STOCK EXCHANGE LISTINGS: NEW ZEALAND (MCY) / AUSTRALIA (MCY)

NEWS RELEASE

Mercury Investor Roadshow Presentations

15 November 2017 - Mercury will be giving presentations at a series of international investor meetings during

November 2017.

The presentation materials are attached.

ENDS

For further information: Media – Craig Dowling 0272 105 337 Investors – Tim Thompson 0275 173 470

ABOUT MERCURY NZ LIMITED

Mercury’s mission is energy freedom. Our purpose is to inspire New Zealanders to enjoy energy in more wonderful ways and

our goal is to be New Zealand’s leading energy brand. We focus on our customers, our people, our partners and our country;

maintain a long term view of sustainability; and promote wonderful choices. Mercury is energy made wonderful.

Visit us at: www.mercury.co.nz

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Mercury Investor Roadshow

WILLIAM MEEK

Chief Financial Officer FRASER WHINERAY Chief Executive

15 November 2017

TIM THOMPSON

Head of Treasury & Investor Relations F

or p

erso

nal u

se o

nly

DISCLAIMER

This presentation has been prepared by Mercury NZ Limited and its group of companies (“Company”) for informational purposes. This disclaimer applies to this document and the verbal or written comments of any person presenting it.

Information in this presentation has been prepared by the Company with due care and attention. However, neither the Company nor any of its directors, employees, shareholders nor any other person gives any warranties or representations (express or implied) as to the accuracy or completeness of this information. None of the Company, its directors, employees, shareholders or any other person shall have any liability whatsoever to any person for any loss (including, without limitation, arising from any fault or negligence) arising from this presentation or any information supplied in connection with it.

This presentation may contain projections or forward-looking statements regarding a variety of items. Such projections or forward-looking statements are based on current expectations, estimates and assumptions and are subject to a number of risks, and uncertainties, including material adverse events, significant one-off expenses and other unforeseeable circumstances, such as, without limitation, hydrological conditions. There is no assurance that results contemplated in any of these projections and forward-looking statements will be realised, nor is there any assurance that the expectations, estimates and assumptions underpinning those projections or forward looking statements are reasonable. Actual results may differ materially from those projected in this presentation. No person is under any obligation to update this presentation at any time after its release or to provide you with further information about the Company.

A number of non-GAAP financial measures are used in this presentation. You should not consider any of these in isolation from, or as a substitute for, the information provided in the audited consolidated financial statements, which are available at www.mercury.co.nz.

The information in this presentation is of a general nature and does not constitute financial product advice, investment advice or any recommendation. The presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any security and may not be relied upon in connection with the purchase or sale of any security. Nothing in this presentation constitutes legal, financial, tax or other advice.

DISCLAIMER 2

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3

MERCURY AT A GLANCE

Market Capitalisation of

$4.5b1 2nd largest NZ gentailer

11th largest NZX50 company by market

capitalisation

100% RENEWABLE GENERATOR, RETAILER AND METERING PROVIDER

~7,000GWh generation per annum from flexible hydro and baseload geothermal

~390,000 customers

2nd largest NZ meter data and services

provider

Dual listing on the NZX and ASX

MCY.NZ / MCY.AX Minimum 51% legislated government

ownership

~20% foreign holding

Corporate credit rating from S&P of

BBB+/Stable Debt of $1.1b

FY2018 EBITDAF guidance of

$515m Based on above-average hydrology and flat operating expenditure

FY2018 ordinary dividend guidance of

$15.0c Ordinary net dividend yield of 4.4%1 (6.1% gross2)

12 month total net dividend yield including special dividend of 6.0%1 (8.3% gross2)

MERCURY

1 At 1 November 2017 2 Including full imputation

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> Electricity markets globally seek to balance Reliability, Pricing and Renewability – the ‘Electricity Trilemma’

> New Zealand has achieved a ‘Trifecta’:

