Slide 1: ASX announcement cover fax
To Company Announcements Office Facsimile 1300 135 638 Company ASX Limited Date 17 August 2023 From Helen Hardy Pages 63 Subject Presentation to Analysts and Financial Markets Please find attached a release on the above subject. For personal use only Authorised for lodgement by: Helen Hardy Company
Slide 2: 2023 Full Year Results
Origin Energy For personal use only 2023 Full Year Results Year ended 30 June 2023 Frank Calabria, CEO & Lawrie Tremaine, CFO 17 August 2023
Slide 3: Outline
Outline For personal use only 1. Introduction - Frank Calabria 2. Financial Review - Lawrie Tremaine 3. Operational Review - Frank Calabria 4. Outlook - Frank Calabria 2 17 August 2023 2023 Full Year Results Announcement
Slide 4: Introduction
For personal use only Introduction Frank Calabria, CEO
Slide 5: Strong earnings result and outlook
• Strong earnings result and outlook For personal use only − Recovery in FY2023 Energy Markets’ earnings following a period of under recovery of wholesale costs − Further growth expected in Energy Markets’ FY2024 earnings, with returns recovering to earn cost of capital − Step change earnings growth
Slide 6: Financial highlights
Financial highlights For personal use only Statutory Profit Underlying Profit Origin ROCE1 $1,055 $747 14.2% million million Up from $1,429 million Statutory Loss in Up from $407 million in FY2022 Energy Markets’ ROCE 6.7% FY2022 Integrated Gas ROCE 20.2% Adjusted Net Debt Adjusted Free Cash Flow Fi
Slide 7: Our ambition and strategy
Our ambition and strategy For personal use only Our ambition To lead the energy transition through cleaner energy and customer solutions Unrivalled customer Accelerate renewable Deliver reliable energy solutions and cleaner energy through the transition Our • Leading brand providing lowest cost • Ac
Slide 8: Executing on our strategy
Executing on our strategy For personal use only Achieved to date Ambition • Kraken migration complete, remaining savings delayed to FY2025 • $200 - $250 million cost savings (FY2025 vs FY2018) • Octopus now #2 UK energy retailer, 9.7 million customer accounts • Octopus 100 million licensed Kraken ac
Slide 9: Well placed to capture value from the energy transition
Well placed to capture value from the energy transition For personal use only ✓ Leading Retail business Advantaged ✓ Competitive gas supply, largest thermal peaking fleet portfolio ✓ High quality APLNG gas resource ✓ Simplified portfolio enabling focussed capital allocation ✓ Origin Loop (Virtual Po
Slide 10: Energy Markets and Octopus Energy targeted earnings trajectory
Energy Markets and Octopus Energy targeted earnings trajectory For personal use only • FY2024 to FY2025 earnings trajectory as disclosed at the half year has been superseded by new FY2024 guidance (slide 45) • FY2024 earnings guidance is now higher than previously expected • We expect a reduction in
Slide 11: Thermal peaking fleet is a growing source of earnings
Thermal peaking fleet is a growing source of earnings For personal use only Capacity position NSW average capacity forward prices MW $/MWh 3,000 30 2,500 2,000 20 1,500 1,000 10 500 - - Origin Energy Energy Australia SnowyHydro AGL FY22 FY23 FY24 Source: AEMO data as at 13 July 2023 • Thermal peakin
Slide 12: In-house VPP (loop) has several value pools
In-house VPP (loop) has several value pools across wholesale and retail For personal use only Targeting significant growth Virtual Power Plant value pools Wholesale Assets connected (MW) • Ability to move load to times of lower prices for a portion of assets • Near zero capital and low short run mar
Slide 13: Octopus has grown significantly with further value appreciation potential
Octopus has grown significantly with further value appreciation potential For personal use only UK retail exceptional growth Growing Kraken licensing Value appreciation 10 (m) (m) 4 (£bn) 35 30 8 3 25 6 20 2 4 15 10 1 2 5 - - - May-20 Dec-20 Sep-21 Dec-21 Octopus Energy customer accounts Contracted
