Orsted · OMXCOP:ORSTED
Orsted — Ørsted — Investor Day (June 2023)
127 slides from Orsted's investor day presentation, Jun 8, 2023
Slide 1: Capital Markets Day 2023
Capital Markets Day 2023 8 June, 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: Ørsted organisation & Group Executive Team
Ørsted organisation & Group Executive Team Mads Nipper Daniel Lerup Rasmus Errboe David Hardy Olivia Breese Richard Hunter Group President & CEO EVP & CFO EVP & CEO Europe EVP & CEO Americas SVP & CEO P2X EVP & COO 2021-now: Ørsted, Group 2022-now: Ørsted, Group 2022-now: Ørsted, EVP & 2022-now: Ørs
Slide 4: Ørsted organisation & Group Executive Team
Ørsted organisation & Group Executive Team Henriette Fenger Ellekrog Per Mejnert Kristensen Ingrid Reumert Neil O’Donovan Anders Zoëga EVP & CHRO SVP & President APAC SVP & Head of GSR EVP & Head of SPP SVP & Head of Legal 2019-now: Ørsted, EVP & 2022-now: Ørsted, SVP & 2022-now: Ørsted, SVP & 2022-
Slide 5: Other presenters
Other presenters Virginie Van de Cotte Varun Sivaram, Ph.D. Rasmus Keglberg Hærvig SVP & CPO SVP, Strategy & Innovation Head of Investor Relations 2022-now: Ørsted, SVP & 2023-now: Ørsted, SVP & 2022-now: Ørsted, Head of Chief Procurement Officer Head of Strategy & Investor Relations Innovation 2021
Slide 6: Agenda
Agenda Section Page Strategic update – Mads Nipper 7 Sustainability – Ingrid Reumert 28 Region Europe – Rasmus Errboe 29 Region Americas – David Hardy 44 Region APAC – Per Mejnert Kristensen 58 Power-to-X – Olivia Breese 61 EPCO – Richard Hunter & Virginie Van de Cotte 72 Innovation – Varun Sivaram
Slide 7: Strategic update
Strategic update Mads Nipper Chief Executive Officer Click to add source or notes 7
Slide 8: A clean energy transition is increasingly urgent
A clean energy transition is increasingly urgent 2.7 °C 74 % 10 % 50-75 % USD 44 tn is the average of annual global of all species will of the global of economic global greenhouse gas face a very high risk population is at value generation temperature emissions are of extinction if risk of exposure
Slide 9: Let's create a world that runs entirely on green energy
Our vision is more relevant than ever Let’s create a world that runs entirely on green energy 9
Slide 10: Profound shifts in the energy landscape present opportunities for Ørsted
Profound shifts in the energy landscape present opportunities for Ørsted Energy Regulatory Increasing New sources System Nature trilemma tailwind LCOE levels of demand integration positive Rising Unprecedented Rising LCOE New sources of Rising Extent of geopolitical political levels for the demand f
Slide 11: Rapidly growing addressable market for Ørsted
Rapidly growing addressable market for Ørsted Offshore wind Onshore renewables Power-to-X (P2X) Installed capacity (excl. China), GW Installed capacity (excl. China), GW Electrolyser capacity, GW4 2030 market forecast at CMD 2021 2030 market forecast at CMD 2021 ~205 vs. ~170 ~3,840 vs. ~1,940 ~260
Slide 12: We have delivered strong results since the last CMD
We have delivered strong results since the last CMD, strengthening our unique position Achievements Unique position CMD 2021 guidance status 7.6 GW awarded offshore capacity, No. 1 in offshore installed capacity On track to reach ~50 GW world-leading across regions renewable capacity by 2030 1.3 GW
Slide 13: We are clearly delivering value across our portfolio
We are clearly delivering value across our portfolio Status of our value creation across each stage of our asset portfolio Installed Assets under Awarded Pipeline capacity construction projects 15.5 GW 4.9 GW 10.6 GW ~114 GW2 Across technologies Across technologies Across technologies Across technol
Slide 14: Leveraging capabilities to enhance the value of our awarded portfolio
We are leveraging all of our industry-leading capabilities to enhance the value of our awarded portfolio Our approach to developing our awarded projects 1 2 3 4 5 Work intensely Continue Pursue revenue Reconfigure Exit projects if with the supply dialogues with optimisation projects with value creat
Slide 15: Unparalleled capabilities to drive continued industry leadership
Unparalleled capabilities to drive continued industry leadership Commercial EPCO Stakeholders Peerless Disciplined Flexible and Positioned as Deep technical Long-standing Strong development bidding proven preferred experience supplier stakeholder capabilities financing decarboni- and superior approa
Slide 16: Our regional structure optimises our ability to deliver targeted solutions
Our regional structure optimises our ability to deliver targeted solutions to meet regional decarbonisation demands Our integrated regional structure Benefits from our organisational setup Europe Allows regional business units to tailor their growth strategies across technologies to region-specific
Slide 17: Maintain global offshore leadership
Maintain global offshore leadership Our growth platform Offshore wind – strategic principles Europe Americas APAC Maintain global offshore leadership across Europe, Americas, and APAC Bid selectively and deselect opportunities where value is not sufficient, as demonstrated by deselecting auctions in
