Slide 1: Investor presentation Q1 2020
Investor presentation Q1 2020 29 April 2020
Slide 2: Disclaimer
DISCLAIMER This presentation contains certain forward-looking statements, including but not limited to, the statements and expectations contained in the “Financial Outlook” section of this presentation. Statements herein, other than statements of historical fact, regarding our future results of oper
Slide 3: Strong Q1 results
Strong Q1 results Highlights – Q1 2020 • EBITDA totalled DKK 6.8 billion, an increase of 33% compared to Q1 2019 • EBITDA from offshore and onshore wind farms in operation increased by 25%, to DKK 5.2 billion in Q1 2020 • Full-year EBITDA guidance increased by DKK 1 billion in March due to updated a
Slide 4: COVID-19 update
COVID-19 update Update on COVID-19 risk picture • Fully operational asset base at normal availability rates • Largely shielded from market volatility in short to medium term due to extensive hedging programme • Liquidity reserve can support operations and construction programmes through 2020 and 202
Slide 5: Construction programme – Offshore
Construction programme – Offshore Changhua Project Borssele 1 & 2 Virginia Hornsea 2 1 & 2a Country Asset type Capacity 752MW 12MW (EPC) 1,386MW 900MW Expected completion End of Q4 2020 Q4 2020 H1 2022 2022 Status On track On track On track On track Comments First power Foundations and Onshore Onsho
Slide 6: Construction programme – Onshore and Markets & Bioenergy
Construction programme – Onshore and Markets & Bioenergy Permian Renescience Project Plum Creek Willow Creek Energy Center Northwich Country Asset type 420MWac 80,000 tonnes Capacity 230MW 103MW 40MWac waste Expected completion Q4 2020 Q4 2020 2021 2020 Status On track On track On track Delayed Comm
Slide 7: Expected offshore wind auctions and tenders in 2020 and 2021
Expected offshore wind auctions and tenders in 2020 and 2021 Q4 2020 H1 2021 H2 2021 Japanese tender Holland Coast Connecticut 4th Round 1 West offshore wind Capacity TBA 1,520MW 800MW H1 2020 Q4 2020/Q1 2021 H1 2021 2021 Maryland 2nd Taiwan auction 4th CfD round German tender +400MW Capacity TBA 2,
Slide 8: Q1 2020 – EBITDA up by 33%
Q1 2020 – EBITDA up by 33% Q1 2020 EBITDA increased DKK 1,675m Offshore EBITDA DKK 5,632m – Up DKK 1,314m DKKm • Earnings from operating wind farms increased 25% due to ramp-up of generation from Hornsea 1 (0.8TWh) and high wind speeds (12.1m/s vs. Q1 2019 5,130 norm 10.4 m/s) • Partnership earnings
Slide 9: Q1 2020 – Financial performance
Q1 2020 – Financial performance CFO Net profit Free cash flow CAPEX Net interest-bearing debt development DKKm DKKm Divestments DKKm 3,346 2,678 2,639 -118 7 -428 -3,899 -5,308 -17,230 -1,339 -5,729 418 -4,410 -133 -27,084 -5,729 31 Dec Free cash Dividends Hybrid Other 31 Mar Q1 2019 Q1 2020 Q1 2019
Slide 10: Q1 2020 – Financial and non-financial ratios
Q1 2020 – Financial and non-financial ratios FFO / Adj. net debt (last 12 ROCE (last 12 months) Greenhouse gas emissions Safety (last 12 months) months), % % (scope 1 and 2), g CO2e/kWh Total recordable injury rate (TRIR) 46 85 4.7 4.3 28 53 21 11 31 Mar 2019 31 Mar 2020 31 Mar 2019 31 Mar 2020 Q1 2
Slide 11: 2020 guidance and long-term financial estimates and policies
2020 guidance and long-term financial estimates and policies 2020 guidance DKKbn Financial estimates EBITDA without new partnerships 16-17 Total capex spend, 2019-2025 DKK 200bn Gross investments 30-32 Capex allocation split, 2019-2025: - Offshore 75-85% Business unit EBITDA FY 2020 vs. FY 2019 Dire
Slide 12: Q&A
Q&A Conference call DK: +45 32 71 49 98 UK: +44 800 408 7373 US: +1 877 890 2416 Room number: 233127 Participant PIN: 8564 For questions, please press *2
Slide 13: Appendix
Appendix Orsted
Slide 14: Renewable capacity as of 31 March 2020
Renewable capacity as of 31 March 2020 Indicator Unit Q1 2020 FY 2019 Q1 2019 Installed renewable capacity Installed renewable capacity MW 10,209 9,870 8,303 The installed renewable capacity is calculated as - Offshore wind power MW 6,820 6,820 5,602 the cumulative renewable gross capacity installed
