Contents
Management’s review
CEO’s review
Personal remarks from the CEO
At a glance
Outlook
Results Q2
Results H1
Business units’ results
Performance highlights
Quarterly overview

3
5
6
7
8
9
12
17
18

Management statement
Management statement
Forward-looking statements

Media Relations

Investor Relations

Martin Barlebo

Allan Bødskov Andersen+45 9955 9552

+45 9955 7996

Denmark: +45 78 15 01 10
International: +44 333 300 9035
USA: +1 844 625 1570
The earnings call can be followed live at:20
27

www.orsted.com

41
42Ørsted A/S
Presentation slides will be available prior to the earnings callat:www.orsted.com/en/investors/ir-material/financial-reportsand-presentations#0

CVR no. 36213728
Kraftværksvej 53
7000 Fredericia
Tel. +45 9955 1111

The interim financial report can be downloaded at:www.orsted.com/en/investors/ir-material/financial-reportsand-presentations#0– interim financial report – H1 2020

FURTHER INFORMATION

https://edge.media-server.com/mmc/p/fm7kbt6i

Financial statements
Consolidated interim financial statement
Notes

EARNINGS CALL
In connection with the presentation of the interim financial
report an earnings call for investors and analysts will be heldon Wednesday 12 August 2020 at 14:00 CEST:

CEO’s review — first half year 2020
– Operating profit (EBITDA) increased by 11%
to DKK 9.8 billion.

– EBITDA from offshore and onshore wind
–
–
–
–
–
–
–
–

farms in operation increased by 17% to DKK
8.2 billion.
Operations have remained stable throughout the COVID-19 crisis.
2020 EBITDA guidance re-iterated despite
COVID-19.
Green share of heat and power generation
increased from 82% to 88%.
78 turbines installed at Borssele 1 & 2.
Signed largest-ever renewable corporate
PPA for our Greater Changhua 2b & 4 offshore wind project in Taiwan.
Ørsted co-founded the ‘Green fuels for
Denmark’ partnership.
WESTKÜSTE 100 received funding from theGerman government.
Plum Creek Onshore Wind Farm commissioned ahead of schedule and on budget.

”

Strong first half

especially the UK power market due to lower
demand for electricity. This has led to higher
balancing tariffs (BSUoS) from National Grid,some periods with negative prices and lower
expected ROC recycle prices.

On 11 June, we reached a significant milestone with the installation of Ørsted’s offshore wind turbine number 1,500, which was
the 25th of Borssele 1 & 2's 8MW wind turbines

Return on capital employed (ROCE) for the last
12 months amounted to 11% after H1 2020.

increased risk of delays; especially at Hornsea 2.
In general, we continue to see an increased riskof moderate delays across our portfolio, but we
expect any such delays to have a limited overall impact on project economics.

We re-iterate our EBITDA guidance of DKK 16-17
billion but lower our expectation to gross investments by DKK 2 billion to DKK 28-30 billion in
2020.

Offshore
On 11 June, we reached a significant milestone
with the installation of Ørsted’s offshore windturbine number 1,500, which was the 25th of
Borssele 1 & 2's 8MW wind turbines. We are set
to more than double our offshore wind capacity
in the coming five years using ever larger turbines.

COVID-19
Our Corporate Crisis Management Organisation
has met regularly throughout the second quarter, focusing on business continuity and thepartial re-opening of our locations in Continental Europe and Taiwan.

During Q2 2020, our asset base has continued
to be fully operational and we have maintained
normal availability rates on our offshore andFinancial results
onshore wind farms. However, as described
Our operating profit (EBITDA) for the first half ofabove, we have seen negative effects on Eurothe year amounted to DKK 9.8 billion, an 11%
pean power markets, especially in the UK,
increase compared to the same period last year.
driven by lower demand for electricity.
Earnings from our offshore and onshore windfarms in operation increased by 17%, driven by
ramp-up of power generation from Hornsea 1,
Lockett and Sage Draw together with high windspeeds and as H1 2019 was impacted by ahigher number of outages and curtailments
across the portfolio than normal. This waspartly offset by lower earnings from trading
related to hedging of our power exposures andpower portfolio optimisation activities, which
had very high earnings in H1 2019. In addition, we
saw adverse COVID-19 related impacts on– interim financial report – H1 2020

At our Dutch Borssele 1 & 2 site, the offshore
construction work is progressing well and in
August we installed the 78th wind turbine out of
94. We still expect the 752MW wind farm to becompleted during Q4 2020. In 2022, we expect
to complete Hornsea 2 (1,386MW) in the UK andGreater Changhua 1 & 2a (900MW) in Taiwan.

bidding to make sure we build a healthy, sustainable business, and over time secure enoughwins to fulfil our long-term ambitions. We
remain confident that Ørsted will reach its
target of 15GW of installed offshore windcapacity by 2025 and more than 30GW ofrenewable capacity by 2030.
In the US, the Bureau of Ocean Energy Management (BOEM) released a draft of their Supplemental Environmental Impact Statement (SEIS)
in June. The SEIS provides an evaluation of theforeseeable cumulative impacts of offshore
wind projects from North Carolina to Maine andprovides a framework for future developmentof the industry on the US East Coast.

Based on our assessment we do not believethat BOEM identifies any significant impact thatcannot be mitigated by the offshore winddevelopers. The framework confirms the consensus developer layout in the Northeast cluster, a uniform one nautical mile by one nauticalmile turbine layout, as the most viable configuIn July, the Holland Coast North offshore windproject was awarded to a local Dutch consorti- ration. An approach which has been supported
by a recent US Coast Guard study. We expect
um. When we join a tender we obviously want
to win and as such the outcome was disappoint- that BOEM could decide on the preferred layout
as early as this month. Given commentary in theing. We will extract any learning available and
SEIS, we remain optimistic that the 1 by 1 nautileverage the insight for future tenders in Contical mile layout will be the preferred alternative.
nental Europe. With that said, it should also be
A different alternative layout considered in thereiterated that we cannot and should not win
SEIS includes wide transit lanes going throughall the auctions and tenders we join. The imthe offshore development areas. As implementportant thing is that we stay disciplined in our

Our construction projects have largely progressed according to plans, both in Europe, Asiaand the US. The most affected part of ourportfolio is the construction of topsides for theoffshore substations at Hornsea 2 and Greater
Changhua 1 & 2a. These topsides are being
constructed at two shipyards in Singapore,
which were closed down for two months due to
COVID-19. However, the shipyards began toslowly ramp-up in June. Although we still expect
to be able to complete both projects within ourcurrent budget and time schedule, we see an

3Management’s review

CEO’s review — first half year 2020 continued

We are still awaiting the ‘Notices of Intent’ formost of our US projects, outlining the timelinefor ‘Construction and Operations Plan’ (COP)
approval. We expect to have more clarity
during the second half of the year.

”

ing such transit lanes would be detrimental tothe offshore wind industry in the US, and as
noted in the SEIS, it would reduce the technicalcapacity of North-East development areas toless than the demand from the states, weconsider it unlikely that this alternative lay-out
will be chosen. We also note that the 1 by 1
nautical mile turbine spacing is materially wider
than any other offshore wind project worldwide
to accommodate for the navigation of otherocean users.

447m (100%). Walney Extension is located in the
UK with a capacity of 659MW.

In July, we signed a corporate power purchase agreement (CPPA)
Together with Copenhagen Airport, A.P. Moller Maersk, DSV Panalpina and SAS, we havefounded the partnership - ‘Green fuels for Denmark’ - to develop an industrial-scale facility to
produce sustainable fuels for road, maritime
and air transport in the Copenhagen area. The
partnership brings together the demand andsupply side of sustainable fuels with a vision torealise what could become one of the world's
largest electrolyser and sustainable fuel production facilities.

with Taiwan-based TSMC, who will offtake the full generationfrom our 920MW Greater Changhua 2b & 4 offshore wind farm,making it the largest ever renewable energy CPPA
When completed, expectedly in Q3 2021, it willbe the largest solar energy asset in the southeastern US. The project is eligible for 30% ITC
and has a fully contracted 20-year utility PPA.

Concluding remarks
The world continues to navigate a health crisis
which has a severe impact on the lives andlivelihoods of people across the globe as well as
on global and local economies. In this challenging situation, Ørsted continues to focus on thehealth and well-being of its employees and theirfamilies while supporting a stable power supply
in the markets where we operate. Our businessmodel and organisation have proven very
resilient and we remain confident about theMarkets & Bioenergy
company’s ability to deliver on both its shortIn June, the Danish competition authorities and term and long-term performance targets. We
the Danish Energy Agency approved the divest- continue to see strong political and public
support for an accelerated transition to green
ment of our Danish power distribution (Radius),
residential customer and city light businesses to energy and Ørsted’s long-term growth proSEAS-NVE. As part of the competition approval, spects are as strong as ever.
SEAS-NVE has agreed to sell the residential gas
customers to OK, a Danish energy group. With
the approval by the authorities, the transaction
is expected to close by the end of August 2020.
In 2019, we signed an agreement to divest our
LNG activities to Glencore. We expect to close
the transaction by late Q3 2020.

In addition, we are currently constructing theonshore wind farm Willow Creek (103MW) in
South Dakota and the combined solar(420MWac) and storage (40MWac) project Permian Energy Center in Texas. We expect Willow
Creek to be commissioned in Q4 2020 whereas
Permian Energy Center is expected to be commissioned by mid-2021. We are eligible for 100%
PTC for Willow Creek and 30% ITC for Permian.

In August, the German Federal Ministry for
Economic Affairs and Energy confirmed funding
for the WESTKÜSTE 100 project in which we
At the 12MW Coastal Virginia demonstration
partner with nine other organisations to develproject in the US, which we are constructing for op the first large-scale hydrogen project in
Dominion Energy as an EPC contractor, weGermany under the Reallabor funding program.
successfully installed both monopile foundaWESTKÜSTE 100 is our third hydrogen projecttions and turbines in June. The wind farm is theto receive public funding and a significant step
first ever to be federally permitted and installed forward in our exploration of industrial-scale
in US federal waters.
production of green hydrogen. The project
includes a 30MW electrolyser plant which can
In July, we signed a corporate power purchasesupport heavy industries and heavy transport
agreement (CPPA) with Taiwan-based TSMC,
with renewable alternatives and a vision to
the world’s largest semiconductor foundry.
scale-up at a later stage.
TSMC will offtake the full generation from our
920MW Greater Changhua 2b & 4 offshore wind Onshore
farm, making it the largest ever renewable
In June, we commissioned the onshore windenergy CPPA. The 20-year fixed-price contract
farm Plum Creek in Nebraska ahead of schedule
period will start once Greater Changhua 2b & 4 and on budget and we received tax equity
reaches commercial operations expectedly infunding from our partners. The 230MW wind2025/2026, subject to grid availability andfarm has performed as expected since commisØrsted’s final investment decision.
sioning and will generate enough energy to
power up to 100,000 US households.
In June, we divested the offshore transmission
assets at Walney Extension to Diamond TransIn July, we acquired the 227MWac solar PV
mission Partners at a total asset value of GBP
project Muscle Shoals, located in Alabama.

– interim financial report – H1 2020

spring due to COVID-19, the plant has processed
waste again since June. We expect the plant tobe commissioned later this year.

Following upgrades to our Renescience facility
in the UK late 2019 and a shut-down throughout

4

Henrik Poulsen
CEO and PresidentManagement’s review

Personal remarks from the CEO”

On 15 June, I announced my resignation as CEOof Ørsted after eight years with the company.
It has been an incredible ride, and I have atremendous amount of affection for Ørsted, itsvision, and not least its people. Together, wehave transformed a Danish utility company
predominantly based on fossil fuels into a
global leader in green energy, now ranked as
the world’s most sustainable company. We are
now at a point where the transformation iscompleted, and we have built a strong platform
for global growth. I have concluded that it is theright time for me to step down to pursue otherchallenges. I owe a lot of gratitude to Ørsted’sshareholders, the Board of Directors, and Group
Executive Management for their confidence andsupport – and to all Ørsted team members forwhat we have achieved as a company during
my tenure.

Together, we have transformed a Danish utility company predominantly based on fossil fuels into a global leader in green energy, now ranked as the world’s most sustainable company

I will continue as CEO of Ørsted until 31 January
2021 at the latest and will remain fully committed during that time. The Board of Directors hasoffered to nominate me for the Ørsted Board at
the annual general meeting in March next year
and I have happily accepted the nomination.
This will allow me to remain part of the Ørsted
team and support the continued strategic
development of the company.
The Board of Directors is in the process offinding my successor. The process is progressing
as planned and Ørsted will make an announcement when completed, expectedly later thisyear.

Henrik Poulsen
CEO and President– interim financial report – H1 2020

5Management’s review

2019

2020

2019

2020

Outlook 2020
EBITDA
Our EBITDA guidance is unchanged relative tothe guidance in our interim financial report forQ1 2020. EBITDA (business performance), excluding new partnership agreements, is expected to amount to DKK 16-17 billion.
The directional EBITDA guidance for Offshore
and Onshore is unchanged relative to the guidance in our Q1 2020 report. However, for Offshore, we now expect higher earnings from existing partnerships compared to our previous
expectations, whereas we expect lower growthfrom operating wind farms due to adverse
COVID-19 impacts.

Outlook for 2020, DKK billion

Guidance
Guidance
12 Aug 2020 29 Apr 2020

Guidance
4 Mar 2020

Guidance
30 Jan 20202019
realised

16-17

16-17

16-17

15-16

17.5

Offshore (without new partnerships)

Lower

Lower

Lower

Lower

15.2

OnshoreHigherHigherHigherHigher0.8

Markets & Bioenergy

In line

Lower

Lower

Lower

1.5

28-30

30-32

30-32

30-32

23.3

EBITDA (without new partnerships)

Gross investments

Our EBITDA guidance for the Group is the prevailing guidance, whereas the directional earnings development perbusiness unit serves as a means to support this. Higher/lower indicates the direction of the business unit's earnings
relative to the results for 2019.

The directional guidance for Markets & Bioenergy has changed from ‘lower’ to ‘in line’. The increase in expected earnings compared to ourdirectional guidance in the Q1 2020 report, ismainly due to inclusion of earnings from power
distribution, residential customer, and city lightbusinesses for eight months of 2020 instead of
the previously expected six months and due tohigher sale of ancillary services at our CHP
plants.

Gross investments
Gross investments are expected to amount to
DKK 28-30 billion, down by DKK 2 billion relative to the guidance in our annual report for2019. The adjustment is due to changed timingof payments.

– interim financial report – H1 2020

7

Management’s review

Results Q2
EBITDA
Operating profit (EBITDA) totalled DKK 3.0 billion compared with DKK 3.6 billion in Q2 2019.
The decrease of DKK 0.7 billion was expected
and was mainly due to high construction activity at Hornsea 1 in Q2 2019. EBITDA excluding
construction agreements increased with DKK
0.6 billion (29%).
Earnings from offshore and onshore wind farms
in operation amounted to DKK 2.9 billion in Q2
2020, an increase of 7% compared to the same
period last year. The increase was due to rampup of Hornsea 1, Lockett and Sage Draw, and ahigher number of outages and curtailments
across the portfolio in Q2 2019. This was partly
offset by lower earnings from trading related tohedging of our power exposures and power
portfolio optimisation activities, which had very
high earnings in Q2 2019. In addition, we haveseen adverse COVID-19 related impacts on especially the UK power market due to lower
demand for electricity. This has led to higher
balancing tariffs (BSUoS) from National Grid,some periods with negative prices and lower
expected ROC recycle prices in Q2 2020.
Earnings from construction agreements for partners decreased by DKK 1.2 billion comparedwith Q2 2019 and amounted to DKK 0.4 billion
in Q2 2020. The construction agreements in Q2
2020 primarily concerned the construction of
Virginia Coastal Wind as well as minor updates
regarding completed construction projects. Q2
2019 primarily concerned construction activity
at Hornsea 1.
EBITDA from CHP plants increased by DKK 0.3
billion and amounted to DKK 0.2 billion, mainly
due to increased sale of ancillary services andtiming of fixed costs.

