Contact Energy Aktie

[Foreign Language]. Before we begin, I'd like to open our Annual Shareholder Meeting with a short [Foreign Language]. The Mahi acknowledges everyone gathered here today and the different perspectives we bring while inviting us to come together with a shared sense of purpose. [Foreign Language].

I'd now like to offer karakia to open our meeting. This karakia is about grounding us as we begin our meeting today, looking beyond ourselves and seeking wisdom, well-being and peace for everyone gathered here today. [Foreign Language].

We will now close with our Contact waiata, and as the team come forward. This waiata speaks of what comes from above and below, bringing life to us all a fit in connection to the natural sources of energy that sustain us.

[Presentation]

[Foreign Language]

Good morning to you all. My name is Rob McDonald, and I'm the Chair of the Contact Board. On behalf of the Board and all the Contact team, I'd like you to welcome. I'd like to welcome you to the 2026 Annual Shareholders Meeting. This meeting is being webcast live for shareholders who have not been able to attend in person. And I also extend a warm welcome to those who are watching online.

For those guests who are here in person, in the unlikely event of a fire alarm, please make your way out of the auditorium, the same way you came in, turn right and exit the building via the glass doors to on to Aitken Street, there is an exit beside the lectern that leads to Aitken Street once outside, turn right and head towards Molesworth Street and then follow the footpath 100 meters to the gathering point at the courtyard or in the front of Rugby House.

In the event of an earthquake, immediately assume the brace position by leaning forward in your seat and placing your hands on the back of your head. Once the shaking has stopped, wait for instructions from the library staff as evacuation may not be necessary. Toilets are located on either end of the foyer as you exit the auditorium.

I'd like to introduce the others with me on the stage. Firstly, to my right is our Chief Executive, Mike Fuge; to my -- and my fellow Board Directors, David Smol; Rukumoana Schaafhausen, Alison Barrass, Jon Macdonald, David Gibson, Sandra Dodds and Deion Campbell. Other members of the Contact senior leadership team are also here today as well as representatives from our auditors for 2026, EY.

As you have noted, today's meeting started with a greeting from Rukumoana, followed by Contact's Waiata, which is customarily sung to embellish the greeting. For Contact, it is important to acknowledge our relationship with tangata whenua and our shared commitment to the sustainable use of New Zealand's incredible natural resources.

Today's meeting will start with addresses from me as Chair and from the Chief Executive, Mike Fuge. Then we'll move on to the resolutions that are outlined in the notice of meeting. We have 4 resolutions to put to the meeting today, and these resolutions will be decided by taking a poll. There will be an opportunity for shareholders to ask questions relating to these resolutions and to raise any additional matters they may wish to discuss. EY audit partners are present today and should shareholders wish to have questions to put -- sorry, today's meeting, should shareholders have questions to put to them. Only shareholders and proxy holders can ask questions.

Once the resolutions are introduced, we'll invite questions. We have some microphones available. If you wish to speak, please raise your hand and wait for a microphone to be brought to you, so we can hear your question.

As we have a number of shareholders in the room and also online, I would ask you to limit your questions to 2. All shareholders participating online can ask questions during this meeting. I encourage you to send through your questions as soon as you can. This will allow us to answer these questions at the appropriate time of the meeting. Questions may be moderated or if we receive multiple questions on the same topic, they may be amalgamated. If we can't answer a question in this meeting, we'll answer it in due course via e-mail. I'll provide you with further instructions relating to voting as we progress through the meeting. For those online, if you encounter any issues, please phone the helpline 0800-200-220.

Now with the housekeeping done, let's get underway. [Foreign Language].

On behalf of the Contact Energy Board of Directors, I'd like to begin by thanking our people, our customers and you, our shareholders for what has been a very strong year. It has been one defined by bold decisions, accelerated investment and continued growth. When I joined the Board, Contact was already an important part of the New Zealand energy sector. Today, it is a fundamentally different company. We have transformed our generation portfolio, reshaped our strategy and established ourselves as a leader in New Zealand's renewable energy future.

Most importantly, we have demonstrated an ability to turn ambition into delivery. 5 years ago, we launched Contact26, our strategy to be a leader in the decarbonization of New Zealand. Major investments in geothermal, solar and battery storage have strengthened Contact's portfolio and positioned us to meet New Zealand's growing demand for clean energy. The successful integration of Manawa Energy has strengthened contact position. It has expanded the scale and diversity of our renewable portfolio, and I'm pleased to report that the benefits of this acquisition have exceeded our expectations.

Together, the combined portfolio of Contact and Manawa provides greater flexibility resilience and opportunities for future growth. Contact31+, our new strategy to lead New Zealand's renewable energy future was unveiled last November. It will create more long-term value for customers, our communities and our shareholders. Mike will talk more about Contact31+ in his speech.

Standing here today, it is a time for personal reflection after more than a decade as a director and 8 years as Chair, the time has come for me to step down. To understand Contact today, you need to understand the past. Contact was born 30 years ago with the rump of the assets of the old Electricity Corporation of New Zealand. It was supposed to fail. It was a collection of leftovers. Some said the worst of the old system. There was summer-weighted hydro generation on the Clutha River, and Wairakei geothermal power station, which had been built in the post-war economy.

Slowly over the first 2 decades, Contact acquired and built more geothermal and thermal generation assets as well as added a retail business. I'm pleased to be part of this journey over the last decade where Contact has built a world-class geothermal operation, new solar and battery farms and acquired a diverse set of hydro dams across New Zealand to complement our portfolio.

From assets once described as second best, Contact has built one of the best energy portfolios in the transition and the opportunity ahead. It did not happen by accident. It happened because people over the decades across the company made bold decisions, stuck with hard projects and had the courage to keep moving forward.

Too often, I hear claims from detractors that the industry is not investing enough. The trouble with that is if people or profile say such things, others believe it to be true. It is not. Here's the reality. The industry has never been spending or building more than now. We are investing more than ever in the history of New Zealand. It puts Think Big in the shade. On a per capita basis, it is more than the United States, China, U.K. and Australia. As a sector, 4 terawatt hours of new renewable generation projects have come online in the past 5 years. A further 3 terawatt hours is either committed or under construction and expected to be online by 2027.

It is important that this path remains clear and allows the sector to build out New Zealand's renewable energy future. It is this way we move towards energy independence as a nation. The solution to stabilizing the country's energy prices and ensuring New Zealand's electricity is reliable and renewable is more energy capacity, and that comes from more investment.

In this context, I offer another insight. Good policy eats ideology for breakfast. The oil and gas ban in 2018, in my view, is characterized as an ideology that triggered a loss of investment confidence and industry capability, leading to an acceleration of the decline of the existing fields. It led to a number of unintended consequences, higher gas and electricity prices gas shortages, industry closures, increased emissions from coal. Ironically, the electricity industry, particularly the main players that have that have launched into solving the consequences. There's been much discussion and political rhetoric about structural separation of retail businesses from gentailers.

Let me give you some personal observations. The businesses follow the electricity -- sorry, the businesses following the Electricity Authority latest rules are indeed structurally separated. To separate further, we'll create additional costs that would ultimately be borne by consumers by everyday people of New Zealand. Again, ideology over a good policy has the potential to damage the investment climate for the industry as a whole. It is time for non-gen retailers to step up and use the hedging products now available.

On the back of record levels of generation investment, the wholesale market has gone through a significant transition this year. Wholesale prices have reduced by around 30%, bringing the market back into balance. The market has been allowed to function as it was designed and the government has resisted unfounded calls to fundamentally alter the investment conditions. Analysis done for the government by Sense Partners shows that electricity prices at this level will bring a $10 billion boost to the country's GDP by 2030. This outcome matters not only for the sector, but for New Zealand's wider economic resilience, competitiveness and long-term prosperity.

In respect to retail prices, the wholesale price component of the retail bills are now in line with the long-term market pricing. Unfortunately, the material increases in line and transmission prices has and will continue to contribute to price increases. I encourage the government to renew -- sorry, to review the economic regulation of natural monopolies across the economy.

There is another opportunity we should not shrink from data centers and compute security. New Zealand has a chance to build sovereign digital capability, attract new investment, create new skilled jobs and use new renewable energy to support it. If we choose to be knockers and blockers, New Zealand risks becoming a backwater in an AI-driven world. If we choose to be builders, we can create a new export industry powered by renewable energy, we should say it plainly. Data centers do not steal power from New Zealand. Properly structured, they will bring new energy demand that underwrites new energy supply. They can turn renewable energy into a modern export. In the same way this country exports aluminum, steel and dairy to the world.

Today, I leave Contact excited as well as grateful. Sad, yes, because these are extraordinary times. But confident because Contact is well placed to create value for shareholders while helping lead New Zealand to the next phase of the energy transition. I also want to briefly reflect on the role of the Board. Boards can be cautious by nature. Sometimes that caution is necessary. But a Board should not be a handbrake on ambition. Its role is to set the guardrails, test the strategy, appoint the right Chief Executive and then give management the confidence to get on with it. The most important decision a Board makes is appointing the Chief Executive. No strategy can compensate for the wrong leader.

Mike Fuge joined at a time when Contact needed pace, conviction and a more forward-leaning posture. Under his leadership and with the strength of the leadership team around him, Contact has matured into an industry-leading company with a clear strategy and a real delivery capability. When I joined the Contact board, the company was still finding a strategic voice. Today, the conversations are sharper, the choices are clearer and the ambition is matched by capability.

Contact is no longer drifting towards a distant third place, it is a strong #2 with momentum. But it's not really about rankings. It is about the difference between leaning into growth or standing still. Contact has chosen growth. As I reflect on my time as Chair, I'm proud that Contact came out of its shell. We leaned forward. We strengthened the brand and we became more confident in retail. We showed character through initiatives such as our partnership with Women's Refuge and The Good Initiative. And we demonstrated that a great company is measured not only by what it earns but by what it stands for.

To the board, thank you for the debates, the discussions and yes, the disagreements. Good decisions are rarely made by everyone nodding politely. They are made when capable people test the issues honestly and then unite behind the decision. Most of all, I leave with confidence, confidence in the strength of the business, confidence in the people who lead it and confidence in New Zealand's renewable energy future. It has been a privilege to serve as your Chair. I want to acknowledge my fellow directors, past and present, and warmly welcome Jon Macdonald, who will lead the Board to its next chapter. I know the Board is in capable hands.

To our shareholders, thank you for your trust, your support and your belief in this company. [Foreign Language]. I'd now like to invite the Contact Chief Executive, Mike Fuge, to address the meeting. Thank you, Mike.

[Foreign Language]. Thank you very much, Rob, for those kind words. I'm absolutely delighted to be here with you all today and to share not just my reflections of what has been a strong year for Contact of a busy one, but also what lies ahead.

5 years ago, we committed to being a leader in the decarbonization of New Zealand with Contact26, a bold strategy that began during the pandemic when our world was locked down and our home became our everything, our world. Since then, we have brought 1.9 terawatt hours of baseload renewable energy to the market, completing 2 new geothermal power stations in Taupo, together powering the equivalent of over 260,000 Kiwi homes. Our first grid-scale battery is online, and our first solar farm Kowhai Park in Christchurch is now sending electrons to the grid.

We have successfully completed the acquisition of Manawa Energy, and we have proactively decarbonized our own portfolio. We have seen significant growth in the numbers of everyday Kiwis who choose to connect their homes to us. As of the 30th of June, Contact had 690,000 customer connections across electricity, gas, broadband and mobile, and this number is now well over 700,000 as we speak today.

Last month, we were named Energy Retailer of the Year in the Annual Energy Excellence Awards, chosen independently by the judges. This recognition reflects the strength of our customer offering.

In the electricity sector, the momentum behind the renewable energy investment is now flowing through to lower wholesale future prices. That matters.

It moves New Zealand closer to energy independence, and it gives our businesses, industries and the wider economy, a stronger competitive edge. As Rob mentioned, the impact of this is predicted to have a multibillion-dollar boost to New Zealand's GDP by 2030.

So let's look at our financial results. Today, we are fundamentally bigger, more resilient company. Our strong FY '26 performance and generation growth reflect both the completion of Manawa integration and the impact of our ongoing renewable investments.

In FY '26, we have reported a net profit of $423 million and operating earnings EBITDAF of $1011 million. The result was underpinned by a significant lift in our renewable generation. The result also reflects a rising return on invested capital as we invest in high-quality projects with a continued intense focus on capital discipline and good solid returns. What's more, we are incredibly pleased to share that 98% of the energy that Contact generated in the last year was from sustainable renewable sources. Just 5 years ago, this was 81%.

As a result of this year's financial performance, we will deliver investors of $0.40 per share annual dividend, up 3% on the previous year. With our Contact26 strategy delivered, we have launched Contact31+, our new strategic road map for the next 5 years and beyond. Our ambition remains to lead New Zealand's renewable energy future, creating long-term value for our customers, communities and shareholders. We will do this by extending our advantage as New Zealand's geothermal leader, leading into new flexibility, building new demand with wind and solar, in particular, and leading the energy transition at home. This will be enabled by empowering our people, our leaders and growing relationships with our stakeholders, leveraging technology and continuous focus on increasing productivity and operational excellence.

I have huge aspirations for New Zealand and the part that energy the renewable energy economy can play in powering, manufacturing and growing the country's export earnings. Demand for renewable energy is occurring at a scale that supports ongoing investment in generation, storage and infrastructure. Over the last 5 years, Contact has committed more than $2.4 billion to renewable energy projects, and it's already brought 1.9 terawatt hours of new energy to market. And there's more to come.

With an 11 terawatt hour development pipeline across wind, solar and geothermal as well as 700 megawatts of grid-scale battery options. And looking at the other side, manufacturing, we have some significant agreements in place. We have signed not 1 but 2 new agreements with the industrial giant New Zealand Steel extending our long-term partnership and a shared commitment to the country's renewable energy future.

The latest 50-megawatt demand flexibility agreement will reduce demand in peak winter period, so winter can be directed to where it is needed most. We've leased additional land at the company's Glenbrook site next to our new 100-megawatt grid scale battery and have started construction on an additional 200-megawatt battery right next door. In May, we signed a letter of intent with Rio Tinto to support new generation and grow demand. This supports the restart of the idle fourth potline at the New Zealand aluminum smelter at Tiwai.

Under this proposal, the smelter could underpin development of our now consented Southland wind farm as well as increased New Zealand's export earnings. This month, we started our 10-year supply agreement -- electric supply agreement with Fonterra for their Whareroa site in Taranaki. Contact will supply Fonterra with around 415 gigawatt hours per year of renewable electricity.

I mentioned earlier that Kowhai Park in Christchurch is now sending electrons to the grid. The dairy company, Synlait, will buy 25% of the energy generated from a new Kowhai Park solar farm.

Our investment continues at pace. In Taupo in April, we began a $30 million drilling program to support the -- that proposed Tauhara 2 geothermal plant. Te Mihi 2 is now a year into construction. The $712 million project will replace the iconic Wairakei geothermal power station in stages and generate enough renewable electricity to power the equivalent of 120,000 Kiwi homes.

Kowhai Park developed with Lightsource bp opens officially next month. Our second solar farm with Lightsource bp is now underway at Glorit, north of Auckland on the Kaipara Coast. And we were delighted to learn late last week that the Environment Court have approved the resource consent for the Stratford Solar Battery Farm, our third joint venture with Lightsource bp.

Meanwhile, in May, our first wind project, the Southland Wind Farm was consented. It will strengthen New Zealand's energy security, support households and businesses and create renewable generation and regional economic growth. Our first grid-scale battery, Glenbrook Ohurua 1 is more than new infrastructure. This 100-megawatt storage system represents a shift in how we power New Zealand's future. As we move towards a highly renewable system, flexibility from assets like these batteries will support energy security and resilience. It also reduces exposure to global energy shocks, building a more independent energy system for Aotearoa.

Now to our retail business. We have worked hard to ensure the renewable energy transition is as affordable as possible for Kiwi households. New Zealanders continue to make competitive choices with our Good Plans. With more than 1/3 of our customers opting for free or discounted power in return for off-peak use. Since we launched our time-of-use plans to the market in August 2021, customers have benefited from more than 403 million hours of free power. Doing the right thing by the most vulnerable is incredibly important to us as well.

Last winter, we quietly launched The Good Initiative, a $5 million fund to support communities and customers in need. In this first year, this grassroots program has partnered with 60 community agencies covering the cost of energy and provided more than 23,000 instances of support to households who are finding it tough. This year, we are increasing The Good Initiative by funding by 50%. Contact Energy is powered by 1,400 team members who come to work every day passionate about the role they have in leading New Zealand renewable energy future.

Today, we have 3 major renewable projects under construction. While next year, that number could well double. It's our people behind them, our people helping deliver the electricity New Zealand needs to power our renewable energy economy. And as I turn to the next 5 years, our focus is on deploying and retaining the very best of the best. Some companies have indeed got to where Contact is today with growth in proven delivery, but not many have pushed beyond that without tripping over their shoelaces.

We need to attract and retain the very best of the best in terms of ability and capability in New Zealand, our home. Last Thursday, we were delighted to be named as 1 of the top 100 workplaces in the world. To be recognized as 1 of the 2026 Global Top 100 Inspiring Places To Work is testament to the leadership of our people experience team, led by Jan Bibby.

We continue to work -- we're continuing our work with CDC to explore a potential 250-megawatt data center at Stratford and Taranaki. We believe Stratford shapes as an ideal location to explore an energy and digital hub powered by renewable energy from where the local Taranaki economy can thrive and the wider energy of New Zealand can benefit. Data centers unlock more investment in solar, wind and geothermal power stations, along with strengthening and spreading the cost of critical infrastructure that transports the energy they need in terms of lines and transmission.

If we can get this going and attract data centers to New Zealand, we have, as an industry, identified more than enough conventional renewable energy to rebuild the grid over again, one that is equivalent to 2x the Maui gas field when it was first discovered and will be with us not for 60 years, but forever, creating even more economic growth for our tamariki and mokopuna.

With this potential project, we expect around 600 jobs at peak construction, like we saw at Tauhara and Taupo. When operational, it's anticipated more than 100 high paid skilled workers will be employed. That's 4x more than were employed at TCC. New Zealand's renewable energy system has so much potential. What we see is further opportunity, the opportunity to tell our story globally, to encourage more investment, to build a stronger economy, to show just what is possible for Aotearoa, to lift our aspirations as a nation and play our part in economic growth and prosperity for all.

Finally, I would like to take a few moments to pay tribute to Rob, our chair, who at the end of today's meeting steps down. Thank you, Rob, for your governance, wisdom and leadership over the last decade. Often in New Zealand, what counts is not who is at the table and who's talking, but who's not at the table and who is not talking. This is Rob. I have really appreciated your wise counsel, strong challenge, an absolute quite unflappable demeanor in tough times and unwavering support through challenging times as the company has led the transition away from fossil fuels. He has been the archetypal Chairman, quiet influence that gentle word of encouragement, that quiet question, which cuts through a clear strategic issue. He has been the master of understatement when some of us would say aggressive growth, he would say quietly lean into opportunities. When some of us would say outstanding financial results,

Rob would always say, solid, well done.

Your advocacy on behalf of the wider sector, your deep humanity and your absolutely decency in respect of others and our critical stakeholders and the underprivileged of this nation has not gone unnoticed. And to our people, thank you for your extraordinary work. I am proud of you and all that you have delivered in this last year. [Foreign Language]. Thank you.

[Presentation]

Okay. We will move on to the formal resolutions for the meeting. These are outlined in the notice of meeting sent to shareholders in August. Voting on the resolutions will be by poll. Each resolution will be put to the meeting with the proxy voting results displayed on the screens. For those of you here with us in Wellington, you'll be able to cast your vote by filling out the voting card you received at the registration desk on your way in. This card will be collected at the end of the formal part of the meeting. If you're a shareholder or a proxy holder and did not register on arrival or wish to vote, please make your way to the registration desk and our staff from the share registry will assist you. If you're both a shareholder and a proxy holder or a shareholder company representative or have more than 1 holding, you would have received a separate voting card for each holding.

When you vote on the resolutions, please complete all the voting cards given to you at registration. For those attending the meeting online, to vote, you'll need to click Get Voting Card within the online meeting platform. You'll be asked to enter your shareholder or proxy number to validate. Once you have made your selection, please click submit vote on the bottom of the card to lodge your vote.

Please refer to the virtual meeting online portal guide or use the help line specified if you require assistance. Voting will remain open for 5 minutes after the conclusion of the meeting. Each resolution set out in the notice of meeting is an ordinary resolution and requires approval by a simple majority of votes cast by shareholders entitled to vote and voting on the resolution.

For the information of shareholders, the proxy votes received for the 4 resolutions will be displayed on the screen as we discuss and then vote on each resolution. We have 2 directors who are retiring by rotation and are standing for reelection today. David Smol and Rukumoana Schaafhausen. We also have a new director, Alison Barrass, standing for election by shareholders for the first time. The Board unanimously recommends the shareholders vote in favor of the election of each of these directors.

Our first resolution today relates to the reelection of David Smol. It is my pleasure to move that David be reelected as Director of Contact. I'd now like to invite David to speak in support of his election.

[Foreign Language]. Thank you, Rob. As Rob said, my name is David Smol, and it's a privilege to have this opportunity to stand for reelection as the Director of Contact Energy, a Board, which I was first elected in 2018. I've had a long association with Contact. My first involvement was as part of the team that established the company back in 1996, working with the rump assets of the Electricity Corporation. As Rob described it earlier, it wasn't exactly how we thought about it at the time, but there is definitely an element of truth in what he said.

If reappointed to the Board, I will be deeply committed to implementing Contact31, our strategy to lead New Zealand's renewable energy future, decarbonizing the energy system while maintaining security of supply and affordability for our customers, enabling economic growth through electrification and creating value for our shareholders.

Currently, I'm a member of the Audit and Risk Committee and Chair of the Health, Safety and Environment Committee. The health and safety of all our people and the people with whom we interact is a paramount focus for the Board and the executive. We are continually looking for ways to strengthen our health and safety system. And being a responsible steward of the environmental resources we used to generate electricity is also a priority for me.

I believe I have a lot to contribute to Contact as a director. I'm an economist by training. I've accumulated extensive senior executive and governance experience. The energy sector has been a big part of my career since the 1980s, and I find it as fascinating now as I did back then. We've got a demonstrated track record in the development and execution of strategy, leading large and complex organizations, understanding the economics of electricity systems, risk management, evaluation and delivery of major projects and operating in regulated industries.

I've been careful to organize my commitments to ensure that I have capacity to do full justice to my role with Contact, and I will continue to do so if I were to serve another term as a director. It will be an honor to be reelected. Thank you very much for your consideration. [Foreign Language].

Thank you. Are there any questions in respect to David's election? Are there any questions in respect to David's election?

There are no questions online from shareholders.

Please now complete your voting card beside Resolution 1. Please select any of the for, against or abstain in the appropriate place of the voting card, and that will apply to all other resolutions as well.

Okay. Let's move to the second resolution. Our second resolution today relates to the reelection of Rukumoana Schaafhausen. It is my pleasure to move that Rukumoana be reelected as Director of Contact. I'd now like to invite Rukumoana to speak in support of her election.

Thanks, Rob, [Foreign Language]. Thank you for the opportunity to address you all today. I am seeking reelection as a Director of Contact Energy, and I remain strongly committed to Contact's ambition to build a better Aotearoa by leading New Zealand's renewable energy future. I bring more than 30 years of governance and leadership experience across iwi, public and private sector organizations. That breadth has talked to me the importance of being able to see issues from different perspectives, commercial, community, environmental and intergenerational and importantly, to bring those perspectives together around the Board table. I believe that is particularly important for Contact.

Energy sits at the heart of New Zealand's economic and social well-being. The decisions we make today about generation, infrastructure and investment will shape our country and our communities for generations. We have some significant challenges ahead of us, ensuring security of supply, maintaining affordability, continuing to invest in renewable generation and supporting the electrification of growth of the New Zealand economy. But I also see enormous opportunity.

As you've heard in the results today, Contact generated 98% of its electricity from renewable sources last year. The question now is how we build on that position, investing wisely, supporting greater electrification and ensuring the benefits of that transition out more broadly across Aotearoa. I bring to the Board a strong commercial and governance lens, but also a deep understanding of communities, tangata whenua and the importance of enduring relationships. I am comfortable working across different perspectives, asking difficult questions when needed and looking beyond the immediate decision to its longer-term consequences.

For me, good governance is ultimately about stewardship. We need to deliver sustainable value for our shareholders while leaving the organization, our communities and our environment stronger for those who come after us. I am proud to have served on the Contact Board and with your support, would be privileged to continue contributing to Contact's long-term success and to the energy future of Aotearoa.

[Foreign Language].

Are there any questions in respect of Rukumoana's election?

There are no questions online in relation to this resolution.

Please now cast your vote for Resolution 2.

Our third resolution today relates to the election of our newest Contact Director, Alison Barrass. It is my pleasure to move that Alison be elected as a Director of Contact. Alison was appointed to the board on September 1. This year, under the NZX listing rules, she's required to stand for election by shareholders at today's meeting. I'd now like to invite Alison to speak in support of her election.

[Foreign Language] Good morning, everyone. It's a pleasure and a privilege to be standing for election to the Contact Energy board. I thought it would be helpful to start by telling you a little bit about myself and why I feel I'm in a strong position to bring value to Contact Energy. I've been working full time in governance for 12 years now in a variety of complex industries such as telco, infrastructure, financial services in the primary sector.

I have a background in fast-moving consumer goods with 30 years in executive leadership roles, including the last 15 as CEO, with a keen focus on health and safety. As a director, I have an interest in emerging technology and sustainability and a passion for New Zealand businesses that have the opportunity to contribute to the growth and prosperity of our country. I'm also interested in how companies can build lasting consumer connections in an increasingly automated world and in emerging generation technologies and their potential to further decarbonize New Zealand's energy system.

I greatly admire the work of Contact's board and management in driving growth for this business. The growth brings challenges. The sector will need to continue to manage its risks and opportunities well to keep delivering for stakeholders and communities across New Zealand. The world is without doubt an increasingly challenging place. There is rarely a day in business when we are not considering the impact of geopolitics, rapid technology transformation and changing climatic conditions. Some changes work in our favor and some don't.

Either way, our job is to build in resilience. We need to be constantly looking out and ahead. We need to be eyeing the horizon, harnessing its possibilities and navigating the risks to be asking the difficult questions and persevering until we get answers. It's not luck that creates great businesses but hard work and commitment. And that's the promise I make as I stand for election to this board that I'll work hard for this company and our shareholders. I'll be a voice around the Board table that looks ahead, challenges the business and pushes our people to deliver the best possible outcomes. I'm humbled to be standing for election here today. [Foreign Language].

Are there any questions in respect to Alison's election?

And there are no questions online in relation to this resolution.

Please now cast your vote for Resolution 3.

The last resolution to be considered relates to our auditor. I move that the directors are authorized to fix the fees and expenses of the auditor. EY is Contact's auditor and this resolution proposes that the Board is authorized to fix the remuneration of the auditor, which is the conventional practice for New Zealand-listed companies. It reflects the fact that the level of the auditor's workload and, therefore, fee may change from time to time to take into account the changes in company size or complexity or changes in law. I now invite discussion on the resolution.

We have 1 online question. Audit fees have increased substantially this year. 2023, $719,000; 2024, $764,000; 2025, $947,000 and 2026, $1,274,000. We appreciate the purchase and the integration of Manawa Energy, but can the Board give reassurance that these fees will not continue to rise at the pace over the next few years. This is a question from Jeanie Miller.

Thank you for the question. And I should say that over that period, people will appreciate that there has been both the acquisition of Manawa, which has at its size to the company and also integration costs as well as capital raises over that period as well. So that has also added.

But the other addition is, of course, climate reporting over that period as well, which is undertaken by EY. I don't think I can give assurance about the audit fees going forward, but I would expect them subject to normal activity of the year now to be at a level which I would see sort of not going forward and increasing at the same pace in subsequently unless there's a material change in activity.

No more questions.

Please now cast your vote for Resolution 4.

Staff from our share registry will now collect your voting papers. Please place your voting paper in the ballot box as they are passed around. Shareholders participating via the virtual meeting should now submit their votes online. Voting will remain open until 5 minutes after the conclusion of the meeting. Just pause for a minute as the votes are collected.

The votes will be counted and the results announced to the NZX and ASX later this afternoon. It is now my pleasure to introduce you to Jon Macdonald, who following my retirement from Contact at the end of this meeting, will be taking on the role of Board Chair. Jon?

Thank you, Rob, for your kind words earlier. And while I know Mike also did this, I would like to acknowledge all that Rob has done for contact over his decade as a director and 8 years as our Chair. Rob leaves contact with the company bigger and better in every way. And looking at just 2 key dimensions, the market capitalization or essentially the value of the company has grown from around $3.7 billion when Rob joined to around $9 billion today. Over that time, our carbon emissions have reduced by approximately 80%.

Beyond the numbers, Rob leaves a company with clarity of purpose, good momentum and a strong sense of its role in New Zealand. He has chaired the Board with great judgment and care. On behalf of the Board and shareholders and the wider Contact team, I want to thank you, Rob, for your leadership and service.

For my part, it's a privilege to step into the role of Chair of Contact. I do so with great respect for the responsibility and with great confidence in the company. I know Contact Energy well. I've served on the Board for the last 8 years. And over that time, I've been wholly supportive of our strategy and direction. I hear Rob's earlier words about the role of the Board. And my aim as Chair will be continuity of good governance, strong execution and careful stewardship of the company. Contact has a clear strategy to lead New Zealand's renewable energy future and the achievements of Contact26 provide a strong foundation and Contact31 sets out our next phase of growth.

Our particular focus for the Board will be making the most of our pipeline of potential renewable energy projects while ensuring we have good line of sight to the electricity demand that will support that generation. As we think about new electricity demand, Contact will continue to work hard to help New Zealand companies decarbonize. We will also continue to explore the opportunity around data centers, as Rob and Mike have spoken about in some detail. We see the potential for data centers done well to be a meaningful industry for New Zealand, providing good opportunity and jobs in our regions. Jobs during the construction phase, jobs directly related to the operation of the data center, jobs in the resultant generation projects for the additional energy and jobs in related and supporting industries.

More broadly, Contact has an important role to play in New Zealand's energy transition, but we must fulfill that role in a way that keeps customers and communities with us. That means working hard to make energy more affordable for New Zealand families and for industry while continuing to invest for the long term. We get it that a lot of kiwis are doing it tough, and we get it that a lot of industrial New Zealand is reliant on affordable energy to be able to do their bit for the economy. The opportunity for Contact is significant. We'll continue to execute strongly and make disciplined choices and keep working hard to earn the trust of the people we serve.

I also want to thank the Contact team for all the hard work. The progress the company has made and the confidence we have in the future as a direct reflection of that commitment, capability and care. Thank you, Rob. Go well, and thank you to you, our shareholders, for your continued support.

Thank you, Jon. We're now moving to the final part of the business. So general business. This is your opportunity to discuss anything we have not already covered or asked questions of the Board or the management team. Before we open the floor to questions from those present and online, we have 3 questions submitted prior to this meeting. Please can move the first question.

This is a question from [Alan and Angela Samanthas]. What were the Contact shares worth 10 years ago? And what are they worth now in 2026?

Ten years ago today, the Contact shares closed at $4.95. Close of market yesterday, they were $8.51. Combined with dividends, the annual -- average annual return over the 10-year period is 12.4%.

The next question is from [Patrick Gleason]. Why the Contact -- why does Contact only pay $0.08 for solar power returns to the National Grid?

The price customers pay for electricity includes generation, which is actually about 45% of the bill, and it's in a shrinking amount. Transmission, distribution, metering, levies, GST and retail services. Solar buyback rates reflect only the value of electricity exported to the grid. So they aren't directly comparable to retail electricity prices. We consider a range of factors when setting buyback rates, including the value of exported electricity and when that electricity is typically exported.

