Rwe Ag · XETR:RWE
Rwe — Investor Presentation (May 2022)
45 slides from Rwe's investor presentation, May 2022
Slide 1: Growing Green
RWE GROWING _ GREEN = ee Zo
Slide 2: Disclaimer
Disclaimer This document contains forward-looking statements. These statements are based on the current views, expectations, assumptions and information of the management, and are based on information currently available to the management. Forward-looking statements shall not be construed as a promi
Slide 3: Highlights 2021 and outlook 2022
Highlights 2021 and outlook 2022 May 2022 Investor presentation
Slide 4: Review 2021: strong financial and strategic performance drives shareholder value creation
Review 2021: strong financial and strategic performance drives continuous shareholder value creation Financial targets exceeded: adj. EBITDA €3.65bn Continuous shareholder and adj. Net income €1.57bn value creation Transformational growth is forging ahead - Almost 90% of capex complies with the prop
Slide 5: Russian invasion of Ukraine makes energy security top priority
Russian invasion of Ukraine makes energy security top priority – even stronger push for green transition expected Short term focus: Medium/long-term focus: ensure energy security sustainable and secure energy supply Preparation to bring back/extend Further acceleration of energy transition in Europe
Slide 6: War in Ukraine requires active risk management
War in Ukraine requires active risk management – UK & EU sanctions leading to €850m write-off in non-operating result Business with Russian • No new energy supply contracts with Russian counterparties counterparties • Ending all non-energy supply business with Russian counterparties with immediate e
Slide 7: Our Growing Green strategy is set – Execution continues as planned
Our Growing Green strategy is set – Execution continues as planned – Acceleration to be explored GROWING GREEN EXECUTION ACCELERATION Our long-term strategy continues as planned all options will be explored is set • €50bn gross cash • 5.6 GW of green capacity • Utilising strong push for green invest
Slide 8: Decisive year 2022 – Financial targets confirmed
Decisive year 2022 – Financial targets confirmed Core adj. EBITDA € million Adj. EBITDA RWE Group € million Adj. Net income € million 2,900 – 3,300 2,761 3,600 – 4,000 3,650 1,300 – 1,700 1,569 2022e 2021 2022e 2021 2022e 2021 We confirm our financial targets for 2022 We are rigorously executing our
Slide 9: Outlook FY2022
Outlook FY2022 Group outlook FY 2022, € million Outlook FY 2022 Divisional outlook FY 2022 – adj. EBITDA, € million Core Outlook Outlook FY 2022 FY 2022 Core adj. EBITDA 2,900 – 3,300 Offshore Wind 1,350 – 1,600 Adj. EBITDA RWE Group 3,600 – 4,000 Onshore Wind/Solar 650 – 800 Depreciation ~-1,600 Hy
Slide 10: Strategy & Long-term financial outlook
Strategy & Long-term financial outlook Extract from Capital Market Day – Nov 2021 May 2022 CMD Nov 2021
Slide 11: Leading the way to a green energy world
Leading the way to a green energy world May 2022 FY 2021
Slide 12: Growing Green: Leading the way to a green energy world
Growing Green: Leading the way to a green energy world RWE is perfectly positioned: vast experience in green technologies, strong market presence in industrial growth markets, operating a leading commercial platform We significantly accelerate our green growth programme: €50bn gross / €30bn net cash
Slide 13: The future energy market is powered by green technologies
The future energy market is powered by green technologies May 2022 CMD Nov 2021 Page 13
Slide 14: Our core business is leading the way to a green energy world
Our core business is leading the way to a green energy world Offshore Onshore Batteries & Hydrogen Commercial Wind Wind/Solar Flexible Solutions Generation Strongest growth in Biden Plan and RWE’s European Hydrogen is quickly Decarbonisation Europe, significant European Green core markets require ga
Slide 15: Perfectly positioned to succeed
Perfectly positioned to succeed Long-term Strong market Leading experience presence in commercial in relevant industrial platform to technologies countries with maximise at scale high growth value potential May 2022 CMD Nov 2021 Page 15
Slide 16: Raising the bar to accelerate the energy transition
Raising the bar to accelerate the energy transition Wind/Solar/Batteries Flexible Generation Hydrogen 2.5 GW per year Significant 1.5 GW growth in net per year capacity additions Ø GW per year, 2.1 pro rata 0.2 0.2 Ambition CMD 2020 Ambition CMD 2021 for 2019 – 2022 for 2021 – 2030 May 2022 CMD Nov
Slide 17: €50bn gross investment programme to drive green growth
