Meridian Energy Limited · NZX:MEL
Meridian Energy — Non-Deal Roadshow (October 2019)
21 slides from Meridian Energy's roadshow presentation, October 2019
Slide 1: 2019 Roadshow Presentation
2019 Roadshow Presentation OCTOBER 2019
Slide 2: Electricity markets
Electricity markets OCTOBER 2019 2019 ROADSHOW PRESENTATION 2
Slide 3: New Zealand electricity market
New Zealand electricity market A reliable, affordable and environmentally sustainable electricity system A well functioning competitive market with high level of renewable resources and rational competition Vertical integration is the prevailing market structure Wholesale and retail market regulatio
Slide 4: New Zealand electricity market
New Zealand electricity market 5 major 1 big industrial user 1 transmission grid 29 distribution 40 retail 2.1 million generators (Rio Tinto/Sumitomo owner (state owned) businesses (various brands consumers (all listed) smelter) ownership structures) (41 TWh pa) Sources: Electricity Authority and Mi
Slide 5: New Zealand electricity market
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-func
Slide 6: New Zealand demand
New Zealand demand Underlying demand growth of 0.3% in FY19 Meridian demand forecasts TWh Growth across sectors, lower seasonal 75 full decarbonisation agricultural load (incl. broader conversion efficiency gains) Smelter off-take up 4% in FY19 with 4th 65 partial decarbonisation potline Decarbonisa
Slide 7: New Zealand demand
New Zealand demand Tiwai smelter is 12% of national demand CfD contract with Meridian on NZAS perpetual 12-month termination right Additional 50MW contract signed in May 2018, bringing contract volume to 622MW Aluminium remains a commodity exposed to cycles and Chinese supply decisions A smelter clo
Slide 8: New Zealand supply
New Zealand supply A series of planned and unplanned gas field Generation plant end of life profile MW outages is occurring 600 Gas Coal/Gas Geothermal Wind Diesel This fuel scarcity has pushed wholesale spot and forward electricity prices higher in the 500 last year 400 Longer term supply has to ma
Slide 9: New Zealand policy and regulation
New Zealand policy and regulation Zero carbon Zero Carbon Bill at Select Committee Targeting net zero GHG emissions (excluding methane) by 2050 Targeting a gross reduction of methane emissions of 24%- 47% below 2017 by 2050 Establishes a new independent Climate Change Commission Interim Climate Chan
Slide 10: New Zealand policy and regulation
New Zealand policy and regulation TPM Meridian's annual HVDC costs $M Meridian actual EA recently published proposed TPM 120 106 amendments 100 Proposes replacing current HVDC charge EA estimate 80 70 with benefit–based and residual charges EA estimate 60 41 EPR 40 Electricity Price Review panel del
Slide 11: Australian market
Australian market Renewables are dominating new build Coal generation capacity in NEM generation Nameplate Surprising Federal election result likely to see GW 25 Remaining coal NSW QLD VIC more cautious policy settings DMO1 and VDO2 both came into effect on 1 20 July, more price similarity in retail
Slide 12: Meridian Energy
Meridian Energy OCTOBER 2019 2019 ROADSHOW PRESENTATION 12
Slide 13: About Meridian
About Meridian NZ$13b company, NZ’s largest listed company, 51% Government owned Largest 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 focus 40%
Slide 14: About Meridian
About Meridian 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 Backed wit
Slide 15: Our people
Our people 98% gender pay equity Workforce measures YWCA equal pay award 120% FY19 FY18 Gender Tick accreditation Targeting 40% of women in leadership and 90% 98% 98% senior specialist positions by 2020 77% 78% 60% Diversity and inclusion award at the 2019 NZ HR Awards 45% 42% 30% 35% Nine day work
Slide 16: Our strategy
Our strategy Our purpose: Competitive markets Sustainability Clean Climate action energy for Trading a fairer Asset management Re-consenting and Financing healthier world. NZ retail AU retail NZ generation AU generation Flux earnings OCTOBER 2019 2019 ROADSHOW PRESENTATION 16
Slide 17: Our sustainability leadership
Our sustainability leadership Helping our customers Replaced unfair prompt payment discounts with fairer, clearer pricing Tailored payment plans, LevelPay, hardship Our key sustainability goals: support SDG13 Climate Action. SDG7 Affordable and Helping the climate Clean Energy. Net Zero Carbon acros
Slide 18: Shareholder highlights
Shareholder highlights Six successive years of earnings and Total shareholder return dividend growth since listing 60% 59% Double digit shareholder returns every year since listing 40% High free cash flow, high payout ratio, 33% progressive ordinary dividend policy 31% 20% Structured capital managem
Slide 19: Meridian's investment proposition
Meridian’s investment proposition customer strong free growth in cash flow NZ capital long term retail low capital manage- sustainable platform needs ment business changes income growth progressive high free medium ordinary cash flow Flux term new DPS payout generation continued customer cost growth
Slide 20: Glossary
Glossary Hedging volumes buy-side electricity derivatives excluding the buy-side of virtual asset swaps Average generation price the volume weighted average price received for Meridian’s physical generation Average retail contracted sales price volume weighted average electricity price received from
Slide 21: Disclaimer
Disclaimer The information in this presentation was prepared by Meridian This presentation contains a number of non-GAAP financial Energy with due care and attention. However, the information is measures, including Energy Margin, EBITDAF, Underlying NPAT and supplied in summary form and is therefore