– interim financial report – H1 2020

Earnings from our gas activities were DKK -0.2
billion, in line with Q2 2019. A less negative
effect from revaluation of our gas at storage
and storage hedges (gas prices had a steeper
decline during Q2 2019 than in Q2 2020) was
offset by lower earnings due to shut-down of
the Tyra gas field from late 2019 until 2022.

Financial results, DKKm

Profit for the period
Profit for the period from continuing operations totalled DKK -0.8 billion, DKK 1.9 billion
lower than Q2 2019. The decrease was due tothe lower EBITDA, higher depreciation andhigher net financial expenses due to a loss oninterest rate swaps in June in connection withtermination of local project financing and related swaps in the US (DKK -0.4 billion).

Q2 2020

Q2 2019%

Revenue
EBITDA
Depreciation
EBIT
Gain (loss) on divestment of enterprises
Profit (loss) from associates and joint ventures

11,625
2,956(1,827)
1,129
(3)
3

16,443
3,625(1,689)
1,936
(18)
3

(29%)
(18%)
8%
(42%)
(83%)
0%

Financial items, net
Profit before tax
Tax on profit (loss) for the period
Tax rate
Profit (loss) for the period, continuing operations
Profit (loss) for the period, discontinued operations
Profit (loss) for the period(1,010)
119
(928)
780%
(809)
(16)
(825)

(545)
1,376
(283)
21%
1,093
(18)
1,075

85%
(91%)
228%
n.a.
n.a.
(11%)
n.a.

Q2 2020

Q2 2019

%

8,197

7,510

9%

Cash flow and net debt, DKKm
Cash flows from operating activities

Furthermore, tax on profit for the period washigher in Q2 2020 due to the initial recognitionof deferred taxes of DKK 0.9 billion related totax equity at Sage Draw and Plum Creek.

EBITDA

2,956

3,625

(18%)

Change in derivatives, other adjustments

680

(358)

n.a.

Change in provisions

(349)

39

n.a.

(71)

(190)

(63%)

Reversal of gain (loss) on divestments of assets

Adjusted for these one-off effects, net profit
amounted to DKK 0.4 billion.

Cash flows from operating activities
Cash flows from operating activities totalled
DKK 8.2 billion in Q2 2020. The increase of
DKK 0.7 billion compared to the same period
last year was mainly due to tax equity contributions from our partners at the Sage Draw
and Plum Creek wind farms, lower trade receivables due to lower revenue as well as thedivestment of the offshore transmission asset
at Walney Extension in Q2 2020. This waspartly offset by received milestone payments
related to the construction of Hornsea 1 in Q2
2019.

Other items

(43)

85

n.a.

Interest expense, net

(634)

(683)

(7%)
187%

Paid tax

(86)

(30)

Change in work in progress

(177)

4,271

n.a.

Change in tax equity partner liabilities

3,017

(138)

n.a.

2,904

889

227%

(3,757)(3,368)

12%

45

(11)

n.a.

Free cash flow

4,485

4,131

9%

Net debt, beginning of period

27,084

9,111

197%

Free cash flow from continuing operations(4,485)(4,131)

9%Free cash flow from discontinued operations

(102)

3

n.a.

Dividends and hybrid coupon paid

378

378

0%

Addition of lease obligations

138

63

119%

Change in other working capital
Gross investments
Divestments

Interest bearing receivable re. O&G divestment
Exchange rate adjustments, etc.
Net debt, end of period

8

16

16

0%

(757)

(460)

65%

22,272

4,980

347%

Management’s review

Results H1
Financial results
Revenue
Power generation from offshore and onshore
wind increased by 42% and totalled 9.8TWh in
H1 2020, mainly due to ramp-up of generationfrom Hornsea 1, Lockett and Sage Draw and tosome extent Borssele 1 & 2, as well as higher
wind speeds throughout H1 2020. Furthermore,
H1 2019 saw a higher number of outages andcurtailments across the offshore portfolio thannormal. This was partly offset by a cable replacement campaign at Hornsea 1 at the beginning of this year as well as some periods withnegative prices due to lower demand for electricity driven by COVID-19.
Our production-based availability in Offshore
amounted to 93%, up one percentage pointcompared to the same period last year.
Thermal power generation amounted to
2.5TWh and heat generation amounted to
4.1TWh, down 6% and 15%, respectively, compared to the same period last year. The decreases were driven by windy and wet weather
and a warm first quarter of 2020. The underly-

Financial results, DKKm
Revenue
EBITDA
Depreciation
EBIT
Gain (loss) on divestment of enterprises
Profit (loss) from associates and joint ventures
Financial items, net
Profit before tax
Tax on profit (loss) for the period
Tax rate
Profit (loss) for the period, continuing operations
Profit (loss) for the period, discontinued operations
Profit (loss) for the period– interim financial report – H1 2020

ing decline in power generation was even higher, but was partly offset by generation associated with higher delivery of ancillary services.

Offshore

12%

5%

Revenue amounted to DKK 27.0 billion. The
decrease of 20% relative to H1 2019 was primarily due to significantly lower gas and power
prices, lower sale of gas, limited construction
work on wind farms for partners and lower thermal heat and power generation, partly offset
by the increase in wind based power generation.

DKK 9.8bn

83%

EBITDA
Operating profit (EBITDA) totalled DKK 9.8 billion compared with DKK 8.8 billion in H1 2019.
The increase was mainly driven by a 17% increase in earnings from offshore and onshore
wind farms in operation, which was due to ramp
-up of Hornsea 1, Lockett and Sage Draw together with high wind speeds, partly offset by

H1 2019
33,682
8,755(3,307)
5,448
(35)
4
(444)
4,973
(1,241)
25%
3,732
(61)
3,671

Markets & Bioenergy

OnshoreOffshore and onshore wind accounted for 80%
of our total power generation, while the renewable energy share of our total heat and power
generation accounted for 88% in H1 2020 compared with 82% in H1 2019.

H1 2020
27,001
9,761(3,581)
6,180
(17)
6
(1,786)
4,383(1,846)
42%
2,537
(44)
2,493

Business performance vs IFRSEBITDA, DKK billion

lower earnings from trading related to hedging
of our power exposures and power portfolio
optimisation activities, which achieved very highresults in H1 2019.
Earnings from construction agreements for partners totalled DKK 1.5 billion compared withDKK 2.5 billion in H1 2019. The construction
agreements in H1 2020 primarily concerned the
updated assumptions regarding the divestmentof the transmission asset for Hornsea 1, the construction of Virginia Coastal Wind as well as
minor updates regarding completed construction projects. H1 2019 included earnings fromconstruction activity at Hornsea 1 and Borkum
Riffgrund 2.

%
(20%)
11%
8%
13%
(51%)
50%
302%
(12%)
49%
17%p
(32%)
(28%)
(32%)

EBITDA from CHP plants increased by DKK 0.2
billion relative to the same period last year andtotalled DKK 0.7 billion in H1 2020. The increase
was primarily driven by higher sale of ancillary9

We use business performance as an alternative
to the results prepared in accordance with IFRS.
Business performance represents the underlying
financial performance of the Group in the reporting period as results are adjusted for temporary
fluctuations in the market value of contracts(including hedging transactions) relating to otherperiods. The difference between the two principles will be eliminated as the contracts expire.
Apart from this, there is no difference between
business performance and the IFRS results.

EBITDA in accordance with IFRS amounted to
DKK 11.0 billion in H1 2020 against DKK 10.4
billion in the same period in 2019. In accordancewith the business performance principle, EBITDA
was DKK 9.8 billion and DKK 8.8 billion, respectively. The difference between the two principles
was thus DKK 1.3 billion in H1 2020 against DKK
1.7 billion in H1 2019.
In the presentation of the results according to
IFRS, we have elected not to apply the provisions
on hedge accounting of commodities and related
currency exposures. The market value adjustments of these are continuously recognised in
the income statement, which means that the
IFRS results for the individual years are not comparable. IFRS results do not reflect the commercial risk hedging, according to which the business
units and the Group are managed and evaluated.
In the management's review, comments are
made on business performance only.
Business performance vs IFRS

H1 2020

H1 2019

EBITDA - Business performance

9,761

8,755

Adjustments

1,280

1,677

EBITDA - IFRS

11,041

10,432

Management’s review

Results H1 continued
Cash flow and net debt, DKKm

April and Plum Creek in June. The effective tax
rate was 42%.

services.
EBITDA from Gas Markets & Infrastructure increased by DKK 0.1 billion and amounted to
DKK -0.2 billion. The increase was mainly due toa less negative effect from revaluating our gas
at storage (gas prices had a steeper decline
during H1 2019 than in H1 2020) and a positive
impact from storage hedges. This was partly
offset by lower earnings due to shut-down of
the Tyra gas field from late 2019 until 2022 aswell as a provision for bad debt in our B2B business to cover the extraordinary COVID-19 related default risk among our customers.

Profit for the period
Profit for the period from continuing operations
totalled DKK 2.5 billion, DKK 1.2 billion lower
than H1 2019. The decrease was primarily due tothe higher net financial expenses, higher taxes
and higher depreciation, only partly offset by
the higher EBITDA.

%

7,392

5%

EBITDA

9,761

8,755

11%

Change in derivatives, other adjustments

(514)

(224)

129%

Change in provisions

(365)

33

n.a.

Reversal of gain (loss) on divestments of assets(1,288)

(308)

318%

Interest expense, net

Cash flows and net debt

(72%)

(1,353)(4,857)
5,272

n.a.

Change in tax equity partner liabilities

2,892

(219)

n.a.

Divestments

1,821

(369)

n.a.

(9,065)(7,267)

25%

52

2,667

(98%)

Free cash flow

(1,244)

2,792

n.a.

Net debt, beginning of period

17,230(2,219)n.a.

Free cash flow from continuing operations

1,244(2,792)n.a.

Free cash flow from discontinued operations

44

1

n.a.

Dividends and hybrid coupon paid

4,921

4,615

7%

Addition of lease obligations

147

5,285

(97%)

Interest bearing receivable re. O&G divestment

8

8

0%

Exchange rate adjustments, etc.

(1,322)82

n.a.

Net debt, end of period

22,272

4,980

347%

vestments in H1 2020 were:– offshore wind farms (DKK 7.1 billion), including Borssele 1 & 2 in the Netherlands,
Hornsea 2 in the UK, Greater Changhua 1 &2a in Taiwan and Ocean Wind in the US.

Cash flow from divestments in H1 2020 related to the divestment of our 10MWac Oak Solarfarm in New Jersey and Inbicon production
facilities partly offset by compensations paid
under our partnership agreements. Cash flowfrom divestments in H1 2019 related to thereceipt of deferred proceeds from the farmdown of 50% of Hornsea 1 in 2018 (DKK 1.7
billion) and to the strengthening of our strategic partnership with Eversource as they became a 50% partner in our activities in the
New England area in February 2019 (DKK 1.0
billion).

– onshore wind and solar farms (DKK 1.5 bil– Markets & Bioenergy (DKK 0.4 billion),
mainly related to maintenance of the power distribution grid.

10

n.a.
50%

(2,015)lion), including Sage Draw, Plum Creek andPermian Energy Center, all three in the US.

Tax on profit for the period amounted to DKK
1.8 billion, DKK 0.6 billion higher than the same
period last year. The increase was mainly due to Investments and divestments
initial recognition of deferred taxes of DKK 0.9
Gross investments amounted to DKK 9.1 billion
billion related to tax equity at Sage Draw inagainst DKK 7.3 billion in H1 2019. The main in-

83
(774)

Paid tax

Gross investments

Hornsea 2, only partly offset by the divestmentof the offshore transmission asset at Walney
Extension.

(7)(1,163)

Change in work in progress
Change in other working capital

Cash flows from operating activities

Cash flows from operating activities totalled
DKK 7.8 billion in H1 2020 compared with DKK
7.4 billion in H1 2019. The increase of DKK 0.4
billion was mainly due to lower paid taxes inDenmark, tax equity contributions from ourpartners at the Sage Draw and Plum Creek windfarms, lower trade receivables due to lower
Financial income and expenses
revenue as well as the divestment of the offNet financial income and expenses amounted
shore transmission asset at Walney Extension.
to an expense of DKK 1.8 billion compared with This was partly offset by H1 2019 being positiveDKK 0.4 billion in the same period last year. The ly affected by received milestone payments
increase was mainly due to higher net interest
related to the construction of Hornsea 1.
expenses, a loss on interest rate swaps in June inconnection with early termination of local pro- In H1 2020, we had a net cash outflow fromject financing and swaps in the US, less positive work in progress of DKK 2.0 billion. This was
effects from exchange rate adjustments due to mainly due to supplier payments related to thea weakening of GBP and capital losses on theconstruction of Hornsea 1 for partners, the conbond portfolio due to the increasing interest
struction of Virginia Coastal Wind and construcrates.
tion of the offshore transmission asset at– interim financial report – H1 2020

H1 2019

7,769

Other items

EBIT
EBIT increased by DKK 0.7 billion to DKK 6.2
billion in H1 2020, primarily as a result of thehigher EBITDA partly offset by higher depreciation driven by more wind farms in operation.

Tax and tax rate

H1 2020

Cash flows from operating activities

Management’s review

Results H1 continued
Interest-bearing net debt
Interest-bearing net debt totalled DKK 22.3
billion at the end of June 2020 against DKK 17.2
billion at the end of 2019. The DKK 5.0 billion
increase was mainly due to negative free cash
flow of DKK 1.2 billion and dividend and hybrid
coupon payments of DKK 4.9 billion.

EquityEquity was DKK 85.9 billion at the end of June
2020 against DKK 89.6 billion at the end of
2019.

Capital employed
Capital employed was DKK 108.2 billion at 30
June 2020 against DKK 106.8 billion at the endof 2019. The increase was mainly due to investments. Capital employed in Markets & Bioenergy amounted to DKK 13.7 billion of which DKK
8.2 billion relates to assets and liabilities to bedivested.

Financial ratios
Return on capital employed (ROCE)
Return on capital employed (ROCE, last 12
months) was 11% at the end of H1 2020. The
decrease compared to the same period lastyear was attributable to the lower EBIT overthe 12-month period, which in H1 2019 was significantly impacted by the farm-down of Hornsea
1 in Q4 2018.
Credit metric (FFO/adjusted net debt)
The funds from operations (FFO)/adjusted net
debt credit metric was 23% at the end of June
2020 against 58% in the same period last year.
The low ratio by H1 2020 is adversely impacted
by current tax related to both 2019 and 2020,– interim financial report – H1 2020

Key ratios, DKKm, %and is expected to be around the target level of
30% at the end of the year.

H1 2020

H1 2019

%

10.8

29.3

-19%p

36,106

17,755

103%

23.1

57.5

-34%p

ROCE1
Adjusted net debt
FFO/adjusted net debt1
1)
See page 79 in the annual report for 2019 for definitions.

Non-financial results
Green share of heat and power generation
The green share of heat and power generation
amounted to 88% in H1 2020, up six percentage
points relative to the same period last year. The
increase came from higher generation from
offshore and onshore wind farms due to additional capacity and higher wind speeds. Furthermore, the green share increased from lower
fossil fuel-based heat and power generation
due to the more wet and windy weather in H1
2020, which led to reduced heat and power
demand from the CHP plants. This was partly
offset by power generation associated with thedelivery of ancillary services.

