Orsted · OMXCOP:ORSTED

Orsted — DONG Energy — FY2010 Earnings Presentation

31 slides from Orsted's earnings presentation, 2011

  1. Slide 1: Full-year results 2010

    Full-year results 2010

  2. Slide 2: Disclaimer

    Disclaimer Certain statements in this presentation are based on the beliefs of our management as well as assumptions made by and information currently available to the management. Forward-looking statements (other than statements of historical fact) regarding our future results of operations, financ

  3. Slide 3: Agenda

    Agenda  DONG Energy highlights  Financials  Outlook  Appendix 3

  4. Slide 4: Highlights in 2010

    Highlights in 2010 Highlights Key figures DKKbn  Historical high EBITDA at DKK 14.1bn (up 59%) 16  Net debt reduced to DKK 22.1bn (down 18%) 13.6 14.1 14.2 14  Adjusted net debt to CFO at 1.8x (3.3x in 2009) 12 9.6 10.4 9.5  Net results increased to DKK 4.5bn (DKK 1.1bn) 10 9.0 8.2 8.8 8.8 8  P

  5. Slide 5: Clean and Reliable energy – Key events in 2010

    Clean and Reliable energy – Key events in 2010 Inauguration of new wind parks New fields in production and and decisions for new builds decisions for new builds  Gunfleet Sands  Nini Øst, Trym  Karnice & Karcino  Marulk (2012)  Anholt (2013)  Syd Arne phase 3 (2013)  Laggan-Tormore (2014) Ina

  6. Slide 6: Exploration & Production

    Exploration & Production 36% Higher oil and gas prices Share of group EBITDA Operational figures Reserves (2P) mboe mboe 25 500 20 400 65% 37% 15 63% 46% 12% 300 Oil 10 19% 200 Gas 88% 54% 35% 5 81% 37% 63% 100 0 2006 2007 2008 2009 2010 0 Oil Gas 2006 2007 2008 2009 2010 Financial development Highl

  7. Slide 7: Renewables

    12% Renewables Strong contribution from new assets Share of group EBITDA Operational figures Offshore wind – Market share in Europe TWh 5 25% In operation, end 2010 In operation and under construction, end 2010 4 20% MW 2,500 3 15% DONG <5% others, Energy, 24% 2,000 2 10% 31% Under construction Oper

  8. Slide 8: Generation

    14% Generation Significantly higher green dark spreads Share of group EBITDA Operational figures Reducing coal-fired capacity TWh TJ 25 70 Number of central coal-fired power units in Denmark 60 12 20 50 15 40 10 10 30 8 20 5 10 6 0 0 2006 2007 2008 2009 2010 4 Thermal power production Thermal heat p

  9. Slide 9: Energy Markets

    23% Energy Markets No negative time lag effects Share of group EBITDA Operational figures Diversified gas sourcing and sales TWh TWh 140 12 Gas sourcing 2010 Gas sales 2010 120 11 7% DUC 3% 8% 100 Own use 11% DK, Retail 80 26% DK, Wholesale Other long-term 10 22% agreements DE, Wholesale 60 6% SE, R

  10. Slide 10: Sales & Distribution

    15% Sales & Distribution Stable earnings Share of group EBITDA Operational figures Market shares 2010 2010 2009 Sales Power Gas Gas sales TWh 24.2 21.8 Denmark 21% 32% Distribution of gas TWh 11.4 10.0 Sweden 22% Holland 1% 1% Power sales TWh 8.2 8.5 Distribution Power Gas Distribution of power TWh

  11. Slide 11: Clean and reliable energy – The strategic direction

    Clean and reliable energy – The strategic direction More clean energy  On target to halve CO2 emissions by 2020  Significantly reducing the financial impact from CO2 costs Full value chain presence with diversified and reliable upstream position Upstream Midstream Downstream Development of strong

  12. Slide 12: Significant diversification of the power production

    Significant diversification of the power production Increasing geographic diversification Decreasing impact of CO2 costs MW Power generation capacity Power production 2007 Expected power production 2011 8,000 (volume) (volume) 7,000 4% 3% 0% 6,000 5,000 Denmark Denmark 31% 4,000 Sweden Sweden 3,000

  13. Slide 13: Actively addressing challenges on the gas market

    Actively addressing challenges on the gas market Diversified gas sourcing Indexation of gas contracts Indexation of gas contracts (expected volumes 2011) 100% 90% 80% 70% Other linked 60% Oil linked 50% Gas linked 40% Fixed Price 30% Equity Gas 20% 10% 0% Gas Sourcing Gas Sales Securing diversified

  14. Slide 14: Target to double EBITDA in 2015 compared to 2009

    Target to double EBITDA in 2015 compared to 2009  New assets contributing to the growth  Continued low level of maintenance capex Oselvar (NO)  Further diversifying the asset base Enecogen (NL) Marulk (NO) Syd Arne phase 3 Laggan-Tormore Trym (NO) London Array (UK) (DK) (UK) Walney 1+2 (UK) Lincs

