Rwe Ag · XETR:RWE
Rwe — Non-Deal Roadshow (June 2011)
36 slides from Rwe's roadshow presentation, Jun 20, 2011
Slide 1: Nomura Reverse Roadshow
Nomura Reverse Roadshow 20 June 2011 RWE Deutschland AG – strong value driver position and additional growth potential Dr. Arndt Neuhaus, Chief Executive Officer, RWE Deutschland AG RWE Innogy – green growth continued Dr. Hans Bünting, Chief Financial Officer, RWE Innogy GmbH
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: RWE Deutschland AG – strong value driver position and additional growth potential
RWE Deutschland AG – strong value driver position and additional growth potential Dr. Arndt Neuhaus Chief Executive Officer RWE Deutschland AG Nomura Essen, 20 June 2011
Slide 4: We are a leading energy utility in the German market
Overview We are a leading energy utility in the German market Dr. Arndt Neuhaus Bernd Böddeling Dr. Heinz-Willi Dr. Joachim Dr. Bernd Widera CEO Finance Mölders Schneider Sales and Regional Human Resources Grid Engineering Companies Essen Key figures 2010 RWE Deutschland Group Sales revenue 18.5 Eur
Slide 5: Distribution and sales business are essential value drivers
Overview We play a strong role in the RWE Group: distribution and sales business are essential value drivers RWE Deutschland AG Earnings contribution to RWE Group 2010 EBITDA RWE Group: Operating result RWE Group Distribution Sales 10.3 € bn 7.7 € bn Value Drivers Share RWE Deutschland 22% 21% > Ass
Slide 6: Ongoing growth of operating result in past and future
Overview Ongoing growth of operating result in past and future Review operating result in € m1 Forecast 2011 +5% p.a. - Revenues gas sales below previous year 1,575 Additional costs for improvement of grid 1,150 - infrastructure + Less expenses by "deduction of surplus revenue" 2003 2004 2005 2006 2
Slide 7: Grid regions of RWE Deutschland group
Distribution Grid regions of RWE Deutschland group > RWE Deutschland group owns 349,000 km electricity and 41,000 km gas distribution Hamburg grids. > For operating local distribution Berlin grid (low and medium voltage) Hannover concessions from individual municipalities are needed. Essen Düsseldor
Slide 8: Germany's regulatory framework of incentive-based regulation offers additional profit potential
Distribution Germany’s regulatory framework of incentive-based regulation offers additional profit potential Cost-based regulation Incentive-based regulation > A grid operator’s revenue cap is determined > Principle: Decoupling of revenue from costs by its CAPEX and a specified rate of return: > Inc
Slide 9: Financial performance of distribution grid business oriented at highest European benchmarks
Distribution Financial performance of distribution grid business oriented at highest European benchmarks RWE’s target setting on regulatory outperformance3 Outperformance WACC [%] (regulatory conceded) target Return on RAB [%] RWE European Comparables > Strategic return on RAB1 goals for RWE distrib
Slide 10: Regulator confirms highest efficiency of RWE grid
Distribution Regulator confirms highest efficiency of RWE grid EXAMPLE: Electricity distribution RWE DSO: 100% efficient Industry average Efficiency value Companies in order of efficiency Source: Polynomics 2008. Nomura Reverse Roadshow I 20 June 2011 PAGE 10
Slide 11: Our investment strategy yields high performance grid
Distribution Our investment strategy yields high performance grid EXAMPLE: Typical grid area Grid length 220 km Optimisation 200 km Grid length No. of mid voltage fields 76 (investments, operation, O&M costs) 56 No. of mid voltage fields Degree of cabling 60% 90% Degree of cabling 110/10-kV-Substati
Slide 12: Strong market position in German retail market
Sales Strong market position in German retail market: No. 1 in Electricity and No. 3 in Gas Market position Strategic aspiration Household > 17 % market share in electricity > Increase of turnover and EBIT > 8 % market share in natural gas per customer due to differentiated products/services and the
Slide 13: German household segment in an excellent value driver position
