Orsted · OMXCOP:ORSTED
Orsted — DONG Energy — Investor Presentation (May 2016)
20 slides from Orsted's investor presentation, May 12, 2016
Slide 1: DONG Energy – Leading the Energy Transformation
Emphasise strong track record in building wind farms DONG ENERGY I N V E S T O R P R E S E N TAT I O N DONG Energy – LEADING THE ENERGY TRANSFORMATION April, 2016 12 May 2016 1
Slide 2: Important notice
Important notice THIS PRESENTATION IS BEING PROVIDED TO YOU SOLELY FOR The Company has not and does not expect to register any securities that it “believe”, “intend”, “estimate”, “expect”, “may”, “plan”, “should”, “could”, YOUR INFORMATION AND MAY NOT BE REPRODUCED OR may offer under the U.S. Securi
Slide 3: Intention to float announcement
Intention to float announcement DONG Energy confirms its intention to proceed with the next step towards an IPO and listing Barring unforeseen circumstances and subject to prevailing market conditions, the IPO could be launched for a listing in summer 2016 The intended IPO is expected to consi
Slide 4: Capital allocated to renewables
Capital allocated to renewables Gross CAPEX expected Expectation gross CAPEX Split 2016-2020, % DKK Bn Wind Power Danish utility1 Oil & Gas Growth engine Stable earnings & Cash generator 60-70 green conversion ~10-15% ~5-10% 21.2 18-21 18.7 ~80% 15.2 • Investments focused on DONG Energy’s differenti
Slide 5: Growing earnings and returns
Growing earnings and returns EBITDA ROCE (adjusted ROCE) WP DCS DKK Bn % 20-23 13-15% 9-11% 12-14% CAGR +8-11% 18.5 10.1% 16.4 15.0 7.6% 7.4% WP 13.7 10-12 4.8% 8.6 -3.3% 2011 2012 2013 2014 2015 2016 2011 2012 2013 2014 2015 2017- 2020 avg. 5
Slide 6: Directional business unit guidance for 2016-2017
Directional business unit guidance for 2016-2017 EBITDA, 2016-2017 Direction of expected development DKK Bn vs. previous year 20-23 Other business units WP BTP DCS O&G Higher Higher Significantly Neutral Lower 10-12 Wind Power (roughly split between sites and partnership gains) Business units ~3.5 L
Slide 7: Wind Power – continued earnings growth
Wind Power – continued earnings growth Strong Wind Power EBITDA growth from operating assets and Key commentary partnerships Wind Power EBITDA in 2016 and 2017 to Notwithstanding DONG Energy’s strong track-record in DKK Bn farm downs, the EBITDA outlook for 2016 and 2017 is be roughly evenly split
Slide 8: BTP – earnings driven by biomass conversions
BTP – earnings driven by biomass conversions EBITDA and directional guidance Direction of expected development Key commentary DKK Bn vs. previous year Heat EBITDA is expected to more than double from 2015 when the bio-conversions under construction are completed 2015 to 2016 0.3 Stable heat volume
Slide 9: DCS – earnings anchored in stable Power Distribution business
DCS – earnings anchored in stable Power Distribution business EBITDA and directional guidance Direction of expected development Key commentary DKK Bn vs. previous year 2015 to 2016 Renegotiations of long-term gas sourcing contracts with assumed receipt of DKK 3.5 Bn 2.3 Power Distribution and Sales
Slide 10: Oil & Gas – Lower volumes and prices partly offset by hedging
Oil & Gas – Lower volumes and prices partly offset by hedging EBITDA pre-HCT1 and directional guidance Direction of expected development Key commentary DKK Bn vs. previous year Overall oil and gas volumes to be lower throughout the period, despite the ramp-up of Laggan-Tormore, due to the reduced
Slide 11: Secured revenue through robust and highly visible offshore wind build-out plan until 2020
Secured revenue through robust and highly visible offshore wind build-out plan until 2020 3.7 GW with secured consent and subsidies currently under construction Borkum DONG Energy installed capacity projection towards 2020 Riffgrund 2 GW Hornsea 1 (448 MW) 6.7 (1,200 MW)1 0.4 Walney Extension 1&2 1.
Slide 12: Partnership model allows for significant portfolio value with less capital and reduced risk
Partnership model allows for significant portfolio value with less capital and reduced risk Significant up-front value realisation from Multiple portfolio benefits from partnership model partnership model Illustrative Pre-farm down Post-farm down (100% ownership) (50% ownership) Recycle capital Ca
Slide 13: Wind Power value drivers – Execution assets
Wind Power value drivers Key drivers1 Capacity Year Owner- Name (MW) commissioned ship Execution Assets2 Gode Wind 1 330 Q3 2016 50% 48-50% (weighted average) Load Factor Burbo Bank Extension is an outlier with lower than average expected load factor Gode Wind 2 252 Q3 2016 50% Primarily include BSU
Slide 14: Substantial growth options post-2020 with secured project rights in the UK, Germany and the U.S.
Substantial growth options post-2020 with secured project rights in the UK, Germany and the U.S. Pipeline options to date for 2021-2025 construction GW Auctions total: 8.1 GW Possible tenders total: 4.8 GW Possible pipeline options Exclusive project rights secured1 No exclusive rights available of >
Slide 15: Attractive and stable earnings in Power Distribution
Attractive and stable earnings in Power Distribution Stable earnings Increasing Regulated Asset Base5 6% Power Distribution EBITDA DKK Bn DKK Bn 13.7 10.4 10.8 10.7 1.3 1.2 1.1 2013 2014 2015 2020 2013 2014 2015 RAB (end of year) RAB forecast (end of year)6 % CAGR High profitability relative to peer
Slide 16: Resilient heat production business with a growing contribution from converted biomass plants
Resilient heat production business with a growing contribution from converted biomass plants Transformation of business model On track to meet ambitious biomass strategic target is well underway From To Conversion CHP (MWe/MWth)1 DONG Energy heat capacity per fuel type (MW, %) 1a Herning (77/150) St
Slide 17: Strong, low-cost asset portfolio centred around three high-quality, cash generative assets
Strong, low-cost asset portfolio centred around three high- quality, cash generative assets Low-cost, sizeable and well positioned portfolio Three attractive high-quality assets constituting ~75% of production in 2015 Focused North Western European footprint with more than 30 years of experience Cou
Slide 18: O&G business managed for cash – targeting positive free cash flow from 2017
O&G business managed for cash – targeting positive free cash flow from 2017 5 key pillars of O&G way forward Exploration and appraisal investments kept to a minimum Honour existing licensing commitments and support continued Implications optimisation of core assets Focus on building a leading O&G
Slide 19: Financial outlook, medium-term targets and policies
Financial outlook, medium-term targets and policies EBITDA outlook 2016 Return on capital employed (ROCE) targets Group DKK 20-23bn Group 12-14% Avg. 2017-2020 The outlook is particularly sensitive to timing of farm down gains in Wind Power and WP 13-15% Avg. 2017-2020 development in oil and gas p
Slide 20: DONG Energy – a clean energy growth story
DONG Energy – a clean energy growth story Key investment highlights 1 Global leader in the attractive offshore wind market 2 Differentiated competitive position from value chain integration and proven partnership model in offshore wind 3 Robust and highly visible offshore wind build-out plan deliver