  15. Slide 15: Selected challenges for the European Energy sector

    Selected challenges for the European Energy sector Challenges DONG Energy  Own E&P production  Continued depressed gas market with an increased oil/gas spread  Renegotiations  Diversified portfolio  Investments in wind farms and gas-fired  EU CO2 reduction targets capacity outside Nord Pool 

  16. Slide 16: Agenda

    Agenda  DONG Energy highlights  Financials  Outlook  Appendix 16

  17. Slide 17: Oil prices and gas prices

    Oil prices and gas prices Higher oil prices (Crude oil) Higher gas prices (TTF) USD/bbl EUR/MWh 140 35 120 30 100 Forward 25 80 price 20 Forward 60 15 price 40 10 20 5 0 0 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Source: Platts Source: Argus Continued de-link between oil and gas prices EUR/

  18. Slide 18: Market situation and power prices

    Market situation and power prices Cold winter in Q1 and Q4 in the Nordics Continued low hydro balance 30 20 Degrees Celcius Q1 10 Q4 10 25 10 20 15 0 10 -10 5 Actual TWh 0 Norm -20 -5 -10 -30 -15 -40 -20 -50 Last 9 years range Median 2009 2010 2011 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Sou

  19. Slide 19: Selected Financial Figures

    Selected Financial Figures DKK million 2010 2009  EBITDA increased by 59% y/y due to: Revenue 54,598 49,262  Increased production from new assets EBITDA 14,089 8,840  Higher energy prices from cold and dry winter Profit after tax 4,464 1,138  No negative effects from timelag Assets 137,339 120,5

  20. Slide 20: Debt overview

    Debt overview Gross interest-bearing debt (incl. hybrid capital) Key ratios gross loan portfolio (incl. DKKbn hybrid capital) 2010 50 0.5 Share of fixed rate1 49% 45 1.5 Duration (years) 5.5 0.7 40 8.1 8.1 Average time to maturity (years) 2 9.1 35 Other gross debt Average interest rate2 4.7% 30 9.8

  21. Slide 21: Further strengthening of capital structure target

    Further strengthening of capital structure target Doubling of EBITDA from 2009-2015 Changed capital structure target Reduced net investment expectation*  New: Adjusted net debt up to three times the  New expectation for 2011-2013: DKK 40bn cash flows from operating activities  Reduction following

  22. Slide 22: Market risks – Oil and Gas

    Market risks – Oil and Gas Gas contract portfolio E&P Consolidated exposure before hedging Gas Gas + Gas Oil Oil Oil Expected aggregated DKKbn oil/gas exposure 2011-2012 10 Effect from oil/gas de-link mitigated through  Oil indexed sales contracts 8  E&P production – both oil and gas 6  Flexibili

  23. Slide 23: Agenda

    Agenda  DONG Energy highlights  Financials  Outlook  Appendix 23

  24. Slide 24: Outlook for 2011

    Outlook for 2011 Expected Realised Market prices 2011 2010 Oil, Brent (USD/bbl) 95 80 Gas, TTF (EUR/MWh) 24 17 Gas, NBP (EUR/MWh) 23 17 Power, Nord Pool system (EUR/MWh) 55 53 Power, Nord Pool DK (average) (EUR/MWh) 53 52 Power, EEX (EUR/MWh) 50 44 Power, UK (EUR/MWh) 59 48 Coal, API 2 (USD/t) 122 9

  25. Slide 25: Outlook for 2011

    Outlook for 2011  New or significantly expanded activities are to contribute around DKK 1.3bn in 2011  A significantly lower EBITDA for Energy Markets in 2011 due to:  Decline in DUC volumes EBITDA  Lower share of oil-indexed sales contracts EBITDA in 2011 is expected to be in line with 2010  P

  26. Slide 26: Q&A

    Q&A FOR FURTHER INFORMATION PLEASE VISIT OUR WEBSITE dongenergy.com/EN/Investor/ 26

  27. Slide 27: Agenda

    Agenda  DONG Energy highlights  Financials  Outlook  Appendix 27

  28. Slide 28: 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) of up to through parent company – to avoid structural three times ca

  29. Slide 29: Net debt calculation end 2010

    Net debt calculation end 2010 DKKbn 45 38.4 40 35 30 (4.1) 0.02 4.0 26.2 25 (0.6) 22.1 (7.6) 20 (3.9) 15 10 5 0 29

  30. Slide 30: Investments

    Investments Investments in 2010 Main gross investments in 2010 Cash flow from investment activities -14.8bn Wind activities: DKK 6.4bn Purchase of securities (add back) 2.4bn  Walney: DKK 3.4bn Minorities' share of investments (add back) 3.9bn  London Array: DKK 1.0bn Dividends received -0.1bn  G

  31. Slide 31: Larger decided construction projects

    Larger decided construction projects Larger projects with commercial production start in 2011-2014 Commercial Own share Announced Project Type of project Country MW (1) Spent capex start of project capex(2) Trym Oil/gas field NO n.a. 2011 50% DKK 1.2bn DKK 0.9bn Walney 1+2 Offshore wind farm UK 184M

DONG Energy — FY2010 Earnings Presentation on 6ix