Uniper Se · XETR:UN0
Uniper — Investor Day (December 2017)
34 slides from Uniper's investor day presentation, Dec 7, 2017
Slide 1: Strategic and Financial Update
Strategic and Financial Update Klaus Schäfer – CEO Christopher Delbrück – CFO 07 December 2017
Slide 2: Agenda – Strategic and Financial Update
Agenda – Strategic and Financial Update 1. Strategic Update Klaus Setting the scene Schäfer Strategic focus by segment 2. Financial Update Christopher Financial framework & capex plan Delbrück Earnings and dividend outlook 3. Uniper‘s perspectives in a nutshell Klaus Schäfer Strategic and Financial
Slide 3: Agenda – Strategic and Financial Update
Agenda – Strategic and Financial Update 1. Strategic Update Setting the scene Klaus Strategic focus by segment Schäfer 2. Financial Update Financial framework & capex plan Earnings and dividend outlook 3. Uniper‘s perspectives in a nutshell Strategic and Financial Update, 07 Dec 2017 3
Slide 4: Phase 1 of Uniper's strategy finalized
Phase 1 of Uniper’s strategy finalized Phase 1 Tightening the ship ✓ • Transparency increased Increase market understanding of key • cashflow drivers Deep dives on core business ✓ • Performance improved • Streamlined organization Focus on direct and indirect costs, final delivery by
Slide 5: Key beliefs for European markets – Decarbonization to be central driver in Europe
Key beliefs for European markets – Decarbonization to be central driver in Europe Underlying European market trends Market tightness due to reduced nuclear, coal and lignite generation European Climate change Gas-fired generation and rising CO2 prices political environment power key driver for
Slide 6: Key beliefs for global markets – Attractive opportunities emerging
Key beliefs for global markets – Attractive opportunities emerging Underlying global market trends Underlying global demand growth mainly covered by renewable energy and gas Global power Efficiency gains from modernization of aging fleet in key markets markets Increasing demand for reliable po
Slide 7: Heading into phase 2 of Uniper's strategy
Heading into phase 2 of Uniper’s strategy Phase 2 Setting the sails ✓ • • Benefit from security-of-supply Low-risk asset growth Focus around existing sites ✓ • contracted positions • Exploit linking energy markets Exploit strong portfolio Expand commodity supply positions ✓ • B
Slide 8: Agenda – Strategic and Financial Update
Agenda – Strategic and Financial Update 1. Strategic Update Setting the scene Klaus Strategic focus by segment Schäfer 2. Financial Update Financial framework & capex plan Earnings and dividend outlook 3. Uniper‘s perspectives in a nutshell Strategic and Financial Update, 07 Dec 2017 8
Slide 9: Key strategic angle – grow non-wholesale and benefit from merchant upside
Key strategic angle – grow non-wholesale and benefit from merchant upside The right portfolio to benefit from market upsides (development of Group EBITDA mix over time) Wholesale 20161 2020E 2025E (indicative) Non-Wholesale Strategic take – Focus on strengthening non-wholesale elements European Ge
Slide 10: European Generation – Focus on security of supply and industrial solution business
European Generation – Focus on security of supply and industrial solution business Key considerations Strategic response • Capacity reductions and closures, carbon prices and fuel switch expected to support prices Environment • Renewables with continued support • Flat demand development 1. Keep outr
Slide 11: European Generation – Growing opportunity for B2B power generation business
European Generation – Growing opportunity for B2B power generation business Energy hubs Industrial solutions Gas power for security of Tied to Barriers for supply Chemicals Co Gate LNG local Com- market assets plexity entry Chemicals Co Electricity Natural gas Biomass Process steam Fuel Asset Servic
Slide 12: Global Commodities – Targeting diversification and broadening of global reach
Global Commodities – Targeting diversification and broadening of global reach Key considerations Strategic response • US LNG supply driving global LNG as well as Environment European gas market prices and volatility • Global demand for gas and coal increasing while 1. Expand short to mid-term shifti
Slide 13: Global Commodities – Exemplary projects and concepts diversifying in a growing global market
Global Commodities – Exemplary projects and concepts diversifying in a growing global market Key projects LNG supply Canada Gas midstream Up to 4.8 mtpa / 20 years Long-term gas supply supply contract signed, signed with the Azerbaijani based on North-western state company SOCAR in European hub pric
Slide 14: International Power – Modernize Russian fleet based on long term capacity market scheme
International Power – Modernize Russian fleet based on long term capacity market scheme Key considerations Strategic response • Global power demand is continuing to grow, Environment making use of all available technologies, including Renewables as well as gas and coal fired generation 1. Replenish
Slide 15: International Power – Modernization scheme as attractive investment opportunity in Russia
International Power – Modernization scheme as attractive investment opportunity in Russia Uniper fleet in Russia as of end 2017 Investments into modernization New incentives for modernisation New capacities: • Modernisation incentives approved in Capacity tariff (CSA): ~1.0 million RUB1 High tariffs
Slide 16: Summary – Strategic focus
Summary – Strategic focus Underutilized European portfolio to benefit from rising prices European Generation Capex focussed on secured capacities (regulatory, contractually) Gas storage beneficiary from decarbonization and gas to power Global Commodities Development of further globally diver
Slide 17: Agenda – Strategic and Financial Update
