Mercury Nz Ltd. · NZX:MCY
Mercury Nz — Non-Deal Roadshow (November 2019)
34 slides from Mercury Nz's roadshow presentation, Nov 15, 2019
Slide 1: Mercury Investor Presentation 2019 news release
STOCK EXCHANGE LISTINGS: NZX (MCY) / ASX (MCY) For personal use only NEWS RELEASE Mercury Investor Presentation 2019 15 November 2019 – Mercury will be giving presentations at a series of international investor meetings during November and December 2019. The presentation materials are attached. END
Slide 2: Mercury Investor Presentation
For personal use only Mercury INVESTOR PRESENTATION FRASER WHINERAY WILLIAM MEEK Chief Executive Chief Financial Officer November 2019 TIM THOMPSON Head of Treasury & Investor Relations Mercur ye
Slide 3: Disclaimer
DISCLAIMER This presentation has been prepared by Mercury NZ Limited and its group of companies (“Company”) for informational purposes. This disclaimer applies to this document and the verbal or written comments of any person presenting it. Information in this presentation has been prepared by the C
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Slide 5: Country & Industry
qf: Ge GOUNTRY &INDUSIR y : Paes Se Py 2 Whakamaru Power Station
Slide 6: New Zealand's Competitive Advantage in Electricity
NEW ZEALAND'S COMPETITIVE ADVANTAGE IN ELECTRICITY “ It is aworld leading example of a well- “ New Zealand is the only Asia-Pacific country functioning energy market, which continues in the overall top ten and has been there to work effectively: m consistently since 2000, demonstrating longstanding
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Slide 14: No Clear Catalyst for Wholesale Price Reversion in the Near Term
NO CLEAR CATALYST FOR WHOLESALE PRICE REVERSION IN THE NEAR TERM HYDRO STORAGE VS. SPOT ELECTRICITY PRICE oy we 36 3 $I 3 ro Otahuhu Spot Price ($/MWh) a a oO e@ FY2018 @ FY2019 © FY2020 From Jan-99 a Lo a 00 NEW SUPPLY (GWh)! 4,000 3,000 2,000 1,000 < = OF & -1,000 -2,000 -3,000 -4,000 -1000 FY2020
Slide 15: Ngatamariki Power Station
Ngatamariki Power Station
Slide 16: Mercury at a Glance
MERCURY AT A GLANCE Iowease 0 7,4606Wh ANNUAL GENERATION Vertically integrated 100% renewable generator and retailer GEOTHERMAL, 2,600GWh KEY INFORMATION! 519% Ticker Codes: MCY.NZ / MCY.AX “CUSTOMERS Market Capitalisation: NZ$6.7 billion Enterprise Value: NZ$7.7 billion Average Daily Turnover: NZ$3
Slide 17: Mercury's Competitive Advantage
MERCURY'S COMPETITIVE ADVANTAGE 100% renewable generation > Two low-cost complementary fuel sources in baseload geothermal and peaking hydro with wind to be added Superior asset location > North Island generation located near major load centres; rain-fed hydro catchment inflows aligned with winter p
Slide 18: Mercury's Financial Track Record
MERCURY'S FINANCIAL TRACK RECORD ESITDAF 600 CAGR: ~3% 400 E & 200 0) ceEN OXY HY VE LAES s8S55555 5558 g RRRers<F ea § Financial Year (ending 30 June) GENERATION VS SALES =Geo Hydro 10,000 Thermal 50 —- hh Taam = |} PPP PEt bd df f = 0 co} -5,000 10,000 a S ts 3° a 0 SV aaguann Financial Year (endi
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Committed $208m TI9MW | 4 Committed SS National Grid Committed 220kV Transmission Consented future 220kV Transmission & Turbine Zone
Slide 21: Balanced Portfolio of Generation and Sales
BALANCED PORTFOLIO OF GENERATION AND SALES > Mercury operates an integrated portfolio with electricity sales to customers providing a natural price hedge to generation > Average net long position with movement year-on- year due to hydrology, plant availability and quantity of sales > Turitea wind fa
Slide 22: Focus on Rewarding the Loyalty of Our Existing Customers
FOCUS ON REWARDING THE LOYALTY OF OUR EXISTING CUSTOMERS >In a highly competitive retail market, Mercury is focused on rewarding our existing customers > Mercury moving away from the industry norm of aggressive discounted acquisition, consistent with our focus on loyalty > Reduced Mass Market volume
Slide 23: Focus on Operational Excellence
FOCUS ON OPERATIONAL EXCELLENCE > Opportunities exist to deliver greater productivity, efficiency and portfolio value at Mercury improving energy margin and lowering operating and capital costs. Targeting $20m of benefit by FY2022. Key themes: > Value optimisation: Customer Lifetime Value (CLV) and
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Slide 26: New Zealand Overview
NEW ZEALAND OVERVIEW KEY FACTS Credit Rating: AA/stable Population: 4.9 million! GDP: NZ$296 billion (or US$188 billion)? Official Cash Rate (OCR): 1.0%! 10yr Interest Rate: 1.3%! >Stable political environment > Mixed Member Proportional (MMP) system > Two main parties - National (centre-right) and
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Slide 28: Mercury's Hydro Advantage
MERCURY'S HYDRO ADVANTAGE > Positive correlation of seasonal North Island hydro inflows with demand > Normally inflows into Mercury's North Island hydro catchment peak in winter to match peak winter demand > Complemented by non-weather-dependent baseload geothermal AVERAGE SOUTH ISLAND INFLOWS VS DE
Slide 29: Mercury's Hydro Advantage
MERCURY'S HYDRO ADVANTAGE > Large South Island (SI) hydro catchments and associated hydrology affect wholesale prices > High South Island hydro storage normally coincides with lower wholesale prices (and vice versa) > Mercury's North Island (NI) hydro catchment has low correlation to wholesale price
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Slide 31: Diversified Funding Profile
DIVERSIFIED FUNDING PROFILE DEBT MATURITIES AS AT 20 AUGUST 2019 = Commercial Paper = Domestic Wholesale Bonds $m 500 450 400 350 300 250 200 150 100 US Private Placement @ Undrawn Bank Facilities = Undrawn Rolling Bank Facilities’ mMCY020 Bonds 2020 2021 2022 2023 2024 Financial Year 2025 2026 2027
Slide 32: Supplementary Dividend Payable to Eligible Foreign Investors
SUPPLEMENTARY DIVIDEND PAYABLE TO ELIGIBLE FOREIGN INVESTORS > Reduces or eliminates the economic impact of Non-Resident Withholding Taxes > For illustrative purposes see below worked example for a corporate investor. This should not be interpreted as tax advice NZ investor Foreign investor No Suppl
Slide 33: Reference Material
REFERENCE MATERIAL MERCURY REFERENCES Mercury Investor Centre Quarterly Operational Updates FY2019 Results Presentation Governance Presentation - December 2018 PUBLICATIONS https://www.mercury.co.nz/investors https://www.mercury.co.nz/investors/results-reports/operating-information https://issuu.com
Slide 34: For Further Information
For personal use only FOR FURTHER INFORMATION > TIM THOMPSON | HEAD OF TREASURY & INVESTOR RELATIONS T. +64 275 173 470 E. INVESTOR@MERCURY.CO.NZ