Origin Energy Limited · ASX:ORG
Origin Energy — Non-Deal Roadshow (March 2013)
48 slides from Origin Energy's roadshow presentation, Mar 4, 2013
Slide 1: ASX cover note: presentation to overseas investors
For personal use only To Company Announcements Office Facsimile 1300 135 638 Company ASX Limited Date 4 March 2013 From Helen Hardy Pages 48 Subject PRESENTATION Attached for your information is a presentation being made to overseas investors by Karen Moses, Executive Director, Finance & Strategy. A
Slide 2: Origin Energy United States Roadshow
For personal use only Origin Energy United States Roadshow Karen Moses, Executive Director, Finance and Strategy March 2013
Slide 3: Origin is Australia's leading integrated energy company
Origin is Australia’s leading integrated energy company For personal use only The largest integrated energy business in Australia and NZ At a glance: • Large and diverse fuel portfolio Listed in the S&P/ASX 20 • Largest and most flexible generation portfolio index with a market capitalisation of •
Slide 4: Energy Markets currently the largest contributor to earnings
The Energy Markets business is currently the largest contributor to Origin’s earnings … For personal use only Underlying EBITDA by Segment, FY2012 Assets less Segment Liabilities by Segment, FY2012 Contact Contact APLNG 400 4,697 47 Energy Markets E&P 10,520 Energy 329 Markets APLNG 1,562 5,769 E&P
Slide 5: Focus on maximising cash flow, progressing APLNG and strengthening funding
Origin is focused on maximising cash flow from the existing business, progressing the APLNG project and strengthening its funding position For personal use only Existing Business APLNG Funding Responding to Challenges Confidence in Schedule & Cost Strengthened • Reduced sales volumes and • Upstream
Slide 6: Positioned for growth over the next five years
Origin is positioned for growth over the next five years with an uplift in Energy Markets earnings … For personal use only New development options • Continued • Improved improvement in Energy Markets Full production regulatory from APLNG conditions • Revenue from QCLNG gas sales • International gas,
Slide 7: Restructuring initiatives to lower costs
Origin is undertaking restructuring initiatives to lower costs … For personal use only OPERATIONAL EFFECTIVENESS ASSET CONSOLIDATION A review of investment activities and 600 assets has resulted in: • Discontinued investment in Transform 500 Solar and Geodynamics Number of Employees • Suspension of
Slide 8: Legacy gas contracts provide opportunity for earnings growth
Legacy gas contracts set at previously low domestic prices provide opportunity to deliver growth in earnings … For personal use only PJ OE Gas Supply Position 3,000 Third Party Contracts APLNG will see the benefit of a contract to 3rd party contracts Origin JV supply gas to QCLNG over 20 years from
Slide 9: Project review confirms APLNG delivery and accelerated Train 2 schedule
Confidence in the delivery of the APLNG project was confirmed through a project review, resulting in acceleration of the schedule for Train 2 … For personal use only SCOPE • Project capital costs were reviewed based on actual costs incurred through to late 2012 and revised forecasts SCHEDULE • Train
Slide 10: Undrawn facilities and cash provide liquidity to fund APLNG investment
Committed undrawn debt facilities and cash, combined with cash flows from operations, provide sufficient liquidity for Origin to fund its investment in APLNG … For personal use only 3,500 3,000 2,500 Free cash flow $4.4 billion1 from existing funding 2,000 business requirement for Origin’s 1,500 sha
Slide 11: Funding initiatives increased undrawn debt facilities and cash
Origin’s funding initiatives have increased undrawn committed debt facilities and cash to $5.4 billion1, supporting Origin’s investment in APLNG For personal use only Origin Debt (excluding Contact) & Bank Guarantee Maturity Profile as at 30 June 2012 2,500 2,500 Loan & Bank Guarantees - Undrawn Loa
Slide 12: Energy Markets
11 | For personal use only Energy Markets
Slide 13: Australia's leading integrated provider of energy products
Origin’s Energy Markets business is Australia’s leading integrated provider of energy products For personal use only Fuel Generator Retailer Large and diverse fuel Australia’s largest Australia’s leading energy portfolio generation portfolio retailer • Strong domestic gas supply • 5,900 MW • 2,952,0
Slide 14: Large, diverse, integrated portfolio manages energy purchase costs
Origin’s large, diverse and integrated portfolio enables effective management of gas and electricity purchase costs … For personal use only PJ/a 700 Fuel/Generation - Gas Fuel/Generation - Coal 10,000 600 Retail - Gas Retail - Electricity 10,000 10,000 9,000 9,000 9,000 500 8,000 Contract Contract o
Slide 15: Energy Markets Underlying EBITDA decrease driven by electricity gross profit
A decrease in Energy Markets Underlying EBITDA in HY2013 was largely due to a decline in Electricity Gross Profit … For personal use only Underlying EBITDA Bridge 900 (28) 800 (58)1 • Lower electricity volumes (53) (30) 20 (32) • Unfavourable tariff determination 700 19 in Queensland, reducing reven