Capital employed, %Offshore

Markets & Bioenergy

Onshore13%

8%

DKK 108.2bn

Greenhouse gas emissions
Greenhouse gas intensity from our heat andpower generation and other operating activities(scope 1 and 2), decreased to 64g CO2e/kWh in
H1 2020 against 80g CO2e/kWh in H1 2019. The
emissions per kWh decreased for the same reasons as mentioned above.

79%

million hours, in line with H1 2019. Consequently, the total recordable injury rate (TRIR) overthe last 6 months decreased from 4.0 in H1
2019 to 3.7 in H1 2020.

Greenhouse gas emissions from our supply chain
and sales activities (scope 3) decreased by 16%
to 13.1 million tonnes in H1 2020 driven by a 19%
decrease in gas sales.

SafetyIn H1 2020, we have had 39 total recordable
injuries (TRIs), of which 29 injuries were related
to contractors’ employees. This was a decreaseof three injuries compared to H1 2019 or a 7%
reduction. The number of hours worked was 10.5

11Management’s review

Offshore
Highlights Q2 2020

Financial results– 78 turbines installed at Borssele 1 & 2.
– We signed the largest-ever renewable cor-Business drivers–

Revenue decreased by 16% to DKK 9.4 billion.
Revenue from offshore wind farms in operation
increased 18% to DKK 3.6 billion primarily due toporate PPA for our Greater Changhua 2b & 4 the ramp-up of Hornsea 1 partly offset by more
periods with negative prices. Revenue from
offshore wind project in Taiwan.
We divested the offshore transmission asset power sales decreased by DKK 0.5 billion due tolower power prices.
at Walney Extension.

Decided (FID'ed) and installed capacity,
offshore wind

– We co-founded the ‘Green fuels for Den-

Installed capacity, offshore wind

GW
GW

Generation capacity, offshore wind

GW

Wind speed

m/s

Load factor%

32% H1 2020 H12019

%

9.9

9.9

0%

9.9

9.9

0%

6.8

5.6

22%

6.8

5.6

22%

3.8

3.3

13%

3.8

3.3

13%

8.0

8.0

0%

10.1

9.2

9%

31

1%p

46

41

5%p

%

95

87

8%p

93

92

1%p

TWh

2.6

2.2

20%

7.2

5.3

36%

Denmark

0.4

0.5

(12%)

1.1

1.1

6%

United Kingdom

1.7

1.2

35%

4.7

3.1

53%

Germany

0.4

0.4

(4%)

1.2

1.0

14%

0.1

0.1

0%

0.1

0.1

0%

Revenue from construction agreements decreased by DKK 1.7 billion due to high activity in–
Q2 2019 related to the construction of theHornsea 1 offshore wind farm for partners. In Q2
2020, revenue from construction agreements
Financial results Q2 2020
was primarily related to the divestment of thePower generation increased by 20% relative to offshore transmission assets at Walney ExtenQ2 2019, primarily due to ramp-up of generation sion, the construction of Virginia Coastal Wind
from Hornsea 1 and to some extent Borssele 1 & and the completion of Hornsea 1.
2. Furthermore, Q2 2019 saw a higher number ofoutages and curtailments across the portfolio.
EBITDA decreased DKK 1.2 billion relative to Q2
In Q2 2020 we have seen adverse COVID-19
2019 and amounted to DKK 2.4 billion.
impacts on especially the UK power market due
to lower demand for electricity. This led to high- EBITDA from Sites, O&M and PPAs amounted toer balancing tariffs (BSUoS) from National Grid, DKK 2.6 billion in Q2 2020. The 1% increase wassome periods with negative prices and lower
due to Hornsea 1 ramp-up partly offset by the
expected ROC recycle prices in Q2 2020. Most above-mentioned adverse COVID-19 impacts
wind farms in the UK under the CfD regime do(approx. DKK 150 million) and by lower earnings
not receive subsidies in periods where the dayfrom trading related to hedging of our power
ahead prices are negative for more than six
exposures and power portfolio optimisationconsecutive hours. Consequently, we shut down activities, which achieved very high results in Q2
part of our UK capacity in such periods. In Ger2019 (DKK 0.3 billion).
many, we also experienced more hours withnegative prices than in the same period last
EBITDA from partnerships decreased by DKK 1.2
year.
billion and amounted to DKK 0.4 billion. In Q2

Availability

2020, earnings from construction agreements
Wind speeds were in line with Q2 2019 andwere primarily related to the construction ofamounted to a portfolio average of 8.0m/s. This Virginia Coastal Wind, the completion of
was below a normal wind year (8.2m/s). Howev- Hornsea 1 and minor updates regarding finalised
er, availability reached 95%, which was significonstruction projects. In Q2 2019, earnings from
cantly higher than Q2 2019 due to the various
construction agreements primarily concerned
outages and curtailments last year.
Hornsea 1.

mark’ partnership.
WESTKÜSTE 100 received funding from theGerman government.

– interim financial report – H1 2020

Q2 2020 Q2 2019

Power generation

Other
Power sales (net of internally sourced
generation)

TWh
GBP/MWh

5.5

5.7

(3%)

14.3

12.9

11%

Power price, LEBA UK

25.4

41.4

(39%)

29.5

47.0

(37%)

British pound

DKK/GBP

8.4

8.5

(1%)

8.5

8.5

0%

DKKm

(11%)

Financial performance
Revenue

9,364

11,107(16%)

17,33919,474Sites, O&M and PPAs

3,625

3,078

18%

9,350

7,518

24%

Power sales

3,208

3,660

(12%)

4,872

5,689

(14%)

Construction agreements

2,486

4,200

(41%)

3,049

6,190

(51%)

46

169

(73%)

68

77

(12%)

2,361

3,572

(34%)

7,993

7,890

1%

2,578

2,552

1%

7,514

6,512

15%

Construction agreements and divestment gains

396

1,638

(76%)

1,495

2,526

(41%)

Other incl. project development

(613)

(618)

(1%)

(1,016)(1,148)

(11%)

Other
EBITDA

DKKm

Sites, O&M and PPAs

Depreciation

DKKm(1,452)(1,355)

7%(2,860)(2,653)

8%

EBIT

DKKm

909

2,217

(59%)

5,133

5,237

(2%)

Cash flow from operating activities

DKKm

4,338

8,036

(46%)

2,785

6,073

(54%)

Gross investments

DKKm(2,802)(1,563)79%(7,094) (4,442)

60%

Divestments

DKKm

(150)

(45)

233%

(141)

2,648

Free cash flow

DKKm

1,386

6,428

(78%)

(4,450)

4,279

n.a.

Capital employed

DKKm

84,311

67,34525%

84,311 67,345

25%

n.a.

O&M: Operation and maintenance agreements
PPAs: Power purchase agreements

12Management’s review

Offshore continued
EBITDA from other activities, including project
development amounted to DKK -0.6 billion andwas in line with Q2 2019.
Depreciation increased by 7% and amounted to
DKK 1.5 billion. The increase was mainly due tothe commissioning of Hornsea 1.
Cash flow from operating activities amounted
to DKK 4.3 billion, which was DKK 3.7 billion
lower than in Q2 2019. This was primarily due tothe lower EBITDA and higher net cash inflow
from work in progress in Q2 2019 due to received milestone payments related to the construction of Hornsea 1.
In Q2 2020, we had a net cash outflow fromwork in progress of DKK 0.2 billion, mainly fromthe construction of Virginia Coastal Wind andconstruction of the offshore transmission asset
at Hornsea 2, partly offset by the divestment of
the offshore transmission asset at Walney Extension.
Gross investments amounted to DKK 2.8 billion
and mainly related to Borssele 1 & 2, Hornsea 2,
Greater Changhua 1 & 2a and Ocean Wind.

Financial results H1 2020
Power generation increased by 36% relative to
H1 2019, primarily due to ramp-up of generationfrom Hornsea 1 and to some extent Borssele 1 &2 as well as higher wind speeds throughout H1
2020. Furthermore, H1 2019 saw a higher number of outages and curtailments across theportfolio than normal. This was partly offset bya cable replacement campaign at Hornsea 1 at
the beginning of this year as well as some periods with negative prices due to lower demandfor electricity driven by COVID-19.

– interim financial report – H1 2020

Wind speed, (m/s) for our offshore wind farms

Wind speeds amounted to 10.1m/s for the portfolio, which was above a normal wind yearwith very strong wind in January and February.
Availability reached 93%, which was above H12019 due to the various campaigns and curtailments and outages across the portfolio lastyear.

The wind speed indicates how
many metres per second thewind has blown in the areas
where we have offshore windfarms. The weighting is basedon our generation capacity.

* Indicates m/s for full year
2020 (if Q3 and Q4 follows thenormal wind year)

Revenue decreased by 11% to DKK 17.3 billion.
Revenue from offshore wind farms in operation increased 24% to DKK 9.4 billion due tothe above-mentioned ramp-up from Hornsea 1
and higher wind speeds partly offset by more
periods with negative prices. Despite of higher
volumes sold, revenue from power sales decreased by DKK 0.8 billion due to lower power
prices.

results in H1 2019.
EBITDA from partnerships decreased by DKK
1.0 billion and amounted to DKK 1.5 billion. In
H1 2020, our earnings from construction
agreements mainly related to the lowered
assumptions regarding the preferred bidder’s
expected return requirement on the Hornsea 1
transmission asset, the construction of Virginia
Coastal Wind and minor updates regarding
completed construction projects which positively impacted EBITDA. In H1 2019, earnings
from construction agreements primarily concerned Hornsea 1 and Borkum Riffgrund 2.

Revenue from construction agreements decreased by DKK 3.2 billion primarily due tohigh activity in H1 2019 related to the construction of the Hornsea 1 offshore wind farmfor partners. In H1 2020, revenue from construction agreements primarily related to thedivestment of the offshore transmission assets
at Walney Extension, construction of Virginia
Coastal Wind and the finalisation of Hornsea 1.

EBITDA from other activities, including project
development amounted to DKK -1.0 billion.
The decreased spend relative to H1 2019 was
mainly due to higher expensed project development activities in the US and Taiwan in H1
2019.

EBITDA increased by 1% relative to H1 2019
and amounted to DKK 8.0 billion.
EBITDA from Sites, O&M and PPAs amounted
to DKK 7.5 billion in H1 2020. The 15% increase
was due to Hornsea 1 ramp-up and higher windspeeds partly offset by the above-mentioned
adverse COVID-19 impacts and by lower earnings from trading related to hedging of ourpower exposures and power portfolio optimisation activities, which achieved very highDepreciation increased by 8% and amounted
to DKK 2.9 billion. The increase was mainly
due to commissioning of Hornsea 1.
Cash flow from operating activities amounted
to DKK 2.8 billion, which was DKK 3.3 billion

13

below H1 2019. This was mainly due to funds
tied up in work in progress in H1 2020 versus arelease in H1 2019, partly offset by less paid
tax in H1 2020. In H1 2020, we had a net cash
outflow from work in progress of DKK 2.0 billion. This was mainly due to supplier payments
related to the construction of Hornsea 1 forpartners, the construction of Virginia Coastal
Wind and construction of the offshore transmission asset at Hornsea 2, partly offset by
the divestment of the offshore transmission
asset at Walney Extension.
Gross investments amounted to DKK 7.1 billion
and mainly related to Borssele 1 & 2, Hornsea
2, Greater Changhua 1 & 2a and Ocean Wind.
Cash flow from divestments in H1 2020 related to compensations paid under the partnership agreements for Walney Extension. In H1
2019, cash flow from divestments related to
the receipt of deferred proceeds from the farm
-down of 50% of Hornsea 1 in 2018 (DKK 1.7
billion) and to the strengthening of our strategic partnership with Eversource as they became a 50% partner in our activities in the
New England area in February (DKK 1.0 billion).

Management’s review

Onshore
Highlights Q2 2020
– Plum Creek Onshore Wind Farm (230MW)
commissioned ahead of schedule and on
budget.

– We acquired the 227MWac solar PV project
Muscle Shoals, located in Alabama.

– We divested our 10MW Oak Solar farm in
New Jersey.

Financial results Q2 2020
Power generation increased by 83% relative to
Q2 2019. The increase was due to new windfarms in operation (Sage Draw, Lockett andPlum Creek). Wind speeds amounted to a portfolio average of 8.0m/s, which was higher thansame period last year, but slightly lower than anormal wind year (8.1m/s).
Revenue from wind farms in operation increasedby 19% due to the higher generation partly offset by lower prices for the part of the portfolio
not covered by PPAs.

the divestment of our 10MW Oak Solar farm in
New Jersey.

Financial results

Q2 2020 Q2 2019%

H1 2020

H1 2019

%

45%
92%

2,088
1,565

1,438
813

45%
92%

Business drivers
Decided (FID'ed) and installed capacity
Installed capacity

Financial results H1 2020
Power generation increased by 61% relative to
H1 2019. The increase was due to new windfarms in operation (Sage Draw, Lockett andPlum Creek). Wind speeds amounted to a portfolio average of 7.8m/s, slightly below a normal
wind year (7.9m/s), however, above the averagewind speed in H1 2019.

2,088
1,565

1,438
813

Wind speed

MW
MW
m/s

8.0

7.7

4%

7.8

7.7

1%

Load factor

%

49

47

2%p

47

47

0%p

96
1.6

97
0.8

(1%p)
95%

96
2.7

97
1.7

(1%p)
61%

Net realised price%TWh
USD/MWh

11.3

16.3

(31%)

12.1

16.9

(28%)

US dollar

DKK/USD

6.8

6.6

2%

6.8

6.6

3%

DKKm
DKKm

160

134

19%

297

248

20%

312

162

93%

499

313

59%

Sites

103

75

37%

176

159

11%

Production tax credits and tax attributes

268

140

91%

477

282

69%
20%

Availability
Power generation

Financial performance
Revenue

Revenue from wind farms in operation increased
by 20% due to the higher generation partly
offset by lower prices.

EBITDA

(59)

(53)

11%

(154)

(128)

EBITDA increased by 59% and amounted to
DKK 0.5 billion. The increase was primarily due
to the above-mentioned factors.

Depreciation

DKKm

(109)

(78)

40%

(207)

(158)

31%

EBIT

DKKm

203

84

142%

292

155

88%

Cash flow from operating activities

DKKm

3,209

78

n.a.

3,162

(16)

n.a.

Gross investments
Divestments

DKKm
DKKm

(733)
114

(1,258) (42%)
n.a.

(1,481)114(1,798)
-

(18%)
n.a.

Free cash flow

DKKm

2,590

(1,180)

n.a.

1,795

(1,814)n.a.

Capital employed

DKKm

8,608

8,033

7%

8,608

8,033

7%

Other incl. project development

Cash flow from operating activities amounted
to DKK 3.2 billion which primarily comprised tax
equity contribution from our partners for theSage Draw and Plum Creek wind farms.

EBITDA almost doubled and amounted to DKK Gross investments amounted to DKK 1.5 billion
0.3 billion. The increase was primarily due to the in H1 2020 and related to the construction ofabove-mentioned factors.
Permian Energy Center, Sage Draw and Plum
Creek.
Cash flow from operating activities amounted
to DKK 3.2 billion which primarily comprised tax
equity contributions from our partners at theSage Draw and Plum Creek wind farms, in April
and June, respectively.

Wind speed, (m/s) for our onshore wind farms* Indicates m/s for fullyear 2020 (if Q3 andQ4 follows the normal wind year)

Gross investments amounted to DKK 0.7 billion
in Q2 2020 and related to the construction of
Permian Energy Center, Sage Draw and Plum
Creek.
The wind speed indicates how many metres per second the wind has blown in the areas
where we have onshore wind farms. The weighting is based on our generation capacity.

