Rwe Ag · XETR:RWE
Rwe — Investor Presentation (May 2015)
34 slides from Rwe's investor presentation, May 18, 2015
Slide 1: Paving the way for growth with continued focus on financial discipline
Paving the way for growth with continued focus on financial discipline (as of May 2015)
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 play with leading market > Progress in strengthening balance position and regionally focused sheet strategy > Streamlined and disciplined > Balanced asset portfolio with strong investment approach downstream
Slide 4: Main messages
Main messages Financial performance first quarter: EBITDA -3.4%, operating result -5.1%, recurrent net income +10.0% Successful divestment of RWE Dea for an EV of €5.1bn Successful placement of €1.25 bn hybrid bond Adoption of new dividend policy: from 2015 onwards, the dividend proposal will be ori
Slide 5: On our way to financial robustness as base for long-term growth
On our way to financial robustness as base for long- term growth What we have achieved so far What we are focusing on > Establishment of European generation business to drive cost Identification and fostering 1 efficiencies and portfolio measures of growth areas > First two waves of efficiency progr
Slide 6: Changing energy market offers growth potential
1 Areas of growth Changing energy market offers growth potential Renewables Grids Retail > Focus on on- and off- > Best in class grid > Strong Pan European shore wind management Retail organisation with > ~ €1 bn in growth capex > Investments of > €3 bn 23m customers (2015-2017) between 2015 and 201
Slide 7: Increased earnings pressure on conventional power generation
2 Generation review Increased earnings pressure on conventional power generation As of March 20141 As of January 20152 OR > c. > 50% – 60% c. > 25% – 35% WACC3 Optimi- sation Market OR > 0 c. > 60% – 70% decline c. > 40% – 50% FCF3 > 0 c. > 70% – 80% c.>> 55% – 65% 1 Rough profitability analysis for
Slide 8: Conventional Power Generation: mark-to-market free cash flow neutral
2 Generation review Conventional Power Generation: mark-to-market free cash flow neutral € billion 3.3 3.0 2.0 Mark-to-market (m-t-m)1 1.0 1.0 OR m-t-m Efficiencies before 2012-2017 efficiencies 0.0 -1.0 2012 2014 Depreciation EBITDA Other Day-to-day Free Operating result (OR) cash flow capex cash f
Slide 9: Overview of capacity measures
2 Generation review 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 Q1-2017 Long-term Claus C 1,300 Gas NL Q3-2014 mothbal
Slide 10: Efficiency programme ahead of schedule, additional measures contribute another €500 million
3 Efficiency programme Efficiency programme ahead of schedule, additional measures contribute another €500 million Net benefit to operating result Net benefit by division € million ~ 10% Holding and cross ~ 50% 400 divisional effects Generation 100 100 ~ 10% Trading/ 400 Gas Midstream ~ €2 bn by
Slide 11: Next wave of efficiencies entails a wide range of performance measures
3 Efficiency programme Next wave of efficiencies entails a wide range of performance measures Additional measures focus on cost reduction and cash flow optimisation Costs > Implementation of lean programme and improved end-to-end processes > Consolidation of IT landscape > Reduction of costs of exte
Slide 12: Development of total controllable costs (TCC)
3 Efficiency programme Development of total controllable costs (TCC) Continuous reduction of TCC (nominal values) €10.8 bn €10.1 bn €8.7 bn ~ €8.5 bn 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 othe
Slide 13: Capex programme reduced to maintenance level
4 Financial discipline Capex programme reduced to maintenance level Further growth projects have to be financed debt-neutral, e.g. by the disposal of other assets or partnering solutions € billion > Approx. €6.5 – 7.0 bn capex ~ 1.5 – 2.0 Conventional power generation programme for 2015 – 2017: ~ €1
Slide 14: Positive cash balance reached 1 year ahead of plan
4 Financial discipline Positive cash balance reached 1 year ahead of plan Cash flows from operating activities to cover investments and dividends € billion -2.7 -0.7 +1.1 <0 >0 Cash balance 7.1 5.5 5.6 4.4 4.8 4.5 ≥ ≤ 2012 20131 20141 2015e 2016e Capex in property, plant & equipment and financial as
Slide 15: Excellent access to the capital market is key to us
4 Financial discipline Excellent access to the capital market is key to us Significant reduction of net financial debt Achievements € billion > Strong decrease of net 29.9 33.0 30.7 31.03 < 2014 Net debt financial debt Leverage 3.5x 3.5x 3.5x2 3.8x2 > 2014 > Net financial debt/ factor1 EBITDA <1x (2
Slide 16: Outlook for 2015
Outlook for 2015 € million EBITDA 7,131 6,100 – 6,400 Operating 4,017 3,600 – 3,900 result Recurrent 1,282 1,100 – 1,300 net income Dividend €1.00/share Oriented towards growth opportunities, indebtedness and earnings situation. The dividend for 2014 serves as a reference point. 2014 2015e1 reported
Slide 17: Dividend policy reflects whole economic situation
Dividend policy reflects whole economic 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's mid-term business profile drivers
