Rwe Ag · XETR:RWE
Rwe — Investor Day (March 2020)
62 slides from Rwe's investor day presentation, Mar 12, 2020
Slide 1: Capital Market Day 12 March 2020
Capital Market Day 12 March 2020
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: Agenda
Agenda A driving force in the energy world of tomorrow Rolf Martin Schmitz, CEO RWE AG Excellent platform to capture long-term growth in wind and solar Anja-Isabel Dotzenrath, CEO RWE Renewables Creating value in the renewable energy world Markus Krebber, CFO RWE AG 12 Mar 2020 Capital Market Day Pa
Slide 4: Strategic Overview
Strategic Overview A driving force in the energy world of tomorrow Rolf Martin Schmitz Chief Executive Officer RWE AG 12 Mar 2020 Capital Market Day
Slide 5: New RWE – Well positioned for the future energy world
New RWE – Well positioned for the future energy world • Business model focused on green and flexible energy • Clear path for coal phaseout • Carbon neutral by 2040 • Strong financial position and significant investments in renewables for sustainable growth • Focus on value creation and total shareho
Slide 6: Successful delivery of RWE's path into the new energy world
Successful delivery of RWE’s path into the new energy world 2016 Alignment as provider of security of supply with focus on operational and financial value maximisation Conclusion of restructuring of responsibilities for nuclear waste storage 2017 Strategy review resulting in decision to extend opera
Slide 7: Continued focus on business excellence and value creation during the transformation
Continued focus on business excellence and value creation during the transformation of the company Total Efficiency Carbon Credit Dividend shareholder programme reduction rating payments return Baa3/BBB billion million million tonnes Target 2017 – 2019 Since 2012 2017 – 20191 2017 – 2019 achieved on
Slide 8: Our energy for a sustainable life
Our energy for a sustainable life We all need electricity – children as well as adults, small companies as well as large ones. Wherever there is electricity, there is light, warmth and communication, production, medical care and mobility. Electricity is life. 12 Mar 2020 Capital Market Day
Slide 9: The energy world of tomorrow is electric and low-carbon
The energy world of tomorrow is electric and low-carbon Global cumulative installed capacity, GW 9,000 Significant Offshore investments in 8,000 wind renewable energy Rising demand for electricity driven 7,000 by economic and population growth 6,000 Onshore Requirement for and sector coupling wind 5
Slide 10: We are ideally positioned for the new energy world
We are ideally positioned for the new energy world Experienced operator Strong wind and solar business of flexible assets Leading commercial platform GW installed GW in hydro, Global commodity trading wind and solar biomass and & commercial asset capacity gas plants optimisation No. offshore Thereof
Slide 11: Business model fully aligned with our strategic focus on the energy transition
Business model fully aligned with our strategic focus on the energy transition Core Coal/Nuclear Offshore Onshore Hydro/Biomass/ Supply • Responsible and Wind Wind/Solar Gas & Trading socially accept- able phaseout • Global expansion • Expansion in on- • Targeted invest- • Expansion of of coal of of
Slide 12: Strategy of core business focused on expansion of green and flexible energy
Strategy of core business focused on expansion of green and flexible energy Build-out of batteries and Significant growth in wind & solar research in new technologies Green power commercialisation GW pro rata • Batteries: 30 MWh battery 15 year PPA for Nysäter project storage facility under covering
Slide 13: Responsible phaseout of coal by 2038 at latest
Responsible phaseout of coal by 2038 at latest 23.2 GW 12.7 GW <10.0 GW Coal – installed 4.3 GW capacity 0.0 GW 2012 2019 2023 2030 2038 Coal as % of total 44.6% 30.4% <25.0% <10.0% 0% capacity Coal as % of total 62.4% 38.4%1 <35.0% <20.0% 0% production 1 Includes pro forma combined renewables portf
Slide 14: Decarbonisation target is fully supported by our strategy