Sales German household segment in an excellent value driver position Margin and cost analysis indicates our excellent performance compared to our competitors Sales EXAMPLE: Tariff customers electricity > RWE margins for tariff customers Margins % above (household and small commercial) for electricit
Slide 14: Research & Development for markets of tomorrow
R&D Research & Development for markets of tomorrow Smart metering E-mobility > Project "Mülheim Counts": > Development and operation Provision of 116,000 smart of 1,600 charging stations electricity meters throughout Germany > Provision of electricity from > Investment volume: 30 € m renewable sourc
Slide 15: Three basic strategic pillars
Summary Based on changing energy markets we have three basic strategic pillars Distribute Sale Develop Outperform regulatory Maintain position as top Develop and success- targets by optimised performer with high fully implement new investment strategy value customer base business models for a and hi
Slide 16: RWE Innogy – green growth continued
RWE Innogy – green growth continued Hans Bünting Chief Financial Officer RWE Innogy GmbH Nomura Essen, 20 June 2011
Slide 17: RWE generation portfolio set to be 75% zero or low carbon by 2025
RWE Group | RWE Innogy | Offshore Wind RWE’s generation portfolio is set to be 75% “zero or low carbon” by 2025 – focus on renewables Capacity 2010 Capacity 2025: ~65 GW Pump storage, other Pump storage, other RWE generation mix (capacity in %) Renewables Renewables Lignite & hard coal Gas 75% Nucle
Slide 18: Renewables remain growth driver despite capex reductions
RWE Group | RWE Innogy | Offshore Wind Renewables remain irrespective of capex reductions growth driver within the RWE Group Capex budget of more than € 1 bn p.a. from 2011 – 2013 allows RWE Innogy’s growth € billion < 7.5 Portfolio divestments1 Portfolio 6.4 0.8 divestments1 5.9 1.3 ~5 ~5 1.1 0.9 1
Slide 19: Europe remains our core market
RWE Group | RWE Innogy | Offshore Wind Europe remains our core market – renewables in WE complement traditional CSEE regions + Turkey Offshore growth markets GER and UK are key to Innogy’s success Strong position in Onshore Wind in SE and WE with clear growth objectives for Poland and Romania Transi
Slide 20: RWE Innogy: Strong European footprint with focus on wind and hydro
RWE Group | RWE Innogy | Offshore Wind RWE Innogy: Strong European footprint with focus on wind and hydro (as of 31 December 2010, accounting view 1) capacities by technology Biomass (2%) Onshore Wind Offshore Wind Onshore wind (67%) Biomass RWE Innogy Hydro Hydro (24%) New Applications 2.3 GW Offsh
Slide 21: All core technologies required to deliver EU RES-E targets
RWE Group | RWE Innogy | Offshore Wind All core technologies - in which Innogy is active - will be required to deliver EU RES-E targets RWEI RES-E Market Growth Forecast EU27 2011-2020 Average LCOE [€/MWhel] 250 380TWh 560TWh 200 Gap EU27 NREAP 2020 Target 150 100 PV Other 50 0 Generation [TWh] Hydr
Slide 22: Performance of Renewables division in FY 2010 and outlook for 2011
RWE Group | RWE Innogy | Offshore Wind Performance of Renewables division in FY 2010 and outlook for 2011 operating result: +29% € million 72 + First-time consolidation of Essent’s wind activities (+€23 million) 56 + First-time consolidation effect from Danta de Energías + Commissioning of new asset
Slide 23: RWE Innogy continues with its ambitious investment programme
RWE Group | RWE Innogy | Offshore Wind RWE Innogy continues with its ambitious investment programme > Clear commitment to grow our renewable Capacity1 growth targets (in GW) business > Focused capex programme 2011 – 2013 leads >4.5 to adjustment of targets. We expect to achieve 3.4 our 4.5 GW target
Slide 24: RWE Innogy's project pipeline
RWE Group | RWE Innogy | Offshore Wind RWE Innogy’s basis for organic growth: Our project pipeline (as of 31 December 2010) Project pipeline by technology & status (electricity generation capacity in GW, accounting view + PPA1) 9.1 18.2 > Total pipeline with projects until 2020 amounts to 18.2 GWel