RWE’s mid-term business profile drivers GENERATION TRADING DISTRIBUTION SUPPLY > Selective growth in > Ongoing focus on value > GER: Stable regulatory > Focus on value enhancing renewable energy extraction in commercial environment for the next products and services asset optimisation regulatory per
Slide 20: More customers will produce self-generated power and manage their consumption
More customers will produce self-generated power and will be enabled to manage their consumption Changing energy landscape Trends in retail markets Household » Increase in decentral energy customer production from household customers Virtual » Higher incentivisation of power plants “prosumers” to ma
Slide 21: RWE in European downstream markets
RWE in European downstream markets Market share 2014 Sales to end-customers and redistributors RWE’s gas customers3 by country [‘000] Σ = 7,155 2,169 Germany 11% 1,969 1,290 1,397 Netherlands/ 11% Belgium UK 5% 211 119 Central and Germany Nether- Belgium UK Czech Slovakia 34% Eastern Europe1 lands R
Slide 22: 2015 divisional outlook for the operating result
2015 divisional outlook for the operating result € million 2014 2015 forecast versus 2014 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 Moderately above 2014 Central
Slide 23: Operating result outlook for fiscal year 2015
Operating result outlook for fiscal year 2015 Trend for major value drivers in fiscal year 2015 Operating result (OR) 2014 €4.0 bn Efficiency programme c. €100 million envisaged for 2015 Depreciation Lower depreciation as 2014 includes impairments Electricity generation margins (D;NL;UK); volume
Slide 24: RWE's forward hedging of conventional electricity production
RWE’s forward hedging of conventional electricity production (German, Dutch and UK portfolio) As of 31 March 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 30
Slide 25: RWE successfully qualified approx. 8 GW for the UK capacity market
RWE successfully qualified approx. 8 GW for the UK capacity market Plant MW1 Plant type > First UK capacity auction for winter 2018/19 settled at Aberthaw 1,486 Coal/OCGT £19.40/kW (2012 money). Didcot B 1,364 CCGT > The result was broadly in line with Great Yarmouth 361 CCGT our expectations. Littl
Slide 26: Germany: Clean Dark and Spark Spreads
Germany: Clean Dark (CDS) and Spark Spreads (CSS) 2014 forward 2015 forward 2016 forward 16 12 Ø 8.79 8 Ø 6.63 4 Ø 5.08 0 Ø -5.38 Ø -4.87 -4 -8 Ø -6.84 -12 -16 Trading year 2013 Trading year 2014 Trading year 2015 3 4 5 3 4 5 3 4 5 13 14 15 -1 -1 -1 r-1 r-1 r-1 l- 1 l- 1 l- 1 n- n- n- kt kt kt Ju Ju
Slide 27: NL: Clean Dark and Spark Spreads
NL: Clean Dark (CDS) and Spark Spreads (CSS) 2014 forward1 2015 forward1 2016 forward 20 Ø 11.43 Ø 11.78 15 10 Ø 9.18 5 0 Ø -7.46 Ø -6.32 -5 -10 Ø -7.52 -15 -20 Trading year 2013 Trading year 2014 Trading year 2015 3 4 5 3 4 5 3 4 5 13 14 15 -1 -1 -1 r-1 r-1 r-1 l- 1 l- 1 l- 1 n- n- n- kt kt kt Ju J
Slide 28: UK: Clean Dark and Spark Spreads
UK: Clean Dark (CDS) and Spark Spreads (CSS) 2014 forward1 2015 forward1 2016 forward1 28 Ø 22.49 24 Ø 16.97 20 16 12 Ø 12.01 8 Ø 5.12 Ø 2.03 Ø 3.65 4 0 Trading year 2013 Trading year 2014 Trading year 2015 3 4 5 3 4 5 3 4 5 13 14 15 -1 -1 -1 r-1 r-1 r-1 l- 1 l- 1 l- 1 n- n- n- kt kt kt Ju Ju Ju Ap
Slide 29: Development of net debt
Development of net debt € billion Cash flows Capex on Dividends1 Divestments1 Change Others from operat- property, plant in pension, including f/x ing activities1 and equipment nuclear, effects and intangible mining assets and provisions1 financial assets1 -6.0 31.0 +0.2 Of which +0.4 +0.6 -5.3 from
Slide 30: Capital market debt maturities and sources of financing
Capital market debt maturities and sources of financing Capital market debt maturities1 Strong sources of financing € billion Fully committed syndicated loan For liquidity 2.5 2,5 20 20 (€4.0 bn up back-up to March 2020) €0.0 bn 2.0 2,0 16 16 1,5 1.5 12 12 Commercial paper $0.0 bn ($5.0 bn) (up to 1
Slide 31: RWE's major investment projects
RWE’s major investment projects RWE Capex share (€ bn) 2013 2014 2015 2016 2017 2018 Conventional new build power plant programme (capex at 100% share) Hamm (hard coal, 1,528 MW)1 77% 2.5 Unit E (764 MW) Eemshaven (hard coal/biomass, 1,554 MW)2 100% 3.1 Units A&B 1 The date for bringing unit D (764
Slide 32: The fuel mix of European electricity generators 2013
The fuel mix of European electricity generators 2013 RWE has one of the most balanced generation portfolios of European electricity generators (installed capacity) 100% 80% 60% Hydro/ Other 40% Gas Hard Coal 20% Lignite Nuclear 0% Centrica CEZ EDF Enel E.On GDF Iberdrola RWE SSE Share in power plant
Slide 33: The fuel mix of European electricity generators 2013
The fuel mix of European electricity generators 2013 RWE has one of the most balanced generation portfolios of European electricity generators (generation output) 100% 80% 60% Hydro/ Other 40% Gas Hard Coal 20% Lignite Nuclear 0% Centrica CEZ EDF Enel E.On GDF Iberdrola RWE SSE Share in electricity
Slide 34: Keep up with RWE …
Keep up with RWE … Follow us on twitter.com/RWE_IR and have a look at www.rwe.com/ir Financial calendar http://www.rwe.com/web/cms/en/110614/rwe/investor-relations/events/calendar/ Annual and Interim Reports http://www.rwe.com/web/cms/en/110822/rwe/investor-relations/reports/ Investor and Analyst Co