Slide 1: Interim Results
Interim Results For the period ended 30 June 2011 = il centrica
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Centrica shares or other securities. This presentation contains certain forward-looking statements with respect to the financial condition, results, operations and busi
Slide 3: Sir Roger Carr, Chairman
Sir Roger Carr Chairman —S 3 centrica
Slide 4: Nick Luff, Group Finance Director
Nick Luff Group Finance Director —S 4 centrica
Slide 5: Commodity prices and spreads
Commodity prices and spreads 140 120 100 Oil ($/boe) 80 UK gas (p/th) 60 UK power (£/MWh) 40 20 US gas (p/th) 0 2009 2010 2011 30 25 Clean Dark Spread (£/MWh) 20 15 Clean Spark Spread (£/MWh) 10 5 0 2009 2010 2011 As at 27 July 2011 5
Slide 6: Financial headlines
Financial headlines Period ended 30 June 2011 2010 CONTINUING OPERATIONS: Revenue (£m) 11,509 11,707 Adjusted operating profit (£m) 1,262 1,563 Net interest expense (£m) 78 113 Effective tax rate 43% 37% GROUP RESULT: Adjusted earnings (£m) 673 886 Adjusted earnings per share (p) 13.0 17.2 Interim d
Slide 7: Operating profit analysis
Operating profit analysis Period ended 30 June (£m) 2011 2010 Downstream UK 518 842 Upstream UK 531 485 Storage UK 39 97 North America 174 139 ADJUSTED OPERATING PROFIT 1,262 1,563 Share of JV / associates’ interest and taxation (61) (44) Depreciation of FV uplifts to property, plant and equipment (
Slide 8: Operating profit analysis – Downstream UK
Operating profit analysis – Downstream UK Period ended 30 June (£m) 2011 2010 Downstream UK 518 842 Upstream UK 531 485 Storage UK 39 97 North America 174 139 ADJUSTED OPERATING PROFIT 1,262 1,563 Above figures include share of joint ventures and associates stated before interest and taxation, and b
Slide 9: Downstream UK: operating profit & key drivers
Downstream UK: operating profit & key drivers Residential energy revenue (£m) and margin (%) Operating profit (£m) Period ended 30 June 2011 2010 Residential energy 270 585 4,483 4,185 Residential services 111 109 Business 137 148 13.0% 6.5% DOWNSTREAM UK 518 842 H1 2010 H1 2011 Residential services
Slide 10: Operating profit analysis – Upstream UK
Operating profit analysis – Upstream UK Period ended 30 June (£m) 2011 2010 Downstream UK 518 842 Upstream UK 531 485 Storage UK 39 97 North America 174 139 ADJUSTED OPERATING PROFIT 1,262 1,563 Above figures include share of joint ventures and associates stated before interest and taxation, and bef
Slide 11: Upstream UK: operating profit & key drivers
Upstream UK: operating profit & key drivers Gas & oil production volumes Gas Liquids Operating profit (£m) (mmth) (mmboe) Period ended 30 June 2011 2010 Gas 414 362 1,321 1,079 Power 117 123 UPSTREAM UK 531 485 6.0 6.9 H1 2010 H1 2011 H1 2010 H1 2011 Average sales price Power generation volumes (TWh
Slide 12: Operating profit analysis – Storage UK
Operating profit analysis – Storage UK Period ended 30 June (£m) 2011 2010 Downstream UK 518 842 Upstream UK 531 485 Storage UK 39 97 North America 174 139 ADJUSTED OPERATING PROFIT 1,262 1,563 Above figures include share of joint ventures and associates stated before interest and taxation, and befo
Slide 13: Operating profit analysis – North America
Operating profit analysis – North America Period ended 30 June (£m) 2011 2010 Downstream UK 518 842 Upstream UK 531 485 Storage UK 39 97 North America 174 139 ADJUSTED OPERATING PROFIT 1,262 1,563 Above figures include share of joint ventures and associates stated before interest and taxation, and b
Slide 14: North America: operating profit & key drivers
North America: operating profit & key drivers Residential energy Operating profit (£m) Revenue (£m) Margin (%) Period ended 30 June 2011 2010 Residential energy 105 110 1,369 Business energy 58 44 1,290 8.0% 8.1% Services 9 8 Upstream & Wholesale 2 (23) NORTH AMERICA 174 139 H1 2010 H1 2011 H1 2010
Slide 15: Cash flow
Cash flow Period ended 30 June (£m) 2011 2010 FY 2010 OPENING NET DEBT (3,312) (3,136) (3,136) EBITDA 1,613 1,948 3,188 Working capital movements (317) (337) (252) Margin calls 123 410 467 Interest and tax (319) (180) (819) Net capex (498) (565) (1,669) Dividends (540) (470) (668) Pension deficit pa
Slide 16: Capital and acquisition expenditure
