Centrica Plc · LSE:CNA
Centrica — FY2023 Earnings Presentation
33 slides from Centrica's earnings presentation, Feb 15, 2024
Slide 1: Creating value through the energy transition
Creating value through the energy transition Preliminary results for the year ended 31 December 2023 15 February 2024 Easington Gas Terminal
Slide 2: Disclaimer
Disclaimer This 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, forecasts and projections that reflect the current intentions, belie
Slide 3: Creating value through the energy transition
Creating value Delivering against Relentless focus on through the our refreshed value creation energy transition strategy Creating value through the energy transition Chris O’Shea Group Chief Executive 3
Slide 4: A clear strategy to create value through the energy transition
Creating value Delivering against Relentless focus on through the our refreshed value creation energy transition strategy A clear strategy to create value through the energy transition A uniquely integrated Growing electricity demand A green-focused energy company & system complexity growth & invest
Slide 5: A strong 2023 performance
Creating value Delivering against Relentless focus on through the our refreshed value creation energy transition strategy A strong 2023 performance • Improved operational performance across the Group 4.0p £0.8bn to underpin long-term sustainable profitability 2022: 3.0p 2022: £0.1bn +33% +683% Full
Slide 6: Relentless focus on value creation
Creating value Delivering against Relentless focus through the energy our refreshed on value creation transition strategy Relentless focus on value creation Russell O’Brien Group Chief Financial Officer Brigg Energy Park 6
Slide 7: Relentless focus on value creation
Creating value Delivering against Relentless focus through the energy our refreshed on value creation transition strategy Relentless focus on value creation 01 02 03 04 05 Sustainable Maintain a strong Progressive Investing Returning earnings balance sheet dividend for value surplus capital 7
Slide 8: Strong financial performance against a favourable backdrop
Creating value Delivering against Relentless focus through the energy our refreshed on value creation transition strategy Strong financial performance against a favourable backdrop £2.8bn 33.4p £2.2bn 2022: £2.8bn1 (3)% 2022: 34.2p1 (2)% 2022: £2.5bn (11)% Adjusted operating profit Adjusted basic EP
Slide 9: Robust operating profit delivery from our balanced portfolio
Creating value Delivering against Relentless focus through the energy our refreshed on value creation transition strategy Robust operating profit delivery from our balanced portfolio Infrastructure £1,083m Retail 2022: £1,308m2 £799m 2022: £94m Nuclear Optimisation £2,752m1 £878m 2022: £2,823m1,2 20
Slide 10: Resilient margins in British Gas Energy
Creating value Delivering against Relentless focus through the energy our refreshed on value creation transition strategy Resilient margins in British Gas Energy British Gas Energy 2023 operating profit British Gas residential energy supply margin 4.6% • Price cap does not allow for perfect matching
Slide 11: Cash generative portfolio continues to deliver
Creating value Delivering against Relentless focus through the energy our refreshed on value creation transition strategy Cash generative portfolio continues to deliver Free cash flow (£bn) Year ended 31 December (£m) 2023 Adjusted EBITDA 3,085 ~£7bn Free cash flow generated across 2020-23 Dividends
Slide 12: A strong investment grade balance sheet
Creating value Delivering against Relentless focus through the energy our refreshed on value creation transition strategy A strong investment grade balance sheet… Adjusted net (debt)/cash and other liabilities (£bn) FY 2020 FY 2021 FY 2022 FY 2023 FY 2020 FY 2021 FY 2022 FY 2023 2.7 1.2 Baa2 BBB 0.7
Slide 13: Providing flexibility to pursue our disciplined green-focused investment plan
Creating value Delivering against Relentless focus through the energy our refreshed on value creation transition strategy … providing flexibility to pursue our disciplined green-focused investment plan Customers Renewables Flexibility Regulated infrastructure Opportunities Customer technology New ge
Slide 14: Remain on track to deliver medium-term operating profit and cash flow ambitions
Creating value Delivering against Relentless focus through the energy our refreshed on value creation transition strategy Remain on track to deliver medium-term sustainable operating profit and cash flow ambitions Medium-term Material medium-term 2024 outlook sustainable operating profit Infrastruct
Slide 15: Delivering against our refreshed strategy
Creating value Delivering against Relentless focus on through the energy our refreshed value creation transition strategy Delivering against our refreshed strategy Chris O’Shea Group Chief Executive
Slide 16: Engaged colleagues supporting our customers and communities
Creating value Delivering against Relentless focus on through the energy our refreshed value creation transition strategy Engaged colleagues supporting our customers and communities Investing in… …our colleagues …our brand & communities …our customers 7.7/10 £140m Direct customer support since the C
Slide 17: An improving customer experience in British Gas Energy
