rwe bilanzpressekonferenz 2013 · rwe: facts & figures and annual report 2012 e.on: annual...

RWE AG Fiscal 2013 Press Conference

Essen, 4 March 2014

RWE – working hard to successfully master the crisis

» RWE is in a difficult economic situation – conventional power generation in particular is declining fast

» RWE wants to regain its financial strength, as net debt bears no sensible relation to earnings capacity

» RWE as a partner in the transformation of the energy system – in networks, sales and power stations


Positive effects:

» One-off effect from Gazprom payment

» Efficiency-enhancement programme progressing faster than expected

» Massive decline in earnings in conventional power generation » Impairment losses of €4.8 billion » Operating result down by 8% to €5.9 billion » Recurrent net income down by 6% to €2.3 billion

First net loss in 60 years


Renewable energy pushing conventional power stations out of the market

1) Net capacity 2) At lignite-fired power station 3) Depending on the final decisions on the Dutch “Energieakkoord”

Measures Power station MW1 Fuel Location Date

Decommissioning Amer 8 610 Hard coal NL Q1-2016

Long-term conservation

Claus C 1,300 Gas NL Q3-2014

Moerdijk 2 430 Gas NL Q4-2013

Gersteinwerk F 355 Gas/steamturbine DE Q3-2013

Gersteinwerk G 355 Gas/steamturbine DE Q2-2014

Weisweiler H 270 Gas2 DE Q3-2013

Weisweiler G 270 Gas2 DE Q3-2013

2 medium-sized generation units 853 Gas NL Q1-2013

Conservation in summer months

Emsland B 360 Gas/steamturbine DE Q2-2014

Emsland C 360 Gas/steamturbine DE Q2-2014

Contract terminations

STEAG, among others 2,195 Hard coal DE Q4-2013 –

Q4-2014

Total 6,590

Measures taken since 2011 MW1

Westfalen A, B 304

Biblis 2,394

150 MW stations, lignite 1,954

Ensdorf 282

Gersteinwerk I 355

Donge 120

Claus A 591

Fawley 1,000

Didcot A 2,025

Tilbury 772

Littlebrook 1,370

Contract terminations 1,800

12,967

Comparison: new-build 12,482


Conventional Power Generation » ~40% reduction in overhead costs » Reduction in operating and maintenance costs » Improvement in availability and flexibility of power station portfolio

Supply/Distribution Networks Germany » Reduction in overhead functions in the grid and sales business » Leaner sales processes and development of new products » Optimisation of grid operations

Supply UK » Operating cost reductions due to outsourcing and services,

among other things

Trading/Gas Midstream » Focus on optimisation of locations, IT and support functions

RWE AG and cross-divisional effects » Implementation of a new steering model » Harmonisation of IT equipment

Efficiency measures of €2 bn implemented by end of 2016 - saving targets met faster than planned

Efficiency enhancements by division

Measures of €2 bn

= €1.5 bn (net)

by 2016

~ 50% Conventional Power

Generation ~ 10% RWE AG, other divisions and cross-divisional effects

~ 10% Trading/Gas Midstream

~ 10% Supply UK

~ 20% Supply/Distribution Networks Germany


Difference between measures and net figures = cost inflation; % figures indicate net benefit to operating result

Everyone contributes

Share-holders Halving of

dividend to €1 per share

Board €500,000 voluntary

reduction in compensation

Workforce No salary

increase for managers and salaried staff in

2014

RWE


Our contribution to the transformation of the energy system

RWE operates modern and efficient power stations whose output (MW) can be decreased or increased within minutes. In 2013 RWE was the No. 1 in Germany in terms of gas capacity

In 2015, Innogy will be one of the three largest off-shore operators in Europe, with an output of 1,000 Megawatts

RWE is one of the leading energy service providers in Germany

RWE’s power distribution network is 344,000 kilometres long and we have connected 300,000 renewables systems up to it so far

In Europe we supply power to more than 23 million customers. Four-fifths of our German clients are “very satisfied” with us


5.2

4.7

1.7

1.2

0.2

RWE

Eon

Vattenfall

EnBW

GDF Suez

25.3

19.5

15.6

14.3

13.0

8.3

4.4

3.9

3.7

1.2

GDF Suez

Eon

RWE

Enel

EDF

Iberdorla

Vattenfall

EdP

Centrica

EnBW

E.ON

RWE is No. 3 in the E.U. in gas-fired power stations and No. 1 in Germany in 2013 RWE and large European competitors1: Gas capacity in the EU and Germany (GW)

Gas capacity (partially dual-fuel) 1 including customer power stations as well as shareholdings, at RWE for example including enviaM, also including temporarily “mothballed” capacity The main sources (to mark off gas capacity, further sources were required in some cases) RWE: Facts & Figures and Annual Report 2012 E.ON: Annual Report 2012, Facts & Figures March 2013 GDF Suez: Asset Table 2012 EDF: Facts & Figures 2012, Analyst Fact Pack 2012, Platts Kraftwerksdatenbank 2010 ENEL: Presentation of results 2012, Plan 2013-2017, Website Endesa, ENEL List of thermal power stations in Italy EnBW: Annual Report 2012 Vattenfall: Infopack 2012, Website Kraftwerksliste, Federal Network Agency (BNetzA) Kraftwerksliste (DE) Iberdrola: Annual Report 2012, Website Iberdrola (Interactive analysis)


E.ON

In 2015, RWE will be one of the leading offshore operators in Europe, with around 1,000 MW of installed capacity Strong competitive position (capacity in MW)

Source: RWE Innogy internal analysis - Offshore competitor database.


0 500 1.000 1.500

EDFIberdrola

SWM*EnBW

StatkraftStatoil

CentricaRWESSE

E.ONVattenfall

DONG

0 500 1.000 1.500 2.000

EDFStatoil

StatkraftIberdrolaCentrica

EnBWSSE

SWM*Vattenfall

RWEE.ON

DONG

Already in operation

Under construction(scheduled for commissioning in2015)

5

2013 2015

3

* Stadtwerke München

RWE is largest German energy service provider, with over €500 million in revenues Energy transition in practice

» Energy concept for 180 terraced houses in Kelsterbach with CHPs, PV systems, storage systems and intelligent control

» Refitting of existing systems to environmentally friendly biogas CHPs

» 1,300 CHP solutions for SMEs and industry with installed capacity of 3,000 MWth and 500 MWel

» PV storage solutions and heating services for residential and commercial customers

» Virtual power station with 1,000 MW » Energy control systems for industry » Home automation for residential customers with RWE SmartHome » Telephone hotline on how to save energy

“A new CHP system is set up every working day”

Local and remote district heating

Decentralised solutions

Innovations


RWE has the most efficient grids, with the highest feed-in of energy

24

18

10

5

RWE EnBW E.ON Vattenfall

Annual peak load (GW) Annual output (TWh)

3

51

103

143

Vattenfall EnBW E.ON RWE

Source: internal research, status: 2012


RWE Vertrieb positioned strongly on the market: No.1 in residential customer supply, leader in B2B supply

RWE is the No. 1 in energy supply in Germany and delivers high levels of customer satisfaction

Segment Market position Customer satisfaction

B2C – residential customers

B2B – business customers

B2B – energy utilities

No. 1 in residential customer seg-ment with over 8 m customers » 16% electricity market share » 10% gas market share

Leading position in business customer segment » 13% electricity market share » 10% gas market share

Leading position in energy utilities segment » 12% electricity market share » 6% gas market share

» Over 500,000 customers in online customer care

» 90% of customers appreciate the speed of reaction to their queries

» Over four-fifths of all customers say “we are very satisfied!”

» Best performance in terms of advice and courteous service

» Highest points for friendliness and courtesy » Highest points for dealing successfully with

customer queries


RWE is the customers’ energy manager

We offer a modern, efficient system for automated home control – “SmartHome”. At the moment, it can only control lights, windows and heaters. In future you will be able to control your entire heating system, even from your smart phone.

“RWE Smart Company” is designed for medium-sized companies that want to capture their consumption data and reduce their consumption at different locations.

With “RWE WebMarket”, large customers, regional energy utilities and municipal utilities can participate in energy trading.

With our partners, we are driving forward the expansion of electric vehicle infrastructure, so that in future these cars will not simply be the modern method of transport, but also part of the system of storing renewable energy.


“RWE Windheizung” is also a solution for storing excess green energy, which is designed to help households to use their self-generated electricity efficiently.

RWE is applying its expertise to enable customers to efficiently control their energy requirements

Reconciliation of (recurrent) net income

€ million

Fiscal 2013 (+/-)

» Non-operating result shows the impairments, mainly in our Conventional Power Generation Division and significant restructuring charges

» Financial result improved due to better net interest and interest accretion to provisions

» Tax rate for determining recurrent net income at 34% (previous year 34%)

» Adjustments for recurrent net income comprise non-operating result including tax effects and one-off items from taxes

EBITDA

Depreciation

Operating result

Non-operating result

Financial result

Tax

Minorities/hybrids

Net income

Adjustments

Recurrent net income

8,762

-2,881

5,881

-5,475

-1,893

-956

-314

-2,757

+5,071

2,314

-552

+17

-535

-3,381

+199

-430

+84

-4,063

+3,920

-143


Access to debt capital market at all times is key

Leverage target mid-term: ≤ 3.0x; more flexibility short-term

1 Leverage factor ((Net financial debt (incl. 50% of hybrids) + pension, mining and nuclear provisions)/EBITDA)

€ billion

29.9 33.0 30.7

13.0 13.1 11.2 16.9 19.9

19.4

2011 2012 2013 2014e

Net financial debt Pension, mining and nuclear provisions

Net debt In the order of 2013

Significantly >3.5x1 Leverage factor1 3.5x 3.5x 3.5x


Political reforms for a successful transformation of the energy system


We need a redesigned energy market, which assigns value to retaining conventional power station capacity. This is a matter of security of supply.

We need a reformed Renewable Energy Sources Act to ensure that energy for industry and households remains affordable. Energy must not become a luxury good for the privileged few.

We need ambitious climate protection measures, including a strong European emissions trading law with a CO2-reduction target to be implemented by 2030.

Outlook for 2014 – we have a difficult path ahead of us


We are expecting our performance to decline significantly again in 2014

We are working to achieve the objectives of our RWE 2015 programme

rwe bilanzpressekonferenz 2013 · rwe: facts & figures and annual report 2012 e.on: annual...

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