Mercury 2024 Annual Shareholders’ Meeting

The Mercury Building, 33 Broadway, Newmarket 1023
PO Box 90399, Auckland 1142





STOCK EXCHANGE LISTINGS: NZX (MCY) / ASX (MCY)

NEWS RELEASE

Mercury 2024 Annual Shareholders’ Meeting

19 September 2024 – The attached presentations will be given at Mercury NZ Limited’s Annual
Shareholders’ Meeting starting at 1:00pm (NZST) today which will be held in person at Hyundai
Marine Sports Centre, 8/10 Tāmaki Drive, Ōrākei, Auckland 1071 and as a virtual meeting.

The virtual meeting can be accessed virtually through the Computershare Meeting Platform
https://meetnow.global/nz.

To access the virtual meeting:
• click 'Go' under the Mercury meeting
• click ‘Join Meeting Now’

Shareholders can log in by entering their CSN/Securityholder Number and post code (or country of
residence if outside of New Zealand).

Attachments:
• 2024 Annual Shareholders’ Meeting – Chair, Chief Executive and Mercury executive
addresses
• 2024 Annual Shareholders’ Meeting - Presentation

ENDS

Howard Thomas
General Counsel and Company Secretary
Mercury NZ Limited


For investor relations queries, please contact:
Paul Ruediger
Head of Business Performance & Investor
Relations
027 517 3470
investor@mercury.co.nz

For media inquiries, please contact:
Shannon Goldstone
Reputation and Social Impact Lead
027 210 5337
mercurycommunications@mercury.co.nz


ABOUT MERCURY NZ LIMITED
Mercury generates electricity from 100% renewable sources: hydro, geothermal and wind. We are
also a retailer of electricity, gas, broadband and mobile services. We’re listed on the New Zealand
Stock Exchange and the Australian Stock Exchange with the ticker symbol ‘MCY’, with foreign exempt
listed status. The New Zealand Government holds a legislated minimum 51% shareholding in the
Company.
Visit us at: www.mercury.co.nz

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Mercury 2024 Annual Shareholders’ Meeting Chair,
Chief Executive and Executive Addresses

Where: HYBRID MEETING (ONLINE AND IN PERSON AT HYUNDAI MARINE SPORTS CENTRE, ŌRĀKEI)
When: 1pm (NZST), 19 September 2024



[ADDRESS BY THE CHAIR: SCOTT ST JOHN]
SLIDE 4: CHAIR’S ADDRESS

Tēnā koutou katoa.
Good afternoon and thank you for joining us at Mercury’s 2024 Annual Shareholders’ Meeting. My name is Scott St
John, and I am Chair of Mercury NZ Limited. I’ve had the privilege of being Chair since January, following the
retirement of Prue Flacks in December 2023 after her substantial contribution to Mercury.
On behalf of your directors, our new Chief Executive Stew Hamilton, our leadership team and all of Mercury, I
extend a warm welcome to you all, whether you’re online or here in person.
I am pleased to confirm we have a quorum represented here today and therefore declare Mercury’s 2024 Annual
Shareholders’ Meeting open. Voting is open on all items of business.

SLIDE 5: AGENDA
Outlining our agenda for today. First, I will introduce you to your board, all of whom are here in person.
I will comment briefly on our financials and the broader environment in which we are operating. Stew will then talk
to Mercury’s forward focus.
The Board was delighted to appoint Stew to the role of Chief Executive, succeeding Vince Hawksworth who retired
at the end of August. As you may recall from our meeting last year, Stew was previously Mercury’s Executive
General Manager Generation. He has a proven track record of success in leading large, complex businesses in
New Zealand and internationally. His appointment is the result of the Board’s strategic focus on succession
planning, and testament to the depth of talent we have within Mercury.
I want to also acknowledge Vince for his significant contribution to Mercury and the sector more broadly.

Following Stew’s address, we will hear from our Executive GM Sustainability Lucie Drummond and Executive GM
Customer Craig Neustroski about key activity in their areas.
We will then move to resolutions. After the resolutions are presented and voting is closed, we will take general
questions from you relating to the company.
Now for the introductions:
SLIDE 6: YOUR BOARD

We have your Board of directors:
• Mark Binns
• Mike Taitoko

2024 ASM - Chair, Chief Executive & Executive Addresses | 19 September 2024 | Page 2 of 8

• Adrian Littlewood
Susan Peterson, who chairs our People and Performance Committee
• James Miller, who chairs our Risk Assurance and Audit Committee
• Lorraine Witten; and
• Hannah Hamling.

