Tuesday, 19 May 2015

PRESENTATION TO BROKER CONFERENCES

ERM Power Limited (ASX: EPW) Managing Director and CEO Jon Stretch will be speaking at the JP Morgan Utilities Forum in Melbourne today. A copy of his presentation follows. He will deliver the same presentation to the Goldman Sachs Sixth Annual Small and Mid-Cap Conference in Sydney tomorrow.

Peter Jans Group General Counsel & Company Secretary ERM Power Limited

For further information

Garry West Corporate Communications and Investor Relations Manager Phone: +61 7 3020 5165 Mobile: +61 457 140 650 Email: gwest@ermpower.com.au

About ERM Power

ERM Power is an Australian energy company that operates electricity sales and electricity generation businesses. Trading as ERM Business Energy and founded in 1980, we have grown to become the 4th largest electricity retailer in Australia with operations in every state and the Australian Capital Territory. We are also licensed to sell electricity in several markets in the United States. We have equity interests in 497 megawatts of low emission, gas fired peaking power stations in Western Australia and Queensland, both of which we operate.

www.ermpower.com.au

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JP MORGAN UTILITIES FORUM

Jon Stretch, Managing Director and CEO 19 May 2015

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Disclaimer

This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and business of ERM Power Limited (ERM Power) and certain plans and objectives of the management of ERM Power.

Such forward-looking statements involve both known and unknown risks, uncertainties, assumptions and other important factors which are beyond the control of ERM Power and could cause the actual outcomes to be materially different from the events or results expressed or implied by such statements.

None of ERM Power, its officers, advisers or any other person makes any representation, assurance or guarantee as to the accuracy or likelihood of fulfilment of any forward-looking statements or any outcomes expressed or implied by any forward-looking statements.

The information contained in this presentation does not take into account investors investment objectives, financial situation or particular needs. Before making an investment decision, investors should consider their own needs and situation and, if necessary, seek professional advice.

To the maximum extent permitted by law, none of ERM Power, its directors, employees or agents, nor any other person accepts any liability for any loss arising from the use of this presentation or its contents or otherwise arising out of, or in connection with it.

Non-IFRS information

This document may contain certain non-IFRS financial measures and other defined financial terms.

The directors believe the presentation of certain non-IFRS financial measures is useful for the users of this document as they reflect the underlying financial performance of the business. The non-IFRS financial measures include but are not limited to:

EBITDAIF - Earnings before interest, tax, depreciation, amortisation, impairment, net fair value gains/losses on financial instruments designated at fair value through profit and loss and gains/losses on onerous contracts. EBITDAIF includes any profit or loss from associates.

Underlying EBITDAIF - EBITDAIF excluding significant items.

Underlying profit or Underlying NPAT - Statutory net profit after tax attributable to equity holders of the Company after excluding the after tax effect of unrealised marked to market changes in the fair value of financial instruments, impairment, gains/losses on onerous contracts and other significant items. Underlying NPAT includes any profit or loss from associates.

During the period the Group changed the definition of underlying NPAT to exclude significant items. In prior periods these items were shown as adjusting items to underlying earnings measures. The change was made to reflect how financial information is reported to senior management and the managing director.

All reference to $ is a reference to Australian dollars unless otherwise stated. Individual items, totals and percentages are rounded to the nearest appropriate number or decimal. Some totals may not add down the page due to rounding of individual components.

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BUSINESS OVERVIEW

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ERM Power is an Australian energy company that operates electricity generation and electricity sales businesses.

Trading as ERM Business Energy, we have grown to become the 4th largest electricity retailer in Australia with operations in every state and the Australian Capital Territory.

We also sell electricity in several markets in the United States.

We have equity interests in 497 megawatts of low emission, gas fired peaking power stations in Western Australia and Queensland, both of which we operate.

ASX: EPW

Revenue >$2 billion

Market capitalisation ~$600m

>5,700 shareholders

– Founder 31%

– Balance a mix of institutional and retail investors

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COMPANY SNAPSHOT 35 YEAR TRACK RECORD

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Focussed on business market only – initially commercial and industrial (C&I) and now expanding into small and medium enterprise (SME) and United States (US)

Winning on service and reputation coupled with competitive pricing

Good people, processes and systems produce more accurate data and forecasting, which means we: – manage risk and trade more efficiently

– minimise op-ex

– leverage smart meter intelligence

– provide more accurate and timely usage information and bills, leading to:

• No. 1 for customer satisfaction^ 4 years running

• account management focussed on customer value

• market leading recontracting rates

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BUSINESS SUCCESS FACTORS MARKET LEADING SERVICE

^ Utility Market Intelligence (UMI) survey of major retail electricity retailers by independent research company NTF Group in 2014 (19th year of Survey). Research based on survey of 300 business electricity customers between November 2014 and January 2015. Four major electricity retailers benchmarked.

