Orsted · OMXCOP:ORSTED
Orsted — DONG Energy — H1 2014 Earnings Presentation
21 slides from Orsted's earnings presentation, Aug 27, 2014
Slide 1: Moving Energy Forward – Interim Financial Report H1 2014
MOVING ENERGY FORWARD INTERIM FINANCIAL REPORT H1 2014 27 August 2014 H1 2014 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: H1 2014 highlights – Financials
H1 2014 highlights Financials H1 2014 RESULTS 3
Slide 4: Strong progress
Strong progress Highlights H1 14 Group EBITDA (DKKbn) EBITDA of DKK 9.8bn (up 26% y/y) Low net debt level after equity injection and 15.0 14.1 13.7 +26% divestments 9.8 FFO1/Adjusted net debt of 35% (23% in 2013) 8.6 7.8 ROCE1 of 4.1% (7.1% excl. writedowns) – up by 10.4 percentage points vs
Slide 5: Revised long-term targets for E&P
Revised long-term targets for E&P Successful production growth in recent years Production kboe/day However, the E&P business has faced some challenges recently with: 112 ‒ Exploration results not living up to the Group's expectations CAGR +20% 87 ‒ Downward adjustment of gas price forecasts 78 7
Slide 6: Recent key events
Recent key events EGM – election of Chairman of the Board of Directors CV Thomas Thune Andersen ‒ Thomas Thune Andersen elected at EGM on 7 August 2014 Selective current Board Memberships: Sale of 50% in German offshore wind farm Gode Wind 2 ‒ Lloyd's Register Group (Chairman) ‒ Farm-down an i
Slide 7: H1 2014 highlights – Financials
H1 2014 highlights Financials H1 2014 RESULTS 7
Slide 8: 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 prices Forward prices 120 30 70 100 25 60 80 20 50 60 15 40 2012 2013 2014 2015 2012 2013 2014 2015 Source: Platts, Argus Source: LEBA WIND ENERGY CONTENT GREEN DARK SPREAD
Slide 9: Financial highlights H1 14
Selected financials (DKKm) H1 14 H1 13 2013 Financial highlights H1 14 Revenue 35,873 39,238 73,105 EBITDA 9,813 7,766 15,004 EBITDA – DKK 9.8bn (up 26% y/y) Net financial items -1,233 -1,829 -3,801 Higher gas production (Ormen Lange redetermination) Net profit 1,429 430 -993 Gain from divestmen
Slide 10: Exploration & Production
Exploration & Production Oil & Gas production (mboe) Oil Gas 31.7 26.4 28.5 Operational highlights H1 14 24.4 20.4 Gas production up 93% – primarily due to the 5.0 redetermination of the Ormen Lange field 12.6 4.6 15.4 Siri platform – repair work completed in July 2014 8.0 Hejre start-up expec
Slide 11: Wind Power
Wind Power Renewable production (TWh) 6 Operational highlights H1 14 4 2.8 2.6 Full-year impact from Anholt partly offset by lost production from divestments (London Array, Swedish 2 hydro plant, Danish & Polish onshore wind) 0 Continued high availability (95% in H1 14) 2010 2011 2012 2013 H1 13
Slide 12: Thermal Power
Thermal Power Thermal heat and power production (PJ, TWh) 60 20 Operational highlights H1 14 15 40 Declining power and heat production 10 20 ‒ Declining power production (-45% y/y) and prices 5 due to windy (Q1) and warm weather, rising hydro 0 0 levels and increased production from wind assets 20
Slide 13: Customers & Markets
Customers & Markets Operational highlights H1 14 Operational figures H1 13 H1 14 Milder weather negatively impacting gas sales and Gas sales TWh 66.3 58.3 gas distribution Power sales TWh 8.5 15.3 Higher power sales y/y from increased wind power Distribution of gas TWh 5.5 4.4 production in the
Slide 14: Debt overview
Debt overview Gross debt and hybrids Net debt (DKKbn) Key ratios loan portfolio1 H1 14 2013 Duration 7.5 5.9 1% -75% 16% Average time to maturity (years) 10.9 10.2 Bonds 25.8 Hybrids Average interest rate 4.2% 3.7% Bank loans Note (1): The key ratios refer to the end of period position and exclude h
Slide 15: Outlook (unchanged)
Outlook (unchanged) EBITDA DKK 15-17bn in 2014 Net investments Around DKK 30bn in 2014-2015 FFO/Adjusted net debt Around 25% in 2014 Around 30% from 2015 and onwards H1 2014 RESULTS 15
Slide 16: Q&A H1 2014 Results
DONG H12014RESULTS 16 energy
Slide 17: Appendix
APPENDIX H1 2014 RESULTS 17
Slide 18: Financial targets
Financial targets ROCE H1 14 LTM Target 2016 Target 2020 EBITDA DKKbn 20 4.1% (7.1% excl. 15 Group 10% 12% writedowns) E&P -0.1% (11.9%) ~12% on average for 2015-2020 2013 2016 WP 10.2% (10.2%) 6-8% 12-14% Adjusted FFO/Net debt % Around 30% 23% C&M -1.1% (-1.1%) 8% 10% Operating CF Target: Yearly op
Slide 19: Outlook market prices
Outlook market prices Estimate Actual, Actual, 2014 (rest H1 14 H1 13 of year) (average) Oil, Brent USD/bbl 109 107 111 Gas, TTF EUR/MWh 22 28 20 Gas, NBP EUR/MWh 22 28 20 Electricity, Nord Pool system EUR/MWh 28 40 30 Electricity, Nord Pool, DK1 EUR/MWh 30 40 35 Electricity, EEX EUR/MWh 32 38 35 El
Slide 20: Investments
Investments Investments in H1 14 Gross investments on Business Units in H1 14 DKKm E&P DKK 2.1bn Cash flow from investing activities - 8,596 Wind Power DKK 4.0bn Purchase and sale of securities (reversal) 9,455 Other DKK 0.7bn Sale of assets and companies (reversal) - 7,587 Total: DKK 6.8bn
Slide 21: Calculation of FFO/Adjusted net debt
Calculation of FFO/Adjusted net debt H1 14 LTM H1 13 LTM 2013 1 EBITDA (Business Performance) 17.1 12.7 15.0 Reversal of recognised lease payment 0.5 0.4 0.4 Adjusted net interest expenses -2.8 -2.2 -2.8 Net interest expenses -1.7 -0.9 -1.7 Capitalised interest -0.3 -0.5 -0.3 Interest element of dec