Orsted · OMXCOP:ORSTED
Orsted — Ørsted — Q1 2023 Earnings Presentation
43 slides from Orsted's earnings presentation, May 3, 2023
Slide 1: Investor presentation Q1 2023
Investor presentation Q1 2023 3 May 2023
Slide 2: Disclaimer
DISCLAIMER This presentation contains certain forward-looking statements which include projections of our short- and long-term financial performance and targets as well as our financial policies, including but not limited to, the statements and expectations contained in the “Financial Outlook” secti
Slide 3: All time high earnings in offshore sites and FID on Greater Changhua 2b & 4
All time high earnings in offshore sites and FID on Greater Changhua 2b & 4 Strategic highlights – Q1 2023 • Final investment decision on the 920 MW offshore wind farms Greater Changhua 2b & 4 in Taiwan • 884 MW proposal submitted to Rhode Island’s offshore wind solicitation together with JV partner
Slide 4: Continued acceleration of annual tendering of offshore wind
Continued acceleration of annual tendering of offshore wind > 25 GW expected to be auctioned in 2023 Bids submitted Upcoming auctions and tenders Award Q2 2023 Q2 2023 H1 2023 H1 2023 H1 2023 2023 New York 3 New Jersey 3 Germany Japan auctions ORESS 1 Sørlige Nordsjø II site 1 2,000 - 4,600 MW 1,200
Slide 5: Ørsted construction programme and pipeline
Ørsted construction programme and pipeline Gross renewable capacity MW 2,852 65 30,683 Offshore 2,147 1,045 Onshore 1,498 Other (incl. biomass & PtX) 3,214 6,312 Recent FID 1,628 1,394 72 20,381 920 321 130 2,147 1,166 900 15,478 6,247 2,075 4,532 22,224 11,987 8,871 Installed Greater German South G
Slide 6: Offshore sites earnings increased by 6.9% EBITDA in Q1 2023
Offshore sites earnings increased by 58 % EBITDA of DKK 6.9 in Q1 20231 EBITDA excluding new partnerships DKKm • Offshore wind speeds marginally below norm (10.9 m/s in Q1 2023 vs. Q1 2022 7,819 norm of 11.0 m/s), and below last year (11.3 m/s in Q1 2022) • Positive hedge impact of DKK 2.1 bn, drive
Slide 7: Net profit, ROCE and Equity
Net profit, ROCE and Equity Net profit Borkum Riffgrund 3 ROCE Equity Equity excl. hedging reserves farm-down DKKbn %, last 12 months DKKbn Hedging reserves 19.0 5.7 95.5 102.8 13.8 1.6 3.2 122.0 119.6 4.1 Q1 2022 Q1 2023 31 Mar 2022 31 Mar 2023 -26.5 -16.8 31 Dec 2022 31 Mar 2023 Net profit of DKK
Slide 8: Net interest-bearing debt and credit metric
Net interest-bearing debt and credit metric Net interest-bearing debt FFO / Adj. net debt DKKbn %1 6.0 0.1 35.3 37 38 30.6 8.8 -10.1 31 Dec 2022 CFO Capex Dividends & Other 31 Mar 2023 31 Mar 2022 31 Mar 2023 hybrids Net interest-bearing debt of DKK 35.3 bn, up DKK 4.7 bn FFO / Adj. net debt of 38 %
Slide 9: Non-financial ratios
Non-financial ratios Taxonomy-eligible KPIs Green share of energy generation Safety %, YTD %, YTD Total recordable injury rate, YTD 92 89 2.7 Revenue OPEX 1.3 87 72 31 Mar 2022 31 Mar 2023 31 Mar 2022 31 Mar 2023 EBITDA CAPEX Green share of energy at 89 % TRIR of 2.7 • Decrease driven by switch from
Slide 10: 2023 guidance & financial estimates
2023 guidance & financial estimates 2023 guidance DKKbn EBITDA (excluding new partnerships) 20 – 23 Gross investments 50 – 54 Financial estimates Target Year Fully loaded unlevered lifecycle spread to 150-300 bps Continuous WACC at the time of bid/FID1 Average yearly increase in EBITDA from ~12 % 20
Slide 11: Capital Markets Day 2023
