Slide 1: FY2023 Full Year Results Presentation
For personal use only 21 August 2023
Slide 2: Disclaimer
DISCLAIMER. For personal use only 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
Slide 3: Highlights — Mercury takes leading role in New Zealand's energy transition
HIGHLIGHTS — MERCURY TAKES LEADING ROLE IN NEW ZEALAND'S ENERGY TRANSITION. Business performance and major events ‘ », Supported customers in flood impacted areas Produced record total renewable generation eat: ~ with financial and on the ground support. of over 9TWh with the new Turitea wind farm s
Slide 4: Strong financial performance following major transactions
STRONG FINANCIAL PERFORMANCE FOLLOWING MAJOR TRANSACTIONS. Scaled business successfully after two major transactions a 1,600 = 1,400 1,352 m= FY2022 oO 1200 1163 FY2023 g 1000 A 841 Se 800 T45 _ 581 578 © 600 469 S 400 539 24° 352 wl 275 302 B = » © a Z i 0 ol ® Trading Margin Operating EBITDAF NPAT
Slide 5: Financials — investment in growth lifts earnings
FINANCIALS — INVESTMENT IN GROWTH LIFTS EARNINGS. For personal use only EBITDAF bridge (FY22 to FY23) 1,000 900 4 Decrease Ml Increase -— «8 (16) € 800 uw 4 E 700 ao uw 600 oo [a FY22 Generation Net Sales Retail Electricity Other Operating FY23 volume yield scale derivatives income Expenses FY23 Fin
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Slide 7: Our strategic framework
OUR STRATEGIC FRAMEWORK. We launched our new purpose and long-term aspirations Ss TEE en eaneey L— — Key messages [e) LL * Our strategic framework defines our purpose and outlines our priorities for short and long-term growth * Our updated purpose and long-term aspirations reflect our ambition * Our
Slide 8: Our people
OUR PEOPLE. For personal use > only Continued focus on Health, Safety and Wellbeing ‘Salen FYI9 FY20 FY21 FY22 FY23 m= TRIFR! XHigh Severity Incidents (RHS) wo w 2 Health, safety and wellbeing ¢ Launched our new Health, Safety & Wellbeing policy in FY23 to grow the capability of our people and syste
Slide 9: High quality generation pipeline
HIGH QUALITY GENERATION PIPELINE. FID expected in FY24 for ~$1b in generation investment Capacity Generation Type & ies (MW) _(GWh pa) Location Stage Progress Comment Wind & 7 out of 10 turbines Kaiwera Downs | 43 147 ing '3™ Construction —_erected, transmission Cc Ge 2) nearbore ready for livening
Slide 10: Strong generation development performance
STRONG GENERATION DEVELOPMENT PERFORMANCE. For personal use only 10 OUR TRACK RECORD Turitea South wind farm fully operational in FY23, increasing annual generation by 370GWh Kaiwera Downs 1 (147GWh) wind farm well advanced and full operation expected by early October 2023 Flexibility to respond to
Slide 11: Leading the way in the construction of wind generation
LEADING THE WAY IN THE CONSTRUCTION OF WIND GENERATION. For personal use only 1 Kaiwera Downs Stage 1 wind farm under construction Kaiwera Downs Stage 1 Key messages * 12 months from construction to full operation * Delivering to business case objectives * Multi-contract delivery model has proven su
Slide 12: Environmental, social and governance - key activity
ENVIRONMENTAL, SOCIAL AND GOVERNANCE - KEY ACTIVITY. personal use only «___ Climate Disclosures Early adoption of the LJ New Zealand Climate O 12 Taking a collaborative approach to improve resilience Environmental Natural Environment Evolving our approach to restore nature Key Suppliers Working in e
Slide 13: Taking action to reduce our emissions
TAKING ACTION TO REDUCE OUR EMISSIONS. For personal use only 13 Our targets drive our emissions reduction actions 150, Emissions Intensity (kg C02e/MWh) S 8 Generation (TWh) 2015 = 2016 a 6 ON KB DD 207 «2018 §=2019 = 2020 Financial Year 2021 2022 2023 Generation (RHS) —— Emissions Intensity kg CO2e
Slide 14: Electricity spot price reflects hydrology, gas influence waning
ELECTRICITY SPOT PRICE REFLECTS HYDROLOGY, GAS INFLUENCE WANING. personal use only — Fo 14 HYDRO STORAGE VS. SPOT ELECTRICITY PRICE SPOT GAS VS. SPOT ELECTRICITY PRICE From Jan-99 From Sep-14 $300 e e FY2018 $300 e e@ eFY2018 ° ° © FY2019 ° © FY2019 $250 ‘Ne © FY2020 $250 e © FY2020 = Trend from FY2
Slide 15: Electricity forward price reflects coal and carbon prices
ELECTRICITY FORWARD PRICE REFLECTS COAL AND CARBON PRICES. > COAL PRICE! NZU CARBON PRICE ELECTRICTY FUTURES THREE YEAR = FORWARD PRICE? om 700 100 250 1o) 600 90 80 200 | DN. 400 60 e150 if a > . =) ag N50 2 ' z = _— 2300 & 40 & 100 © 200 30 Cc 20 50 100 [e) 10 of o4 o 4 v SR S255 3833823 ee ee ee
Slide 16: Record hydro generation lifts performance
