Slide 1: ASX announcement cover note
To Company Announcements Office Facsimile 1300 135 638 For personal use only Company ASX Limited Date 18 August 2022 From Helen Hardy Pages 65 Subject Presentation to Analysts and Financial Markets Please find attached a release on the above subject. Authorised for lodgement by: Helen Hardy Company
Slide 2: 2022 Full Year Results
Origin Energy For personal use only 2022 Full Year Results Year ended 30 June 2022 Frank Calabria, CEO & Lawrie Tremaine, CFO 18 August 2022
Slide 3: Outline
Outline For personal use only 1. Introduction - Frank Calabria 2. Financial Review - Lawrie Tremaine 3. Operational Review - Frank Calabria 4. Strategy and Outlook - Frank Calabria 2 18 August 2022 2022 Full Year Results Announcement
Slide 4: Introduction
For personal use only Introduction Frank Calabria, CEO
Slide 5: Financial highlights
Financial highlights For personal use only Underlying Profit Underlying EBITDA Free Cash Flow $407 $2,114 $1,062 million million million (23.2 cps) Up $32 million with higher APLNG Up $93 million. Statutory loss of -$1,429 distributions partly offset by lower Energy Up from $2,036 million in FY2021
Slide 6: For personal use only
For personal use only • Extraordinary year in global and Australian energy markets • Action needed to sustain system reliability and accelerate transition • Actively engaged with Government and regulators on future policy settings • We are taking the lead in driving the energy transition • Execution
Slide 7: Elevated and volatile commodity price environment
Elevated and volatile commodity price environment Electricity spot price Coal price Gas price For personal use only 400 $/MWh 700 A$/t 50 A$/GJ 350 600 40 300 500 250 30 400 200 300 20 150 200 100 10 50 100 - - - Jul-21 Jul-20 Jul-22 Jul-22 Jul-20 Jul-21 Jan-22 Jan-21 Jan-21 Jan-22 Jul-20 Jul-21 Jul
Slide 8: Unprecedented energy market conditions
Unprecedented energy market conditions For personal use only NEM coal output • Lower output from baseload coal as plant reliability issues saw over 33 4,000 MW of coal generation off line in June • Weather increased customer demand, particularly in June 32 • Gas and renewables filled the supply gap
Slide 9: Urgent action required to sustain system reliability and accelerate transition
Urgent action required to sustain system reliability and accelerate transition For personal use only Sustain system reliability Accelerate transition • Recent acute crisis has abated • Significant investment is required in renewable energy, firming generation and transmission to underpin the new • H
Slide 10: Our ambition and strategy were refreshed in March
Our ambition and strategy were refreshed in March For personal use only Our ambition To lead the energy transition through cleaner energy and customer solutions Unrivalled customer Accelerate renewable Deliver reliable energy solutions and cleaner energy through the transition Our • Leading brand pr
Slide 11: Good progress executing our strategy
Good progress executing our strategy Achieved to date Ambition For personal use only Unrivalled • Strategic NPS1 +20 by FY2026 • Strategic NPS of 51, top score among Tier 1 energy providers • $200 - $250 million cash costs saving FY2024 vs FY2018 customer • 2.2 million accounts on Kraken • 600k Broa
Slide 12: Our strategy creates value for shareholders and lowers emissions
Our strategy creates value for shareholders and lowers emissions For personal use only • Climate Transition Action Plan to be put to shareholder advisory vote at AGM • The plan details updated targets to accelerate emissions reduction • New target consistent with 1.5°C pathway to be announced • Outl
Slide 13: Purpose led organisation
Purpose led organisation Getting energy right For personal use only Our Customers Our Communities Our Planet Our People ✓ COVID-19 and flood support ✓ Spent $318 million with regional ✓ Announced potential earlier ✓ TRIFR up to 4.01, number of ✓ APLNG continued to support suppliers, or 20% of our Er
Slide 14: Financial Review
For personal use only Financial Review Lawrie Tremaine, CFO
