Annual Results Announcement Transcript (PDF)

TRANSCRIPT – MERIDIAN ENERGY ANNUAL RESULTS ANNOUNCEMENT 26 AUGUST 2026

Slide 2 - Introduction

Tēnā koutou, good morning everyone, and thank you for joining us for Meridian Energy's results announcement for the financial year ended 30 June 2026.

I'm Mike Roan, Meridian's Chief Executive, and with me today is our Chief Financial Officer,

Mandy Binnie.

Slide 3 – FY26 Outcomes

A year ago, I presented a result that reflected some very challenging market conditions.

At the time, I said I remained confident in Meridian's future and in our ability to grow the business, support the economy and deliver value for shareholders.

This past year demonstrates why.

We delivered a strong financial result.

And as importantly, the business is stronger, more resilient and better positioned to create value.

The foundations we have put in place give me confidence that Meridian can continue creating value as wholesale prices normalise, business electricity prices fall, and electricity price increases for households begin to moderate.

Financial outcomes matter because they tell us whether we are creating value. But they are not the entire story. The broader story is the improvement in Meridian’s underlying capability, some of the most significant elements of which are captured on this slide.

Over the last year the Meridian team has focussed on increasing the flexibility of our generation portfolio, supporting customers and continuing to build – and execute – a high-quality development pipeline.

We increased our hydro storage by 20%, secured a further 35-year consent for the Waitaki

Power Scheme, added 30MW of hydro capacity, improved hydro availability, expanded our development options, grew our customer base and extended our EV charging network.

At the same time, Dow Jones recognised Meridian as one of only ten utilities globally, and the only utility in our region, included in its Best in Class World Index.

I'll return to many of these achievements throughout the presentation, but first I'd like to talk about our people.

Slide 4 - Our People

No business outcome happens on its own. It is the product of the people who come to work every day and make Meridian what it is.

As the slide shows, Meridian continues to attract people who are highly motivated, effective and committed to our purpose.

Despite significant change across the business during the past year, staff engagement has continued to improve. That's pleasing, but it also comes with a responsibility on leaders, including me, to keep raising the bar on what good looks like. And we will.

Our development programme continues to grow and with it the risk profile of the business.

More construction, more contractors on site and more field-based work all increase the importance of getting health and safety right.

Meridian's culture gives me confidence that our people feel empowered to slow work down, or stop it if conditions warrant. What concerns me is that this culture is not yet flowing through to our contractors as consistently as it should, and our injury statistics reflect that.

I regularly tell contractors the same thing I tell our own people: when you're on a Meridian site, it doesn't matter what badge you're wearing you are one of our team. And the expectations and standards are the same.

Our focus is on better contractor induction, clearer site communication and stronger critical controls.

Of all the responsibilities I have as Chief Executive, keeping people safe remains the most important.

Slide 5 - Regulation

The regulatory and political environment remains fluid and many of the larger policy decisions will be influenced by the outcome of the election.

Investors generally dislike uncertainty. Fortunately, Meridian only has two significant near-term capital allocation decisions; the refurbishment of Waitaki Power Station and Mt Munro Wind farm in the Wairarapa.

The first is relatively straightforward. The second will be considered by the Board in December, by which time we should have a clearer view of the policy environment.

The key regulatory matters affecting the business are set out on this slide.

While the eventual shape of the LNG proposal and the Winter Energy Reliability Obligation remain unclear, the Electricity Authority's Level Playing Field regime is now in force and

Meridian's first Retail Price Consistency Assessment will be submitted in September.

Last year, Meridian's retail business recorded an EBITDAF loss again. As captured in a later slide, that outcome reflected retail prices not moving as quickly as wholesale costs.

As wholesale prices have now returned to levels that reflect the long-run cost of new investment, over time, I expect retail profitability to normalise.

The Authority will form its own view on that relationship. Our job is to apply the rules properly while making sensible pricing decisions for customers.

Before moving on, I want to acknowledge the Government’s progress on fast-track consenting and broader resource management reform.

We talk a lot about affordability, security and decarbonisation. None of those things happen unless projects get built.

