Rwe Ag · XETR:RWE
Rwe — Debt Investor Presentation (July 2024)
39 slides from Rwe's debt investor presentation, July 2024
Slide 1: Credit Investor Presentation
Credit Investor Presentation July 2024 Credit Presentation Page 1
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: Contents
Contents 1. Company overview 2. Energy transition 3. Credit and financial strength 4. Funding strategy July 2024 Credit Presentation Page 3
Slide 4: RWE is a global leader in green energy
RWE is a global leader in green energy Offshore Onshore Wind Flexible Supply and Wind and Solar Generation Trading • Global offshore • Onshore, solar and • Hydro, biomass, and • Trading/origination activities storage activities in gas plants • Gas & LNG • Americas • Germany, UK, NL • Commodity solut
Slide 5: We are growing profitably on the back of favourable market fundamentals
We are growing profitably on the back of favourable market fundaments and excellent capabilities Favourable market fundamentals Financial headroom Strong positioning in our core markets Strong balance sheet and high-cash with significant investment needs in generating business portfolio the energy s
Slide 6: RWE is accelerating its investments in clean technologies
RWE is accelerating its investments in clean technologies Net cash investments Net capacity additions 2024 – 2030 2024 – 2030 GW Installed net capacity target 2030 EUR bn GW July 2024 Credit Presentation Page 6
Slide 7: RWE will operate an even more diversified portfolio by 2030
RWE will operate an even more diversified portfolio by 2030 Diversified portfolio across technologies…. ….and regions Current1 2030 Current1 2030 5% 9% 15% 3% 24% 25% 30% 26% 30% 25% 52% 35 GW >65 GW 20% 35 GW >65 GW 10% 27% 25% 12% 20% 2% 15% 25% Offshore wind Solar Flexible generation & hydrogen G
Slide 8: RWE will rapidly decarbonize its portfolio
RWE will rapidly decarbonize its portfolio Net installed capacity GW, pro rata • Green portfolio growth >65 accelerated – around 60 90% share of renewable and flexible generation 47 capacity will be achieved in 2027 39 ~90% 100% • Coal to decline rapidly – 77% driven by closures and 73% lower utilis
Slide 9: Contents
Contents 1. Company overview 2. Energy transition 3. Credit and financial strength 4. Funding strategy July 2024 Credit Presentation Page 9
Slide 10: We are committed to 1.5°C SBTi emission reduction pathway
We are committed to 1.5°C SBTi emission reduction pathway Scope 1 & 2 emission targets kg CO2 per kWh • We reduced our CO2 emissions by 50% in the past decade • We are committed to reducing our 0.6 relative Scope 1 & 2 emissions by 70% by 2030 • We are committed to reducing our ~70% reduction Scope
Slide 11: Remarkable ESG ratings improvement in the last 3 years
Remarkable ESG ratings improvement in the last 3 years ESG Rating ESG Risk Rating ESG Corporate Rating Climate Change Rating AAA to CCC 0 to 100 (0 = top mark) A+ to D- A to D 2020 Latest view 2020 Latest view 2020 Latest view 2020 Latest view Average Average High Medium Prime Management Leadership
Slide 12: Highlights of our renewable projects
Highlights of TetraSpar Agri-PV our renewable projects ~ 4 MW F&E Floating wind Solar power and pilot plant agriculture Megabattery Sofia Limondale Hickory Park Selinus 117+ 1,4 GW 249 MWac 196 MWac 117 MW 25 MW RWE’s biggest offshore 872.000 modules 30 year Power Virtual coupling with Blade lift te
Slide 13: Contents
Contents 1. Company overview 2. Energy transition 3. Credit and financial strength 4. Funding strategy July 2024 Credit Presentation Page 13
Slide 14: Key credit strengths
Key credit strengths • Diversified generation mix with growing renewable platform Integrated Business Model • Complementary flexible generation platform to benefit from opportunities offered by the with Diversified Generation Mix Energy Transition Highly Resilient Cash Flow Profile • c.70% secured/c
Slide 15: High share of earnings from secured or regulated income streams in wind and solar
High share of earnings from secured or regulated income streams in wind and solar business Gross margin split 2023 - 2025 Wind/solar >14 years 30% 25% Merchant PPAs/Tax Credit Weighted average remaining support tenor1 Wind/Solar • 70% secured share also targeted in future 25% 20% • 30% Merchant marg
