Meridian Energy Limited · NZX:MEL
Meridian Energy — IPO Roadshow (September 2013)
25 slides from Meridian Energy's IPO roadshow presentation, September 2013
Slide 1: Share Offer Presentation September 2013
meridian SHARE OFFER PRESENTATION September 2073
Slide 2: Disclaimer and Important Information
Disclaimer and Important Information Your attendance at this presentation constitutes your agreement to be bound by the following terms and conditions. Meridian Energy Limited (the Company) and Her Majesty the Queen in Right of New Zealand (the Crown) have registered a combined Investment Statement
Slide 3: The offer / About Meridian / Additional information
= The offer Offer terms Instalment receipts Indicative key offer dates Investment highlights and key risks = About Meridian The business Strategy, governance and structure Generation assets Retail Financial performance Forecast performance " Additional information Financial performance Operating inf
Slide 4: The Offer
SHARE OFFER PRESENTATION September 2013 PG4
Slide 5: Offer Terms
Offer Terms The offer Indicative price range’ $1.50 to $1.80 per Share, paid in two instalments Final price payable by New Zealand applicants in the Retail Offer is capped at $1.60 per Share, if they hold their instalment receipts in the same registered name until 4 May 2015 First instalment $1.00 p
Slide 6: Instalment Receipts
Installment Receipts The offer Instalment receipt holders receive any dividends paid between instalment payments in full Provides an enhanced yield in the 18 months prior to payment of the final instalment. After the end of this period, dividends return to underlying levels for Shares Dividend polic
Slide 7: Indicative Key Offer Dates
Indicative Key Offer Dates The offer Broker firm bids due 12pm Friday 27 September 2013 Retail offer opens Monday 30 September 2013 Retail offer closes (5.00pm) Friday 18 October 2013 Institutional offer and bookbuild 21 - 23 October 2013 Pricing announced Wednesday 23 October 2013 Allocations expec
Slide 8: Investment Highlights and Key Risks
Investment Highlights and Key Risks SHARE OFFER PRESENTATION September 2013 PGs
Slide 9: Investment Highlights
Investment Highlights = New Zealand’s largest generator New Zealand’s largest hydro generator and largest wind farm operator” Producing approximately 30% of the country’s electricity? Over 270,000 customer connections through Meridian and Powershop brands'3 Electricity - an essential service underpi
Slide 10: Investment Highlights
Investment Highlights Investment highlights and key risks = Strong and stable operating cash flows High quality assets with low operating costs Major asset refurbishments recently completed Forecast stay in business capital expenditure of $65m per annum, depreciation of $233m in FY2015 = Proven resu
Slide 11: Key Risks
Key Risks Investment highlights and key risks * Tiwai Point aluminium smelter consumption MERIDIAN GENERATION” GWh = Labour-Green proposed market reform 15,000 = Availability of water 12,000 Drives short-term wholesale price volatility 9,000 Adverse hydrological conditions can impact earnings 6,000
Slide 12: About Meridian
About Meridian SHARE OFFER PRESENTATION September 2013 PG 12
Slide 13: The Business
The Business About Meridian A vertically integrated renewable energy generator and ELECTRICITY GENERATION BY COMPANY IN FY2013 retailer Other 4% TrustPower 5% New Zealand's largest generator producing approximately 30% of the country’s electricity’? Meridian Energy 30% Will be among the country’s la
Slide 14: Strategy, Governance and Structure
Strategy, Governance and Structure About Meridian =" Strategy An efficient, vertically integrated electricity generation and retail company A developer of renewable generation in Australia, when market conditions are supportive =" Governance Board consisting of nine non-executive directors with exte
Slide 15: Generation Assets
Generation Assets About Meridian =" Hydro Seven hydro stations — long life assets with low operating costs Highly flexible plant with New Zealand’s largest storage Benchmark operational efficiency”’ and low future capital needs =" Wind Five wind farms in operation and 2 under construction oe at Unsu
Slide 16: Retail
Retail About Meridian wZ ee “7 ee _ ®@ arcinnovations meridian Abetter power company = 220,000 customers?3 = 50,000 customers?3 Strong presence inthe Wholly owned subsidiary South Island agricultural sector offering unique, innovative, Recent investments improving online retail experience billing sy
Slide 17: Financial Performance
Financial Performance? About Meridian =" FY2011 Included margin contribution from Tekapo power stations sold to Genesis in June 2011 Included gain on sale resulting from that sale and a special dividend =" FY2012 Impacted by 82 year record low hydro inflows = FY2013 Improved hydro inflows compared t
Slide 18: Forecast Performance
Forecast Performance About Meridian FY2014F FY2015F EBITDAF?5 $548.4m $590.1M Underlying NPAT?5 $161.5m $179.4mM Free Cash Flow?5: 26 $335.5m $368.7M EV/EBITDAF multiple?” 9.1X - 10.5X 8.4X - 9.7X Price/earnings ratio?® 20.5X — 24.6x 18.2X — 21.9x Indicative market capitalisation?9 $3,844.5m to $4,6
Slide 19: Additional Information
Additional Information SHARE OFFER PRESENTATION September 2013 PG19
Slide 20: Financial Performance
Financial Performance Additional information = New investment expenditure FY2014 and FY2015 forecasts reflect the construction of the Mill Creek and Mt Mercer wind farms = Stay in business expenditure Ongoing generation asset management, IT systems maintenance and maintaining future generation devel
Slide 21: Operating Information
Operating Information Additional information = Generation CONTRACTED SALES GWh $/MWh 15,000 120 FY2014 and FY2015 forecasts based on the average of the last 82 years of inflows combined with other e e 100 supply and demand assumptions 6,873 6,903 7,013 6,630 6,399 10,000 80 = Retail 60 Stable contra
Slide 22: 5-Year Financial Information
5-Year Financial Information?> Additional information $M (unless stated) FY2011 FY2012 FY2013 FY2014F FY2015F Energy Margin 950.3 763.2 915.8 915.1 958.6 Transmission expenses (84.2) (86.7) (115.3) (135.6) (134.2) Employee & other operating expenses (238.1) (227.2) (245.4) (254.1) (257.3) EBITDAF 65
Slide 23: Meridian's Board
Meridian’s Board Additional information Nine non-executive directors with diverse experience in the sector and large NZX listed companies “" Chris Moller Meridian Chair, director since May 2009 Also Chair of SKYCITY Previously Deputy Chief Executive of Fonterra Mary Devine Chair of the Remuneration
Slide 24: The Industry
The Industry Additional information = New Zealand Five large, vertically integrated generator/retailers 74% of generation from unsubsidised renewables*® Regulated transmission and distribution networks Two million consumers Australia National Electricity Market3? (NEM) is the major wholesale market,
Slide 25: The New Zealand Industry
The New Zealand Industry Additional information New Zealand Electricity Industry < akon $ 1 WHOLESALE COMMERCIAL USERS RESIDENTIAL USERS ELECTRICITY MARKET GENERATION TRANSMISSION DISTRIBUTION RETAILERS Major generators State-owned national Distribution businesses Electricity retail brands produced