Slide 15: Underlying Profit up 30% to $407 million
Underlying Profit up 30% to $407 million For personal use only Movements in Underlying Profit ($m) (287) 820 (614) 105 (10) 79 407 314 FY21 IG - Share of IG - Other EM Corporate Depreciation & Other FY22 APLNG profit EBITDA EBITDA EBITDA amortisation 1 Impact of coal supply Lower depreciation on Hig
Slide 16: Market conditions have had a number of material impacts on financial results
Market conditions have had a number of material impacts on financial results For personal use only Item Impact • Energy Markets electricity and gas ~$4.4 billion uplift recognised Mark to market of partially in income statement & partially in equity Effective risk derivatives and management impairme
Slide 17: APLNG record cash distribution
APLNG record cash distribution For personal use only APLNG distribution and Origin oil hedging 1,600 110 • APLNG distributed $1,595 million cash to Origin 1,400 100 with $433 million received as unfranked dividend 1,200 90 • Realised oil price was US$74/bbl (A$103/bbl) 1,000 80 • The cash proceeds n
Slide 18: APLNG sell down and distributions main drivers of stronger free cash flow
APLNG sell down and distributions main drivers of stronger free cash flow ($m) FY22 FY21 Change For personal use only • Lower earnings from Energy Markets ($614 million) Underlying EBITDA, adjusted for 135 1,009 (874) • Oil hedging loss on higher prices vs gain in prior year ($257 non-cash items mil
Slide 19: Capital management flexibility restored
Capital management flexibility restored Capital structure For personal use only Free Cash Flow1 and Free Cash Flow Yield2 ($m) 6.0 3.5x 10.5% 10.1% 5.0 3.0x Adj. Net Debt / EBITDA 2.5x Adj. Net Debt ($b) 4.0 6.6% 2.0x 3.0 4.9% 1,062 1.5x 2.0 1,030 1.0x 1.0 0.5x 0.0 0.0x FY19 FY20 FY21 FY22 FY21 FY22
Slide 20: Dividend and capital management
Dividend and capital management For personal use only • Final dividend of 16.5 cps, franked to 75%, determined for total FY2022 dividend of 29 cps − 47% Adjusted Free Cash Flow payout ratio − Expect to be tax paying going forward • $250 million share buyback completed in June • ~ $750 million combin
Slide 21: Energy Markets Underlying EBITDA impacted by coal supply disruption and lower tariffs
Energy Markets Underlying EBITDA impacted by coal supply disruption and lower electricity customer tariffs Movements in Underlying EBITDA ($m) Electricity gross profit down $692 million to $207 million: For personal use only • Margin impacts (-$693 million): − Coal supply disruption resulted in incr
Slide 22: Integrated Gas Underlying EBITDA up 62%
Integrated Gas Underlying EBITDA up 62% Movements Underlying EBITDA ($m) For personal use only 119 (331) (444) 1,622 (244) (43) 2,780 2,568 23 2,125 1,881 1,837 1,837 1,135 1,135 1,158 Share of APLNG Integrated Gas - Other (+$989 million) (-$287 million) FY21 LNG volume LNG price Domestic Opex/other
Slide 23: FY2022 Operational Review
For personal use only FY2022 Operational Review Frank Calabria, CEO
Slide 24: Energy Markets
For personal use only Energy Markets
Slide 25: FY2022 electricity margin impacted by lower tariffs and coal supply constraints
FY2022 electricity margin impacted by lower tariffs and coal supply constraints For personal use only Lower tariffs due to COVID-19 • FY2022 tariffs impacted by low wholesale prices during FY2021 • Entered FY2022 with a well contracted legacy coal position Coal supply disruption • Material under-del
Slide 26: FY2023 customer tariffs rising but offset by higher fuel costs
FY2023 customer tariffs rising but offset by higher fuel costs Customer tariffs increasing Eraring coal costs rising For personal use only 300 $/MWh 700 A$/t 250 600 DMO cut-off 13 May 500 200 400 150 300 100 200 50 100 - - FY22 Swap FY22 Avg FY23 Swap Newcastle 5500 kcal Newcastle 6000 kcal FY23 Av
Slide 27: Positive gas outlook with cost of supply locked in for FY2023
Positive gas outlook with cost of supply locked in for FY2023 LNG netback and domestic gas prices Energy Markets contracted gas supply For personal use only 50 A$/GJ 250 PJ 40 200 30 150 20 100 10 50 - - FY22 FY23 FY24 FY25 FY26 1 1 APLNG legacy contract Fixed Price JKM netback price - Wallumbilla (
