Rwe Ag · XETR:RWE
Rwe — Investor Presentation (May 2024)
52 slides from Rwe's investor presentation, May 2024
Slide 1: Growing Green
GROWING GREEN May 2024 Update after Q1 2024 reporting
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: Q1 2024 results
Q1 2024 results May 2024 Investor presentation
Slide 4: Good earnings in Q1 2024 after exceptional prior year
Good earnings in Q1 2024 after exceptional prior year Adj. EBITDA in EUR m • Offshore Wind earnings up due to better -603 2,312 wind conditions • Onshore Wind/Solar result increased on 473 the back of organic growth and CEB assets 1,709 247 • Flexible Generation earnings lower after 548 exceptional
Slide 5: Adjusted net income reflects strong operational performance
Adjusted net income reflects strong operational performance Adj. net income in EUR m • Adj. EBITDA lower after exceptional prior Q1 2023 FY 2021 Q1 2024 FY 2022 year • Adj. tax applying general tax rate of 20% Adj. EBITDA 2,312 1,709 Q1 2024 • Adj. minority interest reflects lower -454 Adj. deprecia
Slide 6: Adjusted operating cash flow marked by seasonal effects in working capital
Adjusted operating cash flow marked by seasonal effects in working capital Reconciliation to adj. operating cash flow for Q1 2024 in EUR m 1,709 -341 -1,440 -97 -210 -379 Adj. EBITDA Changes in Changes in Cash Cash Adj. operating provisions/ operating financial result taxes cash flow (Non-) Cash ite
Slide 7: Net debt mainly driven by investments in green growth and timing effects
Net debt mainly driven by investments in green growth and timing effects Development of net debt in Q1 2024 in EUR bn (+ net debt/- net assets) 11.2 -0.1 1.9 0.1 6.6 2.3 0.4 Net debt Adj. operating Net cash Dividends Other changes in Changes in Net debt 31 Dec 23 cash flow investments net financial
Slide 8: Outlook confirmed for Full Year 2024
Outlook confirmed for Full Year 2024; we expect to be at the lower end of the guidance range Group outlook FY 2024 Divisional outlook FY 2024 in EUR m in EUR m Outlook Adj. EBITDA Outlook Lower end Lower half Adj. EBITDA 5,200 – 5,800 Offshore Wind 1,450 – 1,850 Lower half Adj. depreciation approx.
Slide 9: Our operating wind and solar business has limited open price exposure
Our operating wind and solar business has limited open price exposure Gross margin wind/solar existing operating assets in EUR bn, as of mid-February 2024 Key price-exposed positions from Price-exposed Secured existing operating assets (pre hedging) 4.3 4.5 4.3 4.1 0.5 0.8 1.0 • UK: ROC wind assets,
Slide 10: Flexible generation with increasing share of secured revenues
Flexible generation with increasing share of secured revenues from capacity payments Gross margin flexible generation (Illustrative) • Flexible generation with long-term increasing profitability and higher share of secured earnings • From 2025 onwards, • normalised margin of Running the asset fleet
Slide 11: Green capacity of 8.3 GW under construction
Green capacity of 8.3 GW under construction reflects significant growth investments Development of our green generation portfolio GW pro rata +8.3 43.9 0.2 1.2 3.2 1.2 35.5 35.6 2.5 0.2 31 Dec 2023 Capacity 31 Mar 2024 Offshore Onshore Solar Batteries Flexible Total additions Wind Wind Generation &
Slide 12: Our long-term strategy
Our long-term strategy Extract from CMD 2023 (as presented in November 2023) May 2024 Investor presentation
Slide 13: RWE 2030 – A global leader in green energy
RWE 2030 – A global leader in green energy Green asset portfolio in industrialised, low-risk countries >65 GW Green generation portfolio >€9 bn Adj. EBITDA €3 bn Adj. net income Green generation portfolio in line with the 1.5°C SBTi emission reduction pathway May 2024 Investor presentation 13
Slide 14: We are accelerating our investments in clean technologies
We are accelerating our investments in clean technologies Green net cash investments 2021 – 20231 2024 – 2030 Net capacity additions 2024 – 2030 EUR bn EUR bn GW 1 EUR 13bn organic and EUR 7bn M&A May 2024 Investor presentation 14
Slide 15: We will operate a well diversified portfolio in 2030
We will operate a well diversified portfolio in 2030 Installed net capacity target Diversified portfolio across 2030 technologies and regions 5% 15% 25% 30% 30% >65 GW 20% >65 GW 10% 25% 15% 25% GW Offshore wind Batteries Germany USA Onshore wind Flexible generation & hydrogen UK Rest of World Solar
