Slide 1: Interim Results
Interim Results centrica
Slide 2: Disclaimer
Disclaimer This p presentation does not constitute an invitation to underwrite,, subscribe for,, or otherwise acquire or dispose of any Centrica shares or other securities. This presentation contains certain forward-looking statements with respect to the financial condition,, results,, operations p
Slide 3: Roger Carr, Chairman
Roger Carr Chairman S § = energy use ith centrica
Slide 4: Nick Luff, Group Finance Director
Nick Luff Group Finance Director energyuse with § = centrica
Slide 5: Commodity prices and spreads
Commodity prices and spreads 140 120 Power (£/MWh) 100 Oil ($/boe) 80 60 40 20 Gas (p/th) 0 2008 2009 2010 2011 60 £/MWh 50 40 30 Clean Dark Spread (£/MWh) 20 Clean Spark Spread (£/MWh) 10 0 2008 2009 2010 2011 5
Slide 6: Financial headlines
Financial headlines Period ended 30 June 2010 2009 CONTINUING OPERATIONS: Revenue (£m) 11,707 11,657 Adjusted operating profit (£m) 1,563 945 Effective tax rate 37% 39% GROUP RESULT: Earnings (£m) 886 537 Earnings per share (p) 17.2 10.5 Interim dividend per share (p) 3.84 3.66 Above figures Ab fi i
Slide 7: Operating profit analysis
Operating profit analysis Period ended 30 June (£m) 2010 2009 Downstream UK 842 472 Upstream UK 485 334 Storage UK 97 73 North America 139 66 ADJUSTED OPERATING PROFIT 1,563 945 Share of JV / associates’ interest and taxation (44) (3) Other - (6) Depreciation of FV uplifts to property, plant and equ
Slide 8: Operating profit analysis – Downstream UK
Operating profit analysis – Downstream UK Period ended 30 June (£m) 2010 2009 Downstream UK 842 472 Upstream UK 485 334 Storage UK 97 73 North America 139 66 ADJUSTED OPERATING PROFIT 1,563 945 Above figures Ab fi i l d joint include j i t ventures t and d associates i t stated t t d gross off inter
Slide 9: Downstream UK: operating profit & key drivers
Downstream UK: operating profit & key drivers Residential energy Period ended revenue (£m) & margin (%) 30 June (£m) 2010 2009 4 384 4,384 4 448 4,448 Residential energy 585 295 Residential services 109 112 13.2% Business 148 65 6.7% DOWNSTREAM UK 842 472 H1 2009 H1 2010 Residential services Busines
Slide 10: Operating profit analysis – Upstream UK
Operating profit analysis – Upstream UK Period ended 30 June (£m) 2010 2009 Downstream UK 842 472 Upstream UK 485 334 Storage UK 97 73 North America 139 66 ADJUSTED OPERATING PROFIT 1,563 945 Above figures Ab fi i l d joint include j i t ventures t and d associates i t stated t t d gross off interes
Slide 11: Upstream UK: operating profit & key drivers
Upstream UK: operating profit & key drivers Gas & oil production volumes Period ended Gas Liquids 30 June (£m) 2010 2009 (mmth) (mmboe) Upstream p gas g and oil 314 346 1,321 Power generation 127 43 I&C 46 (89) 939 6.0 Energy trading (2) 34 3.2 UPSTREAM UK 485 334 H1 2009 H1 2010 H1 2009 H1 2010 Pow
Slide 12: Operating profit analysis – Storage UK
Operating profit analysis – Storage UK Period ended 30 June (£m) 2010 2009 Downstream UK 842 472 Upstream UK 485 334 Storage UK 97 73 North America 139 66 ADJUSTED OPERATING PROFIT 1,563 945 Above figures Ab fi i l d joint include j i t ventures t and d associates i t stated t t d gross off interest
Slide 13: Operating profit analysis – North America
Operating profit analysis – North America Period ended 30 June (£m) 2010 2009 Downstream UK 842 472 Upstream UK 485 334 Storage UK 97 73 North America 139 66 ADJUSTED OPERATING PROFIT 1,563 945 Above figures Ab fi i l d joint include j i t ventures t and d associates i t stated t t d gross off inter
Slide 14: North America: operating profit & key drivers
North America: operating profit & key drivers Period ended Residential energy 30 June (£m) 2010 2009 Revenue (£m) Underlying Residential energy 110 46 margin (%)* underlying y gp performance 110 91 - (45) 8.0% one-off charges 1,454 1.369 Business energy 44 20 6.3% Services 8 3 Upstream & Wholesale (
Slide 15: Cash flow
Cash flow Period ended 30 June (£m) 2010 2009 FY 2009 OPENING NET DEBT (3,136) (511) (511) EBITDA 1,948 1,257 2,538 Working capital movements (337) (125) 419 Margin calls 410 (74) (79) Interest and tax (180) (379) (700) et cape Net capex (565) ((1,427) , ) ((4,072) , ) Dividends (470) (447) (635) Pe
Slide 16: Capital and acquisition expenditure
Capital and acquisition expenditure (£m) H1 2010 H1 2009 FY 2010e UK upstream gas 320 145 550 UK upstream power 65 73 250 North America 42 46 100 UK gas storage 31 30 50 Europe 6 49 - British t s Gas / ot other e 57 5 33 150 50 Total pre-acquisitions 521 376 1,100 Acquisitions / Disposals* 44 1,051
Slide 17: Summary and outlook
Summary and outlook Summary • Strong g financial and operational p p performance • Profit heavily weighted towards the first half • Strong downstream performance, reflecting improved service levels and customer growth growth, together with impact of lower commodity prices • Upstream production and g