Cash flow from divestments in Q2 2020 related– interim financial report – H1 2020

14

Management’s review

Markets & Bioenergy
Highlights Q2 2020
– Divestment of our Danish power distribution(Radius), residential customer and city lightbusiness to SEAS-NVE approved by the Danish competition authorities.

field from late 2019, and lasting until 2022.

Financial results

EBITDA from LNG amounted to DKK 0 billion.
Following the agreement to divest our LNG
activities we have made provisions to offset thenegative earnings.

Financial results Q2 2020
Revenue decreased by 47% compared to Q2
2019 and amounted to DKK 3.9 billion. The decrease was mainly driven by a significant decrease in average gas and power prices relative
to the same period last year as well as lower
gas and power volumes sold.
Power generation was 0.2TWh higher than in
Q2 2019, driven by generation associated withdelivery of ancillary services (see box on following page). Heat generation decreased by
0.1TWh despite of colder weather.

436
1.0

Power generation

TWh
TWh

0.9

0.7

37%

2.5

2.6

(6%)

Gas sales

TWh

20.1

31.8

(37%)

46.7

57.5

(19%)

%

H1 2020

H1 2019

%

269

62%

1,501

1,409

7%

1.1

(13%)

4.1

4.8

(15%)

TWh

3.0

3.3

(8%)

6.6

7.3

(9%)

EUR/MWh

5.3

13.0

(59%)

7.5

15.7

(52%)

Power price, DK

EUR/MWh

20.5

36.8 (44%)

20.8

39.9

(48%)

Power price, LEBA UK

GBP/MWh

25.4

41.4

(39%)

29.5

47.0

(37%)

Green dark spread, DK

EUR/MWh(12.2)

(3.4)

261%

(13.7)

(2.0)

569%

Green spark spread, DK

EUR/MWh

1.2

0.1

851%

(3.2)

(1.6)

98%

DKKm
DKKm

3,895

7,411 (47%)

Power sales
Gas price, TTF

in line with the same period last year andamounted to DKK 0.3 billion.
Cash flow from operating activities amounted
to DKK 0.8 billion in Q2 2020. The increase of
DKK 1.4 billion was mainly due to lower tradereceivables due to the lower revenue, partly
offset by lower trade payables.

Financial performance
Revenue

11,404

16,821

(32%)

185

(115)

n.a.

1,118

569

96%

CHP plants

152

(126)

n.a.

672

428

57%

Gas Markets & Infrastructure

(190)

(163)

17%

(179)

(280)

(36%)

EBITDA

Financial results H1 2020
Revenue decreased by 32% compared to H1
2019 and amounted to DKK 11.4 billion. The decrease was mainly driven by a significant decrease in average gas and power prices relative
to the same period last year as well as lower
gas and power volumes sold.

LNG
Distribution, B2C and city light
Other, incl. project development

Power generation was 6% lower than in H1
2019, driven by more windy and wet weather
and a warm first quarter 2020. Heat generation
EBITDA from CHP plants increased by DKK 0.3
decreased by 15% in H1 2020 mainly due tobillion and amounted to DKK 0.2 billion. The
increase was mainly due to higher sale of ancil- warmer weather in Q1 2020. In contrast, delary services, lower fixed costs due to timing and mand for ancillary services increased.
a positive one-off gain from divestment of the
EBITDA amounted to DKK 1.1 billion comparedclosed Inbicon production facilities in April.
to DKK 0.6 billion in H1 2019.

– interim financial report – H1 2020

NumberHeat generation

EBITDA amounted to DKK 0.2 billion comparedto DKK -0.1 billion in Q2 2019.

EBITDA from Gas Markets & Infrastructure wasin line with the same period last year andamounted to DKK -0.2 billion. A less net negative effect from revaluating our gas at storage(gas prices had a steeper decline during Q2 2019
than in Q2 2020) was partly offset by lower
earnings due to the shut-down of the Tyra gas

Q2 2019

Degree days

– We divested the Inbicon production facilities.
EBITDA from Distribution, B2C and city light was– Our Renescience facility in the UK has processed waste again since June.

Q2 2020

Business drivers

-

(41)

n.a.

-

(111)

n.a.

305

261

17%

781

671

16%
12%

(82)

(46)

78%

(156)

(139)

Depreciation

DKKm

(208)

(203)

2%

(400)

(388)

3%

EBIT

DKKm

(23)

(318)

(93%)

718

181

297%

Cash flow from operating activities

DKKm

817

(641)

n.a.

2,374

1,346

76%

Gross investments

DKKm

(179)

(495) (64%)

(423)

(962)

(56%)

Divestments

DKKm

81

35

131%

80

20 300%Free cash flow

DKKm

719

(1,101)

n.a.

2,031

404 403%

Capital employed

DKKm

13,670

14,238(4%)

13,670

14,238(4%)

ReportingWe run our business on an end-to-end value chain thinking. All activities and earnings that relate
to Offshore and Onshore are reported in these segments, even if the daily activities are performed on behalf of the group in Markets & Bioenergy. Therefore, earnings from trading related
to hedging of our power exposures and power portfolio optimisation activities in relation to Offshore and Onshore are presented in these business units.

EBITDA from CHP plants increased by DKK 0.2
billion relative to the same period last year andtotalled DKK 0.7 billion in H1 2020. Higher saleof ancillary services was partly offset by thedecrease in power and heat generation and thenegative spread development.

In H1 2020, EBITDA of DKK 151 million and DKK -6 million were transferred to Offshore and Onshore, respectively (DKK 590 million and DKK -6 million respectively in H1 2019). In Q2 2020,
EBITDA of DKK -46m and DKK 4 million were transferred to Offshore and Onshore, respectively(DKK 271 million and DKK -6 million respectively in Q2 2019).

15

Management’s review

Markets & Bioenergy continued
EBITDA from Gas Markets & Infrastructure increased by DKK 0.1 billion and amounted to
DKK -0.2 billion. The increase was mainly due toa positive impact from storage hedges and aless negative effect from revaluating our gas atstorage (gas prices had a steeper decline during
H1 2019 than in H1 2020). This was partly offset
by lower earnings due to the shut-down fromlate 2019 of the Tyra gas field as well as a provision for bad debt of DKK 0.1 billion in our B2B
business to cover the extraordinary COVID-19
related default risk among our customers.
EBITDA from LNG amounted to DKK 0 billion.
Following the agreement to divest our LNG
activities we have made provisions to offset thenegative earnings.
EBITDA from Distribution, B2C and city lightincreased by DKK 0.1 billion to DKK 0.8 billion.
The increase was mainly due to lower costs.

Ancillary services

Cash flow from operating activities amounted
to DKK 2.4 billion in H1 2020. The increase of
DKK 1.0 billion was mainly due to lower paid
taxes (receipt of on account taxes in H1 2020
versus payment of taxes on account in H1 2019)and lower trade receivables due to lower revenue. This was partly offset by changes in thevalue of derivatives and more gas at storage.

Ancillary services are different types of services where power market participants provide flexible capacity (generation or consumption) to balance the power system and to support securityof supply.
From early 2020, one of these services (automatic Frequency Restoration Reserves, aFRR) has
been offered through tenders in western Denmark after having been supplied via a contract with
the TSO in Norway for the last five years. The services are offered for one month at a time andrequire the market participants to be able to increase or decrease its generation/consumption
with the awarded amount (up to 100MW) for up to 15 minutes.

Gross investments amounted to DKK 0.4 billion
in H1 2020 and were mainly related to maintenance of the power distribution grid and concluding work related to the bioconversion ofAsnæs Power Station.

As a large thermal generator in Denmark, Ørsted is obliged to offer its available power generation capacity to the market at marginal costs, including for delivery of ancillary services. Thisimplies, that we are not allowed to prioritise delivery of ancillary services from green energy
sources to support our green strategy and targets.
In H1 2020, we were awarded a substantial share of the aFRR being tendered by Energinet, andwe have consequently supplied up to 100MW additional power generation from Esbjerg andStudstrup power stations, which we would otherwise not have supplied. This led to an increase in
the carbon emissions from these power stations.

– interim financial report – H1 2020

16

Management’s review

Performance highlights
Income statement(Business performance), DKKm
Revenue
EBITDA
Offshore- Sites, O&M and PPAs
- Construction agreements and otherOnshoreMarkets & Bioenergy
Other activities
Depreciation and amortisation
Impairment losses
Operating profit (loss) (EBIT)
Gain (loss) on divestment of enterprises
Net financial income and expenses
Profit (loss) before tax
Tax
Profit (loss) for the period from continuing operations
Profit (loss) for the period
Balance sheet
AssetsEquityShareholders in Ørsted A/S
Non-controlling interests
Hybrid capitalInterest-bearing net debt
Capital employed
Additions to property, plant, and equipment

H1 2020
27,001
9,761
7,993
7,514
479
499
1,118
151
(3,581)6,180(17)(1,786)
4,383(1,846)
2,537
2,493

H1 2019 Q2 2020
33,682
11,625
8,755
2,956
7,890
2,361
6,512
2,578
1,378
(217)
313
312
569
185
(17)
98
(3,307)(1,827)
5,448
1,129
(35)
(3)
(444)
(1,010)4,973
119(1,241)
(928)
3,732
(809)
(825)
3,671

Q2 2019
16,443
3,625
3,572
2,552
1,020
162
(115)
6
(1,689)
1,936
(18)
(545)
1,376
(283)
1,093
1,075

2019
67,842
17,484
15,161
13,750
1,411
786
1,495
42
(6,864)(568)
10,052(63)(1,135)8,856(2,756)
6,100
6,044

193,124
85,93069,7892,909
13,232
22,272
108,203
14,844

185,949
86,446
69,9603,247
13,2394,980
91,426
7,431

193,124
85,93069,7892,909
13,232
22,272
108,203
10,011

185,949
86,446
69,9603,247
13,2394,980
91,426
3,755

192,860
89,562
73,082
3,248
13,232
17,230106,792
22,4407,769(9,065)52(1,244)

7,392(7,267)
2,667
2,792

8,197
(3,757)
45
4,485

7,510
(3,368)(11)
4,131

13,079(23,305)
3,329(6,897)

10.8
23.1
419,985
765
321
5.2

29.3
57.5
419,985
533
224
7.9

10.8
23.1
419,985
765
321
(2.7)

29.3
57.5
419,985
504
212
1.9

10.6
31.0
419,985
689
290
12.7
1.5

28,194
11,041
3,537

36,04010,432
5,040

9,962
1,592
(1,870)17,2774,425
1,718

70,39819,0207,291

Business drivers
Offshore
Decided (FID'ed) and installed capacity3, offshore wind, GW
Installed capacity, offshore wind, GW
Generation capacity, offshore wind, GW
Wind speed3, m/s
Load factor3, %Availability3, %Power generation, TWh
Power sales, TWh
OnshoreDecided (FID'ed) and installed capacity3, GW
Installed capacity3, GW
Wind speed3, m/s
Load factor3, %Availability3, %Power generation3, TWh
Markets & Bioenergy
Degree days3, number
Heat generation, TWh
Power generation, TWh
Power sales, TWh
Gas sales, TWh
People and environment
Employees (FTE), end of period number
Total recordable injury rate (TRIR)4
Fatalities, number
Green share of heat and power generation, %Greenhouse gas intensity, g CO2e/kWhCash flow
Cash flow from operating activities
Gross investments
Divestments
Free cash flow

H1 2020

H1 2019

Q2 2020

Q2 2019

2019

9.9
6.8
3.8
10.1
46
93
7.2
14.3

9.9
5.6
3.3

9.9
6.8
3.8

9.9
5.6
3.3

9.9
6.8
3.6

9.2
41
92
5.3
12.9

8.0
32
95
2.6
5.5

8.0
31
87
2.2
5.7

9.2
42
93
12.0
27.6

2.1
1.6
7.8
47
96
2.7

1.4
0.8
7.7
47
97
1.7

2.1
1.6
8.0
49
96
1.6

1.4
0.8
7.7
47
97
0.8

2.1
1.0
7.3
45
98
3.5

1,501
4.1
2.5
6.6
46.7

1,409
4.8
2.6
7.3
57.5

436
1.0
0.9
3.0
20.1

269
1.1
0.7
3.3
31.8

2,399
8.3
4.6
14.7
125.0

6,731

6,312

6,731

6,312

6,526

4.7
0
88
64

4.1
1
82
80

12.9
0
86
84

4.1
1
85
71

4.9
1
86
65

Financial ratios
Return on capital employed (ROCE)1,4, %FFO/adjusted net debt2,4, %Number of outstanding shares, end of period, '000
Share price, end of period, DKKMarket capitalisation, end of period, DKK billion
Earnings per share (EPS) (BP), DKKDividend yield, %Income statement (IFRS)Revenue
EBITDA
Profit (loss) for the period from continuing operations– interim financial report – H1 2020

17

Business performance vs. IFRS

1)Business performance represents the underlying financial
performance of the Group in the reporting period as results are adjusted for temporary fluctuations in the market value of contracts (including hedging transactions)relating to other periods. Apart from this, there is no difference between business performance and IFRS results.
Read more in note 2.

2)

EBIT (last 12 months)/average capital employed.
Net debt including 50% of hybrid capital, cash and securities not available for use (with the exception of repo
transactions), and decommissioning obligations less deferred tax.
3)
See definition on page 164 and ’ESG statements’ in theannual report for 2019.
4)
Last 12 months.

