J.P.Morgan AGL Energy Management likely needs to discuss FY2025 earnings at upcoming result While an update to FY2024 guidance is highly likely at AGL's upcoming interim result, we also believe the stock price derating over the last six months somewhat compels management to discuss the longer-dated outlook for earnings. Listed wholesale electricity forward prices have retracted (in our view due to lower gas prices) in recent months and the market is now assuming FY2025 earnings decline materially. We are generally high against consensus on the basis that not all forward electricity sold has been reset at 1-year contract prices. With the stock now trading at more than 50% below our NPV, and at record low EV/EBITDA multiples (4.0- 4.5x versus its historical average of 7.0-8.0x), we reiterate our Overweight rating. Interim result to be released on 8 February 2024: AGL is due to release its interim financial results early in the window with the announcement due on 8 February 2024. While the company has provided full year guidance, the release of financial results is usually a material driver of the stock price: at its interim result in FY2023, the stock declined 10% on the day of the release, in FY2022 the stock dropped 3%, in FY2021 the price was up 1% while in FY2020 the price increased 4%. More so than other stocks in our coverage, we believe AGL's stock price is highly influenced by consensus earnings forecasts. We expect the company to be tracking to high end of guidance range: We forecast EBITDA for the interim period of A$1.063 billion, up 40% from the prior half and 49-56% of full year guidance. We expect management to update the market on full year guidance ranges at its interim result as it normally does. FY2024 guidance was provided unusually early (in June 2023, three months ahead of the full year result) so we believe AGL was conservative in its targets for the year. Since then, gas pricing and demand has been notably lower and this could both positively and negatively impact the gas retailing business. In electricity, forward prices would have been locked in ahead of the fiscal year so the decline in listed prices should not impact the business. Generation output increased 2% on the prior corresponding period while the units were generally reliable. While AGL's earnings are notoriously challenging to forecast, we see some modest upside risk to FY2024 guidance ahead of the result. Management may need to provide an indicative comments on FY2025 earnings: While interim results are a typical forum to update guidance in the current fiscal year, management does not normally make comments on future years. However, we hope this may be an exception given 1) the wide variation in consensus forecasts; and 2) the impact that lower listed wholesale electricity prices has had on the stock price. We are generally high against consensus in FY2025 on the basis that not all of AGL's electricity sold is reset on one-year contract durations, with C&I on 3-5 year tenors particularly. Additionally, wholesale contracts could be reset higher given pricing in recent periods has been below our estimate of long-run prices. Maintain Overweight rating: Our December 2024 price target is in line with our DCF valuation using a 10% post-tax WACC. Asia Pacific Equity Research 30 January 2024 Overweight AGL.AX, AGL AU Price (29 Jan 24):A$8.78 Price Target (Dec-24):A$13.40 Australia Energy, Utilities & Telco Mark Busuttil AC (61-2) 9003-8619 mark.busuttil@jpmorgan.com Bloomberg JPMA BUSUTTIL Luke Dalgleish (61-2) 9003-8605 luke.dalgleish@jpmorgan.com J.P. Morgan Securities Australia Limited Key Changes (FYE Jun) FCFF-24E (A$ mn) FCFF 25E (A$ mn) Prev Cur 1,056 560 1,135 1,734 Half Yearly Forecasts (FYE Jun) FCFF (A$ mn) H1 H2 