Meridian Energy Limited · NZX:MEL
Meridian Energy — FY2014 Earnings Presentation
24 slides from Meridian Energy's earnings presentation, Sep 1, 2014
Slide 1: Meridian Energy presentation
For personal use only Meridian Energy presentation 1 September, 2014 Attached is a presentation Meridian Energy will be giving from today at a series of investor meetings during September 2014. Annual Meeting Meridian Energy Limited intends to hold its Annual Meeting of shareholders in Wellington on
Slide 2: Better energy – 2014 Annual Results Roadshow Presentation
Better energy For personal use only MERIDIAN ENERGY LIMITED 2014 ANNUAL RESULTS ROADSHOW PRESENTATION
Slide 3: Disclaimer
Disclaimer The information in this presentation was prepared by Meridian Energy with due care and attention. However, the For personal use only information is supplied in summary form and is therefore not necessarily complete, and no representation is made as to the accuracy, completeness or reliabi
Slide 4: About Meridian
For personal use only About Meridian
Slide 5: About Meridian
About Meridian Vertically integrated renewable generator, retailing electricity to over 290,000 customers in New Zealand and Australia For personal use only New Zealand’s largest generator from purely renewable sources Seven hydro stations Flexible plant with New Zealand’s largest storage Long life
Slide 6: 2014 Highlights
For personal use only 2014 Highlights
Slide 7: 2014 highlights – summary
2014 highlights – summary Biggest IPO in the country’s history, For personal use only with the largest New Zealand retail investment in an IPO Financial performance ahead of Prospective Financial Information (PFI) on all key financial measures Solid cash flow has delivered higher than PFI forecast div
Slide 8: 2014 highlights – better performance than PFI
2014 highlights – better performance than PFI FINANCIAL PERFORMANCE AGAINST PFI Strong second half performance For personal use only $M maintained first half momentum 1,000 923.4 915.1 12 months to 30 June 2014 compared to PFI 800 Prospective Financial Information Outperformed all key PFI financial 60
Slide 9: 2014 highlights – higher dividends than PFI
2014 highlights – higher dividends than PFI DIVIDENDS DECLARED Final ordinary dividend for FY14 of CPS For personal use only 14 Ordinary dividend Special dividend 6.82cps 12 2.00 Brings the full year ordinary dividend 10 to 11.01cps, based on 75% of free cash 8 flow 6 10.50 11.01 11.50 4 Additional s
Slide 10: 2014 highlights – focus on core business is delivering
2014 highlights – focus on core business is delivering UNDERLYING OPERATING COSTS Normalised operating cost reduction of $M For personal use only 260 Underlying Costs IPO Costs 6.1% Sale of surplus land and US assets 2.9 240 realised $62.2m 8.3 Improved risk profile; 250.6 220 238.1 242.5 Genesis hed
Slide 11: Looking Forward
For personal use only Looking Forward
Slide 12: Looking forward
Looking forward Very focused on delivering FY15 PFI earnings and For personal use only cash flow Completion of Arc metering business sale and Meridian smart meter deployment Further update on capital management at the 2015 interim results in February 2015 Nearing completion on two new wind farms Key
Slide 13: 2014 Operating Performance
2014 Operating For personal use only Performance
Slide 14: Highlights
Highlights Meridian’s residential customers have For personal use only seen the benefit of reduced energy charges New Zealand's first electricity purchasing and energy management app Delivering two new wind farms in different countries concurrently, safely and on budget Highest total inflows since 1998
Slide 15: Retail
Retail NATIONAL DEMAND Aggregate electricity demand remains For personal use only GWh 40,000 relatively flat Manufacturing demand remains subdued, 35,000 positive net migration and GDP outlook 30,000 Market switching rates remain above 20%1 25,000 Meridian’s New Zealand customer 20,000 numbers increa
Slide 16: Retail
Retail Residential, SME, Agri segment NEW ZEALAND CUSTOMERS For personal use only ICPs (000) Meridian’s most recent MBIE survey 350 Meridian North Island Meridian South Island Powershop data showed a 0.3% annual decrease in 300 34 48 residential customers’ sales-based 250 16 51 55 electricity charge
Slide 17: Hydrology
Hydrology MERIDIAN'S COMBINED CATCHMENT INFLOWS FY14 inflows were 111% of historic For personal use only GWh 14,000 average 12,000 Included the 4th driest February to 10,000 April period on record 8,000 6,000 This period coincided with the Tekapo 4,000 canal outage, lower South Island 2,000 transmiss
Slide 18: Generation
Generation MERIDIAN'S NEW ZEALAND GENERATION Meridian’s New Zealand generation in For personal use only GWh 1,400 FY14 was 8.9% higher than last year, 1,200 but with large fluctuations in weekly 1,000 market share 800 New Zealand wind generation in FY14 600 was 8.0% higher than last year 400 200 Meri
Slide 19: 2014 Financial Performance
2014 Financial For personal use only Performance September 2014
Slide 20: Summary of performance against last year
Summary of performance against last year FINANCIAL PERFORMANCE AGAINST LAST YEAR Reported financial performance for For personal use only $M 1,000 923.4 915.8 12 months to 30 June 2014 FY14; 12 months to 30 June 2013 800 Operating cash flow +3.9% 585.3 584.8 600 NPAT -22.1%, from higher non cash 432.8
Slide 21: Earnings
Earnings EBITDAF1 ‘Like for like’ EBITDAF increase of For personal use only $M 14.4% in FY14 from; 800 Cost savings 600 Higher New Zealand generation 400 659.9 volumes 641.7 476.6 584.8 585.3 200 Less acquired generation volumes 0 Mt Mercer generation 2010 2011 2012 2013 2014 Financial Year ended 30
Slide 22: Operating cash flow and investment expenditure
Operating cash flow and investment expenditure CASH FLOW FROM OPERATING ACTIVITIES Net cash flow from operating activities For personal use only $M was $16.1m (3.9%) higher than FY13 500 Includes the close out of aluminium 400 hedges following removal of aluminium 300 indexation from the NZAS contrac
Slide 23: Energy margin change from last year
Energy margin change from last year NEW ZEALAND ENERGY MARGIN For personal use only $M 1,100 Contracted Sales Spot Exposed Net Cost of Revenue Revenue Acquired -$68.8m +$82.2m Generation +$12.9m Better mix and 1,000 higher volumes, Lower wholesale prices From lower acquired offset by price reduced sp
Slide 24: Costs
Costs TRANSMISSION COSTS 12.1% increase in Transmission costs in For personal use only $M FY14 150 Increase reflects Meridian’s majority 100 share of higher HVDC costs Increases were included in PFI 129.3 115.3 50 78.9 84.2 86.7 Accounting treatment of Australian connection assets meant total costs w