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for the period ended 30 June 2015 This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Centrica shares or other securities. This presentation contains certain forward-looking

slide-1
SLIDE 1

for the period ended 30 June 2015

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SLIDE 2

This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Centrica shares or other securities. This presentation contains certain forward-looking statements with respect to the financial condition, results, operations and businesses of Centrica plc. These statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

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SLIDE 3

Chief Executive

slide-4
SLIDE 4

4 INTERIM RESULTS 2015

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

Rick k Haythor hornth nthwait waite

Chairman

Iain Conn

Chief Executive

Jeff Bell

Chief Financial Officer

Jill l Shedden en

Group Director, Human Resources

Ian Peters s Director,

Customer Facing Strategy

Grant Grant Dawson

  • n Group General

Counsel & Company Secretary

Mark Hanafin fin

Managing Director, Centrica Energy

Mark Hodges

Managing Director, British Gas

Badar Badar Khan President

and CEO, Direct Energy

Nick k Baird rd Group

Corporate Affairs Director

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SLIDE 5

5

09:00-10:00 Interims presentation and Q&A 10:00-10:20 Break 10:20-12:30 Strategy presentation and Q&A 12:30-13:30 Buffet lunch

INTERIM RESULTS 2015

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 6

6

  • Commodity prices
  • UK General Election
  • Competition and Markets Authority investigation

INTERIM RESULTS 2015

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 7

7

  • Earnings up 15%; EPS of 12.3p; operating cash flow of £1.1bn
  • Good progress in strengthening balance sheet and financial

metrics

  • Full year outlook broadly unchanged
  • Senior Management team changes
  • Strategic review complete

INTERIM RESULTS 2015

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 8

Chief Financial Officer

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SLIDE 9

9 INTERIM RESULTS 2015

The above adjusted figures are before depreciation of fair value uplifts to property, plant and equipment from Strategic Investments and exceptional items and certain re-measurements. Adjusted operating profit also includes share of JVs and associates before interest and taxation. A definition of the adjusted effective tax rate is provided in the Group Financial Review in the Interim Results announcement.

Period ended 30 June H1 2015 H1 2014 ∆%

Revenue (£m) 15, 5,451 451 15,748 (2%) Adjusted operating profit (£m) 1,000 000 1,032 (3%) Adjusted effective tax rate 29% 29% 37% (8ppt) Grou

  • up

p result lt: Adjusted earnings (£m) 611 611 530 15% Adjusted earnings per share (p) 12. 2.3 10.5 17% Interim dividend per share (p) 3.57 57 5.10 (30%) Period ended

Jun 2015 Dec 2014 ∆%

Net debt (£m) 4,905 905 5,196 (6%)

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 10
  • 10

10 20 30 40 50 60

Jan Jan 14 Jul Jul 14 14 Jan Jan 15 Jul Jul 15 15 Jan Jan 16 Jul Jul 16 16

10 20 30 40 50 60 70 80

Jan Jan 14 Jul Jul 14 14 Jan Jan 15 Jul Jul 15 15 Jan Jan 16 Jul Jul 16 16

20 40 60 80 100 120 140

Jan Jan 14 Jul Jul 14 14 Jan Jan 15 Jul Jul 15 15 Jan Jan 16 Jul Jul 16 16

10 10 INTERIM RESULTS 2015

Aver erage age month h ahead ad Brent nt oil price e ($/boe)

Prices as at 29 July 2015

UK Power wer (£/MWh)

Aver erage age month h ahead ad gas prices es UK power r prices es and clean an dark and and clean an spar ark spread ads

Clean spark rk sprea read (£/MWh) Clean dark rk sprea read (£/MWh) UK Gas s (p/therm) US Gas s (p/therm)

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 11

11 11 INTERIM RESULTS 2015

2015 5 average age UK temper eratur ature

(degrees Celsius)

Colder than normal Warmer than normal Seasonal normal temperature

2015 5 average age US North East t temperat eratur ure

(degrees Celsius)

5 10 15 20 25 Jan Jan Feb Feb Mar ar Apr pr May ay Jun Jun

  • 20
  • 10

10 20 30 Jan Jan Feb Feb Mar ar Apr pr May ay Jun Jun 2014 temperature

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 12

12 12 INTERIM RESULTS 2015

Period ended 30 June (£m)

H1 2015 15 H1 2014 ∆% British Gas 656 656 455 44% Direct Energy 192 192 41 368% Bord Gáis Energy 23 23

  • nm

Centrica Energy 116 116 526 (78%) Centrica Storage 13 13 10 30% Adjus justed ed opera eratin ing g prof

  • fit

it 1,000 000 1,032 (3%)