Decarbonisation target is fully supported by our strategy CO2 Target to achieve CO2 neutrality for our Neutral global generation portfolio by 2040 million tonnes Fully supportive of Paris Climate Agreement Proven track record of carbon emission reductions 2012 2019 2030 2040 12 Mar 2020 Capital Mark
Slide 15: Our commitment to the UN SDGs goes beyond our carbon reduction targets
Our commitment to the UN SDGs goes beyond our carbon reduction targets Target of 30% women in 1st management level Recultivation programme with focus on biodiversity Regional support for structural change and energy transition UN Global Compact is integral part of supplier contracts Participation an
Slide 16: Focus on value creation and total shareholder return
Focus on value creation and total shareholder return Value creation Shareholder return • Strict investment discipline to ensure value accretive • Delivery of steadily growing dividend growth • Continuous cost discipline across the group • Introduction of new management remuneration €0.851 €1.00 €0.8
Slide 17: Proposed new management remuneration is aligned with strategic goals and shareholder interests
Proposed new management remuneration is aligned with strategic goals and shareholder interests • Reflection of new strategic goals ‘post transaction’ in management incentive scheme • Inclusion of CO2 reduction target in long-term Long-term incentive incentive plan Share-based compensation scheme wit
Slide 18: A driving force in the energy world of tomorrow
A driving force in the energy world of tomorrow • Uniquely positioned to benefit from the energy transition • Attractive growth opportunities in renewable energy • Strict focus on value creation and shareholder return • Strong commitment to sustainable development goals • Highly motivated team incen
Slide 19: Offshore/Onshore Wind/Solar
Offshore/Onshore Wind/Solar Excellent platform to capture long- term growth in wind and solar Anja-Isabel Dotzenrath Chief Executive Officer RWE Renewables 12 Mar 2020 Capital Market Day
Slide 20: Excellent platform to capture growth in wind and solar
Excellent platform to capture growth in wind and solar Experienced Attractive Strong pipeline Integrated management asset base for growth business model team Diverse and stable Across all Value enhancing and Collaborating earnings profile technologies – leveraging extensive closely across core offsh
Slide 21: Powerful position in wind and solar right from the start
Powerful position in wind and solar right from the start Installed capacity by technology1 Installed capacity per country1 Leading market position2 No. in offshore wind Solar ROW Germany 2% Offshore 3% 16% Track record in four technologies 28% US 38% 8.7 GW 8.7 GW 24% UK 70% 4% 5% 3% Onshore 5% Ital
Slide 22: Diversified earnings profile with high level of stability
Diversified earnings profile with high level of stability 2019 gross margin by support mechanism 2019 pro forma EBITDA €1.95bn Onshore Wind/ Solar Americas Merchant ~30% 9% Offshore Onshore Wind PPAs/ ~10% Wind/ Tax credits Regulated Solar 22% or secured1 Europe Certificates ~30% €1.4 bn & APAC 69%
Slide 23: Well on track to achieve more than 13 GW installed capacity by the end of 2022
Well on track to achieve more than 13 GW installed capacity by the end of 2022 Our ambition to grow GW pro rata >13.0 1.6 GW 0.2 0.5 Average net growth 8.7 2.0 ambition per year 0.5 Offshore 0.2 Onshore 1.6 Onshore 0.4 Solar GW Installed COD COD COD Residual Target More than 60% of growth Capacity 2
Slide 24: Short to mid-term growth focused on established core regions with expansion into APAC planned
Short to mid-term growth focused on established core regions with expansion into APAC planned Europe North America APAC1 GW ~51 GW p.a. 770 ~34 GW p.a. Market ~16 GW p.a. growth 473 532 343 325 prospect 261 183 255 192 2020e 2025e 2030e 2020e 2025e 2030e 2020e 2025e 2030e UK, Germany, Netherlands, R
Slide 25: Strong project pipeline and development activities providing optionality for long-term growth
Strong project pipeline and development activities providing optionality for sustainable long-term growth Development pipeline per maturity stage Development activities and average annual devex GW pro rata 11.8 Σ 22 GW Expensed devex Capitalised 5.4 ~7.3 GW devex 1.9 • New market ~1/3 (excl. central
