Meridian Energy Limited · NZX:MEL
Meridian Energy — Shareholder Meeting (December 2011)
33 slides from Meridian Energy's shareholder meeting presentation, Dec 7, 2011
Slide 1: Annual Public Meeting
Annual Public Meeting 7 December 2011 MERIDIAN ENERGY LIMITED 2011 ANNUAL RESULTS – 30 JUNE 2011 23 AUGUST 2011 PAGE 1
Slide 2: Today's Agenda
Today’s Agenda • About Meridian − Chris Moller, Chair • The year’s highlights − Chris Moller, Chair • Our progress against strategy − Tim Lusk, CEO • People, community and environment − Tim Lusk, CEO • Financial highlights − Paul Chambers, CFO • Trading update, outlook and opportunities − Paul Chamb
Slide 3: About Meridian
About Meridian “We're committed to creating a better energy future” • Integrated renewable electricity generator West Wind, Wellington and retailer 62 turbines, 143MW wind farm • New Zealand’s largest generator • Strong portfolio of future generation options in New Zealand and internationally CalREN
Slide 4: The 2010/11 Year in Numbers
The 2010/11 Year in Numbers Financial & Investment Operational $659.9m EBITDAF* (3% increase) 272,776 customer connections (7% increase) $683.6m dividends paid • 35% increase in North Island 64MW Te Uku wind farm • 104% growth in Powershop commissioned 28% Improvement in lost-time injury 420MW Macar
Slide 5: Major Events
Major Events • Canterbury Earthquakes • Sale of Tekapo power stations • Continued flat market demand • Active retail market – high competition and Christchurch home to 50% of our staff and 37% of Meridian’s customer base churn • High inflows across the country • Mixed ownership Meridian and Genesis
Slide 6: Sustainably Improving Our Earnings
Sustainably Improving Our Earnings Ensuring Meridian is a high-performing investment that can fund its growth plans • EBITDAF per MWh generated increased 27% since 2007 • 15.8% Average Annual Total Shareholder Return over the last 5 years • Standard & Poor’s BBB+, positive outlook, credit rating • $
Slide 7: Growing Value Through the Development of Renewables
Growing Value Through the Development of Renewables New Zealand projects at various stages – Te Uku completed – Central Wind investment ready – Pukaki (Gate 18) hydro consent granted First tower section at Macarthur wind – Mill Creek consent granted for 26 turbines farm Leveraging into offshore mark
Slide 8: Lifting Our Customer Game
Lifting Our Customer Game Improving the Retail segment’s contribution – 7% increase in customer connections – Rebalancing of our customer portfolio from South Island to North Island – Powershop retail brand growing fast Enhancing our customer service – Powershop ranked top and Meridian Retail leadin
Slide 9: People and Health and Safety
People and Health and Safety • Canterbury earthquakes – approx 50% of our team live in Christchurch • 28% reduction in Lost-Time Injury Frequency Rate – well below industry average Tim Lusk signs The Pledge committing to Christchurch Annual Industry Health & Safety Metrics Target 2011 2010 Average N
Slide 10: Community
Community Community Fund Programme – Supporting projects with long-term benefits Community liaison – To keep an open dialogue with asset Volunteers tree-planting as communities part of Living Legends Supporting local economies – Sourcing materials and contractors close to assets National sponsorship
Slide 11: Environment
Environment Active participant in Water Reform – Land and Water Forum, Canterbury Water Management Strategy Managing our farmlands – High standards in environmental management Meridian receiving Delloite Award Award winning projects – Delloite Award for Te Uku – DOC Green Ribbon Award for Project Ri
Slide 12: Financial Highlights
Financial Highlights $ millions 2011 2010 % Change 2.8% EBITDAF growth EBITDAF* 659.9 641.7 2.8% NPAT includes Group Net Profit After Tax 303.1 184.0 64.7% $157.4m gain (net of Group Underlying Profit After Tax 219.0 251.9 (13.1%) tax) on sale of Tekapo power stations Soft average wholesale Key Metr
Slide 13: Key Influences on Earnings (EBITDAF)
Key Influences on Earnings (EBITDAF) Employee & Purchase to Other NZAS Contracted Uncontracted Sales Price International Transmission Operating EBITDAF2010 Settlement Sales Generation Ratio Other Revenue & Levies Expenses EBITDAF 2011 700 21.5 $ Millions 28.1 62.4 17.9 13.2 12.4 10.1 3.8 600 641.7 6
Slide 14: Storage
Storage Meridian Energy Limited Public Meeting 7 December 2011 Page 14
Slide 15: Wholesale Prices
Wholesale Prices Meridian Energy Limited Public Meeting 7 December 2011 Page 15
