Slide 1: Financials 2011 Full Year Results
FINANCIALS 2011 FULL YEAR RESULTS 12 March 2012
Slide 2: Disclaimer
Disclaimer Certain statements in this presentation are based on the We urge you to read our annual report available on our website beliefs of our management as well as assumptions made by at www.dongenergy.com for a discussion of some of the and information currently available to the management. fac
Slide 3: Agenda
Agenda DONG Energy highlights Financials Outlook Appendix 3
Slide 4: Highlights full year 2011
Highlights full year 2011 Highlights1 Key figures DKKbn Revenue of DKK 56.8bn (up 4% y/y) 16 13.4 14.1 13.8 EBITDA of DKK 13.8bn (down 3% y/y) 14 12 Net debt of DKK 23.6bn (DKK 22.1 at Q4 10) 9.3 9.3 10 Adjusted net debt/CFO at 2.0x (1.8x in 2010) 8 Net result at DKK 2.9bn (DKK 4.5bn in 20
Slide 5: Gas & Oil
Gas & Oil NATURAL HEDGES FROM INTEGRATED POSITIONS Gas and Oil production Gas sourcing and gas sales E&P strategy Diversified sourcing portfolio (2011 volumes) North Sea diversified asset portfolio and 9% - Others prospect Support long term business sustainability 17% - LT contracts Limited co
Slide 6: Hejre field development decision in the North Sea
Hejre field development decision in the North Sea The investment in Hejre Increases and diversifies DONG Energy's Oil & Gas production Significantly contributes to the Danish shelf supply of oil and gas Materially mitigates the short oil position stemming from oil-indexed gas contracts Cre
Slide 7: Power: strategic themes and recent selected events
Power STRATEGIC THEMES AND RECENT SELECTED EVENTS Decarbonise Stabilise Diversify Thermal power – Decarbonising Thermal power – Selected events Denmark ‒ Transition to biomass ‒ Adaption of central capacity to evolving market conditions Mothballed 1.4 GW since 2008 Mothball a further 0.9 GW in
Slide 8: Power: strategic themes and recent selected events (wind)
Power STRATEGIC THEMES AND RECENT SELECTED EVENTS Decarbonise Stabilise Diversify Wind Power – strategic themes Wind Power – selected events Market leader (Offshore wind) Strengthened supply chain & logistics ‒ Industrialisation concept ‒ Acquisition of CT offshore ‒ New investments & maturing p
Slide 9: Power: increasing diversification and robustness
Power INCREASING DIVERSIFICATION AND ROBUSTNESS Reducing market price risk Continued geographic diversification power production (relative value) power production (volume) 100% 2% 3% 100% 1% 4% 3% 2% 8% 18% 12% 24% 18% 20% 2% 23% 80% 80% 12% 24% 32% 5% 14% 23% 60% 60% 4% 6% 4% 67% 93% 40% 40% 67% 70
Slide 10: On target to double EBITDA in 2015 compared to 2009
On target to double EBITDA in 2015 compared to 2009 STATUS ON INVESTMENT PLAN Note: Start year for wind farms refers to Commercial Operating Date *: First power in 2012 10
Slide 11: Divestments increasing robustness
Divestments increasing robustness Sizeable divestments in recent years in order to: ‒ Focus on core activities ‒ Balance investment in new assets ‒ Diversify risks Divestments partly through strategic partnerships with financial & industrial investors as well as foundations 2010 2011 2012 YTD DK
Slide 12: Agenda
Agenda DONG Energy highlights Financials Outlook Appendix 12
Slide 13: Market prices
Market prices Power prices (monthly average) Green Dark Spread (monthly average) EUR/MWh EUR/MWh 120 50 Forward Forward prices 40 prices 100 30 80 20 10 60 0 -10 40 -20 20 -30 -40 0 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 DK avg. Nord Pool (system) EEX UK DK avg. Nord Pool (syste
Slide 14: Selected Financial Figures
Selected Financial Figures Business Performance DKK million 2011 2010 EBITDA decreased to DKK 13.8bn (down 3% y/y) Revenue 56,842 54,616 Higher oil and gas production EBITDA 13,770 14,135 Renegotiation of gas contracts Financial items, net -282 -1,595 Lower margin on gas sales Profit after t
Slide 15: EBITDA development on Business Units
EBITDA development on Business Units EBITDA development (DKKbn) E&P 0.1 0.0 Rising Oil & Gas prices and higher production (up 8% y/y) Cost related to Siri repair of DKK 0.8bn 0.6 14.1 Wind Power 13.8 1.0 0.0 0.1 Higher production (up 11%% y/y) Higher costs from increased operations Thermal P
Slide 16: Adjusting capital structure target
Adjusting capital structure target Adjusting the capital structure target – rationale: Align to DONG Energy overriding financial steering figure EBITDA - With Business Performance EBITDA captures DONG Energy's underlying performance (better than CFO) Align to industry practise x times New: 4 Adj
Slide 17: Debt overview
Debt overview Gross interest-bearing debt (incl. hybrid capital) Key ratios gross loan portfolio (incl. hybrid capital) DKKbn 2011 2010 60 Share of fixed rate1 92% 90% Duration (years) 7.6 5.5 50 9.5 Average time to maturity (years) 2 9.6 9.1 8.1 Hybrid 40 1.5 0.7 0.5 Repo Average interest rate2 4.1
Slide 18: Hedging – Limited price exposure