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C&I – Improving customer satisfaction by enhancing value

proposition – Increased focus on product and service innovations – Continuing drive toward market leading position

(currently number 2^)

SME – Scale and break-even achieved from growth in multi

sites – Making inroads into single site segment – Focus on strategies for maximising customer lifetime

value

US – Source Power & Gas is like ERM Power was 4-5 years

ago – Transitioning business to ERM Power processes – Aiming to replicate Australian success in US

ELECTRICITY SALES TO LARGE BUSINESS

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RETAIL SECURING FUTURE GROWTH

^ Based on ERM Power analysis of published financial information.

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4.0

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12.0

ORIGIN ENERGY

ERM POWER ENERGY AUSTRALIA

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100% ownership of Oakey Power Station (332 MW gas and diesel-fired peaker) in Queensland, operating merchant and contracting internally to retail business and externally to third parties

50% ownership of Neerabup Power Station (330 MW gas-fired peaker) in Western Australia, contracted to 2029

GENERATION

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QUALITY ASSETS

Oakey Power Station

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– Compound annual growth rate of 40% in revenue over last four financial years

– Customer oriented business model

• Price competitively with efficient processes and ‘big data’ ->

• Accurate and timely usage and billing information ->

• Industry leading customer satisfaction ->

• Industry leading customer re-contracting/retention

– Build on successful proposition in Commercial and Industrial in Australia

• Extend to SME in Australia

• Extend to US

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SUMMARY CONTINUE TO DRIVE LONG TERM PROFITABLE GROWTH

¹ Refer page 2 of presentation for definitions

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FINANCIAL RESULTS

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Load growth of 22% in electricity sales drives strong result

SME contracted customer numbers now exceed 24,000

Expanded into U.S. market with completion of Source Power & Gas acquisition

ERM Business Energy continues to lead major retailers in service – No. 1 position for Customer Satisfaction reaffirmed

Entered into transaction to sell WA gas interests

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HALF YEAR HIGHLIGHTS CONTINUED STRONG GROWTH

¹ Refer page 2 of presentation for definitions

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Underlying EBITDAIF ¹ growth higher than

revenue growth due to removal of

carbon tax

Underlying NPAT ¹ result driven by 22%

growth in retail electricity sales volumes

and increased margins

As part of restructure of gas assets, a

$3m impairment charge taken reflects

the expected sale price

Statutory operating cash flow high due to

favourable working capital movements.

Excluding these movements, operating

cash flow up $10.1m from prior half.

FY2015 HALF YEAR FINANCIALS

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GROWTH IN REVENUE, EARNINGS AND CASH FLOW

¹ Refer page 2 of presentation for definitions

$m unless otherwise stated 1H FY 2015

1H FY 2014

% Change

Revenue and other income 1,099.1 970.1 +13%

Underlying EBITDAIF1 44.6 34.4 +30%

Underlying NPAT1 14.7 6.9 +113%

Underlying earnings per share (cents)

6.1 3.2 +91%

Interim Dividend (cents per

share) fully franked

6.0 6.0 -

Operating cash flow before changes in working capital

41.1 31.0 +33%

Operating cash flow before changes in working capital (cents per share)

17.1 14.3 +20%

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Gross margins per MWh and sales volumes increased during the period

Further gross margin improvements expected over full year

Operating costs fell on a per unit basis as both C&I and SME operations continued to build scale

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ENERGY RETAILING ELECTRICITY SALES VOLUMES GREW STRONGLY

$m unless otherwise stated 1H FY 2015 1H FY 2014 % improvement

Electricity sales volume (TWh) 7.9 6.5 +22%

Gross margin $ per MWh 4.06 3.60 +13%

Operating costs $ per MWh (1.37) (1.65) +17%

Revenue excluding interest income

1,052.4 928.5 +13%

Underlying EBITDAIF1 23.1 14.1 +64%

Collection rate 99.90% 99.96% (-0.06%)

Forward contracted sales (TWh)

29 24 +21%

¹ Refer page 2 of presentation for definitions

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Customer growth demonstrates continuing ERM Business Energy value and competitiveness

SME currently operating in Vic, NSW, ACT, SA and Tas

ERM Business Energy continues to lead major retailers in service – ranked No. 1 for Customer Satisfaction for 4th consecutive year^

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ENERGY RETAILING CUSTOMER ACQUISITION CONTINUES RETAIL GROWTH TRAJECTORY

(Billed customers) (Contracted customers)

* National Meter Identifiers – unique identifiers for sites that can choose a retail supplier. A customer may have more than one site and more than one NMI. ^ Utility Market Intelligence (UMI) survey of major retail electricity retailers by independent research company NTF Group in 2014 (19th year of Survey). Research based on survey of 300 business electricity customers between November 2014 and January 2015. Four major electricity retailers benchmarked.

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Increased revenue and underlying EBITDAIF ¹ as a result of additional energy sales from Neerabup

Oakey now operating merchant and contracting internally to retail business and externally to third parties

GENERATION

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CONSISTENT PERFORMANCE

$m unless otherwise stated

1H FY 2015

1H FY 2014

% change

Revenue 39.6 36.3 +9%

Underlying EBITDAIF1 26.3 24.7 +6%

¹ Refer page 2 of presentation for definitions

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Garry West Corporate Communications & Investor Relations Manager 0457 140 650 gwest@ermpower.com.au

FOR MORE INFORMATION

ermpower.com.au

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