Rwe Ag · XETR:RWE
Rwe — Investor Presentation (December 2009)
23 slides from Rwe's investor presentation, Dec 1, 2009
Slide 1: Steady course through stormy Waters
Steady course through stormy Waters Autumn 2009 01.12.2009
Slide 2: Forward Looking Statement
Forward Looking Statement This presentation contains certain forward-looking statements within the meaning of the US federal securities laws. Especially all of the following statements: Projections of revenues, income, earnings per share, capital expenditures, dividends, capital structure or other
Slide 3: Key messages
Key messages Performance > Operating result decreased by 4% Q1-Q3 2009 > Recurrent net income down by 7% Strategy > Essent acquisition closed: EPZ carved out for the time being; sale of Essent’s stake in Stadtwerke Bremen closed in October > Stake in American Water sold > No binding bid for Polish u
Slide 4: More growth, less CO2 - Our strategic roadmap for 2012/13
More growth, less CO2 - Our strategic roadmap for 2012/13 What we aim to do Targets Defend and expand existing margins in GER: defend/grow margins on current volumes RWE key markets Germany and UK UK: defend/grow volumes and profitability Share of non-German operating result grows from Increase leve
Slide 5: Essent matches our strategy and asset portfolios
Essent matches our strategy and asset portfolios … … in Dutch power generation … in Dutch supply Eemshaven (Coal) Electrabel 1% Electrabel 2% Essent generation plant in operation 1,560 MW (2012) E.ON 2% E.ON 2% Other 8% Other 10% Essent new build project Delta 2% Delta 2% RWE new build project Nuon
Slide 6: Besides Essent our focus is on organic growth and selective small M&A outside Germany
Besides Essent our focus is on organic growth and selective small M&A outside Germany Time horizon 2009 - 2012: UK: approx. € 3 billion CCGT new build, offshore wind, nuclear new build BeNeLux: approx. €15 billion Acquisition of Essent (NL), increased stake in Luxembourg, low-carbon generation (Eems
Slide 7: Restrictive CO2 regulation highlights need for further internationalization and access to gas
Restrictive CO2 regulation highlights need for further inter- nationalization and access to gas: We are already on this path Expansion of Benefitting from investor- nuclear activities friendly CO2 allocation in CEE and SEE NDA sites > JV (50/50) with E.ON Wola > Option for 800 MW hard- for at least
Slide 8: Our strategy to reduce the impact of CO2 on our P&L in 2013
Our strategy to reduce the impact of CO2 on our P&L in 2013 Certificates to be Operating Result Offsetting purchased 2008 – 2013 factors in million t p.a. Organic growth/ 160 – 170 +100 High earnings visibility AGR > Expected higher level of power C % and gas wholesale prices – 10 > New build to be
Slide 9: Offsetting factors to reduce the impact of CO2 on our P&L in 2013
Offsetting factors to reduce the impact of CO2 on our P&L in 2013 > Expected higher level of power (>60€/MWh) and gas prices > RWE Innogy: operating result at least €0.5bn p.a. by 2013 Organic Growth / > RWE Dea: operating result of €0.9bn p.a. by 2013 High Earnings (based on forwards in the mid 60$
Slide 10: We confirm our capex programme to capture growth opportunities and secure market share
We confirm our capex programme to capture growth opportunities and secure market share €6.5 bn German versus p.a. international capex +/- 10% RWE npower €1,100m p.a. (+/-20%) International German RWE Energy €1,800m p.a. (+/-20%) ~80% grid About half of capex will be spent outside ~20% others of Germ
Slide 11: Impact of economic crisis in our core markets
Impact of economic crisis in our core markets > BDEW statistic shows higher percentage levels of Electricity January – Forecast demand September 2009 2009 decline for the summer quarters (April to Market data1 September) mainly due to a basis effect (overall Germany -7% -5% to -7% lower demand in
Slide 12: Early hedging protects us from recession and allows flexible short-term optimisation
Early hedging protects us from recession and allows flexible short-term optimisation Forward selling of RWE Power in the German market (base load forwards in €/MWh) 100 90 Forward 2009 80 70 60 50 40 >> 10% 10% sold sold >> 20% 20% sold sold >> 25% 25% sold sold >> 35% 35% sold sold >> 65% 65% sold