Customers with solar and battery systems can choose our Good Charge Plan, which offers a higher buyback rate for electricity exported during peak demand periods at 7:00 to 9:00 in the morning and 6:00 to 10:00 in the evening and half price overnight battery charging. Our aim is to balance recognizing the value of exported solar power with offering simple practical plans for customers.

This is a question from William and James Campbell. Is Contact Energy contemplating a special dividend payment after huge profits?

We're not contemplating any special dividends and are focused on investing future growth through our strategy to lead New Zealand's renewable energy future. Contact expects to invest around $650 million in the coming year alone in growth and stay in business CapEx. I will just say that I don't consider Contact's profits to be huge. They are reflection of the capital employed in this business and the amount of investment that has occurred, particularly in the last 5 years.

Okay. That's all the question set in advance. Does anyone present or online have a question?

So further to the online question regarding dividends. How are you balancing keeping the dividend up over time? I know you've got a 60% increase in profit and only a 3% increase in dividend over the last year. How are you keeping your shareholders on board with your dividend?

So what we're -- essentially, the policy is very much aimed at a consistent level and hopefully growing, and that's certainly what the plan going forward is sort of directionally heading. I think predictability is important as well. We will see an element of profit volatility occur, but I come back to this same point is the company is investing heavily.

If you think about the past year and the change in profitability. That was a year when Manawa was fully part of the results as well, and we're able to capture the benefits of both integration but the core earnings of it, of Manawa. But we shouldn't lose sight. We also issued a number of shares for that acquisition as well. So you've seen the number of -- or the amount of dividend paid as a total absolute amount increased quite significantly in the past year.

Other questions?

Peter [indiscernible] If Contact stop paying dividends, by how much would that reduce electricity bills?

So it's an unusual question I might even get the Chief Executive, who's probably got...

I think there's a couple of elements that remembering that electricity bills, the energy component only makes up 45% of the bill. And in terms of the dividend, it is appropriate to ensure an appropriate return to shareholders while continuing to invest in growth.

The fundamental thing that will drive down electricity bills are twofold. One is continuing to build at pace, renewable energy projects increasing supply and then sharing the cost of lines and transmission, those fixed assets across a much wider base, which means fundamentally growing the economy.

Turning on to our shareholders and saying, well, you should fund consumers. You've got to also remember that Contact Energy in terms of its shareholder book is 70% owned by Kiwis. The sector is probably the best part of 75%, 80%, if you take account of the government shareholding in the other MOM companies. And so this is a kiwi enterprise, and we think we've struck the appropriate balance between hard-working Kiwi savers, direct Kiwi investors and customers and ensuring that it's fair and equitable for all.

I think it's fair to say if we just decided to stop paying the dividend that would have a devastating impact on the investments of our shareholders.

I appreciate you're trying to decarbonize industry. What about domestic gas users because you still do retail gas, don't you?

Indeed, we do. And if anything, we have in the past 18 months leaned into that. And I think I would say we have leaned into a transition. We see that particularly security of the electricity system, but also security of gas supply is important, and we see that occurring over a period. There will be a time when that ends, probably sometimes towards 2050. But sort of a real cutoff just leads tens of thousands, probably hundreds of thousands of households simply stranded with no gas. That would be unacceptable for the country. And we are proud to lean in and support those people in the coming years. Mike, do you want to add anything further?

Yes. Look, that Greymouth Gas deal, the best part of 70% to 80% of our gas book goes directly to direct use users, whether they are ordinary Kiwi homes, schools, hospitals and government agencies.

So we signed that 7-year deal with a specific purpose of, one, providing reliable gas supply to those users, but also giving them a chance to transition as well at a reasonable pace, which doesn't leave them out of pocket. And so it's that balance. So we're providing that security of supply. And at the same time, we want to get alongside ordinary Kiwi households, schools and hospitals and agencies across government, which will allow them to transition as well, calmly.

Yes. I think just my final comment on that is, it's important that gentailers and the industry is constructive as we go through this transition and helping customers, businesses in that transition. And I think just cutting off things, and I go back to my comments in my speech around that. If we just cut off supplies that devastating effects on the economy, on individuals as well.

Other questions from the floor?

I'm here on the domestic side of electricity, people -- normal people in their homes, like beneficiaries who can't pay their power bill and want to complain about the price of the electricity I'm not sure -- can you sort of give us a point about the domestic side, where can you give us an idea of how much -- how many people that cannot afford their electricity? And it is a vast amount or a low amount of people who can't afford it, which I think is probably high. How would you go about, I think, for some of them, it's just reeducation on how to actually use the electricity in their homes? Do you have a sort of a figure about how high -- actually, how high it is of the people who find it hard to pay their power bill?

Yes. So I'll let Mike make some comments, but I will make some comments because I think it's fair to say Contact recognize that there are a lot of people in New Zealand struggling with lots of the cost of living and energy costs are a part of that as well.

I think as a Board, we sort of do look at and certainly constantly challenging the team about what are we doing about it as a company. And you see that the sort of mix of our products, free power over 3 hours. We're the only gentailer out there with prepay. And it's -- that is really helpful where people are struggling to pay their bills. But I'll let Mike add further there. And the Good Initiative is obviously something we've done quite directly in the last year.

Yes, I think it's important that it's not a one-size-fits-all solution. So Rob alluded to some of those layers. So number one, look, for The Good Initiative, which we're increasing by 50% to get to the agency or at the front line to help those households and genuine need and making sure they're empowered to employ every dollar they have into where it's most helpful. We made that commitment to stay in prepaid, and that was deliberate. It helped some -- a large number of Kiwi household budget. But the other thing in that, we have a well-being team, which actively work on making sure that prepaid customers don't or are inadvertently disconnected whether it's applying free credits at the appropriate time or other measures, but they work really hard in that space. They're an incredible group of good and honest people. .

The other thing is indeed look above that is enabling Kiwis to take control of their power bill, whether it's the 3 hours of power during -- 3, 3 hours of power during the week or the free weekends, moving your load and getting that free power is taking it away from us telling customers what they should do, it's to customers taking hold of their own lives and taking hold of their own future. We actually think is really important.

And the last thing is, look, that broader building more renewable energy projects, which just increases supply for ordinary Kiwi households. And you've seen the drop in the household prices and the future prices, and that will flow gently through to retail prices being a lot more stable going forward. And the only real thing we have to worry about is increasing lines and transmission. So it's that multi-tiered response, which is so, so important.

You don't really have a figure on the amount of people unable to pay their power bill generally?

We work with those people. I don't have an exact number, but we have, for instance, 10,000 customers on prepaid. The vast majority of which are pay on time and regularly. And so you just tear it down to -- you might get down to maybe 1,000 to 3,000 households that we have to work really actively with.

Any other questions in the room?

My name is Faye Bishop. And the question I have may not be quite relevant to the -- my name is Faye Bishop. The question I have may not be quite relevant to this meeting, but I think you will have people who can answer the question. In Mike Fuge's speech, he mentioned Tiwai Point. And in other information that I've had, there is an Australian company who had been planning to build a urea plant near Tiwai. Is Contact a supplier to that business? Or is it not something that's on the radar of the Contact management or Board?

It is not something I'm aware of.

No. Look, there are -- obviously, with the 95% renewable energy that we now have in abundance in this country, there are a range of industrial options. I haven't personally heard of the green urea plant down at Tiwai, but I have heard of green urea as an option.

It's pretty tough economically from what I understand, but it's one of many options. The thing we do as a company is it's always really important. One, to keep your eye on that far future, but also to play the game in front of you, which is supporting in this instance, Fonterra, New Zealand Steel and the aluminum smelter. And that we have secured the industrial base of this country for a very, very long time. Green urea might happen, it might not. Let's see what happens. It may happen in Southland, it may somewhere happen somewhere else, but that's not for me to say.

Any other questions on the floor? Okay. Let's go online, please.

So we've got a question here from [Kasia Patel]. With regard to the recent announcement of a potential joint data center venture with CDC, does this mean future capital raise or reduced dividends going forward? One of the things, too, that [Kasia] also notes is with the current opposition to growth in AI, and he requests some comments from the Board and in particular, the CEO, Mike Fuge.

Okay. Look, I think both Mike and I in our speeches, I guess, certainly, made our enthusiasm for data centers. And I just would go back to -- I strongly personally believe that they will drive additional demand, which will be met by new supply that in its totality would add resilience to the New Zealand electricity system.

So very positive from that point. I will hand over to Mike, and I might even get Jon to comment as well because this is very much the future. And after today, I'm not here, sir.

Okay. Look, number one, no investment decisions have been made. And while it would be premature to speculate about future funding requirements, our balance sheet is very strong. We raised $575 million of new capital in February this year, so that we would be to move quickly if growth opportunities like this did appear. So that's as good an answer I can give to that.

Contact is 4 bottom lines for potential data centers. Number one, it's ensuring that the partners pay for a fair price for the power and the infrastructure that goes around it that they don't land that on others. Number two, they have to be environmentally responsible, particularly with the use of water. Number three, they have to make a positive contribution to the communities around them. They have to be a good neighbor where they operate. And number four, they do have to ensure enduring value for the whole nation.

On AI, more broadly, our focus is on supporting infrastructure that can help unlock new renewable generation and economic growth in New Zealand. And as with any project, we would only proceed if it aligns with our strategy, our values and create genuine value for our shareholders and communities. I think there is a broader question for people to consider about AI is that just as we aspire to energy sovereignty and we aspire to data sovereignty, there is also a question for the nation about whether we want that superintelligence located here or simply in the hands of others. And the only way it gets located here is if we have data centers here. Researchers at Berkeley have access to almost 300 x the number of tokens that our researchers in this country have which ultimately will lead to an unfair competitive advantage if we do not actively consider stepping into that space. Jon?

Thanks, Mike. I'll keep this brief as I think Rob and Mike have answered that well. And really, the way that I would characterize my view around data centers, a reach back a little bit to some of my words earlier, and it's around data center has done well. And Mike talked about 4 points there. that constitute a big part of that, but there's a couple there that I just wanted to expand on.

And the first is acknowledging that data centers are big consumers of energy. But the way we see that working is alongside any data center, us building new renewable generation that matches or exceeds the consumption of that data center. And in addition to that, we expect there to be energy infrastructure around that, that improves the resilience of the grid and improves our energy system overall. It will take time, but we see that as a very positive picture done well.

Also around some of the other environmental impacts, there are a few different ways that data centers can be constructed. We have been very careful with the partner that we are working with, and they, in turn, are very attuned to and careful around how to ensure that all those environmental impacts are wholly or very close to wholly mitigated.

Water, in particular, is one that has been raised in a few different forms, and we're very comfortable in that regard in terms of what's called the closed-loop system to avoid any excessive water consumption. Then finally, I just want to touch on the opportunity side of that equation where we really, really, as a country, could do with more industry, especially in our region. And data centers is an area that can contribute to that. That's in the construction, it's in the operations of the data centers. It's the renewable generation that will be built to support those data centers and all of the upstream and associated industries that sit alongside that.

And in totality, that would be really helpful for the country. So that's something that I'm keen to ensure is kept as part of the equation and part of the social discourse that's playing out around data centers.

This is a question from Lillian Wang on the same similar subject. AI is driving rapid growth in global center power demand. Could contact attract major U.S. technology companies to build data centers in New Zealand that would be supported by dedicated geothermal and other renewable generation with the grid mainly providing back up. Does Contact see this power plus data center model is viable long-term growth opportunity?

Okay. Thanks for the question. And I think, again, in our speeches, you saw that we very much saw this as a great opportunity, a great export industry in the making. So yes, we do see large-scale data centers as potential long-term growth opportunities for New Zealand. And for Contact. I should say that the U.S. technology companies we're talking about are actually the buyers of the compute power from those data centers, the data centers themselves would be owned and built by others.

New Zealand does have some genuine advantages, including a high proportion of renewable electricity, a strong renewable development pipeline and available sites with grid connectivity.

Our approach is very much based on additionality. The objective is not for data centers to consume existing renewable generation but for long-term demand to help to unlock new renewable supply. Geothermal is particularly well suited and Contact has 11 terawatt hours development pipeline across its wind, solar and geothermal. That is why we are exploring opportunities such as a potential data center at Stratford in partnership with CDC. Thank you.

We have now 2 very similar questions from [Andrew Smithe] and [Steven Lowe] on a different topic. What do you think is driving the decline in the Contact Energy share price in the last 3 months? Down 7.5% for the year?.

I mean share prices are influenced by a wide range of factors, many of which are outside the company's control. While we do not comment on the short-term price movement, several factors may have affected recent price sentiment towards the New Zealand utilities sector and Contact. These could include the recent reduction in long-term electricity, future prices, the perception of policy risk change lead up to the election and probably particularly the higher interest rate environment. The Board and the company and the leadership remain just focused on the strategy, delivering operational performance, maintaining disciplined capital allocation.

This is a question from Jeanie Miller. Thank you, Rob, for all you've contributed to Contact Energy. But is the Board confident that the incoming Chair, Jon Macdonald, is the right person for the role, given he's already a very busy director and Chair. Does he have the time allocation, dedication for the Contact Chair role that Rob has?

The Board is very confident and I can say that I participated in what was an extensive process that we undertook over the past year to appoint the Chair and that included the use of an outside adviser. It was a committee of the Board that was chaired by David Smol. So the outgoing chair did not get to choose the incoming chair. It was chosen by the Board that remained. So I think the Board is very confident about Jon being the right person.

I mean the one thing I would say about commitments, as these things come along, people adjust over time. But I'll let John perhaps comment of his portfolio.

Thanks, Rob, and thanks, Jenny, for the question. And so going very directly to it yes, I do have time for this role -- and yes, I absolutely have that dedication and the passion for Contact Energy. So like Rob laid out there in terms of the very considered process the Board went through for me, too, it was a decision taken with a lot of thought because I have had 8 years' worth of seeing how hard Rob has worked in the role. And there absolutely is a big time commitment and a big energy commitment that it requires. And I can state to you unequivocally, I have both that time and that commitment.

Thanks, Jon.

This is on the spirit of 2 questions. This is also from Jeanie Miller. Referring to C1 and C2 notes in the financial statements, as contact energy transitions from older geothermal thermal assets to new projects. How does the Board manage the risks with the potential for write-offs and sudden impairments? Because we got the useful life when initial judgments went wrong, "getting it wrong could have a significant impact on profitability down the track" ? Do you have any comments?

The Board takes the risk very seriously. We operate long-life infrastructure businesses. There will always be a degree of judgment involved in areas such as asset lives, future operating performance and capital investment decisions.

To manage that risk, we regularly review the asset lives, carrying values and future cash flows, assumptions and -- those assessments are subject to both Board oversight, external audit scrutiny. Any major investment must also meet rigorous return and risk hurdles. Importantly, our strategy has been to replace aging assets at a planned and disciplined way. We continually test our assumptions. And when circumstances change, we will update those assumptions transparently. Our objective is to avoid surprises and ensure shareholders can have confidence in the quality and sustainability of our earnings.

I'll just make one other comment is particularly around -- and you're seeing it with both the Wairakei Power Station, but also previously the Stratford combined cycle. We do have a habit of just sweating these assets a bit longer than what we actually had the written down periods for.

So if anything, we're quite conservative when it comes to asset lives versus how we might finally exit those assets out of our system.

This is the final online question because we're almost out of time. This one is from Hong Lu. When applying modern employment philosophy, does Contact place greater emphasis on a candidate skills and ability to perform the role? Or do they also consider an applicant's background and personal circumstances. This might lead to a company becoming more successful.

I'm going to ask Mike to comment on that given he's the person that employs [indiscernible]

I did mention that in my speech. We actively seek the very best of the best. Particularly in the context of a New Zealand environment and the small population we have here, and that's what we will -- that's what will propel us into the future.

We always keep an eye on how we're performing on diversity and inclusion. That is also important that we are fair that we don't let our natural biases exclude some of the best of the best. And that's something, but that's more about making sure that we don't let those natural biases.

But I'm -- we're unashamedly of that philosophy that the best capability is what's going to propel us to the future. And that is why we are the graduate employer of choice in this nation.

I'd just add to Mike's final comment there that it's something the Board is quite proud about. We've grown a graduate recruitment program and internship over the past 5 years to the point it is a very sought after by all sorts of graduates across universities in New Zealand.

No more questions from shareholders online.

Okay. Are there any final questions on the floor?

No. Okay. Thank you, everyone, and thank you, Jon and Mike. As there are no further questions, I now declare the meeting closed. For those present in the room, I'd like to invite you to stay and join us for morning tea. Please feel free to talk to me, my fellow directors and members of Contact senior management and wider team. We're all wearing name badges and look very much forward to the opportunity to talk to you. If you have a customer service queries or would like to sign up as a customer, members of our retail team are also there.

Thank you very much for your attendance and continued support of Contact. I wish you a safe journey home. [Foreign Language]. Thank you.

Kia ora everyone, welcome to the presentation of Contact's FY '26 results. Delighted to have you all here. Put simply, FY '26 was a year of delivery. We completed the acquisition of Manawa Energy and welcomed its people and the assets into Contact. We delivered renewable energy growth with renewable output up 37%. Contact was 98% renewable in this last year, up from 88% last year and just 81% in FY '21. We took strong and pragmatic steps to support security of supply and the resilience of the electricity sector. We contracted with others, the HFO at Huntly, to ensure a strategic coal reserve for dry years. We brought our first battery online at Glenbrook and confirmed our investment in the second 200 megawatts, and we secured gas to support essential community services through the all of government contract. Meanwhile, we continue to work closely to support our customers.

This includes supplying discounted or off-peak free electricity to now around 165,000 households, supporting customers and communities most in need through the $5 million The Good Initiative. The FY '26 results reflect this delivery across the board with EBITDAF of $1 billion, up 31% last year, a step up in our average return on invested capital of over 100 basis points. Given this, the board has declared a final dividend of $0.24 per share, taking the total final dividend for the year up to $0.40 per share, up 3% on last year, delivering as promised to our shareholders. Go to the next slide. Market conditions in this last financial year '26 were a significant contrast to those in FY '25. The market was 93% renewable, the highest rate achieved since the market was introduced in the 1990s.

And yes, this reflected higher than average hydro inflows, 180% above mean this year. It also reflected the investment the sector has been making in building new renewable generation, bringing around 4 terawatt-hours online in the last 5 years alone, pushing out baseload thermal. Another 3 terawatt-hours is committed and expected to come online by the end of 2027. This is a cheaper supply of electricity, it builds resilience and economic independence for the nation. This investment is now being reflected in longer-term ASX future prices, up nearly 30% since the start of the year. These have settled at the lower end of our long-term wholesale price expectations, reflect the market moving back into a supply and demand balance. Demand is tracking up about 1% when you normalize for the fact that NZAS demand response was deployed last year.

The market will need to be disciplined, bring forward new renewable electricity projects backed by new demand sources. And alongside that we'll have to show both capital and cost discipline. Only the best projects will get through. Pricing for winter '26 has also come down sharply since the start of the year, with market confidence backed by high energy storage across each of hydro, gas and coal. Recent market trends continue, like the ongoing decline in gas production, with 2P reserve forecast now 24%. We continue to address this strong headwind. However, what is clear is that the market has learnt from the challenge it faced in winter 2024, has come through in a much stronger position to support Aotearoa's changing energy needs. The market has already adapted for the energy transition.

Sector investment has continued at a pace. Market settings have evolved at the same time. We have now a fast-track consenting regime in operation and further planning reforms expected to pass by the end of the year. Industry is delivering the highest rate of new renewable investment in the nation's history. We have moved as an industry to put in place dry year support across a range of mechanisms. Demand response of large industrials, the HFO with the strategic coal reserve, stored gas and AGS, and changes in the way we use hydro. And yes, there may still be a role to play for right-sized, a right-specced LNG facility to support those remaining gas customers who are finding it difficult to convert off gas and to provide for the nation a diversity of energy supply.

We also expect extended HFOs and diesel storage to play part in this resilience story. Remember, it's always been a matter of all of the above, not just one magic bullet. We have already moved the dial on this as a sector to mitigate dry year risk and deliver energy security for all. Market and regulatory settings have evolved in step and are now very clear with non-discrimination obligations now in place and the super peak product and the associated market-making obligations both now implemented. We continue to innovate for our customers as they electrify their own energy use with tools like shaped electricity supply contracts and demand flex, making conversions to electricity all the more possible. We remain focused on energy wellbeing for those most challenged by energy prices, consumer cares, and reducing barriers to access.

This year, the Contact Good Initiative alone provided $5 million of customer and community support. We expect it to grow to $7.5 million in the coming year. We're advocating for a market-wide obligation to connect, to lift energy wellbeing outcomes, no matter your circumstance. We continue to deliver on our very strong renewable investment program. We have had a continuous build program on the go since 2021, with Tauhara, Te Huka 3, and our first battery all now online, and Kowhai Park Solar now in commissioning. This investment has directly contributed to the supply-demand balance that you can now see in the broader market. Coming back to the market, early works are now also underway on Glorit Solar, which together with Kowhai Park, will help support committed dairy electrification load, the conversion of dairy off gas and coal.

Construction also got underway on our second battery at Glenbrook in March, which will ultimately take our battery capacity at that site to around 300 megawatts, helping us to free up natural gas used in peak periods and supply this to customers. It's worth noting that the role that batteries have played in these last few weeks in keeping the country safe through those morning and evening demand spikes, which were at record levels with significant amount of conventional generation offline, and yet as a nation, we got through that. Construction has well progressed on our Te Mihi Stage 2 geothermal project, with the steam field separator, heat exchangers, and turbines for the first unit already installed. Te Mihi 2 is scheduled to be online in quarter 3 next year and will replace Wairakei to a degree, which has been running since the 1950s.

We have an extremely experienced team there on the ground, continuing to demonstrate that project delivery and geothermal development expertise is so core to our value proposition as a company. With Manawa, it's been a transformational year for Contact. Having completed the acquisition of Manawa on the 11th of July last year, welcoming Manawa's people and the 26th generation sites into the Contact fold. It has truly been a merger of 2 great companies. We're delighted to have already delivered the benefits of the integration. One of the pleasant surprises has been the quality of the development options acquired, including the Huriwaka and Kaihiku wind projects and Argyle Solar. These have been actively advanced, enhancing the optionality within Contact's already high-quality pipeline. Cost synergies have already been secured at 100% of the upper end of the range we signaled.

That's $28 million on a run rate basis. Together with the net repricing benefits that have already been confirmed going into FY '27, we have secured an $84 million uplift for FY '27, up 35% on the long-run benefit announced at the acquisition. This is before the expected value from long-run generation normalization, with the Highbank and Coleridge upgrades ongoing and expected to come online in the coming year, and hydrology varying year-on-year. The delivery of Manawa has just, however, been one part of the story this year. FY '26 has seen an impressive delivery of our in-year strategic targets across the board. As we closed out the Contact26 strategy, which was, remember, to lead New Zealand's decarbonization, we decommissioned our final base load gas plant, TCC, after 30 years of service to the nation.

We met both our run rate and in-year Scope 1 and Scope 2 emission targets that we committed very publicly years ago. We beat our contract demand targets. Importantly, almost all new demand contracted in-year had a favorable shape, being summer-weighted. Our CO2 commercialization project hasn't quite met the project time frames we set, but we continue to see this as an important part of the future of the Auahi geothermal field. The project remains under development with a pilot-scale test planned for Auahi later this year. I've covered our renewable investment activity in detail. Again, a very good result against the ambition set at the start of the year here. Noting that Kowhai Park is now in commissioning, with the energy to the grid later this month. In fact, in the coming weeks.

In retail, we've over-delivered on our multi-product customer and net price targets. We're broadly in line with our cost to serve targets. Finally, we've met all of the targets, as I outlined above, that we set ourselves for Manawa delivery.

On that note, I'll hand over to Matt now to take us through the financial results.

Thank you very much, Mike, and kia ora everyone. I'm Matt Forbes, Contact CFO. Before I talk about the numbers, it's just worth remembering they're a product of thousands of decisions made every day across Contact, and we're enabled by the 1,400-plus people who operate our assets, serve our customers, and deliver change across the business. It's our job to turn those efforts into long-term strategic value for shareholders, FY '26 is the year the strategic choices made through Contact26 and the Manawa acquisition have clearly translated into strong financial performance. FY '25 tested Contact's resilience through dry hydrology, fuel constraints, and high replacement energy costs, FY '26 shows what the expanded portfolio can deliver in a more balanced market. There are 3 key takeaways from the result. The business has performed through very different conditions. Manawa and recent investments are now delivering measurable financial benefits.

The resulting cash generation and balance sheet capacity support our forward investment program and give us confidence in further dividend growth. The headline for FY '26 is that earnings growth came through more renewable generation and the additional sales it supported, not higher average electricity prices. EBITDAF was $1.011 billion, up 31% on underlying FY '25, and operating free cash flow increased 49% to $648 million. FY '26 return on invested capital reached 7.5%, lifting the 4-year average from 4.9% to 5.9% as returns from Manawa and recent renewable investments began to flow through. The bridge on the right nets to a $237 million increase in underlying EBITDAF, with 2 interconnected movements explaining most of the change. Renewable generation added $225 million, reflecting Manawa's hydro, the first full year of Te Huka III, and improved inflows. That additional generation supported more contracted sales while materially reducing our reliance on gas-fired generation.

Pricing moved the other way, creating a $53 million headwind. The average price across contracted sales reduced from $157 to approximately $140 per megawatt hour, reflecting the move away from FY '25 stress conditions and the greater proportion of generation sold through longer dated contracts. This illustrates the 2 sides of hydrological volatility. Sector earnings have rebounded as conditions move from very dry in FY '25 to wet in FY '26. The distinction for Contact is that our portfolio delivered through both. Lower gas, carbon, and acquired generation prices added a further $40 million, reflecting the reduced costs of replacement energy in the year. While other income improved by $51 million, reflecting new income streams acquired with Manawa, and the absence of losses incurred on excess gas from Methanex sales in FY '25.

Fixed costs increased principally through the Manawa cost base and transaction integration expenditure, partly offset by the synergies and productivity benefits delivered during FY '26. Turning to profit. Underlying profit increased 62% from $261 million to $423 million. Importantly, it also increased on a per share basis. Underlying profit per share rose 27% from $0.327 per share to $0.415 after allowing for the shares issued during the year. That per share outcome matters. The capital we raise must translate into stronger earnings and value for each share, and not simply to deliver a larger company. Below EBITDAF, high depreciation and interest reflect the larger asset base and our approach to acquisition funding, while tax includes the benefits of the government's investment boost settings. One item worth explaining is the unrealized movement within the change in fair value of financial instruments.

Around $39 million of the year-over-year improvement relates to commercial contracts that are not eligible for hedge accounting. They relate to future periods, are non-cash in the current period, and do not reflect current period operating performance. That's why reported profit should be considered alongside EBITDAF and operating free cash flow per share, and most importantly, delivering improving return on invested capital. The segment view shows where the EBITDAF was generated. I'll keep this brief and return to the details in the slides that follow. Wholesale EBITDAF increased by $250 million to $1.145 billion, reflecting the scale in renewable generation drivers already described. Retail EBITDAF improved from a loss of $49 million to a loss of $41 million. That's despite $130 million increase in electricity and network input costs.

Corporate and other allocated costs increased from $73 million to $93 million. That includes $24 million of Manawa transaction and integration costs, compared with $18 million in the prior period. The remaining increase reflecting the acquired Manawa cost base, inflation, and investment supporting the development of our new Contact31+ strategy. On to our wholesale business. FY '26, the generation from renewable sources was 98%, up from 81% when Contact26 began in FY '21. That shift has changed not only our emissions profile, but also our cost base and the resilience and quality of our earnings. Manawa has added 2.4 terawatt hours of hydro generation and contracted renewable PPAs. Combined with geothermal storage, flexible thermal capacity, and access to markets, that has created greater geographic and technology diversity, and gives us materially more ways to manage volume and price risk.

The value lies in using all of those resources together. Let me bring that to life with a practical example from FY '26. The year included planned outages at Tauhara and Te Huka III, unplanned disruption, and some assets taking longer to return than expected. We did not respond by replacing every one of those lost megawatt hours at any cost. When Te Mihi and Poihipi experienced an unplanned 5-day outage and geothermal generation was approximately 20 gigawatt hours below our forecasts, increased hydro and thermal generation largely offset that shortfall. That's exactly what resilience looks like in practice. It doesn't mean avoiding every disruption. It just means having those portfolio options to manage the financial and customer outcomes and consequences when that disruption invariably occurs. Thermal generation fell to 229 gigawatt hours, its lowest ever recorded level. High inflows contributed, but so did the expanded renewables portfolio.

Thermal remains valuable in dry periods and during major outages, but is now just one option within a broader mix. The Contact and Manawa assets are already being managed commercially as one portfolio. The next source of value is integrating the support systems, data and decision processes. On wholesale contract revenue, the larger renewable portfolio also allowed us to increase contracted revenue by $281 million to $1.666 billion. The largest movement was in strategic fixed price sales, where revenue increased from $146 million to $361 million and volumes increased by 2.2 terawatt hours. That reflects the Mercury contract acquired with Manawa, a full year of Tauhara backed PPAs, higher INSUS volumes, and the commencement of the New Zealand Steel agreement. This is our channel management flywheel in action. Durable customer demand supports renewable investment, and our generation and customer commitments are managed together through our trading team.

Long-term contracts are important. They provide earning certainty and help underpin new generation. The trade-off is that they can underperform merchant exposure in tight markets, but become particularly valuable when supply increases and near-term prices fall. The wholesale price conditions in FY '26 demonstrated that value, and the allocation across each of these channels is deliberate. Each carries different price, shape, location, duration, and risk characteristics, and no channel is always superior. For example, in retail, that meant preserving the long-term value of a customer franchise rather than materially reducing volumes over the last 6 years, when input costs were higher and it was tempting to do so. In wholesale, it meant retaining a balance between long-term contracts and shorter-dated market-linked channels like C&I and CFDs, rather than concentrating the portfolio for one market outcome.

That balance preserves options as the conditions change to deliver that purposeful alignment between customer demand, renewable investment and the risks that Contact chooses to retain. That contracted book provides the foundation of how we set up the business, and our trading business manages the residual position as the conditions change from those starting assumptions. '26 began with fuel scarcity, planned outages and the risk of constrained gas delivery. By the second half of the year, high hydro inflows and wind generation had driven those spot and short-term dated prices materially lower. In-year, we continually reoptimize the portfolio rather than operating to a fixed annual plan. The clearest example in FY '26 was our move fuel strategy.

Through autumn and early winter, the team increased market purchases when electricity was inexpensive and retained our valuable hydro storage for periods when winter prices are expected to be higher. In June alone, that meant buying an additional 22 gigawatt hours when spot prices at Ohaaki averaged $41 per megawatt hour. Viewed asset by asset, buying electricity when water is available can appear counter-intuitive, but when viewed across the portfolio, it can be economically the right decision when the expected future value of the water exceeds the current purchase price. We had similar examples within our gas portfolio. Lower electricity prices and that limited thermal generation created a risk that Ahuroa gas storage could reach capacity. The team therefore sold the gas, including at a standalone loss for that gas, to preserve the flexibility across the wider portfolio rather than potentially face forced sales later.

I guess those are the decisions that bring the Manawa thesis to life. We've got greater hydro and geographic diversity. That just doesn't reduce the risk, though. It gives us more ways to respond as conditions change. Now to the performance of our retail business. Retail price increases, they're never comfortable decisions, and average electricity tariffs increased by around 12% as we sought to recover the $130 million increase in electricity and network costs, while recognizing the pressure on household affordability and the importance of protecting customer trust. Even after that significant increase, pricing did not fully recover the additional input costs and electricity gross margin was approximately $5 million lower. In deciding how far and how quickly to move, we modeled, we debated the expected effect on customers, churn, calls, and acquisition.

