Slide 1: Q1-Q3 2017 Results Presentation
Q1-Q3 2017 Results Presentation Investor and Analyst Conference Call 14 November 2017 Markus Krebber Gunhild Grieve Chief Financial Officer Head of Investor Relations
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 infor- mation currently available to the management. Forward-looking statements shall not be construed as a pro
Slide 3: Key messages
Key messages ✔ First nine months with significant earnings improvement, in line with expectations – RWE consolidated group: adj. EBITDA €4,175 m (+€354 m); adj. net income €876 m (+€649 m) – RWE stand alone: adj. net income €930 m; distributable cash flow €493 m ✔ Outlook for 2017 confirmed. Expecta
Slide 4: Development of adjusted EBITDA dominated by recovery of earnings at Supply & Trading
Development of adjusted EBITDA dominated by recovery of earnings at Supply & Trading Group RWE stand-alone (€ million) > Lignite & Nuclear: 3,821 Q1-Q3 2016 1,613 Declining generation margins > European Power: -83 Lignite & Nuclear -83 Less positive one-offs than in 2016 (€-113million) -89 Strong co
Slide 5: Lignite & Nuclear – Driven by lower realised generation margins
Lignite & Nuclear – Driven by lower realised generation margins Key financials Q1-Q3 2017 versus Q1-Q3 2016: Q1-Q3 Q1-Q3 Lower realised generation margins € million 2017 2016 change Lower income at Mátra and classification as asset held for sale as of Q2 2017; i.e. earnings contribution Adj. EBITDA
Slide 6: European Power – Lower earnings due to absence of non-recurring items
European Power – Lower earnings due to absence of non-recurring items Key financials Q1-Q3 2017 versus Q1-Q3 2016: Q1-Q3 Q1-Q3 Absence of positive non-recurring items in 2016 € million 2017 2016 change Lower realised hard coal generation margins UK 198 218 -20 Higher realised gas generation margins
Slide 7: Hedging – Improved average hedge prices as a result of our implicit fuel hedge strategy
Hedging – Improved average hedge prices as a result of our implicit fuel hedge strategy Expected positions and hedge status as of 30 September 2017 Outright ~31 ~27 ~27 ~30 (Lignite & ~100 TWh 85 – 90 TWh 80 – 85 TWh 80 – 85 TWh Nuclear) >90% >90% >90% >70% 2017E 2018E 2019E 2020E Change to repo
Slide 8: Significant improvement of fuel spreads since March 2017
Significant improvement of fuel spreads since March 2017 Development of German fuel spreads1 6 5 4 3 €/MWh 2 1 0 -1 -2 -3 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Months to Delivery Cal16 Cal17 Cal18 Cal19 Cal20 1 Fuel spread defined as: Power p
Slide 9: Supply & Trading – Positive earnings development due to a return to normalised trading result
Supply & Trading – Positive earnings development due to a return to normalised trading result Key financials Q1-Q3 2017 versus Q1-Q3 2016: Q1-Q3 Q1-Q3 Normalised trading result after losses in 2016 € million 2017 2016 change Adjustment of long-term gas storage contracts to market prices in Q2 2016 (
Slide 10: Adjusted net income Q1-Q3 2017 reaches €930 million
Adjusted net income Q1-Q3 2017 reaches €930 million Group RWE stand-alone (€ million) > RWE stand-alone adj. EBITDA Adj. EBITDA 1,739 includes operating income from 4,175 Lignite & Nuclear, European Power and Supply & Trading and dividend Adj. depreciation -435 from innogy -1,508 > All effects relat
Slide 11: High Q1-Q3 2017 distributable cash flow due to full amount of innogy dividend in Q2 2017
High Q1-Q3 2017 distributable cash flow due to full amount of innogy dividend in Q2 2017 RWE stand-alone (€ million) > innogy dividend of €683 million fully reflected in Adj. EBITDA Adj. EBITDA 1,739 > Changes in provisions Change in provisions & -652 other non-cash items – Utilisation of CO2 provis
Slide 12: Strong decline of net debt due to positive DiCF, nuclear fuel tax refund and reduction of provisions
