is quite a differentiated platform with strong access to funding, driving off strong contracted earnings and premium customer mix with capability and pipeline enabling it to scale efficiently and continue to deliver strong returns for Infratel as the shareholder. Moving then to Longroad. Probably the most new news in this section of growth businesses anyway. It also delivered its guidance, lifting EBITDA for giant 170% over the year to this 121 million we are showing here. But importantly, future growth is strong too with another two gigawatts under construction and coming online over FY27 and 28. and a further 1.7 gigawatts expected to commence construction this year so those two together 3.7 gigawatts will more than double the capacity in operation at the beginning of this year 3.5 gigawatts all put into construction over the next last year in this year so another business looking to double every two years if you like because its growth is so strong we also report and track The stat we're talking about on the right-hand side, OPCO run rate EBITDAF, which is a little like CBC's contracted earnings or EBITDAF that I just talked about, that $2 billion I just talked about for them. So how we do that is shown on the right-hand side. It's worth just stepping through it. At the end of FY26, those earnings were $367 million in line with the guidance we set at the start of the year as well. So what that does is we take reported EBITDAF and then we add back the contracted annualised earnings of the projects that are under construction in that year, which you're seeing that 144 on the right. And we also add back the development expenses, which are really investment in new projects, and the corporate overheads to give a view of value of just the operating projects or what we call the OPCO, the operating company. If you wanted to convert that into a valuation, we see listed comps trading in the kind of 13 to 15 times that number or that number looking a year ahead because the business is growing so quickly. And if you use about 60% gearing or eight times EBITDAF for leverage, remembering the revenues contracted for 30 years or more with minimal maintenance capex, that should give you a good sense of the equity value pretty close to the independent valuation that we're putting out there. Lastly, you might recall that law changes in the US last year meant that tax credits for solar projects would expire by 2030, but your projects had to be qualified by later this year, actually. We're confirming on the bottom of this slide that we've qualified more than six gigawatts of projects now to support our development targets out to 2030. And remember that battery storage credits, which apply to half the capex effectively of the projects these days, remain accessible through to 2037, so a much longer runway on that support from the federal government under the current settings. These tax credits, what they do is they effectively reduce US renewable energy power prices, but renewable energy is still competitive without them. So we believe you can look through them for a lot of purposes. The expiry, though, of the solar tax credits should mean a big build program out to 2030 as developers and power buyers look to take advantage of them before they expire. So now, looking ahead. The biggest news here is that Longroad has materially increased its target development cadence for the next four years from 1.5 gigawatts per annum to 2 gigawatts per annum on average, a 33% increase. That's supported by what we've talked about for a long time now, the robust demand for electricity, supported by AI and broader electrification and decarbonisation still going on in the US. It's also supported by the good work the team has done, tax qualifying that more than six gigawatts of projects I talked about. And also new news today, a super large project Long Road acquired in April. It's a 2.8 gigawatt solar and storage project, so nearly as big as our entire operating fleet today in one project, and importantly has a PPA in place. That project on its own would deliver, I should say, the uptick in development cadence we have guided to. So there's potential to grow even faster, I think. The other key things to know about this project are it's expected to come online calendar year 28-29, so towards the back end of the decade. And also that is contingent on two regulatory approvals that Long Road is confident can be obtained. Based on similar projects that have recently been approved and the clear need for the power, we expect to be able to update on progress on those approvals over the year. What does that all mean? If you took the average earnings from our projects, that uptick sees on the right-hand side that graph, long road targeting $1 billion of OPCO run rate EBITDA, that run rate earnings measure I mentioned earlier, by the end of the decade. Double what those earnings will be at the end of this year, that doubling in two years that I've mentioned. I've also talked to multiples. You could use those to backsell the equity value of what I just talked about. Or another way, we've guided in the past to about $300 million US of net present value value creation for every one and a half gigawatts of projects, because that's what we were trying to do every year. So $300 million a year. And I'd say that's conservative. If you lift that by 33%, the number of gigawatts you're delivering, then... the NPV is bigger as well. So another $100 million of NPV creation per annum is kind of what we're talking about. Or by the same metric, if you looked at our new project, that's kind of two years of development, or $600 million US of NPV, just to give you a rough sense of it. A significant acceleration, I would say, compared to where we were before. But that's not all. At the bottom here, we're revealing that Long Road has also been actively progressing its own data centre strategy to develop, at the moment, four-plus gigawatts of grid-connected data centres co-located with Long Road's solar and storage projects. We can develop the powered shell to have more value creation, either alone or with partners, or simply sell that land as powered land to data centre developers. Either way, you're able to accelerate Long Road's own core energy development pipeline, developing the renewable energy for those facilities. We're not ready to value this pipeline. It's not an independent valuation, but it's a very logical and interesting opportunity that we intend to pursue. So lastly to guidance. Regarding a modest uplift this year, $120 to $135 million, that's because a lot of the construction that's underway will complete towards the back end of this financial year and actually into FY28. but also because of increased development expenses really in line with that acceleration of development business. I just talked about that increased development cadence. That's taken another $20 million off that. But you can see the impact of that strong development addition, the extra 1.67 gigawatts we see coming under construction this year coming into the OPCO run rate EBITDA at the bottom, lifting that to nearly $500 million over the year, so $120 million increase. Ampertil has agreed to provide an additional $300 million of equity funding to support this acceleration which would be deployed over the next two years and we see very strong returns from that obviously. I think that's it on longer, maybe over to you Andy. Oh no, two more. This is a good spot to put this, because the US has been incredibly strong, but as I mentioned in the opening, elsewhere it's been a little tricky. Juran has done well in Southeast Asia, progressing its projects, but really the big focus is on this key approval that we're waiting for, for Project Banda, its own very large project. The government-to-government discussions appear to be producing positively, which are needed to facilitate that approval. But it's fair to say that's taking longer than we hoped, and we hope to be able to update on that over the half. Turning to Europe, that has been a difficult market as well. Really the prolonged effect of the Ukraine war, the pressing demand for new electricity there means that the markets have reached a kind of mature stage and values for earlier stage projects have reduced markedly, making our target returns more difficult to achieve. That's led to a strategy reset over the last half to focus on projects that are nearer term, so taking off the longer term projects, and the ones that can take the business to more material scale, which would be more resilient business over the near term as well, and we're showing the targeted state to that business by 2030. That resulted in some write-downs and write-offs, which I mentioned here, which are not particularly big or material from an infrastructure perspective, but were clearly not what we hoped for or what the team hoped for from the business. They've got a good plan in place, I think, to get the business back to growth, and we'll be reporting on that over the half as well. Maybe not you, Andy. Yeah.