Q results innogy SE 14 May 2018 Hans Bünting COO Renewables and acting CFO

Transcription

1 Q results innogy SE 14 May 2018 Hans Bünting COO Renewables and acting CFO

2 Notice 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 materialization 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. 2

3 Joint statement on voluntary public takeover offer

4 innogy Q results Executive Board and Supervisory Board have issued a joint statement on E.ON s voluntary PTO Executive Board and Supervisory Board of innogy > assess the consideration offered by E.ON for minority shareholders ( Offer Price ) to be fair from financial point of view > however, given the lack of information regarding the terms of the RWE/E.ON agreement, cannot conclusively assess whether or not the consideration offered by E.ON for the acquisition of approx % of innogy shares from RWE is equal to, or higher or lower than, the Offer Price of > therefore cannot assess whether the Offer Price and the total value of the offer in aggregate are appropriate and whether or not the overall transaction is in the best interests of innogy and the innogy shareholders > have concerns relating to possible future integration measures, in particular the treatment of innogy s employees > are convinced that an independent innogy Group is well positioned with its integrated green business model to shape the energy world of tomorrow 4

5 innogy Q results Extensive timeline until final closing of E.ON/RWE transaction Voluntary public takeover offer by E.ON Joint statement by innogy Expiry of acceptance period innogy AGM 2019 Closing I: E.ON to take control over innogy Closing II: Transfer of assets under consideration to RWE Latest day of closing of offer 27 Apr May 18 Offer period early Q Apr 19 Expected by E.ON/RWE not before mid 19 Expected by E.ON/RWE not before end Jan 20 Offer period Initial acceptance period Additional acceptance period Publication of (final) take-up/acceptance Watermark updates 27 Apr 6 Jul 12 Jul 25 Jul 11 Jul end of Jul Weekly updates (daily in last week of offer period) 1 As communicated/expected by RWE/E.ON. 5

6 Q financial & operational update

7 innogy Q results Key messages Financial deliverables > Q1 2018: Adjusted EBIT of 1,236 million slightly below Q1 2017; adjusted net income of 610 million, down 11% on Q1 2017, mainly driven by an adverse financial result > Outlook 2018 confirmed: adjusted net income of more than 1.1 billion expected > AGM approved the dividend proposed by the Board of 1.60 per share for fiscal 2017 Business update > German offshore: innogy secures rights for the construction and operation of Kaskasi offshore wind farm in Germany with an installed capacity of 325 MW including a 20-year feed-in tariff under the German Renewable Energy Act > npower/sse merger: early May, the CMA referred the proposed transaction for an in-depth investigation (phase 2; the deadline for the final CMA report is 22 October) > Higher Regional Court in Dusseldorf annulled the regulations of the imputed returns on equity for the third regulatory periods for German electricity and gas networks. BNetzA already indicated that it would challenge the decision at the Higher Federal Supreme Court 7

8 Retail G&I Renewables innogy Q results Key events 2018 Q1 Q2 Q3 Q4 AUS Solar Purchase of solar projects Overland [Feb] NL Offshore Wind auction results [end Q1] US Onshore Closing EverPower acquisition AUS Solar Closing Overland acquisition GER Offshore Auction results [27 April] UK Offshore Triton Knoll FID [by end Q2] UK Offshore Triton Knoll Financial Close NL Offshore Wind new auction round GER Determination Xgen gas [28 Feb] GER Court decision RoE calculation [22 March] GER Final revenue caps gas 1 [starting end of May] GER Determination of Xgen electricity [end of Nov] East Determination of allowed revenues for t+1 [end Q4] GB npower & SSE merger submission of merger notice to CMA [27 Feb] GB npower & SSE merger End of phase 1 investigation by CMA [8 May] GB npower & SSE merger proposal to SSE shareholders to approve merger at AGM SSE [19 July] GB npower & SEE merger CMA report on phase 2 due [22 Oct] GB npower & SEE merger completion of transaction [exp. end of Q4/Q1 2019] 1 Can vary from DSO to DSO. Remark: all dates preliminary. Next CfD auctions in UK for wind are scheduled for spring 2019; mentioning of auctions does not imply innogy participation. 8