2023A 2024E 2025E (162) 136 1,194 635 424 539 FY 474 560 1,734 Style Exposure Quant Factors Current Hist %Rank (1=Top) %Rank 6M 1Y 3Y 5Y Value 1 1 1 1 1 Growth 1 1 51 51 51 Momentum 51 51 100 100 51 Quality 51 1 51 51 1 Low Vol 51 51 51 1 ESGQ 100 100 100 100 1 100 Sources for: Style Exposure - J.P. Morgan Quantitative and Derivatives Strategy; all other tables are company data and J.P. Morgan estimates. See page 10 for analyst certification and important disclosures, including non-US analyst disclosures. J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. www.jpmorganmarkets.com Mark Busuttil AC (61-2) 9003-8619 mark.busuttil@jpmorgan.com Asia Pacific Equity Research 30 January 2024 J.P.Morgan Price Performance 14 12 A$ 10 8 6 Apr 23 Jul 23 Oct 23 - AGL.AX Price (A$) - ASX100 (rebased) Jan 24 YTD 1m 3m Abs -7.4% -7.4% Rel -7.2% -7.2% -19.4% -30.1% 12m 14.0% 12.6% Company Data Shares O/S (mn) 52-week range (A$) Summary Investment Thesis and Valuation Investment Thesis AGL is one of Australia's largest vertically integrated utility businesses and is Australia's largest private owner, operator and developer of renewable generation assets. The company has been impacted by significant headwinds from lower wholesale electricity and the failed de-merger. However, the significant recovery in wholesale electricity prices likely implies substantially better earnings going forward. We also note likely corporate appeal following the failed bid earlier and ongoing industry consolidation. With the stock price below our price target, we are Overweight. Valuation Our December 2024 price target for AGL is based on a DCF valuation using a 10% WACC (cost of debt: 7.0%; cost of equity: 11.2%). Market cap ($ mn) Exchange rate Free float(%) 3M - Avg daily vol (mn) 3M Avg daily val ($ mn) Volatility (90 Day) Index BBG BUY HOLD SELL Key Metrics (FYE Jun) Financial Estimates A$ in millions Revenue Adj. EBITDA FY23A FY24E FY25E FY26E 673 12.45-6.73 3,905.01 1.51 88.9% Performance Drivers 2.70 Market 17.0 23 Sector ASX 100 841 Macro Style 6% Idiosyn. 19% 10% 18% 14,157 15,523 15,897 16,407 1,361 2,125 2,120 2,105 Adj. EBIT Adj. net income 633 1,349 1,313 1,288 Factors Market: MSCI Australia Sect: Utilities 281 772 778 808 Ind: Utilities 47% 6M Corr 1Y Corr 0.46 0.43 0.48 0.35 0.45 0.29 Adj. EPS 0.41 1.15 1.16 1.20 Macro: BBG EPS 0.40 1.03 0.97 0.93 Cashflow from operations 912 1,249 2,196 1,644 Non-Energy Commod 0.34 0.34 FCFF 474 560 1,734 1,112 Australia Breakeven 10Yr 0.46 0.23 Margins and Growth S&P/ASX 200 VIX INDEX 0.23 0.19 Revenue Growth Y/Y (%) 7.1% 9.6% 2.4% 3.2% Quant Styles: EBITDA margin 9.6% 13.7% 13.3% 12.8% Momentum EBITDA Growth Y/Y (%) 11.7% 56.1% (0.2%) (0.7%) EBIT margin 4.5% 8.7% 8.3% 7.8% Size Net margin 2.0% 5.0% 4.9% 4.9% Value -0.15 -0.23 0.06 -0.18 0.29 0.15 Adj. EPS growth 57.2% 177.1% 0.7% 3.9% Ratios Adj. tax rate 26.2% 30.0% 30.0% 30.0% Interest cover 5.4 8.7 10.5 15.8 Net debt/Equity 0.5 0.5 0.3 0.2 Net debt/EBITDA 2.0 1.3 0.8 0.6 ROCE 5.4% 11.6% 11.7% 12.2% ROE 4.8% 14.6% 13.8% 13.7% Valuation FCFF yield 8.0% 9.5% 29.3% 18.8% Dividend yield 3.5% 8.4% 8.5% 8.9% EV/Revenue 0.6 0.6 0.5 0.4 EV/EBITDA Adj. P/E 6.4 4.1 3.6 3.4 21.2 7.6 7.6 7.3 Source: J.P. Morgan Quantitative and Derivatives Strategy for Performance Drivers; company data, Bloomberg Finance L.P. and J.P. Morgan estimates for all other tables. Note: Price history may not be complete or exact. 