2013 annual general meeting - origin energy
TRANSCRIPT
Important Noticep
Forward looking statements
This presentation contains forward looking statements, including statements of current intention, statements of opinion and predictions as to possible future events Such statements are not statements of fact and there can be no certainty of outcome in predictions as to possible future events. Such statements are not statements of fact and there can be no certainty of outcome in relation to the matters to which the statements relate. These forward looking statements involve known and unknown risks, uncertainties, assumptions and other important factors that could cause the actual outcomes to be materially different from the events or results expressed or implied by such statements. Those risks, uncertainties, assumptions and other important factors are not all within the control of Origin and cannot be predicted by Origin and include changes in circumstances or events that may cause objectives to change as well as risks, circumstances and events specific to the industry, countries and markets in which Origin and its
l d b di j i d i d d ki Th l i l d l i di irelated bodies corporate, joint ventures and associated undertakings operate. They also include general economic conditions, exchange rates, interest rates, the regulatory environment, competitive pressures, selling price, market demand and conditions in the financial markets which may cause objectives to change or may cause outcomes not to be realised.
None of Origin Energy Limited or any of its respective subsidiaries, affiliates and associated companies (or any of their respective officers, employees or agents) (the Relevant Persons) makes any representation, assurance or guarantee as to the accuracy or lik lih d f f lfil t f f d l ki t t t t d i li d i f d l ki t t t Th likelihood of fulfilment of any forward looking statement or any outcomes expressed or implied in any forward looking statements. The forward looking statements in this presentation reflect views held only at the date of this presentation.
Statements about past performance are not necessarily indicative of future performance.
Except as required by applicable law or the ASX Listing Rules, the Relevant Persons disclaim any obligation or undertaking to publicly update any forward looking statements, whether as a result of new information or future events.p y g
No offer of securities
This presentation does not constitute investment advice, or an inducement or recommendation to acquire or dispose of any securities in Origin, in any jurisdiction.
2 |
The Board
Ralph J Norris KNZM I d d t N ti Di tIndependent Non-executive Director
3 |
The Board
Karen A Moses E ti Di t Fi d St tExecutive Director, Finance and Strategy
4 |
5 |
The Board
Bruce Morgan I d d t N ti Di tIndependent Non-executive Director
6 |
7 |
Company Secretary
Andrew C Clarke G G l C l d C Group General Counsel and Company Secretary
8 |
The Board
Gordon M Cairns I d d t N ti Di tIndependent Non-executive Director
9 |
The Board
Helen M Nugent AO I d d t N ti Di tIndependent Non-executive Director
10 |
The Board
John H Akehurst I d d t N ti Di tIndependent Non-executive Director
11 |
12 |
2. Policy environment
3. Reflecting on Origin’s growth3. Reflecting on Origin s growth
4. Board and management
15 |
Statutory Profit 378 980 (61%)Statutory Profit 378 980 (61%)
Statutory EPS 34.6 cps 90.6 cps (62%)
Revenue 14,619 12,935 13%
Underlying EPS* 69.5 cps 82.6 cps (16%)
Group OCAT* 1 142 1 781 (36%)Group OCAT 1,142 1,781 (36%)
Free cash flow* 1,188 1,415 (16%)
Free cash flow per share* 108.2 cps 129.9 cps (17%)
Capital Expenditure1 1,172 1,680 (30%)
Origin’s cash contributions to APLNG2 561 1,167 (52%)
Origin Undrawn Committed Debt Facilities and cash3 5 251 4 191 25%Origin Undrawn Committed Debt Facilities and cash 5,251 4,191 25%
1) Capital expenditure is based on cash flow amounts rather than accrual accounting amounts; includes growth and stay-in-business capital expenditure, capitalised interest, acquisition expenditure
2) Origin’s cash contributions to APLNG made partially via loan repayments.2) Origin s cash contributions to APLNG made partially via loan repayments. 3) Excluding Contact and bank guarantees. * Refer Glossary
16 |
Origin entered into a new $7.4 billion bank loan facility to refinance all existing unsecured bank debt on new to refinance all existing unsecured bank debt on new terms and pricing and extend its debt maturity profile …
4,000 4,500
Origin Debt & Bank Guarantee Pro-forma Maturity Profile as at 30 September 2013^
Loan & Bank Guarantees - Undrawn
l $1 2b b i ti
2 000 2,500 3,000 3,500
$ m
plus $1.2b oversubscriptions
0 500
€800m note issuances
23 +
^Origin debt maturity profile as at 30 September 2013 adjusted for: (1) $1.2b bank oversubscriptions; (2) US$800m and Euro 800m notes issuances and cancellation of the $2b Capital Market Tranche; (3) Excludes NZ$200m Preference Shares.
… Origin is fully funded for its investment in Australia Pacific LNG17 |
Social changes and environmental challenges in our sector require improved disclosure sector require improved disclosure ...
... Origin’s Sustainability Report demonstrates greater focus and transparency on this critical aspect of our business
18 |
Public debate about coal seam gas has been clouded by misinformation clouded by misinformation ...
... and Origin continues to take a leadership position on CSG 19 |
Origin is focused on fair representation and equitable treatment of women through all levels of our treatment of women through all levels of our workforce ...
27% 40%27% 40% WOMEN IN THE WOMEN IN
22% WORKPLACEPROFESSIONAL AND
11% 90%11% WOMEN IN EXECUTIVE MANAGEMENT TEAM
90% WOMEN STILL IN ROLES 1 YEAR AFTER MATERNITY
... which will help Origin be a more successful organisation
MANAGEMENT TEAM LEAVE
Australia must develop a comprehensive policy framework framework ...
... which will allow the nation to capitalise on its resources position and capture growing market opportunities
22 |
Australia has the potential to create significant benefits through natural gas development benefits through natural gas development ...
... however, policy must promote investment in exploration and supply to meet demand23 |
Australia needs the appropriate climate change policy settingssettings...
...without locking the nation into considerably higher future electricity costs24 |
Origin has long advocated for energy price deregulation as it promotes competition investment and as it promotes competition, investment and innovation ...
... which is in the long-term interest of both consumers and the broader energy market25 |
3. Reflecting on Origin’s growth
26 |
Since demerger from Boral in 2000, Origin has built the leading Australian integrated energy company the leading Australian integrated energy company ...
The largest integrated energy business in Australia and
Joint developer of Australia Pacific LNG’s t t i CSG t
Growing resource opportunities d ti llin Australia and
New Zealand two train CSG to LNG project
domestically and overseas
based on Australia’s largest customer base the largest ... based on Australia s largest customer base, the largest power generation portfolio and a strong upstream gas business
27 |
The development and growth of the Company ...
... has been captured in our Annual Reports since Origin’s demerger from Boral28 |
Throughout Origin’s history, the Board and management team have been united in our vision for the Companyteam have been united in our vision for the Company...
...which has become one of the hallmarks of Origin’s success 29 |
Origin drilled its first CSG exploration well in 1993 ...
... and began acquiring major CSG assets in Queensland in 1996/9730 |
4. Board and management
32 |
During the past year, Board and management worked to ensure the relevant issues in Origin are being to ensure the relevant issues in Origin are being addressed ...
... and your Company is well-placed to continue to deliver increasing value for shareholders33 |
Chairman’s Address
2. Underlying business performance
3. Trading update and future prospects3. Trading update and future prospects
4. Conclusion
10 0
6 0 7.0 8.0 9.0
10.0
6.7
2000000
2500000
3000000
500000
1000000
1500000
2000000
D e Fe Ap Ju Au
ith 11 Lif S i R l i t d d t d i f th … with 11 Life Saving Rules introduced to drive further improvements towards our objective of zero harm
(1) Total Recordable Injury Frequency Rate.37 |
2. Underlying business performance
Origin continues to focus on four key priorities
Improving the performance of our existing businesses • Removal of controls on retail pricing reduces risk and improves earnings potential
• Stabilising competitive environment reduces churn and improves longer term outlook for margin
• Implementation of retail systems improves operating effectiveness and competitive capability
• Investments to improve availability and capacity of upstream assets and additional gas contracting will provide benefits
• Completion of Contact’s investment in lower cost and flexible generation reduces exposure to • Completion of Contact s investment in lower cost and flexible generation reduces exposure to hydrology and improves reliability of earnings
• Reduction in employee numbers, business restructuring and asset sales reduce costs base
Delivering the Australia Pacific LNG Project
Managing the funding of our investment in Australia Pacific LNG
Delivering the Australia Pacific LNG Project • Project on track with delivery of first LNG targeted in mid 2015
g g g • Origin entered into a new $7.4 billion bank loan facility and accepted oversubscriptions of $1.2
billion to refinance all existing unsecured bank debt on new terms and pricing and extend debt maturity profile
• $2.0 billion of the bank loan facility was refinanced via US$800 million and Euro800 million notes $2.0 billion of the bank loan facility was refinanced via US$800 million and Euro800 million notes issuances
• Origin is fully funded for its investment in Australia Pacific LNG
Creating growth opportunities for the future
39 |
following completion of Australia Pacific LNG
Underlying Profit1 of $760m was a 15% reduction on the prior year on the prior year …
1,000 Underlying Profit2
CAGR 19%3
Financial Year
… however this is the second highest Underlying Profit t d i O i i ’ hi t
(1) Underlying profit is a non-IFRS measure used internally by management to assess the performance of Origin’s business, and to make decisions on allocation of resources.
(2) Amounts for years 2001 to 2005 reflect previous AGAAP and have not been restated under IFRS. (3) From listing until 30 June 2013.
reported in Origin’s history
40 |
Energy market remained highly competitive with increased churn and discounting increased churn and discounting …
7
20
0)
-48
41 |
acquisition and retention, with this trend continuing into the new financial year
Investment in new retail systems nearing completion, with all mass market customers now migrated1with all mass market customers now migrated1 …
… allowing delivery of new products and services to help g y p p build better, more direct relationships with customers
(1) Migration of Country Energy customers completed on 9 October 2013.42 |
Origin is the leading power generator in Australia with 6 010 MW of capacity with 6,010 MW of capacity …
Eraring Power Station NSW
Eraring Power Station, NSW
… and recently completed the acquisition of Eraring Energy, providing further scale and flexibility benefits
43 |
Origin has boosted its gas portfolio with recent contracts contracts …
Recent gas purchasesSources and uses of Energy Markets’
3rd party
gy East Coast gas portfolio
APLNG purchases
Mass Market / C&Ipu c ases
Recent gas sales 50
PJ / Mass Market / C&I
Max Production Potential Above ToP 3rd party contracts JV Partners - Contracted
0 Sources Uses
and is positioned to benefit from a significant increase in
44 |
… and is positioned to benefit from a significant increase in east coast gas demand
Recent investments in Contact’s generation portfolio will improve flexibility and lower generation costs will improve flexibility and lower generation costs …
Stratford Peaker Te Mihi geothermal Power Station
45 |
Investments in Exploration & Production assets improves reliability and increases production capacity … reliability and increases production capacity …
BassGas
Otway
46 |
… combined with a flexible gas portfolio will enable increased supply into a growing east coast gas market
Australia Pacific LNG is on budget and on schedule to deliver first LNG by mid-2015 to deliver first LNG by mid-2015 …
creating a step change in Origin’s earnings and cash
47 |
… creating a step change in Origin s earnings and cash flows which will support future growth
Major Upstream and Downstream milestones continue to be metto be met
Upstream
Cable installation in Combabula Inlet risers at gas processing facilityGathering works in Condabri
Downstream
48 | LNG Tank B – roof raised on 29 July Batam Module Yard – Propane Condensate ModuleCurtis Island
Australia Pacific LNG’s industry-leading 2P reserves base includes prime acreage in both known “sweet spots” …includes prime acreage in both known sweet spots …
Australia Pacific LNG Reserves and Resources (100%)
Australia Pacific LNG permits
3P 2P Ramp and Tail Gas Train 2 Train 1
1
… more than covers gas requirements for all domestic
QCLNG GSA Domestic Gas Origin Contract Ramp and Tail Gas Train 2 Train 1APLNG tenure in the Surat and Bowen basins at 30 June 2012
49 | (1) Some of Australia Pacific LNG’s CSG reserves and resources are subject to reversionary rights to transfer back to Tri-Star a 45% interest in
APLNG’s share of those CSG interests that were acquired from Tri-Star in 2002 if certain conditions are met.
contracts and offtakes for both LNG trains
Origin entered into a new $7.4 billion bank loan facility to refinance all existing unsecured bank debt on new to refinance all existing unsecured bank debt on new terms and pricing and extend its debt maturity profile …
4,000 4,500
Origin Debt & Bank Guarantee Pro-forma Maturity Profile as at 30 September 2013^
Loan & Bank Guarantees - Undrawn
l $1 2b b i ti
2 000 2,500 3,000 3,500
m ill
io n
plus $1.2b oversubscriptions
0 500
€800m note issuances
23 +
^Origin debt maturity profile as at 30 September 2013 adjusted for: (1) $1.2b bank oversubscriptions; (2) US$800m and Euro 800m notes issuances and cancellation of the $2b Capital Market Tranche; (3) Excludes NZ$200m Preference Shares.
… Origin is fully funded for its investment in Australia Pacific LNG50 |
Capital expenditure in Origin’s existing businesses has reduced significantly has reduced significantly …
Growth and Acquisition Capex 5 000
4,000
5,000
000
2,000
$ m
Financial Year
… as these businesses have matured, making cash flow available to fund other activities51 |
Progressing existing development opportunities …
Origin continues to prepare existing gas and renewable energy development opportunities for FID to be taken in the medium term:
Gas opportunities such as Ironbark in Queensland • Gas opportunities such as Ironbark in Queensland and Halladale/Black Watch in the Otway Basin
• Stockyard Hill, a large scale wind project in western Victoria
Exploration activities
• Origin will continue exploration activities to increase its gas resource position, including by g p , g y participation in projects such as the planned well to be drilled in Canterbury Basin, New Zealand
Future renewable opportunities
• Controlled spend will continue to grow Origin’s position in hydro and geothermal resources
52 |
… to provide medium-term growth following completion of Australia Pacific LNG
3. Trading update and future prospects
53 |
57 |
Resolutions 2 and 3:Resolutions 2 and 3: Election and Re-election of Directors
58 |
59 |
Resolution 2: Election of Mr Bruce W D MorganElection of Mr Bruce W D Morgan
Bruce W D Morgan Independent Non-executive Director
60 |
Resolution 2: Election of Mr Bruce W D MorganElection of Mr Bruce W D Morgan
Proxy votes received:
Abstain 1,536,426
62 |
Resolution 3: Re-election of Mr Gordon M CairnsRe election of Mr Gordon M Cairns
Gordon M Cairns Independent Non-Executive Director
63 |
Resolution 3: Re-election of Mr Gordon M CairnsRe election of Mr Gordon M Cairns
Proxy votes received:
Abstain 1,419,180
Proxy votes received:
Abstain 2,747,206
67 |
Proxy votes received:
Abstain 3,456,139
69 |
Fi i l i f tiFinancial information
Origin’s Statutory Profit contains a number of items that when excluded provide a different perspective on the financial and operational performance of the business. Income Statement amounts presented on an underlying basis such as Underlying Consolidated Profit, are non- IFRS financial measures, and exclude the impact of these items consistent with the manner in which the Managing Director reviews the financial and operating performance of the business. Each underlying measure disclosed has been adjusted to remove the impact of these p g p y g j p items on a consistent basis.
This presentation also includes certain other non-IFRS financial measures. These non-IFRS financial measures are used internally by management to assess the performance of Origin’s business and make decisions on allocation of resources. Non-IFRS measures have not been subject to audit or review.
Non-IFRS Financial Measures
Non-IFRS Financial measures are financial measures that are presented other than in accordance with all relevant Accounting Standards.
Term MeaningTerm Meaning Free cash flow Cash available to fund distributions to shareholders and growth capital expenditure.
Free cash flow per share Free cash flow divided by the closing number of shares on issue.
Group OCAT Group Operating cash flow after tax (OCAT) of the consolidated entity (including Origin’s share of Australia Pacific LNG OCAT). Underlying measures are measures used internally by management to assess the profitability of the Origin business.
Underlying profit and loss measures: - EPS - Profit
y g y y g p y g The Underlying profit and loss measures are derived from the equivalent Statutory profit measures disclosed in the Consolidated Financial Statements and exclude the impact of certain items that do not align with the manner in which the Managing Director reviews the financial and operating performance of the business. Underlying Consolidated Profit is disclosed in note 2 of the Origin Consolidated Financial Statements. Underlying EPS is disclosed in note 32 of the Origin Consolidated Financial Statements.
70 |
Forward looking statements
This presentation contains forward looking statements, including statements of current intention, statements of opinion and predictions as to possible future events Such statements are not statements of fact and there can be no certainty of outcome in predictions as to possible future events. Such statements are not statements of fact and there can be no certainty of outcome in relation to the matters to which the statements relate. These forward looking statements involve known and unknown risks, uncertainties, assumptions and other important factors that could cause the actual outcomes to be materially different from the events or results expressed or implied by such statements. Those risks, uncertainties, assumptions and other important factors are not all within the control of Origin and cannot be predicted by Origin and include changes in circumstances or events that may cause objectives to change as well as risks, circumstances and events specific to the industry, countries and markets in which Origin and its
l d b di j i d i d d ki Th l i l d l i di irelated bodies corporate, joint ventures and associated undertakings operate. They also include general economic conditions, exchange rates, interest rates, the regulatory environment, competitive pressures, selling price, market demand and conditions in the financial markets which may cause objectives to change or may cause outcomes not to be realised.
None of Origin Energy Limited or any of its respective subsidiaries, affiliates and associated companies (or any of their respective officers, employees or agents) (the Relevant Persons) makes any representation, assurance or guarantee as to the accuracy or lik lih d f f lfil t f f d l ki t t t t d i li d i f d l ki t t t Th likelihood of fulfilment of any forward looking statement or any outcomes expressed or implied in any forward looking statements. The forward looking statements in this presentation reflect views held only at the date of this presentation.
Statements about past performance are not necessarily indicative of future performance.
Except as required by applicable law or the ASX Listing Rules, the Relevant Persons disclaim any obligation or undertaking to publicly update any forward looking statements, whether as a result of new information or future events.p y g
No offer of securities
This presentation does not constitute investment advice, or an inducement or recommendation to acquire or dispose of any securities in Origin, in any jurisdiction.
2 |
The Board
Ralph J Norris KNZM I d d t N ti Di tIndependent Non-executive Director
3 |
The Board
Karen A Moses E ti Di t Fi d St tExecutive Director, Finance and Strategy
4 |
5 |
The Board
Bruce Morgan I d d t N ti Di tIndependent Non-executive Director
6 |
7 |
Company Secretary
Andrew C Clarke G G l C l d C Group General Counsel and Company Secretary
8 |
The Board
Gordon M Cairns I d d t N ti Di tIndependent Non-executive Director
9 |
The Board
Helen M Nugent AO I d d t N ti Di tIndependent Non-executive Director
10 |
The Board
John H Akehurst I d d t N ti Di tIndependent Non-executive Director
11 |
12 |
2. Policy environment
3. Reflecting on Origin’s growth3. Reflecting on Origin s growth
4. Board and management
15 |
Statutory Profit 378 980 (61%)Statutory Profit 378 980 (61%)
Statutory EPS 34.6 cps 90.6 cps (62%)
Revenue 14,619 12,935 13%
Underlying EPS* 69.5 cps 82.6 cps (16%)
Group OCAT* 1 142 1 781 (36%)Group OCAT 1,142 1,781 (36%)
Free cash flow* 1,188 1,415 (16%)
Free cash flow per share* 108.2 cps 129.9 cps (17%)
Capital Expenditure1 1,172 1,680 (30%)
Origin’s cash contributions to APLNG2 561 1,167 (52%)
Origin Undrawn Committed Debt Facilities and cash3 5 251 4 191 25%Origin Undrawn Committed Debt Facilities and cash 5,251 4,191 25%
1) Capital expenditure is based on cash flow amounts rather than accrual accounting amounts; includes growth and stay-in-business capital expenditure, capitalised interest, acquisition expenditure
2) Origin’s cash contributions to APLNG made partially via loan repayments.2) Origin s cash contributions to APLNG made partially via loan repayments. 3) Excluding Contact and bank guarantees. * Refer Glossary
16 |
Origin entered into a new $7.4 billion bank loan facility to refinance all existing unsecured bank debt on new to refinance all existing unsecured bank debt on new terms and pricing and extend its debt maturity profile …
4,000 4,500
Origin Debt & Bank Guarantee Pro-forma Maturity Profile as at 30 September 2013^
Loan & Bank Guarantees - Undrawn
l $1 2b b i ti
2 000 2,500 3,000 3,500
$ m
plus $1.2b oversubscriptions
0 500
€800m note issuances
23 +
^Origin debt maturity profile as at 30 September 2013 adjusted for: (1) $1.2b bank oversubscriptions; (2) US$800m and Euro 800m notes issuances and cancellation of the $2b Capital Market Tranche; (3) Excludes NZ$200m Preference Shares.
… Origin is fully funded for its investment in Australia Pacific LNG17 |
Social changes and environmental challenges in our sector require improved disclosure sector require improved disclosure ...
... Origin’s Sustainability Report demonstrates greater focus and transparency on this critical aspect of our business
18 |
Public debate about coal seam gas has been clouded by misinformation clouded by misinformation ...
... and Origin continues to take a leadership position on CSG 19 |
Origin is focused on fair representation and equitable treatment of women through all levels of our treatment of women through all levels of our workforce ...
27% 40%27% 40% WOMEN IN THE WOMEN IN
22% WORKPLACEPROFESSIONAL AND
11% 90%11% WOMEN IN EXECUTIVE MANAGEMENT TEAM
90% WOMEN STILL IN ROLES 1 YEAR AFTER MATERNITY
... which will help Origin be a more successful organisation
MANAGEMENT TEAM LEAVE
Australia must develop a comprehensive policy framework framework ...
... which will allow the nation to capitalise on its resources position and capture growing market opportunities
22 |
Australia has the potential to create significant benefits through natural gas development benefits through natural gas development ...
... however, policy must promote investment in exploration and supply to meet demand23 |
Australia needs the appropriate climate change policy settingssettings...
...without locking the nation into considerably higher future electricity costs24 |
Origin has long advocated for energy price deregulation as it promotes competition investment and as it promotes competition, investment and innovation ...
... which is in the long-term interest of both consumers and the broader energy market25 |
3. Reflecting on Origin’s growth
26 |
Since demerger from Boral in 2000, Origin has built the leading Australian integrated energy company the leading Australian integrated energy company ...
The largest integrated energy business in Australia and
Joint developer of Australia Pacific LNG’s t t i CSG t
Growing resource opportunities d ti llin Australia and
New Zealand two train CSG to LNG project
domestically and overseas
based on Australia’s largest customer base the largest ... based on Australia s largest customer base, the largest power generation portfolio and a strong upstream gas business
27 |
The development and growth of the Company ...
... has been captured in our Annual Reports since Origin’s demerger from Boral28 |
Throughout Origin’s history, the Board and management team have been united in our vision for the Companyteam have been united in our vision for the Company...
...which has become one of the hallmarks of Origin’s success 29 |
Origin drilled its first CSG exploration well in 1993 ...
... and began acquiring major CSG assets in Queensland in 1996/9730 |
4. Board and management
32 |
During the past year, Board and management worked to ensure the relevant issues in Origin are being to ensure the relevant issues in Origin are being addressed ...
... and your Company is well-placed to continue to deliver increasing value for shareholders33 |
Chairman’s Address
2. Underlying business performance
3. Trading update and future prospects3. Trading update and future prospects
4. Conclusion
10 0
6 0 7.0 8.0 9.0
10.0
6.7
2000000
2500000
3000000
500000
1000000
1500000
2000000
D e Fe Ap Ju Au
ith 11 Lif S i R l i t d d t d i f th … with 11 Life Saving Rules introduced to drive further improvements towards our objective of zero harm
(1) Total Recordable Injury Frequency Rate.37 |
2. Underlying business performance
Origin continues to focus on four key priorities
Improving the performance of our existing businesses • Removal of controls on retail pricing reduces risk and improves earnings potential
• Stabilising competitive environment reduces churn and improves longer term outlook for margin
• Implementation of retail systems improves operating effectiveness and competitive capability
• Investments to improve availability and capacity of upstream assets and additional gas contracting will provide benefits
• Completion of Contact’s investment in lower cost and flexible generation reduces exposure to • Completion of Contact s investment in lower cost and flexible generation reduces exposure to hydrology and improves reliability of earnings
• Reduction in employee numbers, business restructuring and asset sales reduce costs base
Delivering the Australia Pacific LNG Project
Managing the funding of our investment in Australia Pacific LNG
Delivering the Australia Pacific LNG Project • Project on track with delivery of first LNG targeted in mid 2015
g g g • Origin entered into a new $7.4 billion bank loan facility and accepted oversubscriptions of $1.2
billion to refinance all existing unsecured bank debt on new terms and pricing and extend debt maturity profile
• $2.0 billion of the bank loan facility was refinanced via US$800 million and Euro800 million notes $2.0 billion of the bank loan facility was refinanced via US$800 million and Euro800 million notes issuances
• Origin is fully funded for its investment in Australia Pacific LNG
Creating growth opportunities for the future
39 |
following completion of Australia Pacific LNG
Underlying Profit1 of $760m was a 15% reduction on the prior year on the prior year …
1,000 Underlying Profit2
CAGR 19%3
Financial Year
… however this is the second highest Underlying Profit t d i O i i ’ hi t
(1) Underlying profit is a non-IFRS measure used internally by management to assess the performance of Origin’s business, and to make decisions on allocation of resources.
(2) Amounts for years 2001 to 2005 reflect previous AGAAP and have not been restated under IFRS. (3) From listing until 30 June 2013.
reported in Origin’s history
40 |
Energy market remained highly competitive with increased churn and discounting increased churn and discounting …
7
20
0)
-48
41 |
acquisition and retention, with this trend continuing into the new financial year
Investment in new retail systems nearing completion, with all mass market customers now migrated1with all mass market customers now migrated1 …
… allowing delivery of new products and services to help g y p p build better, more direct relationships with customers
(1) Migration of Country Energy customers completed on 9 October 2013.42 |
Origin is the leading power generator in Australia with 6 010 MW of capacity with 6,010 MW of capacity …
Eraring Power Station NSW
Eraring Power Station, NSW
… and recently completed the acquisition of Eraring Energy, providing further scale and flexibility benefits
43 |
Origin has boosted its gas portfolio with recent contracts contracts …
Recent gas purchasesSources and uses of Energy Markets’
3rd party
gy East Coast gas portfolio
APLNG purchases
Mass Market / C&Ipu c ases
Recent gas sales 50
PJ / Mass Market / C&I
Max Production Potential Above ToP 3rd party contracts JV Partners - Contracted
0 Sources Uses
and is positioned to benefit from a significant increase in
44 |
… and is positioned to benefit from a significant increase in east coast gas demand
Recent investments in Contact’s generation portfolio will improve flexibility and lower generation costs will improve flexibility and lower generation costs …
Stratford Peaker Te Mihi geothermal Power Station
45 |
Investments in Exploration & Production assets improves reliability and increases production capacity … reliability and increases production capacity …
BassGas
Otway
46 |
… combined with a flexible gas portfolio will enable increased supply into a growing east coast gas market
Australia Pacific LNG is on budget and on schedule to deliver first LNG by mid-2015 to deliver first LNG by mid-2015 …
creating a step change in Origin’s earnings and cash
47 |
… creating a step change in Origin s earnings and cash flows which will support future growth
Major Upstream and Downstream milestones continue to be metto be met
Upstream
Cable installation in Combabula Inlet risers at gas processing facilityGathering works in Condabri
Downstream
48 | LNG Tank B – roof raised on 29 July Batam Module Yard – Propane Condensate ModuleCurtis Island
Australia Pacific LNG’s industry-leading 2P reserves base includes prime acreage in both known “sweet spots” …includes prime acreage in both known sweet spots …
Australia Pacific LNG Reserves and Resources (100%)
Australia Pacific LNG permits
3P 2P Ramp and Tail Gas Train 2 Train 1
1
… more than covers gas requirements for all domestic
QCLNG GSA Domestic Gas Origin Contract Ramp and Tail Gas Train 2 Train 1APLNG tenure in the Surat and Bowen basins at 30 June 2012
49 | (1) Some of Australia Pacific LNG’s CSG reserves and resources are subject to reversionary rights to transfer back to Tri-Star a 45% interest in
APLNG’s share of those CSG interests that were acquired from Tri-Star in 2002 if certain conditions are met.
contracts and offtakes for both LNG trains
Origin entered into a new $7.4 billion bank loan facility to refinance all existing unsecured bank debt on new to refinance all existing unsecured bank debt on new terms and pricing and extend its debt maturity profile …
4,000 4,500
Origin Debt & Bank Guarantee Pro-forma Maturity Profile as at 30 September 2013^
Loan & Bank Guarantees - Undrawn
l $1 2b b i ti
2 000 2,500 3,000 3,500
m ill
io n
plus $1.2b oversubscriptions
0 500
€800m note issuances
23 +
^Origin debt maturity profile as at 30 September 2013 adjusted for: (1) $1.2b bank oversubscriptions; (2) US$800m and Euro 800m notes issuances and cancellation of the $2b Capital Market Tranche; (3) Excludes NZ$200m Preference Shares.
… Origin is fully funded for its investment in Australia Pacific LNG50 |
Capital expenditure in Origin’s existing businesses has reduced significantly has reduced significantly …
Growth and Acquisition Capex 5 000
4,000
5,000
000
2,000
$ m
Financial Year
… as these businesses have matured, making cash flow available to fund other activities51 |
Progressing existing development opportunities …
Origin continues to prepare existing gas and renewable energy development opportunities for FID to be taken in the medium term:
Gas opportunities such as Ironbark in Queensland • Gas opportunities such as Ironbark in Queensland and Halladale/Black Watch in the Otway Basin
• Stockyard Hill, a large scale wind project in western Victoria
Exploration activities
• Origin will continue exploration activities to increase its gas resource position, including by g p , g y participation in projects such as the planned well to be drilled in Canterbury Basin, New Zealand
Future renewable opportunities
• Controlled spend will continue to grow Origin’s position in hydro and geothermal resources
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… to provide medium-term growth following completion of Australia Pacific LNG
3. Trading update and future prospects
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Resolutions 2 and 3:Resolutions 2 and 3: Election and Re-election of Directors
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Resolution 2: Election of Mr Bruce W D MorganElection of Mr Bruce W D Morgan
Bruce W D Morgan Independent Non-executive Director
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Resolution 2: Election of Mr Bruce W D MorganElection of Mr Bruce W D Morgan
Proxy votes received:
Abstain 1,536,426
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Resolution 3: Re-election of Mr Gordon M CairnsRe election of Mr Gordon M Cairns
Gordon M Cairns Independent Non-Executive Director
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Resolution 3: Re-election of Mr Gordon M CairnsRe election of Mr Gordon M Cairns
Proxy votes received:
Abstain 1,419,180
Proxy votes received:
Abstain 2,747,206
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Proxy votes received:
Abstain 3,456,139
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Fi i l i f tiFinancial information
Origin’s Statutory Profit contains a number of items that when excluded provide a different perspective on the financial and operational performance of the business. Income Statement amounts presented on an underlying basis such as Underlying Consolidated Profit, are non- IFRS financial measures, and exclude the impact of these items consistent with the manner in which the Managing Director reviews the financial and operating performance of the business. Each underlying measure disclosed has been adjusted to remove the impact of these p g p y g j p items on a consistent basis.
This presentation also includes certain other non-IFRS financial measures. These non-IFRS financial measures are used internally by management to assess the performance of Origin’s business and make decisions on allocation of resources. Non-IFRS measures have not been subject to audit or review.
Non-IFRS Financial Measures
Non-IFRS Financial measures are financial measures that are presented other than in accordance with all relevant Accounting Standards.
Term MeaningTerm Meaning Free cash flow Cash available to fund distributions to shareholders and growth capital expenditure.
Free cash flow per share Free cash flow divided by the closing number of shares on issue.
Group OCAT Group Operating cash flow after tax (OCAT) of the consolidated entity (including Origin’s share of Australia Pacific LNG OCAT). Underlying measures are measures used internally by management to assess the profitability of the Origin business.
Underlying profit and loss measures: - EPS - Profit
y g y y g p y g The Underlying profit and loss measures are derived from the equivalent Statutory profit measures disclosed in the Consolidated Financial Statements and exclude the impact of certain items that do not align with the manner in which the Managing Director reviews the financial and operating performance of the business. Underlying Consolidated Profit is disclosed in note 2 of the Origin Consolidated Financial Statements. Underlying EPS is disclosed in note 32 of the Origin Consolidated Financial Statements.
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