Futures Energy Prices

20th March, 2013

Ryan O’ Neill

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About Schneider Electric

Global Company

●Headquartered in France

● 175 year history

● $25 Billion in Annual Revenue

●Operating in 140 countries

● 130,000 employees worldwide

● 150 Product Brands

●Ranked 330 on the Fortune

500

Residential 9%

Utilities & Infrastructure 20%

Industrial & machines 24%

Data Centers 17%

Non-residential buildings 30%

Delivering Solutions for End Users

Committed to Innovation

4-5% of sales devoted to R&D

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Schneider Electric – Professional Services

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World View

Source: European Commission

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Overview of Market Place

Source: SEAI

• Heavily dependent on fossil fuels

• Net importer of energy

• Electricity Fuel Mix

• Key driver: Natural gas

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What are you paying for?

Important: This is Indicative only

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Where are energy prices going?

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Price Drivers

• Gas supply & storage

• LNG

• Weather

• Oil

• Economic Growth

• Currencies

• Shale gas?

• Renewables?

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NBP movement (Jan 11 to Feb 13)

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Average 2012 UK NBP Gas Price

Average 2012 Gas Price

52.6p/t

74.3p/t

68.8p/t

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Managing Risk

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How do I manage my exposure?

• This is about your profit margin

• Remaining competitive

• A proactive approach is essential

• Timing is critical

• Business are entering into long term contracts, typically 3 years forward

• Budgetary certainty & market performance, conflicting objectives?

• Both can be achieved with the right tools and expertise

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Dynamic Risk Management

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Summary

• The only certainty is uncertainty, no easy wins

• No cheap energy prices any time soon

• Increasing charges/taxes

• The way we purchase energy needs to change

• Long term view essential for sustainable growth

• Tools and skills are available

• Business needs to leverage these tools and skills, as the benefits are significant

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Thank You

Questions?