Rwe Ag · XETR:RWE
Rwe — H1 2013 Earnings Presentation
30 slides from Rwe's earnings presentation, Aug 14, 2013
Slide 1: Investor and Analyst H1 2013 Conference Call
Investor and Analyst H1 2013 Conference Call Essen, 14 August 2013 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 H1 2013
Main messages for H1 2013 Financial performance in line with expectation: EBITDA +9%, operating result +12%, recurrent net income +19% Successful conclusion of gas price arbitration with Gazprom; award as expected; impact on operating result approx. €1 billion Completion of Turkish gas-fired power p
Slide 4: RWE Generation assets under review
RWE Generation assets under review Profitability of RWE’s conven- First responses tional generation portfolio1 > Capacity measures OR2 > > decommissioning c. > 50% – 60% WACC > long-term or summer mothballing > termination of contracted hard coal units > in total: 4,265 MW > Capacity under intense r
Slide 5: Decision on capacity measures
Decision on capacity measures Measure Plant MW1 Fuel Location Date Decom- Amer 8 610 Hard coal NL Q1-20162 missioning Long-term Moerdijk 2 430 Gas NL Q4-2013 mothballing Gersteinwerk F 355 Gas – steam turbine DE Q3-2013 Gersteinwerk G 355 Gas – steam turbine DE Q2-2014 Weisweiler H 270 Topping gas t
Slide 6: Results from arbitration with Gazprom
Results from arbitration with Gazprom Arbitration ruling comprises a price adjustment (P0-cut) and a structural change of the pricing model (introduction of gas price indexation) Reimbursement for the price revision period May 2010 to May 2013 Significant reduction of our gas-to-oil spread exposure
Slide 7: Development of operating result by division
Development of operating result … … by division (+€448 million; +12%) Improved earnings in Trading/Gas Mid- stream Division after arbitration court € million ruling on our long-term oil-indexed gas H1 2012 3,642 contract with Gazprom Conventional -1,110 Power Generation Earnings in Conventional Powe
Slide 8: Reconciliation of (recurrent) net income
Reconciliation of (recurrent) net income € million H1 2013 +/- % Non-operating result shows among others the impairment of our Dutch power generation fleet of EBITDA 5,498 +9.1% c. €800 million Depreciation -1,408 -0.7% Financial result deteriorates due to Operating result 4,090 +12.3% negative tren
Slide 9: Cash flow statement
Cash flow statement January – June Change € million 2013 2012 (absolute) Funds from operations (FFO) 4,078 2,451 1,627 Change in working capital -2,664 -1,080 -1,584 of which: influence of the variation margins -339 232 -571 Cash flows from operating activities 1,414 1,371 43 Capex on fixed assets -
Slide 10: Outlook for 2013
Outlook for 2013 € million 9,314 In the order of 9,000 EBITDA 6,416 In the order of 5,900 Operating result Recurrent 2,457 In the order of 2,400 net income 2012 2013e1 Dividend €2.00/share Pay out ratio of 50% – 60% of recurrent net income 1 The outlook is after assumed disposals. In 2013 we expect
Slide 11: Divisional outlook for the operating result
Divisional outlook for the operating result € million 2012 2013 forecast versus 20121 Conventional Power Generation 3,275 Significantly below last year’s level Supply/Distribution Networks Germany 1,578 In the order of last year’s level Supply Netherlands/Belgium 190 Significantly above last year’s
Slide 12: Back-up Charts
Back-up Charts RWE AG | H1 2013 Conference Call | 14 August 2013 12
Slide 13: Performance of the Conventional Power Generation Division
Performance of the Conventional Power Generation Division January – June: operating result: -61.7% (-€1,110 million) € million - Full auctioning of CO2-certificates (c. -€660m) - Closure of 12 old lignite blocks of 150 MW class in 2012 - Lower realised electricity generation spreads, incl. coal tax
Slide 14: RWE's forward hedging of conventional electricity production
RWE’s forward hedging of conventional electricity production (German, Dutch and UK portfolio, excl. RWE Innogy) As of 30 June 2013 >20% <10% >30% >10% >40% >10% >60% >20% >70% >30% >70% >40% >70% >70% >90% >80% >90% >90% 2013 forward >30% >10% >40% >10% >50% >20% >50% >30% >60% >40% >70% >50% >80% >
Slide 15: Germany: Clean Dark and Spark Spreads
Germany: Clean Dark (CDS) and Spark Spreads (CSS) 2012 forward 2013 forward 2014 forward Ø 9.96 Ø 7.74 Ø 7.64 Ø 4.93 Ø -2.37 Ø -11.14 Trading year 2011 Trading year 2012 Trading year 2013 CDS Cal 2012 – 14 Base load (€/MWh) Average CDS CSS Cal 2012 – 14 Peak load (€/MWh) Average CSS (assumed thermal
Slide 16: NL: Clean Dark and Spark Spreads
NL: Clean Dark (CDS) and Spark Spreads (CSS) 2012 forward 2013 forward1 2014 forward1 Ø 8.59 Ø 10.08 Ø 7.63 Ø -1.24 Ø -4.55 Ø -7.48 Trading year 2011 Trading year 2012 Trading year 2013 CDS Cal 2012 – 14 Base load (€/MWh) Average CDS CSS Cal 2012 – 14 Base load (€/MWh) Average CSS (assumed thermal e