Customer response was more resilient than expected, supporting our judgment that we'd struck a reasonable balance between cost recovery and customer trust. Network and metering costs are third party costs that must be recovered, energy recovery requires more judgments because customer demand is weighted towards winter and peak periods, while retail prices adjust less frequently than our wholesale market channels. There'll always be channels and choices about the pace, timing, and extent of price changes. The most significant progress in the business came through multi-product growth. Total connections increased by around 50,000 to 692,000, including 24,000 in telco and 26,000 across energy. Gas and telco margins increased by $15 million and $4 million respectively and were the main contributors to the improvement in retail EBITDAF. Retail operating expenses increased by only $4 million, while opex per connection remained broadly stable at $117.

That demonstrates the value of a more diversified customer and margin base. Our next phase of retail growth is not simply adding more customers to our current operating model. It's simplifying the processes and products, modernizing our platform, and converting the customer growth into stronger margins through improved operating leverage rather than price. Reported other operating costs increased from $295 million to $387 million, principally reflecting the acquired Manawa cost base and integration expenditure. Manawa added $93 million of operating costs. Inflation and other headwinds added $11 million, while a further $4 million was associated with growth, including the full-year operating costs of Te Huka 3 and investment supporting retail connection growth. Against those increases, we delivered $24 million of synergies and productivity benefits during FY '26, $22 million from Manawa, and $2 million from continued improvements in retail cost to serve.

As Mike mentioned, that full $28 million Manawa run rate synergy target has now been secured. Delivering the transaction synergies was important, but it didn't impact or determine the integration sequence. The integration was deliberately sequenced around operational continuity first and foremost, control and clear accountability. We transferred operating knowledge and established ownership before redesigning processes or going on to those duplicated costs. That allowed us to secure the full synergy target while maintaining stable operation of the combined portfolio. A word on discipline. We only recognize the synergy once the action is complete. Finance has independently validated the value, the saving is embedded in the receiving business unit's budget. The $28 million is therefore a reduction in the future cost base, not simply a piece of information on the PowerPoint or an opportunity identified within the acquisition case.

For FY '27, we expect BAU OPEX of approximately $360 million, broadly flat on FY '26, despite around $11 million of inflation and $4 million of growth. Those pressures are offset by a further $15 million -- $16 million of synergies and productivity. Reported FY '27 costs are expected to also include approximately $7 million of remaining integration expenditure and $12 million of time bound SaaS implementation expenditure, principally related to the potential future retail platform, which remains subject to final investment approval. Accounting standards require those SaaS implementation costs to be expensed with the equivalent investment removed from forward SIB capital guidance. Across FY '26 delivery and the FY '27 outlook, the cost bridge incorporates approximately $40 million of in-year synergy and productivity benefits. The most important outcome is that the enlarged business is expected to absorb inflation and growth while holding BAU operating costs broadly flat.

That represents a meaningful reset of our operating cost base and provides evidence that the wider productivity program is beginning to deliver. Earnings converted strongly into cash. Operating free cash flow increased 49% from $434 million to $648 million, and the cash conversion improved from 55% to 64% of EBITDAF. That is the cash generated after SIB CapEx and is available to support dividends, improve balance sheet strength, and drive disciplined growth. Higher EBITDAF was the principal driver, while working capital improved by $55 million, largely as a result of lower fuel and carbon inventories, more than offsetting the higher cash, tax, interest and standard business capital expenditure. Standard business capital expenditure was $145 million, below guidance of $170 million to $185 million. Within that, BAU expenditure was $82 million, also below the $115 million to $125 million guidance range.

The balance relates to identifiable time bound programs, including the final year of the accelerated asset program launched in 2021, the Waiotake extension, Manawa hydro enhancements, and the first payment on the spare Tauhara rotor and the integration activity. That distinction is really important. The underlying expenditure that's required to maintain reliable operations remain well controlled. While the higher total reflects those deliberate programs to extend asset lives, complete prior commitments, and integrate the expanded portfolio. Some of the FY '26 underspend reflects timing, with delayed activity moving into FY '27. Operating free cash flow increased by 18%, from $0.544 to $0.64, despite the issued shares during the year. Together with the equity raise, DRP retention, and appropriate use of debt, that cash funded the Manawa acquisition, $375 million of growth capital, and the $387 million of declared dividends.

That's consistent with the capital allocation hierarchy that we set out at our Investor Day in November. One, maintain the assets. Two, preserve investment grade strength. Three, support reliable dividends. Four, commit growth capital only when the return is justified. The February equity raise and the consolidation of acquisition financing leaves us with a strong and more flexible balance sheet. Net debt was $2.2 billion at 30 June, and S&P adjusted net debt to EBITDAF reduced from 2.3x to 2.1x. That's a strong outcome following the Manawa acquisition and continued renewable investment. It reflects the equity raise, the stronger earnings, and improved cash generation, and the equity credit treatment of our capital bonds. The balance sheet is also simpler and more diversified.

The EUR 500 million EMTN termed out the acquisition funding and extended our maturity profile while we repaid the more administratively complex U.S. private placement facilities. Average tenor is now 7.2 years, and the weighted average gross interest rate reduced from 5.8% to 5.2%, matching our efforts in the low interest rate periods earlier this decade. This gives us the capacity to complete the Contact31 program, plus the additional growth where customer demand and project economics support it while continuing to support reliable dividend growth and remain resilient through changing market conditions. Capacity to invest does not lower our return thresholds. For projects not yet committed, the depth of our pipeline over 11 terawatt hours gives us the choice over timing, sequencing, and funding.

It allows us to prioritize the projects that best meet our customer return and risk requirements rather than creating an obligation to commit to every project. That combination of cash generation and balance sheet capacity supports the dividend, and the board has declared a final dividend of $0.24 per share, taking the FY '26 total to $0.40 per share. That's a 3% increase on FY '25 and delivers the guidance provided at the beginning of the year. The dividend represents 65% of FY '26 operating free cash flow and is well supported by the cash generated during the year.

Against the formal policy measure, the dividend represents 114% of average free cash flow over the preceding 4 years, and that reflects a temporary timing mismatch following Manawa, as the enlarged share base is included immediately in the dividend, while Manawa's FY '26 cash contribution only begins to enter the rolling average from FY '27. The board has therefore applied the discretion previously communicated for the initial post-acquisition years. Contact expects the FY '27 dividend to increase to $0.42 per share, a further 5% increase at the top end of the range previously indicated. That reflects confidence in the forecast operating free cash flow, the secured Manawa synergies, and balance sheet capacity. As always, each dividend remains subject to board approval and business and market conditions at the time it is declared. We also retain the 2% DRP discount as part of the Contact31 funding framework.

For FY '27, we expect normalized EBITDAF of approximately $1.045 billion based on mean hydro and wind conditions. That outlook is stronger than the headline comparison suggests. It includes $19 million of remaining integration and platform investment. Before those items, the expected underlying operating result is approximately $1.064 billion. The outlook also absorbs a substantial planned reduction in geothermal output during the Wairakei extension and Te Mihi 2 transition. The Wairakei generation output is expected to be reduced by approximately 428 gigawatt hours, partially offset by Te Mihi 2 commissioning later in the year. The outlook also includes a planned 10-day Tauhara outage. The principal sources that give us confidence in earnings visibility are the full year contribution from the combined portfolio, those secured Manawa synergies, and our contracted revenue position. Approximately 97% of FY '27 repricing is confirmed, materially limiting the near-term effect of ASX futures on FY '27 earnings guidance.

Retail net price is expected to reduce by approximately 2%, from $174 to $171 per megawatt hour. That reflects moderating wholesale energy input costs and deliberate pricing simplification and retention choices ahead of a potential future retail platform investment decision. Importantly, the FY '27 outlook doesn't rely on further increases in retail net price. We expect that energy component of customer pricing to reduce year on year, with customers beginning to benefit from increased renewable supply and moderating wholesale input costs. That benefit that's under our control will be partly offset in total customer bills by continuing increases in regulated network charges. The acquired Manawa and Mercury arrangements provide a net FY '27 repricing benefit of approximately $56 million. Together with the secured $28 million of cost synergies, that provides approximately $84 million of uplift over FY '25 before generation normalization and demonstrates the acquisition economics we outlined.

The outlook also includes renewable generation from Kowhai Park and a full year contribution from Glenbrook Battery One. To conclude, FY '26 delivered that step change we promised through Manawa and our renewable investment program, and we converted that delivery into stronger cash flow per share, improving returns, and increased dividends. FY '27 is supported by largely confirmed pricing, Mercury repricing, and the secured synergies within our expanded portfolio. Together, those outcomes provide the financial platform for the next phase of Contact31.

I'll now hand back to Mike.

Thank you, Matt. Look, building on the success of Contact26, November last year, we launched the Contact31 strategy, which many of you were present for, to lead New Zealand's renewable energy future. The basics of this are we will extend our advantage as New Zealand's geothermal leader. We will scale on high-quality existing fields, exploring new options and continuing to improve on our cost leadership position. We will lead on new flexibility in this country through batteries, hydro, and gas flex, and smart portfolio optimization, which Matt expanded on. We will deliver lowest cost, diversified wind and rapidly deployed solar, all backed by long-term industrial partnerships. We will lead the energy transition at home, empowering our customers to shift their energy use to the times of lower cost and demand.

All of this will be enabled by empowering our people, maintaining trusted relationships with our key stakeholders, establishing an edge in data and AI, and maintaining discipline and growing productivity as we grow in bulk. We never lose sight of the fact that it is our ongoing focus on operational excellence and underlying performance that allows us the privilege to keep growing. I do want to make it very clear that the Contact31 strategy is anchored on building renewables backed by long-term partnerships. This is not a build it and they will come strategy. We've talked about the 3 terawatt hours of new demand sources that are known and committed across dairy, metals, data centers, and residential. Just today, we saw New Zealand Steel's electric arc furnace come online in reality, and we have the contract to convert the Whareroa dairy factory.

This is clear demonstration of this commitment to grow demand and supply at the same time. Beyond these committed projects, we can see up to an additional 8 terawatt hours of live potential across the same 3 sectors. The potential restart of Potline 4 at Tiwai is a great example. Some of these are large projects and are potentially binary in their outcome, i.e., they're going to happen or they won't. However, even partial conversion of this potential would act as a step change for the demand picture, unlocking renewable development pipelines across the board. This is particularly true with large data center projects. Leaning into these opportunities, Contact is able to draw on its experience as a developer and operator of renewable energy sites around the country. We have long-term community and stakeholder relationships. We have the experience in planning, consenting, and environmental management.

We have that track record of bringing innovative solutions to our customers to help them manage and contract their energy needs into the future. All of this, we will continue to bring to the table to work alongside our existing and potential new customers to unlock future electricity demand opportunities and, more broadly, the economic growth of Aotearoa. We are well prepared to take hold of this opportunity. We have over 4 terawatt hours of priority development options across New Zealand that we plan to build to meet customer needs as they materialize. We have a diversity of options here across the technologies and geographic locations, with many either fully or partially consented, putting us in a unique competitive position. We are prepared to accelerate high-quality options from our wider 11 terawatt hour pipeline as the market continues to evolve. Turning briefly to Southland Wind.

This is a really good example of how we're working closely with our customers to build renewable energy online hand-in-hand with that new demand. We were granted consent in April this year and immediately kicked off an RFI process to look for a strategic wind partner. We're now engaging with a shortlist of very credible parties and are close to bringing our partnership plans to life. We intend to bring to wind what we have already successfully done in solar. Not only can a partner bring additional expertise, but an off-balance sheet structure will help to share risk and reduce costs. On the customer side, we have signed a non-binding letter of intent with Rio Tinto for a PPA to support the restart of the idle Potline 4 at Tiwai Point. Potline 4 has been idle since 2020.

Its restart would require 50 megawatts of additional electricity or around 400 gigawatt hours per annum and would deliver increased production and export earnings for the nation. Having a credible baseload partner such as Rio Tinto is critical for bringing new renewable generation online. The letter of intent helps underpin our Southland Wind Farm and shows how industry and renewable energy can work hand-in-hand to deliver long-term benefits for Aotearoa. You'll have seen our announcement today that Contact has partnered with CDC to explore data center development at Stratford. This will give new life to the site of our decommissioned baseload gas plant, TCC. It represents a significant step forward in Contact's strategy to lead New Zealand's renewable energy future. Our approach is based on the principles of additionality and support for broader electricity system resilience.

Contact has more than 11 terawatt hours of uncommitted renewable generation projects across its development pipeline. Long-term contracted demand, like the proposed Stratford Data Center, will underpin our ability to bring more of those projects forward. 6 years ago, I would've said the Stratford site was likely heading for total closure, aligned with the impact of the decline in the downstream gas market. Now, we're making plans to leverage the unique combination of the site's resources, unlock the development of more renewable energy, and support growth in the Taranaki region with investment across multiple technologies. We have been at Stratford for over 50 years. These opportunities across multiple state-of-the-art technologies could well secure it for the next century. Stratford has existing high-capacity fiber connections, transmission capacity, onsite firming, and a wonderfully skilled workforce. It has all the ingredients for success.

We have 500 megawatts of consented battery development and a large-scale solar hybrid battery development currently in the consenting process, and we have an existing footprint with adjacent land under option. We have chosen to partner with CDC, one of Australasia's largest data center developers and operators. They bring incredible expertise in data center development, construction operations, and customer connectivity and capability. They also bring their proprietary closed-loop cooling system that enables exceptionally low ongoing water consumption. They have strong ties already to this country, both through their operations and through local ownership by Infratil. I do want to be clear that no decision has been made to construct the facility, and no material capital commitment has been made. The project remains in early stage and is subject to customer commitments, consenting, project-level financing arrangements, and final investment decisions.

Looking at the year ahead, where you will see Contact already making strides, big strides, on its Contact31 strategy. We will deliver on the initial milestones laid out when we released the strategy last November, and we will continue to work with customers to advance our active data center and electrification opportunities, accelerating the strategy and bringing forward more renewable generation for this country. I have huge aspirations for this country and the part that the renewable energy economy can and must play in creating jobs for our children and grandchildren, in building regional communities, powering manufacturing, attracting new industry and technologies, and growing the country's export earnings and therefore its wealth. We have a clear strategy, a strong balance sheet, and proven execution capability to see us lead New Zealand's renewable energy future.

With that, I am delighted to take questions.

[Operator Instructions] With that, we'll go to our first question from Vignesh Nair at UBS.

Thank you for the very thorough presentation. First, a couple of questions, I suppose, on the data center deal, and I understand it's early days, but keen for a pretty high-level read from you guys at this stage. Just probably to begin with, do you have a view on what it could cost to build out a DC of this scale in New Zealand? If you look at CDC's assets in Australia, the average cost is around about AUD 15 million a megawatt. I think a few industry people have mentioned that New Zealand has a slight premium against that given the seismic considerations. Wondering what style of cost we can expect from an asset of this size.

Matt, maybe you want to?

Yes, those international benchmarks sound about right. Because this is a regional facility in New Zealand, we haven't built data centers before. You could expect a slight premium on that cost. Going the other way, New Zealand has got other features, including cooling costs and renewable energy costs, which are lower than international jurisdictions, and that's what makes it such an appealing proposition.

Okay. Extending that a little bit further, if you do take the Australian benchmark at 250 megawatts, you kind of get to a potential CapEx of close to $4.5 billion to $5 billion worth of overall spend. I know you sort of mentioned in footnote 4 on page 2 of the release that you might be contributing equity towards it in an off-balance sheet sort of project finance structure. Just keen to know if there's a potential upper limit in terms of the equity investment that you guys are willing to contribute to the project.

Yes, Vignesh. The upper limit would be 50-50 from our perspective because we would require this to be financed at the project level. We have a range of scenarios which we've tested with our credit rating agencies to see whether we could support an investment up to that scale on our balance sheet. Clearly, any decision around any equity investments would be highly dependent on the economics of the project, the certainty around the CapEx, the customer credit quality, which is incredibly important not only from a data center payment perspective, but also to give us the confidence to invest in more renewable growth. We've run to ground many different scenarios, and we're confident that as we step through the details and the risk allocation, that we're well-placed.

Okay. Just finally on the data center piece, any color on, I suppose, timing? That's kind of obviously been absent from the release. Is it fair to assume it's this decade?

This decade is not a bad assumption. Obviously, there's a lot of mahi still to come. We have to get a resource consent. We have to get a customer. We have to complete the concept and detail design. There's a bit of hard mahi to go, so that's not a bad assumption.

That's very clear. I suppose just on a couple of other things, I think, that battery from Glenbrook 1 sort of began operations earlier this year. Just any specific learnings to comment on there? Understandably probably a less than ideal wholesale price environment from an arbitrage perspective. But sort of what are your observations?

We're learning every day and adjusting the models every day. You saw the value of that battery last week, where the combination of batteries in the market got the market through a record high demand with almost 1,000 megawatts of conventional generation out of the market with TCC, E3P, and Huntly unit former not in the market. So one, it's valuable. We're learning every day about how to integrate the operation of the battery with our existing peaking plant in particular. We're delighted with the operation of the battery and particularly these last 2 weeks.

Okay. Last one before I pass it on. I think Matt mentioned 420 gigawatt hours worth of lost load from Wairakei. I think you've got 320 gigawatt hours net on slide 43 there. What's the timing of that turnaround? Does that begin in 1H or is it entirely 2H skewed?

Yes, predominantly 2H activity there, Vignesh. Obviously dependent on a number of different moving pieces, including the, you know, Te Mihi 2 project, the Wairakei extension project, as well as market conditions at the time. Yes, we're optimizing all those 3 sort of topics. As you would've seen, we're already highly contracted, the key swing for this year will be hydrology and the management of those outages.

We'll now move to Andrew Harvey-Green from Forsyth Barr.

A couple of questions from me. First of all, just following on the CDC side of things, is this, at this stage, very much a project-specific relationship, or you're looking at potentially a longer-term relationship here?

The answer is all of the above. Obviously, the clear and incisive focus is on getting that initial project off the ground. If that leads to a longer-term relationship, that's a wonderful outcome, but let's keep the focus on the game in front of us.

Okay. All good. Okay. Next question I just had was, I guess thinking about the impacts of the lower ASX futures prices, that's probably the sort of the biggest talking point in some ways over the last 6 months. First of all, are you able to sort of talk to a little bit what sort of impact we might expect for FY '28, FY '29? Noting there isn't a huge impact in FY '27, as things reprice, we would expect a bit of a headwind. Are you able to give us a bit of color on that?

Obviously, the sort of impacts of ASX pricing on FY '28 and FY '29 are highly dependent on how those ASX prices hold up or not over the next few years. Obviously, when you think about the 12 terawatt-hours of generation that we contract, we only have around 4 terawatt-hours that is linked to ASX or those short-term channels, including C&I, sort of roll off on those is probably a third a year. It's probably not as impactful as you can imagine, I guess talks to that strategy that we've had around terming out our book.

Then thinking about the FY '31 goals that you had in the November strategy day, that was $1.2 billion to $1.3 billion, with a run rate $100 million higher than that at the end of that. You still feel comfortable with those particular targets given the drop we've seen?

Absolutely.

Absolutely. Just to echo Mike, I guess, our targets were always based on a reversion to 120-130 real from the ASX, and the ASX is broadly tracking in line with that. The key sort of swing factor on us achieving those targets, Andrew, is really on the demand side. If we continue to be as successful as we have been on initiating new demand into the market, then we're very confident on those targets. If we can get this Stratford data center site up and running, I think that would be enhancement on that FY '31 set of targets.

Yes. That makes sense. Just lastly from me, just around the gas situation and looking at your gas book, noting you still have reasonable volumes coming from Pohokura, how confident are you of those volumes actually being delivered over the next 5 years or so?

I think we've all learned our lesson. We've built resilience into our gas supply book. We are reasonably confident that both the volumes from Pohokura and the contracted gas volumes that we acquired from Greymouth have good, robust operating performance to back them. Yes, we're reasonably confident in that.

Of the 10 PJs approximately, only 30% or so is from Pohokura, which is the variable pay as delivered. Greymouth is a flat contract.

We'll move now to Grant Swanepoel from Jarden.

First question just on hydro. You guys did just over 5,000 gigawatt hours in FY '26. You had set yourself a target of 5,750 gigawatt hours. Everybody else beat their average, while you guys didn't. Is that something to do with the way you dispatched Manawa? How do we have confidence that you're going to do the 5,850 normalized into FY '27?

Yes. Great question, Grant. I'll give you the 2-second summary. On the Contact assets, obviously, our assets are further down to the bottom of the South Island, so when we had those mega inflows over spring and summer, prices were $0 anyway. We couldn't have actually got any more generation out. Meridian sort of stepped into the fold there. There was quite a significant amount of spill through that period. I think from memory, Otahuhu prices for January were $2, so it wasn't really something that sort of impacted performance but did impact the volume numbers. On Manawa, there was less generated at Manawa throughout this year. Two factors there. Firstly, wholesale prices have been very low coming into winter, so we're coming into FY '27 with higher storage lakes.

The second point, as Mike mentioned, a couple of the larger Manawa assets had extended outages over this period. That's most notably Coleridge and Highbank. Once we can get those assets back into service, you'll see an improved hydro output. Clearly, this year hasn't been impactful because of the fuel situation, but clearly getting up to those capacity factors is incredibly important, even more so as those big geothermal outages come into view.

Next question just on pricing through your channels, following on from Andrew's question. Your CFD book is more shorter term, and you've got almost 20%, 25% of your channel through the shorter term CFD. Are you comfortable with that sort of position going into '28, '29, particularly with the forward curve and the potential overbuild relative to lack of demand in the short term?

Yes, it's there or thereabouts. As I said, I think 25% to 35% of the total book more leveraged to those shorter term channels. Remember, analysts were asking us why we went to 110% leverage to those short-term channels when prices were high. Also just a key point to note in our CFD channels is a large proportion of that is the Mercury CFD sold as part of the Trustpower retail acquisition, which reprices over a 2-year period and is more heavily weighted to winter pricing when those prices are still robust. It's the summer pricing, as we've mentioned previously, where the sort of key impacts and changes and challenges are.

That's helpful, Matt. Then on data centers, your 50-50 maximum exposure to equity in that business just surprises me. Your decision to potentially go into data center equity ownership, is that driven by CDC wanting you to have skin in the game, or is that your board saying, "Actually, I want to be in data centers"?

No. It's the value that's inherent in that Stratford site with you have a very high capacity connection available, you actually have a 400 MVA transformer available. You have land available, you have the electrical infrastructure available, in order that that package delivers value to our shareholders, that's where we landed. It's a very unique site, it also has wonderful fiber connectivity. It's about getting the value out of that site.

In effect, what you're saying, you want a discounted entry into a big data center.

There would be no payment, Grant. This would be a sort of organic growth into the data center site. It's the Stratford site and the speed to market that is unique to Contact and CDC to deliver those projects within the time frames that customers are currently searching for. It's an undersupplied market in the data centers, this is a unique opportunity for Contact, because power and speed to market is the most crucial thing that we're hearing.

Sorry, I need to get to the bottom of this. As a Contact investor, I don't have to worry too much that you're going to be taking on too much data center risk.....

Absolutely.

We can actually get that exposure elsewhere if we wanted to.

Yes. No, absolutely.

Correct, Grant. That's why sort of all partnership and investment options on the table. We'd want to understand the relative economics, what the customer is going to deliver to the project from a credit perspective, how long they're going to be around for, and we want to sort of be molding into that decision.

My final question, excellent news on the Potline 4 that you guys have more or less got the front running on that. What worries me, you got 1.2 TWh in the wind project and only 400 gigawatt hours in this sort of load side. How can we be sure that you will stick to your word that you'll make sure you've got backing before you go and build a big wind farm like that?

I mean, look, it's not just the smelter. The smelter is part of that equation. It's obviously the data center story as well. It's also the other sources of demand growth and the further conversion of dairy. As we said throughout the presentation, the key to unlocking those renewable development options is the demand side effort that we put in. We will stick to our word.

We're going to move to Joshua Dale from Craigs Investment Partners.

I'm looking at your EBITDAF target for FY '31 from your Capital Markets Day. $1.2 billion to $1.3 billion. The Manawa block in there had a $96 million total contribution, but that assumed ASX pricing of $160 per megawatt hour, which is probably not the case now that futures have fallen 30%. It seemed to be the block that was the odd one out, and that the pricing assumption on it was more aggressive than the other blocks building up to that FY '31 target. Would that not suggest some pressure on those FY '31 targets?

Look, Matt can answer that. No.

Yes, no. What we're showing is that the FY '27 movement on FY '26 is up by $84 million. That reflects the fact that ASX pricing is higher than our long run average for that portion of the contract that has been locked in, with Mercury for next year. The reason the $92 reflects the long run estimation of wholesale prices, that's $115 million to $125 million. The reason why we are getting more next year is because the hydro generation volumes are normalizing from about 1.5 terawatt hours that we delivered in FY '26 up to more like 1.9 terawatt hours, which is the benefits of having all of those enhancement projects back online and hydrology improvements.

In the near term, yes, we're over-earning on that contract versus long run estimates because of where the wholesale prices have been, and that Mercury NZ contract has been progressively repricing for the last 2.5 years. Our targets all reflect a reversion to a balanced market.

Right. Okay. Perhaps I'll dig into that offline. As a second question, on Slide 22 in your FY '27 EBITDAF guidance buildup, you have $12 million of SaaS implementation costs in there. How do you know what that will be if you haven't selected a software vendor yet? Are you actually quite progressed on that front?

We're reasonably progressed on that front. The future retail platform, getting that to the right customer platform is critically important, and the teams of the retail and technology teams have made some good progress on that.

The quantum and the timing, you're right, is clearly dependent on whether we go to final investment decision or not. We just thought it appropriate to put our best estimate of where we're at within the process today so that the models can assume that that'll be coming through OpEx as opposed to standard business CapEx, and muddy the waters on our productivity program, which is delivering good value.

Yes, makes sense. I appreciate you're looking to sign this off over the next 12 months. Are you thinking sooner rather than later, or perhaps later in the year, or any indication of that?

It'll be sometime during calendar '27. The timing's yet to be determined.

Yes. Obviously, there's not only the work to really get an understanding of the implementation timelines, the risks associated with it, and the benefits that we're going to achieve, but we need to keep our eye on the regulatory environment and carefully manage any investment expenditure which could not deliver for Contact shareholders through potential other political machinations.

Got it. Final one, the data center at Taranaki. I was interested to read there might be a demand response type component to that. Are you able to give me any indication as to what that might look like? And....

Not at this stage. Obviously, data center load, depending on the load, has a certain amount of variability, and I think it's important that you are able to manage that variability through might be batteries, might be various other syncons and the like. When that variability is not being used for the data center, you're then able to deploy that back in the market, and that's the extent of the thinking around that.

We'll move to one more set of questions. Stephen Hudson from Macquarie, over to you.

Hey, just a couple from me. Just on the retail tariffs, I know it's a sensitive issue, as you explained, the $171 per megawatt hour that you've penciled in for FY '27 versus the roughly $125 long-dated futures in the North Island, can you give us a bit of a feel for -- so that's a 37% differential. Can you give us a bit of a feel for what the shape and location uplift on a time-weighted price is? Based on what you can see of your portfolio, just so we can square some of the earlier questions around downside risks.

Yes, great question, Stephen. When we're thinking of $120 per megawatt hour at Otahuhu, when you think about the fact that 2/3 of customer electricity is in winter prices are clearly higher than summer prices. Customer use more electricity in the peak periods, morning and evening. Customers are not all Thank goodness living in Auckland, that sort of adds a $10 to $15 per megawatt hour, premium over your $120. Remember, you also need to recover your operating costs associated with the retail channel, $78 million over our volume is about $27 a megawatt hour. When you add in the margins needed to support things like our future retail platform of around 5%, which is pretty small when you consider the risks taken within that business, you're sort of broadly up at the $155 to $165 per megawatt hour mark.

We're not expecting large changes in that retail channel. You would've known for the last 6 years, we've been very moderate around how we've recovered those energy prices, that's just a function of the way that we manage retail as a long-term channel. It doesn't go up as fast and, any big shifts like we've seen over the last 6 months sort of are not as impacted.

Just a quick question on LNG, maybe for Mike or for you, or Shelley, just what you're seeing as the probability that that will be part of our dry year energy swing source? And without loading the question too much, what are the 30 PJ of industrial demand going to do if it doesn't transpire?

I think that's why the thing with LNG is that I think there are other ways to manage dry year risk, primarily, but it's important those gas users who are finding it difficult to convert off gas, that we continue to look after them because they do make a significant contribution to the broader economy. The answer on LNG is yes, as a country, we need to give it serious consideration, but we also need to convert those gas users who can convert to electricity as quickly as possible. We possibly need to increase the coal stockpile at Huntly. We need to look at potentially increasing the diesel strategic reserve of the country, and we need to look at increased hydro operating ranges. As part of that mix, with the continued decline of upstream gas supply, LNG has to be given also serious consideration.

Mike, the probability that it does actually get off the ground this year?

That's dependent. Look, like any investment decision, it's dependent on what the assessed cost is. It should be developed as a robust and economic project. If we can make sure that it is right-sized and right-specced, it's probably got a reasonably good chance of getting off the ground. If it's gold-plated, it's the wrong thing for the nation.

Okay. Just a question on the CDC announcement. Well, maybe a couple of questions. Firstly, it looks as if it's a 350-megawatt built project that you're buying up. Can I just clarify that?

Yes. It's 250.....

And....

250 output, 350 input.

Yes. Were you hinting that actually it could be larger than that given your infrastructure -- your existing infrastructure there?

No, no. We're saying that's what we're focused on today. There is capacity potentially for more, but no, our focus is on that one data center and getting that off the ground.

Sorry, what's the envelope given your grid connection?

Well, the grid connection is 400 megawatts, 400 MVA, which is the existing transformer there for TCC. I think the maximum capacity at the site is 600 megawatts or in that order before grid upgrades are required.

Yes. Okay. That's exciting. Is there a sort of Presumably there is actually a U.S. hyperscaler or an Anthropic that's actually put some megawatts of demand in front of you and CDC.......

We can't obviously......

This is not prospective.....

We can't discuss any of those conversations. It's fair to say that, we were on an international tour recently, promoting New Zealand as a data center destination, and we were right up there with the Nordic countries in terms of the attractiveness of New Zealand. We have the renewable energy, we have the cooler climate, we have a strong pro-investment market, and we have the digital connectivity. Like Norway and the rest of Scandinavia and Iceland, we are right there at the top of the pecking order in terms of attractiveness for a data center, a renewable energy powered data center.

Well, I guess you're also not within a 2,500 kilometer missile range of Tehran as well, which has been the other sort of big driver of demand.

Outside the range of any known [indiscernible] drones as well.

Yes. Just in terms of what leverage meant, your kind of assumption you're running under your scenarios is sort of a 7x stabilized debt-to-EBITDA number kind of something that we could use, do you think realistically?

That's probably sort of a little on the high side, Stephen. Our existing sort of business, as you know, attracts a sort of 3x net debt-to-EBITDA ceiling for our triple B investment grade. That will continue to be our target. You do get a different dispensation for data center revenues because of the relative stability, the long-term nature of those contracts. That's more sort of like 5x net debt to EBITDA. The sort of relative proportion of earnings from any potential data center would be sort of included within that calculation to give us a more favorable net debt-to-EBITDA metric within our existing measures. Obviously all that to be worked through, and we know that we can do it. It's now about securing sort of all the risk questions, which are clearly going to be important as we work our way through the project.

Yes. Okay. That's useful. Sorry, last one. You talked about an upper limit of 50-50. It's obviously a bit of a silly question, but presumably you would then entertain something like a 10% or 25% stake as well. To put your foot on the action.

Yes. We'll firm that up over the coming months, but yes.

That's us for questions, so we'll close the meeting. Thank you to everybody for joining online.

Thank you.

[Foreign Language] Hello and welcome to Contact's Interim Results presentation for FY '26. We're going to start by reflecting on highlights from the first half and we'll take you through the financial results. We'll then move onto a separate presentation on the $525 million equity raise announced this morning. And then we'll open for question and answers when both presentations have been made. We won't stop at the end of the results section.

