Orsted · OMXCOP:ORSTED
Orsted — Ørsted — Q2 2021 Earnings Presentation
41 slides from Orsted's earnings presentation, Aug 12, 2021
Slide 1: Investor presentation Q2 2021
Investor presentation Q2 2021 12 August 2021
Slide 2: Disclaimer
DISCLAIMER This presentation contains certain forward-looking statements, including but not limited to, the statements and expectations contained in the “Financial Outlook” section of this presentation. Statements herein, other than statements of historical fact, regarding our future results of oper
Slide 3: Significant US offshore capacity awarded, and several strategic partnerships established
Significant US offshore capacity awarded, and several strategic partnerships established Highlights – Q2 2021 • Full-year EBITDA guidance maintained despite low wind speeds • Ocean Wind 2 awarded 1,148 MW 20-year OREC contract in the competitive solicitation in New Jersey • Launched key strategic pa
Slide 4: Ørsted awarded 1,148 MW offshore wind contract in New Jersey
Ørsted awarded 1,148 MW offshore wind contract in New Jersey 1,148 MW Ocean Wind 2 project • Selected to negotiate a 20-year Offshore Renewable Energy Certificate (OREC) following a competitive solicitation • The 20-year OREC price is USD 84.03 per MWh from 2029, with a 2% annual escalator (correspo
Slide 5: Ørsted construction programme and pipeline
Ørsted construction programme and pipeline Gross renewable capacity MW 2,543 25,197 Offshore Onshore 2,080 920 ~22 GW Bioenergy & Other (incl. PtX) 1,142 2,368 4,659 1,714 907 2 16,510 10 GW 1,297 900 2,080 1,320 12,084 4,659 2,078 18,458 2,455 12 GW 9,771 7,551 Installed Hornsea 2 Greater Onshore S
Slide 6: Significant number of offshore wind auctions and tenders in the coming months
Significant number of offshore wind auctions and tenders in the coming months Q2 2021 Award in Q4 2021 Award in H2 2021 H2 2021 H2 2021 H1 2022 H2 2022 H2 2021 – 2023 New Jersey 2 Maryland French tender 4 Rhode Island German tender Taiwan auction German tender Connecticut 4 Awarded 2,658 MW ~400-1,2
Slide 7: Q2 2021 – Low wind speeds offset by strong performance from Bioenergy & Other
Q2 2021 – Low wind speeds offset by strong performance from Bioenergy & Other Group EBITDA increased DKK 5.2 bn - Comparable EBITDA in line Effects impacting comparability DKKm • No EBITDA from the divested Distribution, B2C, and city light businesses Q2 2020 2,955 • Positive accounting effect as we
Slide 8: Low wind speeds in North-western Europe during H1 2021
Low wind speeds in North-western Europe during H1 2021 Q1 2021 Q2 2021 8 Source: https://aws-dewi.ul.com/knowledge-center/wind-trends-bulletins/
Slide 9: Q2 2021 – Financial performance
Q2 2021 – Financial performance CFO Net profit Free cash flow CAPEX Net interest-bearing debt development DKKm 5,544 DKKm Divestments DKKm 1,605 13,190 172 194 116 12,067 3,147 4,485 -1,605 8,197 10,591 45 -3,757 -12,133 -825 Q2 2020 Q2 2021 Q2 2020 Q2 2021 31 Mar Free cash Hybrid Lease Exchange 30
Slide 10: Q2 2021 – Financial and non-financial ratios
Q2 2021 – Financial and non-financial ratios FFO / Adj. net debt ROCE Greenhouse gas emissions Safety % % (scopes 1 & 2), g CO2e/kWh, YTD Total recordable injury rate, YTD 63 64 3.7 56 3.1 43 12.5 10.8 30 Jun 2020 30 Jun 2021 30 Jun 2020 30 Jun 2021 30 Jun 2020 30 Jun 2021 30 Jun 2020 30 Jun 2021 FF
Slide 11: Implementation of the EU taxonomy
Implementation of the EU taxonomy Taxonomy-non-eligible Taxonomy-eligible Taxonomy- Taxonomy- Taxonomy- eligible revenue: eligible EBITDA: eligible CAPEX: >65 % >95 % >99 % Revenue EBITDA CAPEX Taxonomy-eligible: Offshore, onshore, and Taxonomy-eligible: Offshore, onshore, and Taxonomy-eligible: Mai
Slide 12: 2021 guidance, strategic ambition and financial guidance
2021 guidance, strategic ambition and financial guidance 2021 guidance DKKbn Strategic ambition and financial guidance EBITDA without new partnerships 15-16 Ambition for installed renewable capacity by 2030 ~50 GW Gross investments 39-41 - Offshore ~30 GW - Onshore ~17.5 GW Business unit EBITDA FY 2
Slide 13: Q&A
Q&A Earnings call DK: +45 78 15 01 09 UK: +44 333 300 9268 US: +1 833 823 0590 For questions, please press 01
Slide 14: Appendix
Appendix Orsted
