Rwe Ag · XETR:RWE
Rwe — Q1 2010 Earnings Presentation
29 slides from Rwe's earnings presentation, May 12, 2010
Slide 1: Investor and Analyst Conference Call Q1 2010
Investor and Analyst Conference Call Q1 2010 Essen, May 12, 2010 Rolf Pohlig Chief Financial Officer Stephan Lowis Vice President 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: A good start to 2010
A good start to 2010 Strong operating performance: EBITDA +16%, operating result +14%, recurrent net income +15% Successful integration of Essent – strong earnings contribution in Q1 2010 With the commissioning of the Lingen CCGT in April the first of our major power plant projects has been finished
Slide 4: RWE Group key performance indicators
RWE Group key performance indicators January – March change € million 2010 2009 in % External revenue 15,267 14,516 +5.2% Cash flows from operating activities 1,509 533 +183.1% EBITDA 3,574 3,090 +15.7% Operating result 2,987 2,624 +13.8% Non-operating result -244 424 - Financial result -402 -510 +2
Slide 5: Performance of the Germany Division (I) Power Generation Business Area (RWE Power)
Performance of the Germany Division (I) Power Generation Business Area (RWE Power) Q1 operating result: +11.2 % € million + Lower fuel costs (+€ 233 million) and costs for CO2 certificates (+€ 101 million) Lower realised electricity prices and higher volumes (-€ 103 million) including positive margi
Slide 6: Forward selling by RWE Power in the German market
Forward selling by RWE Power in the German market (Base load forwards in €/MWh) 100 90 2010 forward 80 70 60 50 40 >> 90% >> 10% 10% sold sold >> 40% 40% sold sold >> 60% 60% sold sold >> 90% 90% sold sold 90% sold sold 30 100 90 2011 forward 80 70 60 50 40 >> 20% 20% sold sold >> 50% 50% sold sold
Slide 7: Performance of the Germany Division (II) Sales and Distribution Networks
Performance of the Germany Division (II) Sales and Distribution Networks Business Area Q1 operating result: +1.6% € million Sales + Slightly higher gas sales volumes, mainly due to weather effects Reduced electricity margins 645 655 Distribution networks + Lower maintenance work and costs due to wea
Slide 8: Performance of the Netherlands/Belgium Division (Essent)
Performance of the Netherlands/Belgium Division (Essent) Q1 operating result: € million + First-time consolidation of Essent + RWE Energy Nederland (REN) included in “other/consolidation” in Q1 281 2009 + Operating performance: Higher gas sales mainly due to weather effects - Q1 2009 Q1 2010 Guidanc
Slide 9: Performance of the United Kingdom Division (RWE npower)
Performance of the United Kingdom Division (RWE npower) Q1 operating result: +18.2% € million + Positive f/x effects (+€ 6 million) Power generation 227 Reduced generation margins and lower income from short-term 192 markets Retail + Higher gas volumes (residential & commercial) due to weather effec
Slide 10: Performance of the Central & Eastern Europe Division
Performance of the Central & Eastern Europe Division Q1 operating result: +38.8 % € million Czech Republic + Higher margins in the Czech gas sales business but lower gas sales volumes and transit revenues + Improved electricity sales margins in Hungary and Poland 447 322 + Positive f/x effects Q1 20
Slide 11: Performance of the Renewables Division (RWE Innogy)
Performance of the Renewables Division (RWE Innogy) Q1 operating result: +50.0 % € million + First-time consolidation of Essent wind activities (+€ 6 million) + First-time consolidation effect from Danta de Energias 30 + Commissioning of Rhyl Flats wind farm (90 MW) in December 2009 20 Upfront costs
Slide 12: Performance of the Upstream Gas & Oil Division (RWE Dea)
Performance of the Upstream Gas & Oil Division (RWE Dea) Q1 operating result: +19.6% € million + Higher oil prices Lower gas prices 128 Lower production volumes 107 + German business: lower royalties plus production and operating costs + North Africa: reduced exploration costs due to end of seismic
Slide 13: Performance of the Trading/Gas Midstream Division (RWE Supply & Trading)
Performance of the Trading/Gas Midstream Division (RWE Supply & Trading) Q1 operating result: -75.7% € million Trading + First-time consolidation of Essent’s trading activities (+€ 86 million) 362 Supply Extraordinarily high profit contribution in Q1 2009 88 Czech portfolio: write down of gas storag
Slide 14: Non-operating result
Non-operating result January – March Change € million 2010 2009 (absolute) Capital gains -3 4 -7 Impairment losses - - - Earnings impact of commodity -443 382 -825 derivatives Restructuring, other 202 38 164 Total -244 424 -668 ¾ Capital gains: No major capital gains in 2009 and 2010. ¾ Earnings imp
Slide 15: Financial result
Financial result January – March Change € million 2010 2009 (absolute) Net interest -199 -114 -85 Interest accretion to non-current -218 -221 3 provisions Other financial result 15 -175 190 Total -402 -510 108 ¾ Net interest - Higher interest expenses due to increased debt used to finance our growth
Slide 16: Cash flow statement
Cash flow statement January – March Change € million 2010 2009 (absolute) Funds from operations (FFO) 2,362 1,940 422 Change in working capital -853 -1,407 554 of which variation margins 173 900 -727 Cash flows from operating activities 1,509 533 976 Capex on fixed assets 1,175 853 322 Free cash flo
Slide 17: Outlook for 2010
Outlook for 2010 2009 2010 € million forecast EBITDA 9,165 + 5 – 10% Operating result 7,090 + ca. 5% Recurrent net income 3,532 + ca. 5% Dividend € 3.50 Payout ratio 50% – 60%1 Capex on fixed assets €bn 5.9 ca. 7.0 1 Based on recurrent net income RWE AG | Conference Call Q1 2010 | May 12, 2010 17
Slide 18: Back-up
Back-up RWE AG | Conference Call Q1 2010 | May 12, 2010 18
Slide 19: RWE Group electricity production (by geographic regions)
RWE Group electricity production (by geographic regions) January – March Other Total Total in TWh Germany UK NL Internat. 2010 2009 Lignite 17.0 - - 1.5 18.5 18.3 Nuclear 11.3 - - - 11.3 9.9 Hard coal 11.0 3.7 1.7 0.2 16.6 15.0 thereof contracts 6.9 6.9 5.2 Gas 3.6 5.3 2.1 0.1 11.1 6.1 Renewable ene
Slide 20: RWE Group electricity sales volume (by geographic regions)
RWE Group electricity sales volume (by geographic regions) January – March Total Total in TWh Germany UK NL Poland Hungary Other 2010 2009 Private and commercial 8.5 5.9 4.6 0.7 1.5 - 21.2 17.1 customers Industrial and corporate 13.2 8.1 1.5 1.2 1.5 - 25.5 23.5 customers Distributors 23.6 - - 0.2 1.
