Meridian Energy Limited · NZX:MEL
Meridian Energy — Debt Investor Presentation (March 2016)
26 slides from Meridian Energy's debt investor presentation, March 2016
Slide 1: Arranger & Lead Manager, Co-Managers
Arranger & Lead Manager Co-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 (2023 Bonds) is an offer of bonds that have i
Slide 3: Agenda
Agenda = New Zealand Electricity Market = About Meridian The business Generation assets Retail business Current strategic focus Recent financial performance Capital management Funding Credit rating hake ae "See eure " The Offer Key terms, dates and process = Investment Highlights MERIDIAN ENERGY LIM
Slide 4: New Zealand Electricity Market
Slide 5: New Zealand electricity market structure
March 2016 New Zealand electricity market structure GENERATION MARKET SHARE BY VOLUME (GWH) RETAIL MARKET SHARE BY CUSTOMER NUMBERS (ICPs) Other, 10% Trustpower, 12% Meridian, 14% Trustpower, 5% Meridian, 31% is, 169 Genesis, 16% Contact, 21% Genesis, 26% Contact, 22% = Vertical integration is the d
Slide 6: The New Zealand market
March 2016 The New Zealand market = Modest demand growth in last six months = Growth in most regions and sectors (except industrial) * G6OOMW of thermal plant closure has occurred in the last 6 months ™ Market is working through implications of completed and planned thermal plant closure = 2019 ASX
Slide 7: Tiwai Point smelter
March 2016 Tiwai Point smelter ™ Meridian’s largest customer - circa 37% of Meridian’s New Zealand generation and circa 12% of New Zealand’s production * Current trading environment for the aluminium industry is difficult * USD aluminium prices have fallen 10% since the middle of 2015 = Price premia
Slide 8: Tiwai Point smelter contract
March 2016 Tiwai Point smelter contract * Contract terms (other than price) similar to those previously agreed * Price on 400MW unchanged from 2013 variation, higher price on 172MW from 1 January 2017 = Window to give 12 months notice to reduce to 400MW extended to 1 April 2016, then any time after
Slide 9: Meridian Energy
Slide 10: Vertically integrated renewable energy generator and retailer
Vertically integrated renewable energy generator and retailer Seven hydro stations Seven wind farms Future development options in New Zealand
Slide 11: Meridian's generation assets
Meridian’s generation assets MT MILLAR, opacity: OM MT MERCER Capac: MW veszounse @ @ wine rae @ rowerstor — warraxt HYORO SCHEME March 2016 AUCKLAND. HAMILTON TE UKU capacity: 64MW FY2015 production: 21¢6Wh Commissioned: 2014 MILL CREEK Capacity: 6oMW. FY2018 production: 205GWh Commissioned: 2014 W
Slide 12: Meridian's retail business
March 2016 Meridian’s retail business WZ 7 meridian = Meridian Renewable brand position Sells into all market segments Market leader in agri business Improving performance is a source of future value POWERSHOP = Powershop Abetter power company Innovative, online offer High customer satisfaction -exc
Slide 13: Meridian's current strategic focus
March 2016 Meridian’s current strategic focus Maintaining an open market in which Close known retail profit gap we can compete effectively " Efficiency - full smart meter rollout and * Transmission pricing investment in self service = Renewable Energy Target = Service - significantly improved servic
Slide 14: Financial performance
March 2016 Financial performance FINANCIAL PERFORMANCE AGAINST PRIOR YEAR $M 600 + m Six months ended 31 December 2015 509 500 + jug 480 400 > 332 324 300 + 200 + 11 ay 100 + 64 60 i ot — Energy Other Trans- Operating EBITDAF Margin revenue —_— mission Costs * a Vv an a +2% +6% 50% +7% +8% +$8m +$29
Slide 15: Key financial metrics
Key financial metrics March 2016 3o0Jun 30Jun 30Jun 31Dec SUMMARY GROUP BALANCE SHEET 2013 2014 2015-2015 $M $M $M $M Total Assets 7,737 7,590 7,661 7,628 Total Liabilities 3,049 2,956 2,913 3,104 Equity 4,688 4,634 4,748 4,524 Debt 1,180 1,092 1,076 1,200 BATIOS & MULTIPLES Debt/(Debt+Equity) 20% 2
Slide 16: Dividend policy and capital management
March 2016 Dividend policy and capital management = Dividend policy set to return 75%- 90% of free cash flow = Board approved a capital management programme to return capital to shareholders = Programme will go ahead on the basis that Meridian does not receive a termination notice from NZAS, or any
Slide 17: Funding
March 2016 Funding wm 500 4 = Total borrowings as at 31 December 400 +4 DEBT MATURITY PROFILE AS AT 31 December 2015 2015 of $1,200mM yoo | * Committed bank facilities of $630m as 200 +. 932 at 31 December 2015, of which $325m 360 were undrawn _e Gi 7 El 35 a 1017 , 018 , , 0: , = Minimum headroom r
Slide 18: Standard and Poor's BBB+/Stable
Standard and Poor’s BBB+/Stable
Slide 19: The Offer
The Offer MERIDIAN ENERGY LIMITED 2016 Retail Bond Offer
Slide 20: Key terms of the offer
March 2016 KEY TERMS OF THE OFFER fesior [Meridian cnergylinted Description of the Debt Securities Guarantee Purpose Issue Amount Maturity Date Interest Rate Indicative Issue Margin Interest Payments Brokerage Denominations Direct, unsecured unsubordinated fixed rate bonds The Bonds are guaranteed b
Slide 21: Credit rating note
1A rating is not a recommendation by any rating organisation to buy, sell or hold the 2023 Bonds.The above credit rating is current as at the date of this Presentation and may be subject to suspension, revision or withdrawal at any time by Standard & Poor’s.
Slide 22: Key dates and process
March 2016 KEY DATES AND PROCESS a 1 March Offer open 1-3 March Roadshow -Wellington, Auckland, Dunedin and Christchurch (plus conference call) 7 March Offer closes - bids due 12pm 7 March Allocations and rate set 14 March Issue Date 15 March Expected Quotation Date MERIDIAN ENERGY LIMITED 2016 Reta
Slide 23: Investment Highlights
Investment Highlights MERIDIAN ENERGY LIMITED 2016 Retail Bond Offer
Slide 24: Investment Highlights
March 2016 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 = Crown majo
Slide 25: Questions?
Questions? MERIDIAN ENERGY LIMITED 2016 Retail Bond Offer
Slide 26: Disclaimer
March 2016 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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