Meridian Energy Limited · NZX:MEL
Meridian Energy — Non-Deal Roadshow (September 2019)
22 slides from Meridian Energy's roadshow presentation, Sep 30, 2019
Slide 1: Meridian Energy Investor Presentation
For personal use only Meridian Energy Investor Presentation 30 September 2019 Attached is a presentation Meridian Energy will be making at a series of investor meetings during October 2019. ENDS Neal Barclay Chief Executive Meridian Energy Limited For investor relations queries, please contact: For
Slide 2: 2019 Roadshow Presentation
For personal use only 2019 Roadshow Presentation OCTOBER 2019
Slide 3: Electricity markets
Electricity markets For personal use only OCTOBER 2019 2019 ROADSHOW PRESENTATION 2
Slide 4: 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 Wholesale and r
Slide 5: Electricity market structure, consumption and generation
New Zealand electricity market For personal use only 5 major 1 big industrial user 1 transmission grid 29 distribution 40 retail 2.1 million generators (Rio Tinto/Sumitomo owner (state owned) businesses (various brands consumers (all listed) smelter) ownership structures) (41 TWh pa) Sources: Electr
Slide 6: Electricity market: hydro and supply risk
New Zealand electricity market New Zealand’s hydro generation is managed against limited controlled storage For personal use only Bulk of hydro inflow is anti-correlated to winter demand peak Thermal capacity and fuel storage manages potential hydro inflow deficit and other renewable intermittency E
Slide 7: Demand
New Zealand demand Underlying demand growth of 0.3% in FY19 Meridian demand forecasts For personal use only TWh Growth across sectors, lower seasonal 75 full decarbonisation agricultural load (incl. broader conversion efficiency gains) Smelter off-take up 4% in FY19 with 4th 65 partial decarbonisati
Slide 8: Demand: Tiwai smelter
New Zealand demand Tiwai smelter is 12% of national demand For personal use only CfD contract with Meridian on NZAS perpetual 12-month termination right Additional 50MW contract signed in May 2018, bringing contract volume to 622MW Aluminium remains a commodity exposed to cycles and Chinese supply d
Slide 9: Supply
New Zealand supply A series of planned and unplanned gas field Generation plant end of life profile For personal use only MW outages is occurring 600 Gas Coal/Gas Geothermal Wind Diesel This fuel scarcity has pushed wholesale spot and forward electricity prices higher in the 500 last year 400 Longer
Slide 10: Policy and regulation: zero carbon
New Zealand policy and regulation Zero carbon Zero Carbon Bill at Select Committee For personal use only Targeting net zero GHG emissions (excluding methane) by 2050 Targeting a gross reduction of methane emissions of 24%- 47% below 2017 by 2050 Establishes a new independent Climate Change Commissio
Slide 11: Policy and regulation: TPM and EPR
New Zealand policy and regulation TPM Meridian's annual HVDC costs For personal use only $M Meridian actual EA recently published proposed TPM 120 106 amendments 100 Proposes replacing current HVDC charge EA estimate 80 70 with benefit–based and residual charges EA estimate 60 41 EPR 40 Electricity
Slide 12: Australian market
Australian market Renewables are dominating new build Coal generation capacity in NEM For personal use only generation Nameplate Surprising Federal election result likely to see GW 25 Remaining coal NSW QLD VIC more cautious policy settings DMO1 and VDO2 both came into effect on 1 20 July, more pric
Slide 13: Meridian Energy
Meridian Energy For personal use only OCTOBER 2019 2019 ROADSHOW PRESENTATION 12
Slide 14: About Meridian
About Meridian NZ$13b company, NZ’s largest listed For personal use only company, 51% Government owned Largest of five listed New Zealand retailer generators The only New Zealand electricity company with a customer and asset base diversified across different countries Strong environmental, social an
Slide 15: About Meridian: generation assets
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 and proven success operating in a high wind
Slide 16: Our people
Our people 98% gender pay equity Workforce measures For personal use only YWCA equal pay award 120% FY19 FY18 Gender Tick accreditation Targeting 40% of women in leadership and 90% 98% 98% senior specialist positions by 2020 77% 78% 60% Diversity and inclusion award at the 2019 NZ HR Awards 45% 42%
Slide 17: Our strategy
Our strategy Our purpose: Competitive markets Sustainability Clean For personal use only Climate action energy for Trading a fairer Asset management Re-consenting and Financing healthier world. NZ retail AU retail NZ generation AU generation Flux earnings OCTOBER 2019 2019 ROADSHOW PRESENTATION 16
Slide 18: Our sustainability leadership
Our sustainability leadership Helping our customers For personal use only Replaced unfair prompt payment discounts with fairer, clearer pricing Tailored payment plans, LevelPay, hardship Our key sustainability goals: support SDG13 Climate Action. SDG7 Affordable and Helping the climate Clean Energy.
Slide 19: Shareholder highlights
Shareholder highlights Six successive years of earnings and Total shareholder return For personal use only dividend growth since listing 60% 59% Double digit shareholder returns every year since listing 40% High free cash flow, high payout ratio, 33% progressive ordinary dividend policy 31% 20% Stru
Slide 20: Meridian's investment proposition
Meridian’s investment proposition customer strong free For personal use only growth in cash flow NZ capital long term retail low capital manage- sustainable platform needs ment business changes income growth progressive high free medium ordinary cash flow Flux term new DPS payout generation continue
Slide 21: Glossary
Glossary Hedging volumes buy-side electricity derivatives excluding the buy-side of virtual asset swaps Average generation price the volume weighted average price received for Meridian’s physical generation Average retail contracted sales price volume weighted average electricity price received from
Slide 22: 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