Rwe Ag · XETR:RWE
Rwe — Investor Day (November 2021)
52 slides from Rwe's investor day presentation, Nov 15, 2021
Slide 1: Growing Green: Capital Market Day 2021
GROWING GREEN Capital Market Day 2021 15 Nov 2021
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: Leading the way to a green energy world
Leading the way to a green energy world Markus Krebber Chief Executive Officer, RWE AG
Slide 4: Growing Green: Leading the way to a green energy world
Growing Green: Leading the way to a green energy world RWE is perfectly positioned: vast experience in green technologies, strong market presence in industrial growth markets, operating a leading commercial platform We significantly accelerate our green growth programme: €50bn gross / €30bn net cash
Slide 5: The future energy market is powered by green technologies
The future energy market is powered by green technologies
Slide 6: Our core business is leading the way to a green energy world
Our core business is leading the way to a green energy world Offshore Onshore Batteries & Hydrogen Commercial Wind Wind/Solar Flexible Solutions Generation Strongest growth in Biden Plan and RWE’s European Hydrogen is quickly Decarbonisation Europe, significant European Green core markets require ga
Slide 7: Perfectly positioned to succeed
Perfectly positioned to succeed Long-term Strong market Leading experience presence in commercial in relevant industrial platform to technologies countries with maximise at scale high growth value potential 15 Nov 2021 CMD 2021 Page 7
Slide 8: Raising the bar to accelerate the energy transition
Raising the bar to accelerate the energy transition Wind/Solar/Batteries Flexible Generation Hydrogen 2.5 GW per year Significant 1.5 GW growth in net per year capacity additions Ø GW per year, 2.1 pro rata 0.2 0.2 Ambition CMD 2020 Ambition CMD 2021 for 2019 – 2022 for 2021 – 2030 15 Nov 2021 CMD 2
Slide 9: €50bn gross investment programme to drive green growth
€50bn gross investment programme to drive green growth Green investment programme 2021 – 2030 ~€50bn +35 GW ~€30bn +25 GW Gross cash Net cash investments investments 15 Nov 2021 CMD 2021 Note: Capacity additions before decommissioning. Page 9
Slide 10: Powerful & green in 2030: Leading green energy company
Powerful & green in 2030: Leading green energy company 50 GW >95% 9% €5bn Green installed EBITDA from Annual average EBITDA net capacity in core business EBITDA growth Ambition 2030 as of 2023 in core business 2030 2021 – 2030 15 Nov 2021 CMD 2021 Page 10
Slide 11: Sustainability is at the heart of our strategy
Sustainability is at the heart of our strategy Reduction of carbon emissions Enhancement of biodiversity compared to 2012 by closing Recultivated over 23,000ha in the Rhenish down of coal-fired power generation mining area. With over 1,500 plants and 3,100 capacity, RWE targets in line with Paris cl
Slide 12: Stepping up our ambition in sustainability
Stepping up our ambition in sustainability Climate Change Biodiversity & Recultivation Environ- mental We will be climate neutral by 2040 . Because we care about the biodiversity impact Our ambitions of our business, we commit to the highest On the way there, our ambition is to reduce standards in r
Slide 13: Strong growth platform across all technologies
Strong growth platform across all technologies Secured offshore rights Powerful development pipeline of Europe green generation technologies 4.3 >55 GW 1.2 8 GW 8 1.6 0.8 0.4 0.5 11 GW 0.4 1.6 14 7.7 Additional offshore pipeline from 10 central tenders/lease auctions Americas 4 10 2.8 Expected 5.8 +
Slide 14: We are #2 offshore player globally with vast experience
Offshore wind We are #2 offshore player globally with vast experience in the business … in a market with enormous Very well positioned … investment opportunities Markets with RWE development activities Markets with operating RWE assets Almost 20 years in the offshore business 5 GW gross offshore win
Slide 15: Our offshore installed net capacity will triple by 2030
Offshore wind Our offshore installed net capacity will triple by 2030 Our offshore wind target, installed Growth until 2027 secured >3x 8 net capacity GW, pro rata 5 2.4 2020 2027e 2030e Good visibility Triton Knoll, 0.5 GW Sofia, 1.4 GW Secured rights >7 GW on capacity Kaskasi, 0.3 GW Baltic 2, 0.4
Slide 16: At the forefront of innovation in offshore wind
Offshore wind At the forefront of innovation in offshore wind Our offshore innovation projects … and go beyond conventional applications support our sustainability strategy … Recyclable blades Offshore hydrogen We are testing the We are part of the Aqua project family driving the world’s first recyc
Slide 17: Video: Sven Utermöhlen
Video Sven Utermöhlen CEO Wind Offshore, RWE Renewables
Slide 18: Strong presence in fast-growing onshore wind and solar markets
Onshore wind and solar Strong presence in the fast-growing onshore wind and solar markets in North America & Europe RWE installed RWE installed net capacity net capacity More than 20 years in the Onshore wind and solar business Powerful origination and Market growth in onshore wind development team
Slide 19: Ambitious onshore wind targets and steep solar growth
Onshore wind and solar Ambitious onshore wind targets and steep solar growth Our onshore wind and solar target, Solar Onshore wind installed net capacity GW, pro rata 20 GW 16 GW 8 Capacity 6 growth in 7 GW onshore wind and solar <1 12 10 7 2020 2027e 2030e 15 Nov 2021 CMD 2021 Page 19
Slide 20: Powerful onshore wind and solar development platform
Onshore wind and solar Powerful onshore wind and solar development platform Substantial pipeline growth Solar Onshore wind Strong since CMD 2020 origination from own development GW, pro rata +60% teams Complemented 24 GW by partnerships and pipeline 15 GW 10 enhancements 5 14 10 Development pipeline
Slide 21: Strong RWE footprint in markets with demand for batteries and flexible generation
Batteries & flexible generation Strong RWE footprint in markets with demand for batteries and flexible generation Market growth batteries and flexible generation, forecasted investments 2021 – 2030 We are a leading Utility-scale Flexible provider batteries generation of flexibility €80bn ~50% German
Slide 22: Balancing the system is a growth opportunity
Batteries & flexible generation Balancing the system is a growth opportunity 3 Our battery 2 Growth focus in & flexible <1 batteries is on co- Batteries location with wind generation 2020 2027e 2030e capacity, and solar sites installed net 17 16 17 Excellent position to 1 2 capacity build new gas pl
Slide 23: Ideally positioned for the hydrogen economy
Hydrogen Ideally positioned for the hydrogen economy Hydrogen market growth Strongest global growth Strong expertise along the value chain momentum in Europe Industrial demand centres located in RWE’s European core markets Renewable Logistics European energy (storage & transport) electrolyser capaci
Slide 24: Growth target backed by strong project pipeline
Hydrogen Growth target backed by strong project pipeline RWE’s hydrogen development pipeline RWE with market leading growth target in electrolyser capacity 10 GW Mostly early-stage pro rata development projects Requirements for electrolyser investments +2 • Regulatory and political Selected hydrogen
Slide 25: Video: Sopna Sury
Video Sopna Sury COO Hydrogen, RWE Generation
Slide 26: Our leading commercial platform provides customer solutions
Commercial solutions Our leading commercial platform provides customer solutions and optimises our own asset portfolio Industrial Partnerships Portfolio Management We develop We optimise our own asset partnerships to support Customer Solutions portfolio and offer 3rd party Green commodities the deca
Slide 27: We transform rapidly into a green energy company
We transform rapidly into a green energy company Installed net 54 GW capacity 42 GW 40 GW GW, pro rata 18 31 15 Wind/Solar/Batteries 17 Flexible generation/Hydrogen 24 19 Coal/Nuclear 8 4 2016 2023e 2030e Adj. EBITDA Core business €2.9bn – €5bn Coal/Nuclear €1.9bn ambition €3.3bn 44% 56% >95% <5% 10
Slide 28: Delivering growth and value
Delivering growth and value Michael Müller Chief Financial Officer, RWE AG
Slide 29: CFO priorities
Target attractive returns Ensure access to capital CFO priorities Strict risk management Create shareholder value 15 Nov 2021 CMD 2021 Page 29
Slide 30: We delivered on our promises: Value creation from investment decisions
We delivered on our promises: Value creation from investment decisions IRR targets met IRR of investment On track to deliver decisions capacity target since 9.5% Earnings guidance CMD 2020 exceeded/ incl. confirmed development CMD 2020 Ø IRR guidance costs of 6.5% 4.5% 15 Nov 2021 CMD 2021 Page 30
Slide 31: Strict investment criteria ensure attractive returns
Strict investment criteria ensure attractive returns IRR Investment decisions based requirements on strict hurdle rate Offshore wind approach with project IRR for future Global 5.0% 9.0% typically exceeding base investments WACC by 100 to 300 bps Hurdle rates include risk premia depending on Onshore
Slide 32: Video: Roger Miesen
Video Roger Miesen CEO, RWE Generation
Slide 33: We accelerate our growth investments to €3bn net annually
We accelerate our growth investments to €3bn net annually Share of gross cash investments: Ø €5bn p.a. Offshore wind + 20 Green investment Ø €3bn p.a. Onshore wind, solar and batteries programme 2021 – 2030 50 >90% 2021 – 2027 EU Taxonomy €bn + €21bn eligible 30 Flexible generation & hydrogen Gross
Slide 34: Strong annual EBITDA increase of 9% on average in core business
Strong annual EBITDA increase of 9% on average in core business From 2023 onwards Development of adj. EBITDA >95% of adj. RWE Group EBITDA RWE €bn 3.8 – 4.2 Group generated in core business 3.0 – 3.4 2.9 – 3.3 No book gains Coal/ considered Nuclear CAGR 2.15 – 2.55 +9% core business Core Note: 9% CA
Slide 35: Thriving bottom-line growth
Thriving bottom-line growth Development In 2021 adj. net of adj. net income RWE Group includes significant income earnings RWE Group 1,050 – 1,400 1,000 – 1,400 contribution from €m Coal/Nuclear Coal/ 700 – 1,100 Coal/Nuclear Nuclear earnings replaced by strong growth in 500 - 850 our core business
Slide 36: Stable and sustainable earnings profile
Stable and sustainable earnings profile Gross margin Gross margin split Gross margin split Wind/Solar Flexible generation 2021 – 2023 PPAs/Tax Credit Capacity payments/ Merchant 10% ancillary services 25% 12 30% Merchant 35% years 30% Certificates Weighted average remaining support 30% 40% tenor1 Wi
Slide 37: Commercial approach maximises value of wind and solar assets
Commercial approach maximises value of wind and solar assets Hedging in wholesale markets Route to market Hedging of long-term merchant position for new projects • Focus on management of power price risk • Contract for • Typically, 50% of open positions hedged 18 Differences (CfDs) months before del
Slide 38: Investment programme funded by strong cash flow and balance sheet
Investment programme funded by strong cash flow and balance sheet Funding 63 63 composition 2021 – 2030 20 Asset rotation €bn Financial Gross cash 50 11 headroom investments Net cash investments of €30bn Adj. operating 32 cash flow Dividend 7 Utilisation of nuclear/ 6 mining provisions Sources of fu
Slide 39: Video: Silvia Ortín
Video Silvia Ortín CEO Wind Onshore & PV, RWE Renewables
Slide 40: Asset rotation strategy allows for portfolio optimisation
Asset rotation strategy allows for portfolio optimisation and creates additional value Balance and Meet regulatory risk manage requirements portfolio (OFTO) Strategic rationale of asset rotation and divestment programme Crystalise 2021 – 2030 Leverage portfolio competencies values of partners € Prov
Slide 41: Committed to strong capital structure and investment grade rating
Committed to strong capital structure and investment grade rating Strong investment Target leverage factor of grade rating Today ≤3x net debt/core adj. EBITDA Current & Target rating: Baa2 BBB+ Post 2025 ≤3.5x Target leverage factor of net debt/adj. EBITDA 15 Nov 2021 CMD 2021 Page 41
Slide 42: Sustainable financing provides liquidity and financing at competitive rates
Sustainable financing provides liquidity and financing at competitive rates Successfully issued Syndicated credit facility with Green Bond in Q2 2021 sustainability-linked KPIs • Green bond multiple times oversubscribed • Renewable energy (%) in generation portfolio • Ten-year bond at highly attract
Slide 43: Attractive and stable dividend throughout the green energy transition
Attractive and stable dividend throughout the green energy transition Dividend Dividend floor of policy €0.90 per share €/share growing Long-term average stable pay-out ratio of 50 – 60% based on adj. net income 0.85 0.90 0.80 2019 2020 2021 2030 15 Nov 2021 CMD 2021 Page 43
Slide 44: Delivering growth and value
Delivering growth and value Green Earnings Strict Dividend investments Growth balance sheet commitment 2021 – 2030 2021 – 2030 management Strong investment Floor of €0.90 €30bn grade rating per share Net cash investments 9% Long-term target Long-term >90% EBITDA CAGR leverage factor payout ratio of
Slide 45: Leading the way to a green energy world
Leading the way to a green energy world Markus Krebber Chief Executive Officer, RWE AG
Slide 46: Leading the way to a green energy world
Leading the way to a green energy world Society Customers Employees Shareholders We deliver the energy We supply green We offer a highly We create transition and will energy solutions attractive & international shareholder value by become net zero by and support the working environment with deliveri
Slide 47: Appendix
Appendix 15 Nov 2021 CMD 2021 Page 47
Slide 48: Disclosure summary
Disclosure summary Strategic and financial outline Additional disclosure Installed net capacity core business 2030, pro rata 50 GW Gross cash investments core business 2021 – 2030 €50bn • Offshore Wind 45% • Onshore Wind/Solar/Batteries 45% Gross capacity additions 2021 – 2030 35 GW • Flexible Gener
Slide 49: Overview Guidance FY2021 and FY2022
Overview Guidance FY2021 and FY2022 € million Offshore Wind 1,050 – 1,250 1,350 - 1,550 Onshore Wind/Solar 50 – 250 650 - 750 Key changes vs. previous Hydro/Biomass/Gas 500 – 600 550 - 650 guidance 2022 S&T >350 150 - 350 • Offshore: Higher power Others/Consolidation Ca. -100 Ca. -150 prices Core ad
Slide 50: Guidance FY2023
Guidance FY2023 € million Offshore Wind 1,350 – 1,550 Onshore Wind/Solar 750 – 900 Key value driver FY2023 vs FY 2022 Flexible Generation/Supply 750 – 950 • Offshore: Full year contribution Triton Knoll & Others/Consolidation Ca. -150 Kaskasi offshore wind offset by impact German Core adj. EBITDA 2,
Slide 51: Financial preview FY2027
Financial preview FY2027 € million Offshore Wind 1,350 – 1,650 Onshore Wind/Solar 1,250 – 1,450 Key value driver FY2027 vs FY 2023 Flexible Generation/Supply 1,000 – 1,300 • Offshore: commissioning of new assets (Sofia, Others/Consolidation Ca. -150 Baltic 2, German cluster). Additional negative Cor
Slide 52: Your contacts in Investor Relations
Your contacts in Investor Relations Important Links Financial Calendar • Annual and interim reports & statements • 15 March 2022 ADR programme available Annual Report for fiscal 2021 • Investor and analyst conferences • 28 April 2022 Further information on our homepage Annual General Meeting • IR pr