Slide 26: Offshore Wind: Attractive near-term build-out coupled with long-term development options
Offshore Wind: Attractive near-term build-out coupled with long-term development options Secured near-term capacity build-out Further projects in development, GW pro rata GW pro rata 4.9 Delta Nordsee Pre-emption right 0.5 GW 1.4 0.2 Nordsee Two&Three Pre-emption right 0.1 GW 2.5 0.3 0.5 Rampion Ext
Slide 27: Onshore Wind/Solar Europe & APAC: Well diversified pipeline
Onshore Wind/Solar Europe & APAC: Well diversified pipeline providing opportunities for profitable growth Development pipeline Near-term capacity build-out and development by the end of 2022 GW pro rata GW pro rata 4.5 0.6 2.9 0.8 0.8 ~5.0 Installed Under construction Near-term Estimated capacity 20
Slide 28: Onshore Wind/Solar Americas: Substantial 2020 wind construction programme
Onshore Wind/Solar Americas: Substantial 2020 wind construction programme, with good optionality during PTC ramp-down Development pipeline Near-term capacity build-out and development by the end of 2022 GW pro rata GW pro rata 5.4 3.4 0.6 1.4 4.6 ~9.7 5.1 Installed Under construction Near-term Estim
Slide 29: Our integrated business model addresses all value pools and risks
Our integrated business model addresses all value pools and risks to deliver against our growth ambition Development Engineering/ Operations & Commercial- Partnering Construction Maintenance isation • Active origina- • Global back- • Full operational • Management • Structuring of tion and green- bon
Slide 30: Engineering: preparing and adopting innovative technologies ensures our long-term success
Engineering & Construction Engineering: preparing and adopting innovative technologies ensures our long-term success 2010 2015 2020 2025 Commercial viability Offshore wind Storage/Batteries Floating offshore wind Airborne wind Storage/Batteries Floating offshore wind Innovation • Intermittent and vo
Slide 31: Construction: strong delivery track record across regions and technologies
Engineering & Construction Construction: strong delivery track record across regions and technologies Delivery of projects >50 MW installed capacity Number of projects delivered 2017 – 2019 2017 – 2019 Delivered gross 1 GW 1.4 GW 0.5 GW1 Installed On On capacity p.a. COD capacity budget time #10 # 1
Slide 32: O&M: strong self-perform platform increases yield and reduces costs
Operations & Maintenance O&M: with our strong self-perform platform we increase yield and reduce costs through full operational control Offshore and onshore performance improvement through self-perform Own site managers and technicians supported by global engineering backbone taking full control of
Slide 33: Commercialisation: extensive in-house capabilities ensure superior value creation
Commercialisation Commercialisation: our extensive in-house capabilities ensure superior value creation and comprehensive risk management FID Before FID Post FID • Track record in securing risk/reward optimised • Maximisation of risk-adjusted revenues through offtake products with broad range of cor
Slide 34: Partnering: an essential part of our business model to reduce risk
Partnering Partnering: an essential part of our business model to reduce risk and create additional value Before FID At FID Post COD Rationale • Secure complementary local • Share construction risk and • Full value crystallisation capabilities for new market reduce capex exposure • Portfolio optimis
Slide 35: Experienced management team passionate to drive performance to the next level
Experienced management team passionate to drive performance to the next level RWE Renewables CEO CFO CCO COO Offshore Onshore/Solar Global Americas EU & APAC Anja-Isabel Holger Tom Sven Silvia Katja Dotzenrath Himmel Glover Utermöhlen Ortín Rios Wünschel Essen Essen Swindon Hamburg Austin Essen Comp
Slide 36: Excellent platform to capture growth in wind and solar
Excellent platform to capture growth in wind and solar • Attractive asset base with diverse and stable earnings profile • Strong platform for growth across all technologies • Value enhancing integrated business model leveraging extensive capabilities • Experienced team collaborating closely across c
Slide 37: Financial overview