Slide 18: Sam Laidlaw, Chief Executive
Sam Laidlaw Chief Executive energy use it h RS RS = = centrica
Slide 19: Overview
Overview • Strong first half result • Downstream: growth underpinned by customer service and pricing • Upstream: strong asset performance performance, but continued impact of lower commodity prices • Improved returns from North America downstream • Strategic priorities in place, focus on delivering
Slide 20: Our Strategic Priorities
Our Strategic Priorities 1 Grow British Gas . . . leading the transition to low carbon homes and businesses 2 Deliver value from our g growing g upstream p business . . . securing sustainable energy for our customers 3 Build an integrated North American business . . . with leading positions in dereg
Slide 21: Grow British Gas
Grow British Gas • Strong H1 residential energy performance driven by customer service and competitive pricing position • Service metrics remain strong – online transactions increased – call volumes and speed to answer down – further net promoter score improvements Telephone vs. online contact • On
Slide 22: Grow British Gas
Grow British Gas • Strong services operational performance Insurance penetration in Q1 during g record call out p period 100% 80% • Continued customer growth in secondary 60% products 40% • Almost 2m customers now on an 20% insurance based product 0 2009 H2 2010 H1 2010 H2e • Installation volumes up
Slide 23: Grow British Gas: Leading in the low carbon world
Grow British Gas Leading in the low carbon world • Creating national insulation coverage – 400 new jobs already filled • Leaders in CERT and CESP • Capabilities in biomass, heating, solar, fuel cell boilers, biomethane • Building momentum for early smart meter rollout – 100k meters installed Smart m
Slide 24: Deliver value from our growing upstream business - Gas
Deliver value from our growing upstream business - Gas • Successful integration of Venture – empowered decision making and clear accountability – comprehensive risk management programme in place • Development projects success – third well at Chiswick brought on stream; fourth well due shortly – Eris
Slide 25: Deliver value from our growing upstream business - Gas
Deliver value from our growing upstream business - Gas • Appraisal and exploration Cygnus field – Cygnus appraisal drilling of western area successful – exploration discoveries in Olympus, Fogelberg and Maria • Ten wells drilled to date – seven have shown positive results, including three exploratio
Slide 26: Deliver value from our growing upstream business - Power
Deliver value from our growing upstream business - Power • Excellent CCGT reliability in well Langage, 885MW supplied pp market • Langage in full commercial operation • Completed JV agreement for Lincs – contracts awarded and onshore works commenced • British Energy output impacted by Sizewell B out
Slide 27: Deliver value from our growing upstream business - Storage
Deliver value from our growing upstream business - Storage • Excellent operational performance • Record winter demand demand, supported by bcf Historical Analysis (2005-2010) enhanced withdrawal and injection 140 capabilities at Rough 120 • Narrowing summer / winter spreads 80 • Caythorpe 60 – short
Slide 28: Build an integrated North American business
Build an integrated North American business • New management team in place Aim to double operating profit • Encouraging initial progress against over next 3-5 3 5 years strategy • Strong returns downstream, in excess of cost of capital • Acquisition of Clockwork achieves services scale and provides
Slide 29: Build an integrated North American business
Build an integrated North American business • Residential energy supply – reduced churn in Texas – reduced operating cost base and lower debt levels; prepayment launched – focus on customer quality and growth in US N th E North Eastt – Ontario legislation – cost reduction and retention programme in
Slide 30: Build an integrated North American business
Build an integrated North American business Services market share 100% Clockwork Home Services acquired Major/ National Other for US$182m ((£122m)) 80% Large Reliance Local Sears • Scale achieved in cost effective way Dwyer 60% – market leading services position AHS – lower procurement costs 40% Sma
Slide 31: Summary
Summary • Strong g start to the yyear • Good progress on strategic priorities • Strong cash generation combined with financial discipline • Optionality in investment programme • Balanced business able to grow in both high and low commodity price environment • Leading in a low carbon world 31
Slide 32: energy use with
energy use with s = centrica