Slide 21: RWE Group gas sales volume (by geographic regions)
RWE Group gas sales volume (by geographic regions) January – March Ger- Czech Total Total in TWh many Rep. NL UK Other 2010 2009 Private and commercial 12.0 16.7 31.5 20.1 0.8 81.1 52.9 customers Industrial and corporate 13.0 7.6 15.4 1.9 3.4 41.3 33.2 customers Distributors 30.5 3.5 4.1 0.0 0.0 38.
Slide 22: Germany: Clean Dark Spread versus hard coal and CO2 prices
Germany: Clean Dark Spread (CDS) versus hard coal and CO2 prices 160 40 2009 forward 120 30 80 20 40 10 0 0 160 40 2010 forward 120 30 80 20 40 10 0 0 160 40 2011 forward 120 30 80 20 40 10 0 0 160 40 2012 forward 120 30 80 20 40 10 0 0 01.01.2008 01.07.2008 01.01.2009 01.07.2009 01.01.2010 01.07.20
Slide 23: Germany: Clean Spark Spread versus natural gas and CO2 prices
Germany: Clean Spark Spread (CSS) versus natural gas and CO2 prices 50 50 2009 forward 40 40 30 30 20 20 10 10 0 0 50 50 2010 forward 40 40 30 30 20 20 10 10 0 0 50 50 2011 forward 40 40 30 30 20 20 10 10 0 0 50 50 2012 forward 40 40 30 30 20 20 10 10 0 0 01.01.2008 01.07.2008 01.01.2009 01.07.2009
Slide 24: UK: Clean Dark Spread versus hard coal and CO2 prices
UK: Clean Dark Spread (CDS) versus hard coal and CO2 prices 150 50 2009 forward 120 40 90 30 60 20 30 10 0 0 150 50 2010 forward 120 40 90 30 60 20 30 10 0 0 150 50 2011 forward 120 40 90 30 60 20 30 10 0 0 150 50 2012 forward 120 40 90 30 60 20 30 10 0 0 01.01.2008 01.07.2008 01.01.2009 01.07.2009
Slide 25: UK: Clean Spark Spread versus natural gas and CO2 prices
UK: Clean Spark Spread (CSS) versus natural gas and CO2 prices 40 40 2009 forward 30 30 20 20 10 10 0 0 40 40 2010 forward 30 30 20 20 10 10 0 0 40 40 2011 forward 30 30 20 20 10 10 0 0 40 40 2012 forward 30 30 20 20 10 10 0 0 01.01.2008 01.07.2008 01.01.2009 01.07.2009 01.01.2010 01.07.2010 01.01.2
Slide 26: Development of net debt
Development of net debt € billion Capex Dividends Acquisitions/ Cash flows Others Change in disposals/ from including pension, (de)consoli- operating f/x effects nuclear, dations activities DCO mining provisions 30 +0.1 -0.1 +1.2 -1.5 25.8 -0.4 +0.1 25.2 25 0 Net Net debt debt 31.12.2009 31.03.2010
Slide 27: Financial liabilities and assets
Financial liabilities and assets (as of 31.03.2010) Financial liabilities in billion Euros Financial assets in billion Euros Split of securities 25 20 20,1 20 1,7 17,4 0,8 15 0,7 0,8 0,5 18% 15 9,9 10,4 10 1,4 1,1 10 16,8 3,8 3,8 16,2 82% 5 1,5 5 1,5 2,7 0,3 1,0 3,7 0,8 3,5 0,3 0,5 0,6 0,2 0 0 Inter
Slide 28: Gross financial debt currency and interest exposure
Gross financial debt currency and interest exposure1 Others 2% USD 1% Floating 20% £ 35% Fixed 80% € 62% As of March 31, 2010 1 Including cross-currency swaps. RWE AG | Conference Call Q1 2010 | May 12, 2010 28
Slide 29: Capital market debt maturities and sources of financing
Capital market debt maturities and sources of financing Capital market debt maturities1 Strong sources of financing 2,5 20 in € bn Fully committed for liquidity syndicated loan back-up 2,0 16 (€4.0bn up to Oct. 2011) €0.0 bn 1,5 12 1,0 8 Commercial paper $0.1 bn ($5.0 bn) (up to 1 year) 0,5 4 €0.1 b