Slide 18: A significant onshore renewable developer in the US and Europe
A significant onshore renewable developer in the US and Europe Our growth platform Onshore – strategic principles Europe Americas APAC Target high-growth onshore markets in the US and Europe to tap into the massive growth opportunities Leverage deep regional market expertise and capabilities across
Slide 19: Market-shaper in P2X in Europe and the US
Market-shaper in P2X in Europe and the US Our growth platform P2X – strategic principles Europe Americas APAC Shape the P2X market and position ourselves to take advantage of demand at scale later in the decade Focus on production hubs in Europe and the US to become a significant regional player Del
Slide 20: Fully self-funded plan to maintain 2030 ambition of ~50 GW
Fully self-funded plan to maintain 2030 ambition of ~50 GW of installed renewable capacity Installed renewable capacity by 2030 Our pipeline Gross capacity, GW Gross capacity, GW ~19 ~50 ~114 ~114 ~2 ~2 GW Bioenergy P2X ~4 ~5 APAC >2 GW Power-to-X ~11 ~17.5 GW Onshore Onshore ~34 ~31 Americas 10.6 3
Slide 21: We will invest DKK ~475 billion through 2030
We will invest DKK ~475 billion through 2030 in one of the largest investment programmes in the industry Capital allocation towards 2030 Regional split Gross investments, 2023-2030, DKKbn Gross investments, 2023-2030, DKKbn ~475 ~475 ~25 ~5 % ~5 % P2X & Bioenergy 10-15 % APAC ~115 ~25 % 35-40 % Amer
Slide 22: We remain committed to an industry-leading return requirement
We remain committed to an industry-leading return requirement Targeted range for spread to WACC across all technologies Our capital allocation bps1 approach Commit firmly to capital discipline Absolute IRR increasing 150-300 Achieve higher absolute IRRs due to our ability to 150-300 ensure higher PP
Slide 23: We will deliver higher operating earnings and returns
We will deliver higher operating earnings and returns Group EBITDA (excl. new partnerships) Return on capital employed (ROCE) 2023-2030, DKKbn Average 2023-2030 X % CAGR 13-14 % ~14 % 50-55 11-12 % 21.5 2023¹ 2030 2020-2027 2023-2030 CMD 2021 CMD 2023 guidance guidance 23 Notes: 1. Midpoint of guida
Slide 24: Industry-leading sustainability ambitions
We have industry-leading sustainability ambitions and take action Science-aligned climate action 2025 98 % reduction in emissions intensity1 2040 Net-zero value chain2 Green energy that revives nature 2030 No later than 2030, all new renewable energy projects commissioned must have net-positive biod
Slide 25: First energy company in the world to issue a blue bond
We are the first energy company in the world to issue a blue bond Highlights On World Oceans Day, we are catalysing investment We need to increase financing to into the sustainable blue economy the sustainable ocean economy. Blue bonds, such as Ørsted's, by Taking action with a 5-year, EUR 100 milli
Slide 26: World's leading talent platform in renewable energy
We aspire to become the world’s leading talent platform in renewable energy Selected people initiatives Low turnover rate Voluntary turnover1, 2018-2023, % Global graduate programme to target emerging talent from across the world (4,200 applications received in 2023, 50% higher than 2022) ~9 % Talen
Slide 27: Becoming the world's leading green energy major
Becoming the world’s leading green energy major Our strategy Be selective in the Maintain global Establish a Leverage our Deliver significant massively growing leadership in significant regional unrivalled global growth in operating market, and offshore wind growth platform in pipeline of ~114 GW ea
Slide 28: Sustainability
Sustainability Ingrid Reumert SVP & Head of Global Stakeholder Relations Click to add source or notes 28
Slide 29: Region Europe
Region Europe Rasmus Errboe EVP & CEO of Region Europe 29
Slide 30: Major green power producer and undisputed regional offshore leader
We are a major green power producer, and we compete from a position of strength as the undisputed regional offshore leader Ørsted footprint1 Unique positioning in Europe Offshore wind Onshore wind 27 operational offshore farms Onshore solar PV Storage 1,500+ spinning offshore wind Bioenergy CHPs2 tu
Slide 31: Delivered on major milestones and industry firsts
Since our last Capital Markets Day, we have delivered on major milestones and industry firsts Key achievements in Region Europe in the last 24 months • 1.3 GW entered construction phase across offshore and onshore • COD of world’s largest offshore wind farm (1.3 GW Hornsea 2) • Awarded 5.6 GW of new
Slide 32: Four key strategic priorities in Region Europe
We will deliver on four key strategic priorities in the coming 12-24 months in Region Europe Key strategic priorities in Region Europe 1 2 3 4 Deliver on our 5.6 GW Win 4-6 GW new Leverage onshore Lead the structural awarded portfolio, offshore capacity platform to deliver shift towards e.g. Hornsea
Slide 33: We continue to progress Hornsea 3 and expect FID in 2023
We continue to progress Hornsea 3 and expect to take FID in 2023 Project details: Hornsea 3 Value creation Our target is to progress Hornsea 3 towards the guided range over time through levers and continued project maturation 2.8 GW World’s future largest offshore wind farm Our actions Working with