> Opportunity exists in New Zealand to broaden this advantage to reduce reliance on imported fossil fuel

NEW ZEALAND’S COMPETITIVE ADVANTAGE IN ELECTRICITY

INDUSTRY 4

NZ ranks 3rd lowest out of 25 large

energy-consuming countries for

energy security risk

‘Among the most

competitive markets

in the world’

3rd highest level of

renewable electricity generation in the OECD

Source: Accenture, Ministry of Business, Innovation & Employment, United States Chamber of Commerce

PRICING RENEWABILITY

RELIABILITY

STABLE

REGULATORY

ENVIRONMENT

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AUSTRALIA’S ‘ELECTRICITY TRILEMMA’

Source: Ministry of Business, Innovation & Employment, Australian

Government - Department of Industry, Innovation and Science

0

10

20

30

40

50

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

TW

h

NEW ZEALAND’S GENERATION MIX

Hydro Geothermal Wind Coal Gas Other Solar

0

50

100

150

200

250

300

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

TW

h

AUSTRALIA’S GENERATION MIX

Hydro Wind Coal Gas Other Solar

Reliability

> Coal plant retirements and growing intermittent

generation have reduced system stability

> Significant outages and unplanned load-shedding including a South Australia state-wide blackout in November 2016

Pricing

> Wholesale and retail price increases driven by thermal

retirement and gas price linkage to international LNG

market

> ‘it is simply not good enough that some families and businesses cannot always afford to turn on their lights, heating and equipment’ – Malcolm Turnbull, August 2017

Renewability

> Renewable generation contribution of 17%

> Policy uncertainty has slowed investment into renewable

generation projects

INDUSTRY 5

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REGULATORY STABILITY

INDUSTRY 6

Celebrating 20 years of the market delivering reliability, renewability and choice for customers

> Electricity sector fully deregulated in the early 1990s with introduction of competitive wholesale and retail markets

> Generation investment entirely market-led with no payments for reserve capacity (energy-only wholesale market)

> Full retail competition with low barriers to entry

> Independent regulatory oversight of market and network monopolies from the Electricity Authority (EA)1 and Commerce Commission2

> Government sets overall policy direction and is separated from rule-making and regulatory oversight

> Labour-led coalition government continues strong support for renewable electricity with a target of 100% by 2035

> Coalition agreement flagged broad review of retail pricing inclusive of transmission and distribution costs

Water

> No charge for non-consumptive application of water for hydro generation

> Local and central government focus on water quality and water allocation for consumptive uses

Climate

> NZ Emissions Trading Scheme (ETS) places increased cost on emitting generation sources

> Emission units trading at ~NZ$20/t (equivalent to ~$8/MWh for a CCGT post removal of transitional arrangements by 20193)

1 Regulator for the competitive sectors of the electricity industry 2 New Zealand’s primary competition regulator and regulator for the monopoly

businesses within the electricity industry (Transpower and distribution businesses) 3 Transitioning from 1 unit for 2 tonnes of CO2 to 1 unit for 1 tonne of CO2

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0

5

10

15

20

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

No

min

al c/k

Wh

Financial Year

RESIDENTIAL PRICE Energy Lines Wholesale (12mth rolling)

INDUSTRY

0%

5%

10%

15%

20%

25%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

An

nu

ali

sed

Ch

urn

(%

)

Financial Year

CHURN Total Churn

Trader Churn

7

LONG-TERM INDUSTRY TRENDS

CAGR: 2.7%

9.0

9.5

10.0

0

20

40

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

GW

TW

h

Financial Year

DEMAND Demand Max. Generation Capacity (RHS)

0.0

0.5

1.0

1.5

2.0

2.5

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

EB

ITD

AF

($b

)

Financial Year

SECTOR EARNINGS

CAGR: 3.3%

CAGR: 4.6%

CAGR: 0%

Source: TPIX, MBIE,

Electricity Authority

Source: Company reports, MBIE,

Pricing Manager (NZX)

