Rwe Ag · XETR:RWE
Rwe — Q3 2008 Earnings Presentation
28 slides from Rwe's earnings presentation, Nov 11, 2008
Slide 1: Investor and Analyst Conference Call Q1-Q3 2008
Investor and Analyst Conference Call Q1-Q3 2008 Essen, November 11, 2008 Rolf Pohlig Chief Financial Officer Ingo Alphéus Vice President Investor Relations 1
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 ¾ Operating result +5% mainly due to German electricity generation Q1-Q3 2008 ¾ Recurrent net income +20% Strategy ¾ Further steps taken to grow our renewable energy portfolio ¾ Preferred bidder for Bulgarian nuclear power plant project ¾ Acquisition of Russian TGK-2 stopped
Slide 4: RWE Group key performance indicators
RWE Group key performance indicators January – September change € million 2008 20071 in % External revenue 34,454 30,272 +13.8 Cash flows from operating activities 4,349 4,801 -9.4 EBITDA 6,844 6,432 +6.4 Operating result 5,788 5,505 +5.1 Non-operating result -506 -85 - Financial result -1,019 -838
Slide 5: Performance of RWE Power
Performance of RWE Power Operating Result EBITDA January – September Change Change € million 2008 20071 in % 2008 20071 in % 2,678 2,189 +22.3 2,943 2,469 +19.2 ¾ Higher realised electricity prices and higher volumes (+€1.5 bn) ¾ Increased costs due to higher fuel prices (-€300 million) ¾ Higher cos
Slide 6: RWE Power: forward selling in the German market
RWE Power: ca. €20/MWh1) to catch up with current market price Forward selling of RWE Power in the German market (base load forwards in €/MWh) 100 90 Forward 2008 80 >>10% 10%sold sold >>45% 45%sold sold >>60% 60%sold sold >>85% 85%sold sold >>90% 90%sold sold 70 60 50 40 100 90 Forward 2009 80 70 6
Slide 7: Germany: Higher Clean Dark Spreads due to lower hard coal and CO2 prices
Germany: Higher Clean Dark Spreads (CDS) due to lower hard coal and CO2 prices 40 120 Forward 2008 30 90 20 60 10 30 0 0 40 160 Forward 2009 30 120 20 80 10 40 0 0 40 240 Forward 2010 30 180 20 120 10 60 0 0 01.01.2006 01.07.2006 01.01.2007 01.07.2007 01.01.2008 01.07.2008 01.01.2009 CDS Cal 2008-10
Slide 8: Performance of RWE Dea
Performance of RWE Dea Operating Result EBITDA January – September Change Change € million 2008 2007 in % 2008 2007 in % 436 394 +10.7 620 546 +13.6 ¾ Significant increase in crude oil prices not fully reflected due to the dollar’s weakness and our hedge policy. Oil production declining. ¾ Increased
Slide 9: Performance of RWE Supply & Trading
Performance of RWE Supply & Trading Operating Result EBITDA January – September Change Change € million 2008 20071 in % 2008 20071 in % 341 647 -47.3 369 648 -43.1 ¾ Despite operational performance in line with last year, reported IFRS relevant trading performance lower due to - in 2008 higher porti
Slide 10: Performance of RWE Energy
Performance of RWE Energy Operating Result EBITDA January – September Change Change € million 2008 20071 in % 2008 20071 in % 1,971 1,867 +5.6 2,344 2,213 +5.9 German regions 1,075 995 +8.0 1,334 1,242 +7.4 International regions 512 475 +7.8 569 530 +7.4 Supraregional operations 518 629 -17.6 610 67
Slide 11: Performance of RWE npower
Performance of RWE npower Operating Result EBITDA January – September Change Change € million 2008 2007 in % 2008 2007 in % 379 535 -29.2 506 635 -20.3 ¾ Negative impact from currency exchange rate changes (-€60 million) ¾ Power generation: - Higher plant availability and improved short term positio
Slide 12: Non-operating result
Non-operating result January – September Change € million 2008 20071 (absolute) Capital gains 47 327 -280 Impairment losses - - - Restructuring / other -553 -412 -141 Total -506 -85 -421 ¾ Capital gains: disposal of a further 8% stake in rhenag. Q1-Q3 2007 dominated by the disposal of the Dutch gas
Slide 13: Financial result
Financial result January – September Change € million 2008 20071 in % Net interest -36 -377 +90.5 Interest accretion to non-current provisions -561 -629 +10.8 Other financial result -422 168 - Total -1,019 -838 -21.6 ¾ Net interest: Among other reasons better due to improved net financial position a
Slide 14: Cash flow statement including American Water
Cash flow statement including American Water January – September Change € million 20081 20071 (absolute) Income 2,459 2,972 -513 Depreciation, amortization, 1,612 1,746 -134 impairment losses and write-backs Changes in provisions -123 -236 +113 Changes in deferred taxes, disposal gains 1,577 111 1,4
Slide 15: Financial liabilities and assets: Solid financing in place
Financial liabilities and assets: Solid financing in place (as of 30.09.2008) Financial liabilities in billion Euros Financial assets in billion Euros Split of securities 15 15 12.5 12.4 11.3 1.2 1.1 0.4 9.7 1.1 1% 10 10 2.5 0.5 1.0 2.5 13% 0.5 1.8 1.8 5 9.2 5 8.7 86% 2.8 7.0 6.6 0.7 0.6 1.1 1.0 0.7
Slide 16: Limited need for refinancing and sufficient sources to finance investment programmes
Limited need for refinancing and sufficient sources to finance future investment programmes Bond maturities1 in € billion Strong sources for financing Cash Flow 2,0 Fiscal Year 2007 €6.1 bn 1,5 Q1-Q3 2008 €4.3 bn 1,0 Fully committed syndicated loan 0,5 (€1.6 bn 364 days1 for liquidity €2.0 bn 3 year
Slide 17: Outlook for 2008
Outlook for 2008 20071 20081 € million forecast External revenue 42,507 Up by more than 10% EBITDA 7,915 At least matching previous year Operating result 6,533 At least matching previous year RWE Power 2,617 Up by more than 10% RWE Dea 492 Up by more than 10% RWE Supply & Trading 532 Below previous
Slide 18: Back-up Charts
Back-up Charts RWE AG | Conference Call Q1-Q3 2008 | November 11, 2008 1818
Slide 19: RWE Group electricity production
RWE Group electricity production January – September Other Total Total in TWh Germany UK Internat. 2008 2007 Lignite 50.9 - 4.2 55.1 56.4 Nuclear 37.1 - - 37.1 23.7 Hard coal 33.5 11.9 0.3 45.7 49.5 thereof contracts 22.1 - - 22.1 25.0 Gas 9.5 14.9 0.1 24.5 20.3 Renewable energies 2.9 0.6 0.5 4.0 3.
