Slide 1: Financial Report Full Year 2015
FINANCIAL REPORT FULL YEAR 2015 I N V E S T O R P R E S E N TAT I O N 4 February 2016 FY 2015 RESULTS 1
Slide 2: Disclaimer
Disclaimer Certain statements in this presentation are based on the beliefs of our We urge you to read our annual report available on our website at management as well as assumptions made by and information currently www.dongenergy.com for a discussion of some of the factors that could available to
Slide 3: Strong operating result, but significant impairment charges
Strong operating result, but significant impairment charges Highlights 2015 Group EBITDA Strong operating results despite low oil & gas prices (DKKbn) +13% 18.5 EBITDA of DKK 18.5bn (up 13% y/y) 16.4 15.0 13.7 Strong underlying earnings growth in Wind Power 8.6 Solid credit metrics (FFO/Adju
Slide 4: Conclusion of Oil & Gas strategic review
Conclusion of Oil & Gas strategic review Adapting the O&G business to a new market reality Based on an extensive evaluation of different scenarios, the Oil & Gas business unit (formerly named E&P) will be kept as part of the portfolio and the planned IPO of the Group Oil & Gas (O&G) holds a high
Slide 5: Global leader in attractive offshore wind market
Global leader in attractive offshore wind market DONG Energy’s offshore wind business Buildout plan towards 2020 (installed & secured capacity, GW) Global leader in attractive offshore wind market 2015 3.0 2016 0.6 Gode Wind 1+2 Growth path towards 2020 highly predictable through 2016 3.6 sancti
Slide 6: Decision to build Hornsea 1 offshore wind farm
Decision to build Hornsea 1 offshore wind farm Hornsea 1 to become the world’s largest operating wind farm DONG Energy’s UK offshore wind presence (1.2 GW) once operational in 2020 UK installed capacity currently amounts to 1.7GW UK installed capacity expected to reach 4.4GW by 2020 Hornsea
Slide 7: Revised portfolio strategy with accentuated focus on renewables
Revised portfolio strategy with accentuated focus on renewables Comments to the revised portfolio strategy The 2015 Business Unit EBITDA mix is not a strong indicator of the mix for 2016 and onwards as we expect earnings from Wind Power to increase significantly while the O&G earnings expectedly wil
Slide 8: Current key priorities
Current key priorities Key priorities 2015 Status Key priorities 2016/2017 Status Westermost Rough on stream FID Hornsea Borkum Riffgrund 1 on stream FID Borkum Riffgrund 2 FID Race Bank Gode Wind 1+2 on stream FID Walney Extension Burbo Bank Extension on stream Renegotia
Slide 9: Market conditions and prices
Market conditions and prices OIL AND GAS PRICE UK POWER PRICE USD/bbl EUR/MWh EUR/MWh Oil price Gas TTF (rhs) 120 35 80 Forward prices Forward price 100 30 70 80 25 60 60 20 50 40 15 40 20 10 30 2012 2013 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Source: Platts, Argus (forwards from 8 Jan. 2
Slide 10: Financial highlights 2015
Financial highlights 2015 EBITDA – DKK 18.5bn (up 13% y/y) Selected financials (DKKm) 2015 2014 Solid operating performance in WP and O&G Revenue 70,843 67,048 EBITDA 18,484 16,389 Strong underlying growth in WP Net finance costs -2,124 -1,710 Contribution from new wind assets and construction
Slide 11: Significant impairment charges within O&G
Significant impairment charges within O&G Explanation of impairment charges totalling DKK 17.0bn Oil price curve today vs. one-year ago Impairment charges within O&G amounted to DKK 15.8bn USD/boe Current forward (25-Jan 2016) Forward curve EoY 2014 (DKK 14.9bn after tax) and can be ascribed to th
Slide 12: Wind Power
Wind Power Operational highlights 2015 Renewable generation (TWh) +16% Production up 16% y/y 5.8 5.3 5.0 Contribution from new wind farms West of 4.4 4.6 Duddon Sands, Westermost Rough and Borkum 2.8 2.9 4.3 4.9 Riffgrund 1 0.8 0.8 0.8 0.9 0.6 Outages on Anholt, Horns Rev 2 and Walney 2 0.5 0.
