Rwe Ag · XETR:RWE
Rwe — H1 2012 Earnings Presentation
41 slides from Rwe's earnings presentation, Aug 14, 2012
Slide 1: Investor and Analyst H1 2012 Conference Call
Investor and Analyst H1 2012 Conference Call Essen, 14 August 2012 Peter Terium Rolf Pohlig Stephan Lowis Chief Executive Chief Financial Vice President Officer Officer Investor Relations
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: Today's Agenda
Today’s Agenda A Peter Terium Strategy update, H1 2012 highlights and group outlook 2012 B Rolf Pohlig H1 2012 group results, divisional performance and outlook 2012 RWE AG | H1 2012 Conference Call | 14 August 2012 333
Slide 4: Main messages
Main messages H1 2012 operating performance: EBITDA +9%, operating result +9%, recurrent net income on last year’s level Completion of hybrid bond programme – € 2 billion in total volume (in several currencies) achieved Confirmation of A3 (negative outlook) by Moody‘s; downgrade to BBB+ (stable outl
Slide 5: Key priorities for next 12 – 24 months
Key priorities for next 12 – 24 months Disposal Gas supply Efficiency programme contracts enhancement > Divestments of up to > Completion of > 2012 programme on € 7 billion by the end gas price reviews track to be completed of 2013 envisaged for 2013 > Measures of new > Majority of sales at the late
Slide 6: RWE's journey over the next 5 years
RWE’s journey over the next 5 years > Cornerstones of strategy remain > Adjust execution of strategy to changing framework conditions No further nuclear ambitions with existing operations phasing out Continued expansion of renewables including position in photovoltaic > Increasing partnerships t
Slide 7: RWE 2015 – four action fields to align RWE with changing market environment
RWE 2015 – four action fields to align RWE with changing market environment Strategy > Identify opportunities of energy market transformation > Align execution of strategy to changing market environment Structures/ > Eliminate structural and operational duplications and clarify Roles interfaces > Es
Slide 8: Efficiency programme well on track and stepped up
Efficiency programme well on track and stepped up Cumulative operating result contribution of the programme compared to 2006 In € million Upgrade August 2011 1,500 of € 100 million > 900 700 Upgrade February 2011 450 of € 200 million 100 200 Original programme 2006 – 2012 of € 1,200 millio
Slide 9: Further efficiency enhancements of € 1 bn initiated
Further efficiency enhancements of € 1 bn initiated In € million € 1 bn programme now backed bottom-up by operational measures 1,000 Several hundred individual ~250 measures across the whole 250 RWE group 750 Reduced IT-spending Programme includes ~300 c. € 300 m from workforce Staff reduction reduc
Slide 10: Outlook for 2012 confirmed
Outlook for 2012 confirmed In € million 8,460 In the order of 2011 EBITDA 5,814 In the order of 2011 Operating result Recurrent 2,479 In the order of 2011 net income 2011 2012e After further disposals1 Dividend € 2.00/share Pay out ratio of 50% – 60% of recurrent net income 1 No major earnings dilut
Slide 11: Today's Agenda
Today’s Agenda A Peter Terium Strategy update, H1 2012 highlights and group outlook 2012 B Rolf Pohlig H1 2012 group results, divisional performance and outlook 2012 RWE AG | H1 2012 Conference Call | 14 August 2012 113 11
Slide 12: RWE Group key performance indicators
RWE Group key performance indicators January – June Change € million 2012 2011 in % External revenue 27,090 27,457 -1.3 Cash flows from operating activities 1,371 3,139 -56.3 EBITDA 5,040 4,622 9.0 Operating result 3,642 3,341 9.0 Non-operating result -142 -210 32.4 Financial result -857 -706 -21.4
Slide 13: Operating Result by Division
Operating Result by Division (in € million) +33% 1,691 H1 2011 H1 2012 1,268 -7% 943 -17% 876 691 +27% -9% 575 425 -13% 352 319 +10% 334 187 162 89 98 +43% -340 -598 Power Sales / NL/B UK CEE/SEE Renewables Upstream Trading/Gas Generation Distribution Gas&Oil Midstream Networks Germany RWE AG | H1 2
Slide 14: Further reduction of the gas-to-oil-spread exposure
Further reduction of the gas-to-oil-spread exposure bcm p.a. RWE’s long-term oil-indexed gas purchase portfolio at the end of the relevant year 30 Already achieved reduction of the oil-indexed share of RWE’s gas purchase portfolio 25 20 15 10 contract reviews initiated 2011 5 contract reviews initia
Slide 15: Continued execution of measures to support financial strength
Continued execution of measures to support financial strength Expected development of leverage factor (Net debt1/EBITDA) Measures to improve financial headroom Capital Divestments Focused long-term Efficiency measures capex programme programme up to €7bn by 2013 €4 – 5 bn/a €1bn by 2014 completed
Slide 16: Development of net debt influenced by increase in provisions
Development of net debt influenced by increase in provisions due to low interest environment € billion Capex Dividends Acquisitions/ Cash flows Others Change Hybrid divestiture/ from including in pension, disposals/ operating f/x effects nuclear, (de)consoli- activities mining dation provisions 36 +
Slide 17: Divisional outlook for the operating result
Divisional outlook for the operating result € million 2011 actual 2012 forecast versus 2011 Germany 4,205 Above last year’s level Power Generation 2,700 Above last year’s level Sales/Distribution networks 1,505 In the order of last year’s level Netherlands/Belgium 245 Below last year’s level United
Slide 18: Back-up Charts
