Orsted · OMXCOP:ORSTED
Orsted — Ørsted — Q3 2020 Earnings Presentation
36 slides from Orsted's earnings presentation, Oct 28, 2020
Slide 1: 28 October 2020
28 October 2020
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: Continued strong operational and financial performance during COVID-19 crisis
Continued strong operational and financial performance during COVID-19 crisis Highlights – Q3 2020 • EBITDA totalled DKK 3.4 billion, a decrease of 18% compared to Q3 2019 driven by last year’s income from the Hornsea 1 farm-down. Adjusting for partnership earnings EBITDA increased by 6% • EBITDA fr
Slide 4: Status on our US offshore wind portfolio
Status on our US offshore wind portfolio In operation Under development: Awarded contract Under development: Secured lease area Awaiting federal permitting process to be re-initiated Wind farm layout still to be confirmed Revolution Wind (RI/CT) Block Island Wind Farm (RI) South Fork Wind (NY) Expec
Slide 5: Construction programme – Offshore
Construction programme – Offshore Changhua Project Borssele 1 & 2 Virginia Hornsea 2 1 & 2a Country Asset type Capacity 752MW 12MW (EPC) 1,386MW 900MW Expected completion Q4 2020 Q4 2020 H1 2022 2022 Status On track Commissioned On track On track Comments All turbines Completed and Onshore Onshore i
Slide 6: Construction programme – Onshore and Bioenergy
Construction programme – Onshore and Bioenergy Permian Renescience Project Muscle Shoals Western Trail Haystack Energy Center Northwich Country Asset type 420MWac 80,000 tonnes Capacity 227MWac 367MW 298MW 40MWac waste Expected completion Q2 2021 Q3 2021 Q3 2021 Q4 2021 2020 Status On track On track
Slide 7: Global offshore wind awards likely to reach 25-30GW over the next 15 months
Global offshore wind awards likely to reach 25-30GW over the next 15 months Q4 2020 Q4 2020 H1 2021 H2 2021 H2 2021 2021 2021 2021 New York 2 New Jersey 2 Rhode Island UK round 4 Connecticut 4 German tender Maryland 3 Taiwan auction up to 2,500MW up to 2,400MW up to 600MW 8,000–12,000MW ~1,000MW 900
Slide 8: Q3 2020 – Continued solid, underlying performance
Q3 2020 – Continued solid, underlying performance Q3 2020 EBITDA decreased DKK 756m Offshore EBITDA DKK 2,629m – Down DKK 594m DKKm • Earnings from operating wind farms increased 15% driven by Hornsea 1 Q3 2019 4,116 and Borssele 1 & 2 • Adverse COVID-19 related impacts especially on the UK power ma
Slide 9: Q3 2020 – Financial performance in line with expectations
Q3 2020 – Financial performance in line with expectations Divestment gain CFO Net profit Underlying net profit Free cash flow CAPEX Net interest-bearing debt development DKKm DKKm Divestments DKKm 12,016 13,184 1,941 13,184 439 543 20,506 -110 -8,216 11,139 260 871 1,443 -7,222 -9,263 -22,272 877 -6
Slide 10: Q3 2020 – Financial and non-financial ratios
Q3 2020 – Financial and non-financial ratios FFO / Adj. net debt (last 12 ROCE (last 12 months) Greenhouse gas emissions Safety months), % % (scope 1 and 2), g CO2e/kWh, YTD Total recordable injury rate, YTD 47 76 4.7 69 3.8 36 29 9 30 Sep 2019 30 Sep 2020 30 Sep 2019 30 Sep 2020 30 Sep 2019 30 Sep
Slide 11: 2020 guidance and long-term financial estimates and policies
2020 guidance and long-term financial estimates and policies 2020 guidance DKKbn Financial estimates EBITDA without new partnerships 16-17 Total capex spend, 2019-2025 DKK 200bn Gross investments 28-30 Capex allocation split, 2019-2025: - Offshore 75-85% Business unit EBITDA FY 2020 vs. FY 2019 Dire
