Rwe Ag · XETR:RWE
Rwe — H1 2015 Earnings Presentation
34 slides from Rwe's earnings presentation, Aug 13, 2015
Slide 1: Investor and Analyst H1 2015 Conference Call
Investor and Analyst H1 2015 Conference Call Essen, 13 August 2015 Peter Terium Bernhard Günther Stephan Lowis Chief Executive Chief Financial Vice President Officer Officer Investor Relations
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: Agenda
Agenda A Peter Terium H1 2015 highlights and political environment B Bernhard Günther H1 2015 Group results & outlook RWE AG | H1 2015 Conference Call | 13 August 2015 3
Slide 4: Main messages for H1 2015
Main messages for H1 2015 Financial performance for first half of 2015: EBITDA -7%, operating result -11%, adjusted net income -28% Group outlook for 2015 confirmed Net debt improved significantly to €25.6 bn (-€5.4 bn vs. 31 Dec 2014) Inauguration of offshore wind farms Nordsee Ost and Gwynt y Môr
Slide 5: Political environment in Germany I: Climate protection plan via strategic capacity reserve
Political environment in Germany I Climate protection plan via strategic capacity reserve > Transfer of 2.7 GW > CHP generation target lignite capacity into of 25% of total thermal a strategic reserve power generation > Plants will be shut > Increase of CHP after four years in support from currently
Slide 6: Political environment in Germany II: White book for future market design
Political environment in Germany II White book for future market design New market design: “Energy Only Market 2.0” with capacity reserve Further development of existing competitive energy market (“Energy Only Market 2.0”); no introduction of wide ranging capacity mechanism Introduction of capacity
Slide 7: Political environment in Germany III: Treatment and management of nuclear liabilities
Political environment in Germany III Treatment and management of nuclear liabilities Stress testing of Review of nuclear Responsibility for nuclear provisions liability management nuclear liabilities > Assessment of > Evaluation of stress > Secure operators’ completeness tests and further legal resp
Slide 8: Political environment in the UK: CMA energy market investigation
Political environment in the UK CMA energy market investigation CMA1 findings of adverse effect on competition RWE assessment 1 Absence of locational pricing for losses 2 Mechanisms for allocating CFDs Weak customer response and unilateral market power 3 in power/gas retail market 4 Features o
Slide 9: Becoming faster and getting closer to customers
Becoming faster and getting closer to customers Main steps Key achievements > Transformation of RWE AG from a > Faster decision making processes through holding into an operating company alignment of steering model and legal governance > Merger of most 100% German > Reduction of intercompany interfa
Slide 10: Agenda
Agenda A Peter Terium H1 2015 highlights and political environment B Bernhard Günther H1 2015 Group results & outlook RWE AG | H1 2015 Conference Call | 13 August 2015 10
Slide 11: Development of operating result in H1 2015
Development of operating result in H1 2015 … … by division (-€241 million; -11%) Earnings in Conventional Power Generation under pressure mainly due to declining € million generation margins. H1 2014 2,271 Earnings in energy retail business units Conventional supported by normalised weather conditio
Slide 12: Development of the major earning figures in H1 2015
Development of the major earning figures in H1 2015 +/- vs. Non-operating result down mainly due to € billion H1 2015 H1 2014 accrual of provisions for legal risks, lower capital gains and impact from derivatives. EBITDA 3.2 -0.2 Financial result improved mainly due to positive one-off from the sale
Slide 13: Development of cash flows from operating activities
Development of cash flows from operating activities Strong decline in cash flows1 driven by movements in working capital € billion +0.4 -1.1 +0.3 +0.1 -0.3 2.0 -0.3 -0.3 -0.1 0.7 CFOA CFOA Change in Margin Margin Others Procure- Change in Inventories Others H1 20141 H1 20151 variation improve- decli
Slide 14: Strong improvement of net debt after successful disposal of RWE Dea
Strong improvement of net debt after successful disposal of RWE Dea € billion Cash flows Capex on Dividends1 Divestments1 Change Change Others from operat- property, plant in in pension, including ing activities1 and equipment hybrid nuclear, f/x effects and intangible capital mining assets and prov
Slide 15: Net debt mainly driven by provisions with ultra-long duration
Net debt mainly driven by provisions with ultra-long duration Net debt as of 30 June 2015 comprises €6.7 bn net financial debt (incl. 50% of hybrids) and €18.9 bn provisions. Provisions not subject to financial covenants, undertakings, cross default clauses, or rating triggers 16 € bn Amount of prov
Slide 16: Outlook for 2015 confirmed
Outlook for 2015 confirmed € million EBITDA 7,131 6,100 – 6,400 Operating result 4,017 3,600 – 3,900 Adjusted 1,282 1,100 – 1,300 net income1 Dividend €1.00/share Oriented towards growth opportunities, indebtedness and earnings situation. The dividend for 2014 serves as a reference point. 2014 2015e
Slide 17: 2015 divisional outlook for the operating result
2015 divisional outlook for the operating result € million 2014 2015 forecast versus 2014 Conventional Power Generation1 979 Significantly below 2014 Supply/Distribution Networks Germany 1,871 Moderately below 2014 Supply NL/B 146 Significantly above 2014 Supply UK 227 Significantly below 2014 Centr
Slide 18: Back-up Charts
Back-up Charts The energy to lead
Slide 19: Performance of the Conventional Power Generation Division
Performance of the Conventional Power Generation Division January – June: operating result: -53% (-€317 million) € million - Lower realised electricity generation spreads 593 + Efficiency improvements 276 2014 2015 Outlook for fiscal 2015: significantly below previous year € million - Lower realised
Slide 20: RWE's forward hedging of conventional electricity production
RWE’s forward hedging of conventional electricity production (German, Dutch and UK portfolio) As of 30 June 2015 >30% >10% >40% >10% >40% >20% >50% >30% >60% >40% >60% >50% >80% >60% >90% >70% >90% >70% 2015 forward 31 Dec. 2012 31 March 2013 30 June 2013 30 Sep. 2013 31 Dec. 2013 31 March 2014 30 J
Slide 21: Germany: Clean Dark and Spark Spreads
Germany: Clean Dark (CDS) and Spark Spreads (CSS) 2014 forward 2015 forward 2016 forward 12 Ø 8.79 8 Ø 6.63 Ø 4.90 4 0 Ø -5.38 -4 Ø -6.84 Ø -5.25 -8 -12 Trading year 2013 Trading year 2014 Trading year 2015 CDS Cal 2014–16 base load (€/MWh) CSS Cal 2014–16 peak load (€/MWh) (assumed thermal efficien
Slide 22: NL: Clean Dark and Spark Spreads
NL: Clean Dark (CDS) and Spark Spreads (CSS) 2014 forward1 2015 forward1 2016 forward 20 16 Ø 11.43 Ø 11.48 12 Ø 9.18 8 4 0 Ø -6.64 -4 Ø -7.46 Ø -7.52 -8 -12 -16 Trading year 2013 Trading year 2014 Trading year 2015 CDS Cal 2014–16 base load (€/MWh) CSS Cal 2014–16 base load (€/MWh) (assumed thermal
Slide 23: UK: Clean Dark and Spark Spreads
UK: Clean Dark (CDS) and Spark Spreads (CSS) 2014 forward1 2015 forward1 2016 forward1 32 28 Ø 22.49 24 Ø 16.97 20 16 Ø 11.88 12 8 Ø 5.32 Ø 2.03 Ø 3.65 4 0 Trading year 2013 Trading year 2014 Trading year 2015 CDS Cal 2014–16 base load (€/MWh) CSS Cal 2014–16 base load (€/MWh) (assumed thermal effic
Slide 24: Performance of the Supply/Distribution Networks Germany Division
Performance of the Supply/Distribution Networks Germany Division January – June: operating result: -0.8% (-€8 million) € million - Lower earnings from the disposal of grid assets + Weather-induced higher gas demand 1,022 1,014 2014 2015 Outlook for fiscal 2015: moderately below previous year € milli
Slide 25: Performance of the Supply Netherlands/Belgium Division (Essent)
Performance of the Supply Netherlands/Belgium Division (Essent) January – June: operating result: +44% (+€43 million) € million + Weather-induced higher gas demand + Marketing of new supply offerings 141 98 2014 2015 Outlook for fiscal 2015: significantly above previous year € million + Normalised w
Slide 26: Performance of the Supply United Kingdom Division (RWE npower)
Performance of the Supply United Kingdom Division (RWE npower) January – June: operating result: -60% (-€80 million) € million + Lower costs for ‘Energy Companies Obligation’ (ECO) programme + Lower gas procurement costs, partly offset by lower gas tariff 133 - Significant process and system-related
Slide 27: Performance of the Central Eastern and South Eastern Europe Division
Performance of the Central Eastern and South Eastern Europe Division January – June: operating result: -3.9% (-€16 million) € million Czech Republic: - Lower gas storage margins + Improved regulatory conditions for gas distribution grid 409 393 + Weather-induced higher distributed gas volumes and sa
Slide 28: Performance of the Renewables Division (RWE Innogy)
Performance of the Renewables Division (RWE Innogy) January – June: operating result: +188% (+€152 million) € million 233 + Increased earnings contribution from growth investments, mainly Nordsee Ost and Gwynt y Môr and sale of grid connection asset of this project + Weather induced higher utilisati
Slide 29: Performance of the Trading/Gas Midstream Division
Performance of the Trading/Gas Midstream Division (RWE Supply & Trading) January – June: operating result: -30% (-€31 million) € million Trading: - Trading activities did not reach high earnings level of 2014 Supply: Still suffering from out of the money long-term gas storage contracts 104 73 2014 2
Slide 30: Financial liabilities and assets
Financial liabilities and assets (Excluding hybrid capital as of 30 June 2015) Financial liabilities Financial assets Split of € billion € billion securities 20 18.8 20 16.7 2.2 22% 1.4 1.5 15 0.3 15 1.3 12.2 11.7 1.0 0.7 10 4.0 4.0 10 14.0 14.8 0.5 0.5 5 5 6.5 6.7 0.3 0.5 0.2 2,1 0.2 0.3 0.8 0 Shor
Slide 31: Capital market debt maturities and sources of financing
Capital market debt maturities and sources of financing Capital market debt maturities1 Strong sources of financing € billion Fully committed syndicated loan For liquidity 2.5 2,5 20 20 (€4.0 bn up back-up to March 2020) €0.0 bn 2.0 2,0 16 1.5 1,5 12 Commercial paper $0.0 bn ($5.0 bn) (up to 1 year)
Slide 32: Capital market debt currency and interest exposure
Capital market debt currency and interest exposure (as of 30 June 2015) 3% 37% €17.9 bn11 €16.2 bn2 63% 97% € Interest rate fixing expiry > 1 year £ Interest rate fixing expiry < 1 year 1 Capital market debt = bonds of €12.53 bn and hybrids of €5.33 bn; split into currencies includes cross-currency
Slide 33: Keep up with RWE …
Keep up with RWE … Follow us on twitter.com/RWE_IR and have a look at www.rwe.com/ir Important links Financial Calendar Annual and Interim Reports 12 November 2015 http://www.rwe.com/ir/reports/ Interim Report on Q1-Q3 2015 Investor and Analyst Conferences 08 March 2016 http://www.rwe.com/ir/investo
Slide 34: RWE Investor Relations – contacts
RWE Investor Relations – contacts Contacts for Institutional Investors & Financial Analysts Dr. Stephan Lowis Martin Vahlbrock Gunhild Grieve Dr. Holger Perlwitz Vice President Investor Relations Tel.: +49 201 12-15055 Tel.: +44 207 015-5459 Tel.: +49 201 12-15141 Tel. +49 201 12-15031 martin.vahlbr