Turn to Page 4. First half of FY '26 was transformational for Contact. We completed the Manawa acquisition on the 11th of July 2025, welcoming the Manawa staff and assets to the fold. Integration has since progressed very well and we've secured more than 80% of the announced cost synergies in the first 6 months of ownership, that is on a run rate basis.

Manawa hydro and renewable PPAs increased our renewable generation in the first half by 1.3 terawatt hours. And we generated 0.2 terawatt hours through our new Te Huka 3 geothermal power station. What that meant is that generation was 97% renewable in the first half '26, up from 89% in first half 2025.

EBITDAF was also up 24% to $500 million as a result of the Manawa acquisition and our renewable investments. Profit was up 44% and the Board declared a dividend of $0.16 per share, consistent with our indication of $0.40 per share total dividend for FY '26.

We continue to deliver for our customers. We started supplying electricity to New Zealand Steel's new electric arc furnace in December last year. We've also secured the all of government gas contract and are now supplying 2 petajoules of gas to support critical infrastructure and community assets throughout New Zealand. We continue to support our retail customers through innovative products like the time of use Good Plans, with more than 150,000 customers now choosing discounted or free off-peak power.

Moving to Page 5 on to the market. We've seen significant hydro inflows across New Zealand in the first half with inflows at 128% of mean leading to lower spot prices for electricity. As a result, generation was more than 90% renewable across the market and hydro storage lakes filled up, with national storage ending the period at 128% of mean. Hydro storage together with gas storage at AGS being nearly full, and the Genesis stockpile replenished, has put the market in a very good position going into winter 2026 with reducing fueling risk.

Gas scarcity remains a key issue with production down 16% in the first quarter of the financial year compared to the same period a year before. We're seeing an uptick in demand coming through. Demand was up 4% in first half '26, or 1% when normalized for the dry response of NZ Aluminium Smelters, which was activated in the dry conditions of first half 2025 if you remember. Lines costs stepped up significantly from the 1st of April 2025. As this is a pass-through cost to customers, this has created upward pressure on overall electricity tariffs across the market.

On project execution, our renewable build program is tracking well. Contact has 1.1 terawatt hours of renewable generation and 100 megawatts of battery capacity currently under construction. Construction is complete on the Glenbrook-Ohurua battery and transfer and system integration is nearing completion as commissioning continues. Commissioning actually began in early February and we expect the battery online around about the end of March.

At Te Mihi Stage 2, site construction by the EPC contractor is progressing to schedule with cooling towers on site and supporting civils complete. Kowhai Park, which is being built through our JV with Lightsource bp, over 50% of solar panels have been installed. We expect to have the solar farm online around the end of June.

Putting this together with our recently completed geothermal builds, Tauhara and Te Huka 3, we have maintained a continuous build program since 2021. This has led to a continuity of our major project expertise, key staff, suppliers, contractors, setting us up well as we continue with our renewable build plans on the Contact31 strategy.

Looking ahead, we have better clarity across the key market risks, giving us confidence to invest in line with our strategy. With New Zealand Aluminium Smelters now on a long-term contract which includes demand response, and the HFO now in place, the market is in a much better place to manage a dry year risk and support security of supply through the energy transition.

We saw a measured response from the government alongside the release of the Frontier report in October. The review found that the current market design and the rules are working well to facilitate market entry and investment in generation. The industry commissioned an extensive report themselves on the sector from BCG which was published in November. It shows that we are developing renewable generation at the fastest rate in New Zealand history, and that the market challenges we are seeing are largely due to the rapid decline in the gas market.

We expect to see resolution on further key market topics this year including the all of government energy procurement, LNG infrastructure and RMA reform, which there have already been announcements on. As always, the electricity sector is likely to be a focus in an election year. This is not new. However, we expect at least the mainstream parties to draw from the government led review and the BCG report to understand industry challenges and the investment required now and going forward.

And with that, I'll hand over to Matt to take you through the results.

Thanks Mike. Kia ora, my name is Matt Forbes and I'm pleased to present Contact's 1 half '26 financial results. This half was defined by delivery. Good financial performance, the successful integration of Manawa Energy and continued progress across our renewable development program. This result reflects the deliberate choices we have made to reposition the business for larger scale, improved earnings quality, and lower risk, leaving us well placed for the next phase of growth under our Contact31 strategy.

Before turning to the detail, I'll step through 3 key themes from the first half. The first key theme was the acquisition of Manawa. The $2 billion acquisition completed on the 11th of July 2025 and has already contributed as expected. Adding capability and scale, improving earnings quality and materially reducing portfolio risk from day 1.

On an annualized basis, Manawa adds 1.9 terawatt hours of low cost, long life hydro generation and exposure to contracted renewable supply PPAs. This structurally reduces our exposure to Clutha hydro volatility, the gas market uncertainty that we faced, and aging thermal assets. Importantly, Manawa increases our expected earnings while reducing the level of overall risk. And underpinned by the early delivery of the cost synergies, with the majority already secured within the first 6 months.

The second theme for the results is our sales discipline. The long-term PPAs with major counterparties were fully emplaced. The new supply to New Zealand Steel commenced and we benefited from the fixed price Mercury contract acquired with Manawa. These long-dated inflation protected arrangements now underpin a meaningful proportion of forecast generation. They improve our earnings visibility and cash flow confidence while continuing to invest in new renewable capacity. And so our approach to strategy channel management remains really deliberate. We prioritizing channels for stability and generation shape, while retaining some market exposure to ASX or market linked pricing.

The third theme in the results is our operational delivery. Te Huka 3 was online in the period and has consistently generated above its business case. Planned statutory outages including at Tauhara were well managed and we strengthened our gas position, contracting an additional 7 petajoules annually from Greymouth on top of the gas from OMV. Together these actions support customers, underpin system reliability and reduce Contact's dry year risk.

Turning now to financial performance. EBITDAF for 1 half '26 was $500 million, an increase of $96 million on the prior period, driven primarily by the portfolio scale from the new geothermal generation and the Manawa acquisition. Partially offset by a normalization of pricing, which reflects the unusually stressed conditions in 1 half '25.

Renewable generation volumes increased by 1.5 terawatt hours contributing $123 million to EBITDAF versus 1 half '25. And this reflects the structural increase in geothermal output with Te Huka 3 online and the inclusion of Manawa, rather than any short-term market or hydrology effects.

Pricing was a headwind. Long-term contracted channels reduced EBITDAF by $13 million, while market linked pricing reduced EBITDAF by $37 million. Importantly, this reflects the proportion of volumes in long-dated PPA channels and the normalization from elevated 1 half '25 pricing in market linked channels.

Other income increased by $42 million driven by higher retail gas margins, Manawa income streams, insurance proceeds and the absence of the Methanex gas loss recorded last year.

Fixed operating costs increased by $68 million, primarily reflecting the inclusion of the Manawa operating cost base and time-bound transaction and integration costs.

Turning briefly to net profit, NPAT increased by $63 million driven primarily by the increase in EBITDAF. Depreciation and interest increased as expected following the Manawa acquisition, and the fair value movements were positive versus the prior period. These are noncash and do not affect underlying cash earnings.

Looking at our segment performance, this highlights the impact of the Manawa acquisition and the strength of our wholesale business alongside impressively disciplined retail execution. Wholesale EBITDAF increased by $110 million to $577 million, driven by higher renewable generation volumes and the inclusion of Manawa. As mentioned, these benefits were partially offset by lower achieved prices, reflecting the normalization of market conditions.

The retail business EBITDAF was a loss of $25 million consistent with the prior period. This is despite $79 million of network and energy cost inflation during the first half. Approximately 90% of these higher costs were recovered, reflecting the disciplined pricing and strong margin management. This is not only critical to supporting our financial performance, but underpins our confidence to fund such a large renewable growth program.

Corporate costs increased by $15 million, largely reflecting the Manawa transaction and integration costs, higher incentive costs associated with Contact's outperformance, and targeted spend to support the development of Contact31.

Starting with the wholesale business, renewable generation accounted for 97% of total output in the half, reflecting both the new geothermal capacity and the step change in portfolio mix following Manawa. Thermal generation declined to 178 gigawatt hours, which is the lowest level on record and reflected the increase in renewable generation.

This is the portfolio we've deliberately been building towards. With the addition of the long-dated fixed price PPAs acquired through Manawa, average generation costs were higher in the period, but they also enabled us to contract a significant larger portion of fixed volume. And as I mentioned, these fixed volumes support earnings certainty and reduces exposure to market volatility. And you would have seen the benefit of that during the national inflows over the last 5 months, which have seen very low wholesale prices.

Stepping back, since the launch of the Contact26 strategy in FY '21, renewable generation has increased from 81% to an expected 98% in a mean hydrological year. This is a structural transition that materially improves our portfolio resilience, asset quality and earnings quality.

Looking at our wholesale contracted revenue, this reflects the theme around strategically shifting towards longer dated fixed price channels. Strategic fixed price sales increased by 1.7 terawatt hours in the half. This was driven by the acquisition of Manawa's long-term supply agreement with Mercury, a full period of the Tauhara linked PPAs, higher NZAS volumes and a new contract with New Zealand Steel.

Pricing outcomes were as expected. Long-dated contracted prices now reflect structurally higher wholesale price levels, while short-term CFD pricing moderated as contracts rolled into a more normalized near-term market environment. Other wholesale income increased, reflecting non-electricity generation income from Manawa's hydro assets and the absence of prior period losses associated with the Methanex gas arrangements.

Moving on to trading outcomes, our performance was solid and reflects our better positioned portfolio. Total merchant generation volumes were broadly flat as we were able to hedge up the Manawa merchant volumes in the period. The improvement in location losses reflects increased North Island generation following the Manawa acquisition and additional geothermal capacity which is closer to load. And in Q2, when very low prices saw us run shorter times, it was economically more attractive to purchase from the market than generate from our own assets. This resulted in very low LWAP to GWAP spreads and improved financial outcomes overall.

Turning to the performance of our retail business. Performance in the first half reflects the strong cost recovery and disciplined execution in the face of significant input cost inflation. Retail margins were under pressure, and as noted earlier, the increases in network and transmission costs added $79 million during the first half. Despite this, strong pricing actions limited the EBITDAF impact, resulting in a loss of $25 million which was consistent with the prior period. And this outcome reflects a careful balance. One, supporting customers through a challenging economic environment. Two, maintaining the financial sustainability of our retail business. And 3, continuing to have the confidence to continue to invest in renewable generation.

Within retail, gas gross margins improved from $7 million to $15 million supported by higher sales volumes enabled by the additional supply from Greymouth. Our telco business continues to perform with connections up 16% and gross margin increasing to $8 million, while cost to serve remained well controlled. You see the multi-product offerings continuing to support our customer growth and our retention across the retail portfolio.

Moving on to other operating costs. The increase in the half largely reflects the acquisition of Manawa rather than underlying cost pressures. Operating costs increased by $60 million, primarily reflecting the Manawa operating cost base along with transaction and integration costs. General inflation contributed around $5 million, with operating cost headwinds above this driven by higher insurance, labor costs, enhanced employee benefits and the relentless march of council rates.

Importantly, we're already delivering on the expected Manawa synergies. We achieved a $7 million in-period reduction in operating costs during the half, with 80% of the synergy target achieved on a run rate basis after the first 6 months.

Under the Contact31 strategy productivity remains a core focus. In total we're targeting $38 million of operating cost savings by FY '27. That is $28 million from the Manawa synergies, which includes $13 million we expect to deliver in year within FY '26, and an additional $10 million from broader productivity initiatives in FY '27. Maintaining cost discipline across the rest of the business is essential to ensure that these productivity benefits translate fully into earnings.

Looking at cash flow which strengthened materially in the half. Operating free cash flow was up to $249 million, an increase of $111 million on the prior period, driven by higher EBITDAF and working capital outcomes. Partly offset by higher interest costs following the Manawa acquisition. Working capital was still a $68 million outflow in the first half and this reflects the timing of payments associated with the newly signed HFO fuel supply arrangements and our geothermal spares procurement. These movements are timing related and not reflective of underlying performance.

Stay in business CapEx was $59 million in the half, but with FY '26 guidance of between $170 million and $185 million we expect a heavier second half spend. Operating free cash flow conversion was 50%, in line with guidance.

For the next 2 slides I'll stay focused on the 1 half '26 performance and execution run through, with the investment decisions we've taken today and the strategic funding plan to be addressed later in the presentation.

Starting with growth capital expenditure, we see strong activity across our Te Mihi 2, JV to deliver solar at Kowhai Park, and the completion of our first battery at Glenbrook. Overall projects are tracking as expected with guidance for FY '26 growth Capex of $500 to $510 million. Again, pointing to a significant acceleration in the second half of this financial year.

Turning to the balance sheet, net debt has increased as expected, reflecting both renewable investment and the Manawa acquisition. During the period we issued a new $500 million Euro EMTN note, further diversifying our funding sources and extending our debt maturity profiles. Pro forma net debt EBITDA was 2.8x at 31 December, supported by expected earnings equity credits from our hybrid bonds, and remains well within target ranges.

Dividends for 1 half '26 is set at $0.16 per share, consistent with the prior year and in line with our dividend policy. For FY '26 we continue to target a full year dividend of $0.40 per share which represents a 3% increase on FY '25, with the interim dividend representing 40% of the full year target. The increase in absolute dividends reflects the number of shares on issue following the Manawa acquisition.

Looking ahead, our FY '26 expected reported EBITDAF is now $965 million which is an increase of $15 million on our expected reported EBITDAF we announced in August, reflecting the first half outperformance. There have been no change to second half assumptions which use mean hydro expectations and the guidance upgrade is driven entirely by delivered performance in the first half. This consistency reflects the quality of the portfolio we're now running. One that is more resilient, more predictable and better positioned to fund the next phase of renewable growth.

With that, we'll conclude the presentation of the results and I'll hand back to Mike to lead on the equity raise.

Thank you Matt. Hello again. Look, before we get into the presentation, we have to acknowledge that due to legal restrictions we are unable to discuss any details around the equity raise other than the basic terms referred to in the announcement and investor presentation released on the NZX and ASX today this morning. During this presentation we'll provide an overview of the equity raise, the use of proceeds, financial impacts and basic offer details before opening up the call to Q&A.

So we're pleased to announce today that Contact is launching a $525 million equity raising to accelerate the Contact31 strategy. As New Zealand's most diversified generator with the largest national development -- renewable development pipeline, we are well positioned to capture the large and growing New Zealand energy market opportunity. Our Contact31 strategy is focused on leading New Zealand's renewable energy future and delivering the highest value outcomes for our investors and New Zealand.

The equity raise will advance the execution of potential upsizing of renewable energy projects which would accelerate the Contact 31 strategy. The capital raised will be used to commence the pre-FID drilling on Tauhara 2 to advance steam field development and explore upsizing the target capacity from 50 megawatts to 60 to 70 megawatts. It will be used to fund our investments in the Glenbrook battery 2.0 and Glorit solar development projects.

The proceeds are also expected to enhance our ability to bring forward development pipeline opportunities which were in line with the Contact31 capital allocation framework. The equity raise is expected to reduce the first half 2026 S&P net debt to EBITDAF ratio from 2.8x to 2.3x, enhancing our ability to accelerate further development opportunities from the broad opportunity set now in front of us. The raise is structured as a fully underwritten placement of $450 million and a non-underwritten retail offer of up to $75 million, with the ability to accept oversubscriptions at Contact's discretion.

Our portfolio is well positioned in the New Zealand market. Diversified across geothermal, hydro, wind PPAs, thermal and emerging solar and battery capacity. We have the largest renewable development pipeline in New Zealand, giving us strong development optionality to meet growing demand. We are the leader in geothermal energy, operating 7 geothermal stations producing around 5 terawatt hours per annum, around 50% of New Zealand's annual geothermal generation.

In addition, we have continued to build out our self, our competitors strength in battery development through securing prime locations near growing customer bases, investing in in-house development capabilities and leveraging our complementary generation portfolio mix. This combination, a diversified portfolio, deep development optionality, and a strong track record of delivery underpins our ability to capture the growing market opportunity.

New Zealand's national energy transition is in flight and electricity demand is expected to grow by 3 to 5 5 terawatt hours by 2030, driven by electrification across data centers, dairy, transport and industry. Increasing renewable penetration is also creating greater intraday volatility, lifting the value of flexible firming solutions such as batteries and stored hydro.

Customer behaviors are also evolving. Large C&I users are seeking price certainty and residential electrification is shifting load patterns. With enhanced clarity on market fundamentals including the New Zealand Aluminium Smelter operations and winter energy security, the environment now supports long-term investment with confidence.

In this sense our Contact31 strategy was developed to play to Contact's strengths and lead New Zealand's renewable energy future. We're committed to extend our advantage New Zealand's geothermal leader, lead on new flexibility in New Zealand, build into new demand with wind and solar, and lead the energy transition at home. In that context, today's capital raising will advance the execution and potential upsizing of renewable energy projects which will -- would accelerate the Contact31 strategy. Matt.

Thanks Mike. Now over to the use of proceeds. Proceeds from this equity raise will be invested to advance the execution and potential upsizing of renewable energy projects and will continue to invest in line with the Contact31 capital allocation framework. The combination of geothermal, batteries and solar investments positions us to deliver flexible, low-cost supply as demand continues to grow.

The capital raised is expected to be invested across 3 pillars. Pillar 1. We're investing $30 million to start pre-FID drilling on Tauhara 2 to advance steamfield development and to explore options to upsize the project from 50 megawatts to 60 to 70 megawatts. Updated reservoir modeling has indicated that a plant of between 50 to 70 megawatts can be supported, compared to the original 50 megawatt plant we identified at our Investor Day. The drilling program will help confirm these modeling estimates. This investment aligns with the Contact31 strategic commitment to extend our advantage as New Zealand's geothermal leader.

In pillar 2, today we have approved investment in the Glenbrook battery 2.0 and the Glorit solar projects. We expect to invest $235 million in the Glenbrook battery on balance sheet and around $45 million to fund Contact's share of the off-balance sheet Glorit solar project. Once complete, the Glenbrook battery project will increase our battery capacity to 300 megawatts, strengthening our ability to manage market volatility, shift renewable output into higher value periods, and lead on our strategic commitment to lead on flexibility in New Zealand. The Glorit project secures 230 gigawatt hours per annum of contracted output under PPA to Contact while retaining the capital efficiency and adhering to the Contact strategy of building new demand with wind and solar.

The remaining proceeds are expected to enhance our ability to bring forward development pipeline opportunities under pillar 3. We believe that we have great optionality across our development pipeline and believe that having a greater ability to bring these accretive developments sooner if market conditions and project economics are supportive will strengthen our competitive position and support an acceleration of the Contact31 strategy. The following slides provide additional information on each of these pillars.

Geothermal generation provides an attractive, long life, base load, reliable renewable generation and is an anchor to intermittent renewable growth. Geothermal energy development and operations is a cornerstone of Contact's operational capabilities and key to our competitive strength. We are New Zealand's largest geothermal producer and have a strong track record of identifying, securing, constructing and operating geothermal opportunities. As part of the Contact31 strategy, we've outlined our targets to have an additional 250 megawatts of geothermal capacity either operational or under construction or at FID by 2031.

The updated Tauhara 2 reservoir modeling has indicated that a plant of 50 to 70 megawatts can be supported, versus the additional the 50 megawatts identified and disclosed to the market at our Investor Day. That additional 20 megawatts equates to 165 gigawatt hours per annum of output, or around $18 million of potential incremental EBITDA in FY '31 based on our long run wholesale price expectations and the indicative costs to build. This outcome would increase the expected project cost by $130 million to $150 million based on our assumed costs of $6.5 million to $7.5 million per megawatt. The $30 million drilling program that we have committed to today is expected to help confirm modeling estimates, help us to better determine the optimal capacity and plant configuration prior to final investment decision in FY '27. Our target returns for geothermal investment remain in line with the Contact31 capital allocation framework of between 10% and 12%.

Batteries will play a crucial role in the New Zealand energy system by providing important flexibility to accommodate thermal generation displacement and retirement, intermittent renewable growth and rising peak demand. As renewable penetration continues to increase, intraday volatility will grow. Batteries provide the firming and capacity required to maintain reliability of the system and to optimize value for Contact. Over time, the sources of value that we will get from a battery will evolve. Early returns are expected to come from reserves and arbitrage, but longer-term benefits include portfolio shaping, hedging flexibility and integration with our base load geothermal.

Novel battery developments for projects are created equally. Attractive battery developments are driven by a small number of factors: site proximity to load, strong grid connectivity, having experienced development partners and efficient deployment sequencing. All areas where Contact has proven development capacity. And the Glenbrook battery 2.0 has a number of these attractive attributes. It's strategically located close to the Auckland demand centers and transmission and increases the value from stored energy, enhancing GWAP capture and reduces Contact's reliance on thermal peaking.

The project has not been exposed to the recent spike in lithium prices with the lithium price fixed in December 2025. We've also been able to leverage our development experience from the first battery at Glenbrook with a replicated technology, design and contracting approach, supporting our cost and confidence in delivery. These attributes combined with the strong interest from the third party offtakers are expected to support project returns in line with our capital allocation framework. The Glenbrook battery 2.0 lifts our total battery capacity to 300 megawatts and is expected to cost $235 million, with a fully ramped EBITDAF of around $35 million to $40 million per annum.

The Contact Board is also approved investment in the Glorit solar project, subject to final funding arrangements. The project was granted consent following an appeal to the process in 2025 and the solar farm is expected to provide around 285 gigawatt hours of upper North Island generation close to load, supporting grid stability and improving Contact's GWAP. We have committed to a 15-year PPA arrangement for 80% of the generation from this project. The project's off balance sheet JV structure reduces the upfront capital requirement while preserving access to the important renewable output with a long-term PPA. The project is expected to cost $305 million, with our equity contribution estimated to be around $45 million, and achieve Contact IR in excess of our 12% target return.

Moving on to this slide on demand. Look, Contact31, we modeled 3 New Zealand electricity market demand scenarios to support the development of the strategy. The strategy and the development targets within the Contact31 assumes a disorderly decarbonization scenario, which is represented by the red line second from the bottom on the chart on the left-hand side. Any additional proceeds from the equity raise are expected to enhance our ability to bring forward development projects in our development pipeline if a more aggressive New Zealand electricity market demand scenario eventuates. We have a broad set of attractive development opportunities in front of us, beyond what is included in the Contact31 development targets. Maintaining large and diversified pipeline helps drive development efficiently and improves our ability to respond dynamically to market signals.

Onto the financial impacts from the raise. We built a balance sheet which is diversified by funding source and tenor to support financing flexibility with an attractive cost of capital. The equity raise is expected to enhance development acceleration flexibility through increase in investment capacity, with the equity raise expected to reduce 1 Half '26 S&P net debt to EBITDAF ratio from 2.8x to 2.3x. Leverage is expected to remain in our target 2.6x to 2.8x over the medium-term in line with our capital allocation framework. Our FY '31 targets remain in place, with the potential upside from the upsizing of Tauhara 2 and the acceleration of future growth opportunities drawing nearer.

Onto some details of the offer. The $525 million equity raise comprises of $450 million fully underwritten placement and a non-underwritten retail offer of $75 million. The structure has been chosen to provide almost all existing shareholders the opportunity to subscribe for at least their pro rata portion on a best efforts basis.

New shares under the placement will be issued at $8.75 per share, reflecting a 7.2% discount to the dividend adjusted last close, and a 7.9% discount to the ex-dividend adjusted 5-day VWAP. The retail offer allows eligible shareholders to apply for up to NZD 100,000 for New Zealand eligible shareholders or AUD 41,000 for those in Australia that are eligible. The retail offer will be set at the lower of the placement price and a 2.5% discount to the 5-day VWAP up to and including the last day of the retail offer period, with additional information on the retail offer will be made available once the retail offer opens on the 19th of February.

Onto the timetable. The new shares issued under the placement is expected to commence trading on the Friday 20th of February. And as mentioned, the retail offer opens on the 19th of February and due to close on Friday the 6th of March. With trading of new shares on both the NZX and the ASX expected to be Monday the 16th of March. As outlined in the NZX release, the Board has exercised its discretion to adjust the DRP strike price to be the lower of the DRP strike price calculated as per the usual DRP methodology, which is the 2% discount, and the retail offer price. The DRP strike price will be announced on 12th of March 2026 and allotment of new shares is expected to occur on the 25th of March 2026. Okay.

Look, New Zealand's ITR's is energy transition continues to create a compelling market opportunity with demand increasing in the market requiring new renewable generation and firming capacity. Contact's context is well positioned as New Zealand's most diversified generator, supported by the largest renewable development pipeline in the country. This equity raise of $525 million is expected to advance the execution and potential upsizing of renewable energy projects, which accelerate the Contact31 strategy. These investments support meaningful renewable generation growth, expanding our flexibilities and storage and positions us to deliver customer-focused solutions as demand evolves.

We anticipate making further announcements with respect to the equity raising in accordance with our NZX and ASX continuous reporting obligations in due course. We will communicate directly with investors with respect to their eligibility to participate in the equity fund raising. We really do appreciate your engagement today, and we welcome any questions. Thank you.

We'll now open to questions, starting with questions from the room and then moving to those online. [Operator Instructions] I'll open to questions from Andrew Harvey-Green for Forsyth Barr.

And I guess quite exciting with the equity raise, and I think that all makes sense. I guess my first question though is at the Investor Day there was a fairly strong impression that you were trying to get through this period without raising equity. Can you just sort of talk through what's changed in your thinking from late November through to today?

Okay. So there's a number of things there. One, the upsizing in Tauhara 2; we were talking 50 megawatts, we're now talking 60 megawatts to 70 megawatts, which in and of itself is $130 to $150 million of additional capital. Glorit and the battery have both happened faster than we anticipated. And for instance the battery, we're locking in a very sharp lithium price with Tesla. And the deal with Forest & Bird was a welcome development just before Christmas. Sort of things seemed to happen just before Christmas.

But I think more broadly, the point around -- we premised Contact 31 on the red line. And there is a reasonable potential for the black line to eventuate. And if I take you back to our last equity raising in 2021 when we raised funds for Tauhara, because we went with the equity raise, we were able to fund Te Huka 3 without a blink. And I think that ability to respond to changing market dynamics and conditions is absolutely critical going forward.

Yes, Andrew, we absolutely could have delivered the Contact31 strategy on balance sheet. We were very clear around our expected project costs and the sources and uses of that funding. That's effectively a base case. We're thinking about an expected case of outcomes, and raising this equity now gives us the ability to meet higher-than-trend outcomes, and that's why we believe it's a good opportunity for shareholders now.

And I guess kind of linked to all of that, I think at Slide 27 sort of outlines your list of projects. And I think there's 6 that you're looking at potentially getting to FID in FY '27, which feels quite ambitious. I was toting that up to be around about a $1 billion of capital assuming all the wind and solar is done off-balance sheet circa 800 megawatts of capacity plus the battery on top of that. I mean realistically, how much of that do you think you might be able to get away? And sort of -- can you sort of talk to, I guess, the size of that opportunity relative to the market?

So I think there's just stepping back. The latest suite of projects Glorit, Kowhai Park solar farm, we've been able to link to the Fonterra conversion of Fonterra. And it's fair to say that Southland Wind, the wind projects, will have that same linkage back to another discernable event on the demand side.

So the geothermal, we've built the execution muscle. They are first-class baseload projects. And the trick there is to maintain that muscle and to continue to exercise with a good healthy cadence in the running through the execution. Batteries, we'll wait and see.

Okay. Next couple of questions I have, I guess, is linked to the most recent development in the market which is the LNG announcement from last week. I mean TCC is now being decommissioned. My interpretation, I guess, is that looks like we need some more gas plant capacity to be -- if a sort -- I guess to achieve the government's goals of generating 1.5 terawatt hours over 3 months. Is that consistent with your views? And then maybe talk to a little bit around the Ahuroa storage opportunity as well.

Okay. So there -- again, let's unpack those questions. I think the question of additional gas-fired capacity, yes, we'll still have our peakers, obviously we have the diesel at Whirinaki. There is also potential opportunity with behind-the-meter gas turbines still in a variety of industrial facilities in New Zealand. Whether we need more after that is another question, mindful that you've got Todd and the Genesis assets as well.

AGS is going to be critical to the gas supply market whether it's indigenous gas or LNG, because of its ability to store gas over summer and take gas at volume to be discharged back to the market. So obviously it will play a critical role going forward with or without LNG.

And last question from me is just around the guidance upgrade, this is for you Matt. So of the $15 million, how much would you describe as structural from the first half versus just one-off related to favorable operating conditions?

No, no, that's all structural. Our hydro generation, even though national conditions were very oversupplied, was actually down year-on-year. So it reflects our geothermal capacity and the acquisition of the Manawa assets. Obviously, we're seeing really good price recovery in the retail channel, which is probably tracking slightly better than we expected. So that gives us the confidence to retain our guidance for the second half of the year, noting that market conditions are very volatile out there.

Okay. So -- but if it's all structural on the first half and you haven't changed second half assumptions, doesn't that imply we've got some structural follow-through coming through in the second half?

Well, I mean structural is known structural elements as opposed to sort of outperformance elements. These things are always - we're always looking at the mean hydrological conditions coming into the period. We don't guide on short-term changes to hydrology or short-term changes to storage. But we come well prepared into this calendar year with fuel and storage.

We'll open to questions online starting with Vignesh Nair from UBS.

Congrats on the strong results. Couple of questions first, again following from Andrew on the gen-dev pipeline. One thing I noticed was you've pushed Argyle from earliest FID FY '26 to earliest FID FY '27. Can you get a bit more color on this to begin with? Is it because the cost of smaller scale farms are just getting too high? Sort of what's driving that?

Yes. So as you'll recall we had some snafus, to use Mike's term, around the Glorit solar farm and an appeal to the consent that we achieved there. So we reprioritized the pipeline to advance Argyle up the agenda. With Glorit being a larger scale project with better returns, we have prioritized that project now that we've come free of that consenting snafu. And therefore, it was just a time and resources and attention question as opposed to an economic question, Vignesh.

Okay. Very clear. Batteries next. You mentioned the sharp lithium price, Mike. Prices have moved a fair bit in the last couple of months. Is this project confirmed today should that be read as trough battery CapEx per megawatt?

That would require me to speculate on the lithium price. It is significantly lower than our first battery and other batteries being built in the New Zealand market currently. Since then prices have spiked. So there could be a period where it represents a very sharp price. But that's not to say that lithium prices come down again. So never say never. And I think more broadly we -- our teams are continually challenging the costs of the associated works, the transformer switchgear, the civils. And so yes, I would not want to speculate on that. It is a sharp price, we're very proud of it. But the team will continue to work hard to control costs going forward.

Okay. Just last question on the gen-dev section. On Tauhara Stage 2, obviously the increase to 70 potentially megawatts, does that impact the opportunity set for Stage 3? Just keen to get more color on the size of the field.

No look, Stage 2 is about using up a fair chunk of the remaining resource consent. Stage 3 will be about -- if there is upside potential in the field, we'll need additional resource consent for the offtake. It will be about any neighboring resources as well. So we don't see it as impacting Stage 3. It's just taking the opportunity of what is available to us now given the favorable reservoir reaction.

Okay, that's understood. Sort of last question just on the broader market. You know Transpower last week talked to 700 megawatts of capacity scheduled to be out of the grid in the first half of this calendar year. Yourself and your peers are still ramping up development. Are you able to talk about I suppose the confidence on demand growth not until FY 2030 but perhaps in the next 2 to 3 years?

So yes, well, FY '30 is only 1 year out from the next 2 to 3, three so. Look, take the 3 to 5 terawatt hours which we set out in the pack as being pretty firm. But there are obviously other opportunities with further potential conversions, potential new industries, potential -- yes, there are a range of opportunities which would start to move you up towards that black curve.

Vignesh, we've been very clear, the pillar of the strategy around wind and solar is connected to demand from customers. And the Glorit solar farm that we've invested, the Kowhai Park solar farm, that is just there to meet new demand from Fonterra coming to market. So we were getting the projects prepared to be able to meet the demand from customers. This is a demand-led strategy.

