Rwe Ag · XETR:RWE
Rwe — Non-Deal Roadshow (January 2015)
34 slides from Rwe's roadshow presentation, Jan 19, 2015
Slide 1: Focus on financial strength
Focus on financial strength (as of January 2015)
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 – an attractive value proposition
RWE – an attractive value proposition Attractive portfolio Stable financials > Leading market position and > Progress in strengthening balance regionally focused strategy sheet > Pure utility play – exit of upstream > Streamlined and disciplined activities investment approach > Balanced asset portfo
Slide 4: Main messages
Main messages Financial performance in the first nine months 2014 in line with expectations: EBITDA -22%, operating result -31%; recurrent net income -60% Group outlook for 2014 confirmed RWE Dea: successful divestment of RWE Dea for an EV of €5.0bn; closing of the transaction expected for the begin
Slide 5: From commodity driven earnings development to attractive regulated profile
From commodity driven earnings development to attractive regulated profile RWE develops towards an attractive stable downstream business profile with additional focus on renewables and upside potential from conventional power generation Operating result in € bn 6.4 Upstream Gas & Oil 5.9 Renewables
Slide 6: RWE's mid-term business profile drivers
RWE’s mid-term business profile drivers GENERATION TRADING DISTRIBUTION SUPPLY > Selective growth in > Ongoing focus on value > GER: Stable regulatory > Focus on efficiency renewable energy extraction in commercial environment for the next enhancements asset optimisation regulatory period > Increasi
Slide 7: Conventional Power Generation: mark-to-market earnings perspective
Conventional Power Generation: mark-to-market earnings perspective € bn 3.5 3.3 3.0 2.5 Mark-to-market (m-t-m)1 2.0 1.5 1.4 1.0 OR m-t-m 0.5 before efficiencies 0.0 2012 2013 -0.5 Efficiencies Operating result (OR) Depreciation EBITDA 2012-2016 1 Mark-to-market as of November 2013 at market prices o
Slide 8: Overview of capacity measures
Overview of capacity measures Measure Plant MW1 Fuel Location Date Decom- Amer 8 610 Hard coal NL Q1-2016 missioning Goldenbergwerk 110 Lignite DE Q3-2015 Westfalen C 285 Hard coal DE Q1-2016 Gersteinwerk K2 610 Hard coal DE Q1-2017 Long-term Claus C 1,300 Gas NL Q3-2014 mothballing2 Moerdijk 2 430
Slide 9: Impact of our capacity measures on our total conventional generation portfolio
Impact of our capacity measures on our total conventional generation portfolio Net decrease in RWE Generation’s portfolio1 to substantially materialise after 2015 43,716 MW 2,449 MW 3,224 MW 894 110 MW 41,560 MW MW 41,256 MW 5,698 1,892 764 5,698 MW 40,666 MW MW Decom- MW MW 1,140 1,554 missioning M
Slide 10: RWE Innogy will provide mid-term earnings growth despite reduced capex volume
RWE Innogy will provide mid-term earnings growth despite reduced capex volume Development of operating result by 2016 First generation: Commissioning: Commissioning of Gwynt y Môr (576 MW), NSO (295 MW), onshore projects1 Commissioning: Gwynt y Môr (fully), Düshorner Heide (26 MW), Onshore projects1
Slide 11: More customers will produce self-generated power and manage their consumption
More customers will produce self-generated power and will be enabled to manage their consumption Changing energy landscape Trends in retail markets Household » Increase in decentral energy customer production from household customers Virtual » Higher incentivisation of power plants “prosumers” to ma
Slide 12: RWE well on track to reach target of a positive cash balance
RWE well on track to reach target of a positive cash balance Cash flows from operating activities to cover investments and dividends by 2015 € bn -3.3 -3.8 -2.7 -0.4 >0 Cash balance 9.3 8.8 7.1 6.2 5.8 5.5 5.5 4.4 ≤ 2010 2011 2012 2013 2014e 2015e Capex in property, plant & equipment and financial a