Slide 16: Leveraging the Flexibility of Our Portfolio
Leveraging the Flexibility of Our Portfolio Meridian Energy Limited Public Meeting 7 December 2011 Page 16
Slide 17: Operating Expenditure
Operating Expenditure Meridian Energy Limited Public Meeting 7 December 2011 Page 17
Slide 18: Shareholder Returns
Shareholder Returns • $683.6m dividends returned to the Shareholder during 2011 financial year • $69.4m final dividend declared for payment on 31 October 2011 • Underlying Return on Equity (excl. revaluations) remains strong at 18.5% Meridian Energy Limited Annual Result – 30 June 2011 23 August 201
Slide 19: Funding
Funding • Maintain Standard & Poor’s A2, BBB+ (stable outlook) credit rating • Cash and undrawn debt facilities of $774m (cash $368m) as at 30 June 2011 • Project finance confirmed for Macarthur wind farm development in Australia with ANZ Bank appointed lead arranger and underwriter Debt Maturity Pr
Slide 20: Investments
Investments • 2011 investment largely completing the construction and commissioning of the 64MW Te Uku wind farm and commencing construction of the 420MW Macarthur wind farm • Forecast 2012 investment dominated by construction of the Macarthur wind farm, due for completion during 2013 – Our investme
Slide 21: Retail, Wholesale, Other & International
Retail, Wholesale, Other & International
Slide 22: Retail Customer Growth
Retail Customer Growth Meridian Energy Limited Public Meeting 7 December 2011 Page 22
Slide 23: Improving Satisfaction Metrics
Improving Satisfaction Metrics • Powershop leads the Consumer NZ customer satisfaction survey 4% improving 4 points to 96% • Meridian Retail moved from mid- 6% pack to leading the major retailers on 81% − a 6% increase • Internal satisfaction measures also up across all customer segments Meridian En
Slide 24: New Zealand Generation
New Zealand Generation • Flat demand growth combined with the sale of Tekapo power stations on 1 June 2011 (average annual generation 1,000GWh) resulted in production falling by 210GWh from last year • Te Uku, a 28 turbine 64MW wind farm, was fully commissioned in April 2011 with first power in Nove
Slide 25: New Zealand Generation Pipeline
New Zealand Generation Pipeline Development Option Stage Capacity New Zealand Development Pipeline Central Wind Investment ready 120MW Maungaharuru Consent held 94MW Mill Creek Consent held 60MW Hayes Environment Court 630MW Hurunui Consultation 76MW Amuri Integrated Hydro Water consents, concept de
Slide 26: International Generation Pipeline
International Generation Pipeline Development Option Stage Capacity Construction Macarthur, Victoria, Australia (50-50 joint venture with AGL Energy) 420MW Mt Mercer, Victoria, Australia Preconstruction design 130MW Jacobs Corner, California, USA Feasibility 20-60MW San Luis, Colorado, USA Investiga
Slide 27: Other Segment Performance
Other Segment Performance Improved contribution from Energy for Industry (EFI) primary driver of EBITDAF growth Economic conditions remain challenging for a number of our subsidiaries Meridian Energy Limited Public Meeting 7 December 2011 Page 27
Slide 28: Trading Update, Outlook & Opportunities
Trading Update, Outlook & Opportunities West Wind, Wellington 62 turbines, 143MW wind farm
Slide 29: Quarterly Performance
Quarterly Performance 3 months to 3 months to 3 months to Below average inflows $ millions 30 Sep 2011 30 Jun 2011 30 Sep 2010 into Waitaki catchment Underlying Return on Equity1 18.5% 21.9% Generation decreased 18.2% due to prudent EBITDAF per MWh2 $52.8/MWh $55.4/MWh $54.5MWh management and Tekapo
Slide 30: Outlook
Outlook • Recent inflows return hydrology levels to about average • Sale of Tekapo stations will reduce generation volumes by approximately 1,000GWh pa reducing generation revenues • Demand still remains a challenge • Several planned transmission outages and overlapping thermal outages • Retail comp
Slide 31: Opportunities
Opportunities • Meridian’s medium-term development pipeline has options well-placed in the generation merit order • Medium to long-term growth expected to return, lifting wholesale prices to the long- run marginal cost • Pole 3 completion provides opportunity • Retail brands are well positioned to c
Slide 32: Disclaimer
Disclaimer This presentation may contain projections or forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking stat
Slide 33: Thank You
Thank You publicmeeting@meridianenergy.co.nz Benmore Power Station 6 Generators, 540MW
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