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June 2016 Interim Results – Centrica Plc

Centrica Plc · Jul 28, 2016 · 37 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. June 2016 Interim Results – Centrica Plc – slide 1
    Centrica plc Interim Results for the period ended 30 June 2016
  2. June 2016 Interim Results – Centrica Plc – slide 2
    Iain Conn Group Chief Executive
  3. June 2016 Interim Results – Centrica Plc – slide 3
    Headlines Encouraging H1 financial delivery despite weak environment Efficiency programme ahead of target Good progress in implementing the strategy Full year cash flow and financial targets underpinned Balance sheet…
  4. June 2016 Interim Results – Centrica Plc – slide 4
    Strategic context Some recovery in commodity prices UK regulatory and political context evolving - CMA final report published - UK Capacity Market changes constructive - Brexit vote creates uncertainty but limited immediate impact…
  5. June 2016 Interim Results – Centrica Plc – slide 5
    Jeff Bell Group Chief Financial Officer
  6. June 2016 Interim Results – Centrica Plc – slide 6
    Commodity prices Average Brent Oil prices Average UK NBP gas prices Average Henry Hub gas prices (/boe) (p/th) (/mmbtu) 75 60 3.0 (31%) (24%) 50 (31%) 40 2.0 25 20 1.0 0 0 0.0 H1 H1 H1 H1 H1 H1 2015 2016 2015 2016 2015 2016 55…
  7. June 2016 Interim Results – Centrica Plc – slide 7
    Financial headlines Period ended 30 June H1 2015 H1 2016 Revenue (m) 15,451 13,380 (13%) Adjusted operating profit (m) 970 853 (12%) Adjusted effective tax rate 29% 28% (1ppt) Adjusted earnings (m) 587 507 (14%) Adjusted basic earnings…
  8. June 2016 Interim Results – Centrica Plc – slide 8
    Energy Supply & Services UK & Ireland ADJUSTED OPERATING PROFIT Period ended 30 June (m) H1 2015 H1 2016 UK Home 678 635 (6%) UK Business 6 31 417% Ireland 23 24 4% Energy Supply & Services UK & Ireland 707 690 (2%) ADJUSTED OPERATING…
  9. June 2016 Interim Results – Centrica Plc – slide 9
    Energy Supply & Services North America ADJUSTED OPERATING PROFIT Period ended 30 June (m) H1 2015 H1 2016 North America Home 50 33 (34%) North America Business 139 62 (55%) Energy Supply & Services North America 189 95 (50%) ADJUSTED…
  10. June 2016 Interim Results – Centrica Plc – slide 10
    Connected Home, DE&P and EM&T ADJUSTED OPERATING PROFIT Period ended 30 June (m) H1 2015 H1 2016 Connected Home revenue (m) Connected Home (28) (23) 18% Distributed Energy & Power (DE&P) (20) (11) 45% H1 2015 8 Energy Marketing & Trading…
  11. June 2016 Interim Results – Centrica Plc – slide 11
    Exploration & Production Period ended 30 June (m) H1 2015 H1 2016 Adjusted operating profit 106 88 (17%) Adjusted operating cash flow 450 336 (25%) Free cash flow 35 72 106% Total production volumes Unit lifting and other cash…
  12. June 2016 Interim Results – Centrica Plc – slide 12
    Central Power Generation Period ended 30 June (m) H1 2015 H1 2016 Adjusted operating profit 58 24 (59%) Adjusted operating cash flow 26 (30) nm Gas-fired generation Nuclear generation Wind generation (TWh) (TWh) (TWh) H1 2015 3.1 H1…
  13. June 2016 Interim Results – Centrica Plc – slide 13
    Centrica Storage Period ended 30 June (m) H1 2015 H1 2016 Adjusted operating profit 13 4 (69%) Adjusted operating cash flow 60 30 (50%) Storage revenue (m) Forward seasonal gas spreads (p/th) 8 H1 2015 46 25 7 W16 - S16 spread 6…
  14. June 2016 Interim Results – Centrica Plc – slide 14
    Operating costs Period ended 30 June (m) H1 2015 H1 2016 Reported operating costs 1,525 1,514 (1%) Adjustments (211) (263) nm Adjusted operating costs 1,314 1,251 (5%) Growth investment - (22) nm Like-for-like adjusted operating costs…
  15. June 2016 Interim Results – Centrica Plc – slide 15
    H1 efficiency programme delivery 38m 141m 2.5bn 129m 2.3bn H1 2015 Inflation Efficiency Other / one off / H1 2016 controllable programme phasing 1 controllable costs costs Costs of goods sold Operating costs 1. Includes…
  16. June 2016 Interim Results – Centrica Plc – slide 16
    Net investment Period ended 30 June (m) H1 2015 H1 2016 Energy Supply & Services UK & Ireland 40 48 Energy Supply & Services North America 25 24 1 Connected Home, DE&P, EM&T 47 15 Exploration & Production 416 289 Central Power…
  17. June 2016 Interim Results – Centrica Plc – slide 17
    Cash flow Current credit ratings Period ended 30 June (m) H1 2015 H1 2016 EBITDA 1,444 1,272 Tax (144) (141) Baa1 BBB+ Dividends received 65 49 (Stable Outlook) (Negative Outlook) 1 Working capital & other (216) 192 Adjusted operating…
  18. June 2016 Interim Results – Centrica Plc – slide 18
    Summary & outlook Earnings down 14% Adjusted operating cash flow up 19% Underlying adjusted operating cash flow up 11% Net debt down to 3.8bn Strong investment grade credit ratings Good progress on efficiency programme 19…
  19. June 2016 Interim Results – Centrica Plc – slide 19
    Iain Conn Group Chief Executive
  20. June 2016 Interim Results – Centrica Plc – slide 20
