RWE AG Utilities Energy/Integrated. A geared play on innogy; upgrade to Buy. 16 November 2016 BUY. Changes made in this note

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1 RWE AG A geared play on innogy; upgrade to Buy Ironically, RWE is more geared to innogy than innogy is. This is due to the provisions and debt carried by RWE that make it, well, more sensitive to anything. We estimate that a 10% move in the innogy share price affects RWE s valuation by 16%. RWE s 76.8% stake in innogy is the key driver of RWE s share price. innogy s EV ( 39bn) exceeds that of RWE ( 35bn), more so when we look at market cap ( 13.4bn versus 7.7bn respectively). Consequently, although mark to market suggests a fair value of for RWE s shares, because we see upside for innogy s shares (see key investment point one), we believe RWE s shares are worth The 14% total return leads us to upgrade RWE to a Buy. Nuclear risk is reducing. The waste decommissioning debacle is now in the final stretch with the passing of a law due soon. RWE s share of the waste decommissioning provision nuclear premium looks likely to be in the region of 1.8bn. That means RWE may decide to pay the bulk of this (c. 7bn) into the nuclear fund, probably in. The good news is that the RWE already has c 13bn cash on the balance sheet (it has sold its DEA and a stake in innogy). So, not only can the group pay off its provisions but it also has the 76.8% stake remaining in innogy, worth 13.4bn should it need further sources of funds. EBITDA is well supported by predictable earnings. innogy is responsible for c80% of RWE s EBITDA. Networks, retail (energy supply) and renewables form the three pillars of innogy s business. As well as ticking the boxes of stable earnings, low CO2, low commodity risk and no nuclear exposure, these operations complement one another well in a modernising electricity market. EPS is highly sensitive to commodity price moves. A 5/MWh move in the power price (driven by the coal price) affects EPS by up to 40% once hedges roll off in A 5/MWh move in spreads affects EPS by up to 20% once hedges roll off in We are significantly ahead of consensus. Our estimates have been marked to current commodity prices, to which RWE s earnings are highly sensitive. Bearing that in mind, we are -4%/-9%/+12%/+64% versus consensus EPS for 2016/17/18/19 respectively. For DPS, the respective numbers are +9%/- 1%/+3%/+10%. Forthcoming catalysts include the passing of the nuclear waste decommissioning law and potential compensation for nuclear taxes and early closures (neither of which are in our forecasts). Y/E 31/12., EUR m EBITDA EBIT 7,131 4,017 7,017 3,837 5,483 3,083 5,711 3,273 5,785 3,383 6,058 3,638 5,889 3,455 EPS DPS FCF per share Y/E net debt (net cash) 30,972 25,126 20,508 21,555 21,050 20,177 19,623 EBITDA Growth -9.8% -1.6% -21.9% 4.2% 1.3% 4.7% -2.8% EPS Growth -44.4% -12.4% -48.3% 5.2% 17.2% 24.0% -12.4% DPS Growth 0.0% - 0.0% 5.2% 17.2% 24.0% -12.4% ROCE 8.4% 8.0% 6.3% 6.7% 6.8% 7.3% 6.9% EV/EBITDA 5.7x 5.1x 6.1x 6.1x 5.9x 5.5x 5.6x P/E 5.7x 6.5x 12.6x 12.0x 10.2x 8.2x 9.4x Dividend Yield 8.4% 0.0% 2.4% 2.5% 2.9% 3.6% 3.2% FCF Yield 50.1% 14.3% 8.7% 16.5% 13.1% 18.5% 14.7% Source: Company data, Berenberg 16 November 2016 BUY Current price EUR /11/2016 XETRA Close Price target EUR Market cap (EUR m) Reuters RWEG.DE Bloomberg RWE GY Changes made in this note Rating: Buy (Hold) Price target: EUR (16.00) Estimates changes 7,319 old % old % old % 5, , , EBITD A EBIT 3, , , EPS Share data Shares outstanding (m) Enterprise value (EUR m) Daily trading volume ,544 4,134,878 Interactive model click here to explore * there may be a delay for the new estimates to be updated on the interactive model View all interactive models in Utilities Lawson Steele Analyst lawson.steele@berenberg.com Andrew Fisher Analyst andrew.fisher@berenberg.com Neha Saxena Analyst neha.saxena@berenberg.com 92