Slide 13: Efficiency improvements 1 year ahead of plan – At least €1.5 bn net benefit
Efficiency enhancements Efficiency improvements 1 year ahead of plan – At least €1.5 bn net benefit to be achieved by 2016 Net benefit to operating result In € million > Total programme consists of measures amounting to €2 bn (= gross effect) > Efficiency improvements to be fully earnings enhancing
Slide 14: Efficiency measures of €2 bn implemented by the end of 2016
Efficiency enhancements Efficiency measures of €2 bn implemented by the end of 2016 Net benefit by division Conventional Power Generation ~ 10% Holding, other divisions ~ 50% > ~40% reduction of overhead costs and cross divisional Conventional > Reduction of O&M costs effects Power Generation > Impr
Slide 15: Focus on total controllable costs (TCC)
Efficiency enhancements Focus on total controllable costs (TCC) 60% of the efficiency programme will be achieved through a reduction of TCC € 10.8 bn € 10.1 bn ~€ 9.0 bn 0.5 0.2 0.4 0.7 5.5 4.9 4.3 5.3 5.2 4.7 2012 2013 2016e Personnel costs Other TCC Operational cost improvement Portfolio and other
Slide 16: Capex programme reduced to maintenance level
Capex reduction Capex programme reduced to maintenance level € bn > Approx. €8 bn capex programme ~1.0 Renewable projects for 2014 – 2016 excluding RWE Dea: ~ 0.9 Completing − €1.9 bn for major projects conventional power plants ~5.6 day-to-day of which c. ~3.1 for − €5.6 bn day-to-day incl. grids ~
Slide 17: Disposals focus on RWE Dea and Urenco
Disposals Disposals focus on RWE Dea and Urenco > Successful divestment of RWE Dea for an EV of €5.0bn to RWE Dea LetterOne Group > Closing expected for the beginning of March at the latest > Strategic decision, not for deleveraging purpose > Non core asset Urenco > Reviewing potential exit routes >
Slide 18: Outlook for 2014
Outlook for 2014 In € million EBITDA 8,762 7,904 6,400 – 6,800 Operating 5,881 result 5,369 3,900 – 4,300 Recurrent 2,314 2,314 1,200 – 1,400 net income Dividend €1.00/share Payout ratio of 40% – 50% 2013 2013 2014e reported RWE Dea DCO1 RWE Dea DCO1 1 Based on the sale agreement, RWE Dea will be so
Slide 19: Back-up Charts
Back-up Charts 18
Slide 20: Major earning drivers post 2013
Major earning drivers post 2013 Further decline in realised electricity Efficiency enhancement programme margins (realised outright power (2014 to 2016: at least € 500 million) price 2013: € 51/MWh) Earnings growth in renewables Disposal of RWE Dea Performance increase in our Disposal of NET4GAS in
Slide 21: 2014 divisional outlook for the operating result unchanged except for Supply UK
2014 divisional outlook for the operating result unchanged except for Supply UK € million 20131 2014 forecast versus 2013 Conventional Power Generation 1,384 Significantly below 2013 Supply/Distribution Networks Germany 1,626 Moderately above 2013 Supply Netherlands/Belgium 278 Significantly below 2
Slide 22: RWE's forward hedging of conventional electricity production
RWE’s forward hedging of conventional electricity production (German, Dutch and UK portfolio) As of 30 September 2014 >30% >10% >40% >10% >50% >20% >50% >30% >60% >40% >70% >50% >80% >60% >80% >80% >90% >90% 2014 forward 31 Dec. 2011 31 March 2012 30 June 2012 30 Sep. 2012 31 Dec. 2012 31 March 2013
Slide 23: RWE has secured contracts for 8 GW in the first UK capacity auction
RWE has secured contracts for 8 GW in the first UK capacity auction Plant MW1 Plant type Aberthaw 1,486 Coal/OCGT Didcot B 1,364 CCGT Great Yarmouth 361 CCGT Little Barford 683 CCGT Pembroke 2,090 CCGT Staythorpe 1,633 CCGT Miscellaneous smaller units 394 CHP/OCGT/CCGT 8,011 1 De-rated power plant c
Slide 24: Germany: Clean Dark (CDS) and Spark Spreads (CSS)
Germany: Clean Dark (CDS) and Spark Spreads (CSS) 2013 forward 2014 forward 2015 forward 16 12 Ø 9.96 Ø 7.86 8 Ø 5.84 4 0 -4 Ø -2.37 -8 Ø -11.63 -12 Ø -13.12 -16 Trading year 2012 Trading year 2013 Trading year 2014 2 3 4 2 3 4 2 3 4 12 13 14 -1 -1 -1 r-1 r-1 r-1 l- 1 l- 1 l- 1 n- n- n- kt kt kt Ju
Slide 25: NL: Clean Dark (CDS) and Spark Spreads (CSS)
NL: Clean Dark (CDS) and Spark Spreads (CSS) 2013 forward 2014 forward1 2015 forward1 20 15 Ø 11.43 10 Ø 9.19 5 Ø 7.63 0 -5 Ø -4.55 Ø -7.91 -10 Ø -7.46 -15 -20 Trading year 2012 Trading year 2013 Trading year 2014 2 3 4 2 3 4 2 3 4 12 13 14 -1 -1 -1 r-1 r-1 r-1 l- 1 l- 1 l- 1 n- n- n- kt kt kt Ju Ju
Slide 26: UK: Clean Dark (CDS) and Spark Spreads (CSS)
UK: Clean Dark (CDS) and Spark Spreads (CSS) 2013 forward 2014 forward1 2015 forward1 28 Ø 22.49 24 20 Ø 19.51 Ø 17.33 16 12 8 4 Ø 3.54 Ø 3.12 0 Ø 2.03 Trading year 2012 Trading year 2013 Trading year 2014 2 3 4 2 3 4 2 3 4 12 13 14 -1 -1 -1 r-1 r-1 r-1 l- 1 l- 1 l- 1 n- n- n- kt kt kt Ju Ju Ju Ap A
Slide 27: Development of net debt
Development of net debt € billion Cash flows Capex on Dividends1 Divestments/ Change Others from property, deconsoli- in pension, including f/x operating plant and dations/ nuclear, effects and activities1 equipment capital mining change of and intangible measures1 provisions1 net debt from assets a
Slide 28: Capital market debt maturities and sources of financing
Capital market debt maturities and sources of financing Capital market debt maturities1 Strong sources of financing in € bn Fully committed syndicated loan For liquidity 2,5 20 (€ 4.0 bn up back-up to March 2019) € 0.0 bn 2,0 16 1,5 12 Commercial paper $ 0.0 bn ($ 5.0 bn) (up to 1 year) 1,0 8 € 0.0
Slide 29: RWE's major investment projects
RWE’s major investment projects RWE Capex share (€ bn) 2013 2014 2015 2016 2017 2018 Conventional new build power plant programme (capex at 100% share) Hamm (hard coal, 1,528 MW)1 77% 2.5 Unit E (764 MW) Eemshaven (hard coal/biomass, 1,554 MW) 100% 3.1 Units A B 1 The date for bringing unit D (764 M
Slide 30: Growing uncertainty as to whether sufficient firm capacity will be available
Growing uncertainty as to whether sufficient firm capacity will be available Development of firm capacity in Germany, 2012 – 2022 [GW] 2 5 88 6 12 0–10 69–79 5 3 5–15 Firm Addition of Firm Closures Phase-out Plant Firm Balancing Demand side Shortfall of capacity thermal capacity due to Large of nucl
Slide 31: By 2015 we will have renewed 25% of our electricity generation fleet
By 2015 we will have renewed 25% of our electricity generation fleet Gas 12 GW BoA Neurath 12.5 GW out of Lignite 2.1 GW Lignite out 49 of GW (2011) 49.2 GW (2013) Hard coal Staythorpe Moerdijk 2 1.7 GW CCGT 0.4 GW CCGT Lingen Claus C Pembroke Denizli Hamm (unit E) Eemshaven 0.9 GW CCGT 1.3 GW CCGT
Slide 32: The fuel mix of European electricity generators 2013
The fuel mix of European electricity generators 2013 RWE has one of the most balanced generation portfolios of European electricity generators (installed capacity) 100% 80% 60% Hydro/ Other 40% Gas Hard Coal 20% Lignite Nuclear 0% Centrica CEZ EDF Enel E.On GDF Iberdrola RWE SSE Share in power plant
Slide 33: The fuel mix of European electricity generators 2013
The fuel mix of European electricity generators 2013 RWE has one of the most balanced generation portfolios of European electricity generators (generation output) 100% 80% 60% Hydro/ Other 40% Gas Hard Coal 20% Lignite Nuclear 0% Centrica CEZ EDF Enel E.On GDF Iberdrola RWE SSE Share in electricity
Slide 34: Keep up with RWE …
Keep up with RWE … Follow us on twitter@RWE_IR and have a look at www.rwe.com/ir Financial calendar http://www.rwe.com/web/cms/en/110614/rwe/investor-relations/events/calendar/ Annual and Interim Reports http://www.rwe.com/web/cms/en/110822/rwe/investor-relations/reports/ Investor and Analyst Confer