Rwe Ag · XETR:RWE
Rwe — Investor Presentation (October 2022)
57 slides from Rwe's investor presentation, October 2022
Slide 1: Growing Green
GROWING GREEN Oct 2022 – Update after H1 reporting
Slide 2: Disclaimer
Disclaimer This document contains forward-looking statements. These statements are based on the current views, expectations, assumptions and information of the management, and are based on information currently available to the management. Forward-looking statements shall not be construed as a promi
Slide 3: Executing Growing Green in 2022
Executing Growing Green in 2022 Oct 2022 Investor presentation
Slide 4: Strong financial and strategic performance drives continuous shareholder value creation
Strong financial and strategic performance drives continuous shareholder value creation Green growth right on track with expansion of Continuous shareholder development pipeline, 1.2 GW of new capacity commissioned in H1 2022 and further 4.8 GW under value creation construction • Almost 90% of capex
Slide 5: Earnings increase in entire core business of RWE Group
Earnings increase in entire core business of RWE Group Adjusted EBITDA, €million Core business 2,858 Coal/Nuclear Substantial investments and steady green capacity expansion 1,751 Higher capacity utilisation and strong operational performance 2,357 across all generation units of our 1,206 core busin
Slide 6: Strong partner for enhancing energy security
Strong partner for enhancing energy security Increase Diversification in power generation of gas supply LNG • Higher utilisation of existing generation • >40 LNG cargoes in H1 2022: 4x higher LNG portfolio supply to Europe vs H1 2021 • Germany, actions at request of the • Floating LNG terminal: Germ
Slide 7: Financial exposure to Russian counterparties entirely removed and reflected in H1 earnings
Financial exposure to Russian counterparties entirely removed and reflected in H1 earnings • Financial exposure to Russian counterparties fully removed Gas supply contracts • No further financial downside from exposure to Russian counterparties as financial actively managed to impact fully covered i
Slide 8: Our Growing Green strategy is set – Execution continues as planned
Our Growing Green strategy is set – Execution continues as planned – Acceleration to be explored GROWING GREEN EXECUTION ACCELERATION Our long-term strategy continues as planned all options will be explored is set • €50bn gross cash • 1.2 GW of green capacity • Utilising strong push for green invest
Slide 9: Decisive year 2022 – Financial targets upgraded
Decisive year 2022 – Financial targets upgraded Core adj. EBITDA € million Adj. EBITDA RWE Group € million Adj. Net income € million 4,300 – 4,800 2,761 5,000 – 5,500 3,650 2,100 – 2,600 1,569 2022e 2021 2022e 2021 2022e 2021 We have upgraded our financial targets for 2022 We are rigorously executin
Slide 10: Outlook for FY 2022 as of July 2022
Outlook for FY 2022 as of July 2022 Group outlook FY 2022, € million Divisional outlook FY 2022– adj. EBITDA, € million Outlook Core adj. EBITDA (Feb 2022) 4,300 – 4,800 Offshore Wind 1,350 – 1,600 Adj. EBITDA RWE Group 5,000 – 5,500 Onshore Wind/Solar 900 – 1,100 Depreciation ~-1,600 Hydro/Biomass/
Slide 11: Stepping up footprint and growth in highly attractive US renewables market
Stepping up footprint and growth in highly attractive US renewables market Acquisition of Con Edison Clean Energy Businesses Inc. (CEB) 01 Oct 2022 Oct 2022 Investor presentation Page 11
Slide 12: Stepping up footprint and growth in highly attractive US renewables market
Stepping up footprint and growth in highly attractive US renewables market RWE achieves leading position in highly attractive US renewables market with the acquisition of Con Edison Clean Energy Businesses Inc. (CEB). RWE now has leading positions in all our core markets US renewables market has str
Slide 13: RWE - Leading market position in all core markets
RWE - Leading market position in all core markets No No No No No Global US US Wind UK Wind Europe Offshore Solar & Solar & Solar Wind & Solar Source: BNEF, installed capacity as of 31 Dec 2021. | Note: Offshore market excluding China. Oct 2022 Acquisition Investor presentation of CEB Page 13
Slide 14: US renewables market has strong growth and attractive stable investment framework
US renewables market has strong growth and attractive stable investment framework Strong push to re-industrialise US economy leads to significant growth in energy demand Maximum drive to build out green technologies Inflation Reduction Act offers attractive, stable, long-term investment framework fo