Slide 15: Offshore wind build-out plan
Offshore wind build-out plan Installed capacity 920 14,854 MW 1,142 1,220 Under construction 1,714 Awarded 900 9,858 1,386 752 6,820 Installed Borssele Hornsea 2 Greater Decided (FID’ed) US North- US Mid-Atlantic German Greater Decided (FID’ed), capacity 1&2 Changhua and installed East cluster1 clus
Slide 16: Offshore market development – US
Offshore market development – US • Passed bill which has increased the offshore wind target to 3.2GW by 2030 Massachusetts • Next auction of 800MW expected in H2 2021 • Legislation signed approving procurement of 2GW of offshore wind capacity by 2030, Connecticut of which 1,200MW remains available •
Slide 17: Offshore market development – UK and Continental Europe
Offshore market development – UK and Continental Europe • Six offshore wind farms awarded a total of 5.5GW in the 2019 UK CfD auction • Target annual build-out of 3GW to reach 40GW capacity by 2030 • Development consent order for Hornsea 3 is expected in Q2 2020 United Kingdom • Auction framework fo
Slide 18: Offshore market development – APAC
Offshore market development – APAC • Taiwan has met its target of awarding 5.5GW to be commissioned by 2025 • An additional 10GW offshore wind to be constructed between 2026-2035 Taiwan • Third round auction rules expected to be announced in Q2 2020, with bids due in Q4 2020 / Q1 2021 • 600MW Greate
Slide 19: Onshore build-out plan
Onshore build-out plan ~5,000 Installed capacity MW Under construction 420 2,088 230 103 1,335 Installed Plum Creek Willow Creek Permian Decided 2025 capacity COD Q4’20 COD Q4’20 Energy Center (FID’ed) and ambition Q1 2020 COD’211 installed capacity SPP North, SPP North, ERCOT, Region NE SD TX Expec
Slide 20: Sustainability and ESG at Ørsted
Sustainability and ESG at Ørsted Green leadership Contributing to the global goals ESG ratings of Ørsted • We want to help keep global warming below 1.5°C Rating agency Rating Benchmark Ørsted is a signatory to the UN Global • In Q1 2020, 90% of our energy generation was green. By Compact and adhere
Slide 21: Group – Financial highlights
Group – Financial highlights FINANCIAL HIGHLIGHTS Q1 2020 Q1 2019 D FY 2019 EBITDA DKKm 6,805 5,130 33% 17,484 • Offshore 5,632 4,318 30% 15,161 • Onshore 187 151 24% 786 • Markets & Bioenergy 933 684 36% 1,495 Net profit – continuing operations 3,346 2,639 27% 6,100 Net profit – discontinued operat
Slide 22: Offshore – Financial highlights
Offshore – Financial highlights FINANCIAL HIGHLIGHTS Q1 2020 Q1 2019 D FY 2019 Wind speed (m/s), offshore wind farms EBITDA DKKm 5,632 4,318 30% 15,161 • Sites incl. O&Ms and PPAs 4,936 3,960 25% 13,750 • Partnership agreements and farm-down 1,099 888 24% 3,765 gains • Other, incl. project developme
Slide 23: Onshore – Financial highlights
Onshore – Financial highlights FINANCIAL HIGHLIGHTS Q1 2020 Q1 2019 D FY 2019 EBITDA DKKm 187 151 24% 786 • Sites 76 73 4% 466 • Production tax credits and tax attributes 209 142 47% 628 • Other, incl. project development (98) (64) 53% (308) KEY BUSINESS DRIVERS Power generation TWh 1.1 0.8 39% 3.5
Slide 24: Markets & Bioenergy – Financial highlights
Markets & Bioenergy – Financial highlights FINANCIAL HIGHLIGHTS Q1 2020 Q1 2019 D FY 2019 EBITDA DKKm 933 684 36% 1,495 • CHP plants 520 554 (6%) 1,152 • Gas markets & Infrastructure 11 (117) n.a. 390 • LNG 0 (70) n.a. (957) • Distributions B2C and city lights 476 410 16% 1,280 • Other, incl. projec
Slide 25: Currency and energy exposure
Currency and energy exposure Currency exposure 2020-20251 Energy exposure 2020-2025 DKKbn DKKbn Before hedging Before hedging After hedging After hedging 63.5 19.8 17.7 6.1 7.4 1.3 0.3 2.4 1.1 -0.1 -0.1 -2.6 GBP2 USD TWD Power Gas Oil Risk after hedging, Effect of price +10% Effect of price -10% Ris
Slide 26: Natural hedges significantly reduce Taiwan Dollar risk
