Origin Energy Limited · ASX:ORG
Origin Energy — H1 FY2010 Earnings Presentation
41 slides from Origin Energy's earnings presentation, Feb 25, 2010
Slide 1: ASX transmittal: Results for the half year ended 31 December 2009
For personal use only To Company Announcements Office Facsimile 1300 300 021 Company ASX Limited Date 25 February 2010 From Bill Hundy Pages 41 Subject RESULTS FOR THE HALF YEAR ENDED 31 DECEMBER 2009 This Transmittal is confidential. If you have received this document in error, please contact Origi
Slide 2: 2010 Half Year Results: A Decade of Growth
2/25/2010 Half Year Ended 31 December 2009 25 February 2010 For personal use only Celebratingg a decade of growth 2010 Half Year Results A Decade off Growth Media 1
Slide 3: Important Notice
2/25/2010 Important Notice This presentation does not constitute investment advice, or an inducement or recommendation to acquire or dispose of any securities in Origin, in any jurisdiction (including the USA). This presentation is for information purposes only, is in a summary form, For personal us
Slide 4: Outline
2/25/2010 Outline For personal use only 1. Performance Highlights 2. Financial Review 3. Operational Review 4. Outlook 5. The Next Decade 3 3
Slide 5: 1. Performance Highlights
2/25/2010 1. Performance Highlights For personal use only 4
Slide 6: Ten years since listing on the ASX: a decade of growth
2/25/2010 On 21st February ten years ago, Origin was first listed on the ASX and so began a decade of growth For personal use only 10 Year CAGR: • Productive Capital: 16% • Underlying Profit: 24% • Earnings per Share: 18% • Dividends per Share: 27% • Total Shareholder Return: 30% That growth has res
Slide 7: One of the top performing listed companies over the last decade
2/25/2010 As a result of this growth, Origin has been one of the top performing listed companies over the last decade… For personal use only Origin TSR 1,306% Indexed to 100 from 21 February 2000 to 19 February 2010 … and is now in the ASX top 20 companies by market capitalisation, from a low of aro
Slide 8: Second decade begins with Underlying Profit up 28% to $355 million
2/25/2010 Origin enters its second decade with Underlying Profit up 28% to $355 million, continuing that record of growth For personal use only Underlying Profit $355 million up 28% Underlying Earnings 40.5 cps up 28% per Share Statutory Profit(1) $371 million down 94% Statutory 42.3 cps p down 94%
Slide 9: Clear and simple strategy continues to deliver growth opportunities
2/25/2010 Origin’s performance has been driven by a clear and simple strategy that continues to deliver ongoing opportunities for growth For personal use only • Progressed commissioning of the Kupe Project with steady production achieved • APLNG increased production capacity and 2P reserves • Commit
Slide 10: 2. Financial Review
2/25/2010 2. Financial Review For personal use only 9
Slide 11: 2010 Half Year Financial Highlights
2/25/2010 2010 Half Year Financial Highlights For personal use only Revenue $4,300 million up 2% Underlying EBITDA $706 million up 3% Underlying EBIT $489 million up 1% Underlying net financing income/(costs) $12 million up $72 million Underlying Profit $355 million up 28% EPS – Underlying 40.5 cps
Slide 12: Balance sheet capacity deployed to grow and develop the business
2/25/2010 Origin has deployed $1.4 billion of balance sheet capacity over the period to grow and develop the business… For personal use only Growth Capex • 23% lower than the prior half year • Major expenditure included the Darling Downs and Mortlake Power Stations, Kupe Gas Project, Bass Basin expl
Slide 13: Significant financial capacity and refinancing of maturing facilities
2/25/2010 Origin has significant financial capacity to support its business… For personal use only • Strong St expressions i off iinterest t thhave b been received from a number of lending banks in regards to refinancing the majority of the 2010 and 2011 maturing debt • Origin expects to refinance t
Slide 14: Fully franked interim dividend declared
2/25/2010 A fully franked interim dividend of 25 cps, in line with the prior year, has been declared… For personal use only • Ex-dividend di id d date d 2 March h 2010 • Date of record 9 March 2010 • Payment Date 1 April 2010 • Dividend payout ratio of 62% of Underlying EPS • Dividend Reinvestment P
Slide 15: 3. Operational Review
2/25/2010 3. Operational Review For personal use only 14
Slide 16: Exploration & Production
2/25/2010 Exploration & Production For personal use only 15
Slide 17: Exploration & Production: production in line, progress on new developments
2/25/2010 Delivered production in line with expectations and continued progress on new developments including Kupe and Talinga… For personal use only Exploration & Production Segment • Underlying EBITDA down 40% to $104 million, reflecting dilution of Origin’s interest in APLNG, higher exploration e
Slide 18: APLNG grows reserves position, largest CSG reserves holder in Australia
2/25/2010 APLNG continues to grow its reserves position and remains the largest holder of CSG reserves in Australia For personal use only • Current production capacity now exceeds 240 TJ/day (up to 87 PJ/year) • Optimised LNG train design now at 4.5 MTPA with each train expected to require 270 PJ/ye
Slide 19: APLNG and QGC agreements evidence value of project collaboration
2/25/2010 APLNG and QGC agreements evidence the value of project collaboration… For personal use only Field Development Framework • APLNG and Q QGC have agreed g to work together g to develop p these jointly j y owned resources • Covers permits ATP 648P (APLNG interest 31.25%) and ATP 620P (APLNG in
Slide 20: Working with Anadarko to explore the Canterbury Basin, New Zealand
2/25/2010 Origin is working with Anadarko to explore in the highly prospective Canterbury Basin in New Zealand… For personal use only • Origin has attracted Anadarko Petroleum Corporation to farm in for a 50% interest in exploration permit PEP 38262 • Prior to agreement to farm in, Anadarko complete