Slide 16: Electricity Gross Profit decline from lower volumes and margins
Electricity Gross Profit decline was predominantly due to lower volumes and reduced margins For personal use only TWh 25.0 15% C&I MM 14.1% (1.2%) 20.0 (3.5%) Underlying EBIT Margin (%) 10% 15.0 9.4% 10.0 5% 5.0 0.0 0% H1 FY2012 H2 FY2012 H1 FY2013 HY2012 0.0% Carbon 0.0% Other HY2013 • Origin’s ave
Slide 17: QCA tariff determination reduced wholesale energy cost allowance
The QCA tariff determination 80 reduced the wholesale energy cost allowance … 70 Average NEM Pool Price ($/MWh) 120 120 60 For personal use only Due to reduced 100 100 generation availability Average NEM Pool Price ($/MWh) 50 Average NEM Pool Price ($/MWh) Average prices less 80 80 than $300/MWh 40
Slide 18: Lifted acquisition and retention activity, reduced churn
Origin has successfully lifted acquisition and retention activity, and reduced Origin churn relative to market … Combined Electricity and Natural Gas Churn Rates For personal use only 40% 800 Customer wins and retains ('000) 29% increase in Origin, HY2012 Origin, HY2013 700 wins & retains 35% Market
Slide 19: Stabilisation of new SAP billing system well advanced
Stabilisation of the new SAP billing and customer management system is well advanced … For personal use only CAL YEAR • Jun – SA customer accounts transferred to SAP Eraring • Oct – VIC customer accounts transferred to SAP Power 2011 • Dec – NSW & QLD customer accounts transferred to SAP Station • F
Slide 20: Exploration & Production
For personal use only Exploration & Production 19 |
Slide 21: Producing assets in Australia and New Zealand
Origin has producing assets in both Australia and New Zealand For personal use only boe mmboe PJe Origin Gas Production Origin by Half Year Gas mmboe Production by Half Year .6 1008.6 17.2 .7 7.7 .9 806.9 13.7 Processing plant in Cooper Basin .0 6.0 .1 605.1 10.3 .3 4.3 40 6.9 .4 3.4 Kupe processing
Slide 22: Investment in offshore assets to increase supply into east coast market
Investment in existing offshore assets will increase supply into a growing east coast gas market … For personal use only PJ • Phase 1 of BassGas MLE complete with the accommodation 2,500 module East coast installed gas production 2000-2017 (PJ) • Phase 2 of BassGas MLE will involve the drilling of a
Slide 23: Exploring in regions with high prospectivity and market access
Origin is also exploring in regions that offer high prospectivity and access to growing markets For personal use only Kenya Botswana • Mbawa-1 well in the Lamu Basin was • An aero-magnetic survey in Botswana was drilled to a total depth of 3,150m. completed in July 2012 Detailed analysis of the data
Slide 24: Australia Pacific LNG
For personal use only Australia Pacific LNG 23 |
Slide 25: APLNG: strong and aligned incorporated joint venture
APLNG is a strong and aligned incorporated joint venture, combining Origin’s Australian CSG experience with ConocoPhillips’ extensive LNG and CSG capabilities … For personal use only • Australia’s largest integrated • Integrated energy company with • Integrated energy and chemical company energy com
Slide 26: Industry leading 2P reserves base in both sweet spots
APLNG’s industry leading 2P reserves base includes prime acreage in both “sweet spots” … For personal use only PJ 30,000 120 Jan-Jun 100 25,000 Jul-Dec 80 30,000 30,000 Origin Share 60 20,000 25,000 30,000 25,000 40 20,000 25,000 15,000 20,000 20 15,000 20,000 15,000 0 10,000 10,000 15,000 10,000 5,
Slide 27: APLNG continues to make significant progress
APLNG continues to make significant progress For personal use only Coil-tubing drill rig Laying of pipe Curtis Island site, January 2013 LNG Tanks, January 2013 UPSTREAM PROJECT DOWNSTREAM PROJECT 29% Complete 31% Complete Gathering Gas & water Drilling facilities LNG Plant, Tanks and LNG Terminal E
Slide 28: APLNG on track to achieve key project milestones
APLNG is on track to achieve key project milestones Target For personal use only Key Project Milestones Status Update Date at FID First gas field facility complete Mid 2013 On Track Pipeline complete Early 2014 On Track First LNG from Train 1 Mid 2015 On Track First LNG from Train 2 Early 2016 Ahead
Slide 29: APLNG half-year capital expenditure and Origin's cash contribution
APLNG capital expenditure for the half year was $4.0 billion1, with Origin’s cash contribution $119 million For personal use only Cumulative Estimate from FID1 to Half year to Dec (A$m) from FID1 1st sales from Train 2 2012 to Dec 2012 (A$b) Project Capex 3,519 8,174 24.7 Non-Project Capex: Annual s
Slide 30: Contact Energy
29 | For personal use only Contact Energy
Slide 31: Origin owns 53.1% of Contact Energy
Origin owns a 53.1% interest in Contact Energy, one of New Zealand’s leading fuel-integrated energy companies … For personal use only Generation Portfolio • 290 MW geothermal generation • 752 MW hydro generation • 1,176 MW gas generation • Over 2,000 MW in generation development opportunities Energy
