Meridian Energy Limited · NZX:MEL
Meridian Energy — Debt Investor Presentation (March 2017)
27 slides from Meridian Energy's debt investor presentation, March 2017
Slide 1: Joint Lead Manager Joint Lead Manager Co-Manager
Joint Lead Manager Joint Lead Manager Co-Manager
Slide 2: Important Notice
Important Notice The offer of debt securities by Meridian Energy Limited (Meridian or the Issuer) is made in reliance upon the exclusion in clause 19 of schedule 1 of the Financial Markets Conduct Act 2013 (FMCA). The offer of Meridian’s fixed rate bonds 2024 Bondsis an offer of unsecured, unsubordi
Slide 3: Agenda
March 2017 Agenda = New Zealand Electricity Market = About Meridian The business Generation assets Retail business Current strategic focus Risk management Recent financial performance Capital management Funding Credit rating = The Offer Key terms, dates and process = Investment Highlights MERIDIAN E
Slide 4: The New Zealand electricity market
March 2017 The New Zealand electricity market INDUSTRIAL ELECTRICITY DOMESTIC USERS GENERATORS TRANSMISSION rye SUBSTATIONS REPeERS DISTRIBUTION RRGaUeniceece Major Transmission Distribution Electricity retail Million 5 generators 1 grid operator 29 businesses 34 brands 2 consumers MERIDIAN ENERGY L
Slide 5: New Zealand electricity market structure
March 2017 New Zealand electricity market structure Generation market share by volume Retail market share by customer numbers (GWh) (ICPs) : Other, 9% Ly Trust Power, 4%__ GiitEr, wh Mercury, 16% y Source: Meridian (year ended 31 December 2016) = Vertical integration is the dominant strategy MERIDIA
Slide 6: The New Zealand market
March 2017 The New Zealand market = Warm winter temperatures and high rainfall have eliminated demand growth in the last year, resulting in a decrease of 1.4% in national demand " Decreased South Island irrigation load in the second half of 2016 had a significant impact on annual demand * Forward AS
Slide 7: Tiwai Point smelter
March 2017 Tiwai Point smelter = Price increased from 1 January 2017 * Contract now into NZAS perpetual 12- month termination right = International aluminium market is improving, but remains difficult * Positive sentiment on global demand and possible supply side discipline in China have driven a ra
Slide 8: Meridian Energy
March 2017 Meridian Energy MERIDIAN ENERGY LIMITED 2017 Retail Bond Offer 8
Slide 9: About Meridian
March 2017 About Meridian = Vertically integrated renewable energy generator and retailer New Zealand's largest generator from purely renewable resources — hydro and wind Supplying more than 30% of New Zealand’s electricity Electricity retailer to over 366,000 customers in New Zealand and Australia
Slide 10: Meridian's generation assets
March 2017 Meridian’s generation assets MT MILLAR MT MERCER capacity: 70MW Capacity: MW 2015 production: 167GWh FY2015 production: a59GWh ‘Commissioned: 2006 ‘commissionad: 2014 @ wine rae @ rowerstor — warraxt HYORO SCHEME AUCKLAND. HAMILTON TE UKU capacity: 64MW FY2015 production: 21¢6Wh Commissio
Slide 11: Meridian Retail
March 2017 Meridian Retail = A retailer to around 276,000 homes, farms and businesses throughout New Zealand = Converted 91,000 Australians to great ww, kiwi customer service so far " Offering choice through two different brands meridian = Have successfully delivered the first milestone in developme
Slide 12: Progress on strategy
March 2017 Progress on strategy yy Maintaining an" TPM supplementary consultation paper released, “« open market in implementation expected by April 2020 (latest) — which we can — = Election year focus unlikely to be on electricity market SS compete structure | \\\ effectively »> T PAN > : = NZ wind
Slide 13: Progress on strategy
March 2017 Progress on strategy = NZAS back-to-back arrangements with other Protecting and generators in effect maximising our generation = Transmission grid resilient to a Tiwai exit asset and 7 wholesale = Ability of HVDC to deliver energy into the North position Island is robust Growing retail |
