Contact Energy (CEN) CMD 2025 summary

Strategic vision and leadership

• Launched Contact31+, a strategy to lead New Zealand’s renewable energy future, building on Contact26 and targeting transformation beyond electricity decarbonization, with a focus on geothermal, wind, solar, and battery storage expansion.

• Renewed and refreshed leadership team to support execution of Contact31+.

• Emphasized empowered people, stakeholder relationships, and technology as key enablers.

• Set clear, measurable commitments for 2027 and 2031, including operational, financial, and sustainability milestones.

• The company’s diversified portfolio and cost leadership position it to capture new demand and manage volatility.

Growth, investment, and financial guidance

• Targeting EBITDA/EBITDAF growth to NZD 1.3–1.4 billion by FY2031, with a 300 basis point uplift in ROIC and dividends over NZD 0.50 per share.

• Committed NZD 2–2.5 billion in growth capital over five years, focusing on geothermal, batteries, wind, and solar, with 250MW+ geothermal, 500MW batteries, 500MW+ wind, and 450MWac solar targeted by FY31.

• Maintaining a net debt/EBITDA ratio of 2.6x–2.8x, protecting BBB credit rating, and using a mix of on- and off-balance sheet funding for projects exceeding 10% IRR.

• Productivity improvements and Manawa integration expected to deliver NZD 38 million in run-rate savings by FY2027 and $28M in cost synergies by FY27.

• Dividend guidance is >50cps by FY31, with a payout policy of 80-100% of operating free cash flow.

Renewable development and technology

• Leading geothermal expansion with plans to double output to nearly 7 TWh, including new investments at Tauhara and Te Mihi, and major projects like Te Mihi Stage 2 and Tauhara 2/3 underway.

• Advancing 500 MW of battery storage, with 300 MW operational by 2026, a pipeline of 900-1,200MW by 2030, and the first 100MW online in Q1 CY26.

• Wind and solar growth to be delivered via partnerships, joint ventures, and off-balance sheet structures, targeting 450 MW of solar and 500 MW of wind.

• Retail strategy focuses on digital transformation, AI, and customer-centric innovation, aiming to reduce cost to serve to NZD 90 per customer by FY31 and grow demand flex to 65 MW.

• Technology investments in data, automation, and trading optimization to drive efficiency and value across the portfolio.