Slide 16: Our recent capacity additions significantly increase secured revenues
Our recent capacity additions significantly increase secured revenues Wind/Solar 2023 capacity additions Wind/Solar projects currently under construction in GW in GW Price exposed Price exposed Thor <5% <5% 15% Thor with 1.1 GW of capacity 4.2 GW 6.8 GW PPAs to be signed ahead of COD >95% >80% Secur
Slide 17: Our Growing Green plan is fully financed
Our Growing Green plan is fully financed Funding composition 2024 - 2030 EUR bn 62 62 12 Financial headroom 55 >80% Net cash investments of outflows are financed 50 Adj. operating by adj. operating cash cash flow flow 7 Dividend Sources of funds Uses of funds July 2024 Credit Presentation Page 17
Slide 18: We are committed to a strong investment grade rating
We are committed to a strong investment grade rating Strong investment grade rating Current rating: Today Post 2025 Long-term debt Senior debt Baa2 BBB+ ≤3x ≤3.5x Hybrid bonds Ba1 BBB- Short-term debt P-2 F1 Max. leverage factor of Max. leverage factor of Outlook 31/05/2023 stable stable net debt/ad
Slide 19: Net debt increases due to CEB acquisition, and the planned execution of our green growth programme
Net debt increases due to CEB acquisition, and the planned execution of our green growth programme Development of net debt in FY 2023 in EUR bn (+ net debt/- net assets) 6.9 6.6 4.4 -0.4 -1.6 2019 2020 2021 2022 2023 Main Drivers of Net Debt Development in FY 2023 Adj. Operating Cashflow Acquisition
Slide 20: Key Messages – Delivering growth and value
Key Messages – Delivering growth and value Green Stable & Strict Robust liquidity investments sustainable balance sheet management 2024 – 2030 earnings management €55bn 70% secured / Baa2/BBB+ >€20bn net cash investments contracted cash-flow + Commitment to strong bank facilities strong earnings out
Slide 21: Contents
Contents 1. Company overview 2. Energy transition 3. Credit and financial strength 4. Funding strategy July 2024 Credit Presentation Page 21
Slide 22: We are a frequent issuer of green bonds
We are a frequent issuer of green bonds EU Taxonomy Type • Funding strategy serves RWE’s transition to a green player aligned Green Format • Conventional bonds only on an exceptional basis Volumes • Driven by financing requirements and market conditions Avg. €3.0 – 3.5 bn p.a. Tenors • Aiming to ach
Slide 23: Issuances and maturities of RWE’s bonds
Issuances and maturities of RWE’s bonds RWE’s bond maturity profile with Green Bonds RWE’s historic issuances as preferred financing tool for future growth Green Senior Bonds Hybrid Bonds at First Call Date Senior Bond 2021 2022 2023 2024YTD USD Green Bond Green senior bonds €1.85bn €2.0bn €1.0bn €0
Slide 24: Various instruments secure our liquidity requirements and our ability to invest sustainably
Various instruments secure our liquidity requirements and our ability to invest sustainably 31 Dec 2023 Cash and Marketable securities €15bn Bilateral Bank Facilities including guarantee facilities €14bn Sustainability Linked Revolving Credit Facility €10bn committed by international bank consortium
Slide 25: RWE Green Financing Framework 2023
RWE Green Financing Framework 2023 Alignment• with the ICMA RWE’s GreenGreen BondFramework Financing Principles 2021 1 and EU Taxonomy LMA Green Loan Principles is aligned 2023 with SDG 7.2: aligned ’increase substantially the share Fully alignedofwith the EU Taxonomy renewable energy in the global
Slide 26: Annex
Annex July 2024 Credit Presentation Page 26
Slide 27: Strong earnings development across all core segments in 2023; exceeding full year group guidance
Strong earnings development across all core segments in 2023; exceeding full year group guidance Core adj. EBITDA in EUR m +2,114 • Offshore Wind earnings up on the back of 7,673 better wind conditions, capacity additions and higher realised power prices 1,664 • Onshore Wind/Solar increased due to 5
Slide 28: Net cash investments more than doubled in 2023 with the acquisition of Con Edison Clean Energy Business
