Rwe Ag · XETR:RWE
Rwe — Investor Presentation (September 2010)
22 slides from Rwe's investor presentation, September 2010
Slide 1: Steering RWE through a challenging environment
Steering RWE through a challenging environment Summer 2010 (as of September 2010)
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: Good start to 2010 continued
Good start to 2010 continued Strong operating performance: EBITDA +22%, operating result +21%, recurrent net income +23% Solid earnings contribution from German Power Generation, Central Eastern / South Eastern Europe and Essent Joint Venture established for construction and operation of 576 MW Gwyn
Slide 4: Uncertainties from nuclear debate put our mid-term outlook under review
Uncertainties from nuclear debate put our mid-term outlook for 2012/13 under review 2008 reported forecast 2012 2009 reported forecast 2013 € million versus 2008 € million versus 2009 ew EBITDA No guidance 9,165 above 2009 Operating result 6,826 r r CAGR + ca. 5% e evi 7,090 above 2009 Und Recurrent
Slide 5: Our strategy to reduce the impact of CO2 on our P&L in 2013
Our strategy to reduce the impact of CO2 on our P&L in 2013 (As of February 2010. Mid-term targets are under review; announced in August 2010) Certificates to be Operating Result Offsetting purchased1 2009 – 2013 factors in million t p.a. Organic growth/ 160 – 170 +100 2013 above 2009 High earnings
Slide 6: Continuous investment commitment: €28 bn capex programme 2010–2013
Continuous investment commitment: €28 bn capex programme 2010 – 2013 (As of February 2010. Mid-term targets are under review; announced in August 2010) €7.0 bn p.a. +/- 10% Committed capex Other €100m p.a. 95% 80% Upstream €1,000m p.a. 55% 50% Renewables €1,400m p.a. 2010 2011 2012 2013 CEE €900m p.
Slide 7: Essent further increases robustness of our portfolio
Essent further increases robustness of our portfolio – integration is well underway Generation Retail Essent’s stand-alone > Increased exposure to EBIT and EBITDA CAGR > Integration of RWE’s Dutch flexible mid-merit portfolio customer portfolio into 2008 – 2012 of > Transfer of Eemshaven Essent appr
Slide 8: Growing number of cancellations increases efficiency gap and value of new-build projects
Growing number of cancellations increases efficiency gap and value of our new-build projects Flexibility of generation system (Germany) > Rising share of renewables generation will lead to: GW Ramp-up capability of power + 70 plant portfolio in GW per hour – Increase of load swings in the system + 6
Slide 9: Diverse new-build programme will enhance flexibility and reduce specific CO2 exposure
Diverse new-build programme will enhance flexibility and reduce specific CO2 exposure Generation portfolio 2009 vs. power plants under construction Renewables Low 0 g/kWh Nuclear 0 g/kWh 2.0 GW 6 GW 0 g/kWh 350 g/kWh 2.5 GW 6.5 GW (2009) Gas 480 g/kWh 9 GW Pumped CO2 intensity (2009) Storage Greener
Slide 10: Strategy for fossil fired generation: growth, higher flexibility, less CO2 emissions
Strategy for fossil fired generation: growth, higher flexibility, less CO2 emissions Comparison of ramp capacities New hard coal-fired 1,600 MW plant – (old and new hard coal / CCGT) 2 flexible 800 MW units for mid-merit regime MW Hard coal Old New Max. cap. Max. ~600 cap. MW ~800 MW 800 Min. cap. M
Slide 11: Power plant new build programme: making good progress
Power plant new build programme: making good progress Renewables Projects (RWE Innogy) Conventional New Builds (Power, npower, Essent) Offshore Wind Germany Germany > Nordsee Ost (295 MW): > Neurath (2 x 1,050 MW): First Bremerhaven chosen as offshore compression test in June base port in May 2010;
Slide 12: ...as are our projects in gas upstream and midstream
