Rwe Ag · XETR:RWE
Rwe — Q1-Q3 2010 Earnings Presentation
28 slides from Rwe's earnings presentation, Nov 11, 2010
Slide 1: Investor and Analyst Conference Call Q1-Q3 2010
Investor and Analyst Conference Call Q1-Q3 2010 Essen, November 11, 2010 Rolf Pohlig Chief Financial Officer Stephan Lowis Vice President Investor Relations RWE AG | Q1-Q3 2010 Conference Call | November 11, 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 development in 2010 continued
Good development in 2010 continued Strong operating performance: EBITDA +14%, operating result +11%, recurrent net income +11% Solid earnings contribution from the Germany, Central Eastern and South Eastern Europe, Upstream Gas & Oil and Netherlands/Belgium Divisions German government decides to int
Slide 4: RWE Group key performance indicators
RWE Group key performance indicators January – September Change € million 2010 2009 in % External revenue 38,510 33,769 +14.0 Cash flows from operating activities 4,404 4,126 +6.7 EBITDA 7,914 6,966 +13.6 Operating result 6,129 5,534 +10.8 Non-operating result -777 219 - Financial result -1,226 -1,4
Slide 5: Performance of the Germany Division (I) Power Generation
Performance of the Germany Division (I) Power Generation Business Area (RWE Power) Q1 – Q3 operating result: +17.1% € million + Lower fuel prices (ca. +€ 510 million) and costs associated with CO2 certificates (ca. +€ 190 million) 3,172 2,708 Lower realised electricity prices but higher volumes (ca.
Slide 6: Forward selling by RWE Power in the German market
Forward selling1 by RWE Power in the German market (Base-load forwards in €/MWh) 100 90 2010 forward 80 70 60 50 40 > 10% sold > 40% sold > 60% sold > 90% sold > 90% sold 30 100 90 2011 forward 80 70 60 50 40 > 20% sold > 50% sold > 70% sold > 80% sold > 85% sold 30 100 90 2012 forward 80 70 60 50 4
Slide 7: Performance of the Germany Division (II) Sales and Distribution Networks
Performance of the Germany Division (II) Sales and Distribution Networks Business Area Q1 – Q3 operating result: +5.6% € million Sales + Efficiency enhancements 1,218 1,286 + Slightly improved gas margins Distribution networks + Positive volume effect due to economic recovery Refunding of excess pro
Slide 8: Performance of the Netherlands/Belgium Division (Essent)
Performance of the Netherlands/Belgium Division (Essent) Q1 – Q3 operating result: - € million + First-time consolidation of Essent + RWE Energy Nederland (REN) included in “other/consolidation” in 274 Q1-Q3 2009 + Operating performance: higher gas sales mainly due to weather effects - Upfront costs
Slide 9: Performance of the United Kingdom Division (RWE npower)
Performance of the United Kingdom Division (RWE npower) Q1 – Q3 operating result: -23.8% € million Power generation Reduced generation margins and lower income from short-term position management + Lower maintenance costs 147 112 One-off items with positive impact in Q3 2009 Retail + Higher resident
Slide 10: Performance of the Central Eastern and South Eastern Europe Division
Performance of the Central Eastern and South Eastern Europe Division Q1 – Q3 operating result: +29.4% € million + Higher margins in the Czech gas sales business 969 Lower gas sales volumes 749 + Improved electricity sales margins in Hungary; slight rise in Poland + Positive f/x effects 2009 2010 Gui
Slide 11: Performance of the Renewables Division (RWE Innogy)
Performance of the Renewables Division (RWE Innogy) Q1 – Q3 operating result: -33.3% € million + First-time consolidation of Essent wind activities (+€10 million) + Commissioning of Rhyl Flats wind farm (90 MW) in December 2009 Upfront costs of large investment programme 30 20 Lower realised electri
Slide 12: Performance of the Upstream Gas & Oil Division (RWE Dea)
Performance of the Upstream Gas & Oil Division (RWE Dea) Q1 – Q3 operating result: +52.3% € million 233 + Higher oil prices 153 Lower gas prices Lower production volumes + German business: lower royalties + North Africa: reduced exploration costs 2009 2010 Guidance for 2010: significantly above prev
Slide 13: Performance of the Trading/Gas Midstream Division
Performance of the Trading/Gas Midstream Division (RWE Supply & Trading) Q1 – Q3 operating result: -91.2% € million Trading + First-time consolidation of Essent’s trading activities (+€61 million) 760 Performance below very high level of Q1-Q3 2009 Supply Absence of one-offs (successful conclusion o
Slide 14: Gas procurement portfolio only partly exposed to 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 15: Non-operating result