New Zealand has no shortage of renewable resources. Often, the challenge has been gaining timely consents to make the best use of them. These reforms are helping address that problem and, in my view, will make a meaningful difference to the pace at which the country can electrify and grow.

Slide 6 - Renewable Construction

There really isn't a great deal to say on this slide, which is exactly what you want from projects under construction.

Ruakākā and Te Rahui remain on schedule, costs remain well controlled and Tauhei is a little ahead of schedule.

We are taking a diversified approach to funding solar development. Ruakākā is on balance sheet, Te Rahui is project financed and Tauhei is purchased. We do like solar as part of the portfolio, but diversity of funding and structuring seems important as we observe it’s impact.

One thing not on this slide is the role solar can play in reducing dry-year risk.

As droughts generally coincide with periods of high sunshine and low rainfall, the more solar generation there is in the system, whether utility-scale or behind the meter, the less pressure there is on hydro storage during those periods.

Solar therefore does more than add generation. It can help preserve water when water is most valuable.

And early analysis suggests that benefit may be meaningful. While the work is not yet complete, it reinforces our view that continued solar development can improve system security while benefitting Meridian and electricity consumers.

We'll share more on that work at our interim results.

Slide 7 - Ruakākā Battery

The Ruakākā battery is a good example of successful electrification. It improves security, lowers system costs, enables greater use of renewable generation and creates value at the same time.

It has done this by improving HVDC transfers, value capture during volatile market conditions, and improved efficiency across the electricity system.

Starting with the top right graph, the battery has supported higher levels of HVDC transfer. As you can see, since the Ruakākā battery was commissioned, transfers above 1,100MW have become a new normal for the market.

That additional transfer capability allows more renewable energy from the Waitaki and Waiau catchments to reach North Island customers and it reduces the reliance we would otherwise have on thermal generation in the North Island.

Second, the battery is capturing value during periods of extreme price volatility. The bottom right graph shows that. Our trading systems are highly automated and the battery increasingly optimises between energy dispatch and reserve services in real time.

Third, the North Island to South Island futures price differential has narrowed materially since announcement. That improves South Island price capture and reduces the cost of hedging our

North Island customer base.

Encouragingly, these benefits are not just limited to Meridian. They also support the wider electricity system.

We saw that between the 4th and 7th of August. During record electricity demand, the system continued to perform despite Huntly 5 being unavailable. Ruakākā was one of several assets supporting system security and demonstrating how a more renewable electricity system can operate reliably.

Slide 8 - Renewable Development

There are two key points on this slide.

First, any major investment decision we make over the next twelve months will largely affect

FY30 and beyond. That is the reality of developing and constructing large-scale renewable assets.

Second, we now have multiple credible development options in front of us. That means we can remain disciplined and allocate capital only where and when returns justify the risk and the use of capital is attractive relative to other opportunities.

Looking across the portfolio, and as summarised on the bottom graph, Mt Munro is a quality asset. Barring a material change to market or policy conditions, it remains on track for a final investment decision in December.

Te Rere Hau is arguably a higher-quality asset again and the outstanding issues I discussed at

Interims have been worked through. The wind farm is shaping up as a strong candidate for an investment decision in the third quarter of 2027.

At Interims, I said that Te Rahui Stage 2 could be ready for an investment decision within twelve months. That remains the case. Being ready to decide, however, is different to being ready to commit capital. While its economics remain attractive, it represents a meaningful increment of new solar generation.

Therefore, before committing I want confidence in sustained demand growth or a customer arrangement that supports the investment.

The Ruakākā battery has also demonstrated the value that an integrated energy park can create. Combining generation and storage alongside our existing portfolio is proving more valuable than we originally expected.

As a result, I've asked the team to look closely at how we might accelerate the development of the Bunnythorpe Energy Park.

Few companies can combine batteries with more than 12,000GWh of South Island hydro generation and a large North Island customer base. We can, and we are becoming increasingly confident about the value of that combination.

The final project worth mentioning is one of our oldest assets.

