Orsted · OMXCOP:ORSTED
Orsted — DONG Energy — H1 2015 Earnings Presentation
19 slides from Orsted's earnings presentation, Aug 19, 2015
Slide 1: Financial Report H1 2015 Investor Presentation
FINANCIAL REPORT H1 2015 I N V E S T O R P R E S E N TAT I O N 19 August 2015 H1 2015 RESULTS 1
Slide 2: Disclaimer
Disclaimer Certain statements in this presentation are based on the beliefs of our We urge you to read our annual report available on our website at management as well as assumptions made by and information currently www.dongenergy.com for a discussion of some of the factors that could available to
Slide 3: Strong first half – FY 2015 outlook revised upwards
Strong first half – FY 2015 outlook revised upwards Highlights Group EBITDA Strong results despite low oil prices (DKKbn) EBITDA of DKK 10.4bn (up 6% y/y) 16.4 15.0 13.7 +6% Solid credit metrics (FFO/Adjusted net debt of 38%) 9.8 10.4 Net profit of DKK 2.8bn (up from DKK 1.4bn in H1 14) 8.6
Slide 4: Wind expansion powering ahead
Wind expansion powering ahead Continued rapid expansion: DONG Energy – expected installed offshore wind capacity GW Westermost Rough (210MW) – inaugurated in July 2015 2014 2.5 Borkum Riffgrund 1 (312MW) – fully installed and inauguration in Oct. 2015 2015 0.5 Westermost Rough Borkum Riffgrund 1
Slide 5: Market conditions and prices
Market conditions and prices OIL AND GAS PRICE UK POWER PRICE USD/bbl EUR/MWh EUR/MWh Oil price Gas TTF (rhs) 140 35 80 Forward Forward 120 prices price 30 70 100 25 60 80 60 20 50 40 15 40 2012 2013 2014 2015 2012 2013 2014 2015 Source: Platts, Argus Source: LEBA WIND ENERGY CONTENT GREEN DARK SPRE
Slide 6: Financial highlights H1 2015
Financial highlights H1 2015 EBITDA – DKK 10.4bn (up 6% y/y) Selected financials (DKKm) H1 15 H1 14 FY2014 Revenue 37,856 35,873 67,048 Strong operational performance in WP and E&P EBITDA 10,406 9,813 16,389 Contribution from new wind assets Net finance costs -1,331 -1,233 -1,710 Cost reductio
Slide 7: Exploration & Production
Exploration & Production Operational highlights H1 15 Oil & Gas production (mboe) Oil Gas 41.8 Production down 15% 31.7 10.6 -15% Scheduled shutdown of Ormen Lange for 42 days 26.4 28.5 8.2 in Q2 15 due to connection of new infrastructure 10.0 20.4 9.3 17.4 5.0 to the gas treatment plant in Nyha
Slide 8: Wind Power
Wind Power Operational highlights H1 15 Renewable production (TWh) 5.3 5.0 Production up 15% 4.4 4.6 +15% Contribution from new farms West of Duddon 3.0 2.8 2.9 4.3 2.6 Sands and Westermost Rough 4.9 Acquisition of remaining 50% share in Barrow 0.8 0.8 0.8 0.9 0.6 2.5 0.5 0.1 wind farm 0.1 L
Slide 9: Thermal Power
Thermal Power Operational highlights H1 15 Thermal heat and power production (PJ, TWh) Heat generation up 12% y/y primarily due to warmer 60 20 weather in H1 14 15 40 Power generation unchanged y/y – higher 10 generation at Enecogen due to somewhat improved 20 5 market conditions offset by decli
Slide 10: Customers & Markets
Customers & Markets Operational highlights H1 15 Operational figures H1 14 H1 15 Lower gas and power volumes sold and traded, but Gas sales TWh 63.0 55.9 with very limited earnings impact Power sales TWh 15.3 14.3 Satisfactory outcome from settlement of a gas Distribution of gas TWh 4.4 4.6 cont
Slide 11: Debt overview
Debt overview Net debt development H1 15 Gross debt and hybrids H1 15 15% Bonds 1% 6.5 7.8 Hybrids 8.8 2.0 26% 58% Bank loans 4.0 0.5 Other debt incl. repo Net debt Capex Operating Divestments Other 1 Net debt cash flow EoY 2014 end of Key ratios loan portfolio2 Q4 14 H1 15 H1 15 Note (1): Other inc
Slide 12: Outlook – revised upwards
Outlook – revised upwards EBITDA (revised upwards) DKK 17-19bn in 2015 (previous guidance DKK 15.5-17.5bn) Net investments (unchanged) DKK 35-40bn for 2015-2016 FFO/Adjusted net debt (revised upwards) Above 30% in 2015 (previous guidance around 30%) H1 2015 RESULTS 12
Slide 13: Q&A
Q&A (to ask a question on the conference call, press 01 on the telephone key pad) H1 2015 RESULTS 13
Slide 14: Appendix
APPENDIX H1 2015 RESULTS 14
Slide 15: Comparison Q2 15 vs. Q2 14
Comparison Q2 15 vs. Q2 14 EBITDA Q2 comparison by Business Units Group financials (DKKm) Q2 15 Q2 14 Revenue 18,589 15,681 EBITDA 4,405 3,479 E&P -13% y/y Net profit 1,033 -165 Ormen Lange scheduled shutdown and lower oil prices Lower costs (less expensed exploration and no Siri repair costs) A
Slide 16: Market prices
Market prices Forwards as of Actual, Actual, 7 Aug. 2015 H1 15 H1 14 (rest of year) (average) Oil, Brent USD/bbl 50 58 109 Gas, TTF EUR/MWh 20 21 22 Gas, NBP EUR/MWh 21 22 22 Electricity, Nord Pool system EUR/MWh 21 24 28 Electricity, Nord Pool, DK1 EUR/MWh 25 26 30 Electricity, EEX EUR/MWh 33 30 32
Slide 17: Investments
Investments Investments in H1 15 Gross investments on Business Units in H1 15 Cash flow from investing activities - 7,012 6% 5% E&P Purchase and sale of securities (reversal) - 1,301 Wind Power Sale of assets and companies (reversal) - 503 33% Thermal Power Other - 11 DKK Customers & Markets Gross i
Slide 18: FFO/Adjusted net debt calculation
FFO/Adjusted net debt calculation LTM H1 15 LTM H1 14 EBITDA (Business Performance) 17.0 17.1 Reversal of recognised lease payment 0.6 0.5 Adjusted net interest expenses -2.1 -2.8 Net interest expenses -0.7 -1.7 Capitalised interest -0.4 -0.3 Interest element of decommission obligations -0.5 -0.4 50
Slide 19: Financial targets by Business Units
Financial targets by Business Units ROCE LTM H1 15 Target 2016 Target 2020 -5.8% (6.0% Group >10% >12% excl. writedowns) E&P -29.3% (12.2%) ~12% on average for 2015-2020 WP 4.3% (4.3%) 6-8% 12-14% C&M 3.7% (8.8%) >8% >10% TP Positive FCF1,2 Target 2018: Positive FCF1 Note (1): Free Cash Flow (FCF) d