Centrica plc Presentation to bond investors October 2008 1
Agenda Centrica overview Key priorities Risk profile M&A / investment programme SPE British Energy Financial profile and position 3
Centrica overview 4
Centrica overview: our businesses Centrica was demerged from British Gas in February 1997 but retains the British Gas brand in the UK Its core businesses are: British Gas Residential: the biggest energy supplier in Britains domestic…
Centrica overview: key financial facts Market capitalisation 11.1 bn / 14.2 bn (as at 15 October 2008) 24th in the FTSE 100 (as at 15 October 2008) H1 2008 financial 6 months to 30 June, m 2008 2007 headlines: Revenue 10,032 8,570…
Centrica Overview: our brands 7
Centrica Overview: customer base We have over 30 million customer relationships Customer relationships (30 June 2008) 2007 Full Year data North UK Europe Total America millions North UK Europe Total Total Annual Power (TWh) 32 40…
Centrica overview: profit and value diversity Operating Profit 2007 Year ended: Analysts consensus Enterprise m 31 December Value 15.3bn sum of the parts British Gas Residential 571 valuation British Gas Gas Production…
Key priorities Transform British Gas Sharpen the organisation and reduce costs Reduce risk through increased integration Build on our growth platforms 10
Risk Profile 11
Risk profile: UK gas price exposure Gas price movements 70 60 50 40 (p) 30 20 10 0 May-04 Oct-04 Mar-05 Aug-05 Jan-06 Jun-06 Nov-06 Apr-07 Sep-07 Feb-08 Jul-08 Retail Wholesale forward supply year 12
Risk profile: customer base Total Energy Accounts 16.5 16.0 m 15.5 15.0 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Total accounts 13
Risk profile: increasing integration % Gas hedge ratio 40 Wind Drax contract Acquisitions 30 Development North Sea 20 Morecambe Bay 10 0 2006 2007 2008 2009 2010 2011 Gas hedge ratio: Proportion of UK floating gas demand…
Risk profile: UK generation fuel mix Centrica UK 2% 8% Gas 15% 36% Coal Renewable 2% Nuclear Other 39% 98% Source: UK Average DTI; Centrica Centrica plc 15
M&A / investment programme 2008 investment programme c. 1.6bn* Upstream Gas Power Generation Acquisitions Assets Assets Heimdal (375m) Langage (401m) Strategic Energy (300m) Rockyview (C113m) Lynn & Inner Dowsing (323m) Transglobe…
SPE Exercised pre-emption rights on SPE Will have 51% controlling interest 1.5m customers and 1.6GW SPE will benefit from cheaper power through PAX Electrica 2 Nuclear Increases Centricas options in 17% Europe Wind 4% Hydro…
British Energy Memorandum of Understanding to acquire 25% interest in British Energy (BE) at a cost of c.3.2bn This transaction would deliver the following : EdF retains control of BE with responsibility for running all BE power…
Financial profile and position 19
Credit features: financial profile Our operational risk demands a conservative financial risk profile with strong liquidity Centrica is committed to A range long term credit rating Moodys : A3 (stable) / P-2 Standard & Poors : A…
Credit features: financial position consisting of: Strong cash flow generation EBITDA of 2.3bn and 2.5bn in 12 months to 30 June 2008 and 2007 respectively. Low net debt relative to market capitalisation 0.3bn and 0.8bn at 30 June…
Credit features: strong cash flow generation Twelve months ended 30 June, bn 2008 2007 Operating profit* 1.7 2.0 Add back: Amortisation of intangible assets 0.1 0.1 Depreciation 0.5 0.5 EBITDA 2.3 2.5 Working capital - non margin…
Credit features: low net debt relative to market capitalisation m 30 June 2008 Bonds (public issues and private placements) 2008 Euro Bond issued Jan 07 (61) 2008 Euro FRN issued Sept 06 (80) 2009 Sterling bond issued Mar 06 (252)…
Summary Leading positions in UK gas and electricity supply Strong earnings and cash flow contribution from upstream operations Lowering of business risk through increasing vertical hedge Growing contribution from diversification…
Contact details Nick Luff Group Finance Director +44 (0) 1753 494 949 Paul Hedley Director of Treasury and Risk +44 (0) 1753 492 222 Tony Kendall Group Treasurer +44 (0) 1753 494 167 Kieran McKinney Director of Investor Relations…
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