Slide 1: Centrica
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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: Centrica
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Slide 4: Centrica
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Slide 5: Financial headlines
Financial headlines Period ended 30 June 2009 2008 Continuing operations: Revenue (£m) 11,657 9,677 Operating profit (£m) 936 989 Profit before tax (£m) 875 993 Effective tax rate 39% 58% Group result: Earnings (£m) 537 418 (1) Earnings per share (p) 10.5 10.1 (1) Interim dividend per share (p) 3.66
Slide 6: Operating profit analysis
Operating profit analysis Period ended 30 June (£m) 2009 2008 British Gas 476 306 Centrica Energy 332 504 Direct Energy 66 91 Centrica Storage 73 93 Other (11) (5) Total operating profit 936 989 Above figures include JVs & associates net of interest & taxation and are before exceptional items & cert
Slide 7: Operating profit analysis
Operating profit analysis Period ended 30 June (£m) 2009 2008 British Gas 476 306 Centrica Energy 332 504 Direct Energy 66 91 Centrica Storage 73 93 Other (11) (5) Total operating profit 936 989 Above figures include JVs & associates net of interest & taxation and are before exceptional items & cert
Slide 8: British Gas: operating profit & key drivers
British Gas: operating profit & key drivers BGR revenue BGR commodity Period ended (£m) costs (£m) 30 June (£m) H1 2009 H1 2008 4,380 Residential Energy 299 166 3,823 Business Energy 65 55 2,695 Home Services 112 85 2,315 British Gas 476 306 H1 2008 H1 2009 H1 2008 H1 2009 BGB revenue BGS revenue Co
Slide 9: Operating profit analysis
Operating profit analysis Period ended 30 June (£m) 2009 2008 British Gas 476 306 Centrica Energy 332 504 Direct Energy 66 91 Centrica Storage 73 93 Other (11) (5) Total operating profit 936 989 Above figures include JVs & associates net of interest & taxation and are before exceptional items & cert
Slide 10: Centrica Energy: operating profit & key drivers
Centrica Energy: operating profit & key drivers Gas production sales price Period ended (p/therm) 30 June (£m) H1 2009 H1 2008 Gas production 346 638 55.7 52.9 Power generation 41 (5) I&C (89) (156) Accord 34 27 Centrica Energy 332 504 H1 2008 H1 2009 Gas production volumes Power generation volumes
Slide 11: Operating profit analysis
Operating profit analysis Period ended 30 June (£m) 2009 2008 British Gas 476 306 Centrica Energy 332 504 Direct Energy 66 91 Centrica Storage 73 93 Other (11) (5) Total operating profit 936 989 Above figures include JVs & associates net of interest & taxation and are before exceptional items & cert
Slide 12: Direct Energy: operating profit & key drivers
Direct Energy: operating profit & key drivers Mass markets Period ended Customers (‘000) Margin % 30 June (£m) H1 2009 H1 2008 3,115 Mass markets 46 61 3,034 C&I 20 8 4.4% 3.2% Services 3 3 Upstream (3) 19 Direct Energy 66 91 H1 2008 H1 2009 H1 2008 H1 2009 Commercial & industrial Upstream gas produ
Slide 13: Operating profit analysis
Operating profit analysis Period ended 30 June (£m) 2009 2008 British Gas 476 306 Centrica Energy 332 504 Direct Energy 66 91 Centrica Storage 73 93 Other (11) (5) Total operating profit 936 989 Above figures include JVs & associates net of interest & taxation and are before exceptional items & cert
Slide 14: Cash flow
Cash flow Period ended 30 June (£m) 2009 2008 Opening net debt (511) (795) EBITDA 1,257 1,293 Working capital movements* 96 (463) Margin calls (74) 1,063 Interest and tax (379) (286) Gross capex (1,668) (545) Dividends (447) (356) Other (163) (185) Closing net debt (1,889) (274) Margin cash held / (
Slide 15: Capital and acquisition expenditure
Capital and acquisition expenditure (£m) H1 2009 FY 2009e FY 2008 UK Gas 145 325 121 UK Power 73 175 321 Direct Energy 46 125 111 Gas Storage 30 50 27 Europe 49 50 23 British Gas / Other 33 100 79 Total pre-acquisitions 376 825 682 Acquisitions / disposals 1,071 2,350 * 431 Total 1,447 3,175 1,113 R
Slide 16: Summary
Summary • Strong UK downstream profitability • UK and North America upstream impacted by lower commodity prices • Balance sheet headroom supports further investment • Existing business trading broadly in line with expectations
Slide 17: Centrica
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Slide 18: Overview
Overview • Good Group results in the period • Business displayed strength against difficult economic backdrop • Operational and efficiency improvements enhancing competitiveness • Material progress made against long term strategic priorities
Slide 19: British Gas Residential
British Gas Residential • Significant improvements in customer service • 1.4m customers managing accounts on-line • Leading retail price position • Increasing retail customer base − growing proportion of high value customers − grown energy accounts year to date % of Ombudsman % of calls Customer Sal
Slide 20: British Gas Services
British Gas Services • Strong profit and earnings performance • Ongoing improvements to service − net promoter score at a record high • New customer call-ahead service introduced • Strong growth from newer product range Accounts Net promoter Engineer effectiveness (‘000) score 60% 95% 3,500 3,000 Ho
Slide 21: British Gas Business
British Gas Business • Underlying growth in profit, up 30% • Ongoing top line and customer growth • Minimising impact of economic downturn • Established Business Energy Services capability • Industry leader in SMART meter installations Customer supply points ('000) % of customers initiating contact
Slide 22: British Gas
British Gas • Integrated management and combined support functions • Improved customer targeting − energy sales from services call centres up 50% − proportion of services sales from energy channels doubled − HEC promotion in conjunction with energy price reduction • Relaunched brand marketing • Grow
Slide 23: Upstream – Gas
Upstream – Gas • Development of around 100bcf of reserves in 2009 • Good progress made at Newfield properties − Grove 2nd well now delivering gas; 3rd well drilled and tested − Seven Seas flow rate exceeding expectations • Own 29.9% of Venture Production plc, launched cash offer for whole business •
Slide 24: Upstream – Power
Upstream – Power • Improved deal to acquire 20% equity stake in British Energy • Increases UK peak power cover to around 85% • Improved generation fuel mix; maintains a low carbon intensity fleet • Langage to commence operations Peak power cover (%) by end of 2009 100 Drax contract • Strong performa
Slide 25: Centrica Storage
Centrica Storage (%) Rough inventory • Rough operationally strong 100 80 − 99% reliability 2009 60 − record withdrawal and 2008 40 injection season 20 − over 90% full at end of July 0 − top class safety record Jan Feb Mar Apr May Jun Jul • Capital allowances for cushion gas improve project economics
Slide 26: Europe
Europe • Pace of deregulation in energy remains slow • Key markets continue to favour incumbents • SPE, the largest business, sold as part of the British Energy deal • Exiting retail businesses in Netherlands and Spain • German business remains important in addressing UK supply • Group focus now on
Slide 27: Direct Energy
Direct Energy • Improving downstream picture − underlying mass markets profitability up − growth in number of retail customers − improved C&I profits and margins • Upstream − grown reserves base − experienced good power station reliability − held back by lower wholesale commodity prices • Deliver en
Slide 28: Summary
Summary • Good results in challenging global market conditions • Very encouraging UK downstream performance • British Gas positioned well for future value growth • Improved British Energy deal strengthens the business • UK and North America offer strong returns • Strong funding position allows us to
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