Slide 28: Retail market environment
Retail market environment Customer churn Share of NEM customer accounts For personal use only Monthly churn rate (%) Electricity and gas1 (%) 30% 25% 21% 20% 15% Series 1 10% Tier 1 peers Oct Oct Oct Oct Oct Apr Apr Apr Apr Apr Jul Jul Jul Jul Jul Jan Jan Jan Jan Jan Tier 2 retailers (~10) FY18 FY19
Slide 29: Leading retail business
Leading retail business Large and growing customer base Superior customer experience Low-cost operator For personal use only Customer accounts (‘000) Strategic NPS (12-month average) Cash cost savings ($m) 4,458 4,236 4,266 4 5 (3) (9) (19) FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 FY18 FY21 FY22 FY24
Slide 30: Growing scale while delivering higher customer value
Growing scale while delivering higher customer value Growing future revenue streams Broadband Retail X For personal use only Gross profit ($m) Broadband customer accounts (‘000) Customers accounts migrated to Kraken (‘000) +98% 2,200 Solar 68% 61 Customer happiness index Community Energy Services 33
Slide 31: Octopus – global enterprise software platform in energy and other utilities
Octopus – global enterprise software platform in energy and other utilities Exponential growth Global reach increasing Future energy services For personal use only Customer accounts (‘000, LHS) and Market size (# of households) 20,000 revenue growth (£m, RHS) 5,000 4,000 15,000 3,000 10,000 2,000 5,
Slide 32: Integrated Gas
For personal use only Integrated Gas
Slide 33: APLNG strong operated reserves replacement of ~100% over years
APLNG strong operated reserves replacement of ~ 100% over 5 years APLNG reserves and cumulative production (PJ) For personal use only 20,000 • Reserve base significantly de-risked: 1P now ~60% of 3P 16,000 • 116% operated and non operated 2P reserves replacement during FY2022 12,000 • 129% Operated
Slide 34: APLNG continued stable production and low cost operations
APLNG continued stable production and low cost operations Quality resource and assets Low cost base For personal use only PJ $m Capex + Opex $/GJ 800 3,000 4.5 2,500 600 4.0 2,000 400 1,500 3.5 1,000 200 3.0 500 - - 2.5 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22 Operated Production Non-operated Product
Slide 35: APLNG strong field performance allowed focus on optimising operations
APLNG strong field performance allowed focus on optimising operations Reduced sustain activity and Network infrastructure investment Strong well and facility reliability For personal use only capital costs enabling accelerated production # of wells $m PJ 300 600 100% 45 40 250 450 95% 35 200 30 25 1
Slide 36: APLNG strong operational performance and high commodity prices led to record revenue
APLNG strong operational performance and high commodity prices led to record revenue Strong commodity prices Record revenue For personal use only A$/GJ $m PJ 50 10,000 700 40 8,000 650 30 6,000 600 20 4,000 550 10 2,000 - - 500 H1 H2 H1 H2 H1 H2 FY20 FY21 FY22 FY20 FY21 FY22 Average LNG price Averag
Slide 37: Guidance
For personal use only Guidance Frank Calabria, CEO
Slide 38: FY2023 Guidance – Integrated Gas
FY2023 Guidance – Integrated Gas Provided on the basis that market conditions and the regulatory environment do not materially change, adversely For personal use only impacting operations. The following guidance is based on current market conditions and the regulatory environment. Ongoing volatility
Slide 39: Outlook – Energy Markets
Outlook – Energy Markets For personal use only FY2023 • There remains a wide range of potential earnings outcomes. We will continue to assess the outlook with a view to providing an update when there is less uncertainty • We expect higher earnings in FY2023 • The gas business is expected to deliver
Slide 40: Origin is strategically positioned to benefit from the energy transition
Origin is strategically positioned to benefit from the energy transition For personal use only • Energy retailing – leading customer scale and technology will create improved margins and grow value through low cost, superior customer experience and new products. • Energy supply – diverse portfolio a