Slide 14: Purpose led organisation
Purpose led organisation For personal use only Getting energy right Our Customers Our Communities Our Planet Our People ✓ Customer Happiness Index1 of ✓ Regional procurement 20% of ✓ Climate Transition Action Plan ✓ TRIFR down to 3.83 from 4.0 at 65% our total procurement spend received 94.5% shareh
Slide 15: Policy must support investment and a sustainable transition
Policy must support investment and a sustainable transition For personal use only • Substantial investment is required to underpin the new energy system – Investors require stable policy and adequate returns reflecting the risk profile • Investment in new gas supply is urgently needed • Any further
Slide 16: Financial Review
For personal use only Financial Review Lawrie Tremaine, CFO
Slide 17: Underlying Profit up $340 million to $747 million
Underlying Profit up $340 million to $747 million For personal use only Movements in Underlying Profit ($m) (30) (2) (78) 140 226 (553) 637 747 407 FY22 EM Share of Octopus IG - Share of IG - Other Corporate D&A Tax/other FY23 EBITDA Energy profit APLNG profit EBITDA EBITDA Higher income Higher oil
Slide 18: Cash flow improved from H1 FY2023
Cash flow improved from H1 FY2023 For personal use only ($m) FY23 FY22 Change Underlying EBITDA, adjusted for • Higher earnings from Energy Markets (up $637 million) 803 135 668 non-cash items Change in working capital (771) 119 (890) • Energy Markets impacts from the extreme wholesale price Futures
Slide 19: Energy Markets cash conversion expected to recover in FY2024
Energy Markets cash conversion – expected to recover in FY2024 For personal use only Energy Markets segment results ($m) 2,000 • Price volatility positively impacted working capital 1,500 and collateral in FY2022 (see previous slide) • This position moved towards more normal levels in 1,000 FY2023 a
Slide 20: Record APLNG cash distribution
Record APLNG cash distribution For personal use only APLNG distribution and Origin oil, gas and FX hedging 2,000 • APLNG distributed $1,783 million cash to Origin by way of unfranked dividends in FY2023, 1,500 $1,489 million net of Origin hedging • Strong operating cash flow of $8.2 billion after 1,
Slide 21: Dividend and capital management
Dividend and capital management For personal use only Adjusted Net Debt / Adjusted Underlying EBITDA 4x 3x Final FY2023 dividend of 20 cps, fully franked, determined for a total FY2023 dividend 36.5cps 2x • 66% Adjusted Free Cash Flow payout ratio 1x • Payout ratio is above the target range, reflect
Slide 22: Energy Markets Underlying EBITDA up $637 million
Energy Markets Underlying EBITDA up $637 million to $1,038 million For personal use only Movements in Underlying EBITDA ($m) Electricity gross profit up $366 million to $574 million (89) (18) 379 • Higher wholesale prices flowing into business (+$395 million) and retail (+$366 million) customer tari
Slide 23: Share of Octopus Energy increased to significant positive contribution
Share of Octopus Energy increased to significant positive contribution For personal use only Movements in Underlying EBITDA ($m) Retail (72) • The result reflects an increase in customer accounts and the lag in reset of tariffs – Prior year loss resulted from incurring higher cost of energy with an
Slide 24: Integrated Gas Underlying EBITDA up 4%
Integrated Gas Underlying EBITDA up 4% on higher export LNG prices For personal use only Movements Underlying EBITDA ($m) 81 (176) Share of APLNG EBITDA up $355 million, excluding the impact of (243) the sell down: 684 18 (234) (47) • Higher realised oil prices of US$103/bbl (A$154/bbl) vs US$74/bbl
Slide 25: Operational Review
For personal use only Operational Review Frank Calabria, CEO
Slide 26: Energy Markets
For personal use only Energy Markets
Slide 27: Electricity margin suppressed in H1 FY2023, now improving
