Orsted · OMXCOP:ORSTED

Orsted — DONG Energy — 9M 2010 Earnings Presentation

30 slides from Orsted's earnings presentation, November 2010

  1. Slide 1: Financials 2010 – First 9 months

    FINANCIALS 2010 First 9 months

  2. 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

  3. Slide 3: Agenda

    Agenda  DONG Energy highlights  Market development  Financials  Outlook  Appendix 3

  4. Slide 4: Highlights first 9 months of 2010

    Highlights first 9 months of 2010 Key financials Key figures  EBITDA up 47% y/y to DKK 10.0bn DKKbn 16  Raised EBITDA outlook for 2010 on the back of: 13.6 14  Lower than expected oil and gas spread 12 9.6 10.4 10.2 10.0  Lower than expected costs 10 9.5 9.7 9.0 8.8 8.8 8.2  Optimisation of gas

  5. Slide 5: Clean and reliable energy

    Clean and reliable energy Clear targets Increased diversification and robustness Focus on organic growth driven by E&P and Generation/Renewables Generation/Thermal, Energy Markets and S&D drive market  Increasing diversification across markets, leading operational excellence fuels and technologies

  6. Slide 6: Key events in Q3 supporting the strategic direction

    Key events in Q3 10 supporting the strategic direction E&P  Decision to build out Norwegian gas field Marulk  Divestment of shares in Danish licenses Svane and Solsort Partnerships  Divestment of 30% of Nysted offshore park to pension fund PensionDanmark  Divestment of 7.25% of Nysted offshore p

  7. Slide 7: Target to double EBITDA by 2015

    Target to double EBITDA by 2015 In compliance with the capital Based on planned investments the structure target the following objective is to double EBITDA from expectations are set for net 2009 to 2015 investments:  2010: DKK 11-12bn EBITDA 2009 EBITDA 2015E (previous expectation DKK 10bn)  2011

  8. Slide 8: Decided larger construction projects coming on stream

    Decided larger construction projects coming on stream Expected EBITDA contribution of approximately DKK 1.0bn in 2010(1) Trym (NO) Walney 1+2 (UK) London Array (UK) Mongstad (NO) Oselvar (NO) Lincs (UK) Severn (UK) Enecogen (NE) Marulk (NO) Anholt (DK) Laggan-Tormore (UK) Q4 10 2011 2012 2013 2014 N

  9. Slide 9: Larger decided construction projects

    Larger decided construction projects Larger projects with commercial production before end of 2010 Project Type of project DE's share MW(1) Capex/remaining capex(2) Commercial of project start Horns Rev 2 91 offshore wind turbines in DK 100% 209MW DKK 3.7bn /DKK 0.0bn Dec 2009 Karnice and Karcino 30

  10. Slide 10: Agenda

    Agenda  DONG Energy highlights  Market development  Financials  Outlook  Appendix 10

  11. Slide 11: Market situation

    Market situation Unusual weather situation normalising in Q2 10 Rising hydro balance, but still below hist. avg. 30 20 Degrees Celcius Q1 10 Q2 10 Q3 10 25 10 20 15 0 10 5 Actual -10 0 TWh Norm -20 -5 -10 -30 -15 -20 -40 -50 Last 9 years range Median 2009 2010 Jan Feb Mar Apr May Jun Jul Aug Sep Oct

  12. Slide 12: Green Dark Spreads

    Green Dark Spreads Power prices (monthly average) EUR/MWh 100 90 80 Forward prices Green Dark Spread (monthly average) 70 EUR/MWh 60 80 50 40 60 Forward prices 30 40 20 10 20 0 0 2007 2008 2009 2010 2011 DK1 (west) DK2 (east) EEX Nordpool (system) -20 Source: Nord Pool, EEX, and Argus -40 2007 2008

  13. Slide 13: Oil prices and gas prices

    Oil prices and gas prices Stable oil prices (Crude oil) Gas prices stabilising (TTF) USD/bbl EUR/MWh 140 35 120 30 Forward price Forward price 100 25 80 20 60 15 40 10 20 5 0 0 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Source: Platts Source: Argus Relationship between oil and gas prices EUR/

  14. Slide 14: Agenda

    Agenda  DONG Energy highlights  Market development  Financials  Outlook  Appendix 14

  15. Slide 15: Selected Financial Figures

    Selected Financial Figures DKK million 9M 10 9M 09  EBITDA increased by 47% y/y due to: Revenue 38,490 35,791  Higher oil and power prices EBITDA 10,032 6,830  Increased production from new renewable assets Profit after tax 3,091 1,081  Positive effect from timing differences compared to Assets

