RWE Company Presentation - As of March 2019 - RWE AG
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RWE Company Presentation As of March 2019
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 promise for the materialisation of future results and developments and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those described in such statements due to, among other things, changes in the general economic and competitive environment, risks associated with capital markets, currency exchange rate fluctuations, changes in international and national laws and regulations, in particular with respect to tax laws and regulations, affecting the Company, and other factors. Neither the Company nor any of its affiliates assumes any obligations to update any forward-looking statements. All figures regarding the renewables business are based on pro forma combined innogy and E.ON publicly available data. The implementation of the transaction is still subject to conditions, including merger control clearances. RWE AG | Company Presentation | March 2019 Page 2
Investment Highlights – key takeaways
On track to transform into a globally leading renewables player with the ambition to
significantly grow the business further
Combination of renewables with firm conventional power generation and global
trading house uniquely positioned to support energy transition in every aspect
Significant contribution to reduction CO2 emissions since 2012 with ambitious further
reduction targets until 2030
Focus on operational performance and negotiations of coal phase-out to achieve
planning certainty for lignite operations
Strong operational earnings to support future growth and attractive dividend
RWE AG | Company Presentation | March 2019 Page 3Strategic highlight: RWE continues to reshape its future RWE AG | Company Presentation | March 2019 Page 4
RWE is reshaping its operating business and financial
portfolio
Financial
Operating business
portfolio
New
Lignite & Nuclear European Power Renewables Supply & Trading Financial portfolio
E.ON 16.7% E.ON
25% Gundremmingen
innogy RES Gas storage
37.9% Kelag
E.ON 25.1% Amprion
12.5% Emsland
E.ON RES
~90% ~10%
Strengthening and future proofing of the Optimised financial
core operating business portfolio with stable and
attractive dividends
% Expected future EBITDA share.
Additions to RWE Portfolio (from transaction).
RWE AG | Company Presentation | March 2019 Page 5Key transaction parameters
> E.ON to acquire RWE’s 76.8% stake in innogy for a total consideration of
€17.1bn, including fiscal 2017 and 2018 dividend
E.ON acquisition > E.ON to launch a voluntary public takeover offer for innogy minorities at €40 per
of innogy share (adjusted for dividend payments until closing)
> Offer value of €40 per share represents a premium of 28% to the unaffected
innogy share price1 and implied EV/EBITDA 2018E of 10.5x2
> E.ON renewables business3
RWE asset > innogy renewables business
purchases
> innogy‘s German and Czech Gas Storage business
(economic effect > E.ON minority stakes in RWE’s nuclear plants Gundremmingen (25.0%) and
as of 1 Jan 2018) Emsland (12.5%)
> innogy’s 37.9% stake in Kelag
RWE stake in > E.ON to issue 440m shares to RWE implying a post money stake of 16.7%
E.ON in E.ON
innogy dividend > RWE to receive fiscal 2017 and 2018 innogy dividend
Cash payment > E.ON to receive ~€1.5 bn from RWE
1 As of 22 February 2018.
2 Based on implied enterprise value of €43 bn and mid-point of guided innogy EBITDA 2018 of €4.1 bn and €4.2 bn.
3 Excluding German and Polish onshore wind assets belonging to e.dis (151 MW) and 20% stake in Rampion offshore wind farm (80 MW).
RWE AG | Company Presentation | March 2019 Page 6Highly complementary renewables and conventional
generation portfolio
Pro forma combined net generation capacity1
(as of 1 January 2019)
> Leading European generator with
Low CO2 Firm and diversified and balanced generation
generation 2.7 flexible technologies
capacity 10.3 capacity
9.3
>60% >80% > De-risking of portfolio with >60% of low
45.7 GW CO2 generation capacity
6.5
2.8 > Leading provider of reliable and flexible
14.1 generation capacity to balance intermittent
production of renewables
> Opportunity to extract value from enlarged
Gas Renewables Other
portfolio through leading commercial asset
Lignite Hard coal
optimisation platform
Nuclear
1 RWE stand-alone plus E.ON’s and innogy’s renewables businesses.
RWE AG | Company Presentation | March 2019 Page 7Leading renewables player with attractive growth platform
Installed renewable capacity in Europe1 Pro forma combined renewables capacity2
RoW
Germany
7%
20%
US
36% 9.1 GW
24%
UK
Pro 4% 5%
forma 4%
combined Italy Iberia
Benelux
> No. 3 renewables player in Europe with well-balanced portfolio and strong position in U.S. onshore
wind market
> Leading European offshore wind platform with 1.9 GW in operation and 1.3 GW in construction and
advanced development
> Strong development pipeline in attractive growth markets and scope for efficiencies
1 Bloomberg New Energy Finance, March 2018.
2 As of 31 December 2018. Pro rata view. Excludes RWE’s own renewable capacity.
RWE AG | Company Presentation | March 2019 Page 8Strategic ambition to build a global renewables player
Target growth markets 1
Focus markets
Europe Americas Asia-
Pacific
Growth ambition
~2.0-3.0 GW p.a.
Funds available for
investment
~€1.5 bn p.a. net
Focus markets Solar PV Wind onshore Wind offshore
1 Size of bubble indicates approximate growth ambitions in GW.
RWE AG | Company Presentation | March 2019 Page 9Strong platform with attractive growth prospects
Capacity in operation and under construction for the years 2019 – 20211
GW, pro rata
> Attractive project pipeline of
1.9 GW under construction with
0.6 11.0 expected commissioning in the
0.6
0.7 years 2019 to 2021
9.1 Triton Knoll ~508 MW
Nysater 95 MW > Additional projects with short-term
FID of ~3 GW under development
Australian PV 349 MW with potential commissioning date
Scioto Ridge 242 MW
Other 12 MW by 2021
2 coastal projects 371 MW
West of Pecos 100 MW > Total combined medium-/long-term
Clocaenog Forest 96 MW development pipeline of more than
Morcone 57 MW
Mynydd Y Gwair 33 MW 10 GW
Bad á Cheò 27 MW
Other 18 MW
In Under Under Under Total
operation construction, construction, construction,
exp. COD 2019 exp. COD 2020 exp. COD 2021
1Pro forma combined renewables capacity as at 31 December 2018. Pro rata view. Excluding renewable portfolio of E.DIS and 20% of Rampion.
Source: innogy and E.ON.
RWE AG | Company Presentation | March 2019 Page 10Earnings growth foreseen until early 2020s before
investing into further pipeline projects
Estimated development of EBITDA for pro forma combined operational renewables portfolio
illustrative Expiration of higher starting > Illustrative earnings
tariffs under EEG compression End of ROC scheme profile of portfolio in
model at Nordsee Ost and for offshore wind farms
Amrumbank London Array and
operation and under
Greater Gabbard construction
> Assumes no further
growth capex; excludes
€1.5 bn Commissioning projects without FID, e.g.
of projects Triton Knoll
under End of ROC scheme for
construction offshore wind farms
Scroby Sands and > ~50% of portfolio with
Robin Rigg regulated or contracted
cash flows for still more
than 10 years
> ~11.5 years avg.
2015 2017 2020 2025 2030 2035
remaining support tenor
Note: Consolidated view.
Source: RWE analysis.
RWE AG | Company Presentation | March 2019 Page 11Step-change in operating business with doubling of
EBITDA post transaction
RWE stand-alone EBITDA1 Pro forma EBITDA2
(€ bn)
> Significant earnings ~10%
accretion with more than
90% of EBITDA from ~30%
operating businesses 22%
> Diversification of 47%
earnings mix 1.5
> ~60% contribution from
20%
renewables to pro forma
EBITDA
11%
~60%
> ~50% of operating EBITDA
coming from contracted
operations3 with visible and
stable earnings profile Lignite & Nuclear European Power Supply & Trading
Renewables Dividends
1 Split based on 2018 EBITDA for RWE stand-alone.
2 Split based on estimated numbers post closing.
3 Contracted operations include earnings from capacity payments for conventional generation, ROCs, CfDs, feed-in tariffs and PPAs.
RWE AG | Company Presentation | March 2019 Page 12Strong financial position post transaction provides ability
to support future growth
Transactional debt effects Financing
> Limited cash requirements from transaction
Nuclear provisions ~€0.8 bn financed through own liquidity and funds
> No assumption of capital market debt or
Provisions for wind plans to issue senior bonds
~€0.9 bn
asset dismantling
Rating strategy
Pension provisions ~€0.5 bn > Strong commitment to investment grade rating
> Leverage supported by strong operational
cash flows and financial portfolio
Tax equity liabilities ~€0.6 bn
> Pro forma net debt / EBITDA post transaction
of 2.5x –Closing of innogy transaction expected for summer 2019
2018 Announcement of transaction (12 March 2018)
Merger Control Proceedings
Q1 > RWE’s acquisitions of E.ON and innogy renewables operations approved by
2019 EU Commission on 26 Feb 19
> E.ON’s innogy acquisition filed with the EU Commission on 31 Jan 19;
opening of Phase 2 investigation on 7 March 19
> Filing of transaction with US antitrust authorities in due course
> RWE’s financial shareholding in E.ON of 16.67%:
o Approved by Bundeskartellamt (German competition authority) on 26 Feb 19
o Filing with CMA (UK competition authority) on 25 Feb 19
Q3 Closing I
> RWE sale of 76.8% innogy stake
> E.ON issuance of 440m shares to RWE
> RWE purchase of E.ON minority stakes in nuclear power plants
Gundremmingen (25.0%) and Emsland (12.5%)
> RWE cash payment of ~€1.5 bn to E.ON
Q4 Closing II
> RWE purchase of E.ON renewables1
> RWE purchase of innogy renewables2
> RWE purchase of innogy Gas Storage and 37.9% in Kelag3
1 Excluding German and Polish onshore wind assets belonging to e.dis (151 MW) and 20% stake in Rampion offshore wind farm (80 MW). | 2 After legal integration measures by E.ON,
accelerated closing currently under investigation. | 3 After legal integration measures by E.ON.
RWE AG | Company Presentation | March 2019 Page 14Strategic developments in current operations RWE AG | Company Presentation | March 2019 Page 15
Strategic focus on evolution of existing business portfolio
Optimise Enhance Tap into evolving
existing operations portfolio opportunities
Lignite & Nuclear/ European Power > Explore technologies
European Power suitable to provide
> Develop portfolio for future
security of supply
> Negotiate coal closures market requirements, e.g.
in Germany gas turbine projects, > Invest selectively into
biomass conversion new technologies, e.g.
> Manage cost base batteries
> Participate in opportunistic
> Apply capital allocation
asset consolidation
discipline
(core markets)
> Actively manage
portfolio Supply & Trading
> Expand organically, e.g.
Supply & Trading
LNG portfolio
> Maintain profitability
RWE AG | Company Presentation | March 2019 Page 16Roadmap of recommended German coal phase out
Recommendations by the Commission for Growth, Structural Change and Employment of 26 January 2019
Renewables Renewables
36.1% 65%
Hard coal -7.7 GW Hard coal -7 GW Hard coal -8 GW Hard coal
22.7 GW 15 GW 8 GW 0 GW
Lignite -4.9 GW Lignite -6 GW Lignite -9 GW Lignite
19.9 GW 15 GW 9 GW 0 GW
Assessment
Monitoring of measures by independent Earliest end Envisaged
of earlier
experts, adjustments if necessary date end date
end date
2018
2017 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038
> Net closures (on top of ongoing measures/market driven > Review mechanism with regards to climate protection, security of
decommissioning) of ~3 GW lignite and ~3 GW of hard coal supply, power prices, regional development and employment
by 2022
> Reduction in CO2 auctions corresponding to redundant
> By 2030 reduction to a total remaining capacity of certificates
9 GW lignite and 8 GW hard coal
> Desire to keep Hambach Forest
> No new coal plants to be commissioned
> Adequate compensation for shut downs until 2030
> Challenging recommendations for RWE which need to be adequately compensated
> RWE scenario analysis ongoing and negotiations with the German Government expected to last for several months
Source: Final report by Growth, Structural Change and Employment Commission as of 26 Jan 2019.
RWE AG | Company Presentation | March 2019 Page 17RWE is on an ambitious path to reduce CO2 emissions -
huge contribution to climate protection already made
RWE’s reduction path for CO2 emissions in core markets1 – our target before Commission recommendations
Conversion of Dutch hard coal Transfer of 1.5 GW of lignite Disposal and closure of coal Closure of Weisweiler power
plants to biomass co-firing to stand-by reserve and final plants, e.g. Bergkamen, plant (1.8 GW) at end
shut-down after 4 years Gersteinwerk of Inden mine by 2030
In million
tonnes
180 -32.6%
Before coal
phase-out
160
recommend-
ations by
140 Commission
Reduction target1:
120 55 – 65 million
tonnes vs. 2015
100 (equiv. 40 – 50%)
80
60
0
2012 2015 2018 (…) 2030 ... And
beyond
1 Referring to RWE stand-alone portfolio, excluding Mátra in Hungary and Denizli in Turkey. Figures do not include a potential impact on the generation portfolio as a result of
recommendations from the Commission on Growth, Structural Change and Employment.
RWE AG | Company Presentation | March 2019 Page 18Financial highlights FY 2018 RWE AG | Company Presentation | March 2019 Page 19
Delivery of 2018 financial targets in a challenging
environment
RWE stand-alone
(€ million)
Earnings in line with outlook for 2018 despite
2018 adj. EBITDA ✔ negative impact from suspension of UK
1,400 – 1,700 1,521
✔ capacity market
Ordinary dividend proposal improved from
✔ €0.50 in 20171 to €0.70/share for 2018
Guidance Actual
Successful hedge strategy and neutralising
✔ carbon risk until mid 2020s
2018 adj. net income
500 – 800 591
✔
Optimisation of capital structure: redemption of
✔ GBP 750 million hybrid and proposal to convert
preference into ordinary shares
Guidance Actual
1 Total dividend in 2017: €1.50/share of which €1.00/share special dividend.
RWE AG | Company Presentation | March 2019 Page 20Lower adjusted FY 2018 EBITDA mainly due to declining
generation margins in conventional power generation
Group RWE stand-alone
(€ million)
2,149 FY 2017 2,066
-315 > Lignite & Nuclear: Declining generation margins
Lignite & Nuclear -315
and lower production volumes
-129 European Power > European Power: Mainly absence of positive
-129
one-offs (sale of real estate)
-88 Supply & Trading -88 > Supply & Trading: Result slightly below average
earnings level
-861 innogy - > innogy as part of RWE stand-alone:
dividend inflow of €683 million in Q2 2018.
Same amount as in Q2 2017
Other,
+7 -13
consolidation
1,538 FY 2018 1,521
1 innogy - continuing operations.
RWE AG | Company Presentation | March 2019 Page 21Hedging – increased average hedge prices in outer years
but lower volumes due to restrictions at Hambach mine
Expected positions and hedge status as of 31 December 2018
Before any measures resulting from proposals of ‘Growth, Structural Change and Employment’ commission
Outright Average hedge price 2018 – 2021 corresponds with average hedged CO2 price (€/MWh) of:
(Lignite ~5 ~5 ~5 ~7
&
Nuclear) ~28 ~29 ~31 ~37
83 TWh ~75 TWh ~65 TWh ~65 TWh
>90% >90% >80%
2018 2019E 2020E 2021E
Change to reported average
Open position Fully hedged position Implicit fuel hedge Average hedge price (€/MWh)
hedge price as of 30 Sept. 2018
Spread 72 TWh 50 – 70 TWh1 50 – 70 TWh1 50 – 70 TWh1
(Euro-
pean
Power) >90% 40%
2018 2019E 2020E 2021E
Open position Hedged position (%)
CO2 > CO2 position financially hedged until mid-2020s
RWE AG | Company Presentation | March 2019 1 Total in-the-money spread. Page 22Recovery of fuel spreads in H2 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
1Fuel spread defined as: Power price – (pass-through-factor carbon × EUA price + pass-through-factor coal × coal price + pass-through-factor gas × gas price).
Note: Shown figures based on fuel spreads per end of month (€/MWh).
Source: Bloomberg; data until 31 Dec 2018.
RWE AG | Company Presentation | March 2019 Page 23Adjusted net income for FY 2018 reaches €591 million
RWE stand-alone
FY 2017 FY 2018
(€ million)
> RWE stand-alone adj. EBITDA includes
2,066 Adj. EBITDA 1,521 adj. EBITDA from Lignite & Nuclear,
European Power, Supply & Trading and
dividend from innogy
-592 Adj. depreciation -568
> Financial result mainly adjusted for
mark-to-market valuation of securities
1,474 Adj. EBIT 953 according to IFRS 9 and impact from
adjustment of discount rates for long-term
provisions
-373 Adj. financial result -226
> Limited adjusted taxable earnings at RWE
stand-alone
-65 Adj. tax -59 > Adjustments of tax and minorities resulting
from the adjustments in the non-operating and
Adj. minorities financial result as well as deferred taxes
-63 -77
& hybrids > Hybrid bonds partly classified as equity
pursuant to IFRS
973 Adj. net income 591
RWE AG | Company Presentation | March 2019 Page 24FY 2018 distributable cash flow at € 261 million mainly
driven by lower adjusted EBITDA
RWE stand-alone
FY 2017 FY 2018
(€ million)
> innogy dividend of €683 million (FY 2017:
2,066 Adj. EBITDA 1,521 €683 million) fully reflected in adj. EBITDA
Change in provisions & > Lower changes in provisions & other non-cash
-639 -586 items mainly due to reduced utilisation of
other non-cash items
provisions for legacy contracts
-404 Capex -485
> Higher capex due to increased maintenance at
European Power, investment in Dutch biomass
1,023 Cash contribution 450 co-firing and higher capex because of accele-
rated relocation in the lignite mining area
Change in operating -104
-283 > High working capital at year-end mainly driven
working capital
by higher gas inventories and accruals expected
-21 to reverse in 2019.
-136 Cash interests/taxes
Previous year was negatively affected by phase-
out of working capital optimisation measures
-72 Minorities & hybrids -64
> Improvement in cash interests after redemption
Distributable and buy back of hybrids in 2017
533 261
cash flow (DiCF)
RWE AG | Company Presentation | March 2019 Page 25Strong decline of net debt due to high inflow of
variation margins
Development of net debt (RWE stand-alone)
(€ million)
4,510 -261 922 -1 -3,855 976 -11 2,280
Net debt Distributable Dividend Financial Other Change in Change in Net debt
31 Dec 2017 cash flow RWE AG investments/ changes in provisions hybrid capital 31 Dec 2018
(DiCF) divestments net financial (net debt
debt1 relevant)
1 Includes approx. €4.4 billion from financing effects such as change of variation margins which will revert once the underlying transactions are realised or commodity trends turn around.
RWE AG | Company Presentation | March 2019 Page 26Solid capital structure with high financial flexibility
RWE stand-alone net debt (as of 31 Dec 2018)1
(€ bn)
Financial assets and receivables 11.5 > Net financial asset position
> Financial receivables against innogy 1.7 > Majority of debt characterised by long-term
> Financial assets 9.8 provisions
Financial liabilities (incl. hybrid adjustments) 2.2 > Financial position commensurate with RWE’s target
> Bonds and bank debt, CP 1.2 to maintain investment grade ratings
> Other financial liabilities 1.1 > Upside potential from rising interest rates
> Hybrid adjustments -0.1 (+10 bps change in real discount rates):
Pension provisions: c. -€0.1 billion
Net financial assets (incl. hybrid adjustments) 9.3 Nuclear provisions: c. -€50 million
Mining provisions: c. -€70 million
Long-term liabilities 11.6
> Nuclear provisions 5.9 > Outstanding hybrid capital of €1.1 billion2
> Mining provisions 2.5 > Financial holdings (innogy, Amprion, Urenco) not
> Pension provisions 3.2 included in net debt
Total net debt 2.3
1 Rounding differences may occur. I 2 As of 21 March 2019, after call of GBP 750 million hybrid.
RWE AG | Company Presentation | March 2019 Page 27RWE stand-alone – outlook for 2019
(€ million)
Actuals 2018 2019 forecast
Lignite & Nuclear 356 300 – 400
European Power 334 250 – 350
Supply & Trading 183 100 – 300
innogy dividend1 683 700
Adjusted EBITDA 1,521 1,200 – 1,500
Adj. depreciation -568 Slight increase (a.o. IFRS 16)
Adj. net financial result -226 Stable development expected
Adj. taxes -59 Stable development expected
Adj. minorities & hybrids 77
Decline post call of hybrid in March 2019
Adjusted net income 591 300 – 600
Net debt 2,280 Significantly above 2018
1innogy dividend based on our agreement with E.ON as part of the transaction. Positive negative impact on earnings.
Different to dividend proposed by innogy to the innogy Annual General Meeting 2019.
RWE AG | Company Presentation | March 2019 Page 28Target to pay attractive dividends
Elements of dividend policy
€1.50
> Dividends until 2019 driven by distributable cash flow of €1.00
RWE stand-alone
> Increase in operational dividend 2018 of 40% to €0.701
€0.802
> Management target to further increase dividend for €0.701
2019 to €0.80
> After closing of innogy transaction change in dividend
policy envisaged (relevant from FY 2020 onwards): €0.50
Return to pay-out ratio based on adjusted net income
2017 2018 2019
Operational dividend Special dividend
1 Dividend proposal for RWE AG’s 2018 fiscal year, subject to the passing of a resolution by the 3 May 2019 Annual General Meeting
2 Management target
RWE AG | Company Presentation | March 2019 Page 29Appendix
Page 30RWE at a glance
Key facts RWE’s net generation capacity1
Leading European power generator
Efficient and flexible power plant portfolio
Strong global trading business
0.3
Ongoing transformation into a leading
2.7
renewables player 2.8
36.6 10.36
14.1 GW
€1.5 bn €11.7 bn
adj. market
EBITDA3 cap5 6.5
167 TWh
17,154
generated
employees2
power4
Nuclear Lignite Hard coal Gas
Pumped storage, other Renewables
Note: Figures may not add up due to rounding differences. | 1 Net installed generation capacity excl. innogy as of 1 January 2019. | 2 Converted to full-time positions. Workforce at 2018 year-
end excl. innogy. | 3 2018 EBITDA for RWE stand-alone. | 4 Power generation 2018 excl. innogy. | 5 End of fiscal year 2018. | 6 Including units in security reserve.
RWE AG | Company Presentation | March 2019 Page 31Group structure
Financial
Operating business portfolio
Lignite & Nuclear European Power Supply & Trading innogy
Lignite mining and Power generation Trading & Principal Renewables,
power generation (hard coal, gas, hydro Investments, Supply - Grid &
(lignite & nuclear) & biomass) Gas & LNG, Infrastructure,
Commodity solutions, Supply
Commercial Asset
Optimisation (CAO)
RWE AG | Company Presentation | March 2019 Page 32RWE’s ESG performance on selected items
Environmental Performance Social Performance
In million Before coal > Targets to promote motivation and health of its employees
tonnes phase-out
recommen-
180 > Focus to increase diversity, inclusion and social engagement
-32.6% dations by
Commission
160
Reduction target1: Governance Performance
140 55 – 65 million
> Management incentive scheme aligned with focus on
tonnes vs. 2015
120 shareholder return
(equiv. 40 – 50%)
> Continuous dialogue between Chairman of the Supervisory
100 Board and shareholders
80 > Conversion of preferred shares into ordinary shares shall be
proposed to the AGM, 3 May 2019
60
0
2012 2015 2018 2030 (…) ... And Selection of ESG ratings
beyond
> Continuous carbon emissions reduction since 2012 ESG Rating July 2017
> Total score: AA
> More than 30% reduction between 2012 and 2018
ESG Rating 2018:
> 10% reduction in 2018 compared to 2017 > Total Score: 71 out of 100
> 2030 CO2 reduction target of 55 – 65 million tonnes > Rank: 43 out of 194 companies
versus 2015 > 2018 Climate Change score: pending
> 2018 Water score: C
1Referring to RWE stand-alone portfolio, excluding Mátra in Hungary and Denizli in Turkey.
Note: Figures do not include a potential impact on the generation portfolio as a result of recommendations from the Commission on Growth, Structural Change and Employment.
RWE AG | Company Presentation | March 2019 Page 33Lignite & Nuclear – earnings 2018 driven by expected
decline of generation margins and volumes
Key financials FY 2018 versus FY 2017:
FY FY Lower realised generation margins
€ million 2018 2017 change Closure of Gundremmingen B nuclear unit
Operating cost improvements
Adj. EBITDA 356 671 -315
t/o non-recurring items1 - -1 +1
Depreciation -279 -272 -7
Adj. EBIT 77 399 -322 Outlook for FY 2019 adjusted EBITDA:
between €300 and €400 million
t/o non-recurring items1 - -1 +1
Slightly higher realised generation margins (hedged
Capex 228 248 -20 outright price: ~€29/MWh vs. ~€28/MWh in 2018)
Impact from production restrictions at Hambach lignite
Cash contribution2 128 423 -295 mine (~ -€100 million)
Outlook does not include any impact from measures
proposed by the German ‘Growth, Structural Change and
Employment’ commission
1 Non-recurring items not included in non-operating result.
2 Cash contribution = adj. EBITDA minus capex with effect on cash; before changes in provisions; excl. investments from assets held for sale.
RWE AG | Company Presentation | March 2019 Page 34European Power – operational performance suffers from
suspension of UK capacity market
Key financials
FY FY FY 2018 versus FY 2017:
€ million 2018 2017 change
Lower realised generation margins
UK 102 205 -103 Absence of positive one-offs (e.g. land sales)
Continental Europe 228 253 -25 Higher earnings contribution from UK capacity market4
Operating cost improvements
Adj. EBITDA1 334 463 -129
t/o non-recurring items2 - 80 -80
Depreciation -297 -308 +11 Outlook for FY 2019 adjusted EBITDA:
between €250 and €350 million
Adj. EBIT 37 155 -118
No income from UK capacity market assumed as long as
t/o non-recurring items2 -
80 -80 legal situation is unclear4
Capex 245 147 +98
Cash contribution3 89 316 -227
1 Total adj. EBITDA includes further income from other subsidiaries.
2 Non-recurring items not included in non-operating result.
3 Cash contribution = adj. EBITDA minus capex with effect on cash; before changes in provisions.
4 Under the UK capacity market regime RWE had secured capacity payments of c. €100 million for fiscal year 2018 and c. €180 million for fiscal year 2019. The payments have been
suspended after the decision of the European Court of Justice from November 2018. For 2018, RWE has received capacity payments of c. €50 million for Q1-Q3 2018.
RWE AG | Company Presentation | March 2019 Page 35Supply & Trading – Slightly below average earnings level
Key financials FY 2018 versus FY 2017:
FY FY Good performance of gas and LNG business; earnings
€ million 2018 2017 change contribution in the order of high previous year’s result
Trading result below last year‘s level
Adj. EBITDA 183 271 -88 Value adjustment within Principal Investment portfolio in Q2
t/o non-recurring items1 - - -
Depreciation -6 -6 -
Adj. EBIT 177 265 -88
t/o non-recurring items1 - - - Outlook for FY 2019 adjusted EBITDA:
between €100 and €300 million
Capex 13 7 +6 > Expected longer-term average earnings contribution of
approx. €200 million
Cash contribution2 170 264 -94
1 Non-recurring items not included in non-operating result.
2 Cash contribution = adj. EBITDA minus capex with effect on cash; before changes in provisions.
RWE AG | Company Presentation | March 2019 Page 36Power prices and commodities
Base load power prices – Germany, NL (1 year forward) Base load power prices – UK (1 year forward)
€/MWh
80 €/MWh 100
NL UK
60 80
40 60
Germany
20 40
0 20
Mrz'17 Mrz'18 Mrz'19 Mrz'17 Mrz'18 Mrz'19
Coal prices – API2 Cal-ahead Gas prices – TTF Cal-ahead Carbon prices - EU ETS
$/t €/MWh €/t
110 28 27
26
100 22
24
90
22 17
80 20
18 12
70
16
60 7
14
50 12 2
Mrz'17 Mrz'18 Mrz'19 Mrz'17 Mrz'18 Mrz'19 Mrz'17 Mrz'18 Mrz'19
Source: Bloomberg; prices through to 4 March 2019.
RWE AG | Company Presentation | March 2019 Page 37Clean Dark (CDS) and Spark Spreads (CSS) –
2018 - 2020 forwards for Germany, UK and NL1
Germany UK2 Netherlands
Cal18 Cal19 Cal20 Cal18 Cal19 Cal20 Cal18 Cal19 Cal20
€/MWh €/MWh
15 15
Ø10.61 10
10 Ø8.69
Ø7.67
Ø6.37 Ø6.95
Ø5.07
Ø4.68 5
5
Ø4.99 Ø4.84 Ø4.73
Ø4.18
Ø4.16 Ø3.10
Ø3.92
Ø1.07 Ø2.32
0 0
Ø-0.13 Ø-0.18
-5 -5
CDS Cal 20 base load CDS Cal 20 base load CDS Cal 20 base load
(assumed thermal efficiency: 40%) (assumed thermal efficiency: 40%) (assumed thermal efficiency: 40%)
CSS Cal 20 peak load CSS Cal 20 base load CSS Cal 20 base load
(assumed thermal efficiency: 50%) (assumed thermal efficiency: 50%) (assumed thermal efficiency: 50%)
1 Settlement one year ahead (Cal+1) | 2 Including UK carbon tax | Source: RWE Supply & Trading, prices through to 4 March 2020.
RWE AG | Company Presentation | March 2019 Page 38Your contacts @RWE Investor Relations
Important Links Financial Calendar
Annual and Interim Reports & Statements 3 May 2019
http://www.rwe.com/ir/reports Annual General Meeting
Investor and Analyst Conferences 15 May 2019
http://www.rwe.com/ir/investor-and-analyst-conferences Interim statement on the first quarter of 2019
IR presentations & further factbooks 14 August 2019
http://www.rwe.com/ir/presentations Interim report on the first half of 2019
IR videos 14 November 2019
http://www.rwe.com/ir/videos Interim statement on the first three quarters of 2019
Consensus of analysts’ estimates 12 March 2020
http://www.rwe.com/ir/consensus-estimates Annual report 2019
Contacts for Institutional Investors & Financial Analysts Contact for Private Shareholders
Gunhild Grieve Lenka Zikmundova Sabine Gathmann
Head of Investor Relations Tel.: +49 201 5179-3116 Tel.: +49 201 5179-3115
Tel. +49 201 5179-3110 lenka.zikmundova@rwe.com sabine.gathmann@rwe.com
gunhild.grieve@rwe.com
Martin Vahlbrock Jérôme Hördemann
Tel.: +49 201 5179-3117 Tel.: +49 201 5179-3119
martin.vahlbrock@rwe.com jerome.hoerdemann@rwe.com
Dr. Burkhard Pahnke Susanne Lange
Tel.: +49 201 5179-3118 Tel.: +49 201 5179-3120
burkhard.pahnke@rwe.com susanne.lange@rwe.com
RWE AG | Company Presentation | March 2019 Page 39You can also read
