Origin Energy Limited · ASX:ORG
Origin Energy — Debt Investor Presentation (January 2003)
35 slides from Origin Energy's debt investor presentation, Jan 31, 2003
Slide 1: Presentation to US Investors
Origin energy To Company Announcements Office Facsimile 1300 300 021 Company Australian Stock Exchange Limited Date 31 January 2003 From Bill Hundy Pages 35 Subject PRESENTATION TO US INVESTORS Please find attached a copy of a presentation that Managing Director Mr Grant King and Treasurer Mr Peter
Slide 2: Investor Presentation January 2003
Investor Presentation January 2003 Presenters Grant King - Managing Director Peter Rice - Treasurer Origin Page 2
Slide 3: Corporate Overview
Vase Corporate Overview Origin listed on the Australian stock exchange in January 2000 following the de-merger from Boral Limited. its key businesses are... Generation * Total capacity 886 MW oMt Stuart +Osborne Roma +Ladbroke Grove +BP Buiwer island Today, Origin Energy Quarantine owns develops and
Slide 4: A growing market and a growing company
These businesses give Origin access to end use sales of electricity, natural gas and LPG of around $25 billion pa. Sales of related products and services are estimated at a further $6.5 billion pa. A GROWING MARKET Growth in domestic demand for energy has averaged over 4% per annum over the last 20
Slide 5: Companies pursued different strategies in response to change
Companies pursued different strategies in response to this change. Gas Power Retail Net- | + Asset sales Prod’n Gen. works attracted overseas tici ts, b Australian Entities Franny iets} udeed Origin e e e ry the profitability & constraints of AGL ° e e individual market BHP e segments, Many . are no
Slide 6: In the last two years revenues have increased by 60%
in the last two years revenues have increased by 60%, profit after tax is up 70%, operating cash flow has doubled, and the scope of operations increased substantially. Jan 2000 Aug 2002 % change Upstream Reserves 1,023 **41 530 50% (PJe*} Generation Interests 3506 886 153% (MW) Retail customers 1.2
Slide 7: OCAT Ratio has steadily improved over the past three years
OCAT Ratio has steadily improved over the past three years and significantly exceeds our cost of capital. Jun00 Jun01 Jun 02 (Sm) Sm) Sm) EBITDA 271 305 405 Non-cash items (8) (8) (17) Change in Working Capital (20) 11 16 Stay in business CAPEX (67) (83) (65) Tax/Subvention Payments (36) (24) (40) O
Slide 8: Cash flows backed by long-term contracts provide stable cash flows
Cash flows backed by long-term contracts provide stable and predictable cash flows to service long term debt obligations. + Origin has fong term woo operational ; experience managing business risk and has appropriate insurance cover in place + Counterparty credit risk is limited to government and ot
Slide 9: Key risks, sensitivities and mitigating actions
Key risks, sensitivities and mitigating actions include., Non-contractual Risk Risk Cash Flow Sensitivity Cash Flow Parameter Management Retail Etectricity Price Merchant 100% peak demand covered two generation years forward Direct contracts | The hedge book is structured such with generators | that
Slide 10: Strategic focus provides opportunities for growing cash flows
Origin’s strategic focus continues to provide opportunities for growing cash flows while effectively * ‘ uci managing risk | Projects initiated but not 1 Fae Stuart gewer station: 286 Ay hte, Stet 268 Alyy ced * Projects contributing in the FY 01 /02 Ys Acquisition of ; sie | Fairview / Burhan Farth
Slide 11: Strategy and performance resulted in a unique position
Origin’s strategy and performance have resulted ina unique position in the Australian energy market. 137 287 50 23 26 23 Y \ 486 ‘ 1,929 Revenue Ebitda Operating Cash Flow (2,429) (413) (353) 182 243 wna vo «= ®.-—s«éRetail revenue reflects @ Retai high volume fow margin Generation business © Networ
Slide 12: Financial Strategy & Review