Slide 15: RWE's US portfolio strengthened by CEB's complementary renewables platform
RWE’s US portfolio strengthened by CEB’s highly attractive and complementary renewables platform Combined portfolio of • RWE expands US Wind/Solar operating assets footprint to more than 7 GW Onshore Wind Solar 59% • Highly experienced CEB team of Wind 3% Batteries ~500 experts with impressive Solar
Slide 16: The combined US Renewables business will accelerate growth
The combined US Renewables Well balanced business will accelerate growth in 2030-green portfolio 2 North America Flexible Offshore Onshore Wind Generation/ by technology wind 15% Massive > 24 GW 25% Hydrogen 35% increase in 24.5 > 55 Onshore development combined US GW 20% development pipeline Solar
Slide 17: Acquisition and future growth fully funded. Transaction earnings accretive from year 1
Acquisition and future growth fully funded. Transaction earnings accretive from year 1 Earnings Attractive Transaction & growth Dividend commitment accretion valuation fully funded maintained Floor of EBITDA from operating enterprise value implies Capital increase via assets mandatory convertible pe
Slide 18: Coal Exit 2030
Coal Exit 2030 04 Oct 2022 Oct 2022 Investor presentation
Slide 19: RWE to become coal free in 2030
RWE to become coal free in 2030 RWE, together with federal and state governments in Germany, has reached agreement to close its lignite business in 2030 Agreement provides for a full exit from lignite power generation in 2030, creating the base to reduce our emissions in line with a 1.5°C compliant
Slide 20: Agreement with German government sets the stage for accelerating RWE's coal exit
Agreement with German government sets the stage for accelerating RWE’s coal exit while ensuring security of supply Enhancement of Closure of RWE Support energy Strong emphasis short-term energy lignite power transition and on Just Transition security plants by 2030 security of supply Lifetime for 1.
Slide 21: Development of lignite capacity until exit in 2030 and short-term measures
Development of lignite capacity until exit in 2030 and short-term measures to increase energy security RWE is providing 2.1 GW lignite generation capacity to support in the energy crisis and Lignite closure increase energy security pathway in GW1 • 1.200 MW temporary operations until Mar 2024 • Opti
Slide 22: 2030-coal exit agreement is financially balanced
2030-coal exit agreement is financially balanced Increase in Added value Long-term benefits coal phaseout from generation from accelerated liabilities portfolio coal exit • Mining liabilities to increase • Additional generation • Allows RWE to set itself 1.5 by €1.3bn to €6.3bn margin from delayed d
Slide 23: Strategy & Long-term financial outlook
Strategy & Long-term financial outlook Extract from Capital Market Day – Nov 2021 Oct 2022 Investor presentation
Slide 24: Leading the way to a green energy world
Leading the way to a green energy world Oct 2022 Investor presentation
Slide 25: Growing Green: Leading the way to a green energy world
Growing Green: Leading the way to a green energy world RWE is perfectly positioned: vast experience in green technologies, strong market presence in industrial growth markets, operating a leading commercial platform We significantly accelerate our green growth programme: €50bn gross / €30bn net cash
Slide 26: The future energy market is powered by green technologies
The future energy market is powered by green technologies Oct 2022 Investor presentation Page 26
Slide 27: Our core business is leading the way to a green energy world
Our core business is leading the way to a green energy world Offshore Onshore Batteries & Hydrogen Commercial Wind Wind/Solar Flexible Solutions Generation Strongest growth in Biden Plan and RWE’s European Hydrogen is quickly Decarbonisation Europe, significant European Green core markets require ga
Slide 28: Perfectly positioned to succeed
Perfectly positioned to succeed Long-term Strong market Leading experience presence in commercial in relevant industrial platform to technologies countries with maximise at scale high growth value potential Oct 2022 Investor presentation Page 28
Slide 29: Raising the bar to accelerate the energy transition
Raising the bar to accelerate the energy transition Wind/Solar/Batteries Flexible Generation Hydrogen 2.5 GW per year Significant 1.5 GW growth in net per year capacity additions Ø GW per year, 2.1 pro rata 0.2 0.2 Ambition CMD 2020 Ambition CMD 2021 for 2019 – 2022 for 2021 – 2030 Oct 2022 Investor