Share of JV / associates’ interest and taxation (51) (63) nm Depreciation of FV uplifts to property, plant and equipment (24) 4) (40) nm

Grou

  • up

p oper erat ating ing prof

  • fit

it 925 925 929 (0%)

The above operating profit figures include share of JVs and associates before interest and taxation and are before depreciation of fair value uplifts to property, plant and equipment from Strategic Investments and exceptional items and certain re-measurements. FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 13

13 13 INTERIM RESULTS 2015

Opera ratin ing profi fit (£m)

Period ended 30 June

H1 2015 15 H1 2014 ∆% Residential energy 528 528 265 99% Residential services 125 125 129 (3%) Business 3 61 (95%) Brit itis ish Gas Gas 656 656 455 44%

The above operating profit figures include share of JVs and associates before interest and taxation and are before depreciation of fair value uplifts to property, plant and equipment from Strategic Investments and exceptional items and certain re-measurements.

Resid identi tial l energ rgy revenue (£m) and post tax marg rgin in (%) Resid identi tial l serv rvices ices revenue (£m) and post tax marg rgin in (%) Busin iness revenue (£m) and post tax marg rgin in (%)

4,551 H1 H1 2015 H1 H1 2014 802 802 804 804 H1 H1 2015 H1 H1 2014 1,573 H1 H1 2015 H1 H1 2014 12.5% 12.6% 3.0% 0.1% 1,421 4,691 9.0% 4.5%

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 14

223 223 256 256 H1 H1 2015 H1 H1 2014 4,814 H1 H1 2015 H1 H1 2014 1,399 H1 H1 2015 H1 H1 2014

14 14 INTERIM RESULTS 2015

Period ended 30 June

H1 2015 15 H1 2014 ∆% Residential energy (underlying) 67 67 80 (16%) Business energy (underlying) 143 143 12 1,092% Services (18) 8) 14 nm Direc ect Energy ergy (underlying) 192 192 106 81% Polar Vortex impact

  • (65)
  • Direc

ect Energy ergy 192 192 41 368%

Opera ratin ing profi fit (£m)

The above operating profit figures include share of JVs and associates before interest and taxation and are before depreciation of fair value uplifts to property, plant and equipment from Strategic Investments and exceptional items and certain re-measurements. The 2014 residential energy and business energy operating profit includes one-off costs associated with the polar vortex.

Resid identi tial l energ rgy revenue (£m) and post tax marg rgin in (%) Busin iness energ rgy revenue (£m) and post tax marg rgin in (%) Serv rvic ices revenue (£m) and post tax marg rgin in (%)

1,204 3.0% 2.1% 4,475 1.9% 3.9%

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

(0.3%) (4.9%)

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SLIDE 15

400 400 H1 H1 2015 0.9 H1 H1 2015

15 15 INTERIM RESULTS 2015

Opera ratin ing profi fit (£m)

Period ended 30 June

H1 2015 15 H1 2014 ∆% British Gas 656 656 455 44% Direct Energy 192 192 41 368% Bord Gáis Energy 23 23

  • nm

Centrica Energy 116 116 526 (78%) Centrica Storage 13 13 10 30% Adjus justed ed opera eratin ing g prof

  • fit

it 1,000 000 1,032 (3%)

1.9

The above operating profit figures include share of JVs and associates before interest and taxation and are before depreciation of fair value uplifts to property, plant and equipment from Strategic Investments and exceptional items and certain re-measurements.

Genera ratio ion (TWh) Revenue (£m) and post tax marg rgin in (%)

5.0% 1.1

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 16

16 16

  • GAS

INTERIM RESULTS 2015

Period ended 30 June (£m)

H1 2015 15 H1 2014 ∆% Operating profit before tax 48 48 465 (90%) Operating profit after tax (23) 3) 235 nm

The above operating profit figures include share of JVs and associates before interest and taxation and are before depreciation of fair value uplifts to property, plant and equipment from Strategic Investments and exceptional items and certain re-measurements. A definition of operating profit after taxation is included in note 4b of the Interim Results announcement.

Avera rage gas sales pric ice

Euro rope (p/therm) Ameri rica cas s (US$/mmbtu)

Avera rage liquid id sale les pric ice

Euro rope (£/boe) Ameri rica cas s (US$/boe) 48.8 .8 56.0 .0 H1 H1 2015 H1 H1 2014 2.3 4.0 H1 H1 2015 H1 H1 2014 40.3 .3 59.9 .9 H1 H1 2015 H1 H1 2014 44.7 .7 78.6 .6 H1 H1 2015 H1 H1 2014

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 17

17 17

  • E&P VOLUMES AND COSTS

INTERIM RESULTS 2015

Productio ion volume mes

1

Gas s (mmth) Liqu iquids ids (mmboe)

Europ

  • pe

Americas

  • 1. Production volumes include 100% share of Canadian assets owned in partnership with Qatar Petroleum.