Management’s review

Quarterly overview
Income statement(Business performance), DKKm
Revenue
EBITDA
Offshore- Sites, O&M and PPAs
- Construction agreements and otherOnshoreMarkets & Bioenergy
Other activities
Depreciation and amortisation
Impairment losses
Operating profit (loss) (EBIT)
Gain (loss) on divestment of enterprises
Net financial income and expenses
Profit (loss) before tax
Tax
Profit (loss) for the period from continuing
operations
Profit (loss) for the period

Q2
2020
11,625
2,956
2,361
2,578
(217)
312
185
98
(1,827)1,129(3)(1,010)
119
(928)

Q1
Q4
Q3
Q2
2020
2019
2019
2019
15,376 18,679 15,481 16,443
6,805
4,613
4,116 3,625
5,632 4,048 3,223 3,572
4,936 4,626 2,612 2,552
696
(578)
611 1,020
187
165
308
162
933
490
436
(115)
53
(90)
149
6
(1,754) (1,876) (1,681) (1,689)
(568)
5,051
2,169 2,435
1,936
(14)
(13)
(15)
(18)
(776)
(644)
(47)
(545)
4,264
1,515 2,368
1,376
(918)
(590)
(925)
(283)

Q1
2019
17,239
5,130
4,318
3,960
358
151
684
(23)
(1,618)
3,512
(17)
101
3,597
(958)

Q4
2018
23,527
19,206
18,847
4,109
14,73844303
12(1,697)603
18,112(28)(43)
18,038(2,878)Q3
2018
15,018
2,225
1,987
2,004
(17)
259
(21)
(1,437)
788
181
(436)
535
(117)

(809)
(825)

3,346
3,318

2,639
2,596

15,16015,194

418
405

925
896

1,443
1,477

1,093
1,075

Balance sheet
AssetsEquityShareholders in Ørsted A/S
Non-controlling interests
Hybrid capitalInterest-bearing net debt
Capital employed
Additions to property, plant, equipment

193,124 193,636 192,860 194,521 185,949 182,783 174,575 150,909
85,930 89,015 89,562 87,369 86,446 85,843 85,115 68,701
69,789 72,728 73,082 70,977 69,960 69,193 68,488 52,029
2,909 3,055 3,248 3,153 3,247
3,411
3,388
3,433
13,232 13,232 13,232 13,239 13,239 13,239 13,239 13,239
22,272 27,084 17,230 12,082 4,980
9,111 (2,219)
8,957
108,203 116,098 106,792 99,451 91,426 94,954 82,896 77,658
10,011 4,833 6,560 8,449 3,755
3,676
4,575
2,942

Cash flow
Cash flow from operating activities
Gross investments
Divestments
Free cash flow

8,197
(428)
4,816
871 7,510(3,757) (5,308) (8,816) (7,222) (3,368)
45
7
402
260
(11)
4,485 (5,729) (3,598) (6,091)
4,131

Financial ratios
Return on capital employed (ROCE)1,4, %FFO/adjusted net debt2,4, %Number of outstanding shares, end of period, '000
Share price, end of period, DKKMarket capitalisation, end of period, DKK billion
Earnings per share (EPS) (BP), DKK

10.8
11.0
10.6
29.3
29.3
28.2
32.1
23.0
23.1
21.3
31.0
47.4
57.5
46.2
69.0
41.7
419,985 419,985 419,985 419,985 419,985 420,045 420,045 420,155
765
666
689
637
533
504
436
436
321
280
290
267
224
212
183
183
8.0
1.1
3.5
1.9
6.2
35.6
1.1
(2.7)

Income statement (IFRS)Revenue
EBITDA
Profit (loss) for the period from continuing
operations

9,962
1,592

18,232
9,449

19,815 14,543
5,260 3,328(1,870)

5,407

1,429

– interim financial report – H1 2020

822

(118)
7,565
(3,899) (14,916)
2,678 18,749(1,339) 11,398(117)(4,385)380(4,122)

17,277
4,425

18,763
6,007

26,165
20,914

12,798
567

1,718

3,322

16,472(875)

18

Business drivers
Offshore
Decided (FID'ed) and installed capacity3,
offshore wind, GW
Installed capacity, offshore wind, GW
Generation capacity, offshore wind, GW
Wind speed, m/s
Load factor3, %Availability3, %Power generation, TWh
Power sales, TWh
OnshoreDecided (FID'ed) and installed capacity3, GW
Installed capacity3, GW
Wind speed3, m/s
Load factor3, %Availability3, %Power generation, TWh
Markets & Bioenergy
Degree days3, number
Heat generation, TWh
Power generation, TWh
Power sales, TWh
Gas sales, TWh
People and environment
Employees (FTE) end of period, number
Total recordable injury rate (TRIR)4
Fatalities, number
Green share of heat and power generation, %Greenhouse gas intensity, g CO2e/kWh

Q2
2020

Q1
2020

Q4
2019

Q3
2019

Q2
2019

Q1
2019

Q4
2018

Q3
2018

9.9
6.8
3.8
8.0
32
95
2.6
5.5

9.9
6.8
3.6
12.1
60
93
4.6
8.8

9.9
6.8
3.6
10.0
50
93
3.9
7.7

9.9
5.6
3.6
8.5
37
93
2.8
7.0

9.9
5.6
3.3
8.0
31
87
2.2
5.7

9.0
5.6
3.0
10.4
51
96
3.1
7.2

9.0
5.6
3.0
10.3
53
93
3.3
7.7

8.9
5.1
2.9
7.7
32
92
1.9
5.0

2.1
1.6
8.0
49
96
1.6

2.1
1.3
7.5
44
95
1.1

2.1
1.0
7.3
46
98
1.0

1.7
1.0
6.6
39
98
0.9

1.4
0.8
7.7
47
97
0.8

1.0
0.8
7.8
47
97
0.8

1.0
0.8
7.3
41.0
98.0
0.6

-

436
1.0
0.9
3.0
20.1

1,065
3.1
1.6
3.6
26.7

882
3.0
1.6
4.1
36.6

108
0.5
0.4
3.3
30.8

269
1.1
0.7
3.3
31.8

1,140
3.7
1.9
4.0
25.8

884
2.8
1.8
4.2
25.5

76
0.3
0.7
3.5
31.3

6,731
4.7
0
86
84

6,608
4.7
0
90
53

6,526
4.9
0
90
44

6,454
4.5
0
87
62

6,312
4.1
1
85
71

6,176 6,080
4.3
4.7
0
0
80
83
85
87

5,882
5.0
0
71
212

Business performance vs. IFRS

1)Business performance represents the underlying financial performance of the Group in the reporting period as
results are adjusted for temporary fluctuations in themarket value of contracts (including hedging transactions) relating to other periods. Apart from this, there isno difference between business performance and IFRS
results. Read more in note 2.

2)

EBIT (last 12 months)/average capital employed.
Net debt including 50% of hybrid capital, cash andsecurities not available for use (with the exception of
repo transactions), present value of lease obligations (in2018), and decommissioning obligations less deferredtax.
3)
See definition on page 164 and ’ESG statement’ in theannual report for 2019.
4)
Last 12 months.

Management’s review

Contents
Consolidated financial statements

Notes

Management statement

Income statement H1

20

1.

Basis of reporting

27

Statement of comprehensive income H1

21

2.

Business performance

28

Income statement Q2

22

3.

Segment information

29

Statement of comprehensive income Q2

23

4.

Revenue

32

Balance sheet

24

5.

Other operating income and expenses

34

Statement of changes in equity

25

6.

Gross and net investments

34

Statement of cash flows

26

7.

Assets classified as held for sale

35

8.

Discontinued operations

35

9.

Financial income and expenses

36

10.

Tax on profit (loss) for the year

37

11.

Reserves

38

12.

Market risks

38

13.

Fair value measurement

39

14.

Interest-bearing debt and FFO

40— Interim financial report — H1 2020

19

Statement by the Executive Board and theBoard of Directors

41

Forward-looking statements

42

Consolidated financial statements

Income statement
1 January - 30 June
H1 2020

H1 2019

Business
performance

Adjustments

Revenue

27,001

1,193

Cost of sales(14,623)

87

Other external expenses(2,467)-

Employee costs(2,115)

-

11

Note

Income statement, DKKm

4

Share of profit (loss) in associates and joint ventures

Business
performance

Adjustments

28,19433,682

2,358

36,040(14,536)(21,066)(681)(21,747)(2,467)(2,954)-(2,954)(2,115)(1,873)-(1,873)

-

11

(13)

-

(13)

IFRS

IFRS

5

Other operating income

2,101

-

2,101

1,138

-

1,138

5

Other operating expenses

(147)

-

(147)

(159)

-

(159)

Operating profit (loss) before depreciation,amortisation and impairment losses (EBITDA)

9,761

1,280

11,041

8,755

1,677

10,432(3,581)-(3,581)(3,307)-(3,307)

6,180

1,280

7,460

5,448

1,677

7,125

(17)

-

(17)

(35)

-

(35)

6

-

6

4

-

4

-

1,357

2,598

-

2,598

Amortisation, depreciation and impairment losses on
intangible assets and property, plant and equipment
Operating profit (loss) (EBIT)
Gain (loss) on divestment of enterprises
Share of profit (loss) in associates and joint ventures
9

Financial income

1,357

9

Financial expenses(3,143)-(3,143)(3,042)-(3,042)

Profit (loss) before tax

4,383

1,280

5,663

4,973

1,677

6,650

Tax on profit (loss) for the period(1,846)(280)(2,126)(1,241)(369)(1,610)

Profit (loss) for the period from continuing operations

2,537

1,000

3,537

3,732

1,308

5,040

10
8

Profit (loss) for the period from discontinued operations

(44)

-

(44)

(61)

-

(61)

2,493

1,000

3,493

3,671

1,308

4,979

Shareholders in Ørsted A/S

2,178

1,000

3,178

3,374

1,308

4,682

Interests and costs, hybrid capital owners of Ørsted A/S

326

326

256

256

Non-controlling interests

(11)

(11)

41

41

Profit (loss) for the period

Accounting policies
Business performance
The business performance principle is ouralternative performance measure. Under businessperformance, the market value adjustment of ourenergy hedges, where we do not apply IFRS hedge
accounting, are deferred and recognised in the
profit (loss) in the period in which the hedged
exposure materialises. Energy hedges comprise
hedging of energy and associated currency risks aswell as fixed-price physical gas and power
contracts. According to IFRS, the market value ofenergy hedges, where we do not apply IFRS hedge
accounting, are recognised on an ongoing basis in
the profit (loss) for the period. The difference
between IFRS and business performance is specified
in the ’Adjustments’ column. Read more about thebusiness performance principle in note 2 ’Businessperformance’ as well as note 1.5 ’Businessperformance’ in the annual report 2019.

Profit (loss) for the period is attributable to:Profit (loss) per share, DKK:
From continuing operations

5.3

7.7

8.2

11.3

From discontinued operations

(0.1)

(0.1)

(0.1)

(0.1)

Total profit (loss) per share

5.2

7.6

8.1

11.2

Profit (loss) per share
Diluted profit (loss) per share corresponds
to profit (loss) per share, as the dilutive
effect of the share incentive programme isless than 0.1% of the share capital.

— Interim financial report — H1 2020

20

Consolidated financial statements

Statement of comprehensive income
1 January - 30 June
H1 2020

H1 2019

Business
performance
2,493

Adjustments
1,000

IFRS
3,493

Business
performance
3,671

Adjustments
1,308

IFRS
4,979

Value adjustments for the period

844(1,925)(1,081)

2,491(1,249)

1,242

Value adjustments transferred to income statement

(131)

645

514

552

(428)

124

(4,260)2,111-(4,260)
2,111

(585)
293

Tax on hedging instruments

(183)

280

97

Tax on exchange rate adjustments

476

-

476

Share of other comprehensive income of associated companies,
after tax
Other comprehensive income(7)(1,150)(1,000)(7)(2,150)Total comprehensive income

1,343

-

1,343

Statement of comprehensive income, DKKm
Profit (loss) for the period
Other comprehensive income:Cash flow hedging:

Statement ofcomprehensive income
All items in ’Other
comprehensive income’may be recycled to theincome statement.

Exchange rate adjustments:
Exchange rate adjustments relating to net investment inforeign enterprises
Value adjustment of net investment hedges

-

(585)
293

(566)

369

(197)

85

-

85

(8)

-

2,262

(1,308)

(8)
954

5,933

-

5,933

Tax:

Other:

Comprehensive income for the period is attributable to:Shareholders in Ørsted A/S

1,173

5,620

Interest payments and costs, hybrid capital owners of Ørsted A/S

326

256

Non-controlling interests

(156)

57

Total comprehensive income

1,343

5,933

— Interim financial report — H1 2020

21

Consolidated financial statements

Income statement
1 April - 30 June
Q2 2020

Q2 2019

Business
performance

Adjustments

Revenue

11,625(1,663)

Cost of sales(6,816)299

Other external expenses(1,208)-

Employee costs(1,092)

-

7

Note

Income statement, DKKm

4

Share of profit (loss) in associates and joint ventures

Business
performance

Adjustments

9,962

16,443834

17,277(6,517)(10,703)(34)(10,737)(1,208)(1,554)-(1,554)(1,092)

(951)

-

(951)

-

7

(11)

-

(11)

IFRS

IFRS

5

Other operating income

514

-

514

465

-

465

5

Other operating expenses

(74)

-

(74)

(64)

-

(64)

2,956

(1,364)

1,592

3,625

800

4,425

(1,827)1,129(1,364)(1,827)(235)(1,689)1,936

800(1,689)2,736

Gain (loss) on divestment of enterprises

(3)

-

(3)

(18)

-

(18)

Share of profit (loss) in associates and joint ventures

3

-

3

3

-

3

-

552

938

-

938

Operating profit (loss) before depreciation,amortisation and impairment losses (EBITDA)
Amortisation, depreciation and impairment losses on
intangible assets and property, plant and equipment
Operating profit (loss) (EBIT)

9

Financial income

552

9

Financial expenses(1,562)-(1,562)(1,483)-(1,483)

119(1,364)(1,245)

1,376

800

2,176

Profit (loss) before tax
108

Tax on profit (loss) for the period

(928)

303

(625)

(283)

(175)

(458)

Profit (loss) for the period from continuing operations(809)(1,061)(1,870)

1,093

625

1,718

Profit (loss) for the period from discontinued operations

(16)

-

(16)

(18)

-

(18)

(825)

(1,061)(1,886)

1,075

625

1,700

(1,140)(1,061)

625

1,389

Profit (loss) for the period

Accounting policies
Business performance
The business performance principle is ouralternative performance measure. Under businessperformance, the market value adjustment of ourenergy hedges, where we do not apply IFRS hedge
accounting, are deferred and recognised in the
profit (loss) in the period in which the hedged
exposure materialises. Energy hedges comprise
hedging of energy and associated currency risks aswell as fixed-price physical gas and power
contracts. According to IFRS, the market value ofenergy hedges, where we do not apply IFRS hedge
accounting, are recognised on an ongoing basis in
the profit (loss) for the period. The difference
between IFRS and business performance is specified
in the ’Adjustments’ column. Read more about thebusiness performance principle in note 2 ’Businessperformance’ as well as note 1.5 ’Businessperformance’ in the annual report 2019.

Profit (loss) for the period is attributable to:Shareholders in Ørsted A/S(2,201)

764

Interests and costs, hybrid capital owners of Ørsted A/S

326

326

291

291

Non-controlling interests(11.0)(11.0)

20

20

Profit (loss) per share, DKK:
From continuing operations

(2.7)

(5.2)

1.9

3.4

From discontinued operations

0.0

0.0

0.0

0.0

Total profit (loss) per share

(2.7)

(5.2)

1.9

3.4

Profit (loss) per share
Diluted profit (loss) per share corresponds
to profit (loss) per share, as the dilutive
effect of the share incentive programme isless than 0.1% of the share capital.

— Interim financial report — H1 202022

Consolidated financial statements

Statement of comprehensive income
1 April - 30 June
Q2 2020

Q2 2019

Business
performance(825)

Adjustments(1,061)IFRS(1,886)

Business
performance
1,075

Adjustments
625

IFRS
1,700

(1,740)

1,269

(471)

1,120

(676)

444

353

95

448

164

(124)

40

(1,991)963-(1,991)963(2,558)1,367-(2,558)
1,367

Tax on hedging instruments

388

(303)

85

(265)

175

(90)

Tax on exchange rate adjustments

203

-

203

112

-

112

Share of other comprehensive income of associated companies,
after tax
Other comprehensive income

3(1,821)

1,061

3
(760)

(7)
(67)

(625)

(7)
(692)

Total comprehensive income(2,646)-(2,646)

1,008

-

1,008

Statement of comprehensive income, DKKm
Profit (loss) for the period
Other comprehensive income:Cash-flow hedging:
Value adjustments for the period
Value adjustments transferred to income statement

Statement ofcomprehensive income
All items in ’Other
comprehensive income’may be recycled to theincome statement.

