Orsted · OMXCOP:ORSTED
Orsted — DONG Energy — Q1 2012 Earnings Presentation
30 slides from Orsted's earnings presentation, May 11, 2012
Slide 1: Financials 2012 First Quarter Results
FINANCIALS 2012 FIRST QUARTER RESULTS 11 May 2012
Slide 2: Disclaimer
Disclaimer Certain statements in this presentation are based on the We urge you to read our annual report available on our website beliefs of our management as well as assumptions made by at www.dongenergy.com for a discussion of some of the and information currently available to the management. fac
Slide 3: Agenda
Agenda DONG Energy highlights Financials Outlook Appendix 3
Slide 4: Highlights first quarter 2012
Highlights first quarter 2012 Highlights 1 Key figures DKKbn EBITDA of DKK 3.6bn (down 25% y/y) 16 14.1 Net debt of DKK 25.1bn (up 6% vs. Q4 11) 14 13.4 13.8 Adjusted net debt/EBITDA at 2.2x (1.9x at Q4 11) 12 9.3 10 Net result at DKK 2.3bn (up 56% y/y) 8 6 4.7 4.5 4.8 Outlook: 4 3.6 2.9 2.3
Slide 5: Recent events: New CEO – no change in strategic direction
Recent events: New CEO – no change in strategic direction In April 2012, Henrik Poulsen was appointed new CEO of CV Henrik Poulsen DONG Energy Born: 1967 2008-: CEO TDC Henrik Poulsen joins from TDC, where he is currently CEO 2006-2008: Operating partner at private equity firm KKR Carste
Slide 6: Recent events: Investment in specialised installation vessel
Recent events: Investment in specialised installation vessel The new vessel forms part of DONG Energy's industrialisation concept for offshore wind to: Reduce installation time Reduce construction costs Enhance robustness in the installation phase Enhance flexibility in planning The new
Slide 7: Recent events: Long-term pipeline – Round 3 Irish Sea
Recent events: Long-term pipeline – Round 3 Irish Sea Joint venture 50/50 together with Centrica to co-develop Round 3 projects in Irish Sea Zone Potential first construction of DONG Energy operated projects at the end of this decade The entire zone has a potential capacity of 4.2GW likely to
Slide 8: Recent events: Increased costs to repair Siri platform
Recent events: Increased costs to repair Siri platform Raised repair cost estimate for the Siri platform from DKK 2bn Background to DKK 3.5bn (of which DKK 0.6bn was incurred in 2011) Aug. 2009 Production stopped after a routine inspection revealed Of the remaining costs (DKK 2.9bn), the expecta
Slide 9: New assets on stream in 2012
New assets on stream in 2012 Walney 2 London Array • 184MW UK offshore wind farm • 630 MW UK offshore wind farm • DONG Energy's share: 50.1% • DONG Energy's share: 50% • Full operation since Apr. 2012 • First power expected in Q3 12 Lincs Anholt • 270MW UK offshore wind farm • 400 MW DK offshore win
Slide 10: Focus on divestments and partnerships continue
Focus on divestments and partnerships continue Divestments & strategic partnerships have continued in 2012 in order to: ‒ Focus on core activities ‒ Balance investment in new assets ‒ Diversify risks Concluded or agreed divestments (DKKbn) 2012 ytd: DKK 7.6bn 0.3 23.0 4.7 9.5 2.6 5.9 2010 2011 Oil
Slide 11: Agenda
Agenda DONG Energy highlights Financials Outlook Appendix 11
Slide 12: Market prices
Market prices Hydro balance Green Dark Spread (monthly average) TWh EUR/MWh 20 50 2012 40 10 Forward prices 30 0 20 -10 10 -20 0 -30 -10 2011 -20 -40 -30 -50 -40 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 2011 2012 2013 Range 2004-2011 Median 2004-2011 DK avg. Nord Pool (system) EEX Source
Slide 13: Selected Financial Figures
Selected Financial Figures Business Performance DKK million Q1 12 Q1 11 2011 EBITDA decreased to DKK 3.6bn (down 25% y/y) Revenue 19,927 15,957 56,842 Higher oil & gas prices and higher gas production EBITDA 3,583 4,760 13,770 Increased production from new wind farms Financial items, net -429
Slide 14: Exploration & Production
Share of group EBITDA Exploration & Production Higher oil and gas prices 46% Operational figures Operational highlights mboe Marulk started production in April 2012 30 25 Oselvar started production in April 2012 20 65% 63% 35% Decision to develop the Danish Oil & Gas field Hejre 15 46% 10 In
Slide 15: Wind Power
Share of group EBITDA Wind Power Contribution from new assets 17% Operational figures Operational highlights TWh Walney 2 went into full operation in April 2012 5 30% 4 25% First power from London Array expected in Q3 12 20% 3 JV with Centrica to co-develop Round 3 licenses in Irish Sea 15% 2
