Meridian Energy Limited · NZX:MEL
Meridian Energy — FY2013 Earnings Presentation
31 slides from Meridian Energy's earnings presentation, Aug 12, 2013
Slide 1: Meridian Results Presentation
Meridian i =
Slide 2: Disclaimer
Disclaimer 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 informatio
Slide 3: EBITDAF and Net Profit - last 3 financial years
$M EBITDAF and Net Profit - last 3 financial years 700 660 12 months to 30 Jun 11 585 12 months to 30 Jun 12 600 12 months to 30 Jun 13 500 477 400 303 295 300 219 200 163 106 100 75 0 EBITDAF Underlying NPAT NPAT
Slide 4: Financial measures
$M 1,000 Financial measures 916 12 months to 30 Jun 12 900 12 months to 30 Jun 13 800 763 700 585 600 529 477 500 417 400 322 295 277 300 252 227 245 200 115 163 87 106 100 75 71 0 Energy Trans Operating EBITDAF NPAT Underlying Operating Investment Dividend Margin mission Costs NPAT Cash Flow Ex
Slide 5: Lost time injury frequency rate
EEA industry period ended Lost time injury frequency rate average Jun 2013 0.0 Jun 2012 0.9 Jun 2011 1.8 Jun 2010 2.5 Jun 2009 3.1 - 1 2 3 4 5 6 7 12 month average lost time injury incidents per million hours worked (permanent employees)
Slide 6: Meridian's Waitaki storage
GWh Combined inflows into Meridian's catchments 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Financial 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 year Interim Final half year Interim 80 year average Full year 80 year average GWh Meridian's Waitaki storage 3,000 2,500 2
Slide 7: NZ generation market share and average wholesale price
NZ generation market share (weekly) 45% high 40% inflows high inflows 35% high 30% inflows 25% 11 day 6 day HVDC HVDC 20% outage outage 15% 15 weeks of below avg inflows 10% Tekapo canal outage 5% 0% Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Jan-13 Feb-13 Mar-13 Apr-13 Jun-13 $/MWh Average wholesale price*
Slide 8: Monthly national demand and Retail segment sales volumes
GWh Monthly national demand 3,800 3,600 3,400 3,200 3,000 2,800 2,600 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Range (FY08-FY12) FY11 FY12 FY13 GWh Retail segment sales volumes 3,500 12 months to 30 Jun 12 2,897 2,923 12 months to 30 Jun 13 3,000 2,500 2,360 2,232 2,000 1,898 1,861 1,500
Slide 9: Development pipeline reshaped
Development pipeline reshaped Development New Zealand Pipeline rationalised in response to soft market conditions No further development expected for 3-5 years Focus on a smaller, more deployable set of future options with attractive cost profile North Bank tunnel hydro project suspended Meridian ga
Slide 10: New Zealand Aluminium Smelters
New Zealand Aluminium Smelters Agreement reached with the owners of New Zealand Aluminium Smelters (NZAS) After a year of negotiations, agreement has been reached with New Zealand Aluminium Smelters (NZAS), effective 1 July 2013 The agreement sees a reduction in the smelter’s electricity charge The
Slide 11: Financial performance
Financial performance i RESULTS PRESENTATION for the year ended June 2013 12 August 2013 PG|n
Slide 12: EBITDAF and Underlying Net Profit after Tax
Financial Year EBITDAF 1 ended 30 June 2013 584.8 2012 476.6 2011 659.9 2010 641.1 2009 512.4 $M 0 100 200 300 400 500 600 700 Financial Year Underlying Net Profit after Tax2 ended 30 June 2013 162.7 2012 106.1 2011 219.0 2010 251.9 2009 195.0 $M 0 50 100 150 200 250 300
Slide 13: New Zealand Energy Margin
$M New Zealand Energy Margin 2,400 Contracted Revenue Acquired Net Spot Exposure Market 2,200 Generation $87m Related $1,055m 2,000 Costs Costs -$283m $6m 1,800 225 Other revenue & 1,600 costs including EA levies & 1,400 ancillary -921 1,200 generation 4 783 revenue 1,000 -283 800 457 6 600 400 865
Slide 14: New Zealand Energy Margin movement vs FY12
New Zealand Energy Margin $M movement vs FY12 1,200 Contracted Revenue Acquired Net Spot Exposure Market 1,100 Generation +$6m Related +$76m Costs Costs 1,000 +$48m -$5m 900 -5 -3 +48 800 +15 +64 700 -324 +407 600 500 -77 865 400 740 300 200 100 - Energy Margin Retail Wholesale Spot Margin Cost of M
Slide 15: Transmission Costs and Employee and Other Operating Costs
Financial Year Transmission Costs ended 30 June 2013 115.3 2012 86.7 2011 84.2 2010 78.9 2009 78.2 $M 0 20 40 60 80 100 120 140 Financial Year Employee and Other Operating Costs ended 30 June 2013 245.4 2012 227.2 2011 238.1 2010 250.6 2009 218.5 $M 200 210 220 230 240 250 260
Slide 16: Operating Cash Flow and Investment Expenditure
Financial Year Operating Cash Flow ended 30 June 2013 416.7 2012 322.2 2011 368.7 2010 451.8 2009 313.5 $M 0 100 200 300 400 500 Financial Year Investment Expenditure ended 30 June Total 2013 277 2012 529 2011 273 2010 470 2009 500 $M 0 100 200 300 400 500 600 Stay in business investment Growth inve