Nicole Rosie, our fifth Future Director under the Institute of Directors’ Future Directors Programme, is also present.
Nicole is invited to attend and contribute to Mercury Board and Committee meetings but does not participate in
decision making.
We are also joined by our:
• Chief Executive, Stew Hamilton,
• Chief Financial Officer, William Meek, and
• Company Secretary, Howard Thomas.

Also present are representatives from EY, who undertake the audit of Mercury on behalf of the Auditor-General,
and members of Mercury’s Executive Team.
SLIDE 7: FINANCIAL OVERVIEW
Mercury’s net profit after tax lifted to $290 million in FY24, due to positive unrealised fair value movements in
financial derivatives and carbon units, higher EBITDAF and prior year revaluation losses and impairment, partially
offset by higher taxes and interest expense.
Our scaled business produced EBITDAF of $877 million supported by increased wind and geothermal generation
and higher customer prices, and partially offset by reduced hydro generation and higher operating costs.
Operating costs increased to $385 million, primarily due to higher salaries and wages and an increase in
headcount and higher generation maintenance costs partly due to new wind operations at the Turitea and the
Kaiwera Downs wind farms.
Stay-in-business capital expenditure (CAPEX) increased to $142 million, as our geothermal drilling campaign
ramped up.

Your Board was pleased to declare a fully imputed final dividend of 14.0 cents per share. This brings the full-year
ordinary dividend to 23.3 cents per share, up 7% on last year and our 16
th
consecutive year of dividend growth.

There has been commentary recently that companies like Mercury have been more focussed on delivering
dividends, than investing in renewable generation for New Zealand.
We believe we can and must do both. In FY24, 42% of our earnings were reinvested in new and existing assets,
while 31% was paid out in dividends and 27% paid as interest and income tax.
We have a responsibility to generate reasonable returns for your investment in our business, and a core way we do
this is by investing to sustain existing operations and grow New Zealand’s renewable generation supply.

Flat national electricity demand for over a decade and a half combined with the significant uncertainty around
whether the NZ Aluminium Smelter would remain in New Zealand, has required careful navigation over many
years.
The $1 billion Mercury invested in wind farms, geothermal drilling and hydro upgrades between FY13 and FY23
reflects our focus on fiscally responsible decision making, balanced with an eye to the future.

We currently have a further $1 billion of investment in the works right now, reflecting an improved outlook.
Our FY25 EBITDAF guidance has been set at $820 million, with the lower than usual hydro inflows, higher gas
purchase costs and trading activity at the start of the financial year impacting this outlook.

2024 ASM - Chair, Chief Executive & Executive Addresses | 19 September 2024 | Page 3 of 8


Ordinary dividend guidance for FY25 is 24 cents per share which represents a 3% increase on FY24, and the 17
th

consecutive year of ordinary dividend increases.
SLIDE 8: A RAPIDLY CHANGING LANDSCAPE
The New Zealand electricity market has effectively delivered secure supply while supporting significant growth in
renewables over the past 20 years.

About 85% of Aotearoa’s electricity generation today comes from renewable sources, and the sector is on track to
deliver around 98% renewable generation by 2030 (according to the independent ‘The Future is Electric’ report by
BCG).

Like other countries, our energy system is evolving to mitigate and adapt to climate change and enable the
electrification of the economy.

The global energy transition will be a complex and uneven process, with disruptions and challenges along the way.

This was brought sharply into focus in early August when the country experienced an energy shortage, which
resulted in record spot electricity and gas prices.

As the charts on screen show, this came about because of short-term issues like low national hydro inflows, and
longer-term issues like gas supply challenges.

More rain creating higher hydro inflows, demand response measures and Methanex gas deals that increased gas-
fired generation saw these prices collapse by early September.

Spot electricity and gas prices were close to zero dollars at times.

These recent events have further underscored the critical importance of taking a whole-of-system approach to work
through the challenges of the energy transition.

As we integrate more intermittent generation like wind and solar, the challenge of matching supply and demand to
maintain consistent supply of electricity increases, with potential for sharp peaks of demand or physical lack of
supply.