€50bn gross investment programme to drive green growth Green investment programme 2021 – 2030 ~€50bn +35 GW ~€30bn +25 GW Gross cash Net cash investments investments May 2022 CMD Nov 2021 Note: Capacity additions before decommissioning. Page 17
Slide 18: Powerful & green in 2030: Leading green energy company
Powerful & green in 2030: Leading green energy company 50 GW >95% 9% €5bn Green installed EBITDA from Annual average EBITDA net capacity in core business EBITDA growth Ambition 2030 as of 2023 in core business 2030 2021 – 2030 MayNov 15 2022 2021 FY 2021 CMD Nov 2021 Page 18
Slide 19: Sustainability is at the heart of our strategy
Sustainability is at the heart of our strategy Reduction of carbon emissions Enhancement of biodiversity compared to 2012 by closing Recultivated over 23,000ha in the Rhenish down of coal-fired power generation mining area. With over 1,500 plants and 3,100 capacity, RWE targets in line with Paris cl
Slide 20: Stepping up our ambition in sustainability
Stepping up our ambition in sustainability Climate Change Biodiversity & Recultivation Environ- mental We will be climate neutral by 2040 . Because we care about the biodiversity impact Our ambitions of our business, we commit to the highest On the way there, our ambition is to reduce standards in r
Slide 21: Strong growth platform across all technologies
Strong growth platform across all technologies Secured offshore rights Powerful development pipeline of Europe green generation technologies 4.3 >55 GW 1.2 8 GW 8 1.6 0.8 0.4 0.5 11 GW 0.4 1.6 14 7.7 Additional offshore pipeline from 10 central tenders/lease auctions Americas 4 10 2.8 Expected 5.8 +
Slide 22: Our offshore installed net capacity will triple by 2030
Offshore wind Our offshore installed net capacity will triple by 2030 Our offshore wind target, installed Growth until 2027 secured >3x 8 net capacity GW, pro rata 5 2.4 2020 2027e 2030e Good visibility Triton Knoll, 0.5 GW Sofia, 1.4 GW Secured rights >7 GW on capacity Kaskasi, 0.3 GW Baltic 2, 0.4
Slide 23: Ambitious onshore wind targets and steep solar growth
Onshore wind and solar Ambitious onshore wind targets and steep solar growth Our onshore wind and solar target, Solar Onshore wind installed net capacity GW, pro rata 20 GW 16 GW 8 Capacity 6 growth in 7 GW onshore wind and solar <1 12 10 7 2020 2027e 2030e May 2022 CMD Nov 2021 Page 23
Slide 24: Balancing the system is a growth opportunity
Batteries & flexible generation Balancing the system is a growth opportunity 3 Our battery 2 Growth focus in & flexible <1 batteries is on co- Batteries location with wind generation 2020 2027e 2030e capacity, and solar sites installed net 17 16 17 Excellent position to 1 2 capacity build new gas pl
Slide 25: Ideally positioned for the hydrogen economy
Hydrogen Ideally positioned for the hydrogen economy Hydrogen market growth Strongest global growth Strong expertise along the value chain momentum in Europe Industrial demand centres located in RWE’s European core markets Renewable Logistics European energy (storage & transport) electrolyser capaci
Slide 26: Growth target backed by strong project pipeline
Hydrogen Growth target backed by strong project pipeline RWE’s hydrogen development pipeline RWE with market leading growth target in electrolyser capacity 10 GW Mostly early-stage pro rata development projects Requirements for electrolyser investments +2 • Regulatory and political Selected hydrogen
Slide 27: We transform rapidly into a green energy company
We transform rapidly into a green energy company Installed net 54 GW capacity 42 GW 40 GW GW, pro rata 18 31 15 Wind/Solar/Batteries 17 Flexible generation/Hydrogen 24 19 Coal/Nuclear 8 4 2016 2023e 2030e Adj. EBITDA Core business €2.9bn – €5bn Coal/Nuclear €1.9bn ambition €3.3bn 44% 56% >95% <5% 10
Slide 28: Delivering growth and value
Delivering growth and value May 2022 FY 2021
Slide 29: Strict investment criteria ensure attractive returns
Strict investment criteria ensure attractive returns IRR Investment decisions based requirements on strict hurdle rate Offshore wind approach with project IRR for future Global 5.0% 9.0% typically exceeding base investments WACC by 100 to 300 bps Hurdle rates include risk premia depending on Onshore
Slide 30: We accelerate our growth investments to €3bn net annually
We accelerate our growth investments to €3bn net annually Share of gross cash investments: Ø €5bn p.a. Offshore wind + 20 Green investment Ø €3bn p.a. Onshore wind, solar and batteries programme 2021 – 2030 50 >90% 2021 – 2027 EU Taxonomy €bn + €21bn eligible 30 Flexible generation & hydrogen Gross
Slide 31: Stable and sustainable earnings profile
