Slide 1: H1 2017 Results Presentation
H1 2017 Results Presentation Investor and Analyst Conference Call 14 August 2017 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 infor- mation currently available to the management. Forward-looking statements shall not be construed as a pro
Slide 3: H1 2017 – key messages
H1 2017 – key messages > RWE consolidated Group: Good start to H1 2017, in line with expectations. EBITDA +7%; adjusted net income +35%. Outlook for 2017 confirmed. > RWE stand-alone: Improved earnings in H1 2017 due to normalised trading result. Outlook for 2017 confirmed; divisional outlook for Eu
Slide 4: Development of EBITDA dominated by recovery of earnings at Supply & Trading
Development of EBITDA dominated by recovery of earnings at Supply & Trading Group RWE stand-alone (€ million) > Lignite & Nuclear: 3,011 H1 20161 1,348 Declining generation margins > European Power: -70 Lignite & Nuclear -70 Absence of 2016 positive one-offs (€-132 million) -94 Strong contribution f
Slide 5: Lignite & Nuclear – Driven by lower realised generation margins
Lignite & Nuclear – Driven by lower realised generation margins Key financials H1 2017 versus H1 2016: H1 H1 Lower realised generation margins € million 2017 2016 change Lower income at Mátra and classification as asset held for sale as of Q2 2017; i.e. earnings contribution Adj. EBITDA 401 471 -70
Slide 6: European Power – Lower earnings due to absence of non-recurring items
European Power – Lower earnings due to absence of non-recurring items Key financials H1 2017 versus H1 2016: H1 H1 Absence of positive non-recurring items in 2016 € million 2017 2016 change Lower realised hard coal generation margins UK 135 187 -52 Higher realised gas generation margins Significantl
Slide 7: Hedging – Improved average hedge prices as a result of our implicit fuel hedge strategy
Hedging – Improved average hedge prices as a result of our implicit fuel hedge strategy Expected positions and hedge status as of 30 June 2017 Outright ~31 ~27 ~27 ~28 (Lignite & ~100 TWh 85 – 90 TWh 80 – 85 TWh 80 – 85 TWh Nuclear) >90% >90% >90% >70% 2017E 2018E 2019E 2020E Change to reporte
Slide 8: Significant improvement of fuel spreads since March 2017
Significant improvement of fuel spreads since March 2017 Development of German fuel spreads1 5 4 3 2 €/MWh 1 0 -1 -2 -3 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 Cal16 Cal17 Cal18 Cal19 Cal20 1 Fuel spread defined as: Power pri
Slide 9: Supply & Trading – Positive earnings development due to a return to normalised trading result
Supply & Trading – Positive earnings development due to a return to normalised trading result Key financials H1 2017 versus H1 2016: H1 H1 Normalised trading result after losses in 2016 € million 2017 2016 change Adjustment of long-term gas storage contracts to market prices in Q2 2016 (non-recurrin
Slide 10: Adjusted net income H1 2017 reaches €0.9 billion
Adjusted net income H1 2017 reaches €0.9 billion Group RWE stand-alone (€ million) > All effects related to the reimburse- ment of the nuclear fuel tax are 3,213 Adj. EBITDA 1,438 adjusted Adj. depreciation -295 > RWE stand-alone adj. EBITDA -1,009 includes operating income from Lignite & Nuclear, E
Slide 11: High H1 2017 distributable cash flow due to full amount of innogy dividend in Q2 2017
High H1 2017 distributable cash flow due to full amount of innogy dividend in Q2 2017 RWE stand-alone1 (€ million) > innogy dividend of €683 million fully reflected in Adj. EBITDA Adj. EBITDA 1,438 > Changes in provisions Change in provisions & -748 other non-cash items – Utilisation of CO2 provisio
Slide 12: Strong decline of net debt due to positive DCF, nuclear fuel tax refund and reduction of provisions
Strong decline of net debt due to positive DCF, nuclear fuel tax refund and reduction of provisions Development of net debt (RWE stand-alone) (€ million) 6,858 -636 5 -128 -1,444 -559 171 4,267 Net debt Distributable Dividend Financial Other Change in Change in Net debt 31 Dec 2016 cash flow RWE AG
Slide 13: RWE stand-alone – Outlook for 2017 confirmed
RWE stand-alone – Outlook for 2017 confirmed 2016 2017 €1.6 bn – €1.9 bn Adjusted EBITDA €1.9 bn -€0.9 bn Adj. depreciation > Reduction by ~€0.3 bn from impairments > Reduction in interest accretion to provisions (€0.4 – 0.5 bn) -€1.0 bn Adj. net financial result > Lower losses from sale of securiti
Slide 14: Appendix
Appendix RWE AG | H1 2017 Conference Call | 14 August 2017 14
Slide 15: Reconciliation to H1 2017 adjusted net income
Reconciliation to H1 2017 adjusted net income (€ million) RWE stand-alone RWE Group Reported Adjustments Adjusted Reported Adjustments Adjusted Adjusted EBITDA 1,438 - 1,438 3,213 - 3,213 Depreciation -295 - -295 -1,009 - -1,009 Adjusted EBIT 1,143 - 1,143 2,204 - 2,204 Non-operating result 1,500 -1
Slide 16: RWE Group: Outlook for 2017 confirmed – Divisional outlook for European Power improved
RWE Group: Outlook for 2017 confirmed – Divisional outlook for European Power improved Actuals 2016 2017 forecast1 Change to previous outlook (€ million) Adjusted 5,403 5,400 – 5,700 EBITDA 1,079 Lignite & Nuclear Significantly below 2016 377 European Power Significantly above 2016 -139 Supply & T
Slide 17: Income statement H1 2017
Income statement H1 2017 (€ million) RWE stand-alone RWE Group Revenue (including natural gas tax/electricity tax) 8,486 23,321 Natural gas tax/electricity tax -67 -1,148 Revenue 8,419 22,173 Other operating result 1,723 1,110 Cost of materials -6,762 -15,999 Staff costs -866 -2,328 Depreciation, am
Slide 18: Balance sheet as at 30 June 2017
Balance sheet as at 30 June 2017 (€ million) RWE stand-alone RWE Group Assets Intangible assets 1,040 12,727 Property, plant and equipment 6,395 24,112 Investment property 41 55 Investments accounted for using the equity method 608 2,895 Other financial assets1 15,171 1,099 Inventories 1,351 1,804 F
Slide 19: Net debt as at 30 June 2017
Net debt as at 30 June 2017 (€ million) RWE stand-alone RWE Group Cash and cash equivalents 9,978 10,904 Marketable securities 2,943 5,278 Other financial assets 4,623 1,251 t/o financial receivables against innogy 3,634 - Financial assets 17,544 17,433 Bonds, other notes payable, bank debt, commerc
Slide 20: RWE Group net debt improved due to positive cash flow and change in provisions
RWE Group net debt improved due to positive cash flow and change in provisions Development of net debt (RWE Group) (€ billion) 22.7 -1.7 +0.6 +0.6 -0.8 0.1 21.5 Net debt Cash flows Capex on Dividends Changes Others Net debt 31 Dec 2016 from opera- property, plant incl. in pension, including 30 June
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 45 100 40 90 NL 35 80 30 70 UK Germany 60 25 20 50 15 40 Jan'15 Jul'15 Jan'16 Jul'16 Jan'17 Jul'17 Jan'15 Jul'15 Jan'16 Jul'16 Jan'17 Jul'17 Coal prices – API2
Slide 22: Clean Dark and Spark Spreads – 2015 - 2018 forwards for Germany, UK and NL
Clean Dark (CDS) and Spark Spreads (CSS) – 2015 - 2018 forwards for Germany, UK and NL1 Germany UK2 Netherlands Cal15 Cal16 Cal17 Cal18 Cal15 Cal16 Cal17 Cal18 Cal15 Cal16 Cal17 Cal18 €/MWh €/MWh 20 20 Ø16.97 15 15 Ø10.52 Ø11.21 10 10 Ø6.63 Ø7.13 Ø9.18 Ø7.02 Ø5.80 5 Ø4.83 Ø4.73 Ø5.16 5 Ø5.59 Ø3.10 Ø
Slide 23: RWE Investor Relations – contacts
RWE Investor Relations – contacts Important Links Contacts for Institutional Investors & Financial Analysts Annual and Interim Reports http://www.rwe.com/ir/reports/ Gunhild Grieve Lenka Zikmundova Head of Investor Relations Tel.: +49 201 5179-3116 Investor and Analyst Conferences Tel. +49 201 5179-
Slide 24: POWERING. RELIABLE. FUTURE.
POWERING. RELIABLE. FUTURE. ED” AK =