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FY 2019 Results – Origin Energy Ltd.

Origin Energy Ltd. · Aug 22, 2019 · 54 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. FY 2019 Results – Origin Energy Ltd. – slide 1
    Origin Energy 2019 Full Year Results Year ended 30 June 2019 Frank Calabria, CEO and Lawrie Tremaine, CFO 22 August 2019
  2. FY 2019 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 22 August 2019 2019 Full Year Results Announcement
  3. FY 2019 Results – Origin Energy Ltd. – slide 3
    Performance Highlights Frank Calabria, CEO
  4. FY 2019 Results – Origin Energy Ltd. – slide 4
    FY2019 financial highlights Statutory Profit Underlying Profit Operating Cash Flow 1,211 1,028 1,325 million million million (68.8cps) (58.4cps) 333% increase on FY20181 42% increase on FY20181 35% increase on FY20181…
  5. FY 2019 Results – Origin Energy Ltd. – slide 5
    We are committed to our stakeholders Getting energy right Caring about Keeping our people for customers our impact safe & engaged Regional procurement spend as TRIFR Strategic NPS % of total spend 5 FY18 FY19 - 15% 4 3 10%…
  6. FY 2019 Results – Origin Energy Ltd. – slide 6
    Supporting our customers and communities Customers Communities Putting customers first by going Best Workplace to Give Back in 2019 beyond regulatory requirements and (GoodCompany) providing continued hardship support Origin…
  7. FY 2019 Results – Origin Energy Ltd. – slide 7
    Strategy to deliver value in a future energy world Connecting customers to the energy and technologies of the future Accelerate towards clean energy The right Low cost operator developing & energy growing gas resources The…
  8. FY 2019 Results – Origin Energy Ltd. – slide 8
    Our strategies in action e Accelerate Low cost operator Embracing Leading customer towards developing & growing gas a decentralised and experience and solutions clean energy resources digital future Target 25% renewables…
  9. FY 2019 Results – Origin Energy Ltd. – slide 9
    Continued focus on shareholder value Delivering on commitments Balancing growth and returns Transforming culture Disciplined capital allocation Simplified portfolio Executing growth options Step change in cash generation Growing…
  10. FY 2019 Results – Origin Energy Ltd. – slide 10
    Dividend policy Sustainable shareholder distributions through the business cycle Target an ordinary dividend payout range of 30% to 50% of free cash flow per annum Free cash flow - cash from operating activities and investing…
  11. FY 2019 Results – Origin Energy Ltd. – slide 11
    Financial Review Lawrie Tremaine, CFO
  12. FY 2019 Results – Origin Energy Ltd. – slide 12
    FY2019 financial highlights Statutory Profit1 Underlying Profit1,2 Underlying EBITDA1 3,232M 1,211M 1,028M 2,787M 68.8 cps 726M 58.4 cps 41.3 cps 280M 15.9 cps FY18 FY19 FY18 FY19 FY18 FY19 Corporate Energy Markets…
  13. FY 2019 Results – Origin Energy Ltd. – slide 13
    Underlying profit increased 42% Movements in Underlying Profit (m) (77) 52 (119) 116 408 (77) 1,028 726 Higher APLNG- Legacy site Debt reduction, commodity related provision reduced interest prices hedging increase…
  14. FY 2019 Results – Origin Energy Ltd. – slide 14
    Energy Markets Underlying EBITDA down 5% Movements in Underlying EBITDA (m) 15 (4) (154) 66 1,651 1,574 Electricity gross profit down 10% to 1,390 million: Price relief measures (-100 million) and competition/discounting (-80…
  15. FY 2019 Results – Origin Energy Ltd. – slide 15
    Integrated Gas Underlying EBITDA up 51% Movements in Underlying EBITDA (m) 22 (16) (77) 688 24 1,892 Integrated Gas Share of APLNG 1,251 Other (+718 million) (-77 million) Share of APLNG EBITDA up 51% to 2,123 million:…
  16. FY 2019 Results – Origin Energy Ltd. – slide 16
    Strong cash flow and improved returns (m) FY2019 FY20181 Change Underlying ROCE2 Cash from operating activities 1,325 983 342 13.6% Distributions from APLNG 974 287 687 12.2% 10.9% 9.1% 7.7% Capital expenditure (341) (318) (23)…
  17. FY 2019 Results – Origin Energy Ltd. – slide 17
    Proportionate free cash flow of 2 billion in FY2019 Proportionate Free Cash Flow1 Proportionate Free Cash Flow Yield2 3,000 - excluding disposals 20% 2,500 CAGR 162% 2,000 15% 15% AM 1,500 10% 1,000 8% 5% 500 2% - -…
  18. FY 2019 Results – Origin Energy Ltd. – slide 18
