Orsted · OMXCOP:ORSTED
Orsted — Ørsted — Q3 2022 Earnings Presentation
46 slides from Orsted's earnings presentation, Nov 3, 2022
Slide 1: Investor presentation Q3 2022
Investor presentation Q3 2022 3 November 2022
Slide 2: Disclaimer
DISCLAIMER This presentation contains certain forward-looking statements which include projections of our short- and long-term financial performance and targets as well as our financial policies, including but not limited to, the statements and expectations contained in the “Financial Outlook” secti
Slide 3: Full-year EBITDA guidance increased again, and long-term earnings growth intact
Full-year EBITDA guidance increased again, and long-term earnings growth from renewable investments intact Reflections from CEO Full-year Group EBITDA EBITDA from offshore and onshore DKKbn assets in operation, DKKbn • Highly unusual and volatile period across markets Guidance increased DKK 2 bn sin
Slide 4: Strategic milestones achieved with new partnerships and acquisitions
Strategic milestones achieved with new partnerships and acquisitions Strategic highlights – Q3 2022 • Full-year EBITDA guidance upgraded to DKK 21 – 23 bn excluding new partnerships • Hornsea 2 offshore wind farm commissioned and 50 % farm- down completed • Entered into partnership with CIP to devel
Slide 5: New organisational structure and changes to executive management to drive global growth
New organisational structure and changes to executive management to drive global growth Purpose of new organisational structure Ørsted Group Executive Team • Drive growth under increasingly different local ~7.5 years of average industry experience market requirements ~6 years of average Ørsted tenur
Slide 6: Ørsted's first-ever farm-down of onshore assets
Ørsted’s first-ever farm-down of onshore assets 50 % farm-down of four onshore US projects • Consistent with strategy to potentially pursue opportunistic farm-downs within Onshore • Ørsted’s first farm-down of onshore assets and first time we farm-down multiple assets in one transaction • Transactio
Slide 7: Ørsted construction programme and pipeline
Ørsted construction programme and pipeline Gross renewable capacity MW 2,852 65 29,462 Offshore 2,080 1,498 Onshore 1,045 Other (incl. biomass and PtX) 920 5,158 3,214 1,628 680 2 18,240 1,166 130 253 900 2,080 15,109 2,078 5,093 4,160 22,224 11,067 8,871 Installed Greater German South Onshore Solar
Slide 8: Significant number of future offshore wind auctions and tenders
Significant number of future offshore wind auctions and tenders Outcome in 2022 H1 2023 H2 2023 2023 2023-2024 Holland Coast West Japan auctions German tender Utsira Nord Connecticut 1,520 MW >1,500 MW 8,000 - 9,000 MW 1,500 MW TBD H2 2022 H1 2023 H2 2023 2023 H1 2024 New York 3 Rhode Island IJmuide
Slide 9: Robust Q3 EBITDA highlights strong portfolio composition
Robust Q3 EBITDA highlights strong portfolio composition EBITDA of DKK 3.0 bn in Q3 2022 (DKK 4.2bn excluding EBITDA excluding new partnerships temporary IFRS 9 adjustments) • Offshore wind speeds above last year (7.7 m/s in Q3 2022 vs. 7.6 m/s in DKKm Q3 2021) but below norm (8.4 m/s) Q3 2021 2,984
Slide 10: Net profit, ROCE and Equity
Net profit, ROCE and Equity Net profit Hornsea 2 ROCE Equity Equity excl. hedging reserves DKKm farm down %, last 12 months DKKbn Hedging reserves 9,355 24.4 53.8 79.2 106.7 120.1 487 12.9 9,346 -27.6 -66.3 9 30 Sep 2021 30 Sep 2022 30 Sep 2021 30 Sep 2022 Q3 2021 Q3 2022 Net profit of DKK 9.4 bn RO
Slide 11: Cash flow, net debt and credit metric
