Orsted · OMXCOP:ORSTED
Orsted — Ørsted — Q1 2021 Earnings Presentation
40 slides from Orsted's earnings presentation, Apr 29, 2021
Slide 1: Investor presentation Q1 2021
Investor presentation Q1 2021 29 April 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: Strong strategic progress and good operational performance
Strong strategic progress and good operational performance Highlights – Q1 2021 • CfDs awarded to the 2.5 GW Baltica 2 & 3 projects in Poland • Agreement signed to divest 50 % of the 752 MW Dutch Borssele 1 & 2 wind farm to Norges Bank IM • Signed MoU with Enefit to collaborate on developing offshor
Slide 4: Ørsted enters onshore European market
Ørsted enters onshore European market Brookfield Renewable Ireland (BRI) Footprint • Agreement to acquire BRI, an Ireland & UK developer, owner, Operating asset cluster1 and operator of onshore wind Under construction • Acquiring 100 % of equity placing an enterprise value on BRI of Advanced develop
Slide 5: Construction programme in Offshore
Construction programme in Offshore Changhua Project Hornsea 2 1 & 2a Country Asset type Capacity 1,386 MW 900 MW Expected completion H1 2022 2022 Status On track On track Comments Onshore and Onshore and offshore offshore construction construction work ongoing work ongoing 71/165 foundations install
Slide 6: Construction programme in Onshore
Construction programme in Onshore Permian Helena Energy Project Muscle Shoals Western Trail Haystack Old 300 Energy Center Center Country Asset type 420 MWAC 268 MW Capacity 227 MWAC 367 MW 298 MW 430 MWAC 40 MWAC 250 MWAC Expected completion Q2 2021 Q3 2021 Q3 2021 Q4 2021 Q2 2022 Q2 2022 Status On
Slide 7: Offshore auctions and tenders likely to reach ~25 GW in 2021
Offshore auctions and tenders likely to reach ~25 GW in 2021 Award in Q2 2021 H1 2021 Q2 2021 H2 2021 H2 2021 2021 H1 2022 New Jersey 2 Polish award French tender 4 Rhode Island Maryland 3 German tender Taiwan auction up to 2,400 MW 5,900 MW 1,000 MW up to 600 MW ~400 MW 900 MW TBA Award in H2 2021
Slide 8: Q1 2021 – Strong operational quarter
Q1 2021 – Strong operational quarter Comparable quarterly EBITDA in line Effects impacting comparability DKKm • Warranty provision relating to cable protection system issues Q1 2020 6,805 • No EBITDA from the divested Distribution, B2C, and city light businesses Warranty provision -800 • Partnership
Slide 9: Q1 2021 – Financial performance in line with expectations
Q1 2021 – Financial performance in line with expectations CFO Net profit Free cash flow CAPEX Net interest-bearing debt development DKKm DKKm Divestments DKKm 3,318 1,391 5,082 229 1,283 13,190 12,343 8,087 -4,356 -1,391 1,598 7 -428 -5,308 -6,665 -5,729 -31 31 Dec Free cash Dividends Lease Issuance
Slide 10: Q1 2021 – Financial and non-financial ratios
Q1 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 45 59 3.6 53 3.0 21 11.0 7.5 31 Mar 2020 31 Mar 2021 31 Mar 2020 31 Mar 2021 31 Mar 2020 31 Mar 2021 31 Mar 2020 31 Mar 2021 FFO
Slide 11: 2021 guidance and long-term financial estimates and policies
2021 guidance and long-term financial estimates and policies 2021 guidance DKKbn Financial estimates EBITDA without new partnerships 15-16 Total capex spend, 2019-2025 DKK 200 bn Gross investments 32-34 Capex allocation split, 2019-2025: - Offshore 75-85 % Business unit EBITDA FY 2021 vs. FY 2020 Di
Slide 12: Capital Markets Day 2021
Capital Markets Day 2021 Date June 2 2021 Registration www.orsted.com/cmd2021
Slide 13: Q&A Conference call
