Origin Energy Limited · ASX:ORG
Origin Energy — Non-Deal Roadshow (November 2013)
38 slides from Origin Energy's roadshow presentation, November 2013
Slide 1: Origin Energy Asia Roadshow
Origin Energy Asia Roadshow Grant King, Managing Director Karen Moses, Executive Director, Finance and Strategy November 2013
Slide 2: Important Notice
Important Notice The information and opinions contained in this presentation are intended solely for your personal reference and are strictly confidential. This presentation may not be used or relied upon by any other party, or for any other purpose, and may not be reproduced, disseminated or quoted
Slide 3: Important Notice
Important Notice Statements about past performance are not necessarily indicative of future performance. Except as required by applicable law or the ASX Listing Rules, the Relevant Persons disclaim any obligation or undertaking to update any forward looking statements, whether as a result of new inf
Slide 4: Origin is Australia's leading integrated energy company
Origin is Australia’s leading integrated energy company The largest1 integrated energy business in Australia and NZ At a glance: Large and diverse fuel portfolio Listed in S&P/ASX 20 index with a market capitalisation Largest and most flexible generation portfolio of A$16 billion2 and Larges
Slide 5: Historically, Origin invested in growing its integrated energy markets business
Historically, Origin invested in growing its integrated energy markets business Integrated energy business EXPLORATION & CONTACT ENERGY ENERGY MARKETS LNG PRODUCTION (NEW ZEALAND) Australia’s largest1 energy Gas and oil exploration 53.1% shareholding in New 37.5% shareholding in retailer supported b
Slide 6: Origin is focusing on four key priorities
Origin is focusing on four key priorities Improving the Performance of the Existing Businesses Removal of controls on retail pricing reduces risk and improves earnings potential Stabilising competitive environment reduces churn and improves longer term outlook for margin Implementation of reta
Slide 7: Improving trends in Energy Markets, but FY2013 discounts delay earnings recovery
Whilst there are many improving trends in Energy Markets, the lagged effect of FY2013 discounts will delay earnings recovery in FY2014 … Improving Industry APLNG and GLNG operational Full production begins LNG start up performance of from APLNG production Deregulation in QLD existing business FY2014
Slide 8: Improving the performance of the existing businesses
Improving the performance of the existing businesses
Slide 9: Energy Markets is Australia's leading integrated provider of energy products
Origin’s Energy Markets business is Australia’s leading1 integrated provider of energy products Fuel Generator Retailer Large and diverse fuel Australia’s largest Australia’s leading energy portfolio generation portfolio retailer • Strong domestic gas supply • 6,010 MW • 2,952,000 electricity custom
Slide 10: Australian retail energy market moving towards full price deregulation
The Australian retail energy market is moving towards full price deregulation • Victoria and South Australia retail prices are deregulated • In NSW and Queensland, tariffs are regulated so there is effectively a cap on the price that retailers can charge • In June 2013, the Queensland government ann
Slide 11: Increased customer acquisition and retention reduced churn relative to market
Increased customer acquisition and retention activity contributed to reduced Origin customer churn relative to market • Increased competition following the acquisition of the NSW energy retail businesses at a time when Origin’s marketing capacity was constrained resulted in reduced average electrici
Slide 12: Significant investment in improved retail capability is nearing completion
Significant investment in improved retail capability is nearing completion The new SAP billing and customer management system has provided new capabilities in channel management and products and services to customers including online self-serve and e-billing capability Origin customer migrations to
Slide 13: Completion of upstream investments improves reliability and production capacity
Completion of investments in Upstream assets improves reliability and increases production capacity … 140 200 Additional 120 volumes that can be sold into 100 150 1 the gas market Maximum Production Max Production Potential Potential 80 if none used in TJe/d FY2013 Production ex outages generation P
Slide 14: Low historical priced gas position benefits from rising gas prices
Scale and diversity of Origin’s low historical priced gas position enables Origin to benefit from rising gas prices … Origin Sources of East Coast Gas1 Australian domestic gas prices are moving 10.00 towards export parity 8.00 PJ 6.00 $/GJ 3,500 4.00 3,000 3rd party 2.00 contracts Origin JV - 2,500
Slide 15: Progressing existing development opportunities for medium term growth
Progressing existing development opportunities to provide medium term growth following completion of APLNG … Existing development opportunities Origin continues to prepare existing gas and renewable energy development opportunities for FID to be taken in the medium term: • Gas opportunities such as
Slide 16: Contact expects to benefit from resolution of two earnings issues
Contact expects to benefit from resolution of two issues that have previously impacted earnings • In 2007, the North and South Islands of New Zealand were disconnected due to a transmission failure increasing earnings sensitivity to hydro events in the South Island and limiting fuel alternatives in
Slide 17: Delivering the APLNG project
Delivering the APLNG project
Slide 18: APLNG is a strong and aligned incorporated joint venture
APLNG is a strong and aligned incorporated joint venture, combining Origin’s Australian CSG experience with ConocoPhillips’ extensive LNG and CSG capabilities … • Australia’s largest integrated • Global independent exploration and • Integrated energy and chemical energy company production company co