Hedging – Limited price exposure Relative value of power prod. 2012 Exposure Power 2012 (DKKbn) DKKbn UK variable Other 1.5 price 3% 1.2 18% 1.0 0.8 0.9 0.5 0.4 56% 23% 0.0 Nord Pool Renewable power Thermal power Fixed prices production production variable price Impact in 2012 from 10% change (incl
Slide 19: Agenda
Agenda DONG Energy highlights Financials Outlook Appendix 19
Slide 20: Outlook
Outlook EBITDA outlook EBITDA 2012 expected to be in line with 2011 New oil & gas fields Oselvar and Marulk Full ownership of the Siri field New wind farms London Array, Lincs and Anholt Full year contribution from Walney wind farm Negative impact from Siri platform repair Renegotiation
Slide 21: Targets
Targets EBITDA target Target to: DKKbn Double EBITDA from 2009 to 2015 (double to DKK 17.6bn) 20 15 EBITDA in 2013 expected to be significantly above 2012 10 Full year effect from Anholt, London Array and Lincs Full year effect from Oselvar and Marulk 5 Positive impact from start up of the o
Slide 22: Q&A
Q&A For further information please visit our website dongenergy.com/EN/Investor/ 22
Slide 23: Outlook Market Prices
Outlook Market Prices Market prices Esti- mate (average) 2012 2011 Oil, Brent USD/bbl 105 Tull Gas, TTF EUR/MWh 25 23 Gas, NBP EUR/MWh 25 22 Electricity, Nord Pool system EUR/MWh 37 47 Electricity, Nord Pool, DK! EUR/MWh 46 49 Electricity, EEX EUR/MWh bye 51 Electricity, UK EUR/MWh 5S 55) Coal, API
Slide 24: Exploration & Production
Share of group EBITDA Exploration & Production Higher oil and gas prices 41% Operational figures Reserves (2P) mboe mboe 30 500 25 400 40% 20 65% 300 Oil 65% 63% 15 46% Gas 200 10 19% 60% 100 5 81% 54% 35% 37% 35% 0 0 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 2011: Reserve/Production ratio o
Slide 25: Wind Power (formerly Renewables)
Share of group EBITDA Wind Power (formerly Renewables) Contribution from new assets 13% Operational figures Offshore wind – Market share Europe TWh In operation, end 2011 In operation & under construction, end 2011 5 25% DONG Energy MW 4 20% 2,000 Under construction Others 24% 3 15% Operational asse
Slide 26: Thermal Power (formerly Generation)
Share of group EBITDA Thermal Power (formerly Generation) Lower production 17% Operational figures Market share 2011 TWh TJ 20 60 Thermal power production Heat production 50 15 40 35% 10 30 46% 54% 20 5 65% 10 0 0 2007 2008 2009 2010 2011 DONG Energy Other DONG Energy Other Thermal power production
Slide 27: Energy Markets
Share of group EBITDA Energy Markets Lower earnings from gas sales 14% Operational figures Gas sourcing TWh TWh Volumes from legacy DUC contracts declining 140 14 120 12 Going forward, DONG Energy's gas sourcing will be 100 10 increasingly diversified through: 80 8 Own gas production 60 6 L-
Slide 28: Sales & Distribution
Share of group EBITDA Sales & Distribution Stable earnings 15% Operational figures Market shares 2011 2011 2010 Sales Power Gas Gas sales TWh 20.3 24.2 Denmark 20% 29% Distribution of gas TWh 9.9 11.4 Sweden - 22% Holland 1% 1% Power sales TWh 7.6 8.2 Distribution of power TWh 8.8 9.1 Distribution P
Slide 29: Business Performance – 2011
Business Performance – 2011 In 2011, the difference between Business Performance and IFRS amounted to DKK 1.8bn The difference was primarily related to two effects: Criteria for the own use Initial recognition of certain physical fixed-price electricity and gas contracts exemption in IFRS no lon
Slide 30: Business Performance
Business Performance Results deferred for subsequent recognition in the Business Performance results 30
Slide 31: Dividend, Funding and Rating
Dividend, Funding and Rating Long term capital structure target Funding strategy and Debt Programmes Maintain a minimum rating of BBB+ / Baa1 External funding primarily to be carried out Adjusted net interest-bearing debt (1) up to 2.5 through parent company – to avoid structural times EBITDA
Slide 32: Net debt calculation 2011
Net debt calculation 2011 41.0 1.5 8.4 2.3 2.2 25.8 1.4 23.6 3.4 0.3 Gross debt Repo Marketable Cash & cash Receivables Receivables Other Net debt 50% Adjusted Securities equivalents from associates from minority outstanding net debt shareholders hybrid due 3005 32
Slide 33: Investments
Investments Investments in 2011 Main gross investments in 2011 Cash flow from investing activities -19.3bn Wind activities: DKK 10.9bn Purchase of securities (add back) 2.1bn Walney DKK 4.8bn Transactions with non-controlling interests 3.4bn London Array: DKK 3.6bn Loans to jointly controlled en
Slide 34: Larger decided construction projects
Larger decided construction projects Larger projects with production start in 2012-2015 Country MW (1) Commercial Own share Announced Spent Project Type of project operation date(2) of project capex (3) capex (4) Oselvar Oil/Gas field NO n.a. 2012 55% DKK 2.3bn DKK 1.9n Marulk Oil/gas field NO n.a.