Slide 20: RWE Group electricity sales volume
RWE Group electricity sales volume January – September Total Total in TWh Germany UK Poland Hungary Other 2008 2007 Private and commercial 19.3 15.6 2.4 4.4 0.5 42.2 43.0 customers Industrial and corporate 44.6 22.8 2.4 5.4 0.4 75.6 72.8 customers Distributors 60.3 - 0.3 4.0 0.7 65.3 62.3 Electricit
Slide 21: RWE Group gas sales volume
RWE Group gas sales volume January – September Ger- Czech Total Total in TWh many Rep. UK Other 2008 2007 Private and commercial 12.7 21.4 32.0 5.1 71.2 67.2 customers Industrial and corporate 28.9 22.9 7.0 16.5 75.3 83.1 customers Distributors 69.3 10.1 - - 79.4 72.3 Total 110.9 54.4 39.0 21.6 225.
Slide 22: Germany: Clean Spark Spread versus natural gas and CO2 prices
Germany: Clean Spark Spread (CSS) versus natural gas and CO2 prices 40 40 Forward 2008 30 30 20 20 10 10 0 0 40 80 Forward 2009 30 60 20 40 10 20 0 0 40 80 Forward 2010 30 60 20 40 10 20 0 0 01.01.2006 01.07.2006 01.01.2007 01.07.2007 01.01.2008 01.07.2008 01.01.2009 CSS Peakload Cal 2008-10 (€/MWh;
Slide 23: UK: Clean Dark Spread versus hard coal and CO2 prices
UK: Clean Dark Spread (CDS) versus hard coal and CO2 prices 50 150 Forward 2008 40 120 30 90 20 60 10 30 0 0 50 200 Forward 2009 40 160 30 120 20 80 10 40 0 0 40 240 Forward 2010 30 180 20 120 10 60 0 0 01.01.2006 01.07.2006 01.01.2007 01.07.2007 01.01.2008 01.07.2008 01.01.2009 CDS Cal 2008-10 Base
Slide 24: UK: Clean Spark Spread versus natural gas and CO2 prices
UK: Clean Spark Spread (CSS) versus natural gas and CO2 prices 40 40 Forward 2008 30 30 20 20 10 10 0 0 50 100 Forward 2009 40 80 30 60 20 40 10 20 0 0 40 80 Forward 2010 30 60 20 40 10 20 0 0 01.01.2006 01.07.2006 01.01.2007 01.07.2007 01.01.2008 01.07.2008 01.01.2009 CSS Peakload Cal 2008-10 (€/MW
Slide 25: Development of net debt
Development of net debt € billion Capex Share Dividends Cash flows Acquisitions/ Others Change in buy back from disposals/ including pension, operating (de)consoli- f/x effects nuclear, activities dations mining provisions 25 +2.0 -4.3 +2.5 20 -0.2 +2.5 -0.3 -0.2 18.4 16.5 Including Including DCO*:
Slide 26: Development of pension liabilities, plan assets and provisions
Development of pension liabilities, plan assets and provisions change € million 30.09.2008 31.12.2007 absolute Present value of funded benefit obligations 10,794 12,298 -1,504 Fair value of plan assets 11,095 12,675 -1,580 Net amount for funded plans -301 -377 +76 Capitalized surplus of plan assets
Slide 27: RWE's current Kyoto credit portfolio for 2008 – 2012
RWE’s current Kyoto credit portfolio for 2008 – 2012 Projects by September 2008 Contract volume by technology Hydro 100 N 2O N2O 90 HFC23 Energy Efficiency 90 90 80 Wind Biogas 70 LoI/ Coal Mine Methane mill. certificates 60 ERPA1 Biomass 50 In In 40 Validation Validation ERPA11 LoI/ ERPA Contract v
Slide 28: Gross financial debt currency and interest exposure
Gross financial debt currency and interest exposure1 € / Others 39% $ 11% Floating 11% £ 50% Fixed 89% With debt in foreign currencies we hedge the translation risk of our international activities. 1 Including cross-currency swaps RWE AG | Conference Call Q1-Q3 2008 | November 11, 2008 2828