Slide 34: Baltica 2 and 3 projects showcase development capabilities
Our Baltica 2 and 3 projects showcase our leading project development capabilities and relentless focus on value creation Our actions Project details: Baltica 2 and 3 Key driver behind fundamental post-award changes to Polish CfD scheme 2.8 GW1 Poland’s largest offshore wind farms Baltica 2 We are s
Slide 35: Brink of a new era with massive offshore wind growth
We are standing at the brink of a new era with massive offshore wind growth projections across all our European markets Offshore wind growth Regulatory tailwind stronger than ever Installed offshore wind capacity in Europe, GW Policies & legislation Renewables support EU Fit for 55 and Green EU ince
Slide 36: Five core offshore wind markets
We focus our bottom-fixed offshore wind growth in five core markets, with portfolio optionality from adjacent new markets Our strategic markets Market selection criteria Attractive market outlook and sizeable pipeline of capacity Political stability and transparency of regulatory frameworks Market-s
Slide 37: Industry-leading pipeline enables focus on most value-creating GWs
Industry-leading pipeline enables focus on winning the most value- creating offshore wind GWs Auction speed will accelerate in coming years How we will win Expected average annual offshore bottom-fixed capacity tendered in Europe1, 2015-2024, GW Development capabilities Ørsted would only need to win
Slide 38: Building a strong floating pipeline
We are building a strong floating pipeline that facilitates staged capability building, portfolio optionality, and post-2030 growth Current floating presence Strategic approach to floating Leverage offshore track record and capabilities to Norway, UK, and Iberia as focus markets mature floating tech
Slide 39: Aiming for 19-21 GW installed offshore capacity in 2030
We are aiming to reach 19-21 GW installed offshore capacity in 2030, leveraging our unparalleled pipeline of ~67 GW Ørsted offshore wind pipeline Substantiated and opportunity offshore pipeline in Europe1 Gross capacity, GW Gross capacity, GW Bottom fixed Floating wind Core markets New markets 19-21
Slide 40: Proven onshore wind and solar PV development capability
We now have a proven onshore wind and solar PV development capability, providing a platform for growth across five markets Our onshore portfolio in Europe Onshore highlights Ørsted’s onshore presence Brookfield and Ostwind acquisitions successfully integrated and partnership established in Spain 175
Slide 41: Aim to reach ~4 GW onshore capacity in Europe by 2030
We aim to reach ~4 GW onshore capacity in Europe by 2030 with attractive value creation Capacity additions towards 2030 Our value creation proposition Gross capacity, GW ~8 Pipeline increased to ~9 GW, giving us the flexibility to select the projects with the most attractive returns Strong ground ga
Slide 42: Leading the structural shift to corporate demand
We are set up to lead the structural shift to corporate demand at scale and to deliver on our partners’ decarbonisation needs Energy demand in the future We focus on three sectors How we work with strategic corporate partners Customer demand is shifting towards Global tech PPAs green, abundant, and
Slide 43: We aim to reach 26-28 GW in Europe by 2030
We aim to reach 26-28 GW in Europe by 2030 Key highlights 2030 ambitions • We are a major green power producer, and we compete from a position of Offshore 19-21 GW strength as the undisputed regional offshore wind leader • We will deliver on our 5.6 GW awarded offshore wind portfolio, leveraging our
Slide 44: Region Americas
Region Americas David Hardy EVP and CEO, Region Americas Click to add source or notes 44
Slide 45: Prominent renewable energy developer in the US market
We are a prominent renewable energy developer in the US market, strongly positioned to scale Strong and balanced growth platform across technologies Ørsted footprint Ørsted assets1 Only pure-play renewable Offshore wind developer in the US with installed Onshore wind capacity in onshore wind, solar
Slide 46: Delivered on major milestones and industry firsts
Since our last CMD, we have delivered on major milestones and industry firsts Key achievements in Region Americas in the last 24 months • 0.1 GW South Fork Wind offshore wind project progressed to construction phase • 3 offshore wind projects matured towards near-term FID • 2 GW of offshore wind awa
Slide 47: Massive growth expected towards 2030 propelled by the IRA
Massive growth expected towards 2030 propelled by the IRA Key highlights of the Inflation Reduction Act (IRA) Renewable growth 2022-2030 2030 market forecast at CMD ‘21 Installed capacity in the US, GW USD 0.4-1.2 trillion¹ Offshore wind Onshore renewables Investment in climate and clean energy poli
Slide 48: Four key strategic priorities in Region Americas
We will deliver on four key strategic priorities in the coming 12-24 months in Region Americas Key strategic priorities in Region Americas 1 2 3 4 Maximise value of Prepare for future Grow onshore platform Shape favourable existing portfolio of offshore wind growth as to leverage the IRA, business e