Slide 16: Continuing profitable growth on excellent capabilities and market fundamentals
We are continuing our profitable growth on the back of excellent capabilities and favourable market fundamentals Favourable market fundamentals Financial headroom Strong positioning in our core markets Strong balance sheet and high-cash with significant investment needs in generating business portfo
Slide 17: We will rapidly decarbonise our portfolio
We will rapidly decarbonise our portfolio Net installed capacity Revenues split GW, pro rata • Green portfolio growth accelerated – more than 90% share of renewable >65 and flexible generation 60 capacity will be achieved in 2027 47 39 78% • Coal to decline rapidly – 80% >90% 100% >90% driven by clo
Slide 18: Committed to 1.5°C SBTi emission reduction pathway
We are committed to 1.5°C SBTi emission reduction pathway Scope 1 & 2 emission targets kg CO2 per kWh • We reduced our CO2 emissions by 50% in the past decade • We are committed to reducing our 0.6 relative Scope 1 & 2 emissions by 70% by 2030 • We are committed to reducing our ~70% reduction Scope
Slide 19: Our investments in green growth deliver substantial earnings
Our investments in green growth deliver substantial earnings Adj. EBITDA1 Adj. net income1 EUR bn EUR bn +14% >9.0 6.7 +12% 2.8 3.0 2.3 1.0 2021 2027e 2030e 2021 2027e 2030e Target future dividend growth of 5 – 10% p.a. 1 Pro forma figures excl. Coal/Nuclear May 2024 Investor presentation 19
Slide 20: Our extensive pipeline allows selection of the most attractive investments
Our extensive pipeline allows the selection of the most attractive investments Development pipeline GW, pro rata Pipeline maturity >100 14 15% 19 45% >55 26 >100 GW 8 14 24 40% 10 4 10 12 10 10 CMD 2021 CMD 2023 High maturity (COD until 2027) Medium maturity (COD 2027 – 2030) Offshore wind Onshore w
Slide 21: Profitable offshore expansion backed by robust development pipeline
Offshore wind Profitable offshore expansion backed by robust development pipeline • Successful delivery 3.3 GW net Secured offshore rights of offshore wind projects in installed capacity GW, pro rata 2022, on time and on budget: Recent additions Kaskasi (0.3 GW) & Triton Knoll 1 (0.5 GW 1) Kaskasi 2
Slide 22: Offshore build-out plan until 2030
Offshore wind Our build-out plan until 2030 is secured by attractive and clearly defined projects Offshore wind targets GW, pro rata Development pipeline with COD until 2030 GW, pro rata 10 Nordseecluster A 0.7 GW 2027 OranjeWind 0.8 GW 6 Dublin Array 0.8 GW 2028 Nordseecluster B 0.9 GW 2.5 Baltic I
Slide 23: Driving innovation and meeting future sustainability requirements
Offshore wind We are driving innovation and are well positioned to meet future sustainability requirements First ever full system integration of offshore wind, H2, e-boilers and battery storage at OranjeWind At the forefront of floating offshore wind through our pilot projects (e.g., DemoSATH and Te
Slide 24: Excellent market position in onshore wind & solar
Onshore wind & solar Excellent market position to accelerate onshore wind & solar build-out across North America, Europe and Australia Existing asset base Current portfolio split GW, pro rata 30% 12.5 70% 12.5 GW installed net capacity across North America, Europe and Australia Countries/states with
Slide 25: Onshore wind and solar build-out plans until 2030
Onshore wind & solar Onshore wind and solar build-out plans until 2030 backed by an attractive pipeline Onshore wind targets Onshore wind pipeline maturity GW, pro rata 14 12 5% 1.1 8.6 19 GW 50% 45% High maturity (COD until 2027) 2023 2027e 2030e Medium maturity (COD 2027 – 2030) Installed capacity
Slide 26: Innovation and sustainability in onshore wind and solar strategy
Onshore wind & solar Innovation and sustainability are a key part of our onshore wind and solar strategy First Agri-PV demo project launched in Germany (Garzweiler), further driving our just transition in the Rhenish area At the forefront of floating PV; first floating solar farm commissioned in the
Slide 27: Batteries hold increasing importance and attractive return profile