We'll now take questions from Grant Swanepoel at Jarden.

First question, have you raised enough capital that we can now create the expectation that by FY '28 you can move towards that mid-payout ratio of your 4-year trading dividend?

Grant, the primary purpose for the capital raise is effectively to be able to meet the market conditions that we see ahead of us. We see them as highly conducive. We see lots of customers looking to move off of gas onto electricity. And therefore, it's around being prepared for above expectations around the Contact31 pipeline of projects.

Yes, as you mentioned when we outlined our pathway to funding those development projects on balance sheet we did have some retained earnings through that funding mix. And therefore, sort of, as demand evolves, as the projects become clearer, we'll have a clearer view as to where in that dividend payout ratio we can expect. But because of the way the projects that are coming to us are above our target returns, we want to continue to develop those projects to get better long-term outcomes for shareholders rather than just short-term dividends.

Well, can I just follow-up on that, how your Board is thinking. Why would they only raise $525 million if they still think that an 80% to 100% payout ratio is reasonable as a dividend policy and not raise enough to make sure you're into the mid part of that payout ratio?

I mean the dividend payout ratio is a function of earnings and cash flow delivered through the prior periods and therefore is relatively mechanical. There's been no discussion at the Board level about where the most appropriate target within that range is. But you know it will be set at that specific time.

Next question just on your battery growth. So you got 500 megawatts by 2031, 300 megawatts in the near-term, and you're pointing to, as is the market, to about 900 megawatts in the market by 2030. Does your modeling on batteries give you confidence that $35 million is a type of return you can make on this 200 megawatt investment? But does that presuppose that your competitors aren't going to push now to just cover their own portfolios and get past that 900 megawatts? And do you see that fall off quite quickly once you move past 900 megawatts by 2030?

I think there's a number of dynamics in there Grant. 900 megawatts was the BCG number that was put out. But remember if we end up with more demand and more intermittent wind and solar being built, then obviously as you go up towards the black curve you're going to need more batteries. And so that dynamic will continue to play out. So we do see first-mover advantage, all experience overseas is there's a significant first-mover advantage. So we're moving as quickly as we can. I can't speculate on what our competitors will be thinking. But I think the thing to hold in your mind is that there could be upside to that if that higher demand scenario comes off.

And Grant our, sort of, fundamental belief is that over the medium-term batteries will be required in the market as more intermittent renewables come online. And those batteries will have to get a return, and we believe participants will act rationally with that expectation. Now because we've got what we believe is a very low-cost battery in the context of the market and a very strong site, we think that will be protected under a number of market scenarios. But batteries are quite a useful tool in the toolkit. The sources of value from them can change through the cycles, from reserves and frequency keeping in the early stages to more arbitrage as we phase out thermal generation. And then later on, in a battery's life, it's going to be able to bring in more intermittent renewables. So from a market perspective we think this is the right asset and the portfolio benefits that we get from it are just cream on top.

Fantastic. It's really good to see that Contact has now continued this continuous performance and we don't get the old Contact of always finding some little fault somewhere along the line. Congratulations.

We'll take questions from Josh Dale at Craigs Investment Partners.

Just first 2 questions relate to the balance sheet. I think I know the answer to this but in light of wanting to accelerate development time lines, does raising capital change your thinking at all around maybe taking wind and solar developments on balance sheet even if only initially to get projects underway?

We've been delighted with -- it's not just the off-balance sheet, the capacity and capability that Lightsource bp have brought to this country and to us has been fantastic. Their supply chain management, their contractor management has been fantastic. When we go out looking for a wind partner, we're looking for something similar. Yes, we want to take the finance off balance sheet, but we're also looking for something special. We're looking for the capacity and capability to go faster, build at lower cost, make these projects more economic for all Kiwis. So it's not just about -- in short, wind will be off balance sheet initially.

And at your Investor Day given your balance sheet constraints at the time, you looked at -- you talked to looking at hybrids for equity credit. I assume that's off the table now but will still sit as an option?

No, no, hybrids are still a good source of funding. Obviously we have 2 hybrids currently issued which provides us with $475 million of total balance of which we get a 50% equity credit. Throughout the refinancing of these options, you can upsize those so you can get marginally more equity credits. As we mentioned during the Investor Day, having capacity to use those types of instruments in an unexpected downside is also valuable and useful, so potentially not as much needs to be pulled on those. But having levers across the DRP, hybrids and retained earnings, we see as very valuable because we're not trying to do less here, we're trying to do more. So the baseline is the baseline so we don't expect any less equity required.

And last question. Would the development of an LNG terminal raise the prospect of decommissioning for Whirinaki at all? Or do you have any thoughts on the future of Whirinaki in light of LNG?

No, we're very happy with Whirinaki, it serves its purpose for us in terms of a diversified portfolio both in terms of location and fuel. The LNG terminal is more about NZ Inc ensuring the resilience and security of supply for New Zealand. We have the Huntly HFO, we have the demand flex from major industries like New Zealand Aluminium Smelters. We would like to get increased operating ranges on hydros and LNG plays into that mix. I don't see it -- the problem with retiring something like Whirinaki is you take a string away and particularly for periods of stress that's not an appropriate action.

We'll take questions now from Stephen Hudson at Macquarie.

Congratulations on the result. Most of my questions have been posed, but just on the pillar 3 sort of bucket and the demand sources there, Matt, you sort of alluded to gas to electricity migrations as being the key source of demand there. I would have thought metals might be a little bit more prospective in the near-term. I just wondered if you can comment on that one.

The decline -- the conversion of gas to electricity is a key driver. Metals, obviously, there's the EAS starting up in New Zealand Steel. The smelter -- aluminum prices do appear very strong, but it would be speculation if we put a marker in the ground on that, what we are -- what we do see are the facts in front of us. And so those sources of new demand, I think we've encapsulated quite well.

Yes, Stephen, it's all the usual suspects that we'll be looking at to bring these projects forward really.

Fair enough. And just on I suppose, a longer-term horizon, just remind me, Matt, the trigger point at which the credit rating agencies would sort of force you to move any off-balance sheet PPA offtake on balance sheet. From memory, it was sort of 20% of your total generation might be a trigger point to on balance sheet.

Yes. So I don't have a specific trigger, but it does come down to sort of a few of the elements around how important the contracts are to you and your willingness to keep those as sort of off-balance sheet vehicles if they run into trouble. But we're very far away from that at the moment, Stephen. So nothing to change our strategy around the development of the solar wind projects.

Would 20% be a decent sort of threshold to keep in mind?

Yes. It seems reasonable.

Yes, okay. useful. Last one I'll sneak in just on LNG. Government would have us believe that the sort of the triangular form of the trilemma no longer exists and they can win on all 3 fronts with LNG. I guess some cynics in the market might sort of think that an improvement in sustainability and security of supply might come at the cost of higher price. Where would you be in this debate?

I think LNG is a security play. We don't see it materially altering our expectations of price and the modeling because both the Huntly HFO, the strategic coal reserve and, let's say, the smelter demand flex are priced roughly at what landed LNG would probably be dispatched. So we don't see it as a price conversation. We see it as a security conversation.

But if you were to have a conversation about price, would you be closer to $200 coal HFO or $300 LNG number?

Well, in that case, you would dispatch the coal first. I think the whole idea of LNG, it's not we're going to undercut coal and never dispatch coal. It will be something happened in the market, a very dry year, a major asset failure, we need 1.5 -- 1.2, 1.5 terawatt hours of energy for this winter and you would bring it in or the gas market has declined faster than expected and you can't fill. So it's one of those other stress factors. Yes, it's probably the best way.

Yes, you have to continue to follow the market signals that are being set for the right generation types to be built. And I think with the combination of all of those sort of backup generation, we'll be able to confidently continue to build into renewables.

No more questions from online.

Would you like to close, Mike?

Okay. Right. With that, I'll just make some concluding remarks. Thank you, everyone, for coming online today. That is appreciated. I will note that obviously, the conversations will continue with the announcements today, but it is a proud day for Contact Energy in terms of the FIDs which announced. It's a proud day for Contact Energy in terms of the transformation, which has been delivered in terms of the Manawa acquisition and the delivery of the synergy benefits. And it's a proud day for Contact Energy in terms of the confidence that we're expressing in the equity and our confidence in the New Zealand market and go forward and the investment opportunities which are emerging. Thank you again.

Good morning, all. Welcome. Before I kick off our proceedings with the karakia this morning, I firstly wanted to formally welcome everyone here today, not only on behalf of Contact, but most importantly, on behalf of mana whenua. I welcome you guys here with whakatau, and I started off my whakatau by first paying homage to our sky father, Ranginui and our earthly mother, Papatuanuku and everything in between. I then moved on to acknowledging those who have passed on before us as if it wasn't for their struggles, trials and tribulations, we wouldn't be here today.

I then moved on to acknowledging everyone in this room, and I welcome you guys here to my ancestral mountain, Tauhara Maunga that stands behind us. And also welcome you guys here to the headwaters of all [indiscernible] River. They start behind us in the valley below us and then traverse its way through the valley out in to the pristine beautiful waters of Lake Taupo. So welcome.

The karakia that I'm about to perform this morning is a karakia that recites the Whakapapa or the genealogy of geothermal energy. It then goes on to mention a few sites of significant cultural significance that lay within the Contact operational fields, particularly those that are in close proximity to the development currently underway at Te Mihi, which I believe you guys will have the opportunity at seeing later on this afternoon and your guys too. So welcome. And the karakia goes a little bit like this. [Foreign Language]

[Presentation]

[Foreign Language] That was awesome. Thank you. You will get a chance to meet later as one of our employees, but more importantly mana whenua. He's sitting there with Dom, and they will be taking around later. And just a reminder of the privilege we have, particularly in here in Taupo you will get a taste of that later. So welcome to Capital -- Contact Energy Capital Markets Day and the launch of Contact31+. We are delighted that you're able to be here with us. And sorry -- just the usual disclaimer.

Now the team today, obviously, myself, Dorian, most of these names will be familiar to you, but I do want to also emphasize, and there will be some underlying themes here. We have very quietly renewed and refreshed the leadership team of Contact in preparation for Contact31. So Dorian, who's known to all of you, obviously, has moved across to Development, Renewable Growth. Matt has very successfully led the Integration. We're going to talk about that later today. We welcome Carolyn. And so that -- and obviously, Matt Forbes stepping up into the CFO role and Tighe taking that overarching technology role. And Jan and I are still here, obviously. But that overarching process of both the stability and renewal is something that I see -- you will see repeated over the day.

So introducing Contact31, delighted to be to be presenting this to you today. It's been a lot of hard work to get here. But I do want to take just a bit of time to reflect in this part of the day on what has gone before, where Contact is today and where the New Zealand market is right now.

So look, I'm not going to spend too much on time. Contact26, it's not often a CEO gets a privilege of talking about a strategy launched 5 years ago and is not going to have a red face turning up in 5 years' time and representing it. But Contact26 has transformed us. And there's been bumps on the way that we have delivered. The market needs even more renewables and flexibility. And we at Contact are incredibly well positioned to seize that market opportunity. And most importantly and what I hope you get a sense of today is that we have a clear plan for playing into that market opportunity.

This is Contact26. And I just want to pause to reflect on where we were and where we are. We have led decarbonization over the last 5 years until, all intents and purpose, the New Zealand electricity system is on its way to being decarbonized. We have led renewable growth, and we have delivered value for our investors. You can see the plants we've constructed. You can see the fantastic work that Matt and now Carolyn are doing in the retail place where even those numbers now are out of date. We're probably at about 666,000 connections. You can see the delivery for shareholders, an incredible value in that EBITDAF growth. And you can see the shareholder returns that have been delivered. Contact26, the fundamental premises we have delivered.

We're bigger, we're cleaner, and we're stronger. We now have almost 12 terawatt hours of renewable generation across hydro, geothermal, solar, a little bit of thermal left and wind PPAs. We do expect to be over 95% renewable. We have grown the EBITDAF from $540 million in 2021, $450 million in 2020 to over $980 million we expect in this financial year. Retail numbers out of date, 666,000, and we are now from being probably the most least diversified and that's why we had the incredible thermal fleet we had to the most diversified renewable generator in the country.

Now that's us. What about the market? Look, the energy transition is leading to an increasingly volatile renewable energy supply. That's a function of wind and solar. Customer needs and behaviors are changing. They are electrifying. They're moving off gas. We actually do see the new demand coming through, long promise, now delivered. It's actually turning up. The securing of the aluminum smelter deal, but now the conversions of dairy into gas and the like have really done -- have just triggered that. And we do have better clarity on key market risk.

Now in developing the strategy, we're not assuming it's all going to be sunshine and roses. So one thing we learned from Contact26 is that there will be changes that you have to meet head on. There will be challenges, there will be difficulties. And so in preparing the strategy, Charlie, Matt and the team have done an incredible job of getting a range of scenarios, which lines up with international best practice and testing the strategy against that. And that's really important to know. So we are ready for those bumps. We are ready to pivot. And what you see today is a clear plan, but do not doubt that there is flexibility in that plan as well.

Look, the transition, the volatility, who saw that gas supply decline. It's been rapid. It's been precipitous, and it has fundamentally changed the nature of the base building blocks of our economy here in Aotearoa. There is increasing investment in renewables to meet that demand, demand growth. But what that has led to is the absolute phenomenal volatility that you now see in the market both on an intraday, but also going ahead intraseasonal and that's something that we need to explore as we go over the day.

Now everyone's electrifying. EVs are still coming. There will be flips and flops in government policy, but the fundamental driver of the rapidly declining cost of EVs means they are an inevitable part of this economy going forward. You see the committed investment to electrification by major industry players. They are not leaving New Zealand. We're sitting down and we're talking with them and we're helping them electrify. They are staying to preserve the jobs for our children and our grandchildren.

You see the good plans where we were able to move our mass market retail households onto time-of-use plans and help them participate in the energy transition. And you can see over a terawatt hour in demand response, which is now available to the market for both intraday, but also intraseasonal. It's pretty incredible. None of this was there 5 years ago across the market.

Yes, I'll put up a few of these graphs in my time, haven't I? No, but you can see it's actually 2020 and 2021 may have felt a bit empty, but you can see the kick up there. We'll take it. And we do expect that demand growth to happen and to happen rapidly now. The collapse in the gas market, the conversion of dairy processing, meat processing and general agriculture processing make that an inevitability. There is upside opportunity with the advent and rapid growth in data centers, if we can attract them here to Aotearoa, and there are other sources of industrial processing. The fact that James and the team managed to secure New Zealand Steel with that electric arc furnace is a great fill up for New Zealand and for us. And we expect the metal processing to actually increase.

All in all, combined with the electrification of every household, your households, we expect demand growth to continue to grow steadily up to FY 2030.

Finally, enough compared to 2021 when I presented the first strategy, we have a lot more clarity across key market risks. Collectively, the industry has solved the problem of the aluminum smelter with not a 10-year but a 20-year deal. The Huntly firming option in response to the slight drama last August was rapidly arrived at by industry participants and provides a further terawatt hour dry year cover, which is the right thing for the nation to ensure ironically that we can get on with that renewable build.

The government-led Frontier report was a stable outcome. And the electricity industry, we ourselves, put out our BCG report, the Energy to Grow. It's a fantastic report. I don't agree with anything in it, but that's the idea of an independent report. It's thoughtful. It's fact based. It has a plethora of data in it. And I think it's a good basis on which the industry can plan and move forward and provides a clear guiding light about what is going to happen over the coming years.

So Contact, well positioned to capture that market opportunity presented by those relatively unique dynamics. We have the most diversified existing portfolio in New Zealand market, solar, battery, geothermal builds are well underway and that suite of technologies, which we can provide, is unique to us. We also have the largest national renewable pipeline across geothermal, wind and solar, and Dorian is going to talk a lot about that today, and we welcome your questions on that, test us.

We are New Zealand's leader in geothermal operations capabilities. We have over 50% of the national geothermal generation. We have built 80% of the national geothermal output since 2015. We are the most trusted retailer in the business, over 30% lower cost to serve than our peers, which has been achieved off some pretty smart technology investments. And we have the third most loved and trusted energy brand. By the way, #1 and 2 are fighter brands, of which one doesn't exist anymore, which sort of gives you we are well ahead of the pack of our true competitors.

And so I introduced you to Contact31. I'm not going to spend a lot on time on this slide because you're going to have it repeated to you 400 or 500 times over the next 5 years. You will get to know it well just as you got to know Contact26. But we do intend to extend our advantage as New Zealand's geothermal leader. We do intend to lead on new flexibility investment in New Zealand. We do intend to build into new demand with wind, solar and geothermal, as I mentioned, and we do intend to lead the energy transition at home.

What this adds up to is we move from leading New Zealand's decarbonization to leading New Zealand's renewable energy future. It's bigger, it's broader. It's more ambitious. It's not just about decarbonizating -- the decarbonizing and electricity sector. It is a fundamental transformation and leading that transformation of renewable of energy supply to the nation.

We will do this as well, and this is important to talk this through. Empowered people and leaders, we have a fantastic set of a highly intelligent, capable people, who have the battle scars of Contact26 and are well ready to deliver on Contact31. We have fantastic relations with our stakeholders. Look, it's like family. You don't agree all the time and sometimes you do wake up in the morning at a bit of a grump, but that does not mean and that does not undermine that fundamental commitment to each other for generations to come. And that's the way we think about our relationships with our stakeholders. We're both here for the long term, and we both value that long-term nature of the relationship.

Technology has played a huge role in Contact26 behind the scenes, smart investment. We have over 80% of our interactions in digital -- in retail are digital now. We can see each individual customer down to the half hour and able to direct pricing changes and engagement and product offerings as a result of that digital smart. And we intend to invest further off that. Every investor presentation you go to will talk about Agentic AI and how much it's going to transform. We are going to do that. We're investing to it. We're doing that off a track record of delivery. We just won't talk too much about it because we have a lot to talk about, but don't doubt our commitment to the continuing transformation through technology investment in this company.

And that's very much linked to the productivity. We recognize that the cost increases that have hit the industry over these last 5 years, we have to turn and face into that challenge. That is important. And so turning into that through automation, digitization, through simplification, just making life a lot simpler for our people is going to be a key theme going forward.

So this is different. When I presented Contact26, we did not make very extensible commitment. We sort of tweaked one out about, I don't know, $700 million in FY '25, a couple of years after when we got a bit more confidence. But we are putting a poke in the ground on the site. We're putting a stake in the ground. These are the outcomes that we expect. We expect 250 megawatts of committed geothermal. And you'll have seen a few surprises in the pack that was released to date 30 hopefully. We will have 500 megawatts of battery. We will have wind. We will have solar in large amounts. We will continue to that market-leading cost to serve. We will grow our EBITDAF to $1.3 billion to $1.4 billion. We will add 300 basis points to our return on invested capital, and we will grow that dividend to over $0.50 per share.

Now at that point, I am delighted to hand over to our Chief Renewable Development Officer, Dorian Devers. Please welcome him.

Hi, everyone. Well, it's good to be back amongst this group. I've missed you all. I mean that we're going to -- we're going to start off by talking about execution. You're always only as good as the last project that you have delivered. We know we need to earn the right to invest in the next project by delivering on the last one. This is probably a little bit controversial to say this, but in some ways, the issues we've had with the construction of Tauhara have proven to be a blessing in disguise because they've really opened our eyes to what's required to operate in the construction space.

We professionalized in that area. We brought in new capability. We put in place best-in-class processes. We have a world-class major projects team that oversee the construction of all of our projects. They work in an integrated way with a development team, ensuring we really understand how mature our projects are as we work towards the final investment decision, and we understand the risk that we are taking. It now means that we really talk a common language across the whole of Contact when it comes to project delivery. And that actually goes right the way up to the board, as you'd expect. I now see it as actually being a point of difference for us, which is important when you consider the renewable development pipeline that we have in front of us.

Now I said you're only as good as the last project that you've delivered. We've delivered. And for us, that was Te Huka 3. It was delivered pretty much on time and on budget, and it's delivering a 14% internal rate of return. We also have the BESS project, so that's at Glenbrook, under construction at the moment and the Kowhai Park solar project under construction at the Christchurch Airport, and they're both going very well, and we expect them to be on time and on budget, too. It means that when you consider across Tauhara, Te Huka 3, Kowhai Park and the BESS, we would have deployed $1.4 billion of capital for a weighted average IRR of 13%. These are all growth projects, and we'll be providing a positive momentum to our return on invested capital, which Mike mentioned. Matt will be happy about that as well. That KPI has been too low for too long, and you can blame the previous CFO for that.

The other major project, which we've got going on, which you'll see today is Te Mihi 2A. We've actually renamed it Te Mihi Stage 2. We like to rename our projects at Contact. I guarantee this will be the last name change for that project. This is the partial replacement of Wairakei and that project, too, is going very well. It's not quite at the halfway mark, but it's expected to be on time and on budget, which is important [Audio Gap] development pipelines.

So we win the [indiscernible] competition, don't we, Mike? We have the biggest pipeline across renewable energy and across grid-scale batteries. We've had to tidy up some of the comparisons across the industry to being honest. We've taken our [indiscernible] components. So anything that's already been constructed, we've taken out of pipelines, anything that's considered do not have a great deal of meat on the bones, like pre-pipeline stuff or advanced options that don't have any land access agreements, all that sort of stuff. And we've done that to ours as well. So we think this is a fair consistent view of pipelines. Stepping back a bit and being a bit more modest, it's not all about the size of the pipeline. It's actually about the quality of the pipeline and an organization's ability to deliver on it.

And in terms of quality, we're very happy with our the size of our projects are relatively large, which talks to capital efficiency. The capacity factors of projects are pretty good, which talks to high-quality resources and the locations are good, which we'll talk about with batteries, which is important. But it's also important around diversification and help new projects integrate with your portfolios.

Good to see we've got more wind in our pipeline than solar because we see more sustainable long-term returns from onshore wind. I'd like to see a bit more geothermal, and we've got a plan for that, and you'll see that in the next few slides. And like everyone, we would like to see more of this stuff to be being consented. But I'm not overly worried about that. As a country, we need affordable, reliable and renewable electricity, and we will only get that through a fit-for-purpose consenting process. So I'm confident that we're going to get there as a country.

In terms of building effectively, you could say that a big development pipeline in the wrong hands is actually a liability. But as I said earlier, I now think our major project delivery is actually a point of difference for us, and therefore, you can trust us to build out this pipeline. The proof is in the pudding. If you look at our last delivered project, like I said, that went well. And we've got 3 projects going on at the moment under construction. That's unprecedented for Contact. And as I said earlier, they're all going well and in fact, 2 of them are actually very close to completion.

So talking a bit about geothermal. So we are New Zealand's leading geothermal operator and developer. You probably didn't know, but in the last 4 years, 28% of all the global investment into geothermal has happened in New Zealand. And then within New Zealand, 80% of that -- roughly 80% of that has been Contact. So you follow the money with this stuff. The more money you invest, the more you learn, the more your capability goes up, the more IP you develop. So that tells me that New Zealand is a center of excellence for geothermal. And then within New Zealand, you look no further than Contact Energy.

I'm just getting into the geothermal pillar around extending our advantage as New Zealand's geothermal leader. I'm not going to go through this slide. I'll go through some more detail that this is important. It's in here. It shows you what we're aiming for in FY '27 as a target and FY '31, and we'll be coming back to these, and we expect you guys to hold us accountable.

So geothermal is no different from other renewables. We've seen big escalations in the cost of building it over the last few years. Tauhara, if you remember back at FID, was $4 million a megawatt. Te Mihi 2A, now Te Mihi Stage 2, it was $7 million a megawatt. But in spite of those increases, as we've just talked about, we're still seeing high-quality returns coming out of our geothermal projects, and that talks to the core capability that we have.

We have a culture of incremental innovations across geothermal drilling, in particular, the geological reservoir modeling that we do, the drill bit design have now got our drilling costs down to world-class. Problem we have around geothermal is this 2 other major components of building plants. We've seen big escalations in the cost of the plant itself and the cost of the steam field. So these are our areas of focus. Steamfield has gone from costing about twice what you spend on drilling to now around 6x what you spend on drilling. So we need more innovations across procurement and design, and that will reinforce our position as a global and New Zealand's leader around geothermal.

Unfortunately, as an industry, we've got into the situation where there's only one plant OEM servicing the market pretty much. So we need to bring in more competition. That will bring costs down. And importantly, it will also increase the capacity within the market to build more geothermal. We also need more innovation across steamfield design, in particular, looking at areas to reduce steamfield pipeline costs, opportunities to challenge seismic code, look at the materials of the pipelines are made out of bearing pipelines potentially or even looking to consolidate the size of the steamfield, recognizing there'll be a trade-off there because that will consolidate all of your wells, which will likely lead to higher make-up drilling.

But these are all really exciting opportunities that we're looking at going forward, which we mean that we can sort of confidently predict that our dollar per megawatt of building geothermal will come down and be in the range that we've got on this slide. We're very good at managing our geothermal resources in a sustainable way, and that means where we see an opportunity to increase fluid consent, we'll back ourselves to take those opportunities, but to do it in the right way. We're going to continue to deepen our relationships with local EV and look for mechanisms to share benefits, and Chris will talk about some of those types of things.

I guess one of the new pieces of news that we're going to talk about today is Tauhara as a field, we now believe is bigger than we originally thought, and we're going to request up to an extra 70 megawatts of fluid consent on that field. That will mean we can build up to an extra 150 megawatts on that field going forward. Tauhara is also our highest quality geothermal field. So the returns that we get on investing into that field are the highest, so we're going to prioritize that. And our next investment is going to be a 50-megawatt plant, which we're looking to take a final investment decision on in FY '27. That's important because our renewable -- our energy system needs more baseload renewables. So speed is important, but we won't be cutting corners around our process around ensuring that we have the right maturity though, when we hit a final investment decision.

We will then build out the remaining 100 megawatts of Tauhara after we've done Te Mihi Stage 3. Now that's the final installment by the way of the replacement of Wairakei. I guess the key thing there is we're going to request an extra 20 megawatts of fluid consent. That's a very small increment on the existing consent that we have on the Wairakei field. But it's very important because it allows us to fuel a 100-megawatt power plant, which is what we want to build. When you're building geothermal, as you well know, you have to be at least 95% capacity factors to ensure that you're getting the right returns on your assets.

So what that means is we'll have incremental volume of Wairakei of 0.5 terawatt hours, and that's over and above, obviously, we're replacing the Wairakei volumes. And we've also got the 150 megawatts on Tauhara. So collectively, that's 1.7 terawatt hours of additional geothermal resource or output. It adds to the 5.2 terawatt hours that we've got to date, taking us close to 7 terawatt hours when this is complete off existing fields. Now when I joined Contact back at the end of 2018, I think we were at 3.2, 3.3. So we more than doubled our geothermal output once this is complete, which is an outstanding achievement.

Greenfield geothermal resource. So it's not as high quality as existing fields. That should go about same. If it was, they would have been developed by now. However, the innovations that I just talked about around design and procurement, we think make greenfield expansion investable. We're also looking at oil and gas drilling techniques that could be applicable to geothermal. So for example, you hear a lot about enhanced geothermal systems in the U.S., which is built on the back of oil and gas drilling techniques. Now we'll look to see if some of those could be applicable to New Zealand's more conventional geothermal fields, where you've got heat, you might have fluid, but you lack a bit of permeability, you could potentially use those techniques to remedy that situation. They'd also complement very nicely the skill set that we have in Western Energy, which is our geothermal services business. All of that stuff makes greenfield expansion more likely.

Greenfield expansions, in our view, are only viable if you overlay Contact's deep capability around drilling, and the learnings that we've got from the many kilometers of steamfield that we've developed over our last 2 projects because, as I said, to actually get these opportunities to be investable, you've really got to get the cost of the steamfield down. So we think a realistic target over this period is to look to develop a 50-megawatt opportunity.

So that's the geothermal section. So we're now into wind and solar. So with wind, we want to do it differently. There's no point just copying what others are doing. We want to create more value for Contact, for our customers and also for the communities, where we're building these wind farms. And we're going to accomplish that in 3 ways. You can see our projects on the chart are projects are a bigger scale than the projects that have historically been built in New Zealand, which drives increased capital efficiency.

We want to introduce more competition to the wind area and market. We have a similar issue in our view, in wind to what we've seen in geothermal. And we want to work with a partner and get the benefits of working with a partner and that does include off-balance sheet financing in a similar way to what we've done for solar.

I see all 3 of these topics lowering the long-run marginal cost of our projects relative to market to the point where it can stimulate new market demand with high-quality counterparties in the vicinity of where we're building our wind farms, and this has broader New Zealand benefits around economic growth, jobs and tax income. I'd see this new market volume as being an offtake to the wind farm with their creditworthiness in volumes helping underwrite the investment, but also reducing risk around market price and transmission of building a bigger wind farm. I'd also see contactors being an offtaker to this wind farm, ensuring that our growing portfolio gets access to that low LRMC electricity. And also, it will help replace some those Mercury wind PPAs as they roll off.

Also, one of the key things we look to around wind, but also any generation that we're building is making sure it's diversified. We want volumes that add to our portfolio and complement it. So we're looking for uncorrelated generation. We won't be chasing the highest capacity factor projects because they tend to be in areas where there's already a lot of generation, and therefore, the price capture rates are relatively poor.

It's good to see on the list there. We've got a few Manawa projects. When we acquired Manawa, the -- we didn't assume any value from the development pipeline. That wasn't because we thought it was bad. It was just because Contact had its own one. So now bringing these in and actually looking to build some of these projects, the NPV is now additive to our business case. I would also say what we did assume a lot of value from though was the capable people that we brought over from Manawa and they really have complemented our development team.

So the choice to win partner is going to be an important one for us, but we have a good track record here. When we entered solar as a new technology, we did it alongside Lightsource bp, and that has been very successful for us. We're going through that process at the moment. There are, of course, going to be trade-offs, different partners bring different attributes. You could go with infrastructure funds. You've got low cost of finance, but they tend to work better for projects when they are fully built and contracted. You can go with partners with development expertise, like IPPs, OEMs or EV, they tend to work better in the early stages of development. We most likely want one partner, and we want that partner to come in at the development stage. So we know this is an important decision for us that we're working through at the moment. And when we've got an update on it, we'll communicate that to the capital markets.

The other thing to mention about wind is experience because you could say, well, we haven't actually built any wind. So what sort of experience do you have around that? You've got a few PPAs in your portfolio, but that's it. We actually have a disproportion of experience. We have the roaring 40s team, wind team working exclusively for us, and they've built a lot of Meridian's wind turbines, wind farms. We've also now got, as I said, the Manawa development team around wind and solar, and they've got experience going back to Trustpower and Tilt, and we have a small but carefully formed wind team in Contact. So you bring all 3 of those groups together, which was the point of the inflation. And we actually have a very experienced wind development team, which is going to be very important for the delivery of this strategy.

So now on to solar. So our key advantage of solar is who we're partnered with. We've partnered with one of the largest and most successful IPPs in terms of Lightsource bp. We get access toward their expertise or their experience around procurement and supply chains. And this really puts us in a strong position, we think, relative to other solar developers in New Zealand.

Contact is the off-taker to our joint venture with Lightsource bp. We take at least 80% of the volume that's generated. And whilst we get the financial benefits of the high leverage that's in that joint venture, pass through to us through a relatively, what, very competitive PPA price, it does mean that we're taking more operating leverage as we have a long-term contract for a fixed real price to acquire generation into the future. So the risk around that is market price risk and overbuild of solar, for example, However, we're managing that by contracting summer-weighted load, long-term PPAs in proportion to the solar generation that we're building. And you can see on the chart there that we've already contracted enough summer-weighted load to cover the generation -- solar generation from Kowhai Park and Glorit. The other chart sort of just shows how closely aligned dairy load shape is with solar generation and why it's so important to pair those 2 things up.

