Uniper Se · XETR:UN0

Uniper — FY2017 Earnings Presentation

45 slides from Uniper's earnings presentation, March 2018

  1. Slide 1: Capital Markets Story

    Capital Markets Story Full Year Results 2017 and Outlook March / April 2018

  2. Slide 2: Capital Markets Story agenda

    Capital Markets Story 1. Uniper Story in a Nutshell 2. Highlights 2017 and Outlook 2018 3. Financial Results in Detail 4. Rating and Funding 5. Appendix

  3. Slide 3: Focus on our shareholder from day one on

    Focus on our shareholder from day one on  Good financial performance 2017 giving upside for higher dividend proposal Getting the Proven commitment house in  Action Plan executed balancing to shareholders order attractive cash returns and balance since spin off sheet stability  Strong share perfor

  4. Slide 4: Strategic focus

    Strategic focus  Underutilized European portfolio to benefit from rising prices European Generation  Capex focussed on secured capacities (regulatory, contractually)  Gas storage beneficiary from decarbonization and gas to power Global Commodities  Development of further globally diversified por

  5. Slide 5: Strategy implementation now on the agenda

    Strategy implementation now on the agenda Grow non-wholesale and benefit from Examples merchant upside as key strategic angle Modernization initiative in Russia – framework (development of Group EBITDA mix over time) conditions  Modernization of 4 GW p.a. with COD starting from 2022  Supply agreem

  6. Slide 6: Uniper equity story – Strongly growing base dividend with further upside

    Uniper equity story – Strongly growing base dividend with further upside  Very swift delivery of Action Plan Track record today Accelerated delivery  Strong financial and share performance since inception Substantial  Earnings mix improving significantly towards 2020 Prospects until dividend  Cl

  7. Slide 7: Financial framework sets key boundaries for future strategic development

    Financial framework sets key boundaries for future strategic development Financial framework Dividend Financial framework setting clear boundaries aspiration • Debt level: comfortably below 2.0x economic net debt / EBITDA • Target rating: BBB (flat) • Dividend payout ratio: min. 75% to 100% of Free

  8. Slide 8: Growing base dividend with optionality

    Growing base dividend with optionality Dividend growth path until 2020 Uniper’s ambition Dividend policy … €m  Ambition to pay a sustainable and 25% CAGR rising dividend 800  Commitment to current payout policy of min. 75% to 100% on free cash from operations 600 … linked with investment plans  A

  9. Slide 9: Capital Markets Story agenda

    Capital Markets Story 1. Uniper Story in a Nutshell 2. Highlights 2017 and Outlook 2018 3. Financial Results in Detail 4. Rating and Funding 5. Appendix

  10. Slide 10: Highlights – Action Plan completed, sound financials, setting sails with new strategy

    Highlights – Action Plan completed, sound financials, setting sails with new strategy  Cost cutting with delivery slightly ahead of plan Action Plan executed  Leverage target achieved FY2017  Key rating KPIs achieved In delivery  EBIT target achieved mode Dividend proposal  Strongly rising free

  11. Slide 11: Balance sheet in good shape – Rating upgrade pending

    Balance sheet in good shape – Rating upgrade pending Economic net debt to EBITDA multiple Key highlights Deleveraging achieved  Target level of Economic net debt to EBITDA 2,7 of considerably below 2.0x achieved  No further disposals needed – only for cash accretive capital rotation 2,0  Delivery

  12. Slide 12: Operational efficiency significantly improved

    Operational efficiency significantly improved Cost reduction Maintenance capex €m 753 Achieved in 2016 400 392 €0.4bn Achieved in 2017 To be achieved by 2018 1 2015A 2016A 2017A 2018E Fully on track Optimisation continues  All major planned projects implemented  Clear ambition to stay below 400 mi

  13. Slide 13: Large asset projects progressing

    Large asset projects progressing Berezovskaya III lignite plant Datteln IV coal plant Nord Stream II pipeline project Repair measures on track Plant in ramp-up mode Project still on track  Project progressing in line with time  Investments to finalize project widely  First national permits receiv

  14. Slide 14: Energy policy – EU ETS reform almost finalized, our bullish view stays intact

    Energy policy – EU ETS reform almost finalized, our bullish view stays in tact Europe-wide coal exit EU ETS reform on finishing Security of supply: capacity discussion straight market scheme UK €/ton £/kW GW Markets with 10 Price Capacity Uniper (r.h.s.) 24,0 8,0 coal exit deadlines 18,0 6,0 8 12,0