2 RWE AG BUY Investment thesis 16 November 2016 Reuters RWEG.DE Power prices have rallied significantly since February, which Current price Price target EUR EUR Bloomberg RWE GY Market cap (EUR m) 7,319 14/11/2016 XETRA Close EV (EUR m) 33,544 Non-institutional shareholders Trading volume 4,134,878 Free float 85.0% Share performance RW Energie-Beteilligungsgesellschaft: 15.0% High 52 weeks EUR Low 52 weeks EUR Business description RWE generates, distributes and trades electricity to industrial and residential customers. The company also produces natural gas and oil, transports and distributes gas. Performance relative to SXXP SX6P 1mth -15.2% -4.6% 3mth -22.3% -7.6% 12mth 15.5% 22.1% directly lifts profitability of RWE s fixed-cost generation, ie nuclear and lignite plants, representing 80% of RWE s German generation, c100twh. German utilities, including RWE, are close to an agreement with the government on nuclear waste provisions. The devil is in the final detail, but it looks like an estimated c 6.8bn risk premium may be the answer in RWE s case. innogy s IPO depressurises the balance sheet, creating financing options not available to the likes of E.ON. RWE management is doing what it does best: running an evertighter ship. Cost-cutting and efficiency improvements have been at the forefront of the current CEO and CFO s strategy. The current programme calls for another 900m to be cut over Part of this cost cutting will be aimed at innogy s UK supply business that has suffered from a poor rollout of the new CRM system in With new management in place, we expect a recovery in profitability from, and for it to be in the black by. Our valuation is based on a blend of metrics: a DCF SOTP, a dividend discount model and a target P/E and yield. Profit and loss summary EURm Revenues 48,468 48,599 47,215 47,785 48,530 EBITDA 7,131 7,017 5,483 5,711 5,785 EBITA 4,017 3,837 3,083 3,273 3,383 EBIT 4,017 3,837 3,083 3,273 3,383 Associates contribution Net interest 1,848 1,589 1,673 1,517 1,410 Tax Minorities Net income adj. 1,282 1, EPS reported EPS adjusted Year end shares Average shares DPS Growth and margins Revenue growth -7.5% 0.3% -2.8% 1.2% 1.6% EBITDA growth -9.8% -1.6% -21.9% 4.2% 1.3% EBIT growth -25.2% -4.5% -19.7% 6.2% 3.4% EPS adj growth -44.4% -12.4% -48.3% 5.2% 17.2% FCF growth 74.0% -71.4% -39.3% 89.0% -20.7% EBITDA margin 14.7% 14.4% 11.6% 12.0% 11.9% EBIT margin 8.3% 7.9% 6.5% 6.8% 7.0% Net income margin 2.6% 2.3% 1.2% 1.3% 1.5% FCF margin 7.6% 2.2% 1.4% 2.5% 2.0% Valuation metrics P / adjusted EPS 5.7x 6.5x 12.6x 12.0x 10.2x P / book value 0.6x 0.8x 0.9x 0.9x 0.8x FCF yield 50.1% 14.3% 8.7% 16.5% 13.1% Dividend yield 8.4% 0.0% 2.4% 2.5% 2.9% EV / sales 0.8x 0.7x 0.7x 0.7x 0.7x EV / EBITDA 5.7x 5.1x 6.1x 6.1x 5.9x EV / EBIT 10.2x 9.3x 10.9x 10.6x 10.1x EV / FCF 11.2x 34.1x 52.6x 28.8x 35.9x EV / cap. employed 0.7x 0.7x 0.6x 0.7x 0.7x Cash flow summary EURm Net income 1,693-1, ,317 1,440 Depreciation 3,114 3,180 2,400 2,438 2,402 Working capital changes 1, Other non-cash items , Operating cash flow 6,368 3,214 3,485 3,991 3,734 Capex -2,703-2,164-2,847-2,786-2,779 FCFE 3,665 1, , Acquisitions, disposals 364 4,161 5, Other investment CF 2,530 3, , Dividends paid -1,061-1, Buybacks, issuance Change in net debt ,724-5, Net debt 30,972 25,126 20,508 21,555 21,050 FCF per share Key ratios Net debt / equity 263.1% 282.5% 239.0% 272.5% 238.4% Net debt / EBITDA 4.3x 3.6x 3.7x 3.8x 3.6x Avg cost of debt 6.1% 5.7% 7.3% 7.2% 6.6% Tax rate 20.9% 37.8% 25.0% 25.0% 27.0% Interest cover 2.2x 2.4x 1.8x 2.2x 2.4x Payout ratio 47.8% 0.0% 30.0% 30.0% 30.0% ROCE 8.4% 8.0% 6.3% 6.7% 6.8% Capex / sales 5.6% 4.5% 6.0% 5.8% 5.7% Capex / depreciation 86.8% 68.1% 118.6% 114.3% 115.7% Key risks to our investment thesis Power prices fall. Nuclear provision agreement fails to materialise. Interest rates rise. innogy share price falls. Lawson Steele Analyst lawson.steele@berenberg.com Andrew Fisher Analyst andrew.fisher@berenberg.com Neha Saxena Analyst neha.saxena@berenberg.com 93

