READ MORE READ MORE www.dongenergy.com DONG Energy A/S DONG ENERGY Annual Report 2009 DONG Energy A/S ANNUAL Kraftværksvej 53 CONTENTS Design: Bysted A/S 7000 Fredericia REPORT Printing: Scanprint A/S Denmark 2009 This report was printed by an ISO 14001 eco- certified and EMAS-registered printing firm. Tel. +45 99 55 11 11 ANNUAL REPORT 2009 MANAGEMENT’S REVIEW FINANCIAL CALENDAR Preface 1 11 March 2010 Annual Report 2009 Selected highlights in 2009 2 19 April 2010 Annual General Meeting Financial key performance indicators 4 20 May 2010 Interim financial report Q1 2010 Non-financial key performance indicators 5 19 August 2010 Interim financial report H1 2010 Market and strategy 6 11 November 2010 Interim financial report 9M 2010 Corporate responsibility 14 Financial performance and outlook: FURTHER INFORMATION Consolidated results 16 Media Relations Review of business areas’ performance 22 Louise Münter Financial outlook for 2010 26 +45 99 55 96 62 Risk management 28 Business areas: Investor Relations Exploration & Production 34 Morten Hultberg Buchgreitz Generation 40 +45 99 55 97 50 Energy Markets 46 Sales & Distribution 52 www.dongenergy.com Management and employee information: Employees 58 OTHER PUBLICATIONS Corporate governance 60 Supervisory Board 63 Executive Board 66 CONSOLIDATED FINANCIAL STATEMENTS Consolidated income statement 68 Consolidated statement of comprehensive COMPANY INFORMATION AT 31 DECEMBER 2009 income 69 Consolidated balance sheet 70 Shareholders holding at least Consolidated statement of changes in equity 72 5% of the shares: Consolidated cash flow statement 73 Notes 74 The Danish Ministry of Finance 72.98%* SEAS-NVE Holding A/S 10.88% Syd Energi Net A/S 6.95% CONSOLIDATED NON-FINANCIAL STATEMENTS 162 * At 12.02.2010, the Danish Ministry of Finance held 74.04% of the shares PARENT COMPANY FINANCIAL STATEMENTS 167 Responsible Energy 2009 can be ordered MANAGEMENT STATEMENT AND INDEPENDENT online or downloaded at dongenergy.com AUDITORS’ REPORT Statement by the Executive and Cover photo Supervisory Boards 199 3.6 MW wind turbines near Avedøre Power Station, Independent auditors’ report, financial 200 Copenhagen Assurance Statement, non-financial 201 Language ADDITIONAL INFORMATION The annual report has been prepared in Danish and in English. In the event of any discrepancies between the Danish and the English Company announcements in 2009 202 annual reports, the Danish version shall prevail. Glossary 203 GRI overview 204 DONG Energy at a glance Cover Company information Cover 541-166 Printed matter READ MORE READ MORE www.dongenergy.com DONG Energy A/S DONG ENERGY Annual Report 2009 DONG Energy A/S ANNUAL Kraftværksvej 53 CONTENTS Design: Bysted A/S 7000 Fredericia REPORT Printing: Scanprint A/S Denmark 2009 This report was printed by an ISO 14001 eco- certified and EMAS-registered printing firm. Tel. +45 99 55 11 11 ANNUAL REPORT 2009 MANAGEMENT’S REVIEW FINANCIAL CALENDAR Preface 1 11 March 2010 Annual Report 2009 Selected highlights in 2009 2 19 April 2010 Annual General Meeting Financial key performance indicators 4 20 May 2010 Interim financial report Q1 2010 Non-financial key performance indicators 5 19 August 2010 Interim financial report H1 2010 Market and strategy 6 11 November 2010 Interim financial report 9M 2010 Corporate responsibility 14 Financial performance and outlook: FURTHER INFORMATION Consolidated results 16 Media Relations Review of business areas’ performance 22 Louise Münter Financial outlook for 2010 26 +45 99 55 96 62 Risk management 28 Business areas: Investor Relations Exploration & Production 34 Morten Hultberg Buchgreitz Generation 40 +45 99 55 97 50 Energy Markets 46 Sales & Distribution 52 www.dongenergy.com Management and employee information: Employees 58 OTHER PUBLICATIONS Corporate governance 60 Supervisory Board 63 Executive Board 66 CONSOLIDATED FINANCIAL STATEMENTS Consolidated income statement 68 Consolidated statement of comprehensive COMPANY INFORMATION AT 31 DECEMBER 2009 income 69 Consolidated balance sheet 70 Shareholders holding at least Consolidated statement of changes in equity 72 5% of the shares: Consolidated cash flow statement 73 Notes 74 The Danish Ministry of Finance 72.98%* SEAS-NVE Holding A/S 10.88% Syd Energi Net A/S 6.95% CONSOLIDATED NON-FINANCIAL STATEMENTS 162 * At 12.02.2010, the Danish Ministry of Finance held 74.04% of the shares PARENT COMPANY FINANCIAL STATEMENTS 167 Responsible Energy 2009 can be ordered MANAGEMENT STATEMENT AND INDEPENDENT online or downloaded at dongenergy.com AUDITORS’ REPORT Statement by the Executive and Cover photo Supervisory Boards 199 3.6 MW wind turbines near Avedøre Power Station, Independent auditors’ report, financial 200 Copenhagen Assurance Statement, non-financial 201 Language ADDITIONAL