Origin Energy Limited · ASX:ORG
Origin Energy — Investor Presentation (September 2003)
34 slides from Origin Energy's investor presentation, Sep 22, 2003
Slide 1: Presentation to Investment Institutions
Origin energy To Company Announcements Office Facsimite 1300 300 021 Company Australian Stock Exchange Limited Date 22 September 2003 From Bill Hundy Pages 34 Subject PRESENTATION TO INVESTMENT INSTITUTIONS Please find attached a copy of a presentation that Managin: g¢ Director, Mr Grant King and Ex
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Slide 3: Overview
« Overview - Australian energy market - Origin Energy « Financial Performance and Outlook ¢ Opportunities for Further Development « Appendix - Full Year Results Announcement - August 2003 Origin
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Slide 5: A growing market and a growing company
End use sales of electricity, gas, and related products and services in Australia exceeds A$32 billion per annum and has been growing steadily as energy consumption increases. A GROWING MARKET + Growth in domestic demand for energy has averaged over 4% per annum over the last 20 years even through t
Slide 6: Origin's strategy is to focus on the competitive segments of the energy market
Origin’s strategy is to focus on the competitive segments of the energy market and pursue opportunities characterised by the ability to: * Develop sustainable competitive advantage « Identify additional value through operational or strategic synergies « Establish internal hedges against other exposu
Slide 7: Effective implementation of strategy has resulted in strong growth
The effective implementation of this strategy has resulted in strong growth in the company’s operations and profits 2,500 22 2P Reeves (PJe) Customers (millions) 2,000 4 UI 2.04 : P ° EBITDA by Segment (AS, millions) up 67% 1,500 500 =a 4.8 450 4 1.6 5 1,000 400 5 3504 144 500 300 4 250 4 1.2 4 0 20
Slide 8: Growth reflected in increased share price since listing
The growth in Origin’s operations and profits is reflected in the increased share price since Origin was first listed in February 2000 following the demerger from Boral $5.00 $4.50 4 Origin Energy Share Price (A$) . $1.00 $0.50 4 $0.00 $4.00 4 $3.50 4 $3.00 4 $2.50 4 $2.00 4 $1.50 4 Origin Energy Sh
Slide 9: Liquidity has also increased significantly
Liquidity has also increased significantly A$ millions traded per 3 months Page 8 Origin Energy Liquidity over 3 month intervals In the last 6 months 35% of the stock has turned over, and 67% in the last year (on a volume basis) Daily average turnover during the last six months has been AS7.7 millio
Slide 10: Origin targets top third performance on a TSR basis
igin targets top third performance on a TSR basis...... Or g Cc < & g S Ew 35 68/2 32 sale. 288 g< Gupte ez & |G8 5389 es Ses B lees 72 e (623 26 Total Shareholder Return 1 March 2000 to 12 September 2003 100% py] sung 38 to é 92] paxepossy pueipoo, dnoig aunyon.nsesjuy ayenbsey WN3]}O.139g aplspoo,
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Slide 12: Profit & Loss
Profit & Loss Jun 00 Jun 01 Jun 02 Jun 03 ($m) ($m) ($m) ($m) Total revenue 1,530 1,687 2,429 3,352 EBITDA 271 305 405 491 EBIT 131 173 231 295 Net interest expense (30) (32) (43) (49) Tax expense (23) (38) (54) (80) Outside equity interests (3) (6) (5) (4) PAT 75 98 129 162 Earnings per share (cent
Slide 13: Revenue has grown 120% over the last three years
Revenue has grown 120% over the last three years largely as the result of acquisitions in the Retail segment 4,000 : . « Revenue increase driven by: 3,500 - 3,352 - contributions from the Powercor and 3.000 CitiPower electricity retail businesses ’ 7 purchased in May 2001 and July 2002 2 2,500 4 - s
Slide 14: EBITDA has grown by nearly 81% over the last three years
EBITDA has grown by nearly 81% over the last three years AS millions Page 13 600 500 + 400 + 300 + 200 + 100 + EBITDA 491 « EBITDA growth driven by - contributions from the Powercor and CitiPower retail electricity businesses - favourable wholesale positions in electricity - cessation of payments to
Slide 15: OCAT ratio is our primary performance measure
Operating cash flow after tax over funds employed (OCAT Ratio) is our primary performance measure....... Jun 00 Jun 01 Jun 02 Jun 03 ($m) ($m) ($m) ($m) EBITDA 271 305 405 491 Non-cash items (8) (8) (17) 13 Change in Working Capital (20) 11 16 39 Stay in business CAPEX (67) (83) (65) (94) Tax/Subven
Slide 16: Segment-level before tax target (OCFR) of 14.3%
At the segment level Origin uses a before tax target (OCFR) of 14.3% Segments OCFR Jun 01 Jun02 Jun 03 E&P (Upstream) 22.8% 16.7% 14.2% Retail 1.6% 16.4% 21.8% Generation 6.2% 10.7% 16.1% Networks 18.0% 16.8% 17.1% Initially Upstream cashflows funded Retail growth, while Retail cashflows are now fun
Slide 17: Acquisitions in Retail and Generation provided immediate contributions
Acquisitions in Retail and Generation have provided immediate contributions........ Jun 00 Jun 01 Jun 02 Jun 03 ($m) ($m) ($m) ($m) Growth & Acquisitions E&P 47 56 129 179 Retail 1 342 78 154 Generation 70 46 116 93 Networks 15 0 15 0 Corporate 2 2 0 - Total Growth & 135 446 338 427 Acquisitions Sta
Slide 18: Growth projects requiring capital expenditure of $1.4 billion
