Meridian Energy Limited · NZX:MEL
Meridian Energy — Non-Deal Roadshow (2018)
20 slides from Meridian Energy's roadshow presentation, 2018
Slide 1: Meridian Energy Limited Investor Roadshow Presentation
MERIDIAN ENERGY LIMITED INVESTOR ROADSHOW PRESENTATION
Slide 2: The New Zealand Economy
THE NEW ZEALAND ECONOMY MERIDIAN ENERGY LIMITED INVESTOR ROADSHOW PRESENTATION Meridian Energy Limited Investor Roadshow Presentation 2
Slide 3: The New Zealand Economy
THE NEW ZEALAND ECONOMY Stable, open, market orientated economy High ease of doing business and low corruption rankings Seven years of economic expansion, now entering a mature phase Slowing economic growth as housing market, construction and population growth cools Terms of trade are strong and gov
Slide 4: The New Zealand Electricity Market
THE NEW ZEALAND ELECTRICITY MARKET Meridian Energy Limited Investor Roadshow Presentation 4
Slide 5: 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 Quality renewable resources for effective energy markets and secure power system operation” Progressive
Slide 6: The New Zealand Electricity Market
THE NEW ZEALAND ELECTRICITY MARKET 5 major generators (all listed) 1 transmission grid 29 distribution 33 retailers owner (state owned) businesses (44 brands) (various 1 big industrial user ownership (Rio Tinto/Sumitomo structures) smelter) 2.1 million consumers (41 TWh pa) Sources: Electricity Auth
Slide 7: 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 and well-
Slide 8: 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 3% 5% 6% 42% of non-agricultural carbon emissions Electricity could be removed over time through Road transport 17% electrification Stationary energy* Converting this
Slide 9: The New Zealand Electricity Market
THE NEW ZEALAND ELECTRICITY MARKET New Zealand Government is conducting a REAL RESIDENTIAL ELECTRICITY COST review of electricity prices c/KWh 18 An initial paper has been released: +4% Energy affordability can be an issue 15 since 2009 Low income households need better +28% support since 2009 12 Co
Slide 10: The New Zealand Electricity Market
THE NEW ZEALAND ELECTRICITY MARKET Tiwai smelter is 12% of national demand CfD contract with Meridian on NZAS perpetual 12-month termination right Meridian’s modelling suggests smelter is currently making healthy cash profits Additional 50MW contract signed in May 18 Aluminium remains a commodity ex
Slide 11: Meridian Energy
MERIDIAN ENERGY Meridian Energy Limited Investor Roadshow Presentation 11
Slide 12: 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 governance
Slide 13: 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 environment Bac
Slide 14: Strategic Focus
STRATEGIC FOCUS Champion benefits of Support retail growth & protecting competitive markets our generation legacy Competing vigorously Contribution of hydro to 100% Leadership in sustainability in renewable aspiration New Zealand and Australia Maintaining a best in class Supporting wholesale liquidi
Slide 15: Shareholder Highlights
SHAREHOLDER HIGHLIGHTS Five successive years of earnings and EBITDAF $M dividend growth since listing 700 Double digit shareholder returns every year 657 666 650 since listing 650 High free cash flow, high payout ratio, 618 progressive ordinary dividend policy 600 585 Structured capital management p
Slide 16: 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 competing land
Slide 17: 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 very exp
Slide 18: 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 system impa
Slide 19: Meridian's Investment Proposition
MERIDIAN’S INVESTMENT PROPOSITION Strong free NZ retail cash flow load Long term Retail Capital Low capital sustainable platform management needs business changes Potential High Income Growth Flux High free Medium Progressive Powershop cash flow term new ordinary DPS franchise payout generation into
Slide 20: Disclaimer
DISCLAIMER THE INFORMATION IN THIS PRESENTATION WAS PREPARED BY MERIDIAN WITH ANY PURCHASE OF MERIDIAN ENERGY SECURITIES. ENERGY WITH DUE CARE AND ATTENTION. HOWEVER, THE INFORMATION THIS PRESENTATION CONTAINS A NUMBER OF NON-GAAP FINANCIAL IS SUPPLIED IN SUMMARY FORM AND IS THEREFORE NOT NECESSARIL