Slide 1: ASX cover note: Investor Presentation for Half Year Results
To Company Announcements Of f ice Facsimile 1300 135 638 Company ASX Limited Date 15 February 2024 From Helen Hardy Pages 61 Subject Investor Presentation for Half Year Results Please f ind attached the investor presentation relating to Origin Energy’s Results f or the half year ended 31 December 20
Slide 2: 2024 Half Year Results
Origin Energy For personal use only 2024 Half Year Results Year ended 31 December 2023 Frank Calabria, CEO & Lawrie Tremaine, CFO 15 February 2024
Slide 3: Outline
Outline For personal use only 1. Introduction - Frank Calabria 2. Financial Review - Lawrie Tremaine 3. Operational Review - Frank Calabria 4. Outlook - Frank Calabria 2 15 February 2024 • 2024 Half Year Results Announcement
Slide 4: Introduction
For personal use only Introduction Frank Calabria, CEO
Slide 5: Origin is a unique energy transition value proposition
• Origin is a unique energy transition value proposition For personal use only − Energy Markets – retail scale and capability, flexible generation portfolio and growth from emerging businesses and transition investment − Octopus Energy – world-class enterprise software and energy transition business
Slide 6: Financial highlights
Financial highlights For personal use only Statutory Profit Underlying Profit Underlying EBITDA $995 $747 $1,995 million million million Up from $399 million in HY2023 Up from $44 million in HY2023 Up from $1,059 million from HY2023 Adjusted Net Debt / Adjusted Origin ROCE (pre-tax)1 Interim Dividen
Slide 7: Our ambition and strategy
Our ambition and strategy For personal use only Our ambition To lead the energy transition through cleaner energy and customer solutions Unrivalled customer Accelerate renewable Deliver reliable energy solutions and cleaner energy through the transition Our • Leading brand providing lowest cost • Ac
Slide 8: Executing on our strategy
Executing on our strategy For personal use only Ambition Achieved as at 31 Dec 2023 $200 - $250 million cost savings (FY2025 vs FY2018) In benefit realisation phase, facing cost headwinds Octopus 100 million licensed Kraken accounts (2027) 51 million contracted Kraken customer accounts Unrivalled >1
Slide 9: Energy Markets – retail scale & capability, flexible generation and growth
Energy Markets – retail scale & capability, flexible generation and growth For personal use only • Leading Australian energy retail business with scale, strong brand and leading Kraken Retail enterprise software • Growth opportunities: VPP, Origin Zero, Community Energy Services and Broadband • Unde
Slide 10: Retail – scale, strong brand and leading Kraken enterprise software
Retail – scale, strong brand and leading Kraken enterprise software For personal use only Recognised brand, Leading platform and Delivering benefits today, leading scale & capability operating model more underway Customer accounts (‘000) Customer accounts migrated (m) Monthly Customer Happiness Inde
Slide 11: Flexible generation portfolio with value accretive growth opportunities
Flexible generation portfolio with value accretive growth opportunities For personal use only Pre-eminent thermal peaking fleet Pipeline of value accretive Origin Loop (VPP) will create value through transition battery opportunities low capital growth opportunity Thermal peaking fleet in the NEM (MW
Slide 12: Changing market delivers increased value to flexible generation
Changing market delivers increased value to flexible generation For personal use only NSW average capacity forward Increased intra-day volatility Higher frequency of negative prices prices Average energy price (NSW) % of half hour negative price periods (NSW) $/MWh 400 $/MWh 30% 30 300 20% 20 200 10
Slide 13: Increased stake in fast growing Octopus Energy