Back-up Charts RWE AG | H1 2012 Conference Call | 14 August 2012 18
Slide 19: Performance of the Germany Division (I) Power Generation
Performance of the Germany Division (I) Power Generation Business Area (RWE Power) January – June: operating result: +33.4% € million 1,691 + Absence of one-off burdens from new German energy policy in 2011 1,268 + Lower realised electricity prices offset by higher volumes (c. +€30m), (including pos
Slide 20: Forward selling by RWE Power in the German market
Forward selling1 by RWE Power in the German market (Base-load & peak-load forwards in €/MWh) 100 2012 forward 80 60 40 > 30% > 35% > 50% > 80% > 90% 100 2013 forward 80 60 40 > 10% > 30% > 50% > 80% 100 2014 forward 80 60 40 > 20% > 40% 01/01/2010 01/07/2010 01/01/2011 01/07/2011 01/01/2012 01/07/20
Slide 21: Germany: Clean Dark and Spark Spreads
Germany: Clean Dark and Spark Spreads (CDS/CSS) 2011 forward 2012 forward 2013 forward Ø 14.88 Ø 9.78 Ø 7.74 Ø 6.16 Ø 4.93 Ø -0.45 Trading year 2010 Trading year 2011 Trading year 2012 CDS Cal 2011–13 Base load (€/MWh) Average CDS CSS Cal 2011–13 Peak load (€/MWh) Average CSS (assumed thermal effici
Slide 22: Performance of the Germany Division (II) Sales/Distribution Networks
Performance of the Germany Division (II) Sales/Distribution Networks Business Area January – June: operating result: -7.1% € million - Absence of positive one-off items compared to 2011 943 876 Sales - Lower margins in electricity sales Distribution networks 2011 2012 + Improved efficiency enhanceme
Slide 23: Performance of the Netherlands/Belgium Division (Essent)
Performance of the Netherlands/Belgium Division (Essent) January – June: operating result: -13.4% € million - Lower electricity generation spreads + Start of commercial operation of new gas-fired power plants Claus C and 187 162 Moerdijk 2 - Higher depreciation + Improved margins in the sales busine
Slide 24: Performance of the United Kingdom Division (RWE npower)
Performance of the United Kingdom Division (RWE npower) January – June: operating result: -9.4 % € million - Absence of non-recurrent item relating to settlement of claims in 2011 Power generation 352 - Significantly lower margins 319 - Fire at biomass power plant in Tilbury Retail + Improved commod
Slide 25: UK: Clean Dark and Spark Spreads
UK: Clean Dark and Spark Spreads (CDS/CSS) 2011 forward 2012 forward 2013 forward Ø 21.05 Ø 13.78 Ø 8.19 Ø 3.55 Ø 6.70 Ø 3.43 Trading year 2010 Trading year 2011 Trading year 2012 CDS Cal 2011–13 Base load (€/MWh) Average CDS CSS Cal 2011–13 Base load (€/MWh) Average CSS (assumed thermal efficiency:
Slide 26: Performance of the Central Eastern and South Eastern Europe Division
Performance of the Central Eastern and South Eastern Europe Division January – June: operating result: -16.8% € million - Negative f/x-effects 691 Czech Republic: 575 - Lower gas retail and distribution margins Hungary: - Lower electricity generation and retail margins 2011 2012 Guidance for fiscal
Slide 27: Performance of the Renewables Division (RWE Innogy)
Performance of the Renewables Division (RWE Innogy) January – June: operating result: +10.1% € million + Increased generation volumes (partly driven by improved wind 98 conditions and growth investments) 89 + Improved electricity wholesale prices - Absence of positive one-off in 2011 relating to liq
Slide 28: Performance of the Upstream Gas & Oil Division (RWE Dea)
Performance of the Upstream Gas & Oil Division (RWE Dea) January – June: operating result: +27.2% € million + Higher realised oil and gas prices 425 334 + Positive f/x effects - Higher depreciation - Higher royalties 2011 2012 Guidance for fiscal year 2012: significantly above last year € million +
Slide 29: Performance of the Trading/Gas Midstream Division
Performance of the Trading/Gas Midstream Division (RWE Supply & Trading) January – June: operating result: +43.1% € million Trading + Improved performance in the energy trading business Supply -340 - Burdens from long-term oil-indexed gas contracts + Compensation from commercial settlements -598 201
Slide 30: Development of TTF gas price and brent oil price
Development of TTF gas price and brent oil price Forward for delivery Forward for delivery Forward for delivery Forward for delivery in 2010 in 2011 in 2012 in 2013 €/MWh €/MWh 50 80 40 60 30 40 20 20 10 0 0 -20 Trading year 2009 Trading year 2010 Trading year 2011 Trading year 2012 Spread (right ax
Slide 31: Cash flow statement
Cash flow statement January – June Change € million 2012 2011 (absolute) Funds from operations (FFO) 2,451 2,984 -533 Change in working capital -1,080 155 -1,235 of which variation margins 232 -570 +802 Cash flows from operating activities 1,371 3,139 -1,768 Minus capex on fixed assets -2,111 -2,709
Slide 32: RWE Group electricity production (by geographic regions)
RWE Group electricity production (by geographic regions) January – June Other Total Total in TWh Germany UK NL/BE Internat. 2012 2011 Lignite 39.2 2.5 41.7 36.1 Nuclear 14.7 14.7 19.1 Hard coal 17.1 8.8 3.4 0.2 29.5 23.8 thereof contracts 10.6 10.6 10.5 Gas 4.3 11.9 3.1 0.1 19.4 19.9 Renewables 2.4
Slide 33: RWE Group electricity sales volume (by geographic regions)
RWE Group electricity sales volume (by geographic regions) January – June Total Total in TWh Germany UK NL/BE Poland Hungary Other 2012 2011 Residential and commercial 13.2 9.2 5.6 1.2 2.7 0.2 32.1 32.3 customers Industrial and corporate 27.8 16.0 7.5 1.8 2.3 0.4 55.8 57.9 customers Distributors 42.