9 innogy Q results Adjusted EBIT and adjusted net income down vs Q and in line with expectations Adjusted EBIT million Adjusted net income million 35 1, (70) (11) 1,236 (25) (61) 22 (10) 610 Q RES G&I Retail Corp./ NB Q Q Adj. EBIT Adj. financial result Adj. taxes 1 Minorities Q Non-controlling interests. 9

10 innogy Q results Adjusted net income down 11% to 610m driven by lower adjusted EBIT and financial result Reconciliation of adjusted net income million Q reported adjustment Q adjusted Q adjusted Adjusted EBITDA 1,582-1,582 1,617 Operating D&A 1 (346) - (346) (356) Adjusted EBIT 1,236-1,236 1,261 Non-operating result 99 (99) - - Financial result (159) (53) (212) (151) Income before taxes 1,176 (152) 1,024 1,110 Taxes on income (376) 120 (256) (278) Tax rate 32% - 25% 25% Income 800 (32) Non-controlling interests (158) - (158) (148) Net income 642 (32) By definition, operating D&A includes operating impairment losses. Key drivers Non-operating result improved versus prior year due to the valuation effect of certain derivatives Effective tax rate slightly above Q (30%) due to the revaluation of deferred tax assets on the loss carry forward in the Netherlands Weaker adjusted EBIT and financial result driving development of adjusted net income Normalised tax rate to derive adjusted net income set at 25 %, in line with the expectation for the sustainable level of the effective tax rate Based on the 555,555,000 innogy shares outstanding, adjusted net income amounted to 1.10 per share 10

11 innogy Q results Negative free cash flow in Q1 consistent to seasonal patterns Cash flow statement (extract) Net debt composition (extract) million Q Q /- Funds from operations (FFO) 1,287 1, Changes in working capital (2,167) (1,936) (231) Cash flow from operating activities (CFOA) (880) (663) (217) Capex 1 (371) (288) (83) Proceeds from disposals of assets/divestitures (2) Free cash flow (1,125) (823) (302) billion 31 Mar Dec /- Financial assets 3,923 4,086 (163) Financial liabilities 2 17,521 16,378 1,143 t/o senior bonds 13,059 12,007 1,052 t/o loans from RWE 1,656 1,656 - t/o loans from EIB 1,044 1,039 5 Net financial debt 13,598 12,292 1,306 Provisions for pensions and similar obligations 3 3,332 2, Provisions for wind farm decommissioning Total net debt 17,289 15,637 1,652 Note: rounding differences may occur. 1 Capital expenditure on property, plant and equipment and on intangible assets and on financial assets. This item solely includes capital expenditure with an effect on cash. 2 Adjusted for step-up effect of 824m as of 31 March 2018 and 877 million as of 31 December Including Surplus of plan assets over benefit obligations of (142)m as of 31 March 2018 and (103)m as of 31 December

12 innogy Q results Outlook 2018 confirmed Retail now excludes emobility million unless stated otherwise FY 2018 FY 2017 guidance 1 reported Renewables ~ Grid & Infrastructure ~1,850 1,944 Retail 2 ~750! 827 Adjusted EBIT 3 ~2,700 2,816 Adjusted financial result ~(750) (689) Tax rate for adjusted net income 25-30% 25% Adjusted net income >1,100 1,224 Dividend 70-80% of ANI 1.60 Net capex 4 ~ 2.5 bn 1,949 Leverage factor target of around 4.0x 1 Excluding Retail UK. Any earlier forward-looking statements on Retail UK should be disregarded. 2 Retail no longer includes emobility. 3 Including Corporate/New Businesses 4 Capital expenditure on property, plant and equipment and on intangible assets, financial assets./. proceeds from disposal of assets/divestitures and net changes in equity (including non-controlling interests). 5 As per 12 March 2018.! Outlook 5 confirmed Outlook 5 updated 3.6x 12

