Meridian Energy Limited · NZX:MEL
Meridian Energy — H1 FY2016 Earnings Presentation
26 slides from Meridian Energy's earnings presentation, Mar 7, 2016
Slide 1: Interim results roadshow presentation
For personal use only Interim results roadshow presentation 7 March 2016 Meridian Energy will be giving presentations on the company's interim results at a series of investor meetings during March and April 2016. ENDS Mark Binns Chief Executive Meridian Energy Limited For investor relations queries,
Slide 2: Better energy future
Better energy future For personal use only MERIDIAN ENERGY LIMITED 2016 interim results roadshow presentation
Slide 3: Disclaimer
MARCH AND APRIL 2016 Disclaimer For personal use only 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, co
Slide 4: Meridian and the New Zealand market
Meridian and the New Zealand market For personal use only MERIDIAN ENERGY LIMITED 2016 interim results roadshow presentation
Slide 5: About Meridian
MARCH AND APRIL 2016 About Meridian For personal use only Vertically integrated renewable generator, retailing electricity to over 337,000 customers in New Zealand and Australia New Zealand’s largest generator from purely renewable sources Seven hydro stations Flexible plant with New Zealand’s large
Slide 6: The New Zealand electricity market
MARCH AND APRIL 2016 The New Zealand electricity market For personal use only 5 Major generators 1 Transmission grid operator 29 Distribution businesses 26 Electricity retail brands 2 Million consumers MERIDIAN ENERGY LIMITED 2016 interim results roadshow presentation 5
Slide 7: 2016 interim results
2016 interim results For personal use only MERIDIAN ENERGY LIMITED 2016 interim results roadshow presentation
Slide 8: Highlights
MARCH AND APRIL 2016 Highlights For personal use only MERIDIAN ENERGY LIMITED 2016 interim results roadshow presentation 7
Slide 9: The New Zealand market
MARCH AND APRIL 2016 NATIONAL DEMAND The New Zealand market GWh 45,000 Modest demand growth in last six months year on For personal use only -1.3% +1.3% +1.4% year -1.0% change Growth in most regions and sectors 40,000 (except industrial) 35,000 600MW of thermal plant closure has 30,000 occurred in
Slide 10: The Australian market
MARCH AND APRIL 2016 LGC SPOT PRICE The Australian market AUD 90 For personal use only LGC prices have responded to RET 80 target decision in June 2015 and 70 political changes in September 2015 60 Has not yet translated into investment certainty, with little new investment 50 announced 40 Jul-15 Au
Slide 11: Tiwai Point smelter
MARCH AND APRIL 2016 LME SPOT ALUMINIUM PRICE Tiwai Point smelter USD/tonne 1,800 For personal use only Current trading environment for the 1,700 aluminium industry is difficult 1,600 USD aluminium prices have fallen 10% since the middle of 2015 1,500 Price premia have stabilised from 1,400 Jul-15 Aug
Slide 12: Wholesale and generation
MARCH AND APRIL 2016 Wholesale and generation For personal use only Stay in business capital spend inside the annual $65m envelope Mill Creek wind farm performance running ahead of expectations Iconic Brooklyn turbine will be replaced in April 2016 Consent extensions gained for Central Wind and Maun
Slide 13: Meridian Retail
MARCH AND APRIL 2016 Meridian Retail For personal use only Segment EBITDAF up +$5m (+19%) Growth in corporate and industrial sales volumes (+4%) Growth in residential and SMB sales volumes (+6%) Lift in average sales price Corporate and industrial +4% in line with movements in the forward market Res
Slide 14: Meridian Retail
MARCH AND APRIL 2016 Meridian Retail For personal use only Launch of Xero partnership Winner of CRM contact centre award (commercial and business services) Powershop net promoter score above 46 (energy sector average is -13) Good performance on retail metrics MERIDIAN RETAIL Dec 14 Jun 15 Dec 15 Tim