Stable and sustainable earnings profile Gross margin Gross margin split Gross margin split Wind/Solar Flexible generation 2021 – 2023 PPAs/Tax Credit Capacity payments/ Merchant 10% ancillary services 25% 12 30% Merchant 35% years 30% Certificates Weighted average remaining support 30% 40% tenor1 Wi
Slide 32: Investment programme funded by strong cash flow and balance sheet
Investment programme funded by strong cash flow and balance sheet Funding 63 63 composition 2021 – 2030 20 Asset rotation €bn Financial Gross cash 50 11 headroom investments Net cash investments of €30bn Adj. operating 32 cash flow Dividend 7 Utilisation of nuclear/ 6 mining provisions Sources of fu
Slide 33: Committed to strong capital structure and investment grade rating
Committed to strong capital structure and investment grade rating Strong investment Target leverage factor of grade rating Today ≤3x net debt/core adj. EBITDA Current & Target rating: Baa2 BBB+ Post 2025 ≤3.5x Target leverage factor of net debt/adj. EBITDA May 2022 CMD Nov 2021 Page 33
Slide 34: Sustainable financing provides liquidity and financing at competitive rates
Sustainable financing provides liquidity and financing at competitive rates Successfully issued Syndicated credit facility with Green Bond in Q2 2021 sustainability-linked KPIs • Green bond multiple times oversubscribed • Renewable energy (%) in generation portfolio • Ten-year bond at highly attract
Slide 35: Attractive and stable dividend throughout the green energy transition
Attractive and stable dividend throughout the green energy transition Dividend Dividend floor of policy €0.90 per share €/share growing Long-term average stable pay-out ratio of 50 – 60% based on adj. net income 0.85 0.90 0.80 2019 2020 2021 2030 May 2022 CMD Nov 2021 Page 35
Slide 36: Delivering growth and value
Delivering growth and value Green Earnings Strict Dividend investments Growth balance sheet commitment 2021 – 2030 2021 – 2030 management Strong investment Floor of €0.90 €30bn grade rating per share Net cash investments 9% Long-term target Long-term >90% EBITDA CAGR leverage factor payout ratio of
Slide 37: Appendix
Appendix May 2022 Investor presentation Page 37
Slide 38: Disclosure summary
Disclosure summary Strategic and financial outline Additional disclosure Installed net capacity core business 2030, pro rata 50 GW Gross cash investments core business 2021 – 2030 €50bn • Offshore Wind 45% • Onshore Wind/Solar/Batteries 45% Gross capacity additions 2021 – 2030 35 GW • Flexible Gener
Slide 39: Guidance FY2023 and financial preview FY2027
Guidance FY2023 and financial preview FY2027 € million Offshore Wind 1,350 – 1,550 1,350 – 1,650 Onshore Wind/Solar 750 – 900 1,250 – 1,450 Flexible 750 – 950 1,000 – 1,300 Generation/Supply Others/Consolidation Ca. -150 Ca. -150 Core adj. EBITDA 2,800 – 3,200 3,700 – 4,100 Coal/Nuclear 0 - 200 0 -
Slide 40: Q1 2022 results
Q1 2022 results May 2022 Investor presentation Page 40
Slide 41: Continuous green growth ensured across all technologies
Q1 2022 Continuous green growth ensured across all technologies Development of our green generation portfolio, GW pro rata +5.6 32.7 0.5 0.6 1.3 1.0 2.2 26.9 27.1 0.2 0.0 31.12.2021 Capacity Capacity 31.03.2022 Offshore Onshore Solar Batteries Flexible Total additions farm-downs Wind Wind Generation
Slide 42: Good operational Q1 performance – strong increase in earnings
Q1 2022 Good operational Q1 performance – strong increase in earnings compared to the previous year Core adj. EBITDA Q1 2022 vs. Q1 2021, € million Offshore Wind earnings up on the back of +126% Rampion consolidation effect and Triton Knoll pre-commissioning income, favourable wind 1,253 conditions
Slide 43: Strong adj. net income due to good operational performance
Q1 2022 Strong adj. net income due to good operational performance Adj. net income, € million Adj. EBITDA driven by strong Q1 2021 Q1 2022 operational performance Adj. EBITDA Adj. depreciation increases in line with 883 1,460 Q1 2022 growth investments -335 Adj. depreciation -362 Adj. financial resu
Slide 44: Economic net debt
Q1 2022 Economic net debt Net assets / net debt (€ million) 31 Mar 2022 31 Dec 2021 +/- Net debt definition Cash and cash equivalents 6,367 5,825 542 • Net debt does not Marketable securities 7,857 8,347 -490 contain mining provisions, which Other financial assets 14,349 12,403 1,946 essentially cov
Slide 45: Your contacts in Investor Relations
Your contacts in Investor Relations Important Links Financial Calendar • Annual and interim reports & statements • 11 August 2022 ADR programme available Interim report on the first half of 2022 • Investor and analyst conferences • 10 November 2022 Further information on our homepage Interim stateme