CHAIRMAN’S Statement
If we don’t provide what they want, someone else will. For Vector, there is no choice. We are already fully committed to unlocking greater value through the deployment of new technology targeted at energy production, storage, delivery, management and optimisation. We don’t underestimate the fight on our hands, given others in the sector are determined to hang on to the past. As we have seen in the past year, they will use any means at their disposal protect their revenue streams. Fortunately, the opportunities from new energy solutions are significant, and Vector is well- positioned to capitalise – by fighting for what is right and in consumers’ best interests. We are already transforming how we support Auckland’s growth, how we educate consumers to think about energy and how we future- proof our business to maximise value for shareholders. And, we have a unique and vital competitive advantage – to a great extent our customers and shareholders are one. Successfully serving one, is inextricably linked to successfully delivering to the other. This single-minded focus is powering our future. Looking forward to the 2018 financial year, we are targeting adjusted EBITDA at, or around, the FY17 result. – from regulatory lobbying to public campaigns – to
Don’t make the mistake of dismissing these as one-off anomalies; they are trends. Vector’s performance is – and will continue to be – impacted by changing energy consumption patterns. There is no room for complacency – the future is here. For example, while the fundamentals of our Auckland energy networks remain strong, the growth in Auckland’s population is not expected to translate into growth in regulated earnings for the next two to three years. That means Vector has to look to other sources to generate revenue to plug this gap. So when Vector talks about embracing disruptive technologies or our commitment to the United Nations Sustainable Development Goals, we are not merely paying lip service to lofty ideals or indulging in green washing – these are essential to our very survival. Long-term dividend growth is untenable without a radically different business paradigm. Therefore, innovative, sustainable and customer- focused initiatives are at the heart of our strategy for one reason only, they make good business sense. Historical methods of electricity generation and delivery put generators, distributors and retailers firmly in the driver’s seat, but no more: the transition from monopoly to energy democracy is well advanced and power is now shifting to the people. To reap the economic benefits of what have been described as “the four Ds of energy democracy” – distributed power, decentralisation, democracy from ownership and disruptive technology – Vector has to continue to forge a new path with customers at our heart.
Therefore, innovative, sustainable and customer-focused initiatives are at the heart of our strategy for one reason only,
they make good business sense.
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Michael Stiassny Chairman
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