Capital Markets Day 2023 Date Programme (UTC+1) 8 June 2023 09.00 – 10.00 Registration and breakfast 10.00 – 14.00 Presentations incl. Q&A Venue 14.00 – 16.00 Lunch and networking Science Museum, London Registration www.orsted.com/capital-markets-day 11
Slide 12: Q&A
Q&A DK: +45 78 76 84 90 UK: +44 203 769 6819 US: +1 646 787 0157 PIN: 994005 For questions, please press 5*
Slide 13: Appendix
Appendix
Slide 14: Forecasted renewable capacity build-out
Forecasted renewable capacity build-out Global renewable energy capacity Global offshore wind capacity North American renewable capacity by technology1 excl. mainland China by technology2 GW installed GW installed GW installed CAGR Americas Biomass 2 % Biomass Asia Pacific +26 GW/year Batteries 32 %
Slide 15: Renewable capacity as of 31 March 2023
Renewable capacity as of 31 March 2023 Indicator, MW, gross Q1 2023 Q1 2022 Δ FY 2022 Installed renewable capacity Installed renewable capacity The installed renewable capacity is calculated as the 15,478 13,275 2,203 15,121 cumulative renewable gross capacity installed by Offshore, wind power 8,871
Slide 16: Offshore wind build-out plan
Offshore wind build-out plan Installed capacity MW 2,852 22,224 Under construction 1,045 Awarded 1,498 3,214 1,628 920 11,987 1,166 130 900 8,871 Installed Greater German South Greater Decided US North- US Mid-Atlantic Baltica 2 Baltica 3 Hornsea 3 Decided capacity Changhua Portfolio1 Fork Wind Chan
Slide 17: Onshore build-out plan
Onshore build-out plan Installed capacity MW Under construction 471 50 25 29 16 6,247 600 250 201 4,532 73 Installed Old 3001 Sparta2 Sunflower Eleven Mile Mockingbird German French Irish UK Decided (FID’ed) capacity portfolio4 portfolio5 portfolio6 portfolio7 and installed Q1 2023 capacity Region E
Slide 18: Offshore market development – UK, Ireland and Isle of Man
Offshore market development – UK, Ireland and Isle of Man • In April 2021 the UK Government increased its ambition for offshore wind to 50 GW by 2030, including 5 GW of floating offshore wind, to reduce reliance on imports and improve energy security. This ambition was reiterated in the Government’s
Slide 19: Offshore market development – Continental Europe
Offshore market development – Continental Europe • New government has ambitions to increase offshore wind targets to 30 GW by 2030, 40 GW by 2035 and 70 GW by 2045, necessary to achieve the countries target of GHG- neutrality by 2045 with 80% renewables in the energy mix by 2030 Germany • Tender vol
Slide 20: Offshore market development – US
Offshore market development – US • Target of 5.6 GW offshore wind by 2027 of which 3.2 GW has already been awarded Massachusetts • Next OSW procurement for up to 3.6 GW released, with bid submission by January 2024 • Target of up to 2.3 GW of offshore wind capacity by 2030, of which 1.2 GW remains a
Slide 21: Offshore market development – APAC
Offshore market development – APAC • Taiwan has met its target of awarding 5.5 GW to be commissioned by 2025 • Ørsted has more than 3 GW of developing pipeline in preparation to participate future auctions Taiwan • Third round auction announced with 15 GW offshore wind target to be constructed from
Slide 22: Offshore seabed competition
Offshore seabed competition Ongoing H2 2023 2023 2024 Poland Gulf of Mexico Gippsland Central Atlantic 11 - 13 GW ~8 GW TBA TBD 2023 2023 2024 2024 Utsira Nord (floating) Celtic Sea (floating) Oregon Gulf of Maine 1.5 GW 4 GW ~3 GW TBD 22 All timelines and capacities based on authorities communicati
Slide 23: Power-to-X: Renewable hydrogen & e-fuels updates for Q1 2023
