Origin Energy Limited · ASX:ORG
Origin Energy — Morgan Stanley Asia Pacific Summit (November 2004)
23 slides from Origin Energy's conference presentation, Nov 2, 2004
Slide 1: ASX announcement cover note: Origin Energy presentation
Origin energy To Company Announcements Office Facsimite 1300 300 021 Company Australian Stock Exchange Limited Date 2 November 2004 From Bill Hundy Pages 23 Subject PRESENTATION Please find attached a copy of a presentation entitled “Strategy, Performance and Growth - Delivering Value for Shareholde
Slide 2: Strategy, Performance and Growth: Delivering Value for Shareholders
Strategy, Performance and Growth Delivering Value for Shareholders Presentation to the Morgan Stanley Asia Pacifi
Slide 3: A growing market and a growing company
End use sales of electricity, gas, and related products and services in Australia and New Zealand is estimated at around A$40 billion pa and has grown steadily with energy usage A GROWING MARKET + Growth in domestic demand for energy has averaged over 4% per annum in Australia over the last 20 years
Slide 4: Business strategy: position in competitive segments of energy markets
Origin’s business strategy is to position in the competitive (rather than regulated) segments of the energy markets... Structure of the Australian Gas and Electricity Industry » Dereguiation and privatisation of Australia’s largely Government owned energy businesses commenced in the 1990's » Since t
Slide 5: Implementation of strategy has grown operations and profits
implementation of Origin’s financial objectives and business strategy has grown the company’s operations and profits 2,500 2P Reserves (PJe) 2.5 up 118% Customers (millions) 2,000 5 up 79% EBITDA by Segment (AS, miilions} 2.0 600 1,500 15 500 5 1,000 1.0 400 - Jun Jun Jun Jun- Jun- 60 o1 02 03 O4 Ju
Slide 6: Origin has increased returns per share significantly
Consequently Origin has increased returns per share significantly over the last four years. cents per share (A$) Page 5 60 wu o 40 &CFPS H EPS @ DPS ‘oO ‘01 54 53 ‘02, 03 ‘04 * Final Dividend - unfranked + Total Dividend - fully franked # Total Dividend - franked to 4 cents * Origin’s capital base h
Slide 7: Total shareholder return versus ASX100 companies
This performance has seen Origin meet its target of top third performance when compared with ASX100 companies Total Shareholder Return (TSR) 1 March 2000 to 18 October 2004 15% icture Group 50% Caltex Austratia Ltd L Trustees Australia Ltd Wesfarmers perties Group/New Woolworths Ltd Orica Ltd Cola A
Slide 8: Growth has required significant capital expenditure
Origin’s growth has required significant capital expenditure. Acquisitions in the Retail and Generation areas have provided immediate contributions... Juno00 Jun O01 Jun 02 Jun 03 Jun 04 ($m) ($m) ($m) ($m) ($m) Growth & Acquisitions E&P 47 56 129 179 313 Retail 3 344 78 154 46 Generation 70 46 116
Slide 9: Cash flow measures as the primary measure of performance
Origin uses cash flow measures as the primary measure of performance within the business....... Jun00 Jun01 Jun02Z Jun03 Jun 04 ($m) ($m) ($m) (Sm) — ($m) EBITDA 271 305 405 491 532 Non-cash items (8) (8) (17) 13 2 Change in Working Capital (20) 11 16 39 (48) Stay in business CAPEX (67) (83) (65) (9
Slide 10: Conservatively geared balance sheet
..while maintaining a conservatively geared balance sheet Junoo Jun01 JunO2 Jun03 Jun 04 Net debt ($m) 431 727 633 732 861 Total equity ($m) 1,240 1,328 1,626 1,790 1,939 Debt / (debt + equity) (%) 26% 35% 28% 29% 31% Net interest expense ($m) (30) (32) (43) (49) (45) Net interest cover (x EBIT) 4.4
Slide 11: Growth driven by acquisitions and retail consolidation
Origin’s growth in the past few years has been driven by acquisitions in conjunction with consolidation of energy retailers Eastern Australia Eastern Australia Market share of customers: 1998 Market share of customers: 2003 Origin Energy 16% Origin HM Origin Energy Energy Listed Companies 4% [Govern