Batteries Batteries hold increasing importance and attractive return profile Value stacking of batteries revenue streams Batteries targets GW, pro rata 6 Wholesale markets 4 Storage of excess electricity to sell in periods when wind/solar power is unavailable and prices 1.3 are elevated 0.5 2023 202
Slide 28: Leveraging existing sites for new FlexGen capacity
FlexGen & hydrogen We are leveraging existing sites to build new FlexGen capacity and decarbonise our existing portfolio Attractive sites for potential FlexGen new builds in Germany FlexGen targets GW, pro rata 19 20 18 Existing grid connection 1 <1 1 3 and other infrastructure ~12 GW (e.g., gas, H2
Slide 29: Lighthouse projects for Europe's H2 economy
FlexGen & hydrogen With our lighthouse projects, we confirm our ambition to be an early-mover in Europe’s H2 economy Lighthouse projects in our core markets Electrolyser targets GW, pro rata 2 OranjeWind (350 MW) Offshore wind & H2 system integration project by 2028 ~0.5 0 2023 2027e 2030e Get H2 Nu
Slide 30: Our global commercial platform complements our asset portfolio
Commercial solutions Our first class global commercial platform perfectly complements our asset portfolio Market analysis: Excellent commercial intelligence provides basis for investment, route-to-market and hedging decisions Commercial asset optimisation: Integrated optimisation of renewables, Flex
Slide 31: We are well positioned to deliver profitable green growth
We are well positioned to deliver profitable green growth Market fundamentals for investments in green technologies remain attractive, 1 despite a currently challenging environment We are in an excellent position given our solid financials, an attractive 2 project pipeline and extensive expertise to
Slide 32: Our long-term financial outlook
Our long-term financial outlook Extract from CMD 2023 (as presented in November 2023) May 2024 Investor presentation
Slide 33: We have delivered profitable growth
We have delivered profitable growth IRR of investment decisions since CMD 2021 • IRRs of past incl. development costs investment decisions significantly exceeded the requirements we set at the CMD 2021 9.0% • Higher IRRs of recent investment decisions CMD 2021 avg. IRR reflect higher cost of guidanc
Slide 34: Strict investment criteria ensure attractive returns
We stick to strict investment criteria to ensure attractive returns IRR requirements EBITDA for investments yields IRR requirements reflect current interest rate Offshore wind environment Commitment to 100 – 300bps Global 7% 11% ~11% spread above WACC Hurdle rates include risk Onshore wind, solar an
Slide 35: Accelerated profitable growth across technologies and regions
We have accelerated our profitable growth across technologies and regions Net cash investments 2024 – 2030 EUR bn Split by ~95% 15% EU technology Taxonomy 35% 10% Offshore wind aligned 55 Onshore wind Solar 20% Batteries Flexible generation 20% & hydrogen Split by 5% 20% regions 35% 55 Germany EUR b
Slide 36: High investments translate into substantial earnings growth
High investments translate into substantial earnings growth Adj. EBITDA1 EUR bn Split by segment in 2030 3% 22% 35% +14% >9.0 >9 6.4 – 7.0 6.7 40% 5.2 – 5.8 2.8 Offshore wind Onshore wind/solar Flexible generation Supply & Trading 2021 2023e 2024e 2027e 2030e 1 Reflects new reporting structure as of
Slide 37: Substantial bottom line growth to 2030
Substantial bottom line growth to 2030 Adj. net income1 EUR bn • Adj. net income reflects strong operational performance, higher depreciation, financial +12% expenses from growth 2.8 – 3.3 3.0 investments and minorities 2.3 1.9 – 2.4 1.0 2021 2023e 2024e 2027e 2030e 1 Reflects new reporting structur
Slide 38: High share of earnings from secured or regulated income streams
High share of earnings from secured or regulated income streams in wind and solar business Gross margin split 2023 - 2025 Wind/solar • 14 years weighted average remaining support tenor1 for 30% 25% wind/solar Merchant PPAs/Tax Credit • 70% secured share also targeted in future 25% 20% CfDs/FiTs Cert
Slide 39: Attractive offtake solutions in our core markets
We are able to secure highly attractive offtake solutions in our core markets Envisaged route-to-market Offshore USA Germany UK Rest of Europe / World wind Tax credits, CfD CfD, PPA, Merchant1 CfD CfD, PPA, Merchant1 Onshore USA Germany UK Rest of Europe / World wind Tax credits, PPA, CfD CfD CfD, P