Power-to-X: Renewable hydrogen & e-fuels updates for Q1 2023 Signals for significant market growth Ørsted Power-to-X highlights during Q1 2023 Project development National & cross-national ambition setting Ørsted Power-to-X continues to mature a 42 countries now have a hydrogen strategy (up from 3 i
Slide 24: ESG Performance
ESG Performance Total heat and power generation Q1 2023 Scope 1 and 2 GHG intensity Scope 3 greenhouse gas emissions, Energy source, % g CO2e/kWh million tonnes CO2e Other scope 3 emissions Natural gas sales Offshore wind 37 Total scope 3 -87% -98% -90 % gas Onshore wind 25 -50 % all scope 3 product
Slide 25: Sustainability leadership in Ørsted
Sustainability leadership in Ørsted Globally recognised sustainability leadership ESG rating performance Our reporting Net-zero in 2040 across scope 1-3 Rating agency Score Benchmark First energy company in the world with an approved science-based Annual report net-zero target for the full value cha
Slide 26: Our strategic sustainability priorities & targets
Our strategic sustainability priorities & targets Science-aligned climate Green energy in that revives A green transformation that Governance that enables the action nature works for people right decisions Aspiration Aspiration Aspiration Aspiration We scale our green energy business We work to ensu
Slide 27: Group – Financial highlights
Group – Financial highlights Financial highlights Q1 2023 Q1 2022 D FY 2022 FY 2021 D EBITDA DKKm 6,910 9,429 (27 %) 32,057 24,296 32 % - New partnerships - 1,610 n.a. 10,993 8,507 29 % - EBITDA excl. new partnerships 6,910 7,819 (12 %) 21,064 15,789 33 % • Offshore 5,412 5,919 (9 %) 19,569 18,021 9
Slide 28: Offshore – Financial Highlights
Offshore – Financial Highlights Financial highlights Q1 2023 Q1 2022 D FY 2022 FY 2021 D EBITDA DKKm 5,412 5,919 (9 %) 19,569 18,021 9% • Sites, O&Ms and PPAs 5,859 3,698 58 % 9,940 13,059 (24 %) • Construction agreements and (42) 2,620 n.a. 12,277 7,535 63 % divestment gains • Other, incl. project
Slide 29: Onshore – Financial Highlights
Onshore – Financial Highlights Financial highlights Q1 2023 Q1 2022 D FY 2022 FY 2021 D EBITDA DKKm 834 850 (2 %) 3,644 1,349 170 % • Sites 324 496 (35 %) 2,097 535 292 % • Production tax credits and tax 759 568 34 % 2,556 1,382 85 % attributes • Other, incl. project development (249) (214) 16 % (1,
Slide 30: Bioenergy & Other – Financial Highlights
Bioenergy & Other – Financial Highlights Financial highlights Q1 2023 Q1 2022 D FY 2022 FY 2021 D EBITDA DKKm 517 2,514 (79 %) 8,619 4,747 82 % • CHP plants 845 1,823 (54 %) 5,851 3,202 83 % • Gas Markets & Infrastructure (237) 725 n.a. 3,117 1,829 70 % • Other, incl. project development (91) (34) 1
Slide 31: Liquidity reserve significantly above target
Liquidity reserve significantly above target Collateral and margin postings, Liquidity reserve DKKbn DKKbn 30.6 97.8 98.8 0.4 88.0 18.4 14.1 1.3 12.7 3.2 9.7 11.8 7.7 3.1 1.8 Sep 2022 Dec 2022 Mar 2023 Sep 2022 Dec 2022 Mar 2023 Initial margin Cash, available Variation margin Securities, available T
Slide 32: Debt and hybrids overview
Debt and hybrids overview Total gross debt and hybrids Effective funding costs – Gross debt Maturity profile of gross debt 31 March 2023, DKKbn DKKbn >95 % of gross debt (bond and bank loans) fixed interest rate. Remainder floating or inflation-linked 33.9 3.8% 3.1% 8% 3.3% 3.4% 2.8% 20 % 78.4 2.7%
Slide 33: Currency and energy exposure