Slide 12: Gas strategy has grown reserves and new contracts
Origin’s strategy of looking for gas where it is easy to market, rather than easy to find, has resulted in significant growth in reserves and new contracts....... Proved and Probable Reserves (PJe} 2500 2600 1500 1000 500 4 Grigin Energy Proved and Probable (2P) Reserves Mi 2P reserves Jun 00 Jun Ot
Slide 13: Oil price has risen despite declining forward curves
The price of oil has risen dramatically in recent months despite declining contract forward curves Historical Tapis oil price and selected forward curves oo, . 80 + Origin is not highly leveraged to the oil market 7o a o * Crude oil and condensate make up only 7% of Origin’s reserves and around 16%
Slide 14: Integrated players will drive next round of generation investment
Looking further ahead it is most likely that integrated players will drive the next round of investment in generation Victorian monthly average pool prices and retail tariffs weemesnes $450 Tariffs in the retail electricity o> market are relatively stable with $125 + customers billed quarterly and p
Slide 15: Near term growth driven by E&P expenditure
Origin’s near term growth will be driven by expenditure on E&P projects already disclosed to the market... Growth capital expenditure estimates and acquisitions compared with free cash flow for FY ‘04 450 « FY ‘04 growth capex and 400 | = Z acquisitions totalling FY 2006 ree $422 million funded $350
Slide 16: Major projects in the capital expenditure program
Major projects in this capital expenditure program include the following...... ‘Coal seam gas (CSG) | Perth Basin Perth Basin oil (50%) *3 oil discoveries (1st in basin since 1966) producing 3,000 bapd net *Production to increase towards 5,000 bopd net BassGas Project (37.5%) « Gross production per
Slide 17: Acquisition of 51.2% interest in Contact Energy
in July 2004 Origin announced the acquisition of a 51.2% interest in Contact Energy of New Zealand from Edison Mission Energy (EME)........ * Increases markets accessible to Origin with known economic, competitive and regulatory environment « Strategically compatible business ~ business focussed on
Slide 18: Contact Energy is an integrated energy producer and retailer
Contact Energy is an integrated energy producer & retailer... Retail and generation coverage across NZ 28% of generation capacity ® 50% thermal Otahuhu B @ 15% geothermal Combined cycle : ® 35% hydro gas turbine 330MW 29% of electricity retail market Otahuhu A : Gas turbine T7MW 40% of gas retail ma
Slide 19: Contact adds size and diversity to Origin
The purchase of a controlling interest in Contact Energy will add significant size and diversity to Origin and expand opportunities for growth........ Reported Company Results Origin Contact* (AS million) (YE 30 June, 2004 A) | (YE 30 Sept, 2004 E) Revenue” 3,556 1,150 EBITDA* 532 400 NPAT* 205 130
Slide 20: Completion of acquisition of EME's interest in Contact
Origin has completed the acquisition of EME’s 51.2% interest in Contact and acquired a further 0.2% interest through the compulsory offer to minor shareholders « Acquisition of EME’s stake completed on 1 October, 2004 « Contact Board size reduced to 6, with three Origin appointees including Grant Ki
Slide 21: Long term goal of EPS growth of 10-15% pa
Origin maintains the long term goal of achieving EPS growth of 10-15% pa through sound strategy, internally generated growth and effective acquisitions EBITDA by Segment (AS$m) 1000 900 - 800 5 700 + 600 - iS) ; oe on BE&P Retail B Generation H Networks Page 20 * The combined growth across Origin’s
Slide 22: Slide 22
Slide 23: For more information
For more information. Page 22 For more information on Origin Energy please contact Angus Guthrie Manager, Investor Relations Email: angus .guthrie@originenergy.com.au Mobile: + 61-4-1786 4255 Origin Energy will be moving office on 12 November 2004. The office contact numbers for Angus Guthrie will t
Origin Energy — Morgan Stanley Asia Pacific Summit (November 2004) on 6ix