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2019 Half Year Results – Origin Energy Ltd.

Origin Energy Ltd. · Feb 21, 2019 · 48 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. 2019 Half Year Results – Origin Energy Ltd. – slide 1
    Origin Energy 2019 Half Year Results Half year ended 31 December 2018 Frank Calabria, CEO and Lawrie Tremaine, CFO 21 February 2019
  2. 2019 Half Year Results – Origin Energy Ltd. – slide 2
    Outline 1. Performance Highlights - Frank Calabria 2. Financial Review - Lawrie Tremaine 3. Operational Review - Frank Calabria 4. Outlook - Frank Calabria 2 21 February 2019 2019 Half Year Results Announcement
  3. 2019 Half Year Results – Origin Energy Ltd. – slide 3
    Performance Highlights Frank Calabria, CEO 3 21 February 2019 2019 Half Year Results Announcement
  4. 2019 Half Year Results – Origin Energy Ltd. – slide 4
    HY2019 financial summary Statutory Profit Underlying Profit NCOIA3 Total operations 796 million 592 million 754 million 45.3 cps 33.7 cps Up 932 million on HY20181 Up 204 million or 53% on Up 403 million or 115% on HY2018…
  5. 2019 Half Year Results – Origin Energy Ltd. – slide 5
    Highlights 621 million NCOIA in Energy Markets Increase in earnings driven by short-term wholesale gas sales Strong cash Steady output from Eraring, despite a planned unit outage flows from two core businesses 237 million NCOIA in…
  6. 2019 Half Year Results – Origin Energy Ltd. – slide 6
    We are committed to our stakeholders Safe & Engaged People Getting Energy Right for Customers Employee engagement improved in recent years Addressing affordability with price reductions TRIFR increased to 3.4 from 2.2 in FY2018…
  7. 2019 Half Year Results – Origin Energy Ltd. – slide 7
    Addressing affordability and reliability Regulatory environment Origin taking a leading role Range of regulatory challenges Reliable generation Reference bill / Default Market Offer Maintaining high Eraring output Big Stick policy…
  8. 2019 Half Year Results – Origin Energy Ltd. – slide 8
    Domestic energy market context Renewables growing Lower forward prices Increased competition Solar and wind capacity Electricity Churn rates (GW) (A/MWh) 25 30% 250 20 25% 200 15 150 20% 10 5% 8% 100 15% 5 0 50…
  9. 2019 Half Year Results – Origin Energy Ltd. – slide 9
    LNG market context Asia LNG demand 2018-2025 (MTPA) 200 180 CAGR: Strong CY2018 LNG prices: 160 +7.7% robust Asian demand low inventory levels in Europe 140 109 liquefaction project delays 102 120 92 87 China monthly import…
  10. 2019 Half Year Results – Origin Energy Ltd. – slide 10
    Strategy to deliver value in the future energy world Our strategies Connecting customers to the energy and technologies of the future Energy Markets Integrated Gas Leading Embrace a Develop Accelerate customer decentralised…
  11. 2019 Half Year Results – Origin Energy Ltd. – slide 11
    Operational priorities aligned to our strategy Simplified retail business centred around the customer Targeting 100 million cost out by FY2021 New revenue streams (Adjacencies, Centralised Energy Services) Competitive energy supply…
  12. 2019 Half Year Results – Origin Energy Ltd. – slide 12
    Dividend reinstated The Board has determined to pay a 10 cps HY2019 interim dividend fully franked dividend in respect of HY2019 Ex-dividend date: 1 March 2019 Provided that market conditions do not Dividend pay date: 29 March…
  13. 2019 Half Year Results – Origin Energy Ltd. – slide 13
    Financial Review Lawrie Tremaine, CFO 13 21 February 2019 2019 Half Year Results Announcement
  14. 2019 Half Year Results – Origin Energy Ltd. – slide 14
    Strong performance in HY2019 HY2019 HY20181 Change (%) Statutory Profit/(Loss) m 796 (136) n/a Underlying Profit m 592 388 53 Underlying EBITDA m 1,727 1,435 20 Net cash from operating and investing activities - m 754 351 115 total…
  15. 2019 Half Year Results – Origin Energy Ltd. – slide 15
    Underlying profit increased 53% Movements in Underlying Profit (m) (2) (97) 221 63 18 Higher APLNG- Debt reduction, commodity related reduced 592 prices hedging interest margin 388 HY18 EM EBITDA Share of IG - Other…
  16. 2019 Half Year Results – Origin Energy Ltd. – slide 16
