Slide 1: Laying the foundation for RWE's transformation
Laying the foundation for RWE’s transformation FY 2018 results presentation 14 March 2019 Rolf Martin Schmitz, Chief Executive Officer Markus Krebber, Chief Financial Officer Gunhild Grieve, 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: Agenda
AGENDA Rolf Martin Schmitz Strategy update Markus Krebber Financial performance and outlook for 2019 RWE AG | FY 2018 Conference Call | 14 March 2019 Page 3
Slide 4: Laying the foundation for RWE's transformation
Laying the foundation for RWE’s transformation > Agreement on asset swap with E.ON will transform RWE into a leading renewables player > Execution of transaction and preparation for swift integration is well on track > Final report of German Commission on ‘Growth, Structural Change and Employment’ s
Slide 5: Major filings submitted
Major filings RWE Renewables High level submitted management team strategy announced formulated RWE AG | FY 2018 Conference Call | 14 March 2019 Page 5
Slide 6: Closing of innogy transaction expected for summer 2019
Closing of innogy transaction expected for summer 2019 2018 Announcement of transaction (12 March 2018) Merger Control Proceedings Q1 > RWE’s acquisitions of E.ON and innogy renewables operations approved by 2019 EU Commission on 26 Feb 19 > E.ON’s innogy acquisition filed with the EU Commission on
Slide 7: Nomination of highly experienced future management team for combined renewables business
Nomination of highly experienced future management team for combined renewables business RWE Renewables COO Onshore COO Offshore COO Onshore & CEO CFO CCO & PV Global PV EU & APAC Americas Anja-Isabel Holger Tom Sven Silvia Katja Dotzenrath Himmel Glover Utermöhlen Ortín Rios Wünschel > Diversified
Slide 8: Strategic ambition to build a global renewables player
Strategic ambition to build a global renewables player Target growth markets 1 Focus markets Europe Americas Asia- Pacific Growth ambition ~2.0-3.0 GW p.a. Funds available for investment ~€1.5 bn p.a. net Focus markets Solar PV Wind onshore Wind offshore 1 Size of bubble indicates approximate growth
Slide 9: Selected focus areas of the current operational business in 2019
Selected focus areas of the current operational business in 2019 L&N: Nuclear decom- European Power: Power Supply & Trading: missioning concept fleet and energy policy Grow LNG portfolio (million tonnes) 9.8 10 8 6.1 6 3.7 4 2.0 2 0.7 1.2 0.1 0 2012 2013 2014 2015 2016 2017 2018 > Steering towards s
Slide 10: Roadmap of recommended German coal phase out
Roadmap of recommended German coal phase out Recommendations by the Commission for Growth, Structural Change and Employment of 26 January 2019 Renewables Renewables 36.1% 65% Hard coal -7.7 GW Hard coal -7 GW Hard coal -8 GW Hard coal 22.7 GW 15 GW 8 GW 0 GW Lignite -4.9 GW Lignite -6 GW Lignite -9
Slide 11: RWE is on an ambitious path to reduce CO2 emissions
RWE is on an ambitious path to reduce CO2 emissions - huge contribution to climate protection already made RWE’s reduction path for CO2 emissions in core markets1 – our target before Commission recommendations Conversion of Dutch hard coal Transfer of 1.5 GW of lignite Disposal and closure of coal C
Slide 12: 2019 - a transformational year securing a prosperous long-term future for RWE
2019 - a transformational year securing a prosperous long-term future for RWE The start of the new RWE Strong operational earnings to support future QX 20XX growth and attractive dividend onwards Agreement on coal phase out to draw up and implement revised operational lignite plan Closing of innogy
Slide 13: Agenda
AGENDA Rolf Martin Schmitz Strategy update Markus Krebber Financial performance and outlook for 2019 RWE AG | FY 2018 Conference Call | 14 March 2019 Page 13
Slide 14: Delivery of 2018 financial targets in a challenging environment
Delivery of 2018 financial targets in a challenging environment RWE stand-alone (€ million) Earnings in line with outlook for 2018 despite 2018 adj. EBITDA ✔ negative impact from suspension of UK 1,400 – 1,700 1,521 ✔ capacity market Ordinary dividend proposal improved from ✔ €0.50 in 20171 to €0.70
Slide 15: 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) 2,149 FY 2017 2,066 -315 > Lignite & Nuclear: Declining generation margins Lignite & Nuclear -315 and lower production volumes -129 European Power > European Power: Mai
Slide 16: Lignite & Nuclear – earnings 2018 driven by expected decline of generation margins and volumes
Lignite & Nuclear – earnings 2018 driven by expected decline of generation margins and volumes Key financials FY 2018 versus FY 2017: FY FY Lower realised generation margins € million 2018 2017 change Closure of Gundremmingen B nuclear unit Operating cost improvements Adj. EBITDA 356 671 -315 t/o no
Slide 17: European Power – operational performance suffers from suspension of UK capacity market
European Power – operational performance suffers from suspension of UK capacity market Key financials FY FY FY 2018 versus FY 2017: € million 2018 2017 change Lower realised generation margins UK 102 205 -103 Absence of positive one-offs (e.g. land sales) Continental Europe 228 253 -25 Higher earnin
Slide 18: Hedging – increased average hedge prices in outer years but lower volumes
Hedging – increased average hedge prices in outer years but lower volumes due to restrictions at Hambach mine Expected positions and hedge status as of 31 December 2018 Before any measures resulting from proposals of ‘Growth, Structural Change and Employment’ commission Outright Average hedge price
Slide 19: Recovery of fuel spreads in H2 2018 after strong decline since end of 2017
Recovery of fuel spreads in H2 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 spread defined
Slide 20: Supply & Trading – Slightly below average earnings level
Supply & Trading – Slightly below average earnings level Key financials FY 2018 versus FY 2017: FY FY Good performance of gas and LNG business; earnings € million 2018 2017 change contribution in the order of high previous year’s result Trading result below last year‘s level Adj. EBITDA 183 271 -88
Slide 21: Adjusted net income for FY 2018 reaches €591 million
Adjusted net income for FY 2018 reaches €591 million RWE stand-alone FY 2017 FY 2018 (€ million) > RWE stand-alone adj. EBITDA includes 2,066 Adj. EBITDA 1,521 adj. EBITDA from Lignite & Nuclear, European Power, Supply & Trading and dividend from innogy -592 Adj. depreciation -568 > Financial result
Slide 22: Distributable cash flow mainly driven by lower adjusted EBITDA
Distributable cash flow at € 261 million mainly driven by lower adjusted EBITDA RWE stand-alone FY 2017 FY 2018 (€ million) > innogy dividend of €683 million (FY 2017: 2,066 Adj. EBITDA 1,521 €683 million) fully reflected in adj. EBITDA Change in provisions & > Lower changes in provisions & other no
Slide 23: 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 -261 922 -1 -3,855 976 -11 2,280 Net debt Distributable Dividend Financial Other Change in Change in Net debt 31 Dec 2017 cash flow RWE AG investments/ changes in provisions
Slide 24: RWE stand-alone – outlook for 2019
RWE stand-alone – outlook for 2019 FY 2018 FY 2019e €1.2 bn – €1.5 bn Adj. EBITDA €1.5 bn -€0.6 bn Adj. depreciation > Slight increase among others due to implementation of IFRS 16 -€0.2bn Adj. net financial result > Stable development expected -€0.1bn Adj. taxes > Stable development expected -€0.1b
Slide 25: Target to pay attractive dividends
Target to pay attractive dividends Elements of dividend policy €1.50 > Dividends until 2019 driven by distributable cash flow of €1.00 RWE stand-alone > Increase in operational dividend 2018 of 40% to €0.701 €0.802 > Management target to further increase dividend for €0.701 2019 to €0.80 > After clo
Slide 26: Appendix
Appendix RWE AG | FY 2018 Conference Call | 14 March 2019 Page 26
Slide 27: Reconciliation to adjusted net income
Reconciliation to adjusted net income RWE stand-alone Fiscal year 2018 FY 2017 change (€ million) Reported Adjustments Adjusted Adjusted Adjusted Adjusted EBITDA 1,521 - 1,521 2,066 -545 Depreciation -568 - -568 -592 24 Adjusted EBIT 953 - 953 1,474 -521 Non-operating result -275 275 - - - Financial
Slide 28: Income statement fiscal year 2018
Income statement fiscal year 2018 (€ million) RWE stand-alone RWE Group Revenue (including natural gas tax/electricity tax) 12,429 13,529 Natural gas tax/electricity tax -141 -141 Revenue 12,288 13,388 Other operating result 8 -19 Cost of materials -10,049 -10,237 Staff costs -1,703 -1,895 Depreciat
Slide 29: Balance sheet as at 31 December 2018
Balance sheet as at 31 December 2018 (€ million) RWE stand-alone RWE Group Assets Intangible assets 1,038 2,193 Property, plant and equipment 6,614 12,409 Investments accounted for using the equity method 726 1,467 Other financial assets1 16,738 400 Inventories 1,595 1,631 Financial receivables 4,45
Slide 30: Net debt as at 31 December 2018
Net debt as at 31 December 2018 (€ million) RWE stand-alone RWE Group Cash and cash equivalents 3,211 3,523 Marketable securities 3,863 3,863 Other financial assets 4,432 2,809 of which: financial receivables against innogy 1,662 - Financial assets 11,506 10,195 Bonds, other notes payable, bank debt
Slide 31: 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 -4.6 +1.2 +1.0 +0.9 -0.2 +0.8 19.3 Net debt of discontinued operations 14.9 Net debt of continuing operations 4.4 Net debt Cash flows Capex on Dividends Change in Change in Ch
Slide 32: 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 80 €/MWh 100 NL UK 60 80 40 60 Germany 20 40 0 20 Mrz'17 Mrz'18 Mrz'19 Mrz'17 Mrz'18 Mrz'19 Coal prices – API2 Cal-ahead Gas prices – TTF Cal-ahead Carbon prices - EU
Slide 33: Clean Dark and Spark Spreads – 2018-2020 forwards for Germany, UK and NL
Clean Dark (CDS) and Spark Spreads (CSS) – 2018 - 2020 forwards for Germany, UK and NL1 Germany UK2 Netherlands Cal18 Cal19 Cal20 Cal18 Cal19 Cal20 Cal18 Cal19 Cal20 €/MWh €/MWh 15 15 Ø10.61 10 10 Ø8.69 Ø7.67 Ø6.37 Ø6.95 Ø5.07 Ø4.68 5 5 Ø4.99 Ø4.84 Ø4.73 Ø4.18 Ø4.16 Ø3.10 Ø3.92 Ø1.07 Ø2.32 0 0 Ø-0.1
Slide 34: Your contacts @RWE Investor Relations
Your contacts @RWE Investor Relations Important Links Financial Calendar Annual and Interim Reports & Statements 3 May 2019 http://www.rwe.com/ir/reports Annual General Meeting Investor and Analyst Conferences 15 May 2019 http://www.rwe.com/ir/investor-and-analyst-conferences Interim statement on th
Slide 35: Powering. Reliable. Future.
Powering. Reliable. Future. RWE