Slide 1: Ørsted Q2 2020 Investor presentation
Orsted Q2 2020 eS Investor presentag@
Slide 2: Disclaimer
DISCLAIMER This presentation contains certain forward-looking statements, including but not limited to, the statements and expectations contained in the “Financial Outlook” section of this presentation. Statements herein, other than statements of historical fact, regarding our future results of oper
Slide 3: Second quarter well in line with expectations
Second quarter well in line with expectations Highlights – Q2 2020 • EBITDA totalled DKK 3.0 billion, a decrease of 18% compared to Q2 2019 driven by lower partnership earnings. Adjusting for partnership earnings EBITDA increased by 29% • EBITDA from offshore and onshore wind farms in operation incr
Slide 4: Ørsted and TSMC sign the world's largest renewables CPPA
Ørsted and TSMC sign the world’s largest renewables CPPA CPPA highlights • In June 2018, Ørsted was awarded 920MW for the Greater Changhua 2b & 4 project in Taiwan, at a 20-year fixed feed-in- tariff of 2,548 TWD/MWh (approx. 72.3 EUR/MWh) • On 8 July 2020, Ørsted and Taiwan-based TSMC signed a corp
Slide 5: Construction programme – Offshore
Construction programme – Offshore Changhua Project Borssele 1 & 2 Virginia Hornsea 2 1 & 2a Country Asset type Capacity 752MW 12MW (EPC) 1,386MW 900MW Expected completion Q4 2020 Q4 2020 H1 2022 2022 Status On track On track On track On track Comments All foundations The two turbines Onshore Onshore
Slide 6: Construction programme – Onshore and Markets & Bioenergy
Construction programme – Onshore and Markets & Bioenergy Permian Renescience Project Willow Creek Energy Center Muscle Shoals Northwich Country Asset type 420MWac 80,000 tonnes Capacity 103MW 227MWac 40MWac waste Expected completion Q4 2020 Mid-2021 Q3 2021 2020 Status On track On track On track Del
Slide 7: Expected offshore wind auctions and tenders in 2020 and 2021
Expected offshore wind auctions and tenders in 2020 and 2021 H2 2020 Q4 2020 H1 2021 H1 2021 H2 2021 2021 2021 Maryland 2nd New Jersey 2nd Holland Coast West Maryland 3rd Connecticut 4th German tender Taiwan auction +400MW 2,400MW 1,520MW +400MW +400MW ~900MW Capacity TBA Q4 2020 H1 2021 H1 2021 H2
Slide 8: Q2 2020 – Continued solid, underlying performance
Q2 2020 – Continued solid, underlying performance Q2 2020 EBITDA decreased DKK 669m Offshore EBITDA DKK 2,361m – Down DKK 1,211m DKKm • Reported earnings from operating wind farms increased 1%: – Increased earnings from operational sites due to a 20% ramp-up in Q2 2019 3,625 generation, primarily dr
Slide 9: Q2 2020 – Financial performance
Q2 2020 – Financial performance CFO Net profit Free cash flow CAPEX Net interest-bearing debt development DKKm DKKm Divestments DKKm 1,093 4,485 4,131 7,510 8,197 4,485 757 45 -52 -22,272 -378 -3,368 -3,757 -27,084 -809 -11 31 Mar 2020 Free cash Hybrid Exchange Other 30 Jun 2020 Q2 2019 Q2 2020 Q2 2
Slide 10: Q2 2020 – Financial and non-financial ratios
Q2 2020 – Financial and non-financial ratios FFO / Adj. net debt (last 12 ROCE (last 12 months) Greenhouse gas emissions Safety (year-to-date) months), % % (scope 1 and 2), g CO2e/kWh Total recordable injury rate (TRIR) 58 80 4.0 3.7 64 29 23 11 30 Jun 2019 30 Jun 2020 30 Jun 2019 30 Jun 2020 30 Jun
Slide 11: 2020 guidance and long-term financial estimates and policies
2020 guidance and long-term financial estimates and policies 2020 guidance DKKbn Financial estimates EBITDA without new partnerships 16-17 Total capex spend, 2019-2025 DKK 200bn Gross investments 28-30 Capex allocation split, 2019-2025: - Offshore 75-85% Business unit EBITDA FY 2020 vs. FY 2019 Dire
Slide 12: Q&A
Q&A Conference call DK: +45 78 15 01 10 UK: +44 333 300 9035 US: +1 844 625 1570 For questions, please press 01
Slide 13: Appendix
Appendix Orsted
