Meridian Energy Limited · NZX:MEL
Meridian Energy — Investor Presentation (November 2021)
20 slides from Meridian Energy's investor presentation, November 2021
Slide 1: 2021 Investor Presentation
2021 Investor Presentation NOVEMBER 2021
Slide 2: New Zealand electricity market
New Zealand electricity market N O V EM B ER 2 0 2 1 2021 INVESTOR PRESENTATION 2
Slide 3: New Zealand electricity market
New Zealand electricity market A reliable, affordable and environmentally sustainable electricity system A well functioning competitive market with high level of renewable resources and rational competition Vertical integration is the prevailing market structure Wholesale and retail market r
Slide 4: New Zealand electricity market
New Zealand electricity market 5 major 1 big industrial user 1 transmission grid 29 distribution 44 retail brands 2.1 million generators (Rio Tinto/Sumitomo owner (state owned) businesses (various consumers (all listed, 3 smelter), ~13% of ownership structures) (41 TWh pa) majority national demand G
Slide 5: New Zealand electricity market
New Zealand electricity market New Zealand’s hydro generation is managed against limited controlled storage Bulk of hydro inflow is anti-correlated to winter demand peak Thermal capacity and fuel storage has historically managed potential hydro inflow deficit and other renewable intermittency
Slide 6: Possible future market outcomes
Possible future market outcomes Existing generation plant retirement (~3GW) will New generation capacity to 2050 drive significant new investment 4,000 FY2041-50 Coupled with significant demand growth FY2031-40 3,000 Installed generation [MW] (decarbonisation), could see 8-10GW+ built by FY2021-
Slide 7: New Zealand policy and regulation
New Zealand policy and regulation Current Electricity Authority (EA) focus Implemented new trading conduct provisions, in effect on 30 June 2021 Published a review of wholesale market competition in the wholesale market for the period 2018 to early 2021: Confirms that high wholesale electricit
Slide 8: New Zealand policy and regulation
New Zealand policy and regulation Climate Change Commission Final Advice Released in June 2021, final advice on 2022-35 emissions budgets Proposes deeper emissions cuts in first two budget periods than earlier draft advice Recommends major expansion in the electricity system needs to start imm
Slide 9: New Zealand policy and regulation
New Zealand policy and regulation Transmission Pricing Methodology (TPM) Meridian's NZ transmission costs $M EA published final TPM guidelines in June 2020 140 Meridian actual 116 Transpower Replaces current HVDC and RCPD charges with 120 Meridian actual estimate benefit-based and residual charg
Slide 10: New Zealand Aluminium Smelter (Tiwai Point)
New Zealand Aluminium Smelter (Tiwai Point) 572MW CfD 14 Jan 1 Jan 1 Jan 1 Jan 31 Dec exit contract 2021 2022 2023 2024 2024 with Meridian terminating 31 Revised NZAS contract December 2024 no termination right (except terminal force majeure) 400MW NZAS termination right with 6 months notice (termin
Slide 11: Meridian Energy
Meridian Energy N O V EM B ER 2 0 2 1 2021 INVESTOR PRESENTATION 11
Slide 12: About Meridian
About Meridian HARAPAKI (construction) NZ$12b company, one of NZ’s largest listed company, 51% Government owned Largest of five listed New Zealand retailer 355k electricity generators customer connections Strong environmental, social and governance focus 40% of New Zealand generation covered
Slide 13: About Meridian
About Meridian New Zealand’s largest generator, all production from renewable sources Seven big hydro stations – flexible plant with the country’s largest storage With low operating costs and capital needs Five New Zealand wind farms and proven success operating in a high wind environment
Slide 14: Sustainability at Meridian
Sustainability at Meridian Our Material Topics 2030 emissions target (scope 1-3) Environmental Social Governance tCO2e 47,279 actual target Action on climate change Electricity pricing Sustainability leadership 50,000 Halving 44,359 2019 Pipeline of generation options Support for vulnerable Good gov
Slide 15: Social focus
Social focus Local communities Long term relationships, community relationship managers $9M of local project support over 14 years Iwi Recognise the mana whenua of Ngāi Tahu Close association with local rūnaka Focus on strengthening our iwi partnerships KidsCan $1M annual contribution to
Slide 16: Strategic initiatives
Our strategy Champion Optimise Grow initiatives Strategic Competitive markets Trading & asset management Retail Sustainability Re-consenting Generation Climate action Financing Flux Grow a clear sustainability leadership NZ’s highest customer satisfaction position NZ’s largest and fastest growing re
Slide 17: NZAS exit response
NZAS exit response NZAS contract 14 Jan May 21 Nov 21 1 Jan 1 Jan 1 Jan 31 Dec investor 2021 day 2022 2023 2024 2024 Meridian portfolio response exploring options Current swaption options discussions on 1,180 MW CUWLP schedule capacity completion review of site design & construction NI battery sites
Slide 18: Shareholder highlights
Shareholder highlights Double digit shareholder returns every year since Total shareholder return 80% listing 60% Sustained earnings through that period 60% High free cash flow, high payout ratio, stable 36% 40% 33% ordinary dividend 20% 19% Balance sheet headroom to fund potentially 20% 15%
Slide 19: Investment proposition
Investment proposition strong free customer cash flow growth in NZ balance long term retail low capital sheet sustainable platform needs headroom business changes income growth high free medium stable cash flow Flux term new ordinary DPS payout generation continued potential cost Australian discipli
Slide 20: Disclaimer
Disclaimer The information in this presentation was prepared by Meridian Energy with they are not defined by GAAP or IFRS, Meridian's calculation of these due care and attention. However, the information is supplied in summary measures may differ from similarly titled measures presented by other for
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