DIRF meeting

Henrik Brünniche Lund, Head of IR

15 June 2017

EQUITY STORY DEVELOPMENT AND KEY

LEARNINGS FROM DONG ENERGY’S IPO

Key investment highlights

IPO equity story: A clean energy growth story

2

Global leader in attractive offshore wind market1

Differentiated competitive position from value chain integration and proven partnership model in offshore wind2

Robust and highly visible offshore wind build-out plan delivering strong and profitable growth3

Leading Danish utility with a highly regulated profile and a platform to continue developing innovative renewable technologies4

Positive cash flow from low-cost, low-risk O&G producing assets invested in renewable energy5

Highly visible earnings and cash flow growth to support attractive shareholder returns6

Experienced management team with proven track-record and a capable and passionate organisation7

Key lessons learned: Developing and communicating

the equity story

Own your equity story

• Shape equity story - make sure it is ready

before you push the button

• Make the difficult calls on strategy and

structural change if required; IPO is a great

change catalyst

• You must own the equity story and it must

have a couple of distinct hooks

3

Key lessons learned: Developing and communicating

the equity story

Know your company in detail

• Mastering the details of your business will be a

critical credibility builder in front of analysts

and investors

• You may think you know your business

already but an IPO will force you to the next

level

• Run a separate work stream to collect deep

dive analyses of all relevant topics

4

Key lessons learned: Developing and communicating

the equity story

Devote significant time and resources to

marketing process

• Analysts presentation (AP) is critically

important and will require a significant

investment of time

• Post-AP interaction and education of analysts

must also be given serious attention

• Manage review of analyst modelling and

report drafts

• Leverage early look / pilot fishing meetings to

get input and experience

• Start building a base of 5-8 high potential,

quality investors who will have the time to get

comfortable buying deep into the IPO

5

Successful bookbuilding ensured positive development

6

7.27.0

5.9

5.4

4.6

3.8

3.43.13.1

1.7

6.0

3.7

1.9

1.41.1

0.7

2.8

2.4

1.41.1

0.80.80.70.60.6

0.2

31-May27-May 30-May 1-Jun

0.90.80.7

26-May

0.3

6-Jun 7-Jun3-Jun2-Jun 8-Jun

IPO price: 235

Top range price: 255

Low price range: 200

May 26: Initial price range

DKK 200 – DKK 255

June 6: Price range adjusted

DKK 220 – DKK 255

Book coverage multiples

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Utility

EBITDA DKK 3bn, 12% ROCE in 2016*

Largest Danish utility across

generation, distribution and sales

Conversion of CHPs from fossil fuels

to sustainable biomass. Innovative

bioenergy technology for waste

treatment

Power grid with RAB of DKK 10.6bn

yielding 6% annual return

Upstream Oil & Gas division divested

* Both EBITDA and ROCE exclude a positive one-off of DKK 4.3bn

Global leader in attractive offshore

wind market

Attractive growth options post 2020.

Ambition to more than triple our

capacity by 2025

Secured projects will more than

double installed capacity by 2020

Cost-of-electricity being

systematically reduced

Wind Power

EBITDA DKK 12bn, 17% ROCE in 2016

DONG Energy’s equity story today

Offshore wind is rapidly becoming cost competitive

Key offshore wind cost reduction drivers

Larger turbines

Larger sites

Faster installation cycles

Reduced O&M costs

Increased supplier competition

Reduced return requirements

Rapid technological development

Offshore wind cost (EUR/MWh)1

8

156

145

124 122

102

78

68 68

WalneyExtensionUK 2014

RaceBank

UK 2015

EastAnglia

UK 2015

BorkumRiffgrund IIDE 2015

Horns Rev III

DK 2015

BorseleI & II

NL 2016

KriegersFlak

DK 2016

BorseleIII & IV

NL 2016

Sources: DECC; Danish Energy Agency; Energinet.dk; NEV

1. Levelised revenue (price) of electricity over the lifetime of the project used as proxy for the levelised costs to society. It consists of a subsidy element for the first years and a market

income for the remaining years of the 25 years lifetime. Discount rate of 3.5% used to reflect society’s discount rate. Market income based on country specific public wholesale market

price projections at the time of contracting. For comparability across projects a generic scope adjustment (incl. transmission and extra project development costs) has been applied.

2002 2005 2007 2011 2014 2016 2020

80m90m

107m120m

154m164m

180m

Boeing 747, 76m

What changes after the IPO?

9

Share price performance for DE and peers since IPO

200

220

240

260

280

300

DKK per share

DONG Energy Utility peers

Significant time and resource allocation to

investors and analysts

Managing insider information will become a task

in itself (MAR)

Public profile and media attention will go up -

more complex communications

Scrutiny of financial and non-financial

information increases significantly

Stakeholders become focused on "how will the

market react?“

You start monitoring and managing the quarters

more carefully - don't overdo it

You will be bound by the equity story for a while

- market expects discipline

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