Slide 30: €50bn gross investment programme to drive green growth
€50bn gross investment programme to drive green growth Green investment programme 2021 – 2030 ~€50bn +35 GW ~€30bn +25 GW Gross cash Net cash investments investments Oct 2022 Investor presentation Note: Capacity additions before decommissioning. Page 30
Slide 31: Powerful & green in 2030: Leading green energy company
Powerful & green in 2030: Leading green energy company 50 GW >95% 9% €5bn Green installed EBITDA from Annual average EBITDA net capacity in core business EBITDA growth Ambition 2030 as of 2023 in core business 2030 2021 – 2030 Oct 2022 Investor presentation Page 31
Slide 32: Sustainability is at the heart of our strategy
Sustainability is at the heart of our strategy Reduction of carbon emissions Enhancement of biodiversity compared to 2012 by closing Recultivated over 23,000ha in the Rhenish down of coal-fired power generation mining area. With over 1,500 plants and 3,100 capacity, RWE targets in line with Paris cl
Slide 33: Stepping up our ambition in sustainability
Stepping up our ambition in sustainability Climate Change Biodiversity & Recultivation Environ- mental We will be climate neutral by 2040 . Because we care about the biodiversity impact Our ambitions of our business, we commit to the highest On the way there, our ambition is to reduce standards in r
Slide 34: Strong growth platform across all technologies
Strong growth platform across all technologies Secured offshore rights Powerful development pipeline of Europe green generation technologies 4.3 >55 GW 1.2 8 GW 8 1.6 0.8 0.4 0.5 11 GW 0.4 1.6 14 7.7 Additional offshore pipeline from 10 central tenders/lease auctions Americas 4 10 2.8 Expected 5.8 +
Slide 35: Our offshore installed net capacity will triple by 2030
Offshore wind Our offshore installed net capacity will triple by 2030 Our offshore wind target, installed Growth until 2027 secured >3x 8 net capacity GW, pro rata 5 2.4 2020 2027e 2030e Good visibility Triton Knoll, 0.5 GW Sofia, 1.4 GW Secured rights >7 GW on capacity Kaskasi, 0.3 GW Baltic 2, 0.4
Slide 36: Ambitious onshore wind targets and steep solar growth
Onshore wind and solar Ambitious onshore wind targets and steep solar growth Our onshore wind and solar target, Solar Onshore wind installed net capacity GW, pro rata 20 GW 16 GW 8 Capacity 6 growth in 7 GW onshore wind and solar <1 12 10 7 2020 2027e 2030e Oct 2022 Investor presentation Page 36
Slide 37: Balancing the system is a growth opportunity
Batteries & flexible generation Balancing the system is a growth opportunity 3 Our battery 2 Growth focus in & flexible <1 batteries is on co- Batteries location with wind generation 2020 2027e 2030e capacity, and solar sites installed net 17 16 17 Excellent position to 1 2 capacity build new gas pl
Slide 38: Ideally positioned for the hydrogen economy
Hydrogen Ideally positioned for the hydrogen economy Hydrogen market growth Strongest global growth Strong expertise along the value chain momentum in Europe Industrial demand centres located in RWE’s European core markets Renewable Logistics European energy (storage & transport) electrolyser capaci
Slide 39: Growth target backed by strong project pipeline
Hydrogen Growth target backed by strong project pipeline RWE’s hydrogen development pipeline RWE with market leading growth target in electrolyser capacity 10 GW Mostly early-stage pro rata development projects Requirements for electrolyser investments +2 • Regulatory and political Selected hydrogen
Slide 40: We transform rapidly into a green energy company
We transform rapidly into a green energy company Installed net 54 GW capacity 42 GW 40 GW GW, pro rata 18 31 15 Wind/Solar/Batteries 17 Flexible generation/Hydrogen 24 19 Coal/Nuclear 8 4 2016 2023e 2030e Adj. EBITDA Core business €5bn Coal/Nuclear €1.9bn ambition 44% 56% 100% 0% Oct 2022 Investor p
Slide 41: Delivering growth and value
Delivering growth and value Oct 2022 Investor presentation
Slide 42: Strict investment criteria ensure attractive returns
Strict investment criteria ensure attractive returns IRR Investment decisions based requirements on strict hurdle rate Offshore wind approach with project IRR for future Global 5.0% 9.0% typically exceeding base investments WACC by 100 to 300 bps Hurdle rates include risk premia depending on Onshore
Slide 43: We accelerate our growth investments to €3bn net annually
We accelerate our growth investments to €3bn net annually Share of gross cash investments: Ø €5bn p.a. Offshore wind + 20 Green investment Ø €3bn p.a. Onshore wind, solar and batteries programme 2021 – 2030 50 >90% 2021 – 2027 EU Taxonomy €bn + €21bn eligible 30 Flexible generation & hydrogen Gross