Tota tal l unit t producti tion costs

Euro rope (£/boe) Ameri rica cas s (US$/boe) Tota tal l (£/boe)

DDA Costs Lifting & other production costs

7.5 7.5 1.5 1.2 H1 H1 2015 H1 H1 2014 1,196 810 749 H1 H1 2015 H1 H1 2014 11.8 .8 12.5 .5 15.6 14.6 H1 H1 2015 H1 H1 2014 7.4 8.7 12.5 15.4 H1 H1 2015 H1 H1 2014 9.3 10.0 .0 12.9 12.8 H1 H1 2015 H1 H1 2014 1,11 118

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 18

H1 H1 2015 H1 H1 2014 H1 H1 2015 H1 H1 2014 H1 H1 2015 H1 H1 2014

18 18

  • POWER

INTERIM RESULTS 2015

Opera ratin ing profi fit (£m)

Period ended 30 June

H1 2015 15 H1 2014 ∆%

Gas-fired (62) (70) nm Renewables 18 18 (17) nm Nuclear 108 125 (14%) Midstream 4 23 (83%)

Power er 68 68 61 11%

The above operating profit figures include share of JVs and associates before interest and taxation and are before depreciation of fair value uplifts to property, plant and equipment from Strategic Investments and exceptional items and certain re-measurements. Renewables includes a net loss of £40m in H1 2014 relating to the write-down of our interest in the Celtic Array offshore wind development.

3.3 3 TWh 4.1 1 TWh £9.8/ MWh £12.0/ MWh 6.1 1 TWh 6.2 2 TWh £51.0/ MWh £49.7/ MWh

Gas-fir ired genera ratio ion (TWh) & achie ieved clean spark spre read Nucle lear generati tion (TWh) & achie ieved pric ices

0.4 4 TWh 0.5 5 TWh £113.2/ MWh £118.2/ MWh

Renewable les genera ratio ion (TWh) & achie ieved pric ices (incl. ROCs)

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 19

19 19 INTERIM RESULTS 2015

Opera ratin ing profi fit (£m)

Period ended 30 June

H1 2015 15 H1 2014 ∆% British Gas 656 656 455 44% Direct Energy 192 192 41 368% Bord Gáis Energy 23 23

  • nm

Centrica Energy 116 116 526 (78%) Centrica Storage 13 13 10 30% Adjus justed ed opera eratin ing g prof

  • fit

it 1,000 000 1,032 (3%)

Stora rage revenue (£m)

SBU SBU Addition

  • nal

al space ce /

  • the

her

The above operating profit figures include share of JVs and associates before interest and taxation and are before depreciation of fair value uplifts to property, plant and equipment from Strategic Investments and exceptional items and certain re-measurements.

2 4 6 8 10 12

Jan an 12 12 Jan an 13 13 Jan an 14 14 Jan an 15 15

Forw rward rd seasonal l gas sprea reads (p/therm)

Prices as at 29 July 2015

W14 – S14 s spread W15 – S15 spread W13 – S13 s spread W16 – S16 spread

46 46 50 50 25 25 20 20 H1 H1 2015 H1 H1 2014

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 20

20 20 INTERIM RESULTS 2015

Period ended 30 June (£m)

H1 2015 15 H1 2014 FY 2015e

3

Centrica Energy gas and oil 424 424 556 800 Direct Energy 45 45 46 75 British Gas 41 41 78 100 Centrica Storage 14 14 13 25 Centrica Energy power

1

37 25 Other 3 8 25 Total pre-acquisitions 527 527 738 1,050 Acquisitions / (disposals)

2

(144 44) (329) Net inv nves estment nt 383 383 409

  • 1. Centrica Energy Power includes investments in wind farm JVs.
  • 2. Acquisitions/ disposals in H1 2015 include the disposal of Lincs wind farm debt and the acquisition of AlertMe. Acquisitions / disposals in H1 2014 include the disposal of three Texas

CCGTs, the disposal of an interest in the Greater Kittiwake Area E&P assets, the acquisition of a package of Canadian assets from Shell and the acquisition of Bord Gáis Energy in Ireland.

  • 3. Latest guidance for 2015.

