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Ørsted’s Board of Directors has approved revisions to the company’s business plan, emphasizing a more focused capital allocation strategy to strengthen its financial structure. The company will concentrate on the most value-accretive growth opportunities through a self-funded investment programme.
In 2024, Ørsted delivered full-year results in line with expectations, achieving an EBITDA of DKK 24.8 billion, excluding new partnerships and cancellation fees. Additionally, the company commissioned 2.4 GW of renewable capacity, secured 3.5 GW of offshore wind capacity in the UK, and recently made the final investment decision on the Baltica 2 offshore wind farm in Poland. These milestones mark significant strategic progress.
However, despite meeting financial expectations and advancing strategically, Ørsted has faced challenges, particularly concerning its US offshore wind portfolio, which has further pressured its credit metrics. Combined with broader industry challenges in the renewable sector, this has led Ørsted to scale down its investment programme for 2030 by approximately 25% compared to its previous strategic ambitions on a like-for-like basis. This reduction aligns with the company’s commitment to maintaining a capital structure that supports a solid investment-grade credit rating.
Ørsted CEO Rasmus Errboe emphasizes a stricter, value-driven capital allocation to strengthen the balance sheet and maintain an investment-grade rating. The top priority is delivering the 8.4 GW offshore wind expansion, reinforcing Ørsted’s leadership. He reaffirms confidence in offshore wind’s long-term value, driven by the expected doubling of global electricity demand by 2050.
Ørsted aims to improve credit metrics through a self-funded business plan, reducing investments, executing projects as planned, and advancing divestments. Funding will come from operating cash flow, partnerships, tax equity, and debt issuances, without new equity.
The company will focus on high-value geographies and technologies while enhancing efficiency beyond the DKK 1 billion savings plan of 2024. With a slower construction pace, Ørsted will continuously optimize costs and organizational size. These adjustments will not impact the ongoing construction of 9 GW of renewable projects, supporting capacity growth from 18 GW to over 27 GW.
Adjusted investment programme, financial targets, and financial policies
With the adjustments to its business plan, Ørsted has the following financial targets and policies:
- Ørsted plans a DKK 210-230 billion investment programme in the period 2024-2030.
- Ørsted maintains its target of an unlevered, fully loaded lifecycle IRR at 150-300 bps spread to WACC when we bid in tenders or take FIDs (whichever comes first).
- Ørsted expects EBITDA (excluding new partnerships and cancellation fees) to increase to approx. DKK 29-33 billion in 2026.
- Ørsted expects a return on capital employed (ROCE) of approx. 13 % on average in the period 2024-2030.
- Ørsted continues to be committed to a solid investment grade credit rating.
- Ørsted maintains its target to reinstate dividends from the financial year 2026.
The previous ambition for installed renewable capacity of 35-38 GW by 2030 and the targeted EBITDA (excluding new partnerships) of approx. DKK 39-43 billion in 2030 have been discontinued.
