Rwe Ag · XETR:RWE
Rwe — Q1-Q3 2014 Earnings Presentation
27 slides from Rwe's earnings presentation, Nov 13, 2014
Slide 1: Investor and Analyst Q1-Q3 2014 Conference Call
Investor and Analyst Q1-Q3 2014 Conference Call Essen, 13 November 2014 Bernhard Günther Stephan Lowis Chief Financial Vice President Officer Investor Relations
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: Main messages for Q3 2014
Main messages for Q3 2014 Financial performance for first nine months in line with our expectations: EBITDA -22%, operating result -31%, recurrent net income -60% Group outlook for 2014 confirmed RWE Dea: The parties to the transaction continue to work towards a closing of the transaction RWE has pr
Slide 4: Increase in cash flow despite an expected decline in earnings
Increase in cash flow despite an expected decline in earnings RWE key figures for Q1-Q3 2014 € million Besides margin erosion in conventional power generation and 6,048 EBITDA -22% the negative weather effects, the decline of EBITDA and 4,700 operating result is especially impacted because we receiv
Slide 5: Development of operating result by division
Development of operating result … … by division (-€1,282 million; -31%) Earnings in Conventional Power € million Generation under pressure due to declining generation margins Q1-Q3 20131 4,190 Conventional Earnings trend in our supply divisions -60 Power Generation suffered among other things from S
Slide 6: Cash flow statement
Cash flow statement January – September Change € million 2014 2013 (absolute) Funds from operations (FFO) 2,443 4,368 -1,925 Change in working capital 2,316 135 2,181 Cash flows from operating activities 4,759 4,503 256 Capex on fixed assets -2,197 -2,458 261 Free cash flow 2,562 2,045 517 All figur
Slide 7: Development of net debt
Development of net debt € billion Cash flows Capex on Dividends1 Divestments/ Change Others from property, deconsoli- in pension, including f/x operating plant and dations/ nuclear, effects and activities1 equipment capital mining change of and intangible measures1 provisions1 net debt from assets a
Slide 8: Outlook for 2014
Outlook for 2014 In € million EBITDA 8,762 7,904 6,400 – 6,800 Operating 5,881 result 5,369 3,900 – 4,300 Recurrent 2,314 2,314 1,200 – 1,400 net income Dividend €1.00/share Payout ratio of 40% – 50% 2013 2013 2014e reported RWE Dea DCO1 RWE Dea DCO1 1 Based on the sale agreement, RWE Dea will be so
Slide 9: 2014 divisional outlook for the operating result unchanged except for Supply UK
2014 divisional outlook for the operating result unchanged except for Supply UK € million 20131 2014 forecast versus 2013 Conventional Power Generation 1,384 Significantly below 2013 Supply/Distribution Networks Germany 1,626 Moderately above 2013 Supply Netherlands/Belgium 278 Significantly below 2
Slide 10: Back-up Charts
Back-up Charts i a. ey The energy to lead
Slide 11: Performance of the Conventional Power Generation Division
Performance of the Conventional Power Generation Division January – September: operating result: -7.1% (-€60 million) € million - Lower realised electricity generation spreads 842 782 - Closure of Tilbury and Didcot A power plants + Efficiency improvements + Lower operating depreciation + Absence of
Slide 12: 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 2014 >30% >10% >40% >10% >50% >20% >50% >30% >60% >40% >70% >50% >80% >60% >80% >80% >90% >90% 2014 forward >30% >10% >40% >10% >40% >20% >50% >30% >60% >40% >60% >50% >80% >60% >90% >70%
Slide 13: RWE successfully pre-qualified approx. 8 GW for the UK capacity market
RWE successfully pre-qualified approx. 8 GW for the UK capacity market Plant MW1 Plant type Aberthaw 1,486 Coal/OCGT Didcot B 1.364 CCGT Great Yarmouth 361 CCGT Little Barford 683 CCGT Pembroke 2.090 CCGT Staythorpe 1.633 CCGT Miscellaneous smaller units 407 CHP/OCGT/CCGT 8,025 1 De-rated power plan
Slide 14: Germany: Clean Dark and Spark Spreads
Germany: Clean Dark (CDS) and Spark Spreads (CSS) 2013 forward 2014 forward 2015 forward 16 12 Ø 9.96 Ø 7.86 8 Ø 5.84 4 0 -4 Ø -2.37 -8 Ø -11.63 -12 Ø -13.12 -16 Trading year 2012 Trading year 2013 Trading year 2014 2 3 4 2 3 4 2 3 4 12 13 14 -1 -1 -1 r-1 r-1 r-1 l- 1 l- 1 l- 1 n- n- n- kt kt kt Ju
