REG-Ørsted A/S Capital Markets Day: Ørsted confirms its ambition of ~50 GW renewable capacity by 2030 and strong financial outlook

Oersted A/SAnnouncement

07/06/2023 19:15

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   Ørsted A/S (Orsted)
   Capital Markets Day: Ørsted confirms its ambition of ~50 GW renewable
   capacity by 2030 and strong financial outlook

   07-Jun-2023 / 20:09 CET/CEST

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   7.6.2023 20:09:25 CEST | Ørsted A/S | Investor News

   Ørsted will host a Capital Markets Day (CMD) on 8 June 2023 to present
   recent progress and strategic updates on its ambition to become the
   world’s leading green energy major.

   Ørsted is committed to the following ambitions, financial targets, and
   financial policies for 2023-2030:

     • Ørsted confirms its fully self-funded ambition of ~50 GW installed
       renewable capacity by 2030 and expects to invest DKK ~475 billion in
       the period 2023-2030.
     • Ørsted confirms its target of an unlevered, fully loaded lifecycle IRR
       at 150-300 bps spread to WACC 1 .
     • Ørsted expands its EBITDA CAGR target from covering offshore and
       onshore assets in operation to cover the group-wide EBITDA (excluding
       new partnerships) in the period 2023-2030. Ørsted targets a group-wide
       EBITDA (excluding new partnerships) of DKK 50-55 billion in 2030,
       corresponding to a targeted annual average increase of 13-14 %.
     • Ørsted extends its return on capital employed (ROCE) target to the
       period 2023-2030, targeting an average ROCE of ~14 % in the period.
     • Ørsted remains committed to a BBB+/Baa1 rating.
     • Ørsted confirms its dividend policy of an annual high single-digit
       percentage increase in dividends until 2025 and extends its dividend
       policy to 2030 with an annual mid-level single-digit percentage
       increase in dividends paid from 2026 to 2030.
     • Ørsted is on track to deliver a ~98 % reduction in scope 1 and 2
       emissions in 2025 (relative to 2006) and net-zero for the full value
       chain in 2040.

   Ørsted expects to outperform EBITDA and ROCE targets set in 2021
   Ørsted has achieved strong progress towards its ambitions and targets set
   at the last CMD in 2021, leveraging its industry-leading capabilities
   through a challenging period for the industry and, as earlier
   communicated 2 , being on track to outperform its previous EBITDA and ROCE
   targets. Compared to the previous targets set by Ørsted at the last CMD in
   2021, Ørsted reaffirms its target of ~50 GW renewable capacity in 2030 and
   is on track to outperform the previous financial targets of an average
   ROCE of 11-12 % (2020-2027), now expecting ~15 % in 2020-2027, and EBITDA
   from offshore and onshore assets in operation of ~12 % CAGR (2020-2027),
   now expecting 15 % in 2020-2027. The previously expected gross investment
   of DKK ~350 billion (2020-2027) is trending higher at DKK 380 billion.

   Unprecedented political tailwind and growth potential
   In the two years since Ørsted’s last CMD in 2021, unprecedented political
   tailwinds have emerged, such as the transformative incentives in the US
   Inflation Reduction Act and the Net Zero Industry Act in the EU. The
   resulting growth potential for the renewables industry has never been
   higher.

   Ørsted has delivered strong progress and is strongly positioned to capture
   expected market growth. With the largest portfolio of assets in operation
   as well as the largest project pipeline across Europe, the US, and the
   Asia-Pacific (APAC) region, Ørsted remains the global leader in offshore
   wind. In addition, Ørsted has significantly grown its onshore renewables
   business and has become a leading player in bringing commercial scale to
   Power-to-X (P2X).

   Mads Nipper, Group President and CEO of Ørsted, says:
   “Ørsted has delivered strong progress since the CMD in 2021. We’ve
   completed several large projects, including the world’s largest offshore
   wind farm, we’ve been awarded new capacity, and we’ve been able to take
   FID on a large offshore wind project despite macroeconomic challenges.
   We’re on track to outperform our previous EBITDA and ROCE targets for
   2020-2027, confirming the significant value in our portfolio of renewable
   projects. Today, we confirm our target of ~50 GW in 2030 – one of the
   largest investment programmes in the green transition.”

   Industry-leading experience to support growth
   At present, Ørsted operates 15.5 GW of renewable energy assets, while
   4.9 GW are under construction across technologies. Ørsted has been awarded
   an additional 10.6 GW and has a renewable project pipeline of ~114 GW.