To that end, we welcome the refocusing of attention on security of supply, including the recognition of the critical
role of gas as a transition fuel.

The electrification opportunity is important to New Zealand’s long-term prosperity. It will be the biggest contributor
to the nation achieving its climate change goals and can help drive a higher growth economy. We need to work
collectively to ensure it remains on track.

Alongside the sector we’ve worked hard to establish mechanisms for this, as you’ll hear from Lucie about.

We recognise continuing to build social licence with customers, communities, people and the wider public is critical
to the success of this journey.

Before hearing from our Chief Executive Stew about our forward focus, we will thus watch a short video looking
back on FY24 that showcases some of the ways we’re achieving this.

Ngā mihi nui.

[VIDEO OF FY24 HIGHLIGHTS PLAYS]
[ADDRESS BY THE CHIEF EXECUTIVE: STEW HAMILTON]

2024 ASM - Chair, Chief Executive & Executive Addresses | 19 September 2024 | Page 4 of 8


SLIDE 10: CHIEF EXECUTIVE’S ADDRESS
Thank you, Chair.
Kia ora tātou katoa. Welcome everyone.

Ko Stew Hamilton toku ingoa. Ko au te tumuaki o te roopu whakahaere o Mercury.

It is a pleasure to present at my first Annual Shareholders’ Meeting as Mercury’s Chief Executive.
Over the past month I’ve enjoyed connecting with many of our team and stakeholders, and I look forward to
connecting with many of you after the meeting today.
I want to firstly acknowledge the recent challenges that Scott touched on, and the impact they have had on some
businesses.
Considering these challenges, we have been evolving our commercial and industrial customer offerings to meet
emerging needs, including providing longer-term arrangements in some cases.
SLIDE 11: OUR THREE-YEAR OBJECTIVES
As a member of the Executive Management Team the past few years, I’ve been deeply involved in shaping our
strategic direction.
In FY23, we introduced a new purpose: Tiakina te anamata, mā te tūhono i ngā tāngata me ngā wāhi o te inamata.
Taking care of tomorrow: connecting people and place today.
We also updated our 2035 long-term aspirations. Then in FY24, we reset our objectives for FY25 to FY27. These
objectives are our shorter-term enterprise-wide goals that are the key steps we need to take towards meeting our
long-term aspirations.
They include our commitment to delivering more reliable and renewable energy for New Zealand and our support
for the country’s shift to a low-carbon future.
While delivering more generation is a material way in which we are supporting this shift, we are also looking at
things like how we can support customers as their energy needs change.
The three-year objectives also cover our focus on financial growth, creating success with others, our culture and
innovating with technology; all of which enable us to deliver on our ambitions.
As we move forward, I am focussed on enabling the Mercury team to deliver on these goals, while also looking at
the next steps in our growth story.
Front-of-mind is looking at how we can further act on the significant opportunity electrification presents in a way
that delivers economic and sustainable benefits for our communities, Aotearoa and company.

SLIDE 12: TAKING CARE OF TOMORROW
A key way we are acting on this opportunity is continuing to deliver more generation for New Zealand at scale and
pace.

The $1 billion investment that Scott called out includes the $220 million expansion of the Ngā Tamariki geothermal
station, and the $486 million expansion of the Kaiwera Downs wind farm which we began after signing a long-term
supply agreement with New Zealand Aluminium Smelters.

After delays due to procurement and construction logistics, we expect to reach final investment decision for the
Kaiwaikawe wind farm this side of Christmas.

2024 ASM - Chair, Chief Executive & Executive Addresses | 19 September 2024 | Page 5 of 8

We have much more planned too, including five projects which we have put forward for fast-track consideration.
This includes two new projects: a wind farm near Huntly and a grid-scale battery at Whakamaru hydro station.
We are also investing significantly in existing assets, like Karāpiro hydro station, to enhance their resilience and
performance.
We have also made significant progress on our ambitions for our customer business, with the integration of
Mercury and Trustpower complete.
As Craig, our Executive GM Customer, will speak to, we are now seeing the benefits from this, particularly
considerable capability for product bundling.
SLIDE 13: CONNECTING PEOPLE AND PLACE TODAY
I believe we perform at our best when we feel united, empowered, and mutually committed to achieving something
worthwhile.
To that end, we continue to focus on empowering talent and uplifting diversity, equity and inclusion, which we
recognise is critical to attracting and retaining top talent.