Slide 40: Actively managing the supply chain
We actively manage the supply chain to deliver projects on time and budget to safeguard returns Our measures Examples We analyse the supply chain and We secured a long-term charter of next-generation identify & manage bottlenecks vessels for the construction of offshore wind farms We manage price ri
Slide 41: Our Growing Green plan is fully financed
Our Growing Green plan is fully financed Funding composition 2024 - 2030 EUR bn 62 62 12 Financial headroom 55 Net cash investments 50 Adj. operating cash flow 7 Dividend Sources of funds Uses of funds May 2024 Investor presentation 41
Slide 42: Committed to a strong investment grade rating
We are committed to a strong investment grade rating Strong investment grade rating Current rating: Today Post 2025 Baa2 ≤3x ≤3.5x Moody’s BBB+ Max. leverage factor of Max. leverage factor of net debt/adj. EBITDA net debt/adj. EBITDA Fitch May 2024 Investor presentation 42
Slide 43: Our transformation leads to continuous dividend growth
Our transformation leads to continuous dividend growth Dividend policy EUR/share • Management committed to grow dividend by 5 - 10% +5 – 10% per annum • Dividend target of 1.10 EUR per share 1.10 for 2024 1.00 0.85 0.90 0.70 1 1 2018 2020 2022 2023 2024 2030 1 Management target May 2024 Investor pre
Slide 44: Growing Green strategy will create significant shareholder value
Accelerated Growing Green strategy will translate into significant shareholder value creation Green Earnings Strict Dividend investments Growth balance sheet commitment 2024 – 2030 2021 – 2030 management €55 bn 14% Strong investment Dividend growth Net cash investments Adj. EBITDA grade rating - of
Slide 45: Appendix
Appendix Extract from CMD 2023 (as presented in November 2023) May 2024 Investor presentation
Slide 46: Disclosure summary
Disclosure summary Strategic and financial outline Additional disclosure Installed net capacity 2030, pro rata >65 GW Net cash investments 2024-2030 €55bn • Offshore wind 35% • Onshore wind 20% Net capacity additions, pro rata 2024 – 2030 >30 GW • Solar 20% • Batteries 10% EBITDA pro forma CAGR 2021
Slide 47: Overview guidance FY2023 and new reporting structure
Overview guidance FY2023, adjustments to new reporting structure and guidance for 2024 € million 2023 Adjustments 2023 PF1 2024 Key changes 2023 vs. 2024 Offshore Wind 1,400 – 1,800 1,400 – 1,800 1,450 – 1,850 and adjustments Onshore Wind/Solar 1,100 – 1,500 1,100 – 1,500 1,500 – 1,900 • Adj. EBITDA
Slide 48: Guidance 2024 and financial preview 2027/2030
Guidance 2024 and financial preview 2027/2030 € million 2024 2027 2030 Offshore Wind 1,450 – 1,850 1,850 – 2,350 3,150 – 3,750 Onshore Wind/Solar 1,500 – 1,900 2,500 – 3,000 3,350 – 3,950 Flexible Generation1 1,800 – 2,200 1,500 – 2,000 1,800 – 2,300 Supply & Trading 100 – 500 100 – 500 100 – 500 Ot
Slide 49: Earnings breakdown in existing and growth business
Earnings breakdown in existing and growth business Adj. EBITDA 2023 - 2030 EUR bn • Offshore Wind: German compression model and decommissioning of Scroby 9.2 Sands • Onshore Wind/Solar: decommissionings and end of support schemes 6.6 -0.2 5.8 -0.5 • Flexible Generation: normalisation of -1.7 earning
Slide 50: Economic characteristics of selected offshore projects
Economic characteristics of selected offshore projects Project name COD Net installed capacity Lease Offtake Others [GW, pro rata] Sofia 2026 1.4 • No upfront lease payments • Inflation-linked CfD (15 years) • Construction costs contracted • Capped CfD obligation (effectively lease Thor 2027 1.1 • M
Slide 51: We are a frequent issuer of green bonds
We are a frequent issuer of green bonds Type • Funding strategy serves RWE’s transition to a green player Green Format • Conventional bonds only on an exceptional basis Volumes • Driven by financing requirements and market conditions Avg. €3.0 – 3.5 bn p.a. Tenors • Aiming to achieve a balanced matu
Slide 52: Your contacts in Investor Relations
Your contacts in Investor Relations Important Links Financial Calendar ADR programme available • Annual and interim reports & statements Further information on our homepage • 14 Aug 2024: Interim report on the first half of 2024 • Investor and analyst conferences RWE shares/ADR • 13 Nov 2024: Interi