In the medium term growth projects requiring capital expenditure of $1.4 billion are already being developed...... ¢ Current free cash flow will cover the majority of the capital required for this FY '03 Free organic growth Cash Flow $350 mill. pa « Conservative gearing of 29% and borrowing capacity
Slide 19: Funding & Interest
Funding & Interest Jun 00 Jun 01 Jun 02 Jun 03 Net debt ($m) 431 727 633 732 Total equity ($m) 1,240 1,328 1,626 1,790 Net debt to equity (%) 35% 55% 39% 29% Net interest expense ($m) (30) (32) (43) (49) Net interest cover (x EBIT) 4.4 5.5 5.4 6.1 Average interest rate 7.5% 6.7% 6.6% 6.7% Page 18 »
Slide 20: Earnings per share has grown 86% through the last three annual results
Earnings per share has grown 86% through the last three annual results (CAGR 23%) cents per share (AS) Page 19 60 54 > |@ CFPS EPS DPS ‘00 01 02 ‘03 * Final Dividend - unfranked + Total Dividend - fully franked # Total Dividend - franked to 4 cents « Origin’s capital base has increased by 16% follow
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Slide 22: Energy industry in Australia provides continuing opportunities for new developments
Longer term the energy industry in Australia provides continuing opportunities for new developments Coal Seam Gas Perth Basin Page 21 Onshore Otway Basin Offshore Otway Basin BassGas Project « Upstream - Perth Basin - Offshore Otway and Bass Basins - Surat Basin / Myall Creek - Coal seam gas (CSG) «
Slide 23: New infrastructure and acreage awards in the Otway and Bass Basins
New infrastructure and acreage awards are opening up opportunities in the Otway and Bass Basins « Following the Thylacine and Geographe gas discoveries the offshore Otway has attracted many new players | aie ily 8 BAR woe pecan | « Prospectivity centres ona ‘SalEcey if . * om reservoir fairway known
Slide 24: Emerging oil play and gas prospects in the North Perth Basin
aemaeE Page 23 An emerging oil play and gas prospects close to existing infrastructure provide opportunities for growth in the North Perth Basin « The Hovea, Jingemia, and Eremia discoveries have changed industry perception of region from poorly prospective for gas to highly prospective for both gas
Slide 25: New play opportunities in the Surat Basin
New play opportunities have provided the largest discovery in over a decade in the Surat Basin « Recent successes in the Surat Basin suggest a large gas resource may be stratigraphically trapped at Myall Creek in the Permian Tinowon Fm. e A further 4 wells will be drilled starting in September, and
Slide 26: Leading position in commercialisation of CSG resources
Origin has established the leading position in the commercialisation of CSG resources in Australia 2P Sales Gas Reserves (P.) Page 2! 2,000 Coai Seam Gas Reserves in Queensland 4,800 Others @Origin 4,006 500 4906 1097 1008 «= 1999» 20002004 «= 20022003 Queensiand supply/demand batance for natural ga
Slide 27: In Retail, opportunities to build scale through growth and consolidation
In Retail, opportunities exist to build scale through market growth/consolidation and margin expansion Eastern Australian energy retailers: market share by energy accounts Page 26 Government Listed entities @ Origin @ Other listed entities 6 54 a EBIT / Sales (%) Origin Retail Margins w v Origin Ret
Slide 28: Four major streams to expand Retail margins
Origin is focussing on four major streams to expand Retail margins........ « Improve efficiency through system automation, people and process reengineering « Realisation of efficiencies through process improvement and streamlining manual procedures, predominantly in the Customer Operation areas Mark
Slide 29: Generation business grown to 883 MW
Origin has grown the Generation business from a few MW in the mid 90’s to 883 MW of gas turbine & cogeneration plant 3,500 3,000 2 10 Terrawatt Hours re ry Page 28 Peak Demand & Generation Capacity Annual NEM Peak Growth Origin Peak Demand 02/03 Origin Generation Capacity Total Energy [Annual NEM En
Slide 30: Portfolio of renewable generation projects
Origin has established a portfolio of renewable generation projects that provide value in an uncertain environment Renewables - MRET*°GWh « Solar: Origin SLIVER® Solar Cell Possible requirements technology tested and commercial viability established. Planning for pilot plant well advanced ¢« Wind: O
Slide 31: Investing in regulated assets through Envestra holding
Origin does not own regulated assets but invests in them through its 19% holding in Envestra and manages assets on behalf of third parties. Assets continue to churn in this e Aquila / UEL / Alinta transaction in early 2003 e EPIC is in the process of selling pipeline assets in Western Australia and
Slide 32: Origin will continue to deliver value to shareholders
Origin will continue to deliver value to shareholders through: - A strategic position that has differentiated Origin from other energy companies in Australia ¢ A focus on risk management and improving the performance of existing businesses ¢ Growth from prospects generated within the business and ac
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Slide 34: For more information
For more information. For more information on Origin Energy please contact Angus Guthrie Manager, Investor Relations Email: angus.guthrie@originenergy.com.au Office: +61-2-9220 6558 Mobile: + 61-4-1786 4255 Fax: +61-2-9235 1661 Alternatively visit our website www.originenergy.com.au and follow the p
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