Natural hedges significantly reduce Taiwan Dollar risk Illustrative Illustrative Cash flows from Changhua 1 & 2a Risk mitigation CAPEX Revenue less OPEX Potential partnership agreements 2020 2021 2022 2023 2024 2025 2026 2027+ 2020 2021 2022 2023 2024 2025 2026 2027+ TWD USD EUR or DKK TWD TWD fundi
Slide 27: Capital employed
Capital employed Capital employed, DKKm Q1 2020 FY 2019 Q1 2019 Capital employed by segment Intangible assets and property and equipment 108,381 106,685 92,918 %, Q1 2020 Equity Investments and non-current receivables 2,319 1,044 1,350 Offshore Markets & Bioenergy Net working capital, work in progre
Slide 28: FFO/Adjusted net debt calculation
FFO/Adjusted net debt calculation Funds from operations (LTM) / Adjusted net debt, DKKm Q1 2020 FY 2019 Q1 2019 EBITDA – Business Performance 19,159 17,484 29,640 Interest expenses, net (1,570) (1,312) (890) Interest expenses, leasing (44) (171) (36) Reversal of interest expenses transferred to asse
Slide 29: Debt overview
Debt overview Gross debt and hybrids Effective funding costs – gross debt Long term gross debt maturity schedule 31 March 2020 (excl. hybrid) DKKbn Cost of Modified Avg. time to DKKbn % debt (%) duration (%) maturity (years) 4.0% 3.9% 80 3.8% 3.8% 4 Bond loans 3.1 8.6 11.0 4.0% 3.3% 3.3% Bank loans
Slide 30: Hybrid capital in short
Hybrid capital in short Hybrid capital can broadly be defined as • Deeply subordinated and only senior to Ørsted has made use of hybrid capital to funding instruments that combine features of common equity maintain our ratings at target level in debt and equity in a cost-efficient manner: connection
Slide 31: Ørsted's outstanding Green Bonds
Ørsted’s outstanding Green Bonds Ørsted A/S Avoided emissions (t Allocated to green Bond Type Face Value Coupon Issue date Maturity CO2/year) projects (in DKK) attributable to the bonds Senior Unsecured EUR 750m 1.5% 24 November 2017 26 November 2029 5,499 733,000 Hybrid capital EUR 500m 2.25% 24 No
Slide 32: Financing strategy
Financing strategy We have a centralised financing strategy All cash flow generated by our subsidiaries as customary for vertically and supports the creditworthiness and rating horizontally integrated European energy of and thus the debt taken up by the utilities. parent company, Ørsted A/S. The str
Slide 33: Currency risk management
Currency risk management General hedging principles • The main principle is to hedge highly certain cash flows, such as FX from hedged energy. • Cost-of-hedging is minimized by netting of exposures, use of local currency in construction contracts and debt in local currency. Managing outright long ri
Slide 34: Interest rate and inflation risk management
Interest rate and inflation risk management Four risk categories of assets and debt allocation Objectives of interest rate and inflation risk management Illustrative 1. Protect long-term real value of equity by offsetting interest and inflation risk exposure embedded in assets by allocating debt wit
Slide 35: Energy risk management
Energy risk management Risk picture Hedging of open exposure • We manage market risks to protect Ørsted against market price volatility and • Open energy exposure is reduced actively ensure stable and robust financial ratios that support our growth strategy • Minimum hedging requirements are determi
Slide 36: Glossary
Glossary Availability Wind and solar-based generation is computed as the input from the Power generation Availability is calculated as the ratio of actual production to the individual plant (wind and solar), as there is only one source of power Power generation from wind farms is determined as gener
Slide 37: Investor Relations contacts
Allan Bødskov Andersen Rasmus Hærvig Head of Investor Relations Manager alban@orsted.com rakol@orsted.com Sabine Lohse Dennis Callesen Henriette Stenderup Senior Investor Relations Officer Lead Investor Relations Officer IR Coordinator sablo@orsted.com decal@orsted.com hnste@orsted.com