Slide 15: Renewable capacity as of June 2021
Renewable capacity as of 30 June 2021 Indicator, MW H1 2021 H1 2020 Δ FY 2020 Installed renewable capacity The installed renewable capacity is calculated as the Installed renewable capacity 12,084 10,460 1,624 11,318 cumulative renewable gross capacity installed by Offshore wind power Ørsted before
Slide 16: 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 20 % Offshore wind +12 %/year Asia Paci
Slide 17: Offshore wind build-out plan
Offshore wind build-out plan Installed capacity MW 1,498 18,458 Under construction 1,045 920 Awarded 1,142 2,368 1,714 900 9,771 1,320 7,551 Installed Hornsea 2 Greater Decided US North- US Mid- German Greater Baltica Baltica Decided capacity Changhua (FID’ed) and East cluster1 Atlantic Portfolio3 C
Slide 18: Offshore market development – US
Offshore market development – US • Target of 3.2 GW of offshore wind capacity by 2030 target Massachusetts • Current auction ongoing for up to 1.6 GW of offshore wind capacity with bid award expected 17 December 2021 • Target of 2 GW of offshore wind capacity by 2030, of which 1.2 GW remains availab
Slide 19: Offshore market development – UK and Continental Europe
Offshore market development – UK and Continental Europe • UK Government target annual build-out of 3 GW to reach 40 GW capacity by 2030, including 1 GW of floating wind by 2030 United • Leasing round in Scotland for 10 GW underway with applications due mid July 2021, results expected by end 2021/ear
Slide 20: Offshore market development – APAC
Offshore market development – APAC • Taiwan has met its target of awarding 5.5 GW to be commissioned by 2025 • 600 MW Greater Changhua 3 project ready for future auctions Taiwan • Draft regulation for third round auction announced with 15 GW offshore wind target to be constructed from 2026-2035 up f
Slide 21: Upcoming offshore seabed auctions
Upcoming offshore seabed auctions 2022 2022+ 2022+ Norway Hawaii Gulf of Maine ~ 4.5 GW TBC TBC H2 2021 H2 2021 / H1 2022 H2 2021 / H1 2022 2022 2022 2022+ ScotWind New York Bight Poland California North Carolina Gulf of Mexico ~ 10 GW ~ 7 GW ~ 7 GW ~ 4.5 GW TBC TBC 21 All timelines and capacities b
Slide 22: Hydrogen project pipeline of +3GW
Hydrogen project pipeline of +3GW Project Current Country Application Partners potential (MW) Westküste 100 / Raffinerie Heide, Hynamics, 1 HySCALE100 700-2,100 Holchim, +more 2 Lingen Green Hydrogen 550 bp 3 Yara Sluiskil 100 Yara Yara, ArcelorMittal, Dow, Zeeland 7 4 SeaH2Land 1,000 Refinery, Nort
Slide 23: Overview of US offshore wind federal permitting process
Overview of US offshore wind federal permitting process Planning & Analysis Leasing Site Assessment Construction & Operations BOEM1 conducts a BOEM conducts BOEM grants developer Submit COP for NOI Construction and Operations Plan (COP) process of area auctions and up to five years (not all identifi
Slide 24: Onshore build-out plan
Onshore build-out plan Installed capacity MW 518 4,659 Under construction 430 302 62 298 227 367 2,455 Installed Western Trail Muscle Shoals Haystack Lincoln Land Kennoxhead 1 Old 300 Helena Energy Decided capacity Center1 (FID’ed) and Q2 2021 installed capacity Region ERCOT, TX SERC, AL SPP, NE MIS
Slide 25: Sustainability and ESG at Ørsted
Sustainability and ESG at Ørsted Green leadership Contributing to the global goals ESG ratings of Ørsted • In Q2 2021, 93 % of our energy generation was green. Rating agency Score Benchmark We target 99 % green energy generation by 2025. Ørsted is an active and LEAD participant of • By 2025, we aim
Slide 26: ESG Performance
ESG Performance Green Share Scope 1 and 2 Emissions Scope 3 Emissions Total heat and power generation Q1 2021 Scope 1 and 2 greenhouse gas emissions, Scope 3 greenhouse gas emissions, Energy source, % g CO2e/kWh million tonnes CO2e Offshore wind Coal Onshore wind Natural gas Biomass 4% 9% -98% -50%
Slide 27: Group – Financial highlights
Group – Financial highlights FINANCIAL HIGHLIGHTS Q2 2021 Q2 2020 D FY 2020 FY 2019 D EBITDA DKKm 8,196 2,956 177 % 18,124 17,484 4% • Offshore 7,527 2,361 219 % 14,750 15,161 (3 %) • Onshore 178 312 (43 %) 1,131 786 44 % • Bioenergy & Other 503 185 172 % 2,136 1,495 43 % Operating profit (EBIT) 6,2