Slide 15: NL: Clean Dark and Spark Spreads
NL: Clean Dark (CDS) and Spark Spreads (CSS) 2013 forward 2014 forward1 2015 forward1 20 15 Ø 11.43 10 Ø 9.19 5 Ø 7.63 0 -5 Ø -4.55 Ø -7.91 -10 Ø -7.46 -15 -20 Trading year 2012 Trading year 2013 Trading year 2014 2 3 4 2 3 4 2 3 4 12 13 14 -1 -1 -1 r-1 r-1 r-1 l- 1 l- 1 l- 1 n- n- n- kt kt kt Ju Ju
Slide 16: UK: Clean Dark and Spark Spreads
UK: Clean Dark (CDS) and Spark Spreads (CSS) 2013 forward 2014 forward1 2015 forward1 28 Ø 22.49 24 20 Ø 19.51 Ø 17.33 16 12 8 4 Ø 3.54 Ø 3.12 0 Ø 2.03 Trading year 2012 Trading year 2013 Trading year 2014 2 3 4 2 3 4 2 3 4 12 13 14 -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 A
Slide 17: Performance of the Supply/Distribution Networks Germany Division
Performance of the Supply/Distribution Networks Germany Division January – September: operating result: +11% (+€138 million) € million + Efficiency improvements 1,270 1,408 + Higher earnings from the disposal of grid assets - Weather-induced decline in gas earnings 2013 2014 Guidance for fiscal 2014
Slide 18: Performance of the Supply Netherlands/Belgium Division (Essent)
Performance of the Supply Netherlands/Belgium Division (Essent) January – September: operating result: -61% (-€148 million) € million - Absence of positive impact from release of provisions in 2013 244 - Weather-induced reduction in gas earnings 96 - Competition-induced pressure on gas margins + Mar
Slide 19: Performance of the Supply United Kingdom Division (RWE npower)
Performance of the Supply United Kingdom Division (RWE npower) January – September: operating result: -56% (-€115 million) € million - Higher grid fees and commodity costs and negative weather effects 205 - Additional costs for customer service improvements 90 - Higher burdens from government progra
Slide 20: Performance of the Central Eastern and South Eastern Europe Division
Performance of the Central Eastern and South Eastern Europe Division January – September: operating result: -36% (-€298 million) € million - Disposal of NET4GAS (as of 2 August 2013) - Positive effects in 2013 from derivatives to hedge f/x risks 826 Czech Republic: 528 - Weather-induced reduction in
Slide 21: Performance of the Renewables Division (RWE Innogy)
Performance of the Renewables Division (RWE Innogy) January – September: operating result: -74% (-€82million) € million - Impairment on Markinch biomass project 111 - Impact of new renewables support scheme in Spain - Reduced electricity wholesale prices and lower utilisation of German hydro plants
Slide 22: Performance of the Trading/Gas Midstream Division
Performance of the Trading/Gas Midstream Division (RWE Supply & Trading) January – September: operating result: -75% (-€681 million) € million Trading: 903 + Significantly better performance in the energy trading business Supply: - Absence of one-off from Gazprom arbitration ruling in 2013 222 + Com
Slide 23: Financial liabilities and assets
Financial liabilities and assets (Excluding hybrid capital and RWE Dea, as of 30 September 2014) Financial liabilities Financial assets Split of € billion € billion securities 25 12 9.9 10.4 11% 18.4 10 1.0 20 0.9 15.2 1.9 1.3 8 3.7 15 1.2 0.3 3.7 0.9 6 0.6 0.6 10 4 14.9 3.2 13.1 5.1 4.7 5 2 0.5 0.4
Slide 24: Capital market debt maturities and sources of financing
Capital market debt maturities and sources of financing Capital market debt maturities1 Strong sources of financing in € bn Fully committed syndicated loan For liquidity 2,5 20 (€4.0 bn up back-up to March 2019) €0.0 bn 2,0 16 1,5 12 Commercial paper $0.0 bn ($5.0 bn) (up to 1 year) 1,0 8 €0.0 bn (3
Slide 25: Capital market debt currency and interest exposure
Capital market debt currency and interest exposure (as of 30 September 2014) 13% 34% € 17.9 bn11 €15.1 bn2 66% 87% € Interest rate fixing expiry > 1 year £ Interest rate fixing expiry < 1 year 1 Capital market debt = bonds of €14.2 bn and hybrids of €3.7 bn; split into currencies includes cross-curr
Slide 26: 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) 100% 3.1 Units A B 1 The date for bringing unit D (764 M
Slide 27: Keep up with RWE
Keep up with RWE … Follow us on twitter@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 Confer