Slide 1: Financial Report 9M 2015 Investor Presentation
FINANCIAL REPORT 9M 2015 I N V E S T O R P R E S E N TAT I O N 29 October 2015 9M 2015 RESULTS 1
Slide 2: Disclaimer
Disclaimer Certain statements in this presentation are based on the beliefs of our We urge you to read our annual report available on our website at management as well as assumptions made by and information currently www.dongenergy.com for a discussion of some of the factors that could available to
Slide 3: Continued strong earnings
Continued strong earnings Highlights 9M 2015 Group EBITDA Strong results despite low oil prices (DKKbn) EBITDA of DKK 14.8bn (up 14% y/y) +14% 16.4 15.0 14.8 13.7 13.0 Solid credit metrics (FFO/Adjusted net debt of 35%) Net profit of DKK 3.2bn (up from DKK 0.9bn in 9M 14) 8.6 ROCE rising t
Slide 4: Decision to build Walney Extension
Decision to build Walney Extension Walney Extension to become the world’s largest operating DONG Energy’s UK offshore wind presence wind farm (660MW) once operational in 2018 UK installed capacity currently amounts to 1.7GW UK installed capacity expected to reach 4.4GW by 2020 Walney Extensi
Slide 5: IPO roadmap
IPO roadmap DONG Energy intends to pursue an IPO within 18 months, subject to market conditions Danish State to remain majority shareholder after an IPO Intention to divest gas distribution as well as oil and gas pipelines to Energinet.dk Full strategic review of E&P to be undertaken – expec
Slide 6: Market conditions and prices
Market conditions and prices OIL AND GAS PRICE UK POWER PRICE USD/bbl EUR/MWh EUR/MWh Oil price Gas TTF (rhs) 140 35 80 Forward prices Forward price 120 30 70 100 25 60 80 60 20 50 40 15 40 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Source: Platts, Argus (forwards from 20 Oct. 2015) Source: L
Slide 7: Financial highlights 9M 2015
Financial highlights 9M 2015 EBITDA – DKK 14.8bn (up 14% y/y) Selected financials (DKKm) 9M 15 9M 14 FY2014 Strong operational performance in WP and E&P Revenue 55,149 49,921 67,048 EBITDA 14,836 13,025 16,389 Contribution from new wind assets Net finance costs -1,653 -1,640 -1,710 Cost reduct
Slide 8: Exploration & Production
Exploration & Production Operational highlights 9M 15 Oil & Gas production (mboe) Oil Gas Production down 5% y/y 41.8 -5% Scheduled shutdown of Ormen Lange for 42 days 31.7 10.6 30.9 29.3 26.4 28.5 in Q2 15 due to connection of new infrastructure 8.2 7.5 7.7 10.0 to the gas treatment plant in Ny
Slide 9: Wind Power
Wind Power Operational highlights 9M 15 Renewable production (TWh) +24% 5.3 5.0 Production up 24% y/y 4.4 4.6 4.2 Contribution from new wind farms West of 3.4 2.8 2.9 4.3 Duddon Sands, Westermost Rough and Borkum 4.9 3.3 Riffgrund 1 0.8 0.8 0.6 0.8 0.9 0.5 Lost production from partial London A
Slide 10: Thermal Power
Thermal Power Operational highlights 9M 15 Thermal heat and power production (PJ, TWh) Heat generation up 11% y/y primarily due to colder 60 20 weather than 9M 2014 15 40 Power generation down 18% y/y due to declining 10 production in Denmark in light of a challenging 20 5 power market with very
Slide 11: Customers & Markets
Customers & Markets Operational highlights 9M 15 Operational figures 9M 14 9M 15 Lower gas and power volumes sold and traded, but Gas sales TWh 94.2 87.1 with very limited earnings impact Power sales TWh 21.9 22.3 Distribution of gas increased by 6% y/y due to Distribution of gas TWh 5.4 5.7 col
Slide 12: Debt overview
Debt overview Net debt development 9M 15 Gross debt and hybrids 9M 15 1% 19% Bonds 6.8 2.3 13.4 Hybrids 14.6 55% 0.6 Bank loans 25% 4.0 Other debt incl. repo Net debt Capex Operating Divestments Other 1 Net debt cash flow EoY 2014 end of Key ratios loan portfolio2 Q4 14 9M 15 9M 15 Note (1): Other i
Slide 13: Outlook – unchanged
Outlook – unchanged EBITDA DKK 17-19bn in 2015 Net investments DKK 35-40bn for 2015-2016 FFO/Adjusted net debt Above 30% in 2015 9M 2015 RESULTS 13
Slide 14: Q&A
Q&A (to ask a question on the conference call, press 01 on the telephone key pad) 9M 2015 RESULTS 14
Slide 15: Appendix
APPENDIX 9M 2015 RESULTS 15
Slide 16: Comparison Q3 15 vs. Q3 14
Comparison Q3 15 vs. Q3 14 EBITDA Q3 15 y/y by Business Units Group financials (DKKm) Q3 15 Q3 14 Revenue 17,294 14,048 EBITDA 4,431 3,211 E&P – up 54% y/y Net profit 458 -573 Higher gas production from Ormen Lange (temporary effect from the redetermination) Assets 157,663 156,000 Lower costs in
Slide 17: Market prices
Market prices Forwards as of Actual, Actual, 20 Oct. 2015 9M 15 9M 14 (rest of year) (average) Oil, Brent USD/bbl 48 55 107 Gas, TTF EUR/MWh 18 21 20 Gas, NBP EUR/MWh 19 21 21 Electricity, Nord Pool system EUR/MWh 24 21 29 Electricity, Nord Pool, DK1 EUR/MWh 26 24 31 Electricity, EEX EUR/MWh 33 31 3
Slide 18: Investments
Investments Investments in 9M 15 Gross investments on Business Units in 9M 15 Cash flow from investing activities -10,530 6% Purchase and sale of securities (reversal) - 3,366 5% E&P Wind Power Sale of assets and companies (reversal) - 647 32% Thermal Power Other - 32 DKK Customers & Markets Gross i
Slide 19: FFO/Adjusted net debt calculation
FFO/Adjusted net debt calculation FFO/Adjusted net debt LTM Q3 15 LTM Q3 14 2014 EBITDA 18,201 16,814 16,389 Adjusted net interest expenses -2,129 -2,623 -2,494 Net interest expenses -656 -1,372 -1,145 Capitalised interest -419 -259 -339 Interest element of decommission obligations -475 -396 -416 50
Slide 20: Financial targets by Business Units
Financial targets by Business Units ROCE LTM 9M 15 Target 2016 Target 2020 -3.9% (7.0% Group >10% >12% excl. writedowns) E&P -22.8% (14.7%) ~12% on average for 2015-2020 WP 4.9% (4.9%) 6-8% 12-14% C&M 3.0% (6.9%) >8% >10% TP Negative FCF1 Target 2018: Positive FCF1 Note (1): Free Cash Flow (FCF) def