2017 Full Year Results and Outlook March 2018

Transcription

1 207 Full Year Results and Outlook March 208

2 Disclaimer 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 materialisation 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. Page 2

3 Development of adjusted EBITDA dominated by recovery of earnings at Supply & Trading Group RWE stand-alone ( million) 5,403 FY 206,928 > Lignite & Nuclear: Declining generation margins Lower non-recurring items compared to Lignite & Nuclear -408 European Power +86 > European Power: Strong contribution from commercial asset optimisation Higher non-recurring items compared to Supply & Trading innogy Other, consolidation > Supply & Trading: Strong earnings contribution after losses in 206 > innogy as part of RWE stand-alone: dividend inflow of 683 million in 207. Previous year pro forma appropriation of profits of innogy subsidiaries of 730 million 5,756 FY 207 2,066 Page 3

4 Lignite & Nuclear Driven by lower realised generation margins Key financials FY 207 versus FY 206: million Adj. EBITDA t/o non-recurring items FY FY 206 change, Lower realised generation margins Lower income at Mátra and classification as asset held for sale as of Q2 207; i.e. earnings contribution from Q2 207 onwards in non-operating result Lower non-recurring items Phase out of nuclear fuel tax in 206 Depreciation Operating cost improvements Adj. EBIT t/o non-recurring items Capex 2 Cash contribution EBITDA outlook for 208: between 350 and 450 million Lower realised generation margins (hedged outright price: ~ 28/MWh vs. 3/MWh in 207) Closure of Gundremmingen B nuclear unit Operating cost improvements Non-recurring items (not included in non-operating result). 2 Cash contribution = adj. EBITDA minus capex with effect on cash (before changes in provisions), excl. investments from assets held for sale. Page 4

5 European Power Higher earnings mainly due to favourable CAO result and higher non-recurring items Key financials FY 207 versus FY 206: million FY 207 FY 206 change Significantly higher income from commercial asset optimisation (CAO) UK Continental Europe Higher positive non-recurring items Operating cost improvements Higher realised gas generation margins Adj. EBITDA Lower realised hard coal generation margins t/o non-recurring items Depreciation Adj. EBIT t/o non-recurring items 2 Capex EBITDA outlook for 208: between 300 and 400 million Lower realised generation margins Return of commercial asset optimisation to normalised level Absence of positive one-offs from 207 Cash contribution Higher earnings contribution from UK capacity market Total adjusted EBITDA includes further income from other subsidiaries. 2 Non-recurring items (not included in non-operating result). 3 Cash contribution = adj. EBITDA minus capex with effect on cash (before changes in provisions). Page 5

6 Hedging Improved average hedge prices due to favourable development of spreads Expected positions and hedge status as of 3 December 207 Outright (Lignite & Nuclear) ~3 ~28 ~28 ~3 98 TWh TWh TWh TWh >90% >90% >70% E 209E 2020E Open position Fully hedged position Implicit fuel hedge Average hedge price ( /MWh) Change to reported average hedge price as of 30 Sept 207 Spread (European Power) 78 TWh TWh TWh TWh >90% >40% <0% E 209E 2020E Open position Hedged position (%) Total in-the-money spread. Page 6

7 /MWh Significant improvement of fuel spreads in 207 Development of German fuel spreads Months to Delivery Cal6 Cal7 Cal8 Cal9 Cal20 Fuel spread defined as: Power price (pass-through-factor carbon EUA price + pass-through-factor coal coal price + pass-through-factor gas gas price). Source: Bloomberg; data until 3 December 207. Page 7

8 Supply & Trading Strong earnings contribution after losses in previous year Key financials FY 207 versus FY 206: million FY 207 FY 206 change Normalised trading result after losses in 206 Strong earnings contribution of Gas & LNG Adj. EBITDA Absence of income from disposal of Lynemouth power plant in Q 206 t/o non-recurring items Depreciation Adj. EBIT t/o non-recurring items Capex 2 Cash contribution EBITDA outlook for 208: between 00 and 300 million > Expected longer-term average earnings contribution of approx. 200 million Non-recurring items (not included in non-operating result). 2 Cash contribution = adj. EBITDA minus capex with effect on cash (before changes in provisions). Page 8

9 Adjusted net income FY 207 reaches 973 million Group RWE stand-alone ( million) > RWE stand-alone adj. EBITDA includes 5,756 Adj. EBITDA 2,066 operating income from Lignite & Nuclear, European Power and Supply & Trading and dividend from innogy -2,0 Adj. depreciation -592 > All effects related to the reimbursement of the nuclear fuel tax are adjusted 3,646 -, Adj. EBIT Adj. financial result Adj. tax Adj. minorities & hybrids, > Financial result adjusted for effects from changes in discount rates for other long-term provisions, interest on nuclear fuel tax, one-off costs from hybrid bond buy back and interest income from tax audit for previous years > Limited adjusted taxable earnings at RWE stand-alone > Hybrid bond partly classified as equity pursuant to IFRS,232 Adjusted net income 973 Page 9

