Contact Energy Limited · NZX:CEN
Contact Energy — Investor Presentation (September 2023)
28 slides from Contact Energy's investor presentation, Sep 29, 2023
Slide 1: Investor Presentation: Contact Energy Introduction
29 September 2023 Investor Presentation: Contact Energy Introduction Released today is a Contact Energy introductory presentation for use in international investor meetings. It includes an update to the target online date for the Tauhara geothermal project For personal use only from Q4 2023 to Q1 20
Slide 2: Contact Energy Introduction
For personal use only Contact Energy Introduction International Engagements | September 2023 1
Slide 3: Disclaimer and important information
Disclaimer and important information While all reasonable care has been taken in compiling this presentation, neither Contact EBITDAF, free cash flow and operating free cash flow are financial measures that are nor any of its directors, employees, shareholders nor any other person gives any “non-GAA
Slide 4: Content
Content For personal use only 1 Introduction to New Zealand’s Electricity Sector 4–9 2 Contact Energy Overview 10 – 24 3 Appendix: Supporting information 25 – 27 3
Slide 5: Introduction to New Zealand's electricity sector
Introduction For personal use only to New Zealand’s electricity sector 4
Slide 6: New Zealand enjoys a reliable, affordable and environmentally sustainable electricity system
New Zealand enjoys a reliable, affordable and environmentally sustainable electricity system For personal use only Competitive Regulated monopolies Competitive Spot 4 electricity pool 1 29 8 2.3 Major generators National Distribution Retailers Million consumers transmission businesses over 50k conne
Slide 7: NZ electricity supply is highly renewable
NZ electricity supply is highly renewable Contact has led the way in decarbonising the NZ electricity system through geothermal development For personal use only Electricity generation carbon emissions (units of CO2e) Current national quarterly supply and demand (TWh) Calendar year Measured at the s
Slide 8: Electrification will reduce carbon emissions
Electrification will reduce carbon emissions With New Zealand's high renewable penetration, electricity is the solution to reducing carbon emissions, not the problem Greenhouse gas Government’s The Climate Change Commission expects electricity demand to For personal use only emissions by sector firs
Slide 9: The market quickly responds to changes in supply and demand by sending price signals
The market quickly responds to changes in supply and demand by sending price signals And the fundamental requirement for thermal to support a hydro dominated system supports forward electricity prices For personal use only Short-term external factors that Wholesale and futures electricity pricing ($
Slide 10: Why invest in New Zealand?
Why invest in New Zealand? New Zealand has an open economy that works on free market principles For personal use only Market oriented economy Stable banking sector with Comparatively Reserve Bank low-developed Ease of doing Policies to Strong supervision country business business promote skills inte
Slide 11: Contact Energy Overview
Contact For personal use only Energy Overview 10
Slide 12: Why invest in Contact?
Why invest in Contact? The investment opportunity in our core market is large and in line with our unique capability which will deliver cash flow growth ultimately flowing through to dividends For personal use only <IR> ESG CREDENTIALS Strong balance sheet to support growth investment; Shares offer
Slide 13: Contact is one of New Zealand's most significant companies
Contact is one of New Zealand’s most significant companies For personal use only It is an owner and operator of low-cost, long-life renewable generation assets and is developing its consented geothermal development options 86% Long term renewable contract for gas storage generation 5-year average 5
Slide 14: Contact has a diversified and resilient portfolio of generation assets
Contact has a diversified and resilient portfolio of generation assets 5 year average generation by station and type (FY19-FY23)1 Where we are For personal use only 8.4TWh Under construction ~1,870 average 3,908GWh generated Roxburgh (320 MW) 1,746 3,234GWh Te Huka (27 MW) 181 Ohaaki (41 MW) 319 Poi
Slide 15: Our strategy to lead NZ's decarbonisation
Our strategy to lead NZ’s decarbonisation For personal use only Strategic Grow Grow renewable Decarbonise Create outstanding theme demand development our portfolio customer experiences Objective Attract new industrial demand with Build renewable generation and Lead an orderly transition Create NZ's