Waitaki Power Station turns ninety-one this year and next month we expect to reach a final investment decision on a major repowering and uplift project. Waitaki has served the country exceptionally well over many decades. This investment ensures that it will continue doing so while improving its performance and value.

Slide 9 - Internal PPA

As the market evolves, many developers are seeking to align new generation directly with new load, whether that is a data centre, an industrial customer or another electricity user.

We will do that in some cases and I've already touched on at least one example of where that may occur.

Our preferred broader approach, however, is to grow generation and customers together.

As you can see from the graph on this slide, the level of customer sales exceeds our optimal market position. As a result, we buy ASX contracts to cover the difference. However, when

Ruakākā and Mt Munro come online, the volume of North Island hedge purchases required to support our customer book will reduce. And those projects are needed: while the sales position looks flat, our customer book will grow to 500 and then 600 thousand customers before 2030.

Our development projects can therefore create value as standalone investments and as part of the wider Meridian portfolio.

This approach maintains development discipline, reduces our reliance on external hedge markets and creates greater resilience if wholesale prices fall materially.

We don't need every project to be tied to a single customer. Nor do we want every project fully exposed to the merchant market.

The right position sits somewhere in between.

Slide 10 - Risk Management

This slide updates the one presented at our Interim Results, with the important addition of the storage now available at Lake Pūkaki.

The key point is not simply that Meridian has more risk management volume available than it did in the 2025 financial year. The portfolio is now considerably broader, more diverse and more flexible.

Compared with back then, the volume of available risk management options has roughly doubled. It is diversified across different mechanisms, counterparties and fuel sources. A greater proportion is now controlled or directly accessible by Meridian rather than being entirely dependent on third parties.

I know this remains particularly important to shareholders given what unfolded during the previous financial year.

Looking at the portfolio today, my assessment is that we probably have more flexibility than we strictly need in current conditions. But that's a good position to be in.

It gives us confidence to continue growing the customer business, supports future investment decisions and allows us to optimise the mix of risk management products as conditions evolve.

In a more renewable electricity system, the ability to respond to changing hydrology, demand and market conditions is becoming as important as raw generation volume.

That is why the twenty-year demand response arrangement with NZAS is strategically important. It provides a significant source of flexibility at a time when flexibility is becoming increasingly valuable.

Combined with the Huntly Strategic Energy Reserve, additional Pūkaki storage and our growing renewable portfolio, Meridian is in a materially stronger position than it was just two years ago.

Slide 11 - Additional Storage

I want to explain why securing access to the additional storage at Pūkaki may prove to be one of

Meridian’s most important achievements in recent years.

The events of 2024 exposed a significant vulnerability in this country’s energy system due to the unexpected decline of the gas sector. As the top graph shows, had additional hydro storage been available, wholesale prices would not have reached the levels they did.

That is why we pursued it through fast track.

The first benefit is therefore greater protection against dry-year and security of supply risk.

The second benefit is lower wholesale prices and these will flow through to customers. We estimated that increased storage flexibility could reduce average electricity prices by up to around $10/MWh or by $400m per annum.

And the last is to shareholders.

Recent operating analysis has highlighted the that the opportunity to improve coordination between the Waitaki and Waiau catchments is a little larger than initially expected.

While we knew that this additional storage would reduce spill in the Waitaki system, increasing usable storage at Pūkaki also creates more flexibility in the Waiau.

In practical terms, we should now be able to use lake Manapōuri and Te Anau low ranges more effectively when conditions allow, knowing additional storage remains available at Pūkaki if a drought develops.

As historical annual spill is in the order of 600GWh in the Waiau and 800GWh across both catchments annually, capturing a portion of spill in the Waiau creates a larger opportunity than previously expected.

But the most important benefit remains security of supply.

Slide 12 - Our Customers

The major focus for the Retail team this year has been migrating customers onto the new technology platform Kraken. We have easily passed the halfway mark in that endeavour.

At Interims I said that we had slowed the migration to protect the customer experience. That was the right decision. The broader migration has gone quite well, although some decisions affecting the Powershop experience frustrated customers and, understandably, they let us know.