  16. Slide 16: Exploration & Production

    Exploration & Production Higher oil and gas prices Operational Text box, Arial figures 16 bold Highlights  Gas and oil production decreased by 1% compared to the 9M 10 9M 09 year before Oil & gas production mboe 17.5 17.7  Gas production constituted 62% of total production in 9M - Oil production m

  17. Slide 17: Generation

    Generation Significantly higher green dark spreads Operational figures Highlights 9M 10 9M 09  Thermal production was on level with last year despite higher green dark spreads Power production GWh 13,723 12,731  Renewable production rose 54% due to contribution from - Thermal GWh 10,937 10,926 new

  18. Slide 18: Energy Markets

    Energy Markets Less negative time lag effects Operational figures Highlights  Gas sales increased 22% 9M 10 9M 09  Cold weather and low gas prices caused increased gas Gas sales GWh 88,346 72,121 sales in Denmark (including sales to own power plants) and to German Stadtwerke Power sales GWh 7,609

  19. Slide 19: Sales & Distribution

    Sales & Distribution Stable earnings Operational figures Highlights 9M 10 9M 09  Gas sales and distribution were up 15% and 11%, respectively, primarily due to the cold weather Gas sales GWh 17,179 14,881  Power sales down 5%, while power distribution Distribution of gas GWh 7,614 6,858 decreased

  20. Slide 20: Debt overview

    Debt overview Gross interest-bearing debt (incl. hybrid capital) Key ratios gross loan portfolio (incl. hybrid capital) DKKbn 60 9M 10 50 0.7 Share of fixed rate1 79% 1.5 0.7 8.1 Other gross debt Duration (years) 5.7 40 8.1 Mortgage loans Average time to maturity (years) 2 9.2 11.2 30 Hybrid Average

  21. Slide 21: Liquidity overview

    Liquidity overview Liquidity reserves – Figures Liquidity reserves – Policy DKKbn 9M 10 2009  Unchanged target to maintain a liquidity reserve of at Cash and cash equivalents 2.4 4.5 least EUR 1.5bn Securities 7.2 2.6  Liquidity reserves changed from EUR 1.5bn of RCF Liquid assets in total 9.6 7.1

  22. Slide 22: Market risks and hedging

    Market risks and hedging Main market risks Hedging Oil and gas price risk  E&P production and wholesale gas 2011 2012  On aggregate, long oil/gas Oil and Gas  A long gas position Almost Almost  An oil/gas spread position (long gas, short oil) 70% hedged 55% hedged  Hedging up to 5 years ahead 

  23. Slide 23: Agenda

    Agenda  DONG Energy highlights  Market development  Financials  Outlook  Appendix 23

  24. Slide 24: Outlook for 2010

    Outlook for 2010  Higher EBITDA in 2010 than previously expected Q3 update  EBITDA in Q4 10 to be positive, but lower than the quarterly average in 9M 2010 Market prices Current Expected at Realized, 12 expectation, H1 10 months 2009 11 Nov. 2010 19 Aug. 2010 (monthly (rest of year) average) Oil,

  25. Slide 25: Outlook for 2010

    Outlook for 2010  New assets and Ormen Lange expected to contribute a further DKK 1.0bn in 2010  Due to higher energy prices, timing differences are expected to be neutral to positive compared to negative in 2009 resulting in:  A better EBITDA for Energy Markets for 2010 EBITDA  A better EBITDA

  26. Slide 26: Q&A

    Q&A FOR FURTHER INFORMATION PLEASE VISIT OUR WEBSITE dongenergy.com/EN/Investor/ 26

  27. Slide 27: Agenda

    Agenda  DONG Energy highlights  Market development  Financials  Outlook  Appendix 27

  28. Slide 28: 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) of around through parent company – to avoid structural three times c

  29. Slide 29: Net debt calculation 9M 10

    Net debt calculation 9M 10 DKKbn 45 40.2 40 35 (2.4) 0.1 4.0 31.7 27.6 30 (7.2) (0.5) (1.3) 25 (1.3) 20 15 10 5 0 29

  30. Slide 30: Investments

    Investments Investments in 9M 10 Main gross investments in 9M 10 Cash flow from investment activities -13.5bn Wind activities: DKK 4.2bn Purchase of securities (add back) 3.2bn  Walney: DKK 2.7bn Minorities' share of investments (add back) 0.7bn  London Array: DKK 0.7bn Net investments -9.6bn  Gu

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