    Target capital structure achieved Adjusted Net Debt / Adjusted 6x Underlying EBITDA 5x Debt reduced by 2.7 billion over two 4x years from cash flow and asset sales 3x Target credit rating achieved: BBB Target (2.5 - 3.0x) 2.6x…
  19. FY 2019 Results – Origin Energy Ltd. – slide 19
    APLNG is deleveraging Project Finance Net Debt1 Balance and Gearing US1.6 billion debt repaid since January 2016 - adding to equity value 10 45% 30% gearing2 at June 2019 8 40% Deleveraging at US500 US600 million p.a. over next…
  20. FY 2019 Results – Origin Energy Ltd. – slide 20
    Disciplined capital allocation framework 1 Debt service Capital expenditure 2 (excluding major growth) Dividend 3 (30-50% free cash flow1) Surplus cash Debt Major growth 4 returns to reduction projects…
  21. FY 2019 Results – Origin Energy Ltd. – slide 21
    Operational Review Frank Calabria, CEO
  22. FY 2019 Results – Origin Energy Ltd. – slide 22
    Energy Markets
  23. FY 2019 Results – Origin Energy Ltd. – slide 23
    Strong generation and gas performance Eraring output Natural Gas external sales Customer activity (000s) 18 250 3,000 16 2,500 14 200 12 2,000 150 10 TWh PJ 1,500 8 100 6 1,000 4 50 500 2 - - - FY17 FY18…
  24. FY 2019 Results – Origin Energy Ltd. – slide 24
    Flexible portfolio a competitive strength 45 Electricity sources and uses (TWh) Natural Gas sales (PJ) 40 Short Losses 35 Position Generation Swap 30 Contracts Business Other 25 Business - Gas Wholesale 20 15 Owned and…
  25. FY 2019 Results – Origin Energy Ltd. – slide 25
    Accelerating to clean energy Responding to a changing market, progressing opportunities in a disciplined way Stockyard Hill (contracted PPA) 530 MW planned to be online by 2020 Darling Downs Power Quarantine Power Station…
  26. FY 2019 Results – Origin Energy Ltd. – slide 26
    Gas portfolio underpinned by strong supply Energy Markets East Coast Gas supply PJ 300 Short term volumes purchased to match duration of C&I sales contracts 250 200 150 Longer term 100 supply volumes 50 0 FY19 FY20…
  27. FY 2019 Results – Origin Energy Ltd. – slide 27
    Balancing market share and value in Retail Customer accounts Cost to serve Customer movement (000) (m) (000 customers) 4,000 60 FY2019 50 40 170 155 3,000 30 20 10 2,000 - (10) 455 455 (20) 1,000 (30) (40) - (50)…
  28. FY 2019 Results – Origin Energy Ltd. – slide 28
    Churn and price dispersion reduced Customer churn Market offers dispersion (Rolling 12 month) 25% Victoria (CitiPower) NSW (Endeavour) 1,800 2,800 1,600 23% 2,300 1,400 1,800 1,200 1,300 21% 1,000 800 800 Nov-18 Jul-19…
  29. FY 2019 Results – Origin Energy Ltd. – slide 29
    Targeting a step change in our Retail business Simplified organisation driven by a customer and digital first mindset Transform Target market Grow new customer leading cost revenue experience position streams Simpler offers…
  30. FY 2019 Results – Origin Energy Ltd. – slide 30
    Retail transformation on track Transform Target market Growwnew Grow revenue customer leading cost revenue streams experience position streams Energy Markets Cost to serve CES Gross Profit (m) 21.7 21.5 22.0 (/customer)…
  31. FY 2019 Results – Origin Energy Ltd. – slide 31
    Integrated Gas
  32. FY 2019 Results – Origin Energy Ltd. – slide 32
    APLNG continues to improve performance APLNG Production APLNG Commodity Net cash (to)/from APLNG 400 (100%) (PJ) Revenue (100%) (Am) (Am) (37.5%) 4,000 350 3,500 300 3,000 250 2,500 200 2,000 943 150 1,500 100 1,000 363 50…
  33. FY 2019 Results – Origin Energy Ltd. – slide 33
    Delivering on commitments June 2019 Distribution breakeven (US/boe) Metric Baseline Run Rate AUD/USD 0.72 Target 39 - 42 Cost per Well1 Am/well 2.4 1.2 36 16 Operated opex2 15 A/GJ 1.3 1.0 Operating Breakeven US/boe3…
  34. FY 2019 Results – Origin Energy Ltd. – slide 34
    Unit cost targets achieved in June 2019 Cost per well (Am/well)1 Operating cost (A/GJ)2 2.4 1.3 1.9 1.2 1.0 1.0 1.4 1.2 FY2018 FY2018 FY2019 Run Rate FY2018 FY2018 FY2019 Run Rate Baseline (Actual) (Actual) (June 2019)…
  35. FY 2019 Results – Origin Energy Ltd. – slide 35
    Significant value uplift achieved in FY2019 Origin 2P reserves Increase in estimated recovery from operated producing areas up 55 PJ, before Queensland gazettal block awarded underpinning 50 PJ of gas sales production (147 PJ to…
  36. FY 2019 Results – Origin Energy Ltd. – slide 36