    Strategic update Centricas strategy Portfolio repositioning and customer-led growth Cost efficiency programme Financial framework 2016 targets and outlook 21 Interim Results 2016
  21. June 2016 Interim Results – Centrica Plc – slide 21
    Centricas strategy Energy and services company Purpose: to provide energy and services to satisfy the changing needs of our customers Long term shareholder value through returns and growth 3-5% per annum operating cash flow growth…
  22. June 2016 Interim Results – Centrica Plc – slide 22
    Challenges and opportunities Challenging environment - Low commodity prices - Weak economic growth - Political uncertainty Fundamental trends market participants must change Centrica has a strong starting position - Customer base…
  23. June 2016 Interim Results – Centrica Plc – slide 23
    Reduce scale in E&P and CPG Reduced investment into E&P E&P capex (m) E&P free cash flow positive in H1 FY 2014 1,086m - Capex 500m for the full year FY 2015 728m - Cash production costs down FY 2016 500m 200m for the full year vs…
  24. June 2016 Interim Results – Centrica Plc – slide 24
    Growth focus on customer-facing businesses Underpinning growth in Energy Supply & Services - Repositioning organisation and capability - Customer service, offer innovation, cost efficiency Growing capabilities and customers in DE&P…
  25. June 2016 Interim Results – Centrica Plc – slide 25
    Delivery in Energy Supply & Services UK Home Innovative offers UK Business Energy supply complaints Operating Profit (m) 38% 31 H1 H1 H2 H1 H2 H1 2015 2016 2014 2015 2015 2016 NA Home NA Business Energy supply complaints H2 net…
  26. June 2016 Interim Results – Centrica Plc – slide 26
    Distributed Energy & Power capabilities Differentiated offering Energy insights Asset optimisation Energy solutions Underlying products CHP PV Trading Battery Stand-by Energy Demand side response Generators Efficiency…
  27. June 2016 Interim Results – Centrica Plc – slide 27
    Customer growth in DE&P DE&P active customer sites and capacity Customer growth under management Capacity under management increased Active customer sites H1 2015 983 Material increase in order book secured revenue H1 2016 2,450…
  28. June 2016 Interim Results – Centrica Plc – slide 28
    Growth in Connected Home Connected Home cumulative Five new products launched in H1 UK hubs installed (000) Smart thermostat sales remain strong 364 Plans to launch H1 2015 our suite of connected home 292 products in H1 North 2016…
  29. June 2016 Interim Results – Centrica Plc – slide 29
    Cost efficiency programme Efficiency programme ahead of target Controllable costs H1 progress 100m 300m - Efficiencies of 141m - 1,500 direct headcount reduction 5.0bn Full year headcount reduction 3,000 4.8bn Full year…
  30. June 2016 Interim Results – Centrica Plc – slide 30
    Financial framework Targets Metric Adjusted operating cash flow 3-5% growth p.a. Progressive in line with adjusted operating cash Dividend flow Controllable costs Operating cost growth < inflation…
  31. June 2016 Interim Results – Centrica Plc – slide 31
    2016 targets Adjusted operating cash flow 2bn Group capital investment limited to 1bn - E&P capex of around 500m Around 300m of cost efficiencies in 2016, increased from 200m expectation in February Like-for-like operating costs…
  32. June 2016 Interim Results – Centrica Plc – slide 32
    Summary Encouraging financial delivery despite weak environment Efficiency programme ahead of target Good progress in implementing the strategy Full year cash flow and financial targets underpinned Balance sheet strengthened Growth…
  33. June 2016 Interim Results – Centrica Plc – slide 33
    Q&A Iain Conn Jeff Bell Mark Hanafin Mark Hodges Badar Khan Group Chief Group Chief Chief Executive, Chief Executive, Chief Executive, Executive Financial Officer Energy Production, Energy supply Energy supply Trading and and…
  34. June 2016 Interim Results – Centrica Plc – slide 34
    Adjusted operating profit H1 Period ended 30 June (m) H1 2015 H1 2016 Energy Supply & Services UK & Ireland 707 690 (2%) Energy Supply & Services North America 189 95 (50%) Connected Home (28) (23) 18% Distributed Energy & Power (20)…
  35. June 2016 Interim Results – Centrica Plc – slide 35
    Adjusted operating profit - FY Period ended 30 June (m) FY 2015 Energy Supply & Services UK & Ireland 891 Energy Supply & Services North America 323 Connected Home (49) Distributed Energy & Power (32) Energy Marketing & Trading 66 Total…
  36. June 2016 Interim Results – Centrica Plc – slide 36
    Adjusted operating cash flow H1 Period ended 30 June (m) H1 2015 H1 2016 Energy Supply & Services UK & Ireland 178 822 362% Energy Supply & Services North America 370 199 (46%) Connected Home (31) (25) 19% Distributed Energy & Power (22)…
  37. June 2016 Interim Results – Centrica Plc – slide 37
    Net debt Period ended 30 June (m) H1 2015 H1 2016 Opening net debt (5,196) (4,747) Adjusted net cash inflow 382 1,022 Other non-cash movements in net (91) (58) debt Closing net debt (4,905) (3,783) Margin cash (465) (359) Closing net…

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