    Energy Markets Underlying EBITDA up 2% Movements in Underlying EBITDA (m) (5) (53) 76 852 834 Electricity gross profit down 7% to 719 million: Lower volumes - usage and customer numbers (-28 million) Price relief, competition &…
  17. 2019 Half Year Results – Origin Energy Ltd. – slide 17
    Integrated Gas Underlying EBITDA up 43% Movements in Underlying EBITDA (m) 54 (30) (97) 396 (53) 900 Share of APLNG EBITDA up 54% to 1,042 million: 630 Integrated Gas Share of APLNG Other Realised LNG price up 40% to…
  18. 2019 Half Year Results – Origin Energy Ltd. – slide 18
    Cash from Operating & Investing up 115% (m) HY2019 HY20181,2 Change Energy Markets 802 604 198 Two strong cash flow generating businesses Integrated Gas (146) (46) (100) Energy Markets HY2019 cash conversion3 94%; 85% excluding…
  19. 2019 Half Year Results – Origin Energy Ltd. – slide 19
    Proportionate free cash flow and returns Proportionate Free Cash Flow1 Proportionate Free Cash Flow2 Yield Underlying ROCE3 20% 10% Up 59% or 1,075 1,000 17% 398 million 8.6% 900 14% 7.7% 8% 800 15% 700 677 716 600 6%…
  20. 2019 Half Year Results – Origin Energy Ltd. – slide 20
    Stronger balance sheet, lower interest cost Adjusted Net Debt/Adjusted Underlying EBITDA1 6x 5x 4x Origin 3x Target (2.5 - 3.0x) Close to target capital structure 2x Extending tenor, reducing refinance risk 1x Decreased…
  21. 2019 Half Year Results – Origin Energy Ltd. – slide 21
    Managing commodity price risk FY2019 oil hedging FY2020 oil hedging 90 FY19 effective price 90 FY20 effective price Effective oil price (U/bbl) Effective oil price (US/bbl) FY19 effective price after FY20 effective price…
  22. 2019 Half Year Results – Origin Energy Ltd. – slide 22
    Portfolio management focused on value creation Rationalising the portfolio 231 million sale of Ironbark to APLNG - existing nearby APLNG infrastructure allows development to occur efficiently Exiting LPG Vietnam 15 million net cash…
  23. 2019 Half Year Results – Origin Energy Ltd. – slide 23
    Operational Review Frank Calabria, CEO 23 21 February 2019 2019 Half Year Results Announcement
  24. 2019 Half Year Results – Origin Energy Ltd. – slide 24
    Energy Markets 24 21 February 2019 2019 Half Year Results Announcement
  25. 2019 Half Year Results – Origin Energy Ltd. – slide 25
    Flexible portfolio adapting to changing market Generation output (GWh) Natural Gas sales mix (PJ) 2,000 160 1,600 Steady output at Eraring 140 Generation Generation 120 1,200 100 Business - Business - Wholesale 800 Gas…
  26. 2019 Half Year Results – Origin Energy Ltd. – slide 26
    Our gas portfolio is a competitive strength Natural gas external sales (PJ) 250 Retail customers 200 150 Flexible Business - supply Business - 100 C&I portfolio Wholesale 50 Generation 0 FY14 FY15 FY16 FY17 FY18 FY19 H1…
  27. 2019 Half Year Results – Origin Energy Ltd. – slide 27
    Our flexible electricity portfolio is transitioning Energy Position (TWh) 20 Short position Short position Continued stable production from Eraring 9% 15 Swap contracts Swap 1 TWh reduction in gas fired generation as it…
  28. 2019 Half Year Results – Origin Energy Ltd. – slide 28
    Covered for peak demand VIC & SA price Origin VIC & SA position 24 Jan 2019 24 Jan 2019 at 7pm MW 15,000 3,000 10,000 2,000 /MWh Max Temperature 5,000 SA: 45.8C 1,000 VIC: 40.8C 0 - Peak demand Supply 2:00…
  29. 2019 Half Year Results – Origin Energy Ltd. – slide 29
    Balancing share and value in Retail Customer accounts Customer activity Customer movement (000) (000 customers) 15 (000 customers) HY2019 4,000 1,400 10 1,200 5 3,000 1,000 0 800 (5) 2,000 600 (10) 400 (15) 1,000 (20)…
  30. 2019 Half Year Results – Origin Energy Ltd. – slide 30
    Targeting a step change in our Retail business Transform Target market Grow new customer leading cost revenue streams experience position Energy Markets Cost to serve Centralised Energy Services customers (000) (171/cust)…
  31. 2019 Half Year Results – Origin Energy Ltd. – slide 31
    Integrated Gas 31 21 February 2019 2019 Half Year Results Announcement
  32. 2019 Half Year Results – Origin Energy Ltd. – slide 32
    Stable production and higher realised prices APLNG production APLNG average realised APLNG average realised (ORG share) domestic gas price LNG price (PJ) (A/GJ) (US/mmbtu) 127 127 10.13 7.23 5.20 4.13 HY18 HY19 HY18 HY19…