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 21

21 21 INTERIM RESULTS 2015

Period ended 30 June (£m)

H1 2015 15 H1 2014 FY 2014 EBITDA 1,444 444 1,501 2,811 Working capital movements (97) 7) 161 (37) Tax (144 44) (413) (707) Dividends received 65 65 43 138 Other1 (119 19) (6) (4) Adjusted operating cash flow 1,149 149 1,286 2,201 Net investment (383 83) (409) (829) Interest (88) 8) (111) (261) Dividends (238 38) (605) (864) Share repurchase

  • (207)

(422) Other2 (83) 3) (13) (80) Net cash inflow / (outflow) 357 357 (59) (255)

  • 1. Other includes re-measurement of energy contracts, profit on disposal of business, employee share scheme costs, movement on provisions and defined benefit pension service cost and normal

contributions.

  • 2. Other includes net payments for own shares, net foreign exchange movement on financing activities, payments relating to exceptional charges and defined benefit pension deficit payments.

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 22

22 22 INTERIM RESULTS 2015

  • 1. H1 2014 net debt has been restated to include cash posted or received as collateral under margin and collateral agreements, to more accurately reflect management’s view of net debt.

The items, to which the cash posted or received as collateral under margin and collateral agreements relate, are not included within net debt. For further details see note 12 of the Interim Results announcement.

Period ended 30 June (£m)

H1 2015 15 H1 2014 FY 2014 Opening net debt (5,196 5,196) (4,942) (4,942) Net cash inflow / (outflow) 357 357 (59) (255) Other non cash movements in net debt (66) 6) 34 1 Closing net debt

1

(4, 4,905 905) (4,967) (5,196) Margin cash (465) (230) (776) Closing net debt excluding margin cash posted (5,370) (5,197) (5,972)

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 23

23 23

  • H1 earnings up 15%
  • Operating cash flow of £1.1bn
  • Good progress on reducing net debt and improving credit metrics
  • Full year outlook broadly unchanged

INTERIM RESULTS 2015

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 24

Chief Executive

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SLIDE 25

25 25

  • Low wholesale commodity prices
  • Colder than normal weather
  • Highly competitive market
  • Operational performance generally strong
  • UK General Election
  • CMA investigation

INTERIM RESULTS 2015

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

slide-26
SLIDE 26

26 26

  • Wide-ranging review
  • Agree with most conclusions
  • Some questions and concerns
  • Active discussions ongoing

INTERIM RESULTS 2015

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

slide-27
SLIDE 27

27 27

CUSTOMER-FACING BUSINESSES

  • Safety, compliance and customer service
  • Energy supply market shares broadly stable
  • UK and Ireland gas pricing
  • UK services accounts down; North America stable
  • Billing issues in BGB
  • Focus on value in North America

INTERIM RESULTS 2015

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 28

28 28

E&P AND POWER

  • Safety and compliance
  • E&P production broadly flat compared to 2014
  • Valemon field on-stream in January 2015
  • Cygnus first gas in H1 2016
  • Good nuclear generation volumes

INTERIM RESULTS 2015

OPERATIONAL PERFORMANCE

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

slide-29
SLIDE 29

29 29

  • 1.5m residential UK smart meters installed
  • Acquisition of AlertMe; Hive 2 launched
  • Accelerated investment in US solar
  • FID on fifth train at Sabine Pass LNG facility
  • UK gas-fired portfolio rationalisation

INTERIM RESULTS 2015

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

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SLIDE 30

30 30

  • Solid first half performance
  • Positive net cash flow
  • Good progress on balance sheet
  • Strategic review complete
  • Clear purpose, direction and priorities

INTERIM RESULTS 2015

FINANCIAL PERFORMANCE OPERATIONAL PERFORMANCE INTRODUCTION

slide-31
SLIDE 31

31 31 INTERIM RESULTS 2015

Iain in Conn

Chief Executive

Jeff ff Bell

Chief Financial Officer

Mark rk Hanafi fin

Managing Director, Centrica Energy

Mark rk Hodges

Managing Director, British Gas

Badar Khan

President and CEO, Direct Energy

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SLIDE 32

30 July 2015

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SLIDE 33

This presentation does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Centrica shares or other securities. This presentation contains certain forward-looking statements with respect to the financial condition, results, operations and businesses of Centrica plc. These statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

33 33 STRATEGY PRESENTATION July 2015

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SLIDE 34

Chief Executive

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SLIDE 35

35 35 STRATEGY PRESENTATION July 2015

Group financial framework Operating capability and efficiency Portfolio mix and capital intensity Outlook and sources of growth

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

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SLIDE 36

36 36

  • Market trends and environment

− changes in global oil and gas markets − changing trends in demand and customer behaviour

  • Medium term view
  • Sources of potential growth

STRATEGY PRESENTATION July 2015

Outlook and sources of growth

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-37
SLIDE 37

37 37

  • Upstream / downstream mix
  • Focus areas for growth
  • Investment priorities
  • Capital intensity

