Origin Energy Limited · ASX:ORG
Origin Energy — Macquarie ASX 100 Conference 2005
16 slides from Origin Energy's conference presentation, May 2005
Slide 1: Delivering Value for Shareholders in the Australian Energy Sector
Delivering Value for Shareholders in the Australian Energy Sector Presentation to Macquarie ASX 100 Conference May 2005 Presentation outline • Origin’s investment proposition and progress to date • The drivers of Origin’s growth – Retail – Exploration and Production – Generation – Contact • Key issu
Slide 2: Origin's investment proposition and progress to date
Origin’s investment proposition and progress to date Origin’s financial objectives and business strategies were established to respond to changes in the energy industry in the mid 90’s…. • Financial Objective – Steady and predictable cashflows – EPS growth of 10-15% pa on average • Business Strategy
Slide 3: Implementation of strategy has grown operations and profits
Implementation of Origin’s financial objectives and business strategy has grown the company’s operations and profits 2,500 2P Reserves (PJe) 2.5 up 118% Customers (millions) 2,000 EBITDA by Segment (A$, millions) 2.0 up 79% 600 1,500 1.5 500 1,000 1.0 400 500 0.5 300 0 0.0 Jun Jun Jun Jun- Jun- 200
Slide 4: Origin Share Price Performance vs ASX 100
Annualised Total Shareholder Return (%) Page 8 Page 7 Origin Share Price (Adjusted for Rights Issue) 0% 25% 50% 75% 100% 1/ 3/ $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 00 CALTEX AUSTRALIA LIMITED 31 TOLL HOLDINGS LIMITED /8 /0 Source: Bloomberg 0 SIGMA COMPANY LIMITED 2/ 3/ 01 OXIANA LT
Slide 5: Retail: growth driven by acquisitions and consolidation
Retail Origin’s growth in the past few years has been driven by acquisitions in conjunction with consolidation of energy retailers Eastern Australia Eastern Australia Market share of customers: 1998 Market share of customers: 2003 Origin Energy 16% Origin Origin Energy Energy Listed Companies 4% Gov
Slide 6: Contestability and churn in retail markets
Contestability has been progressively introduced into the Victorian, NSW and South Australian (SA) markets……. Mass Market Churn: Completed & Pending 50% 45% VIC Elec Vic Gas % Churn: Monthly data annualised 40% NSW Elec NSW Gas SA Elec SA Gas 35% 30% 25% 20% 15% 10% 5% 0% Feb-03 Jul-03 Sep-03 Dec-03
Slide 7: Exploration and Production: focus on volume, margin and valuable customers
….and focus on volume, margin and targeting valuable customers • Detailed market understanding – through data analysis, segmentation and product development, focussing on high volume / high margin customers • Be competition enabled in all markets – ensure that we are able to compete when, where and
Slide 8: Eastern Australia gas supply and demand analysis
Origin’s supply / demand analysis for eastern Australia in 2001 showed large uncontracted demand creating perceived shortfall in local supply……. Eastern Australian gas demand Eastern Australian gas demand Origin Energy estimates 2001 Origin Energy estimates 2004 900 900.0 900 900.0 Uncontracted Unco
Slide 9: Major E&P projects
These major E&P projects include the following…… Perth Basin oil (50%) CSG projects (24% to 97%) •3 oil discoveries (1st in • Current production 10 PJ/a basin since 1966) and 5 gas • 3 major contracts signed discoveries in last 3 years over last 2 years Coal seam gas (CSG) • Current production - AGL
Slide 10: Forward electricity curve gives no signal new capacity is required
Current forward curve for electricity gives no signal that new generation capacity is required……… $70 Monthly Average Spot Price Victoria Electricity Prices Rolling 365 $60 day Average Wholesale electricity price ($/MWh) Spot Price New Entrant Costs 2001 Historical Forward Price $50 2002 Historical
Slide 11: Growth in generation: gas-fired, solar and geothermal
Origin is pursuing further growth in Generation through gas fired power plant development and renewables…… • Gas fired power generation: 30 4,000 4,000 Development sites in Victoria and Annual Demand and Generation dispatched (Twh) Energy Peak Queensland high-graded for permitting for new combined c
Slide 12: Contact: acquisition of a major interest in Contact Energy
Contact The acquisition of a major interest in Contact Energy has diversified the geographic reach and skills in the Origin Group…… …with Contact’s customer base and significant generation capabilities complementing Origin’s business Page 24 Source: Contact Energy presentations and Half Year Report
Slide 13: NZ retail prices and Contact growth options
Retail prices in NZ have continued to increase since Origin announced acquisition of an interest in Contact………. Contact Retail Pricing 1998 - Nov 2004 Growth options include: Simple Average Retail Price in Incumbent Areas* 20 • Enhancements to geothermal projects at Wairakei, Poihipi and Ohaaki 18 •
Slide 14: Major challenges to Origin and the industry
So what are the major challenges to Origin and the industry going forward? • Internal to Origin – Operational efficiency and risk management – Project execution – Keeping the opportunity pipeline full • External – Economic / price regulation – Continued Government ownership of contestable businesses
Slide 15: External risks addressed through diversity and natural hedges
External risks are addressed through business diversity, strategic positioning, the development of natural hedges… • Economic / price regulation • Continued Government ownership of contestable businesses • Carbon risk • Supply / demand balance ….and the creation of flexible options to ensure Origin
Slide 16: For more information
For more information. For more information on Origin Energy please contact Angus Guthrie Manager, Investor Relations Email: [email protected] Telephone: +61-2-8345 5558 Mobile: + 61- 417 864 255 Alternatively visit our website www.originenergy.com.au and follow the prompts to the Inv