Increased stake in fast growing Octopus Energy For personal use only Exceptional retail growth Exceptional Kraken growth Value appreciation Customer accounts (m) 60 Customer accounts (m) 7 Post money valuation (£bn) 14 Equity raising benchmark 12 6 50 10 5 40 8 4 30 6 3 20 4 2 10 1 2 - - - Octopus E
Slide 14: High quality APLNG resource reliably delivering robust cash flows
High quality APLNG resource reliably delivering robust cash flows For personal use only High quality resource Strong cashflow APLNG Reserves and cumulative production (PJ)1 24,000 2,000 200 20,000 1,500 150 16,000 1,000 100 A$/bbl 12,000 $m 500 50 8,000 4,000 - - - (500) FY19 FY20 FY21 FY22 FY23 Jun
Slide 15: Supporting our customers and communities
Supporting our customers and communities For personal use only Our Customers Our Communities ✓ We shielded customers in our Power On hardship program from ✓ >$1.4 million contributed by the Origin Energy Foundation in the July 2023 price increases HY2024 ✓ Spending up to $45 million in FY2024 to pro
Slide 16: Financial Review
For personal use only Financial Review Lawrie Tremaine, CFO
Slide 17: Underlying Profit up $703 million to $747 million
Underlying Profit up $703 million to $747 million For personal use only Movements in Underlying Profit ($m) 5 6 47 296 (285) (179) 813 747 44 HY23 EM Share of Octopus IG - Share of IG - Other Corporate D&A Tax/other HY24 EBITDA Energy profit APLNG profit EBITDA EBITDA Recovery of Increase in higher
Slide 18: Cash generation impacted by working capital build
Cash generation impacted by working capital build For personal use only ($m) HY24 HY23 Change Underlying EBITDA, adj for non-cash 1,183 35 1,148 • Energy Markets’ impacts (-$625 million): Change in working capital (791) (757) (34) − Higher receivables (~$260 million) due to higher bill sizes Futures
Slide 19: APLNG cash distribution remains strong in weaker commodity price environment
APLNG cash distribution remains strong in weaker commodity price environment For personal use only APLNG distribution and Origin oil, gas and FX hedging Distribution inclusive of 2,000 0.6 1.3 0.8 1.4 1.5 1.2 – 1.41 200 hedging (A$bn) • H1 distribution of $648 million and Origin hedge gains of $9 mi
Slide 20: Capital allocation framework refined with deleverage
Capital allocation framework refined with deleverage For personal use only Leverage is very low but expected to return to lower Operating Cash Flow APLNG Distribution end of target range with planned capital investment Investment in batteries, Octopus and retail growth prioritised for on balance she
Slide 21: Energy Markets Underlying EBITDA up $813 million to $1,044 million
Energy Markets Underlying EBITDA up $813 million to $1,044 million For personal use only Movements in Underlying EBITDA ($m) 10 (92) (15) Electricity gross profit up $911 million to $950 million • Recovery of higher wholesale prices flowing into retail and business customer tariffs (+$507 million) 9
Slide 22: Share of Octopus Energy
Share of Octopus Energy For personal use only Movements in Underlying EBITDA ($m) 11 (11) UK Retail (27) • Earnings positive business, second half earnings higher due to seasonal (12) demand • HY2023 impacted by under-recovery from tariff-lagging wholesale prices 98 (83) • HY2024 impacted by higher
Slide 23: Integrated Gas Underlying EBITDA up 5%
Integrated Gas Underlying EBITDA up 5% For personal use only Share of APLNG EBITDA down $249 million: 90 30 • Lower LNG price ($349 million), primarily driven by lower realised oil 349 266 prices of US$84/bbl (A$128/bbl) vs US$109/bbl (A$164/bbl) in HY2023 79 89 -$338 million • Lower domestic revenu
Slide 24: Operational Review
For personal use only Operational Review Frank Calabria, CEO
Slide 25: Energy Markets
For personal use only Energy Markets
Slide 26: Electricity margin recovery driven by tariffs repricing and lower cost of energy