Exchange rate adjustments:
Exchange rate adjustments relating to net investment inforeign enterprises
Value adjustment of net investment hedges
Tax:

Other:

Comprehensive income for the period is attributable to:Shareholders in Ørsted A/SInterest payments and costs after tax, hybrid capital owners ofØrsted A/S
Non-controlling interests
Total comprehensive income— Interim financial report — H1 2020

(2,877)326(95)(2,646)

23

824
291
(107)
1,008

Consolidated financial statements

Balance sheet
Note

Assets, DKKm
Intangible assets

30 June2020
504

31 December
2019
672

30 June2019564

Land and buildings

5,073

5,177

4,897

Production assets

80,463

76,682

Fixtures and fittings, tools and equipment

13

13

8

30 June2020

31 December
2019

30 June2019

Share capital

4,204

4,204

4,204

Reserves(1,585)

413

(881)

70,096

Retained earnings

67,17064,051

66,637

Proposed dividends

Note
11

Equity and liabilities, DKKm

588

652

711

-

4,414

-

Property, plant and equipment under construction

27,86823,502

16,096Equity attributable to shareholders in Ørsted A/S

69,78973,082

69,960Property, plant and equipment

13,239113,992

106,01391,800Hybrid capital

13,232

13,232

Investments in associates and joint ventures

542

497

527

Non-controlling interests

2,909

3,248

3,247

Other securities and equity investments

227

217

213

Equity85,93089,56286,446

Deferred tax

8,441

6,847

5,753

Deferred tax

3,903

3,371

4,695

Other receivables

3,019

1,713

2,144

Provisions

12,203

12,063

12,860

Other non-current assets

12,229

9,274

8,637

Non-current assets

126,725

115,959

101,001

Inventories

11,417

14,031

Derivatives

7,841

7,740

Lease liabilities

4,444

4,728

4,479

Bond and bank debt

32,97536,03932,40013,087

Contract liabilities

3,703

3,762

3,720

6,303

Tax equity liabilities

7,595

4,563

3,654

14

Contract assets

1,216

739

-

Trade receivables

4,723

8,140

7,303

Other payables
Non-current liabilities

Other receivables

4,294

5,253

3,609

Provisions

455

538

597

Income tax

1,176

346

6,308

Lease liabilities

653

604

595

Securities

12,327

16,552

25,485

14

Bond and bank debt

2,052

801

235

Cash

6,754

7,148

6,968

13

Derivatives

5,387

6,958

5,647

Current assets

49,74859,94969,063Contract liabilities

435

784

3,009

Assets classified as held for sale

16,651

16,952

15,885Trade payables

12,933

10,832

12,291

Assets

193,124

192,860

185,949

Tax equity liabilities

630

632

446

4,846

4,247

3,915

Other payables

8

463

469

242

65,28664,99562,050

Income tax

6,048

4,075

5,931

Current liabilities

33,43929,471

32,666

Liabilities

98,725

94,466

94,716

Liabilities relating to assets classified
as held for sale
Equity and liabilities

8,469
193,124

8,832
192,860

4,787
185,949

Assets and liabilities classified as held for sale
Assets classified as held for sale at 30 June 2020
comprised our Danish power distribution,
residential customer, and city light businesses, ouroil pipe system in Denmark as well as our LNG
business.

— Interim financial report — H1 2020

24

Consolidated financial statements

Statement of changes in equity
1 January - 30 June
2020

DKKm

Share
capital Reserves*

Equity at 1 January

2019

ShareRetained Proposed holders inearnings dividends Ørsted A/SHybridcapitalNon-controllinginterests

Total
Group

Share
capital Reserves*

ShareRetained Proposed holders inearnings dividends Ørsted A/SHybridcapitalNon-controllinginterests

Total
Group

4,204

413

64,051

4,414

73,082

13,232

3,248

89,562

4,204(1,827)62,012

4,099

68,48813,2393,388

85,115Comprehensive income
for the period:
Profit (loss) for the period

-

-

3,178

-

3,178

326

(11)

3,493

-

-

4,682

-

4,682

256

41

4,979

Other comprehensive
income:Cash-flow hedging

-

(567)

-

-

(567)

-

-

(567)

-

1,366

-

-

1,366

-

-

1,366

Exchange rate adjustments-(2,004)--(2,004)-(145)(2,149)

-

(308)

-

-

(308)

-

16

(292)

Tax on other comprehensive
income

-

573

-

-

573

-

-

573

-

(112)

-

-

(112)

-

-

(112)

-

-

(7)

-

(7)

-

-

(7)

-

-

(8)

-

(8)

-

-

(8)

-

(1,998)

3,171

-

1,173

326

(156)

1,343

-

946

4,674

-

5,620

256

57

5,933

Coupon payments, hybrid
capitalTax, hybrid capital

-

-

-

-

-

(326)
-

-

(326)
-

-

-

-

-

-

(327)
71

-

(327)
71

Dividends paid

-

-

4

(4,414)(4,410)-(185)(4,595)--

3(4,099)(4,096)-(198)(4,294)Purchases of treasury shares

-

-

(58)

-

(58)

-

-

(58)

-

-

(99)

-

(99)

-

-

(99)

Other changes

-

-

2

-

2

-

2

4

-

-

47

-

47

-

-

47

4,204

(1,585)(52)
67,170(4,414)-(4,466)69,789(326)
13,232

(183)
2,909

(4,975)85,930

4,204

(881)

(49)
66,637(4,099)-(4,148)69,960(256)
13,239

(198)
3,247

(4,602)86,446

Share of other comprehensive
income of associatedcompanies, after tax
Total comprehensive
incomeTransactions with owners:

Total transactions withownersEquity at 30 June

* See note 11 ‘Reserves’ for more information about reserves.

— Interim financial report — H1 202025

Consolidated financial statements

Statement of cash flows
Note

Statement of cash flows, DKKm

11,041

10,432

1,592

4,425

Instalments on leases

(226)

(197)

(112)

(102)

2

Operating profit (loss) before
depreciation, amortisation andimpairment losses (EBITDA), IFRS
Change in derivatives, businessperformance adjustments
Change in derivatives, otheradjustments
Change in provisions(1,280)(1,677)

1,364

(800)

Coupon payments on hybrid capital

(326)

(327)

(326)

(327)

(514)

(224)

680

(358)

(365)

33

(349)

39

Dividends paid to shareholders inØrsted A/S
Purchase of own shares(4,410)(58)(4,096)
(99)

(58)

(99)

Reversal of gain (loss) on
divestment of assets
Other items(1,288)

(308)

(71)

(190)

(228)

(204)

(89)

(61)

(7)
(2,015)

83
5,272

(43)
(177)

85
4,271

Change in work in progress

H1 2020

H1 2019

Q2 2020

Q2 2019

Note

Statement of cash flows, DKKm

H1 2020

H1 2019

Q2 2020

Proceeds from raising of loans

328

7,839

(3,311)

3,550

Instalments on loans(977)(2,202)(407)(2,202)

Transactions with non-controllinginterests
Net proceeds from tax equity
partners
Collateral related to derivaties

Change in tax equity partner
liabilities
Change in other working capital

2,892
1,821

(219)
(369)

3,017

(138)

Cash flows from financing activities

2,904

889

Interest received and similar items

2,326

2,141

694

1,402

Interest paid and similar items(3,489)(2,915)(1,328)(2,085)

Income tax paid

(1,353)(4,857)

Cash flows from operating activities

7,769

7,392

(86)
8,197

(30)
7,510

(9,008)(6,882)(3,770)(3,100)

80

2,683

57

8

Cash flows from continuing
operations
Cash flows from discontinued
operations
Total net change in cash andcash equivalents for the period
Cash and cash equivalents at the
beginning of the period
Total net change in cash and cash
equivalents
Other change in cash and cash
equivalents
Exchange rate adjustments of cash
and cash equivalents
Cash and cash equivalents
at 30 June

Purchase of intangible assets andproperty, plant and equipment
Sale of intangible assets andproperty, plant and equipment
Acquisition of enterprises

1

(271)

(3)

(149)

Divestment of enterprises

(22)

(40)

(5)

(19)

Purchase of other equity
investments
Purchase of securities

(11)

(2)

(2)

(8)

(4,133)(12,782)(593)(10,175)

Sale/maturation of securities

8,250

12,918

1,373

6,289

-

(2)

-

(1)

(47)

(110)

18

(110)

Change in other non-current assets
Transactions with associates andjoint ventures
Dividends received and capital
reduction
Cash flows from investing activities

-

6

-

6

(4,890)(4,482)(2,925)(7,259)Q2 2019

3

(9)

23

(8)

2,376
(3,518)

41
746

586
(3,694)

2,266
3,017

(639)

3,656

1,578

3,268

(44)

-

102

(2)

(683)

3,656

1,680

3,266

6,459

2,663

4,223

3,120

(683)

3,656

1,680

3,266

80

(7)

1

(7)

23

(1)

(25)

(68)

5,879

6,311

5,879

6,311

Statement of cash flows
Our supplementary statement of gross and net investments
appears from note 6 ’Gross and net investments’ and free cash
flows (FCF) from note 3 ’Segment information’.
’Cash’ according to the balance sheet includes ’Cash, notavailable for use’, amounting to DKK 876 million as at
30 June 2020.

Change in work in progress‘Change in work in progress’ consists of elements in contract
assets, contract liabilities, and construction managementagreements related to construction of offshore wind farms andconstruction of offshore transmission assets as well as therelated trade payables.

— Interim financial report — H1 202026

Consolidated financial statements

1. Basis of reporting
This section provides an overall description of
our accounting policies as well as an overview of our implementation of new andamended accounting standards andinterpretations.

Accounting policiesØrsted is a listed public company, headquartered in Denmark.
This interim financial report for the first halfyear of 2020 comprises the interim financial
statements of Ørsted A/S (the parent company) and subsidiaries controlled by Ørsted A/S.
The interim financial report has been pre-— Interim financial report — H1 2020

pared in accordance with the International
Financial Reporting Standards (IFRS) and
IAS 34 as adopted by the EU and further
requirements in the Danish Financial Statements Act for the presentation of quarterlyinterim reports by listed companies.

In the sections below, the most relevant new
or amended standards and interpretations
are presented.

implemented the following new or changed
accounting standards (IAS and IFRS) andinterpretations:Definitions of alternative performancemeasures can be found on page 79 of theannual report for 2019.

 Amendments to IFRS 3: Business Combina-

The interim financial report for the first halfyear of 2020 follows the same accounting
policies as the annual report for 2019, except
for any new, amended, or revised accounting
standards and interpretations (IFRSs)
endorsed by the EU, effective for theaccounting period beginning on 1 January
2020.

This interim financial report contains selectedaccounting policies and should therefore beread in conjunction with the annual report for
2019.

Implementation of new or changed
accounting standards and interpretations

tions.
 Amendments to IFRS 9 and IFRS 7: Interest

Rate Benchmark Reform.
The adoption of the new and changed
accounting standards has not impacted ourinterim financial report and is not expected to
impact the consolidated financial statementsfor 2020.

Effective from 1 January 2020, we have27

Consolidated financial statements

2. Business performance
Specification of the difference between EBITDA according
to business performance and according to IFRS, DKKm
EBITDA - business performance
Business performance adjustments in respect of revenue forthe periodBusiness performance adjustments in respect of cost of sales
for the period

H1 2020

H1 2019

Q2 2020

Q2 2019

9,761

8,755

2,956

3,625

1,193

2,358

(1,663)

834

87

(681)

299

(34)

EBITDA - IFRS

11,041

10,432

1,592

4,425

Total business performance adjustments for the period comprise:Market value adjustments for the period of financial and physicalhedging contracts relating to a future period

1,925

1,249

(1,269)676

Reversal of deferred gains (losses) relating to hedging contracts
from previous periods where the hedged production or trade isrecognised in business performance EBITDA in this period

(645)

428

(95)

124

Total adjustments

1,280

1,677

(1,364)800

Financial impact of hedging

materialises.

Our hedging of market risks is based on anumber of different accounting principles,
depending on the type of exposure being
hedged.

Exposures from the proceeds from partial
sales of new offshore wind farms and powerpurchase agreements in Onshore, among
other things, are hedged as cash flow
hedging in accordance with the IFRS
principles and are transferred to both IFRS
and business performance EBITDA in the
period in which the hedged exposuresmaterialise.

In the business performance result, the valueof hedging contracts concerning energy andrelated currencies is deferred for recognitionin the period in which the hedged exposure

The table shows thedifference between theincome statement according
to business performance andaccording to IFRS, which isshown in the adjustments
column in the income
statement.
The difference between
business performance and
IFRS EBITDA in 2020 is mainly
due to gains on currency
hedges partly countered by
the reversal of gains on gas
hedges recognised in IFRS inprior years.

Expected value for recognition in business performance
EBITDA, DKKbn

The figure shows the timeof the transfer of the market
value of hedging contracts
in business performance
EBITDA for both businessperformance and IFRS
hedges.

— Interim financial report — H1 202028

Consolidated financial statements

3. Segment information
H1 2020
Income statement, DKKm

Reportablesegments

Other
activities/
eliminations

Business
performance

Offshore

OnshoreMarkets &Bioenergy

Adjustments

IFRS

External revenue

15,066302

11,627

26,995

6

27,001

1,193

28,194Intra-group revenue

2,273

(5)

(223)

2,045

(2,045)1---

Revenue

17,339297

11,40429,040(2,039)27,001

1,193

28,194

Cost of sales(7,853)

5(8,706)(16,554)

1,931(14,623)

87(14,536)

Employee costs and other external expenses(2,892)(315)(1,635)(4,842)260(4,582)-(4,582)Gain (loss) on disposal of non-current assets

1,217

34

37

1,288

-

1,288

-

1,288

Additional other operating income and expenses

171

478

18

667

(1)

666

-

666

Share of profit (loss) in associates and joint ventures

11

-

-

11

-

11

-

11

EBITDA

7,993

499

1,118

9,610

151

9,761

1,280

11,041

Depreciation and amortisation(2,860)

(207)

(400)

(3,467)(114)(3,581)-(3,581)

5,133

292

718

-

-

6,143

37

6,180

1,280

7,460

Intangible assets, property, plant and equipment

85,62018,8198,306

112,745

1,751

114,496-

114,496

Equity investments and non-current receivables

1,849

-

239

2,088

153

2,241

-

2,241

Net working capital, work in progress

10,029-1

10,030-10,030-10,030

Impairment losses
Operating profit (loss) (EBIT)-

Profit (loss) and cash
flows are shown only forcontinuing operations.
The column ’Other
activities/eliminations’primarily covers theelimination of intersegment transactions.
It also includes income
and costs, assets andliabilities, investment
activity, taxes, etc.,
handled at Group level.

Key ratios

Net working capital, tax equity
Net working capital, capital expenditures
Net working capital, other items
Derivatives, net
Assets classified as held for sale, net-(7,588)-(7,588)-(7,588)-(7,588)(9,006)

(89)

(26)

(9,121)-(9,121)-(9,121)3,777

80(2,964)

893

199

1,092

-

1,092

552

(241)

2,007

2,318

136

2,454

-

2,454

-

-

8,182

8,182

-

8,182

-

8,182

Decommissioning obligations(4,797)(383)(1,310)(6,490)-(6,490)-(6,490)

Other provisions(3,797)-(1,639)(5,436)(732)(6,168)-(6,168)717(1,990)

856

(417)

83

(334)

-

(334)

Other receivables and other payables, net

(633)

-

18

(615)

24

(591)

-

(591)

Capital employed at 30 June

84,311

8,608

13,670106,589

1,614

108,203-108,203

Tax, net

Of which, capital employed for discontinued operations
Of which, capital employed for continuing operations
Return on capital employed (ROCE) %

(34)

-

(34)

108,237-

108,237

-

-

-

-

-

10.8

-

-

Cash flow from operating activities

2,785

3,162

2,374

8,321

(552)

7,769

-

7,769

Gross investments(7,094)(1,481)(423)(8,998)(67)(9,065)-(9,065)

(141)

114

80

53

(1)

52

-

52

(4,450)

1,795

2,031

(624)

(620)

(1,244)-(1,244)

Divestments
Free cash flow (FCF)— Interim financial report — H1 2020

29

Including theelimination of otheractivities, the totalelimination of
intra-group revenue
amounts to
DKK 3,440 million,
which primarily relates
to our Shared Functions
services as well as our
B2B, B2C, and power
distribution businesses.
1

Consolidated financial statements

3. Segment information (continued)
H1 2019
Income statement, DKKm

Reportablesegments

Other
activities/
eliminations

Business
performance

Offshore

OnshoreMarkets &Bioenergy

Adjustments

IFRS

External revenue

16,446248

17,05533,749(67)

33,682

2,358

36,040Intra-group revenue

3,028

-

(234)

2,794

(2,794)1---

Revenue

19,474248

16,82136,543(2,861)33,682

2,358

36,040

Cost of sales(9,122)(2)(14,665)(23,789)

2,723(21,066)(681)(21,747)

Employee costs and other external expenses(3,048)(215)(1,695)(4,958)131(4,827)-(4,827)

Gain (loss) on disposal of non-current assets

312

-

(4)

308

-

308

-

308

Additional other operating income and expenses

285

282

114

681

(10)

671

-

671

Share of profit (loss) in associates and joint ventures

(11)

-

(2)

(13)

-

(13)

-

(13)

EBITDA

7,890

313

569

8,772

(17)

8,755

1,677

10,432

Depreciation and amortisation(2,653)

(158)

(388)

(3,199)(108)(3,307)-(3,307)

Impairment losses

5,237

155

181

-

-

5,573

(125)

5,448

1,677

7,125

Intangible assets, property, plant and equipment

68,46812,757

9,128

90,3532,011

92,364-92,364Equity investments and non-current receivables

373

-

291

664

746

1,410

-

1,410

Net working capital, work in progress

4,551

-

-

4,551

-

4,551

-

4,551

Operating profit (loss) (EBIT)-

Profit (loss) and cash
flows are shown only forcontinuing operations.
The column ‘Other
activities/eliminations’primarily covers theelimination of intersegment transactions.
It also includes income
and costs, assets andliabilities, investment
activity, taxes, etc.,
handled at Group level.