STRATEGY PRESENTATION July 2015

Portfolio mix and capital intensity

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-38
SLIDE 38

38 38

  • Capabilities assessed
  • Efficiency benchmarked
  • Material efficiency opportunities identified

STRATEGY PRESENTATION July 2015

Operating capability and efficiency

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-39
SLIDE 39

39 39

  • Robust financial framework
  • Medium term expectations for:

− growth − returns − reinvestment − distributions − credit rating

STRATEGY PRESENTATION July 2015

Group financial framework

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

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SLIDE 40

40 40

  • Centrica well positioned
  • Strengths lie in being a customer facing business
  • Purpose – “to provide energy and services to satisfy the changing

needs of our customers”

  • Increase shareholder value through returns and growth
  • Growth = post-tax operating cash flow growth
  • Focus on cash flow, not necessarily on expansion

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-41
SLIDE 41

41 41

  • 3-5% post-tax operating cash flow growth to 2020 and beyond
  • Flat real oil and gas prices

− $70/barrel Brent oil − 50p/therm UK gas

  • Normal weather patterns
  • Excludes major inorganic activity and one-off costs

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-42
SLIDE 42

42 42

CONTINUED

  • Customer-facing focus

− additional £1.5bn resource allocation to 2020

  • Smaller E&P and central thermal generation businesses

− reduction of £1.5bn resource allocation to 2020

  • Less capital-intense business model
  • Efficiency programme to deliver £750m of annual savings by 2020

− Group operating cost base in 2020 below 2015, net of inflation and growth

  • Clear financial framework

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-43
SLIDE 43

43 43

  • Operating cash flow growth of 3-5% per annum
  • Progressive dividend reflecting operating cash flow growth
  • Capital limited to £1bn per annum in near term and to 70%
  • f operating cash flow longer term
  • Underpinning dividend and credit ratings
  • Post-tax ROACE of 10-12%

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-44
SLIDE 44

44 44

  • Primary energy demand growth
  • Fastest growing contributors will be

natural gas, nuclear and renewables

  • Divergence of CO2 from energy growth
  • Fossil fuels still important
  • Growth in LNG trade and energy marketing

and trading

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-45
SLIDE 45

45 45

CONTINUED

  • OECD central power generation ‘market failure’
  • Distributed generation likely to take market share
  • Energy supply demand in core markets at best flat
  • Energy services a source of differentiation
  • ‘Internet of Things’ developing rapidly

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

STRATEGY PRESENTATION July 2015

slide-46
SLIDE 46

46 46

“To provide energy and services to satisfy the changing needs of our customers”

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

STRATEGY PRESENTATION July 2015

slide-47
SLIDE 47

47 47

CONTINUED

  • Energy and services company
  • Deliver for the changing needs of our customers
  • Delivering long-term shareholder value through

returns and cash flow growth

  • Trusted corporate citizen
  • Employer of choice
  • A “21st century energy company”

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

STRATEGY PRESENTATION July 2015

slide-48
SLIDE 48

48 48

  • Customer-facing businesses a source of

competitive advantage

  • Energy supply cash flow broadly flat

− competitive market for British Gas − market share growth in North America and Ireland

  • Stable E&P remains a material source of cash flow
  • Near term growth underpinned by efficiencies; longer

term growth through investment in growth areas

  • Operating cash flow growth of 3-5% per annum until

2020

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-49
SLIDE 49

49 49

  • Energy supply
  • Services
  • Distributed Energy and Power
  • Connected Home
  • Energy Marketing and Trading

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-50
SLIDE 50

50 50

Consumption Competitive environment Current market share

UK UK market ket enviro ronment nment

Service excellence

Re Response se

Innovative

  • fferings

Cost efficiency Working capital management

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

– UK AND IRELAND ENERGY SUPPLY

STRATEGY PRESENTATION July 2015

slide-51
SLIDE 51

51 51

Consumption Competitive environment Current market share

No North th Ameri rica ca market ket enviro ronment nment

Improved propositions and customer mix

Re Response se

Lower churn Cost efficiency Working capital management

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

– NORTH AMERICA ENERGY SUPPLY

STRATEGY PRESENTATION July 2015

slide-52
SLIDE 52

200 400 600 800

2013 2013 2014 2014

52 52

  • Increased scale following Hess Energy

Marketing acquisition

  • Market leading position in provision of energy

to business customers

  • Optimisation opportunities around capacity

and storage positions

Gas Gas Powe wer Powe wer

Bcf

US business ness suppl ply volum umes es

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

– NORTH AMERICA BUSINESS ENERGY SUPPLY

STRATEGY PRESENTATION July 2015

slide-53
SLIDE 53

53 53

Insurance urance contra tract cts s On On-dema mand Landlord

  • rds

Effi ficie ciency cy

  • Focus on refreshing core offerings to hold value in a mature market
  • Low current market share in mature market
  • Proportion of private tenants growing
  • Increase in regulation driving need for insurance cover
  • Efficiency opportunities

