Orsted · OMXCOP:ORSTED
Orsted — Ørsted — Q1 2022 Earnings Presentation
40 slides from Orsted's earnings presentation, Apr 29, 2022
Slide 1: Investor presentation Q1 2022
Investor presentation Q1 2022 29 April 2022
Slide 2: Disclaimer
DISCLAIMER This presentation contains certain forward-looking statements which include projections of our short- and long-term financial performance and targets as well as our financial policies, including but not limited to, the statements and expectations contained in the “Financial Outlook” secti
Slide 3: Strong operational and financial results and continued strategic progress
Strong operational and financial results and continued strategic progress with full-year EBITDA guidance unchanged Strategic highlights – Q1 2022 • Completed 50 % farm-down of Borkum Riffgrund 3 to Glennmont Partners • Signed agreement to farm-down 50 % of Hornsea 2 to AXA IM Alts and Crédit Agricol
Slide 4: Potential of +60 GW offshore wind by 2035 in Europe
Potential of +60 GW offshore wind by 2035 in Europe with new accelerated societal value-approach Operational capacity1 230 Increased offshore wind GW ambitions Accelerated build-out 30 +35 % Current build-out targets additional 30 GW by 2030 30 capacity (up from 20 GW) Operational 170 Up to 50 GW by
Slide 5: Ørsted construction programme and pipeline
Ørsted construction programme and pipeline Gross renewable capacity1 MW 1,498 26,156 Offshore 1,045 2,080 Onshore 920 3,214 Other (incl. biomass and PtX) 4,704 1,628 680 2 17,851 1,166 130 375 2,080 900 1,320 13,278 4,704 2,078 3,649 19,372 11,067 7,551 Installed Hornsea 2 Greater German South Onsho
Slide 6: Offshore wind auctions and tenders in 2022/2023
A significant number of offshore wind auctions and tenders will come in 2022/2023 Outcome in 2022 H2 20222 H2 2022 2023 2023 New Jersey offshore Floating ORESS 1 German tender1 CFD AR 5 wind transmission 3,000 - 4,000 MW 1,900 - 2,500MW 8,000 - 9,000 MW TBA H1 2022 H2 2022 H2 2022 – H1 2023 2023 202
Slide 7: Significant EBITDA increase driven by operational assets, CPS provision reversal, farm-down gain
Significant EBITDA increase driven by operational assets, reversal of CPS provision, and farm-down gain EBITDA of DKK 9.4 bn, up DKK 4.6 bn on Q1 2021 EBITDA excluding new partnerships increased DKK 3.0 bn DKKm • Wind speeds in Offshore higher than both norm and last year (11.3 m/s in Q1 Q1 2021 4,8
Slide 8: Net profit, net interest-bearing debt, and credit metric
Net profit, net interest-bearing debt, and credit metric Net profit Cash flow and net debt FFO / Adj. net debt DKKm DKKm % 5,701 6,832 470 30,026 281 53 59 24,280 37 -1,927 25 1,598 Q1 2021 Q1 2022 31 Dec CFO CAPEX Divest- Hybrid Lease Exchange 31 Mar 31 Mar 2021 31 Mar 2022 2021 ments coupon obliga
Slide 9: Financial and non-financial ratios
Financial and non-financial ratios ROCE Taxonomy-eligible KPIs Green share of energy Safety %, last 12 months %, YTD generation, %, YTD Total recordable injury rate, YTD 19.0 92 3.0 87 Revenue 68 7.5 1.3 OPEX 79 31 Mar 2021 31 Mar 2022 31 Mar 2021 31 Mar 2022 31 Mar 2021 31 Mar 2022 ROCE of 19 % Gre
Slide 10: 2022 guidance, strategic ambition and financial guidance
2022 guidance, strategic ambition and financial guidance 2022 guidance DKKbn Strategic ambition and financial guidance EBITDA (without new partnerships) 19 – 21 Ambition for installed renewable capacity by 2030 ~50 GW Gross investments 38 – 42 - Offshore ~30 GW - Onshore ~17.5 GW Business unit EBITD
Slide 11: Q&A
Q&A Earnings call DK: +45 78 15 01 10 UK: +44 333 300 9261 US: +1 646 722 4956 For questions, please press 01
Slide 12: Appendix
Appendix Orsted
Slide 13: Renewable capacity as of 31 March 2022
Renewable capacity as of 31 March 2022 Indicator, MW, gross Q1 2022 Q1 2021 Δ 2021 Installed renewable capacity The installed renewable capacity is calculated as the Installed renewable capacity 13,278 11,318 1,960 12,980 cumulative renewable gross capacity installed by Offshore, wind power 7,551 7,
Slide 14: Forecasted renewable capacity build-out
Forecasted renewable capacity build-out Global renewable energy capacity Global offshore wind capacity North American renewable capacity by technology1 excl. mainland China by technology2 GW installed GW installed GW installed CAGR 2 % biomass Americas Biomass 32% Batteries Asia Pacific +26 GW/year
Slide 15: Offshore wind build-out plan