   For the awarded projects where Ørsted has not yet taken final investment
   decision (FID), Ørsted is working intensely to ensure sufficient value
   creation to take FID, despite increases in interest rates, inflation, and
   supply chain bottlenecks. Ørsted is working with its suppliers to secure
   capacity and competitive prices, pursuing revenue optimisation, including
   corporate power purchase agreements (CPPAs), and continuing dialogues with
   regulators on measures to ensure sustainable industry growth. Ultimately,
   Ørsted may reconfigure or exit awarded projects where Ørsted has as of
   this date not yet taken FID if it finds the value creation in the projects
   not to be sufficient.

   For future projects, Ørsted’s pipeline will allow the company to
   prioritise the most value-creating projects and stay financially
   disciplined when bidding in tenders and auctions. In addition, Ørsted’s
   long-standing supplier relationships will ensure capacity at competitive
   prices, while its customer relationships make it a preferred partner in
   decarbonisation.

   Mads Nipper continues: “Ørsted has a clear strategic direction and very
   strong capabilities to capture the massive growth in renewables in the
   years to come. Based on where we believe we can create most value, we’ve
   made clear choices on where to play – and where not to play – in terms of
   regions, markets, and technologies. We’re leveraging all our capabilities
   to improve the returns of the portfolio of awarded offshore projects, and
   we’ll only take FID on projects that we find will create sufficient value.
   Going forward, we see strong opportunities to build our renewable
   portfolio, including by investing a majority of our CAPEX in offshore,
   targeting an unlevered, fully loaded lifecycle IRR at 150-300 basis points
   spread to WACC at the time of bid or FID, whichever comes first.”

   Sustainability remains an integrated part of Ørsted’s strategy, and the
   company remains committed to driving a systemic change in the industry.
   Ørsted has taken significant action with its suppliers to decarbonise its
   entire supply chain and is on track to reach its science-based targets of
   98 % carbon emissions reductions (scopes 1 and 2) in 2025 and net-zero for
   the full value chain in 2040. Ørsted has entered partnerships with
   suppliers in relation to low-carbon foundations and towers as well as wind
   turbine blades made from recycled materials. In addition, Ørsted has
   committed to reusing or recycling all wind turbine blades and solar panels
   from its global portfolio with immediate effect and to only commissioning
   projects with a net-positive biodiversity impact from 2030. At the CMD,
   Ørsted will announce it has issued blue bonds of EUR 100 million to fund
   investments in projects related to maritime biodiversity and green fuels
   for shipping. Ørsted is the world’s first energy company to have issued
   blue bonds.

   Ørsted’s Capital Markets Day 2023
   The Capital Markets Day is hosted on 8 June 2023 at 10-14 UTC+1 at the
   Science Museum in London.

   The Capital Markets Day will be livestreamed – register and follow it
   here:  1 https://orsted.com/en/capital-markets-day/online-sign-up

   The presented material will be available for download on 8 June 2023
   before the start of the CMD, and a replay of all CMD sessions will be made
   available at  2 orsted.com.

   For further information, please contact:

   Media Relations
   Carsten Birkeland Kjær
   +45 99 55 77 65
    3 cabkj@orsted.com

   Investor Relations
   Rasmus Keglberg Hærvig
   +45 99 55 90 95
    4 ir@orsted.com  

   About Ørsted
   The Ørsted vision is a world that runs entirely on green energy. Ørsted
   develops, constructs, and operates offshore and onshore wind farms, solar
   farms, energy storage facilities, renewable hydrogen and green fuels
   facilities, and bioenergy plants. Ørsted is recognised on the CDP Climate
   Change A List as a global leader on climate action and was the first
   energy company in the world to have its science-based net-zero emissions
   target validated by the Science Based Targets initiative (SBTi).
   Headquartered in Denmark, Ørsted employs approx. 8,000 people. Ørsted's
   shares are listed on Nasdaq Copenhagen (Orsted). In 2022, the group's
   revenue was DKK 132.3 billion (EUR 17.8 billion). Visit  5 orsted.com or
   follow us on Facebook, LinkedIn, Instagram, and Twitter.

    1 Based on fully loaded, unlevered lifecycle IRR at the time of bid/FID,
   whichever comes first. The targeted range is not a hurdle rate, and
   consequently, projects might deviate from the targeted range.

    2 Please see Ørsted’s annual report for 2022, p. 15.

       Attachments

     •  6 Ørsted confirms its ambition of ~50 GW renewable capacity by 2030
       and strong financial outlook.pdf

   News Source: Ritzau

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   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   ISIN:          DK0060094928
   Category Code: MSCM
   TIDM:          Orsted
   Sequence No.:  249327
   EQS News ID:   1652073


    
   End of Announcement EQS News Service

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