Financial overview Creating value in the renewable energy world Markus Krebber Chief Financial Officer RWE AG 12 Mar 2020 Capital Market Day
Slide 38: The new RWE at a glance – a compelling investment opportunity
The new RWE at a glance – a compelling investment opportunity Future- Growth Solid Coal Growing proofed in green balance phaseout dividend business energy sheet liabilities Sustainable Significant Supporting target Financially ring- In line with earnings profile investments in rating Baa2/BBB fenced
Slide 39: Delivery and outperformance of financial targets enables new RWE to start from a strong position
Delivery and outperformance of financial targets enables new RWE to start from a strong financial position Earnings outlook 2017 to 2019 met or beaten Successful hedge strategy – outright hedge margins until 2022 significantly above current market prices Active management of CO2 exposure: carbon ris
Slide 40: New strategic positioning is reflected in steering model of RWE
New strategic positioning is reflected in steering model of RWE with focus on green growth Core Coal/Nuclear €0.3 bn Offshore Onshore Hydro/Biomass/ Supply Wind Wind/Solar Gas & Trading adj. EBITDA €1.0 bn €0.4 bn €0.7 bn €0.7 bn adj. EBITDA adj. EBITDA adj. EBITDA adj. EBITDA Core adj. EBITDA 2019
Slide 41: RWE's core business set to show solid growth into 2022
RWE’s core business set to show solid growth into 2022 Outlook for adjusted EBITDA for RWE’s core business Offshore Wind € bn Contribution of Triton Knoll 2021/2022 ~8% p.a. 2.7 ~2.55 – 2.85 Onshore Wind/Solar ~2.15 – 2.45 Supply & Trading Contribution from new net capacity of ~3.5 GW Hydro/Biomass/
Slide 42: High level of long-term secured earnings streams from existing wind and solar business
High level of long-term secured earnings streams from existing wind and solar business Estimated development of adj. EBITDA wind/solar illustrative • Earnings profile improves through portfolio development since 2018 • Expected adj. EBITDA in 2030 still above 2019 €1.4 bn1 despite no further growth
Slide 43: Significant investments to grow wind & solar capacity to >13 GW by 2022
Significant investments to grow wind & solar capacity to >13 GW by 2022 RWE’s core capex programme 2020 – 2022 Gross growth capex by region and technology € bn Offshore Onshore Solar & ~3-4 ~8-9 Onshore wind wind storage ~25% Wind/Solar Germany ~10% <5% Europe & APAC Onshore UK ~30% <5% ~ 5% ~5 ~30%
Slide 44: Asset rotation and divestment strategy to accelerate our growth ambitions
Asset rotation and divestment strategy to accelerate our growth ambitions and additional lever to create value Asset rotation and divestment programme 2020 – 2022 • Disposal of GB grid connection (OFTO – offshore transmission owners) ~20% ~40% • Partnering in large scale projects for risk GB grid Po
Slide 45: Value added by attractive returns in the renewables business
Value added by attractive returns in the renewables business IRR requirements for wind/solar projects Offshore Wind • Investment decisions based on strict hurdle rate approach with project IRR typically exceeding base renewables WACC by 100 to 300 bps Mature markets 5.5% 8.5% • Hurdle rates include
Slide 46: Solid capital structure provides financial flexibility for core business
Solid capital structure provides financial flexibility for core business • Net debt of €7.0 bn after financial ring-fencing of New definition of net debt 31 Dec coal phaseout liabilities (€ million) 2019 • 2019 leverage factor1 Financial assets 9,098 X Financial liabilities 5,179 • Targeted leverage
Slide 47: Commitment to financially ring-fence coal phaseout liabilities with financial portfolio
Commitment to financially ring-fence coal phaseout liabilities with financial portfolio Funding of coal phaseout liabilities € bn • Provisions for mining liabilities reflecting accelerated 4.6 coal phaseout total €4.6 bn • Agreement with German government includes compensation payment of €2.6 bn pay
Slide 48: Coal/Nuclear earnings driven by margin improvements and capacity closures
Coal/Nuclear earnings driven by margin improvements and capacity closures Outlook for adjusted EBITDA Earnings outlook 2020 € million • Improvement from higher realised generation margin • Production plan updated after lignite phaseout 500 – 600 550 – 650 agreement 340 Mid-term earnings outlook 2022