Slide 49: Aim for 3-5 GW installed offshore wind capacity by 2030
We aim to reach 3-5 GW installed offshore wind capacity by 2030, focusing on the most attractive markets Market-leading offshore wind portfolio in our Our rationale for focusing on Northeast and Mid- priority Northeast and Mid-Atlantic markets Atlantic markets Gross capacity, GW High electricity dem
Slide 50: Establishing a market-leading offshore wind portfolio
We are establishing a market-leading offshore wind portfolio Strengths of our offshore portfolio Awarded offshore wind portfolio Project State Capacity COD • Seabed leases secured below regional average price (60 % below average cost per MW)1 Revolution Wind RI 0.7 GW 2025 • Very attractive leases w
Slide 51: Value creation for near-term awarded US offshore projects
We have confidence that we can create value on a forward- looking basis for near-term awarded US offshore projects Current view Opportunities and risks Offshore near-term awarded portfolio Near-term awarded portfolio1 is Opportunities value-neutral from life cycle • Additional tax credits perspectiv
Slide 52: First-mover advantage will de-risk future offshore projects
Our first-mover advantage will de-risk future offshore projects Largest Unique Market- Early Exclusivity Preferential pipeline of learnings as leading investments in rights to critical rights and supply seabed secured the sole US corporate local content, port and chain capacity for at favourable ope
Slide 53: US offshore wind market conditions improving
We see US offshore wind market conditions improving Market conditions for offshore wind are improving We are positioning for future growth with the acquisition of Eversource’s stake in Lease Area 500 Strong Democratic support for offshore wind and Purchase of Eversource’s 50 % interest in Lease Area
Slide 54: On track to deliver ~13.5 GW onshore capacity in 2030
We are on track to deliver ~13.5 GW onshore capacity in 2030 Ørsted’s build-out plan towards 2030 Our value creation proposition Gross capacity, GW ~16 Leading onshore developer with strong execution record, as #6 in capacity additions over the last two 7-8 ~13.5 years in the US1 Strategically focus
Slide 55: Track record of execution and value creation in onshore
We have a track record of execution and value creation in onshore Strong onshore platform acquired in 2018 Selected recent onshore projects Lincoln Clean Energy Sunflower Wind Eleven Mile Under construction Under construction 3.3 GW capacity added since 2018, ~2 GW since last Capital Markets Day 214
Slide 56: Integrated setup strengthens market-shaping capabilities
Our integrated setup further strengthens our leading market- shaping capabilities with policymakers, regulators & stakeholders Our expanded offering across three technologies Our strengths in stakeholder engagement Offshore Unparalleled ‘trusted advisor’ status in Washington with Administration and
Slide 57: We aim to reach 17-19 GW in Americas by 2030
We aim to reach 17-19 GW in Americas by 2030 Key highlights 2030 ambitions • We are the only pure-play renewable developer in the US with Offshore 3-5 GW installed capacity across onshore wind, solar PV, storage, and offshore wind, strongly positioned to scale and engage with key stakeholders • We w
Slide 58: Region APAC
Region APAC Per Mejnert Kristensen SVP & President APAC Click to add source or notes 58
Slide 59: Significant ambitions for offshore wind in APAC
Significant ambitions for offshore wind in APAC Market outlook for selected APAC markets Offshore wind forecasted build-out Installed offshore wind, APAC (excl. China), GW Japan 10 GW government offshore wind target by 2030 and 30-45 GW by 2040 South Korea 12 GW government offshore wind ~60 target b
Slide 60: We aim to deliver 3-5 GW offshore capacity by 2030
We aim to deliver 3-5 GW offshore capacity by 2030 APAC offshore wind developer portfolios Ørsted APAC offshore build-out towards 2030 Gross capacity (excl. China), GW1 Gross capacity, GW Awarded Under construction Installed ~5 3-5 1.9 1.7 1.52 1.4 1.8 1.9 1.4 0.9 Competitors 0.6 0.045 0.4 Installed
Slide 61: Power-to-X
Power-to-X Olivia Breese SVP & CEO Power-to-X Click to add source or notes 61
Slide 62: To reach net-zero, the world requires Power-to-X solutions
To reach net-zero, the world requires Power-to-X solutions Many sectors can be decarbonised with green electricity, but Power to X Renewable energy generation powers the production of renewable hydrogen and e-fuels ~30 % E-fuels of global emissions Direct come from hard-to- hydrogen E-methanol E-amm
Slide 63: Exponential P2X growth outlook with clear market signals
Exponential P2X growth outlook with clear market signals Exponential demand growth for global renewable H2 Promising signals for tangible market growth Renewable hydrogen demand mtpa H2 equivalent1 North America Strong regulatory signals Europe Demand and supply side support, delivered by the US & E
Slide 64: P2X creates value through standalone and integrated projects