Slide 16: Thermal Power
Share of group EBITDA Thermal Power Lower production and lower GDS 19% Operational figures Operational highlights TWh TJ Divestment process of 8 decentral power stations 20 60 completed – total sales sum of DKK 0.3bn 50 15 40 Refurbishment of Studstrup coal-fired power station – increases lifeti
Slide 17: Energy Markets
Share of group EBITDA Energy Markets Lower earnings from gas sales -4% Operational figures Status on gas business TWh TWh Large oil/gas spread impacting earnings negatively 140 14 120 12 Renegotiations ongoing with gas suppliers – DONG 100 10 Energy expects to obtain similar terms as other large
Slide 18: Sales & Distribution
Share of group EBITDA Sales & Distribution Stable earnings 22% Operational figures Operational highlights Q1 12 Q1 11 Acquisition of Shell Gas Direct completed in May 2012 Gas sales TWh 7.7 8.2 Distribution of gas TWh 3.6 4.2 Power sales TWh 2.1 2.1 Distribution of power TWh 2.4 2.5 Transport of o
Slide 19: Debt overview
Debt overview Gross interest-bearing debt and hybrid capital Key ratios loan portfolio (incl. hybrid capital) DKKbn Q1 12 Q4 11 70 Share of fixed rate1 95% 92% 60 Duration (years) 2 10.0 7.7 9.5 Average time to maturity (years) 3 10.6 9.4 50 Hybrid 2.9 1.3 9.5 Repo Average interest rate3 4.1% 4.1% 4
Slide 20: Hedging – Limited energy price exposure
Hedging – Limited energy price exposure Exposure Power 2012-2013 (DKKbn) DKKbn 3.0 2.5 2.5 2.0 1.5 1.2 1.0 0.8 0.5 Financial impact in 2012-2013 from 0.1 0.0 10% change Renewable power Thermal power production Market price Impact (DKKm) production (outright) (GDS/GSS) Oil & gas DKK 22m* Before hedgi
Slide 21: Agenda
Agenda DONG Energy highlights Financials Outlook Appendix 21
Slide 22: Outlook
Outlook EBITDA outlook EBITDA 2012 expected to be in line with 2011 New oil & gas fields Oselvar and Marulk Full ownership of the Siri field First power from wind farms London Array, Lincs and Anholt Full year contribution from Walney wind farm Negative impact from Siri platform repair R
Slide 23: Targets
Targets EBITDA target DKKbn Target to: 20 Double EBITDA from 2009 to 2015 (double to DKK 17.6bn) 15 EBITDA in 2013 expected to be significantly above 2012 10 Full year effect from Anholt, London Array and Lincs 5 Full year effect from Oselvar and Marulk Positive impact from start up of the o
Slide 24: Q&A
Q&A For further information please visit our website dongenergy.com/EN/Investor/ 24
Slide 25: Outlook Market Prices
Outlook Market Prices a nnua l re port 20 11, Curre nt as s ump- (re s t o f ye ar) 9 Ma rch 20 12 Assumption, tio n, 2 0 12 Q1 20 12 Actua l, (ave rage ) Oil, Bre nt USD/bbl 109 105 118 Ga s, TTF EUR/MWh 24 23 24 Ga s, NBP EUR/MWh 24 23 24 Ele ctricity, Nord Pool syste m EUR/MWh 41 37 38 1 Ele ctri
Slide 26: Business Performance – Q1 12
Business Performance – Q1 12 In Q1 12, the difference between Business Performance and IFRS amounted to DKK 2.3bn Business Performance EBITDA DKK 3.6bn Adjustments DKK 2.3bn MtM of financial and physical hedging contracts relating to other periods DKK -1.6bn Deferred losses/gains relating to finan
Slide 27: Dividend, Funding and Rating
Dividend, Funding and Rating Long term capital structure target Funding strategy and Debt Programmes Maintain a minimum rating of BBB+ / Baa1 External funding primarily to be carried out Adjusted net interest-bearing debt (1) up to 2.5 through parent company – to avoid structural times EBITDA
Slide 28: Net debt calculation Q1 12
Net debt calculation Q1 12 49.4 2.9 14.7 1.9 2.2 27.3 1.5 25.1 3.3 Gross debt Repo Marketable Cash & cash Receivables Receivables Net debt 50% Adjusted Securities equivalents from associates from minority outstanding net debt shareholders hybrid due 3005 28
Slide 29: Investments
Investments Investments in Q1 12 Main gross investments in Q1 12 Cash flow from investing activities -10.0bn Wind activities: DKK 3.7bn Purchase of securities (add back) 7.7bn Walney DKK 1.5bn Transactions with non-controlling interest -0.0bn London Array: DKK 0.9bn Loans to jointly controlled e
Slide 30: Larger decided construction projects
Larger decided construction projects Larger projects with production start in 2012-2015 Country MW (1) Commercial Own share Announced Spent Project Type of project operation date (2) of project capex (3) capex (4) Sea Installer 1 Installation vessel n.a. n.a. 2012 51% USD 70m USD 51m London Array(5)