We also continue to prioritise health, safety and wellbeing. We have set several milestones to reach safety
citizenship, the gold standard of safety culture, by December 2026.
Finally, before I hand over to my team, I want to make a special mention to our CFO, William Meek, as this is his
last Annual Shareholders’ Meeting. William is stepping down in March 2025 after more than three decades at
Mercury, including 16 years as Chief Financial Officer.

I want to thank William for his huge contribution to Mercury’s success. His presence has made a lasting difference
to Mercury, the sector and capital markets more broadly. A robust recruitment process for his successor is
underway.

Ngā mihi nui. Thank you for your ongoing support of Mercury and our team.
I will now hand over to Lucie, our Executive GM Sustainability, to speak further to our external environment and the
actions we’re taking, alongside others, to actively shape the pathway forward.

[ADDRESS BY EXECUTIVE: LUCIE DRUMMOND]
SLIDE 14: EXECUTIVE PRESENTATION 1: LUCIE DRUMMOND
Thank you, Stew. Kia ora tātou katoa.
As the Executive GM Sustainability at Mercury, my team works on our overall strategic framework and improving
Mercury’s resilience by identifying future risks and opportunities so we can respond to change. We engage work
across the sectors that we are part of to develop long-term sustainable solutions that set New Zealand up for
success.
SLIDE 15. BALANCING THE ENERGY TRILEMMA
The broader environment Scott spoke to highlights just how important balancing the energy trilemma is on our
journey to a lower carbon energy system.
By looking globally and locally, we understand the inherent complexities of the energy transition, and are
committed to navigating the challenges and opportunities it will bring.
Security of supply is of critical importance as Aotearoa rapidly scales up renewable energy. We’re pleased to see a
refocusing of regulatory settings to prioritise this leg of the trilemma. This includes ensuring there is fuel and plant
available in our system that can respond flexibly to peaks in demand and also supply electricity when the sun
doesn’t shine, the wind doesn’t blow, and the rain doesn’t fall.

2024 ASM - Chair, Chief Executive & Executive Addresses | 19 September 2024 | Page 6 of 8

The recent focus on the relationship between the gas market and how gas might play a part in supporting a secure
electricity supply reflects the importance of this issue for New Zealand. We are supportive of exploratory work on
LNG as one potential solution, and would like to see this done in parallel with exploring other security options.
These may include domestic gas production or other fuels that can flexibly provide secure energy to the electricity
system – both for now and into the future.
As well as supporting sector work on delivering a physical solution to security of supply, we are actively contributing
to work on market and regulatory settings needed for a successful energy transition. This includes contributing our
expertise and experience and ultimately supporting the development of solutions in this space.
If we improve the security of our energy supply, we can then improve electricity affordability for our customers.
Affordability remains at the forefront of our strategy. We know managing the costs of this transition is essential to
keeping electricity accessible AND that switching to electricity can ultimately drive lower overall energy costs for
households and New Zealand.
To help with this, we are investing in digital solutions to optimise operations and lower costs. We are also exploring
innovative pricing models to help reduce peak demand pressures. The hot water load control trial, mentioned in the
video, is a great example of this in practice.
In the regulatory space, we are advocating for changes that will support a smart, two-way energy system. An
independent report by BCG found this would be the lowest cost pathway to efficiently scaling our electricity system.
Looking ahead, we are advocating for a clear, long-term view of electricity pricing across the value chain and will
continue to provide help for our customers most in need, as Craig will speak to.
Turning to the renewability leg now, as we’ve seen overseas, building new renewable infrastructure like wind farms
requires earning and maintaining social licence.
With this in mind, we are committed to engaging early and frequently with communities, iwi, and stakeholders -
listening to their concerns and working together to ensure our projects bring local benefits.
This commitment is evident in our approach to upcoming projects, where we actively incorporate community
feedback into planning to minimise environmental impacts and enhance shared value.
SLIDE 16: COLLABORATING FOR SUCCESS
Achieving the scale and pace of change for the energy transition needs a whole-of-system approach. To us, this
means lifting our sights beyond individual projects or issues to instead address challenges across the whole value
chain, from production to end-use. By doing so, we can ensure solutions deliver the best outcomes for New
Zealand. This means thinking beyond our individual operations and collaborating with others.
This is why we have been working alongside other participants across the electricity system to develop an energy
transition framework. The framework aims to speed up progress by concentrating on priority areas and sharing
insights to lower risks. It is the first time this level of collaboration has taken place, recognising the critical
importance of collective action.
By taking both individual actions AND working with others, we are helping to ensure that New Zealand’s energy
transition is not only achievable but also equitable and beneficial for all.
In closing, while the road ahead may be complex, I am confident that Mercury, alongside our partners, is well-
positioned to navigate these challenges. Together, we will drive the transition towards a secure, affordable, and
sustainable energy future for Aotearoa.
Thank you. Ngā mihi nui.
I will now hand you to Craig to speak to key activity in our customer business.

