Enbw Energie Baden-wuerttemberg Ag · XETR:EBK
Enbw Energie Baden-wuerttemberg — EnBW Energie Baden-Württemberg — Investor Day (October 2018)
65 slides from Enbw Energie Baden-wuerttemberg's investor day presentation, Oct 17, 2018
Slide 1: Capital Markets Day 2018
Capital Markets Day 2018 » Stuttgart, 17 October 2018
Slide 2: Today's topics
Today’s topics Thomas Kusterer, CFO: Financial discipline linked to an evolving corporate strategy and a challenging capital markets environment Frank Mastiaux, CEO: EnBW Strategic Roadmap: Status and a look ahead. Lothar Rieth, Group Expert Sustainability: Sustainability as an integral part of the
Slide 3: Thomas Kusterer, CFO: Financial discipline and capital markets environment
Thomas Kusterer, Erneuerbare Energien CFO Financial discipline linked to Top-Entwickler und Treiber des an evolving corporate strategy Ausbaus Wind, Onshore und and a challenging Offshore capital markets environment EnBW Capital Markets Day 2018 3
Slide 4: Sustainable capital markets player with focus on debt capital markets
Sustainable capital markets player with focus on debt capital markets Permanent access to debt capital markets necessary Permanent investor dialogue to underline capital markets positioning EnBW Capital Markets Day 2018 High financial gearing 4
Slide 5: Strong creditworthiness is based on EnBW's conservative financial policy
Strong creditworthiness is based on EnBW’s conservative financial policy EnBW Capital Markets Day 2018 5
Slide 6: Evolution of corporate strategy requires development of KPIs
Evolution of corporate strategy requires development of KPIs in order to manage financial discipline Regaining corporate Regaining financial Further profitable health strength growth 2014 2016 2018 2020 2022 2024 EnBW Capital Markets Day 2018 Dynamic Internal financing capability Beyond leverage rat
Slide 7: Strategy 2020 to manage the portfolio transformation
Strategy 2020 to manage the portfolio transformation necessary due to Energiewende 2012 2020 Generation and Trading 1.2 -80% 0.3 Renewable Energies 0.2 +250% 0.7 Grids 0.8 +25% 1.0 EnBW Capital Markets Day 2018 Sales 0.2 +100% 0.4 Adjusted EBITDA in € bn 2.4 2.4 7
Slide 8: Accounting effects from low-interest rate environment
Accounting effects resulting from low-interest rate environment at high level Interest rate KFK EnBW Capital Markets Day 2018 8
Slide 9: Further investments limited to internal resources only
Further investments to implement 2020 Strategy limited to internal resources only By managing the level of net financial debt EnBW maintains high level EnBW Capital Markets Day 2018 of financial discipline 9
Slide 10: Stick to financial discipline in a phase of growth
Stick to financial discipline in a phase of “growth” Allocation of investment spending 2021 - 2025 Smart infrastructure for customers Existing business Sustainable activities power 14% 20 % infrastructure 33% €12 bn1 €12 bn1 80 % 53% System-critical Growth infrastructure EnBW Capital Markets Day 201
Slide 11: Further evolution in KPI mechanism will be required
Further evolution in KPI mechanism will be required Internal financing capability: FFO - Dividends paid = RCF Economic debt: Net debt relating Net debt = Net financial debt + to pension and nuclear obligations = New Debt KPI EnBW Capital Markets Day 2018 repayment Of at least 16% until 2025 will sup
Slide 12: Evolution of corporate strategy and financial policy are closely linked
Evolution of corporate strategy and financial policy are closely linked › KPI mechanisms are adopted accordingly to meet future challenges EnBW maintains its A ratings › Creditworthiness plays a central role in defining strategy Long-term rating: A3 Outlook: stable › We deliver what we promise › Str
Slide 13: Frank Mastiaux, CEO: EnBW Strategic Roadmap
Erneuerbare Energien Frank Mastiaux, CEO Top-Entwickler und Treiber des EnBW Strategic Roadmap: Ausbaus Wind, Onshore und Status Offshoreand a look ahead. EnBW Capital Markets Day 2018 13
Slide 14: Our business environment and our strategic response
Our business environment and our strategic response Phase 1 Phase 2 Increasingly market-driven: The energy Mainly driven by energy cost efficiency gains, technical market policy and regulation innovation, changing customer needs, changing competitive landscape EnBW 2020 EnBW 2025 Our strategic roadm
Slide 15: Group restructuring and renewal continues according to plan
Group restructuring and renewal continues according to plan Phase 1 2012 2020 Mainly driven by energy Generation and 1.2 -80% 0.3 policy and regulation Trading € bn € bn Renewable 0.7 Expansion of renewable energies Energies 0.2 +250% € bn € bn Exit from nuclear power Grids 0.8 +25% 1.0 € bn € bn De
Slide 16: Development of energy industry and energy policy environment
Development of energy industry and energy policy environment in line with strategic assumptions Energy › Current CO2 price development leads to rising electricity prices on wholesale market, business opportunity for renewable energies, hard coal still under pressure environment › Competitive environ
Slide 17: Implementation of EnBW 2020 strategy (I)
Implementation of EnBW 2020 strategy (I) Decarbonisation: Nuclear energy: Shareholding in VNG: 9 power plant blocks in reserve/ Fourth and last decom- Completion of the sale of VNG Retrofit at Gaisburg (coal to gas) missioning permit Obrigheim/ Norge Future approvals planned with 1-2 steps Offshore
Slide 18: Implementation of strategy EnBW 2020 (II)
Implementation of strategy EnBW 2020 (II) E-mobility: Distributed energy: Performance and Customer-facing Leading position in DC Entry into PV and efficiency: business: based charging home storage market Realignment of Stabilisation of the with acquisition of process and system B2C contract portfoli
Slide 19: Heading towards target achievement in 2020: financial turnaround in 2017
Heading towards target achievement in 2020: financial turnaround in 2017 Adjusted EBITDA in €bn Turn- around 2.5 2.40 ≥ 2,40 0% – +5%* 2.23 0% – +5% 2.17 2.11 2.11 2.0 1.94 EnBW Capital Markets Day 2018 2012 2013 2014 2015 2016 2017 2018 2019 2020 19 * according to forecast 2018
Slide 20: Forecast 2018: further increase in earnings targeted
Forecast 2018: further increase in earnings targeted Renewable Generation and Group Sales Grids Energies Trading 330 1,046 332 377 Adj. EBITDA 2017 in €m 2,113 Forecast 2018 0 to -5 to +5 to +10 to 0 to EnBW Capital Markets Day 2018 in % +5 -15 +15 +20 -10 20
Slide 21: A look ahead: strategic development towards 2025
A look ahead: strategic development towards 2025 Phase 1 Phase 2 Increasingly market-driven: Mainly driven by energy cost efficiency gains, technical policy and regulation innovation, changing customer needs, changing competitive landscape Increased competitiveness and market Expansion of renewable
Slide 22: Core competence meets future market for critical infrastructure
Reminder: Core competence meets future market for critical infrastructure German infrastructure market* in €bn EnBW core competence 150 Safe and reliable 100 in the planning, Neue construction and Geschäftsfelder operation über of Energie complex hinaus +50% infrastructures EnBW Capital Markets Day
Slide 23: Implementation of EnBW 2020 towards 2025: three strategic areas
Reminder: Implementation of EnBW 2020 towards 2025: balanced portfolio with three strategic areas 2020 2025 Sustainable power Generation & Trading infrastructure Renewable Energies System-critical Grids infrastructure EnBW Capital Markets Day 2018 Smart infrastructure Sales for the customer €2.4 bn
Slide 24: Strategic implementation of EnBW 2025 (I)
Strategic implementation of EnBW 2025 (I) E-mobility Broadband Security infrastructure › Leading position in DC based › 15 percent growth rate › Piloted security solutions for charging › 7 new local municipalities added in public spaces › Half of the planned 1000 quick 2018 › AI solutions for hazard
Slide 25: Strategic implementation of EnBW 2025 (II)
Strategic implementation of EnBW 2025 (II) Corporate early stage Corporate late stage New ventures › AI for better road conditions › From hardware to data and › Delivers real-time parking data to › Real-time monitoring of road services simplify parking management condition via sensors › E-mobility,
Slide 26: Summary
Summary › EnBW on plan to meet 2020 strategic targets › New phase of energy market development has already started › First steps towards EnBW 2025 strategy taken successfully EnBW Capital Markets Day 2018 26
Slide 27: Questions & Answers
Questions & Answers 27
Slide 28: Lothar Rieth: Sustainability as an integral part of the strategy
Erneuerbare Lothar Rieth,Energien Top-Entwickler und Treiber des Group Expert Sustainability Ausbaus Wind, Onshore und Sustainability as an integral part Offshore of the strategy EnBW Capital Markets Day 2018 28
Slide 29: Sustainability as an integral part of the corporate strategy
Sustainability as an integral part of the corporate strategy »
Slide 30: Conversion of EnBW into a sustainable and innovative infrastructure partner
Conversion of EnBW into a sustainable and innovative infrastructure partner Our understanding of sustainability Creation of economic as well as ecological and social added value for our customers, shareholders, employees, partners and society as a whole - today and in the future. “We associate susta
Slide 31: Agenda
Agenda 1 Integrating sustainability at EnBW 2 Selected sustainability issues - Group and core business EnBW Capital Markets Day 2018 3 Reporting 31
Slide 32: Organisational and strategic anchoring of sustainability at EnBW
Organisational and strategic anchoring of sustainability at EnBW Organisation Strategic Approach F F P T Strategy Thomas Thomas Bernhard Hans-Josef Sustain- Stakeholder- Action- Disclo- Kusterer Kusterer Beck Zimmer ability Targets Expectations plan sures Concept ESG-Ratings … … … … … … … … …
Slide 33: Performance management system includes non-financial KPIs and targets
EnBW’s performance management system includes non-financial key performance indicators and targets Non-financial key performance indicators and targets 1. Customers and society goal dimension 2016 2017 Trend 2020 » Reputation Index 50.0 52.1 55.4 132/ 143/ >136/ » EnBW/Yello Customer Satisfaction In
Slide 34: TOP KPI CO2 intensity: EnBW is committed to Energy Transition
TOP KPI CO2 intensity: EnBW is committed to Energy Transition (“Energiewende”) › EnBW’s long-term strategy is in line with the Paris Agreement and the goals of the EU and the German government CO2 intensity EnBW Goal EnBW: in g/kWh Reduction of EnBW Group CO2 intensity by › EnBW has introduced a TOP
Slide 35: Agenda
Agenda 1 Integrating sustainability at EnBW 2 Selected sustainability issues - Group and core business EnBW Capital Markets Day 2018 3 Reporting 35
Slide 36: Sustainability in the core business – Sustainable power infrastructure
Sustainability in the core business – Sustainable power infrastructure Examples Relevance of sustainability Economic aspects › Investment in sustainable business models Hohe See and Albatros under › Active shaping of decarbonisation in relation to coal-based construction conventional generation Envi
Slide 37: Sustainability in the core business – System-critical infrastructure
Sustainability in the core business – System-critical infrastructure Examples Relevance of sustainability Economic aspects › Maintaining supply reliability in Baden-Württemberg “Ultranet” and – reliable energy supply for the economy and health care “SuedLink” (trans- mission grid) Environmental aspe
Slide 38: Sustainability in the core business – Smart infrastructure for the customer
Sustainability in the core business – Smart infrastructure for the customer Examples Relevance of sustainability Economic aspects › Contributes to the success of the mobility shift E-mobility: Char- ging stations, EnBW › Contributes to economic attractiveness of industrial zones and mobility app etc
Slide 39: Group-wide sustainability highlights focusing on employees
Selected group-wide sustainability highlights focusing on the most relevant resource – our employees „Mobility & Staff“ „Diversity & Staff “ „Transformation & Staff“ » Project „New Mobility“ (mobility » Motto: “Diversity generates added Selected Events across EnBW: solutions for employees) value” »
Slide 40: Agenda
Agenda 1 Integrating sustainability at EnBW 2 Selected sustainability issues - Group and core business EnBW Capital Markets Day 2018 3 Reporting 40
Slide 41: Evolutionary development of EnBW's annual corporate reporting
Evolutionary development of EnBW‘s annual corporate reporting – being a driving force in international initiatives Integrated Annual Report TEG EU Technical Expert Group on Sustainable Finance TCFD 2018 Task Force on Climate- related Financial Disclosures 2015 IIRC GRI - Reporting International Inte
Slide 42: Regular external evaluation by sustainability rating agencies
Regular external evaluation by sustainability rating agencies – far above average score ISS-Oekom Sustainalytics Carbon Disclosure Ecovadis Project 73/ 48/ B- 2017 100 2018 A- 2017 100 2018 EnBW Capital Markets Day 2018 ✓ Prime Status ✓ Outperformer ✓ Leadership ✓ Silver Recognition Level 42
Slide 43: Sustainable finance: EnBW has published Green Financing Framework
Sustainable finance – towards a new paradigm? EnBW has published Green Financing Framework Why Sustainable Finance? Publication of EnBW‘s Green Financing Framework » Financing of green » The net proceeds of future green financing instruments will be used to investments in line with EnBW finance or r
Slide 44: Contribution of EnBW to Sustainable Development Goals (SDGs)
Contribution of EnBW to Sustainable Development Goals (SDGs) Relevant SDGs for EnBW Selected business activities Further SDGs: » Construction/operation of renewable energies » Development of smart grids » ... » Expansion of E-mobility » Further expansion of broadband networks » … » Smart city soluti
Slide 45: Looking ahead – possible next sustainability actions
Looking ahead – possible next sustainability actions Social urban infrastructure Sustainable operational mobility Sustainable Finance “EnBW cafeteria of EnBW Capital Markets Day 2018 tomorrow - sustainable, creative and healthy” 45
Slide 46: Georgios Stamatelopoulos: Sustainable generation at EnBW
Erneuerbare Energien Georgios Stamatelopoulos, Top-Entwickler und Treiber des Senior Vice President Generation Ausbaus Wind, Onshore und Sustainable generation at EnBW Offshore EnBW Capital Markets Day 2018 46
Slide 47: Table of contents
Table of contents ➢ Overview EnBW´s Generation Portfolio ➢ Challenges linked with the conventional generation ➢ Challenges linked with the renewables generation ➢ Dominating Trends: Decarbonisation, Digitalisation, Security (of Supply) EnBW Capital Markets Day 2018 ➢ Way forward for a sustainable ge
Slide 48: Overview over EnBW's Generation Portfolio
Overview over EnBW´s Generation Portfolio Renewable and conventional generation Power generation [gross values]: Hard coal Offshore › Installed output: 3,848 MW › Installed output: 336.3 MW › 5 sites › 2 wind farms Gas/Oil Onshore › Installed output: 1,282 MW › Installed output: 492 MW › 5 sites › 4
Slide 49: Climate protection goals for the energy sector
Challenges linked with the conventional generation Climate protection goals for the energy sector Greenhouse gas emissions for the energy industry [in m t CO2 equivalent] 465 › Two main reasons for target achievement in the energy sector: -40% -61% ? 342 › Decommissioning of hard coal power plants 3
Slide 50: EnBW's contribution to the climate protection goals
Challenges linked with the conventional generation EnBW’s contribution to the climate protection goals CO2 intensity of in-house electricity generation Explanations (without nuclear generation) › The CO2 intensity of the in-house generation 650 decreases despite the compensation of the target corrid
Slide 51: Development of wholesale prices in Germany
Challenges linked with the conventional generation Development of wholesale prices in Germany Development of wholesale prices for electricity since 2011 In €/MWh 60 50 -61% 40 30 22.0 20 Feb 2016 2011 2012 2013 2014 2015 2016 2017 2018 Development of the Clean Dark Spread (Peak) since 2011 40 EnBW C
Slide 52: Economic efficiency and decommissioning of older plants
Challenges linked with the conventional generation Economic efficiency and decommissioning of older plants › Reduction of employees approx. -400 FTE Employee capacity reduction in the power plant field of EnBW 2015 2020 › Optimisation of availability and maintenance in €/hour 1,245 Cost reduction
Slide 53: EnBW's installed wind onshore and PV capacity
Challenges linked with the renewables generation EnBW’s installed wind onshore and PV capacity Wind Onshore PV 600 90 Leistungadditions Capacity Zubau in in MW MW Capacity Leistung additions in MW Zubau in MW 80 500 40 70 22 400 60 181 50 300 22 40 452 200 30 57 271 271 20 100 34 34 10 0 EnBW Capita
Slide 54: Outlook: Wind on- and offshore in Germany
Challenges linked with the renewables generation Outlook: Wind on- and offshore in Germany Onshore: New “BImSchG” permits 2500 Offshore: Extension p.a. (full year) Extension p.a. 2,289 (Target of EEG) (actual state) 9,177 2000 Ø 1,471 MW 1500 1,275 1000 Ø 620 MW 849 3,640 Target of growth 700 700 70
Slide 55: Renewables meet the market, e.g. Wind Offshore
Challenges linked with the renewables generation Renewables meet the market, e.g. Wind Offshore Competitive tendering 200 175 180 164 160 140 140 120 (€/MWh) 103 100 80 72.7 64.8 market prices 60 49.98 54.5 40 20 0 Walney Beatrice East Horns Rev Borssele Vesterhav Kriegers Borssele EnBW He EnBW Capi
Slide 56: New markets beyond Germany
Challenges linked with the renewables generation New markets beyond Germany Current wind offshore markets [GW] Upcoming wind offshore markets [GW] Europe 26.4 15.8 2017 2020 Asia USA 12.3 3.0 0.03 ? 2017 2020 2017 2020 EnBW Capital Markets Day 2018 56 Source: GWEC, Bloomberg Offshore Wind market out
Slide 57: New markets beyond Germany
Challenges linked with the renewables generation New markets beyond Germany EnBW business segments and markets in 2025 services for third parties Rational In-house generation portfolio › Engagement in new markets in neighboring European (onshore / offshore) countries and entering selective global ma
Slide 58: Dominating Trends: Decarbonisation
Dominating Trends Decarbonisation Objectives and key data › Improving efficiency by reducing maintenance and personnel costs as well as increasing the efficiency of electricity and heat generation › Improvement of climate protection and emissions › 5 hot water boilers (210 MWth) › Pressure-free heat
Slide 59: Dominating Trends: Digitalisation
Dominating Trends Digitalisation Initiatives for cost reduction: › Condition monitoring for the identification of emerging failures › Predictive Maintenance for estimation of future maintenance costs and planning of resources and budget › Savings through in-house operation (Baltic 1 since 2016) and
Slide 60: Security of supply – cold spell in Jan/Feb 2017
Dominating Trends Security of supply – cold spell in Jan/ Feb 2017 Temperature forecast of -9°K compared to long-time average: -> France, Italy and Belgium are announcing possible supply shortages. MWh 1.000.000 Low water and ice formation in the rivers: -> Restrictions in the generation of hydropow
Slide 61: Security of supply – An example from a realistic future
Dominating Trends Security of supply – An example from a realistic future Tuesday, 30.3.2027 Wednesday, 31.3.2027 Weather forecasts for today and for Weather forecast from the previous day not tomorrow are confirmed ... 15 m/s wind met (sudden weather change) ... only 5 m/s speed. wind speed Wind fa
Slide 62: Security of supply: What can be adjustable generation?
Dominating Trends Security of supply: What can be adjustable generation? 200 CONVENTIONAL 150 250 STORAGE TECHNOLOGY 100 300 Gas MW Pumped-storage 50 350 Coal ADJUSTABLE GENERATION Battery storage EnBW Capital Markets Day 2018 Biomass/ Biogas Bioenergy Green gases (H2, CH4) RENEWABLES 62
Slide 63: Way forward for a sustainable generation business
Way forward for a sustainable generation business Keep restructuring the conventional generation › Cost consolidation › Fuel switch to gas, or biomass › Flexibility of operation › Flexibility of response Realise the project pipeline in Renewables Optimisation of Renewables operation › Cost reduction
Slide 64: Questions & Answers
Questions & Answers 64
Slide 65: Important note
Important note Unless indicated otherwise, all data contained hereinafter refers to the By nature, future-oriented statements are subject to risks and EnBW group and is calculated according to IFRS. uncertainties that cannot be controlled or accurately predicted by EnBW. Actual events, future result
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