EnBW Energie Baden-Württemberg AG Annual Investor Update 2013

Transcription

1 EnBW Energie Baden-Württemberg AG Annual Investor Update 2013 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN March 2013 Energie braucht Impulse

2 Important note Unless indicated otherwise, all data contained hereinafter refers to the EnBW group and is calculated according to IFRS. No offer or investment recommendation This presentation has been prepared for information purposes only. It does not constitute an offer, an invitation or a recommendation to purchase or sell securities issued by EnBW Energie Baden-Württemberg AG (EnBW), a company of the EnBW group or any other company. This presentation does not constitute a request, instruction or recommendation to vote or give consent. All descriptions, examples and calculations are included in this presentation for illustration purposes only. Future-oriented statements This presentation contains future-oriented statements that are based on current assumptions, plans, estimates and forecasts of the management of EnBW. Such future-oriented statements are therefore only valid at the time at which they are published for the first time. Future-oriented statements are indicated by the context, but may also be identified by the use of the words may, will, should, plans, intends, expects, believes, assumes, forecasts, potentially or continued and similar expressions. By nature, future-oriented statements are subject to risks and uncertainties that cannot be controlled or accurately predicted by EnBW. Actual events, future results, the financial position, development or performance of EnBW and the companies of the EnBW group may therefore diverge considerably from the future-oriented statements made in this presentation. Therefore it cannot be guaranteed nor can any liability be assumed otherwise that these future-oriented statements will prove complete, correct or precise or that expected and forecast results will actually occur in the future. No obligation to update the information EnBW assumes no obligation of any kind to update the information contained in this presentation or to adjust or update futureoriented statements to future events or developments. 2

3 In a changing market and regulatory environment EnBW creates value through its core competencies Diversified portfolio Financial strength Strong position as low-carbon energy generator secured by expansion of renewable energies Expanding position as gas portfolio manager via long-term supply agreement and storage facilities The remaining integrated utility in Germany with transmission grid Regionally focused strategy in Baden- Wuerttemberg, one of Europe s wealthiest regions, Germany plus selected European markets Acceleration of efficiency programme by one year Expansion of consistent performance management developing EnBW s targets by benchmarking relevant KPIs Focus on dynamic debt ratio to guarantee creditworthiness Implementation of planned divestitures determines volume of gross investments Developing new business opportunities 3

4 The fundamental changes in the energy landscape are mainly politically and regulatory driven Renewable energy Increase in the share of renewable energy to 20% by 2020 (EU target) CO 2 Grids Binding EU greenhouse gas reduction target of 20% by 2020 Indicative target of 80 to 95% by 2050 Second incentive regulation period for gas network operators as of 1 Jan Start of second incentive regulation period for electricity network operators on 1 January 2014 Capital cost from planned investments can be included in revenue cap without time delay In place for transmission network operators Under discussion for distribution network operators 4 Market regulation Price coupling for all regions expected in 2014/2015 Development of a single market for electricity contradicted by discussions about launch of price zones

5 The rapid expansion of regulated renewable energies leads to declining wholesale market prices 150, ,000 50,000 Expansion of renewable energies EEG-supported feed-in in GWh EEG-payments in billion 1 7,9 5,8 4,5 2,2 2,6 0,9 1,6 3,6 19,0 16,8 13,2 10,8 9,0 22, Wholesale markets are further declining Electricity price EEX year futures peak & year ahead base ( /MWh) 40 Jan. 11 Jul. 11 Jan. 12 Jul. 12 Jan. 13 base 2012 peak 2012 base 2013 peak 2013 base 2014 peak Hydro Wind onsh. Wind offsh. Photovolt. 1 Source BMU; years 2012 and 2013 are projections Biomass

6 Decreasing margins and very low utilisation reduce profitability of conventional generation fleet and contradict EU greenhouse gas reduction targets Gross margins in conv. generation remain low Utilisation of gas turbines of EnBW Forward prices for Clean Dark Spread 1 ( /MWh) Jan. 11 Jul. 11 Jan. 12 Jul. 12 Clean Dark Spread 2012 Clean Dark Spread 2013 Clean Dark Spread 2014 Forward prices for Clean Spark Spread 1 ( /MWh) Jan. 11 Jul. 11 Jan. 12 Jul. 12 Clean Spark Spread 2012 Clean Spark Spread 2013 Clean Spark Spread 2014 operation revision outtage stand by weekend 6 1 Clean spark spread represents the net revenue a generator makes from selling power, having bought gas and the required number of carbon allowances. Clean dark spread refers to an analogous indicator for coal-fired generation of electricity. Plant efficiency used for calculation was 36% for CDS and 50% for CSS.

7 Downward trend of performance at group level reflects structural change Adjusted EBITDA in millions 1 Segment development over the past three years 2, , % 2, ,343.1 Electricity generation and trading -36% 2,071 1,609 1, % Electricity grid and sales % Gas Additional burdens 2013 CO 2 allowances Electricity price brake Services +12% Prior-year figures restated

8 Improvement of financial headroom is top of the agenda to maintain sufficient credit standing Capital measures Excellence in execution Divestitures and participation models done done 2012 on track accelerated 1/3 completed Hybrid bond: 1bn Capital increase: 822m More than 300m in 2012 For 2013 about 600m expected Improvem. in EBIT of 750m already in 2014 inst. of 2015 Around 1bn until 2015 In addition 500m of divestiture progr. already achieved 1.6bn via participation models for renewable energies and disposals of property, plant and equipment and construction cost subsidies Focused investment programme from 2012 onwards 5.2bn gross investments 2013 to 2015 Low-carbon generation capacity 2.9bn Decentralised solutions 0.35bn Existing portfolio 2bn 2.6bn net investments 2013 to 2015 decisive Disciplined capex w. average net investm. below 1bn p.a. 8

9 Despite the challenging environment free cash flow remains positive due to disciplined capex Cash flows 1 Gross investments 1 2,443 2,832-80% 2,428 2,561 2,209 1,747 1,782 4,374 1,313 1, ,328 1, FFO Operating cash flow Free cash flow Prior-year figures restated

10 Reduction of adjusted net debt has a positive impact on further dynamic debt ratio development safeguarding financial stability of EnBW Adjusted net debt in millions 1 8, , , , % 1,158.1 Target dynamic debt ratio: ~ 3.3 8, , , , Changes in DBO Adj. net debt without changes in DBO Dynamic debt ratio 1 Prior-year figures restated

11 Due to additional burdens the outlook for fiscal year 2013 remains negative Adjusted EBITDA 2012 Outlook Generation and trading Renewable energies Electricity/gas grid Sales EnBW group 1,125m 239m 774m 241m 2,343m -30% to -40% -10% to -20% +15% to +25% +10% to +20% -5% to -10% 11 1 In comparison with adjusted EBITDA 2012

12 EnBW accelerates its portfolio diversification to improve performance Low-carbon generator Wind onshore Expansion of profitable sites: 1,100 MW 1,2 Development of participation models Wind offshore Baltic 2 via participation model: 288 MW 2 Run-of-river Expansion Iffezheim: 38MW 2 EnBW CO 2 footprint 4 Guarantor for security of supply Pumped storage power station Construction of Obervermunt II: 360 MW Examining further projects Independent gas portfolio manager Long-term supply agreement with Novatek 3 More storage facilities Decentralised solution provider E-cars Smart home Dual fuel: electricity plus natural gas Expansion of new business fields Decentralised New biogas solutions plants put provider into operation Cross-selling started by Yello in autumn 2012 Increased sale to municipalities by using Espot platform First point of contact for all energy-related questions 12 1 Targets until 2015 in Baden-Wuerttemberg, Germany and Turkey; 2 Overall capacity including shares of third parties; 3 As of 10/2012: 21bn kwh p.a.; 4 Specific greenhouse gas emissions per kwh, measured in g CO 2 /kwh; EnBW: Own generation includes long-term procurement agreements and generation from partly owned power stations; E.ON: Power stations of entire E.ON group; RWE: Power stations owned by RWE group; Source for EnBW, E.ON and RWE: annual report 2012; Source for Vattenfall: CSR report 2011; data on 2012 not available

13 To summarise Diversified portfolio with favourable CO 2 footprint Financial strength and sufficient credit standing as central issue Redesign of business model is on top of the agenda Continuous performance check to handle changing environment Outlook 2013: adjusted EBITDA 5 to 10% compared to

14 Appendix EnBW 2020 page 15 Figures 2012 page 17 Sustainability KPIs page 25 EnBW at a glance page 26 Business model page 27 Financial profile page 29 Rating page 33 Dividend policy / shareholder structure page 34 Calendar 2013 page 36 IR contact page 37 14

15 Four elements form the EnBW 2020 programme as a clear way forward towards our new strategic orientation Customer and market orientation and innovation Customer and service orientation Marketing analysis Pricing Brand management Product and solution development Performance und portfolio Performance management KPI and external benchmarking Process optimisation and operational excellence Portfolio and investment management Capital efficiency and financing model Innovation and technology management Technology partnerships Trend analyses First-class IT Employee and organisational development Talent and career development Diversity Potential/performance evaluation Incentives and employee motivation Structure and governance 15 Leadership and leadership principles Team orientation Leadership and corporate culture Working environmental and office space Dialogue orientation and communication: internally and externally

16 EnBW 2020 is divided in three clearly defined phases Development Platform Create the right platform Customer focus and innovation Performance and portfolio Process, structures and organisation Business model Reputation Lift-off Achieve full potential Optimisation and continuous improvement Growth areas make first contributions High-performance team Ideal partnerships Eagle Top-quartile products and services For targeted customer segments For special energy ecosystems EnBW: first energy company entirely focussed on the scustomer

17 Increased gas sales due to expansion of gas midstream position - decreased electricity sales mainly due to lower trading activities and loss of B2B customers In billions of kwh 1 1/1 31/12/2012 1/1 31/12/ Variance in % Electricity sales % Retail customers % Industry and redistributors % Trading % Gas sales % Retail customers % Industry and redistributors % Trading Prior-year figures restated

18 Revenue growth based on higher EEG 1 revenues and volume effects in gas segment Revenue in millions % , , , , % Electricity generation and trading Electricity grid and sales 10, % 11,860.9 Gas 18 1, % 2, % Jan Dec 2011 Jan Dec 2012 Services 1 German Renewable Energies Act 2 Prior-year figures restated

19 Adjusted group net profit increased slightly due to better investment and financial result Adjusted group net profit in millions % Jan Dec 2011 Jan Dec In relation to profit shares attributable to the equity holders of EnBW AG; prior-year figures restated

20 FFO decreased due to higher utilisation of nuclear provisions and income taxes paid millions % Jan Dec 2011 Jan Dec % 1, , Provisions 98.5 Other 10.3 Interest / Dividends Taxes paid 1, ,209.3 EBITDA FFO 20 1 Prior-year figures restated

21 Free cash flow remains positive due to disciplined capex millions 1 Jan Dec 2011 Jan Dec % 2, % 1, Working Capital FFO Capital expenditures 2 Other 3 Free cash flow 1 Prior-year figures restated; 2 For intangible assets and property, plant and equipment; 3 Cash received from disposals of intangible assets and property, plant and equipment as well as cash received from construction cost and investment subsidies

22 Working capital increased mainly due to effects from the EEG 1 and inventories Working Capital Jan Dec 2012 in millions Inventories Securities Others Trade receivables / payables Working capital 22 1 German Renewable Energies Act

23 Adjusted net debt decreased, but lowered discount rate for pension provisions remains negative factor millions % -1.6% 8, , FFO Working capital Net investments 1 Dividends paid Capital measures Non-cash payment effects (addition of accrued interest, provisions, ) 7, ,051.4 Changes in DBO 8,415.6 Adjusted net debt Dec 2011 Adj. net debt without changes in DBO Adjusted net debt Dec Capital expenditure, acquisitions and divestitures; 2 50% hybrid tap, capital increase

24 Strengthening of equity ratio mainly due to capital increase, slight rise in dynamic debt ratio based on reduced operating performance in millions Variance Total assets 36, , % Equity 7, , % Equity ratio 19.5% 17.2% in millions Variance Adjusted net debt 8, , % Adjusted EBITDA 2, , % Dynamic debt ratio % 24 1 Prior-year figures restated

25 Sustainability Key performance indicators and CSR initiatives Selected key performance indicators 1 in Environmental KPIs Specific CO 2 emissions from own electricity generation g/kwh Own generation from renewable energies Renewable energies generation capacity GWh MW 7,230 2,527 5,982 2,461 Environmental protection expenditure million Social KPIs Percentage of women in managerial positions % Health rate % Industrial safety, accidents per 1 million working hours Number Corporate citizenship KPIs Charity donations million Global Reporting Initiative Oekom Research Rating Integrated Reporting German Sustainability Code (Deutscher Nachhaltigkeitskodex DNK) Level B (GRI-checked) 2011 Level A (GRI-checked) 2010: C- 2011: C One of three German pilot project participants (70 companies worldwide) Compliance statement submitted in August EnBW Report 2012 (condensed version); Further sources:

26 EnBW at a glance: a strong player in the European utilities sector Based on strong roots in Baden-Württemberg Our generation portfolio is the performance driver Active in selected foreign markets EnBW number 3 in Germany with approx. 5.5 million customers With a generation capacity of 13,400 MW one of the most important utilities in Germany and Europe Reliable shareholder structure (OEW, federal state of BW, municipal associations) Electricity segment (generation, trading, grid and sales) contributed 86% to adjusted EBIT in 2011 Generation portfolio with lowest CO 2 emissions in Germany: 369 CO 2 /kwh Currently 11% of revenue outside of Germany Profitable shareholdings in core markets abroad e.g. Turkey: generation gap, CZ: Strong regional growth in capital Business activities in three different markets 1 26 Wholesale markets (Procurement, generation, trading) Procurement: fuels (gas, coal, oil), emissions allowances Generation portfolio: 13,400 MW 2 Trading: energy (electricity): 57.5 TWh Regulated markets Electricity grids: 153,166 km Transmission: 3,700 km Distribution: 151,000 km Gas grids: 16,300 km Renewable energies according to EEG (German Renewable Energies Act) End-customer markets (Business and retail) Electricity: 58.2 TWh Gas: 57.8 TWh Heat: 6.8 TWh Further energy and environmental services 1 Annual Report 2012, all figures stated as of 31 December 2012; 2 Installed capacity without cold reserve

27 EnBW business model: EnBW manages its power and commodity position in order to lock in and optimise margins Fuels & CO 2 Generation portfolio Hedge optimisation dispatch Wholesale market for electricity Sales portfolio Back-to-back pricing Sales Standard integrated utility approach 27

28 Business model backs value chain of the EnBW group Electricity Generation Trading & procurement Transport & distribution Sales Gas Import contracts and infrastructure Storage Trading portfolio controlling Transport & distribution Sales Energy and environmental services 28 Source: EnBW

29 EnBW s flexible access to financing sources supports its strong liquidity position Commercial paper programme Syndicated loan facility Bilateral short-term lines of credit Euro Medium Term Note programme Other measures 2.0 bn (undrawn as of 31 December 2012) 2.0 bn (undrawn as of 31 December 2012) 539 m (undrawn as of 31 December 2012) 7.0 bn ( 4.0 bn utilised as of 31 December 2012) Hybrid bond with a volume of 1 bn 750m (October 2011) 250m (April 2012) Capital increase: 822 m (July 2012) Premature renewal of the syndicated loan facility in Q at favourable conditions secures access to cash: 29 2 bn facility amount including 1 bn swingline structure until 2018 Fix margin

30 Favourable maturity profile and proactive funding puts EnBW in a comfortable financing situation Maturities of EnBW s bonds in millions 1, ,000 First Call Date Hybrid 1,

31 Internal financing: EnBW is able to fully cover non-current provisions without negative impact on cash flow from operating activities in millions 10, , ,000 4, , Provisions (left hand axis) Retained financial assets (left hand axis) P&L (right hand axis) Cash flow (right hand axis) Cash contribution asset (right hand axis) CF cap (right hand axis) Data as of 30 June 2012 Source: EnBW

32 EnBW s bonds Bonds issued by the EnBW group Issuer Currency Increments Volume in millions Term in years Issue date Maturity Coupon in % Interest date Security Code (WKN) ISIN no. Stock Exchange EnBW Finance B.V. 50, /11/ /11/ Nov A0T3UR XS Luxembourg EnBW Finance B.V. 1, /7/2009 7/7/ July A1AJTU XS Luxembourg EnBW Finance B.V. 50, /10/ /10/ Oct A0G Z4C XS Luxembourg EnBW Finance B.V. 50, /11/ /11/ Nov A0T3US XS Luxembourg EnBW Finance B.V. 1, /12/ /1/ Jan A0DG9U XS Luxembourg EnBW Finance B.V. 1, /7/2009 7/7/ July A1AJTV XS Luxembourg EnBW Energie Baden- Württemberg AG /60 28/10/2011 2/4/ (initial) 2 April A1MBBB XSO Luxembourg 32 Source: EnBW

33 Substantial bundle of measures secures A rating 33 A3/negative (14 December 2012) Recognition of substantial package of measures Taking into account dividend policy with focus on profitability Reduced earnings and cash flow due to nuclear fuel tax, shutdown of GKN I and KKP 1 and decreased wholesale market prices A-/stable (21 November 2012) Strong position in Baden-Wuerttemberg, profitable generation portfolio and supporting shareholder structure Reduced profitability and cashflows based on lower electricity margins and nuclear exit Strong liquidity and financial flexibility A-/stable (18 June 2012) Improved financial flexbility and reduced leverage due to implementation of bundle of measures Strong business profile as vertically integrated company with dominant position in Baden-Wuerttemberg Regulated grid business

34 EnBW s dividend policy gives sufficient flexibility to support financial strength Two key levers influence dividend trigger Operating performance Scope of the investment programme EBITDA Net financial liabilities Dynamic leverage ratio: Net debt/ebitda Adequate payout ratio: around 40% to 60% of adjusted group net profit 34 Source: EnBW Annual Report 2012

35 EnBW s stable shareholder structure remains stable Stable shareholder structure 1 OEW Energie-Beteiligungs GmbH NECKARPRI-Beteiligungsgesellschaft mbh 2 Badische Energieaktionärs-Vereinigung Gemeindeelektrizitätsverband Schwarzwald-Donau Neckar-Elektrizitätsverband Landeselektrizitätsverband Württemberg EnBW Free float 46.75% 46.55% 46.75% 46.55% 2.45% 0.87% 0.95% 0.63% 0.69% 0.11% 0.11% 2.08% 2.30% 0.37% 0.40% 35 1 Capital stock of 276,604,704 shares; divergence from 100 percent due to rounding effects; as of 31 December % subsidiary of NECKARPRI GmbH which is a 100% subsidiary of the federal state of Baden-Württemberg

36 Financial calender April 2013 Annual General Meeting 2013 Live video webcast time: 10:00 CET 7 May 2013 Interim report: January March 2013 Conference time: 15:00 CET 26 July 2013 Interim report: June 2013 Conference time: 15:00 CET 12 November 2013 Interim report: January September 2013 Conference time: 15:00 CET 36

37 EnBW s Team Dr. Frank Mastiaux Chief Executive Officer Thomas Kusterer Chief Financial Officer Ingo Peter Voigt Head of Finance / Investor Relations T Peter Berlin Director Capital Markets T Julia v. Wietersheim Senior Manager Investor Relations T Timo Storz Manager Investor Relations T