8th May 2017 - centrica.com
Transcript of 8th May 2017 - centrica.com
![Page 1: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/1.jpg)
Centrica plc Annual General Meeting 8th May 2017
![Page 2: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/2.jpg)
Rick Haythornthwaite
Chairman
![Page 3: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/3.jpg)
Live Camera on Individual Directors as they are
Introduced by The Chairman
![Page 4: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/4.jpg)
Live Camera
– Rick Haythornthwaite Starts
![Page 5: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/5.jpg)
Iain Conn Group Chief Executive
![Page 6: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/6.jpg)
Live Camera
– Iain Conn Starts
![Page 7: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/7.jpg)
Energy and services company
Deliver for the changing needs of our customers
Delivering long-term shareholder value through
returns and cash flow growth
Trusted corporate citizen
Employer of choice
A “21st century energy company”
Centrica’s purpose
![Page 8: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/8.jpg)
Energy supply
Services
Distributed Energy & Power
Connected Home
Energy Marketing & Trading
Focus areas for long term growth
![Page 9: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/9.jpg)
Strategic summary
Energy and services company
Purpose – “to provide energy and services to satisfy the changing
needs of our customers”
Long term shareholder value through returns and growth
3-5% per annum operating cash flow growth
£750m per annum cost efficiency programme
Growth focus on customer-facing businesses and reduce scale
in E&P and Central Power Generation
– £1.5bn resource reallocation to 2020
Progressive dividend policy and strong investment grade credit rating
![Page 10: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/10.jpg)
Adjusted operating profit and earnings up 4%
Underlying adjusted operating cash flow
growth of 14%
Efficiency programme ahead of schedule
Net debt down 27% to £3.5bn
2016 full year dividend of 12.0p
2016 financial performance
![Page 11: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/11.jpg)
• Improved customer service
• Innovative tariffs
⎼ ‘FreeTime’ tariff
⎼ Product bundling
• Cost efficiency
• British Gas customer commitment
• Rewarding loyalty
⎼ ‘British Gas Rewards’
• Improved customer service
• ~12,000 engineers and technicians
• Product bundling
• Cost efficiency
• UK smart meter roll-out
• Flexible fulfilment model
⎼ ‘Local Heroes’
• Boiler IQ
⎼ ~35,000 sold
• Water leak detection
• New connected home and insurance products
• ~600k Hive smart thermostats
• 3.7m households
⎼ ‘Direct your Energy’
⎼ ‘MyEnergy’
• Smart metering
• 5 Hive products
⎼ Multi-device app
⎼ Recipes
• Amazon Echo partnership
Centrica Consumer strategy and progress
Energy Supply Services Peace of Mind Home Energy Mgmt. Home Automation
![Page 12: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/12.jpg)
• Improved customer service
⎼ Complaints down
⎼ NPS up
• UK Business return to profitability
• Cost efficiency
• Strong existing capabilities
• Neas Energy
• Global LNG presence
• King’s Lynn A CCGT project
• Growing customer base
⎼ ~40k sensors
⎼ 10bn data points per month
• Launch of ‘PowerRadar’
• New sales channels
• New demand response products
• Integration of Neas capabilities
⎼ 8.1GW capacity
• Fast response generation & battery projects
• Cornwall ‘local energy market’
• Integration of ENER-G Cogen capabilities
⎼ Six countries
⎼ >500MW capacity under contract
• Technology partners
• Serving customers through multi-tech solutions
Centrica Business strategy and progress
Energy Supply Wholesale Energy Energy Insight Energy Optimisation Energy Solutions
![Page 13: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/13.jpg)
Targeting a 40-50mmboe p.a. E&P business
– Focus on UK, Netherlands, Norway
– Cygnus gas field performing ahead of expectations
– Trinidad & Tobago divestment announced
– Exit from Canada targeted in 2017
Exit from wind power generation ownership complete
Centrica Storage
– Testing and verification programme ongoing
– Rough not available for 2017/18 winter
Asset businesses
![Page 14: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/14.jpg)
Adjusted operating cash flow >£2bn
Group capital investment limited to £1bn
– E&P capex ~£500m
~£100m incremental growth revenue investment
~£250m of cost efficiencies
Like-for-like direct headcount reduction of ~1,500
Net debt in £2.5-£3.0bn range
2017 targets
![Page 15: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/15.jpg)
2017 trading update
On track to achieve 2017 targets
Continued strategic progress, building on 2016 momentum
Continuing to execute on all aspects of our strategy
announced in July 2015
Warm weather and lower commodity prices since February
Focus on driving underlying performance improvement
and cost efficiencies
Operating performance largely as expected
![Page 16: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/16.jpg)
CMA investigation concluded and remedies being
implemented
British Gas customer commitment
Competitive market
– Over 50 suppliers
Focus on customer service
– Energy supply complaints down 31%
– UK Home Brand NPS up 10 points
Standard tariff cheaper than 95% of the market
UK retail energy market
![Page 17: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/17.jpg)
British Gas household bills and profits
2015 comparatives have been restated to remove the performance of Connected Home.
Breakdown of average British Gas combined gas and electricity bill (£/customer)
0
200
400
600
800
1,000
1,200
1,400
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Profit
Operating Costs
Corporation Tax and VAT
Environmental and Social Policies
Delivery to your home
Wholesale energy costs
costs
social policies
![Page 18: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/18.jpg)
Robust 2016 performance and 2017 targets on track
Good strategic progress
Shareholder value through returns and growth
Continued focus on Group priorities:
– Safety, compliance & conduct
– Customer satisfaction & operational excellence
– Cash flow growth & strategic momentum
– Cost efficiency & simplification
– People & building capability
Summary
![Page 19: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/19.jpg)
Live Camera
- Rick Haythornthwaite Starts
![Page 20: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/20.jpg)
Resolutions
1. Report and Accounts
2. Remuneration Report
3. Dividend
4. Election of Director – Joan Gillman
5. Election of Director – Stephen Hester
6. Election of Director – Scott Wheway
7. Re-election of Director – Rick Haythornthwaite
8. Re-election of Director – Iain Conn
9. Re-election of Director – Jeff Bell
10. Re-election of Director – Margherita Della Valle
11. Re-election of Director – Mark Hanafin
12. Re-election of Director – Mark Hodges
13. Re-election of Director – Lesley Knox
14. Re-election of Director – Carlos Pascual
15. Re-election of Director – Steve Pusey
16. Appointment of Auditors
17. Auditors’ remuneration
18. Political donations
19. Authority to allot shares
20. Authority to disapply pre-emption rights
21. Additional authority to disapply pre-emption rights
22. Authority to purchase own shares
23. Notice of General Meetings
![Page 21: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/21.jpg)
Live Camera
- Rick Haythornthwaite
![Page 22: 8th May 2017 - centrica.com](https://reader031.fdocuments.net/reader031/viewer/2022013022/61d164b16ec91a551c086070/html5/thumbnails/22.jpg)
Annual General Meeting
Please put your completed Poll Card in one of the boxes on your way out of the meeting room.