P2X creates value for Ørsted through both standalone and integrated projects 1 2 3 4 New customer verticals Expand Ørsted’s Maximise value via Enable large-scale offer growth opportunity decarbonisation offering system integration renewables build-out Provides access to new Enables provision of Pres
Slide 65: Catalyse the decarbonisation of hard-to-electrify sectors
Our P2X ambition Catalyse the decarbonisation of hard-to-electrify sectors Leveraging Ørsted’s pioneering DNA to grow a scalable P2X platform in Europe and North America by 2030 >2 GW ambition ~4 GW pipeline Value-accretive growth Deliver >2 GW gross electrolyser Develop ~4 GW pipeline across Ensure
Slide 66: Right experience and capabilities to scale P2X
We have the right experience and capabilities to scale P2X Leader in +20 years of Building Global experience Experienced team optimising power expertise in scaling capabilities in in executing JVs, with deep generation emerging adjacent partnerships, and technical technologies technologies offtake c
Slide 67: Balancing core capabilities with supply chain partnerships
Balancing building core capabilities with supply chain partnerships Ørsted’s focus throughout the P2X value chain Core capabilities in-house Building capabilities Equity partner/supply chain Hydrogen Renewables Electrolysis Storage Transport Customer offtake Operations E-fuels Biogenic Renewables El
Slide 68: Targeting development of production hubs in key markets
Targeting development of production hubs in key markets P2X production hub development in Europe and North America Our prioritisation Targeting four key production hubs across selected markets SE MISO SPP DK Products ERCOT Hydrogen and e-methanol NL Offtake sectors Maritime, steel, and chemicals Pri
Slide 69: Phased demand-led approach to managing project risk
Managing project risk by utilising a phased demand-led approach Received funding3 Demonstrate Scale Expand Lead Pilot project to proof of concept Small-scale project to serve early Medium-scale projects to Demand-led production hub to customers and build expertise establish market presence service o
Slide 70: FlagshipONE
FlagshipONE First-mover advantage One of the world’s first commercial scale e-methanol projects Location Örnsköldsvik, Northern Sweden Project execution capabilities Ørsted is acting as an end-to-end project manager with experienced suppliers, such as Product Siemens Energy, Topsoe, and Carbon Clean
Slide 71: Market-shaper and significant player in Europe & US
We will be a market-shaper and significant player in Europe & US Deliver >2 GW gross Position for market Grow hubs to GW Ensure disciplined electrolysis capacity take-off by scale through a capital allocation by 2030 targeting selected phased demand-led and long-term value strategic markets approach
Slide 72: EPCO
EPCO Richard Hunter and Virginie Van de Cotte EVP, Chief Operating Officer SVP, Chief Procurement Officer Click to add source or notes 72
Slide 73: Leading offshore wind farm constructor and operator
We are the leading offshore wind farm constructor and operator +30 33 8.9 28 years of offshore offshore wind GW capacity offshore wind wind experience farms constructed installed farms in operation across Europe, APAC, and the US 73
Slide 74: Global integrated EPCO model creates value across asset life cycle
Our global integrated EPCO model enables us to create more value across the asset life cycle Integrated EPCO organisation Engineering Procurement Construction Operations Deep in-house design Industry-leading supplier Best-in-class project delivery Industry-leading competences and proposition to secu
Slide 75: Increased complexity of wind farms within future energy systems
Increased complexity of wind farms within future energy systems Future energy systems Enhanced requirements Past offshore Current offshore Future energy wind farm design wind farm design system Large renewable assets and transmission systems becoming increasingly complex Rapidly increasing requireme
Slide 76: Unparalleled in-house project design capabilities
We have unparalleled in-house project design capabilities Project design track record Ground risk Foundations Transmissions Yield accuracy assessment -50 % -15 % 10 % >99.5 % Saving in ground Weight saving in Increase in Accuracy in yield investigations from Hornsea 2 foundations transmission capaci
Slide 77: Unique supplier value proposition
We offer a unique supplier value proposition Industry-leading scale Unrivalled experience Joint technology Sustainability and pipeline and track record development and commitment innovative collaboration 77
Slide 78: Long-term capacity secured through strategic alliances
Long-term capacity secured through strategic alliances Critical CAPEX components Capacity secured1 % of total build-out secured1 Wind turbines >10 GW until 2030 >50 % Steel >16 GW equivalent until 20302 >80 % Foundations >10 GW equivalent until 2030 >50 % Cables >4,000 km secured until 2030 >50 % He
Slide 79: Front runners in developing critical supply chains
