Orsted · OMXCOP:ORSTED
Orsted — Ørsted — Q4 2021 Earnings Presentation
43 slides from Orsted's earnings presentation, Feb 2, 2022
Slide 1: Investor presentation Q4 2021
Investor presentation Q4 2021 2 February 2022
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: 2021 guidance delivered with very different composition of EBITDA
2021 guidance delivered with very different composition of EBITDA due to extraordinary market conditions Group EBITDA Achieved guidance in 2021 DKKbn • Group EBITDA without new partnerships amounted to DKK 15.8 bn, in Offshore new partnerships line with our expectations Existing activities • Results
Slide 4: Grew firm capacity by 28% in 2021 in a competitive environment
Grew firm capacity by 28 % in 2021 in a competitive environment Firm renewable capacity Firm capacity milestones MW, gross Offshore Offshore Onshore • Demonstrated proven partnership approach through JV with PGE in Bioenergy & Other (incl. PtX) Poland as partner, adding 2.5 GW to firm capacity • Suc
Slide 5: Accomplishing strategic milestones and building out pipeline to meet ~50 GW 2030 ambition
Accomplishing strategic milestones and building out pipeline to meet ~50 GW 2030 ambition Strong pipeline to realise the 2030 ambition Progress continues on market development GW, gross Offshore Offshore Onshore • Scotland: Awarded a 1 GW floating lease site in ScotWind auction Bioenergy & Other (in
Slide 6: Ørsted awarded 846 MW offshore wind contract in Maryland
Ørsted awarded 846 MW offshore wind contract in Maryland and received final COP for the 130 MW South Fork project 846 MW Skipjack 2 project • Awarded a 20-year Offshore Renewable Energy Certificate (OREC) following a competitive solicitation • The 20-year OREC price is USD 83.9 per MWh from 2026, wi
Slide 7: Ørsted construction programme and pipeline
Ørsted construction programme and pipeline Gross renewable capacity MW 1,498 26,156 Offshore 1,045 2,080 Onshore 920 3,214 Bioenergy & Other (incl. PtX) 4,704 Recent FIDs 1,758 680 2 17,721 673 1,166 2,080 900 1,320 12,980 4,704 2,078 3,351 19,372 10,937 7,551 Installed Hornsea 2 Greater German Onsh
Slide 8: Secured 25% of awarded capacity in 2021; auctions and tenders yet to come
Secured 25 % of awarded capacity in 2021 with significant number of offshore wind auctions and tenders yet to come Awarded gross capacity 20211 Upcoming auctions and tenders GW Ørsted and partners Other Outcome in 2022 H2 2022 2022 H1 2023 H2 2023 New Jersey offshore German tender Japan auction New
Slide 9: EBITDA impacted by energy crunch, CHP plants and farm-down gain
EBITDA impacted by energy crunch, exceptional performance from CHP plants and farm-down gain EBITDA of DKK 8.3 bn, up DKK 3.3bn on Q4 2020 Effects expected at the beginning of the year DKKm • Wind impact 2020 in Offshore (DKK -0.1 bn), ceasing business performance Q4 2020 5,003 (DKK 0.3 bn), higher
Slide 10: Net profit, net interest-bearing debt, and credit metric
Net profit, net interest-bearing debt, and credit metric Net profit Cash flow and net debt FFO / Adj. net debt DKKm DKKm % 3,258 11,751 65 1,704 1,021 24,280 2,189 21,211 212 -668 -10,951 31 30 Sep CFO CAPEX Divest- Hybrid Lease Exchange 31 Dec Q4 2020 Q4 2021 2021 ments coupon obligation rate adj.
Slide 11: Financial and non-financial ratios
Financial and non-financial ratios ROCE Taxonomy-eligible KPIs Greenhouse gas emissions Safety % YTD (scope 1 & 2), g CO2e/kWh, YTD Total recordable injury rate, YTD 14.8 58 58 3.6 3.0 9.7 Revenue 66% 31 Dec 2020 31 Dec 2021 31 Dec 2020 31 Dec 2021 31 Dec 2020 31 Dec 2021 EBITDA 90% ROCE of 15 % Con
Slide 12: Outlook – Guidance for 2022
Outlook – Guidance for 2022 2022 EBITDA without new partnerships of DKK 19 – 21 bn Guidance on 2022 EBITDA without new partnerships DKKbn Directional earnings development per business unit • Offshore (without new partnerships) expected to be significantly higher than in 2021 • Onshore expected to be
Slide 13: 2022 guidance, strategic ambition and financial guidance
2022 guidance, strategic ambition and financial guidance 2022 guidance DKKbn Strategic ambition and financial guidance EBITDA (without new partnerships) 19 – 21 Ambition for installed renewable capacity by 2030 ~50 GW Gross investments 38 – 42 - Offshore ~30 GW - Onshore ~17.5 GW Business unit EBITD
Slide 14: Q&A
Q&A Earnings call DK: +45 78 72 32 50 UK: +44 333 300 9031 US: +1 833 249 8404 For questions, please press 01
Slide 15: Appendix
Appendix Orsted
Slide 16: Outlook – Directional business unit EBITDA FY 2022 vs. FY 2021
Outlook – Directional business unit EBITDA FY 2022 vs. FY 2021 • • • ̵ ̵ • • • ̵ ̵ • • • • • • 16
Slide 17: Renewable capacity as of 31 December 2021
Renewable capacity as of 31 December 2021 Indicator, MW, gross FY 2021 FY 2020 Δ Installed renewable capacity The installed renewable capacity is calculated as the Installed renewable capacity 12,980 11,318 1,662 cumulative renewable gross capacity installed by Offshore, wind power 7,551 7,572 (21)
Slide 18: 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 2 % biomass Americas Biomass 32% Batteries Asia Pacific +26 GW/year
Slide 19: Offshore wind build-out plan
Offshore wind build-out plan Installed capacity MW 1,498 19,372 Under construction 1,045 920 Awarded 3,214 1,758 1,166 10,937 900 1,320 7,551 Installed Hornsea 2 Greater German Decided US North- US Mid- Greater Baltica Baltica Decided capacity Changhua Portfolio1 (FID’ed) and East cluster2 Atlantic
Slide 20: Offshore market development – UK and Continental Europe
Offshore market development – UK and Continental Europe • UK Government target annual build-out of 3 GW to reach 40 GW capacity by 2030, including 1 GW of floating wind by 2030 • CfD auction opened December 2021 with an allocated pot of GBP 200 m for bottom-fixed, but no capacity cap. Floating Wind
Slide 21: 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, through and including December 2021 awards Massachusetts • Next auction expected in late 2023 • Target of 2 GW of offshore wind capacity by 2030, of which 1.2 GW remains available Con
Slide 22: Offshore market development – APAC
Offshore market development – APAC • Taiwan has met its target of awarding 5.5 GW to be commissioned by 2025 • 600 MW Greater Changhua 3 project ready for future auctions Taiwan • Third round auction announced with 15 GW offshore wind target to be constructed from 2026-2035, up from 10 GW previously
Slide 23: Upcoming offshore seabed competition
Upcoming offshore seabed competition 2022 H1 2022 2022 Q4 2022 / Q1 2023 1 H2 2023 1 2023 Poland New York Bight Norway Gulf of Mexico Oregon Celtic Sea floating ~ 12 GW ~ 7 GW ~ 4.5 GW TBC TBC < 4 GW H1 2022 H1 2022 H2 2022 Q2 / Q3 2023 1 H2 2024 1 Scotland INTOG 2 North Carolina California Central
Slide 24: Hydrogen and green fuels project pipeline of +3GW
Hydrogen and green fuels project pipeline of +3GW Project Current Country Application Partners Additional announced potential (MW) development partnerships Westküste 100 / Raffinerie Heide, Hynamics, 1 HySCALE100 700-2,100 Holchim, +more • POSCO: MoU expands relationship, involving conducting feasib
Slide 25: Overview of US offshore wind federal permitting process
Overview of US offshore wind federal permitting process Planning & Analysis Leasing Site Assessment Construction & Operations BOEM1 conducts a BOEM conducts BOEM grants developer Submit COP for NOI Construction and Operations Plan (COP) process of area auctions and up to five years (not all identifi
Slide 26: Onshore build-out plan
Onshore build-out plan Installed capacity MW 518 29 16 4,704 Under construction 430 298 62 3,351 Installed Haystack Kennoxhead 1 Old 300 Helena Energy Lisheen 3 Ballykeel Decided capacity Center1 (FID’ed) and Q4 2021 installed capacity Region SPP, NE Scotland, UK ERCOT, TX ERCOT, TX Ireland Northern
Slide 27: Sustainability and ESG at Ørsted
Sustainability and ESG at Ørsted Green leadership Contributing to the global goals ESG ratings of Ørsted • In 2021, 90 % of our energy generation was green. We target 99 % green energy generation by 2025. Rating agency Score Benchmark Ørsted is a LEAD participant of the UN • By 2025, we aim to be ca
Slide 28: ESG Performance
ESG Performance Total heat and power generation FY 2021 Greenhouse gas emission intensity Scope 3 greenhouse gas emissions, Energy source, % g CO2e/kWh million tonnes CO2e Offshore wind Biomass Scope 3 Other scope 3 emissions Onshore wind Coal Scope 1-2 Natural gas sales Solar PV Natural gas -99 % S
Slide 29: Group – Financial highlights
Group – Financial highlights FINANCIAL HIGHLIGHTS Q4 2021 Q4 2020 D FY 2021 FY 2020 D EBITDA DKKm 8,253 5,003 65 % 24,296 18,124 34 % - New partnerships 3,211 - n.a. 8,507 - n.a. - EBITDA excl. new partnerships 5,042 5,003 1% 15,789 18,124 (13 %) • Offshore 5,244 4,128 27 % 18,021 14,750 22 % • Onsh
Slide 30: Offshore – Financial highlights
Offshore – Financial highlights FINANCIAL HIGHLIGHTS Q4 2021 Q4 2020 D FY 2021 FY 2020 D Wind speed (m/s), offshore wind farms EBITDA DKKm 5,244 4,128 27 % 18,021 14,750 22 % 12.5 10.5 10.6 10.6 • Sites, O&Ms and PPAs 3,983 4,950 (20 %) 13,059 15,476 (16 %) 10.0 9.1 8.4 8.6 7.8 7.6 • Construction ag
Slide 31: Onshore – Financial highlights
Onshore – Financial highlights FINANCIAL HIGHLIGHTS Q4 2021 Q4 2020 D FY 2021 FY 2020 D Wind speed (m/s), US onshore wind farms EBITDA DKKm 530 324 64 % 1,349 1,131 19 % • Sites 211 99 113 % 535 451 19 % 8.0 8.0 7.7 7.3 7.9 7.6 7.4 • Production tax credits and tax attributes 480 314 53 % 1,382 1,004
Slide 32: Bioenergy & Other – Financial highlights
Bioenergy & Other – Financial highlights FINANCIAL HIGHLIGHTS Q4 2021 Q4 2020 D FY 2021 FY 2020 D EBITDA DKKm 2,416 643 276 % 4,747 2,136 122 % • CHP plants 1,715 346 396 % 3,202 1,111 188 % • Gas Markets & Infrastructure 770 389 98 % 1,829 411 345 % • Distribution, B2C, and city light - - n.a. - 92
Slide 33: Currency and energy exposure
Currency and energy exposure Currency exposure Q1 2022 – Q4 2026 Energy exposure Q1 2022 – Q4 2026 DKKbn DKKbn Before hedging Before hedging After hedging After hedging 70.8 67.6 21.9 12.3 12.3 14.9 5.0 1.0 0.0 -8.4 -1.6 -0.2 -1.2 -0.3 GBP1 USD2 NTD2 Power Gas Oil Spread (power) Risk after hedging,
Slide 34: Hedging levels
Hedging levels Hedging level of total exposures for each BU, as of 31/12/2021 Offshore 100% 95% 67% 51% 26% Year 1 Year 2 Year 3 Year 4 Year 5 Onshore 79% 80% 77% 78% 78% Year 1 Year 2 Year 3 Year 4 Year 5 Bioenergy 31% 13% 4% Year 1 Year 2 Year 3 34 Exposure is calculated as the expected production
Slide 35: Capital employed
Capital employed Capital employed, DKKm FY 2021 FY 2020 Capital employed by segment Intangible assets, and property and equipment 162,939 122,249 %, FY 2021 Offshore Assets classified as held for sale, net 860 793 Onshore Equity investments and non-current receivables 828 777 Bioenergy & Other Net w
Slide 36: FFO/Adjusted net debt calculation
FFO/Adjusted net debt calculation Funds from operations (FFO), DKKm FY 2021 FY 2020 EBITDA (Business performance for 2020) 24,296 18,124 Change in provisions and other adjustments (2,472) (403) Reversal of gain (loss) on divestment of assets (7,920) (805) Income tax paid (1,380) (1,118) Interests an
Slide 37: Debt and hybrids overview
Debt and hybrids overview Total gross debt and hybrids Effective funding costs – Gross debt Maturity profile 31 December 2021, DKKbn Cost of Modified Avg. time to DKKbn debt (%) duration (%) maturity (years) Bond loans 2.8 8.4 9.9 18.3 69.5 Bank loans 0.5 0.4 2.0 19.6 19.8 Total 2.7 7.9 9.5 26% 14.2
Slide 38: 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 39: Ørsted's outstanding bonds
Ørsted’s outstanding bonds Principal Allocated to green Avoided emissions (t CO2/year) Bond Type Issue date Maturity Face Value Coupon Coupon payments Green bond amount projects (DKKm) attributable to the bonds Senior Unsecured Sep. 2012 19 Sep. 2022 EUR 750m EUR 517m 2.625% Every 19 Sep. No n/a n/a
Slide 40: Financing strategy
Financing strategy At Ørsted, we have a centralised financing The financing strategy optimizes the strategy utilizing our strong balance sheet effect of a fully integrated cash pool and diverse portfolio. where cash at practically all of the The strategy supports: company’s more than 200 subsidiarie
Slide 41: Currency risk management
Currency risk management General principles • Highly certain cash flows are hedged • Cost-of-hedging is minimized by netting of exposures in the portfolio of projects, as well as use of construction contracts and debt in local currencies. Managing outright long risk • Operations: 5-year minimum hedg
Slide 42: Inflation and interest rate risks
Inflation and interest rate risks 2022-2031 revenue from assets in operation, under construction, and awarded before debt, % 100 ~55 ~35 ~20 ~10 ~35 Total revenue Inflation-indexed Merchant Fixed nominal cash Fixed nominal cash Duration-matched Derivatives1 Net inflation risk flows from assets flows
Slide 43: Investor Relations contacts
Allan Bødskov Andersen Rasmus Hærvig Head of Investor Relations Senior Manager alban@orsted.com rakol@orsted.com Alex Morgan Sabine Lohse Henriette Stenderup Lead Investor Relations Officer Senior Investor Relations Officer IR Coordinator alxmo@orsted.com sablo@orsted.com hnste@orsted.com