  33. 2019 Half Year Results – Origin Energy Ltd. – slide 33
    Cost out on track Cost per well (Am/well)1 Operating cost (A/GJ)2,3 2.4 1.3 1.2 1.9 1.1 1.1 1.7 1.0 1.2 1.2 FY18 FY18 HY19 Run Rate June 2019 FY18 FY18 HY19 Run Rate June 2019 Baseline (Actual) (Actual) (Current) (Target)…
  34. 2019 Half Year Results – Origin Energy Ltd. – slide 34
    1.9 billion free cash flow at APLNG APLNG uses of cash (Am) (100%) Effective oil price of US73/bbl 4,000 1.2 billion distributable cash flow 3,500 after debt service (Origins 37.5% 1.2 billion distributable share 447 million).…
  35. 2019 Half Year Results – Origin Energy Ltd. – slide 35
    FY2019 breakeven guidance update Change to Breakeven guidance (US/boe) US39-44/boe US39-42/boe (1.1) 0.9 (2.3) 1.3 (0.8) 17 - 18 16 22 - 26 23 - 26 Prior FY19 FX rate 1 Sales mix Capital Operating Net interest Updated FY19…
  36. 2019 Half Year Results – Origin Energy Ltd. – slide 36
    Beetaloo Facts: 70% interest in 18,500km2 permit Four, stacked, unconventional plays 6.6 TCF 2C contingent resource relating to Velkerri B shale dry gas play Preparation for CY2019 drilling continues Sacred site clearances…
  37. 2019 Half Year Results – Origin Energy Ltd. – slide 37
    Outlook Frank Calabria, CEO 37 21 February 2019 2019 Half Year Results Announcement
  38. 2019 Half Year Results – Origin Energy Ltd. – slide 38
    FY2019 outlook Provided that market conditions do not materially change and the regulatory and political environment do not adversely impact operations Origin expects higher Underlying Profit compared to FY2018 and further debt reduction…
  39. 2019 Half Year Results – Origin Energy Ltd. – slide 39
    Appendix 39 21 February 2019 2019 Half Year Results Announcement
  40. 2019 Half Year Results – Origin Energy Ltd. – slide 40
    FY2019 breakeven guidance update Prior FY2019 Updated FY2019 100% APLNG (Am) Guidance1 Guidance1 Lower capex due to well cost savings, Capex Sustain 1,450 1,320 scope and timing changes Capex E&A 200 140 Higher opex due to additional…
  41. 2019 Half Year Results – Origin Energy Ltd. – slide 41
    Electricity forward prices by state 110 110 VIC NSW 100 100 A/MWh A/MWh 90 90 80 80 70 70 60 60 50 50 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 110 110 QLD…
  42. 2019 Half Year Results – Origin Energy Ltd. – slide 42
    Statutory to Underlying Profit Reconciliation from Statutory to Underlying Profit HY2019 HY20181 Change Change (m) (m) (m) (%) Statutory Profit/(Loss) - continuing operations 796 (136) 932 n/a Statutory Profit/(Loss) discontinued…
  43. 2019 Half Year Results – Origin Energy Ltd. – slide 43
    Segment summary Energy Markets Integrated Gas Corporate Total continuing Half year ended 31 Share of APLNG Other operations December (m) 1,2 1,2 HY2019 HY2018 HY2019 HY2018 HY2019 HY2018 HY2019 HY2018 HY2019 HY2018 Underlying…
  44. 2019 Half Year Results – Origin Energy Ltd. – slide 44
    Disciplined capital allocation Origin capital HY2019 HY2019 Project detail expenditure Power of Choice Mandatory 15 million LPG Periodic generation maintenance Sustain 130 million LPG Solar and Energy Services QPS repower…
  45. 2019 Half Year Results – Origin Energy Ltd. – slide 45
    Origins generation opportunities Mt Stuart Power Station 4 MW grid battery installation On track for completion mid-2019 Darling Downs Power Station Option for site expansion Eraring Flexible operations projects to…
  46. 2019 Half Year Results – Origin Energy Ltd. – slide 46
    Important Notices All figures in this presentation relate to businesses of the Origin Energy Group (Origin, or the Company), being Origin Energy Limited and its controlled entities, for the reporting period ended 31 December 2018 (the…
  47. 2019 Half Year Results – Origin Energy Ltd. – slide 47
    For more information Peter Rice General Manager, Capital Markets Email: peter.riceoriginenergy.com.au Office: +61 2 8345 5308 Mobile: + 61 417 230 306 Liam Barry Senior Manager, Investor Relations Email: liam.barryoriginenergy.com.au…
  48. 2019 Half Year Results – Origin Energy Ltd. – slide 48
    Thank You

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