Slide 1: Interim Financial Report First Nine Months 2013
INTERIM FINANCIAL REPORT FIRST NINE MONTHS 2013 Moving Energy Forward 23 October 2013
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: 9M 2013 highlights: Financials
9M 2013 highlights Financials 9M 2013 RESULTS 3
Slide 4: Strong earnings improvement
Strong earnings improvement Highlights 9M 2013 Group EBITDA EBITDA of DKK 11.2bn (up 69% y/y) DKKbn FFO of DKK 9.1bn (up 27% y/y) 14.1 13.7 +69% Net debt of DKK 29.9bn (down 7% vs. EoY 2012) 11.2 Adj. Net debt/EBITDA1 of 2.8x vs. 4.0x (3.0x excl. 9.3 8.6 non-cash provisions) in 2012 6.6 Outl
Slide 5: 2013-14 Financial Action Plan
2013-14 Financial Action Plan Update 9M 2013 Divestments of DKK 9.3bn (EV) in 2013 1 Divest DKK 10bn of non-core assets Few additional non-core divestments in progress for 2014 2 Selective farm-down of core assets Execution of farm-downs progressing as planned Full year target of DKK 1.2bn a
Slide 6: Cost reductions on track
Cost reductions on track Assumptions for like-for-like comparison Group OPEX Target of DKK 1.2bn cost savings measured on a DKKbn like-for-like basis 0.1 Adjustments for OPEX growth driven by new 8.4 0.3 0.5 offshore wind farms, more conservative capitalising and timing effect of costs for Siri
Slide 7: Equity injection
Equity injection Terms negotiated with Goldman Sachs and Danish pension funds ATP and PFA to inject DKK 11bn through new shares The investment will be conditional upon conclusion of final agreements between the parties as well as: - Confirmatory due diligence investigations by the investors - Po
Slide 8: Current key priorities for DONG Energy
Current key priorities for DONG Energy 2013 2014 2015 Divest 10bn of non-core assets Selective farm-down of core assets Biomass conversions Cost reductions Final non-core assets divestment E&P: Hejre on time/budget Restructuring of midstream gas E&P: Laggan-Tormore on WP: Westermost R. on time
Slide 9: 9M 2013 highlights: Financials
9M 2013 highlights Financials 9M 2013 RESULTS 9
Slide 10: Market conditions and prices
Market conditions and prices HYDRO BALANCE (TWh) POWER, GAS, COAL & CO2 – INDEXED PRICES 20 Coal price CO2 price Gas (TTF) Power price, DK 2012 Jan 2011=100 10 Forward prices 0 150 -10 2013 -20 100 -30 -40 50 -50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0 Range 2005-2012 Median 2005-2012 2011
Slide 11: Financial highlights 9M 2013
1 Selected financial figures 9M 2013 9M 2012 2012 Financial highlights 9M 2013 (DKKm) Revenue 49,010 51,235 67,179 EBITDA 11,215 6,647 8,639 EBITDA – DKK 11.2bn (up 69% y/y) Financial items, net -2,456 -1,234 -1,356 New wind farms brought on stream and gain from Profit after tax 52 -2,401 -4,021 c
Slide 12: Exploration & Production
Exploration & Production Oil & Gas production (mboe) Oil Gas 28.5 -4% 26.4 24.0 24.4 Operational highlights 22.2 21.3 Fields with temporary production disruptions brought 7.9 5.9 back into production in September/October 14.3 15.4 FY2013 production growth (y/y) expected despite the production di
Slide 13: Wind Power
Wind Power Renewable production (TWh) 5 30% 4 Operational highlights 20% 3 Increased production in 9M 13 (up 16% y/y) from 2 new wind farms 10% 1 London Array: All turbines producing in April 2013 0 0% Anholt: All turbines producing in June 2013 2008 2009 2010 2011 2012 9M 12 9M 13 Lincs: Al
Slide 14: Thermal Power
Thermal Power Thermal heat and power production (TJ, TWh) 60 20 Operational highlights 15 40 Increased power production in 9M 13 (up 30% y/y) 10 due to higher Green Dark Spread (GDS): 20 5 ‒ Higher power prices driven by cold weather and 0 0 lower hydro balance in Norway and Sweden 2008 2009 2010