Cash flow, net debt and credit metric Cash flow and net debt FFO / Adj. net debt DKKbn %1 14.4 43 11.3 35 1.0 45.7 41.4 -22.5 30 Jun CFO Capex Divestments Other 30 Sep 30 Sep 2021 30 Sep 2022 2022 2022 Net interest-bearing debt of DKK 45.7 bn, up DKK 4.3 bn FFO / Adj. net debt of 35 % • Operating ca
Slide 12: Liquidity reserve significantly above target
Liquidity reserve significantly above target Continued strong liquidity position Collateral and margin Liquidity reserve postings, DKKbn DKKbn • Collateral requirements continued to increase due to increasing and volatile power and gas prices 30.6 88.0 • Collateral postings of DKK 30.6 bn by end of
Slide 13: Debt and hybrids overview
Debt and hybrids overview Total gross debt and hybrids Effective funding costs – Gross debt Maturity profile of gross debt 30 September 2022, DKKbn DKKbn >95 % of gross debt (bond and bank loans) fixed interest rate. Remainder floating or inflation-linked 3.8% 30.9 3.1% 3.3% 10% 2.8% 22% 2.7% 2.6% 2
Slide 14: Non-financial ratios
Non-financial ratios Taxonomy-eligible KPIs Green share of energy generation Safety %, YTD %, YTD Total recordable injury rate, YTD 89 92 3.3 Revenue OPEX 3.0 73 80 30 Sep 2021 30 Sep 2022 30 Sep 2021 30 Sep 2022 EBITDA CAPEX Green share of energy at 92 % TRIR of 3.3 • More wind and solar assets in
Slide 15: 2022 guidance, strategic ambition, and financial guidance
2022 guidance, strategic ambition, and financial guidance 2022 guidance DKKbn Strategic ambition and financial guidance EBITDA (excluding new partnerships) 21 – 23 Ambition for installed renewable capacity by 2030 ~50 GW Implied EBITDA including new partnerships 32 – 34 - Offshore ~30 GW Gross inves
Slide 16: Q&A
Q&A Earnings call DK: +45 82 33 31 94 UK: +44 333 300 9266 US: +1 646 722 4902 For questions, please press 01
Slide 17: Appendix
Appendix Orsted
Slide 18: Renewable capacity as of September 2022
Renewable capacity as of 30 September 2022 Indicator, MW, gross 9M 2022 9M 2021 Δ FY 2021 Installed renewable capacity The installed renewable capacity is calculated as the Installed renewable capacity 15,019 12,678 2,431 12,980 cumulative renewable gross capacity installed by Offshore, wind power 8
Slide 19: Forecasted renewable capacity build-out
Forecasted renewable capacity build-out Global renewable energy capacity Global offshore wind capacity North American renewable capacity by technology1 excl. mainland China by technology2 GW installed GW installed GW installed CAGR 2 % biomass Americas Biomass 32% Batteries Asia Pacific +26 GW/year
Slide 20: Offshore wind build-out plan
Offshore wind build-out plan Installed capacity MW 2,852 22,224 Under construction 1,498 Awarded 1,045 920 3,214 1,628 1,166 130 11,067 900 8,871 Installed Greater German South Decided US North- US Mid-Atlantic Greater Baltica Baltica Hornsea 3 Decided capacity Changhua Portfolio1 Fork Wind (FID’ed)
Slide 21: Offshore market development – UK & Ireland
Offshore market development – UK & Ireland • UK Government has increased the ambition of offshore wind to 50 GW by 2030, including 5 GW of floating offshore wind to reduce reliance on imports and improve energy security • Commitment to decarbonise electricity system by 2035 and binding target to rea
Slide 22: Offshore market development – Continental Europe
Offshore market development – Continental Europe • New government has ambitions to increase offshore wind targets to 30 GW by 2030, 40 GW by 2035 and 70 GW by 2045 Germany • Tender volumes for 2023 have been increased to 8-9 GW and are expected to be allocated in auctions including both price and qu
