Slide 1: Interim Results
Interim Results For the period ended 30 June 2012 1
Slide 2: Disclaimer
Interim Results Disclaimer For the period ended 30 June 2012 This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Centrica shares or other securities. This presentation contains certain forward-looking statements with respect to the
Slide 3: Sir Roger Carr, Chairman
Sir Roger Carr Chairman 3
Slide 4: Nick Luff, Group Finance Director
Nick Luff Group Finance Director 4
Slide 5: Commodity prices and spreads
Interim Results Commodity prices and spreads For the period ended 30 June 2012 Average month ahead oil and gas prices Clean dark and spark spreads Oil NBP Gas 20 ($/barrel) (p/therm) Clean Dark Spread (£/MWh) 113 15 111 10 58 57 Clean Spark Spread (£/MWh) 5 0 H1 2011 H1 2012 2010 2011 2012 2013 Aver
Slide 6: Financial headlines
Interim Results Financial headlines For the period ended 30 June 2012 Period ended 30 June 2012 2011 Continuing operations: Revenue (£m) 11,977 11,509 EBITDA (£m) 1,773 1,613 Adjusted operating profit (£m) 1,447 1,262 Adjusted effective tax rate 43% 43% Group result: Adjusted earnings (£m) 767 673 A
Slide 7: Operating profit analysis
Interim Results Operating profit analysis For the period ended 30 June 2012 Period ended 30 June (£m) 2012 2011 Downstream UK 563 518 Upstream UK 682 531 Storage UK 36 39 North America 166 174 Adjusted operating profit 1,447 1,262 Share of JV / associates’ interest and taxation (49) (61) Depreciatio
Slide 8: Operating profit analysis: Downstream UK
Interim Results Operating profit analysis For the period ended 30 June 2012 Downstream UK Period ended 30 June (£m) 2012 2011 Downstream UK 563 518 Upstream UK 682 531 Storage UK 36 39 North America 166 174 Adjusted operating profit 1,447 1,262 Above figures include share of joint ventures and assoc
Slide 9: Downstream UK
Interim Results Downstream UK For the period ended 30 June 2012 Operating profit & key drivers Operating Profit Period ended 30 June (£m) 2012 2011 Residential energy 345 281 Residential services 125 110 Business 93 127 Downstream UK 563 518 Residential energy revenue (£m) Residential services Busin
Slide 10: Operating profit analysis: Upstream UK
Interim Results Operating profit analysis For the period ended 30 June 2012 Upstream UK Period ended 30 June (£m) 2012 2011 Downstream UK 563 518 Upstream UK 682 531 Storage UK 36 39 North America 166 174 Adjusted operating profit 1,447 1,262 Above figures include share of joint ventures and associa
Slide 11: Upstream UK
Interim Results Upstream UK For the period ended 30 June 2012 Operating profit & key drivers Operating Profit Period ended 30 June (£m) 2012 2011 Gas 508 414 Power 174 117 Upstream UK 682 531 Average sales price Gas & liquids Power generation (TWh) & production volumes achieved CSS / power price (£/
Slide 12: Operating profit analysis: Storage UK
Interim Results Operating profit analysis For the period ended 30 June 2012 Storage UK Period ended 30 June (£m) 2012 2011 Downstream UK 563 518 Upstream UK 682 531 Storage UK 36 39 North America 166 174 Adjusted operating profit 1,447 1,262 Above figures include share of joint ventures and associat
Slide 13: Operating profit analysis: North America
Interim Results Operating profit analysis For the period ended 30 June 2012 North America Period ended 30 June (£m) 2012 2011 Downstream UK 563 518 Upstream UK 682 531 Storage UK 36 39 North America 166 174 Adjusted operating profit 1,447 1,262 Above figures include share of joint ventures and assoc
Slide 14: North America
Interim Results North America For the period ended 30 June 2012 Operating profit & key drivers Operating Profit Period ended 30 June (£m) 2012 2011 Residential energy 101 105 Business energy 60 58 Services 11 9 Upstream & wholesale (6) 2 North America 166 174 Residential energy Business energy Upstr
Slide 15: Cash flow
Interim Results Cash flow For the period ended 30 June 2012 Period ended 30 June (£m) H1 2012 H1 2011 FY 2011 Opening net debt (3,435) (3,312) (3,312) EBITDA 1,773 1,613 3,128 Working capital movements (333) (317) 165 Margin calls 132 123 (26) Interest and tax (334) (319) (862) Net capex (1,525) (49
