2016 ANNUAL GENERAL MEETING 19 October 2016
Important Notices Forward looking statements This presentation contains forward looking statements, including statements of current intention, statements of opinion, guidance and predictions as to possible future events. Such statements are not statements of fact and there can be no assurance or certainty of outcome in relation to the matters to which the statements relate. These forward looking statements involve known and unknown risks, uncertainties, assumptions, contingencies and other important factors that could cause the actual outcomes to be materially different from the future events or results expressed or implied by such statements. Those risks, uncertainties, assumptions, contingencies 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 related bodies corporate, joint ventures and associated undertakings operate. They also include general economic conditions, exchange rates, interest rates, regulatory environments, 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, warranty, assurance or guarantee as to the accuracy or completeness of all or part of this presentation, or any constituent or associated presentation, information or material, or the accuracy or likelihood of fulfilment of any forward looking statement (or any outcomes expressed or implied in any forward looking statements), forecast, prospect or return contained in or implied by the information in this presentation or any part of it. The forward looking statements in this report 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 or otherwise. 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
Oil continued to impact Origin share price 120 100 80 60 40 20 FY2015 FY2016 0 S&P ASX 100 Origin US$ Brent 3
Adjusted net debt reduced by $4 billion 14 13.1 (2.9) 12 13.1 (2.9) 10 (2.5) 0.4 (2.5) 1.2 9.1 9.1 1 (0.1) $ billion 0.7 8 (1.3) 0.6 (1.3) 6 4 2 0 30-Jun-15 Sale of Contact Entitlement Asset sales Cash Flow from Interest Capital APLNG cash Dividend 30-Jun-16 Adjusted Net Offer Operations payments expenditure contributions payments Adjusted Net Debt Debt 4 (1) Of the $484 million in asset sales announced in FY2016, $118 million in proceeds was received in FY2016, with the remaining $366 million expected in FY2017.
Cash flow optimised through disciplined use of capital Net Cash Flow from Operating and Investing Activities (Total Operations) 1,500 (280) 1,641 1,215 500 $ million 1,413 (500) (1,500) 522 (2,081) (2,500) FY2015 Energy Integrated Corporate Contact FY2016 Markets Gas 5
An oil hedging strategy for FY2018 has commenced • 15 million barrels 1 have been hedged in FY2018 using a combination of puts and collars with a floor strike of US$45 per barrel - The collar hedge consists of 8.5 million barrels capped at an average of US$70 per barrel • The strategy is focused on protecting the Company’s ability to repay debt by reducing downside oil price risks whilst maintaining substantial oil price upside exposure • The cost of the hedge is A$35m (after tax) • Additional FY2018 oil hedging is dependent on market conditions 6 1. As at 14 October 2016.
Energy Markets delivered EBITDA and cash flow growth Net cash flow from Operating Underlying EBITDA and Investing Activities $m $m 1,600 1,600 Lower cost to serve + $522 m + 6% 1,330 EBIT/Sales margin increased 1,200 1,200 1,262 1,260 from 9.6% to 10.1% 800 800 Customer accounts stable at 740 4.2 million 400 400 Improved customer satisfaction - - FY2015 FY2016 FY2015 FY2016 7
APLNG commenced exports in January 2016 50 cargoes shipped to date Productivity focus Train 1 production exceeding nameplate capacity 8
Positive outlook for Energy Markets Underlying EBITDA $m 1,600 Low cost business model Customer service improving 1,200 (38% on e-billing) $1.44 – $1.33bn 800 $1.44 – $1.54bn Innovative products & services $1.33bn $1.54bn (data analytics) 400 Utility scale renewables (+800 MW) 0 FY2016 FY2017 Actual Guidance 9
Continued progress in Integrated Gas Underlying EBITDA $m 1,400 1,200 Train 1 120-day operational test complete 1,000 800 Train 2 first cargo achieved 600 $1.0 – $1.15bn 400 $0.4bn 200 0 FY2016 FY2017 Actual Guidance 10
Origin’s existing FY2017 guidance remains appropriate • Overall Origin EBITDA guidance remains appropriate • Guidance based on FY2017 Guidance A$ million Average oil price of US$52.90, AUD/USD exchange rate of 0.74 - Energy Markets 1,440 - 1,540 350 – 400 APLNG Train 2 revenue recognition commencing in Q3 FY2017 E&P - 650 – 750 LNG • Origin expects adjusted net debt to be well below $9 billion at the end of FY2017 Corporate (70 - 75) Total EBITDA 1 2,370 - 2,615 • Expected remaining contributions to APLNG unchanged at ~$0.6 billion (from 1 July 2016 until APLNG is self funding) % increase from FY2016 1 45 - 60% • Asset sales program on track to achieve in excess of $800 million • NPAT guidance not provided due to variability in non-cash items below EBITDA as APLNG transitions from development to operations. An update will be provided at the half year results. 1) Origin expects a 45-60% increase in Underlying EBITDA for FY2017 when compared to FY2016 Underlying EBITDA from continuing operations 11
Origin is Australia’s leading clean energy company Committed to all seven of the We Mean Business Coalition initiatives Over 800 MW of large scale renewables contracted Planning to build or contract another 1000 – 1500 MW of large scale renewables by 2020 400,000 electricity customers with rooftop solar Grew solar sales by 95% in FY2016 12
Making Origin a safer place to work Total Recordable Injury Frequency Rate (TRIFR) 300 6 250 5 200 4 150 3 100 2 50 1 0 0 FY2014 FY2015 FY2016 Recordable injuries (LHS) TRIFR (RHS) 13
FORMAL BUSINESS 14
Items of Business Financial Report 1. Re-election of Mr Gordon Cairns 2. Re-election of Mr Bruce Morgan 3. Remuneration Report 4. Equity grants to Managing Director Mr Grant King 5. Renewal of proportional takeover provisions 6. 15
2016 AGM Summary of Proxy Voting as at Proxy Close Item of Business FOR AGAINST OPEN 2. Re-election of Mr Gordon Cairns 946,358,983 10,226,474 13,740,233 (97.53%) (1.05%) (1.42%) 3. Re-election of Mr Bruce Morgan 956,694,576 9,086,980 13,672,277 (97.67%) (0.93%) (1.40%) 4. Remuneration Report 932,830,726 29,853,436 13,301,371 (95.58%) (3.06%) (1.36%) 5. Equity grants to Managing 804,080,162 161,413,714 12,901,550 Director Mr Grant King (82.18%) (16.50%) (1.32%) 6. Renewal of proportional 959,796,919 4,793,706 13,719,453 takeover provisions (98.11%) (0.49%) (1.40%) 16
2016 ANNUAL GENERAL MEETING 19 October 2016 17
2016 ANNUAL GENERAL MEETING 19 October 2016 18
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