Slide 14: Renewable capacity as of 30 June 2020
Renewable capacity as of 30 June 2020 Indicator Unit H1 2020 FY 2019 H1 2019 Installed renewable capacity Installed renewable capacity MW 10,439 9,870 8,303 The installed renewable capacity is calculated as - Offshore wind power MW 6,820 6,820 5,602 the cumulative renewable gross capacity installed
Slide 15: Offshore wind build-out plan
Offshore wind build-out plan Installed capacity 920 14,854 MW 1,142 1,220 Under construction 1,714 Awarded 900 9,858 1,386 752 6,820 Installed Borssele Hornsea 2 Greater Decided (FID’ed) US North- US Mid-Atlantic German Greater Decided (FID’ed), capacity 1&2 Changhua and installed East cluster1 clus
Slide 16: Offshore market development – US
Offshore market development – US • Bill currently under consideration to increase offshore wind target to at least 5.2GW by 2035 Massachusetts • Next auction of 800-1,600MW expected in H2 2021 • Legislation signed approving procurement of 2GW of offshore wind capacity by 2030, of which Connecticut 1
Slide 17: Offshore market development – UK and Continental Europe
Offshore market development – UK and Continental Europe • Target annual build-out of 3GW to reach 40GW capacity by 2030 United • Development consent order for Hornsea 3 is postponed to 31 December 2020 Kingdom • Auction framework for 7GW new lease areas announced. Expected autumn 2020 • New leasing
Slide 18: Offshore market development – APAC
Offshore market development – APAC • Taiwan has met its target of awarding 5.5GW to be commissioned by 2025 • An additional 10GW offshore wind to be constructed between 2026-2035 Taiwan • Third round auction rules expected to be announced by the end of 2020 • 600MW Greater Changhua 3 project ready f
Slide 19: Onshore build-out plan
Onshore build-out plan ~5,000 Installed capacity MW Under construction 227 2,315 420 1,565 103 Installed Willow Creek Permian Muscle Shoals Decided 2025 capacity Energy Center1 (FID’ed) ambition Q2 2020 and installed capacity SPP North, ERCOT, SERC, Region SD TX AL Expected Q4 2020 Mid-2021 Q3 2021
Slide 20: Sustainability and ESG at Ørsted
Sustainability and ESG at Ørsted Green leadership Contributing to the global goals ESG ratings of Ørsted • We want to help keep global warming below 1.5°C Rating agency Rating Benchmark Ørsted is a signatory to the UN Global • In Q2 2020, 86% of our energy generation was green. By Compact and adhere
Slide 21: Group – Financial highlights
Group – Financial highlights FINANCIAL HIGHLIGHTS Q2 2020 Q2 2019 D FY 2019 EBITDA DKKm 2,956 3,625 (18%) 17,484 • Offshore 2,361 3,572 (34%) 15,161 • Onshore 312 162 93% 786 • Markets & Bioenergy 185 (115) n.a. 1,495 Net profit – continuing operations (809) 1,093 n.a. 6,100 Net profit – discontinue
Slide 22: Offshore – Financial highlights
Offshore – Financial highlights FINANCIAL HIGHLIGHTS Q2 2020 Q2 2019 D FY 2019 Wind speed (m/s), offshore wind farms EBITDA DKKm 2,361 3,572 (34%) 15,161 12.1 • Sites incl. O&Ms and PPAs 2,578 2,552 1% 13,750 10.4 10.0 9.7* 9.2 8.0 8.0 8.5 • Construction agreements and divestment 396 1,638 (76%) 3,7
Slide 23: Onshore – Financial highlights
Onshore – Financial highlights FINANCIAL HIGHLIGHTS Q2 2020 Q2 2019 D FY 2019 Wind speed (m/s), onshore wind farms EBITDA DKKm 312 162 93% 786 • Sites 103 75 37% 466 7.7 8.0 • Production tax credits and tax attributes 268 140 91% 628 7.8 7.5 7.3 7.3 7.5* 6.6 • Other, incl. project development (59) (
Slide 24: Markets & Bioenergy – Financial highlights
Markets & Bioenergy – Financial highlights FINANCIAL HIGHLIGHTS Q2 2020 Q2 2019 D FY 2019 EBITDA DKKm 185 (115) n.a. 1,495 • CHP plants 152 (126) n.a. 1,152 • Gas markets & Infrastructure (190) (163) 17% 390 • LNG - (41) n.a. (957) • Distribution, B2C and city light 305 261 17% 1,280 • Other, incl.