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STRONG UNDERLYING DRIVERS FOR ELECTRICITY DEMAND

MARKET DYNAMICS 8

> System Operator (Transpower) forecasting demand

growth of ~1%

> Normalised demand* down 0.9% in FY2017 led by reduced industrial and irrigation demand

> Supportive drivers of demand growth include:

> High net migration

> GDP per capita growth

> Adverse drivers of demand growth include:

> Reductions in per household consumption due to efficiency

> Medium-term trend of de-industrialisation

> Solar remains a niche customer proposition

> No explicit solar subsidy except for variable lines charges

> Solar installed in 16,000 or 0.8% of total customer connections

* normalised for temperature

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Urban* Rural* Dairy Tiwai Industrial Irrigation

GW

h

FY2012 FY2013 FY2014

FY2015 FY2016 FY2017

-3%

-2%

-1%

0%

1%

2%

3%

4%

30,000

32,000

34,000

36,000

38,000

40,000

42,000

44,000

FY

2002

FY

2003

FY

2004

FY

2005

FY

2006

FY

2007

FY

2008

FY

2009

FY

2010

FY

2011

FY

2012

FY

2013

FY

2014

FY

2015

FY

2016

FY

2017

GW

h

Annual Growth Rate (RHS)

Consumption (LHS)

ANNUAL ELECTRICITY DEMAND

TEMPERATURE ADJUSTED SEGMENT ELECTRICITY DEMAND

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2,000

2,500

3,000

3,500

4,000

4,500

Jun

-08

Dec-0

8

Jun

-09

Dec-0

9

Jun

-10

Dec-1

0

Jun

-11

Dec-1

1

Jun

-12

Dec-1

2

Jun

-13

Dec-1

3

Jun

-14

Dec-1

4

Jun

-15

Dec-1

5

Jun

-16

Dec-1

6

Jun

-17

Alu

min

ium

(N

Z$

/t)

ALUMINIUM PRICE

3 month futures

> NZAS represents 13% of New Zealand annual electricity demand1

> Indications are that NZAS unlikely to be closed in the near term

> Aluminium futures currently trading at 6 year highs at ~NZ$3,000/t

> Mercury relatively best placed to deal with resultant wholesale market uncertainty following the closure of NZAS

> 100% renewable North Island generation close to major North Island load centres

> Wholesale price separation due to increased losses, transmission constraints and North Island reserve requirements

NEW ZEALAND ALUMINIUM SMELTER (NZAS)

MARKET DYNAMICS 9

Mercury generation assets

NZAS

HAYWARDS

BENMORE

AUCKLAND •

HVDC

Approximate breakeven price

1 Financial contract exists between NZAS and Meridian for 572MW through to

31 December 2030 with a right to terminate by NZAS with 12 months notice

6 year high

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RE-BALANCED ELECTRICITY SUPPLY

MARKET DYNAMICS 10

> Supply and demand balance has tightened after a period of over-supply, as illustrated by the 2016 – 2018 NZ hydro risk curves increasing in magnitude from the 2012 - 2015 curves

> More balanced supply and demand has increased price sensitivity to changes in storage levels

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2010 2011 2012 2013 2014 2015 2016 2017 2018

GW

h

NZ HYDRO RISK CURVE

Nominal Full

Mean - all records

Controlled Storage

1% risk

2% risk

4% risk

6% risk

8% risk

10% risk

Retirement of

thermal capacity Low demand growth, new

generation commissioned

Over-supply

Period of sustained high

hydro inflows

Source: Electricity Authority, EMI – Historical hydro risk curves

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MERCURY 11

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MERCURY 12

100% renewable generation with two low-cost complementary fuel sources in base-load geothermal and peaking hydro

North Island generation is uniquely located close to major load centres and not dependent on the inter-island transmission link (HVDC)