Slide 41: Questions
For personal use only Questions
Slide 42: Appendix
For personal use only Appendix
Slide 43: Administered and suspended market in June will have an ongoing impact
Administered and suspended market in June will have an ongoing impact into FY2023 and FY2024 For personal use only • Late FY2022 was a volatile period in east coast electricity and gas markets, with a number of unprecedented steps taken by the market operator • AEMO applied administered pricing (cap
Slide 44: Domestic gas supply expected to satisfy demand in 2023
Domestic gas supply expected to satisfy demand in 2023 For personal use only • The Commonwealth Government has indicated it will consider invoking the ADGSM following the release of the latest ACCC Gas Inquiry Report • The report noted there is 167 PJ of uncontracted gas from the LNG producers • The
Slide 45: Items excluded from Underlying Profit
Items excluded from Underlying Profit For personal use only • $2.2 billion non-cash post-tax impairment of goodwill – Reconciliation from Statutory to Underlying Profit discussed on slide 45 ($m) • $114 million in disposals, relating primarily to the $113m loss on divestment of 10% of APLNG – discus
Slide 46: Energy Markets impairment
Energy Markets impairment For personal use only Statutory Loss of $1,429 million for FY2022 was driven primarily by the non-cash impairment of Energy Markets • Non-cash impairment of Energy Markets (-$2,196 million): − Recent extraordinary market conditions have resulted in an uplift in the value of
Slide 47: Completion of APLNG sale
Completion of APLNG sale For personal use only • Loss on divestment of APLNG (-$113 million): − Non-cash impairment of APLNG recognised HY2022 (-$193 million) − No impairment of remaining 27.5% − Total completion adjustments (+$80 million): being reversal of foreign currency translation reserve (+$1
Slide 48: Large-scale Generation Certificates (LGC) strategy
Large-scale Generation Certificates (LGC) strategy Adjustments to Statutory Profit For personal use only Statutory Shortfall CY2020 CY2021 CY2022 Underlying Impact across various financial years ($m) Profit charge/(refund) surrender cost surrender cost surrender cost Profit FY2021 CY2020 and CY2021
Slide 49: Electricity forward price by state
Electricity forward price by state (A$/MWh) 300 NSW 300 QLD For personal use only 250 250 200 200 150 150 100 100 50 50 - - Jul-20 Nov-20 Mar-21 Jul-21 Nov-21 Mar-22 Jul-22 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 200 VIC 250 SA 200 150 150 100 100 50 50 - - Jul-20 Oct-20 Jan-2
Slide 50: Strong liquidity position with low interest costs
Strong liquidity position with low interest costs Interest paid ($m) and average interest rate For personal use only 500 8% 400 6% Interest 300 4% • FY2022 interest expense lower by $52 million due to a 200 lower debt balance and debt refinancing activity 2% 100 • Average interest rate of 4.3% for F
Slide 51: APLNG Project Finance
APLNG Project Finance 7.5 40% For personal use only 7.0 35% 6.5 US$ bn 30% 6.0 25% 5.5 5.0 20% Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Jun-22 Project finance debt (LHS) Gearing (RHS) • $US3.1 billion project debt repaid since project inception • Gearing1 ratio of 21% and Adjusted Net
Slide 52: APLNG sales mix and legacy domestic contracts
APLNG sales mix and legacy domestic contracts For personal use only Legacy domestic contracts: FY2022 FY2021 • ~40 PJ p.a. to Origin ending 2034 Sales mix (100%) PJ % PJ % • 472 PJ over 21 years to Rio Tinto ending 2031 • ~16 PJ p.a. to QAL ending 2041 Contract LNG 450 68% 450 69% • ~25 PJ p.a. to Q
Slide 53: Managing oil price exposure
Managing oil price exposure Oil hedging program designed to protect capital structure through commodity cycles For personal use only FY2023 FY2023 Full Year Oil Price Sensitivity • Origin share of APLNG JCC oil price exposure is ~17 MMboe 120 As at 2 August, approximately 43% priced at US$108/bbl ba