Electricity margin recovery driven by tariffs repricing and lower cost of energy For personal use only Electricity prices Coal prices 250 NSW electricity forward price ($/MWh) 700 A$/t 600 200 500 150 FY2024 400 FY2025 100 300 FY2023 200 50 100 - - Forward swap price Newcastle 5500 kcal Newcastle 60
Slide 27: Gas margin underpinned by strong supply portfolio
Gas margin underpinned by strong supply portfolio For personal use only Gross profit Contracted gas supply 8 A$/GJ PJ 250 200 6 150 4 100 2 50 - - H1 H2 H1 H2 H1 FY23 FY24 FY25 FY26 FY27 FY28 APLNG legacy contract 1 Fixed Price1 FY22 FY23 FY24 FY24 Price review/market Oil-linked JKM-linked Contracte
Slide 28: Strong retail competitive advantage built
Strong retail competitive advantage built For personal use only Exceptional Customer Experience Leading Brand Strong Channels Monthly Customer Happiness Index score Trustpilot ratings1 % of sales using third party channels 75 post migration to Kraken 70 4.6 14% 4.0 12% 65 2.9 6% 60 Origin Average Ti
Slide 29: Consistent strong growth and loyal customer base in Retail
Consistent strong growth and loyal customer base in Retail For personal use only Large and growing customer base Lowest churn Customer accounts (‘000) Quarterly churn rate (%) 30% 2.9% CAGR 4,525 4,580 4,459 20% +9 4,266 +6 4,181 +5 10% - Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec QTR QTR QTR QTR QTR Q
Slide 30: Scaling up growth opportunities
Scaling up growth opportunities For personal use only Community Energy Services Broadband Gross Profit ($m) Customer accounts (‘000) 140 100 Customer accounts (‘000) 457 500 124 442 413 120 403 400100 96 292 74 300 80 61 50 60 46 78 200 70 71 40 54 44 100 20 0 0 0 H1 H2 H1 H2 H1 H1 H2 H1 H2 H1 FY22
Slide 31: New retail business operating with benefit realisation underway
New retail business operating with benefit realisation underway For personal use only Cost to Serve and Retail Capex • Completed migration for mass market customers to Kraken ($m) 800 − New operating model embedded − Improved customer experience • Subsequent stabilisation phase now complete with foc
Slide 32: In house VPP (Loop) – scaling up with demonstrated value proposition
In house VPP (Loop) – scaling up with demonstrated value proposition For personal use only Significant growth profile Being smarter with energy demand 2,500 2500 Assets connected to VPP (MW) Illustrative electric hot water heating profile Illustrative electric vehicle charging profiles 2 300 2,000 2
Slide 33: Origin Zero – accelerating large business customers to net zero
Origin Zero – accelerating large business customers to net zero For personal use only Large business customers on Large business customer EVs under management broader services MWs on VPP 8% 0.08 300 Assets connected (MW) 300 1,000 # of EVs 1000 250 250 800 800 6% 0.06 200 200 600 600 4% 0.04 150 150
Slide 34: Octopus Energy
For personal use only Octopus Energy
Slide 35: Leading brand and service excellence strengthens competitive advantage
Leading brand and service excellence strengthens competitive advantage For personal use only Outstanding customer satisfaction Strong and trusted brand Customer wins NPS # of net customer wins (m) 30 2.0 20 1.5 10 - 1.0 (10) 0.5 (20) (30) - Octopus British Gas EDF Ovo 2021 2022 2 2023 Source: UK Con
Slide 36: Leading enterprise software platform a key enabler for the energy transition
Leading enterprise software platform a key enabler for the energy transition For personal use only Kraken Core Kraken Flex Contracted customer accounts (m) Smartflex devices connected (000’s) Infraflex capacity (GW) 60 120 7 50 6 5 40 80 4 30 3 20 40 2 10 1 - - - Contracted Kraken customer accounts
Slide 37: Scaling International Retail and Services businesses