Front runners in developing critical supply chains Unique technical capabilities Joint investments accelerating the Long-term agreements allowing and close collaboration supply chain build-out in the US suppliers to take investment decisions Cadeler collaboration Jones Act-compliant vessel Foundatio
Slide 80: Global supply chain leveraged to contract all CAPEX at FID
Global supply chain leveraged to contract all CAPEX at FID Our offshore wind farm CAPEX shares in %1 CAPEX flexibility and certainty Development projects Ensure access to capacity while maintaining competitiveness and flexibility Array Offshore Export Installation Mature projects WTG Foundation2 Oth
Slide 81: Catalysing sustainability in the supply chain
Catalysing sustainability in the supply chain Enabling accelerated sustainability build-out Our work with Dillinger towards low-carbon steel Long-term agreement enabling Dillinger to Net-zero greenhouse gas emissions target across our 0% whole value chain by 2040 accelerate investment decision for l
Slide 82: We deliver and execute despite challenging circumstances
We deliver and execute despite challenging circumstances Hornsea 2 Changhua 1 and 2a 1.3 GW installed 0.9 GW under construction Issues Issues COVID-19 lockdowns spiked during main construction season COVID-19 led to +1 year effective lockdown of installation with people in quarantine, while transpor
Slide 83: Track record of delivering projects on time, on budget
Unparalleled track record of delivering projects on time, on budget 2017 installed baseline (GW) 3.9 As scheduled Minor deviations X Deviates On time On budget1 Race Bank (2018) 0.5 Walney Extension (2018) 0.7 Borkum Riffgrund 2 (2018) 0.5 Installed Hornsea 1 (2019) 1.2 Formosa 1 (2019) 0.05 Borssel
Slide 84: Maximum output out of any given wind farm
We get the maximum output out of any given wind farm Operational performance improves after full take-over from OEMs Our capabilities Share of wind turbines self- Lost production factor, OPEX/MW, Analytics operated portfolio average 2020-2023, portfolio average 2020-2022, Unrivalled database, Indexe
Slide 85: We continue to reduce our operating costs
We continue to reduce our operating costs OPEX/MW has decreased steadily as wind turbine sizes have increased Development drivers Development in OPEX/MW by wind turbine size, 2-3 MW = index 1001, real 2023 numbers1 Fewer annual service hours required 100 45 % reduction in service hours per 90 MW, ma
Slide 86: Unrivalled experience and capabilities for complex energy systems
Unrivalled experience and capabilities to execute increasingly complex energy systems Our unique skillset to address current and future energy system demands Deep engineering Long-standing Best-in-class and Unique Comprehensive Global leader in competences supplier cost-effective operational underst
Slide 87: Innovation
Innovation Varun Sivaram SVP, Strategy & Innovation Click to add source or notes 87
Slide 88: Financial update
Financial update Daniel Lerup EVP & CFO Click to add source or notes 88
Slide 89: Strong financial development since CMD 2021
Strong financial development since CMD 2021 Follow up1 Time period CMD 2021 target Status Renewables capacity 2030 ~50 GW On track Average ROCE 2020-2027 11–12 % Outperforming EBITDA CAGR from offshore and 2020-2027 ~12 % CAGR Outperforming onshore assets in operation Gross investments 2020-2027 DKK
Slide 90: Significant upside to 2027 earnings
Significant upside to 2027 earnings EBITDA from offshore and onshore asset in operation by 2027 CMD 2021 follow-up DKKbn, % 2020-27 ~12 % ~15 % CAGR ~45 35-40 ~90 % of 2027 EBITDA already in operation, under construction, or awarded CMD 2021 Inflation IRA Higher Portfolio CMD 2023 indexation benefit
Slide 91: Higher gross investment level towards 2027
Higher gross investment level towards 2027 Gross investments CMD 2021 follow-up 2020-2027, DKKbn ~15 % increase ~1 GW less gross for the period installed capacity ~380 ~350 CMD 2021 Cost inflation Portfolio composition CMD 2023 91
Slide 92: Higher returns on capital employed towards 2027
Higher returns on capital employed towards 2027 Average return on capital employed (ROCE) CMD 2021 follow-up 2020-2027, % ~18 % ~15 % 11–12 % CMD 2021 Increased Lower capital CMD 2023 Adjusting for ROCE EBIT employed pre-COD CAPEX1 on operating assets 92 Notes: 1. This adjustment reflects all items
Slide 93: Strong value creation in Europe and APAC offshore projects
Strong value creation in Europe and APAC offshore projects and absolute IRR levels increasing across global portfolio Europe and APAC offshore portfolio¹ US offshore near-term awarded portfolio² Spread to Spread to WACC Spread to WACC WACC Risk-free rate WACC WACC WACC increase of >250 bps Current l
Slide 94: Committed to an industry-leading return target
We remain committed to an industry-leading return target Targeted range for spread to WACC WACC approach ensures bps1, illustrative robust and competitive risk- adjusted returns, including: Ørsted Like-for-like with competitors approach Technology risk Uplift from farm-downs Typically 150-300 Mercha
Slide 95: Investment programme for 2023-2030
Investment programme for new guidance horizon for 2023-2030 Gross and net investments 2023-20301, DKKbn ~475 ~475 ~5 % P2X & Bioenergy ~5 % P2X & Bioenergy 10-15 % APAC ~25 % Onshore ~325 35-40 % Americas ~70 % Offshore 40-50 % Europe Gross investment Gross investment Net investment2 Technology Geog
Slide 96: CAPEX certainty for significant share of portfolio
CAPEX certainty for significant share of portfolio Gross investments (Ørsted share, excl. partners’ CAPEX spend) Offshore Onshore P2X & Bioenergy 2023-2030, DKKbn ~475 ~25 ~5 % ~115 ~25 % ~335 ~70 ~90 % CAPEX contracted ~110 ~70 % ~115 ~40 Under Awarded CAPEX for pre- CAPEX for post- Offshore Onshor
Slide 97: Sources anchored in a stable cash flow profile
Sources are anchored in a stable cash flow profile Funding programme 2023-2030 Debt & hybrid Dividends ~15 % ~15 % Tax equity ~15 % Farm-downs ~30 % Gross investments ~85 % CFO ~40 % Sources Uses 97
Slide 98: Unrivalled farm-down track record
Unrivalled farm-down track record for over a decade Farm-down track record Farm-downs closed in 2022 Future farm-down approach Proceeds Proceeds Proceeds DKK ~200 bn DKK ~30 bn DKK ~20 bn per year between 2023 and 2030 ~100 % NPV retention >100 % NPV retention ~100 % NPV retention and efficient capi
Slide 99: Strong and transparent financial model enabling low cost of debt
Strong and transparent financial model enabling low cost of debt Centralised Sustainable Liquidity Multiple financing model financing management financing sources Competitive and Market-leading green Strong liquidity Senior and hybrid flexible balance sheet bond issuer with visible reserve, mainly b
Slide 100: Balanced bond portfolio with low refinancing risk
Balanced bond portfolio with low refinancing risk Average debt maturity of 9.3 years1 Highlights Senior bonds maturity profile, DKKbn Deep access to debt capital markets for long-dated issuances 34 11 Strong investor demand with ~3.6x oversubscription1 7 Average current cost of debt of 5 5 5 ~3.4 %
Slide 101: Dividend commitment extended to 2030
Dividend commitment extended to 2030 Dividend policy In-year dividend, DKKbn Current dividend horizon New dividend horizon High single-digit annual growth Mid single-digit annual growth ~8.3 ~6.5 4.4 2020 2025 2030 101 Notes: Dividend projection assume annual growth of 7 % to 2025 and 5% from 2026 t
Slide 102: Strong balance sheet to support business plan
Strong balance sheet to support business plan FFO/adjusted net debt projection based on business plan Our commitments 2022-2030, % 43 % Maintain investment grade rating of BBB+/Baa1 ~30 % ~ 25 % threshold Deliver on dividend policy No new equity raise needed to deliver on our business plan 2022 2023
Slide 103: Significant growth in Group earnings towards 2030
Significant growth in Group earnings towards 2030 Group EBITDA (excl. new partnerships) Details 2023-2030, DKKbn X % CAGR Group EBITDA definition slightly higher than site EBITDA 13-14 % 50-55 Earnings from P2X, Bioenergy & Other, and construction agreements mostly offset by ~75 % expensed DEVEX and
Slide 104: Attractive return on capital towards 2030
Attractive return on capital towards 2030 Average return on capital employed (ROCE) 2023-2030, % ~14 % 11-12 % CMD 2021 Higher EBIT Higher capital employed CMD 2023 (2020-2027) (2023-2030) 104
Slide 105: Key financial exposures are proactively managed
Key financial exposures are proactively managed Inflation-indexed revenue Fixed nominal revenue Merchant revenue 20 % 30 % 50 % • Prioritise inflation-indexed revenue • Debt used to de-risk fixed nominal • Corporate PPAs used to de-risk to protect against cost inflation and exposure from assets in o
Slide 106: Inflation-indexed revenue uplift outweighs CAPEX cost inflation
Inflation-indexed revenue uplift outweighs CAPEX cost inflation across portfolio Inflation-indexed assets compensated for cost Key highlights inflation through a higher strike price Increase in CAPEX from cost …offset by higher strike price higher forecasted revenue1 (+20 % increase) inflation… thro
Slide 107: Protecting fixed nominal cash flow assets against interest rates
Protecting assets with fixed nominal cash flow against interest rates via fixed-rate debt and derivatives Fixed-rate debt used to protect fixed nominal cash Pre-hedging of debt for awarded assets to increase flows against interest rate increases as they progress towards construction ~90 % matched ~2
Slide 108: Earnings profile optimised through contracted and regulated revenue
Earnings profile optimised through high degree of contracted & regulated revenue combined with new hedging framework High visibility on future earnings Key outcomes for new hedging framework for merchant risk ~80 % ~25 % reduced downside risk for offshore EBITDA Group regulated and long-term contrac
Slide 109: Summary of financial update
Summary of financial update ~50 GW 150-300 bps Proactive Increasing EBITDA Growing dividend renewable spread to WACC management of and ROCE to 2030 capacity by 2030 financial exposure towards 2030 Fully self-funded Commitment to High level of Annual Group Dividend growth plan for strict financial co
Slide 110: Wrap-up
Wrap-up Mads Nipper Chief Executive Officer 110
Slide 111: By 2030, Ørsted will be the world's leading green energy major