Slide 13: Bioenergy & Thermal Power (previously named Thermal Power)
Bioenergy & Thermal Power (previously named Thermal Power) Operational highlights 2015 Thermal heat and power generation (PJ, TWh) Heat generation up 7% y/y primarily due to slightly 60 20 colder weather than in 2014 15 40 Power generation down 19% y/y reflecting a 10 challenging market with neg
Slide 14: Distribution & Customer Solutions (previously named Customers & Markets)
Distribution & Customer Solutions (previously named Customers & Markets) Operational highlights 2015 Operational figures 2014 2015 Overall, stable volumes for sales and distribution Gas sales TWh 151.3 159.1 Satisfactory outcome from settlement of a gas Power sales TWh 34.5 35.5 contract renegot
Slide 15: Oil & Gas (previously named Exploration & Production)
Oil & Gas (previously named Exploration & Production) Operational highlights 2015 Oil & Gas production (mboe) Oil Gas Production down 2% y/y -2% Scheduled shutdown of Ormen Lange for 42 days 41.8 40.9 in Q2 15 partly compensated by additional catch- 28.5 31.7 10.6 10.1 26.4 8.2 up volumes in 201
Slide 16: Hedging of oil and gas in O&G
Hedging of oil and gas in O&G Hedging of oil and gas Value of hedge instruments in O&G – transfer to EBITDA DONG Energy has a conservative hedge policy with a hedge In accordance with the principles for Business Performance, horizon of up to 5 years for oil and gas production value adjustments o
Slide 17: Debt overview
Debt overview Net debt development 2015 Gross debt and hybrids 2015 14% Bonds 2% 13.6 Hybrids 18.7 26% 58% Bank loans 2.7 9.2 4.0 Other debt incl. repo 2.6 Net debt Capex Operating Divestments Other 1 Net debt cash flow EoY 2014 EoY 2015 Key ratios loan portfolio2 Q4 14 Q4 15 Note (1): Other include
Slide 18: Outlook 2016 and financial policies
Outlook 2016 and financial policies Group EBITDA outlook EBITDA direction 2016 vs. 2015 per Business Unit DKK 20-23bn in 2016 Wind Power – significantly higher: The outlook is particularly sensitive to divestment gains in WP, Ramp up of power generation from new wind farms renegotiations of gas so
Slide 19: Q&A
Q&A (to ask a question on the conference call, press 01 on the telephone key pad) FY 2015 RESULTS 19
Slide 20: Appendix
APPENDIX DONG FY 2015 RESULTS 20 energy
Slide 21: Financial mid-term targets and policies
Financial mid-term targets and policies Mid-term targets Financial policies FFO/Adjusted net debt around 30% Minimum rating of BBB+/Baa1 Pay-out-ratio: 40-60% of profit for the year attributable to the shareholders of DONG Energy A/S1 The previously announced ROCE target of 10% for 2016 is e
Slide 22: Comparison Q4 15 vs. Q4 14
Comparison Q4 15 vs. Q4 14 EBITDA Q4 15 y/y by Business Units Group financials (DKKm) Q4 15 Q4 14 Revenue 15,693 17,127 EBITDA 3,648 3,365 Wind Power – up DKK 0.9 y/y Net profit -15,319 -6,140 Contribution from new farms Higher activity on construction agreements (primarily Gode Wind 1+2) Assets
Slide 23: Investments
Investments Investments in 2015 (DKKm) Gross investments on Business Units in 2015 Cash flow from investing activities -12,799 6% Purchase and sale of securities (reversal) - 3,237 7% Oil & Gas Wind Power Sale of assets and companies (reversal) - 2,605 32% Bioenergy & Thermal Power Other - 52 DKK Di
Slide 24: FFO/Adjusted net debt calculation
FFO/Adjusted net debt calculation FFO/Adjusted net debt 2015 2014 EBITDA 18,484 16,389 Adjusted net interest expenses -2,280 -2,494 Net interest expenses -767 -1,145 Capitalised interest -389 -339 Interest element of decommission obligations -494 -416 50% of hybrid coupons -411 -377 Operating leases