Agenda – Strategic and Financial Update 1. Strategic Update Setting the scene Strategic focus by segment 2. Financial Update Financial framework & capex plan Christopher Earnings and dividend outlook Delbrück 3. Uniper‘s perspectives in a nutshell Strategic and Financial Update, 07 Dec 2017 17
Slide 18: Financial framework sets key boundaries for future strategic development
Financial framework sets key boundaries for future strategic development Financial framework Dividend Financial framework setting clear boundaries aspiration • Debt level: comfortably below 2x Economic net debt / EBITDA • Target rating: BBB (flat) • Dividend payout ratio: min. 75% to 100% of Free Ca
Slide 19: Longer term investment approach with two phases
Longer term investment approach with two phases Mid-term plan Longer term ambition – until 2020 – beyond 2020 • Meeting dividend aspiration • Further dividend/earnings upside • Limited financial headroom • Increased financial headroom • First smaller growth initiatives • Execution of strategy • Asse
Slide 20: Investing with discipline
Investing with discipline Hurdle rates – surcharges over WACC Investment principles Valuation criteria Multiple valuation criteria considering the ~500bp strategic context of the projects (payback, IRR, (+WACC) cash generation) ~300bp Non-wholesale projects (+WACC) Good credit quality of counter
Slide 21: Mid term capex plan still with decent share of legacy growth capex
Mid term capex plan still with decent share of legacy growth capex Capex – Mid-term plan until 2020 Key highlights €bn 1200 Maintenance capex Staying at low and sustainable level below 800 €0.4bn p.a Legacy growth projects 400 Finalizing repair of Russian lignite plant Berezovskaya III in 2019 f
Slide 22: Agenda – Strategic and Financial Update
Agenda – Strategic and Financial Update 1. Strategic Update Setting the scene Strategic focus by segment 2. Financial Update Financial framework & capex plan Christopher Earnings and dividend outlook Delbrück 3. Uniper‘s perspectives in a nutshell Strategic and Financial Update, 07 Dec 2017 22
Slide 23: 2017 Outlook – Reiterated
2017 Outlook – Reiterated Adj. EBIT Dividend Key highlights TBU €bn €bn European Generation ~ +25% 1.4 Swedish hydro and nuclear tax reduction 1.2 0.25 UK, France capacity payments 0.20 Lapse of restructuring one-off and Swedish 1.0 nuclear provision effect Cost savings 2016 2017E FY2016 FY2
Slide 24: 2018 Outlook – Earnings like for like unchanged
2018 Outlook – Earnings like for like unchanged Adjusted EBIT – Main drivers 2018 vs 2017 €bn Range Range Adj. EBIT Yuzhno- Lapse of Locked-in Taxes in UK Cost Other Adj. EBIT 2017E Russkoye incurance power Sweden Capacity Cutting 2018E disposal payment prices market in Russia Strategic and Financia
Slide 25: 2018 Outlook – Further dividend growth ahead
2018 Outlook – Further dividend growth ahead Adj. EBIT Dividend Key highlights TBU €bn €bn European Generation ~ +25% Increasing contribution from UK and French 1.2 1.1 0.31 capacity payments 0.25 Final reduction of Swedish nuclear capacity 1.0 0.8 tax and further reduction of hydro property 0.9
Slide 26: 2020 outlook – Especially 'non-wholesale' supportive of earnings development
2020 outlook1 – Especially ‘non-wholesale’ supportive of earnings development Regulated business Contracted generation Increasing contribution from UK capacity payments Datteln IV plant – commissioning in Q4 2018 Re-start of Berezovskaya III in Q3 2019 Pellet co-firing Maasvlakte III – (ramp
Slide 27: Provision utilization key driver for higher cash flows
Provision utilization key driver for higher cash flows Sum of key net provision utilization items Key highlights Provision utilization trending down €bn 2017 and 2018 still impacted by one-off ~0.6 - 0.7 effects linked to spin-off and cost cutting Non-KAF-funded decommissioning utilization with
Slide 28: Growing base dividend with optionality
Growing base dividend with optionality Dividend growth path until 2020 Uniper’s ambition €m Dividend policy … Ambition to pay a sustainable 25% CAGR and rising dividend 800 Commitment to current payout policy of min. 75% to 100% on free cash from operations 600 … linked with investment plans A
Slide 29: Agenda – Strategic and Financial Update
Agenda – Strategic and Financial Update 1. Strategic Update Setting the scene Strategic focus by segment 2. Financial Update Financial framework & capex plan Earnings and dividend outlook 3. Uniper‘s perspectives in a nutshell Klaus Schäfer Strategic and Financial Update, 07 Dec 2017 29
Slide 30: Uniper equity story in phase II – Strongly growing base dividend with further upside
Uniper equity story in phase II – Strongly growing base dividend with further upside Very swift delivery of Action Plan Track record today Accelerated delivery Strong financial and share performance since inception Substantial Earnings mix improving significantly towards 2020 Prospects until d
Slide 31: End of presentation
End of presentation Strategic and Financial Update, 07 Dec 2017 31
Slide 32: Uniper – Contact your Investor Relations team
Uniper – Contact your Investor Relations team Uniper SE Udo Giegerich Marc Koebernick Investor Relations Executive Vice President Head of Investor Relations (SVP) E.ON-Platz 1 Group Finance & Investor Relations +49 211 4579 4489 40479 Duesseldorf udo.giegerich@uniper.energy marc.koebernick@uniper.en
Slide 33: Financial calendar & further information
Financial calendar & further information Financial calendar 08 March 2018 Annual Report 2017 08 May 2018 Quarterly Statement January – March 2018 06 June 2018 AGM (Essen, Grugahalle) 07 August 2018 Interim Report January – June 2018 13 November 2018 Quarterly Statement January – September 2018 Furth
Slide 34: Disclaimer
Disclaimer This document and the presentation to which it relates contains information relating to Uniper SE, ("Uniper" or the "Company") that must not be relied upon for any purpose and may not be redistributed, reproduced, published, or passed on to any other person or used in whole or in part for