yrigin ay P14 ener 3 Vv zB ? aud red Financial Strategy & Review Key financial policies focus on maintaining a conservative financial profile. ¢ Targeted dividend payout ratio of 40% « Minimum acceptable EBITDA to Interest cover ratio of 6.0 times + Target gearing band of 50 to 60% Net Debt to Equit
Slide 13: Commitment to maintain conservative financial profile
Commitment to maintain this conservative financial profile. + We will raise equity if outside internai policy limits for prolonged period + Commitment evidenced via $123 million share placement and $75 million retail share offer in 2001 to fund PowerCor acquisition + Large retail shareholder base (1
Slide 14: Track record of delivering revenue and EBITDA growth
Origin has established a track record for delivering Revenue and EBITDA growth. Jun 00 Jun 01 Jun 02 (SMil) (SMil) ——_(SMil) Total revenue 1,530 1,687 2,437 EBITDA 271 305 405 EBIT 131 173 231 Net interest expense (30) (32) (43) Tax expense (23) (38) (54) Outside equity interests (3) (6) (5) PAT 75
Slide 15: EBITDA has grown by nearly 50% over the last two years
EBITDA has grown by nearly 50% over the last two years and ... 450 405 400 5 + EBITDA growth has been driven by 350 - contributions from the electricity and LPG areas of Retail 2 300 Oo = 2507 . . + m1 + Continued improvement in EBITDA for £ 200 5 2003 driven by: 2 450 4 ~ CitiPower contribution ($2
Slide 16: Strong cash flow and equity kept gearing within target
Strong cash flow and additional equity raised has ensured gearing remained within or below target range during a period of significant growth capital expenditure and acquisition activity Page 19 (SMil) Jun 06 Jun Of Jun 02 June 2603 Proforma Current Debt 20 223 85 50") Non-current Debt 430 520 565 5
Slide 17: Debt strategy and proposed terms
During this period of growth, Origin’s debt strategy was to establish itself in the domestic Australian bank and capital markets... Proforma Maturity Profile at 30 June 2003 “? Proforma Maturity Profile at 30 June 2003" ** Average Maturity < 3 years Average Maturity > 6 years Indicative Maturity Spr
Slide 18: Timetable
Timetable Offering Launched: January 23 (Thurs.} Investor Meetings: January 27-30 (Mon, to Thurs.) Investor Conference Call: January 29 (Wed.)} Indications Due: February 5 @ 5:00PM (CST) (Wed.) Investor Due Diligence: February 27-28 (Thurs.-Fri.)(Sydney, Australia) Targeted Closing: March 11 (Thurs.
Slide 19: Operational Review
rigin: z 6 eC Operational Review rigin Lig HG, Hl, Ikke wege yp f nt 0 Soh y PED OEY: Yines BY Se B toa y Gun Exploration and Production
Slide 20: Exploration & Production: EBITDA decreased 7%
Exploration & Production: EBITDA decreased 7% to $186.2m following asset sales and lower oil prices External Sales Revenue & EBITDA ($m) Page 3 140 Revenue EBITDA Capex * * Does not include acquisitions (wis) xade> Lower sales volumes and prices for oil decreased revenue by $15m {$34m before hedging
Slide 21: 340PJ CSG contract with AGL
Origin and its subsidiary OCA have secured a 340PJ CSG contract with AGL over a 13 year period, cementing Origin’s position as the largest CSG producer in Australia. 8 Fairview & Durham Fletds, Centrai Queensland e40hBs ODE 40-270 + Invested $49 m during FY 02 anda further $47m in July 02 in acquiri
Slide 22: Long-term commitment to the Perth Basin rewarded
Origin’s long-term commitment to the Perth Basin was rewarded with several discoveries i » Beharra Springs North 1 ~ commenced production in July 02 with 6 TJ/day » Hovea 1 ~ drilled in October 2001, first oif field in the Perth Basin since 1966 » Four wells drilled in Hovea field, current productio
Slide 23: Retail: EBITDA increased 161%
Retail Retail: EBITDA increased 161% to $173.5 million in FYO2 primarily as a result of increased electricity sales External Sales Revenue ($m) Page 10 EBITDA Revenue* Capex+ * Includes agency sates in Victoria + excludes acquisitions + Contributions from electricity retail business ahead of expecta
Slide 24: Retail business: all areas contributed