Installatio tallation

  • Mature market, shift from complex to simpler boiler replacements
  • Connected boiler opportunity

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

– UK SERVICES

STRATEGY PRESENTATION July 2015

slide-54
SLIDE 54

54 54

Protectio tection n plans Connect cted homes Solar Effi ficie ciency cy

  • Growth potential in a fragmented ‘on demand’ market
  • Customer appetite for bundling with energy offerings
  • Partnerships, leverage leading UK position
  • Significant growth expected in US residential solar market
  • Benefits from IT projects and operational improvements from scale

Franchise nchise

  • Revenue growth opportunity

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

– NORTH AMERICA SERVICES

STRATEGY PRESENTATION July 2015

slide-55
SLIDE 55

55 55

Distri tribu buted ted Energy gy Assets ets

Flexib ible le Generatio ration New Technolo logy Energy rgy Eff fficie iciency

1 2 3 Solar PV Combined Heat & Power (CHP) Lighting Gas engine Diesel generator Battery storage Future technology Optimisation

Energy rgy control trol centre re Opti timis misatio ion

4 5

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

– DISTRIBUTED ENERGY

STRATEGY PRESENTATION July 2015

slide-56
SLIDE 56

56 56

New information on their existing energy usage, needs and audits Right-sized measures and installation fit for the customers usage needs Access new revenue sources and reduce energy bill Tailored energy bill; access to PPAs, innovative financing arrangements A guarantee of performance on new installations

Consult ltatio ion Defin ine & desig ign Imple lemen mentati tion O&M Opti timis misatio ion Addit itio ional l serv rvices ices

Reduced need for customer resources to perform O&M activity

Centric trica capabil ilit itie ies What t do custome mers rs want? t? Custo tome mer journ rney

£700m m investmen stment t over r next t five e years

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

STRATEGY PRESENTATION July 2015

slide-57
SLIDE 57

57 57

Gas Lighting Electrical appliances Consumer electronics Water Ventilation / air conditioning Electricity Plumbing & Drains Electrical wires Insulation & Glazing Security

Danger alerts

Broadband EV charging Micro-generation Energy storage (battery) Property Insurance Heating Non-heat gas appliances Entertainment (e.g. TV, music) Telephony Gas pipes & gas safety Integration & optimisation Intelligent tech platform Heartland Energy adjacencies Other adjacencies New technology Non-core

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

– THE CONNECTED HOME

STRATEGY PRESENTATION July 2015

slide-58
SLIDE 58

58 58

Scale

  • Large customer base
  • High volume of customer data

Brand

  • In both energy & services
  • Potential to build global connected

consumer brand (Hive) Capabilitie ities

  • Existing engineer workforce, both UK &

US

  • Multi-channel sales & support
  • Platform (AlertMe), product development &

analytics capabilities

  • Only provider offering end-to-end delivery

capabilities

Produc uct bundl dling ng Standal ndalon

  • ne

e sales es & instal tallati ation

  • n

Subscript ption

  • n services

es Data Data analytics & insight ght for 3rd

rd parties

es Produc uct & platfor form services es for 3rd

rd parties

es Complete ete home e energy rgy manageme agement nt soluti ution

  • n

a b c d e f

£500m m investmen stment t over r next t five e years

Pathways ways to success ccess

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

STRATEGY PRESENTATION July 2015

slide-59
SLIDE 59

59 59

  • Good benchmarked capability
  • Cheniere US export contract
  • Route-to-market services
  • Detailed knowledge of European gas and

power markets

  • International marketing and trading capability

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

– ENERGY MARKETING AND TRADING

£150m m investmen stment t over r next t five e years

slide-60
SLIDE 60

60 60

  • Shift of resource allocation from E&P and power to

customer-facing activities

  • £1.5 billion additional resources in customer-facing

growth areas − approximately half capex, half opex

  • Lower capital intensity
  • Capital discipline

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-61
SLIDE 61

61 61 STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-62
SLIDE 62

62 62

  • Diversification of cash flows
  • Balance sheet strength to manage risk
  • Role evolved away from security of supply

and integration

  • Appropriately scaled position
  • Sufficient capability to participate effectively
  • Concentrate on fewer geographies

