Orsted · OMXCOP:ORSTED
Orsted — DONG Energy — Investor Presentation (February 2017)
18 slides from Orsted's investor presentation, Feb 2, 2017
Slide 1: Strategic Progress
STRATEGIC PROGRESS Henrik Poulsen, CEO Meet the Management, 2 February 2017 5
Slide 2: Henrik Poulsen
Henrik Poulsen President and Wind Power Chief Executive Officer • Joined DONG Energy in 2012 Distribution & Customer Solutions • Prior to DONG Energy, Henrik was President and CEO of TDC (also at the DONG Energy time of IPO) and, before that, Operating Executive at KKR and EVP, Markets & Bioenergy &
Slide 3: Strong profit performance in 2016
Strong profit performance in 2016 EBITDA, DKKbn +39% 24-25 25.6 20-23 6.5 18.5 16.4 9.8 8.6 19.1 7.8 8.7 2014 2015 Original guidance, Revised guidance, Actual 2016 Feb. 2016 Dec. 2016 Oil & Gas Continuing operations 7
Slide 4: 2016 was a very good year
2016 was a very good year EBITDA Adjusted ROCE Net profit Free cash flow DKKbn1 %1 DKKbn1 DKKbn1 5.4 24.4% -3.2 19.1 12.2 8.7 1.0 5.9% 2015 2016 2015 2016 2015 2016 2015 2016 Renewable share of Customer satisfaction Safety performance Employee satisfaction generation Scale (1-100) LTIF1,3 Scale (1-1
Slide 5: Strong progress on strategic agenda in 2016: Wind Power milestones
Strong progress on strategic agenda in 2016 2016 Wind Power milestones Borkum Riffgrund Hornsea 1 FID 2 FID 2020 target - on Borssele 1&2 track towards tender win/FID 6.7 GW Burbo Bank Ext. Race Bank 50% 50% farm down farm down 8 MW turbine Gode Wind 1&2 deployment commissioning Hornsea 2 1 GW US pr
Slide 6: Strong progress on strategic agenda in 2016: Utility milestones
Strong progress on strategic agenda in 2016 2016 Utility milestones REnescience Supplier-centric Northwich plant model FID implemented DKK 4.3bn from Gas distribution renegotiated gas assets divested contracts Studstrup CHP Avedøre 1 CHP biomass converted biomass converted 10
Slide 7: Strong progress on strategic agenda in 2016
Strong progress on strategic agenda in 2016 2016 Oil & Gas milestones Successfully Reduced total cash restructured Oil & spend by 38% vs. Gas business 2015 First gas from Terminated Hejre Laggan-Tormore in its original form Divested Trym, Decided to initiate Ula, Tambar and Oil & Gas exit Oselvar fi
Slide 8: Oil & Gas exit process on track
Oil & Gas exit process on track Exit process going as planned Potential scenarios • Instant liquidity • Path to liquidity Shareholder value and access to liquidity are the key evaluation criteria Expect to complete transaction in 2017 12
Slide 9: DONG Energy is continuously optimising the portfolio
DONG Energy is continuously optimising the portfolio Business mix transformed Operating profit doubled ROCE increasing Earnings quality increasing Share of capital employed (DKKbn)1 EBITDA (DKKbn)1 Adjusted ROCE (%)1 Share of regulated EBITDA (%)1,2 100% 100% 30 x2 7% 81 25 20 22% 56% 58 52% 15 16%
Slide 10: Early shift towards renewables drives strong shareholder returns
Early shift towards renewables drives strong shareholder returns 2015 generation from new renewables in % of total power generation1 100% 49%2 34% 31% 6% 5% 24% 17% 5% 4% 3% 2% 2% Total shareholder return, (29 Nov 2013 to 31 Jan 2017) 143% 54% 14% 42% 11% 31% 36% 5% -35% -22% -21% -53% -58% Peer 1 P
Slide 11: Significant momentum behind move to green energy
Significant momentum behind move to green energy Global power generation (TWh) 2016 offshore wind 33,080 investments reached USD Biomass 30 Bn, up 40% Y-o-Y Solar PV 11% 28,169 28% 5% 23,726 8% 16% Wind 13% 9% 15% 14% 16% 12% 11% 11% 1% 3% 1% 21% 17% 24% 37% 35% 29% 2016 2025 2035 Coal Gas Oil Nucle
Slide 12: DONG Energy's strategic direction remains clear
DONG Energy’s strategic direction remains clear Group Wind Power • Lead the market in the Fuel global market leadership and profitable growth – ambition of transition to sustainable 11-12 GW capacity by end of 2025 energy • Compete from market Utility leading positions and grow through innovation Tr
Slide 13: Return targets extended towards 2023
Return targets extended towards 2023 Average ROCE target 2017-2023 13-15% 12-14% 9-11% Group Wind Power Distribution & Customer Solutions 17
Slide 14: Significant pipeline of post 2020 opportunities
Significant pipeline of post 2020 opportunities DONG Energy Upcoming auctions and tenders pipeline options towards 2025 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Ambition Strategic markets • 11-12 GW capacity >9 GW pipeline options 1st German 2nd UK CfD US Massa- Taiwan EIA2 2nd German 3rd UK CfD by end of 2025 A
Slide 15: DONG Energy well positioned in competitive offshore wind market
DONG Energy well positioned in competitive offshore wind market Offshore wind cost (EUR/MWh)1 DONG Energy competes from a strong position • Most capacity installed with 3.6 GW completed • Largest operator with >1,000 turbines in operation • Largest pipeline of projects under construction • Solid tra
Slide 16: Bioenergy & Thermal Power on track towards zero coal
Bioenergy & Thermal Power on track towards zero coal Biomass conversions well under way to support Continued decarbonisation of portfolio with new zero coal from 2023 ambitious target DONG Energy fuel composition (%)1 Carbon emissions from heat and power generation (CO2e g/kWh) 100% 100% 100% 462 3%
Slide 17: Targeted key milestones in 2017
Targeted key milestones in 2017 Wind Power • Commissioning of Burbo Bank Extension • Walney Extension farm down • German auction • Taiwan EIAs1 • UK auction • First power on Race Bank • Massachusetts auction • First power on Walney Extension Utility • Commissioning of Skærbæk conversion • Commission
Slide 18: Our mission
Our mission “To develop and enable energy systems that are green, independent and economically viable” 22