Waikato Hydro System is the largest group of peaking stations in the North Island

Rain-fed North Island hydro catchment with inflows correlated with winter peak demand (unlike South Island)

Building a track record of customer-led innovation and rewarding loyalty

Long-term commercial partnerships with Maori landowners and other key stakeholders

MERCURY’S COMPETITIVE ADVANTAGE

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R² = 0.0403

$0

$50

$100

$150

$200

$250

$300

-400 -200 0 200 400

OT

A W

ho

lesale

Pri

ce (

$/M

Wh

)

Delta to Storage Average (GWh)

NI MONTHLY HYDRO STORAGE VS PRICE

Jan 1999 to Jun 2016

FY2012

FY2014

FY2017

FY2018

R² = 0.4217

$0

$50

$100

$150

$200

$250

$300

-1500 -1000 -500 0 500 1000 1500

OT

A W

ho

lesale

Pri

ce (

$/M

Wh

)

Delta to Storage Average (GWh)

SI MONTHLY HYDRO STORAGE VS PRICE

Jan 1999 to Jun 2016

FY2012

FY2014

FY2017

FY2018

~30% of annual average generation

83% of total energy storage

72% of average annual inflows

Source: NZX Hydro, Pricing Manager (NZX)

13 MERCURY

MERCURY’S HYDRO ADVANTAGE

> Large South Island (SI) hydro catchments and associated hydrology drives wholesale prices

> High South Island hydro storage will result in low wholesale prices (and vice versa)

> Mercury’s North Island (NI) hydro catchment has low correlation to wholesale prices

> High Mercury hydro storage can occur with high wholesale prices (and low storage with low wholesale prices)

~15% of annual average generation

17% of total energy storage

28% of average annual inflows

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0%

5%

10%

15%

20%

25%

30%

Jul-1

5

Oct-

15

Jan

-16

Ap

r-16

Jul-1

6

Oct-

16

Jan

-17

Ap

r-17

Jul-1

7

An

nu

al

Ch

urn

NATIONAL ANNUALISED CHURN RATE

(12mth rolling)

All Retailers

Mercury

Mercury Brand

}

> In a highly competitive retail market, Mercury is focused on promoting and rewarding customer loyalty

> Mercury premise churn rate significantly below market

> Customer satisfaction1 based on Mercury’s survey increased through FY2017 from 60% to 64%

-10,000

-8,000

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

8,000

10,000

Sw

itch

es

NATIONAL SWITCHING Mercury

Mercury Brand

Prior 12mth Mercury Switches

Net Switches

0%

10%

20%

Jul-1

5

Oct-

15

Jan

-16

Ap

r-16

Jul-1

6

Oct-

16

Jan

-17

Ap

r-17

Jul-1

7Sw

itch

es

Wit

hd

raw

n2

SUCCESS IN A COMPETITIVE RETAIL MARKET

14

All switches

Trader switches3

Source: Electricity Authority, EMI – Market share trends and switching breakdown

1 Based on Mercury’s monthly survey of residential customers, 3-monthly rolling

average to 30 June for Mercury brand (excludes Bosco and GLOBUG) 2 Switches which were initiated but not completed (inclusive of saves) 3 A trader switch is where a customer changes retailer without changing house

}

MERCURY

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FOCUS ON CUSTOMER LOYALTY

15 MERCURY

The number of customers enjoying unique Mercury rewards continues to grow:

> 147,000 Airpoints™ customers (42% of Mercury brand)

> 143,000 on Fixed-Term pricing (40% of Mercury brand)

> 157,000 Free Power Days in FY2017

> $10m donated to Starship Children’s Hospital over 18 years

> GEM, our usage monitor, is one of our most popular services with ~100,000 customers engaging every week