We are still working through a small number of issues, but most have been resolved.

I became a Powershop customer myself during the process. I switched from Meridian partly because I wanted to experience the changes first-hand and to understand what was frustrating people. The new app experience is different from the old one, and while change always takes some adjustment it is straightforward to use. Importantly, we now have a platform to continue improving the customer experience and operating efficiency.

Despite the scale of the migration, we continued to increase our market share. And the real value lies in what comes next. The new platform gives us the ability to innovate, improve the customer experience and add value for customers.

The other important development for customers has been the movement in wholesale electricity prices.

Since the start of the year, wholesale futures prices have fallen by between 25 and 40 percent depending on what year you look at. That is a material shift and is great news as those lower wholesale prices are already flowing directly to business customers as contracts are renewed.

And that is strong evidence that the market is doing what it is supposed to do.

Meridian and other generators are investing in renewable generation at an unprecedented scale in New Zealand. Those investments have increased supply, improved security and put downward pressure on prices.

Slide 13 - Electricity Pricing

The top graph on this slide compares real residential tariffs with wholesale spot and futures prices.

The key point is that residential prices have not risen at the same rate as wholesale prices since

2019. They have lagged materially.

If you wanted a simple illustration of why the gentailer model exists, this is it.

Gentailers absorb and smooth wholesale market volatility, so customers do not experience the extreme movements that occur in spot and futures markets.

But as wholesale prices have fallen, the question on everyone’s minds is, will residential prices also soften?

The headline is relatively straightforward: wholesale prices have fallen materially and customers will benefit over time. However, as the graph on the bottom right shows, the pace and scale of that benefit will be influenced by regulated lines charges, which remain a significant headwind out to 2030. These are obviously outside of our control.

Households may therefore see less relief in the total bill than movements in wholesale electricity prices alone would suggest.

But to provide confidence, today we are committing to ensuring that for residential and small business customers, the average price change to the energy component of the bill across all of our plans will be held below the rate of inflation over the next year.

Meanwhile, we remain focused on helping customers save through our products and services and continuing to support those who are finding it hard to keep up with their bills. Our Board has approved an additional $7 million to extend our Energy Wellbeing Programme through to 2030, allowing us to continue partnering with community organisations to provide practical support for customers experiencing hardship.

We’ve also materially sharpened pricing at one of our brands, Powershop, starting this week.

So, if you're a Powershop customer, keep an eye on your app. It is a small way of thanking customers who have stayed with us through a challenging period. We appreciate it.

Mandy over to you.

Slide 14 – Mandy Binnie

Thanks Mike.

As Mike has covered this has been a strong year for Meridian, financially with excellent EBITDAF and cash flows, operationally with high generation volumes and growing availability, two significant developments underway and a growing pipeline of consented options. These foundations provide us with a platform for growth, and so today we are pleased to deliver our investors an increased dividend, and for the first time we are producing forward earnings guidance.

Slide 15 - Cash flows and EBITDAF

I’m very glad at this point to be putting descriptions of the difficult FY25 year firmly behind us. It is worth noting them though when looking at the comparisons to our FY26 results. As I go through this presentation, where needed I will also give comparisons to FY24, which was more of a normal financial year.

In FY26 Meridian recorded strong operating cash flows of $810 million, up $492 million on FY25.

This is also a 21% increase on FY24’s cash flows.

EBITDAF was a similarly excellent result - $1.05 billion, up $440 million on FY25 and 16% higher than FY24.

These results show the scale of the turnaround from our lowest result in over a decade to our highest ever – almost half a billion dollar increase in operating cash flow and in energy margin – which we will look at in more detail shortly.

The business continues to provide high-quality earnings, converting 93% of EBITDAF to pre-tax and interest cash flows.

We continue to deliver higher than GDP levels of Earnings growth over the long run – over a 15- year period EBITDAF compound annual average growth of 6%.

Slide 16 – Dividend

Now, onto dividends.

Recognising the excellent result, the Board has declared an increased final dividend of 16.1 cents per share up 8.4%, bringing the full-year dividend to 22.5 cents, up 7.1%. Imputation credits on the final dividend will be attached at 90%.