Offshore wind build-out plan Installed capacity MW 1,498 19,372 Under construction 1,045 920 Awarded 3,214 1,628 1,166 130 11,067 900 1,320 7,551 Installed Hornsea 2 Greater German South Fork Decided US North- US Mid-Atlantic Greater Baltica Baltica Decided capacity Changhua Portfolio1 (FID’ed) and
Slide 16: Offshore market development – UK & Ireland
Offshore market development – UK & Ireland • UK Government target annual build-out of 3 GW to reach 40 GW capacity by 2030 (including 1 GW of floating wind by 2030) • Commitment to decarbonise electricity system by 2035 and binding target to reach net zero emissions by 2050 • CFD auctions to be held
Slide 17: Offshore market development – Continental Europe
Offshore market development – Continental Europe • New Government has ambitions to increase offshore wind targets to 30 GW by 2030, 40 GW by 2035 and 70 GW by 2045. New tender design currently in parliamentary Germany process and expected to be formalized in H2 2022 • Tender volumes for 2023 have be
Slide 18: Offshore market development – US
Offshore market development – US • Target of 5.6 GW offshore wind by 2027, of which 3.2 GW has already been awarded, through and including December 2021 awards Massachusetts • Next auction expected in late 2023 • Target of 2 GW of offshore wind capacity by 2030, of which 1.2 GW remains available Con
Slide 19: Offshore market development – APAC
Offshore market development – APAC • Taiwan has met its target of awarding 5.5 GW to be commissioned by 2025 • 600 MW Greater Changhua 3 project ready for future auctions Taiwan • Third round auction announced with 15 GW offshore wind target to be constructed from 2026-2035, up from 10 GW previously
Slide 20: Upcoming offshore seabed competition 2022/2023
Upcoming offshore seabed competition 2022/2023 Ongoing H1 2022 H1 2023 Q2 / Q3 20231 2023 Poland North Carolina Sørlige Nordsjø II Central Atlantic Utsira Nord ~ 12 GW > 1.3GW site 1 TBC 1.5 GW 1.5 GW H2 2022 H2 2022 Q4 2022 / Q1 2023 1 H2 2023 1 2023 Scotland INTOG2 California Gulf of Mexico Oregon
Slide 21: Power-to-X: Hydrogen & green fuels project pipeline of +3GW
Power-to-X: Hydrogen & green fuels project pipeline of +3GW Heavy Chemicals & Refineries Steel H2 Green Hydrogen MeOH eMethanol eKerosene transport fertilizers Project Maximum Country Application Product(s) Partners potential (MW) 1 H2RES 2 H2 Everfuel, DSV, GHS, +more Maersk, SAS, CPH Airport, 2 Gr
Slide 22: Overview of US offshore wind federal permitting process
Overview of US offshore wind federal permitting process Planning & Analysis Leasing Site Assessment Construction & Operations BOEM1 conducts a BOEM conducts BOEM grants developer Submit COP for NOI Construction and Operations Plan (COP) process of area auctions and up to five years (not all identifi
Slide 23: Onshore build-out plan
Onshore build-out plan Installed capacity MW Under construction 518 29 16 4,704 430 3,649 62 Installed Kennoxhead 1 Old 300 Helena Energy Lisheen 3 Ballykeel Decided capacity Center1 (FID’ed) and Q1 2022 installed capacity Region Scotland, UK ERCOT, TX ERCOT, TX Ireland Northern Ireland Expected 202
Slide 24: Sustainability and ESG at Ørsted
Sustainability and ESG at Ørsted Green leadership Contributing to the global goals ESG ratings of Ørsted • In Q1 2022, 92 % of our energy generation was green. We target 99 % green energy generation by 2025. Rating agency Score Benchmark Ørsted is a LEAD participant of the UN • By 2025, we aim to be
Slide 25: ESG Performance
ESG Performance Total heat and power generation Q1 2022 Greenhouse gas emission intensity Scope 3 greenhouse gas emissions, Energy source, % g CO2e/kWh million tonnes CO2e Offshore wind Sustainable biomass Scope 3 Other scope 3 emissions Onshore wind Coal Scope 1-2 Natural gas sales Solar PV Natural
Slide 26: Group – Financial highlights
Group – Financial highlights FINANCIAL HIGHLIGHTS Q1 2022 Q1 2021 D FY 2021 FY 2020 D EBITDA DKKm 9,429 4,863 94 % 24,296 18,124 34 % - New partnerships 1,610 - n.a. 8,507 - n.a. - EBITDA excl. new partnerships 7,819 4,863 61 % 15,789 18,124 (13 %) • Offshore 5,919 3,946 50 % 18,021 14,750 22 % • On
Slide 27: Offshore – Financial highlights
Offshore – Financial highlights FINANCIAL HIGHLIGHTS Q1 2022 Q1 2021 D FY 2021 FY 2020 D Wind speed (m/s), offshore wind farms EBITDA DKKm 5,919 3,946 50 % 18,021 14,750 22 % 11.3 10.6 • Sites, O&Ms and PPAs 3,698 4,886 (24 %) 13,059 15,476 (16 %) 10.5 10.0* 9.1 7.8 7.6 • Construction agreements and