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MERCURY 16

MERCURY’S FINANCIAL TRACK RECORD

1x

2x

3x

4x

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Financial Year

DEBT/EBITDAF DEBT/EBITDAF

0

100

200

300

400

500

600

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

$m

Financial Year

DISTRIBUTIONS Interim dividend Final dividend

Special dividend Share buyback

0

100

200

300

400

500

600

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

$m

Financial Year

CAPEX Stay-In-Business Growth

0

100

200

300

400

500

600

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

$m

Financial Year

EBITDAF

0

200

400

600

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

$m

Financial Year

OPEX Operating Expenditure One-off costsCAGR: ~5%

Flat from FY2014

Generation development Capacity for growth

9 years of ordinary dividend growth

-10000

-5000

0

5000

10000

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

GW

h

Financial Year

GENERATION VS SALES Geo Hydro

Thermal Sales

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CONTINUOUS FOCUS ON CAPITAL MANAGEMENT

17

FREE CASH FLOW (FCF) Net Cash Flow from Operating Activities less normalised stay-in-business capital expenditure

BALANCE SHEET ORDINARY DIVIDENDS INVESTMENT IN GROWTH SPECIAL DISTRIBUTIONS

Key ratio for stand alone S&P

rating of ‘BBB’ is Debt/EBITDAF

between 2.0x and 3.0x

Dividend Policy is to make

distributions with a pay-out ratio of

70-85% of FCF on average

through time

Investment in growth evaluated against all other

competing uses of capital

Debt/EBITDAF 1.8x at

30 June 20171

FY2017 fully imputed ordinary

dividends of 14.6cps declared

Minimal FY2017 new investment

capital expenditure

5.0cps special dividend declared

to distribute excess FY2017 FCF

plus the proceeds of the carbon

credit sales

> > > 1 2 3 4

MERCURY

1Adjusted for S&P treatment of Mercury’s Capital Bond

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LEVERS FOR GROWTH

18 GROWTH

Better supply and demand

> Upward pressure on end-user pricing due to supply and demand balance tightening

Investment in core business

> Wind options Turitea (216MW) & Puketoi (300MW) remain ready for multi-stage development at the right time

> Current geothermal reservoirs may support further development

> Market consolidation options available but challenging

Home and beyond

> Global strategic review confirmed focus on our core markets and opportunities within the home and e-mobility

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EMERGING TECHNOLOGY IN CONTEXT

19 EMERGING TECHNOLOGY

Solar

> Will be a niche feature of the NZ electricity market

> 1m solar panels is equivalent to ~1% of national demand

> Solar generation is not well matched to NZ’s demand profile which peaks in winter evenings

> The number of new EV registrations has recently exceeded the number of new solar installations

Batteries

> Useful when coupled to solar but at significant additional cost

> Lake Taupo storage equivalent to 40m 14kWh Tesla Powerwalls

Electric Vehicles (EVs)

> New Zealand’s largest green growth opportunity

> Transport related emissions account for 20% of NZ total Green House Gas (GHG) emissions

> Renewable electricity advantage well suited to transport electrification, along with substantial off-peak grid capacity

0

1,000

2,000

3,000

4,000

5,000

0

100

200

300

400

500

Au

g-1

3

Nov-1

3

Fe

b-1

4

Ma

y-1

4

Au

g-1

4

Nov-1

4

Fe

b-1

5

Ma

y-1

5

Au

g-1

5

Nov-1

5

Fe

b-1

6

Ma

y-1

6

Au

g-1

6

Nov-1

6

Fe

b-1

7

Ma

y-1

7

Au

g-1

7

Mo

nth

ly S

ola

r P

V

Ins

tall

ati

on

s

SOLAR PV INSTALLATIONS

Solar Installations 12mth Rolling Installations (RHS)

