Orsted · OMXCOP:ORSTED
Orsted — DONG Energy — Investor Presentation (February 2017)
17 slides from Orsted's investor presentation, Feb 2, 2017
Slide 1: Financial Modelling
FINANCIAL MODELLING Marianne Wiinholt, CFO Meet the Management, 2 February 2017 123
Slide 2: DONG Energy guidance 2017
DONG Energy guidance 2017 Guidance 2017 (Continuing operations) Underlying growth in EBITDA (Continuing operations) EBITDA CAPEX DKKbn 15-17 18-20 19.1 DKKbn DKKbn Lump sum 15-17 payments 4.300 EBITDA direction FY 2017 vs. FY 2016 Gas Distribution ~0.4 WP BTP DCS O&G 8.7 7.8 One- One- offs ~1.3 offs
Slide 3: Wind Power – Higher EBITDA in 2017
Wind Power – Higher EBITDA in 2017 Directional guidance 2017 vs. 2016 EBITDA development Higher EBITDA DKKm 11,867 Going forward • Sites incl. O&Ms and PPAs 5,869 • Increased earnings driven by commissioning of Burbo Bank Extension and increased contribution from Gode Wind 1&2 6,151 as a result of g
Slide 4: Wind Power – Development in EBITDA from Sites
Wind Power – Development in EBITDA from Sites Key commentary Regime overview for production capacity1, end of period, GW, Production capacity • Production capacity expected to increase by 29% in 2018, 3.5 7% in 2019, and 67% from 2017-2020 0.7 2.9 • Less than 5% of power generation will be out of su
Slide 5: Race Bank transaction
Race Bank transaction Estimation of construction and divestment gain based on company announcement and previous IPO guidance Race Bank divestment 50% Partnership modelling considerations Divestment case, GBP and DKK • Divestment and construction gains can roughly be estimated based on company 286.5
Slide 6: Generic farm down UK wind farm
Generic farm down UK wind farm Illustrative example - Valuation of investment and divestment case Project valuation at FID (100%) Partnership transaction (50% divestment) Valuation of investment and DKKbn divestment case 1,000 MW 500 MW • DONG Energy brings in partners at around its cost capital • N
Slide 7: Wind Power – Upcoming farm downs
Wind Power – Upcoming farm downs Expected timing of farm downs Walney Extension Borkum Riffgrund 2 (capacity 659 MW) (capacity 450 MW) Farm down expected in 2017 Farm down expected in 2018 Hornsea 1 Borssele 1&2 (capacity 1,200 MW) (capacity 700 MW) Undecided Undecided 129
Slide 8: Bioenergy & Thermal Power
Bioenergy & Thermal Power Directional guidance 2017 vs. 2016 EBITDA development Higher EBITDA. We assume combined heat and power EBITDA DKKm to improve compared to FY 2016 283 Going forward 346 • EBITDA from our district heating activities expected to more 100 than double compared to DKK 346m in 201
Slide 9: Distribution & Customer Solutions
Distribution & Customer Solutions Directional guidance 2017 vs. 2016 EBITDA development Significantly lower EBITDA. Also significantly lower underlying (underlying DKKm EBITDA of DKK 2.4bn in 2016) 7,108 Going forward 385 • Power Distribution and Sales expected to remain stable 1,217 • Regulated pow
Slide 10: Oil & Gas – Discontinued operations
Oil & Gas – Discontinued operations Directional guidance 2017 vs. 2016 EBITDA development Lower EBITDA DKKm Going forward 9,754 • Lower production due to natural decline, divestment of five Norwegian assets and last catch-up volume received from 1,345 Ormen Lange in Q1 2016 • Restructuring and refoc
Slide 11: Net finance costs
Net finance costs Key commentary FINANCIAL INCOME AND EXPENSES, DKKm 2016 Main drivers Net finance costs in 2017 to be impacted by: Interest expenses, net -402 • Reduced gross debt end-of-2016 at DKK - Interest income from cash etc. 49 Cash 25.1bn - Interest income from securities at fair value 420
Slide 12: Tax overview
Tax overview Key commentary TAX AND TAX RATE, DKKm Profit Tax Tax Our effective tax rate is expected to be close to a weighted before tax here of % average of the ordinary statutory tax rates for Denmark (22%), the UK (18%) and Germany (30%), excluding tax-exempt gains on Gain (loss) on divestments
Slide 13: 135
135
Slide 14: Appendix
Appendix 136
Slide 15: Tax on farm down gains
Tax on farm down gains Principal tax effect from farm down SPA Wind Power Investor 50% 50% ownership ownership OpCo Construction Agreement / Construction Management Agreement • Wind Power divests 50% of ownership in OpCo holding project rights • Wind Power builds and sells operating wind farm to OpC
Slide 16: Danish International Joint Taxation
Danish International Joint Taxation Danish International Joint Taxation • The rules on Danish international joint • Since 2005, the Group has chosen to use taxation only result in a postponement of Danish rules on international joint the tax payable in Denmark and will thus taxation, which are tax r
Slide 17: O&G Unrecognised Tax Assets
O&G Unrecognised Tax Assets The below table indicates the off balance sheet tax assets in O&G. UNRECOGNISED TAX ASSETS, DISCONTINUED OPERATIONS (DKKbn) 2016 Denmark, hydrocarbon income (Chapter 3A of DHTA), tax base 17.9 Denmark, hydrocarbon income (Chapter 2 of DHTA), tax base 3.4 The UK, hydrocarb