Slide 1: 2016 Full Year Results Presentation
2016 Full Year Results Presentation Investor and Analyst Conference Call 14 March 2017 Markus Krebber Gunhild Grieve Chief Financial Officer Head of Investor Relations
Slide 2: Notice
Notice 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 promise f
Slide 3: 2016 – a year of restructuring with solid operational performance and positive outlook
2016 – a year of restructuring with solid operational performance and positive outlook > innogy stock market listing puts RWE back on solid financial ground (€2.6 bn in proceeds for RWE AG; €2.0 bn proceeds for innogy’s growth agenda) > RWE Group’s 2016 operational performance in line with guidance,
Slide 4: Adjusted EBIT declined by 20% due to negative trading result and lower innogy earnings
Adjusted EBIT declined by 20% due to negative trading result and – as expected – lower innogy earnings € million FY 2015 3,837 > Conventional Power Generation: Efficiency improvements and lower depreciation overcompensate for lower realised generation Conventional +31 Power Generation margins > Trad
Slide 5: Conventional Power Generation dominated by declining margins and efficiency improvements
Conventional Power Generation dominated by declining margins and efficiency improvements Adjusted EBITDA and adjusted EBIT (€ million) + Efficiency improvements (€0.2 bn) 2,285 + Lower nuclear fuel tax (€0.1 bn) 1,456 + Lower depreciation (€0.9 bn), including effect from termination of Hamm 596 627
Slide 6: RWE’s forward hedging of conventional electricity production leaves upside in spread positions
RWE’s forward hedging of conventional electricity production leaves upside in spread positions 2017 >30% <10% >50% <10% >70% <10% >80% <10% >80% <10% >90% <10% >90% >60% >90% >80% >90% >90% forward 31 Dec. 2014 31 March 2015 30 June 2015 30 Sep. 2015 31 Dec. 2015 31 March 2016 30 June 2016 30 Sep. 2
Slide 7: Trading/Gas Midstream driven by negative trading result in 2016
Trading/Gas Midstream driven by negative trading result in 2016 Adjusted EBITDA and adjusted EBIT (€ million) Trading: 164 156 - Significantly lower earnings from trading activities Gas Midstream: + Out-of-court settlement with Gazprom, which ensures that our gas -139 -145 procurement contract will
Slide 8: Non-operating result: High burdens from asset impairments and risk surcharge for nuclear energy fund
Non-operating result: High burdens from asset impairments and risk surcharge for nuclear energy fund € billion 2016 2015 Change Capital gains 0.1 0.0 0.1 Impact of derivatives on earnings -0.8 0.3 -1.1 Restructuring, other -6.0 -3.2 -2.7 of which Impairment of German power plant portfolio -3.7 -1.5
Slide 9: Financial result: High impact from change of discount rates and lower income from sale of securities
Financial result: High impact from change of discount rates and lower income from sale of securities € billion 2016 2015 Change Net interest -0.6 -0.8 0.2 Interest accretion to non-current provisions -1.3 -0.8 -0.5 of which adjustment of net present value of nuclear provisions -0.4 - -0.4 due to cha
Slide 10: Reconciliation to net income explained by high negative non-operating and financial result
Reconciliation to net income explained by high negative non-operating and financial result € billion 2016 +/- vs 2015 Adjusted EBITDA 5.4 -1.6 > Tax credit of €0.3 bn mainly as a result of deferred tax assets from reorganisation Depreciation -2.3 +0.9 > No income from discontinued operations Adjuste
Slide 11: Adjusted net income slightly above our guidance of €0.5 – €0.7 bn
Adjusted net income slightly above our guidance of €0.5 – €0.7 bn € million (FY 2016) Reported Adjustments Adjusted Adjustments for reconciliation of Adjusted Net Income: Adjusted EBIT 3,082 0 3,082 > Non-operating result Non-operating result -6,661 6,661 0 > Nuclear one-off effects in Financial res
Slide 12: Cash flows from operating activities partly affected by phasing out of working capital measures
Cash flows from operating activities partly affected by phasing out of working capital measures € billion (FY 2016) Adj. EBITDA 5.4 > Impact from net change of provisions mainly for nuclear, restructuring and pension provisions Provisions -0.6 > Other: adjustment of non-cash book gains/ Interest/tax
Slide 13: Lower net debt despite higher nuclear and pension provisions due to innogy transaction
Lower net debt despite higher nuclear and pension provisions due to innogy transaction € billion 25.5 -2.4 +2.3 +0.4 -5.3 +3.6 -1.4 22.7 Negative cash balance: 0.4 innogy IPO: -2.0 Nuclear 2.2 innogy SPO: Pension1 -2.6 1.4 Net debt Cash flows Capex on Dividends Divestments Change Others Net debt 31
Slide 14: More than half of RWE’s nuclear provisions will be externalised by 1 July 2017
More than half of RWE’s nuclear provisions will be externalised by 1 July 2017 € billion (as of 31 Dec 2016) > RWE will transfer €7.0 bn into the nuclear energy fund on 1 July 20171 > Figures reflect the consolidated view, including 12.7 7.0 minority interest of E.ON in the Emsland nuclear 1.8 Risk
Slide 15: Net debt for RWE stand-alone significantly lower than RWE’s stake in innogy’s market value
Net debt for RWE stand-alone significantly lower than RWE’s stake in innogy’s market value € billion (as of 31 Dec 2016) 22.7 15.8 Financial assets and receivables 16.1 > Financial receivables against innogy 4.3 > Financial assets 11.8 Liabilities 23.0 > Nuclear provisions 12.7 > Mining provisions 2
Slide 16: RWE stand-alone with solid liquidity position
RWE stand-alone with solid liquidity position € billion (as of 31 Dec 2016) > Solid liquidity position even after the 11.8 ~2.0 financing of the nuclear energy fund - 6.8 > Remaining available liquidity covers operating liquidity for margin payments and collaterals as well as further working capital
Slide 17: Outlook for 2017 above 2016 results
Outlook for 2017 above 2016 results € million 2016 2017 forecast1 Adjusted EBITDA 5,403 5,400 – 5,700 1,456 Conventional Power Generation Significantly below 2016 -139 Trading/Gas Midstream Significantly above 2016 4,203 innogy Moderately above 2016 Adjusted net income 777 1,000 – 1,300 1 Qualifiers
Slide 18: Return to an attractive dividend from 2017 onwards
Return to an attractive dividend from 2017 onwards Dividend proposal FY 2016 Dividend policy 2017 onwards > Finalisation of significant corporate restructuring > Orientation towards operating cash flows that are freely available > Heavy burdens from impairments and new law on nuclear energy fund > S
Slide 19: Preview on RWE’s Capital Market Day
Preview on RWE’s Capital Market Day Financial disclosure framework Conventional Power Generation Focus on Operating financial transparency business Trading/Gas Midstream Separate P&L and balance sheet for RWE stand-alone innogy dividend Transparency on cash flows of core business and utilisation
Slide 20: Keep up with RWE …
Keep up with RWE … Important links Financial Calendar Annual and Interim Reports 28 March 2017 http://www.rwe.com/ir/reports/ Capital Market Day 27 April 2017 Investor and Analyst Conferences Annual General Meeting http://www.rwe.com/ir/investor-and-analyst-conferences/ 3 May 2017 IR presentations &
Slide 21: RWE Investor Relations – contacts
RWE Investor Relations – contacts Contacts for Institutional Investors & Financial Analysts Gunhild Grieve Martin Vahlbrock Dr. Burkhard Pahnke Head of Investor Relations Tel.: +49 201 12-15055 Tel.: +49 201 12-15182 Tel. +49 201 12-15169 martin.vahlbrock@rwe.com burkhard.pahnke@rwe.com gunhild.grie