Rwe Ag · XETR:RWE
Rwe — Q1 2007 Earnings Presentation
27 slides from Rwe's earnings presentation, May 15, 2007
Slide 1: Report on the First Quarter of Fiscal Year 2007
Report on the First Quarter of Fiscal Year 2007 Essen, May 15, 2007 Dr. Rolf Pohlig Chief Financial Officer RWE AG
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: Key messages
Key messages Performance Operating result +35% Q1 2007 Recurrent net income +28% New € 600 m efficiency enhancement programme started Financial Net debt reduced to € 6.2 bn Position Contractual Trust Arrangement (CTA) implemented German National Allocation Plan II: Tighter allocation exp
Slide 4: RWE Group results Q1 2007
RWE Group results Q1 2007 January – March change € million 2007 2006* in % EBITDA 3,216 2,500 +28.6 Operating result 2,816 2,092 +34.6 Non-operating result 23 -56 +141.1 Financial result -307 -535 +42.6 Income from continuing operations before tax 2,532 1,501 +68.7 Taxes on income -871 -487 -78.9 In
Slide 5: Divisional performance
Divisional performance Operating Result EBITDA January - March 2007 2006 Change 2007 2006 Change € million in % in % RWE Power 1,544 1,029 +50.0 1,697 1,207 +40.6 Power Generation1 1,361 824 +65.2 1,463 931 +57.1 RWE Dea 183 205 -10.7 234 276 -15.2 RWE Energy2 981 1,013 -3.2 1,115 1,143 -2.4 German
Slide 6: Non-operating result
Non-operating result January – March Change € million 2007 2006 (absolute) Capital gains 96 7 +89 Impairment losses 0 0 0 Restructuring / other -73 -63 -10 Total 23 -56 +79 Capital gains: sale of a 25% stake in rhenag Restructuring / other: – Amortization of RWE npower’s customer accounts (€ -83
Slide 7: Financial result
Financial result January – March Change € million 2007 2006 in % Net interest result -166 -206 +19.4 Interest accretion to non-current -289 -292 +1.0 provisions Other financial result 148 -37 - Total -307 -535 +42.6 Net interest result: lower debt resulting from the sale of Thames Water Other fi
Slide 8: Cash flow statement
Cash flow statement January – March Change € million 2007 2006 (absolute) Income 1,661 1,114 547 Depreciation, amortization, 577 714 -137 impairment losses and write-backs Changes in provisions -251 1 -252 Changes in deferred taxes 422 -32 454 Disposal gains -280 -144 -136 Other non-cash items -15 3
Slide 9: Development of net debt
Development of net debt € billion Funding Capex Dividends Cash flows Acquisitions/ Currency Change in CTA from disposals/ translation pension operating (de)consoli- effect / provisions activities dations Others 20 +0.7 +0.1 -0.9 +7.9 -0.2 -0.5 15 -7.8 10 6.9 6.2 5 11.6 3.8 2.4 0 -4.7 -5 Net Net debt
Slide 10: Outlook for 2007
Outlook for 2007 Reported 20061 Pro forma 20062 2007 € million € million forecast2, 3 External revenue 44,256 42,554 Ò Operating result 6,106 5,681 ca. +10% Net income 3,847 3,847 Ô Recurrent net income 2,466 2,466 ca. +10% Capex on fixed assets 4,494 2,9104 ca. € 4 bn4 1 Exchange rates of (€1 =) US
Slide 11: Outlook for 2007
Outlook for 2007 Reported 20061 Pro forma 20062 2007 € million € million forecast2, 3 EBITDA 7,861 7,172 +5% - 10% Operating result 6,106 5,681 ca. +10% RWE Power 2,744 2,744 Ò RWE Energy 2,506 2,506 Ô RWE npower 512 512 Ò Water Division 425 DCO2 DCO2 1 Exchange rates of (€ 1 =) USD 1.26; GBP 0.68.