Slide 15: Customers & Markets
Customers & Markets Operational highlights Operational figures 9M 13 9M 12 Decreased gas sales y/y due to lower sales on gas Gas sales TWh 95.7 105.4 hubs and lower wholesale of gas Power sales TWh 12.3 9.1 Higher power sales y/y from increased wind power Distribution of gas TWh 6.7 6.4 producti
Slide 16: Debt overview
Debt overview Gross debt incl. hybrid capital (DKKbn) Key ratios loan portfolio1 End 9M 13 End Q4 12 64.2 62.3 Duration 6.2 6.8 13.3 9.5 Hybrid 0.0 Average time to maturity (years) 9.9 10.5 0.3 Other gross debt 15.4 16.9 Average interest rate 3.9% 3.9% Bank loans Note (1): Excluding hybrid capital B
Slide 17: Outlook
Outlook EBITDA DKK 13.5-14.5bn in 2013 (previous guidance DKK 13-14bn) Net investments DKK 30bn in 2013-2014 (unchanged) Adjusted net debt/EBITDA Below 2.5x in 20131 (previous guidance below 2.5x in 2014) Note (1): Conditional upon financial close of equity injection of DKK 11bn in 2013 9M 2013 RESU
Slide 18: Q&A 9M 2013 Results
DONG 9M 2013 RESULTS 18 energy
Slide 19: Appendix
APPENDIX 9M 2013 RESULTS 19
Slide 20: Ten targets defining our ambition and direction
Ten targets defining our ambition and direction 1 ROCE >10% by 2016 and >12% by 2020 2 Adjusted Net Debt/EBITDA < 2.5x 3 CO2 emission reduction to 260g CO2/kWh by 2020 4 From 1.7GW to 6.5GW installed gross offshore wind capacity by 2020 5 Offshore wind cost-of-energy below €100/MWh1 by 2020 6
Slide 21: Clear financial targets
Clear financial targets ROCE >10 % -7.5 2012 2016 EBITDA ~20 DKKbn 8.6 2012 2016 9M 2013 RESULTS 21
Slide 22: Outlook Market Prices 2013
Outlook Market Prices 2013 Current Expectation at Realised estimate AR12 (27 Feb. 9M 13 (rest of 2013) 2013) (average) Oil, Brent USD/bbl 106 107 108 Gas, TTF EUR/MWh 27 26 27 Gas, NBP EUR/MWh 27 27 27 Electricity, Nord Pool system EUR/MWh 37 38 39 Electricity, Nord Pool, DK1 EUR/MWh 39 43 41 Electr
Slide 23: Business Performance – 9M 13
Business Performance – 9M 13 In 9M 13, the difference between Business Performance and IFRS amounted to DKK 0.2bn Business Performance EBITDA DKK 11.2bn Adjustments DKK -0.2bn MtM of financial and physical hedging contracts relating to other periods DKK 0.3bn Deferred losses/gains relating to fina
Slide 24: Dividend, Funding and Rating
Dividend, Funding and Rating Long term capital structure target Funding strategy and Debt Programmes Maintain a minimum rating of BBB+ / Baa1 External funding primarily to be carried out through Adjusted net interest-bearing debt (1) up to 2.5 times parent company – to avoid structural subordi
Slide 25: Net debt calculation 9M 13
Net debt calculation 9M 13 50.9 2.2 14.8 6.6 36.5 2.5 29.9 0.2 1.3 Gross debt incl. Repo’ed mark. Marketable Cash & cash Receivables Other Net debt 50% hybrid capital Adjusted REPO’ed mark. securities Securities equivalents from associates net debt securities 9M 2013 RESULTS 25
Slide 26: Investments
Investments Investments in 9M 13 Main gross investments in 9M 13 Cash flow from investing activities 8.4bn Wind activities: DKK 7.7bn Purchase of securities -9.8bn Anholt DKK 1.9bn Sale of securities 7.7bn West of Duddon Sands DKK 1.7bn Loans to jointly controlled entities 0.8bn Borkum Riffgru
Slide 27: Larger decided construction projects
Larger decided construction projects Larger ongoing projects with production start in 2013-2016 Country MW (1) Commercial Own share of Announced Project Type of project operation date(2) project capex (3) Syd Arne phase 3 Oil/gas field DK n.a. 2013 36.8% DKK 2.7bn(5) Laggan-Tormore Oil/gas field UK