Retail business: all areas contributed to the result. Page 1 Natural Gas Electricity LPG Revenue (ASM) 803 825 (650) 402 Gross Margin (ASM) 96 160 (60) 113 Sales - (PJ) 118 - - Sales - (TWh) - 8.4 = (6) - LPG (Ktonnes) - - 489 Total Sales (PJe) 118 30.4 (22) 24.1 Customer # ('000) 986 582 (260) 209
Slide 25: Well prepared for FRC in mass markets
The company is well prepared for FRC in mass markets Electricity + Major systems enhancement and consolidation project completed ~ gives a compliant marketing, sales and customer service capability for existing contestable markets Natural Gas + System enhanced to manage natural gas contestability Or
Slide 26: Generation: EBITDA up 22% to $30 million
Generation Generation: EBITDA up 22% to $30 million largely due to contributions from Worsley and Quarantine. External Sales Revenue & EBITDA ($m) Page 16 $0 EBITDA Revenue Capex* * excludes acquisitions Quarantine power station on line in late December 2001 on time and under budget Mild summer resu
Slide 27: Recent investments in Generation reaching earnings potential
Recent investments in Generation will progressively reach earnings potential through 2002. 2 Ss Fk Page 17 Total Installed Capacity (MW) $ 7 Merchant plant - 250 MW EB@@ Contract plant - 636 MW Mt Stuart Power Station: 288 MW Quarantine Power Station: 96 MW Worsley Cogen*: 120 MW Bulwer ts. Cogen*:
Slide 28: SEA Gas project met financial close
The SEA Gas project met financial close late May and is on target to deliver first gas in early 2004 Pelican Point Expansion g Yetail Maiket Projects in which Origin Energy has direct interests Page 19 Geographe/ ‘Thylacine gee Gas Fields SS0Gree Victoria ail Gas Fiekt H0Gn $500 million joint ventur
Slide 29: Networks: EBITDA increased 4% to $22.9 million
Networks: EBITDA increased 4% to $22.9 million as a result of increased management fees and higher distributions from Envestra. 30 0.8 + Investment in Envestra increased @ Jun-02 by $15.2 million as part of rights -Jun-01 7 0.7 issue y 0.6 » Higher distributions from Envestra uw » Over 24,000 new co
Slide 30: Major Australian energy assets transacted since 1994
Major Australian energy assets transacted since 1994 Date of sate asset Purchaser $m 1994 daoomba Sydowy Pipeline Earl 54 1995 Pipeline Authority of $A Eple Energy 304 United Energy Power Partnership 4,825 Solarts Power AGE 1,087 Eastern Enerey ‘Texas Uuilsties 2,127 Powercor Austradia Scottish Powe
Slide 31: Eastern Australian energy retailers
Eastern Australian energy retailers Market share by number of accounts Includes electricity, natural gas and LPG Listed entities @ Other listed entities & Government B Origin Page 25 + The market has consolidated from around 26 corporations in 4995 to 9 today - 3 publicly owned and 6 owned by the NS
Slide 32: Origin owns 19.1% of Envestra
; tcel + Origin owns 19.1% of Envestra Australian Energy Transmission which owns 18,900 kms of and Distribution Assets natural gas transmission and (kilometres) distribution networks + Origin Energy Asset Management operates and maintains natural gas transmission and distribution networks throughout
Slide 33: Natural gas and LPG businesses
The natural gas business is concentrated in SA and Victoria where per capita consumption is highest and is complemented by Origin’s electricity position in Victoria . 2 Queensland Sates volume: 10 Pipes: Customers: 80,000 be H New South Wales Sales volume: 5 PS Victoria - Gas Sales volume: 55 PJ Cus
Slide 34: Major generation interests
Major generation interests* Merchant piant 250 MW Mt Stuart cogeneration; Major Contract plant 620 MW 288 MW Contract Minor plant Total z — a BP Buiwer Island Worsley cogeneration; cogeneration: 32 MW 126 MW Contract Contract station: 96 MW Merchant * Gross name plate capacity of plants in which Ori
Slide 35: For more information
For more information. For more information on Origin Energy please contact Peter Rice Treasurer Email: peter rice@originenergy.com.au Office: +61-2-9220 6308 Mobile: + 61-4-1723 0306 Fax: +61-2-9235 1661 Alternatively visit our website www.originenergy.com.au and follow the prompts to the investor C
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