Slide 14: Meridian operates an active risk management programme
March 2017 = Meridian operates an active risk management programme Ee, * Key risks include: = Tiwai = Adverse hydrological conditions = Catastrophic events = Plant failure = Use of and access to water = Legislative and regulatory risks * Details of Meridian’s risk management structure are in Meridia
Slide 15: Financial performance - interim
March 2017 Financial performance - interim FINANCIAL PERFORMANCE AGAINST PRIOR YEAR $M 600 + m Six months ended 31 December 2016 533 09 m Six months ended 31 December 2015 500 + 400 + 352 300 + 203 206 200 194 200 + 123 121 124 130 429 104 100 7 66 64 / i 8 ol a = Energy Other Trans- Operating = EBI
Slide 16: Key financial metrics
Key financial metrics March 2017 3oJun 30Jun 30Jun 31Dec SUMMARY GROUP BALANCE SHEET 2014 2015 2016 2016 $M $M $M $M Total Assets 7,590 7,661 8,538 8,279 Total Liabilities 2,956 2,913 3,488 3,382 Equity 4,634 4,748 5,050 4,897 Debt 1,092 1,076 1,214 1,229 RATIOS & MULTIPLES Debt/(Debt+Equity)' 20% 1
Slide 17: 1 Includes the December 2016 interim dividend declared
1 Includes the December 2016 interim dividend declared
Slide 18: Funding: debt maturity profile as at Dec 2016
March 2017 e DEBT MATURITY PROFILE AS AT 31 DEC 2016 Funding 500 + = Total borrowings as at 31 December 4oo + 2016 of $1,229m 300 + 107 = Committed bank facilities of $620m as 200 + 357 at 31 December 2016, of which $zo7m_ — sg |. _ 203 were undrawn Be | 105 10 = Minimum headroom required in nowy on
Slide 19: Credit rating and bond covenants
March 2017 Credit rating and bond covenants = Standard and Poor’s BBB+/Stable Rating supported by strong market position as New Zealand’s largest electricity generator Modest capital expenditure over the medium term absent any compelling investment proposition Adequate headroom in credit metrics for
Slide 20: The Offer
The Offer MERIDIAN ENERGY LIMITED 2017 Retail Bond Offer
Slide 21: Key terms of the offer
March 2017 Key terms of the offer issuer Meridian Energy Limited Description of the Debt Securities Guarantee Purpose Issue Amount Maturity Date Interest Rate Indicative Issue Margin Interest Payments Denominations Direct, unsecured unsubordinated fixed rate bonds The Bonds are guaranteed by various
Slide 22: Key terms of the offer (cont.)
March 2017 Key terms of the offer (cont.) fissuer Meridian Energy Limited oe Application has been made to NZX to quote the 2024 Bonds on the NZX Debt Market Listing under the code MELO40 Issue Credit Rating BBB+ (Standard & Poor’s) The Trust Documents contain the following financial covenants: (a) E
Slide 23: Key dates and offer process
March 2017 Key dates and offer process a 6 March (Monday) Offer opens 6 - 8 March Roadshow -Wellington, Auckland, Dunedin and Christchurch (plus conference call) 10 March (Friday) Offer closes - bids due 12pm 10 March (Friday) Allocations and rate set 20 March (Monday) Issue Date 21 March (Tuesday)
Slide 24: Investment Highlights
March 2017 Investment Highlights MERIDIAN ENERGY LIMITED 2017 Retail Bond Offer 24
Slide 25: Investment highlights
March 2017 Investment highlights = New Zealand’s largest hydro generator and = Strong credit metrics supporting BBB+ credit wind farm operator rating = 100% renewable, low operating cost = Modest capital expenditure over the medium generation term = Vertically integrated generation and retail = Crow
Slide 26: Questions?
Questions? MERIDIAN ENERGY LIMITED 2017 Retail Bond Offer
Slide 27: Disclaimer
March 2017 Disclaimer The information in this presentation was prepared by Meridian Energy with due care and attention. However, the information is supplied in summary form and is therefore not necessarily complete, and no representation is made as to the accuracy, completeness or reliability of the
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