3 RWE investment thesis in pictures Chart 1: RWE is more geared to innogy than innogy itself ( m) Chart 2: innogy is the key contributor to RWE s EBITDA ( m) 45,000 40,000 35,000 30,000 25,000 20,000 34,316 39,211 15,000 13,440 10,000 7,666 5,000 - RWE EV innogy EV RWE mkt cap innogy mkt cap (RWE stake) Source: Bloomberg Chart 3: EPS is highly sensitive to power price movements Chart 4: RWE valuation metrics ( per share) 50% 40% 30% 20% 10% 0% (10%) (20%) (30%) (40%) (50%) 39% 35% 14% 7% 6% (7%) (6%) (14%) (35%) (39%) EPS with + 5/MWH pprice EPS with - 5/MWH pprice Chart 5: P/E and EPS three-year CAGR versus sector cheap against the sector (10.0%) (5.0%) 0.0% 5.0% 10.0% Chart 6: DY and DPS three-year CAGR versus sector reflects low payout 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% (10.0%) (5.0%) 0.0% 5.0% 10.0% Sector Company Sector Company 94

4 RWE investment thesis What s new: We have updated our model following the spin-off of innogy and have marked to market our commodity assumptions. Key investment point one: innogy is key to RWE s valuation Key stat: RWE owns 76.8% of innogy. innogy s EV is 39bn, which is greater than RWE s 35bn. innogy s total market cap is 17.5bn, and RWE s stake in innogy is worth 13.4bn, dwarfing RWE s 7.7bn. The chart below shows innogy s contribution to RWE s valuation. RWE/ innogy valuation breakdown Source: Company reports, Berenberg estimates We believe that innogy will be unencumbered by the burdens that weighed on RWE over the last decade. Combined with low commodity price exposure, no nuclear liabilities and c60% regulated quasi-regulated earnings, innogy has started life with a sensible capital structure underpinned by relatively reliable income. We believe that this is a platform for a high dividend payout; innogy intends to pay 70-80% of its adjusted net income as dividends (see full investment case in the innogy section of this note). We estimate innogy will deliver 3% EBITDA CAGR from , accounting for 75-95

5 80% of RWE s EBITDA. Innogy s EBITDA dominates RWE ( m) Key investment point two: RWE s EPS is highly sensitive Key stat: A 5/MWh move in the German power price, triggered by a coal (rather than carbon) price move, shifts EPS by 35-40% on unhedged earnings (2019 onwards). Significant hedging in 2016 and limits this to 6%. RWE typically hedges forward most of its t, t+1, t+2 and some of t+3 outright generation (ie nuclear and lignite). In the short term, this mitigates the impact of power prices but ultimately years further out are naked and open to the full impact of power prices. EPS is highly sensitive to power price moves (%) 50% 40% 30% 35% 39% 20% 10% 0% (10%) (20%) 7% 6% (7%) (6%) 14% (14%) (35%) (39%) (30%) (40%) (50%) EPS with + 5/MWH pprice EPS with - 5/MWH pprice 96

6 Coal is the key driver of German power prices. The German electricity market is heavily over-supplied and, consequently, coal is the marginal fuel. The dynamics of the coal market are largely influenced by China. Chinese cutbacks were responsible for the strong coal rally, up 112% since the February low of $36pt. Since then, the Chinese government has attempted to put a dampener on capacity closures, but seemingly to little avail. Key points are as follows. The threat of tight coal supply in China continues. Beijing struggles to make miners embrace loosening of capacity controls due to not just lower output but much higher-than-anticipated coal consumption since July. The government called 22 major miners in late October to stress the need for output to be ramped up. Many miners are reticent to switch gear because of heavy costs of lifting output for a limited time, or due to safety risks (accidents are more common in winter). There are some signs that producers are responding. Output at key state-owned mines in 10 major producing provinces rose 50% to 30.0mt between 11 and 20 October from the first 10 days of the month (CCTD data). Production from 1 to 20 October was 49.0mt, growing 13% from the same period in September, and +11% from August. Increased winter demand and lower temperature looms. China s six main power groups are already showing signs of strain, with inventory down and consumption up. They held combined stock of 12mt as of 27 October, down 8% yoy, while combined daily coal consumption was 0.6mt, +15% yoy. Higher-than-expected heavy industry production, a spike in residential power consumption due to the hot summer and lacklustre hydro generation lifted thermal power production 4% yoy from April to September. Capacity cuts in May cut 16% of China's coal mining capacity (annual working days from 330 to 276 days). Since then, Beijing has opened the door for over 800 mines to revert to a 330-day annual working schedule. Key investment point three: reducing nuclear risk Key stat: At 10.5bn end 2015, RWE s German nuclear provisions represent 30% of its enterprise value. The waste management provisions account for 5.6bn (fuel elements 4.6bn, 1.0bn nuclear waste), with the remainder 4.9bn relating to costs for cooldown and plant decommissioning. Government set to approve proposal on waste transfer soon: The deal will involve the handover of nuclear waste storage liabilities to a government fund, leaving RWE with an estimated c 7bn bill (including 1.5bn waste disposal risk premium). We expect the nuclear waste decommissioning liabilities and premium to be fully paid off in, given management s desire to take uncapped risk off the balance sheet. The legislation has now been passed to lower parliament for a final vote, which should come through in H1. No need for a capital raise: Unlike E.ON, RWE has sufficient balance sheet flexibility to pay the nuclear premium, even if that ultimately requires a sell down its 77% innogy stake. We believe that that is not only a feasible option, it will be politically acceptable as well. innogy s strong asset base helps back RWE s provisions, and selling down RWE s stake in innogy would not destroy value but instead help reduce RWE s leverage. Still 5.5bn decommissioning liability sitting on the books: This includes estimated costs for the shutdown and dismantling of the reactors. Preventing any escalation of these provisions will be significant for RWE s equity performance. Financial expenses could benefit from nuclear waste repayments: 4.4% provisioning replaced with c1.5% debt cost. On a 5bn pay down, that could be worth c 150m. 97

7 Valuation and sensitivity analysis We value the shares using a blend of metrics: a DCF-based sum-0f-the-parts, dividend discount model, target yield and target P/E. Our blended price target is per share (%12 upside). This offers a total shareholder return of 14%. RWE s -20 EPS growth is 8.4% versus the sector s 5.1%, and its P/E is at 12.5x, a 16% discount versus the sector s 14.8x. Furthermore, -20 DPS growth is 8.4% compared to the sector s 4.4%. Valuation under different metrics ( /share) SOTP valuation ( /share) SOTP DDM PE Yield Metric Price FV P/E versus EPS three-year CAGR (10.0%) (5.0%) 0.0% 5.0% 10.0% Dividend yield versus DPS three-year CAGR 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% (10.0%) (5.0%) 0.0% 5.0% 10.0% Sector Company Sector Company using three-year forward EPS CAGR using three-year forward DPS CAGR 98

8 Changes to numbers: Berenberg versus consensus Estimate changes Estimate Changes EBITDA (New - as reported; m) 7,131 7,017 5,483 5,711 5,785 6,058 5,889 EBITDA (Old - as reported; m) Change +0% +0% +0% +0% +0% +0% +0% EBIT (New - as reported; m) 4,017 3,837 3,083 3,273 3,383 3,638 3,455 EBIT (Old - as reported; m) Change +0% +0% +0% +0% +0% +0% +0% EPS (New - as reported; ) EPS (Old - as reported; ) Change +0% +0% +0% +0% +0% +0% +0% DPS (New - as reported; ) DPS (Old - as reported; ) Change +0% +0% +0% +0% +0% +0% +0% Source: Berenberg Berenberg versus consensus Berenberg Forecasts vs Consensus EBITDA* ( m) 7,131 7,017 5,483 5,711 5,785 6,058 5,889 Consensus (Average) 6,587 6,998 5,405 5,478 5,403 5,476 5,948 Berenberg +/- vs Cons +8% +0% +1% +4% +7% +11% -1% EBIT* ( m) 4,017 3,837 3,083 3,273 3,383 3,638 3,455 Consensus (Average) 4,104 3,701 3,004 3,067 2,971 3,172 3,665 Berenberg +/- vs Cons -2% +4% +3% +7% +14% +15% -6% Net Income* ( m) 1,282 1, Consensus (Average) 1,275 1, Berenberg +/- vs Cons +1% +1% +11% -17% +7% +36% -18% EPS* ( ) Consensus (Average) Berenberg +/- vs Cons -1% +2% -4% -9% +12% +64% +24% DPS ( ) Consensus (Average) Berenberg +/- vs Cons +2% -100% +9% -1% +3% +10% -43% * Based on company's definition of metric, Bloomberg 99

9 Sensitivity analysis Sensitivity analysis Sensitivities EBITDA Sensitivity* to +/- 100 m Cost savings 0% 0% 2% 2% 2% 2% 2% +/- 5 /MWh Power price driven by coal price 0% 0% 1% 1% 2% 7% 7% +/- 5 /MWh Spreads 0% 0% 0% 0% 1% 3% 3% +/- 5 /kw UK & Ger capacity payments 0% 0% 0% 1% 1% 1% 1% +/ % UK retail margin 0% 0% 2% 2% 2% 2% 2% Net Income Sensitivity* to +/- 100 m Cost savings 0% 0% 13% 12% 10% 8% 9% +/- 5 /MWh Power price driven by coal price 0% 0% 7% 6% 14% 35% 39% +/- 5 /MWh Spreads 0% 0% 2% 2% 5% 14% 17% +/- 5 /kw UK & Ger capacity payments 0% 0% 0% 5% 4% 4% 4% +/ % UK retail margin 0% 0% 11% 11% 9% 8% 9% * Ceteris Paribus; e.g. does not take account of hedged positions. Source: Berenberg 100

10 Key assumptions Key assumptions Power Price Forecasts Country Unit UK (Local) /MWh UK (EUR) EUR/MWh Germany EUR/MWh Nordic EUR/MWh Italy EUR/MWh Benelux EUR/MWh France EUR/MWh Spain/Portugal EUR/MWh Fuel Price Forecasts Fuel Unit Oil (Brent) $/bbl Coal $/t Gas (Europe LTC) EUR/MWh Gas (Italy) EUR/MWh Gas (UK) /MWh Carbon UK floor /t US Gas Henry Hub $/MWh Uranium EUR/MWh Carbon EUR/t Year end currency rates EURGBP EURTRY EURSEK EURUSD EURRUB EURMXN USDBRL Inflation Central Europe 0.8% 0.1% 0.2% 1.4% 1.4% 1.4% 1.4% Eastern Europe 5.8% 9.0% 5.4% 5.1% 5.1% 5.1% 5.1% UK 1.5% 0.0% 0.9% 1.7% 1.7% 1.7% 1.7% Nordic 0.5% -0.2% 0.6% 1.4% 1.4% 1.4% 1.4% Spain/Portugal -0.2% -0.1% 0.1% 1.3% 1.3% 1.3% 1.3% US 1.6% 0.1% 1.5% 2.4% 2.4% 2.4% 2.4% Source: Berenberg 101

11 Financials Income statement Income Statement ( m) Revenue 48,468 48,599 47,215 47,785 48,530 49,137 49,513 Reported EBITDA 7,131 7,017 5,483 5,711 5,785 6,058 5,889 Change -10% -2% -22% +4% +1% +5% -3% Margin +15% +14% +12% +12% +12% +12% +12% Depreciation (3,114) (3,180) (2,400) (2,438) (2,402) (2,421) (2,434) Other OPEX Reported EBIT 4,017 3,837 3,083 3,273 3,383 3,638 3,455 Change -25% -4% -20% +6% +3% +8% -5% Margin +8% +8% +7% +7% +7% +7% +7% Net Financial Expenses (1,848) (1,589) (1,673) (1,517) (1,410) (1,415) (1,380) Tax (553) (603) (352) (439) (533) (600) (560) Other 19 (66) Minorities (353) (454) (476) (705) (723) (734) (737) Reported Net Income 1,282 1, Change -45% -12% -48% +5% +17% +24% -12% Margin +3% +2% +1% +1% +1% +2% +2% Number of Shares Per Share: Basic EPS 2.77 (0.28) Change -162% -110% -319% +62% +17% +24% -12% Reported EPS Change -44% -12% -48% +5% +17% +24% -12% DPS Change +0% -100% +0% +5% +17% +24% -12% Payout 48% 0% 30% 30% 30% 30% 30% Source: Berenberg 102

12 EBITDA attribution ( m) Conventional Power Generation ( m) Revenue 1,888 2, (137) 94 (268) Change +20% +18% -57% -71% -149% -169% -384% % Group +4% +5% +2% +1% -0% +0% -1% EBITDA 2,522 2,285 1,302 1,327 1,191 1,400 1,186 Change +3% -9% -43% +2% -10% +18% -15% Margin +134% +103% +136% +473% -867% +1484% -443% % Group +35% +33% +24% +23% +21% +23% +20% EBIT Change -29% -39% -39% +8% -18% +71% -37% Margin +52% +27% +38% +140% -235% +584% -129% % Group +24% +16% +12% +12% +10% +15% +10% Trading/Gas Midstream ( m) Revenue 3,409 3,318 3,318 3,318 3,318 3,318 3,318 Change -24% -3% +0% +0% +0% +0% +0% % Group +7% +7% +7% +7% +7% +7% +7% EBITDA Change -66% -43% -62% +106% +29% +0% +0% Margin +8% +5% +2% +4% +5% +5% +5% % Group +4% +2% +1% +2% +3% +3% +3% EBIT Change -67% -43% -63% +113% +29% -1% -1% Margin +8% +5% +2% +4% +5% +5% +5% % Group +7% +4% +2% +4% +5% +4% +5% Innogy ( m) Revenue 45,681 45,568 45,378 46,656 47,857 48,264 49,021 Change -6% -0% -0% +3% +3% +1% +2% % Group +94% +94% +96% +98% +99% +98% +99% EBITDA 4,454 4,684 4,361 4,482 4,644 4,708 4,752 Change +2% +5% -7% +3% +4% +1% +1% Margin +10% +10% +10% +10% +10% +10% +10% % Group +62% +67% +80% +78% +80% +78% +81% EBIT 4,051 4,095 2,905 2,984 3,116 3,144 3,168 Change +1% +1% -29% +3% +4% +1% +1% Margin +9% +9% +6% +6% +7% +7% +6% % Group +101% +107% +94% +91% +92% +86% +92% Other* ( m) EBITDA (131) (116) (242) (226) (214) (214) (214) o/w Unallocated Cost Savings o/w Unallocated Aqn / Disp % Group -2% -2% -4% -4% -4% -4% -4% EBIT (1,287) (1,010) (242) (226) (214) (214) (214) o/w Unallocated Cost Savings o/w Unallocated Aqn / Disp % Group -32% -26% -8% -7% -6% -6% -6% * Includes, if applicable, other group income/costs and unallocated cost savings, CAPEX returns and acquisitions and disposals Source: Berenberg 103

13 Cash flow statement Cash Flow ( m) Net Income 1,693 (1,240) 853 1,317 1,440 1,623 1,515 Depreciation 3,374 2,373 2,400 2,438 2,402 2,421 2,434 Working Capital 1, (14) (109) (63) (63) Other Operating Cash Flow (559) 1, Operating Cash Flow 6,368 3,214 3,485 3,991 3,734 3,981 3,887 CAPEX (2,703) (2,164) (2,847) (2,786) (2,779) (2,627) (2,813) FCF (Post CAPEX) 3,665 1, , ,353 1,074 Acquisitions and Disposals 364 4,161 5, FCF (p. CAPEX, Aq&D) 4,029 5,211 5,964 1, ,353 1,074 Other Investment Cash Flow (2,530) (3,903) (240) (6,533) (337) (297) (297) Dividends (1,061) (1,070) - (174) (183) (215) (267) FCF (p. CAPEX, Aq&D, Divs) ,724 (5,502) Buybacks and Equity Issuance Borrowings (1,199) Other Financing, Disc and FX (140) (1,404) Net Change in Group Cash (779) (649) 5,724 (5,502) Source: Berenberg 104

14 Balance sheet statement Balance Sheet ( m) Intangible Fixed Assets 12,797 13,215 13,215 13,215 13,215 13,215 13,215 PP&E 31,059 29,357 24,478 24,826 25,202 25,408 25,787 Other Non-Current Assets 10,368 8,881 8,881 8,881 8,881 8,881 8,881 Total Non-Current Assets 54,224 51,453 46,574 46,922 47,298 47,504 47,883 Inventories and Receivables 10,587 8,634 8,388 8,489 8,622 8,730 8,796 Cash 3,171 2,522 8,246 2,744 3,178 4,020 4,531 Other Liquid Assets 4,410 7,437 7,437 7,437 7,437 7,437 7,437 Other Current Assets 13,924 9,288 9,288 9,288 9,288 9,288 9,288 Assets Held for Sale 5, Total Current Assets 32,092 27,881 33,359 27,958 28,525 29,475 30,052 Total Assets 86,316 79,334 79,933 74,880 75,823 76,979 77,935 Short-Term Debt (3,342) (2,362) (4,100) (4,100) (4,100) (4,100) (4,100) Payables (6,309) (6,122) (5,948) (6,019) (6,113) (6,190) (6,237) Provisions (5,504) (5,186) (5,191) (5,049) (5,047) (5,046) (5,044) o/w Nuclear Liabilities (416) (334) (339) (197) (195) (194) (192) o/w Pensions o/w Other Provisions (5,088) (4,852) (4,852) (4,852) (4,852) (4,852) (4,852) Other Current Liabilities (10,430) (11,436) (11,436) (11,436) (11,436) (11,436) (11,436) Liabilities of Businesses Held for Sale (2,635) (19) Total Current Liabilities (28,220) (25,125) (26,675) (26,604) (26,696) (26,771) (26,817) Long-Term Debt (15,224) (16,718) (14,051) (14,051) (14,051) (14,051) (14,051) Provisions (27,540) (24,623) (26,652) (22,339) (22,271) (22,241) (22,199) o/w Nuclear Liabilities (9,951) (10,120) (10,275) (5,962) (5,894) (5,864) (5,822) o/w Pensions (7,871) (5,842) (7,716) (7,716) (7,716) (7,716) (7,716) o/w Other Provisions (9,718) (8,661) (8,661) (8,661) (8,661) (8,661) (8,661) Other Non-Current Liabilities (3,560) (3,974) (3,974) (3,974) (3,974) (3,974) (3,974) Total Non-Current Liabilities (46,324) (45,315) (44,677) (40,364) (40,296) (40,266) (40,224) Shareholders' Equity (7,388) (5,847) (3,154) (2,402) (3,209) (4,210) (5,064) Minorities (4,384) (3,047) (5,427) (5,510) (5,622) (5,732) (5,830) Total Equity (11,772) (8,894) (8,581) (7,911) (8,831) (9,942) (10,894) Total Liabilities and Equity (86,316) (79,334) (79,933) (74,880) (75,823) (76,979) (77,935) Net Debt (As Reported) 30,972 25,126 20,508 21,555 21,050 20,177 19,623 Economic Net Debt 30,972 25,126 20,508 21,555 21,050 20,177 19,623 Net Debt / EBITDA (As Reported) Economic Net Debt / EBITDA Source: Berenberg 105