By 2030, Ørsted will be the world’s leading green energy major Key highlights • Leverage industry-leading global position and unrivalled development and execution capabilities to become one of the largest green electricity producers • Deploy a massive development pipeline through strict financial di
Slide 112: Appendix
112 —_ ze ES = - : Orsted
Slide 113: Disclosure summary
Disclosure summary Strategic ambition, financial targets, and policies Additional disclosure Ambition for installed renewable capacity by 2030 ~50 GW Total CAPEX spend, 2023-2030 DKK ~475 bn - Offshore ~28 GW - Offshore ~70 % - Onshore ~17.5 GW - Onshore ~25 % - P2X >2 GW - P2X & Bioenergy ~5 % - Bi
Slide 114: We are perfectly positioned to capture growth
We are perfectly positioned to capture growth Ørsted footprint1 Presence Capacity Ørsted Offshore wind P2X market presence Onshore renewables Bioenergy & Other Americas Europe Asia Pacific Ørsted capacity, GW Ørsted capacity, GW Ørsted capacity, GW ~70 ~2 ~8 ~17 18.5 ~14 2.1 ~1 10.7 ~1 0.8 0.1 ~8 ~6
Slide 115: Region Americas pipeline
Region Americas pipeline Substantiated pipeline Opportunity pipeline Technology Capacity (MW) Technology Capacity (MW) Offshore wind 4,700 Offshore wind - Onshore renewables 8,604 Onshore renewables 16,400 P2X 580 P2X 825 Total Americas 13,884 Total Americas 17,225 115
Slide 116: Region Europe pipeline
Region Europe pipeline Substantiated pipeline Opportunity pipeline Technology Capacity (MW) Technology Capacity (MW) Offshore wind 6,200 Offshore wind 60,665 Onshore renewables 1,461 Onshore renewables 7,550 P2X 362 P2X 2,208 Total Europe 8,023 Total Europe 70,423 116
Slide 117: Region APAC pipeline
Region APAC pipeline Substantiated pipeline Opportunity pipeline Technology Capacity (MW) Technology Capacity (MW) Offshore wind 2,408 Offshore wind 2,250 Total APAC 2,408 Total APAC 2,250 117
Slide 118: Debt issuances aim at optimal currency match with projected FFO
Debt issuances aim at optimal currency match with projected FFO Current and planned debt issuances towards 2035 Key elements of FX exposure management % EUR 10 % EUR 10-20 % Matching currency composition of net debt with FFO protects credit rating against FX moves GBP 50 % GBP 35-50 % FX exposure ha
Slide 119: Portfolio revenue uncertainty
Hedge approach suits the characteristics of our portfolio Lower hedge level & shorter time horizon. Hedge level Hedge level will depend on portfolio composition1 of merchant exposure between 0-70 % in Y1 & Y2 • Risk of overhedging and IFRS-9 ineffective hedges significantly • Leveraging portfolio di
Slide 120: Tax benefits for renewables in the US
Tax benefits for renewables in the US Renewable energy tax credits include a variety of indirect federal subsidies to finance investment and production of renewable energy in the US, including production tax credits (PTCs) and investment tax credits (ITCs). In addition to the tax credits, qualified
Slide 121: Tax equity at Ørsted
Tax equity at Ørsted Tax equity partnerships are a key driver of value for our US portfolio of wind and solar PV projects. Item/Element PTC ITC Eligibility of projects √ Mainly onshore wind farms: Comparably √ Mainly offshore wind farms and solar PV: low CAPEX Comparably high CAPEX and lower product
Slide 122: Production tax credit (PTC) – accounting treatment
Production tax credit (PTC) – accounting treatment Illustrative example Impact on accounts Y0 Y1 Y2 … Y11-12 Y13 → Comments Ørsted cash ownership 70 % 70 % 70 % 100 % 100 % 1 Revenue from years 1-12 reflects presence of long-term, fixed price Ørsted tax ownership 1% 1% 1% 100 % 100 % offtake arrange
Slide 123: Investment tax credit (ITC) – accounting treatment
Investment tax credit (ITC) – accounting treatment Illustrative example Impact on accounts Y0 Y1 Y2 … Y6-12 Y13 → Comments Ørsted cash ownership 70 % 70 % 70 % 100 % 100 % 1 Revenue from years 1-12 reflects presence of long-term, fixed price Ørsted tax ownership 1% 1% 1% 100 % 100 % offtake arrangem
Slide 124: Macroeconomic assumptions for 2023-2030
Macroeconomic assumptions for 2023-2030 Key macroeconomic assumptions for 2023-2030 • Forward power price curves applied until 2027; internal conservative estimates Power used for the period beyond Inflation • Decrease through 2024 and back to normalised levels in 2025 and onwards FX • Estimates rou
Slide 125: Glossary (I/II)
Glossary (I/II) Term Definition Interest-bearing debt + 50% of hybrid capital + cash and securities not available for distribution (excl. repo loans) +/- add-back of other interest- Adjusted net debt bearing debt and receivables Awarded capacity Offshore capacity that we have been awarded in auction
Slide 126: Glossary (II/II)
Glossary (II/II) Term Definition LCoE Levelised cost of energy calculates the present value of the total cost of building and operating a power plant over an assumed lifetime Local content The value that an asset project brings to the local, regional or national economy beyond the resource revenues
Slide 127: 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 Lead Investor Relations Officer Investor Relations Officer sablo@orsted.com vehan@orsted.com Christopher Glaf Stenhammer Finance Graduate