Mercury Nz Ltd. · NZX:MCY
Mercury Nz — HY23 Earnings Presentation
27 slides from Mercury Nz's earnings presentation, Feb 21, 2023
Slide 1: Financial Results, Period Ended 31 December 2022
For personal use only FINANCIAL RESULTS. PERIOD ENDED 31 DECEMBER 2022 VINCE HAWKSWORTH WILLIAM MEEK Chief Executive Chief Financial Officer 21 February 2023 Mercur ye
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by Mercury NZ Limited and its group of companies ('Company”) for informational purposes. This disclaimer applies to this document and the verbal or written comments of any person presenting it. Information in this presentation has been prepared by the C
Slide 3: HY23 — Thriving Today, Shaping Tomorrow
HY23 — THRIVING TODAY, SHAPING TOMORROW WET WET WET! Wettest HY ever in the Waikato, lifts hydro generation to 2,735GWh (up 45% on HY22). 675GWh of hydro generation spilled during HY23 to manage lake levels. NEW RENEWABLES Kaiwaikawe, Kaiwera Downs Stage 2 and Puketoi wind farms progressing through
Slide 4: HY23 Financial Performance
$m HY23 FINANCIAL PERFORMANCE 800 685 HY22 700 a0 600 we HY23 500 451 427 400 4 39 345 315 300 242 230 160 200 106 132 nz jo9. 121 100 | 2 3 44 o 4 — _— Trading Margin Operating EBITDAF NPAT Operating Cash Free Cash Flow Stay-In-Business Growth —_—_Declared Ordinary Expenditure Flow Capital Investme
Slide 5: Record Wet HY23 and Investment in Growth Lifts Earnings
RECORD WET HY23 AND INVESTMENT IN GROWTH LIFTS EARNINGS EBITDAF BRIDGE (HY22 to HY23) lM Decrease [Ml Increase 500 (21) 450 (6) (6) 400 © 30 _ 5 6 2 re 350 a Ee Fa 8 300 250 200 He nN 5 2 5 2 “ 3 oy 2 © 2 3 5 iS ge 2 3 £ 2 ara £3 BE 8 = i > 3 a & 5 8 eS £98 33 8 5 s S S38 o3 oe 8 = z 2 b> 3 = a < “
Slide 6: Focus on Wellbeing and Health & Safety
FOCUS ON WELLBEING AND HEALTH & SAFETY > Investing in the capability of our people and systems to build a stronger and more mature H&S culture. > Zip (Sentis Zero Incident Program) and H&S Essentials Culture training connect outcomes of safety with personal behaviours and promote safer behaviours th
Slide 7: Electricity Spot Price Reflects Hydrology, Gas Influence Waning
@-0@ ELECTRICITY SPOT PRICE REFLECTS HYDROLOGY, GAS INFLUENCE WANING HYDRO STORAGE VS. SPOT ELECTRICITY PRICE SPOT GAS VS. SPOT ELECTRICITY PRICE From Jan-99 From Sep-14 $300 e @ FY2018 $300 e e FY2018 e @ FY2019 @ FY2019 $250 Ne ° © FY2020 = $250 © FY2020 > C z FS Trend from FY20IS, ®, @ FY2021 z ©
Slide 8: Electricity Forward Price Reflects Coal & Carbon Prices
ELECTRICITY FORWARD PRICE REFLECTS COAL & CARBON PRICES NATIONAL HYDRO STORAGE Min / Max COAL PRICE! (min/max range since 1 Apr 1999) aes ; Analysis of dispatch offers of 6,000 tua Huntly Rankine units in sooo S200) $3007 ange 4,000 « = 3,000 Fa 2,000 1,000 0 Fe FF PF RAN SA 38 § 235 § BB 8B NZU CAR
Slide 9: Wet, Wet, Wet
WET, WET, WET LAKE TAUPO STORAGE Min / Max —Avg = — -Lake Taupo McL! —FY2022 ——— FY2023 (since 1 Jul 1999) 600 500 400 High Taupo storage positions Mercury well for generation into high futures prices Month End Jul Oct Nov Dec Jan Feb Hydro Generation - Delta to Average? (GWh) Waikato Inflows - Delt
Slide 10: Trustpower Retail Acquisition Lifts Connections and Sales
0:00 TRUSTPOWER RETAIL ACQUISITION LIFTS CONNECTIONS AND SALES |= C&l (includes physical and financial sales) >The retail mass market segment remains highly competitive despite 5,000 Mass Market (includes Trustpower retail) low margins versus futures prices. More detailed segment note in 4000 accoun
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Slide 12: Retail Integration
12 RETAIL INTEGRATION > Have moved rapidly to a single retail team operating across all brands. > Focused on efficiently moving the combined retail business to a common operating model (people, process and systems). Our change management has focused on mitigating impacts on customers and staff. Key
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Slide 18: FY23 Guidance
@ FY23 GUIDANCE > FY23 EBITDAF guidance of $795m on 4,900GWh of hydro generation, subject to hydrological volatility, wholesale market conditions and any material adverse events, significant one-off expenses or other unforeseeable circumstances >FY23 ordinary dividend guidance 21.8cps (up 9% on FY22
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Slide 20: Appendix
Xe APPENDIX wt e 4 oO 5 ea \ ° 9 4 = ® > +7] pie te ~ * pei i ae s =" +) Aa we? la ~ - to q a) we Y ie 0 ~ i> es) a eal : 2
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Slide 22: Capital Structure Flexibility Enables Growth
22 CAPITAL STRUCTURE FLEXIBILITY ENABLES GROWTH > Debt / EBITDAF peaked in FY22 and is expected to reduce to a forecast of ~2.2x! by the end of FY23 due to an increase in EBITDA with full year contributions from Turitea North, ex-Tilt wind farms and Trustpower Retail. > S&P Global re-affirmed Mercur
Slide 23: Diversified Funding Profile
23 m DIVERSIFIED FUNDING PROFILE DEBT MATURITIES AS AT 13 FEBRUARY 2023 = Commercial Paper Undrawn Bank Facilities Undrawn Rolling Bank Facilities’ m Drawn Bank Facilities Domestic Wholeale Bonds 400 sm Domestic Wholeale Green Bonds = Retail Green Bonds mUS Private Placement mAUD Green Bonds mCapita
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Slide 25: Financial Derivatives
25 FINANCIAL DERIVATIVES Energy Margin contribution ($m) Sell CFDs Buy CFDs Other Financial Derivatives ! Total Energy Margin contribution 6 months ended 31 December 2022 95 (59) 13 49 1 HY22 excludes $64m loss on close out of Norske Skog 8OMW CFD and $14m gain from non-cash unwind of day 1 value of
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Slide 27: For Further Information
For personal use only FOR FURTHER INFORMATION > WILLIAM MEEK CHIEF FINANCIAL OFFICER +64 275 173 470 INVESTOR@MERCURY.CO.NZ