  15. Slide 15: Capital Markets Story agenda

    Capital Markets Story 1. Uniper Story in a Nutshell 2. Highlights 2017 and Outlook 2018 3. Financial Results in Detail 4. Rating and Funding 5. Appendix

  16. Slide 16: FY 2017 – Key financials

    FY 2017 – Key financials Adj. EBIT(DA) Operating cash flow, adj. FFO Economic net debt €bn €bn €bn 2.0x 1.4x 2.1 1.7 2,2 4,2 1,4 1,4 2,4 1,1 0,5 0,8 FY 2016 FY 2017 OCF OCF Adj. FFO Adj. FFO YE 2016 YE 2017 2016 2017 2016 2017 EBIT EBITDA Adj. EBIT(DA) down Normalization of operating Economic net de

  17. Slide 17: FY 2017 – Earnings reduction driven by normalization in gas business

    FY 2017 – Earnings reduction driven by normalization in gas business Reconciliation Adj. EBIT 2016 to Adj. EBIT 2017 €bn Adj. EBIT 2016 1,4 Gas business - 0,9 Berezovskaya - omission boiler write-off +0,2 Berezovskaya - higher insurance payments +0,2 Cost savings +0,1 Lower nuclear/hydro taxes and o

  18. Slide 18: FY 2017 – Adj. EBIT(DA) to OCF conversion back to more normalized levels

    FY 2017 – Adj. EBIT(DA) to OCF conversion back to more normalized levels Reconciliation Adj. EBIT 2017 to operating cash flow 2017 €m 447 627 508 -16 -1 - 332 - 962 1.741 1.718 1.385 1.114 Adj. EBIT Depreci- Adj. EBITDA Non-cash Provision Changes in Payments OCFbIT Interest Tax OCF FY 2017 ation and

  19. Slide 19: FY 2017 – FFO to dividend conversion substantiates dividend increase

    FY 2017 – FFO to dividend conversion substantiates dividend increase Reconciliation funds from operations (FFO) to free cash from operations (FCfO) €m -35 -65 -100 953 753 -392 75% of FCfO 361 to be distributed to shareholder 271 (+8% vs. guidance) FFO Dividend to Net Pension Adj. FFO Maintenance FC

  20. Slide 20: FY 2017 – Economic net debt significantly improved thanks to Yuzhno disposal

    FY 2017 – Economic net debt significantly improved thanks to Yuzhno disposal Economic net debt > -40% €bn 4.2 1.0 0.8 0.5 2.4 -1,8 0,8 1,0 -0,1 0.2 2,4 0,7 -1,4 0,8 Economic net Divestments OCF Capex Pension Dividend paid Other Economic net debt YE 2016 debt YE 2017 AROs 1 Pension Net financial posi

  21. Slide 21: FY 2018 Outlook – Earnings like for like unchanged

    FY 2018 Outlook – Earnings like for like unchanged Reconciliation from Adj. EBIT 2017 to Adj. EBIT 2018 €bn Adj. EBIT 2017 1,1 Yuzhno-Russkoye disposal Berezovskaya - lapse of insurance payment Decline in achieved outright prices Taxes in Sweden UK capacity market Cost cutting Other Adj. EBIT 2018 0

  22. Slide 22: FY 2018 Outlook – Further dividend growth ahead

    FY 2018 Outlook – Further dividend growth ahead Adj. EBIT Dividend Key highlights TBU €bn €bn European Generation 1.1 0,31 0.27  Increasing contribution from UK and French Range capacity payments 0.8  Final reduction of Swedish nuclear capacity 1.1 tax and further reduction of hydro property 0.9 t

  23. Slide 23: Capital Markets Story agenda

    Capital Markets Story 1. Uniper Story in a Nutshell 2. Highlights 2017 and Outlook 2018 3. Financial Results in Detail 4. Rating and Funding 5. Appendix

  24. Slide 24: S&P reaffirmed Uniper's BBB- rating (positive)

    S&P reaffirmed Uniper’s BBB- rating (positive) Scope with initial rating of BBB+ in June 2017 S&P (2018, Jan. 18) reaffirms BBB- rating with positive outlook Scope Rating BBB+ stable 2018 BBB- rating summary S&P’s risk profile rationale  Scope published initial Uniper  Rating affirmed on stand-alo

