Orsted · OMXCOP:ORSTED

Orsted — DONG Energy — H1 2010 Earnings Presentation

31 slides from Orsted's earnings presentation, Aug 19, 2010

  1. Slide 1: Financials 2010 – First half results

    FINANCIALS 2010 First half results

  2. Slide 2: Disclaimer

    Disclaimer Certain statements in this presentation are based on the beliefs of our management as well as assumptions made by and information currently available to the management. Forward-looking statements (other than statements of historical fact) regarding our future results of operations, financ

  3. Slide 3: Agenda

    Agenda  DONG Energy highlights  Market development  Financials  Outlook  Appendix 3

  4. Slide 4: Highlights first half 2010

    Highlights first half 2010 Key financials Key figures DKKbn  EBITDA up 60% y/y to DKK 7.6bn 16  Rising prices following the cold and dry weather 13.6 14  Positive effect from timing differences compared 12 9.6 10.4 to H1 09 10 9.5 9.0 8.8 8.8 8.2 8.1 7.6  Increased production from new renewable

  5. Slide 5: Further steps to strengthen gas sourcing

    Further steps to strengthen gas sourcing Recent decisions to improve gas sourcing further Diversified gas sourcing strategy  Developing the Marulk gas field  LNG supply agreement with Iberdrola Equity gas Contracts with LNG Exchanges Marulk gas field (E&P) international suppliers (gas hubs)  Loca

  6. Slide 6: Offshore wind – A2SEA & partnership

    Offshore wind – A2SEA & partnership Siemens to become equity partner in A2SEA Offshore partnerships contribute to risk sharing  Siemens will become shareholder (49%) in offshore wind Barrow park installation specialist A2SEA 90 MW Horns Rev Middelgrunden 160 MW 40 MW  DONG Energy will remain main

  7. Slide 7: Anholt and offshore wind industrialisation

    Anholt and offshore wind industrialisation Concession awarded for Anholt Indicative timeline for offshore wind development Efficient and competitive  DONG Energy has been awarded the concession to offshore power build the Anholt offshore wind farm in Denmark plants  Reaping the benefits of the ind

  8. Slide 8: Divestment of stakes in Norwegian hydro assets

    Divestment of stakes in Norwegian hydro assets Divestment of stakes in Nordkraft and Salten Focus on core activities Kraftsamband  The sale of stakes in hydro assets follows the strategy to focus on core activities with a competitive edge  DONG Energy has agreed to sell its ownership interest in N

  9. Slide 9: Investments & capital structure

    Investments & capital structure Gross investments H1 10 Investment plans  DONG Energy's share of net investments is still expected to be (including disposals): 2% 5% 27% Exploration & Production  2010: Around DKK 10bn Generation - thermal Expected divestment of offshore wind transmission DKK Gener

  10. Slide 10: Larger construction projects in DONG Energy

    Larger construction projects in DONG Energy Larger projects with commercial production before end of 2010 Project Type of project DE's share MW(1) Capex/remaining capex(2) Commercial of project start Horns Rev 2 91 offshore wind turbines in DK 100% 209MW DKK 3.7bn /DKK 0.0bn Dec 2009 Karnice and Kar

  11. Slide 11: Agenda

    Agenda  DONG Energy highlights  Market development  Financials  Outlook  Appendix 11

  12. Slide 12: Market situation

    Market situation Unusual weather situation normalising in Q2 10 Rising hydro balance, but still below hist. avg. 30 20 Degrees Celcius 25 Q1 10 Q2 10 10 20 15 0 10 5 Actual -10 TWh 0 Norm -20 -5 -10 -30 -15 -40 -20 -50 Last 9 years range Median 2009 2010 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov D

  13. Slide 13: Green Dark Spreads

    Green Dark Spreads Power prices (monthly average) EUR/MWh 100 90 80 Green Dark Spread (monthly average) Forward prices 70 EUR/MWh 60 80 50 40 60 Forward prices 30 40 20 10 20 0 0 2007 2008 2009 2010 2011 DK1 (west) DK2 (east) EEX Nordpool (system) -20 Source: Nord Pool, EEX, and Argus -40 2007 2008

  14. Slide 14: Oil prices and gas prices

    Oil prices and gas prices Stable oil prices (Crude oil) Gas prices picking up (TTF) USD/bbl EUR/MWh 140 35 120 30 Forward price Forward price 100 25 80 20 60 15 40 10 20 5 0 0 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 Source: Platts Source: Argus Relationship between oil and gas prices EUR/b

  15. Slide 15: Agenda

    Agenda  DONG Energy highlights  Market development  Financials  Outlook  Appendix 15

  16. Slide 16: Selected Financial Figures

    Selected Financial Figures DKK million H1 10 H1 09  EBITDA increased by 60% y/y due to: Revenue 27,691 28,779  Rising prices following the cold and dry weather EBITDA 7,619 4,766  Positive effect from timing differences compared to Profit after tax 2,950 1,335 H1 09 Assets 128,663 119,322  Incre