Slide 44: Stable and sustainable earnings profile
Stable and sustainable earnings profile Gross margin Gross margin split Gross margin split Wind/Solar Flexible generation 2021 – 2023 PPAs/Tax Credit Capacity payments/ Merchant 10% ancillary services 25% 12 30% Merchant 35% years 30% Certificates Weighted average remaining support 30% 40% tenor1 Wi
Slide 45: Investment programme funded by strong cash flow and balance sheet
Investment programme funded by strong cash flow and balance sheet Funding 63 63 composition 2021 – 2030 20 Asset rotation €bn Financial Gross cash 50 11 headroom investments Net cash investments of €30bn Adj. operating 32 cash flow Dividend 7 Utilisation of nuclear/ 6 mining provisions Sources of fu
Slide 46: Committed to strong capital structure and investment grade rating
Committed to strong capital structure and investment grade rating Strong investment Target leverage factor of grade rating Today ≤3x net debt/core adj. EBITDA Current & Target rating: Baa2 BBB+ Post 2025 ≤3.5x Target leverage factor of net debt/adj. EBITDA Oct 2022 Investor presentation Page 46
Slide 47: Sustainable financing provides liquidity and financing at competitive rates
Sustainable financing provides liquidity and financing at competitive rates Successfully issued Syndicated credit facility with Green Bond in Q2 2021 sustainability-linked KPIs • Green bond multiple times oversubscribed • Renewable energy (%) in generation portfolio • Ten-year bond at highly attract
Slide 48: Attractive and stable dividend throughout the green energy transition
Attractive and stable dividend throughout the green energy transition Dividend Dividend floor of policy €0.90 per share €/share growing Long-term average stable pay-out ratio of 50 – 60% based on adj. net income 0.85 0.90 0.80 2019 2020 2021 2030 Oct 2022 Investor presentation Page 48
Slide 49: Delivering growth and value
Delivering growth and value Green Earnings Strict Dividend investments Growth balance sheet commitment 2021 – 2030 2021 – 2030 management Strong investment Floor of €0.90 €30bn grade rating per share Net cash investments 9% Long-term target Long-term >90% EBITDA CAGR leverage factor payout ratio of
Slide 50: Appendix
Appendix Oct 2022 Investor presentation Page 50
Slide 51: Disclosure summary
Disclosure summary Strategic and financial outline Additional disclosure Installed net capacity core business 2030, pro rata 50 GW Gross cash investments core business 2021 – 2030 €50bn • Offshore Wind 45% • Onshore Wind/Solar/Batteries 45% Gross capacity additions 2021 – 2030 35 GW • Flexible Gener
Slide 52: H1 2022 results
H1 2022 results Oct 2022 Investor presentation Page 52
Slide 53: Significant green portfolio growth with 6.2 GW underway
H1 2022 Significant green portfolio growth with 6.2 GW underway Development of our green generation portfolio, GW pro rata +6.2 34.3 1.9 0.5 <0.1 1.2 Includes 1.4 GW 0.8 Magnum 28.0 1.7 acquisition 26.9 0.1 1.2 31.12.2021 Capacity Capacity 30.06.2022 Offshore Onshore Solar Batteries Hydrogen Flexibl
Slide 54: Striking operational performance in H1 2022 while 2021 was marked by a negative one-off
H1 2022 Striking operational performance in H1 2022 while 2021 was marked by a negative one-off Core adj. EBITDA H1 2022 vs. H1 2021, € million Offshore Wind earnings up on the back of +95% capacity additions including Rampion consolidation effect, favourable wind conditions 2,357 and higher power p
Slide 55: Strong adj. net income on the strength of the successful operational performance
H1 2022 Strong adj. net income on the strength of the successful operational performance Adj. net income, € million Adj. EBITDA driven by strong operational performance H1 2021 H1 2022 Adj. EBITDA Adj. depreciation increases in line with 1,751 2,858 H1 2022 growth investments -709 Adj. depreciation
Slide 56: Economic net debt
H1 2022 Economic net debt Net assets / net debt (€ million) 30 Jun 2022 31 Dec 2021 +/- Net debt definition Cash and cash equivalents 4,615 5,825 -1,210 • Net debt does not Marketable securities 8,299 8,347 -48 contain mining provisions, which Other financial assets 14,955 12,403 2,552 essentially c
Slide 57: Your contacts in Investor Relations
Your contacts in Investor Relations Important Links Financial Calendar • Annual and interim reports & statements • 10 November 2022 ADR programme available Interim statement on the first three quarters of 2022 • Investor and analyst conferences • 21 March 2023 Further information on our homepage Ann