Rwe Ag · XETR:RWE
Rwe — Investor Presentation (January 2016)
33 slides from Rwe's investor presentation, January 2016
Slide 1: Transforming RWE. One Group – Two companies.
Transforming RWE. One Group – Two companies. (as of January 2016)
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: RWE – an attractive value proposition
RWE – an attractive value proposition Attractive portfolio Stable financials > Pure utility with leading market position and > Progress in strengthening balance sheet regionally focused strategy > Streamlined and disciplined investment > Highly cost-efficient and modernised power approach plant port
Slide 4: Entering the next stage
Entering the next stage Execution of Implementation of Transformation of efficiency programme lean functional setup corporate structure > In 2012, RWE started a > Decision to closer align > Consequently, RWE is now Group-wide efficiency corporate setup with business transforming its structure to pro
Slide 5: Formation of a unique and leading European utility
Formation of a unique and leading European utility > RWE to establish a new leading European utility comprising the grid, retail and renewables businesses RWE AG NewCo > Conventional power generation shareholders shareholders and trading businesses retained as separate functional units with 100% RWE
Slide 6: New structure provides three upsides for RWE AG
New structure provides three upsides for RWE AG Clear strategic > Creation of homogenous business portfolios with clear strategic focus focus > Increased management attention to address specific challenges and opportunities of different businesses Value > Unlock value through enhanced transparency v
Slide 7: NewCo: Unique opportunity to invest in a leading European utility
NewCo: Unique opportunity to invest in a leading European utility of tomorrow’s energy world Unique new utility stock Attractive financial profile > Unique new utility stock with exposure mainly > Strong and stable cash flow generation to stable European markets > Currently ~65% EBITDA derived from
Slide 8: NewCo: Strong downstream business with attractive renewables footprint
NewCo: Strong downstream business with attractive renewables footprint Grid Retail Renewables > RWE operates 550,000 km of > Strong retail organisation with > Renewables portfolio of more grid assets in five European 23m customers in 12 European than 3.5 GW capacity mainly in markets (GER, PL, CZ, H
Slide 9: NewCo: Solid platform for growth
NewCo: Solid platform for growth Renewables > Execution of existing offshore wind pipeline and development of projects > Expansion of onshore wind capacity > Build up of utility scale PV business > Development of new products and business models Grid > Maintenance and expansion of distribution grid
Slide 10: RWE AG: Focused business portfolio with clear management mandate
RWE AG: Focused business portfolio with clear management mandate Conventional Power Generation Supply & Trading > Highly efficient and modernised power > Commercial asset optimisation of plant portfolio generation fleet – full exploitation of optionality > Financially manageable phase-out of nuclear
Slide 11: RWE AG: Focus on maintaining positive free cash flow in conventional power generation
RWE AG: Focus on maintaining positive free cash flow in conventional power generation German base load forward Opportunity of power price increase Measures to offset commodity price drop Early 2015: €32/MWh1 > Further optimisation of maintenance strategy including reduction of day-to-day capex and o
Slide 12: Two companies with distinct financial profile for investors
Two companies with distinct financial profile for investors RWE AG NewCo Full Consolidation of NewCo in RWE AG €6.1bn-6.4bn €4.3bn-4.5bn 2015 EBITDA outlook NewCo Grid Generation & Retail Trading Renewables Capex outlook Mainly maintenance ~1.5x depreciation Leverage target Investment grade rating 3
Slide 13: Majority of overall capex will be invested in NewCo
Majority of overall capex will be invested in NewCo – IPO proceeds to strengthen NewCo growth Overall annual capex spend post NewCo IPO Average annual capex Indicative split spend of Group post IPO €bn Renewables IPO proceeds intended to Growth be used mainly for growth NewCo Grid investments at New
Slide 14: Efficient capital structure and allocation
Efficient capital structure and allocation RWE AG (ex NewCo) NewCo Conventional Supply & Trading Grid Retail Renewables power generation Nuclear and Senior bonds Pension and Pension and Intercompany Other financial mining and other provisions other provisions loans debt provisions hybrid capital Eco
Slide 15: RWE AG: Excellent access to the capital market is key
RWE AG: Excellent access to the capital market is key Significant reduction of net financial debt Achievements € billion Strong decrease of net financial debt 29.9 33.0 30.7 31.03 < 2014 Net debt Leverage Net financial debt/ 3.5x 3.5x 3.5x2 3.8x2 > 2014 factor1 EBITDA ≤1x (2015e) Ample liquidity aft
Slide 16: RWE AG: Outlook for 2015
RWE AG: Outlook for 2015 2014 reported 2015e2 € million EBITDA 7,131 6,100 – 6,400 Operating 4,017 3,600 – 3,900 result Adjusted 1,282 1,100 – 1,300 net income1 Dividend €1.00/share Oriented towards growth opportunities, indebtedness and earnings situation. The dividend for 2014 serves as a referenc
Slide 17: RWE AG: Dividend policy reflects the general business situation