Scaling International Retail and Services businesses For personal use only International Retail Services Customer accounts (‘000) # 1,000 2,500 25,000 2,500 2,000 20,000 2,000 800 57% CAGR 1,500 15,000 1,500 600 1,000 1,000 10,000 400 500 5,000 500 200 - - H1 H2 H1 H2 H1 FY22 FY23 FY24 - Jun-22 Dec-
Slide 38: Integrated Gas
For personal use only Integrated Gas
Slide 39: Sustained strong production
Sustained strong production For personal use only Stable production from quality assets over long term Production recovery APLNG production (100%) (PJ) Daily operated production Operated production record of 1,632TJ/day in 400 1,700 December 350 1,600 300 1,500 250 1,400 Sustained daily 200 1,300 op
Slide 40: Revenue down driven by lower average oil prices on export contracts
Revenue down driven by lower average oil prices on export contracts For personal use only Commodity Prices Revenue Costs A$/GJ 8000 $m $m Capex + Opex2 $/GJ 60 3,000 5.0 50 6000 2,500 4.0 40 2,000 3.0 30 4000 1,500 2.0 20 1,000 2000 10 1.0 500 - 0 - - H1 H2 H1 H2 H1 H1 H1 H2 H1 H2 H1 FY19 FY20 FY21
Slide 41: Continued focus on short cycle, low-cost supply initiatives
Continued focus on short cycle, low-cost supply initiatives For personal use only Lowest cost / Optimise existing ✓ Continued focus on optimising well performance, wells with artificial lift pumps operating improved 8% Short cycle HY24 v HY23, and further reductions of well flowing bottomhole pressu
Slide 42: Regulatory certainty under the Gas Market Code
Regulatory certainty under the Gas Market Code For personal use only APLNG domestic sales • APLNG continues to play an important role in providing PJ secure gas supply to customers on Australia’s East Coast 200 25.00% • Domestic sales volume remains consistent as a percentage of total sales 160 20.0
Slide 43: Outlook
For personal use only Outlook Frank Calabria, CEO
Slide 44: Improved Guidance – Energy Markets and Octopus Energy
Improved Guidance – Energy Markets and Octopus Energy For personal use only The following guidance is provided on the basis that market conditions and the regulatory environment do not materially change FY2024 • Energy Markets EBITDA is expected to be $1,600 – $1,800 million, excluding Octopus Energ
Slide 45: Guidance – Integrated Gas
Guidance – Integrated Gas For personal use only The following guidance is provided on the basis that market conditions and the regulatory environment do not materially change Integrated Gas - APLNG 100% FY2023 FY2024 guidance Production PJ 674 680 – 710 Capex and opex, excluding purchases1 A$b 2.6 2
Slide 46: Appendix
For personal use only Appendix
Slide 47: Items excluded from Underlying Profit
Items excluded from Underlying Profit For personal use only Reconciliation from Statutory to Underlying Profit ($m) • $477 million reversal of prior APLNG impairment • $97 million business restructuring, (43) including costs relating to the (3) (477) proposed takeover ($50 million post 184 tax), and
Slide 48: Capex
Capex For personal use only Origin capex ($m) HY2024 Capex 400 • Generation sustain: Eraring Unit 2 maintenance outage ($61 million), Eraring Ash Dam ($18 million) Mortlake major inspection ($26 million) 300 • Other sustaining capital: LPG, CES and other assets 200 • Productivity/growth: Eraring Bat
Slide 49: Large-scale Generation Certificates strategy – refund of shortfall charge
Large-scale Generation Certificates strategy – refund of shortfall charge For personal use only LGC strategy benefit $/certificate • Over FY2021 to FY2023, we deferred the surrender of ~9 million 80 certificates, incurring a shortfall charge of $65/certificate or $602 million in total 70 • This shor
Slide 50: Large-scale Generation Certificates (LGC) strategy
Large-scale Generation Certificates (LGC) strategy For personal use only Adjustments to Statutory Profit Statutory Shortfall CY2020 CY2021 CY2022 Underlying Impact across various financial years ($m) Profit charge/(refund) surrender cost surrender cost surrender cost Profit FY2021 CY2020 and CY2021
