Meridian Energy Limited · NZX:MEL
Meridian Energy — Non-Deal Roadshow (October 2022)
31 slides from Meridian Energy's roadshow presentation, Oct 31, 2022
Slide 1: Meridian Energy investor presentation release
Release For personal use only Stock Exchange Listings NZX (MEL) ASX (MEZ) Meridian Energy investor presentation 31 October 2022 Attached is a presentation Meridian Energy will be making at investor meetings during November. ENDS Neal Barclay Chief Executive Meridian Energy Limited For investor relat
Slide 2: 2022 Investor Presentation
For personal use only 2022 Investor Presentation NOVEMBER 2022
Slide 3: Why Meridian?
Why Meridian? For personal use only N OVE M B E R 2 02 2 I N VE S TOR R OAD S HOW PR E S E N TATI ON 2
Slide 4: Why Meridian? Leading sustainability performance
Why Meridian? Half by 30 2030 Leading sustainability performance We are focused on re For personal use only our gross operationa emissions by half by Where we can’t reduce our operational e * Meridian’s operational emission boundary includes all scope 1, 2 and Green Greenhouse Our Finance Gas Emissi
Slide 5: Why Meridian? High quality investment
Why Meridian? High quality investment For personal use only quality, high free progressive balance strong deep scale assets cash flow ordinary sheet growth renewable dividend headroom outlook development pipeline H2 Renewable energy generation Customer decarbonisation New markets Building on our exi
Slide 6: New Zealand electricity market
New Zealand electricity market For personal use only N OVE M B E R 2 02 2 I N VE S TOR R OAD S HOW PR E S E N TATI ON 5
Slide 7: New Zealand electricity market
New Zealand electricity market § A reliable, affordable and environmentally For personal use only sustainable electricity system § A well functioning competitive market with high level of renewable resources and rational competition § Vertical integration is the prevailing market structure § Wholesa
Slide 8: New Zealand electricity market
New Zealand electricity market § New Zealand’s hydro generation is managed For personal use only 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 re
Slide 9: New Zealand electricity market
New Zealand electricity market For personal use only 5 major generators (all listed, 1 transmission grid 1 very large industrial user 29 distribution 44 retail 2.1 million 3 majority Govt owned) owner (state owned) (Rio Tinto/Sumitomo businesses (various brands consumers smelter), ~13% of national o
Slide 10: Market pricing
Market pricing Meridian average generation price Unit electricity costs (real) $/MWh c/KWh Residential Commercial Industrial 200 173 35 excluding GST excluding GST For personal use only 150 123 130 30 100 83 89 25 62 50 20 0 15 2018 2019 2020 2021 2022 2023 (Q1) 10 Financial Year ended 30 June 2013
Slide 11: Policy and regulation
Policy and regulation Emissions Reduction Plan Average annual emissions For personal use only § Released in May 2022, it sets out how NZ Mt CO2-e Emissions Reduction Plan will meet its first emissions budget for 100 2022-2025 79.5 79.5 80 72.5 § Requires additional emissions reductions 61.0 of 4% 60
Slide 12: National emissions
National emissions Greenhouse gas emissions by sector For personal use only 1% 0.05%, operational emissions offset 4% 6% Electricity 6% 7% Other energy Transport 17% 79 Manufacturing & construction MtCO2e Agriculture 9% Industrial & product 50% Fugutive emissions Waste Sources: Meridian, New Zealand
Slide 13: Policy and regulation
Policy and regulation Resource management reform For personal use only § Reform programme risks renewable projects needing to clear a higher consenting hurdle § Generator CEs have collectively written to Ministers outlining issues that need addressing, supported by independent advice Low carbon comm
Slide 14: About Meridian
About Meridian For personal use only N OVE M B E R 2 02 2 I N VE S TOR R OAD S HOW PR E S E N TATI ON 13
Slide 15: About Meridian
About Meridian 366,000 Total shareholder return1 For personal use only customers Auckland 80% Meridian TSR NZX50 Index Te Uku 60% Meridian Asset Key 60% Wind Farm Harapaki 40% 36% Hydro Station (construction) 33% Mill Creek Meridian Offices Te Āpiti West Wind 20% 19% 20% 15% Powershop Offices 10% 12
Slide 16: About Meridian
About Meridian § New Zealand’s largest generator, all production from renewable sources For personal use only § Seven big hydro stations – flexible plant with the country’s largest storage § With low operating costs and capital needs § Five New Zealand wind farms, a sixth under construction and prov