Non-operating result January – September Change € million 2010 2009 (absolute) Capital gains 17 29 -12 Impact of commodity derivatives on earnings -793 578 -1,371 Restructuring, other -1 -388 387 Total -777 219 -996 ¾ Capital gains: No major capital gains in 2009 and 2010 ¾ Impact of commodity deriv
Slide 16: Financial result
Financial result January – September Change € million 2010 2009 (absolute) Net interest -526 -429 -97 Interest accretion to non-current -678 -676 -2 provisions Other financial result -22 -333 311 Total -1,226 -1,438 212 ¾ Net interest - Higher interest expenses due to increased debt used to finance
Slide 17: Cash flow statement
Cash flow statement January – September Change € million 2010 2009 (absolute) Funds from operations (FFO) 5,285 3,919 +1,366 Change in working capital -881 207 -1,088 of which variation margins -904 421 -1,325 Cash flows from operating activities 4,404 4,126 +278 Capex on fixed assets -3,999 -3,701
Slide 18: Outlook 2010
Outlook 2010 2009 2010 € million forecast EBITDA 9,165 +5 – 10% Operating result 7,090 +ca. 5% Recurrent net income 3,532 +ca. 5% Payout ratio of 50 – 60% Dividend € 3.50 of net recurrent income Capex on fixed assets €bn 5.9 ca. 6.5 Net debt €bn 25.8 +ca. € 5 bn RWE AG | Q1-Q3 2010 Conference Call |
Slide 19: Back-up
Back-up RWE AG | Q1-Q3 2010 Conference Call | November 11, 2010 19
Slide 20: Germany: Clean Dark Spread versus hard coal and CO2 prices
Germany: Clean Dark Spread (CDS) versus hard coal and CO2 prices 160 20 2009 forward 120 15 80 10 40 5 0 0 160 20 2010 forward 120 15 80 10 40 5 0 0 160 20 2011 forward 120 15 80 10 40 5 0 0 160 20 2012 forward 120 15 80 10 40 5 0 0 01.01.2008 01.07.2008 01.01.2009 01.07.2009 01.01.2010 01.07.2010 0
Slide 21: Germany: Clean Spark Spread versus natural gas and CO2 prices
Germany: Clean Spark Spread (CSS) versus natural gas and CO2 prices 50 25 40 20 2009 forward 30 15 20 10 10 5 0 0 -10 -5 50 25 40 20 2010 forward 30 15 20 10 10 5 0 0 -10 -5 50 25 40 20 2011 forward 30 15 20 10 10 5 0 0 -10 -5 50 25 40 20 2012 forward 30 15 20 10 10 5 0 0 -10 -5 01.01.2008 01.07.200
Slide 22: UK: Clean Dark Spread versus hard coal and CO2 prices
UK: Clean Dark Spread (CDS) versus hard coal and CO2 prices 150 50 2009 forward 120 40 90 30 60 20 30 10 0 0 150 50 2010 forward 120 40 90 30 60 20 30 10 0 0 150 50 2011 forward 120 40 90 30 60 20 30 10 0 0 150 50 2012 forward 120 40 90 30 60 20 30 10 0 0 01.01.2008 01.07.2008 01.01.2009 01.07.2009
Slide 23: UK: Clean Spark Spread versus natural gas and CO2 prices
UK: Clean Spark Spread (CSS) versus natural gas and CO2 prices 40 20 2009 forward 30 15 20 10 10 5 0 0 40 20 2010 forward 30 15 20 10 10 5 0 0 40 20 2011 forward 30 15 20 10 10 5 0 0 40 20 2012 forward 30 15 20 10 10 5 0 0 01.01.2008 01.07.2008 01.01.2009 01.07.2009 01.01.2010 01.07.2010 01.01.2011
Slide 24: Development of TTF gas price and brent oil price since January 2009
Development of TTF gas price and brent oil price since January 2009 (EUR/MWh) 35 4 2 30 0 25 -2 2011 20 -4 -6 15 -8 10 -10 -12 5 -14 0 -16 Nov. 09 Nov. 10 Jan. 09 Feb. 09 Jun. 09 Jul. 09 Aug. 09 Okt. 09 Dez. 09 Jan. 10 Feb. 10 Jun. 10 Jul. 10 Aug. 10 Okt. 10 Mai. 09 Mai. 10 Apr. 09 Sep. 09 Apr. 10 S
Slide 25: Development of net debt
Development of net debt € billion Capex Dividends Issuance Acquisitions/ Cash flows Others Change in hybrid capital disposals/ from including pension, (less (de)consoli- operating f/x effects nuclear, debt impact) dations activities mining provisions 35 +2.2 -0.8 0.0 -4.4 +4.0 30 +1.2 27.9 -0.1 25.8
Slide 26: Financial liabilities and assets
Financial liabilities and assets (as of Sept. 30, 2010) Financial liabilities in billion Euros Financial assets in billion Euros Split of securities 25 10 9,1 9,6 1,2 20,1 0,9 20 2,1 8 15,9 0,6 0,9 3,8 0,7 3,8 17% 15 0,3 5 10 1,4 1,4 16,5 14,9 83% 3 5 0,3 4,2 3,0 3,2 0,9 1,4 0,5 0,3 1,6 0,2 0 0 Inte
Slide 27: Gross financial debt currency and interest exposure
Gross financial debt currency and interest exposure1 (as of Sept. 30, 2010) Others 3% Floating 14% £ 37% Fixed 86% € 60% 1 Including cross-currency swaps. RWE AG | Q1-Q3 2010 Conference Call | November 11, 2010 27
Slide 28: Capital market debt maturities and sources of financing
Capital market debt maturities and sources of financing Capital market debt maturities1 Strong sources of financing 2,5 20 in € bn 18 Fully committed for liquidity 2,0 16 syndicated loan back-up (€4.0bn up to Oct. 2011) €0.0 bn 14 1,5 12 10 1,0 8 Commercial paper $0.7 bn ($5.0 bn) 6 (up to 1 year) €