Slide 15: npower agreement
MARCH AND APRIL 2016 npower agreement For personal use only Franchise licence agreement with RWE npower signed in November 2015 Will take the Powershop service platform and brand to the UK without Meridian carrying market exposure Staged delivery of electricity, smart meter integration, gas and dual
Slide 16: Concluding remarks
MARCH AND APRIL 2016 Concluding remarks Strategic focus remains unchanged: For personal use only Supporting TPM and thermal retirement outcomes to maintain an open and competitive market Improving asset yield and maintaining low stay in business capex Continuing to close our retail profit gap while l
Slide 17: 2016 interim financial performance
2016 interim financial performance For personal use only MERIDIAN ENERGY LIMITED 2016 interim results roadshow presentation
Slide 18: Financial performance
MARCH AND APRIL 2016 Financial performance For personal use only FINANCIAL PERFORMANCE AGAINST PRIOR YEAR $M 600 Six months ended 31 December 2015 Six months ended 31 December 2014 509 500 480 400 332 324 300 206 217 194 200 159 121 112 122 115 104 117 106 100 64 60 16 28 8 0 Energy Other Trans- Ope
Slide 19: Dividends
MARCH AND APRIL 2016 Dividends INTERIM DIVIDENDS DECLARED For personal use only Interim ordinary dividend of 5.10 cps, CPS +22% Ordinary dividend Special dividend 85% imputed 10 7.54 8 Is a 6% increase on the interim 6.20 2.44 dividend from last year 6 1.40 4 Capital management interim special 4.80
Slide 20: Energy margin and EBITDAF
MARCH AND APRIL 2016 ENERGY MARGIN1 Earnings $M 1,000 916 924 954 For personal use only ‘Like for like’ EBITDAF (excluding FY2015 800 763 474 +6% 481 477 insurance proceeds) increase of $12m 600 324 (4%) in 1H FY2016 from: 400 + Higher corporate sales volume in NZ 200 439 435 447 480 509 + Higher re
Slide 21: Operating costs
MARCH AND APRIL 2016 OPERATING COSTS Costs $M Retail segment Wholesale Corporate/Elims +3% 150 Australia IPO Costs For personal use only Operating costs have increased +$9m 114 116 124 112 121 6 9 16 (+8%) in 1H FY2016 100 38 23 11 19 20 Almost half of this growth is investment 50 35 40 37 38 suppor
Slide 22: Net profit after tax
MARCH AND APRIL 2016 NET PROFIT AFTER TAX Below EBITDAF $M 400 For personal use only Net finance costs -$1m (-3%) from lower 300 295 247 interest on borrowings 122 230 200 -11% Positive change in fair value of treasury 113 130 75 instruments reflecting forward rate 100 173 117 117 104 changes in 1H FY
Slide 23: Latest operating information
Latest operating information For personal use only MERIDIAN ENERGY LIMITED 2016 interim results roadshow presentation
Slide 24: Market Data
MARCH AND APRIL 2016 NATIONAL DEMAND Market Data GWh 3,800 3,600 For personal use only National electricity demand in January 3,400 2016 was 3.4% lower than the same 3,200 month last year 3,000 This was driven continued North Island 2,800 demand growth and lower South Island 2,600 Jan Feb Mar Apr Ma
Slide 25: Meridian hydrology
MARCH AND APRIL 2016 MERIDIAN'S TOTAL CATCHMENT INFLOWS Meridian hydrology GWh 10,000 current year For personal use only January 2016 monthly inflows were 85% 8,000 of historical average 6,000 Meridian’s Waitaki catchment storage 4,000 moved from 1,579GWh to 1,758GWh 2,000 during January 2016 0 Waita
Slide 26: Meridian's NZ customer connections
MARCH AND APRIL 2016 MERIDIAN'S NZ CUSTOMER CONNECTIONS Meridian retail ICPs ('000) 300 For personal use only Meridian’s New Zealand customer 250 56 56 55 55 55 55 56 200 connection numbers rose slightly during 104 103 103 102 102 102 102 150 January 2016 100 Retail sales volumes in January 2016 50