10 High FY 207 distributable cash flow despite negative effects in working capital 206 RWE stand-alone 207 ( million), Adj. EBITDA Change in provisions & other non-cash items 2, > innogy dividend of 683 million fully reflected in Adj. EBITDA > Changes in provisions refer mainly to legacy provisions, nuclear provisions and restructuring provisions Capex Cash contribution Change in operating working capital Cash interests/taxes -404, > Change in operating working capital 207 mainly impacted by phasing out of working capital optimisation measures from previous years and slightly higher gas inventories > Strong improvement in cash interest/taxes compared to FY 206 is another main driver for higher distributable cash flow -78 Minorities + hybrids Distributable cash flow 533 Page 0

11 Strong decline of net debt due to positive DiCF, nuclear fuel tax refund and reduction of pension provisions Development of net debt (RWE stand-alone) ( million) 6, , ,00 4,50 Net debt 3 Dec 206 Distributable cash flow Dividend RWE AG Financial investments/ Other changes in Change in provisions Change in hybrid capital Net debt 3 Dec 207 (DiCF) divestments net financial (net debt debt, 2 relevant) 2 Includes.7 bn of nuclear fuel tax refund net of interest and tax. Furthermore it includes mainly variation margins. 2 Net of contribution to nuclear energy fund ( 7.0 billion). Page

12 RWE stand-alone Outlook for 208 FY 207 FY 208e 2. bn Adjusted EBITDA.4 bn.7 bn bn Adj. depreciation > Stable development expected bn Adj. net financial result > Significant improvement from call and buy back of hybrids in 207 and settlement of nuclear energy fund in July bn Adj. taxes > Stable development expected - 0.bn Adj. minorities & hybrid > Stable development expected.0 bn Adjusted Net Income Dividend (per share) 0.5 bn 0.8 bn > Normal dividend 0.70 > Management target > Special dividend Dividend proposal of.50 for RWE AG s 207 fiscal year, subject to the passing of a resolution by the 26 April 208 Annual General Meeting. Page 2

13 Clear perspective of growing dividend Elements of dividend policy for next two years > Dividends driven by distributable cash flow of RWE stand-alone > Target to fully pay out entire distributable cash flow over planning horizon Smooth short-term volatility of trading business > Objective of sustainable dividend payout No pay out of substance Anticipate known power price developments Operational dividend Special dividend Dividend proposal for RWE AG s 207 fiscal year, subject to the passing of a resolution by the 26 April 208 Annual General Meeting. 2 Envisaged by management board. Page 3

14 Appendix Page 4

15 Reconciliation to FY 207 adjusted net income ( million) RWE stand-alone RWE Group Reported Adjustments Adjusted Reported Adjustments Adjusted Adjusted EBITDA 2,066-2,066 5,756-5,756 Depreciation ,0 - -2,0 Adjusted EBIT,474 -,474 3,646-3,646 Non-operating result Financial result ,060 Taxes on income (Tax rate) -247 (%) (6%) -74 (24%) -630 (24%) Income 2,073 -,037,036 2,35-359,956 - Non-controlling interests Hybrid investors interest Net income 2,60 -,87 973, ,232 Mathematical prefix. Page 5

16 Income statement FY 207 ( million) RWE stand-alone RWE Group Revenue (including natural gas tax/electricity tax) 5,653 44,585 Natural gas tax/electricity tax -3-2,5 Revenue 5,522 42,434 Other operating result, Cost of materials -2,686-3,326 Staff costs -,699-4,704 Depreciation, amortisation and impairment losses ,939 Income from investments accounted for using the equity method Other income from investments 76 8 Financial result Income before tax 2,320 3,056 Taxes on income Income 2,073 2,35 of which: non-controlling interest of which: RWE AG hybrid capital investors interest of which: net income/income attributable to RWE AG shareholders 2,60,900 Includes innogy dividend of 683 million. Page 6

17 Balance sheet as at 3 December 207 ( million) RWE stand-alone RWE Group Assets Intangible assets,036 2,383 Property, plant and equipment 6,64 24,904 Investment property Investments accounted for using the equity method 645 2,846 Other financial assets 4,279,09 Inventories,544,924 Financial receivables 3,062 2,04 Trade accounts receivable 2,495 5,405 Other receivables and other assets 4,52 6,079 Income tax assets Deferred taxes 403 2,627 Marketable securities 2,639 4,893 Cash and cash equivalents 2,863 3,933 Assets held for sale ,665 69,059 Equity and liabilities RWE AG shareholders interest 3,05 6,759 RWE AG hybrid capital investors interest Non-controlling interests 49 4,292 4,94,99 Provisions 7,203 24,386 Financial liabilities 2,560 7,20 Other liabilities 6,40 4,552 Income tax liabilities 5 00 Deferred tax liabilities Liabilities held for sale 26,47 57,068 Includes innogy stake at market value of 4.0 billion as at 3 Dec ,665 69,059 Page 7