Q&A Conference call DK: +45 7872 3251 UK: +44 333 300 9267 US: +1 833 526 8384 For questions, please press 01
Slide 14: Appendix
Appendix Orsted
Slide 15: Renewable capacity as of 31 March 2021
Renewable capacity as of 31 March 2021 Indicator Unit Q1 2021 Q1 2020 Δ FY 2020 Installed renewable capacity Installed capacity MW 11,297 10,209 1,088 11,297 The installed renewable capacity is calculated as - Offshore wind power MW 7,572 6,820 - 7,572 the cumulative renewable gross capacity install
Slide 16: Forecasted renewable capacity build-out
Forecasted renewable capacity build-out Global renewable energy capacity by Global offshore wind capacity, excl. North American renewable capacity by technology1 mainland China technology2 GW installed GW installed GW installed CAGR 2 % biomass North America Biomass 19 % Offshore wind +10 %/year Asi
Slide 17: Offshore wind build-out plan
Offshore wind build-out plan Installed capacity 1,500 17,354 MW 1,000 920 Under construction 1,142 Awarded 1,220 1,714 900 9,858 1,386 7,572 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 • Next solicitation of 1.6 GW expected in H2 2021 • Target of 2 GW of offshore wind capacity by 2030, of which 1.2 GW remains available Connecticut • Next auction of approx. 1 GW expected in H2
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 • Leasing round auction awarded 8 GW of new development capacity in England and Wales in Q1 2021 United • Leasing round in
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 • An additional 10 GW offshore wind to be constructed between 2026-2035 Taiwan • Third round auction rules still to be announced • 600 MW Greater Changhua 3 project ready for future auctions
Slide 21: Hydrogen project pipeline
Hydrogen project pipeline 9 announced projects with the recent addition of SeaH2Land Project Size1 (MW) Country Application Partners 1 Westküste 100 30/700+ +more 2 Lingen Green Hydrogen 50/500 3 Yara Sluiskil 100 Industrial 7 4 SeaH2Land 1,000 vision +more DK 5 6 1 5 H2RES 2 +more 8 6 Green Fuels f
Slide 22: 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 23: Onshore build-out plan
Onshore build-out plan ~5,000 Installed capacity MW Under construction 518 3,918 430 298 367 227 420 1,658 Installed Permian Muscle Shoals Western Trail Haystack Old 300 Helena Energy Decided 2025 capacity Energy Center1 Center2 (FID’ed) and ambition Q4 2020 installed capacity ERCOT, SERC, ERCOT, SP
Slide 24: Sustainability and ESG at Ørsted
Sustainability and ESG at Ørsted Green leadership Contributing to the global goals ESG ratings of Ørsted • In Q1 2021, 87 % 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 the UN Global Comp
Slide 25: 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 Other green energy sources Onshore wind Coal Biomass N
Slide 26: Group – Financial highlights
Group – Financial highlights FINANCIAL HIGHLIGHTS Q1 2021 Q1 2020 D FY 2020 FY 2019 D EBITDA DKKm 4,863 6,805 (29 %) 18,124 17,484 4% • Offshore 3,946 5,632 (30 %) 14,750 15,161 (3 %) • Onshore 228 187 22 % 1,131 786 44 % • Bioenergy & Other 622 933 (33 %) 2,136 1,495 43 % Operating profit (EBIT) 2,
Slide 27: Offshore – Financial highlights
Offshore – Financial highlights FINANCIAL HIGHLIGHTS Q1 2021 Q1 2020 D FY 2020 FY 2019 D Wind speed (m/s), offshore wind farms EBITDA DKKm 3,946 5,632 (30 %) 14,750 15,161 (3 %) 12.1 • Sites incl. O&Ms and PPAs 4,886 4,936 (1 %) 15,476 13,750 13 % 10.5 10.4 9.7 9.6* 8.0 8.2 • Construction agreements
