Origin Energy Limited · ASX:ORG
Origin Energy — Non-Deal Roadshow (November 2013)
39 slides from Origin Energy's roadshow presentation, Nov 5, 2013
Slide 1: ASX announcement cover fax
For personal use only To Company Announcements Office Facsimile 1300 135 638 Company ASX Limited Date 5 November 2013 From Helen Hardy Pages 39 Subject Origin Energy Asia Roadshow Please find attached a release on the above subject. Regards Helen Hardy Company Secretary 02 8345 5023 – helen.hardy@or
Slide 2: Origin Energy Asia Roadshow
For personal use only Origin Energy Asia Roadshow Grant King, Managing Director Karen Moses, Executive Director, Finance and Strategy November 2013
Slide 3: Important Notice
Important Notice The information and opinions contained in this presentation are intended solely for your personal reference and are strictly confidential. This presentation may not be used or relied upon by any other party, or for any other purpose, and may not be reproduced, disseminated or quoted
Slide 4: Important Notice
Important Notice Statements about past performance are not necessarily indicative of future performance. Except as required by applicable law or the ASX Listing Rules, the Relevant Persons disclaim any obligation or undertaking to update any forward looking statements, whether as a result of new inf
Slide 5: Origin is Australia's leading integrated energy company
Origin is Australia’s leading integrated energy company For personal use only The largest1 integrated energy business in Australia and NZ At a glance: Large and diverse fuel portfolio Listed in S&P/ASX 20 index with a market capitalisation Largest and most flexible generation portfolio of A$16
Slide 6: Historically, Origin invested in growing its integrated energy markets business
Historically, Origin invested in growing its integrated energy markets business Integrated energy business For personal use only EXPLORATION & CONTACT ENERGY ENERGY MARKETS LNG PRODUCTION (NEW ZEALAND) Australia’s largest1 energy Gas and oil exploration 53.1% shareholding in New 37.5% shareholding i
Slide 7: Origin is focusing on four key priorities
Origin is focusing on four key priorities Improving the Performance of the Existing Businesses For personal use only Removal of controls on retail pricing reduces risk and improves earnings potential Stabilising competitive environment reduces churn and improves longer term outlook for margin
Slide 8: Improving trends in Energy Markets, but FY2013 discounts delay earnings recovery
Whilst there are many improving trends in Energy Markets, the lagged effect of FY2013 discounts will delay earnings recovery in FY2014 … For personal use only Improving Industry APLNG and GLNG operational Full production begins LNG start up performance of from APLNG production Deregulation in QLD ex
Slide 9: Improving the performance of the existing businesses
For personal use only Improving the performance of the existing businesses
Slide 10: Origin's Energy Markets business is Australia's leading integrated provider of energy products
Origin’s Energy Markets business is Australia’s leading1 integrated provider of energy products For personal use only Fuel Generator Retailer Large and diverse fuel Australia’s largest Australia’s leading energy portfolio generation portfolio retailer • Strong domestic gas supply • 6,010 MW • 2,952,
Slide 11: The Australian retail energy market is moving towards full price deregulation
The Australian retail energy market is moving towards full price deregulation For personal use only • Victoria and South Australia retail prices are deregulated • In NSW and Queensland, tariffs are regulated so there is effectively a cap on the price that retailers can charge • In June 2013, the Que
Slide 12: Increased customer acquisition and retention reduced Origin customer churn
Increased customer acquisition and retention activity contributed to reduced Origin customer churn relative to market For personal use only • Increased competition following the acquisition of the NSW energy retail businesses at a time when Origin’s marketing capacity was constrained resulted in red
Slide 13: Significant investment in improved retail capability is nearing completion
Significant investment in improved retail capability is nearing completion For personal use only The new SAP billing and customer management system has provided new capabilities in channel management and products and services to customers including online self-serve and e-billing capability Origin c
Slide 14: Completion of investments in Upstream assets improves reliability and capacity
Completion of investments in Upstream assets improves reliability and increases production capacity … For personal use only 140 200 Additional 120 volumes that can be sold into 100 150 1 the gas market Maximum Production Max Production Potential Potential 80 if none used in TJe/d FY2013 Production e
Slide 15: Low historical priced gas position enables Origin to benefit from rising gas prices
Scale and diversity of Origin’s low historical priced gas position enables Origin to benefit from rising gas prices … For personal use only Origin Sources of East Coast Gas1 Australian domestic gas prices are moving 10.00 towards export parity 8.00 PJ 6.00 $/GJ 3,500 4.00 3,000 3rd party 2.00 contra
Slide 16: Progressing existing development opportunities for medium term growth
Progressing existing development opportunities to provide medium term growth following completion of APLNG … For personal use only Existing development opportunities Origin continues to prepare existing gas and renewable energy development opportunities for FID to be taken in the medium term: • Gas
Slide 17: Contact expects to benefit from resolution of two issues
Contact expects to benefit from resolution of two issues that have previously impacted earnings For personal use only • In 2007, the North and South Islands of New Zealand were disconnected due to a transmission failure increasing earnings sensitivity to hydro events in the South Island and limiting
Slide 18: Delivering the APLNG project
For personal use only Delivering the APLNG project
Slide 19: APLNG is a strong and aligned incorporated joint venture
APLNG is a strong and aligned incorporated joint venture, combining Origin’s Australian CSG experience with ConocoPhillips’ extensive LNG and CSG capabilities … For personal use only • Australia’s largest integrated • Global independent exploration and • Integrated energy and chemical energy company
Slide 20: APLNG's industry leading Proved and Probable reserves base
APLNG’s industry leading Proved and Probable reserves base includes prime acreage in both known and industry accepted “sweet spots” in Queensland … For personal use only PJ 20,000 15,000 10,000 5,000 - Estimated Requirements 1 3P 2P APLNG tenure in the Surat and Bowen basins at 30 June 2012 Ramp and
Slide 21: APLNG is on track to deliver first LNG by mid-2015
APLNG is on track to deliver first LNG by mid-2015, creating a step change in Origin’s earnings and cash flows For personal use only Milestones Timing (FY) Origin and ConocoPhillips form APLNG incorporated JV Q2 2009 Environmental approvals Q3 2011 Sinopec – 4.3 mtpa foundation customer Q4 201
Slide 22: Upstream Project progress - 50% complete and on track
Upstream Project progress - 50%1 complete and on track For personal use only FY2014 Upstream Operated Goals Actual Progress to 30 September Plan First gas and water production from Q1 Accomplished Condabri Central (eastern area) 500 wells drilled Q2 On Track: 448 wells drilled 295 diameter-kilometre
Slide 23: Downstream Project progress - 54% complete and on track
Downstream Project progress - 54%1 complete and on track For personal use only FY2014 Downstream Operated Goals Actual Progress to 30 September 2013 Plan Final Train 1 refrigeration compressor set Q1 Accomplished Accommodation camp complete Q1 Accomplished Complete Train 2 compressor table tops Q2 A
Slide 24: APLNG capital expenditure for the year was $7.8 billion
APLNG capital expenditure for the year was $7.8 billion, with Origin’s cash contribution $561 million For personal use only Cumulative Estimate from FID1 to Year to 30 (A$m) from FID1 to 1st sales from Train 2 June 2013 June 2013 (A$b) Project Capex 7,8431 12,497 24.75 Non-Project Capex: Annual spen