Slide 19: APLNG's industry leading Proved and Probable reserves base
APLNG’s industry leading Proved and Probable reserves base includes prime acreage in both known and industry accepted “sweet spots” in Queensland … PJ 20,000 15,000 10,000 5,000 - Estimated Requirements 1 3P 2P APLNG tenure in the Surat and Bowen basins at 30 June 2012 Ramp and Tail Gas Train 2 Trai
Slide 20: APLNG on track to deliver first LNG by mid-2015
APLNG is on track to deliver first LNG by mid-2015, creating a step change in Origin’s earnings and cash flows Milestones Timing (FY) Origin and ConocoPhillips form APLNG incorporated JV Q2 2009 Environmental approvals Q3 2011 Sinopec – 4.3 mtpa foundation customer Q4 2011 FID1 announced Q1
Slide 21: Upstream Project progress - 50% complete and on track
Upstream Project progress - 50%1 complete and on track FY2014 Upstream Operated Goals Actual Progress to 30 September Plan First gas and water production from Q1 Accomplished Condabri Central (eastern area) 500 wells drilled Q2 On Track: 448 wells drilled 295 diameter-kilometres1 of gathering line O
Slide 22: Downstream Project progress - 54% complete and on track
Downstream Project progress - 54%1 complete and on track FY2014 Downstream Operated Goals Actual Progress to 30 September 2013 Plan Final Train 1 refrigeration compressor set Q1 Accomplished Accommodation camp complete Q1 Accomplished Complete Train 2 compressor table tops Q2 Accomplished Complete l
Slide 23: APLNG capital expenditure for the year was $7.8 billion
APLNG capital expenditure for the year was $7.8 billion, with Origin’s cash contribution $561 million Cumulative Estimate from FID1 to Year to 30 (A$m) from FID1 to 1st sales from Train 2 June 2013 June 2013 (A$b) Project Capex 7,8431 12,497 24.75 Non-Project Capex: Annual spend peaks in FY2014 in l
Slide 24: APLNG revenue underpinned by long term take-or-pay contracts
APLNG’s revenue is underpinned by long term take-or-pay contracts with investment grade counterparties and robust Asian demand Evolution of Asia Pacific LNG Demand 1 350 • APLNG’s revenue is underpinned by 20 year executed take-or- pay contracts with Sinopec (China) (Moody’s/S&P Aa3 /A+) and Kansai
Slide 25: Managing the funding of Origin's investment in APLNG
Managing the funding of Origin’s investment in APLNG
Slide 26: Committed undrawn debt facilities and cash provide sufficient liquidity
Committed undrawn debt facilities and cash, combined with cash flows from operations, provide sufficient liquidity for Origin to fund its investment in APLNG 3,500 3,000 2,500 Free cash flow from existing $4.1 billion2 $ million 2,000 business funding 1,500 requirement for Origin’s 1,000 $5.3 billio
Slide 27: New $7.4 billion bank loan facility refinances existing debt
Origin entered into a new $7.4 billion bank loan facility to refinance all existing unsecured bank debt on new terms and pricing and extend its debt maturity profile y p 4,500 Loan & Bank Guarantees - Undrawn 4,000 Recent financing activity: 3,500 Loans & Bank Guarantees - Drawn • $7.4b Syndicated b
Slide 28: Creating growth opportunities for the future
Creating growth opportunities for the future
Slide 29: Improving trends in Energy Markets, but FY2013 discounts delay earnings recovery
Whilst there are many improving trends in Energy Markets, the lagged effect of FY2013 discounts will delay earnings recovery in FY2014 … Improving Industry APLNG and GLNG operational Full production begins LNG start up performance of from APLNG production Deregulation in QLD existing business FY2014
Slide 30: Appendices
O origin Appendices
Slide 31: 2013 Financial Highlights
2013 Financial Highlights ($ million) June 13 June 12 Change Statutory Profit 378 980 (61%) Statutory EPS 34.6 cps 90.6 cps (62%) Revenue 14,619 12,935 13% Underlying EBITDA* 2,181 2,257 (3%) Underlying EBIT* 1,438 1,598 (10%) Underlying Profit 760 893 (15%) Underlying EPS 69.5 cps 82.6 cps (16%) Gr
Slide 32: Statutory Profit down 61%, from $980 million to $378 million
Statutory Profit down 61%, from $980 million to $378 million 1,200 1,000 193 980 (87) 893 800 (76) (11) $ million (84) 760 (382) (38) 76 600 400 378 200 - FY2012 Net Items FY2012 Underlying Underlying Underlying Underlying Underlying FY2013 Net items FY2013 Statutory excluded Underlying EBITDA D&A N
Slide 33: Underlying EBITDA down 3% to $2,181 million
Underlying EBITDA down 3% to $2,181 million Underlying EBIT down 10% to $1,438 million Underlying EBITDA Underlying EBIT ($ million) Jun 13 Jun 12 change Jun 13 Jun 12 change Energy Markets 1,333 1,562 (15%) 1,038 1,317 (21%) Exploration & Production 395 3221 23% 162 105 54% LNG 60 541 11% 5 14 (64%
Slide 34: Reconciliation of Statutory Profit to Underlying Profit
Reconciliation of Statutory Profit to Underlying Profit ($ million) Jun 13 Jun 12 Change Statutory Profit 378 980 (602) Unfavourable foreign exchange movement Items Excluded from Underlying Profit (-$187m), higher APLNG related items 96 452 (356) financing costs not able to be capitalised (Decrease)
Slide 35: Glossary
O origin Glossary
Slide 36: Statutory Financial Measures and Non-IFRS Financial Measures
Statutory Financial Measures Term Meaning Net Debt Total current and non-current interest bearing liabilities only less cash and cash equivalents. Economic interest in a controlled entity of the Consolidated Entity that is not held by the Non-controlling interest Parent entity or a controlled entity
Slide 37: Non-Financial Terms
Non-Financial Terms Term Meaning The sum of Proved plus Probable Reserves. Probable Reserves are those reserves which analysis of geological and engineering data indicate are less likely to be recovered than Proved Reserves but more certain than 2P reserves Possible Reserves. It is equally likely th
Slide 38: Thank you
Thank you For more information Chau Le Group Manager, Investor Relations Email: chau.le@originenergy.com.au Office: +61 2 9375 5816 Mobile: + 61 417 799 642 www.originenergy.com.au 38 |