INFORMATION The annual report has been prepared in Danish and in English. In the event of any discrepancies between the Danish and the English Company announcements in 2009 202 annual reports, the Danish version shall prevail. Glossary 203 GRI overview 204 DONG Energy at a glance Cover Company information Cover 541-166 Printed matter PREFACE FAST TRANSITION TO GREEN FUTURE DONG Energy’s activities and financial performance in 2009 were affected by the financial crisis. Extraordinarily low demand for energy led to low prices for our core products: power and natural gas. However, taking a longer-term view, 2009 was also a year of In parallel with this, we have made a decision to suspend vital strategic decision-making that will ensure that DONG operations at four coal-fired power station units, which means Energy will lead the transition to a greener future. We aim to that our capacity at coal-fired power stations will have been reduce CO2 emissions significantly while at the same time reduced by a quarter in just under two years. In addition, we maintaining a high level of security of supply. Wind power, have shelved all new coal power development projects and biomass and natural gas are key elements of this strategy. have begun to explore interesting opportunities for converting power station units from coal to biomass. In 2009, we inaugurated the Horns Rev 2 offshore wind farm, the world’s largest. It joins a whole host of new wind farms in In 2009, we inaugurated one of the world’s first demonstra- Denmark, the UK, Sweden and Poland. They add considerably tion plants for production of second-generation bioethanol to our capacity while at the same time contributing to our based on straw and similar residual products. results already from this year. In 2009, DONG Energy secured the possibility of accelerating and rationalising the construc- Production from the Alve natural gas field commenced in 2009, tion of wind farms through an extensive supply agreement and development of the Ormen Lange field continued as with Siemens Wind Power and the acquisition of the specialist planned. At the same time, discoveries were made in the West of shipping company A2SEA. Shetland area, and the number of new licences was expanded. Natural gas is the second key element in our transition to a Coupled with a significant reduction in costs, the many activi- greener future. Natural gas-fired power stations only emit ties are intended to ensure that we can achieve our ambitious around half the CO2 of coal-fired plants. This year and next target of reducing our carbon intensity as well as our equally year, we will be inaugurating three new natural gas-fired power ambitious growth target. stations in Norway, the UK and the Netherlands respectively. 11 March 2010 Anders Eldrup, CEO Fritz H. Schur, Chairman of the Supervisory Board ManageMENT’S REVIEW 1 DONG Energy is one of the leading energy groups in Northern Europe. We are headquartered in Denmark. Our business is 4.11 Use of the precautionary approach or principle in the organization page 28-29 and Responsible ● LA2 Employee turnover by age group, gender, and region online ● Energy 2009, page 4-7 LA4 Employees covered by collective agreements online ● based on procuring, producing, distributing and trading in en- DONG ENERGY 4.12 Externally developed initiatives to which the organisation endorses online ● LA5 Minimum notice period(s) regarding significant operational changes online ● 4.13 Memberships in associations and advocacy organisations online ● LA7 Rates of occupational disease, absenteeism and fatalities online ● ergy and related products in Northern Europe. We have approxi- 4.14 List of stakeholder groups engaged by the organisation online ● LA8 Programmes in place to assist regarding serious diseases online ● 4.15 Basis for identification and selection of stakeholders with whom to engage online ● LA10 Average hours of training per year per employee online ◗ mately 6,000 employees and generated just under DKK 50 bil- AT A GLANCE ● 4.16 Approaches to stakeholder engagement online LA12 Employees receiving performance and career development reviews online ◗ lion (EUR 6.6 billion) in revenue in 2009. 4.17 Key topics and concerns that have been raised online ● LA13 Composition of governance bodies and employees online ● Given the tough market conditions, EBITDA is considered to be satisfactory. through stakeholder engagement LA14 Ratio of basic salary of men to women online 5. Manangement Approach Furthermore, DONG Energy succeeded in maintaining strong cash flows from Human Rights DMA Management approach, economy Responsible Energy 2009, page 2 ● HR1 Investment agreements that include human rights clauses online ● operating activities. DMA Management approach, environment