Slide 49: Mid-term outlook for RWE Group shows earnings growth down to the bottom line
Mid-term outlook for RWE Group shows earnings growth down to the bottom line and high share of core business Earnings outlook for RWE Group (€ bn) Adj. EBITDA Adj. EBIT Adj. net income ~7% p.a. 3.1 – 3.4 2.7 – 3.0 ~11% p.a. ~10% p.a. 1.5 – 1.8 1.2 – 1.5 1.05 – 1.35 0.85 – 1.15 Core Core Core Core 20
Slide 50: RWE targets continued dividend growth in line with core business development
RWE targets continued dividend growth in line with core business development Elements of dividend policy • Management focus on total shareholder return €/share 2 0.85 • Target to grow future dividends in line with earnings 0.80 1 growth in core business • Objective of steady growth with potential to
Slide 51: Creating value in the renewable energy world
Creating value in the renewable energy world • Sustainable long-term earnings profile • Investments in renewables provide basis for attractive growth • Strong balance sheet providing financial flexibility • Management focus on total shareholder return with continued dividend growth 12 Mar 2020 Capit
Slide 52: Closing remarks
Closing remarks 12 Mar 2020 Capital Market Day
Slide 53: Creating value in the renewable energy world: Investment highlights
Creating value in the renewable energy world Investment highlights Uniquely positioned to benefit from the energy transition Attractive growth opportunities in renewable energy Strict focus on value creation and shareholder return Strong commitment to sustainable development goals Highly motivated t
Slide 54: Appendix
Appendix 12 Mar 2020 Capital Market Day
Slide 55: Outlook for RWE Group
Outlook for RWE Group € million Fiscal year 2020e outlook Fiscal year 2022e outlook Adj. EBITDA ~ 2,700 – 3,000 ~ 3,100 – 3,400 Adj. depreciation ~1,500 ~1,600 Adj. EBIT ~1,200 – 1,500 ~1,500 – 1,800 Adj. financial result ~-100 ~-150 Adj. tax 15% 15% Adj. minorities ~-50 ~-100 Adj. net income ~850 –
Slide 56: Divisional outlook for Offshore Wind
Divisional outlook for Offshore Wind Outlook for adjusted EBITDA – Offshore Wind € million • Normalised weather situation assumed versus ~9% p.a. low wind levels in 2019, particularly in UK 1,150 – 1,350 • Contribution of new projects 900 – 1,100 - Triton Knoll (UK, 860 MW2, 2021/22) 961 • Nordsee O
Slide 57: Divisional outlook for Onshore Wind/Solar
Divisional outlook for Onshore Wind/Solar Outlook for adjusted EBITDA – Onshore Wind/Solar € million • Normalised weather situation assumed versus low wind levels in 2019, particularly in UK • Planned contribution of new projects: ~3.5 GW net capacity additions, of which ~2 GW in the US ~17% p.a. •
Slide 58: Divisional outlook for Hydro/Biomass/Gas
Divisional outlook for Hydro/Biomass/Gas Outlook for adjusted EBITDA – Hydro/Biomass/Gas € million • Declining revenues from GB capacity market: 2019 2020 2021 2022 €229m ~€160m ~€160m ~€80m 2019 includes one-off repayment for 2018 671 GB capacity market of €51m 550 – 650 500 – 600 • Expectation of
Slide 59: Divisional outlook for Supply & Trading
Divisional outlook for Supply & Trading Outlook for adjusted EBITDA – Supply & Trading € million • Exceptionally high earnings contribution in 2019 due to outstanding trading performance and strong contribution from gas and LNG • Long-term average earnings contribution of ~€250 million, including st
Slide 60: Key sensitivities to our planning assumptions for 2020
Key sensitivities to our planning assumptions for 2020 Driver Segment Type Sensitivity Group impact1 Wind levels Offshore Wind P&L +/- 10% production +/- €150 million Onshore Wind/Solar P&L +/- 10% production +/- €100 million Power prices Offshore Wind and Onshore Wind/Solar P&L +/- 10% +/- €60 mill
Slide 61: Your contacts in Investor Relations
Your contacts in Investor Relations Important Links Financial Calendar • Annual and interim reports & statements • 28 April 2020 http://www.rwe.com/ir/reports ADR programme available Annual General Meeting • Investor and analyst conferences • 14 May 2020 http://www.rwe.com/ir/investor-and-analyst-co
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