Origin Energy Limited · ASX:ORG
Origin Energy — Macquarie Australia Conference 2015
23 slides from Origin Energy's conference presentation, May 7, 2015
Slide 1: ASX announcement cover note
For personal use only To Company Announcements Office Facsimile 1300 135 638 Company ASX Limited Date 7 May 2015 From Helen Hardy Pages 23 Subject Macquarie Australia Conference Investor Presentation Please find attached a release on the above subject. Regards Helen Hardy Company Secretary 02 8345 5
Slide 2: Origin Energy: Delivering on Priorities
For personal use only ORIGIN ENERGY DELIVERING ON PRIORITIES Grant King, Managing Director Macquarie Australia Conference 6-8 May 2015
Slide 3: Forward looking statements
For personal use only Forward looking statements This presentation contains forward looking statements, including statements of current intention, statements of opinion and predictions as to possible future events. Such statements are not statements of fact and there can be no certainty of outcome i
Slide 4: Strategy: 3 businesses and 4 priorities
Origin’s strategy of connecting resources to markets is pursued through a clear focus on its 3 businesses and 4 priorities designed to drive continued improvement in Origin’s performance For personal use only A regionally A growing A regional leader significant position position in in energy markets
Slide 5: Building customer loyalty and trust
Building customer loyalty and trust is the most powerful mitigant to the impacts of a highly competitive market For personal use only Digital Transformation Customer Communication 34 point 5% improvement in improvement in Net on time payment Promoter Score for behaviour new connections Origin is now
Slide 6: Improved communication with customers and retention
Implementation of new technology has improved communication with For personal use only customers, allowing greater focus on retention activities through use of internal channels, resulting in improved service to customers and cost to serve benefits Operational Metrics Customer Wins and Retains Sales
Slide 7: Retail environment remains challenging with elevated discounting
The retail environment remains challenging with elevated levels of discounting For personal use only Electricity and Natural Gas Churn Rates Origin’s Average Signed Discount Offers for Electricity and Natural Gas (%) VIC 25% 20% NSW SA 15% 10% QLD Origin Churn Market Churn 5% 0% Jul-13 Jul-14 Aug-13
Slide 8: Competitive cost of gas through diverse gas portfolio
Origin has a competitive cost of gas through its diverse and flexible gas portfolio and continues to capture benefits of rising gas prices, near term For personal use only ramp gas opportunities, increasing sales volumes and market share ... Natural Gas Gross Margin per Customer 400 Continued risi
Slide 9: Competitive cost of electricity through flexible generation
Origin has a competitive cost of electricity through its flexible generation portfolio with a short position to the pool For personal use only Average 6 monthly Queensland Pool Prices Price Volatility and Wind Generation in South Australia 16,000 1,000 120 14,000 900 Average NEM Pool Price ($/MWh) A
Slide 10: Renewables extend the supply curve and limit wholesale price increases
Increases in renewables to achieve a 2020 renewable energy target1 will extend the supply curve and limit increases in wholesale prices ... For personal use only NEM Supply Bidstack - 2015 vs 20202 Impacts of Solar Generation on an Extreme Summer Day Limited increase in net demand of around 8 TWh Ma
Slide 11: Trends will hollow out the load duration curve
These trends will “hollow out” the load duration curve, lowering prices for baseload generation and increasing volatility and peak prices For personal use only Origin’s Generation Flexibility Change in NEM Load Duration Curve Capacity Energy 9,000 40 As more renewables 8,000 35 are installed there i
Slide 12: Recombined Exploration & Production and LNG businesses
Origin has recombined our Exploration & Production and LNG businesses to For personal use only integrate all our activities along the gas value chain Beetaloo Basin • Origin’s first shale play APLNG (Downstream) • 2-3 ships for loading per week Browse & Bonaparte Basins • Offshore discoveries • Targ
Slide 13: Reserves almost entirely gas, exposed to export prices
Origin’s reserves are almost entirely gas, exposed to export gas prices For personal use only Origin Reserves Australian domestic gas prices PJe are moving towards export parity 7,000 14.00 6,000 12.00 2014 prices 10.00 unusually low due A$/GJ 5,000 8.00 to ramp gas in QLD 6.00 4,000 4.00 3,000 2.00
Slide 14: APLNG construction progress and first production timing
Sustained production from Train 1 expected in Q2 FY2016 and from For personal use only Train 2 approximately 6 months later APLNG’s UPSTREAM PROJECT IS 93% COMPLETE APLNG’s DOWNSTREAM PROJECT IS 89% COMPLETE 13
Slide 15: Expected distributable cash flow from APLNG at A$100/bbl oil
At A$100/bbl oil, Origin expects its share of distributable cash flow from For personal use only APLNG to be around A$900 million per annum on average from FY2017 Brent Forward and Spot Curves(A$/bbl) 140 120 100 Every A$10/bbl movement results in approximately 80 A$200 million change in FID 1 FID 2
Slide 16: Prioritising capital on highest-return upstream projects
Origin is prioritising capital spend on upstream projects with the highest returns and shortest payback periods For personal use only BASS BASIN OTWAY BASIN PERTH BASIN Sapura 3000 heavy lift vessel with Compressor Ensign 931 rig Module suspended • Senecio-3 exploration well • Successful lift of con
Slide 17: Capital management focus: liquidity, serviceability, flexibility
For personal use only As the APLNG project progresses to completion, capital management remains a focus ... • Maintaining sufficient funding capacity to meet committed LIQUIDITY capital and funding requirements SERVICEABILITY • Ability to service debt irrespective of oil prices FLEXIBILITY • Ability
Slide 18: Sufficient liquidity to fund APLNG contributions
Origin has more than sufficient liquidity to fund its expected remaining For personal use only contributions to APLNG with maturities extending beyond FY2018 Origin Debt & Bank Guarantee Maturity Profile as at 31 December 20141 6,000 Loans & Bank Guarantees - Undrawn Loans & Bank Guarantees - Drawn
Slide 19: Cash flow sufficient to service interest, capex and dividends
Cash flow from existing businesses has been more than sufficient to service For personal use only all interest payments, stay-in-business capex and dividends Cash Flow Sources and Uses (ex Growth Capex) Brent Forward and Spot Curves(A$/bbl) 2,500 140 120 2,000 100 1,500 $ million 80 FID 1 FID 2 1,00
Slide 20: Less flexibility to improve returns in low oil price
In a sustained period of low oil price Origin has less flexibility to improve For personal use only returns to shareholders ... Commitments Loss of Flexibility Actions No equity raising to fund APLNG Ability to increase dividends Reduce capital and above the current dividend operating costs
Slide 21: Strategy: 3 businesses, 4 priorities and 5 measures
Origin’s strategy of connecting resources to markets is pursued through its 3 businesses, 4 priorities and 5 measures that drive continued improvement in Origin’s performance For personal use only A regionally A growing A regional leader significant position position in in energy markets in natural
Slide 22: Thank you
For personal use only THANK YOU For more information Chau Le Group Manager, Investor Relations Email: chau.le@originenergy.com.au Office: +61 2 9375 5816 Mobile: + 61 467 799 642 www.originenergy.com.au 21
Slide 23: Important Information
Important Information A reference to Contact Energy is a reference to Origin’s controlled entity (53.1% ownership) Contact Energy Limited in New Zealand. In accordance with Australian Accounting Standards, Origin consolidates Contact Energy within its result. For personal use only A reference to Aus