Slide 54: Capex stable, and investing in growth
Capex stable, and investing in growth For personal use only Origin capex ($m) Capex 500 450 • Managing sustaining capex on key assets: major 400 outage at Eraring and other maintenance activities 350 • Other sustaining capital: regulatory market reforms 300 (5 minute settlement), LPG 250 • Productiv
Slide 55: Customer accounts’ movements
Customer accounts’ movements 50 Electricity ('000) For personal use only (‘000) FY22 FY21 Change 40 30 Electricity1 2,733 2,625 108 20 Business 31 30 1 10 Retail – Residential 2,243 2,246 (4) - Retail – SME 291 259 32 (10) Retail – Community Energy Services 168 90 78 (20) Gas 1,277 1,249 29 NSW QLD
Slide 56: Cost to serve and bad and doubtful debts
Cost to serve and bad and doubtful debts Cost to serve Bad and doubtful debts For personal use only 700 168 300 1.09% 164 159 600 250 136 135 0.87% 38 500 0.74% 0.73% 200 0.70% 0.71% 0.69% 400 10 150 300 110 114 108 0.59% 90 93 100 83 80 83 72 75 200 58 100 50 - - FY18 FY19 FY20 FY21 FY22 FY24 FY17
Slide 57: Segment summary
Segment summary For personal use only Energy Markets Integrated Gas Integrated Corporate Total - Share of APLNG Gas - Other ($m) FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 Underlying EBITDA 365 979 2,134 1,145 (297) (10) (88) (78) 2,114 2,036 Underlying EBIT (111) 427 1,044 224 (316) (36) (90
Slide 58: Underlying ROCE – month rolling
Underlying ROCE – 12 month rolling For personal use only 30 June 2022 30 June 2021 Change As at Change ($m) ($m) ($m) (%) Capital Employed Net Assets 10,022 9,479 543 6% Adjusted Net Debt 2,838 4,639 (1,801) (39%) Net derivative (assets) / liabilities (2,935) 1,147 (4,082) (356%) Origin's share of A
Slide 59: Proportionate Free Cash Flow
Proportionate Free Cash Flow For personal use only Free cash flow prepared on the basis of proportionate consolidation of APLNG. Energy Markets Integrated Gas Integrated Corporate Proportionate Total ($m) - Share of APLNG Gas - Other FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 FY22 FY21 Underlying EBITD
Slide 60: Reconciliation of Adjusted Net Debt
Reconciliation of Adjusted Net Debt For personal use only Issue Issue Hedged Hedged AUD $m AUD $m AUD $m $m Currency Notional Currency Notional Jun-22 Jun-22 Jun-22 Interest bearing Debt & CCIRS FV Adjusted net debt liabilities2 adjustments AUD debt AUD 826 AUD 826 807 - 807 USD Debt left in USD USD
Slide 61: Energy Markets segment revenue reconciliation
Energy Markets segment revenue reconciliation For personal use only The table below reconciles the difference between segment revenue and customer revenue disclosed in the Electricity, Natural Gas, LPG and Solar & Energy Services tables. FY22 FY21 Change Change ($m) ($m) ($m) (%) Energy Markets segm
Slide 62: Financial Instruments and fair value adjustments
Financial Instruments and fair value adjustments Balance Sheet Impact Income Statement Impact Financial asset/(liability) Pre-tax Post-tax Gain/(loss) For personal use only Inc/(dec) in Inc/(dec) in Gain/(loss) Gain/(loss) Total inc/(dec) included in 30 Jun 2021 financial other net excluded from exc
Slide 63: Important notices
Important notices For personal use only Forward looking statements This presentation contains forward looking statements, including statements of current intention, statements of opinion and predictions as to possible future events. Such statements are not statements of fact and there can be no cert
Slide 64: Important notices
Important notices All figures in this presentation relate to businesses of the Origin Energy Group (Origin, or the Company), being Origin Energy Limited and its controlled entities, for the For personal use only reporting period ended 30 June 2022 (the period) compared with the reporting period ende
Slide 65: For more information
For more information For personal use only Peter Rice General Manager, Capital Markets Email: peter.rice@originenergy.com.au Office: +61 2 8345 5308 Mobile: + 61 417 230 306 Lindsay Donnelly Group Manager, Investor Relations Email: lindsay.donnelly@originenergy.com.au Office: +61 2 8345 5502 Mobile: