Origin Energy Limited · ASX:ORG
Origin Energy — FY2011 Earnings Presentation
53 slides from Origin Energy's earnings presentation, Aug 23, 2011
Slide 1: 2011 Full Year Results Announcement Media Presentation
2011 Full Year Results Announcement Media Presentation Financial Year Ended 30 June 2011 23 August 2011
Slide 2: Important Notice
Important Notice This presentation does not constitute investment advice, or an inducement or recommendation to acquire or dispose of any securities in Origin, in any jurisdiction (including the USA). This presentation is for information purposes only, is in a summary form, and does not purport to b
Slide 3: Outline
Outline 1. Performance Highlights 2. Financial Review 3. Operational Review 4. Outlook 5. Appendix 3|
Slide 4: 1. Performance Highlights
O origin 1. Performance Highlights
Slide 5: Underlying Profit increased by 15% driven by new investments
Origin‟s Underlying Profit increased by 15% driven by significant contributions from new investments Statutory Profit $186 million down 70% Statutory Earnings per Share(1) 19.6 cps down 71% Underlying EBITDA $1,782 million up 32% Underlying Profit $673 million up 15% Underlying Earnings per Share(2)
Slide 6: Origin secured two major opportunities during the year
During the year, Origin successfully secured two major opportunities … Acquisition of the Integral Energy and Country Energy retail businesses and entry into the Eraring GenTrader arrangements • Last major opportunity to participate in consolidation of the Australian retail energy market • Secured O
Slide 7: Invested $5 billion in development and acquisitions; funding and capital management
During the year Origin invested $5 billion in development and acquisitions and committed $6 billion to fund its share of APLNG FY2011 funding and capital management Underlying NPAT & Free Cash Flow initiatives 700 1,400 • Raised $2.3 billion of equity via a pro rata Underlying NPAT ($ million) 600 1
Slide 8: 2. Financial Review
O origin 2. Financial Review
Slide 9: 2011 Financial Highlights
2011 Financial Highlights Statutory Profit $186 million down 70% EPS – Statutory 19.6 cps down 71% Revenue $10,344 million up 21% Underlying EBITDA $1,782 million up 32% Underlying EBIT $1,194 million up 33% Underlying Profit $673 million up 15% EPS – Underlying 71.0 cps up 10% Group OCAT $1,585 mil
Slide 10: Income Statement – Reconciliation of Statutory and Underlying Profit
Income Statement – Reconciliation of Statutory and Underlying Profit ($ million) Jun 11 Jun 10 Change Statutory NPAT 186 612 (426) Items Excluded from Underlying Profit(1)(2) Impairment of assets (160) (23) (137) Gain on dilution of Origin‟s interest in subsidiaries - 27 (27) Increase (decrease) in
Slide 11: Underlying Financial Performance
Underlying Financial Performance Underlying financial measures ($ million) Jun 11 Jun 10 Change Revenue 10,344 8,534 21% EBITDA 1,782 1,346 32% EBIT 1,194 896 33% Net financing costs (143) (13) 1,000% Tax expense (316) (232) 36% Non-controlling interests(1) share of Underlying Profit (62) (66) -6% U
Slide 12: Underlying EBITDA up 32% to $1,782 million
Underlying EBITDA up 32% to $1,782 million Segment ($ million) Jun 11 Jun 10 Change Exploration & Production 325 250 30% Generation 327 182 80% Retail 785 568 38% Contact 345 346 0% Total 1,782 1,346 32% • Exploration & Production: Higher average commodity prices, a full year contribution from Kupe
Slide 13: Segment Cash Flow Returns
Segment Cash Flow Returns Operating Cash Flow Productive Capital OCFR (%) ($m) % Change ($m) % Change Jun 11 Jun 10 Exploration & Production 457 102% 2,450 30% 18.6% 12.0% Generation 340 98% 2,555 111% 13.3% 14.2% Retail 508 33% 3,690 41% 13.8% 14.6% Contact Energy 277 -4% 3,412 0% 8.1% 8.4% • Explo
Slide 14: Acquisition of NSW assets led to 64% increase in capital expenditure
Acquisition of the NSW energy assets led to an increase in total capital expenditure of 64% Growth Capex • $1,626 million, 2% lower than the prior year reflecting the completion of a number of projects including Origin Capital Expenditure (1) Darling Downs and Kupe, offset by increased capex due 6,0
Slide 15: Capital expenditure remains significant across all segments
Capital expenditure remains significant across all business segments in the next financial year … Acquisition and Growth Capital Expenditure by Segment The forward capital program includes: Growth Capital Expenditure by Segment • Origin share of APLNG Train 1 expenditure(1) 5,000 Origin's contributi
Slide 16: Dividend Payout Ratio
A fully franked final dividend of 25 cps has been declared, representing a payout ratio of 70% of Underlying Profit Origin Dividend History • Ex-dividend date 29 August 2011 60 120% • Record Date 2 September 2011 50 100% • Payment Date 29 September 2011 • Dividend payout ratio of 70% of Dividend Pay
Slide 17: Funding and capital management initiatives; debt maturity profile
Origin has undertaken a number of funding and capital management initiatives to fund acquisitions and the ongoing capital expenditure of the business Origin Debt and Bank Guarantee Maturity Profile as at 30 June 2011 Origin Debt and Bank Guarantee Maturity Profile as at 30 June 2011 • $2.3 billion w
Slide 18: 3. Operational Review
O origin 3. Operational Review
Slide 19: Exploration & Production
O origin Exploration & Production
Slide 20: Exploration & Production Underlying EBITDA increased 30%
Exploration & Production Underlying EBITDA increased 30%, driven by increased contributions from Kupe, Otway, BassGas and APLNG … Exploration and Production Segment • Underlying EBITDA up 30% to $325 million reflecting 800 400 increased production from Kupe, BassGas and Jun-11 Jun-10 APLNG, and Orig
Slide 21: Gas and liquids production both increased by around 30%
Gas and liquids production both increased by around 30% over the prior year … PJe Origin Annual Gas Production mmboe PJe Origin Annual Liquids Production mmboe 120 21 25 4.3 100 17 20 3.4 80 14 15 2.6 60 10 10 1.7 40 7 20 3 5 0.9 0 0 0 0.0 FY06 FY07 FY08 FY09 FY10 FY11 FY06 FY07 FY08 FY09 FY10 FY11
Slide 22: Otway and BassGas share of production increased
Otway and BassGas share of production increased 53% and 38% respectively over the prior period Otway • Share of production increased by 53% due to Origin‟s increased equity interest from 31% to 67% in March 2010, partially offset by production constraints • Origin assumed operatorship from Woodside
Slide 23: Kupe delivered its first full year of production
Kupe successfully delivered its first full year of production … Kupe • Production increased 84% due to its first full year of production since its commencement in December 2009 • A successful plant integrity inspection was completed in the December Quarter 2010; a further statutory inspection is sch
Slide 24: APLNG continued to increase production and reserves
APLNG continued to increase production and reserves(1) … PJ APLNG Gas Production 100 80 APLNG Dilution • APLNG production increased by 36% to 97 PJ as supply Origin Share commenced to Rio Tinto‟s Yarwun refinery and 60 Darling Downs Power Station 40 • Daily production capacity reached 320 TJ/day pri
Slide 25: Staged investment enables progress towards first gas in 2015
A staged investment enables continued progress towards first gas in 2015 … Compelling Project Benefits • Leverages strong growth in Asian energy markets • Revenues linked to international oil prices • Significant contribution to Origin‟s earnings once operational • Prudent contracting strategy with
Slide 26: APLNG commitment to local communities and the environment
APLNG continues its commitment to local communities and the environment to operate sustainably … Supporting the Community • Social Impact Management Plan to identify community needs and direct investment • Boosting local skills via apprenticeships, scholarships and training • Regional Community Cons
Slide 27: Generation
O origin Generation
Slide 28: Generation delivered an 80% increase in Underlying EBITDA