Electricity margin was suppressed in H1 FY2023, now improving For personal use only 1H FY2023 • Customer tariffs did not allow for full wholesale cost recovery • Improved coal deliveries reduced exposure to high spot prices, but coal costs remained high • Market volatility high in Q1 FY2023 2H FY202
Slide 28: Electricity margin recovery driven by higher tariffs and lower fuel costs
Electricity margin recovery driven by higher tariffs and lower fuel costs For personal use only Customer tariffs increasing Coal prices have moderated Eraring contribution improved NSW electricity forward price ($/MWh) A$/t $/MWh 250 700 120 600 100 200 500 80 150 400 60 FY2024 300 100 FY2023 FY2025
Slide 29: Gas margin higher on tariffs repricing and trading gains
Gas margin higher on tariffs repricing and trading gains For personal use only Energy Markets Gross profit Trading gains on JKM supply contracted gas supply A$/GJ A$/GJ PJ 70 250 Majority Optimised JKM 60 of JKM physical and hedge hedge positions 200 50 purchase activity 150 40 5.1 30 100 3.7 3.0 20
Slide 30: Competition trending higher, continuing to grow customer base
Competition trending higher, continuing to grow customer base For personal use only Competition Large and growing customer base 25% Market offer discount % off DMO / VDO Customer accounts (‘000) 4,458 4,525 4,236 4,266 20% 15% 10% 5% - May-22 Oct-22 Mar-23 Aug-23 FY20 FY21 FY22 FY23 Discount % off D
Slide 31: Kraken migration complete, savings targeted for FY2025
Kraken migration complete, savings targeted for FY2025 For personal use only Cost savings $m • Successful migration of all mass market customers to Kraken, 800 currently in a period of operations stabilisation $200 – 250m • Kraken platform and unique operating model are designed to reduction 600 ena
Slide 32: Scaling up growth opportunities
Scaling up growth opportunities For personal use only Community Energy Services Broadband Origin Loop (VPP) 200 Gross Profit ($m) 500 Customer accounts (‘000) Assets connected (MW) Customer accounts (‘000) 3x +216% 442 400 150 403 300 100 280 96 257 815 200 148 61 50 98 75 82 100 33 258 20 159 85 -
Slide 33: Origin Zero accelerating large business customers to net zero
Origin Zero – Accelerating large business customers to net zero For personal use only Large business customers on Large business customer EVs under management broader services MWs on VPP 8% 300 Assets connected (MW) 1,000 # of EVs 250 800 6% 200 600 4% 150 400 100 2% 200 50 - - - FY22 FY23 FY24 targ
Slide 34: Octopus Energy
For personal use only Octopus Energy
Slide 35: Octopus Energy successfully navigated unprecedented market volatility
Octopus Energy successfully navigated unprecedented market volatility For personal use only UK wholesale electricity volatility £/MWh UK market volatility 600 • War in Ukraine resulted in gas shortages and energy price spikes across Europe 500 • Significant market consolidation as unhedged retailers
Slide 36: Exceptional growth, underpinned by outstanding customer satisfaction
Exceptional growth, underpinned by outstanding customer satisfaction For personal use only Exponential growth in retail Outstanding customer satisfaction Trusted brand 12 Customer accounts (m, LHS) and 16 30 NPS % of customers who trust their energy supplier revenue (£bn, RHS) 80% 10 20 60% 12 40% 8
Slide 37: Kraken: Next-gen technology platform for energy and utility sectors
Kraken: Next-gen technology platform for the energy and utility sectors For personal use only Kraken tech licensing Customers on Kraken today Kraken flexibility (m) 60 # of devices on Intelligent Octopus (‘000) 35 UK Germany 30 50 25 US - Texas France 40 20 30 15 New Zealand Japan 20 10 Australia Sp
Slide 38: Integrated Gas
For personal use only Integrated Gas
Slide 39: Strong resource base
Strong resource base For personal use only 24,000 APLNG Reserves and cumulative production (PJ)1 20,000 • Continuing confidence in resource base with net positive reserves revision before production 16,000 • Non-operated positive reserves revision (219PJ) 12,000 reflecting better than expected perfo