Slide 17: UK: Clean Dark and Spark Spreads
UK: Clean Dark (CDS) and Spark Spreads (CSS) 2012 forward 2013 forward1 2014 forward1 Ø 21.35 Ø 13.78 Ø 19.51 Ø 3.55 Ø 3.12 Ø 2.22 Trading year 2011 Trading year 2012 Trading year 2013 CDS Cal 2012 – 14 Base load (€/MWh) Average CDS CSS Cal 2012 – 14 Base load (€/MWh) Average CSS (assumed thermal ef
Slide 18: Performance of the Supply/Distribution Networks Germany Division
Performance of the Supply/Distribution Networks Germany Division January – June: operating result: +10.8% (+€95 million) € million + Efficiency improvements + Cold weather 876 971 - Loss of earnings from the disposal of Berlin waterworks and KEVAG and transfer of Zagreb wastewater business to CEE/SE
Slide 19: Performance of the Supply Netherlands/Belgium Division (Essent)
Performance of the Supply Netherlands/Belgium Division (Essent) January – June: operating result: +80.1% (+€121million) € million + Positive impact from change in provisions + Weather induced higher gas sales 272 + Efficiency improvements 151 - Competition induced pressure on gas margins - Lower ene
Slide 20: Performance of the Supply United Kingdom Division (RWE npower)
Performance of the Supply United Kingdom Division (RWE npower) January – June: operating result: -6.4% (-€14 million) € million - Negative f/x effects - Higher grid fees 220 206 - Lower energy consumption due to energy efficiency improvements and customer losses - Higher burdens from government prog
Slide 21: Performance of the Central Eastern and South Eastern Europe Division
Performance of the Central Eastern and South Eastern Europe Division January – June: operating result: +12.6% (+€73 million) € million + Positive effect from derivatives to hedge f/x risks Czech Republic: + Improved gas grid margins 651 Hungary: 578 - Government induced burdens for utilities Poland:
Slide 22: Performance of the Renewables Division (RWE Innogy)
Performance of the Renewables Division (RWE Innogy) January – June: operating result: +3.1% (+€3 million) € million + Increased earnings contribution from growth investments + Higher utilisation of hydro plants 98 101 + One-off from compensation payments in Spanish wind business - Impact from new re
Slide 23: Performance of the Upstream Gas & Oil Division (RWE Dea)
Performance of the Upstream Gas & Oil Division (RWE Dea) January – June: operating result: -28.2% (-€120 million) € million - Lower oil and gas production volumes - Lower realised gas and oil prices 425 - Higher exploration costs 305 + Lower royalties in Germany + Lower production costs 2012 2013 Gu
Slide 24: Performance of the Trading/Gas Midstream Division
Performance of the Trading/Gas Midstream Division (RWE Supply & Trading) January – June: operating result: +€1,369 million € million Trading: +1,029 - Lower performance in the energy trading business Supply: + Arbitration court ruling on our long-term oil-indexed gas supply contract with Gazprom -34
Slide 25: Development of net debt
Development of net debt € billion Capex Dividends Acquisitions/ Cash flows Others Change divestiture/ from including in pension, disposals/ operating f/x effects nuclear, (de)consoli- activities mining dation provisions 40 +1.5 +1.8 +0.4 35.0 +0.2 35 33.0 -0.5 -1.4 30 0 Net debt Net debt 31 Dec 2012
Slide 26: Financial liabilities and assets
Financial liabilities and assets (excluding hybrid capital, as of 30 June 2013) Financial liabilities Financial assets Split of in € billion in € billion securities 20.7 6.7 19% 6.0 3.3 16.3 1.1 1.6 0.9 0.5 4.4 0.7 2.2 0.7 0.5 Short term Long term Total Short term Long term Total 81% (≤ 12 months) (
Slide 27: 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 (€4.0 bn up back-up to Nov. 2017) €0.0 bn Commercial paper $1.7 bn ($ 5.0 bn) (up to 1 year) €1.3 bn (30 Jun 2013) MTN programme €
Slide 28: Capital market debt currency and interest exposure
Capital market debt currency and interest exposure (as of 30 June 2013) 9% 30% €17.9 bn11 €18.8 bn2 70% 91% € 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-currency sw
Slide 29: RWE's major investment projects
RWE’s major investment projects RWE Capex share (€ bn) 2013 2014 2015 2016 2017 2018 Conventional power plant new build programme (capex at 100% share) Hamm (hard coal, 1,528 MW) 77% 2.4 Units D E Eemshaven (hard coal/biomass, 1,560 MW) 100% 3.0 Units A B Denizli (gas, 787 MW) 70% 0.5 RWE Dea‘s larg
Slide 30: Always be informed about RWE
Always be informed about RWE … Follow us on twitter@RWE_IR and have a look at www.rwe.com/ir 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 Conf