Generation delivered an 80% increase in Underlying EBITDA due to a full year contribution from Darling Downs Power Station … Generation Segment 500 1,000 • Underlying EBITDA increased 80% or $145 million 450 900 to $327 million reflecting increased capacity Jun-11 Total Revenue & Underlying EBITDA (
Slide 29: Origin more than doubled its generation portfolio capacity
Over the year, Origin has more than doubled the capacity of its generation portfolio … Peak Demand vs Generation Capacity(1)(2) NEM NEMMarket MarketShare Shareof of Generation Capacity(3),(4) Generation Capacity (3)(4) 10,000 Origin 9,000 TRUenergy 8,000 Peak Demand 2011 Mac. Generation (customer as
Slide 30: Darling Downs, Eraring and Shoalhaven provide operational flexibility
Darling Downs, Eraring and Shoalhaven power stations provide significant operational flexibility … Darling Downs Power Station • Provides intermediate to baseload operation (540 MW) as well as peaking generation (90 MW) through its duct-firing capabilities • Generated over 2,800 GWh over the year at
Slide 31: Mortlake Power Station expected to commence operations in FY2012
Mortlake Power Station is expected to commence operations in the first half of financial year 2012 Origin's Generation Portfolio & Development Options 14,000 12,000 1,314 587 1,502 10,000 8,000 MW 3,670 6,000 550 4,000 5,310 2,000 0 Operating Under Thermal Wind - Wind - Wind - Aerial shot of Mortlak
Slide 32: Expanding portfolio of diversified energy resource opportunities
Origin is expanding its portfolio of diversified energy resource opportunities both domestically and in growing markets offshore … Innamincka geothermal tenements - Australia • Deeps JV (Origin 30% interest): the Joint Venture is working toward the drilling of the Habanero 4 well during FY2012 to co
Slide 33: Hydro power opportunities including Purari Hydro Power Project
… hydro power opportunities such as the significant resource potential of the Purari Hydro Power Project in PNG … Purari Hydro Power Project - PNG • PNG Energy Developments Limited (50:50 JV between Origin and PNG Sustainable Development Program) is evaluating the hydro- electric potential of the Pu
Slide 34: Retail
O origin Retail
Slide 35: NSW retail acquisition drove 38% increase in Retail Underlying EBITDA
The acquisition of the Integral Energy and Country Energy retail businesses drove a 38% increase in Retail Underlying EBITDA Retail Segment • Underlying EBITDA up 38% to $785 million driven by four 10,000 1000 months‟ contribution from the acquired NSW retail businesses 9,000 900 Jun-11 • The Retail
Slide 36: Retail business experienced significant growth
The Retail business experienced significant growth over the period … Year ended Retail 30 June 2011 Electricity Natural Gas LPG Solutions Revenue ($m) 5,349 (+27%) 1,180 (+11%) 670 (+6%) 445 (+128%) Gross Profit ($m) 929 (+43%) 205 (+10%) 166 (+8%) 64 (+21%) Underlying EBITDA ($m) 710 (+42%) 50 (+0%
Slide 37: Effective management of the wholesale portfolio
Effective management of the wholesale portfolio enabled Origin to benefit from both low electricity prices and summer volatility Low volatility outside of January Lower wholesale and February electricity prices • Wholesale electricity market characterised by low pool prices throughout the year, comb
Slide 38: NSW acquisition performed to expectations in first four months
The NSW acquisition performed to expectations in its first four months … • Including four months’ contribution from the NSW acquisition, the Underlying EBIT/Sales margin 2011 2011 Gas and Electricity NSW (incl. NSW 2010 moved from 8.8% to 8.7% acquisition* acquisition)* • Underlying EBIT/Sales margi
Slide 39: NSW acquisition increased retail customer base by over 50%
The NSW acquisition led to an increase in Origin‟s retail customer base of over 50% … Electricity and Gas Customer Numbers Movement - FY2010 to FY2011 5,000 customer accounts ('000) 567 (604) 4,000 1,636 (51) 4,137 3,000 Net change in Origin controlled customer accounts 2,589 (37) 2,000 Net IE & CE
Slide 40: Average churn rate remained stable at 18.5%