Slide 12: Update on Emissions Trading (I): The new German National Allocation Plan (NAP II)
Update on Emissions Trading (I): The new German National Allocation Plan (NAP II) Mid February 2007, the Federal Environment Ministry drafted an adjusted proposal for NAP II: – New proposed emissions cap: 453 million t p.a. + 3 million t for gas by-products – Transfer rule will be replaced by a be
Slide 13: Update on Emissions Trading (II): Expected impact on RWE from German NAP II
Update on Emissions Trading (II): Expected impact on RWE from German NAP II CO2 emissions and free allocation of RWE in Germany (in million tons; annualized) 147 140 +/- 5% 142 29 from contractually secured capacity 26 from own power plants free 118 116 allocation ca. 95% free allocation ca. 60% - 6
Slide 14: German regulation: Antitrust legislation and network regulation
German regulation: Antitrust legislation and network regulation Proposed amendment to the law against restraint of competition (GWB) Enables cartel office to more strictly monitor energy prices for market abuse. Further key changes: reversal of burden of proof (utilities have to prove appropriaten
Slide 15: Back-ups
Back-ups 15 Conference Call, Q1 2007 | May 15, 2007
Slide 16: Adjusted 2006 quarterly numbers
Adjusted* 2006 quarterly numbers FY 2006 € million Q1 2006 Q1-Q2 2006 Q1-Q3 2006 reported EBITDA 2,500 4,520 5,955 7,861 Operating result 2,092 3,758 4,837 6,106 RWE Power 1,029 1,690 2,284 2,744 RWE Energy 1,013 1,723 2,063 2,506 RWE npower 38 274 379 512 Water Division 88 209 350 425 Others/consol
Slide 17: Introduction of incentive regulation in Germany
Introduction of incentive regulation in Germany Cost reduction for 2008 based on 2006 costs Starting point incentive regulation reduction of inefficient costs: best practice individual X (efficient costs) productivity of industry sector: general X regulatory 01.01.2009 1 2 to be discussed period (4
Slide 18: Update on Emissions Trading: Current status of UK Governmental draft (NAP II)
Update on Emissions Trading: Current status of UK Governmental draft (NAP II) The UK published a drafted NAP II in March 2006; following public consultation, the Government announced further details of the NAP at the end of June and submitted it to the EU Commission on August 21. On November 29
Slide 19: RWE Group electricity production
RWE Group electricity production January – March Other Total Total in TWh Germany UK Internat. 2007 2006 Lignite 18.4 1.4 19.8 19.7 Nuclear 8.4 8.4 13.9 Hard coal 13.9 4.9 18.8 20.9 thereof contracts 8.8 8.8 9.2 Gas 2.5 4.1 6.6 5.8 Hydro, oil, other 1.6 0.3 0.1 2.0 2.2 thereof contracts 0.7 0.7 0.6
Slide 20: RWE Group electricity sales volume
RWE Group electricity sales volume January – March Ger- Po- Hun- Total Total in TWh many UK land gary Other 2007 2006 Private and commercial 8.5 6.4 1.0 1.5 0.2 17.6 18.6 customers Industrial and corporate 13.2 8.3 0.8 1.7 0.1 24.1 24.1 customers Distributors 22.3 0.2 1.4 0.1 24.0 20.1 Electricity t
Slide 21: RWE Group gas sales volume
RWE Group gas sales volume January – March Ger- Czech Total Total in TWh many Rep. UK Other 2007 2006 Private and commercial 10.2 14.7 18.2 3.0 46.1 55.2 customers Industrial and corporate 13.1 11.5 3.3 5.8 33.7 39.8 customers Distributors 35.8 5.3 0.0 0.0 41.1 52.8 Total 59.1 31.5 21.5 8.8 120.9 14
Slide 22: RWE Power: Attractive spreads locked in
RWE Power: Attractive spreads locked in Forward selling of RWE Power in the German market (baseload forwards in €/MWh) 64 60 56 52 Forward 48 44 2007 40 36 32 28 >1% sold >10% sold >35% sold >55% sold >90% sold >95% sold >95% sold 24 64 60 56 52 Forward 48 44 2008 40 36 32 28 >1% sold >10% sold >45%
Slide 23: RWE AG: flexible funding structure
RWE AG: flexible funding structure Fully committed for liquidity syndicated loan € 4.0 billion back-up and (€ 2.0 bn 364 days refinancing € 2.0 bn 5 years) €0.0 billion Commercial paper (up to 1 year) $ 5.0 billion $ 0.4 billion MTN programme (up to 30 years) € 20 billion € 14.3 billion Amounts used
Slide 24: Financial assets and liabilities (as at 03/31/2007)
Financial assets and liabilities (as at 03/31/2007) €17.2 €19.6 billion1 billion2 1.8 0.4 0.4 2.2 other financial assets 1.8 other other loans 17.4 commercial paper 12.0 cash & cash equivalents bonds (incl. other securities held as current assets notes payable) and securities held as 0.8 bank loans
Slide 25: Gross financial debt currency and interest exposure
Gross financial debt currency and interest exposure* Gross financial debt as of March 31, 2007: € 19.6 billion € / Others 23% Floating 20% $ 37% Fixed 80% £ 40% Long term financed (> 1 Year): 82% of gross financial debt Short term financed (< 1 Year): 18% of gross financial debt With debt in foreign
Slide 26: Structural subordination in the RWE Group
Structural subordination in the RWE Group RWE AG (A+ / A1) / RWE Finance B.V. / Consolidated German Subsidiaries* 84% RWE Npower Holdings Plc Thames Water Aqua Holdings GmbH RWE Npower Plc American Water E’town Corp. (A- / Baa1) (A-/Baa1) < 2% 14% Elizabethtown Water Co. As of March 31, 2007 For sal
Slide 27: Reminder...
Reminder... To be always updated, please have a look at our websites. Navigation around www.rwe.com Calendar Investor Relations > Calendar Annual Report Investor Relations > Financial Reports > Annual Report Interim Report Investor Relations > Financial Reports > Interim Reports Factbook (30