Orsted · OMXCOP:ORSTED
Orsted — DONG Energy — H1 2012 Earnings Presentation
27 slides from Orsted's earnings presentation, Aug 10, 2012
Slide 1: Financials 2012 First Half Results
FINANCIALS 2012 FIRST HALF RESULTS 10 August 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 first half 2012
Highlights first half 2012 Highlights1 Key figures DKKbn EBITDA of DKK 6.6bn (down 27% y/y) 16 13.4 14.1 13.8 Net debt of DKK 29.9bn (up 26% vs. year-end 2011) 14 12 Adj. net debt/EBITDA at 2.8x (1.9x at FY11) 9.3 10 9.1 Net result at DKK 0.8bn (DKK 2.8bn in H1 11) 8 6.6 6 4.7 4.5 Outlook 4
Slide 5: Recent events: New framework agreement with Siemens
Recent events: New framework agreement with Siemens DONG Energy continues to lead the offshore industry New framework agreement with Siemens Energy Supply & servicing of 300 offshore wind turbines of 6MW each Key element to expand offshore wind and maintain a market leading position The new
Slide 6: Wind Power: Significant new assets on stream in 2012 and 2013
Significant new assets on stream in 2012 and 2013 Lincs – UK wind • 270MW offshore wind • DONG Energy's share: 25% • First power expected H2 12 Wind Power London Array – UK wind • 630MW offshore wind • DONG Energy's share: 50% • First power expected H2 12 Walney 2 – UK wind Anholt – DK wind • 184MW
Slide 7: Agenda
Agenda DONG Energy highlights Financials Outlook Appendix 7
Slide 8: Market prices
Market prices Hydro balance Green Dark Spread (monthly average) TWh EUR/MWh 20 50 2012 40 10 Forward prices 30 0 20 -10 10 0 -20 -10 -30 2011 -20 -40 -30 -50 -40 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 2011 2012 2013 Range 2004-2011 Median 2004-2011 DK avg. Nord Pool (system) EEX Source
Slide 9: Selected Financial Figures
Selected Financial Figures Business Performance DKK million H1 12 H1 11 2011 EBITDA decreased to DKK 6.6bn (down 27% y/y) Revenue 35,304 29,342 56,842 Higher oil & gas prices and higher production EBITDA 6,630 9,073 13,770 Increased production from new wind farms Financial items, net -603 -538
Slide 10: Explanation of selected items in H1 12
Explanation of selected items in H1 12 Net Working Capital (NWC) Writedown of gas-fired power stations Negative impact from NWC of DKK 3.0bn reflects: The total writedown of DKK 2.0bn reflects: - Reduction of accounts payables - Challenging market situation for gas-fired power stations with very low
Slide 11: Exploration & Production
Share of group EBITDA Exploration & Production Higher prices and production 52% Operational figures Operational highlights mboe Marulk started production in April 2012 30 25 Oselvar started production in April 2012 20 65% 63% 35% Siri repair expected to be extended into 2014 – cost 15 46% esti
Slide 12: Wind Power
Share of group EBITDA Wind Power Contribution from new assets 23% Operational figures Operational highlights TWh Above 25% of power production from renewables 5 30% 4 25% Walney 2 went into full operation in April 2012 20% 3 In H2 12 first power is expected from: 15% 2 - Lincs (full commercial
Slide 13: Thermal Power
Share of group EBITDA Thermal Power Lower production and lower GDS 12% Operational figures Operational highlights TWh PJ Refurbishment of Studstrup coal-fired power station – 20 60 increases lifetime and enables the station to be converted 50 15 to firing with biomass 40 10 30 Lower thermal prod
Slide 14: Energy Markets
Share of group EBITDA Energy Markets Lower earnings from gas sales -4% Operational figures Status on gas business TWh TWh Renegotiations ongoing with gas suppliers – DONG 140 14 Energy expects to obtain similar terms as other large gas 120 12 purchasers. Though delays are expected in concluding 10
Slide 15: Sales & Distribution
Share of group EBITDA Sales & Distribution Stable earnings 17% Operational figures Operational highlights H1 12 H1 11 Rising gas sales (up 34% y/y) primarily due to the Gas sales TWh 15.3 11.4 acquisition of Shell Gas Direct, which was completed in May 2012 Distribution of gas TWh 5.1 5.9 Power sa
Slide 16: Debt overview
Debt overview Gross interest-bearing debt and hybrid capital Key ratios loan portfolio (incl. hybrid capital) DKKbn H1 12 Q4 11 70 Share of fixed rate1 95% 92% 60 Duration (years) 2 9.3 7.7 9.5 Average time to maturity (years) 3 11.4 9.4 50 Hybrid 6.9 9.5 Average interest rate3 4.0% 4.1% 0.4 1.5 Rep
Slide 17: Hedging – Limited energy price exposure
Hedging – Limited energy price exposure Exposure Power 2012-2013 (DKKbn) DKKbn 2.5 2.1 2.0 1.5 1.2 1.0 0.7 0.5 0.0 0.0 Renewable power Thermal power production production (outright) (GDS/GSS) Before hedging After hedging Exposure Gas & Oil 2012-2013 (DKKbn) Accounting impact DKKbn Despite high hed
Slide 18: Agenda
Agenda DONG Energy highlights Financials Outlook Appendix 18
Slide 19: Outlook
Outlook EBITDA outlook (new guidance) EBITDA in 2012 is expected to be around 10% lower than EBITDA in 2011 The new guidance reflects changed expectations for Energy Markets due to a series of factors: Very low Green Spark Spreads Higher infrastructure costs for gas – primarily German transmissi
Slide 20: Targets
Targets EBITDA target DKKbn Target to: 20 Double EBITDA from 2009 to 2015 (double to DKK 17.6bn) 15 10 EBITDA in 2013 still expected to be significantly above 2011 and 2012 5 Full year effect from Walney, London Array and Lincs 0 Full year effect from Oselvar and Marulk 2009 2010 2011 2012 201
Slide 21: Q&A
Q&A For further information please visit our website dongenergy.com/EN/Investor/ 21
Slide 22: Outlook Market Prices
Outlook Market Prices Current estimate, Estimate, annual 9 March 2012 (rest of year) report 2011, 6M 2012 Actual, 2012 (average) Oil, Brent USD/bbl 97 105 113 Gas, T T F EUR/MWh 25 23 24 Gas, NBP EUR/MWh 25 23 24 Electricity, Nord Pool system EUR/MWh 31 37 33 Electricity, Nord Pool, DK 1 EUR/MWh 41
Slide 23: Business Performance – H1 12
Business Performance – H1 12 In H1 12, the difference between Business Performance and IFRS amounted to DKK 0.6bn Business Performance EBITDA DKK 6.6bn Adjustments DKK 0.6bn MtM of financial and physical hedging contracts relating to other periods DKK 0.2bn Deferred losses/gains relating to financ
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) up to 2.5 through parent company – to avoid structural times EBITDA
Slide 25: Net debt calculation H1 12
Net debt calculation H1 12 51.7 6.9 8.6 2.2 32.1 2.5 29.9 1.5 2.2 Gross debt Repo Marketable Cash & cash 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 H1 12 Main gross investments in H1 12 Cash flow from investing activities -12.1bn Wind activities: DKK 6.4bn Purchase of securities (add back) 5.6bn London Array: DKK 2.3bn Transactions with non-controlling interest -0.0bn Walney DKK 1.5bn Loans to jointly controlled e
Slide 27: 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) Sea Installer 1 Installation vessel n.a. n.a. 2012 51% USD 70m USD 51m London Array(5)