Slide 25: RWE Innogy has strong starting position in offshore wind
RWE Group | RWE Innogy | Offshore Wind RWE Innogy has strong starting position in offshore wind > 150 MW offshore wind farms (North Hoyle1, Rhyl Flats) in operation and 972 MW (Greater Gabbard, Nordsee Ost, Gwynt y Môr, Thornton Bank 2&3) under construction > 27% stake in Belgian offshore wind proje
Slide 26: Offshore Wind project pipeline: Critical mass reached
RWE Group | RWE Innogy | Offshore Wind Offshore Wind project pipeline: Critical mass reached RWE Innogy’s offshore wind projects > More than 1,000 MW (RWE Innogy share) installed by 2014 Dogger Bank5 (9,000 MW) Triton Knoll (1,200 MW) > Further project pipeline of c. 5 GW North Hoyle1 (60 MW) Nordse
Slide 27: What it takes to build an offshore wind park
RWE Group | RWE Innogy | Offshore Wind What it takes to build an offshore wind park Packages Harbour Foundations Turbine Array Cable Substation Export Cable add. Vessels & Services Equipment Nomura Reverse Roadshow I 20 June 2011 PAGE 27
Slide 28: What are the major challenges in offshore wind?
RWE Group | RWE Innogy | Offshore Wind What are the major challenges in offshore wind? 1. Demanding weather conditions make construction works difficult 2. Key components have to be installed in large numbers > in deep water (up to 40m) > great heights (100m+) 3. Insufficient availability of install
Slide 29: Weather changes carry significant financial risk exposure
RWE Group | RWE Innogy | Offshore Wind Weather changes carry significant financial risk exposure > Winter months with its rough Average days with good weather1 conditions and extended period of bad weather can seriously 30 impede installation/ maintenance works 25 20 > Requirements from the law on p
Slide 30: Future projects in deeper water and further offshore
RWE Group | RWE Innogy | Offshore Wind Future projects in deeper water and further offshore “Pioneer” phase Commercial 50 45 Beatrice Field Sandbank 24 Bard Offshore 1 Dogger Bank Albatros 40 [125 km] Avg. water depth [m] Hochseewindpark De Dreiht Global Tech 1 Bristol Channel Hochsee Windpark Nords
Slide 31: Deepwater installations require giant component dimensions
RWE Group | RWE Innogy | Offshore Wind Deepwater installations require giant component dimensions Gravity foundations Monopiles weight: ca. 2,500 t height: ca. 60 m material: concrete turbines: 5/6 MW Jackets weight: weight: ca. 250 t plus ca. 1,000 t transition piece ca. 180 t height: ca. 60 m heig
Slide 32: Availability of vessels is extremely limited
RWE Group | RWE Innogy | Offshore Wind Availability of vessels is extremely limited – design of existing vessels does not meet offshore needs Max. depth (m) 60 Maximum conditions for current installation vessels 50 40 Dong Centrica Dong 30 20 10 0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 Turbine capacity (MW
Slide 33: Our approach: project organisation, logistics and own vessels
RWE Group | RWE Innogy | Offshore Wind Our approach: In the end it comes down to perfect project organisation, logistics and own vessels Seabreeze programme: > Construction of two self propelled jack-up vessels > Specially designed for turbines in the 5 to 6 MW class… > …and deepwater environment: p
Slide 34: RWE Innogy is well positioned in the renewables business
RWE Group | RWE Innogy | Offshore Wind RWE Innogy … … is well positioned in the renewables business > Installed capacity already more than doubled within two years to 2.3 GW > Diversified portfolio in terms of technologies and regions … will significantly increase capacity and results > Large, reali
Slide 35: Back-Up
Back-Up Nomura Reverse Roadshow I 20 June 2011 PAGE 35
Slide 36: RWE Innogy's generation target portfolio in 2015
RWE Group | RWE Innogy | Offshore Wind Risk diversification across technologies, regions and support mechanisms RWE Innogy’s generation target portfolio in 2015 by… … technology …technology …country New Applications Other Hydro Germany Netherlands Onshore Wind Spain Biomass Italy UK in TWh Offshore