[ADDRESS BY EXECUTIVE: CRAIG NEUSTROSKI]

2024 ASM - Chair, Chief Executive & Executive Addresses | 19 September 2024 | Page 7 of 8

SLIDE 17: EXECUTIVE PRESENTATION 2: CRAIG NEUSTROSKI
Thank you, Lucie. Kia ora tātou katoa.
As the Executive GM Customer at Mercury, I’m responsible for driving the strategy of our customer business.
SLIDE 18: LAYING THE FOUNDATIONS FOR THE FUTURE
Electricity retailers like Mercury are at the forefront of the shift towards a more electric future.
We are not just suppliers of electricity but will drive innovation and adoption of clean energy solutions.
We are deeply focussed on ensuring we set all our customers up for a brighter and more connected future.
As has been shared, FY24 was a big year for our customer business. Our team has worked incredibly hard to get
us to a position where we are well placed to deliver enhanced operating efficiencies and growth.
We reduced our acquisition activity for the first half of FY24 to prioritise the successful completion of the Mercury
and Trustpower integration.
Now this is complete, we are firmly focussed on delivering the benefits of this integration, including leveraging our
scale and bundling capability to enhance and expand our multi-product offerings.
On that note I am very pleased to share that we recently achieved a mini milestone of having 10% of the Fixed
Broadband market. We are also seeing an acceleration in the uptake of our Mobile services.
We continue to deliver integration synergies, with most expected to be secured in FY25.
SLIDE 19: NAVIGATING THE ENERGY TRANSITION
We continue to think deeply about how we can enable our customers to play an active role in the energy transition.
A key focus relates to our gas sales, with expected cost increases in the near to medium term being well
documented.
We are providing information to our gas customers and partners about the outlook and the options available to
them, to equip them with the information needed to make well-considered decisions.
Another key area of focus is on helping manage pressure on the grid at peak times. As our customers’ energy use
changes, we want to ensure customers can participate in demand management with increased transparency and
control.
In the past year we undertook several successful projects and trials in this space. The learnings from these are
feeding into the new products we will bring to market in the New Year.
SLIDE 20: OUR CUSTOMER CARE IMPACT
We expect to see larger increases in lines and transmission costs than we have seen in recent years as a result of
rising costs and level of investment required in critical electricity infrastructure.
We will continue to provide comprehensive support for customers experiencing hardship, including developing
innovative solutions that address the broader challenges related to affordability.
We are pleased with the considerable impact we have achieved in this space, including a 76% reduction in post-
pay disconnections year-on-year. We continue to look for opportunities to drive better outcomes for customers and
shareholders and I am pleased to share that we have had zero credit disconnections in the last 3 months.
A lot of this is executed through our Here to Help programme, which includes a team dedicated to providing tailored
solutions to customers most in need.
Since December 2023, this team has provided comprehensive support in collaboration with government agencies
and community partners to just over 1000 of our customers who are most in need. Nearly a third of these

2024 ASM - Chair, Chief Executive & Executive Addresses | 19 September 2024 | Page 8 of 8

customers no longer require Here to Help support; highlighting the sustainable, long-term impacts we have been
able to deliver.
Among other initiatives, we also continue to provide significant commercial support to social electricity providers
Nau Mai Rā and Toast Electric, to further help whānau in need.
I am excited about the platform we have created and the new ways we can use our scale and capability to deliver
value to shareholders and empower and serve all our customers.
Thank you.
Ngā mihi nui.
I will now hand you back to Scott.

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