The last thing I'd say on this slide is there's sort of added impetus to our solar strategy at the moment because with the decline of natural gas, any sector that can get off natural gas, we want to support that happening, not just because we want to sell them the renewable electricity, but we want to get them off natural gas because that frees up the gas for other sectors, household schools, that aren't ready to transition on to renewable electricity yet.

So our solar strategy has broader benefits than just the direct benefits to Contact Energy.

We have a pipeline of 3 terawatt hours around solar, but we're only looking to build out 1 terawatt hour through the strategic horizon. Clearly, if there's a lot more growth coming through, we'll look at that. Four projects there. It's good to see, again, another Manawa project on the list there, the Argyle project, which is already consented. As I said earlier, we're going to build into increased summer-weighted load. That's going to deliver attractive returns, but it also minimizes our market price risk. It's also worth noting that all of our solar farms will be equipped to integrate DC-coupled batteries. That's a very efficient way to add additional battery capacity to the system. And the reason is it's a solar farm and the battery can share an inverter. The inverters are a relatively high component of the capital, so there's a neat capital synergy there.

Now we would have already minimized our market price risk on our solar through the summer-weighted PPAs I mentioned, so we could run any battery for merchant, maximizing returns, which ironically are going to be highest if there is an overbuild of solar. So that provides a very neat natural hedge to our portfolio.

So now on to the flexibility section of our strategy. So we think the overall size of the BESS or grid-scale battery markets at the moment is about 900 megawatts. And that's about displacing thermal capacity that's currently used in daily flexibility. The economics of grid-scale batteries is improving because the cost of the fuel for those thermal assets is going up. We also see the size of the BESS market growing, and that's because peak demand is growing faster than overall demand that's driven by retail load. And we see grid-scale batteries as servicing that peak demand. They're also going to play an important role because with the forecast of 1.6 gigawatts of new intermittence coming online by 2030, grid-scale batteries are going to have to firm -- play a big role in firming that.

They're also very important in terms of reducing regulatory risk. They are one of the few tools that we've got as an industry to reduce prices in the short term. Remember, electricity prices are high because of the risk mitigation or risk management tools to cover dry year risk are relatively expensive. And what batteries do is by displacing the hydro and the thermal that was previously used for daily flexibility, they allow that flexibility to be used for seasonal flexibility, displacing some of those more expensive risk management tools, like Tiwai demand response and Methanex gas.

So in terms of where Contact is with its batteries, we've got 100 megawatts coming online in February 2026 at Glenbrook. Our intention is to take a FID, a final investment decision on another 200 megawatts early next year, also at Glenbrook. That will mean in 24 months' time, we'll be operating 300 megawatts of batteries in the North Island. We then have a further 700 megawatts, which are either consented or going through a consenting process at the moment.

So I guess the key question here is a Contact's point of difference? And why do we feel that we should be taking a leadership position? On that last point, I mean, being very honest, we have less flexibility than others. And therefore, we have more to gain and they have more to lose from an overbuild of BESS. So we think we should be taking a market leadership position around that.

In terms of points of difference, that strategic relationship that we've built with New Zealand Steel, which has got us access to their Glenbrook site and the ability to build 500 megawatts is so key. One of the main ways you can differentiate yourself on a grid-scale battery is getting access to a great location. And that is one of the best locations in New Zealand because it's so close to Auckland.

The other topic is the OEM partner you choose. Our first battery is going very well. It comes online, like I say, February 2026. That's with Tesla. We've had very few issues going through that process. We obviously keep an eye on what others are doing and other OEMs that are out there, and we're comfortable we pick the right one to the extent that we will use Tesla for the next battery and we will also do it at Glenbrook. So we'll get all of the learning curve benefits of that, which will lead to a more speedy implementation process and more cost-effective one.

As I said earlier, the other strategic advantage of batteries is they provide a nice natural hedge to your portfolio. If there is an overbuild of solar, and you see prices depressed in the day, which will be a good time for them to charge, obviously, and then they discharge at night when the sun comes down, driving increased value for you.

The last point is, which is very strategic. When you consider 24 months' time, 300 megawatts of grid-scale batteries operating in the North Island for Contact, we'll have 350 -- already have 350 megawatts of fast start peaking. And we've now got all of Manawa's hydro schemes in the North Island. We've actually got an equivalent of market-leading capacity, flexible capacity in the North Island. We're up there with the market leader, albeit our capacity is more expensive, but just having that amount of flexibility in the North Island is incredibly strategic going forward.

I'm going to talk a little bit here, last couple of slides, on long-term options for dry year risk. Now people talk about an energy security issue around dry year risk. I don't think we actually have an energy security issue. We have more than enough fuel to cover dry year risk. Dry year risk used to be about 5 terawatt-hours. There's been 300 megawatts of geothermal that's either become online or is coming online, which is providing baseload renewable in the winter, even in the dry year. So that 5 terawatt-hour is now well below 4, and we've sketched it out on the chart, how you would mitigate for 4 terawatt hours of dry year risk.

The problem we have as a country is the cost of those mitigations is very expensive, which is causing prices to be elevated. So what we're doing at Contact and what I think the rest of the industry is doing as well is we're trying to come up with new ways to displace some of that more expensive risk mitigations because what that will do is it reduces regulatory risk, it's good for consumers, but it also supports the economic switching into renewable electricity, which will drive more growth. Some of the things we're doing is an industry around this. You can see there's a lot of intermittence that are being built and that have already come online.

So when the sun is shining, the wind is blowing, that means the hydro operators are moving out of the way, which naturally means you would carry higher lake levels into winter. And that's good because that provides more mitigations for dry year risk.

I've talked about the benefits of grid-scale batteries that displaces hydro and thermal fuel that can now be used for seasonal flexibility and dry year cover, that's good as well. And anyone who's got an existing hydro scheme should be looking at their consent and seeing through the fast track if they can get them reconsented for more flexibility, and you hear a lot of companies talking about that, including us.

In terms of some of the more specific things that we're doing at Contact, we just signed a very long gas deal with Greymouth. It's a relatively expensive gas. It's for 7 years, and the market is in a state of flux. So there was a lot of risk with that, and we had a lot of conversations and due diligence around whether we should sign that or not. We got ourselves comfortable with it, though, because it allows us to fuel our peakers into the long term. And whilst it's expensive gas, it still produces electricity, which is very competitive to provide seasonal flexibility than some of the existing tools that are out there in the market. And that will also support lower prices as well, which is good for regulatory risk. The -- it also allows us to use that gas for our retail business, as I said earlier, to support household sectors that aren't ready to transition, which is also very important around supporting the broader energy system.

We also -- the second topic is, we're looking at ways to optimize new renewables coming on to the energy system to provide as much firmed energy as possible. So we're always looking at what technology to build, when to build it, what combinations of different technologies and where to build it because what we're trying to do is actually create more firmed electricity going on to the electricity system, but also into our portfolio. So if you're building a North Island wind farm, you then build a South Island wind farm because they're less correlated. You put some -- you build a solar farm and then you put some flexibility with the battery. Across those 4 things, you can get something that is a lot closer to baseload renewables. That's how we think about integrating what we're -- our development pipeline with our own portfolio, but it's also importantly how we think about integrating it with the energy system to create a more secure energy system for New Zealand.

The last topic is around hydro generation and flexibility. And I saw the Meridian Investor Day last week, and I was very happy that they were also talking about it because with the -- all of the intermittence that are coming online over the next 10 to 20 years, I agree with them. I think hydro has to play a role, an increased role around generation and flexibility. We're looking at it in terms of 3 tiers. The first is relatively low risk, low cost, and this is around sort of replacing old assets with more efficient ones. You were already doing this with things like the Roxburgh runners. Manawa's got a great asset enhancement program, but we can do more of that sort of stuff. Manawa has got some really smart ideas actually. They're replacing turbines now or looking to replace turbines with low flow ones, which better align to the conditions which drive big efficiency gains. So there are some exciting things that we can do in that space.

The second tier is around we've got 25 hydro schemes here that we've acquired from Manawa that haven't tended to have a lot of growth capital made available to them. I'm talking sort of tens of millions of dollars here. So when you put some money like that aside, it's amazing what type of ideas start to come out around ways in which you can create more generation output, but also more flexibility. So that's the second tier of stuff that we're looking at. And then the third tier is sort of big end of the town, that's stuff on the Clutha, and that's when you start getting into pumped hydro.

Now we're lucky that we've got Todd Mead joined us from Manawa. Todd was the Head of Generation at Manawa, was on their executive team, got an amazing CV because before that, it's development and before that, he was doing hydro in the U.S. So it's tailor-made for this role. And now he's looking at all of these different options and working out a plan as to what we should be prioritizing and what sequence we should do these in.

And actually, I should just -- I've got a few of my team here today, and it's worth them putting their hands up for me, just introducing them quickly because they're here today as subject matter experts. Hopefully, they will validate what I've just been talking about for the last half an hour.

But I'll start with Todd, do you want to put your hand up? We've got Robin Baxter. So Robin looks after our major projects team. So he deals with all of the construction. Mike Dunstall, the living legend of geothermal. So he's responsible for geothermal development for Contact. You probably know, Mike. James Flannery, another legend of the industry. He's responsible for market development. If you've got any BESS questions or even food grade CO2 questions, you can talk to him. And Paul Botha. Paul is from Roaring40s. And so if you've got any wind questions, Paul is the person to talk to.

So just to finish that, we have a high degree of ambition to lead renewable growth and flexibility for New Zealand. Critical to our success will be the strong relationships we have with our stakeholders. So that I would invite Chris Abbott, he's our Chief Corporate Affairs Officer. So he's going to put a bit of meat on the bones around our approach to that.

Thanks, Dorian, [indiscernible]. I'm Chris Abbott. I'm the Chief Corporate Affairs Officer. The Contact31 strategy, as Mike has said and will be often repeated today, is to lead New Zealand's renewable energy future. And as Dorian's kind of just run through, we're focused on extending our advantage as New Zealand's geothermal leader, leading a new flexible generation and building into new demand with wind and solar. Strong and respected relationships with our stakeholders will be absolutely key for us to achieve our ambitions, ensuring that we retain both the social license to operate and also that we can augment our existing generation infrastructure into the future.

Building on these strong foundations, the Contact31 strategy will maintain enduring trust with stakeholders. While we also uphold our environmental commitments, which I'll talk a little bit more about shortly. For that reason, we're continuing to strengthen both our capability and capacity in this area. It will be a critical enabler for the execution of our strategy.

The integration of Manawa has significantly increased the diversity and span of Contact's operations and the breadth of our stakeholders, too. We recognize the important status and contribution of tangata whenua, in particular. I mean, we're fortunate to have developed strong and solid and enduring partnerships with our EV across New Zealand. The integration of Contact in Manawa, for example, has increased our EV relationships from 6 EV to 44 EV, and we engaged today with approximately 200 [ Maori ] entities.

We've developed a comprehensive tangata whenua framework that sets out our clear approach around partnership, grounded in the Tiriti, ensuring mana whenua involvement and decision-making and cultural integrity. Its goal is to embed kaitiakitanga and trust-based relationships that support sustainable development and respect Mana. And as Dorian has spoken about, we will continue to explore opportunities with tangata whenua for new and deeper strategic relationships, investment and partnerships.

In respect to local communities and landowners, we've established an enduring relationships where we operate. These are communities in which we invest and these are the communities where our staff and our family and their families live and work. As we pursue our renewable growth aspirations under Contact31, we recognize how important it is for early and proactive community engagement is. As Mike said, we will not always get it right from every stakeholders' perspective, but we will always focus on maintaining enduring trust with stakeholders and working together for mutual benefit.

In respect to the government, our focus is to engage closely with all political parties to explain the importance of renewable generation investment and also the government policy and regulatory settings and environment that will best get us there, and we love all political parties equally.

Last week, as Mike mentioned, too, BCG released an interesting report. Mike doesn't agree with it all, but you can have a debate with him on that later. The Energy to Grow report. This shows that New Zealand is developing renewable generation at the fastest rate in New Zealand's history and Contact's $2 billion investment under Contact26 is a great example of this.

The recent market review and energy task force reflects broader concerns with the electricity market. This includes the impacts of energy hardship on household and industrial customers with recent energy cost increases, exacerbated by the faster-than-expected gas decline, impacting the wholesale market. Significant increases in distribution and transmission charges on consumer bills are also having a material impact. At the same time, businesses and critical users have struggled to contract gas as a result of the faster-than-expected diminishing gas supply.

We've been really focused as a company on responding to these challenges. For residential customers, which Carolyn will talk you through in more detail later on, we are helping householders to share their load through the good plans. And to support energy well-being, we've launched a $5 million The Good Initiative and removed impediments of those in energy hardship, such as removing disconnection and reconnection fees.

We all want the New Zealand economy to grow and businesses to not only survive, but to thrive. To support businesses in critical industries, as Dorian and Mike have spoken about, we've secured up to 10 PJ of gas that enables us to support these gas-reliant businesses. And we've also signed all of government contract, gas supply deal to support core service providers such as schools, hospitals and prisons.

As you know, the Contact26 strategy is to lead New Zealand's decarbonization, and we expect that for FY '26 generation, we'll be greater than 95% renewable, well on our way target to meet the net zero from generation activities by 2035. Our decision to acquire additional gas to support New Zealand's critical industry will increase our Scope 3 emissions in the short term. But as Dorian has talked through, we are focused and our ambition is on the demand growth opportunities that's transitioning our industries from fossil fuels to renewable electricity presents.

So we maintain a clear pathway to be net zero by 2035 in respect of our generation activities. We expect to retire the Taranaki Combined Cycle plant in the next 2 to 3 months, John, meaning Contact will no longer have thermal baseload generation in our portfolio. The complementary nature of the Contact of Manawa hydro generation assets will also deliver a significant decarbonization benefit with Contact's summer-weighted and Manawa's winter-weighted generation further reducing the need for thermal peaking. Our battery investment similarly will help optimize our portfolio and further displace thermal peaking and normal hydrological years. Today, we reinject all greenhouse gas emissions from our Te Huka geothermal plant, and we're continuing with initiatives to capture and reinject emissions from our other geothermal operations as well.

As Dorian has mentioned, we will explore options to develop and augment our hydro generation, seeking additional flexibility from existing schemes, new opportunities around brownfield, hydro and finalizing early concept pumped hydro, all with the potential to further significantly reduce thermal peaking. And where we're unable to mitigate Contact's investment in forestry partnerships will offset residual emissions.

Contact was the first company in New Zealand, first energy company in New Zealand, sorry to set science-based targets back in 2018. Our key target is to reduce absolute Scope 1 and Scope 2 emissions by 45% by 2026, which uses 2018 as a base year. This is aligned with the Paris Agreements, 1.5 degrees Celsius pathway. We expect to overachieve this target in 2026, and we're in the process of developing new and long-term science-based targets beyond 2026. We're confident that our renewable growth ambitions that Dorian talked through will directly benefit the environment. This will be delivered in many guises.

Our Contact31 investments will further reduce emissions from our portfolio. We'll also be supporting New Zealand's business and the industry to decarbonize and grow with renewable electricity. And the example discussed earlier was the agreement with New Zealand Steel to power the new electric arc furnace at Glenbrook. Practically speaking, it will cut coal use and eliminate around about 800,000 tonnes of CO2 annually, which represents approximately 1% of New Zealand's emissions. Our Contact31 ambitions will further capitalize on these type of opportunities to deliver decarbonization for New Zealand.

Investment under Contact31 will also support nature and biodiversity. Te Mihi 2 and 3 investments will end geothermal fluid being released into Waikato River. That minimizes our ecological impact, but also importantly, addresses cultural concerns.

We've got clear principles and a clear strategy to deliver on our aspired development, and I'm confident we will be able to do so. We will always engage early with stakeholders on proposed projects. We'll always undertake environmental assessments at pre-site feasibility, and we'll assess opportunities to mitigate impacts early as we progress through the consenting process. Where mitigation isn't feasible or possible, we'll also consider how we can offset the impact.

A good example of this is the Southland wind farm, which is currently in the fast track consent process for a second time. We expect the panel's decision next April. As part of that consent, we proposed a comprehensive pest eradication and fencing program. This is an example of where our investment will ultimately improve environmental and biodiversity outcomes.

We were, to put it mildly, frustrated by the decline last year of our original application under the COVID-19 Fast Track legislation. And certainly, we don't agree with what we believe is flawed analysis in the panel's decision. Ironically, this investment and the proposed steps we agreed as part of a consent was supported by Ngai Tahu, Environment Southland and the Department of Conservation, but unfortunately, not 3 panelists. Inevitably, the first panels decline has led to a further delay in cost and securing consent for this important project.

One universal truth across the country is that the current resource management legislation acts as a handbrake on both investment and infrastructure, but also it's failed to deliver improving environmental outcomes. All political parties regularly express to my concern about the constraints from today's approach to consenting. They all have different views on how to fix it.

The current government is intending to introduce draft legislation on the 8th of December. It's something to look forward to. If it's enacted, the new legislation would take effect next year, with a significant bidding down period after that.

I think what's important to note is that Contact has significant experience in resource consenting, and we continue to work effectively within the confines of whatever the current legislation instruments we may have. For example, we're on to the fourth, and we will soon be on to the fifth iteration of the Fast Track consenting regime.

We'll continue to use existing consenting pathways and capability to support growth aspirations, and we take a tailored approach according to the specific project. For example, for batteries, where we have a support of communities and the potential and visual and ecological impact is low, we'll continue to use the existing pathway, which we know well.

We're also using Fast Track legislation, which is, as I mentioned, is now on its fourth iteration to consent projects at pace and ensure that we can deliver projects at a competitive long-run marginal cost. Even in Fast Track, we'll always ensure meaningful engagement with stakeholders, which is often an offsite of concern about this legislation. It's in our long-term interest to do so, and it's also the right thing to do.

We currently have 7 projects in the Fast Track process at various stages of development. That includes, as Dorian mentioned, Southland Wind Farm, the Glorit solar farm which is unfortunately currently under appeal by Forest and Bird, the reconsent of 3 Manawa hydro schemes. And we also have 2 wind farms, courtesy of Manawa that are preapproved for application within the Fast Track Approvals Act.

So despite a challenging consenting environment, we're really confident that Contact can deliver against our development aspirations. We've got capable people, and we are building more capacity and capability for renewable development under Contact31.

So with that, I'll open it up to the floor for questions. And Dorian and I'll -- with Dorian, we'll just kind of sit up here and -- stand up here, and I think there's a microphone too.

Have any burning questions for Dorian or I?

Just a quick one. Have you guys updated your long-run wholesale price path based on, I think you had $115 million to $125 million before. And then to follow on that, the Te Mihi 2 fill-in project, how is that costing look relative to -- sorry, the new fill-in one, how is that cost looking relative to Te Mihi 2?

We have updated our price path and it's $115 million to $125 million. Yes, safe to say at 2025, so no change there. And I think that sort of aligns with what we're hearing all around the place with others as well. In terms of our Te Mihi, you're talking about Te Mihi Stage 3, the...

They'll fill-in one, the 50 megawatt...

All the Tauhara 2?

Tauhara 2.

Yes, we're working through that at the moment. It will be in the range that we're sort of indicating in the 6.5 to 7.5. Every project, Grant, as you know, will be different. It depends whether we need to drill reinjection wells, we might not, but we may. And obviously, if you happen to do that, the number of kilometers of the pipeline you're going to need to build, but also which OEM we decide to use as well because we're pretty keen to try and stoke up a bit of competition in the marketplace as well, which should be good for the project.

And we do have some of those innovations that I talked about. Some of those are sort of ready to go on new projects as well. So we're looking to overlay all of that sort of stuff into it. But it's a -- as Mike calls it a geo sprint. So we're working quickly to get it all firmed up, get all the right design done and to get a very good economic case together at the same time. So it will be a good project.

Thanks, Dorian. Shall we leave the dividend and debt questions for Matt?

Yes.

Thanks for those presentations. A couple of things for me. Just on the consenting, I guess, Contact had a couple of hiccups, it will be fair to say, over the last year. Is there anything from -- I mean, you can certainly see that there are some real challenges with the process and I guess certain parties would like to appeal things. But I guess, any learnings through that from your perspective that things that you could potentially do a little bit better going forward?

Yes. So yes, good question. So there's obviously been -- there's been 3 incidents over a reasonable period of time. So one was I mentioned the Southland wind farm, and that was a decision to decline by the panel, and we're in the process. We -- and we don't think we could have done anything different is our view, and we remain confident that we will get that. But unfortunately, we don't have confidence around the panel, and that's been reflected to us.

The second one with probably bigger learnings is in respect of Lake Hawea. So we applied under the Fast Track to have a variation in our operating range and to gain access to the cybersecurity supply additional capacity. That was done somewhat in haste and at the request of the government as it was legislating. And so you had the opportunity to put projects into the Schedule 2 of the Fast Track Act. The reality, I think, is -- and this is probably our main learning from this one is that we probably didn't take a community along with us quick enough. We can operate at pace, so we can write quite good applications, but actually, you need to take a community along with us. So that was a learning for us, and we are currently evaluating. Ultimately, the minister didn't feel comfortable in allowing it to progress to a panel. And so we are currently looking at them and reviewing that.

The third one in respect of Glorit solar farm, which is -- so we were successful and we received a panel. Ultimately, Forest and Bird 3 minutes before the closing time chose to make an appeal, and that's on appointed law. It's a technical issue. Again, so we expect that we've got a confirmed hearing in February next year. And in March, we will hopefully have a decision, and we're relatively confident on that. But I think what it really -- the key for me is how we engage meaningfully and early on it. We know for projects like Hawea, it's a very difficult ask for communities. It will be far easier for us to do nothing. And so we just got to lean into it. And that's about us engaging early and consulting early.

One other thing I'd just add on that is just making sure we've got more irons in the fire. There's a lot of stakeholders at play when you're going through a consenting process. So you can't just have one project going through the process and assume that it's going to pop out the other end consented in a timely way. So you need to make sure you've got a funnel of projects going in there so that you have a lot more certainty that you're going to have consented projects popping out the other end in a timely manner so that we can continue building. So we've done more around that, and Chris is actually putting a lot more resource into our consenting team as well, which will better enable us to do that.

And just a second question for me, a bit more detail, I guess, batteries, you're looking at 2-hour batteries or maybe going to 4 hour. And I guess the other question in there is just around where you're seeing the CapEx trends for those future projects?

Yes. At this stage, we're still looking at 2-hour batteries. They still make more sense. We're seeing no -- there's no sort of economies of scale, if you like, from sizing up to 4-hour batteries. They just cost twice as much money. So there's no benefit there.

In terms of the trends around where we're actually seeing the CapEx coming, it's coming down at a rate of knots, which is great to see. It's -- I think Meridian is one, they were the first off at sort of $1.8 million a megawatt. We then came in at sort of $1.6 million -- $1.5 million, $1.6 million. We're comfortable that the next one that we take fit on early next year will be significantly below that. So the economics are looking good. We're going to need to be smart about the second battery. It's obviously more megawatts than the first. The market has changed a bit. The reserves market is flooded at the moment, but that makes sense. I think Meridian are driving a lot of that, but that's aligned to their business case and ensuring you can get more volume across the HVDC, which we value and we benefit from as well.

But going the other way, the cost of gas has gone up significantly since our first business case. So that sort of arbitrage of prices when you charge and sell has got a lot more attractive. So overall, the economics of these things is improving in our view. And they really do support our portfolio in the North Island, so as well as being something that's incredibly valuable to the energy system.

Just a couple of questions on geothermal. It seem to be sort of 3 prizes that everybody is thinking about the super critical resource that at least GNS are getting very excited about the low to mid-temperature sort of 5 terawatt hours that Mercury have put on the table and the Northern TVZ fields that are protected at the moment and could be unlocked. What are you most excited about? Could you discuss each of those 3?

Yes. I mean we're -- super critical stuff is really interesting. I mean it's a big bet for someone like us to make. So we're happy that the government is doing it, but it's really interesting. They're looking into it. It's not a moonshot. It's an earth shot. So -- and we're supporting that alongside Mercury. I think some of the stuff that really interests us actually is what you're seeing in the U.S. around the enhanced geothermal systems and some of the technology that's coming across from oil and gas is supporting that. As I said in my presentation, those type of techniques being used on conventional fields that we have in New Zealand and I think there's definitely value we see there, making existing fields better, making sure you can access all of your consented fluid on existing fields, leveraging some of those techniques is going to be very important.

The most valuable resource is the existing fields. As I said, they're the ones that they've been developed first for a reason because they are the highest quality. And over time, as you develop a better understanding of those reservoirs like we've done with Tauhara, then pushing to get additional fluid consent. We're comfortable that the field can handle that and going about that in the right way with support from the consenting team and Chris' team and making sure you're engaging with the right stakeholders and partners around that and sharing value and things like that. That, in my mind, is going to be the best thing for us to go after in the short term, and that will deliver value across the board.

I think the greenfield stuff, I mean we talked about that. That means Mercury were talking a bit about that as well. We've got slightly different probably views around the magnitude of it. We think it is definitely worth pursuing, but we're looking at something smaller. We think something like 50 megawatts is something that we should be targeting over the next 5 years. But as I said with that, that's going to be -- that's not easy. With the price of -- the cost of steamfield going up so much, those fields aren't really investable as long as if you don't have the innovation to actually get the cost steam pipelines and things like that down. So you've got to overlay that type of approach to actually get those types of opportunities so that they hit your targeted returns.

So I'd say super critical, great, and there'll be some learnings that come out of that, but it's not for our balance sheet. The extending existing fields where you can is the most valuable thing. And if you can develop some new technologies to help doing that, brilliant. And then greenfield is probably the next cab off the rank for us. Stuart -- Steve, sorry, it's been a long time.

Just a question in terms of your linkages between demand growth and new projects. Obviously, you highlighted the sort of the 3 possible scenarios in your thinking. So I imagine this is a very similar story to what you said for '26, which is a lot of the big projects you will be gating will presumably require some proportion of sale to new electrification to underwrite them. Do you have a sort of a thought in mind in terms of the gating for FID, which projects? And I'm assuming all of those will be additional to the sort of the growth you already see baked into FY '30. Some commentary about that.

Yes. I mean we're not -- you saw our solar, what we're doing there. We're not specifically linking solar in terms of a PPA to a particular project. The counterparties that we're working with who are moving off natural gas on to renewable electricity, the timing of their projects isn't going to perfectly align with the timing of our solar projects. For example, the uncertainty around the consenting process doesn't help with that as well.

So we're trying to ensure that we get alignment at a portfolio level so that we can see the right amount of summer weighted load in our portfolio to cover our solar generation that we're building. So that's how we're working on that for solar. In terms of wind, yes, I think we'll be looking to get counterparties to support around that. As I said, when you're building bigger wind farms, there is more risk around market pricing and transmission. So therefore, it's important that you have a counterparty in the geographic vicinity of your wind farm to help reduce that risk. So that's going to be an important component of that.

I mean what that means is our Contact portfolio gets the benefits of the oversized wind and the lower LRMC as well through that because we get access to the electricity and it's at a cheaper price than we would have got if we've done it sort of on our own, if you know what I mean level. So that's how we'd approach it.

Geothermal may or may not. There's -- obviously, geothermal aligns very neatly with displacing baseload thermal, data centers. You saw we did some stuff with Microsoft. So we may look at some opportunities around that. But we're comfortable the energy system needs baseload renewables and therefore, would be comfortable building that without having an offtake PPA.

Great. And just a follow-up, confirmations on the maturity presented this morning. So we should think that batteries and geothermal definitely on balance sheet as you said, off balance sheet. Are you looking for one partner for all wind projects? Or is that one partner per project, just to be clear?

It would -- we're working through that at the moment. I'd like to think it would be one partner for more than one project, similar -- I think the -- what -- our relationship with Lightsource bp and how that's worked, I think, is a good sort of test case for us and something that we'd look to as a good example of what we're aiming for. And you'd probably look to try and do multiple projects and get a sort of programmatic approach to this, which will play into things like the dollar per megawatt you get for the wind as well if you've got a program ahead of yourself. So that's most likely where we'll end up.

Just a quick question on phasing geothermal. I think you've got a consent for 80 megawatts at Tauhara Stage 2. Just wondering what the decision behind going for 50 and then 100 layers.

It's the -- I guess it's speed. So it want to do 50 relatively quickly to support the energy system. We're still -- we're comfortable with the resource reservoir can handle 50. We do want to leave a little bit of insurance there for makeup for Tauhara if required. So that's why we're not sort of building out in short order the entire 80 that we've got available to us now. So it leaves a bit of bit more time for that.

Is there a transmission capacity constraint? And I think you're talking to that in Tauhara Stage 3, which may lift the CapEx per megawatt?

Yes, yes. Not for Tauhara 2, but Tauhara 3, that probably would be, yes.

Does that still keep the cost within the guided range of $6.5 million to $7.5 million?

We'd like to think so, but we need to work -- that's still quite a way out. So we still need to work through that.

Cool. The second question just on batteries. Talking to a couple of your peers, obviously, last week as well, they talked to a market size sort of closer to 600-odd megawatts. You seem to be a bit more positive on the outlook. Just keen to hear your thoughts on why that could be the case and what could happen if there's an overbuild?

Yes. I mean the -- as I said, I mean, we're pretty comfortable with the market size at 900 megawatts. We see it as displacing the role that thermal capacity is playing at the moment in the marketplace with daily firming. We see it's dynamic. I mean we see it growing all the time. Retail and peak demand is growing faster than overall demand. So that growth is getting to get catered for by grid scale batteries. So we're pretty comfortable that the market is sized at that at the moment.

I guess it's a little bit of a moot point because we're not going to get to 900 megawatts of batteries in the marketplace in the next couple of years. So -- and as I say, with the market growing as well, I don't think there's a huge chance of there being an overbuild. If there are -- if there is, as I said, our position is we have less flexibility than everyone else. So we benefit from an overbuild of batteries to a certain extent as well, our portfolio. So that's why we're comfortable moving this position as a leader.

Any more questions? Thanks for the questions. And thanks, Chris and Dorian.

Wairakei A and B, can you just remind us how we should think about the current output of those plants phasing out? It's always a confusing thing to model?

Yes. On sort of renewable growth, not business as usual operations. So I could -- the plan is, John, do you want to take this...

So I think the easiest way to think of Wairakei extension is we have Wairakei A, which has 311-megawatt machines in it. We'll be retiring that middle of next year, and we'll be extending the 330 megawatts units in Wairakei B and part of the Wairakei binary up until 2031. We'll be operating that somewhere from 80 to 90 megawatts depending on the fluid that is available from Te Mihi 2 once that is powered up and with the ability to flex up when we also have outages across some of our other stations. So that's the type of volume we'll be targeting out to middle of 2031 when that station will be fully retired.

Okay. Thank you. Okay. Thanks to Chris and Dorian. We're going to be switching gears now and actually changing the furniture to have a panel discussion led by Louise Wright, our Head of Communications and Reputation that will be focused on an update on our integration with Manawa. I'll let Lou make the remaining introductions.

Thank you, Shelley. [Foreign Language] I am Louise Wright or Lou Wright as everyone calls me, my friends at Contact, and I'm the Head of Communications and Reputation. Joining me here to talk about uniting our companies, the Manawa Contact story are some people who are very, very dear to their heart because they have been living and breathing it in the last few months indeed. So with me today is our Chief People Officer, Jan Bibby; our Director of Integration, Matt Bolton, who many of you may remember is our former Chief Retail Officer; and of course, our Chief Generation Officer, John Clark. Welcome.

Now this is going to be a conversational session where Jan and Matt and John will share some of their insights into the integration process. And it's been one of the most significant mergers undertaken in New Zealand in recent times. Now with these anecdotes and their insights, as I've said, it is conversational. So unfortunately, we're not going to have time for questions in this session because we are going to break for lunch. But I'd really encourage you afterwards if you do want to have a chat to this lovely trio when we've broken for food, just feel free to have some questions there.

So John, let's start with you. You're ready. Now Manawa has 25 hydro schemes across the North and the South Islands. Now some of them have been operating for some time, almost 100 years. What's been your impression of these assets?