0

1,000

2,000

3,000

4,000

0

100

200

300

400

Au

g-1

3

Nov-1

3

Fe

b-1

4

Ma

y-1

4

Au

g-1

4

Nov-1

4

Fe

b-1

5

Ma

y-1

5

Au

g-1

5

Nov-1

5

Fe

b-1

6

Ma

y-1

6

Au

g-1

6

Nov-1

6

Fe

b-1

7

Ma

y-1

7

Au

g-1

7

Mo

nth

ly E

V

Reg

istr

ati

on

s

ELECTRIC VEHICLE REGISTRATIONS

Total EVs 12mth Rolling Registrations (RHS)

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THESIS: COUNTRY, INDUSTRY & COMPANY

20 SUMMARY

Stable regulatory framework

> Underpinned by strong industry performance on Reliability, Renewability and Pricing (the electricity ‘trifecta’)

> New Labour-led coalition government supportive of renewables

100% renewable generation

> Location and nature of Mercury’s assets is a competitive advantage

> Low variable cost generation delivering strong and stable cash flows

Focus on loyalty

> Focus on rewarding the loyalty of our existing customers is resulting in decreased customer churn and increased satisfaction

Shareholder value

> Positioning to deliver on growth opportunities when commercially viable

> High dividend yield with 9 years of ordinary dividend growth

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21 APPENDIX

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> Stable political environment

> Mixed Member Proportional (MMP) system

> Two main parties – National (centre-right) and Labour (centre-left)

> Labour-led coalition government since October 2017 (3-year term)

> Robust GDP growth achieved over recent years (currently 2.7%2), with below-trend unemployment (currently 4.8%4)

> Current supportive drivers of GDP growth include:

> Historic high net migration flows (72,100 net annual inflows5 or 1.5%)

> Strong tourism growth

> Robust construction sector activity

> Low interest rate settings

> Risks factors which could dampen GDP growth:

> Global geopolitical and growth concerns

> Migration cycle creating economic stresses

> House price inflation creates stability risks

NEW ZEALAND ECONOMIC OVERVIEW

APPENDIX

22

Key Facts

Credit Rating: AA/stable

Population: 4.7 million1

GDP: NZ$270 billion (or US$190 billion)2

Official Cash Rate (OCR): 1.75%

10yr Interest Rate: 3.3%3

1 At 31 December 2016 2 Year to 30 June 2017 3 At 1 November 2017 4 At 30 June 2017 5 Year to 31 August 2017

72%

20%

6%

1% 1%

Services Sector

Manufacturing, Energy &Construction

Agriculture, Forestry & Fishing

Mining

Other

NEW ZEALAND GDP BY SECTOR2

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GENERATORS

> Wholesale prices

determined by competition

> Generate electricity and

sell to wholesale market

> 5 major generators

producing about 95% of

NZ’s electricity

> 80% renewable electricity

(unsubsidised)

> Solar installed in 16,000 or

0.8% of total customer

connections

DISTRIBUTION AND

NETWORK OWNERS

> Regulated monopolies

> 29 distribution companies

> 150,000km of overhead and

underground networks

THE NATIONAL GRID

RETAILERS AND

CONSUMERS

> Retail prices determined

by competition

(unregulated)

> 33 retailer brands buy from

wholesale market and on-

sell to nearly 2 million

consumers

> Electricity Authority

responsible for promoting

competition, efficiency and

reliability of supply for

long-term benefit of

consumers

> NZAS (aluminium smelter)