Slide 23: Offshore market development – US
Offshore market development – US • Target of 5.6 GW offshore wind by 2027, of which 3.2 GW has already been awarded, through and including Dec. 2021 awards Massachusetts • Next auction expected end of 2022 or in 2023 • Target of 2 GW of offshore wind capacity by 2030, of which 1.2 GW remains availab
Slide 24: Offshore market development – APAC
Offshore market development – APAC • Taiwan has met its target of awarding 5.5 GW to be commissioned by 2025 • More than 6 GW of developing pipeline in preparation to participate future auctions Taiwan • Third round auction announced with 15 GW offshore wind target to be constructed from 2026-2035,
Slide 25: Upcoming offshore seabed competition 2022/2023
Upcoming offshore seabed competition 2022/2023 Ongoing H2 2022 2023 2023 Poland California Central Atlantic Gibbsland 11 - 13 GW ~4.5 GW TBC TBA Q4 2022 H1 2023 2023 2023 Scotland INTOG 1 Gulf of Mexico Oregon Celtic Sea floating ~8 GW ~3 GW 4 GW 1. Scotland Innovation and Targeted Oil & Gas Decarbo
Slide 26: Power-to-X: Hydrogen & green fuels project pipeline of +3GW
Power-to-X: Hydrogen & green fuels project pipeline of +3GW Heavy Chemicals & Refineries Steel H2 Green Hydrogen MeOH eMethanol eKerosene transport fertilizers Project Maximum Country Application Product(s) Partners potential (MW) 1 H2RES 2 H2 Everfuel, DSV, GHS, +more Maersk, SAS, CPH Airport, 2 Gr
Slide 27: Overview of US offshore wind federal permitting process
Overview of US offshore wind federal permitting process Planning & Analysis Leasing Site Assessment Construction & Operations ~ 2 years 1-2 years Up to 5 years ~ 2 years BOEM1 conducts a BOEM conducts BOEM grants developer Submit COP for NOI Construction and Operations Plan (COP) process of area auc
Slide 28: Onshore build-out plan
Onshore build-out plan Installed capacity MW Under construction 201 7 5,093 250 29 16 430 4,160 Installed Old 300 Helena Energy Lisheen 3 Ballykeel Sunflower Les Dix-Huit Decided capacity Center1 (FID’ed) and Q3 2022 installed capacity Region ERCOT, TX ERCOT, TX Ireland Northern Ireland SPP, KS Fran
Slide 29: Sustainability and ESG at Ørsted
Sustainability and ESG at Ørsted Green leadership Contributing to the global goals ESG ratings of Ørsted • In Q3 2022, 89 % of our energy generation was green. We target 99 % green energy generation by 2025. Rating agency Score Benchmark Ørsted is a LEAD participant of the UN • By 2025, we aim to be
Slide 30: ESG Performance
ESG Performance Total heat and power generation Q3 2022 Greenhouse gas emission intensity Scope 3 greenhouse gas emissions, Energy source, % g CO2e/kWh million tonnes CO2e Offshore wind Sustainable biomass Scope 3 Other scope 3 emissions Onshore wind Coal Scope 1-2 Natural gas sales Solar PV Natural
Slide 31: Group – Financial highlights
Group – Financial highlights Financial highlights Q3 2022 Q3 2021 D 9M 2022 9M 2021 D FY 2021 FY 2020 D EBITDA DKKm 12,317 2,984 313 % 25,361 16,043 58 % 24,296 18,124 34 % - New partnerships 9,346 (59) n.a. 10,916 5,296 106 % 8,507 - n.a. - EBITDA excl. new partnerships 2,971 3,043 (2 %) 14,445 10,
Slide 32: Offshore – Financial highlights
Offshore – Financial highlights Financial highlights Q3 2022 Q3 2021 D 9M 2022 9M 2021 D FY 2021 FY 2020 D EBITDA DKKm 9,652 1,304 640 % 17,475 12,777 37 % 18,021 14,750 22 % • Sites, O&Ms and PPAs 467 1,822 (74 %) 6,194 8,976 (31 %) 13,059 15,476 (16 %) • Construction agreements and 9,765 (9) n.a.