Currency and energy exposure Currency exposure Q2 2023 – Q1 2028 Energy exposure Q2 2023 – Q1 2028* DKKbn DKKbn Before hedging Before hedging After hedging After hedging via traded markets 82.1 46.2 37.9 14.6 4.1 5.3 4.7 0.0 -1.0 -0.1 -0.1 -6.6 -7.5 -15.3 Power Gas Oil Spread GBP USD1 NTD1 Risk afte
Slide 34: Hedge levels for merchant exposure
Hedge levels for merchant exposure1 As of 31 March 2023 Merchant exposure covered with ‘as produced’ PPA contracts Offshore Merchant exposure covered with fixed volume obligations 79% 69% 1% 49% 79% 8% 68% 17% 17% 41% 15% 15% 2% 2% 2023 2024 2025 2026 2027 Onshore 73% 67% 59% 60% 60% 29% 37% 42% 41%
Slide 35: Portfolio revenue uncertainty
New approach better suited for the characteristics of our portfolio Lower hedge level and shorter time horizon. Hedge level of Hedge level will depend on portfolio composition merchant exposure between 0-70 % in Y1 & Y2 • Leveraging portfolio diversification as natural hedge between price • Risk of
Slide 36: Capital employed
Capital employed Capital employed, DKKm Q1 2023 FY 2022 Q1 2022 FY 2021 Capital employed by segment %, Q1 2023 Intangible assets, and property and equipment 186,799 181,694 166,727 162,939 Offshore Onshore Assets classified as held for sale, net - - 684 860 Bioenergy & Other Equity investments and n
Slide 37: Taxonomy-aligned KPIs
Taxonomy-aligned KPIs Unit Q1 2023 Q1 2022 D FY 2022 Revenue DKKm 29,369 33,762 (13 %) 132,227 Taxonomy-aligned revenue % 87 68 19 %p 73 - Electricity generation from solar PV and storage electricity % 0 0 0 %p 0 - Electricity generation from wind power % 76 58 18 %p 65 - Cogeneration of heat and po
Slide 38: FFO/Adjusted net debt calculation
FFO/Adjusted net debt calculation Funds from operations (FFO), DKKm1 31 Mar 2023 31 Dec 2022 31 Mar 2022 EBITDA 29,538 32,057 28,862 Change in provisions and other adjustments (1,538) (2,213) (1,820) Change in derivatives 434 (8,687) (5,203) Variation margin (add back) 1,419 10,332 6,447 Reversal of
Slide 39: Hybrid capital in short
Hybrid capital in short Hybrid capital can broadly be defined as funding Due to hybrid’s equity-like features, rating Accounting treatment instruments that combine features of debt and agencies assign equity content to the hybrids when • Hybrid bonds are classified as equity equity in a cost-efficie
Slide 40: Ørsted's outstanding senior bonds
Ørsted’s outstanding senior bonds Outstanding Fixed/Floating Green Allocated to green Avoided emissions (thousand Bond Type Issue date Maturity Face Value Coupon Coupon payments amount rate bond projects (DKKm) tons CO2/year) Senior Unsecured Nov. 2017 26 Nov. 2029 EUR 750m EUR 750m Fixed 1.5% Every
Slide 41: Inflation and interest rate risks
Inflation and interest rate risks Fixed nominal Inflation-indexed Merchant 2023-2032 nominal cashflows from Active use of debt & hedges Offshore & Onshore assets to mitigate inflation risk 15% 50% 25% 30% 30% 40% 35% 45% 30% Revenue incl. hedges Other EBITDA EBITDA Debt Hedges of future debt EBITDA
Slide 42: Glossary
Glossary Balancing costs Ineffective hedges The cost of settling intraday differences between expected (day- Expected overhedging of future periods, which we, according to IFRS, ahead) and actual (real-time) production have to recognise already in the quarter where we report Intermittency costs Pric
Slide 43: Investor Relations contacts
Rasmus Hærvig Henriette Stenderup Head of Investor Relations Investor Relations Coordinator rakol@orsted.com hnste@orsted.com Sabine Lohse Valdemar Høgh Andersen Christopher Glaf Stenhammer Lead Investor Relations Officer Investor Relations Officer Finance Graduate sablo@orsted.com vehan@orsted.com