2 Mark Busuttil AC (61-2) 9003-8619 mark.busuttil@jpmorgan.com Asia Pacific Equity Research 30 January 2024 J.P.Morgan AGL to report interim financials on 8 February 2024 AGL is scheduled to release its financial statements for the interim period to December 2023 on Thursday 8 February 2024. The release will likely be pre-market with a conference call at 11am that morning. We estimate EBITDA of A$1,093 million and NPAT of A$401 million for the 6-month period. These estimates are slightly above the mid-point of full year guidance. Our forecasts imply EBITDA growth of 44% from the June 2023 half with all the growth coming from the electricity portfolio (with gas earnings expected to be lower). Table 1: Summary of interim result estimate compared to prior periods 1H FY22 2H FY22 1H FY23 2H FY23 Estimate h/h yly Revenue A$m 5,713 7,508 7,808 6,349 7,791 23% 0% EBITDA A$m 723 495 604 757 1,093 44% 81% EBIT Electricity mass market A$m 227 243 203 289 237 -18% 17% Electricity C&I A$m 15 18 15 16 15 -4% 2% Electricity Generation A$m 407 110 153 281 682 143% 346% Gas mass market A$m 127 135 152 171 136 -20% -10% Gas C&I A$m 4 4 9 4 6 50% -33% Gas Wholesale A$m 132 100 213 227 123 -46% -42% Other A$m -534 -487 -510 -590 -505 -14% -1% Total EBIT A$m 378 123 235 398 695 75% 196% Underlying NPAT A$m 190 35 85 196 401 104% 371% Reported NPAT A$m 555 305 -1,075 -189 401 -312% -137% DPS Acps 16.0 10.0 8.0 23.0 39.0 70% 388% Net debt A$m 2,923.0 2,751.0 2,933.0 2,735.0 2,341.0 -14% -20% Source: Company reports and J.P. Morgan estimates. With all growth coming from Electricity Generation, realised wholesale forward prices are likely to be key. As shown in the chart below, we estimate overall realised generation prices of A$97/MWh driven by increases to Consumer and C&I prices, offsetting lower forecast prices to Wholesale customers. We believe there could be upside to our forecasts should Wholesale contracts be reset. Figure 1: Estimated forward prices through generation (A$/MWh REAL) 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 Consumer Dec-17 Dec-18 Dec-19 Dec-20 Source: J.P. Morgan estimates. C&I Wholesale Wtd Average Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 In terms of actual generation output, excluding Liddell (which was closed in April 2023), volumes at Bayswater and Loy Yang A increased 3% in the 6-months to December 2023 compared to the prior corresponding period. 3 Mark Busuttil AC (61-2) 9003-8619 mark.busuttil@jpmorgan.com Asia Pacific Equity Research 30 January 2024 4 Figure 2: Output from AGL's baseload plants (MWh) J.P.Morgan 25,000 Liddell Loy Yang A Bayswater 20,000 1 15,000 10,000 5,000 0 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Source: AEMO, J.P. Morgan Since guidance was provided in June 2023 there have been a number of factors that could have impacted FY2024 earnings: Electricity demand: As can be seen from Table 1 contribution from the electricity retail business is fairly modest and there is also little variability from period to period. Nonetheless, as shown below, operational demand for the period ending December 2023 was 2% lower than the prior corresponding period. Figure 3: NEM demand (MW) for interim period ending December 24,000 23,000 2% 22,000 -4% 1% -1% -1% -1% -1% -2% 21,000 -1% 1% -2% 20,000 19,000 18,000 Source: AEMO Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 AGL generation availability: As shown in Figure 2, generation output was solid in the 6-months to December 2023 with no notable unplanned outages at any of its plants. Gas demand: An unusually warm winter has resulted in a significant decrease in gas demand. As shown in the chart below, overall domestic gas demand for the 6-month period ending December 2023 was down 16% from the prior corresponding period. For AGL this will mean lower volumes from the retail business, but also the lower gas prices could mean better margins. Mark Busuttil AC (61-2) 9003-8619 mark.busuttil@jpmorgan.com Asia Pacific Equity Research 30 January 2024 J.P.Morgan Figure 4: Total East Coast domestic gas demand (PJ annualised) - 6-month period ending