The strong earnings reversion in FY26 provides ample short-term headroom. As a result, we have dialled the dividend reinvestment plan discount back to 0%. Our modelling suggests we may consider reinstating a discount in the future, particularly when we bring the large wind options to final investment decision, alongside other sources of funding.

Slide 17 – Movement in EBITDAF

Energy margin was the main driver of EBITDAF growth, with a lot more water available, and without the need to lean on risk products as much as last year. Significant growth in mass market customers also supported energy margin.

The fall in other revenue is predominantly related to one off insurance proceeds received in

FY25.

I’ll talk to costs in more detail shortly, however its worth just touching on a few of the larger items. Transmission and distribution cost increases continue to flow through, and operating costs landed within guidance at an 8% increase on FY25.

Slide 18 – Energy Margin

With more fuel in the system this year, physical margin was impacted by big swings in both volumes and prices. Wholesale spot prices were significantly lower, while both hydro and wind generation volumes increased.

Continued mass market sales growth is the result of the successful execution of our retail strategy and it is great to see that showing up in our financial performance, and more than made up for a flat Commercial & Industrial book.

Significant margin movements relating to financial products shows how much improved hydro conditions in FY26 reduced derivative purchases and demand response costs, compared to

FY25.

Slide 19 – Retail Sales

The shift in the retail book more towards mass market was accelerated at the start of the year by the acquisition of the Flick Electric customers.

As Mike has already mentioned, total customer connection numbers are up 12%, leading to sales volumes up 14%.

Declining ASX wholesale prices are flowing through into C&I contracts, leading to a slight decline in revenues in that segment, while mass market revenues were up $217 million. C&I contracts are now out to an average tenure of over 3 years.

Overall, we continue to deliver sustained growth in retail netback.

Slide 20 – Generation

Moving onto generation.

Annual inflows were above average at 122%. While this is a relatively normal level of inflow – it is similar to levels seen in other above average years – it’s the timing of inflows that is important.

Record hydro inflows through September to January supported the FY26 financial result.

Then the third wettest June on record means we have started FY27 with healthy storage.

The Generation upgrade programme continued, delivering 30MW additional capacity across

Benmore and Ōhau B and C, as well as significant availability improvements.

Finally an update on the transformers at Manapōuri. We had two delivered in the financial year, with one installed ahead of winter and the other due to be installed later this year. 3 more are expected to arrive in FY27.

Slide 21 – Operating Expenses

Operating expenses were $313 million in FY26, an increase of $24 million or 8%, and within guidance.

Included in the increase from FY25 is a reinstatement of short-term incentives. We also saw inflation level remuneration increases.

We now have both quantification and a clear pathway to remediating our Holidays Act obligations and costs for this have been recognised at just over $3 million.

We have had an increased level of customer service staffing through both the Flick customer onboarding, then the Kraken migration programme. We expect to complete customer migration to Kraken by interims.

Maintenance costs were around $7 million higher mostly due to higher spend at Manapōuri, and ongoing wind farm maintenance including major components which do not get capitalised.

Major IT projects remain a feature of our work programme, with DigiGEN and the Kraken migration featuring in FY26, but the level of spend was $3 million down on FY25 when we completed the finance system migration to Oracle.

Slide 22 – Capital Expenditure

Now onto capital expenditure.

In March, we revised our guidance and indicated that we might spend between $280 and $310 million.

We landed at $261 million, up 35% from last year but still falling just below that guidance level, largely as a result of movements in the payments schedule for Ruakākā solar.

At Ruakākā, 64,000 of the 257,000 panels are now installed at one of the 3 sites. The build remains on target for full power towards the end of this financial year.

The bulk of the other spend is in the multi-year work programmes for replacement transformers, the generation control system and the earthquake strengthening works underway at Benmore penstocks.

Slide 23 – Below EBITDAF

Net profit before tax for FY26 rose $779 million, and net profit after tax rose $582 million.

