Rwe Ag · XETR:RWE
Rwe — Q3 2009 Earnings Presentation
29 slides from Rwe's earnings presentation, Nov 12, 2009
Slide 1: Investor and Analyst Conference Call Q1-Q3 2009
Investor and Analyst Conference Call Q1-Q3 2009 Essen, November 12, 2009 Rolf Pohlig Chief Financial Officer Ingo Alphéus Vice President Investor Relations
Slide 2: Forward Looking Statement
Forward Looking Statement This presentation contains certain forward-looking statements within the meaning of the US federal securities laws. Especially all of the following statements: Projections of revenues, income, earnings per share, capital expenditures, dividends, capital structure or other
Slide 3: Key messages
Key messages Performance > Operating result decreased by 4% Q1-Q3 2009 > Recurrent net income down by 7% Strategy > Essent acquisition closed: EPZ carved out for the time being; sale of Essent’s stake in Stadtwerke Bremen closed in October > Stake in American Water sold down to 23.5% > No binding bi
Slide 4: RWE Group key performance indicators
RWE Group key performance indicators January – September change € million 2009 2008 in % External revenue 33,769 34,454 -2.0 Cash flows from operating activities 4,126 4,349 -5.1 EBITDA 6,966 7,189 -3.1 Operating result 5,534 5,788 -4.4 Non-operating result 219 -506 - Financial result -1,438 -1,019
Slide 5: Performance of RWE Power
Performance of RWE Power Q1-Q3 operating result: +4.0% € million + Higher realised electricity prices and lower volumes (+€320 2,785 million) including margin impact from Biblis outage (-€710 2,678 million) Increased costs due to higher fuel prices (-€330 million) + Lower costs for CO2 certificates
Slide 6: Early hedging protects us from recession and allows flexible short-term optimisation
Early hedging protects us from recession and allows flexible short-term optimisation Forward selling of RWE Power in the German market (base load forwards in €/MWh) 100 90 Forward 2009 80 70 60 50 40 >> 10% 10% sold sold >> 20% 20% sold sold >> 25% 25% sold sold >> 35% 35% sold sold >> 65% 65% sold
Slide 7: Impact of economic crisis in our core markets
Impact of economic crisis in our core markets Electricity January – Forecast ¾ BDEW statistic shows higher percentage levels of demand September 2009 2009 decline for the summer quarters (April to Market data1 September) mainly due to a basis effect (overall > Germany -7% -5% to -7% lower demand in
Slide 8: Performance of RWE Innogy
Performance of RWE Innogy Q1-Q3 operating result: -40.0% € million 50 Upfront costs of large investment programme Higher staff costs 30 + First time consolidation of Urvasco Energía in June 2008 2008 2009 Full year 2009 guidance: Operating result below previous year € million Upfront costs of large
Slide 9: Performance of RWE Dea
Performance of RWE Dea Q1-Q3 operating result: -64.9% € million 436 Slump in oil prices leads to significant reduction of average realised oil price (incl. hedging) Slightly higher realised gas prices offset by negative volume 153 effects in UK gas production 2008 2009 Full year 2009 guidance: Opera
Slide 10: Performance of RWE Supply & Trading
Performance of RWE Supply & Trading Q1-Q3 operating result: +100% € million + Trading 760 Good marked-to-market performance of trading although lower than the extraordinarily positive Q1-Q3 2008; Reported IFRS numbers significantly benefited from 380 realisation of transactions concluded in earlier
Slide 11: Performance of RWE Energy
Performance of RWE Energy Q1-Q3 operating result: +0.4% € million German regions; Benefits from efficiency enhancements and 1,796 1,804 improved gas sales business. Lower electricity margins International regions: Negative earnings impact in Dutch business, lower electricity sales in Hungary and gas
Slide 12: Performance of RWE npower
Performance of RWE npower Q1-Q3 operating result: -61.2% € million Negative f/x effects of -€20 million 379 Power generation: Reduced generation spreads and less opportunity to generate income on the short-term market 147 Retail: Impact of electricity price reduction and lower volume Higher costs fo
Slide 13: Non-operating result
Non-operating result January – September Change € million 2009 2008 (absolute) Capital gains 29 47 -18 Impairment losses - - - Restructuring / other 190 -553 743 Total 219 -506 725 ¾ Capital gains: No major capital gains in 2009. In 2008 mainly income from sale of 8% stake in rhenag to RheinEnergie
Slide 14: Financial result
Financial result January – September Change € million 2009 2008 (absolute) Net interest -429 -36 -393 Interest accretion to non-current -676 -561 -115 provisions Other financial result -333 -422 89 Total -1,438 -1,019 -419 ¾ Net interest: declined because of higher debt mainly used to refinance the
Slide 15: Cash flow statement
Cash flow statement January – September Change € million 2009 2008 (absolute) Funds from operations (FFO) 3,919 5,525 -1,606 Changes in working capital 207 -1,176 +1,383 Cash flows from operating activities 4,126 4,349 -223 Capex on fixed assets -3,701 -2,525 -1,176 Free cash flow 425 1,824 -1,399 ¾
Slide 16: Outlook
Outlook 2009 Essent 2008 forecast contribution € million (excl. Essent) in Q4 External revenue 48,950 Below last year + c€1.5 bn EBITDA 8,773 In the order of last year’s level + c€150 m Operating result 6,826 In the order of last year’s level + c€100 m Recurrent net income 3,367 In the order of last
Slide 17: Back-up Charts
Back-up Charts RWE AG | Conference Call Q1-Q3 2009 | November 12, 2009 17
Slide 18: RWE Group electricity production
RWE Group electricity production January – September Other Total Total in TWh Germany UK Internat. 2009 2008 Lignite 48.3 4.2 52.5 55.1 Nuclear 25.1 25.1 37.1 Hard coal 21.9 7.2 0.3 29.4 45.7 thereof contracts 10.5 10.5 22.1 Gas 8,2 11.0 0.1 19.3 24.5 Renewable energies 2.8 0.7 0.6 4.1 4.0 thereof c
Slide 19: RWE Group electricity sales volume
RWE Group electricity sales volume January – September Total Total in TWh Germany UK Poland Hungary Other 2009 2008 Private and commercial 19.1 14.6 1.8 4.6 0.5 40.6 42.2 customers Industrial and corporate 43.2 22.0 3.0 4.3 0.7 73.2 75.6 customers Distributors 63.9 0.7 3.9 0.7 69.2 65.3 Subtotal 126
Slide 20: RWE Group gas sales volume
RWE Group gas sales volume January – September Czech Total Total in TWh Germany Rep. UK Other 2009 2008 Private and commercial 16.5 21.6 30.1 6.8 75.0 73.9 customers Industrial and corporate 30.7 17.3 5.11 17.3 70.4 78.4 customers Distributors 51.3 11.9 - - 63.2 73.6 Total 98.5 50.8 35.2 24.1 208.6
Slide 21: Germany: Clean Dark Spread versus hard coal and CO2 prices
Germany: Clean Dark Spread (CDS) versus hard coal and CO2 prices 160 40 Forward 2009 120 30 80 20 40 10 0 0 160 40 Forward 2010 120 30 80 20 40 10 0 0 160 40 Forward 2011 120 30 80 20 40 10 0 0 160 40 Forward 2012 120 30 80 20 40 10 0 0 01.01.2007 01.07.2007 01.01.2008 01.07.2008 01.01.2009 01.07.20
Slide 22: Germany: Clean Spark Spread versus natural gas and CO2 prices
Germany: Clean Spark Spread (CSS) versus natural gas and CO2 prices 50 50 Forward 2009 40 40 30 30 20 20 10 10 0 0 50 50 Forward 2010 40 40 30 30 20 20 10 10 0 0 50 50 Forward 2011 40 40 30 30 20 20 10 10 0 0 50 50 Forward 2012 40 40 30 30 20 20 10 10 0 0 01.01.2007 01.07.2007 01.01.2008 01.07.2008
Slide 23: UK: Clean Dark Spread versus hard coal and CO2 prices
UK: Clean Dark Spread (CDS) versus hard coal and CO2 prices 150 50 Forward 2009 120 40 90 30 60 20 30 10 0 0 150 50 Forward 2010 120 40 90 30 60 20 30 10 0 0 150 50 Forward 2011 120 40 90 30 60 20 30 10 0 0 150 50 Forward 2012 120 40 90 30 60 20 30 10 0 0 01.01.2007 01.07.2007 01.01.2008 01.07.2008
Slide 24: UK: Clean Spark Spread versus natural gas and CO2 prices
UK: Clean Spark Spread (CSS) versus natural gas and CO2 prices 50 50 Forward 2009 40 40 30 30 20 20 10 10 0 0 50 50 Forward 2010 40 40 30 30 20 20 10 10 0 0 50 50 Forward 2011 40 40 30 30 20 20 10 10 0 0 50 50 Forward 2012 40 40 30 NBP quotes for 30 20 2012 not yet 20 available 10 10 0 0 01.01.2007
Slide 25: Customer statistic of RWE Energy in Germany and RWE npower
Customer statistic1 of RWE Energy in Germany and RWE npower RWE Energy (Germany) Electricity Gas Total Total customers accounts 31.12.2008 6,983,000 1,035,000 8,018,000 Net losses / gains +58,000 +37,000 +95,000 Total customers accounts 30.09.2009 7,041,000 1,072,000 8,113,000 RWE npower (UK) Electr
Slide 26: Development of net debt
Development of net debt € billion Capex Dividends Acquisitions/ Cash flows Others Change in disposals/ from including pension, (de)consoli- operating f/x effects nuclear, dations activities DCO mining provisions 30 +4.0 -4.1 +0.7 25.7 +0.1 25 +2.6 20 +3.7 18.7 15 Including DCO1: 4.2 0 Net Net debt d
Slide 27: Financial liabilities and assets: Solid financing in place
Financial liabilities and assets: Solid financing in place (as of 30.09.2009) Financial liabilities in billion Euros Financial assets in billion Euros Split of securities 25 20 22.1 20 4.4 15 16.9 0.6 0.7 0.7 12.2 0.4 11.6 16% 15 1.1 0.8 10 3.3 3.3 10 16.4 1.7 1.7 15.8 84% 5.2 5 5 3.7 5.8 6.1 0.6 0.
Slide 28: Gross financial debt currency and interest exposure
Gross financial debt currency and interest exposure1 Others 4% Floating 13% £ 30% USD 6% Fixed 87% € 60% As of September 30, 2009 1 Including cross-currency swaps. RWE AG | Conference Call Q1-Q3 2009 | November 12, 2009 28
Slide 29: We maintain a high level of liquidity
We maintain a high level of liquidity Capital market debt maturities1 Strong sources of financing 2.5 20 in € bn Fully committed for liquidity syndicated loan back-up 2.0 16 (€4.0bn up to Oct. 2011) €0.0 bn 1.5 12 1.0 8 Commercial paper €3.6 bn ($5.0 bn) (up to 1 year) 0.5 4 €1.5 bn (31.10.09) 0.0 0