RECORD HYDRO GENERATION LIFTS PERFORMANCE. LAKE TAUPO STORAGE Min / Max Avg = - -Lake Taupo MCL ——FY2022 ——— FY2023 > (since 1 Jul 1999) _— 600 Cc fe) 500 (<b) 400 n £ 5 2 300 —_ 200 © 100 je) 0 (/) Month End Jul Jun — (<b) Hydro Generation - Delta to Average* (GWh) Waikato Inflows - \__ Delta to Av
Slide 17: Enhancing our existing generation assets
ENHANCING OUR EXISTING GENERATION ASSETS. 7 For personal use only 2 Karapiro rehab will increase station capacity by 17% Karapiro Hydro Power Station Key messages Karapiro rehab three-year project started in FY23 and includes the full replacement of all three units plus intake gates at an estimated
Slide 18: Retail electricity connection growth throughout integration
RETAIL ELECTRICITY CONNECTION GROWTH THROUGHOUT INTEGRATION. Total connections across all products increased 61k For personal use only 18 GWh 6,000 5,000 4,000 3,000 2,000 1,000 fe) FYI8 FYI9 FY20 FY21 FY22 FY23 = C&l (includes physical and financial sales) _™ Mass Market (includes Trustpower retail
Slide 19: Retail integration — one team, one brand, one technology stack
RETAIL INTEGRATION — ONE TEAM, ONE BRAND, ONE TECHNOLOGY STACK. For personal use only 19 Enabling our business to be future ready Mercury Auckland Jas at August 2023 Key messages A significant milestone with the successful brand change in June 2023. We unveiled a new loyalty rewards programme, bill,
Slide 20: Balancing the energy trilemma through customer care
BALANCING THE ENERGY TRILEMMA THROUGH CUSTOMER CARE. For personal use only 20 Customer care is at the heart of our strategy Connect Me - Direct support * Through ERANZ' we are participating in a pilot with MSD? to fast-track redirections of WINZ? payments towards customers’ electricity bills. This w
Slide 21: Collective action required to power NZ's decarbonisation
COLLECTIVE ACTION REQUIRED TO POWER NZ’S DECARBONISATION. For personal use only 21 Investment required in all elements of the sector RESIDENTIAL PRICE 25 20 -- 10 Nominal c/kWh g a ) CPI (relative 10 2013) KR S a 2013 2014 2015 2016 2018 2019 2020, 2021 2022 Years ending 30 June Lines component Whol
Slide 22: Strong balance sheet supports further investment
STRONG BALANCE SHEET SUPPORTS FURTHER INVESTMENT. For personal use only 22 Forecast Debt/EBITDA provides platform for growth 3 2 1 ie) FY20 FY21 FY22 FY23 | BBB+ Range Net Debt ($b) ==Debt/EBITDA lAdjusted for actual / expected S&P Global treatment Key messages Debt/EBITDA!' reduced to 2x for FY23 o
Slide 23: FY24 guidance
FY24 GUIDANCE. FY24 EBITDAF guidance of $835m on 4,067GWh of hydro generation subject to hydrological volatility, wholesale market => conditions and any material adverse events, significant one-off expenses or other unforeseeable circumstances Cc . . . o°* FY24 ordinary dividend guidance 23.3cps (up
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Slide 25: Appendix
APPENDIX 25 Maraetaf Vand 2
Slide 26: Mercury's long term track record
MERCURY'S LONG TERM TRACK RECORD. EBITDAF OPEX' © Operating expenditure = One-off costs DISTRIBUTIONS mShare buyback —_m Special dividend >\ 1000 800 = Final dividend Interim dividend Cc 800 600 Oz *° E 400 % 400 D 200 700 Jo 3° " 2ese LY ELSegsears mo XO PEP 2SANE wesw eee egnaggsty BRERRERERERE SS
Slide 27: Long term industry trends
LONG TERM INDUSTRY TRENDS. 2022 SECTOR EARNINGS! DEMAND AND GENERATION CAPACITY CARBON EMISSIONS! —Demand = 3 CAGR:1.5% 50 4 Max. Generation Capacity (RHS)r 10.0 8,000 o8: 40 7 -=— 98 0.000 2 £30 96 a g = % 84000 oe, 20 94 5 Me 10 92 2,000 So! o4 1 9.0 of — 2eFf. © PERE GAR ae ee Fe egny Q 2 £ © 2 F
Slide 28: Demand lifts following covid lockdown affected FY22
DEMAND LIFTS FOLLOWING COVID LOCKDOWN AFFECTED FY22. GWh For personal use only 28 DEMAND mFY2019 mFY2020 — Fy2022 mFY2023 Fy2021 Urban Rural Dairy Tiwai FY23 NORMALISED DEMAND GROWTH BY SECTOR Industrial (ex. Tiwai) 4,000 2,000 —>, ° - i Irrigation Sector GWh Sector %A Total %A. Urban! +305 19% 0.8%
Slide 29: Diversified funding profile
DIVERSIFIED FUNDING PROFILE. D> —= m= Commercial Paper Undrawn Bank Facilities Undrawn Rolling Bank Facilities' mi Drawn Bank Facilities US Private Placement 5 AUD Green Bonds Capital Bonds Domestic Wholesale Green Bonds ® Retail Green Bonds 500 ®o iz YN «00 =) © & 300 & Cc fo) 200 v || — oO 100 ios
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Slide 31: Electricity derivatives
ELECTRICITY DERIVATIVES For personal use only 31 Trading margin contribution 12 months ended 12 months ended $m 30 June 2023 30 June 2022 Sell CFDs 125 (127) Buy CFDs (56) 75 Other electricity derivatives (8) (a) Total él (124) a Key messages Other electricity derivatives: * Includes gains and losse
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