Slide 12: Q&A
Q&A Conference call DK: +45 8233 3194 UK: +44 333 300 9274 US: +1 833 526 8398 For questions, please press 01
Slide 13: Appendix
Appendix Orsted
Slide 14: Renewable capacity as of 30 September 2020
Renewable capacity as of 30 September 2020 Indicator Unit 9M 2020 FY 2019 9M 2019 Installed renewable capacity Installed renewable capacity MW 10,542 9,870 8,487 The installed renewable capacity is calculated as - Offshore wind power MW 6,820 6,820 5,602 the cumulative renewable gross capacity insta
Slide 15: Offshore wind build-out plan
Offshore wind build-out plan Installed capacity 920 14,854 MW 1,142 1,220 Under construction 1,714 Awarded 900 9,858 1,386 752 6,820 Installed Borssele Hornsea 2 Greater Decided (FID’ed) US North- US Mid-Atlantic German Greater Decided (FID’ed), capacity 1&2 Changhua and installed East cluster1 clus
Slide 16: Offshore market development – US
Offshore market development – US • Current target of 3.2GW by 2030 set to be increased by 2.0-2.8GW Massachusetts • Next solicitation of 1.6GW expected in H2 2021 • Target of 2GW of offshore wind capacity by 2030, of which 1.2GW remains available Connecticut • Next auction of approx. 1GW expected in
Slide 17: Offshore market development – UK and Continental Europe
Offshore market development – UK and Continental Europe • Target annual build-out of 3GW to reach 40GW capacity by 2030 United • Development consent order for Hornsea 3 now expected by 31 December 2020 Kingdom • Leasing round for up to 8.5GW underway with results in January 2021. New leasing round i
Slide 18: Offshore market development – APAC
Offshore market development – APAC • Taiwan has met its target of awarding 5.5GW to be commissioned by 2025 • An additional 10GW offshore wind to be constructed between 2026-2035 Taiwan • Third round auction rules expected to be announced by the end of 2020 • 600MW Greater Changhua 3 project ready f
Slide 19: Onshore build-out plan
Onshore build-out plan ~5,000 Installed capacity MW Under construction 298 2,970 367 227 420 1,658 Installed Permian Muscle Shoals Western Trail Haystack Decided 2025 capacity Energy Center1 (FID’ed) and ambition Q3 2020 installed capacity ERCOT, SERC, ERCOT, SPP, Region TX AL TX NE Expected Q2 2021
Slide 20: Sustainability and ESG at Ørsted
Sustainability and ESG at Ørsted Green leadership Contributing to the global goals ESG ratings of Ørsted • We want to help keep global warming below 1.5°C Rating agency Rating Benchmark Ørsted is a signatory to the UN Global • In Q3 2020, 90% of our energy generation was green. By Compact and adhere
Slide 21: Group – Financial highlights
Group – Financial highlights FINANCIAL HIGHLIGHTS Q3 2020 Q3 2019 D FY 2019 EBITDA DKKm 3,360 4,116 (18%) 17,484 • Offshore 2,629 3,223 (18%) 15,161 • Onshore 308 308 0% 786 • Markets & Bioenergy 375 436 (14%) 1,495 Net profit – continuing operations 12,016 1,443 n.a. 6,100 Net profit – discontinued
Slide 22: Offshore – Financial highlights
Offshore – Financial highlights FINANCIAL HIGHLIGHTS Q3 2020 Q3 2019 D FY 2019 Wind speed (m/s), offshore wind farms EBITDA DKKm 2,629 3, 223 (18%) 15,161 12.1 • Sites incl. O&Ms and PPAs 3,012 2,612 15% 13,750 10.4 10.0 9.7* 9.2 8.0 8.0 8.5 8.2 • Construction agreements and divestment 247 1,188 (79
