Meridian Energy Limited · NZX:MEL
Meridian Energy — Non-Deal Roadshow (October 2018)
17 slides from Meridian Energy's roadshow presentation, October 2018
Slide 1: Investing in New Zealand Management Presentation
I N V EST I N G I N N E W Z EA L A N D M A N AG E M E NT P R ES E N TAT I O N
Slide 2: The New Zealand Electricity Market
THE NEW ZEALAND ELECTRICITY MARKET Meridian Energy Limited Investing in New Zealand October 2018 2
Slide 3: The New Zealand Electricity Market
THE NEW ZEALAND ELECTRICITY MARKET ▪ Delivering a reliable, affordable and environmentally sustainable electricity system ▪ A well functioning market, characterised by: “New Zealand serves as a model for effective energy ▪ Quality renewable resources markets and secure power ▪ Progressive regulatory
Slide 4: The New Zealand Electricity Market
THE NEW ZEALAND ELECTRICITY MARKET 5 major generators 33 retailers (all listed) (44 brands) 1 big industrial user 1 transmission grid 29 distribution (Rio Tinto/Sumitomo owner (state owned) businesses smelter) (various 2.1 million ownership consumers structures) (41 TWh pa) 2017 GENERATION MIX 2017
Slide 5: The New Zealand Electricity Market
THE NEW ZEALAND ELECTRICITY MARKET ▪ New Zealand’s hydro generation is managed against limited controlled storage ▪ Bulk of hydro inflow is anti-correlated to winter demand peak ▪ Thermal capacity and fuel storage manages potential hydro inflow deficit and other renewable intermittency ▪ Efficient a
Slide 6: The New Zealand Electricity Market
THE NEW ZEALAND ELECTRICITY MARKET ▪ Market will be the key enabler of greater NZ 2016 SECTOR EMISSIONS decarbonisation in New Zealand Electricity 6% 3% 5% Road transport 17% ▪ 42% of non-agricultural carbon emissions could be Stationary energy* removed over time through electrification Agricultural
Slide 7: The New Zealand Electricity Market
THE NEW ZEALAND ELECTRICITY MARKET ▪ New Zealand Government is conducting a review of REAL RESIDENTIAL ELECTRICITY COST electricity prices c/KWh 18 +4% ▪ An initial paper has been released: 15 since 2009 ▪ Energy affordability can be an issue +28% ▪ Low income households need better support 12 since
Slide 8: Meridian Energy
MERIDIAN ENERGY Meridian Energy Limited Investing in New Zealand October 2018 8
Slide 9: About Meridian Energy
ABOUT MERIDIAN ENERGY ▪ NZ$ 8b company, listed in 2013, 51% Government owned ▪ Largest and most liquid of five listed New Zealand retailer generators ▪ The only New Zealand electricity company with a customer and asset base diversified across different countries ▪ Strong environmental, social and go
Slide 10: About Meridian Energy
ABOUT MERIDIAN ENERGY ▪ New Zealand’s largest generator, all production from renewable sources ▪ Seven big hydro stations – flexible plant with the country’s largest storage ▪ With low operating costs and capital needs ▪ Five New Zealand wind farms and proven success operating in a high wind environ
Slide 11: Strategic Focus
STRATEGIC FOCUS Champion benefits of competitive Support retail growth & protecting our markets generation legacy ▪ Competing vigorously ▪ Contribution of hydro to 100% ▪ Leadership in sustainability in New renewable aspiration Zealand and Australia ▪ Maintaining a best in class generation ▪ Support
Slide 12: Shareholder Highlights
SHAREHOLDER HIGHLIGHTS ▪ Five successive years of earnings and dividend EBITDAF $M growth since listing 700 666 650 657 ▪ Double digit shareholder returns every year since 650 listing 618 600 585 ▪ High free cash flow, high payout ratio, progressive ordinary dividend policy 550 2014 2015 2016 2017 2
Slide 13: New Technologies
NEW TECHNOLOGIES ▪ Solar uptake increasing in New Zealand as economics slowly improve ▪ New Zealand residential capacity factors are low (13%-15%) and payback high (13 years) ▪ Commercial solar opportunities are being developed ▪ Grid scale solar unlikely in New Zealand in the near term with competi
Slide 14: New Technologies
NEW TECHNOLOGIES ▪ Battery value for energy management is in load shifting (high to low price periods) ▪ Grid scale unlikely in New Zealand due to large hydro storage ▪ Grid scale possible in Australia with subsidy support ▪ Solar and batteries to achieve residential off-grid in New Zealand remains
Slide 15: New Technologies
NEW TECHNOLOGIES ▪ Electric vehicle levels are growing in New Zealand ▪ Government and company fleet conversions increasing ▪ Meridian will have converted 80% of its passenger fleet by 2020 ▪ New Zealand uptake dependent on the second- hand import market, so expected to be gradual ▪ Uptake may have
Slide 16: Meridian's Investment Proposition
MERIDIAN'S INVESTMENT PROPOSITION Strong free NZ retail cash flow load Capital Low capital Long term Retail management needs sustainable platform business changes High Income Potential Growth High free Flux Progressive Medium cash flow Powershop ordinary DPS term new payout franchise generation into
Slide 17: Disclaimer
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 informatio