Slide 25: APLNG's revenue underpinned by long term take-or-pay contracts and Asian demand
APLNG’s revenue is underpinned by long term take-or-pay contracts with investment grade counterparties and robust Asian demand For personal use only Evolution of Asia Pacific LNG Demand 1 350 • APLNG’s revenue is underpinned by 20 year executed take-or- pay contracts with Sinopec (China) (Moody’s/S&
Slide 26: Managing the funding of Origin's investment in APLNG
For personal use only Managing the funding of Origin’s investment in APLNG
Slide 27: Committed undrawn debt facilities and cash provide sufficient liquidity
Committed undrawn debt facilities and cash, combined with cash flows from operations, provide sufficient liquidity for Origin to fund its investment in APLNG For personal use only 3,500 3,000 2,500 Free cash flow from existing $4.1 billion2 $ million 2,000 business funding 1,500 requirement for Orig
Slide 28: Origin entered into a new $7.4 billion bank loan facility
Origin entered into a new $7.4 billion bank loan facility to refinance all existing unsecured bank debt on new terms and pricing and extend its debt maturity profile For personal use only y p 4,500 Loan & Bank Guarantees - Undrawn 4,000 Recent financing activity: 3,500 Loans & Bank Guarantees - Draw
Slide 29: Creating growth opportunities for the future
For personal use only Creating growth opportunities for the future
Slide 30: Improving trends in Energy Markets, but FY2013 discounts delay earnings recovery
Whilst there are many improving trends in Energy Markets, the lagged effect of FY2013 discounts will delay earnings recovery in FY2014 … For personal use only Improving Industry APLNG and GLNG operational Full production begins LNG start up performance of from APLNG production Deregulation in QLD ex
Slide 31: Appendices
For personal use only Appendices
Slide 32: 2013 Financial Highlights
2013 Financial Highlights For personal use only ($ million) June 13 June 12 Change Statutory Profit 378 980 (61%) Statutory EPS 34.6 cps 90.6 cps (62%) Revenue 14,619 12,935 13% Underlying EBITDA* 2,181 2,257 (3%) Underlying EBIT* 1,438 1,598 (10%) Underlying Profit 760 893 (15%) Underlying EPS 69.5
Slide 33: Statutory Profit down 61%, from $980 million to $378 million
Statutory Profit down 61%, from $980 million to $378 million 1,200 For personal use only 1,000 193 980 (87) 893 800 (76) (11) $ million (84) 760 (382) (38) 76 600 400 378 200 - FY2012 Net Items FY2012 Underlying Underlying Underlying Underlying Underlying FY2013 Net items FY2013 Statutory excluded U
Slide 34: Underlying EBITDA down 3% to $2,181 million
Underlying EBITDA down 3% to $2,181 million Underlying EBIT down 10% to $1,438 million Underlying EBITDA Underlying EBIT For personal use only ($ million) Jun 13 Jun 12 change Jun 13 Jun 12 change Energy Markets 1,333 1,562 (15%) 1,038 1,317 (21%) Exploration & Production 395 3221 23% 162 105 54% LN
Slide 35: Reconciliation of Statutory Profit to Underlying Profit
Reconciliation of Statutory Profit to Underlying Profit For personal use only ($ million) Jun 13 Jun 12 Change Statutory Profit 378 980 (602) Unfavourable foreign exchange movement Items Excluded from Underlying Profit (-$187m), higher APLNG related items 96 452 (356) financing costs not able to be
Slide 36: Glossary
For personal use only Glossary
Slide 37: Statutory Financial Measures
Statutory Financial Measures Term Meaning For personal use only Net Debt Total current and non-current interest bearing liabilities only less cash and cash equivalents. Economic interest in a controlled entity of the Consolidated Entity that is not held by the Non-controlling interest Parent entity
Slide 38: Non-Financial Terms
Non-Financial Terms For personal use only Term Meaning The sum of Proved plus Probable Reserves. Probable Reserves are those reserves which analysis of geological and engineering data indicate are less likely to be recovered than Proved Reserves but more certain than 2P reserves Possible Reserves. I
Slide 39: Thank you
For personal use only Thank you For more information Chau Le Group Manager, Investor Relations Email: chau.le@originenergy.com.au Office: +61 2 9375 5816 Mobile: + 61 417 799 642 www.originenergy.com.au 38 |