Slide 13: A well balanced customer portfolio and conservative risk management help us weather the crisis
A well balanced customer portfolio and conservative risk management help us weather the crisis RWE German external electricity sales per customer group in 2009 Trading / Wholesale market > Exchange traded products: Private and commercial counterparty credit risk > Consumption stable managed by clear
Slide 14: Reduced industrial demand is most prominent in offpeak
Reduced industrial demand is most prominent in offpeak – therefore impact on wholesale prices is limited Industrial customer load profile before (dark blue) and during (light blue) the economic crisis in Germany 3500 3500 kW Working day (8-20 peak, 20-8 offpeak) Weekend (offpeak) Overall decline: 30
Slide 15: Price volatility keeps increasing in Germany
Price volatility keeps increasing in Germany – opportunities for a flexible portfolio like RWE’s Growing proportion of renewables leads to higher price volatility. October 2008 to October 2009: 60 hours with negative prices; highest price reached + € 500/MWh, lowest - € 500/MWh 494.26 300 270 Daily
Slide 16: Higher volatility also leads to higher risk premia
Higher volatility also leads to higher risk premia 100 €/MWh Maximum forward price1 80 Average forward price1 Minimum forward price1 Average spot price (baseload)2 60 40 20 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 1 German Baseload Electricity Forward for the respective year as traded in the p
Slide 17: Germany – Expected long run marginal cost indicates sustainably higher power price levels
Germany – Expected long run marginal cost indicates sustainably higher power price levels Required German base load price at full Required German base load price at full cost of hard coal new build1 cost of CCGT new build1 100 100 LRMC2 80 80 Power price in €/MWhel Power price in €/MWhel LRMC2 60 60
Slide 18: Our flexible new-build power plants will come into a market of unprecedented volatility
Our flexible new-build power plants will come into a market of unprecedented volatility Current status of new build projects in Germany > RWE: 11 GW of new capacity under construction, thereof approx. 9 GW with special 50 designs for serving the more volatile market. Capacity (in GW) 40 Cancelled/st
Slide 19: Efficiency enhancement programme is on track to deliver €1.2 billion by 2012
Efficiency enhancement programme is on track to deliver €1.2 billion by 2012 Cumulative operating result contribution of the programme compared to 2006 in € million 1,200 900 700 €1,200 million ; ; 450 annual contribution in total as of 2012 200 versus 2006 100 2007 2008 2009 2010 2011 2012 > Effici
Slide 20: The new RWE: More market-driven, leaner and faster
The new RWE: More market-driven, leaner and faster > Amprion (TSO Electricity Germany) RWE AG > Thyssengas (TSO Gas Germany) (Group Centre) > RWE Technology > Internal Services Germany Netherlands/ UK Central and Renewables Upstream Trading/ Belgium Eastern Europe Gas & Oil Gas Midstream > RWE Power
Slide 21: We maintain a high level of liquidity
We maintain a high level of liquidity Capital market debt maturities1 Strong sources of financing 2.5 20 in € bn Fully committed for liquidity syndicated loan back-up 2.0 16 (€4.0bn up to Oct. 2011) €0.0 bn 1.5 12 1.0 8 Commercial paper €3.6 bn ($5.0 bn) (up to 1 year) 0.5 4 €1.5 bn (31.10.09) 0.0 0
Slide 22: Outlook 2009
Outlook 2009 2009 Essent 2008 forecast contribution € million (excl. Essent) in Q4 External revenue 48,950 Below last year + c€1.5 bn EBITDA 8,773 In the order of last year’s level + c€150 m Operating result 6,826 In the order of last year’s level + c€100 m Recurrent net income 3,367 In the order of
Slide 23: Mid-term financial targets: We are also a stable post-crisis investment
Mid-term financial targets: We are also a stable post-crisis investment Operating Result > 5 – 10% CAGR1 to 2012 (excluding Essent) based on an average realized price for German electricity forwards of at least €60/MWh Recurrent > In the order of 10% CAGR1 to 2012 (excluding Essent) based on an net