Slide 28: Offshore – Financial highlights
Offshore – Financial highlights FINANCIAL HIGHLIGHTS Q2 2021 Q2 2020 D FY 2020 FY 2019 D Wind speed (m/s), offshore wind farms EBITDA DKKm 7,527 2,361 219 % 14,750 15,161 (3 %) 12.5 • Sites, O&Ms and PPAs 2,368 2,578 (8 %) 15,476 13,750 13 % 10.5 9.9 9.8 9.4* 8.4 8.6 7.8 • Construction agreements an
Slide 29: Onshore – Financial highlights
Onshore – Financial highlights FINANCIAL HIGHLIGHTS Q2 2021 Q2 2020 D FY 2020 FY 2019 D Wind speed (m/s), US onshore wind farms EBITDA DKKm 178 312 (43 %) 1,131 786 44 % • Sites (5) 103 n.a. 451 466 (3 %) 8.0 8.0 7.7 7.3 7.6 7.4* • Production tax credits and tax attributes 312 268 16 % 1,004 628 60
Slide 30: Bioenergy & Other – Financial highlights
Bioenergy & Other – Financial highlights FINANCIAL HIGHLIGHTS Q2 2021 Q2 2020 D FY 2020 FY 2019 D EBITDA DKKm 503 185 172 % 2,136 1,495 43 % • CHP plants 351 152 131 % 1,111 1,152 (4 %) • Gas Markets & Infrastructure 232 (190) n.a. 411 390 5% • LNG - - n.a. - (957) n.a. • Distribution, B2C, and city
Slide 31: Currency and energy exposure
Currency and energy exposure Currency exposure Q3 2021 – Q2 2026 Energy exposure Q3 2021 – Q2 2026 DKKbn DKKbn Before hedging Before hedging After hedging After hedging 70.5 38.4 20.7 17.9 17.2 11.5 0.0 0.3 0.2 -0.9 -2.4 -0.2 GBP1 USD2 TWD2 Power Gas Oil Risk after hedging, Effect of price +10 % Eff
Slide 32: Capital employed
Capital employed Capital employed, DKKm H1 2021 FY 2020 H1 2020 FY 2019 Capital employed by segment Intangible assets and property and equipment 138,459 122,249 114,496 106,685 %, H1 2021 Offshore Equity Investments and non-current receivables 902 1,928 2,241 1,044 Onshore Net working capital, work
Slide 33: FFO/Adjusted net debt calculation
FFO/Adjusted net debt calculation Funds from operations (FFO), DKKm H1 2021 FY 2020 H1 2020 EBITDA* 21,423 18,124 18,489 Change in provisions and other adjustments 606 (403) (1,003) Reversal of gain (loss) on divestment of assets (5,196) (805) (878) Income tax paid (952) (1,118) (1,296) Interests an
Slide 34: Debt overview
Debt overview Total gross debt Effective funding costs – Gross debt Maturity profile 30 June 2021, DKKbn Cost of Modified Avg. time to DKKbn debt (%) duration (%) maturity (years) Bond loans 2.9 8.3 9.8 18.2 62.9 Bank loans 0.9 0.3 1.7 Total 2.8 7.8 9.2 13.8 29% 5.7 3.8% 39.0 9% 3.1% 2.5 4% 2.8% 2.8
Slide 35: 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 36: Ørsted’s outstanding bonds
Ørsted’s outstanding bonds Principal Green Allocated to green Avoided emissions (t CO2/year) Bond Type Issue date Maturity Face Value Coupon Coupon payments amount bond projects (DKKm) attributable to the bonds Senior Unsecured Dec. 2009 16 Dec. 2021 EUR 500m EUR 272m 4.875% Every 16 Dec. No n/a n/a
Slide 37: Financing strategy
Financing strategy At Ørsted, we have a centralised financing The financing strategy optimizes the strategy utilizing our strong balance sheet effect of a fully integrated cash pool and diverse portfolio. where cash at practically all of the The strategy supports: company’s more than 200 subsidiarie
Slide 38: 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 39: Interest rate and inflation risk management
Interest rate and inflation risk management Assets and debt allocation Objectives of interest rate and inflation risk management Illustrative 1. Protect long-term real value of equity by offsetting interest and 100% inflation risk exposure embedded in assets by allocating debt with similar, but oppo
Slide 40: Energy risk management
Energy risk management Risk picture Hedging of open exposure • We manage energy market risks to protect Ørsted against price volatility and • Open energy exposure is reduced actively to ensure stable and robust financial ratios that support our growth strategy • Minimum hedging requirements are dete
Slide 41: Investor Relations contacts
Allan Bødskov Andersen Rasmus Hærvig Head of Investor Relations Senior Manager alban@orsted.com rakol@orsted.com Alex Morgan Sabine Lohse Henriette Stenderup Lead Investor Relations Officer Senior Investor Relations Officer IR Coordinator alxmo@orsted.com sablo@orsted.com hnste@orsted.com