Slide 34: RWE Group gas sales volume (by geographic regions)
RWE Group gas sales volume (by geographic regions) January – June Czech Total Total in TWh Germany Rep. NL UK Other 2012 2011 Residential and commercial 17.1 11.9 21.1 24.5 1.7 76.3 76.9 customers Industrial and corporate 14.9 9.3 24.1 1.4 6.3 56.0 68.6 customers Distributors1 23.2 8.9 0.0 0.4 0.5 3
Slide 35: Financial liabilities and assets
Financial liabilities and assets (excluding hybrid capital, as of 30 June 2012) Financial liabilities Financial assets Split of in billion euros in billion euros securities 25 10 21.3 17,4 % 1.6 8 20 1.4 7.3 0.3 6.6 1.0 15.8 1.0 0.7 15 6 1.1 2.2 2.2 10 4 0.8 18.0 0.8 5.5 13.7 0.3 5 0.3 0.6 2 2.9 3.3
Slide 36: Capital market debt maturities and sources of financing
Capital market debt maturities and sources of financing Capital market debt maturities1 Strong sources of financing in € bn Fully committed for liquidity syndicated loan 2,5 20 back-up (€ 4.0 bn up to Nov. 2015) € 0.0 bn 2,0 16 1,5 12 Commercial paper $ 1.4 bn ($ 5.0 bn) (up to 1 year) 1,0 8 € 1.1 b
Slide 37: Capital market debt currency and interest exposure
Capital market debt currency and interest exposure (as of 30 June 2012) 18% 33% 1 € 19.7 bn € 20.5 bn2 67% 82% € £ Interest rate fixing expiry > 1 year Interest rate fixing expiry < 1 year 1 Capital market debt = bonds of € 15.9 bn and hybrids of € 3.8 bn; split into currencies includes cross-curren
Slide 38: Conventional power plant new build programme
Conventional power plant new build programme € bn1 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Lingen 0.5 (Gas, 876 MW, 100%) BoA 2&3, Neurath 2.6 Units G F (Lignite, 2,100 MW, 100%) Hamm 2.4 Units D E (Hard coal, 1,528 MW, 77%) Staythorpe 0.8 Units 1 -4 (Gas, 1,650 MW, 100%) Pembroke 1.2 Unit
Slide 39: RWE Dea's largest field developments
RWE Dea's largest field developments RWE Capex 1 Production start share (€ bn) 2011 2012 2013 2014 2015 2016 2017 2018 West Nile Delta (Egypt) NA 40% 2.9 WMDW 20% 100% Disouq (Egypt) 2 0.2 (Operator) 70% Breagh Phase 1 (GB) 0.4 (Operator) Reggane (Algeria) 19,5% 0.4 Edvard Grieg (Norway) 3 20% 0.6 K
Slide 40: RWE Innogy major projects under construction
RWE Innogy major projects under construction € bn1 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Gwynt y Môr 2.4 (Wind offshore, 576 MW, 60%) Greater Gabbard 1.9 (Wind offshore, 504 MW, 50%) Markinch (Biomass CHP, 0.3 45 MWe, 88 MWth, 100%) Nordsee Ost2 0.9 (Wind offshore, 295 MW, 100%) Capacity
Slide 41: Always be informed about RWE…
Always be informed about RWE… To always be up-to-date, please have a look at our website www.rwe.com/ir Calendar http://www.rwe.com/web/cms/en/110614/rwe/investor-relations/calendar/ Annual and Interim Reports http://www.rwe.com/web/cms/en/110822/rwe/investor-relations/financial-reports/ Resul