Okay. Look, these are truly an impressive set of assets with an incredible history behind them, and they're scattered through some of the most beautiful parts of New Zealand. And I think they have the best job at Contact, where I get to boondoggle through New Zealand having a look at every dam, weird, culvert ponding canal that there is to see. But there's a beautiful elegance to how these things actually stitch together and harvest water for these schemes. But what I was actually deeply struck by was the care and custodianship that the people who are supporting and operating these assets feel towards them.

And Manawa was a professional organization. They had really good asset management processes, well aligned to ISO 55000, which meant company strategy was aligned with engineering projects, with asset maintenance and with the day-to-day operations. And the asset strategies were well matched to the value that each scheme delivers in itself.

Look, there's always room and I always like to chase ways to improve performance and safety. And it's important when bringing 2 organizations like this together that we learn from one another, that we somehow take the best that both has to offer to come out with something that is greater than the sum of the 2 halves. And a great example around that is dam safety. Manawa is and was a significant owner of dams in New Zealand and have a really robust dam safety process.

Now we're taking that on board and actually applying that to our [indiscernible] dams as well. But at the same time, we're strengthening that with our automated dam monitoring system and a very robust process safety engineering practices to get something that is actually better than what we both had previously. And that's really important because it's not always just about reliability, it's also about maintaining the trust and confidence of the communities in we operate.

And one other great thing is the proximity of the most of the Manawa sites. So within 100 kilometers of Contact's existing operational footprint, which means we can continue to collaborate, we can share resources and we can provide engineering support across those sites. And Manawa has a really robust enhancement project already underway, which is going to deliver up to 78 gigawatt hours of generation improvement through key replacements of turbines and generators, some life enhancement projects and some significant dam safety enhancements.

And there's already key project wins on the board. Manawa has delivered Matahina and Waipori, the Bream Bay restoration and significant dam safety works at Arnold and Highbank and Coleridge continue to be in flight. And these projects will deliver long-term value, both from generation uplift, reduced maintenance and enhanced reliability. So I guess, in summary, these are a really robust high-value set of assets, and there's a lot of opportunity for us in them.

Thank you. I think I can honestly say I've heard anyone talk about an engineering company is beautiful, elegant, love it. Now Matt, it's been 4 months since Manawa and Contact came to. As Integration Director, from your point of view, how has that process been going? What insights can you share? And can you update us on the promised synergies?

Yes, sure, Lou. Look, it's fair to say M&A activity is not Contact's DNA. We had -- Simply, we had Western. We kind of went quite long with Manawa, $2.6 billion. So the thought process around it didn't start on the 11th of July, clearly. We actually kicked this into action with an integration office August last year. And actually, our plan had sort of about 1,400 initiatives that we wanted to complete actually pre-close and then post-close through to Christmas this year. So a significant amount of effort, probably knocking on the door of 50-odd people at Contact working on the program at any one time to ensure that the lights stayed on, our people stayed safe, the assets keep running.

In terms of reflections of where we're at now, look, as we head into Christmas, probably 4 major topics for me as I thought about it from the 11th of July to the Christmas break. The first is people, and Jan will talk a little bit more about that shortly. But we're well through bringing the operating models together for the 2 businesses. That was critical for me and for the business. This was about a culture program, not just about the synergies, I'll acknowledge this room, but we needed to bring this business together really well to ensure we would continue to run. We're largely through that now, which is superb.

We've been able to migrate about 2,500 ICPs, the C&I business into our Simply environment now that will allow us tie to decommission their platforms and start as decommissioning work. All of those ICPs have been migrated across now. Half of them have been built out of the Simply platform, the other half from the 1st of December, and that's going incredibly well with no impact on those customers, so a significant milestone for that part of the business.

Tim is here from our trading team, but we've done a lot of work in the trading space and the commodity risk space to bring one view about the commodity risk, how we think about commodity risk and trading across the 2 portfolios. That's going exceptionally well, and I would invite you to talk to Tim over the break as well to think about how trading is going with the combined portfolio.

And then final thing for me being the retail guy is the 2 brands will come together. We've been able to give the name of Manawa back to Ngati Hangarau, but we'll bring the 2 brands together this side of Christmas. So as you -- as we come out of the January break, you will just see -- largely see Contact in the market. So some pretty significant milestones for the business there.

In terms of synergies, I know you'll be interested. Yes, we are well on track to hit the $28 million annualized run rate within the 12 to 18 months. So we're pretty comfortable that, that is happening. There's a lot of hard work there, but we're comfortable we can see the light at the end of the tunnel. John has, of course, talked about the portfolio or the asset refurb program. We feel we're pretty comfortable with the portfolio benefits and of course, the Mercury repricing into the current wholesale environment. I'm sure the math isn't too hard to see there, but we feel we'll hit that number as well. Lou?

Thank you, Matt. 1,400 initiatives. So here we go with any business acquisition, Jan, bringing 2 entities together, it's highly disruptive to the business, let alone one the size of Contact and the size of Manawa. How have you been managing this while ensuring that Contact keeps its focus on delivering what we've promised to our strategy?

Yes, there's no doubt that when someone announces a potential acquisition, everybody wants to be involved, but not everybody can, which is why we set up a dedicated integration management office, established all of the relevant work streams that we knew we needed to set up and appointed some of our really good people to lead those work streams. And that group collectively develop the plan that Matt just talked about that had about 1,400 initiatives in the program system that we were tracking to. At the same time, we constantly reinforce to the rest of the business that we don't get the right to acquire a business and integrate it unless we keep our own business as it is running and performing really well. So that was a consistent message over the months.

They probably saw some of their colleagues who were pouring a lot of hours into developing that plan and thought they were probably better off doing BAU. But there's no doubt that we just had to keep reinforcing we have to deliver our plan while we build the plan for the integration. For quite a number of months, we didn't even know whether it was going to go ahead or not.

It would be fair to say it's gone really, really well. We are on the cusp of completing the operating model change. So on the 3rd of November, we migrated 127 people across from Manawa into the Contact payroll and system, and they have subsequently been paid once. So that's gone well. And we welcome another 40 to 45 people on the 8th of December across on to the Contact system. And that pretty much leaves all of that operating model change now completed, and we had targeted to do that by the end of December. So we're well on track.

I've done -- in my career, I've led and been involved in quite a number of acquisitions. And I have to say this is probably the one that's gone the best of any I've been involved in. And I really believe that was down to 2 things. One was the absolute meticulous planning to the very last detail that we did. And two was putting the right people onto that program to plan and keeping the rest of the business running really well.

Thank you, Jan. Now Matt, Manawa is a smaller business known for focus on managing cost. So how is the new Contact going to leverage this expertise as we deliver cost and capital efficiency with Contact31?

Look, the first, I assure the room here that Contact was also pretty diligent with its cost management. And the performance in the retail business, I think, is a great example of that of investing in the right places. However, you always got to enter these things, and John mentioned earlier, you need to learn, and I think that's where Contact's culture is now. And I think the insight for me is that Manawa is a business that's had to thrive through a lot. If you go back over the last decade, go back to the sale of Tilt in 2017, you go to 2020, "Hey, let's exit a retail business." You chuck in a couple of CEOs along the way. And then Contact tipped up and said, "Hey, let's buy this one," all at the same time of keeping their lights on the business running, their people safe. It is a very diverse business with very different assets, albeit in the hydro space. So there's a bit of magic in their DNA that we were really curious about.

And what I think we're seeing so far, and John's alluded to it, Manawa does bring a different -- the team there does bring a different lens to the same problem. And we are learning all the time about how to do things slightly differently. We've had the asset management or the dam safety view there. We'll continue to see that, Lou, across the coming months. We have a number of the team, as Jan has said, coming on to the Contact team. So we're learning all the time. It's fair to say that, as I mentioned, they look at it differently. It's a good challenge point for us to embrace, and I'd like to see some 1 plus 1 equals 3 off the back of it.

Thank you, Matt. John, we've talked a lot about Contact and the portfolio benefits of bringing the hydro schemes together. But now you're operating in this combined portfolio. What have you learned? And how are these really going to show up in practice?

Okay. I think, firstly, we've just absolutely pleased and blown away at how well these 2 portfolios can stitch together. And it's not just fairy anymore, we can actually see it in the numbers. Manawa assets do have a clear North Island winter bias. It's the exact opposite of our Clutha scheme. And it's been really good to see our earnings volatility has dropped significantly.

And you only have to look at August, September really to see that where we could flex the assets around each other, where we saw wind dropping on and off. We saw thermal gas savings, and we saw the Clutha flexibility coming to the fore back by the hydro assets. So within the first few months, we have identified a way to lift earnings by about $15 million, and that's without increasing any risk, and that's absolutely awesome.

The context has also shifted a little bit since we started the due diligence around the Manawa acquisition. We've landed the Greymouth Gas deal. We have the strategic reserve at Huntly in place, and we've managed to shift a bunch of gas and electricity deals. And we see further opportunity ahead of us in fixed price sales.

So I mean, to be able to achieve that, alignment across portfolios is critical, and we've made solid progress on that front with spot market optimization with portfolio modeling and long-term channel strategy management. So the 2 trading teams have come together really well, and we now have a combined set of portfolio tools where we can test scenarios and capacity decisions under different inflow and wind conditions.

Stand-alone, both companies would have been at the risk limits. But as a combined entity, we can take on more sales without actually breaching those limits. So we are confident we can commit to further sales through winter 2026 and beyond. And trading modeling and efficient frontier analysis has shown that the combined portfolio can handle significantly more fixed price sales for exactly the same level of risk. So lower risk, greater asset diversity means we can commit to more fixed price sales to commercial and industrial customers and help insulate them from the spot market. So bottom line, the integration, look, we've delivered what we said we would, and we believe there's more to come.

More to come. Back to people, Jan. People are really critical to everything that we do in our success. And at Contact, we're renowned for our transformational ways of working and a particularly strong culture with our people. But can you tell us about your strategy across capabilities and culture for the combined business because how is this going to support the execution of Contact31?

Yes. Look, we are super proud of the culture that we've created at Contact. And it's fair to say that the Manawa team were equally proud of the culture that they had created and in particular, because they created it off the back of the Trustpower Mercury event. So they were pretty new in creating, but they're very proud of it as well. And there are many -- there's many similarities between us in terms of our culture, and there are some nuances. And I really do believe if you bring those things together into something, you can create something pretty special.

So we've kicked off a program of work to define what are the cultural attributes that we need to make sure that we can successfully achieve on our strategy. And then we've also done an assessment on what are the capabilities that will be required, both kind of the core capabilities and the critical capabilities that will be needed to achieve it. We know we have the best talent available in New Zealand working for Contact. And so if we continue to grow and inspire those people and empower them to come to work and do their very best work every day, then that will help us to ensure our success. John talked a little bit about custodianship.

The thing that I've been really amazed by is that the passion and the belief of all of our people in what they do, they care deeply for our assets, they care for our customers, our communities and most importantly, in many ways, they take the very best care of themselves and their colleagues so that they can turn up to work every day and go home every day to the things that matter most to them. I think it's a super exciting time now as we start to define the next phase. And if we can really empower and inspire our people, then we can collectively lead New Zealand's renewable energy future.

Thank you, Jan. And that's a perfect spot and a really good point to finish upon. Thank you, Jan. Thank you, Matt, and thank you, John. Now back to you, Shelley.

Thanks to our panel, and thanks to the presenters from this morning. We're now going to take a break. And for those of us watching online, we'll be on pause for the live stream, and that will resume at 12:40. And so we'll see you then.

[Break]

Good afternoon, everyone. I hope you enjoyed lunch. I'm Carolyn Luey, and I'm really excited to be here today to share with you the retail strategy and how we are going to lead the transition in the home.

Today, I will cover the highlights from Contact26, the latest market trends that have shaped our strategy, our strategic priorities and how we will transform and modernize the retail business for the future.

Over Contact26, our retail business has delivered strong performance across a number of areas. We are focused on being a trusted retail provider through initiatives like removing contracts and disconnection fees to make it simpler and easier for customers and to build trust. And more recently, we launched the Good initiative to support those that are in hardship or vulnerable in our communities.

We committed to invest $5 million this year in expanding the number of customers we can support with well-being credits and to grow our partnerships with community organizations with wraparound services so that we can continue to reach those that are really hard to connect with.

We are now a true multi-services provider with over 1/3 of our customers having electricity plus either gas, broadband or mobile with us. This delivers both better retention and growth in EBITDAF, with every additional gas, broadband and mobile connection delivering incremental margin.

We have continued to drive innovation and greater customer value in market. Our good plans that offer free or discounted off-peak power have proven to be popular with our customers with 34% of our electricity base now being on our Good plans. Our Good plan customers have higher NPS are more likely to stay and have helped us shift peak load.

We've also released 3 Flex products to enable customers to get even greater value with like water sorter, our BP out-of-home EV charging partnership, offering our customers discounted charging at selected times and our virtual power plant pilot.

We have now grown our customer connections 29% to 650,000, while also maintaining our lowest cost to serve energy retail position in market. A big driver of our improved cost to serve has been the growth of our digital channels with now 80% of interactions being managed by digital.

Over the last 5 years, we have made great progress in cementing ourselves as a truly multi-services provider in the market. So we are ready to build on these foundations and take advantage of the next opportunities on the horizon.

The retail market continues to evolve and change. Regulatory oversight is increasing. With the increased focus on energy affordability, we've seen a large increase in regulation and requirements, requiring us to give customers more choice, make it easier to compare plans and save money.

Locally, all the large Tier 1 energy retailers have invested in new technology stacks to improve customer experience and market agility. We expect that this will intensify competition and increasingly provide customers with more innovative and choice.

With the cost-of-living challenges, customers are seeking more value and actively engaging shifting their electricity consumption to save money. Many of our customers on Good plans are looking for ways to save money by taking advantage of our free power periods by turning on their dishwasher or their dryers after 9:00 p.m. or saving all of their washing for the weekends.

There is a growing segment of savvy customers who are looking to further electrify by investing in EVs, solar and batteries, giving them greater ownership and freedom over their energy usage. Agentic AI is growing every day, and we're seeing globally energy retailers are transforming their operating models and building out AI radically to change how they service their customers, while delivering more personalized experiences.

Our retail strategy is focused on leading the energy transition at home. Like our broader Contact Energy strategy, we have a role to play to support Kiwis to electrify and contribute to New Zealand's renewable energy future.

We have 3 key strategic priorities. Firstly, to attract and reward key customer energy profiles and locations and product bundles to optimize lifetime value while we're also reducing cost to serve. We will do this by building out advanced segmentation that builds on Contact's unique attributes.

The key is where we see opportunity is to win customers around our growing generation footprint across New Zealand, targeting gas users and those with a higher propensity to multiproduct customers in the future. Secondly, harnessing digital and AI technology to make every interaction easy and personal. We see an opportunity to invest in technology to deliver both a better customer experience and greater efficiency. And finally, empowering customers to shift usage to off-peak times through Demand Flex, virtual power plants and our Good plans.

Our market-leading time-of-use plans have demonstrated that customers are keen to engage in energy products where the right incentives are in place. This gives us a strong platform to build out further products to enable customers to shift usage in the future and be rewarded for it.

The key outcomes that we'll be focused on over the next 5 years is with the future retail technology stack a key enabler for our whole retail strategy, we will target to select and commence execution of a new technology stack in FY '27, with all customers live on the new platform by FY '31. We will continue to reduce cost to serve per customer, decreasing it to $90 per customer by FY '31, enabled by a new technology platform being embedded across the retail business. And finally, lifting retail Demand Flex from 10 megawatts today to 65 megawatts under management over the period as customer electrification and adoption grows.

To secure our cost-to-serve advantage, we will invest to modernize our retail technology stack. By consolidating our retail systems into a single modern retail platform, this will give us the opportunity to simplify our product portfolio and our end-to-end processes, which will enable us to leverage AI to automate and further digitalize service.

There are global examples where conversational AI has reduced wait times and average handling times. We will transform our business to operate more efficiently and build out people capabilities to harness the benefits of modern technology to remove customer pain points and enable us to resolve customer issues more efficiently.

Technology platforms are evolving rapidly over the last few years. So we have the opportunity to take advantage of these enhancements, particularly with AI being natively embedded in many of these platforms now. We will take an iterative approach to the delivery program and ensure that we're delivering value at each phase, while minimizing business disruption.

We have shifted our approach to cost to serve and taken a customer-centric approach to our cost to serve per customer calculations, so that we can align to the global benchmarks and ensure that our ambition to reduce cost to serve is best in class.

Retail Demand Flex is a key opportunity for our customers to take even greater ownership over their energy usage, while also improving Contact's load share. The overall market for Retail Flex is between 500 and 700 megawatts in New Zealand currently, with the market continuing to expand as the number of residential connections and smart devices grow and more meters are upgraded.

We have been actively expanding our Hot Water Sorter program to shift load to off-peak periods. We currently have 10 megawatts under management across 24,000 ICPs. This is creating value for our customers on time-of-use plans, and we see even greater value creation with a shift from scheduled load control to dynamic load control.

Our EV pilot on Kinergy's virtual power plant platform that uses AI to automatically charge EVs during low demand periods is providing valuable insights into how we can unlock further value for both customers and the grid. We expect that there will be continued growth of EVs, batteries and smart devices in the home, and that will expand the segment of customers looking to participate in the energy transition. This creates the opportunity to build out Flex propositions and improve Contact's load shed by reducing the demand peaks.

Contact's retail business is focused on supporting all New Zealanders through the energy transition, and we will do this by delivering an enhanced customer experience through expanding our digital and AI capabilities to create an easy and more personal experience that reduces the customer reasons to call us and time to resolve when there are issues, providing customers with ways to take even greater ownership over their energy usage that delivers value both us and them, and continuing to innovate and deliver great value through our multiproduct offering across energy, broadband and mobile, particularly supporting our gas customers through the transition as the gas supply continues to taper off.

And importantly, focusing on energy well-being by supporting those that are the most vulnerable in our communities through the good initiative. Contact's retail strategy is about leading the energy transition at home, delivering value, innovation in ways that customers can take greater ownership over their energy use. We're building a future-focused retail business that's ready to support Kiwis through the evolving energy landscape. As you can see, our strategy to lead the energy transition at home is deeply connected to our ability to leverage our tech advantage.

With that, I'll invite Tighe Wall, our Chief Technology Officer, to speak to this.

Hi, everyone. And now the part you've all been waiting for, and I'm sure traveled long and far to hear, technology.

I made a joke at dinner last night that I was going to talk for an hour about consenting, and I'd like to think that Jeremy wasn't disappointed when I told him it was actually going to be 15 minutes about tech.

So the strategy process has been really nice for us from a technology perspective to slow down for a second and take an outside-in view of what we've been up to for the last 5 years. Most of the time or historically, technology organizations talk about what they've been up to if they're having problems. We're actually doing the opposite. Things have been going quite well for us, and we've been building confidence, and you'll see some of that delivery through the Contact26 strategy now.

One challenge we have at Contact when it comes to tech is that there's a lot of work to do across an organization our size. My last employer was quite a bit bigger, and we tried to address the same problems Contact does, and we're getting a heck of a lot more out of every dollar we spend here at Contact. So we're surgical in what we choose to actually focus on and everything has to have a direct line of sight to benefit.

In the generation business, which we started focusing on in earnest about 3 years ago, we've invested a lot of effort into our well management in the geothermal business. This means we can more tactically schedule our workovers of those wells to ensure we're getting the most capacity out of our plant. And we've also started to roll out AI agents, a theme of all of these discussions I'm sure you're having with your portfolio companies around vast amounts of HSE, health and safety and process safety data. There are lots and lots of documentations, lots and lots of observations coming through. So we're using AI now to look across all of those and surface new trends, so we can ensure we're improving on our safety journey.

Along with generation, we've also increased our focus on trading. Tim got a plug earlier; I'd encourage you to talk to him during a break or dinner tonight about some of the work our team has been partnering up with his to deliver. This is actually, for us, a new area of opportunity that we'll double down on, as you'll see in a couple of slides.

With some smart work from Tim's team, some platform expertise and data science and engineering from my team, the teams are seeing significance amounts of opportunity here. And along with this, from a platform perspective, we delivered top Hitachi's trading and risk management platform last year, the first of its kind for a Tier 1 retailer in New Zealand.

Carolyn talked a bit about retail, and this is a nice theme about the sort of surgical investment we've made. You don't hear Contact talking a lot about these investments historically, but we are leading in lots of ways in the retail business.

First and foremost is that investment in self-service. So we started at 40% of self-service interactions 5 years ago, now we're up to nearly 80%. And what that means is when a customer on a multiproduct bundle calls us, they get through sooner and get an expert faster. When historically, we had a lot of people calling us to ask questions about their bills and things like that.

We've also invested a lot in the data platform here, and this is going to provide an interesting foundation for us when it comes to all of the things I'll talk about, whether that's trading, generation or retail. Most organizations and a lot of the other CTOs with whom I speak are now learning the hard way that agentic AI doesn't come first. It's the data readiness, the data migration, the data cleansing, and that is how you actually get opportunity from agentic AI. And we've invested in the right thing first, along with capability and data governance so that we can accelerate into the agentic era.

Corporate has become an increasing focus of late. A lot of that is around automation, as you might imagine, in the HR space, whether it's onboarding or offboarding or finance. And we've also put in a new platform for our procurement team, so they can deploy modern procurement practices, and we can get the most out of every dollar we spend.

And then I've mentioned along the way here some of the investments we've made. We had early partnerships with AWS, early partnership with Databricks, and Databricks has assessed our capability on their platform as the most mature in New Zealand. So we're going to double down on that over the next 5 years and take advantage of it.

So from a pure technology perspective and one thing that's different about Contact31 than '26, '26 had technology embedded in all the strategic pillars, which means we had lots of opportunity and made lots of gains in the pillars. But now we have more opportunity from an enterprise perspective, like taking that retail data platform and scaling it across the enterprise.

And so we'll take that foundational element we've built, and we'll now step into a more vocal leadership role for New Zealand. And this does not mean AI and agentic AI for the sake of AI. We'll continue that rigor around direct line of sight to delivering benefits for the organization, but we'll also give people the right tools or continue to give people the right tools to do their job more efficiently.

Over the past year, we've also been -- or I've also led a rebuild of the entire tech team from the bottom down, and we're already starting to squeeze costs out of the technology business while delivering more capability to Contact Inc. We'll continue on that. We'll rearchitect the organization. We'll get slimmer, we'll get faster get more effective.

And then the ticket to the game here is stability and security. We will not take our eyes off that prize. Everything we do will be built security first, and we'll shift security from a stage gate at the end of a sort of regret for the business to something that unlocks value and becomes a strategic enabler.

I almost don't want to say this out loud. Our availability or our on-time rates are actually higher than a lot of big technology companies you see out there, and we want to strive to maintain that. Every time I read about an AWS outage or Azure, or you may have seen the outage this morning on your KiwiSaver depending on your KiwiSaver provider, it reminds me how important this is for us and how we will not take our eye off this.

So what does this mean for Contact31? In generation, we continue to make sure we get the most out of our consents out of the plant we've already built and give people the tools they need to do their job even better because as we bring more megawatts online, our cost base won't scale up to meet that, so we need to become more efficient along the way.

When it comes to Trading and Flex, and I'll invite John Clark up to talk about some of the sizzle part of the presentation after this, some of the direct things we've done in trading. And you've already heard some work about -- or some of the work we've done with Manawa making sure that we're using our trading portfolio and platform to get the most value out of our assets.

Carolyn talked a bit about retail. We will be putting a fair amount of effort into replatforming retail organization. As you all know or probably remember, we did a bit of an SAP upgrade a couple of years ago, which left our CRM upgraded -- on upgraded, which has left a lot of opportunity for us. It was almost a gods in hindsight that we didn't plow ahead with our plans because now the tools are there, they're more advanced. And each one of the potential options has already been rolled out at another Tier 1 electricity provider in New Zealand. So we will not need to configure those for the New Zealand market. They will be ready for us and ready to go.

We will put more effort into corporate. Productivity is going to be an increasing focus in Contact31. And this is making sure we're doing this in a very smart way, along with agenetic AI, but also the basic tools around automation and data availability. And then in that data and enterprise tech space, simplification, simplification, simplification. We'll -- along the way here, we'll be delivering the [ Meno ] integration.

Most of the work for [ Meno ] has been done from a people perspective. The culture work is underway. The technology work is just getting started. We've got a bit of a pipeline ahead of us, but a lot of strong capability and some really good starts when it comes to integrating all of the [ Meno ] applications and platforms into a single streamlined Contact environment.

You can see along the bottom there, a couple of the trends or how we've staggered this over time. We will need to build a bit of capability to deliver this. But as I've said, we've built the foundations, we've built the confidence and the team is up for stepping into it.

So with that, I'll invite my colleague, John Clark, to the stage to talk about some of the work the technology and trading teams have done together.

Right here comes to sizzle. Welcome to my tech talk. Look, Tighe already mentioned, we've proven we can execute some good digital capability in the trading area. We have the trade deal capture. We have market-making algorithms out there. And we also have a very strong trading portfolio optimization tool. But we haven't stopped there.

So I mean, our trading and technology teams, they've engaged with energy trading operations in overseas environments, and we've done that because the free exchange of learnings and insights can take place as we operate in noncompetitive markets. And the transition, I think, has been characterized by rapid change over the last 5 years. There's more intermittent generation. There's changing markets.

Spot markets are getting more volatile. Grid-scale batteries are coming in. It's the beginning of the home retail integration and growing residential solar and distributed resources. So what does that mean for our trading and technology? Heuristics, whereby you operate by a rule of law have given way to methods of optimization, volatile markets, they require agile responses.

Business-led solutions need to guide the priorities. You need a dedicated technology support, working closely with your trading business. Off-the-shelf optimization for incumbents can be dangerous, and it's better to control the IP. So in-house development of intellectual property, tools and trading strategies with in-house expertise becomes very important. So digital trading to me, it's a people capability as well as a risk management initiative.

We're having the right people capability in trading and digital creates a competitive advantage through developing digital tools and advanced analytics to iteratively improve portfolio modeling, drive faster insights, improve algorithms and trade our energy optimally. What it really means is we get the energy nerds working really closely with the computer geeks.

We have a deep level of market understanding in our trading subject matter experts working with the digital and technology experts to deliver improvements all the while maintaining a clear line of sight to delivering and value while taking on and understanding what is acceptable risk. And the next steps in our trading technology road map will center on creating a centralized platform for both the Manawa and Contact Trading desks, embracing further optimization techniques in our trading tools in anticipation of more volatility and unlock the flexibility of our assets, be they hydro, thermal and the incoming batteries.

Other markets use optimizers for real-time dispatch, introducing automation and algorithmic trading to maximize gross margin. This is essential in systems with high renewables and volatile prices to enable dispatchable assets to target high-price periods. So for our portfolio, in the near term, this means the Glenbrook BESS, the first integration program requiring algorithmic trading tools online first quarter of 2026 and the Clutha scheme with its large flexible hydro asset suitable for optimization.

So background on HOWARD, I'm not going to explain what's on the slides as much from other people in the room than me who can just explain how machine learning works. But it's essentially, it's a decision support tool for Clyde and Roxburgh hydro stations. It physically models river flows, reservoirs, station performance, takes into account operational constraints and regulatory compliance around minimum flows, and then it mathematically optimizes determining the optimal schedules linked to the market conditions.

It runs daily over a 36-hour horizon and its outputs are compatible with our other trading tools. So the benefits of it. It maximizes value by aligning operations with market opportunities to circa just under $8 million per annum. It manages risk and ensures compliance, and it's also extendable to other hydro schemes, and we will adopt this approach for some of the other Manawa schemes.

Background on BatMan. Look, it's an automatic trading tool for the Glenbrook BESS. It optimizes bids and offers in the energy and reserve markets up to 72 periods ahead. Through data integration, it takes in price forecast and real-time telemetry. It puts it through an optimizing engine, which accounts for marginal storage value, factoring cycling costs and efficiency. And then it converts that optimization result into a compliant set of bids and offers. And it has this dynamic decision-making whereby it adapts to the state of charge and the market conditions, which is changing all the time.

It handles the complexity of short duration storage at 2 hours. It enables real-time responsiveness and automation and is scalable for future battery assets. And if you have any questions on how works and how [indiscernible] and how [indiscernible] regression works, our Head Energy Nerd, please stand up. Tim Boyce, who runs our wholesale trading team would love to take some questions on that.

Thank you.

We'll now take questions on any of the last presentations, retail, technology, digital trading.

Just curious as to the migration time line for your new tech platform. It looks like you've been pretty generous in giving yourselves 3 or 4 years. Hopefully, it will be shorter than that. Just wanting to get your views on why you had that in the presentation?

Because we didn't really say what all our other targets were between FY '27 and FY '31. So that's -- it won't be FY '31. We will get into detailed design, feasibility, vendor selection in the first 6 months of next calendar year. And then my expectation it will take somewhere between 18 months and 2 years, but it really comes down to the vendor we go with and the partner we choose to work with and what makes sense for both the customer base, our business and minimizing business disruption.

And the second question, your cost to serve is already very low. As you migrate, are there any components of that current low cost to serve that you can bring over to, I suppose, the next way of operating when you migrate systems?

Yes. I guess our cost to serve is a very good platform to build from. And so I've spent quite a lot of time in our call centers trying to understand the size of the opportunity. And I know that once we can consolidate our 14 systems that our call centers use to service customers down to 1, there was huge amounts of efficiency in terms of average handling time, after call work and leveraging AI agents to kind of do some of the prequalification piece.

So overseas, people are using conversational AI to do verification of the customer and to do intent. And so that can save up to 45 seconds on a call. And so if you think about our average handling time is 11.5 minutes, then there's actually quite a lot of opportunity to reduce that further, either deflect it straight into a digital channel or put it through to a human and that average handling time will come down as well.

So absolutely, we'll take what we've got today into the new world and then we'll build from there. But we're not waiting for the new platform. We're already building our agentic tools right now. And so I expect that cost to serve will continue to slightly guide down before we get to the new platform.

Just 2 questions on the algorithmic trading. So firstly, how mature is algorithmic trading in New Zealand versus other markets?

I think we do what we do very well. It's hard to find an asset mix or a situation that maps directly to people in other markets. From an algorithmic perspective, the team saw that we're on par with our Australian counterparts. The difference we saw was in the level of automation of decision-making and execution, and that's one of the areas we can catch up pretty quickly, I think.

I'll leave the more detailed version of that for Tim.

And just secondly, there's been some concern in some other markets around extended use algorithmic trading. Are you aware of any concerns about the use of algorithmic trading in the New Zealand context?

For us, I think it's that automation component where we still have a human in the loop on nearly everything, if not everything. And so for us, it will be a bit of a learning process. And this is true not just of trading, but all of Contact when AI agents pick up the pace and are able to execute more of the end-to-end value chain, where humans are in the loop and when they're not.

So by our nature in the trading environment, we're a bit risk-averse when it comes to automating our trading execution. And I think we'll just take a journey over the next couple of years together.

Just on your existing SAP system, I understand SAP will cease to support the ISU modules from 2027. Is that the date that you're working to the drop-dead date that you're working to?

No, it's not. Those modules, we're actually off of and we will be off of the third one by the end of this month. So our ERP and billing were refreshed 2 years ago. We moved to SAP 4HANA. The CRM, we did not touch. It is end of life in 2030. That's driving some of the dates around the replatforming in retail. And then we'll explore whether billing from a capability perspective is something we need to get into along the way.

And just on that last point, sort of billing and reconciliation for real-time pricing, is that particularly complex in New Zealand?

Would you like to answer this, or shall I?

Yes. We've made a more complicated. We can get into how our system is set up. When SAP was deployed during our big painful migration a decade ago, the system was configured for ICPs. It was built for an energy-only environment. Nearly right when that project ended, we became a multiservice provider and ever since have been adding -- bolting on products to an electricity-first system, which means there's a lot of manual back-end processes and that sort of thing.