Slide 17: Summary
Insummary Summary Return to average level of inflows from the record low levels of FY12 Inflow levels during the dry summer were lower than FY12 Significant uplift in NPAT, EBITDAF' and Underlying NPAT" Uplift achieved while managing increased transmission costs and the impact of residual FY12 dry y
Slide 18: Additional information
Additional information i RESULTS PRESENTATION for the year ended June 2013 12 August 2013 PG|18
Slide 19: EBITDAF to NPAT reconciliation
$M EBITDAF to NPAT reconciliation 650 600 550 500 -220 450 400 +19 350 -25 -1 -61 300 -114 +107 585 -19 250 200 -71 +94 150 295 100 163 50 - EBITDAF* Dep & Net Finance Premiums on Taxation Underlying Fair Value Gain on Sale Impairments Other Premiums on Taxation NPAT 30 Jun 2013 Amort Costs Electric
Slide 20: Energy Margin
Financial Year Energy Margin ended 30 June 2013 915.8 2012 763.2 2011 950.3 2010 941.6 2009 785.3 $M 0 100 200 300 400 500 600 700 800 900 1,000
Slide 21: Debt maturity profile
Debt maturity profile Calender Year as at 30 June 2013 2019 452 83 + 2018 187 106 2017 98 220 2016 157 199 2015 135 350 2014 154 $M 0 100 200 300 400 500 600 Drawn Debt Maturing (face value) Available Facilities Maturing Sources of funding as at 30 June 2013 22% 27% 22% 11% 10% 3% 5% NZ$ bank facili
Slide 22: Fair Value of Financial Derivatives
Financial Year ended 30 June Fair Value of Financial Derivatives 2013 93.8 2012 53.3 2011 -103.5 2010 -71.3 2009 -146.6 $M -200 -150 -100 -50 0 50 100 150
Slide 23: Group Energy Margin to Net Profit
($m) 2013 2012 2011 2010 2009 Group Energy Margin 915.8 763.2 950.3 941.6 785.3 Dividend and Other Revenue 29.7 27.3 31.9 29.5 23.8 Energy Transmission Expense (115.3) (86.7) (84.2) (78.9) (78.2) Gross Margin 830.2 703.8 898.0 892.2 730.9 Employee Costs and Other Operating Expenses (245.4) (227.2) (
Slide 24: Group Net Profit After Tax to Underlying NPAT
($m) 2013 2012 2011 2010 2009 Group Net Profit After Tax 295.1 74.6 303.1 184.0 89.3 Net Change in Fair Value of Financial Instruments (42.7) 68.0 14.2 23.3 32.5 Net Change in Fair Value of Electricity, Aluminium and Foreign Exchange Derivatives (51.1) (121.3) 89.3 48.0 114.1 Premiums Paid on Electr
Slide 25: Balance sheet summary
($m) 2013 2012 2011 2010 2009 Cash and Cash Equivalents 382.8 214.4 368.2 54.4 47.9 Accounts Receivable and Prepayments 261.9 298.1 240.9 199.1 188.2 Other 121.4 58.3 18.1 18.1 30.8 Current Assets 766.1 570.8 627.2 271.6 266.9 Property, Plant and Equipment 6,769.0 7,963.6 7,720.8 8,207.3 6,743.1 Oth
Slide 26: Wholesale segment results
($m) June 2013 June 2012 % Change Energy Sales Revenue 2,061.2 1,985.1 + 3.8% Energy Related Expenses (1,289.3) (1,306.6) + 1.3% Energy Distribution Expense (1.1) (23.5) + 95.3% Wholesale Energy Margin 770.8 655.0 + 17.7% Dividend and Other Revenue 12.3 9.8 + 25.5% Energy Transmission Expenses (113.
Slide 27: Retail segment results
($m) June 2013 June 2012 % Change Energy Sales Revenue 1,166.5 1,156.6 + 0.9% Energy Related Expenses (674.8) (701.4) + 3.8% Energy Distribution Expense (403.0) (380.7) - 5.9% Energy Margin 88.7 74.5 + 19.1% Dividend and Other Revenue 15.1 11.6 + 30.2% Gross Margin 103.8 86.1 + 20.6% Employee Expens
Slide 28: International segment results
($m) June 2013 June 2012 % Change Energy Sales Revenue 51.4 23.3 + 120.6% Energy Related Expenses (0.6) (0.5) - 20.0% Energy Distribution Expense (0.1) - International Energy Margin 50.7 22.8 + 122.4% Dividend and Other Revenue - 2.6 - 100.0% Energy Transmission Expenses (2.1) (2.0) - 5.0% Gross Mar
Slide 29: Other segments results
($m) June 2013 June 2012 % Change Energy Sales Revenue 9.7 20.9 - 53.6% Energy Related Expenses (4.6) (10.0) + 54.0% Energy Distribution Expense - - - Energy Margin 5.1 10.9 - 53.2% Dividend and Other Revenue 0.4 1.6 - 75.0% Energy Related Expenses (Non-core) - - - Gross Margin 5.5 12.5 - 56.0% Empl
Slide 30: Unallocated segment results
($m) June 2013 June 2012 % Change Energy Related Expenses 0.5 - Energy Margin 0.5 - Dividend and Other Revenue 2.6 3.6 - 27.8% Energy Related Expenses (Non-core) - - - Gross Margin 3.1 3.6 - 13.9% Employee Expenses (22.5) (19.6) - 14.8% Other Operating Expenses (26.0) (45.2) + 42.5% EBITDAF (45.4) (
Slide 31: Additional information: Segment reporting
Additional information Segment reporting The Chief Executive considers the business from the perspective of three reportable segments; Wholesale, Retail and International M n Segment Composition New Zealand Wholesale __ Retail International Other Segments' Unallocated Wholesale Meridian Retail Austr