Creating value Delivering against Relentless focus on through the energy our refreshed value creation transition strategy An improving customer experience in British Gas Energy Good progress on customer migration Investing in the customer Delivering a better customer experience3 British Gas Energy r
Slide 18: Improved operations to support growth in Services & Solutions
Creating value Delivering against Relentless focus on through the energy our refreshed value creation transition strategy Improved operations to support growth in Services & Solutions Improved operational foundations… …provide us with capacity to grow Reschedule rate (%) Customer numbers1 (m) -48% -
Slide 19: Developing an attractive pipeline of clean flexible power assets
Creating value Delivering against Relentless focus on through the energy our refreshed value creation transition strategy Developing an attractive pipeline of clean flexible power assets Prospects Aim to maintain continuous volume ~2.5GW of early phase projects for evaluation Detailed plans & delive
Slide 20: Infrastructure assets playing an important role in energy resilience
Creating value Delivering against Relentless focus on through the energy our refreshed value creation transition strategy Infrastructure assets playing an important role in energy resilience • Heysham 1 & Hartlepool lives extended • Rough gas storage capacity doubled • Field life extended beyond 203
Slide 21: A compelling investment case creating value through the energy transition
Creating value Delivering against Relentless focus on through the energy our refreshed value creation transition strategy A compelling investment Sustainable A green-focused growth Balance sheet case creating profitability ~£800m of sustainable operating profit & investment strategy Creating value f
Slide 22: Appendix
Appendix Easington Gas Terminal
Slide 23: Group Financials
Group Financials Year ended 31 December (£m) 2023 2022 Adjusted revenue 33,374 33,637 Adjusted gross margin 5,217 5,439 Adjusted operating costs (2,674) (2,223) Adjusted operating profit 1 2,752 3,308 Net finance cost (39) (143) Group tax charge (incl. JV tax) (912) (1,077) Group effective tax rate
Slide 24: Revenue
Revenue Year ended 31 December (£m) 2023 2022 British Gas Services & Solutions 1,597 1,527 British Gas Energy 17,742 13,096 Bord Gáis Energy 1,815 1,771 Centrica Business Solutions 3,522 3,000 Centrica Energy 7,732 14,441 Upstream 2,935 3,351 Group revenue included in business performance 35,343 37,
Slide 25: Adjusted gross margin
Adjusted gross margin Year ended 31 December (£m) 2023 2022 British Gas Services & Solutions 616 504 British Gas Energy 2,141 1,114 Bord Gáis Energy 139 160 Centrica Business Solutions 309 238 Centrica Energy 1,016 1,558 Upstream 999 1,874 Profit share (3) (9) Group adjusted gross margin 5,217 5,439
Slide 26: Adjusted EBITDA
Adjusted EBITDA Year ended 31 December (£m) 2023 2022 British Gas Services & Solutions 101 38 British Gas Energy 808 154 Bord Gáis Energy 21 52 Centrica Business Solutions 141 89 Centrica Energy 822 1,446 Upstream 1,155 2,182 Other 37 32 Total Group adjusted EBITDA 3,085 3,993 26
Slide 27: Adjusted Operating Profit
Adjusted Operating Profit Year ended 31 December (£m) 2023 2022 British Gas Services & Solutions 47 (9) British Gas Energy 751 72 Residential energy supply 726 23 Business energy supply 25 49 Bord Gáis Energy 1 31 Centrica Business Solutions 104 44 Centrica Energy 774 1,400 Core CE activities 809 1,
Slide 28: Remeasurements and exceptional items
Remeasurements and exceptional items Exceptional items and statutory profit Year ended 31 December (£m) 2023 Adjusted operating profit 2,752 Re-measurements – Energy supply 506 Re-measurements – Infrastructure assets and Centrica Energy (incl. share of associates) 3,066 Onerous energy supply contrac
Slide 29: Closing Net Cash
Closing Net Cash Year ended 31 December (£m) 2023 2022 Year ended 31 December (£m) 2023 2022 Adjusted EBITDA 3,085 3,993 Free cash flow 2,207 2,487 Dividends received 220 60 Net interest (19) (126) Tax (803) (574) Pension deficit payments (180) (214) Working capital / other 244 (596) Movements in ma
Slide 30: Net investment
Net investment Year ended 31 December (£m) 2023 2022 British Gas Services & Solutions (50) (34) British Gas Energy - (6) Bord Gáis Energy (72) (38) Centrica Business Solutions (114) (35) Centrica Energy (47) (10) Upstream (101) (123) Other 1 (31) (12) Capex (excl. Spirit Norway) (415) (258) Spirit N
Slide 31: Free cash flow
Free cash flow Year ended 31 December (£m) 2023 2022 British Gas Services & Solutions 64 (19) British Gas Energy 302 1,283 Bord Gáis Energy (146) 81 Centrica Business Solutions 220 (48) Centrica Energy 1,354 199 Upstream 1,236 1,539 Other (20) 26 Segmental free cash flow excluding tax 3,010 3,061 Ta
Slide 32: Spirit Energy and Nuclear Hedging positions
Spirit Energy and Nuclear Hedging positions 2024 2025 Volume hedged Average hedged price Volume hedged Average hedged price Spirit Energy 443mmth 174p/th 197mmth 139p/th Nuclear 5.4TWh £153/MWh 1.7TWh £110/MWh 32
Slide 33: Market commodity prices
Market commodity prices Average Brent oil prices Average UK NBP gas prices Average UK baseload power prices ($/bbl) (p/th) (£/MWh) 272p £272 $101 $83 $81 $71 $76 £129 $42 114p £103 104p 68p 74p £63 £68 25p £37 2020 2021 2022 2023 2024 2025 2020 2021 2022 2023 2024 2025 2020 2021 2022 2023 2024 2025