Capital and acquisition expenditure Period ended 30 June (£m) H1 2011 H1 2010 2011e** UK upstream gas 240 320 600 UK upstream power 83 65 350 North America 29 42 50 UK gas storage 19 31 50 Europe 1 6 - British Gas 85 57 200 Other 15 - 50 Total pre-acquisitions 472 521 1,300 Acquisitions / disposals*
Slide 17: Exceptional items and certain re-measurements
Exceptional items and certain re-measurements Period ended 30 June (£m) 2011 Effect of change in UK supplementary corporation tax (204) Loss on disposal of Oxxio B.V. after taxation (56) EXCEPTIONAL ITEMS (260) Net re-measurements* 68 EXCEPTIONAL ITEMS AND CERTAIN RE-MEASUREMENTS (192) For further d
Slide 18: Summary and outlook
Summary and outlook Summary • Earnings decreased in H1 reflecting lower downstream profit – higher wholesale costs and lower consumption • Higher upstream profit – strong nuclear generation performance – higher achieved prices – impacted by increased UK upstream gas and oil tax rates • Reduced stora
Slide 19: Sam Laidlaw, Chief Executive
Sam Laidlaw Chief Executive —S 19 centrica
Slide 20: Market environment
Market environment • Period of rising and volatile worldwide commodity prices – unrest in the Middle East and North Africa – Japanese natural disaster and nuclear events – increasing importance of LNG • North American gas and power prices remain low • Challenging UK economic conditions – falling dis
Slide 21: H1 performance overview
H1 performance overview • Good progress in first half in challenging market conditions, demonstrating resilience of Centrica business model • Strong operational performance, both upstream and downstream – continued improvement in health and safety performance – customer account growth in UK resident
Slide 22: Grow British Gas
Grow British Gas • Strong operational performance – increase in residential energy accounts – further improvement in NPS – 10m online transactions • Partnerships with Nectar and Sainsbury’s – 3m customers registered on Nectar – high value customers – helping shape customer behaviour • Increase in ga
Slide 23: Grow British Gas
Grow British Gas British Gas Services • Continued focus on service delivery and value – same day call-out service – over 85% of customer accounts now insurance based • Consumer confidence impacting installations growth • Full year profit growth expected British Gas Business • Further progress – focu
Slide 24: Grow British Gas
Grow British Gas • Home Energy Plan launched – first supplier to launch a Green Deal offering • Completed 100k insulation jobs – 3.3Mt of lifetime carbon savings • Largest UK installer of solar PV • Over 350k Smart meters installed • Progress in social housing – PH Jones acquisition – £100m of commu
Slide 25: Deliver value from our growing upstream business
Deliver value from our growing upstream business Gas & oil • Continued strong operational performance – Morecambe shut-in during May & June – full year production expected to be c50mmboe • Continued progress in our upstream gas investments – first gas achieved at F3-FA – Ensign first gas expected in
Slide 26: Deliver value from our growing upstream business
Deliver value from our growing upstream business Power generation • Strong nuclear performance – output up 25% to 6.2TWh • Improved wind yields • Low clean spark spreads impacting CCGTs – generation volumes down 40% – four plants in short-term preservation – continued excellent reliability • Lincs -
Slide 27: Build an integrated North American business
Build an integrated North American business Continued progress in each line of business – building on our existing platform in North America DE Residential Customers (m) • Strong downstream performance 3 Gateway – improved customer retention 2 – reduction in bad debt • Building the base in Texas 1 –
Slide 28: Build an integrated North American business
Build an integrated North American business DE Business • Continued volume growth • Further operating margin improvement – high sales productivity, customer targeting and operational efficiencies DE Services • Clockwork integration largely complete Clockwork • Robust platform for growth through esta
Slide 29: Drive superior financial returns
Drive superior financial returns H1 summary • Strong operational performance across the Group • Demonstrates resilience in difficult external environment Outlook • Focus on maintaining competitive position – cost reduction and disciplined capital deployment – continue to build on operational progres