Slide 21: Generation
2/25/2010 Generation For personal use only 20
Slide 22: Generation: new projects drive significant earnings growth
2/25/2010 Delivering new projects has led to significant earnings growth… For personal use only Generation Segment • Underlying EBITDA increased from $22 million to $98 million, as operating capacity more than doubled compared to Dec 08 half • Operating capacity increased to 1,620 MW. Expected to in
Slide 23: Retail
For personal use only Retail 22 2/25/2010
Slide 24: Retail: strong increase in Underlying EBITDA
2/25/2010 Strong increase in Underlying EBITDA driven by increased margins in gas and LPG, partially offset by increased wholesale electricity and network costs For personal use only Retail Segment • Underlying EBITDA increased 7% to $320 million primarilyy due to improved p p g gross pprofit for na
Slide 25: Contact Energy
2/25/2010 Contact Energy For personal use only 24
Slide 26: Contact: Underlying EBITDA in line with prior half in local currency
2/25/2010 Underlying EBITDA was in line with the prior half in local New Zealand currency… For personal use only Contact Segment • Underlying EBITDA decreased by 3%. Operational performance in line with prior half in local currency. EBITDA lower l on consolidation ld due d to stronger Australian dol
Slide 27: 4. Outlook
2/25/2010 4. Outlook For personal use only 26
Slide 28: Outlook
2/25/2010 Outlook For personal use only While results for the first half were up 28 per cent compared with the prior half year, Origin still expects, based on current market conditions, that the full year result will be around 15 per cent higher g than the prior p yyear. 27 27
Slide 29: 5. The Next Decade
2/25/2010 5. The Next Decade For personal use only 28
Slide 30: Strategy of being a fuel integrated generator retailer
2/25/2010 Origin will continue to pursue a clear and simple strategy of being a fuel integrated generator retailer For personal use only Electrification Continued economic growth, growth efficiency improvements and industrialisation in Asia are likely to increase electricity’s share of final energy
Slide 31: Retail market share growth over the last decade
2/25/2010 In Australia, Origin’s retail business has grown its market share substantially over the last decade and this growth has been a key driver of Origin’s growth For personal use only Pre Demerger Retail Market Share(1) Origin: 4% Retail Market Share 2010(1) Origin: 21% Source: AEMO’s 2009 SOO
Slide 32: Renewable energy target to drive significant renewable investment
2/25/2010 Whilst it remains unclear how the world will respond to climate change, in Australia the renewable energy target has been set and will drive significant investment in renewable energy… For personal use only • Origin’s modelling suggests over 6,000 MW Represents R t mandated d t d 2020 of n
Slide 33: Substantial pipeline of generation opportunities supporting retail
2/25/2010 Origin has developed a substantial pipeline of generation opportunities to support a growing retail business For personal use only • Baseload and peaking portfolio with a lower average emissions intensity than the market • Gas fired generation development options, provide Origin with oppor
Slide 34: World energy demand projected to increase, electricity faster
2/25/2010 World demand for energy is projected to increase by 1.4% a year on average, with electricity demand projected to grow more quickly at 2.5% a year… For personal use only • World demand for gas is projected to grow by around 1.5% a year (BAU) • Asian electricity consumption is projected to g
Slide 35: World LNG trade projected to triple by 2030
2/25/2010 This increasing demand for gas is projected to result in world LNG trade tripling by 2030 as LNG is favoured over pipeline solutions due to supply security concerns For personal use only Estimated Interregional Gas Flows 2030 (billion cubic metres) Gas will play an increasing role in provi
Slide 36: Developing resources near markets with increasing gas demand
2/25/2010 In this context, Origin seeks to find and develop resources near markets with increasing demand for gas For personal use only LNG is opening a significant channel to export markets 35 for gas which Origin will access through APLNG 35
Slide 37: Responding to increasing demand for renewable energy
2/25/2010 Origin is a also responding to the increasing demand for renewable energy both locally and globally… For personal use only Geothermal • Conventional – Contact is pursuing the development of a number of geothermal opportunities • Shallows – Origin is seeking to develop shallow geothermal re
Slide 38: Strong joint venture partners reflect quality of new opportunities
2/25/2010 Strong joint venture partners reflect the quality and potential of these new opportunities and complement Origin’s development capability For personal use only Australia Pacific LNG – CSG to LNG joint venture with ConocoPhillips Transform Solar – Joint venture with Micron to focus on the d
Slide 39: Many opportunities to grow over the next decade
2/25/2010 Looking further ahead Origin has many opportunities to continue to grow and develop its business over the next decade For personal use only • Increased share of growing energy markets in Australia and New Zealand • Continued development by APLNG of its CSG to LNG project which is a primary
Slide 40: 2010 Half Year Results: A Decade of Growth
2/25/2010 Half Year Ended 31 December 2009 25 February 2010 For personal use only Celebratingg a decade of growth 2010 Half Year Results A Decade of Growth 39
Slide 41: Further Information
2/25/2010 Further Information For personal use only Media Lina Melero General Manager, Corporate Communications Email: lina.melero@originenergy.com.au Office: +61 2 8345 5217 Mobile: + 61 427 017 798 Website www.originenergy.com.au 40 40