Slide 28: Onshore – Financial highlights
Onshore – Financial highlights FINANCIAL HIGHLIGHTS Q1 2022 Q1 2021 D FY 2021 FY 2020 D Wind speed (m/s), US onshore wind farms EBITDA DKKm 85´0 228 273 % 1,349 1,131 19 % • Sites 496 44 1,027 % 535 451 19 % 7.7 7.7 7.3 7.9 7.4 7.3* • Production tax credits and tax attributes 568 283 101 % 1,382 1,0
Slide 29: Bioenergy & Other – Financial highlights
Bioenergy & Other – Financial highlights FINANCIAL HIGHLIGHTS Q1 2022 Q1 2021 D FY 2021 FY 2020 D EBITDA DKKm 2,514 622 304 % 4,747 2,136 122 % • CHP plants 1,823 676 170 % 3,202 1,111 188 % • Gas Markets & Infrastructure 725 19 n.a. 1,829 411 345 % • Other, incl. project development (34) (73) (53 %
Slide 30: Currency and energy exposure
Currency and energy exposure Currency exposure Q2 2022 – Q1 2027 Energy exposure Q2 2022 – Q1 2027 DKKbn DKKbn Before hedging Before hedging After hedging After hedging 81.8 100.8 21.4 29.8 10.3 9.5 2.7 3.3 0.0 -7.2 -1.0 -0.2 -2.0 -1.2 GBP1 USD2 NTD2 Power Gas Oil Spread (power) Risk after hedging,
Slide 31: Hedging levels
Hedging levels Hedging level of total exposures for each BU, as of 31/12/2021 Offshore 100% 95% 67% 51% 26% Year 1 Year 2 Year 3 Year 4 Year 5 Onshore 79% 80% 77% 78% 78% Year 1 Year 2 Year 3 Year 4 Year 5 Bioenergy 31% 13% 4% Year 1 Year 2 Year 3 Exposure is calculated as the expected production (o
Slide 32: Capital employed
Capital employed Capital employed, DKKm Q1 2022 FY 2021 Q1 2021 FY 2020 Capital employed by segment Intangible assets, and property and equipment 166,727 162,939 131,008 122,249 %, Q1 2022 Offshore Assets classified as held for sale, net 684 860 657 793 Onshore Equity investments and non-current rec
Slide 33: FFO/Adjusted net debt calculation
FFO/Adjusted net debt calculation Funds from operations (FFO), DKKm 31 Mar 2022 31 Dec 2021 31 Mar 2021 EBITDA (Business performance for 2020) 28,862 24,296 16,182 Change in provisions and other adjustments (1,820) (422) (265) Change in derivatives (5,203) (2,050) 795 Reversal of gain (loss) on dive
Slide 34: Debt and hybrids overview
Debt and hybrids overview Total gross debt and hybrids Effective funding costs – Gross debt Maturity profile 31 March 2022 , DKKbn Cost of Modified Avg. time to DKKbn debt (%) duration (%) maturity (years) Bond loans 2.8 8.1 9.7 18.2 68.8 Bank loans 1.9 3.9 4.7 15.5 Total 2.6 7.2 8.7 13.9 27% 7.2 3.
Slide 35: Hybrid capital in short
Hybrid capital in short Hybrid capital can broadly be defined as funding Due to hybrid’s equity-like features, rating Accounting treatment instruments that combine features of debt and agencies assign equity content to the hybrids when • Hybrid bonds are classified as equity equity in a cost-efficie
Slide 36: Ørsted's outstanding bonds
Ørsted’s outstanding bonds Principal Allocated to green Avoided emissions (t CO2/year) Bond Type Issue date Maturity Face Value Coupon Coupon payments Green bond amount projects (DKKm) attributable to the bonds Senior Unsecured Sep. 2012 19 Sep. 2022 EUR 750m EUR 517m 2.625% Every 19 Sep. No n/a n/a
Slide 37: Financing strategy
Financing strategy At Ørsted, we have a centralised financing The financing strategy optimizes the strategy utilising our strong balance sheet effect of a fully integrated cash pool and diverse portfolio. where cash at practically all of the The strategy supports: company’s more than 200 subsidiarie
Slide 38: Currency risk management
Currency risk management General principles • Highly certain cash flows are hedged • Cost-of-hedging is minimized by netting of exposures in the portfolio of projects, as well as use of construction contracts and debt in local currencies. Managing outright long risk • Operations: 5-year minimum hedg
Slide 39: Inflation and interest rate risks
Inflation and interest rate risks 2022-2031 revenue from assets in operation, under construction, and awarded before debt, % 100 ~55 ~35 ~20 ~10 ~35 Total revenue Inflation-indexed Merchant Fixed nominal cash Fixed nominal cash Duration-matched Derivatives1 Net inflation risk flows from assets flows
Slide 40: Investor Relations contacts
Rasmus Hærvig Henriette Stenderup Head of Investor Relations IR Coordinator rakol@orsted.com hnste@orsted.com Alex Morgan Sabine Lohse Lead Investor Relations Officer Senior Investor Relations Officer alxmo@orsted.com sablo@orsted.com