Meridian Energy Limited · NZX:MEL
Meridian Energy — Investor Presentation (July 2018)
13 slides from Meridian Energy's investor presentation, July 2018
Slide 1: Meridian Energy NZX Retail Investor Evening Management Presentation
MERIDIAN ENERGY. NZX RETAIL INVESTOR EVENING MANAGEMENT PRESENTATION
Slide 2: NZ electricity sector
NZ electricity sector. Main industry participants are listed • Five large retailer generators • $10b free float • Defensive, high yield characteristics • Frequently seen as bond proxies • Competing in an electricity market with low growth in the last decade Source: NZX Meridian Energy Limited NZX Re
Slide 3: Meridian Energy
Meridian Energy. $8b company, listed in 2013, 51% Government owned • The largest of the five vertically integrated NZ retailer generators • 420,000 customers in 3 countries • Diversified NZ customer sales, weighted towards business, commercial and agricultural • 40% of generation covered by Tiwai Po
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 • Ba
Slide 5: NZ demand
NZ demand. Little demand growth in the last decade • + Economic growth • + Positive net migration • - Industrial and manufacturing closure • - Warmer than average temperatures • - Growing impact of technology and efficiency gains • +/- Variable irrigation load depending on Source: Meridian Energy ra
Slide 6: Tiwai Point smelter
Tiwai Point 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 cycles and
Slide 7: New technologies: Solar
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 8: New technologies: Batteries
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 ex
Slide 9: 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, inclu
Slide 10: The political scene
The political scene. New Zealand • A carbon neutral NZ by 2050 will need increased electrification • 100% renewable generation by 2035 will need to address NZ’s dry year challenge • Wide ranging electricity price review in Energy +1% +3% +0% -3% +1% -1% progress, focus on fairness and equity Lines +
Slide 11: 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 Continu
Slide 12: Thank you
Thank you. meridian
Slide 13: Disclaimer
Disclaimer. The information in this presentation was prepared by Meridian Energy securities. with due care and attention. However, the information is supplied in This presentation contains a number of non-GAAP financial measures, summary form and is therefore not necessarily complete, and no includi