18 Net debt as at 3 December 207 ( million) RWE stand-alone RWE Group Cash and cash equivalents 2,863 3,933 Marketable securities 2,768 5,3 Other financial assets 3,038,863 t/o financial receivables against innogy,662 - Financial assets 8,669 0,927 Bonds, other notes payable, bank debt, commercial paper,64 5,099 Hedge transactions related to bonds Other financial liabilities 946 2,02 Financial liabilities 2,599 7,228 Net financial debt -6,070 6,30 Provisions for pensions and similar obligations 2,330 5,420 Capitalised surplus of plan assets over benefit obligations Provisions for nuclear waste management 6,005 6,005 Mining provisions 2,322 2,322 Provisions for dismantling wind farms Adjustments for hybrid capital (portion of relevance to the rating) Plus 50% of the hybrid capital stated as equity Minus 50% of the hybrid capital stated as debt Net debt 4,50 20,227 Page 8

19 RWE Group net debt improved due to change in provisions and refund of nuclear fuel tax Development of net debt (RWE Group) ( billion) Net debt 3 Dec 206 Cash flows from opera- Capex on property, plant Dividends incl. Change in provisions due Other changes Change in hybrid capital Others including Net debt 3 Dec 207 ting activities dividends to in provisions f/x effects non-controlling interests and equipment, intangible assets and financial assets/ divestments to contribution to nuclear energy fund Includes.7 bn of nuclear fuel tax refund and 7.0 bn contribution to nuclear energy fund. Page 9

20 Power prices and commodities Base load power prices Germany, NL ( year forward) 45 /MWh NL Base load power prices UK ( year forward) /MWh Germany 60 UK Jan'6 Jan'7 Jan'8 40 Jan'6 Jan'7 Jan'8 Coal prices API2 Cal-ahead $/t Jan'6 Jan'7 Jan'8 Gas prices TTF Cal-ahead /MWh Jan'6 Jan'7 Jan'8 Source: Bloomberg Data through to st of March 208. Carbon prices - EU ETS /t Jan'6 Jan'7 Jan'8 Page 20

21 Clean Dark (CDS) and Spark Spreads (CSS) forwards for Germany, UK and NL Germany UK 2 Netherlands Cal6 Cal7 Cal8 Cal9 Cal6 Cal7 Cal8 Cal9 Cal6 Cal7 Cal8 Cal9 /MWh 5 /MWh 5 0 Ø0.52 Ø Ø4.83 Ø-4.33 Ø3.0 Ø0.56 Ø4.6 Ø2.37 Ø5.88 Ø.52 CDS Cal 8 base load (assumed thermal efficiency: 37%) Ø5.80 Ø7.3 Ø5.59 Ø7.02 Ø5.24 Ø5.35 Ø0.99 CDS Cal 8 base load (assumed thermal efficiency: 35%) Ø3.92 Ø-2.98 Ø-5.43 Ø-.86 Ø-0.0 Ø3.43 Ø0.49 CDS Cal 8 base load (assumed thermal efficiency: 37%) CSS Cal 8 peak load (assumed thermal efficiency: 50%) CSS Cal 8 base load (assumed thermal efficiency: 49%) CSS Cal 8 base load (assumed thermal efficiency: 50%) Settlement one year ahead (Cal+) 2 Including UK carbon tax Source: RWE Supply & Trading, prices through to st of March 208 Page 2

22 RWE Investor Relations - contacts Important Links Contacts for Institutional Investors & Financial Analysts Annual and Interim Reports Investor and Analyst Conferences IR presentations & further factbooks IR videos Consensus of analysts estimates Financial Calendar 26 April 208 Annual General Meeting 2 May 208 Dividend payment 5 May 208 Interim statement on the first quarter of 208 Gunhild Grieve Head of Investor Relations Tel gunhild.grieve@rwe.com Martin Vahlbrock Tel.: martin.vahlbrock@rwe.com Dr. Burkhard Pahnke Tel.: burkhard.pahnke@rwe.com Contact for Private Shareholders Sabine Gathmann Tel.: sabine.gathmann@rwe.com Lenka Zikmundova Tel.: lenka.zikmundova@rwe.com Jérôme Hördemann Tel.: jerome.hoerdemann@rwe.com 4 August 208 Interim statement on the first half of November 208 Interim statement on the first three quarters of 208 Page 22

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