Slide 51: Customer account movements
Customer account movements For personal use only Electricity ('000) 31 December 30 June 10 Customer accounts ('000) as at Change 2023 2023 5 Electricity 2,752 2,742 10 Business 28 28 (1) - Retail – Mass Market 2,531 2,528 3 (5) Retail – Community Energy Services 193 185 8 (10) NSW QLD VIC SA Gas 1,2
Slide 52: Electricity forward price by State ($/MWh)
Electricity forward price by State ($/MWh) For personal use only 250 NSW 250 QLD 200 200 150 150 100 100 50 50 - - May-21 Sep-21 Jan-22 May-22 Sep-22 Jan-23 May-23 Sep-23 Jan-24 250 SA 200 VIC 200 150 150 100 100 50 50 - - May-21 Sep-21 Jan-22 May-22 Sep-22 Jan-23 May-23 Sep-23 Jan-24 Source: AEMO/B
Slide 53: Energy Markets segment revenue reconciliation
Energy Markets segment revenue reconciliation For personal use only The table below reconciles the difference between segment revenue and customer revenue disclosed in the Electricity, Natural Gas, LPG, Solar & Energy Services and Future Energy tables. HY24 HY23 Change Change ($m) ($m) ($m) (%) Ener
Slide 54: Managing oil price exposure
Managing oil price exposure For personal use only FY2024 FY2024 Oil Price Sensitivity • Origin share of APLNG JCC oil price and JKM gas price exposure is ~17 MMboe and ~21 tBtu 95 Effective Oil Price US$/bbl 90 • As at 5 February 2024, we estimate that 84 per cent of JCC and 57 per cent of JKM 85 FY
Slide 55: Segment summary
Segment summary For personal use only Energy Markets Share of Octopus Integrated Gas Integrated Corporate Total Energy - Share of APLNG Gas - Other ($m) HY24 HY23 HY24 HY23 HY24 HY23 HY24 HY23 HY24 HY23 HY24 HY23 Underlying EBITDA 1,044 231 (12) (83) 944 1,193 57 (239) (38) (43) 1,995 1,059 Underlyi
Slide 56: Underlying ROCE – month rolling
Underlying ROCE – 24 month rolling For personal use only 31 December 2023 31 December 2022 Change Change As at ($m) ($m) ($m) (%) Capital Employed Net Assets 9,236 8,679 557 6% Adjusted Net Debt 3,177 3,280 (103) (3%) Net derivative (asset)/liability (144) (1,198) 1,054 (88%) Origin's share of APLNG
Slide 57: Reconciliation of Adjusted Net Debt
Reconciliation of Adjusted Net Debt For personal use only Issue Issue Hedged Hedged AUD $m AUD $m AUD $m $m Currency Notional Currency Notional Dec-23 Dec-23 Dec-23 Interest bearing Debt & CCIRS FV Adjusted net debt liabilities2 adjustments AUD debt AUD 1,026 AUD 1,026 1,017 1,017 USD Debt left in U
Slide 58: Financial Instruments and fair value adjustments
Financial Instruments and fair value adjustments Balance Sheet Impact Income Statement Impact For personal use only Financial asset/(liability) Pre-tax Post-tax Gain/(loss) Inc/(dec) in Inc/(dec) in Gain/(loss) Gain/(loss) Total inc/(dec) included in financial other net excluded from excluded from (
Slide 59: Important notices
Important notices For personal use only Forward looking statements This presentation contains forward looking statements, including statements of current intention, statements of opinion and predictions as to possible future events. Such statements are not statements of fact and there can be no cert
Slide 60: Important notices
Important notices For personal use only All figures in this presentation relate to businesses of the Origin Energy Group (Origin, or the Company), being Origin Energy Limited and its controlled entities, for the reporting period ended 31 December 2023 (the period) compared with the reporting period
Slide 61: For more information
For more information For personal use only Peter Rice General Manager, Capital Markets Email: peter.rice@originenergy.com.au Office: +61 2 8345 5308 Mobile: + 61 417 230 306 Lindsay Donnelly Group Manager, Investor Relations Email: lindsay.donnelly@originenergy.com.au Office: +61 2 8345 5502 Mobile: