Orsted · OMXCOP:ORSTED
Orsted — DONG Energy — 9M 2011 Earnings Presentation
27 slides from Orsted's earnings presentation, Nov 7, 2011
Slide 1: Financials 2011 9 Months Results
FINANCIALS 2011 9 MONTHS RESULTS 7 November 2011
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 first 9 months 2011
Highlights first 9 months 2011 Highlights1 Key figures DKKbn EBITDA of DKK 11.7bn (up 10% y/y) 16 13.4 14.1 14.2 CFO of DKK 8.6bn (down 12% y/y) 14 11.7 12 Net debt of DKK 27.3bn (DKK 22.1 at Q4 10) 9.3 10.4 9.3 9.5 10.6 9.7 10 8.8 8.6 Adjusted net debt to CFO at 2.3x (1.8x in 2010) 8 Net
Slide 5: Q3 key event: Divestment of share in Gunfleet Sands
Q3 11 key event: Divestment of share in Gunfleet Sands Divestment of 49.9% of the Gunfleet Sands • Offshore projects in operation • Offshore projects in construction Anholt offshore wind farm to Marubeni Corporation 400 MW WoDS Barrow 389 MW 90 MW Horns Rev Key terms of the divestment 160 MW Middelg
Slide 6: Key events after Q3 11: Increasing the share in South Arne field
Key events after Q3 11: Increasing the share in South Arne field Acquisition of 2.4% share of the South Arne Oil & Gas field from Noreco Increases DONG Energy's ownership interest in the field to 36.8% Simultaneously, DONG Energy will – proportionally to its ownership – increase capex in the o
Slide 7: Key events after Q3 11: Acquisition of Shell Gas Direct
Key events after Q3 11: Acquisition of Shell Gas Direct DONG Energy has agreed to acquire 100% of DONG Energy's portfolio in the UK the downstream B2B gas sales company Shell Generation / Trading / Gas Direct E&P (WoS) Wholesale Retail Establishes a fully integrated market position in the UK In
Slide 8: Agenda
Agenda DONG Energy highlights Financials Outlook Appendix 8
Slide 9: Market prices
Market prices Power prices (monthly average) Green Dark Spread (monthly average) EUR/MWh EUR/MWh 100 50 90 Forward prices 40 Forward prices 80 30 70 20 60 10 50 0 40 30 -10 20 -20 10 -30 0 -40 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012 DK avg. Nord Pool (system) EEX UK DK avg. Nord
Slide 10: Selected Financial Figures
Selected Financial Figures Business Performance DKK million 9M 11 9M 10 FY 2010 EBITDA increased to DKK 11.7bn (up 10% y/y) Revenue 40,985 39,048 54,616 Higher energy prices EBITDA 11,685 10,583 14,136 Renegotiation of gas contracts Financial items, net -95 -1,008 -1,595 Higher oil and gas p
Slide 11: Exploration & Production
Share of group EBITDA Exploration & Production Higher oil and gas prices 40% Operational figures mboe 25 20 65% 63% 15 46% 64% 62% 10 19% 5 81% 54% 35% 37% 38% 36% 0 2007 2008 2009 2010 9M 10 9M 11 Oil Gas Financial development Highlights DKKbn EBITDA increased 34% to DKK 4.6bn 8 7.5 7 Rising oi
Slide 12: Renewables
Share of group EBITDA Renewables Contribution from new assets 11% Operational figures TWh 5 25% 4 20% 3 15% 2 10% 1 5% 0 0% 2007 2008 2009 2010 9M 10 9M 11 Renewable power production TWh Share of total power production in DONG Energy (rhs) Financial development Highlights DKKbn EBITDA increased 16
Slide 13: Generation
Share of group EBITDA Generation Solid earnings, slightly above 9M 10 17% Operational figures TWh TJ 20 60 50 15 40 10 30 20 5 10 0 0 2007 2008 2009 2010 9M 10 9M 11 Thermal power production Thermal heat production (rhs) Financial development Highlights DKKbn EBITDA increased 13% to DKK 1.9bn 10
Slide 14: Energy Markets
Share of group EBITDA Energy Markets Lower earnings from gas sales 19% Operational figures Gas sourcing TWh TWh Going forward, DONG Energy's gas sourcing will be 140 14 increasingly diversified through: 120 12 Own gas production 100 10 80 8 L-T purchase contracts with international suppliers 6
Slide 15: Sales & Distribution
Share of group EBITDA Sales & Distribution Stable earnings 13% Operational figures 9M 11 9M 10 Gas sales TWh 14.3 17.2 Distribution of gas TWh 7.2 7.6 Power sales TWh 5.6 6.0 Distribution of power TWh 6.5 6.7 Transport of oil Mbbl 55 51 Financial development Highlights DKKbn EBITDA of DKK 1.5bn in
Slide 16: Debt overview
Debt overview Gross interest-bearing debt (incl. hybrid capital) Key ratios gross loan portfolio (incl. hybrid capital) DKKbn 9M 11 9M 10 60 Share of fixed rate1 88% 79% 50 Duration (years) 7.0 5.7 9.5 8.1 Hybrid Average time to maturity (years) 2 9.6 9.2 40 3.6 1.1 0.5 Repo Average interest rate2 3
Slide 17: Agenda
Agenda DONG Energy highlights Financials Outlook Appendix 17
Slide 18: Unchanged Outlook and Targets
Unchanged Outlook and Targets EBITDA Outlook EBITDA in 2011 is expected to be in line with 2010 Target Double EBITDA from 2009 to 2015 (i.e. double to DKK 17.7bn) Net investments Outlook DKK 40bn for 2011-2013 Capital Structure Target Adjusted net debt not to exceed three times cash flow from operat
Slide 19: Q&A
Q&A For further information please visit our website dongenergy.com/EN/Investor/ 19
Slide 20: Commodity prices
Outlook Market Prices Current Assumption Realised 9M Selected market prices assumption 2011 2011, Annual 2011 (rest of year) Report 2010 Commodity prices Oil, Brent (USD/bbl) 112 95 112 Gas, TTF (EUR/MWh) 24 24 23 Power, Nord Pool system (EUR/MWh) 47 55 51 Power, Nord Pool DK (avg.) (EUR/MWh) 53 53
Slide 21: Business Performance – three column Income Statement
Business Performance – three column Income Statement Purpose: Increase transparency and better reflect the underlying actual performance MtM movements from hedges and A three column Income some physical deliveries will be Statement is introduced splitting Cease to apply accounted for directly in P/L
Slide 22: Business Performance – the methodology
Business Performance – the methodology The Business Performance result shows the result related to the current reporting period excluding effects from MtM movements not attributable to the period's result Realised valuein period + Market valueend of period - Market valuestart of period = IFRS Value
Slide 23: Business Performance – 9M 2011
Business Performance – 9M 2011 In 9M 2011, the difference between Business Performance and IFRS amounted to DKK 2.1bn 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
Slide 24: 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) not to through parent company – to avoid structural exceed three tim
Slide 25: Net debt calculation end 9M 2011
Net debt calculation end 9M 2011 42.7 3.6 5.7 1.2 0.3 2.2 29.5 0.9 27.3 3.6 Gross debt Repo Marketable Cash & cash Overdraft Receivables Receivables Net debt 50% Adjusted Securities equivalents from associates from minority outstanding net debt shareholders hybrid due 3005 25
Slide 26: Investments
Investments Investments in 9M 2011 Main gross investments in 9M 2011 Cash flow from investing activities -15.0bn Wind activities: DKK 8.4bn Purchase of securities (add back) 1.7bn Walney DKK 4,3bn Transactions with non-controlling interests 0.3bn London Array: DKK 2.4bn Loans to jointly controll
Slide 27: Larger decided construction projects
Larger decided construction projects Larger projects with commercial production start in 2011-2014 Country MW (1) Commercial Own share Announced Project Type of project Spent capex(3) start of project capex(2) Trym Oil/gas field NO n.a. 2011 50% DKK 1.2bn DKK 1.2bn Walney 1+2(4) Offshore wind farm