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-63
SLIDE 63

63 63

  • Size limited to 40-50mmboe per annum
  • £400m-£600m per annum of capex
  • Includes possible small inorganic additions

post 2017

  • Restoration of E&P margins a source of

growth

  • Strong E&P business sustainable within

reduced scale

STRATEGY PRESENTATION July 2015

75 75 2014 2015 Fu Future re 80 80 40 40-50 50 £1.1 .1bn £800 00m £400- 600m 2014 2015 Fu Future re

Productio ion (mmboe) Capex

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-64
SLIDE 64

64 64

  • Currently in five countries
  • Improve efficiencies in UK and

Netherlands

  • Continue to develop Norwegian

assets

  • Release capital from Trinidad and

Tobago

  • Canadian E&P business non-core

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

Canada Europe pe Trinida nidad & Tobago go

slide-65
SLIDE 65

65 65

  • More focused central power generation business
  • Retain sufficient capability
  • Each station considered on a plant-by-plant basis
  • Capabilities transitioned towards distributed

energy

  • New Distributed Energy and Power business unit

established

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

STRATEGY PRESENTATION July 2015

slide-66
SLIDE 66

66 66

  • Diversity of cash flows and balance sheet

strength

  • Limited optionality
  • Future value dependent on

− operational excellence − life extensions − effective cost management − capacity market

  • Nuclear shareholding considered as a financial

investment

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-67
SLIDE 67

67 67

  • Exit our 245MW portfolio of wind assets
  • Scale not material
  • New offshore wind expensive
  • No future potential projects

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-68
SLIDE 68

68 68

  • Hold the Rough gas storage asset
  • Not seen as a growth option given

low seasonal gas spreads

  • Focus on completing the

assessment of operating integrity

  • Strategic storage asset for the UK

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-69
SLIDE 69

69 69

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

Group financial framework Operating capability and efficiency Portfolio mix and capital intensity Outlook and sources of growth

STRATEGY PRESENTATION July 2015

slide-70
SLIDE 70

4.2

2015 2015 Inf nflat lation ion Ef Effic icienc iency 2020 2020 Grow Growth

70 70

  • Gross efficiencies of £750m per annum by 2020
  • Efficiency programme excludes

− cost of smart metering − major acquisitions or disposals − additional investment in growth areas

  • Like-for-like opex base down £300m after

taking account of inflation

  • 2020 opex at or below 2015 including

additional investment in growth areas

STRATEGY PRESENTATION July 2015

SUMMARY SUMMARY OUTLOOK AND

SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

  • £300m

£300m

slide-71
SLIDE 71

2015 2015 2018 2018 2020 2020

71 71

  • Boundaries – safety, compliance and

customer service

  • Two-thirds of efficiencies by end

2018

  • Required investments of £500m-

£600m over next five years

STRATEGY PRESENTATION July 2015

Realised ed efficienc ency savings ngs

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

Infl nflat ation

  • n

Underl erlyi ying g operat erating ng cost st base

  • £500m

£500m

  • £750m

£750m

slide-72
SLIDE 72

72 72

  • Customer facing businesses

− back office simplification, consolidation and automation − front office simplification and optimisation − sales efficiencies − shared services for marketing and network services

  • Centrica Energy simplification and efficiency
  • Group functions and corporate centre
  • Procurement and supply chain efficiencies

STRATEGY PRESENTATION July 2015

SUMMARY SUMMARY OUTLOOK AND

SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-73
SLIDE 73

73 73

Inves est t in service e excel ellenc ence e Increase ease efficienc ency and optimi mise e working ng capital al Deepen en customer

  • mer relati

tions

  • nshi

hips ps Transfor form m current ent energy gy and services es offers Devel elop

  • p talent

nt

Commo mmon n stra rateg egic ic prior iorities ies acr cross

  • ss our

ur cus ustom

  • mer

er-facing facing busin sinesse esses Leading ading to the same me 5 c cor

  • re

e pro roposi positions ions

  • We help you to use energy efficiently
  • We give you peace of mind
  • We help you conveniently control your devices
  • We supply your energy needs
  • We service your home / business

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

STRATEGY PRESENTATION July 2015

slide-74
SLIDE 74

74 74

  • Reduction in like-for-like headcount of around 6,000 roles

− half attrition − half redundancy

  • Redundancies mainly by 2017
  • 2,000 roles created through growth
  • Net reduction of 4,000 roles

STRATEGY PRESENTATION July 2015

SUMMARY SUMMARY OUTLOOK AND

SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-75
SLIDE 75

75 75

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

Group financial framework Operating capability and efficiency Portfolio mix and capital intensity Outlook and sources of growth

