Centrica Plc · LSE:CNA
Centrica — BNP Paribas Utilities Credit Conference 2007
20 slides from Centrica's conference presentation, Jun 1, 2007
Slide 1: Centrica: a leading integrated energy company
Centrica ...a leading integrated energy company Nick Luff, Group Finance Director BNP Paribas Utilities Credit Conference 1 June 2007
Slide 2: Disclaimers
Disclaimers Forward-looking statements: This presentation contains certain “forward-looking statements" with respect to Centrica’s financial condition, results of operations and business and certain of Centrica’s plans and objectives with respect to these items. By their very nature forward-looking
Slide 3: Agenda
Agenda • Centrica overview • Risk profile • Credit features 3
Slide 4: Centrica Overview: UK's largest residential energy supplier
Centrica Overview: UK’s largest residential energy supplier • Market capitalisation £14 billion / €20 billion • 30th in the FTSE 100 • £16.5 billion revenue in 2006 • £1.4 billion operating profit in 2006 * • £1.4 billion cash from continuing operations in 2006 • Credit Rating: A (negative) S&P, A3
Slide 5: Centrica Overview: Our brands
Centrica Overview: Our brands 5
Slide 6: Centrica Overview: Customer base
Centrica Overview: Customer base Energy or Services customers 2006 customer relationships millions North America UK Europe* Total Energy Supply ** 3.4 16.9 2.2 22.5 Services 1.9 7.2 - 9.1 We have over 30 million customer relationships * includes 100% of SPE 6 ** includes number of supply points for
Slide 7: Centrica Overview: Gas and power upstream assets
Centrica Overview: Gas and power upstream assets Power station Gas field Wind farm Rough storage 2006 Full Year data North UK Europe * Total America Total Annual Power (TWh) 33 39 14 86 Demand Gas (BCF) 335 1,112 88 1,535 Upstream Equity Power Generation (MW) 1,261 4,307 1,600 7,168 Capability Gas R
Slide 8: Centrica Overview: Key priorities
Centrica Overview: Key priorities • Transform British Gas • Sharpen up the organisation and reduce costs • Reduce risk through increased integration • Build on our multiple growth platforms We are pursuing four priorities to improve our near term performance, reduce risk and deliver long-term growth
Slide 9: Risk profile: Our businesses have different risk profiles
Risk profile: Our businesses have different risk profiles • British Gas Residential UK core energy operation subject to UK commodity price • Centrica Energy movements • British Gas Business • Centrica Storage Growth opportunities with limited • British Gas Services or no short term commodity price e
Slide 10: Risk profile: Our market share
Risk profile: Our market share Gas Power 10% 16% 22% 6% 9% 13% 49% 13% 20% British Gas 11% E.on Scottish & Southern Energy 13% Scottish Power 17% EDF npower No.1 residential supplier in the UK for both gas and power 10 Source: Centrica plc, 2006
Slide 11: Risk profile: UK upstream gas hedge
Risk profile: UK upstream gas hedge Gas Reserves (UK Market) 2,000 1,500 BCF 1,000 500 0 British Gas E.on Scottish & Scottish EDF npower Southern Power Energy We have a greater vertical hedge in gas than our competitors 11 Source: Wood Mackenzie 2006
Slide 12: Risk profile: UK upstream power hedge
Risk profile: UK upstream power hedge Portfolio capacity as a % of peak residential customer demand 350 300 250 200 % 150 100 50 0 British Gas E.on Scottish & Scottish EDF npower Southern Power Energy Our UK power hedge is different to that of our competitors 12 Source: Centrica plc, 2006
Slide 13: Risk profile: UK generation fuel mix
Risk profile: UK generation fuel mix Centrica UK 3% 3% 21% 37% 4% ` Gas Coal 97% Renewable 35% Nuclear Other Our fleet is predominately gas based – low carbon intensity 13 Source: UK Average – DTI; Centrica – Centrica plc
Slide 14: UK gas price exposure
Risk profile: UK gas price exposure Gas price movements - wholesale vs retail 200 175 150 % 125 100 75 50 Mar-05 Mar-06 Mar-07 Sep-05 Sep-06 Year Ahead NBP Gas Price Ave. Residential Gas Tariff “there will inevitably be leads and lags in the energy retail market but our brand and scale mean we are w
Slide 15: Risk profile: Profit diversity
Risk profile: Profit diversity Operating Profit £m Operating Profit Year ended: 31 December 2006 1,000 British Gas Residential 95 UK Core Energy Centrica Energy 686 750 Other British Gas Business 87 £ms 500 Centrica Storage 228 250 British Gas Services 102 North America 223 0 Europe & other 21 BG Se
Slide 16: Credit features: Operational risk
Credit features: Operational risk • Operate mainly in competitive de-regulated markets • Short term commodity exposures in UK • Gas and power assets provide partial structural hedge • North American and services business have lower risk profile and provide diversity 16
Slide 17: Credit features: Financial profile
Credit features: Financial profile • Strong credit rating important in contracting for gas and power • Higher operational risk profile, lower financial risk profile 2006 Year End Gearing 12% Net Debt / EBITDA * 0.87x FFO / Adjusted Net Debt (S&P) 58% RCF / Adjusted Net Debt (Moody’s) 33% Our prudent
Slide 18: Credit features: Bloomberg reported debt securities
Credit features: Bloomberg reported debt securities Private Placements Issue Date Currency Amount Maturity Coupon (millions) Jan 2006 EUR 100 July 2008 3.50% Sept 2006 EUR 75 Sept 2008 Euribor + 12bps Public Issues Issue Date Currency Amount Maturity Coupon (millions) Nov 2001 GBP 400 Nov 2012 5.875
Slide 19: Summary
Summary • Centrica is a leading integrated energy company • Operates in diverse global markets • Clear strategic direction • Operational risk is carefully managed • Financial structure appropriate with tight control 19
Slide 20: Questions
Questions
Centrica — BNP Paribas Utilities Credit Conference 2007 on 6ix