Key ratios

Net working capital, tax equity-(3,528)-(3,528)-(3,528)-(3,528)

Net working capital, capital expenditures(3,852)

(23)

(82)

(3,957)-(3,957)-(3,957)

Net working capital, other items

4,421

(34)

(3,368)

1,019

307

1,326

-

1,326

Derivatives, net(1,043)

525

1,041

523

133

656

-

656

-

-

11,098

11,098-

11,098-

11,098

Decommissioning obligations(4,239)(275)(1,267)(5,781)-(5,781)-(5,781)Other provisions(3,221)-(3,596)(6,817)(860)(7,677)-(7,677)

Tax, net

1,882(1,242)

907

1,547

(113)

1,434

-

1,434

5

(147)

86

(56)

(414)

(470)

-

(470)

67,345

8,033

14,23889,616

1,810

91,426

Assets classified as held for sale, net

Other receivables and other payables, net
Capital employed at 30 June

91,426-

Of which, capital employed for discontinued operations

(186)

-

(186)

Of which, capital employed for continuing operations

91,612-

91,612Return on capital employed (ROCE) %

-

-

-

-

-

29.3

-

-

Cash flow from operating activities

6,073

(16)

1,346

7,403

(11)

7,392

-

7,392

Gross investments(4,442)(1,798)(962)(7,202)(65)(7,267)-(7,267)

Divestments

2,648

-

20

2,668

(1)

2,667

-

2,667

Free cash flow (FCF)

4,279(1,814)

404

2,869

(77)

2,792

-

2,792

— Interim financial report — H1 2020

30

Including theelimination of otheractivities, the totalelimination of
intra-group revenue
amounts to
DKK 4,063 million,
which primarily relates
to our Shared Functions
services as well as our
B2B, B2C, and power
distribution businesses.
1

Consolidated financial statements

3. Segment information (continued)
Reportingsegments

Other
activities/
eliminations

Business
performance

Offshore

OnshoreMarkets &Bioenergy

Adjustments

IFRS

8,377

165

4,003

12,545(920)

11,625(1,663)

9,962

987

(5)

(108)

874

(874)1---

Revenue

9,364

160

3,895

13,419(1,794)

11,625(1,663)

9,962

Cost of sales(5,594)

5(2,985)(8,574)

1,758(6,816)299(6,517)

Employee costs and other external expenses(1,512)

(157)

(767)

(2,436)136(2,300)-(2,300)Gain (loss) on disposal of non-current assets

-

34

37

71

-

71

-

71

Q2 2020, Income statement and FCF, DKKm
External revenue
Intra-group revenue

Additional other operating income andexpenses
Share of profit (loss) in associates and joint
ventures
EBITDA

95

270

6

371

(2)

369

-

369

8
2,361

312

(1)
185

7
2,858

98

7
2,956

(1,364)7
1,592

Depreciation and amortisation(1,452)

(109)

(208)

(1,769)(58)(1,827)-(1,827)

-

-

-

-

-

-

-

-

909

203

(23)

1,089

40

1,129

(1,364)(235)

Cash flow from operating activities

4,338

3,209

817

8,364

(167)

8,197

-

8,197

Gross investments(2,802)

(733)

(179)

(3,714)(43)(3,757)-(3,757)

Impairment losses
Operating profit (loss) (EBIT)

Divestments

(150)

114

81

45

-

45

-

45

Free cash flow (FCF)

1,386

2,590

719

4,695

(210)

4,485

-

4,485

External revenue

9,798

134

7,525

17,457(1,014)

16,443834

17,277Intra-group revenue

1,309

-

(114)

1,195

(1,195)1---

Revenue

11,107134

7,411

18,652(2,209)16,443834

17,277

Cost of sales(6,152)(2)(6,681)(12,835)

2,132(10,703)(34)(10,737)

Employee costs and other external expenses(1,616)

(110)

(860)

(2,586)81(2,505)-(2,505)Gain (loss) on disposal of non-current assets

178

-

12

190

-

190

-

190

Profit (loss) and cash
flows are shown only forcontinuing operations.
The column ‘Other
activities/eliminations’primarily covers theelimination of intersegment transactions.
It also includes income
and costs, assets andliabilities, investment
activity, taxes, etc.,
handled at Group level.

Q2 2019, Income statement and FCF, DKKm

Additional other operating income andexpenses
Share of profit (loss) in associates and joint
ventures
EBITDA

65

140

4

209

2

211

-

211

(10)
3,572

162

(1)
(115)

(11)
3,619

6

(11)
3,625

800

(11)
4,425

Depreciation and amortisation(1,355)

(78)

(203)

(1,636)(53)(1,689)-(1,689)

-

-

-

-

-

-

-

-

2,217

84

(318)

1,983

(47)

1,936

800

2,736

Impairment losses
Operating profit (loss) (EBIT)
Cash flow from operating activities

8,036

78

(641)

7,473

37

7,510

-

7,510

Gross investments(1,563)(1,258)(495)(3,316)(52)(3,368)-(3,368)

(10)

(1)

(11)

-

(11)

4,147

(16)

4,131

-

4,131

Divestments
Free cash flow (FCF)— Interim financial report — H1 2020

(45)

-

35

6,428

(1,180)(1,101)31

Including theelimination of otheractivities, the totalelimination of
intra-group revenue
amounts to
DKK 1,560 million (Q22019: DKK 1,844 million),
which primarily relates
to our Shared Functions
services as well as our
B2B, B2C, and power
distribution businesses.
1

Consolidated financial statements

4. Revenue
Revenue, DKKm
Sale of gas

Offshore

OnshoreMarkets &Bioenergy

Other
activities/
eliminations

H1 2020
total

Offshore

OnshoreMarkets &Bioenergy

Other
activities/
eliminations

H1 2019
total

-

-

3,915

5

3,920

-

-

7,873

(4)

7,869

Generation of power

2,023

222

840

-

3,085

2,330

191

1,345

-

3,866

Sale of power

4,684

-

3,059

(2,070)

5,673

5,194

-

4,149

(2,692)

6,651

Revenue from construction of offshore wind farms

3,049

-

-

-

3,049

6,190

-

-

-

6,190

Generation and sale of heat and steam

-

-

1,602

-

1,602

-

-

1,626

-

1,626

Distribution and transmission

-

-

1,128

(2)

1,126

-

-

1,292

(2)

1,290

Other revenue
Total revenue from customers, IFRS

931

26

453

(39)

1,371

950

(9)

332

(45)

1,228

10,687248

10,997(2,106)

19,826

14,664

182

16,617(2,743)28,7204,600

Government grants

6,121

17

204

-

6,342

4,301

14

299

(14)

Economic hedging

2,307

32

(280)

216

2,275

224

2

804

(268)

762

(12)

(24)

(329)

116

(249)

389

52

1,555

(38)

1,958

Total revenue, IFRS

19,103273

10,592(1,774)28,194

19,578250

19,275(3,063)36,040Adjustments(1,764)

24

812

(265)

(1,193)

(104)

(2)

(2,454)202(2,358)

Total revenue, business performance

17,339297

11,404(2,039)27,001

19,474248

16,821(2,861)33,682

At a point in time

5,576

248

1,635

(2,106)

5,353

4,982

182

7,814

(2,743)

10,235

Over time

5,111

-

9,362

-

14,473

9,682

-

8,803

-

18,485

10,687248

10,997(2,106)

19,826

14,664

182

16,617(2,743)28,720

Other revenue

Timing of revenue recognition from customers, IFRS

Total revenue from customers, IFRSThe timing of transfer of goods or services
to customers is categorised as follows:‘At a point in time’ mainly comprises: sale of gas or power in the market, e.g.

North Pool, TTF, NBP
 transmission assets for offshore windfarms.
‘Over time’ mainly comprises: construction agreements for offshore

wind farms and transmission assets
 long-term contracts with customers todeliver gas, heat, or power.

— Interim financial report — H1 2020

Revenue decreased by 20% relative to
H1 2019 and was DKK 27,001 million in
H1 2020. The decrease was mainly due tosignificantly lower gas and power prices,
lower sold gas volumes, limited construction
work on wind farms for partners, and lower
thermal heat and power generation. Thiswas only partly offset by the divestment of
the Walney Extension transmission asset andthe increase in government grants, mainly
due to ramp-up of generation from Hornsea 1
and higher generation across the portfolio.

32

Consolidated financial statements

4. Revenue (continued)
Revenue, DKKm
Sale of gas

Offshore

OnshoreMarkets &Bioenergy

Other
activities/
eliminations

Q2 2020
total

Offshore

OnshoreMarkets &Bioenergy

Other
activities/
eliminations

Q2 2019
total
3,795

-

-

1,245

(2)

1,243

-

-

3,594

201

Generation of power

687

123

323

-

1,133

931

103

372

-

Sale of power

3,146

-

1,365

(1,848)

2,663

3,431

-

1,930

(2,123)

Revenue from construction of offshore wind farms

1,406
1

3,238

2,486

-

-

-

2,486

4,200

-

-

-

4,200

Generation and sale of heat and steam

-

-

454

-

454

-

-

505

-

505

Distribution and transmission

-

-

468

(1)

467

511

13

164

(31)

657

466

(6)

589
167

(1)
(33)

588
594

Total revenue from customers, IFRS

6,830

136

4,019

(1,882)

9,103

9,028

97

7,157

(1,956)

14,326

Government grants

2,296

6

40

-

2,342

1,818

3

88

-

1,909

Economic hedging

(636)

8

(329)

489

(468)

791

5

172

59

1,027

(19)

(16)

(1,068)88(1,015)

174

34

38

(231)

15

8,471

134

2,662

(1,305)

9,962

11,811

139

7,455(2,128)17,277

Other revenue

Other revenue
Total revenue, IFRS
Adjustments

893

26

1,233

(489)

1,663

(704)

(5)

(44)

(81)

(834)

9,364

160

3,895

(1,794)

11,625

11,107134

7,411(2,209)16,443

At a point in time

2,696

136

(529)

(1,882)

421

1,788

97

3,589

(1,956)

3,518

Over time

4,134

-

4,548

-

8,682

7,240

-

3,568

-

10,808

Total revenue from customers, IFRS

6,830

136

4,019

(1,882)

9,103

9,028

97

7,157

(1,956)

14,326

Total revenue, business performance
Timing of revenue recognition from customers, IFRS

— Interim financial report — H1 202033

Consolidated financial statements

6. Gross and net
investments

5. Other operating
income and expenses
Other operating income, DKKm

H1 2020

H1 2019

Q2 2020

Q2 2019

Gross and net investments, DKKm

H1 2020

H1 2019

Q2 2020

Q2 2019

1,332

362

99

226

Cash flow from investing activities(4,890)(4,482)(2,925)(7,259)Other compensation

127

345

10

53

US tax credits and tax equity income

477

282

269

140

Dividends received and capital reductions
reversed
Purchase and sale of securities, reversed(4,117)

(6)
(136)

(780)

(6)
3,886

Gain on divestment of assets

Miscellaneous operating income

165

149

136

46

Total other operating income

2,101

1,138

514

465

H1 2020

H1 2019

Q2 2020

Q2 2019

44

54

28

36

Transactions with non-controlling interests inconnection with divestments
Sale of non-current assets

Miscellaneous operating expenses

103

105

46

28

Total cash flows from divestments

Total other operating expenses

147

159

74

64

Total net investments

Other operating expenses, DKKm
Loss on divestment of assets

Gain on divestment of assets is mainly
related to the Hornsea 1 offshore transmission asset where we lowered our assumption
regarding the preferred bidder’s expected
return requirement in Q1 2020.
Other compensation is primarily related tocompensations regarding outages and— Interim financial report — H1 2020

curtailments, mainly from the German grid
operator TenneT.
US tax credits and tax equity income originate from our US onshore wind farms in operation and correspond to the tax credits andother tax attributes provided to Ørsted andtax equity partners for generated power.

Sale of non-current assets, reversed
Total gross investments(58)(2,643)(52)

11(9,065)(7,267)(3,757)(3,368)

(6)
58

24
2,643

(7)
52

(11)

52

2,667

45

(11)

(9,013)(4,600)(3,712)(3,379)The table shows gross and net investments basedon cash flows from investing activities.

34

Consolidated financial statements

8. Discontinued operations

7. Assets classified asheld for sale
30 June2020

31 December
2019

30 June
2019

245

226

219

13,475

13,243

14,561

Deferred tax

320

589

-

Inventories

58

43

16

Assets classified as held for sale, DKKm
Intangible assets
Property, plant and equipment

Trade receivables

657

736

647

Other receivables

1,862

2,113

380

34

2

62

16,651

16,952

15,885

Income tax
Total assets classified as held for sale
Deferred tax

1,126

1,315

870

Provisions

2,385

2,662

378

Contract liabilities

3,070

3,107

2,747

Trade payables

351

333

105

Other payables

968

970

590

Income tax

569

445

97

Total liabilities relating to assets classified as held for sale

8,469

8,832

4,787

Net assets classified as held for sale

8,182

8,120

11,098Discontinued operations

Capital employed

Discontinued operations comprise assets andliabilities related to our divested Oil & Gas
business, which was sold to INEOS on
29 September 2017.

Our capital employed in discontinued
operations mainly consisted of provisions
relating to the divestment of the Oil & Gas
business (tax indemnifications and payments
related to the Fredericia stabilisation plant)
as well as a receivable selling price which
does not carry any interest. We expect toreceive the outstanding selling price in 2020.

Financial results
Loss for the period amounted to
DKK -43 million and primarily concerned
adjustments related to currency.
Cash flows for the period concerned a payment related to the Fredericia stabilisation
plant.

Performance highlights, DKKm

H1 2020

H1 2019

Q2 2020

-

(7)

-

(7)

Profit (loss) from discontinued operations

(44)

(61)

(16)

(18)

Cash flows from discontinued operations

(44)

-

102

(2)

30 June
2020

30 June
2019

-

643

EBIT
The table shows assets and liabilities which havebeen put up for sale and, therefore, are notexpected to contribute to our future earnings.