RWE AG: Dividend policy reflects the general business situation Dividend of the preceding year serves as a reference point for the dividend proposal Earnings situation Dividend Leverage Growth and cash flow opportunities situation 17
Slide 18: Back-up charts
Back-up charts The energy to lead
Slide 19: RWE AG’s asset base remains unchanged in light of the envisaged transaction
RWE AG’s asset base remains unchanged in light of the envisaged transaction illustrative Capital ~10% stake ~10% IPO increase new investors RWE AG’s assets 100% stake in ~90% RWE stake grid, supply & in NewCo renewables GenCo + GenCo+ Trading Trading Today Capital increase/ NewCo IPO 19
Slide 20: Grid business with excellent track record and growing RAB
Grid business with excellent track record and growing RAB Key facts, 2014 Business highlights > Grid length (thousand km) Position > Electricity 440 > Leading positions in core markets (e.g., largest electricity > Gas 110 DSO in Germany, largest gas DSO in Czech Republic) > Strong track record in gr
Slide 21: Retail activities well-positioned in many countries
Retail activities well-positioned in many countries Key facts, 2014 Business highlights > Customers (million) Position > Electricity, of which 16.0 > Largest electricity retailer in Germany, NL/Belgium and > Germany 6.7 amongst top 3 in UK and Hungary > UK 3.4 > Largest gas retailer in Czech Republi
Slide 22: Innogy amongst Top 5 offshore wind players
Innogy amongst Top 5 offshore wind players, heading to leverage pipeline for future growth Key facts Business highlights > Installed capacity (GW) Current position > Renewables, of which >3.5 > Amongst top 5 players in offshore wind globally; Gwynt > Offshore wind ~1.0 y Môr and Nordsee Ost recently
Slide 23: Overview of renewable growth projects
Overview of renewable growth projects Projects in development Overview of key project Offshore wind Offshore wind > Galloper (UK, 20171) – 336 MW with Macquarie, Green Investment Bank & Siemens Onshore wind > Nordsee One (GER, 20171) – 332 MW with Northland Power Hydro > Kaskasi II (GER, 20191) – 21
Slide 24: Efficiency programme ahead of schedule
Efficiency programme ahead of schedule Net benefit to operating result Net benefit by division € million ~ 10% Holding and cross ~ 50% divisional effects Generation 400 100 100 ~ 10% Trading/ 400 Gas Midstream ~ €2bn by 2017 800 200 ~ 30% Supply/Distribution 2012 2013 2014 2015e 2016e 2017e 24
Slide 25: Development of total controllable costs (TCC)
Development of total controllable costs (TCC) Continuous reduction of TCC (nominal values) €10.8bn €10.1bn €8.7bn ~ €8.5bn 0.5 0.2 0.4 1.0 0.1 0.1 5.5 4.9 3.9 3.9 5.3 5.2 4.8 4.6 2012 2013 2014 2017e Personnel costs Other TCC Operational cost improvement Portfolio and other effects 25
Slide 26: RWE AG: 2015 divisional outlook for the operating result
RWE AG: 2015 divisional outlook for the operating result € million 2014 reported 2015 forecast Conventional Power Generation1 979 Significantly below 2014 Supply/Distribution Networks Germany 1,871 Moderately below 2014 Supply NL/B 146 Significantly above 2014 Supply UK 227 Significantly below 2014
Slide 27: Overview of capacity measures
Overview of capacity measures Measure Plant MW1 Fuel Location Date Decom- Amer 8 610 Hard coal NL Q1-2016 missioning Goldenbergwerk 110 Lignite DE Q3-2015 Westfalen C2 285 Hard coal DE Q1-2016 Gersteinwerk K2 610 Hard coal DE Q1-2019 Long-term Claus C 1,300 Gas NL Q3-2014 mothballing3 Moerdijk 2 430
Slide 28: RWE’s forward hedging of conventional electricity production
RWE’s forward hedging of conventional electricity production (German, Dutch and UK portfolio) As of 30 September 2015 >30% >10% >40% >10% >40% >20% >50% >30% >60% >40% >60% >50% >80% >60% >90% >70% >90% >70% 2015 forward 31 Dec. 2012 31 March 2013 30 June 2013 30 Sep. 2013 31 Dec. 2013 31 March 2014
Slide 29: Clean Dark and Spark Spreads – 2016 forward
Clean Dark (CDS) and Spark Spreads (CSS) – 2016 forward for Germany, UK and Netherlands1 Trading year 2015 Germany UK2 Netherlands Cal14 Cal15 Cal16 Cal14 Cal15 Cal16 Cal14 Cal15 Cal16 €/MWh €/MWh Ø22.49 20 20 Ø16.97 15 15 Ø11.36 Ø11.43 Ø11.60 10 10 Ø8.79 Ø 4.86 Ø9.18 Ø6.63 5 5 Ø3.65 Ø2.03 Ø5.68 0 0
Slide 30: Capital market debt maturities and sources of financing
Capital market debt maturities and sources of financing Capital market debt maturities1 Sources of funding1 € bn € bn Syndicated loan facility €0.0bn out of €4.0bn 2.0 2,0 18.0 18,0 (until March 2020) (Back up liquidity) 1,5 1.5 13,5 13.5 Commercial papers $0.0bn out of $5.0bn 1,0 9,0 (up to 1 year)
Slide 31: Amount of provision
Net debt mainly driven by provisions with ultra-long duration Net debt as of 30 Sept. 2015 comprises €6.6bn net financial debt (incl. 50% of hybrids) and €19.2bn provisions. Provisions not subject to financial covenants, undertakings, cross default clauses, or rating triggers € bn 16 Amount of provi
Slide 32: Keep up with RWE …
Keep up with RWE … Follow us on twitter.com/RWE_IR and have a look at www.rwe.com/ir Important links Financial Calendar Annual and Interim Reports 08 March 2016 http://www.rwe.com/ir/reports Annual Report on fiscal 2015 Investor and Analyst Conferences 20 April 2016 http://www.rwe.com/ir/investor-an
Slide 33: RWE Investor Relations – contacts
RWE Investor Relations – contacts Contacts for Institutional Investors & Financial Analysts Dr. Stephan Lowis Martin Vahlbrock Gunhild Grieve Dr. Holger Perlwitz Vice President Investor Relations Tel.: +49 201 12-15055 Tel.: +44 207 015-5459 Tel.: +49 201 12-15141 Tel. +49 201 12-15031 martin.vahlbr