It also means that every single multiproduct customer we've had to configure a new product for and now have over 10,000 products, along with 27 distribution companies for all of whom we need to design unique products again. So it's a little complicated in New Zealand because of the distribution network set up. It's a little bit even more complicated because the way SAP was configured 10 years ago.

And so the replatforming itself will help us simplify a lot of that, take a lot of the back-end effort out. But as an industry, New Zealand, we don't find to be particularly onerous compared to Germany, for example, or U.K., where we talk to other energy retailers.

Just on your cost to serve. You've got a target of $90 per customer. So how much of that decline from $110 is due to increased customer number?

None really. Most of it is coming from great efficiencies out of the call center and the back office. So we have quite a big back-end operations team just because of what Tighe talked to you about is we've got a very complex product catalog at the moment and there's a lot of manual work request falling out. So a lot of that saving will come from our back-end operations automation and from our call centers.

But Stuart, just curious about your assumption in terms of customer growth. Is it you're not expecting much growth? Or you think even with meaningful customer number growth, you'd expect the marginal benefit you get from a cost to serve point of view is marginal as well?

Yes, it's not massively modeled on big customer growth. I think it will play out differently over the next 5 years, depending on what happens with the wholesale price and as our generation capacity grows. But at this point in our connection growth is based on effectively BAU, what you've seen over the last few years.

Would you be looking at a single tech platform vendor for both mass market and C&I? Or do you think there's a possibility you'd go for a separate vendor for each?

I think there's a possibility. At this point, we're starting from a capability perspective. So what will unlock the most value and what's the quickest way to get there. We'll also be looking at productivity improvements and having stand-alone platforms for both C&I and retail are headwinds in that regard.

That being said, the C&I platform has gone pretty well recently, particularly with the migration of the Manawa customers into our Simply environment, but at the same time, we've built some gas billing capabilities for C&I into our retail environment to handle the all of government gas contract. So I think the short answer is everything is on the table, and we'll chase the value.

Is there a possibility you may -- so I guess what I'm hearing is there's a possibility you may retain your current C&I capabilities and choose a separate vendor for mass market?

We haven't made that determination yet.

Just had a quick one on Retail Flex capacity. I found that chart pretty interesting in terms of the TAM at 500 to 600 megawatts. Fast forwarding the clock, FY '31, you're targeting 65. I imagine the 500 or 600 grows pretty substantially as well. So it's a 10% market share on that number now, sort of pretty small number. I would have thought in FY '31. Just wondering what the bottleneck is or what the constraint is to get...

It's a complex ecosystem to, I guess, get the whole ecosystem moving the same direction because it's dependent on having the right meter. It's dependent on customers having the right devices in the home. And so there's an addressable market and then us trying to grow our share above our current market share.

And so I think there's a lot of dependencies on that. That's why we're not quite sure exactly what the road map and the path is going to be to that target, but we've got 5 years. We're going to be putting in a new platform and the market is going to change.

Are there any other questions? Okay. Thanks to our speakers.

Hello, everyone. I'm Matt Forbes, CFO of Contact Energy. And today might just be the day that Mike regrets that international search for CFO. It's really great to be here today to share how the Contact financial framework will support our Contact31 strategy and how we're focused on leading New Zealand's renewable energy future, while delivering sustainable financial returns.

My goal is simple for today. Hopefully, you'll have confidence in Contact's financial stability, understand the discipline that we have around the allocation of capital and understand how adaptable we will be as we execute on the strategy. As you would have seen from the preceding speakers, we've got a lot to cover in this section. So let's dive right in.

Contact is uniquely positioned for New Zealand's transition. And on the slide, we have 6 areas of differentiation between us and our peers. We're the country's geothermal leader, delivering baseload energy that is not dependent on weather. And in a highly renewable market, geothermal is special. It provides stability and certainty when other technologies just can't. And our position is strengthened by being New Zealand's second largest renewable hydro operator.

And the addition of Manawa gives us diversification, both geographically and via inflows. With batteries, thermal plants, gas storage and thermal contracts, we have the flexibility to manage those demand peaks and any volatility within the market. So the combination of all of these assets gives us real confidence when prices are becoming more increasingly difficult to predict in the short term.

As more wind and solar come on, there will be more price volatility. As demand patterns shift, we will see unrecognizable changes in the way prices form, whether it's wet, windy, sunny or demand changes.

On the customer side, we now have multiple avenues to market. We have strategic industrial PPAs who now flex their demand. We have commercial customers underpinned with Simply Energy and a nationally significant retail business of which we now have a gas advantage. And so all of this means that we can deliver returns above what independent power producers can earn.

Our investment case is compelling. We have that strategic differentiation that I've just spoken about, which translates into more predictable cash flows, backed by the new customer demand and our renewable pipeline means that we can have higher growth. It's this combination of asset quality and market-based channels, which makes Contact the premier investment to deliver New Zealand's decarbonization.

Before we look forward, let's just take a moment to reflect on where we've come from through Contact26. We understand that investors have a real choice, and that is why our track record is so important to us. Under Contact26, we consistently beat expectations. We delivered a material uplift in EBITDAF, achieved project IRRs of 13% to 14% on our major capital investments at Tauhara and Te Huka 3. And when the numbers are tallied for the Manawa acquisition, I'm confident that this project will also receive expectations above our investment case.

And importantly, we've been able to adapt to these major construction challenges throughout Contact26. The ultimate report card is shareholder returns and the outperformance against peers really does give us credibility as we move into the next phase of our strategic evolution.

Now how do we deliver this performance? Well, here, we outline the contact business model. So the cornerstone of our performance is securing those long-term industrial PPAs via fixed price PPAs, which supported our geothermal investment and ultimately, the geothermal generation volumes. This additional generation also helped us reduce reliance on more expensive thermal generation.

Strong channel management and commercial discipline saw improved electricity price yield in line with the improving market conditions over the 5 years. And while delivering that new generation was the priority, we also maintained an admirable cost efficiency with operating costs to gross margin flat over the period, a sign of good cost discipline even as we scale the business for growth.

The Manawa acquisition is already delivering on the key transaction hypotheses. First, Contact recognized the value of being long energy in a market where gas was rapidly declining. Since the announcement, ASX futures for 2028 and 2029 have listed well above our long-run pricing expectations as outlined in our business case. And that Mercury PPA repricing is now coming into view.

Secondly, building new renewables was becoming more expensive than purchasing when you compare to some of those recently committed wind projects from our peers. And as you know, hydro assets have better controllability and longer asset lives. So that's even before factoring the synergies we will receive from the transaction.

Thirdly, risk management. That hydro diversity has reduced our risk. In the 2 months since Contact -- since Manawa joined the Contact Group, our earnings at risk metrics reduced by $65 million, while our mean or average earnings increased. We all know that a lower-risk business will benefit from a lower cost of capital over time.

Looking ahead, if prices hold, we expect a $96 million improvement in EBITDAF from the stand-alone contribution from Manawa as a result of contract repricing, delivery of the cost synergies and portfolio optimization. As Matt mentioned, we are confident in achieving the top end of our $23 million to $28 million cost synergy range.

And none of these figures include the development pipeline that Dorian outlined earlier, which will further increase the value we expect to realize from the combination over time. In short, Manawa gives us ballast. It will deliver strong returns and position Contact as a scale competitor as we enter the next phase of renewable investment.

Now let's explore how we think about capital allocation under Contact31. Our priorities are clear, and they are sequenced for impact. Firstly, we need to keep the power stations running. Operational performance is a nonnegotiable. It underpins confidence and cash flows. Without station reliability, growth doesn't happen.

Secondly, preserve financial strength. We currently expect to be around 2.9x net debt to EBITDA at the end of this financial year. So returning to our 2.6x to 2.8x target is crucial to maintain flexibility through investment cycles.

The third is to deliver dividends. They matter to investors and help support the lowest cost of capital, which is essential if Contact is to be the key developer of new large-scale renewables in New Zealand.

And finally, disciplined growth. Investors should have confidence that every project must meet our investment criteria, which is to target returns between 200 and 300 basis points above our weighted average cost of capital.

You'll notice this category also includes $140 million of time-bound sustaining CapEx investments over the 5-year period. These are classified as stay-in-business CapEx project under our accounting policies, but they are more optional in nature and therefore, required to meet our return criteria in their own right.

This includes the Wairakei extension and decommissioning, completion of the Manawa enhancement program, costs associated with new initiatives as per the Contact31 strategy, including the new retail CRM platform, which obviously may ultimately shift to OpEx if SaaS accounting rules apply.

Details of these projects and the timing is included within the appendix, but the message is clear. This is not just another bucket of stay-in-business CapEx to obfuscate rising costs. They're strategic choices that protect the project returns, enhance capability and support overall contact returns rather than just reducing risks.

Our investor metrics should give confidence that capital is being allocated appropriately. The company-wide return on invested capital uplift of 300 basis points is on top of project returns. This ensures that good projects with attractive IRRs like Tauhara and Te Huka 3 aren't offset by operating cost growth or unrestrained maintenance CapEx. The bottom ribbon outlines the order of mitigations that we would use in the case of a downside.

I'll now outline how we prioritize the balance sheet. The chart outlines how we decide on whether an investment is funded on or off Contact's balance sheet and why that matters for risk, returns and strategic control. For geothermal, control is critical. It's about managing the resource development and timing, and so these projects will stay on our balance sheet.

The same applies to batteries. They're a portfolio asset where coordination between our assets and contracts is crucial, and it delivers the highest value. For our wind and solar investments, the model is different. These technologies benefit from third-party capital, and we'll look to replicate the success of our Lightsource bp solar joint venture in our wind development aspirations, bringing in partners with expertise in procurement and project delivery, which help derisk execution. The table shows our minimum target returns for each of these projects.

Just for some context, there is some discrepancies or differences between our current targets and the expected target returns. For example, off-balance sheet solar IRRs currently are well above the threshold for good sites, reflecting the low solar penetration in New Zealand, short build times, favorable tax advantages for Contact and strong wholesale prices. Solar is a time-bound opportunity in New Zealand that we intend to capture.

The benefits of using off-balance sheet for wind and solar go well beyond financial engineering. They lower the risk in development of the project, bring forward that development capacity within our balance sheet constraints and it gives us the lowest possible project cost as we're bringing in these developers with skills and experience and ultimately allows us to recycle capital for future growth.

In summary, we prioritize our balance sheet for the highest returning projects with strategically critical control. We're not afraid of third-party leverage to help support our projects or where it can improve returns for Contact equity holders.

As you heard today, we have a clear plan for all of the projects that we want to deliver. And now you know the return criteria that will be applied to every single one of those projects. But with net debt-to-EBITDA expected to be at the higher end of the S&P range for FY '26 and dividends linked to operating free cash flow, understanding how we plan to fund these growth investments is crucial. Our approach starts with growing EBITDAF because higher earnings expand the debt capacity that we are allowed to take on under S&P limits.

Next, we'll look to use operating free cash flow beyond dividends. And we also use hybrid debt for equity credit and finally, maintain additional equity options like our dividend reinvestment program. Protecting our BBB credit rating is a nonnegotiable. It gives us continued access to deep liquid international debt markets with the benefits evidenced by our recently issued euro bond of $1 billion earlier this month.

Issuances into these international debt markets ensures that we've got stable low-cost access to debt. All of our debt is fully certified green, and our weighted average cost of debt is around 5.8% for FY '25. We have a further liquidity runway of $1 billion, which helps us manage risks during a build program.

So having multiple funding options, we can back the right projects at the right time, accessing the lowest cost of capital, preserving the flexibility that's important for our credit rating and to support further growth in dividends.

Sales channel management, risk management and performance are absolutely linked. No one has a hydrology issue if you've not oversold your position. So here is how our sales channels will evolve as the Mercury and NZAS PPAs roll off and as prices revert to those long-run expectations.

First, the Mercury contract will roll off from the fixed price bucket into higher market price channels. And we'll keep the volume in that channel flat as we bring in new industrials to support our wind and solar development.

Wholesale prices are expected to moderate back to long-run expectations, which is around $115 million to $125 million in 2024 real terms. While retail netback looks in line with C&I and CFDs on the chart, when it's adjusted for shape, seasonality, location and operating cost to run the business, it's broadly in line with what we believe the long-run price to be.

As the prices are currently higher than long-run expectations, this means that retail is temporarily loss-making. But over time, the energy contribution should continue to increase at inflation. Our channel strategy is clear. We look to maintain predominantly long-term channels to provide stability during a build phase, while retaining some market linkages for discretionary generation will bring to market. This balance gives us really good flexibility and helps us manage risk as we grow our share of renewables.

Contact31 isn't just about growth. Productivity is a crucial part of what we're trying to achieve. And we're targeting a $38 million in run rate savings by FY '27. That is $28 million from the Manawa integration and a further $10 million from broader productivity improvements.

How will we achieve this? We'll achieve this by leveraging technology, streamlining our processes, and it's also a cultural imperative within our people.

If we don't build this efficiency muscle now, we risk falling behind. And this is not just a cost control issue, but in how our broader leadership team grows in their culture and capability. This focus links directly to the people strategic enabler that Jan introduced and sets the foundation for further meaningful cost reductions post FY '27.

Our goal is clear here. We want to deliver growth without letting operating costs erode returns. That's how we protect the company ROIC and ensure that every dollar that we invest flows to shareholders rather than suppliers.

Bringing it all together with our EBITDAF bridge here. This includes our priority investment targets under Contact31, and we've grouped these initially by online timing and then secondly, by technology rather than a strict build order.

You'll see there's already a significant amount of capital already committed. Projects like Manawa and the under construction renewable assets are expected to deliver near-term benefits. Completing these is absolutely crucial before unlocking the next phase of growth that remains subject to FID.

Future growth depends on a number of factors: demand growth, favorable consenting outcomes, new wind partnerships and meeting return hurdles. To achieve the EBITDAF target that we have for wind, we must deliver a step change in construction costs. Recent peer estimates for wind would not meet our return expectations without that improvement.

You'll see committed projects adding around $120 million, supporting our deleveraging. This takes us to approximately $1.1 billion, with the addition of growth projects subject to FID contributing to a fully ramped exit run rate of $1.3 billion to $1.4 billion in FY '31. This includes all the projects outlined earlier, except for Tauhara 3 as it is only targeted for FID right at the end of the period.

We've also included a range of $0 million to $50 million in incremental EBITDAF from trading and retail investment. While these are really strong business cases, competitive dynamics mean the benefits will most likely be diluted if everyone invests heavily. These are good investments. But we need to be realistic about the delivery and base case outcomes because competition is a real risk of eroding those returns. So it's all about disciplined execution of our committed projects first, then unlocking the next phase of growth as the projects pass our strict criteria.

Finally, we bring it all together with sources and uses of gross funding. We expect to invest between $2 billion to $2.5 billion over the next 5 years in growth capital. On screen, you can see our transparent targets using the growth funding framework we discussed earlier. First, the assumptions. We expect revenue growth of 5% to 10% compound annual growth rate, moving from about $3.25 billion to $3.75 billion in FY '26 as we bring more renewable energy to market.

This is because under the strategy, we expect to grow our renewable generation from 11.8 terawatt hours to 15.2 terawatt hours. This is a 30% increase in volumes, unlike the price tailwind that we had in Contact26. EBITDAF margins are expected to sit between 24% and 26%, improving from the 24% we've achieved historically as higher cost thermal generation is retired and operating costs improve.

Operating free cash flow conversion is expected to remain in line with history between 55% and 60% of EBITDAF, as some of those time-bound same business CapEx investments roll off. To support growth and the near-term deleveraging towards our target, dividend increases will likely sit at the lower end of our 80% to 100% payout range initially. But with revenue growth and margin expansion, dividends will continue to rise in real terms.

We also control the timing of all FIDs to reflect market conditions, the balance sheet position at the time and the company's financial strength. You'll notice that a high proportion of the growth CapEx remains uncommitted. Projects that we are targeting for an FY '26 include the Glorit Solar Farm and the Best 200 at Glenbrook.

Finally, we're fortunate to have access to additional equity like support through hybrids and our dividend reinvestment plan, which retains equity. When we brought Tauhara to market in 2021, the investor response during the placement showed there was strong appetite to back high-quality projects in the right circumstances. Contact31 is fully fundable from Contact's balance sheet, supported by the same optionality that underpinned Contact26.

That disciplined approach using the right source of funding at the right time for the right project gives us the flexibility to fund growth and dividends. Our financial framework is all about balance. It's about growth and returns. It's about flexibility paired with discipline. We're building a resilient low-carbon business with a focus on shareholder value. That's how Contact is leading New Zealand's renewable energy future.

Thank you. I'll now hand over to Mike to introduce the Q&A.

So we'll take our final set of questions now. So anything on the financials or anything from the day that you haven't had answered just yet.

Grant?

Obviously, first question, dividend. So just take what Matt went through. It does imply around about $0.79 of free cash flow for dividends on a run rate 2031. This $0.50 number that's thrown out there, can you talk about how conservative that is? And if you've got a 4-year trailing, should we be considering 4 years post 2031, we will be at least $0.79 of dividend?

I'm glad you can multiply the 5 numbers we put out there, Grant. I think you're about right. Clearly, we're looking at continuing to deleverage and to fund their options within our portfolio. We agree. That's why we're developing all of these renewable assets. We think they're going to throw off a lot of cash. They're going to deliver a lot of benefits for shareholders, but that will come over time because we need to balance those great project returns, the market that we're in today with delivering those dividends.

So we're not going to be looking to give guidance beyond FY '31 at this stage. But we believe with a reasonable set of assumptions, the minimum 50% -- $0.50 dividends will meet those expectations.

Okay. Conservative. Then Mike, I think this question is for you. With your cost to serve going from 113 down to 90, does that open the door that maybe Infratil says let's do the one NZ?

Look, we're focused on our own business. Let's be absolutely clear about that. I had a bad experience of working in mass market telco, as Carolyn did as well, and we both fled that regime very quickly.

So look, there are bigger and better things to be spending our time, and it's an interesting concept, which is out there, but this is going to take our time. This takes our focus. This is where our attention needs to be.

And so getting that cost to serve down is absolutely critical; getting the replatforming done, absolutely critical; building those geothermal projects, absolutely vital; getting off the ground in wind and building up solar that's where the focus is.

So no conversation with Jason Boyes on front yet.

No, not.

My final question, just in terms of -- it looks like you've done all your numbers, and you've laid them out there very clearly in terms of getting to 2.6x to 2.8x debt to EBITDA by FY '31. But that does come with quite a bit of extra PPA risk. And if we do go into overbuild, it does mean that you don't really want those PPAs. Wouldn't it be more conservative just to go to the market and raise a bit of capital?

I'll answer that. Look, our key thing is that we don't need to do that. We have flexibility. But that -- those PPAs, look, this is one of the critical things between us and IPP. We signed up that PPA for Kowhai Park. We've now contracted a large amount of the output from Kowhai Park to the likes of Simply and other dairy. We signed up -- interestingly, we signed up Fonterra for the consension before we got the Glorit consent, and then we'll build into that.

So that ability to not be time bound or time chained is actually one of our key attributes is that we can build, sign up the PPA, and then on sell it or we can on sell and then build. And that flexibility is something that I'm dead keen to preserve, and that's what protects us also against that scenario of overbuild.

We'll retain the flexibility that we need through the cycle. And we obviously -- when we talk about our 2.9x net debt to EBITDA, that actually started the year at 2.3x. We leveraged up for Manawa, and we've got $500 million of growth CapEx, which is delivering the next wave of EBITDAF growth. So every time we get to that point in the decision-making cycle, we're looking at the full range of options that we have available to us, and we'll do the right thing for shareholders.

I think the other thing to remember is that when we first published the numbers on Manawa, I think we were looking at about 3.1, 3.2 peaking, and we think we'll be lucky to touch 2.9. So that outperformance just -- you just go, right, well, let's do that again. Let's do it again. So that conservatism that you talked about is actually keeping us in very good shape.

Andrew?

Yes. A couple of sort of topics really for me. You've described wind and solar as noncore. Does that mean it is potentially up for sale and for capital recycling at some point? Is that in your thinking at all?

Look, all those things are obviously part of the flexibility of our portfolio. We see it as an opportunity for off-balance sheet financing. That's not necessarily noncore. Electricity is our core. But what we see is that ability. Look, if we do win the way that others in the market do win, we're going to come third or fourth. We need to find a way of getting partners to catch the competition and get establish a lead against them and that's going to come scale and new partnerships as we did with solar.

So that's the thinking behind that. It's not -- you've got to do -- we have to do that stuff differently, which is why it goes off balance sheet. And if there is the need, we don't need to capital recycle at the moment, which is the key point. We can, but we don't need to do that.

It's core that we have the energy to be able to support the customers who need to move off of gas on to electricity. That is absolutely core. The funding mechanisms and the timings of when we bring people in, at this stage, it's more about how do we get a project to market that's derisked, that's bankable, that we have a broad set of expectations around how we're going to deliver it, who's going to do it, someone with the experience, someone who can potentially bring procurement benefits beyond what we can do, even though ours is a 300-megawatt plant, those are fundamental to what we're trying to achieve at this stage, and that's why solar and wind off balance sheet.

So just related to that then on the wind side of things, if you don't get a partner, is there any risk there in terms of not getting a partner? Does that mean your wind development pipeline falls away? What do you...

We will find a partner. There are no shortage of potential partners in a range of different scenarios lining up. But to your point, we're going to have to work hard. We've set out we're going to get a partner. We'll get a partner. We've set out we have to have that growth in demand through PPAs. We'll get that growth in demand.

So to what Matt was just saying, we've set some pretty chunky hurdles to make sure that we have to get over those to get wind going and that the shareholders see those returns. So if you can -- quick quote, if we don't achieve that, then we won't get the right to do wind. And I see that as a really key point. We're going to have to work hard to earn that right.

And last question for me is, again, also related to the dividend. But with -- you talk about the buyback as a potential, particularly if you have dividends unimputed. So just to clarify, I guess, the $0.50 a share is after any buybacks. Buybacks might be in addition to that. And then secondly, some guidance, I guess, around imputation going forward. Clearly, that's something that you're focused on.

I mean, obviously, any buybacks mean that the full extent of the growth program that we have ahead of us is not materialized for either market reasons, partnership reasons, return reasons, hurdle reasons. So I wouldn't take those 2 as sort of interacting in any meaningful way in this strategic period. Our focus is on using our capital to invest in projects with 10%-plus returns and that's exactly our focus.

I have sort of a -- you want your capital allocation framework to live beyond a strategic planning window where you think something is going to happen, but something might not necessarily happen, and I've sort of got a personal aversion to paying out too many unimputed dividends.

And just in terms of imputation level guidance, is that because you're circa sort of 80% now, I think you expected it to go down a little bit?

Yes. I think we'll probably be a little bit lower in the range with some of those accelerated tax advantages that the government has got out on new build. For example, that 20% accelerated tax, we got that on the Te Huka 3 plant, even though it sort of only came online about 7.5 minutes after the tax announcement. So those types of things, obviously positive for operating cash flow, but not great for imputation.

Stephen?

Can you just explain why you are still picking wholesale prices to revert lower? Everything I've heard today, gas supply halving in the last 6 years, a handful of OEMs controlling wind and geothermal, you've got the currency tanking, you've got bond rates still at record highs. I'm kind of a little bit confused why you still think, I'm being a bit facetious here, that wholesale prices revert to some lower level? And I just wanted to clarify that all of those numbers for 2031 build in that assumption?

Yes. So most of us were tortured through some form of economics in the various degrees that were held in this room, and we all fundamentally believe that prices have to eventually revert to the last molecule or the last electron dispatched at that LMC. But there are always circumstances which change that, which continue to change that.

And that the volatility, I'm going to call it volatility that we've all experienced over these last few years has been phenomenal, which has led to that higher average price. The really important thing is that we look through that volatility, and we can genuinely see lower priced summers and higher prices in winter. We haven't -- we didn't see that 10 years ago.

We can see that intraday volatility is peaking and then with batteries coming off. So the important thing is less about, well, what's your average price path? It's looking through and seeing the nuance and the volatility within that and making sure that we, as a company, are match fit to take advantage of that.

Yes. All of our assumptions are around that long-run expectations around price. Mike has absolutely nailed it. The winters, we're very confident that we know what winter pricing is going to be because we've got gas, which is costing us $200. We've got the HFO, which is in that same ballpark. We're spending the same amount turning off with the Tiwai Point Aluminium Smelter. So those marginal dispatchable megawatts, it's it. That's it.

The question that we still need to answer around are we sitting at 120 or 160 is around those summer prices. And that's why we're so committed to getting those summer weighted industrials into our market because if it comes about that those summer industrials do come on and bring on a larger share than we expect, then we could see structurally higher prices.

But we still believe with the amount of solar that's coming into market that we will see a reversion to prices over time. And remember, the forward market and the spot market, they sort of move in opposite. If you're an energy scarcity, the spot market pricing is lower than your forward prices. And if it flips the other way around, it can flip quite quickly.

So everybody here should be selling the futures price and buying Contact Energy equity essentially. Just one final question, I suppose, on all of that is are you in the camp that sees peaking factors for solar collapse to 40% in the next 30 years?

No, we have a much more rational market in New Zealand. I think we have a lot of the key solar developers are actually generators. So we do see a decline because today, obviously, you can build a solar plant and the peaking factor above 1. But we think it's a time-bound opportunity. And over the next 5 years, we'll see a reduction in those peaking factors more like towards sort of 70%, but rationality within the market will stop sort of self-harm going forward.

We've got -- the people that are building the solar farms have all got very similar capital management strategies, and they've also got quite similar approaches to thinking about how the market works. So I do think we've got a more favorable structure than in any other markets.

Any more questions?

I'm not sure how to phrase this. It's a hard question to ask, but sort of it's in the background of the industry, which is the sort of political risk coming to next year. And I'm not going to throw hypotheticals at you, but maybe the question to ask, you can answer is kind of what's your -- what are the conversations you're having with politicians amongst the various parties right now? How much do you think they understand the issues in the industry? What -- how receptive are they to those messages that you've given today?

I think the first one, and I genuinely mean this, is our biggest defense is look at the delivery. It's our defense or it's our selling point to you -- to the people in this room, it's our defense with the politicians. We have laid down $2 billion of renewable energy investment. We have got the country as an industry from 80% to nearly 95% renewable.

Mess with that at your peril. Mess with that at your peril because guess what, public sector government does not have that track record. And with that goes not just the capital, but the capability that we have attracted and retained into this really exciting part of New Zealand's development. It is an intergenerational opportunity and occurrence, which has retained some of our best and brightest people here in New Zealand when others have got out of university and said, well, actually, I'll just go to Australia.

So it's not just the money, it's the capability and capacity that we have been able to retain in this country. And I personally and we as a company will sell that story morning, noon and night to whatever color of the political spectrum is in power because they can't argue with facts. They cannot argue with the delivery.

And so as we enter into next year, yes, the energy will be part of it because, look, no one likes rising electricity prices, and there are -- have been challenges in the transmission and lines charges, which have gone up. And we have to front that and tell our story and tell our story well. And we have to continue to deliver. We have to continue to actively engage with our stakeholders, as Chris outlined today.

But that fundamental premise of it's not about a glib promise, it's about real delivery. And that's the best defense that any individual or any company can have in the environment we operate in New Zealand.

I like that answer. Just going down to a slightly more detailed regulatory option coming up, which is the level playing field measures, which if implemented by the middle of next year could result in the need to lift retail prices to comply with the level playing field rules. Can you comment on those? How do you think that might impact? Clearly, that could become part of the political conversation.

But do you think in terms of your own pricing, when you have run the ruler over the rules, whether or not that would have an impact? Because as you pointed out earlier, you're taking sort of the long run view on retail pricing. When you compare it to a spot price, you would say it's underwater. But that's a portfolio position you've taken that might be compromised by these new rules?

Look, we, as a company, and it predates my time as CEO, we're one of the first companies in the sector to introduce a robust, rigorous, auditable and very transparent transfer pricing methodology, which sent the message very strongly, hey, the retail business has challenges. The innovation, creativity and business improvement that, that drove into that retail business has been phenomenal. And they have grown adjacencies, they have done gas deals, and they have built a very resilient business.

I have no doubt that when the level playing field provisions come in of all our competitors, we are in the best shape having been literally turned into diamonds with that pressure that we can respond to that. And no, there should not be radical price rises because by that stage, we should have got ourselves to that.

Certainly, we are getting towards that robust transfer pricing methodology, and we will continue to increment our prices in accordance with inflation. You are right, it is a very fine balancing act. But no, I do not see the need for radical price rises next year.

Okay. No further questions. Thanks, Mike. If you would like to close us out on stage...

And thank you for -- again for being here today and for some outstanding questions.

Just to make some closing comments. Just an announcement, and I talked about behind Contact26, and it looks all very sunshine and roses. But we're all painful, we're aware that, that was a difficult journey where we built -- we had to build the muscle tone around project development and execution, and it was a painful process.

So I'm pleased to announce today that we've just been approved resource consent for 400 megawatts of battery at Glenbrook, an additional 400 megawatts. So we talk about those Southland wind Lake Hawea. We are learning, we are adapting. We are acquiring that expertise, that instinct, which will carry this company well into Contact31+. So yes, hot off the press and no, I have not yet told my Board, so they're just finding out now.

Look, just to repeat, we've laid the groundwork and have a clear vision for success through Contact31. The market and our strong competitive position present an opportunity to further build on our Contact26 achievements.

Contact-31+ will see Contact lead New Zealand's renewable energy future. It's not just about decarbonization now. It's about a renewable energy future where us as ATR have a chance to lead the world. And for goodness' sake, we need to seize that opportunity because as I indicated before, it's a once-in-a-generation opportunity.

We will continue to lead the energy transition here at home in homes empowering customers to shift their energy use, while making every interaction easy and personal. And the good plans have been a key part of that and will continue to be.

And delivering on our strategy will be enabled by some fantastic people and leaders, great stakeholders and the relationships we are able to grow with those stakeholders over the long-term, our tech advantage and getting after that productivity improvement. It will deliver the highest value outcomes for investors and for New Zealand.

Just to talk through those pillars, the geothermal you'll see Tauhara 2 to delivered. You will see Te Mihi 3 online. You will see Tauhara 3 underway. The Flex, you will see those batteries in place. You will see the renewable Flex options. Wind and solar, we will be at 450 megawatts of solar. We will be committed to over 500 megawatts of wind.

And at home, you will see our customers on the modern retail platform, a little bit earlier than 2031 to the question raised earlier. You will see our cost to serve. You will see that 65 megawatts. These are all hard commitments by which this leadership team is standing up and say, you can hold us to account.

Financial, you will see that ROIC improvement of about 300 basis points. You will see that $1.2 billion to $1.3 billion of EBITDA with the exit rate of $1.3 billion to $1.4 billion. And you will see that dividend. And yes, Grant, we are being conservative, but that has what has kept us safe and an ambitious program over these last 5 years.

Now what's important, it's not just 2031. There is a stake in the ground. FY '27 is critically important to this company. You will see Te Mihi Stage 2 on. You will see the Glenbrook battery on. You will see Kowhai Park up and running. You will see the wind farm consented. You will see those OpEx numbers, which Matt talked to, and you will see those Manawa benefits, not just talked about and us getting increasingly confident about, but you will see them in the bottom line, and you'll see that dividend.

So we're not just saying wait 5 years, we're actually setting out a bit of a road map and a bit of a way point on the way to which you can hold us to account. And I think that's an important feature of the strategy. You will be able to measure us not just at the end, but on the journey as you walk with us.

Now #2 out of 500. This is the second time I've presented this slide, and it's going to be presented a lot more over the coming years. This is, ladies and gentlemen, Contact31+, where we aim to lead New Zealand's renewable energy future.

Geothermal, flex, wind and solar, leading the transition at home with fantastic people, supportive stakeholders, a very nuanced technology advantage with people who are enabled to be as productive as they possibly can be each and every day.

Thank you. It has been an absolute privilege.