Capital employed, discontinued operations
DKKm
Non-current receivables

At 30 June 2020 and 31 December 2019,assets and related labilities held for salecomprised our Danish power distribution,
residential customer, and city lightbusinesses, our oil pipe system in Denmark,and our LNG business. All activities are partof Markets & Bioenergy.
In June, the Danish competition authorities
and the Danish Energy Agency approved thedivestment of our Danish power distribution(Radius), residential customer, and city light— Interim financial report — H1 2020

In addition, we have an interest-bearing
receivable of DKK 335 million (not part ofcapital employed), which we also expect toreceive in 2020.

Derivatives, net

(42)

(55)

businesses to SEAS-NVE. Following theauthorities’ approval, we expect to close thetransaction end of August 2020.

Other provisions

(679)

(807)

14

33

Other receivables and other payables, net

673-

In 2019, we signed an agreement to divest
our LNG activities to Glencore. We expect toclose the transaction by late Q3 2020.

Total net assets

(34)

(186)

Tax, net

Q2 2019

At 30 June 2019, assets and related
liabilities held for sale comprised our Danish
power distribution, residential customer, andcity light businesses as well as our oil pipe
system in Denmark.

35

Consolidated financial statements

9. Financial income and expenses
Net financial income and expenses, DKKm

H1 2020

H1 2019

Q2 2020

Q2 2019

Interest expenses, net

(886)

(528)

(508)

(276)

Interest expenses, leasing

(97)

(76)

(53)

(40)

Interest element of provisions, etc.

(221)

(212)

(108)

(106)

Tax equity partner's contractual return

(209)

(139)

(118)

(70)

Capital losses on early repayment of loans
and interest rate swaps
Value adjustments of derivatives, net

(369)
(72)

(190)

(369)
(30)

(92)

Exchange rate adjustments, net

195

536

(3)

(42)

Value adjustments of securities, net

(131)

222

191

78

Other financial income and expenses

4

(57)

(12)

3

(1,786)(444)(1,010)(545)

Net financial income and expenses

The table shows net financial income and expenses
corresponding to our internal control.
Exchange rate adjustments and hedging contracts
entered into to hedge currency risks are presented
net under the item ’Exchange rate adjustments,net’.

The increase in net financial income andexpenses in 2020 compared with 2019 ismainly due to: higher net interest expenses, mainly related

to interest regarding tax
 capital losses on early repayment of loans

and interest rate swaps
 a lower gain on exchange rate adjustments

in 2020
 a loss on value adjustment of securities in2020 due to an increase in interest rates.

— Interim financial report — H1 202036

Consolidated financial statements

10. Tax on profit (loss) for the year
Business performance
H1 2020

H1 2019

Profit (loss)
before tax

Tax

Tax in %Profit (loss)
before tax

Deferred tax liability, new tax equity contributions

-

(885)

n.a.

Other items, including prior year adjustments

-

(50)

n.a.

Ordinary business activities

4,383

(911)

Effective tax for the year

4,383

(1,846)

Tax for the period, DKK

Tax on business performance profit (loss)
was DKK 1,846 million in the first half year of2020 compared to DKK 1,241 in the first halfyear of 2019. The effective tax rate for the
first half year of 2020 was 42%. The effective
tax rate was affected by recognition of a tax— Interim financial report — H1 2020

liability in connection with the tax equity
partnerships related to the Sage Draw andPlum Creek onshore wind farms. We
received tax equity contributions from ourtax equity partners in April and June,
respectively.

Tax

Tax in %

-

n.a.

n.a.

-

(147)

n.a.

21%

4,973

(1,094)

22%

42%

4,973

(1,241)25%

Effective tax rate
The estimated average annual tax rate for ordinary
business activities is 22% compared to 30% for the
full-year of 2019.
The effective tax for the period is calculated on thebasis of the profit (loss) before tax from continuing
operations.

Accounting policies
Effective tax rate
The estimated average annual tax rate isseparated based on regions and into two different
categories: a) ordinary business activities andb) gain (loss) on divestments and impacts from tax
equity contributions.

37

Consolidated financial statements

11. Reserves

12. Market risks
Foreigncurrencytranslation
reserve

Hedging
reserve

Total
reserves

Reserves at 1 January 2020

168

245

413

Exchange rate adjustments(4,115)-(4,115)

-

1,030

1,030

Reserves 2020, DKKm

Value adjustments of hedging
Value adjustments transferred to:
Revenue-

53

53

Financial income and expenses

-

461

461

Market risks
We manage market risks to protect Ørsted
against market price volatility and ensurestable and robust financial ratios that
support our growth strategy as well asprotect the value of our assets.
In general, we hedge price exposures for up
to five years to reduce cash flow fluctua-

tions. Prices are not hedged in the long term,
and therefore our long-term market risks are
determined by our strategic decisions on
investments in new assets, the conclusionof long-term contracts as well as any
divestment of assets.
Our energy and currency exposures for thenear term is shown below.

Tax:
Tax on hedging and currency adjustments

940

(367)

573

Movement in comprehensive income for the period(3,175)

1,177(1,998)

Total reserves at 30 June

(3,007)

1,422(1,585)

Foreigncurrencytranslation
reserve

Hedging
reserve

Total
reserves

Reserves at 1 January 2019

(1,906)79(1,827)

Exchange rate adjustments

(601)

-

(601)

-

1,535

1,535

Reserves 2019, DKKm

Value adjustments of hedging

Currency exposure, GBP 1 July 2020 - 30 June 2025,
USD 1 July 2020 - 31 December 2036, DKKbn

NTD is not a material
risk for the coming five
years.
We do not deem EUR toconstitute a risk, as we
expect Denmark tomaintain its fixedexchange-rate policy.

Value adjustments transferred to:
Revenue-

71

71

Financial income and expenses

-

53

53

Tax:
Tax on hedging and currency adjustments
Movement in comprehensive income for the period
Total reserves at 30 June

148

(260)

(112)

(453)

1,399

946

(2,359)

1,478

(881)

For USD, we manage
our risk as a natural
time spread between
front-end capital
expenditures and longend revenue between
1 July 2020 - 31 December 2036.

Energy exposure 1 July 2020 - 30 June 2025, DKKbn

The graph shows ourenergy exposure for the
next five years.
Our energy exposures
are significantly reduced
due to hedging.

— Interim financial report — H1 202038

Consolidated financial statements

13. Fair value measurement
AssetsFair value hierarchy
DKKm

Derivatives valued on the basis of
non-observable input, DKKm

Liabilities

Observable input
Non-observable input
Total 30 June 2020

Observable input
Non-observable input
Total 30 June 2019

(2,458)

Value adjustments through profit or loss

240

344

(205)

1,192
(136)

27

7

298

(1,051)-1,819

Market value at 30 June

298

768

Non-observable inputs per commodity
price input, DKKm

2020

2019

-

525

63

48

Securities

Derivatives

Derivatives

285

-

8

30

-

-

12,327

7,476

5,298

-

Value adjustments through othercomprehensive income
Sales/redemptions

-

-

357

59

-

Purchase/issues

285

12,327

7,841

5,387

-

Market value at 30 June before deferred
gain/loss

2019
Quoted prices

2019

236

Inventories

2020
Quoted prices

2020

Market value at 1 January

Otherpayables

375

-

7

11

-

-

25,485

5,058

5,166

-

-

-

1,238

470

545

375

25,485

6,303

5,647

545

US power prices

The table shows assets and liabilities measured atfair value, split between inputs.

Other power prices

Valuation principles and key assumptions

Accounting policy

In order to minimise the use of subjective
estimates or modifications of parametersand calculation models, it is our policy todetermine fair values based on the external
information that most accurately reflects
the market values. We use pricing services
and benchmark services to increase the data
quality.

Quoted prices comprise gas and derivatives that aretraded in active markets. Where derivatives aretraded in an active market, we generally have daily
settlements, for which reason the market value is
zero.
Observable input comprises securities and derivatives, for which valuation models with observable
inputs are used to measure fair value. The majorityof our securities are quoted Danish mortgage orgovernment bonds. Since these are not always
traded on a daily basis, we are valuing these basedon market interest rates for similar bonds.
Non-observable input derivatives comprise primarily
long-term contracts on the purchase or sale ofpower and gas. The fair values are based onassumptions concerning the long-term prices of,power and gas as well as risk premiums in respect ofliquidity and market risks. Since there are no active
markets for long-term prices, the fair value has been
determined through an estimate of the future prices.

Market values are determined by theTreasury & Risk Management function which
reports to the CFO. The developments inmarket values is monitored on a continuous
basis and are reported to Group Executive
Management.

— Interim financial report — H1 2020

Deferred loss at initial recognition on 1 January

Gas prices

235

195

Total

298

768

The table shows the
movements during theyear in the total market
value (assets andliabilities) of derivatives
valued on the basis of
non-observable inputs.

After a change in thevaluation methodology
as of 31 December 2019,
US power prices are nolonger valued based on
significant nonobservable inputs.

Normally, the energy price can be observed for a
maximum of five years in the power market, after
which an active market no longer exists. Beyond thefive-year horizon, the energy price is thus projectedon the basis of the observable forward price for year
one to five.
All assets and liabilities measured at fair value aremeasured on a recurring basis.

39

Consolidated financial statements

14. Interest-bearing debt and FFO
Interest-bearing debt and interest-bearing assets
DKKm

Funds from operations (FFO) LTM1DKKm
EBITDA - business performance

30 June2020

31 December
2019

30 June201918,48917,48430,1863,519

Interest expenses, net(1,849)(1,312)

(889)

(97)

(171)

(76)

(377)

(344)

(428)

(220)

(212)

(209)

(278)

(279)

(273)

(2,821)(2,318)76(1,799)30 June2020

31 December
2019

30 June
2019

3,520

3,466

Interest-bearing debt:
Bank debt
Bond debt

31,50733,37329,116

Interest expenses, leasing

Total bond and bank debt

35,027

36,83932,635

638

608

572

Lease liability

5,097

5,332

5,074

Other interest-bearing debt

1,690

649

664

Total interest-bearing debt

42,452

43,42838,945

Securities

12,327

16,552

25,485

Reversal of interest expenses
transferred to assets
Interest element of
decommissioning obligations
50% of coupon payments on
hybrid capital
Calculated interest paid on
operating lease obligations
Adjusted interest expenses, net

Cash

6,754

7,148

6,968

Other receivables

1,099

1,781

823

Tax equity liability

Interest-bearing assets:

Receivables in connection with divestments

-

717

689

Total interest-bearing assets

20,18026,19833,965

Total interest-bearing net debt

22,272

17,230

4,980

Reversal of gain (loss) on divestmentof assets
Reversal of recognised operatinglease payment in profit (loss)
for the year
Total current tax

(878)

101

(15,367)(6,437)(5,799)376(3,186)

Funds from operations (FFO)

8,353

9,468

10,21030 June2020

31 December
2019

30 June20191

Market value of bond and bank debt
The market values of bond and bank debts
amounted to DKK 38.4 billion and
DKK 3.7 billion, respectively, at
30 June 2020.

Interest-bearing net debt totalled DKK 22,272 million as of 30 June 2020, which was an increase of
DKK 5,042 million relative to 31 December 2019.
The increase was driven by a decrease in interestbearing assets of DKK 6,018 million. In addition,interest-bearing debt decreased by DKK 976 million, which mainly related to the repayment ofshort-term repo debt and a decrease in bond debt
due to the drop in GBP/DKK exchange rates, reducing the amount to be repaid in DKK.

Last 12 months

Adjusted interest-bearing net debt
DKKm
Total interest-bearing net debt

22,272

17,2304,980

50% of hybrid capital

6,616

6,616

6,619

Cash and securities not available for
distribution, excluding repo loans
Decommissioning obligations

1,628
6,490

1,437
6,158

1,094
5,781

(900)

(866)

(719)

36,10630,57517,75530 June2020

31 December
2019

30 June
2019

23.1%

31.0%

57.5%

Deferred tax on decommissioning
obligations
Total adjusted interest-bearing
net debt
Funds from operations (FFO)/
adjusted interest-bearing net debt
Funds from operations (FFO)/
adjusted interest-bearing net debt

— Interim financial report — H1 2020

40

The table shows
which items areincluded in funds
from operations(FFO).
FFO is calculated
for the continuing
operations.

The table shows
which items areincluded in theadjusted interestbearing debt aswell as FFO
relative toadjusted interestbearing debt.

Consolidated financial statements

Statement by the Executive Board and theBoard of Directors
The Board of Directors and the Executive
Board have today considered and approved
the interim financial report of Ørsted A/S forthe period 1 January - 30 June 2020.

additional requirements in the Danish
Financial Statements Act. The accounting
policies remain unchanged from the annual
report for 2019.

The interim financial report, which has notbeen audited or reviewed by the company’s
independent auditors, has been prepared inaccordance with IAS 34 'Interim Financial
Reporting' as adopted by the EU andIn our opinion, the interim financial report
gives a true and fair view of the Group's
assets, liabilities, and financial position at
30 June 2020 and of the results of the Group's
operations and cash flows for the period

1 January - 30 June 2020.
Furthermore, in our opinion, the management's review gives a fair presentation of thedevelopment in the Group's operations andfinancial circumstances, of the results for theperiod, and of the overall financial position of
the Group as well as a description of the mostsignificant risks and elements of uncertainty
facing the Group.

Over and above the disclosures in the interim
financial report, no changes in the Group's
most significant risks and uncertainties haveoccurred relative to the disclosures in theannual report for 2019.

Skærbæk, 12 August 2020

Executive Board

Henrik Poulsen

Marianne Wiinholt

President and CEO

CFO

Board of Directors

Thomas Thune Andersen

Lene Skole

Chairman

Deputy Chairman

Jørgen KildahlPeter Korsholm

Dieter Wemmer

Hanne Sten Andersen*

Poul Dreyer*

Benny Gøbel*— Interim financial report — H1 2020

Lynda Armstrong

41*Employee representative

Consolidated financial statements

Forward-looking statements
Forward-looking statements
This report contains certain forward-looking statements, including but not limited to, the statements and expectations contained in the ‘Outlook’ section of this report (p. 7).
Statements herein, other than statements of historical facts, regarding our future results related
to operations, financial condition, cash flows, business strategy, plans and future objectives areforward-looking statements. Words such as ‘targets’, ‘believe’, ‘expect’, ‘aim’, ‘intend’, ‘plan’, ‘seek’,‘will’, ‘may’, ‘should’ ‘anticipate’, ‘continue’, ‘predict’ or variations of these words as well as otherstatements regarding matters that are not historical facts or regarding future events or prospects,
constitute forward-looking statements.

We have based these forward-looking statements on our current views with respect to future
events and financial performance. These views involve a number of risks and uncertainties which
could cause actual results to differ materially from those predicted in the forward-looking statements and from our past performance. Although, we believe that the estimates and projections
reflected in the forward-looking statements are reasonable, they may prove materially incorrect,
and actual results may materially differ due to a variety of factors. These factors include, but are
not limited to, market risks, development and construction of assets, changes in temperature,
wind conditions, wake and blockage effects, precipitation levels, the development in power, coal,carbon, gas, oil, currency, and interest rate markets, changes in legislation, regulations

or standards, the renegotiation of contracts, changes in the competitive environment in ourmarkets, security of supply, cable break-downs, or other disruptions. Read more about the risks inthe chapter ‘Risk and risk management’ and in note 7 of the annual report 2019 available atwww.orsted.com.

Unless required by law, we are under no duty and undertake no obligation to update orrevise any forward-looking statement after the distribution of this report, whether as a result of
new information, future events, or otherwise.

— Interim financial report — H1 2020

42

Consolidated financial statements