Rwe Ag · XETR:RWE
Rwe — Investor Presentation (July 2009)
20 slides from Rwe's investor presentation, Jul 23, 2009
Slide 1: Steady course through stormy Waters
Steady course through stormy Waters Summer 2009 23.07.2009
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: Key messages
Key messages Performance > Operating result increased 5.0% 1Q 2009 > Recurrent net income up by 5.9% Strategy > Recommended bid for Dutch utility Essent > Successful bid for nuclear sites in UK within NDA auction process > Step into the Turkish electricity market > Reorganization of Group structure
Slide 4: More growth, less CO2 - Our strategic roadmap for 2012
More growth, less CO2 - Our strategic roadmap for 2012 What we aim to do Target for 2012 Defend and expand existing margins in GER: defend/grow margins on current volumes RWE key markets Germany and UK UK: defend/grow volumes and profitability Share of non-German operating result grows from Increase
Slide 5: Essent matches our strategy and asset portfolios
Essent matches our strategy and asset portfolios … … in Dutch power generation … in Dutch supply Eemshaven (Coal) Electrabel 1% Electrabel 2% Essent generation plant in operation 1,560 MW (2012) E.ON 2% E.ON 2% Other 8% Other 10% Essent new build project Delta 2% Delta 2% RWE new build project Nuon
Slide 6: Besides Essent our focus is on organic growth and selective small M&A outside Germany
Besides Essent our focus is on organic growth and selective small M&A outside Germany Time horizon 2009 - 2012: UK: approx. € 3 billion CCGT new build, offshore wind, nuclear new build BeNeLux: approx. €15 billion Acquisition of Essent (NL), increased stake in Luxembourg, low-carbon generation (Eems
Slide 7: Restrictive CO2 regulation highlights need for further internationalization and access to gas
Restrictive CO2 regulation highlights need for further inter- nationalization and access to gas: We are already on this path Expansion of Benefitting from investor- nuclear activities friendly CO2 allocation in CEE and SEE NDA sites > ≤49% stake in Wola > Option for 800 MW hard- Belene with 2 GW coa
Slide 8: Our strategy to reduce the impact of CO2 on our P&L in 2013
Our strategy to reduce the impact of CO2 on our P&L in 2013 Certificates to be Operating Result Offsetting purchased 2008 – 2013 factors in million t p.a. Organic growth/ 160 – 170 +100 High earnings visibility AGR > Expected higher level of power C and gas wholesale prices % – 10 > New build to be
Slide 9: Offsetting factors to reduce the impact of CO2 on our P&L in 2013
Offsetting factors to reduce the impact of CO2 on our P&L in 2013 > Expected higher level of power (>60€/MWh) and gas prices > RWE Innogy: operating result at least €0.5bn p.a. by 2013 Organic Growth/ > RWE Dea: operating result of €0.9bn p.a. by 2013 High Earnings (based on forwards in the mid 60$/
Slide 10: We confirm our capex programme to capture growth opportunities and secure market share
We confirm our capex programme to capture growth opportunities and secure market share €6.5 bn German versus p.a. international capex +/- 10% RWE npower €1,100m p.a. (+/-20%) International German RWE Energy €1,800m p.a. (+/-20%) ~80% grid About half of capex will be spent outside ~20% others of Germ
Slide 11: Recession induced demand impact: historic experience for the German market
Recession induced demand impact: historic experience for the German market Change to previous year in % Oil price shocks led to Collapse of large parts of 14 a short-term reduction Eastern German industries 12 of energy consumption after reunification 10 8 6 4 2 0 -2 -4 1952 1960 1970 1980 1990 2000
Slide 12: Our hedging strategy protects us from short-term impacts of the recession
Our hedging strategy protects us from short-term impacts of the recession Forward selling of RWE Power in the German market (base-load forwards in €/MWh) 100 90 Forward 2009 80 70 60 50 40 >10% sold >20% sold >25% sold >35% sold >65% sold >90% sold 30 100 90 Forward 2010 80 70 60 50 40 >10% sold >40
Slide 13: A well balanced customer portfolio and conservative risk management helps us weather the crisis
A well balanced customer portfolio and conservative risk management helps us weather the crisis RWE German external electricity sales per customer group in 2009 Trading / Wholesale market > Exchange traded products: Private and commercial counterparty credit risk > Consumption stable managed by clea
Slide 14: Germany – Expected long run marginal cost indicates sustainably higher power price levels
Germany – Expected long run marginal cost indicates sustainably higher power price levels Required German base load price at full Required German base load price at full cost of hard coal new build1 cost of CCGT new build1 100 100 LRMC2 80 80 Power price in €/MWhel Power price in €/MWhel LRMC2 60 60
Slide 15: Scarce generation capacity increases value of existing and future asset base
Scarce generation capacity increases value of existing and future asset base Significant reliable new build needed1 … … but current projects are insufficient to fill gap 100 90 Required secure capacity1 Cancelled/stopped Secure capacity (in GW) 80 Unlikely 15.81 11.71 70 Questionable New build (Cat.
Slide 16: Strong contango of German base-load power forward price supports our view
Strong contango of German base-load power forward price1) supports our view €/MWh 70 63.00 65 60 58.02 54.93 55 49.15 50 45 2010 2011 2012 2013 1) as per July 23, 2009 16
Slide 17: Efficiency enhancement programme is on track to deliver €1.2 billion by 2012
Efficiency enhancement programme is on track to deliver €1.2 billion by 2012 Cumulative operating result contribution of the programme compared to 2006 in € million 1,200 900 700 €1,200 million ; ; 450 annual contribution in total as of 2012 200 versus 2006 100 2007 2008 2009 2010 2011 2012 > Effici
Slide 18: The new RWE: More market-driven, leaner and faster
The new RWE: More market-driven, leaner and faster > RWE TSO Electricity Germany RWE AG > RWE TSO Gas Germany (Group Centre) > RWE Technology > Internal Services Germany Netherlands/ UK Central Eastern Renewables Upstream Trading/ Belgium Europe Gas & Oil Gas Midstream > RWE Power > Essent > RWE npo
Slide 19: We maintain a high level of liquidity and strong sources of financing
We maintain a high level of liquidity and strong sources of financing - even after the bid for Essent Capital market debt maturities1 General financing Fully committed in € bn syndicated loan for liquidity 3.0 18.0 (€1.6 bn 364 days back-up €2.0 bn 3 years) €0.0 bn 2.5 15.0 Commercial paper €3.6 bn
Slide 20: Mid-term financial targets: We are also a stable post-crisis investment
Mid-term financial targets: We are also a stable post-crisis investment Operating Result > 5 – 10% CAGR1 to 2012 (excluding Essent) based on an average realized price for German electricity forwards of at least €60/MWh Recurrent > In the order of 10% CAGR1 to 2012 (excluding Essent) based on an net