Meridian Energy Limited · NZX:MEL
Meridian Energy — Investor Day (November 2017)
19 slides from Meridian Energy's investor day presentation, Nov 1, 2017
Slide 1: Meridian Energy Craigs Investor Day Presentation
For personal use only Meridian Energy Craigs Investor Day Presentation 1 November 2017 Attached is a presentation Meridian Energy Limited is making at a Craigs Investment Partners investor day on 2 November 2017. ENDS Mark Binns Chief Executive Meridian Energy Limited For investor relations queries,
Slide 2: Craigs Queenstown Investor Day: Meridian Energy Management Presentation
CRAIGS For personal use only QUEENSTOWN INVESTOR DAY. MERIDIAN ENERGY LIMITED MANAGEMENT PRESENTATION
Slide 3: Meridian – a reminder
Meridian – a reminder. $7b company, listed in 2013, 51% For personal use only Government owned • New Zealand’s largest generator, from purely renewable sources • Seven big hydro stations – flexible plant with the country’s largest storage • Very long life, highly efficient assets • With low operating c
Slide 4: Meridian – a reminder: Large generator, smaller retailer
Meridian – a reminder. GENERATION AND CONTRACTED SALES Large generator, smaller retailer For personal use only GWH 82% 82% 80% 81% • Second smallest retailer of the five gentailers (by customer numbers) • Typical long generation position to 13,148 13,332 13,707 13,315 manage variable hydro inflows 10,
Slide 5: Shareholder highlights
Shareholder highlights. Five successive years of earnings growth Higher dividends every year since listing For personal use only EBITDAF1 DIVIDENDS DECLARED TOTAL CPS $650M $653M 18.91 18.23 18.38 $618M $584M $585M 13.01 $477M 2012 2013 2014 2015 2016 2017 2014 2015 2016 2017 Financial Year ended 30
Slide 6: Meridian's FY17 earnings
For personal use only Meridian’s FY17 earnings. NZ wholesale $588M NZ retail $75M Australia $34M Other/corporate -$38M FY17 EBITDAF $653M Source: Meridian Meridian Energy Limited Craigs Investor Day 2 November 2017 5
Slide 7: September quarter
September quarter. High August and September 2017 monthly MERIDIAN'S WAITAKI STORAGE For personal use only GWh 2,500 inflows 2,000 • September quarter inflows were 131% of average 1,500 • Meridian’s Waitaki storage now at 121% of 1,000 average 500 • Compared to the September quarter last 0 year: 1-Jan
Slide 8: New technologies: Solar
New technologies. Solar For personal use only • Solar uptake increasing in NZ as economics slowly improve • NZ residential capacity factors are low (13%-15%) and payback high (13 years) • Commercial solar opportunities are being developed • Our agreement with Kiwi Property will see them being NZ’s l
Slide 9: New technologies: Batteries
New technologies. Batteries For personal use only • Battery value for energy management is in load shifting (high to low price periods) • Grid scale unlikely in NZ due to large hydro storage • Grid scale possible in Aus with subsidy support • Solar and batteries to achieve residential off-grid in NZ
Slide 10: New technologies: Electric vehicles
New technologies. Electric vehicles For personal use only • EV levels are growing in NZ (currently 3,500 pure EV and 1,500 hybrids) • Government and company fleet conversions increasing • Meridian will have converted 50% of its passenger fleet by June 2018 • NZ uptake dependent on the second hand impo
Slide 11: NZ demand
NZ demand. Little demand growth in the last 7 years ANNUAL DEMAND CHANGE SINCE 2010 For personal use only • + Economic growth +2.6% • + Positive net migration +1.1% • - Industrial and manufacturing closure +0.3% • - Warmer than average temperatures -0.1% -0.6% • - Growing impact of technology and -0
Slide 12: Tiwai Point smelter
Tiwai Point smelter. 12% of New Zealand’s total annual demand For personal use only • CfD contract with Meridian on NZAS perpetual 12-month termination right • International aluminium is recovering, prices up 19% this year • Meridian’s modelling suggests smelter is currently making healthy cash profi
Slide 13: Growth opportunities: New Zealand
Growth opportunities. New Zealand AVERAGE RESIDENTIAL ELECTRICITY COST For personal use only c/kWh • Low growth in a highly competitive market • Retail electricity price increases have 28.6 28.1 28.8 27.8 been less than inflation, not expected to 26.9 change Energy +1% +3% +0% -3% +1% • Wholesale pri
Slide 14: Growth opportunities: Australia, UK and Europe
Growth opportunities. Australia For personal use only • Potential retail growth off the back of new offtake agreements • Dual fuel offering will support further uptake in Victoria • Unlikely to build new generation in the current environment UK and Europe • Powershop now in-market in the UK through a f
Slide 15: The political scene: New Zealand
The political scene. New Zealand For personal use only • Conversion of the Govt car fleet to electric by 2025/26 is positive • Meridian is supportive of an independent Climate Change Commission • Case for fairer transmission charging remains compelling • Greater focus on water quality • Resource rent
Slide 16: The political scene: Australia
The political scene. Australia For personal use only • Market is slow to commit to new renewables due to the lack of coherent energy policy • Proposed National Energy Guarantee may provide a better solution • Market has experienced several widespread outages and unplanned industrial load shedding •
Slide 17: Shareholder value
For personal use only Shareholder value. Strong free cash NZ retail flow load Capital Low Long term Retail manage capital sustainable platform ment needs business review High Potential Income Growth Powershop Progressive High free Medium franchise ordinary cash flow term new into the DPS payout genera
Slide 18: Disclaimer
Disclaimer. The information in this presentation was prepared by Meridian Energy with This presentation contains a number of non-GAAP financial measures, For personal use only due care and attention. However, the information is supplied in summary including Energy Margin, EBITDAF, Underlying NPAT and
Slide 19: Thank you
For personal use only Thank you.