Slide 16: Contact has a clear path towards a long-term thermal asset solution
Contact has a clear path towards a long-term thermal asset solution Decarbonise our portfolio For personal use only Horizon Otahuhu closed in 2015 Peakers to be retained, medium term, to assist orderly transition 1 without threatening stable, affordable electricity supply Market testing of ThermalCo
Slide 17: Our pathway to Net Zero for Scope 1 and 2 emissions by 2035
Our pathway to Net Zero for Scope 1 and 2 emissions by 2035 Decarbonise our portfolio For personal use only Current emission breakdown Decarbonisation pathway (ktCO2e) (ktCO2e) 92 788 -207 Te Rapa SBTI FY26 target 648 ktCO2e -287 TCC -36 -51 299 -128 -148 -189 FY22 scope 1 New emissions (Tauhara Lon
Slide 18: Showing clear leadership in responsible decarbonisation of NZ's electricity supply
Showing clear leadership in responsible decarbonisation of NZ’s electricity supply Decarbonise our portfolio By investing to displace baseload thermal generation at Te Rapa and TCC and innovating For personal use only to reduce NZ’s reliance on fast start peakers for system security FY12 FY18 FY22 F
Slide 19: Key partnerships to advance demand growth
Key partnerships to advance demand growth Contact has developed a view of relative netbacks across applications and Grow will focus on those of highest value demand For personal use only Large scale data centres Entered into 10-year renewable energy agreement with Microsoft on new geothermal power s
Slide 20: Market leading renewable development pipeline
Market leading renewable development pipeline Contact has built a renewable electricity development pipeline of >6TWh, and is targeting 10.3TWh of Grow renewable generation output online by end of FY27 renewables development For personal use only 6.5TWh Planned and consented renewable energy develop
Slide 21: Geothermal investment programme underway
Geothermal investment programme underway Supporting the decarbonisation of New Zealand by building world class geothermal power stations Grow renewables development For personal use only Tauhara Te Huka 3 GeoFuture3 Size (TWh p.a) 1.4 0.4 1.44 FID date Feb 2021 Aug 2022 Early 2024 Online date Q1 202
Slide 22: We've developed the capability to execute large capital projects through our Major Projects office
We’ve developed the capability to execute large capital projects through our Major Projects office Grow renewables development For personal use only Tauhara Te Huka 3 GeoFuture Wind Solar Battery Organisation Design Capability Construction Clear vision and leadership Design Efficiency through scope
Slide 23: Contact's retail business
Create Contact’s retail business outstanding customer experiences An innovative customer-focussed business with multiple service offerings Electricity is purchased from the wholesale business at an Retail electricity market-share by customer connections For personal use only arm's length internal tr
Slide 24: Scaling retail business through adjacencies
Create Scaling retail business through adjacencies outstanding customer experiences Incremental margin and improved customer experiences drive increased customer lifetime value For personal use only Broadband: Broadband connections Multi product attachment Multi-product churn benefit Growing continu
Slide 25: Contact expects to deliver near term uplift in renewable generation and EBITDAF
Contact expects to deliver near term uplift in renewable generation and EBITDAF Further substitution of baseload gas generation for low cost geothermal to drive EBITDAF margin uplift For personal use only Renewable generation – Annual output (TWh) EBITDAF Guidance vs Actual ($m)3 (Exit run-rate illu
Slide 26: Appendix: Supporting information
Appendix: For personal use only Supporting information 25
Slide 27: We have stepped up our ambitions for the delivery of Contact26
We have stepped up our ambitions for the delivery of Contact26 And we have committed to reach net zero (Scope 1&2) by 2035 For personal use only Strategic pillar FY27 ambitions1 Facilitate 100MW of new demand. Grow demand Reach 100MW total Demand Flex and start pivoting to Demand Response. New green
Slide 28: Integrated portfolio performance
Integrated portfolio performance Operating earnings (EBITDAF) 1 Electricity sales Continuing operations ($m) (i) Long-term channels (ii) Market channels 553 131 133 133 546 115 Price For personal use only 105 108 106 ($/MWh) 103 5051 573 EBITDAF 5.08 5.14 93 4.94 Price 87 446 4.59 4.57 ($/MWh) 3.73
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