  25. Slide 25: Reduced debt and comfortable liquidity post disposal of Yuzhno-Russkoye

    Reduced debt and comfortable liquidity post disposal of Yuzhno-Russkoye Economic net debt (€ bn) Key highlights Well-balanced maturity profile €4.2bn (FY16) €2.4bn (FY17)  Term loan used to refinance liabilities towards E.ON AROs1 1.0 AROs1 1.0 post spin-off has been fully repaid by February 2017 P

  26. Slide 26: Capital Markets Story agenda

    Capital Markets Story 1. Uniper Story in a Nutshell 2. Highlights 2017 and Outlook 2018 3. Financial Results in Detail 4. Rating and Funding 5. Appendix

  27. Slide 27: Markets – Power prices and commodities

    Markets – Power prices and commodities Germany – Baseload power 2019 Germany – CDS, CSS 2019 Gas Europe – summer/winter spread €/MWh $/ton €/MWh €/MWh 38 95 15 2,0 10 33 75 5 1,5 28 0 55 -5 1,0 23 -10 18 35 -15 0,5 Jan 16 Jul 16 Jan 17 Jul 17 Jan 18 Jan 16 Jul 16 Jan 17 Jul 17 Jan 18 Jan 16 Jul 16 J

  28. Slide 28: Uniper – Outright power hedging in Germany and Nordic

    Uniper – Outright power hedging in Germany and Nordic Outright position – baseload power price >80% >80% >75% >15% €/MWh >90% >85% >65% >35% 35 30 25 20 Status: December 2017 15 2017 2018 2019 2020 Achieved price Germany Hedge ratio Germany Achieved price Nordic Hedge ratio Nordic Uniper SE, Capital

  29. Slide 29: Uniper Group – EBIT(DA) with robust performance

    Uniper Group – EBIT(DA) with robust performance Adj. EBIT development by segment in FY 2017 Highlights €m European Generation 211  (+) Reduced hydro property tax and 510 nuclear capacity tax 17  (+) Lapse of restructuring one-off 1.362  (+) Lower depreciation 1.114 -986  (-) Lower outright price

  30. Slide 30: Segment European Generation – Solid performance across all activities

    Segment European Generation – Solid performance across all activities Adj. EBIT development by sub-segment in FY 2017 Main effects €m Hydro 61 38  (+) Lapse of 2016 restructuring one-off -17 (+) Reduced hydro property tax 130 (+) positive volume effect in Sweden 337 Nuclear 126  (+) Ringhals 2 bac

  31. Slide 31: Segment Global Commodities – Normalization in midstream gas business

    Segment Global Commodities – Normalization in midstream gas business Adj. EBIT development by sub-segment in FY 2017 Main effects TBU €m Gas  (-) Lapse of 2016 one-offs  Gazprom provision release  Extraordinary optimization gains 1.327 20 57 not repeated - 914 - 149 341 Yuzhno Russkoye (YR)  (+)

  32. Slide 32: Segment International Power – Significant one-off effects and strong underlying earnings

    Segment International Power – Significant one-off effects and strong underlying earnings Adj. EBIT development by sub-segment in FY 2017 Main effects TBU €m Russia  (+) Significant one-off effects: 4 505  Lapse of 2016 write-off on Berezovskaya III boiler Insurance proceeds received 616 and booked

  33. Slide 33: Uniper Group – Adjusted EBIT(DA) by segment

    Uniper Group – Adjusted EBIT(DA) by segment Adj. EBITDA €m FY 2017 FY 2016 % European Generation 780 654 19 Global Commodities 420 1,456 -71 International Power 714 201 255 Admin / Consolidation -173 -189 -8 Total 1,741 2,122 -18 Adj. EBIT €m FY 2017 FY 2016 % European Generation 337 126 168 Global

  34. Slide 34: Uniper Group – Adjusted EBIT(DA) by sub-segment

    Uniper Group – Adjusted EBIT(DA) by sub-segment Adj. EBITDA and EBIT FY 2017 FY 2016 FY 2017 FY 2016 €m Adj. EBITDA Adj. EBITDA Adj. EBIT Adj. EBIT European Generation* Hydro 381 255 323 193 Nuclear 85 42 22 -16 Fossil 360 385 40 -22 Other/ Cons. -45 -28 -48 -30 Subtotal 780 654 337 126 Global Commo