Slide 32: Contact's generation investments improved portfolio flexibility
Recent investments in Contact’s generation portfolio have delivered improved portfolio flexibility … For personal use only Benefits of favourable fuel mix realised during the period • Higher rainfall resulted in increased hydro generation • Stratford Peaker and Ahuroa gas storage increased Contact’s
Slide 33: Corporate
32 | For personal use only Corporate
Slide 34: Portfolio of renewable energy opportunities in offshore markets
Origin continues to develop a portfolio of high quality renewable energy opportunities in offshore markets … For personal use only Chile Chile • 40% interest in Chile’s leading geothermal • Energía Austral, one of Chile’s leading exploration company, Energía Andina S.A. hydroelectric development com
Slide 35: Appendix
34 | For personal use only Appendix
Slide 36: 2013 Half Year Financial Highlights
2013 Half Year Financial Highlights For personal use only ($ million) Dec 12 Dec 11 Change Statutory Profit 524 794 (34%) Statutory EPS 48.0 cps 73.8 cps (35%) Revenue 7,379 6,499 14% Underlying EBITDA* 1,055 1,157 (9%) Underlying EBIT* 698 832 (16%) Underlying Profit 362 489 (26%) Underlying EPS 33
Slide 37: Underlying EBITDA down 9%, Underlying EBIT down 16%
Underlying EBITDA down 9% to $1,055 million Underlying EBIT down 16% to $698 million Underlying EBITDA Underlying EBIT For personal use only ($ million) Dec 12 Dec 11 % change Dec 12 Dec 11 % change Energy Markets 660 820 (20%) 516 697 (26%) Exploration & Production 200 179 12% 79 67 18% Australia P
Slide 38: Group OCAT reduced due to lower EBITDA, working capital and tax
Group OCAT reduced due to lower Underlying EBITDA, higher working capital and tax paid … For personal use only ($ million) Dec 12 Dec 11 Change Underlying EBITDA 1,055 1,157 (102) Primarily due to billing delays Change in working capital (268) (192) (76) and collections, offset by a carbon benefit S
Slide 39: Electricity Gross Profit down on volume and margin
Electricity Gross Profit was down due to a reduction in volume and margin … Performance metrics, $m Non- For personal use only Natural Gas Electricity LPG (% change from Dec 11) commodity Revenue ($m)1 749 (+20%) 4,284 (+12%) 102 (-25%) 371 (+6%) Decline in Gross Profit* ($m) 145 (+15%) 762 (-18%) 2
Slide 40: Regulatory constraints and wholesale costs drove lower electricity margin
Regulatory constraints and higher wholesale energy costs were the primary drivers of lower Electricity margin For personal use only Electricity Performance ($/MWh) Dec 12 Dec 11 Change Revenue uplift reflects: • recovery of carbon Revenue • recovery of network costs Combined Revenue 200 175 25 The r
Slide 41: Natural Gas Gross Profit up 15%
Natural Gas Gross Profit up 15% due to increased volumes in Victoria and customers in New South Wales … For personal use only Gas Performance ($/GJ) Dec 12 Dec 11 Change Revenue Combined Revenue 10.7 9.2 1.5 C&I 5.9 5.4 0.5 Tariff increases include Mass Market 20.4 17.4 3.0 recovery of network, whol
Slide 42: Higher customer wins and restructuring increased operating costs
Higher customer wins and retention, combined with business restructuring, increased operating costs … For personal use only Cost-to-serve Dec 12 Dec 11 Change Total Natural Gas, Electricity & non- Increased operating costs (309) (283) (26) commodity operating costs ($m)1 Maintenance costs ($m) (249)
Slide 43: Glossary
For personal use only Glossary
Slide 44: Important Notice
Important Notice Financial information All figures in this report relate to businesses of the Origin Energy Group (Origin, or the Company), being Origin Energy Limited For personal use only and its controlled entities, for the half year ended 31 December 2012 (the half year) compared with the half y
Slide 45: Statutory Financial Measures
Statutory Financial Measures Term Meaning For personal use only Total current and non-current interest bearing liabilities only less cash and cash Net Debt equivalents. Economic interest in a controlled entity of the Consolidated Entity that is not Non-controlling interest held by the Parent entity
Slide 46: Non-IFRS Financial Measures
Non-IFRS Financial Measures Non-IFRS Financial measures are financial measures that are presented other than in accordance with all relevant Accounting Standards. Non-IFRS Financial measures are used internally by management to assess the performance of Origin’s business, and to make decisions on al
Slide 47: Non-Financial Terms
Non-Financial Terms For personal use only Term Meaning Proved Reserves are those reserves which analysis of geological and engineering data can be estimated with reasonable 1P reserves certainty to be commercially recoverable. There should be at least a 90% probability that the quantities actually r
Slide 48: Thank you
For personal use only Thank you For more information Kylie Springall Group Manager, Investor Relations Email: kylie.springall@originenergy.com.au Office: +61 2 8345 5288 Mobile: + 61 400 477 393 www.originenergy.com.au 47 |