Meridian Energy Limited · NZX:MEL
Meridian Energy — Investor Presentation (October 2018)
14 slides from Meridian Energy's investor presentation, October 2018
Slide 1: NZX Retail Investor Evening Management Presentation
N Z X R E TA I L I N V E S T O R E V E N I N G M A N A G E M E N T P R E S E N TAT I O N
Slide 2: NZ Electricity Sector
NZ ELECTRICITY SECTOR Main participants are listed ELECTRICITY COMPANIES MARKET CAP $B 10 ▪ Five large retailer generators 9 ▪ $10b free float 8 7 ▪ Defensive, high yield characteristics 6 ▪ Frequently seen as bond proxies 5 4 ▪ Competing in a market with low growth in 3 the last decade 2 1 0 Meridi
Slide 3: Meridian Energy
MERIDIAN ENERGY $8.5b company, listed in 2013, 51% Government owned ▪ Largest of the five retailer generators ▪ 420,000 customers in three countries ▪ Diversified NZ customer sales, weighted towards business, commercial and agricultural ▪ 40% of generation covered by Tiwai Point contract (price guar
Slide 4: Meridian Energy
MERIDIAN ENERGY NZ’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 NZ wind farms, two in Australia ▪ Proven success operating in a high wind environment ▪ Bac
Slide 5: How We Make Money
HOW WE MAKE MONEY Selling Buying electricity we electricity from Selling generate to the wholesale $M electricity the wholesale market for to retail market customers Selling that 2,400 customers electricity to Selling the wholesale electricity market Costs of the 2,000 to Buying inter island wholesa
Slide 6: NZ Electricity Demand
NZ ELECTRICITY DEMAND Little demand growth in the last decade DEMAND FORECASTS TWh 90 NZ Historical Demand ▪ + Economic growth Transpower ▪ + Positive net migration 80 MBIE - High MBIE - Low ▪ - Industrial and manufacturing closure 70 Productivity Comm. - High Productivity Comm. - Low ▪ - Warmer tha
Slide 7: NZ Electricity Demand
NZ ELECTRICITY DEMAND Zero Carbon New Zealand by 2050 NZ 2016 SECTOR EMISSIONS ▪ Agriculture means NZ has one of the 6% 3% 5% highest per capita rates of emissions Electricity 17% ▪ 32 million tonnes of carbon emissions Road transport from the wider (non-agricultural) sector Stationary energy* could
Slide 8: Politics and Regulation
POLITICS AND REGULATION New Zealand REAL RESIDENTIAL ELECTRICITY COST c/KWh 20 ▪ Policy support is increasing the pace of 18 NZ’s climate change actions 16 ▪ Government’s electricity price review has 14 12 delivered its first report 10 ▪ Energy affordability can be an issue 8 6 ▪ Low income househol
Slide 9: Tiwai Point Aluminium Smelter
TIWAI POINT ALUMINIUM SMELTER 12% of New Zealand’s total annual demand ▪ CfD contract with Meridian on NZAS perpetual 12-month termination right ▪ International aluminium is recovering, LME prices up 13% in the last year ▪ Additional 50MW contract signed ▪ Aluminium remains a commodity exposed to cy
Slide 10: New Technologies
NEW TECHNOLOGIES Solar ▪ 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 ▪ Grid scale solar unlikely in NZ with competing land uses and winter peak demand ▪
Slide 11: New Technologies
NEW TECHNOLOGIES Batteries ▪ 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 Australia with subsidy support ▪ Solar and batteries to achieve residential off-grid in NZ remains very exp
Slide 12: Climate Change
CLIMATE CHANGE We have seen ▪ No significant change to catchment inflows over the last 100 years ▪ Some seasonal shift in inflows; drier autumns, wetter summers ▪ Snowpack and glaciers getting smaller It is projected to get Genesis Energy’s Tekapo B power station ▪ Wetter in our catchments, includin
Slide 13: Shareholder Value
SHAREHOLDER VALUE Strong free NZ retail cash flow load Capital Low capital Long term Retail sustainable platform management needs business changes High Potential Income Growth High free Flux Progressive Medium Powershop cash flow term new ordinary DPS franchise payout into the UK generation Continue
Slide 14: The information in this presentation was prepared by Meridian Energy with due care and
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 information. In addit
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