  35. Slide 35: Uniper Group – Net income distorted by Yuzhno-Russkoye disposal

    1,362 Uniper Group – Net income distorted by Yuzhno-Russkoye disposal Reconciliation Adj. EBITDA 2017 to net income 2017 €m - 627 1.741 88 - 360 1.114 - 400 -9 -656 -890 -199 Adj. D&A Adj. Economic MTM Net Other OCI 1 Taxes on Net EBITDA EBIT interest, Derivatives impairments 1 non- Income 2 taxes,

  36. Slide 36: Uniper Group – Key P&L items at a glance

    Uniper Group – Key P&L items at a glance Key P&L items €m FY 2017 FY 2016 Sales 72,238 67,285 Adjusted EBITDA 1,741 2,122 Economic depreciation and amortization / reversals -627 -760 Adjusted EBIT 1,114 1,362 Non-operating adjustments -1,226 -5,325 EBIT -112 -3,963 Net interest income / expense -18

  37. Slide 37: Uniper Group – Details on non-operating adjustments

    Uniper Group – Details on non-operating adjustments Non-operating adjustments €m FY 2017 FY 2016 Net book gains / losses -890 522 Fair value measurement of derivative financial instruments 88 -1,636 Restructuring / cost management expenses -18 -344 Non-operating impairment charges / reversals -400 -

  38. Slide 38: Uniper Group – Consolidated balance sheet (1/2)

    Uniper Group – Consolidated balance sheet (1/2) Balance sheet of the Uniper Group – assets €m 31 Dec 2017 31 Dec 2016 Goodwill 1,890 2,701 Intangible assets 819 2,121 Property, plant and equipment 11,496 11,700 Companies accounted for under the equity method 448 827 Other financial assets 814 728 Eq

  39. Slide 39: Uniper Group – Consolidated balance sheet (2/2)

    Uniper Group – Consolidated balance sheet (2/2) Balance sheet of the Uniper Group – equity and liabilities €m 31 Dec 2017 31 Dec 2016 Capital stock 622 622 Additional paid-in capital 10,825 10,825 Retained earnings 3,399 4,156 Accumulated other comprehensive income -2,699 -3,382 Equity attributable

  40. Slide 40: Uniper Group – Net financial position

    Uniper Group – Net financial position Net financial position of the Uniper Group €m 31 Dec 2017 31 Dec 2016 Liquid funds 1,027 341 Non-current securities 104 160 Financial liabilities -1,923 -2,870 Net financial position -792 -2,369 Provisions for pensions and similar obligations -676 -785 Asset ret

  41. Slide 41: Uniper Group – Consolidated statement of cash flows

    Uniper Group – Consolidated statement of cash flows Statement of cash flows of the Uniper Group €m FY 2017 FY 2016 Net income / loss -538 -3,234 Depreciation, amortization and impairment of intangibles / property, plant, equipment 1,198 4,135 Changes in provisions -608 11 Changes in deferred taxes 3

  42. Slide 42: IFRS 16 leases – Higher debt but also higher EBITDA

    IFRS 16 leases – Higher debt but also higher EBITDA; nothing new for rating agencies Balance sheet impact: increased liabilities Main effects Old Treatment New Treatment Additional liabilities on balance sheet Finance Operating  In 2018, IFRS 16 adds operating lease on All Leases Leases Leases bala

  43. Slide 43: Uniper – Contact your Investor Relations team

    Uniper – Contact your Investor Relations team Uniper SE Udo Giegerich Marc Koebernick Investor Relations Executive Vice President Head of Investor Relations (SVP) E.ON-Platz 1 Group Finance & Investor Relations +49 211 4579 4489 40479 Duesseldorf udo.giegerich@uniper.energy marc.koebernick@uniper.en

  44. Slide 44: Financial calendar & further information

    Financial calendar & further information Financial calendar 08 May 2018 Quarterly Statement January – March 2018 06 June 2018 AGM (Essen, Grugahalle) 07 August 2018 Interim Report January – June 2018 13 November 2018 Quarterly Statement January – September 2018 Further information https://ir.uniper.

  45. Slide 45: Disclaimer

    Disclaimer This document and the presentation to which it relates contains information relating to Uniper SE, ("Uniper" or the "Company") that must not be relied upon for any purpose and may not be redistributed, reproduced, published, or passed on to any other person or used in whole or in part for

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