Slide 1: Q1-Q3 2018 Results Presentation
Q1-Q3 2018 Results Presentation Investor and Analyst Conference Call 14 November 2018 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 information currently available to the management. Forward-looking statements shall not be construed as a promi
Slide 3: Key messages of Q1-Q3 2018
Key messages of Q1-Q3 2018 First nine months of fiscal year 2018 fully in line with expectations – ✔ RWE Group and RWE stand-alone outlook confirmed Execution of innogy/E.ON transaction progressing well. Joint integration teams ✔ established and kicked-off work Improved market perspectives: Dutch ‘C
Slide 4: Lower adjusted EBITDA mainly due to declining generation margins in conventional power generation
Lower adjusted EBITDA mainly due to declining generation margins in conventional power generation Group RWE stand-alone (€ million) 1,557 Q1-Q3 2017 1,739 > Lignite & Nuclear: Declining generation margins -311 Lignite & Nuclear -311 and lower volumes > European Power: Stable operational business; -9
Slide 5: Lignite & Nuclear – earnings driven by expected decline of generation margins and volumes
Lignite & Nuclear – earnings driven by expected decline of generation margins and volumes Key financials Q1-Q3 2018 versus Q1-Q3 2017: Q1-Q3 Q1-Q3 Lower realised generation margins € million 2018 2017 change Closure of Gundremmingen B nuclear unit Operating cost improvements Adj. EBITDA 240 551 -311
Slide 6: European Power – operational performance on a par with previous year’s level
European Power – operational performance on a par with previous year’s level Key financials Q1-Q3 2018 versus Q1-Q3 2017: Q1-Q3 Q1-Q3 Lower realised generation margins € million 2018 2017 change Absence of positive one-offs (e.g. land sales) UK 88 198 -110 Earnings contribution from UK capacity mark
Slide 7: Hedging – increasing average hedge prices in outer years
Hedging – increasing average hedge prices in outer years Expected positions and hedge status as of 30 September 2018 (before ‘Hambach effect’) Outright Average hedge price 2018 – 2021 corresponds with average hedged CO2 price in the range of ~€5 – 6/t1 (Lignite & Nuclear) ~28 ~29 ~30 ~33 85 – 90 TWh
Slide 8: Recovery of fuel spreads at the end of Q3 2018 after strong decline since end of 2017
Recovery of fuel spreads at the end of Q3 2018 after strong decline since end of 2017 Development of German fuel spreads1 8 6 4 €/MWh 2 0 -2 -4 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 Cal17 Cal18 Cal19 Cal20 Cal21 1 Fuel spre
Slide 9: Supply & Trading – strong performance in Q3 2018
Supply & Trading – strong performance in Q3 2018 Key financials Q1-Q3 2018 versus Q1-Q3 2017: Q1-Q3 Q1-Q3 Very good trading performance in Q2 and Q3 2018 € million 2018 2017 change Good performance of gas and LNG business; however, earnings contribution below previous year’s high result Adj. EBITDA
Slide 10: Adjusted net income for Q1-Q3 2018 reaches €645 million
Adjusted net income for Q1-Q3 2018 reaches €645 million Q1-Q3 2017 RWE stand-alone Q1-Q3 2018 (€ million) > RWE stand-alone adj. EBITDA includes 1,739 Adj. EBITDA 1,334 adj. EBITDA from Lignite & Nuclear, European Power, Supply & Trading and dividend from innogy -435 Adj. depreciation -413 > Financi
Slide 11: Increased distributable cash flow due to lower change in provisions and improved change in working capital
Increased distributable cash flow due to lower change in provisions and improved change in working capital Q1-Q3 2017 RWE stand-alone Q1-Q3 2018 (€ million) > innogy dividend of €683 million (FY 2017: 1,739 Adj. EBITDA 1,334 €683 million) fully reflected in adj. EBITDA Change in provisions & > Chang
Slide 12: Strong decline of net debt due to high inflow of variation margins
Strong decline of net debt due to high inflow of variation margins Development of net debt (RWE stand-alone) (€ million) 4,510 -604 922 10 -2,988 310 -18 2,142 Net debt Distributable Dividend Financial Other Change in Change in Net debt 31 Dec 2017 cash flow RWE AG investments/ changes in provisions
Slide 13: RWE stand-alone – outlook for 2018 confirmed
RWE stand-alone – outlook for 2018 confirmed FY 2017 FY 2018e €1.4 bn – €2.1 bn Adj. EBITDA €1.7 bn -€0.6 bn Adj. depreciation > Stable development expected > Significant improvement after redemption and buy back of hybrids in -€0.4 bn Adj. net financial result 2017 and impact from settlement of nuc
Slide 14: Appendix
Appendix RWE AG | Q1-Q3 2018 Conference Call | 14 November 2018 Page 14
Slide 15: RWE Group – outlook for 2018 confirmed
RWE Group – outlook for 2018 confirmed (€ million) Actuals 2017 2018 forecast Adjusted EBITDA 2,149 RWE Group 1,500 – 1,800 671 Lignite & Nuclear 350 – 450 463 European Power 300 – 400 271 Supply & Trading 100 – 300 785 innogy – continuing 700 – 800 operations Capex continuing 685 1,200 – 1,400 oper
Slide 16: Reconciliation to adjusted net income
Reconciliation to adjusted net income Q1-Q3 RWE stand-alone Q1-Q3 2018 2017 change (€ million) Reported Adjustments Adjusted Adjusted Adjusted Adjusted EBITDA 1,334 - 1,334 1,739 -405 Depreciation -413 - -413 -435 22 Adjusted EBIT 921 - 921 1,304 -383 Non-operating result -338 338 - - - Financial re
Slide 17: Income statement Q1-Q3 2018
Income statement Q1-Q3 2018 (€ million) RWE stand-alone RWE Group Revenue (including natural gas tax/electricity tax) 9,345 10,095 Natural gas tax/electricity tax -101 -102 Revenue 9,244 9,993 Other operating result 4 -45 Cost of materials -7,620 -7,721 Staff costs -1,335 -1,457 Depreciation, amorti
Slide 18: Balance sheet as at 30 September 2018
Balance sheet as at 30 September 2018 (€ million) RWE stand-alone RWE Group Assets Intangible assets 1,033 2,191 Property, plant and equipment 6,511 12,188 Investments accounted for using the equity method 698 1,464 Other financial assets1 16,687 349 Inventories 1,799 1,857 Financial receivables 3,6
Slide 19: Net debt as at 30 September 2018
Net debt as at 30 September 2018 (€ million) RWE stand-alone RWE Group Cash and cash equivalents 4,386 4,618 Marketable securities 3,076 3,076 Other financial assets 3,673 2,054 t/o financial receivables against innogy 1,659 - Financial assets 11,135 9,748 Bonds, other notes payable, bank debt, comm
Slide 20: Lower RWE Group net debt mainly due to high inflow of variation margins
Lower RWE Group net debt mainly due to high inflow of variation margins Development of net debt (RWE Group) (€ billion) 20.2 -3.7 +0.8 +1.0 +0.2 -0.5 +0.5 18.5 Net debt of discontinued operations 14.1 Net debt of continuing operations 4.3 Net debt Cash flows Capex on Dividends Change in Change in Ch
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 80 100 NL UK 60 80 40 60 Germany 20 40 0 20 Nov'16 Nov'17 Nov'18 Nov'16 Nov'17 Nov'18 Coal prices – API2 Cal-ahead Gas prices – TTF Cal-ahead Carbon prices - EU
Slide 22: Clean Dark and Spark Spreads – 2017 - 2019 forwards for Germany, UK and NL
Clean Dark (CDS) and Spark Spreads (CSS) – 2017 - 2019 forwards for Germany, UK and NL1 Germany UK2 Netherlands Cal17 Cal18 Cal19 Cal17 Cal18 Cal19 Cal17 Cal18 Cal19 €/MWh €/MWh 15 15 10 10 Ø8.94 Ø8.82 Ø8.01 Ø5.72 Ø6.93 Ø7.67 Ø4.89 Ø4.68 Ø5.07 Ø4.11 5 5 Ø4.73 Ø4.16 Ø4.46 Ø0.55 Ø0.56 Ø2.27 0 0 Ø-0.18
Slide 23: Your contacts @RWE Investor Relations
Your contacts @RWE Investor Relations Important Links Financial Calendar Annual and Interim Reports & Statements 14 March 2019 http://www.rwe.com/ir/reports Annual report 2018 Investor and Analyst Conferences 3 May 2019 http://www.rwe.com/ir/investor-and-analyst-conferences Annual General Meeting IR
Slide 24: Powering. Reliable. Future.
Powering. Reliable. Future. RWE