Agenda. Overview. Strategy Q&A

Transcription

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2 Agenda SWISS EQUITIES CONFERENCE BKW Overview Strategy Q&A

3 Overview

4 BKW Key figures 2016 Operating revenue CHF 2.9bn EBIT CHF 384m Operating Cash flow CHF 358m Liquidity CHF 1.2bn Net debt CHF 439m Employees Generation Distribution grid 6,100 FTE 11.2 TWh ~22'000 km 37.5% 10.0% 52.5% Shareholders Canton of Berne Groupe E Free float

5 BKW business areas SWISS EQUITIES CONFERENCE BKW Energy Grid Services Production (capacity: ~3'700 MW), trading, sales Distribution grid: ~22'000km Services around infrastructure Revenue: CHF 1,500m Employees: 1,000 FTE Revenue: Employees: CHF 900m 800 FTE Revenue: Employees: CHF 570m 4,300 FTE

6 BKW BKW growth strategy BKW Energie AG

7 BKW Negative price effects on operating revenue successfully compensated on EBIT-level CHF m CHF 600m Market price of electricity EUR/MWh EUR/MWh HY 2017 price effect on operating revenue

8 BKW Share price and volume both increased CHF 65 Share price CHF Daily volume CHF 0.4m Share price CHF Daily volume CHF 0.5m Share price CHF Daily volume CHF 1.0m Share price CHF Daily volume CHF 2.1m Volume in pcs 40' ' ' ' ' ' ' ' BKW SPI

9 Strategy

10 BKW Market environment Market price of electricity 60 EUR/MWh International factors - Low commodity and CO2 prices - Subsidies for renewable energies - Economic policy 30 EUR/MWh Classical energy business under heavy pressure BKW responds with its forward strategy

11 BKW BKW strategy based on three business areas Existing competencies as platform for growth - Grow services - Grow regulated energy income - Foster regulated grid income Keep recovery potential in energy A robust business model: growth, risk diversification and sustainability

12 BKW Strengthen energy Investment in renewable energies: wind & small hydro power Installed capacity in MW Focus on operating cost of energy production CHF m % % Cost/TWh Buildup and strengthen energy trading Integrated approach: optimisation energy production trading sales Reducing dependency on energy exposed to market while keeping recovery potential

13 BKW Electricity grid: regulated business model Regulatory EBIT Regulated WACC on Regulatory Asset Base (RAB): 3.8% in 2018 generates Cash inflows WACC and depreciation charged to customers used for Investments in grid Maintenance and modernisation; influence on RAB leads to Free Cash flow Used to finance equity and debt Grid business ensures stability in EBIT and cash flow generation

14 BKW Develop grid Owner of largest distribution grid in Switzerland Investments: CHF 120m p.a. ~22,000 km Largest shareholder of Swissgrid: 36.4% (transmission grid owner) Increase efficiency, implement "smart grid" Size of grid business adequate; optimized to ensure reliable EBIT-contribution

15 BKW Buildup services Business fields: services around infrastructure Building technologies Engineering Grid infrastructure Digital management of decentralized production Business rationale Reduce dependency on energy prices Capability to add value in growth markets through existing expertise and new integrated offerings Fast and profitable growth CHF m operating revenue >1bn % % % Target Acquisitions BKW delivers integrated solutions into large, sustainable and growing markets

16 Building technologies: buildings are in the middle of an intelligent and integrated energy supply system Business rationale Market volume CHF 20bn p.a.; fragmented structure BKW solutions meet market trends Decentralisation of energy production Trend towards integrated solutions, driven by increasing complexity of new technologies Major potential in energy efficiency and need for comfort Regional structure BKW Execution Successful growth: more than 25 acquisitions Regional approach: matches industry structure and ensures margins Synergies: sales competencies, procurement and administrative costs Effizienzsteigerung CHF m operating revenue 300 CAGR 35.9% planning/consulting installation maintenance New market opportunities due to increasing complexity match with BKW strategy and expertise

17 BKW Grid infrastructure: multi-grid services Business rationale Swiss market for grid services > CHF 1.5bn p.a. Largely identical customer base for multi-grid infrastructure services Increased complexity of networks BKW with longtime expertise Extensive and widespread networks need considerable maintenance Water grid: significant needs for maintenance and renovation Structure Execution Successful growth: more than 5 acquisitions Electricity grid: strong track record with major market share: High tension >60%, medium/low tension >20% High competencies and experience: capability to exploit synergies of scale CHF m operating revenue CAGR 8.0% planning/consulting installation maintenance BKW successfully provides comprehensive services in the growing markets of complex networks

18 Engineering: acquired groups as basis for further growth BKW Business rationale Infrastructure Germany: investments of EUR 260bn until 2030 Considerable need to invest in improving and expanding infrastructures Growing demand for engineering services BKW with wide-ranging expertise Resilient business: diversified customer segments (manufacturing, public sector) Target market positioning: local based service provider with capability to operate complex projects Business with attractive margins Structure and market positioning Large international players with wide competencies gap Small regional players with limited competencies BKW network of regional players with wide competencies Execution Successful growth: more than 15 acquisitions Buildup of strong engineering network in D-A-CH region Risk limitation: focus on planning/consulting only CHF m operating revenue CAGR 27.6% 50 planning/consulting installation maintenance Wide-ranging expertise to provide comprehensive solutions for infrastructure, energy and environment

19 BKW Growth investments in services and energy business Other Maintenance/ replacement 56% Grid CHF 1.3bn in next 4 years Services Growth 44% Energy Significant maintenance/replacement investments in grid business

20 BKW BKW strategy shaped to create value Existing competencies as platform for growth - Grow services - Grow regulated energy income - Foster regulated grid income Keep recovery potential in energy Investments: CHF 1.3bn in 4 years Financed by: strong operating cash flow BKW business model geared toward growth: robust, profitable and sustainable

21 Questions?

22 Disclaimer SWISS EQUITIES CONFERENCE BKW This presentation contains forward-looking statements which are made on the basis of current expectations and assumptions. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. Potential risks and uncertainties include, among others, such factors as market and economic conditions, governmental regulations, competitive conditions, interest rates and fluctuation in currency exchange rates. Although BKW believes that its expectations reflected in any such forward-looking statement are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved. BKW undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.