December 800 +12% +5% -4% %8+ -8% -5% +12% -3% -19% +10% %9 -3% +3% 16% 700 600 500 400 300 200 100 0 Dec-08 Dec-10 Source: AEMO, J.P. Morgan Dec-12 Dec-14 Dec-16 Dec-18 Dec-20 Dec-22 Hedge book and contract mark-to-market adjustments: These are less forecastable. Particularly the state of AGL's hedge book as it could materially impact earnings and profitability over a short-period. While prices have been volatile through the period, AGL's generation output has been reasonable which potentially mitigates this risk. Will FY2024 guidance be updated? AGL surprised the market by providing FY2024 earnings guidance in June 2023, three months earlier than its full year financial result when it typically would provide forward guidance. The early provision of guidance could imply that there is some conservatism built into estimates. We have noted some of the factors that could impact FY2024 earnings. We are generally towards the top end of FY2024 guidance. We estimate underlying EBITDA of A$2.1 billion (compared to guidance of A$1.875-$2.175 billion); and NPAT of A$772 million (A$580-$780 million). We are also generally high versus consensus with the market closer to the midpoint of guidance for the year. Table 2: Comparison of estimates versus prior periods and consensus - FY2024 FY20A FY21A FY22A FY23A FY24E JPM yly Consensus vs cons. Revenue A$m 12,160 10,942 13,221 14,157 15,523 10% 14,212 9% Underlying EBITDA A$m 2,070 1,666 1,218 1,361 2,125 56% 2,011 6% EBIT Electricity mass market A$m 565 510 470 492 485 -1% Electricity C&I A$m 36 34 33 31 30 -2% Electricity Generation A$m 1,195 1,030 517 434 1,342 209% Gas mass market A$m 221 269 262 323 257 -20% Gas C&I A$m 12 10 8 13 12 -7% Gas Wholesale A$m 392 205 232 440 248 -44% Other A$m -1,104 -1,099 -1,021 -1,100 -1,026 -7% Total EBIT A$m 1,317 959 501 633 1,349 113% 1,242 9% Underlying NPAT A$m 816 536 225 281 772 175% 693 12% Reported NPAT A$m 1,015 -2,058 860 -1,264 772 NM 646 20% DPS Acps 98.0 75.0 26.0 31.0 74.0 139% 54.4 36% Net debt A$m 2,967.0 3,097.0 2,751.0 2,735.0 2,758.2 1% 2,514 10% Source: Bloomberg Finance L.P., Company reports and J.P. Morgan estimates. 5 Mark Busuttil AC (61-2) 9003-8619 mark.busuttil@jpmorgan.com Asia Pacific Equity Research 30 January 2024 6 J.P.Morgan AGL typically updates the market on current year guidance at its interim results. Last year, AGL narrowed its full year EBITDA guidance to A$1.250-$1.375 billion (from A $1.250-$1.450 billion) and NPAT to A$200-$280 million (from A$200-$320 million). The revisions to guidance were predicated on interim EBITDA of A$604 million and NPAT of A$87 million implying significant growth in earnings in the second half of the fiscal year. Management needs to address impact of forward prices on FY2025 earnings The announcement of FY2024 guidance in June 2023 resulted in a material rerating of AGL's stock price. However, since that date, the price has derated materially falling 29% since its peak on 1 August 2023 (ASX200 has fallen 13% since that date). As shown below, we believe the primary driver has been lower electricity forward prices. Figure 5: AGL stock price versus NSW & VIC FY2025 electricity forward prices 140 13 130 12 120 11 110 10 100 9 90 8 80 7 70 60 6 02-Jan-23 02-Apr-23 02-Jul-23 NSW FY25 forward (A$/MWh LHS) 02-Oct-23 02-Jan-24 VIC FY25 forward (A$/MWh LHS) AGL stock price (A$/shr RHS) Source: Bloomberg Finance L.P. Over the period from 1 August 2023 to today, the market has lowered average FY2025 NPAT estimates by 10% and this is likely the most significant headwind. Figure 6: AGL stock price (A$/shr) versus consensus NPAT estimates (A$m) 1200 14 12 1000 10 800 8 600 6 400 4 200 2 Consensus JPM Low 0 03-Jan-23 03-Apr-23 03-Jul-23 -High 03-Oct-23 Stock price (RHS) 0 