Strong decline of net debt due to positive DiCF, nuclear fuel tax refund and reduction of provisions Development of net debt (RWE stand-alone) (€ million) 6,858 -493 5 -261 -2,430 -557 259 3,381 Net debt Distributable Dividend Financial Other Change in Change in Net debt 31 Dec 2016 cash flow RWE AG
Slide 13: RWE stand-alone – Outlook for 2017 confirmed
RWE stand-alone – Outlook for 2017 confirmed FY 2016 FY 2017e €1.6 bn – €1.9 bn Adjusted EBITDA €1.9 bn -€0.9 bn Adj. depreciation > Reduction by ~€0.3 bn from impairments > Reduction in interest accretion to provisions (€0.4 – 0.5 bn) -€1.0 bn Adj. net financial result > Lower losses from sale of s
Slide 14: Appendix
Appendix RWE AG | Q1-Q3 2017 Conference Call | 14 November 2017 14
Slide 15: Reconciliation to Q1-Q3 2017 adjusted net income
Reconciliation to Q1-Q3 2017 adjusted net income (€ million) RWE stand-alone RWE Group Reported Adjustments Adjusted Reported Adjustments Adjusted Adjusted EBITDA 1,739 - 1,739 4,175 - 4,175 Depreciation -435 - -435 -1,508 - -1,508 Adjusted EBIT 1,304 - 1,304 2,667 - 2,667 Non-operating result 1,355
Slide 16: RWE Group: Outlook for 2017 confirmed
RWE Group: Outlook for 2017 confirmed Actuals 2016 2017 forecast1 Change to previous outlook (€ million) Adjusted 5,403 5,400 – 5,700 EBITDA 1,079 Lignite & Nuclear Significantly below 2016 377 European Power Significantly above 2016 -139 Supply & Trading Significantly above 2016 4,203 innogy Modera
Slide 17: Income statement Q1-Q3 2017
Income statement Q1-Q3 2017 (€ million) RWE stand-alone RWE Group Revenue (including natural gas tax/electricity tax) 11,491 32,385 Natural gas tax/electricity tax -101 -1,450 Revenue 11,390 30,935 Other operating result 1,654 678 Cost of materials -9,160 -22,623 Staff costs -1,290 -3,497 Depreciati
Slide 18: Balance sheet as at 30 September 2017
Balance sheet as at 30 September 2017 (€ million) RWE stand-alone RWE Group Assets Intangible assets 1,039 12,250 Property, plant and equipment 6,326 24,170 Investment property 40 54 Investments accounted for using the equity method 624 2,907 Other financial assets1 16,461 1,118 Inventories 1,739 2,
Slide 19: Net debt as at 30 September 2017
Net debt as at 30 September 2017 (€ million) RWE stand-alone RWE Group Cash and cash equivalents 3,879 5,431 Marketable securities 2,747 4,854 Other financial assets 3,697 1,560 t/o financial receivables against innogy 2,431 - Financial assets 10,323 11,845 Bonds, other notes payable, bank debt, com
Slide 20: RWE Group net debt improved due to change in provisions and refund of nuclear fuel tax
RWE Group net debt improved due to change in provisions and refund of nuclear fuel tax Development of net debt (RWE Group) (€ billion) 22.7 +2.9 +1.0 +0.6 -7.0 -0.9 +0.2 19.5 Net debt Cash flows Capex on Dividends Contribution Changes Others Net debt 31 Dec 2016 from opera- property, plant incl. to
Slide 21: Power prices and commodities
Power prices and commodities Base load power prices – Germany, NL (1 year forward) Base load power prices – UK (1 year forward) €/MWh €/MWh 100 45 NL 90 40 80 35 Germany 70 30 UK 25 60 20 50 15 40 Jan'15 Sep'15 Mai'16 Jan'17 Sep'17 Jan'15 Sep'15 Mai'16 Jan'17 Sep'17 Coal prices – API2 Cal-ahead Gas
Slide 22: Clean Dark and Spark Spreads – 2015-2018 forwards for Germany, UK and NL
Clean Dark (CDS) and Spark Spreads (CSS) – 2015 - 2018 forwards for Germany, UK and NL1 Germany UK2 Netherlands Cal15 Cal16 Cal17 Cal18 Cal15 Cal16 Cal17 Cal18 Cal15 Cal16 Cal17 Cal18 €/MWh €/MWh 20 20 Ø16.97 15 15 Ø10.52 Ø11.21 10 10 Ø6.63 Ø5.80 Ø7.13 Ø5.13 Ø9.18 Ø7.02 Ø5.28 Ø4.83 Ø3.77 5 Ø5.59 5 Ø
Slide 23: RWE Investor Relations – contacts
RWE Investor Relations – contacts Important Links Contacts for Institutional Investors & Financial Analysts Annual and Interim Reports http://www.rwe.com/ir/reports/ Gunhild Grieve Lenka Zikmundova Head of Investor Relations Tel.: +49 201 5179-3116 Investor and Analyst Conferences Tel. +49 201 5179-
Slide 24: POWERING. RELIABLE. FUTURE.
POWERING. RELIABLE. FUTURE. ED” AK =