Slide 23: Onshore – Financial highlights
Onshore – Financial highlights FINANCIAL HIGHLIGHTS Q3 2020 Q3 2019 D FY 2019 Wind speed (m/s), onshore wind farms EBITDA DKKm 308 308 0% 786 • Sites 176 245 (28%) 466 7.7 8.0 • Production tax credits and tax attributes 213 145 47% 628 7.8 7.5 7.3 7.3 7.5* 6.6 6.7 • Other, incl. project development
Slide 24: Markets & Bioenergy – Financial highlights
Markets & Bioenergy – Financial highlights FINANCIAL HIGHLIGHTS Q3 2020 Q3 2019 D FY 2019 EBITDA DKKm 375 436 (14%) 1,495 • CHP plants 93 370 (75%) 1,152 • Gas markets & Infrastructure 201 50 n.a. 390 • LNG - (155) n.a. (957) • Distribution, B2C and city light 145 352 (59%) 1,280 • Other, incl. proj
Slide 25: Currency and energy exposure
Currency and energy exposure Currency exposure Q4 2020 – Q3 2025 Energy exposure Q4 2020 – Q3 2025 DKKbn DKKbn Before hedging Before hedging After hedging After hedging 61.2 20.4 20.1 16.7 12.1 5.7 3.5 0.9 0.1 0.2 3.3 GBP1 USD2 TWD -2.6 Power Gas Oil Risk after hedging, Effect of price +10% Effect o
Slide 26: Natural hedges significantly reduce Taiwan Dollar risk
Natural hedges significantly reduce Taiwan Dollar risk Cash flows from Changhua 1 & 2a Illustrative Risk mitigation Illustrative CAPEX Revenue less OPEX Potential farm-downs 2020 2021 2022 2023 2024 2025 2026 2027+ 2020 2021 2022 2023 2024 2025 2026 2027+ TWD USD, EUR or DKK TWD TWD funding USD, EUR
Slide 27: Capital employed
Capital employed Capital employed, DKKm 9M 2020 FY 2019 9M 2019 Capital employed by segment Intangible assets and property and equipment 116,638 106,685 100,748 %, 9M 2020 Equity Investments and non-current receivables 2,188 1,044 1,390 Net working capital, work in progress 10,121 8,756 8,764 Offsho
Slide 28: FFO/Adjusted net debt calculation
FFO/Adjusted net debt calculation Funds from operations (LTM) / Adjusted net debt, DKKm 9M 2020 FY 2019 9M 2019 EBITDA – Business Performance 17,734 17,484 32,077 Interest expenses, net (1,924) (1,312) (512) Interest expenses, leasing (97) (171) (115) Reversal of interest expenses transferred to ass
Slide 29: Debt overview
Debt overview Gross debt and hybrids Effective funding costs – gross debt (excl. hybrid) Long term gross debt maturity schedule 30 September 2020 30 September 2020 30 September 2020 Cost of Modified Avg. time to DKKbn debt (%) duration (%) maturity (years) 80 Bond loans 3.1 8.4 10.0 Bank loans 0.9 0
Slide 30: Hybrid capital in short
Hybrid capital in short Hybrid capital can broadly be defined as • Deeply subordinated and only senior to Ørsted has made use of hybrid capital to funding instruments that combine features of common equity maintain our ratings at target level in debt and equity in a cost-efficient manner: connection
Slide 31: Ørsted's outstanding Green Bonds
Ørsted’s outstanding Green Bonds Ørsted A/S Allocated to green Avoided emissions (t CO2/year) Bond Type Face Value Coupon Issue date Maturity projects (DKKm) attributable to the bonds Senior Unsecured EUR 750m 1.5% 24 November 2017 26 November 2029 5,499 733,000 Hybrid capital EUR 500m 2.25% 24 Nove
Slide 32: 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 33: 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 34: 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 35: 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 36: 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