Here you see the impacts of the better year, including a $403 million reduction in unrealised losses from energy and treasury hedges.

This was offset by the $88m additional depreciation that resulted from the $2.1 billion revaluation of generation assets at the end of FY25. And with another $1.8 billion uplift in asset valuation this year, depreciation will increase again in FY27.

These items have no impact on cash flow and are not included in EBITDAF but are reported as part of Net Profit before and after tax.

Finally, the non-GAAP measure of underlying net profit after tax, which excludes items such as movements in the unrealised value of hedges, was up $252 million.

Slide 24 – Funding Capacity

During the year net debt increased by 11% to almost $1.7 billion, but spot net debt to EBITDAF improved to 1.6x, down from 2.5x in FY25, as a result of the earnings reversion. We expect this to rise again in the coming years as our renewable build programme continues.

The funding base remains diverse, with issuances in the last year in both the Kiwi and Australian markets.

Headroom is strong with $1bn of committed borrowing facilities, none of which were drawn at year-end. Overall, the capital structure remains well positioned to fund our growth programme.

Slide 25 – FY27 Earnings Guidance

And now onto FY27, and for the first time this year we have chosen to deliver forward earnings guidance.

Subject to a reasonable set of caveats which you can see on this page, our expected EBITDAF for FY27 lies in the range $1.04 to $1.12 billion.

Slide 26 – FY27 Cost Guidance

We continue to provide guidance on our future operating and capital expenditure.

Operating costs first, where we expect to spend between $321 and $326 million next year, an increase of between 2.5 - 4%

Like any other company we are experiencing inflation related cost increases, with these being broadly managed through efficiencies. The majority of opex increases are related to firstly IT – both system licensing and cyber security costs, secondly Ruakākā solar operating costs and finally an increase to the scale of our DigiGEN programme. The DigiGEN Programme identified over $3.5m in opportunities to improve revenue or decrease opex. It delivered over $1m of those savings in FY26. We are aiming to deliver $6m in value in FY27.

I mentioned completion of Holidays Act remediation included in FY26 previously, that will drop away in FY27, and we expect to enter a lower insurance cost cycle for at least the next 12 months.

Capital expenditure is predicted between $370 and $410 million.

I’ve given you a fairly granular breakdown of how that is expected to be spent, with the completion of Ruakākā Solar being the largest growth expenditure while the wind projects at Mt

Munro and Te Rere Hau move into preconstruction.

Work will commence on the Waitaki Hydro Station upgrade. While that programme of work is designed to maintain the long-term reliability, safety and operability of the station, the project also delivers additional generating capacity. The capex for that project is therefore split between growth and maintenance.

Slide 27 – July 2026 Operating Result

Finally, a quick look at the start of FY27.

The retail sales growth and higher generation seen last year continued into July. As context, inflows in June and July have been twice the level of those months in 2024. Lake levels are well above average for this time of year and we are seeing a strong start.

Back to you Mike.

Slide 29 - Closing Comments

Before we move to questions, I want to leave you with three thoughts.

First, FY26 was a good year.

We delivered a very strong financial result, but more importantly we materially improved the capability of the business. We strengthened our hydro position, expanded our development options, improved the risk management portfolio, grew customers and continued investing in the infrastructure that will support New Zealand's future electricity needs.

Second, many of the benefits from those decisions still sit ahead of us.

The investments we are making today, whether in generation, storage, customer systems or development, are designed to create value over many years, not simply the next reporting period.

We are also approaching capital allocation with discipline. We have options, but we do not need to pursue every option. We will invest where returns justify the risk and where an opportunity strengthens the value and resilience of the wider Meridian portfolio.

And third, for the first time in several years, I think the industry can start looking forward with a greater degree of confidence.

Wholesale prices have fallen materially, new renewable generation is being built at pace, security of supply has been strengthened and the benefits of this are starting to flow through to customers. None of that happened by accident.

There is still plenty of work to do, but both Meridian and the wider electricity industry enters the new financial year in a stronger position. And the opportunity ahead is significant.

As New Zealand grows its renewable generation base, we strengthen an advantage that few