Net cash investments more than doubled in 2023 with the acquisition of Con Edison Clean Energy Business Net cash investments in EUR bn • Net cash investments more than doubled >2.5x between 2022 and 2023 11.4 • CEB acquisition accounted for >55% of overall net cash investments CEB 6.3 acquisition •
Slide 29: Green generation portfolio increased by 6.3 GW in 2023
Green generation portfolio increased by 6.3 GW in 2023 Development of our green generation portfolio GW pro rata +8.1 43.6 1.1 0.2 3.1 1.2 35.5 2.5 6.3 29.2 31 Dec 2022 Capacity 31 Dec 2023 Offshore Onshore Solar Batteries Flexible Total additions Wind Wind Generation & H2 Capacity in operation Proj
Slide 30: Financial highlights in FY 2023
Financial highlights in FY 2023 Strong earnings development across all core segments in 2023, full year guidance for 2023 exceeded High cash flow generation of operating portfolio Earnings guidance 2024 confirmed at lower end of guidance range despite >30% decline in European power prices Credit rat
Slide 31: Overview guidance FY2023, adjustments to new reporting structure and guidance for 2024
Overview guidance FY2023, adjustments to new reporting structure and guidance for 2024 € million 2023 Adjustments 2023 PF1 2024 Offshore Wind 1,400 – 1,800 1,400 – 1,800 1,450 – 1,850 Key changes 2023 vs. 2024 and adjustments Onshore Wind/Solar 1,100 – 1,500 1,100 – 1,500 1,500 – 1,900 • Adj. EBITDA
Slide 32: Guidance 2024 and financial preview 2027/2030
Guidance 2024 and financial preview 2027/2030 € million 2024 2027 2030 Offshore Wind 1,450 – 1,850 1,850 – 2,350 3,150 – 3,750 Onshore Wind/Solar 1,500 – 1,900 2,500 – 3,000 3,350 – 3,950 Flexible Generation1 1,800 – 2,200 1,500 – 2,000 1,800 – 2,300 Supply & Trading 100 – 500 100 – 500 100 – 500 Ot
Slide 33: An overview of economic net debt
An overview of economic net debt Net assets/net debt in EUR m 31 Dec 2023 31 Dec 2022 +/- Net debt definition Cash and cash equivalents 6,917 6,988 -71 • Net debt does not contain Marketable securities 8,114 13,730 -5,616 mining provisions, which Other financial assets 2,529 8,543 -6,014 essentially
Slide 34: Net debt increases due to CEB acquisition, green growth and timing effects from hedging and trading activities
Net debt increases due to CEB acquisition, green growth and timing effects from hedging and trading activities Development of net debt in FY 2023 in EUR bn (+ net debt/- net assets) 6.6 0.7 2.5 0.9 5.1 -1.6 -7.3 6.3 Net debt Adj. operating Acquisition Net cash Dividends Other changes in Changes in N
Slide 35: RWE Green Financing Framework 2023 Use of Proceeds
RWE Green Financing Framework 2023 Use of Proceeds Green Bond Criteria EU Taxonomy UN SDG Principles category Climate change mitigation Expenditures relating to the construction, 4.1. Electricity generation using Renewable Energy development, acquisition, maintenance and solar photovoltaic technolog
Slide 36: Stepping up our ambition in sustainability – Environmental
Stepping up our ambition in sustainability – Environmental Our ambitions Our progress Climate Change • Since 2012, more than 50% of GHG emissions reduced We will be Net Zero by 2040 • New climate targets set for 2030, in line with global 1.5°C scenario, SBTi verification ongoing Our ambition is to r
Slide 37: Stepping up our ambition in sustainability – Social
Stepping up our ambition in sustainability – Social Our ambitions Our progress Social Responsibility • Collective bargaining agreement for coal phase out in 2030 in place to allow for just transition We make a positive contribution to the communities • Active engagement with local communities, e.g.,
Slide 38: Stepping up our ambition in sustainability – Governance
Stepping up our ambition in sustainability – Governance Our ambitions Our progress Sustainable Investment • Regular reporting on taxonomy KPIs, sustainable investments of 89% in 2023 Our growth is sustainable • Major Board decisions requiring additional sustainability assessment >90% of our investme
Slide 39: Your contacts at RWE
Your contacts at RWE Important Links Financial Calendar • Annual and interim reports & statements • 14 Aug 2024 Interim statement on the first half of 2024 • Bonds at a glance • 13 Nov 2024 Interim statement on the first three quarter of 2024 • Credit ratings • 20 Mar 2025 Annual report for fiscal 2