Management's review
Other reports
In our sustainability report, you can read more about how Ørsted as a business contributes to addressing some of the challenges faced by society.
In our green bond impact report, you will get an insight into our green bond portfolio. Outstanding green bonds and green hybrid bonds currently account for more than 80 % of Ørsted's total portfolio of bonds and hybrid capital.
In our ESG performance report, you can read more about Ørsted's environmental, social, and governance indicators.
Statutory corporate governance report 2022
In our statutory corporate governance report, you can read more about how we have incorporated and follow the recommendations prepared by the Danish Committee on Corporate Governance.
In our remuneration report, you will get a transparent and comprehensive overview of the remuneration of our Executive Board and our Board of Directors.
Full ESG data overview
Our full ESG data overview (including EU tax- onomy) and our accounting policies are available in our annual ESG performance report.
Our work for increased gender diversity at leadership level is reported in accordance with section 99 b of the Danish Financial Statements Act in our ESG performance report 2022 (orsted.com/ESGperformance2022).
By publishing our sustainability report
(orsted.com/sustainability2022), we comply with section 99 a of the Danish Financial Statements Act. In the same report, reporting on diversity in accordance with section 107 d of the Danish Financial Statements Act can be seen.
For information concerning section 99 d, see page 59 in the annual report.
Annual reporting 2022
Get an overview of our financial, sustainability, and ESG performance by downloading our reports and investor presentations. See our reports here:
2 Ørsted annual report 2022
Management's review
Contents
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Management's review |
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Overview |
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Performance highlights |
. . . . 5 |
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Letter to our stakeholders |
. . . . 7 |
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Our global footprint |
. . . 11 |
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Financial outlook |
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Financial outlook 2023 |
. . . 13 |
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Financial estimates and policies |
. . . 15 |
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Strategy and business |
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Becoming the world's leading green energy major . . . |
. . . 17 |
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Strategic targets |
. . . 19 |
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Our journey towards a thriving and sustainable future |
. . . 21 |
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The markets where we operate |
. . . 27 |
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Business model |
. . . 30 |
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Executing our strategy |
. . . 31 |
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Risks and risk management |
. . . 38 |
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Results |
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Follow-up on 2022 guidance |
43 |
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Results |
44 |
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Five-year summary |
48 |
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Fourth quarter |
49 |
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Quarterly summary, 2021-2022 |
54 |
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Governance |
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Message from the Chair |
56 |
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Corporate governance |
57 |
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Board of Directors |
60 |
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Group Executive Team |
65 |
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Shareholder information |
67 |
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Financial and ESG statements |
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Consolidated financial statements |
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Consolidated statement of income |
. . . . . 71 |
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Consolidated statement of comprehensive income |
. . . . . 72 |
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Consolidated balance sheet |
. . . . . 73 |
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Consolidated statement of shareholders' equity . . |
. . . . . 74 |
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Consolidated statement of cash flows |
. . . . . 75 |
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Notes |
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Consolidated ESG statements |
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(additional information) |
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Basis of reporting |
. . . . 156 |
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ESG performance indicators |
. . . . 157 |
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Accounting policies |
. . . . 160 |
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Parent company financial statements |
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Income statement |
. . . . 163 |
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Balance sheet |
. . . . 163 |
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Statement of changes in equity |
. . . . 164 |
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Notes |
. . . . 165 |
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Management's statement, auditor's reports, |
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and glossary |
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Statement by the Executive Board |
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and the Board of Directors |
. . . . 173 |
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Independent Auditor's Reports |
. . . . 174 |
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Independent limited assurance report on the |
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consolidated ESG statements |
. . . . 179 |
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Glossary |
. . . . 181 |
3 Ørsted annual report 2022
Management's review
Overview
5 Performance highlights
- Letter to our stakeholders
- Our global footprint
Bob is one of the 80 locally recruited O&M professionals, who will soon be based at our newly opened O&M hub at the Port of Taichung in Taiwan.
The facility was built with locally manufactured, energy-saving, and sustainable materials. It features solar panels, a rainwater recycling system, and charging stations for electric vehicles. The hub will serve the three Greater Changhua offshore wind farms.
4 Ørsted annual report 2022
Management's review Overview | Performance highlights
Performance highlights
Profits and returns
Operating profit (EBITDA)
DKKbn
EBITDA was record-high at DKK 32.1 billion. EBITDA excluding new partnerships amounted to DKK 21.1 billion, which compares to our original guidance of DKK 19-21 billion and our latest guidance of DKK 21-23 billion.
32.1
|
32.1 |
||
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24.3 |
||
|
16.6 |
||
|
2020 |
2021 |
2022 |
Cash flow and balance sheet
Gross Investments
DKKbn
Our gross investments reached DKK 37.4 billion and was driven by our construction of both wind and solar assets.
37.4
|
39.3 |
37.4 |
|
|
27.0 |
||
|
2020 |
2021 |
2022 |
Return on capital employed (ROCE)
%
ROCE was 17 % for the year, which was above our target of an average ROCE of approx. 11-12 % for the Group in the period 2020-2027. In 2022, ROCE was positively impacted by the 50 % farm- downs of Hornsea 2 and Borkum Riffgrund 3.
Profit for the year
DKKbn
Profit for the year was DKK 15.0 billion, DKK 4.1 billion higher than in 2021. The increase was mainly due to the higher EBITDA.
Interest-bearing net debt
DKKbn
Our net debt increased to DKK 30.6 billion. The increase was mainly due to dividend payments of DKK 5.7 billion and higher lease obligations of DKK 1.6 billion, whereas we had net neutral free cash flows.
Credit metric (FFO/adjusted net debt)
%
The credit metric funds from operations (FFO) relative to adjusted net debt amounted to 43 % in 2022, above our target of around 25 %.
|
2022 |
17 % |
2022 |
15.0 |
2022 |
30.6 |
2022 |
43 |
|
|
2021 |
15 % |
2021 |
10.9 |
2021 |
24.3 |
2021 |
26 |
|
|
2020 |
8 % |
2020 |
15.5 |
2020 |
12.3 |
2020 |
65 |
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Excl. new partnerships New partnerships |
RBC divestment |
|
21.1 Realised |
37.4 Realised |
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Follow up on outlook |
EBITDA, DKKbn |
Investments, DKKbn |
|
announced for 2022 |
Guidance (2 Feb.) 19-21, |
Guidance (3 Feb.) 38-42, |
|
(11 Aug.) 20-22, (3 Nov.) 21-23 |
(11 Aug.) 43-47, (3. Nov.) 38-42 |
With EBITDA excluding new partnerships of DKK 21.1 billion, we ended above our original expectations and within our latest guidance of DKK 21-23 billion. Read more on page 43 where we follow up on our 2022 guidance in detail.
5 Ørsted annual report 2022
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Ørsted A/S published this content on 01 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 February 2023 07:17:27 UTC.