  17. Slide 17: Exploration & Production

    Exploration & Production Higher production and rising oil prices Operational Text box, Arial figures 16 bold Production highlights  Gas and oil production increased by 4% primarily due to H1 10 H1 09 the gas fields Ormen Lange and Alve Oil & gas production mboe 12.5 12.0  Gas production constitute

  18. Slide 18: Generation

    Generation Significantly higher green dark spreads Operational figures Production highlights H1 10 H1 09  Thermal production was up 6% due to higher green dark spreads in Q1 10 Power production GWh 10,410 9,248  Renewable production rose 57% from contribution from - Thermal GWh 8,529 8,052 new win

  19. Slide 19: Energy Markets

    Energy Markets Less negative time lag effects Operational figures Production highlights  Gas sales increased 42% H1 10 H1 09  Cold weather and low gas prices caused increased gas Gas sales GWh 69,232 48,762 sales in Denmark (including sales to own power plants) and to German Stadtwerke Power sales

  20. Slide 20: Sales & Distribution

    Sales & Distribution Stable earnings Operational figures Production highlights H1 10 H1 09  Gas sales and distribution were up 14% and 11%, respectively, primarily due to the cold weather Gas sales GWh 13,810 12,066  Power sales down 4%, while power distribution was Distribution of gas GWh 6,266 5

  21. Slide 21: Debt overview

    Debt overview Gross interest-bearing debt (incl. hybrid capital) Key ratios gross loan portfolio (incl. hybrid capital) DKKbn 60 H1 10 H1 09 50 0.4 1.5 Share of fixed rate1 83% 90% 0.2 8.1 Other gross debt 40 Duration (years) 6.1 4.9 1.3 Mortgage loans 8.1 11.4 Average time to maturity (years) 2 9.4

  22. Slide 22: Liquidity overview

    Liquidity overview Liquidity reserves – figures Liquidity reserves – Policy DKKbn H1 10 H1 09  Unchanged target to maintain a liquidity reserve of at Cash and cash equivalents 4.0 5.5 least EUR 1.5bn Securities 7.2 4.7  Liquidity reserves changed from EUR 1.5bn of RCF Liquid assets in total 11.2 1

  23. Slide 23: Market risks and hedging

    Market risks and hedging Main market risks Hedging Oil and gas price risk 2010 2011  E&P production and wholesale gas Oil and Gas  On aggregate, long oil/gas Almost Above  A long gas position fully hedged 50% hedged  An oil/gas spread position (long gas, short oil)  Hedging up to 5 years ahead

  24. Slide 24: Agenda

    Agenda  DONG Energy highlights  Market development  Financials  Outlook  Appendix 24

  25. Slide 25: Outlook for 2010 – Commodity prices

    Outlook for 2010 – Commodity prices  As previously expected, EBITDA in H2 2010 will be considerably below H1 update H1 2010, which was positively affected by the cold and dry weather causing higher gas sales and higher power prices Market prices Current Expected at Realized, 12 expectation, Q110 mo

  26. Slide 26: Unchanged Outlook for 2010

    Unchanged Outlook for 2010  New assets and Ormen Lange expected to contribute a further DKK 1.0bn in 2010  Due to higher energy prices, timing differences are expected to be neutral to positive compared to negative in 2009 resulting in:  A somewhat better EBITDA for Energy Markets for 2010 EBITDA

  27. Slide 27: Q&A

    Q&A FOR FURTHER INFORMATION PLEASE VISIT OUR WEBSITE dongenergy.com/EN/Investor/ 27

  28. Slide 28: Agenda

    Agenda  DONG Energy highlights  Market development  Financials  Outlook  Appendix 28

  29. Slide 29: Dividend, Funding and Rating

    Dividend, Funding and Rating Dividend policy Funding strategy and Debt Programmes  The payout ratio(1) is not to exceed 60% and not  External funding primarily to be carried out to be below 40% of net profit after tax through parent company – to avoid structural subordination  The starting point

  30. Slide 30: Net debt calculation H1 10

    Net debt calculation H1 10 DKKbn 45 40.3 40 35 (4.0) 4.0 30.4 0.2 30 (7.2) 26.3 (0.5) (1.3) 25 (1.1) 20 15 10 5 0 30

  31. Slide 31: Investments

    Investments Investments in H1 10 Main gross investments in H1 10 Cash flow from investment activities -8.9bn Wind activities: DKK 2.0bn Purchase of securities (add back) 3.3bn  Walney: DKK 1.2bn Minorities' share of investments (add back) 0.7bn  London Array: DKK 0.4bn Net investments -5.0bn  Gun

DONG Energy — H1 2010 Earnings Presentation on 6ix