STRATEGY PRESENTATION July 2015

slide-76
SLIDE 76

Chief Financial Officer

slide-77
SLIDE 77
  • ROACE
  • 10-12%

77 77 STRATEGY PRESENTATION July 2015

  • Operating cash flow
  • 3-5% growth p.a.
  • Dividend
  • Progressive in line with operating cash flow
  • Controllable costs
  • Cost growth < inflation
  • Capital re-investment
  • Investment <70% of Operating cash flow
  • Limited to £1bn p.a. in 2016-17
  • Credit rating
  • Strong investment grade

(Baa1/BBB+ or above)

Targe gets ts Metrics rics

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-78
SLIDE 78

78 78

  • Operating cash flow most appropriate measure of

business performance − underpins dividend and credit rating − fundamental driver of shareholder value

  • Deliver £300m-£600m of incremental cash flow by 2020

− ~£2bn current operating cash flow − 3-5% growth rate range − $70/barrel Brent oil, 50p/therm UK gas

  • Excludes one-time cost to achieve of £500m-£600m

− will disclose separately

STRATEGY PRESENTATION July 2015

c£2bn

2015 2015 2020 2020

£300m- £600m

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-79
SLIDE 79

2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020

79 79 STRATEGY PRESENTATION July 2015

Energy rgy Supply ly E&P E&P Servi rvice ces, s, Distri tribute ted Energy rgy and Power, wer, Connecte cted Homes, s, Energy rgy Marke ketin ting and Tradin ing

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

3-5%

slide-80
SLIDE 80

80 80

  • Strong investment grade credit

ratings important for Centrica − large user of collateral − efficient procurement of energy − cost effective short term sources of liquidity

STRATEGY PRESENTATION July 2015

SUMMARY SUMMARY OUTLOOK AND

SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

Current Stron

  • ng

investmen stment t grade Baa1 BBB+ B+ A-

(negative outlook)

Baa1

(stable outlook)

slide-81
SLIDE 81

81 81 STRATEGY PRESENTATION July 2015

SUMMARY SUMMARY OUTLOOK AND

SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

E&P (including maintenance) Rest st of Group maint intenance ce capex Additio itional inve vestmen stment t consiste sistent t with th financia cial l framewo work Pote tential tial to inve vest st in growth wth areas £1bn £800m £400m- £600 00m £250m £200m- £300m

2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020

slide-82
SLIDE 82

82 82 STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

2014 2014 2018+ 2018+ 2015 2015 2016 2016 -17 17

EBITDA TDA

Tax and inte tere rest st Divid idends Inve vestme stment

slide-83
SLIDE 83

83 83

  • Progressive dividend policy
  • Dividend linked to sustainable

growth in operating cash flows

  • Scrip alternative retained

− kept under review

STRATEGY PRESENTATION July 2015

Sustainable cash flow growth

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

12.0p 12.0p Re Rebas based d ed dividend dend Futur uture

slide-84
SLIDE 84

84 84

  • Progress measured against parameters set out in strategic review
  • Finalise future reporting in the second half

− reporting segments and key performance indicators − transparency of changes

  • ‘Rules of thumb’ to help understanding of changes to commodity

prices and weather

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-85
SLIDE 85
  • ROACE
  • 10-12%

85 85 STRATEGY PRESENTATION July 2015

  • Operating cash flow
  • 3-5% growth p.a.
  • Dividend
  • Progressive in line with operating cash flow
  • Controllable costs
  • Cost growth < inflation
  • Capital re-investment
  • Investment <70% of Operating cash flow
  • Limited to £1bn p.a. in 2016-17
  • Credit rating
  • Strong investment grade

(Baa1/BBB+ or above)

Targe gets ts Metrics rics

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-86
SLIDE 86

Chief Executive

slide-87
SLIDE 87

87 87

  • Energy and services company
  • Purpose – “to provide energy and services to satisfy the changing needs
  • f our customers”
  • Long term shareholder value through returns and growth
  • 3-5% per annum operating cash flow growth
  • £750m per annum cost efficiency programme
  • Growth focus on customer-facing businesses and reduce scale in E&P

and central power generation − £1.5bn resource reallocation to 2020

  • Progressive dividend policy and strong investment grade credit rating

STRATEGY PRESENTATION July 2015

SUMMARY OUTLOOK AND SOURCES OF GROWTH OPERATING CAPABILITY AND EFFICIENCY GROUP FINANCIAL FRAMEWORK PORTFOLIO MIX AND CAPITAL INTENSITY

slide-88
SLIDE 88

88 88 STRATEGY PRESENTATION July 2015

Iain in Conn

Chief Executive

Jeff ff Bell

Chief Financial Officer

Mark rk Hanafi fin

Managing Director, Centrica Energy

Mark rk Hodges

Managing Director, British Gas

Badar Khan

President and CEO, Direct Energy