Slide 1: H1 2018 Results Presentation
H1 2018 Results Presentation Investor and Analyst Conference Call 14 August 2018 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 information currently available to the management. Forward-looking statements shall not be construed as a promi
Slide 3: Key messages of H1 2018
Key messages of H1 2018 ✔ Good first half of fiscal year 2018 – RWE stand-alone earnings outlook confirmed ✔ RWE Group figures and outlook amended after classification of innogy’s grid and retail businesses as ‘discontinued operations’ ✔ Transaction with E.ON well on track: agreement reached with in
Slide 4: 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) 1,130 H1 2017 1,438 > Lignite & Nuclear: Declining generation margins -234 Lignite & Nuclear -234 and lower volumes > European Power: Declining generation margins -26 E
Slide 5: Lignite & Nuclear – earnings driven by lower realised generation margins and volumes
Lignite & Nuclear – earnings driven by lower realised generation margins and volumes Key financials H1 2018 versus H1 2017: H1 H1 Lower realised generation margins € million 2018 2017 change Closure of Gundremmingen B nuclear unit Longer outages and higher overhaul costs Adj. EBITDA 167 401 -234 Ope
Slide 6: European Power – operational performance on a par with previous year's level
European Power – operational performance on a par with previous year’s level Key financials H1 2018 versus H1 2017: H1 H1 Lower realised generation margins € million 2018 2017 change Absence of positive one-offs (e.g. land sales) UK 99 135 -36 Earnings contribution from UK capacity market Operating
Slide 7: Hedging – stable average hedge prices
Hedging – stable average hedge prices Expected positions and hedge status as of 30 June 2018 Outright Average hedge price 2018 – 2021 corresponds with average hedged CO2 price in the range of ~€5 – 6/t1 (Lignite & Nuclear) ~28 ~28 ~29 ~29 85 – 90 TWh 80 – 85 TWh ~80 TWh ~80 TWh >90% >90% >90% >40% 2
Slide 8: Recovery of fuel spreads at the end of Q2 2018 after strong decline since end of 2017
Recovery of fuel spreads at the end of Q2 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 spre
Slide 9: Supply & Trading – Strong performance in Q2 2018
Supply & Trading – Strong performance in Q2 2018 Key financials H1 2018 versus H1 2017: H1 H1 Very good trading performance in Q2 2018 € million 2018 2017 change Good performance of gas and LNG business; however, earnings contribution below high previous year’s result Adj. EBITDA 101 131 -30 Value a
Slide 10: Adjusted net income for H1 2018 reaches €683 million
Adjusted net income for H1 2018 reaches €683 million H1 2017 RWE stand-alone H1 2018 (€ million) > RWE stand-alone adj. EBITDA includes 1,438 Adj. EBITDA 1,140 adj. EBITDA from Lignite & Nuclear, European Power, Supply & Trading and dividend from innogy -295 Adj. depreciation -270 > Financial result
Slide 11: High H1 2018 distributable cash flow due to full amount of innogy dividend
High H1 2018 distributable cash flow due to full amount of innogy dividend and cyclical working capital development H1 2017 RWE stand-alone H1 2018 (€ million) > innogy dividend of €683 million (FY 2017: 1,438 Adj. EBITDA 1,140 €683 million) fully reflected in adj. EBITDA Change in provisions & > Ch
Slide 12: 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 -829 922 9 -1,394 494 -19 3,693 Net debt Distributable Dividend Financial Other Change in Change in Net debt 31 Dec 2017 cash flow RWE AG investments/ changes in provisions
Slide 13: RWE stand-alone – outlook for 2018 confirmed
RWE stand-alone – outlook for 2018 confirmed FY 2017 FY 2018e €1.4 bn – €2.1 bn Adj. EBITDA €1.7 bn -€0.6 bn Adj. depreciation > Stable development expected > Significant improvement after redemption and buy back of hybrids in -€0.4 bn Adj. net financial result 2017 and impact from settlement of nuc
Slide 14: RWE Group: Amended outlook for 2018 after classification of innogy's grid and retail businesses as DCO
RWE Group: Amended outlook for 2018 after classification of innogy’s grid and retail businesses as DCO1 (€ million) Actuals 2017 2018 forecast Adjusted EBITDA 2,149 1,500 – 1,800 671 Lignite & Nuclear 350 – 450 463 European Power 300 – 400 271 Supply & Trading 100 – 300 785 innogy – continuing 700 –
Slide 15: Appendix
Appendix RWE AG | H1 2018 Conference Call | 14 August 2018 Page 15
Slide 16: Reconciliation to adjusted net income
Reconciliation to adjusted net income RWE stand-alone H1 2018 H1 2017 change (€ million) Reported Adjustments Adjusted Adjusted Adjusted Adjusted EBITDA 1,140 - 1,140 1,438 -298 Depreciation -270 - -270 -295 25 Adjusted EBIT 870 - 870 1,143 -273 Non-operating result -226 226 - - - Financial result -
Slide 17: Income statement H1 2018
Income statement H1 2018 (€ million) RWE stand-alone RWE Group Revenue (including natural gas tax/electricity tax) 6,304 6,827 Natural gas tax/electricity tax -69 -69 Revenue 6,235 6,758 Other operating result 6 -16 Cost of materials -5,090 -5,138 Staff costs -895 -974 Depreciation, amortisation and
Slide 18: Balance sheet as at 30 June 2018
Balance sheet as at 30 June 2018 (€ million) RWE stand-alone RWE Group Assets Intangible assets 1,034 2,121 Property, plant and equipment 6,534 11,988 Investments accounted for using the equity method 655 1,406 Other financial assets1 15,937 365 Inventories 1,363 1,415 Financial receivables 2,990 1,
Slide 19: Net debt as at 30 June 2018
Net debt as at 30 June 2018 (€ million) RWE stand-alone RWE Group Cash and cash equivalents 3,037 3,253 Marketable securities 3,506 3,506 Other financial assets 2,970 1,337 t/o financial receivables against innogy 1,656 - Financial assets 9,513 8,096 Bonds, other notes payable, bank debt, commercial
Slide 20: Higher RWE Group net debt mainly due to increase in net debt of discontinued operations
Higher RWE Group net debt mainly due to increase in net debt of discontinued operations Development of net debt (RWE Group) (€ billion) 20.2 -1.9 +0.4 +1.0 +0.3 -0.1 +1.8 21.7 Net debt discontinued operations 16.3 Net debt continuing operations 5.4 Net debt Cash flows Capex on Dividends Change in Ch
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 80 60 UK NL 70 40 60 Germany 20 50 0 40 Aug'16 Feb'17 Aug'17 Feb'18 Aug'18 Aug'16 Feb'17 Aug'17 Feb'18 Aug'18 Coal prices – API2 Cal-ahead Gas prices – TTF Cal-
Slide 22: Clean Dark and Spark Spreads – 2016-2019 forwards for Germany, UK and NL
Clean Dark (CDS) and Spark Spreads (CSS) – 2016 - 2019 forwards for Germany, UK and NL1 Germany UK2 Netherlands Cal16 Cal17 Cal18 Cal19 Cal16 Cal17 Cal18 Cal19 Cal16 Cal17 Cal18 Cal19 €/MWh €/MWh 15 15 Ø11.21 Ø10.52 10 10 Ø7.13 Ø7.02 Ø5.35 Ø5.80 Ø5.59 Ø5.24 Ø4.57 Ø5.35 Ø3.58 5 5 Ø4.16 Ø4.83 Ø3.10 Ø2
Slide 23: Your contacts @RWE Investor Relations
Your contacts @RWE Investor Relations Important Links Financial Calendar Annual and Interim Reports 14 August 2018 http://www.rwe.com/ir/reports Interim report on the first half of 2018 Investor and Analyst Conferences 14 November 2018 http://www.rwe.com/ir/investor-and-analyst-conferences Interim s
Slide 24: Powering. Reliable. Future.
Powering. Reliable. Future. RWE