13% of national demand

> 2 major metering

companies, including

Mercury trading as Metrix,

with national smart meter

penetration of 77%

23

NEW ZEALAND ELECTRICITY MARKET STRUCTURE SINCE 1998

APPENDIX

> Transpower (Government owned) is

regulated owner and operator

> Transports high voltage electricity to

networks and large industrial users

> 1,200MW HVDC link between South

and North Islands

WE OPERATE

HERE

WE OPERATE

HERE

1 4 1 4

2 3

2 3

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20

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Kore

aIs

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lH

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Cze

ch R

ep

ub

licE

sto

nia

Ne

the

rla

nds

Pola

nd

Austr

alia

Mexic

oU

nited

Sta

tes

Ja

pa

nB

elg

ium

Fra

nce

Irela

nd

Un

ited

Kin

gdo

mS

lovak R

epu

blic

Ge

rman

yG

ree

ce

Slo

venia

Turk

ey

Ita

lyS

pa

inC

hile

Fin

lan

dP

ort

ug

al

La

tvia

Sw

eden

Lu

xe

mb

ou

rgD

enm

ark

Sw

itze

rla

nd

Ca

na

da

Austr

iaN

ew

Zeala

nd

No

rwa

yIc

ela

nd

%

2016 OECD RENEWABLE ELECTRICITY

24

UNSUBSIDISED ELECTRICITY MARKET AND >80% RENEWABLE

APPENDIX

0

5

10

15

20

25

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50

1990

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NEW ZEALAND’S GENERATION MIX

Hydro Geothermal Wind Coal Gas Waste Heat/Biogas, Oil and Wood Solar

1 Link to publication pg. 28

Source: Ministry of Business, Innovation & Employment, IEA

TW

h

> “With its unique resource base, New Zealand is a success story for the development of renewable energy, notably hydro and geothermal, without government subsidies” – International Energy Agency (IEA)1

> Geothermal or wind are the lowest cost development options – 12TWh of renewable projects already consented

Hydro, geothermal and wind

contribute > 80% of generation

Coal only around 2% of annual generation

Norway: Connected to European transmission grid

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2015 OECD RESIDENTIAL ELECTRICITY PRICES1

25

HIGHLY COMPETITIVE RETAIL MARKET DELIVERING CUSTOMER CHOICE

APPENDIX

1 Residential pricing in US dollars per unit using Purchasing Power Parity (PPP)

Source: Ministry of Business, Innovation & Employment, IEA, Accenture

> One of only 4 highly competitive retail markets – Accenture

> Energy portion of end-user pricing determined by competition

Lower tercile residential electricity price

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> 100% renewable generation with two complementary low-cost fuel sources

> High up-front build cost, low operating cost

> Central North Island close to major load centres and not dependent on inter-island connection (HVDC)

> Generation-Weighted Average Price (GWAP) favourable to peers reflecting the flexibility and location of assets

> Flexible hydro generation (1,063MW / 4,000GWh)

> Largest group of peaking stations in North Island

> Baseload geothermal generation (337MW1 / 2,800GWh)

> Only renewable not dependent on weather

> Average net long position reflecting integrated portfolio

> Movement in net position year-on-year due to hydrology, plant availability and value of sales

BUSINESS OVERVIEW

COMPLEMENTARY GENERATION SOURCES

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Long Short

GW

h

FY2017 NET POSITION BREAKDOWN

CFD Sell

FPVV Losses

Commercial FPVV

Residential FPVV

CFD Buy

Additional Hydro

Average Hydro

Geothermal (Consolidated)

1 Equity share 2 Contract-For-Difference 3 Fixed-Price Variable Volume

3

3

2

2

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60

70

80

90

100

110

120

0

10

20

30

40

50

60

70

80

Jan

Fe

b

Ma

r

Ap

r

May

Jun

Jul

Au

g

Se

p

Oct

Nov

Dec

Lo

ad

(G

Wh

)

Infl

ow

s (

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h)

AVERAGE SOUTH ISLAND INFLOWS VS. DEMAND

Average Inflows in SI (LHS) Average Market Demand (RHS)

60

70

80

90

100

110

120

0

5

10

15

20

25

30

Jan

Fe

b

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r

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y

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p

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AVERAGE NORTH ISLAND INFLOWS VS. DEMAND

Average Inflows in NI (LHS) Average Market Demand (RHS)

MERCURY’S PERMANENT GENERATION ADVANTAGE

> Positive correlation of North Island hydro inflows and sales

> Inflows into Mercury’s North Island hydro catchment peak in winter to match peak winter demand