Slide 25: Currency and energy exposure
Currency and energy exposure Currency exposure Q3 2020 – Q2 2025 Energy exposure Q3 2020 – Q2 2025 DKKbn DKKbn Before hedging Before hedging After hedging After hedging 60.2 20.4 18.2 13.2 6.1 8.2 1.1 0.1 0.0 1.0 1.1 GBP1 USD2 TWD -2.9 Power Gas Oil Risk after hedging, Effect of price +10% Effect of
Slide 26: Natural hedges significantly reduce Taiwan Dollar risk
Natural hedges significantly reduce Taiwan Dollar risk Cash flows from Changhua 1 & 2a Illustrative Risk mitigation Illustrative CAPEX Revenue less OPEX Potential farm-downs 2020 2021 2022 2023 2024 2025 2026 2027+ 2020 2021 2022 2023 2024 2025 2026 2027+ TWD USD, EUR or DKK TWD TWD funding USD, EUR
Slide 27: Capital employed
Capital employed Capital employed, DKKm H1 2020 FY 2019 H1 2019 Capital employed by segment Intangible assets and property and equipment 114,496 106,685 92,364 %, H1 2020 Equity Investments and non-current receivables 2,241 1,044 1,410 Net working capital, work in progress 10,030 8,756 4,551 Offshor
Slide 28: FFO/Adjusted net debt calculation
FFO/Adjusted net debt calculation Funds from operations (LTM) / Adjusted net debt, DKKm H1 2020 FY 2019 H1 2019 EBITDA – Business Performance 18,489 17,484 30,186 Interest expenses, net (1,849) (1,312) (889) Interest expenses, leasing (97) (171) (76) Reversal of interest expenses transferred to asse
Slide 29: Debt overview
Debt overview Gross debt and hybrids Effective funding costs – gross debt (excl. hybrid) Long term gross debt maturity schedule 30 June 2020 30 June 2020 30 June 2020 Cost of Modified Avg. time to DKKbn debt (%) duration (%) maturity (years) 80 Bond loans 3.1 8.7 10.9 Bank loans 2.2 8.4 4.1 70 4.0%
Slide 30: Hybrid capital in short
Hybrid capital in short Hybrid capital can broadly be defined as • Deeply subordinated and only senior to Ørsted has made use of hybrid capital to funding instruments that combine features of common equity maintain our ratings at target level in debt and equity in a cost-efficient manner: connection
Slide 31: Ørsted's outstanding Green Bonds
Ørsted’s outstanding Green Bonds Ørsted A/S Allocated to green Avoided emissions (t CO2/year) Bond Type Face Value Coupon Issue date Maturity projects (in DKK) attributable to the bonds Senior Unsecured EUR 750m 1.5% 24 November 2017 26 November 2029 5,499 733,000 Hybrid capital EUR 500m 2.25% 24 No
Slide 32: Financing strategy
Financing strategy We have a centralised financing strategy All cash flow generated by our subsidiaries as customary for vertically and supports the creditworthiness and rating horizontally integrated European energy of and thus the debt taken up by the utilities. parent company, Ørsted A/S. The str
Slide 33: Currency risk management
Currency risk management General hedging principles • The main principle is to hedge highly certain cash flows • Cost-of-hedging is minimized by netting of exposures, use of local currency in construction contracts and debt in local currency. Managing outright long risk (GBP) • Operations: minimum 5
Slide 34: Interest rate and inflation risk management
Interest rate and inflation risk management Four risk categories of assets and debt allocation Objectives of interest rate and inflation risk management Illustrative 1. Protect long-term real value of equity by offsetting interest and inflation risk exposure embedded in assets by allocating debt wit
Slide 35: Energy risk management
Energy risk management Risk picture Hedging of open exposure • We manage market risks to protect Ørsted against market price volatility and • Open energy exposure is reduced actively ensure stable and robust financial ratios that support our growth strategy • Minimum hedging requirements are determi
Slide 36: Glossary
Glossary Availability Wind and solar-based generation is computed as the input from the Power generation Availability is calculated as the ratio of actual production to the individual plant (wind and solar), as there is only one source of power Power generation from wind farms is determined as gener
Slide 37: Investor Relations contacts
Allan Bødskov Andersen Rasmus Hærvig Head of Investor Relations Manager alban@orsted.com rakol@orsted.com Sabine Lohse Alex Morgan Henriette Stenderup Senior Investor Relations Officer Lead Investor Relations Officer IR Coordinator sablo@orsted.com alxmo@orsted.com hnste@orsted.com