Slide 16: Capital and acquisition expenditure
Capital and acquisition Interim Results For the period ended 30 June 2012 expenditure Period ended 30 June (£m) H1 2012 H1 2011 2012e3 UK upstream gas and oil 309 240 800 UK upstream power1 168 83 300 North America 39 29 100 UK gas storage 33 19 50 British Gas 66 85 150 Other 25 16 50 Total pre-acqu
Slide 17: Summary and outlook
Interim Results Summary and outlook For the period ended 30 June 2012 Increase in half year earnings • Residential energy supply profit up following exceptionally mild 2011 • Challenging economic environment – delivering double digit growth in BGS – BGB impacted by site closures and competitive clim
Slide 18: Sam Laidlaw, Chief Executive
Sam Laidlaw Chief Executive 18
Slide 19: Overview
Interim Results Overview For the period ended 30 June 2012 Growth in challenging market conditions • Delivered further growth in earnings • Group-wide cost reduction programme on track, sharpening the business to maintain competitive edge • Driving long-term growth in British Gas • Increased size an
Slide 20: Downstream leadership
Interim Results Downstream leadership For the period ended 30 June 2012 British Gas Contact NPS • High levels of customer service, enabled by 60 investment in systems and call centre technology – improved NPS 40 – efficient call handling – targeted sales efforts 20 • Leadership in innovation and onl
Slide 21: Delivering for customers
Interim Results Delivering for customers For the period ended 30 June 2012 British Gas • Making energy choices simple, transparent and fair – new bill design and simplified tariff structure – helping to rebuild trust in the industry • Developing business services in a weak economic environment – hel
Slide 22: Upstream transformation
Interim Results Upstream transformation For the period ended 30 June 2012 2009: Assets in decline 2012: Long term sustainability 80 80 (mmboe) (mmboe) 70 70 Exploration 60 60 Future developments Then current developments 50 50 Under development 40 40 Planned future 30 developments 30 Producing field
Slide 23: Delivering our investment pipeline
Delivering our investment Interim Results For the period ended 30 June 2012 pipeline Centrica Energy Reserves into production (mmboe) • Further progress on gas and oil development 100 projects 80 Annabel – to bring 140mmboe of reserves into East production 60 Valemon – moving ahead with £1.4bn Cygnu
Slide 24: Enhanced scale in North America
Interim Results Enhanced scale in North America For the period ended 30 June 2012 Direct Energy North America residential customer accounts (million) • Benefiting from enhanced scale and synergies 4 +18% • Successful bolt-on acquisition strategy in US Energetix and NYSEG North and Texas 3 – Energeti
Slide 25: Enhanced scale in North America
Interim Results Enhanced scale in North America For the period ended 30 June 2012 Direct Energy • Continued DEB volume growth – small commercial growth – tailored offerings – high levels of customer service • Services positioned for growth – established on-demand model – developing cross-sell and pr
Slide 26: Cost reduction programme
Interim Results Cost reduction programme For the period ended 30 June 2012 Cost reduction split by • Group-wide £500m cost reduction programme, business sharpening the business £bn • On track to deliver half the savings in 2012 0.5 – 5% reduction in British Gas H1 operating cost 0.4 • Good progress
Slide 27: Capital deployment
Interim Results Capital deployment For the period ended 30 June 2012 • Sustaining production upstream – substantial progress towards 75mmboe production target – deploying capital to bring production on-stream • Investing in offshore wind – established partnership model – progressing towards Race Ban
Slide 28: Summary
Interim Results Summary For the period ended 30 June 2012 • Good progress in first half – delivered growth in challenging market environment – competitive advantage through cost reduction programme • Strategic milestones – geographic diversity – step change in upstream gas and oil portfolio – enhanc