> Complemented by non-weather-dependent baseload geothermal

APPENDIX

Inflows from snow melt inversely correlated to demand

Inflows from rain correlated to demand

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$0

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$60

$2.00

$2.25

$2.50

$2.75

$3.00

$3.25

$3.50

$3.75

Jul-1

5

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Ap

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Jul-1

6

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MERCURY SHARE PRICE AND TURNOVER Turnover

MCY.NZ

MCY.NZ / MCY.AX

28 APPENDIX

Key Facts

Shares on Issue: 1,377.6m

Market Capitalisation: $4.53b1

Enterprise Value: $5.8b1

NZX ranking (by Market Capitalisation): 11th

Avg. Daily NZX Volume (prior 12mths): $0.8m

Avg. Daily NZX Turnover (prior 12mths): $2.4m

Cash Dividend Yield (prior 12mths): 6.0%1

Gross Dividend Yield (prior 12mths)2: 8.3%1

EV/EBITDAF (FY2017): 11.1x

PE ratio (FY2017): 24.4x1

1 At 1 November 2017

2 Fully imputed for New Zealand residents to 28%

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51%

23%

19%

5% 2%

Government

New Zealand Retail

International Institutions

New Zealand Institutions

Treasury Stock

OWNERSHIP

29

1 At October 2017

> Listed on NZX and ASX in May 2013

> 85,000 shareholders (widest-held New Zealand register)

> Government majority ownership

> Public Finance Act and Company’s constitution require at least 51% Crown ownership

> No other person may hold more than 10% of shares

> Eight independent Directors

> No direct government representation on Board

MERCURY SHARE REGISTER1

APPENDIX

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> Reduces or eliminates the economic impact of Non-Resident Withholding Taxes

> For illustrative purposes see below worked example for a corporate investor. This should not be interpreted as tax advice

SUPPLEMENTARY DIVIDEND TO NON-RESIDENTS

APPENDIX

NZ investor Foreign investor

No Supplementary

dividend

Supplementary

dividend

Gross dividend 100.00 100.00 100.00

Imputation credits (28.00) (28.00) (28.00)

Supplementary dividend - - 12.71

72.00 72.00 84.71

Less: Corporation tax (@28%) (28.00) - -

Add: Imputation credits 28.00 - -

Less: Non-resident withholding tax (@15% of dividend where DTA1) - (10.80) (12.71)

Cash dividend 72.00 61.20 72.00

1 Includes United Kingdom, Ireland, United States and Canada

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REFERENCE MATERIAL

MERCURY REFERENCES

Mercury Investor Centre www.mercury.co.nz/Investor-Centre

Governance Presentation – December 2016 https://www.mercury.co.nz/Investors/Results-Reports/Presentations.aspx

FY2017 Interim Results Presentation – February 2017

FY2017 Results Presentation – August 2017

INDUSTRY REFERENCES

Electricity Authority website www.ea.govt.nz

System Operator website www.systemoperator.co.nz

Wholesale electricity spot prices www.em6live.co.nz

Electricity futures prices www.asx.com.au/products/energy-derivatives/new-zealand-electricity.htm

INDUSTRY PUBLICATIONS

Energy Policies of IEA Countries –

New Zealand 2017 Review

https://www.iea.org/publications/freepublications/publication/energy-policies-of-iea-countries---new-zealand-2017-

review.html

Ministry of Business, Innovation and Employment –

Energy in New Zealand www.mbie.govt.nz/info-services/sectors-industries/energy/energy-data-modelling/publications/energy-in-new-zealand

Electricity Authority - Electricity in New Zealand www.ea.govt.nz/about-us/media-and-publications/electricity-nz

APPENDIX

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FOR FURTHER INFORMATION >> TIM THOMPSON | HEAD OF TREASURY & INVESTOR RELATIONS T. +64 275 173 470 E. INVESTOR@MERCURY.CO.NZ

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