Slide 40: Strong production rebound following La Niña weather
Strong production rebound following La Niña weather For personal use only Stable production from quality assets Production rebound Daily operated APLNG production (100%) (PJ) TJ/Day Operated production production record of 800 1,618TJ/day in May 1,600 700 Increased workover activity 600 1,550 La Niñ
Slide 41: Record revenue driven by higher average oil prices
Record revenue driven by higher average oil prices on export contracts For personal use only Higher commodity prices over 1H FY2023 Record revenue 60 A$/GJ 12,000 $m 50 10,000 40 8,000 30 6,000 20 4,000 10 2,000 - 0 FY21 FY22 FY23 FY21 FY22 FY23 Average LNG contract price Average domestic price LNG
Slide 42: APLNG is a reliable and significant contributor to domestic markets
APLNG is a reliable & significant contributor to domestic markets For personal use only Domestic sales PJ 200 25% • APLNG continues to play an important role in providing secure gas supply to customers on Australia’s East Coast 160 20% • >150PJ sales for each of the last three years 120 15% • Domest
Slide 43: Costs up due to increased activity and cyclical maintenance
Costs up due to increased activity and cyclical maintenance For personal use only Cyclical costs impacting cost base APLNG Capex + Opex (100%)1 $bn Higher costs from FY2022 predominantly driven by: • Increased workover activity focused on reducing La Niña weather inventory backlog. Final year of ele
Slide 44: Strategy focused on short cycle, low-cost supply initiatives
Strategy focused on short cycle, low-cost supply initiatives For personal use only Lowest cost / • Successful program to increase percentage of wells operating at optimal pressures over 2H Short cycle Optimise existing FY2023 wells • Opportunity to further optimise, and to drive lower pressures to i
Slide 45: Outlook
For personal use only Outlook Frank Calabria, CEO
Slide 46: Guidance – Energy Markets and Octopus Energy
Guidance – Energy Markets and Octopus Energy For personal use only The following guidance is provided on the basis that market conditions and the regulatory environment do not materially change FY2024 • Energy Markets EBITDA is expected to be $1,300 – $1,700 million, excluding Energy Markets returns
Slide 47: Guidance – Integrated Gas
Guidance – Integrated Gas For personal use only The following guidance is provided on the basis that market conditions and the regulatory environment do not materially change Integrated Gas - APLNG 100% FY2023 FY2024 guidance Production PJ 674 680 – 710 Capex and opex, excluding purchases1 A$b 2.6 2
Slide 48: Appendix
For personal use only Appendix
Slide 49: Items excluded from Underlying Profit
Items excluded from Underlying Profit For personal use only Reconciliation from Statutory to Underlying Profit ($m) • $88 million business restructuring costs, including $55 million relating to the Kraken implementation 13 • $13 million relating to disposals - loss on 88 (180) disposal of interests
Slide 50: Capex
Capex For personal use only Origin capex ($m) FY23 Capex 500 • Managing sustaining capex on key assets: costs associated with the Ash Dam at Eraring ($69 million); 400 Darling Downs Power Station capital spares and major outage along with other maintenance activities across the 300 fleet. Spend in F
Slide 51: Large-scale Generation Certificates strategy – refund of shortfall charge
Large-scale Generation Certificates strategy – refund of shortfall charge For personal use only LGC strategy benefit $/certificate • Over FY2021 to FY2023, we deferred the surrender of ~9 million 80 certificates, incurring a shortfall charge of $65/certificate or $602 million in total 70 • This shor
Slide 52: Large-scale Generation Certificates (LGC) strategy