Slide 17: Our purpose
Our purpose For personal use only N OVE M B E R 20 22 I N VE ST OR ROAD SH OW PRE SE N T AT I ON 16
Slide 18: Our strategy
Our strategy For personal use only Champion Optimise Grow initiatives Strategic Competitive markets Trading and asset management Retail Sustainability Re-consenting Generation Climate action Financing Flux Grow a clear sustainable leadership position NZ's highest customer satisfaction Provide the mo
Slide 19: Our Climate Action Plan
Our Climate Action Plan For personal use only N OVE M B E R 20 22 I N VE ST OR ROAD SH OW PRE SE N T AT I ON 18
Slide 20: Half by 30
Half by 30 § Goal to halve our 2021 operational Progress against our Half by 30 goal For personal use only tCO2e land transport farms fugitive emissions emissions by 2030 40,000 air travel ferry other (scope 3) § An approved science-based target reduction target § Today all Meridian’s operational 30
Slide 21: Forever forests
Forever forests § Creating a carbon sink by planting 1.5 For personal use only million trees § Will offset the emissions we can’t remove through Half by 30 § A mixed planting model of natives and exotics § To act as an effective carbon sink and leave a native forest legacy N OVE M B E R 20 22 I N VE
Slide 22: Social focus
Social focus Local communities § Long term relationships, community relationship For personal use only managers § $9M of local project support over 15 years Iwi § Recognise the mana whenua of Ngāi Tahu § Close association with local rūnanga § Focus on strengthening our iwi partnerships KidsCan § $1M
Slide 23: Renewable growth
Renewable growth Annual market demand for generation TWh history range of future growth For personal use only 70 $30+ 65 billion of new 60 generation investment 55 50 Harapaki wind farm Carbon neutral, stable 45 on schedule operational emissions 7 in 7 40 20 in 28 35 30 300 2024 GWh* in MoU’s or con
Slide 24: Harapaki wind farm – Hawke's Bay
Harapaki wind farm – Hawkes Bay For personal use only § $448m capital costs § To power the equivalent of 70,000 homes § Local iwi are integral part of our team § Sustainability focus to design out emissions N OVE M B E R 20 22 I N VE ST OR ROAD SH OW PRE SE N T AT I ON 23
Slide 25: Renewable development pipeline
Renewable development pipeline § Deep pipeline of 2.3 GW (5.4 TWh) of development options For personal use only § 1.1 GW secured, 1.2 GW in advanced prospects, further battery site acquired § North Island focus, flexibility on South Island options maintained Taranaki Ruakaka (100 MW) (75 MW) Secured
Slide 26: Portfolio response to NZAS contract termination
Portfolio response to NZAS contract termination NZAS Contract: 14 JAN 2021 1 JAN 2022 1 JAN 2023 1 JAN 2024 31 DEC 2024 For personal use only May 21 August 21 Feb 22 August 22 Investor Day Annual Results Interim Results Annual Results Meridian Portfolio Response: Current Swaption: Exploring options
Slide 27: Green hydrogen
Green hydrogen For personal use only final final responses commercial investment and development decision selection late 2022 2023-2024 late 2024 N OVE M B E R 20 22 I N VE ST OR ROAD SH OW PRE SE N T AT I ON 26
Slide 28: Evolving our customer approach…from sales growth
Evolving our customer approach…from sales growth For personal use only Retail sales volume GWh 10,000 8,941 8,000 56% 8,405 growth 7,376 in 5 years 6,000 6,240 5,981 5,727 4,000 2017 2018 2019 2020 2021 2022 Financial Year ended 30 June Source: Meridian N OVE M B E R 20 22 I N VE ST OR ROAD SH OW PR
Slide 29: To energy solutions that enable customers to decarbonise
To energy solutions that enable customers to decarbonise Accelerate Energy Innovation For personal use only Predict VPP Optimise Aggregate Transport Distributed Process Heat Demand Flexibility Gen/Storage 2025 Draft Retail to 30% of Retail to or operate 50MW of flexibility Utility scale VPP/DF Outco
Slide 30: 5-year financial performance
5-year financial performance EBITDAF1 Net profit after tax (continuing operations) Operating cash flows $M $M $M 1,000 500 700 For personal use only 800 600 400 500 600 300 400 400 200 415 451 300 635 604 774 787 692 709 622 339 200 427 431 461 200 100 201 175 100 0 0 0 2018 2019 2020 2021 2022 2018
Slide 31: Disclaimer
Disclaimer The information in this presentation was prepared by Meridian This presentation contains a number of non-GAAP financial Energy with due care and attention. However, the information is measures, including Energy Margin, EBITDAF, Underlying NPAT and For personal use only supplied in summary