    APLNG underpinned by a solid reserves base APLNG reserves position (PJ) 18000 15000 12000 9000 6000 66% 3000 0 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Production 1P P2 P3 Stable reserves with a steady…
  37. FY 2019 Results – Origin Energy Ltd. – slide 37
    APLNG production and cost outlook APLNG Production (100%) 680-700 FY2020 700 APLNG (100%) FY17 FY18 FY19 Guidance 676 679 650 Production (PJ) 610 676 679 680-700 PJ 600 610 Capex + opex, excl. 2.7 2.6 2.7 2.8 3.0 purchases1…
  38. FY 2019 Results – Origin Energy Ltd. – slide 38
    Beetaloo Stage 2 appraisal commenced Targeting Kyalla and Velkerri shale liquids-rich gas plays Northern Territory Two horizontal wells to be drilled, fracture stimulated and put on extended production testing (EPT): Kyalla: all…
  39. FY 2019 Results – Origin Energy Ltd. – slide 39
    Outlook Frank Calabria, CEO
  40. FY 2019 Results – Origin Energy Ltd. – slide 40
    FY2020 Guidance Provided that market conditions do not materially change and the regulatory and political environment does not result in further adverse impacts on operations Energy Markets Electricity down 180-220 million: impact…
  41. FY 2019 Results – Origin Energy Ltd. – slide 41
    Appendix
  42. FY 2019 Results – Origin Energy Ltd. – slide 42
    Electricity forward prices by state VIC NSW 120 120 110 110 100 100 A/MWh 90 A/MWh 90 80 80 70 70 60 60 50 50 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18…
  43. FY 2019 Results – Origin Energy Ltd. – slide 43
    Large scale renewable certificates LREC forward prices Origins LREC position 80 8 Millions 70 7 60 6 50 5 40 4 30 3 20 2 10 1 0 - Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 2019 2020 2021 2022 2023 Legacy & Contracts…
  44. FY 2019 Results – Origin Energy Ltd. – slide 44
    Oil price risk management 85 FY2020 Oil hedging FY2020 oil hedging 80 FY20 effective price 28 million1 hedge premium FY20 effective price after hedging Effective oil price (US/bbl) 75 Gain of 21 million based on 70…
  45. FY 2019 Results – Origin Energy Ltd. – slide 45
    Provision for legacy sites We hold provisions for the remediation of a number of legacy sites that historically operated as gasworks The largest provision for site remediation relates to the Osborne site in South Australia which…
  46. FY 2019 Results – Origin Energy Ltd. – slide 46
    Statutory to Underlying Profit Reconciliation from Statutory to Underlying Profit Year ended 30 June 2019 2018 Change Change (m) (m) (m) (%) Statutory Profit/(Loss) - continuing operations 1,211 280 931 333 Statutory Profit/(Loss) -…
  47. FY 2019 Results – Origin Energy Ltd. – slide 47
    Segment summary Energy Markets Share of APLNG Integrated Corporate Total Year Ended 30 June (m) Gas - Other 2019 2018 1,2 1,2 2019 2018 2019 2018 2019 2018 2019 20181,2 1,2 Underlying EBITDA 1,574 1,651 2,123 1,405 (231) (154)…
  48. FY 2019 Results – Origin Energy Ltd. – slide 48
    Underlying ROCE As at 30 Jun 2019 30 Jun 2018 Change Change (m) (m) (m) (%) Capital Employed Net Assets - continuing operations 13,149 11,828 1,321 11 including: Investment in APLNG 6,960 5,988 972 16 MRCPS issued by APLNG 3,045…
  49. FY 2019 Results – Origin Energy Ltd. – slide 49
    Reconciliation of Adjusted Net Debt Issue Issue Hedged Hedged AUD m AUD m AUD m Currency Notional Currency Notional 30-Jun-19 30-Jun-19 30-Jun-19 Debt and Interest- CCIRS fair Adjusted net bearing value debt liabilities…
  50. FY 2019 Results – Origin Energy Ltd. – slide 50
    Capital expenditure program 600 FY2020 Capex Generation sustain includes 25 million 500 in creditor payments from the prior year, cost associated with Mortlake 400 repairs and Eraring ash dam as well as other scheduled…
  51. FY 2019 Results – Origin Energy Ltd. – slide 51
    FY2019 breakeven FY2019 FY2019 100% APLNG (Am) Change Actual1 Guidance1 Capital expenditure Sustain 1,175 1,320 (145) Capital expenditure E&A 102 140 (38) Operating expenses pre 1,649 1,690 (41) capitalisation2 Less: Spot LNG &…
  52. FY 2019 Results – Origin Energy Ltd. – slide 52
    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 30 June 2019 (the…
  53. FY 2019 Results – Origin Energy Ltd. – slide 53
    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 Group Manager, Investor Relations Email: liam.barryoriginenergy.com.au…
  54. FY 2019 Results – Origin Energy Ltd. – slide 54
    Thank You

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