13 Backup

14 Renewables million Q Q /- Adjusted EBITDA Operating depreciation, amortisation and impairment losses (75) (80) 5 Adjusted EBIT Capital expenditure Proceeds from disposal of assets/divestitures - 11 (11) Power generation (TWh) Mar Dec 2017 Employees2 1,763 1, Total capacity (MW) 3,514 3, Capital expenditure on property, plant and equipment and on intangible assets and on financial assets. 2 Converted to full-time positions. 3 Pro-rata view; more than 100 MW in accounting view. 4 For part of the generation which is not subject to susidy schemes. Q development Positive price and volume effects Adjusted EBIT contribution from new onshore wind assets Brechfa Forest (UK), Deliceto (IT), Eschweiler Fronhoven, Eschweiler Nord and Wiedenfelder Höhe (DE) and from offshore windfarms Galloper (UK) and Nordsee One (DE) Negative foreign exchange effect (mainly GBP) Expansion of our generation capacity in Q by 118 MW (pro-rata view) first-time recognition of acquisition projects Deliceto (23 MW) and Krusemark D (1 MW, DE), repowering of Sommerland A (6 MW, DE) and full commissioning of offshore windfarm Galloper (innogy share: 25%/88 MW) Outlook 2018 Normalised weather conditions New capacities (additional >200 MW 3 expected) Higher power prices 4 Absence of Triton Knoll revaluation gain from 2017 Development costs for new projects 14

15 Renewables capacity overview (accounting view) As of 31 March 2018 Megawatt (MW) Onshore Offshore Hydro Biomass Biogas Solar PV Total Germany ,310 United Kingdom ,053 Spain Netherlands Poland Italy France Portugal Belgium Total 2, ,514 Note: Rounding differences may occur. 15

16 Renewables capacity overview (pro-rata view) As of 31 March 2018 Megawatt (MW) Onshore Offshore Hydro Biomass Biogas Solar PV Total Germany ,246 United Kingdom Spain Netherlands Poland Italy France Portugal Belgium Total 1,842 1, ,381 Note: Rounding differences may occur. 16

17 Grid & Infrastructure Germany million Q Q /- Adjusted EBITDA Operating depreciation, amortisation and impairment losses (161) (157) (4) Adjusted EBIT Capital expenditure Proceeds from disposal of assets/divestitures Mar Dec 2017 Employees2 14,638 14, Q development Higher earnings from grid sales Higher provision releases Efficiency improvements Higher number of staff mainly due to full consolidation of a new grid co-operation (Regionetz) from 1 January 2018 Outlook 2018 New regulatory period for gas Efficiency improvements 1 Capital expenditure on property, plant and equipment and on intangible assets and on financial assets. 2 Converted to full-time positions. 17

18 Grid & Infrastructure Eastern Europe million Q Q /- Adjusted EBITDA (4) Operating depreciation, amortisation and impairment losses (61) (65) 4 Adjusted EBIT Capital expenditure Proceeds from disposal of assets/divestitures Mar Dec 2017 Q development CZ: Positive price effect stemming mainly from the recognition of regulatory costs in the Czech gas business due to weather effects in previous years along with a positive foreign exchange effect HU: Negative effect from different accounting treatment of the so called cable tax which every DSO is charges at the beginning of the year. Effect is now shown in Q1 for the full year Lower workforce due to reassignment of innogy Česká republika a.s. to Corporate/New Businesses Employees2 6,880 7,394 (514) Outlook 2018 Lower income from Czech gas storage business 1 Capital expenditure on property, plant and equipment and on intangible assets and on financial assets. 2 Converted to full-time positions. 18

19 Retail Germany million Q Q /- Adjusted EBITDA (56) Operating depreciation, amortisation and impairment losses (8) (7) (1) Adjusted EBIT (57) Q development Lower positive extraordinary items Competitive environment leads to net customer losses Capital expenditure Proceeds from disposal of assets/divestitures - 3 (3) 31 Mar Dec 2017 Employees2 4,149 4,159 (10) Customers (`000) 7,824 7,905 (80) Residential and commercial customers 7,744 7,819 (76) Industrial and corporate customers (6) Outlook 2018 Lower impact from non-operational effects Margin pressure from customer losses and higher competition Efficiency improvements Note: Retail no longer includes emobility. 1 Capital expenditure on property, plant and equipment and on intangible assets and on financial assets. 2 Converted to full-time positions. 19

20 Retail United Kingdom million Q Q /- Adjusted EBITDA (2) Operating depreciation, amortisation and impairment losses (12) (23) 11 Adjusted EBIT Capital expenditure Proceeds from disposal of assets/divestitures - 1 (1) 31 Mar Dec 2017 Employees2 6,293 6,382 (89) Customers (`000) 4,635 4,750 (115) Residential and commercial customers 4,612 4,727 (115) Industrial and corporate customers (1) Q development The impact of net customer losses was offset by gaining customers with higher consumption and delivery of the recovery plan The proposed Domestic Gas and Electricity Tariff Cap Bill is scheduled to move through Parliament shortly to be enacted by July 2018 at the latest. Following that, Ofgem envisages to enable the price cap to come into effect by the end of The final decision on the design and level of the tariff cap is due to be published in autumn 2018 Outlook 2018 Retail UK no longer included in the outlook for adjusted EBIT and adjusted net income as it will likely be accounted for as discontinued operations from some point in Capital expenditure on property, plant and equipment and on intangible assets and on financial assets. 2 Converted to full-time positions. 20

21 Retail Netherlands/Belgium million Q Q /- Adjusted EBITDA (23) Operating depreciation, amortisation and impairment losses (12) (11) (1) Adjusted EBIT (24) Capital expenditure Proceeds from disposal of assets/divestitures - 13 (13) 31 Mar Dec 2017 Employees2 2,450 2, Customers (`000) 4,283 4,357 (74) Residential and commercial customers 4,277 4,349 (72) Industrial and corporate customers 6 8 (2) Q development Drop in adjusted EBIT driven in particular by unexpected commodity price increases driven by cold weather and related higher demand in Q Ongoing efficiency measures partly compensated for the lower customer base Challenging market environment remains due to strong competitive pressure Outlook 2018 Adverse cold weather impact in Q Intensified competition Efficiency improvements 1 Capital expenditure on property, plant and equipment and on intangible assets and on financial assets. 2 Converted to full-time positions. 21

22 Retail Eastern Europe million Q Q /- Adjusted EBITDA Operating depreciation, amortisation and impairment losses (5) (4) (1) Adjusted EBIT Q development Stable development across all markets Electricity net customer gains across all countries Capital expenditure Proceeds from disposal of assets/divestitures Mar Dec 2017 Employees2 2,594 2, Customers (`000) 5,549 5, Residential and commercial customers 5,522 5, Industrial and corporate customers Outlook 2018 Normalised weather conditions 1 Capital expenditure on property, plant and equipment and on intangible assets and on financial assets. 2 Converted to full-time positions. 22

23 Retail B2C customer number development Total customers ( 000) Germany Eastern Europe NL/BE UK 22, % -1.1% 22,396 22,155 4,780 4,727 4,612 4,345 4,349 4,277 thereof: electricity customers ( 000) 15,795 -/+0.0% 15, % 15,631 2,825 2,799 2,737 2,336 2,336 2,297 4,030 4,091 4,105 6,604 6,563 6, Sep Dec Mar 18 5,439 5,502 5,522 thereof: gas customers ( 000) 6, % 6, % 6,525 1,955 1,929 1,876 7,868 7,819 7, Sep Dec Mar 18 2,009 2,012 1,980 1,408 1,411 1,418 1,264 1,256 1, Sep Dec Mar 18 23

24 Corporate/New Businesses Corporate/other million Q Q /- Adjusted EBITDA (54) (54) - Operating depreciation, amortisation and impairment losses (11) (9) (2) Adjusted EBIT (65) (63) (2) Q development Rising number of employees due to reassignment of innogy Česká republika a.s. from Grid & Infrastructure Eastern Europe Capital expenditure Proceeds from disposal of assets/divestitures 1 5 (4) 31 Mar Dec 2017 Employees2 4,111 3, Capital expenditure on property, plant and equipment and on intangible assets and on financial assets. 2 Converted to full-time positions. 24

25 Corporate/New Businesses emobility million Q Q /- Adjusted EBITDA (6) (3) (3) Operating depreciation, amortisation and impairment losses (1) - (1) Adjusted EBIT (7) (3) (4) Capital expenditure Proceeds from disposal of assets/divestitures Mar Dec 2017 Q development Higher operating expenditures to ramp up our emobility activities Steadily increasing number of employees reflects our growth ambitions Deutsche Post DHL Group won as a new emobility partner: innogy provides charging infrastructure for DHL s growing StreetScooter fleet Employees Capital expenditure on property, plant and equipment and on intangible assets and on financial assets. 2 Converted to full-time positions. 25

26 Corporate/New Businesses Innovation Hub million Q Q /- Adjusted EBITDA (13) (8) (5) Operating depreciation, amortisation and impairment losses Adjusted EBIT (13) (8) (5) Capital expenditure Proceeds from disposal of assets/divestitures Mar Dec 2017 Q development Investments in 14 new portfolio companies or follow-up rounds for existing startup participations; no portfolio company has been exited or divested yet Adjusted EBIT includes a write-off of around 7 million on the book value of Move24 Operational expenditures of around 7 million have been significantly reduced investing mainly in late seed stage and growing existing portfolio companies Employees (16) 1 Capital expenditure on property, plant and equipment and on intangible assets and on financial assets. 2 Converted to full-time positions. 26

27 Refinancing needs between 1bn and 2bn per annum in the coming years Maturity profile of bonds and loans as of 31 March 2018 ( billion) 5 Maturities of loans from RWE AG (lhs) Maturities of loans from EIB (lhs) 4 3 Maturities of senior bonds (lhs) Total outstanding bonds and loans (rhs) Cumulative maturities As of 31 March Senior bonds and RWE + EIB loans ( bn) % of total debt 32% 20% 10% 38% innogy s issuances since the IPO: First senior bond in April 2017 ( 750m, 1%, maturity 2025) First green bond in October 2017 ( 850m, 1.25%, maturity 2027) Another senior bond in January 2018 ( 1,000m, 1.50%, maturity 2029) Total bonds and loans of ~ 16bn: t/o senior bonds of innogy SE/ Finance B.V. of ~ 13bn t/o loans from RWE AG of ~ 2bn t/o EIB loans of ~ 1bn 27

28 Overview of senior bonds and loans As of 31 March 2018, by maturity Senior bonds Issuer Notional amount (LCY 1, million) Carrying amount (in EUR million) Coupon Maturity innogy Finance B.V. EUR % Jul 18 innogy Finance B.V. EUR 1,000 1, % Jan 19 innogy Finance B.V. EUR % Jan 20 innogy Finance B.V. GBP % Apr 21 innogy Finance B.V. EUR 1,000 1, % Aug 21 innogy Finance B.V. GBP % Jul 22 innogy Finance B.V. GBP % Dec 23 innogy Finance B.V. EUR % Jan 24 innogy Finance B.V. EUR % Apr 25 innogy Finance B.V. EUR % Okt 27 innogy Finance B.V. EUR 1, % Jul 29 innogy Finance B.V. GBP % Jun 30 innogy Finance B.V. EUR % Feb 33 innogy SE USD % Apr 33 innogy Finance B.V. GBP % Jan 34 innogy SE EUR % Oct 37 innogy Finance B.V. GBP 1,000 1, % Jul 39 innogy SE JPY 20, % 3 Feb 40 innogy SE EUR % Dec 42 innogy SE EUR % Feb 43 Total 13, % 4 thereof: step-up effect 763 Loans from RWE 5 Instrument Notional amount (LCY 1, million) Carrying amount (in EUR million) Coupon Maturity Intercompany loan6 EUR % Mar 19 Intercompany loan6 EUR % Oct 20 Total 1, % 4 Loans from EIB Instrument Notional amount (LCY 1, million) Carrying amount (in EUR million) Coupon Maturity EIB loan EUR % Oct 20 EIB loan GBP % Feb 23 Total 1, % 4 thereof: step-up effect 61 Note: Rounding differences may occur. 1 Local currency. 2 Swapped in Euro: JPY20,000m in 159m. 3 Interest rate after swap in Euro. 4 Notional-weighted average coupon. 5 One additional loan of 18m not included. 6 Related to hybrids issued by RWE. 28

29 IR contacts Marcel Rohrbach T marcel.rohrbach@innogy.com Verena Nicolaus-Kronenberg T verena.nicolaus-kronenberg@innogy.com Holger Perlwitz Fixed Income T holger.perlwitz@innogy.com Britta Wöhner T britta.woehner@innogy.com Martin Jäger T martin.jaeger@innogy.com Sandra Schuck T sandra.schuck@innogy.com 29

30 Financial calendar 10/08/2018 H1 results /11/2018 9M results /03/2019 Annual report /04/2019 Annual General Meeting /05/2019 Q1 results