Orsted · OMXCOP:ORSTED
Orsted — DONG Energy — Q1 2016 Earnings Presentation
20 slides from Orsted's earnings presentation, Apr 27, 2016
Slide 1: Financial Report Q1 2016 Investor Presentation
FINANCIAL REPORT Q1 2016 I N V E S T O R P R E S E N TAT I O N 27 April 2016 Q1 2016 RESULTS 1
Slide 2: Disclaimer
Disclaimer Certain statements in this presentation are based on the beliefs of our management as well as assumptions made by and information currently available to the management. Forward-looking statements (other than statements of historical fact) regarding our future results of operations, financ
Slide 3: Strategic highlights in Q1 16
Strategic highlights in Q1 16 MILESTONES Q1 16 EXPECTED MILESTONES REST OF 2016 FID Hornsea 1 FID Borkum Riffgrund 2 First power Gode Wind 2 Acquisition of project rights off the coast of New Jersey (1GW) Commercial Operation Date Gode Wind 1&2 Farm down in Burbo Bank Extension One add
Slide 4: Continued strong earnings growth
Continued strong earnings growth Financial highlights Q1 16 Group EBITDA (DKKbn) Continued strong operating results despite low oil and gas prices 18.5 16.4 15.0 Positive impact from settlement of gas sourcing contracts +35% 8.6 8.1 EBITDA of DKK 8.1bn – up 35% y/y both on reported and 6.0 whe
Slide 5: Renewable focused investment strategy driving ROCE
Renewable focused investment strategy driving ROCE Capital allocation focused on renewables Gross CAPEX expected (%, 2016-2020) Investments focused on DONG Energy’s differentiated capabilities within renewables and offshore wind in Wind Power Danish utility1 Oil & Gas particular Growth engine Stab
Slide 6: Strong increase in regulated, quasi-regulated & contracted earnings
Strong increase in regulated, quasi-regulated & contracted earnings Moving towards regulated and contract based income EBITDA contribution from regulated and quasi-regulated The renewable focused investment strategy will significantly and contracted activities1 Share of EBITDA increase DONG Energy
Slide 7: 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 Forward 100 prices 30 70 price 80 25 60 60 20 50 40 15 40 20 10 30 2013 2012 2014 2013 2015 2016 2017 2013 2014 2015 2016 2017 Source: Platts, Argus (forwards from 18 April
Slide 8: Financial results Q1 16
Financial results Q1 16 EBITDA – DKK 8.1bn (up 35% y/y) Selected financials (DKKm) Q1 15 Q1 16 % chg. Revenue 19,267 18,833 -2% Strong underlying growth in WP with contribution from new EBITDA 6,001 8,089 35% wind farms and higher activity on partnership contracts Net finance costs -849 12 n/a S
Slide 9: Wind Power
Wind Power Operational highlights Q1 16 Key business drivers Q1 15 Q1 16 Power generation up 5% y/y Power generation GWh 1.6 1.7 Wind Energy Content Index 121 113 Full quarter contribution from new wind farms Westermost Load factor % 55 47 Rough and Borkum Riffgrund 1 Installed capacity GW 2.5 3
Slide 10: Bioenergy & Thermal Power
Bioenergy & Thermal Power Operational highlights Q1 16 Key business drivers Q1 15 Q1 16 Heat generation TWh 4.4 4.3 Heat generation slightly down y/y due to sale of Måbjerg plant, partly offset by colder weather than in Q1 15 Power generation TWh 3.0 3.0 Degree days, number No. 1,211 1,300 Decis
Slide 11: Distribution & Customer Solutions
Distribution & Customer Solutions Operational highlights Q1 16 Key business drivers Q1 15 Q1 16 Satisfactory outcome from settlement of gas contract Regulatory asset base (power) DKKbn 10.3 10.8 renegotiations Regulatory asset base (gas) DKKbn 3.4 3.2 Gas sales TWh 43.9 41.6 Branding of the Dist
Slide 12: Oil & Gas
Oil & Gas Operational highlights Q1 16 Key business drivers Q1 15 Q1 16 Oil production BOEm 2.6 2.4 Stable oil and gas production (up 2% y/y) Gas production BOEm 7.3 7.6 Lower Ormen Lange catch up volumes y/y (DKK 0.3bn Lifting costs USD/boe 7.1 6.3 positive impact in Q1 16 vs. DKK 0.5bn in Q1 1
Slide 13: Debt overview
Debt overview Net debt development Q1 16 (DKKbn) Gross debt and hybrids Q1 16 2% 4.2 15% Bonds 9.2 9.8 Hybrids Bank loans 27% 57% Other debt 2.0 0.7 0.9 Net debt Capex Operating Divestments Other1 Net debt cash flow EoY 2015 Q1 16 Note (1): Other include FX adjustments, hybrid coupons, dividend to m
Slide 14: Conservative hedging policies
Conservative hedging policies Hedge ratios per Business Unit (energy price risk)1 O&G expected transfer value of hedges to EBITDA1 DKKbn 2.2 2.4 94% 92% 76% 51% WP 23% 2016 2017 2018 2019 2020 1.7 1.5 1.3 0.2 41% 18% 3% 0.4 BTP 2016 2017 2018 2019 2020 1.1 1.0 0.6 -0.2 99% 96% 99% 97% -0.5 81% DCS 2
Slide 15: Financial outlook, medium-term targets and policies
Financial outlook, medium-term targets and policies EBITDA outlook 2016 Return on capital employed (ROCE) Group DKK 20-23bn (unchanged) Group 12-14%1 Avg. 2017-2020 The outlook is particularly sensitive to timing of farm down gains in Wind Power and Wind Power 13-15%2 Avg. 2017-2020 development in
Slide 16: Q&A
Q&A Conference call tel: +45 3544 5583 / +44 206 194 0544 Q1 2016 RESULTS 16
Slide 17: Appendix
APPENDIX DONG Q12016 RESULTS 17 energy
Slide 18: Differences in Business Performance EBITDA and IFRS EBITDA
Differences in Business Performance EBITDA and IFRS EBITDA DKKm Q1 15 Q1 16 EBITDA – Business Performance (BP) 6,001 8,089 BP adjustment in respect of revenue for the year -2,316 499 BP adjustment in respect of COGS for the year 302 317 EBITDA – IFRS 3,987 8,905 Total BP adjustments for the year com
Slide 19: Investments
Investments Investments in Q1 16 (DKKm) Gross investments on Business Units in Q1 16 Cash flow from investing activities - 5,790 Purchase and sale of securities (reversal) 3,680 Wind Power 23% Bioenergy & Thermal Power Sale of assets and companies (reversal) - 1,981 Distribution & Customer Solutions
Slide 20: FFO/Adjusted net debt calculation
FFO/Adjusted net debt calculation FFO/Adjusted net debt Q1 161 Q4 151 Q1 151 EBITDA 20,572 18,484 16,056 Adjusted net interest expenses -2,402 -2,446 -2,279 Net interest expenses -715 -1,054 -767 Capitalised interest -433 -356 -389 Interest element of decommission obligations -508 -435 -494 50% of h