Slide 33: Onshore – Financial highlights
Onshore – Financial highlights Financial highlights Q3 2022 Q3 2021 D 9M 2022 9M 2021 D FY 2021 FY 2020 D EBITDA DKKm 867 413 110 % 2,792 819 241 % 1,349 1,131 19 % • Sites 610 285 114 % 1,677 324 418 % 535 451 19 % • Production tax credits and tax 597 307 94 % 1,844 902 104 % 1,382 1,004 38 % attri
Slide 34: Bioenergy & Other – Financial highlights
Bioenergy & Other – Financial highlights Financial highlights Q3 2022 Q3 2021 D 9M 2022 9M 2021 D FY 2021 FY 2020 D EBITDA DKKm 1,849 1,206 53 % 5,010 2,331 (115 %) 4,747 2,136 122 % • CHP plants 1,691 460 268 % 4,133 1,487 (178 %) 3,202 1,111 188 % • Gas Markets & Infrastructure 253 808 (69 %) 1,04
Slide 35: Currency and energy exposure
Currency and energy exposure Currency exposure Q4 2022 – Q3 2027 Energy exposure Q4 2022 – Q3 2027 DKKbn DKKbn Before hedging Before hedging After hedging After hedging 186.2 47.1 16.1 59.6 7.8 10.6 10.6 0.6 -11.1 -4.3 -0.2 -0.1 GBP1 USD2 NTD2 Power Gas Oil Risk after hedging, Effect of price +10 %
Slide 36: Hedging levels
Hedging levels Hedging level of total exposures for each BU, as of 31/12/2021 Offshore 100% 95% 67% 51% 26% Year 1 Year 2 Year 3 Year 4 Year 5 Onshore 79% 80% 77% 78% 78% Year 1 Year 2 Year 3 Year 4 Year 5 Bioenergy 31% 13% 4% Year 1 Year 2 Year 3 Exposure is calculated as the expected production (o
Slide 37: Capital employed
Capital employed Capital employed, DKKm Q3 2022 FY 2021 Q3 2021 FY 2020 Capital employed by segment %, Q3 2022 Intangible assets, and property and equipment 179,660 162,939 149,954 122,249 Offshore Assets classified as held for sale, net 747 860 694 793 Onshore Bioenergy & Other Equity investments a
Slide 38: Taxonomy-eligible KPIs
Taxonomy-eligible KPIs Unit 9M 2022 9M 2021 D FY 2021 Revenue DKKm 96,598 47,007 105 % 77,673 Taxonomy-eligible revenue % 73 67 6 %p 66 - Electricity generation from solar PV and wind power % 65 58 7 %p 56 - Cogeneration of heat/coal and power from bioenergy % 8 9 (1 %p) 10 Taxonomy-non-eligible rev
Slide 39: FFO/Adjusted net debt calculation
FFO/Adjusted net debt calculation Funds from operations (FFO), DKKm1 30 Sep 2022 31 Dec 2021 30 Sep 2021 EBITDA 33,614 24,296 21,047 Change in provisions and other adjustments (1,002) (422) (2,546) Change in derivatives (13,406) (2,050) 2,618 Variation margin (add back) 17,140 (627) 944 Reversal of
Slide 40: Hybrid capital in short
Hybrid capital in short Hybrid capital can broadly be defined as funding Due to hybrid’s equity-like features, rating Accounting treatment instruments that combine features of debt and agencies assign equity content to the hybrids when • Hybrid bonds are classified as equity equity in a cost-efficie
Slide 41: Ørsted's outstanding bonds
Ørsted’s outstanding bonds *Green bond proceeds from bonds & hybrid bonds issued in 2022 will be allocated at year-end Principal Fixed/Floating Green Allocated to green Avoided emissions (t CO2/year) Bond Type Issue date Maturity Face Value Coupon Coupon payments amount rate bond projects (DKKm) att
Slide 42: Financing strategy
Financing strategy At Ørsted, we have a centralised financing strategy The financing strategy optimizes the effect of a fully utilising our strong balance sheet and diverse integrated cash pool where cash at practically all of portfolio. the company’s more than 200 subsidiaries is made The strategy
Slide 43: Currency risk management
Currency risk management General principles • Highly certain cash flows are hedged • Cost-of-hedging is minimized by netting of exposures in the portfolio of projects, as well as use of construction contracts and debt in local currencies. Managing outright long risk • Operations: 5-year minimum hedg
Slide 44: Inflation and interest rate risks
Inflation and interest rate risks 2022-2031 revenue from assets in operation, under construction, and awarded as of 31 December 2021, % 100 ~55 ~35 ~20 ~10 ~35 Total revenue Inflation-indexed Merchant Fixed nominal cash Fixed nominal cash Duration-matched Derivatives Net inflation risk flows from as
Slide 45: Glossary
Glossary Balancing costs Ineffective hedges The cost of settling intraday differences between expected (day- Expected overhedging of future periods, which we, according to IFRS, ahead) and actual (real-time) production have to recognise already in the quarter where we report Intermittency costs Pric
Slide 46: Investor Relations contacts
Rasmus Hærvig Henriette Stenderup Head of Investor Relations Investor Relations Coordinator rakol@orsted.com hnste@orsted.com Sabine Lohse Valdemar Høgh Andersen Lead Investor Relations Officer Investor Relations Officer sablo@orsted.com vehan@orsted.com