Origin‟s average churn rate remained stable at 18.5% … Combined Gas and Electricity Churn Rates CombinedCombined 35% Electricity and Gas andNatural GasChurn Electricity Churn Rates Rates 35% Annualised 35% 30% NSW acquisition led to a decrease in % Churn: Monthly Data Annualised Annualised 30% 30% O
Slide 41: Retail Transformation progressing, SA customers migrated to SAP
Origin‟s Retail Transformation is progressing well, with 300,000 SA customers successfully migrated onto the new SAP billing platform … • Origin‟s new SAP integrated billing and customer management system is now in production • 300,000 South Australian customers were migrated into SAP in June, and a
Slide 42: New products and business lines for customers
Origin continues to develop its new products and business lines to deliver solutions for customers … Solar and Home Products E-Mobility/Electric Vehicle (EV) • Solar rooftop installations up from Charging 6,449 in FY2010 to 36,840 in FY2011 • First ChargePointTM installed in Australia • Since 2009,
Slide 43: Contact
Contact O origin
Slide 44: Contact Underlying EBITDA up 3% in NZD terms
Underlying EBITDA up 3% in NZD terms as enhanced portfolio flexibility and increased retail sales were mostly offset by low wholesale market prices and higher network, gas and carbon costs … • Underlying EBITDA up 3%, or NZ$14 million, however Contact Segment declined by $1 million in terms of AUD t
Slide 45: Contact better positioned with improved portfolio flexibility
Contact is now better positioned to manage hydrology outcomes with improved portfolio flexibility … Increased Portfolio Flexibility Generation Market Share Growth • Ahuroa Gas Storage - Enables Contact to inject and extract gas as required • Stratford Peakers - New 200 MW gas-fired peaking power sta
Slide 46: 4. Outlook
O origin 4. Outlook
Slide 47: Transformational year: Origin invested $5 billion
A transformational year has seen Origin invest $5 billion in growing and developing its business • Origin‟s investments in development projects and acquisitions are expected to make initial or increased contributions to Origin‟s earnings in FY2012: - A full year contribution from the Integral Energy
Slide 48: Opportunities to drive medium to longer term growth
Origin has established a set of opportunities that will drive growth in the medium to longer term … • The first phase of the APLNG project, following a commitment of US$6 billion (Origin‟s 42.5% share) in July 2011 • A Final Investment Decision on APLNG Train 2 • Te Mihi geothermal project via its s
Slide 49: Consistent growth through development and acquisition
Origin has delivered consistent growth through development and acquisition … Fuel Generator Retailer Extensive thermal and Australasia’s largest Australasia’s largest renewable fuel position generation portfolio energy retailer • Strong domestic gas supply • Diversified across different • Large, inc
Slide 50: End Notes
End Notes Slide 5 (1) FY2010 Statutory EPS of 69.7 cps restated to 67.7 cps for the bonus element of the rights issue completed in April 2011 (2) FY2010 Underlying EPS of 66.6 cps restated to 64.8 cps for the bonus element of the rights issue completed in April 2011 (3) Group OCAT means operating ca
Slide 51: End Notes
End Notes Slide 14 (1) Capital expenditure is based on cash flow amounts rather than accrual accounting and includes capitalised interest (2) FY2010 capital expenditure is restated to conform with the current year’s classification (3) As at 30 June 2011 Slide 15 (1) Origin will start contributing it
Slide 52: End Notes
End Notes Slide 28 (1) Does not include acquisitions; FY2010 capital expenditure is restated to conform with the current year’s classification (2) Includes power stations that Origin owns or has contractual rights to; excludes 550 MW for Mortlake Power Station which is expected to commence operation
Slide 53: Thank you
Thank you Further Information Lina Melero General Manager, Corporate Communication Email: [email protected] Office: +61 2 8345 5217 Mobile: + 61 427 017 798 Website www.originenergy.com.au 53 |