...as are our projects in gas upstream and midstream Upstream Gas & Oil (RWE Dea) Gas Midstream (Nabucco) Algeria > Reggane (n/a1): approval of UK 2.6 m Declaration of Commerciality Germany 1.1 m Russia from authorities expected for Czech Rep. 2.3 m third quarter of 2010 Netherlands 1.9 m Hungary* 2
Slide 13: RWE's portfolio is already today financially slightly long CO2
Compared to the marginal plant RWE‘s portfolio is already today financially slightly long CO2 Pass-through factor > Factor by which CO2 price is reflected t/MWh in power price 0,9 > Set by marginal plants which on average have a 0,8 higher emission factor than the market portfolio 0,7 Long RWE speci
Slide 14: Managing CO2: We complement physical measures by comprehensive financial optimisation
Managing CO2: We complement physical measures by comprehensive financial optimisation > Our large low carbon new-build programme as well as our investments in renewables will lead to substantial improvement of our CO2 intensity until 2013 > For phase 3 (2013-2020) we aim to reach a “market average”
Slide 15: Physical measures: New-build projects can reduce our CO2 exposure by some 14% by 2013
Physical measures: New-build projects can reduce our CO2 exposure by some 14 % by 2013 CO2 reduction by 2013 Shutdowns / New-build projects load factor reductions Relative Absolute Lingen 887 MW 0.34t/MWh Fossil mix 4 TWh 0.75t/MWh -0.41 t/MWh -2 m t p.a. BoA Neurath 2,100 MW 0.95t/MWh Lignite 2,160
Slide 16: Non-physical measures: Balancing CO2 risks
Non-physical measures: Balancing CO2 risks CDM/JI > Allowance to cover up to 100 million tons via CDM/JI projects > Secured projects to procure 75 million tons of CO2 (44 million tons of CO2 adjusted for project risks) > Average achieved project price below current market price for Certified Emissio
Slide 17: Maximising commercial value through asset optimisation of generation capabilities
Maximising commercial value through asset optimisation of generation capabilities T-1 year T-0 T-3 years “Fully hedged” “Real time” Forward Asset Selling Optimisation RWE AG Asset companies RWE Supply & Trading > Overall hedge > Optimise commercial > Integrated optimisation of power plant strategy a
Slide 18: Forward selling: Prudent hedging secures predictable returns of our generation fleet
Forward selling: Prudent hedging secures predictable returns of our generation fleet (Base load forwards in €/MWh) 100 90 2010 forward 80 70 60 50 40 >> 90% >> 10% 10% sold sold >> 40% 40% sold sold >> 60% 60% sold sold >> 90% 90% sold sold 90% sold sold 30 100 90 2011 forward 80 70 60 50 40 >> 20%
Slide 19: Asset optimisation: Realising a premium to the forward price
Asset optimisation: Realising a premium to the forward price As the generation fleet margin has already been secured via forward selling, we can decide every day if we produce the contracted power at the locked-in spread or buy the power in the market instead An illustrative example RWE sold forward
Slide 20: RWE's gas procurement portfolio is only partly exposed to the gas-to-oil spread
RWE’s gas procurement portfolio is only partly exposed to the gas-to-oil spread Long-term oil indexed purchase contracts (take-or-pay) Own production 31% Russia NBP 31% Norway approx. 50 bcm p.a. 16% Germany TTF 22% The Netherlands > Our gas procurement portfolio is solely managed by RWE Supply & Tr
Slide 21: Outlook for 2010
Outlook for 2010 2009 2010 € million forecast EBITDA 9,165 + 5 – 10% Operating result 7,090 + ca. 5% Recurrent net income 3,532 + ca. 5% Dividend € 3.50 Payout ratio 50% – 60%1 Capex on fixed assets €bn 5.9 ca. 7.0 1 Based on recurrent net income 21
Slide 22: Always be informed about RWE...
Always be informed about RWE… To be always updated, please have a look at our webpage www.rwe.com/investorrelations > 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-repo