Meridian Energy Limited · NZX:MEL

Meridian Energy — Goldman Sachs Investment Forum (March 2015)

17 slides from Meridian Energy's conference presentation, Mar 12, 2015

1. Slide 1: Meridian Energy Limited Goldman Sachs Investment Forum Presentation

   For personal use only MERIDIAN ENERGY LIMITED GOLDMAN SACHS INVESTMENT FORUM PRESENTATION March 2015

2. Slide 2: 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

3. Slide 3: About Meridian

   About Meridian For personal use only MERIDIAN ENERGY LIMITED GOLDMAN SACHS INVESTMENT FORUM PRESENTATION March 2015

4. Slide 4: About Meridian

   About Meridian Vertically integrated renewable generator, retailing electricity to over 300,000 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

5. Slide 5: New Zealand Electricity Industry

   New Zealand Electricity Industry For personal use only New Zealand electricity industry DIRECT CONSUMERS $ $ WHOLESALE COMMERCIAL USERS RESIDENTIAL USERS ELECTRICITY MARKET $ GENERATION TRANSMISSION DISTRIBUTION RETAILERS 5 1 29 20 Major generators State-owned national Distribution businesses Electr

6. Slide 6: Current themes

   Current themes For personal use only MERIDIAN ENERGY LIMITED GOLDMAN SACHS INVESTMENT FORUM PRESENTATION March 2015

7. Slide 7: Price performance and yield

   Price performance and yield Highest performing NZX50 stock in 2014 INSTALMENT RECEIPT PRICE For personal use only $NZ with a gross return in excess of 85% 2.40 2.20 Higher than forecast dividends in 2.00 FY2014 1.80 1.60 11.7% gross yield on final IPO share 1.40 1.20 price ($1.50) 1.00 Compared with

8. Slide 8: Key market and regulatory points

   Key market and regulatory points 1.3% New Zealand demand growth in NEW ZEALAND NATIONAL DEMAND For personal use only GWh 2014, last 6 months up 2.9% on prior 40,000 period 38,000 Retail competition remains fierce 36,000 Upcoming decision point for the Tiwai 34,000 Point aluminium smelter on 1 July 20

9. Slide 9: Projects

   Projects Major projects completed on time and For personal use only under budget Mt Mercer will eliminate half a million tonnes of carbon emissions annually Mill Creek completion means that Wellington wind can now power 100,000 homes New generation control system monitors 50,000 data points around o

10. Slide 10: Powershop

    Powershop A unique, online retail experience in For personal use only New Zealand and Australia 55,000 New Zealand customers 30,000 customers in Victoria, Australia Recently launched in NSW, Australia Powershop Australia leverages existing New Zealand technology and call centre investment Exploring

11. Slide 11: Meridian retail in New Zealand

    Meridian retail in New Zealand Arc metering business sold and For personal use only programme commenced to replace remaining 125,000 legacy meters Aggressive residential competition has seen a small decline in customer connections Meridian’s residential pricing is close to the lowest in most major n

12. Slide 12: 2015 Interim Results

    2015 Interim Results For personal use only MERIDIAN ENERGY LIMITED GOLDMAN SACHS INVESTMENT FORUM PRESENTATION March 2015

13. Slide 13: Key points

    Key points Interim financials well ahead of last year For personal use only Operating cash flow +13.2% EBITDAF +20.9% Underlying NPAT +38.3% Capital projects completed Mt Mercer and Mill Creek wind farms Generation control system Total generation volumes +6.1% 271GWh of new wind production Higher wint

14. Slide 14: Financial performance

    Financial performance FINANCIAL PERFORMANCE AGAINST PRIOR YEAR 600 For personal use only $M 6 months to 31 December 2014 500 480 447 6 months to 31 December 2013 400 324 300 268 217 192 200 169 159 112 124 117 117 115 107 107 83 100 61 67 0 Energy Trans- Operating EBITDAF NPAT Underlying Operating I

15. Slide 15: Earnings

    Earnings EBITDAF1 ‘Like for like’ EBITDAF (excluding $M For personal use only 700 insurance proceeds and IPO costs) 600 increase of 15.4% in 1H FY14 from: 306.6 500 Additional generation from Mill Creek 400 182.3 307.7 317.1 in NZ and Mt Mercer in Australia 300 200 353.3 324.3 Higher residential/SME

16. Slide 16: 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 $25.3m (13.2%) higher than 1H FY14 500 Reflects the higher energy margin and 400 lower operating costs in 1H FY15 300 243.8 241.3 166.5 186.7 Includes

17. Slide 17: Costs

    Costs TRANSMISSION COSTS $6.1m (9.1%) decrease in Transmission For personal use only $M costs in 1H FY15 140 120 Benefiting from lower final costs on HVDC 100 62.6 Pole 3 project 80 60.5 60 42.2 45.7 5% increase in 2015/16 transmission 40 66.7 costs coming 20 42.0 41.0 54.8 60.6 0 2011 2012 2013 2014

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