Origin Energy Limited · ASX:ORG
Origin Energy — UBS Utilities Conference 2004
28 slides from Origin Energy's conference presentation, Nov 29, 2004
Slide 1: ASX announcement cover note: Presentation
Origin energy To Company Announcements Office Facsimite 1300 300 021 Company Australian Stock Exchange Limited Date 29 November 2004 From Bill Hundy Pages 28 Subject PRESENTATION Please find attached a copy of a presentation entitled “Delivering Value for Shareholders” that Grant King, Managing Dire
Slide 2: Delivering Value for Shareholders
Delivering Value for Shareholders Presentation to the UBS Utilities Conference, Sydney 29 November 2004
Slide 3: Presentation outline
Presentation outline ¢ Introduction * Origin’s phases of growth - Retail - Exploration and production - Generation e Contact « Conclusion Page 2 Origin.
Slide 4: Introduction
Slide 5: Origin's financial objectives and business strategies
Origin’s financial objectives and business strategies were established to respond to changes in the energy industry in the mid 90’s..., « Financial Objective ~ Steady and predictable cashflows - EPS growth of 10-15% pa on average « Business Strategy ~ Positioned in the competitive (rather than regul
Slide 6: Implementation of strategy has grown operations and profits
implementation of Origin’s financial objectives and business strategy has grown the company’s operations and profits 2,500 2P Reserves (PJe) 2.5 up 118% Customers (millions) 2,000 5 up 79% EBITDA by Segment (AS, miilions} 2.0 600 1,500 15 500 5 1,000 1.0 400 - Jun Jun Jun Jun- Jun- 60 o1 02 03 O4 Ju
Slide 7: Retail
Slide 8: Growth driven by acquisitions and retail consolidation
Origin’s growth in the past few years has been driven by acquisitions in conjunction with consolidation of energy retailers Eastern Australia Eastern Australia Market share of customers: 1998 Market share of customers: 2003 Origin Energy 16% Origin HM Origin Energy Energy Listed Companies 4% [| Gove
Slide 9: Annualised market churn in Victoria at record levels
Annualised market churn in Victoria is at record levels....... Page 3 _~ 30.0% Se eum V(C Elec 3 25.0% emmy 1C Gas S 20.0% c < LL 15.0% £ Zz 0.0% U 2 5.0% 2 g 0.0% ' ; ; ; ; ; : : - oO Mw Js S$ DB M J $s DB M J $ 0D 2002 2003 2004 vesseaees with the increased activity largely driven by door knocking
Slide 10: Peak churn occurring later than in the UK
Peak churn is occurring later than experienced in the UK, and is still at lower levels than experienced there 30.0% oot qummmmmyy (CE lec / 1 que (CC Gas 25.0% if 7 \ ——_ NSW Elec 7 \ —_ NSW Gas “ 6 VyA\ iN 20.0% i? \\ ———-UK Elec 7 v ——-——-UK Gas 15.0% 10.0% 5.0% + Quarterly Churn (Annualised %) 0.
Slide 11: Responding to higher churn by reducing cost to serve
in response to higher churn rates in a competitive market Origin must significantly reduce its cost to serve........ in-House evolution is the preferred path forward Origin. Roger: Team analysis
Slide 12: Reduce churn in our customer base
....and reduce churn in our customer base « Detailed market understanding - through data analysis, segmentation and product development « Be competition enabled in all markets - ensure that we are able to compete when, where and how we need to in order to respond to the market (both fuels, all marke
Slide 13: Clear, attractive product choices that add value for customers
Origin is careful to offer customers clear, attractive product choices that add value for the customer....... Adore bie t Be restiy ec Nici HV customers get end-of-year rebates & year-round membership benefits $50 off AFL club membership 1 Month’s free electricity Do something for at the end of 12 m
Slide 14: Exploration and Production
Exploration and Production pao vecepenriteres2 Seagate ee
Slide 15: Strategy of looking for gas where easy to market
Origin’s strategy of looking for gas where it is easy to market, rather than easy to find, has resulted in significant growth in reserves and new contracts....... Proved and Probable Reserves (PJe} 2500 2600 1500 1000 500 4 Grigin Energy Proved and Probable (2P) Reserves Mi 2P reserves Jun 00 Jun Ot
Slide 16: Near-term growth driven by E&P expenditure
Origin’s near term growth will be driven by expenditure on E&P projects already disclosed to the market Growth capital expenditure estimates and acquisitions compared with free cash flow for FY ‘04 450 Estimated Annual Expenditure (A$ miilion) FY 2004 free cash flow $350 million 03/04 64/05 05/06 66
Slide 17: Major projects in the capital expenditure program
Major projects in this capital expenditure program include the following...... ‘Coal seam gas (CSG) | Perth Basin Perth Basin oil (50%) 3 oil discoveries (1st in basin since 1966) producing over 4,000 bopd net *Production to increase towards 5,000 bopd net BassGas Project (37.5%) « Gross production
Slide 18: Oil price has risen despite declining forward curves
The price of oil has risen dramatically in recent months despite declining contract forward curves Historical Tapis oil price and selected forward curves oo, . 80 + Origin is not highly leveraged to the oil market 7o a o * Crude oil and condensate make up only 7% of Origin’s reserves and around 16%
Slide 19: Generation
Slide 20: Forward curve gives no signal new capacity is required
Current forward curve gives no signal that new capacity is required......... $70 Victoria Electricity Prices $60 5 $20 5 New Entry Costs End Oct 04 Forward Curve aoe Monthly Average Spot Price Rolling 365 day av Spot Price —— 2001 Historical Forward Price —— 2002 Historical Forward Price easeeee 309
Slide 21: Integrated players likely to drive next investment round in generation
Origin believes it is most likely that integrated players will drive the next round of investment in generation......... Victorian monthly average pool prices and retail tariffs $150 Tariffs in the retail electricity — market are relatively stable $125 e—_ with customers billed quarterly | and price
Slide 22: Further growth in Generation through gas plants and renewables
Looking further ahead Origin is pursuing further growth in Generation through gas fired power plant development and renewables we So Energy Demand nw wa we oS ° Annual Demand and Generation dispatched (Twh) ww a Peak Demand 4,000 3,006 HOrigin Generation Ei Origin Retail Load Peak Demand and Install
Slide 23: Contact
Slide 24: Completed acquisition of EME's interest in Contact
Origin has completed the acquisition of EME’s interest in Contact and the compulsory offer to minor shareholders + Acquisition of EME’s stake completed on 1 October and offer to all other Contact shareholders completed on 26 October, 2004 * Origin’s final equity 51.4% + Contact Board reduced to six
Slide 25: Conclusion
Slide 26: Long term goal of EPS growth of 10-15% pa
Origin maintains the long term goal of achieving EPS growth of 10-15% pa through sound strategy, internally generated growth and effective acquisitions EBITDA by Segment (AS$m) 1000 900 - 800 5 700 + 600 - iS) ; oe on BE&P Retail B Generation H Networks Page 25 « The combined growth across Origin’s
Slide 27: Slide 27
Slide 28: For more information
For more information. Page 27 For more information on Origin Energy please contact Angus Guthrie Manager, investor Relations Email: angus .euthrie@originensrey.com.au Telephone: +61-2-8345 5558 Mobile: + 61-417 864 255 Alternatively visit our website www ,origineneray.com.au and follow the prompts t