03-Jan-24 Source: Bloomberg Finance L.P. Given the stock is now trading at an EV/EBITDA of 4.0-4.5x (versus its historical average of 7.0-8.0x), we believe the market reaction to FY2025 earnings is likely key to price performance going forward. While management do not usually guide on earnings ahead of the current fiscal year, we believe the ongoing derating of the stock and the wide variation in earnings forecasts somewhat compels the company to at least make indicative comments on the impact of Mark Busuttil AC (61-2) 9003-8619 mark.busuttil@jpmorgan.com Asia Pacific Equity Research 30 January 2024 J.P.Morgan lower forward prices on FY2025 earnings. The following table shows our FY2025 earnings compared to prior years and consensus. Figure 7: Comparison of estimates versus prior periods and consensus - FY2025 FY20A FY21A FY22A FY23A FY24E JPM FY25E JPM yly Consensus vs cons. Revenue A$m 12,160 10,942 13,221 14,157 15,523 15,897 2% 14,658 8% Underlying EBITDA A$m 2,070 1,666 1,218 1,361 2,125 2,120 0% 1,968 8% EBIT Electricity mass market A$m 565 510 470 492 485 493 2% Electricity C&I A$m 36 34 33 31 30 31 3% Electricity Generation A$m 1,195 1,030 517 434 1,342 1,329 -1% Gas mass market A$m 221 269 262 323 257 254 -1% Gas C&I A$m 12 10 8 13 12 12 3% Gas Wholesale A$m 392 205 232 440 248 256 3% Other A$m -1,104 -1,099 -1,021 -1,100 -1,026 -1,063 4% Total EBIT A$m 1,317 959 501 633 1,349 1,313 -3% 1,182 11% Underlying NPAT A$m 816 536 225 281 772 778 1% 653 19% Reported NPAT A$m 1,015 -2,058 860 -1,264 772 778 NM 624 25% DPS Acps 98.0 75.0 26.0 31.0 74.0 75.0 1% 57.0 32% Net debt A$m 2,967.0 3,097.0 2,751.0 2,735.0 2,758.2 1,656.9 -40% 2,649 -37% Source: Bloomberg Finance L.P., Company reports and J.P. Morgan estimates. Minor adjustments to earnings estimates We have adjusted our earnings forecasts modestly ahead of the interim result. The main change is to lower generation volumes in line with AEMO data. Figure 8: Changes to earnings estimates and valuation FY2024 FY2025 FY2026 New Old Change New Old Change New Old Change Revenue A$m 15,523 15,433 1% 15,897 15,897 0% 16,407 16,407 0% Operating Expenses A$m -13,398 -13,294 1% -13,777 -13,755 0% -14,302 -14,281 0% EBITDA A$m 2,125 2,138 -1% 2,120 2,142 -1% 2,105 2,127 -1% EBIT Electricity portfolio A$m 1,858 1,853 0% 1,853 1,853 0% 1,839 1,839 0% Gas portfolio A$m 517 502 3% 522 522 0% 540 540 0% Other AGL A$m -1,026 -1,015 1% -1,063 -1,041 2% -1,091 -1,070 2% Total A$m 1,349 1,340 1% 1,313 1,334 -2% 1,288 1,309 -2% Normalised NPAT A$m 772 781 -1% 778 805 -3% 808 817 -1% NPV A$m 9,015 9,013 0% A$/share 13.40 13.39 0% Source: J.P. Morgan estimates. 7 Mark Busuttil AC (61-2) 9003-8619 mark.busuttil@jpmorgan.com Asia Pacific Equity Research 30 January 2024 8 J.P.Morgan Investment Thesis, Valuation and Risks AGL Energy (Overweight; Price Target: A$13.40) Investment Thesis AGL is one of Australia's largest vertically integrated utility businesses and is Australia's largest private owner, operator and developer of renewable generation assets. The company has been impacted by significant headwinds from lower wholesale electricity and the failed de-merger. However, the significant recovery in wholesale electricity prices likely implies substantially better earnings going forward. We also note likely corporate appeal following the failed bid earlier and ongoing industry consolidation. With the stock price below our price target, we are Overweight. Valuation Our December 2024 price target for AGL is based on a DCF valuation using a 10% WACC (cost of debt: 7.0%; cost of equity: 11.2%). DCF valuation (December 2024) A$m A$ps Electricity excluding generation 6,351 9.44 Generation 5,770 8.57 Gas portfolio 2,484 3.69 Corporate & Other -3,156 -4.69 Rehabilitation provision -544 -0.81 Enterprise value 10,905 16.21 Net debt 1,890 2.81 Equity value 9.015 13.40 Source: J.P. Morgan estimates. Risks to Rating and Price Target The key downside risks to our price target and rating include: transaction risk, policy risk, lower-than-expected wholesale electricity prices, and lower-than-forecast electricity and gas retail margins. Mark Busuttil AC (61-2) 9003-8619 mark.busuttil@jpmorgan.com Asia Pacific Equity Research 30 January 2024 AGL Energy Relative recommendation: J.P.Morgan Overweight A$ in millions, year end Jun Profit And Loss FY22 FY23 FY24E FY25E FY26E Valuation Summary A$m A$ps Revenue 13,221 14,157 15,523 15,897 16,407 Current mkt capitalisation 5,907 8.78 Revenue growth 20.8% 7.1% 9.6% 2.4% 3.2% COGS Price Target 13.40 Operating Expenses (12,003) (12,796) (13,398) (13,777) EBITDA 1,218 1,361 2,125 2,120 EBITDA growth (26.9%) 11.7% 56.1% (0.2%) (14,302) 2,105 (0.7%) Trading Multiples Capital growth to price target 52.6% FY22 FY23 FY24E FY25E FY26E EBITDA margin 9.2% 9.6% 13.7% 13.3% 12.8% PE Pre-abnormals 33.3 21.2 7.6 7.6 7.3 Amortisation 0 0 0 0 0 PE Reported 8.7 NM 7.6 7.6 7.3 Depreciation (717) (728) (776) (808) (818) EV/EBITDA 8.4 6.4 4.1 3.6 3.4 EBIT 501 633 1,349 1,313 1,288 EV/EBIT 20.5 13.7 6.4 5.8 5.5 Other Income Other Expenses Key Ratios FY22 FY23 FY24E FY25E FY26E Net Interest (210) (252) (245) (202) (133) Dividend Yield 3.0% 3.5% 8.4% 8.5% 8.9% Pre-Tax Profit 291 381 1,104 1,111 1,155 Franking 0.0% 0.0% 0.0% 0.0% 0.0% Tax (66) (100) (331) (333) (346) Return on Assets (%) 1.3% 1.6% 5.0% 5.0% 5.3% Tax Rate 22.7% 26.2% 30.0% 30.0% 30.0% Return on Equity (%) 3.7% 4.8% 14.6% 13.8% 13.7% Minorities - ROIC (%) Abnormals (post tax) 635 (1,545) 0 0 0 Reported NPAT 860 (1,264) 772 778 808 Leverage FY22 FY23 FY24E FY25E FY26E Gearing (Net Debt/Equity) 0.4 0.5 0.5 0.3 0.2 Normalised NPAT 225 281 772 778 808 Gearing (ND/ (ND + E)) 29.7% 34.8% 33.5% 22.3% 16.2% Growth (58.0%) 24.9% 174.9% 0.7% 3.9% Net Debt/EBITDA 2.3 2.0 1.3 0.8 0.6 EBIT Interest Cover (x) 2.4 2.5 5.5 6.5 9.7 End of Period Shares 854 678 673 673 673 EFPOWA 854 678 673 673 673 Balance Sheet FY22 FY23 FY24E FY25E FY26E Cash 127 148 50 50 50 Reported EPS 1.01 (1.86) 1.15 1.16 1.20 Receivables 3,130 1,840 2,233 2,171 2,232 Normalised EPS 0.34 0.42 1.15 1.16 1.20 Investments - - Growth (60.1%) 21.5% 174.6% 0.7% 3.9% Inventories 369 346 349 361 375 Other Current Assets 5,005 2,241 2,241 2,241 2,241 DPS 0.26 0.31 0.74 0.75 0.78 Total Current Assets 8,631 4,575 4,873 4,823 4,897 Growth (65.3%) 19.2% 138.7% 1.4% 4.0% Net PPE 6,013 5,418 5,502 5,298 5,105 Total Intangibles 3,252 3,182 3,182 3,182 3,182 DPS/EPS payout 25.8% NM 64.5% 64.9% 64.9% Other Non Current Assets 1,374 2,063 2,042 2,042 2,042 Total Non Current Assets 10,639 10,663 10,726 10,522 10,329 Cash Flow Statement FY22 FY23 FY24E FY25E FY26E Total Assets 19,270 15,238 15,600 15,346 15,226 Net Profit for Cashflow 860 (1,264) 772 778 808 Creditors 3,164 1,827 1,903 2,463 2,555 Depreciation & Amortisation 717 728 776 808 818 Current Borrowings 355 47 0 0 0 Non Cash Items - - - - Current Tax Provisions 55 0 0 0 0 Working Capital Changes 0 0 0 0 0 Other Current Provisions 374 366 366 366 366 Other Operating Cashflows. (350) 1,448 (300) 610 18 Other Current Liabilities 3,659 1,947 1,947 1,947 1,947 Cashflow from Operating Activities 1,227 912 1,249 2,196 1,644 Total Current Liabilities 7,607 4,187 4,216 4,776 4,868 Non Current Creditors Capex (636) (624) (861) (603) (625) Non Current Borrowings 2,523 2,836 2,808 1,707 1,219 Net Acquisitions 0 0 0 0 0 Deferred Tax Liabilities 0 10 10 10 10 Other Investing cashflows (249) (105) 0 0 0 Other Non Current Provisions 1,961 2,098 2,098 2,098 2,098 Investing Cash Flow (885) (729) (861) (603) (625) Other Non Current Liabilities 662 988 988 988 988 Total Non Current Liabilities 5,146 5,932 5,904 4,803 4,315 Inc/(Dec) in Borrowings 915 1,020 (75) (233) (201) Total Liabilities 12,753 10,119 10,120 9,579 9,183 Equity Issued 317 0 0 0 Equity 5,918 5,918 5,918 5,918 5,918 Dividends Paid (317) (121) (412) (491) (532) Other Equity 0 0 0 0 (0) Other Financing Cashflows (1,218) (1,058) 0 (868) (286) Reserves 97 82 82 82 82 Financing Cash Flow (303) (159) (487) (1,593) (1,019) Retained Profits 502 (879) (518) (232) 45 Outside Equity Interests 0 (2) (2) (2) (2) Net Cash Flow 39 24 (98) (0) (0) Total Shareholders Equity 6,517 5,119 5,480 5,766 6,043 Net Debt 2,751 2,735 2,758 1,657 1,169 Source: Company reports and J.P. Morgan estimates. Note: A$ in millions (except per-share data).Fiscal year ends Jun. o/w - out of which 9 Mark Busuttil AC (61-2) 9003-8619 mark.busuttil@jpmorgan.com Asia Pacific Equity Research 30 January 2024 J.P.Morgan Analyst Certification: The Research Analyst(s) denoted by an "AC" on the cover of this report certifies (or, where multiple Research Analysts are primarily responsible for this report, the Research Analyst denoted by an "AC" on the cover or within the document individually certifies, with respect to each security or issuer that the Research Analyst covers in this research) that: (1) all of the views expressed in this report accurately reflect the Research Analyst's personal views about any and all of the subject securities or issuers; and (2) no part of any of the Research Analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the Research Analyst(s) in this report. For all Korea-based Research Analysts listed on the front cover, if applicable, they also certify, as per KOFIA requirements, that the Research Analyst's analysis was made in good faith and that the views reflect the Research Analyst's own opinion, without undue influence or intervention. All authors named within this report are Research Analysts who produce independent research unless otherwise specified. In Europe, Sector Specialists (Sales and Trading) may be shown on this report as contacts but are not authors of the report or part of the Research Department. Important Disclosures Market Maker/ Liquidity Provider: J.P. Morgan is a market maker and/or liquidity provider in the financial instruments of/related to AGL Energy. Client: J.P. Morgan currently has, or had within the past 12 months, the following entity(ies) as clients: AGL Energy. . Client/Non-Investment Banking, Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following entity(ies) as clients, and the services provided were non-investment-banking, securities-related: AGL Energy. Non-Investment Banking Compensation Received: J.P. Morgan has received compensation in the past 12 months for products or services other than investment banking from AGL Energy. Debt Position: J.P. Morgan may hold a position in the debt securities of AGL Energy, if any. Company-Specific Disclosures: Important disclosures, including price charts and credit opinion history tables, are available for compendium reports and all J.P. Morgan-covered companies, and certain non-covered companies, by visiting https://www.jpmm.com/research/disclosures, calling 1-800-477-0406, or e-mailing research.disclosure.inquiries@jpmorgan.com with your request. AGL Energy (AGL.AX, AGL AU) Price Chart Date Rating 18 04-Feb-21 OW N A$11 N A$7.8 W A$7.55 OW A$9.47 OW A$10 OW A$9.85 N A$11.2 OW A$13.4 03-Mar-21 OW 11.85 9.45 Price (A$) Price Target (A$) 14 14.05 16 OW A$14.05 A$8.6 W A$7.65 OW A$8.75 A$9.15 A$10.6 OW A$10 N A$10.25 A$14 30-Mar-21 N 10.17 11 03-Jun-21 N 8.35 8.8 14 OW A$14 A$8.8 OW A$7.55 OW A$8.7 DW A$9.3 15 OW A$9.5 OW A$10.25 $14.3 05-Jul-21 N 8.13 8.6 12 12-Aug-21 N 7.60 7.8 Price(A$) 