Slide 28: Onshore – Financial highlights
Onshore – Financial highlights FINANCIAL HIGHLIGHTS Q1 2021 Q1 2020 D FY 2020 FY 2019 D Wind speed (m/s), onshore wind farms EBITDA DKKm 228 187 22 % 1,131 786 44 % • Sites 44 73 (40 %) 451 466 (3 %) 8.0 8.0 7.5 7.7 7.6 7.6* • Production tax credits and tax attributes 6.7 283 209 35 % 1,004 628 60 %
Slide 29: Bioenergy & Other – Financial highlights
Bioenergy & Other – Financial highlights FINANCIAL HIGHLIGHTS Q1 2021 Q1 2020 D FY 2020 FY 2019 D EBITDA DKKm 622 933 (33 %) 2,136 1,495 43 % • CHP plants 676 520 30 % 1,111 1,152 (4 %) • Gas Markets & Infrastructure 19 11 73 % 411 390 5% • LNG 0 0 n.a. 0 (957) n.a. • Distribution, B2C, and city lig
Slide 30: Currency and energy exposure
Currency and energy exposure Currency exposure Q2 2021 – Q1 2026 DKKbn Energy exposure Q2 2021 – Q1 2026 DKKbn Before hedging Before hedging After hedging After hedging 64.9 29.9 21.1 16.1 16.4 9.3 8.4 10.1 0.3 0.2 GBP1 USD2 TWD2 -1.6 -0.2 Power Gas Oil Risk after hedging, Effect of price +10 % Effe
Slide 31: Capital employed
Capital employed Capital employed, DKKm Q1 2021 FY 2020 Q1 2020 FY 2019 Capital employed by segment Intangible assets and property and equipment 131,008 122,249 108,381 106,685 %, Q1 2021 Equity Investments and non-current receivables 838 1,928 2,319 1,044 Offshore Net working capital, work in progr
Slide 32: FFO/Adjusted net debt calculation
FFO/Adjusted net debt calculation Funds from operations (FFO), DKKm Q1 2021 FY 2020 Q1 2020 FY 2019 EBITDA – Business Performance 16,182 18,124 19,159 17,484 Interest expenses, net (1,096) (1,202) (1,570) (1,312) Interest expenses, leasing (183) (177) (44) (171) Reversal of interest expenses transfe
Slide 33: Debt overview
Debt overview Gross debt and hybrids Effective funding costs – gross debt Long-term gross debt 31 March 2021 (excl. repo and hybrid) 31 March 2021 31 March 2021 Cost of Modified Avg. time to debt (%) duration (%) maturity (years) DKKbn Bond loans 2.9 8.5 10.1 80 Bank loans 0.3 0.2 3.0 3% Total excl.
Slide 34: 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 35: Ørsted’s outstanding bonds
Ørsted’s outstanding bonds Remaining *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/
Slide 36: 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 37: Currency risk management
Currency risk management General hedging principles • The main principle is to hedge highly certain cash flows • Cost-of-hedging is minimized by netting of exposures, use of local currency in construction contracts and debt in local currency. Managing outright long risk (GBP) • Operations: minimum 5
Slide 38: Interest rate and inflation risk management
Interest rate and inflation risk management Four risk categories of 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 inflation risk exposure embedded in assets by allocating debt wit
Slide 39: Energy risk management
Energy risk management Risk picture Hedging of open exposure • We manage market risks to protect Ørsted against market price volatility and • Open energy exposure is reduced actively ensure stable and robust financial ratios that support our growth strategy • Minimum hedging requirements are determi
Slide 40: Investor Relations contacts
Allan Bødskov Andersen Rasmus Hærvig Head of Investor Relations Manager alban@orsted.com rakol@orsted.com Sabine Lohse Alex Morgan Henriette Stenderup Senior Investor Relations Officer Lead Investor Relations Officer IR Coordinator sablo@orsted.com alxmo@orsted.com hnste@orsted.com