Large-scale Generation Certificates (LGC) strategy For personal use only Adjustments to Statutory Profit Statutory Shortfall CY2020 CY2021 CY2022 Underlying Impact across various financial years ($m) Profit charge/(refund) surrender cost surrender cost surrender cost Profit FY2021 CY2020 and CY2021
Slide 53: Customer account movements
Customer account movements For personal use only Electricity ('000) 20 Customer accounts ('000) as at 30 June 2023 30 June 2022 Change 10 Electricity 2,742 2,733 9 - Business 28 31 (2) (10) Retail – Residential 2,240 2,243 (2) (20) Retail – SME 288 291 (4) (30) Retail – Community Energy Services 185
Slide 54: Electricity forward price by State
Electricity forward price by State ($/MWh) For personal use only 250 NSW 250 QLD 200 200 150 150 100 100 50 50 - - May-21 Aug-21 Nov-21 Feb-22 May-22 Aug-22 Nov-22 Feb-23 May-23 May-21 Aug-21 Nov-21 Feb-22 May-22 Aug-22 Nov-22 Feb-23 May-23 VIC 250 SA 200 200 150 150 100 100 50 50 - - May-21 Aug-21
Slide 55: Energy Markets segment revenue reconciliation
Energy Markets segment revenue reconciliation For personal use only The table below reconciles the difference between segment revenue and customer revenue disclosed in the Electricity, Natural Gas, LPG and Solar & Energy Services tables. FY23 FY22 Change Change ($m) ($m) ($m) (%) Energy Markets segm
Slide 56: Managing oil price exposure
Managing oil price exposure For personal use only FY2024 120 FY2024 Oil Price Sensitivity Effective Oil Price US$/bbl • Origin share of APLNG JCC oil price and JKM gas price exposure is ~17 MMboe and ~18 tBtu • As at 7 August 2023, we estimate that 41 per cent of JCC and 23 per cent of JKM 70 FY2024
Slide 57: Segment summary
Segment summary For personal use only Energy Markets Share of Octopus Integrated Gas Integrated Corporate Total Energy - Share of APLNG Gas - Other ($m) FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22 Underlying EBITDA 1,038 401 240 (36) 2,246 2,134 (327) (297) (90) (88) 3,107 2,114 Unde
Slide 58: Underlying ROCE – month rolling
Underlying ROCE – 12 month rolling For personal use only 30 June 2023 30 June 2022 Change Change As at ($m) ($m) ($m) (%) Capital Employed Net Assets 8,911 10,022 (1,111) (11%) Adjusted Net Debt 2,877 2,838 39 1% Net derivative (asset)/liability (601) (2,915) 2,314 (79%) Origin's share of APLNG net
Slide 59: Reconciliation of Adjusted Net Debt
Reconciliation of Adjusted Net Debt For personal use only Issue Issue Hedged Hedged AUD $m AUD $m AUD $m $m Currency Notional Currency Notional Jun-23 Jun-23 Jun-23 Interest bearing Debt & CCIRS FV Adjusted net debt liabilities2 adjustments AUD debt AUD 826 AUD 826 814 814 USD Debt left in USD USD 6
Slide 60: Financial Instruments and fair value adjustments
Financial Instruments and fair value adjustments Balance Sheet Impact Income Statement Impact For personal use only Financial asset/(liability) Pre-tax Post-tax Gain/(loss) Inc/(dec) in Inc/(dec) in Gain/(loss) Gain/(loss) Total inc/(dec) included in financial other net excluded from excluded from (
Slide 61: Important notices
Important notices For personal use only Forward looking statements This presentation contains forward looking statements, including statements of current intention, statements of opinion and predictions as to possible future events. Such statements are not statements of fact and there can be no cert
Slide 62: Important notices
Important notices For personal use only All figures in this presentation relate to businesses of the Origin Energy Group (Origin, or the Company), being Origin Energy Limited and its controlled entities, for the reporting period ended 30 June 2023 (the period) compared with the reporting period ende
Slide 63: For more information
For more information For personal use only Peter Rice General Manager, Capital Markets Email: peter.rice@originenergy.com.au Office: +61 2 8345 5308 Mobile: + 61 417 230 306 Lindsay Donnelly Group Manager, Investor Relations Email: lindsay.donnelly@originenergy.com.au Office: +61 2 8345 5502 Mobile: