Rwe Ag · XETR:RWE
Rwe — Investor Presentation (March 2024)
54 slides from Rwe's investor presentation, Mar 14, 2024
Slide 1: Growing Green
GROWING GREEN March 2024 Update after FY 2023 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: FY 2023 results
FY 2023 results March 2024 Investor presentation
Slide 4: We are well on our way to becoming a global leader in green energy
We are well on our way to becoming a global leader in green energy Step up of investments in Strong operational Significant progress green growth performance in decarbonisation >2.5x +33% -27% 11.4 8.4 83 CEB 6.3 61 6.3 acquisition 4.4 5.1 Net cash investments Adj. EBITDA CO2 emissions in EUR bn in
Slide 5: We are committed to guidance, despite strong decline in European power prices
We are committed to guidance, despite strong decline in European power prices Power prices Guidance for FY 2024 5.2-5.8 120 EUR/MWh 110 100 1.9-2.4 90 80 Adj. EBITDA Adj. net income 70 in EUR bn in EUR bn 60 Given current power price environment, earnings Nov’23 Dec’23 Jan’24 Feb’24 expected to be a
Slide 6: 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 7: Flexible generation with increasing share of secured revenues from capacity payments
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 8: Our recent capacity additions significantly increase secured revenues
Our recent capacity additions significantly increase secured revenues Wind/Solar 2023 capacity additions Wind/Solar projects currently under construction in GW in GW Price exposed Price exposed Thor <5% <5% 15% Thor with 1.1 GW of capacity 4.2 GW 6.8 GW PPAs to be signed ahead of COD >95% >80% Secur
Slide 9: Our investments will drive strong bottom line growth
Our investments will drive strong bottom line growth – capital allocation will be constantly reconsidered Adj. earnings per share in EUR • Strict monitoring of investment environment with clear commitment to +8% ~4.0 profitability • Capital allocation will be ~3.0 constantly reconsidered in light of
Slide 10: Strong earnings development across all core segments in 2023
Strong earnings development across all core segments in 2023; exceeding full year group guidance Core adj. EBITDA in EUR m +2,114 • Offshore Wind earnings up on the back of 7,673 better wind conditions, capacity additions and higher realised power prices 1,664 • Onshore Wind/Solar increased due to 5
Slide 11: Adjusted net income increased reflecting strong operational performance
Adjusted net income increased reflecting strong operational performance Adj. net income in EUR m • Adj. EBITDA driven by strong operational FY 2021 2022 FY 2023 2022 performance in 2023 and negative one- off in 2022 Adj. EBITDA 6,310 8,378 • Adj. depreciation increased in line with FY 2023 growth in
Slide 12: Net debt increases due to CEB acquisition, green growth and timing effects
Net debt increases due to CEB acquisition, green growth and timing effects from hedging and trading activities Development of net debt in FY 2023 in EUR bn (+ net debt/- net assets) 6.6 0.7 2.5 0.9 5.1 -1.6 -7.3 6.3 Net debt Adj. operating Acquisition Net cash Dividends Other changes in Changes in N
Slide 13: Green generation portfolio increased by 6.3 GW in 2023
Green generation portfolio increased by 6.3 GW in 2023 Development of our green generation portfolio GW pro rata +8.1 43.6 1.1 0.2 3.1 1.2 35.5 2.5 6.3 29.2 31 Dec 2022 Capacity 31 Dec 2023 Offshore Onshore Solar Batteries Flexible Total additions Wind Wind Generation & H2 Capacity in operation Proj
Slide 14: Our long-term strategy
Our long-term strategy Extract from CMD 2023 (as presented in November 2023) March 2024 Investor presentation
Slide 15: 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 March 2024 Investor presentation 15
Slide 16: 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 March 2024 Investor presentation 16
Slide 17: 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 18: We are continuing our profitable growth on the back of excellent capabilities
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 19: 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 20: We are 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 21: 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 March 2024 Investor presentation 21
Slide 22: Our extensive pipeline allows the 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 23: 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 24: Our build-out plan until 2030 is secured by attractive and clearly defined projects
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 25: We are driving innovation and are well positioned to meet 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 26: Excellent market position to accelerate onshore wind & solar build-out
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 27: 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 28: Innovation and sustainability are a key part of our 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 29: 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 30: We are leveraging existing sites to build 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 31: With our lighthouse projects, we confirm our ambition in 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 32: Our first class global commercial platform perfectly 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 33: 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 34: Our long-term financial outlook
Our long-term financial outlook Extract from CMD 2023 (as presented in November 2023) March 2024 Investor presentation
Slide 35: 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 36: We stick to strict investment criteria to 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 37: We have accelerated our 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 38: 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 39: 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 40: 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 41: We are able to secure highly 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 42: We actively manage the supply chain to deliver projects on time and budget
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 43: 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 March 2024 Investor presentation 43
Slide 44: We are 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 March 2024 Investor presentation 44
Slide 45: 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 March 2024 Investor p
Slide 46: Accelerated Growing Green strategy will translate into significant shareholder value creation
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 47: Appendix
Appendix Extract from CMD 2023 (as presented in November 2023) March 2024 Investor presentation
Slide 48: 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 49: Overview guidance FY2023, adjustments to new reporting structure and guidance for 2024
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 50: 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 51: 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 52: 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 53: 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 54: Your contacts in Investor Relations
Your contacts in Investor Relations Important Links Financial Calendar • Annual and interim reports & statements • 03 May 2024: Annual General Meeting ADR programme available • 15 May 2024: • Investor and analyst conferences Interim statement on the first quarter of 2024 Further information on our h