Announcement

GENERAL: TPW: Trustpower announces sale of electricity metering business 08:58am 
TPW
18/11/2019 08:58
GENERAL
PRICE SENSITIVE
REL: 0858 HRS Trustpower Limited

GENERAL: TPW: Trustpower announces sale of electricity metering business

Trustpower is pleased to announce it has reached an unconditional agreement
with Financial Corporation Limited (FCL) for the sale of its electricity
meter assets and meter equipment provider (MEP) business, with completion
occurring on Friday 15th November.

The sale includes electricity metering assets at approximately 125,000
installations nationally, (across a mix of Trustpower retailed and
third-party retailed customers) as well as a number of business systems and
processes. All Trustpower staff currently working in the MEP business have
been offered ongoing employment with FCL and the business will continue to be
based in Tauranga.

The sale continues Trustpower's strategic evolution to a more digitally
focused multi-product retailer and supports the ongoing transition of its
retail customer base to smart metering.

In 2018, Trustpower signed an agreement with Australasian smart metering
service provider Intellihub that initiated the rollout of AMI (smart) meters
to approximately 140,000 Trustpower customers. With that programme well
underway and a commitment to these new services and business model, the
timing was right for Trustpower to exit the metering business.

Trustpower's General Manager of Business Solutions & Technology, Simon Clarke
says the sale is a mutually beneficial agreement.

"Trustpower has successfully operated a great metering business for the last
20 plus years but our view is that the ongoing ownership of that business
will no longer provide us with the competitive advantage it once did. The
sale allows Trustpower to continue to focus on its core strategic retail
ambitions, whilst realising good value for the assets and a positive outcome
for staff. We are also pleased that FCL are continuing business operations
here in our home town of Tauranga".

Both parties will work together over the coming months to ensure a seamless
transition of the business.

The transaction price is not disclosed.

The impact on Trustpower's medium-term earnings is outlined below, however
given the variability of key inputs (such as AMI meter deployment), the
impacts should be considered an approximation only.

$M FY-20 FY-21 FY-22 FY-23
EBITDAF ($4.5m) ($7.9m) ($4.6m) ($3.4m)
NPAT $11.6m ($5.7m) ($3.3m) ($2.4m)

NOTE: FY-20 is assumed impact from date of sale, to 31st March 2020 only.

Trustpower confirms its FY-20 EBITDAF is still expected to be within its
current guidance range of $200- $215 million following the sale.

ENDS

CONTACTS

Trustpower Communications Team
comms@trustpower.co.nz

Trustpower Investor Relations
Kevin Palmer - CFO
Kevin.palmer@trustpower.co.nz
021 471 779
End CA:00344441 For:TPW Type:GENERAL Time:2019-11-18 08:58:55

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