22-Sep-21 OW 5.52 7.55 10 06-Oct-21 OW 5.74 7.65 02-Nov-21 OW 5.65 7.55 8 12-Jan-22 OW 6.96 8.7 10-Feb-22 OW 7.53 8.75 6 11-Apr-22 OW 8.45 9.4 20-Apr-22 OW 8.80 9.3 4 May Sep 21 21 22 12 Jan May 22 22 Sep Jan 23 May 23 Sep Jan 03-May-22 OW 8.62 9.15 23 24 09-May-22 N 8.35 8.7 31-May-22 N 8.72 9.15 Source: Bloomberg Finance L.P. and J.P. Morgan; price data adjusted for stock splits and dividends. Initiated coverage Nov 02, 2006. All share prices are as of market close on the previous business day.. 19-Jul-22 OW 8.15 10.6 19-Aug-22 OW 8.16 10 29-Sep-22 OW 6.60 9.5 22-Dec-22 OW 8.04 10 09-Feb-23 OW 7.94 9.85 12-May-23 OW 8.76 10.25 16-Jun-23 N 9.66 10.25 11-Jul-23 N 11.03 11.2 17-Jul-23 OW 11.40 14.3 10-Aug-23 OW 11.58 14 10-Jan-24 OW 9.47 13.4 10 10 Mark Busuttil AC (61-2) 9003-8619 mark.busuttil@jpmorgan.com Asia Pacific Equity Research 30 January 2024 J.P.Morgan The chart(s) show J.P. Morgan's continuing coverage of the stocks; the current analysts may or may not have covered it over the entire period. J.P. Morgan ratings or designations: OW = Overweight, N= Neutral, UW = Underweight, NR = Not Rated Explanation of Equity Research Ratings, Designations and Analyst(s) Coverage Universe: J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the average total return of the stocks in the analyst's (or the analyst's team's) coverage universe.] Neutral [Over the next six to twelve months, we expect this stock will perform in line with the average total return of the stocks in the analyst's (or the analyst's team's) coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of the stocks in the analyst's (or the analyst's team's) coverage universe.] Not Rated (NR): J.P. Morgan has removed the rating and, if applicable, the price target, for this stock because of either a lack of a sufficient fundamental basis or for legal, regulatory or policy reasons. The previous rating and, if applicable, the price target, no longer should be relied upon. An NR designation is not a recommendation or a rating. In our Asia (ex-Australia and ex-India) and U.K. small- and mid-cap equity research, each stock's expected total return is compared to the expected total return of a benchmark country market index, not to those analysts' coverage universe. If it does not appear in the Important Disclosures section of this report, the certifying analyst's coverage universe can be found on J.P. Morgan's research website, https://www.jpmorganmarkets.com. Coverage Universe: Busuttil, Mark: AGL Energy (AGL.AX), APA Group (APA.AX), Ampol (ALD.AX), Aussie Broadband (ABB.AX), Beach Energy (BPT.AX), Carnarvon Energy Ltd (CVN.AX), Cooper Energy (COE.AX), Karoon Energy (KAR.AX), Origin Energy (ORG.AX), Santos (STO.AX), TPG Telecom (TPG.AX), Telstra (TLS.AX), Viva Energy (VEA.AX), Woodside Energy Group Ltd (WDS.AX), Worley (WOR.AX) J.P. Morgan Equity Research Ratings Distribution, as of January 01, 2024 Overweight (buy) Neutral (hold) Underweight (sell) J.P. Morgan Global Equity Research Coverage* IB clients** 47% 39% 13% 48% 43% 32% JPMS Equity Research Coverage* 46% 42% 12% IB clients** 68% 63% 46% *Please note that the percentages may not add to 100% because of rounding. **Percentage of subject companies within each of the "buy," "hold" and "sell" categories for which J.P. Morgan has provided investment banking services within the previous 12 months. For purposes of FINRA ratings distribution rules only, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold rating category; and our Underweight rating falls into a sell rating category. Please note that stocks with an NR designation are not included in the table above. This information is current as of the end of the most recent calendar quarter. 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